( The following table presents our fixed-rate swaps, which matured in October 2011, and the cross-currency swap which matured in February 2012, along with their notional amounts and their fixed interest rates:
| | | | | | | | | | | | | | | ($'s in thousands) | Interest Rate Swaps | | Cross-currency Swaps | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | Implied Interest Rate | | $ | 200,000 |
| | 5.64 | % | | $ | 255,000 |
| | 7.31 | % | | 200,000 |
| | 5.64 | % | | 150 |
| | 9.50 | % | | 200,000 |
| | 5.64 | % | | | | | | 200,000 |
| | 5.57 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | Total $'s / Average Rate | $ | 1,000,000 |
| | 5.62 | % | | $ | 255,150 |
| | 7.31 | % | | | | | | | | |
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the three-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | Interest rate swaps | | $ | 438 |
| | $ | (17,085 | ) | | Interest Expense | | $ | (2,990 | ) | | $ | — |
| | Net effect of swaps | | $ | — |
| | $ | 15,396 |
| | $ | 2,266 |
| | $ | 120 |
| | Interest Expense | | $ | (2,797 | ) | | $ | (2,793 | ) | | Net effect of swaps | | $ | 435 |
| | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | | | 9/30/12 | | 9/25/11 | | | | 3/31/13 | | 3/25/12 | Cross-currency swaps (1) | | Net effect of swaps | | $ | — |
| | $ | 13,622 |
| | Net effect of swaps | | $ | — |
| | $ | (4,999 | ) | Foreign currency swaps | | Net effect of swaps | | — |
| | (13,210 | ) | | Net effect of swaps | | — |
| | 6,278 |
| Interest rate swaps (2) | | | Net effect of swaps | | (1,471 | ) | | — |
| | | $ | — |
| | $ | 412 |
| | $ | (1,471 | ) | | $ | 1,279 |
| | | | | | | | | |
| | (1) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
| | (2) | The May 2011 interest rate swaps were de-designated in March 2013. |
During the quarter ended September 30, 2012March 31, 2013, in addition to the $1.0 million loss recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.27.8 million of incomeexpense related to the write off of OCI balances on our May 2011 swaps and $0.4 million of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the quarter. The effect of this amortizationthese amounts resulted in a benefitcharge to earnings of $0.29.2 million recorded in “Net effect of swaps.”
For the three-month period ended SeptemberMarch 25, 20112012, in addition to the $15.81.3 million gain recognized in income on the ineffective portion of derivatives noted in the tabletables above, $11.20.5 million of expense representing the amortization of amounts in AOCI for the swaps and $0.60.2 million of foreign currency lossgain in the quarter related to the U.S. dollar denominated Canadian term loan were recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings of $4.0 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the nine-month periods ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Nine months ended | | Nine months ended | | | | Nine months ended | | Nine months ended | | | | Nine months ended | | Nine months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | Interest rate swaps | | $ | (2,308 | ) | | $ | (36,788 | ) | | Interest Expense | | $ | (9,004 | ) | | $ | — |
| | Net effect of swaps | | $ | — |
| | $ | 43,190 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Nine months ended | | Nine months ended | | | | 9/30/12 | | 9/25/11 | Interest rate swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (3,342 | ) | Cross-currency swaps (2) | | Net effect of swaps | | (4,999 | ) | | 15,582 |
| Foreign currency swaps | | Net effect of swaps | | 6,278 |
| | (17,516 | ) | | | | | $ | 1,279 |
| | $ | (5,276 | ) | | | | | | | |
| | (1) | The September 2010 swaps became ineffective and were de-designated in February 2011. |
| | (2) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
For the nine-month period ended September 30, 2012, in addition to the $1.3 million of net gain recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.2 million of expense representing the regular amortization of amounts in AOCI for the swaps and $0.2 million of foreign currency gain in the period related to the U.S. dollar denominated Canadian term loan were recorded in the condensed consolidated statements of operations for the period. The net effect of these amounts resulted in a benefit to earnings for the period of $1.3 million recorded in “Net effect of swaps.”
For the nine-month period ended September 25, 2011, in addition to the $37.9 million gain recognized in income on the ineffective portion of derivatives noted in the table above, $33.9 million of expense representing the amortization of amounts in AOCI for the swaps and $0.5 million of foreign currency loss in the period related to the U.S. dollar denominated Canadian term loan were recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings of $3.51.0 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the twelve-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | Interest rate swaps | | $ | (873 | ) | | $ | (26,329 | ) | | Interest Expense | | $ | (12,027 | ) | | $ | — |
| | Net effect of swaps | | $ | 4,797 |
| | $ | 54,613 |
| | $ | 2,286 |
| | $ | (36,088 | ) | | Interest Expense | | $ | (12,031 | ) | | $ | (5,816 | ) | | Net effect of swaps | | $ | 435 |
| | $ | 33,493 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | | | 9/30/12 | | 9/25/11 | | | | 3/31/13 | | 3/25/12 | Interest rate swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (3,342 | ) | | Cross-currency swaps (2) | | Net effect of swaps | | (4,483 | ) | | 10,016 |
| | Cross-currency swaps (1) | | | Net effect of swaps | | — |
| | 12,911 |
| Foreign currency swaps | | Net effect of swaps | | 10,129 |
| | (17,516 | ) | | Net effect of swaps | | — |
| | (7,387 | ) | Interest rate swaps (2) | | | Net effect of swaps | | $ | (1,471 | ) | | $ | — |
| | | $ | 5,646 |
| | $ | (10,842 | ) | | $ | (1,471 | ) | | $ | 5,524 |
| | | | | | | | | |
| | (1) | The September 2010 swaps became ineffective and were de-designated in February 2011. |
| | (2) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
| | (2) | The May 2011 interest rate swaps were de-designated in March 2013. |
In addition to the $10.41.0 million of gainloss recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.17.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $192 thousand of income representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended March 31, 2013 in the condensed consolidated statements of operations. The net effect of these amounts resulted in expense for the trailing twelve month period of $8.7 million recorded in “Net effect of swaps.”
For the twelve month period ending March 25, 2012, in addition to the $39.0 million of gain recognized in income on the ineffective portion of derivatives noted in the tables above, $22.7 million of expense representing the amortization of amounts in AOCI for the swaps and a $0.40.3 million foreign currency gainloss in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended September 30,March 25, 2012 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings for the trailing twelve month period of $10.9 million recorded in “Net effect of swaps.” For the twelve month period ending September 25, 2011, in addition to the $43.8 million of gain recognized in income on the ineffective portion of derivatives noted in the table above, $45.5 million of expense representing the amortization of amounts in AOCI for the swaps and a $0.1 million foreign currency loss in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended September 25, 2011 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a charge to earnings for the trailing twelve month period of $1.816.0 million recorded in “Net effect of swaps.”
The amounts reclassified from AOCI into income for the periods noted above are in large partprimarily the result of the Partnership’s initial three-year requirement to swap at least 75% of its aggregate term debt to fixed rates under the terms of the Amended 2010 Credit Agreement. (7) Fair Value Measurements: The FASB Accounting Standards Codification (ASC) relating to fair value measurements emphasizes that fair value is a market-based measurement that should be determined based on assumptions (inputs) that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable, and valuation techniques used to measure fair value should maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Accordingly, the FASB’s ASC establishes a hierarchal disclosure framework that ranks the quality and reliability of information used to determine fair values. The hierarchy is associated with the level of pricing observability utilized in measuring fair value and defines three levels of inputs to the fair value measurement process—quoted prices are the most reliable valuation inputs, whereas model values that include inputs based on unobservable data are the least reliable. Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety. The three broad levels of inputs defined by the fair value hierarchy are as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The table below presents the balances of assets and liabilities measured at fair value as of September 30, 2012March 31, 2013, December 31, 2011,2012, and SeptemberMarch 25, 20112012 on a recurring basis: | | | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | September 30, 2012 | | | | | | | | | | March 31, 2013 | | | | | | | | | | (In thousands) | | | | | | | | | | | | | | | | | Interest rate swap agreements (1) | | | $ | (23,388 | ) | | $ | — |
| | $ | (23,388 | ) | | $ | — |
| Interest rate swap agreements (2) | | | (7,643 | ) | | — |
| | (7,643 | ) | | — |
| Net derivative liability | | | $ | (31,031 | ) | | $ | — |
| | $ | (31,031 | ) | | $ | — |
| | | | | | | | | | | December 31, 2012 | | | | | | | | | | Interest rate swap agreements (1) | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | | | | | | | | | December 31, 2011 | | | | | | | | | | March 25, 2012 | | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,400 | ) | | $ | — |
| | $ | (32,400 | ) | | $ | — |
| | $ | (32,280 | ) | | $ | — |
| | $ | (32,280 | ) | | $ | — |
| Cross-currency swap agreements (2) | | (37,617 | ) | | — |
| | (37,617 | ) | | — |
| | Foreign currency swap agreements (2) | | (13,155 | ) | | — |
| | (13,155 | ) | | — |
| | Net derivative liability | | $ | (83,172 | ) | | $ | — |
| | $ | (83,172 | ) | | $ | — |
| | $ | (32,280 | ) | | $ | — |
| | $ | (32,280 | ) | | $ | — |
| | | | | | | | | | | September 25, 2011 | | | | | | | | | | Interest rate swap agreements (1) | | $ | (33,835 | ) | | $ | — |
| | $ | (33,835 | ) | | $ | — |
| | Interest rate swap agreements (2) | | (4,797 | ) | | — |
| | (4,797 | ) | | — |
| | Cross-currency swap agreements (2) | | (37,723 | ) | | — |
| | (37,723 | ) | | — |
| | Foreign currency swap agreements (2) | | (16,846 | ) | | — |
| | (16,846 | ) | | — |
| | Net derivative liability | | $ | (93,201 | ) | | $ | — |
| | $ | (93,201 | ) | | $ | — |
| |
| | (1) | IncludedDesignated as cash flow hedges and are included in “Derivative Liability” on the Unaudited Condensed Consolidated Balance Sheet |
| | (2) | IncludedNot designated as cash flow hedges and are included in "Current derivative liability""Derivative Liability" on the Unaudited Condensed Consolidated Balance Sheet |
Fair values of the interest rate cross-currency and foreign currency swap agreements are determined using significant inputs, including the LIBOR and foreign currency forward curves, that are considered Level 2 observable market inputs. In addition, the Partnership considered the effect of its credit and non-performance risk on the fair values provided, and recognized an adjustment decreasing the net derivative liability by approximately $1.10.9 million as of September 30, 2012March 31, 2013. There were no assets measured at fair value on a non-recurring basis at September 30, 2012March 31, 2013, December 31, 2011, or SeptemberMarch 25, 20112012, except for as described below. At the end of the third quarter in 2012, the Partnership concluded based on operating results, as well as updated forecasts, and changes in market conditions, that a review of the carrying value of long-lived assets at Wildwater Kingdom was warranted. After performing its review, the Partnership determined that a portion of the park's fixed assets were impaired. Based on Level 3 unobservable valuation assumptions and other market inputs, the assets were marked to a fair value of $19.8 million, resulting in an impairment charge of $25.0 million during the quarter. In 2010, the Partnership concluded based on operating results, as well as updated forecasts, that a review of the carrying value of long-lived assets at California's Great America was warranted. After performing its review, the Partnership determined that a portion of the park's fixed assets, the majority of which were originally recorded with the PPI acquisition, were impaired. As a result, it recognized $62.0 million of fixed-asset impairment during the fourth quarter of 2010.
After completing its 2010 annual review of indefinite-lived intangibles for impairment, the Partnership concluded that a portion of trade-names originally recorded with the PPI acquisition were impaired. As a result, the Partnership recognized approximately $0.9 million of trade-name impairment during the fourth quarter of 2010. A relief-from-royalty model is used to determine whether the fair value of trade-names exceeds their carrying amount. The fair value of the trade-names is determined as the present value of fees avoided by owning the respective trade-name.
The fair value of term debt at September 30, 2012March 31, 2013 was approximately $1,125.7637.1 million based on borrowing rates currently available to the Partnership on long-term debt with similar terms and average maturities. The fair value of the Partnership's notes at September 30, 2012March 31, 2013 was approximately $352.6950.1 million based on borrowing rates availablepublic trading levels as of that date to the Partnership on notes with similar terms and maturities.date. The fair value of the term debt was based on Level 2 inputs and the notes were based on Level 21 inputs.
(8) Earnings per Unit: Net income (loss) per limited partner unit is calculated based on the following unit amounts: | | | | Three months ended | | Nine months ended | | Twelve months ended | | Three months ended | | Twelve months ended | | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | 3/31/2013 | | 3/25/2012 | | 3/31/2013 | | 3/25/2012 | | | (In thousands except per unit amounts) | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,611 |
| | 55,346 |
| | 55,473 |
| | 55,345 |
| | 55,440 |
| | 55,342 |
| | 55,854 |
| | 55,378 |
| | 55,694 |
| | 55,353 |
| Effect of dilutive units: | | | | | | | | | | | | | | | | | | | | | Unit options and restricted unit awards | | 45 |
| | — |
| | 42 |
| | — |
| | 31 |
| | — |
| | — |
| | — |
| | 63 |
| | 2 |
| Phantom units | | 336 |
| | 482 |
| | 333 |
| | 502 |
| | 416 |
| | 544 |
| | — |
| | — |
| | 299 |
| | 492 |
| Diluted weighted average units outstanding | | 55,992 |
| | 55,828 |
| | 55,848 |
| | 55,847 |
| | 55,887 |
| | 55,886 |
| | 55,854 |
| | 55,378 |
| | 56,056 |
| | 55,847 |
| Net income (loss) per unit - basic | | $ | 2.53 |
| | $ | 2.75 |
| | $ | 2.01 |
| | $ | 1.29 |
| | $ | 2.00 |
| | $ | 0.15 |
| | $ | (1.95 | ) | | $ | (1.18 | ) | | $ | 1.04 |
| | $ | 1.53 |
| Net income (loss) per unit - diluted | | $ | 2.51 |
| | $ | 2.73 |
| | $ | 2.00 |
| | $ | 1.28 |
| | $ | 1.98 |
| | $ | 0.15 |
| | $ | (1.95 | ) | | $ | (1.18 | ) | | $ | 1.04 |
| | $ | 1.52 |
| | | | | | | | | | | | | | | | | | | | | |
The effect of unit options on the three nine and twelve months ended September 30,March 31, 2013, had they not been out of the money or antidilutive, would have been zero and 16,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three and twelve months ended March 25, 2012, had they not been out of the money or antidilutive, would have been 66,0002,000, 34,000and 36,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three, nine and twelve months ended September 25, 2011, had they not been out of the money or antidilutive, would have been 57,000, 67,000 and 127,00047,000 units, respectively. (9) Income and Partnership Taxes: Under the applicable accounting rules, income taxes are recognized for the amount of taxes payable by the Partnership’s corporate subsidiaries for the current year and for the impact of deferred tax assets and liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. The income tax provision (benefit) for interim periods is determined by applying an estimated annual effective tax rate to the quarterly income (loss) of the Partnership’s corporate subsidiaries. For 2012, the estimated annual effective rate includes the effect of an anticipated adjustment to the valuation allowance that relates to foreign tax credit carry-forwards arising from the corporate subsidiaries. The amount of this adjustment has a disproportionate impact on the annual effective tax rate that results in a significant variation in the customary relationship between the provision for taxes and income before taxes in interim periods. In addition to income taxes on its corporate subsidiaries, the Partnership pays a publicly traded partnership tax (PTP tax) on partnership-level gross income (net revenues less cost of food, merchandise and games). As such, the Partnership’s total provision (benefit) for taxes includes amounts for both the PTP tax and for income taxes on its corporate subsidiaries. During the second quarterAs of 2012 the Partnership adjusted its deferred tax assets and liabilities to reflect the impact of changes to the enacted statutory tax rates in Canada and recorded a corresponding $1.8 million income tax provision. During the first quarter of 20122013 the Partnership accruedhas recorded $1.01.1 million forof unrecognized tax benefits including interest and/or penalties related to state and local tax filing positions. The Partnership recognizes interest and/or penalties related to unrecognized tax benefits in the income tax provision. The Partnership does not anticipate that the balance of the unrecognized tax benefit will change significantly over the next 12 months.
(10) Contingencies:
The Partnership is a party to a number of lawsuits arising in the normal course of business. In the opinion of management, none of these matters is expected to have a material effect in the aggregate on the Partnership's financial statements.
(11) Immaterial Restatement:
We have made two separate corrections relating to our use of the composite depreciation method.
The Partnership usesfirst correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the 3 and 12 month periods ended March 25, 2012, related to a misapplication of the composite depreciation method for the group of assets acquired as a whole in 1983, as well as for groups of assets in each subsequent business acquisition.method. Upon the normal retirement of an asset within a composite group, the Partnership'sour practice generally hashad been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of the Partnership'sour financial statements for the three months ended July 1,in 2012, management determined that this methodology was not appropriate. As a result, the Partnershipwe revised the useful lives of itsour composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation). Management evaluated
The second correction, which impacts the amountBalance Sheet at March 25, 2012 and naturethe Statement of these adjustmentsOperations and concludedOther Comprehensive Income for the 12 month period ended March 25, 2012, reflects a subsequent determination that they werea disposition from our composite group of assets was considered to be unusual. In certain situations under the composite method, disposals are considered unusual and, accordingly, losses are not materialincluded in the composite depreciation pool but are rather charged immediately to eitherexpense. In 2013, the Partnership's prior annual or quarterly financial statements. Nonetheless,initial determination of whether a specific asset retired under the historical financial statement amounts includedcomposite method of depreciation in this filing have been corrected for this error. The Partnership expects to likewise correct previously presented2011 was normal was reviewed in connection with responding
historical financial statements to an open SEC comment letter. We ultimately concluded that such disposition was unusual and that a $8.8 millioncharge should be included in future filings, including the annual financial statements to be includedreflected in the Partnership's Annual Report on Form 10-K for the year ending December 31, 2012.2011 financial statements.
The tables below detailreflect the effectsimpact on the financial statements of such depreciation adjustments (including the related deferred income tax impact)corrections as described above. The "As originally filed" amounts represent amounts as filed in the Partnership's 1st quarter 2012 Form 10-Q . The "As restated" amounts in all columns represent amounts after restatement for the first correction which was disclosed in the Partnership's 2nd quarter Form 10-Q and the second correction which was disclosed in the Partnership's 2012 Annual Report on previously presented historical financial statement amounts:Form 10-K/A filed on May 10, 2013.
| | Balance Sheets | | | | | | 12/31/2011 | | 9/25/2011 | | Balance Sheet | | | (In thousands) | | 3/25/2012 | Accumulated depreciation | | | | | As originally filed | $ | (1,044,589 | ) | | $ | (1,044,353 | ) | $ | (1,046,162 | ) | Correction | (18,599 | ) | | (18,252 | ) | | Corrections | | (27,622 | ) | As restated | $ | (1,063,188 | ) | | $ | (1,062,605 | ) | $ | (1,073,784 | ) | Total assets | | | | | As originally filed | $ | 2,074,557 |
| | $ | 2,159,339 |
| $ | 2,113,126 |
| Correction | (18,599 | ) | | (18,252 | ) | | Corrections | | (27,622 | ) | As restated | $ | 2,055,958 |
| | $ | 2,141,087 |
| $ | 2,085,504 |
| Deferred Tax Liability | | | | | As originally filed | $ | 135,446 |
| | $ | 125,588 |
| $ | 135,746 |
| Correction | (1,679 | ) | | (1,615 | ) | | Corrections | | (5,019 | ) | As restated | $ | 133,767 |
| | $ | 123,973 |
| $ | 130,727 |
| Limited Partners' Equity | | | | | As originally filed | $ | 182,438 |
| | $ | 221,611 |
| $ | 96,417 |
| Correction | (16,920 | ) | | (16,637 | ) | | Corrections | | (22,603 | ) | As restated | $ | 165,518 |
| | $ | 204,974 |
| $ | 73,814 |
|
| | Statements of Operations and Other Comprehensive Income | | | Three months ended | | Nine months ended | | Twelve months ended | | (In thousands except per unit amounts) | | | Three months ended | | Twelve months ended | | | 9/25/2011 | | 9/25/2011 | | 9/25/2011 | | 3/25/2012 | | 3/25/2012 | Depreciation and amortization | | | | | | | | | | | As originally filed | | $ | 62,619 |
| | $ | 109,173 |
| | $ | 124,345 |
| | $ | 3,846 |
| | $ | 123,861 |
| Correction | | 829 |
| | 1,684 |
| | 2,037 |
| | Corrections | | | 233 |
| | 2,031 |
| As restated | | | $ | 4,079 |
| | $ | 125,892 |
| Loss on impairment / retirement of fixed assets, net | | | | | | As originally filed | | | $ | 92 |
| | $ | 2,461 |
| Corrections | | | — |
| | 8,790 |
| As restated | | $ | 63,448 |
| | $ | 110,857 |
| | $ | 126,382 |
| | $ | 92 |
| | $ | 11,251 |
| Income (loss) before tax | | | | | | | | | | | As originally filed | | $ | 190,891 |
| | $ | 95,031 |
| | $ | (2,271 | ) | | $ | (86,721 | ) | | $ | 101,565 |
| Correction | | (829 | ) | | (1,684 | ) | | (2,037 | ) | | Corrections | | | (233 | ) | | (10,821 | ) | As restated | | $ | 190,062 |
| | $ | 93,347 |
| | $ | (4,308 | ) | | $ | (86,954 | ) | | $ | 90,744 |
| Provision (benefit) for taxes | Provision (benefit) for taxes | | | | | Provision (benefit) for taxes | | | As originally filed | | $ | 38,161 |
| | $ | 22,327 |
| | $ | (11,808 | ) | | $ | (21,539 | ) | | $ | 9,897 |
| Correction | | (317 | ) | | (554 | ) | | (616 | ) | | Corrections | | | — |
| | (3,960 | ) | As restated | | $ | 37,844 |
| | $ | 21,773 |
| | $ | (12,424 | ) | | $ | (21,539 | ) | | $ | 5,937 |
| Net income (loss) | Net income (loss) | | | | | Net income (loss) | | | As originally filed | | $ | 152,730 |
| | $ | 72,704 |
| | $ | 9,537 |
| | $ | (65,182 | ) | | $ | 91,668 |
| Correction | | (512 | ) | | (1,130 | ) | | (1,421 | ) | | Corrections | | | (233 | ) | | (6,861 | ) | As restated | | $ | 152,218 |
| | $ | 71,574 |
| | $ | 8,116 |
| | $ | (65,415 | ) | | $ | 84,807 |
| | | | | | | | | | | | Basic earnings per limited partner unit: | Basic earnings per limited partner unit: | | | | | Basic earnings per limited partner unit: | | | As originally filed | | $ | 2.76 |
| | $ | 1.31 |
| | $ | 0.17 |
| | $ | (1.18 | ) | | $ | 1.66 |
| Correction | | (0.01 | ) | | (0.02 | ) | | (0.02 | ) | | Corrections | | | — |
| | (0.13 | ) | As restated | | $ | 2.75 |
| | $ | 1.29 |
| | $ | 0.15 |
| | $ | (1.18 | ) | | $ | 1.53 |
| | | | | | | | | | | | Diluted earnings per limited partner unit: | Diluted earnings per limited partner unit: | | | | | Diluted earnings per limited partner unit: | | | As originally filed | | $ | 2.74 |
| | $ | 1.30 |
| | $ | 0.17 |
| | $ | (1.18 | ) | | $ | 1.64 |
| Correction | | (0.01 | ) | | (0.02 | ) | | (0.02 | ) | | Corrections | | | — |
| | (0.12 | ) | As restated | | $ | 2.73 |
| | $ | 1.28 |
| | $ | 0.15 |
| | $ | (1.18 | ) | | $ | 1.52 |
|
(12) Changes in Accumulated Other Comprehensive Income by Component:
(12)The following tables reflect the changes in Accumulated other comprehensive income (loss) related to limited partners' equity for the period ended March 31, 2013:
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | | Gains and | | | | | | | | Losses on | | Foreign | | | | | | Cash Flow | | Currency | | | | | | Hedges | | Items | | Total | Balance at December 31, 2012 | | $ | (25,749 | ) | | $ | (2,751 | ) | | $ | (28,500 | ) | | | | | | | | | | Other comprehensive | | | | | | | | income before | | | | | | | | reclassifications | | 1,940 |
| | 301 |
| | 301 |
| | | | | | | | | | Amounts reclassified | | | | | | | | from accumulated | | | | | | | | other comprehensive | | | | | | | | income (2) | | 6,945 |
| | — |
| | 8,885 |
| | | | | | | | | Net current-period other | | | | | | | comprehensive income | | 8,885 |
| | 301 |
| | 9,186 |
| | | | | | | | | March 31, 2013 | | $ | (16,864 | ) | | $ | (2,450 | ) | | $ | (19,314 | ) |
(1) All amounts are net of tax. Amounts in parentheses indicate debits. (2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.
| | | | | | | | | | | Reclassifications Out of Accumulated Other Comprehensive Income (1) | (In thousands) | | | | | | | | Details about Accumulated Other Comprehensive Income Components | | Amount Reclassified from Accumulated Other Comprehensive Income | | Affected Line Item in the Statement Where Net Income is Presented | Gains and losses on cash flow hedges | | | | | | | Interest rate contracts | | $ | 8,174 |
| | | Net effect of swaps | | | | $ | 8,174 |
| | | Total before tax | | | | (1,229 | ) | | | Provision (benefit) for taxes | | | | $ | 6,945 |
| | | Net of tax |
(1) Amounts in parentheses indicate debits.
(13) Consolidating Financial Information of Guarantors and Issuers:
Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), and Magnum Management Corporation ("Magnum") are the co-issuers of the Partnership's 9.125% notes and the 5.25% notes (see Note 5). The notes have been fully and unconditionally guaranteed, on a joint and several basis, by each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum) that guarantees the Partnership's senior secured credit facilities. There are no non-guarantor subsidiaries.
The following consolidating schedules present condensed financial information for Cedar Fair, L.P., Cedar Canada, and Magnum, the co-issuers, and each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum), the guarantors (on a combined basis), as of September 30, 2012March 31, 2013, December 31, 2011,2012, and SeptemberMarch 25, 20112012 and for the three nine and twelve month periods ended
September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, we have included the accompanying condensed consolidating financial statements.
Since Cedar Fair, L.P., Cedar Canada and Magnum are co-issuers of the notes and co-borrowers under the Amended 20102013 Credit Agreement, all outstanding debt has been equally reflected within each co-issuer's September 30, 2012March 31, 2013, December 31, 20112012 and SeptemberMarch 25, 20112012 balance sheets in the accompanying condensed consolidating financial statements.
The consolidating financial information has been corrected for the information described in Note 11.12.
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
September 30, 2012
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| Receivables | | 3 |
| | 108,211 |
| | 64,153 |
| | 478,372 |
| | (621,382 | ) | | 29,357 |
| Inventories | | — |
| | 1,584 |
| | 2,742 |
| | 29,267 |
| | — |
| | 33,593 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Income tax refundable | | — |
| | — |
| | 10,454 |
| | — |
| | — |
| | 10,454 |
| Other current assets | | 929 |
| | 2,065 |
| | 674 |
| | 3,775 |
| | — |
| | 7,443 |
| | | 43,932 |
| | 120,362 |
| | 119,073 |
| | 525,309 |
| | (621,382 | ) | | 187,294 |
| Property and Equipment (net) | | 425,747 |
| | 1,025 |
| | 272,951 |
| | 864,121 |
| | — |
| | 1,563,844 |
| Investment in Park | | 577,612 |
| | 791,617 |
| | 118,514 |
| | 63,384 |
| | (1,551,127 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 127,384 |
| | 111,218 |
| | — |
| | 247,663 |
| Other Intangibles, net | | — |
| | — |
| | 18,039 |
| | 22,826 |
| | — |
| | 40,865 |
| Deferred Tax Asset | | — |
| | 39,320 |
| | — |
| | — |
| | (39,320 | ) | | — |
| Intercompany Receivable | | 877,208 |
| | 1,069,721 |
| | 1,116,623 |
| | — |
| | (3,063,552 | ) | | — |
| Other Assets | | 23,361 |
| | 15,580 |
| | 8,925 |
| | 2,305 |
| | — |
| | 50,171 |
| | | $ | 1,956,921 |
| | $ | 2,037,625 |
| | $ | 1,781,509 |
| | $ | 1,589,163 |
| | $ | (5,275,381 | ) | | $ | 2,089,837 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 210,936 |
| | $ | 116,160 |
| | $ | 29,248 |
| | $ | 287,634 |
| | $ | (621,382 | ) | | $ | 22,596 |
| Deferred revenue | | — |
| | — |
| | 4,544 |
| | 30,138 |
| | — |
| | 34,682 |
| Accrued interest | | 735 |
| | 195 |
| | 6,082 |
| | — |
| | — |
| | 7,012 |
| Accrued taxes | | 5,818 |
| | 42,090 |
| | — |
| | 4,496 |
| | — |
| | 52,404 |
| Accrued salaries, wages and benefits | | — |
| | 24,864 |
| | 2,365 |
| | 8,990 |
| | — |
| | 36,219 |
| Self-insurance reserves | | — |
| | 4,751 |
| | 1,698 |
| | 16,643 |
| | — |
| | 23,092 |
| Other accrued liabilities | | 824 |
| | 4,097 |
| | 2,417 |
| | 3,505 |
| | — |
| | 10,843 |
| | | 218,313 |
| | 192,157 |
| | 46,354 |
| | 351,406 |
| | (621,382 | ) | | 186,848 |
| Deferred Tax Liability | | — |
| | — |
| | 59,462 |
| | 122,952 |
| | (39,320 | ) | | 143,094 |
| Derivative Liability | | 20,801 |
| | 13,907 |
| | — |
| | — |
| | — |
| | 34,708 |
| Other Liabilities | | — |
| | 3,880 |
| | — |
| | 3,500 |
| | — |
| | 7,380 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,131,100 |
| | 1,131,100 |
| | 1,131,100 |
| | — |
| | (2,262,200 | ) | | 1,131,100 |
| Notes | | 400,676 |
| | 400,676 |
| | 400,676 |
| | — |
| | (801,352 | ) | | 400,676 |
| | | 1,531,776 |
| | 1,531,776 |
| | 1,531,776 |
| | — |
| | (3,063,552 | ) | | 1,531,776 |
| | | | | | | | | | | | | | Equity | | 186,031 |
| | 295,905 |
| | 143,917 |
| | 1,111,305 |
| | (1,551,127 | ) | | 186,031 |
| | | $ | 1,956,921 |
| | $ | 2,037,625 |
| | $ | 1,781,509 |
| | $ | 1,589,163 |
| | $ | (5,275,381 | ) | | $ | 2,089,837 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2011
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 512 |
| | $ | 31,540 |
| | $ | 3,472 |
| | $ | — |
| | $ | 35,524 |
| Receivables | | — |
| | 62,408 |
| | 69,285 |
| | 412,095 |
| | (536,177 | ) | | 7,611 |
| Inventories | | — |
| | 1,547 |
| | 2,703 |
| | 28,819 |
| | — |
| | 33,069 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Other current assets | | 508 |
| | 13,461 |
| | 1,027 |
| | 7,822 |
| | (10,852 | ) | | 11,966 |
| | | 508 |
| | 84,167 |
| | 105,327 |
| | 455,542 |
| | (547,029 | ) | | 98,515 |
| Property and Equipment (net) | | 455,579 |
| | 1,044 |
| | 266,111 |
| | 896,758 |
| | — |
| | 1,619,492 |
| Investment in Park | | 518,819 |
| | 661,251 |
| | 118,385 |
| | 40,481 |
| | (1,338,936 | ) | | — |
| Intercompany Note Receivable | | — |
| | 93,845 |
| | — |
| | — |
| | (93,845 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 123,210 |
| | 111,219 |
| | — |
| | 243,490 |
| Other Intangibles, net | | — |
| | — |
| | 17,448 |
| | 22,825 |
| | — |
| | 40,273 |
| Deferred Tax Asset | | — |
| | 47,646 |
| | — |
| | — |
| | (47,646 | ) | | — |
| Intercompany Receivable | | 887,344 |
| | 1,084,112 |
| | 1,141,302 |
| | — |
| | (3,112,758 | ) | | — |
| Other Assets | | 27,641 |
| | 16,158 |
| | 9,353 |
| | 1,036 |
| | — |
| | 54,188 |
| | | $ | 1,898,952 |
| | $ | 1,988,223 |
| | $ | 1,781,136 |
| | $ | 1,527,861 |
| | $ | (5,140,214 | ) | | $ | 2,055,958 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 15,921 |
| | $ | 15,921 |
| | $ | 15,921 |
| | $ | — |
| | $ | (31,842 | ) | | $ | 15,921 |
| Accounts payable | | 175,968 |
| | 144,868 |
| | 25,631 |
| | 202,566 |
| | (536,177 | ) | | 12,856 |
| Deferred revenue | | — |
| | — |
| | 2,891 |
| | 26,703 |
| | — |
| | 29,594 |
| Accrued interest | | 198 |
| | 131 |
| | 15,433 |
| | — |
| | — |
| | 15,762 |
| Accrued taxes | | 3,909 |
| | — |
| | 7,374 |
| | 15,577 |
| | (10,852 | ) | | 16,008 |
| Accrued salaries, wages and benefits | | — |
| | 26,916 |
| | 1,076 |
| | 5,396 |
| | — |
| | 33,388 |
| Self-insurance reserves | | — |
| | 3,977 |
| | 1,711 |
| | 15,555 |
| | — |
| | 21,243 |
| Current derivative liability | | — |
| | — |
| | 50,772 |
| | — |
| | — |
| | 50,772 |
| Other accrued liabilities | | 1,247 |
| | 5,568 |
| | 252 |
| | 832 |
| | — |
| | 7,899 |
| | | 197,243 |
| | 197,381 |
| | 121,061 |
| | 266,629 |
| | (578,871 | ) | | 203,443 |
| Deferred Tax Liability | | — |
| | — |
| | 58,463 |
| | 122,950 |
| | (47,646 | ) | | 133,767 |
| Derivative Liability | | 19,451 |
| | 12,949 |
| | — |
| | — |
| | — |
| | 32,400 |
| Other Liabilities | | — |
| | 4,090 |
| | — |
| | — |
| | — |
| | 4,090 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 93,845 |
| | (93,845 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,140,179 |
| | 1,140,179 |
| | 1,140,179 |
| | — |
| | (2,280,358 | ) | | 1,140,179 |
| Notes | | 400,279 |
| | 400,279 |
| | 400,279 |
| | — |
| | (800,558 | ) | | 400,279 |
| | | 1,540,458 |
| | 1,540,458 |
| | 1,540,458 |
| | — |
| | (3,080,916 | ) | | 1,540,458 |
| | | | | | | | | | | | | | Equity | | 141,800 |
| | 233,345 |
| | 61,154 |
| | 1,044,437 |
| | (1,338,936 | ) | | 141,800 |
| | | $ | 1,898,952 |
| | $ | 1,988,223 |
| | $ | 1,781,136 |
| | $ | 1,527,861 |
| | $ | (5,140,214 | ) | | $ | 2,055,958 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING BALANCE SHEET September 25, 2011March 31, 2013
(In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | | | | | | | | | | | | | Cash and cash equivalents | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| Receivables | | 3 |
| | 45,663 |
| | 81,773 |
| | 587,910 |
| | (676,810 | ) | | 38,539 |
| | 682 |
| | 79,472 |
| | 67,302 |
| | 436,595 |
| | (570,709 | ) | | 13,342 |
| Inventories | | — |
| | 1,684 |
| | 2,951 |
| | 32,311 |
| | — |
| | 36,946 |
| | — |
| | 3,645 |
| | 3,032 |
| | 32,386 |
| | — |
| | 39,063 |
| Current deferred tax asset | | — |
| | 1,686 |
| | 779 |
| | 3,409 |
| | — |
| | 5,874 |
| | — |
| | 31,543 |
| | 816 |
| | 3,663 |
| | — |
| | 36,022 |
| Other current assets | | 875 |
| | 2,091 |
| | 774 |
| | 5,559 |
| | — |
| | 9,299 |
| | 207 |
| | 9,630 |
| | 1,618 |
| | 16,260 |
| | — |
| | 27,715 |
| | | 49,878 |
| | 53,613 |
| | 122,750 |
| | 637,539 |
| | (676,810 | ) | | 186,970 |
| | 889 |
| | 125,022 |
| | 76,893 |
| | 494,085 |
| | (570,709 | ) | | 126,180 |
| Property and Equipment (net) | | 455,663 |
| | 1,055 |
| | 257,802 |
| | 900,759 |
| | — |
| | 1,615,279 |
| | 457,484 |
| | 1,003 |
| | 262,941 |
| | 849,424 |
| | — |
| | 1,570,852 |
| Investment in Park | | 534,400 |
| | 681,893 |
| | 118,514 |
| | 53,988 |
| | (1,388,795 | ) | | — |
| | 419,501 |
| | 714,013 |
| | 115,401 |
| | 21,689 |
| | (1,270,604 | ) | | — |
| Intercompany Note Receivable | | — |
| | 269,500 |
| | — |
| | — |
| | (269,500 | ) | | — |
| | Goodwill | | 9,061 |
| | — |
| | 121,869 |
| | 111,219 |
| | — |
| | 242,149 |
| | 9,061 |
| | — |
| | 123,374 |
| | 111,218 |
| | — |
| | 243,653 |
| Other Intangibles, net | | — |
| | — |
| | 17,258 |
| | 22,809 |
| | — |
| | 40,067 |
| | — |
| | — |
| | 17,470 |
| | 22,853 |
| | — |
| | 40,323 |
| Deferred Tax Asset | | — |
| | 49,845 |
| | — |
| | — |
| | (49,845 | ) | | — |
| | — |
| | 34,890 |
| | — |
| | 90 |
| | (34,980 | ) | | — |
| Intercompany Receivable | | 887,219 |
| | 1,083,987 |
| | 1,141,302 |
| | — |
| | (3,112,508 | ) | | — |
| | 877,336 |
| | 1,165,652 |
| | 1,211,522 |
| | — |
| | (3,254,510 | ) | | — |
| Other Assets | | 28,962 |
| | 16,884 |
| | 9,616 |
| | 1,160 |
| | — |
| | 56,622 |
| | 14,581 |
| | 10,291 |
| | 7,473 |
| | 2,303 |
| | — |
| | 34,648 |
| | | $ | 1,965,183 |
| | $ | 2,156,777 |
| | $ | 1,789,111 |
| | $ | 1,727,474 |
| | $ | (5,497,458 | ) | | $ | 2,141,087 |
| | $ | 1,778,852 |
| | $ | 2,050,871 |
| | $ | 1,815,074 |
| | $ | 1,501,662 |
| | $ | (5,130,803 | ) | | $ | 2,015,656 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | Current maturities of long-term debt | | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | $ | 189,887 |
| | $ | 281,605 |
| | $ | 27,488 |
| | $ | 206,288 |
| | $ | (676,810 | ) | | $ | 28,458 |
| | 103,654 |
| | 215,425 |
| | 3,891 |
| | 285,182 |
| | (570,709 | ) | | 37,443 |
| Deferred revenue | | — |
| | — |
| | 3,701 |
| | 28,993 |
| | — |
| | 32,694 |
| | — |
| | — |
| | 6,679 |
| | 59,505 |
| | — |
| | 66,184 |
| Accrued interest | | 6,115 |
| | 1,364 |
| | 6,489 |
| | — |
| | — |
| | 13,968 |
| | 1,444 |
| | 916 |
| | 5,979 |
| | — |
| | — |
| | 8,339 |
| Accrued taxes | | 5,189 |
| | 23,550 |
| | — |
| | 4,354 |
| | — |
| | 33,093 |
| | 4,790 |
| | 390 |
| | 331 |
| | 3,489 |
| | — |
| | 9,000 |
| Accrued salaries, wages and benefits | | — |
| | 29,373 |
| | 2,341 |
| | 9,395 |
| | — |
| | 41,109 |
| | — |
| | 13,483 |
| | 1,095 |
| | 5,604 |
| | — |
| | 20,182 |
| Self-insurance reserves | | — |
| | 3,130 |
| | 1,658 |
| | 17,154 |
| | — |
| | 21,942 |
| | — |
| | 5,324 |
| | 1,696 |
| | 16,537 |
| | — |
| | 23,557 |
| Current derivative liability | | 4,797 |
| | — |
| | 54,569 |
| | — |
| | — |
| | 59,366 |
| | Other accrued liabilities | | 1,206 |
| | 4,840 |
| | 1,277 |
| | 4,924 |
| | — |
| | 12,247 |
| | 589 |
| | 5,161 |
| | 133 |
| | 1,984 |
| | — |
| | 7,867 |
| | | 207,194 |
| | 343,862 |
| | 97,523 |
| | 271,108 |
| | (676,810 | ) | | 242,877 |
| | 116,777 |
| | 246,999 |
| | 26,104 |
| | 372,301 |
| | (583,309 | ) | | 178,872 |
| Deferred Tax Liability | | — |
| | — |
| | 61,405 |
| | 112,413 |
| | (49,845 | ) | | 123,973 |
| | — |
| | — |
| | 62,700 |
| | 126,867 |
| | (34,980 | ) | | 154,587 |
| Derivative Liability | | 20,459 |
| | 13,376 |
| | — |
| | — |
| | — |
| | 33,835 |
| | 18,594 |
| | 12,437 |
| | — |
| | — |
| | — |
| | 31,031 |
| Other Liabilities | | — |
| | 2,872 |
| | — |
| | — |
| | — |
| | 2,872 |
| | — |
| | 4,185 |
| | — |
| | 3,500 |
| | — |
| | 7,685 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 269,500 |
| | (269,500 | ) | | — |
| | Long-Term Debt: | | | | | | | | | | | | | | | | | | | | | | | | | Revolving credit loans | | | 96,000 |
| | 96,000 |
| | 96,000 |
| | — |
| | (192,000 | ) | | 96,000 |
| Term debt | | 1,156,100 |
| | 1,156,100 |
| | 1,156,100 |
| | — |
| | (2,312,200 | ) | | 1,156,100 |
| | 623,700 |
| | 623,700 |
| | 623,700 |
| | — |
| | (1,247,400 | ) | | 623,700 |
| Notes | | 400,154 |
| | 400,154 |
| | 400,154 |
| | — |
| | (800,308 | ) | | 400,154 |
| | 901,255 |
| | 901,255 |
| | 901,255 |
| | — |
| | (1,802,510 | ) | | 901,255 |
| | | 1,556,254 |
| | 1,556,254 |
| | 1,556,254 |
| | — |
| | (3,112,508 | ) | | 1,556,254 |
| | 1,620,955 |
| | 1,620,955 |
| | 1,620,955 |
| | — |
| | (3,241,910 | ) | | 1,620,955 |
| | | | | | | | | | | | | | | | | | | | | | | | | | Equity | | 181,276 |
| | 240,413 |
| | 73,929 |
| | 1,074,453 |
| | (1,388,795 | ) | | 181,276 |
| | 22,526 |
| | 166,295 |
| | 105,315 |
| | 998,994 |
| | (1,270,604 | ) | | 22,526 |
| | | $ | 1,965,183 |
| | $ | 2,156,777 |
| | $ | 1,789,111 |
| | $ | 1,727,474 |
| | $ | (5,497,458 | ) | | $ | 2,141,087 |
| | $ | 1,778,852 |
| | $ | 2,050,871 |
| | $ | 1,815,074 |
| | $ | 1,501,662 |
| | $ | (5,130,803 | ) | | $ | 2,015,656 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOMEBALANCE SHEET For the Three Months Ended September 30,December 31, 2012 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 79,663 |
| | $ | 141,134 |
| | $ | 88,334 |
| | $ | 464,902 |
| | $ | (220,588 | ) | | $ | 553,445 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,447 |
| | 40,906 |
| | — |
| | 47,353 |
| Operating expenses | | 1,368 |
| | 74,191 |
| | 18,736 |
| | 289,604 |
| | (220,588 | ) | | 163,311 |
| Selling, general and administrative | | 1,853 |
| | 32,627 |
| | 4,822 |
| | 13,691 |
| | — |
| | 52,993 |
| Depreciation and amortization | | 19,209 |
| | 10 |
| | 9,430 |
| | 32,098 |
| | — |
| | 60,747 |
| Loss on impairment / retirement of fixed assets, net | | 25,000 |
| | — |
| | — |
| | — |
| | — |
| | 25,000 |
| | | 47,430 |
| | 106,828 |
| | 39,435 |
| | 376,299 |
| | (220,588 | ) | | 349,404 |
| Operating income | | 32,233 |
| | 34,306 |
| | 48,899 |
| | 88,603 |
| | — |
| | 204,041 |
| Interest expense (income), net | | 12,213 |
| | 7,258 |
| | 9,897 |
| | (2,518 | ) | | — |
| | 26,850 |
| Net effect of swaps | | (104 | ) | | (71 | ) | | — |
| | — |
| | — |
| | (175 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (15,035 | ) | | — |
| | — |
| | (15,035 | ) | Other (income) expense | | 186 |
| | (2,043 | ) | | 512 |
| | 1,345 |
| | — |
| | — |
| Income from investment in affiliates | | (125,311 | ) | | (79,600 | ) | | (11,138 | ) | | (45,137 | ) | | 261,186 |
| | — |
| Income before taxes | | 145,249 |
| | 108,762 |
| | 64,663 |
| | 134,913 |
| | (261,186 | ) | | 192,401 |
| Provision for taxes | | 4,561 |
| | 9,777 |
| | 17,181 |
| | 20,194 |
| | — |
| | 51,713 |
| Net income | | $ | 140,688 |
| | $ | 98,985 |
| | $ | 47,482 |
| | $ | 114,719 |
| | $ | (261,186 | ) | | $ | 140,688 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (563 | ) | | — |
| | (563 | ) | | — |
| | 563 |
| | (563 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (234 | ) | | 48 |
| | — |
| | — |
| | (48 | ) | | (234 | ) | Other comprehensive income (loss), (net of tax) | | (797 | ) | | 48 |
| | (563 | ) | | — |
| | 515 |
| | (797 | ) | Total Comprehensive Income | | $ | 139,891 |
| | $ | 99,033 |
| | $ | 46,919 |
| | $ | 114,719 |
| | $ | (260,671 | ) | | $ | 139,891 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 25,000 |
| | $ | 444 |
| | $ | 50,173 |
| | $ | 3,213 |
| | $ | — |
| | $ | 78,830 |
| Receivables | | 4 |
| | 101,093 |
| | 71,099 |
| | 498,555 |
| | (652,559 | ) | | 18,192 |
| Inventories | | — |
| | 1,724 |
| | 2,352 |
| | 23,764 |
| | — |
| | 27,840 |
| Current deferred tax asset | | — |
| | 3,705 |
| | 816 |
| | 3,663 |
| | — |
| | 8,184 |
| Other current assets | | 563 |
| | 17,858 |
| | 530 |
| | 5,490 |
| | (16,381 | ) | | 8,060 |
| | | 25,567 |
| | 124,824 |
| | 124,970 |
| | 534,685 |
| | (668,940 | ) | | 141,106 |
| Property and Equipment (net) | | 439,506 |
| | 1,013 |
| | 268,157 |
| | 835,596 |
| | — |
| | 1,544,272 |
| Investment in Park | | 485,136 |
| | 772,183 |
| | 115,401 |
| | 53,790 |
| | (1,426,510 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 125,942 |
| | 111,218 |
| | — |
| | 246,221 |
| Other Intangibles, net | | — |
| | — |
| | 17,835 |
| | 22,817 |
| | — |
| | 40,652 |
| Deferred Tax Asset | | — |
| | 36,443 |
| | — |
| | 90 |
| | (36,533 | ) | | — |
| Intercompany Receivable | | 877,612 |
| | 1,070,125 |
| | 1,116,623 |
| | — |
| | (3,064,360 | ) | | — |
| Other Assets | | 22,048 |
| | 14,832 |
| | 8,419 |
| | 2,315 |
| | — |
| | 47,614 |
| | | $ | 1,858,930 |
| | $ | 2,019,420 |
| | $ | 1,777,347 |
| | $ | 1,560,511 |
| | $ | (5,196,343 | ) | | $ | 2,019,865 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 147,264 |
| | $ | 213,279 |
| | $ | 16,101 |
| | $ | 286,649 |
| | $ | (652,559 | ) | | $ | 10,734 |
| Deferred revenue | | — |
| | — |
| | 4,996 |
| | 34,489 |
| | — |
| | 39,485 |
| Accrued interest | | 98 |
| | 64 |
| | 15,350 |
| | — |
| | — |
| | 15,512 |
| Accrued taxes | | 4,518 |
| | — |
| | 6,239 |
| | 23,437 |
| | (16,381 | ) | | 17,813 |
| Accrued salaries, wages and benefits | | — |
| | 17,932 |
| | 1,214 |
| | 5,690 |
| | — |
| | 24,836 |
| Self-insurance reserves | | — |
| | 5,528 |
| | 1,754 |
| | 16,624 |
| | — |
| | 23,906 |
| Other accrued liabilities | | 1,110 |
| | 2,502 |
| | 140 |
| | 2,164 |
| | — |
| | 5,916 |
| | | 152,990 |
| | 239,305 |
| | 45,794 |
| | 369,053 |
| | (668,940 | ) | | 138,202 |
| Deferred Tax Liability | | — |
| | — |
| | 63,460 |
| | 126,865 |
| | (36,533 | ) | | 153,792 |
| Derivative Liability | | 19,309 |
| | 12,951 |
| | — |
| | — |
| | — |
| | 32,260 |
| Other Liabilities | | — |
| | 5,480 |
| | — |
| | 3,500 |
| | — |
| | 8,980 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,131,100 |
| | 1,131,100 |
| | 1,131,100 |
| | — |
| | (2,262,200 | ) | | 1,131,100 |
| Notes | | 401,080 |
| | 401,080 |
| | 401,080 |
| | — |
| | (802,160 | ) | | 401,080 |
| | | 1,532,180 |
| | 1,532,180 |
| | 1,532,180 |
| | — |
| | (3,064,360 | ) | | 1,532,180 |
| | | | | | | | | | | | | | Equity | | 154,451 |
| | 229,504 |
| | 135,913 |
| | 1,061,093 |
| | (1,426,510 | ) | | 154,451 |
| | | $ | 1,858,930 |
| | $ | 2,019,420 |
| | $ | 1,777,347 |
| | $ | 1,560,511 |
| | $ | (5,196,343 | ) | | $ | 2,019,865 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOMEBALANCE SHEET For the Three Months Ended March 25, 2012September 25, 2011 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 82,713 |
| | $ | 147,138 |
| | $ | 84,679 |
| | $ | 487,352 |
| | $ | (229,614 | ) | | $ | 572,268 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,659 |
| | 42,099 |
| | — |
| | 48,758 |
| Operating expenses | | 1,257 |
| | 69,119 |
| | 19,397 |
| | 301,293 |
| | (229,614 | ) | | 161,452 |
| Selling, general and administrative | | 1,297 |
| | 30,460 |
| | 5,064 |
| | 15,157 |
| | — |
| | 51,978 |
| Depreciation and amortization | | 20,354 |
| | 11 |
| | 9,564 |
| | 33,519 |
| | — |
| | 63,448 |
| Loss on impairment / retirement of fixed assets, net | | 827 |
| | — |
| | 10 |
| | 43 |
| | — |
| | 880 |
| | | 23,735 |
| | 99,590 |
| | 40,694 |
| | 392,111 |
| | (229,614 | ) | | 326,516 |
| Operating income | | 58,978 |
| | 47,548 |
| | 43,985 |
| | 95,241 |
| | — |
| | 245,752 |
| Interest expense, net | | 23,948 |
| | 3,085 |
| | 13,433 |
| | 855 |
| | — |
| | 41,321 |
| Net effect of swaps | | (4,112 | ) | | (192 | ) | | 342 |
| | — |
| | — |
| | (3,962 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 18,549 |
| | — |
| | — |
| | 18,549 |
| Other (income) expense | | (30 | ) | | (1,711 | ) | | 616 |
| | 907 |
| | — |
| | (218 | ) | Income from investment in affiliates | | (117,557 | ) | | (57,557 | ) | | (8,410 | ) | | (15,579 | ) | | 199,103 |
| | — |
| Income before taxes | | 156,729 |
| | 103,923 |
| | 19,455 |
| | 109,058 |
| | (199,103 | ) | | 190,062 |
| Provision for taxes | | 4,511 |
| | 12,445 |
| | 3,103 |
| | 17,785 |
| | — |
| | 37,844 |
| Net income | | $ | 152,218 |
| | $ | 91,478 |
| | $ | 16,352 |
| | $ | 91,273 |
| | $ | (199,103 | ) | | $ | 152,218 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,842 |
| | — |
| | 2,842 |
| | — |
| | (2,842 | ) | | 2,842 |
| Unrealized income on cash flow hedging derivatives | | (3,224 | ) | | (4,646 | ) | | 72 |
| | — |
| | 4,574 |
| | (3,224 | ) | Other comprehensive income (loss), (net of tax) | | (382 | ) | | (4,646 | ) | | 2,914 |
| | — |
| | 1,732 |
| | (382 | ) | Total Comprehensive Income | | $ | 151,836 |
| | $ | 86,832 |
| | $ | 19,266 |
| | $ | 91,273 |
| | $ | (197,371 | ) | | $ | 151,836 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
| Receivables | | — |
| | 82,892 |
| | 59,911 |
| | 370,246 |
| | (506,356 | ) | | 6,693 |
| Inventories | | — |
| | 3,321 |
| | 3,678 |
| | 37,487 |
| | — |
| | 44,486 |
| Current deferred tax asset | | — |
| | 11,014 |
| | 772 |
| | 3,334 |
| | — |
| | 15,120 |
| Other current assets | | 359 |
| | 5,907 |
| | 11,851 |
| | 12,293 |
| | — |
| | 30,410 |
| | | 359 |
| | 103,531 |
| | 76,331 |
| | 430,163 |
| | (506,356 | ) | | 104,028 |
| Property and Equipment (net) | | 464,394 |
| | 1,035 |
| | 279,255 |
| | 896,184 |
| | — |
| | 1,640,868 |
| Investment in Park | | 459,339 |
| | 661,166 |
| | 115,401 |
| | 25,758 |
| | (1,261,664 | ) | | — |
| Intercompany Note Receivable | | — |
| | 104,165 |
| | — |
| | — |
| | (104,165 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 125,528 |
| | 111,219 |
| | — |
| | 245,808 |
| Other Intangibles, net | | — |
| | — |
| | 17,776 |
| | 22,831 |
| | — |
| | 40,607 |
| Deferred Tax Asset | | — |
| | 47,646 |
| | — |
| | — |
| | (47,646 | ) | | — |
| Intercompany Receivable | | 889,442 |
| | 1,239,210 |
| | 1,294,302 |
| | — |
| | (3,422,954 | ) | | — |
| Other Assets | | 26,323 |
| | 16,288 |
| | 9,608 |
| | 1,974 |
| | — |
| | 54,193 |
| | | $ | 1,848,918 |
| | $ | 2,173,041 |
| | $ | 1,918,201 |
| | $ | 1,488,129 |
| | $ | (5,342,785 | ) | | $ | 2,085,504 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 15,921 |
| | $ | 15,921 |
| | $ | 15,921 |
| | $ | — |
| | $ | (31,842 | ) | | $ | 15,921 |
| Accounts payable | | 60,297 |
| | 232,001 |
| | 26,302 |
| | 215,968 |
| | (506,356 | ) | | 28,212 |
| Deferred revenue | | — |
| | — |
| | 5,413 |
| | 45,341 |
| | — |
| | 50,754 |
| Accrued interest | | 3,089 |
| | 1,706 |
| | 5,519 |
| | — |
| | — |
| | 10,314 |
| Accrued taxes | | 4,925 |
| | 340 |
| | 261 |
| | 3,294 |
| | — |
| | 8,820 |
| Accrued salaries, wages and benefits | | — |
| | 26,989 |
| | 781 |
| | 5,792 |
| | — |
| | 33,562 |
| Self-insurance reserves | | — |
| | 4,212 |
| | 1,716 |
| | 15,826 |
| | — |
| | 21,754 |
| Other accrued liabilities | | 462 |
| | 3,312 |
| | 226 |
| | 2,104 |
| | — |
| | 6,104 |
| | | 84,694 |
| | 284,481 |
| | 56,139 |
| | 288,325 |
| | (538,198 | ) | | 175,441 |
| Deferred Tax Liability | | — |
| | — |
| | 58,762 |
| | 119,611 |
| | (47,646 | ) | | 130,727 |
| Derivative Liability | | 19,403 |
| | 12,877 |
| | — |
| | — |
| | — |
| | 32,280 |
| Other Liabilities | | — |
| | 2,235 |
| | — |
| | — |
| | — |
| | 2,235 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 104,165 |
| | (104,165 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 155,004 |
| | 155,004 |
| | 155,004 |
| | — |
| | (310,008 | ) | | 155,004 |
| Term debt | | 1,140,179 |
| | 1,140,179 |
| | 1,140,179 |
| | — |
| | (2,280,358 | ) | | 1,140,179 |
| Notes | | 400,373 |
| | 400,373 |
| | 400,373 |
| | — |
| | (800,746 | ) | | 400,373 |
| | | 1,695,556 |
| | 1,695,556 |
| | 1,695,556 |
| | — |
| | (3,391,112 | ) | | 1,695,556 |
| | | | | | | | | | | | | | Equity | | 49,265 |
| | 177,892 |
| | 107,744 |
| | 976,028 |
| | (1,261,664 | ) | | 49,265 |
| | | $ | 1,848,918 |
| | $ | 2,173,041 |
| | $ | 1,918,201 |
| | $ | 1,488,129 |
| | $ | (5,342,785 | ) | | $ | 2,085,504 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the NineThree Months Ended September 30, 2012March 31, 2013
(In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | Net revenues | | $ | 124,864 |
| | $ | 221,221 |
| | $ | 130,441 |
| | $ | 808,471 |
| | $ | (345,748 | ) | | $ | 939,249 |
| | $ | 4,317 |
| | $ | 8,371 |
| | $ | 289 |
| | $ | 41,510 |
| | $ | (12,688 | ) | | $ | 41,799 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,988 |
| | 73,938 |
| | — |
| | 83,926 |
| | — |
| | — |
| | — |
| | 5,037 |
| | — |
| | 5,037 |
| Operating expenses | | 4,141 |
| | 147,211 |
| | 40,328 |
| | 534,900 |
| | (345,748 | ) | | 380,832 |
| | 1,423 |
| | 21,606 |
| | 5,941 |
| | 60,375 |
| | (12,688 | ) | | 76,657 |
| Selling, general and administrative | | 4,841 |
| | 70,848 |
| | 9,877 |
| | 29,922 |
| | — |
| | 115,488 |
| | 1,292 |
| | 16,613 |
| | 711 |
| | 2,423 |
| | — |
| | 21,039 |
| Depreciation and amortization | | 33,436 |
| | 28 |
| | 16,415 |
| | 63,277 |
| | — |
| | 113,156 |
| | 475 |
| | 9 |
| | — |
| | 4,302 |
| | — |
| | 4,786 |
| Loss on impairment / retirement of fixed assets, net | | 24,221 |
| | — |
| | 9 |
| | — |
| | — |
| | 24,230 |
| | 36 |
| | — |
| | 478 |
| | 86 |
| | — |
| | 600 |
| | | 66,639 |
| | 218,087 |
| | 76,617 |
| | 702,037 |
| | (345,748 | ) | | 717,632 |
| | 3,226 |
| | 38,228 |
| | 7,130 |
| | 72,223 |
| | (12,688 | ) | | 108,119 |
| Operating income | | 58,225 |
| | 3,134 |
| | 53,824 |
| | 106,434 |
| | — |
| | 221,617 |
| | Operating income (loss) | | | 1,091 |
| | (29,857 | ) | | (6,841 | ) | | (30,713 | ) | | — |
| | (66,320 | ) | Interest expense (income), net | | 36,438 |
| | 21,957 |
| | 30,898 |
| | (5,422 | ) | | — |
| | 83,871 |
| | 10,512 |
| | 7,677 |
| | 9,764 |
| | (2,230 | ) | | — |
| | 25,723 |
| Net effect of swaps | | (35 | ) | | 192 |
| | (1,475 | ) | | — |
| | — |
| | (1,318 | ) | | 5,635 |
| | 3,576 |
| | — |
| | — |
| | — |
| | 9,211 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | (13,926 | ) | | — |
| | — |
| | (13,926 | ) | | Loss on early debt extinguishment | | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | | — |
| | — |
| | 8,958 |
| | — |
| | — |
| | 8,958 |
| Other (income) expense | | 561 |
| | (7,119 | ) | | 1,221 |
| | 5,337 |
| | — |
| | — |
| | 188 |
| | (2,388 | ) | | 800 |
| | 1,400 |
| | — |
| | — |
| Income from investment in affiliates | | (99,035 | ) | | (72,862 | ) | | (14,505 | ) | | (38,160 | ) | | 224,562 |
| | — |
| | Income before taxes | | 120,296 |
| | 60,966 |
| | 51,611 |
| | 144,679 |
| | (224,562 | ) | | 152,990 |
| | Loss from investment in affiliates | | | 72,096 |
| | 35,640 |
| | 3,520 |
| | 21,227 |
| | (132,483 | ) | | — |
| Loss before taxes | | | (108,515 | ) | | (87,143 | ) | | (30,500 | ) | | (51,110 | ) | | 132,483 |
| | (144,785 | ) | Provision (benefit) for taxes | | 8,701 |
| | (3,771 | ) | | 13,525 |
| | 22,940 |
| | — |
| | 41,395 |
| | 611 |
| | (17,665 | ) | | (9,254 | ) | | (9,351 | ) | | — |
| | (35,659 | ) | Net income | | $ | 111,595 |
| | $ | 64,737 |
| | $ | 38,086 |
| | $ | 121,739 |
| | $ | (224,562 | ) | | $ | 111,595 |
| | Net loss | | | $ | (109,126 | ) | | $ | (69,478 | ) | | $ | (21,246 | ) | | $ | (41,759 | ) | | $ | 132,483 |
| | $ | (109,126 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,251 | ) | | — |
| | (1,251 | ) | | — |
| | 1,251 |
| | (1,251 | ) | | 301 |
| | — |
| | 301 |
| | — |
| | (301 | ) | | 301 |
| Unrealized income (loss) on cash flow hedging derivatives | | (1,798 | ) | | (629 | ) | | 21 |
| | — |
| | 608 |
| | (1,798 | ) | | Other comprehensive income (loss), (net of tax) | | (3,049 | ) | | (629 | ) | | (1,230 | ) | | — |
| | 1,859 |
| | (3,049 | ) | | Total Comprehensive Income | | $ | 108,546 |
| | $ | 64,108 |
| | $ | 36,856 |
| | $ | 121,739 |
| | $ | (222,703 | ) | | $ | 108,546 |
| | Unrealized income on cash flow hedging derivatives | | | 8,885 |
| | 2,535 |
| | — |
| | — |
| | (2,535 | ) | | 8,885 |
| Other comprehensive income, (net of tax) | | | 9,186 |
| | 2,535 |
| | 301 |
| | — |
| | (2,836 | ) | | 9,186 |
| Total Comprehensive Loss | | | $ | (99,940 | ) | | $ | (66,943 | ) | | $ | (20,945 | ) | | $ | (41,759 | ) | | $ | 129,647 |
| | $ | (99,940 | ) |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the NineThree Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | Net revenues | | $ | 118,280 |
| | $ | 210,407 |
| | $ | 115,163 |
| | $ | 768,126 |
| | $ | (328,349 | ) | | $ | 883,627 |
| | $ | 1,456 |
| | $ | 2,577 |
| | $ | 266 |
| | $ | 27,932 |
| | $ | (4,033 | ) | | $ | 28,198 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,389 |
| | 70,592 |
| | — |
| | 79,981 |
| | — |
| | — |
| | — |
| | 4,087 |
| | — |
| | 4,087 |
| Operating expenses | | 4,180 |
| | 131,955 |
| | 38,959 |
| | 504,813 |
| | (328,349 | ) | | 351,558 |
| | 1,335 |
| | 20,436 |
| | 5,657 |
| | 47,890 |
| | (4,033 | ) | | 71,285 |
| Selling, general and administrative | | 8,049 |
| | 64,226 |
| | 9,541 |
| | 28,310 |
| | — |
| | 110,126 |
| | 1,332 |
| | 13,696 |
| | 760 |
| | 2,196 |
| | — |
| | 17,984 |
| Depreciation and amortization | | 33,021 |
| | 34 |
| | 15,440 |
| | 62,362 |
| | — |
| | 110,857 |
| | 696 |
| | 9 |
| | — |
| | 3,374 |
| | — |
| | 4,079 |
| Loss on impairment / retirement of fixed assets, net | | 1,023 |
| | — |
| | 10 |
| | 43 |
| | — |
| | 1,076 |
| | 82 |
| | — |
| | 10 |
| | — |
| | — |
| | 92 |
| | | 46,273 |
| | 196,215 |
| | 73,339 |
| | 666,120 |
| | (328,349 | ) | | 653,598 |
| | 3,445 |
| | 34,141 |
| | 6,427 |
| | 57,547 |
| | (4,033 | ) | | 97,527 |
| Operating income | | 72,007 |
| | 14,192 |
| | 41,824 |
| | 102,006 |
| | — |
| | 230,029 |
| | Operating loss | | | (1,989 | ) | | (31,564 | ) | | (6,161 | ) | | (29,615 | ) | | — |
| | (69,329 | ) | Interest expense, net | | 70,822 |
| | 8,395 |
| | 39,129 |
| | 6,184 |
| | — |
| | 124,530 |
| | 11,158 |
| | 6,615 |
| | 10,403 |
| | (1,389 | ) | | — |
| | 26,787 |
| Net effect of swaps | | (7,230 | ) | | 910 |
| | 2,813 |
| | — |
| | — |
| | (3,507 | ) | | 173 |
| | 332 |
| | (1,475 | ) | | — |
| | — |
| | (970 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,704 |
| | — |
| | — |
| | 14,704 |
| | Unrealized / realized foreign currency gain | | | — |
| | — |
| | (8,192 | ) | | — |
| | — |
| | (8,192 | ) | Other (income) expense | | 1,517 |
| | (4,712 | ) | | 2,072 |
| | 2,078 |
| | — |
| | 955 |
| | 187 |
| | (3,035 | ) | | 197 |
| | 2,651 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | (71,656 | ) | | (34,663 | ) | | (12,389 | ) | | 107 |
| | 118,601 |
| | — |
| | Income (loss) before taxes | | 78,554 |
| | 44,262 |
| | (4,505 | ) | | 93,637 |
| | (118,601 | ) | | 93,347 |
| | Loss from investment in affiliates | | | 50,491 |
| | 23,083 |
| | 3,230 |
| | 24,916 |
| | (101,720 | ) | | — |
| Loss before taxes | | | (63,998 | ) | | (58,559 | ) | | (10,324 | ) | | (55,793 | ) | | 101,720 |
| | (86,954 | ) | Provision (benefit) for taxes | | 6,980 |
| | 2,527 |
| | (4,446 | ) | | 16,712 |
| | — |
| | 21,773 |
| | 1,417 |
| | (11,672 | ) | | (2,334 | ) | | (8,950 | ) | | — |
| | (21,539 | ) | Net income (loss) | | $ | 71,574 |
| | $ | 41,735 |
| | $ | (59 | ) | | $ | 76,925 |
| | $ | (118,601 | ) | | $ | 71,574 |
| | Net loss | | | $ | (65,415 | ) | | $ | (46,887 | ) | | $ | (7,990 | ) | | $ | (46,843 | ) | | $ | 101,720 |
| | $ | (65,415 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,354 |
| | — |
| | 2,354 |
| | — |
| | (2,354 | ) | | 2,354 |
| | (1,169 | ) | | — |
| | (1,169 | ) | | — |
| | 1,169 |
| | (1,169 | ) | Unrealized income on cash flow hedging derivatives | | 2,366 |
| | (9,866 | ) | | 79 |
| | — |
| | 9,787 |
| | 2,366 |
| | 339 |
| | 98 |
| | 21 |
| | — |
| | (119 | ) | | 339 |
| Other comprehensive income (loss), (net of tax) | | 4,720 |
| | (9,866 | ) | | 2,433 |
| | — |
| | 7,433 |
| | 4,720 |
| | (830 | ) | | 98 |
| | (1,148 | ) | | — |
| | 1,050 |
| | (830 | ) | Total Comprehensive Income | | $ | 76,294 |
| | $ | 31,869 |
| | $ | 2,374 |
| | $ | 76,925 |
| | $ | (111,168 | ) | | $ | 76,294 |
| | Total Comprehensive Loss | | | $ | (66,245 | ) | | $ | (46,789 | ) | | $ | (9,138 | ) | | $ | (46,843 | ) | | $ | 102,770 |
| | $ | (66,245 | ) |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Twelve Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | Net revenues | | $ | 147,733 |
| | $ | 261,878 |
| | $ | 142,250 |
| | $ | 941,465 |
| | $ | (409,232 | ) | | $ | 1,084,094 |
| | $ | 148,576 |
| | $ | 263,930 |
| | $ | 140,441 |
| | $ | 941,246 |
| | $ | (412,138 | ) | | $ | 1,082,055 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,531 |
| | 85,471 |
| | — |
| | 96,002 |
| | — |
| | — |
| | 10,316 |
| | 85,682 |
| | — |
| | 95,998 |
| Operating expenses | | 5,452 |
| | 180,665 |
| | 47,134 |
| | 636,106 |
| | (409,232 | ) | | 460,125 |
| | 5,468 |
| | 177,526 |
| | 48,147 |
| | 637,772 |
| | (412,138 | ) | | 456,775 |
| Selling, general and administrative | | 6,865 |
| | 90,892 |
| | 11,650 |
| | 36,381 |
| | — |
| | 145,788 |
| | 6,455 |
| | 89,532 |
| | 11,086 |
| | 34,293 |
| | — |
| | 141,366 |
| Depreciation and amortization | | 37,698 |
| | 41 |
| | 18,300 |
| | 72,097 |
| | — |
| | 128,136 |
| | 37,439 |
| | 40 |
| | 18,199 |
| | 71,335 |
| | — |
| | 127,013 |
| (Gain) loss on impairment / retirement of fixed assets, net | | 24,188 |
| | — |
| | (62 | ) | | 1,593 |
| | — |
| | 25,719 |
| | (Gain) on sale of other assets | | | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (6,625 | ) | Loss on impairment / retirement of fixed assets, net | | | 25,089 |
| | — |
| | 474 |
| | 5,281 |
| | — |
| | 30,844 |
| | | 74,203 |
| | 271,598 |
| | 87,553 |
| | 831,648 |
| | (409,232 | ) | | 855,770 |
| | 74,451 |
| | 267,098 |
| | 88,222 |
| | 827,738 |
| | (412,138 | ) | | 845,371 |
| Operating income (loss) | | 73,530 |
| | (9,720 | ) | | 54,697 |
| | 109,817 |
| | — |
| | 228,324 |
| | 74,125 |
| | (3,168 | ) | | 52,219 |
| | 113,508 |
| | — |
| | 236,684 |
| Interest (income) expense, net | | 50,007 |
| | 28,592 |
| | 44,583 |
| | (6,813 | ) | | — |
| | 116,369 |
| | 47,879 |
| | 30,390 |
| | 40,231 |
| | (9,013 | ) | | — |
| | 109,487 |
| Net effect of swaps | | (5,019 | ) | | (1 | ) | | (5,910 | ) | | — |
| | — |
| | (10,930 | ) | | 5,324 |
| | 3,365 |
| | — |
| | — |
| | — |
| | 8,689 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | (18,721 | ) | | — |
| | — |
| | (18,721 | ) | | Loss on early debt extinguishment | | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | | — |
| | — |
| | 8,152 |
| | — |
| | — |
| | 8,152 |
| Other (income) expense | | 749 |
| | (10,205 | ) | | 1,498 |
| | 7,958 |
| | — |
| | — |
| | 750 |
| | (8,860 | ) | | 2,623 |
| | 5,487 |
| | — |
| | — |
| Income from investment in affiliates | | (93,080 | ) | | (55,557 | ) | | (12,698 | ) | | (24,955 | ) | | 186,290 |
| | — |
| | (68,417 | ) | | (53,593 | ) | | (14,307 | ) | | (18,503 | ) | | 154,820 |
| | — |
| Income before taxes | | 120,873 |
| | 27,451 |
| | 45,945 |
| | 133,627 |
| | (186,290 | ) | | 141,606 |
| | 67,414 |
| | 12,749 |
| | 14,903 |
| | 135,537 |
| | (154,820 | ) | | 75,783 |
| Provision (benefit) for taxes | | 10,106 |
| | (29,298 | ) | | 20,942 |
| | 29,089 |
| | — |
| | 30,839 |
| | 9,269 |
| | (15,849 | ) | | (3,507 | ) | | 27,725 |
| | — |
| | 17,638 |
| Net income | | $ | 110,767 |
| | $ | 56,749 |
| | $ | 25,003 |
| | $ | 104,538 |
| | $ | (186,290 | ) | | $ | 110,767 |
| | $ | 58,145 |
| | $ | 28,598 |
| | $ | 18,410 |
| | $ | 107,812 |
| | $ | (154,820 | ) | | $ | 58,145 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | Other comprehensive income, (net of tax): | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (2,672 | ) | | — |
| | (2,672 | ) | | — |
| | 2,672 |
| | (2,672 | ) | | 1,839 |
| | — |
| | 1,839 |
| | — |
| | (1,839 | ) | | 1,839 |
| Unrealized income (loss) on cash flow hedging derivatives | | (397 | ) | | (109 | ) | | 21 |
| | — |
| | 88 |
| | (397 | ) | | Unrealized income on cash flow hedging derivatives | | | 8,685 |
| | 2,551 |
| | — |
| | — |
| | (2,551 | ) | | 8,685 |
| Other comprehensive income (loss), (net of tax) | | (3,069 | ) | | (109 | ) | | (2,651 | ) | | — |
| | 2,760 |
| | (3,069 | ) | | 10,524 |
| | 2,551 |
| | 1,839 |
| | — |
| | (4,390 | ) | | 10,524 |
| Total Comprehensive Income | | $ | 107,698 |
| | $ | 56,640 |
| | $ | 22,352 |
| | $ | 104,538 |
| | $ | (183,530 | ) | | $ | 107,698 |
| | $ | 68,669 |
| | $ | 31,149 |
| | $ | 20,249 |
| | $ | 107,812 |
| | $ | (159,210 | ) | | $ | 68,669 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Twelve Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | Net revenues | | $ | 138,907 |
| | $ | 247,595 |
| | $ | 126,355 |
| | $ | 886,578 |
| | $ | (386,119 | ) | | $ | 1,013,316 |
| | $ | 140,548 |
| | $ | 249,988 |
| | $ | 126,375 |
| | $ | 903,046 |
| | $ | (390,156 | ) | | $ | 1,029,801 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,850 |
| | 80,928 |
| | — |
| | 90,778 |
| | — |
| | — |
| | 9,932 |
| | 82,100 |
| | — |
| | 92,032 |
| Operating expenses | | 5,725 |
| | 163,754 |
| | 45,814 |
| | 597,781 |
| | (386,119 | ) | | 426,955 |
| | 5,351 |
| | 167,068 |
| | 45,805 |
| | 608,940 |
| | (390,156 | ) | | 437,008 |
| Selling, general and administrative | | 9,755 |
| | 79,492 |
| | 11,347 |
| | 32,598 |
| | — |
| | 133,192 |
| | 7,963 |
| | 83,355 |
| | 11,151 |
| | 35,026 |
| | — |
| | 137,495 |
| Depreciation and amortization | | 37,168 |
| | 95 |
| | 17,188 |
| | 71,931 |
| | — |
| | 126,382 |
| | 37,309 |
| | 45 |
| | 17,325 |
| | 71,213 |
| | — |
| | 125,892 |
| Loss on impairment of goodwill and other intangibles | | — |
| | — |
| | — |
| | 903 |
| | — |
| | 903 |
| | Loss on impairment / retirement of fixed assets, net | | 1,456 |
| | — |
| | 10 |
| | 62,043 |
| | — |
| | 63,509 |
| | Loss (gain) on impairment / retirement of fixed assets, net | | | 876 |
| | — |
| | (51 | ) | | 10,426 |
| | — |
| | 11,251 |
| | | 54,104 |
| | 243,341 |
| | 84,209 |
| | 846,184 |
| | (386,119 | ) | | 841,719 |
| | 51,499 |
| | 250,468 |
| | 84,162 |
| | 807,705 |
| | (390,156 | ) | | 803,678 |
| Operating income | | 84,803 |
| | 4,254 |
| | 42,146 |
| | 40,394 |
| | — |
| | 171,597 |
| | Operating income (loss) | | | 89,049 |
| | (480 | ) | | 42,213 |
| | 95,341 |
| | — |
| | 226,123 |
| Interest expense, net | | 99,205 |
| | 14,877 |
| | 52,411 |
| | 4,362 |
| | — |
| | 170,855 |
| | 72,309 |
| | 19,090 |
| | 50,897 |
| | 488 |
| | — |
| | 142,784 |
| Net effect of swaps | | (7,183 | ) | | 910 |
| | 8,045 |
| | — |
| | — |
| | 1,772 |
| | (10,940 | ) | | (243 | ) | | (4,793 | ) | | — |
| | — |
| | (15,976 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 2,323 |
| | — |
| | — |
| | 2,323 |
| | — |
| | — |
| | 8,605 |
| | — |
| | — |
| | 8,605 |
| Other (income) expense | | 1,704 |
| | (5,748 | ) | | 2,852 |
| | 2,147 |
| | — |
| | 955 |
| | 716 |
| | (9,542 | ) | | 1,708 |
| | 7,084 |
| | — |
| | (34 | ) | (Income) loss from investment in affiliates | | (25,098 | ) | | 1,534 |
| | (9,116 | ) | | 2,425 |
| | 30,255 |
| | — |
| | (67,272 | ) | | (19,390 | ) | | (2,601 | ) | | 16,074 |
| | 73,189 |
| | — |
| Income (loss) before taxes | | 16,175 |
| | (7,319 | ) | | (14,369 | ) | | 31,460 |
| | (30,255 | ) | | (4,308 | ) | | 94,236 |
| | 9,605 |
| | (11,603 | ) | | 71,695 |
| | (73,189 | ) | | 90,744 |
| Provision (benefit) for taxes | | 8,059 |
| | 953 |
| | (7,308 | ) | | (14,128 | ) | | — |
| | (12,424 | ) | | 9,429 |
| | (25,950 | ) | | 4,319 |
| | 18,139 |
| | — |
| | 5,937 |
| Net income (loss) | | $ | 8,116 |
| | $ | (8,272 | ) | | $ | (7,061 | ) | | $ | 45,588 |
| | $ | (30,255 | ) | | $ | 8,116 |
| | $ | 84,807 |
| | $ | 35,555 |
| | $ | (15,922 | ) | | $ | 53,556 |
| | $ | (73,189 | ) | | $ | 84,807 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,704 | ) | | — |
| | (1,704 | ) | | — |
| | 1,704 |
| | (1,704 | ) | | 1,050 |
| | — |
| | 1,050 |
| | — |
| | (1,050 | ) | | 1,050 |
| Unrealized income on cash flow hedging derivatives | | 22,916 |
| | (7,153 | ) | | 180 |
| | — |
| | 6,973 |
| | 22,916 |
| | Unrealized income (loss) on cash flow hedging derivatives | | | (7,958 | ) | | (9,638 | ) | | 254 |
| | — |
| | 9,384 |
| | (7,958 | ) | Other comprehensive income (loss), (net of tax) | | 21,212 |
| | (7,153 | ) | | (1,524 | ) | | — |
| | 8,677 |
| | 21,212 |
| | (6,908 | ) | | (9,638 | ) | | 1,304 |
| | — |
| | 8,334 |
| | (6,908 | ) | Total Comprehensive Income (Loss) | | $ | 29,328 |
| | $ | (15,425 | ) | | $ | (8,585 | ) | | $ | 45,588 |
| | $ | (21,578 | ) | | $ | 29,328 |
| | $ | 77,899 |
| | $ | 25,917 |
| | $ | (14,618 | ) | | $ | 53,556 |
| | $ | (64,855 | ) | | $ | 77,899 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 208,436 |
| | $ | 48,506 |
| | $ | 9,093 |
| | $ | 155,849 |
| | $ | (145,140 | ) | | $ | 276,744 |
| | $ | (117,670 | ) | | $ | (49,663 | ) | | $ | (42,030 | ) | | $ | (12,767 | ) | | $ | 153,463 |
| | $ | (68,667 | ) | CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (56,171 | ) | | (70,083 | ) | | 3,948 |
| | (22,834 | ) | | 145,140 |
| | — |
| | 65,636 |
| | 58,171 |
| | (2,442 | ) | | 32,098 |
| | (153,463 | ) | | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| | Capital expenditures | | (29,295 | ) | | (8 | ) | | (14,426 | ) | | (32,081 | ) | | — |
| | (75,810 | ) | | (17,866 | ) | | — |
| | (600 | ) | | (17,363 | ) | | — |
| | (35,829 | ) | Net cash from (for) investing activities | | (84,293 | ) | | (70,091 | ) | | (10,478 | ) | | (54,915 | ) | | 145,140 |
| | (74,637 | ) | | 47,770 |
| | 58,171 |
| | (3,042 | ) | | 14,735 |
| | (153,463 | ) | | (35,829 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | | Net borrowings on revolving credit loans | | | $ | 96,000 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 96,000 |
| Term debt borrowings | | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | | (14,763 | ) | | (8,538 | ) | | (190 | ) | | — |
| | — |
| | (23,491 | ) | Term debt payments, including early termination penalties | | (14,468 | ) | | (10,212 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | | (654,568 | ) | | (462,054 | ) | | (14,478 | ) | | — |
| | — |
| | (1,131,100 | ) | Intercompany (payments) receipts | | — |
| | 93,845 |
| | — |
| | (93,845 | ) | | — |
| | — |
| | Distributions (paid) received | | (66,675 | ) | | 110 |
| | — |
| | — |
| | — |
| | (66,565 | ) | | (35,688 | ) | | 868 |
| | — |
| | — |
| | — |
| | (34,820 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| | Exercise of limited partnership unit options | | — |
| | 47 |
| | — |
| | — |
| | — |
| | 47 |
| | — |
| | 28 |
| | — |
| | — |
| | — |
| | 28 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | | — |
| | (127 | ) | | — |
| | — |
| | — |
| | (127 | ) | Net cash from (for) financing activities | | (81,143 | ) | | 23,336 |
| | 9,230 |
| | (93,845 | ) | | — |
| | (142,422 | ) | | 44,900 |
| | (8,220 | ) | | (190 | ) | | — |
| | — |
| | 36,490 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 893 |
| | — |
| | — |
| | 893 |
| | — |
| | — |
| | (786 | ) | | — |
| | — |
| | (786 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase for the period | | 43,000 |
| | 1,751 |
| | 8,738 |
| | 7,089 |
| | — |
| | 60,578 |
| | Net increase (decrease) for the period | | | (25,000 | ) | | 288 |
| | (46,048 | ) | | 1,968 |
| | — |
| | (68,792 | ) | Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 169,343 |
| | $ | 48,628 |
| | $ | 48,422 |
| | $ | 25,310 |
| | $ | (69,338 | ) | | $ | 222,365 |
| | $ | (184,504 | ) | | $ | 10,151 |
| | $ | (37,239 | ) | | $ | (6,697 | ) | | $ | 136,357 |
| | $ | (81,932 | ) | CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (29,986 | ) | | (39,615 | ) | | (6,353 | ) | | 6,616 |
| | 69,338 |
| | — |
| | 62,103 |
| | 60,369 |
| | 2,208 |
| | 11,677 |
| | (136,357 | ) | | — |
| Capital expenditures | | (38,121 | ) | | — |
| | (10,510 | ) | | (24,249 | ) | | — |
| | (72,880 | ) | | (8,374 | ) | | — |
| | (7,125 | ) | | (11,969 | ) | | — |
| | (27,468 | ) | Net cash from (for) investing activities | | (68,107 | ) | | (39,615 | ) | | (16,863 | ) | | (17,633 | ) | | 69,338 |
| | (72,880 | ) | | 53,729 |
| | 60,369 |
| | (4,917 | ) | | (292 | ) | | (136,357 | ) | | (27,468 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Net (payments) on revolving credit loans | | (23,200 | ) | | — |
| | — |
| | — |
| | — |
| | (23,200 | ) | | Term debt borrowings | | 13,246 |
| | 9,358 |
| | 334 |
| | — |
| | — |
| | 22,938 |
| | Term debt payments, including early termination penalties | | (13,831 | ) | | (9,763 | ) | | (306 | ) | | — |
| | — |
| | (23,900 | ) | | Net borrowings on revolving credit loans | | | 153,000 |
| | — |
| | 2,004 |
| | — |
| | — |
| | 155,004 |
| Derivative settlement | | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Intercompany (payments) receipts | | — |
| | 688 |
| | — |
| | (688 | ) | | — |
| | — |
| | — |
| | (10,320 | ) | | — |
| | 10,320 |
| | — |
| | — |
| Distributions (paid) received | | (16,668 | ) | | 64 |
| | — |
| | — |
| | — |
| | (16,604 | ) | | (22,225 | ) | | 74 |
| | — |
| | — |
| | — |
| | (22,151 | ) | Payment of debt issuance costs | | (11,783 | ) | | (8,332 | ) | | (375 | ) | | — |
| | — |
| | (20,490 | ) | | Capital (contribution) infusion | | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | | — |
| | 48 |
| | — |
| | — |
| | — |
| | 48 |
| Excess tax benefit from unit-based compensation | | | — |
| | (437 | ) | | — |
| | — |
| | — |
| | (437 | ) | Net cash from (for) financing activities | | (52,236 | ) | | (7,985 | ) | | (347 | ) | | (688 | ) | | — |
| | (61,256 | ) | | 130,775 |
| | (70,635 | ) | | 11,554 |
| | 10,320 |
| | — |
| | 82,014 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (1,682 | ) | | — |
| | — |
| | (1,682 | ) | | — |
| | — |
| | (819 | ) | | — |
| | — |
| | (819 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase for the period | | 49,000 |
| | 1,028 |
| | 29,530 |
| | 6,989 |
| | — |
| | 86,547 |
| | Net increase (decrease) for the period | | | — |
| | (115 | ) | | (31,421 | ) | | 3,331 |
| | — |
| | (28,205 | ) | Balance, beginning of period | | — |
| | 1,461 |
| | 6,943 |
| | 1,361 |
| | — |
| | 9,765 |
| | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 186,582 |
| | $ | (152,159 | ) | | $ | 12,038 |
| | $ | 318,078 |
| | $ | (91,985 | ) | | $ | 272,554 |
| | $ | 188,221 |
| | $ | (37,475 | ) | | $ | 16,546 |
| | $ | 135,165 |
| | $ | (4,510 | ) | | $ | 297,947 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (40,694 | ) | | (47,206 | ) | | 5,245 |
| | (9,330 | ) | | 91,985 |
| | — |
| | 43,043 |
| | (49,642 | ) | | (2,479 | ) | | 4,568 |
| | 4,510 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| | 1,173 |
| | — |
| | — |
| | 14,885 |
| | — |
| | 16,058 |
| Capital expenditures | | (33,025 | ) | | (8 | ) | | (23,050 | ) | | (37,037 | ) | | — |
| | (93,120 | ) | | (43,156 | ) | | (8 | ) | | (8,023 | ) | | (52,075 | ) | | — |
| | (103,262 | ) | Net cash for investing activities | | (72,546 | ) | | (47,214 | ) | | (17,805 | ) | | (46,367 | ) | | 91,985 |
| | (91,947 | ) | | 1,060 |
| | (49,650 | ) | | (10,502 | ) | | (32,622 | ) | | 4,510 |
| | (87,204 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Net borrowings on revolving credit loans | | | $ | (57,000 | ) | | $ | — |
| | $ | (2,004 | ) | | $ | — |
| | $ | — |
| | $ | (59,004 | ) | Term debt borrowings | | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Intercompany term debt (payments) receipts | | — |
| | 269,500 |
| | — |
| | (269,500 | ) | | — |
| | — |
| | — |
| | 104,165 |
| | — |
| | (104,165 | ) | | — |
| | — |
| Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | | Term debt payments, including early termination penalties | | (14,467 | ) | | (10,213 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | | (669,035 | ) | | (472,267 | ) | | (14,798 | ) | | — |
| | — |
| | (1,156,100 | ) | Distributions (paid) received | | (105,569 | ) | | 261 |
| | — |
| | — |
| | — |
| | (105,308 | ) | | (102,402 | ) | | 920 |
| | — |
| | — |
| | — |
| | (101,482 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 53 |
| | — |
| | — |
| | — |
| | 53 |
| | — |
| | 57 |
| | — |
| | — |
| | — |
| | 57 |
| Payment of debt issuance costs | | — |
| | — |
| | (723 | ) | | — |
| | — |
| | (723 | ) | | (14,763 | ) | | (8,537 | ) | | (191 | ) | | — |
| | — |
| | (23,491 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | | — |
| | 1,519 |
| | — |
| | — |
| | — |
| | 1,519 |
| Net cash from (for) financing activities | | (120,036 | ) | | 199,147 |
| | 8,507 |
| | (269,500 | ) | | — |
| | (181,882 | ) | | (189,281 | ) | | 87,460 |
| | (2,515 | ) | | (104,165 | ) | | — |
| | (208,501 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 1,065 |
| | — |
| | — |
| | 1,065 |
| | — |
| | — |
| | 477 |
| | — |
| | — |
| | 477 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase (decrease) for the period | | (6,000 | ) | | (226 | ) | | 3,805 |
| | 2,211 |
| | — |
| | (210 | ) | | — |
| | 335 |
| | 4,006 |
| | (1,622 | ) | | — |
| | 2,719 |
| Balance, beginning of period | | 49,000 |
| | 2,489 |
| | 36,473 |
| | 8,350 |
| | — |
| | 96,312 |
| | — |
| | 397 |
| | 119 |
| | 6,803 |
| | — |
| | 7,319 |
| Balance, end of period | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 101,376 |
| | $ | (9,652 | ) | | $ | 25,380 |
| | $ | 19,056 |
| | $ | 58,064 |
| | $ | 194,224 |
| | $ | 113,654 |
| | $ | (89,658 | ) | | $ | 14,102 |
| | $ | 182,798 |
| | $ | (367 | ) | | $ | 220,529 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 25,281 |
| | 23,147 |
| | (1,356 | ) | | 10,992 |
| | (58,064 | ) | | — |
| | (16,818 | ) | | (6,588 | ) | | 1,126 |
| | 21,913 |
| | 367 |
| | — |
| Capital expenditures | | (44,247 | ) | | — |
| | (13,179 | ) | | (27,488 | ) | | — |
| | (84,914 | ) | | (40,662 | ) | | — |
| | (22,440 | ) | | (34,253 | ) | | — |
| | (97,355 | ) | Net cash from (for) investing activities | | (18,966 | ) | | 23,147 |
| | (14,535 | ) | | (16,496 | ) | | (58,064 | ) | | (84,914 | ) | | (57,480 | ) | | (6,588 | ) | | (21,314 | ) | | (12,340 | ) | | 367 |
| | (97,355 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Term debt borrowings | | 13,246 |
| | 9,358 |
| | 334 |
| | — |
| | — |
| | 22,938 |
| | Net borrowings (payments) on revolving credit loans | | | 31,000 |
| | — |
| | (3,110 | ) | | — |
| | — |
| | 27,890 |
| Intercompany term debt (payments) receipts | | — |
| | 2,063 |
| | — |
| | (2,063 | ) | | — |
| | — |
| | — |
| | 166,023 |
| | — |
| | (166,023 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (24,211 | ) | | (17,091 | ) | | (536 | ) | | — |
| | — |
| | (41,838 | ) | | (13,831 | ) | | (9,763 | ) | | (306 | ) | | — |
| | — |
| �� | (23,900 | ) | Derivative settlement | | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (30,559 | ) | | 121 |
| | — |
| | — |
| | — |
| | (30,438 | ) | | (73,343 | ) | | 273 |
| | — |
| | — |
| | — |
| | (73,070 | ) | Capital (contribution) infusion | | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Payment of debt issuance costs | | | — |
| | — |
| | (723 | ) | | — |
| | — |
| | (723 | ) | Exercise of limited partnership unit options | | — |
| | 7 |
| | — |
| | — |
| | — |
| | 7 |
| | — |
| | 53 |
| | — |
| | — |
| | — |
| | 53 |
| Payment of debt issuance costs | | (12,886 | ) | | (9,110 | ) | | (761 | ) | | — |
| | — |
| | (22,757 | ) | | Excess tax benefit from unit-based compensation | | | — |
| | (437 | ) | | — |
| | — |
| | — |
| | (437 | ) | Net cash from (for) financing activities | | (54,410 | ) | | (14,652 | ) | | (963 | ) | | (2,063 | ) | | — |
| | (72,088 | ) | | (56,174 | ) | | 96,149 |
| | 5,411 |
| | (166,023 | ) | | — |
| | (120,637 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,611 | ) | | — |
| | — |
| | (2,611 | ) | | — |
| | — |
| | (2,473 | ) | | — |
| | — |
| | (2,473 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase (decrease) for the period | | 28,000 |
| | (1,157 | ) | | 7,271 |
| | 497 |
| | — |
| | 34,611 |
| | — |
| | (97 | ) | | (4,274 | ) | | 4,435 |
| | — |
| | 64 |
| Balance, beginning of period | | 21,000 |
| | 3,646 |
| | 29,202 |
| | 7,853 |
| | — |
| | 61,701 |
| | — |
| | 494 |
| | 4,393 |
| | 2,368 |
| | — |
| | 7,255 |
| Balance, end of period | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
| | | | | | | | | | | | | | |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview:
We generate our revenues primarily from sales of (1) admission to our parks, (2) food, merchandise and games inside our parks, and (3) hotel rooms, food and other attractions outside our parks. Our principal costs and expenses, which include salaries and wages, advertising, maintenance, operating supplies, utilities and insurance, are relatively fixed and do not vary significantly with attendance.
Each of our properties is run by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including the allocation of resources, on a property-by-property basis.
Aside from attendance and guest per capita statistics, discrete financial information and operating results are not prepared at the regional level, but rather at the individual park level for use by the CEO, who is the Chief Operating Decision Maker (CODM), as well as by the Chief Financial Officer, the Chief Operating Officer, the park general managers, and the Executive Vice President, Operations.
Critical Accounting Policies: This management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in the United States of America. These principles require us to make judgments, estimates and assumptions during the normal course of business that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ significantly from those estimates under different assumptions and conditions. Management believes that judgment and estimates related to the following critical accounting policies could materially affect our consolidated financial statements: •Property and Equipment •Impairment of Long-Lived Assets •Goodwill and Other Intangible Assets •Self-Insurance Reserves •Derivative Financial Instruments •Revenue Recognition
Income Taxes In the thirdfirst quarter of 20122013, there were no changes in the above critical accounting policies previously disclosed in our Annual Report on Form 10-K10-K/A for the year ended December 31, 20112012. except as noted below. Change in Depreciation Method Effective January 1, 2013, the Partnership changed its method of depreciation for the group of assets acquired as a whole in 1983, as well as for the groups of like assets of each subsequent business acquisition from the composite method to the unit method. Historically, the Partnership had used the composite depreciation method for land improvements, buildings, rides and equipment for the group of assets acquired as a whole in 1983, as well as for the group of like assets of each subsequent business acquisition. The unit method was only used for all individual assets 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. No gain or loss is recognized on normal retirements of composite assets. Instead, the net book value of a retired asset reduces accumulated depreciation for the composite group. Unusual retirements of composite assets could result in the recognition of a gain or loss. 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. In order to improve comparability and enhance the level of precision associated with allocating historical cost, the Partnership had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation for
all assets. The Partnership believes that pursuant to generally accepted accounting principles, changing from the composite method of depreciation to the unit method of depreciation is a change in accounting estimate that is effected by a change in accounting principle, which should be accounted for prospectively. This prospective application will result in the discontinuance of the composite method of depreciation for all prior acquisitions with the existing net book value of each composite pool allocated to the remaining individual assets (units) in that pool with each unit assigned an appropriate remaining useful life on an individual unit basis. Assigning a useful life to each unit in the various composite pools had an insignificant effect on the weighted average useful lives of all assets that were previously accounted for under the composite method. The change in depreciation method had an immaterial impact on the Condensed Consolidated Financial Statements for the quarter ended March 31, 2013.Future asset retirements could have a material impact on the Condensed Consolidated Financial Statements in the periods such items occur.
Adjusted EBITDA: We believe that Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the Amended 20102013 Credit Agreement) is a meaningful measure of park-level operating profitability because we use it for measuring returns on capital investments, evaluating potential acquisitions, determining awards under incentive compensation plans, and calculating compliance with certain loan covenants. Adjusted EBITDA is provided in the discussion of results of operations that follows as a supplemental measure of our operating results and is not intended to be a substitute for operating income, net income or cash flows from operating activities as defined under generally accepted accounting principles. In addition, Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
The table below sets forth a reconciliation of Adjusted EBITDA to net income for the three-, nine- and twelve-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012. | | | | Three months ended | | Nine months ended | | Twelve months ended | | Three months ended | | Twelve months ended | | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | 3/31/2013 | | 3/25/2012 | | 3/31/2013 | | 3/25/2012 | | | (13 weeks) | | (13 weeks) | | (39 weeks) | | (38 weeks) | | (53 weeks) | | (52 weeks) | | (13 weeks) | | (12 weeks) | | (53 weeks) | | (52 weeks) | | | (In thousands ) | | (In thousands) | Net income | | $ | 140,688 |
| | $ | 152,218 |
| | $ | 111,595 |
| | $ | 71,574 |
| | $ | 110,767 |
| | $ | 8,116 |
| | Net income (loss) | | | $ | (109,126 | ) | | $ | (65,415 | ) | | $ | 58,145 |
| | $ | 84,807 |
| Interest expense | | 26,863 |
| | 41,353 |
| | 83,902 |
| | 124,650 |
| | 116,437 |
| | 171,049 |
| | 25,763 |
| | 26,803 |
| | 109,579 |
| | 142,876 |
| Interest income | | (13 | ) | | (32 | ) | | (31 | ) | | (120 | ) | | (68 | ) | | (194 | ) | | (40 | ) | | (16 | ) | | (92 | ) | | (92 | ) | Provision (benefit) for taxes | | 51,713 |
| | 37,844 |
| | 41,395 |
| | 21,773 |
| | 30,839 |
| | (12,424 | ) | | (35,659 | ) | | (21,539 | ) | | 17,638 |
| | 5,937 |
| Depreciation and amortization | | 60,747 |
| | 63,448 |
| | 113,156 |
| | 110,857 |
| | 128,136 |
| | 126,382 |
| | 4,786 |
| | 4,079 |
| | 127,013 |
| | 125,892 |
| EBITDA | | 279,998 |
| | 294,831 |
| | 350,017 |
| | 328,734 |
| | 386,111 |
| | 292,929 |
| | (114,276 | ) | | (56,088 | ) | | 312,283 |
| | 359,420 |
| Loss on early extinguishment of debt | | | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | (175 | ) | | (3,962 | ) | | (1,318 | ) | | (3,507 | ) | | (10,930 | ) | | 1,772 |
| | 9,211 |
| | (970 | ) | | 8,689 |
| | (15,976 | ) | Unrealized foreign currency (gain) loss | | (14,737 | ) | | 17,314 |
| | (14,108 | ) | | 13,224 |
| | (17,502 | ) | | 549 |
| | 8,881 |
| | (8,249 | ) | | 7,949 |
| | 8,502 |
| Non-cash equity expense (income) | | 362 |
| | — |
| | 2,630 |
| | (228 | ) | | 2,619 |
| | (269 | ) | | Loss on impairment of goodwill and other intangibles | | — |
| | — |
| | — |
| | — |
| | — |
| | 903 |
| | Non-cash equity expense | | | 2,933 |
| | 1,700 |
| | 4,498 |
| | 1,689 |
| Loss on impairment/retirement of fixed assets, net | | 25,000 |
| | 880 |
| | 24,230 |
| | 1,076 |
| | 25,719 |
| | 63,509 |
| | 600 |
| | 92 |
| | 30,844 |
| | 11,251 |
| (Gain) on sale of other assets | | | — |
| | — |
| | (6,625 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | 80 |
| | 150 |
| | (79 | ) | | — |
| | — |
| | — |
| | 230 |
| Refinancing costs | | — |
| | (195 | ) | | — |
| | 955 |
| | — |
| | 955 |
| | — |
| | — |
| | — |
| | (34 | ) | Other non-recurring items (as defined) | | 1,861 |
| | 836 |
| | 4,026 |
| | 6,107 |
| | 7,445 |
| | 6,107 |
| | 805 |
| | 1,721 |
| | 3,264 |
| | 6,823 |
| Adjusted EBITDA (1) | | $ | 292,309 |
| | $ | 309,704 |
| | $ | 365,477 |
| | $ | 346,441 |
| | $ | 393,612 |
| | $ | 366,376 |
| | $ | (57,273 | ) | | $ | (61,794 | ) | | $ | 395,475 |
| | $ | 371,905 |
| | | | | | | | | | | | | | | | | | | | | | (1) As permitted by and defined in the Amended 2010 Credit Agreement | | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | |
Results of Operations:
Our results of operations for the nine, three and twelve months ended September 30, 2012 and September 25, 2011 are not directly comparable as the current nine- and twelve month periods include an additional week of operations due to the timing of the fiscal third quarter close, and as the current three-month period includes fewer operating days due to the timing of the fiscal second and third quarter closes. Since a large portion of the variances in our statements of operations is due to the difference in the number of operating days in the current fiscal periods, we will also compare current operating results to the prior year period ended October 2, 2011.
Immaterial Restatement -
We have made two separate corrections relating to our use of the composite depreciation methodmethod.
The first correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the group3 and 12 month periods ended March 25, 2012, related to a misapplication of assets acquired as a whole in 1983, as well as for groups of assets in each subsequent business acquisition.the composite depreciation method. Upon the normal retirement of an asset within a composite group, our practice generally hashad been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of our financial statements for the three months ended July 1,in 2012, wemanagement determined that this methodology was not appropriate. As a result, we revised the useful lives of our composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation).
The second correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the 12 month period ended March 25, 2012, reflects a subsequent determination that a disposition from our composite group of assets was considered to be unusual. In certain situations under the composite method, disposals are considered unusual and, accordingly, losses are not included in the composite depreciation pool but are rather charged immediately to expense. In 2013, the Partnership's initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was challenged by the SEC Staff. We evaluated the amount and nature of these adjustments andultimately concluded that theysuch disposition was unusual and that a $8.8 millioncharge be reflected in the 2011 financial statements.
First Quarter -
Operating results for the first quarter historically include less than 5% of our full-year revenues and attendance. The results include normal off-season operating, maintenance and administrative expenses at our ten seasonal amusement parks and four outdoor water parks, as well as daily operations at Knott's Berry Farm, which is open year-round, and Castaway Bay, which is generally open daily from Memorial Day to Labor Day plus a limited daily schedule for the balance of the year. The following table presents key financial information for the three months ended March 31, 2013 and March 25, 2012: | | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 3/31/2013 | | 3/25/2012 | | $ | | % | | | (13 weeks) | | (12 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 41,799 |
| | $ | 28,198 |
| | $ | 13,601 |
| | 48.2 | % | Operating costs and expenses | | 102,733 |
| | 93,356 |
| | 9,377 |
| | 10.0 | % | Depreciation and amortization | | 4,786 |
| | 4,079 |
| | 707 |
| | 17.3 | % | Loss on impairment / retirement of fixed assets | | 600 |
| | 92 |
| | 508 |
| | N/M |
| Operating loss | | $ | (66,320 | ) | | $ | (69,329 | ) | | $ | 3,009 |
| | (4.3 | )% | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | (57,273 | ) | | $ | (61,794 | ) | | $ | 4,521 |
| | (7.3 | )% |
For the quarter ended March 31, 2013, net revenues increased to $41.8 million from $28.2 million for the first quarter of 2012. The increase between periods was primarily due to the strong first-quarter performance in both attendance and per-capita spending at Knott's Berry Farm, our only year-round property, compared with the first quarter a year ago, as well as an extra week of operations due to the earlier timing of Easter in 2013 compared to 2012. At the end of the first quarter, only five of our 15 properties were not materialin operation. The other parks, including our larger parks, Cedar Point and Kings Island located in Ohio and Canada's Wonderland in Toronto, were in the final stages of preparing to eitheropen for the 2013 operating season.
Operating costs and expenses for the quarter increased $9.3 million to $102.7 million from $93.4 million in 2012 and were in line with expectations. Operating results for the first quarter include normal off-season operating, maintenance and administrative
expenses at our prior annualseasonal amusement and water parks, and daily operations at Knott’s Berry Farm and Castaway Bay. The increase in first-quarter costs reflects a $5.4 million increase in operating expenses and a $2.3 million increase in selling, general and administrative ("SG&A") expenses. The cost of food, merchandise and games revenues for the period increased slightly due to sales volume increases at Knott's Berry Farm in the first quarter of 2013. The $5.4 million increase in operating expenses was due primarily to the extra week of operations in the first quarter of 2013 compared with 2012. For the quarter, labor costs increased $3.8 million, maintenance expense increased $2.2 million and operating supplies increased $0.9 million. These increases in operating costs were somewhat offset by a reduction in insurance expense due to a prior-year, non-recurring public liability claim at one of our parks. The $2.3 million increase in SG&A expenses was due primarily to increases in first-quarter advertising fees and full-time labor costs, largely related to full staffing levels.
Interest expense for the first quarter of 2013 was $25.8 million, representing a $1.0 million decrease compared to the first quarter of 2012. The decrease in interest expense was primarily due to the settlement of our Canadian swap in the first quarter of 2012.
During the first quarter of 2013, the net effect of our swaps decreased $10.2 million to a non-cash charge to earnings of $9.2 million, reflecting the regularly scheduled amortization of amounts in AOCI related to interest rate swaps, the write off of amounts in AOCI related to de-designated interest rate swaps, as well as gains from marking the ineffective and de-designated swaps to market. During the first quarter of 2013 we also recognized a $9.0 million charge to earnings for unrealized/realized foreign currency gains and losses, $8.9 million of which represents an unrealized foreign currency loss on the U.S.-dollar denominated debt held at our Canadian property. Due to our March 2013 refinancing, loan fees related to our 2010 and 2011 financings were written off, resulting in a $34.6 million charge to earnings in the period.
During the quarter, a benefit for taxes of $35.7 million was recorded to account for publicly traded partnership (PTP) taxes and the tax attributes of our corporate subsidiaries, compared to a benefit for taxes of $21.5 million in the same period a year ago. Actual cash taxes paid or quarterly financial statements. Nonetheless, the historical financial statement amounts included in this filing have been corrected for this error. We expect to likewise correct previously presented historical financial statementspayable are estimated to be included in future filings, including the annual financial statements to be included in our Annual Report on Form 10-Kbetween $14-$17 million for the 2013 calendar year.
After interest expense and the provision for taxes, net loss for the quarter totaled $109.1 million, or $1.95 per diluted limited partner unit, compared with net loss of $65.4 million, or $1.18 per diluted limited partner unit, for the first quarter a year ending December 31, 2012.ago. The larger net loss for the period is due to the loss on early debt extinguishment and a change in the unrealized/realized loss on foreign currency exchange, offset somewhat by the increased first-quarter revenues.
NineTwelve Months Ended September 30, 2012March 31, 2013 -
The fiscal nine-monthtwelve-month period ended September 30, 2012,March 31, 2013, consisted of a 39-week53-week period and included a total of 2,178 operating days compared with 3852 weeks and 2,148 operating days for the fiscal nine-monthtwelve-month period ended SeptemberMarch 25, 2011.2012. Operating days were virtually identical, as the current period had only one additional operating day.
The following table presents key financial information for the ninetwelve months ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | | | Nine months ended | | Nine months ended | | Increase (Decrease) | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | 3/31/2013 | | 3/25/2012 | | $ | | % | | | (39 weeks) | | (38 weeks) | | | | | | (53 weeks) | | (52 weeks) | | | | | | | (Amounts in thousands except per capita spending) | | | | (As restated) | | | | | | | | | | | | | | | (Amounts in thousands) | Net revenues | | $ | 939,249 |
| | $ | 883,627 |
| | $ | 55,622 |
| | 6.3 | % | | $ | 1,082,055 |
| | $ | 1,029,801 |
| | $ | 52,254 |
| | 5.1 | % | Operating costs and expenses | | 580,246 |
| | 541,665 |
| | 38,581 |
| | 7.1 | % | | 694,139 |
| | 666,535 |
| | 27,604 |
| | 4.1 | % | Depreciation and amortization | | 113,156 |
| | 110,857 |
| | 2,299 |
| | 2.1 | % | | 127,013 |
| | 125,892 |
| | 1,121 |
| | 0.9 | % | Loss on impairment / retirement of fixed assets, net | | 24,230 |
| | 1,076 |
| | 23,154 |
| | N/M |
| | (Gain) on sale of other assets | | | (6,625 | ) | | — |
| | (6,625 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | | 30,844 |
| | 11,251 |
| | 19,593 |
| | 174.1 | % | Operating income | | $ | 221,617 |
| | $ | 230,029 |
| | $ | (8,412 | ) | | (3.7 | )% | | $ | 236,684 |
| | $ | 226,123 |
| | $ | 10,561 |
| | 4.7 | % | N/M - Not meaningful | | | | | | | | | | | | | | | | | Other Data: | | | | | | | | | | | | | | | | | Adjusted EBITDA | | $ | 365,477 |
| | $ | 346,441 |
| | $ | 19,036 |
| | 5.5 | % | | $ | 395,475 |
| | $ | 371,905 |
| | $ | 23,570 |
| | 6.3 | % | Adjusted EBITDA margin | | 38.9 | % | | 39.2 | % | | $ | — |
| | (0.3 | )% | | 36.5 | % | | 36.1 | % | | — |
| | 0.4 | % | Attendance | | 20,689 |
| | 20,114 |
| | 575 |
| | 2.9 | % | | Per capita spending | | $ | 41.78 |
| | $ | 40.15 |
| | $ | 1.63 |
| | 4.1 | % | | Out-of-park revenues | | $ | 99,526 |
| | $ | 97,622 |
| | $ | 1,904 |
| | 2.0 | % | |
Net revenues totaled $1,082.1 millionfor the ninetwelve months ended September 30, 2012March 31, 2013, increasing $52.3 million, from $1,029.8 million increased $55.6 million to $939.2 million from $883.6 million duringfor the ninetrailing twelve months ended SeptemberMarch 25, 20112012. The increase in revenues reflects an increase of 575,000 visits, or 3%, in combined attendanceRevenues for the nine-monthtwelve-month period ended September 30, 2012 when compared withincreased 5% on the nine-month period ended September 25, 2011. The increase in revenues also reflects a 4%, or $1.63, increase in averagestrength of higher attendance and in-park guest per capita spending. In-park guest per capita spending represents the amount spent per attendee to gain admission to a park, plus all amounts spent while inside the park gates. The increase in per capita spending was largely due to the successful introduction of new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing initiatives. Attendance increased year-over-year on virtually the same number of operating days as our season pass sales and visits increased during the same nine-month period and a 2%, or $1.9 million, increase incomparable periods.
Meanwhile, out-of-park revenues. Out-of-park revenues, includewhich represents the sale of hotel rooms, food, merchandise and other complementary activities located outside of the park gates, as well as e-commerce transaction fees. In-park guest per capita spending representsincreased slightly in the average amount spent per attendee to gain admission to a park
plus all amounts spent while inside the park gates. Revenuescomparable periods. The increase in net revenues for the first ninetwelve months of the yearended March 31, 2013 also reflectreflects the negative impact of currency exchange rates and the weakening U.S. dollar on our Canadian operations ($4.5(approximately $4.5 million) during the period.
For the nine-month period ended September 30, 2012, operatingOperating costs and expenses increased 7%$27.6 million, or 4%, or $38.5to $694.1 million to $580.2 million from $541.7versus $666.5 million for 2012 and were in line with expectations. The increase in costs and expenses was the nine-month period ended September 25, 2011, the net result of a $3.9$4.0 million increase in cost of goods sold, a $29.3$19.8 million increase in operating expenses, and a $5.4 million$3.9 increase in selling, generalSG&A costs. The 4% increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at our parks. Operating expenses increased due to several factors, including higher employment-related costs, higher operating supply costs, and higher self-insurance expenses. Employment-related costs increased approximately $12.6 million due to normal merit increases, increases in health-related benefit costs, additional staffing levels associated with new premium benefit offerings and other initiatives aimed at improving the overall guest experience, and non-recurring severance payments. Operating supplies and expenses increased approximately $5.3 million due primarily to initiatives to expand or enhance live entertainment at the parks, as well as incremental costs associated with our e-commerce platform and higher attendance. These increases in operating costs were somewhat offset by a reduction in insurance expense due to a prior-year (first quarter of 2012), non-recurring public liability claim at one of our parks.
The increase in SG&A costs was due to an increase in employment-related costs ($4.5 million), operating supplies ($3.8 million), and agency advertising fees ($2.7 million), offset by decreases in professional and administrative costs ("SG&A")($5.9 million). DepreciationThe increase in employment costs was primarily the result of higher wages and amortization expense for the period increased $2.3 millionbenefits due to normal merit increases and full-staffing levels. Increases in operating supplies and advertising fees were due to the earlier timing of Easter, as well as incremental costs to support operating initiatives including general infrastructure improvements. Professional and administrative fees decreased primarily due to a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests. The overall increase in capital spending when compared withcosts and expenses also reflects the prior year. The positive impact of exchange rates on our Canadian operations ($1.2 million) during the period.
Loss on impairment/retirement of fixed assets, reported fornet, during the nine-month period totaled $30.8 million, which reflects a non-cash charge to earnings of $25.0 million for the partial impairment of operating and non-operating fixed assets at Wildwater Kingdom netalong with losses on other retirements. During the twelve-month period ended March 31, 2013, two non-core assets were sold at gains totaling $6.6 million. During the twelve-month period ended March 25, 2012, a charge of an $0.8$11.3 million gain fromfor the sale of a non-operating asset at one of our properties. After depreciation, amortization, loss on impairment / retirement of fixed assets was recorded which includes the retirement of the asset as described in Note 11 to the financial statements.
Depreciation and amortization expense for the period increased $1.1 million compared with the prior period due primarily to an increase in capital expenditures for the 2012 season. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for the current period decreased $8.4increased $10.6 million to $221.6$236.7 million through the first nine months of 2012 from operating income of $230.0 million through the first nine months of 2011.$226.1 million.
Interest expense for the first three quarters of 2012 was $83.9twelve months ended March 31, 2013 decreased $33.3 million a decrease of $40.7to $109.6 million, from $142.9 million for the first three quarters of 2011.same twelve-month period a year ago. The reduction in interest expense iswas primarily attributable to an approximate 300 basis point (bps) decline in our effective interest rate, the result of lower fixed rates on London InterBank Offered Rate (LIBOR) within our interest-rate swap contracts. TheAdditionally during the current period, $25.0 million of term debt principal payments were made, reducing our average fixed LIBOR rate in our swap agreements declined from 5.62% in 2011 to 2.48% in 2012.debt outstanding.
ForDuring the current period, the net effect of our interest rate swaps decreased $2.2was recorded as a charge to earnings of $8.7 million between years, resulting incompared to a non-cash benefit to earnings of $1.3$16.0 million for the first nine months of 2012, as compared with a $3.5 million non-cash benefit to earnings for the nine-month period in 2011.prior period. The difference reflects the regularly scheduled amortization of amounts in Accumulated other comprehensive income ("AOCI")AOCI related to the swaps and the write off of AOCI amounts related to de-designated interest rate swaps, which were offset by gains from marking the ineffective and de-designated swaps to market and foreign currency gains related to the U.S.-dollar denominated Canadian term loan in the current period. During the current year-to-date period, we also recognized a $13.9$8.2 million net benefitcharge to earnings for unrealized/realized foreign currency gains,losses, which included a $14.1$7.9 million unrealized foreign currency gainloss on the U.S.-dollar denominated debt held at our Canadian property. Due to our March 2013 refinancing, loan fees that were paid as part
of our 2010 and 2011 financings were written off, resulting in a $34.6 million non-cash charge to earnings recorded in "Loss on early debt extinguishment" on the consolidated statement of operations.
During the first fiscal nine months of 2012, aA provision for taxes of $41.4$17.6 million was recorded to accountin the period for publicly traded partnership (“PTP”) taxes and the tax attributes of our corporate subsidiaries.subsidiaries and publicly traded partnership (PTP) taxes. This compares with a $21.8 million provision for taxes of $5.9 million in period ended March 25, 2012 for the first fiscal nine monthstax attributes of 2011. The year-over-year variation in the tax provision is due primarily to an increase in the income subject to tax. Actual cash taxes paid or payable for the 2012 calendar year are estimated to be between $11our corporate subsidiaries and $13 million. The Partnership also expects to receive a $10.4 million refund of prior year taxes paid resulting from the carry back of the loss recognized from the settlement of a derivative contract.PTP taxes.
After interest expense and the benefitprovision for taxes, net income for the nine months ended September 30, 2012period totaled $111.6$58.1 million, or $2.00$1.04 per diluted limited partner unit, compared with net income of $71.6$84.8 million, or $1.28$1.52 per unit, for the nine months ended September 25, 2011.a year ago.
It is important to note that the current nine-month results benefited from an additional week, or 30 more operating days, due to the timing of the third quarter fiscal close. Comparing both 2012 and 2011 on a 39-week basis, net revenues would have been up $41.1 million, or 5%, on increases in both attendance and in-park guest per capita spending. On a comparable basis, attendance would have increased 228,000 visits, primarily due to an increase in season pass attendance, and in-park per capita spending would have increased $1.67, or 4%, primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Over that same comparable basis, out-of-park revenues would have decreased by approximately $0.3 million, or less than 1%.
Operating costs and expenses on a comparable 39-week basis would have increased approximately $27.9 million, or 5%, due to an increase of $2.9 million, or 3%, in cost of goods sold, an increase in operating expenses of $21.9 million, or 6%, and an increase of $3.1 million, or 3%, in SG&A costs. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $1.6 million) during the nine-month period ended September 30, 2012.
The 3% increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Operating expenses in the 39-week period increased due to several factors, including higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. Employment-related costs increased approximately $11.0 million due to normal merit increases, increases in health-related benefit costs, additional staffing levels associated with new premium benefit offerings and other initiatives aimed at improving the overall guest experience, and non-recurring severance payments. Due in part to mild weather, we were able to accelerate off-season maintenance projects into the first half of the year, resulting in year-over-year maintenance expense increasing by approximately $4.4 million. Operating supplies and expenses increased approximately $4.0 million due primarily to initiatives
to expand or enhance live entertainment at the parks, as well as incremental costs associated with our new e-commerce platform. During the first nine months, public liability and workers compensation expense increased $2.1 million due to claim settlements and an increase in our reserves based on management's estimates of future claims.
SG&A expense for the comparable 39-week period increased approximately $3.1 million compared to same period in 2011 due to an increase in operating supplies of $4.7 million, an increase in advertising costs of $1.5 million, and an increase in employee related costs of $2.9 million. The operating supplies and advertising increases were due to incremental costs to support 2012 operating initiatives including general infrastructure improvements. These increases in expense were offset somewhat by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in 2011.
For the fiscal nine-month period ended September 30, 2012,We believe Adjusted EBITDA (as defined in the Amended 2010 Credit Agreement), which we believe is a meaningful measure of our park-level operating results (for additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net income, see Note 6 in Item 6, “Selected Financial Data,” on pages 15-16). For the twelve-month period ended March 31, 2013, Adjusted EBITDA increased $23.6 million, or 6%, to $365.5 million compared with $346.4 million$395.5 million. Over this same period, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased 40 bps to 36.5% from 36.1% for the fiscal nine-monthtwelve-month period ended SeptemberMarch 25, 2011. This2012. The increase was due in part to the extra week in the current fiscal nine-month period. On a same-week basis, Adjusted EBITDA for the nine-month period would have still been up approximately $15.2 million, or 4%, between years,was primarily due to anthe increase in revenues resulting from the successful introduction of our new premium benefit offerings and dynamic pricing initiatives, as well as the successful expansion of our season pass base. These revenue gains were offset somewhat by an increase in operating costs in the period. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
Third Quarter -
The fiscal three-month period ended September 30, 2012, consisted of a 13-week period and included a total of 1,177 operating days compared with 13 weeks and 1,253 operating days for the fiscal three-month period ended September 25, 2011. The variance in days is due to a shift in the operating calendar.
The following table presents key financial information for the three months ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (13 weeks) | | (13 weeks) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 553,445 |
| | $ | 572,268 |
| | $ | (18,823 | ) | | (3.3 | )% | Operating costs and expenses | | 263,657 |
| | 262,188 |
| | 1,469 |
| | 0.6 | % | Depreciation and amortization | | 60,747 |
| | 63,448 |
| | (2,701 | ) | | (4.3 | )% | Loss on impairment / retirement of fixed assets | | 25,000 |
| | 880 |
| | 24,120 |
| | N/M |
| Operating income | | $ | 204,041 |
| | $ | 245,752 |
| | $ | (41,711 | ) | | (17.0 | )% | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 292,309 |
| | $ | 309,704 |
| | $ | (17,395 | ) | | (5.6 | )% | Adjusted EBITDA margin | | 52.8 | % | | 54.1 | % | | — |
| | (1.3 | )% | Attendance | | 11,960 |
| | 12,933 |
| | (973 | ) | | (7.5 | )% | Per capita spending | | $ | 42.90 |
| | $ | 40.84 |
| | $ | 2.06 |
| | 5.0 | % | Out-of-park revenues | | $ | 54,260 |
| | $ | 58,879 |
| | $ | (4,619 | ) | | (7.8 | )% |
For the quarter ended September 30, 2012, net revenues decreased 3%, or $18.8 million, to $553.5 million from $572.3 million in 2011. This decrease reflects a 5% increase in average in-park per capita spending, offset by an 8% decrease in combined attendance (973,000 visits), and an 8% ($4.6 million) decrease in out-of-park revenues. The decreases in net revenues and attendance was largely attributable to the decrease in operating days in the quarter due to the way the fiscal calendar fell in 2012 compared with 2011. In-park per capita spending increased primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Out-of-park revenues decreased due to soft results in accommodations being somewhat offset by fees generated from our new e-commerce initiatives. The decrease in revenues for the third quarter of 2012 also reflects the negative impact of exchange rates on our Canadian operations ($2.4 million) during the period.
Operating costs and expenses for the quarter increased less than 1%, or $1.5 million, to $263.7 million from $262.2 million in the third quarter of 2011, the net result of a $1.4 million decrease in cost of goods sold, a $1.9 million increase in operating expenses and a $1.0 million increase in SG&A costs. Operating cost and expense variances between years were also affected by the fewer number of operating days in the current fiscal quarter, as discussed above. Depreciation and amortization expense for the quarter decreased $2.7 million due primarily to the reduction in operating days in the period, on which depreciation expense is based. During the current quarter, we recognized a non-cash charge to earnings of $25.0 million for the partial impairment of operating and non-operating fixed assets at Wildwater Kingdom.
Interest expense for the third quarter of 2012 was $26.9 million, representing an $14.5 million decrease from the interest expense for the third quarter of 2011. As mentioned in the nine-month discussion above, interest expense decreased primarily due to an approximate 300 bps decline in our effective interest rate. The decline in the effective interest rate is primarily due to lower fixed rates of LIBOR in debt associated derivative contracts, which declined from 5.62% in 2011 to 2.48% in 2012.
The net effect of our swaps during the third quarter was a non-cash benefit to earnings of $0.2 million, representing a decrease of $3.8 million from the prior year. This non-cash benefit reflects the regularly scheduled amortization of amounts in AOCI related to the swaps. During the 2012 third quarter, we also recognized a $15.0 million net benefit to earnings for unrealized/realized foreign currency gains, $14.7 million of which represents an unrealized foreign currency gain on the U.S.-dollar denominated debt held at our Canadian property.
During the quarter, a provision for taxes of $51.7 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provision for taxes of $37.8 million in the same period a year ago. The variation in the tax provision recorded between periods is due primarily to the increase in income subject to tax. After interest expense and the provision for taxes, net income for the quarter totaled $140.7 million, or $2.51 per diluted limited partner unit, compared with net income of $152.2 million, or $2.73 per unit, for the third quarter a year ago.
It is important to note that the current three-month results were negatively impacted by 76 less operating days, due to the timing of the second and third quarter fiscal closes. Comparing the third quarters of 2012 and 2011 on a comparable operating-day basis, net revenues would have been up $20.8 million, or 4%, on an increase in average in-park guest per capita spending offset by a slight decrease in attendance and a 3% decrease in out-of-park revenues.
Operating costs and expenses on a comparable operating-day basis would have increased approximately $12.4 million, or 5%, on a $2.1 million increase in cost of goods sold, an $8.4 million increase in operating expenses, and $1.9 million increase in SG&A costs. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $0.6 million) during the third quarter. The increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Consistent with our nine-month discussion above, operating expenses in the third quarter increased as a result of higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. The increase in SG&A expense for the quarter reflects an increase in operating supplies associated with the new e-commerce initiative and general park infrastructure improvements, offset slightly by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in the third quarter of 2011.
For the current quarter, Adjusted EBITDA decreased to $292.3 million from $309.7 million for the fiscal third quarter of 2011. The $17.4 million decrease in Adjusted EBITDA was due to the shift in operating days during the quarter. On a same week basis, Adjusted EBITDA would have increased $11.3 million due to incremental revenues resulting from the introduction of new premium benefit offerings, which contributed to increased average guest per capita spending, as well as an increase in attendance in the quarter. Partially offsetting these gains on a same week basis were higher park-level operating costs during the period related to park pre-opening and off-season maintenance projects and increases in costs to support 2012 initiatives, including a new e-commerce platform and infrastructure improvements. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
Twelve Months Ended September 30, 2012 -
The fiscal twelve-month period ended September 30, 2012, consisted of a 53-week period and included a total of 2,416 operating days compared with 52 weeks and 2,381 operating days for the fiscal twelve-month period ended September 25, 2011.
The following table presents key financial information for the twelve months ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (53 weeks) | | (52 weeks) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,084,094 |
| | $ | 1,013,316 |
| | $ | 70,778 |
| | 7.0 | % | Operating costs and expenses | | 701,915 |
| | 650,925 |
| | 50,990 |
| | 7.8 | % | Depreciation and amortization | | 128,136 |
| | 126,382 |
| | 1,754 |
| | 1.4 | % | Loss on impairment of goodwill and other intangibles | | — |
| | 903 |
| | (903 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 25,719 |
| | 63,509 |
| | (37,790 | ) | | N/M |
| Operating income | | $ | 228,324 |
| | $ | 171,597 |
| | $ | 56,727 |
| | 33.1 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 393,612 |
| | $ | 366,376 |
| | $ | 27,236 |
| | 7.4 | % | Adjusted EBITDA margin | | 36.3 | % | | 36.2 | % | | — |
| | 0.2 | % | Attendance | | 23,961 |
| | 23,135 |
| | 826 |
| | 3.6 | % | Per capita spending | | $ | 41.44 |
| | $ | 39.91 |
| | $ | 1.53 |
| | 3.8 | % | Out-of-park revenues | | $ | 119,460 |
| | $ | 114,258 |
| | 5,202 |
| | 4.6 | % |
Net revenues totaled $1,084.1 million for the twelve months ended September 30, 2012, increasing $70.8 million, from $1,013.3 million for the trailing twelve months ended September 25, 2011. The increase in revenues was due to an increase in attendance of 826,000 visits, or 4%, an increase in average in-park per capita spending of $1.53, or 4%, and an increase in out-of-park revenues of $5.2 million, or 5%. The attendance increase was due to an increase in season pass visitation as well as the effect of the extra operating days in the period. The increase in average in-park guest per capita spending is primarily due to new premium benefit offerings and the positive impact from new customer messaging and dynamic pricing. Out-of-park revenues increased due to our hotel properties and due to an increase in fees generated by our new e-commerce initiatives. The increase in revenues was also positively affected by the additional operating days in the current fiscal period.
When comparing the two twelve-month periods, operating costs and expenses increased $51.0 million, or 8%, to $701.9 million in 2012 from $650.9 million in 2011. The increase in operating costs and expenses was the net result of a $5.2 million increase in cost of goods sold, a $33.2 million increase in operating expenses and an increase of $12.6 million in selling, general and administrative costs. The increase in operating expenses is primarily attributable to higher employment related expenses of $15 million, $6 million of higher maintenance costs, $1 million in higher insurance costs, and $5 million of higher operating supply costs. The increase in wages is largely due to increased seasonal labor hours as a result of expanded operating hours at several parks, additional attractions and guest services, and the overall effect of increased attendance. The increase in insurance costs was primarily the result of claim settlements and increases in our reserves based on future estimated claim liabilities. As discussed in the nine- and three-month sections, maintenance costs increased primarily due to the earlier timing of planned off-season projects, as well as an increase in the number of projects designed to add to the guest experience. The increase in operating supply costs relates primarily to an increase in attendance over the past year, as well as incremental costs associated with the new e-commerce platform. The increase in SG&A costs includes $5 million in costs largely related to the launching of several new revenue initiatives for the 2012 season, as well as a $3 million increase in advertising expense as we transitioned to a new advertising agency for 2012. Employment related expenses increased $5 million primarily due to the receipt of a non-recurring payroll tax credit of $2.5 million recorded in the fourth quarter of 2010, as well as an increase in retirement expenses and non-recurring severance payments in the current twelve-month period. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $1.6 million) during the twelve-month period ended September 30, 2012.
Depreciation and amortization expense for the trailing-twelve-month periods increased $1.8 million between years due to the increase in capital spending during the current-year period compared with the prior year. During the twelve months ended September 30, 2012, we recognized $0.7 million in non-cash charges for the retirement of assets in the normal course of business. Additionally, we recorded a non-cash charge of $25.0 million for the partial impairment of operating and non-operating fixed
assets at Wildwater Kingdom during the third quarter in 2012. This compares to a non-cash charges recognized during the twelve-month period ended September 25, 2011 of $62.0 million at California's Great America for the partial impairment of its fixed assets and $1.5 million for asset retirements across all properties. Additionally, a non-cash charge of $0.9 million was recorded during the fourth quarter of 2010 for the partial impairment of trade-names originally recorded at the time of the PPI acquisition. It is important to note that each of our parks produces positive cash flow, and that trade-name write-downs and fixed asset impairment losses do not affect cash, Adjusted EBITDA or liquidity.
After depreciation, amortization, loss on impairment of the trade-names, loss on impairment / retirement of fixed assets, and all other non-cash costs, operating income for the twelve months ended September 30, 2012 increased $56.7 million to $228.3 million compared with $171.6 million for the same period a year ago.
Interest expense for the twelve month period ended September 30, 2012 decreased $54.6 million to $116.4 million from $171.0 million for the prior twelve month period ended September 25, 2011. As mentioned in the nine-month discussion above, interest expense decreased primarily due to an approximate 300 bps decline in our effective interest rate. The decline in the effective interest rate is primarily due to lower fixed rates of LIBOR in debt associated derivative contracts, which declined from 5.62% in 2011 to 2.48% in 2012.
The net effect of our swaps during the period was a non-cash benefit to earnings of $10.9 million, representing an increase of $12.7 million from the same period ended September 25, 2011. This non-cash benefit reflects gains from marking the ineffective and de-designated swaps to market, offset somewhat by the regularly scheduled amortization of amounts in AOCI related to the swaps and foreign currency losses related to the U.S.-dollar denominated Canadian term loan in the current twelve month period. During the current twelve-month period, we also recognized a $18.7 million net benefit to earnings for unrealized/realized foreign currency gains and losses, $17.5 million of which represents an unrealized foreign currency gain on the U.S.-dollar denominated debt held at our Canadian property.
A provision for taxes of $30.8 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries during the twelve-month period ended September 30, 2012, compared with a net benefit for taxes of $12.4 million during the same twelve-month period a year ago. The variation in the recorded tax provision between periods is due to the higher income subject to tax for the twelve-month period ending September 30, 2012 and the tax benefit of the impairment charge recorded in the previous twelve-month period.
After interest expense and the provision for taxes, net income for the twelve months ended September 30, 2012 was $110.8 million, or $1.98 per diluted limited partner unit, compared with net income of $8.1 million, or $0.15 per diluted limited partner unit, for the twelve months ended September 25, 2011.
It is important to note that due to the timing of the third quarter fiscal close results for the twelve-month period ended September 30, 2012 benefited from an additional week (53 weeks) compared to the twelve-month period ended September 25, 2011 (52 weeks). Comparing the twelve-month periods for both 2012 and 2011 on a 53-week basis, net revenues would have been up $56.2 million, or 5%, on increases in attendance, in-park guest per capita spending and out-of-park revenues. On a comparable 53-week basis, attendance would have increased 479,000 visits, due to an increase in season pass attendance, and in-park per capita spending would have increased $1.56, or 4%, primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Over that same comparable basis, out-of-park revenues would have increased by approximately $3.5 million, or 3%.
On a comparable 53-week basis, operating costs and expenses would have increased approximately $40.3 million, or 6%, on a $4.2 million increase in cost of goods sold, an $25.8 million increase in operating expenses, and $10.4 million increase in SG&A costs. The overall increase in costs and expenses also reflects the favorable impact of exchange rates on our Canadian operations (approximately $1.6 million) during the period. The increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Consistent with our nine- and three-month discussions above, operating expenses for the twelve-month period increased as a result of higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. The higher employment-related costs reflect normal merit increases, increases in health-related benefit costs, an overall increase in seasonal labor hours as a result of expanded operating hours at several parks, additional attractions and guest services, the overall effect of increased attendance, and non-recurring severance payments. Employment related costs also increased as result of the non-recurring payroll tax credit of $2.5 million recorded in the fourth quarter of 2010. The higher maintenance costs in the current-year twelve-month period relate primarily to the earlier timing of planned off-season projects, which was possible as a result of the mild early-season weather in 2012. The increase in operating supplies was driven by higher attendance and new initiatives to expand or enhance live entertainment at the parks, as well as incremental costs associated with our new e-commerce platform. The increase in public liability and workers compensation expense was the result of a claim settlement in the first quarter of 2012
and increases in our reserves based on management's estimates of future claims. The higher SG&A costs reflect incremental costs associated with the launching of several new revenue initiatives for the 2012 season, including the new e-commerce platform, general park infrastructure improvements, and an increase in advertising expenses as we transitioned to a new advertising agency for 2012. These increases in SG&A costs were somewhat offset by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in 2011.
For the twelve-month period ended September 30, 2012, Adjusted EBITDA increased to $393.6 million compared with $366.4 million for the twelve months ended September 25, 2011, while our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased slightly to 36.3% from 36.2% a year ago. A portion of this increase in Adjusted EBITDA was due to the extra week in the current fiscal twelve-month period. On a same-week basis, Adjusted EBITDA would have been up $23.4 million, or 6%, year over year, due to revenue growth driven by increased attendance and the strong 2011 fourth quarter operating performance. These gains were offset somewhat by incremental operating costs associated with the higher attendance and new operating initiatives for 2012. For the comparable twelve-month periods, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) would have increased 30 bps to 36.3% from 36.0% last year. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
October 2012 -
Based on preliminary results through the end of October, revenues for the first ten months of the year increased approximately $37 million to $1,036 million from $999 million for the same period a year ago. The revenue increase is the result of a 4% increase in average in-park guest per capita spending to $42.00 and attendance levels that were comparable with last year's record results (22.7 million visits). Out-of-park revenues of approximately $108 million through October were also comparable with this time last year.
Liquidity and Capital Resources: With respect to both liquidity and cash flow, we ended the thirdfirst quarter of 20122013 in sound condition. The negative working capital ratio (current assetsliabilities divided by current liabilities)assets) of 1.01.4 at September 30, 2012March 31, 2013 reflects the impact of our seasonal business. Cash, receivables and inventories are at normal seasonal levels and credit facilities are in place to fund current liabilities.
In July 2010, we issued $405 million of 9.125% senior unsecured notes, maturing in 2018, in a private placement, including $5.6 million of Original Issue Discount (OID) to yield 9.375%. Concurrently with this offering, we entered into a new $1,435 million credit agreement (the "2010 Credit Agreement"), which included a $1,175 million senior secured term loan facility and a $260 million senior secured revolving credit facility. The net proceeds from the offering of the notes, along with borrowings under the 2010 Credit Agreement, were used to repay in full all amounts outstanding under our previous credit facilities.
In February 2011, we amended the 2010 Credit Agreement (as so amended, the "Amended 2010 Credit Agreement") and extended the maturity date of the U.S. term loan portion of the credit facilities by one year. Under the Amended 2010 Credit Agreement, the extended U.S. term loan iswas scheduled to mature in December of 2017 and bearsbore interest at a rate of LIBOR plus 300 bps, with a LIBOR floor of 100 bps. The Amended 2010 Credit Agreement also includesincluded a $260 million revolving credit facility. Under the agreement, the Canadian portion of the revolving credit facility has a limit of $15 million. U.S. denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 400 bps (with no LIBOR floor). Canadian denominated loans made under the Canadian portion of the facility also bear interest at a rate of LIBOR plus 400 bps (with no LIBOR floor). The revolving credit facility, which matureswas scheduled to mature in July of 2015, also providesprovided for the issuance of documentary and standby letters of credit.
In May 2012, the Partnership prepaidMarch 2013,we issued $16500 million of long-term debt to meet its obligation5.25% senior unsecured notes, maturing in 2021, in a private placement, with no OID. Concurrently with this offering, we entered into a new $885 million credit agreement (the "2013 Credit Agreement"), which included a $630 million senior secured term loan facility and a $255 million senior secured revolving credit facility. The terms of the senior secured term loan facility include a maturity date of March 15, 2020 and an interest rate of LIBOR plus 250 bps with a LIBOR floor of 75 bps. The term loan amortizes at $6.3 million annually. The net proceeds from the notes and borrowings under the Excess Cash Flow ("ECF") provision2013 Credit Agreement were used to repay in full all amounts outstanding under the previous credit facilities. The facilities provided under the 2013 Credit Agreement are collateralized by substantially all of the assets of the Partnership.
Terms of the 2013 Credit Agreement. AsAgreement include a resultrevolving credit facility of this prepayment, as well as additional optional long-term debt prepayments made in August 2011 and September 2012a combined $255 million. Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility has a limit of $1815 million. U.S. denominated and Canadian denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 225 bps (with no LIBOR floor). The revolving credit facility is scheduled to mature in March 2018 and also provides for the issuance of documentary and standby letters of credit. The 2013 Credit Agreement requires the Partnership to pay a commitment fee of $9 million50, respectively, bps per annum on the Company has no scheduled term-debt principal payments untilunused portion of the first quarter of 2015.credit facilities. At the end of the quarter, we had a total of $1,131.1$630.0 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $400.7$901.3 million of fixed-rate debt (including OID), no$96.0 million outstanding borrowings under our revolving
credit facility, and cash on hand of $96.1$10.0 million. After letters of credit, which totaled $16.5$16.4 million at September 30, 2012March 31, 2013, we had $243.5$142.6 million of available borrowings under the revolving credit facility under the Amended 20102013 Credit Agreement.
Our $405 million of senior unsecured notes require semi-annual interest payments in February and August, with the principal due in full on August 1, 2018. The notes may be redeemed, in whole or in part, at any time prior to August 1, 2014 at a price equal to 100% of the principal amount of the notes redeemed plus a “make-whole” premium together with accrued and unpaid interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Prior to August 1, 2013, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 109.125%. Our $500 million of senior unsecured notes pay interest semi-annually in March and September, with the principal due in full on March 15, 2021. The notes may be redeemed, in whole or in part, at any time prior to March 15, 2016 at a price equal to 100% of the principal amount of the notes redeemed plus a “make-whole” premium together with accrued and unpaid interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Prior to March 15, 2016, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 105.25%. In order to maintain fixed interest costs on a portion of our domestic term debt, in September 2010 we entered into several interest rateforward-starting swap agreements ("September 2010 swaps") to effectively convert a total of $600$600 million of variable-rate debt to fixed rates beginning in October 2011. As a result of the February 2011 amendment to our credit agreement,the 2010 Credit Agreement, the LIBOR floor on the term loan portion of ourits credit facilities decreased to 100 bps from 150 bps, causing a mismatch in critical terms of the September 2010 swaps and the underlying debt. Because of the mismatch of critical terms, we determined the September 2010 swaps, which were originally designated as cash flow hedges, were no longer highly effective, resulting in the de-designation of the September 2010 swaps as of the end of February 2011. As a result of this ineffectiveness, gains of $7.2 million recorded in AOCI through the date of de-designation are being amortized through December 2015. In order to monetize the difference in the LIBOR floors, in March 2011, we entered into several additional forward-starting basis-rate swap agreements ("March 2011 swaps") that, when combined with the September 2010 swaps, effectively converted $600$600 million of variable-rate debt to fixed rates beginning in October 2011. The September 2010 swaps and the March 2011 swaps, were jointly designated as cash flow hedges, maturing in December 2015 and had fixed LIBOR at a weighted average rate of 2.46%. For the period that the September 2010 swaps were de-designated, their fair value decreased by $3.3 million, the offset of which have beenwas recognized as a direct charge to earnings and recorded to “Net effect of swaps” on the consolidated statement of operations along with the regular amortization of “Other comprehensive income (loss)” balances related to these swaps. No other ineffectiveness related to these swaps was recorded in any period presented. In May 2011, we entered into four additional forward-starting basis-rate swap agreements ("May 2011 swaps") that effectively converted another $200 million of variable-rate debt to fixed rates beginning in October 2011. These swaps, which were designated as cash flow hedges, mature in December 2015 and fixed LIBOR at a weighted average rate of 2.54%. As a result of the 2013 Credit Agreement, the previously described swaps were de-designated as the spreads of the 2013 Credit Agreement decreased to 75 bps from 100 bps in the Amended 2010 Credit Agreement. The May 2011 swaps remain de-designated as the amount of variable rate debt decreased to $630 million, and accordingly, the May 2011 swaps are now over hedged. On March 4, 2013, we entered into several forward-starting swap agreements ("March 2013 swaps") that were not designated as a cash flow hedge on that date. On March 6, 2013, the March 2013 swaps were combined with the September 2010 swaps and the March 2011 swaps, and designated as cash flow hedges, effectively converting $600 million of variable-rate debt to fixed rates. The September 2010 swaps, the March 2011 swaps, and the March 2013 swaps were jointly designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.46%. In May 2011, we entered into four additional forward-starting basis-rate swap agreements ("May 2011 swaps") that effectively convert another $200 million of variable-rate debt to fixed rates beginning in October 2011. These swaps, which have been designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.54%2.331%. TheAt the time of the de-designation, the fair market value of all $800the September 2010 swaps, March 2011 swaps, and March 2013 swaps was $23.8 million, which will be amortized out of forward-starting swap agreements atAOCI into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive incomethrough December 2015. At the time of the de-designation, the fair market value of the May 2011 swaps was $7.8 million and was immediately recognized into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations.
At March 31, 2013, the fair market value of the September 30, 20122010 swaps, the March 2011 swaps and the March 2013 swaps was a liability of $34.723.4 million, which was recorded in "Derivative Liability"“Derivative Liability” on the condensed consolidated balance sheet. The May 2011 swaps had a fair market value of $7.6 million as of March 31, 2013 and was recorded in “Derivative Liability” on the condensed consolidated balance sheet.
The following table presents our September 2010 swaps, March 2011 swaps, and May 2011 swaps, and March 2013 swaps which became effective on October 1, 2011 and mature December 15, 2015, along with their notional amounts and their effective fixed interest rates. | | | | | | | | ($'s in thousands) | Forward-Starting Interest Rate Swaps | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 2.40 | % | | 75,000 |
| | 2.43 | % | | 50,000 |
| | 2.42 | % | | 150,000 |
| | 2.55 | % | | 50,000 |
| | 2.42 | % | | 50,000 |
| | 2.55 | % | | 25,000 |
| | 2.43 | % | | 50,000 |
| | 2.54 | % | | 30,000 |
| | 2.54 | % | | 70,000 |
| | 2.54 | % | | 50,000 |
| | 2.54 | % | Total $'s / Average Rate | $ | 800,000 |
| | 2.48 | % |
In 2006, we entered into several fixed-rate interest rate swap agreements totaling $1.0 billion. The weighted average fixed-LIBOR rate on these interest rate swaps, which matured on October 1, 2011, was 5.6%. Based upon our scheduled quarterly regression analysis testing of the effectiveness for the accounting treatment of these swaps, as well as changes in the forward interest rate yield curves used in that testing, the swaps were deemed to be ineffective beginning in October 2009 and continued to be deemed ineffective through their maturity. This resulted in the swaps not qualifying for hedge accounting during the fourth quarter of 2009 and through 2010 and the first three quarters of 2011.
In 2007, we entered into two cross-currency swap agreements, which matured in February 2012 and effectively converted $268.7 million of term debt at the time, and the associated interest payments, from U.S. dollar denominated debt at a rate of LIBOR plus
200 bps to 6.3% fixed-rate Canadian dollar denominated debt. As a result of paying down the underlying Canadian term debt with net proceeds from the sale of surplus land near Canada’s Wonderland in August 2009, the notional amounts of the underlying debt and the cross-currency swaps no longer matched. Because of the mismatch of the notional amounts, we determined the swaps were no longer highly effective going forward, resulting in the de-designation of the swaps as of the end of August 2009.
Based on the change in currency exchange rates from the time we originally entered into the cross-currency swap agreements in 2007, the termination liability of the swaps had increased steadily over time. In order to protect ourselves from further downside risk to the swaps' termination value, in May 2011 we entered into several foreign currency swap agreements to fix the exchange rate on 50% of the liability. In July 2011, we fixed the exchange rate on another 25% of the swap liability, leaving only 25% exposed to further fluctuations in currency exchange rates. In February 2012, these swap agreements were settled for $50.5 million.
In addition to other covenants and provisions, including those discussed below, the Amended 2010 Credit Agreement contains an initial three-year requirement (from July 2010) that at least 50% of our aggregate term debt and senior notes be subject to either a fixed interest rate or interest rate protection. As of September 30, 2012, we were in compliance with this requirement.
The following table presents fixed-rate swaps that matured on October 1, 2011. The table also presents our cross-currency swaps that matured on February 15, 2012 and their notional amounts and interest rates as of their maturity date.
| | | | | | | | | | | Interest Rate Swaps | (
The Amended 20102013 Credit Agreement requires us to maintain specified financial ratios, which if breached for any reason, including a decline in operating results due to economic or weather conditions, could result in an event of default under the agreement. The most critical of these ratios is the Consolidated Leverage Ratio, which is measured on a trailing-twelve-month quarterly basis. At the end of the thirdfirst quarter of 2012,2013, this ratio was set at 6.00x6.25x consolidated total debt (excluding the revolving debt)-to-consolidated EBITDA. The ratio will remain at that level through the end of the first quarter in 2014 and will decrease each second quarter beginning in the second quarter of 2014. Based on our trailing-twelve-month results ending September 30, 2012March 31, 2013, our Consolidated Leverage Ratio was 3.89x, providing $138.3148.2 million of EBITDA cushion on the ratio at the end of the thirdfirst quarter. We were in compliance with all other covenants under the Amended 20102013 Credit Agreement as of September 30, 2012March 31, 2013. The Amended 20102013 Credit Agreement allows restricted payments of up to $20$60 million annually so long as no default or event of default has occurred and is continuing. These restricted payments are not subject to any specific covenants. In 2012, additionalAdditional restricted payments are allowed to be made based on an excess-cash-flow formula, should our pro-forma Consolidated Leverage Ratio be less than or equal to 4.50x,5.0x, measured on a trailing-twelve-month quarterly basis. At March 31, 2013, the notes maturing in 2018 have more restrictive covenants than the 2021 notes. The terms of the indenture governing our 2018 notes permit us to make restricted payments of $20 million annually. Our ability to make additional restricted payments in 20122013 and beyond is permitted should our trailing-twelve-month Total-Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 4.75x, measured on a quarterly basis. In accordance with these debt provisions, on August 9, 2012,February 27, 2013, we announced the declaration of a distribution of $0.40$0.625 per limited partner unit, which was paid on September 15, 2012,March 25, 2013, and on November 6, 2012,May 8, 2013 we announced the declaration of a distribution of $0.40$0.625 per limited partner unit, payable DecemberJune 17, 2012, which will bring our total distributions paid in 2012 to $1.60 per limited partner unit.2013. Existing credit facilities and cash flows from operations are expected to be sufficient to meet working capital needs, debt service, partnership distributions and planned capital expenditures for the foreseeable future.
Off Balance Sheet Arrangements: We had $16.5$16.4 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of September 30, 2012March 31, 2013. We have no other significant off-balance sheet financing arrangements.
Forward Looking Statements Some of the statements contained in this report (including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section) that are not historical in nature are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements as to our expectations, beliefs and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond our control and could cause actual results to differ materially from those described in such statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct. Important factors, including those listed under Item 1A in the Company’s Annual Report on Form 10-K, could adversely affect our future financial performance and cause actual results to differ materially from our expectations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks from fluctuations in interest rates, and to a lesser extent on currency exchange rates on our operations in Canada and, from time to time, on imported rides and equipment. The objective of our financial risk management is to reduce the potential negative impact of interest rate and foreign currency exchange rate fluctuations to acceptable levels. We do not acquire market risk sensitive instruments for trading purposes. We manage interest rate risk through the use of a combination of fixed-rate long-term debt, interest rate swaps that fix a portion of our variable-rate long-term debt, and variable-rate borrowings under our revolving credit facility. Translation exposures with regard to our Canadian operations are not hedged. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the change in fair value of the derivative instrument is reported as a component of “Other comprehensive income (loss)” and reclassified into earnings in the period during which the hedged transaction affects earnings. Changes in fair value of derivative instruments that do not qualify as effective hedging activities are reported as “Net effect of swaps” in the consolidated statement of operations. Additionally, the “Other comprehensive income (loss)” related to interest rate swaps that become ineffective is amortized over the remaining life of the interest rate swap, and reported as a component of “Net effect of swaps” in the consolidated statement of operations. As of March 31, 2013, we had $901.3 million of fixed-rate senior unsecured notes and $630 million of variable-rate term debt. After considering the impact of interest rate swap agreements, approximately $1.2 billionvirtually all of our outstanding long-term debt represents fixed-rate debt and approximately $331.1 million represents variable-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $61$50 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt, after the fixed-rate swap agreements, would lead to an increasea decrease of approximately $2.5$0.5 million in annual cash interest costs. A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $5.4$4.4 million decrease in annual operating income.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures - The Partnership maintains a system of controls and procedures designed to ensure that information required to be disclosed by the Partnership in its reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission and that such information is accumulated and communicated to the Partnership’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of September 30, 2012March 31, 2013, the PartnershipPartnership's management has evaluated the effectiveness of the design and operation of itsthe Partnership's disclosure controls and procedures under supervision of management, includingand with the participation of the Partnership's Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Partnership's disclosure controls and procedures are effective.were effective as of March 31, 2013.
(b)Changes in Internal Control Over Financial Reporting - As disclosed in Amendment No. 2 to the Partnership's Form 10-K/A for the fiscal year ended December 31, 2012, in connection with restating the Partnership's consolidated financial statements therein, management identified a material weakness in internal control over financial reporting related to the Partnership's fixed assets, resulting in a conclusion that the Partnership's internal control over financial reporting was not effective as of December 31, 2012. Remediation of this material weakness in internal control over financial reporting was accomplished through the conversion of all composite assets to the unit method of depreciation as of January 1, 2013. The conversion to the unit method eliminates the concept of normal vs. unusual as any and all asset retirements with a remaining net book value will be reflected in the Consolidated Statements of Operations and Comprehensive Income. There were no other changes in the Partnership’s internal controlscontrol over financial reporting in connection with its 2012that occurred during the fiscal quarter ended thirdMarch 31, 2013-quarter evaluation, or subsequent to such evaluation, that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Jacob T. Falfas vs. Cedar Fair, L.P.
On July 23, 2010, Jacob T. (Jack) Falfas, the former Chief Operating Officer, filed a demand for private arbitration as provided by his employment agreement. In that demand, Mr. Falfas disputed the Partnership's position that he had resigned in June 2010, alleging instead that his employment with the Partnership was terminated without cause. That dispute went to private arbitration, and on February 28, 2011, an arbitration panel ruled 2-to-1 in favor of Mr. Falfas finding that he did not resign but was terminated without cause. Rather than fashioning a remedy consistent with the employment agreement, the panel ruled that Mr. Falfas should be reinstated. The Partnership believed that the arbitrators exceeded their authority by creating a remedy not legally available to Mr. Falfas under his contract with Cedar Fair. On March 21, 2011, the Partnership filed an action in Erie County Court of Common Pleas (Case No. 2011 CV 0217) seeking to have the award modified or vacated. On March 22, 2011, Mr. Falfas commenced a related action in the Erie County Court of Common Pleas (Case No. 2011 CV 0218) demanding enforcement of the arbitration ruling. The two actions were combined into Case No. 2011 CV 0217, before Judge Roger E. Binette. On February 22, 2012 the Erie County Common Pleas Court issued a ruling partially vacating the arbitration award and declaring that Mr. Falfas was not entitled to reinstatement of his employment. The ruling also provided that in accord with paragraph 2 of the arbitration award Mr. Falfas was entitled to certain back pay and other benefits under his 2007 Amended and Restated Employment Agreement as if the employment relationship had not been severed. In March of 2012 Mr. Falfas and the Company both filed appeals of the Court's ruling with the Ohio Sixth District Court of Appeals in Toledo, Ohio. The parties participated in mediation on May 7, 2012 at the direction ofOn April 19, 2013 the Court of Appeals.Appeals issued a ruling reversing the Erie County Common Pleas Court's order regarding the reinstatement of Mr. Falfas' employment and affirming the order regarding back pay and other benefits and remanding the case back to the Erie County Common Pleas Court for further proceedings. The mediation did not result inCompany has until June 3, 2013 to file a settlement. As a resultnotice of appeal with the matter will now proceed through the normal appeal process which typically takes six to nine months to complete. Briefs have been filed and the parties are awaiting scheduling of oral argument.Ohio Supreme Court. The Partnership believes the liability recorded as of September 30, 2012March 31, 2013 to be adequate and does not expect the arbitration ruling or the court order to materially affect its financial results in future periods.
ITEM 1A. RISK FACTORS There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.2012.
ITEM 5. OTHER INFORMATION
TheOn May 8, 2013, the Partnership usesannounced that it had identified a historical classification error in the Partnership's initial determination of whether a specific asset retired under the composite method of depreciation methodwas normal or unusual. The error resulted in the overstatement of Income before taxes of $8.8 million for the groupperiod ended December 31, 2011.
Under the composite method of depreciation, no gain or loss is recognized on normal retirements of composite assets. Instead the net book value after salvage of a retired asset reduces accumulated depreciation for the composite group. Abnormal or unusual retirements of composite assets acquiredwould result in the recognition of a gain or loss. The error resulted in the Partnership's application of its qualitative policy used to determine whether an asset retirement is normal or unusual. The asset retirement being restated was originally classified as normal, thus reducing accumulated depreciation. Management identified that the Partnership had failed to consider whether the specific asset had a whole in 1983,substantial net book value and/or if the retirement caused a deviation from the estimated composite depreciation survivor curve as well as for groupsother minor qualitative issues.
The restatement amount of assets$8.8 million is recorded in each subsequent business acquisition. Upon the normalLoss on impairment / retirement of an asset within a composite group, the Partnership's practice generally has been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of the Partnership's financial statements for the interim period ended July 1, 2012, management determined that this methodology was not appropriate. As a result, the Partnership revised the useful lives of its composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation). Management evaluated the amount and nature of these adjustments and concluded that they were not material to either the Partnership's prior annual or quarterly financial statements. Nonetheless, the historical financial statement amounts included in this filing have been corrected for this error. The Partnership expects to likewise correct previously presented historical financial statements to be included in future filings, including the annual financial statements to be includedfixed assets, net in the Partnership's Annual Report on Form 10-K for10-K/A filing to correct the year ending December 31, 2012.previous error.
ForAs disclosed in the year ended December 31, 2011Partnership's prior filings, the correctionPartnership had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation with the change effective January 1, 2013. The Partnership believes that pursuant to generally accepted accounting principles, changing from the composite method of depreciation to the unit method of depreciation is a change in accounting estimate that is effected by a change in accounting principle, which should be accounted for prospectively. The change to the unit method of depreciation eliminates the qualitative judgment needed to determine whether an asset retirement is normal or unusual, as the net book value of all retirements will decrease net income (loss) by $1.4 millionbe recorded in the Consolidated Statements of Operations and the provision (benefit) for taxes will decrease by $0.6 million. For the 2010 annual financial statements, the correction will decrease net income (loss) by $1.5 million and the provision (benefit) for taxes will decrease by $0.6 million. For the 2009 annual financial statements, the correction will decrease net income (loss) by $1.2 million and the provision (benefit) for taxes will decrease $0.4 million. The balance sheet as of December 31, 2011 has already been corrected in this Form 10-Q.Comprehensive Income.
ITEM 6. EXHIBITS | | | | Exhibit (4.1) | | Rights Agreement between Cedar Fair, L.P. and American Stock Transfer and Trust Co., LLC, dated April 5, 2010. Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on April 6, 2010.
| | | | Exhibit (4.2) | | Indenture, by and among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and The Bank of New York Mellon, as trustee, dated as of July 29, 2010 (including form of 9.125% Senior Notes due 2018). Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (4.3) | | Registration Rights Agreement, among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and J.P. Morgan Securities Inc., as representative of the initial purchasers named therein, dated July 29, 2010. Incorporated herein by reference to Exhibit 4.2 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (10.1) | | Cedar Fair, L.P. Amended and Restated Executive Severance Plan dated July 18, 2007. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-09444) filed on August 3, 2007. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) The Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) The Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notes |
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, Inc. | | | | General Partner | | | | | Date: | November 7, 2012May 10, 2013 | /s/ Matthew A. Ouimet | | | Matthew A. Ouimet | | | President and Chief Executive Officer | | | | | Date: | November 7, 2012May 10, 2013 | /s/ Brian C. Witherow | | | Brian C. Witherow | | | Executive Vice President and | | | Chief Financial Officer |
INDEX TO EXHIBITS | | | | Exhibit (4.1) | | Rights Agreement between Cedar Fair, L.P. and American Stock Transfer and Trust Co., LLC, dated April 5, 2010. Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on April 6, 2010.
| | | | Exhibit (4.2) | | Indenture, by and among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and The Bank of New York Mellon, as trustee, dated as of July 29, 2010 (including form of 9.125% Senior Notes due 2018). Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (4.3) | | Registration Rights Agreement, among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and J.P. Morgan Securities Inc., as representative of the initial purchasers named therein, dated July 29, 2010. Incorporated herein by reference to Exhibit 4.2 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (10.1) | | Cedar Fair, L.P. Amended and Restated Executive Severance Plan dated July 18, 2007. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-09444) filed on August 3, 2007. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) The Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) The Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notes |
s in thousands) | Interest Rate Swaps | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments | | Notional Amounts | | LIBOR Rate | Notional Amounts | | LIBOR Rate | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 2.40 | % | $ | 200,000 |
| | 2.27 | % | | 50,000 |
| | 2.54 | % | | 75,000 |
| | 2.43 | % | 75,000 |
| | 2.30 | % | | 30,000 |
| | 2.54 | % | | 50,000 |
| | 2.42 | % | 50,000 |
| | 2.29 | % | | 70,000 |
| | 2.54 | % | | 150,000 |
| | 2.55 | % | 150,000 |
| | 2.43 | % | | 50,000 |
| | 2.54 | % | | 50,000 |
| | 2.42 | % | 50,000 |
| | 2.29 | % | | | | | | 50,000 |
| | 2.55 | % | 50,000 |
| | 2.47 | % | | | | | | 25,000 |
| | 2.43 | % | 25,000 |
| | 2.30 | % | | | | | | 50,000 |
| | 2.54 | % | | | 30,000 |
| | 2.54 | % | | | 70,000 |
| | 2.54 | % | | | 50,000 |
| | 2.54 | % | | Total The following table presents our fixed-rate swaps, which matured in October 2011, and the cross-currency swap which matured in February 2012, along with their notional amounts and their fixed interest rates:
| | | | | | | | | | | | | | | ($'s in thousands) | Interest Rate Swaps | | Cross-currency Swaps | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | Implied Interest Rate | | $ | 200,000 |
| | 5.64 | % | | $ | 255,000 |
| | 7.31 | % | | 200,000 |
| | 5.64 | % | | 150 |
| | 9.50 | % | | 200,000 |
| | 5.64 | % | | | | | | 200,000 |
| | 5.57 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | Total $'s / Average Rate | $ | 1,000,000 |
| | 5.62 | % | | $ | 255,150 |
| | 7.31 | % | | | | | | | | |
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the three-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | Interest rate swaps | | $ | 438 |
| | $ | (17,085 | ) | | Interest Expense | | $ | (2,990 | ) | | $ | — |
| | Net effect of swaps | | $ | — |
| | $ | 15,396 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | Interest rate swaps | | $ | 2,266 |
| | $ | 120 |
| | Interest Expense | | $ | (2,797 | ) | | $ | (2,793 | ) | | Net effect of swaps | | $ | 435 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Three months ended | | Three months ended | | | | 9/30/12 | | 9/25/11 | Cross-currency swaps (1) | | Net effect of swaps | | $ | — |
| | $ | 13,622 |
| Foreign currency swaps | | Net effect of swaps | | — |
| | (13,210 | ) | | | | | $ | — |
| | $ | 412 |
| | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Three months ended | | Three months ended | | | | 3/31/13 | | 3/25/12 | Cross-currency swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (4,999 | ) | Foreign currency swaps | | Net effect of swaps | | — |
| | 6,278 |
| Interest rate swaps (2) | | Net effect of swaps | | (1,471 | ) | | — |
| | | | | $ | (1,471 | ) | | $ | 1,279 |
| | | | | | | |
| | (1) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
| | (2) | The May 2011 interest rate swaps were de-designated in March 2013. |
During the quarter ended September 30, 2012March 31, 2013, in addition to the $1.0 million loss recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.27.8 million of incomeexpense related to the write off of OCI balances on our May 2011 swaps and $0.4 million of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the quarter. The effect of this amortizationthese amounts resulted in a benefitcharge to earnings of $0.29.2 million recorded in “Net effect of swaps.”
For the three-month period ended SeptemberMarch 25, 20112012, in addition to the $15.81.3 million gain recognized in income on the ineffective portion of derivatives noted in the tabletables above, $11.20.5 million of expense representing the amortization of amounts in AOCI for the swaps and $0.60.2 million of foreign currency lossgain in the quarter related to the U.S. dollar denominated Canadian term loan were recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings of $4.0 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the nine-month periods ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Nine months ended | | Nine months ended | | | | Nine months ended | | Nine months ended | | | | Nine months ended | | Nine months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | Interest rate swaps | | $ | (2,308 | ) | | $ | (36,788 | ) | | Interest Expense | | $ | (9,004 | ) | | $ | — |
| | Net effect of swaps | | $ | — |
| | $ | 43,190 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Nine months ended | | Nine months ended | | | | 9/30/12 | | 9/25/11 | Interest rate swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (3,342 | ) | Cross-currency swaps (2) | | Net effect of swaps | | (4,999 | ) | | 15,582 |
| Foreign currency swaps | | Net effect of swaps | | 6,278 |
| | (17,516 | ) | | | | | $ | 1,279 |
| | $ | (5,276 | ) | | | | | | | |
| | (1) | The September 2010 swaps became ineffective and were de-designated in February 2011. |
| | (2) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
For the nine-month period ended September 30, 2012, in addition to the $1.3 million of net gain recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.2 million of expense representing the regular amortization of amounts in AOCI for the swaps and $0.2 million of foreign currency gain in the period related to the U.S. dollar denominated Canadian term loan were recorded in the condensed consolidated statements of operations for the period. The net effect of these amounts resulted in a benefit to earnings for the period of $1.3 million recorded in “Net effect of swaps.”
For the nine-month period ended September 25, 2011, in addition to the $37.9 million gain recognized in income on the ineffective portion of derivatives noted in the table above, $33.9 million of expense representing the amortization of amounts in AOCI for the swaps and $0.5 million of foreign currency loss in the period related to the U.S. dollar denominated Canadian term loan were recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings of $3.51.0 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the twelve-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | Interest rate swaps | | $ | (873 | ) | | $ | (26,329 | ) | | Interest Expense | | $ | (12,027 | ) | | $ | — |
| | Net effect of swaps | | $ | 4,797 |
| | $ | 54,613 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | Interest rate swaps | | $ | 2,286 |
| | $ | (36,088 | ) | | Interest Expense | | $ | (12,031 | ) | | $ | (5,816 | ) | | Net effect of swaps | | $ | 435 |
| | $ | 33,493 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Twelve months ended | | Twelve months ended | | | | 9/30/12 | | 9/25/11 | Interest rate swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (3,342 | ) | Cross-currency swaps (2) | | Net effect of swaps | | (4,483 | ) | | 10,016 |
| Foreign currency swaps | | Net effect of swaps | | 10,129 |
| | (17,516 | ) | | | | | $ | 5,646 |
| | $ | (10,842 | ) | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Twelve months ended | | Twelve months ended | | | | 3/31/13 | | 3/25/12 | Cross-currency swaps (1) | | Net effect of swaps | | — |
| | 12,911 |
| Foreign currency swaps | | Net effect of swaps | | — |
| | (7,387 | ) | Interest rate swaps (2) | | Net effect of swaps | | $ | (1,471 | ) | | $ | — |
| | | | | $ | (1,471 | ) | | $ | 5,524 |
| | | | | | | |
| | (1) | The September 2010 swaps became ineffective and were de-designated in February 2011. |
| | (2) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
| | (2) | The May 2011 interest rate swaps were de-designated in March 2013. |
In addition to the $10.41.0 million of gainloss recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.17.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $192 thousand of income representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended March 31, 2013 in the condensed consolidated statements of operations. The net effect of these amounts resulted in expense for the trailing twelve month period of $8.7 million recorded in “Net effect of swaps.”
For the twelve month period ending March 25, 2012, in addition to the $39.0 million of gain recognized in income on the ineffective portion of derivatives noted in the tables above, $22.7 million of expense representing the amortization of amounts in AOCI for the swaps and a $0.40.3 million foreign currency gainloss in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended September 30,March 25, 2012 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings for the trailing twelve month period of $10.9 million recorded in “Net effect of swaps.” For the twelve month period ending September 25, 2011, in addition to the $43.8 million of gain recognized in income on the ineffective portion of derivatives noted in the table above, $45.5 million of expense representing the amortization of amounts in AOCI for the swaps and a $0.1 million foreign currency loss in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended September 25, 2011 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a charge to earnings for the trailing twelve month period of $1.816.0 million recorded in “Net effect of swaps.”
The amounts reclassified from AOCI into income for the periods noted above are in large partprimarily the result of the Partnership’s initial three-year requirement to swap at least 75% of its aggregate term debt to fixed rates under the terms of the Amended 2010 Credit Agreement. (7) Fair Value Measurements: The FASB Accounting Standards Codification (ASC) relating to fair value measurements emphasizes that fair value is a market-based measurement that should be determined based on assumptions (inputs) that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable, and valuation techniques used to measure fair value should maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Accordingly, the FASB’s ASC establishes a hierarchal disclosure framework that ranks the quality and reliability of information used to determine fair values. The hierarchy is associated with the level of pricing observability utilized in measuring fair value and defines three levels of inputs to the fair value measurement process—quoted prices are the most reliable valuation inputs, whereas model values that include inputs based on unobservable data are the least reliable. Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety. The three broad levels of inputs defined by the fair value hierarchy are as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The table below presents the balances of assets and liabilities measured at fair value as of September 30, 2012March 31, 2013, December 31, 2011,2012, and SeptemberMarch 25, 20112012 on a recurring basis: | | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | September 30, 2012 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| Net derivative liability | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| | | | | | | | | | December 31, 2011 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,400 | ) | | $ | — |
| | $ | (32,400 | ) | | $ | — |
| Cross-currency swap agreements (2) | | (37,617 | ) | | — |
| | (37,617 | ) | | — |
| Foreign currency swap agreements (2) | | (13,155 | ) | | — |
| | (13,155 | ) | | — |
| Net derivative liability | | $ | (83,172 | ) | | $ | — |
| | $ | (83,172 | ) | | $ | — |
| | | | | | | | | | September 25, 2011 | | | | | | | | | Interest rate swap agreements (1) | | $ | (33,835 | ) | | $ | — |
| | $ | (33,835 | ) | | $ | — |
| Interest rate swap agreements (2) | | (4,797 | ) | | — |
| | (4,797 | ) | | — |
| Cross-currency swap agreements (2) | | (37,723 | ) | | — |
| | (37,723 | ) | | — |
| Foreign currency swap agreements (2) | | (16,846 | ) | | — |
| | (16,846 | ) | | — |
| Net derivative liability | | $ | (93,201 | ) | | $ | — |
| | $ | (93,201 | ) | | $ | — |
|
| | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | March 31, 2013 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (23,388 | ) | | $ | — |
| | $ | (23,388 | ) | | $ | — |
| Interest rate swap agreements (2) | | (7,643 | ) | | — |
| | (7,643 | ) | | — |
| Net derivative liability | | $ | (31,031 | ) | | $ | — |
| | $ | (31,031 | ) | | $ | — |
| | | | | | | | | | December 31, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | March 25, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,280 | ) | | $ | — |
| | $ | (32,280 | ) | | $ | — |
| Net derivative liability | | $ | (32,280 | ) | | $ | — |
| | $ | (32,280 | ) | | $ | — |
|
| | (1) | IncludedDesignated as cash flow hedges and are included in “Derivative Liability” on the Unaudited Condensed Consolidated Balance Sheet |
| | (2) | IncludedNot designated as cash flow hedges and are included in "Current derivative liability""Derivative Liability" on the Unaudited Condensed Consolidated Balance Sheet |
Fair values of the interest rate cross-currency and foreign currency swap agreements are determined using significant inputs, including the LIBOR and foreign currency forward curves, that are considered Level 2 observable market inputs. In addition, the Partnership considered the effect of its credit and non-performance risk on the fair values provided, and recognized an adjustment decreasing the net derivative liability by approximately $1.10.9 million as of September 30, 2012March 31, 2013. There were no assets measured at fair value on a non-recurring basis at September 30, 2012March 31, 2013, December 31, 2011, or SeptemberMarch 25, 20112012, except for as described below. At the end of the third quarter in 2012, the Partnership concluded based on operating results, as well as updated forecasts, and changes in market conditions, that a review of the carrying value of long-lived assets at Wildwater Kingdom was warranted. After performing its review, the Partnership determined that a portion of the park's fixed assets were impaired. Based on Level 3 unobservable valuation assumptions and other market inputs, the assets were marked to a fair value of $19.8 million, resulting in an impairment charge of $25.0 million during the quarter. In 2010, the Partnership concluded based on operating results, as well as updated forecasts, that a review of the carrying value of long-lived assets at California's Great America was warranted. After performing its review, the Partnership determined that a portion of the park's fixed assets, the majority of which were originally recorded with the PPI acquisition, were impaired. As a result, it recognized $62.0 million of fixed-asset impairment during the fourth quarter of 2010.
After completing its 2010 annual review of indefinite-lived intangibles for impairment, the Partnership concluded that a portion of trade-names originally recorded with the PPI acquisition were impaired. As a result, the Partnership recognized approximately $0.9 million of trade-name impairment during the fourth quarter of 2010. A relief-from-royalty model is used to determine whether the fair value of trade-names exceeds their carrying amount. The fair value of the trade-names is determined as the present value of fees avoided by owning the respective trade-name.
The fair value of term debt at September 30, 2012March 31, 2013 was approximately $1,125.7637.1 million based on borrowing rates currently available to the Partnership on long-term debt with similar terms and average maturities. The fair value of the Partnership's notes at September 30, 2012March 31, 2013 was approximately $352.6950.1 million based on borrowing rates availablepublic trading levels as of that date to the Partnership on notes with similar terms and maturities.date. The fair value of the term debt was based on Level 2 inputs and the notes were based on Level 21 inputs.
(8) Earnings per Unit: Net income (loss) per limited partner unit is calculated based on the following unit amounts: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,611 |
| | 55,346 |
| | 55,473 |
| | 55,345 |
| | 55,440 |
| | 55,342 |
| Effect of dilutive units: | | | | | | | | | | | | | Unit options and restricted unit awards | | 45 |
| | — |
| | 42 |
| | — |
| | 31 |
| | — |
| Phantom units | | 336 |
| | 482 |
| | 333 |
| | 502 |
| | 416 |
| | 544 |
| Diluted weighted average units outstanding | | 55,992 |
| | 55,828 |
| | 55,848 |
| | 55,847 |
| | 55,887 |
| | 55,886 |
| Net income (loss) per unit - basic | | $ | 2.53 |
| | $ | 2.75 |
| | $ | 2.01 |
| | $ | 1.29 |
| | $ | 2.00 |
| | $ | 0.15 |
| Net income (loss) per unit - diluted | | $ | 2.51 |
| | $ | 2.73 |
| | $ | 2.00 |
| | $ | 1.28 |
| | $ | 1.98 |
| | $ | 0.15 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Three months ended | | Twelve months ended | | | 3/31/2013 | | 3/25/2012 | | 3/31/2013 | | 3/25/2012 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,854 |
| | 55,378 |
| | 55,694 |
| | 55,353 |
| Effect of dilutive units: | | | | | | | | | Unit options and restricted unit awards | | — |
| | — |
| | 63 |
| | 2 |
| Phantom units | | — |
| | — |
| | 299 |
| | 492 |
| Diluted weighted average units outstanding | | 55,854 |
| | 55,378 |
| | 56,056 |
| | 55,847 |
| Net income (loss) per unit - basic | | $ | (1.95 | ) | | $ | (1.18 | ) | | $ | 1.04 |
| | $ | 1.53 |
| Net income (loss) per unit - diluted | | $ | (1.95 | ) | | $ | (1.18 | ) | | $ | 1.04 |
| | $ | 1.52 |
| | | | | | | | | |
The effect of unit options on the three nine and twelve months ended September 30,March 31, 2013, had they not been out of the money or antidilutive, would have been zero and 16,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three and twelve months ended March 25, 2012, had they not been out of the money or antidilutive, would have been 66,0002,000, 34,000and 36,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three, nine and twelve months ended September 25, 2011, had they not been out of the money or antidilutive, would have been 57,000, 67,000 and 127,00047,000 units, respectively. (9) Income and Partnership Taxes: Under the applicable accounting rules, income taxes are recognized for the amount of taxes payable by the Partnership’s corporate subsidiaries for the current year and for the impact of deferred tax assets and liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. The income tax provision (benefit) for interim periods is determined by applying an estimated annual effective tax rate to the quarterly income (loss) of the Partnership’s corporate subsidiaries. For 2012, the estimated annual effective rate includes the effect of an anticipated adjustment to the valuation allowance that relates to foreign tax credit carry-forwards arising from the corporate subsidiaries. The amount of this adjustment has a disproportionate impact on the annual effective tax rate that results in a significant variation in the customary relationship between the provision for taxes and income before taxes in interim periods. In addition to income taxes on its corporate subsidiaries, the Partnership pays a publicly traded partnership tax (PTP tax) on partnership-level gross income (net revenues less cost of food, merchandise and games). As such, the Partnership’s total provision (benefit) for taxes includes amounts for both the PTP tax and for income taxes on its corporate subsidiaries. During the second quarterAs of 2012 the Partnership adjusted its deferred tax assets and liabilities to reflect the impact of changes to the enacted statutory tax rates in Canada and recorded a corresponding $1.8 million income tax provision. During the first quarter of 20122013 the Partnership accruedhas recorded $1.01.1 million forof unrecognized tax benefits including interest and/or penalties related to state and local tax filing positions. The Partnership recognizes interest and/or penalties related to unrecognized tax benefits in the income tax provision. The Partnership does not anticipate that the balance of the unrecognized tax benefit will change significantly over the next 12 months.
(10) Contingencies:
The Partnership is a party to a number of lawsuits arising in the normal course of business. In the opinion of management, none of these matters is expected to have a material effect in the aggregate on the Partnership's financial statements.
(11) Immaterial Restatement:
We have made two separate corrections relating to our use of the composite depreciation method.
The Partnership usesfirst correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the 3 and 12 month periods ended March 25, 2012, related to a misapplication of the composite depreciation method for the group of assets acquired as a whole in 1983, as well as for groups of assets in each subsequent business acquisition.method. Upon the normal retirement of an asset within a composite group, the Partnership'sour practice generally hashad been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of the Partnership'sour financial statements for the three months ended July 1,in 2012, management determined that this methodology was not appropriate. As a result, the Partnershipwe revised the useful lives of itsour composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation). Management evaluated
The second correction, which impacts the amountBalance Sheet at March 25, 2012 and naturethe Statement of these adjustmentsOperations and concludedOther Comprehensive Income for the 12 month period ended March 25, 2012, reflects a subsequent determination that they werea disposition from our composite group of assets was considered to be unusual. In certain situations under the composite method, disposals are considered unusual and, accordingly, losses are not materialincluded in the composite depreciation pool but are rather charged immediately to eitherexpense. In 2013, the Partnership's prior annual or quarterly financial statements. Nonetheless,initial determination of whether a specific asset retired under the historical financial statement amounts includedcomposite method of depreciation in this filing have been corrected for this error. The Partnership expects to likewise correct previously presented2011 was normal was reviewed in connection with responding
historical financial statements to an open SEC comment letter. We ultimately concluded that such disposition was unusual and that a $8.8 millioncharge should be included in future filings, including the annual financial statements to be includedreflected in the Partnership's Annual Report on Form 10-K for the year ending December 31, 2012.2011 financial statements.
The tables below detailreflect the effectsimpact on the financial statements of such depreciation adjustments (including the related deferred income tax impact)corrections as described above. The "As originally filed" amounts represent amounts as filed in the Partnership's 1st quarter 2012 Form 10-Q . The "As restated" amounts in all columns represent amounts after restatement for the first correction which was disclosed in the Partnership's 2nd quarter Form 10-Q and the second correction which was disclosed in the Partnership's 2012 Annual Report on previously presented historical financial statement amounts:Form 10-K/A filed on May 10, 2013.
| | | | | | | | | Balance Sheets | | | | | 12/31/2011 | | 9/25/2011 | Accumulated depreciation | | | | As originally filed | $ | (1,044,589 | ) | | $ | (1,044,353 | ) | Correction | (18,599 | ) | | (18,252 | ) | As restated | $ | (1,063,188 | ) | | $ | (1,062,605 | ) | Total assets | | | | As originally filed | $ | 2,074,557 |
| | $ | 2,159,339 |
| Correction | (18,599 | ) | | (18,252 | ) | As restated | $ | 2,055,958 |
| | $ | 2,141,087 |
| Deferred Tax Liability | | | | As originally filed | $ | 135,446 |
| | $ | 125,588 |
| Correction | (1,679 | ) | | (1,615 | ) | As restated | $ | 133,767 |
| | $ | 123,973 |
| Limited Partners' Equity | | | | As originally filed | $ | 182,438 |
| | $ | 221,611 |
| Correction | (16,920 | ) | | (16,637 | ) | As restated | $ | 165,518 |
| | $ | 204,974 |
|
| | | | | Balance Sheet | | (In thousands) | 3/25/2012 | Accumulated depreciation | | As originally filed | $ | (1,046,162 | ) | Corrections | (27,622 | ) | As restated | $ | (1,073,784 | ) | Total assets | | As originally filed | $ | 2,113,126 |
| Corrections | (27,622 | ) | As restated | $ | 2,085,504 |
| Deferred Tax Liability | | As originally filed | $ | 135,746 |
| Corrections | (5,019 | ) | As restated | $ | 130,727 |
| Limited Partners' Equity | | As originally filed | $ | 96,417 |
| Corrections | (22,603 | ) | As restated | $ | 73,814 |
|
| | | | | | | | | | | | | | Statements of Operations and Other Comprehensive Income | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/25/2011 | | 9/25/2011 | | 9/25/2011 | Depreciation and amortization | | | | | | | As originally filed | | $ | 62,619 |
| | $ | 109,173 |
| | $ | 124,345 |
| Correction | | 829 |
| | 1,684 |
| | 2,037 |
| As restated | | $ | 63,448 |
| | $ | 110,857 |
| | $ | 126,382 |
| Income (loss) before tax | | | | | | | As originally filed | | $ | 190,891 |
| | $ | 95,031 |
| | $ | (2,271 | ) | Correction | | (829 | ) | | (1,684 | ) | | (2,037 | ) | As restated | | $ | 190,062 |
| | $ | 93,347 |
| | $ | (4,308 | ) | Provision (benefit) for taxes | | | | | As originally filed | | $ | 38,161 |
| | $ | 22,327 |
| | $ | (11,808 | ) | Correction | | (317 | ) | | (554 | ) | | (616 | ) | As restated | | $ | 37,844 |
| | $ | 21,773 |
| | $ | (12,424 | ) | Net income (loss) | | | | | As originally filed | | $ | 152,730 |
| | $ | 72,704 |
| | $ | 9,537 |
| Correction | | (512 | ) | | (1,130 | ) | | (1,421 | ) | As restated | | $ | 152,218 |
| | $ | 71,574 |
| | $ | 8,116 |
| | | | | | | | Basic earnings per limited partner unit: | | | | | As originally filed | | $ | 2.76 |
| | $ | 1.31 |
| | $ | 0.17 |
| Correction | | (0.01 | ) | | (0.02 | ) | | (0.02 | ) | As restated | | $ | 2.75 |
| | $ | 1.29 |
| | $ | 0.15 |
| | | | | | | | Diluted earnings per limited partner unit: | | | | | As originally filed | | $ | 2.74 |
| | $ | 1.30 |
| | $ | 0.17 |
| Correction | | (0.01 | ) | | (0.02 | ) | | (0.02 | ) | As restated | | $ | 2.73 |
| | $ | 1.28 |
| | $ | 0.15 |
|
| | | | | | | | | | Statements of Operations and Other Comprehensive Income | (In thousands except per unit amounts) | | Three months ended | | Twelve months ended | | | 3/25/2012 | | 3/25/2012 | Depreciation and amortization | | | | | As originally filed | | $ | 3,846 |
| | $ | 123,861 |
| Corrections | | 233 |
| | 2,031 |
| As restated | | $ | 4,079 |
| | $ | 125,892 |
| Loss on impairment / retirement of fixed assets, net | | | | | As originally filed | | $ | 92 |
| | $ | 2,461 |
| Corrections | | — |
| | 8,790 |
| As restated | | $ | 92 |
| | $ | 11,251 |
| Income (loss) before tax | | | | | As originally filed | | $ | (86,721 | ) | | $ | 101,565 |
| Corrections | | (233 | ) | | (10,821 | ) | As restated | | $ | (86,954 | ) | | $ | 90,744 |
| Provision (benefit) for taxes | | | As originally filed | | $ | (21,539 | ) | | $ | 9,897 |
| Corrections | | — |
| | (3,960 | ) | As restated | | $ | (21,539 | ) | | $ | 5,937 |
| Net income (loss) | | | As originally filed | | $ | (65,182 | ) | | $ | 91,668 |
| Corrections | | (233 | ) | | (6,861 | ) | As restated | | $ | (65,415 | ) | | $ | 84,807 |
| | | | | | Basic earnings per limited partner unit: | | | As originally filed | | $ | (1.18 | ) | | $ | 1.66 |
| Corrections | | — |
| | (0.13 | ) | As restated | | $ | (1.18 | ) | | $ | 1.53 |
| | | | | | Diluted earnings per limited partner unit: | | | As originally filed | | $ | (1.18 | ) | | $ | 1.64 |
| Corrections | | — |
| | (0.12 | ) | As restated | | $ | (1.18 | ) | | $ | 1.52 |
|
(12) Changes in Accumulated Other Comprehensive Income by Component:
(12)The following tables reflect the changes in Accumulated other comprehensive income (loss) related to limited partners' equity for the period ended March 31, 2013:
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | | Gains and | | | | | | | | Losses on | | Foreign | | | | | | Cash Flow | | Currency | | | | | | Hedges | | Items | | Total | Balance at December 31, 2012 | | $ | (25,749 | ) | | $ | (2,751 | ) | | $ | (28,500 | ) | | | | | | | | | | Other comprehensive | | | | | | | | income before | | | | | | | | reclassifications | | 1,940 |
| | 301 |
| | 301 |
| | | | | | | | | | Amounts reclassified | | | | | | | | from accumulated | | | | | | | | other comprehensive | | | | | | | | income (2) | | 6,945 |
| | — |
| | 8,885 |
| | | | | | | | | Net current-period other | | | | | | | comprehensive income | | 8,885 |
| | 301 |
| | 9,186 |
| | | | | | | | | March 31, 2013 | | $ | (16,864 | ) | | $ | (2,450 | ) | | $ | (19,314 | ) |
(1) All amounts are net of tax. Amounts in parentheses indicate debits. (2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.
| | | | | | | | | | | Reclassifications Out of Accumulated Other Comprehensive Income (1) | (In thousands) | | | | | | | | Details about Accumulated Other Comprehensive Income Components | | Amount Reclassified from Accumulated Other Comprehensive Income | | Affected Line Item in the Statement Where Net Income is Presented | Gains and losses on cash flow hedges | | | | | | | Interest rate contracts | | $ | 8,174 |
| | | Net effect of swaps | | | | $ | 8,174 |
| | | Total before tax | | | | (1,229 | ) | | | Provision (benefit) for taxes | | | | $ | 6,945 |
| | | Net of tax |
(1) Amounts in parentheses indicate debits.
(13) Consolidating Financial Information of Guarantors and Issuers:
Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), and Magnum Management Corporation ("Magnum") are the co-issuers of the Partnership's 9.125% notes and the 5.25% notes (see Note 5). The notes have been fully and unconditionally guaranteed, on a joint and several basis, by each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum) that guarantees the Partnership's senior secured credit facilities. There are no non-guarantor subsidiaries.
The following consolidating schedules present condensed financial information for Cedar Fair, L.P., Cedar Canada, and Magnum, the co-issuers, and each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum), the guarantors (on a combined basis), as of September 30, 2012March 31, 2013, December 31, 2011,2012, and SeptemberMarch 25, 20112012 and for the three nine and twelve month periods ended
September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, we have included the accompanying condensed consolidating financial statements.
Since Cedar Fair, L.P., Cedar Canada and Magnum are co-issuers of the notes and co-borrowers under the Amended 20102013 Credit Agreement, all outstanding debt has been equally reflected within each co-issuer's September 30, 2012March 31, 2013, December 31, 20112012 and SeptemberMarch 25, 20112012 balance sheets in the accompanying condensed consolidating financial statements.
The consolidating financial information has been corrected for the information described in Note 11.12.
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
September 30, 2012
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| Receivables | | 3 |
| | 108,211 |
| | 64,153 |
| | 478,372 |
| | (621,382 | ) | | 29,357 |
| Inventories | | — |
| | 1,584 |
| | 2,742 |
| | 29,267 |
| | — |
| | 33,593 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Income tax refundable | | — |
| | — |
| | 10,454 |
| | — |
| | — |
| | 10,454 |
| Other current assets | | 929 |
| | 2,065 |
| | 674 |
| | 3,775 |
| | — |
| | 7,443 |
| | | 43,932 |
| | 120,362 |
| | 119,073 |
| | 525,309 |
| | (621,382 | ) | | 187,294 |
| Property and Equipment (net) | | 425,747 |
| | 1,025 |
| | 272,951 |
| | 864,121 |
| | — |
| | 1,563,844 |
| Investment in Park | | 577,612 |
| | 791,617 |
| | 118,514 |
| | 63,384 |
| | (1,551,127 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 127,384 |
| | 111,218 |
| | — |
| | 247,663 |
| Other Intangibles, net | | — |
| | — |
| | 18,039 |
| | 22,826 |
| | — |
| | 40,865 |
| Deferred Tax Asset | | — |
| | 39,320 |
| | — |
| | — |
| | (39,320 | ) | | — |
| Intercompany Receivable | | 877,208 |
| | 1,069,721 |
| | 1,116,623 |
| | — |
| | (3,063,552 | ) | | — |
| Other Assets | | 23,361 |
| | 15,580 |
| | 8,925 |
| | 2,305 |
| | — |
| | 50,171 |
| | | $ | 1,956,921 |
| | $ | 2,037,625 |
| | $ | 1,781,509 |
| | $ | 1,589,163 |
| | $ | (5,275,381 | ) | | $ | 2,089,837 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 210,936 |
| | $ | 116,160 |
| | $ | 29,248 |
| | $ | 287,634 |
| | $ | (621,382 | ) | | $ | 22,596 |
| Deferred revenue | | — |
| | — |
| | 4,544 |
| | 30,138 |
| | — |
| | 34,682 |
| Accrued interest | | 735 |
| | 195 |
| | 6,082 |
| | — |
| | — |
| | 7,012 |
| Accrued taxes | | 5,818 |
| | 42,090 |
| | — |
| | 4,496 |
| | — |
| | 52,404 |
| Accrued salaries, wages and benefits | | — |
| | 24,864 |
| | 2,365 |
| | 8,990 |
| | — |
| | 36,219 |
| Self-insurance reserves | | — |
| | 4,751 |
| | 1,698 |
| | 16,643 |
| | — |
| | 23,092 |
| Other accrued liabilities | | 824 |
| | 4,097 |
| | 2,417 |
| | 3,505 |
| | — |
| | 10,843 |
| | | 218,313 |
| | 192,157 |
| | 46,354 |
| | 351,406 |
| | (621,382 | ) | | 186,848 |
| Deferred Tax Liability | | — |
| | — |
| | 59,462 |
| | 122,952 |
| | (39,320 | ) | | 143,094 |
| Derivative Liability | | 20,801 |
| | 13,907 |
| | — |
| | — |
| | — |
| | 34,708 |
| Other Liabilities | | — |
| | 3,880 |
| | — |
| | 3,500 |
| | — |
| | 7,380 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,131,100 |
| | 1,131,100 |
| | 1,131,100 |
| | — |
| | (2,262,200 | ) | | 1,131,100 |
| Notes | | 400,676 |
| | 400,676 |
| | 400,676 |
| | — |
| | (801,352 | ) | | 400,676 |
| | | 1,531,776 |
| | 1,531,776 |
| | 1,531,776 |
| | — |
| | (3,063,552 | ) | | 1,531,776 |
| | | | | | | | | | | | | | Equity | | 186,031 |
| | 295,905 |
| | 143,917 |
| | 1,111,305 |
| | (1,551,127 | ) | | 186,031 |
| | | $ | 1,956,921 |
| | $ | 2,037,625 |
| | $ | 1,781,509 |
| | $ | 1,589,163 |
| | $ | (5,275,381 | ) | | $ | 2,089,837 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2011
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 512 |
| | $ | 31,540 |
| | $ | 3,472 |
| | $ | — |
| | $ | 35,524 |
| Receivables | | — |
| | 62,408 |
| | 69,285 |
| | 412,095 |
| | (536,177 | ) | | 7,611 |
| Inventories | | — |
| | 1,547 |
| | 2,703 |
| | 28,819 |
| | — |
| | 33,069 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Other current assets | | 508 |
| | 13,461 |
| | 1,027 |
| | 7,822 |
| | (10,852 | ) | | 11,966 |
| | | 508 |
| | 84,167 |
| | 105,327 |
| | 455,542 |
| | (547,029 | ) | | 98,515 |
| Property and Equipment (net) | | 455,579 |
| | 1,044 |
| | 266,111 |
| | 896,758 |
| | — |
| | 1,619,492 |
| Investment in Park | | 518,819 |
| | 661,251 |
| | 118,385 |
| | 40,481 |
| | (1,338,936 | ) | | — |
| Intercompany Note Receivable | | — |
| | 93,845 |
| | — |
| | — |
| | (93,845 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 123,210 |
| | 111,219 |
| | — |
| | 243,490 |
| Other Intangibles, net | | — |
| | — |
| | 17,448 |
| | 22,825 |
| | — |
| | 40,273 |
| Deferred Tax Asset | | — |
| | 47,646 |
| | — |
| | — |
| | (47,646 | ) | | — |
| Intercompany Receivable | | 887,344 |
| | 1,084,112 |
| | 1,141,302 |
| | — |
| | (3,112,758 | ) | | — |
| Other Assets | | 27,641 |
| | 16,158 |
| | 9,353 |
| | 1,036 |
| | — |
| | 54,188 |
| | | $ | 1,898,952 |
| | $ | 1,988,223 |
| | $ | 1,781,136 |
| | $ | 1,527,861 |
| | $ | (5,140,214 | ) | | $ | 2,055,958 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 15,921 |
| | $ | 15,921 |
| | $ | 15,921 |
| | $ | — |
| | $ | (31,842 | ) | | $ | 15,921 |
| Accounts payable | | 175,968 |
| | 144,868 |
| | 25,631 |
| | 202,566 |
| | (536,177 | ) | | 12,856 |
| Deferred revenue | | — |
| | — |
| | 2,891 |
| | 26,703 |
| | — |
| | 29,594 |
| Accrued interest | | 198 |
| | 131 |
| | 15,433 |
| | — |
| | — |
| | 15,762 |
| Accrued taxes | | 3,909 |
| | — |
| | 7,374 |
| | 15,577 |
| | (10,852 | ) | | 16,008 |
| Accrued salaries, wages and benefits | | — |
| | 26,916 |
| | 1,076 |
| | 5,396 |
| | — |
| | 33,388 |
| Self-insurance reserves | | — |
| | 3,977 |
| | 1,711 |
| | 15,555 |
| | — |
| | 21,243 |
| Current derivative liability | | — |
| | — |
| | 50,772 |
| | — |
| | — |
| | 50,772 |
| Other accrued liabilities | | 1,247 |
| | 5,568 |
| | 252 |
| | 832 |
| | — |
| | 7,899 |
| | | 197,243 |
| | 197,381 |
| | 121,061 |
| | 266,629 |
| | (578,871 | ) | | 203,443 |
| Deferred Tax Liability | | — |
| | — |
| | 58,463 |
| | 122,950 |
| | (47,646 | ) | | 133,767 |
| Derivative Liability | | 19,451 |
| | 12,949 |
| | — |
| | — |
| | — |
| | 32,400 |
| Other Liabilities | | — |
| | 4,090 |
| | — |
| | — |
| | — |
| | 4,090 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 93,845 |
| | (93,845 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,140,179 |
| | 1,140,179 |
| | 1,140,179 |
| | — |
| | (2,280,358 | ) | | 1,140,179 |
| Notes | | 400,279 |
| | 400,279 |
| | 400,279 |
| | — |
| | (800,558 | ) | | 400,279 |
| | | 1,540,458 |
| | 1,540,458 |
| | 1,540,458 |
| | — |
| | (3,080,916 | ) | | 1,540,458 |
| | | | | | | | | | | | | | Equity | | 141,800 |
| | 233,345 |
| | 61,154 |
| | 1,044,437 |
| | (1,338,936 | ) | | 141,800 |
| | | $ | 1,898,952 |
| | $ | 1,988,223 |
| | $ | 1,781,136 |
| | $ | 1,527,861 |
| | $ | (5,140,214 | ) | | $ | 2,055,958 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING BALANCE SHEET September 25, 2011March 31, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| Receivables | | 3 |
| | 45,663 |
| | 81,773 |
| | 587,910 |
| | (676,810 | ) | | 38,539 |
| Inventories | | — |
| | 1,684 |
| | 2,951 |
| | 32,311 |
| | — |
| | 36,946 |
| Current deferred tax asset | | — |
| | 1,686 |
| | 779 |
| | 3,409 |
| | — |
| | 5,874 |
| Other current assets | | 875 |
| | 2,091 |
| | 774 |
| | 5,559 |
| | — |
| | 9,299 |
| | | 49,878 |
| | 53,613 |
| | 122,750 |
| | 637,539 |
| | (676,810 | ) | | 186,970 |
| Property and Equipment (net) | | 455,663 |
| | 1,055 |
| | 257,802 |
| | 900,759 |
| | — |
| | 1,615,279 |
| Investment in Park | | 534,400 |
| | 681,893 |
| | 118,514 |
| | 53,988 |
| | (1,388,795 | ) | | — |
| Intercompany Note Receivable | | — |
| | 269,500 |
| | — |
| | — |
| | (269,500 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 121,869 |
| | 111,219 |
| | — |
| | 242,149 |
| Other Intangibles, net | | — |
| | — |
| | 17,258 |
| | 22,809 |
| | — |
| | 40,067 |
| Deferred Tax Asset | | — |
| | 49,845 |
| | — |
| | — |
| | (49,845 | ) | | — |
| Intercompany Receivable | | 887,219 |
| | 1,083,987 |
| | 1,141,302 |
| | — |
| | (3,112,508 | ) | | — |
| Other Assets | | 28,962 |
| | 16,884 |
| | 9,616 |
| | 1,160 |
| | — |
| | 56,622 |
| | | $ | 1,965,183 |
| | $ | 2,156,777 |
| | $ | 1,789,111 |
| | $ | 1,727,474 |
| | $ | (5,497,458 | ) | | $ | 2,141,087 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 189,887 |
| | $ | 281,605 |
| | $ | 27,488 |
| | $ | 206,288 |
| | $ | (676,810 | ) | | $ | 28,458 |
| Deferred revenue | | — |
| | — |
| | 3,701 |
| | 28,993 |
| | — |
| | 32,694 |
| Accrued interest | | 6,115 |
| | 1,364 |
| | 6,489 |
| | — |
| | — |
| | 13,968 |
| Accrued taxes | | 5,189 |
| | 23,550 |
| | — |
| | 4,354 |
| | — |
| | 33,093 |
| Accrued salaries, wages and benefits | | — |
| | 29,373 |
| | 2,341 |
| | 9,395 |
| | — |
| | 41,109 |
| Self-insurance reserves | | — |
| | 3,130 |
| | 1,658 |
| | 17,154 |
| | — |
| | 21,942 |
| Current derivative liability | | 4,797 |
| | — |
| | 54,569 |
| | — |
| | — |
| | 59,366 |
| Other accrued liabilities | | 1,206 |
| | 4,840 |
| | 1,277 |
| | 4,924 |
| | — |
| | 12,247 |
| | | 207,194 |
| | 343,862 |
| | 97,523 |
| | 271,108 |
| | (676,810 | ) | | 242,877 |
| Deferred Tax Liability | | — |
| | — |
| | 61,405 |
| | 112,413 |
| | (49,845 | ) | | 123,973 |
| Derivative Liability | | 20,459 |
| | 13,376 |
| | — |
| | — |
| | — |
| | 33,835 |
| Other Liabilities | | — |
| | 2,872 |
| | — |
| | — |
| | — |
| | 2,872 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 269,500 |
| | (269,500 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,156,100 |
| | 1,156,100 |
| | 1,156,100 |
| | — |
| | (2,312,200 | ) | | 1,156,100 |
| Notes | | 400,154 |
| | 400,154 |
| | 400,154 |
| | — |
| | (800,308 | ) | | 400,154 |
| | | 1,556,254 |
| | 1,556,254 |
| | 1,556,254 |
| | — |
| | (3,112,508 | ) | | 1,556,254 |
| | | | | | | | | | | | | | Equity | | 181,276 |
| | 240,413 |
| | 73,929 |
| | 1,074,453 |
| | (1,388,795 | ) | | 181,276 |
| | | $ | 1,965,183 |
| | $ | 2,156,777 |
| | $ | 1,789,111 |
| | $ | 1,727,474 |
| | $ | (5,497,458 | ) | | $ | 2,141,087 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| Receivables | | 682 |
| | 79,472 |
| | 67,302 |
| | 436,595 |
| | (570,709 | ) | | 13,342 |
| Inventories | | — |
| | 3,645 |
| | 3,032 |
| | 32,386 |
| | — |
| | 39,063 |
| Current deferred tax asset | | — |
| | 31,543 |
| | 816 |
| | 3,663 |
| | — |
| | 36,022 |
| Other current assets | | 207 |
| | 9,630 |
| | 1,618 |
| | 16,260 |
| | — |
| | 27,715 |
| | | 889 |
| | 125,022 |
| | 76,893 |
| | 494,085 |
| | (570,709 | ) | | 126,180 |
| Property and Equipment (net) | | 457,484 |
| | 1,003 |
| | 262,941 |
| | 849,424 |
| | — |
| | 1,570,852 |
| Investment in Park | | 419,501 |
| | 714,013 |
| | 115,401 |
| | 21,689 |
| | (1,270,604 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 123,374 |
| | 111,218 |
| | — |
| | 243,653 |
| Other Intangibles, net | | — |
| | — |
| | 17,470 |
| | 22,853 |
| | — |
| | 40,323 |
| Deferred Tax Asset | | — |
| | 34,890 |
| | — |
| | 90 |
| | (34,980 | ) | | — |
| Intercompany Receivable | | 877,336 |
| | 1,165,652 |
| | 1,211,522 |
| | — |
| | (3,254,510 | ) | | — |
| Other Assets | | 14,581 |
| | 10,291 |
| | 7,473 |
| | 2,303 |
| | — |
| | 34,648 |
| | | $ | 1,778,852 |
| | $ | 2,050,871 |
| | $ | 1,815,074 |
| | $ | 1,501,662 |
| | $ | (5,130,803 | ) | | $ | 2,015,656 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 103,654 |
| | 215,425 |
| | 3,891 |
| | 285,182 |
| | (570,709 | ) | | 37,443 |
| Deferred revenue | | — |
| | — |
| | 6,679 |
| | 59,505 |
| | — |
| | 66,184 |
| Accrued interest | | 1,444 |
| | 916 |
| | 5,979 |
| | — |
| | — |
| | 8,339 |
| Accrued taxes | | 4,790 |
| | 390 |
| | 331 |
| | 3,489 |
| | — |
| | 9,000 |
| Accrued salaries, wages and benefits | | — |
| | 13,483 |
| | 1,095 |
| | 5,604 |
| | — |
| | 20,182 |
| Self-insurance reserves | | — |
| | 5,324 |
| | 1,696 |
| | 16,537 |
| | — |
| | 23,557 |
| Other accrued liabilities | | 589 |
| | 5,161 |
| | 133 |
| | 1,984 |
| | — |
| | 7,867 |
| | | 116,777 |
| | 246,999 |
| | 26,104 |
| | 372,301 |
| | (583,309 | ) | | 178,872 |
| Deferred Tax Liability | | — |
| | — |
| | 62,700 |
| | 126,867 |
| | (34,980 | ) | | 154,587 |
| Derivative Liability | | 18,594 |
| | 12,437 |
| | — |
| | — |
| | — |
| | 31,031 |
| Other Liabilities | | — |
| | 4,185 |
| | — |
| | 3,500 |
| | — |
| | 7,685 |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 96,000 |
| | 96,000 |
| | 96,000 |
| | — |
| | (192,000 | ) | | 96,000 |
| Term debt | | 623,700 |
| | 623,700 |
| | 623,700 |
| | — |
| | (1,247,400 | ) | | 623,700 |
| Notes | | 901,255 |
| | 901,255 |
| | 901,255 |
| | — |
| | (1,802,510 | ) | | 901,255 |
| | | 1,620,955 |
| | 1,620,955 |
| | 1,620,955 |
| | — |
| | (3,241,910 | ) | | 1,620,955 |
| | | | | | | | | | | | | | Equity | | 22,526 |
| | 166,295 |
| | 105,315 |
| | 998,994 |
| | (1,270,604 | ) | | 22,526 |
| | | $ | 1,778,852 |
| | $ | 2,050,871 |
| | $ | 1,815,074 |
| | $ | 1,501,662 |
| | $ | (5,130,803 | ) | | $ | 2,015,656 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOMEBALANCE SHEET For the Three Months Ended September 30,December 31, 2012 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 79,663 |
| | $ | 141,134 |
| | $ | 88,334 |
| | $ | 464,902 |
| | $ | (220,588 | ) | | $ | 553,445 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,447 |
| | 40,906 |
| | — |
| | 47,353 |
| Operating expenses | | 1,368 |
| | 74,191 |
| | 18,736 |
| | 289,604 |
| | (220,588 | ) | | 163,311 |
| Selling, general and administrative | | 1,853 |
| | 32,627 |
| | 4,822 |
| | 13,691 |
| | — |
| | 52,993 |
| Depreciation and amortization | | 19,209 |
| | 10 |
| | 9,430 |
| | 32,098 |
| | — |
| | 60,747 |
| Loss on impairment / retirement of fixed assets, net | | 25,000 |
| | — |
| | — |
| | — |
| | — |
| | 25,000 |
| | | 47,430 |
| | 106,828 |
| | 39,435 |
| | 376,299 |
| | (220,588 | ) | | 349,404 |
| Operating income | | 32,233 |
| | 34,306 |
| | 48,899 |
| | 88,603 |
| | — |
| | 204,041 |
| Interest expense (income), net | | 12,213 |
| | 7,258 |
| | 9,897 |
| | (2,518 | ) | | — |
| | 26,850 |
| Net effect of swaps | | (104 | ) | | (71 | ) | | — |
| | — |
| | — |
| | (175 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (15,035 | ) | | — |
| | — |
| | (15,035 | ) | Other (income) expense | | 186 |
| | (2,043 | ) | | 512 |
| | 1,345 |
| | — |
| | — |
| Income from investment in affiliates | | (125,311 | ) | | (79,600 | ) | | (11,138 | ) | | (45,137 | ) | | 261,186 |
| | — |
| Income before taxes | | 145,249 |
| | 108,762 |
| | 64,663 |
| | 134,913 |
| | (261,186 | ) | | 192,401 |
| Provision for taxes | | 4,561 |
| | 9,777 |
| | 17,181 |
| | 20,194 |
| | — |
| | 51,713 |
| Net income | | $ | 140,688 |
| | $ | 98,985 |
| | $ | 47,482 |
| | $ | 114,719 |
| | $ | (261,186 | ) | | $ | 140,688 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (563 | ) | | — |
| | (563 | ) | | — |
| | 563 |
| | (563 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (234 | ) | | 48 |
| | — |
| | — |
| | (48 | ) | | (234 | ) | Other comprehensive income (loss), (net of tax) | | (797 | ) | | 48 |
| | (563 | ) | | — |
| | 515 |
| | (797 | ) | Total Comprehensive Income | | $ | 139,891 |
| | $ | 99,033 |
| | $ | 46,919 |
| | $ | 114,719 |
| | $ | (260,671 | ) | | $ | 139,891 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 25,000 |
| | $ | 444 |
| | $ | 50,173 |
| | $ | 3,213 |
| | $ | — |
| | $ | 78,830 |
| Receivables | | 4 |
| | 101,093 |
| | 71,099 |
| | 498,555 |
| | (652,559 | ) | | 18,192 |
| Inventories | | — |
| | 1,724 |
| | 2,352 |
| | 23,764 |
| | — |
| | 27,840 |
| Current deferred tax asset | | — |
| | 3,705 |
| | 816 |
| | 3,663 |
| | — |
| | 8,184 |
| Other current assets | | 563 |
| | 17,858 |
| | 530 |
| | 5,490 |
| | (16,381 | ) | | 8,060 |
| | | 25,567 |
| | 124,824 |
| | 124,970 |
| | 534,685 |
| | (668,940 | ) | | 141,106 |
| Property and Equipment (net) | | 439,506 |
| | 1,013 |
| | 268,157 |
| | 835,596 |
| | — |
| | 1,544,272 |
| Investment in Park | | 485,136 |
| | 772,183 |
| | 115,401 |
| | 53,790 |
| | (1,426,510 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 125,942 |
| | 111,218 |
| | — |
| | 246,221 |
| Other Intangibles, net | | — |
| | — |
| | 17,835 |
| | 22,817 |
| | — |
| | 40,652 |
| Deferred Tax Asset | | — |
| | 36,443 |
| | — |
| | 90 |
| | (36,533 | ) | | — |
| Intercompany Receivable | | 877,612 |
| | 1,070,125 |
| | 1,116,623 |
| | — |
| | (3,064,360 | ) | | — |
| Other Assets | | 22,048 |
| | 14,832 |
| | 8,419 |
| | 2,315 |
| | — |
| | 47,614 |
| | | $ | 1,858,930 |
| | $ | 2,019,420 |
| | $ | 1,777,347 |
| | $ | 1,560,511 |
| | $ | (5,196,343 | ) | | $ | 2,019,865 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 147,264 |
| | $ | 213,279 |
| | $ | 16,101 |
| | $ | 286,649 |
| | $ | (652,559 | ) | | $ | 10,734 |
| Deferred revenue | | — |
| | — |
| | 4,996 |
| | 34,489 |
| | — |
| | 39,485 |
| Accrued interest | | 98 |
| | 64 |
| | 15,350 |
| | — |
| | — |
| | 15,512 |
| Accrued taxes | | 4,518 |
| | — |
| | 6,239 |
| | 23,437 |
| | (16,381 | ) | | 17,813 |
| Accrued salaries, wages and benefits | | — |
| | 17,932 |
| | 1,214 |
| | 5,690 |
| | — |
| | 24,836 |
| Self-insurance reserves | | — |
| | 5,528 |
| | 1,754 |
| | 16,624 |
| | — |
| | 23,906 |
| Other accrued liabilities | | 1,110 |
| | 2,502 |
| | 140 |
| | 2,164 |
| | — |
| | 5,916 |
| | | 152,990 |
| | 239,305 |
| | 45,794 |
| | 369,053 |
| | (668,940 | ) | | 138,202 |
| Deferred Tax Liability | | — |
| | — |
| | 63,460 |
| | 126,865 |
| | (36,533 | ) | | 153,792 |
| Derivative Liability | | 19,309 |
| | 12,951 |
| | — |
| | — |
| | — |
| | 32,260 |
| Other Liabilities | | — |
| | 5,480 |
| | — |
| | 3,500 |
| | — |
| | 8,980 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,131,100 |
| | 1,131,100 |
| | 1,131,100 |
| | — |
| | (2,262,200 | ) | | 1,131,100 |
| Notes | | 401,080 |
| | 401,080 |
| | 401,080 |
| | — |
| | (802,160 | ) | | 401,080 |
| | | 1,532,180 |
| | 1,532,180 |
| | 1,532,180 |
| | — |
| | (3,064,360 | ) | | 1,532,180 |
| | | | | | | | | | | | | | Equity | | 154,451 |
| | 229,504 |
| | 135,913 |
| | 1,061,093 |
| | (1,426,510 | ) | | 154,451 |
| | | $ | 1,858,930 |
| | $ | 2,019,420 |
| | $ | 1,777,347 |
| | $ | 1,560,511 |
| | $ | (5,196,343 | ) | | $ | 2,019,865 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOMEBALANCE SHEET For the Three Months Ended March 25, 2012September 25, 2011 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 82,713 |
| | $ | 147,138 |
| | $ | 84,679 |
| | $ | 487,352 |
| | $ | (229,614 | ) | | $ | 572,268 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,659 |
| | 42,099 |
| | — |
| | 48,758 |
| Operating expenses | | 1,257 |
| | 69,119 |
| | 19,397 |
| | 301,293 |
| | (229,614 | ) | | 161,452 |
| Selling, general and administrative | | 1,297 |
| | 30,460 |
| | 5,064 |
| | 15,157 |
| | — |
| | 51,978 |
| Depreciation and amortization | | 20,354 |
| | 11 |
| | 9,564 |
| | 33,519 |
| | — |
| | 63,448 |
| Loss on impairment / retirement of fixed assets, net | | 827 |
| | — |
| | 10 |
| | 43 |
| | — |
| | 880 |
| | | 23,735 |
| | 99,590 |
| | 40,694 |
| | 392,111 |
| | (229,614 | ) | | 326,516 |
| Operating income | | 58,978 |
| | 47,548 |
| | 43,985 |
| | 95,241 |
| | — |
| | 245,752 |
| Interest expense, net | | 23,948 |
| | 3,085 |
| | 13,433 |
| | 855 |
| | — |
| | 41,321 |
| Net effect of swaps | | (4,112 | ) | | (192 | ) | | 342 |
| | — |
| | — |
| | (3,962 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 18,549 |
| | — |
| | — |
| | 18,549 |
| Other (income) expense | | (30 | ) | | (1,711 | ) | | 616 |
| | 907 |
| | — |
| | (218 | ) | Income from investment in affiliates | | (117,557 | ) | | (57,557 | ) | | (8,410 | ) | | (15,579 | ) | | 199,103 |
| | — |
| Income before taxes | | 156,729 |
| | 103,923 |
| | 19,455 |
| | 109,058 |
| | (199,103 | ) | | 190,062 |
| Provision for taxes | | 4,511 |
| | 12,445 |
| | 3,103 |
| | 17,785 |
| | — |
| | 37,844 |
| Net income | | $ | 152,218 |
| | $ | 91,478 |
| | $ | 16,352 |
| | $ | 91,273 |
| | $ | (199,103 | ) | | $ | 152,218 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,842 |
| | — |
| | 2,842 |
| | — |
| | (2,842 | ) | | 2,842 |
| Unrealized income on cash flow hedging derivatives | | (3,224 | ) | | (4,646 | ) | | 72 |
| | — |
| | 4,574 |
| | (3,224 | ) | Other comprehensive income (loss), (net of tax) | | (382 | ) | | (4,646 | ) | | 2,914 |
| | — |
| | 1,732 |
| | (382 | ) | Total Comprehensive Income | | $ | 151,836 |
| | $ | 86,832 |
| | $ | 19,266 |
| | $ | 91,273 |
| | $ | (197,371 | ) | | $ | 151,836 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
| Receivables | | — |
| | 82,892 |
| | 59,911 |
| | 370,246 |
| | (506,356 | ) | | 6,693 |
| Inventories | | — |
| | 3,321 |
| | 3,678 |
| | 37,487 |
| | — |
| | 44,486 |
| Current deferred tax asset | | — |
| | 11,014 |
| | 772 |
| | 3,334 |
| | — |
| | 15,120 |
| Other current assets | | 359 |
| | 5,907 |
| | 11,851 |
| | 12,293 |
| | — |
| | 30,410 |
| | | 359 |
| | 103,531 |
| | 76,331 |
| | 430,163 |
| | (506,356 | ) | | 104,028 |
| Property and Equipment (net) | | 464,394 |
| | 1,035 |
| | 279,255 |
| | 896,184 |
| | — |
| | 1,640,868 |
| Investment in Park | | 459,339 |
| | 661,166 |
| | 115,401 |
| | 25,758 |
| | (1,261,664 | ) | | — |
| Intercompany Note Receivable | | — |
| | 104,165 |
| | — |
| | — |
| | (104,165 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 125,528 |
| | 111,219 |
| | — |
| | 245,808 |
| Other Intangibles, net | | — |
| | — |
| | 17,776 |
| | 22,831 |
| | — |
| | 40,607 |
| Deferred Tax Asset | | — |
| | 47,646 |
| | — |
| | — |
| | (47,646 | ) | | — |
| Intercompany Receivable | | 889,442 |
| | 1,239,210 |
| | 1,294,302 |
| | — |
| | (3,422,954 | ) | | — |
| Other Assets | | 26,323 |
| | 16,288 |
| | 9,608 |
| | 1,974 |
| | — |
| | 54,193 |
| | | $ | 1,848,918 |
| | $ | 2,173,041 |
| | $ | 1,918,201 |
| | $ | 1,488,129 |
| | $ | (5,342,785 | ) | | $ | 2,085,504 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 15,921 |
| | $ | 15,921 |
| | $ | 15,921 |
| | $ | — |
| | $ | (31,842 | ) | | $ | 15,921 |
| Accounts payable | | 60,297 |
| | 232,001 |
| | 26,302 |
| | 215,968 |
| | (506,356 | ) | | 28,212 |
| Deferred revenue | | — |
| | — |
| | 5,413 |
| | 45,341 |
| | — |
| | 50,754 |
| Accrued interest | | 3,089 |
| | 1,706 |
| | 5,519 |
| | — |
| | — |
| | 10,314 |
| Accrued taxes | | 4,925 |
| | 340 |
| | 261 |
| | 3,294 |
| | — |
| | 8,820 |
| Accrued salaries, wages and benefits | | — |
| | 26,989 |
| | 781 |
| | 5,792 |
| | — |
| | 33,562 |
| Self-insurance reserves | | — |
| | 4,212 |
| | 1,716 |
| | 15,826 |
| | — |
| | 21,754 |
| Other accrued liabilities | | 462 |
| | 3,312 |
| | 226 |
| | 2,104 |
| | — |
| | 6,104 |
| | | 84,694 |
| | 284,481 |
| | 56,139 |
| | 288,325 |
| | (538,198 | ) | | 175,441 |
| Deferred Tax Liability | | — |
| | — |
| | 58,762 |
| | 119,611 |
| | (47,646 | ) | | 130,727 |
| Derivative Liability | | 19,403 |
| | 12,877 |
| | — |
| | — |
| | — |
| | 32,280 |
| Other Liabilities | | — |
| | 2,235 |
| | — |
| | — |
| | — |
| | 2,235 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 104,165 |
| | (104,165 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 155,004 |
| | 155,004 |
| | 155,004 |
| | — |
| | (310,008 | ) | | 155,004 |
| Term debt | | 1,140,179 |
| | 1,140,179 |
| | 1,140,179 |
| | — |
| | (2,280,358 | ) | | 1,140,179 |
| Notes | | 400,373 |
| | 400,373 |
| | 400,373 |
| | — |
| | (800,746 | ) | | 400,373 |
| | | 1,695,556 |
| | 1,695,556 |
| | 1,695,556 |
| | — |
| | (3,391,112 | ) | | 1,695,556 |
| | | | | | | | | | | | | | Equity | | 49,265 |
| | 177,892 |
| | 107,744 |
| | 976,028 |
| | (1,261,664 | ) | | 49,265 |
| | | $ | 1,848,918 |
| | $ | 2,173,041 |
| | $ | 1,918,201 |
| | $ | 1,488,129 |
| | $ | (5,342,785 | ) | | $ | 2,085,504 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the NineThree Months Ended September 30, 2012March 31, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 124,864 |
| | $ | 221,221 |
| | $ | 130,441 |
| | $ | 808,471 |
| | $ | (345,748 | ) | | $ | 939,249 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,988 |
| | 73,938 |
| | — |
| | 83,926 |
| Operating expenses | | 4,141 |
| | 147,211 |
| | 40,328 |
| | 534,900 |
| | (345,748 | ) | | 380,832 |
| Selling, general and administrative | | 4,841 |
| | 70,848 |
| | 9,877 |
| | 29,922 |
| | — |
| | 115,488 |
| Depreciation and amortization | | 33,436 |
| | 28 |
| | 16,415 |
| | 63,277 |
| | — |
| | 113,156 |
| Loss on impairment / retirement of fixed assets, net | | 24,221 |
| | — |
| | 9 |
| | — |
| | — |
| | 24,230 |
| | | 66,639 |
| | 218,087 |
| | 76,617 |
| | 702,037 |
| | (345,748 | ) | | 717,632 |
| Operating income | | 58,225 |
| | 3,134 |
| | 53,824 |
| | 106,434 |
| | — |
| | 221,617 |
| Interest expense (income), net | | 36,438 |
| | 21,957 |
| | 30,898 |
| | (5,422 | ) | | — |
| | 83,871 |
| Net effect of swaps | | (35 | ) | | 192 |
| | (1,475 | ) | | — |
| | — |
| | (1,318 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (13,926 | ) | | — |
| | — |
| | (13,926 | ) | Other (income) expense | | 561 |
| | (7,119 | ) | | 1,221 |
| | 5,337 |
| | — |
| | — |
| Income from investment in affiliates | | (99,035 | ) | | (72,862 | ) | | (14,505 | ) | | (38,160 | ) | | 224,562 |
| | — |
| Income before taxes | | 120,296 |
| | 60,966 |
| | 51,611 |
| | 144,679 |
| | (224,562 | ) | | 152,990 |
| Provision (benefit) for taxes | | 8,701 |
| | (3,771 | ) | | 13,525 |
| | 22,940 |
| | — |
| | 41,395 |
| Net income | | $ | 111,595 |
| | $ | 64,737 |
| | $ | 38,086 |
| | $ | 121,739 |
| | $ | (224,562 | ) | | $ | 111,595 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,251 | ) | | — |
| | (1,251 | ) | | — |
| | 1,251 |
| | (1,251 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (1,798 | ) | | (629 | ) | | 21 |
| | — |
| | 608 |
| | (1,798 | ) | Other comprehensive income (loss), (net of tax) | | (3,049 | ) | | (629 | ) | | (1,230 | ) | | — |
| | 1,859 |
| | (3,049 | ) | Total Comprehensive Income | | $ | 108,546 |
| | $ | 64,108 |
| | $ | 36,856 |
| | $ | 121,739 |
| | $ | (222,703 | ) | | $ | 108,546 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 4,317 |
| | $ | 8,371 |
| | $ | 289 |
| | $ | 41,510 |
| | $ | (12,688 | ) | | $ | 41,799 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | — |
| | 5,037 |
| | — |
| | 5,037 |
| Operating expenses | | 1,423 |
| | 21,606 |
| | 5,941 |
| | 60,375 |
| | (12,688 | ) | | 76,657 |
| Selling, general and administrative | | 1,292 |
| | 16,613 |
| | 711 |
| | 2,423 |
| | — |
| | 21,039 |
| Depreciation and amortization | | 475 |
| | 9 |
| | — |
| | 4,302 |
| | — |
| | 4,786 |
| Loss on impairment / retirement of fixed assets, net | | 36 |
| | — |
| | 478 |
| | 86 |
| | — |
| | 600 |
| | | 3,226 |
| | 38,228 |
| | 7,130 |
| | 72,223 |
| | (12,688 | ) | | 108,119 |
| Operating income (loss) | | 1,091 |
| | (29,857 | ) | | (6,841 | ) | | (30,713 | ) | | — |
| | (66,320 | ) | Interest expense (income), net | | 10,512 |
| | 7,677 |
| | 9,764 |
| | (2,230 | ) | | — |
| | 25,723 |
| Net effect of swaps | | 5,635 |
| | 3,576 |
| | — |
| | — |
| | — |
| | 9,211 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 8,958 |
| | — |
| | — |
| | 8,958 |
| Other (income) expense | | 188 |
| | (2,388 | ) | | 800 |
| | 1,400 |
| | — |
| | — |
| Loss from investment in affiliates | | 72,096 |
| | 35,640 |
| | 3,520 |
| | 21,227 |
| | (132,483 | ) | | — |
| Loss before taxes | | (108,515 | ) | | (87,143 | ) | | (30,500 | ) | | (51,110 | ) | | 132,483 |
| | (144,785 | ) | Provision (benefit) for taxes | | 611 |
| | (17,665 | ) | | (9,254 | ) | | (9,351 | ) | | — |
| | (35,659 | ) | Net loss | | $ | (109,126 | ) | | $ | (69,478 | ) | | $ | (21,246 | ) | | $ | (41,759 | ) | | $ | 132,483 |
| | $ | (109,126 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 301 |
| | — |
| | 301 |
| | — |
| | (301 | ) | | 301 |
| Unrealized income on cash flow hedging derivatives | | 8,885 |
| | 2,535 |
| | — |
| | — |
| | (2,535 | ) | | 8,885 |
| Other comprehensive income, (net of tax) | | 9,186 |
| | 2,535 |
| | 301 |
| | — |
| | (2,836 | ) | | 9,186 |
| Total Comprehensive Loss | | $ | (99,940 | ) | | $ | (66,943 | ) | | $ | (20,945 | ) | | $ | (41,759 | ) | | $ | 129,647 |
| | $ | (99,940 | ) |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the NineThree Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 118,280 |
| | $ | 210,407 |
| | $ | 115,163 |
| | $ | 768,126 |
| | $ | (328,349 | ) | | $ | 883,627 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,389 |
| | 70,592 |
| | — |
| | 79,981 |
| Operating expenses | | 4,180 |
| | 131,955 |
| | 38,959 |
| | 504,813 |
| | (328,349 | ) | | 351,558 |
| Selling, general and administrative | | 8,049 |
| | 64,226 |
| | 9,541 |
| | 28,310 |
| | — |
| | 110,126 |
| Depreciation and amortization | | 33,021 |
| | 34 |
| | 15,440 |
| | 62,362 |
| | — |
| | 110,857 |
| Loss on impairment / retirement of fixed assets, net | | 1,023 |
| | — |
| | 10 |
| | 43 |
| | — |
| | 1,076 |
| | | 46,273 |
| | 196,215 |
| | 73,339 |
| | 666,120 |
| | (328,349 | ) | | 653,598 |
| Operating income | | 72,007 |
| | 14,192 |
| | 41,824 |
| | 102,006 |
| | — |
| | 230,029 |
| Interest expense, net | | 70,822 |
| | 8,395 |
| | 39,129 |
| | 6,184 |
| | — |
| | 124,530 |
| Net effect of swaps | | (7,230 | ) | | 910 |
| | 2,813 |
| | — |
| | — |
| | (3,507 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,704 |
| | — |
| | — |
| | 14,704 |
| Other (income) expense | | 1,517 |
| | (4,712 | ) | | 2,072 |
| | 2,078 |
| | — |
| | 955 |
| (Income) loss from investment in affiliates | | (71,656 | ) | | (34,663 | ) | | (12,389 | ) | | 107 |
| | 118,601 |
| | — |
| Income (loss) before taxes | | 78,554 |
| | 44,262 |
| | (4,505 | ) | | 93,637 |
| | (118,601 | ) | | 93,347 |
| Provision (benefit) for taxes | | 6,980 |
| | 2,527 |
| | (4,446 | ) | | 16,712 |
| | — |
| | 21,773 |
| Net income (loss) | | $ | 71,574 |
| | $ | 41,735 |
| | $ | (59 | ) | | $ | 76,925 |
| | $ | (118,601 | ) | | $ | 71,574 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,354 |
| | — |
| | 2,354 |
| | — |
| | (2,354 | ) | | 2,354 |
| Unrealized income on cash flow hedging derivatives | | 2,366 |
| | (9,866 | ) | | 79 |
| | — |
| | 9,787 |
| | 2,366 |
| Other comprehensive income (loss), (net of tax) | | 4,720 |
| | (9,866 | ) | | 2,433 |
| | — |
| | 7,433 |
| | 4,720 |
| Total Comprehensive Income | | $ | 76,294 |
| | $ | 31,869 |
| | $ | 2,374 |
| | $ | 76,925 |
| | $ | (111,168 | ) | | $ | 76,294 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 1,456 |
| | $ | 2,577 |
| | $ | 266 |
| | $ | 27,932 |
| | $ | (4,033 | ) | | $ | 28,198 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | — |
| | 4,087 |
| | — |
| | 4,087 |
| Operating expenses | | 1,335 |
| | 20,436 |
| | 5,657 |
| | 47,890 |
| | (4,033 | ) | | 71,285 |
| Selling, general and administrative | | 1,332 |
| | 13,696 |
| | 760 |
| | 2,196 |
| | — |
| | 17,984 |
| Depreciation and amortization | | 696 |
| | 9 |
| | — |
| | 3,374 |
| | — |
| | 4,079 |
| Loss on impairment / retirement of fixed assets, net | | 82 |
| | — |
| | 10 |
| | — |
| | — |
| | 92 |
| | | 3,445 |
| | 34,141 |
| | 6,427 |
| | 57,547 |
| | (4,033 | ) | | 97,527 |
| Operating loss | | (1,989 | ) | | (31,564 | ) | | (6,161 | ) | | (29,615 | ) | | — |
| | (69,329 | ) | Interest expense, net | | 11,158 |
| | 6,615 |
| | 10,403 |
| | (1,389 | ) | | — |
| | 26,787 |
| Net effect of swaps | | 173 |
| | 332 |
| | (1,475 | ) | | — |
| | — |
| | (970 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (8,192 | ) | | — |
| | — |
| | (8,192 | ) | Other (income) expense | | 187 |
| | (3,035 | ) | | 197 |
| | 2,651 |
| | — |
| | — |
| Loss from investment in affiliates | | 50,491 |
| | 23,083 |
| | 3,230 |
| | 24,916 |
| | (101,720 | ) | | — |
| Loss before taxes | | (63,998 | ) | | (58,559 | ) | | (10,324 | ) | | (55,793 | ) | | 101,720 |
| | (86,954 | ) | Provision (benefit) for taxes | | 1,417 |
| | (11,672 | ) | | (2,334 | ) | | (8,950 | ) | | — |
| | (21,539 | ) | Net loss | | $ | (65,415 | ) | | $ | (46,887 | ) | | $ | (7,990 | ) | | $ | (46,843 | ) | | $ | 101,720 |
| | $ | (65,415 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,169 | ) | | — |
| | (1,169 | ) | | — |
| | 1,169 |
| | (1,169 | ) | Unrealized income on cash flow hedging derivatives | | 339 |
| | 98 |
| | 21 |
| | — |
| | (119 | ) | | 339 |
| Other comprehensive income (loss), (net of tax) | | (830 | ) | | 98 |
| | (1,148 | ) | | — |
| | 1,050 |
| | (830 | ) | Total Comprehensive Loss | | $ | (66,245 | ) | | $ | (46,789 | ) | | $ | (9,138 | ) | | $ | (46,843 | ) | | $ | 102,770 |
| | $ | (66,245 | ) |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Twelve Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 147,733 |
| | $ | 261,878 |
| | $ | 142,250 |
| | $ | 941,465 |
| | $ | (409,232 | ) | | $ | 1,084,094 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,531 |
| | 85,471 |
| | — |
| | 96,002 |
| Operating expenses | | 5,452 |
| | 180,665 |
| | 47,134 |
| | 636,106 |
| | (409,232 | ) | | 460,125 |
| Selling, general and administrative | | 6,865 |
| | 90,892 |
| | 11,650 |
| | 36,381 |
| | — |
| | 145,788 |
| Depreciation and amortization | | 37,698 |
| | 41 |
| | 18,300 |
| | 72,097 |
| | — |
| | 128,136 |
| (Gain) loss on impairment / retirement of fixed assets, net | | 24,188 |
| | — |
| | (62 | ) | | 1,593 |
| | — |
| | 25,719 |
| | | 74,203 |
| | 271,598 |
| | 87,553 |
| | 831,648 |
| | (409,232 | ) | | 855,770 |
| Operating income (loss) | | 73,530 |
| | (9,720 | ) | | 54,697 |
| | 109,817 |
| | — |
| | 228,324 |
| Interest (income) expense, net | | 50,007 |
| | 28,592 |
| | 44,583 |
| | (6,813 | ) | | — |
| | 116,369 |
| Net effect of swaps | | (5,019 | ) | | (1 | ) | | (5,910 | ) | | — |
| | — |
| | (10,930 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (18,721 | ) | | — |
| | — |
| | (18,721 | ) | Other (income) expense | | 749 |
| | (10,205 | ) | | 1,498 |
| | 7,958 |
| | — |
| | — |
| Income from investment in affiliates | | (93,080 | ) | | (55,557 | ) | | (12,698 | ) | | (24,955 | ) | | 186,290 |
| | — |
| Income before taxes | | 120,873 |
| | 27,451 |
| | 45,945 |
| | 133,627 |
| | (186,290 | ) | | 141,606 |
| Provision (benefit) for taxes | | 10,106 |
| | (29,298 | ) | | 20,942 |
| | 29,089 |
| | — |
| | 30,839 |
| Net income | | $ | 110,767 |
| | $ | 56,749 |
| | $ | 25,003 |
| | $ | 104,538 |
| | $ | (186,290 | ) | | $ | 110,767 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (2,672 | ) | | — |
| | (2,672 | ) | | — |
| | 2,672 |
| | (2,672 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (397 | ) | | (109 | ) | | 21 |
| | — |
| | 88 |
| | (397 | ) | Other comprehensive income (loss), (net of tax) | | (3,069 | ) | | (109 | ) | | (2,651 | ) | | — |
| | 2,760 |
| | (3,069 | ) | Total Comprehensive Income | | $ | 107,698 |
| | $ | 56,640 |
| | $ | 22,352 |
| | $ | 104,538 |
| | $ | (183,530 | ) | | $ | 107,698 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 148,576 |
| | $ | 263,930 |
| | $ | 140,441 |
| | $ | 941,246 |
| | $ | (412,138 | ) | | $ | 1,082,055 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,316 |
| | 85,682 |
| | — |
| | 95,998 |
| Operating expenses | | 5,468 |
| | 177,526 |
| | 48,147 |
| | 637,772 |
| | (412,138 | ) | | 456,775 |
| Selling, general and administrative | | 6,455 |
| | 89,532 |
| | 11,086 |
| | 34,293 |
| | — |
| | 141,366 |
| Depreciation and amortization | | 37,439 |
| | 40 |
| | 18,199 |
| | 71,335 |
| | — |
| | 127,013 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (6,625 | ) | Loss on impairment / retirement of fixed assets, net | | 25,089 |
| | — |
| | 474 |
| | 5,281 |
| | — |
| | 30,844 |
| | | 74,451 |
| | 267,098 |
| | 88,222 |
| | 827,738 |
| | (412,138 | ) | | 845,371 |
| Operating income (loss) | | 74,125 |
| | (3,168 | ) | | 52,219 |
| | 113,508 |
| | — |
| | 236,684 |
| Interest (income) expense, net | | 47,879 |
| | 30,390 |
| | 40,231 |
| | (9,013 | ) | | — |
| | 109,487 |
| Net effect of swaps | | 5,324 |
| | 3,365 |
| | — |
| | — |
| | — |
| | 8,689 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 8,152 |
| | — |
| | — |
| | 8,152 |
| Other (income) expense | | 750 |
| | (8,860 | ) | | 2,623 |
| | 5,487 |
| | — |
| | — |
| Income from investment in affiliates | | (68,417 | ) | | (53,593 | ) | | (14,307 | ) | | (18,503 | ) | | 154,820 |
| | — |
| Income before taxes | | 67,414 |
| | 12,749 |
| | 14,903 |
| | 135,537 |
| | (154,820 | ) | | 75,783 |
| Provision (benefit) for taxes | | 9,269 |
| | (15,849 | ) | | (3,507 | ) | | 27,725 |
| | — |
| | 17,638 |
| Net income | | $ | 58,145 |
| | $ | 28,598 |
| | $ | 18,410 |
| | $ | 107,812 |
| | $ | (154,820 | ) | | $ | 58,145 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,839 |
| | — |
| | 1,839 |
| | — |
| | (1,839 | ) | | 1,839 |
| Unrealized income on cash flow hedging derivatives | | 8,685 |
| | 2,551 |
| | — |
| | — |
| | (2,551 | ) | | 8,685 |
| Other comprehensive income (loss), (net of tax) | | 10,524 |
| | 2,551 |
| | 1,839 |
| | — |
| | (4,390 | ) | | 10,524 |
| Total Comprehensive Income | | $ | 68,669 |
| | $ | 31,149 |
| | $ | 20,249 |
| | $ | 107,812 |
| | $ | (159,210 | ) | | $ | 68,669 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Twelve Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 138,907 |
| | $ | 247,595 |
| | $ | 126,355 |
| | $ | 886,578 |
| | $ | (386,119 | ) | | $ | 1,013,316 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,850 |
| | 80,928 |
| | — |
| | 90,778 |
| Operating expenses | | 5,725 |
| | 163,754 |
| | 45,814 |
| | 597,781 |
| | (386,119 | ) | | 426,955 |
| Selling, general and administrative | | 9,755 |
| | 79,492 |
| | 11,347 |
| | 32,598 |
| | — |
| | 133,192 |
| Depreciation and amortization | | 37,168 |
| | 95 |
| | 17,188 |
| | 71,931 |
| | — |
| | 126,382 |
| Loss on impairment of goodwill and other intangibles | | — |
| | — |
| | — |
| | 903 |
| | — |
| | 903 |
| Loss on impairment / retirement of fixed assets, net | | 1,456 |
| | — |
| | 10 |
| | 62,043 |
| | — |
| | 63,509 |
| | | 54,104 |
| | 243,341 |
| | 84,209 |
| | 846,184 |
| | (386,119 | ) | | 841,719 |
| Operating income | | 84,803 |
| | 4,254 |
| | 42,146 |
| | 40,394 |
| | — |
| | 171,597 |
| Interest expense, net | | 99,205 |
| | 14,877 |
| | 52,411 |
| | 4,362 |
| | — |
| | 170,855 |
| Net effect of swaps | | (7,183 | ) | | 910 |
| | 8,045 |
| | — |
| | — |
| | 1,772 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 2,323 |
| | — |
| | — |
| | 2,323 |
| Other (income) expense | | 1,704 |
| | (5,748 | ) | | 2,852 |
| | 2,147 |
| | — |
| | 955 |
| (Income) loss from investment in affiliates | | (25,098 | ) | | 1,534 |
| | (9,116 | ) | | 2,425 |
| | 30,255 |
| | — |
| Income (loss) before taxes | | 16,175 |
| | (7,319 | ) | | (14,369 | ) | | 31,460 |
| | (30,255 | ) | | (4,308 | ) | Provision (benefit) for taxes | | 8,059 |
| | 953 |
| | (7,308 | ) | | (14,128 | ) | | — |
| | (12,424 | ) | Net income (loss) | | $ | 8,116 |
| | $ | (8,272 | ) | | $ | (7,061 | ) | | $ | 45,588 |
| | $ | (30,255 | ) | | $ | 8,116 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,704 | ) | | — |
| | (1,704 | ) | | — |
| | 1,704 |
| | (1,704 | ) | Unrealized income on cash flow hedging derivatives | | 22,916 |
| | (7,153 | ) | | 180 |
| | — |
| | 6,973 |
| | 22,916 |
| Other comprehensive income (loss), (net of tax) | | 21,212 |
| | (7,153 | ) | | (1,524 | ) | | — |
| | 8,677 |
| | 21,212 |
| Total Comprehensive Income (Loss) | | $ | 29,328 |
| | $ | (15,425 | ) | | $ | (8,585 | ) | | $ | 45,588 |
| | $ | (21,578 | ) | | $ | 29,328 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 140,548 |
| | $ | 249,988 |
| | $ | 126,375 |
| | $ | 903,046 |
| | $ | (390,156 | ) | | $ | 1,029,801 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,932 |
| | 82,100 |
| | — |
| | 92,032 |
| Operating expenses | | 5,351 |
| | 167,068 |
| | 45,805 |
| | 608,940 |
| | (390,156 | ) | | 437,008 |
| Selling, general and administrative | | 7,963 |
| | 83,355 |
| | 11,151 |
| | 35,026 |
| | — |
| | 137,495 |
| Depreciation and amortization | | 37,309 |
| | 45 |
| | 17,325 |
| | 71,213 |
| | — |
| | 125,892 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 876 |
| | — |
| | (51 | ) | | 10,426 |
| | — |
| | 11,251 |
| | | 51,499 |
| | 250,468 |
| | 84,162 |
| | 807,705 |
| | (390,156 | ) | | 803,678 |
| Operating income (loss) | | 89,049 |
| | (480 | ) | | 42,213 |
| | 95,341 |
| | — |
| | 226,123 |
| Interest expense, net | | 72,309 |
| | 19,090 |
| | 50,897 |
| | 488 |
| | — |
| | 142,784 |
| Net effect of swaps | | (10,940 | ) | | (243 | ) | | (4,793 | ) | | — |
| | — |
| | (15,976 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 8,605 |
| | — |
| | — |
| | 8,605 |
| Other (income) expense | | 716 |
| | (9,542 | ) | | 1,708 |
| | 7,084 |
| | — |
| | (34 | ) | (Income) loss from investment in affiliates | | (67,272 | ) | | (19,390 | ) | | (2,601 | ) | | 16,074 |
| | 73,189 |
| | — |
| Income (loss) before taxes | | 94,236 |
| | 9,605 |
| | (11,603 | ) | | 71,695 |
| | (73,189 | ) | | 90,744 |
| Provision (benefit) for taxes | | 9,429 |
| | (25,950 | ) | | 4,319 |
| | 18,139 |
| | — |
| | 5,937 |
| Net income (loss) | | $ | 84,807 |
| | $ | 35,555 |
| | $ | (15,922 | ) | | $ | 53,556 |
| | $ | (73,189 | ) | | $ | 84,807 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,050 |
| | — |
| | 1,050 |
| | — |
| | (1,050 | ) | | 1,050 |
| Unrealized income (loss) on cash flow hedging derivatives | | (7,958 | ) | | (9,638 | ) | | 254 |
| | — |
| | 9,384 |
| | (7,958 | ) | Other comprehensive income (loss), (net of tax) | | (6,908 | ) | | (9,638 | ) | | 1,304 |
| | — |
| | 8,334 |
| | (6,908 | ) | Total Comprehensive Income (Loss) | | $ | 77,899 |
| | $ | 25,917 |
| | $ | (14,618 | ) | | $ | 53,556 |
| | $ | (64,855 | ) | | $ | 77,899 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 208,436 |
| | $ | 48,506 |
| | $ | 9,093 |
| | $ | 155,849 |
| | $ | (145,140 | ) | | $ | 276,744 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (56,171 | ) | | (70,083 | ) | | 3,948 |
| | (22,834 | ) | | 145,140 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (29,295 | ) | | (8 | ) | | (14,426 | ) | | (32,081 | ) | | — |
| | (75,810 | ) | Net cash from (for) investing activities | | (84,293 | ) | | (70,091 | ) | | (10,478 | ) | | (54,915 | ) | | 145,140 |
| | (74,637 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Term debt payments, including early termination penalties | | (14,468 | ) | | (10,212 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Intercompany (payments) receipts | | — |
| | 93,845 |
| | — |
| | (93,845 | ) | | — |
| | — |
| Distributions (paid) received | | (66,675 | ) | | 110 |
| | — |
| | — |
| | — |
| | (66,565 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 47 |
| | — |
| | — |
| | — |
| | 47 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | Net cash from (for) financing activities | | (81,143 | ) | | 23,336 |
| | 9,230 |
| | (93,845 | ) | | — |
| | (142,422 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 893 |
| | — |
| | — |
| | 893 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase for the period | | 43,000 |
| | 1,751 |
| | 8,738 |
| | 7,089 |
| | — |
| | 60,578 |
| Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | (117,670 | ) | | $ | (49,663 | ) | | $ | (42,030 | ) | | $ | (12,767 | ) | | $ | 153,463 |
| | $ | (68,667 | ) | CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 65,636 |
| | 58,171 |
| | (2,442 | ) | | 32,098 |
| | (153,463 | ) | | — |
| Capital expenditures | | (17,866 | ) | | — |
| | (600 | ) | | (17,363 | ) | | — |
| | (35,829 | ) | Net cash from (for) investing activities | | 47,770 |
| | 58,171 |
| | (3,042 | ) | | 14,735 |
| | (153,463 | ) | | (35,829 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | $ | 96,000 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 96,000 |
| Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,763 | ) | | (8,538 | ) | | (190 | ) | | — |
| | — |
| | (23,491 | ) | Term debt payments, including early termination penalties | | (654,568 | ) | | (462,054 | ) | | (14,478 | ) | | — |
| | — |
| | (1,131,100 | ) | Distributions (paid) received | | (35,688 | ) | | 868 |
| | — |
| | — |
| | — |
| | (34,820 | ) | Exercise of limited partnership unit options | | — |
| | 28 |
| | — |
| | — |
| | — |
| | 28 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (127 | ) | | — |
| | — |
| | — |
| | (127 | ) | Net cash from (for) financing activities | | 44,900 |
| | (8,220 | ) | | (190 | ) | | — |
| | — |
| | 36,490 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (786 | ) | | — |
| | — |
| | (786 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (25,000 | ) | | 288 |
| | (46,048 | ) | | 1,968 |
| | — |
| | (68,792 | ) | Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 169,343 |
| | $ | 48,628 |
| | $ | 48,422 |
| | $ | 25,310 |
| | $ | (69,338 | ) | | $ | 222,365 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (29,986 | ) | | (39,615 | ) | | (6,353 | ) | | 6,616 |
| | 69,338 |
| | — |
| Capital expenditures | | (38,121 | ) | | — |
| | (10,510 | ) | | (24,249 | ) | | — |
| | (72,880 | ) | Net cash from (for) investing activities | | (68,107 | ) | | (39,615 | ) | | (16,863 | ) | | (17,633 | ) | | 69,338 |
| | (72,880 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net (payments) on revolving credit loans | | (23,200 | ) | | — |
| | — |
| | — |
| | — |
| | (23,200 | ) | Term debt borrowings | | 13,246 |
| | 9,358 |
| | 334 |
| | — |
| | — |
| | 22,938 |
| Term debt payments, including early termination penalties | | (13,831 | ) | | (9,763 | ) | | (306 | ) | | — |
| | — |
| | (23,900 | ) | Intercompany (payments) receipts | | — |
| | 688 |
| | — |
| | (688 | ) | | — |
| | — |
| Distributions (paid) received | | (16,668 | ) | | 64 |
| | — |
| | — |
| | — |
| | (16,604 | ) | Payment of debt issuance costs | | (11,783 | ) | | (8,332 | ) | | (375 | ) | | — |
| | — |
| | (20,490 | ) | Net cash from (for) financing activities | | (52,236 | ) | | (7,985 | ) | | (347 | ) | | (688 | ) | | — |
| | (61,256 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (1,682 | ) | | — |
| | — |
| | (1,682 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase for the period | | 49,000 |
| | 1,028 |
| | 29,530 |
| | 6,989 |
| | — |
| | 86,547 |
| Balance, beginning of period | | — |
| | 1,461 |
| | 6,943 |
| | 1,361 |
| | — |
| | 9,765 |
| Balance, end of period | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | (184,504 | ) | | $ | 10,151 |
| | $ | (37,239 | ) | | $ | (6,697 | ) | | $ | 136,357 |
| | $ | (81,932 | ) | CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 62,103 |
| | 60,369 |
| | 2,208 |
| | 11,677 |
| | (136,357 | ) | | — |
| Capital expenditures | | (8,374 | ) | | — |
| | (7,125 | ) | | (11,969 | ) | | — |
| | (27,468 | ) | Net cash from (for) investing activities | | 53,729 |
| | 60,369 |
| | (4,917 | ) | | (292 | ) | | (136,357 | ) | | (27,468 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 153,000 |
| | — |
| | 2,004 |
| | — |
| | — |
| | 155,004 |
| Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Intercompany (payments) receipts | | — |
| | (10,320 | ) | | — |
| | 10,320 |
| | — |
| | — |
| Distributions (paid) received | | (22,225 | ) | | 74 |
| | — |
| | — |
| | — |
| | (22,151 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 48 |
| | — |
| | — |
| | — |
| | 48 |
| Excess tax benefit from unit-based compensation | | — |
| | (437 | ) | | — |
| | — |
| | — |
| | (437 | ) | Net cash from (for) financing activities | | 130,775 |
| | (70,635 | ) | | 11,554 |
| | 10,320 |
| | — |
| | 82,014 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (819 | ) | | — |
| | — |
| | (819 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (115 | ) | | (31,421 | ) | | 3,331 |
| | — |
| | (28,205 | ) | Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 186,582 |
| | $ | (152,159 | ) | | $ | 12,038 |
| | $ | 318,078 |
| | $ | (91,985 | ) | | $ | 272,554 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (40,694 | ) | | (47,206 | ) | | 5,245 |
| | (9,330 | ) | | 91,985 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (33,025 | ) | | (8 | ) | | (23,050 | ) | | (37,037 | ) | | — |
| | (93,120 | ) | Net cash for investing activities | | (72,546 | ) | | (47,214 | ) | | (17,805 | ) | | (46,367 | ) | | 91,985 |
| | (91,947 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Intercompany term debt (payments) receipts | | — |
| | 269,500 |
| | — |
| | (269,500 | ) | | — |
| | — |
| Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Term debt payments, including early termination penalties | | (14,467 | ) | | (10,213 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Distributions (paid) received | | (105,569 | ) | | 261 |
| | — |
| | — |
| | — |
| | (105,308 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 53 |
| | — |
| | — |
| | — |
| | 53 |
| Payment of debt issuance costs | | — |
| | — |
| | (723 | ) | | — |
| | — |
| | (723 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | Net cash from (for) financing activities | | (120,036 | ) | | 199,147 |
| | 8,507 |
| | (269,500 | ) | | — |
| | (181,882 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 1,065 |
| | — |
| | — |
| | 1,065 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (6,000 | ) | | (226 | ) | | 3,805 |
| | 2,211 |
| | — |
| | (210 | ) | Balance, beginning of period | | 49,000 |
| | 2,489 |
| | 36,473 |
| | 8,350 |
| | — |
| | 96,312 |
| Balance, end of period | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 188,221 |
| | $ | (37,475 | ) | | $ | 16,546 |
| | $ | 135,165 |
| | $ | (4,510 | ) | | $ | 297,947 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 43,043 |
| | (49,642 | ) | | (2,479 | ) | | 4,568 |
| | 4,510 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | 14,885 |
| | — |
| | 16,058 |
| Capital expenditures | | (43,156 | ) | | (8 | ) | | (8,023 | ) | | (52,075 | ) | | — |
| | (103,262 | ) | Net cash for investing activities | | 1,060 |
| | (49,650 | ) | | (10,502 | ) | | (32,622 | ) | | 4,510 |
| | (87,204 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | $ | (57,000 | ) | | $ | — |
| | $ | (2,004 | ) | | $ | — |
| | $ | — |
| | $ | (59,004 | ) | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Intercompany term debt (payments) receipts | | — |
| | 104,165 |
| | — |
| | (104,165 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (669,035 | ) | | (472,267 | ) | | (14,798 | ) | | — |
| | — |
| | (1,156,100 | ) | Distributions (paid) received | | (102,402 | ) | | 920 |
| | — |
| | — |
| | — |
| | (101,482 | ) | Capital (contribution) infusion | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 57 |
| | — |
| | — |
| | — |
| | 57 |
| Payment of debt issuance costs | | (14,763 | ) | | (8,537 | ) | | (191 | ) | | — |
| | — |
| | (23,491 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | 1,519 |
| | — |
| | — |
| | — |
| | 1,519 |
| Net cash from (for) financing activities | | (189,281 | ) | | 87,460 |
| | (2,515 | ) | | (104,165 | ) | | — |
| | (208,501 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 477 |
| | — |
| | — |
| | 477 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | 335 |
| | 4,006 |
| | (1,622 | ) | | — |
| | 2,719 |
| Balance, beginning of period | | — |
| | 397 |
| | 119 |
| | 6,803 |
| | — |
| | 7,319 |
| Balance, end of period | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 101,376 |
| | $ | (9,652 | ) | | $ | 25,380 |
| | $ | 19,056 |
| | $ | 58,064 |
| | $ | 194,224 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 25,281 |
| | 23,147 |
| | (1,356 | ) | | 10,992 |
| | (58,064 | ) | | — |
| Capital expenditures | | (44,247 | ) | | — |
| | (13,179 | ) | | (27,488 | ) | | — |
| | (84,914 | ) | Net cash from (for) investing activities | | (18,966 | ) | | 23,147 |
| | (14,535 | ) | | (16,496 | ) | | (58,064 | ) | | (84,914 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Term debt borrowings | | 13,246 |
| | 9,358 |
| | 334 |
| | — |
| | — |
| | 22,938 |
| Intercompany term debt (payments) receipts | | — |
| | 2,063 |
| | — |
| | (2,063 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (24,211 | ) | | (17,091 | ) | | (536 | ) | | — |
| | — |
| | (41,838 | ) | Distributions (paid) received | | (30,559 | ) | | 121 |
| | — |
| | — |
| | — |
| | (30,438 | ) | Exercise of limited partnership unit options | | — |
| | 7 |
| | — |
| | — |
| | — |
| | 7 |
| Payment of debt issuance costs | | (12,886 | ) | | (9,110 | ) | | (761 | ) | | — |
| | — |
| | (22,757 | ) | Net cash from (for) financing activities | | (54,410 | ) | | (14,652 | ) | | (963 | ) | | (2,063 | ) | | — |
| | (72,088 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,611 | ) | | — |
| | — |
| | (2,611 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | 28,000 |
| | (1,157 | ) | | 7,271 |
| | 497 |
| | — |
| | 34,611 |
| Balance, beginning of period | | 21,000 |
| | 3,646 |
| | 29,202 |
| | 7,853 |
| | — |
| | 61,701 |
| Balance, end of period | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 113,654 |
| | $ | (89,658 | ) | | $ | 14,102 |
| | $ | 182,798 |
| | $ | (367 | ) | | $ | 220,529 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (16,818 | ) | | (6,588 | ) | | 1,126 |
| | 21,913 |
| | 367 |
| | — |
| Capital expenditures | | (40,662 | ) | | — |
| | (22,440 | ) | | (34,253 | ) | | — |
| | (97,355 | ) | Net cash from (for) investing activities | | (57,480 | ) | | (6,588 | ) | | (21,314 | ) | | (12,340 | ) | | 367 |
| | (97,355 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings (payments) on revolving credit loans | | 31,000 |
| | — |
| | (3,110 | ) | | — |
| | — |
| | 27,890 |
| Intercompany term debt (payments) receipts | | — |
| | 166,023 |
| | — |
| | (166,023 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (13,831 | ) | | (9,763 | ) | | (306 | ) | | — |
| | — |
| �� | (23,900 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (73,343 | ) | | 273 |
| | — |
| | — |
| | — |
| | (73,070 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Payment of debt issuance costs | | — |
| | — |
| | (723 | ) | | — |
| | — |
| | (723 | ) | Exercise of limited partnership unit options | | — |
| | 53 |
| | — |
| | — |
| | — |
| | 53 |
| Excess tax benefit from unit-based compensation | | — |
| | (437 | ) | | — |
| | — |
| | — |
| | (437 | ) | Net cash from (for) financing activities | | (56,174 | ) | | 96,149 |
| | 5,411 |
| | (166,023 | ) | | — |
| | (120,637 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,473 | ) | | — |
| | — |
| | (2,473 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (97 | ) | | (4,274 | ) | | 4,435 |
| | — |
| | 64 |
| Balance, beginning of period | | — |
| | 494 |
| | 4,393 |
| | 2,368 |
| | — |
| | 7,255 |
| Balance, end of period | | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
|
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview:
We generate our revenues primarily from sales of (1) admission to our parks, (2) food, merchandise and games inside our parks, and (3) hotel rooms, food and other attractions outside our parks. Our principal costs and expenses, which include salaries and wages, advertising, maintenance, operating supplies, utilities and insurance, are relatively fixed and do not vary significantly with attendance.
Each of our properties is run by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including the allocation of resources, on a property-by-property basis.
Aside from attendance and guest per capita statistics, discrete financial information and operating results are not prepared at the regional level, but rather at the individual park level for use by the CEO, who is the Chief Operating Decision Maker (CODM), as well as by the Chief Financial Officer, the Chief Operating Officer, the park general managers, and the Executive Vice President, Operations.
Critical Accounting Policies: This management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in the United States of America. These principles require us to make judgments, estimates and assumptions during the normal course of business that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ significantly from those estimates under different assumptions and conditions. Management believes that judgment and estimates related to the following critical accounting policies could materially affect our consolidated financial statements: •Property and Equipment •Impairment of Long-Lived Assets •Goodwill and Other Intangible Assets •Self-Insurance Reserves •Derivative Financial Instruments •Revenue Recognition
Income Taxes In the thirdfirst quarter of 20122013, there were no changes in the above critical accounting policies previously disclosed in our Annual Report on Form 10-K10-K/A for the year ended December 31, 20112012. except as noted below. Change in Depreciation Method Effective January 1, 2013, the Partnership changed its method of depreciation for the group of assets acquired as a whole in 1983, as well as for the groups of like assets of each subsequent business acquisition from the composite method to the unit method. Historically, the Partnership had used the composite depreciation method for land improvements, buildings, rides and equipment for the group of assets acquired as a whole in 1983, as well as for the group of like assets of each subsequent business acquisition. The unit method was only used for all individual assets 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. No gain or loss is recognized on normal retirements of composite assets. Instead, the net book value of a retired asset reduces accumulated depreciation for the composite group. Unusual retirements of composite assets could result in the recognition of a gain or loss. 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. In order to improve comparability and enhance the level of precision associated with allocating historical cost, the Partnership had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation for
all assets. The Partnership believes that pursuant to generally accepted accounting principles, changing from the composite method of depreciation to the unit method of depreciation is a change in accounting estimate that is effected by a change in accounting principle, which should be accounted for prospectively. This prospective application will result in the discontinuance of the composite method of depreciation for all prior acquisitions with the existing net book value of each composite pool allocated to the remaining individual assets (units) in that pool with each unit assigned an appropriate remaining useful life on an individual unit basis. Assigning a useful life to each unit in the various composite pools had an insignificant effect on the weighted average useful lives of all assets that were previously accounted for under the composite method. The change in depreciation method had an immaterial impact on the Condensed Consolidated Financial Statements for the quarter ended March 31, 2013.Future asset retirements could have a material impact on the Condensed Consolidated Financial Statements in the periods such items occur.
Adjusted EBITDA: We believe that Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the Amended 20102013 Credit Agreement) is a meaningful measure of park-level operating profitability because we use it for measuring returns on capital investments, evaluating potential acquisitions, determining awards under incentive compensation plans, and calculating compliance with certain loan covenants. Adjusted EBITDA is provided in the discussion of results of operations that follows as a supplemental measure of our operating results and is not intended to be a substitute for operating income, net income or cash flows from operating activities as defined under generally accepted accounting principles. In addition, Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
The table below sets forth a reconciliation of Adjusted EBITDA to net income for the three-, nine- and twelve-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | | (13 weeks) | | (13 weeks) | | (39 weeks) | | (38 weeks) | | (53 weeks) | | (52 weeks) | | | (In thousands ) | Net income | | $ | 140,688 |
| | $ | 152,218 |
| | $ | 111,595 |
| | $ | 71,574 |
| | $ | 110,767 |
| | $ | 8,116 |
| Interest expense | | 26,863 |
| | 41,353 |
| | 83,902 |
| | 124,650 |
| | 116,437 |
| | 171,049 |
| Interest income | | (13 | ) | | (32 | ) | | (31 | ) | | (120 | ) | | (68 | ) | | (194 | ) | Provision (benefit) for taxes | | 51,713 |
| | 37,844 |
| | 41,395 |
| | 21,773 |
| | 30,839 |
| | (12,424 | ) | Depreciation and amortization | | 60,747 |
| | 63,448 |
| | 113,156 |
| | 110,857 |
| | 128,136 |
| | 126,382 |
| EBITDA | | 279,998 |
| | 294,831 |
| | 350,017 |
| | 328,734 |
| | 386,111 |
| | 292,929 |
| Net effect of swaps | | (175 | ) | | (3,962 | ) | | (1,318 | ) | | (3,507 | ) | | (10,930 | ) | | 1,772 |
| Unrealized foreign currency (gain) loss | | (14,737 | ) | | 17,314 |
| | (14,108 | ) | | 13,224 |
| | (17,502 | ) | | 549 |
| Non-cash equity expense (income) | | 362 |
| | — |
| | 2,630 |
| | (228 | ) | | 2,619 |
| | (269 | ) | Loss on impairment of goodwill and other intangibles | | — |
| | — |
| | — |
| | — |
| | — |
| | 903 |
| Loss on impairment/retirement of fixed assets, net | | 25,000 |
| | 880 |
| | 24,230 |
| | 1,076 |
| | 25,719 |
| | 63,509 |
| Terminated merger costs | | — |
| | — |
| | — |
| | 80 |
| | 150 |
| | (79 | ) | Refinancing costs | | — |
| | (195 | ) | | — |
| | 955 |
| | — |
| | 955 |
| Other non-recurring items (as defined) | | 1,861 |
| | 836 |
| | 4,026 |
| | 6,107 |
| | 7,445 |
| | 6,107 |
| Adjusted EBITDA (1) | | $ | 292,309 |
| | $ | 309,704 |
| | $ | 365,477 |
| | $ | 346,441 |
| | $ | 393,612 |
| | $ | 366,376 |
| | | | | | | | | | | | | | (1) As permitted by and defined in the Amended 2010 Credit Agreement | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Three months ended | | Twelve months ended | | | 3/31/2013 | | 3/25/2012 | | 3/31/2013 | | 3/25/2012 | | | (13 weeks) | | (12 weeks) | | (53 weeks) | | (52 weeks) | | | (In thousands) | Net income (loss) | | $ | (109,126 | ) | | $ | (65,415 | ) | | $ | 58,145 |
| | $ | 84,807 |
| Interest expense | | 25,763 |
| | 26,803 |
| | 109,579 |
| | 142,876 |
| Interest income | | (40 | ) | | (16 | ) | | (92 | ) | | (92 | ) | Provision (benefit) for taxes | | (35,659 | ) | | (21,539 | ) | | 17,638 |
| | 5,937 |
| Depreciation and amortization | | 4,786 |
| | 4,079 |
| | 127,013 |
| | 125,892 |
| EBITDA | | (114,276 | ) | | (56,088 | ) | | 312,283 |
| | 359,420 |
| Loss on early extinguishment of debt | | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | 9,211 |
| | (970 | ) | | 8,689 |
| | (15,976 | ) | Unrealized foreign currency (gain) loss | | 8,881 |
| | (8,249 | ) | | 7,949 |
| | 8,502 |
| Non-cash equity expense | | 2,933 |
| | 1,700 |
| | 4,498 |
| | 1,689 |
| Loss on impairment/retirement of fixed assets, net | | 600 |
| | 92 |
| | 30,844 |
| | 11,251 |
| (Gain) on sale of other assets | | — |
| | — |
| | (6,625 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | 230 |
| Refinancing costs | | — |
| | — |
| | — |
| | (34 | ) | Other non-recurring items (as defined) | | 805 |
| | 1,721 |
| | 3,264 |
| | 6,823 |
| Adjusted EBITDA (1) | | $ | (57,273 | ) | | $ | (61,794 | ) | | $ | 395,475 |
| | $ | 371,905 |
| | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | |
Results of Operations:
Our results of operations for the nine, three and twelve months ended September 30, 2012 and September 25, 2011 are not directly comparable as the current nine- and twelve month periods include an additional week of operations due to the timing of the fiscal third quarter close, and as the current three-month period includes fewer operating days due to the timing of the fiscal second and third quarter closes. Since a large portion of the variances in our statements of operations is due to the difference in the number of operating days in the current fiscal periods, we will also compare current operating results to the prior year period ended October 2, 2011.
Immaterial Restatement -
We have made two separate corrections relating to our use of the composite depreciation methodmethod.
The first correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the group3 and 12 month periods ended March 25, 2012, related to a misapplication of assets acquired as a whole in 1983, as well as for groups of assets in each subsequent business acquisition.the composite depreciation method. Upon the normal retirement of an asset within a composite group, our practice generally hashad been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of our financial statements for the three months ended July 1,in 2012, wemanagement determined that this methodology was not appropriate. As a result, we revised the useful lives of our composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation).
The second correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the 12 month period ended March 25, 2012, reflects a subsequent determination that a disposition from our composite group of assets was considered to be unusual. In certain situations under the composite method, disposals are considered unusual and, accordingly, losses are not included in the composite depreciation pool but are rather charged immediately to expense. In 2013, the Partnership's initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was challenged by the SEC Staff. We evaluated the amount and nature of these adjustments andultimately concluded that theysuch disposition was unusual and that a $8.8 millioncharge be reflected in the 2011 financial statements.
First Quarter -
Operating results for the first quarter historically include less than 5% of our full-year revenues and attendance. The results include normal off-season operating, maintenance and administrative expenses at our ten seasonal amusement parks and four outdoor water parks, as well as daily operations at Knott's Berry Farm, which is open year-round, and Castaway Bay, which is generally open daily from Memorial Day to Labor Day plus a limited daily schedule for the balance of the year. The following table presents key financial information for the three months ended March 31, 2013 and March 25, 2012: | | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 3/31/2013 | | 3/25/2012 | | $ | | % | | | (13 weeks) | | (12 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 41,799 |
| | $ | 28,198 |
| | $ | 13,601 |
| | 48.2 | % | Operating costs and expenses | | 102,733 |
| | 93,356 |
| | 9,377 |
| | 10.0 | % | Depreciation and amortization | | 4,786 |
| | 4,079 |
| | 707 |
| | 17.3 | % | Loss on impairment / retirement of fixed assets | | 600 |
| | 92 |
| | 508 |
| | N/M |
| Operating loss | | $ | (66,320 | ) | | $ | (69,329 | ) | | $ | 3,009 |
| | (4.3 | )% | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | (57,273 | ) | | $ | (61,794 | ) | | $ | 4,521 |
| | (7.3 | )% |
For the quarter ended March 31, 2013, net revenues increased to $41.8 million from $28.2 million for the first quarter of 2012. The increase between periods was primarily due to the strong first-quarter performance in both attendance and per-capita spending at Knott's Berry Farm, our only year-round property, compared with the first quarter a year ago, as well as an extra week of operations due to the earlier timing of Easter in 2013 compared to 2012. At the end of the first quarter, only five of our 15 properties were not materialin operation. The other parks, including our larger parks, Cedar Point and Kings Island located in Ohio and Canada's Wonderland in Toronto, were in the final stages of preparing to eitheropen for the 2013 operating season.
Operating costs and expenses for the quarter increased $9.3 million to $102.7 million from $93.4 million in 2012 and were in line with expectations. Operating results for the first quarter include normal off-season operating, maintenance and administrative
expenses at our prior annualseasonal amusement and water parks, and daily operations at Knott’s Berry Farm and Castaway Bay. The increase in first-quarter costs reflects a $5.4 million increase in operating expenses and a $2.3 million increase in selling, general and administrative ("SG&A") expenses. The cost of food, merchandise and games revenues for the period increased slightly due to sales volume increases at Knott's Berry Farm in the first quarter of 2013. The $5.4 million increase in operating expenses was due primarily to the extra week of operations in the first quarter of 2013 compared with 2012. For the quarter, labor costs increased $3.8 million, maintenance expense increased $2.2 million and operating supplies increased $0.9 million. These increases in operating costs were somewhat offset by a reduction in insurance expense due to a prior-year, non-recurring public liability claim at one of our parks. The $2.3 million increase in SG&A expenses was due primarily to increases in first-quarter advertising fees and full-time labor costs, largely related to full staffing levels.
Interest expense for the first quarter of 2013 was $25.8 million, representing a $1.0 million decrease compared to the first quarter of 2012. The decrease in interest expense was primarily due to the settlement of our Canadian swap in the first quarter of 2012.
During the first quarter of 2013, the net effect of our swaps decreased $10.2 million to a non-cash charge to earnings of $9.2 million, reflecting the regularly scheduled amortization of amounts in AOCI related to interest rate swaps, the write off of amounts in AOCI related to de-designated interest rate swaps, as well as gains from marking the ineffective and de-designated swaps to market. During the first quarter of 2013 we also recognized a $9.0 million charge to earnings for unrealized/realized foreign currency gains and losses, $8.9 million of which represents an unrealized foreign currency loss on the U.S.-dollar denominated debt held at our Canadian property. Due to our March 2013 refinancing, loan fees related to our 2010 and 2011 financings were written off, resulting in a $34.6 million charge to earnings in the period.
During the quarter, a benefit for taxes of $35.7 million was recorded to account for publicly traded partnership (PTP) taxes and the tax attributes of our corporate subsidiaries, compared to a benefit for taxes of $21.5 million in the same period a year ago. Actual cash taxes paid or quarterly financial statements. Nonetheless, the historical financial statement amounts included in this filing have been corrected for this error. We expect to likewise correct previously presented historical financial statementspayable are estimated to be included in future filings, including the annual financial statements to be included in our Annual Report on Form 10-Kbetween $14-$17 million for the 2013 calendar year.
After interest expense and the provision for taxes, net loss for the quarter totaled $109.1 million, or $1.95 per diluted limited partner unit, compared with net loss of $65.4 million, or $1.18 per diluted limited partner unit, for the first quarter a year ending December 31, 2012.ago. The larger net loss for the period is due to the loss on early debt extinguishment and a change in the unrealized/realized loss on foreign currency exchange, offset somewhat by the increased first-quarter revenues.
NineTwelve Months Ended September 30, 2012March 31, 2013 -
The fiscal nine-monthtwelve-month period ended September 30, 2012,March 31, 2013, consisted of a 39-week53-week period and included a total of 2,178 operating days compared with 3852 weeks and 2,148 operating days for the fiscal nine-monthtwelve-month period ended SeptemberMarch 25, 2011.2012. Operating days were virtually identical, as the current period had only one additional operating day.
The following table presents key financial information for the ninetwelve months ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | | | | | | | | | | | | | | | | | | Nine months ended | | Nine months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (39 weeks) | | (38 weeks) | | | | | | | (Amounts in thousands except per capita spending) | | | | | | | | | | Net revenues | | $ | 939,249 |
| | $ | 883,627 |
| | $ | 55,622 |
| | 6.3 | % | Operating costs and expenses | | 580,246 |
| | 541,665 |
| | 38,581 |
| | 7.1 | % | Depreciation and amortization | | 113,156 |
| | 110,857 |
| | 2,299 |
| | 2.1 | % | Loss on impairment / retirement of fixed assets, net | | 24,230 |
| | 1,076 |
| | 23,154 |
| | N/M |
| Operating income | | $ | 221,617 |
| | $ | 230,029 |
| | $ | (8,412 | ) | | (3.7 | )% | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 365,477 |
| | $ | 346,441 |
| | $ | 19,036 |
| | 5.5 | % | Adjusted EBITDA margin | | 38.9 | % | | 39.2 | % | | $ | — |
| | (0.3 | )% | Attendance | | 20,689 |
| | 20,114 |
| | 575 |
| | 2.9 | % | Per capita spending | | $ | 41.78 |
| | $ | 40.15 |
| | $ | 1.63 |
| | 4.1 | % | Out-of-park revenues | | $ | 99,526 |
| | $ | 97,622 |
| | $ | 1,904 |
| | 2.0 | % |
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 3/31/2013 | | 3/25/2012 | | $ | | % | | | (53 weeks) | | (52 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,082,055 |
| | $ | 1,029,801 |
| | $ | 52,254 |
| | 5.1 | % | Operating costs and expenses | | 694,139 |
| | 666,535 |
| | 27,604 |
| | 4.1 | % | Depreciation and amortization | | 127,013 |
| | 125,892 |
| | 1,121 |
| | 0.9 | % | (Gain) on sale of other assets | | (6,625 | ) | | — |
| | (6,625 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 30,844 |
| | 11,251 |
| | 19,593 |
| | 174.1 | % | Operating income | | $ | 236,684 |
| | $ | 226,123 |
| | $ | 10,561 |
| | 4.7 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 395,475 |
| | $ | 371,905 |
| | $ | 23,570 |
| | 6.3 | % | Adjusted EBITDA margin | | 36.5 | % | | 36.1 | % | | — |
| | 0.4 | % |
Net revenues totaled $1,082.1 millionfor the ninetwelve months ended September 30, 2012March 31, 2013, increasing $52.3 million, from $1,029.8 million increased $55.6 million to $939.2 million from $883.6 million duringfor the ninetrailing twelve months ended SeptemberMarch 25, 20112012. The increase in revenues reflects an increase of 575,000 visits, or 3%, in combined attendanceRevenues for the nine-monthtwelve-month period ended September 30, 2012 when compared withincreased 5% on the nine-month period ended September 25, 2011. The increase in revenues also reflects a 4%, or $1.63, increase in averagestrength of higher attendance and in-park guest per capita spending. In-park guest per capita spending represents the amount spent per attendee to gain admission to a park, plus all amounts spent while inside the park gates. The increase in per capita spending was largely due to the successful introduction of new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing initiatives. Attendance increased year-over-year on virtually the same number of operating days as our season pass sales and visits increased during the same nine-month period and a 2%, or $1.9 million, increase incomparable periods.
Meanwhile, out-of-park revenues. Out-of-park revenues, includewhich represents the sale of hotel rooms, food, merchandise and other complementary activities located outside of the park gates, as well as e-commerce transaction fees. In-park guest per capita spending representsincreased slightly in the average amount spent per attendee to gain admission to a park
plus all amounts spent while inside the park gates. Revenuescomparable periods. The increase in net revenues for the first ninetwelve months of the yearended March 31, 2013 also reflectreflects the negative impact of currency exchange rates and the weakening U.S. dollar on our Canadian operations ($4.5(approximately $4.5 million) during the period.
For the nine-month period ended September 30, 2012, operatingOperating costs and expenses increased 7%$27.6 million, or 4%, or $38.5to $694.1 million to $580.2 million from $541.7versus $666.5 million for 2012 and were in line with expectations. The increase in costs and expenses was the nine-month period ended September 25, 2011, the net result of a $3.9$4.0 million increase in cost of goods sold, a $29.3$19.8 million increase in operating expenses, and a $5.4 million$3.9 increase in selling, generalSG&A costs. The 4% increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at our parks. Operating expenses increased due to several factors, including higher employment-related costs, higher operating supply costs, and higher self-insurance expenses. Employment-related costs increased approximately $12.6 million due to normal merit increases, increases in health-related benefit costs, additional staffing levels associated with new premium benefit offerings and other initiatives aimed at improving the overall guest experience, and non-recurring severance payments. Operating supplies and expenses increased approximately $5.3 million due primarily to initiatives to expand or enhance live entertainment at the parks, as well as incremental costs associated with our e-commerce platform and higher attendance. These increases in operating costs were somewhat offset by a reduction in insurance expense due to a prior-year (first quarter of 2012), non-recurring public liability claim at one of our parks.
The increase in SG&A costs was due to an increase in employment-related costs ($4.5 million), operating supplies ($3.8 million), and agency advertising fees ($2.7 million), offset by decreases in professional and administrative costs ("SG&A")($5.9 million). DepreciationThe increase in employment costs was primarily the result of higher wages and amortization expense for the period increased $2.3 millionbenefits due to normal merit increases and full-staffing levels. Increases in operating supplies and advertising fees were due to the earlier timing of Easter, as well as incremental costs to support operating initiatives including general infrastructure improvements. Professional and administrative fees decreased primarily due to a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests. The overall increase in capital spending when compared withcosts and expenses also reflects the prior year. The positive impact of exchange rates on our Canadian operations ($1.2 million) during the period.
Loss on impairment/retirement of fixed assets, reported fornet, during the nine-month period totaled $30.8 million, which reflects a non-cash charge to earnings of $25.0 million for the partial impairment of operating and non-operating fixed assets at Wildwater Kingdom netalong with losses on other retirements. During the twelve-month period ended March 31, 2013, two non-core assets were sold at gains totaling $6.6 million. During the twelve-month period ended March 25, 2012, a charge of an $0.8$11.3 million gain fromfor the sale of a non-operating asset at one of our properties. After depreciation, amortization, loss on impairment / retirement of fixed assets was recorded which includes the retirement of the asset as described in Note 11 to the financial statements.
Depreciation and amortization expense for the period increased $1.1 million compared with the prior period due primarily to an increase in capital expenditures for the 2012 season. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for the current period decreased $8.4increased $10.6 million to $221.6$236.7 million through the first nine months of 2012 from operating income of $230.0 million through the first nine months of 2011.$226.1 million.
Interest expense for the first three quarters of 2012 was $83.9twelve months ended March 31, 2013 decreased $33.3 million a decrease of $40.7to $109.6 million, from $142.9 million for the first three quarters of 2011.same twelve-month period a year ago. The reduction in interest expense iswas primarily attributable to an approximate 300 basis point (bps) decline in our effective interest rate, the result of lower fixed rates on London InterBank Offered Rate (LIBOR) within our interest-rate swap contracts. TheAdditionally during the current period, $25.0 million of term debt principal payments were made, reducing our average fixed LIBOR rate in our swap agreements declined from 5.62% in 2011 to 2.48% in 2012.debt outstanding.
ForDuring the current period, the net effect of our interest rate swaps decreased $2.2was recorded as a charge to earnings of $8.7 million between years, resulting incompared to a non-cash benefit to earnings of $1.3$16.0 million for the first nine months of 2012, as compared with a $3.5 million non-cash benefit to earnings for the nine-month period in 2011.prior period. The difference reflects the regularly scheduled amortization of amounts in Accumulated other comprehensive income ("AOCI")AOCI related to the swaps and the write off of AOCI amounts related to de-designated interest rate swaps, which were offset by gains from marking the ineffective and de-designated swaps to market and foreign currency gains related to the U.S.-dollar denominated Canadian term loan in the current period. During the current year-to-date period, we also recognized a $13.9$8.2 million net benefitcharge to earnings for unrealized/realized foreign currency gains,losses, which included a $14.1$7.9 million unrealized foreign currency gainloss on the U.S.-dollar denominated debt held at our Canadian property. Due to our March 2013 refinancing, loan fees that were paid as part
of our 2010 and 2011 financings were written off, resulting in a $34.6 million non-cash charge to earnings recorded in "Loss on early debt extinguishment" on the consolidated statement of operations.
During the first fiscal nine months of 2012, aA provision for taxes of $41.4$17.6 million was recorded to accountin the period for publicly traded partnership (“PTP”) taxes and the tax attributes of our corporate subsidiaries.subsidiaries and publicly traded partnership (PTP) taxes. This compares with a $21.8 million provision for taxes of $5.9 million in period ended March 25, 2012 for the first fiscal nine monthstax attributes of 2011. The year-over-year variation in the tax provision is due primarily to an increase in the income subject to tax. Actual cash taxes paid or payable for the 2012 calendar year are estimated to be between $11our corporate subsidiaries and $13 million. The Partnership also expects to receive a $10.4 million refund of prior year taxes paid resulting from the carry back of the loss recognized from the settlement of a derivative contract.PTP taxes.
After interest expense and the benefitprovision for taxes, net income for the nine months ended September 30, 2012period totaled $111.6$58.1 million, or $2.00$1.04 per diluted limited partner unit, compared with net income of $71.6$84.8 million, or $1.28$1.52 per unit, for the nine months ended September 25, 2011.a year ago.
It is important to note that the current nine-month results benefited from an additional week, or 30 more operating days, due to the timing of the third quarter fiscal close. Comparing both 2012 and 2011 on a 39-week basis, net revenues would have been up $41.1 million, or 5%, on increases in both attendance and in-park guest per capita spending. On a comparable basis, attendance would have increased 228,000 visits, primarily due to an increase in season pass attendance, and in-park per capita spending would have increased $1.67, or 4%, primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Over that same comparable basis, out-of-park revenues would have decreased by approximately $0.3 million, or less than 1%.
Operating costs and expenses on a comparable 39-week basis would have increased approximately $27.9 million, or 5%, due to an increase of $2.9 million, or 3%, in cost of goods sold, an increase in operating expenses of $21.9 million, or 6%, and an increase of $3.1 million, or 3%, in SG&A costs. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $1.6 million) during the nine-month period ended September 30, 2012.
The 3% increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Operating expenses in the 39-week period increased due to several factors, including higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. Employment-related costs increased approximately $11.0 million due to normal merit increases, increases in health-related benefit costs, additional staffing levels associated with new premium benefit offerings and other initiatives aimed at improving the overall guest experience, and non-recurring severance payments. Due in part to mild weather, we were able to accelerate off-season maintenance projects into the first half of the year, resulting in year-over-year maintenance expense increasing by approximately $4.4 million. Operating supplies and expenses increased approximately $4.0 million due primarily to initiatives
to expand or enhance live entertainment at the parks, as well as incremental costs associated with our new e-commerce platform. During the first nine months, public liability and workers compensation expense increased $2.1 million due to claim settlements and an increase in our reserves based on management's estimates of future claims.
SG&A expense for the comparable 39-week period increased approximately $3.1 million compared to same period in 2011 due to an increase in operating supplies of $4.7 million, an increase in advertising costs of $1.5 million, and an increase in employee related costs of $2.9 million. The operating supplies and advertising increases were due to incremental costs to support 2012 operating initiatives including general infrastructure improvements. These increases in expense were offset somewhat by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in 2011.
For the fiscal nine-month period ended September 30, 2012,We believe Adjusted EBITDA (as defined in the Amended 2010 Credit Agreement), which we believe is a meaningful measure of our park-level operating results (for additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net income, see Note 6 in Item 6, “Selected Financial Data,” on pages 15-16). For the twelve-month period ended March 31, 2013, Adjusted EBITDA increased $23.6 million, or 6%, to $365.5 million compared with $346.4 million$395.5 million. Over this same period, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased 40 bps to 36.5% from 36.1% for the fiscal nine-monthtwelve-month period ended SeptemberMarch 25, 2011. This2012. The increase was due in part to the extra week in the current fiscal nine-month period. On a same-week basis, Adjusted EBITDA for the nine-month period would have still been up approximately $15.2 million, or 4%, between years,was primarily due to anthe increase in revenues resulting from the successful introduction of our new premium benefit offerings and dynamic pricing initiatives, as well as the successful expansion of our season pass base. These revenue gains were offset somewhat by an increase in operating costs in the period. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
Third Quarter -
The fiscal three-month period ended September 30, 2012, consisted of a 13-week period and included a total of 1,177 operating days compared with 13 weeks and 1,253 operating days for the fiscal three-month period ended September 25, 2011. The variance in days is due to a shift in the operating calendar.
The following table presents key financial information for the three months ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (13 weeks) | | (13 weeks) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 553,445 |
| | $ | 572,268 |
| | $ | (18,823 | ) | | (3.3 | )% | Operating costs and expenses | | 263,657 |
| | 262,188 |
| | 1,469 |
| | 0.6 | % | Depreciation and amortization | | 60,747 |
| | 63,448 |
| | (2,701 | ) | | (4.3 | )% | Loss on impairment / retirement of fixed assets | | 25,000 |
| | 880 |
| | 24,120 |
| | N/M |
| Operating income | | $ | 204,041 |
| | $ | 245,752 |
| | $ | (41,711 | ) | | (17.0 | )% | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 292,309 |
| | $ | 309,704 |
| | $ | (17,395 | ) | | (5.6 | )% | Adjusted EBITDA margin | | 52.8 | % | | 54.1 | % | | — |
| | (1.3 | )% | Attendance | | 11,960 |
| | 12,933 |
| | (973 | ) | | (7.5 | )% | Per capita spending | | $ | 42.90 |
| | $ | 40.84 |
| | $ | 2.06 |
| | 5.0 | % | Out-of-park revenues | | $ | 54,260 |
| | $ | 58,879 |
| | $ | (4,619 | ) | | (7.8 | )% |
For the quarter ended September 30, 2012, net revenues decreased 3%, or $18.8 million, to $553.5 million from $572.3 million in 2011. This decrease reflects a 5% increase in average in-park per capita spending, offset by an 8% decrease in combined attendance (973,000 visits), and an 8% ($4.6 million) decrease in out-of-park revenues. The decreases in net revenues and attendance was largely attributable to the decrease in operating days in the quarter due to the way the fiscal calendar fell in 2012 compared with 2011. In-park per capita spending increased primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Out-of-park revenues decreased due to soft results in accommodations being somewhat offset by fees generated from our new e-commerce initiatives. The decrease in revenues for the third quarter of 2012 also reflects the negative impact of exchange rates on our Canadian operations ($2.4 million) during the period.
Operating costs and expenses for the quarter increased less than 1%, or $1.5 million, to $263.7 million from $262.2 million in the third quarter of 2011, the net result of a $1.4 million decrease in cost of goods sold, a $1.9 million increase in operating expenses and a $1.0 million increase in SG&A costs. Operating cost and expense variances between years were also affected by the fewer number of operating days in the current fiscal quarter, as discussed above. Depreciation and amortization expense for the quarter decreased $2.7 million due primarily to the reduction in operating days in the period, on which depreciation expense is based. During the current quarter, we recognized a non-cash charge to earnings of $25.0 million for the partial impairment of operating and non-operating fixed assets at Wildwater Kingdom.
Interest expense for the third quarter of 2012 was $26.9 million, representing an $14.5 million decrease from the interest expense for the third quarter of 2011. As mentioned in the nine-month discussion above, interest expense decreased primarily due to an approximate 300 bps decline in our effective interest rate. The decline in the effective interest rate is primarily due to lower fixed rates of LIBOR in debt associated derivative contracts, which declined from 5.62% in 2011 to 2.48% in 2012.
The net effect of our swaps during the third quarter was a non-cash benefit to earnings of $0.2 million, representing a decrease of $3.8 million from the prior year. This non-cash benefit reflects the regularly scheduled amortization of amounts in AOCI related to the swaps. During the 2012 third quarter, we also recognized a $15.0 million net benefit to earnings for unrealized/realized foreign currency gains, $14.7 million of which represents an unrealized foreign currency gain on the U.S.-dollar denominated debt held at our Canadian property.
During the quarter, a provision for taxes of $51.7 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provision for taxes of $37.8 million in the same period a year ago. The variation in the tax provision recorded between periods is due primarily to the increase in income subject to tax. After interest expense and the provision for taxes, net income for the quarter totaled $140.7 million, or $2.51 per diluted limited partner unit, compared with net income of $152.2 million, or $2.73 per unit, for the third quarter a year ago.
It is important to note that the current three-month results were negatively impacted by 76 less operating days, due to the timing of the second and third quarter fiscal closes. Comparing the third quarters of 2012 and 2011 on a comparable operating-day basis, net revenues would have been up $20.8 million, or 4%, on an increase in average in-park guest per capita spending offset by a slight decrease in attendance and a 3% decrease in out-of-park revenues.
Operating costs and expenses on a comparable operating-day basis would have increased approximately $12.4 million, or 5%, on a $2.1 million increase in cost of goods sold, an $8.4 million increase in operating expenses, and $1.9 million increase in SG&A costs. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $0.6 million) during the third quarter. The increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Consistent with our nine-month discussion above, operating expenses in the third quarter increased as a result of higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. The increase in SG&A expense for the quarter reflects an increase in operating supplies associated with the new e-commerce initiative and general park infrastructure improvements, offset slightly by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in the third quarter of 2011.
For the current quarter, Adjusted EBITDA decreased to $292.3 million from $309.7 million for the fiscal third quarter of 2011. The $17.4 million decrease in Adjusted EBITDA was due to the shift in operating days during the quarter. On a same week basis, Adjusted EBITDA would have increased $11.3 million due to incremental revenues resulting from the introduction of new premium benefit offerings, which contributed to increased average guest per capita spending, as well as an increase in attendance in the quarter. Partially offsetting these gains on a same week basis were higher park-level operating costs during the period related to park pre-opening and off-season maintenance projects and increases in costs to support 2012 initiatives, including a new e-commerce platform and infrastructure improvements. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
Twelve Months Ended September 30, 2012 -
The fiscal twelve-month period ended September 30, 2012, consisted of a 53-week period and included a total of 2,416 operating days compared with 52 weeks and 2,381 operating days for the fiscal twelve-month period ended September 25, 2011.
The following table presents key financial information for the twelve months ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (53 weeks) | | (52 weeks) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,084,094 |
| | $ | 1,013,316 |
| | $ | 70,778 |
| | 7.0 | % | Operating costs and expenses | | 701,915 |
| | 650,925 |
| | 50,990 |
| | 7.8 | % | Depreciation and amortization | | 128,136 |
| | 126,382 |
| | 1,754 |
| | 1.4 | % | Loss on impairment of goodwill and other intangibles | | — |
| | 903 |
| | (903 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 25,719 |
| | 63,509 |
| | (37,790 | ) | | N/M |
| Operating income | | $ | 228,324 |
| | $ | 171,597 |
| | $ | 56,727 |
| | 33.1 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 393,612 |
| | $ | 366,376 |
| | $ | 27,236 |
| | 7.4 | % | Adjusted EBITDA margin | | 36.3 | % | | 36.2 | % | | — |
| | 0.2 | % | Attendance | | 23,961 |
| | 23,135 |
| | 826 |
| | 3.6 | % | Per capita spending | | $ | 41.44 |
| | $ | 39.91 |
| | $ | 1.53 |
| | 3.8 | % | Out-of-park revenues | | $ | 119,460 |
| | $ | 114,258 |
| | 5,202 |
| | 4.6 | % |
Net revenues totaled $1,084.1 million for the twelve months ended September 30, 2012, increasing $70.8 million, from $1,013.3 million for the trailing twelve months ended September 25, 2011. The increase in revenues was due to an increase in attendance of 826,000 visits, or 4%, an increase in average in-park per capita spending of $1.53, or 4%, and an increase in out-of-park revenues of $5.2 million, or 5%. The attendance increase was due to an increase in season pass visitation as well as the effect of the extra operating days in the period. The increase in average in-park guest per capita spending is primarily due to new premium benefit offerings and the positive impact from new customer messaging and dynamic pricing. Out-of-park revenues increased due to our hotel properties and due to an increase in fees generated by our new e-commerce initiatives. The increase in revenues was also positively affected by the additional operating days in the current fiscal period.
When comparing the two twelve-month periods, operating costs and expenses increased $51.0 million, or 8%, to $701.9 million in 2012 from $650.9 million in 2011. The increase in operating costs and expenses was the net result of a $5.2 million increase in cost of goods sold, a $33.2 million increase in operating expenses and an increase of $12.6 million in selling, general and administrative costs. The increase in operating expenses is primarily attributable to higher employment related expenses of $15 million, $6 million of higher maintenance costs, $1 million in higher insurance costs, and $5 million of higher operating supply costs. The increase in wages is largely due to increased seasonal labor hours as a result of expanded operating hours at several parks, additional attractions and guest services, and the overall effect of increased attendance. The increase in insurance costs was primarily the result of claim settlements and increases in our reserves based on future estimated claim liabilities. As discussed in the nine- and three-month sections, maintenance costs increased primarily due to the earlier timing of planned off-season projects, as well as an increase in the number of projects designed to add to the guest experience. The increase in operating supply costs relates primarily to an increase in attendance over the past year, as well as incremental costs associated with the new e-commerce platform. The increase in SG&A costs includes $5 million in costs largely related to the launching of several new revenue initiatives for the 2012 season, as well as a $3 million increase in advertising expense as we transitioned to a new advertising agency for 2012. Employment related expenses increased $5 million primarily due to the receipt of a non-recurring payroll tax credit of $2.5 million recorded in the fourth quarter of 2010, as well as an increase in retirement expenses and non-recurring severance payments in the current twelve-month period. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $1.6 million) during the twelve-month period ended September 30, 2012.
Depreciation and amortization expense for the trailing-twelve-month periods increased $1.8 million between years due to the increase in capital spending during the current-year period compared with the prior year. During the twelve months ended September 30, 2012, we recognized $0.7 million in non-cash charges for the retirement of assets in the normal course of business. Additionally, we recorded a non-cash charge of $25.0 million for the partial impairment of operating and non-operating fixed
assets at Wildwater Kingdom during the third quarter in 2012. This compares to a non-cash charges recognized during the twelve-month period ended September 25, 2011 of $62.0 million at California's Great America for the partial impairment of its fixed assets and $1.5 million for asset retirements across all properties. Additionally, a non-cash charge of $0.9 million was recorded during the fourth quarter of 2010 for the partial impairment of trade-names originally recorded at the time of the PPI acquisition. It is important to note that each of our parks produces positive cash flow, and that trade-name write-downs and fixed asset impairment losses do not affect cash, Adjusted EBITDA or liquidity.
After depreciation, amortization, loss on impairment of the trade-names, loss on impairment / retirement of fixed assets, and all other non-cash costs, operating income for the twelve months ended September 30, 2012 increased $56.7 million to $228.3 million compared with $171.6 million for the same period a year ago.
Interest expense for the twelve month period ended September 30, 2012 decreased $54.6 million to $116.4 million from $171.0 million for the prior twelve month period ended September 25, 2011. As mentioned in the nine-month discussion above, interest expense decreased primarily due to an approximate 300 bps decline in our effective interest rate. The decline in the effective interest rate is primarily due to lower fixed rates of LIBOR in debt associated derivative contracts, which declined from 5.62% in 2011 to 2.48% in 2012.
The net effect of our swaps during the period was a non-cash benefit to earnings of $10.9 million, representing an increase of $12.7 million from the same period ended September 25, 2011. This non-cash benefit reflects gains from marking the ineffective and de-designated swaps to market, offset somewhat by the regularly scheduled amortization of amounts in AOCI related to the swaps and foreign currency losses related to the U.S.-dollar denominated Canadian term loan in the current twelve month period. During the current twelve-month period, we also recognized a $18.7 million net benefit to earnings for unrealized/realized foreign currency gains and losses, $17.5 million of which represents an unrealized foreign currency gain on the U.S.-dollar denominated debt held at our Canadian property.
A provision for taxes of $30.8 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries during the twelve-month period ended September 30, 2012, compared with a net benefit for taxes of $12.4 million during the same twelve-month period a year ago. The variation in the recorded tax provision between periods is due to the higher income subject to tax for the twelve-month period ending September 30, 2012 and the tax benefit of the impairment charge recorded in the previous twelve-month period.
After interest expense and the provision for taxes, net income for the twelve months ended September 30, 2012 was $110.8 million, or $1.98 per diluted limited partner unit, compared with net income of $8.1 million, or $0.15 per diluted limited partner unit, for the twelve months ended September 25, 2011.
It is important to note that due to the timing of the third quarter fiscal close results for the twelve-month period ended September 30, 2012 benefited from an additional week (53 weeks) compared to the twelve-month period ended September 25, 2011 (52 weeks). Comparing the twelve-month periods for both 2012 and 2011 on a 53-week basis, net revenues would have been up $56.2 million, or 5%, on increases in attendance, in-park guest per capita spending and out-of-park revenues. On a comparable 53-week basis, attendance would have increased 479,000 visits, due to an increase in season pass attendance, and in-park per capita spending would have increased $1.56, or 4%, primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Over that same comparable basis, out-of-park revenues would have increased by approximately $3.5 million, or 3%.
On a comparable 53-week basis, operating costs and expenses would have increased approximately $40.3 million, or 6%, on a $4.2 million increase in cost of goods sold, an $25.8 million increase in operating expenses, and $10.4 million increase in SG&A costs. The overall increase in costs and expenses also reflects the favorable impact of exchange rates on our Canadian operations (approximately $1.6 million) during the period. The increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Consistent with our nine- and three-month discussions above, operating expenses for the twelve-month period increased as a result of higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. The higher employment-related costs reflect normal merit increases, increases in health-related benefit costs, an overall increase in seasonal labor hours as a result of expanded operating hours at several parks, additional attractions and guest services, the overall effect of increased attendance, and non-recurring severance payments. Employment related costs also increased as result of the non-recurring payroll tax credit of $2.5 million recorded in the fourth quarter of 2010. The higher maintenance costs in the current-year twelve-month period relate primarily to the earlier timing of planned off-season projects, which was possible as a result of the mild early-season weather in 2012. The increase in operating supplies was driven by higher attendance and new initiatives to expand or enhance live entertainment at the parks, as well as incremental costs associated with our new e-commerce platform. The increase in public liability and workers compensation expense was the result of a claim settlement in the first quarter of 2012
and increases in our reserves based on management's estimates of future claims. The higher SG&A costs reflect incremental costs associated with the launching of several new revenue initiatives for the 2012 season, including the new e-commerce platform, general park infrastructure improvements, and an increase in advertising expenses as we transitioned to a new advertising agency for 2012. These increases in SG&A costs were somewhat offset by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in 2011.
For the twelve-month period ended September 30, 2012, Adjusted EBITDA increased to $393.6 million compared with $366.4 million for the twelve months ended September 25, 2011, while our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased slightly to 36.3% from 36.2% a year ago. A portion of this increase in Adjusted EBITDA was due to the extra week in the current fiscal twelve-month period. On a same-week basis, Adjusted EBITDA would have been up $23.4 million, or 6%, year over year, due to revenue growth driven by increased attendance and the strong 2011 fourth quarter operating performance. These gains were offset somewhat by incremental operating costs associated with the higher attendance and new operating initiatives for 2012. For the comparable twelve-month periods, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) would have increased 30 bps to 36.3% from 36.0% last year. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
October 2012 -
Based on preliminary results through the end of October, revenues for the first ten months of the year increased approximately $37 million to $1,036 million from $999 million for the same period a year ago. The revenue increase is the result of a 4% increase in average in-park guest per capita spending to $42.00 and attendance levels that were comparable with last year's record results (22.7 million visits). Out-of-park revenues of approximately $108 million through October were also comparable with this time last year.
Liquidity and Capital Resources: With respect to both liquidity and cash flow, we ended the thirdfirst quarter of 20122013 in sound condition. The negative working capital ratio (current assetsliabilities divided by current liabilities)assets) of 1.01.4 at September 30, 2012March 31, 2013 reflects the impact of our seasonal business. Cash, receivables and inventories are at normal seasonal levels and credit facilities are in place to fund current liabilities.
In July 2010, we issued $405 million of 9.125% senior unsecured notes, maturing in 2018, in a private placement, including $5.6 million of Original Issue Discount (OID) to yield 9.375%. Concurrently with this offering, we entered into a new $1,435 million credit agreement (the "2010 Credit Agreement"), which included a $1,175 million senior secured term loan facility and a $260 million senior secured revolving credit facility. The net proceeds from the offering of the notes, along with borrowings under the 2010 Credit Agreement, were used to repay in full all amounts outstanding under our previous credit facilities.
In February 2011, we amended the 2010 Credit Agreement (as so amended, the "Amended 2010 Credit Agreement") and extended the maturity date of the U.S. term loan portion of the credit facilities by one year. Under the Amended 2010 Credit Agreement, the extended U.S. term loan iswas scheduled to mature in December of 2017 and bearsbore interest at a rate of LIBOR plus 300 bps, with a LIBOR floor of 100 bps. The Amended 2010 Credit Agreement also includesincluded a $260 million revolving credit facility. Under the agreement, the Canadian portion of the revolving credit facility has a limit of $15 million. U.S. denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 400 bps (with no LIBOR floor). Canadian denominated loans made under the Canadian portion of the facility also bear interest at a rate of LIBOR plus 400 bps (with no LIBOR floor). The revolving credit facility, which matureswas scheduled to mature in July of 2015, also providesprovided for the issuance of documentary and standby letters of credit.
In May 2012, the Partnership prepaidMarch 2013,we issued $16500 million of long-term debt to meet its obligation5.25% senior unsecured notes, maturing in 2021, in a private placement, with no OID. Concurrently with this offering, we entered into a new $885 million credit agreement (the "2013 Credit Agreement"), which included a $630 million senior secured term loan facility and a $255 million senior secured revolving credit facility. The terms of the senior secured term loan facility include a maturity date of March 15, 2020 and an interest rate of LIBOR plus 250 bps with a LIBOR floor of 75 bps. The term loan amortizes at $6.3 million annually. The net proceeds from the notes and borrowings under the Excess Cash Flow ("ECF") provision2013 Credit Agreement were used to repay in full all amounts outstanding under the previous credit facilities. The facilities provided under the 2013 Credit Agreement are collateralized by substantially all of the assets of the Partnership.
Terms of the 2013 Credit Agreement. AsAgreement include a resultrevolving credit facility of this prepayment, as well as additional optional long-term debt prepayments made in August 2011 and September 2012a combined $255 million. Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility has a limit of $1815 million. U.S. denominated and Canadian denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 225 bps (with no LIBOR floor). The revolving credit facility is scheduled to mature in March 2018 and also provides for the issuance of documentary and standby letters of credit. The 2013 Credit Agreement requires the Partnership to pay a commitment fee of $9 million50, respectively, bps per annum on the Company has no scheduled term-debt principal payments untilunused portion of the first quarter of 2015.credit facilities. At the end of the quarter, we had a total of $1,131.1$630.0 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $400.7$901.3 million of fixed-rate debt (including OID), no$96.0 million outstanding borrowings under our revolving
credit facility, and cash on hand of $96.1$10.0 million. After letters of credit, which totaled $16.5$16.4 million at September 30, 2012March 31, 2013, we had $243.5$142.6 million of available borrowings under the revolving credit facility under the Amended 20102013 Credit Agreement.
Our $405 million of senior unsecured notes require semi-annual interest payments in February and August, with the principal due in full on August 1, 2018. The notes may be redeemed, in whole or in part, at any time prior to August 1, 2014 at a price equal to 100% of the principal amount of the notes redeemed plus a “make-whole” premium together with accrued and unpaid interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Prior to August 1, 2013, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 109.125%. Our $500 million of senior unsecured notes pay interest semi-annually in March and September, with the principal due in full on March 15, 2021. The notes may be redeemed, in whole or in part, at any time prior to March 15, 2016 at a price equal to 100% of the principal amount of the notes redeemed plus a “make-whole” premium together with accrued and unpaid interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Prior to March 15, 2016, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 105.25%. In order to maintain fixed interest costs on a portion of our domestic term debt, in September 2010 we entered into several interest rateforward-starting swap agreements ("September 2010 swaps") to effectively convert a total of $600$600 million of variable-rate debt to fixed rates beginning in October 2011. As a result of the February 2011 amendment to our credit agreement,the 2010 Credit Agreement, the LIBOR floor on the term loan portion of ourits credit facilities decreased to 100 bps from 150 bps, causing a mismatch in critical terms of the September 2010 swaps and the underlying debt. Because of the mismatch of critical terms, we determined the September 2010 swaps, which were originally designated as cash flow hedges, were no longer highly effective, resulting in the de-designation of the September 2010 swaps as of the end of February 2011. As a result of this ineffectiveness, gains of $7.2 million recorded in AOCI through the date of de-designation are being amortized through December 2015. In order to monetize the difference in the LIBOR floors, in March 2011, we entered into several additional forward-starting basis-rate swap agreements ("March 2011 swaps") that, when combined with the September 2010 swaps, effectively converted $600$600 million of variable-rate debt to fixed rates beginning in October 2011. The September 2010 swaps and the March 2011 swaps, were jointly designated as cash flow hedges, maturing in December 2015 and had fixed LIBOR at a weighted average rate of 2.46%. For the period that the September 2010 swaps were de-designated, their fair value decreased by $3.3 million, the offset of which have beenwas recognized as a direct charge to earnings and recorded to “Net effect of swaps” on the consolidated statement of operations along with the regular amortization of “Other comprehensive income (loss)” balances related to these swaps. No other ineffectiveness related to these swaps was recorded in any period presented. In May 2011, we entered into four additional forward-starting basis-rate swap agreements ("May 2011 swaps") that effectively converted another $200 million of variable-rate debt to fixed rates beginning in October 2011. These swaps, which were designated as cash flow hedges, mature in December 2015 and fixed LIBOR at a weighted average rate of 2.54%. As a result of the 2013 Credit Agreement, the previously described swaps were de-designated as the spreads of the 2013 Credit Agreement decreased to 75 bps from 100 bps in the Amended 2010 Credit Agreement. The May 2011 swaps remain de-designated as the amount of variable rate debt decreased to $630 million, and accordingly, the May 2011 swaps are now over hedged. On March 4, 2013, we entered into several forward-starting swap agreements ("March 2013 swaps") that were not designated as a cash flow hedge on that date. On March 6, 2013, the March 2013 swaps were combined with the September 2010 swaps and the March 2011 swaps, and designated as cash flow hedges, effectively converting $600 million of variable-rate debt to fixed rates. The September 2010 swaps, the March 2011 swaps, and the March 2013 swaps were jointly designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.46%. In May 2011, we entered into four additional forward-starting basis-rate swap agreements ("May 2011 swaps") that effectively convert another $200 million of variable-rate debt to fixed rates beginning in October 2011. These swaps, which have been designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.54%2.331%. TheAt the time of the de-designation, the fair market value of all $800the September 2010 swaps, March 2011 swaps, and March 2013 swaps was $23.8 million, which will be amortized out of forward-starting swap agreements atAOCI into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive incomethrough December 2015. At the time of the de-designation, the fair market value of the May 2011 swaps was $7.8 million and was immediately recognized into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations.
At March 31, 2013, the fair market value of the September 30, 20122010 swaps, the March 2011 swaps and the March 2013 swaps was a liability of $34.723.4 million, which was recorded in "Derivative Liability"“Derivative Liability” on the condensed consolidated balance sheet. The May 2011 swaps had a fair market value of $7.6 million as of March 31, 2013 and was recorded in “Derivative Liability” on the condensed consolidated balance sheet.
The following table presents our September 2010 swaps, March 2011 swaps, and May 2011 swaps, and March 2013 swaps which became effective on October 1, 2011 and mature December 15, 2015, along with their notional amounts and their effective fixed interest rates. | | | | | | | | ($'s in thousands) | Forward-Starting Interest Rate Swaps | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 2.40 | % | | 75,000 |
| | 2.43 | % | | 50,000 |
| | 2.42 | % | | 150,000 |
| | 2.55 | % | | 50,000 |
| | 2.42 | % | | 50,000 |
| | 2.55 | % | | 25,000 |
| | 2.43 | % | | 50,000 |
| | 2.54 | % | | 30,000 |
| | 2.54 | % | | 70,000 |
| | 2.54 | % | | 50,000 |
| | 2.54 | % | Total $'s / Average Rate | $ | 800,000 |
| | 2.48 | % |
In 2006, we entered into several fixed-rate interest rate swap agreements totaling $1.0 billion. The weighted average fixed-LIBOR rate on these interest rate swaps, which matured on October 1, 2011, was 5.6%. Based upon our scheduled quarterly regression analysis testing of the effectiveness for the accounting treatment of these swaps, as well as changes in the forward interest rate yield curves used in that testing, the swaps were deemed to be ineffective beginning in October 2009 and continued to be deemed ineffective through their maturity. This resulted in the swaps not qualifying for hedge accounting during the fourth quarter of 2009 and through 2010 and the first three quarters of 2011.
In 2007, we entered into two cross-currency swap agreements, which matured in February 2012 and effectively converted $268.7 million of term debt at the time, and the associated interest payments, from U.S. dollar denominated debt at a rate of LIBOR plus
200 bps to 6.3% fixed-rate Canadian dollar denominated debt. As a result of paying down the underlying Canadian term debt with net proceeds from the sale of surplus land near Canada’s Wonderland in August 2009, the notional amounts of the underlying debt and the cross-currency swaps no longer matched. Because of the mismatch of the notional amounts, we determined the swaps were no longer highly effective going forward, resulting in the de-designation of the swaps as of the end of August 2009.
Based on the change in currency exchange rates from the time we originally entered into the cross-currency swap agreements in 2007, the termination liability of the swaps had increased steadily over time. In order to protect ourselves from further downside risk to the swaps' termination value, in May 2011 we entered into several foreign currency swap agreements to fix the exchange rate on 50% of the liability. In July 2011, we fixed the exchange rate on another 25% of the swap liability, leaving only 25% exposed to further fluctuations in currency exchange rates. In February 2012, these swap agreements were settled for $50.5 million.
In addition to other covenants and provisions, including those discussed below, the Amended 2010 Credit Agreement contains an initial three-year requirement (from July 2010) that at least 50% of our aggregate term debt and senior notes be subject to either a fixed interest rate or interest rate protection. As of September 30, 2012, we were in compliance with this requirement.
The following table presents fixed-rate swaps that matured on October 1, 2011. The table also presents our cross-currency swaps that matured on February 15, 2012 and their notional amounts and interest rates as of their maturity date.
| | | | | | | | | | | | | | | ($'s in thousands) | Interest Rate Swaps | | Cross-currency Swaps | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | Interest Rate | | $ | 200,000 |
| | 5.64 | % | | $ | 255,000 |
| | 7.31 | % | | 200,000 |
| | 5.64 | % | | 150 |
| | 9.50 | % | | 200,000 |
| | 5.64 | % | | | | | | 200,000 |
| | 5.57 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | Total $'s / Average Rate | $ | 1,000,000 |
| | 5.62 | % | | $ | 255,150 |
| | 7.31 | % | | | | | | | | |
| | | | | | | | | | | | | | | | Interest Rate Swaps | ($'s in thousands) | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 2.27 | % | | 50,000 |
| | 2.54 | % | | 75,000 |
| | 2.30 | % | | 30,000 |
| | 2.54 | % | | 50,000 |
| | 2.29 | % | | 70,000 |
| | 2.54 | % | | 150,000 |
| | 2.43 | % | | 50,000 |
| | 2.54 | % | | 50,000 |
| | 2.29 | % | | | | | | 50,000 |
| | 2.47 | % | | | | | | 25,000 |
| | 2.30 | % | | | | | Total $'s / Average Rate | $ | 600,000 |
| | 2.33 | % | | $ | 200,000 |
| | 2.54 | % |
The Amended 20102013 Credit Agreement requires us to maintain specified financial ratios, which if breached for any reason, including a decline in operating results due to economic or weather conditions, could result in an event of default under the agreement. The most critical of these ratios is the Consolidated Leverage Ratio, which is measured on a trailing-twelve-month quarterly basis. At the end of the thirdfirst quarter of 2012,2013, this ratio was set at 6.00x6.25x consolidated total debt (excluding the revolving debt)-to-consolidated EBITDA. The ratio will remain at that level through the end of the first quarter in 2014 and will decrease each second quarter beginning in the second quarter of 2014. Based on our trailing-twelve-month results ending September 30, 2012March 31, 2013, our Consolidated Leverage Ratio was 3.89x, providing $138.3148.2 million of EBITDA cushion on the ratio at the end of the thirdfirst quarter. We were in compliance with all other covenants under the Amended 20102013 Credit Agreement as of September 30, 2012March 31, 2013. The Amended 20102013 Credit Agreement allows restricted payments of up to $20$60 million annually so long as no default or event of default has occurred and is continuing. These restricted payments are not subject to any specific covenants. In 2012, additionalAdditional restricted payments are allowed to be made based on an excess-cash-flow formula, should our pro-forma Consolidated Leverage Ratio be less than or equal to 4.50x,5.0x, measured on a trailing-twelve-month quarterly basis. At March 31, 2013, the notes maturing in 2018 have more restrictive covenants than the 2021 notes. The terms of the indenture governing our 2018 notes permit us to make restricted payments of $20 million annually. Our ability to make additional restricted payments in 20122013 and beyond is permitted should our trailing-twelve-month Total-Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 4.75x, measured on a quarterly basis. In accordance with these debt provisions, on August 9, 2012,February 27, 2013, we announced the declaration of a distribution of $0.40$0.625 per limited partner unit, which was paid on September 15, 2012,March 25, 2013, and on November 6, 2012,May 8, 2013 we announced the declaration of a distribution of $0.40$0.625 per limited partner unit, payable DecemberJune 17, 2012, which will bring our total distributions paid in 2012 to $1.60 per limited partner unit.2013. Existing credit facilities and cash flows from operations are expected to be sufficient to meet working capital needs, debt service, partnership distributions and planned capital expenditures for the foreseeable future.
Off Balance Sheet Arrangements: We had $16.5$16.4 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of September 30, 2012March 31, 2013. We have no other significant off-balance sheet financing arrangements.
Forward Looking Statements Some of the statements contained in this report (including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section) that are not historical in nature are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements as to our expectations, beliefs and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond our control and could cause actual results to differ materially from those described in such statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct. Important factors, including those listed under Item 1A in the Company’s Annual Report on Form 10-K, could adversely affect our future financial performance and cause actual results to differ materially from our expectations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks from fluctuations in interest rates, and to a lesser extent on currency exchange rates on our operations in Canada and, from time to time, on imported rides and equipment. The objective of our financial risk management is to reduce the potential negative impact of interest rate and foreign currency exchange rate fluctuations to acceptable levels. We do not acquire market risk sensitive instruments for trading purposes. We manage interest rate risk through the use of a combination of fixed-rate long-term debt, interest rate swaps that fix a portion of our variable-rate long-term debt, and variable-rate borrowings under our revolving credit facility. Translation exposures with regard to our Canadian operations are not hedged. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the change in fair value of the derivative instrument is reported as a component of “Other comprehensive income (loss)” and reclassified into earnings in the period during which the hedged transaction affects earnings. Changes in fair value of derivative instruments that do not qualify as effective hedging activities are reported as “Net effect of swaps” in the consolidated statement of operations. Additionally, the “Other comprehensive income (loss)” related to interest rate swaps that become ineffective is amortized over the remaining life of the interest rate swap, and reported as a component of “Net effect of swaps” in the consolidated statement of operations. As of March 31, 2013, we had $901.3 million of fixed-rate senior unsecured notes and $630 million of variable-rate term debt. After considering the impact of interest rate swap agreements, approximately $1.2 billionvirtually all of our outstanding long-term debt represents fixed-rate debt and approximately $331.1 million represents variable-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $61$50 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt, after the fixed-rate swap agreements, would lead to an increasea decrease of approximately $2.5$0.5 million in annual cash interest costs. A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $5.4$4.4 million decrease in annual operating income.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures - The Partnership maintains a system of controls and procedures designed to ensure that information required to be disclosed by the Partnership in its reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission and that such information is accumulated and communicated to the Partnership’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of September 30, 2012March 31, 2013, the PartnershipPartnership's management has evaluated the effectiveness of the design and operation of itsthe Partnership's disclosure controls and procedures under supervision of management, includingand with the participation of the Partnership's Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Partnership's disclosure controls and procedures are effective.were effective as of March 31, 2013.
(b)Changes in Internal Control Over Financial Reporting - As disclosed in Amendment No. 2 to the Partnership's Form 10-K/A for the fiscal year ended December 31, 2012, in connection with restating the Partnership's consolidated financial statements therein, management identified a material weakness in internal control over financial reporting related to the Partnership's fixed assets, resulting in a conclusion that the Partnership's internal control over financial reporting was not effective as of December 31, 2012. Remediation of this material weakness in internal control over financial reporting was accomplished through the conversion of all composite assets to the unit method of depreciation as of January 1, 2013. The conversion to the unit method eliminates the concept of normal vs. unusual as any and all asset retirements with a remaining net book value will be reflected in the Consolidated Statements of Operations and Comprehensive Income. There were no other changes in the Partnership’s internal controlscontrol over financial reporting in connection with its 2012that occurred during the fiscal quarter ended thirdMarch 31, 2013-quarter evaluation, or subsequent to such evaluation, that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Jacob T. Falfas vs. Cedar Fair, L.P.
On July 23, 2010, Jacob T. (Jack) Falfas, the former Chief Operating Officer, filed a demand for private arbitration as provided by his employment agreement. In that demand, Mr. Falfas disputed the Partnership's position that he had resigned in June 2010, alleging instead that his employment with the Partnership was terminated without cause. That dispute went to private arbitration, and on February 28, 2011, an arbitration panel ruled 2-to-1 in favor of Mr. Falfas finding that he did not resign but was terminated without cause. Rather than fashioning a remedy consistent with the employment agreement, the panel ruled that Mr. Falfas should be reinstated. The Partnership believed that the arbitrators exceeded their authority by creating a remedy not legally available to Mr. Falfas under his contract with Cedar Fair. On March 21, 2011, the Partnership filed an action in Erie County Court of Common Pleas (Case No. 2011 CV 0217) seeking to have the award modified or vacated. On March 22, 2011, Mr. Falfas commenced a related action in the Erie County Court of Common Pleas (Case No. 2011 CV 0218) demanding enforcement of the arbitration ruling. The two actions were combined into Case No. 2011 CV 0217, before Judge Roger E. Binette. On February 22, 2012 the Erie County Common Pleas Court issued a ruling partially vacating the arbitration award and declaring that Mr. Falfas was not entitled to reinstatement of his employment. The ruling also provided that in accord with paragraph 2 of the arbitration award Mr. Falfas was entitled to certain back pay and other benefits under his 2007 Amended and Restated Employment Agreement as if the employment relationship had not been severed. In March of 2012 Mr. Falfas and the Company both filed appeals of the Court's ruling with the Ohio Sixth District Court of Appeals in Toledo, Ohio. The parties participated in mediation on May 7, 2012 at the direction ofOn April 19, 2013 the Court of Appeals.Appeals issued a ruling reversing the Erie County Common Pleas Court's order regarding the reinstatement of Mr. Falfas' employment and affirming the order regarding back pay and other benefits and remanding the case back to the Erie County Common Pleas Court for further proceedings. The mediation did not result inCompany has until June 3, 2013 to file a settlement. As a resultnotice of appeal with the matter will now proceed through the normal appeal process which typically takes six to nine months to complete. Briefs have been filed and the parties are awaiting scheduling of oral argument.Ohio Supreme Court. The Partnership believes the liability recorded as of September 30, 2012March 31, 2013 to be adequate and does not expect the arbitration ruling or the court order to materially affect its financial results in future periods.
ITEM 1A. RISK FACTORS There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.2012.
ITEM 5. OTHER INFORMATION
TheOn May 8, 2013, the Partnership usesannounced that it had identified a historical classification error in the Partnership's initial determination of whether a specific asset retired under the composite method of depreciation methodwas normal or unusual. The error resulted in the overstatement of Income before taxes of $8.8 million for the groupperiod ended December 31, 2011.
Under the composite method of depreciation, no gain or loss is recognized on normal retirements of composite assets. Instead the net book value after salvage of a retired asset reduces accumulated depreciation for the composite group. Abnormal or unusual retirements of composite assets acquiredwould result in the recognition of a gain or loss. The error resulted in the Partnership's application of its qualitative policy used to determine whether an asset retirement is normal or unusual. The asset retirement being restated was originally classified as normal, thus reducing accumulated depreciation. Management identified that the Partnership had failed to consider whether the specific asset had a whole in 1983,substantial net book value and/or if the retirement caused a deviation from the estimated composite depreciation survivor curve as well as for groupsother minor qualitative issues.
The restatement amount of assets$8.8 million is recorded in each subsequent business acquisition. Upon the normalLoss on impairment / retirement of an asset within a composite group, the Partnership's practice generally has been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of the Partnership's financial statements for the interim period ended July 1, 2012, management determined that this methodology was not appropriate. As a result, the Partnership revised the useful lives of its composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation). Management evaluated the amount and nature of these adjustments and concluded that they were not material to either the Partnership's prior annual or quarterly financial statements. Nonetheless, the historical financial statement amounts included in this filing have been corrected for this error. The Partnership expects to likewise correct previously presented historical financial statements to be included in future filings, including the annual financial statements to be includedfixed assets, net in the Partnership's Annual Report on Form 10-K for10-K/A filing to correct the year ending December 31, 2012.previous error.
ForAs disclosed in the year ended December 31, 2011Partnership's prior filings, the correctionPartnership had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation with the change effective January 1, 2013. The Partnership believes that pursuant to generally accepted accounting principles, changing from the composite method of depreciation to the unit method of depreciation is a change in accounting estimate that is effected by a change in accounting principle, which should be accounted for prospectively. The change to the unit method of depreciation eliminates the qualitative judgment needed to determine whether an asset retirement is normal or unusual, as the net book value of all retirements will decrease net income (loss) by $1.4 millionbe recorded in the Consolidated Statements of Operations and the provision (benefit) for taxes will decrease by $0.6 million. For the 2010 annual financial statements, the correction will decrease net income (loss) by $1.5 million and the provision (benefit) for taxes will decrease by $0.6 million. For the 2009 annual financial statements, the correction will decrease net income (loss) by $1.2 million and the provision (benefit) for taxes will decrease $0.4 million. The balance sheet as of December 31, 2011 has already been corrected in this Form 10-Q.Comprehensive Income.
ITEM 6. EXHIBITS | | | | Exhibit (4.1) | | Rights Agreement between Cedar Fair, L.P. and American Stock Transfer and Trust Co., LLC, dated April 5, 2010. Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on April 6, 2010.
| | | | Exhibit (4.2) | | Indenture, by and among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and The Bank of New York Mellon, as trustee, dated as of July 29, 2010 (including form of 9.125% Senior Notes due 2018). Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (4.3) | | Registration Rights Agreement, among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and J.P. Morgan Securities Inc., as representative of the initial purchasers named therein, dated July 29, 2010. Incorporated herein by reference to Exhibit 4.2 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (10.1) | | Cedar Fair, L.P. Amended and Restated Executive Severance Plan dated July 18, 2007. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-09444) filed on August 3, 2007. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) The Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) The Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notes |
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, Inc. | | | | General Partner | | | | | Date: | November 7, 2012May 10, 2013 | /s/ Matthew A. Ouimet | | | Matthew A. Ouimet | | | President and Chief Executive Officer | | | | | Date: | November 7, 2012May 10, 2013 | /s/ Brian C. Witherow | | | Brian C. Witherow | | | Executive Vice President and | | | Chief Financial Officer |
INDEX TO EXHIBITS | | | | Exhibit (4.1) | | Rights Agreement between Cedar Fair, L.P. and American Stock Transfer and Trust Co., LLC, dated April 5, 2010. Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on April 6, 2010.
| | | | Exhibit (4.2) | | Indenture, by and among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and The Bank of New York Mellon, as trustee, dated as of July 29, 2010 (including form of 9.125% Senior Notes due 2018). Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (4.3) | | Registration Rights Agreement, among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and J.P. Morgan Securities Inc., as representative of the initial purchasers named therein, dated July 29, 2010. Incorporated herein by reference to Exhibit 4.2 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (10.1) | | Cedar Fair, L.P. Amended and Restated Executive Severance Plan dated July 18, 2007. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-09444) filed on August 3, 2007. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) The Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) The Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notes |
s / Average Rate | $ | 800,000 |
| | 2.48 | % | $ | 600,000 |
| | 2.33 | % | | $ | 200,000 |
| | 2.54 | % |
The following table presents our fixed-rate swaps, which matured in October 2011, and the cross-currency swap which matured in February 2012, along with their notional amounts and their fixed interest rates:
| | | | | | | | | | | | | | | ($'s in thousands) | Interest Rate Swaps | | Cross-currency Swaps | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | Implied Interest Rate | | $ | 200,000 |
| | 5.64 | % | | $ | 255,000 |
| | 7.31 | % | | 200,000 |
| | 5.64 | % | | 150 |
| | 9.50 | % | | 200,000 |
| | 5.64 | % | | | | | | 200,000 |
| | 5.57 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | Total $'s / Average Rate | $ | 1,000,000 |
| | 5.62 | % | | $ | 255,150 |
| | 7.31 | % | | | | | | | | |
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the three-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | Interest rate swaps | | $ | 438 |
| | $ | (17,085 | ) | | Interest Expense | | $ | (2,990 | ) | | $ | — |
| | Net effect of swaps | | $ | — |
| | $ | 15,396 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | Interest rate swaps | | $ | 2,266 |
| | $ | 120 |
| | Interest Expense | | $ | (2,797 | ) | | $ | (2,793 | ) | | Net effect of swaps | | $ | 435 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Three months ended | | Three months ended | | | | 9/30/12 | | 9/25/11 | Cross-currency swaps (1) | | Net effect of swaps | | $ | — |
| | $ | 13,622 |
| Foreign currency swaps | | Net effect of swaps | | — |
| | (13,210 | ) | | | | | $ | — |
| | $ | 412 |
| | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Three months ended | | Three months ended | | | | 3/31/13 | | 3/25/12 | Cross-currency swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (4,999 | ) | Foreign currency swaps | | Net effect of swaps | | — |
| | 6,278 |
| Interest rate swaps (2) | | Net effect of swaps | | (1,471 | ) | | — |
| | | | | $ | (1,471 | ) | | $ | 1,279 |
| | | | | | | |
| | (1) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
| | (2) | The May 2011 interest rate swaps were de-designated in March 2013. |
During the quarter ended September 30, 2012March 31, 2013, in addition to the $1.0 million loss recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.27.8 million of incomeexpense related to the write off of OCI balances on our May 2011 swaps and $0.4 million of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the quarter. The effect of this amortizationthese amounts resulted in a benefitcharge to earnings of $0.29.2 million recorded in “Net effect of swaps.”
For the three-month period ended SeptemberMarch 25, 20112012, in addition to the $15.81.3 million gain recognized in income on the ineffective portion of derivatives noted in the tabletables above, $11.20.5 million of expense representing the amortization of amounts in AOCI for the swaps and $0.60.2 million of foreign currency lossgain in the quarter related to the U.S. dollar denominated Canadian term loan were recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings of $4.0 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the nine-month periods ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Nine months ended | | Nine months ended | | | | Nine months ended | | Nine months ended | | | | Nine months ended | | Nine months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | Interest rate swaps | | $ | (2,308 | ) | | $ | (36,788 | ) | | Interest Expense | | $ | (9,004 | ) | | $ | — |
| | Net effect of swaps | | $ | — |
| | $ | 43,190 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Nine months ended | | Nine months ended | | | | 9/30/12 | | 9/25/11 | Interest rate swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (3,342 | ) | Cross-currency swaps (2) | | Net effect of swaps | | (4,999 | ) | | 15,582 |
| Foreign currency swaps | | Net effect of swaps | | 6,278 |
| | (17,516 | ) | | | | | $ | 1,279 |
| | $ | (5,276 | ) | | | | | | | |
| | (1) | The September 2010 swaps became ineffective and were de-designated in February 2011. |
| | (2) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
For the nine-month period ended September 30, 2012, in addition to the $1.3 million of net gain recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.2 million of expense representing the regular amortization of amounts in AOCI for the swaps and $0.2 million of foreign currency gain in the period related to the U.S. dollar denominated Canadian term loan were recorded in the condensed consolidated statements of operations for the period. The net effect of these amounts resulted in a benefit to earnings for the period of $1.3 million recorded in “Net effect of swaps.”
For the nine-month period ended September 25, 2011, in addition to the $37.9 million gain recognized in income on the ineffective portion of derivatives noted in the table above, $33.9 million of expense representing the amortization of amounts in AOCI for the swaps and $0.5 million of foreign currency loss in the period related to the U.S. dollar denominated Canadian term loan were recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings of $3.51.0 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the twelve-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | Interest rate swaps | | $ | (873 | ) | | $ | (26,329 | ) | | Interest Expense | | $ | (12,027 | ) | | $ | — |
| | Net effect of swaps | | $ | 4,797 |
| | $ | 54,613 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | Interest rate swaps | | $ | 2,286 |
| | $ | (36,088 | ) | | Interest Expense | | $ | (12,031 | ) | | $ | (5,816 | ) | | Net effect of swaps | | $ | 435 |
| | $ | 33,493 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Twelve months ended | | Twelve months ended | | | | 9/30/12 | | 9/25/11 | Interest rate swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (3,342 | ) | Cross-currency swaps (2) | | Net effect of swaps | | (4,483 | ) | | 10,016 |
| Foreign currency swaps | | Net effect of swaps | | 10,129 |
| | (17,516 | ) | | | | | $ | 5,646 |
| | $ | (10,842 | ) | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Twelve months ended | | Twelve months ended | | | | 3/31/13 | | 3/25/12 | Cross-currency swaps (1) | | Net effect of swaps | | — |
| | 12,911 |
| Foreign currency swaps | | Net effect of swaps | | — |
| | (7,387 | ) | Interest rate swaps (2) | | Net effect of swaps | | $ | (1,471 | ) | | $ | — |
| | | | | $ | (1,471 | ) | | $ | 5,524 |
| | | | | | | |
| | (1) | The September 2010 swaps became ineffective and were de-designated in February 2011. |
| | (2) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
| | (2) | The May 2011 interest rate swaps were de-designated in March 2013. |
In addition to the $10.41.0 million of gainloss recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.17.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $192 thousand of income representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended March 31, 2013 in the condensed consolidated statements of operations. The net effect of these amounts resulted in expense for the trailing twelve month period of $8.7 million recorded in “Net effect of swaps.”
For the twelve month period ending March 25, 2012, in addition to the $39.0 million of gain recognized in income on the ineffective portion of derivatives noted in the tables above, $22.7 million of expense representing the amortization of amounts in AOCI for the swaps and a $0.40.3 million foreign currency gainloss in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended September 30,March 25, 2012 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings for the trailing twelve month period of $10.9 million recorded in “Net effect of swaps.” For the twelve month period ending September 25, 2011, in addition to the $43.8 million of gain recognized in income on the ineffective portion of derivatives noted in the table above, $45.5 million of expense representing the amortization of amounts in AOCI for the swaps and a $0.1 million foreign currency loss in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended September 25, 2011 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a charge to earnings for the trailing twelve month period of $1.816.0 million recorded in “Net effect of swaps.”
The amounts reclassified from AOCI into income for the periods noted above are in large partprimarily the result of the Partnership’s initial three-year requirement to swap at least 75% of its aggregate term debt to fixed rates under the terms of the Amended 2010 Credit Agreement. (7) Fair Value Measurements: The FASB Accounting Standards Codification (ASC) relating to fair value measurements emphasizes that fair value is a market-based measurement that should be determined based on assumptions (inputs) that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable, and valuation techniques used to measure fair value should maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Accordingly, the FASB’s ASC establishes a hierarchal disclosure framework that ranks the quality and reliability of information used to determine fair values. The hierarchy is associated with the level of pricing observability utilized in measuring fair value and defines three levels of inputs to the fair value measurement process—quoted prices are the most reliable valuation inputs, whereas model values that include inputs based on unobservable data are the least reliable. Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety. The three broad levels of inputs defined by the fair value hierarchy are as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The table below presents the balances of assets and liabilities measured at fair value as of September 30, 2012March 31, 2013, December 31, 2011,2012, and SeptemberMarch 25, 20112012 on a recurring basis: | | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | September 30, 2012 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| Net derivative liability | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| | | | | | | | | | December 31, 2011 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,400 | ) | | $ | — |
| | $ | (32,400 | ) | | $ | — |
| Cross-currency swap agreements (2) | | (37,617 | ) | | — |
| | (37,617 | ) | | — |
| Foreign currency swap agreements (2) | | (13,155 | ) | | — |
| | (13,155 | ) | | — |
| Net derivative liability | | $ | (83,172 | ) | | $ | — |
| | $ | (83,172 | ) | | $ | — |
| | | | | | | | | | September 25, 2011 | | | | | | | | | Interest rate swap agreements (1) | | $ | (33,835 | ) | | $ | — |
| | $ | (33,835 | ) | | $ | — |
| Interest rate swap agreements (2) | | (4,797 | ) | | — |
| | (4,797 | ) | | — |
| Cross-currency swap agreements (2) | | (37,723 | ) | | — |
| | (37,723 | ) | | — |
| Foreign currency swap agreements (2) | | (16,846 | ) | | — |
| | (16,846 | ) | | — |
| Net derivative liability | | $ | (93,201 | ) | | $ | — |
| | $ | (93,201 | ) | | $ | — |
|
| | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | March 31, 2013 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (23,388 | ) | | $ | — |
| | $ | (23,388 | ) | | $ | — |
| Interest rate swap agreements (2) | | (7,643 | ) | | — |
| | (7,643 | ) | | — |
| Net derivative liability | | $ | (31,031 | ) | | $ | — |
| | $ | (31,031 | ) | | $ | — |
| | | | | | | | | | December 31, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | March 25, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,280 | ) | | $ | — |
| | $ | (32,280 | ) | | $ | — |
| Net derivative liability | | $ | (32,280 | ) | | $ | — |
| | $ | (32,280 | ) | | $ | — |
|
| | (1) | IncludedDesignated as cash flow hedges and are included in “Derivative Liability” on the Unaudited Condensed Consolidated Balance Sheet |
| | (2) | IncludedNot designated as cash flow hedges and are included in "Current derivative liability""Derivative Liability" on the Unaudited Condensed Consolidated Balance Sheet |
Fair values of the interest rate cross-currency and foreign currency swap agreements are determined using significant inputs, including the LIBOR and foreign currency forward curves, that are considered Level 2 observable market inputs. In addition, the Partnership considered the effect of its credit and non-performance risk on the fair values provided, and recognized an adjustment decreasing the net derivative liability by approximately $1.10.9 million as of September 30, 2012March 31, 2013. There were no assets measured at fair value on a non-recurring basis at September 30, 2012March 31, 2013, December 31, 2011, or SeptemberMarch 25, 20112012, except for as described below. At the end of the third quarter in 2012, the Partnership concluded based on operating results, as well as updated forecasts, and changes in market conditions, that a review of the carrying value of long-lived assets at Wildwater Kingdom was warranted. After performing its review, the Partnership determined that a portion of the park's fixed assets were impaired. Based on Level 3 unobservable valuation assumptions and other market inputs, the assets were marked to a fair value of $19.8 million, resulting in an impairment charge of $25.0 million during the quarter. In 2010, the Partnership concluded based on operating results, as well as updated forecasts, that a review of the carrying value of long-lived assets at California's Great America was warranted. After performing its review, the Partnership determined that a portion of the park's fixed assets, the majority of which were originally recorded with the PPI acquisition, were impaired. As a result, it recognized $62.0 million of fixed-asset impairment during the fourth quarter of 2010.
After completing its 2010 annual review of indefinite-lived intangibles for impairment, the Partnership concluded that a portion of trade-names originally recorded with the PPI acquisition were impaired. As a result, the Partnership recognized approximately $0.9 million of trade-name impairment during the fourth quarter of 2010. A relief-from-royalty model is used to determine whether the fair value of trade-names exceeds their carrying amount. The fair value of the trade-names is determined as the present value of fees avoided by owning the respective trade-name.
The fair value of term debt at September 30, 2012March 31, 2013 was approximately $1,125.7637.1 million based on borrowing rates currently available to the Partnership on long-term debt with similar terms and average maturities. The fair value of the Partnership's notes at September 30, 2012March 31, 2013 was approximately $352.6950.1 million based on borrowing rates availablepublic trading levels as of that date to the Partnership on notes with similar terms and maturities.date. The fair value of the term debt was based on Level 2 inputs and the notes were based on Level 21 inputs.
(8) Earnings per Unit: Net income (loss) per limited partner unit is calculated based on the following unit amounts: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,611 |
| | 55,346 |
| | 55,473 |
| | 55,345 |
| | 55,440 |
| | 55,342 |
| Effect of dilutive units: | | | | | | | | | | | | | Unit options and restricted unit awards | | 45 |
| | — |
| | 42 |
| | — |
| | 31 |
| | — |
| Phantom units | | 336 |
| | 482 |
| | 333 |
| | 502 |
| | 416 |
| | 544 |
| Diluted weighted average units outstanding | | 55,992 |
| | 55,828 |
| | 55,848 |
| | 55,847 |
| | 55,887 |
| | 55,886 |
| Net income (loss) per unit - basic | | $ | 2.53 |
| | $ | 2.75 |
| | $ | 2.01 |
| | $ | 1.29 |
| | $ | 2.00 |
| | $ | 0.15 |
| Net income (loss) per unit - diluted | | $ | 2.51 |
| | $ | 2.73 |
| | $ | 2.00 |
| | $ | 1.28 |
| | $ | 1.98 |
| | $ | 0.15 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Three months ended | | Twelve months ended | | | 3/31/2013 | | 3/25/2012 | | 3/31/2013 | | 3/25/2012 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,854 |
| | 55,378 |
| | 55,694 |
| | 55,353 |
| Effect of dilutive units: | | | | | | | | | Unit options and restricted unit awards | | — |
| | — |
| | 63 |
| | 2 |
| Phantom units | | — |
| | — |
| | 299 |
| | 492 |
| Diluted weighted average units outstanding | | 55,854 |
| | 55,378 |
| | 56,056 |
| | 55,847 |
| Net income (loss) per unit - basic | | $ | (1.95 | ) | | $ | (1.18 | ) | | $ | 1.04 |
| | $ | 1.53 |
| Net income (loss) per unit - diluted | | $ | (1.95 | ) | | $ | (1.18 | ) | | $ | 1.04 |
| | $ | 1.52 |
| | | | | | | | | |
The effect of unit options on the three nine and twelve months ended September 30,March 31, 2013, had they not been out of the money or antidilutive, would have been zero and 16,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three and twelve months ended March 25, 2012, had they not been out of the money or antidilutive, would have been 66,0002,000, 34,000and 36,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three, nine and twelve months ended September 25, 2011, had they not been out of the money or antidilutive, would have been 57,000, 67,000 and 127,00047,000 units, respectively. (9) Income and Partnership Taxes: Under the applicable accounting rules, income taxes are recognized for the amount of taxes payable by the Partnership’s corporate subsidiaries for the current year and for the impact of deferred tax assets and liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. The income tax provision (benefit) for interim periods is determined by applying an estimated annual effective tax rate to the quarterly income (loss) of the Partnership’s corporate subsidiaries. For 2012, the estimated annual effective rate includes the effect of an anticipated adjustment to the valuation allowance that relates to foreign tax credit carry-forwards arising from the corporate subsidiaries. The amount of this adjustment has a disproportionate impact on the annual effective tax rate that results in a significant variation in the customary relationship between the provision for taxes and income before taxes in interim periods. In addition to income taxes on its corporate subsidiaries, the Partnership pays a publicly traded partnership tax (PTP tax) on partnership-level gross income (net revenues less cost of food, merchandise and games). As such, the Partnership’s total provision (benefit) for taxes includes amounts for both the PTP tax and for income taxes on its corporate subsidiaries. During the second quarterAs of 2012 the Partnership adjusted its deferred tax assets and liabilities to reflect the impact of changes to the enacted statutory tax rates in Canada and recorded a corresponding $1.8 million income tax provision. During the first quarter of 20122013 the Partnership accruedhas recorded $1.01.1 million forof unrecognized tax benefits including interest and/or penalties related to state and local tax filing positions. The Partnership recognizes interest and/or penalties related to unrecognized tax benefits in the income tax provision. The Partnership does not anticipate that the balance of the unrecognized tax benefit will change significantly over the next 12 months.
(10) Contingencies:
The Partnership is a party to a number of lawsuits arising in the normal course of business. In the opinion of management, none of these matters is expected to have a material effect in the aggregate on the Partnership's financial statements.
(11) Immaterial Restatement:
We have made two separate corrections relating to our use of the composite depreciation method.
The Partnership usesfirst correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the 3 and 12 month periods ended March 25, 2012, related to a misapplication of the composite depreciation method for the group of assets acquired as a whole in 1983, as well as for groups of assets in each subsequent business acquisition.method. Upon the normal retirement of an asset within a composite group, the Partnership'sour practice generally hashad been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of the Partnership'sour financial statements for the three months ended July 1,in 2012, management determined that this methodology was not appropriate. As a result, the Partnershipwe revised the useful lives of itsour composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation). Management evaluated
The second correction, which impacts the amountBalance Sheet at March 25, 2012 and naturethe Statement of these adjustmentsOperations and concludedOther Comprehensive Income for the 12 month period ended March 25, 2012, reflects a subsequent determination that they werea disposition from our composite group of assets was considered to be unusual. In certain situations under the composite method, disposals are considered unusual and, accordingly, losses are not materialincluded in the composite depreciation pool but are rather charged immediately to eitherexpense. In 2013, the Partnership's prior annual or quarterly financial statements. Nonetheless,initial determination of whether a specific asset retired under the historical financial statement amounts includedcomposite method of depreciation in this filing have been corrected for this error. The Partnership expects to likewise correct previously presented2011 was normal was reviewed in connection with responding
historical financial statements to an open SEC comment letter. We ultimately concluded that such disposition was unusual and that a $8.8 millioncharge should be included in future filings, including the annual financial statements to be includedreflected in the Partnership's Annual Report on Form 10-K for the year ending December 31, 2012.2011 financial statements.
The tables below detailreflect the effectsimpact on the financial statements of such depreciation adjustments (including the related deferred income tax impact)corrections as described above. The "As originally filed" amounts represent amounts as filed in the Partnership's 1st quarter 2012 Form 10-Q . The "As restated" amounts in all columns represent amounts after restatement for the first correction which was disclosed in the Partnership's 2nd quarter Form 10-Q and the second correction which was disclosed in the Partnership's 2012 Annual Report on previously presented historical financial statement amounts:Form 10-K/A filed on May 10, 2013.
| | | | | | | | | Balance Sheets | | | | | 12/31/2011 | | 9/25/2011 | Accumulated depreciation | | | | As originally filed | $ | (1,044,589 | ) | | $ | (1,044,353 | ) | Correction | (18,599 | ) | | (18,252 | ) | As restated | $ | (1,063,188 | ) | | $ | (1,062,605 | ) | Total assets | | | | As originally filed | $ | 2,074,557 |
| | $ | 2,159,339 |
| Correction | (18,599 | ) | | (18,252 | ) | As restated | $ | 2,055,958 |
| | $ | 2,141,087 |
| Deferred Tax Liability | | | | As originally filed | $ | 135,446 |
| | $ | 125,588 |
| Correction | (1,679 | ) | | (1,615 | ) | As restated | $ | 133,767 |
| | $ | 123,973 |
| Limited Partners' Equity | | | | As originally filed | $ | 182,438 |
| | $ | 221,611 |
| Correction | (16,920 | ) | | (16,637 | ) | As restated | $ | 165,518 |
| | $ | 204,974 |
|
| | | | | Balance Sheet | | (In thousands) | 3/25/2012 | Accumulated depreciation | | As originally filed | $ | (1,046,162 | ) | Corrections | (27,622 | ) | As restated | $ | (1,073,784 | ) | Total assets | | As originally filed | $ | 2,113,126 |
| Corrections | (27,622 | ) | As restated | $ | 2,085,504 |
| Deferred Tax Liability | | As originally filed | $ | 135,746 |
| Corrections | (5,019 | ) | As restated | $ | 130,727 |
| Limited Partners' Equity | | As originally filed | $ | 96,417 |
| Corrections | (22,603 | ) | As restated | $ | 73,814 |
|
| | | | | | | | | | | | | | Statements of Operations and Other Comprehensive Income | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/25/2011 | | 9/25/2011 | | 9/25/2011 | Depreciation and amortization | | | | | | | As originally filed | | $ | 62,619 |
| | $ | 109,173 |
| | $ | 124,345 |
| Correction | | 829 |
| | 1,684 |
| | 2,037 |
| As restated | | $ | 63,448 |
| | $ | 110,857 |
| | $ | 126,382 |
| Income (loss) before tax | | | | | | | As originally filed | | $ | 190,891 |
| | $ | 95,031 |
| | $ | (2,271 | ) | Correction | | (829 | ) | | (1,684 | ) | | (2,037 | ) | As restated | | $ | 190,062 |
| | $ | 93,347 |
| | $ | (4,308 | ) | Provision (benefit) for taxes | | | | | As originally filed | | $ | 38,161 |
| | $ | 22,327 |
| | $ | (11,808 | ) | Correction | | (317 | ) | | (554 | ) | | (616 | ) | As restated | | $ | 37,844 |
| | $ | 21,773 |
| | $ | (12,424 | ) | Net income (loss) | | | | | As originally filed | | $ | 152,730 |
| | $ | 72,704 |
| | $ | 9,537 |
| Correction | | (512 | ) | | (1,130 | ) | | (1,421 | ) | As restated | | $ | 152,218 |
| | $ | 71,574 |
| | $ | 8,116 |
| | | | | | | | Basic earnings per limited partner unit: | | | | | As originally filed | | $ | 2.76 |
| | $ | 1.31 |
| | $ | 0.17 |
| Correction | | (0.01 | ) | | (0.02 | ) | | (0.02 | ) | As restated | | $ | 2.75 |
| | $ | 1.29 |
| | $ | 0.15 |
| | | | | | | | Diluted earnings per limited partner unit: | | | | | As originally filed | | $ | 2.74 |
| | $ | 1.30 |
| | $ | 0.17 |
| Correction | | (0.01 | ) | | (0.02 | ) | | (0.02 | ) | As restated | | $ | 2.73 |
| | $ | 1.28 |
| | $ | 0.15 |
|
| | | | | | | | | | Statements of Operations and Other Comprehensive Income | (In thousands except per unit amounts) | | Three months ended | | Twelve months ended | | | 3/25/2012 | | 3/25/2012 | Depreciation and amortization | | | | | As originally filed | | $ | 3,846 |
| | $ | 123,861 |
| Corrections | | 233 |
| | 2,031 |
| As restated | | $ | 4,079 |
| | $ | 125,892 |
| Loss on impairment / retirement of fixed assets, net | | | | | As originally filed | | $ | 92 |
| | $ | 2,461 |
| Corrections | | — |
| | 8,790 |
| As restated | | $ | 92 |
| | $ | 11,251 |
| Income (loss) before tax | | | | | As originally filed | | $ | (86,721 | ) | | $ | 101,565 |
| Corrections | | (233 | ) | | (10,821 | ) | As restated | | $ | (86,954 | ) | | $ | 90,744 |
| Provision (benefit) for taxes | | | As originally filed | | $ | (21,539 | ) | | $ | 9,897 |
| Corrections | | — |
| | (3,960 | ) | As restated | | $ | (21,539 | ) | | $ | 5,937 |
| Net income (loss) | | | As originally filed | | $ | (65,182 | ) | | $ | 91,668 |
| Corrections | | (233 | ) | | (6,861 | ) | As restated | | $ | (65,415 | ) | | $ | 84,807 |
| | | | | | Basic earnings per limited partner unit: | | | As originally filed | | $ | (1.18 | ) | | $ | 1.66 |
| Corrections | | — |
| | (0.13 | ) | As restated | | $ | (1.18 | ) | | $ | 1.53 |
| | | | | | Diluted earnings per limited partner unit: | | | As originally filed | | $ | (1.18 | ) | | $ | 1.64 |
| Corrections | | — |
| | (0.12 | ) | As restated | | $ | (1.18 | ) | | $ | 1.52 |
|
(12) Changes in Accumulated Other Comprehensive Income by Component:
(12)The following tables reflect the changes in Accumulated other comprehensive income (loss) related to limited partners' equity for the period ended March 31, 2013:
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | | Gains and | | | | | | | | Losses on | | Foreign | | | | | | Cash Flow | | Currency | | | | | | Hedges | | Items | | Total | Balance at December 31, 2012 | | $ | (25,749 | ) | | $ | (2,751 | ) | | $ | (28,500 | ) | | | | | | | | | | Other comprehensive | | | | | | | | income before | | | | | | | | reclassifications | | 1,940 |
| | 301 |
| | 301 |
| | | | | | | | | | Amounts reclassified | | | | | | | | from accumulated | | | | | | | | other comprehensive | | | | | | | | income (2) | | 6,945 |
| | — |
| | 8,885 |
| | | | | | | | | Net current-period other | | | | | | | comprehensive income | | 8,885 |
| | 301 |
| | 9,186 |
| | | | | | | | | March 31, 2013 | | $ | (16,864 | ) | | $ | (2,450 | ) | | $ | (19,314 | ) |
(1) All amounts are net of tax. Amounts in parentheses indicate debits. (2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.
| | | | | | | | | | | Reclassifications Out of Accumulated Other Comprehensive Income (1) | (In thousands) | | | | | | | | Details about Accumulated Other Comprehensive Income Components | | Amount Reclassified from Accumulated Other Comprehensive Income | | Affected Line Item in the Statement Where Net Income is Presented | Gains and losses on cash flow hedges | | | | | | | Interest rate contracts | | $ | 8,174 |
| | | Net effect of swaps | | | | $ | 8,174 |
| | | Total before tax | | | | (1,229 | ) | | | Provision (benefit) for taxes | | | | $ | 6,945 |
| | | Net of tax |
(1) Amounts in parentheses indicate debits.
(13) Consolidating Financial Information of Guarantors and Issuers:
Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), and Magnum Management Corporation ("Magnum") are the co-issuers of the Partnership's 9.125% notes and the 5.25% notes (see Note 5). The notes have been fully and unconditionally guaranteed, on a joint and several basis, by each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum) that guarantees the Partnership's senior secured credit facilities. There are no non-guarantor subsidiaries.
The following consolidating schedules present condensed financial information for Cedar Fair, L.P., Cedar Canada, and Magnum, the co-issuers, and each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum), the guarantors (on a combined basis), as of September 30, 2012March 31, 2013, December 31, 2011,2012, and SeptemberMarch 25, 20112012 and for the three nine and twelve month periods ended
September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, we have included the accompanying condensed consolidating financial statements.
Since Cedar Fair, L.P., Cedar Canada and Magnum are co-issuers of the notes and co-borrowers under the Amended 20102013 Credit Agreement, all outstanding debt has been equally reflected within each co-issuer's September 30, 2012March 31, 2013, December 31, 20112012 and SeptemberMarch 25, 20112012 balance sheets in the accompanying condensed consolidating financial statements.
The consolidating financial information has been corrected for the information described in Note 11.12.
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
September 30, 2012
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| Receivables | | 3 |
| | 108,211 |
| | 64,153 |
| | 478,372 |
| | (621,382 | ) | | 29,357 |
| Inventories | | — |
| | 1,584 |
| | 2,742 |
| | 29,267 |
| | — |
| | 33,593 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Income tax refundable | | — |
| | — |
| | 10,454 |
| | — |
| | — |
| | 10,454 |
| Other current assets | | 929 |
| | 2,065 |
| | 674 |
| | 3,775 |
| | — |
| | 7,443 |
| | | 43,932 |
| | 120,362 |
| | 119,073 |
| | 525,309 |
| | (621,382 | ) | | 187,294 |
| Property and Equipment (net) | | 425,747 |
| | 1,025 |
| | 272,951 |
| | 864,121 |
| | — |
| | 1,563,844 |
| Investment in Park | | 577,612 |
| | 791,617 |
| | 118,514 |
| | 63,384 |
| | (1,551,127 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 127,384 |
| | 111,218 |
| | — |
| | 247,663 |
| Other Intangibles, net | | — |
| | — |
| | 18,039 |
| | 22,826 |
| | — |
| | 40,865 |
| Deferred Tax Asset | | — |
| | 39,320 |
| | — |
| | — |
| | (39,320 | ) | | — |
| Intercompany Receivable | | 877,208 |
| | 1,069,721 |
| | 1,116,623 |
| | — |
| | (3,063,552 | ) | | — |
| Other Assets | | 23,361 |
| | 15,580 |
| | 8,925 |
| | 2,305 |
| | — |
| | 50,171 |
| | | $ | 1,956,921 |
| | $ | 2,037,625 |
| | $ | 1,781,509 |
| | $ | 1,589,163 |
| | $ | (5,275,381 | ) | | $ | 2,089,837 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 210,936 |
| | $ | 116,160 |
| | $ | 29,248 |
| | $ | 287,634 |
| | $ | (621,382 | ) | | $ | 22,596 |
| Deferred revenue | | — |
| | — |
| | 4,544 |
| | 30,138 |
| | — |
| | 34,682 |
| Accrued interest | | 735 |
| | 195 |
| | 6,082 |
| | — |
| | — |
| | 7,012 |
| Accrued taxes | | 5,818 |
| | 42,090 |
| | — |
| | 4,496 |
| | — |
| | 52,404 |
| Accrued salaries, wages and benefits | | — |
| | 24,864 |
| | 2,365 |
| | 8,990 |
| | — |
| | 36,219 |
| Self-insurance reserves | | — |
| | 4,751 |
| | 1,698 |
| | 16,643 |
| | — |
| | 23,092 |
| Other accrued liabilities | | 824 |
| | 4,097 |
| | 2,417 |
| | 3,505 |
| | — |
| | 10,843 |
| | | 218,313 |
| | 192,157 |
| | 46,354 |
| | 351,406 |
| | (621,382 | ) | | 186,848 |
| Deferred Tax Liability | | — |
| | — |
| | 59,462 |
| | 122,952 |
| | (39,320 | ) | | 143,094 |
| Derivative Liability | | 20,801 |
| | 13,907 |
| | — |
| | — |
| | — |
| | 34,708 |
| Other Liabilities | | — |
| | 3,880 |
| | — |
| | 3,500 |
| | — |
| | 7,380 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,131,100 |
| | 1,131,100 |
| | 1,131,100 |
| | — |
| | (2,262,200 | ) | | 1,131,100 |
| Notes | | 400,676 |
| | 400,676 |
| | 400,676 |
| | — |
| | (801,352 | ) | | 400,676 |
| | | 1,531,776 |
| | 1,531,776 |
| | 1,531,776 |
| | — |
| | (3,063,552 | ) | | 1,531,776 |
| | | | | | | | | | | | | | Equity | | 186,031 |
| | 295,905 |
| | 143,917 |
| | 1,111,305 |
| | (1,551,127 | ) | | 186,031 |
| | | $ | 1,956,921 |
| | $ | 2,037,625 |
| | $ | 1,781,509 |
| | $ | 1,589,163 |
| | $ | (5,275,381 | ) | | $ | 2,089,837 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2011
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 512 |
| | $ | 31,540 |
| | $ | 3,472 |
| | $ | — |
| | $ | 35,524 |
| Receivables | | — |
| | 62,408 |
| | 69,285 |
| | 412,095 |
| | (536,177 | ) | | 7,611 |
| Inventories | | — |
| | 1,547 |
| | 2,703 |
| | 28,819 |
| | — |
| | 33,069 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Other current assets | | 508 |
| | 13,461 |
| | 1,027 |
| | 7,822 |
| | (10,852 | ) | | 11,966 |
| | | 508 |
| | 84,167 |
| | 105,327 |
| | 455,542 |
| | (547,029 | ) | | 98,515 |
| Property and Equipment (net) | | 455,579 |
| | 1,044 |
| | 266,111 |
| | 896,758 |
| | — |
| | 1,619,492 |
| Investment in Park | | 518,819 |
| | 661,251 |
| | 118,385 |
| | 40,481 |
| | (1,338,936 | ) | | — |
| Intercompany Note Receivable | | — |
| | 93,845 |
| | — |
| | — |
| | (93,845 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 123,210 |
| | 111,219 |
| | — |
| | 243,490 |
| Other Intangibles, net | | — |
| | — |
| | 17,448 |
| | 22,825 |
| | — |
| | 40,273 |
| Deferred Tax Asset | | — |
| | 47,646 |
| | — |
| | — |
| | (47,646 | ) | | — |
| Intercompany Receivable | | 887,344 |
| | 1,084,112 |
| | 1,141,302 |
| | — |
| | (3,112,758 | ) | | — |
| Other Assets | | 27,641 |
| | 16,158 |
| | 9,353 |
| | 1,036 |
| | — |
| | 54,188 |
| | | $ | 1,898,952 |
| | $ | 1,988,223 |
| | $ | 1,781,136 |
| | $ | 1,527,861 |
| | $ | (5,140,214 | ) | | $ | 2,055,958 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 15,921 |
| | $ | 15,921 |
| | $ | 15,921 |
| | $ | — |
| | $ | (31,842 | ) | | $ | 15,921 |
| Accounts payable | | 175,968 |
| | 144,868 |
| | 25,631 |
| | 202,566 |
| | (536,177 | ) | | 12,856 |
| Deferred revenue | | — |
| | — |
| | 2,891 |
| | 26,703 |
| | — |
| | 29,594 |
| Accrued interest | | 198 |
| | 131 |
| | 15,433 |
| | — |
| | — |
| | 15,762 |
| Accrued taxes | | 3,909 |
| | — |
| | 7,374 |
| | 15,577 |
| | (10,852 | ) | | 16,008 |
| Accrued salaries, wages and benefits | | — |
| | 26,916 |
| | 1,076 |
| | 5,396 |
| | — |
| | 33,388 |
| Self-insurance reserves | | — |
| | 3,977 |
| | 1,711 |
| | 15,555 |
| | — |
| | 21,243 |
| Current derivative liability | | — |
| | — |
| | 50,772 |
| | — |
| | — |
| | 50,772 |
| Other accrued liabilities | | 1,247 |
| | 5,568 |
| | 252 |
| | 832 |
| | — |
| | 7,899 |
| | | 197,243 |
| | 197,381 |
| | 121,061 |
| | 266,629 |
| | (578,871 | ) | | 203,443 |
| Deferred Tax Liability | | — |
| | — |
| | 58,463 |
| | 122,950 |
| | (47,646 | ) | | 133,767 |
| Derivative Liability | | 19,451 |
| | 12,949 |
| | — |
| | — |
| | — |
| | 32,400 |
| Other Liabilities | | — |
| | 4,090 |
| | — |
| | — |
| | — |
| | 4,090 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 93,845 |
| | (93,845 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,140,179 |
| | 1,140,179 |
| | 1,140,179 |
| | — |
| | (2,280,358 | ) | | 1,140,179 |
| Notes | | 400,279 |
| | 400,279 |
| | 400,279 |
| | — |
| | (800,558 | ) | | 400,279 |
| | | 1,540,458 |
| | 1,540,458 |
| | 1,540,458 |
| | — |
| | (3,080,916 | ) | | 1,540,458 |
| | | | | | | | | | | | | | Equity | | 141,800 |
| | 233,345 |
| | 61,154 |
| | 1,044,437 |
| | (1,338,936 | ) | | 141,800 |
| | | $ | 1,898,952 |
| | $ | 1,988,223 |
| | $ | 1,781,136 |
| | $ | 1,527,861 |
| | $ | (5,140,214 | ) | | $ | 2,055,958 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING BALANCE SHEET September 25, 2011March 31, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| Receivables | | 3 |
| | 45,663 |
| | 81,773 |
| | 587,910 |
| | (676,810 | ) | | 38,539 |
| Inventories | | — |
| | 1,684 |
| | 2,951 |
| | 32,311 |
| | — |
| | 36,946 |
| Current deferred tax asset | | — |
| | 1,686 |
| | 779 |
| | 3,409 |
| | — |
| | 5,874 |
| Other current assets | | 875 |
| | 2,091 |
| | 774 |
| | 5,559 |
| | — |
| | 9,299 |
| | | 49,878 |
| | 53,613 |
| | 122,750 |
| | 637,539 |
| | (676,810 | ) | | 186,970 |
| Property and Equipment (net) | | 455,663 |
| | 1,055 |
| | 257,802 |
| | 900,759 |
| | — |
| | 1,615,279 |
| Investment in Park | | 534,400 |
| | 681,893 |
| | 118,514 |
| | 53,988 |
| | (1,388,795 | ) | | — |
| Intercompany Note Receivable | | — |
| | 269,500 |
| | — |
| | — |
| | (269,500 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 121,869 |
| | 111,219 |
| | — |
| | 242,149 |
| Other Intangibles, net | | — |
| | — |
| | 17,258 |
| | 22,809 |
| | — |
| | 40,067 |
| Deferred Tax Asset | | — |
| | 49,845 |
| | — |
| | — |
| | (49,845 | ) | | — |
| Intercompany Receivable | | 887,219 |
| | 1,083,987 |
| | 1,141,302 |
| | — |
| | (3,112,508 | ) | | — |
| Other Assets | | 28,962 |
| | 16,884 |
| | 9,616 |
| | 1,160 |
| | — |
| | 56,622 |
| | | $ | 1,965,183 |
| | $ | 2,156,777 |
| | $ | 1,789,111 |
| | $ | 1,727,474 |
| | $ | (5,497,458 | ) | | $ | 2,141,087 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 189,887 |
| | $ | 281,605 |
| | $ | 27,488 |
| | $ | 206,288 |
| | $ | (676,810 | ) | | $ | 28,458 |
| Deferred revenue | | — |
| | — |
| | 3,701 |
| | 28,993 |
| | — |
| | 32,694 |
| Accrued interest | | 6,115 |
| | 1,364 |
| | 6,489 |
| | — |
| | — |
| | 13,968 |
| Accrued taxes | | 5,189 |
| | 23,550 |
| | — |
| | 4,354 |
| | — |
| | 33,093 |
| Accrued salaries, wages and benefits | | — |
| | 29,373 |
| | 2,341 |
| | 9,395 |
| | — |
| | 41,109 |
| Self-insurance reserves | | — |
| | 3,130 |
| | 1,658 |
| | 17,154 |
| | — |
| | 21,942 |
| Current derivative liability | | 4,797 |
| | — |
| | 54,569 |
| | — |
| | — |
| | 59,366 |
| Other accrued liabilities | | 1,206 |
| | 4,840 |
| | 1,277 |
| | 4,924 |
| | — |
| | 12,247 |
| | | 207,194 |
| | 343,862 |
| | 97,523 |
| | 271,108 |
| | (676,810 | ) | | 242,877 |
| Deferred Tax Liability | | — |
| | — |
| | 61,405 |
| | 112,413 |
| | (49,845 | ) | | 123,973 |
| Derivative Liability | | 20,459 |
| | 13,376 |
| | — |
| | — |
| | — |
| | 33,835 |
| Other Liabilities | | — |
| | 2,872 |
| | — |
| | — |
| | — |
| | 2,872 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 269,500 |
| | (269,500 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,156,100 |
| | 1,156,100 |
| | 1,156,100 |
| | — |
| | (2,312,200 | ) | | 1,156,100 |
| Notes | | 400,154 |
| | 400,154 |
| | 400,154 |
| | — |
| | (800,308 | ) | | 400,154 |
| | | 1,556,254 |
| | 1,556,254 |
| | 1,556,254 |
| | — |
| | (3,112,508 | ) | | 1,556,254 |
| | | | | | | | | | | | | | Equity | | 181,276 |
| | 240,413 |
| | 73,929 |
| | 1,074,453 |
| | (1,388,795 | ) | | 181,276 |
| | | $ | 1,965,183 |
| | $ | 2,156,777 |
| | $ | 1,789,111 |
| | $ | 1,727,474 |
| | $ | (5,497,458 | ) | | $ | 2,141,087 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| Receivables | | 682 |
| | 79,472 |
| | 67,302 |
| | 436,595 |
| | (570,709 | ) | | 13,342 |
| Inventories | | — |
| | 3,645 |
| | 3,032 |
| | 32,386 |
| | — |
| | 39,063 |
| Current deferred tax asset | | — |
| | 31,543 |
| | 816 |
| | 3,663 |
| | — |
| | 36,022 |
| Other current assets | | 207 |
| | 9,630 |
| | 1,618 |
| | 16,260 |
| | — |
| | 27,715 |
| | | 889 |
| | 125,022 |
| | 76,893 |
| | 494,085 |
| | (570,709 | ) | | 126,180 |
| Property and Equipment (net) | | 457,484 |
| | 1,003 |
| | 262,941 |
| | 849,424 |
| | — |
| | 1,570,852 |
| Investment in Park | | 419,501 |
| | 714,013 |
| | 115,401 |
| | 21,689 |
| | (1,270,604 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 123,374 |
| | 111,218 |
| | — |
| | 243,653 |
| Other Intangibles, net | | — |
| | — |
| | 17,470 |
| | 22,853 |
| | — |
| | 40,323 |
| Deferred Tax Asset | | — |
| | 34,890 |
| | — |
| | 90 |
| | (34,980 | ) | | — |
| Intercompany Receivable | | 877,336 |
| | 1,165,652 |
| | 1,211,522 |
| | — |
| | (3,254,510 | ) | | — |
| Other Assets | | 14,581 |
| | 10,291 |
| | 7,473 |
| | 2,303 |
| | — |
| | 34,648 |
| | | $ | 1,778,852 |
| | $ | 2,050,871 |
| | $ | 1,815,074 |
| | $ | 1,501,662 |
| | $ | (5,130,803 | ) | | $ | 2,015,656 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 103,654 |
| | 215,425 |
| | 3,891 |
| | 285,182 |
| | (570,709 | ) | | 37,443 |
| Deferred revenue | | — |
| | — |
| | 6,679 |
| | 59,505 |
| | — |
| | 66,184 |
| Accrued interest | | 1,444 |
| | 916 |
| | 5,979 |
| | — |
| | — |
| | 8,339 |
| Accrued taxes | | 4,790 |
| | 390 |
| | 331 |
| | 3,489 |
| | — |
| | 9,000 |
| Accrued salaries, wages and benefits | | — |
| | 13,483 |
| | 1,095 |
| | 5,604 |
| | — |
| | 20,182 |
| Self-insurance reserves | | — |
| | 5,324 |
| | 1,696 |
| | 16,537 |
| | — |
| | 23,557 |
| Other accrued liabilities | | 589 |
| | 5,161 |
| | 133 |
| | 1,984 |
| | — |
| | 7,867 |
| | | 116,777 |
| | 246,999 |
| | 26,104 |
| | 372,301 |
| | (583,309 | ) | | 178,872 |
| Deferred Tax Liability | | — |
| | — |
| | 62,700 |
| | 126,867 |
| | (34,980 | ) | | 154,587 |
| Derivative Liability | | 18,594 |
| | 12,437 |
| | — |
| | — |
| | — |
| | 31,031 |
| Other Liabilities | | — |
| | 4,185 |
| | — |
| | 3,500 |
| | — |
| | 7,685 |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 96,000 |
| | 96,000 |
| | 96,000 |
| | — |
| | (192,000 | ) | | 96,000 |
| Term debt | | 623,700 |
| | 623,700 |
| | 623,700 |
| | — |
| | (1,247,400 | ) | | 623,700 |
| Notes | | 901,255 |
| | 901,255 |
| | 901,255 |
| | — |
| | (1,802,510 | ) | | 901,255 |
| | | 1,620,955 |
| | 1,620,955 |
| | 1,620,955 |
| | — |
| | (3,241,910 | ) | | 1,620,955 |
| | | | | | | | | | | | | | Equity | | 22,526 |
| | 166,295 |
| | 105,315 |
| | 998,994 |
| | (1,270,604 | ) | | 22,526 |
| | | $ | 1,778,852 |
| | $ | 2,050,871 |
| | $ | 1,815,074 |
| | $ | 1,501,662 |
| | $ | (5,130,803 | ) | | $ | 2,015,656 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOMEBALANCE SHEET For the Three Months Ended September 30,December 31, 2012 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 79,663 |
| | $ | 141,134 |
| | $ | 88,334 |
| | $ | 464,902 |
| | $ | (220,588 | ) | | $ | 553,445 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,447 |
| | 40,906 |
| | — |
| | 47,353 |
| Operating expenses | | 1,368 |
| | 74,191 |
| | 18,736 |
| | 289,604 |
| | (220,588 | ) | | 163,311 |
| Selling, general and administrative | | 1,853 |
| | 32,627 |
| | 4,822 |
| | 13,691 |
| | — |
| | 52,993 |
| Depreciation and amortization | | 19,209 |
| | 10 |
| | 9,430 |
| | 32,098 |
| | — |
| | 60,747 |
| Loss on impairment / retirement of fixed assets, net | | 25,000 |
| | — |
| | — |
| | — |
| | — |
| | 25,000 |
| | | 47,430 |
| | 106,828 |
| | 39,435 |
| | 376,299 |
| | (220,588 | ) | | 349,404 |
| Operating income | | 32,233 |
| | 34,306 |
| | 48,899 |
| | 88,603 |
| | — |
| | 204,041 |
| Interest expense (income), net | | 12,213 |
| | 7,258 |
| | 9,897 |
| | (2,518 | ) | | — |
| | 26,850 |
| Net effect of swaps | | (104 | ) | | (71 | ) | | — |
| | — |
| | — |
| | (175 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (15,035 | ) | | — |
| | — |
| | (15,035 | ) | Other (income) expense | | 186 |
| | (2,043 | ) | | 512 |
| | 1,345 |
| | — |
| | — |
| Income from investment in affiliates | | (125,311 | ) | | (79,600 | ) | | (11,138 | ) | | (45,137 | ) | | 261,186 |
| | — |
| Income before taxes | | 145,249 |
| | 108,762 |
| | 64,663 |
| | 134,913 |
| | (261,186 | ) | | 192,401 |
| Provision for taxes | | 4,561 |
| | 9,777 |
| | 17,181 |
| | 20,194 |
| | — |
| | 51,713 |
| Net income | | $ | 140,688 |
| | $ | 98,985 |
| | $ | 47,482 |
| | $ | 114,719 |
| | $ | (261,186 | ) | | $ | 140,688 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (563 | ) | | — |
| | (563 | ) | | — |
| | 563 |
| | (563 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (234 | ) | | 48 |
| | — |
| | — |
| | (48 | ) | | (234 | ) | Other comprehensive income (loss), (net of tax) | | (797 | ) | | 48 |
| | (563 | ) | | — |
| | 515 |
| | (797 | ) | Total Comprehensive Income | | $ | 139,891 |
| | $ | 99,033 |
| | $ | 46,919 |
| | $ | 114,719 |
| | $ | (260,671 | ) | | $ | 139,891 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 25,000 |
| | $ | 444 |
| | $ | 50,173 |
| | $ | 3,213 |
| | $ | — |
| | $ | 78,830 |
| Receivables | | 4 |
| | 101,093 |
| | 71,099 |
| | 498,555 |
| | (652,559 | ) | | 18,192 |
| Inventories | | — |
| | 1,724 |
| | 2,352 |
| | 23,764 |
| | — |
| | 27,840 |
| Current deferred tax asset | | — |
| | 3,705 |
| | 816 |
| | 3,663 |
| | — |
| | 8,184 |
| Other current assets | | 563 |
| | 17,858 |
| | 530 |
| | 5,490 |
| | (16,381 | ) | | 8,060 |
| | | 25,567 |
| | 124,824 |
| | 124,970 |
| | 534,685 |
| | (668,940 | ) | | 141,106 |
| Property and Equipment (net) | | 439,506 |
| | 1,013 |
| | 268,157 |
| | 835,596 |
| | — |
| | 1,544,272 |
| Investment in Park | | 485,136 |
| | 772,183 |
| | 115,401 |
| | 53,790 |
| | (1,426,510 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 125,942 |
| | 111,218 |
| | — |
| | 246,221 |
| Other Intangibles, net | | — |
| | — |
| | 17,835 |
| | 22,817 |
| | — |
| | 40,652 |
| Deferred Tax Asset | | — |
| | 36,443 |
| | — |
| | 90 |
| | (36,533 | ) | | — |
| Intercompany Receivable | | 877,612 |
| | 1,070,125 |
| | 1,116,623 |
| | — |
| | (3,064,360 | ) | | — |
| Other Assets | | 22,048 |
| | 14,832 |
| | 8,419 |
| | 2,315 |
| | — |
| | 47,614 |
| | | $ | 1,858,930 |
| | $ | 2,019,420 |
| | $ | 1,777,347 |
| | $ | 1,560,511 |
| | $ | (5,196,343 | ) | | $ | 2,019,865 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 147,264 |
| | $ | 213,279 |
| | $ | 16,101 |
| | $ | 286,649 |
| | $ | (652,559 | ) | | $ | 10,734 |
| Deferred revenue | | — |
| | — |
| | 4,996 |
| | 34,489 |
| | — |
| | 39,485 |
| Accrued interest | | 98 |
| | 64 |
| | 15,350 |
| | — |
| | — |
| | 15,512 |
| Accrued taxes | | 4,518 |
| | — |
| | 6,239 |
| | 23,437 |
| | (16,381 | ) | | 17,813 |
| Accrued salaries, wages and benefits | | — |
| | 17,932 |
| | 1,214 |
| | 5,690 |
| | — |
| | 24,836 |
| Self-insurance reserves | | — |
| | 5,528 |
| | 1,754 |
| | 16,624 |
| | — |
| | 23,906 |
| Other accrued liabilities | | 1,110 |
| | 2,502 |
| | 140 |
| | 2,164 |
| | — |
| | 5,916 |
| | | 152,990 |
| | 239,305 |
| | 45,794 |
| | 369,053 |
| | (668,940 | ) | | 138,202 |
| Deferred Tax Liability | | — |
| | — |
| | 63,460 |
| | 126,865 |
| | (36,533 | ) | | 153,792 |
| Derivative Liability | | 19,309 |
| | 12,951 |
| | — |
| | — |
| | — |
| | 32,260 |
| Other Liabilities | | — |
| | 5,480 |
| | — |
| | 3,500 |
| | — |
| | 8,980 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,131,100 |
| | 1,131,100 |
| | 1,131,100 |
| | — |
| | (2,262,200 | ) | | 1,131,100 |
| Notes | | 401,080 |
| | 401,080 |
| | 401,080 |
| | — |
| | (802,160 | ) | | 401,080 |
| | | 1,532,180 |
| | 1,532,180 |
| | 1,532,180 |
| | — |
| | (3,064,360 | ) | | 1,532,180 |
| | | | | | | | | | | | | | Equity | | 154,451 |
| | 229,504 |
| | 135,913 |
| | 1,061,093 |
| | (1,426,510 | ) | | 154,451 |
| | | $ | 1,858,930 |
| | $ | 2,019,420 |
| | $ | 1,777,347 |
| | $ | 1,560,511 |
| | $ | (5,196,343 | ) | | $ | 2,019,865 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOMEBALANCE SHEET For the Three Months Ended March 25, 2012September 25, 2011 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 82,713 |
| | $ | 147,138 |
| | $ | 84,679 |
| | $ | 487,352 |
| | $ | (229,614 | ) | | $ | 572,268 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,659 |
| | 42,099 |
| | — |
| | 48,758 |
| Operating expenses | | 1,257 |
| | 69,119 |
| | 19,397 |
| | 301,293 |
| | (229,614 | ) | | 161,452 |
| Selling, general and administrative | | 1,297 |
| | 30,460 |
| | 5,064 |
| | 15,157 |
| | — |
| | 51,978 |
| Depreciation and amortization | | 20,354 |
| | 11 |
| | 9,564 |
| | 33,519 |
| | — |
| | 63,448 |
| Loss on impairment / retirement of fixed assets, net | | 827 |
| | — |
| | 10 |
| | 43 |
| | — |
| | 880 |
| | | 23,735 |
| | 99,590 |
| | 40,694 |
| | 392,111 |
| | (229,614 | ) | | 326,516 |
| Operating income | | 58,978 |
| | 47,548 |
| | 43,985 |
| | 95,241 |
| | — |
| | 245,752 |
| Interest expense, net | | 23,948 |
| | 3,085 |
| | 13,433 |
| | 855 |
| | — |
| | 41,321 |
| Net effect of swaps | | (4,112 | ) | | (192 | ) | | 342 |
| | — |
| | — |
| | (3,962 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 18,549 |
| | — |
| | — |
| | 18,549 |
| Other (income) expense | | (30 | ) | | (1,711 | ) | | 616 |
| | 907 |
| | — |
| | (218 | ) | Income from investment in affiliates | | (117,557 | ) | | (57,557 | ) | | (8,410 | ) | | (15,579 | ) | | 199,103 |
| | — |
| Income before taxes | | 156,729 |
| | 103,923 |
| | 19,455 |
| | 109,058 |
| | (199,103 | ) | | 190,062 |
| Provision for taxes | | 4,511 |
| | 12,445 |
| | 3,103 |
| | 17,785 |
| | — |
| | 37,844 |
| Net income | | $ | 152,218 |
| | $ | 91,478 |
| | $ | 16,352 |
| | $ | 91,273 |
| | $ | (199,103 | ) | | $ | 152,218 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,842 |
| | — |
| | 2,842 |
| | — |
| | (2,842 | ) | | 2,842 |
| Unrealized income on cash flow hedging derivatives | | (3,224 | ) | | (4,646 | ) | | 72 |
| | — |
| | 4,574 |
| | (3,224 | ) | Other comprehensive income (loss), (net of tax) | | (382 | ) | | (4,646 | ) | | 2,914 |
| | — |
| | 1,732 |
| | (382 | ) | Total Comprehensive Income | | $ | 151,836 |
| | $ | 86,832 |
| | $ | 19,266 |
| | $ | 91,273 |
| | $ | (197,371 | ) | | $ | 151,836 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
| Receivables | | — |
| | 82,892 |
| | 59,911 |
| | 370,246 |
| | (506,356 | ) | | 6,693 |
| Inventories | | — |
| | 3,321 |
| | 3,678 |
| | 37,487 |
| | — |
| | 44,486 |
| Current deferred tax asset | | — |
| | 11,014 |
| | 772 |
| | 3,334 |
| | — |
| | 15,120 |
| Other current assets | | 359 |
| | 5,907 |
| | 11,851 |
| | 12,293 |
| | — |
| | 30,410 |
| | | 359 |
| | 103,531 |
| | 76,331 |
| | 430,163 |
| | (506,356 | ) | | 104,028 |
| Property and Equipment (net) | | 464,394 |
| | 1,035 |
| | 279,255 |
| | 896,184 |
| | — |
| | 1,640,868 |
| Investment in Park | | 459,339 |
| | 661,166 |
| | 115,401 |
| | 25,758 |
| | (1,261,664 | ) | | — |
| Intercompany Note Receivable | | — |
| | 104,165 |
| | — |
| | — |
| | (104,165 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 125,528 |
| | 111,219 |
| | — |
| | 245,808 |
| Other Intangibles, net | | — |
| | — |
| | 17,776 |
| | 22,831 |
| | — |
| | 40,607 |
| Deferred Tax Asset | | — |
| | 47,646 |
| | — |
| | — |
| | (47,646 | ) | | — |
| Intercompany Receivable | | 889,442 |
| | 1,239,210 |
| | 1,294,302 |
| | — |
| | (3,422,954 | ) | | — |
| Other Assets | | 26,323 |
| | 16,288 |
| | 9,608 |
| | 1,974 |
| | — |
| | 54,193 |
| | | $ | 1,848,918 |
| | $ | 2,173,041 |
| | $ | 1,918,201 |
| | $ | 1,488,129 |
| | $ | (5,342,785 | ) | | $ | 2,085,504 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 15,921 |
| | $ | 15,921 |
| | $ | 15,921 |
| | $ | — |
| | $ | (31,842 | ) | | $ | 15,921 |
| Accounts payable | | 60,297 |
| | 232,001 |
| | 26,302 |
| | 215,968 |
| | (506,356 | ) | | 28,212 |
| Deferred revenue | | — |
| | — |
| | 5,413 |
| | 45,341 |
| | — |
| | 50,754 |
| Accrued interest | | 3,089 |
| | 1,706 |
| | 5,519 |
| | — |
| | — |
| | 10,314 |
| Accrued taxes | | 4,925 |
| | 340 |
| | 261 |
| | 3,294 |
| | — |
| | 8,820 |
| Accrued salaries, wages and benefits | | — |
| | 26,989 |
| | 781 |
| | 5,792 |
| | — |
| | 33,562 |
| Self-insurance reserves | | — |
| | 4,212 |
| | 1,716 |
| | 15,826 |
| | — |
| | 21,754 |
| Other accrued liabilities | | 462 |
| | 3,312 |
| | 226 |
| | 2,104 |
| | — |
| | 6,104 |
| | | 84,694 |
| | 284,481 |
| | 56,139 |
| | 288,325 |
| | (538,198 | ) | | 175,441 |
| Deferred Tax Liability | | — |
| | — |
| | 58,762 |
| | 119,611 |
| | (47,646 | ) | | 130,727 |
| Derivative Liability | | 19,403 |
| | 12,877 |
| | — |
| | — |
| | — |
| | 32,280 |
| Other Liabilities | | — |
| | 2,235 |
| | — |
| | — |
| | — |
| | 2,235 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 104,165 |
| | (104,165 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 155,004 |
| | 155,004 |
| | 155,004 |
| | — |
| | (310,008 | ) | | 155,004 |
| Term debt | | 1,140,179 |
| | 1,140,179 |
| | 1,140,179 |
| | — |
| | (2,280,358 | ) | | 1,140,179 |
| Notes | | 400,373 |
| | 400,373 |
| | 400,373 |
| | — |
| | (800,746 | ) | | 400,373 |
| | | 1,695,556 |
| | 1,695,556 |
| | 1,695,556 |
| | — |
| | (3,391,112 | ) | | 1,695,556 |
| | | | | | | | | | | | | | Equity | | 49,265 |
| | 177,892 |
| | 107,744 |
| | 976,028 |
| | (1,261,664 | ) | | 49,265 |
| | | $ | 1,848,918 |
| | $ | 2,173,041 |
| | $ | 1,918,201 |
| | $ | 1,488,129 |
| | $ | (5,342,785 | ) | | $ | 2,085,504 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the NineThree Months Ended September 30, 2012March 31, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 124,864 |
| | $ | 221,221 |
| | $ | 130,441 |
| | $ | 808,471 |
| | $ | (345,748 | ) | | $ | 939,249 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,988 |
| | 73,938 |
| | — |
| | 83,926 |
| Operating expenses | | 4,141 |
| | 147,211 |
| | 40,328 |
| | 534,900 |
| | (345,748 | ) | | 380,832 |
| Selling, general and administrative | | 4,841 |
| | 70,848 |
| | 9,877 |
| | 29,922 |
| | — |
| | 115,488 |
| Depreciation and amortization | | 33,436 |
| | 28 |
| | 16,415 |
| | 63,277 |
| | — |
| | 113,156 |
| Loss on impairment / retirement of fixed assets, net | | 24,221 |
| | — |
| | 9 |
| | — |
| | — |
| | 24,230 |
| | | 66,639 |
| | 218,087 |
| | 76,617 |
| | 702,037 |
| | (345,748 | ) | | 717,632 |
| Operating income | | 58,225 |
| | 3,134 |
| | 53,824 |
| | 106,434 |
| | — |
| | 221,617 |
| Interest expense (income), net | | 36,438 |
| | 21,957 |
| | 30,898 |
| | (5,422 | ) | | — |
| | 83,871 |
| Net effect of swaps | | (35 | ) | | 192 |
| | (1,475 | ) | | — |
| | — |
| | (1,318 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (13,926 | ) | | — |
| | — |
| | (13,926 | ) | Other (income) expense | | 561 |
| | (7,119 | ) | | 1,221 |
| | 5,337 |
| | — |
| | — |
| Income from investment in affiliates | | (99,035 | ) | | (72,862 | ) | | (14,505 | ) | | (38,160 | ) | | 224,562 |
| | — |
| Income before taxes | | 120,296 |
| | 60,966 |
| | 51,611 |
| | 144,679 |
| | (224,562 | ) | | 152,990 |
| Provision (benefit) for taxes | | 8,701 |
| | (3,771 | ) | | 13,525 |
| | 22,940 |
| | — |
| | 41,395 |
| Net income | | $ | 111,595 |
| | $ | 64,737 |
| | $ | 38,086 |
| | $ | 121,739 |
| | $ | (224,562 | ) | | $ | 111,595 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,251 | ) | | — |
| | (1,251 | ) | | — |
| | 1,251 |
| | (1,251 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (1,798 | ) | | (629 | ) | | 21 |
| | — |
| | 608 |
| | (1,798 | ) | Other comprehensive income (loss), (net of tax) | | (3,049 | ) | | (629 | ) | | (1,230 | ) | | — |
| | 1,859 |
| | (3,049 | ) | Total Comprehensive Income | | $ | 108,546 |
| | $ | 64,108 |
| | $ | 36,856 |
| | $ | 121,739 |
| | $ | (222,703 | ) | | $ | 108,546 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 4,317 |
| | $ | 8,371 |
| | $ | 289 |
| | $ | 41,510 |
| | $ | (12,688 | ) | | $ | 41,799 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | — |
| | 5,037 |
| | — |
| | 5,037 |
| Operating expenses | | 1,423 |
| | 21,606 |
| | 5,941 |
| | 60,375 |
| | (12,688 | ) | | 76,657 |
| Selling, general and administrative | | 1,292 |
| | 16,613 |
| | 711 |
| | 2,423 |
| | — |
| | 21,039 |
| Depreciation and amortization | | 475 |
| | 9 |
| | — |
| | 4,302 |
| | — |
| | 4,786 |
| Loss on impairment / retirement of fixed assets, net | | 36 |
| | — |
| | 478 |
| | 86 |
| | — |
| | 600 |
| | | 3,226 |
| | 38,228 |
| | 7,130 |
| | 72,223 |
| | (12,688 | ) | | 108,119 |
| Operating income (loss) | | 1,091 |
| | (29,857 | ) | | (6,841 | ) | | (30,713 | ) | | — |
| | (66,320 | ) | Interest expense (income), net | | 10,512 |
| | 7,677 |
| | 9,764 |
| | (2,230 | ) | | — |
| | 25,723 |
| Net effect of swaps | | 5,635 |
| | 3,576 |
| | — |
| | — |
| | — |
| | 9,211 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 8,958 |
| | — |
| | — |
| | 8,958 |
| Other (income) expense | | 188 |
| | (2,388 | ) | | 800 |
| | 1,400 |
| | — |
| | — |
| Loss from investment in affiliates | | 72,096 |
| | 35,640 |
| | 3,520 |
| | 21,227 |
| | (132,483 | ) | | — |
| Loss before taxes | | (108,515 | ) | | (87,143 | ) | | (30,500 | ) | | (51,110 | ) | | 132,483 |
| | (144,785 | ) | Provision (benefit) for taxes | | 611 |
| | (17,665 | ) | | (9,254 | ) | | (9,351 | ) | | — |
| | (35,659 | ) | Net loss | | $ | (109,126 | ) | | $ | (69,478 | ) | | $ | (21,246 | ) | | $ | (41,759 | ) | | $ | 132,483 |
| | $ | (109,126 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 301 |
| | — |
| | 301 |
| | — |
| | (301 | ) | | 301 |
| Unrealized income on cash flow hedging derivatives | | 8,885 |
| | 2,535 |
| | — |
| | — |
| | (2,535 | ) | | 8,885 |
| Other comprehensive income, (net of tax) | | 9,186 |
| | 2,535 |
| | 301 |
| | — |
| | (2,836 | ) | | 9,186 |
| Total Comprehensive Loss | | $ | (99,940 | ) | | $ | (66,943 | ) | | $ | (20,945 | ) | | $ | (41,759 | ) | | $ | 129,647 |
| | $ | (99,940 | ) |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the NineThree Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 118,280 |
| | $ | 210,407 |
| | $ | 115,163 |
| | $ | 768,126 |
| | $ | (328,349 | ) | | $ | 883,627 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,389 |
| | 70,592 |
| | — |
| | 79,981 |
| Operating expenses | | 4,180 |
| | 131,955 |
| | 38,959 |
| | 504,813 |
| | (328,349 | ) | | 351,558 |
| Selling, general and administrative | | 8,049 |
| | 64,226 |
| | 9,541 |
| | 28,310 |
| | — |
| | 110,126 |
| Depreciation and amortization | | 33,021 |
| | 34 |
| | 15,440 |
| | 62,362 |
| | — |
| | 110,857 |
| Loss on impairment / retirement of fixed assets, net | | 1,023 |
| | — |
| | 10 |
| | 43 |
| | — |
| | 1,076 |
| | | 46,273 |
| | 196,215 |
| | 73,339 |
| | 666,120 |
| | (328,349 | ) | | 653,598 |
| Operating income | | 72,007 |
| | 14,192 |
| | 41,824 |
| | 102,006 |
| | — |
| | 230,029 |
| Interest expense, net | | 70,822 |
| | 8,395 |
| | 39,129 |
| | 6,184 |
| | — |
| | 124,530 |
| Net effect of swaps | | (7,230 | ) | | 910 |
| | 2,813 |
| | — |
| | — |
| | (3,507 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,704 |
| | — |
| | — |
| | 14,704 |
| Other (income) expense | | 1,517 |
| | (4,712 | ) | | 2,072 |
| | 2,078 |
| | — |
| | 955 |
| (Income) loss from investment in affiliates | | (71,656 | ) | | (34,663 | ) | | (12,389 | ) | | 107 |
| | 118,601 |
| | — |
| Income (loss) before taxes | | 78,554 |
| | 44,262 |
| | (4,505 | ) | | 93,637 |
| | (118,601 | ) | | 93,347 |
| Provision (benefit) for taxes | | 6,980 |
| | 2,527 |
| | (4,446 | ) | | 16,712 |
| | — |
| | 21,773 |
| Net income (loss) | | $ | 71,574 |
| | $ | 41,735 |
| | $ | (59 | ) | | $ | 76,925 |
| | $ | (118,601 | ) | | $ | 71,574 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,354 |
| | — |
| | 2,354 |
| | — |
| | (2,354 | ) | | 2,354 |
| Unrealized income on cash flow hedging derivatives | | 2,366 |
| | (9,866 | ) | | 79 |
| | — |
| | 9,787 |
| | 2,366 |
| Other comprehensive income (loss), (net of tax) | | 4,720 |
| | (9,866 | ) | | 2,433 |
| | — |
| | 7,433 |
| | 4,720 |
| Total Comprehensive Income | | $ | 76,294 |
| | $ | 31,869 |
| | $ | 2,374 |
| | $ | 76,925 |
| | $ | (111,168 | ) | | $ | 76,294 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 1,456 |
| | $ | 2,577 |
| | $ | 266 |
| | $ | 27,932 |
| | $ | (4,033 | ) | | $ | 28,198 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | — |
| | 4,087 |
| | — |
| | 4,087 |
| Operating expenses | | 1,335 |
| | 20,436 |
| | 5,657 |
| | 47,890 |
| | (4,033 | ) | | 71,285 |
| Selling, general and administrative | | 1,332 |
| | 13,696 |
| | 760 |
| | 2,196 |
| | — |
| | 17,984 |
| Depreciation and amortization | | 696 |
| | 9 |
| | — |
| | 3,374 |
| | — |
| | 4,079 |
| Loss on impairment / retirement of fixed assets, net | | 82 |
| | — |
| | 10 |
| | — |
| | — |
| | 92 |
| | | 3,445 |
| | 34,141 |
| | 6,427 |
| | 57,547 |
| | (4,033 | ) | | 97,527 |
| Operating loss | | (1,989 | ) | | (31,564 | ) | | (6,161 | ) | | (29,615 | ) | | — |
| | (69,329 | ) | Interest expense, net | | 11,158 |
| | 6,615 |
| | 10,403 |
| | (1,389 | ) | | — |
| | 26,787 |
| Net effect of swaps | | 173 |
| | 332 |
| | (1,475 | ) | | — |
| | — |
| | (970 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (8,192 | ) | | — |
| | — |
| | (8,192 | ) | Other (income) expense | | 187 |
| | (3,035 | ) | | 197 |
| | 2,651 |
| | — |
| | — |
| Loss from investment in affiliates | | 50,491 |
| | 23,083 |
| | 3,230 |
| | 24,916 |
| | (101,720 | ) | | — |
| Loss before taxes | | (63,998 | ) | | (58,559 | ) | | (10,324 | ) | | (55,793 | ) | | 101,720 |
| | (86,954 | ) | Provision (benefit) for taxes | | 1,417 |
| | (11,672 | ) | | (2,334 | ) | | (8,950 | ) | | — |
| | (21,539 | ) | Net loss | | $ | (65,415 | ) | | $ | (46,887 | ) | | $ | (7,990 | ) | | $ | (46,843 | ) | | $ | 101,720 |
| | $ | (65,415 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,169 | ) | | — |
| | (1,169 | ) | | — |
| | 1,169 |
| | (1,169 | ) | Unrealized income on cash flow hedging derivatives | | 339 |
| | 98 |
| | 21 |
| | — |
| | (119 | ) | | 339 |
| Other comprehensive income (loss), (net of tax) | | (830 | ) | | 98 |
| | (1,148 | ) | | — |
| | 1,050 |
| | (830 | ) | Total Comprehensive Loss | | $ | (66,245 | ) | | $ | (46,789 | ) | | $ | (9,138 | ) | | $ | (46,843 | ) | | $ | 102,770 |
| | $ | (66,245 | ) |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Twelve Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 147,733 |
| | $ | 261,878 |
| | $ | 142,250 |
| | $ | 941,465 |
| | $ | (409,232 | ) | | $ | 1,084,094 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,531 |
| | 85,471 |
| | — |
| | 96,002 |
| Operating expenses | | 5,452 |
| | 180,665 |
| | 47,134 |
| | 636,106 |
| | (409,232 | ) | | 460,125 |
| Selling, general and administrative | | 6,865 |
| | 90,892 |
| | 11,650 |
| | 36,381 |
| | — |
| | 145,788 |
| Depreciation and amortization | | 37,698 |
| | 41 |
| | 18,300 |
| | 72,097 |
| | — |
| | 128,136 |
| (Gain) loss on impairment / retirement of fixed assets, net | | 24,188 |
| | — |
| | (62 | ) | | 1,593 |
| | — |
| | 25,719 |
| | | 74,203 |
| | 271,598 |
| | 87,553 |
| | 831,648 |
| | (409,232 | ) | | 855,770 |
| Operating income (loss) | | 73,530 |
| | (9,720 | ) | | 54,697 |
| | 109,817 |
| | — |
| | 228,324 |
| Interest (income) expense, net | | 50,007 |
| | 28,592 |
| | 44,583 |
| | (6,813 | ) | | — |
| | 116,369 |
| Net effect of swaps | | (5,019 | ) | | (1 | ) | | (5,910 | ) | | — |
| | — |
| | (10,930 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (18,721 | ) | | — |
| | — |
| | (18,721 | ) | Other (income) expense | | 749 |
| | (10,205 | ) | | 1,498 |
| | 7,958 |
| | — |
| | — |
| Income from investment in affiliates | | (93,080 | ) | | (55,557 | ) | | (12,698 | ) | | (24,955 | ) | | 186,290 |
| | — |
| Income before taxes | | 120,873 |
| | 27,451 |
| | 45,945 |
| | 133,627 |
| | (186,290 | ) | | 141,606 |
| Provision (benefit) for taxes | | 10,106 |
| | (29,298 | ) | | 20,942 |
| | 29,089 |
| | — |
| | 30,839 |
| Net income | | $ | 110,767 |
| | $ | 56,749 |
| | $ | 25,003 |
| | $ | 104,538 |
| | $ | (186,290 | ) | | $ | 110,767 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (2,672 | ) | | — |
| | (2,672 | ) | | — |
| | 2,672 |
| | (2,672 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (397 | ) | | (109 | ) | | 21 |
| | — |
| | 88 |
| | (397 | ) | Other comprehensive income (loss), (net of tax) | | (3,069 | ) | | (109 | ) | | (2,651 | ) | | — |
| | 2,760 |
| | (3,069 | ) | Total Comprehensive Income | | $ | 107,698 |
| | $ | 56,640 |
| | $ | 22,352 |
| | $ | 104,538 |
| | $ | (183,530 | ) | | $ | 107,698 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 148,576 |
| | $ | 263,930 |
| | $ | 140,441 |
| | $ | 941,246 |
| | $ | (412,138 | ) | | $ | 1,082,055 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,316 |
| | 85,682 |
| | — |
| | 95,998 |
| Operating expenses | | 5,468 |
| | 177,526 |
| | 48,147 |
| | 637,772 |
| | (412,138 | ) | | 456,775 |
| Selling, general and administrative | | 6,455 |
| | 89,532 |
| | 11,086 |
| | 34,293 |
| | — |
| | 141,366 |
| Depreciation and amortization | | 37,439 |
| | 40 |
| | 18,199 |
| | 71,335 |
| | — |
| | 127,013 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (6,625 | ) | Loss on impairment / retirement of fixed assets, net | | 25,089 |
| | — |
| | 474 |
| | 5,281 |
| | — |
| | 30,844 |
| | | 74,451 |
| | 267,098 |
| | 88,222 |
| | 827,738 |
| | (412,138 | ) | | 845,371 |
| Operating income (loss) | | 74,125 |
| | (3,168 | ) | | 52,219 |
| | 113,508 |
| | — |
| | 236,684 |
| Interest (income) expense, net | | 47,879 |
| | 30,390 |
| | 40,231 |
| | (9,013 | ) | | — |
| | 109,487 |
| Net effect of swaps | | 5,324 |
| | 3,365 |
| | — |
| | — |
| | — |
| | 8,689 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 8,152 |
| | — |
| | — |
| | 8,152 |
| Other (income) expense | | 750 |
| | (8,860 | ) | | 2,623 |
| | 5,487 |
| | — |
| | — |
| Income from investment in affiliates | | (68,417 | ) | | (53,593 | ) | | (14,307 | ) | | (18,503 | ) | | 154,820 |
| | — |
| Income before taxes | | 67,414 |
| | 12,749 |
| | 14,903 |
| | 135,537 |
| | (154,820 | ) | | 75,783 |
| Provision (benefit) for taxes | | 9,269 |
| | (15,849 | ) | | (3,507 | ) | | 27,725 |
| | — |
| | 17,638 |
| Net income | | $ | 58,145 |
| | $ | 28,598 |
| | $ | 18,410 |
| | $ | 107,812 |
| | $ | (154,820 | ) | | $ | 58,145 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,839 |
| | — |
| | 1,839 |
| | — |
| | (1,839 | ) | | 1,839 |
| Unrealized income on cash flow hedging derivatives | | 8,685 |
| | 2,551 |
| | — |
| | — |
| | (2,551 | ) | | 8,685 |
| Other comprehensive income (loss), (net of tax) | | 10,524 |
| | 2,551 |
| | 1,839 |
| | — |
| | (4,390 | ) | | 10,524 |
| Total Comprehensive Income | | $ | 68,669 |
| | $ | 31,149 |
| | $ | 20,249 |
| | $ | 107,812 |
| | $ | (159,210 | ) | | $ | 68,669 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Twelve Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 138,907 |
| | $ | 247,595 |
| | $ | 126,355 |
| | $ | 886,578 |
| | $ | (386,119 | ) | | $ | 1,013,316 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,850 |
| | 80,928 |
| | — |
| | 90,778 |
| Operating expenses | | 5,725 |
| | 163,754 |
| | 45,814 |
| | 597,781 |
| | (386,119 | ) | | 426,955 |
| Selling, general and administrative | | 9,755 |
| | 79,492 |
| | 11,347 |
| | 32,598 |
| | — |
| | 133,192 |
| Depreciation and amortization | | 37,168 |
| | 95 |
| | 17,188 |
| | 71,931 |
| | — |
| | 126,382 |
| Loss on impairment of goodwill and other intangibles | | — |
| | — |
| | — |
| | 903 |
| | — |
| | 903 |
| Loss on impairment / retirement of fixed assets, net | | 1,456 |
| | — |
| | 10 |
| | 62,043 |
| | — |
| | 63,509 |
| | | 54,104 |
| | 243,341 |
| | 84,209 |
| | 846,184 |
| | (386,119 | ) | | 841,719 |
| Operating income | | 84,803 |
| | 4,254 |
| | 42,146 |
| | 40,394 |
| | — |
| | 171,597 |
| Interest expense, net | | 99,205 |
| | 14,877 |
| | 52,411 |
| | 4,362 |
| | — |
| | 170,855 |
| Net effect of swaps | | (7,183 | ) | | 910 |
| | 8,045 |
| | — |
| | — |
| | 1,772 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 2,323 |
| | — |
| | — |
| | 2,323 |
| Other (income) expense | | 1,704 |
| | (5,748 | ) | | 2,852 |
| | 2,147 |
| | — |
| | 955 |
| (Income) loss from investment in affiliates | | (25,098 | ) | | 1,534 |
| | (9,116 | ) | | 2,425 |
| | 30,255 |
| | — |
| Income (loss) before taxes | | 16,175 |
| | (7,319 | ) | | (14,369 | ) | | 31,460 |
| | (30,255 | ) | | (4,308 | ) | Provision (benefit) for taxes | | 8,059 |
| | 953 |
| | (7,308 | ) | | (14,128 | ) | | — |
| | (12,424 | ) | Net income (loss) | | $ | 8,116 |
| | $ | (8,272 | ) | | $ | (7,061 | ) | | $ | 45,588 |
| | $ | (30,255 | ) | | $ | 8,116 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,704 | ) | | — |
| | (1,704 | ) | | — |
| | 1,704 |
| | (1,704 | ) | Unrealized income on cash flow hedging derivatives | | 22,916 |
| | (7,153 | ) | | 180 |
| | — |
| | 6,973 |
| | 22,916 |
| Other comprehensive income (loss), (net of tax) | | 21,212 |
| | (7,153 | ) | | (1,524 | ) | | — |
| | 8,677 |
| | 21,212 |
| Total Comprehensive Income (Loss) | | $ | 29,328 |
| | $ | (15,425 | ) | | $ | (8,585 | ) | | $ | 45,588 |
| | $ | (21,578 | ) | | $ | 29,328 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 140,548 |
| | $ | 249,988 |
| | $ | 126,375 |
| | $ | 903,046 |
| | $ | (390,156 | ) | | $ | 1,029,801 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,932 |
| | 82,100 |
| | — |
| | 92,032 |
| Operating expenses | | 5,351 |
| | 167,068 |
| | 45,805 |
| | 608,940 |
| | (390,156 | ) | | 437,008 |
| Selling, general and administrative | | 7,963 |
| | 83,355 |
| | 11,151 |
| | 35,026 |
| | — |
| | 137,495 |
| Depreciation and amortization | | 37,309 |
| | 45 |
| | 17,325 |
| | 71,213 |
| | — |
| | 125,892 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 876 |
| | — |
| | (51 | ) | | 10,426 |
| | — |
| | 11,251 |
| | | 51,499 |
| | 250,468 |
| | 84,162 |
| | 807,705 |
| | (390,156 | ) | | 803,678 |
| Operating income (loss) | | 89,049 |
| | (480 | ) | | 42,213 |
| | 95,341 |
| | — |
| | 226,123 |
| Interest expense, net | | 72,309 |
| | 19,090 |
| | 50,897 |
| | 488 |
| | — |
| | 142,784 |
| Net effect of swaps | | (10,940 | ) | | (243 | ) | | (4,793 | ) | | — |
| | — |
| | (15,976 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 8,605 |
| | — |
| | — |
| | 8,605 |
| Other (income) expense | | 716 |
| | (9,542 | ) | | 1,708 |
| | 7,084 |
| | — |
| | (34 | ) | (Income) loss from investment in affiliates | | (67,272 | ) | | (19,390 | ) | | (2,601 | ) | | 16,074 |
| | 73,189 |
| | — |
| Income (loss) before taxes | | 94,236 |
| | 9,605 |
| | (11,603 | ) | | 71,695 |
| | (73,189 | ) | | 90,744 |
| Provision (benefit) for taxes | | 9,429 |
| | (25,950 | ) | | 4,319 |
| | 18,139 |
| | — |
| | 5,937 |
| Net income (loss) | | $ | 84,807 |
| | $ | 35,555 |
| | $ | (15,922 | ) | | $ | 53,556 |
| | $ | (73,189 | ) | | $ | 84,807 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,050 |
| | — |
| | 1,050 |
| | — |
| | (1,050 | ) | | 1,050 |
| Unrealized income (loss) on cash flow hedging derivatives | | (7,958 | ) | | (9,638 | ) | | 254 |
| | — |
| | 9,384 |
| | (7,958 | ) | Other comprehensive income (loss), (net of tax) | | (6,908 | ) | | (9,638 | ) | | 1,304 |
| | — |
| | 8,334 |
| | (6,908 | ) | Total Comprehensive Income (Loss) | | $ | 77,899 |
| | $ | 25,917 |
| | $ | (14,618 | ) | | $ | 53,556 |
| | $ | (64,855 | ) | | $ | 77,899 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 208,436 |
| | $ | 48,506 |
| | $ | 9,093 |
| | $ | 155,849 |
| | $ | (145,140 | ) | | $ | 276,744 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (56,171 | ) | | (70,083 | ) | | 3,948 |
| | (22,834 | ) | | 145,140 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (29,295 | ) | | (8 | ) | | (14,426 | ) | | (32,081 | ) | | — |
| | (75,810 | ) | Net cash from (for) investing activities | | (84,293 | ) | | (70,091 | ) | | (10,478 | ) | | (54,915 | ) | | 145,140 |
| | (74,637 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Term debt payments, including early termination penalties | | (14,468 | ) | | (10,212 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Intercompany (payments) receipts | | — |
| | 93,845 |
| | — |
| | (93,845 | ) | | — |
| | — |
| Distributions (paid) received | | (66,675 | ) | | 110 |
| | — |
| | — |
| | — |
| | (66,565 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 47 |
| | — |
| | — |
| | — |
| | 47 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | Net cash from (for) financing activities | | (81,143 | ) | | 23,336 |
| | 9,230 |
| | (93,845 | ) | | — |
| | (142,422 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 893 |
| | — |
| | — |
| | 893 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase for the period | | 43,000 |
| | 1,751 |
| | 8,738 |
| | 7,089 |
| | — |
| | 60,578 |
| Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | (117,670 | ) | | $ | (49,663 | ) | | $ | (42,030 | ) | | $ | (12,767 | ) | | $ | 153,463 |
| | $ | (68,667 | ) | CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 65,636 |
| | 58,171 |
| | (2,442 | ) | | 32,098 |
| | (153,463 | ) | | — |
| Capital expenditures | | (17,866 | ) | | — |
| | (600 | ) | | (17,363 | ) | | — |
| | (35,829 | ) | Net cash from (for) investing activities | | 47,770 |
| | 58,171 |
| | (3,042 | ) | | 14,735 |
| | (153,463 | ) | | (35,829 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | $ | 96,000 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 96,000 |
| Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,763 | ) | | (8,538 | ) | | (190 | ) | | — |
| | — |
| | (23,491 | ) | Term debt payments, including early termination penalties | | (654,568 | ) | | (462,054 | ) | | (14,478 | ) | | — |
| | — |
| | (1,131,100 | ) | Distributions (paid) received | | (35,688 | ) | | 868 |
| | — |
| | — |
| | — |
| | (34,820 | ) | Exercise of limited partnership unit options | | — |
| | 28 |
| | — |
| | — |
| | — |
| | 28 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (127 | ) | | — |
| | — |
| | — |
| | (127 | ) | Net cash from (for) financing activities | | 44,900 |
| | (8,220 | ) | | (190 | ) | | — |
| | — |
| | 36,490 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (786 | ) | | — |
| | — |
| | (786 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (25,000 | ) | | 288 |
| | (46,048 | ) | | 1,968 |
| | — |
| | (68,792 | ) | Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 169,343 |
| | $ | 48,628 |
| | $ | 48,422 |
| | $ | 25,310 |
| | $ | (69,338 | ) | | $ | 222,365 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (29,986 | ) | | (39,615 | ) | | (6,353 | ) | | 6,616 |
| | 69,338 |
| | — |
| Capital expenditures | | (38,121 | ) | | — |
| | (10,510 | ) | | (24,249 | ) | | — |
| | (72,880 | ) | Net cash from (for) investing activities | | (68,107 | ) | | (39,615 | ) | | (16,863 | ) | | (17,633 | ) | | 69,338 |
| | (72,880 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net (payments) on revolving credit loans | | (23,200 | ) | | — |
| | — |
| | — |
| | — |
| | (23,200 | ) | Term debt borrowings | | 13,246 |
| | 9,358 |
| | 334 |
| | — |
| | — |
| | 22,938 |
| Term debt payments, including early termination penalties | | (13,831 | ) | | (9,763 | ) | | (306 | ) | | — |
| | — |
| | (23,900 | ) | Intercompany (payments) receipts | | — |
| | 688 |
| | — |
| | (688 | ) | | — |
| | — |
| Distributions (paid) received | | (16,668 | ) | | 64 |
| | — |
| | — |
| | — |
| | (16,604 | ) | Payment of debt issuance costs | | (11,783 | ) | | (8,332 | ) | | (375 | ) | | — |
| | — |
| | (20,490 | ) | Net cash from (for) financing activities | | (52,236 | ) | | (7,985 | ) | | (347 | ) | | (688 | ) | | — |
| | (61,256 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (1,682 | ) | | — |
| | — |
| | (1,682 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase for the period | | 49,000 |
| | 1,028 |
| | 29,530 |
| | 6,989 |
| | — |
| | 86,547 |
| Balance, beginning of period | | — |
| | 1,461 |
| | 6,943 |
| | 1,361 |
| | — |
| | 9,765 |
| Balance, end of period | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | (184,504 | ) | | $ | 10,151 |
| | $ | (37,239 | ) | | $ | (6,697 | ) | | $ | 136,357 |
| | $ | (81,932 | ) | CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 62,103 |
| | 60,369 |
| | 2,208 |
| | 11,677 |
| | (136,357 | ) | | — |
| Capital expenditures | | (8,374 | ) | | — |
| | (7,125 | ) | | (11,969 | ) | | — |
| | (27,468 | ) | Net cash from (for) investing activities | | 53,729 |
| | 60,369 |
| | (4,917 | ) | | (292 | ) | | (136,357 | ) | | (27,468 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 153,000 |
| | — |
| | 2,004 |
| | — |
| | — |
| | 155,004 |
| Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Intercompany (payments) receipts | | — |
| | (10,320 | ) | | — |
| | 10,320 |
| | — |
| | — |
| Distributions (paid) received | | (22,225 | ) | | 74 |
| | — |
| | — |
| | — |
| | (22,151 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 48 |
| | — |
| | — |
| | — |
| | 48 |
| Excess tax benefit from unit-based compensation | | — |
| | (437 | ) | | — |
| | — |
| | — |
| | (437 | ) | Net cash from (for) financing activities | | 130,775 |
| | (70,635 | ) | | 11,554 |
| | 10,320 |
| | — |
| | 82,014 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (819 | ) | | — |
| | — |
| | (819 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (115 | ) | | (31,421 | ) | | 3,331 |
| | — |
| | (28,205 | ) | Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 186,582 |
| | $ | (152,159 | ) | | $ | 12,038 |
| | $ | 318,078 |
| | $ | (91,985 | ) | | $ | 272,554 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (40,694 | ) | | (47,206 | ) | | 5,245 |
| | (9,330 | ) | | 91,985 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (33,025 | ) | | (8 | ) | | (23,050 | ) | | (37,037 | ) | | — |
| | (93,120 | ) | Net cash for investing activities | | (72,546 | ) | | (47,214 | ) | | (17,805 | ) | | (46,367 | ) | | 91,985 |
| | (91,947 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Intercompany term debt (payments) receipts | | — |
| | 269,500 |
| | — |
| | (269,500 | ) | | — |
| | — |
| Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Term debt payments, including early termination penalties | | (14,467 | ) | | (10,213 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Distributions (paid) received | | (105,569 | ) | | 261 |
| | — |
| | — |
| | — |
| | (105,308 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 53 |
| | — |
| | — |
| | — |
| | 53 |
| Payment of debt issuance costs | | — |
| | — |
| | (723 | ) | | — |
| | — |
| | (723 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | Net cash from (for) financing activities | | (120,036 | ) | | 199,147 |
| | 8,507 |
| | (269,500 | ) | | — |
| | (181,882 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 1,065 |
| | — |
| | — |
| | 1,065 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (6,000 | ) | | (226 | ) | | 3,805 |
| | 2,211 |
| | — |
| | (210 | ) | Balance, beginning of period | | 49,000 |
| | 2,489 |
| | 36,473 |
| | 8,350 |
| | — |
| | 96,312 |
| Balance, end of period | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 188,221 |
| | $ | (37,475 | ) | | $ | 16,546 |
| | $ | 135,165 |
| | $ | (4,510 | ) | | $ | 297,947 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 43,043 |
| | (49,642 | ) | | (2,479 | ) | | 4,568 |
| | 4,510 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | 14,885 |
| | — |
| | 16,058 |
| Capital expenditures | | (43,156 | ) | | (8 | ) | | (8,023 | ) | | (52,075 | ) | | — |
| | (103,262 | ) | Net cash for investing activities | | 1,060 |
| | (49,650 | ) | | (10,502 | ) | | (32,622 | ) | | 4,510 |
| | (87,204 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | $ | (57,000 | ) | | $ | — |
| | $ | (2,004 | ) | | $ | — |
| | $ | — |
| | $ | (59,004 | ) | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Intercompany term debt (payments) receipts | | — |
| | 104,165 |
| | — |
| | (104,165 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (669,035 | ) | | (472,267 | ) | | (14,798 | ) | | — |
| | — |
| | (1,156,100 | ) | Distributions (paid) received | | (102,402 | ) | | 920 |
| | — |
| | — |
| | — |
| | (101,482 | ) | Capital (contribution) infusion | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 57 |
| | — |
| | — |
| | — |
| | 57 |
| Payment of debt issuance costs | | (14,763 | ) | | (8,537 | ) | | (191 | ) | | — |
| | — |
| | (23,491 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | 1,519 |
| | — |
| | — |
| | — |
| | 1,519 |
| Net cash from (for) financing activities | | (189,281 | ) | | 87,460 |
| | (2,515 | ) | | (104,165 | ) | | — |
| | (208,501 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 477 |
| | — |
| | — |
| | 477 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | 335 |
| | 4,006 |
| | (1,622 | ) | | — |
| | 2,719 |
| Balance, beginning of period | | — |
| | 397 |
| | 119 |
| | 6,803 |
| | — |
| | 7,319 |
| Balance, end of period | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 101,376 |
| | $ | (9,652 | ) | | $ | 25,380 |
| | $ | 19,056 |
| | $ | 58,064 |
| | $ | 194,224 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 25,281 |
| | 23,147 |
| | (1,356 | ) | | 10,992 |
| | (58,064 | ) | | — |
| Capital expenditures | | (44,247 | ) | | — |
| | (13,179 | ) | | (27,488 | ) | | — |
| | (84,914 | ) | Net cash from (for) investing activities | | (18,966 | ) | | 23,147 |
| | (14,535 | ) | | (16,496 | ) | | (58,064 | ) | | (84,914 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Term debt borrowings | | 13,246 |
| | 9,358 |
| | 334 |
| | — |
| | — |
| | 22,938 |
| Intercompany term debt (payments) receipts | | — |
| | 2,063 |
| | — |
| | (2,063 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (24,211 | ) | | (17,091 | ) | | (536 | ) | | — |
| | — |
| | (41,838 | ) | Distributions (paid) received | | (30,559 | ) | | 121 |
| | — |
| | — |
| | — |
| | (30,438 | ) | Exercise of limited partnership unit options | | — |
| | 7 |
| | — |
| | — |
| | — |
| | 7 |
| Payment of debt issuance costs | | (12,886 | ) | | (9,110 | ) | | (761 | ) | | — |
| | — |
| | (22,757 | ) | Net cash from (for) financing activities | | (54,410 | ) | | (14,652 | ) | | (963 | ) | | (2,063 | ) | | — |
| | (72,088 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,611 | ) | | — |
| | — |
| | (2,611 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | 28,000 |
| | (1,157 | ) | | 7,271 |
| | 497 |
| | — |
| | 34,611 |
| Balance, beginning of period | | 21,000 |
| | 3,646 |
| | 29,202 |
| | 7,853 |
| | — |
| | 61,701 |
| Balance, end of period | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 113,654 |
| | $ | (89,658 | ) | | $ | 14,102 |
| | $ | 182,798 |
| | $ | (367 | ) | | $ | 220,529 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (16,818 | ) | | (6,588 | ) | | 1,126 |
| | 21,913 |
| | 367 |
| | — |
| Capital expenditures | | (40,662 | ) | | — |
| | (22,440 | ) | | (34,253 | ) | | — |
| | (97,355 | ) | Net cash from (for) investing activities | | (57,480 | ) | | (6,588 | ) | | (21,314 | ) | | (12,340 | ) | | 367 |
| | (97,355 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings (payments) on revolving credit loans | | 31,000 |
| | — |
| | (3,110 | ) | | — |
| | — |
| | 27,890 |
| Intercompany term debt (payments) receipts | | — |
| | 166,023 |
| | — |
| | (166,023 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (13,831 | ) | | (9,763 | ) | | (306 | ) | | — |
| | — |
| �� | (23,900 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (73,343 | ) | | 273 |
| | — |
| | — |
| | — |
| | (73,070 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Payment of debt issuance costs | | — |
| | — |
| | (723 | ) | | — |
| | — |
| | (723 | ) | Exercise of limited partnership unit options | | — |
| | 53 |
| | — |
| | — |
| | — |
| | 53 |
| Excess tax benefit from unit-based compensation | | — |
| | (437 | ) | | — |
| | — |
| | — |
| | (437 | ) | Net cash from (for) financing activities | | (56,174 | ) | | 96,149 |
| | 5,411 |
| | (166,023 | ) | | — |
| | (120,637 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,473 | ) | | — |
| | — |
| | (2,473 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (97 | ) | | (4,274 | ) | | 4,435 |
| | — |
| | 64 |
| Balance, beginning of period | | — |
| | 494 |
| | 4,393 |
| | 2,368 |
| | — |
| | 7,255 |
| Balance, end of period | | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
|
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview:
We generate our revenues primarily from sales of (1) admission to our parks, (2) food, merchandise and games inside our parks, and (3) hotel rooms, food and other attractions outside our parks. Our principal costs and expenses, which include salaries and wages, advertising, maintenance, operating supplies, utilities and insurance, are relatively fixed and do not vary significantly with attendance.
Each of our properties is run by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including the allocation of resources, on a property-by-property basis.
Aside from attendance and guest per capita statistics, discrete financial information and operating results are not prepared at the regional level, but rather at the individual park level for use by the CEO, who is the Chief Operating Decision Maker (CODM), as well as by the Chief Financial Officer, the Chief Operating Officer, the park general managers, and the Executive Vice President, Operations.
Critical Accounting Policies: This management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in the United States of America. These principles require us to make judgments, estimates and assumptions during the normal course of business that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ significantly from those estimates under different assumptions and conditions. Management believes that judgment and estimates related to the following critical accounting policies could materially affect our consolidated financial statements: •Property and Equipment •Impairment of Long-Lived Assets •Goodwill and Other Intangible Assets •Self-Insurance Reserves •Derivative Financial Instruments •Revenue Recognition
Income Taxes In the thirdfirst quarter of 20122013, there were no changes in the above critical accounting policies previously disclosed in our Annual Report on Form 10-K10-K/A for the year ended December 31, 20112012. except as noted below. Change in Depreciation Method Effective January 1, 2013, the Partnership changed its method of depreciation for the group of assets acquired as a whole in 1983, as well as for the groups of like assets of each subsequent business acquisition from the composite method to the unit method. Historically, the Partnership had used the composite depreciation method for land improvements, buildings, rides and equipment for the group of assets acquired as a whole in 1983, as well as for the group of like assets of each subsequent business acquisition. The unit method was only used for all individual assets 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. No gain or loss is recognized on normal retirements of composite assets. Instead, the net book value of a retired asset reduces accumulated depreciation for the composite group. Unusual retirements of composite assets could result in the recognition of a gain or loss. 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. In order to improve comparability and enhance the level of precision associated with allocating historical cost, the Partnership had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation for
all assets. The Partnership believes that pursuant to generally accepted accounting principles, changing from the composite method of depreciation to the unit method of depreciation is a change in accounting estimate that is effected by a change in accounting principle, which should be accounted for prospectively. This prospective application will result in the discontinuance of the composite method of depreciation for all prior acquisitions with the existing net book value of each composite pool allocated to the remaining individual assets (units) in that pool with each unit assigned an appropriate remaining useful life on an individual unit basis. Assigning a useful life to each unit in the various composite pools had an insignificant effect on the weighted average useful lives of all assets that were previously accounted for under the composite method. The change in depreciation method had an immaterial impact on the Condensed Consolidated Financial Statements for the quarter ended March 31, 2013.Future asset retirements could have a material impact on the Condensed Consolidated Financial Statements in the periods such items occur.
Adjusted EBITDA: We believe that Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the Amended 20102013 Credit Agreement) is a meaningful measure of park-level operating profitability because we use it for measuring returns on capital investments, evaluating potential acquisitions, determining awards under incentive compensation plans, and calculating compliance with certain loan covenants. Adjusted EBITDA is provided in the discussion of results of operations that follows as a supplemental measure of our operating results and is not intended to be a substitute for operating income, net income or cash flows from operating activities as defined under generally accepted accounting principles. In addition, Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
The table below sets forth a reconciliation of Adjusted EBITDA to net income for the three-, nine- and twelve-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | | (13 weeks) | | (13 weeks) | | (39 weeks) | | (38 weeks) | | (53 weeks) | | (52 weeks) | | | (In thousands ) | Net income | | $ | 140,688 |
| | $ | 152,218 |
| | $ | 111,595 |
| | $ | 71,574 |
| | $ | 110,767 |
| | $ | 8,116 |
| Interest expense | | 26,863 |
| | 41,353 |
| | 83,902 |
| | 124,650 |
| | 116,437 |
| | 171,049 |
| Interest income | | (13 | ) | | (32 | ) | | (31 | ) | | (120 | ) | | (68 | ) | | (194 | ) | Provision (benefit) for taxes | | 51,713 |
| | 37,844 |
| | 41,395 |
| | 21,773 |
| | 30,839 |
| | (12,424 | ) | Depreciation and amortization | | 60,747 |
| | 63,448 |
| | 113,156 |
| | 110,857 |
| | 128,136 |
| | 126,382 |
| EBITDA | | 279,998 |
| | 294,831 |
| | 350,017 |
| | 328,734 |
| | 386,111 |
| | 292,929 |
| Net effect of swaps | | (175 | ) | | (3,962 | ) | | (1,318 | ) | | (3,507 | ) | | (10,930 | ) | | 1,772 |
| Unrealized foreign currency (gain) loss | | (14,737 | ) | | 17,314 |
| | (14,108 | ) | | 13,224 |
| | (17,502 | ) | | 549 |
| Non-cash equity expense (income) | | 362 |
| | — |
| | 2,630 |
| | (228 | ) | | 2,619 |
| | (269 | ) | Loss on impairment of goodwill and other intangibles | | — |
| | — |
| | — |
| | — |
| | — |
| | 903 |
| Loss on impairment/retirement of fixed assets, net | | 25,000 |
| | 880 |
| | 24,230 |
| | 1,076 |
| | 25,719 |
| | 63,509 |
| Terminated merger costs | | — |
| | — |
| | — |
| | 80 |
| | 150 |
| | (79 | ) | Refinancing costs | | — |
| | (195 | ) | | — |
| | 955 |
| | — |
| | 955 |
| Other non-recurring items (as defined) | | 1,861 |
| | 836 |
| | 4,026 |
| | 6,107 |
| | 7,445 |
| | 6,107 |
| Adjusted EBITDA (1) | | $ | 292,309 |
| | $ | 309,704 |
| | $ | 365,477 |
| | $ | 346,441 |
| | $ | 393,612 |
| | $ | 366,376 |
| | | | | | | | | | | | | | (1) As permitted by and defined in the Amended 2010 Credit Agreement | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Three months ended | | Twelve months ended | | | 3/31/2013 | | 3/25/2012 | | 3/31/2013 | | 3/25/2012 | | | (13 weeks) | | (12 weeks) | | (53 weeks) | | (52 weeks) | | | (In thousands) | Net income (loss) | | $ | (109,126 | ) | | $ | (65,415 | ) | | $ | 58,145 |
| | $ | 84,807 |
| Interest expense | | 25,763 |
| | 26,803 |
| | 109,579 |
| | 142,876 |
| Interest income | | (40 | ) | | (16 | ) | | (92 | ) | | (92 | ) | Provision (benefit) for taxes | | (35,659 | ) | | (21,539 | ) | | 17,638 |
| | 5,937 |
| Depreciation and amortization | | 4,786 |
| | 4,079 |
| | 127,013 |
| | 125,892 |
| EBITDA | | (114,276 | ) | | (56,088 | ) | | 312,283 |
| | 359,420 |
| Loss on early extinguishment of debt | | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | 9,211 |
| | (970 | ) | | 8,689 |
| | (15,976 | ) | Unrealized foreign currency (gain) loss | | 8,881 |
| | (8,249 | ) | | 7,949 |
| | 8,502 |
| Non-cash equity expense | | 2,933 |
| | 1,700 |
| | 4,498 |
| | 1,689 |
| Loss on impairment/retirement of fixed assets, net | | 600 |
| | 92 |
| | 30,844 |
| | 11,251 |
| (Gain) on sale of other assets | | — |
| | — |
| | (6,625 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | 230 |
| Refinancing costs | | — |
| | — |
| | — |
| | (34 | ) | Other non-recurring items (as defined) | | 805 |
| | 1,721 |
| | 3,264 |
| | 6,823 |
| Adjusted EBITDA (1) | | $ | (57,273 | ) | | $ | (61,794 | ) | | $ | 395,475 |
| | $ | 371,905 |
| | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | |
Results of Operations:
Our results of operations for the nine, three and twelve months ended September 30, 2012 and September 25, 2011 are not directly comparable as the current nine- and twelve month periods include an additional week of operations due to the timing of the fiscal third quarter close, and as the current three-month period includes fewer operating days due to the timing of the fiscal second and third quarter closes. Since a large portion of the variances in our statements of operations is due to the difference in the number of operating days in the current fiscal periods, we will also compare current operating results to the prior year period ended October 2, 2011.
Immaterial Restatement -
We have made two separate corrections relating to our use of the composite depreciation methodmethod.
The first correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the group3 and 12 month periods ended March 25, 2012, related to a misapplication of assets acquired as a whole in 1983, as well as for groups of assets in each subsequent business acquisition.the composite depreciation method. Upon the normal retirement of an asset within a composite group, our practice generally hashad been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of our financial statements for the three months ended July 1,in 2012, wemanagement determined that this methodology was not appropriate. As a result, we revised the useful lives of our composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation).
The second correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the 12 month period ended March 25, 2012, reflects a subsequent determination that a disposition from our composite group of assets was considered to be unusual. In certain situations under the composite method, disposals are considered unusual and, accordingly, losses are not included in the composite depreciation pool but are rather charged immediately to expense. In 2013, the Partnership's initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was challenged by the SEC Staff. We evaluated the amount and nature of these adjustments andultimately concluded that theysuch disposition was unusual and that a $8.8 millioncharge be reflected in the 2011 financial statements.
First Quarter -
Operating results for the first quarter historically include less than 5% of our full-year revenues and attendance. The results include normal off-season operating, maintenance and administrative expenses at our ten seasonal amusement parks and four outdoor water parks, as well as daily operations at Knott's Berry Farm, which is open year-round, and Castaway Bay, which is generally open daily from Memorial Day to Labor Day plus a limited daily schedule for the balance of the year. The following table presents key financial information for the three months ended March 31, 2013 and March 25, 2012: | | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 3/31/2013 | | 3/25/2012 | | $ | | % | | | (13 weeks) | | (12 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 41,799 |
| | $ | 28,198 |
| | $ | 13,601 |
| | 48.2 | % | Operating costs and expenses | | 102,733 |
| | 93,356 |
| | 9,377 |
| | 10.0 | % | Depreciation and amortization | | 4,786 |
| | 4,079 |
| | 707 |
| | 17.3 | % | Loss on impairment / retirement of fixed assets | | 600 |
| | 92 |
| | 508 |
| | N/M |
| Operating loss | | $ | (66,320 | ) | | $ | (69,329 | ) | | $ | 3,009 |
| | (4.3 | )% | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | (57,273 | ) | | $ | (61,794 | ) | | $ | 4,521 |
| | (7.3 | )% |
For the quarter ended March 31, 2013, net revenues increased to $41.8 million from $28.2 million for the first quarter of 2012. The increase between periods was primarily due to the strong first-quarter performance in both attendance and per-capita spending at Knott's Berry Farm, our only year-round property, compared with the first quarter a year ago, as well as an extra week of operations due to the earlier timing of Easter in 2013 compared to 2012. At the end of the first quarter, only five of our 15 properties were not materialin operation. The other parks, including our larger parks, Cedar Point and Kings Island located in Ohio and Canada's Wonderland in Toronto, were in the final stages of preparing to eitheropen for the 2013 operating season.
Operating costs and expenses for the quarter increased $9.3 million to $102.7 million from $93.4 million in 2012 and were in line with expectations. Operating results for the first quarter include normal off-season operating, maintenance and administrative
expenses at our prior annualseasonal amusement and water parks, and daily operations at Knott’s Berry Farm and Castaway Bay. The increase in first-quarter costs reflects a $5.4 million increase in operating expenses and a $2.3 million increase in selling, general and administrative ("SG&A") expenses. The cost of food, merchandise and games revenues for the period increased slightly due to sales volume increases at Knott's Berry Farm in the first quarter of 2013. The $5.4 million increase in operating expenses was due primarily to the extra week of operations in the first quarter of 2013 compared with 2012. For the quarter, labor costs increased $3.8 million, maintenance expense increased $2.2 million and operating supplies increased $0.9 million. These increases in operating costs were somewhat offset by a reduction in insurance expense due to a prior-year, non-recurring public liability claim at one of our parks. The $2.3 million increase in SG&A expenses was due primarily to increases in first-quarter advertising fees and full-time labor costs, largely related to full staffing levels.
Interest expense for the first quarter of 2013 was $25.8 million, representing a $1.0 million decrease compared to the first quarter of 2012. The decrease in interest expense was primarily due to the settlement of our Canadian swap in the first quarter of 2012.
During the first quarter of 2013, the net effect of our swaps decreased $10.2 million to a non-cash charge to earnings of $9.2 million, reflecting the regularly scheduled amortization of amounts in AOCI related to interest rate swaps, the write off of amounts in AOCI related to de-designated interest rate swaps, as well as gains from marking the ineffective and de-designated swaps to market. During the first quarter of 2013 we also recognized a $9.0 million charge to earnings for unrealized/realized foreign currency gains and losses, $8.9 million of which represents an unrealized foreign currency loss on the U.S.-dollar denominated debt held at our Canadian property. Due to our March 2013 refinancing, loan fees related to our 2010 and 2011 financings were written off, resulting in a $34.6 million charge to earnings in the period.
During the quarter, a benefit for taxes of $35.7 million was recorded to account for publicly traded partnership (PTP) taxes and the tax attributes of our corporate subsidiaries, compared to a benefit for taxes of $21.5 million in the same period a year ago. Actual cash taxes paid or quarterly financial statements. Nonetheless, the historical financial statement amounts included in this filing have been corrected for this error. We expect to likewise correct previously presented historical financial statementspayable are estimated to be included in future filings, including the annual financial statements to be included in our Annual Report on Form 10-Kbetween $14-$17 million for the 2013 calendar year.
After interest expense and the provision for taxes, net loss for the quarter totaled $109.1 million, or $1.95 per diluted limited partner unit, compared with net loss of $65.4 million, or $1.18 per diluted limited partner unit, for the first quarter a year ending December 31, 2012.ago. The larger net loss for the period is due to the loss on early debt extinguishment and a change in the unrealized/realized loss on foreign currency exchange, offset somewhat by the increased first-quarter revenues.
NineTwelve Months Ended September 30, 2012March 31, 2013 -
The fiscal nine-monthtwelve-month period ended September 30, 2012,March 31, 2013, consisted of a 39-week53-week period and included a total of 2,178 operating days compared with 3852 weeks and 2,148 operating days for the fiscal nine-monthtwelve-month period ended SeptemberMarch 25, 2011.2012. Operating days were virtually identical, as the current period had only one additional operating day.
The following table presents key financial information for the ninetwelve months ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | | | | | | | | | | | | | | | | | | Nine months ended | | Nine months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (39 weeks) | | (38 weeks) | | | | | | | (Amounts in thousands except per capita spending) | | | | | | | | | | Net revenues | | $ | 939,249 |
| | $ | 883,627 |
| | $ | 55,622 |
| | 6.3 | % | Operating costs and expenses | | 580,246 |
| | 541,665 |
| | 38,581 |
| | 7.1 | % | Depreciation and amortization | | 113,156 |
| | 110,857 |
| | 2,299 |
| | 2.1 | % | Loss on impairment / retirement of fixed assets, net | | 24,230 |
| | 1,076 |
| | 23,154 |
| | N/M |
| Operating income | | $ | 221,617 |
| | $ | 230,029 |
| | $ | (8,412 | ) | | (3.7 | )% | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 365,477 |
| | $ | 346,441 |
| | $ | 19,036 |
| | 5.5 | % | Adjusted EBITDA margin | | 38.9 | % | | 39.2 | % | | $ | — |
| | (0.3 | )% | Attendance | | 20,689 |
| | 20,114 |
| | 575 |
| | 2.9 | % | Per capita spending | | $ | 41.78 |
| | $ | 40.15 |
| | $ | 1.63 |
| | 4.1 | % | Out-of-park revenues | | $ | 99,526 |
| | $ | 97,622 |
| | $ | 1,904 |
| | 2.0 | % |
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 3/31/2013 | | 3/25/2012 | | $ | | % | | | (53 weeks) | | (52 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,082,055 |
| | $ | 1,029,801 |
| | $ | 52,254 |
| | 5.1 | % | Operating costs and expenses | | 694,139 |
| | 666,535 |
| | 27,604 |
| | 4.1 | % | Depreciation and amortization | | 127,013 |
| | 125,892 |
| | 1,121 |
| | 0.9 | % | (Gain) on sale of other assets | | (6,625 | ) | | — |
| | (6,625 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 30,844 |
| | 11,251 |
| | 19,593 |
| | 174.1 | % | Operating income | | $ | 236,684 |
| | $ | 226,123 |
| | $ | 10,561 |
| | 4.7 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 395,475 |
| | $ | 371,905 |
| | $ | 23,570 |
| | 6.3 | % | Adjusted EBITDA margin | | 36.5 | % | | 36.1 | % | | — |
| | 0.4 | % |
Net revenues totaled $1,082.1 millionfor the ninetwelve months ended September 30, 2012March 31, 2013, increasing $52.3 million, from $1,029.8 million increased $55.6 million to $939.2 million from $883.6 million duringfor the ninetrailing twelve months ended SeptemberMarch 25, 20112012. The increase in revenues reflects an increase of 575,000 visits, or 3%, in combined attendanceRevenues for the nine-monthtwelve-month period ended September 30, 2012 when compared withincreased 5% on the nine-month period ended September 25, 2011. The increase in revenues also reflects a 4%, or $1.63, increase in averagestrength of higher attendance and in-park guest per capita spending. In-park guest per capita spending represents the amount spent per attendee to gain admission to a park, plus all amounts spent while inside the park gates. The increase in per capita spending was largely due to the successful introduction of new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing initiatives. Attendance increased year-over-year on virtually the same number of operating days as our season pass sales and visits increased during the same nine-month period and a 2%, or $1.9 million, increase incomparable periods.
Meanwhile, out-of-park revenues. Out-of-park revenues, includewhich represents the sale of hotel rooms, food, merchandise and other complementary activities located outside of the park gates, as well as e-commerce transaction fees. In-park guest per capita spending representsincreased slightly in the average amount spent per attendee to gain admission to a park
plus all amounts spent while inside the park gates. Revenuescomparable periods. The increase in net revenues for the first ninetwelve months of the yearended March 31, 2013 also reflectreflects the negative impact of currency exchange rates and the weakening U.S. dollar on our Canadian operations ($4.5(approximately $4.5 million) during the period.
For the nine-month period ended September 30, 2012, operatingOperating costs and expenses increased 7%$27.6 million, or 4%, or $38.5to $694.1 million to $580.2 million from $541.7versus $666.5 million for 2012 and were in line with expectations. The increase in costs and expenses was the nine-month period ended September 25, 2011, the net result of a $3.9$4.0 million increase in cost of goods sold, a $29.3$19.8 million increase in operating expenses, and a $5.4 million$3.9 increase in selling, generalSG&A costs. The 4% increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at our parks. Operating expenses increased due to several factors, including higher employment-related costs, higher operating supply costs, and higher self-insurance expenses. Employment-related costs increased approximately $12.6 million due to normal merit increases, increases in health-related benefit costs, additional staffing levels associated with new premium benefit offerings and other initiatives aimed at improving the overall guest experience, and non-recurring severance payments. Operating supplies and expenses increased approximately $5.3 million due primarily to initiatives to expand or enhance live entertainment at the parks, as well as incremental costs associated with our e-commerce platform and higher attendance. These increases in operating costs were somewhat offset by a reduction in insurance expense due to a prior-year (first quarter of 2012), non-recurring public liability claim at one of our parks.
The increase in SG&A costs was due to an increase in employment-related costs ($4.5 million), operating supplies ($3.8 million), and agency advertising fees ($2.7 million), offset by decreases in professional and administrative costs ("SG&A")($5.9 million). DepreciationThe increase in employment costs was primarily the result of higher wages and amortization expense for the period increased $2.3 millionbenefits due to normal merit increases and full-staffing levels. Increases in operating supplies and advertising fees were due to the earlier timing of Easter, as well as incremental costs to support operating initiatives including general infrastructure improvements. Professional and administrative fees decreased primarily due to a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests. The overall increase in capital spending when compared withcosts and expenses also reflects the prior year. The positive impact of exchange rates on our Canadian operations ($1.2 million) during the period.
Loss on impairment/retirement of fixed assets, reported fornet, during the nine-month period totaled $30.8 million, which reflects a non-cash charge to earnings of $25.0 million for the partial impairment of operating and non-operating fixed assets at Wildwater Kingdom netalong with losses on other retirements. During the twelve-month period ended March 31, 2013, two non-core assets were sold at gains totaling $6.6 million. During the twelve-month period ended March 25, 2012, a charge of an $0.8$11.3 million gain fromfor the sale of a non-operating asset at one of our properties. After depreciation, amortization, loss on impairment / retirement of fixed assets was recorded which includes the retirement of the asset as described in Note 11 to the financial statements.
Depreciation and amortization expense for the period increased $1.1 million compared with the prior period due primarily to an increase in capital expenditures for the 2012 season. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for the current period decreased $8.4increased $10.6 million to $221.6$236.7 million through the first nine months of 2012 from operating income of $230.0 million through the first nine months of 2011.$226.1 million.
Interest expense for the first three quarters of 2012 was $83.9twelve months ended March 31, 2013 decreased $33.3 million a decrease of $40.7to $109.6 million, from $142.9 million for the first three quarters of 2011.same twelve-month period a year ago. The reduction in interest expense iswas primarily attributable to an approximate 300 basis point (bps) decline in our effective interest rate, the result of lower fixed rates on London InterBank Offered Rate (LIBOR) within our interest-rate swap contracts. TheAdditionally during the current period, $25.0 million of term debt principal payments were made, reducing our average fixed LIBOR rate in our swap agreements declined from 5.62% in 2011 to 2.48% in 2012.debt outstanding.
ForDuring the current period, the net effect of our interest rate swaps decreased $2.2was recorded as a charge to earnings of $8.7 million between years, resulting incompared to a non-cash benefit to earnings of $1.3$16.0 million for the first nine months of 2012, as compared with a $3.5 million non-cash benefit to earnings for the nine-month period in 2011.prior period. The difference reflects the regularly scheduled amortization of amounts in Accumulated other comprehensive income ("AOCI")AOCI related to the swaps and the write off of AOCI amounts related to de-designated interest rate swaps, which were offset by gains from marking the ineffective and de-designated swaps to market and foreign currency gains related to the U.S.-dollar denominated Canadian term loan in the current period. During the current year-to-date period, we also recognized a $13.9$8.2 million net benefitcharge to earnings for unrealized/realized foreign currency gains,losses, which included a $14.1$7.9 million unrealized foreign currency gainloss on the U.S.-dollar denominated debt held at our Canadian property. Due to our March 2013 refinancing, loan fees that were paid as part
of our 2010 and 2011 financings were written off, resulting in a $34.6 million non-cash charge to earnings recorded in "Loss on early debt extinguishment" on the consolidated statement of operations.
During the first fiscal nine months of 2012, aA provision for taxes of $41.4$17.6 million was recorded to accountin the period for publicly traded partnership (“PTP”) taxes and the tax attributes of our corporate subsidiaries.subsidiaries and publicly traded partnership (PTP) taxes. This compares with a $21.8 million provision for taxes of $5.9 million in period ended March 25, 2012 for the first fiscal nine monthstax attributes of 2011. The year-over-year variation in the tax provision is due primarily to an increase in the income subject to tax. Actual cash taxes paid or payable for the 2012 calendar year are estimated to be between $11our corporate subsidiaries and $13 million. The Partnership also expects to receive a $10.4 million refund of prior year taxes paid resulting from the carry back of the loss recognized from the settlement of a derivative contract.PTP taxes.
After interest expense and the benefitprovision for taxes, net income for the nine months ended September 30, 2012period totaled $111.6$58.1 million, or $2.00$1.04 per diluted limited partner unit, compared with net income of $71.6$84.8 million, or $1.28$1.52 per unit, for the nine months ended September 25, 2011.a year ago.
It is important to note that the current nine-month results benefited from an additional week, or 30 more operating days, due to the timing of the third quarter fiscal close. Comparing both 2012 and 2011 on a 39-week basis, net revenues would have been up $41.1 million, or 5%, on increases in both attendance and in-park guest per capita spending. On a comparable basis, attendance would have increased 228,000 visits, primarily due to an increase in season pass attendance, and in-park per capita spending would have increased $1.67, or 4%, primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Over that same comparable basis, out-of-park revenues would have decreased by approximately $0.3 million, or less than 1%.
Operating costs and expenses on a comparable 39-week basis would have increased approximately $27.9 million, or 5%, due to an increase of $2.9 million, or 3%, in cost of goods sold, an increase in operating expenses of $21.9 million, or 6%, and an increase of $3.1 million, or 3%, in SG&A costs. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $1.6 million) during the nine-month period ended September 30, 2012.
The 3% increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Operating expenses in the 39-week period increased due to several factors, including higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. Employment-related costs increased approximately $11.0 million due to normal merit increases, increases in health-related benefit costs, additional staffing levels associated with new premium benefit offerings and other initiatives aimed at improving the overall guest experience, and non-recurring severance payments. Due in part to mild weather, we were able to accelerate off-season maintenance projects into the first half of the year, resulting in year-over-year maintenance expense increasing by approximately $4.4 million. Operating supplies and expenses increased approximately $4.0 million due primarily to initiatives
to expand or enhance live entertainment at the parks, as well as incremental costs associated with our new e-commerce platform. During the first nine months, public liability and workers compensation expense increased $2.1 million due to claim settlements and an increase in our reserves based on management's estimates of future claims.
SG&A expense for the comparable 39-week period increased approximately $3.1 million compared to same period in 2011 due to an increase in operating supplies of $4.7 million, an increase in advertising costs of $1.5 million, and an increase in employee related costs of $2.9 million. The operating supplies and advertising increases were due to incremental costs to support 2012 operating initiatives including general infrastructure improvements. These increases in expense were offset somewhat by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in 2011.
For the fiscal nine-month period ended September 30, 2012,We believe Adjusted EBITDA (as defined in the Amended 2010 Credit Agreement), which we believe is a meaningful measure of our park-level operating results (for additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net income, see Note 6 in Item 6, “Selected Financial Data,” on pages 15-16). For the twelve-month period ended March 31, 2013, Adjusted EBITDA increased $23.6 million, or 6%, to $365.5 million compared with $346.4 million$395.5 million. Over this same period, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased 40 bps to 36.5% from 36.1% for the fiscal nine-monthtwelve-month period ended SeptemberMarch 25, 2011. This2012. The increase was due in part to the extra week in the current fiscal nine-month period. On a same-week basis, Adjusted EBITDA for the nine-month period would have still been up approximately $15.2 million, or 4%, between years,was primarily due to anthe increase in revenues resulting from the successful introduction of our new premium benefit offerings and dynamic pricing initiatives, as well as the successful expansion of our season pass base. These revenue gains were offset somewhat by an increase in operating costs in the period. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
Third Quarter -
The fiscal three-month period ended September 30, 2012, consisted of a 13-week period and included a total of 1,177 operating days compared with 13 weeks and 1,253 operating days for the fiscal three-month period ended September 25, 2011. The variance in days is due to a shift in the operating calendar.
The following table presents key financial information for the three months ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (13 weeks) | | (13 weeks) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 553,445 |
| | $ | 572,268 |
| | $ | (18,823 | ) | | (3.3 | )% | Operating costs and expenses | | 263,657 |
| | 262,188 |
| | 1,469 |
| | 0.6 | % | Depreciation and amortization | | 60,747 |
| | 63,448 |
| | (2,701 | ) | | (4.3 | )% | Loss on impairment / retirement of fixed assets | | 25,000 |
| | 880 |
| | 24,120 |
| | N/M |
| Operating income | | $ | 204,041 |
| | $ | 245,752 |
| | $ | (41,711 | ) | | (17.0 | )% | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 292,309 |
| | $ | 309,704 |
| | $ | (17,395 | ) | | (5.6 | )% | Adjusted EBITDA margin | | 52.8 | % | | 54.1 | % | | — |
| | (1.3 | )% | Attendance | | 11,960 |
| | 12,933 |
| | (973 | ) | | (7.5 | )% | Per capita spending | | $ | 42.90 |
| | $ | 40.84 |
| | $ | 2.06 |
| | 5.0 | % | Out-of-park revenues | | $ | 54,260 |
| | $ | 58,879 |
| | $ | (4,619 | ) | | (7.8 | )% |
For the quarter ended September 30, 2012, net revenues decreased 3%, or $18.8 million, to $553.5 million from $572.3 million in 2011. This decrease reflects a 5% increase in average in-park per capita spending, offset by an 8% decrease in combined attendance (973,000 visits), and an 8% ($4.6 million) decrease in out-of-park revenues. The decreases in net revenues and attendance was largely attributable to the decrease in operating days in the quarter due to the way the fiscal calendar fell in 2012 compared with 2011. In-park per capita spending increased primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Out-of-park revenues decreased due to soft results in accommodations being somewhat offset by fees generated from our new e-commerce initiatives. The decrease in revenues for the third quarter of 2012 also reflects the negative impact of exchange rates on our Canadian operations ($2.4 million) during the period.
Operating costs and expenses for the quarter increased less than 1%, or $1.5 million, to $263.7 million from $262.2 million in the third quarter of 2011, the net result of a $1.4 million decrease in cost of goods sold, a $1.9 million increase in operating expenses and a $1.0 million increase in SG&A costs. Operating cost and expense variances between years were also affected by the fewer number of operating days in the current fiscal quarter, as discussed above. Depreciation and amortization expense for the quarter decreased $2.7 million due primarily to the reduction in operating days in the period, on which depreciation expense is based. During the current quarter, we recognized a non-cash charge to earnings of $25.0 million for the partial impairment of operating and non-operating fixed assets at Wildwater Kingdom.
Interest expense for the third quarter of 2012 was $26.9 million, representing an $14.5 million decrease from the interest expense for the third quarter of 2011. As mentioned in the nine-month discussion above, interest expense decreased primarily due to an approximate 300 bps decline in our effective interest rate. The decline in the effective interest rate is primarily due to lower fixed rates of LIBOR in debt associated derivative contracts, which declined from 5.62% in 2011 to 2.48% in 2012.
The net effect of our swaps during the third quarter was a non-cash benefit to earnings of $0.2 million, representing a decrease of $3.8 million from the prior year. This non-cash benefit reflects the regularly scheduled amortization of amounts in AOCI related to the swaps. During the 2012 third quarter, we also recognized a $15.0 million net benefit to earnings for unrealized/realized foreign currency gains, $14.7 million of which represents an unrealized foreign currency gain on the U.S.-dollar denominated debt held at our Canadian property.
During the quarter, a provision for taxes of $51.7 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provision for taxes of $37.8 million in the same period a year ago. The variation in the tax provision recorded between periods is due primarily to the increase in income subject to tax. After interest expense and the provision for taxes, net income for the quarter totaled $140.7 million, or $2.51 per diluted limited partner unit, compared with net income of $152.2 million, or $2.73 per unit, for the third quarter a year ago.
It is important to note that the current three-month results were negatively impacted by 76 less operating days, due to the timing of the second and third quarter fiscal closes. Comparing the third quarters of 2012 and 2011 on a comparable operating-day basis, net revenues would have been up $20.8 million, or 4%, on an increase in average in-park guest per capita spending offset by a slight decrease in attendance and a 3% decrease in out-of-park revenues.
Operating costs and expenses on a comparable operating-day basis would have increased approximately $12.4 million, or 5%, on a $2.1 million increase in cost of goods sold, an $8.4 million increase in operating expenses, and $1.9 million increase in SG&A costs. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $0.6 million) during the third quarter. The increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Consistent with our nine-month discussion above, operating expenses in the third quarter increased as a result of higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. The increase in SG&A expense for the quarter reflects an increase in operating supplies associated with the new e-commerce initiative and general park infrastructure improvements, offset slightly by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in the third quarter of 2011.
For the current quarter, Adjusted EBITDA decreased to $292.3 million from $309.7 million for the fiscal third quarter of 2011. The $17.4 million decrease in Adjusted EBITDA was due to the shift in operating days during the quarter. On a same week basis, Adjusted EBITDA would have increased $11.3 million due to incremental revenues resulting from the introduction of new premium benefit offerings, which contributed to increased average guest per capita spending, as well as an increase in attendance in the quarter. Partially offsetting these gains on a same week basis were higher park-level operating costs during the period related to park pre-opening and off-season maintenance projects and increases in costs to support 2012 initiatives, including a new e-commerce platform and infrastructure improvements. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
Twelve Months Ended September 30, 2012 -
The fiscal twelve-month period ended September 30, 2012, consisted of a 53-week period and included a total of 2,416 operating days compared with 52 weeks and 2,381 operating days for the fiscal twelve-month period ended September 25, 2011.
The following table presents key financial information for the twelve months ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (53 weeks) | | (52 weeks) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,084,094 |
| | $ | 1,013,316 |
| | $ | 70,778 |
| | 7.0 | % | Operating costs and expenses | | 701,915 |
| | 650,925 |
| | 50,990 |
| | 7.8 | % | Depreciation and amortization | | 128,136 |
| | 126,382 |
| | 1,754 |
| | 1.4 | % | Loss on impairment of goodwill and other intangibles | | — |
| | 903 |
| | (903 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 25,719 |
| | 63,509 |
| | (37,790 | ) | | N/M |
| Operating income | | $ | 228,324 |
| | $ | 171,597 |
| | $ | 56,727 |
| | 33.1 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 393,612 |
| | $ | 366,376 |
| | $ | 27,236 |
| | 7.4 | % | Adjusted EBITDA margin | | 36.3 | % | | 36.2 | % | | — |
| | 0.2 | % | Attendance | | 23,961 |
| | 23,135 |
| | 826 |
| | 3.6 | % | Per capita spending | | $ | 41.44 |
| | $ | 39.91 |
| | $ | 1.53 |
| | 3.8 | % | Out-of-park revenues | | $ | 119,460 |
| | $ | 114,258 |
| | 5,202 |
| | 4.6 | % |
Net revenues totaled $1,084.1 million for the twelve months ended September 30, 2012, increasing $70.8 million, from $1,013.3 million for the trailing twelve months ended September 25, 2011. The increase in revenues was due to an increase in attendance of 826,000 visits, or 4%, an increase in average in-park per capita spending of $1.53, or 4%, and an increase in out-of-park revenues of $5.2 million, or 5%. The attendance increase was due to an increase in season pass visitation as well as the effect of the extra operating days in the period. The increase in average in-park guest per capita spending is primarily due to new premium benefit offerings and the positive impact from new customer messaging and dynamic pricing. Out-of-park revenues increased due to our hotel properties and due to an increase in fees generated by our new e-commerce initiatives. The increase in revenues was also positively affected by the additional operating days in the current fiscal period.
When comparing the two twelve-month periods, operating costs and expenses increased $51.0 million, or 8%, to $701.9 million in 2012 from $650.9 million in 2011. The increase in operating costs and expenses was the net result of a $5.2 million increase in cost of goods sold, a $33.2 million increase in operating expenses and an increase of $12.6 million in selling, general and administrative costs. The increase in operating expenses is primarily attributable to higher employment related expenses of $15 million, $6 million of higher maintenance costs, $1 million in higher insurance costs, and $5 million of higher operating supply costs. The increase in wages is largely due to increased seasonal labor hours as a result of expanded operating hours at several parks, additional attractions and guest services, and the overall effect of increased attendance. The increase in insurance costs was primarily the result of claim settlements and increases in our reserves based on future estimated claim liabilities. As discussed in the nine- and three-month sections, maintenance costs increased primarily due to the earlier timing of planned off-season projects, as well as an increase in the number of projects designed to add to the guest experience. The increase in operating supply costs relates primarily to an increase in attendance over the past year, as well as incremental costs associated with the new e-commerce platform. The increase in SG&A costs includes $5 million in costs largely related to the launching of several new revenue initiatives for the 2012 season, as well as a $3 million increase in advertising expense as we transitioned to a new advertising agency for 2012. Employment related expenses increased $5 million primarily due to the receipt of a non-recurring payroll tax credit of $2.5 million recorded in the fourth quarter of 2010, as well as an increase in retirement expenses and non-recurring severance payments in the current twelve-month period. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $1.6 million) during the twelve-month period ended September 30, 2012.
Depreciation and amortization expense for the trailing-twelve-month periods increased $1.8 million between years due to the increase in capital spending during the current-year period compared with the prior year. During the twelve months ended September 30, 2012, we recognized $0.7 million in non-cash charges for the retirement of assets in the normal course of business. Additionally, we recorded a non-cash charge of $25.0 million for the partial impairment of operating and non-operating fixed
assets at Wildwater Kingdom during the third quarter in 2012. This compares to a non-cash charges recognized during the twelve-month period ended September 25, 2011 of $62.0 million at California's Great America for the partial impairment of its fixed assets and $1.5 million for asset retirements across all properties. Additionally, a non-cash charge of $0.9 million was recorded during the fourth quarter of 2010 for the partial impairment of trade-names originally recorded at the time of the PPI acquisition. It is important to note that each of our parks produces positive cash flow, and that trade-name write-downs and fixed asset impairment losses do not affect cash, Adjusted EBITDA or liquidity.
After depreciation, amortization, loss on impairment of the trade-names, loss on impairment / retirement of fixed assets, and all other non-cash costs, operating income for the twelve months ended September 30, 2012 increased $56.7 million to $228.3 million compared with $171.6 million for the same period a year ago.
Interest expense for the twelve month period ended September 30, 2012 decreased $54.6 million to $116.4 million from $171.0 million for the prior twelve month period ended September 25, 2011. As mentioned in the nine-month discussion above, interest expense decreased primarily due to an approximate 300 bps decline in our effective interest rate. The decline in the effective interest rate is primarily due to lower fixed rates of LIBOR in debt associated derivative contracts, which declined from 5.62% in 2011 to 2.48% in 2012.
The net effect of our swaps during the period was a non-cash benefit to earnings of $10.9 million, representing an increase of $12.7 million from the same period ended September 25, 2011. This non-cash benefit reflects gains from marking the ineffective and de-designated swaps to market, offset somewhat by the regularly scheduled amortization of amounts in AOCI related to the swaps and foreign currency losses related to the U.S.-dollar denominated Canadian term loan in the current twelve month period. During the current twelve-month period, we also recognized a $18.7 million net benefit to earnings for unrealized/realized foreign currency gains and losses, $17.5 million of which represents an unrealized foreign currency gain on the U.S.-dollar denominated debt held at our Canadian property.
A provision for taxes of $30.8 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries during the twelve-month period ended September 30, 2012, compared with a net benefit for taxes of $12.4 million during the same twelve-month period a year ago. The variation in the recorded tax provision between periods is due to the higher income subject to tax for the twelve-month period ending September 30, 2012 and the tax benefit of the impairment charge recorded in the previous twelve-month period.
After interest expense and the provision for taxes, net income for the twelve months ended September 30, 2012 was $110.8 million, or $1.98 per diluted limited partner unit, compared with net income of $8.1 million, or $0.15 per diluted limited partner unit, for the twelve months ended September 25, 2011.
It is important to note that due to the timing of the third quarter fiscal close results for the twelve-month period ended September 30, 2012 benefited from an additional week (53 weeks) compared to the twelve-month period ended September 25, 2011 (52 weeks). Comparing the twelve-month periods for both 2012 and 2011 on a 53-week basis, net revenues would have been up $56.2 million, or 5%, on increases in attendance, in-park guest per capita spending and out-of-park revenues. On a comparable 53-week basis, attendance would have increased 479,000 visits, due to an increase in season pass attendance, and in-park per capita spending would have increased $1.56, or 4%, primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Over that same comparable basis, out-of-park revenues would have increased by approximately $3.5 million, or 3%.
On a comparable 53-week basis, operating costs and expenses would have increased approximately $40.3 million, or 6%, on a $4.2 million increase in cost of goods sold, an $25.8 million increase in operating expenses, and $10.4 million increase in SG&A costs. The overall increase in costs and expenses also reflects the favorable impact of exchange rates on our Canadian operations (approximately $1.6 million) during the period. The increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Consistent with our nine- and three-month discussions above, operating expenses for the twelve-month period increased as a result of higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. The higher employment-related costs reflect normal merit increases, increases in health-related benefit costs, an overall increase in seasonal labor hours as a result of expanded operating hours at several parks, additional attractions and guest services, the overall effect of increased attendance, and non-recurring severance payments. Employment related costs also increased as result of the non-recurring payroll tax credit of $2.5 million recorded in the fourth quarter of 2010. The higher maintenance costs in the current-year twelve-month period relate primarily to the earlier timing of planned off-season projects, which was possible as a result of the mild early-season weather in 2012. The increase in operating supplies was driven by higher attendance and new initiatives to expand or enhance live entertainment at the parks, as well as incremental costs associated with our new e-commerce platform. The increase in public liability and workers compensation expense was the result of a claim settlement in the first quarter of 2012
and increases in our reserves based on management's estimates of future claims. The higher SG&A costs reflect incremental costs associated with the launching of several new revenue initiatives for the 2012 season, including the new e-commerce platform, general park infrastructure improvements, and an increase in advertising expenses as we transitioned to a new advertising agency for 2012. These increases in SG&A costs were somewhat offset by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in 2011.
For the twelve-month period ended September 30, 2012, Adjusted EBITDA increased to $393.6 million compared with $366.4 million for the twelve months ended September 25, 2011, while our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased slightly to 36.3% from 36.2% a year ago. A portion of this increase in Adjusted EBITDA was due to the extra week in the current fiscal twelve-month period. On a same-week basis, Adjusted EBITDA would have been up $23.4 million, or 6%, year over year, due to revenue growth driven by increased attendance and the strong 2011 fourth quarter operating performance. These gains were offset somewhat by incremental operating costs associated with the higher attendance and new operating initiatives for 2012. For the comparable twelve-month periods, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) would have increased 30 bps to 36.3% from 36.0% last year. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
October 2012 -
Based on preliminary results through the end of October, revenues for the first ten months of the year increased approximately $37 million to $1,036 million from $999 million for the same period a year ago. The revenue increase is the result of a 4% increase in average in-park guest per capita spending to $42.00 and attendance levels that were comparable with last year's record results (22.7 million visits). Out-of-park revenues of approximately $108 million through October were also comparable with this time last year.
Liquidity and Capital Resources: With respect to both liquidity and cash flow, we ended the thirdfirst quarter of 20122013 in sound condition. The negative working capital ratio (current assetsliabilities divided by current liabilities)assets) of 1.01.4 at September 30, 2012March 31, 2013 reflects the impact of our seasonal business. Cash, receivables and inventories are at normal seasonal levels and credit facilities are in place to fund current liabilities.
In July 2010, we issued $405 million of 9.125% senior unsecured notes, maturing in 2018, in a private placement, including $5.6 million of Original Issue Discount (OID) to yield 9.375%. Concurrently with this offering, we entered into a new $1,435 million credit agreement (the "2010 Credit Agreement"), which included a $1,175 million senior secured term loan facility and a $260 million senior secured revolving credit facility. The net proceeds from the offering of the notes, along with borrowings under the 2010 Credit Agreement, were used to repay in full all amounts outstanding under our previous credit facilities.
In February 2011, we amended the 2010 Credit Agreement (as so amended, the "Amended 2010 Credit Agreement") and extended the maturity date of the U.S. term loan portion of the credit facilities by one year. Under the Amended 2010 Credit Agreement, the extended U.S. term loan iswas scheduled to mature in December of 2017 and bearsbore interest at a rate of LIBOR plus 300 bps, with a LIBOR floor of 100 bps. The Amended 2010 Credit Agreement also includesincluded a $260 million revolving credit facility. Under the agreement, the Canadian portion of the revolving credit facility has a limit of $15 million. U.S. denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 400 bps (with no LIBOR floor). Canadian denominated loans made under the Canadian portion of the facility also bear interest at a rate of LIBOR plus 400 bps (with no LIBOR floor). The revolving credit facility, which matureswas scheduled to mature in July of 2015, also providesprovided for the issuance of documentary and standby letters of credit.
In May 2012, the Partnership prepaidMarch 2013,we issued $16500 million of long-term debt to meet its obligation5.25% senior unsecured notes, maturing in 2021, in a private placement, with no OID. Concurrently with this offering, we entered into a new $885 million credit agreement (the "2013 Credit Agreement"), which included a $630 million senior secured term loan facility and a $255 million senior secured revolving credit facility. The terms of the senior secured term loan facility include a maturity date of March 15, 2020 and an interest rate of LIBOR plus 250 bps with a LIBOR floor of 75 bps. The term loan amortizes at $6.3 million annually. The net proceeds from the notes and borrowings under the Excess Cash Flow ("ECF") provision2013 Credit Agreement were used to repay in full all amounts outstanding under the previous credit facilities. The facilities provided under the 2013 Credit Agreement are collateralized by substantially all of the assets of the Partnership.
Terms of the 2013 Credit Agreement. AsAgreement include a resultrevolving credit facility of this prepayment, as well as additional optional long-term debt prepayments made in August 2011 and September 2012a combined $255 million. Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility has a limit of $1815 million. U.S. denominated and Canadian denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 225 bps (with no LIBOR floor). The revolving credit facility is scheduled to mature in March 2018 and also provides for the issuance of documentary and standby letters of credit. The 2013 Credit Agreement requires the Partnership to pay a commitment fee of $9 million50, respectively, bps per annum on the Company has no scheduled term-debt principal payments untilunused portion of the first quarter of 2015.credit facilities. At the end of the quarter, we had a total of $1,131.1$630.0 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $400.7$901.3 million of fixed-rate debt (including OID), no$96.0 million outstanding borrowings under our revolving
credit facility, and cash on hand of $96.1$10.0 million. After letters of credit, which totaled $16.5$16.4 million at September 30, 2012March 31, 2013, we had $243.5$142.6 million of available borrowings under the revolving credit facility under the Amended 20102013 Credit Agreement.
Our $405 million of senior unsecured notes require semi-annual interest payments in February and August, with the principal due in full on August 1, 2018. The notes may be redeemed, in whole or in part, at any time prior to August 1, 2014 at a price equal to 100% of the principal amount of the notes redeemed plus a “make-whole” premium together with accrued and unpaid interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Prior to August 1, 2013, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 109.125%. Our $500 million of senior unsecured notes pay interest semi-annually in March and September, with the principal due in full on March 15, 2021. The notes may be redeemed, in whole or in part, at any time prior to March 15, 2016 at a price equal to 100% of the principal amount of the notes redeemed plus a “make-whole” premium together with accrued and unpaid interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Prior to March 15, 2016, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 105.25%. In order to maintain fixed interest costs on a portion of our domestic term debt, in September 2010 we entered into several interest rateforward-starting swap agreements ("September 2010 swaps") to effectively convert a total of $600$600 million of variable-rate debt to fixed rates beginning in October 2011. As a result of the February 2011 amendment to our credit agreement,the 2010 Credit Agreement, the LIBOR floor on the term loan portion of ourits credit facilities decreased to 100 bps from 150 bps, causing a mismatch in critical terms of the September 2010 swaps and the underlying debt. Because of the mismatch of critical terms, we determined the September 2010 swaps, which were originally designated as cash flow hedges, were no longer highly effective, resulting in the de-designation of the September 2010 swaps as of the end of February 2011. As a result of this ineffectiveness, gains of $7.2 million recorded in AOCI through the date of de-designation are being amortized through December 2015. In order to monetize the difference in the LIBOR floors, in March 2011, we entered into several additional forward-starting basis-rate swap agreements ("March 2011 swaps") that, when combined with the September 2010 swaps, effectively converted $600$600 million of variable-rate debt to fixed rates beginning in October 2011. The September 2010 swaps and the March 2011 swaps, were jointly designated as cash flow hedges, maturing in December 2015 and had fixed LIBOR at a weighted average rate of 2.46%. For the period that the September 2010 swaps were de-designated, their fair value decreased by $3.3 million, the offset of which have beenwas recognized as a direct charge to earnings and recorded to “Net effect of swaps” on the consolidated statement of operations along with the regular amortization of “Other comprehensive income (loss)” balances related to these swaps. No other ineffectiveness related to these swaps was recorded in any period presented. In May 2011, we entered into four additional forward-starting basis-rate swap agreements ("May 2011 swaps") that effectively converted another $200 million of variable-rate debt to fixed rates beginning in October 2011. These swaps, which were designated as cash flow hedges, mature in December 2015 and fixed LIBOR at a weighted average rate of 2.54%. As a result of the 2013 Credit Agreement, the previously described swaps were de-designated as the spreads of the 2013 Credit Agreement decreased to 75 bps from 100 bps in the Amended 2010 Credit Agreement. The May 2011 swaps remain de-designated as the amount of variable rate debt decreased to $630 million, and accordingly, the May 2011 swaps are now over hedged. On March 4, 2013, we entered into several forward-starting swap agreements ("March 2013 swaps") that were not designated as a cash flow hedge on that date. On March 6, 2013, the March 2013 swaps were combined with the September 2010 swaps and the March 2011 swaps, and designated as cash flow hedges, effectively converting $600 million of variable-rate debt to fixed rates. The September 2010 swaps, the March 2011 swaps, and the March 2013 swaps were jointly designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.46%. In May 2011, we entered into four additional forward-starting basis-rate swap agreements ("May 2011 swaps") that effectively convert another $200 million of variable-rate debt to fixed rates beginning in October 2011. These swaps, which have been designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.54%2.331%. TheAt the time of the de-designation, the fair market value of all $800the September 2010 swaps, March 2011 swaps, and March 2013 swaps was $23.8 million, which will be amortized out of forward-starting swap agreements atAOCI into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive incomethrough December 2015. At the time of the de-designation, the fair market value of the May 2011 swaps was $7.8 million and was immediately recognized into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations.
At March 31, 2013, the fair market value of the September 30, 20122010 swaps, the March 2011 swaps and the March 2013 swaps was a liability of $34.723.4 million, which was recorded in "Derivative Liability"“Derivative Liability” on the condensed consolidated balance sheet. The May 2011 swaps had a fair market value of $7.6 million as of March 31, 2013 and was recorded in “Derivative Liability” on the condensed consolidated balance sheet.
The following table presents our September 2010 swaps, March 2011 swaps, and May 2011 swaps, and March 2013 swaps which became effective on October 1, 2011 and mature December 15, 2015, along with their notional amounts and their effective fixed interest rates. | | | | | | | | ($'s in thousands) | Forward-Starting Interest Rate Swaps | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 2.40 | % | | 75,000 |
| | 2.43 | % | | 50,000 |
| | 2.42 | % | | 150,000 |
| | 2.55 | % | | 50,000 |
| | 2.42 | % | | 50,000 |
| | 2.55 | % | | 25,000 |
| | 2.43 | % | | 50,000 |
| | 2.54 | % | | 30,000 |
| | 2.54 | % | | 70,000 |
| | 2.54 | % | | 50,000 |
| | 2.54 | % | Total $'s / Average Rate | $ | 800,000 |
| | 2.48 | % |
In 2006, we entered into several fixed-rate interest rate swap agreements totaling $1.0 billion. The weighted average fixed-LIBOR rate on these interest rate swaps, which matured on October 1, 2011, was 5.6%. Based upon our scheduled quarterly regression analysis testing of the effectiveness for the accounting treatment of these swaps, as well as changes in the forward interest rate yield curves used in that testing, the swaps were deemed to be ineffective beginning in October 2009 and continued to be deemed ineffective through their maturity. This resulted in the swaps not qualifying for hedge accounting during the fourth quarter of 2009 and through 2010 and the first three quarters of 2011.
In 2007, we entered into two cross-currency swap agreements, which matured in February 2012 and effectively converted $268.7 million of term debt at the time, and the associated interest payments, from U.S. dollar denominated debt at a rate of LIBOR plus
200 bps to 6.3% fixed-rate Canadian dollar denominated debt. As a result of paying down the underlying Canadian term debt with net proceeds from the sale of surplus land near Canada’s Wonderland in August 2009, the notional amounts of the underlying debt and the cross-currency swaps no longer matched. Because of the mismatch of the notional amounts, we determined the swaps were no longer highly effective going forward, resulting in the de-designation of the swaps as of the end of August 2009.
Based on the change in currency exchange rates from the time we originally entered into the cross-currency swap agreements in 2007, the termination liability of the swaps had increased steadily over time. In order to protect ourselves from further downside risk to the swaps' termination value, in May 2011 we entered into several foreign currency swap agreements to fix the exchange rate on 50% of the liability. In July 2011, we fixed the exchange rate on another 25% of the swap liability, leaving only 25% exposed to further fluctuations in currency exchange rates. In February 2012, these swap agreements were settled for $50.5 million.
In addition to other covenants and provisions, including those discussed below, the Amended 2010 Credit Agreement contains an initial three-year requirement (from July 2010) that at least 50% of our aggregate term debt and senior notes be subject to either a fixed interest rate or interest rate protection. As of September 30, 2012, we were in compliance with this requirement.
The following table presents fixed-rate swaps that matured on October 1, 2011. The table also presents our cross-currency swaps that matured on February 15, 2012 and their notional amounts and interest rates as of their maturity date.
| | | | | | | | | | | | | | | ($'s in thousands) | Interest Rate Swaps | | Cross-currency Swaps | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | Interest Rate | | $ | 200,000 |
| | 5.64 | % | | $ | 255,000 |
| | 7.31 | % | | 200,000 |
| | 5.64 | % | | 150 |
| | 9.50 | % | | 200,000 |
| | 5.64 | % | | | | | | 200,000 |
| | 5.57 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | Total $'s / Average Rate | $ | 1,000,000 |
| | 5.62 | % | | $ | 255,150 |
| | 7.31 | % | | | | | | | | |
| | | | | | | | | | | | | | | | Interest Rate Swaps | ($'s in thousands) | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 2.27 | % | | 50,000 |
| | 2.54 | % | | 75,000 |
| | 2.30 | % | | 30,000 |
| | 2.54 | % | | 50,000 |
| | 2.29 | % | | 70,000 |
| | 2.54 | % | | 150,000 |
| | 2.43 | % | | 50,000 |
| | 2.54 | % | | 50,000 |
| | 2.29 | % | | | | | | 50,000 |
| | 2.47 | % | | | | | | 25,000 |
| | 2.30 | % | | | | | Total $'s / Average Rate | $ | 600,000 |
| | 2.33 | % | | $ | 200,000 |
| | 2.54 | % |
The Amended 20102013 Credit Agreement requires us to maintain specified financial ratios, which if breached for any reason, including a decline in operating results due to economic or weather conditions, could result in an event of default under the agreement. The most critical of these ratios is the Consolidated Leverage Ratio, which is measured on a trailing-twelve-month quarterly basis. At the end of the thirdfirst quarter of 2012,2013, this ratio was set at 6.00x6.25x consolidated total debt (excluding the revolving debt)-to-consolidated EBITDA. The ratio will remain at that level through the end of the first quarter in 2014 and will decrease each second quarter beginning in the second quarter of 2014. Based on our trailing-twelve-month results ending September 30, 2012March 31, 2013, our Consolidated Leverage Ratio was 3.89x, providing $138.3148.2 million of EBITDA cushion on the ratio at the end of the thirdfirst quarter. We were in compliance with all other covenants under the Amended 20102013 Credit Agreement as of September 30, 2012March 31, 2013. The Amended 20102013 Credit Agreement allows restricted payments of up to $20$60 million annually so long as no default or event of default has occurred and is continuing. These restricted payments are not subject to any specific covenants. In 2012, additionalAdditional restricted payments are allowed to be made based on an excess-cash-flow formula, should our pro-forma Consolidated Leverage Ratio be less than or equal to 4.50x,5.0x, measured on a trailing-twelve-month quarterly basis. At March 31, 2013, the notes maturing in 2018 have more restrictive covenants than the 2021 notes. The terms of the indenture governing our 2018 notes permit us to make restricted payments of $20 million annually. Our ability to make additional restricted payments in 20122013 and beyond is permitted should our trailing-twelve-month Total-Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 4.75x, measured on a quarterly basis. In accordance with these debt provisions, on August 9, 2012,February 27, 2013, we announced the declaration of a distribution of $0.40$0.625 per limited partner unit, which was paid on September 15, 2012,March 25, 2013, and on November 6, 2012,May 8, 2013 we announced the declaration of a distribution of $0.40$0.625 per limited partner unit, payable DecemberJune 17, 2012, which will bring our total distributions paid in 2012 to $1.60 per limited partner unit.2013. Existing credit facilities and cash flows from operations are expected to be sufficient to meet working capital needs, debt service, partnership distributions and planned capital expenditures for the foreseeable future.
Off Balance Sheet Arrangements: We had $16.5$16.4 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of September 30, 2012March 31, 2013. We have no other significant off-balance sheet financing arrangements.
Forward Looking Statements Some of the statements contained in this report (including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section) that are not historical in nature are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements as to our expectations, beliefs and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond our control and could cause actual results to differ materially from those described in such statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct. Important factors, including those listed under Item 1A in the Company’s Annual Report on Form 10-K, could adversely affect our future financial performance and cause actual results to differ materially from our expectations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks from fluctuations in interest rates, and to a lesser extent on currency exchange rates on our operations in Canada and, from time to time, on imported rides and equipment. The objective of our financial risk management is to reduce the potential negative impact of interest rate and foreign currency exchange rate fluctuations to acceptable levels. We do not acquire market risk sensitive instruments for trading purposes. We manage interest rate risk through the use of a combination of fixed-rate long-term debt, interest rate swaps that fix a portion of our variable-rate long-term debt, and variable-rate borrowings under our revolving credit facility. Translation exposures with regard to our Canadian operations are not hedged. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the change in fair value of the derivative instrument is reported as a component of “Other comprehensive income (loss)” and reclassified into earnings in the period during which the hedged transaction affects earnings. Changes in fair value of derivative instruments that do not qualify as effective hedging activities are reported as “Net effect of swaps” in the consolidated statement of operations. Additionally, the “Other comprehensive income (loss)” related to interest rate swaps that become ineffective is amortized over the remaining life of the interest rate swap, and reported as a component of “Net effect of swaps” in the consolidated statement of operations. As of March 31, 2013, we had $901.3 million of fixed-rate senior unsecured notes and $630 million of variable-rate term debt. After considering the impact of interest rate swap agreements, approximately $1.2 billionvirtually all of our outstanding long-term debt represents fixed-rate debt and approximately $331.1 million represents variable-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $61$50 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt, after the fixed-rate swap agreements, would lead to an increasea decrease of approximately $2.5$0.5 million in annual cash interest costs. A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $5.4$4.4 million decrease in annual operating income.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures - The Partnership maintains a system of controls and procedures designed to ensure that information required to be disclosed by the Partnership in its reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission and that such information is accumulated and communicated to the Partnership’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of September 30, 2012March 31, 2013, the PartnershipPartnership's management has evaluated the effectiveness of the design and operation of itsthe Partnership's disclosure controls and procedures under supervision of management, includingand with the participation of the Partnership's Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Partnership's disclosure controls and procedures are effective.were effective as of March 31, 2013.
(b)Changes in Internal Control Over Financial Reporting - As disclosed in Amendment No. 2 to the Partnership's Form 10-K/A for the fiscal year ended December 31, 2012, in connection with restating the Partnership's consolidated financial statements therein, management identified a material weakness in internal control over financial reporting related to the Partnership's fixed assets, resulting in a conclusion that the Partnership's internal control over financial reporting was not effective as of December 31, 2012. Remediation of this material weakness in internal control over financial reporting was accomplished through the conversion of all composite assets to the unit method of depreciation as of January 1, 2013. The conversion to the unit method eliminates the concept of normal vs. unusual as any and all asset retirements with a remaining net book value will be reflected in the Consolidated Statements of Operations and Comprehensive Income. There were no other changes in the Partnership’s internal controlscontrol over financial reporting in connection with its 2012that occurred during the fiscal quarter ended thirdMarch 31, 2013-quarter evaluation, or subsequent to such evaluation, that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Jacob T. Falfas vs. Cedar Fair, L.P.
On July 23, 2010, Jacob T. (Jack) Falfas, the former Chief Operating Officer, filed a demand for private arbitration as provided by his employment agreement. In that demand, Mr. Falfas disputed the Partnership's position that he had resigned in June 2010, alleging instead that his employment with the Partnership was terminated without cause. That dispute went to private arbitration, and on February 28, 2011, an arbitration panel ruled 2-to-1 in favor of Mr. Falfas finding that he did not resign but was terminated without cause. Rather than fashioning a remedy consistent with the employment agreement, the panel ruled that Mr. Falfas should be reinstated. The Partnership believed that the arbitrators exceeded their authority by creating a remedy not legally available to Mr. Falfas under his contract with Cedar Fair. On March 21, 2011, the Partnership filed an action in Erie County Court of Common Pleas (Case No. 2011 CV 0217) seeking to have the award modified or vacated. On March 22, 2011, Mr. Falfas commenced a related action in the Erie County Court of Common Pleas (Case No. 2011 CV 0218) demanding enforcement of the arbitration ruling. The two actions were combined into Case No. 2011 CV 0217, before Judge Roger E. Binette. On February 22, 2012 the Erie County Common Pleas Court issued a ruling partially vacating the arbitration award and declaring that Mr. Falfas was not entitled to reinstatement of his employment. The ruling also provided that in accord with paragraph 2 of the arbitration award Mr. Falfas was entitled to certain back pay and other benefits under his 2007 Amended and Restated Employment Agreement as if the employment relationship had not been severed. In March of 2012 Mr. Falfas and the Company both filed appeals of the Court's ruling with the Ohio Sixth District Court of Appeals in Toledo, Ohio. The parties participated in mediation on May 7, 2012 at the direction ofOn April 19, 2013 the Court of Appeals.Appeals issued a ruling reversing the Erie County Common Pleas Court's order regarding the reinstatement of Mr. Falfas' employment and affirming the order regarding back pay and other benefits and remanding the case back to the Erie County Common Pleas Court for further proceedings. The mediation did not result inCompany has until June 3, 2013 to file a settlement. As a resultnotice of appeal with the matter will now proceed through the normal appeal process which typically takes six to nine months to complete. Briefs have been filed and the parties are awaiting scheduling of oral argument.Ohio Supreme Court. The Partnership believes the liability recorded as of September 30, 2012March 31, 2013 to be adequate and does not expect the arbitration ruling or the court order to materially affect its financial results in future periods.
ITEM 1A. RISK FACTORS There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.2012.
ITEM 5. OTHER INFORMATION
TheOn May 8, 2013, the Partnership usesannounced that it had identified a historical classification error in the Partnership's initial determination of whether a specific asset retired under the composite method of depreciation methodwas normal or unusual. The error resulted in the overstatement of Income before taxes of $8.8 million for the groupperiod ended December 31, 2011.
Under the composite method of depreciation, no gain or loss is recognized on normal retirements of composite assets. Instead the net book value after salvage of a retired asset reduces accumulated depreciation for the composite group. Abnormal or unusual retirements of composite assets acquiredwould result in the recognition of a gain or loss. The error resulted in the Partnership's application of its qualitative policy used to determine whether an asset retirement is normal or unusual. The asset retirement being restated was originally classified as normal, thus reducing accumulated depreciation. Management identified that the Partnership had failed to consider whether the specific asset had a whole in 1983,substantial net book value and/or if the retirement caused a deviation from the estimated composite depreciation survivor curve as well as for groupsother minor qualitative issues.
The restatement amount of assets$8.8 million is recorded in each subsequent business acquisition. Upon the normalLoss on impairment / retirement of an asset within a composite group, the Partnership's practice generally has been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of the Partnership's financial statements for the interim period ended July 1, 2012, management determined that this methodology was not appropriate. As a result, the Partnership revised the useful lives of its composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation). Management evaluated the amount and nature of these adjustments and concluded that they were not material to either the Partnership's prior annual or quarterly financial statements. Nonetheless, the historical financial statement amounts included in this filing have been corrected for this error. The Partnership expects to likewise correct previously presented historical financial statements to be included in future filings, including the annual financial statements to be includedfixed assets, net in the Partnership's Annual Report on Form 10-K for10-K/A filing to correct the year ending December 31, 2012.previous error.
ForAs disclosed in the year ended December 31, 2011Partnership's prior filings, the correctionPartnership had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation with the change effective January 1, 2013. The Partnership believes that pursuant to generally accepted accounting principles, changing from the composite method of depreciation to the unit method of depreciation is a change in accounting estimate that is effected by a change in accounting principle, which should be accounted for prospectively. The change to the unit method of depreciation eliminates the qualitative judgment needed to determine whether an asset retirement is normal or unusual, as the net book value of all retirements will decrease net income (loss) by $1.4 millionbe recorded in the Consolidated Statements of Operations and the provision (benefit) for taxes will decrease by $0.6 million. For the 2010 annual financial statements, the correction will decrease net income (loss) by $1.5 million and the provision (benefit) for taxes will decrease by $0.6 million. For the 2009 annual financial statements, the correction will decrease net income (loss) by $1.2 million and the provision (benefit) for taxes will decrease $0.4 million. The balance sheet as of December 31, 2011 has already been corrected in this Form 10-Q.Comprehensive Income.
ITEM 6. EXHIBITS | | | | Exhibit (4.1) | | Rights Agreement between Cedar Fair, L.P. and American Stock Transfer and Trust Co., LLC, dated April 5, 2010. Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on April 6, 2010.
| | | | Exhibit (4.2) | | Indenture, by and among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and The Bank of New York Mellon, as trustee, dated as of July 29, 2010 (including form of 9.125% Senior Notes due 2018). Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (4.3) | | Registration Rights Agreement, among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and J.P. Morgan Securities Inc., as representative of the initial purchasers named therein, dated July 29, 2010. Incorporated herein by reference to Exhibit 4.2 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (10.1) | | Cedar Fair, L.P. Amended and Restated Executive Severance Plan dated July 18, 2007. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-09444) filed on August 3, 2007. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) The Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) The Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notes |
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, Inc. | | | | General Partner | | | | | Date: | November 7, 2012May 10, 2013 | /s/ Matthew A. Ouimet | | | Matthew A. Ouimet | | | President and Chief Executive Officer | | | | | Date: | November 7, 2012May 10, 2013 | /s/ Brian C. Witherow | | | Brian C. Witherow | | | Executive Vice President and | | | Chief Financial Officer |
INDEX TO EXHIBITS | | | | Exhibit (4.1) | | Rights Agreement between Cedar Fair, L.P. and American Stock Transfer and Trust Co., LLC, dated April 5, 2010. Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on April 6, 2010.
| | | | Exhibit (4.2) | | Indenture, by and among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and The Bank of New York Mellon, as trustee, dated as of July 29, 2010 (including form of 9.125% Senior Notes due 2018). Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (4.3) | | Registration Rights Agreement, among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and J.P. Morgan Securities Inc., as representative of the initial purchasers named therein, dated July 29, 2010. Incorporated herein by reference to Exhibit 4.2 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (10.1) | | Cedar Fair, L.P. Amended and Restated Executive Severance Plan dated July 18, 2007. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-09444) filed on August 3, 2007. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) The Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) The Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notes |
s in thousands) | Interest Rate Swaps | | Cross-currency Swaps | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments |
Total The following table presents our fixed-rate swaps, which matured in October 2011, and the cross-currency swap which matured in February 2012, along with their notional amounts and their fixed interest rates:
| | | | | | | | | | | | | | | ($'s in thousands) | Interest Rate Swaps | | Cross-currency Swaps | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | Implied Interest Rate | | $ | 200,000 |
| | 5.64 | % | | $ | 255,000 |
| | 7.31 | % | | 200,000 |
| | 5.64 | % | | 150 |
| | 9.50 | % | | 200,000 |
| | 5.64 | % | | | | | | 200,000 |
| | 5.57 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | Total $'s / Average Rate | $ | 1,000,000 |
| | 5.62 | % | | $ | 255,150 |
| | 7.31 | % | | | | | | | | |
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the three-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | Interest rate swaps | | $ | 438 |
| | $ | (17,085 | ) | | Interest Expense | | $ | (2,990 | ) | | $ | — |
| | Net effect of swaps | | $ | — |
| | $ | 15,396 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | Interest rate swaps | | $ | 2,266 |
| | $ | 120 |
| | Interest Expense | | $ | (2,797 | ) | | $ | (2,793 | ) | | Net effect of swaps | | $ | 435 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Three months ended | | Three months ended | | | | 9/30/12 | | 9/25/11 | Cross-currency swaps (1) | | Net effect of swaps | | $ | — |
| | $ | 13,622 |
| Foreign currency swaps | | Net effect of swaps | | — |
| | (13,210 | ) | | | | | $ | — |
| | $ | 412 |
| | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Three months ended | | Three months ended | | | | 3/31/13 | | 3/25/12 | Cross-currency swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (4,999 | ) | Foreign currency swaps | | Net effect of swaps | | — |
| | 6,278 |
| Interest rate swaps (2) | | Net effect of swaps | | (1,471 | ) | | — |
| | | | | $ | (1,471 | ) | | $ | 1,279 |
| | | | | | | |
| | (1) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
| | (2) | The May 2011 interest rate swaps were de-designated in March 2013. |
During the quarter ended September 30, 2012March 31, 2013, in addition to the $1.0 million loss recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.27.8 million of incomeexpense related to the write off of OCI balances on our May 2011 swaps and $0.4 million of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the quarter. The effect of this amortizationthese amounts resulted in a benefitcharge to earnings of $0.29.2 million recorded in “Net effect of swaps.”
For the three-month period ended SeptemberMarch 25, 20112012, in addition to the $15.81.3 million gain recognized in income on the ineffective portion of derivatives noted in the tabletables above, $11.20.5 million of expense representing the amortization of amounts in AOCI for the swaps and $0.60.2 million of foreign currency lossgain in the quarter related to the U.S. dollar denominated Canadian term loan were recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings of $4.0 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the nine-month periods ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Nine months ended | | Nine months ended | | | | Nine months ended | | Nine months ended | | | | Nine months ended | | Nine months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | Interest rate swaps | | $ | (2,308 | ) | | $ | (36,788 | ) | | Interest Expense | | $ | (9,004 | ) | | $ | — |
| | Net effect of swaps | | $ | — |
| | $ | 43,190 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Nine months ended | | Nine months ended | | | | 9/30/12 | | 9/25/11 | Interest rate swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (3,342 | ) | Cross-currency swaps (2) | | Net effect of swaps | | (4,999 | ) | | 15,582 |
| Foreign currency swaps | | Net effect of swaps | | 6,278 |
| | (17,516 | ) | | | | | $ | 1,279 |
| | $ | (5,276 | ) | | | | | | | |
| | (1) | The September 2010 swaps became ineffective and were de-designated in February 2011. |
| | (2) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
For the nine-month period ended September 30, 2012, in addition to the $1.3 million of net gain recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.2 million of expense representing the regular amortization of amounts in AOCI for the swaps and $0.2 million of foreign currency gain in the period related to the U.S. dollar denominated Canadian term loan were recorded in the condensed consolidated statements of operations for the period. The net effect of these amounts resulted in a benefit to earnings for the period of $1.3 million recorded in “Net effect of swaps.”
For the nine-month period ended September 25, 2011, in addition to the $37.9 million gain recognized in income on the ineffective portion of derivatives noted in the table above, $33.9 million of expense representing the amortization of amounts in AOCI for the swaps and $0.5 million of foreign currency loss in the period related to the U.S. dollar denominated Canadian term loan were recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings of $3.51.0 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the twelve-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | | | | 9/30/12 | | 9/25/11 | Interest rate swaps | | $ | (873 | ) | | $ | (26,329 | ) | | Interest Expense | | $ | (12,027 | ) | | $ | — |
| | Net effect of swaps | | $ | 4,797 |
| | $ | 54,613 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (In thousands): | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | | | | 3/31/13 | | 3/25/12 | Interest rate swaps | | $ | 2,286 |
| | $ | (36,088 | ) | | Interest Expense | | $ | (12,031 | ) | | $ | (5,816 | ) | | Net effect of swaps | | $ | 435 |
| | $ | 33,493 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Twelve months ended | | Twelve months ended | | | | 9/30/12 | | 9/25/11 | Interest rate swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (3,342 | ) | Cross-currency swaps (2) | | Net effect of swaps | | (4,483 | ) | | 10,016 |
| Foreign currency swaps | | Net effect of swaps | | 10,129 |
| | (17,516 | ) | | | | | $ | 5,646 |
| | $ | (10,842 | ) | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Twelve months ended | | Twelve months ended | | | | 3/31/13 | | 3/25/12 | Cross-currency swaps (1) | | Net effect of swaps | | — |
| | 12,911 |
| Foreign currency swaps | | Net effect of swaps | | — |
| | (7,387 | ) | Interest rate swaps (2) | | Net effect of swaps | | $ | (1,471 | ) | | $ | — |
| | | | | $ | (1,471 | ) | | $ | 5,524 |
| | | | | | | |
| | (1) | The September 2010 swaps became ineffective and were de-designated in February 2011. |
| | (2) | The cross-currency swaps became ineffective and were de-designated in August 2009. |
| | (2) | The May 2011 interest rate swaps were de-designated in March 2013. |
In addition to the $10.41.0 million of gainloss recognized in income on the ineffective portion of derivatives and on the derivatives not designated as cash flow hedges (as noted in the tables above), $0.17.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $192 thousand of income representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended March 31, 2013 in the condensed consolidated statements of operations. The net effect of these amounts resulted in expense for the trailing twelve month period of $8.7 million recorded in “Net effect of swaps.”
For the twelve month period ending March 25, 2012, in addition to the $39.0 million of gain recognized in income on the ineffective portion of derivatives noted in the tables above, $22.7 million of expense representing the amortization of amounts in AOCI for the swaps and a $0.40.3 million foreign currency gainloss in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended September 30,March 25, 2012 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings for the trailing twelve month period of $10.9 million recorded in “Net effect of swaps.” For the twelve month period ending September 25, 2011, in addition to the $43.8 million of gain recognized in income on the ineffective portion of derivatives noted in the table above, $45.5 million of expense representing the amortization of amounts in AOCI for the swaps and a $0.1 million foreign currency loss in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended September 25, 2011 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a charge to earnings for the trailing twelve month period of $1.816.0 million recorded in “Net effect of swaps.”
The amounts reclassified from AOCI into income for the periods noted above are in large partprimarily the result of the Partnership’s initial three-year requirement to swap at least 75% of its aggregate term debt to fixed rates under the terms of the Amended 2010 Credit Agreement. (7) Fair Value Measurements: The FASB Accounting Standards Codification (ASC) relating to fair value measurements emphasizes that fair value is a market-based measurement that should be determined based on assumptions (inputs) that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable, and valuation techniques used to measure fair value should maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Accordingly, the FASB’s ASC establishes a hierarchal disclosure framework that ranks the quality and reliability of information used to determine fair values. The hierarchy is associated with the level of pricing observability utilized in measuring fair value and defines three levels of inputs to the fair value measurement process—quoted prices are the most reliable valuation inputs, whereas model values that include inputs based on unobservable data are the least reliable. Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety. The three broad levels of inputs defined by the fair value hierarchy are as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The table below presents the balances of assets and liabilities measured at fair value as of September 30, 2012March 31, 2013, December 31, 2011,2012, and SeptemberMarch 25, 20112012 on a recurring basis: | | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | September 30, 2012 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| Net derivative liability | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| | | | | | | | | | December 31, 2011 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,400 | ) | | $ | — |
| | $ | (32,400 | ) | | $ | — |
| Cross-currency swap agreements (2) | | (37,617 | ) | | — |
| | (37,617 | ) | | — |
| Foreign currency swap agreements (2) | | (13,155 | ) | | — |
| | (13,155 | ) | | — |
| Net derivative liability | | $ | (83,172 | ) | | $ | — |
| | $ | (83,172 | ) | | $ | — |
| | | | | | | | | | September 25, 2011 | | | | | | | | | Interest rate swap agreements (1) | | $ | (33,835 | ) | | $ | — |
| | $ | (33,835 | ) | | $ | — |
| Interest rate swap agreements (2) | | (4,797 | ) | | — |
| | (4,797 | ) | | — |
| Cross-currency swap agreements (2) | | (37,723 | ) | | — |
| | (37,723 | ) | | — |
| Foreign currency swap agreements (2) | | (16,846 | ) | | — |
| | (16,846 | ) | | — |
| Net derivative liability | | $ | (93,201 | ) | | $ | — |
| | $ | (93,201 | ) | | $ | — |
|
| | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | March 31, 2013 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (23,388 | ) | | $ | — |
| | $ | (23,388 | ) | | $ | — |
| Interest rate swap agreements (2) | | (7,643 | ) | | — |
| | (7,643 | ) | | — |
| Net derivative liability | | $ | (31,031 | ) | | $ | — |
| | $ | (31,031 | ) | | $ | — |
| | | | | | | | | | December 31, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | March 25, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,280 | ) | | $ | — |
| | $ | (32,280 | ) | | $ | — |
| Net derivative liability | | $ | (32,280 | ) | | $ | — |
| | $ | (32,280 | ) | | $ | — |
|
| | (1) | IncludedDesignated as cash flow hedges and are included in “Derivative Liability” on the Unaudited Condensed Consolidated Balance Sheet |
| | (2) | IncludedNot designated as cash flow hedges and are included in "Current derivative liability""Derivative Liability" on the Unaudited Condensed Consolidated Balance Sheet |
Fair values of the interest rate cross-currency and foreign currency swap agreements are determined using significant inputs, including the LIBOR and foreign currency forward curves, that are considered Level 2 observable market inputs. In addition, the Partnership considered the effect of its credit and non-performance risk on the fair values provided, and recognized an adjustment decreasing the net derivative liability by approximately $1.10.9 million as of September 30, 2012March 31, 2013. There were no assets measured at fair value on a non-recurring basis at September 30, 2012March 31, 2013, December 31, 2011, or SeptemberMarch 25, 20112012, except for as described below. At the end of the third quarter in 2012, the Partnership concluded based on operating results, as well as updated forecasts, and changes in market conditions, that a review of the carrying value of long-lived assets at Wildwater Kingdom was warranted. After performing its review, the Partnership determined that a portion of the park's fixed assets were impaired. Based on Level 3 unobservable valuation assumptions and other market inputs, the assets were marked to a fair value of $19.8 million, resulting in an impairment charge of $25.0 million during the quarter. In 2010, the Partnership concluded based on operating results, as well as updated forecasts, that a review of the carrying value of long-lived assets at California's Great America was warranted. After performing its review, the Partnership determined that a portion of the park's fixed assets, the majority of which were originally recorded with the PPI acquisition, were impaired. As a result, it recognized $62.0 million of fixed-asset impairment during the fourth quarter of 2010.
After completing its 2010 annual review of indefinite-lived intangibles for impairment, the Partnership concluded that a portion of trade-names originally recorded with the PPI acquisition were impaired. As a result, the Partnership recognized approximately $0.9 million of trade-name impairment during the fourth quarter of 2010. A relief-from-royalty model is used to determine whether the fair value of trade-names exceeds their carrying amount. The fair value of the trade-names is determined as the present value of fees avoided by owning the respective trade-name.
The fair value of term debt at September 30, 2012March 31, 2013 was approximately $1,125.7637.1 million based on borrowing rates currently available to the Partnership on long-term debt with similar terms and average maturities. The fair value of the Partnership's notes at September 30, 2012March 31, 2013 was approximately $352.6950.1 million based on borrowing rates availablepublic trading levels as of that date to the Partnership on notes with similar terms and maturities.date. The fair value of the term debt was based on Level 2 inputs and the notes were based on Level 21 inputs.
(8) Earnings per Unit: Net income (loss) per limited partner unit is calculated based on the following unit amounts: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,611 |
| | 55,346 |
| | 55,473 |
| | 55,345 |
| | 55,440 |
| | 55,342 |
| Effect of dilutive units: | | | | | | | | | | | | | Unit options and restricted unit awards | | 45 |
| | — |
| | 42 |
| | — |
| | 31 |
| | — |
| Phantom units | | 336 |
| | 482 |
| | 333 |
| | 502 |
| | 416 |
| | 544 |
| Diluted weighted average units outstanding | | 55,992 |
| | 55,828 |
| | 55,848 |
| | 55,847 |
| | 55,887 |
| | 55,886 |
| Net income (loss) per unit - basic | | $ | 2.53 |
| | $ | 2.75 |
| | $ | 2.01 |
| | $ | 1.29 |
| | $ | 2.00 |
| | $ | 0.15 |
| Net income (loss) per unit - diluted | | $ | 2.51 |
| | $ | 2.73 |
| | $ | 2.00 |
| | $ | 1.28 |
| | $ | 1.98 |
| | $ | 0.15 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Three months ended | | Twelve months ended | | | 3/31/2013 | | 3/25/2012 | | 3/31/2013 | | 3/25/2012 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,854 |
| | 55,378 |
| | 55,694 |
| | 55,353 |
| Effect of dilutive units: | | | | | | | | | Unit options and restricted unit awards | | — |
| | — |
| | 63 |
| | 2 |
| Phantom units | | — |
| | — |
| | 299 |
| | 492 |
| Diluted weighted average units outstanding | | 55,854 |
| | 55,378 |
| | 56,056 |
| | 55,847 |
| Net income (loss) per unit - basic | | $ | (1.95 | ) | | $ | (1.18 | ) | | $ | 1.04 |
| | $ | 1.53 |
| Net income (loss) per unit - diluted | | $ | (1.95 | ) | | $ | (1.18 | ) | | $ | 1.04 |
| | $ | 1.52 |
| | | | | | | | | |
The effect of unit options on the three nine and twelve months ended September 30,March 31, 2013, had they not been out of the money or antidilutive, would have been zero and 16,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three and twelve months ended March 25, 2012, had they not been out of the money or antidilutive, would have been 66,0002,000, 34,000and 36,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three, nine and twelve months ended September 25, 2011, had they not been out of the money or antidilutive, would have been 57,000, 67,000 and 127,00047,000 units, respectively. (9) Income and Partnership Taxes: Under the applicable accounting rules, income taxes are recognized for the amount of taxes payable by the Partnership’s corporate subsidiaries for the current year and for the impact of deferred tax assets and liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. The income tax provision (benefit) for interim periods is determined by applying an estimated annual effective tax rate to the quarterly income (loss) of the Partnership’s corporate subsidiaries. For 2012, the estimated annual effective rate includes the effect of an anticipated adjustment to the valuation allowance that relates to foreign tax credit carry-forwards arising from the corporate subsidiaries. The amount of this adjustment has a disproportionate impact on the annual effective tax rate that results in a significant variation in the customary relationship between the provision for taxes and income before taxes in interim periods. In addition to income taxes on its corporate subsidiaries, the Partnership pays a publicly traded partnership tax (PTP tax) on partnership-level gross income (net revenues less cost of food, merchandise and games). As such, the Partnership’s total provision (benefit) for taxes includes amounts for both the PTP tax and for income taxes on its corporate subsidiaries. During the second quarterAs of 2012 the Partnership adjusted its deferred tax assets and liabilities to reflect the impact of changes to the enacted statutory tax rates in Canada and recorded a corresponding $1.8 million income tax provision. During the first quarter of 20122013 the Partnership accruedhas recorded $1.01.1 million forof unrecognized tax benefits including interest and/or penalties related to state and local tax filing positions. The Partnership recognizes interest and/or penalties related to unrecognized tax benefits in the income tax provision. The Partnership does not anticipate that the balance of the unrecognized tax benefit will change significantly over the next 12 months.
(10) Contingencies:
The Partnership is a party to a number of lawsuits arising in the normal course of business. In the opinion of management, none of these matters is expected to have a material effect in the aggregate on the Partnership's financial statements.
(11) Immaterial Restatement:
We have made two separate corrections relating to our use of the composite depreciation method.
The Partnership usesfirst correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the 3 and 12 month periods ended March 25, 2012, related to a misapplication of the composite depreciation method for the group of assets acquired as a whole in 1983, as well as for groups of assets in each subsequent business acquisition.method. Upon the normal retirement of an asset within a composite group, the Partnership'sour practice generally hashad been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of the Partnership'sour financial statements for the three months ended July 1,in 2012, management determined that this methodology was not appropriate. As a result, the Partnershipwe revised the useful lives of itsour composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation). Management evaluated
The second correction, which impacts the amountBalance Sheet at March 25, 2012 and naturethe Statement of these adjustmentsOperations and concludedOther Comprehensive Income for the 12 month period ended March 25, 2012, reflects a subsequent determination that they werea disposition from our composite group of assets was considered to be unusual. In certain situations under the composite method, disposals are considered unusual and, accordingly, losses are not materialincluded in the composite depreciation pool but are rather charged immediately to eitherexpense. In 2013, the Partnership's prior annual or quarterly financial statements. Nonetheless,initial determination of whether a specific asset retired under the historical financial statement amounts includedcomposite method of depreciation in this filing have been corrected for this error. The Partnership expects to likewise correct previously presented2011 was normal was reviewed in connection with responding
historical financial statements to an open SEC comment letter. We ultimately concluded that such disposition was unusual and that a $8.8 millioncharge should be included in future filings, including the annual financial statements to be includedreflected in the Partnership's Annual Report on Form 10-K for the year ending December 31, 2012.2011 financial statements.
The tables below detailreflect the effectsimpact on the financial statements of such depreciation adjustments (including the related deferred income tax impact)corrections as described above. The "As originally filed" amounts represent amounts as filed in the Partnership's 1st quarter 2012 Form 10-Q . The "As restated" amounts in all columns represent amounts after restatement for the first correction which was disclosed in the Partnership's 2nd quarter Form 10-Q and the second correction which was disclosed in the Partnership's 2012 Annual Report on previously presented historical financial statement amounts:Form 10-K/A filed on May 10, 2013.
| | | | | | | | | Balance Sheets | | | | | 12/31/2011 | | 9/25/2011 | Accumulated depreciation | | | | As originally filed | $ | (1,044,589 | ) | | $ | (1,044,353 | ) | Correction | (18,599 | ) | | (18,252 | ) | As restated | $ | (1,063,188 | ) | | $ | (1,062,605 | ) | Total assets | | | | As originally filed | $ | 2,074,557 |
| | $ | 2,159,339 |
| Correction | (18,599 | ) | | (18,252 | ) | As restated | $ | 2,055,958 |
| | $ | 2,141,087 |
| Deferred Tax Liability | | | | As originally filed | $ | 135,446 |
| | $ | 125,588 |
| Correction | (1,679 | ) | | (1,615 | ) | As restated | $ | 133,767 |
| | $ | 123,973 |
| Limited Partners' Equity | | | | As originally filed | $ | 182,438 |
| | $ | 221,611 |
| Correction | (16,920 | ) | | (16,637 | ) | As restated | $ | 165,518 |
| | $ | 204,974 |
|
| | | | | Balance Sheet | | (In thousands) | 3/25/2012 | Accumulated depreciation | | As originally filed | $ | (1,046,162 | ) | Corrections | (27,622 | ) | As restated | $ | (1,073,784 | ) | Total assets | | As originally filed | $ | 2,113,126 |
| Corrections | (27,622 | ) | As restated | $ | 2,085,504 |
| Deferred Tax Liability | | As originally filed | $ | 135,746 |
| Corrections | (5,019 | ) | As restated | $ | 130,727 |
| Limited Partners' Equity | | As originally filed | $ | 96,417 |
| Corrections | (22,603 | ) | As restated | $ | 73,814 |
|
| | | | | | | | | | | | | | Statements of Operations and Other Comprehensive Income | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/25/2011 | | 9/25/2011 | | 9/25/2011 | Depreciation and amortization | | | | | | | As originally filed | | $ | 62,619 |
| | $ | 109,173 |
| | $ | 124,345 |
| Correction | | 829 |
| | 1,684 |
| | 2,037 |
| As restated | | $ | 63,448 |
| | $ | 110,857 |
| | $ | 126,382 |
| Income (loss) before tax | | | | | | | As originally filed | | $ | 190,891 |
| | $ | 95,031 |
| | $ | (2,271 | ) | Correction | | (829 | ) | | (1,684 | ) | | (2,037 | ) | As restated | | $ | 190,062 |
| | $ | 93,347 |
| | $ | (4,308 | ) | Provision (benefit) for taxes | | | | | As originally filed | | $ | 38,161 |
| | $ | 22,327 |
| | $ | (11,808 | ) | Correction | | (317 | ) | | (554 | ) | | (616 | ) | As restated | | $ | 37,844 |
| | $ | 21,773 |
| | $ | (12,424 | ) | Net income (loss) | | | | | As originally filed | | $ | 152,730 |
| | $ | 72,704 |
| | $ | 9,537 |
| Correction | | (512 | ) | | (1,130 | ) | | (1,421 | ) | As restated | | $ | 152,218 |
| | $ | 71,574 |
| | $ | 8,116 |
| | | | | | | | Basic earnings per limited partner unit: | | | | | As originally filed | | $ | 2.76 |
| | $ | 1.31 |
| | $ | 0.17 |
| Correction | | (0.01 | ) | | (0.02 | ) | | (0.02 | ) | As restated | | $ | 2.75 |
| | $ | 1.29 |
| | $ | 0.15 |
| | | | | | | | Diluted earnings per limited partner unit: | | | | | As originally filed | | $ | 2.74 |
| | $ | 1.30 |
| | $ | 0.17 |
| Correction | | (0.01 | ) | | (0.02 | ) | | (0.02 | ) | As restated | | $ | 2.73 |
| | $ | 1.28 |
| | $ | 0.15 |
|
| | | | | | | | | | Statements of Operations and Other Comprehensive Income | (In thousands except per unit amounts) | | Three months ended | | Twelve months ended | | | 3/25/2012 | | 3/25/2012 | Depreciation and amortization | | | | | As originally filed | | $ | 3,846 |
| | $ | 123,861 |
| Corrections | | 233 |
| | 2,031 |
| As restated | | $ | 4,079 |
| | $ | 125,892 |
| Loss on impairment / retirement of fixed assets, net | | | | | As originally filed | | $ | 92 |
| | $ | 2,461 |
| Corrections | | — |
| | 8,790 |
| As restated | | $ | 92 |
| | $ | 11,251 |
| Income (loss) before tax | | | | | As originally filed | | $ | (86,721 | ) | | $ | 101,565 |
| Corrections | | (233 | ) | | (10,821 | ) | As restated | | $ | (86,954 | ) | | $ | 90,744 |
| Provision (benefit) for taxes | | | As originally filed | | $ | (21,539 | ) | | $ | 9,897 |
| Corrections | | — |
| | (3,960 | ) | As restated | | $ | (21,539 | ) | | $ | 5,937 |
| Net income (loss) | | | As originally filed | | $ | (65,182 | ) | | $ | 91,668 |
| Corrections | | (233 | ) | | (6,861 | ) | As restated | | $ | (65,415 | ) | | $ | 84,807 |
| | | | | | Basic earnings per limited partner unit: | | | As originally filed | | $ | (1.18 | ) | | $ | 1.66 |
| Corrections | | — |
| | (0.13 | ) | As restated | | $ | (1.18 | ) | | $ | 1.53 |
| | | | | | Diluted earnings per limited partner unit: | | | As originally filed | | $ | (1.18 | ) | | $ | 1.64 |
| Corrections | | — |
| | (0.12 | ) | As restated | | $ | (1.18 | ) | | $ | 1.52 |
|
(12) Changes in Accumulated Other Comprehensive Income by Component:
(12)The following tables reflect the changes in Accumulated other comprehensive income (loss) related to limited partners' equity for the period ended March 31, 2013:
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | | Gains and | | | | | | | | Losses on | | Foreign | | | | | | Cash Flow | | Currency | | | | | | Hedges | | Items | | Total | Balance at December 31, 2012 | | $ | (25,749 | ) | | $ | (2,751 | ) | | $ | (28,500 | ) | | | | | | | | | | Other comprehensive | | | | | | | | income before | | | | | | | | reclassifications | | 1,940 |
| | 301 |
| | 301 |
| | | | | | | | | | Amounts reclassified | | | | | | | | from accumulated | | | | | | | | other comprehensive | | | | | | | | income (2) | | 6,945 |
| | — |
| | 8,885 |
| | | | | | | | | Net current-period other | | | | | | | comprehensive income | | 8,885 |
| | 301 |
| | 9,186 |
| | | | | | | | | March 31, 2013 | | $ | (16,864 | ) | | $ | (2,450 | ) | | $ | (19,314 | ) |
(1) All amounts are net of tax. Amounts in parentheses indicate debits. (2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.
| | | | | | | | | | | Reclassifications Out of Accumulated Other Comprehensive Income (1) | (In thousands) | | | | | | | | Details about Accumulated Other Comprehensive Income Components | | Amount Reclassified from Accumulated Other Comprehensive Income | | Affected Line Item in the Statement Where Net Income is Presented | Gains and losses on cash flow hedges | | | | | | | Interest rate contracts | | $ | 8,174 |
| | | Net effect of swaps | | | | $ | 8,174 |
| | | Total before tax | | | | (1,229 | ) | | | Provision (benefit) for taxes | | | | $ | 6,945 |
| | | Net of tax |
(1) Amounts in parentheses indicate debits.
(13) Consolidating Financial Information of Guarantors and Issuers:
Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), and Magnum Management Corporation ("Magnum") are the co-issuers of the Partnership's 9.125% notes and the 5.25% notes (see Note 5). The notes have been fully and unconditionally guaranteed, on a joint and several basis, by each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum) that guarantees the Partnership's senior secured credit facilities. There are no non-guarantor subsidiaries.
The following consolidating schedules present condensed financial information for Cedar Fair, L.P., Cedar Canada, and Magnum, the co-issuers, and each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum), the guarantors (on a combined basis), as of September 30, 2012March 31, 2013, December 31, 2011,2012, and SeptemberMarch 25, 20112012 and for the three nine and twelve month periods ended
September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, we have included the accompanying condensed consolidating financial statements.
Since Cedar Fair, L.P., Cedar Canada and Magnum are co-issuers of the notes and co-borrowers under the Amended 20102013 Credit Agreement, all outstanding debt has been equally reflected within each co-issuer's September 30, 2012March 31, 2013, December 31, 20112012 and SeptemberMarch 25, 20112012 balance sheets in the accompanying condensed consolidating financial statements.
The consolidating financial information has been corrected for the information described in Note 11.12.
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
September 30, 2012
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| Receivables | | 3 |
| | 108,211 |
| | 64,153 |
| | 478,372 |
| | (621,382 | ) | | 29,357 |
| Inventories | | — |
| | 1,584 |
| | 2,742 |
| | 29,267 |
| | — |
| | 33,593 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Income tax refundable | | — |
| | — |
| | 10,454 |
| | — |
| | — |
| | 10,454 |
| Other current assets | | 929 |
| | 2,065 |
| | 674 |
| | 3,775 |
| | — |
| | 7,443 |
| | | 43,932 |
| | 120,362 |
| | 119,073 |
| | 525,309 |
| | (621,382 | ) | | 187,294 |
| Property and Equipment (net) | | 425,747 |
| | 1,025 |
| | 272,951 |
| | 864,121 |
| | — |
| | 1,563,844 |
| Investment in Park | | 577,612 |
| | 791,617 |
| | 118,514 |
| | 63,384 |
| | (1,551,127 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 127,384 |
| | 111,218 |
| | — |
| | 247,663 |
| Other Intangibles, net | | — |
| | — |
| | 18,039 |
| | 22,826 |
| | — |
| | 40,865 |
| Deferred Tax Asset | | — |
| | 39,320 |
| | — |
| | — |
| | (39,320 | ) | | — |
| Intercompany Receivable | | 877,208 |
| | 1,069,721 |
| | 1,116,623 |
| | — |
| | (3,063,552 | ) | | — |
| Other Assets | | 23,361 |
| | 15,580 |
| | 8,925 |
| | 2,305 |
| | — |
| | 50,171 |
| | | $ | 1,956,921 |
| | $ | 2,037,625 |
| | $ | 1,781,509 |
| | $ | 1,589,163 |
| | $ | (5,275,381 | ) | | $ | 2,089,837 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 210,936 |
| | $ | 116,160 |
| | $ | 29,248 |
| | $ | 287,634 |
| | $ | (621,382 | ) | | $ | 22,596 |
| Deferred revenue | | — |
| | — |
| | 4,544 |
| | 30,138 |
| | — |
| | 34,682 |
| Accrued interest | | 735 |
| | 195 |
| | 6,082 |
| | — |
| | — |
| | 7,012 |
| Accrued taxes | | 5,818 |
| | 42,090 |
| | — |
| | 4,496 |
| | — |
| | 52,404 |
| Accrued salaries, wages and benefits | | — |
| | 24,864 |
| | 2,365 |
| | 8,990 |
| | — |
| | 36,219 |
| Self-insurance reserves | | — |
| | 4,751 |
| | 1,698 |
| | 16,643 |
| | — |
| | 23,092 |
| Other accrued liabilities | | 824 |
| | 4,097 |
| | 2,417 |
| | 3,505 |
| | — |
| | 10,843 |
| | | 218,313 |
| | 192,157 |
| | 46,354 |
| | 351,406 |
| | (621,382 | ) | | 186,848 |
| Deferred Tax Liability | | — |
| | — |
| | 59,462 |
| | 122,952 |
| | (39,320 | ) | | 143,094 |
| Derivative Liability | | 20,801 |
| | 13,907 |
| | — |
| | — |
| | — |
| | 34,708 |
| Other Liabilities | | — |
| | 3,880 |
| | — |
| | 3,500 |
| | — |
| | 7,380 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,131,100 |
| | 1,131,100 |
| | 1,131,100 |
| | — |
| | (2,262,200 | ) | | 1,131,100 |
| Notes | | 400,676 |
| | 400,676 |
| | 400,676 |
| | — |
| | (801,352 | ) | | 400,676 |
| | | 1,531,776 |
| | 1,531,776 |
| | 1,531,776 |
| | — |
| | (3,063,552 | ) | | 1,531,776 |
| | | | | | | | | | | | | | Equity | | 186,031 |
| | 295,905 |
| | 143,917 |
| | 1,111,305 |
| | (1,551,127 | ) | | 186,031 |
| | | $ | 1,956,921 |
| | $ | 2,037,625 |
| | $ | 1,781,509 |
| | $ | 1,589,163 |
| | $ | (5,275,381 | ) | | $ | 2,089,837 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2011
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 512 |
| | $ | 31,540 |
| | $ | 3,472 |
| | $ | — |
| | $ | 35,524 |
| Receivables | | — |
| | 62,408 |
| | 69,285 |
| | 412,095 |
| | (536,177 | ) | | 7,611 |
| Inventories | | — |
| | 1,547 |
| | 2,703 |
| | 28,819 |
| | — |
| | 33,069 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Other current assets | | 508 |
| | 13,461 |
| | 1,027 |
| | 7,822 |
| | (10,852 | ) | | 11,966 |
| | | 508 |
| | 84,167 |
| | 105,327 |
| | 455,542 |
| | (547,029 | ) | | 98,515 |
| Property and Equipment (net) | | 455,579 |
| | 1,044 |
| | 266,111 |
| | 896,758 |
| | — |
| | 1,619,492 |
| Investment in Park | | 518,819 |
| | 661,251 |
| | 118,385 |
| | 40,481 |
| | (1,338,936 | ) | | — |
| Intercompany Note Receivable | | — |
| | 93,845 |
| | — |
| | — |
| | (93,845 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 123,210 |
| | 111,219 |
| | — |
| | 243,490 |
| Other Intangibles, net | | — |
| | — |
| | 17,448 |
| | 22,825 |
| | — |
| | 40,273 |
| Deferred Tax Asset | | — |
| | 47,646 |
| | — |
| | — |
| | (47,646 | ) | | — |
| Intercompany Receivable | | 887,344 |
| | 1,084,112 |
| | 1,141,302 |
| | — |
| | (3,112,758 | ) | | — |
| Other Assets | | 27,641 |
| | 16,158 |
| | 9,353 |
| | 1,036 |
| | — |
| | 54,188 |
| | | $ | 1,898,952 |
| | $ | 1,988,223 |
| | $ | 1,781,136 |
| | $ | 1,527,861 |
| | $ | (5,140,214 | ) | | $ | 2,055,958 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 15,921 |
| | $ | 15,921 |
| | $ | 15,921 |
| | $ | — |
| | $ | (31,842 | ) | | $ | 15,921 |
| Accounts payable | | 175,968 |
| | 144,868 |
| | 25,631 |
| | 202,566 |
| | (536,177 | ) | | 12,856 |
| Deferred revenue | | — |
| | — |
| | 2,891 |
| | 26,703 |
| | — |
| | 29,594 |
| Accrued interest | | 198 |
| | 131 |
| | 15,433 |
| | — |
| | — |
| | 15,762 |
| Accrued taxes | | 3,909 |
| | — |
| | 7,374 |
| | 15,577 |
| | (10,852 | ) | | 16,008 |
| Accrued salaries, wages and benefits | | — |
| | 26,916 |
| | 1,076 |
| | 5,396 |
| | — |
| | 33,388 |
| Self-insurance reserves | | — |
| | 3,977 |
| | 1,711 |
| | 15,555 |
| | — |
| | 21,243 |
| Current derivative liability | | — |
| | — |
| | 50,772 |
| | — |
| | — |
| | 50,772 |
| Other accrued liabilities | | 1,247 |
| | 5,568 |
| | 252 |
| | 832 |
| | — |
| | 7,899 |
| | | 197,243 |
| | 197,381 |
| | 121,061 |
| | 266,629 |
| | (578,871 | ) | | 203,443 |
| Deferred Tax Liability | | — |
| | — |
| | 58,463 |
| | 122,950 |
| | (47,646 | ) | | 133,767 |
| Derivative Liability | | 19,451 |
| | 12,949 |
| | — |
| | — |
| | — |
| | 32,400 |
| Other Liabilities | | — |
| | 4,090 |
| | — |
| | — |
| | — |
| | 4,090 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 93,845 |
| | (93,845 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,140,179 |
| | 1,140,179 |
| | 1,140,179 |
| | — |
| | (2,280,358 | ) | | 1,140,179 |
| Notes | | 400,279 |
| | 400,279 |
| | 400,279 |
| | — |
| | (800,558 | ) | | 400,279 |
| | | 1,540,458 |
| | 1,540,458 |
| | 1,540,458 |
| | — |
| | (3,080,916 | ) | | 1,540,458 |
| | | | | | | | | | | | | | Equity | | 141,800 |
| | 233,345 |
| | 61,154 |
| | 1,044,437 |
| | (1,338,936 | ) | | 141,800 |
| | | $ | 1,898,952 |
| | $ | 1,988,223 |
| | $ | 1,781,136 |
| | $ | 1,527,861 |
| | $ | (5,140,214 | ) | | $ | 2,055,958 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING BALANCE SHEET September 25, 2011March 31, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| Receivables | | 3 |
| | 45,663 |
| | 81,773 |
| | 587,910 |
| | (676,810 | ) | | 38,539 |
| Inventories | | — |
| | 1,684 |
| | 2,951 |
| | 32,311 |
| | — |
| | 36,946 |
| Current deferred tax asset | | — |
| | 1,686 |
| | 779 |
| | 3,409 |
| | — |
| | 5,874 |
| Other current assets | | 875 |
| | 2,091 |
| | 774 |
| | 5,559 |
| | — |
| | 9,299 |
| | | 49,878 |
| | 53,613 |
| | 122,750 |
| | 637,539 |
| | (676,810 | ) | | 186,970 |
| Property and Equipment (net) | | 455,663 |
| | 1,055 |
| | 257,802 |
| | 900,759 |
| | — |
| | 1,615,279 |
| Investment in Park | | 534,400 |
| | 681,893 |
| | 118,514 |
| | 53,988 |
| | (1,388,795 | ) | | — |
| Intercompany Note Receivable | | — |
| | 269,500 |
| | — |
| | — |
| | (269,500 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 121,869 |
| | 111,219 |
| | — |
| | 242,149 |
| Other Intangibles, net | | — |
| | — |
| | 17,258 |
| | 22,809 |
| | — |
| | 40,067 |
| Deferred Tax Asset | | — |
| | 49,845 |
| | — |
| | — |
| | (49,845 | ) | | — |
| Intercompany Receivable | | 887,219 |
| | 1,083,987 |
| | 1,141,302 |
| | — |
| | (3,112,508 | ) | | — |
| Other Assets | | 28,962 |
| | 16,884 |
| | 9,616 |
| | 1,160 |
| | — |
| | 56,622 |
| | | $ | 1,965,183 |
| | $ | 2,156,777 |
| | $ | 1,789,111 |
| | $ | 1,727,474 |
| | $ | (5,497,458 | ) | | $ | 2,141,087 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 189,887 |
| | $ | 281,605 |
| | $ | 27,488 |
| | $ | 206,288 |
| | $ | (676,810 | ) | | $ | 28,458 |
| Deferred revenue | | — |
| | — |
| | 3,701 |
| | 28,993 |
| | — |
| | 32,694 |
| Accrued interest | | 6,115 |
| | 1,364 |
| | 6,489 |
| | — |
| | — |
| | 13,968 |
| Accrued taxes | | 5,189 |
| | 23,550 |
| | — |
| | 4,354 |
| | — |
| | 33,093 |
| Accrued salaries, wages and benefits | | — |
| | 29,373 |
| | 2,341 |
| | 9,395 |
| | — |
| | 41,109 |
| Self-insurance reserves | | — |
| | 3,130 |
| | 1,658 |
| | 17,154 |
| | — |
| | 21,942 |
| Current derivative liability | | 4,797 |
| | — |
| | 54,569 |
| | — |
| | — |
| | 59,366 |
| Other accrued liabilities | | 1,206 |
| | 4,840 |
| | 1,277 |
| | 4,924 |
| | — |
| | 12,247 |
| | | 207,194 |
| | 343,862 |
| | 97,523 |
| | 271,108 |
| | (676,810 | ) | | 242,877 |
| Deferred Tax Liability | | — |
| | — |
| | 61,405 |
| | 112,413 |
| | (49,845 | ) | | 123,973 |
| Derivative Liability | | 20,459 |
| | 13,376 |
| | — |
| | — |
| | — |
| | 33,835 |
| Other Liabilities | | — |
| | 2,872 |
| | — |
| | — |
| | — |
| | 2,872 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 269,500 |
| | (269,500 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,156,100 |
| | 1,156,100 |
| | 1,156,100 |
| | — |
| | (2,312,200 | ) | | 1,156,100 |
| Notes | | 400,154 |
| | 400,154 |
| | 400,154 |
| | — |
| | (800,308 | ) | | 400,154 |
| | | 1,556,254 |
| | 1,556,254 |
| | 1,556,254 |
| | — |
| | (3,112,508 | ) | | 1,556,254 |
| | | | | | | | | | | | | | Equity | | 181,276 |
| | 240,413 |
| | 73,929 |
| | 1,074,453 |
| | (1,388,795 | ) | | 181,276 |
| | | $ | 1,965,183 |
| | $ | 2,156,777 |
| | $ | 1,789,111 |
| | $ | 1,727,474 |
| | $ | (5,497,458 | ) | | $ | 2,141,087 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| Receivables | | 682 |
| | 79,472 |
| | 67,302 |
| | 436,595 |
| | (570,709 | ) | | 13,342 |
| Inventories | | — |
| | 3,645 |
| | 3,032 |
| | 32,386 |
| | — |
| | 39,063 |
| Current deferred tax asset | | — |
| | 31,543 |
| | 816 |
| | 3,663 |
| | — |
| | 36,022 |
| Other current assets | | 207 |
| | 9,630 |
| | 1,618 |
| | 16,260 |
| | — |
| | 27,715 |
| | | 889 |
| | 125,022 |
| | 76,893 |
| | 494,085 |
| | (570,709 | ) | | 126,180 |
| Property and Equipment (net) | | 457,484 |
| | 1,003 |
| | 262,941 |
| | 849,424 |
| | — |
| | 1,570,852 |
| Investment in Park | | 419,501 |
| | 714,013 |
| | 115,401 |
| | 21,689 |
| | (1,270,604 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 123,374 |
| | 111,218 |
| | — |
| | 243,653 |
| Other Intangibles, net | | — |
| | — |
| | 17,470 |
| | 22,853 |
| | — |
| | 40,323 |
| Deferred Tax Asset | | — |
| | 34,890 |
| | — |
| | 90 |
| | (34,980 | ) | | — |
| Intercompany Receivable | | 877,336 |
| | 1,165,652 |
| | 1,211,522 |
| | — |
| | (3,254,510 | ) | | — |
| Other Assets | | 14,581 |
| | 10,291 |
| | 7,473 |
| | 2,303 |
| | — |
| | 34,648 |
| | | $ | 1,778,852 |
| | $ | 2,050,871 |
| | $ | 1,815,074 |
| | $ | 1,501,662 |
| | $ | (5,130,803 | ) | | $ | 2,015,656 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 103,654 |
| | 215,425 |
| | 3,891 |
| | 285,182 |
| | (570,709 | ) | | 37,443 |
| Deferred revenue | | — |
| | — |
| | 6,679 |
| | 59,505 |
| | — |
| | 66,184 |
| Accrued interest | | 1,444 |
| | 916 |
| | 5,979 |
| | — |
| | — |
| | 8,339 |
| Accrued taxes | | 4,790 |
| | 390 |
| | 331 |
| | 3,489 |
| | — |
| | 9,000 |
| Accrued salaries, wages and benefits | | — |
| | 13,483 |
| | 1,095 |
| | 5,604 |
| | — |
| | 20,182 |
| Self-insurance reserves | | — |
| | 5,324 |
| | 1,696 |
| | 16,537 |
| | — |
| | 23,557 |
| Other accrued liabilities | | 589 |
| | 5,161 |
| | 133 |
| | 1,984 |
| | — |
| | 7,867 |
| | | 116,777 |
| | 246,999 |
| | 26,104 |
| | 372,301 |
| | (583,309 | ) | | 178,872 |
| Deferred Tax Liability | | — |
| | — |
| | 62,700 |
| | 126,867 |
| | (34,980 | ) | | 154,587 |
| Derivative Liability | | 18,594 |
| | 12,437 |
| | — |
| | — |
| | — |
| | 31,031 |
| Other Liabilities | | — |
| | 4,185 |
| | — |
| | 3,500 |
| | — |
| | 7,685 |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 96,000 |
| | 96,000 |
| | 96,000 |
| | — |
| | (192,000 | ) | | 96,000 |
| Term debt | | 623,700 |
| | 623,700 |
| | 623,700 |
| | — |
| | (1,247,400 | ) | | 623,700 |
| Notes | | 901,255 |
| | 901,255 |
| | 901,255 |
| | — |
| | (1,802,510 | ) | | 901,255 |
| | | 1,620,955 |
| | 1,620,955 |
| | 1,620,955 |
| | — |
| | (3,241,910 | ) | | 1,620,955 |
| | | | | | | | | | | | | | Equity | | 22,526 |
| | 166,295 |
| | 105,315 |
| | 998,994 |
| | (1,270,604 | ) | | 22,526 |
| | | $ | 1,778,852 |
| | $ | 2,050,871 |
| | $ | 1,815,074 |
| | $ | 1,501,662 |
| | $ | (5,130,803 | ) | | $ | 2,015,656 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOMEBALANCE SHEET For the Three Months Ended September 30,December 31, 2012 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 79,663 |
| | $ | 141,134 |
| | $ | 88,334 |
| | $ | 464,902 |
| | $ | (220,588 | ) | | $ | 553,445 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,447 |
| | 40,906 |
| | — |
| | 47,353 |
| Operating expenses | | 1,368 |
| | 74,191 |
| | 18,736 |
| | 289,604 |
| | (220,588 | ) | | 163,311 |
| Selling, general and administrative | | 1,853 |
| | 32,627 |
| | 4,822 |
| | 13,691 |
| | — |
| | 52,993 |
| Depreciation and amortization | | 19,209 |
| | 10 |
| | 9,430 |
| | 32,098 |
| | — |
| | 60,747 |
| Loss on impairment / retirement of fixed assets, net | | 25,000 |
| | — |
| | — |
| | — |
| | — |
| | 25,000 |
| | | 47,430 |
| | 106,828 |
| | 39,435 |
| | 376,299 |
| | (220,588 | ) | | 349,404 |
| Operating income | | 32,233 |
| | 34,306 |
| | 48,899 |
| | 88,603 |
| | — |
| | 204,041 |
| Interest expense (income), net | | 12,213 |
| | 7,258 |
| | 9,897 |
| | (2,518 | ) | | — |
| | 26,850 |
| Net effect of swaps | | (104 | ) | | (71 | ) | | — |
| | — |
| | — |
| | (175 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (15,035 | ) | | — |
| | — |
| | (15,035 | ) | Other (income) expense | | 186 |
| | (2,043 | ) | | 512 |
| | 1,345 |
| | — |
| | — |
| Income from investment in affiliates | | (125,311 | ) | | (79,600 | ) | | (11,138 | ) | | (45,137 | ) | | 261,186 |
| | — |
| Income before taxes | | 145,249 |
| | 108,762 |
| | 64,663 |
| | 134,913 |
| | (261,186 | ) | | 192,401 |
| Provision for taxes | | 4,561 |
| | 9,777 |
| | 17,181 |
| | 20,194 |
| | — |
| | 51,713 |
| Net income | | $ | 140,688 |
| | $ | 98,985 |
| | $ | 47,482 |
| | $ | 114,719 |
| | $ | (261,186 | ) | | $ | 140,688 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (563 | ) | | — |
| | (563 | ) | | — |
| | 563 |
| | (563 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (234 | ) | | 48 |
| | — |
| | — |
| | (48 | ) | | (234 | ) | Other comprehensive income (loss), (net of tax) | | (797 | ) | | 48 |
| | (563 | ) | | — |
| | 515 |
| | (797 | ) | Total Comprehensive Income | | $ | 139,891 |
| | $ | 99,033 |
| | $ | 46,919 |
| | $ | 114,719 |
| | $ | (260,671 | ) | | $ | 139,891 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 25,000 |
| | $ | 444 |
| | $ | 50,173 |
| | $ | 3,213 |
| | $ | — |
| | $ | 78,830 |
| Receivables | | 4 |
| | 101,093 |
| | 71,099 |
| | 498,555 |
| | (652,559 | ) | | 18,192 |
| Inventories | | — |
| | 1,724 |
| | 2,352 |
| | 23,764 |
| | — |
| | 27,840 |
| Current deferred tax asset | | — |
| | 3,705 |
| | 816 |
| | 3,663 |
| | — |
| | 8,184 |
| Other current assets | | 563 |
| | 17,858 |
| | 530 |
| | 5,490 |
| | (16,381 | ) | | 8,060 |
| | | 25,567 |
| | 124,824 |
| | 124,970 |
| | 534,685 |
| | (668,940 | ) | | 141,106 |
| Property and Equipment (net) | | 439,506 |
| | 1,013 |
| | 268,157 |
| | 835,596 |
| | — |
| | 1,544,272 |
| Investment in Park | | 485,136 |
| | 772,183 |
| | 115,401 |
| | 53,790 |
| | (1,426,510 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 125,942 |
| | 111,218 |
| | — |
| | 246,221 |
| Other Intangibles, net | | — |
| | — |
| | 17,835 |
| | 22,817 |
| | — |
| | 40,652 |
| Deferred Tax Asset | | — |
| | 36,443 |
| | — |
| | 90 |
| | (36,533 | ) | | — |
| Intercompany Receivable | | 877,612 |
| | 1,070,125 |
| | 1,116,623 |
| | — |
| | (3,064,360 | ) | | — |
| Other Assets | | 22,048 |
| | 14,832 |
| | 8,419 |
| | 2,315 |
| | — |
| | 47,614 |
| | | $ | 1,858,930 |
| | $ | 2,019,420 |
| | $ | 1,777,347 |
| | $ | 1,560,511 |
| | $ | (5,196,343 | ) | | $ | 2,019,865 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 147,264 |
| | $ | 213,279 |
| | $ | 16,101 |
| | $ | 286,649 |
| | $ | (652,559 | ) | | $ | 10,734 |
| Deferred revenue | | — |
| | — |
| | 4,996 |
| | 34,489 |
| | — |
| | 39,485 |
| Accrued interest | | 98 |
| | 64 |
| | 15,350 |
| | — |
| | — |
| | 15,512 |
| Accrued taxes | | 4,518 |
| | — |
| | 6,239 |
| | 23,437 |
| | (16,381 | ) | | 17,813 |
| Accrued salaries, wages and benefits | | — |
| | 17,932 |
| | 1,214 |
| | 5,690 |
| | — |
| | 24,836 |
| Self-insurance reserves | | — |
| | 5,528 |
| | 1,754 |
| | 16,624 |
| | — |
| | 23,906 |
| Other accrued liabilities | | 1,110 |
| | 2,502 |
| | 140 |
| | 2,164 |
| | — |
| | 5,916 |
| | | 152,990 |
| | 239,305 |
| | 45,794 |
| | 369,053 |
| | (668,940 | ) | | 138,202 |
| Deferred Tax Liability | | — |
| | — |
| | 63,460 |
| | 126,865 |
| | (36,533 | ) | | 153,792 |
| Derivative Liability | | 19,309 |
| | 12,951 |
| | — |
| | — |
| | — |
| | 32,260 |
| Other Liabilities | | — |
| | 5,480 |
| | — |
| | 3,500 |
| | — |
| | 8,980 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 1,131,100 |
| | 1,131,100 |
| | 1,131,100 |
| | — |
| | (2,262,200 | ) | | 1,131,100 |
| Notes | | 401,080 |
| | 401,080 |
| | 401,080 |
| | — |
| | (802,160 | ) | | 401,080 |
| | | 1,532,180 |
| | 1,532,180 |
| | 1,532,180 |
| | — |
| | (3,064,360 | ) | | 1,532,180 |
| | | | | | | | | | | | | | Equity | | 154,451 |
| | 229,504 |
| | 135,913 |
| | 1,061,093 |
| | (1,426,510 | ) | | 154,451 |
| | | $ | 1,858,930 |
| | $ | 2,019,420 |
| | $ | 1,777,347 |
| | $ | 1,560,511 |
| | $ | (5,196,343 | ) | | $ | 2,019,865 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOMEBALANCE SHEET For the Three Months Ended March 25, 2012September 25, 2011 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 82,713 |
| | $ | 147,138 |
| | $ | 84,679 |
| | $ | 487,352 |
| | $ | (229,614 | ) | | $ | 572,268 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,659 |
| | 42,099 |
| | — |
| | 48,758 |
| Operating expenses | | 1,257 |
| | 69,119 |
| | 19,397 |
| | 301,293 |
| | (229,614 | ) | | 161,452 |
| Selling, general and administrative | | 1,297 |
| | 30,460 |
| | 5,064 |
| | 15,157 |
| | — |
| | 51,978 |
| Depreciation and amortization | | 20,354 |
| | 11 |
| | 9,564 |
| | 33,519 |
| | — |
| | 63,448 |
| Loss on impairment / retirement of fixed assets, net | | 827 |
| | — |
| | 10 |
| | 43 |
| | — |
| | 880 |
| | | 23,735 |
| | 99,590 |
| | 40,694 |
| | 392,111 |
| | (229,614 | ) | | 326,516 |
| Operating income | | 58,978 |
| | 47,548 |
| | 43,985 |
| | 95,241 |
| | — |
| | 245,752 |
| Interest expense, net | | 23,948 |
| | 3,085 |
| | 13,433 |
| | 855 |
| | — |
| | 41,321 |
| Net effect of swaps | | (4,112 | ) | | (192 | ) | | 342 |
| | — |
| | — |
| | (3,962 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 18,549 |
| | — |
| | — |
| | 18,549 |
| Other (income) expense | | (30 | ) | | (1,711 | ) | | 616 |
| | 907 |
| | — |
| | (218 | ) | Income from investment in affiliates | | (117,557 | ) | | (57,557 | ) | | (8,410 | ) | | (15,579 | ) | | 199,103 |
| | — |
| Income before taxes | | 156,729 |
| | 103,923 |
| | 19,455 |
| | 109,058 |
| | (199,103 | ) | | 190,062 |
| Provision for taxes | | 4,511 |
| | 12,445 |
| | 3,103 |
| | 17,785 |
| | — |
| | 37,844 |
| Net income | | $ | 152,218 |
| | $ | 91,478 |
| | $ | 16,352 |
| | $ | 91,273 |
| | $ | (199,103 | ) | | $ | 152,218 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,842 |
| | — |
| | 2,842 |
| | — |
| | (2,842 | ) | | 2,842 |
| Unrealized income on cash flow hedging derivatives | | (3,224 | ) | | (4,646 | ) | | 72 |
| | — |
| | 4,574 |
| | (3,224 | ) | Other comprehensive income (loss), (net of tax) | | (382 | ) | | (4,646 | ) | | 2,914 |
| | — |
| | 1,732 |
| | (382 | ) | Total Comprehensive Income | | $ | 151,836 |
| | $ | 86,832 |
| | $ | 19,266 |
| | $ | 91,273 |
| | $ | (197,371 | ) | | $ | 151,836 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
| Receivables | | — |
| | 82,892 |
| | 59,911 |
| | 370,246 |
| | (506,356 | ) | | 6,693 |
| Inventories | | — |
| | 3,321 |
| | 3,678 |
| | 37,487 |
| | — |
| | 44,486 |
| Current deferred tax asset | | — |
| | 11,014 |
| | 772 |
| | 3,334 |
| | — |
| | 15,120 |
| Other current assets | | 359 |
| | 5,907 |
| | 11,851 |
| | 12,293 |
| | — |
| | 30,410 |
| | | 359 |
| | 103,531 |
| | 76,331 |
| | 430,163 |
| | (506,356 | ) | | 104,028 |
| Property and Equipment (net) | | 464,394 |
| | 1,035 |
| | 279,255 |
| | 896,184 |
| | — |
| | 1,640,868 |
| Investment in Park | | 459,339 |
| | 661,166 |
| | 115,401 |
| | 25,758 |
| | (1,261,664 | ) | | — |
| Intercompany Note Receivable | | — |
| | 104,165 |
| | — |
| | — |
| | (104,165 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 125,528 |
| | 111,219 |
| | — |
| | 245,808 |
| Other Intangibles, net | | — |
| | — |
| | 17,776 |
| | 22,831 |
| | — |
| | 40,607 |
| Deferred Tax Asset | | — |
| | 47,646 |
| | — |
| | — |
| | (47,646 | ) | | — |
| Intercompany Receivable | | 889,442 |
| | 1,239,210 |
| | 1,294,302 |
| | — |
| | (3,422,954 | ) | | — |
| Other Assets | | 26,323 |
| | 16,288 |
| | 9,608 |
| | 1,974 |
| | — |
| | 54,193 |
| | | $ | 1,848,918 |
| | $ | 2,173,041 |
| | $ | 1,918,201 |
| | $ | 1,488,129 |
| | $ | (5,342,785 | ) | | $ | 2,085,504 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 15,921 |
| | $ | 15,921 |
| | $ | 15,921 |
| | $ | — |
| | $ | (31,842 | ) | | $ | 15,921 |
| Accounts payable | | 60,297 |
| | 232,001 |
| | 26,302 |
| | 215,968 |
| | (506,356 | ) | | 28,212 |
| Deferred revenue | | — |
| | — |
| | 5,413 |
| | 45,341 |
| | — |
| | 50,754 |
| Accrued interest | | 3,089 |
| | 1,706 |
| | 5,519 |
| | — |
| | — |
| | 10,314 |
| Accrued taxes | | 4,925 |
| | 340 |
| | 261 |
| | 3,294 |
| | — |
| | 8,820 |
| Accrued salaries, wages and benefits | | — |
| | 26,989 |
| | 781 |
| | 5,792 |
| | — |
| | 33,562 |
| Self-insurance reserves | | — |
| | 4,212 |
| | 1,716 |
| | 15,826 |
| | — |
| | 21,754 |
| Other accrued liabilities | | 462 |
| | 3,312 |
| | 226 |
| | 2,104 |
| | — |
| | 6,104 |
| | | 84,694 |
| | 284,481 |
| | 56,139 |
| | 288,325 |
| | (538,198 | ) | | 175,441 |
| Deferred Tax Liability | | — |
| | — |
| | 58,762 |
| | 119,611 |
| | (47,646 | ) | | 130,727 |
| Derivative Liability | | 19,403 |
| | 12,877 |
| | — |
| | — |
| | — |
| | 32,280 |
| Other Liabilities | | — |
| | 2,235 |
| | — |
| | — |
| | — |
| | 2,235 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 104,165 |
| | (104,165 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 155,004 |
| | 155,004 |
| | 155,004 |
| | — |
| | (310,008 | ) | | 155,004 |
| Term debt | | 1,140,179 |
| | 1,140,179 |
| | 1,140,179 |
| | — |
| | (2,280,358 | ) | | 1,140,179 |
| Notes | | 400,373 |
| | 400,373 |
| | 400,373 |
| | — |
| | (800,746 | ) | | 400,373 |
| | | 1,695,556 |
| | 1,695,556 |
| | 1,695,556 |
| | — |
| | (3,391,112 | ) | | 1,695,556 |
| | | | | | | | | | | | | | Equity | | 49,265 |
| | 177,892 |
| | 107,744 |
| | 976,028 |
| | (1,261,664 | ) | | 49,265 |
| | | $ | 1,848,918 |
| | $ | 2,173,041 |
| | $ | 1,918,201 |
| | $ | 1,488,129 |
| | $ | (5,342,785 | ) | | $ | 2,085,504 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the NineThree Months Ended September 30, 2012March 31, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 124,864 |
| | $ | 221,221 |
| | $ | 130,441 |
| | $ | 808,471 |
| | $ | (345,748 | ) | | $ | 939,249 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,988 |
| | 73,938 |
| | — |
| | 83,926 |
| Operating expenses | | 4,141 |
| | 147,211 |
| | 40,328 |
| | 534,900 |
| | (345,748 | ) | | 380,832 |
| Selling, general and administrative | | 4,841 |
| | 70,848 |
| | 9,877 |
| | 29,922 |
| | — |
| | 115,488 |
| Depreciation and amortization | | 33,436 |
| | 28 |
| | 16,415 |
| | 63,277 |
| | — |
| | 113,156 |
| Loss on impairment / retirement of fixed assets, net | | 24,221 |
| | — |
| | 9 |
| | — |
| | — |
| | 24,230 |
| | | 66,639 |
| | 218,087 |
| | 76,617 |
| | 702,037 |
| | (345,748 | ) | | 717,632 |
| Operating income | | 58,225 |
| | 3,134 |
| | 53,824 |
| | 106,434 |
| | — |
| | 221,617 |
| Interest expense (income), net | | 36,438 |
| | 21,957 |
| | 30,898 |
| | (5,422 | ) | | — |
| | 83,871 |
| Net effect of swaps | | (35 | ) | | 192 |
| | (1,475 | ) | | — |
| | — |
| | (1,318 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (13,926 | ) | | — |
| | — |
| | (13,926 | ) | Other (income) expense | | 561 |
| | (7,119 | ) | | 1,221 |
| | 5,337 |
| | — |
| | — |
| Income from investment in affiliates | | (99,035 | ) | | (72,862 | ) | | (14,505 | ) | | (38,160 | ) | | 224,562 |
| | — |
| Income before taxes | | 120,296 |
| | 60,966 |
| | 51,611 |
| | 144,679 |
| | (224,562 | ) | | 152,990 |
| Provision (benefit) for taxes | | 8,701 |
| | (3,771 | ) | | 13,525 |
| | 22,940 |
| | — |
| | 41,395 |
| Net income | | $ | 111,595 |
| | $ | 64,737 |
| | $ | 38,086 |
| | $ | 121,739 |
| | $ | (224,562 | ) | | $ | 111,595 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,251 | ) | | — |
| | (1,251 | ) | | — |
| | 1,251 |
| | (1,251 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (1,798 | ) | | (629 | ) | | 21 |
| | — |
| | 608 |
| | (1,798 | ) | Other comprehensive income (loss), (net of tax) | | (3,049 | ) | | (629 | ) | | (1,230 | ) | | — |
| | 1,859 |
| | (3,049 | ) | Total Comprehensive Income | | $ | 108,546 |
| | $ | 64,108 |
| | $ | 36,856 |
| | $ | 121,739 |
| | $ | (222,703 | ) | | $ | 108,546 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 4,317 |
| | $ | 8,371 |
| | $ | 289 |
| | $ | 41,510 |
| | $ | (12,688 | ) | | $ | 41,799 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | — |
| | 5,037 |
| | — |
| | 5,037 |
| Operating expenses | | 1,423 |
| | 21,606 |
| | 5,941 |
| | 60,375 |
| | (12,688 | ) | | 76,657 |
| Selling, general and administrative | | 1,292 |
| | 16,613 |
| | 711 |
| | 2,423 |
| | — |
| | 21,039 |
| Depreciation and amortization | | 475 |
| | 9 |
| | — |
| | 4,302 |
| | — |
| | 4,786 |
| Loss on impairment / retirement of fixed assets, net | | 36 |
| | — |
| | 478 |
| | 86 |
| | — |
| | 600 |
| | | 3,226 |
| | 38,228 |
| | 7,130 |
| | 72,223 |
| | (12,688 | ) | | 108,119 |
| Operating income (loss) | | 1,091 |
| | (29,857 | ) | | (6,841 | ) | | (30,713 | ) | | — |
| | (66,320 | ) | Interest expense (income), net | | 10,512 |
| | 7,677 |
| | 9,764 |
| | (2,230 | ) | | — |
| | 25,723 |
| Net effect of swaps | | 5,635 |
| | 3,576 |
| | — |
| | — |
| | — |
| | 9,211 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 8,958 |
| | — |
| | — |
| | 8,958 |
| Other (income) expense | | 188 |
| | (2,388 | ) | | 800 |
| | 1,400 |
| | — |
| | — |
| Loss from investment in affiliates | | 72,096 |
| | 35,640 |
| | 3,520 |
| | 21,227 |
| | (132,483 | ) | | — |
| Loss before taxes | | (108,515 | ) | | (87,143 | ) | | (30,500 | ) | | (51,110 | ) | | 132,483 |
| | (144,785 | ) | Provision (benefit) for taxes | | 611 |
| | (17,665 | ) | | (9,254 | ) | | (9,351 | ) | | — |
| | (35,659 | ) | Net loss | | $ | (109,126 | ) | | $ | (69,478 | ) | | $ | (21,246 | ) | | $ | (41,759 | ) | | $ | 132,483 |
| | $ | (109,126 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 301 |
| | — |
| | 301 |
| | — |
| | (301 | ) | | 301 |
| Unrealized income on cash flow hedging derivatives | | 8,885 |
| | 2,535 |
| | — |
| | — |
| | (2,535 | ) | | 8,885 |
| Other comprehensive income, (net of tax) | | 9,186 |
| | 2,535 |
| | 301 |
| | — |
| | (2,836 | ) | | 9,186 |
| Total Comprehensive Loss | | $ | (99,940 | ) | | $ | (66,943 | ) | | $ | (20,945 | ) | | $ | (41,759 | ) | | $ | 129,647 |
| | $ | (99,940 | ) |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the NineThree Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 118,280 |
| | $ | 210,407 |
| | $ | 115,163 |
| | $ | 768,126 |
| | $ | (328,349 | ) | | $ | 883,627 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,389 |
| | 70,592 |
| | — |
| | 79,981 |
| Operating expenses | | 4,180 |
| | 131,955 |
| | 38,959 |
| | 504,813 |
| | (328,349 | ) | | 351,558 |
| Selling, general and administrative | | 8,049 |
| | 64,226 |
| | 9,541 |
| | 28,310 |
| | — |
| | 110,126 |
| Depreciation and amortization | | 33,021 |
| | 34 |
| | 15,440 |
| | 62,362 |
| | — |
| | 110,857 |
| Loss on impairment / retirement of fixed assets, net | | 1,023 |
| | — |
| | 10 |
| | 43 |
| | — |
| | 1,076 |
| | | 46,273 |
| | 196,215 |
| | 73,339 |
| | 666,120 |
| | (328,349 | ) | | 653,598 |
| Operating income | | 72,007 |
| | 14,192 |
| | 41,824 |
| | 102,006 |
| | — |
| | 230,029 |
| Interest expense, net | | 70,822 |
| | 8,395 |
| | 39,129 |
| | 6,184 |
| | — |
| | 124,530 |
| Net effect of swaps | | (7,230 | ) | | 910 |
| | 2,813 |
| | — |
| | — |
| | (3,507 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,704 |
| | — |
| | — |
| | 14,704 |
| Other (income) expense | | 1,517 |
| | (4,712 | ) | | 2,072 |
| | 2,078 |
| | — |
| | 955 |
| (Income) loss from investment in affiliates | | (71,656 | ) | | (34,663 | ) | | (12,389 | ) | | 107 |
| | 118,601 |
| | — |
| Income (loss) before taxes | | 78,554 |
| | 44,262 |
| | (4,505 | ) | | 93,637 |
| | (118,601 | ) | | 93,347 |
| Provision (benefit) for taxes | | 6,980 |
| | 2,527 |
| | (4,446 | ) | | 16,712 |
| | — |
| | 21,773 |
| Net income (loss) | | $ | 71,574 |
| | $ | 41,735 |
| | $ | (59 | ) | | $ | 76,925 |
| | $ | (118,601 | ) | | $ | 71,574 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,354 |
| | — |
| | 2,354 |
| | — |
| | (2,354 | ) | | 2,354 |
| Unrealized income on cash flow hedging derivatives | | 2,366 |
| | (9,866 | ) | | 79 |
| | — |
| | 9,787 |
| | 2,366 |
| Other comprehensive income (loss), (net of tax) | | 4,720 |
| | (9,866 | ) | | 2,433 |
| | — |
| | 7,433 |
| | 4,720 |
| Total Comprehensive Income | | $ | 76,294 |
| | $ | 31,869 |
| | $ | 2,374 |
| | $ | 76,925 |
| | $ | (111,168 | ) | | $ | 76,294 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 1,456 |
| | $ | 2,577 |
| | $ | 266 |
| | $ | 27,932 |
| | $ | (4,033 | ) | | $ | 28,198 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | — |
| | 4,087 |
| | — |
| | 4,087 |
| Operating expenses | | 1,335 |
| | 20,436 |
| | 5,657 |
| | 47,890 |
| | (4,033 | ) | | 71,285 |
| Selling, general and administrative | | 1,332 |
| | 13,696 |
| | 760 |
| | 2,196 |
| | — |
| | 17,984 |
| Depreciation and amortization | | 696 |
| | 9 |
| | — |
| | 3,374 |
| | — |
| | 4,079 |
| Loss on impairment / retirement of fixed assets, net | | 82 |
| | — |
| | 10 |
| | — |
| | — |
| | 92 |
| | | 3,445 |
| | 34,141 |
| | 6,427 |
| | 57,547 |
| | (4,033 | ) | | 97,527 |
| Operating loss | | (1,989 | ) | | (31,564 | ) | | (6,161 | ) | | (29,615 | ) | | — |
| | (69,329 | ) | Interest expense, net | | 11,158 |
| | 6,615 |
| | 10,403 |
| | (1,389 | ) | | — |
| | 26,787 |
| Net effect of swaps | | 173 |
| | 332 |
| | (1,475 | ) | | — |
| | — |
| | (970 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (8,192 | ) | | — |
| | — |
| | (8,192 | ) | Other (income) expense | | 187 |
| | (3,035 | ) | | 197 |
| | 2,651 |
| | — |
| | — |
| Loss from investment in affiliates | | 50,491 |
| | 23,083 |
| | 3,230 |
| | 24,916 |
| | (101,720 | ) | | — |
| Loss before taxes | | (63,998 | ) | | (58,559 | ) | | (10,324 | ) | | (55,793 | ) | | 101,720 |
| | (86,954 | ) | Provision (benefit) for taxes | | 1,417 |
| | (11,672 | ) | | (2,334 | ) | | (8,950 | ) | | — |
| | (21,539 | ) | Net loss | | $ | (65,415 | ) | | $ | (46,887 | ) | | $ | (7,990 | ) | | $ | (46,843 | ) | | $ | 101,720 |
| | $ | (65,415 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,169 | ) | | — |
| | (1,169 | ) | | — |
| | 1,169 |
| | (1,169 | ) | Unrealized income on cash flow hedging derivatives | | 339 |
| | 98 |
| | 21 |
| | — |
| | (119 | ) | | 339 |
| Other comprehensive income (loss), (net of tax) | | (830 | ) | | 98 |
| | (1,148 | ) | | — |
| | 1,050 |
| | (830 | ) | Total Comprehensive Loss | | $ | (66,245 | ) | | $ | (46,789 | ) | | $ | (9,138 | ) | | $ | (46,843 | ) | | $ | 102,770 |
| | $ | (66,245 | ) |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Twelve Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 147,733 |
| | $ | 261,878 |
| | $ | 142,250 |
| | $ | 941,465 |
| | $ | (409,232 | ) | | $ | 1,084,094 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,531 |
| | 85,471 |
| | — |
| | 96,002 |
| Operating expenses | | 5,452 |
| | 180,665 |
| | 47,134 |
| | 636,106 |
| | (409,232 | ) | | 460,125 |
| Selling, general and administrative | | 6,865 |
| | 90,892 |
| | 11,650 |
| | 36,381 |
| | — |
| | 145,788 |
| Depreciation and amortization | | 37,698 |
| | 41 |
| | 18,300 |
| | 72,097 |
| | — |
| | 128,136 |
| (Gain) loss on impairment / retirement of fixed assets, net | | 24,188 |
| | — |
| | (62 | ) | | 1,593 |
| | — |
| | 25,719 |
| | | 74,203 |
| | 271,598 |
| | 87,553 |
| | 831,648 |
| | (409,232 | ) | | 855,770 |
| Operating income (loss) | | 73,530 |
| | (9,720 | ) | | 54,697 |
| | 109,817 |
| | — |
| | 228,324 |
| Interest (income) expense, net | | 50,007 |
| | 28,592 |
| | 44,583 |
| | (6,813 | ) | | — |
| | 116,369 |
| Net effect of swaps | | (5,019 | ) | | (1 | ) | | (5,910 | ) | | — |
| | — |
| | (10,930 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | (18,721 | ) | | — |
| | — |
| | (18,721 | ) | Other (income) expense | | 749 |
| | (10,205 | ) | | 1,498 |
| | 7,958 |
| | — |
| | — |
| Income from investment in affiliates | | (93,080 | ) | | (55,557 | ) | | (12,698 | ) | | (24,955 | ) | | 186,290 |
| | — |
| Income before taxes | | 120,873 |
| | 27,451 |
| | 45,945 |
| | 133,627 |
| | (186,290 | ) | | 141,606 |
| Provision (benefit) for taxes | | 10,106 |
| | (29,298 | ) | | 20,942 |
| | 29,089 |
| | — |
| | 30,839 |
| Net income | | $ | 110,767 |
| | $ | 56,749 |
| | $ | 25,003 |
| | $ | 104,538 |
| | $ | (186,290 | ) | | $ | 110,767 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (2,672 | ) | | — |
| | (2,672 | ) | | — |
| | 2,672 |
| | (2,672 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (397 | ) | | (109 | ) | | 21 |
| | — |
| | 88 |
| | (397 | ) | Other comprehensive income (loss), (net of tax) | | (3,069 | ) | | (109 | ) | | (2,651 | ) | | — |
| | 2,760 |
| | (3,069 | ) | Total Comprehensive Income | | $ | 107,698 |
| | $ | 56,640 |
| | $ | 22,352 |
| | $ | 104,538 |
| | $ | (183,530 | ) | | $ | 107,698 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 148,576 |
| | $ | 263,930 |
| | $ | 140,441 |
| | $ | 941,246 |
| | $ | (412,138 | ) | | $ | 1,082,055 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,316 |
| | 85,682 |
| | — |
| | 95,998 |
| Operating expenses | | 5,468 |
| | 177,526 |
| | 48,147 |
| | 637,772 |
| | (412,138 | ) | | 456,775 |
| Selling, general and administrative | | 6,455 |
| | 89,532 |
| | 11,086 |
| | 34,293 |
| | — |
| | 141,366 |
| Depreciation and amortization | | 37,439 |
| | 40 |
| | 18,199 |
| | 71,335 |
| | — |
| | 127,013 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (6,625 | ) | Loss on impairment / retirement of fixed assets, net | | 25,089 |
| | — |
| | 474 |
| | 5,281 |
| | — |
| | 30,844 |
| | | 74,451 |
| | 267,098 |
| | 88,222 |
| | 827,738 |
| | (412,138 | ) | | 845,371 |
| Operating income (loss) | | 74,125 |
| | (3,168 | ) | | 52,219 |
| | 113,508 |
| | — |
| | 236,684 |
| Interest (income) expense, net | | 47,879 |
| | 30,390 |
| | 40,231 |
| | (9,013 | ) | | — |
| | 109,487 |
| Net effect of swaps | | 5,324 |
| | 3,365 |
| | — |
| | — |
| | — |
| | 8,689 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 8,152 |
| | — |
| | — |
| | 8,152 |
| Other (income) expense | | 750 |
| | (8,860 | ) | | 2,623 |
| | 5,487 |
| | — |
| | — |
| Income from investment in affiliates | | (68,417 | ) | | (53,593 | ) | | (14,307 | ) | | (18,503 | ) | | 154,820 |
| | — |
| Income before taxes | | 67,414 |
| | 12,749 |
| | 14,903 |
| | 135,537 |
| | (154,820 | ) | | 75,783 |
| Provision (benefit) for taxes | | 9,269 |
| | (15,849 | ) | | (3,507 | ) | | 27,725 |
| | — |
| | 17,638 |
| Net income | | $ | 58,145 |
| | $ | 28,598 |
| | $ | 18,410 |
| | $ | 107,812 |
| | $ | (154,820 | ) | | $ | 58,145 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,839 |
| | — |
| | 1,839 |
| | — |
| | (1,839 | ) | | 1,839 |
| Unrealized income on cash flow hedging derivatives | | 8,685 |
| | 2,551 |
| | — |
| | — |
| | (2,551 | ) | | 8,685 |
| Other comprehensive income (loss), (net of tax) | | 10,524 |
| | 2,551 |
| | 1,839 |
| | — |
| | (4,390 | ) | | 10,524 |
| Total Comprehensive Income | | $ | 68,669 |
| | $ | 31,149 |
| | $ | 20,249 |
| | $ | 107,812 |
| | $ | (159,210 | ) | | $ | 68,669 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Twelve Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 138,907 |
| | $ | 247,595 |
| | $ | 126,355 |
| | $ | 886,578 |
| | $ | (386,119 | ) | | $ | 1,013,316 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,850 |
| | 80,928 |
| | — |
| | 90,778 |
| Operating expenses | | 5,725 |
| | 163,754 |
| | 45,814 |
| | 597,781 |
| | (386,119 | ) | | 426,955 |
| Selling, general and administrative | | 9,755 |
| | 79,492 |
| | 11,347 |
| | 32,598 |
| | — |
| | 133,192 |
| Depreciation and amortization | | 37,168 |
| | 95 |
| | 17,188 |
| | 71,931 |
| | — |
| | 126,382 |
| Loss on impairment of goodwill and other intangibles | | — |
| | — |
| | — |
| | 903 |
| | — |
| | 903 |
| Loss on impairment / retirement of fixed assets, net | | 1,456 |
| | — |
| | 10 |
| | 62,043 |
| | — |
| | 63,509 |
| | | 54,104 |
| | 243,341 |
| | 84,209 |
| | 846,184 |
| | (386,119 | ) | | 841,719 |
| Operating income | | 84,803 |
| | 4,254 |
| | 42,146 |
| | 40,394 |
| | — |
| | 171,597 |
| Interest expense, net | | 99,205 |
| | 14,877 |
| | 52,411 |
| | 4,362 |
| | — |
| | 170,855 |
| Net effect of swaps | | (7,183 | ) | | 910 |
| | 8,045 |
| | — |
| | — |
| | 1,772 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 2,323 |
| | — |
| | — |
| | 2,323 |
| Other (income) expense | | 1,704 |
| | (5,748 | ) | | 2,852 |
| | 2,147 |
| | — |
| | 955 |
| (Income) loss from investment in affiliates | | (25,098 | ) | | 1,534 |
| | (9,116 | ) | | 2,425 |
| | 30,255 |
| | — |
| Income (loss) before taxes | | 16,175 |
| | (7,319 | ) | | (14,369 | ) | | 31,460 |
| | (30,255 | ) | | (4,308 | ) | Provision (benefit) for taxes | | 8,059 |
| | 953 |
| | (7,308 | ) | | (14,128 | ) | | — |
| | (12,424 | ) | Net income (loss) | | $ | 8,116 |
| | $ | (8,272 | ) | | $ | (7,061 | ) | | $ | 45,588 |
| | $ | (30,255 | ) | | $ | 8,116 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (1,704 | ) | | — |
| | (1,704 | ) | | — |
| | 1,704 |
| | (1,704 | ) | Unrealized income on cash flow hedging derivatives | | 22,916 |
| | (7,153 | ) | | 180 |
| | — |
| | 6,973 |
| | 22,916 |
| Other comprehensive income (loss), (net of tax) | | 21,212 |
| | (7,153 | ) | | (1,524 | ) | | — |
| | 8,677 |
| | 21,212 |
| Total Comprehensive Income (Loss) | | $ | 29,328 |
| | $ | (15,425 | ) | | $ | (8,585 | ) | | $ | 45,588 |
| | $ | (21,578 | ) | | $ | 29,328 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 140,548 |
| | $ | 249,988 |
| | $ | 126,375 |
| | $ | 903,046 |
| | $ | (390,156 | ) | | $ | 1,029,801 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,932 |
| | 82,100 |
| | — |
| | 92,032 |
| Operating expenses | | 5,351 |
| | 167,068 |
| | 45,805 |
| | 608,940 |
| | (390,156 | ) | | 437,008 |
| Selling, general and administrative | | 7,963 |
| | 83,355 |
| | 11,151 |
| | 35,026 |
| | — |
| | 137,495 |
| Depreciation and amortization | | 37,309 |
| | 45 |
| | 17,325 |
| | 71,213 |
| | — |
| | 125,892 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 876 |
| | — |
| | (51 | ) | | 10,426 |
| | — |
| | 11,251 |
| | | 51,499 |
| | 250,468 |
| | 84,162 |
| | 807,705 |
| | (390,156 | ) | | 803,678 |
| Operating income (loss) | | 89,049 |
| | (480 | ) | | 42,213 |
| | 95,341 |
| | — |
| | 226,123 |
| Interest expense, net | | 72,309 |
| | 19,090 |
| | 50,897 |
| | 488 |
| | — |
| | 142,784 |
| Net effect of swaps | | (10,940 | ) | | (243 | ) | | (4,793 | ) | | — |
| | — |
| | (15,976 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 8,605 |
| | — |
| | — |
| | 8,605 |
| Other (income) expense | | 716 |
| | (9,542 | ) | | 1,708 |
| | 7,084 |
| | — |
| | (34 | ) | (Income) loss from investment in affiliates | | (67,272 | ) | | (19,390 | ) | | (2,601 | ) | | 16,074 |
| | 73,189 |
| | — |
| Income (loss) before taxes | | 94,236 |
| | 9,605 |
| | (11,603 | ) | | 71,695 |
| | (73,189 | ) | | 90,744 |
| Provision (benefit) for taxes | | 9,429 |
| | (25,950 | ) | | 4,319 |
| | 18,139 |
| | — |
| | 5,937 |
| Net income (loss) | | $ | 84,807 |
| | $ | 35,555 |
| | $ | (15,922 | ) | | $ | 53,556 |
| | $ | (73,189 | ) | | $ | 84,807 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,050 |
| | — |
| | 1,050 |
| | — |
| | (1,050 | ) | | 1,050 |
| Unrealized income (loss) on cash flow hedging derivatives | | (7,958 | ) | | (9,638 | ) | | 254 |
| | — |
| | 9,384 |
| | (7,958 | ) | Other comprehensive income (loss), (net of tax) | | (6,908 | ) | | (9,638 | ) | | 1,304 |
| | — |
| | 8,334 |
| | (6,908 | ) | Total Comprehensive Income (Loss) | | $ | 77,899 |
| | $ | 25,917 |
| | $ | (14,618 | ) | | $ | 53,556 |
| | $ | (64,855 | ) | | $ | 77,899 |
|
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 208,436 |
| | $ | 48,506 |
| | $ | 9,093 |
| | $ | 155,849 |
| | $ | (145,140 | ) | | $ | 276,744 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (56,171 | ) | | (70,083 | ) | | 3,948 |
| | (22,834 | ) | | 145,140 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (29,295 | ) | | (8 | ) | | (14,426 | ) | | (32,081 | ) | | — |
| | (75,810 | ) | Net cash from (for) investing activities | | (84,293 | ) | | (70,091 | ) | | (10,478 | ) | | (54,915 | ) | | 145,140 |
| | (74,637 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Term debt payments, including early termination penalties | | (14,468 | ) | | (10,212 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Intercompany (payments) receipts | | — |
| | 93,845 |
| | — |
| | (93,845 | ) | | — |
| | — |
| Distributions (paid) received | | (66,675 | ) | | 110 |
| | — |
| | — |
| | — |
| | (66,565 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 47 |
| | — |
| | — |
| | — |
| | 47 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | Net cash from (for) financing activities | | (81,143 | ) | | 23,336 |
| | 9,230 |
| | (93,845 | ) | | — |
| | (142,422 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 893 |
| | — |
| | — |
| | 893 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase for the period | | 43,000 |
| | 1,751 |
| | 8,738 |
| | 7,089 |
| | — |
| | 60,578 |
| Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | (117,670 | ) | | $ | (49,663 | ) | | $ | (42,030 | ) | | $ | (12,767 | ) | | $ | 153,463 |
| | $ | (68,667 | ) | CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 65,636 |
| | 58,171 |
| | (2,442 | ) | | 32,098 |
| | (153,463 | ) | | — |
| Capital expenditures | | (17,866 | ) | | — |
| | (600 | ) | | (17,363 | ) | | — |
| | (35,829 | ) | Net cash from (for) investing activities | | 47,770 |
| | 58,171 |
| | (3,042 | ) | | 14,735 |
| | (153,463 | ) | | (35,829 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | $ | 96,000 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 96,000 |
| Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,763 | ) | | (8,538 | ) | | (190 | ) | | — |
| | — |
| | (23,491 | ) | Term debt payments, including early termination penalties | | (654,568 | ) | | (462,054 | ) | | (14,478 | ) | | — |
| | — |
| | (1,131,100 | ) | Distributions (paid) received | | (35,688 | ) | | 868 |
| | — |
| | — |
| | — |
| | (34,820 | ) | Exercise of limited partnership unit options | | — |
| | 28 |
| | — |
| | — |
| | — |
| | 28 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (127 | ) | | — |
| | — |
| | — |
| | (127 | ) | Net cash from (for) financing activities | | 44,900 |
| | (8,220 | ) | | (190 | ) | | — |
| | — |
| | 36,490 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (786 | ) | | — |
| | — |
| | (786 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (25,000 | ) | | 288 |
| | (46,048 | ) | | 1,968 |
| | — |
| | (68,792 | ) | Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 169,343 |
| | $ | 48,628 |
| | $ | 48,422 |
| | $ | 25,310 |
| | $ | (69,338 | ) | | $ | 222,365 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (29,986 | ) | | (39,615 | ) | | (6,353 | ) | | 6,616 |
| | 69,338 |
| | — |
| Capital expenditures | | (38,121 | ) | | — |
| | (10,510 | ) | | (24,249 | ) | | — |
| | (72,880 | ) | Net cash from (for) investing activities | | (68,107 | ) | | (39,615 | ) | | (16,863 | ) | | (17,633 | ) | | 69,338 |
| | (72,880 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net (payments) on revolving credit loans | | (23,200 | ) | | — |
| | — |
| | — |
| | — |
| | (23,200 | ) | Term debt borrowings | | 13,246 |
| | 9,358 |
| | 334 |
| | — |
| | — |
| | 22,938 |
| Term debt payments, including early termination penalties | | (13,831 | ) | | (9,763 | ) | | (306 | ) | | — |
| | — |
| | (23,900 | ) | Intercompany (payments) receipts | | — |
| | 688 |
| | — |
| | (688 | ) | | — |
| | — |
| Distributions (paid) received | | (16,668 | ) | | 64 |
| | — |
| | — |
| | — |
| | (16,604 | ) | Payment of debt issuance costs | | (11,783 | ) | | (8,332 | ) | | (375 | ) | | — |
| | — |
| | (20,490 | ) | Net cash from (for) financing activities | | (52,236 | ) | | (7,985 | ) | | (347 | ) | | (688 | ) | | — |
| | (61,256 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (1,682 | ) | | — |
| | — |
| | (1,682 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase for the period | | 49,000 |
| | 1,028 |
| | 29,530 |
| | 6,989 |
| | — |
| | 86,547 |
| Balance, beginning of period | | — |
| | 1,461 |
| | 6,943 |
| | 1,361 |
| | — |
| | 9,765 |
| Balance, end of period | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | (184,504 | ) | | $ | 10,151 |
| | $ | (37,239 | ) | | $ | (6,697 | ) | | $ | 136,357 |
| | $ | (81,932 | ) | CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 62,103 |
| | 60,369 |
| | 2,208 |
| | 11,677 |
| | (136,357 | ) | | — |
| Capital expenditures | | (8,374 | ) | | — |
| | (7,125 | ) | | (11,969 | ) | | — |
| | (27,468 | ) | Net cash from (for) investing activities | | 53,729 |
| | 60,369 |
| | (4,917 | ) | | (292 | ) | | (136,357 | ) | | (27,468 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 153,000 |
| | — |
| | 2,004 |
| | — |
| | — |
| | 155,004 |
| Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Intercompany (payments) receipts | | — |
| | (10,320 | ) | | — |
| | 10,320 |
| | — |
| | — |
| Distributions (paid) received | | (22,225 | ) | | 74 |
| | — |
| | — |
| | — |
| | (22,151 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 48 |
| | — |
| | — |
| | — |
| | 48 |
| Excess tax benefit from unit-based compensation | | — |
| | (437 | ) | | — |
| | — |
| | — |
| | (437 | ) | Net cash from (for) financing activities | | 130,775 |
| | (70,635 | ) | | 11,554 |
| | 10,320 |
| | — |
| | 82,014 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (819 | ) | | — |
| | — |
| | (819 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (115 | ) | | (31,421 | ) | | 3,331 |
| | — |
| | (28,205 | ) | Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 30, 2012March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 186,582 |
| | $ | (152,159 | ) | | $ | 12,038 |
| | $ | 318,078 |
| | $ | (91,985 | ) | | $ | 272,554 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (40,694 | ) | | (47,206 | ) | | 5,245 |
| | (9,330 | ) | | 91,985 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (33,025 | ) | | (8 | ) | | (23,050 | ) | | (37,037 | ) | | — |
| | (93,120 | ) | Net cash for investing activities | | (72,546 | ) | | (47,214 | ) | | (17,805 | ) | | (46,367 | ) | | 91,985 |
| | (91,947 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Intercompany term debt (payments) receipts | | — |
| | 269,500 |
| | — |
| | (269,500 | ) | | — |
| | — |
| Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Term debt payments, including early termination penalties | | (14,467 | ) | | (10,213 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Distributions (paid) received | | (105,569 | ) | | 261 |
| | — |
| | — |
| | — |
| | (105,308 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 53 |
| | — |
| | — |
| | — |
| | 53 |
| Payment of debt issuance costs | | — |
| | — |
| | (723 | ) | | — |
| | — |
| | (723 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | Net cash from (for) financing activities | | (120,036 | ) | | 199,147 |
| | 8,507 |
| | (269,500 | ) | | — |
| | (181,882 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 1,065 |
| | — |
| | — |
| | 1,065 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (6,000 | ) | | (226 | ) | | 3,805 |
| | 2,211 |
| | — |
| | (210 | ) | Balance, beginning of period | | 49,000 |
| | 2,489 |
| | 36,473 |
| | 8,350 |
| | — |
| | 96,312 |
| Balance, end of period | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 188,221 |
| | $ | (37,475 | ) | | $ | 16,546 |
| | $ | 135,165 |
| | $ | (4,510 | ) | | $ | 297,947 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 43,043 |
| | (49,642 | ) | | (2,479 | ) | | 4,568 |
| | 4,510 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | 14,885 |
| | — |
| | 16,058 |
| Capital expenditures | | (43,156 | ) | | (8 | ) | | (8,023 | ) | | (52,075 | ) | | — |
| | (103,262 | ) | Net cash for investing activities | | 1,060 |
| | (49,650 | ) | | (10,502 | ) | | (32,622 | ) | | 4,510 |
| | (87,204 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | $ | (57,000 | ) | | $ | — |
| | $ | (2,004 | ) | | $ | — |
| | $ | — |
| | $ | (59,004 | ) | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Intercompany term debt (payments) receipts | | — |
| | 104,165 |
| | — |
| | (104,165 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (669,035 | ) | | (472,267 | ) | | (14,798 | ) | | — |
| | — |
| | (1,156,100 | ) | Distributions (paid) received | | (102,402 | ) | | 920 |
| | — |
| | — |
| | — |
| | (101,482 | ) | Capital (contribution) infusion | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 57 |
| | — |
| | — |
| | — |
| | 57 |
| Payment of debt issuance costs | | (14,763 | ) | | (8,537 | ) | | (191 | ) | | — |
| | — |
| | (23,491 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | 1,519 |
| | — |
| | — |
| | — |
| | 1,519 |
| Net cash from (for) financing activities | | (189,281 | ) | | 87,460 |
| | (2,515 | ) | | (104,165 | ) | | — |
| | (208,501 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 477 |
| | — |
| | — |
| | 477 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | 335 |
| | 4,006 |
| | (1,622 | ) | | — |
| | 2,719 |
| Balance, beginning of period | | — |
| | 397 |
| | 119 |
| | 6,803 |
| | — |
| | 7,319 |
| Balance, end of period | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended SeptemberMarch 25, 20112012 (As restated) (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 101,376 |
| | $ | (9,652 | ) | | $ | 25,380 |
| | $ | 19,056 |
| | $ | 58,064 |
| | $ | 194,224 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 25,281 |
| | 23,147 |
| | (1,356 | ) | | 10,992 |
| | (58,064 | ) | | — |
| Capital expenditures | | (44,247 | ) | | — |
| | (13,179 | ) | | (27,488 | ) | | — |
| | (84,914 | ) | Net cash from (for) investing activities | | (18,966 | ) | | 23,147 |
| | (14,535 | ) | | (16,496 | ) | | (58,064 | ) | | (84,914 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Term debt borrowings | | 13,246 |
| | 9,358 |
| | 334 |
| | — |
| | — |
| | 22,938 |
| Intercompany term debt (payments) receipts | | — |
| | 2,063 |
| | — |
| | (2,063 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (24,211 | ) | | (17,091 | ) | | (536 | ) | | — |
| | — |
| | (41,838 | ) | Distributions (paid) received | | (30,559 | ) | | 121 |
| | — |
| | — |
| | — |
| | (30,438 | ) | Exercise of limited partnership unit options | | — |
| | 7 |
| | — |
| | — |
| | — |
| | 7 |
| Payment of debt issuance costs | | (12,886 | ) | | (9,110 | ) | | (761 | ) | | — |
| | — |
| | (22,757 | ) | Net cash from (for) financing activities | | (54,410 | ) | | (14,652 | ) | | (963 | ) | | (2,063 | ) | | — |
| | (72,088 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,611 | ) | | — |
| | — |
| | (2,611 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | 28,000 |
| | (1,157 | ) | | 7,271 |
| | 497 |
| | — |
| | 34,611 |
| Balance, beginning of period | | 21,000 |
| | 3,646 |
| | 29,202 |
| | 7,853 |
| | — |
| | 61,701 |
| Balance, end of period | | $ | 49,000 |
| | $ | 2,489 |
| | $ | 36,473 |
| | $ | 8,350 |
| | $ | — |
| | $ | 96,312 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 113,654 |
| | $ | (89,658 | ) | | $ | 14,102 |
| | $ | 182,798 |
| | $ | (367 | ) | | $ | 220,529 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (16,818 | ) | | (6,588 | ) | | 1,126 |
| | 21,913 |
| | 367 |
| | — |
| Capital expenditures | | (40,662 | ) | | — |
| | (22,440 | ) | | (34,253 | ) | | — |
| | (97,355 | ) | Net cash from (for) investing activities | | (57,480 | ) | | (6,588 | ) | | (21,314 | ) | | (12,340 | ) | | 367 |
| | (97,355 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings (payments) on revolving credit loans | | 31,000 |
| | — |
| | (3,110 | ) | | — |
| | — |
| | 27,890 |
| Intercompany term debt (payments) receipts | | — |
| | 166,023 |
| | — |
| | (166,023 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (13,831 | ) | | (9,763 | ) | | (306 | ) | | — |
| | — |
| �� | (23,900 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (73,343 | ) | | 273 |
| | — |
| | — |
| | — |
| | (73,070 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| Payment of debt issuance costs | | — |
| | — |
| | (723 | ) | | — |
| | — |
| | (723 | ) | Exercise of limited partnership unit options | | — |
| | 53 |
| | — |
| | — |
| | — |
| | 53 |
| Excess tax benefit from unit-based compensation | | — |
| | (437 | ) | | — |
| | — |
| | — |
| | (437 | ) | Net cash from (for) financing activities | | (56,174 | ) | | 96,149 |
| | 5,411 |
| | (166,023 | ) | | — |
| | (120,637 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,473 | ) | | — |
| | — |
| | (2,473 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (97 | ) | | (4,274 | ) | | 4,435 |
| | — |
| | 64 |
| Balance, beginning of period | | — |
| | 494 |
| | 4,393 |
| | 2,368 |
| | — |
| | 7,255 |
| Balance, end of period | | $ | — |
| | $ | 397 |
| | $ | 119 |
| | $ | 6,803 |
| | $ | — |
| | $ | 7,319 |
|
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview:
We generate our revenues primarily from sales of (1) admission to our parks, (2) food, merchandise and games inside our parks, and (3) hotel rooms, food and other attractions outside our parks. Our principal costs and expenses, which include salaries and wages, advertising, maintenance, operating supplies, utilities and insurance, are relatively fixed and do not vary significantly with attendance.
Each of our properties is run by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including the allocation of resources, on a property-by-property basis.
Aside from attendance and guest per capita statistics, discrete financial information and operating results are not prepared at the regional level, but rather at the individual park level for use by the CEO, who is the Chief Operating Decision Maker (CODM), as well as by the Chief Financial Officer, the Chief Operating Officer, the park general managers, and the Executive Vice President, Operations.
Critical Accounting Policies: This management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in the United States of America. These principles require us to make judgments, estimates and assumptions during the normal course of business that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ significantly from those estimates under different assumptions and conditions. Management believes that judgment and estimates related to the following critical accounting policies could materially affect our consolidated financial statements: •Property and Equipment •Impairment of Long-Lived Assets •Goodwill and Other Intangible Assets •Self-Insurance Reserves •Derivative Financial Instruments •Revenue Recognition
Income Taxes In the thirdfirst quarter of 20122013, there were no changes in the above critical accounting policies previously disclosed in our Annual Report on Form 10-K10-K/A for the year ended December 31, 20112012. except as noted below. Change in Depreciation Method Effective January 1, 2013, the Partnership changed its method of depreciation for the group of assets acquired as a whole in 1983, as well as for the groups of like assets of each subsequent business acquisition from the composite method to the unit method. Historically, the Partnership had used the composite depreciation method for land improvements, buildings, rides and equipment for the group of assets acquired as a whole in 1983, as well as for the group of like assets of each subsequent business acquisition. The unit method was only used for all individual assets 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. No gain or loss is recognized on normal retirements of composite assets. Instead, the net book value of a retired asset reduces accumulated depreciation for the composite group. Unusual retirements of composite assets could result in the recognition of a gain or loss. 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. In order to improve comparability and enhance the level of precision associated with allocating historical cost, the Partnership had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation for
all assets. The Partnership believes that pursuant to generally accepted accounting principles, changing from the composite method of depreciation to the unit method of depreciation is a change in accounting estimate that is effected by a change in accounting principle, which should be accounted for prospectively. This prospective application will result in the discontinuance of the composite method of depreciation for all prior acquisitions with the existing net book value of each composite pool allocated to the remaining individual assets (units) in that pool with each unit assigned an appropriate remaining useful life on an individual unit basis. Assigning a useful life to each unit in the various composite pools had an insignificant effect on the weighted average useful lives of all assets that were previously accounted for under the composite method. The change in depreciation method had an immaterial impact on the Condensed Consolidated Financial Statements for the quarter ended March 31, 2013.Future asset retirements could have a material impact on the Condensed Consolidated Financial Statements in the periods such items occur.
Adjusted EBITDA: We believe that Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the Amended 20102013 Credit Agreement) is a meaningful measure of park-level operating profitability because we use it for measuring returns on capital investments, evaluating potential acquisitions, determining awards under incentive compensation plans, and calculating compliance with certain loan covenants. Adjusted EBITDA is provided in the discussion of results of operations that follows as a supplemental measure of our operating results and is not intended to be a substitute for operating income, net income or cash flows from operating activities as defined under generally accepted accounting principles. In addition, Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
The table below sets forth a reconciliation of Adjusted EBITDA to net income for the three-, nine- and twelve-month periods ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | 9/30/2012 | | 9/25/2011 | | | (13 weeks) | | (13 weeks) | | (39 weeks) | | (38 weeks) | | (53 weeks) | | (52 weeks) | | | (In thousands ) | Net income | | $ | 140,688 |
| | $ | 152,218 |
| | $ | 111,595 |
| | $ | 71,574 |
| | $ | 110,767 |
| | $ | 8,116 |
| Interest expense | | 26,863 |
| | 41,353 |
| | 83,902 |
| | 124,650 |
| | 116,437 |
| | 171,049 |
| Interest income | | (13 | ) | | (32 | ) | | (31 | ) | | (120 | ) | | (68 | ) | | (194 | ) | Provision (benefit) for taxes | | 51,713 |
| | 37,844 |
| | 41,395 |
| | 21,773 |
| | 30,839 |
| | (12,424 | ) | Depreciation and amortization | | 60,747 |
| | 63,448 |
| | 113,156 |
| | 110,857 |
| | 128,136 |
| | 126,382 |
| EBITDA | | 279,998 |
| | 294,831 |
| | 350,017 |
| | 328,734 |
| | 386,111 |
| | 292,929 |
| Net effect of swaps | | (175 | ) | | (3,962 | ) | | (1,318 | ) | | (3,507 | ) | | (10,930 | ) | | 1,772 |
| Unrealized foreign currency (gain) loss | | (14,737 | ) | | 17,314 |
| | (14,108 | ) | | 13,224 |
| | (17,502 | ) | | 549 |
| Non-cash equity expense (income) | | 362 |
| | — |
| | 2,630 |
| | (228 | ) | | 2,619 |
| | (269 | ) | Loss on impairment of goodwill and other intangibles | | — |
| | — |
| | — |
| | — |
| | — |
| | 903 |
| Loss on impairment/retirement of fixed assets, net | | 25,000 |
| | 880 |
| | 24,230 |
| | 1,076 |
| | 25,719 |
| | 63,509 |
| Terminated merger costs | | — |
| | — |
| | — |
| | 80 |
| | 150 |
| | (79 | ) | Refinancing costs | | — |
| | (195 | ) | | — |
| | 955 |
| | — |
| | 955 |
| Other non-recurring items (as defined) | | 1,861 |
| | 836 |
| | 4,026 |
| | 6,107 |
| | 7,445 |
| | 6,107 |
| Adjusted EBITDA (1) | | $ | 292,309 |
| | $ | 309,704 |
| | $ | 365,477 |
| | $ | 346,441 |
| | $ | 393,612 |
| | $ | 366,376 |
| | | | | | | | | | | | | | (1) As permitted by and defined in the Amended 2010 Credit Agreement | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Three months ended | | Twelve months ended | | | 3/31/2013 | | 3/25/2012 | | 3/31/2013 | | 3/25/2012 | | | (13 weeks) | | (12 weeks) | | (53 weeks) | | (52 weeks) | | | (In thousands) | Net income (loss) | | $ | (109,126 | ) | | $ | (65,415 | ) | | $ | 58,145 |
| | $ | 84,807 |
| Interest expense | | 25,763 |
| | 26,803 |
| | 109,579 |
| | 142,876 |
| Interest income | | (40 | ) | | (16 | ) | | (92 | ) | | (92 | ) | Provision (benefit) for taxes | | (35,659 | ) | | (21,539 | ) | | 17,638 |
| | 5,937 |
| Depreciation and amortization | | 4,786 |
| | 4,079 |
| | 127,013 |
| | 125,892 |
| EBITDA | | (114,276 | ) | | (56,088 | ) | | 312,283 |
| | 359,420 |
| Loss on early extinguishment of debt | | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | 9,211 |
| | (970 | ) | | 8,689 |
| | (15,976 | ) | Unrealized foreign currency (gain) loss | | 8,881 |
| | (8,249 | ) | | 7,949 |
| | 8,502 |
| Non-cash equity expense | | 2,933 |
| | 1,700 |
| | 4,498 |
| | 1,689 |
| Loss on impairment/retirement of fixed assets, net | | 600 |
| | 92 |
| | 30,844 |
| | 11,251 |
| (Gain) on sale of other assets | | — |
| | — |
| | (6,625 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | 230 |
| Refinancing costs | | — |
| | — |
| | — |
| | (34 | ) | Other non-recurring items (as defined) | | 805 |
| | 1,721 |
| | 3,264 |
| | 6,823 |
| Adjusted EBITDA (1) | | $ | (57,273 | ) | | $ | (61,794 | ) | | $ | 395,475 |
| | $ | 371,905 |
| | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | |
Results of Operations:
Our results of operations for the nine, three and twelve months ended September 30, 2012 and September 25, 2011 are not directly comparable as the current nine- and twelve month periods include an additional week of operations due to the timing of the fiscal third quarter close, and as the current three-month period includes fewer operating days due to the timing of the fiscal second and third quarter closes. Since a large portion of the variances in our statements of operations is due to the difference in the number of operating days in the current fiscal periods, we will also compare current operating results to the prior year period ended October 2, 2011.
Immaterial Restatement -
We have made two separate corrections relating to our use of the composite depreciation methodmethod.
The first correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the group3 and 12 month periods ended March 25, 2012, related to a misapplication of assets acquired as a whole in 1983, as well as for groups of assets in each subsequent business acquisition.the composite depreciation method. Upon the normal retirement of an asset within a composite group, our practice generally hashad been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of our financial statements for the three months ended July 1,in 2012, wemanagement determined that this methodology was not appropriate. As a result, we revised the useful lives of our composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation).
The second correction, which impacts the Balance Sheet at March 25, 2012 and the Statement of Operations and Other Comprehensive Income for the 12 month period ended March 25, 2012, reflects a subsequent determination that a disposition from our composite group of assets was considered to be unusual. In certain situations under the composite method, disposals are considered unusual and, accordingly, losses are not included in the composite depreciation pool but are rather charged immediately to expense. In 2013, the Partnership's initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was challenged by the SEC Staff. We evaluated the amount and nature of these adjustments andultimately concluded that theysuch disposition was unusual and that a $8.8 millioncharge be reflected in the 2011 financial statements.
First Quarter -
Operating results for the first quarter historically include less than 5% of our full-year revenues and attendance. The results include normal off-season operating, maintenance and administrative expenses at our ten seasonal amusement parks and four outdoor water parks, as well as daily operations at Knott's Berry Farm, which is open year-round, and Castaway Bay, which is generally open daily from Memorial Day to Labor Day plus a limited daily schedule for the balance of the year. The following table presents key financial information for the three months ended March 31, 2013 and March 25, 2012: | | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 3/31/2013 | | 3/25/2012 | | $ | | % | | | (13 weeks) | | (12 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 41,799 |
| | $ | 28,198 |
| | $ | 13,601 |
| | 48.2 | % | Operating costs and expenses | | 102,733 |
| | 93,356 |
| | 9,377 |
| | 10.0 | % | Depreciation and amortization | | 4,786 |
| | 4,079 |
| | 707 |
| | 17.3 | % | Loss on impairment / retirement of fixed assets | | 600 |
| | 92 |
| | 508 |
| | N/M |
| Operating loss | | $ | (66,320 | ) | | $ | (69,329 | ) | | $ | 3,009 |
| | (4.3 | )% | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | (57,273 | ) | | $ | (61,794 | ) | | $ | 4,521 |
| | (7.3 | )% |
For the quarter ended March 31, 2013, net revenues increased to $41.8 million from $28.2 million for the first quarter of 2012. The increase between periods was primarily due to the strong first-quarter performance in both attendance and per-capita spending at Knott's Berry Farm, our only year-round property, compared with the first quarter a year ago, as well as an extra week of operations due to the earlier timing of Easter in 2013 compared to 2012. At the end of the first quarter, only five of our 15 properties were not materialin operation. The other parks, including our larger parks, Cedar Point and Kings Island located in Ohio and Canada's Wonderland in Toronto, were in the final stages of preparing to eitheropen for the 2013 operating season.
Operating costs and expenses for the quarter increased $9.3 million to $102.7 million from $93.4 million in 2012 and were in line with expectations. Operating results for the first quarter include normal off-season operating, maintenance and administrative
expenses at our prior annualseasonal amusement and water parks, and daily operations at Knott’s Berry Farm and Castaway Bay. The increase in first-quarter costs reflects a $5.4 million increase in operating expenses and a $2.3 million increase in selling, general and administrative ("SG&A") expenses. The cost of food, merchandise and games revenues for the period increased slightly due to sales volume increases at Knott's Berry Farm in the first quarter of 2013. The $5.4 million increase in operating expenses was due primarily to the extra week of operations in the first quarter of 2013 compared with 2012. For the quarter, labor costs increased $3.8 million, maintenance expense increased $2.2 million and operating supplies increased $0.9 million. These increases in operating costs were somewhat offset by a reduction in insurance expense due to a prior-year, non-recurring public liability claim at one of our parks. The $2.3 million increase in SG&A expenses was due primarily to increases in first-quarter advertising fees and full-time labor costs, largely related to full staffing levels.
Interest expense for the first quarter of 2013 was $25.8 million, representing a $1.0 million decrease compared to the first quarter of 2012. The decrease in interest expense was primarily due to the settlement of our Canadian swap in the first quarter of 2012.
During the first quarter of 2013, the net effect of our swaps decreased $10.2 million to a non-cash charge to earnings of $9.2 million, reflecting the regularly scheduled amortization of amounts in AOCI related to interest rate swaps, the write off of amounts in AOCI related to de-designated interest rate swaps, as well as gains from marking the ineffective and de-designated swaps to market. During the first quarter of 2013 we also recognized a $9.0 million charge to earnings for unrealized/realized foreign currency gains and losses, $8.9 million of which represents an unrealized foreign currency loss on the U.S.-dollar denominated debt held at our Canadian property. Due to our March 2013 refinancing, loan fees related to our 2010 and 2011 financings were written off, resulting in a $34.6 million charge to earnings in the period.
During the quarter, a benefit for taxes of $35.7 million was recorded to account for publicly traded partnership (PTP) taxes and the tax attributes of our corporate subsidiaries, compared to a benefit for taxes of $21.5 million in the same period a year ago. Actual cash taxes paid or quarterly financial statements. Nonetheless, the historical financial statement amounts included in this filing have been corrected for this error. We expect to likewise correct previously presented historical financial statementspayable are estimated to be included in future filings, including the annual financial statements to be included in our Annual Report on Form 10-Kbetween $14-$17 million for the 2013 calendar year.
After interest expense and the provision for taxes, net loss for the quarter totaled $109.1 million, or $1.95 per diluted limited partner unit, compared with net loss of $65.4 million, or $1.18 per diluted limited partner unit, for the first quarter a year ending December 31, 2012.ago. The larger net loss for the period is due to the loss on early debt extinguishment and a change in the unrealized/realized loss on foreign currency exchange, offset somewhat by the increased first-quarter revenues.
NineTwelve Months Ended September 30, 2012March 31, 2013 -
The fiscal nine-monthtwelve-month period ended September 30, 2012,March 31, 2013, consisted of a 39-week53-week period and included a total of 2,178 operating days compared with 3852 weeks and 2,148 operating days for the fiscal nine-monthtwelve-month period ended SeptemberMarch 25, 2011.2012. Operating days were virtually identical, as the current period had only one additional operating day.
The following table presents key financial information for the ninetwelve months ended September 30, 2012March 31, 2013 and SeptemberMarch 25, 20112012: | | | | | | | | | | | | | | | | | | | Nine months ended | | Nine months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (39 weeks) | | (38 weeks) | | | | | | | (Amounts in thousands except per capita spending) | | | | | | | | | | Net revenues | | $ | 939,249 |
| | $ | 883,627 |
| | $ | 55,622 |
| | 6.3 | % | Operating costs and expenses | | 580,246 |
| | 541,665 |
| | 38,581 |
| | 7.1 | % | Depreciation and amortization | | 113,156 |
| | 110,857 |
| | 2,299 |
| | 2.1 | % | Loss on impairment / retirement of fixed assets, net | | 24,230 |
| | 1,076 |
| | 23,154 |
| | N/M |
| Operating income | | $ | 221,617 |
| | $ | 230,029 |
| | $ | (8,412 | ) | | (3.7 | )% | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 365,477 |
| | $ | 346,441 |
| | $ | 19,036 |
| | 5.5 | % | Adjusted EBITDA margin | | 38.9 | % | | 39.2 | % | | $ | — |
| | (0.3 | )% | Attendance | | 20,689 |
| | 20,114 |
| | 575 |
| | 2.9 | % | Per capita spending | | $ | 41.78 |
| | $ | 40.15 |
| | $ | 1.63 |
| | 4.1 | % | Out-of-park revenues | | $ | 99,526 |
| | $ | 97,622 |
| | $ | 1,904 |
| | 2.0 | % |
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 3/31/2013 | | 3/25/2012 | | $ | | % | | | (53 weeks) | | (52 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,082,055 |
| | $ | 1,029,801 |
| | $ | 52,254 |
| | 5.1 | % | Operating costs and expenses | | 694,139 |
| | 666,535 |
| | 27,604 |
| | 4.1 | % | Depreciation and amortization | | 127,013 |
| | 125,892 |
| | 1,121 |
| | 0.9 | % | (Gain) on sale of other assets | | (6,625 | ) | | — |
| | (6,625 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 30,844 |
| | 11,251 |
| | 19,593 |
| | 174.1 | % | Operating income | | $ | 236,684 |
| | $ | 226,123 |
| | $ | 10,561 |
| | 4.7 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 395,475 |
| | $ | 371,905 |
| | $ | 23,570 |
| | 6.3 | % | Adjusted EBITDA margin | | 36.5 | % | | 36.1 | % | | — |
| | 0.4 | % |
Net revenues totaled $1,082.1 millionfor the ninetwelve months ended September 30, 2012March 31, 2013, increasing $52.3 million, from $1,029.8 million increased $55.6 million to $939.2 million from $883.6 million duringfor the ninetrailing twelve months ended SeptemberMarch 25, 20112012. The increase in revenues reflects an increase of 575,000 visits, or 3%, in combined attendanceRevenues for the nine-monthtwelve-month period ended September 30, 2012 when compared withincreased 5% on the nine-month period ended September 25, 2011. The increase in revenues also reflects a 4%, or $1.63, increase in averagestrength of higher attendance and in-park guest per capita spending. In-park guest per capita spending represents the amount spent per attendee to gain admission to a park, plus all amounts spent while inside the park gates. The increase in per capita spending was largely due to the successful introduction of new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing initiatives. Attendance increased year-over-year on virtually the same number of operating days as our season pass sales and visits increased during the same nine-month period and a 2%, or $1.9 million, increase incomparable periods.
Meanwhile, out-of-park revenues. Out-of-park revenues, includewhich represents the sale of hotel rooms, food, merchandise and other complementary activities located outside of the park gates, as well as e-commerce transaction fees. In-park guest per capita spending representsincreased slightly in the average amount spent per attendee to gain admission to a park
plus all amounts spent while inside the park gates. Revenuescomparable periods. The increase in net revenues for the first ninetwelve months of the yearended March 31, 2013 also reflectreflects the negative impact of currency exchange rates and the weakening U.S. dollar on our Canadian operations ($4.5(approximately $4.5 million) during the period.
For the nine-month period ended September 30, 2012, operatingOperating costs and expenses increased 7%$27.6 million, or 4%, or $38.5to $694.1 million to $580.2 million from $541.7versus $666.5 million for 2012 and were in line with expectations. The increase in costs and expenses was the nine-month period ended September 25, 2011, the net result of a $3.9$4.0 million increase in cost of goods sold, a $29.3$19.8 million increase in operating expenses, and a $5.4 million$3.9 increase in selling, generalSG&A costs. The 4% increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at our parks. Operating expenses increased due to several factors, including higher employment-related costs, higher operating supply costs, and higher self-insurance expenses. Employment-related costs increased approximately $12.6 million due to normal merit increases, increases in health-related benefit costs, additional staffing levels associated with new premium benefit offerings and other initiatives aimed at improving the overall guest experience, and non-recurring severance payments. Operating supplies and expenses increased approximately $5.3 million due primarily to initiatives to expand or enhance live entertainment at the parks, as well as incremental costs associated with our e-commerce platform and higher attendance. These increases in operating costs were somewhat offset by a reduction in insurance expense due to a prior-year (first quarter of 2012), non-recurring public liability claim at one of our parks.
The increase in SG&A costs was due to an increase in employment-related costs ($4.5 million), operating supplies ($3.8 million), and agency advertising fees ($2.7 million), offset by decreases in professional and administrative costs ("SG&A")($5.9 million). DepreciationThe increase in employment costs was primarily the result of higher wages and amortization expense for the period increased $2.3 millionbenefits due to normal merit increases and full-staffing levels. Increases in operating supplies and advertising fees were due to the earlier timing of Easter, as well as incremental costs to support operating initiatives including general infrastructure improvements. Professional and administrative fees decreased primarily due to a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests. The overall increase in capital spending when compared withcosts and expenses also reflects the prior year. The positive impact of exchange rates on our Canadian operations ($1.2 million) during the period.
Loss on impairment/retirement of fixed assets, reported fornet, during the nine-month period totaled $30.8 million, which reflects a non-cash charge to earnings of $25.0 million for the partial impairment of operating and non-operating fixed assets at Wildwater Kingdom netalong with losses on other retirements. During the twelve-month period ended March 31, 2013, two non-core assets were sold at gains totaling $6.6 million. During the twelve-month period ended March 25, 2012, a charge of an $0.8$11.3 million gain fromfor the sale of a non-operating asset at one of our properties. After depreciation, amortization, loss on impairment / retirement of fixed assets was recorded which includes the retirement of the asset as described in Note 11 to the financial statements.
Depreciation and amortization expense for the period increased $1.1 million compared with the prior period due primarily to an increase in capital expenditures for the 2012 season. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for the current period decreased $8.4increased $10.6 million to $221.6$236.7 million through the first nine months of 2012 from operating income of $230.0 million through the first nine months of 2011.$226.1 million.
Interest expense for the first three quarters of 2012 was $83.9twelve months ended March 31, 2013 decreased $33.3 million a decrease of $40.7to $109.6 million, from $142.9 million for the first three quarters of 2011.same twelve-month period a year ago. The reduction in interest expense iswas primarily attributable to an approximate 300 basis point (bps) decline in our effective interest rate, the result of lower fixed rates on London InterBank Offered Rate (LIBOR) within our interest-rate swap contracts. TheAdditionally during the current period, $25.0 million of term debt principal payments were made, reducing our average fixed LIBOR rate in our swap agreements declined from 5.62% in 2011 to 2.48% in 2012.debt outstanding.
ForDuring the current period, the net effect of our interest rate swaps decreased $2.2was recorded as a charge to earnings of $8.7 million between years, resulting incompared to a non-cash benefit to earnings of $1.3$16.0 million for the first nine months of 2012, as compared with a $3.5 million non-cash benefit to earnings for the nine-month period in 2011.prior period. The difference reflects the regularly scheduled amortization of amounts in Accumulated other comprehensive income ("AOCI")AOCI related to the swaps and the write off of AOCI amounts related to de-designated interest rate swaps, which were offset by gains from marking the ineffective and de-designated swaps to market and foreign currency gains related to the U.S.-dollar denominated Canadian term loan in the current period. During the current year-to-date period, we also recognized a $13.9$8.2 million net benefitcharge to earnings for unrealized/realized foreign currency gains,losses, which included a $14.1$7.9 million unrealized foreign currency gainloss on the U.S.-dollar denominated debt held at our Canadian property. Due to our March 2013 refinancing, loan fees that were paid as part
of our 2010 and 2011 financings were written off, resulting in a $34.6 million non-cash charge to earnings recorded in "Loss on early debt extinguishment" on the consolidated statement of operations.
During the first fiscal nine months of 2012, aA provision for taxes of $41.4$17.6 million was recorded to accountin the period for publicly traded partnership (“PTP”) taxes and the tax attributes of our corporate subsidiaries.subsidiaries and publicly traded partnership (PTP) taxes. This compares with a $21.8 million provision for taxes of $5.9 million in period ended March 25, 2012 for the first fiscal nine monthstax attributes of 2011. The year-over-year variation in the tax provision is due primarily to an increase in the income subject to tax. Actual cash taxes paid or payable for the 2012 calendar year are estimated to be between $11our corporate subsidiaries and $13 million. The Partnership also expects to receive a $10.4 million refund of prior year taxes paid resulting from the carry back of the loss recognized from the settlement of a derivative contract.PTP taxes.
After interest expense and the benefitprovision for taxes, net income for the nine months ended September 30, 2012period totaled $111.6$58.1 million, or $2.00$1.04 per diluted limited partner unit, compared with net income of $71.6$84.8 million, or $1.28$1.52 per unit, for the nine months ended September 25, 2011.a year ago.
It is important to note that the current nine-month results benefited from an additional week, or 30 more operating days, due to the timing of the third quarter fiscal close. Comparing both 2012 and 2011 on a 39-week basis, net revenues would have been up $41.1 million, or 5%, on increases in both attendance and in-park guest per capita spending. On a comparable basis, attendance would have increased 228,000 visits, primarily due to an increase in season pass attendance, and in-park per capita spending would have increased $1.67, or 4%, primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Over that same comparable basis, out-of-park revenues would have decreased by approximately $0.3 million, or less than 1%.
Operating costs and expenses on a comparable 39-week basis would have increased approximately $27.9 million, or 5%, due to an increase of $2.9 million, or 3%, in cost of goods sold, an increase in operating expenses of $21.9 million, or 6%, and an increase of $3.1 million, or 3%, in SG&A costs. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $1.6 million) during the nine-month period ended September 30, 2012.
The 3% increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Operating expenses in the 39-week period increased due to several factors, including higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. Employment-related costs increased approximately $11.0 million due to normal merit increases, increases in health-related benefit costs, additional staffing levels associated with new premium benefit offerings and other initiatives aimed at improving the overall guest experience, and non-recurring severance payments. Due in part to mild weather, we were able to accelerate off-season maintenance projects into the first half of the year, resulting in year-over-year maintenance expense increasing by approximately $4.4 million. Operating supplies and expenses increased approximately $4.0 million due primarily to initiatives
to expand or enhance live entertainment at the parks, as well as incremental costs associated with our new e-commerce platform. During the first nine months, public liability and workers compensation expense increased $2.1 million due to claim settlements and an increase in our reserves based on management's estimates of future claims.
SG&A expense for the comparable 39-week period increased approximately $3.1 million compared to same period in 2011 due to an increase in operating supplies of $4.7 million, an increase in advertising costs of $1.5 million, and an increase in employee related costs of $2.9 million. The operating supplies and advertising increases were due to incremental costs to support 2012 operating initiatives including general infrastructure improvements. These increases in expense were offset somewhat by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in 2011.
For the fiscal nine-month period ended September 30, 2012,We believe Adjusted EBITDA (as defined in the Amended 2010 Credit Agreement), which we believe is a meaningful measure of our park-level operating results (for additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net income, see Note 6 in Item 6, “Selected Financial Data,” on pages 15-16). For the twelve-month period ended March 31, 2013, Adjusted EBITDA increased $23.6 million, or 6%, to $365.5 million compared with $346.4 million$395.5 million. Over this same period, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased 40 bps to 36.5% from 36.1% for the fiscal nine-monthtwelve-month period ended SeptemberMarch 25, 2011. This2012. The increase was due in part to the extra week in the current fiscal nine-month period. On a same-week basis, Adjusted EBITDA for the nine-month period would have still been up approximately $15.2 million, or 4%, between years,was primarily due to anthe increase in revenues resulting from the successful introduction of our new premium benefit offerings and dynamic pricing initiatives, as well as the successful expansion of our season pass base. These revenue gains were offset somewhat by an increase in operating costs in the period. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
Third Quarter -
The fiscal three-month period ended September 30, 2012, consisted of a 13-week period and included a total of 1,177 operating days compared with 13 weeks and 1,253 operating days for the fiscal three-month period ended September 25, 2011. The variance in days is due to a shift in the operating calendar.
The following table presents key financial information for the three months ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (13 weeks) | | (13 weeks) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 553,445 |
| | $ | 572,268 |
| | $ | (18,823 | ) | | (3.3 | )% | Operating costs and expenses | | 263,657 |
| | 262,188 |
| | 1,469 |
| | 0.6 | % | Depreciation and amortization | | 60,747 |
| | 63,448 |
| | (2,701 | ) | | (4.3 | )% | Loss on impairment / retirement of fixed assets | | 25,000 |
| | 880 |
| | 24,120 |
| | N/M |
| Operating income | | $ | 204,041 |
| | $ | 245,752 |
| | $ | (41,711 | ) | | (17.0 | )% | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 292,309 |
| | $ | 309,704 |
| | $ | (17,395 | ) | | (5.6 | )% | Adjusted EBITDA margin | | 52.8 | % | | 54.1 | % | | — |
| | (1.3 | )% | Attendance | | 11,960 |
| | 12,933 |
| | (973 | ) | | (7.5 | )% | Per capita spending | | $ | 42.90 |
| | $ | 40.84 |
| | $ | 2.06 |
| | 5.0 | % | Out-of-park revenues | | $ | 54,260 |
| | $ | 58,879 |
| | $ | (4,619 | ) | | (7.8 | )% |
For the quarter ended September 30, 2012, net revenues decreased 3%, or $18.8 million, to $553.5 million from $572.3 million in 2011. This decrease reflects a 5% increase in average in-park per capita spending, offset by an 8% decrease in combined attendance (973,000 visits), and an 8% ($4.6 million) decrease in out-of-park revenues. The decreases in net revenues and attendance was largely attributable to the decrease in operating days in the quarter due to the way the fiscal calendar fell in 2012 compared with 2011. In-park per capita spending increased primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Out-of-park revenues decreased due to soft results in accommodations being somewhat offset by fees generated from our new e-commerce initiatives. The decrease in revenues for the third quarter of 2012 also reflects the negative impact of exchange rates on our Canadian operations ($2.4 million) during the period.
Operating costs and expenses for the quarter increased less than 1%, or $1.5 million, to $263.7 million from $262.2 million in the third quarter of 2011, the net result of a $1.4 million decrease in cost of goods sold, a $1.9 million increase in operating expenses and a $1.0 million increase in SG&A costs. Operating cost and expense variances between years were also affected by the fewer number of operating days in the current fiscal quarter, as discussed above. Depreciation and amortization expense for the quarter decreased $2.7 million due primarily to the reduction in operating days in the period, on which depreciation expense is based. During the current quarter, we recognized a non-cash charge to earnings of $25.0 million for the partial impairment of operating and non-operating fixed assets at Wildwater Kingdom.
Interest expense for the third quarter of 2012 was $26.9 million, representing an $14.5 million decrease from the interest expense for the third quarter of 2011. As mentioned in the nine-month discussion above, interest expense decreased primarily due to an approximate 300 bps decline in our effective interest rate. The decline in the effective interest rate is primarily due to lower fixed rates of LIBOR in debt associated derivative contracts, which declined from 5.62% in 2011 to 2.48% in 2012.
The net effect of our swaps during the third quarter was a non-cash benefit to earnings of $0.2 million, representing a decrease of $3.8 million from the prior year. This non-cash benefit reflects the regularly scheduled amortization of amounts in AOCI related to the swaps. During the 2012 third quarter, we also recognized a $15.0 million net benefit to earnings for unrealized/realized foreign currency gains, $14.7 million of which represents an unrealized foreign currency gain on the U.S.-dollar denominated debt held at our Canadian property.
During the quarter, a provision for taxes of $51.7 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provision for taxes of $37.8 million in the same period a year ago. The variation in the tax provision recorded between periods is due primarily to the increase in income subject to tax. After interest expense and the provision for taxes, net income for the quarter totaled $140.7 million, or $2.51 per diluted limited partner unit, compared with net income of $152.2 million, or $2.73 per unit, for the third quarter a year ago.
It is important to note that the current three-month results were negatively impacted by 76 less operating days, due to the timing of the second and third quarter fiscal closes. Comparing the third quarters of 2012 and 2011 on a comparable operating-day basis, net revenues would have been up $20.8 million, or 4%, on an increase in average in-park guest per capita spending offset by a slight decrease in attendance and a 3% decrease in out-of-park revenues.
Operating costs and expenses on a comparable operating-day basis would have increased approximately $12.4 million, or 5%, on a $2.1 million increase in cost of goods sold, an $8.4 million increase in operating expenses, and $1.9 million increase in SG&A costs. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $0.6 million) during the third quarter. The increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Consistent with our nine-month discussion above, operating expenses in the third quarter increased as a result of higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. The increase in SG&A expense for the quarter reflects an increase in operating supplies associated with the new e-commerce initiative and general park infrastructure improvements, offset slightly by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in the third quarter of 2011.
For the current quarter, Adjusted EBITDA decreased to $292.3 million from $309.7 million for the fiscal third quarter of 2011. The $17.4 million decrease in Adjusted EBITDA was due to the shift in operating days during the quarter. On a same week basis, Adjusted EBITDA would have increased $11.3 million due to incremental revenues resulting from the introduction of new premium benefit offerings, which contributed to increased average guest per capita spending, as well as an increase in attendance in the quarter. Partially offsetting these gains on a same week basis were higher park-level operating costs during the period related to park pre-opening and off-season maintenance projects and increases in costs to support 2012 initiatives, including a new e-commerce platform and infrastructure improvements. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
Twelve Months Ended September 30, 2012 -
The fiscal twelve-month period ended September 30, 2012, consisted of a 53-week period and included a total of 2,416 operating days compared with 52 weeks and 2,381 operating days for the fiscal twelve-month period ended September 25, 2011.
The following table presents key financial information for the twelve months ended September 30, 2012 and September 25, 2011:
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 9/30/2012 | | 9/25/2011 | | $ | | % | | | (53 weeks) | | (52 weeks) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,084,094 |
| | $ | 1,013,316 |
| | $ | 70,778 |
| | 7.0 | % | Operating costs and expenses | | 701,915 |
| | 650,925 |
| | 50,990 |
| | 7.8 | % | Depreciation and amortization | | 128,136 |
| | 126,382 |
| | 1,754 |
| | 1.4 | % | Loss on impairment of goodwill and other intangibles | | — |
| | 903 |
| | (903 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 25,719 |
| | 63,509 |
| | (37,790 | ) | | N/M |
| Operating income | | $ | 228,324 |
| | $ | 171,597 |
| | $ | 56,727 |
| | 33.1 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 393,612 |
| | $ | 366,376 |
| | $ | 27,236 |
| | 7.4 | % | Adjusted EBITDA margin | | 36.3 | % | | 36.2 | % | | — |
| | 0.2 | % | Attendance | | 23,961 |
| | 23,135 |
| | 826 |
| | 3.6 | % | Per capita spending | | $ | 41.44 |
| | $ | 39.91 |
| | $ | 1.53 |
| | 3.8 | % | Out-of-park revenues | | $ | 119,460 |
| | $ | 114,258 |
| | 5,202 |
| | 4.6 | % |
Net revenues totaled $1,084.1 million for the twelve months ended September 30, 2012, increasing $70.8 million, from $1,013.3 million for the trailing twelve months ended September 25, 2011. The increase in revenues was due to an increase in attendance of 826,000 visits, or 4%, an increase in average in-park per capita spending of $1.53, or 4%, and an increase in out-of-park revenues of $5.2 million, or 5%. The attendance increase was due to an increase in season pass visitation as well as the effect of the extra operating days in the period. The increase in average in-park guest per capita spending is primarily due to new premium benefit offerings and the positive impact from new customer messaging and dynamic pricing. Out-of-park revenues increased due to our hotel properties and due to an increase in fees generated by our new e-commerce initiatives. The increase in revenues was also positively affected by the additional operating days in the current fiscal period.
When comparing the two twelve-month periods, operating costs and expenses increased $51.0 million, or 8%, to $701.9 million in 2012 from $650.9 million in 2011. The increase in operating costs and expenses was the net result of a $5.2 million increase in cost of goods sold, a $33.2 million increase in operating expenses and an increase of $12.6 million in selling, general and administrative costs. The increase in operating expenses is primarily attributable to higher employment related expenses of $15 million, $6 million of higher maintenance costs, $1 million in higher insurance costs, and $5 million of higher operating supply costs. The increase in wages is largely due to increased seasonal labor hours as a result of expanded operating hours at several parks, additional attractions and guest services, and the overall effect of increased attendance. The increase in insurance costs was primarily the result of claim settlements and increases in our reserves based on future estimated claim liabilities. As discussed in the nine- and three-month sections, maintenance costs increased primarily due to the earlier timing of planned off-season projects, as well as an increase in the number of projects designed to add to the guest experience. The increase in operating supply costs relates primarily to an increase in attendance over the past year, as well as incremental costs associated with the new e-commerce platform. The increase in SG&A costs includes $5 million in costs largely related to the launching of several new revenue initiatives for the 2012 season, as well as a $3 million increase in advertising expense as we transitioned to a new advertising agency for 2012. Employment related expenses increased $5 million primarily due to the receipt of a non-recurring payroll tax credit of $2.5 million recorded in the fourth quarter of 2010, as well as an increase in retirement expenses and non-recurring severance payments in the current twelve-month period. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations (approximately $1.6 million) during the twelve-month period ended September 30, 2012.
Depreciation and amortization expense for the trailing-twelve-month periods increased $1.8 million between years due to the increase in capital spending during the current-year period compared with the prior year. During the twelve months ended September 30, 2012, we recognized $0.7 million in non-cash charges for the retirement of assets in the normal course of business. Additionally, we recorded a non-cash charge of $25.0 million for the partial impairment of operating and non-operating fixed
assets at Wildwater Kingdom during the third quarter in 2012. This compares to a non-cash charges recognized during the twelve-month period ended September 25, 2011 of $62.0 million at California's Great America for the partial impairment of its fixed assets and $1.5 million for asset retirements across all properties. Additionally, a non-cash charge of $0.9 million was recorded during the fourth quarter of 2010 for the partial impairment of trade-names originally recorded at the time of the PPI acquisition. It is important to note that each of our parks produces positive cash flow, and that trade-name write-downs and fixed asset impairment losses do not affect cash, Adjusted EBITDA or liquidity.
After depreciation, amortization, loss on impairment of the trade-names, loss on impairment / retirement of fixed assets, and all other non-cash costs, operating income for the twelve months ended September 30, 2012 increased $56.7 million to $228.3 million compared with $171.6 million for the same period a year ago.
Interest expense for the twelve month period ended September 30, 2012 decreased $54.6 million to $116.4 million from $171.0 million for the prior twelve month period ended September 25, 2011. As mentioned in the nine-month discussion above, interest expense decreased primarily due to an approximate 300 bps decline in our effective interest rate. The decline in the effective interest rate is primarily due to lower fixed rates of LIBOR in debt associated derivative contracts, which declined from 5.62% in 2011 to 2.48% in 2012.
The net effect of our swaps during the period was a non-cash benefit to earnings of $10.9 million, representing an increase of $12.7 million from the same period ended September 25, 2011. This non-cash benefit reflects gains from marking the ineffective and de-designated swaps to market, offset somewhat by the regularly scheduled amortization of amounts in AOCI related to the swaps and foreign currency losses related to the U.S.-dollar denominated Canadian term loan in the current twelve month period. During the current twelve-month period, we also recognized a $18.7 million net benefit to earnings for unrealized/realized foreign currency gains and losses, $17.5 million of which represents an unrealized foreign currency gain on the U.S.-dollar denominated debt held at our Canadian property.
A provision for taxes of $30.8 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries during the twelve-month period ended September 30, 2012, compared with a net benefit for taxes of $12.4 million during the same twelve-month period a year ago. The variation in the recorded tax provision between periods is due to the higher income subject to tax for the twelve-month period ending September 30, 2012 and the tax benefit of the impairment charge recorded in the previous twelve-month period.
After interest expense and the provision for taxes, net income for the twelve months ended September 30, 2012 was $110.8 million, or $1.98 per diluted limited partner unit, compared with net income of $8.1 million, or $0.15 per diluted limited partner unit, for the twelve months ended September 25, 2011.
It is important to note that due to the timing of the third quarter fiscal close results for the twelve-month period ended September 30, 2012 benefited from an additional week (53 weeks) compared to the twelve-month period ended September 25, 2011 (52 weeks). Comparing the twelve-month periods for both 2012 and 2011 on a 53-week basis, net revenues would have been up $56.2 million, or 5%, on increases in attendance, in-park guest per capita spending and out-of-park revenues. On a comparable 53-week basis, attendance would have increased 479,000 visits, due to an increase in season pass attendance, and in-park per capita spending would have increased $1.56, or 4%, primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. Over that same comparable basis, out-of-park revenues would have increased by approximately $3.5 million, or 3%.
On a comparable 53-week basis, operating costs and expenses would have increased approximately $40.3 million, or 6%, on a $4.2 million increase in cost of goods sold, an $25.8 million increase in operating expenses, and $10.4 million increase in SG&A costs. The overall increase in costs and expenses also reflects the favorable impact of exchange rates on our Canadian operations (approximately $1.6 million) during the period. The increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Consistent with our nine- and three-month discussions above, operating expenses for the twelve-month period increased as a result of higher employment-related costs, higher maintenance and operating supply costs, and higher self-insurance expenses. The higher employment-related costs reflect normal merit increases, increases in health-related benefit costs, an overall increase in seasonal labor hours as a result of expanded operating hours at several parks, additional attractions and guest services, the overall effect of increased attendance, and non-recurring severance payments. Employment related costs also increased as result of the non-recurring payroll tax credit of $2.5 million recorded in the fourth quarter of 2010. The higher maintenance costs in the current-year twelve-month period relate primarily to the earlier timing of planned off-season projects, which was possible as a result of the mild early-season weather in 2012. The increase in operating supplies was driven by higher attendance and new initiatives to expand or enhance live entertainment at the parks, as well as incremental costs associated with our new e-commerce platform. The increase in public liability and workers compensation expense was the result of a claim settlement in the first quarter of 2012
and increases in our reserves based on management's estimates of future claims. The higher SG&A costs reflect incremental costs associated with the launching of several new revenue initiatives for the 2012 season, including the new e-commerce platform, general park infrastructure improvements, and an increase in advertising expenses as we transitioned to a new advertising agency for 2012. These increases in SG&A costs were somewhat offset by a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in 2011.
For the twelve-month period ended September 30, 2012, Adjusted EBITDA increased to $393.6 million compared with $366.4 million for the twelve months ended September 25, 2011, while our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased slightly to 36.3% from 36.2% a year ago. A portion of this increase in Adjusted EBITDA was due to the extra week in the current fiscal twelve-month period. On a same-week basis, Adjusted EBITDA would have been up $23.4 million, or 6%, year over year, due to revenue growth driven by increased attendance and the strong 2011 fourth quarter operating performance. These gains were offset somewhat by incremental operating costs associated with the higher attendance and new operating initiatives for 2012. For the comparable twelve-month periods, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) would have increased 30 bps to 36.3% from 36.0% last year. For additional information regarding Adjusted EBITDA, including how we define Adjusted EBITDA, why we believe it provides useful information, and for a reconciliation to net income, see pages 33-34.
October 2012 -
Based on preliminary results through the end of October, revenues for the first ten months of the year increased approximately $37 million to $1,036 million from $999 million for the same period a year ago. The revenue increase is the result of a 4% increase in average in-park guest per capita spending to $42.00 and attendance levels that were comparable with last year's record results (22.7 million visits). Out-of-park revenues of approximately $108 million through October were also comparable with this time last year.
Liquidity and Capital Resources: With respect to both liquidity and cash flow, we ended the thirdfirst quarter of 20122013 in sound condition. The negative working capital ratio (current assetsliabilities divided by current liabilities)assets) of 1.01.4 at September 30, 2012March 31, 2013 reflects the impact of our seasonal business. Cash, receivables and inventories are at normal seasonal levels and credit facilities are in place to fund current liabilities.
In July 2010, we issued $405 million of 9.125% senior unsecured notes, maturing in 2018, in a private placement, including $5.6 million of Original Issue Discount (OID) to yield 9.375%. Concurrently with this offering, we entered into a new $1,435 million credit agreement (the "2010 Credit Agreement"), which included a $1,175 million senior secured term loan facility and a $260 million senior secured revolving credit facility. The net proceeds from the offering of the notes, along with borrowings under the 2010 Credit Agreement, were used to repay in full all amounts outstanding under our previous credit facilities.
In February 2011, we amended the 2010 Credit Agreement (as so amended, the "Amended 2010 Credit Agreement") and extended the maturity date of the U.S. term loan portion of the credit facilities by one year. Under the Amended 2010 Credit Agreement, the extended U.S. term loan iswas scheduled to mature in December of 2017 and bearsbore interest at a rate of LIBOR plus 300 bps, with a LIBOR floor of 100 bps. The Amended 2010 Credit Agreement also includesincluded a $260 million revolving credit facility. Under the agreement, the Canadian portion of the revolving credit facility has a limit of $15 million. U.S. denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 400 bps (with no LIBOR floor). Canadian denominated loans made under the Canadian portion of the facility also bear interest at a rate of LIBOR plus 400 bps (with no LIBOR floor). The revolving credit facility, which matureswas scheduled to mature in July of 2015, also providesprovided for the issuance of documentary and standby letters of credit.
In May 2012, the Partnership prepaidMarch 2013,we issued $16500 million of long-term debt to meet its obligation5.25% senior unsecured notes, maturing in 2021, in a private placement, with no OID. Concurrently with this offering, we entered into a new $885 million credit agreement (the "2013 Credit Agreement"), which included a $630 million senior secured term loan facility and a $255 million senior secured revolving credit facility. The terms of the senior secured term loan facility include a maturity date of March 15, 2020 and an interest rate of LIBOR plus 250 bps with a LIBOR floor of 75 bps. The term loan amortizes at $6.3 million annually. The net proceeds from the notes and borrowings under the Excess Cash Flow ("ECF") provision2013 Credit Agreement were used to repay in full all amounts outstanding under the previous credit facilities. The facilities provided under the 2013 Credit Agreement are collateralized by substantially all of the assets of the Partnership.
Terms of the 2013 Credit Agreement. AsAgreement include a resultrevolving credit facility of this prepayment, as well as additional optional long-term debt prepayments made in August 2011 and September 2012a combined $255 million. Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility has a limit of $1815 million. U.S. denominated and Canadian denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 225 bps (with no LIBOR floor). The revolving credit facility is scheduled to mature in March 2018 and also provides for the issuance of documentary and standby letters of credit. The 2013 Credit Agreement requires the Partnership to pay a commitment fee of $9 million50, respectively, bps per annum on the Company has no scheduled term-debt principal payments untilunused portion of the first quarter of 2015.credit facilities. At the end of the quarter, we had a total of $1,131.1$630.0 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $400.7$901.3 million of fixed-rate debt (including OID), no$96.0 million outstanding borrowings under our revolving
credit facility, and cash on hand of $96.1$10.0 million. After letters of credit, which totaled $16.5$16.4 million at September 30, 2012March 31, 2013, we had $243.5$142.6 million of available borrowings under the revolving credit facility under the Amended 20102013 Credit Agreement.
Our $405 million of senior unsecured notes require semi-annual interest payments in February and August, with the principal due in full on August 1, 2018. The notes may be redeemed, in whole or in part, at any time prior to August 1, 2014 at a price equal to 100% of the principal amount of the notes redeemed plus a “make-whole” premium together with accrued and unpaid interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Prior to August 1, 2013, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 109.125%. Our $500 million of senior unsecured notes pay interest semi-annually in March and September, with the principal due in full on March 15, 2021. The notes may be redeemed, in whole or in part, at any time prior to March 15, 2016 at a price equal to 100% of the principal amount of the notes redeemed plus a “make-whole” premium together with accrued and unpaid interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Prior to March 15, 2016, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 105.25%. In order to maintain fixed interest costs on a portion of our domestic term debt, in September 2010 we entered into several interest rateforward-starting swap agreements ("September 2010 swaps") to effectively convert a total of $600$600 million of variable-rate debt to fixed rates beginning in October 2011. As a result of the February 2011 amendment to our credit agreement,the 2010 Credit Agreement, the LIBOR floor on the term loan portion of ourits credit facilities decreased to 100 bps from 150 bps, causing a mismatch in critical terms of the September 2010 swaps and the underlying debt. Because of the mismatch of critical terms, we determined the September 2010 swaps, which were originally designated as cash flow hedges, were no longer highly effective, resulting in the de-designation of the September 2010 swaps as of the end of February 2011. As a result of this ineffectiveness, gains of $7.2 million recorded in AOCI through the date of de-designation are being amortized through December 2015. In order to monetize the difference in the LIBOR floors, in March 2011, we entered into several additional forward-starting basis-rate swap agreements ("March 2011 swaps") that, when combined with the September 2010 swaps, effectively converted $600$600 million of variable-rate debt to fixed rates beginning in October 2011. The September 2010 swaps and the March 2011 swaps, were jointly designated as cash flow hedges, maturing in December 2015 and had fixed LIBOR at a weighted average rate of 2.46%. For the period that the September 2010 swaps were de-designated, their fair value decreased by $3.3 million, the offset of which have beenwas recognized as a direct charge to earnings and recorded to “Net effect of swaps” on the consolidated statement of operations along with the regular amortization of “Other comprehensive income (loss)” balances related to these swaps. No other ineffectiveness related to these swaps was recorded in any period presented. In May 2011, we entered into four additional forward-starting basis-rate swap agreements ("May 2011 swaps") that effectively converted another $200 million of variable-rate debt to fixed rates beginning in October 2011. These swaps, which were designated as cash flow hedges, mature in December 2015 and fixed LIBOR at a weighted average rate of 2.54%. As a result of the 2013 Credit Agreement, the previously described swaps were de-designated as the spreads of the 2013 Credit Agreement decreased to 75 bps from 100 bps in the Amended 2010 Credit Agreement. The May 2011 swaps remain de-designated as the amount of variable rate debt decreased to $630 million, and accordingly, the May 2011 swaps are now over hedged. On March 4, 2013, we entered into several forward-starting swap agreements ("March 2013 swaps") that were not designated as a cash flow hedge on that date. On March 6, 2013, the March 2013 swaps were combined with the September 2010 swaps and the March 2011 swaps, and designated as cash flow hedges, effectively converting $600 million of variable-rate debt to fixed rates. The September 2010 swaps, the March 2011 swaps, and the March 2013 swaps were jointly designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.46%. In May 2011, we entered into four additional forward-starting basis-rate swap agreements ("May 2011 swaps") that effectively convert another $200 million of variable-rate debt to fixed rates beginning in October 2011. These swaps, which have been designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.54%2.331%. TheAt the time of the de-designation, the fair market value of all $800the September 2010 swaps, March 2011 swaps, and March 2013 swaps was $23.8 million, which will be amortized out of forward-starting swap agreements atAOCI into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive incomethrough December 2015. At the time of the de-designation, the fair market value of the May 2011 swaps was $7.8 million and was immediately recognized into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations.
At March 31, 2013, the fair market value of the September 30, 20122010 swaps, the March 2011 swaps and the March 2013 swaps was a liability of $34.723.4 million, which was recorded in "Derivative Liability"“Derivative Liability” on the condensed consolidated balance sheet. The May 2011 swaps had a fair market value of $7.6 million as of March 31, 2013 and was recorded in “Derivative Liability” on the condensed consolidated balance sheet.
The following table presents our September 2010 swaps, March 2011 swaps, and May 2011 swaps, and March 2013 swaps which became effective on October 1, 2011 and mature December 15, 2015, along with their notional amounts and their effective fixed interest rates. | | | | | | | | ($'s in thousands) | Forward-Starting Interest Rate Swaps | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 2.40 | % | | 75,000 |
| | 2.43 | % | | 50,000 |
| | 2.42 | % | | 150,000 |
| | 2.55 | % | | 50,000 |
| | 2.42 | % | | 50,000 |
| | 2.55 | % | | 25,000 |
| | 2.43 | % | | 50,000 |
| | 2.54 | % | | 30,000 |
| | 2.54 | % | | 70,000 |
| | 2.54 | % | | 50,000 |
| | 2.54 | % | Total $'s / Average Rate | $ | 800,000 |
| | 2.48 | % |
In 2006, we entered into several fixed-rate interest rate swap agreements totaling $1.0 billion. The weighted average fixed-LIBOR rate on these interest rate swaps, which matured on October 1, 2011, was 5.6%. Based upon our scheduled quarterly regression analysis testing of the effectiveness for the accounting treatment of these swaps, as well as changes in the forward interest rate yield curves used in that testing, the swaps were deemed to be ineffective beginning in October 2009 and continued to be deemed ineffective through their maturity. This resulted in the swaps not qualifying for hedge accounting during the fourth quarter of 2009 and through 2010 and the first three quarters of 2011.
In 2007, we entered into two cross-currency swap agreements, which matured in February 2012 and effectively converted $268.7 million of term debt at the time, and the associated interest payments, from U.S. dollar denominated debt at a rate of LIBOR plus
200 bps to 6.3% fixed-rate Canadian dollar denominated debt. As a result of paying down the underlying Canadian term debt with net proceeds from the sale of surplus land near Canada’s Wonderland in August 2009, the notional amounts of the underlying debt and the cross-currency swaps no longer matched. Because of the mismatch of the notional amounts, we determined the swaps were no longer highly effective going forward, resulting in the de-designation of the swaps as of the end of August 2009.
Based on the change in currency exchange rates from the time we originally entered into the cross-currency swap agreements in 2007, the termination liability of the swaps had increased steadily over time. In order to protect ourselves from further downside risk to the swaps' termination value, in May 2011 we entered into several foreign currency swap agreements to fix the exchange rate on 50% of the liability. In July 2011, we fixed the exchange rate on another 25% of the swap liability, leaving only 25% exposed to further fluctuations in currency exchange rates. In February 2012, these swap agreements were settled for $50.5 million.
In addition to other covenants and provisions, including those discussed below, the Amended 2010 Credit Agreement contains an initial three-year requirement (from July 2010) that at least 50% of our aggregate term debt and senior notes be subject to either a fixed interest rate or interest rate protection. As of September 30, 2012, we were in compliance with this requirement.
The following table presents fixed-rate swaps that matured on October 1, 2011. The table also presents our cross-currency swaps that matured on February 15, 2012 and their notional amounts and interest rates as of their maturity date.
| | | | | | | | | | | | | | | ($'s in thousands) | Interest Rate Swaps | | Cross-currency Swaps | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | Interest Rate | | $ | 200,000 |
| | 5.64 | % | | $ | 255,000 |
| | 7.31 | % | | 200,000 |
| | 5.64 | % | | 150 |
| | 9.50 | % | | 200,000 |
| | 5.64 | % | | | | | | 200,000 |
| | 5.57 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | | 100,000 |
| | 5.60 | % | | | | | Total $'s / Average Rate | $ | 1,000,000 |
| | 5.62 | % | | $ | 255,150 |
| | 7.31 | % | | | | | | | | |
| | | | | | | | | | | | | | | | Interest Rate Swaps | ($'s in thousands) | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 2.27 | % | | 50,000 |
| | 2.54 | % | | 75,000 |
| | 2.30 | % | | 30,000 |
| | 2.54 | % | | 50,000 |
| | 2.29 | % | | 70,000 |
| | 2.54 | % | | 150,000 |
| | 2.43 | % | | 50,000 |
| | 2.54 | % | | 50,000 |
| | 2.29 | % | | | | | | 50,000 |
| | 2.47 | % | | | | | | 25,000 |
| | 2.30 | % | | | | | Total $'s / Average Rate | $ | 600,000 |
| | 2.33 | % | | $ | 200,000 |
| | 2.54 | % |
The Amended 20102013 Credit Agreement requires us to maintain specified financial ratios, which if breached for any reason, including a decline in operating results due to economic or weather conditions, could result in an event of default under the agreement. The most critical of these ratios is the Consolidated Leverage Ratio, which is measured on a trailing-twelve-month quarterly basis. At the end of the thirdfirst quarter of 2012,2013, this ratio was set at 6.00x6.25x consolidated total debt (excluding the revolving debt)-to-consolidated EBITDA. The ratio will remain at that level through the end of the first quarter in 2014 and will decrease each second quarter beginning in the second quarter of 2014. Based on our trailing-twelve-month results ending September 30, 2012March 31, 2013, our Consolidated Leverage Ratio was 3.89x, providing $138.3148.2 million of EBITDA cushion on the ratio at the end of the thirdfirst quarter. We were in compliance with all other covenants under the Amended 20102013 Credit Agreement as of September 30, 2012March 31, 2013. The Amended 20102013 Credit Agreement allows restricted payments of up to $20$60 million annually so long as no default or event of default has occurred and is continuing. These restricted payments are not subject to any specific covenants. In 2012, additionalAdditional restricted payments are allowed to be made based on an excess-cash-flow formula, should our pro-forma Consolidated Leverage Ratio be less than or equal to 4.50x,5.0x, measured on a trailing-twelve-month quarterly basis. At March 31, 2013, the notes maturing in 2018 have more restrictive covenants than the 2021 notes. The terms of the indenture governing our 2018 notes permit us to make restricted payments of $20 million annually. Our ability to make additional restricted payments in 20122013 and beyond is permitted should our trailing-twelve-month Total-Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 4.75x, measured on a quarterly basis. In accordance with these debt provisions, on August 9, 2012,February 27, 2013, we announced the declaration of a distribution of $0.40$0.625 per limited partner unit, which was paid on September 15, 2012,March 25, 2013, and on November 6, 2012,May 8, 2013 we announced the declaration of a distribution of $0.40$0.625 per limited partner unit, payable DecemberJune 17, 2012, which will bring our total distributions paid in 2012 to $1.60 per limited partner unit.2013. Existing credit facilities and cash flows from operations are expected to be sufficient to meet working capital needs, debt service, partnership distributions and planned capital expenditures for the foreseeable future.
Off Balance Sheet Arrangements: We had $16.5$16.4 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of September 30, 2012March 31, 2013. We have no other significant off-balance sheet financing arrangements.
Forward Looking Statements Some of the statements contained in this report (including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section) that are not historical in nature are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements as to our expectations, beliefs and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond our control and could cause actual results to differ materially from those described in such statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct. Important factors, including those listed under Item 1A in the Company’s Annual Report on Form 10-K, could adversely affect our future financial performance and cause actual results to differ materially from our expectations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks from fluctuations in interest rates, and to a lesser extent on currency exchange rates on our operations in Canada and, from time to time, on imported rides and equipment. The objective of our financial risk management is to reduce the potential negative impact of interest rate and foreign currency exchange rate fluctuations to acceptable levels. We do not acquire market risk sensitive instruments for trading purposes. We manage interest rate risk through the use of a combination of fixed-rate long-term debt, interest rate swaps that fix a portion of our variable-rate long-term debt, and variable-rate borrowings under our revolving credit facility. Translation exposures with regard to our Canadian operations are not hedged. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the change in fair value of the derivative instrument is reported as a component of “Other comprehensive income (loss)” and reclassified into earnings in the period during which the hedged transaction affects earnings. Changes in fair value of derivative instruments that do not qualify as effective hedging activities are reported as “Net effect of swaps” in the consolidated statement of operations. Additionally, the “Other comprehensive income (loss)” related to interest rate swaps that become ineffective is amortized over the remaining life of the interest rate swap, and reported as a component of “Net effect of swaps” in the consolidated statement of operations. As of March 31, 2013, we had $901.3 million of fixed-rate senior unsecured notes and $630 million of variable-rate term debt. After considering the impact of interest rate swap agreements, approximately $1.2 billionvirtually all of our outstanding long-term debt represents fixed-rate debt and approximately $331.1 million represents variable-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $61$50 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt, after the fixed-rate swap agreements, would lead to an increasea decrease of approximately $2.5$0.5 million in annual cash interest costs. A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $5.4$4.4 million decrease in annual operating income.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures - The Partnership maintains a system of controls and procedures designed to ensure that information required to be disclosed by the Partnership in its reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission and that such information is accumulated and communicated to the Partnership’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of September 30, 2012March 31, 2013, the PartnershipPartnership's management has evaluated the effectiveness of the design and operation of itsthe Partnership's disclosure controls and procedures under supervision of management, includingand with the participation of the Partnership's Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Partnership's disclosure controls and procedures are effective.were effective as of March 31, 2013.
(b)Changes in Internal Control Over Financial Reporting - As disclosed in Amendment No. 2 to the Partnership's Form 10-K/A for the fiscal year ended December 31, 2012, in connection with restating the Partnership's consolidated financial statements therein, management identified a material weakness in internal control over financial reporting related to the Partnership's fixed assets, resulting in a conclusion that the Partnership's internal control over financial reporting was not effective as of December 31, 2012. Remediation of this material weakness in internal control over financial reporting was accomplished through the conversion of all composite assets to the unit method of depreciation as of January 1, 2013. The conversion to the unit method eliminates the concept of normal vs. unusual as any and all asset retirements with a remaining net book value will be reflected in the Consolidated Statements of Operations and Comprehensive Income. There were no other changes in the Partnership’s internal controlscontrol over financial reporting in connection with its 2012that occurred during the fiscal quarter ended thirdMarch 31, 2013-quarter evaluation, or subsequent to such evaluation, that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Jacob T. Falfas vs. Cedar Fair, L.P.
On July 23, 2010, Jacob T. (Jack) Falfas, the former Chief Operating Officer, filed a demand for private arbitration as provided by his employment agreement. In that demand, Mr. Falfas disputed the Partnership's position that he had resigned in June 2010, alleging instead that his employment with the Partnership was terminated without cause. That dispute went to private arbitration, and on February 28, 2011, an arbitration panel ruled 2-to-1 in favor of Mr. Falfas finding that he did not resign but was terminated without cause. Rather than fashioning a remedy consistent with the employment agreement, the panel ruled that Mr. Falfas should be reinstated. The Partnership believed that the arbitrators exceeded their authority by creating a remedy not legally available to Mr. Falfas under his contract with Cedar Fair. On March 21, 2011, the Partnership filed an action in Erie County Court of Common Pleas (Case No. 2011 CV 0217) seeking to have the award modified or vacated. On March 22, 2011, Mr. Falfas commenced a related action in the Erie County Court of Common Pleas (Case No. 2011 CV 0218) demanding enforcement of the arbitration ruling. The two actions were combined into Case No. 2011 CV 0217, before Judge Roger E. Binette. On February 22, 2012 the Erie County Common Pleas Court issued a ruling partially vacating the arbitration award and declaring that Mr. Falfas was not entitled to reinstatement of his employment. The ruling also provided that in accord with paragraph 2 of the arbitration award Mr. Falfas was entitled to certain back pay and other benefits under his 2007 Amended and Restated Employment Agreement as if the employment relationship had not been severed. In March of 2012 Mr. Falfas and the Company both filed appeals of the Court's ruling with the Ohio Sixth District Court of Appeals in Toledo, Ohio. The parties participated in mediation on May 7, 2012 at the direction ofOn April 19, 2013 the Court of Appeals.Appeals issued a ruling reversing the Erie County Common Pleas Court's order regarding the reinstatement of Mr. Falfas' employment and affirming the order regarding back pay and other benefits and remanding the case back to the Erie County Common Pleas Court for further proceedings. The mediation did not result inCompany has until June 3, 2013 to file a settlement. As a resultnotice of appeal with the matter will now proceed through the normal appeal process which typically takes six to nine months to complete. Briefs have been filed and the parties are awaiting scheduling of oral argument.Ohio Supreme Court. The Partnership believes the liability recorded as of September 30, 2012March 31, 2013 to be adequate and does not expect the arbitration ruling or the court order to materially affect its financial results in future periods.
ITEM 1A. RISK FACTORS There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.2012.
ITEM 5. OTHER INFORMATION
TheOn May 8, 2013, the Partnership usesannounced that it had identified a historical classification error in the Partnership's initial determination of whether a specific asset retired under the composite method of depreciation methodwas normal or unusual. The error resulted in the overstatement of Income before taxes of $8.8 million for the groupperiod ended December 31, 2011.
Under the composite method of depreciation, no gain or loss is recognized on normal retirements of composite assets. Instead the net book value after salvage of a retired asset reduces accumulated depreciation for the composite group. Abnormal or unusual retirements of composite assets acquiredwould result in the recognition of a gain or loss. The error resulted in the Partnership's application of its qualitative policy used to determine whether an asset retirement is normal or unusual. The asset retirement being restated was originally classified as normal, thus reducing accumulated depreciation. Management identified that the Partnership had failed to consider whether the specific asset had a whole in 1983,substantial net book value and/or if the retirement caused a deviation from the estimated composite depreciation survivor curve as well as for groupsother minor qualitative issues.
The restatement amount of assets$8.8 million is recorded in each subsequent business acquisition. Upon the normalLoss on impairment / retirement of an asset within a composite group, the Partnership's practice generally has been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of the Partnership's financial statements for the interim period ended July 1, 2012, management determined that this methodology was not appropriate. As a result, the Partnership revised the useful lives of its composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation). Management evaluated the amount and nature of these adjustments and concluded that they were not material to either the Partnership's prior annual or quarterly financial statements. Nonetheless, the historical financial statement amounts included in this filing have been corrected for this error. The Partnership expects to likewise correct previously presented historical financial statements to be included in future filings, including the annual financial statements to be includedfixed assets, net in the Partnership's Annual Report on Form 10-K for10-K/A filing to correct the year ending December 31, 2012.previous error.
ForAs disclosed in the year ended December 31, 2011Partnership's prior filings, the correctionPartnership had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation with the change effective January 1, 2013. The Partnership believes that pursuant to generally accepted accounting principles, changing from the composite method of depreciation to the unit method of depreciation is a change in accounting estimate that is effected by a change in accounting principle, which should be accounted for prospectively. The change to the unit method of depreciation eliminates the qualitative judgment needed to determine whether an asset retirement is normal or unusual, as the net book value of all retirements will decrease net income (loss) by $1.4 millionbe recorded in the Consolidated Statements of Operations and the provision (benefit) for taxes will decrease by $0.6 million. For the 2010 annual financial statements, the correction will decrease net income (loss) by $1.5 million and the provision (benefit) for taxes will decrease by $0.6 million. For the 2009 annual financial statements, the correction will decrease net income (loss) by $1.2 million and the provision (benefit) for taxes will decrease $0.4 million. The balance sheet as of December 31, 2011 has already been corrected in this Form 10-Q.Comprehensive Income.
ITEM 6. EXHIBITS | | | | Exhibit (4.1) | | Rights Agreement between Cedar Fair, L.P. and American Stock Transfer and Trust Co., LLC, dated April 5, 2010. Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on April 6, 2010.
| | | | Exhibit (4.2) | | Indenture, by and among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and The Bank of New York Mellon, as trustee, dated as of July 29, 2010 (including form of 9.125% Senior Notes due 2018). Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (4.3) | | Registration Rights Agreement, among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and J.P. Morgan Securities Inc., as representative of the initial purchasers named therein, dated July 29, 2010. Incorporated herein by reference to Exhibit 4.2 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (10.1) | | Cedar Fair, L.P. Amended and Restated Executive Severance Plan dated July 18, 2007. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-09444) filed on August 3, 2007. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) The Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) The Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notes |
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, Inc. | | | | General Partner | | | | | Date: | November 7, 2012May 10, 2013 | /s/ Matthew A. Ouimet | | | Matthew A. Ouimet | | | President and Chief Executive Officer | | | | | Date: | November 7, 2012May 10, 2013 | /s/ Brian C. Witherow | | | Brian C. Witherow | | | Executive Vice President and | | | Chief Financial Officer |
INDEX TO EXHIBITS | | | | Exhibit (4.1) | | Rights Agreement between Cedar Fair, L.P. and American Stock Transfer and Trust Co., LLC, dated April 5, 2010. Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on April 6, 2010.
| | | | Exhibit (4.2) | | Indenture, by and among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and The Bank of New York Mellon, as trustee, dated as of July 29, 2010 (including form of 9.125% Senior Notes due 2018). Incorporated herein by reference to Exhibit 4.1 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (4.3) | | Registration Rights Agreement, among Cedar Fair, L.P., Canada's Wonderland Company, and Magnum Management Corporation, as issuers, the guarantors named therein, and J.P. Morgan Securities Inc., as representative of the initial purchasers named therein, dated July 29, 2010. Incorporated herein by reference to Exhibit 4.2 to the Registrant's Form 8-K filed on July 29, 2010.
| | | | Exhibit (10.1) | | Cedar Fair, L.P. Amended and Restated Executive Severance Plan dated July 18, 2007. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-09444) filed on August 3, 2007. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012March 31, 2013 formatted in Extensible Business Reporting Language (XBRL): (i) The Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) The Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notes |
s / Average Rate | $ | 800,000 |
| | 2.48 | % | $ | 600,000 |
| | 2.33 | % | | $ | 200,000 |
| | 2.54 | % |