(
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the three-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012: | | (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) | | (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 | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | — |
| | $ | (2,866 | ) | | Interest Expense | | $ | — |
| | $ | (3,221 | ) | | Net effect of swaps | | $ | 3,268 |
| | $ | — |
| | $ | (5,483 | ) | | $ | 438 |
| | Interest Expense | | $ | — |
| | $ | (2,990 | ) | | Net effect of swaps | | $ | — |
| | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | | (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 | | Three months ended | | Three months ended | | | | 6/30/13 | | 7/1/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps (1) | | Net effect of swaps | | 992 |
| | — |
| | Net effect of swaps | | 609 |
| | — |
| | | $ | 992 |
| | $ | — |
| | $ | 609 |
| | $ | — |
| | | | | | | | | |
| | (1) | The May 2011 interest rate swaps were de-designated in March 2013. The Combination Swaps were de-designated in July 2013. |
During the quarter ended June 30,September 29, 2013, in addition to gains of $3.3 million and $1.00.6 million 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), $2.0 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 these amounts resulted in a benefitcharge to earnings of $2.31.4 million recorded in “Net effect of swaps.”
For the three-month period ended July 1,September 30, 2012, $0.2 million of expenseincome representing the amortization of amounts in AOCI was recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The effect of this amortization resulted in a benefit to earnings of $0.2 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the six-monthnine-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012: | | (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) | | (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 | | Six months ended | | Six months ended | | Six months ended | | Six months ended | | Six months ended | | Six months ended | | Nine months ended | | Nine months ended | | Nine months ended | | Nine months ended | | Nine months ended | | Nine months ended | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | 2,266 |
| | $ | (2,746 | ) | | Interest Expense | | $ | (2,797 | ) | | $ | (6,014 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | — |
| | $ | (3,217 | ) | | $ | (2,308 | ) | | Interest Expense | | $ | (2,797 | ) | | $ | (9,004 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | — |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | | (In thousands) | | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | Six months ended | | Six months ended | | Nine months ended | | Nine months ended | | | | 6/30/13 | | 7/1/12 | | | | 9/29/13 | | 9/30/12 | Cross-currency swaps (1) | | Net effect of swaps | | $ | — |
| | $ | (4,999 | ) | | Net effect of swaps | | $ | — |
| | $ | (4,999 | ) | Foreign currency swaps | | Net effect of swaps | | — |
| | 6,278 |
| | Net effect of swaps | | — |
| | 6,278 |
| Interest rate swaps (2) | | Net effect of swaps | | (479 | ) | | — |
| | Net effect of swaps | | 130 |
| | — |
| | | $ | (479 | ) | | $ | 1,279 |
| | $ | 130 |
| | $ | 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. The Combination Swaps were de-designated in July 2013. |
During the six-monthnine-month period ended June 30,September 29, 2013, in addition to the $3.7 million gain recognized in income on the ineffective portion of derivatives and $0.50.1 million lossgain on the derivatives not designated as cash flow hedges (as noted in the tables above), $7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $2.34.3 million of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the quarter.period. The effect of these amounts resulted in a charge to earnings of $6.98.3 million recorded in “Net effect of swaps.”
For the six-monthnine-month period ended July 1,September 30, 2012, in addition to the $1.3 million gain recognized in income on the ineffective portion of derivatives noted in the tables above, $0.40.2 million of expense representing the amortization of amounts in AOCI for the swaps and $0.2 million of foreign currency gain in the quarterperiod 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 $1.11.3 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 June 30,September 29, 2013 and July 1,September 30, 2012: | | (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) | | (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 | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | 5,152 |
| | $ | (18,396 | ) | | Interest Expense | | $ | (8,810 | ) | | $ | (9,037 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | 20,193 |
| | $ | (769 | ) | | $ | (873 | ) | | Interest Expense | | $ | (5,820 | ) | | $ | (12,027 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | 4,797 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | | (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 | | Twelve months ended | | Twelve months ended | | | | 6/30/13 | | 7/1/12 | | | | 9/29/13 | | 9/30/12 | Cross-currency swaps (1) | | Net effect of swaps | | — |
| | 9,139 |
| | Net effect of swaps | | — |
| | (4,483 | ) | Foreign currency swaps | | Net effect of swaps | | — |
| | (3,081 | ) | | Net effect of swaps | | — |
| | 10,129 |
| Interest rate swaps (2) | | Net effect of swaps | | $ | (479 | ) | | $ | — |
| | Net effect of swaps | | $ | 130 |
| | $ | — |
| | | $ | (479 | ) | | $ | 6,058 |
| | $ | 130 |
| | $ | 5,646 |
| | | | | | | | | |
| | (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. The Combination Swaps were de-designated in July 2013. |
In addition to the $3.7 million gain recognized in income on the ineffective portion of derivatives and $0.50.1 million lossgain recognized in income on the ineffective portion of derivatives not designated as cash flow hedges (as noted in the tables above), $7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $2.04.1 million of expense representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended June 30,September 29, 2013 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 $6.68.1 million recorded in “Net effect of swaps.” For the twelve monthtwelve-month period ending July 1,September 30, 2012, in addition to the $20.24.8 million gain recognized in income on the ineffective portion of derivatives designated as derivatives and $6.15.6 million of gain recognized in income on the ineffective portion of derivatives not designated as derivatives noted in the tables above, $11.30.1 million of expenseincome representing the amortization of amounts in AOCI for the swaps and a $0.30.4 million foreign currency lossgain in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended July 1,September 30, 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 $14.710.9 million recorded in “Net effect of swaps.” The amounts reclassified from AOCI into income for the periods noted above are primarily 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 June 30,September 29, 2013, December 31, 2012, and July 1,September 30, 2012 on a recurring basis: | | | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | June 30, 2013 | | | | | | | | | | September 29, 2013 | | | | | | | | | | (In thousands) | | | | | | | | | | | | | | | | | Interest rate swap agreements (1) | | $ | (20,122 | ) | | $ | — |
| | $ | (20,122 | ) | | $ | — |
| | $ | (5,483 | ) | | $ | — |
| | $ | (5,483 | ) | | $ | — |
| Interest rate swap agreements (2) | | (6,650 | ) | | — |
| | (6,650 | ) | | — |
| | (26,163 | ) | | — |
| | (26,163 | ) | | — |
| Net derivative liability | | $ | (26,772 | ) | | $ | — |
| | $ | (26,772 | ) | | $ | — |
| | $ | (31,646 | ) | | $ | — |
| | $ | (31,646 | ) | | $ | — |
| | | | | | | | | | | | | | | | | | December 31, 2012 | | | | | | | | | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | | | | | | | | | July 1, 2012 | | | | | | | | | | September 30, 2012 | | | | | | | | | | Interest rate swap agreements (1) | | $ | (35,146 | ) | | $ | — |
| | $ | (35,146 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| Net derivative liability | | $ | (35,146 | ) | | $ | — |
| | $ | (35,146 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
|
| | (1) | Designated as cash flow hedges and are included in “Derivative Liability” on the Unaudited Condensed Consolidated Balance Sheet |
| | (2) | Not designated as cash flow hedges and are included in "Derivative Liability" on the Unaudited Condensed Consolidated Balance Sheet |
Fair values of the interest rate swap agreements are determined using significant inputs, including the LIBOR 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 $0.70.9 million as of June 30,September 29, 2013. The carrying value of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximates fair value because of the short maturity of these instruments. There were no assets measured at fair value on a non-recurring basis at June 30,September 29, 2013 or July 1,September 30, 2012, 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. The fair value of term debt at June 30,September 29, 2013 was approximately $630.0627.6 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 June 30,September 29, 2013 was approximately $913.2922.0 million based on public trading levels as of that date. The fair value of the term debt was based on Level 2 inputs and the notes were based on Level 1 inputs.
(8) Earnings per Unit: Net income (loss) per limited partner unit is calculated based on the following unit amounts: | | | | Three months ended | | Six months ended | Twelve months ended | | Three months ended | | Nine months ended | Twelve months ended | | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | 6/30/2013 | | 7/1/2012 | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | 9/29/2013 | | 9/30/2012 | | | (In thousands except per unit amounts) | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,484 |
| | 55,481 |
| | 55,464 |
| | 55,433 |
| 55,446 |
| | 55,389 |
| | 55,485 |
| | 55,611 |
| | 55,472 |
| | 55,473 |
| 55,460 |
| | 55,440 |
| Effect of dilutive units: | | | | | | | | | | | | | | | | | | | | | Unit options and restricted unit awards | | 152 |
| | 2 |
| | — |
| | — |
| 84 |
| | 3 |
| | 189 |
| | 45 |
| | 146 |
| | 42 |
| 120 |
| | 31 |
| Phantom units | | 186 |
| | 335 |
| | — |
| | — |
| 261 |
| | 452 |
| | 189 |
| | 336 |
| | 185 |
| | 333 |
| 224 |
| | 416 |
| Diluted weighted average units outstanding | | 55,822 |
| | 55,818 |
| | 55,464 |
| | 55,433 |
| 55,791 |
| | 55,844 |
| | 55,863 |
| | 55,992 |
| | 55,803 |
| | 55,848 |
| 55,804 |
| | 55,887 |
| Net income (loss) per unit - basic | | $ | 0.85 |
| | $ | 0.66 |
| | $ | (1.11 | ) | | $ | (0.52 | ) | $ | 1.24 |
| | $ | 2.11 |
| | Net income (loss) per unit - diluted | | $ | 0.85 |
| | $ | 0.66 |
| | $ | (1.11 | ) | | $ | (0.52 | ) | $ | 1.24 |
| | $ | 2.10 |
| | Net income per unit - basic | | | $ | 3.43 |
| | $ | 2.54 |
| | $ | 2.32 |
| | $ | 2.02 |
| $ | 2.13 |
| | $ | 1.91 |
| Net income per unit - diluted | | | $ | 3.41 |
| | $ | 2.52 |
| | $ | 2.31 |
| | $ | 2.01 |
| $ | 2.12 |
| | $ | 1.89 |
| | | | | | | | | | | | | | | | | | | | | | | |
The effect of unit options on the three, sixnine and twelve months ended June 30,September 29, 2013, had they not been out of the money or antidilutive, would have been zero, 8,9007,000, and 8,5004,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three, sixnine and twelve months ended July 1,September 30, 2012, had they not been out of the money or antidilutive, would have been 66,000, 31,00034,000 and 41,50036,000 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. 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. As of the secondthird quarter of 2013 the Partnership has recorded $1.1 million of 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) Restatement:
We haveThe Partnership has made the following correction relating to ourits use of the composite depreciation method.
This correction, which impacts the Balance Sheet at July 1,September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three, six,three-, nine-, and twelve monthtwelve-month periods ended July 1,September 30, 2012, reflects a subsequent determination that a disposition from ourthe Partnership's 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 reviewed in connection with respondinga response to an SEC comment letter. WeThe Partnership ultimately concluded that such disposition was unusual and that an $8.8 million charge should be reflected in the 2011 financial statements.
The tables below reflect the impact on the financial statements of the correction as described above.
| | Balance Sheet | | | (In thousands) | 7/1/2012 | 9/30/2012 | Accumulated depreciation | | | As filed | $ | (1,111,530 | ) | $ | (1,175,744 | ) | Correction | (8,369 | ) | (7,845 | ) | As restated | $ | (1,119,899 | ) | $ | (1,183,589 | ) | Total assets | | | As filed | $ | 2,141,898 |
| $ | 2,089,837 |
| Correction | (8,369 | ) | (7,845 | ) | As restated | $ | 2,133,529 |
| $ | 2,081,992 |
| Deferred Tax Liability | | | As filed | $ | 137,288 |
| $ | 143,094 |
| Correction | (3,180 | ) | (2,981 | ) | As restated | $ | 134,108 |
| $ | 140,113 |
| Limited Partners' Equity | | | As filed | $ | 93,946 |
| $ | 212,797 |
| Correction | (5,189 | ) | (4,864 | ) | As restated | $ | 88,757 |
| $ | 207,933 |
|
| | Statements of Operations and Other Comprehensive Income | (In thousands except per unit amounts) | | Three months ended | | Six months ended | | Twelve months ended | | Three months ended | | Nine months ended | | Twelve months ended | | | 7/1/2012 | | 7/1/2012 | | 7/1/2012 | | 9/30/2012 | | 9/30/2012 | | 9/30/2012 | Depreciation and amortization | | | | | | | | | | | | | As filed | | $ | 48,330 |
| | $ | 52,409 |
| | $ | 130,837 |
| | $ | 60,747 |
| | $ | 113,156 |
| | $ | 128,136 |
| Correction | | (421 | ) | | (421 | ) | | (421 | ) | | (524 | ) | | (945 | ) | | (945 | ) | As restated | | $ | 47,909 |
| | $ | 51,988 |
| | $ | 130,416 |
| | $ | 60,223 |
| | $ | 112,211 |
| | $ | 127,191 |
| Loss (gain) on impairment / retirement of fixed assets, net | | | | | | | | | | | | | As filed | | $ | (862 | ) | | $ | (770 | ) | | $ | 1,599 |
| | $ | 25,000 |
| | $ | 24,230 |
| | $ | 25,719 |
| Correction | | — |
| | — |
| | 8,790 |
| | — |
| | — |
| | 8,790 |
| As restated | | $ | (862 | ) | | $ | (770 | ) | | $ | 10,389 |
| | $ | 25,000 |
| | $ | 24,230 |
| | $ | 34,509 |
| Income (loss) before tax | | | | | | | | | | | | | As filed | | $ | 47,543 |
| | $ | (39,411 | ) | | $ | 139,267 |
| | $ | 192,401 |
| | $ | 152,990 |
| | $ | 141,606 |
| Correction | | 421 |
| | 421 |
| | (8,369 | ) | | 524 |
| | 945 |
| | (7,845 | ) | As restated | | $ | 47,964 |
| | $ | (38,990 | ) | | $ | 130,898 |
| | $ | 192,925 |
| | $ | 153,935 |
| | $ | 133,761 |
| Provision (benefit) for taxes | Provision (benefit) for taxes | | | | | | Provision (benefit) for taxes | | | | | | As filed | | $ | 11,221 |
| | $ | (10,318 | ) | | $ | 16,970 |
| | $ | 51,713 |
| | $ | 41,395 |
| | $ | 30,839 |
| Correction | | 160 |
| | 160 |
| | (3,180 | ) | | 199 |
| | 359 |
| | (2,981 | ) | As restated | | $ | 11,381 |
| | $ | (10,158 | ) | | $ | 13,790 |
| | $ | 51,912 |
| | $ | 41,754 |
| | $ | 27,858 |
| Net income (loss) | Net income (loss) | | | | | | Net income (loss) | | | | | | As filed | | $ | 36,322 |
| | $ | (29,093 | ) | | $ | 122,297 |
| | $ | 140,688 |
| | $ | 111,595 |
| | $ | 110,767 |
| Correction | | 261 |
| | 261 |
| | (5,189 | ) | | 325 |
| | 586 |
| | (4,864 | ) | As restated | | $ | 36,583 |
| | $ | (28,832 | ) | | $ | 117,108 |
| | $ | 141,013 |
| | $ | 112,181 |
| | $ | 105,903 |
| | | | | | | | | | | | | | Basic earnings per limited partner unit: | Basic earnings per limited partner unit: | | | | | | Basic earnings per limited partner unit: | | | | | | As filed | | $ | 0.65 |
| | $ | (0.52 | ) | | $ | 2.21 |
| | $ | 2.53 |
| | $ | 2.01 |
| | $ | 2.00 |
| Correction | | 0.01 |
| | — |
| | (0.10 | ) | | 0.01 |
| | 0.01 |
| | (0.09 | ) | As restated | | $ | 0.66 |
| | $ | (0.52 | ) | | $ | 2.11 |
| | $ | 2.54 |
| | $ | 2.02 |
| | $ | 1.91 |
| | | | | | | | | | | | | | Diluted earnings per limited partner unit: | Diluted earnings per limited partner unit: | | | | | | Diluted earnings per limited partner unit: | | | | | | As filed | | $ | 0.65 |
| | $ | (0.52 | ) | | $ | 2.19 |
| | $ | 2.51 |
| | $ | 2.00 |
| | $ | 1.98 |
| Correction | | 0.01 |
| | — |
| | (0.09 | ) | | 0.01 |
| | 0.01 |
| | (0.09 | ) | As restated | | $ | 0.66 |
| | $ | (0.52 | ) | | $ | 2.10 |
| | $ | 2.52 |
| | $ | 2.01 |
| | $ | 1.89 |
|
(12) Changes in Accumulated Other Comprehensive Income (Loss) by Component:
The following tables reflect the changes in Accumulated other comprehensive income (loss)Other Comprehensive Income (Loss) related to limited partners' equity for the periodthree-, nine-, and twelve-month periods ended June 30,September 29, 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 |
| | 1,893 |
| | 3,833 |
| | | | | | | | | | Amounts reclassified | | | | | | | | from accumulated | | | | | | | | other comprehensive | | | | | | | | income (2) | | 8,624 |
| | — |
| | 8,624 |
| | | | | | | | | Net current-period other | | | | | | | comprehensive income | | 10,564 |
| | 1,893 |
| | 12,457 |
| | | | | | | | | June 30, 2013 | | $ | (15,185 | ) | | $ | (858 | ) | | $ | (16,043 | ) |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at June 30, 2013 | | $ | (15,185 | ) | | $ | (858 | ) | | $ | (16,043 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (4,440 | ) | | (699 | ) | | (5,139 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 1,679 |
| | — |
| | 1,679 |
| | | | | | | | | Net current-period other comprehensive income | | (2,761 | ) | | (699 | ) | | (3,460 | ) | | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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 | | $ | 10,160 |
| | | Net effect of swaps | | | | $ | 10,160 |
| | | Total before tax | | | | (1,536 | ) | | | Provision (benefit) for taxes | | | | $ | 8,624 |
| | | Net of tax |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at December 31, 2012 | | $ | (25,749 | ) | | $ | (2,751 | ) | | $ | (28,500 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (2,500 | ) | | 1,194 |
| | (1,306 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 10,303 |
| | — |
| | 10,303 |
| | | | | | | | | Net current-period other comprehensive income | | 7,803 |
| | 1,194 |
| | 8,997 |
| | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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.
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at September 30, 2012 | | $ | (27,686 | ) | | $ | (4,371 | ) | | $ | (32,057 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (416 | ) | | 2,814 |
| | 2,398 |
| | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 10,156 |
| | — |
| | 10,156 |
| | | | | | | | | Net current-period other comprehensive income | | 9,740 |
| | 2,814 |
| | 12,554 |
| | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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 | | 3 months ended 9/29/13 | | 9 months ended 9/29/13 | | 12 months ended 9/29/13 | | | | Interest rate contracts | | $ | 1,986 |
| | $ | 12,146 |
| | $ | 11,972 |
| | Net effect of swaps | | | | $ | 1,986 |
| | $ | 12,146 |
| | $ | 11,972 |
| | Total before tax | | | | (307 | ) | | (1,843 | ) | | (1,816 | ) | | Provision (benefit) for taxes | | | | $ | 1,679 |
| | $ | 10,303 |
| | $ | 10,156 |
| | 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 June 30,September 29, 2013, December 31, 2012, and July 1,September 30, 2012 and for the three, sixnine and twelve month periods ended June 30,September 29, 2013 and July 1,September 30, 2012. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, we havethe Partnership has 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 2013 Credit Agreement, all outstanding debt has been equally reflected within each co-issuer's June 30,September 29, 2013, December 31, 2012 and July 1,September 30, 2012 balance sheets in the accompanying condensed consolidating financial statements.
The consolidating financial information has been corrected for the information described in Note 11.
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 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 | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| Receivables | | 2,960 |
| | 89,760 |
| | 86,590 |
| | 517,925 |
| | (630,036 | ) | | 67,199 |
| Inventories | | — |
| | 4,639 |
| | 4,182 |
| | 36,631 |
| | — |
| | 45,452 |
| Current deferred tax asset | | — |
| | 23,822 |
| | 816 |
| | 3,664 |
| | — |
| | 28,302 |
| Prepaid advertising | | — |
| | 9,181 |
| | 1,579 |
| | 5,854 |
| | — |
| | 16,614 |
| Other current assets | | 620 |
| | 2,259 |
| | 487 |
| | 13,908 |
| | — |
| | 17,274 |
| | | 3,580 |
| | 129,661 |
| | 115,399 |
| | 605,886 |
| | (636,057 | ) | | 218,469 |
| Property and Equipment (net) | | 463,783 |
| | 994 |
| | 250,249 |
| | 835,875 |
| | — |
| | 1,550,901 |
| Investment in Park | | 447,080 |
| | 735,017 |
| | 129,942 |
| | 38,992 |
| | (1,351,031 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 119,201 |
| | 111,218 |
| | — |
| | 239,480 |
| Other Intangibles, net | | — |
| | — |
| | 16,880 |
| | 22,839 |
| | — |
| | 39,719 |
| Deferred Tax Asset | | — |
| | 34,028 |
| | — |
| | 90 |
| | (34,118 | ) | | — |
| Intercompany Receivable | | 874,125 |
| | 1,123,159 |
| | 1,165,828 |
| | — |
| | (3,163,112 | ) | | — |
| Other Assets | | 13,605 |
| | 9,382 |
| | 7,112 |
| | 2,227 |
| | — |
| | 32,326 |
| | | $ | 1,811,234 |
| | $ | 2,032,241 |
| | $ | 1,804,611 |
| | $ | 1,617,127 |
| | $ | (5,184,318 | ) | | $ | 2,080,895 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 155,522 |
| | 208,924 |
| | 7,971 |
| | 285,379 |
| | (623,457 | ) | | 34,339 |
| Deferred revenue | | — |
| | — |
| | 18,719 |
| | 113,646 |
| | — |
| | 132,365 |
| Accrued interest | | 5,189 |
| | 3,563 |
| | 15,192 |
| | — |
| | — |
| | 23,944 |
| Accrued taxes | | 6,534 |
| | 458 |
| | 181 |
| | 2,848 |
| | — |
| | 10,021 |
| Accrued salaries, wages and benefits | | 1 |
| | 18,642 |
| | 2,153 |
| | 9,100 |
| | — |
| | 29,896 |
| Self-insurance reserves | | — |
| | 5,535 |
| | 1,727 |
| | 17,330 |
| | — |
| | 24,592 |
| Other accrued liabilities | | 860 |
| | 4,421 |
| | 715 |
| | 2,793 |
| | — |
| | 8,789 |
| | | 174,406 |
| | 247,843 |
| | 52,958 |
| | 431,096 |
| | (636,057 | ) | | 270,246 |
| Deferred Tax Liability | | — |
| | — |
| | 61,544 |
| | 126,866 |
| | (34,118 | ) | | 154,292 |
| Derivative Liability | | 16,039 |
| | 10,733 |
| | — |
| | — |
| | — |
| | 26,772 |
| Other Liabilities | | — |
| | 5,296 |
| | — |
| | 3,500 |
| | — |
| | 8,796 |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 58,000 |
| | 58,000 |
| | 58,000 |
| | — |
| | (116,000 | ) | | 58,000 |
| Term debt | | 622,125 |
| | 622,125 |
| | 622,125 |
| | — |
| | (1,244,250 | ) | | 622,125 |
| Notes | | 901,431 |
| | 901,431 |
| | 901,431 |
| | — |
| | (1,802,862 | ) | | 901,431 |
| | | 1,581,556 |
| | 1,581,556 |
| | 1,581,556 |
| | — |
| | (3,163,112 | ) | | 1,581,556 |
| | | | | | | | | | | | | | Equity | | 39,233 |
| | 186,813 |
| | 108,553 |
| | 1,055,665 |
| | (1,351,031 | ) | | 39,233 |
| | | $ | 1,811,234 |
| | $ | 2,032,241 |
| | $ | 1,804,611 |
| | $ | 1,617,127 |
| | $ | (5,184,318 | ) | | $ | 2,080,895 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET September 29, 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 | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| Receivables | | 12 |
| | 124,478 |
| | 70,303 |
| | 589,797 |
| | (742,056 | ) | | 42,534 |
| Inventories | | — |
| | 1,578 |
| | 2,090 |
| | 25,648 |
| | — |
| | 29,316 |
| Current deferred tax asset | | — |
| | 3,708 |
| | 816 |
| | 3,661 |
| | — |
| | 8,185 |
| Income tax refundable | | — |
| | — |
| | 662 |
| | — |
| | — |
| | 662 |
| Other current assets | | 995 |
| | 3,558 |
| | 613 |
| | 3,798 |
| | — |
| | 8,964 |
| | | 134,007 |
| | 135,615 |
| | 110,671 |
| | 634,906 |
| | (742,056 | ) | | 273,143 |
| Property and Equipment (net) | | 450,205 |
| | 985 |
| | 248,484 |
| | 815,000 |
| | — |
| | 1,514,674 |
| Investment in Park | | 548,241 |
| | 824,356 |
| | 143,548 |
| | 81,719 |
| | (1,597,864 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 121,657 |
| | 111,218 |
| | — |
| | 241,936 |
| Other Intangibles, net | | — |
| | — |
| | 17,228 |
| | 22,797 |
| | — |
| | 40,025 |
| Deferred Tax Asset | | — |
| | 30,316 |
| | — |
| | 90 |
| | (30,406 | ) | | — |
| Intercompany Receivable | | 877,010 |
| | 1,069,069 |
| | 1,113,983 |
| | — |
| | (3,060,062 | ) | | — |
| Other Assets | | 13,196 |
| | 9,031 |
| | 6,902 |
| | 2,140 |
| | — |
| | 31,269 |
| | | $ | 2,031,720 |
| | $ | 2,069,372 |
| | $ | 1,762,473 |
| | $ | 1,667,870 |
| | $ | (5,430,388 | ) | | $ | 2,101,047 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 281,983 |
| | 159,781 |
| | 7,802 |
| | 314,367 |
| | (742,056 | ) | | 21,877 |
| Deferred revenue | | — |
| | — |
| | 1,951 |
| | 35,676 |
| | — |
| | 37,627 |
| Accrued interest | | 2,677 |
| | 1,593 |
| | 5,983 |
| | — |
| | — |
| | 10,253 |
| Accrued taxes | | 5,413 |
| | 29,386 |
| | — |
| | 4,594 |
| | — |
| | 39,393 |
| Accrued salaries, wages and benefits | | 1 |
| | 27,622 |
| | 2,154 |
| | 9,844 |
| | — |
| | 39,621 |
| Self-insurance reserves | | — |
| | 5,545 |
| | 1,896 |
| | 16,647 |
| | — |
| | 24,088 |
| Other accrued liabilities | | 991 |
| | 4,077 |
| | 694 |
| | 1,856 |
| | — |
| | 7,618 |
| | | 297,365 |
| | 234,304 |
| | 26,780 |
| | 382,984 |
| | (754,656 | ) | | 186,777 |
| Deferred Tax Liability | | — |
| | — |
| | 61,143 |
| | 126,866 |
| | (30,406 | ) | | 157,603 |
| Derivative Liability | | 18,407 |
| | 13,239 |
| | — |
| | — |
| | — |
| | 31,646 |
| Other Liabilities | | — |
| | 5,573 |
| | — |
| | 3,500 |
| | — |
| | 9,073 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 622,125 |
| | 622,125 |
| | 622,125 |
| | — |
| | (1,244,250 | ) | | 622,125 |
| Notes | | 901,606 |
| | 901,606 |
| | 901,606 |
| | — |
| | (1,803,212 | ) | | 901,606 |
| | | 1,523,731 |
| | 1,523,731 |
| | 1,523,731 |
| | — |
| | (3,047,462 | ) | | 1,523,731 |
| | | | | | | | | | | | | | Equity | | 192,217 |
| | 292,525 |
| | 150,819 |
| | 1,154,520 |
| | (1,597,864 | ) | | 192,217 |
| | | $ | 2,031,720 |
| | $ | 2,069,372 |
| | $ | 1,762,473 |
| | $ | 1,667,870 |
| | $ | (5,430,388 | ) | | $ | 2,101,047 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET December 31, 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 | | $ | 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 BALANCE SHEET
July 1, 2012 (As restated)
(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 | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
| Receivables | | — |
| | 71,210 |
| | 64,931 |
| | 436,324 |
| | (529,512 | ) | | 42,953 |
| Inventories | | — |
| | 4,861 |
| | 4,663 |
| | 41,712 |
| | — |
| | 51,236 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Prepaid advertising | | — |
| | 10,181 |
| | 596 |
| | 5,473 |
| | — |
| | 16,250 |
| Income tax refundable | | — |
| | — |
| | 10,083 |
| | — |
| | — |
| | 10,083 |
| Other current assets | | 800 |
| | 2,971 |
| | 908 |
| | 4,660 |
| | — |
| | 9,339 |
| | | 800 |
| | 95,462 |
| | 95,927 |
| | 518,979 |
| | (535,033 | ) | | 176,135 |
| Property and Equipment (net) | | 465,146 |
| | 1,025 |
| | 272,511 |
| | 882,682 |
| | — |
| | 1,621,364 |
| Investment in Park | | 471,253 |
| | 701,181 |
| | 114,053 |
| | 21,834 |
| | (1,308,321 | ) | | — |
| Intercompany Note Receivable | | — |
| | 86,362 |
| | — |
| | — |
| | (86,362 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 122,960 |
| | 111,218 |
| | — |
| | 243,239 |
| Other Intangibles, net | | — |
| | — |
| | 17,412 |
| | 22,837 |
| | — |
| | 40,249 |
| Deferred Tax Asset | | — |
| | 43,471 |
| | — |
| | — |
| | (43,471 | ) | | — |
| Intercompany Receivable | | 880,971 |
| | 1,186,016 |
| | 1,236,507 |
| | — |
| | (3,303,494 | ) | | — |
| Other Assets | | 24,678 |
| | 16,454 |
| | 9,010 |
| | 2,400 |
| | — |
| | 52,542 |
| | | $ | 1,851,909 |
| | $ | 2,129,971 |
| | $ | 1,868,380 |
| | $ | 1,559,950 |
| | $ | (5,276,681 | ) | | $ | 2,133,529 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 108,234 |
| | $ | 233,508 |
| | $ | 14,320 |
| | $ | 217,263 |
| | $ | (535,033 | ) | | $ | 38,292 |
| Deferred revenue | | — |
| | — |
| | 19,946 |
| | 88,521 |
| | — |
| | 108,467 |
| Accrued interest | | 481 |
| | 195 |
| | 15,353 |
| | — |
| | — |
| | 16,029 |
| Accrued taxes | | 7,083 |
| | 571 |
| | 59 |
| | 3,027 |
| | — |
| | 10,740 |
| Accrued salaries, wages and benefits | | 1 |
| | 26,108 |
| | 2,410 |
| | 9,190 |
| | — |
| | 37,709 |
| Self-insurance reserves | | — |
| | 4,280 |
| | 1,771 |
| | 17,147 |
| | — |
| | 23,198 |
| Other accrued liabilities | | 953 |
| | 4,489 |
| | 935 |
| | 2,275 |
| | — |
| | 8,652 |
| | | 116,752 |
| | 269,151 |
| | 54,794 |
| | 337,423 |
| | (535,033 | ) | | 243,087 |
| Deferred Tax Liability | | — |
| | — |
| | 58,162 |
| | 119,417 |
| | (43,471 | ) | | 134,108 |
| Derivative Liability | | 21,090 |
| | 14,056 |
| | — |
| | — |
| | — |
| | 35,146 |
| Other Liabilities | | — |
| | 3,621 |
| | — |
| | 3,500 |
| | — |
| | 7,121 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 86,362 |
| | (86,362 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 111,000 |
| | 111,000 |
| | 111,000 |
| | — |
| | (222,000 | ) | | 111,000 |
| Term debt | | 1,140,100 |
| | 1,140,100 |
| | 1,140,100 |
| | — |
| | (2,280,200 | ) | | 1,140,100 |
| Notes | | 400,647 |
| | 400,647 |
| | 400,647 |
| | — |
| | (801,294 | ) | | 400,647 |
| | | 1,651,747 |
| | 1,651,747 |
| | 1,651,747 |
| | — |
| | (3,303,494 | ) | | 1,651,747 |
| | | | | | | | | | | | | | Equity | | 62,320 |
| | 191,396 |
| | 103,677 |
| | 1,013,248 |
| | (1,308,321 | ) | | 62,320 |
| | | $ | 1,851,909 |
| | $ | 2,129,971 |
| | $ | 1,868,380 |
| | $ | 1,559,950 |
| | $ | (5,276,681 | ) | | $ | 2,133,529 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)BALANCE SHEET For the Three Months Ended September 30, 2012June 30, 2013 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 43,925 |
| | $ | 85,358 |
| | $ | 34,954 |
| | $ | 326,473 |
| | $ | (129,090 | ) | | $ | 361,620 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 2,994 |
| | 28,059 |
| | — |
| | 31,053 |
| Operating expenses | | 1,408 |
| | 52,246 |
| | 15,586 |
| | 201,134 |
| | (129,090 | ) | | 141,284 |
| Selling, general and administrative | | 1,222 |
| | 26,888 |
| | 3,868 |
| | 13,789 |
| | — |
| | 45,767 |
| Depreciation and amortization | | 12,891 |
| | 9 |
| | 6,818 |
| | 26,314 |
| | — |
| | 46,032 |
| Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | — |
| | 29 |
| | — |
| | 29 |
| | | 15,521 |
| | 79,143 |
| | 29,266 |
| | 269,325 |
| | (129,090 | ) | | 264,165 |
| Operating income | | 28,404 |
| | 6,215 |
| | 5,688 |
| | 57,148 |
| | — |
| | 97,455 |
| Interest expense (income), net | | 10,210 |
| | 7,246 |
| | 9,843 |
| | (1,507 | ) | | — |
| | 25,792 |
| Net effect of swaps | | (1,378 | ) | | (895 | ) | | — |
| | — |
| | — |
| | (2,273 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,886 |
| | — |
| | — |
| | 14,886 |
| Other (income) expense | | 187 |
| | (2,128 | ) | | 583 |
| | 1,358 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | (30,875 | ) | | (15,540 | ) | | (8,232 | ) | | 4,649 |
| | 49,998 |
| | — |
| Net income (loss) before taxes | | 50,260 |
| | 17,532 |
| | (11,392 | ) | | 52,648 |
| | (49,998 | ) | | 59,050 |
| Provision (benefit) for taxes | | 2,870 |
| | 684 |
| | (6,732 | ) | | 14,838 |
| | — |
| | 11,660 |
| Net income (loss) | | $ | 47,390 |
| | $ | 16,848 |
| | $ | (4,660 | ) | | $ | 37,810 |
| | $ | (49,998 | ) | | $ | 47,390 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,592 |
| | — |
| | 1,592 |
| | — |
| | (1,592 | ) | | 1,592 |
| Unrealized income on cash flow hedging derivatives | | 1,679 |
| | 503 |
| | — |
| | — |
| | (503 | ) | | 1,679 |
| Other comprehensive income, (net of tax) | | 3,271 |
| | 503 |
| | 1,592 |
| | — |
| | (2,095 | ) | | 3,271 |
| Total Comprehensive (Income) loss | | $ | 50,661 |
| | $ | 17,351 |
| | $ | (3,068 | ) | | $ | 37,810 |
| | $ | (52,093 | ) | | $ | 50,661 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 856,276 |
| | — |
| | 1,555,999 |
| Investment in Park | | 572,748 |
| | 786,753 |
| | 115,271 |
| | 60,141 |
| | (1,534,913 | ) | | — |
| 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 |
| | | $ | 1,952,057 |
| | $ | 2,032,761 |
| | $ | 1,778,266 |
| | $ | 1,578,075 |
| | $ | (5,259,167 | ) | | $ | 2,081,992 |
| 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 |
| | 119,971 |
| | (39,320 | ) | | 140,113 |
| 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 | | 181,167 |
| | 291,041 |
| | 140,674 |
| | 1,103,198 |
| | (1,534,913 | ) | | 181,167 |
| | | $ | 1,952,057 |
| | $ | 2,032,761 |
| | $ | 1,778,266 |
| | $ | 1,578,075 |
| | $ | (5,259,167 | ) | | $ | 2,081,992 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Three Months Ended July 1,September 29, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 83,285 |
| | $ | 161,866 |
| | $ | 82,265 |
| | $ | 509,467 |
| | $ | (244,807 | ) | | $ | 592,076 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,082 |
| | 39,761 |
| | — |
| | 45,843 |
| Operating expenses | | 1,669 |
| | 76,468 |
| | 19,042 |
| | 318,022 |
| | (244,807 | ) | | 170,394 |
| Selling, general and administrative | | 1,796 |
| | 38,083 |
| | 4,781 |
| | 14,067 |
| | — |
| | 58,727 |
| Depreciation and amortization | | 18,306 |
| | 10 |
| | 8,979 |
| | 30,200 |
| | — |
| | 57,495 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | Loss on impairment / retirement of fixed assets, net | | 368 |
| | — |
| | 1 |
| | 1,268 |
| | — |
| | 1,637 |
| | | 22,139 |
| | 114,561 |
| | 38,885 |
| | 394,575 |
| | (244,807 | ) | | 325,353 |
| Operating income | | 61,146 |
| | 47,305 |
| | 43,380 |
| | 114,892 |
| | — |
| | 266,723 |
| Interest expense (income), net | | 10,858 |
| | 6,901 |
| | 9,731 |
| | (1,978 | ) | | — |
| | 25,512 |
| Net effect of swaps | | 810 |
| | 567 |
| | — |
| | — |
| | — |
| | 1,377 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | (8,615 | ) | | — |
| | — |
| | (8,615 | ) | Other (income) expense | | 188 |
| | (2,129 | ) | | 584 |
| | 1,357 |
| | — |
| | — |
| Income from investment in affiliates | | (146,054 | ) | | (78,714 | ) | | (13,606 | ) | | (40,904 | ) | | 279,278 |
| | — |
| Net income before taxes | | 195,344 |
| | 120,680 |
| | 55,286 |
| | 156,417 |
| | (279,278 | ) | | 248,449 |
| Provision for taxes | | 4,920 |
| | 14,537 |
| | 14,390 |
| | 24,178 |
| | — |
| | 58,025 |
| Net income | | $ | 190,424 |
| | $ | 106,143 |
| | $ | 40,896 |
| | $ | 132,239 |
| | $ | (279,278 | ) | | $ | 190,424 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (699 | ) | | — |
| | (699 | ) | | — |
| | 699 |
| | (699 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (2,761 | ) | | (1,202 | ) | | — |
| | — |
| | 1,202 |
| | (2,761 | ) | Other comprehensive income (loss), (net of tax) | | (3,460 | ) | | (1,202 | ) | | (699 | ) | | — |
| | 1,901 |
| | (3,460 | ) | Total Comprehensive Income | | $ | 186,964 |
| | $ | 104,941 |
| | $ | 40,197 |
| | $ | 132,239 |
| | $ | (277,377 | ) | | $ | 186,964 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 2012 (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 | | $ | 43,745 |
| | $ | 77,510 |
| | $ | 41,841 |
| | $ | 315,637 |
| | $ | (121,127 | ) | | $ | 357,606 |
| | $ | 79,663 |
| | $ | 141,134 |
| | $ | 88,334 |
| | $ | 464,902 |
| | $ | (220,588 | ) | | $ | 553,445 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 3,541 |
| | 28,945 |
| | — |
| | 32,486 |
| | — |
| | — |
| | 6,447 |
| | 40,906 |
| | — |
| | 47,353 |
| Operating expenses | | 1,438 |
| | 52,584 |
| | 15,935 |
| | 197,406 |
| | (121,127 | ) | | 146,236 |
| | 1,368 |
| | 74,191 |
| | 18,736 |
| | 289,604 |
| | (220,588 | ) | | 163,311 |
| Selling, general and administrative | | 1,656 |
| | 24,525 |
| | 4,295 |
| | 14,035 |
| | — |
| | 44,511 |
| | 1,853 |
| | 32,627 |
| | 4,822 |
| | 13,691 |
| | — |
| | 52,993 |
| Depreciation and amortization | | 13,531 |
| | 9 |
| | 6,985 |
| | 27,384 |
| | — |
| | 47,909 |
| | 19,209 |
| | 10 |
| | 9,430 |
| | 31,574 |
| | — |
| | 60,223 |
| Loss (gain) on impairment / retirement of fixed assets, net | | (861 | ) | | — |
| | (1 | ) | | — |
| | — |
| | (862 | ) | | Loss on impairment / retirement of fixed assets, net | | | 25,000 |
| | — |
| | — |
| | — |
| | — |
| | 25,000 |
| | | 15,764 |
| | 77,118 |
| | 30,755 |
| | 267,770 |
| | (121,127 | ) | | 270,280 |
| | 47,430 |
| | 106,828 |
| | 39,435 |
| | 375,775 |
| | (220,588 | ) | | 348,880 |
| Operating income | | 27,981 |
| | 392 |
| | 11,086 |
| | 47,867 |
| | — |
| | 87,326 |
| | 32,233 |
| | 34,306 |
| | 48,899 |
| | 89,127 |
| | — |
| | 204,565 |
| Interest expense, net | | 13,067 |
| | 8,084 |
| | 10,598 |
| | (1,515 | ) | | — |
| | 30,234 |
| | 12,213 |
| | 7,258 |
| | 9,897 |
| | (2,518 | ) | | — |
| | 26,850 |
| Net effect of swaps | | (104 | ) | | (69 | ) | | — |
| | — |
| | — |
| | (173 | ) | | (104 | ) | | (71 | ) | | — |
| | — |
| | — |
| | (175 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | 9,301 |
| | — |
| | — |
| | 9,301 |
| | — |
| | — |
| | (15,035 | ) | | — |
| | — |
| | (15,035 | ) | Other (income) expense | | 188 |
| | (2,041 | ) | | 512 |
| | 1,341 |
| | — |
| | — |
| | 186 |
| | (2,043 | ) | | 512 |
| | 1,345 |
| | — |
| | — |
| Income from investment in affiliates | | (24,476 | ) | | (16,973 | ) | | (6,955 | ) | | (260 | ) | | 48,664 |
| | — |
| | (125,636 | ) | | (79,925 | ) | | (11,355 | ) | | (45,354 | ) | | 262,270 |
| | — |
| Income (loss) before taxes | | 39,306 |
| | 11,391 |
| | (2,370 | ) | | 48,301 |
| | (48,664 | ) | | 47,964 |
| | Provision (benefit) for taxes | | 2,723 |
| | (1,876 | ) | | (1,322 | ) | | 11,856 |
| | — |
| | 11,381 |
| | Net income (loss) | | $ | 36,583 |
| | $ | 13,267 |
| | $ | (1,048 | ) | | $ | 36,445 |
| | $ | (48,664 | ) | | $ | 36,583 |
| | Income before taxes | | | 145,574 |
| | 109,087 |
| | 64,880 |
| | 135,654 |
| | (262,270 | ) | | 192,925 |
| Provision for taxes | | | 4,561 |
| | 9,777 |
| | 17,181 |
| | 20,393 |
| | — |
| | 51,912 |
| Net income | | | $ | 141,013 |
| | $ | 99,310 |
| | $ | 47,699 |
| | $ | 115,261 |
| | $ | (262,270 | ) | | $ | 141,013 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 481 |
| | — |
| | 481 |
| | — |
| | (481 | ) | | 481 |
| | (563 | ) | | — |
| | (563 | ) | | — |
| | 563 |
| | (563 | ) | Unrealized income on cash flow hedging derivatives | | (2,370 | ) | | (775 | ) | | — |
| | — |
| | 775 |
| | (2,370 | ) | | Unrealized income (loss) on cash flow hedging derivatives | | | (234 | ) | | 48 |
| | — |
| | — |
| | (48 | ) | | (234 | ) | Other comprehensive income (loss), (net of tax) | | (1,889 | ) | | (775 | ) | | 481 |
| | — |
| | 294 |
| | (1,889 | ) | | (797 | ) | | 48 |
| | (563 | ) | | — |
| | 515 |
| | (797 | ) | Total Comprehensive Income (Loss) | | $ | 34,694 |
| | $ | 12,492 |
| | $ | (567 | ) | | $ | 36,445 |
| | $ | (48,370 | ) | | $ | 34,694 |
| | Total Comprehensive Income | | | $ | 140,216 |
| | $ | 99,358 |
| | $ | 47,136 |
| | $ | 115,261 |
| | $ | (261,755 | ) | | $ | 140,216 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Six Months Ended June 30, 2013
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 48,243 |
| | $ | 93,729 |
| | $ | 35,243 |
| | $ | 367,983 |
| | $ | (141,779 | ) | | $ | 403,419 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 2,994 |
| | 33,096 |
| | — |
| | 36,090 |
| Operating expenses | | 2,831 |
| | 73,852 |
| | 21,527 |
| | 261,510 |
| | (141,779 | ) | | 217,941 |
| Selling, general and administrative | | 2,514 |
| | 43,501 |
| | 4,579 |
| | 16,212 |
| | — |
| | 66,806 |
| Depreciation and amortization | | 13,366 |
| | 18 |
| | 6,818 |
| | 30,616 |
| | — |
| | 50,818 |
| Loss on impairment / retirement of fixed assets, net | | 36 |
| | — |
| | 478 |
| | 115 |
| | — |
| | 629 |
| | | 18,747 |
| | 117,371 |
| | 36,396 |
| | 341,549 |
| | (141,779 | ) | | 372,284 |
| Operating income (loss) | | 29,496 |
| | (23,642 | ) | | (1,153 | ) | | 26,434 |
| | — |
| | 31,135 |
| Interest expense (income), net | | 20,722 |
| | 14,923 |
| | 19,607 |
| | (3,737 | ) | | — |
| | 51,515 |
| Net effect of swaps | | 4,257 |
| | 2,681 |
| | — |
| | — |
| | — |
| | 6,938 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 23,844 |
| | — |
| | — |
| | 23,844 |
| Other (income) expense | | 375 |
| | (4,516 | ) | | 1,383 |
| | 2,758 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | 41,221 |
| | 20,100 |
| | (4,712 | ) | | 25,876 |
| | (82,485 | ) | | — |
| Income (loss) before taxes | | (58,254 | ) | | (69,611 | ) | | (41,892 | ) | | 1,537 |
| | 82,485 |
| | (85,735 | ) | Provision (benefit) for taxes | | 3,482 |
| | (16,981 | ) | | (15,986 | ) | | 5,486 |
| | — |
| | (23,999 | ) | Net income (loss) | | (61,736 | ) | | (52,630 | ) | | (25,906 | ) | | (3,949 | ) | | 82,485 |
| | (61,736 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,893 |
| | — |
| | 1,893 |
| | — |
| | (1,893 | ) | | 1,893 |
| Unrealized income (loss) on cash flow hedging derivatives | | 10,564 |
| | 3,038 |
| | — |
| | — |
| | (3,038 | ) | | 10,564 |
| Other comprehensive income (loss), (net of tax) | | 12,457 |
| | 3,038 |
| | 1,893 |
| | — |
| | (4,931 | ) | | 12,457 |
| Total Comprehensive Income (Loss) | | $ | (49,279 | ) | | $ | (49,592 | ) | | $ | (24,013 | ) | | $ | (3,949 | ) | | $ | 77,554 |
| | $ | (49,279 | ) |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the SixNine Months Ended July 1,September 29, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 131,528 |
| | $ | 255,595 |
| | $ | 117,508 |
| | $ | 877,450 |
| | $ | (386,586 | ) | | $ | 995,495 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,076 |
| | 72,857 |
| | — |
| | 81,933 |
| Operating expenses | | 4,500 |
| | 150,320 |
| | 40,569 |
| | 579,532 |
| | (386,586 | ) | | 388,335 |
| Selling, general and administrative | | 4,310 |
| | 81,584 |
| | 9,360 |
| | 30,279 |
| | — |
| | 125,533 |
| Depreciation and amortization | | 31,672 |
| | 28 |
| | 15,797 |
| | 60,816 |
| | — |
| | 108,313 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | Loss on impairment / retirement of fixed assets, net | | 404 |
| | — |
| | 479 |
| | 1,383 |
| | — |
| | 2,266 |
| | | 40,886 |
| | 231,932 |
| | 75,281 |
| | 736,124 |
| | (386,586 | ) | | 697,637 |
| Operating income | | 90,642 |
| | 23,663 |
| | 42,227 |
| | 141,326 |
| | — |
| | 297,858 |
| Interest expense (income), net | | 31,580 |
| | 21,824 |
| | 29,338 |
| | (5,715 | ) | | — |
| | 77,027 |
| Net effect of swaps | | 5,067 |
| | 3,248 |
| | — |
| | — |
| | — |
| | 8,315 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 15,229 |
| | — |
| | — |
| | 15,229 |
| Other (income) expense | | 563 |
| | (6,645 | ) | | 1,967 |
| | 4,115 |
| | — |
| | — |
| Income from investment in affiliates | | (104,833 | ) | | (58,614 | ) | | (18,318 | ) | | (15,029 | ) | | 196,794 |
| | — |
| Income before taxes | | 137,090 |
| | 51,069 |
| | 13,394 |
| | 157,955 |
| | (196,794 | ) | | 162,714 |
| Provision (benefit) for taxes | | 8,402 |
| | (2,444 | ) | | (1,596 | ) | | 29,664 |
| | — |
| | 34,026 |
| Net income | | $ | 128,688 |
| | $ | 53,513 |
| | $ | 14,990 |
| | $ | 128,291 |
| | $ | (196,794 | ) | | $ | 128,688 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,194 |
| | — |
| | 1,194 |
| | — |
| | (1,194 | ) | | 1,194 |
| Unrealized income on cash flow hedging derivatives | | 7,803 |
| | 1,836 |
| | — |
| | — |
| | (1,836 | ) | | 7,803 |
| Other comprehensive income, (net of tax) | | 8,997 |
| | 1,836 |
| | 1,194 |
| | — |
| | (3,030 | ) | | 8,997 |
| Total Comprehensive Income | | $ | 137,685 |
| | $ | 55,349 |
| | $ | 16,184 |
| | $ | 128,291 |
| | $ | (199,824 | ) | | $ | 137,685 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 2012 (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 | | $ | 45,201 |
| | $ | 80,087 |
| | $ | 42,107 |
| | $ | 343,569 |
| | $ | (125,160 | ) | | $ | 385,804 |
| | $ | 124,864 |
| | $ | 221,221 |
| | $ | 130,441 |
| | $ | 808,471 |
| | $ | (345,748 | ) | | $ | 939,249 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 3,541 |
| | 33,032 |
| | — |
| | 36,573 |
| | — |
| | — |
| | 9,988 |
| | 73,938 |
| | — |
| | 83,926 |
| Operating expenses | | 2,773 |
| | 73,020 |
| | 21,592 |
| | 245,296 |
| | (125,160 | ) | | 217,521 |
| | 4,141 |
| | 147,211 |
| | 40,328 |
| | 534,900 |
| | (345,748 | ) | | 380,832 |
| Selling, general and administrative | | 2,988 |
| | 38,221 |
| | 5,055 |
| | 16,231 |
| | — |
| | 62,495 |
| | 4,841 |
| | 70,848 |
| | 9,877 |
| | 29,922 |
| | — |
| | 115,488 |
| Depreciation and amortization | | 14,227 |
| | 18 |
| | 6,985 |
| | 30,758 |
| | — |
| | 51,988 |
| | 33,436 |
| | 28 |
| | 16,415 |
| | 62,332 |
| | — |
| | 112,211 |
| Loss (gain) on impairment / retirement of fixed assets, net | | (779 | ) | | — |
| | 9 |
| | — |
| | — |
| | (770 | ) | | Loss on impairment / retirement of fixed assets, net | | | 24,221 |
| | — |
| | 9 |
| | — |
| | — |
| | 24,230 |
| | | 19,209 |
| | 111,259 |
| | 37,182 |
| | 325,317 |
| | (125,160 | ) | | 367,807 |
| | 66,639 |
| | 218,087 |
| | 76,617 |
| | 701,092 |
| | (345,748 | ) | | 716,687 |
| Operating income (loss) | | 25,992 |
| | (31,172 | ) | | 4,925 |
| | 18,252 |
| | — |
| | 17,997 |
| | Operating income | | | 58,225 |
| | 3,134 |
| | 53,824 |
| | 107,379 |
| | — |
| | 222,562 |
| Interest expense, net | | 24,225 |
| | 14,699 |
| | 21,001 |
| | (2,904 | ) | | — |
| | 57,021 |
| | 36,438 |
| | 21,957 |
| | 30,898 |
| | (5,422 | ) | | — |
| | 83,871 |
| Net effect of swaps | | 69 |
| | 263 |
| | (1,475 | ) | | — |
| | — |
| | (1,143 | ) | | (35 | ) | | 192 |
| | (1,475 | ) | | — |
| | — |
| | (1,318 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 1,109 |
| | — |
| | — |
| | 1,109 |
| | Unrealized / realized foreign currency gain | | | — |
| | — |
| | (13,926 | ) | | — |
| | — |
| | (13,926 | ) | Other (income) expense | | 375 |
| | (5,076 | ) | | 709 |
| | 3,992 |
| | — |
| | — |
| | 561 |
| | (7,119 | ) | | 1,221 |
| | 5,337 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | 26,015 |
| | 6,477 |
| | (3,541 | ) | | 6,803 |
| | (35,754 | ) | | — |
| | Income (loss) before taxes | | (24,692 | ) | | (47,535 | ) | | (12,878 | ) | | 10,361 |
| | 35,754 |
| | (38,990 | ) | | Income from investment in affiliates | | | (99,621 | ) | | (73,448 | ) | | (14,896 | ) | | (38,551 | ) | | 226,516 |
| | — |
| Income before taxes | | | 120,882 |
| | 61,552 |
| | 52,002 |
| | 146,015 |
| | (226,516 | ) | | 153,935 |
| Provision (benefit) for taxes | | 4,140 |
| | (13,548 | ) | | (3,656 | ) | | 2,906 |
| | — |
| | (10,158 | ) | | 8,701 |
| | (3,771 | ) | | 13,525 |
| | 23,299 |
| | — |
| | 41,754 |
| Net income (loss) | | $ | (28,832 | ) | | $ | (33,987 | ) | | $ | (9,222 | ) | | $ | 7,455 |
| | $ | 35,754 |
| | $ | (28,832 | ) | | Net income | | | $ | 112,181 |
| | $ | 65,323 |
| | $ | 38,477 |
| | $ | 122,716 |
| | $ | (226,516 | ) | | $ | 112,181 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (688 | ) | | — |
| | (688 | ) | | — |
| | 688 |
| | (688 | ) | | (1,251 | ) | | — |
| | (1,251 | ) | | — |
| | 1,251 |
| | (1,251 | ) | Unrealized income on cash flow hedging derivatives | | (2,031 | ) | | (677 | ) | | 21 |
| | — |
| | 656 |
| | (2,031 | ) | | Unrealized income (loss) on cash flow hedging derivatives | | | (1,798 | ) | | (629 | ) | | 21 |
| | — |
| | 608 |
| | (1,798 | ) | Other comprehensive income (loss), (net of tax) | | (2,719 | ) | | (677 | ) | | (667 | ) | | — |
| | 1,344 |
| | (2,719 | ) | | (3,049 | ) | | (629 | ) | | (1,230 | ) | | — |
| | 1,859 |
| | (3,049 | ) | Total Comprehensive Income (loss) | | $ | (31,551 | ) | | $ | (34,664 | ) | | $ | (9,889 | ) | | $ | 7,455 |
| | $ | 37,098 |
| | $ | (31,551 | ) | | Total Comprehensive Income | | | $ | 109,132 |
| | $ | 64,694 |
| | $ | 37,247 |
| | $ | 122,716 |
| | $ | (224,657 | ) | | $ | 109,132 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Twelve Months Ended June 30,September 29, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 148,757 |
| | $ | 271,778 |
| | $ | 133,554 |
| | $ | 952,082 |
| | $ | (420,102 | ) | | $ | 1,086,069 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,769 |
| | 84,796 |
| | — |
| | 94,565 |
| Operating expenses | | 5,438 |
| | 177,188 |
| | 47,798 |
| | 641,501 |
| | (420,102 | ) | | 451,823 |
| Selling, general and administrative | | 6,021 |
| | 91,895 |
| | 10,659 |
| | 34,047 |
| | — |
| | 142,622 |
| Depreciation and amortization | | 36,799 |
| | 40 |
| | 18,032 |
| | 70,265 |
| | — |
| | 125,136 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (6,625 | ) | Loss on impairment / retirement of fixed assets, net | | 25,950 |
| | — |
| | 475 |
| | 5,310 |
| | — |
| | 31,735 |
| | | 74,208 |
| | 269,123 |
| | 86,733 |
| | 829,294 |
| | (420,102 | ) | | 839,256 |
| Operating income | | 74,549 |
| | 2,655 |
| | 46,821 |
| | 122,788 |
| | — |
| | 246,813 |
| Interest (income) expense, net | | 45,022 |
| | 29,552 |
| | 39,476 |
| | (9,005 | ) | | — |
| | 105,045 |
| Net effect of swaps | | 4,050 |
| | 2,539 |
| | — |
| | — |
| | — |
| | 6,589 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 13,737 |
| | — |
| | — |
| | 13,737 |
| Other (income) expense | | 749 |
| | (8,947 | ) | | 2,694 |
| | 5,504 |
| | — |
| | — |
| Income from investment in affiliates | | (74,816 | ) | | (52,527 | ) | | (15,768 | ) | | (12,687 | ) | | 155,798 |
| | — |
| Income before taxes | | 78,369 |
| | 19,257 |
| | 6,065 |
| | 138,976 |
| | (155,798 | ) | | 86,869 |
| Provision (benefit) for taxes | | 9,417 |
| | (13,289 | ) | | (8,917 | ) | | 30,706 |
| | — |
| | 17,917 |
| Net income | | $ | 68,952 |
| | $ | 32,546 |
| | $ | 14,982 |
| | $ | 108,270 |
| | $ | (155,798 | ) | | $ | 68,952 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,950 |
| | — |
| | 2,950 |
| | — |
| | (2,950 | ) | | 2,950 |
| Unrealized income on cash flow hedging derivatives | | 12,735 |
| | 3,635 |
| | — |
| | — |
| | (3,635 | ) | | 12,735 |
| Other comprehensive income, (net of tax) | | 15,685 |
| | 3,635 |
| | 2,950 |
| | — |
| | (6,585 | ) | | 15,685 |
| Total Comprehensive Income | | $ | 84,637 |
| | $ | 36,181 |
| | $ | 17,932 |
| | $ | 108,270 |
| | $ | (162,383 | ) | | $ | 84,637 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Twelve Months Ended July 1, 2012 (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 | | $ | 150,783 |
| | $ | 267,882 |
| | $ | 138,595 |
| | $ | 963,915 |
| | $ | (418,258 | ) | | $ | 1,102,917 |
| | $ | 152,379 |
| | $ | 292,510 |
| | $ | 127,485 |
| | $ | 996,647 |
| | $ | (444,321 | ) | | $ | 1,124,700 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,743 |
| | 86,664 |
| | — |
| | 97,407 |
| | — |
| | — |
| | 9,404 |
| | 83,651 |
| | — |
| | 93,055 |
| Operating expenses | | 5,341 |
| | 175,593 |
| | 47,795 |
| | 647,795 |
| | (418,258 | ) | | 458,266 |
| | 5,739 |
| | 179,465 |
| | 48,104 |
| | 669,919 |
| | (444,321 | ) | | 458,906 |
| Selling, general and administrative | | 6,309 |
| | 88,725 |
| | 11,892 |
| | 37,847 |
| | — |
| | 144,773 |
| | 5,964 |
| | 97,351 |
| | 10,618 |
| | 34,423 |
| | — |
| | 148,356 |
| Depreciation and amortization | | 38,843 |
| | 42 |
| | 17,976 |
| | 73,555 |
| | — |
| | 130,416 |
| | 35,896 |
| | 40 |
| | 17,581 |
| | 68,891 |
| | — |
| | 122,408 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 15 |
| | — |
| | (52 | ) | | 10,426 |
| | — |
| | 10,389 |
| | (Gain) on sale of other assets | | | — |
| | — |
| | — |
| | (15,368 | ) | | — |
| | (15,368 | ) | Loss on impairment / retirement of fixed assets, net | | | 1,318 |
| | — |
| | 476 |
| | 6,578 |
| | — |
| | 8,372 |
| | | 50,508 |
| | 264,360 |
| | 88,354 |
| | 856,287 |
| | (418,258 | ) | | 841,251 |
| | 48,917 |
| | 276,856 |
| | 86,183 |
| | 848,094 |
| | (444,321 | ) | | 815,729 |
| Operating income | | 100,275 |
| | 3,522 |
| | 50,241 |
| | 107,628 |
| | — |
| | 261,666 |
| | 103,462 |
| | 15,654 |
| | 41,302 |
| | 148,553 |
| | — |
| | 308,971 |
| Interest expense, net | | 61,742 |
| | 24,419 |
| | 48,119 |
| | (3,440 | ) | | — |
| | 130,840 |
| | Interest (income) expense, net | | | 43,667 |
| | 29,195 |
| | 39,310 |
| | (8,465 | ) | | — |
| | 103,707 |
| Net effect of swaps | | (9,027 | ) | | (121 | ) | | (5,569 | ) | | — |
| | — |
| | (14,717 | ) | | 4,964 |
| | 3,177 |
| | — |
| | — |
| | — |
| | 8,141 |
| Loss on early debt extinguishment | | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,863 |
| | — |
| | — |
| | 14,863 |
| | — |
| | — |
| | 20,157 |
| | — |
| | — |
| | 20,157 |
| Other (income) expense | | 533 |
| | (9,873 | ) | | 1,602 |
| | 7,520 |
| | — |
| | (218 | ) | | 751 |
| | (9,033 | ) | | 2,766 |
| | 5,516 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | (80,137 | ) | | (28,421 | ) | | (6,557 | ) | | 6,067 |
| | 109,048 |
| | — |
| | Income from investment in affiliates | | | (95,234 | ) | | (51,316 | ) | | (18,019 | ) | | (8,239 | ) | | 172,808 |
| | — |
| Income (loss) before taxes | | 127,164 |
| | 17,518 |
| | (2,217 | ) | | 97,481 |
| | (109,048 | ) | | 130,898 |
| | 128,139 |
| | 30,850 |
| | (3,529 | ) | | 159,741 |
| | (172,808 | ) | | 142,393 |
| Provision (benefit) for taxes | | 10,056 |
| | (26,630 | ) | | 7,042 |
| | 23,322 |
| | — |
| | 13,790 |
| | 9,776 |
| | (8,530 | ) | | (11,708 | ) | | 34,492 |
| | — |
| | 24,030 |
| Net income (loss) | | $ | 117,108 |
| | $ | 44,148 |
| | $ | (9,259 | ) | | $ | 74,159 |
| | $ | (109,048 | ) | | $ | 117,108 |
| | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | Net income | | | $ | 118,363 |
| | $ | 39,380 |
| | $ | 8,179 |
| | $ | 125,249 |
| | $ | (172,808 | ) | | $ | 118,363 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 733 |
| | — |
| | 733 |
| | — |
| | (733 | ) | | 733 |
| | 2,814 |
| | — |
| | 2,814 |
| | — |
| | (2,814 | ) | | 2,814 |
| Unrealized income (loss) on cash flow hedging derivatives | | (3,854 | ) | | (4,884 | ) | | 21 |
| | — |
| | 4,863 |
| | (3,854 | ) | | Other comprehensive income (loss), (net of tax) | | (3,121 | ) | | (4,884 | ) | | 754 |
| | — |
| | 4,130 |
| | (3,121 | ) | | Total Comprehensive Income (Loss) | | $ | 113,987 |
| | $ | 39,264 |
| | $ | (8,505 | ) | | $ | 74,159 |
| | $ | (104,918 | ) | | $ | 113,987 |
| | Unrealized income on cash flow hedging derivatives | | | 9,740 |
| | 2,385 |
| | — |
| | — |
| | (2,385 | ) | | 9,740 |
| Other comprehensive income, (net of tax) | | | 12,554 |
| | 2,385 |
| | 2,814 |
| | — |
| | (5,199 | ) | | 12,554 |
| Total Comprehensive Income | | | $ | 130,917 |
| | $ | 41,765 |
| | $ | 10,993 |
| | $ | 125,249 |
| | $ | (178,007 | ) | | $ | 130,917 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWSOPERATIONS AND COMPREHENSIVE INCOME For the SixTwelve Months Ended JuneSeptember 30, 20132012 (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 | | $ | 4,808 |
| | $ | (30,371 | ) | | $ | (4,856 | ) | | $ | 44,138 |
| | $ | 68,837 |
| | $ | 82,556 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 38,056 |
| | 37,167 |
| | (18,274 | ) | | 17,909 |
| | (74,858 | ) | | — |
| Capital expenditures | | (38,398 | ) | | — |
| | (3,435 | ) | | (37,356 | ) | | — |
| | (79,189 | ) | Net cash from (for) investing activities | | (342 | ) | | 37,167 |
| | (21,709 | ) | | (19,447 | ) | | (74,858 | ) | | (79,189 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 58,000 |
| | — |
| | — |
| | — |
| | — |
| | 58,000 |
| Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,312 | ) | | (8,014 | ) | | (438 | ) | | — |
| | — |
| | (22,764 | ) | Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Distributions (paid) received | | (71,350 | ) | | 1,711 |
| | — |
| | — |
| | — |
| | (69,639 | ) | Exercise of limited partnership unit options | | — |
| | 28 |
| | — |
| | — |
| | — |
| | 28 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (130 | ) | | — |
| | — |
| | — |
| | (130 | ) | Net cash from (for) financing activities | | (29,466 | ) | | (7,240 | ) | | (474 | ) | | — |
| | — |
| | (37,180 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (1,389 | ) | | — |
| | — |
| | (1,389 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (25,000 | ) | | (444 | ) | | (28,428 | ) | | 24,691 |
| | (6,021 | ) | | (35,202 | ) | Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 71,152 |
| | — |
| | 127,191 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 24,188 |
| | — |
| | (62 | ) | | 10,383 |
| | — |
| | 34,509 |
| | | 74,203 |
| | 271,598 |
| | 87,553 |
| | 839,493 |
| | (409,232 | ) | | 863,615 |
| Operating income (loss) | | 73,530 |
| | (9,720 | ) | | 54,697 |
| | 101,972 |
| | — |
| | 220,479 |
| Interest 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 | | (88,216 | ) | | (50,693 | ) | | (9,456 | ) | | (21,713 | ) | | 170,078 |
| | — |
| Income before taxes | | 116,009 |
| | 22,587 |
| | 42,703 |
| | 122,540 |
| | (170,078 | ) | | 133,761 |
| Provision (benefit) for taxes | | 10,106 |
| | (29,298 | ) | | 20,942 |
| | 26,108 |
| | — |
| | 27,858 |
| Net income | | $ | 105,903 |
| | $ | 51,885 |
| | $ | 21,761 |
| | $ | 96,432 |
| | $ | (170,078 | ) | | $ | 105,903 |
| 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 | | $ | 102,834 |
| | $ | 51,776 |
| | $ | 19,110 |
| | $ | 96,432 |
| | $ | (167,318 | ) | | $ | 102,834 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the SixNine Months Ended July 1, 2012 (As restated)September 29, 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 | | $ | (75,559 | ) | | $ | 47,309 |
| | $ | (12,724 | ) | | $ | 44,638 |
| | $ | 60,941 |
| | $ | 64,605 |
| | NET CASH FROM OPERATING ACTIVITIES | | | $ | 337,821 |
| | $ | 60,434 |
| | $ | 21,615 |
| | $ | 66,757 |
| | $ | (169,672 | ) | | $ | 316,955 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 41,361 |
| | 11,532 |
| | (415 | ) | | 13,984 |
| | (66,462 | ) | | — |
| | (63,105 | ) | | (52,172 | ) | | (29,579 | ) | | (24,816 | ) | | 169,672 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| | — |
| | — |
| | — |
| | 15,297 |
| | — |
| | 15,297 |
| Capital expenditures | | (24,266 | ) | | — |
| | (13,478 | ) | | (27,136 | ) | | — |
| | (64,880 | ) | | (43,568 | ) | | — |
| | (5,517 | ) | | (48,449 | ) | | — |
| | (97,534 | ) | Net cash from (for) investing activities | | 18,268 |
| | 11,532 |
| | (13,893 | ) | | (13,152 | ) | | (66,462 | ) | | (63,707 | ) | | Net cash from investing activities | | | (106,673 | ) | | (52,172 | ) | | (35,096 | ) | | (57,968 | ) | | 169,672 |
| | (82,237 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 111,000 |
| | — |
| | — |
| | — |
| | — |
| | 111,000 |
| | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | | Term debt borrowings | | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | | (14,331 | ) | | (8,028 | ) | | (453 | ) | | — |
| | — |
| | (22,812 | ) | Term debt payments, including early termination penalties | | (9,259 | ) | | (6,536 | ) | | (205 | ) | | — |
| | — |
| | (16,000 | ) | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Intercompany (payments) receipts | | — |
| | 7,482 |
| | — |
| | (7,482 | ) | | — |
| | — |
| | Distributions (paid) received | | (44,450 | ) | | 92 |
| | — |
| | — |
| | — |
| | (44,358 | ) | | (107,013 | ) | | 2,555 |
| | — |
| | — |
| | — |
| | (104,458 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | — |
| 60,000 |
| | — |
| | — |
| | — |
| | Exercise of limited partnership unit options | | — |
| | 47 |
| | — |
| | — |
| | — |
| | 47 |
| | — |
| | 43 |
| | — |
| | — |
| | — |
| | 43 |
| Excess tax benefit from unit-based compensation | | — |
| | (438 | ) | | — |
| | — |
| | — |
| | (438 | ) | | Net cash from (for) financing activities | | 57,291 |
| | (59,353 | ) | | 9,345 |
| | (7,482 | ) | | — |
| | (199 | ) | | Excess tax benefit from unit-based compensation expense | | | — |
| | (148 | ) | | — |
| | — |
| | — |
| | (148 | ) | Net cash (for) financing activities | | | (123,148 | ) | | (6,413 | ) | | (489 | ) | | — |
| | — |
| | (130,050 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (294 | ) | | — |
| | — |
| | (294 | ) | | — |
| | — |
| | (16 | ) | | — |
| | — |
| | (16 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (512 | ) | | (17,566 | ) | | 24,004 |
| | (5,521 | ) | | 405 |
| | 108,000 |
| | 1,849 |
| | (13,986 | ) | | 8,789 |
| | — |
| | 104,652 |
| Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
| | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the TwelveNine Months Ended JuneSeptember 30, 20132012 (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 | | $ | 210,085 |
| | $ | (47,009 | ) | | $ | 29,440 |
| | $ | 140,865 |
| | $ | (30,675 | ) | | $ | 302,706 |
| | NET CASH FROM OPERATING ACTIVITIES | | | $ | 209,022 |
| | $ | 49,092 |
| | $ | 9,484 |
| | $ | 156,240 |
| | $ | (147,094 | ) | | $ | 276,744 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 27,874 |
| | (30,140 | ) | | (15,735 | ) | | (12,174 | ) | | 30,175 |
| | — |
| | (56,757 | ) | | (70,669 | ) | | 3,557 |
| | (23,225 | ) | | 147,094 |
| | — |
| Sale of other assets | | — |
| | — |
| | — |
| | 14,885 |
| | — |
| | 14,885 |
| | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (47,797 | ) | | (8 | ) | | (4,404 | ) | | (56,786 | ) | | — |
| | (108,995 | ) | | (29,295 | ) | | (8 | ) | | (14,426 | ) | | (32,081 | ) | | — |
| | (75,810 | ) | Net cash for investing activities | | (19,923 | ) | | (30,148 | ) | | (20,139 | ) | | (54,075 | ) | | 30,175 |
| | (94,110 | ) | | Net cash (for) investing activities | | | (84,879 | ) | | (70,677 | ) | | (10,869 | ) | | (55,306 | ) | | 147,094 |
| | (74,637 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Net borrowings on revolving credit loans | | (53,000 | ) | | — |
| | — |
| | — |
| | — |
| | (53,000 | ) | | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| | Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| | Intercompany term debt (payments) receipts | | — |
| | 86,362 |
| | — |
| | (86,362 | ) | | — |
| | — |
| | Derivative settlement | | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Term debt payments, including early termination penalties | | (660,931 | ) | | (466,114 | ) | | (14,630 | ) | | — |
| | — |
| | (1,141,675 | ) | | (14,468 | ) | | (10,212 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Intercompany (payments) receipts | | | — |
| | 93,845 |
| | — |
| | (93,845 | ) | | — |
| | — |
| Distributions (paid) received | | (115,839 | ) | | 1,746 |
| | — |
| | — |
| | — |
| | (114,093 | ) | | (66,675 | ) | | 110 |
| | — |
| | — |
| | — |
| | (66,565 | ) | Capital (contribution) infusion | | | — |
| | (60,000 | ) | — |
| 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 57 |
| | — |
| | — |
| | — |
| | 57 |
| | — |
| | 47 |
| | — |
| | — |
| | — |
| | 47 |
| Payment of debt issuance costs | | (14,311 | ) | | (8,014 | ) | | (433 | ) | | — |
| | — |
| | (22,758 | ) | | Excess tax benefit from unit-based compensation expense | | — |
| | 1,517 |
| | — |
| | — |
| | — |
| | 1,517 |
| | Excess tax benefit from unit-based compensation | | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | Net cash from (for) financing activities | | (190,162 | ) | | 77,157 |
| | (585 | ) | | (86,362 | ) | | — |
| | (199,952 | ) | | (81,143 | ) | | 23,336 |
| | 9,230 |
| | (93,845 | ) | | — |
| | (142,422 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (945 | ) | | — |
| | — |
| | (945 | ) | | — |
| | — |
| | 893 |
| | — |
| | — |
| | 893 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase for the period | | — |
| | — |
| | 7,771 |
| | 428 |
| | (500 | ) | | 7,699 |
| | 43,000 |
| | 1,751 |
| | 8,738 |
| | 7,089 |
| | — |
| | 60,578 |
| Balance, beginning of period | | — |
| | — |
| | 13,974 |
| | 27,476 |
| | (5,521 | ) | | 35,929 |
| | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended July 1, 2012 (As restated)September 29, 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 | | $ | 146,874 |
| | $ | (73,709 | ) | | $ | 24,332 |
| | $ | 223,401 |
| | $ | (63,983 | ) | | $ | 256,915 |
| | NET CASH FROM OPERATING ACTIVITIES | | | $ | 258,843 |
| | $ | 42,367 |
| | $ | 32,927 |
| | $ | 52,457 |
| | $ | (61,746 | ) | | $ | 324,848 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (31,801 | ) | | (37,181 | ) | | (579 | ) | | 11,099 |
| | 58,462 |
| | — |
| | 24,507 |
| | (37,602 | ) | | (30,743 | ) | | (17,908 | ) | | 61,746 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| | — |
| | — |
| | — |
| | 30,182 |
| | — |
| | 30,182 |
| Capital expenditures | | (36,852 | ) | | — |
| | (25,832 | ) | | (40,701 | ) | | — |
| | (103,385 | ) | | (47,938 | ) | | (1 | ) | | (5,532 | ) | | (63,290 | ) | | — |
| | (116,761 | ) | Net cash from (for) investing activities | | (67,480 | ) | | (37,181 | ) | | (26,411 | ) | | (29,602 | ) | | 58,462 |
| | (102,212 | ) | | Net cash (for) investing activities | | | (23,431 | ) | | (37,603 | ) | | (36,275 | ) | | (51,016 | ) | | 61,746 |
| | (86,579 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Net borrowings (payments) on revolving credit loans | | 26,000 |
| | — |
| | — |
| | — |
| | — |
| | 26,000 |
| | Intercompany term debt (payments) receipts | | — |
| | 183,138 |
| | — |
| | (183,138 | ) | | — |
| | — |
| | Term debt borrowings | | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Term debt payments, including early termination penalties | | (21,383 | ) | | (15,094 | ) | | (473 | ) | | — |
| | — |
| | (36,950 | ) | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | | Distributions (paid) received | | (90,011 | ) | | 269 |
| | — |
| | — |
| | — |
| | (89,742 | ) | | (129,277 | ) | | 2,571 |
| | — |
| | — |
| | — |
| | (126,706 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| | Exercise of limited partnership unit options | | | — |
| | 43 |
| | — |
| | — |
| | — |
| | 43 |
| Payment of debt issuance costs | | — |
| | — |
| | (723 | ) | | — |
| | — |
| | (723 | ) | | (14,331 | ) | | (8,028 | ) | | (453 | ) | | — |
| | — |
| | (22,812 | ) | Exercise of limited partnership unit options | | — |
| | 53 |
| | — |
| | — |
| | — |
| | 53 |
| | Excess tax benefit from unit-based compensation | | — |
| | (438 | ) | | — |
| | — |
| | — |
| | (438 | ) | | Net cash from (for) financing activities | | (85,394 | ) | | 107,928 |
| | 8,354 |
| | (183,138 | ) | | — |
| | (152,250 | ) | | Excess tax benefit from unit-based compensation expense | | | — |
| | 1,515 |
| | — |
| | — |
| | — |
| | 1,515 |
| Net cash (for) financing activities | | | (145,412 | ) | | (4,734 | ) | | (489 | ) | | — |
| | — |
| | (150,635 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,203 | ) | | — |
| | — |
| | (2,203 | ) | | — |
| | — |
| | (254 | ) | | — |
| | — |
| | (254 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase (decrease) for the period | | (6,000 | ) | | (2,962 | ) | | 4,072 |
| | 10,661 |
| | (5,521 | ) | | 250 |
| | 90,000 |
| | 30 |
| | (4,091 | ) | | 1,441 |
| | — |
| | 87,380 |
| Balance, beginning of period | | 6,000 |
| | 2,962 |
| | 9,902 |
| | 16,815 |
| | — |
| | 35,679 |
| | 43,000 |
| | 2,263 |
| | 40,278 |
| | 10,561 |
| | — |
| | 96,102 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
| | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 30, 2012 (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 | | $ | 181,718 |
| | $ | (157,023 | ) | | $ | 8,795 |
| | $ | 314,835 |
| | $ | (75,771 | ) | | $ | 272,554 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (35,830 | ) | | (42,342 | ) | | 8,488 |
| | (6,087 | ) | | 75,771 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (33,025 | ) | | (8 | ) | | (23,050 | ) | | (37,037 | ) | | — |
| | (93,120 | ) | Net cash (for) investing activities | | (67,682 | ) | | (42,350 | ) | | (14,562 | ) | | (43,124 | ) | | 75,771 |
| | (91,947 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Intercompany term debt (payments) receipts | | — |
| | 269,500 |
| | — |
| | (269,500 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (14,467 | ) | | (10,213 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (105,569 | ) | | 261 |
| | — |
| | — |
| | — |
| | (105,308 | ) | 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 | | — |
| | (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 |
|
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 overseen by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including allocating resources on a property-by-property basis.
Aside fromAlong with 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 Executive Vice President - Operations, and the park general managers.
Critical Accounting Policies: 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 secondthird quarter of 2013, there were no changes in the above critical accounting policies previously disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2012 except as noted below. Change in Depreciation Method Effective January 1, 2013, the Partnershipwe changed itsour 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 Partnershipwe 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 Partnershipwe 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 believesWe believe 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 June 30,September 29, 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 2013 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-, six-nine- and twelve-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012. | | | | Three months ended | | Six months ended | | Twelve months ended | | Three months ended | | Nine months ended | | Twelve months ended | | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | | | (13 weeks) | | (14 weeks) | | (26 weeks) | | (26 weeks) | | (52 weeks) | | (53 weeks) | | (13 weeks) | | (13 weeks) | | (39 weeks) | | (39 weeks) | | (52 weeks) | | (53 weeks) | | | | | (As restated) | | | | (As restated) | | | | (As restated) | | | | (As restated) | | | | (As restated) | | | | (As restated) | | | (In thousands) | | (In thousands) | Net income (loss) | | $ | 47,390 |
| | $ | 36,583 |
| | $ | (61,736 | ) | | $ | (28,832 | ) | | $ | 68,952 |
| | $ | 117,108 |
| | Net income | | | $ | 190,424 |
| | $ | 141,013 |
| | $ | 128,688 |
| | $ | 112,181 |
| | $ | 118,363 |
| | $ | 105,903 |
| Interest expense | | 25,861 |
| | 30,236 |
| | 51,624 |
| | 57,039 |
| | 105,204 |
| | 130,927 |
| | 25,529 |
| | 26,863 |
| | 77,153 |
| | 83,902 |
| | 103,870 |
| | 116,437 |
| Interest income | | (69 | ) | | (2 | ) | | (109 | ) | | (18 | ) | | (159 | ) | | (87 | ) | | (17 | ) | | (13 | ) | | (126 | ) | | (31 | ) | | (163 | ) | | (68 | ) | Provision (benefit) for taxes | | 11,660 |
| | 11,381 |
| | (23,999 | ) | | (10,158 | ) | | 17,917 |
| | 13,790 |
| | Provision for taxes | | | 58,025 |
| | 51,912 |
| | 34,026 |
| | 41,754 |
| | 24,030 |
| | 27,858 |
| Depreciation and amortization | | 46,032 |
| | 47,909 |
| | 50,818 |
| | 51,988 |
| | 125,136 |
| | 130,416 |
| | 57,495 |
| | 60,223 |
| | 108,313 |
| | 112,211 |
| | 122,408 |
| | 127,191 |
| EBITDA | | 130,874 |
| | 126,107 |
| | 16,598 |
| | 70,019 |
| | 317,050 |
| | 392,154 |
| | 331,456 |
| | 279,998 |
| | 348,054 |
| | 350,017 |
| | 368,508 |
| | 377,321 |
| Loss on early extinguishment of debt | | — |
| | — |
| | 34,573 |
| | — |
| | 34,573 |
| | — |
| | — |
| | — |
| | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | (2,273 | ) | | (173 | ) | | 6,938 |
| | (1,143 | ) | | 6,589 |
| | (14,717 | ) | | 1,377 |
| | (175 | ) | | 8,315 |
| | (1,318 | ) | | 8,141 |
| | (10,930 | ) | Unrealized foreign currency loss | | 14,875 |
| | 8,878 |
| | 23,756 |
| | 629 |
| | 13,946 |
| | 14,549 |
| | Unrealized foreign currency (gain) loss | | | (8,385 | ) | | (14,737 | ) | | 15,371 |
| | (14,108 | ) | | 20,298 |
| | (17,502 | ) | Non-cash equity expense | | 869 |
| | 568 |
| | 3,802 |
| | 2,268 |
| | 4,799 |
| | 2,257 |
| | 843 |
| | 362 |
| | 4,645 |
| | 2,630 |
| | 5,280 |
| | 2,619 |
| Loss (gain) on impairment/retirement of fixed assets, net | | 29 |
| | (862 | ) | | 629 |
| | (770 | ) | | 31,735 |
| | 10,389 |
| | Loss on impairment/retirement of fixed assets, net | | | 1,637 |
| | 25,000 |
| | 2,266 |
| | 24,230 |
| | 8,372 |
| | 34,509 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | | — |
| | (15,368 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | — |
| | — |
| | 150 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 150 |
| Refinancing costs | | — |
| | — |
| | — |
| | — |
| | — |
| | (195 | ) | | Other non-recurring items (as defined) | | (297 | ) | | 444 |
| | 508 |
| | 2,165 |
| | 2,523 |
| | 6,420 |
| | 197 |
| | 1,861 |
| | 705 |
| | 4,026 |
| | 859 |
| | 7,445 |
| Adjusted EBITDA (1) | | $ | 144,077 |
| | $ | 134,962 |
| | $ | 86,804 |
| | $ | 73,168 |
| | $ | 404,590 |
| | $ | 411,007 |
| | $ | 318,382 |
| | $ | 292,309 |
| | $ | 405,186 |
| | $ | 365,477 |
| | $ | 430,663 |
| | $ | 393,612 |
| | | | | | | | | | | | | | | | | | | | | | | | | | (1) As permitted by and defined in the 2013 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:
Restatement -
We have made the followinga correction relating to our use of the composite depreciation method.
This The correction, which impacts the Balance Sheet at July 1,September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three, six,three-, nine-, and 12 monthtwelve-month periods ended July 1,September 30, 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'sour initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was reviewed in connection with respondinga response to an SEC comment letter. We ultimately concluded that such disposition was unusual and that an $8.8 million charge should have been reflected in the 2011 financial statements.
SixNine months ended June 30,September 29, 2013
The fiscal six-monthnine-month period ended June 30,September 29, 2013, consisted of a 26-week39-week period and included a total of 9171,936 operating days compared with 2639 weeks and 1,0012,178 operating days for the fiscal six-monthnine-month period ended July 1,September 30, 2012. The difference in operating days is primarily due to the sale of atwo non-core water park in the fourth quarter of 2012,parks, as well as the combiningcombination of two parks, Worlds of Fun and Oceans of Fun, into one gate for 2013.
The following table presents key financial information for the sixnine months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | Six months ended | | Six months ended | | Increase (Decrease) | | Nine months ended | | Nine months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (26 weeks) | | (26 weeks) | | | | | | (39 weeks) | | (39 weeks) | | | | | | | | | (As restated) | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | | (Amounts in thousands) | Net revenues | | $ | 403,419 |
| | $ | 385,804 |
| | $ | 17,615 |
| | 4.6 | % | | $ | 995,495 |
| | $ | 939,249 |
| | $ | 56,246 |
| | 6.0 | % | Operating costs and expenses | | 320,837 |
| | 316,589 |
| | 4,248 |
| | 1.3 | % | | 595,801 |
| | 580,246 |
| | 15,555 |
| | 2.7 | % | Depreciation and amortization | | 50,818 |
| | 51,988 |
| | (1,170 | ) | | (2.3 | )% | | 108,313 |
| | 112,211 |
| | (3,898 | ) | | (3.5 | )% | Loss (gain) on impairment / retirement of fixed assets | | 629 |
| | (770 | ) | | 1,399 |
| | N/M |
| | Loss on impairment / retirement of fixed assets | | | 2,266 |
| | 24,230 |
| | (21,964 | ) | | N/M |
| Gain on sale of other assets | | | (8,743 | ) | | — |
| | (8,743 | ) | | N/M |
| Operating income | | $ | 31,135 |
| | $ | 17,997 |
| | $ | 13,138 |
| | 73.0 | % | | $ | 297,858 |
| | $ | 222,562 |
| | $ | 75,296 |
| | 33.8 | % | | | | | | | | | | | | | | | | | | Other Data: | | | | | | | | | | | | | | | | | Adjusted EBITDA | | $ | 86,804 |
| | $ | 73,168 |
| | $ | 13,636 |
| | 18.6 | % | | $ | 405,186 |
| | $ | 365,477 |
| | $ | 39,709 |
| | 10.9 | % | Attendance | | 8,677 |
| | 8,729 |
| | (52 | ) | | (0.6 | )% | | 20,652 |
| | 20,689 |
| | (37 | ) | | (0.2 | )% | Per capita spending | | $ | 42.17 |
| | $ | 40.24 |
| | $ | 1.93 |
| | 4.8 | % | | $ | 44.24 |
| | $ | 41.78 |
| | $ | 2.46 |
| | 5.9 | % | Out-of-park revenues | | $ | 48,110 |
| | $ | 45,266 |
| | $ | 2,844 |
| | 6.3 | % | | $ | 106,801 |
| | $ | 99,526 |
| | $ | 7,275 |
| | 7.3 | % |
Net revenues for the sixnine months ended June 30,September 29, 2013 increased $17.6$56.3 million to $403.4$995.5 million from $385.8$939.2 million during the sixnine months ended July 1,September 30, 2012. The increase in revenues reflects a 5%6%, or $1.93,$2.46, increase in average in-park guest per capita spending during the first sixnine months of the year when compared with the first sixnine months of 2012. In-park guest per capita spending represents the average 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 reflects a 4%5% increase in the admissions per capita spendingcap and a 5%6% increase in pure in-park spending, driven largely by improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Additionally, for the six-monthnine-month period, out-of-park revenues increased 6%7%, or $2.8$7.3 million. Out-of-park revenues include the sale of hotel rooms, food, merchandise, and other complementary activities located outside of the park gates, as well as transaction fees from on-line product sales. The increase in out-of-park revenues was primarily driven by the strong performance of our resort properties, which saw us drivedrove higher average daily room rates (ADR's) while maintaining or growing occupancy rates. The increase in overall net revenues also reflects a less than 1% decrease inincludes attendance that was essentially comparable through the first sixnine months of 2013 when compared with the same period a year ago. This decreaseThe variance in attendance is entirely attributable to the sale of thetwo non-core water park in the fourth quarter of 2012.parks. Excluding the sale of the water parks, attendance increased 1%, or 195,000 visits on a comparable park attendance was comparable to the same period last year.basis.
Revenues for the first sixnine months of the year also reflect the negative impact of exchange rates and the strengthening U.S. dollar on our Canadian operations ($0.23.6 million) during the period.
For the six-monthnine-month period in 2013, operating costs and expenses increased 1%3%, or $4.2$15.6 million, to $320.8$595.8 million from $316.6$580.2 million for the same period in 2012, the net result of a $0.4$7.5 million increase in operating expenses and a $4.3$10.0 million increase in selling, general and administrative costs.costs ("SG&A"). These cost increases were offset slightly by a $0.52%, or $1.9 million decrease in cost of goods sold during the period. The $0.4$7.5 million increase in operating expenses was due to an increaseincreases of approximately $4.3 million in employee costs, $3.2 million in operating supplies and $1.5 million in labor costs andmaintenance materials, offset slightly by a $1.7decrease of $2.7 million increase in operating supplies.insurance expense. The increase in laboremployee costs was primarily due to increased health-care insurance costs while operatingof benefits. Operating supplies increased due to new extra-charge attractions, uniforms, and expenses related to the premium benefit offerings.offerings and improved guest services. The increase$2.7 million decrease in operating costsinsurance expense was somewhat offset bydue to a reduction in insurance settlements and accruals. The $4.3$10.0 million increase in SG&A expenses was due primarily to additional marketing efforts and agency advertising costs, and increased full-time laboremployee costs, largely related to fullperformance incentives and an increase in staffing levels and performance incentives.levels.
Depreciation and amortization expense for the period decreased $1.2$3.9 million due to several significant assets being fully depreciated at the end of 2012. For the six-monthnine-month period of 2013, the $8.7 million gain on sale of other assets relates to the sale of one of our non-core water parks. For the period, loss on impairment/retirement of fixed assets was $0.6totaled $2.3 million reflectingfor the retirement of assets during the period at several of our properties. Loss on impairment/retirement of fixed assets for the period ended September 30, 2012 totaled $24.2 million, which reflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom, offset slightly by gains on other retirements. After depreciation, amortization, gain on sale of other assets, loss (gain) on impairment / retirement of fixed assets, and all other non-cash costs, operating income for the period increased $13.1$75.3 million to $31.1$297.9 million in the first halfnine months of 2013 from operating income of $18.0$222.6 million in the first halfnine months of 2012.
Interest expense for the first halfnine months of 2013 was $51.6$77.2 million, a decrease of $5.4$6.8 million from the first halfnine months of 2012. The decrease in interest expense was due to the settlement of our Canadian cross-currency swaps in the first quarter of 2012, the decrease in non-cash amortization expense dueresulting from the write-off of loan fees related to theour prior credit agreement, and a decrease in revolver interest due to lower average borrowings and a lower average cost due toeffective interest rate from the March 2013 refinancing.
The net effect of our swaps resulted in a non-cash charge to earnings of $6.9$8.3 million for the first halfnine months of 2013 compared with a $1.1$1.3 million non-cash benefit to earnings in the first halfnine months of 2012. The difference reflects 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 designated and de-designated swaps to market. During the current year-to-date period, we also recognized a $23.8$15.2 million net charge to earnings for unrealized/realized foreign currency gains,losses, which representedincluded a $14.4 million unrealized foreign currency loss on the U.S.-dollar denominated debt held at our Canadian property. Additionally, 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 current year-to-date period.
During the first halfnine months of 2013, a benefitprovision for taxes of $24.0$34.0 million was recorded to account for publicly traded partnership (“PTP”) taxes and the tax attributes of our corporate subsidiaries. During the same six monthnine-month period in 2012, a $10.2$41.8 million benefitprovision for taxes was recorded. Actual cash taxes paid or payable are estimated to be between $14 and $17 million for the 2013 calendar year.
After interest expense and the benefit for taxes, the net lossincome for the sixnine months ended June 30,September 29, 2013 totaled $61.7$128.7 million, or $1.11$2.31 per diluted limited partner unit, compared with a net lossincome of $28.8$112.2 million, or $0.52$2.01 per diluted unit, for the same period a year ago.
For the six-monthnine-month period, Adjusted EBITDA (as defined in the 2013 Credit Agreement), which we believe is a meaningful measure of our park-level operating results, increased to $86.8$405.2 million compared with $73.2$365.5 million for the fiscal six-monthnine-month period ended July 1,September 30, 2012. This increase was due to the growth in revenues produced in large part by the continued success of our premium benefit offerings, admissions sales and admission sales program,our food and beverage initiatives, offset slightly by an increase in employee related costs, advertising expenses, and advertising expenses.operating supply costs related to targeted initiatives which enhance our guests' experiences at our parks. 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 page 38.
Second
Third Quarter -
The fiscal three-month period ended June 30,September 29, 2013, consisted of a 13-week period and included a total of 8001,019 operating days compared with 1413 weeks and 9051,177 operating days for the fiscal three-month period ended July 1,September 30, 2012. The difference in operating days is due to the sale of atwo non-core water park in the fourth quarter of 2012parks, as well as the combiningcombination of two parks, Worlds of Fun and Oceans of Fun, into one gate during 2013.
The following table presents key financial information for the three months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | Three months ended | | Three months ended | | Increase (Decrease) | | Three months ended | | Three months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (13 weeks) | | (14 weeks) | | | | | | (13 weeks) | | (13 weeks) | | | | | | | | | (As restated) | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | | (Amounts in thousands) | Net revenues | | $ | 361,620 |
| | $ | 357,606 |
| | $ | 4,014 |
| | 1.1 | % | | $ | 592,076 |
| | $ | 553,445 |
| | $ | 38,631 |
| | 7.0 | % | Operating costs and expenses | | 218,104 |
| | 223,233 |
| | (5,129 | ) | | (2.3 | )% | | 274,964 |
| | 263,657 |
| | 11,307 |
| | 4.3 | % | Depreciation and amortization | | 46,032 |
| | 47,909 |
| | (1,877 | ) | | (3.9 | )% | | 57,495 |
| | 60,223 |
| | (2,728 | ) | | (4.5 | )% | Loss (gain) on impairment / retirement of fixed assets | | 29 |
| | (862 | ) | | 891 |
| | N/M |
| | Loss on impairment / retirement of fixed assets | | | 1,637 |
| | 25,000 |
| | (23,363 | ) | | N/M |
| Gain on sale of other assets | | | (8,743 | ) | | — |
| | (8,743 | ) | | N/M |
| Operating income | | $ | 97,455 |
| | $ | 87,326 |
| | $ | 10,129 |
| | 11.6 | % | | $ | 266,723 |
| | $ | 204,565 |
| | $ | 62,158 |
| | 30.4 | % | | | | | | | | | | | | | | | | | | Other Data: | | | | | | | | | | | | | | | | | Adjusted EBITDA | | $ | 144,077 |
| | $ | 134,962 |
| | $ | 9,115 |
| | 6.8 | % | | $ | 318,382 |
| | $ | 292,309 |
| | $ | 26,073 |
| | 8.9 | % | Attendance | | 7,872 |
| | 8,225 |
| | (353 | ) | | (4.3 | )% | | 11,975 |
| | 11,960 |
| | 15 |
| | 0.1 | % | Per capita spending | | $ | 42.36 |
| | $ | 40.32 |
| | $ | 2.04 |
| | 5.1 | % | | $ | 45.73 |
| | $ | 42.90 |
| | $ | 2.83 |
| | 6.6 | % | Out-of-park revenues | | $ | 37,576 |
| | $ | 35,878 |
| | $ | 1,698 |
| | 4.7 | % | | $ | 58,690 |
| | $ | 54,260 |
| | $ | 4,430 |
| | 8.2 | % |
For the quarter ended June 30,September 29, 2013, net revenues increased 1%7%, or $4.0$38.6 million, to $361.6$592.1 million from $357.6$553.5 million in the secondthird quarter of 2012. This increase reflects a 5%7% increase in average in-park per capita spending and a 5%an 8%, or $1.7$4.4 million, increase in out-of park revenues, offset slightly by a decrease of 4% in combined attendance.and attendance that was comparable with the prior year period. The increase in per capita spending was the result of higher admissions pricing, improvements in our food and beverage programs, and the successful expansion of our in-park premium benefit offerings.offerings, and improvements in our food and beverage programs. The increase in out-of-park revenues was due to the strong performance of our resort properties. The decrease inExcluding the sale our two non-core water parks, attendance for the second quarter was the direct result of fewer operating days in the period, the shift of the Easter and Spring Break holidays to the first quarter of 2013, and unfavorable short-term weather trends.increased 2%, or 207,000 visits on a comparable park basis.
Operating costs and expenses for the quarter decreased 2%increased 4%, or $5.1$11.3 million, to $218.1$275.0 million from $223.2$263.7 million in the secondthird quarter of 2012, the net result of a $1.4$1.5 million decrease in cost of goods sold, a $5.0$7.0 million decreaseincrease in operating expenses and a $1.3$5.7 million increase in SG&A costs. As a percentage of net revenues, costs and expenses decreased 120 basis points, and was in line with expectations. The decrease in cost of goods sold was primarily the result of successful cost-savings initiatives in food and beverage. The $5.0$7.0 million decreaseincrease in operating expenses was primarily due to lower employee-relateda $2.8 million increase in employee related costs, and maintenancea $1.6 million increase in operating supplies, and expenses.a $1.5 million increase in maintenance expense. The declineincrease in employee related costs was primarily due to the one less week of operations during the second quarter of 2013 compared with the second quarter of 2012, as well as reduced expenses related to the sale of one of our water parkshigher staffing levels, salary increases, and increases in November 2012. The decline in maintenancebenefit costs. Operating supplies wasincreased due to the timing of expenses due to the one less week in operations during the second quarter of 2013.premium benefit offerings and improved guest services. The $1.3$5.7 million increase in SG&A costs was due to increases in employee-related costs and agency advertising costs, offset somewhat by a decline in professional and administrative costs. The increase in SG&A employee-related expenses was due to improvementsan increase in staffing levels across the company,performance incentive awards due to strong 2013 operating results to date, as well as an increase in equity-related compensation due to unit price appreciation.staffing levels across the company. Advertising costs increased as a result of additional marketing efforts in the period.period, including our Customer Relationship Management platform.
Depreciation and amortization expense for the quarter decreased $1.9$2.7 million primarily due to several significant assets reaching the end of their depreciable lives at the end of 2012. For the third quarter of 2013, the gain on sale of other assets was $8.7 million, reflecting the gain on the sale of one of our non-core water parks. Loss on impairment/retirement of fixed assets for the current period was $1.6 million, reflecting losses on the retirement of assets across all of our parks. Loss on impairment/retirement of fixed assets during the quarter ended September 30, 2012 totaled $25.0 million, which reflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom. After depreciation, amortization, gain on sale of other assets, loss (gain) on impairment / retirement of fixed assets, and all other non-cash costs, operating income in the secondthird quarter of 2013 increased $10.1$62.1 million to $97.4$266.7 million from operating income of $87.3$204.6 million in the secondthird quarter of 2012.
Interest expense for the secondthird quarter of 2013 was $25.9$25.5 million, representing a $4.4$1.3 million decrease from the interest expense for the secondthird quarter of 2012. As mentioned in the six-monthnine-month discussion above, interest expense decreased primarily due to a reduction in average revolver balance and lower average rates on the revolver, as well as a reduction in non-cash deferred loan fee amortization resulting from the write-off of fees related to our prior credit agreement.
During the 2013 secondthird quarter, the net effect of our swaps resulted in a $2.3$1.4 million non-cash benefitcharge to earnings, compared to a non-cash benefit to earnings of $0.2 million in the secondthird quarter of 2012. The net effect of swaps reflects the regularly scheduled amortization of amounts in AOCI related to the swaps and ineffective fair value movements in our non-designated derivative portfolio. During the 2013 secondthird quarter, we also recognized a $14.9$8.6 million net chargebenefit to earnings for unrealized/realized foreign currency losses related to angains, which included a $8.5 million unrealized foreign currency lossgain on the U.S.-dollar denominated debt held at our Canadian property.
During the quarter, a provision for taxes of $11.7$58.0 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provision for taxes of $11.4$51.9 million in the same period a year ago. After interest expense and the provision for taxes, net income for the quarter totaled $47.4$190.4 million, or $0.85$3.41 per diluted limited partner unit, compared with net income of $36.6$141.0 million, or $0.66$2.52 per diluted unit, for the secondthird quarter a year ago.
For the current quarter, Adjusted EBITDA increased to $144.1$318.4 million from $135.0$292.3 million for the fiscal secondthird quarter of 2012. The approximate $9.1$26.1 million increase in Adjusted EBITDA was primarily duelargely attributable to incremental revenues resulting primarily from higher average guest per capita spending, as well as increases in out-of-park revenues in the quarter. Adjusted EBITDA in the second quarter also benefited from a reduction in operating expenses in the period, due to one less week of operationsThese revenue increases were somewhat offset by higher costs associated with improving guest services and one less water park in operation. expanding our marketing efforts.
Twelve Months Ended June 30,September 29, 2013 -
The fiscal twelve-month period ended June 30,September 29, 2013, consisted of a 52-week period and 2,2982,140 operating days compared with 53 weeks and 2,4922,416 operating days for the fiscal twelve-month period ended July 1,September 30, 2012. The difference in operating days was due primarily to anthe sale of two non-core water parks, the combination of two parks, Worlds of Fun and Oceans of Fun, into one gate during 2013, and the extra week of operations in the twelve monthtwelve-month period ending July 1,September 30, 2012.
The following table presents key financial information for the twelve months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (52 weeks) | | (53 weeks) | | | | | | (52 weeks) | | (53 weeks) | | | | | | | | | (As restated) | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | | (Amounts in thousands) | Net revenues | | $ | 1,086,069 |
| | $ | 1,102,917 |
| | $ | (16,848 | ) | | (1.5 | )% | | $ | 1,124,700 |
| | $ | 1,084,094 |
| | $ | 40,606 |
| | 3.7 | % | Operating costs and expenses | | 689,010 |
| | 700,446 |
| | (11,436 | ) | | (1.6 | )% | | 700,317 |
| | 701,915 |
| | (1,598 | ) | | (0.2 | )% | Depreciation and amortization | | 125,136 |
| | 130,416 |
| | (5,280 | ) | | (4.0 | )% | | 122,408 |
| | 127,191 |
| | (4,783 | ) | | (3.8 | )% | (Gain) on sale of other assets | | (6,625 | ) | | — |
| | (6,625 | ) | | N/M |
| | Gain on sale of other assets | | | (15,368 | ) | | — |
| | (15,368 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 31,735 |
| | 10,389 |
| | 21,346 |
| | N/M |
| | 8,372 |
| | 34,509 |
| | (26,137 | ) | | N/M |
| Operating income | | $ | 246,813 |
| | $ | 261,666 |
| | $ | (14,853 | ) | | (5.7 | )% | | $ | 308,971 |
| | $ | 220,479 |
| | $ | 88,492 |
| | 40.1 | % | N/M - Not meaningful | | | | | | | | | | | | | | | | | Other Data: | | | | | | | | | | | | | | | | | Adjusted EBITDA | | $ | 404,590 |
| | $ | 411,007 |
| | $ | (6,417 | ) | | (1.6 | )% | | $ | 430,663 |
| | $ | 393,612 |
| | $ | 37,051 |
| | 9.4 | % | Adjusted EBITDA margin | | 37.3 | % | | 37.3 | % | | — |
| | — | % | | 38.3 | % | | 36.3 | % | | — |
| | 2.0 | % | Attendance | | 23,248 |
| | 24,934 |
| | (1,686 | ) | | (6.8 | )% | | 23,263 |
| | 23,961 |
| | (698 | ) | | (2.9 | )% | Per capita spending | | $ | 42.67 |
| | $ | 40.40 |
| | $ | 2.27 |
| | 5.6 | % | | $ | 44.13 |
| | $ | 41.44 |
| | $ | 2.69 |
| | 6.5 | % | Out-of-park revenues | | $ | 119,611 |
| | $ | 124,394 |
| | (4,783 | ) | | (3.8 | )% | | $ | 124,041 |
| | $ | 119,460 |
| | 4,581 |
| | 3.8 | % |
Net revenues totaled $1,086.11,124.7 million for the twelve months ended June 30,September 29, 2013, decreasingincreasing $16.840.6 million, from $1,102.91,084.1 million for the trailing twelve months ended July 1,September 30, 2012. The 2% decrease4% increase in revenues for the twelve-month period was primarily due to the extra week of operationsdriven by a 7% increase in the prior year's twelve month period. For the current twelve month period,average in-park guest per capita spending, increased 6%, onthe result of a stronger admissions per capita spendingcap and improved pure in-park spending. The increase in pure in-park spending which was driven largely byin large part the result of improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Attendance for the period decreased between
years due primarily to the extra week of operations in the twelve-month period ended July 1, 2012.September 30, 2012, as well as the sale of two non-core water parks during the current year period. Out-of-park revenues increased $4.6 million primarily due to an increase in processing fees as part of our expansion of ticketing options. The decreaseincrease in net revenues for the twelve months ended June 30,September 29, 2013 also reflects the negative impact of currency exchange rates and the weakening Canadian dollar on our Canadian operations (approximately $3.7$3.2 million) during the period.
Operating costs and expenses decreased $11.4$1.6 million, or 2%less than 1%, to $689.0$700.3 million, in large part due to one less week of operations in the current twelve-month period, and were in line with expectations. The decrease in costs and expenses reflects a $2.8$2.9 million decrease in cost of goods sold and a $6.4$1.2 million decrease in operating expenses, anddue primarily to the one less week in the period. These year-over-year cost decreases were partially offset by a $2.2 decrease$2.6 million increase in SG&A costs. The increase in SG&A costs reflects a $2.8 million increase in employment-related costs related to higher staffing levels and incentive compensation plans tied to company performance and a $3.0 million increase in advertising costs related to the transition to a new advertising agency, somewhat offset by a $2.6 decrease in professional and administrative costs, the result of reductions in litigation expenses and consulting fees in the period. The overall decrease in costs and expenses also reflects the impact of exchange rates on our Canadian operations ($0.61.0 million) during the period.
For the twelve-month period ending September 29, 2013, the gain on sale of other assets was $15.4 million, reflecting the gain on the sale of two non-core water parks during the period. Loss on impairment/retirement of fixed assets net,for the period was $8.4 million, due to the removal of a ride to enhance a section of one of our parks, as well as retirements of assets across all of our properties. Loss on impairment/retirement of fixed assets during the period ended September 30, 2012 totaled $31.7$34.5 million, which reflectsreflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom along with losses on other retirements. During the twelve-month period ended June 30, 2013, two non-core assets were sold at gains totaling $6.6 million. During the twelve-month period ended July 1, 2012, aand an $8.8 million charge of $10.4 million for the retirement of fixed assets was recorded,an asset which includes the retirement of the asset asis further described in Note 11 to the financial statements.
Depreciation and amortization expense for the period decreased $5.3$4.8 million compared with the prior period due primarily to several significant assets being fully depreciated at the end of 2012. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for the current period decreased $14.9increased $88.5 million to $246.8$309.0 million from $261.7$220.5 million.
Interest expense for the twelve months ended June 30,September 29, 2013 decreased $25.7$12.5 million to $105.2$103.9 million, from $130.9$116.4 million for the same twelve-month period a year ago. The reductiondecrease in interest expense was primarily attributablereflects a decrease in revolver interest in the period due to an approximate 300 basis point (bps) declinelower borrowings and a lower average cost resulting from the March 2013 refinancing, a decrease in non-cash amortization expense resulting from the write-off of loan fees related to our effective interest rate,prior credit agreement, and the result of lower fixed rates on London InterBank Offered Rate (LIBOR) within our interest-rate swap contracts. Additionally during the current period, the average outstanding balanceimpact of the revolver, as well assettlement of our Canadian cross-currency swaps in the average borrowing rate on the revolver, both declined resulting in lower interest expense.first quarter of 2012.
During the current twelve-month period, the net effect of our interest rate swaps was recorded as a charge to earnings of $6.6$8.1 million compared to a benefit to earnings of $14.7$10.9 million in the prior twelve-month period. The difference reflects the regularly scheduled amortization of amounts in AOCI and write-off of amounts related to de-designated 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 period, we also recognized a $13.7$20.2 million charge to earnings for unrealized/realized foreign currency losses, which included a $13.9$19.4 million unrealized foreign currency loss 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.
A provision for taxes of $17.9$24.0 million was recorded in the period for the tax attributes of our corporate subsidiaries and PTP taxes. This compares with a provision for taxes of $13.8$27.9 million in twelve-month period ended July 1, 2012 for the tax attributes of our corporate subsidiaries and PTP taxes.September 30, 2012.
After interest expense and provision for taxes, net income for the period totaled $69.0$118.4 million, or $1.24$2.12 per diluted limited partner unit, compared with net income of $117.1$105.9 million, or $2.10$1.89 per diluted unit, a year ago.
As discussed above, the current twelve-monthtrailing-twelve-month results include one less week of operations due to the timing of the secondthird quarter fiscal close. Comparing the twelve-month periods for both 2013 and 2012 on a comparable 52-week basis, net revenues would be up approximately $37.3$55.1 million, or 4%5%, on increases in both average in-park guest per capita spending and out-of- parkout-of-park revenues, partially offset by a slight decline in attendance. The increase in average in-park guest per capita spending is primarily due to a higher admissions per capita spendingcap and improved pure in-park spending, which was driven largely by improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Out-of-park revenues would have increased $0.7$6.3 million primarily due to an increase in transaction fees from on-line ticket sales. Attendance for the comparable period would have decreased 404,000351,000 visits, primarily due to soft attendance during the fourth quarter of 2012 compared with the fourth quarter of 2011.
On a comparable 52-week basis, operating costs and expenses would have increased approximately $10.1$9.1 million, the net result of a $1.7$1.9 million increasedecrease in cost of goods sold, a $7.4$6.2 million increase in operating expenses and a $1.0$4.8 million increase in SG&A costs. The increase in operating expenses was primarily attributable to an increase in employment-related expenses of $7.0$3.3 million, a $4.7$3.9 million increase in operating supply costs, a $1.9 million increase in property and other non-income taxes, and a $1.4$1.6 million increase in utility costs. Somewhat offsetting these operating-expense increases were decreases in maintenance expenses of $5.0$3.5 million and insurance expenses of $3.3$1.6 million. The increase in employment-related costs was largely due to higher benefit costs and increased seasonal labor hours resulting from expanded operating hours at several parks, the introduction of additional attractions and enhanced guest services at our parks. Operating supply costssupplies increased due largely to the introduction of new extra-charge attractions and incremental expenses related to our expanded premium benefit offerings. Property taxes increased due to the timing
of the receipt of a refund at one of our parks in the trailing-twelve-month period ended July 1, 2012, while utilityUtility costs increased primarily due to rate increases and the addition of new rides and attractions at the parks. The increase in SG&A costs for the period reflects a $3.1$3.4 million increase in employment-related costs due to higher staffing levels and bonusincentive compensation plans tied to company performance, and a $1.9$4.0 million increase in advertising costs related to the transition to a new advertising agency, and a $1.3 million increase in operating supplies, largely related to the expansion of our e-commerce platform.agency. Somewhat offsetting these SG&A cost increases was a $4.6$2.5 million decrease in professional and administrative costs primarily due to reductions in litigation expenses and consulting fees in the period.
Adjusted EBITDA for the twelve-month period ended June 30,September 29, 2013, decreased $6.4increased $37.1 million, or 2%9%, to $404.6$430.7 million. This decrease was due to the one fewer operating week in the current twelve-month period. On a same-week basis, Adjusted EBITDA for the twelve-month period would have increased approximately $26.1$40.9 million, or 7%11%. On a same-week basis, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased 120190 bps to 37.3%38.3% from 36.1%36.4% for the twelve-month period ended June 30,September 29, 2013, primarily due to an increase in revenues resulting from the continued success of high-margin revenues initiatives as our new premium guest benefit offerings and theour admission pricing, program combined with continued focus on controlling operating costs.
JulyOctober 2013 -
Based on preliminary results, through August 4, 2013, net revenues through November 3, 2013 were approximately $712$1,104 million, up 5%6%, or $36$65 million, compared with $676$1,039 million for the same period last year. The increase was athe result of an approximate 5%6%, or $2.24,$2.31, increase in average in-park guest per capita spending to $43.47,a record $44.33, and aan approximate 7%, or $5$8 million increase, in out-of-park revenues to $78$117 million. These increases were slightly offset by a less than one percent, or 52,000-visit, decreaseAlso contributing to revenue growth was an increase in attendance to 15.0 million visits.of 100,000 visits, compared with last year. Excluding the sale of two water park sold in 2012,parks, attendance was up 1%2%, or 75,000334,000 visits, when compared with this time last year.to a record 22.7 million visits on a comparable park basis.
Liquidity and Capital Resources: With respect to both liquidity and cash flow, we ended the secondthird quarter of 2013 in sound condition. The negative working capital ratio (current liabilitiesassets divided by current assets)liabilities) of 1.21.5 at June 30,September 29, 2013 reflects the impact of our seasonal business. Cash, receivablesReceivables, inventories, and inventoriespayables are at normal seasonal levels and credit facilities arelevels. Operating Activities During the nine-month period ended September 29, 2013, net cash provided by operating activities increased $40.2 million from the same period a year ago, primarily due to the year-over-year growth in placerevenues. For the twelve-month period ended September 29, 2013 net cash provided by operating activities increased $52.3 million from the same period a year ago, also reflective of the year-over-year growth in revenues. Investing Activities Net cash used in investing activities in the first nine months of 2013 was $82.2 million, an increase of $7.6 million compared with the nine month period ended September 30, 2012. Within investing activities, capital expenditures increased $21.7 million. During the current period, $15.3 million was received for the sale of a non-core waterpark. Net cash used in investing activities for the trailing-twelve-month period ended September 29, 2013 totaled $86.6 million compared with $91.9 million for the same period a year ago. The decrease reflects the receipt of $30.2 million from the sale of two non-core water parks during the period, offset somewhat by a $23.6 million increase in capital expenditures. Financing Activities Net cash used in financing activities in the first nine months of 2013 was $130.1 million, a decrease of $12.3 million compared with the nine-month period ended September 30, 2012. The decrease was due to funda one-time cash cost of $50.5 million to settle our Canadian derivative in the first quarter of 2012, offset somewhat by an increase in distributions paid in the current liabilities.year of $37.9 million. Net cash used in financing activities in the trailing-twelve-month period ended September 29, 2013 totaled $150.6 million, a decrease of $31.2 million compared with the twelve-month period ended September 30, 2012. The decrease was due to the $50.5
million Canadian derivative settlement in 2012, offset somewhat by an increase in distributions paid of $21.4 million in the current twelve-month period. 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 was scheduled to mature in December of 2017 and bore interest at a rate of LIBOR plus 300 bps, with a LIBOR floor of 100 bps.
The Amended 2010 Credit Agreement also included 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, was scheduled to mature in July of 2015, also provided for the issuance of documentary and standby letters of credit.
In March 2013,we issued $500 million of 5.25% 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 2013 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 include a revolving credit facility of a combined $255 million. Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility has a limit of $15 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 50 bps per annum on the unused portion of the credit facilities.
At the end of the quarter, we had a total of $628.4 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $901.4 million of fixed-rate debt (including OID), $58.0 million outstanding borrowings under our revolving credit facility, and cash on hand of $43.6 million. After letters of credit, which totaled $16.4 million at June 30, 2013, we had $180.6 million of available borrowings under the revolving credit facility under the 2013 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%.
In February 2011, we amended our 2010 Credit Agreement (as so amended, the "Amended 2010 Credit Agreement") to provide a $1,175 million senior secured term loan facility with interest at a rate of LIBOR plus 300 bps along with a LIBOR floor of 100 bps. The amendment extended the maturity date of the term loan portion of the credit facilities to December 2018. The Amended 2010 Credit Agreement also included 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 was scheduled to mature in July of 2015, also provided for the issuance of documentary and standby letters of credit.
In March 2013, we issued $500 million of 5.25% senior unsecured notes, maturing in 2021, in a private placement, with no OID. 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%.
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 2013 Credit Agreement were used to repay in full all amounts outstanding under the Amended 2010 Credit Agreement. 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 include a revolving credit facility of a combined $255 million. The Canadian portion of the revolving credit facility has a limit of $15 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 50 bps per annum on the unused portion of the credit facilities. At the end of the quarter, we had a total of $628.4 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $901.6 million of fixed-rate debt (including OID), no outstanding borrowings under our revolving credit facility, and cash on hand of $183.5 million. After letters of credit, which totaled $16.4 million at September 29, 2013, we had $238.6 million of available borrowings under the revolving credit facility. In order to maintainlock in fixed interest costs on a portion of our domestic term debt, in September 2010 we entered into several forward-starting swap agreements ("September 2010 swaps") to effectively convert a total of $600 million of variable-rate debt to fixed rates beginning in October 2011. As a result of the February 2011 amendment to the 2010 Credit Agreement, the LIBOR floor on the term loan portion of its 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 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 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 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 was 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 (together referred to as the "Combination 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 swapsCombination Swaps were jointly designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.33%. At the time of the de-designation, the fair market value of the September 2010 swaps and March 2011 swaps was $22.2 million, which will be amortized out of AOCI into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive income through 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. During the third quarter of 2013, the Combination Swaps were de-designated as the hedge effectiveness testing indicated that these swaps would be ineffective throughout the remaining periods until maturity. This de-designation had no effect on the unaudited condensed consolidated statements of operations as previous amounts recorded in AOCI had already been accounted for on March 6, 2013. During the third quarter of 2013, the Partnership entered into three forward-starting interest rate swap agreements ("2013 forwards") that will effectively convert $400 million of variable-rate debt to fixed rates beginning in December of 2015. These swaps, which were designated as cash flow hedges, mature on December 31, 2018 and fix LIBOR at a weighted average rate of 3.00%. In October 2013, the Partnership entered into an additional forward-starting interest rate swap agreement ("October 2013 swaps") that will effectively convert $100 million of variable-rate debt to a 2.70% fixed rate beginning in December of 2015. At June 30,September 29, 2013, the fair market value of the September 2010 swaps, the March 2011 swaps and the March 2013 swapsderivative portfolio was a liability of $20.131.6 million, which was recorded in “Derivative Liability” on the condensed consolidated balance sheet. The May 2011 swaps had a fair market value of $6.7 million as of June 30, 2013 and was recorded in “Derivative Liability” on the condensed consolidated balance sheet.
The following table presents our September 20102013 forwards and the October 2013 swaps March 2011 swaps,which mature in December 2018, and the Combination Swaps and May 2011 swaps, and March 2013 swaps which mature December 15, 2015, along with their notional amounts and their fixed interest rates. | | | Interest Rate Swaps | Interest Rate Swaps | (
The 2013 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,and not cured, 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 secondthird quarter of 2013, this ratio was set at 6.25x 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 June 30,September 29, 2013, our Consolidated Leverage Ratio was 3.813.57x, providing $157.0184.1 million of EBITDA cushion on the ratio at the end of the secondthird quarter. We were in compliance with all other covenants under the 2013 Credit Agreement as of June 30,September 29, 2013. The 2013 Credit Agreement allows restricted payments of up to $60 million so long as no default or event of default has occurred and is continuing. Additional 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 5.0x, measured on a trailing-twelve-month quarterly basis. At June 30,September 29, 2013, the notes maturing in 2018 have the more restrictive covenants than the 2021 notes.covenants. 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 2013 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 MayAugust 8, 2013, we announced the declaration of a distribution of $0.625 per limited partner unit, which was paid on June 17,September 16, 2013, and on August 8,November 7, 2013 we announced the declaration of a distribution of $0.625$0.70 per limited partner unit, payable SeptemberDecember 16, 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 $16.4 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of June 30,September 29, 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 June 30,September 29, 2013, we had $901.4$901.6 million of fixed-rate senior unsecured notes and $628.4 million of variable-rate term debt. After considering the impact of interest rate swap agreements, virtually all of our outstanding long-term debt represents fixed-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $35$31 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt, after the fixed-rate swap agreements, would lead to a decrease of approximately $0.7 million in annual cash interest costs. A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $3.9$3.7 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 June 30,September 29, 2013, the Partnership's management has evaluated the effectiveness of the design and operation of the Partnership's disclosure controls and procedures under supervision of management, and 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 were effective as of June 30, 2013.September 29, 2013.
(b)Changes in Internal Control Over Financial Reporting - There were no changes in the Partnership’s internal control over financial reporting that occurred during the fiscal quarter ended June 30,September 29, 2013 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. On April 19, 2013 the Court of 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. On June 3, 2013 the Company filed a Notice of Appeal and Memorandum in Support of Jurisdiction with the Ohio Supreme Court related to the April 19, 2013 Court of Appeals decision. On July 2, 2013 Mr. Falfas filed a Memorandum in Opposition to Jurisdiction with the Ohio Supreme Court. TheOn September 25, 2013 the Supreme Court will review the jurisdictional memoranda filed and determine whether to acceptof Ohio accepted the appeal on Proposition of Law No. 1 related to the Supreme Court’s holding in Masetta v. National Bronze & Aluminum Foundry Co. 159 Ohio St. 306 (1953), barring specific performance as a remedy for a personal services contract under Ohio law and decide the caseits applicability to individual employment agreements. The matter will now proceed on the merits.merits and both sides will have the opportunity to file briefs with the court in support of their respective arguments. The Partnership believes the liability recorded
as of June 30,September 29, 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 ourthe Partnership's Annual Report on Form 10-K for the year ended December 31, 2012.
ITEM 5. OTHER INFORMATION
On May 8, 2013, the Partnership announced that it had identified a historical classification error in the Partnership'sits initial determination of whether a specific asset retired under the composite method of depreciation was normal or unusual. The error resulted in the overstatement of Income before taxes of $8.8 million for the period 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 would 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 beingthat was 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 substantial net book value and/or if the retirement caused a deviation from the estimated composite depreciation survivor curve as well as other minor qualitative issues.
The restatement amount of $8.8 million iswas recorded in Loss on impairment / retirement of fixed assets, net in the Annual Report on Form 10-K/A filing to correct the previous error.
As disclosed in the Partnership's prior filings, the Partnership 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 be recorded in the Consolidated Statements of Operations and Comprehensive Income.
ITEM 6. EXHIBITS | | | | Exhibit (10.1) | | Amendment No. 1 dated September 30, 2013 to the 2013 Credit Agreement dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with Matthew A. Ouimet, dated October 21, 2013. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013. | | | | 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 June 30,September 29, 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: | August 8,November 7, 2013 | /s/ Matthew A. Ouimet | | | Matthew A. Ouimet | | | President and Chief Executive Officer | | | | | Date: | August 8,November 7, 2013 | /s/ Brian C. Witherow | | | Brian C. Witherow | | | Executive Vice President and | | | Chief Financial Officer |
INDEX TO EXHIBITS | | | | Exhibit (10.1) | | Amendment No. 1 dated September 30, 2013 to the 2013 Credit Agreement dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with Matthew A. Ouimet, dated October 21, 2013. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013. | | | | 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 June 30,September 29, 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) | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | LIBOR Rate | Notional Amounts | | LIBOR Rate | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 2.27 | % | | 50,000 |
| | 2.54 | % | $ | 200,000 |
| | 3.00 | % | | $ | 200,000 |
| | 2.27 | % | | 75,000 |
| | 2.30 | % | | 30,000 |
| | 2.54 | % | 100,000 |
| | 3.00 | % | | 150,000 |
| | 2.43 | % | | 50,000 |
| | 2.29 | % | | 70,000 |
| | 2.54 | % | 100,000 |
| | 3.00 | % | | 75,000 |
| | 2.30 | % | | 150,000 |
| | 2.43 | % | | 50,000 |
| | 2.54 | % | | | | | 70,000 |
| | 2.54 | % | | 50,000 |
| | 2.29 | % | | | | | | | | | 50,000 |
| | 2.54 | % | | 50,000 |
| | 2.43 | % | | | | | | | | | 50,000 |
| | 2.54 | % | | 25,000 |
| | 2.30 | % | | | | | | | | | 50,000 |
| | 2.43 | % | | | | | | | 50,000 |
| | 2.29 | % | | | | | | | 50,000 |
| | 2.29 | % | | | | | | | 30,000 |
| | 2.54 | % | | | | | | | 25,000 |
| | 2.30 | % | Total
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the three-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps | | $ | — |
| | $ | (2,866 | ) | | Interest Expense | | $ | — |
| | $ | (3,221 | ) | | Net effect of swaps | | $ | 3,268 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | (5,483 | ) | | $ | 438 |
| | Interest Expense | | $ | — |
| | $ | (2,990 | ) | | Net effect of swaps | | $ | — |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (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 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps (1) | | Net effect of swaps | | 992 |
| | — |
| | | | | $ | 992 |
| | $ | — |
| | | | | | | |
| | | | | | | | | | | | (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 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps (1) | | Net effect of swaps | | 609 |
| | — |
| | | | | $ | 609 |
| | $ | — |
| | | | | | | |
| | (1) | The May 2011 interest rate swaps were de-designated in March 2013. The Combination Swaps were de-designated in July 2013. |
During the quarter ended June 30,September 29, 2013, in addition to gains of $3.3 million and $1.00.6 million 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), $2.0 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 these amounts resulted in a benefitcharge to earnings of $2.31.4 million recorded in “Net effect of swaps.”
For the three-month period ended July 1,September 30, 2012, $0.2 million of expenseincome representing the amortization of amounts in AOCI was recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The effect of this amortization resulted in a benefit to earnings of $0.2 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the six-monthnine-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | Six months ended | | Six months ended | | | | Six months ended | | Six months ended | | | | Six months ended | | Six months ended | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps | | $ | 2,266 |
| | $ | (2,746 | ) | | Interest Expense | | $ | (2,797 | ) | | $ | (6,014 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | (3,217 | ) | | $ | (2,308 | ) | | Interest Expense | | $ | (2,797 | ) | | $ | (9,004 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Six months ended | | Six months ended | | | | 6/30/13 | | 7/1/12 | 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 | | (479 | ) | | — |
| | | | | $ | (479 | ) | | $ | 1,279 |
| | | | | | | |
| | | | | | | | | | | | (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 | | | | 9/29/13 | | 9/30/12 | 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 | | 130 |
| | — |
| | | | | $ | 130 |
| | $ | 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. The Combination Swaps were de-designated in July 2013. |
During the six-monthnine-month period ended June 30,September 29, 2013, in addition to the $3.7 million gain recognized in income on the ineffective portion of derivatives and $0.50.1 million lossgain on the derivatives not designated as cash flow hedges (as noted in the tables above), $7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $2.34.3 million of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the quarter.period. The effect of these amounts resulted in a charge to earnings of $6.98.3 million recorded in “Net effect of swaps.”
For the six-monthnine-month period ended July 1,September 30, 2012, in addition to the $1.3 million gain recognized in income on the ineffective portion of derivatives noted in the tables above, $0.40.2 million of expense representing the amortization of amounts in AOCI for the swaps and $0.2 million of foreign currency gain in the quarterperiod 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 $1.11.3 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 June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps | | $ | 5,152 |
| | $ | (18,396 | ) | | Interest Expense | | $ | (8,810 | ) | | $ | (9,037 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | 20,193 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | (769 | ) | | $ | (873 | ) | | Interest Expense | | $ | (5,820 | ) | | $ | (12,027 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | 4,797 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (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 | | | | 6/30/13 | | 7/1/12 | Cross-currency swaps (1) | | Net effect of swaps | | — |
| | 9,139 |
| Foreign currency swaps | | Net effect of swaps | | — |
| | (3,081 | ) | Interest rate swaps (2) | | Net effect of swaps | | $ | (479 | ) | | $ | — |
| | | | | $ | (479 | ) | | $ | 6,058 |
| | | | | | | |
| | | | | | | | | | | | (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 | | | | 9/29/13 | | 9/30/12 | Cross-currency swaps (1) | | Net effect of swaps | | — |
| | (4,483 | ) | Foreign currency swaps | | Net effect of swaps | | — |
| | 10,129 |
| Interest rate swaps (2) | | Net effect of swaps | | $ | 130 |
| | $ | — |
| | | | | $ | 130 |
| | $ | 5,646 |
| | | | | | | |
| | (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. The Combination Swaps were de-designated in July 2013. |
In addition to the $3.7 million gain recognized in income on the ineffective portion of derivatives and $0.50.1 million lossgain recognized in income on the ineffective portion of derivatives not designated as cash flow hedges (as noted in the tables above), $7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $2.04.1 million of expense representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended June 30,September 29, 2013 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 $6.68.1 million recorded in “Net effect of swaps.” For the twelve monthtwelve-month period ending July 1,September 30, 2012, in addition to the $20.24.8 million gain recognized in income on the ineffective portion of derivatives designated as derivatives and $6.15.6 million of gain recognized in income on the ineffective portion of derivatives not designated as derivatives noted in the tables above, $11.30.1 million of expenseincome representing the amortization of amounts in AOCI for the swaps and a $0.30.4 million foreign currency lossgain in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended July 1,September 30, 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 $14.710.9 million recorded in “Net effect of swaps.” The amounts reclassified from AOCI into income for the periods noted above are primarily 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 June 30,September 29, 2013, December 31, 2012, and July 1,September 30, 2012 on a recurring basis: | | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | June 30, 2013 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (20,122 | ) | | $ | — |
| | $ | (20,122 | ) | | $ | — |
| Interest rate swap agreements (2) | | (6,650 | ) | | — |
| | (6,650 | ) | | — |
| Net derivative liability | | $ | (26,772 | ) | | $ | — |
| | $ | (26,772 | ) | | $ | — |
| | | | | | | | | | December 31, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | July 1, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (35,146 | ) | | $ | — |
| | $ | (35,146 | ) | | $ | — |
| Net derivative liability | | $ | (35,146 | ) | | $ | — |
| | $ | (35,146 | ) | | $ | — |
|
| | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | September 29, 2013 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (5,483 | ) | | $ | — |
| | $ | (5,483 | ) | | $ | — |
| Interest rate swap agreements (2) | | (26,163 | ) | | — |
| | (26,163 | ) | | — |
| Net derivative liability | | $ | (31,646 | ) | | $ | — |
| | $ | (31,646 | ) | | $ | — |
| | | | | | | | | | December 31, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | September 30, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| Net derivative liability | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
|
| | (1) | Designated as cash flow hedges and are included in “Derivative Liability” on the Unaudited Condensed Consolidated Balance Sheet |
| | (2) | Not designated as cash flow hedges and are included in "Derivative Liability" on the Unaudited Condensed Consolidated Balance Sheet |
Fair values of the interest rate swap agreements are determined using significant inputs, including the LIBOR 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 $0.70.9 million as of June 30,September 29, 2013. The carrying value of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximates fair value because of the short maturity of these instruments. There were no assets measured at fair value on a non-recurring basis at June 30,September 29, 2013 or July 1,September 30, 2012, 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. The fair value of term debt at June 30,September 29, 2013 was approximately $630.0627.6 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 June 30,September 29, 2013 was approximately $913.2922.0 million based on public trading levels as of that date. The fair value of the term debt was based on Level 2 inputs and the notes were based on Level 1 inputs.
(8) Earnings per Unit: Net income (loss) per limited partner unit is calculated based on the following unit amounts: | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Six months ended | Twelve months ended | | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | 6/30/2013 | | 7/1/2012 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,484 |
| | 55,481 |
| | 55,464 |
| | 55,433 |
| 55,446 |
| | 55,389 |
| Effect of dilutive units: | | | | | | | | | | | | Unit options and restricted unit awards | | 152 |
| | 2 |
| | — |
| | — |
| 84 |
| | 3 |
| Phantom units | | 186 |
| | 335 |
| | — |
| | — |
| 261 |
| | 452 |
| Diluted weighted average units outstanding | | 55,822 |
| | 55,818 |
| | 55,464 |
| | 55,433 |
| 55,791 |
| | 55,844 |
| Net income (loss) per unit - basic | | $ | 0.85 |
| | $ | 0.66 |
| | $ | (1.11 | ) | | $ | (0.52 | ) | $ | 1.24 |
| | $ | 2.11 |
| Net income (loss) per unit - diluted | | $ | 0.85 |
| | $ | 0.66 |
| | $ | (1.11 | ) | | $ | (0.52 | ) | $ | 1.24 |
| | $ | 2.10 |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | Twelve months ended | | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | 9/29/2013 | | 9/30/2012 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,485 |
| | 55,611 |
| | 55,472 |
| | 55,473 |
| 55,460 |
| | 55,440 |
| Effect of dilutive units: | | | | | | | | | | | | Unit options and restricted unit awards | | 189 |
| | 45 |
| | 146 |
| | 42 |
| 120 |
| | 31 |
| Phantom units | | 189 |
| | 336 |
| | 185 |
| | 333 |
| 224 |
| | 416 |
| Diluted weighted average units outstanding | | 55,863 |
| | 55,992 |
| | 55,803 |
| | 55,848 |
| 55,804 |
| | 55,887 |
| Net income per unit - basic | | $ | 3.43 |
| | $ | 2.54 |
| | $ | 2.32 |
| | $ | 2.02 |
| $ | 2.13 |
| | $ | 1.91 |
| Net income per unit - diluted | | $ | 3.41 |
| | $ | 2.52 |
| | $ | 2.31 |
| | $ | 2.01 |
| $ | 2.12 |
| | $ | 1.89 |
| | | | | | | | | | | | |
The effect of unit options on the three, sixnine and twelve months ended June 30,September 29, 2013, had they not been out of the money or antidilutive, would have been zero, 8,9007,000, and 8,5004,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three, sixnine and twelve months ended July 1,September 30, 2012, had they not been out of the money or antidilutive, would have been 66,000, 31,00034,000 and 41,50036,000 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. 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. As of the secondthird quarter of 2013 the Partnership has recorded $1.1 million of 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) Restatement:
We haveThe Partnership has made the following correction relating to ourits use of the composite depreciation method.
This correction, which impacts the Balance Sheet at July 1,September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three, six,three-, nine-, and twelve monthtwelve-month periods ended July 1,September 30, 2012, reflects a subsequent determination that a disposition from ourthe Partnership's 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 reviewed in connection with respondinga response to an SEC comment letter. WeThe Partnership ultimately concluded that such disposition was unusual and that an $8.8 million charge should be reflected in the 2011 financial statements.
The tables below reflect the impact on the financial statements of the correction as described above.
| | | | | Balance Sheet | | (In thousands) | 7/1/2012 | Accumulated depreciation | | As filed | $ | (1,111,530 | ) | Correction | (8,369 | ) | As restated | $ | (1,119,899 | ) | Total assets | | As filed | $ | 2,141,898 |
| Correction | (8,369 | ) | As restated | $ | 2,133,529 |
| Deferred Tax Liability | | As filed | $ | 137,288 |
| Correction | (3,180 | ) | As restated | $ | 134,108 |
| Limited Partners' Equity | | As filed | $ | 93,946 |
| Correction | (5,189 | ) | As restated | $ | 88,757 |
|
| | | | | Balance Sheet | | (In thousands) | 9/30/2012 | Accumulated depreciation | | As filed | $ | (1,175,744 | ) | Correction | (7,845 | ) | As restated | $ | (1,183,589 | ) | Total assets | | As filed | $ | 2,089,837 |
| Correction | (7,845 | ) | As restated | $ | 2,081,992 |
| Deferred Tax Liability | | As filed | $ | 143,094 |
| Correction | (2,981 | ) | As restated | $ | 140,113 |
| Limited Partners' Equity | | As filed | $ | 212,797 |
| Correction | (4,864 | ) | As restated | $ | 207,933 |
|
| | | | | | | | | | | | | | Statements of Operations and Other Comprehensive Income | (In thousands except per unit amounts) | | Three months ended | | Six months ended | | Twelve months ended | | | 7/1/2012 | | 7/1/2012 | | 7/1/2012 | Depreciation and amortization | | | | | | | As filed | | $ | 48,330 |
| | $ | 52,409 |
| | $ | 130,837 |
| Correction | | (421 | ) | | (421 | ) | | (421 | ) | As restated | | $ | 47,909 |
| | $ | 51,988 |
| | $ | 130,416 |
| Loss (gain) on impairment / retirement of fixed assets, net | | | | | | | As filed | | $ | (862 | ) | | $ | (770 | ) | | $ | 1,599 |
| Correction | | — |
| | — |
| | 8,790 |
| As restated | | $ | (862 | ) | | $ | (770 | ) | | $ | 10,389 |
| Income (loss) before tax | | | | | | | As filed | | $ | 47,543 |
| | $ | (39,411 | ) | | $ | 139,267 |
| Correction | | 421 |
| | 421 |
| | (8,369 | ) | As restated | | $ | 47,964 |
| | $ | (38,990 | ) | | $ | 130,898 |
| Provision (benefit) for taxes | | | | | | As filed | | $ | 11,221 |
| | $ | (10,318 | ) | | $ | 16,970 |
| Correction | | 160 |
| | 160 |
| | (3,180 | ) | As restated | | $ | 11,381 |
| | $ | (10,158 | ) | | $ | 13,790 |
| Net income (loss) | | | | | | As filed | | $ | 36,322 |
| | $ | (29,093 | ) | | $ | 122,297 |
| Correction | | 261 |
| | 261 |
| | (5,189 | ) | As restated | | $ | 36,583 |
| | $ | (28,832 | ) | | $ | 117,108 |
| | | | | | | | Basic earnings per limited partner unit: | | | | | | As filed | | $ | 0.65 |
| | $ | (0.52 | ) | | $ | 2.21 |
| Correction | | 0.01 |
| | — |
| | (0.10 | ) | As restated | | $ | 0.66 |
| | $ | (0.52 | ) | | $ | 2.11 |
| | | | | | | | Diluted earnings per limited partner unit: | | | | | | As filed | | $ | 0.65 |
| | $ | (0.52 | ) | | $ | 2.19 |
| Correction | | 0.01 |
| | — |
| | (0.09 | ) | As restated | | $ | 0.66 |
| | $ | (0.52 | ) | | $ | 2.10 |
|
| | | | | | | | | | | | | | Statements of Operations and Other Comprehensive Income | (In thousands except per unit amounts) | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/30/2012 | | 9/30/2012 | | 9/30/2012 | Depreciation and amortization | | | | | | | As filed | | $ | 60,747 |
| | $ | 113,156 |
| | $ | 128,136 |
| Correction | | (524 | ) | | (945 | ) | | (945 | ) | As restated | | $ | 60,223 |
| | $ | 112,211 |
| | $ | 127,191 |
| Loss (gain) on impairment / retirement of fixed assets, net | | | | | | | As filed | | $ | 25,000 |
| | $ | 24,230 |
| | $ | 25,719 |
| Correction | | — |
| | — |
| | 8,790 |
| As restated | | $ | 25,000 |
| | $ | 24,230 |
| | $ | 34,509 |
| Income (loss) before tax | | | | | | | As filed | | $ | 192,401 |
| | $ | 152,990 |
| | $ | 141,606 |
| Correction | | 524 |
| | 945 |
| | (7,845 | ) | As restated | | $ | 192,925 |
| | $ | 153,935 |
| | $ | 133,761 |
| Provision (benefit) for taxes | | | | | | As filed | | $ | 51,713 |
| | $ | 41,395 |
| | $ | 30,839 |
| Correction | | 199 |
| | 359 |
| | (2,981 | ) | As restated | | $ | 51,912 |
| | $ | 41,754 |
| | $ | 27,858 |
| Net income (loss) | | | | | | As filed | | $ | 140,688 |
| | $ | 111,595 |
| | $ | 110,767 |
| Correction | | 325 |
| | 586 |
| | (4,864 | ) | As restated | | $ | 141,013 |
| | $ | 112,181 |
| | $ | 105,903 |
| | | | | | | | Basic earnings per limited partner unit: | | | | | | As filed | | $ | 2.53 |
| | $ | 2.01 |
| | $ | 2.00 |
| Correction | | 0.01 |
| | 0.01 |
| | (0.09 | ) | As restated | | $ | 2.54 |
| | $ | 2.02 |
| | $ | 1.91 |
| | | | | | | | Diluted earnings per limited partner unit: | | | | | | As filed | | $ | 2.51 |
| | $ | 2.00 |
| | $ | 1.98 |
| Correction | | 0.01 |
| | 0.01 |
| | (0.09 | ) | As restated | | $ | 2.52 |
| | $ | 2.01 |
| | $ | 1.89 |
|
(12) Changes in Accumulated Other Comprehensive Income (Loss) by Component:
The following tables reflect the changes in Accumulated other comprehensive income (loss)Other Comprehensive Income (Loss) related to limited partners' equity for the periodthree-, nine-, and twelve-month periods ended June 30,September 29, 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 |
| | 1,893 |
| | 3,833 |
| | | | | | | | | | Amounts reclassified | | | | | | | | from accumulated | | | | | | | | other comprehensive | | | | | | | | income (2) | | 8,624 |
| | — |
| | 8,624 |
| | | | | | | | | Net current-period other | | | | | | | comprehensive income | | 10,564 |
| | 1,893 |
| | 12,457 |
| | | | | | | | | June 30, 2013 | | $ | (15,185 | ) | | $ | (858 | ) | | $ | (16,043 | ) |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at June 30, 2013 | | $ | (15,185 | ) | | $ | (858 | ) | | $ | (16,043 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (4,440 | ) | | (699 | ) | | (5,139 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 1,679 |
| | — |
| | 1,679 |
| | | | | | | | | Net current-period other comprehensive income | | (2,761 | ) | | (699 | ) | | (3,460 | ) | | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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 | | $ | 10,160 |
| | | Net effect of swaps | | | | $ | 10,160 |
| | | Total before tax | | | | (1,536 | ) | | | Provision (benefit) for taxes | | | | $ | 8,624 |
| | | Net of tax |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at December 31, 2012 | | $ | (25,749 | ) | | $ | (2,751 | ) | | $ | (28,500 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (2,500 | ) | | 1,194 |
| | (1,306 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 10,303 |
| | — |
| | 10,303 |
| | | | | | | | | Net current-period other comprehensive income | | 7,803 |
| | 1,194 |
| | 8,997 |
| | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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.
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at September 30, 2012 | | $ | (27,686 | ) | | $ | (4,371 | ) | | $ | (32,057 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (416 | ) | | 2,814 |
| | 2,398 |
| | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 10,156 |
| | — |
| | 10,156 |
| | | | | | | | | Net current-period other comprehensive income | | 9,740 |
| | 2,814 |
| | 12,554 |
| | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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 | | 3 months ended 9/29/13 | | 9 months ended 9/29/13 | | 12 months ended 9/29/13 | | | | Interest rate contracts | | $ | 1,986 |
| | $ | 12,146 |
| | $ | 11,972 |
| | Net effect of swaps | | | | $ | 1,986 |
| | $ | 12,146 |
| | $ | 11,972 |
| | Total before tax | | | | (307 | ) | | (1,843 | ) | | (1,816 | ) | | Provision (benefit) for taxes | | | | $ | 1,679 |
| | $ | 10,303 |
| | $ | 10,156 |
| | 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 June 30,September 29, 2013, December 31, 2012, and July 1,September 30, 2012 and for the three, sixnine and twelve month periods ended June 30,September 29, 2013 and July 1,September 30, 2012. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, we havethe Partnership has 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 2013 Credit Agreement, all outstanding debt has been equally reflected within each co-issuer's June 30,September 29, 2013, December 31, 2012 and July 1,September 30, 2012 balance sheets in the accompanying condensed consolidating financial statements.
The consolidating financial information has been corrected for the information described in Note 11.
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 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 | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| Receivables | | 2,960 |
| | 89,760 |
| | 86,590 |
| | 517,925 |
| | (630,036 | ) | | 67,199 |
| Inventories | | — |
| | 4,639 |
| | 4,182 |
| | 36,631 |
| | — |
| | 45,452 |
| Current deferred tax asset | | — |
| | 23,822 |
| | 816 |
| | 3,664 |
| | — |
| | 28,302 |
| Prepaid advertising | | — |
| | 9,181 |
| | 1,579 |
| | 5,854 |
| | — |
| | 16,614 |
| Other current assets | | 620 |
| | 2,259 |
| | 487 |
| | 13,908 |
| | — |
| | 17,274 |
| | | 3,580 |
| | 129,661 |
| | 115,399 |
| | 605,886 |
| | (636,057 | ) | | 218,469 |
| Property and Equipment (net) | | 463,783 |
| | 994 |
| | 250,249 |
| | 835,875 |
| | — |
| | 1,550,901 |
| Investment in Park | | 447,080 |
| | 735,017 |
| | 129,942 |
| | 38,992 |
| | (1,351,031 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 119,201 |
| | 111,218 |
| | — |
| | 239,480 |
| Other Intangibles, net | | — |
| | — |
| | 16,880 |
| | 22,839 |
| | — |
| | 39,719 |
| Deferred Tax Asset | | — |
| | 34,028 |
| | — |
| | 90 |
| | (34,118 | ) | | — |
| Intercompany Receivable | | 874,125 |
| | 1,123,159 |
| | 1,165,828 |
| | — |
| | (3,163,112 | ) | | — |
| Other Assets | | 13,605 |
| | 9,382 |
| | 7,112 |
| | 2,227 |
| | — |
| | 32,326 |
| | | $ | 1,811,234 |
| | $ | 2,032,241 |
| | $ | 1,804,611 |
| | $ | 1,617,127 |
| | $ | (5,184,318 | ) | | $ | 2,080,895 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 155,522 |
| | 208,924 |
| | 7,971 |
| | 285,379 |
| | (623,457 | ) | | 34,339 |
| Deferred revenue | | — |
| | — |
| | 18,719 |
| | 113,646 |
| | — |
| | 132,365 |
| Accrued interest | | 5,189 |
| | 3,563 |
| | 15,192 |
| | — |
| | — |
| | 23,944 |
| Accrued taxes | | 6,534 |
| | 458 |
| | 181 |
| | 2,848 |
| | — |
| | 10,021 |
| Accrued salaries, wages and benefits | | 1 |
| | 18,642 |
| | 2,153 |
| | 9,100 |
| | — |
| | 29,896 |
| Self-insurance reserves | | — |
| | 5,535 |
| | 1,727 |
| | 17,330 |
| | — |
| | 24,592 |
| Other accrued liabilities | | 860 |
| | 4,421 |
| | 715 |
| | 2,793 |
| | — |
| | 8,789 |
| | | 174,406 |
| | 247,843 |
| | 52,958 |
| | 431,096 |
| | (636,057 | ) | | 270,246 |
| Deferred Tax Liability | | — |
| | — |
| | 61,544 |
| | 126,866 |
| | (34,118 | ) | | 154,292 |
| Derivative Liability | | 16,039 |
| | 10,733 |
| | — |
| | — |
| | — |
| | 26,772 |
| Other Liabilities | | — |
| | 5,296 |
| | — |
| | 3,500 |
| | — |
| | 8,796 |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 58,000 |
| | 58,000 |
| | 58,000 |
| | — |
| | (116,000 | ) | | 58,000 |
| Term debt | | 622,125 |
| | 622,125 |
| | 622,125 |
| | — |
| | (1,244,250 | ) | | 622,125 |
| Notes | | 901,431 |
| | 901,431 |
| | 901,431 |
| | — |
| | (1,802,862 | ) | | 901,431 |
| | | 1,581,556 |
| | 1,581,556 |
| | 1,581,556 |
| | — |
| | (3,163,112 | ) | | 1,581,556 |
| | | | | | | | | | | | | | Equity | | 39,233 |
| | 186,813 |
| | 108,553 |
| | 1,055,665 |
| | (1,351,031 | ) | | 39,233 |
| | | $ | 1,811,234 |
| | $ | 2,032,241 |
| | $ | 1,804,611 |
| | $ | 1,617,127 |
| | $ | (5,184,318 | ) | | $ | 2,080,895 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET September 29, 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 | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| Receivables | | 12 |
| | 124,478 |
| | 70,303 |
| | 589,797 |
| | (742,056 | ) | | 42,534 |
| Inventories | | — |
| | 1,578 |
| | 2,090 |
| | 25,648 |
| | — |
| | 29,316 |
| Current deferred tax asset | | — |
| | 3,708 |
| | 816 |
| | 3,661 |
| | — |
| | 8,185 |
| Income tax refundable | | — |
| | — |
| | 662 |
| | — |
| | — |
| | 662 |
| Other current assets | | 995 |
| | 3,558 |
| | 613 |
| | 3,798 |
| | — |
| | 8,964 |
| | | 134,007 |
| | 135,615 |
| | 110,671 |
| | 634,906 |
| | (742,056 | ) | | 273,143 |
| Property and Equipment (net) | | 450,205 |
| | 985 |
| | 248,484 |
| | 815,000 |
| | — |
| | 1,514,674 |
| Investment in Park | | 548,241 |
| | 824,356 |
| | 143,548 |
| | 81,719 |
| | (1,597,864 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 121,657 |
| | 111,218 |
| | — |
| | 241,936 |
| Other Intangibles, net | | — |
| | — |
| | 17,228 |
| | 22,797 |
| | — |
| | 40,025 |
| Deferred Tax Asset | | — |
| | 30,316 |
| | — |
| | 90 |
| | (30,406 | ) | | — |
| Intercompany Receivable | | 877,010 |
| | 1,069,069 |
| | 1,113,983 |
| | — |
| | (3,060,062 | ) | | — |
| Other Assets | | 13,196 |
| | 9,031 |
| | 6,902 |
| | 2,140 |
| | — |
| | 31,269 |
| | | $ | 2,031,720 |
| | $ | 2,069,372 |
| | $ | 1,762,473 |
| | $ | 1,667,870 |
| | $ | (5,430,388 | ) | | $ | 2,101,047 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 281,983 |
| | 159,781 |
| | 7,802 |
| | 314,367 |
| | (742,056 | ) | | 21,877 |
| Deferred revenue | | — |
| | — |
| | 1,951 |
| | 35,676 |
| | — |
| | 37,627 |
| Accrued interest | | 2,677 |
| | 1,593 |
| | 5,983 |
| | — |
| | — |
| | 10,253 |
| Accrued taxes | | 5,413 |
| | 29,386 |
| | — |
| | 4,594 |
| | — |
| | 39,393 |
| Accrued salaries, wages and benefits | | 1 |
| | 27,622 |
| | 2,154 |
| | 9,844 |
| | — |
| | 39,621 |
| Self-insurance reserves | | — |
| | 5,545 |
| | 1,896 |
| | 16,647 |
| | — |
| | 24,088 |
| Other accrued liabilities | | 991 |
| | 4,077 |
| | 694 |
| | 1,856 |
| | — |
| | 7,618 |
| | | 297,365 |
| | 234,304 |
| | 26,780 |
| | 382,984 |
| | (754,656 | ) | | 186,777 |
| Deferred Tax Liability | | — |
| | — |
| | 61,143 |
| | 126,866 |
| | (30,406 | ) | | 157,603 |
| Derivative Liability | | 18,407 |
| | 13,239 |
| | — |
| | — |
| | — |
| | 31,646 |
| Other Liabilities | | — |
| | 5,573 |
| | — |
| | 3,500 |
| | — |
| | 9,073 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 622,125 |
| | 622,125 |
| | 622,125 |
| | — |
| | (1,244,250 | ) | | 622,125 |
| Notes | | 901,606 |
| | 901,606 |
| | 901,606 |
| | — |
| | (1,803,212 | ) | | 901,606 |
| | | 1,523,731 |
| | 1,523,731 |
| | 1,523,731 |
| | — |
| | (3,047,462 | ) | | 1,523,731 |
| | | | | | | | | | | | | | Equity | | 192,217 |
| | 292,525 |
| | 150,819 |
| | 1,154,520 |
| | (1,597,864 | ) | | 192,217 |
| | | $ | 2,031,720 |
| | $ | 2,069,372 |
| | $ | 1,762,473 |
| | $ | 1,667,870 |
| | $ | (5,430,388 | ) | | $ | 2,101,047 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET December 31, 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 | | $ | 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 BALANCE SHEET
July 1, 2012 (As restated)
(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 | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
| Receivables | | — |
| | 71,210 |
| | 64,931 |
| | 436,324 |
| | (529,512 | ) | | 42,953 |
| Inventories | | — |
| | 4,861 |
| | 4,663 |
| | 41,712 |
| | — |
| | 51,236 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Prepaid advertising | | — |
| | 10,181 |
| | 596 |
| | 5,473 |
| | — |
| | 16,250 |
| Income tax refundable | | — |
| | — |
| | 10,083 |
| | — |
| | — |
| | 10,083 |
| Other current assets | | 800 |
| | 2,971 |
| | 908 |
| | 4,660 |
| | — |
| | 9,339 |
| | | 800 |
| | 95,462 |
| | 95,927 |
| | 518,979 |
| | (535,033 | ) | | 176,135 |
| Property and Equipment (net) | | 465,146 |
| | 1,025 |
| | 272,511 |
| | 882,682 |
| | — |
| | 1,621,364 |
| Investment in Park | | 471,253 |
| | 701,181 |
| | 114,053 |
| | 21,834 |
| | (1,308,321 | ) | | — |
| Intercompany Note Receivable | | — |
| | 86,362 |
| | — |
| | — |
| | (86,362 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 122,960 |
| | 111,218 |
| | — |
| | 243,239 |
| Other Intangibles, net | | — |
| | — |
| | 17,412 |
| | 22,837 |
| | — |
| | 40,249 |
| Deferred Tax Asset | | — |
| | 43,471 |
| | — |
| | — |
| | (43,471 | ) | | — |
| Intercompany Receivable | | 880,971 |
| | 1,186,016 |
| | 1,236,507 |
| | — |
| | (3,303,494 | ) | | — |
| Other Assets | | 24,678 |
| | 16,454 |
| | 9,010 |
| | 2,400 |
| | — |
| | 52,542 |
| | | $ | 1,851,909 |
| | $ | 2,129,971 |
| | $ | 1,868,380 |
| | $ | 1,559,950 |
| | $ | (5,276,681 | ) | | $ | 2,133,529 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 108,234 |
| | $ | 233,508 |
| | $ | 14,320 |
| | $ | 217,263 |
| | $ | (535,033 | ) | | $ | 38,292 |
| Deferred revenue | | — |
| | — |
| | 19,946 |
| | 88,521 |
| | — |
| | 108,467 |
| Accrued interest | | 481 |
| | 195 |
| | 15,353 |
| | — |
| | — |
| | 16,029 |
| Accrued taxes | | 7,083 |
| | 571 |
| | 59 |
| | 3,027 |
| | — |
| | 10,740 |
| Accrued salaries, wages and benefits | | 1 |
| | 26,108 |
| | 2,410 |
| | 9,190 |
| | — |
| | 37,709 |
| Self-insurance reserves | | — |
| | 4,280 |
| | 1,771 |
| | 17,147 |
| | — |
| | 23,198 |
| Other accrued liabilities | | 953 |
| | 4,489 |
| | 935 |
| | 2,275 |
| | — |
| | 8,652 |
| | | 116,752 |
| | 269,151 |
| | 54,794 |
| | 337,423 |
| | (535,033 | ) | | 243,087 |
| Deferred Tax Liability | | — |
| | — |
| | 58,162 |
| | 119,417 |
| | (43,471 | ) | | 134,108 |
| Derivative Liability | | 21,090 |
| | 14,056 |
| | — |
| | — |
| | — |
| | 35,146 |
| Other Liabilities | | — |
| | 3,621 |
| | — |
| | 3,500 |
| | — |
| | 7,121 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 86,362 |
| | (86,362 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 111,000 |
| | 111,000 |
| | 111,000 |
| | — |
| | (222,000 | ) | | 111,000 |
| Term debt | | 1,140,100 |
| | 1,140,100 |
| | 1,140,100 |
| | — |
| | (2,280,200 | ) | | 1,140,100 |
| Notes | | 400,647 |
| | 400,647 |
| | 400,647 |
| | — |
| | (801,294 | ) | | 400,647 |
| | | 1,651,747 |
| | 1,651,747 |
| | 1,651,747 |
| | — |
| | (3,303,494 | ) | | 1,651,747 |
| | | | | | | | | | | | | | Equity | | 62,320 |
| | 191,396 |
| | 103,677 |
| | 1,013,248 |
| | (1,308,321 | ) | | 62,320 |
| | | $ | 1,851,909 |
| | $ | 2,129,971 |
| | $ | 1,868,380 |
| | $ | 1,559,950 |
| | $ | (5,276,681 | ) | | $ | 2,133,529 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)BALANCE SHEET For the Three Months Ended September 30, 2012June 30, 2013 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 43,925 |
| | $ | 85,358 |
| | $ | 34,954 |
| | $ | 326,473 |
| | $ | (129,090 | ) | | $ | 361,620 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 2,994 |
| | 28,059 |
| | — |
| | 31,053 |
| Operating expenses | | 1,408 |
| | 52,246 |
| | 15,586 |
| | 201,134 |
| | (129,090 | ) | | 141,284 |
| Selling, general and administrative | | 1,222 |
| | 26,888 |
| | 3,868 |
| | 13,789 |
| | — |
| | 45,767 |
| Depreciation and amortization | | 12,891 |
| | 9 |
| | 6,818 |
| | 26,314 |
| | — |
| | 46,032 |
| Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | — |
| | 29 |
| | — |
| | 29 |
| | | 15,521 |
| | 79,143 |
| | 29,266 |
| | 269,325 |
| | (129,090 | ) | | 264,165 |
| Operating income | | 28,404 |
| | 6,215 |
| | 5,688 |
| | 57,148 |
| | — |
| | 97,455 |
| Interest expense (income), net | | 10,210 |
| | 7,246 |
| | 9,843 |
| | (1,507 | ) | | — |
| | 25,792 |
| Net effect of swaps | | (1,378 | ) | | (895 | ) | | — |
| | — |
| | — |
| | (2,273 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,886 |
| | — |
| | — |
| | 14,886 |
| Other (income) expense | | 187 |
| | (2,128 | ) | | 583 |
| | 1,358 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | (30,875 | ) | | (15,540 | ) | | (8,232 | ) | | 4,649 |
| | 49,998 |
| | — |
| Net income (loss) before taxes | | 50,260 |
| | 17,532 |
| | (11,392 | ) | | 52,648 |
| | (49,998 | ) | | 59,050 |
| Provision (benefit) for taxes | | 2,870 |
| | 684 |
| | (6,732 | ) | | 14,838 |
| | — |
| | 11,660 |
| Net income (loss) | | $ | 47,390 |
| | $ | 16,848 |
| | $ | (4,660 | ) | | $ | 37,810 |
| | $ | (49,998 | ) | | $ | 47,390 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,592 |
| | — |
| | 1,592 |
| | — |
| | (1,592 | ) | | 1,592 |
| Unrealized income on cash flow hedging derivatives | | 1,679 |
| | 503 |
| | — |
| | — |
| | (503 | ) | | 1,679 |
| Other comprehensive income, (net of tax) | | 3,271 |
| | 503 |
| | 1,592 |
| | — |
| | (2,095 | ) | | 3,271 |
| Total Comprehensive (Income) loss | | $ | 50,661 |
| | $ | 17,351 |
| | $ | (3,068 | ) | | $ | 37,810 |
| | $ | (52,093 | ) | | $ | 50,661 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 856,276 |
| | — |
| | 1,555,999 |
| Investment in Park | | 572,748 |
| | 786,753 |
| | 115,271 |
| | 60,141 |
| | (1,534,913 | ) | | — |
| 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 |
| | | $ | 1,952,057 |
| | $ | 2,032,761 |
| | $ | 1,778,266 |
| | $ | 1,578,075 |
| | $ | (5,259,167 | ) | | $ | 2,081,992 |
| 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 |
| | 119,971 |
| | (39,320 | ) | | 140,113 |
| 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 | | 181,167 |
| | 291,041 |
| | 140,674 |
| | 1,103,198 |
| | (1,534,913 | ) | | 181,167 |
| | | $ | 1,952,057 |
| | $ | 2,032,761 |
| | $ | 1,778,266 |
| | $ | 1,578,075 |
| | $ | (5,259,167 | ) | | $ | 2,081,992 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Three Months Ended July 1,September 29, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 83,285 |
| | $ | 161,866 |
| | $ | 82,265 |
| | $ | 509,467 |
| | $ | (244,807 | ) | | $ | 592,076 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,082 |
| | 39,761 |
| | — |
| | 45,843 |
| Operating expenses | | 1,669 |
| | 76,468 |
| | 19,042 |
| | 318,022 |
| | (244,807 | ) | | 170,394 |
| Selling, general and administrative | | 1,796 |
| | 38,083 |
| | 4,781 |
| | 14,067 |
| | — |
| | 58,727 |
| Depreciation and amortization | | 18,306 |
| | 10 |
| | 8,979 |
| | 30,200 |
| | — |
| | 57,495 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | Loss on impairment / retirement of fixed assets, net | | 368 |
| | — |
| | 1 |
| | 1,268 |
| | — |
| | 1,637 |
| | | 22,139 |
| | 114,561 |
| | 38,885 |
| | 394,575 |
| | (244,807 | ) | | 325,353 |
| Operating income | | 61,146 |
| | 47,305 |
| | 43,380 |
| | 114,892 |
| | — |
| | 266,723 |
| Interest expense (income), net | | 10,858 |
| | 6,901 |
| | 9,731 |
| | (1,978 | ) | | — |
| | 25,512 |
| Net effect of swaps | | 810 |
| | 567 |
| | — |
| | — |
| | — |
| | 1,377 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | (8,615 | ) | | — |
| | — |
| | (8,615 | ) | Other (income) expense | | 188 |
| | (2,129 | ) | | 584 |
| | 1,357 |
| | — |
| | — |
| Income from investment in affiliates | | (146,054 | ) | | (78,714 | ) | | (13,606 | ) | | (40,904 | ) | | 279,278 |
| | — |
| Net income before taxes | | 195,344 |
| | 120,680 |
| | 55,286 |
| | 156,417 |
| | (279,278 | ) | | 248,449 |
| Provision for taxes | | 4,920 |
| | 14,537 |
| | 14,390 |
| | 24,178 |
| | — |
| | 58,025 |
| Net income | | $ | 190,424 |
| | $ | 106,143 |
| | $ | 40,896 |
| | $ | 132,239 |
| | $ | (279,278 | ) | | $ | 190,424 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (699 | ) | | — |
| | (699 | ) | | — |
| | 699 |
| | (699 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (2,761 | ) | | (1,202 | ) | | — |
| | — |
| | 1,202 |
| | (2,761 | ) | Other comprehensive income (loss), (net of tax) | | (3,460 | ) | | (1,202 | ) | | (699 | ) | | — |
| | 1,901 |
| | (3,460 | ) | Total Comprehensive Income | | $ | 186,964 |
| | $ | 104,941 |
| | $ | 40,197 |
| | $ | 132,239 |
| | $ | (277,377 | ) | | $ | 186,964 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 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 | | $ | 43,745 |
| | $ | 77,510 |
| | $ | 41,841 |
| | $ | 315,637 |
| | $ | (121,127 | ) | | $ | 357,606 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 3,541 |
| | 28,945 |
| | — |
| | 32,486 |
| Operating expenses | | 1,438 |
| | 52,584 |
| | 15,935 |
| | 197,406 |
| | (121,127 | ) | | 146,236 |
| Selling, general and administrative | | 1,656 |
| | 24,525 |
| | 4,295 |
| | 14,035 |
| | — |
| | 44,511 |
| Depreciation and amortization | | 13,531 |
| | 9 |
| | 6,985 |
| | 27,384 |
| | — |
| | 47,909 |
| Loss (gain) on impairment / retirement of fixed assets, net | | (861 | ) | | — |
| | (1 | ) | | — |
| | — |
| | (862 | ) | | | 15,764 |
| | 77,118 |
| | 30,755 |
| | 267,770 |
| | (121,127 | ) | | 270,280 |
| Operating income | | 27,981 |
| | 392 |
| | 11,086 |
| | 47,867 |
| | — |
| | 87,326 |
| Interest expense, net | | 13,067 |
| | 8,084 |
| | 10,598 |
| | (1,515 | ) | | — |
| | 30,234 |
| Net effect of swaps | | (104 | ) | | (69 | ) | | — |
| | — |
| | — |
| | (173 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | 9,301 |
| | — |
| | — |
| | 9,301 |
| Other (income) expense | | 188 |
| | (2,041 | ) | | 512 |
| | 1,341 |
| | — |
| | — |
| Income from investment in affiliates | | (24,476 | ) | | (16,973 | ) | | (6,955 | ) | | (260 | ) | | 48,664 |
| | — |
| Income (loss) before taxes | | 39,306 |
| | 11,391 |
| | (2,370 | ) | | 48,301 |
| | (48,664 | ) | | 47,964 |
| Provision (benefit) for taxes | | 2,723 |
| | (1,876 | ) | | (1,322 | ) | | 11,856 |
| | — |
| | 11,381 |
| Net income (loss) | | $ | 36,583 |
| | $ | 13,267 |
| | $ | (1,048 | ) | | $ | 36,445 |
| | $ | (48,664 | ) | | $ | 36,583 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 481 |
| | — |
| | 481 |
| | — |
| | (481 | ) | | 481 |
| Unrealized income on cash flow hedging derivatives | | (2,370 | ) | | (775 | ) | | — |
| | — |
| | 775 |
| | (2,370 | ) | Other comprehensive income (loss), (net of tax) | | (1,889 | ) | | (775 | ) | | 481 |
| | — |
| | 294 |
| | (1,889 | ) | Total Comprehensive Income (Loss) | | $ | 34,694 |
| | $ | 12,492 |
| | $ | (567 | ) | | $ | 36,445 |
| | $ | (48,370 | ) | | $ | 34,694 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 31,574 |
| | — |
| | 60,223 |
| Loss on impairment / retirement of fixed assets, net | | 25,000 |
| | — |
| | — |
| | — |
| | — |
| | 25,000 |
| | | 47,430 |
| | 106,828 |
| | 39,435 |
| | 375,775 |
| | (220,588 | ) | | 348,880 |
| Operating income | | 32,233 |
| | 34,306 |
| | 48,899 |
| | 89,127 |
| | — |
| | 204,565 |
| Interest expense, 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 | | (125,636 | ) | | (79,925 | ) | | (11,355 | ) | | (45,354 | ) | | 262,270 |
| | — |
| Income before taxes | | 145,574 |
| | 109,087 |
| | 64,880 |
| | 135,654 |
| | (262,270 | ) | | 192,925 |
| Provision for taxes | | 4,561 |
| | 9,777 |
| | 17,181 |
| | 20,393 |
| | — |
| | 51,912 |
| Net income | | $ | 141,013 |
| | $ | 99,310 |
| | $ | 47,699 |
| | $ | 115,261 |
| | $ | (262,270 | ) | | $ | 141,013 |
| 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 | | $ | 140,216 |
| | $ | 99,358 |
| | $ | 47,136 |
| | $ | 115,261 |
| | $ | (261,755 | ) | | $ | 140,216 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Six Months Ended June 30, 2013
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 48,243 |
| | $ | 93,729 |
| | $ | 35,243 |
| | $ | 367,983 |
| | $ | (141,779 | ) | | $ | 403,419 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 2,994 |
| | 33,096 |
| | — |
| | 36,090 |
| Operating expenses | | 2,831 |
| | 73,852 |
| | 21,527 |
| | 261,510 |
| | (141,779 | ) | | 217,941 |
| Selling, general and administrative | | 2,514 |
| | 43,501 |
| | 4,579 |
| | 16,212 |
| | — |
| | 66,806 |
| Depreciation and amortization | | 13,366 |
| | 18 |
| | 6,818 |
| | 30,616 |
| | — |
| | 50,818 |
| Loss on impairment / retirement of fixed assets, net | | 36 |
| | — |
| | 478 |
| | 115 |
| | — |
| | 629 |
| | | 18,747 |
| | 117,371 |
| | 36,396 |
| | 341,549 |
| | (141,779 | ) | | 372,284 |
| Operating income (loss) | | 29,496 |
| | (23,642 | ) | | (1,153 | ) | | 26,434 |
| | — |
| | 31,135 |
| Interest expense (income), net | | 20,722 |
| | 14,923 |
| | 19,607 |
| | (3,737 | ) | | — |
| | 51,515 |
| Net effect of swaps | | 4,257 |
| | 2,681 |
| | — |
| | — |
| | — |
| | 6,938 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 23,844 |
| | — |
| | — |
| | 23,844 |
| Other (income) expense | | 375 |
| | (4,516 | ) | | 1,383 |
| | 2,758 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | 41,221 |
| | 20,100 |
| | (4,712 | ) | | 25,876 |
| | (82,485 | ) | | — |
| Income (loss) before taxes | | (58,254 | ) | | (69,611 | ) | | (41,892 | ) | | 1,537 |
| | 82,485 |
| | (85,735 | ) | Provision (benefit) for taxes | | 3,482 |
| | (16,981 | ) | | (15,986 | ) | | 5,486 |
| | — |
| | (23,999 | ) | Net income (loss) | | (61,736 | ) | | (52,630 | ) | | (25,906 | ) | | (3,949 | ) | | 82,485 |
| | (61,736 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,893 |
| | — |
| | 1,893 |
| | — |
| | (1,893 | ) | | 1,893 |
| Unrealized income (loss) on cash flow hedging derivatives | | 10,564 |
| | 3,038 |
| | — |
| | — |
| | (3,038 | ) | | 10,564 |
| Other comprehensive income (loss), (net of tax) | | 12,457 |
| | 3,038 |
| | 1,893 |
| | — |
| | (4,931 | ) | | 12,457 |
| Total Comprehensive Income (Loss) | | $ | (49,279 | ) | | $ | (49,592 | ) | | $ | (24,013 | ) | | $ | (3,949 | ) | | $ | 77,554 |
| | $ | (49,279 | ) |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the SixNine Months Ended July 1,September 29, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 131,528 |
| | $ | 255,595 |
| | $ | 117,508 |
| | $ | 877,450 |
| | $ | (386,586 | ) | | $ | 995,495 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,076 |
| | 72,857 |
| | — |
| | 81,933 |
| Operating expenses | | 4,500 |
| | 150,320 |
| | 40,569 |
| | 579,532 |
| | (386,586 | ) | | 388,335 |
| Selling, general and administrative | | 4,310 |
| | 81,584 |
| | 9,360 |
| | 30,279 |
| | — |
| | 125,533 |
| Depreciation and amortization | | 31,672 |
| | 28 |
| | 15,797 |
| | 60,816 |
| | — |
| | 108,313 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | Loss on impairment / retirement of fixed assets, net | | 404 |
| | — |
| | 479 |
| | 1,383 |
| | — |
| | 2,266 |
| | | 40,886 |
| | 231,932 |
| | 75,281 |
| | 736,124 |
| | (386,586 | ) | | 697,637 |
| Operating income | | 90,642 |
| | 23,663 |
| | 42,227 |
| | 141,326 |
| | — |
| | 297,858 |
| Interest expense (income), net | | 31,580 |
| | 21,824 |
| | 29,338 |
| | (5,715 | ) | | — |
| | 77,027 |
| Net effect of swaps | | 5,067 |
| | 3,248 |
| | — |
| | — |
| | — |
| | 8,315 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 15,229 |
| | — |
| | — |
| | 15,229 |
| Other (income) expense | | 563 |
| | (6,645 | ) | | 1,967 |
| | 4,115 |
| | — |
| | — |
| Income from investment in affiliates | | (104,833 | ) | | (58,614 | ) | | (18,318 | ) | | (15,029 | ) | | 196,794 |
| | — |
| Income before taxes | | 137,090 |
| | 51,069 |
| | 13,394 |
| | 157,955 |
| | (196,794 | ) | | 162,714 |
| Provision (benefit) for taxes | | 8,402 |
| | (2,444 | ) | | (1,596 | ) | | 29,664 |
| | — |
| | 34,026 |
| Net income | | $ | 128,688 |
| | $ | 53,513 |
| | $ | 14,990 |
| | $ | 128,291 |
| | $ | (196,794 | ) | | $ | 128,688 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,194 |
| | — |
| | 1,194 |
| | — |
| | (1,194 | ) | | 1,194 |
| Unrealized income on cash flow hedging derivatives | | 7,803 |
| | 1,836 |
| | — |
| | — |
| | (1,836 | ) | | 7,803 |
| Other comprehensive income, (net of tax) | | 8,997 |
| | 1,836 |
| | 1,194 |
| | — |
| | (3,030 | ) | | 8,997 |
| Total Comprehensive Income | | $ | 137,685 |
| | $ | 55,349 |
| | $ | 16,184 |
| | $ | 128,291 |
| | $ | (199,824 | ) | | $ | 137,685 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 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 | | $ | 45,201 |
| | $ | 80,087 |
| | $ | 42,107 |
| | $ | 343,569 |
| | $ | (125,160 | ) | | $ | 385,804 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 3,541 |
| | 33,032 |
| | — |
| | 36,573 |
| Operating expenses | | 2,773 |
| | 73,020 |
| | 21,592 |
| | 245,296 |
| | (125,160 | ) | | 217,521 |
| Selling, general and administrative | | 2,988 |
| | 38,221 |
| | 5,055 |
| | 16,231 |
| | — |
| | 62,495 |
| Depreciation and amortization | | 14,227 |
| | 18 |
| | 6,985 |
| | 30,758 |
| | — |
| | 51,988 |
| Loss (gain) on impairment / retirement of fixed assets, net | | (779 | ) | | — |
| | 9 |
| | — |
| | — |
| | (770 | ) | | | 19,209 |
| | 111,259 |
| | 37,182 |
| | 325,317 |
| | (125,160 | ) | | 367,807 |
| Operating income (loss) | | 25,992 |
| | (31,172 | ) | | 4,925 |
| | 18,252 |
| | — |
| | 17,997 |
| Interest expense, net | | 24,225 |
| | 14,699 |
| | 21,001 |
| | (2,904 | ) | | — |
| | 57,021 |
| Net effect of swaps | | 69 |
| | 263 |
| | (1,475 | ) | | — |
| | — |
| | (1,143 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 1,109 |
| | — |
| | — |
| | 1,109 |
| Other (income) expense | | 375 |
| | (5,076 | ) | | 709 |
| | 3,992 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | 26,015 |
| | 6,477 |
| | (3,541 | ) | | 6,803 |
| | (35,754 | ) | | — |
| Income (loss) before taxes | | (24,692 | ) | | (47,535 | ) | | (12,878 | ) | | 10,361 |
| | 35,754 |
| | (38,990 | ) | Provision (benefit) for taxes | | 4,140 |
| | (13,548 | ) | | (3,656 | ) | | 2,906 |
| | — |
| | (10,158 | ) | Net income (loss) | | $ | (28,832 | ) | | $ | (33,987 | ) | | $ | (9,222 | ) | | $ | 7,455 |
| | $ | 35,754 |
| | $ | (28,832 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (688 | ) | | — |
| | (688 | ) | | — |
| | 688 |
| | (688 | ) | Unrealized income on cash flow hedging derivatives | | (2,031 | ) | | (677 | ) | | 21 |
| | — |
| | 656 |
| | (2,031 | ) | Other comprehensive income (loss), (net of tax) | | (2,719 | ) | | (677 | ) | | (667 | ) | | — |
| | 1,344 |
| | (2,719 | ) | Total Comprehensive Income (loss) | | $ | (31,551 | ) | | $ | (34,664 | ) | | $ | (9,889 | ) | | $ | 7,455 |
| | $ | 37,098 |
| | $ | (31,551 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 62,332 |
| | — |
| | 112,211 |
| Loss on impairment / retirement of fixed assets, net | | 24,221 |
| | — |
| | 9 |
| | — |
| | — |
| | 24,230 |
| | | 66,639 |
| | 218,087 |
| | 76,617 |
| | 701,092 |
| | (345,748 | ) | | 716,687 |
| Operating income | | 58,225 |
| | 3,134 |
| | 53,824 |
| | 107,379 |
| | — |
| | 222,562 |
| Interest expense, 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 | | (99,621 | ) | | (73,448 | ) | | (14,896 | ) | | (38,551 | ) | | 226,516 |
| | — |
| Income before taxes | | 120,882 |
| | 61,552 |
| | 52,002 |
| | 146,015 |
| | (226,516 | ) | | 153,935 |
| Provision (benefit) for taxes | | 8,701 |
| | (3,771 | ) | | 13,525 |
| | 23,299 |
| | — |
| | 41,754 |
| Net income | | $ | 112,181 |
| | $ | 65,323 |
| | $ | 38,477 |
| | $ | 122,716 |
| | $ | (226,516 | ) | | $ | 112,181 |
| 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 | | $ | 109,132 |
| | $ | 64,694 |
| | $ | 37,247 |
| | $ | 122,716 |
| | $ | (224,657 | ) | | $ | 109,132 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Twelve Months Ended June 30,September 29, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 148,757 |
| | $ | 271,778 |
| | $ | 133,554 |
| | $ | 952,082 |
| | $ | (420,102 | ) | | $ | 1,086,069 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,769 |
| | 84,796 |
| | — |
| | 94,565 |
| Operating expenses | | 5,438 |
| | 177,188 |
| | 47,798 |
| | 641,501 |
| | (420,102 | ) | | 451,823 |
| Selling, general and administrative | | 6,021 |
| | 91,895 |
| | 10,659 |
| | 34,047 |
| | — |
| | 142,622 |
| Depreciation and amortization | | 36,799 |
| | 40 |
| | 18,032 |
| | 70,265 |
| | — |
| | 125,136 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (6,625 | ) | Loss on impairment / retirement of fixed assets, net | | 25,950 |
| | — |
| | 475 |
| | 5,310 |
| | — |
| | 31,735 |
| | | 74,208 |
| | 269,123 |
| | 86,733 |
| | 829,294 |
| | (420,102 | ) | | 839,256 |
| Operating income | | 74,549 |
| | 2,655 |
| | 46,821 |
| | 122,788 |
| | — |
| | 246,813 |
| Interest (income) expense, net | | 45,022 |
| | 29,552 |
| | 39,476 |
| | (9,005 | ) | | — |
| | 105,045 |
| Net effect of swaps | | 4,050 |
| | 2,539 |
| | — |
| | — |
| | — |
| | 6,589 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 13,737 |
| | — |
| | — |
| | 13,737 |
| Other (income) expense | | 749 |
| | (8,947 | ) | | 2,694 |
| | 5,504 |
| | — |
| | — |
| Income from investment in affiliates | | (74,816 | ) | | (52,527 | ) | | (15,768 | ) | | (12,687 | ) | | 155,798 |
| | — |
| Income before taxes | | 78,369 |
| | 19,257 |
| | 6,065 |
| | 138,976 |
| | (155,798 | ) | | 86,869 |
| Provision (benefit) for taxes | | 9,417 |
| | (13,289 | ) | | (8,917 | ) | | 30,706 |
| | — |
| | 17,917 |
| Net income | | $ | 68,952 |
| | $ | 32,546 |
| | $ | 14,982 |
| | $ | 108,270 |
| | $ | (155,798 | ) | | $ | 68,952 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,950 |
| | — |
| | 2,950 |
| | — |
| | (2,950 | ) | | 2,950 |
| Unrealized income on cash flow hedging derivatives | | 12,735 |
| | 3,635 |
| | — |
| | — |
| | (3,635 | ) | | 12,735 |
| Other comprehensive income, (net of tax) | | 15,685 |
| | 3,635 |
| | 2,950 |
| | — |
| | (6,585 | ) | | 15,685 |
| Total Comprehensive Income | | $ | 84,637 |
| | $ | 36,181 |
| | $ | 17,932 |
| | $ | 108,270 |
| | $ | (162,383 | ) | | $ | 84,637 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Twelve Months Ended July 1, 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 | | $ | 150,783 |
| | $ | 267,882 |
| | $ | 138,595 |
| | $ | 963,915 |
| | $ | (418,258 | ) | | $ | 1,102,917 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,743 |
| | 86,664 |
| | — |
| | 97,407 |
| Operating expenses | | 5,341 |
| | 175,593 |
| | 47,795 |
| | 647,795 |
| | (418,258 | ) | | 458,266 |
| Selling, general and administrative | | 6,309 |
| | 88,725 |
| | 11,892 |
| | 37,847 |
| | — |
| | 144,773 |
| Depreciation and amortization | | 38,843 |
| | 42 |
| | 17,976 |
| | 73,555 |
| | — |
| | 130,416 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 15 |
| | — |
| | (52 | ) | | 10,426 |
| | — |
| | 10,389 |
| | | 50,508 |
| | 264,360 |
| | 88,354 |
| | 856,287 |
| | (418,258 | ) | | 841,251 |
| Operating income | | 100,275 |
| | 3,522 |
| | 50,241 |
| | 107,628 |
| | — |
| | 261,666 |
| Interest expense, net | | 61,742 |
| | 24,419 |
| | 48,119 |
| | (3,440 | ) | | — |
| | 130,840 |
| Net effect of swaps | | (9,027 | ) | | (121 | ) | | (5,569 | ) | | — |
| | — |
| | (14,717 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,863 |
| | — |
| | — |
| | 14,863 |
| Other (income) expense | | 533 |
| | (9,873 | ) | | 1,602 |
| | 7,520 |
| | — |
| | (218 | ) | (Income) loss from investment in affiliates | | (80,137 | ) | | (28,421 | ) | | (6,557 | ) | | 6,067 |
| | 109,048 |
| | — |
| Income (loss) before taxes | | 127,164 |
| | 17,518 |
| | (2,217 | ) | | 97,481 |
| | (109,048 | ) | | 130,898 |
| Provision (benefit) for taxes | | 10,056 |
| | (26,630 | ) | | 7,042 |
| | 23,322 |
| | — |
| | 13,790 |
| Net income (loss) | | $ | 117,108 |
| | $ | 44,148 |
| | $ | (9,259 | ) | | $ | 74,159 |
| | $ | (109,048 | ) | | $ | 117,108 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 733 |
| | — |
| | 733 |
| | — |
| | (733 | ) | | 733 |
| Unrealized income (loss) on cash flow hedging derivatives | | (3,854 | ) | | (4,884 | ) | | 21 |
| | — |
| | 4,863 |
| | (3,854 | ) | Other comprehensive income (loss), (net of tax) | | (3,121 | ) | | (4,884 | ) | | 754 |
| | — |
| | 4,130 |
| | (3,121 | ) | Total Comprehensive Income (Loss) | | $ | 113,987 |
| | $ | 39,264 |
| | $ | (8,505 | ) | | $ | 74,159 |
| | $ | (104,918 | ) | | $ | 113,987 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 152,379 |
| | $ | 292,510 |
| | $ | 127,485 |
| | $ | 996,647 |
| | $ | (444,321 | ) | | $ | 1,124,700 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,404 |
| | 83,651 |
| | — |
| | 93,055 |
| Operating expenses | | 5,739 |
| | 179,465 |
| | 48,104 |
| | 669,919 |
| | (444,321 | ) | | 458,906 |
| Selling, general and administrative | | 5,964 |
| | 97,351 |
| | 10,618 |
| | 34,423 |
| | — |
| | 148,356 |
| Depreciation and amortization | | 35,896 |
| | 40 |
| | 17,581 |
| | 68,891 |
| | — |
| | 122,408 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (15,368 | ) | | — |
| | (15,368 | ) | Loss on impairment / retirement of fixed assets, net | | 1,318 |
| | — |
| | 476 |
| | 6,578 |
| | — |
| | 8,372 |
| | | 48,917 |
| | 276,856 |
| | 86,183 |
| | 848,094 |
| | (444,321 | ) | | 815,729 |
| Operating income | | 103,462 |
| | 15,654 |
| | 41,302 |
| | 148,553 |
| | — |
| | 308,971 |
| Interest (income) expense, net | | 43,667 |
| | 29,195 |
| | 39,310 |
| | (8,465 | ) | | — |
| | 103,707 |
| Net effect of swaps | | 4,964 |
| | 3,177 |
| | — |
| | — |
| | — |
| | 8,141 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 20,157 |
| | — |
| | — |
| | 20,157 |
| Other (income) expense | | 751 |
| | (9,033 | ) | | 2,766 |
| | 5,516 |
| | — |
| | — |
| Income from investment in affiliates | | (95,234 | ) | | (51,316 | ) | | (18,019 | ) | | (8,239 | ) | | 172,808 |
| | — |
| Income (loss) before taxes | | 128,139 |
| | 30,850 |
| | (3,529 | ) | | 159,741 |
| | (172,808 | ) | | 142,393 |
| Provision (benefit) for taxes | | 9,776 |
| | (8,530 | ) | | (11,708 | ) | | 34,492 |
| | — |
| | 24,030 |
| Net income | | $ | 118,363 |
| | $ | 39,380 |
| | $ | 8,179 |
| | $ | 125,249 |
| | $ | (172,808 | ) | | $ | 118,363 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,814 |
| | — |
| | 2,814 |
| | — |
| | (2,814 | ) | | 2,814 |
| Unrealized income on cash flow hedging derivatives | | 9,740 |
| | 2,385 |
| | — |
| | — |
| | (2,385 | ) | | 9,740 |
| Other comprehensive income, (net of tax) | | 12,554 |
| | 2,385 |
| | 2,814 |
| | — |
| | (5,199 | ) | | 12,554 |
| Total Comprehensive Income | | $ | 130,917 |
| | $ | 41,765 |
| | $ | 10,993 |
| | $ | 125,249 |
| | $ | (178,007 | ) | | $ | 130,917 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWSOPERATIONS AND COMPREHENSIVE INCOME For the SixTwelve Months Ended JuneSeptember 30, 20132012 (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 | | $ | 4,808 |
| | $ | (30,371 | ) | | $ | (4,856 | ) | | $ | 44,138 |
| | $ | 68,837 |
| | $ | 82,556 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 38,056 |
| | 37,167 |
| | (18,274 | ) | | 17,909 |
| | (74,858 | ) | | — |
| Capital expenditures | | (38,398 | ) | | — |
| | (3,435 | ) | | (37,356 | ) | | — |
| | (79,189 | ) | Net cash from (for) investing activities | | (342 | ) | | 37,167 |
| | (21,709 | ) | | (19,447 | ) | | (74,858 | ) | | (79,189 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 58,000 |
| | — |
| | — |
| | — |
| | — |
| | 58,000 |
| Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,312 | ) | | (8,014 | ) | | (438 | ) | | — |
| | — |
| | (22,764 | ) | Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Distributions (paid) received | | (71,350 | ) | | 1,711 |
| | — |
| | — |
| | — |
| | (69,639 | ) | Exercise of limited partnership unit options | | — |
| | 28 |
| | — |
| | — |
| | — |
| | 28 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (130 | ) | | — |
| | — |
| | — |
| | (130 | ) | Net cash from (for) financing activities | | (29,466 | ) | | (7,240 | ) | | (474 | ) | | — |
| | — |
| | (37,180 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (1,389 | ) | | — |
| | — |
| | (1,389 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (25,000 | ) | | (444 | ) | | (28,428 | ) | | 24,691 |
| | (6,021 | ) | | (35,202 | ) | Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 71,152 |
| | — |
| | 127,191 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 24,188 |
| | — |
| | (62 | ) | | 10,383 |
| | — |
| | 34,509 |
| | | 74,203 |
| | 271,598 |
| | 87,553 |
| | 839,493 |
| | (409,232 | ) | | 863,615 |
| Operating income (loss) | | 73,530 |
| | (9,720 | ) | | 54,697 |
| | 101,972 |
| | — |
| | 220,479 |
| Interest 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 | | (88,216 | ) | | (50,693 | ) | | (9,456 | ) | | (21,713 | ) | | 170,078 |
| | — |
| Income before taxes | | 116,009 |
| | 22,587 |
| | 42,703 |
| | 122,540 |
| | (170,078 | ) | | 133,761 |
| Provision (benefit) for taxes | | 10,106 |
| | (29,298 | ) | | 20,942 |
| | 26,108 |
| | — |
| | 27,858 |
| Net income | | $ | 105,903 |
| | $ | 51,885 |
| | $ | 21,761 |
| | $ | 96,432 |
| | $ | (170,078 | ) | | $ | 105,903 |
| 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 | | $ | 102,834 |
| | $ | 51,776 |
| | $ | 19,110 |
| | $ | 96,432 |
| | $ | (167,318 | ) | | $ | 102,834 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the SixNine Months Ended July 1, 2012 (As restated)September 29, 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 | | $ | (75,559 | ) | | $ | 47,309 |
| | $ | (12,724 | ) | | $ | 44,638 |
| | $ | 60,941 |
| | $ | 64,605 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 41,361 |
| | 11,532 |
| | (415 | ) | | 13,984 |
| | (66,462 | ) | | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (24,266 | ) | | — |
| | (13,478 | ) | | (27,136 | ) | | — |
| | (64,880 | ) | Net cash from (for) investing activities | | 18,268 |
| | 11,532 |
| | (13,893 | ) | | (13,152 | ) | | (66,462 | ) | | (63,707 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 111,000 |
| | — |
| | — |
| | — |
| | — |
| | 111,000 |
| Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Term debt payments, including early termination penalties | | (9,259 | ) | | (6,536 | ) | | (205 | ) | | — |
| | — |
| | (16,000 | ) | Intercompany (payments) receipts | | — |
| | 7,482 |
| | — |
| | (7,482 | ) | | — |
| | — |
| Distributions (paid) received | | (44,450 | ) | | 92 |
| | — |
| | — |
| | — |
| | (44,358 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | — |
| 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 47 |
| | — |
| | — |
| | — |
| | 47 |
| Excess tax benefit from unit-based compensation | | — |
| | (438 | ) | | — |
| | — |
| | — |
| | (438 | ) | Net cash from (for) financing activities | | 57,291 |
| | (59,353 | ) | | 9,345 |
| | (7,482 | ) | | — |
| | (199 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (294 | ) | | — |
| | — |
| | (294 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (512 | ) | | (17,566 | ) | | 24,004 |
| | (5,521 | ) | | 405 |
| Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 337,821 |
| | $ | 60,434 |
| | $ | 21,615 |
| | $ | 66,757 |
| | $ | (169,672 | ) | | $ | 316,955 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (63,105 | ) | | (52,172 | ) | | (29,579 | ) | | (24,816 | ) | | 169,672 |
| | — |
| Sale of other assets | | — |
| | — |
| | — |
| | 15,297 |
| | — |
| | 15,297 |
| Capital expenditures | | (43,568 | ) | | — |
| | (5,517 | ) | | (48,449 | ) | | — |
| | (97,534 | ) | Net cash from investing activities | | (106,673 | ) | | (52,172 | ) | | (35,096 | ) | | (57,968 | ) | | 169,672 |
| | (82,237 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,331 | ) | | (8,028 | ) | | (453 | ) | | — |
| | — |
| | (22,812 | ) | Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Distributions (paid) received | | (107,013 | ) | | 2,555 |
| | — |
| | — |
| | — |
| | (104,458 | ) | Exercise of limited partnership unit options | | — |
| | 43 |
| | — |
| | — |
| | — |
| | 43 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (148 | ) | | — |
| | — |
| | — |
| | (148 | ) | Net cash (for) financing activities | | (123,148 | ) | | (6,413 | ) | | (489 | ) | | — |
| | — |
| | (130,050 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (16 | ) | | — |
| | — |
| | (16 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | 108,000 |
| | 1,849 |
| | (13,986 | ) | | 8,789 |
| | — |
| | 104,652 |
| Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the TwelveNine Months Ended JuneSeptember 30, 20132012 (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 | | $ | 210,085 |
| | $ | (47,009 | ) | | $ | 29,440 |
| | $ | 140,865 |
| | $ | (30,675 | ) | | $ | 302,706 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 27,874 |
| | (30,140 | ) | | (15,735 | ) | | (12,174 | ) | | 30,175 |
| | — |
| Sale of other assets | | — |
| | — |
| | — |
| | 14,885 |
| | — |
| | 14,885 |
| Capital expenditures | | (47,797 | ) | | (8 | ) | | (4,404 | ) | | (56,786 | ) | | — |
| | (108,995 | ) | Net cash for investing activities | | (19,923 | ) | | (30,148 | ) | | (20,139 | ) | | (54,075 | ) | | 30,175 |
| | (94,110 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | (53,000 | ) | | — |
| | — |
| | — |
| | — |
| | (53,000 | ) | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Intercompany term debt (payments) receipts | | — |
| | 86,362 |
| | — |
| | (86,362 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (660,931 | ) | | (466,114 | ) | | (14,630 | ) | | — |
| | — |
| | (1,141,675 | ) | Distributions (paid) received | | (115,839 | ) | | 1,746 |
| | — |
| | — |
| | — |
| | (114,093 | ) | Exercise of limited partnership unit options | | — |
| | 57 |
| | — |
| | — |
| | — |
| | 57 |
| Payment of debt issuance costs | | (14,311 | ) | | (8,014 | ) | | (433 | ) | | — |
| | — |
| | (22,758 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | 1,517 |
| | — |
| | — |
| | — |
| | 1,517 |
| Net cash from (for) financing activities | | (190,162 | ) | | 77,157 |
| | (585 | ) | | (86,362 | ) | | — |
| | (199,952 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (945 | ) | | — |
| | — |
| | (945 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase for the period | | — |
| | — |
| | 7,771 |
| | 428 |
| | (500 | ) | | 7,699 |
| Balance, beginning of period | | — |
| | — |
| | 13,974 |
| | 27,476 |
| | (5,521 | ) | | 35,929 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 209,022 |
| | $ | 49,092 |
| | $ | 9,484 |
| | $ | 156,240 |
| | $ | (147,094 | ) | | $ | 276,744 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (56,757 | ) | | (70,669 | ) | | 3,557 |
| | (23,225 | ) | | 147,094 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (29,295 | ) | | (8 | ) | | (14,426 | ) | | (32,081 | ) | | — |
| | (75,810 | ) | Net cash (for) investing activities | | (84,879 | ) | | (70,677 | ) | | (10,869 | ) | | (55,306 | ) | | 147,094 |
| | (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 | | — |
| | (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. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended July 1, 2012 (As restated)September 29, 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 | | $ | 146,874 |
| | $ | (73,709 | ) | | $ | 24,332 |
| | $ | 223,401 |
| | $ | (63,983 | ) | | $ | 256,915 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (31,801 | ) | | (37,181 | ) | | (579 | ) | | 11,099 |
| | 58,462 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (36,852 | ) | | — |
| | (25,832 | ) | | (40,701 | ) | | — |
| | (103,385 | ) | Net cash from (for) investing activities | | (67,480 | ) | | (37,181 | ) | | (26,411 | ) | | (29,602 | ) | | 58,462 |
| | (102,212 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings (payments) on revolving credit loans | | 26,000 |
| | — |
| | — |
| | — |
| | — |
| | 26,000 |
| Intercompany term debt (payments) receipts | | — |
| | 183,138 |
| | — |
| | (183,138 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (21,383 | ) | | (15,094 | ) | | (473 | ) | | — |
| | — |
| | (36,950 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (90,011 | ) | | 269 |
| | — |
| | — |
| | — |
| | (89,742 | ) | 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 | | — |
| | (438 | ) | | — |
| | — |
| | — |
| | (438 | ) | Net cash from (for) financing activities | | (85,394 | ) | | 107,928 |
| | 8,354 |
| | (183,138 | ) | | — |
| | (152,250 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,203 | ) | | — |
| | — |
| | (2,203 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (6,000 | ) | | (2,962 | ) | | 4,072 |
| | 10,661 |
| | (5,521 | ) | | 250 |
| Balance, beginning of period | | 6,000 |
| | 2,962 |
| | 9,902 |
| | 16,815 |
| | — |
| | 35,679 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 258,843 |
| | $ | 42,367 |
| | $ | 32,927 |
| | $ | 52,457 |
| | $ | (61,746 | ) | | $ | 324,848 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 24,507 |
| | (37,602 | ) | | (30,743 | ) | | (17,908 | ) | | 61,746 |
| | — |
| Sale of other assets | | — |
| | — |
| | — |
| | 30,182 |
| | — |
| | 30,182 |
| Capital expenditures | | (47,938 | ) | | (1 | ) | | (5,532 | ) | | (63,290 | ) | | — |
| | (116,761 | ) | Net cash (for) investing activities | | (23,431 | ) | | (37,603 | ) | | (36,275 | ) | | (51,016 | ) | | 61,746 |
| | (86,579 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Distributions (paid) received | | (129,277 | ) | | 2,571 |
| | — |
| | — |
| | — |
| | (126,706 | ) | Exercise of limited partnership unit options | | — |
| | 43 |
| | — |
| | — |
| | — |
| | 43 |
| Payment of debt issuance costs | | (14,331 | ) | | (8,028 | ) | | (453 | ) | | — |
| | — |
| | (22,812 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | 1,515 |
| | — |
| | — |
| | — |
| | 1,515 |
| Net cash (for) financing activities | | (145,412 | ) | | (4,734 | ) | | (489 | ) | | — |
| | — |
| | (150,635 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (254 | ) | | — |
| | — |
| | (254 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | 90,000 |
| | 30 |
| | (4,091 | ) | | 1,441 |
| | — |
| | 87,380 |
| Balance, beginning of period | | 43,000 |
| | 2,263 |
| | 40,278 |
| | 10,561 |
| | — |
| | 96,102 |
| Balance, end of period | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 30, 2012 (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 | | $ | 181,718 |
| | $ | (157,023 | ) | | $ | 8,795 |
| | $ | 314,835 |
| | $ | (75,771 | ) | | $ | 272,554 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (35,830 | ) | | (42,342 | ) | | 8,488 |
| | (6,087 | ) | | 75,771 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (33,025 | ) | | (8 | ) | | (23,050 | ) | | (37,037 | ) | | — |
| | (93,120 | ) | Net cash (for) investing activities | | (67,682 | ) | | (42,350 | ) | | (14,562 | ) | | (43,124 | ) | | 75,771 |
| | (91,947 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Intercompany term debt (payments) receipts | | — |
| | 269,500 |
| | — |
| | (269,500 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (14,467 | ) | | (10,213 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (105,569 | ) | | 261 |
| | — |
| | — |
| | — |
| | (105,308 | ) | 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 | | — |
| | (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 |
|
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 overseen by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including allocating resources on a property-by-property basis.
Aside fromAlong with 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 Executive Vice President - Operations, and the park general managers.
Critical Accounting Policies: 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 secondthird quarter of 2013, there were no changes in the above critical accounting policies previously disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2012 except as noted below. Change in Depreciation Method Effective January 1, 2013, the Partnershipwe changed itsour 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 Partnershipwe 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 Partnershipwe 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 believesWe believe 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 June 30,September 29, 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 2013 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-, six-nine- and twelve-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Six months ended | | Twelve months ended | | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | | | (13 weeks) | | (14 weeks) | | (26 weeks) | | (26 weeks) | | (52 weeks) | | (53 weeks) | | | | | (As restated) | | | | (As restated) | | | | (As restated) | | | (In thousands) | Net income (loss) | | $ | 47,390 |
| | $ | 36,583 |
| | $ | (61,736 | ) | | $ | (28,832 | ) | | $ | 68,952 |
| | $ | 117,108 |
| Interest expense | | 25,861 |
| | 30,236 |
| | 51,624 |
| | 57,039 |
| | 105,204 |
| | 130,927 |
| Interest income | | (69 | ) | | (2 | ) | | (109 | ) | | (18 | ) | | (159 | ) | | (87 | ) | Provision (benefit) for taxes | | 11,660 |
| | 11,381 |
| | (23,999 | ) | | (10,158 | ) | | 17,917 |
| | 13,790 |
| Depreciation and amortization | | 46,032 |
| | 47,909 |
| | 50,818 |
| | 51,988 |
| | 125,136 |
| | 130,416 |
| EBITDA | | 130,874 |
| | 126,107 |
| | 16,598 |
| | 70,019 |
| | 317,050 |
| | 392,154 |
| Loss on early extinguishment of debt | | — |
| | — |
| | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | (2,273 | ) | | (173 | ) | | 6,938 |
| | (1,143 | ) | | 6,589 |
| | (14,717 | ) | Unrealized foreign currency loss | | 14,875 |
| | 8,878 |
| | 23,756 |
| | 629 |
| | 13,946 |
| | 14,549 |
| Non-cash equity expense | | 869 |
| | 568 |
| | 3,802 |
| | 2,268 |
| | 4,799 |
| | 2,257 |
| Loss (gain) on impairment/retirement of fixed assets, net | | 29 |
| | (862 | ) | | 629 |
| | (770 | ) | | 31,735 |
| | 10,389 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | — |
| | — |
| | 150 |
| Refinancing costs | | — |
| | — |
| | — |
| | — |
| | — |
| | (195 | ) | Other non-recurring items (as defined) | | (297 | ) | | 444 |
| | 508 |
| | 2,165 |
| | 2,523 |
| | 6,420 |
| Adjusted EBITDA (1) | | $ | 144,077 |
| | $ | 134,962 |
| | $ | 86,804 |
| | $ | 73,168 |
| | $ | 404,590 |
| | $ | 411,007 |
| | | | | | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | | | (13 weeks) | | (13 weeks) | | (39 weeks) | | (39 weeks) | | (52 weeks) | | (53 weeks) | | | | | (As restated) | | | | (As restated) | | | | (As restated) | | | (In thousands) | Net income | | $ | 190,424 |
| | $ | 141,013 |
| | $ | 128,688 |
| | $ | 112,181 |
| | $ | 118,363 |
| | $ | 105,903 |
| Interest expense | | 25,529 |
| | 26,863 |
| | 77,153 |
| | 83,902 |
| | 103,870 |
| | 116,437 |
| Interest income | | (17 | ) | | (13 | ) | | (126 | ) | | (31 | ) | | (163 | ) | | (68 | ) | Provision for taxes | | 58,025 |
| | 51,912 |
| | 34,026 |
| | 41,754 |
| | 24,030 |
| | 27,858 |
| Depreciation and amortization | | 57,495 |
| | 60,223 |
| | 108,313 |
| | 112,211 |
| | 122,408 |
| | 127,191 |
| EBITDA | | 331,456 |
| | 279,998 |
| | 348,054 |
| | 350,017 |
| | 368,508 |
| | 377,321 |
| Loss on early extinguishment of debt | | — |
| | — |
| | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | 1,377 |
| | (175 | ) | | 8,315 |
| | (1,318 | ) | | 8,141 |
| | (10,930 | ) | Unrealized foreign currency (gain) loss | | (8,385 | ) | | (14,737 | ) | | 15,371 |
| | (14,108 | ) | | 20,298 |
| | (17,502 | ) | Non-cash equity expense | | 843 |
| | 362 |
| | 4,645 |
| | 2,630 |
| | 5,280 |
| | 2,619 |
| Loss on impairment/retirement of fixed assets, net | | 1,637 |
| | 25,000 |
| | 2,266 |
| | 24,230 |
| | 8,372 |
| | 34,509 |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | — |
| | (15,368 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | — |
| | — |
| | 150 |
| Other non-recurring items (as defined) | | 197 |
| | 1,861 |
| | 705 |
| | 4,026 |
| | 859 |
| | 7,445 |
| Adjusted EBITDA (1) | | $ | 318,382 |
| | $ | 292,309 |
| | $ | 405,186 |
| | $ | 365,477 |
| | $ | 430,663 |
| | $ | 393,612 |
| | | | | | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | | | | | |
Results of Operations:
Restatement -
We have made the followinga correction relating to our use of the composite depreciation method.
This The correction, which impacts the Balance Sheet at July 1,September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three, six,three-, nine-, and 12 monthtwelve-month periods ended July 1,September 30, 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'sour initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was reviewed in connection with respondinga response to an SEC comment letter. We ultimately concluded that such disposition was unusual and that an $8.8 million charge should have been reflected in the 2011 financial statements.
SixNine months ended June 30,September 29, 2013
The fiscal six-monthnine-month period ended June 30,September 29, 2013, consisted of a 26-week39-week period and included a total of 9171,936 operating days compared with 2639 weeks and 1,0012,178 operating days for the fiscal six-monthnine-month period ended July 1,September 30, 2012. The difference in operating days is primarily due to the sale of atwo non-core water park in the fourth quarter of 2012,parks, as well as the combiningcombination of two parks, Worlds of Fun and Oceans of Fun, into one gate for 2013.
The following table presents key financial information for the sixnine months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | Six months ended | | Six months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | | (26 weeks) | | (26 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 403,419 |
| | $ | 385,804 |
| | $ | 17,615 |
| | 4.6 | % | Operating costs and expenses | | 320,837 |
| | 316,589 |
| | 4,248 |
| | 1.3 | % | Depreciation and amortization | | 50,818 |
| | 51,988 |
| | (1,170 | ) | | (2.3 | )% | Loss (gain) on impairment / retirement of fixed assets | | 629 |
| | (770 | ) | | 1,399 |
| | N/M |
| Operating income | | $ | 31,135 |
| | $ | 17,997 |
| | $ | 13,138 |
| | 73.0 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 86,804 |
| | $ | 73,168 |
| | $ | 13,636 |
| | 18.6 | % | Attendance | | 8,677 |
| | 8,729 |
| | (52 | ) | | (0.6 | )% | Per capita spending | | $ | 42.17 |
| | $ | 40.24 |
| | $ | 1.93 |
| | 4.8 | % | Out-of-park revenues | | $ | 48,110 |
| | $ | 45,266 |
| | $ | 2,844 |
| | 6.3 | % |
| | | | | | | | | | | | | | | | | | | Nine months ended | | Nine months ended | | Increase (Decrease) | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (39 weeks) | | (39 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 995,495 |
| | $ | 939,249 |
| | $ | 56,246 |
| | 6.0 | % | Operating costs and expenses | | 595,801 |
| | 580,246 |
| | 15,555 |
| | 2.7 | % | Depreciation and amortization | | 108,313 |
| | 112,211 |
| | (3,898 | ) | | (3.5 | )% | Loss on impairment / retirement of fixed assets | | 2,266 |
| | 24,230 |
| | (21,964 | ) | | N/M |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | N/M |
| Operating income | | $ | 297,858 |
| | $ | 222,562 |
| | $ | 75,296 |
| | 33.8 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 405,186 |
| | $ | 365,477 |
| | $ | 39,709 |
| | 10.9 | % | Attendance | | 20,652 |
| | 20,689 |
| | (37 | ) | | (0.2 | )% | Per capita spending | | $ | 44.24 |
| | $ | 41.78 |
| | $ | 2.46 |
| | 5.9 | % | Out-of-park revenues | | $ | 106,801 |
| | $ | 99,526 |
| | $ | 7,275 |
| | 7.3 | % |
Net revenues for the sixnine months ended June 30,September 29, 2013 increased $17.6$56.3 million to $403.4$995.5 million from $385.8$939.2 million during the sixnine months ended July 1,September 30, 2012. The increase in revenues reflects a 5%6%, or $1.93,$2.46, increase in average in-park guest per capita spending during the first sixnine months of the year when compared with the first sixnine months of 2012. In-park guest per capita spending represents the average 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 reflects a 4%5% increase in the admissions per capita spendingcap and a 5%6% increase in pure in-park spending, driven largely by improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Additionally, for the six-monthnine-month period, out-of-park revenues increased 6%7%, or $2.8$7.3 million. Out-of-park revenues include the sale of hotel rooms, food, merchandise, and other complementary activities located outside of the park gates, as well as transaction fees from on-line product sales. The increase in out-of-park revenues was primarily driven by the strong performance of our resort properties, which saw us drivedrove higher average daily room rates (ADR's) while maintaining or growing occupancy rates. The increase in overall net revenues also reflects a less than 1% decrease inincludes attendance that was essentially comparable through the first sixnine months of 2013 when compared with the same period a year ago. This decreaseThe variance in attendance is entirely attributable to the sale of thetwo non-core water park in the fourth quarter of 2012.parks. Excluding the sale of the water parks, attendance increased 1%, or 195,000 visits on a comparable park attendance was comparable to the same period last year.basis.
Revenues for the first sixnine months of the year also reflect the negative impact of exchange rates and the strengthening U.S. dollar on our Canadian operations ($0.23.6 million) during the period.
For the six-monthnine-month period in 2013, operating costs and expenses increased 1%3%, or $4.2$15.6 million, to $320.8$595.8 million from $316.6$580.2 million for the same period in 2012, the net result of a $0.4$7.5 million increase in operating expenses and a $4.3$10.0 million increase in selling, general and administrative costs.costs ("SG&A"). These cost increases were offset slightly by a $0.52%, or $1.9 million decrease in cost of goods sold during the period. The $0.4$7.5 million increase in operating expenses was due to an increaseincreases of approximately $4.3 million in employee costs, $3.2 million in operating supplies and $1.5 million in labor costs andmaintenance materials, offset slightly by a $1.7decrease of $2.7 million increase in operating supplies.insurance expense. The increase in laboremployee costs was primarily due to increased health-care insurance costs while operatingof benefits. Operating supplies increased due to new extra-charge attractions, uniforms, and expenses related to the premium benefit offerings.offerings and improved guest services. The increase$2.7 million decrease in operating costsinsurance expense was somewhat offset bydue to a reduction in insurance settlements and accruals. The $4.3$10.0 million increase in SG&A expenses was due primarily to additional marketing efforts and agency advertising costs, and increased full-time laboremployee costs, largely related to fullperformance incentives and an increase in staffing levels and performance incentives.levels.
Depreciation and amortization expense for the period decreased $1.2$3.9 million due to several significant assets being fully depreciated at the end of 2012. For the six-monthnine-month period of 2013, the $8.7 million gain on sale of other assets relates to the sale of one of our non-core water parks. For the period, loss on impairment/retirement of fixed assets was $0.6totaled $2.3 million reflectingfor the retirement of assets during the period at several of our properties. Loss on impairment/retirement of fixed assets for the period ended September 30, 2012 totaled $24.2 million, which reflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom, offset slightly by gains on other retirements. After depreciation, amortization, gain on sale of other assets, loss (gain) on impairment / retirement of fixed assets, and all other non-cash costs, operating income for the period increased $13.1$75.3 million to $31.1$297.9 million in the first halfnine months of 2013 from operating income of $18.0$222.6 million in the first halfnine months of 2012.
Interest expense for the first halfnine months of 2013 was $51.6$77.2 million, a decrease of $5.4$6.8 million from the first halfnine months of 2012. The decrease in interest expense was due to the settlement of our Canadian cross-currency swaps in the first quarter of 2012, the decrease in non-cash amortization expense dueresulting from the write-off of loan fees related to theour prior credit agreement, and a decrease in revolver interest due to lower average borrowings and a lower average cost due toeffective interest rate from the March 2013 refinancing.
The net effect of our swaps resulted in a non-cash charge to earnings of $6.9$8.3 million for the first halfnine months of 2013 compared with a $1.1$1.3 million non-cash benefit to earnings in the first halfnine months of 2012. The difference reflects 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 designated and de-designated swaps to market. During the current year-to-date period, we also recognized a $23.8$15.2 million net charge to earnings for unrealized/realized foreign currency gains,losses, which representedincluded a $14.4 million unrealized foreign currency loss on the U.S.-dollar denominated debt held at our Canadian property. Additionally, 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 current year-to-date period.
During the first halfnine months of 2013, a benefitprovision for taxes of $24.0$34.0 million was recorded to account for publicly traded partnership (“PTP”) taxes and the tax attributes of our corporate subsidiaries. During the same six monthnine-month period in 2012, a $10.2$41.8 million benefitprovision for taxes was recorded. Actual cash taxes paid or payable are estimated to be between $14 and $17 million for the 2013 calendar year.
After interest expense and the benefit for taxes, the net lossincome for the sixnine months ended June 30,September 29, 2013 totaled $61.7$128.7 million, or $1.11$2.31 per diluted limited partner unit, compared with a net lossincome of $28.8$112.2 million, or $0.52$2.01 per diluted unit, for the same period a year ago.
For the six-monthnine-month period, Adjusted EBITDA (as defined in the 2013 Credit Agreement), which we believe is a meaningful measure of our park-level operating results, increased to $86.8$405.2 million compared with $73.2$365.5 million for the fiscal six-monthnine-month period ended July 1,September 30, 2012. This increase was due to the growth in revenues produced in large part by the continued success of our premium benefit offerings, admissions sales and admission sales program,our food and beverage initiatives, offset slightly by an increase in employee related costs, advertising expenses, and advertising expenses.operating supply costs related to targeted initiatives which enhance our guests' experiences at our parks. 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 page 38.
Second
Third Quarter -
The fiscal three-month period ended June 30,September 29, 2013, consisted of a 13-week period and included a total of 8001,019 operating days compared with 1413 weeks and 9051,177 operating days for the fiscal three-month period ended July 1,September 30, 2012. The difference in operating days is due to the sale of atwo non-core water park in the fourth quarter of 2012parks, as well as the combiningcombination of two parks, Worlds of Fun and Oceans of Fun, into one gate during 2013.
The following table presents key financial information for the three months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | | (13 weeks) | | (14 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 361,620 |
| | $ | 357,606 |
| | $ | 4,014 |
| | 1.1 | % | Operating costs and expenses | | 218,104 |
| | 223,233 |
| | (5,129 | ) | | (2.3 | )% | Depreciation and amortization | | 46,032 |
| | 47,909 |
| | (1,877 | ) | | (3.9 | )% | Loss (gain) on impairment / retirement of fixed assets | | 29 |
| | (862 | ) | | 891 |
| | N/M |
| Operating income | | $ | 97,455 |
| | $ | 87,326 |
| | $ | 10,129 |
| | 11.6 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 144,077 |
| | $ | 134,962 |
| | $ | 9,115 |
| | 6.8 | % | Attendance | | 7,872 |
| | 8,225 |
| | (353 | ) | | (4.3 | )% | Per capita spending | | $ | 42.36 |
| | $ | 40.32 |
| | $ | 2.04 |
| | 5.1 | % | Out-of-park revenues | | $ | 37,576 |
| | $ | 35,878 |
| | $ | 1,698 |
| | 4.7 | % |
| | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (13 weeks) | | (13 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 592,076 |
| | $ | 553,445 |
| | $ | 38,631 |
| | 7.0 | % | Operating costs and expenses | | 274,964 |
| | 263,657 |
| | 11,307 |
| | 4.3 | % | Depreciation and amortization | | 57,495 |
| | 60,223 |
| | (2,728 | ) | | (4.5 | )% | Loss on impairment / retirement of fixed assets | | 1,637 |
| | 25,000 |
| | (23,363 | ) | | N/M |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | N/M |
| Operating income | | $ | 266,723 |
| | $ | 204,565 |
| | $ | 62,158 |
| | 30.4 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 318,382 |
| | $ | 292,309 |
| | $ | 26,073 |
| | 8.9 | % | Attendance | | 11,975 |
| | 11,960 |
| | 15 |
| | 0.1 | % | Per capita spending | | $ | 45.73 |
| | $ | 42.90 |
| | $ | 2.83 |
| | 6.6 | % | Out-of-park revenues | | $ | 58,690 |
| | $ | 54,260 |
| | $ | 4,430 |
| | 8.2 | % |
For the quarter ended June 30,September 29, 2013, net revenues increased 1%7%, or $4.0$38.6 million, to $361.6$592.1 million from $357.6$553.5 million in the secondthird quarter of 2012. This increase reflects a 5%7% increase in average in-park per capita spending and a 5%an 8%, or $1.7$4.4 million, increase in out-of park revenues, offset slightly by a decrease of 4% in combined attendance.and attendance that was comparable with the prior year period. The increase in per capita spending was the result of higher admissions pricing, improvements in our food and beverage programs, and the successful expansion of our in-park premium benefit offerings.offerings, and improvements in our food and beverage programs. The increase in out-of-park revenues was due to the strong performance of our resort properties. The decrease inExcluding the sale our two non-core water parks, attendance for the second quarter was the direct result of fewer operating days in the period, the shift of the Easter and Spring Break holidays to the first quarter of 2013, and unfavorable short-term weather trends.increased 2%, or 207,000 visits on a comparable park basis.
Operating costs and expenses for the quarter decreased 2%increased 4%, or $5.1$11.3 million, to $218.1$275.0 million from $223.2$263.7 million in the secondthird quarter of 2012, the net result of a $1.4$1.5 million decrease in cost of goods sold, a $5.0$7.0 million decreaseincrease in operating expenses and a $1.3$5.7 million increase in SG&A costs. As a percentage of net revenues, costs and expenses decreased 120 basis points, and was in line with expectations. The decrease in cost of goods sold was primarily the result of successful cost-savings initiatives in food and beverage. The $5.0$7.0 million decreaseincrease in operating expenses was primarily due to lower employee-relateda $2.8 million increase in employee related costs, and maintenancea $1.6 million increase in operating supplies, and expenses.a $1.5 million increase in maintenance expense. The declineincrease in employee related costs was primarily due to the one less week of operations during the second quarter of 2013 compared with the second quarter of 2012, as well as reduced expenses related to the sale of one of our water parkshigher staffing levels, salary increases, and increases in November 2012. The decline in maintenancebenefit costs. Operating supplies wasincreased due to the timing of expenses due to the one less week in operations during the second quarter of 2013.premium benefit offerings and improved guest services. The $1.3$5.7 million increase in SG&A costs was due to increases in employee-related costs and agency advertising costs, offset somewhat by a decline in professional and administrative costs. The increase in SG&A employee-related expenses was due to improvementsan increase in staffing levels across the company,performance incentive awards due to strong 2013 operating results to date, as well as an increase in equity-related compensation due to unit price appreciation.staffing levels across the company. Advertising costs increased as a result of additional marketing efforts in the period.period, including our Customer Relationship Management platform.
Depreciation and amortization expense for the quarter decreased $1.9$2.7 million primarily due to several significant assets reaching the end of their depreciable lives at the end of 2012. For the third quarter of 2013, the gain on sale of other assets was $8.7 million, reflecting the gain on the sale of one of our non-core water parks. Loss on impairment/retirement of fixed assets for the current period was $1.6 million, reflecting losses on the retirement of assets across all of our parks. Loss on impairment/retirement of fixed assets during the quarter ended September 30, 2012 totaled $25.0 million, which reflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom. After depreciation, amortization, gain on sale of other assets, loss (gain) on impairment / retirement of fixed assets, and all other non-cash costs, operating income in the secondthird quarter of 2013 increased $10.1$62.1 million to $97.4$266.7 million from operating income of $87.3$204.6 million in the secondthird quarter of 2012.
Interest expense for the secondthird quarter of 2013 was $25.9$25.5 million, representing a $4.4$1.3 million decrease from the interest expense for the secondthird quarter of 2012. As mentioned in the six-monthnine-month discussion above, interest expense decreased primarily due to a reduction in average revolver balance and lower average rates on the revolver, as well as a reduction in non-cash deferred loan fee amortization resulting from the write-off of fees related to our prior credit agreement.
During the 2013 secondthird quarter, the net effect of our swaps resulted in a $2.3$1.4 million non-cash benefitcharge to earnings, compared to a non-cash benefit to earnings of $0.2 million in the secondthird quarter of 2012. The net effect of swaps reflects the regularly scheduled amortization of amounts in AOCI related to the swaps and ineffective fair value movements in our non-designated derivative portfolio. During the 2013 secondthird quarter, we also recognized a $14.9$8.6 million net chargebenefit to earnings for unrealized/realized foreign currency losses related to angains, which included a $8.5 million unrealized foreign currency lossgain on the U.S.-dollar denominated debt held at our Canadian property.
During the quarter, a provision for taxes of $11.7$58.0 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provision for taxes of $11.4$51.9 million in the same period a year ago. After interest expense and the provision for taxes, net income for the quarter totaled $47.4$190.4 million, or $0.85$3.41 per diluted limited partner unit, compared with net income of $36.6$141.0 million, or $0.66$2.52 per diluted unit, for the secondthird quarter a year ago.
For the current quarter, Adjusted EBITDA increased to $144.1$318.4 million from $135.0$292.3 million for the fiscal secondthird quarter of 2012. The approximate $9.1$26.1 million increase in Adjusted EBITDA was primarily duelargely attributable to incremental revenues resulting primarily from higher average guest per capita spending, as well as increases in out-of-park revenues in the quarter. Adjusted EBITDA in the second quarter also benefited from a reduction in operating expenses in the period, due to one less week of operationsThese revenue increases were somewhat offset by higher costs associated with improving guest services and one less water park in operation. expanding our marketing efforts.
Twelve Months Ended June 30,September 29, 2013 -
The fiscal twelve-month period ended June 30,September 29, 2013, consisted of a 52-week period and 2,2982,140 operating days compared with 53 weeks and 2,4922,416 operating days for the fiscal twelve-month period ended July 1,September 30, 2012. The difference in operating days was due primarily to anthe sale of two non-core water parks, the combination of two parks, Worlds of Fun and Oceans of Fun, into one gate during 2013, and the extra week of operations in the twelve monthtwelve-month period ending July 1,September 30, 2012.
The following table presents key financial information for the twelve months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | | (52 weeks) | | (53 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,086,069 |
| | $ | 1,102,917 |
| | $ | (16,848 | ) | | (1.5 | )% | Operating costs and expenses | | 689,010 |
| | 700,446 |
| | (11,436 | ) | | (1.6 | )% | Depreciation and amortization | | 125,136 |
| | 130,416 |
| | (5,280 | ) | | (4.0 | )% | (Gain) on sale of other assets | | (6,625 | ) | | — |
| | (6,625 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 31,735 |
| | 10,389 |
| | 21,346 |
| | N/M |
| Operating income | | $ | 246,813 |
| | $ | 261,666 |
| | $ | (14,853 | ) | | (5.7 | )% | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 404,590 |
| | $ | 411,007 |
| | $ | (6,417 | ) | | (1.6 | )% | Adjusted EBITDA margin | | 37.3 | % | | 37.3 | % | | — |
| | — | % | Attendance | | 23,248 |
| | 24,934 |
| | (1,686 | ) | | (6.8 | )% | Per capita spending | | $ | 42.67 |
| | $ | 40.40 |
| | $ | 2.27 |
| | 5.6 | % | Out-of-park revenues | | $ | 119,611 |
| | $ | 124,394 |
| | (4,783 | ) | | (3.8 | )% |
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (52 weeks) | | (53 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,124,700 |
| | $ | 1,084,094 |
| | $ | 40,606 |
| | 3.7 | % | Operating costs and expenses | | 700,317 |
| | 701,915 |
| | (1,598 | ) | | (0.2 | )% | Depreciation and amortization | | 122,408 |
| | 127,191 |
| | (4,783 | ) | | (3.8 | )% | Gain on sale of other assets | | (15,368 | ) | | — |
| | (15,368 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 8,372 |
| | 34,509 |
| | (26,137 | ) | | N/M |
| Operating income | | $ | 308,971 |
| | $ | 220,479 |
| | $ | 88,492 |
| | 40.1 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 430,663 |
| | $ | 393,612 |
| | $ | 37,051 |
| | 9.4 | % | Adjusted EBITDA margin | | 38.3 | % | | 36.3 | % | | — |
| | 2.0 | % | Attendance | | 23,263 |
| | 23,961 |
| | (698 | ) | | (2.9 | )% | Per capita spending | | $ | 44.13 |
| | $ | 41.44 |
| | $ | 2.69 |
| | 6.5 | % | Out-of-park revenues | | $ | 124,041 |
| | $ | 119,460 |
| | 4,581 |
| | 3.8 | % |
Net revenues totaled $1,086.11,124.7 million for the twelve months ended June 30,September 29, 2013, decreasingincreasing $16.840.6 million, from $1,102.91,084.1 million for the trailing twelve months ended July 1,September 30, 2012. The 2% decrease4% increase in revenues for the twelve-month period was primarily due to the extra week of operationsdriven by a 7% increase in the prior year's twelve month period. For the current twelve month period,average in-park guest per capita spending, increased 6%, onthe result of a stronger admissions per capita spendingcap and improved pure in-park spending. The increase in pure in-park spending which was driven largely byin large part the result of improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Attendance for the period decreased between
years due primarily to the extra week of operations in the twelve-month period ended July 1, 2012.September 30, 2012, as well as the sale of two non-core water parks during the current year period. Out-of-park revenues increased $4.6 million primarily due to an increase in processing fees as part of our expansion of ticketing options. The decreaseincrease in net revenues for the twelve months ended June 30,September 29, 2013 also reflects the negative impact of currency exchange rates and the weakening Canadian dollar on our Canadian operations (approximately $3.7$3.2 million) during the period.
Operating costs and expenses decreased $11.4$1.6 million, or 2%less than 1%, to $689.0$700.3 million, in large part due to one less week of operations in the current twelve-month period, and were in line with expectations. The decrease in costs and expenses reflects a $2.8$2.9 million decrease in cost of goods sold and a $6.4$1.2 million decrease in operating expenses, anddue primarily to the one less week in the period. These year-over-year cost decreases were partially offset by a $2.2 decrease$2.6 million increase in SG&A costs. The increase in SG&A costs reflects a $2.8 million increase in employment-related costs related to higher staffing levels and incentive compensation plans tied to company performance and a $3.0 million increase in advertising costs related to the transition to a new advertising agency, somewhat offset by a $2.6 decrease in professional and administrative costs, the result of reductions in litigation expenses and consulting fees in the period. The overall decrease in costs and expenses also reflects the impact of exchange rates on our Canadian operations ($0.61.0 million) during the period.
For the twelve-month period ending September 29, 2013, the gain on sale of other assets was $15.4 million, reflecting the gain on the sale of two non-core water parks during the period. Loss on impairment/retirement of fixed assets net,for the period was $8.4 million, due to the removal of a ride to enhance a section of one of our parks, as well as retirements of assets across all of our properties. Loss on impairment/retirement of fixed assets during the period ended September 30, 2012 totaled $31.7$34.5 million, which reflectsreflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom along with losses on other retirements. During the twelve-month period ended June 30, 2013, two non-core assets were sold at gains totaling $6.6 million. During the twelve-month period ended July 1, 2012, aand an $8.8 million charge of $10.4 million for the retirement of fixed assets was recorded,an asset which includes the retirement of the asset asis further described in Note 11 to the financial statements.
Depreciation and amortization expense for the period decreased $5.3$4.8 million compared with the prior period due primarily to several significant assets being fully depreciated at the end of 2012. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for the current period decreased $14.9increased $88.5 million to $246.8$309.0 million from $261.7$220.5 million.
Interest expense for the twelve months ended June 30,September 29, 2013 decreased $25.7$12.5 million to $105.2$103.9 million, from $130.9$116.4 million for the same twelve-month period a year ago. The reductiondecrease in interest expense was primarily attributablereflects a decrease in revolver interest in the period due to an approximate 300 basis point (bps) declinelower borrowings and a lower average cost resulting from the March 2013 refinancing, a decrease in non-cash amortization expense resulting from the write-off of loan fees related to our effective interest rate,prior credit agreement, and the result of lower fixed rates on London InterBank Offered Rate (LIBOR) within our interest-rate swap contracts. Additionally during the current period, the average outstanding balanceimpact of the revolver, as well assettlement of our Canadian cross-currency swaps in the average borrowing rate on the revolver, both declined resulting in lower interest expense.first quarter of 2012.
During the current twelve-month period, the net effect of our interest rate swaps was recorded as a charge to earnings of $6.6$8.1 million compared to a benefit to earnings of $14.7$10.9 million in the prior twelve-month period. The difference reflects the regularly scheduled amortization of amounts in AOCI and write-off of amounts related to de-designated 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 period, we also recognized a $13.7$20.2 million charge to earnings for unrealized/realized foreign currency losses, which included a $13.9$19.4 million unrealized foreign currency loss 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.
A provision for taxes of $17.9$24.0 million was recorded in the period for the tax attributes of our corporate subsidiaries and PTP taxes. This compares with a provision for taxes of $13.8$27.9 million in twelve-month period ended July 1, 2012 for the tax attributes of our corporate subsidiaries and PTP taxes.September 30, 2012.
After interest expense and provision for taxes, net income for the period totaled $69.0$118.4 million, or $1.24$2.12 per diluted limited partner unit, compared with net income of $117.1$105.9 million, or $2.10$1.89 per diluted unit, a year ago.
As discussed above, the current twelve-monthtrailing-twelve-month results include one less week of operations due to the timing of the secondthird quarter fiscal close. Comparing the twelve-month periods for both 2013 and 2012 on a comparable 52-week basis, net revenues would be up approximately $37.3$55.1 million, or 4%5%, on increases in both average in-park guest per capita spending and out-of- parkout-of-park revenues, partially offset by a slight decline in attendance. The increase in average in-park guest per capita spending is primarily due to a higher admissions per capita spendingcap and improved pure in-park spending, which was driven largely by improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Out-of-park revenues would have increased $0.7$6.3 million primarily due to an increase in transaction fees from on-line ticket sales. Attendance for the comparable period would have decreased 404,000351,000 visits, primarily due to soft attendance during the fourth quarter of 2012 compared with the fourth quarter of 2011.
On a comparable 52-week basis, operating costs and expenses would have increased approximately $10.1$9.1 million, the net result of a $1.7$1.9 million increasedecrease in cost of goods sold, a $7.4$6.2 million increase in operating expenses and a $1.0$4.8 million increase in SG&A costs. The increase in operating expenses was primarily attributable to an increase in employment-related expenses of $7.0$3.3 million, a $4.7$3.9 million increase in operating supply costs, a $1.9 million increase in property and other non-income taxes, and a $1.4$1.6 million increase in utility costs. Somewhat offsetting these operating-expense increases were decreases in maintenance expenses of $5.0$3.5 million and insurance expenses of $3.3$1.6 million. The increase in employment-related costs was largely due to higher benefit costs and increased seasonal labor hours resulting from expanded operating hours at several parks, the introduction of additional attractions and enhanced guest services at our parks. Operating supply costssupplies increased due largely to the introduction of new extra-charge attractions and incremental expenses related to our expanded premium benefit offerings. Property taxes increased due to the timing
of the receipt of a refund at one of our parks in the trailing-twelve-month period ended July 1, 2012, while utilityUtility costs increased primarily due to rate increases and the addition of new rides and attractions at the parks. The increase in SG&A costs for the period reflects a $3.1$3.4 million increase in employment-related costs due to higher staffing levels and bonusincentive compensation plans tied to company performance, and a $1.9$4.0 million increase in advertising costs related to the transition to a new advertising agency, and a $1.3 million increase in operating supplies, largely related to the expansion of our e-commerce platform.agency. Somewhat offsetting these SG&A cost increases was a $4.6$2.5 million decrease in professional and administrative costs primarily due to reductions in litigation expenses and consulting fees in the period.
Adjusted EBITDA for the twelve-month period ended June 30,September 29, 2013, decreased $6.4increased $37.1 million, or 2%9%, to $404.6$430.7 million. This decrease was due to the one fewer operating week in the current twelve-month period. On a same-week basis, Adjusted EBITDA for the twelve-month period would have increased approximately $26.1$40.9 million, or 7%11%. On a same-week basis, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased 120190 bps to 37.3%38.3% from 36.1%36.4% for the twelve-month period ended June 30,September 29, 2013, primarily due to an increase in revenues resulting from the continued success of high-margin revenues initiatives as our new premium guest benefit offerings and theour admission pricing, program combined with continued focus on controlling operating costs.
JulyOctober 2013 -
Based on preliminary results, through August 4, 2013, net revenues through November 3, 2013 were approximately $712$1,104 million, up 5%6%, or $36$65 million, compared with $676$1,039 million for the same period last year. The increase was athe result of an approximate 5%6%, or $2.24,$2.31, increase in average in-park guest per capita spending to $43.47,a record $44.33, and aan approximate 7%, or $5$8 million increase, in out-of-park revenues to $78$117 million. These increases were slightly offset by a less than one percent, or 52,000-visit, decreaseAlso contributing to revenue growth was an increase in attendance to 15.0 million visits.of 100,000 visits, compared with last year. Excluding the sale of two water park sold in 2012,parks, attendance was up 1%2%, or 75,000334,000 visits, when compared with this time last year.to a record 22.7 million visits on a comparable park basis.
Liquidity and Capital Resources: With respect to both liquidity and cash flow, we ended the secondthird quarter of 2013 in sound condition. The negative working capital ratio (current liabilitiesassets divided by current assets)liabilities) of 1.21.5 at June 30,September 29, 2013 reflects the impact of our seasonal business. Cash, receivablesReceivables, inventories, and inventoriespayables are at normal seasonal levels and credit facilities arelevels. Operating Activities During the nine-month period ended September 29, 2013, net cash provided by operating activities increased $40.2 million from the same period a year ago, primarily due to the year-over-year growth in placerevenues. For the twelve-month period ended September 29, 2013 net cash provided by operating activities increased $52.3 million from the same period a year ago, also reflective of the year-over-year growth in revenues. Investing Activities Net cash used in investing activities in the first nine months of 2013 was $82.2 million, an increase of $7.6 million compared with the nine month period ended September 30, 2012. Within investing activities, capital expenditures increased $21.7 million. During the current period, $15.3 million was received for the sale of a non-core waterpark. Net cash used in investing activities for the trailing-twelve-month period ended September 29, 2013 totaled $86.6 million compared with $91.9 million for the same period a year ago. The decrease reflects the receipt of $30.2 million from the sale of two non-core water parks during the period, offset somewhat by a $23.6 million increase in capital expenditures. Financing Activities Net cash used in financing activities in the first nine months of 2013 was $130.1 million, a decrease of $12.3 million compared with the nine-month period ended September 30, 2012. The decrease was due to funda one-time cash cost of $50.5 million to settle our Canadian derivative in the first quarter of 2012, offset somewhat by an increase in distributions paid in the current liabilities.year of $37.9 million. Net cash used in financing activities in the trailing-twelve-month period ended September 29, 2013 totaled $150.6 million, a decrease of $31.2 million compared with the twelve-month period ended September 30, 2012. The decrease was due to the $50.5
million Canadian derivative settlement in 2012, offset somewhat by an increase in distributions paid of $21.4 million in the current twelve-month period. 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 was scheduled to mature in December of 2017 and bore interest at a rate of LIBOR plus 300 bps, with a LIBOR floor of 100 bps.
The Amended 2010 Credit Agreement also included 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, was scheduled to mature in July of 2015, also provided for the issuance of documentary and standby letters of credit.
In March 2013,we issued $500 million of 5.25% 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 2013 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 include a revolving credit facility of a combined $255 million. Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility has a limit of $15 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 50 bps per annum on the unused portion of the credit facilities.
At the end of the quarter, we had a total of $628.4 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $901.4 million of fixed-rate debt (including OID), $58.0 million outstanding borrowings under our revolving credit facility, and cash on hand of $43.6 million. After letters of credit, which totaled $16.4 million at June 30, 2013, we had $180.6 million of available borrowings under the revolving credit facility under the 2013 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%.
In February 2011, we amended our 2010 Credit Agreement (as so amended, the "Amended 2010 Credit Agreement") to provide a $1,175 million senior secured term loan facility with interest at a rate of LIBOR plus 300 bps along with a LIBOR floor of 100 bps. The amendment extended the maturity date of the term loan portion of the credit facilities to December 2018. The Amended 2010 Credit Agreement also included 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 was scheduled to mature in July of 2015, also provided for the issuance of documentary and standby letters of credit.
In March 2013, we issued $500 million of 5.25% senior unsecured notes, maturing in 2021, in a private placement, with no OID. 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%.
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 2013 Credit Agreement were used to repay in full all amounts outstanding under the Amended 2010 Credit Agreement. 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 include a revolving credit facility of a combined $255 million. The Canadian portion of the revolving credit facility has a limit of $15 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 50 bps per annum on the unused portion of the credit facilities. At the end of the quarter, we had a total of $628.4 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $901.6 million of fixed-rate debt (including OID), no outstanding borrowings under our revolving credit facility, and cash on hand of $183.5 million. After letters of credit, which totaled $16.4 million at September 29, 2013, we had $238.6 million of available borrowings under the revolving credit facility. In order to maintainlock in fixed interest costs on a portion of our domestic term debt, in September 2010 we entered into several forward-starting swap agreements ("September 2010 swaps") to effectively convert a total of $600 million of variable-rate debt to fixed rates beginning in October 2011. As a result of the February 2011 amendment to the 2010 Credit Agreement, the LIBOR floor on the term loan portion of its 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 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 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 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 was 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 (together referred to as the "Combination 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 swapsCombination Swaps were jointly designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.33%. At the time of the de-designation, the fair market value of the September 2010 swaps and March 2011 swaps was $22.2 million, which will be amortized out of AOCI into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive income through 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. During the third quarter of 2013, the Combination Swaps were de-designated as the hedge effectiveness testing indicated that these swaps would be ineffective throughout the remaining periods until maturity. This de-designation had no effect on the unaudited condensed consolidated statements of operations as previous amounts recorded in AOCI had already been accounted for on March 6, 2013. During the third quarter of 2013, the Partnership entered into three forward-starting interest rate swap agreements ("2013 forwards") that will effectively convert $400 million of variable-rate debt to fixed rates beginning in December of 2015. These swaps, which were designated as cash flow hedges, mature on December 31, 2018 and fix LIBOR at a weighted average rate of 3.00%. In October 2013, the Partnership entered into an additional forward-starting interest rate swap agreement ("October 2013 swaps") that will effectively convert $100 million of variable-rate debt to a 2.70% fixed rate beginning in December of 2015. At June 30,September 29, 2013, the fair market value of the September 2010 swaps, the March 2011 swaps and the March 2013 swapsderivative portfolio was a liability of $20.131.6 million, which was recorded in “Derivative Liability” on the condensed consolidated balance sheet. The May 2011 swaps had a fair market value of $6.7 million as of June 30, 2013 and was recorded in “Derivative Liability” on the condensed consolidated balance sheet.
The following table presents our September 20102013 forwards and the October 2013 swaps March 2011 swaps,which mature in December 2018, and the Combination Swaps and May 2011 swaps, and March 2013 swaps which mature December 15, 2015, along with their notional amounts and their fixed interest rates. | | | | | | | | | | | | | | | | Interest Rate Swaps | ($'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 |
| | 2.43 | % | | | | | | 25,000 |
| | 2.30 | % | | | | | Total $'s / Average Rate | $ | 600,000 |
| | 2.33 | % | | $ | 200,000 |
| | 2.54 | % |
| | | | | | | | | | | | | | | | 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 |
| | 3.00 | % | | $ | 200,000 |
| | 2.27 | % | | 100,000 |
| | 3.00 | % | | 150,000 |
| | 2.43 | % | | 100,000 |
| | 3.00 | % | | 75,000 |
| | 2.30 | % | | 100,000 |
| | 2.70 | % | | 70,000 |
| | 2.54 | % | | | | | | 50,000 |
| | 2.54 | % | | | | | | 50,000 |
| | 2.54 | % | | | | | | 50,000 |
| | 2.43 | % | | | | | | 50,000 |
| | 2.29 | % | | | | | | 50,000 |
| | 2.29 | % | | | | | | 30,000 |
| | 2.54 | % | | | | | | 25,000 |
| | 2.30 | % | Total $'s / Average Rate | $ | 500,000 |
| | 2.94 | % | | $ | 800,000 |
| | 2.38 | % |
The 2013 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,and not cured, 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 secondthird quarter of 2013, this ratio was set at 6.25x 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 June 30,September 29, 2013, our Consolidated Leverage Ratio was 3.813.57x, providing $157.0184.1 million of EBITDA cushion on the ratio at the end of the secondthird quarter. We were in compliance with all other covenants under the 2013 Credit Agreement as of June 30,September 29, 2013. The 2013 Credit Agreement allows restricted payments of up to $60 million so long as no default or event of default has occurred and is continuing. Additional 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 5.0x, measured on a trailing-twelve-month quarterly basis. At June 30,September 29, 2013, the notes maturing in 2018 have the more restrictive covenants than the 2021 notes.covenants. 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 2013 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 MayAugust 8, 2013, we announced the declaration of a distribution of $0.625 per limited partner unit, which was paid on June 17,September 16, 2013, and on August 8,November 7, 2013 we announced the declaration of a distribution of $0.625$0.70 per limited partner unit, payable SeptemberDecember 16, 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 $16.4 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of June 30,September 29, 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 June 30,September 29, 2013, we had $901.4$901.6 million of fixed-rate senior unsecured notes and $628.4 million of variable-rate term debt. After considering the impact of interest rate swap agreements, virtually all of our outstanding long-term debt represents fixed-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $35$31 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt, after the fixed-rate swap agreements, would lead to a decrease of approximately $0.7 million in annual cash interest costs. A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $3.9$3.7 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 June 30,September 29, 2013, the Partnership's management has evaluated the effectiveness of the design and operation of the Partnership's disclosure controls and procedures under supervision of management, and 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 were effective as of June 30, 2013.September 29, 2013.
(b)Changes in Internal Control Over Financial Reporting - There were no changes in the Partnership’s internal control over financial reporting that occurred during the fiscal quarter ended June 30,September 29, 2013 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. On April 19, 2013 the Court of 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. On June 3, 2013 the Company filed a Notice of Appeal and Memorandum in Support of Jurisdiction with the Ohio Supreme Court related to the April 19, 2013 Court of Appeals decision. On July 2, 2013 Mr. Falfas filed a Memorandum in Opposition to Jurisdiction with the Ohio Supreme Court. TheOn September 25, 2013 the Supreme Court will review the jurisdictional memoranda filed and determine whether to acceptof Ohio accepted the appeal on Proposition of Law No. 1 related to the Supreme Court’s holding in Masetta v. National Bronze & Aluminum Foundry Co. 159 Ohio St. 306 (1953), barring specific performance as a remedy for a personal services contract under Ohio law and decide the caseits applicability to individual employment agreements. The matter will now proceed on the merits.merits and both sides will have the opportunity to file briefs with the court in support of their respective arguments. The Partnership believes the liability recorded
as of June 30,September 29, 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 ourthe Partnership's Annual Report on Form 10-K for the year ended December 31, 2012.
ITEM 5. OTHER INFORMATION
On May 8, 2013, the Partnership announced that it had identified a historical classification error in the Partnership'sits initial determination of whether a specific asset retired under the composite method of depreciation was normal or unusual. The error resulted in the overstatement of Income before taxes of $8.8 million for the period 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 would 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 beingthat was 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 substantial net book value and/or if the retirement caused a deviation from the estimated composite depreciation survivor curve as well as other minor qualitative issues.
The restatement amount of $8.8 million iswas recorded in Loss on impairment / retirement of fixed assets, net in the Annual Report on Form 10-K/A filing to correct the previous error.
As disclosed in the Partnership's prior filings, the Partnership 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 be recorded in the Consolidated Statements of Operations and Comprehensive Income.
ITEM 6. EXHIBITS | | | | Exhibit (10.1) | | Amendment No. 1 dated September 30, 2013 to the 2013 Credit Agreement dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with Matthew A. Ouimet, dated October 21, 2013. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013. | | | | 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 June 30,September 29, 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: | August 8,November 7, 2013 | /s/ Matthew A. Ouimet | | | Matthew A. Ouimet | | | President and Chief Executive Officer | | | | | Date: | August 8,November 7, 2013 | /s/ Brian C. Witherow | | | Brian C. Witherow | | | Executive Vice President and | | | Chief Financial Officer |
INDEX TO EXHIBITS | | | | Exhibit (10.1) | | Amendment No. 1 dated September 30, 2013 to the 2013 Credit Agreement dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with Matthew A. Ouimet, dated October 21, 2013. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013. | | | | 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 June 30,September 29, 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 | $ | 600,000 |
| | 2.33 | % | | $ | 200,000 |
| | 2.54 | % | $ | 400,000 |
| | 3.00 | % | | $ | 800,000 |
| | 2.38 | % |
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the three-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps | | $ | — |
| | $ | (2,866 | ) | | Interest Expense | | $ | — |
| | $ | (3,221 | ) | | Net effect of swaps | | $ | 3,268 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | (5,483 | ) | | $ | 438 |
| | Interest Expense | | $ | — |
| | $ | (2,990 | ) | | Net effect of swaps | | $ | — |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (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 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps (1) | | Net effect of swaps | | 992 |
| | — |
| | | | | $ | 992 |
| | $ | — |
| | | | | | | |
| | | | | | | | | | | | (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 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps (1) | | Net effect of swaps | | 609 |
| | — |
| | | | | $ | 609 |
| | $ | — |
| | | | | | | |
| | (1) | The May 2011 interest rate swaps were de-designated in March 2013. The Combination Swaps were de-designated in July 2013. |
During the quarter ended June 30,September 29, 2013, in addition to gains of $3.3 million and $1.00.6 million 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), $2.0 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 these amounts resulted in a benefitcharge to earnings of $2.31.4 million recorded in “Net effect of swaps.”
For the three-month period ended July 1,September 30, 2012, $0.2 million of expenseincome representing the amortization of amounts in AOCI was recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The effect of this amortization resulted in a benefit to earnings of $0.2 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the six-monthnine-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | Six months ended | | Six months ended | | | | Six months ended | | Six months ended | | | | Six months ended | | Six months ended | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps | | $ | 2,266 |
| | $ | (2,746 | ) | | Interest Expense | | $ | (2,797 | ) | | $ | (6,014 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | (3,217 | ) | | $ | (2,308 | ) | | Interest Expense | | $ | (2,797 | ) | | $ | (9,004 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Six months ended | | Six months ended | | | | 6/30/13 | | 7/1/12 | 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 | | (479 | ) | | — |
| | | | | $ | (479 | ) | | $ | 1,279 |
| | | | | | | |
| | | | | | | | | | | | (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 | | | | 9/29/13 | | 9/30/12 | 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 | | 130 |
| | — |
| | | | | $ | 130 |
| | $ | 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. The Combination Swaps were de-designated in July 2013. |
During the six-monthnine-month period ended June 30,September 29, 2013, in addition to the $3.7 million gain recognized in income on the ineffective portion of derivatives and $0.50.1 million lossgain on the derivatives not designated as cash flow hedges (as noted in the tables above), $7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $2.34.3 million of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the quarter.period. The effect of these amounts resulted in a charge to earnings of $6.98.3 million recorded in “Net effect of swaps.”
For the six-monthnine-month period ended July 1,September 30, 2012, in addition to the $1.3 million gain recognized in income on the ineffective portion of derivatives noted in the tables above, $0.40.2 million of expense representing the amortization of amounts in AOCI for the swaps and $0.2 million of foreign currency gain in the quarterperiod 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 $1.11.3 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 June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps | | $ | 5,152 |
| | $ | (18,396 | ) | | Interest Expense | | $ | (8,810 | ) | | $ | (9,037 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | 20,193 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | (769 | ) | | $ | (873 | ) | | Interest Expense | | $ | (5,820 | ) | | $ | (12,027 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | 4,797 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (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 | | | | 6/30/13 | | 7/1/12 | Cross-currency swaps (1) | | Net effect of swaps | | — |
| | 9,139 |
| Foreign currency swaps | | Net effect of swaps | | — |
| | (3,081 | ) | Interest rate swaps (2) | | Net effect of swaps | | $ | (479 | ) | | $ | — |
| | | | | $ | (479 | ) | | $ | 6,058 |
| | | | | | | |
| | | | | | | | | | | | (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 | | | | 9/29/13 | | 9/30/12 | Cross-currency swaps (1) | | Net effect of swaps | | — |
| | (4,483 | ) | Foreign currency swaps | | Net effect of swaps | | — |
| | 10,129 |
| Interest rate swaps (2) | | Net effect of swaps | | $ | 130 |
| | $ | — |
| | | | | $ | 130 |
| | $ | 5,646 |
| | | | | | | |
| | (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. The Combination Swaps were de-designated in July 2013. |
In addition to the $3.7 million gain recognized in income on the ineffective portion of derivatives and $0.50.1 million lossgain recognized in income on the ineffective portion of derivatives not designated as cash flow hedges (as noted in the tables above), $7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $2.04.1 million of expense representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended June 30,September 29, 2013 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 $6.68.1 million recorded in “Net effect of swaps.” For the twelve monthtwelve-month period ending July 1,September 30, 2012, in addition to the $20.24.8 million gain recognized in income on the ineffective portion of derivatives designated as derivatives and $6.15.6 million of gain recognized in income on the ineffective portion of derivatives not designated as derivatives noted in the tables above, $11.30.1 million of expenseincome representing the amortization of amounts in AOCI for the swaps and a $0.30.4 million foreign currency lossgain in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended July 1,September 30, 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 $14.710.9 million recorded in “Net effect of swaps.” The amounts reclassified from AOCI into income for the periods noted above are primarily 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 June 30,September 29, 2013, December 31, 2012, and July 1,September 30, 2012 on a recurring basis: | | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | June 30, 2013 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (20,122 | ) | | $ | — |
| | $ | (20,122 | ) | | $ | — |
| Interest rate swap agreements (2) | | (6,650 | ) | | — |
| | (6,650 | ) | | — |
| Net derivative liability | | $ | (26,772 | ) | | $ | — |
| | $ | (26,772 | ) | | $ | — |
| | | | | | | | | | December 31, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | July 1, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (35,146 | ) | | $ | — |
| | $ | (35,146 | ) | | $ | — |
| Net derivative liability | | $ | (35,146 | ) | | $ | — |
| | $ | (35,146 | ) | | $ | — |
|
| | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | September 29, 2013 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (5,483 | ) | | $ | — |
| | $ | (5,483 | ) | | $ | — |
| Interest rate swap agreements (2) | | (26,163 | ) | | — |
| | (26,163 | ) | | — |
| Net derivative liability | | $ | (31,646 | ) | | $ | — |
| | $ | (31,646 | ) | | $ | — |
| | | | | | | | | | December 31, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | September 30, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| Net derivative liability | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
|
| | (1) | Designated as cash flow hedges and are included in “Derivative Liability” on the Unaudited Condensed Consolidated Balance Sheet |
| | (2) | Not designated as cash flow hedges and are included in "Derivative Liability" on the Unaudited Condensed Consolidated Balance Sheet |
Fair values of the interest rate swap agreements are determined using significant inputs, including the LIBOR 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 $0.70.9 million as of June 30,September 29, 2013. The carrying value of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximates fair value because of the short maturity of these instruments. There were no assets measured at fair value on a non-recurring basis at June 30,September 29, 2013 or July 1,September 30, 2012, 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. The fair value of term debt at June 30,September 29, 2013 was approximately $630.0627.6 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 June 30,September 29, 2013 was approximately $913.2922.0 million based on public trading levels as of that date. The fair value of the term debt was based on Level 2 inputs and the notes were based on Level 1 inputs.
(8) Earnings per Unit: Net income (loss) per limited partner unit is calculated based on the following unit amounts: | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Six months ended | Twelve months ended | | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | 6/30/2013 | | 7/1/2012 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,484 |
| | 55,481 |
| | 55,464 |
| | 55,433 |
| 55,446 |
| | 55,389 |
| Effect of dilutive units: | | | | | | | | | | | | Unit options and restricted unit awards | | 152 |
| | 2 |
| | — |
| | — |
| 84 |
| | 3 |
| Phantom units | | 186 |
| | 335 |
| | — |
| | — |
| 261 |
| | 452 |
| Diluted weighted average units outstanding | | 55,822 |
| | 55,818 |
| | 55,464 |
| | 55,433 |
| 55,791 |
| | 55,844 |
| Net income (loss) per unit - basic | | $ | 0.85 |
| | $ | 0.66 |
| | $ | (1.11 | ) | | $ | (0.52 | ) | $ | 1.24 |
| | $ | 2.11 |
| Net income (loss) per unit - diluted | | $ | 0.85 |
| | $ | 0.66 |
| | $ | (1.11 | ) | | $ | (0.52 | ) | $ | 1.24 |
| | $ | 2.10 |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | Twelve months ended | | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | 9/29/2013 | | 9/30/2012 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,485 |
| | 55,611 |
| | 55,472 |
| | 55,473 |
| 55,460 |
| | 55,440 |
| Effect of dilutive units: | | | | | | | | | | | | Unit options and restricted unit awards | | 189 |
| | 45 |
| | 146 |
| | 42 |
| 120 |
| | 31 |
| Phantom units | | 189 |
| | 336 |
| | 185 |
| | 333 |
| 224 |
| | 416 |
| Diluted weighted average units outstanding | | 55,863 |
| | 55,992 |
| | 55,803 |
| | 55,848 |
| 55,804 |
| | 55,887 |
| Net income per unit - basic | | $ | 3.43 |
| | $ | 2.54 |
| | $ | 2.32 |
| | $ | 2.02 |
| $ | 2.13 |
| | $ | 1.91 |
| Net income per unit - diluted | | $ | 3.41 |
| | $ | 2.52 |
| | $ | 2.31 |
| | $ | 2.01 |
| $ | 2.12 |
| | $ | 1.89 |
| | | | | | | | | | | | |
The effect of unit options on the three, sixnine and twelve months ended June 30,September 29, 2013, had they not been out of the money or antidilutive, would have been zero, 8,9007,000, and 8,5004,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three, sixnine and twelve months ended July 1,September 30, 2012, had they not been out of the money or antidilutive, would have been 66,000, 31,00034,000 and 41,50036,000 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. 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. As of the secondthird quarter of 2013 the Partnership has recorded $1.1 million of 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) Restatement:
We haveThe Partnership has made the following correction relating to ourits use of the composite depreciation method.
This correction, which impacts the Balance Sheet at July 1,September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three, six,three-, nine-, and twelve monthtwelve-month periods ended July 1,September 30, 2012, reflects a subsequent determination that a disposition from ourthe Partnership's 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 reviewed in connection with respondinga response to an SEC comment letter. WeThe Partnership ultimately concluded that such disposition was unusual and that an $8.8 million charge should be reflected in the 2011 financial statements.
The tables below reflect the impact on the financial statements of the correction as described above.
| | | | | Balance Sheet | | (In thousands) | 7/1/2012 | Accumulated depreciation | | As filed | $ | (1,111,530 | ) | Correction | (8,369 | ) | As restated | $ | (1,119,899 | ) | Total assets | | As filed | $ | 2,141,898 |
| Correction | (8,369 | ) | As restated | $ | 2,133,529 |
| Deferred Tax Liability | | As filed | $ | 137,288 |
| Correction | (3,180 | ) | As restated | $ | 134,108 |
| Limited Partners' Equity | | As filed | $ | 93,946 |
| Correction | (5,189 | ) | As restated | $ | 88,757 |
|
| | | | | Balance Sheet | | (In thousands) | 9/30/2012 | Accumulated depreciation | | As filed | $ | (1,175,744 | ) | Correction | (7,845 | ) | As restated | $ | (1,183,589 | ) | Total assets | | As filed | $ | 2,089,837 |
| Correction | (7,845 | ) | As restated | $ | 2,081,992 |
| Deferred Tax Liability | | As filed | $ | 143,094 |
| Correction | (2,981 | ) | As restated | $ | 140,113 |
| Limited Partners' Equity | | As filed | $ | 212,797 |
| Correction | (4,864 | ) | As restated | $ | 207,933 |
|
| | | | | | | | | | | | | | Statements of Operations and Other Comprehensive Income | (In thousands except per unit amounts) | | Three months ended | | Six months ended | | Twelve months ended | | | 7/1/2012 | | 7/1/2012 | | 7/1/2012 | Depreciation and amortization | | | | | | | As filed | | $ | 48,330 |
| | $ | 52,409 |
| | $ | 130,837 |
| Correction | | (421 | ) | | (421 | ) | | (421 | ) | As restated | | $ | 47,909 |
| | $ | 51,988 |
| | $ | 130,416 |
| Loss (gain) on impairment / retirement of fixed assets, net | | | | | | | As filed | | $ | (862 | ) | | $ | (770 | ) | | $ | 1,599 |
| Correction | | — |
| | — |
| | 8,790 |
| As restated | | $ | (862 | ) | | $ | (770 | ) | | $ | 10,389 |
| Income (loss) before tax | | | | | | | As filed | | $ | 47,543 |
| | $ | (39,411 | ) | | $ | 139,267 |
| Correction | | 421 |
| | 421 |
| | (8,369 | ) | As restated | | $ | 47,964 |
| | $ | (38,990 | ) | | $ | 130,898 |
| Provision (benefit) for taxes | | | | | | As filed | | $ | 11,221 |
| | $ | (10,318 | ) | | $ | 16,970 |
| Correction | | 160 |
| | 160 |
| | (3,180 | ) | As restated | | $ | 11,381 |
| | $ | (10,158 | ) | | $ | 13,790 |
| Net income (loss) | | | | | | As filed | | $ | 36,322 |
| | $ | (29,093 | ) | | $ | 122,297 |
| Correction | | 261 |
| | 261 |
| | (5,189 | ) | As restated | | $ | 36,583 |
| | $ | (28,832 | ) | | $ | 117,108 |
| | | | | | | | Basic earnings per limited partner unit: | | | | | | As filed | | $ | 0.65 |
| | $ | (0.52 | ) | | $ | 2.21 |
| Correction | | 0.01 |
| | — |
| | (0.10 | ) | As restated | | $ | 0.66 |
| | $ | (0.52 | ) | | $ | 2.11 |
| | | | | | | | Diluted earnings per limited partner unit: | | | | | | As filed | | $ | 0.65 |
| | $ | (0.52 | ) | | $ | 2.19 |
| Correction | | 0.01 |
| | — |
| | (0.09 | ) | As restated | | $ | 0.66 |
| | $ | (0.52 | ) | | $ | 2.10 |
|
| | | | | | | | | | | | | | Statements of Operations and Other Comprehensive Income | (In thousands except per unit amounts) | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/30/2012 | | 9/30/2012 | | 9/30/2012 | Depreciation and amortization | | | | | | | As filed | | $ | 60,747 |
| | $ | 113,156 |
| | $ | 128,136 |
| Correction | | (524 | ) | | (945 | ) | | (945 | ) | As restated | | $ | 60,223 |
| | $ | 112,211 |
| | $ | 127,191 |
| Loss (gain) on impairment / retirement of fixed assets, net | | | | | | | As filed | | $ | 25,000 |
| | $ | 24,230 |
| | $ | 25,719 |
| Correction | | — |
| | — |
| | 8,790 |
| As restated | | $ | 25,000 |
| | $ | 24,230 |
| | $ | 34,509 |
| Income (loss) before tax | | | | | | | As filed | | $ | 192,401 |
| | $ | 152,990 |
| | $ | 141,606 |
| Correction | | 524 |
| | 945 |
| | (7,845 | ) | As restated | | $ | 192,925 |
| | $ | 153,935 |
| | $ | 133,761 |
| Provision (benefit) for taxes | | | | | | As filed | | $ | 51,713 |
| | $ | 41,395 |
| | $ | 30,839 |
| Correction | | 199 |
| | 359 |
| | (2,981 | ) | As restated | | $ | 51,912 |
| | $ | 41,754 |
| | $ | 27,858 |
| Net income (loss) | | | | | | As filed | | $ | 140,688 |
| | $ | 111,595 |
| | $ | 110,767 |
| Correction | | 325 |
| | 586 |
| | (4,864 | ) | As restated | | $ | 141,013 |
| | $ | 112,181 |
| | $ | 105,903 |
| | | | | | | | Basic earnings per limited partner unit: | | | | | | As filed | | $ | 2.53 |
| | $ | 2.01 |
| | $ | 2.00 |
| Correction | | 0.01 |
| | 0.01 |
| | (0.09 | ) | As restated | | $ | 2.54 |
| | $ | 2.02 |
| | $ | 1.91 |
| | | | | | | | Diluted earnings per limited partner unit: | | | | | | As filed | | $ | 2.51 |
| | $ | 2.00 |
| | $ | 1.98 |
| Correction | | 0.01 |
| | 0.01 |
| | (0.09 | ) | As restated | | $ | 2.52 |
| | $ | 2.01 |
| | $ | 1.89 |
|
(12) Changes in Accumulated Other Comprehensive Income (Loss) by Component:
The following tables reflect the changes in Accumulated other comprehensive income (loss)Other Comprehensive Income (Loss) related to limited partners' equity for the periodthree-, nine-, and twelve-month periods ended June 30,September 29, 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 |
| | 1,893 |
| | 3,833 |
| | | | | | | | | | Amounts reclassified | | | | | | | | from accumulated | | | | | | | | other comprehensive | | | | | | | | income (2) | | 8,624 |
| | — |
| | 8,624 |
| | | | | | | | | Net current-period other | | | | | | | comprehensive income | | 10,564 |
| | 1,893 |
| | 12,457 |
| | | | | | | | | June 30, 2013 | | $ | (15,185 | ) | | $ | (858 | ) | | $ | (16,043 | ) |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at June 30, 2013 | | $ | (15,185 | ) | | $ | (858 | ) | | $ | (16,043 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (4,440 | ) | | (699 | ) | | (5,139 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 1,679 |
| | — |
| | 1,679 |
| | | | | | | | | Net current-period other comprehensive income | | (2,761 | ) | | (699 | ) | | (3,460 | ) | | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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 | | $ | 10,160 |
| | | Net effect of swaps | | | | $ | 10,160 |
| | | Total before tax | | | | (1,536 | ) | | | Provision (benefit) for taxes | | | | $ | 8,624 |
| | | Net of tax |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at December 31, 2012 | | $ | (25,749 | ) | | $ | (2,751 | ) | | $ | (28,500 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (2,500 | ) | | 1,194 |
| | (1,306 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 10,303 |
| | — |
| | 10,303 |
| | | | | | | | | Net current-period other comprehensive income | | 7,803 |
| | 1,194 |
| | 8,997 |
| | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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.
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at September 30, 2012 | | $ | (27,686 | ) | | $ | (4,371 | ) | | $ | (32,057 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (416 | ) | | 2,814 |
| | 2,398 |
| | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 10,156 |
| | — |
| | 10,156 |
| | | | | | | | | Net current-period other comprehensive income | | 9,740 |
| | 2,814 |
| | 12,554 |
| | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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 | | 3 months ended 9/29/13 | | 9 months ended 9/29/13 | | 12 months ended 9/29/13 | | | | Interest rate contracts | | $ | 1,986 |
| | $ | 12,146 |
| | $ | 11,972 |
| | Net effect of swaps | | | | $ | 1,986 |
| | $ | 12,146 |
| | $ | 11,972 |
| | Total before tax | | | | (307 | ) | | (1,843 | ) | | (1,816 | ) | | Provision (benefit) for taxes | | | | $ | 1,679 |
| | $ | 10,303 |
| | $ | 10,156 |
| | 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 June 30,September 29, 2013, December 31, 2012, and July 1,September 30, 2012 and for the three, sixnine and twelve month periods ended June 30,September 29, 2013 and July 1,September 30, 2012. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, we havethe Partnership has 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 2013 Credit Agreement, all outstanding debt has been equally reflected within each co-issuer's June 30,September 29, 2013, December 31, 2012 and July 1,September 30, 2012 balance sheets in the accompanying condensed consolidating financial statements.
The consolidating financial information has been corrected for the information described in Note 11.
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 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 | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| Receivables | | 2,960 |
| | 89,760 |
| | 86,590 |
| | 517,925 |
| | (630,036 | ) | | 67,199 |
| Inventories | | — |
| | 4,639 |
| | 4,182 |
| | 36,631 |
| | — |
| | 45,452 |
| Current deferred tax asset | | — |
| | 23,822 |
| | 816 |
| | 3,664 |
| | — |
| | 28,302 |
| Prepaid advertising | | — |
| | 9,181 |
| | 1,579 |
| | 5,854 |
| | — |
| | 16,614 |
| Other current assets | | 620 |
| | 2,259 |
| | 487 |
| | 13,908 |
| | — |
| | 17,274 |
| | | 3,580 |
| | 129,661 |
| | 115,399 |
| | 605,886 |
| | (636,057 | ) | | 218,469 |
| Property and Equipment (net) | | 463,783 |
| | 994 |
| | 250,249 |
| | 835,875 |
| | — |
| | 1,550,901 |
| Investment in Park | | 447,080 |
| | 735,017 |
| | 129,942 |
| | 38,992 |
| | (1,351,031 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 119,201 |
| | 111,218 |
| | — |
| | 239,480 |
| Other Intangibles, net | | — |
| | — |
| | 16,880 |
| | 22,839 |
| | — |
| | 39,719 |
| Deferred Tax Asset | | — |
| | 34,028 |
| | — |
| | 90 |
| | (34,118 | ) | | — |
| Intercompany Receivable | | 874,125 |
| | 1,123,159 |
| | 1,165,828 |
| | — |
| | (3,163,112 | ) | | — |
| Other Assets | | 13,605 |
| | 9,382 |
| | 7,112 |
| | 2,227 |
| | — |
| | 32,326 |
| | | $ | 1,811,234 |
| | $ | 2,032,241 |
| | $ | 1,804,611 |
| | $ | 1,617,127 |
| | $ | (5,184,318 | ) | | $ | 2,080,895 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 155,522 |
| | 208,924 |
| | 7,971 |
| | 285,379 |
| | (623,457 | ) | | 34,339 |
| Deferred revenue | | — |
| | — |
| | 18,719 |
| | 113,646 |
| | — |
| | 132,365 |
| Accrued interest | | 5,189 |
| | 3,563 |
| | 15,192 |
| | — |
| | — |
| | 23,944 |
| Accrued taxes | | 6,534 |
| | 458 |
| | 181 |
| | 2,848 |
| | — |
| | 10,021 |
| Accrued salaries, wages and benefits | | 1 |
| | 18,642 |
| | 2,153 |
| | 9,100 |
| | — |
| | 29,896 |
| Self-insurance reserves | | — |
| | 5,535 |
| | 1,727 |
| | 17,330 |
| | — |
| | 24,592 |
| Other accrued liabilities | | 860 |
| | 4,421 |
| | 715 |
| | 2,793 |
| | — |
| | 8,789 |
| | | 174,406 |
| | 247,843 |
| | 52,958 |
| | 431,096 |
| | (636,057 | ) | | 270,246 |
| Deferred Tax Liability | | — |
| | — |
| | 61,544 |
| | 126,866 |
| | (34,118 | ) | | 154,292 |
| Derivative Liability | | 16,039 |
| | 10,733 |
| | — |
| | — |
| | — |
| | 26,772 |
| Other Liabilities | | — |
| | 5,296 |
| | — |
| | 3,500 |
| | — |
| | 8,796 |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 58,000 |
| | 58,000 |
| | 58,000 |
| | — |
| | (116,000 | ) | | 58,000 |
| Term debt | | 622,125 |
| | 622,125 |
| | 622,125 |
| | — |
| | (1,244,250 | ) | | 622,125 |
| Notes | | 901,431 |
| | 901,431 |
| | 901,431 |
| | — |
| | (1,802,862 | ) | | 901,431 |
| | | 1,581,556 |
| | 1,581,556 |
| | 1,581,556 |
| | — |
| | (3,163,112 | ) | | 1,581,556 |
| | | | | | | | | | | | | | Equity | | 39,233 |
| | 186,813 |
| | 108,553 |
| | 1,055,665 |
| | (1,351,031 | ) | | 39,233 |
| | | $ | 1,811,234 |
| | $ | 2,032,241 |
| | $ | 1,804,611 |
| | $ | 1,617,127 |
| | $ | (5,184,318 | ) | | $ | 2,080,895 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET September 29, 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 | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| Receivables | | 12 |
| | 124,478 |
| | 70,303 |
| | 589,797 |
| | (742,056 | ) | | 42,534 |
| Inventories | | — |
| | 1,578 |
| | 2,090 |
| | 25,648 |
| | — |
| | 29,316 |
| Current deferred tax asset | | — |
| | 3,708 |
| | 816 |
| | 3,661 |
| | — |
| | 8,185 |
| Income tax refundable | | — |
| | — |
| | 662 |
| | — |
| | — |
| | 662 |
| Other current assets | | 995 |
| | 3,558 |
| | 613 |
| | 3,798 |
| | — |
| | 8,964 |
| | | 134,007 |
| | 135,615 |
| | 110,671 |
| | 634,906 |
| | (742,056 | ) | | 273,143 |
| Property and Equipment (net) | | 450,205 |
| | 985 |
| | 248,484 |
| | 815,000 |
| | — |
| | 1,514,674 |
| Investment in Park | | 548,241 |
| | 824,356 |
| | 143,548 |
| | 81,719 |
| | (1,597,864 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 121,657 |
| | 111,218 |
| | — |
| | 241,936 |
| Other Intangibles, net | | — |
| | — |
| | 17,228 |
| | 22,797 |
| | — |
| | 40,025 |
| Deferred Tax Asset | | — |
| | 30,316 |
| | — |
| | 90 |
| | (30,406 | ) | | — |
| Intercompany Receivable | | 877,010 |
| | 1,069,069 |
| | 1,113,983 |
| | — |
| | (3,060,062 | ) | | — |
| Other Assets | | 13,196 |
| | 9,031 |
| | 6,902 |
| | 2,140 |
| | — |
| | 31,269 |
| | | $ | 2,031,720 |
| | $ | 2,069,372 |
| | $ | 1,762,473 |
| | $ | 1,667,870 |
| | $ | (5,430,388 | ) | | $ | 2,101,047 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 281,983 |
| | 159,781 |
| | 7,802 |
| | 314,367 |
| | (742,056 | ) | | 21,877 |
| Deferred revenue | | — |
| | — |
| | 1,951 |
| | 35,676 |
| | — |
| | 37,627 |
| Accrued interest | | 2,677 |
| | 1,593 |
| | 5,983 |
| | — |
| | — |
| | 10,253 |
| Accrued taxes | | 5,413 |
| | 29,386 |
| | — |
| | 4,594 |
| | — |
| | 39,393 |
| Accrued salaries, wages and benefits | | 1 |
| | 27,622 |
| | 2,154 |
| | 9,844 |
| | — |
| | 39,621 |
| Self-insurance reserves | | — |
| | 5,545 |
| | 1,896 |
| | 16,647 |
| | — |
| | 24,088 |
| Other accrued liabilities | | 991 |
| | 4,077 |
| | 694 |
| | 1,856 |
| | — |
| | 7,618 |
| | | 297,365 |
| | 234,304 |
| | 26,780 |
| | 382,984 |
| | (754,656 | ) | | 186,777 |
| Deferred Tax Liability | | — |
| | — |
| | 61,143 |
| | 126,866 |
| | (30,406 | ) | | 157,603 |
| Derivative Liability | | 18,407 |
| | 13,239 |
| | — |
| | — |
| | — |
| | 31,646 |
| Other Liabilities | | — |
| | 5,573 |
| | — |
| | 3,500 |
| | — |
| | 9,073 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 622,125 |
| | 622,125 |
| | 622,125 |
| | — |
| | (1,244,250 | ) | | 622,125 |
| Notes | | 901,606 |
| | 901,606 |
| | 901,606 |
| | — |
| | (1,803,212 | ) | | 901,606 |
| | | 1,523,731 |
| | 1,523,731 |
| | 1,523,731 |
| | — |
| | (3,047,462 | ) | | 1,523,731 |
| | | | | | | | | | | | | | Equity | | 192,217 |
| | 292,525 |
| | 150,819 |
| | 1,154,520 |
| | (1,597,864 | ) | | 192,217 |
| | | $ | 2,031,720 |
| | $ | 2,069,372 |
| | $ | 1,762,473 |
| | $ | 1,667,870 |
| | $ | (5,430,388 | ) | | $ | 2,101,047 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET December 31, 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 | | $ | 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 BALANCE SHEET
July 1, 2012 (As restated)
(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 | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
| Receivables | | — |
| | 71,210 |
| | 64,931 |
| | 436,324 |
| | (529,512 | ) | | 42,953 |
| Inventories | | — |
| | 4,861 |
| | 4,663 |
| | 41,712 |
| | — |
| | 51,236 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Prepaid advertising | | — |
| | 10,181 |
| | 596 |
| | 5,473 |
| | — |
| | 16,250 |
| Income tax refundable | | — |
| | — |
| | 10,083 |
| | — |
| | — |
| | 10,083 |
| Other current assets | | 800 |
| | 2,971 |
| | 908 |
| | 4,660 |
| | — |
| | 9,339 |
| | | 800 |
| | 95,462 |
| | 95,927 |
| | 518,979 |
| | (535,033 | ) | | 176,135 |
| Property and Equipment (net) | | 465,146 |
| | 1,025 |
| | 272,511 |
| | 882,682 |
| | — |
| | 1,621,364 |
| Investment in Park | | 471,253 |
| | 701,181 |
| | 114,053 |
| | 21,834 |
| | (1,308,321 | ) | | — |
| Intercompany Note Receivable | | — |
| | 86,362 |
| | — |
| | — |
| | (86,362 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 122,960 |
| | 111,218 |
| | — |
| | 243,239 |
| Other Intangibles, net | | — |
| | — |
| | 17,412 |
| | 22,837 |
| | — |
| | 40,249 |
| Deferred Tax Asset | | — |
| | 43,471 |
| | — |
| | — |
| | (43,471 | ) | | — |
| Intercompany Receivable | | 880,971 |
| | 1,186,016 |
| | 1,236,507 |
| | — |
| | (3,303,494 | ) | | — |
| Other Assets | | 24,678 |
| | 16,454 |
| | 9,010 |
| | 2,400 |
| | — |
| | 52,542 |
| | | $ | 1,851,909 |
| | $ | 2,129,971 |
| | $ | 1,868,380 |
| | $ | 1,559,950 |
| | $ | (5,276,681 | ) | | $ | 2,133,529 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 108,234 |
| | $ | 233,508 |
| | $ | 14,320 |
| | $ | 217,263 |
| | $ | (535,033 | ) | | $ | 38,292 |
| Deferred revenue | | — |
| | — |
| | 19,946 |
| | 88,521 |
| | — |
| | 108,467 |
| Accrued interest | | 481 |
| | 195 |
| | 15,353 |
| | — |
| | — |
| | 16,029 |
| Accrued taxes | | 7,083 |
| | 571 |
| | 59 |
| | 3,027 |
| | — |
| | 10,740 |
| Accrued salaries, wages and benefits | | 1 |
| | 26,108 |
| | 2,410 |
| | 9,190 |
| | — |
| | 37,709 |
| Self-insurance reserves | | — |
| | 4,280 |
| | 1,771 |
| | 17,147 |
| | — |
| | 23,198 |
| Other accrued liabilities | | 953 |
| | 4,489 |
| | 935 |
| | 2,275 |
| | — |
| | 8,652 |
| | | 116,752 |
| | 269,151 |
| | 54,794 |
| | 337,423 |
| | (535,033 | ) | | 243,087 |
| Deferred Tax Liability | | — |
| | — |
| | 58,162 |
| | 119,417 |
| | (43,471 | ) | | 134,108 |
| Derivative Liability | | 21,090 |
| | 14,056 |
| | — |
| | — |
| | — |
| | 35,146 |
| Other Liabilities | | — |
| | 3,621 |
| | — |
| | 3,500 |
| | — |
| | 7,121 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 86,362 |
| | (86,362 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 111,000 |
| | 111,000 |
| | 111,000 |
| | — |
| | (222,000 | ) | | 111,000 |
| Term debt | | 1,140,100 |
| | 1,140,100 |
| | 1,140,100 |
| | — |
| | (2,280,200 | ) | | 1,140,100 |
| Notes | | 400,647 |
| | 400,647 |
| | 400,647 |
| | — |
| | (801,294 | ) | | 400,647 |
| | | 1,651,747 |
| | 1,651,747 |
| | 1,651,747 |
| | — |
| | (3,303,494 | ) | | 1,651,747 |
| | | | | | | | | | | | | | Equity | | 62,320 |
| | 191,396 |
| | 103,677 |
| | 1,013,248 |
| | (1,308,321 | ) | | 62,320 |
| | | $ | 1,851,909 |
| | $ | 2,129,971 |
| | $ | 1,868,380 |
| | $ | 1,559,950 |
| | $ | (5,276,681 | ) | | $ | 2,133,529 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)BALANCE SHEET For the Three Months Ended September 30, 2012June 30, 2013 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 43,925 |
| | $ | 85,358 |
| | $ | 34,954 |
| | $ | 326,473 |
| | $ | (129,090 | ) | | $ | 361,620 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 2,994 |
| | 28,059 |
| | — |
| | 31,053 |
| Operating expenses | | 1,408 |
| | 52,246 |
| | 15,586 |
| | 201,134 |
| | (129,090 | ) | | 141,284 |
| Selling, general and administrative | | 1,222 |
| | 26,888 |
| | 3,868 |
| | 13,789 |
| | — |
| | 45,767 |
| Depreciation and amortization | | 12,891 |
| | 9 |
| | 6,818 |
| | 26,314 |
| | — |
| | 46,032 |
| Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | — |
| | 29 |
| | — |
| | 29 |
| | | 15,521 |
| | 79,143 |
| | 29,266 |
| | 269,325 |
| | (129,090 | ) | | 264,165 |
| Operating income | | 28,404 |
| | 6,215 |
| | 5,688 |
| | 57,148 |
| | — |
| | 97,455 |
| Interest expense (income), net | | 10,210 |
| | 7,246 |
| | 9,843 |
| | (1,507 | ) | | — |
| | 25,792 |
| Net effect of swaps | | (1,378 | ) | | (895 | ) | | — |
| | — |
| | — |
| | (2,273 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,886 |
| | — |
| | — |
| | 14,886 |
| Other (income) expense | | 187 |
| | (2,128 | ) | | 583 |
| | 1,358 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | (30,875 | ) | | (15,540 | ) | | (8,232 | ) | | 4,649 |
| | 49,998 |
| | — |
| Net income (loss) before taxes | | 50,260 |
| | 17,532 |
| | (11,392 | ) | | 52,648 |
| | (49,998 | ) | | 59,050 |
| Provision (benefit) for taxes | | 2,870 |
| | 684 |
| | (6,732 | ) | | 14,838 |
| | — |
| | 11,660 |
| Net income (loss) | | $ | 47,390 |
| | $ | 16,848 |
| | $ | (4,660 | ) | | $ | 37,810 |
| | $ | (49,998 | ) | | $ | 47,390 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,592 |
| | — |
| | 1,592 |
| | — |
| | (1,592 | ) | | 1,592 |
| Unrealized income on cash flow hedging derivatives | | 1,679 |
| | 503 |
| | — |
| | — |
| | (503 | ) | | 1,679 |
| Other comprehensive income, (net of tax) | | 3,271 |
| | 503 |
| | 1,592 |
| | — |
| | (2,095 | ) | | 3,271 |
| Total Comprehensive (Income) loss | | $ | 50,661 |
| | $ | 17,351 |
| | $ | (3,068 | ) | | $ | 37,810 |
| | $ | (52,093 | ) | | $ | 50,661 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 856,276 |
| | — |
| | 1,555,999 |
| Investment in Park | | 572,748 |
| | 786,753 |
| | 115,271 |
| | 60,141 |
| | (1,534,913 | ) | | — |
| 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 |
| | | $ | 1,952,057 |
| | $ | 2,032,761 |
| | $ | 1,778,266 |
| | $ | 1,578,075 |
| | $ | (5,259,167 | ) | | $ | 2,081,992 |
| 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 |
| | 119,971 |
| | (39,320 | ) | | 140,113 |
| 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 | | 181,167 |
| | 291,041 |
| | 140,674 |
| | 1,103,198 |
| | (1,534,913 | ) | | 181,167 |
| | | $ | 1,952,057 |
| | $ | 2,032,761 |
| | $ | 1,778,266 |
| | $ | 1,578,075 |
| | $ | (5,259,167 | ) | | $ | 2,081,992 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Three Months Ended July 1,September 29, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 83,285 |
| | $ | 161,866 |
| | $ | 82,265 |
| | $ | 509,467 |
| | $ | (244,807 | ) | | $ | 592,076 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,082 |
| | 39,761 |
| | — |
| | 45,843 |
| Operating expenses | | 1,669 |
| | 76,468 |
| | 19,042 |
| | 318,022 |
| | (244,807 | ) | | 170,394 |
| Selling, general and administrative | | 1,796 |
| | 38,083 |
| | 4,781 |
| | 14,067 |
| | — |
| | 58,727 |
| Depreciation and amortization | | 18,306 |
| | 10 |
| | 8,979 |
| | 30,200 |
| | — |
| | 57,495 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | Loss on impairment / retirement of fixed assets, net | | 368 |
| | — |
| | 1 |
| | 1,268 |
| | — |
| | 1,637 |
| | | 22,139 |
| | 114,561 |
| | 38,885 |
| | 394,575 |
| | (244,807 | ) | | 325,353 |
| Operating income | | 61,146 |
| | 47,305 |
| | 43,380 |
| | 114,892 |
| | — |
| | 266,723 |
| Interest expense (income), net | | 10,858 |
| | 6,901 |
| | 9,731 |
| | (1,978 | ) | | — |
| | 25,512 |
| Net effect of swaps | | 810 |
| | 567 |
| | — |
| | — |
| | — |
| | 1,377 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | (8,615 | ) | | — |
| | — |
| | (8,615 | ) | Other (income) expense | | 188 |
| | (2,129 | ) | | 584 |
| | 1,357 |
| | — |
| | — |
| Income from investment in affiliates | | (146,054 | ) | | (78,714 | ) | | (13,606 | ) | | (40,904 | ) | | 279,278 |
| | — |
| Net income before taxes | | 195,344 |
| | 120,680 |
| | 55,286 |
| | 156,417 |
| | (279,278 | ) | | 248,449 |
| Provision for taxes | | 4,920 |
| | 14,537 |
| | 14,390 |
| | 24,178 |
| | — |
| | 58,025 |
| Net income | | $ | 190,424 |
| | $ | 106,143 |
| | $ | 40,896 |
| | $ | 132,239 |
| | $ | (279,278 | ) | | $ | 190,424 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (699 | ) | | — |
| | (699 | ) | | — |
| | 699 |
| | (699 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (2,761 | ) | | (1,202 | ) | | — |
| | — |
| | 1,202 |
| | (2,761 | ) | Other comprehensive income (loss), (net of tax) | | (3,460 | ) | | (1,202 | ) | | (699 | ) | | — |
| | 1,901 |
| | (3,460 | ) | Total Comprehensive Income | | $ | 186,964 |
| | $ | 104,941 |
| | $ | 40,197 |
| | $ | 132,239 |
| | $ | (277,377 | ) | | $ | 186,964 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 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 | | $ | 43,745 |
| | $ | 77,510 |
| | $ | 41,841 |
| | $ | 315,637 |
| | $ | (121,127 | ) | | $ | 357,606 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 3,541 |
| | 28,945 |
| | — |
| | 32,486 |
| Operating expenses | | 1,438 |
| | 52,584 |
| | 15,935 |
| | 197,406 |
| | (121,127 | ) | | 146,236 |
| Selling, general and administrative | | 1,656 |
| | 24,525 |
| | 4,295 |
| | 14,035 |
| | — |
| | 44,511 |
| Depreciation and amortization | | 13,531 |
| | 9 |
| | 6,985 |
| | 27,384 |
| | — |
| | 47,909 |
| Loss (gain) on impairment / retirement of fixed assets, net | | (861 | ) | | — |
| | (1 | ) | | — |
| | — |
| | (862 | ) | | | 15,764 |
| | 77,118 |
| | 30,755 |
| | 267,770 |
| | (121,127 | ) | | 270,280 |
| Operating income | | 27,981 |
| | 392 |
| | 11,086 |
| | 47,867 |
| | — |
| | 87,326 |
| Interest expense, net | | 13,067 |
| | 8,084 |
| | 10,598 |
| | (1,515 | ) | | — |
| | 30,234 |
| Net effect of swaps | | (104 | ) | | (69 | ) | | — |
| | — |
| | — |
| | (173 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | 9,301 |
| | — |
| | — |
| | 9,301 |
| Other (income) expense | | 188 |
| | (2,041 | ) | | 512 |
| | 1,341 |
| | — |
| | — |
| Income from investment in affiliates | | (24,476 | ) | | (16,973 | ) | | (6,955 | ) | | (260 | ) | | 48,664 |
| | — |
| Income (loss) before taxes | | 39,306 |
| | 11,391 |
| | (2,370 | ) | | 48,301 |
| | (48,664 | ) | | 47,964 |
| Provision (benefit) for taxes | | 2,723 |
| | (1,876 | ) | | (1,322 | ) | | 11,856 |
| | — |
| | 11,381 |
| Net income (loss) | | $ | 36,583 |
| | $ | 13,267 |
| | $ | (1,048 | ) | | $ | 36,445 |
| | $ | (48,664 | ) | | $ | 36,583 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 481 |
| | — |
| | 481 |
| | — |
| | (481 | ) | | 481 |
| Unrealized income on cash flow hedging derivatives | | (2,370 | ) | | (775 | ) | | — |
| | — |
| | 775 |
| | (2,370 | ) | Other comprehensive income (loss), (net of tax) | | (1,889 | ) | | (775 | ) | | 481 |
| | — |
| | 294 |
| | (1,889 | ) | Total Comprehensive Income (Loss) | | $ | 34,694 |
| | $ | 12,492 |
| | $ | (567 | ) | | $ | 36,445 |
| | $ | (48,370 | ) | | $ | 34,694 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 31,574 |
| | — |
| | 60,223 |
| Loss on impairment / retirement of fixed assets, net | | 25,000 |
| | — |
| | — |
| | — |
| | — |
| | 25,000 |
| | | 47,430 |
| | 106,828 |
| | 39,435 |
| | 375,775 |
| | (220,588 | ) | | 348,880 |
| Operating income | | 32,233 |
| | 34,306 |
| | 48,899 |
| | 89,127 |
| | — |
| | 204,565 |
| Interest expense, 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 | | (125,636 | ) | | (79,925 | ) | | (11,355 | ) | | (45,354 | ) | | 262,270 |
| | — |
| Income before taxes | | 145,574 |
| | 109,087 |
| | 64,880 |
| | 135,654 |
| | (262,270 | ) | | 192,925 |
| Provision for taxes | | 4,561 |
| | 9,777 |
| | 17,181 |
| | 20,393 |
| | — |
| | 51,912 |
| Net income | | $ | 141,013 |
| | $ | 99,310 |
| | $ | 47,699 |
| | $ | 115,261 |
| | $ | (262,270 | ) | | $ | 141,013 |
| 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 | | $ | 140,216 |
| | $ | 99,358 |
| | $ | 47,136 |
| | $ | 115,261 |
| | $ | (261,755 | ) | | $ | 140,216 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Six Months Ended June 30, 2013
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 48,243 |
| | $ | 93,729 |
| | $ | 35,243 |
| | $ | 367,983 |
| | $ | (141,779 | ) | | $ | 403,419 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 2,994 |
| | 33,096 |
| | — |
| | 36,090 |
| Operating expenses | | 2,831 |
| | 73,852 |
| | 21,527 |
| | 261,510 |
| | (141,779 | ) | | 217,941 |
| Selling, general and administrative | | 2,514 |
| | 43,501 |
| | 4,579 |
| | 16,212 |
| | — |
| | 66,806 |
| Depreciation and amortization | | 13,366 |
| | 18 |
| | 6,818 |
| | 30,616 |
| | — |
| | 50,818 |
| Loss on impairment / retirement of fixed assets, net | | 36 |
| | — |
| | 478 |
| | 115 |
| | — |
| | 629 |
| | | 18,747 |
| | 117,371 |
| | 36,396 |
| | 341,549 |
| | (141,779 | ) | | 372,284 |
| Operating income (loss) | | 29,496 |
| | (23,642 | ) | | (1,153 | ) | | 26,434 |
| | — |
| | 31,135 |
| Interest expense (income), net | | 20,722 |
| | 14,923 |
| | 19,607 |
| | (3,737 | ) | | — |
| | 51,515 |
| Net effect of swaps | | 4,257 |
| | 2,681 |
| | — |
| | — |
| | — |
| | 6,938 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 23,844 |
| | — |
| | — |
| | 23,844 |
| Other (income) expense | | 375 |
| | (4,516 | ) | | 1,383 |
| | 2,758 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | 41,221 |
| | 20,100 |
| | (4,712 | ) | | 25,876 |
| | (82,485 | ) | | — |
| Income (loss) before taxes | | (58,254 | ) | | (69,611 | ) | | (41,892 | ) | | 1,537 |
| | 82,485 |
| | (85,735 | ) | Provision (benefit) for taxes | | 3,482 |
| | (16,981 | ) | | (15,986 | ) | | 5,486 |
| | — |
| | (23,999 | ) | Net income (loss) | | (61,736 | ) | | (52,630 | ) | | (25,906 | ) | | (3,949 | ) | | 82,485 |
| | (61,736 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,893 |
| | — |
| | 1,893 |
| | — |
| | (1,893 | ) | | 1,893 |
| Unrealized income (loss) on cash flow hedging derivatives | | 10,564 |
| | 3,038 |
| | — |
| | — |
| | (3,038 | ) | | 10,564 |
| Other comprehensive income (loss), (net of tax) | | 12,457 |
| | 3,038 |
| | 1,893 |
| | — |
| | (4,931 | ) | | 12,457 |
| Total Comprehensive Income (Loss) | | $ | (49,279 | ) | | $ | (49,592 | ) | | $ | (24,013 | ) | | $ | (3,949 | ) | | $ | 77,554 |
| | $ | (49,279 | ) |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the SixNine Months Ended July 1,September 29, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 131,528 |
| | $ | 255,595 |
| | $ | 117,508 |
| | $ | 877,450 |
| | $ | (386,586 | ) | | $ | 995,495 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,076 |
| | 72,857 |
| | — |
| | 81,933 |
| Operating expenses | | 4,500 |
| | 150,320 |
| | 40,569 |
| | 579,532 |
| | (386,586 | ) | | 388,335 |
| Selling, general and administrative | | 4,310 |
| | 81,584 |
| | 9,360 |
| | 30,279 |
| | — |
| | 125,533 |
| Depreciation and amortization | | 31,672 |
| | 28 |
| | 15,797 |
| | 60,816 |
| | — |
| | 108,313 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | Loss on impairment / retirement of fixed assets, net | | 404 |
| | — |
| | 479 |
| | 1,383 |
| | — |
| | 2,266 |
| | | 40,886 |
| | 231,932 |
| | 75,281 |
| | 736,124 |
| | (386,586 | ) | | 697,637 |
| Operating income | | 90,642 |
| | 23,663 |
| | 42,227 |
| | 141,326 |
| | — |
| | 297,858 |
| Interest expense (income), net | | 31,580 |
| | 21,824 |
| | 29,338 |
| | (5,715 | ) | | — |
| | 77,027 |
| Net effect of swaps | | 5,067 |
| | 3,248 |
| | — |
| | — |
| | — |
| | 8,315 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 15,229 |
| | — |
| | — |
| | 15,229 |
| Other (income) expense | | 563 |
| | (6,645 | ) | | 1,967 |
| | 4,115 |
| | — |
| | — |
| Income from investment in affiliates | | (104,833 | ) | | (58,614 | ) | | (18,318 | ) | | (15,029 | ) | | 196,794 |
| | — |
| Income before taxes | | 137,090 |
| | 51,069 |
| | 13,394 |
| | 157,955 |
| | (196,794 | ) | | 162,714 |
| Provision (benefit) for taxes | | 8,402 |
| | (2,444 | ) | | (1,596 | ) | | 29,664 |
| | — |
| | 34,026 |
| Net income | | $ | 128,688 |
| | $ | 53,513 |
| | $ | 14,990 |
| | $ | 128,291 |
| | $ | (196,794 | ) | | $ | 128,688 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,194 |
| | — |
| | 1,194 |
| | — |
| | (1,194 | ) | | 1,194 |
| Unrealized income on cash flow hedging derivatives | | 7,803 |
| | 1,836 |
| | — |
| | — |
| | (1,836 | ) | | 7,803 |
| Other comprehensive income, (net of tax) | | 8,997 |
| | 1,836 |
| | 1,194 |
| | — |
| | (3,030 | ) | | 8,997 |
| Total Comprehensive Income | | $ | 137,685 |
| | $ | 55,349 |
| | $ | 16,184 |
| | $ | 128,291 |
| | $ | (199,824 | ) | | $ | 137,685 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 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 | | $ | 45,201 |
| | $ | 80,087 |
| | $ | 42,107 |
| | $ | 343,569 |
| | $ | (125,160 | ) | | $ | 385,804 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 3,541 |
| | 33,032 |
| | — |
| | 36,573 |
| Operating expenses | | 2,773 |
| | 73,020 |
| | 21,592 |
| | 245,296 |
| | (125,160 | ) | | 217,521 |
| Selling, general and administrative | | 2,988 |
| | 38,221 |
| | 5,055 |
| | 16,231 |
| | — |
| | 62,495 |
| Depreciation and amortization | | 14,227 |
| | 18 |
| | 6,985 |
| | 30,758 |
| | — |
| | 51,988 |
| Loss (gain) on impairment / retirement of fixed assets, net | | (779 | ) | | — |
| | 9 |
| | — |
| | — |
| | (770 | ) | | | 19,209 |
| | 111,259 |
| | 37,182 |
| | 325,317 |
| | (125,160 | ) | | 367,807 |
| Operating income (loss) | | 25,992 |
| | (31,172 | ) | | 4,925 |
| | 18,252 |
| | — |
| | 17,997 |
| Interest expense, net | | 24,225 |
| | 14,699 |
| | 21,001 |
| | (2,904 | ) | | — |
| | 57,021 |
| Net effect of swaps | | 69 |
| | 263 |
| | (1,475 | ) | | — |
| | — |
| | (1,143 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 1,109 |
| | — |
| | — |
| | 1,109 |
| Other (income) expense | | 375 |
| | (5,076 | ) | | 709 |
| | 3,992 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | 26,015 |
| | 6,477 |
| | (3,541 | ) | | 6,803 |
| | (35,754 | ) | | — |
| Income (loss) before taxes | | (24,692 | ) | | (47,535 | ) | | (12,878 | ) | | 10,361 |
| | 35,754 |
| | (38,990 | ) | Provision (benefit) for taxes | | 4,140 |
| | (13,548 | ) | | (3,656 | ) | | 2,906 |
| | — |
| | (10,158 | ) | Net income (loss) | | $ | (28,832 | ) | | $ | (33,987 | ) | | $ | (9,222 | ) | | $ | 7,455 |
| | $ | 35,754 |
| | $ | (28,832 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (688 | ) | | — |
| | (688 | ) | | — |
| | 688 |
| | (688 | ) | Unrealized income on cash flow hedging derivatives | | (2,031 | ) | | (677 | ) | | 21 |
| | — |
| | 656 |
| | (2,031 | ) | Other comprehensive income (loss), (net of tax) | | (2,719 | ) | | (677 | ) | | (667 | ) | | — |
| | 1,344 |
| | (2,719 | ) | Total Comprehensive Income (loss) | | $ | (31,551 | ) | | $ | (34,664 | ) | | $ | (9,889 | ) | | $ | 7,455 |
| | $ | 37,098 |
| | $ | (31,551 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 62,332 |
| | — |
| | 112,211 |
| Loss on impairment / retirement of fixed assets, net | | 24,221 |
| | — |
| | 9 |
| | — |
| | — |
| | 24,230 |
| | | 66,639 |
| | 218,087 |
| | 76,617 |
| | 701,092 |
| | (345,748 | ) | | 716,687 |
| Operating income | | 58,225 |
| | 3,134 |
| | 53,824 |
| | 107,379 |
| | — |
| | 222,562 |
| Interest expense, 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 | | (99,621 | ) | | (73,448 | ) | | (14,896 | ) | | (38,551 | ) | | 226,516 |
| | — |
| Income before taxes | | 120,882 |
| | 61,552 |
| | 52,002 |
| | 146,015 |
| | (226,516 | ) | | 153,935 |
| Provision (benefit) for taxes | | 8,701 |
| | (3,771 | ) | | 13,525 |
| | 23,299 |
| | — |
| | 41,754 |
| Net income | | $ | 112,181 |
| | $ | 65,323 |
| | $ | 38,477 |
| | $ | 122,716 |
| | $ | (226,516 | ) | | $ | 112,181 |
| 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 | | $ | 109,132 |
| | $ | 64,694 |
| | $ | 37,247 |
| | $ | 122,716 |
| | $ | (224,657 | ) | | $ | 109,132 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Twelve Months Ended June 30,September 29, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 148,757 |
| | $ | 271,778 |
| | $ | 133,554 |
| | $ | 952,082 |
| | $ | (420,102 | ) | | $ | 1,086,069 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,769 |
| | 84,796 |
| | — |
| | 94,565 |
| Operating expenses | | 5,438 |
| | 177,188 |
| | 47,798 |
| | 641,501 |
| | (420,102 | ) | | 451,823 |
| Selling, general and administrative | | 6,021 |
| | 91,895 |
| | 10,659 |
| | 34,047 |
| | — |
| | 142,622 |
| Depreciation and amortization | | 36,799 |
| | 40 |
| | 18,032 |
| | 70,265 |
| | — |
| | 125,136 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (6,625 | ) | Loss on impairment / retirement of fixed assets, net | | 25,950 |
| | — |
| | 475 |
| | 5,310 |
| | — |
| | 31,735 |
| | | 74,208 |
| | 269,123 |
| | 86,733 |
| | 829,294 |
| | (420,102 | ) | | 839,256 |
| Operating income | | 74,549 |
| | 2,655 |
| | 46,821 |
| | 122,788 |
| | — |
| | 246,813 |
| Interest (income) expense, net | | 45,022 |
| | 29,552 |
| | 39,476 |
| | (9,005 | ) | | — |
| | 105,045 |
| Net effect of swaps | | 4,050 |
| | 2,539 |
| | — |
| | — |
| | — |
| | 6,589 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 13,737 |
| | — |
| | — |
| | 13,737 |
| Other (income) expense | | 749 |
| | (8,947 | ) | | 2,694 |
| | 5,504 |
| | — |
| | — |
| Income from investment in affiliates | | (74,816 | ) | | (52,527 | ) | | (15,768 | ) | | (12,687 | ) | | 155,798 |
| | — |
| Income before taxes | | 78,369 |
| | 19,257 |
| | 6,065 |
| | 138,976 |
| | (155,798 | ) | | 86,869 |
| Provision (benefit) for taxes | | 9,417 |
| | (13,289 | ) | | (8,917 | ) | | 30,706 |
| | — |
| | 17,917 |
| Net income | | $ | 68,952 |
| | $ | 32,546 |
| | $ | 14,982 |
| | $ | 108,270 |
| | $ | (155,798 | ) | | $ | 68,952 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,950 |
| | — |
| | 2,950 |
| | — |
| | (2,950 | ) | | 2,950 |
| Unrealized income on cash flow hedging derivatives | | 12,735 |
| | 3,635 |
| | — |
| | — |
| | (3,635 | ) | | 12,735 |
| Other comprehensive income, (net of tax) | | 15,685 |
| | 3,635 |
| | 2,950 |
| | — |
| | (6,585 | ) | | 15,685 |
| Total Comprehensive Income | | $ | 84,637 |
| | $ | 36,181 |
| | $ | 17,932 |
| | $ | 108,270 |
| | $ | (162,383 | ) | | $ | 84,637 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Twelve Months Ended July 1, 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 | | $ | 150,783 |
| | $ | 267,882 |
| | $ | 138,595 |
| | $ | 963,915 |
| | $ | (418,258 | ) | | $ | 1,102,917 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,743 |
| | 86,664 |
| | — |
| | 97,407 |
| Operating expenses | | 5,341 |
| | 175,593 |
| | 47,795 |
| | 647,795 |
| | (418,258 | ) | | 458,266 |
| Selling, general and administrative | | 6,309 |
| | 88,725 |
| | 11,892 |
| | 37,847 |
| | — |
| | 144,773 |
| Depreciation and amortization | | 38,843 |
| | 42 |
| | 17,976 |
| | 73,555 |
| | — |
| | 130,416 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 15 |
| | — |
| | (52 | ) | | 10,426 |
| | — |
| | 10,389 |
| | | 50,508 |
| | 264,360 |
| | 88,354 |
| | 856,287 |
| | (418,258 | ) | | 841,251 |
| Operating income | | 100,275 |
| | 3,522 |
| | 50,241 |
| | 107,628 |
| | — |
| | 261,666 |
| Interest expense, net | | 61,742 |
| | 24,419 |
| | 48,119 |
| | (3,440 | ) | | — |
| | 130,840 |
| Net effect of swaps | | (9,027 | ) | | (121 | ) | | (5,569 | ) | | — |
| | — |
| | (14,717 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,863 |
| | — |
| | — |
| | 14,863 |
| Other (income) expense | | 533 |
| | (9,873 | ) | | 1,602 |
| | 7,520 |
| | — |
| | (218 | ) | (Income) loss from investment in affiliates | | (80,137 | ) | | (28,421 | ) | | (6,557 | ) | | 6,067 |
| | 109,048 |
| | — |
| Income (loss) before taxes | | 127,164 |
| | 17,518 |
| | (2,217 | ) | | 97,481 |
| | (109,048 | ) | | 130,898 |
| Provision (benefit) for taxes | | 10,056 |
| | (26,630 | ) | | 7,042 |
| | 23,322 |
| | — |
| | 13,790 |
| Net income (loss) | | $ | 117,108 |
| | $ | 44,148 |
| | $ | (9,259 | ) | | $ | 74,159 |
| | $ | (109,048 | ) | | $ | 117,108 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 733 |
| | — |
| | 733 |
| | — |
| | (733 | ) | | 733 |
| Unrealized income (loss) on cash flow hedging derivatives | | (3,854 | ) | | (4,884 | ) | | 21 |
| | — |
| | 4,863 |
| | (3,854 | ) | Other comprehensive income (loss), (net of tax) | | (3,121 | ) | | (4,884 | ) | | 754 |
| | — |
| | 4,130 |
| | (3,121 | ) | Total Comprehensive Income (Loss) | | $ | 113,987 |
| | $ | 39,264 |
| | $ | (8,505 | ) | | $ | 74,159 |
| | $ | (104,918 | ) | | $ | 113,987 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 152,379 |
| | $ | 292,510 |
| | $ | 127,485 |
| | $ | 996,647 |
| | $ | (444,321 | ) | | $ | 1,124,700 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,404 |
| | 83,651 |
| | — |
| | 93,055 |
| Operating expenses | | 5,739 |
| | 179,465 |
| | 48,104 |
| | 669,919 |
| | (444,321 | ) | | 458,906 |
| Selling, general and administrative | | 5,964 |
| | 97,351 |
| | 10,618 |
| | 34,423 |
| | — |
| | 148,356 |
| Depreciation and amortization | | 35,896 |
| | 40 |
| | 17,581 |
| | 68,891 |
| | — |
| | 122,408 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (15,368 | ) | | — |
| | (15,368 | ) | Loss on impairment / retirement of fixed assets, net | | 1,318 |
| | — |
| | 476 |
| | 6,578 |
| | — |
| | 8,372 |
| | | 48,917 |
| | 276,856 |
| | 86,183 |
| | 848,094 |
| | (444,321 | ) | | 815,729 |
| Operating income | | 103,462 |
| | 15,654 |
| | 41,302 |
| | 148,553 |
| | — |
| | 308,971 |
| Interest (income) expense, net | | 43,667 |
| | 29,195 |
| | 39,310 |
| | (8,465 | ) | | — |
| | 103,707 |
| Net effect of swaps | | 4,964 |
| | 3,177 |
| | — |
| | — |
| | — |
| | 8,141 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 20,157 |
| | — |
| | — |
| | 20,157 |
| Other (income) expense | | 751 |
| | (9,033 | ) | | 2,766 |
| | 5,516 |
| | — |
| | — |
| Income from investment in affiliates | | (95,234 | ) | | (51,316 | ) | | (18,019 | ) | | (8,239 | ) | | 172,808 |
| | — |
| Income (loss) before taxes | | 128,139 |
| | 30,850 |
| | (3,529 | ) | | 159,741 |
| | (172,808 | ) | | 142,393 |
| Provision (benefit) for taxes | | 9,776 |
| | (8,530 | ) | | (11,708 | ) | | 34,492 |
| | — |
| | 24,030 |
| Net income | | $ | 118,363 |
| | $ | 39,380 |
| | $ | 8,179 |
| | $ | 125,249 |
| | $ | (172,808 | ) | | $ | 118,363 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,814 |
| | — |
| | 2,814 |
| | — |
| | (2,814 | ) | | 2,814 |
| Unrealized income on cash flow hedging derivatives | | 9,740 |
| | 2,385 |
| | — |
| | — |
| | (2,385 | ) | | 9,740 |
| Other comprehensive income, (net of tax) | | 12,554 |
| | 2,385 |
| | 2,814 |
| | — |
| | (5,199 | ) | | 12,554 |
| Total Comprehensive Income | | $ | 130,917 |
| | $ | 41,765 |
| | $ | 10,993 |
| | $ | 125,249 |
| | $ | (178,007 | ) | | $ | 130,917 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWSOPERATIONS AND COMPREHENSIVE INCOME For the SixTwelve Months Ended JuneSeptember 30, 20132012 (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 | | $ | 4,808 |
| | $ | (30,371 | ) | | $ | (4,856 | ) | | $ | 44,138 |
| | $ | 68,837 |
| | $ | 82,556 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 38,056 |
| | 37,167 |
| | (18,274 | ) | | 17,909 |
| | (74,858 | ) | | — |
| Capital expenditures | | (38,398 | ) | | — |
| | (3,435 | ) | | (37,356 | ) | | — |
| | (79,189 | ) | Net cash from (for) investing activities | | (342 | ) | | 37,167 |
| | (21,709 | ) | | (19,447 | ) | | (74,858 | ) | | (79,189 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 58,000 |
| | — |
| | — |
| | — |
| | — |
| | 58,000 |
| Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,312 | ) | | (8,014 | ) | | (438 | ) | | — |
| | — |
| | (22,764 | ) | Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Distributions (paid) received | | (71,350 | ) | | 1,711 |
| | — |
| | — |
| | — |
| | (69,639 | ) | Exercise of limited partnership unit options | | — |
| | 28 |
| | — |
| | — |
| | — |
| | 28 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (130 | ) | | — |
| | — |
| | — |
| | (130 | ) | Net cash from (for) financing activities | | (29,466 | ) | | (7,240 | ) | | (474 | ) | | — |
| | — |
| | (37,180 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (1,389 | ) | | — |
| | — |
| | (1,389 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (25,000 | ) | | (444 | ) | | (28,428 | ) | | 24,691 |
| | (6,021 | ) | | (35,202 | ) | Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 71,152 |
| | — |
| | 127,191 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 24,188 |
| | — |
| | (62 | ) | | 10,383 |
| | — |
| | 34,509 |
| | | 74,203 |
| | 271,598 |
| | 87,553 |
| | 839,493 |
| | (409,232 | ) | | 863,615 |
| Operating income (loss) | | 73,530 |
| | (9,720 | ) | | 54,697 |
| | 101,972 |
| | — |
| | 220,479 |
| Interest 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 | | (88,216 | ) | | (50,693 | ) | | (9,456 | ) | | (21,713 | ) | | 170,078 |
| | — |
| Income before taxes | | 116,009 |
| | 22,587 |
| | 42,703 |
| | 122,540 |
| | (170,078 | ) | | 133,761 |
| Provision (benefit) for taxes | | 10,106 |
| | (29,298 | ) | | 20,942 |
| | 26,108 |
| | — |
| | 27,858 |
| Net income | | $ | 105,903 |
| | $ | 51,885 |
| | $ | 21,761 |
| | $ | 96,432 |
| | $ | (170,078 | ) | | $ | 105,903 |
| 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 | | $ | 102,834 |
| | $ | 51,776 |
| | $ | 19,110 |
| | $ | 96,432 |
| | $ | (167,318 | ) | | $ | 102,834 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the SixNine Months Ended July 1, 2012 (As restated)September 29, 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 | | $ | (75,559 | ) | | $ | 47,309 |
| | $ | (12,724 | ) | | $ | 44,638 |
| | $ | 60,941 |
| | $ | 64,605 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 41,361 |
| | 11,532 |
| | (415 | ) | | 13,984 |
| | (66,462 | ) | | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (24,266 | ) | | — |
| | (13,478 | ) | | (27,136 | ) | | — |
| | (64,880 | ) | Net cash from (for) investing activities | | 18,268 |
| | 11,532 |
| | (13,893 | ) | | (13,152 | ) | | (66,462 | ) | | (63,707 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 111,000 |
| | — |
| | — |
| | — |
| | — |
| | 111,000 |
| Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Term debt payments, including early termination penalties | | (9,259 | ) | | (6,536 | ) | | (205 | ) | | — |
| | — |
| | (16,000 | ) | Intercompany (payments) receipts | | — |
| | 7,482 |
| | — |
| | (7,482 | ) | | — |
| | — |
| Distributions (paid) received | | (44,450 | ) | | 92 |
| | — |
| | — |
| | — |
| | (44,358 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | — |
| 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 47 |
| | — |
| | — |
| | — |
| | 47 |
| Excess tax benefit from unit-based compensation | | — |
| | (438 | ) | | — |
| | — |
| | — |
| | (438 | ) | Net cash from (for) financing activities | | 57,291 |
| | (59,353 | ) | | 9,345 |
| | (7,482 | ) | | — |
| | (199 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (294 | ) | | — |
| | — |
| | (294 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (512 | ) | | (17,566 | ) | | 24,004 |
| | (5,521 | ) | | 405 |
| Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 337,821 |
| | $ | 60,434 |
| | $ | 21,615 |
| | $ | 66,757 |
| | $ | (169,672 | ) | | $ | 316,955 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (63,105 | ) | | (52,172 | ) | | (29,579 | ) | | (24,816 | ) | | 169,672 |
| | — |
| Sale of other assets | | — |
| | — |
| | — |
| | 15,297 |
| | — |
| | 15,297 |
| Capital expenditures | | (43,568 | ) | | — |
| | (5,517 | ) | | (48,449 | ) | | — |
| | (97,534 | ) | Net cash from investing activities | | (106,673 | ) | | (52,172 | ) | | (35,096 | ) | | (57,968 | ) | | 169,672 |
| | (82,237 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,331 | ) | | (8,028 | ) | | (453 | ) | | — |
| | — |
| | (22,812 | ) | Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Distributions (paid) received | | (107,013 | ) | | 2,555 |
| | — |
| | — |
| | — |
| | (104,458 | ) | Exercise of limited partnership unit options | | — |
| | 43 |
| | — |
| | — |
| | — |
| | 43 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (148 | ) | | — |
| | — |
| | — |
| | (148 | ) | Net cash (for) financing activities | | (123,148 | ) | | (6,413 | ) | | (489 | ) | | — |
| | — |
| | (130,050 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (16 | ) | | — |
| | — |
| | (16 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | 108,000 |
| | 1,849 |
| | (13,986 | ) | | 8,789 |
| | — |
| | 104,652 |
| Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the TwelveNine Months Ended JuneSeptember 30, 20132012 (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 | | $ | 210,085 |
| | $ | (47,009 | ) | | $ | 29,440 |
| | $ | 140,865 |
| | $ | (30,675 | ) | | $ | 302,706 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 27,874 |
| | (30,140 | ) | | (15,735 | ) | | (12,174 | ) | | 30,175 |
| | — |
| Sale of other assets | | — |
| | — |
| | — |
| | 14,885 |
| | — |
| | 14,885 |
| Capital expenditures | | (47,797 | ) | | (8 | ) | | (4,404 | ) | | (56,786 | ) | | — |
| | (108,995 | ) | Net cash for investing activities | | (19,923 | ) | | (30,148 | ) | | (20,139 | ) | | (54,075 | ) | | 30,175 |
| | (94,110 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | (53,000 | ) | | — |
| | — |
| | — |
| | — |
| | (53,000 | ) | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Intercompany term debt (payments) receipts | | — |
| | 86,362 |
| | — |
| | (86,362 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (660,931 | ) | | (466,114 | ) | | (14,630 | ) | | — |
| | — |
| | (1,141,675 | ) | Distributions (paid) received | | (115,839 | ) | | 1,746 |
| | — |
| | — |
| | — |
| | (114,093 | ) | Exercise of limited partnership unit options | | — |
| | 57 |
| | — |
| | — |
| | — |
| | 57 |
| Payment of debt issuance costs | | (14,311 | ) | | (8,014 | ) | | (433 | ) | | — |
| | — |
| | (22,758 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | 1,517 |
| | — |
| | — |
| | — |
| | 1,517 |
| Net cash from (for) financing activities | | (190,162 | ) | | 77,157 |
| | (585 | ) | | (86,362 | ) | | — |
| | (199,952 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (945 | ) | | — |
| | — |
| | (945 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase for the period | | — |
| | — |
| | 7,771 |
| | 428 |
| | (500 | ) | | 7,699 |
| Balance, beginning of period | | — |
| | — |
| | 13,974 |
| | 27,476 |
| | (5,521 | ) | | 35,929 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 209,022 |
| | $ | 49,092 |
| | $ | 9,484 |
| | $ | 156,240 |
| | $ | (147,094 | ) | | $ | 276,744 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (56,757 | ) | | (70,669 | ) | | 3,557 |
| | (23,225 | ) | | 147,094 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (29,295 | ) | | (8 | ) | | (14,426 | ) | | (32,081 | ) | | — |
| | (75,810 | ) | Net cash (for) investing activities | | (84,879 | ) | | (70,677 | ) | | (10,869 | ) | | (55,306 | ) | | 147,094 |
| | (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 | | — |
| | (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. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended July 1, 2012 (As restated)September 29, 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 | | $ | 146,874 |
| | $ | (73,709 | ) | | $ | 24,332 |
| | $ | 223,401 |
| | $ | (63,983 | ) | | $ | 256,915 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (31,801 | ) | | (37,181 | ) | | (579 | ) | | 11,099 |
| | 58,462 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (36,852 | ) | | — |
| | (25,832 | ) | | (40,701 | ) | | — |
| | (103,385 | ) | Net cash from (for) investing activities | | (67,480 | ) | | (37,181 | ) | | (26,411 | ) | | (29,602 | ) | | 58,462 |
| | (102,212 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings (payments) on revolving credit loans | | 26,000 |
| | — |
| | — |
| | — |
| | — |
| | 26,000 |
| Intercompany term debt (payments) receipts | | — |
| | 183,138 |
| | — |
| | (183,138 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (21,383 | ) | | (15,094 | ) | | (473 | ) | | — |
| | — |
| | (36,950 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (90,011 | ) | | 269 |
| | — |
| | — |
| | — |
| | (89,742 | ) | 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 | | — |
| | (438 | ) | | — |
| | — |
| | — |
| | (438 | ) | Net cash from (for) financing activities | | (85,394 | ) | | 107,928 |
| | 8,354 |
| | (183,138 | ) | | — |
| | (152,250 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,203 | ) | | — |
| | — |
| | (2,203 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (6,000 | ) | | (2,962 | ) | | 4,072 |
| | 10,661 |
| | (5,521 | ) | | 250 |
| Balance, beginning of period | | 6,000 |
| | 2,962 |
| | 9,902 |
| | 16,815 |
| | — |
| | 35,679 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 258,843 |
| | $ | 42,367 |
| | $ | 32,927 |
| | $ | 52,457 |
| | $ | (61,746 | ) | | $ | 324,848 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 24,507 |
| | (37,602 | ) | | (30,743 | ) | | (17,908 | ) | | 61,746 |
| | — |
| Sale of other assets | | — |
| | — |
| | — |
| | 30,182 |
| | — |
| | 30,182 |
| Capital expenditures | | (47,938 | ) | | (1 | ) | | (5,532 | ) | | (63,290 | ) | | — |
| | (116,761 | ) | Net cash (for) investing activities | | (23,431 | ) | | (37,603 | ) | | (36,275 | ) | | (51,016 | ) | | 61,746 |
| | (86,579 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Distributions (paid) received | | (129,277 | ) | | 2,571 |
| | — |
| | — |
| | — |
| | (126,706 | ) | Exercise of limited partnership unit options | | — |
| | 43 |
| | — |
| | — |
| | — |
| | 43 |
| Payment of debt issuance costs | | (14,331 | ) | | (8,028 | ) | | (453 | ) | | — |
| | — |
| | (22,812 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | 1,515 |
| | — |
| | — |
| | — |
| | 1,515 |
| Net cash (for) financing activities | | (145,412 | ) | | (4,734 | ) | | (489 | ) | | — |
| | — |
| | (150,635 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (254 | ) | | — |
| | — |
| | (254 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | 90,000 |
| | 30 |
| | (4,091 | ) | | 1,441 |
| | — |
| | 87,380 |
| Balance, beginning of period | | 43,000 |
| | 2,263 |
| | 40,278 |
| | 10,561 |
| | — |
| | 96,102 |
| Balance, end of period | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 30, 2012 (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 | | $ | 181,718 |
| | $ | (157,023 | ) | | $ | 8,795 |
| | $ | 314,835 |
| | $ | (75,771 | ) | | $ | 272,554 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (35,830 | ) | | (42,342 | ) | | 8,488 |
| | (6,087 | ) | | 75,771 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (33,025 | ) | | (8 | ) | | (23,050 | ) | | (37,037 | ) | | — |
| | (93,120 | ) | Net cash (for) investing activities | | (67,682 | ) | | (42,350 | ) | | (14,562 | ) | | (43,124 | ) | | 75,771 |
| | (91,947 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Intercompany term debt (payments) receipts | | — |
| | 269,500 |
| | — |
| | (269,500 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (14,467 | ) | | (10,213 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (105,569 | ) | | 261 |
| | — |
| | — |
| | — |
| | (105,308 | ) | 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 | | — |
| | (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 |
|
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 overseen by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including allocating resources on a property-by-property basis.
Aside fromAlong with 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 Executive Vice President - Operations, and the park general managers.
Critical Accounting Policies: 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 secondthird quarter of 2013, there were no changes in the above critical accounting policies previously disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2012 except as noted below. Change in Depreciation Method Effective January 1, 2013, the Partnershipwe changed itsour 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 Partnershipwe 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 Partnershipwe 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 believesWe believe 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 June 30,September 29, 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 2013 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-, six-nine- and twelve-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Six months ended | | Twelve months ended | | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | | | (13 weeks) | | (14 weeks) | | (26 weeks) | | (26 weeks) | | (52 weeks) | | (53 weeks) | | | | | (As restated) | | | | (As restated) | | | | (As restated) | | | (In thousands) | Net income (loss) | | $ | 47,390 |
| | $ | 36,583 |
| | $ | (61,736 | ) | | $ | (28,832 | ) | | $ | 68,952 |
| | $ | 117,108 |
| Interest expense | | 25,861 |
| | 30,236 |
| | 51,624 |
| | 57,039 |
| | 105,204 |
| | 130,927 |
| Interest income | | (69 | ) | | (2 | ) | | (109 | ) | | (18 | ) | | (159 | ) | | (87 | ) | Provision (benefit) for taxes | | 11,660 |
| | 11,381 |
| | (23,999 | ) | | (10,158 | ) | | 17,917 |
| | 13,790 |
| Depreciation and amortization | | 46,032 |
| | 47,909 |
| | 50,818 |
| | 51,988 |
| | 125,136 |
| | 130,416 |
| EBITDA | | 130,874 |
| | 126,107 |
| | 16,598 |
| | 70,019 |
| | 317,050 |
| | 392,154 |
| Loss on early extinguishment of debt | | — |
| | — |
| | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | (2,273 | ) | | (173 | ) | | 6,938 |
| | (1,143 | ) | | 6,589 |
| | (14,717 | ) | Unrealized foreign currency loss | | 14,875 |
| | 8,878 |
| | 23,756 |
| | 629 |
| | 13,946 |
| | 14,549 |
| Non-cash equity expense | | 869 |
| | 568 |
| | 3,802 |
| | 2,268 |
| | 4,799 |
| | 2,257 |
| Loss (gain) on impairment/retirement of fixed assets, net | | 29 |
| | (862 | ) | | 629 |
| | (770 | ) | | 31,735 |
| | 10,389 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | — |
| | — |
| | 150 |
| Refinancing costs | | — |
| | — |
| | — |
| | — |
| | — |
| | (195 | ) | Other non-recurring items (as defined) | | (297 | ) | | 444 |
| | 508 |
| | 2,165 |
| | 2,523 |
| | 6,420 |
| Adjusted EBITDA (1) | | $ | 144,077 |
| | $ | 134,962 |
| | $ | 86,804 |
| | $ | 73,168 |
| | $ | 404,590 |
| | $ | 411,007 |
| | | | | | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | | | (13 weeks) | | (13 weeks) | | (39 weeks) | | (39 weeks) | | (52 weeks) | | (53 weeks) | | | | | (As restated) | | | | (As restated) | | | | (As restated) | | | (In thousands) | Net income | | $ | 190,424 |
| | $ | 141,013 |
| | $ | 128,688 |
| | $ | 112,181 |
| | $ | 118,363 |
| | $ | 105,903 |
| Interest expense | | 25,529 |
| | 26,863 |
| | 77,153 |
| | 83,902 |
| | 103,870 |
| | 116,437 |
| Interest income | | (17 | ) | | (13 | ) | | (126 | ) | | (31 | ) | | (163 | ) | | (68 | ) | Provision for taxes | | 58,025 |
| | 51,912 |
| | 34,026 |
| | 41,754 |
| | 24,030 |
| | 27,858 |
| Depreciation and amortization | | 57,495 |
| | 60,223 |
| | 108,313 |
| | 112,211 |
| | 122,408 |
| | 127,191 |
| EBITDA | | 331,456 |
| | 279,998 |
| | 348,054 |
| | 350,017 |
| | 368,508 |
| | 377,321 |
| Loss on early extinguishment of debt | | — |
| | — |
| | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | 1,377 |
| | (175 | ) | | 8,315 |
| | (1,318 | ) | | 8,141 |
| | (10,930 | ) | Unrealized foreign currency (gain) loss | | (8,385 | ) | | (14,737 | ) | | 15,371 |
| | (14,108 | ) | | 20,298 |
| | (17,502 | ) | Non-cash equity expense | | 843 |
| | 362 |
| | 4,645 |
| | 2,630 |
| | 5,280 |
| | 2,619 |
| Loss on impairment/retirement of fixed assets, net | | 1,637 |
| | 25,000 |
| | 2,266 |
| | 24,230 |
| | 8,372 |
| | 34,509 |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | — |
| | (15,368 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | — |
| | — |
| | 150 |
| Other non-recurring items (as defined) | | 197 |
| | 1,861 |
| | 705 |
| | 4,026 |
| | 859 |
| | 7,445 |
| Adjusted EBITDA (1) | | $ | 318,382 |
| | $ | 292,309 |
| | $ | 405,186 |
| | $ | 365,477 |
| | $ | 430,663 |
| | $ | 393,612 |
| | | | | | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | | | | | |
Results of Operations:
Restatement -
We have made the followinga correction relating to our use of the composite depreciation method.
This The correction, which impacts the Balance Sheet at July 1,September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three, six,three-, nine-, and 12 monthtwelve-month periods ended July 1,September 30, 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'sour initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was reviewed in connection with respondinga response to an SEC comment letter. We ultimately concluded that such disposition was unusual and that an $8.8 million charge should have been reflected in the 2011 financial statements.
SixNine months ended June 30,September 29, 2013
The fiscal six-monthnine-month period ended June 30,September 29, 2013, consisted of a 26-week39-week period and included a total of 9171,936 operating days compared with 2639 weeks and 1,0012,178 operating days for the fiscal six-monthnine-month period ended July 1,September 30, 2012. The difference in operating days is primarily due to the sale of atwo non-core water park in the fourth quarter of 2012,parks, as well as the combiningcombination of two parks, Worlds of Fun and Oceans of Fun, into one gate for 2013.
The following table presents key financial information for the sixnine months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | Six months ended | | Six months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | | (26 weeks) | | (26 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 403,419 |
| | $ | 385,804 |
| | $ | 17,615 |
| | 4.6 | % | Operating costs and expenses | | 320,837 |
| | 316,589 |
| | 4,248 |
| | 1.3 | % | Depreciation and amortization | | 50,818 |
| | 51,988 |
| | (1,170 | ) | | (2.3 | )% | Loss (gain) on impairment / retirement of fixed assets | | 629 |
| | (770 | ) | | 1,399 |
| | N/M |
| Operating income | | $ | 31,135 |
| | $ | 17,997 |
| | $ | 13,138 |
| | 73.0 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 86,804 |
| | $ | 73,168 |
| | $ | 13,636 |
| | 18.6 | % | Attendance | | 8,677 |
| | 8,729 |
| | (52 | ) | | (0.6 | )% | Per capita spending | | $ | 42.17 |
| | $ | 40.24 |
| | $ | 1.93 |
| | 4.8 | % | Out-of-park revenues | | $ | 48,110 |
| | $ | 45,266 |
| | $ | 2,844 |
| | 6.3 | % |
| | | | | | | | | | | | | | | | | | | Nine months ended | | Nine months ended | | Increase (Decrease) | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (39 weeks) | | (39 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 995,495 |
| | $ | 939,249 |
| | $ | 56,246 |
| | 6.0 | % | Operating costs and expenses | | 595,801 |
| | 580,246 |
| | 15,555 |
| | 2.7 | % | Depreciation and amortization | | 108,313 |
| | 112,211 |
| | (3,898 | ) | | (3.5 | )% | Loss on impairment / retirement of fixed assets | | 2,266 |
| | 24,230 |
| | (21,964 | ) | | N/M |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | N/M |
| Operating income | | $ | 297,858 |
| | $ | 222,562 |
| | $ | 75,296 |
| | 33.8 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 405,186 |
| | $ | 365,477 |
| | $ | 39,709 |
| | 10.9 | % | Attendance | | 20,652 |
| | 20,689 |
| | (37 | ) | | (0.2 | )% | Per capita spending | | $ | 44.24 |
| | $ | 41.78 |
| | $ | 2.46 |
| | 5.9 | % | Out-of-park revenues | | $ | 106,801 |
| | $ | 99,526 |
| | $ | 7,275 |
| | 7.3 | % |
Net revenues for the sixnine months ended June 30,September 29, 2013 increased $17.6$56.3 million to $403.4$995.5 million from $385.8$939.2 million during the sixnine months ended July 1,September 30, 2012. The increase in revenues reflects a 5%6%, or $1.93,$2.46, increase in average in-park guest per capita spending during the first sixnine months of the year when compared with the first sixnine months of 2012. In-park guest per capita spending represents the average 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 reflects a 4%5% increase in the admissions per capita spendingcap and a 5%6% increase in pure in-park spending, driven largely by improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Additionally, for the six-monthnine-month period, out-of-park revenues increased 6%7%, or $2.8$7.3 million. Out-of-park revenues include the sale of hotel rooms, food, merchandise, and other complementary activities located outside of the park gates, as well as transaction fees from on-line product sales. The increase in out-of-park revenues was primarily driven by the strong performance of our resort properties, which saw us drivedrove higher average daily room rates (ADR's) while maintaining or growing occupancy rates. The increase in overall net revenues also reflects a less than 1% decrease inincludes attendance that was essentially comparable through the first sixnine months of 2013 when compared with the same period a year ago. This decreaseThe variance in attendance is entirely attributable to the sale of thetwo non-core water park in the fourth quarter of 2012.parks. Excluding the sale of the water parks, attendance increased 1%, or 195,000 visits on a comparable park attendance was comparable to the same period last year.basis.
Revenues for the first sixnine months of the year also reflect the negative impact of exchange rates and the strengthening U.S. dollar on our Canadian operations ($0.23.6 million) during the period.
For the six-monthnine-month period in 2013, operating costs and expenses increased 1%3%, or $4.2$15.6 million, to $320.8$595.8 million from $316.6$580.2 million for the same period in 2012, the net result of a $0.4$7.5 million increase in operating expenses and a $4.3$10.0 million increase in selling, general and administrative costs.costs ("SG&A"). These cost increases were offset slightly by a $0.52%, or $1.9 million decrease in cost of goods sold during the period. The $0.4$7.5 million increase in operating expenses was due to an increaseincreases of approximately $4.3 million in employee costs, $3.2 million in operating supplies and $1.5 million in labor costs andmaintenance materials, offset slightly by a $1.7decrease of $2.7 million increase in operating supplies.insurance expense. The increase in laboremployee costs was primarily due to increased health-care insurance costs while operatingof benefits. Operating supplies increased due to new extra-charge attractions, uniforms, and expenses related to the premium benefit offerings.offerings and improved guest services. The increase$2.7 million decrease in operating costsinsurance expense was somewhat offset bydue to a reduction in insurance settlements and accruals. The $4.3$10.0 million increase in SG&A expenses was due primarily to additional marketing efforts and agency advertising costs, and increased full-time laboremployee costs, largely related to fullperformance incentives and an increase in staffing levels and performance incentives.levels.
Depreciation and amortization expense for the period decreased $1.2$3.9 million due to several significant assets being fully depreciated at the end of 2012. For the six-monthnine-month period of 2013, the $8.7 million gain on sale of other assets relates to the sale of one of our non-core water parks. For the period, loss on impairment/retirement of fixed assets was $0.6totaled $2.3 million reflectingfor the retirement of assets during the period at several of our properties. Loss on impairment/retirement of fixed assets for the period ended September 30, 2012 totaled $24.2 million, which reflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom, offset slightly by gains on other retirements. After depreciation, amortization, gain on sale of other assets, loss (gain) on impairment / retirement of fixed assets, and all other non-cash costs, operating income for the period increased $13.1$75.3 million to $31.1$297.9 million in the first halfnine months of 2013 from operating income of $18.0$222.6 million in the first halfnine months of 2012.
Interest expense for the first halfnine months of 2013 was $51.6$77.2 million, a decrease of $5.4$6.8 million from the first halfnine months of 2012. The decrease in interest expense was due to the settlement of our Canadian cross-currency swaps in the first quarter of 2012, the decrease in non-cash amortization expense dueresulting from the write-off of loan fees related to theour prior credit agreement, and a decrease in revolver interest due to lower average borrowings and a lower average cost due toeffective interest rate from the March 2013 refinancing.
The net effect of our swaps resulted in a non-cash charge to earnings of $6.9$8.3 million for the first halfnine months of 2013 compared with a $1.1$1.3 million non-cash benefit to earnings in the first halfnine months of 2012. The difference reflects 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 designated and de-designated swaps to market. During the current year-to-date period, we also recognized a $23.8$15.2 million net charge to earnings for unrealized/realized foreign currency gains,losses, which representedincluded a $14.4 million unrealized foreign currency loss on the U.S.-dollar denominated debt held at our Canadian property. Additionally, 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 current year-to-date period.
During the first halfnine months of 2013, a benefitprovision for taxes of $24.0$34.0 million was recorded to account for publicly traded partnership (“PTP”) taxes and the tax attributes of our corporate subsidiaries. During the same six monthnine-month period in 2012, a $10.2$41.8 million benefitprovision for taxes was recorded. Actual cash taxes paid or payable are estimated to be between $14 and $17 million for the 2013 calendar year.
After interest expense and the benefit for taxes, the net lossincome for the sixnine months ended June 30,September 29, 2013 totaled $61.7$128.7 million, or $1.11$2.31 per diluted limited partner unit, compared with a net lossincome of $28.8$112.2 million, or $0.52$2.01 per diluted unit, for the same period a year ago.
For the six-monthnine-month period, Adjusted EBITDA (as defined in the 2013 Credit Agreement), which we believe is a meaningful measure of our park-level operating results, increased to $86.8$405.2 million compared with $73.2$365.5 million for the fiscal six-monthnine-month period ended July 1,September 30, 2012. This increase was due to the growth in revenues produced in large part by the continued success of our premium benefit offerings, admissions sales and admission sales program,our food and beverage initiatives, offset slightly by an increase in employee related costs, advertising expenses, and advertising expenses.operating supply costs related to targeted initiatives which enhance our guests' experiences at our parks. 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 page 38.
Second
Third Quarter -
The fiscal three-month period ended June 30,September 29, 2013, consisted of a 13-week period and included a total of 8001,019 operating days compared with 1413 weeks and 9051,177 operating days for the fiscal three-month period ended July 1,September 30, 2012. The difference in operating days is due to the sale of atwo non-core water park in the fourth quarter of 2012parks, as well as the combiningcombination of two parks, Worlds of Fun and Oceans of Fun, into one gate during 2013.
The following table presents key financial information for the three months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | | (13 weeks) | | (14 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 361,620 |
| | $ | 357,606 |
| | $ | 4,014 |
| | 1.1 | % | Operating costs and expenses | | 218,104 |
| | 223,233 |
| | (5,129 | ) | | (2.3 | )% | Depreciation and amortization | | 46,032 |
| | 47,909 |
| | (1,877 | ) | | (3.9 | )% | Loss (gain) on impairment / retirement of fixed assets | | 29 |
| | (862 | ) | | 891 |
| | N/M |
| Operating income | | $ | 97,455 |
| | $ | 87,326 |
| | $ | 10,129 |
| | 11.6 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 144,077 |
| | $ | 134,962 |
| | $ | 9,115 |
| | 6.8 | % | Attendance | | 7,872 |
| | 8,225 |
| | (353 | ) | | (4.3 | )% | Per capita spending | | $ | 42.36 |
| | $ | 40.32 |
| | $ | 2.04 |
| | 5.1 | % | Out-of-park revenues | | $ | 37,576 |
| | $ | 35,878 |
| | $ | 1,698 |
| | 4.7 | % |
| | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (13 weeks) | | (13 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 592,076 |
| | $ | 553,445 |
| | $ | 38,631 |
| | 7.0 | % | Operating costs and expenses | | 274,964 |
| | 263,657 |
| | 11,307 |
| | 4.3 | % | Depreciation and amortization | | 57,495 |
| | 60,223 |
| | (2,728 | ) | | (4.5 | )% | Loss on impairment / retirement of fixed assets | | 1,637 |
| | 25,000 |
| | (23,363 | ) | | N/M |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | N/M |
| Operating income | | $ | 266,723 |
| | $ | 204,565 |
| | $ | 62,158 |
| | 30.4 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 318,382 |
| | $ | 292,309 |
| | $ | 26,073 |
| | 8.9 | % | Attendance | | 11,975 |
| | 11,960 |
| | 15 |
| | 0.1 | % | Per capita spending | | $ | 45.73 |
| | $ | 42.90 |
| | $ | 2.83 |
| | 6.6 | % | Out-of-park revenues | | $ | 58,690 |
| | $ | 54,260 |
| | $ | 4,430 |
| | 8.2 | % |
For the quarter ended June 30,September 29, 2013, net revenues increased 1%7%, or $4.0$38.6 million, to $361.6$592.1 million from $357.6$553.5 million in the secondthird quarter of 2012. This increase reflects a 5%7% increase in average in-park per capita spending and a 5%an 8%, or $1.7$4.4 million, increase in out-of park revenues, offset slightly by a decrease of 4% in combined attendance.and attendance that was comparable with the prior year period. The increase in per capita spending was the result of higher admissions pricing, improvements in our food and beverage programs, and the successful expansion of our in-park premium benefit offerings.offerings, and improvements in our food and beverage programs. The increase in out-of-park revenues was due to the strong performance of our resort properties. The decrease inExcluding the sale our two non-core water parks, attendance for the second quarter was the direct result of fewer operating days in the period, the shift of the Easter and Spring Break holidays to the first quarter of 2013, and unfavorable short-term weather trends.increased 2%, or 207,000 visits on a comparable park basis.
Operating costs and expenses for the quarter decreased 2%increased 4%, or $5.1$11.3 million, to $218.1$275.0 million from $223.2$263.7 million in the secondthird quarter of 2012, the net result of a $1.4$1.5 million decrease in cost of goods sold, a $5.0$7.0 million decreaseincrease in operating expenses and a $1.3$5.7 million increase in SG&A costs. As a percentage of net revenues, costs and expenses decreased 120 basis points, and was in line with expectations. The decrease in cost of goods sold was primarily the result of successful cost-savings initiatives in food and beverage. The $5.0$7.0 million decreaseincrease in operating expenses was primarily due to lower employee-relateda $2.8 million increase in employee related costs, and maintenancea $1.6 million increase in operating supplies, and expenses.a $1.5 million increase in maintenance expense. The declineincrease in employee related costs was primarily due to the one less week of operations during the second quarter of 2013 compared with the second quarter of 2012, as well as reduced expenses related to the sale of one of our water parkshigher staffing levels, salary increases, and increases in November 2012. The decline in maintenancebenefit costs. Operating supplies wasincreased due to the timing of expenses due to the one less week in operations during the second quarter of 2013.premium benefit offerings and improved guest services. The $1.3$5.7 million increase in SG&A costs was due to increases in employee-related costs and agency advertising costs, offset somewhat by a decline in professional and administrative costs. The increase in SG&A employee-related expenses was due to improvementsan increase in staffing levels across the company,performance incentive awards due to strong 2013 operating results to date, as well as an increase in equity-related compensation due to unit price appreciation.staffing levels across the company. Advertising costs increased as a result of additional marketing efforts in the period.period, including our Customer Relationship Management platform.
Depreciation and amortization expense for the quarter decreased $1.9$2.7 million primarily due to several significant assets reaching the end of their depreciable lives at the end of 2012. For the third quarter of 2013, the gain on sale of other assets was $8.7 million, reflecting the gain on the sale of one of our non-core water parks. Loss on impairment/retirement of fixed assets for the current period was $1.6 million, reflecting losses on the retirement of assets across all of our parks. Loss on impairment/retirement of fixed assets during the quarter ended September 30, 2012 totaled $25.0 million, which reflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom. After depreciation, amortization, gain on sale of other assets, loss (gain) on impairment / retirement of fixed assets, and all other non-cash costs, operating income in the secondthird quarter of 2013 increased $10.1$62.1 million to $97.4$266.7 million from operating income of $87.3$204.6 million in the secondthird quarter of 2012.
Interest expense for the secondthird quarter of 2013 was $25.9$25.5 million, representing a $4.4$1.3 million decrease from the interest expense for the secondthird quarter of 2012. As mentioned in the six-monthnine-month discussion above, interest expense decreased primarily due to a reduction in average revolver balance and lower average rates on the revolver, as well as a reduction in non-cash deferred loan fee amortization resulting from the write-off of fees related to our prior credit agreement.
During the 2013 secondthird quarter, the net effect of our swaps resulted in a $2.3$1.4 million non-cash benefitcharge to earnings, compared to a non-cash benefit to earnings of $0.2 million in the secondthird quarter of 2012. The net effect of swaps reflects the regularly scheduled amortization of amounts in AOCI related to the swaps and ineffective fair value movements in our non-designated derivative portfolio. During the 2013 secondthird quarter, we also recognized a $14.9$8.6 million net chargebenefit to earnings for unrealized/realized foreign currency losses related to angains, which included a $8.5 million unrealized foreign currency lossgain on the U.S.-dollar denominated debt held at our Canadian property.
During the quarter, a provision for taxes of $11.7$58.0 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provision for taxes of $11.4$51.9 million in the same period a year ago. After interest expense and the provision for taxes, net income for the quarter totaled $47.4$190.4 million, or $0.85$3.41 per diluted limited partner unit, compared with net income of $36.6$141.0 million, or $0.66$2.52 per diluted unit, for the secondthird quarter a year ago.
For the current quarter, Adjusted EBITDA increased to $144.1$318.4 million from $135.0$292.3 million for the fiscal secondthird quarter of 2012. The approximate $9.1$26.1 million increase in Adjusted EBITDA was primarily duelargely attributable to incremental revenues resulting primarily from higher average guest per capita spending, as well as increases in out-of-park revenues in the quarter. Adjusted EBITDA in the second quarter also benefited from a reduction in operating expenses in the period, due to one less week of operationsThese revenue increases were somewhat offset by higher costs associated with improving guest services and one less water park in operation. expanding our marketing efforts.
Twelve Months Ended June 30,September 29, 2013 -
The fiscal twelve-month period ended June 30,September 29, 2013, consisted of a 52-week period and 2,2982,140 operating days compared with 53 weeks and 2,4922,416 operating days for the fiscal twelve-month period ended July 1,September 30, 2012. The difference in operating days was due primarily to anthe sale of two non-core water parks, the combination of two parks, Worlds of Fun and Oceans of Fun, into one gate during 2013, and the extra week of operations in the twelve monthtwelve-month period ending July 1,September 30, 2012.
The following table presents key financial information for the twelve months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | | (52 weeks) | | (53 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,086,069 |
| | $ | 1,102,917 |
| | $ | (16,848 | ) | | (1.5 | )% | Operating costs and expenses | | 689,010 |
| | 700,446 |
| | (11,436 | ) | | (1.6 | )% | Depreciation and amortization | | 125,136 |
| | 130,416 |
| | (5,280 | ) | | (4.0 | )% | (Gain) on sale of other assets | | (6,625 | ) | | — |
| | (6,625 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 31,735 |
| | 10,389 |
| | 21,346 |
| | N/M |
| Operating income | | $ | 246,813 |
| | $ | 261,666 |
| | $ | (14,853 | ) | | (5.7 | )% | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 404,590 |
| | $ | 411,007 |
| | $ | (6,417 | ) | | (1.6 | )% | Adjusted EBITDA margin | | 37.3 | % | | 37.3 | % | | — |
| | — | % | Attendance | | 23,248 |
| | 24,934 |
| | (1,686 | ) | | (6.8 | )% | Per capita spending | | $ | 42.67 |
| | $ | 40.40 |
| | $ | 2.27 |
| | 5.6 | % | Out-of-park revenues | | $ | 119,611 |
| | $ | 124,394 |
| | (4,783 | ) | | (3.8 | )% |
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (52 weeks) | | (53 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,124,700 |
| | $ | 1,084,094 |
| | $ | 40,606 |
| | 3.7 | % | Operating costs and expenses | | 700,317 |
| | 701,915 |
| | (1,598 | ) | | (0.2 | )% | Depreciation and amortization | | 122,408 |
| | 127,191 |
| | (4,783 | ) | | (3.8 | )% | Gain on sale of other assets | | (15,368 | ) | | — |
| | (15,368 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 8,372 |
| | 34,509 |
| | (26,137 | ) | | N/M |
| Operating income | | $ | 308,971 |
| | $ | 220,479 |
| | $ | 88,492 |
| | 40.1 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 430,663 |
| | $ | 393,612 |
| | $ | 37,051 |
| | 9.4 | % | Adjusted EBITDA margin | | 38.3 | % | | 36.3 | % | | — |
| | 2.0 | % | Attendance | | 23,263 |
| | 23,961 |
| | (698 | ) | | (2.9 | )% | Per capita spending | | $ | 44.13 |
| | $ | 41.44 |
| | $ | 2.69 |
| | 6.5 | % | Out-of-park revenues | | $ | 124,041 |
| | $ | 119,460 |
| | 4,581 |
| | 3.8 | % |
Net revenues totaled $1,086.11,124.7 million for the twelve months ended June 30,September 29, 2013, decreasingincreasing $16.840.6 million, from $1,102.91,084.1 million for the trailing twelve months ended July 1,September 30, 2012. The 2% decrease4% increase in revenues for the twelve-month period was primarily due to the extra week of operationsdriven by a 7% increase in the prior year's twelve month period. For the current twelve month period,average in-park guest per capita spending, increased 6%, onthe result of a stronger admissions per capita spendingcap and improved pure in-park spending. The increase in pure in-park spending which was driven largely byin large part the result of improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Attendance for the period decreased between
years due primarily to the extra week of operations in the twelve-month period ended July 1, 2012.September 30, 2012, as well as the sale of two non-core water parks during the current year period. Out-of-park revenues increased $4.6 million primarily due to an increase in processing fees as part of our expansion of ticketing options. The decreaseincrease in net revenues for the twelve months ended June 30,September 29, 2013 also reflects the negative impact of currency exchange rates and the weakening Canadian dollar on our Canadian operations (approximately $3.7$3.2 million) during the period.
Operating costs and expenses decreased $11.4$1.6 million, or 2%less than 1%, to $689.0$700.3 million, in large part due to one less week of operations in the current twelve-month period, and were in line with expectations. The decrease in costs and expenses reflects a $2.8$2.9 million decrease in cost of goods sold and a $6.4$1.2 million decrease in operating expenses, anddue primarily to the one less week in the period. These year-over-year cost decreases were partially offset by a $2.2 decrease$2.6 million increase in SG&A costs. The increase in SG&A costs reflects a $2.8 million increase in employment-related costs related to higher staffing levels and incentive compensation plans tied to company performance and a $3.0 million increase in advertising costs related to the transition to a new advertising agency, somewhat offset by a $2.6 decrease in professional and administrative costs, the result of reductions in litigation expenses and consulting fees in the period. The overall decrease in costs and expenses also reflects the impact of exchange rates on our Canadian operations ($0.61.0 million) during the period.
For the twelve-month period ending September 29, 2013, the gain on sale of other assets was $15.4 million, reflecting the gain on the sale of two non-core water parks during the period. Loss on impairment/retirement of fixed assets net,for the period was $8.4 million, due to the removal of a ride to enhance a section of one of our parks, as well as retirements of assets across all of our properties. Loss on impairment/retirement of fixed assets during the period ended September 30, 2012 totaled $31.7$34.5 million, which reflectsreflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom along with losses on other retirements. During the twelve-month period ended June 30, 2013, two non-core assets were sold at gains totaling $6.6 million. During the twelve-month period ended July 1, 2012, aand an $8.8 million charge of $10.4 million for the retirement of fixed assets was recorded,an asset which includes the retirement of the asset asis further described in Note 11 to the financial statements.
Depreciation and amortization expense for the period decreased $5.3$4.8 million compared with the prior period due primarily to several significant assets being fully depreciated at the end of 2012. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for the current period decreased $14.9increased $88.5 million to $246.8$309.0 million from $261.7$220.5 million.
Interest expense for the twelve months ended June 30,September 29, 2013 decreased $25.7$12.5 million to $105.2$103.9 million, from $130.9$116.4 million for the same twelve-month period a year ago. The reductiondecrease in interest expense was primarily attributablereflects a decrease in revolver interest in the period due to an approximate 300 basis point (bps) declinelower borrowings and a lower average cost resulting from the March 2013 refinancing, a decrease in non-cash amortization expense resulting from the write-off of loan fees related to our effective interest rate,prior credit agreement, and the result of lower fixed rates on London InterBank Offered Rate (LIBOR) within our interest-rate swap contracts. Additionally during the current period, the average outstanding balanceimpact of the revolver, as well assettlement of our Canadian cross-currency swaps in the average borrowing rate on the revolver, both declined resulting in lower interest expense.first quarter of 2012.
During the current twelve-month period, the net effect of our interest rate swaps was recorded as a charge to earnings of $6.6$8.1 million compared to a benefit to earnings of $14.7$10.9 million in the prior twelve-month period. The difference reflects the regularly scheduled amortization of amounts in AOCI and write-off of amounts related to de-designated 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 period, we also recognized a $13.7$20.2 million charge to earnings for unrealized/realized foreign currency losses, which included a $13.9$19.4 million unrealized foreign currency loss 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.
A provision for taxes of $17.9$24.0 million was recorded in the period for the tax attributes of our corporate subsidiaries and PTP taxes. This compares with a provision for taxes of $13.8$27.9 million in twelve-month period ended July 1, 2012 for the tax attributes of our corporate subsidiaries and PTP taxes.September 30, 2012.
After interest expense and provision for taxes, net income for the period totaled $69.0$118.4 million, or $1.24$2.12 per diluted limited partner unit, compared with net income of $117.1$105.9 million, or $2.10$1.89 per diluted unit, a year ago.
As discussed above, the current twelve-monthtrailing-twelve-month results include one less week of operations due to the timing of the secondthird quarter fiscal close. Comparing the twelve-month periods for both 2013 and 2012 on a comparable 52-week basis, net revenues would be up approximately $37.3$55.1 million, or 4%5%, on increases in both average in-park guest per capita spending and out-of- parkout-of-park revenues, partially offset by a slight decline in attendance. The increase in average in-park guest per capita spending is primarily due to a higher admissions per capita spendingcap and improved pure in-park spending, which was driven largely by improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Out-of-park revenues would have increased $0.7$6.3 million primarily due to an increase in transaction fees from on-line ticket sales. Attendance for the comparable period would have decreased 404,000351,000 visits, primarily due to soft attendance during the fourth quarter of 2012 compared with the fourth quarter of 2011.
On a comparable 52-week basis, operating costs and expenses would have increased approximately $10.1$9.1 million, the net result of a $1.7$1.9 million increasedecrease in cost of goods sold, a $7.4$6.2 million increase in operating expenses and a $1.0$4.8 million increase in SG&A costs. The increase in operating expenses was primarily attributable to an increase in employment-related expenses of $7.0$3.3 million, a $4.7$3.9 million increase in operating supply costs, a $1.9 million increase in property and other non-income taxes, and a $1.4$1.6 million increase in utility costs. Somewhat offsetting these operating-expense increases were decreases in maintenance expenses of $5.0$3.5 million and insurance expenses of $3.3$1.6 million. The increase in employment-related costs was largely due to higher benefit costs and increased seasonal labor hours resulting from expanded operating hours at several parks, the introduction of additional attractions and enhanced guest services at our parks. Operating supply costssupplies increased due largely to the introduction of new extra-charge attractions and incremental expenses related to our expanded premium benefit offerings. Property taxes increased due to the timing
of the receipt of a refund at one of our parks in the trailing-twelve-month period ended July 1, 2012, while utilityUtility costs increased primarily due to rate increases and the addition of new rides and attractions at the parks. The increase in SG&A costs for the period reflects a $3.1$3.4 million increase in employment-related costs due to higher staffing levels and bonusincentive compensation plans tied to company performance, and a $1.9$4.0 million increase in advertising costs related to the transition to a new advertising agency, and a $1.3 million increase in operating supplies, largely related to the expansion of our e-commerce platform.agency. Somewhat offsetting these SG&A cost increases was a $4.6$2.5 million decrease in professional and administrative costs primarily due to reductions in litigation expenses and consulting fees in the period.
Adjusted EBITDA for the twelve-month period ended June 30,September 29, 2013, decreased $6.4increased $37.1 million, or 2%9%, to $404.6$430.7 million. This decrease was due to the one fewer operating week in the current twelve-month period. On a same-week basis, Adjusted EBITDA for the twelve-month period would have increased approximately $26.1$40.9 million, or 7%11%. On a same-week basis, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased 120190 bps to 37.3%38.3% from 36.1%36.4% for the twelve-month period ended June 30,September 29, 2013, primarily due to an increase in revenues resulting from the continued success of high-margin revenues initiatives as our new premium guest benefit offerings and theour admission pricing, program combined with continued focus on controlling operating costs.
JulyOctober 2013 -
Based on preliminary results, through August 4, 2013, net revenues through November 3, 2013 were approximately $712$1,104 million, up 5%6%, or $36$65 million, compared with $676$1,039 million for the same period last year. The increase was athe result of an approximate 5%6%, or $2.24,$2.31, increase in average in-park guest per capita spending to $43.47,a record $44.33, and aan approximate 7%, or $5$8 million increase, in out-of-park revenues to $78$117 million. These increases were slightly offset by a less than one percent, or 52,000-visit, decreaseAlso contributing to revenue growth was an increase in attendance to 15.0 million visits.of 100,000 visits, compared with last year. Excluding the sale of two water park sold in 2012,parks, attendance was up 1%2%, or 75,000334,000 visits, when compared with this time last year.to a record 22.7 million visits on a comparable park basis.
Liquidity and Capital Resources: With respect to both liquidity and cash flow, we ended the secondthird quarter of 2013 in sound condition. The negative working capital ratio (current liabilitiesassets divided by current assets)liabilities) of 1.21.5 at June 30,September 29, 2013 reflects the impact of our seasonal business. Cash, receivablesReceivables, inventories, and inventoriespayables are at normal seasonal levels and credit facilities arelevels. Operating Activities During the nine-month period ended September 29, 2013, net cash provided by operating activities increased $40.2 million from the same period a year ago, primarily due to the year-over-year growth in placerevenues. For the twelve-month period ended September 29, 2013 net cash provided by operating activities increased $52.3 million from the same period a year ago, also reflective of the year-over-year growth in revenues. Investing Activities Net cash used in investing activities in the first nine months of 2013 was $82.2 million, an increase of $7.6 million compared with the nine month period ended September 30, 2012. Within investing activities, capital expenditures increased $21.7 million. During the current period, $15.3 million was received for the sale of a non-core waterpark. Net cash used in investing activities for the trailing-twelve-month period ended September 29, 2013 totaled $86.6 million compared with $91.9 million for the same period a year ago. The decrease reflects the receipt of $30.2 million from the sale of two non-core water parks during the period, offset somewhat by a $23.6 million increase in capital expenditures. Financing Activities Net cash used in financing activities in the first nine months of 2013 was $130.1 million, a decrease of $12.3 million compared with the nine-month period ended September 30, 2012. The decrease was due to funda one-time cash cost of $50.5 million to settle our Canadian derivative in the first quarter of 2012, offset somewhat by an increase in distributions paid in the current liabilities.year of $37.9 million. Net cash used in financing activities in the trailing-twelve-month period ended September 29, 2013 totaled $150.6 million, a decrease of $31.2 million compared with the twelve-month period ended September 30, 2012. The decrease was due to the $50.5
million Canadian derivative settlement in 2012, offset somewhat by an increase in distributions paid of $21.4 million in the current twelve-month period. 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 was scheduled to mature in December of 2017 and bore interest at a rate of LIBOR plus 300 bps, with a LIBOR floor of 100 bps.
The Amended 2010 Credit Agreement also included 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, was scheduled to mature in July of 2015, also provided for the issuance of documentary and standby letters of credit.
In March 2013,we issued $500 million of 5.25% 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 2013 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 include a revolving credit facility of a combined $255 million. Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility has a limit of $15 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 50 bps per annum on the unused portion of the credit facilities.
At the end of the quarter, we had a total of $628.4 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $901.4 million of fixed-rate debt (including OID), $58.0 million outstanding borrowings under our revolving credit facility, and cash on hand of $43.6 million. After letters of credit, which totaled $16.4 million at June 30, 2013, we had $180.6 million of available borrowings under the revolving credit facility under the 2013 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%.
In February 2011, we amended our 2010 Credit Agreement (as so amended, the "Amended 2010 Credit Agreement") to provide a $1,175 million senior secured term loan facility with interest at a rate of LIBOR plus 300 bps along with a LIBOR floor of 100 bps. The amendment extended the maturity date of the term loan portion of the credit facilities to December 2018. The Amended 2010 Credit Agreement also included 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 was scheduled to mature in July of 2015, also provided for the issuance of documentary and standby letters of credit.
In March 2013, we issued $500 million of 5.25% senior unsecured notes, maturing in 2021, in a private placement, with no OID. 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%.
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 2013 Credit Agreement were used to repay in full all amounts outstanding under the Amended 2010 Credit Agreement. 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 include a revolving credit facility of a combined $255 million. The Canadian portion of the revolving credit facility has a limit of $15 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 50 bps per annum on the unused portion of the credit facilities. At the end of the quarter, we had a total of $628.4 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $901.6 million of fixed-rate debt (including OID), no outstanding borrowings under our revolving credit facility, and cash on hand of $183.5 million. After letters of credit, which totaled $16.4 million at September 29, 2013, we had $238.6 million of available borrowings under the revolving credit facility. In order to maintainlock in fixed interest costs on a portion of our domestic term debt, in September 2010 we entered into several forward-starting swap agreements ("September 2010 swaps") to effectively convert a total of $600 million of variable-rate debt to fixed rates beginning in October 2011. As a result of the February 2011 amendment to the 2010 Credit Agreement, the LIBOR floor on the term loan portion of its 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 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 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 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 was 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 (together referred to as the "Combination 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 swapsCombination Swaps were jointly designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.33%. At the time of the de-designation, the fair market value of the September 2010 swaps and March 2011 swaps was $22.2 million, which will be amortized out of AOCI into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive income through 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. During the third quarter of 2013, the Combination Swaps were de-designated as the hedge effectiveness testing indicated that these swaps would be ineffective throughout the remaining periods until maturity. This de-designation had no effect on the unaudited condensed consolidated statements of operations as previous amounts recorded in AOCI had already been accounted for on March 6, 2013. During the third quarter of 2013, the Partnership entered into three forward-starting interest rate swap agreements ("2013 forwards") that will effectively convert $400 million of variable-rate debt to fixed rates beginning in December of 2015. These swaps, which were designated as cash flow hedges, mature on December 31, 2018 and fix LIBOR at a weighted average rate of 3.00%. In October 2013, the Partnership entered into an additional forward-starting interest rate swap agreement ("October 2013 swaps") that will effectively convert $100 million of variable-rate debt to a 2.70% fixed rate beginning in December of 2015. At June 30,September 29, 2013, the fair market value of the September 2010 swaps, the March 2011 swaps and the March 2013 swapsderivative portfolio was a liability of $20.131.6 million, which was recorded in “Derivative Liability” on the condensed consolidated balance sheet. The May 2011 swaps had a fair market value of $6.7 million as of June 30, 2013 and was recorded in “Derivative Liability” on the condensed consolidated balance sheet.
The following table presents our September 20102013 forwards and the October 2013 swaps March 2011 swaps,which mature in December 2018, and the Combination Swaps and May 2011 swaps, and March 2013 swaps which mature December 15, 2015, along with their notional amounts and their fixed interest rates. | | | | | | | | | | | | | | | | Interest Rate Swaps | ($'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 |
| | 2.43 | % | | | | | | 25,000 |
| | 2.30 | % | | | | | Total $'s / Average Rate | $ | 600,000 |
| | 2.33 | % | | $ | 200,000 |
| | 2.54 | % |
| | | | | | | | | | | | | | | | 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 |
| | 3.00 | % | | $ | 200,000 |
| | 2.27 | % | | 100,000 |
| | 3.00 | % | | 150,000 |
| | 2.43 | % | | 100,000 |
| | 3.00 | % | | 75,000 |
| | 2.30 | % | | 100,000 |
| | 2.70 | % | | 70,000 |
| | 2.54 | % | | | | | | 50,000 |
| | 2.54 | % | | | | | | 50,000 |
| | 2.54 | % | | | | | | 50,000 |
| | 2.43 | % | | | | | | 50,000 |
| | 2.29 | % | | | | | | 50,000 |
| | 2.29 | % | | | | | | 30,000 |
| | 2.54 | % | | | | | | 25,000 |
| | 2.30 | % | Total $'s / Average Rate | $ | 500,000 |
| | 2.94 | % | | $ | 800,000 |
| | 2.38 | % |
The 2013 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,and not cured, 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 secondthird quarter of 2013, this ratio was set at 6.25x 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 June 30,September 29, 2013, our Consolidated Leverage Ratio was 3.813.57x, providing $157.0184.1 million of EBITDA cushion on the ratio at the end of the secondthird quarter. We were in compliance with all other covenants under the 2013 Credit Agreement as of June 30,September 29, 2013. The 2013 Credit Agreement allows restricted payments of up to $60 million so long as no default or event of default has occurred and is continuing. Additional 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 5.0x, measured on a trailing-twelve-month quarterly basis. At June 30,September 29, 2013, the notes maturing in 2018 have the more restrictive covenants than the 2021 notes.covenants. 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 2013 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 MayAugust 8, 2013, we announced the declaration of a distribution of $0.625 per limited partner unit, which was paid on June 17,September 16, 2013, and on August 8,November 7, 2013 we announced the declaration of a distribution of $0.625$0.70 per limited partner unit, payable SeptemberDecember 16, 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 $16.4 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of June 30,September 29, 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 June 30,September 29, 2013, we had $901.4$901.6 million of fixed-rate senior unsecured notes and $628.4 million of variable-rate term debt. After considering the impact of interest rate swap agreements, virtually all of our outstanding long-term debt represents fixed-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $35$31 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt, after the fixed-rate swap agreements, would lead to a decrease of approximately $0.7 million in annual cash interest costs. A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $3.9$3.7 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 June 30,September 29, 2013, the Partnership's management has evaluated the effectiveness of the design and operation of the Partnership's disclosure controls and procedures under supervision of management, and 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 were effective as of June 30, 2013.September 29, 2013.
(b)Changes in Internal Control Over Financial Reporting - There were no changes in the Partnership’s internal control over financial reporting that occurred during the fiscal quarter ended June 30,September 29, 2013 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. On April 19, 2013 the Court of 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. On June 3, 2013 the Company filed a Notice of Appeal and Memorandum in Support of Jurisdiction with the Ohio Supreme Court related to the April 19, 2013 Court of Appeals decision. On July 2, 2013 Mr. Falfas filed a Memorandum in Opposition to Jurisdiction with the Ohio Supreme Court. TheOn September 25, 2013 the Supreme Court will review the jurisdictional memoranda filed and determine whether to acceptof Ohio accepted the appeal on Proposition of Law No. 1 related to the Supreme Court’s holding in Masetta v. National Bronze & Aluminum Foundry Co. 159 Ohio St. 306 (1953), barring specific performance as a remedy for a personal services contract under Ohio law and decide the caseits applicability to individual employment agreements. The matter will now proceed on the merits.merits and both sides will have the opportunity to file briefs with the court in support of their respective arguments. The Partnership believes the liability recorded
as of June 30,September 29, 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 ourthe Partnership's Annual Report on Form 10-K for the year ended December 31, 2012.
ITEM 5. OTHER INFORMATION
On May 8, 2013, the Partnership announced that it had identified a historical classification error in the Partnership'sits initial determination of whether a specific asset retired under the composite method of depreciation was normal or unusual. The error resulted in the overstatement of Income before taxes of $8.8 million for the period 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 would 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 beingthat was 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 substantial net book value and/or if the retirement caused a deviation from the estimated composite depreciation survivor curve as well as other minor qualitative issues.
The restatement amount of $8.8 million iswas recorded in Loss on impairment / retirement of fixed assets, net in the Annual Report on Form 10-K/A filing to correct the previous error.
As disclosed in the Partnership's prior filings, the Partnership 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 be recorded in the Consolidated Statements of Operations and Comprehensive Income.
ITEM 6. EXHIBITS | | | | Exhibit (10.1) | | Amendment No. 1 dated September 30, 2013 to the 2013 Credit Agreement dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with Matthew A. Ouimet, dated October 21, 2013. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013. | | | | 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 June 30,September 29, 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: | August 8,November 7, 2013 | /s/ Matthew A. Ouimet | | | Matthew A. Ouimet | | | President and Chief Executive Officer | | | | | Date: | August 8,November 7, 2013 | /s/ Brian C. Witherow | | | Brian C. Witherow | | | Executive Vice President and | | | Chief Financial Officer |
INDEX TO EXHIBITS | | | | Exhibit (10.1) | | Amendment No. 1 dated September 30, 2013 to the 2013 Credit Agreement dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with Matthew A. Ouimet, dated October 21, 2013. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013. | | | | 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 June 30,September 29, 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) | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments |
Total
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the three-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps | | $ | — |
| | $ | (2,866 | ) | | Interest Expense | | $ | — |
| | $ | (3,221 | ) | | Net effect of swaps | | $ | 3,268 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | (5,483 | ) | | $ | 438 |
| | Interest Expense | | $ | — |
| | $ | (2,990 | ) | | Net effect of swaps | | $ | — |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (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 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps (1) | | Net effect of swaps | | 992 |
| | — |
| | | | | $ | 992 |
| | $ | — |
| | | | | | | |
| | | | | | | | | | | | (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 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps (1) | | Net effect of swaps | | 609 |
| | — |
| | | | | $ | 609 |
| | $ | — |
| | | | | | | |
| | (1) | The May 2011 interest rate swaps were de-designated in March 2013. The Combination Swaps were de-designated in July 2013. |
During the quarter ended June 30,September 29, 2013, in addition to gains of $3.3 million and $1.00.6 million 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), $2.0 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 these amounts resulted in a benefitcharge to earnings of $2.31.4 million recorded in “Net effect of swaps.”
For the three-month period ended July 1,September 30, 2012, $0.2 million of expenseincome representing the amortization of amounts in AOCI was recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The effect of this amortization resulted in a benefit to earnings of $0.2 million recorded in “Net effect of swaps.”
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the six-monthnine-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | Six months ended | | Six months ended | | | | Six months ended | | Six months ended | | | | Six months ended | | Six months ended | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps | | $ | 2,266 |
| | $ | (2,746 | ) | | Interest Expense | | $ | (2,797 | ) | | $ | (6,014 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | (3,217 | ) | | $ | (2,308 | ) | | Interest Expense | | $ | (2,797 | ) | | $ | (9,004 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | — |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands): | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Six months ended | | Six months ended | | | | 6/30/13 | | 7/1/12 | 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 | | (479 | ) | | — |
| | | | | $ | (479 | ) | | $ | 1,279 |
| | | | | | | |
| | | | | | | | | | | | (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 | | | | 9/29/13 | | 9/30/12 | 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 | | 130 |
| | — |
| | | | | $ | 130 |
| | $ | 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. The Combination Swaps were de-designated in July 2013. |
During the six-monthnine-month period ended June 30,September 29, 2013, in addition to the $3.7 million gain recognized in income on the ineffective portion of derivatives and $0.50.1 million lossgain on the derivatives not designated as cash flow hedges (as noted in the tables above), $7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $2.34.3 million of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the quarter.period. The effect of these amounts resulted in a charge to earnings of $6.98.3 million recorded in “Net effect of swaps.”
For the six-monthnine-month period ended July 1,September 30, 2012, in addition to the $1.3 million gain recognized in income on the ineffective portion of derivatives noted in the tables above, $0.40.2 million of expense representing the amortization of amounts in AOCI for the swaps and $0.2 million of foreign currency gain in the quarterperiod 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 $1.11.3 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 June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | | | | 6/30/13 | | 7/1/12 | Interest rate swaps | | $ | 5,152 |
| | $ | (18,396 | ) | | Interest Expense | | $ | (8,810 | ) | | $ | (9,037 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | 20,193 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | Interest rate swaps | | $ | (769 | ) | | $ | (873 | ) | | Interest Expense | | $ | (5,820 | ) | | $ | (12,027 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | 4,797 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (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 | | | | 6/30/13 | | 7/1/12 | Cross-currency swaps (1) | | Net effect of swaps | | — |
| | 9,139 |
| Foreign currency swaps | | Net effect of swaps | | — |
| | (3,081 | ) | Interest rate swaps (2) | | Net effect of swaps | | $ | (479 | ) | | $ | — |
| | | | | $ | (479 | ) | | $ | 6,058 |
| | | | | | | |
| | | | | | | | | | | | (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 | | | | 9/29/13 | | 9/30/12 | Cross-currency swaps (1) | | Net effect of swaps | | — |
| | (4,483 | ) | Foreign currency swaps | | Net effect of swaps | | — |
| | 10,129 |
| Interest rate swaps (2) | | Net effect of swaps | | $ | 130 |
| | $ | — |
| | | | | $ | 130 |
| | $ | 5,646 |
| | | | | | | |
| | (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. The Combination Swaps were de-designated in July 2013. |
In addition to the $3.7 million gain recognized in income on the ineffective portion of derivatives and $0.50.1 million lossgain recognized in income on the ineffective portion of derivatives not designated as cash flow hedges (as noted in the tables above), $7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $2.04.1 million of expense representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended June 30,September 29, 2013 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 $6.68.1 million recorded in “Net effect of swaps.” For the twelve monthtwelve-month period ending July 1,September 30, 2012, in addition to the $20.24.8 million gain recognized in income on the ineffective portion of derivatives designated as derivatives and $6.15.6 million of gain recognized in income on the ineffective portion of derivatives not designated as derivatives noted in the tables above, $11.30.1 million of expenseincome representing the amortization of amounts in AOCI for the swaps and a $0.30.4 million foreign currency lossgain in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended July 1,September 30, 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 $14.710.9 million recorded in “Net effect of swaps.” The amounts reclassified from AOCI into income for the periods noted above are primarily 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 June 30,September 29, 2013, December 31, 2012, and July 1,September 30, 2012 on a recurring basis: | | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | June 30, 2013 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (20,122 | ) | | $ | — |
| | $ | (20,122 | ) | | $ | — |
| Interest rate swap agreements (2) | | (6,650 | ) | | — |
| | (6,650 | ) | | — |
| Net derivative liability | | $ | (26,772 | ) | | $ | — |
| | $ | (26,772 | ) | | $ | — |
| | | | | | | | | | December 31, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | July 1, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (35,146 | ) | | $ | — |
| | $ | (35,146 | ) | | $ | — |
| Net derivative liability | | $ | (35,146 | ) | | $ | — |
| | $ | (35,146 | ) | | $ | — |
|
| | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | September 29, 2013 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (5,483 | ) | | $ | — |
| | $ | (5,483 | ) | | $ | — |
| Interest rate swap agreements (2) | | (26,163 | ) | | — |
| | (26,163 | ) | | — |
| Net derivative liability | | $ | (31,646 | ) | | $ | — |
| | $ | (31,646 | ) | | $ | — |
| | | | | | | | | | December 31, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | | | | | | | | | September 30, 2012 | | | | | | | | | Interest rate swap agreements (1) | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| Net derivative liability | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
|
| | (1) | Designated as cash flow hedges and are included in “Derivative Liability” on the Unaudited Condensed Consolidated Balance Sheet |
| | (2) | Not designated as cash flow hedges and are included in "Derivative Liability" on the Unaudited Condensed Consolidated Balance Sheet |
Fair values of the interest rate swap agreements are determined using significant inputs, including the LIBOR 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 $0.70.9 million as of June 30,September 29, 2013. The carrying value of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximates fair value because of the short maturity of these instruments. There were no assets measured at fair value on a non-recurring basis at June 30,September 29, 2013 or July 1,September 30, 2012, 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. The fair value of term debt at June 30,September 29, 2013 was approximately $630.0627.6 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 June 30,September 29, 2013 was approximately $913.2922.0 million based on public trading levels as of that date. The fair value of the term debt was based on Level 2 inputs and the notes were based on Level 1 inputs.
(8) Earnings per Unit: Net income (loss) per limited partner unit is calculated based on the following unit amounts: | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Six months ended | Twelve months ended | | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | 6/30/2013 | | 7/1/2012 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,484 |
| | 55,481 |
| | 55,464 |
| | 55,433 |
| 55,446 |
| | 55,389 |
| Effect of dilutive units: | | | | | | | | | | | | Unit options and restricted unit awards | | 152 |
| | 2 |
| | — |
| | — |
| 84 |
| | 3 |
| Phantom units | | 186 |
| | 335 |
| | — |
| | — |
| 261 |
| | 452 |
| Diluted weighted average units outstanding | | 55,822 |
| | 55,818 |
| | 55,464 |
| | 55,433 |
| 55,791 |
| | 55,844 |
| Net income (loss) per unit - basic | | $ | 0.85 |
| | $ | 0.66 |
| | $ | (1.11 | ) | | $ | (0.52 | ) | $ | 1.24 |
| | $ | 2.11 |
| Net income (loss) per unit - diluted | | $ | 0.85 |
| | $ | 0.66 |
| | $ | (1.11 | ) | | $ | (0.52 | ) | $ | 1.24 |
| | $ | 2.10 |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | Twelve months ended | | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | 9/29/2013 | | 9/30/2012 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,485 |
| | 55,611 |
| | 55,472 |
| | 55,473 |
| 55,460 |
| | 55,440 |
| Effect of dilutive units: | | | | | | | | | | | | Unit options and restricted unit awards | | 189 |
| | 45 |
| | 146 |
| | 42 |
| 120 |
| | 31 |
| Phantom units | | 189 |
| | 336 |
| | 185 |
| | 333 |
| 224 |
| | 416 |
| Diluted weighted average units outstanding | | 55,863 |
| | 55,992 |
| | 55,803 |
| | 55,848 |
| 55,804 |
| | 55,887 |
| Net income per unit - basic | | $ | 3.43 |
| | $ | 2.54 |
| | $ | 2.32 |
| | $ | 2.02 |
| $ | 2.13 |
| | $ | 1.91 |
| Net income per unit - diluted | | $ | 3.41 |
| | $ | 2.52 |
| | $ | 2.31 |
| | $ | 2.01 |
| $ | 2.12 |
| | $ | 1.89 |
| | | | | | | | | | | | |
The effect of unit options on the three, sixnine and twelve months ended June 30,September 29, 2013, had they not been out of the money or antidilutive, would have been zero, 8,9007,000, and 8,5004,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three, sixnine and twelve months ended July 1,September 30, 2012, had they not been out of the money or antidilutive, would have been 66,000, 31,00034,000 and 41,50036,000 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. 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. As of the secondthird quarter of 2013 the Partnership has recorded $1.1 million of 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) Restatement:
We haveThe Partnership has made the following correction relating to ourits use of the composite depreciation method.
This correction, which impacts the Balance Sheet at July 1,September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three, six,three-, nine-, and twelve monthtwelve-month periods ended July 1,September 30, 2012, reflects a subsequent determination that a disposition from ourthe Partnership's 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 reviewed in connection with respondinga response to an SEC comment letter. WeThe Partnership ultimately concluded that such disposition was unusual and that an $8.8 million charge should be reflected in the 2011 financial statements.
The tables below reflect the impact on the financial statements of the correction as described above.
| | | | | Balance Sheet | | (In thousands) | 7/1/2012 | Accumulated depreciation | | As filed | $ | (1,111,530 | ) | Correction | (8,369 | ) | As restated | $ | (1,119,899 | ) | Total assets | | As filed | $ | 2,141,898 |
| Correction | (8,369 | ) | As restated | $ | 2,133,529 |
| Deferred Tax Liability | | As filed | $ | 137,288 |
| Correction | (3,180 | ) | As restated | $ | 134,108 |
| Limited Partners' Equity | | As filed | $ | 93,946 |
| Correction | (5,189 | ) | As restated | $ | 88,757 |
|
| | | | | Balance Sheet | | (In thousands) | 9/30/2012 | Accumulated depreciation | | As filed | $ | (1,175,744 | ) | Correction | (7,845 | ) | As restated | $ | (1,183,589 | ) | Total assets | | As filed | $ | 2,089,837 |
| Correction | (7,845 | ) | As restated | $ | 2,081,992 |
| Deferred Tax Liability | | As filed | $ | 143,094 |
| Correction | (2,981 | ) | As restated | $ | 140,113 |
| Limited Partners' Equity | | As filed | $ | 212,797 |
| Correction | (4,864 | ) | As restated | $ | 207,933 |
|
| | | | | | | | | | | | | | Statements of Operations and Other Comprehensive Income | (In thousands except per unit amounts) | | Three months ended | | Six months ended | | Twelve months ended | | | 7/1/2012 | | 7/1/2012 | | 7/1/2012 | Depreciation and amortization | | | | | | | As filed | | $ | 48,330 |
| | $ | 52,409 |
| | $ | 130,837 |
| Correction | | (421 | ) | | (421 | ) | | (421 | ) | As restated | | $ | 47,909 |
| | $ | 51,988 |
| | $ | 130,416 |
| Loss (gain) on impairment / retirement of fixed assets, net | | | | | | | As filed | | $ | (862 | ) | | $ | (770 | ) | | $ | 1,599 |
| Correction | | — |
| | — |
| | 8,790 |
| As restated | | $ | (862 | ) | | $ | (770 | ) | | $ | 10,389 |
| Income (loss) before tax | | | | | | | As filed | | $ | 47,543 |
| | $ | (39,411 | ) | | $ | 139,267 |
| Correction | | 421 |
| | 421 |
| | (8,369 | ) | As restated | | $ | 47,964 |
| | $ | (38,990 | ) | | $ | 130,898 |
| Provision (benefit) for taxes | | | | | | As filed | | $ | 11,221 |
| | $ | (10,318 | ) | | $ | 16,970 |
| Correction | | 160 |
| | 160 |
| | (3,180 | ) | As restated | | $ | 11,381 |
| | $ | (10,158 | ) | | $ | 13,790 |
| Net income (loss) | | | | | | As filed | | $ | 36,322 |
| | $ | (29,093 | ) | | $ | 122,297 |
| Correction | | 261 |
| | 261 |
| | (5,189 | ) | As restated | | $ | 36,583 |
| | $ | (28,832 | ) | | $ | 117,108 |
| | | | | | | | Basic earnings per limited partner unit: | | | | | | As filed | | $ | 0.65 |
| | $ | (0.52 | ) | | $ | 2.21 |
| Correction | | 0.01 |
| | — |
| | (0.10 | ) | As restated | | $ | 0.66 |
| | $ | (0.52 | ) | | $ | 2.11 |
| | | | | | | | Diluted earnings per limited partner unit: | | | | | | As filed | | $ | 0.65 |
| | $ | (0.52 | ) | | $ | 2.19 |
| Correction | | 0.01 |
| | — |
| | (0.09 | ) | As restated | | $ | 0.66 |
| | $ | (0.52 | ) | | $ | 2.10 |
|
| | | | | | | | | | | | | | Statements of Operations and Other Comprehensive Income | (In thousands except per unit amounts) | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/30/2012 | | 9/30/2012 | | 9/30/2012 | Depreciation and amortization | | | | | | | As filed | | $ | 60,747 |
| | $ | 113,156 |
| | $ | 128,136 |
| Correction | | (524 | ) | | (945 | ) | | (945 | ) | As restated | | $ | 60,223 |
| | $ | 112,211 |
| | $ | 127,191 |
| Loss (gain) on impairment / retirement of fixed assets, net | | | | | | | As filed | | $ | 25,000 |
| | $ | 24,230 |
| | $ | 25,719 |
| Correction | | — |
| | — |
| | 8,790 |
| As restated | | $ | 25,000 |
| | $ | 24,230 |
| | $ | 34,509 |
| Income (loss) before tax | | | | | | | As filed | | $ | 192,401 |
| | $ | 152,990 |
| | $ | 141,606 |
| Correction | | 524 |
| | 945 |
| | (7,845 | ) | As restated | | $ | 192,925 |
| | $ | 153,935 |
| | $ | 133,761 |
| Provision (benefit) for taxes | | | | | | As filed | | $ | 51,713 |
| | $ | 41,395 |
| | $ | 30,839 |
| Correction | | 199 |
| | 359 |
| | (2,981 | ) | As restated | | $ | 51,912 |
| | $ | 41,754 |
| | $ | 27,858 |
| Net income (loss) | | | | | | As filed | | $ | 140,688 |
| | $ | 111,595 |
| | $ | 110,767 |
| Correction | | 325 |
| | 586 |
| | (4,864 | ) | As restated | | $ | 141,013 |
| | $ | 112,181 |
| | $ | 105,903 |
| | | | | | | | Basic earnings per limited partner unit: | | | | | | As filed | | $ | 2.53 |
| | $ | 2.01 |
| | $ | 2.00 |
| Correction | | 0.01 |
| | 0.01 |
| | (0.09 | ) | As restated | | $ | 2.54 |
| | $ | 2.02 |
| | $ | 1.91 |
| | | | | | | | Diluted earnings per limited partner unit: | | | | | | As filed | | $ | 2.51 |
| | $ | 2.00 |
| | $ | 1.98 |
| Correction | | 0.01 |
| | 0.01 |
| | (0.09 | ) | As restated | | $ | 2.52 |
| | $ | 2.01 |
| | $ | 1.89 |
|
(12) Changes in Accumulated Other Comprehensive Income (Loss) by Component:
The following tables reflect the changes in Accumulated other comprehensive income (loss)Other Comprehensive Income (Loss) related to limited partners' equity for the periodthree-, nine-, and twelve-month periods ended June 30,September 29, 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 |
| | 1,893 |
| | 3,833 |
| | | | | | | | | | Amounts reclassified | | | | | | | | from accumulated | | | | | | | | other comprehensive | | | | | | | | income (2) | | 8,624 |
| | — |
| | 8,624 |
| | | | | | | | | Net current-period other | | | | | | | comprehensive income | | 10,564 |
| | 1,893 |
| | 12,457 |
| | | | | | | | | June 30, 2013 | | $ | (15,185 | ) | | $ | (858 | ) | | $ | (16,043 | ) |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at June 30, 2013 | | $ | (15,185 | ) | | $ | (858 | ) | | $ | (16,043 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (4,440 | ) | | (699 | ) | | (5,139 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 1,679 |
| | — |
| | 1,679 |
| | | | | | | | | Net current-period other comprehensive income | | (2,761 | ) | | (699 | ) | | (3,460 | ) | | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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 | | $ | 10,160 |
| | | Net effect of swaps | | | | $ | 10,160 |
| | | Total before tax | | | | (1,536 | ) | | | Provision (benefit) for taxes | | | | $ | 8,624 |
| | | Net of tax |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at December 31, 2012 | | $ | (25,749 | ) | | $ | (2,751 | ) | | $ | (28,500 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (2,500 | ) | | 1,194 |
| | (1,306 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 10,303 |
| | — |
| | 10,303 |
| | | | | | | | | Net current-period other comprehensive income | | 7,803 |
| | 1,194 |
| | 8,997 |
| | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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.
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at September 30, 2012 | | $ | (27,686 | ) | | $ | (4,371 | ) | | $ | (32,057 | ) | | | | | | | | | Other comprehensive income before reclassifications | | (416 | ) | | 2,814 |
| | 2,398 |
| | | | | | | | | Amounts reclassified from accumulated other comprehensive income (2) | | 10,156 |
| | — |
| | 10,156 |
| | | | | | | | | Net current-period other comprehensive income | | 9,740 |
| | 2,814 |
| | 12,554 |
| | | | | | | | | September 29, 2013 | | $ | (17,946 | ) | | $ | (1,557 | ) | | $ | (19,503 | ) |
(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 | | 3 months ended 9/29/13 | | 9 months ended 9/29/13 | | 12 months ended 9/29/13 | | | | Interest rate contracts | | $ | 1,986 |
| | $ | 12,146 |
| | $ | 11,972 |
| | Net effect of swaps | | | | $ | 1,986 |
| | $ | 12,146 |
| | $ | 11,972 |
| | Total before tax | | | | (307 | ) | | (1,843 | ) | | (1,816 | ) | | Provision (benefit) for taxes | | | | $ | 1,679 |
| | $ | 10,303 |
| | $ | 10,156 |
| | 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 June 30,September 29, 2013, December 31, 2012, and July 1,September 30, 2012 and for the three, sixnine and twelve month periods ended June 30,September 29, 2013 and July 1,September 30, 2012. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, we havethe Partnership has 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 2013 Credit Agreement, all outstanding debt has been equally reflected within each co-issuer's June 30,September 29, 2013, December 31, 2012 and July 1,September 30, 2012 balance sheets in the accompanying condensed consolidating financial statements.
The consolidating financial information has been corrected for the information described in Note 11.
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 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 | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| Receivables | | 2,960 |
| | 89,760 |
| | 86,590 |
| | 517,925 |
| | (630,036 | ) | | 67,199 |
| Inventories | | — |
| | 4,639 |
| | 4,182 |
| | 36,631 |
| | — |
| | 45,452 |
| Current deferred tax asset | | — |
| | 23,822 |
| | 816 |
| | 3,664 |
| | — |
| | 28,302 |
| Prepaid advertising | | — |
| | 9,181 |
| | 1,579 |
| | 5,854 |
| | — |
| | 16,614 |
| Other current assets | | 620 |
| | 2,259 |
| | 487 |
| | 13,908 |
| | — |
| | 17,274 |
| | | 3,580 |
| | 129,661 |
| | 115,399 |
| | 605,886 |
| | (636,057 | ) | | 218,469 |
| Property and Equipment (net) | | 463,783 |
| | 994 |
| | 250,249 |
| | 835,875 |
| | — |
| | 1,550,901 |
| Investment in Park | | 447,080 |
| | 735,017 |
| | 129,942 |
| | 38,992 |
| | (1,351,031 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 119,201 |
| | 111,218 |
| | — |
| | 239,480 |
| Other Intangibles, net | | — |
| | — |
| | 16,880 |
| | 22,839 |
| | — |
| | 39,719 |
| Deferred Tax Asset | | — |
| | 34,028 |
| | — |
| | 90 |
| | (34,118 | ) | | — |
| Intercompany Receivable | | 874,125 |
| | 1,123,159 |
| | 1,165,828 |
| | — |
| | (3,163,112 | ) | | — |
| Other Assets | | 13,605 |
| | 9,382 |
| | 7,112 |
| | 2,227 |
| | — |
| | 32,326 |
| | | $ | 1,811,234 |
| | $ | 2,032,241 |
| | $ | 1,804,611 |
| | $ | 1,617,127 |
| | $ | (5,184,318 | ) | | $ | 2,080,895 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 155,522 |
| | 208,924 |
| | 7,971 |
| | 285,379 |
| | (623,457 | ) | | 34,339 |
| Deferred revenue | | — |
| | — |
| | 18,719 |
| | 113,646 |
| | — |
| | 132,365 |
| Accrued interest | | 5,189 |
| | 3,563 |
| | 15,192 |
| | — |
| | — |
| | 23,944 |
| Accrued taxes | | 6,534 |
| | 458 |
| | 181 |
| | 2,848 |
| | — |
| | 10,021 |
| Accrued salaries, wages and benefits | | 1 |
| | 18,642 |
| | 2,153 |
| | 9,100 |
| | — |
| | 29,896 |
| Self-insurance reserves | | — |
| | 5,535 |
| | 1,727 |
| | 17,330 |
| | — |
| | 24,592 |
| Other accrued liabilities | | 860 |
| | 4,421 |
| | 715 |
| | 2,793 |
| | — |
| | 8,789 |
| | | 174,406 |
| | 247,843 |
| | 52,958 |
| | 431,096 |
| | (636,057 | ) | | 270,246 |
| Deferred Tax Liability | | — |
| | — |
| | 61,544 |
| | 126,866 |
| | (34,118 | ) | | 154,292 |
| Derivative Liability | | 16,039 |
| | 10,733 |
| | — |
| | — |
| | — |
| | 26,772 |
| Other Liabilities | | — |
| | 5,296 |
| | — |
| | 3,500 |
| | — |
| | 8,796 |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 58,000 |
| | 58,000 |
| | 58,000 |
| | — |
| | (116,000 | ) | | 58,000 |
| Term debt | | 622,125 |
| | 622,125 |
| | 622,125 |
| | — |
| | (1,244,250 | ) | | 622,125 |
| Notes | | 901,431 |
| | 901,431 |
| | 901,431 |
| | — |
| | (1,802,862 | ) | | 901,431 |
| | | 1,581,556 |
| | 1,581,556 |
| | 1,581,556 |
| | — |
| | (3,163,112 | ) | | 1,581,556 |
| | | | | | | | | | | | | | Equity | | 39,233 |
| | 186,813 |
| | 108,553 |
| | 1,055,665 |
| | (1,351,031 | ) | | 39,233 |
| | | $ | 1,811,234 |
| | $ | 2,032,241 |
| | $ | 1,804,611 |
| | $ | 1,617,127 |
| | $ | (5,184,318 | ) | | $ | 2,080,895 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET September 29, 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 | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| Receivables | | 12 |
| | 124,478 |
| | 70,303 |
| | 589,797 |
| | (742,056 | ) | | 42,534 |
| Inventories | | — |
| | 1,578 |
| | 2,090 |
| | 25,648 |
| | — |
| | 29,316 |
| Current deferred tax asset | | — |
| | 3,708 |
| | 816 |
| | 3,661 |
| | — |
| | 8,185 |
| Income tax refundable | | — |
| | — |
| | 662 |
| | — |
| | — |
| | 662 |
| Other current assets | | 995 |
| | 3,558 |
| | 613 |
| | 3,798 |
| | — |
| | 8,964 |
| | | 134,007 |
| | 135,615 |
| | 110,671 |
| | 634,906 |
| | (742,056 | ) | | 273,143 |
| Property and Equipment (net) | | 450,205 |
| | 985 |
| | 248,484 |
| | 815,000 |
| | — |
| | 1,514,674 |
| Investment in Park | | 548,241 |
| | 824,356 |
| | 143,548 |
| | 81,719 |
| | (1,597,864 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 121,657 |
| | 111,218 |
| | — |
| | 241,936 |
| Other Intangibles, net | | — |
| | — |
| | 17,228 |
| | 22,797 |
| | — |
| | 40,025 |
| Deferred Tax Asset | | — |
| | 30,316 |
| | — |
| | 90 |
| | (30,406 | ) | | — |
| Intercompany Receivable | | 877,010 |
| | 1,069,069 |
| | 1,113,983 |
| | — |
| | (3,060,062 | ) | | — |
| Other Assets | | 13,196 |
| | 9,031 |
| | 6,902 |
| | 2,140 |
| | — |
| | 31,269 |
| | | $ | 2,031,720 |
| | $ | 2,069,372 |
| | $ | 1,762,473 |
| | $ | 1,667,870 |
| | $ | (5,430,388 | ) | | $ | 2,101,047 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| Accounts payable | | 281,983 |
| | 159,781 |
| | 7,802 |
| | 314,367 |
| | (742,056 | ) | | 21,877 |
| Deferred revenue | | — |
| | — |
| | 1,951 |
| | 35,676 |
| | — |
| | 37,627 |
| Accrued interest | | 2,677 |
| | 1,593 |
| | 5,983 |
| | — |
| | — |
| | 10,253 |
| Accrued taxes | | 5,413 |
| | 29,386 |
| | — |
| | 4,594 |
| | — |
| | 39,393 |
| Accrued salaries, wages and benefits | | 1 |
| | 27,622 |
| | 2,154 |
| | 9,844 |
| | — |
| | 39,621 |
| Self-insurance reserves | | — |
| | 5,545 |
| | 1,896 |
| | 16,647 |
| | — |
| | 24,088 |
| Other accrued liabilities | | 991 |
| | 4,077 |
| | 694 |
| | 1,856 |
| | — |
| | 7,618 |
| | | 297,365 |
| | 234,304 |
| | 26,780 |
| | 382,984 |
| | (754,656 | ) | | 186,777 |
| Deferred Tax Liability | | — |
| | — |
| | 61,143 |
| | 126,866 |
| | (30,406 | ) | | 157,603 |
| Derivative Liability | | 18,407 |
| | 13,239 |
| | — |
| | — |
| | — |
| | 31,646 |
| Other Liabilities | | — |
| | 5,573 |
| | — |
| | 3,500 |
| | — |
| | 9,073 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 622,125 |
| | 622,125 |
| | 622,125 |
| | — |
| | (1,244,250 | ) | | 622,125 |
| Notes | | 901,606 |
| | 901,606 |
| | 901,606 |
| | — |
| | (1,803,212 | ) | | 901,606 |
| | | 1,523,731 |
| | 1,523,731 |
| | 1,523,731 |
| | — |
| | (3,047,462 | ) | | 1,523,731 |
| | | | | | | | | | | | | | Equity | | 192,217 |
| | 292,525 |
| | 150,819 |
| | 1,154,520 |
| | (1,597,864 | ) | | 192,217 |
| | | $ | 2,031,720 |
| | $ | 2,069,372 |
| | $ | 1,762,473 |
| | $ | 1,667,870 |
| | $ | (5,430,388 | ) | | $ | 2,101,047 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET December 31, 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 | | $ | 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 BALANCE SHEET
July 1, 2012 (As restated)
(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 | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
| Receivables | | — |
| | 71,210 |
| | 64,931 |
| | 436,324 |
| | (529,512 | ) | | 42,953 |
| Inventories | | — |
| | 4,861 |
| | 4,663 |
| | 41,712 |
| | — |
| | 51,236 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| Prepaid advertising | | — |
| | 10,181 |
| | 596 |
| | 5,473 |
| | — |
| | 16,250 |
| Income tax refundable | | — |
| | — |
| | 10,083 |
| | — |
| | — |
| | 10,083 |
| Other current assets | | 800 |
| | 2,971 |
| | 908 |
| | 4,660 |
| | — |
| | 9,339 |
| | | 800 |
| | 95,462 |
| | 95,927 |
| | 518,979 |
| | (535,033 | ) | | 176,135 |
| Property and Equipment (net) | | 465,146 |
| | 1,025 |
| | 272,511 |
| | 882,682 |
| | — |
| | 1,621,364 |
| Investment in Park | | 471,253 |
| | 701,181 |
| | 114,053 |
| | 21,834 |
| | (1,308,321 | ) | | — |
| Intercompany Note Receivable | | — |
| | 86,362 |
| | — |
| | — |
| | (86,362 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 122,960 |
| | 111,218 |
| | — |
| | 243,239 |
| Other Intangibles, net | | — |
| | — |
| | 17,412 |
| | 22,837 |
| | — |
| | 40,249 |
| Deferred Tax Asset | | — |
| | 43,471 |
| | — |
| | — |
| | (43,471 | ) | | — |
| Intercompany Receivable | | 880,971 |
| | 1,186,016 |
| | 1,236,507 |
| | — |
| | (3,303,494 | ) | | — |
| Other Assets | | 24,678 |
| | 16,454 |
| | 9,010 |
| | 2,400 |
| | — |
| | 52,542 |
| | | $ | 1,851,909 |
| | $ | 2,129,971 |
| | $ | 1,868,380 |
| | $ | 1,559,950 |
| | $ | (5,276,681 | ) | | $ | 2,133,529 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 108,234 |
| | $ | 233,508 |
| | $ | 14,320 |
| | $ | 217,263 |
| | $ | (535,033 | ) | | $ | 38,292 |
| Deferred revenue | | — |
| | — |
| | 19,946 |
| | 88,521 |
| | — |
| | 108,467 |
| Accrued interest | | 481 |
| | 195 |
| | 15,353 |
| | — |
| | — |
| | 16,029 |
| Accrued taxes | | 7,083 |
| | 571 |
| | 59 |
| | 3,027 |
| | — |
| | 10,740 |
| Accrued salaries, wages and benefits | | 1 |
| | 26,108 |
| | 2,410 |
| | 9,190 |
| | — |
| | 37,709 |
| Self-insurance reserves | | — |
| | 4,280 |
| | 1,771 |
| | 17,147 |
| | — |
| | 23,198 |
| Other accrued liabilities | | 953 |
| | 4,489 |
| | 935 |
| | 2,275 |
| | — |
| | 8,652 |
| | | 116,752 |
| | 269,151 |
| | 54,794 |
| | 337,423 |
| | (535,033 | ) | | 243,087 |
| Deferred Tax Liability | | — |
| | — |
| | 58,162 |
| | 119,417 |
| | (43,471 | ) | | 134,108 |
| Derivative Liability | | 21,090 |
| | 14,056 |
| | — |
| | — |
| | — |
| | 35,146 |
| Other Liabilities | | — |
| | 3,621 |
| | — |
| | 3,500 |
| | — |
| | 7,121 |
| Intercompany Note Payable | | — |
| | — |
| | — |
| | 86,362 |
| | (86,362 | ) | | — |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 111,000 |
| | 111,000 |
| | 111,000 |
| | — |
| | (222,000 | ) | | 111,000 |
| Term debt | | 1,140,100 |
| | 1,140,100 |
| | 1,140,100 |
| | — |
| | (2,280,200 | ) | | 1,140,100 |
| Notes | | 400,647 |
| | 400,647 |
| | 400,647 |
| | — |
| | (801,294 | ) | | 400,647 |
| | | 1,651,747 |
| | 1,651,747 |
| | 1,651,747 |
| | — |
| | (3,303,494 | ) | | 1,651,747 |
| | | | | | | | | | | | | | Equity | | 62,320 |
| | 191,396 |
| | 103,677 |
| | 1,013,248 |
| | (1,308,321 | ) | | 62,320 |
| | | $ | 1,851,909 |
| | $ | 2,129,971 |
| | $ | 1,868,380 |
| | $ | 1,559,950 |
| | $ | (5,276,681 | ) | | $ | 2,133,529 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)BALANCE SHEET For the Three Months Ended September 30, 2012June 30, 2013 (As restated)
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 43,925 |
| | $ | 85,358 |
| | $ | 34,954 |
| | $ | 326,473 |
| | $ | (129,090 | ) | | $ | 361,620 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 2,994 |
| | 28,059 |
| | — |
| | 31,053 |
| Operating expenses | | 1,408 |
| | 52,246 |
| | 15,586 |
| | 201,134 |
| | (129,090 | ) | | 141,284 |
| Selling, general and administrative | | 1,222 |
| | 26,888 |
| | 3,868 |
| | 13,789 |
| | — |
| | 45,767 |
| Depreciation and amortization | | 12,891 |
| | 9 |
| | 6,818 |
| | 26,314 |
| | — |
| | 46,032 |
| Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | — |
| | 29 |
| | — |
| | 29 |
| | | 15,521 |
| | 79,143 |
| | 29,266 |
| | 269,325 |
| | (129,090 | ) | | 264,165 |
| Operating income | | 28,404 |
| | 6,215 |
| | 5,688 |
| | 57,148 |
| | — |
| | 97,455 |
| Interest expense (income), net | | 10,210 |
| | 7,246 |
| | 9,843 |
| | (1,507 | ) | | — |
| | 25,792 |
| Net effect of swaps | | (1,378 | ) | | (895 | ) | | — |
| | — |
| | — |
| | (2,273 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,886 |
| | — |
| | — |
| | 14,886 |
| Other (income) expense | | 187 |
| | (2,128 | ) | | 583 |
| | 1,358 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | (30,875 | ) | | (15,540 | ) | | (8,232 | ) | | 4,649 |
| | 49,998 |
| | — |
| Net income (loss) before taxes | | 50,260 |
| | 17,532 |
| | (11,392 | ) | | 52,648 |
| | (49,998 | ) | | 59,050 |
| Provision (benefit) for taxes | | 2,870 |
| | 684 |
| | (6,732 | ) | | 14,838 |
| | — |
| | 11,660 |
| Net income (loss) | | $ | 47,390 |
| | $ | 16,848 |
| | $ | (4,660 | ) | | $ | 37,810 |
| | $ | (49,998 | ) | | $ | 47,390 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,592 |
| | — |
| | 1,592 |
| | — |
| | (1,592 | ) | | 1,592 |
| Unrealized income on cash flow hedging derivatives | | 1,679 |
| | 503 |
| | — |
| | — |
| | (503 | ) | | 1,679 |
| Other comprehensive income, (net of tax) | | 3,271 |
| | 503 |
| | 1,592 |
| | — |
| | (2,095 | ) | | 3,271 |
| Total Comprehensive (Income) loss | | $ | 50,661 |
| | $ | 17,351 |
| | $ | (3,068 | ) | | $ | 37,810 |
| | $ | (52,093 | ) | | $ | 50,661 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 856,276 |
| | — |
| | 1,555,999 |
| Investment in Park | | 572,748 |
| | 786,753 |
| | 115,271 |
| | 60,141 |
| | (1,534,913 | ) | | — |
| 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 |
| | | $ | 1,952,057 |
| | $ | 2,032,761 |
| | $ | 1,778,266 |
| | $ | 1,578,075 |
| | $ | (5,259,167 | ) | | $ | 2,081,992 |
| 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 |
| | 119,971 |
| | (39,320 | ) | | 140,113 |
| 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 | | 181,167 |
| | 291,041 |
| | 140,674 |
| | 1,103,198 |
| | (1,534,913 | ) | | 181,167 |
| | | $ | 1,952,057 |
| | $ | 2,032,761 |
| | $ | 1,778,266 |
| | $ | 1,578,075 |
| | $ | (5,259,167 | ) | | $ | 2,081,992 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Three Months Ended July 1,September 29, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 83,285 |
| | $ | 161,866 |
| | $ | 82,265 |
| | $ | 509,467 |
| | $ | (244,807 | ) | | $ | 592,076 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,082 |
| | 39,761 |
| | — |
| | 45,843 |
| Operating expenses | | 1,669 |
| | 76,468 |
| | 19,042 |
| | 318,022 |
| | (244,807 | ) | | 170,394 |
| Selling, general and administrative | | 1,796 |
| | 38,083 |
| | 4,781 |
| | 14,067 |
| | — |
| | 58,727 |
| Depreciation and amortization | | 18,306 |
| | 10 |
| | 8,979 |
| | 30,200 |
| | — |
| | 57,495 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | Loss on impairment / retirement of fixed assets, net | | 368 |
| | — |
| | 1 |
| | 1,268 |
| | — |
| | 1,637 |
| | | 22,139 |
| | 114,561 |
| | 38,885 |
| | 394,575 |
| | (244,807 | ) | | 325,353 |
| Operating income | | 61,146 |
| | 47,305 |
| | 43,380 |
| | 114,892 |
| | — |
| | 266,723 |
| Interest expense (income), net | | 10,858 |
| | 6,901 |
| | 9,731 |
| | (1,978 | ) | | — |
| | 25,512 |
| Net effect of swaps | | 810 |
| | 567 |
| | — |
| | — |
| | — |
| | 1,377 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | (8,615 | ) | | — |
| | — |
| | (8,615 | ) | Other (income) expense | | 188 |
| | (2,129 | ) | | 584 |
| | 1,357 |
| | — |
| | — |
| Income from investment in affiliates | | (146,054 | ) | | (78,714 | ) | | (13,606 | ) | | (40,904 | ) | | 279,278 |
| | — |
| Net income before taxes | | 195,344 |
| | 120,680 |
| | 55,286 |
| | 156,417 |
| | (279,278 | ) | | 248,449 |
| Provision for taxes | | 4,920 |
| | 14,537 |
| | 14,390 |
| | 24,178 |
| | — |
| | 58,025 |
| Net income | | $ | 190,424 |
| | $ | 106,143 |
| | $ | 40,896 |
| | $ | 132,239 |
| | $ | (279,278 | ) | | $ | 190,424 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (699 | ) | | — |
| | (699 | ) | | — |
| | 699 |
| | (699 | ) | Unrealized income (loss) on cash flow hedging derivatives | | (2,761 | ) | | (1,202 | ) | | — |
| | — |
| | 1,202 |
| | (2,761 | ) | Other comprehensive income (loss), (net of tax) | | (3,460 | ) | | (1,202 | ) | | (699 | ) | | — |
| | 1,901 |
| | (3,460 | ) | Total Comprehensive Income | | $ | 186,964 |
| | $ | 104,941 |
| | $ | 40,197 |
| | $ | 132,239 |
| | $ | (277,377 | ) | | $ | 186,964 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 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 | | $ | 43,745 |
| | $ | 77,510 |
| | $ | 41,841 |
| | $ | 315,637 |
| | $ | (121,127 | ) | | $ | 357,606 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 3,541 |
| | 28,945 |
| | — |
| | 32,486 |
| Operating expenses | | 1,438 |
| | 52,584 |
| | 15,935 |
| | 197,406 |
| | (121,127 | ) | | 146,236 |
| Selling, general and administrative | | 1,656 |
| | 24,525 |
| | 4,295 |
| | 14,035 |
| | — |
| | 44,511 |
| Depreciation and amortization | | 13,531 |
| | 9 |
| | 6,985 |
| | 27,384 |
| | — |
| | 47,909 |
| Loss (gain) on impairment / retirement of fixed assets, net | | (861 | ) | | — |
| | (1 | ) | | — |
| | — |
| | (862 | ) | | | 15,764 |
| | 77,118 |
| | 30,755 |
| | 267,770 |
| | (121,127 | ) | | 270,280 |
| Operating income | | 27,981 |
| | 392 |
| | 11,086 |
| | 47,867 |
| | — |
| | 87,326 |
| Interest expense, net | | 13,067 |
| | 8,084 |
| | 10,598 |
| | (1,515 | ) | | — |
| | 30,234 |
| Net effect of swaps | | (104 | ) | | (69 | ) | | — |
| | — |
| | — |
| | (173 | ) | Unrealized / realized foreign currency gain | | — |
| | — |
| | 9,301 |
| | — |
| | — |
| | 9,301 |
| Other (income) expense | | 188 |
| | (2,041 | ) | | 512 |
| | 1,341 |
| | — |
| | — |
| Income from investment in affiliates | | (24,476 | ) | | (16,973 | ) | | (6,955 | ) | | (260 | ) | | 48,664 |
| | — |
| Income (loss) before taxes | | 39,306 |
| | 11,391 |
| | (2,370 | ) | | 48,301 |
| | (48,664 | ) | | 47,964 |
| Provision (benefit) for taxes | | 2,723 |
| | (1,876 | ) | | (1,322 | ) | | 11,856 |
| | — |
| | 11,381 |
| Net income (loss) | | $ | 36,583 |
| | $ | 13,267 |
| | $ | (1,048 | ) | | $ | 36,445 |
| | $ | (48,664 | ) | | $ | 36,583 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 481 |
| | — |
| | 481 |
| | — |
| | (481 | ) | | 481 |
| Unrealized income on cash flow hedging derivatives | | (2,370 | ) | | (775 | ) | | — |
| | — |
| | 775 |
| | (2,370 | ) | Other comprehensive income (loss), (net of tax) | | (1,889 | ) | | (775 | ) | | 481 |
| | — |
| | 294 |
| | (1,889 | ) | Total Comprehensive Income (Loss) | | $ | 34,694 |
| | $ | 12,492 |
| | $ | (567 | ) | | $ | 36,445 |
| | $ | (48,370 | ) | | $ | 34,694 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 31,574 |
| | — |
| | 60,223 |
| Loss on impairment / retirement of fixed assets, net | | 25,000 |
| | — |
| | — |
| | — |
| | — |
| | 25,000 |
| | | 47,430 |
| | 106,828 |
| | 39,435 |
| | 375,775 |
| | (220,588 | ) | | 348,880 |
| Operating income | | 32,233 |
| | 34,306 |
| | 48,899 |
| | 89,127 |
| | — |
| | 204,565 |
| Interest expense, 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 | | (125,636 | ) | | (79,925 | ) | | (11,355 | ) | | (45,354 | ) | | 262,270 |
| | — |
| Income before taxes | | 145,574 |
| | 109,087 |
| | 64,880 |
| | 135,654 |
| | (262,270 | ) | | 192,925 |
| Provision for taxes | | 4,561 |
| | 9,777 |
| | 17,181 |
| | 20,393 |
| | — |
| | 51,912 |
| Net income | | $ | 141,013 |
| | $ | 99,310 |
| | $ | 47,699 |
| | $ | 115,261 |
| | $ | (262,270 | ) | | $ | 141,013 |
| 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 | | $ | 140,216 |
| | $ | 99,358 |
| | $ | 47,136 |
| | $ | 115,261 |
| | $ | (261,755 | ) | | $ | 140,216 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Six Months Ended June 30, 2013
(In thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 48,243 |
| | $ | 93,729 |
| | $ | 35,243 |
| | $ | 367,983 |
| | $ | (141,779 | ) | | $ | 403,419 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 2,994 |
| | 33,096 |
| | — |
| | 36,090 |
| Operating expenses | | 2,831 |
| | 73,852 |
| | 21,527 |
| | 261,510 |
| | (141,779 | ) | | 217,941 |
| Selling, general and administrative | | 2,514 |
| | 43,501 |
| | 4,579 |
| | 16,212 |
| | — |
| | 66,806 |
| Depreciation and amortization | | 13,366 |
| | 18 |
| | 6,818 |
| | 30,616 |
| | — |
| | 50,818 |
| Loss on impairment / retirement of fixed assets, net | | 36 |
| | — |
| | 478 |
| | 115 |
| | — |
| | 629 |
| | | 18,747 |
| | 117,371 |
| | 36,396 |
| | 341,549 |
| | (141,779 | ) | | 372,284 |
| Operating income (loss) | | 29,496 |
| | (23,642 | ) | | (1,153 | ) | | 26,434 |
| | — |
| | 31,135 |
| Interest expense (income), net | | 20,722 |
| | 14,923 |
| | 19,607 |
| | (3,737 | ) | | — |
| | 51,515 |
| Net effect of swaps | | 4,257 |
| | 2,681 |
| | — |
| | — |
| | — |
| | 6,938 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 23,844 |
| | — |
| | — |
| | 23,844 |
| Other (income) expense | | 375 |
| | (4,516 | ) | | 1,383 |
| | 2,758 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | 41,221 |
| | 20,100 |
| | (4,712 | ) | | 25,876 |
| | (82,485 | ) | | — |
| Income (loss) before taxes | | (58,254 | ) | | (69,611 | ) | | (41,892 | ) | | 1,537 |
| | 82,485 |
| | (85,735 | ) | Provision (benefit) for taxes | | 3,482 |
| | (16,981 | ) | | (15,986 | ) | | 5,486 |
| | — |
| | (23,999 | ) | Net income (loss) | | (61,736 | ) | | (52,630 | ) | | (25,906 | ) | | (3,949 | ) | | 82,485 |
| | (61,736 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,893 |
| | — |
| | 1,893 |
| | — |
| | (1,893 | ) | | 1,893 |
| Unrealized income (loss) on cash flow hedging derivatives | | 10,564 |
| | 3,038 |
| | — |
| | — |
| | (3,038 | ) | | 10,564 |
| Other comprehensive income (loss), (net of tax) | | 12,457 |
| | 3,038 |
| | 1,893 |
| | — |
| | (4,931 | ) | | 12,457 |
| Total Comprehensive Income (Loss) | | $ | (49,279 | ) | | $ | (49,592 | ) | | $ | (24,013 | ) | | $ | (3,949 | ) | | $ | 77,554 |
| | $ | (49,279 | ) |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the SixNine Months Ended July 1,September 29, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 131,528 |
| | $ | 255,595 |
| | $ | 117,508 |
| | $ | 877,450 |
| | $ | (386,586 | ) | | $ | 995,495 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,076 |
| | 72,857 |
| | — |
| | 81,933 |
| Operating expenses | | 4,500 |
| | 150,320 |
| | 40,569 |
| | 579,532 |
| | (386,586 | ) | | 388,335 |
| Selling, general and administrative | | 4,310 |
| | 81,584 |
| | 9,360 |
| | 30,279 |
| | — |
| | 125,533 |
| Depreciation and amortization | | 31,672 |
| | 28 |
| | 15,797 |
| | 60,816 |
| | — |
| | 108,313 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | Loss on impairment / retirement of fixed assets, net | | 404 |
| | — |
| | 479 |
| | 1,383 |
| | — |
| | 2,266 |
| | | 40,886 |
| | 231,932 |
| | 75,281 |
| | 736,124 |
| | (386,586 | ) | | 697,637 |
| Operating income | | 90,642 |
| | 23,663 |
| | 42,227 |
| | 141,326 |
| | — |
| | 297,858 |
| Interest expense (income), net | | 31,580 |
| | 21,824 |
| | 29,338 |
| | (5,715 | ) | | — |
| | 77,027 |
| Net effect of swaps | | 5,067 |
| | 3,248 |
| | — |
| | — |
| | — |
| | 8,315 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 15,229 |
| | — |
| | — |
| | 15,229 |
| Other (income) expense | | 563 |
| | (6,645 | ) | | 1,967 |
| | 4,115 |
| | — |
| | — |
| Income from investment in affiliates | | (104,833 | ) | | (58,614 | ) | | (18,318 | ) | | (15,029 | ) | | 196,794 |
| | — |
| Income before taxes | | 137,090 |
| | 51,069 |
| | 13,394 |
| | 157,955 |
| | (196,794 | ) | | 162,714 |
| Provision (benefit) for taxes | | 8,402 |
| | (2,444 | ) | | (1,596 | ) | | 29,664 |
| | — |
| | 34,026 |
| Net income | | $ | 128,688 |
| | $ | 53,513 |
| | $ | 14,990 |
| | $ | 128,291 |
| | $ | (196,794 | ) | | $ | 128,688 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,194 |
| | — |
| | 1,194 |
| | — |
| | (1,194 | ) | | 1,194 |
| Unrealized income on cash flow hedging derivatives | | 7,803 |
| | 1,836 |
| | — |
| | — |
| | (1,836 | ) | | 7,803 |
| Other comprehensive income, (net of tax) | | 8,997 |
| | 1,836 |
| | 1,194 |
| | — |
| | (3,030 | ) | | 8,997 |
| Total Comprehensive Income | | $ | 137,685 |
| | $ | 55,349 |
| | $ | 16,184 |
| | $ | 128,291 |
| | $ | (199,824 | ) | | $ | 137,685 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Nine Months Ended September 30, 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 | | $ | 45,201 |
| | $ | 80,087 |
| | $ | 42,107 |
| | $ | 343,569 |
| | $ | (125,160 | ) | | $ | 385,804 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 3,541 |
| | 33,032 |
| | — |
| | 36,573 |
| Operating expenses | | 2,773 |
| | 73,020 |
| | 21,592 |
| | 245,296 |
| | (125,160 | ) | | 217,521 |
| Selling, general and administrative | | 2,988 |
| | 38,221 |
| | 5,055 |
| | 16,231 |
| | — |
| | 62,495 |
| Depreciation and amortization | | 14,227 |
| | 18 |
| | 6,985 |
| | 30,758 |
| | — |
| | 51,988 |
| Loss (gain) on impairment / retirement of fixed assets, net | | (779 | ) | | — |
| | 9 |
| | — |
| | — |
| | (770 | ) | | | 19,209 |
| | 111,259 |
| | 37,182 |
| | 325,317 |
| | (125,160 | ) | | 367,807 |
| Operating income (loss) | | 25,992 |
| | (31,172 | ) | | 4,925 |
| | 18,252 |
| | — |
| | 17,997 |
| Interest expense, net | | 24,225 |
| | 14,699 |
| | 21,001 |
| | (2,904 | ) | | — |
| | 57,021 |
| Net effect of swaps | | 69 |
| | 263 |
| | (1,475 | ) | | — |
| | — |
| | (1,143 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 1,109 |
| | — |
| | — |
| | 1,109 |
| Other (income) expense | | 375 |
| | (5,076 | ) | | 709 |
| | 3,992 |
| | — |
| | — |
| (Income) loss from investment in affiliates | | 26,015 |
| | 6,477 |
| | (3,541 | ) | | 6,803 |
| | (35,754 | ) | | — |
| Income (loss) before taxes | | (24,692 | ) | | (47,535 | ) | | (12,878 | ) | | 10,361 |
| | 35,754 |
| | (38,990 | ) | Provision (benefit) for taxes | | 4,140 |
| | (13,548 | ) | | (3,656 | ) | | 2,906 |
| | — |
| | (10,158 | ) | Net income (loss) | | $ | (28,832 | ) | | $ | (33,987 | ) | | $ | (9,222 | ) | | $ | 7,455 |
| | $ | 35,754 |
| | $ | (28,832 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (688 | ) | | — |
| | (688 | ) | | — |
| | 688 |
| | (688 | ) | Unrealized income on cash flow hedging derivatives | | (2,031 | ) | | (677 | ) | | 21 |
| | — |
| | 656 |
| | (2,031 | ) | Other comprehensive income (loss), (net of tax) | | (2,719 | ) | | (677 | ) | | (667 | ) | | — |
| | 1,344 |
| | (2,719 | ) | Total Comprehensive Income (loss) | | $ | (31,551 | ) | | $ | (34,664 | ) | | $ | (9,889 | ) | | $ | 7,455 |
| | $ | 37,098 |
| | $ | (31,551 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 62,332 |
| | — |
| | 112,211 |
| Loss on impairment / retirement of fixed assets, net | | 24,221 |
| | — |
| | 9 |
| | — |
| | — |
| | 24,230 |
| | | 66,639 |
| | 218,087 |
| | 76,617 |
| | 701,092 |
| | (345,748 | ) | | 716,687 |
| Operating income | | 58,225 |
| | 3,134 |
| | 53,824 |
| | 107,379 |
| | — |
| | 222,562 |
| Interest expense, 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 | | (99,621 | ) | | (73,448 | ) | | (14,896 | ) | | (38,551 | ) | | 226,516 |
| | — |
| Income before taxes | | 120,882 |
| | 61,552 |
| | 52,002 |
| | 146,015 |
| | (226,516 | ) | | 153,935 |
| Provision (benefit) for taxes | | 8,701 |
| | (3,771 | ) | | 13,525 |
| | 23,299 |
| | — |
| | 41,754 |
| Net income | | $ | 112,181 |
| | $ | 65,323 |
| | $ | 38,477 |
| | $ | 122,716 |
| | $ | (226,516 | ) | | $ | 112,181 |
| 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 | | $ | 109,132 |
| | $ | 64,694 |
| | $ | 37,247 |
| | $ | 122,716 |
| | $ | (224,657 | ) | | $ | 109,132 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Twelve Months Ended June 30,September 29, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 148,757 |
| | $ | 271,778 |
| | $ | 133,554 |
| | $ | 952,082 |
| | $ | (420,102 | ) | | $ | 1,086,069 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,769 |
| | 84,796 |
| | — |
| | 94,565 |
| Operating expenses | | 5,438 |
| | 177,188 |
| | 47,798 |
| | 641,501 |
| | (420,102 | ) | | 451,823 |
| Selling, general and administrative | | 6,021 |
| | 91,895 |
| | 10,659 |
| | 34,047 |
| | — |
| | 142,622 |
| Depreciation and amortization | | 36,799 |
| | 40 |
| | 18,032 |
| | 70,265 |
| | — |
| | 125,136 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (6,625 | ) | Loss on impairment / retirement of fixed assets, net | | 25,950 |
| | — |
| | 475 |
| | 5,310 |
| | — |
| | 31,735 |
| | | 74,208 |
| | 269,123 |
| | 86,733 |
| | 829,294 |
| | (420,102 | ) | | 839,256 |
| Operating income | | 74,549 |
| | 2,655 |
| | 46,821 |
| | 122,788 |
| | — |
| | 246,813 |
| Interest (income) expense, net | | 45,022 |
| | 29,552 |
| | 39,476 |
| | (9,005 | ) | | — |
| | 105,045 |
| Net effect of swaps | | 4,050 |
| | 2,539 |
| | — |
| | — |
| | — |
| | 6,589 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 13,737 |
| | — |
| | — |
| | 13,737 |
| Other (income) expense | | 749 |
| | (8,947 | ) | | 2,694 |
| | 5,504 |
| | — |
| | — |
| Income from investment in affiliates | | (74,816 | ) | | (52,527 | ) | | (15,768 | ) | | (12,687 | ) | | 155,798 |
| | — |
| Income before taxes | | 78,369 |
| | 19,257 |
| | 6,065 |
| | 138,976 |
| | (155,798 | ) | | 86,869 |
| Provision (benefit) for taxes | | 9,417 |
| | (13,289 | ) | | (8,917 | ) | | 30,706 |
| | — |
| | 17,917 |
| Net income | | $ | 68,952 |
| | $ | 32,546 |
| | $ | 14,982 |
| | $ | 108,270 |
| | $ | (155,798 | ) | | $ | 68,952 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,950 |
| | — |
| | 2,950 |
| | — |
| | (2,950 | ) | | 2,950 |
| Unrealized income on cash flow hedging derivatives | | 12,735 |
| | 3,635 |
| | — |
| | — |
| | (3,635 | ) | | 12,735 |
| Other comprehensive income, (net of tax) | | 15,685 |
| | 3,635 |
| | 2,950 |
| | — |
| | (6,585 | ) | | 15,685 |
| Total Comprehensive Income | | $ | 84,637 |
| | $ | 36,181 |
| | $ | 17,932 |
| | $ | 108,270 |
| | $ | (162,383 | ) | | $ | 84,637 |
|
CEDAR FAIR, L.P.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Twelve Months Ended July 1, 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 | | $ | 150,783 |
| | $ | 267,882 |
| | $ | 138,595 |
| | $ | 963,915 |
| | $ | (418,258 | ) | | $ | 1,102,917 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,743 |
| | 86,664 |
| | — |
| | 97,407 |
| Operating expenses | | 5,341 |
| | 175,593 |
| | 47,795 |
| | 647,795 |
| | (418,258 | ) | | 458,266 |
| Selling, general and administrative | | 6,309 |
| | 88,725 |
| | 11,892 |
| | 37,847 |
| | — |
| | 144,773 |
| Depreciation and amortization | | 38,843 |
| | 42 |
| | 17,976 |
| | 73,555 |
| | — |
| | 130,416 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 15 |
| | — |
| | (52 | ) | | 10,426 |
| | — |
| | 10,389 |
| | | 50,508 |
| | 264,360 |
| | 88,354 |
| | 856,287 |
| | (418,258 | ) | | 841,251 |
| Operating income | | 100,275 |
| | 3,522 |
| | 50,241 |
| | 107,628 |
| | — |
| | 261,666 |
| Interest expense, net | | 61,742 |
| | 24,419 |
| | 48,119 |
| | (3,440 | ) | | — |
| | 130,840 |
| Net effect of swaps | | (9,027 | ) | | (121 | ) | | (5,569 | ) | | — |
| | — |
| | (14,717 | ) | Unrealized / realized foreign currency loss | | — |
| | — |
| | 14,863 |
| | — |
| | — |
| | 14,863 |
| Other (income) expense | | 533 |
| | (9,873 | ) | | 1,602 |
| | 7,520 |
| | — |
| | (218 | ) | (Income) loss from investment in affiliates | | (80,137 | ) | | (28,421 | ) | | (6,557 | ) | | 6,067 |
| | 109,048 |
| | — |
| Income (loss) before taxes | | 127,164 |
| | 17,518 |
| | (2,217 | ) | | 97,481 |
| | (109,048 | ) | | 130,898 |
| Provision (benefit) for taxes | | 10,056 |
| | (26,630 | ) | | 7,042 |
| | 23,322 |
| | — |
| | 13,790 |
| Net income (loss) | | $ | 117,108 |
| | $ | 44,148 |
| | $ | (9,259 | ) | | $ | 74,159 |
| | $ | (109,048 | ) | | $ | 117,108 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 733 |
| | — |
| | 733 |
| | — |
| | (733 | ) | | 733 |
| Unrealized income (loss) on cash flow hedging derivatives | | (3,854 | ) | | (4,884 | ) | | 21 |
| | — |
| | 4,863 |
| | (3,854 | ) | Other comprehensive income (loss), (net of tax) | | (3,121 | ) | | (4,884 | ) | | 754 |
| | — |
| | 4,130 |
| | (3,121 | ) | Total Comprehensive Income (Loss) | | $ | 113,987 |
| | $ | 39,264 |
| | $ | (8,505 | ) | | $ | 74,159 |
| | $ | (104,918 | ) | | $ | 113,987 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 152,379 |
| | $ | 292,510 |
| | $ | 127,485 |
| | $ | 996,647 |
| | $ | (444,321 | ) | | $ | 1,124,700 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,404 |
| | 83,651 |
| | — |
| | 93,055 |
| Operating expenses | | 5,739 |
| | 179,465 |
| | 48,104 |
| | 669,919 |
| | (444,321 | ) | | 458,906 |
| Selling, general and administrative | | 5,964 |
| | 97,351 |
| | 10,618 |
| | 34,423 |
| | — |
| | 148,356 |
| Depreciation and amortization | | 35,896 |
| | 40 |
| | 17,581 |
| | 68,891 |
| | — |
| | 122,408 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (15,368 | ) | | — |
| | (15,368 | ) | Loss on impairment / retirement of fixed assets, net | | 1,318 |
| | — |
| | 476 |
| | 6,578 |
| | — |
| | 8,372 |
| | | 48,917 |
| | 276,856 |
| | 86,183 |
| | 848,094 |
| | (444,321 | ) | | 815,729 |
| Operating income | | 103,462 |
| | 15,654 |
| | 41,302 |
| | 148,553 |
| | — |
| | 308,971 |
| Interest (income) expense, net | | 43,667 |
| | 29,195 |
| | 39,310 |
| | (8,465 | ) | | — |
| | 103,707 |
| Net effect of swaps | | 4,964 |
| | 3,177 |
| | — |
| | — |
| | — |
| | 8,141 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 20,157 |
| | — |
| | — |
| | 20,157 |
| Other (income) expense | | 751 |
| | (9,033 | ) | | 2,766 |
| | 5,516 |
| | — |
| | — |
| Income from investment in affiliates | | (95,234 | ) | | (51,316 | ) | | (18,019 | ) | | (8,239 | ) | | 172,808 |
| | — |
| Income (loss) before taxes | | 128,139 |
| | 30,850 |
| | (3,529 | ) | | 159,741 |
| | (172,808 | ) | | 142,393 |
| Provision (benefit) for taxes | | 9,776 |
| | (8,530 | ) | | (11,708 | ) | | 34,492 |
| | — |
| | 24,030 |
| Net income | | $ | 118,363 |
| | $ | 39,380 |
| | $ | 8,179 |
| | $ | 125,249 |
| | $ | (172,808 | ) | | $ | 118,363 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,814 |
| | — |
| | 2,814 |
| | — |
| | (2,814 | ) | | 2,814 |
| Unrealized income on cash flow hedging derivatives | | 9,740 |
| | 2,385 |
| | — |
| | — |
| | (2,385 | ) | | 9,740 |
| Other comprehensive income, (net of tax) | | 12,554 |
| | 2,385 |
| | 2,814 |
| | — |
| | (5,199 | ) | | 12,554 |
| Total Comprehensive Income | | $ | 130,917 |
| | $ | 41,765 |
| | $ | 10,993 |
| | $ | 125,249 |
| | $ | (178,007 | ) | | $ | 130,917 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWSOPERATIONS AND COMPREHENSIVE INCOME For the SixTwelve Months Ended JuneSeptember 30, 20132012 (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 | | $ | 4,808 |
| | $ | (30,371 | ) | | $ | (4,856 | ) | | $ | 44,138 |
| | $ | 68,837 |
| | $ | 82,556 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 38,056 |
| | 37,167 |
| | (18,274 | ) | | 17,909 |
| | (74,858 | ) | | — |
| Capital expenditures | | (38,398 | ) | | — |
| | (3,435 | ) | | (37,356 | ) | | — |
| | (79,189 | ) | Net cash from (for) investing activities | | (342 | ) | | 37,167 |
| | (21,709 | ) | | (19,447 | ) | | (74,858 | ) | | (79,189 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 58,000 |
| | — |
| | — |
| | — |
| | — |
| | 58,000 |
| Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,312 | ) | | (8,014 | ) | | (438 | ) | | — |
| | — |
| | (22,764 | ) | Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Distributions (paid) received | | (71,350 | ) | | 1,711 |
| | — |
| | — |
| | — |
| | (69,639 | ) | Exercise of limited partnership unit options | | — |
| | 28 |
| | — |
| | — |
| | — |
| | 28 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (130 | ) | | — |
| | — |
| | — |
| | (130 | ) | Net cash from (for) financing activities | | (29,466 | ) | | (7,240 | ) | | (474 | ) | | — |
| | — |
| | (37,180 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (1,389 | ) | | — |
| | — |
| | (1,389 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (25,000 | ) | | (444 | ) | | (28,428 | ) | | 24,691 |
| | (6,021 | ) | | (35,202 | ) | Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | 71,152 |
| | — |
| | 127,191 |
| Loss (gain) on impairment / retirement of fixed assets, net | | 24,188 |
| | — |
| | (62 | ) | | 10,383 |
| | — |
| | 34,509 |
| | | 74,203 |
| | 271,598 |
| | 87,553 |
| | 839,493 |
| | (409,232 | ) | | 863,615 |
| Operating income (loss) | | 73,530 |
| | (9,720 | ) | | 54,697 |
| | 101,972 |
| | — |
| | 220,479 |
| Interest 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 | | (88,216 | ) | | (50,693 | ) | | (9,456 | ) | | (21,713 | ) | | 170,078 |
| | — |
| Income before taxes | | 116,009 |
| | 22,587 |
| | 42,703 |
| | 122,540 |
| | (170,078 | ) | | 133,761 |
| Provision (benefit) for taxes | | 10,106 |
| | (29,298 | ) | | 20,942 |
| | 26,108 |
| | — |
| | 27,858 |
| Net income | | $ | 105,903 |
| | $ | 51,885 |
| | $ | 21,761 |
| | $ | 96,432 |
| | $ | (170,078 | ) | | $ | 105,903 |
| 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 | | $ | 102,834 |
| | $ | 51,776 |
| | $ | 19,110 |
| | $ | 96,432 |
| | $ | (167,318 | ) | | $ | 102,834 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the SixNine Months Ended July 1, 2012 (As restated)September 29, 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 | | $ | (75,559 | ) | | $ | 47,309 |
| | $ | (12,724 | ) | | $ | 44,638 |
| | $ | 60,941 |
| | $ | 64,605 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 41,361 |
| | 11,532 |
| | (415 | ) | | 13,984 |
| | (66,462 | ) | | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (24,266 | ) | | — |
| | (13,478 | ) | | (27,136 | ) | | — |
| | (64,880 | ) | Net cash from (for) investing activities | | 18,268 |
| | 11,532 |
| | (13,893 | ) | | (13,152 | ) | | (66,462 | ) | | (63,707 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 111,000 |
| | — |
| | — |
| | — |
| | — |
| | 111,000 |
| Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Term debt payments, including early termination penalties | | (9,259 | ) | | (6,536 | ) | | (205 | ) | | — |
| | — |
| | (16,000 | ) | Intercompany (payments) receipts | | — |
| | 7,482 |
| | — |
| | (7,482 | ) | | — |
| | — |
| Distributions (paid) received | | (44,450 | ) | | 92 |
| | — |
| | — |
| | — |
| | (44,358 | ) | Capital (contribution) infusion | | — |
| | (60,000 | ) | — |
| 60,000 |
| | — |
| | — |
| | — |
| Exercise of limited partnership unit options | | — |
| | 47 |
| | — |
| | — |
| | — |
| | 47 |
| Excess tax benefit from unit-based compensation | | — |
| | (438 | ) | | — |
| | — |
| | — |
| | (438 | ) | Net cash from (for) financing activities | | 57,291 |
| | (59,353 | ) | | 9,345 |
| | (7,482 | ) | | — |
| | (199 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (294 | ) | | — |
| | — |
| | (294 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (512 | ) | | (17,566 | ) | | 24,004 |
| | (5,521 | ) | | 405 |
| Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 337,821 |
| | $ | 60,434 |
| | $ | 21,615 |
| | $ | 66,757 |
| | $ | (169,672 | ) | | $ | 316,955 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (63,105 | ) | | (52,172 | ) | | (29,579 | ) | | (24,816 | ) | | 169,672 |
| | — |
| Sale of other assets | | — |
| | — |
| | — |
| | 15,297 |
| | — |
| | 15,297 |
| Capital expenditures | | (43,568 | ) | | — |
| | (5,517 | ) | | (48,449 | ) | | — |
| | (97,534 | ) | Net cash from investing activities | | (106,673 | ) | | (52,172 | ) | | (35,096 | ) | | (57,968 | ) | | 169,672 |
| | (82,237 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,331 | ) | | (8,028 | ) | | (453 | ) | | — |
| | — |
| | (22,812 | ) | Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Distributions (paid) received | | (107,013 | ) | | 2,555 |
| | — |
| | — |
| | — |
| | (104,458 | ) | Exercise of limited partnership unit options | | — |
| | 43 |
| | — |
| | — |
| | — |
| | 43 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (148 | ) | | — |
| | — |
| | — |
| | (148 | ) | Net cash (for) financing activities | | (123,148 | ) | | (6,413 | ) | | (489 | ) | | — |
| | — |
| | (130,050 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (16 | ) | | — |
| | — |
| | (16 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | 108,000 |
| | 1,849 |
| | (13,986 | ) | | 8,789 |
| | — |
| | 104,652 |
| Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the TwelveNine Months Ended JuneSeptember 30, 20132012 (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 | | $ | 210,085 |
| | $ | (47,009 | ) | | $ | 29,440 |
| | $ | 140,865 |
| | $ | (30,675 | ) | | $ | 302,706 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 27,874 |
| | (30,140 | ) | | (15,735 | ) | | (12,174 | ) | | 30,175 |
| | — |
| Sale of other assets | | — |
| | — |
| | — |
| | 14,885 |
| | — |
| | 14,885 |
| Capital expenditures | | (47,797 | ) | | (8 | ) | | (4,404 | ) | | (56,786 | ) | | — |
| | (108,995 | ) | Net cash for investing activities | | (19,923 | ) | | (30,148 | ) | | (20,139 | ) | | (54,075 | ) | | 30,175 |
| | (94,110 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | (53,000 | ) | | — |
| | — |
| | — |
| | — |
| | (53,000 | ) | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Intercompany term debt (payments) receipts | | — |
| | 86,362 |
| | — |
| | (86,362 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (660,931 | ) | | (466,114 | ) | | (14,630 | ) | | — |
| | — |
| | (1,141,675 | ) | Distributions (paid) received | | (115,839 | ) | | 1,746 |
| | — |
| | — |
| | — |
| | (114,093 | ) | Exercise of limited partnership unit options | | — |
| | 57 |
| | — |
| | — |
| | — |
| | 57 |
| Payment of debt issuance costs | | (14,311 | ) | | (8,014 | ) | | (433 | ) | | — |
| | — |
| | (22,758 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | 1,517 |
| | — |
| | — |
| | — |
| | 1,517 |
| Net cash from (for) financing activities | | (190,162 | ) | | 77,157 |
| | (585 | ) | | (86,362 | ) | | — |
| | (199,952 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (945 | ) | | — |
| | — |
| | (945 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase for the period | | — |
| | — |
| | 7,771 |
| | 428 |
| | (500 | ) | | 7,699 |
| Balance, beginning of period | | — |
| | — |
| | 13,974 |
| | 27,476 |
| | (5,521 | ) | | 35,929 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 21,745 |
| | $ | 27,904 |
| | $ | (6,021 | ) | | $ | 43,628 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 209,022 |
| | $ | 49,092 |
| | $ | 9,484 |
| | $ | 156,240 |
| | $ | (147,094 | ) | | $ | 276,744 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (56,757 | ) | | (70,669 | ) | | 3,557 |
| | (23,225 | ) | | 147,094 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (29,295 | ) | | (8 | ) | | (14,426 | ) | | (32,081 | ) | | — |
| | (75,810 | ) | Net cash (for) investing activities | | (84,879 | ) | | (70,677 | ) | | (10,869 | ) | | (55,306 | ) | | 147,094 |
| | (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 | | — |
| | (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. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended July 1, 2012 (As restated)September 29, 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 | | $ | 146,874 |
| | $ | (73,709 | ) | | $ | 24,332 |
| | $ | 223,401 |
| | $ | (63,983 | ) | | $ | 256,915 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (31,801 | ) | | (37,181 | ) | | (579 | ) | | 11,099 |
| | 58,462 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (36,852 | ) | | — |
| | (25,832 | ) | | (40,701 | ) | | — |
| | (103,385 | ) | Net cash from (for) investing activities | | (67,480 | ) | | (37,181 | ) | | (26,411 | ) | | (29,602 | ) | | 58,462 |
| | (102,212 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings (payments) on revolving credit loans | | 26,000 |
| | — |
| | — |
| | — |
| | — |
| | 26,000 |
| Intercompany term debt (payments) receipts | | — |
| | 183,138 |
| | — |
| | (183,138 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (21,383 | ) | | (15,094 | ) | | (473 | ) | | — |
| | — |
| | (36,950 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (90,011 | ) | | 269 |
| | — |
| | — |
| | — |
| | (89,742 | ) | 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 | | — |
| | (438 | ) | | — |
| | — |
| | — |
| | (438 | ) | Net cash from (for) financing activities | | (85,394 | ) | | 107,928 |
| | 8,354 |
| | (183,138 | ) | | — |
| | (152,250 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (2,203 | ) | | — |
| | — |
| | (2,203 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (6,000 | ) | | (2,962 | ) | | 4,072 |
| | 10,661 |
| | (5,521 | ) | | 250 |
| Balance, beginning of period | | 6,000 |
| | 2,962 |
| | 9,902 |
| | 16,815 |
| | — |
| | 35,679 |
| Balance, end of period | | $ | — |
| | $ | — |
| | $ | 13,974 |
| | $ | 27,476 |
| | $ | (5,521 | ) | | $ | 35,929 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 258,843 |
| | $ | 42,367 |
| | $ | 32,927 |
| | $ | 52,457 |
| | $ | (61,746 | ) | | $ | 324,848 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 24,507 |
| | (37,602 | ) | | (30,743 | ) | | (17,908 | ) | | 61,746 |
| | — |
| Sale of other assets | | — |
| | — |
| | — |
| | 30,182 |
| | — |
| | 30,182 |
| Capital expenditures | | (47,938 | ) | | (1 | ) | | (5,532 | ) | | (63,290 | ) | | — |
| | (116,761 | ) | Net cash (for) investing activities | | (23,431 | ) | | (37,603 | ) | | (36,275 | ) | | (51,016 | ) | | 61,746 |
| | (86,579 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | Distributions (paid) received | | (129,277 | ) | | 2,571 |
| | — |
| | — |
| | — |
| | (126,706 | ) | Exercise of limited partnership unit options | | — |
| | 43 |
| | — |
| | — |
| | — |
| | 43 |
| Payment of debt issuance costs | | (14,331 | ) | | (8,028 | ) | | (453 | ) | | — |
| | — |
| | (22,812 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | 1,515 |
| | — |
| | — |
| | — |
| | 1,515 |
| Net cash (for) financing activities | | (145,412 | ) | | (4,734 | ) | | (489 | ) | | — |
| | — |
| | (150,635 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (254 | ) | | — |
| | — |
| | (254 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | 90,000 |
| | 30 |
| | (4,091 | ) | | 1,441 |
| | — |
| | 87,380 |
| Balance, beginning of period | | 43,000 |
| | 2,263 |
| | 40,278 |
| | 10,561 |
| | — |
| | 96,102 |
| Balance, end of period | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 30, 2012 (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 | | $ | 181,718 |
| | $ | (157,023 | ) | | $ | 8,795 |
| | $ | 314,835 |
| | $ | (75,771 | ) | | $ | 272,554 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (35,830 | ) | | (42,342 | ) | | 8,488 |
| | (6,087 | ) | | 75,771 |
| | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| Capital expenditures | | (33,025 | ) | | (8 | ) | | (23,050 | ) | | (37,037 | ) | | — |
| | (93,120 | ) | Net cash (for) investing activities | | (67,682 | ) | | (42,350 | ) | | (14,562 | ) | | (43,124 | ) | | 75,771 |
| | (91,947 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Intercompany term debt (payments) receipts | | — |
| | 269,500 |
| | — |
| | (269,500 | ) | | — |
| | — |
| Term debt payments, including early termination penalties | | (14,467 | ) | | (10,213 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | Distributions (paid) received | | (105,569 | ) | | 261 |
| | — |
| | — |
| | — |
| | (105,308 | ) | 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 | | — |
| | (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 |
|
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 overseen by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including allocating resources on a property-by-property basis.
Aside fromAlong with 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 Executive Vice President - Operations, and the park general managers.
Critical Accounting Policies: 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 secondthird quarter of 2013, there were no changes in the above critical accounting policies previously disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2012 except as noted below. Change in Depreciation Method Effective January 1, 2013, the Partnershipwe changed itsour 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 Partnershipwe 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 Partnershipwe 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 believesWe believe 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 June 30,September 29, 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 2013 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-, six-nine- and twelve-month periods ended June 30,September 29, 2013 and July 1,September 30, 2012. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Six months ended | | Twelve months ended | | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | | 6/30/2013 | | 7/1/2012 | | | (13 weeks) | | (14 weeks) | | (26 weeks) | | (26 weeks) | | (52 weeks) | | (53 weeks) | | | | | (As restated) | | | | (As restated) | | | | (As restated) | | | (In thousands) | Net income (loss) | | $ | 47,390 |
| | $ | 36,583 |
| | $ | (61,736 | ) | | $ | (28,832 | ) | | $ | 68,952 |
| | $ | 117,108 |
| Interest expense | | 25,861 |
| | 30,236 |
| | 51,624 |
| | 57,039 |
| | 105,204 |
| | 130,927 |
| Interest income | | (69 | ) | | (2 | ) | | (109 | ) | | (18 | ) | | (159 | ) | | (87 | ) | Provision (benefit) for taxes | | 11,660 |
| | 11,381 |
| | (23,999 | ) | | (10,158 | ) | | 17,917 |
| | 13,790 |
| Depreciation and amortization | | 46,032 |
| | 47,909 |
| | 50,818 |
| | 51,988 |
| | 125,136 |
| | 130,416 |
| EBITDA | | 130,874 |
| | 126,107 |
| | 16,598 |
| | 70,019 |
| | 317,050 |
| | 392,154 |
| Loss on early extinguishment of debt | | — |
| | — |
| | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | (2,273 | ) | | (173 | ) | | 6,938 |
| | (1,143 | ) | | 6,589 |
| | (14,717 | ) | Unrealized foreign currency loss | | 14,875 |
| | 8,878 |
| | 23,756 |
| | 629 |
| | 13,946 |
| | 14,549 |
| Non-cash equity expense | | 869 |
| | 568 |
| | 3,802 |
| | 2,268 |
| | 4,799 |
| | 2,257 |
| Loss (gain) on impairment/retirement of fixed assets, net | | 29 |
| | (862 | ) | | 629 |
| | (770 | ) | | 31,735 |
| | 10,389 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | — |
| | — |
| | 150 |
| Refinancing costs | | — |
| | — |
| | — |
| | — |
| | — |
| | (195 | ) | Other non-recurring items (as defined) | | (297 | ) | | 444 |
| | 508 |
| | 2,165 |
| | 2,523 |
| | 6,420 |
| Adjusted EBITDA (1) | | $ | 144,077 |
| | $ | 134,962 |
| | $ | 86,804 |
| | $ | 73,168 |
| | $ | 404,590 |
| | $ | 411,007 |
| | | | | | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended | | Nine months ended | | Twelve months ended | | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | | | (13 weeks) | | (13 weeks) | | (39 weeks) | | (39 weeks) | | (52 weeks) | | (53 weeks) | | | | | (As restated) | | | | (As restated) | | | | (As restated) | | | (In thousands) | Net income | | $ | 190,424 |
| | $ | 141,013 |
| | $ | 128,688 |
| | $ | 112,181 |
| | $ | 118,363 |
| | $ | 105,903 |
| Interest expense | | 25,529 |
| | 26,863 |
| | 77,153 |
| | 83,902 |
| | 103,870 |
| | 116,437 |
| Interest income | | (17 | ) | | (13 | ) | | (126 | ) | | (31 | ) | | (163 | ) | | (68 | ) | Provision for taxes | | 58,025 |
| | 51,912 |
| | 34,026 |
| | 41,754 |
| | 24,030 |
| | 27,858 |
| Depreciation and amortization | | 57,495 |
| | 60,223 |
| | 108,313 |
| | 112,211 |
| | 122,408 |
| | 127,191 |
| EBITDA | | 331,456 |
| | 279,998 |
| | 348,054 |
| | 350,017 |
| | 368,508 |
| | 377,321 |
| Loss on early extinguishment of debt | | — |
| | — |
| | 34,573 |
| | — |
| | 34,573 |
| | — |
| Net effect of swaps | | 1,377 |
| | (175 | ) | | 8,315 |
| | (1,318 | ) | | 8,141 |
| | (10,930 | ) | Unrealized foreign currency (gain) loss | | (8,385 | ) | | (14,737 | ) | | 15,371 |
| | (14,108 | ) | | 20,298 |
| | (17,502 | ) | Non-cash equity expense | | 843 |
| | 362 |
| | 4,645 |
| | 2,630 |
| | 5,280 |
| | 2,619 |
| Loss on impairment/retirement of fixed assets, net | | 1,637 |
| | 25,000 |
| | 2,266 |
| | 24,230 |
| | 8,372 |
| | 34,509 |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | — |
| | (15,368 | ) | | — |
| Terminated merger costs | | — |
| | — |
| | — |
| | — |
| | — |
| | 150 |
| Other non-recurring items (as defined) | | 197 |
| | 1,861 |
| | 705 |
| | 4,026 |
| | 859 |
| | 7,445 |
| Adjusted EBITDA (1) | | $ | 318,382 |
| | $ | 292,309 |
| | $ | 405,186 |
| | $ | 365,477 |
| | $ | 430,663 |
| | $ | 393,612 |
| | | | | | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | | | | | |
Results of Operations:
Restatement -
We have made the followinga correction relating to our use of the composite depreciation method.
This The correction, which impacts the Balance Sheet at July 1,September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three, six,three-, nine-, and 12 monthtwelve-month periods ended July 1,September 30, 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'sour initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was reviewed in connection with respondinga response to an SEC comment letter. We ultimately concluded that such disposition was unusual and that an $8.8 million charge should have been reflected in the 2011 financial statements.
SixNine months ended June 30,September 29, 2013
The fiscal six-monthnine-month period ended June 30,September 29, 2013, consisted of a 26-week39-week period and included a total of 9171,936 operating days compared with 2639 weeks and 1,0012,178 operating days for the fiscal six-monthnine-month period ended July 1,September 30, 2012. The difference in operating days is primarily due to the sale of atwo non-core water park in the fourth quarter of 2012,parks, as well as the combiningcombination of two parks, Worlds of Fun and Oceans of Fun, into one gate for 2013.
The following table presents key financial information for the sixnine months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | Six months ended | | Six months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | | (26 weeks) | | (26 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 403,419 |
| | $ | 385,804 |
| | $ | 17,615 |
| | 4.6 | % | Operating costs and expenses | | 320,837 |
| | 316,589 |
| | 4,248 |
| | 1.3 | % | Depreciation and amortization | | 50,818 |
| | 51,988 |
| | (1,170 | ) | | (2.3 | )% | Loss (gain) on impairment / retirement of fixed assets | | 629 |
| | (770 | ) | | 1,399 |
| | N/M |
| Operating income | | $ | 31,135 |
| | $ | 17,997 |
| | $ | 13,138 |
| | 73.0 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 86,804 |
| | $ | 73,168 |
| | $ | 13,636 |
| | 18.6 | % | Attendance | | 8,677 |
| | 8,729 |
| | (52 | ) | | (0.6 | )% | Per capita spending | | $ | 42.17 |
| | $ | 40.24 |
| | $ | 1.93 |
| | 4.8 | % | Out-of-park revenues | | $ | 48,110 |
| | $ | 45,266 |
| | $ | 2,844 |
| | 6.3 | % |
| | | | | | | | | | | | | | | | | | | Nine months ended | | Nine months ended | | Increase (Decrease) | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (39 weeks) | | (39 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 995,495 |
| | $ | 939,249 |
| | $ | 56,246 |
| | 6.0 | % | Operating costs and expenses | | 595,801 |
| | 580,246 |
| | 15,555 |
| | 2.7 | % | Depreciation and amortization | | 108,313 |
| | 112,211 |
| | (3,898 | ) | | (3.5 | )% | Loss on impairment / retirement of fixed assets | | 2,266 |
| | 24,230 |
| | (21,964 | ) | | N/M |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | N/M |
| Operating income | | $ | 297,858 |
| | $ | 222,562 |
| | $ | 75,296 |
| | 33.8 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 405,186 |
| | $ | 365,477 |
| | $ | 39,709 |
| | 10.9 | % | Attendance | | 20,652 |
| | 20,689 |
| | (37 | ) | | (0.2 | )% | Per capita spending | | $ | 44.24 |
| | $ | 41.78 |
| | $ | 2.46 |
| | 5.9 | % | Out-of-park revenues | | $ | 106,801 |
| | $ | 99,526 |
| | $ | 7,275 |
| | 7.3 | % |
Net revenues for the sixnine months ended June 30,September 29, 2013 increased $17.6$56.3 million to $403.4$995.5 million from $385.8$939.2 million during the sixnine months ended July 1,September 30, 2012. The increase in revenues reflects a 5%6%, or $1.93,$2.46, increase in average in-park guest per capita spending during the first sixnine months of the year when compared with the first sixnine months of 2012. In-park guest per capita spending represents the average 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 reflects a 4%5% increase in the admissions per capita spendingcap and a 5%6% increase in pure in-park spending, driven largely by improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Additionally, for the six-monthnine-month period, out-of-park revenues increased 6%7%, or $2.8$7.3 million. Out-of-park revenues include the sale of hotel rooms, food, merchandise, and other complementary activities located outside of the park gates, as well as transaction fees from on-line product sales. The increase in out-of-park revenues was primarily driven by the strong performance of our resort properties, which saw us drivedrove higher average daily room rates (ADR's) while maintaining or growing occupancy rates. The increase in overall net revenues also reflects a less than 1% decrease inincludes attendance that was essentially comparable through the first sixnine months of 2013 when compared with the same period a year ago. This decreaseThe variance in attendance is entirely attributable to the sale of thetwo non-core water park in the fourth quarter of 2012.parks. Excluding the sale of the water parks, attendance increased 1%, or 195,000 visits on a comparable park attendance was comparable to the same period last year.basis.
Revenues for the first sixnine months of the year also reflect the negative impact of exchange rates and the strengthening U.S. dollar on our Canadian operations ($0.23.6 million) during the period.
For the six-monthnine-month period in 2013, operating costs and expenses increased 1%3%, or $4.2$15.6 million, to $320.8$595.8 million from $316.6$580.2 million for the same period in 2012, the net result of a $0.4$7.5 million increase in operating expenses and a $4.3$10.0 million increase in selling, general and administrative costs.costs ("SG&A"). These cost increases were offset slightly by a $0.52%, or $1.9 million decrease in cost of goods sold during the period. The $0.4$7.5 million increase in operating expenses was due to an increaseincreases of approximately $4.3 million in employee costs, $3.2 million in operating supplies and $1.5 million in labor costs andmaintenance materials, offset slightly by a $1.7decrease of $2.7 million increase in operating supplies.insurance expense. The increase in laboremployee costs was primarily due to increased health-care insurance costs while operatingof benefits. Operating supplies increased due to new extra-charge attractions, uniforms, and expenses related to the premium benefit offerings.offerings and improved guest services. The increase$2.7 million decrease in operating costsinsurance expense was somewhat offset bydue to a reduction in insurance settlements and accruals. The $4.3$10.0 million increase in SG&A expenses was due primarily to additional marketing efforts and agency advertising costs, and increased full-time laboremployee costs, largely related to fullperformance incentives and an increase in staffing levels and performance incentives.levels.
Depreciation and amortization expense for the period decreased $1.2$3.9 million due to several significant assets being fully depreciated at the end of 2012. For the six-monthnine-month period of 2013, the $8.7 million gain on sale of other assets relates to the sale of one of our non-core water parks. For the period, loss on impairment/retirement of fixed assets was $0.6totaled $2.3 million reflectingfor the retirement of assets during the period at several of our properties. Loss on impairment/retirement of fixed assets for the period ended September 30, 2012 totaled $24.2 million, which reflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom, offset slightly by gains on other retirements. After depreciation, amortization, gain on sale of other assets, loss (gain) on impairment / retirement of fixed assets, and all other non-cash costs, operating income for the period increased $13.1$75.3 million to $31.1$297.9 million in the first halfnine months of 2013 from operating income of $18.0$222.6 million in the first halfnine months of 2012.
Interest expense for the first halfnine months of 2013 was $51.6$77.2 million, a decrease of $5.4$6.8 million from the first halfnine months of 2012. The decrease in interest expense was due to the settlement of our Canadian cross-currency swaps in the first quarter of 2012, the decrease in non-cash amortization expense dueresulting from the write-off of loan fees related to theour prior credit agreement, and a decrease in revolver interest due to lower average borrowings and a lower average cost due toeffective interest rate from the March 2013 refinancing.
The net effect of our swaps resulted in a non-cash charge to earnings of $6.9$8.3 million for the first halfnine months of 2013 compared with a $1.1$1.3 million non-cash benefit to earnings in the first halfnine months of 2012. The difference reflects 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 designated and de-designated swaps to market. During the current year-to-date period, we also recognized a $23.8$15.2 million net charge to earnings for unrealized/realized foreign currency gains,losses, which representedincluded a $14.4 million unrealized foreign currency loss on the U.S.-dollar denominated debt held at our Canadian property. Additionally, 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 current year-to-date period.
During the first halfnine months of 2013, a benefitprovision for taxes of $24.0$34.0 million was recorded to account for publicly traded partnership (“PTP”) taxes and the tax attributes of our corporate subsidiaries. During the same six monthnine-month period in 2012, a $10.2$41.8 million benefitprovision for taxes was recorded. Actual cash taxes paid or payable are estimated to be between $14 and $17 million for the 2013 calendar year.
After interest expense and the benefit for taxes, the net lossincome for the sixnine months ended June 30,September 29, 2013 totaled $61.7$128.7 million, or $1.11$2.31 per diluted limited partner unit, compared with a net lossincome of $28.8$112.2 million, or $0.52$2.01 per diluted unit, for the same period a year ago.
For the six-monthnine-month period, Adjusted EBITDA (as defined in the 2013 Credit Agreement), which we believe is a meaningful measure of our park-level operating results, increased to $86.8$405.2 million compared with $73.2$365.5 million for the fiscal six-monthnine-month period ended July 1,September 30, 2012. This increase was due to the growth in revenues produced in large part by the continued success of our premium benefit offerings, admissions sales and admission sales program,our food and beverage initiatives, offset slightly by an increase in employee related costs, advertising expenses, and advertising expenses.operating supply costs related to targeted initiatives which enhance our guests' experiences at our parks. 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 page 38.
Second
Third Quarter -
The fiscal three-month period ended June 30,September 29, 2013, consisted of a 13-week period and included a total of 8001,019 operating days compared with 1413 weeks and 9051,177 operating days for the fiscal three-month period ended July 1,September 30, 2012. The difference in operating days is due to the sale of atwo non-core water park in the fourth quarter of 2012parks, as well as the combiningcombination of two parks, Worlds of Fun and Oceans of Fun, into one gate during 2013.
The following table presents key financial information for the three months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | | (13 weeks) | | (14 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 361,620 |
| | $ | 357,606 |
| | $ | 4,014 |
| | 1.1 | % | Operating costs and expenses | | 218,104 |
| | 223,233 |
| | (5,129 | ) | | (2.3 | )% | Depreciation and amortization | | 46,032 |
| | 47,909 |
| | (1,877 | ) | | (3.9 | )% | Loss (gain) on impairment / retirement of fixed assets | | 29 |
| | (862 | ) | | 891 |
| | N/M |
| Operating income | | $ | 97,455 |
| | $ | 87,326 |
| | $ | 10,129 |
| | 11.6 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 144,077 |
| | $ | 134,962 |
| | $ | 9,115 |
| | 6.8 | % | Attendance | | 7,872 |
| | 8,225 |
| | (353 | ) | | (4.3 | )% | Per capita spending | | $ | 42.36 |
| | $ | 40.32 |
| | $ | 2.04 |
| | 5.1 | % | Out-of-park revenues | | $ | 37,576 |
| | $ | 35,878 |
| | $ | 1,698 |
| | 4.7 | % |
| | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (13 weeks) | | (13 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 592,076 |
| | $ | 553,445 |
| | $ | 38,631 |
| | 7.0 | % | Operating costs and expenses | | 274,964 |
| | 263,657 |
| | 11,307 |
| | 4.3 | % | Depreciation and amortization | | 57,495 |
| | 60,223 |
| | (2,728 | ) | | (4.5 | )% | Loss on impairment / retirement of fixed assets | | 1,637 |
| | 25,000 |
| | (23,363 | ) | | N/M |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | N/M |
| Operating income | | $ | 266,723 |
| | $ | 204,565 |
| | $ | 62,158 |
| | 30.4 | % | | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 318,382 |
| | $ | 292,309 |
| | $ | 26,073 |
| | 8.9 | % | Attendance | | 11,975 |
| | 11,960 |
| | 15 |
| | 0.1 | % | Per capita spending | | $ | 45.73 |
| | $ | 42.90 |
| | $ | 2.83 |
| | 6.6 | % | Out-of-park revenues | | $ | 58,690 |
| | $ | 54,260 |
| | $ | 4,430 |
| | 8.2 | % |
For the quarter ended June 30,September 29, 2013, net revenues increased 1%7%, or $4.0$38.6 million, to $361.6$592.1 million from $357.6$553.5 million in the secondthird quarter of 2012. This increase reflects a 5%7% increase in average in-park per capita spending and a 5%an 8%, or $1.7$4.4 million, increase in out-of park revenues, offset slightly by a decrease of 4% in combined attendance.and attendance that was comparable with the prior year period. The increase in per capita spending was the result of higher admissions pricing, improvements in our food and beverage programs, and the successful expansion of our in-park premium benefit offerings.offerings, and improvements in our food and beverage programs. The increase in out-of-park revenues was due to the strong performance of our resort properties. The decrease inExcluding the sale our two non-core water parks, attendance for the second quarter was the direct result of fewer operating days in the period, the shift of the Easter and Spring Break holidays to the first quarter of 2013, and unfavorable short-term weather trends.increased 2%, or 207,000 visits on a comparable park basis.
Operating costs and expenses for the quarter decreased 2%increased 4%, or $5.1$11.3 million, to $218.1$275.0 million from $223.2$263.7 million in the secondthird quarter of 2012, the net result of a $1.4$1.5 million decrease in cost of goods sold, a $5.0$7.0 million decreaseincrease in operating expenses and a $1.3$5.7 million increase in SG&A costs. As a percentage of net revenues, costs and expenses decreased 120 basis points, and was in line with expectations. The decrease in cost of goods sold was primarily the result of successful cost-savings initiatives in food and beverage. The $5.0$7.0 million decreaseincrease in operating expenses was primarily due to lower employee-relateda $2.8 million increase in employee related costs, and maintenancea $1.6 million increase in operating supplies, and expenses.a $1.5 million increase in maintenance expense. The declineincrease in employee related costs was primarily due to the one less week of operations during the second quarter of 2013 compared with the second quarter of 2012, as well as reduced expenses related to the sale of one of our water parkshigher staffing levels, salary increases, and increases in November 2012. The decline in maintenancebenefit costs. Operating supplies wasincreased due to the timing of expenses due to the one less week in operations during the second quarter of 2013.premium benefit offerings and improved guest services. The $1.3$5.7 million increase in SG&A costs was due to increases in employee-related costs and agency advertising costs, offset somewhat by a decline in professional and administrative costs. The increase in SG&A employee-related expenses was due to improvementsan increase in staffing levels across the company,performance incentive awards due to strong 2013 operating results to date, as well as an increase in equity-related compensation due to unit price appreciation.staffing levels across the company. Advertising costs increased as a result of additional marketing efforts in the period.period, including our Customer Relationship Management platform.
Depreciation and amortization expense for the quarter decreased $1.9$2.7 million primarily due to several significant assets reaching the end of their depreciable lives at the end of 2012. For the third quarter of 2013, the gain on sale of other assets was $8.7 million, reflecting the gain on the sale of one of our non-core water parks. Loss on impairment/retirement of fixed assets for the current period was $1.6 million, reflecting losses on the retirement of assets across all of our parks. Loss on impairment/retirement of fixed assets during the quarter ended September 30, 2012 totaled $25.0 million, which reflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom. After depreciation, amortization, gain on sale of other assets, loss (gain) on impairment / retirement of fixed assets, and all other non-cash costs, operating income in the secondthird quarter of 2013 increased $10.1$62.1 million to $97.4$266.7 million from operating income of $87.3$204.6 million in the secondthird quarter of 2012.
Interest expense for the secondthird quarter of 2013 was $25.9$25.5 million, representing a $4.4$1.3 million decrease from the interest expense for the secondthird quarter of 2012. As mentioned in the six-monthnine-month discussion above, interest expense decreased primarily due to a reduction in average revolver balance and lower average rates on the revolver, as well as a reduction in non-cash deferred loan fee amortization resulting from the write-off of fees related to our prior credit agreement.
During the 2013 secondthird quarter, the net effect of our swaps resulted in a $2.3$1.4 million non-cash benefitcharge to earnings, compared to a non-cash benefit to earnings of $0.2 million in the secondthird quarter of 2012. The net effect of swaps reflects the regularly scheduled amortization of amounts in AOCI related to the swaps and ineffective fair value movements in our non-designated derivative portfolio. During the 2013 secondthird quarter, we also recognized a $14.9$8.6 million net chargebenefit to earnings for unrealized/realized foreign currency losses related to angains, which included a $8.5 million unrealized foreign currency lossgain on the U.S.-dollar denominated debt held at our Canadian property.
During the quarter, a provision for taxes of $11.7$58.0 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provision for taxes of $11.4$51.9 million in the same period a year ago. After interest expense and the provision for taxes, net income for the quarter totaled $47.4$190.4 million, or $0.85$3.41 per diluted limited partner unit, compared with net income of $36.6$141.0 million, or $0.66$2.52 per diluted unit, for the secondthird quarter a year ago.
For the current quarter, Adjusted EBITDA increased to $144.1$318.4 million from $135.0$292.3 million for the fiscal secondthird quarter of 2012. The approximate $9.1$26.1 million increase in Adjusted EBITDA was primarily duelargely attributable to incremental revenues resulting primarily from higher average guest per capita spending, as well as increases in out-of-park revenues in the quarter. Adjusted EBITDA in the second quarter also benefited from a reduction in operating expenses in the period, due to one less week of operationsThese revenue increases were somewhat offset by higher costs associated with improving guest services and one less water park in operation. expanding our marketing efforts.
Twelve Months Ended June 30,September 29, 2013 -
The fiscal twelve-month period ended June 30,September 29, 2013, consisted of a 52-week period and 2,2982,140 operating days compared with 53 weeks and 2,4922,416 operating days for the fiscal twelve-month period ended July 1,September 30, 2012. The difference in operating days was due primarily to anthe sale of two non-core water parks, the combination of two parks, Worlds of Fun and Oceans of Fun, into one gate during 2013, and the extra week of operations in the twelve monthtwelve-month period ending July 1,September 30, 2012.
The following table presents key financial information for the twelve months ended June 30,September 29, 2013 and July 1,September 30, 2012: | | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 6/30/2013 | | 7/1/2012 | | $ | | % | | | (52 weeks) | | (53 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,086,069 |
| | $ | 1,102,917 |
| | $ | (16,848 | ) | | (1.5 | )% | Operating costs and expenses | | 689,010 |
| | 700,446 |
| | (11,436 | ) | | (1.6 | )% | Depreciation and amortization | | 125,136 |
| | 130,416 |
| | (5,280 | ) | | (4.0 | )% | (Gain) on sale of other assets | | (6,625 | ) | | — |
| | (6,625 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 31,735 |
| | 10,389 |
| | 21,346 |
| | N/M |
| Operating income | | $ | 246,813 |
| | $ | 261,666 |
| | $ | (14,853 | ) | | (5.7 | )% | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 404,590 |
| | $ | 411,007 |
| | $ | (6,417 | ) | | (1.6 | )% | Adjusted EBITDA margin | | 37.3 | % | | 37.3 | % | | — |
| | — | % | Attendance | | 23,248 |
| | 24,934 |
| | (1,686 | ) | | (6.8 | )% | Per capita spending | | $ | 42.67 |
| | $ | 40.40 |
| | $ | 2.27 |
| | 5.6 | % | Out-of-park revenues | | $ | 119,611 |
| | $ | 124,394 |
| | (4,783 | ) | | (3.8 | )% |
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | | (52 weeks) | | (53 weeks) | | | | | | | | | (As restated) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,124,700 |
| | $ | 1,084,094 |
| | $ | 40,606 |
| | 3.7 | % | Operating costs and expenses | | 700,317 |
| | 701,915 |
| | (1,598 | ) | | (0.2 | )% | Depreciation and amortization | | 122,408 |
| | 127,191 |
| | (4,783 | ) | | (3.8 | )% | Gain on sale of other assets | | (15,368 | ) | | — |
| | (15,368 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 8,372 |
| | 34,509 |
| | (26,137 | ) | | N/M |
| Operating income | | $ | 308,971 |
| | $ | 220,479 |
| | $ | 88,492 |
| | 40.1 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 430,663 |
| | $ | 393,612 |
| | $ | 37,051 |
| | 9.4 | % | Adjusted EBITDA margin | | 38.3 | % | | 36.3 | % | | — |
| | 2.0 | % | Attendance | | 23,263 |
| | 23,961 |
| | (698 | ) | | (2.9 | )% | Per capita spending | | $ | 44.13 |
| | $ | 41.44 |
| | $ | 2.69 |
| | 6.5 | % | Out-of-park revenues | | $ | 124,041 |
| | $ | 119,460 |
| | 4,581 |
| | 3.8 | % |
Net revenues totaled $1,086.11,124.7 million for the twelve months ended June 30,September 29, 2013, decreasingincreasing $16.840.6 million, from $1,102.91,084.1 million for the trailing twelve months ended July 1,September 30, 2012. The 2% decrease4% increase in revenues for the twelve-month period was primarily due to the extra week of operationsdriven by a 7% increase in the prior year's twelve month period. For the current twelve month period,average in-park guest per capita spending, increased 6%, onthe result of a stronger admissions per capita spendingcap and improved pure in-park spending. The increase in pure in-park spending which was driven largely byin large part the result of improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Attendance for the period decreased between
years due primarily to the extra week of operations in the twelve-month period ended July 1, 2012.September 30, 2012, as well as the sale of two non-core water parks during the current year period. Out-of-park revenues increased $4.6 million primarily due to an increase in processing fees as part of our expansion of ticketing options. The decreaseincrease in net revenues for the twelve months ended June 30,September 29, 2013 also reflects the negative impact of currency exchange rates and the weakening Canadian dollar on our Canadian operations (approximately $3.7$3.2 million) during the period.
Operating costs and expenses decreased $11.4$1.6 million, or 2%less than 1%, to $689.0$700.3 million, in large part due to one less week of operations in the current twelve-month period, and were in line with expectations. The decrease in costs and expenses reflects a $2.8$2.9 million decrease in cost of goods sold and a $6.4$1.2 million decrease in operating expenses, anddue primarily to the one less week in the period. These year-over-year cost decreases were partially offset by a $2.2 decrease$2.6 million increase in SG&A costs. The increase in SG&A costs reflects a $2.8 million increase in employment-related costs related to higher staffing levels and incentive compensation plans tied to company performance and a $3.0 million increase in advertising costs related to the transition to a new advertising agency, somewhat offset by a $2.6 decrease in professional and administrative costs, the result of reductions in litigation expenses and consulting fees in the period. The overall decrease in costs and expenses also reflects the impact of exchange rates on our Canadian operations ($0.61.0 million) during the period.
For the twelve-month period ending September 29, 2013, the gain on sale of other assets was $15.4 million, reflecting the gain on the sale of two non-core water parks during the period. Loss on impairment/retirement of fixed assets net,for the period was $8.4 million, due to the removal of a ride to enhance a section of one of our parks, as well as retirements of assets across all of our properties. Loss on impairment/retirement of fixed assets during the period ended September 30, 2012 totaled $31.7$34.5 million, which reflectsreflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom along with losses on other retirements. During the twelve-month period ended June 30, 2013, two non-core assets were sold at gains totaling $6.6 million. During the twelve-month period ended July 1, 2012, aand an $8.8 million charge of $10.4 million for the retirement of fixed assets was recorded,an asset which includes the retirement of the asset asis further described in Note 11 to the financial statements.
Depreciation and amortization expense for the period decreased $5.3$4.8 million compared with the prior period due primarily to several significant assets being fully depreciated at the end of 2012. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for the current period decreased $14.9increased $88.5 million to $246.8$309.0 million from $261.7$220.5 million.
Interest expense for the twelve months ended June 30,September 29, 2013 decreased $25.7$12.5 million to $105.2$103.9 million, from $130.9$116.4 million for the same twelve-month period a year ago. The reductiondecrease in interest expense was primarily attributablereflects a decrease in revolver interest in the period due to an approximate 300 basis point (bps) declinelower borrowings and a lower average cost resulting from the March 2013 refinancing, a decrease in non-cash amortization expense resulting from the write-off of loan fees related to our effective interest rate,prior credit agreement, and the result of lower fixed rates on London InterBank Offered Rate (LIBOR) within our interest-rate swap contracts. Additionally during the current period, the average outstanding balanceimpact of the revolver, as well assettlement of our Canadian cross-currency swaps in the average borrowing rate on the revolver, both declined resulting in lower interest expense.first quarter of 2012.
During the current twelve-month period, the net effect of our interest rate swaps was recorded as a charge to earnings of $6.6$8.1 million compared to a benefit to earnings of $14.7$10.9 million in the prior twelve-month period. The difference reflects the regularly scheduled amortization of amounts in AOCI and write-off of amounts related to de-designated 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 period, we also recognized a $13.7$20.2 million charge to earnings for unrealized/realized foreign currency losses, which included a $13.9$19.4 million unrealized foreign currency loss 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.
A provision for taxes of $17.9$24.0 million was recorded in the period for the tax attributes of our corporate subsidiaries and PTP taxes. This compares with a provision for taxes of $13.8$27.9 million in twelve-month period ended July 1, 2012 for the tax attributes of our corporate subsidiaries and PTP taxes.September 30, 2012.
After interest expense and provision for taxes, net income for the period totaled $69.0$118.4 million, or $1.24$2.12 per diluted limited partner unit, compared with net income of $117.1$105.9 million, or $2.10$1.89 per diluted unit, a year ago.
As discussed above, the current twelve-monthtrailing-twelve-month results include one less week of operations due to the timing of the secondthird quarter fiscal close. Comparing the twelve-month periods for both 2013 and 2012 on a comparable 52-week basis, net revenues would be up approximately $37.3$55.1 million, or 4%5%, on increases in both average in-park guest per capita spending and out-of- parkout-of-park revenues, partially offset by a slight decline in attendance. The increase in average in-park guest per capita spending is primarily due to a higher admissions per capita spendingcap and improved pure in-park spending, which was driven largely by improvements in our food and beverage programs and the expansion and continued success of our premium benefit offerings. Out-of-park revenues would have increased $0.7$6.3 million primarily due to an increase in transaction fees from on-line ticket sales. Attendance for the comparable period would have decreased 404,000351,000 visits, primarily due to soft attendance during the fourth quarter of 2012 compared with the fourth quarter of 2011.
On a comparable 52-week basis, operating costs and expenses would have increased approximately $10.1$9.1 million, the net result of a $1.7$1.9 million increasedecrease in cost of goods sold, a $7.4$6.2 million increase in operating expenses and a $1.0$4.8 million increase in SG&A costs. The increase in operating expenses was primarily attributable to an increase in employment-related expenses of $7.0$3.3 million, a $4.7$3.9 million increase in operating supply costs, a $1.9 million increase in property and other non-income taxes, and a $1.4$1.6 million increase in utility costs. Somewhat offsetting these operating-expense increases were decreases in maintenance expenses of $5.0$3.5 million and insurance expenses of $3.3$1.6 million. The increase in employment-related costs was largely due to higher benefit costs and increased seasonal labor hours resulting from expanded operating hours at several parks, the introduction of additional attractions and enhanced guest services at our parks. Operating supply costssupplies increased due largely to the introduction of new extra-charge attractions and incremental expenses related to our expanded premium benefit offerings. Property taxes increased due to the timing
of the receipt of a refund at one of our parks in the trailing-twelve-month period ended July 1, 2012, while utilityUtility costs increased primarily due to rate increases and the addition of new rides and attractions at the parks. The increase in SG&A costs for the period reflects a $3.1$3.4 million increase in employment-related costs due to higher staffing levels and bonusincentive compensation plans tied to company performance, and a $1.9$4.0 million increase in advertising costs related to the transition to a new advertising agency, and a $1.3 million increase in operating supplies, largely related to the expansion of our e-commerce platform.agency. Somewhat offsetting these SG&A cost increases was a $4.6$2.5 million decrease in professional and administrative costs primarily due to reductions in litigation expenses and consulting fees in the period.
Adjusted EBITDA for the twelve-month period ended June 30,September 29, 2013, decreased $6.4increased $37.1 million, or 2%9%, to $404.6$430.7 million. This decrease was due to the one fewer operating week in the current twelve-month period. On a same-week basis, Adjusted EBITDA for the twelve-month period would have increased approximately $26.1$40.9 million, or 7%11%. On a same-week basis, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased 120190 bps to 37.3%38.3% from 36.1%36.4% for the twelve-month period ended June 30,September 29, 2013, primarily due to an increase in revenues resulting from the continued success of high-margin revenues initiatives as our new premium guest benefit offerings and theour admission pricing, program combined with continued focus on controlling operating costs.
JulyOctober 2013 -
Based on preliminary results, through August 4, 2013, net revenues through November 3, 2013 were approximately $712$1,104 million, up 5%6%, or $36$65 million, compared with $676$1,039 million for the same period last year. The increase was athe result of an approximate 5%6%, or $2.24,$2.31, increase in average in-park guest per capita spending to $43.47,a record $44.33, and aan approximate 7%, or $5$8 million increase, in out-of-park revenues to $78$117 million. These increases were slightly offset by a less than one percent, or 52,000-visit, decreaseAlso contributing to revenue growth was an increase in attendance to 15.0 million visits.of 100,000 visits, compared with last year. Excluding the sale of two water park sold in 2012,parks, attendance was up 1%2%, or 75,000334,000 visits, when compared with this time last year.to a record 22.7 million visits on a comparable park basis.
Liquidity and Capital Resources: With respect to both liquidity and cash flow, we ended the secondthird quarter of 2013 in sound condition. The negative working capital ratio (current liabilitiesassets divided by current assets)liabilities) of 1.21.5 at June 30,September 29, 2013 reflects the impact of our seasonal business. Cash, receivablesReceivables, inventories, and inventoriespayables are at normal seasonal levels and credit facilities arelevels. Operating Activities During the nine-month period ended September 29, 2013, net cash provided by operating activities increased $40.2 million from the same period a year ago, primarily due to the year-over-year growth in placerevenues. For the twelve-month period ended September 29, 2013 net cash provided by operating activities increased $52.3 million from the same period a year ago, also reflective of the year-over-year growth in revenues. Investing Activities Net cash used in investing activities in the first nine months of 2013 was $82.2 million, an increase of $7.6 million compared with the nine month period ended September 30, 2012. Within investing activities, capital expenditures increased $21.7 million. During the current period, $15.3 million was received for the sale of a non-core waterpark. Net cash used in investing activities for the trailing-twelve-month period ended September 29, 2013 totaled $86.6 million compared with $91.9 million for the same period a year ago. The decrease reflects the receipt of $30.2 million from the sale of two non-core water parks during the period, offset somewhat by a $23.6 million increase in capital expenditures. Financing Activities Net cash used in financing activities in the first nine months of 2013 was $130.1 million, a decrease of $12.3 million compared with the nine-month period ended September 30, 2012. The decrease was due to funda one-time cash cost of $50.5 million to settle our Canadian derivative in the first quarter of 2012, offset somewhat by an increase in distributions paid in the current liabilities.year of $37.9 million. Net cash used in financing activities in the trailing-twelve-month period ended September 29, 2013 totaled $150.6 million, a decrease of $31.2 million compared with the twelve-month period ended September 30, 2012. The decrease was due to the $50.5
million Canadian derivative settlement in 2012, offset somewhat by an increase in distributions paid of $21.4 million in the current twelve-month period. 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 was scheduled to mature in December of 2017 and bore interest at a rate of LIBOR plus 300 bps, with a LIBOR floor of 100 bps.
The Amended 2010 Credit Agreement also included 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, was scheduled to mature in July of 2015, also provided for the issuance of documentary and standby letters of credit.
In March 2013,we issued $500 million of 5.25% 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 2013 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 include a revolving credit facility of a combined $255 million. Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility has a limit of $15 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 50 bps per annum on the unused portion of the credit facilities.
At the end of the quarter, we had a total of $628.4 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $901.4 million of fixed-rate debt (including OID), $58.0 million outstanding borrowings under our revolving credit facility, and cash on hand of $43.6 million. After letters of credit, which totaled $16.4 million at June 30, 2013, we had $180.6 million of available borrowings under the revolving credit facility under the 2013 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%.
In February 2011, we amended our 2010 Credit Agreement (as so amended, the "Amended 2010 Credit Agreement") to provide a $1,175 million senior secured term loan facility with interest at a rate of LIBOR plus 300 bps along with a LIBOR floor of 100 bps. The amendment extended the maturity date of the term loan portion of the credit facilities to December 2018. The Amended 2010 Credit Agreement also included 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 was scheduled to mature in July of 2015, also provided for the issuance of documentary and standby letters of credit.
In March 2013, we issued $500 million of 5.25% senior unsecured notes, maturing in 2021, in a private placement, with no OID. 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%.
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 2013 Credit Agreement were used to repay in full all amounts outstanding under the Amended 2010 Credit Agreement. 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 include a revolving credit facility of a combined $255 million. The Canadian portion of the revolving credit facility has a limit of $15 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 50 bps per annum on the unused portion of the credit facilities. At the end of the quarter, we had a total of $628.4 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $901.6 million of fixed-rate debt (including OID), no outstanding borrowings under our revolving credit facility, and cash on hand of $183.5 million. After letters of credit, which totaled $16.4 million at September 29, 2013, we had $238.6 million of available borrowings under the revolving credit facility. In order to maintainlock in fixed interest costs on a portion of our domestic term debt, in September 2010 we entered into several forward-starting swap agreements ("September 2010 swaps") to effectively convert a total of $600 million of variable-rate debt to fixed rates beginning in October 2011. As a result of the February 2011 amendment to the 2010 Credit Agreement, the LIBOR floor on the term loan portion of its 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 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 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 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 was 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 (together referred to as the "Combination 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 swapsCombination Swaps were jointly designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.33%. At the time of the de-designation, the fair market value of the September 2010 swaps and March 2011 swaps was $22.2 million, which will be amortized out of AOCI into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive income through 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. During the third quarter of 2013, the Combination Swaps were de-designated as the hedge effectiveness testing indicated that these swaps would be ineffective throughout the remaining periods until maturity. This de-designation had no effect on the unaudited condensed consolidated statements of operations as previous amounts recorded in AOCI had already been accounted for on March 6, 2013. During the third quarter of 2013, the Partnership entered into three forward-starting interest rate swap agreements ("2013 forwards") that will effectively convert $400 million of variable-rate debt to fixed rates beginning in December of 2015. These swaps, which were designated as cash flow hedges, mature on December 31, 2018 and fix LIBOR at a weighted average rate of 3.00%. In October 2013, the Partnership entered into an additional forward-starting interest rate swap agreement ("October 2013 swaps") that will effectively convert $100 million of variable-rate debt to a 2.70% fixed rate beginning in December of 2015. At June 30,September 29, 2013, the fair market value of the September 2010 swaps, the March 2011 swaps and the March 2013 swapsderivative portfolio was a liability of $20.131.6 million, which was recorded in “Derivative Liability” on the condensed consolidated balance sheet. The May 2011 swaps had a fair market value of $6.7 million as of June 30, 2013 and was recorded in “Derivative Liability” on the condensed consolidated balance sheet.
The following table presents our September 20102013 forwards and the October 2013 swaps March 2011 swaps,which mature in December 2018, and the Combination Swaps and May 2011 swaps, and March 2013 swaps which mature December 15, 2015, along with their notional amounts and their fixed interest rates. | | | | | | | | | | | | | | | | Interest Rate Swaps | ($'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 |
| | 2.43 | % | | | | | | 25,000 |
| | 2.30 | % | | | | | Total $'s / Average Rate | $ | 600,000 |
| | 2.33 | % | | $ | 200,000 |
| | 2.54 | % |
| | | | | | | | | | | | | | | | 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 |
| | 3.00 | % | | $ | 200,000 |
| | 2.27 | % | | 100,000 |
| | 3.00 | % | | 150,000 |
| | 2.43 | % | | 100,000 |
| | 3.00 | % | | 75,000 |
| | 2.30 | % | | 100,000 |
| | 2.70 | % | | 70,000 |
| | 2.54 | % | | | | | | 50,000 |
| | 2.54 | % | | | | | | 50,000 |
| | 2.54 | % | | | | | | 50,000 |
| | 2.43 | % | | | | | | 50,000 |
| | 2.29 | % | | | | | | 50,000 |
| | 2.29 | % | | | | | | 30,000 |
| | 2.54 | % | | | | | | 25,000 |
| | 2.30 | % | Total $'s / Average Rate | $ | 500,000 |
| | 2.94 | % | | $ | 800,000 |
| | 2.38 | % |
The 2013 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,and not cured, 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 secondthird quarter of 2013, this ratio was set at 6.25x 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 June 30,September 29, 2013, our Consolidated Leverage Ratio was 3.813.57x, providing $157.0184.1 million of EBITDA cushion on the ratio at the end of the secondthird quarter. We were in compliance with all other covenants under the 2013 Credit Agreement as of June 30,September 29, 2013. The 2013 Credit Agreement allows restricted payments of up to $60 million so long as no default or event of default has occurred and is continuing. Additional 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 5.0x, measured on a trailing-twelve-month quarterly basis. At June 30,September 29, 2013, the notes maturing in 2018 have the more restrictive covenants than the 2021 notes.covenants. 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 2013 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 MayAugust 8, 2013, we announced the declaration of a distribution of $0.625 per limited partner unit, which was paid on June 17,September 16, 2013, and on August 8,November 7, 2013 we announced the declaration of a distribution of $0.625$0.70 per limited partner unit, payable SeptemberDecember 16, 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 $16.4 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of June 30,September 29, 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 June 30,September 29, 2013, we had $901.4$901.6 million of fixed-rate senior unsecured notes and $628.4 million of variable-rate term debt. After considering the impact of interest rate swap agreements, virtually all of our outstanding long-term debt represents fixed-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $35$31 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt, after the fixed-rate swap agreements, would lead to a decrease of approximately $0.7 million in annual cash interest costs. A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $3.9$3.7 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 June 30,September 29, 2013, the Partnership's management has evaluated the effectiveness of the design and operation of the Partnership's disclosure controls and procedures under supervision of management, and 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 were effective as of June 30, 2013.September 29, 2013.
(b)Changes in Internal Control Over Financial Reporting - There were no changes in the Partnership’s internal control over financial reporting that occurred during the fiscal quarter ended June 30,September 29, 2013 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. On April 19, 2013 the Court of 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. On June 3, 2013 the Company filed a Notice of Appeal and Memorandum in Support of Jurisdiction with the Ohio Supreme Court related to the April 19, 2013 Court of Appeals decision. On July 2, 2013 Mr. Falfas filed a Memorandum in Opposition to Jurisdiction with the Ohio Supreme Court. TheOn September 25, 2013 the Supreme Court will review the jurisdictional memoranda filed and determine whether to acceptof Ohio accepted the appeal on Proposition of Law No. 1 related to the Supreme Court’s holding in Masetta v. National Bronze & Aluminum Foundry Co. 159 Ohio St. 306 (1953), barring specific performance as a remedy for a personal services contract under Ohio law and decide the caseits applicability to individual employment agreements. The matter will now proceed on the merits.merits and both sides will have the opportunity to file briefs with the court in support of their respective arguments. The Partnership believes the liability recorded
as of June 30,September 29, 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 ourthe Partnership's Annual Report on Form 10-K for the year ended December 31, 2012.
ITEM 5. OTHER INFORMATION
On May 8, 2013, the Partnership announced that it had identified a historical classification error in the Partnership'sits initial determination of whether a specific asset retired under the composite method of depreciation was normal or unusual. The error resulted in the overstatement of Income before taxes of $8.8 million for the period 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 would 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 beingthat was 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 substantial net book value and/or if the retirement caused a deviation from the estimated composite depreciation survivor curve as well as other minor qualitative issues.
The restatement amount of $8.8 million iswas recorded in Loss on impairment / retirement of fixed assets, net in the Annual Report on Form 10-K/A filing to correct the previous error.
As disclosed in the Partnership's prior filings, the Partnership 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 be recorded in the Consolidated Statements of Operations and Comprehensive Income.
ITEM 6. EXHIBITS | | | | Exhibit (10.1) | | Amendment No. 1 dated September 30, 2013 to the 2013 Credit Agreement dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with Matthew A. Ouimet, dated October 21, 2013. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013. | | | | 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 June 30,September 29, 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: | August 8,November 7, 2013 | /s/ Matthew A. Ouimet | | | Matthew A. Ouimet | | | President and Chief Executive Officer | | | | | Date: | August 8,November 7, 2013 | /s/ Brian C. Witherow | | | Brian C. Witherow | | | Executive Vice President and | | | Chief Financial Officer |
INDEX TO EXHIBITS | | | | Exhibit (10.1) | | Amendment No. 1 dated September 30, 2013 to the 2013 Credit Agreement dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with Matthew A. Ouimet, dated October 21, 2013. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013. | | | | 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 June 30,September 29, 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 | $ | 600,000 |
| | 2.33 | % | | $ | 200,000 |
| | 2.54 | % | $ | 400,000 |
| | 3.00 | % | | $ | 800,000 |
| | 2.38 | % |