(
Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the three-month periods ended September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013: | | (In thousands) | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | 3/30/14 | | 3/31/13 | | | | 3/30/14 | | 3/31/13 | | | | 3/30/14 | | 3/31/13 | Interest rate swaps | | $ | (5,483 | ) | | $ | 438 |
| | Interest Expense | | $ | — |
| | $ | (2,990 | ) | | Net effect of swaps | | $ | — |
| | $ | — |
| | $ | (2,742 | ) | | $ | 2,266 |
| | Interest Expense | | $ | — |
| | $ | (2,797 | ) | | Net effect of swaps | | $ | — |
| | $ | 435 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | (In thousands) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | Three months ended | | Three months ended | | | | 9/29/13 | | 9/30/12 | | | | 3/30/14 | | 3/31/13 | Interest rate swaps (1) | | Net effect of swaps | | 609 |
| | — |
| | Net effect of swaps | | 1,617 |
| | (1,471 | ) | | | $ | 609 |
| | $ | — |
| | $ | 1,617 |
| | $ | (1,471 | ) | | | | | | | | | |
| | (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 September 29, 2013March 30, 2014, in addition to gains of $0.61.6 million recognized in income 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 charge to earnings of $1.40.4 million recorded in “Net effect of swaps.”
For the three-month period ended September 30, 2012, $0.2 million of income 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 nine-month periods ended September 29, 2013 and 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 | | 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 | | | | 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 nine-month period ended September 29,March 31, 2013, in addition to the $3.7 million$435 thousand gain recognized in income on the ineffective portion of derivatives and $0.1$1.5 million gain loss recognized in income on the derivatives not designated as cash flow hedges (as noted in the tables above), $7.8$7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $4.3 million330 thousand of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the period.operations. The effect of these amounts resulted in a charge to earnings of $8.39.2 million recorded in “Net effect of swaps.”
For the nine-month period ended 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, $0.2 million of expense representing the amortization of amounts in AOCI for the swaps and $0.2 million of foreign currency gain in the period related to the U.S. dollar denominated Canadian term loan were
recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings of $1.3 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 September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013: | | (In thousands) | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | | Amount of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | Twelve months ended | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | | | 9/29/13 | | 9/30/12 | | 3/30/14 | | 3/31/13 | | | | 3/30/14 | | 3/31/13 | | | | 3/30/14 | | 3/31/13 | Interest rate swaps | | $ | (769 | ) | | $ | (873 | ) | | Interest Expense | | $ | (5,820 | ) | | $ | (12,027 | ) | | Net effect of swaps | | $ | 3,703 |
| | $ | 4,797 |
| | $ | (6,658 | ) | | $ | 2,286 |
| | Interest Expense | | $ | (2,797 | ) | | $ | (12,031 | ) | | Net effect of swaps | | $ | 3,268 |
| | $ | 435 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (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 |
| | | | | | | |
| | | | | | | | | | | | (In thousands) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Twelve months ended | | Twelve months ended | | | | 3/30/14 | | 3/31/13 | Interest rate swaps | | Net effect of swaps | | 6,635 |
| | (1,471 | ) | | | | | $ | 6,635 |
| | $ | (1,471 | ) | | | | | | | |
| | (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 $3.73.3 million gain recognized in income on the ineffective portion of derivatives and $0.16.6 million gain 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 $4.17.9 million of expense representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended 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 $8.1 million recorded in “Net effect of swaps.” For the twelve-month period ending SeptemberMarch 30, 2012, in addition to the $4.8 million gain recognized in income on the ineffective portion of derivatives designated as derivatives and $5.6 million of gain recognized in income on the ineffective portion of derivatives not designated as derivatives noted in the tables above, $0.1 million of income representing the amortization of amounts in AOCI for the swaps and a $0.4 million foreign currency gain in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended September 30, 20122014 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings for the trailing twelve month period of $10.92.0 million recorded in “Net effect of swaps.”
For the twelve-month period ending March 31, 2013, in addition to the $435 thousand gain recognized in income on the ineffective portion of designated derivatives and $1.5 million of loss recognized in income 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 $192 thousand of income representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended March 31, 2013 in the condensed consolidated statements of operations. The net effect of these amounts resulted in expense for the trailing twelve month period of $8.7 million recorded in “Net effect of swaps.” (7) Fair Value Measurements: The FASB Accounting Standards Codification (ASC) relating to fair value measurements emphasizes that fair value is a market-based measurement that should be determined based on assumptions (inputs) that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable, and valuation techniques used to measure fair value should maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Accordingly, the FASB’s ASC establishes a hierarchal disclosure framework that ranks the quality and reliability of information used to determine fair values. The hierarchy is associated with the level of pricing observability utilized in measuring fair value and defines three levels of inputs to the fair value measurement process—quoted prices are the most reliable valuation inputs, whereas model values that include inputs based on unobservable data are the least reliable. Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety.
The three broad levels of inputs defined by the fair value hierarchy are as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The table below presents the balances of assets and liabilities measured at fair value as of September 29, 2013March 30, 2014, December 31, 2012,2013, and September 30, 2012March 31, 2013 on a recurring basis: | | | | Total | | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | September 29, 2013 | | | | | | | | | | March 30, 2014 | | | | | | | | | | (In thousands) | | | | | | | | | | | | | | | | | Interest rate swap agreements (1) | | $ | (5,483 | ) | | $ | — |
| | $ | (5,483 | ) | | $ | — |
| | $ | (6,657 | ) | | $ | — |
| | $ | (6,657 | ) | | $ | — |
| Interest rate swap agreements (2) | | (26,163 | ) | | — |
| | (26,163 | ) | | — |
| | (21,132 | ) | | — |
| | (21,132 | ) | | — |
| Net derivative liability | | $ | (31,646 | ) | | $ | — |
| | $ | (31,646 | ) | | $ | — |
| | $ | (27,789 | ) | | $ | — |
| | $ | (27,789 | ) | | $ | — |
| | | | | | | | | | | | | | | | | | December 31, 2012 | | | | | | | | | | December 31, 2013 | | | | | | | | | | Interest rate swap agreements (1) | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | $ | (3,916 | ) | | $ | — |
| | $ | (3,916 | ) | | $ | — |
| Interest rate swap agreements (2) | | | $ | (22,746 | ) | | $ | — |
| | $ | (22,746 | ) | | $ | — |
| Net derivative liability | | $ | (32,260 | ) | | $ | — |
| | $ | (32,260 | ) | | $ | — |
| | $ | (26,662 | ) | | $ | — |
| | $ | (26,662 | ) | | $ | — |
| | | | | | | | | | | | | | | | | | September 30, 2012 | | | | | | | | | | March 31, 2013 | | | | | | | | | | Interest rate swap agreements (1) | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| | $ | (23,388 | ) | | $ | — |
| | $ | (23,388 | ) | | $ | — |
| Interest rate swap agreements (2) | | | $ | (7,643 | ) | | $ | — |
| | $ | (7,643 | ) | | $ | — |
| Net derivative liability | | $ | (34,708 | ) | | $ | — |
| | $ | (34,708 | ) | | $ | — |
| | $ | (31,031 | ) | | $ | — |
| | $ | (31,031 | ) | | $ | — |
|
| | (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 $0.90.6 million as of September 29, 2013March 30, 2014. 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 September 29, 2013March 30, 2014 or September 30, 2012March 31, 2013, 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 September 29, 2013March 30, 2014 was approximately $627.6618.9 million based on borrowing rates currently available to the Partnership on long-term debt with similar terms and average maturities. The fair value of the Partnership's notes at September 29, 2013March 30, 2014 was approximately $922.0938.6 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 per limited partner unit is calculated based on the following unit amounts: | | | | Three months ended | | Nine months ended | Twelve months ended | | Three months ended | | Twelve months ended | | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | 9/29/2013 | | 9/30/2012 | | 3/30/2014 | | 3/31/2013 | | 3/30/2014 | | 3/31/2013 | | | (In thousands except per unit amounts) | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,485 |
| | 55,611 |
| | 55,472 |
| | 55,473 |
| 55,460 |
| | 55,440 |
| | 55,500 |
| | 55,854 |
| | 55,531 |
| | 55,694 |
| Effect of dilutive units: | | | | | | | | | | | | | | | | | | | Unit options and restricted unit awards | | 189 |
| | 45 |
| | 146 |
| | 42 |
| 120 |
| | 31 |
| | — |
| | — |
| | 209 |
| | 63 |
| Phantom units | | 189 |
| | 336 |
| | 185 |
| | 333 |
| 224 |
| | 416 |
| | — |
| | — |
| | 170 |
| | 299 |
| Diluted weighted average units outstanding | | 55,863 |
| | 55,992 |
| | 55,803 |
| | 55,848 |
| 55,804 |
| | 55,887 |
| | 55,500 |
| | 55,854 |
| | 55,910 |
| | 56,056 |
| Net income per unit - basic | | $ | 3.43 |
| | $ | 2.54 |
| | $ | 2.32 |
| | $ | 2.02 |
| $ | 2.13 |
| | $ | 1.91 |
| | $ | (1.51 | ) | | $ | (1.95 | ) | | $ | 2.41 |
| | $ | 1.04 |
| Net income per unit - diluted | | $ | 3.41 |
| | $ | 2.52 |
| | $ | 2.31 |
| | $ | 2.01 |
| $ | 2.12 |
| | $ | 1.89 |
| | $ | (1.51 | ) | | $ | (1.95 | ) | | $ | 2.39 |
| | $ | 1.04 |
| | | | | | | | | | | | | | | | | | | | |
The effect of out-of-the-money and/or antidilutive unit options on the three nine and twelve months ended September 29,March 30, 2014 and March 31, 2013, respectively, had they not been out of the money or antidilutive, would have been zero, 7,000, and 4,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three, nine and twelve months ended September 30, 2012, had they not been out of the money or antidilutive, would have been 66,000, 34,000 and 36,000 units, respectively.immaterial in all periods presented. (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 thirdfirst quarter of 20132014 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:
The Partnership has made the following correction relating to its use of the composite depreciation method.
This correction, which impacts the Balance Sheet at September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three-, nine-, and twelve-month periods ended September 30, 2012, reflects a subsequent determination that a disposition from the 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 a response to an SEC comment letter. The Partnership ultimately concluded that such disposition was unusual and that an $8.8 millioncharge 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) | 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 | | 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)(11) Changes in Accumulated Other Comprehensive Income (Loss) by Component:
The following tables reflect the changes in Accumulated Other Comprehensive Income (Loss) related to limited partners' equity for the three-, nine-, and twelve-month periods ended September 29, 2013March 30, 2014: and March 31, 2013:
| | | | | | | | | | | | | | | | 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 | ) |
| | | | | | | | | | | | | | | | 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, 2013 | | $ | (15,013 | ) | | $ | 5 |
| | $ | (15,008 | ) | | | | | | | | | Other comprehensive income before reclassifications, net of tax $413 and ($932), respectively | | (2,328 | ) | | 1,621 |
| | (707 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income, net of tax ($307) (2) | | 1,678 |
| | — |
| | 1,678 |
| | | | | | | | | Net other comprehensive income | | (650 | ) | | 1,621 |
| | 971 |
| | | | | | | | | March 30, 2014 | | $ | (15,663 | ) | | $ | 1,626 |
| | $ | (14,037 | ) |
(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 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 | ) |
| | | | | | | | | | | | | | | | 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, net of tax $326 and ($174), respectively | | 1,940 |
| | 301 |
| | 2,241 |
| | | | | | | | | Amounts reclassified from accumulated other comprehensive income, net of tax ($1,229) (2) | | 6,945 |
| | — |
| | 6,945 |
| | | | | | | | | Net other comprehensive income | | 8,885 |
| | 301 |
| | 9,186 |
| | | | | | | | | March 31, 2013 | | $ | (16,864 | ) | | $ | (2,450 | ) | | $ | (19,314 | ) |
(1) All amounts are net of tax. Amounts in parentheses indicate debits. (2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.
| | | | | | | | | | | | | | | | 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 | ) |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at March 31, 2013 | | $ | (16,864 | ) | | $ | (2,450 | ) | | $ | (19,314 | ) | | | | | | | | | Other comprehensive income before reclassifications, net of tax $1,144 and ($2,343), respectively | | (5,514 | ) | | 4,076 |
| | (1,438 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income, net of tax ($1,228) (2) | | 6,715 |
| | — |
| | 6,715 |
| | | | | | | | | Net other comprehensive income | | 1,201 |
| | 4,076 |
| | 5,277 |
| | | | | | | | | March 30, 2014 | | $ | (15,663 | ) | | $ | 1,626 |
| | $ | (14,037 | ) |
(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 |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at March 25, 2012 | | $ | (25,549 | ) | | $ | (4,289 | ) | | $ | (29,838 | ) | | | | | | | | | Other comprehensive income before reclassifications, net of tax ($298) and ($1,058), respectively | | 1,988 |
| | 1,839 |
| | 3,827 |
| | | | | | | | | Amounts reclassified from accumulated other comprehensive income, net of tax ($1,445) (2) | | 6,697 |
| | — |
| | 6,697 |
| | | | | | | | | Net other comprehensive income | | 8,685 |
| | 1,839 |
| | 10,524 |
| | | | | | | | | March 31, 2013 | | $ | (16,864 | ) | | $ | (2,450 | ) | | $ | (19,314 | ) |
(1) All amounts are net of tax. Amounts in parentheses indicate debits. (2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.
| | | | | | | | | | | | | | | | | | | | | | Reclassifications Out of Accumulated Other Comprehensive Income (1) | (In thousands) | | | | | | | | | | | | Details about Accumulated Other Comprehensive Income Components | | Amount Reclassified from Accumulated Other Comprehensive Income | | Affected Line Item in the Statement Where Net Income is Presented | Gains and losses on cash flow hedges | | 3 months ended 3/30/14 | | 3 months ended 3/31/13 | | 12 months ended 3/30/14 | | 12 months ended 3/31/13 | | | | Interest rate contracts | | $ | 1,985 |
| | $ | 8,174 |
| | $ | 7,943 |
| | $ | 8,142 |
| | Net effect of swaps | | | | $ | 1,985 |
| | $ | 8,174 |
| | $ | 7,943 |
| | $ | 8,142 |
| | Total before tax | | | | (307 | ) | | (1,229 | ) | | (1,228 | ) | | (1,445 | ) | | Benefit for taxes | | | | $ | 1,678 |
| | $ | 6,945 |
| | $ | 6,715 |
| | $ | 6,697 |
| | Net of tax |
(1) Amounts in parentheses indicate debits.
(13)(12) Consolidating Financial Information of Guarantors and Issuers:
Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), and Magnum Management Corporation ("Magnum") are the co-issuers of the Partnership's 9.125% notes and the 5.25% notes (see Note 5). The notes have been fully and unconditionally guaranteed, on a joint and several basis, by each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum) that guarantees the Partnership's senior secured credit facilities. There are no non-guarantor subsidiaries.
The following consolidating schedules present condensed financial information for Cedar Fair, L.P., Cedar Canada, and Magnum, the co-issuers, and each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum), the guarantors (on a combined basis), as of September 29, 2013March 30, 2014, December 31, 2012,2013, and September 30, 2012March 31, 2013 and for the three nine and twelve month periods ended September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, the Partnership has included the accompanying condensed consolidating financial statements.
SinceThe Partnership adopted ASU 2013-04, “Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date" as of January 1, 2014. The debt disclosed on the unaudited balance sheets as of March 31, 2014, December 31, 2013 and March 31, 2013 reflect the adoption of this guidance. For the periods ended December 31, 2013 and March 31, 2013, the debt disclosed and related items have been adjusted to reflect only the amounts of debt Cedar Fair, L.P.,L.P, Cedar Canada, and Magnum are co-issuershave recorded on their books.
In addition to making the retrospective adjustments to the balance sheets related to the adoption of ASU 2013-14, the notesUnaudited Condensed Consolidating Statements of Cash Flows for the three and co-borrowers undertwelve month periods ended March 31, 2013 have been revised to correct the presentation of income from investments in affiliates and other intercompany transactions as an adjustment to cash flows from operating activities. We previously reported the following amounts as cash flows from (for) investing activities. | | | | | | | | | | | | | | | | | | | | | | | | | | (in thousands) | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Three months ended March 31, 2013 | | | | | | | | | | | | | Investment in joint ventures and affiliates | | $ | 65,636 |
| | $ | 58,171 |
| | $ | (2,442 | ) | | $ | 32,098 |
| | $ | (153,463 | ) | | $ | — |
| | | | | | | | | | | | | | Twelve months ended March 31, 2013 | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 43,043 |
| | (49,642 | ) | | (2,479 | ) | | 4,568 |
| | 4,510 |
| | — |
|
In addition, the Unaudited Condensed Consolidating Statement of Cash Flows for the twelve month period ended March 31, 2013 Credit Agreement, all outstanding debt has been equally reflected within each co-issuer'srevised to correct the presentation of cash received by a co-issuer subsidiary (Magnum), related to intercompany term debt as cash flows from investing activities. We previously reported an September 29, 2013, December 31, 2012 and September 30, 2012$104.2 million balance sheets in the accompanying condensed consolidating financial statements.intercompany term debt receipt as cash flows from financing activities.
The consolidating financial information has been corrected forThese revisions had no effect on the information described in Note 11.
Partnership's Unaudited Condensed Consolidated Balance Sheets, Statements of Operations and Comprehensive Income, Statements of Partner's Equity, or Statements of Cash Flows.
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET September 29, 2013March 30, 2014
(In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | | | | | | | | | | | | | Cash and cash equivalents | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | $ | — |
| | $ | 571 |
| | $ | 3,524 |
| | $ | 4,772 |
| | $ | — |
| | $ | 8,867 |
| Receivables | | 12 |
| | 124,478 |
| | 70,303 |
| | 589,797 |
| | (742,056 | ) | | 42,534 |
| | 59 |
| | 96,547 |
| | 76,669 |
| | 530,662 |
| | (684,307 | ) | | 19,630 |
| Inventories | | — |
| | 1,578 |
| | 2,090 |
| | 25,648 |
| | — |
| | 29,316 |
| | — |
| | 3,794 |
| | 2,841 |
| | 31,629 |
| | — |
| | 38,264 |
| Current deferred tax asset | | — |
| | 3,708 |
| | 816 |
| | 3,661 |
| | — |
| | 8,185 |
| | — |
| | 22,409 |
| | 800 |
| | 3,444 |
| | — |
| | 26,653 |
| Income tax refundable | | — |
| | — |
| | 662 |
| | — |
| | — |
| | 662 |
| | Other current assets | | 995 |
| | 3,558 |
| | 613 |
| | 3,798 |
| | — |
| | 8,964 |
| | 325 |
| | 10,578 |
| | 5,589 |
| | 15,891 |
| | (2,363 | ) | | 30,020 |
| | | 134,007 |
| | 135,615 |
| | 110,671 |
| | 634,906 |
| | (742,056 | ) | | 273,143 |
| | 384 |
| | 133,899 |
| | 89,423 |
| | 586,398 |
| | (686,670 | ) | | 123,434 |
| Property and Equipment (net) | | 450,205 |
| | 985 |
| | 248,484 |
| | 815,000 |
| | — |
| | 1,514,674 |
| | 455,780 |
| | 8,110 |
| | 240,175 |
| | 829,897 |
| | — |
| | 1,533,962 |
| Investment in Park | | 548,241 |
| | 824,356 |
| | 143,548 |
| | 81,719 |
| | (1,597,864 | ) | | — |
| | 443,179 |
| | 744,425 |
| | 138,604 |
| | 35,052 |
| | (1,361,260 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 121,657 |
| | 111,218 |
| | — |
| | 241,936 |
| | 9,061 |
| | — |
| | 113,249 |
| | 111,218 |
| | — |
| | 233,528 |
| Other Intangibles, net | | — |
| | — |
| | 17,228 |
| | 22,797 |
| | — |
| | 40,025 |
| | — |
| | — |
| | 16,037 |
| | 22,883 |
| | — |
| | 38,920 |
| Deferred Tax Asset | | — |
| | 30,316 |
| | — |
| | 90 |
| | (30,406 | ) | | — |
| | — |
| | 30,296 |
| | — |
| | 117 |
| | (30,413 | ) | | — |
| 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 |
| | 12,213 |
| | 22,179 |
| | 6,087 |
| | 2,912 |
| | — |
| | 43,391 |
| | | $ | 2,031,720 |
| | $ | 2,069,372 |
| | $ | 1,762,473 |
| | $ | 1,667,870 |
| | $ | (5,430,388 | ) | | $ | 2,101,047 |
| | $ | 920,617 |
| | $ | 938,909 |
| | $ | 603,575 |
| | $ | 1,588,477 |
| | $ | (2,078,343 | ) | | $ | 1,973,235 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 6,300 |
| | $ | 6,300 |
| | $ | 6,300 |
| | $ | — |
| | $ | (12,600 | ) | | $ | 6,300 |
| | $ | 827 |
| | $ | 590 |
| | $ | 33 |
| | $ | — |
| | $ | — |
| | $ | 1,450 |
| Accounts payable | | 281,983 |
| | 159,781 |
| | 7,802 |
| | 314,367 |
| | (742,056 | ) | | 21,877 |
| | 173,364 |
| | 230,516 |
| | 10,818 |
| | 314,637 |
| | (684,307 | ) | | 45,028 |
| Deferred revenue | | — |
| | — |
| | 1,951 |
| | 35,676 |
| | — |
| | 37,627 |
| | — |
| | 85 |
| | 4,048 |
| | 66,015 |
| | — |
| | 70,148 |
| Accrued interest | | 2,677 |
| | 1,593 |
| | 5,983 |
| | — |
| | — |
| | 10,253 |
| | 2,580 |
| | 1,567 |
| | 5,926 |
| | — |
| | — |
| | 10,073 |
| Accrued taxes | | 5,413 |
| | 29,386 |
| | — |
| | 4,594 |
| | — |
| | 39,393 |
| | 4,757 |
| | 849 |
| | — |
| | 3,209 |
| | (2,363 | ) | | 6,452 |
| Accrued salaries, wages and benefits | | 1 |
| | 27,622 |
| | 2,154 |
| | 9,844 |
| | — |
| | 39,621 |
| | — |
| | 18,183 |
| | 503 |
| | 5,833 |
| | — |
| | 24,519 |
| Self-insurance reserves | | — |
| | 5,545 |
| | 1,896 |
| | 16,647 |
| | — |
| | 24,088 |
| | — |
| | 5,431 |
| | 1,664 |
| | 15,601 |
| | — |
| | 22,696 |
| Other accrued liabilities | | 991 |
| | 4,077 |
| | 694 |
| | 1,856 |
| | — |
| | 7,618 |
| | 280 |
| | 3,086 |
| | 125 |
| | 1,405 |
| | — |
| | 4,896 |
| | | 297,365 |
| | 234,304 |
| | 26,780 |
| | 382,984 |
| | (754,656 | ) | | 186,777 |
| | 181,808 |
| | 260,307 |
| | 23,117 |
| | 406,700 |
| | (686,670 | ) | | 185,262 |
| Deferred Tax Liability | | — |
| | — |
| | 61,143 |
| | 126,866 |
| | (30,406 | ) | | 157,603 |
| | — |
| | — |
| | 56,045 |
| | 131,649 |
| | (30,413 | ) | | 157,281 |
| Derivative Liability | | 18,407 |
| | 13,239 |
| | — |
| | — |
| | — |
| | 31,646 |
| | 16,281 |
| | 11,508 |
| | — |
| | — |
| | — |
| | 27,789 |
| Other Liabilities | | — |
| | 5,573 |
| | — |
| | 3,500 |
| | — |
| | 9,073 |
| | — |
| | 4,358 |
| | — |
| | 3,397 |
| | — |
| | 7,755 |
| Long-Term Debt: | | | | | | | | | | | | | | | | | | | | | | | | | Revolving credit loans | | | 55,000 |
| | — |
| | — |
| | — |
| | — |
| | 55,000 |
| Term debt | | 622,125 |
| | 622,125 |
| | 622,125 |
| | — |
| | (1,244,250 | ) | | 622,125 |
| | 351,840 |
| | 251,371 |
| | 14,189 |
| | — |
| | — |
| | 617,400 |
| Notes | | 901,606 |
| | 901,606 |
| | 901,606 |
| | — |
| | (1,803,212 | ) | | 901,606 |
| | 294,897 |
| | 205,103 |
| | 401,957 |
| | — |
| | — |
| | 901,957 |
| | | 1,523,731 |
| | 1,523,731 |
| | 1,523,731 |
| | — |
| | (3,047,462 | ) | | 1,523,731 |
| | 701,737 |
| | 456,474 |
| | 416,146 |
| | — |
| | — |
| | 1,574,357 |
| | | | | | | | | | | | | | | | | | | | | | | | | | Equity | | 192,217 |
| | 292,525 |
| | 150,819 |
| | 1,154,520 |
| | (1,597,864 | ) | | 192,217 |
| | 20,791 |
| | 206,262 |
| | 108,267 |
| | 1,046,731 |
| | (1,361,260 | ) | | 20,791 |
| | | $ | 2,031,720 |
| | $ | 2,069,372 |
| | $ | 1,762,473 |
| | $ | 1,667,870 |
| | $ | (5,430,388 | ) | | $ | 2,101,047 |
| | $ | 920,617 |
| | $ | 938,909 |
| | $ | 603,575 |
| | $ | 1,588,477 |
| | $ | (2,078,343 | ) | | $ | 1,973,235 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET December 31, 20122013 (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | | | | | | | | | | | | | Cash and cash equivalents | | $ | 25,000 |
| | $ | 444 |
| | $ | 50,173 |
| | $ | 3,213 |
| | $ | — |
| | $ | 78,830 |
| | $ | 75,000 |
| | $ | 4,144 |
| | $ | 35,575 |
| | $ | 3,337 |
| | $ | — |
| | $ | 118,056 |
| Receivables | | 4 |
| | 101,093 |
| | 71,099 |
| | 498,555 |
| | (652,559 | ) | | 18,192 |
| | 6 |
| | 115,972 |
| | 67,829 |
| | 552,633 |
| | (715,107 | ) | | 21,333 |
| Inventories | | — |
| | 1,724 |
| | 2,352 |
| | 23,764 |
| | — |
| | 27,840 |
| | — |
| | 1,968 |
| | 1,898 |
| | 22,214 |
| | — |
| | 26,080 |
| Current deferred tax asset | | — |
| | 3,705 |
| | 816 |
| | 3,663 |
| | — |
| | 8,184 |
| | — |
| | 5,430 |
| | 800 |
| | 3,445 |
| | — |
| | 9,675 |
| Other current assets | | 563 |
| | 17,858 |
| | 530 |
| | 5,490 |
| | (16,381 | ) | | 8,060 |
| | 599 |
| | 4,443 |
| | 14,266 |
| | 7,764 |
| | (15,719 | ) | | 11,353 |
| | | 25,567 |
| | 124,824 |
| | 124,970 |
| | 534,685 |
| | (668,940 | ) | | 141,106 |
| | 75,605 |
| | 131,957 |
| | 120,368 |
| | 589,393 |
| | (730,826 | ) | | 186,497 |
| Property and Equipment (net) | | 439,506 |
| | 1,013 |
| | 268,157 |
| | 835,596 |
| | — |
| | 1,544,272 |
| | 447,724 |
| | 976 |
| | 243,208 |
| | 813,855 |
| | — |
| | 1,505,763 |
| Investment in Park | | 485,136 |
| | 772,183 |
| | 115,401 |
| | 53,790 |
| | (1,426,510 | ) | | — |
| | 514,948 |
| | 796,735 |
| | 142,668 |
| | 63,948 |
| | (1,518,299 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 125,942 |
| | 111,218 |
| | — |
| | 246,221 |
| | 9,061 |
| | — |
| | 117,810 |
| | 111,218 |
| | — |
| | 238,089 |
| Other Intangibles, net | | — |
| | — |
| | 17,835 |
| | 22,817 |
| | — |
| | 40,652 |
| | — |
| | — |
| | 16,683 |
| | 22,788 |
| | — |
| | 39,471 |
| Deferred Tax Asset | | — |
| | 36,443 |
| | — |
| | 90 |
| | (36,533 | ) | | — |
| | — |
| | 31,122 |
| | — |
| | 117 |
| | (31,239 | ) | | — |
| 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 |
| | 25,210 |
| | 10,002 |
| | 6,657 |
| | 2,938 |
| | — |
| | 44,807 |
| | | $ | 1,858,930 |
| | $ | 2,019,420 |
| | $ | 1,777,347 |
| | $ | 1,560,511 |
| | $ | (5,196,343 | ) | | $ | 2,019,865 |
| | $ | 1,072,548 |
| | $ | 970,792 |
| | $ | 647,394 |
| | $ | 1,604,257 |
| | $ | (2,280,364 | ) | | $ | 2,014,627 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | Accounts payable | | $ | 147,264 |
| | $ | 213,279 |
| | $ | 16,101 |
| | $ | 286,649 |
| | $ | (652,559 | ) | | $ | 10,734 |
| | $ | 259,850 |
| | $ | 188,818 |
| | $ | 17,632 |
| | $ | 262,029 |
| | $ | (715,107 | ) | | $ | 13,222 |
| Deferred revenue | | — |
| | — |
| | 4,996 |
| | 34,489 |
| | — |
| | 39,485 |
| | — |
| | — |
| | 2,815 |
| | 41,706 |
| | — |
| | 44,521 |
| Accrued interest | | 98 |
| | 64 |
| | 15,350 |
| | — |
| | — |
| | 15,512 |
| | 4,637 |
| | 3,223 |
| | 15,341 |
| | — |
| | — |
| | 23,201 |
| Accrued taxes | | 4,518 |
| | — |
| | 6,239 |
| | 23,437 |
| | (16,381 | ) | | 17,813 |
| | 4,609 |
| | — |
| | — |
| | 30,591 |
| | (15,719 | ) | | 19,481 |
| Accrued salaries, wages and benefits | | — |
| | 17,932 |
| | 1,214 |
| | 5,690 |
| | — |
| | 24,836 |
| | — |
| | 21,596 |
| | 1,101 |
| | 6,503 |
| | — |
| | 29,200 |
| Self-insurance reserves | | — |
| | 5,528 |
| | 1,754 |
| | 16,624 |
| | — |
| | 23,906 |
| | — |
| | 5,757 |
| | 1,742 |
| | 16,154 |
| | — |
| | 23,653 |
| Other accrued liabilities | | 1,110 |
| | 2,502 |
| | 140 |
| | 2,164 |
| | — |
| | 5,916 |
| | 1,146 |
| | 2,993 |
| | 181 |
| | 1,201 |
| | — |
| | 5,521 |
| | | 152,990 |
| | 239,305 |
| | 45,794 |
| | 369,053 |
| | (668,940 | ) | | 138,202 |
| | 270,242 |
| | 222,387 |
| | 38,812 |
| | 358,184 |
| | (730,826 | ) | | 158,799 |
| Deferred Tax Liability | | — |
| | — |
| | 63,460 |
| | 126,865 |
| | (36,533 | ) | | 153,792 |
| | — |
| | — |
| | 57,704 |
| | 131,648 |
| | (31,239 | ) | | 158,113 |
| Derivative Liability | | 19,309 |
| | 12,951 |
| | — |
| | — |
| | — |
| | 32,260 |
| | 15,610 |
| | 11,052 |
| | — |
| | — |
| | — |
| | 26,662 |
| Other Liabilities | | — |
| | 5,480 |
| | — |
| | 3,500 |
| | — |
| | 8,980 |
| | — |
| | 7,858 |
| | — |
| | 3,432 |
| | — |
| | 11,290 |
| Long-Term Debt: | | | | | | | | | | | | | | | | | | | | | | | | | Term debt | | 1,131,100 |
| | 1,131,100 |
| | 1,131,100 |
| | — |
| | (2,262,200 | ) | | 1,131,100 |
| | 352,668 |
| | 251,961 |
| | 14,221 |
| | — |
| | — |
| | 618,850 |
| Notes | | 401,080 |
| | 401,080 |
| | 401,080 |
| | — |
| | (802,160 | ) | | 401,080 |
| | 294,897 |
| | 205,103 |
| | 401,782 |
| | — |
| | — |
| | 901,782 |
| | | 1,532,180 |
| | 1,532,180 |
| | 1,532,180 |
| | — |
| | (3,064,360 | ) | | 1,532,180 |
| | 647,565 |
| | 457,064 |
| | 416,003 |
| | — |
| | — |
| | 1,520,632 |
| | | | | | | | | | | | | | | | | | | | | | | | | | Equity | | 154,451 |
| | 229,504 |
| | 135,913 |
| | 1,061,093 |
| | (1,426,510 | ) | | 154,451 |
| | 139,131 |
| | 272,431 |
| | 134,875 |
| | 1,110,993 |
| | (1,518,299 | ) | | 139,131 |
| | | $ | 1,858,930 |
| | $ | 2,019,420 |
| | $ | 1,777,347 |
| | $ | 1,560,511 |
| | $ | (5,196,343 | ) | | $ | 2,019,865 |
| | $ | 1,072,548 |
| | $ | 970,792 |
| | $ | 647,394 |
| | $ | 1,604,257 |
| | $ | (2,280,364 | ) | | $ | 2,014,627 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2012 (As restated)March 31, 2013
(In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | | | | | | | | | | | | | Cash and cash equivalents | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| Receivables | | 3 |
| | 108,211 |
| | 64,153 |
| | 478,372 |
| | (621,382 | ) | | 29,357 |
| | 682 |
| | 79,472 |
| | 67,302 |
| | 436,595 |
| | (570,709 | ) | | 13,342 |
| Inventories | | — |
| | 1,584 |
| | 2,742 |
| | 29,267 |
| | — |
| | 33,593 |
| | — |
| | 3,645 |
| | 3,032 |
| | 32,386 |
| | — |
| | 39,063 |
| Current deferred tax asset | | — |
| | 6,239 |
| | 772 |
| | 3,334 |
| | — |
| | 10,345 |
| | — |
| | 31,543 |
| | 816 |
| | 3,663 |
| | — |
| | 36,022 |
| Income tax refundable | | — |
| | — |
| | 10,454 |
| | — |
| | — |
| | 10,454 |
| | Other current assets | | 929 |
| | 2,065 |
| | 674 |
| | 3,775 |
| | — |
| | 7,443 |
| | 207 |
| | 9,630 |
| | 1,618 |
| | 16,260 |
| | — |
| | 27,715 |
| | | 43,932 |
| | 120,362 |
| | 119,073 |
| | 525,309 |
| | (621,382 | ) | | 187,294 |
| | 889 |
| | 125,022 |
| | 76,893 |
| | 494,085 |
| | (570,709 | ) | | 126,180 |
| Property and Equipment (net) | | 425,747 |
| | 1,025 |
| | 272,951 |
| | 856,276 |
| | — |
| | 1,555,999 |
| | 457,484 |
| | 1,003 |
| | 262,941 |
| | 849,424 |
| | — |
| | 1,570,852 |
| Investment in Park | | 572,748 |
| | 786,753 |
| | 115,271 |
| | 60,141 |
| | (1,534,913 | ) | | — |
| | 419,501 |
| | 714,013 |
| | 115,401 |
| | 21,689 |
| | (1,270,604 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 127,384 |
| | 111,218 |
| | — |
| | 247,663 |
| | 9,061 |
| | — |
| | 123,374 |
| | 111,218 |
| | — |
| | 243,653 |
| Other Intangibles, net | | — |
| | — |
| | 18,039 |
| | 22,826 |
| | — |
| | 40,865 |
| | — |
| | — |
| | 17,470 |
| | 22,853 |
| | — |
| | 40,323 |
| Deferred Tax Asset | | — |
| | 39,320 |
| | — |
| | — |
| | (39,320 | ) | | — |
| | — |
| | 34,890 |
| | — |
| | 90 |
| | (34,980 | ) | | — |
| 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 |
| | 14,581 |
| | 10,291 |
| | 7,473 |
| | 2,303 |
| | — |
| | 34,648 |
| | | $ | 1,952,057 |
| | $ | 2,032,761 |
| | $ | 1,778,266 |
| | $ | 1,578,075 |
| | $ | (5,259,167 | ) | | $ | 2,081,992 |
| | $ | 901,516 |
| | $ | 885,219 |
| | $ | 603,552 |
| | $ | 1,501,662 |
| | $ | (1,876,293 | ) | | $ | 2,015,656 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | Current maturities of long-term debt | | | $ | 3,332 |
| | $ | 2,823 |
| | $ | 145 |
| | $ | — |
| | $ | — |
| | $ | 6,300 |
| Accounts payable | | $ | 210,936 |
| | $ | 116,160 |
| | $ | 29,248 |
| | $ | 287,634 |
| | $ | (621,382 | ) | | $ | 22,596 |
| | 103,654 |
| | 215,425 |
| | 3,891 |
| | 285,182 |
| | (570,709 | ) | | 37,443 |
| Deferred revenue | | — |
| | — |
| | 4,544 |
| | 30,138 |
| | — |
| | 34,682 |
| | — |
| | — |
| | 6,679 |
| | 59,505 |
| | — |
| | 66,184 |
| Accrued interest | | 735 |
| | 195 |
| | 6,082 |
| | — |
| | — |
| | 7,012 |
| | 1,444 |
| | 916 |
| | 5,979 |
| | — |
| | — |
| | 8,339 |
| Accrued taxes | | 5,818 |
| | 42,090 |
| | — |
| | 4,496 |
| | — |
| | 52,404 |
| | 4,790 |
| | 390 |
| | 331 |
| | 3,489 |
| | — |
| | 9,000 |
| Accrued salaries, wages and benefits | | — |
| | 24,864 |
| | 2,365 |
| | 8,990 |
| | — |
| | 36,219 |
| | — |
| | 13,483 |
| | 1,095 |
| | 5,604 |
| | — |
| | 20,182 |
| Self-insurance reserves | | — |
| | 4,751 |
| | 1,698 |
| | 16,643 |
| | — |
| | 23,092 |
| | — |
| | 5,324 |
| | 1,696 |
| | 16,537 |
| | — |
| | 23,557 |
| Other accrued liabilities | | 824 |
| | 4,097 |
| | 2,417 |
| | 3,505 |
| | — |
| | 10,843 |
| | 589 |
| | 5,161 |
| | 133 |
| | 1,984 |
| | — |
| | 7,867 |
| | | 218,313 |
| | 192,157 |
| | 46,354 |
| | 351,406 |
| | (621,382 | ) | | 186,848 |
| | 113,809 |
| | 243,522 |
| | 19,949 |
| | 372,301 |
| | (570,709 | ) | | 178,872 |
| Deferred Tax Liability | | — |
| | — |
| | 59,462 |
| | 119,971 |
| | (39,320 | ) | | 140,113 |
| | — |
| | — |
| | 62,700 |
| | 126,867 |
| | (34,980 | ) | | 154,587 |
| Derivative Liability | | 20,801 |
| | 13,907 |
| | — |
| | — |
| | — |
| | 34,708 |
| | 18,594 |
| | 12,437 |
| | — |
| | — |
| | — |
| | 31,031 |
| Other Liabilities | | — |
| | 3,880 |
| | — |
| | 3,500 |
| | — |
| | 7,380 |
| | — |
| | 4,185 |
| | — |
| | 3,500 |
| | — |
| | 7,685 |
| Long-Term Debt: | | | | | | | | | | | | | | | | | | | | | | | | | Revolving credit loans | | | 96,000 |
| | — |
| | — |
| | — |
| | — |
| | 96,000 |
| Term debt | | 1,131,100 |
| | 1,131,100 |
| | 1,131,100 |
| | — |
| | (2,262,200 | ) | | 1,131,100 |
| | 355,690 |
| | 253,677 |
| | 14,333 |
| | — |
| | — |
| | 623,700 |
| Notes | | 400,676 |
| | 400,676 |
| | 400,676 |
| | — |
| | (801,352 | ) | | 400,676 |
| | 294,897 |
| | 205,103 |
| | 401,255 |
| | — |
| | — |
| | 901,255 |
| | | 1,531,776 |
| | 1,531,776 |
| | 1,531,776 |
| | — |
| | (3,063,552 | ) | | 1,531,776 |
| | 746,587 |
| | 458,780 |
| | 415,588 |
| | — |
| | — |
| | 1,620,955 |
| | | | | | | | | | | | | | | | | | | | | | | | | | Equity | | 181,167 |
| | 291,041 |
| | 140,674 |
| | 1,103,198 |
| | (1,534,913 | ) | | 181,167 |
| | 22,526 |
| | 166,295 |
| | 105,315 |
| | 998,994 |
| | (1,270,604 | ) | | 22,526 |
| | | $ | 1,952,057 |
| | $ | 2,032,761 |
| | $ | 1,778,266 |
| | $ | 1,578,075 |
| | $ | (5,259,167 | ) | | $ | 2,081,992 |
| | $ | 901,516 |
| | $ | 885,219 |
| | $ | 603,552 |
| | $ | 1,501,662 |
| | $ | (1,876,293 | ) | | $ | 2,015,656 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Three Months Ended September 29, 2013 March 30, 2014 (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 | | $ | 83,285 |
| | $ | 161,866 |
| | $ | 82,265 |
| | $ | 509,467 |
| | $ | (244,807 | ) | | $ | 592,076 |
| | $ | 4,755 |
| | $ | 8,679 |
| | $ | 151 |
| | $ | 40,312 |
| | $ | (13,431 | ) | | $ | 40,466 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,082 |
| | 39,761 |
| | — |
| | 45,843 |
| | Cost of food, merchandise, and games revenues | | | — |
| | — |
| | 1 |
| | 4,984 |
| | — |
| | 4,985 |
| Operating expenses | | 1,669 |
| | 76,468 |
| | 19,042 |
| | 318,022 |
| | (244,807 | ) | | 170,394 |
| | 1,348 |
| | 22,462 |
| | 6,937 |
| | 63,034 |
| | (13,431 | ) | | 80,350 |
| Selling, general and administrative | | 1,796 |
| | 38,083 |
| | 4,781 |
| | 14,067 |
| | — |
| | 58,727 |
| | 1,396 |
| | 16,672 |
| | 873 |
| | 2,463 |
| | — |
| | 21,404 |
| Depreciation and amortization | | 18,306 |
| | 10 |
| | 8,979 |
| | 30,200 |
| | — |
| | 57,495 |
| | 474 |
| | 9 |
| | — |
| | 3,824 |
| | — |
| | 4,307 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Loss on impairment / retirement of fixed assets, net | | 368 |
| | — |
| | 1 |
| | 1,268 |
| | — |
| | 1,637 |
| | 249 |
| | — |
| | — |
| | 748 |
| | — |
| | 997 |
| | | 22,139 |
| | 114,561 |
| | 38,885 |
| | 394,575 |
| | (244,807 | ) | | 325,353 |
| | 3,467 |
| | 39,143 |
| | 7,811 |
| | 75,053 |
| | (13,431 | ) | | 112,043 |
| Operating income | | 61,146 |
| | 47,305 |
| | 43,380 |
| | 114,892 |
| | — |
| | 266,723 |
| | 1,288 |
| | (30,464 | ) | | (7,660 | ) | | (34,741 | ) | | — |
| | (71,577 | ) | Interest expense (income), net | | 10,858 |
| | 6,901 |
| | 9,731 |
| | (1,978 | ) | | — |
| | 25,512 |
| | 10,199 |
| | 7,011 |
| | 9,468 |
| | (2,019 | ) | | — |
| | 24,659 |
| Net effect of swaps | | 810 |
| | 567 |
| | — |
| | — |
| | — |
| | 1,377 |
| | 194 |
| | 177 |
| | — |
| | — |
| | — |
| | 371 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | (8,615 | ) | | — |
| | — |
| | (8,615 | ) | | — |
| | — |
| | 17,184 |
| | — |
| | — |
| | 17,184 |
| Other (income) expense | | 188 |
| | (2,129 | ) | | 584 |
| | 1,357 |
| | — |
| | — |
| | 187 |
| | (3,274 | ) | | 374 |
| | 2,713 |
| | — |
| | — |
| 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 |
| | Loss from investment in affiliates | | | 73,588 |
| | 47,143 |
| | 4,064 |
| | 28,244 |
| | (153,039 | ) | | — |
| Loss before taxes | | | (82,880 | ) | | (81,521 | ) | | (38,750 | ) | | (63,679 | ) | | 153,039 |
| | (113,791 | ) | Provision (benefit) for taxes | | | 660 |
| | (10,422 | ) | | (10,506 | ) | | (9,983 | ) | | — |
| | (30,251 | ) | Net loss | | | $ | (83,540 | ) | | $ | (71,099 | ) | | $ | (28,244 | ) | | $ | (53,696 | ) | | $ | 153,039 |
| | $ | (83,540 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (699 | ) | | — |
| | (699 | ) | | — |
| | 699 |
| | (699 | ) | | 1,621 |
| | — |
| | 1,621 |
| | — |
| | (1,621 | ) | | 1,621 |
| Unrealized income (loss) on cash flow hedging derivatives | | (2,761 | ) | | (1,202 | ) | | — |
| | — |
| | 1,202 |
| | (2,761 | ) | | (650 | ) | | (173 | ) | | — |
| | — |
| | 173 |
| | (650 | ) | Other comprehensive income (loss), (net of tax) | | (3,460 | ) | | (1,202 | ) | | (699 | ) | | — |
| | 1,901 |
| | (3,460 | ) | | 971 |
| | (173 | ) | | 1,621 |
| | — |
| | (1,448 | ) | | 971 |
| Total Comprehensive Income | | $ | 186,964 |
| | $ | 104,941 |
| | $ | 40,197 |
| | $ | 132,239 |
| | $ | (277,377 | ) | | $ | 186,964 |
| | $ | (82,569 | ) | | $ | (71,272 | ) | | $ | (26,623 | ) | | $ | (53,696 | ) | | $ | 151,591 |
| | $ | (82,569 | ) |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 2012 (As restated)March 31, 2013 (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | Net revenues | | $ | 79,663 |
| | $ | 141,134 |
| | $ | 88,334 |
| | $ | 464,902 |
| | $ | (220,588 | ) | | $ | 553,445 |
| | $ | 4,317 |
| | $ | 8,371 |
| | $ | 289 |
| | $ | 41,510 |
| | $ | (12,688 | ) | | $ | 41,799 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,447 |
| | 40,906 |
| | — |
| | 47,353 |
| | Cost of food, merchandise, and games revenues | | | — |
| | — |
| | — |
| | 5,037 |
| | — |
| | 5,037 |
| Operating expenses | | 1,368 |
| | 74,191 |
| | 18,736 |
| | 289,604 |
| | (220,588 | ) | | 163,311 |
| | 1,423 |
| | 21,606 |
| | 5,941 |
| | 60,375 |
| | (12,688 | ) | | 76,657 |
| Selling, general and administrative | | 1,853 |
| | 32,627 |
| | 4,822 |
| | 13,691 |
| | — |
| | 52,993 |
| | 1,292 |
| | 16,613 |
| | 711 |
| | 2,423 |
| | — |
| | 21,039 |
| Depreciation and amortization | | 19,209 |
| | 10 |
| | 9,430 |
| | 31,574 |
| | — |
| | 60,223 |
| | 475 |
| | 9 |
| | — |
| | 4,302 |
| | — |
| | 4,786 |
| Loss on impairment / retirement of fixed assets, net | | 25,000 |
| | — |
| | — |
| | — |
| | — |
| | 25,000 |
| | 36 |
| | — |
| | 478 |
| | 86 |
| | — |
| | 600 |
| | | 47,430 |
| | 106,828 |
| | 39,435 |
| | 375,775 |
| | (220,588 | ) | | 348,880 |
| | 3,226 |
| | 38,228 |
| | 7,130 |
| | 72,223 |
| | (12,688 | ) | | 108,119 |
| Operating income | | 32,233 |
| | 34,306 |
| | 48,899 |
| | 89,127 |
| | — |
| | 204,565 |
| | 1,091 |
| | (29,857 | ) | | (6,841 | ) | | (30,713 | ) | | — |
| | (66,320 | ) | Interest expense, net | | 12,213 |
| | 7,258 |
| | 9,897 |
| | (2,518 | ) | | — |
| | 26,850 |
| | 10,512 |
| | 7,677 |
| | 9,764 |
| | (2,230 | ) | | — |
| | 25,723 |
| Net effect of swaps | | (104 | ) | | (71 | ) | | — |
| | — |
| | — |
| | (175 | ) | | 5,635 |
| | 3,576 |
| | — |
| | — |
| | — |
| | 9,211 |
| Loss on early debt extinguishment | | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | (15,035 | ) | | — |
| | — |
| | (15,035 | ) | | — |
| | — |
| | 8,958 |
| | — |
| | — |
| | 8,958 |
| Other (income) expense | | 186 |
| | (2,043 | ) | | 512 |
| | 1,345 |
| | — |
| | — |
| | 188 |
| | (2,388 | ) | | 800 |
| | 1,400 |
| | — |
| | — |
| 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 |
| | Loss from investment in affiliates | | | 72,096 |
| | 35,640 |
| | 3,520 |
| | 21,227 |
| | (132,483 | ) | | — |
| Loss before taxes | | | (108,515 | ) | | (87,143 | ) | | (30,500 | ) | | (51,110 | ) | | 132,483 |
| | (144,785 | ) | Provision (benefit) for taxes | | | 611 |
| | (17,665 | ) | | (9,254 | ) | | (9,351 | ) | | — |
| | (35,659 | ) | Net loss | | | $ | (109,126 | ) | | $ | (69,478 | ) | | $ | (21,246 | ) | | $ | (41,759 | ) | | $ | 132,483 |
| | $ | (109,126 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (563 | ) | | — |
| | (563 | ) | | — |
| | 563 |
| | (563 | ) | | 301 |
| | — |
| | 301 |
| | — |
| | (301 | ) | | 301 |
| Unrealized income (loss) on cash flow hedging derivatives | | (234 | ) | | 48 |
| | — |
| | — |
| | (48 | ) | | (234 | ) | | 8,885 |
| | 2,535 |
| | — |
| | — |
| | (2,535 | ) | | 8,885 |
| Other comprehensive income (loss), (net of tax) | | (797 | ) | | 48 |
| | (563 | ) | | — |
| | 515 |
| | (797 | ) | | 9,186 |
| | 2,535 |
| | 301 |
| | — |
| | (2,836 | ) | | 9,186 |
| Total Comprehensive Income | | $ | 140,216 |
| | $ | 99,358 |
| | $ | 47,136 |
| | $ | 115,261 |
| | $ | (261,755 | ) | | $ | 140,216 |
| | $ | (99,940 | ) | | $ | (66,943 | ) | | $ | (20,945 | ) | | $ | (41,759 | ) | | $ | 129,647 |
| | $ | (99,940 | ) |
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended 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 | | $ | 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 September 29, 2013March 30, 2014 (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 | | $ | 152,379 |
| | $ | 292,510 |
| | $ | 127,485 |
| | $ | 996,647 |
| | $ | (444,321 | ) | | $ | 1,124,700 |
| | $ | 152,907 |
| | $ | 296,385 |
| | $ | 127,554 |
| | $ | 1,005,271 |
| | $ | (448,878 | ) | | $ | 1,133,239 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 9,404 |
| | 83,651 |
| | — |
| | 93,055 |
| | Cost of food, merchandise, and games revenues | | | — |
| | — |
| | 9,323 |
| | 82,397 |
| | — |
| | 91,720 |
| Operating expenses | | 5,739 |
| | 179,465 |
| | 48,104 |
| | 669,919 |
| | (444,321 | ) | | 458,906 |
| | 5,928 |
| | 184,460 |
| | 48,766 |
| | 685,761 |
| | (448,878 | ) | | 476,037 |
| Selling, general and administrative | | 5,964 |
| | 97,351 |
| | 10,618 |
| | 34,423 |
| | — |
| | 148,356 |
| | 5,821 |
| | 100,884 |
| | 11,146 |
| | 34,926 |
| | — |
| | 152,777 |
| Depreciation and amortization | | 35,896 |
| | 40 |
| | 17,581 |
| | 68,891 |
| | — |
| | 122,408 |
| | 36,806 |
| | 37 |
| | 17,333 |
| | 67,832 |
| | — |
| | 122,008 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (15,368 | ) | | — |
| | (15,368 | ) | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | Loss on impairment / retirement of fixed assets, net | | 1,318 |
| | — |
| | 476 |
| | 6,578 |
| | — |
| | 8,372 |
| | 637 |
| | — |
| | 1 |
| | 2,298 |
| | — |
| | 2,936 |
| | | 48,917 |
| | 276,856 |
| | 86,183 |
| | 848,094 |
| | (444,321 | ) | | 815,729 |
| | 49,192 |
| | 285,381 |
| | 86,569 |
| | 864,471 |
| | (448,878 | ) | | 836,735 |
| Operating income | | 103,462 |
| | 15,654 |
| | 41,302 |
| | 148,553 |
| | — |
| | 308,971 |
| | 103,715 |
| | 11,004 |
| | 40,985 |
| | 140,800 |
| | — |
| | 296,504 |
| Interest (income) expense, net | | 43,667 |
| | 29,195 |
| | 39,310 |
| | (8,465 | ) | | — |
| | 103,707 |
| | 42,317 |
| | 28,209 |
| | 39,080 |
| | (7,753 | ) | | — |
| | 101,853 |
| Net effect of swaps | | 4,964 |
| | 3,177 |
| | — |
| | — |
| | — |
| | 8,141 |
| | (1,251 | ) | | (706 | ) | | — |
| | — |
| | — |
| | (1,957 | ) | Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 20,157 |
| | — |
| | — |
| | 20,157 |
| | — |
| | — |
| | 37,167 |
| | — |
| | — |
| | 37,167 |
| Other (income) expense | | 751 |
| | (9,033 | ) | | 2,766 |
| | 5,516 |
| | — |
| | — |
| | 749 |
| | (12,143 | ) | | 3,253 |
| | 8,141 |
| | — |
| | — |
| Income from investment in affiliates | | (95,234 | ) | | (51,316 | ) | | (18,019 | ) | | (8,239 | ) | | 172,808 |
| | — |
| | Income (loss) from investment in affiliates | | | (82,065 | ) | | (26,017 | ) | | (16,894 | ) | | 9,494 |
| | 115,482 |
| | — |
| Income (loss) before taxes | | 128,139 |
| | 30,850 |
| | (3,529 | ) | | 159,741 |
| | (172,808 | ) | | 142,393 |
| | 143,965 |
| | 21,661 |
| | (21,621 | ) | | 130,918 |
| | (115,482 | ) | | 159,441 |
| Provision (benefit) for taxes | | 9,776 |
| | (8,530 | ) | | (11,708 | ) | | 34,492 |
| | — |
| | 24,030 |
| | 10,175 |
| | (4,890 | ) | | (12,108 | ) | | 32,474 |
| | — |
| | 25,651 |
| Net income | | $ | 118,363 |
| | $ | 39,380 |
| | $ | 8,179 |
| | $ | 125,249 |
| | $ | (172,808 | ) | | $ | 118,363 |
| | Net income (loss) | | | $ | 133,790 |
| | $ | 26,551 |
| | $ | (9,513 | ) | | $ | 98,444 |
| | $ | (115,482 | ) | | $ | 133,790 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 2,814 |
| | — |
| | 2,814 |
| | — |
| | (2,814 | ) | | 2,814 |
| | 4,076 |
| | — |
| | 4,076 |
| | — |
| | (4,076 | ) | | 4,076 |
| Unrealized income on cash flow hedging derivatives | | 9,740 |
| | 2,385 |
| | — |
| | — |
| | (2,385 | ) | | 9,740 |
| | 1,201 |
| | 140 |
| | — |
| | — |
| | (140 | ) | | 1,201 |
| Other comprehensive income, (net of tax) | | 12,554 |
| | 2,385 |
| | 2,814 |
| | — |
| | (5,199 | ) | | 12,554 |
| | 5,277 |
| | 140 |
| | 4,076 |
| | — |
| | (4,216 | ) | | 5,277 |
| Total Comprehensive Income | | $ | 130,917 |
| | $ | 41,765 |
| | $ | 10,993 |
| | $ | 125,249 |
| | $ | (178,007 | ) | | $ | 130,917 |
| | $ | 139,067 |
| | $ | 26,691 |
| | $ | (5,437 | ) | | $ | 98,444 |
| | $ | (119,698 | ) | | $ | 139,067 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Twelve Months Ended September 30, 2012 (As restated)March 31, 2013 (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | Net revenues | | $ | 147,733 |
| | $ | 261,878 |
| | $ | 142,250 |
| | $ | 941,465 |
| | $ | (409,232 | ) | | $ | 1,084,094 |
| | $ | 148,576 |
| | $ | 263,930 |
| | $ | 140,441 |
| | $ | 941,246 |
| | $ | (412,138 | ) | | $ | 1,082,055 |
| Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,531 |
| | 85,471 |
| | — |
| | 96,002 |
| | Cost of food, merchandise, and games revenues | | | — |
| | — |
| | 10,316 |
| | 85,682 |
| | — |
| | 95,998 |
| Operating expenses | | 5,452 |
| | 180,665 |
| | 47,134 |
| | 636,106 |
| | (409,232 | ) | | 460,125 |
| | 5,468 |
| | 177,526 |
| | 48,147 |
| | 637,772 |
| | (412,138 | ) | | 456,775 |
| Selling, general and administrative | | 6,865 |
| | 90,892 |
| | 11,650 |
| | 36,381 |
| | — |
| | 145,788 |
| | 6,455 |
| | 89,532 |
| | 11,086 |
| | 34,293 |
| | — |
| | 141,366 |
| Depreciation and amortization | | 37,698 |
| | 41 |
| | 18,300 |
| | 71,152 |
| | — |
| | 127,191 |
| | 37,439 |
| | 40 |
| | 18,199 |
| | 71,335 |
| | — |
| | 127,013 |
| (Gain) on sale of other assets | | | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (6,625 | ) | Loss (gain) on impairment / retirement of fixed assets, net | | 24,188 |
| | — |
| | (62 | ) | | 10,383 |
| | — |
| | 34,509 |
| | 25,089 |
| | — |
| | 474 |
| | 5,281 |
| | — |
| | 30,844 |
| | | 74,203 |
| | 271,598 |
| | 87,553 |
| | 839,493 |
| | (409,232 | ) | | 863,615 |
| | 74,451 |
| | 267,098 |
| | 88,222 |
| | 827,738 |
| | (412,138 | ) | | 845,371 |
| Operating income (loss) | | 73,530 |
| | (9,720 | ) | | 54,697 |
| | 101,972 |
| | — |
| | 220,479 |
| | 74,125 |
| | (3,168 | ) | | 52,219 |
| | 113,508 |
| | — |
| | 236,684 |
| Interest expense, net | | 50,007 |
| | 28,592 |
| | 44,583 |
| | (6,813 | ) | | — |
| | 116,369 |
| | 47,879 |
| | 30,390 |
| | 40,231 |
| | (9,013 | ) | | — |
| | 109,487 |
| Net effect of swaps | | (5,019 | ) | | (1 | ) | | (5,910 | ) | | — |
| | — |
| | (10,930 | ) | | 5,324 |
| | 3,365 |
| | — |
| | — |
| | — |
| | 8,689 |
| Loss on early debt extinguishment | | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | (18,721 | ) | | — |
| | — |
| | (18,721 | ) | | — |
| | — |
| | 8,152 |
| | — |
| | — |
| | 8,152 |
| Other (income) expense | | 749 |
| | (10,205 | ) | | 1,498 |
| | 7,958 |
| | — |
| | — |
| | 750 |
| | (8,860 | ) | | 2,623 |
| | 5,487 |
| | — |
| | — |
| Income from investment in affiliates | | (88,216 | ) | | (50,693 | ) | | (9,456 | ) | | (21,713 | ) | | 170,078 |
| | — |
| | Income (loss) from investment in affiliates | | | (68,417 | ) | | (53,593 | ) | | (14,307 | ) | | (18,503 | ) | | 154,820 |
| | — |
| Income before taxes | | 116,009 |
| | 22,587 |
| | 42,703 |
| | 122,540 |
| | (170,078 | ) | | 133,761 |
| | 67,414 |
| | 12,749 |
| | 14,903 |
| | 135,537 |
| | (154,820 | ) | | 75,783 |
| Provision (benefit) for taxes | | 10,106 |
| | (29,298 | ) | | 20,942 |
| | 26,108 |
| | — |
| | 27,858 |
| | 9,269 |
| | (15,849 | ) | | (3,507 | ) | | 27,725 |
| | — |
| | 17,638 |
| Net income | | $ | 105,903 |
| | $ | 51,885 |
| | $ | 21,761 |
| | $ | 96,432 |
| | $ | (170,078 | ) | | $ | 105,903 |
| | $ | 58,145 |
| | $ | 28,598 |
| | $ | 18,410 |
| | $ | 107,812 |
| | $ | (154,820 | ) | | $ | 58,145 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | (2,672 | ) | | — |
| | (2,672 | ) | | — |
| | 2,672 |
| | (2,672 | ) | | 1,839 |
| | — |
| | 1,839 |
| | — |
| | (1,839 | ) | | 1,839 |
| Unrealized income (loss) on cash flow hedging derivatives | | (397 | ) | | (109 | ) | | 21 |
| | — |
| | 88 |
| | (397 | ) | | 8,685 |
| | 2,551 |
| | — |
| | — |
| | (2,551 | ) | | 8,685 |
| Other comprehensive income (loss), (net of tax) | | (3,069 | ) | | (109 | ) | | (2,651 | ) | | — |
| | 2,760 |
| | (3,069 | ) | | 10,524 |
| | 2,551 |
| | 1,839 |
| | — |
| | (4,390 | ) | | 10,524 |
| Total Comprehensive Income | | $ | 102,834 |
| | $ | 51,776 |
| | $ | 19,110 |
| | $ | 96,432 |
| | $ | (167,318 | ) | | $ | 102,834 |
| | $ | 68,669 |
| | $ | 31,149 |
| | $ | 20,249 |
| | $ | 107,812 |
| | $ | (159,210 | ) | | $ | 68,669 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended September 29, 2013March 30, 2014 (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 OPERATING ACTIVITIES | | $ | 337,821 |
| | $ | 60,434 |
| | $ | 21,615 |
| | $ | 66,757 |
| | $ | (169,672 | ) | | $ | 316,955 |
| | $ | (73,627 | ) | | $ | (3,001 | ) | | $ | (26,042 | ) | | $ | 20,317 |
| | $ | (903 | ) | | $ | (83,256 | ) | 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 | ) | | (16,379 | ) | | (4 | ) | | (5,077 | ) | | (18,882 | ) | | — |
| | (40,342 | ) | Net cash from investing activities | | (106,673 | ) | | (52,172 | ) | | (35,096 | ) | | (57,968 | ) | | 169,672 |
| | (82,237 | ) | | (16,379 | ) | | (4 | ) | | (5,077 | ) | | (18,882 | ) | | — |
| | (40,342 | ) | 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 |
| | Net borrowings on revolving credit loans | | | 55,000 |
| | — |
| | — |
| | — |
| | — |
| | 55,000 |
| Distributions paid | | | (39,994 | ) | | — |
| | — |
| | — |
| | 903 |
| | (39,091 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | (148 | ) | | — |
| | — |
| | — |
| | (148 | ) | | — |
| | (568 | ) | | — |
| | — |
| | — |
| | (568 | ) | Net cash (for) financing activities | | (123,148 | ) | | (6,413 | ) | | (489 | ) | | — |
| | — |
| | (130,050 | ) | | 15,006 |
| | (568 | ) | | — |
| | — |
| | 903 |
| | 15,341 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (16 | ) | | — |
| | — |
| | (16 | ) | | — |
| | — |
| | (932 | ) | | — |
| | — |
| | (932 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase (decrease) for the period | | 108,000 |
| | 1,849 |
| | (13,986 | ) | | 8,789 |
| | — |
| | 104,652 |
| | (75,000 | ) | | (3,573 | ) | | (32,051 | ) | | 1,435 |
| | — |
| | (109,189 | ) | Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| | 75,000 |
| | 4,144 |
| | 35,575 |
| | 3,337 |
| | — |
| | 118,056 |
| Balance, end of period | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | $ | — |
| | $ | 571 |
| | $ | 3,524 |
| | $ | 4,772 |
| | $ | — |
| | $ | 8,867 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended September 30, 2012 (As restated)March 31, 2013 (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 209,022 |
| | $ | 49,092 |
| | $ | 9,484 |
| | $ | 156,240 |
| | $ | (147,094 | ) | | $ | 276,744 |
| | $ | (52,034 | ) | | $ | 8,508 |
| | $ | (44,472 | ) | | $ | 19,331 |
| | $ | — |
| | $ | (68,667 | ) | 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 | ) | | (17,866 | ) | | — |
| | (600 | ) | | (17,363 | ) | | — |
| | (35,829 | ) | Net cash (for) investing activities | | (84,879 | ) | | (70,677 | ) | | (10,869 | ) | | (55,306 | ) | | 147,094 |
| | (74,637 | ) | | (17,866 | ) | | — |
| | (600 | ) | | (17,363 | ) | | — |
| | (35,829 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | | Net borrowings on revolving credit loans | | | 96,000 |
| | — |
| | — |
| | — |
| | — |
| | 96,000 |
| Term debt borrowings | | | 359,022 |
| | 256,500 |
| — |
| 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | | (14,763 | ) | | (8,538 | ) | | (190 | ) | | — |
| | — |
| | (23,491 | ) | Term debt payments, including early termination penalties | | (14,468 | ) | | (10,212 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | | (654,568 | ) | | (462,054 | ) | | (14,478 | ) | | — |
| | — |
| | (1,131,100 | ) | Intercompany (payments) receipts | | — |
| | 93,845 |
| | — |
| | (93,845 | ) | | — |
| | — |
| | Distributions (paid) received | | (66,675 | ) | | 110 |
| | — |
| | — |
| | — |
| | (66,565 | ) | | Capital (contribution) infusion | | — |
| | (60,000 | ) | — |
| 60,000 |
| | — |
| | — |
| | — |
| | Distributions paid | | | (35,688 | ) | | 868 |
| | — |
| | — |
| | — |
| | (34,820 | ) | Exercise of limited partnership unit options | | — |
| | 47 |
| | — |
| | — |
| | — |
| | 47 |
| | — |
| | 28 |
| | — |
| | — |
| | — |
| | 28 |
| Excess tax benefit from unit-based compensation | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | | Excess tax benefit from unit-based compensation expense | | | — |
| | (127 | ) | | — |
| | — |
| | — |
| | (127 | ) | Net cash from (for) financing activities | | (81,143 | ) | | 23,336 |
| | 9,230 |
| | (93,845 | ) | | — |
| | (142,422 | ) | | 44,900 |
| | (8,220 | ) | | (190 | ) | | — |
| | — |
| | 36,490 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 893 |
| | — |
| | — |
| | 893 |
| | — |
| | — |
| | (786 | ) | | — |
| | — |
| | (786 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase for the period | | 43,000 |
| | 1,751 |
| | 8,738 |
| | 7,089 |
| | — |
| | 60,578 |
| | (25,000 | ) | | 288 |
| | (46,048 | ) | | 1,968 |
| | — |
| | (68,792 | ) | Balance, beginning of period | | — |
| | 512 |
| | 31,540 |
| | 3,472 |
| | — |
| | 35,524 |
| | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 29, 2013March 30, 2014 (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 OPERATING ACTIVITIES | | $ | 258,843 |
| | $ | 42,367 |
| | $ | 32,927 |
| | $ | 52,457 |
| | $ | (61,746 | ) | | $ | 324,848 |
| | $ | 253,410 |
| | $ | 3,318 |
| | $ | 15,737 |
| | $ | 40,148 |
| | $ | (3,531 | ) | | $ | 309,082 |
| 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 |
| | — |
| | — |
| | — |
| | 15,297 |
| | — |
| | 15,297 |
| Capital expenditures | | (47,938 | ) | | (1 | ) | | (5,532 | ) | | (63,290 | ) | | — |
| | (116,761 | ) | | (54,767 | ) | | (4 | ) | | (14,201 | ) | | (55,854 | ) | | — |
| | (124,826 | ) | Net cash (for) investing activities | | (23,431 | ) | | (37,603 | ) | | (36,275 | ) | | (51,016 | ) | | 61,746 |
| | (86,579 | ) | | (54,767 | ) | | (4 | ) | | (14,201 | ) | | (40,557 | ) | | — |
| | (109,529 | ) | 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 |
| | Net borrowings on revolving credit loans | | | (41,000 | ) | | — |
| | — |
| | — |
| | — |
| | (41,000 | ) | Term debt payments, including early termination penalties | | (655,723 | ) | | (462,438 | ) | | (14,514 | ) | | — |
| | — |
| | (1,132,675 | ) | | (6,612 | ) | | (4,281 | ) | | (257 | ) | | — |
| | — |
| | (11,150 | ) | Distributions (paid) received | | (129,277 | ) | | 2,571 |
| | — |
| | — |
| | — |
| | (126,706 | ) | | Distributions paid | | | (151,259 | ) | | — |
| | — |
| | — |
| | 3,531 |
| | (147,728 | ) | Exercise of limited partnership unit options | | — |
| | 43 |
| | — |
| | — |
| | — |
| | 43 |
| | — |
| | 24 |
| | — |
| | — |
| | — |
| | 24 |
| Payment of debt issuance costs | | (14,331 | ) | | (8,028 | ) | | (453 | ) | | — |
| | — |
| | (22,812 | ) | | 228 |
| | 368 |
| | (354 | ) | | — |
| | — |
| | 242 |
| Excess tax benefit from unit-based compensation expense | | — |
| | 1,515 |
| | — |
| | — |
| | — |
| | 1,515 |
| | — |
| | 414 |
| | — |
| | — |
| | — |
| | 414 |
| Net cash (for) financing activities | | (145,412 | ) | | (4,734 | ) | | (489 | ) | | — |
| | — |
| | (150,635 | ) | | (198,643 | ) | | (3,475 | ) | | (611 | ) | | — |
| | 3,531 |
| | (199,198 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (254 | ) | | — |
| | — |
| | (254 | ) | | — |
| | — |
| | (1,526 | ) | | — |
| | — |
| | (1,526 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase (decrease) for the period | | 90,000 |
| | 30 |
| | (4,091 | ) | | 1,441 |
| | — |
| | 87,380 |
| | — |
| | (161 | ) | | (601 | ) | | (409 | ) | | — |
| | (1,171 | ) | Balance, beginning of period | | 43,000 |
| | 2,263 |
| | 40,278 |
| | 10,561 |
| | — |
| | 96,102 |
| | — |
| | 732 |
| | 4,125 |
| | 5,181 |
| | — |
| | 10,038 |
| Balance, end of period | | $ | 133,000 |
| | $ | 2,293 |
| | $ | 36,187 |
| | $ | 12,002 |
| | $ | — |
| | $ | 183,482 |
| | $ | — |
| | $ | 571 |
| | $ | 3,524 |
| | $ | 4,772 |
| | $ | — |
| | $ | 8,867 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 30, 2012 (As restated)March 31, 2013 (In thousands) | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 181,718 |
| | $ | (157,023 | ) | | $ | 8,795 |
| | $ | 314,835 |
| | $ | (75,771 | ) | | $ | 272,554 |
| | $ | 231,264 |
| | $ | (87,117 | ) | | $ | 14,067 |
| | $ | 139,733 |
| | $ | — |
| | $ | 297,947 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Investment in joint ventures and affiliates | | (35,830 | ) | | (42,342 | ) | | 8,488 |
| | (6,087 | ) | | 75,771 |
| | — |
| | Intercompany term debt receipts | | | — |
| | 104,165 |
| | — |
| | — |
| | (104,165 | ) | | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | — |
| | — |
| | 1,173 |
| | 1,173 |
| | — |
| | — |
| | 14,885 |
| | — |
| | 16,058 |
| Capital expenditures | | (33,025 | ) | | (8 | ) | | (23,050 | ) | | (37,037 | ) | | — |
| | (93,120 | ) | | (43,156 | ) | | (8 | ) | | (8,023 | ) | | (52,075 | ) | | — |
| | (103,262 | ) | Net cash (for) investing activities | | (67,682 | ) | | (42,350 | ) | | (14,562 | ) | | (43,124 | ) | | 75,771 |
| | (91,947 | ) | | (41,983 | ) | | 104,157 |
| | (8,023 | ) | | (37,190 | ) | | (104,165 | ) | | (87,204 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | | Intercompany term debt (payments) receipts | | — |
| | 269,500 |
| | — |
| | (269,500 | ) | | — |
| | — |
| | Net borrowings on revolving credit loans | | | (57,000 | ) | | — |
| | (2,004 | ) | | — |
| | — |
| | (59,004 | ) | Term debt borrowings | | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Intercompany term debt payments | | | — |
| | — |
| | — |
| | (104,165 | ) | | 104,165 |
| | — |
| Term debt payments, including early termination penalties | | (14,467 | ) | | (10,213 | ) | | (320 | ) | | — |
| | — |
| | (25,000 | ) | | (669,035 | ) | | (472,267 | ) | | (14,798 | ) | | — |
| | — |
| | (1,156,100 | ) | Derivative settlement | | — |
| | — |
| | (50,450 | ) | | — |
| | — |
| | (50,450 | ) | | Distributions (paid) received | | (105,569 | ) | | 261 |
| | — |
| | — |
| | — |
| | (105,308 | ) | | Capital (contribution) infusion | | — |
| | (60,000 | ) | | 60,000 |
| | — |
| | — |
| | — |
| | Distributions paid | | | (102,402 | ) | | 920 |
| | — |
| | — |
| | — |
| | (101,482 | ) | Payment of debt issuance costs | | — |
| | — |
| | (723 | ) | | — |
| | — |
| | (723 | ) | | (14,763 | ) | | (8,537 | ) | | (191 | ) | | — |
| | — |
| | (23,491 | ) | Exercise of limited partnership unit options | | — |
| | 53 |
| | — |
| | — |
| | — |
| | 53 |
| | — |
| | 57 |
| | — |
| | — |
| | — |
| | 57 |
| Excess tax benefit from unit-based compensation | | — |
| | (454 | ) | | — |
| | — |
| | — |
| | (454 | ) | | — |
| | 1,519 |
| | — |
| | — |
| | — |
| | 1,519 |
| Net cash from (for) financing activities | | (120,036 | ) | | 199,147 |
| | 8,507 |
| | (269,500 | ) | | — |
| | (181,882 | ) | | (189,281 | ) | | (16,705 | ) | | (2,515 | ) | | (104,165 | ) | | 104,165 |
| | (208,501 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 1,065 |
| | — |
| | — |
| | 1,065 |
| | — |
| | — |
| | 477 |
| | — |
| | — |
| | 477 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | | Net increase (decrease) for the period | | (6,000 | ) | | (226 | ) | | 3,805 |
| | 2,211 |
| | — |
| | (210 | ) | | — |
| | 335 |
| | 4,006 |
| | (1,622 | ) | | — |
| | 2,719 |
| Balance, beginning of period | | 49,000 |
| | 2,489 |
| | 36,473 |
| | 8,350 |
| | — |
| | 96,312 |
| | — |
| | 397 |
| | 119 |
| | 6,803 |
| | — |
| | 7,319 |
| Balance, end of period | | $ | 43,000 |
| | $ | 2,263 |
| | $ | 40,278 |
| | $ | 10,561 |
| | $ | — |
| | $ | 96,102 |
| | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
|
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.
Along with attendance and guest per capita statistics, discrete financial information and operating results are prepared 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 thirdfirst quarter of 20132014, there were no changes in the above critical accounting policies previously disclosed in our Annual Report on Form 10-K/A10-K for the year ended December 31, 20122013 except as noted below.. Change in Depreciation Method
Effective January 1, 2013, we changed our 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, we 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, we had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation for all assets. We 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 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-, nine- and twelve-month periods ended September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013. | | | | Three months ended | | Nine months ended | | Twelve months ended | | Three months ended | | Twelve months ended | | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | | 9/29/2013 | | 9/30/2012 | | 3/30/2014 | | 3/31/2013 | | 3/30/2014 | | 3/31/2013 | | | (13 weeks) | | (13 weeks) | | (39 weeks) | | (39 weeks) | | (52 weeks) | | (53 weeks) | | (13 weeks) | | (13 weeks) | | (52 weeks) | | (53 weeks) | | | | | (As restated) | | | | (As restated) | | | | (As restated) | | (In thousands) | | | (In thousands) | | Net income | | $ | 190,424 |
| | $ | 141,013 |
| | $ | 128,688 |
| | $ | 112,181 |
| | $ | 118,363 |
| | $ | 105,903 |
| | Net income (loss) | | | $ | (83,540 | ) | | $ | (109,126 | ) | | $ | 133,790 |
| | $ | 58,145 |
| Interest expense | | 25,529 |
| | 26,863 |
| | 77,153 |
| | 83,902 |
| | 103,870 |
| | 116,437 |
| | 24,732 |
| | 25,763 |
| | 102,040 |
| | 109,579 |
| Interest income | | (17 | ) | | (13 | ) | | (126 | ) | | (31 | ) | | (163 | ) | | (68 | ) | | (73 | ) | | (40 | ) | | (187 | ) | | (92 | ) | Provision for taxes | | 58,025 |
| | 51,912 |
| | 34,026 |
| | 41,754 |
| | 24,030 |
| | 27,858 |
| | Provision (benefit) for taxes | | | (30,251 | ) | | (35,659 | ) | | 25,651 |
| | 17,638 |
| Depreciation and amortization | | 57,495 |
| | 60,223 |
| | 108,313 |
| | 112,211 |
| | 122,408 |
| | 127,191 |
| | 4,307 |
| | 4,786 |
| | 122,008 |
| | 127,013 |
| EBITDA | | 331,456 |
| | 279,998 |
| | 348,054 |
| | 350,017 |
| | 368,508 |
| | 377,321 |
| | (84,825 | ) | | (114,276 | ) | | 383,302 |
| | 312,283 |
| Loss on early extinguishment of debt | | — |
| | — |
| | 34,573 |
| | — |
| | 34,573 |
| | — |
| | — |
| | 34,573 |
| | — |
| | 34,573 |
| Net effect of swaps | | 1,377 |
| | (175 | ) | | 8,315 |
| | (1,318 | ) | | 8,141 |
| | (10,930 | ) | | 371 |
| | 9,211 |
| | (1,957 | ) | | 8,689 |
| Unrealized foreign currency (gain) loss | | (8,385 | ) | | (14,737 | ) | | 15,371 |
| | (14,108 | ) | | 20,298 |
| | (17,502 | ) | | Unrealized foreign currency loss | | | 17,182 |
| | 8,881 |
| | 37,386 |
| | 7,949 |
| Non-cash equity expense | | 843 |
| | 362 |
| | 4,645 |
| | 2,630 |
| | 5,280 |
| | 2,619 |
| | 3,956 |
| | 2,933 |
| | 6,558 |
| | 4,498 |
| Loss on impairment/retirement of fixed assets, net | | 1,637 |
| | 25,000 |
| | 2,266 |
| | 24,230 |
| | 8,372 |
| | 34,509 |
| | 997 |
| | 600 |
| | 2,936 |
| | 30,844 |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | — |
| | (15,368 | ) | | — |
| | — |
| | — |
| | (8,743 | ) | | (6,625 | ) | 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 |
| | Other non-recurring items (as defined) (1) | | | 354 |
| | 805 |
| | 1,256 |
| | 3,264 |
| Adjusted EBITDA | | | $ | (61,965 | ) | | $ | (57,273 | ) | | $ | 420,738 |
| | $ | 395,475 |
| | | | | | | | | | | | | | | | | | | | | | (1) As permitted by and defined in the 2013 Credit Agreement | | | | | | | | | | (1) The Company's 2013 Credit Agreement references certain costs as non-recurring or unusual. These items are excluded in the calculation of Adjusted EBITDA and have included certain litigation expenses, contract termination costs, and severance expense.
| | (1) The Company's 2013 Credit Agreement references certain costs as non-recurring or unusual. These items are excluded in the calculation of Adjusted EBITDA and have included certain litigation expenses, contract termination costs, and severance expense.
|
Results of Operations:
RestatementFirst Quarter -
We have madeOperating results for the first quarter historically include less than 5% of our full-year revenues and attendance. The results include normal off-season operating, maintenance and administrative expenses at our ten seasonal amusement parks and three outdoor water parks, as well as daily operations at Knott's Berry Farm, which is open year-round, and Castaway Bay, which is generally open daily from Memorial Day to Labor Day plus a correction relating to our uselimited daily schedule for the balance of the composite depreciation method.year. The correction, which impacts the Balance Sheet at September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three-, nine-, and twelve-month periods ended 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, our initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was reviewed in connection with a response to an SEC comment letter. We ultimately concluded that such disposition was unusual and that an $8.8 millioncharge should have been reflected in the 2011 financial statements.
Nine months ended September 29, 2013
The fiscal nine-month period ended September 29, 2013, consisted of a 39-week period andcurrent quarter included a total of 1,93694 operating days compared with 39 weeks and 2,178to 117 operating days forduring the fiscal nine-month period ended September 30, 2012.first quarter of 2013. The differencedecrease in operating days is primarilywas due to the sale of two non-corea water parks, as well aspark during 2013 and the combination of two parks, Worlds of Fun and Oceans of Fun, into one gate for 2013.
The following table presents key financial information for the nine months ended September 29, 2013 and September 30, 2012:
| | | | | | | | | | | | | | | | | | | 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 nine months ended September 29, 2013 increased $56.3 million to $995.5 million from $939.2 million during the nine months ended September 30, 2012. The increase in revenues reflects a 6%, or $2.46, increase in average in-park guest per capita spending during the first nine months of the year when compared with the first nine 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 5% increaseshift in the admissions per capEaster and a 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 nine-month period, out-of-park revenues increased 7%, or $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 drove higher average daily room rates while maintaining or growing occupancy rates. The increase in overall net revenues includes attendance that was essentially comparable through the first nine months of 2013 when compared with the same period a year ago. The variance in attendance is entirely attributable to the sale of two non-core water parks. Excluding the sale of the water parks, attendance increased 1%, or 195,000 visits on a comparable park basis.
Revenues for the first nine months of the year also reflect the negative impact of exchange rates and the strengthening U.S. dollar on our Canadian operations ($3.6 million) during the period.
For the nine-month period in 2013, operating costs and expenses increased 3%, or $15.6 million, to $595.8 million from $580.2 million for the same period in 2012, the net result of a $7.5 million increase in operating expenses and a $10.0 million increase in selling, general and administrative costs ("SG&A"). These cost increases were offset slightly by a 2%, or $1.9 million decrease in cost of goods sold during the period. The $7.5 million increase in operating expenses was due to increases of approximately $4.3 million in employee costs, $3.2 million in operating supplies and $1.5 million in maintenance materials, offset slightly by a decrease of $2.7 million in insurance expense. The increase in employee costs was primarily due to increased costs of benefits. Operating supplies increased due to premium benefit offerings and improved guest services. The $2.7 million decrease in insurance expense was due to a reduction in insurance settlements and accruals. The $10.0 million increase in SG&A expenses was due primarily to additional marketing efforts and agency advertising costs, and increased full-time employee costs, largely related to performance incentives and an increase in staffing levels.
Depreciation and amortization expense for the period decreased $3.9 million due to several significant assets being fully depreciated at the end of 2012. For the nine-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 totaled $2.3 million for the retirement of assets 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 on impairment / retirement of fixed assets, and all other non-cash costs, operating income for the period increased $75.3 million to $297.9 million in the first nine months of 2013 from operating income of $222.6 million in the first nine months of 2012.
Interest expense for the first nine months of 2013 was $77.2 million, a decrease of $6.8 millionSpring Break holidays from the first nine months of 2012. The decreasequarter in interest expense was due2013 to the settlement of our Canadian cross-currency swapssecond quarter in the first quarter of 2012, the decrease in non-cash amortization expense resulting from the write-off of loan fees related to our prior credit agreement, and a decrease in revolver interest due to lower average borrowings and a lower effective interest rate from the March 2013 refinancing.
The net effect of our swaps resulted in a non-cash charge to earnings of $8.3 million for the first nine months of 2013 compared with a $1.3 million non-cash benefit to earnings in the first nine 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 ineffective designated and de-designated swaps to market. During the current year-to-date period, we also recognized a $15.2 million net charge to earnings for unrealized/realized foreign currency losses, which included 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 nine months of 2013, a provision for taxes of $34.0 million was recorded to account for publicly traded partnership (“PTP”) taxes and the tax attributes of our corporate subsidiaries. During the same nine-month period in 2012, a $41.8 million provision 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, net income for the nine months ended September 29, 2013 totaled $128.7 million, or $2.31 per diluted limited partner unit, compared with net income of $112.2 million, or $2.01 per diluted unit, for the same period a year ago.
For the nine-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 $405.2 million compared with $365.5 million for the fiscal nine-month period ended 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 our food and beverage initiatives, offset slightly by an increase in employee related costs, advertising expenses, and 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.
Third Quarter -
The fiscal three-month period ended September 29, 2013, consisted of a 13-week period and included a total of 1,019 operating days compared with 13 weeks and 1,177 operating days for the fiscal three-month period ended September 30, 2012. The difference in operating days is due to the sale of two non-core water parks, as well as the combination of two parks, Worlds of Fun and Oceans of Fun, into one gate during 2013.2014.
The following table presents key financial information for the three months ended September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013: | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | | | | | | | | | | | | | | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | Three months ended | | Three months ended | | Increase (Decrease) | | | (13 weeks) | | (13 weeks) | | | | | | 3/30/2014 | | 3/31/2013 | | $ | | % | | | | | (As restated) | | | | | | (13 weeks) | | (13 weeks) | | | | | | | (Amounts in thousands) | | (Amounts in thousands) | Net revenues | | $ | 592,076 |
| | $ | 553,445 |
| | $ | 38,631 |
| | 7.0 | % | | $ | 40,466 |
| | $ | 41,799 |
| | $ | (1,333 | ) | | (3.2 | )% | Operating costs and expenses | | 274,964 |
| | 263,657 |
| | 11,307 |
| | 4.3 | % | | 106,739 |
| | 102,733 |
| | 4,006 |
| | 3.9 | % | Depreciation and amortization | | 57,495 |
| | 60,223 |
| | (2,728 | ) | | (4.5 | )% | | 4,307 |
| | 4,786 |
| | (479 | ) | | (10.0 | )% | Loss on impairment / retirement of fixed assets | | 1,637 |
| | 25,000 |
| | (23,363 | ) | | N/M |
| | 997 |
| | 600 |
| | 397 |
| | N/M |
| Gain on sale of other assets | | (8,743 | ) | | — |
| | (8,743 | ) | | N/M |
| | Operating income | | $ | 266,723 |
| | $ | 204,565 |
| | $ | 62,158 |
| | 30.4 | % | | | | | | | | | | | | Operating loss | | | $ | (71,577 | ) | | $ | (66,320 | ) | | $ | (5,257 | ) | | 7.9 | % | N/M - Not meaningful | | | | | | | | | | Other Data: | | | | | | | | | | | | | | | | | Adjusted EBITDA | | $ | 318,382 |
| | $ | 292,309 |
| | $ | 26,073 |
| | 8.9 | % | | $ | (61,965 | ) | | $ | (57,273 | ) | | $ | (4,692 | ) | | 8.2 | % | 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 September 29, 2013March 30, 2014, net revenues increased 7%decreased 3%, or $38.6$1.3 million, to $592.1$40.5 million from $553.5$41.8 million in the thirdfirst quarter of 2012. This increase reflects a 7% increase in average in-park per capita spending and an 8%, or $4.4 million, increase in out-of park revenues, and attendance that2013. The decrease between periods was comparable with the prior year period. The increase in per capita spending was the result of higher admissions pricing, the successful expansion of our in-park premium benefit offerings, and improvements in our food and beverage programs. The increase in out-of-park revenues wasentirely due to the shift of the Easter and Spring Break holidays to the second quarter of 2014 from the first quarter of 2013. The impact of the calendar shift was partially offset by strong early season performance at Knott's Berry Farm. At the end of the first quarter of 2014, only three of our resort properties. Excluding14 properties were in operation. The other parks, including three of our larger parks, Cedar Point and Kings Island located in Ohio and Canada's Wonderland in Toronto, were in the sale our two non-core water parks, attendance increased 2%, or 207,000 visits on a comparable park basis.final stages of preparing to open for the 2014 operating season.
Operating costs and expenses for the quarter increased 4%, or $11.3$4.0 million to $275.0$106.7 million from $263.7$102.7 million in 2013 and were in line with expectations. Operating results for the thirdfirst quarter of 2012, the net result ofinclude normal off-season operating, maintenance and administrative expenses at our seasonal amusement and water parks, and daily operations at Knott’s Berry Farm and Castaway Bay. The increase in first-quarter costs reflects a $1.5 million decrease in cost of goods sold, a $7.0$3.7 million increase in operating expenses and a $5.7 millionslight increase in SG&A costs. As a percentage of net revenues, costsselling, general and expenses decreased 120 basis points, and was in line with expectations.administrative ("SG&A") expenses. The decrease in cost of goods sold was primarilyfood, merchandise and games revenues for the result of successful cost-savings initiatives in food and beverage.period were flat compared to a year ago. The $7.0$3.7 million increase in operating expenses was due primarily due to a $2.8 million increase in employee related costs, a $1.6 million increase in operating supplies, and a $1.5 million increasebudgeted increases in maintenance expense. The increaseexpense as we continue to invest in employee related costs was primarily due to higher staffing levels, salary increases, and increases in benefit costs. Operating supplies increased due to premium benefit offerings and improved guest services. The $5.7 million increase in SG&A costs was due to increases in employee-related costs and agency advertising costs. The increase in SG&A employee-related expenses was due to an increase in performance incentive awards due to strong 2013 operating results to date,the infrastructure of our parks, as well as an increase in staffing levels across the company. Advertisingmaintenance labor and other employee related expenses. Additionally, utility costs increased as a resultdue to the harsh winter experienced at several of additional marketing efforts in the period, including our Customer Relationship Management platform.parks.
Depreciation and amortization expense for the quarter decreased $2.7$0.5 million primarily due to several significant assets reaching the endshifting 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.operating calendar. Loss on impairment/retirement of fixed assets for the current period was $1.6$1.0 million compared to $0.6 million during the first quarter of 2013, reflecting losses on the retirement of assets across allseveral 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 on impairment / retirement of fixed assets, and all other non-cash costs, operating incomeloss in the thirdfirst quarter of 20132014 increased $62.1$5.3 million to $266.7$71.6 million from an operating incomeloss of $204.6$66.3 million in the thirdfirst quarter of 2012.2013.
Interest expense for the thirdfirst quarter of 20132014 was $25.5$24.7 million, representing a $1.3$1.0 million decrease from the interest expense for the thirdfirst quarter of 2012. As mentioned in the nine-month discussion above, interest2013. 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 third2014 first quarter, the net effect of our swaps resulted in a $1.4$0.4 million non-cash charge to earnings, compared to a non-cash benefitcharge to earnings of $0.2$9.2 million in the thirdfirst quarter of 2012.2013. 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.portfolio, along with the write off of amounts in AOCI related to de-designated interest rate swaps. During the 2013 third2014 first quarter, we also recognized a $8.6$17.2 million net benefitcharge to earnings for unrealized/realized foreign currency gains,losses, which included a $8.5$16.3 million unrealized foreign currency gainloss on the U.S.-dollar denominated debt held at our Canadian property. Due to our March 2013 refinancing, loan fees related to our 2010 and 2011 financings were written off, resulting in a $34.6 million charge to earnings in the first quarter of 2013.
During the quarter, a provisionbenefit for taxes of $58.0$30.3 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provisionbenefit for taxes of $51.9$35.7 million in the same period a year ago. The decrease in tax benefit recorded relates to the combination of a decrease in the pre-tax net loss for the period and a decrease in the effective tax rate.
After interest expense and the provisionbenefit for taxes, net incomeloss for the quarter totaled $190.4$83.5 million, or $3.41$1.51 per diluted limited partner unit, compared with a net incomeloss of $141.0$109.1 million, or $2.52$1.95 per diluted unit, for the thirdfirst quarter a year ago.
For the current quarter, Adjusted EBITDA increased to $318.4 million from $292.3 million for the fiscal third quarter of 2012. The $26.1 million increase in Adjusted EBITDA was largely 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. These revenue increases were somewhat offset by higher costs associated with improving guest services and expanding our marketing efforts.
Twelve Months Ended September 29, 2013March 30, 2014 -
The fiscal twelve-month period ended September 29, 2013March 30, 2014, consisted of a 52-week period and 2,1402,118 operating days, compared with 53 weeks and 2,4162,403 operating days for the fiscal twelve-month period ended September 30, 2012March 31, 2013. The difference in operating days was due primarily to the 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 weekcalendar shift of operationsthe Easter and Spring Break holidays in the twelve-month period ending September 30, 2012.2014 described above.
The following table presents key financial information for the twelve months ended September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013: | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 9/29/2013 | | 9/30/2012 | | $ | | % | | 3/30/2014 | | 3/31/2013 | | $ | | % | | | (52 weeks) | | (53 weeks) | | | | | | (52 weeks) | | (53 weeks) | | | | | | | | | (As restated) | | | | | | | | | | | | | | | (Amounts in thousands) | | (Amounts in thousands) | Net revenues | | $ | 1,124,700 |
| | $ | 1,084,094 |
| | $ | 40,606 |
| | 3.7 | % | | $ | 1,133,239 |
| | $ | 1,082,055 |
| | $ | 51,184 |
| | 4.7 | % | Operating costs and expenses | | 700,317 |
| | 701,915 |
| | (1,598 | ) | | (0.2 | )% | | 720,534 |
| | 694,139 |
| | 26,395 |
| | 3.8 | % | Depreciation and amortization | | 122,408 |
| | 127,191 |
| | (4,783 | ) | | (3.8 | )% | | 122,008 |
| | 127,013 |
| | (5,005 | ) | | (3.9 | )% | Gain on sale of other assets | | (15,368 | ) | | — |
| | (15,368 | ) | | N/M |
| | (8,743 | ) | | (6,625 | ) | | (2,118 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 8,372 |
| | 34,509 |
| | (26,137 | ) | | N/M |
| | 2,936 |
| | 30,844 |
| | (27,908 | ) | | N/M |
| Operating income | | $ | 308,971 |
| | $ | 220,479 |
| | $ | 88,492 |
| | 40.1 | % | | $ | 296,504 |
| | $ | 236,684 |
| | $ | 59,820 |
| | 25.3 | % | N/M - Not meaningful | | | | | | | | | | | | | | | | | Other Data: | | | | | | | | | | | | | | | | | Adjusted EBITDA | | $ | 430,663 |
| | $ | 393,612 |
| | $ | 37,051 |
| | 9.4 | % | | $ | 420,738 |
| | $ | 395,475 |
| | $ | 25,263 |
| | 6.4 | % | Adjusted EBITDA margin | | 38.3 | % | | 36.3 | % | | — |
| | 2.0 | % | | 37.1 | % | | 36.5 | % | | — |
| | 0.6 | % | 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 $1,124.71,133.2 million for the twelve months ended September 29, 2013March 30, 2014, increasing $40.6$51.1 million,, from $1,084.11,082.1 million for the trailing twelve months ended September 30, 2012March 31, 2013. The 4%5% increase in revenues for the twelve-month period was driven by a 7%an increase in average in-park guest per capita spending, the result of a stronger admissions per cap and improved pure in-park spending. The increase in pure in-park spending was in 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
yearsprimarily due to the extra week of operations in the twelve-month period ended September 30, 2012, as well as the sale of two non-core water parks during the current yeartwelve-month period. Excluding the sale of the two water parks, attendance would have increased . Out-of-park revenues increased $4.6$6.4 million primarily due to an increase in processing fees as partthe strong performance of our expansion of ticketing options. The increase in net revenues for the twelve months ended September 29, 2013 also reflects the negative impact of currency exchangeresort properties, which drove higher average daily room rates and the weakening Canadian dollar on our Canadian operations (approximately $3.2 million) during the period.occupancy rates.
Operating costs and expenses decreased $1.6increased $26.4 million, or less than 1%4%, to $700.3$720.5 million, in large part due to one less week of operations infrom $694.1 million for the current twelve-month period and were in line with expectations.ended March 31, 2013. The decreaseincrease in costs and expenses reflects a $2.9$19.3 million increase in operating expenses and a $11.4 million increase in SG&A costs, somewhat offset by a decrease in cost of goods sold of $4.3 million. The decrease of 4% in cost of goods sold was primarily driven by food and a $1.2 million decrease in operating expenses, due primarily to the one less week in the period. These year-over-year cost decreases were partially offset by a $2.6 million increase in SG&A costs.beverage efficiency initiatives. The increase in operating costs was due to higher normal operating and maintenance expense, enhancements to park infrastructure, and increased employment related costs including
performance bonuses. SG&A costs reflects a $2.8 million increase in employment-relatedincreased due to full-time labor and benefit costs, related to higher staffing levels andincluding 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 byand consumer relationship management database development costs. Exchange rates had 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 infavorable impact ($4.6 million) on costs and expenses also reflects the impact of exchange rates onat our Canadian operations ($1.0 million) during the period.
For the twelve-month period ending September 29, 2013,ended March 30, 2014, the gain on sale of other assets was $15.4$8.7 million reflectingdue to the gainsale of one non-core water park during 2013. Gain on sale of other assets totaled $6.6 million for the twelve-month period ending March 31, 2013, reflecting the sale of two non-core water parksassets during the period. Loss on impairment/retirement of fixed assets for the period was $8.4$2.9 million, due to the removal of a ride to enhance a section of one of our parks, as well asasset retirements of assets across all of our properties. Loss on impairment/retirement of fixed assets during the period ended September 30, 2012March 31, 2013 totaled $34.5$30.8 million, which reflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom and an $8.8 million charge for the retirementasset retirements across all of an asset which is further described in Note 11 to the financial statements.our properties.
Depreciation and amortization expense for the period decreased $4.8$5.0 million compared with the prior period due primarily to several significant assets being fully depreciated at the end of 2012.2012 and the later opening of parks for the 2014 operating season when compared to 2013. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for the current period increased $88.5$59.8 million to $309.0$296.5 million from $220.5$236.7 million.
Interest expense for the twelve months ended September 29, 2013March 30, 2014 decreased $12.5$7.6 million to $103.9$102.0 million, from $116.4$109.6 million for the same twelve-month period a year ago. The decrease in interest expense reflects a decrease in revolver interest in the period due to lower borrowings, and a lower average cost resulting from the March 2013 refinancing and a decrease in non-cash amortization expense resulting from the write-off of loan fees related to our prior credit agreement, and the impact of the settlement of our Canadian cross-currency swaps in the first quarter of 2012.agreement.
During the current twelve-month period, the net effect of our interest rate swaps was recorded as a benefit to earnings of $2.0 million compared to a charge to earnings of $8.1 million compared to a benefit to earnings of $10.9$8.7 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 in the current period. During the current period, we also recognized a $20.2$37.2 million charge to earnings for unrealized/realized foreign currency losses, which included a $19.4$35.5 million unrealized foreign currency loss on the U.S.-dollar denominated debt held at our Canadian property. Due toDuring the twelve months ended March 31, 2013, as a result of 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 $24.0$25.7 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 $27.9$17.6 million in twelve-month period ended September 30, 2012.March 31, 2013. The increase in tax provision recorded relates to the combination of an increase in pre-tax net income for the period, offset somewhat by a decrease in the effective tax rate.
After interest expense and provision for taxes, net income for the period totaled $118.4$133.8 million, or $2.12$2.39 per diluted limited partner unit, compared with net income of $105.9$58.1 million, or $1.89$1.04 per diluted unit, a year ago.
As discussed above, the current trailing-twelve-month results include one less week of operations due to the timing of the third quarter fiscal close. Comparing the twelve-month periods for both 2013 and 2012 onWe believe Adjusted EBITDA is a comparable 52-week basis, net revenues would be up approximately $55.1 million, or 5%, on increases in both average in-park guest per capita spending and out-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 cap and improved pure in-park spending, driven largely by improvements in our food and beverage programs and the expansion and continued successmeaningful measure of our premium benefit offerings. Out-of-park revenues would have increased $6.3 million primarily due to an increase in transaction fees from on-line ticket sales. Attendance for the comparable period would have decreased 351,000 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 $9.1 million, the net result of a $1.9 million decrease in cost of goods sold, a $6.2 million increase in operating expenses and a $4.8 million increase in SG&A costs. The increase in operating expenses was primarily attributable to an increase in employment-related expenses of $3.3 million, a $3.9 million increase in operating supply costs, and a $1.6 million increase in utility costs. Somewhat offsetting these operating-expense increases were decreases in maintenance expenses of $3.5 million and insurance expenses of $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 ofresults (for additional attractions and enhanced guest services at our parks. Operating supplies increased due largely to the introduction of new extra-charge attractions and incremental expenses related to our expanded premium benefit offerings. Utility 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 $3.4 million increase in employment-related costs due to higher staffing levels and incentive compensation plans tied to company performance, and a $4.0 million increase in advertising costs related to the transition to a new advertising agency. Somewhat offsetting these SG&A cost increases was a $2.5 million decrease in professional and administrative costs primarily due to reductions in litigation expenses and consulting fees in the period.
information regarding Adjusted EBITDA, forincluding how we define and use Adjusted EBITDA, as well as a reconciliation from net income, see pages 31-32). For the twelve-month period ended September 29, 2013,March 30, 2014, Adjusted EBITDA increased $37.1$25.3 million, or 9%6%, to $430.7$420.7 million. On a same-week basis, Adjusted EBITDA for the twelve-monthOver this same period, would have increased approximately $40.9 million, or 11%. On a same-week basis, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased 19060 bps to 38.3%37.1% from 36.4%36.5% for the twelve-month period ended September 29, 2013,March 31, 2013. The increase in Adjusted EBITDA was primarily due to the success of high-margin revenuesrevenue initiatives during the period, such as growth in our premium guest benefit offerings and our admission pricing, combined with another year of growth in our season pass base and a continued focus on controlling operating costs.
October 2013 -
Based on preliminary results, net revenues through November 3, 2013 were approximately $1,104 million, up 6%, or $65 million, compared with $1,039 million forcosts at the same period last year. The increase was the result of an approximate 6%, or $2.31, increase in average in-park guest per capita spending to a record $44.33, and an approximate 7%, or $8 million increase, in out-of-park revenues to $117 million. Also contributing to revenue growth was an increase in attendance of 100,000 visits, compared with last year. Excluding the sale of two water parks, attendance was up 2%, or 334,000 visits, to a record 22.7 million visits on a comparable park basis.level.
Liquidity and Capital Resources: With respect to both liquidity and cash flow, we ended the thirdfirst quarter of 20132014 in sound condition. The negative working capital ratio (current assetsliabilities divided by current liabilities)assets) of 1.5 at September 29, 2013March 30, 2014 reflectsis the impactresult of ournormal seasonal business.activity. Receivables, inventories, and payables are at normal seasonal levels. Operating Activities During the nine-monththree-month period ended September 29, 2013,March 30, 2014, net cash providedused by operating activities increased $40.2$14.6 million from the same period a year ago, due primarily due to the year-over-year growth in revenues.working capital timing differences. For the twelve-month period ended September 29, 2013March 30, 2014 net cash provided by operating activities increased $52.3$11.1 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 monthsquarter of 20132014 was $82.2$40.3 million, an increase of $7.6$4.5 million compared with the nine monththree-month period ended September 30, 2012. Within investing activities,March 31, 2013, due to greater 2014 capital expenditures increased $21.7 million. During the current period, $15.3 million was received for the sale of a non-core waterpark.expenditures. Net cash used in investing activities for the trailing-twelve-month period ended September 29, 2013March 30, 2014 totaled $86.6$109.5 million compared with $91.9$87.2 million for the same period a year ago. The decrease reflectsincrease is due to greater capital expenditures in 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.current twelve-month period. Financing Activities Net cash used infrom financing activities in the first ninethree months of 20132014 was $130.1$15.3 million, a decrease of $12.3$21.1 million compared with the nine-monththree-month period ended September 30, 2012.March 31, 2013. The decrease was due to a one-time cash costlower overall revolver borrowings, net of $50.5 million to settle our Canadian derivativeincreases in the first quarter of 2012, offset somewhat by an increase in distributions paid in the current year of $37.9 million.unitholder distributions. Net cash used in financing activities in the trailing-twelve-month period ended September 29, 2013March 30, 2014 totaled $150.6$199.2 million, a decrease of $31.2$9.3 million compared with the twelve-month period ended September 30, 2012.March 31, 2013. The decrease was largely due to the $50.5
million Canadian derivative settlementa reduction in 2012, offset somewhat by an increase in distributions paid of $21.4 million indebt payments and debt issuance costs during the current twelve-month period.period, net of increases in unitholder distributions.
In July 2010, we issued $405As of March 30, 2014, our debt consisted of the following:
$405 million of 9.125% senior unsecured notes, maturing in 2018, yielding 9.375% due to the notes being issued at a discount in a private placement, including $5.6 million of Original Issue Discount (OID) to yield 9.375%. The $405 million senior unsecured notes require semi-annual interest payments in February and August, with the principal due in full on August 1, 2018.July 2010. 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 theThe notes may be redeemed with the net cash proceeds of certain equity offerings at 109.125%.pay interest semi-annually in February and August. 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.issued at par. 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%. These notes pay interest semi-annually in March and September.
Concurrently with this offering, we entered into a new $885 million credit agreement (the "2013 Credit Agreement"), which included a $630 million seniorSenior secured term loan facility anddebt of $618.9 million, maturing in March 2020 under our 2013 Credit Agreement. The term debt bears interest at 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$6.3 million annually. The net proceeds fromDue to a prepayment made during 2013, we only have current maturities totaling $1.5 million as of March 30, 2014.
$55 million in borrowings under the notes and borrowings$255 million senior secured revolving credit facility under our 2013 Credit Agreement. 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 limitsub-limit of $15 million.$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 tothat we pay a commitment fee of 5038 bps per annum on the unused portion of the credit facilities.
At the end of the quarter, we had a total of $628.4$618.9 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $901.6$902.0 million of fixed-rate debt (including OID), no$55.0 million in outstanding borrowings under our revolving credit facility, and cash on hand of $183.5$8.9 million. After letters of credit, which totaled $16.4$16.3 million at September 29, 2013March 30, 2014, we had $238.6$183.7 million of available borrowings under the revolving credit facility. In order to lock in fixed interest costs on a portion of our domestic term debt, in September 2010 we
We have entered into several forward-starting swap agreements ("September 2010 swaps") tointerest rate swaps that effectively convert a totalfix all of $600 million ofour variable-rate debt to fixed rates beginningpayments. As of March 30, 2014, we have $800 million of interest rate swaps 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")place 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 ofconvert variable-rate debt to fixed rates. The Combination Swaps were designated as cash flow hedges,These swaps, which 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 million2.38%, which will be amortized out of AOCI into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive incomethrough December 2015. At the time of the de-designation, the fair market value of the May 2011 swaps was $7.8 million and was immediately recognized into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations.have been de-designated as cash flow hedges. 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 thirdand fourth quarter of 2013, the Partnershipwe entered into threefour forward-starting interest rate swap agreements ("2013 forwards") that will effectively convert $400$500 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%2.94%. In October 2013,Additional detail regarding our current and historical swap arrangements is provided in Note 6 to our Unaudited Condensed Consolidated Financial Statements and in Note 6 to 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 beginningAudited Consolidated Financial Statements included in December of 2015.our Form 10-K filed on February 26, 2014.
At September 29, 2013March 30, 2014, the fair market value of the derivative portfolio was $31.627.8 million, which was recorded in “Derivative Liability” on the condensed consolidated balance sheet. The following table presents our 2013 forwards and the October 2013 swaps which mature in December 2018, and the Combination Swaps and May 2011 swaps which mature December 15, 2015, along with their notional amounts and their fixed interest rates.
| | | | | | | | | | | | | | | | Interest Rate Swaps | ($'s in thousands) | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 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 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 thirdfirst quarter of 2013,2014, 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 by 0.25x each second quarter beginning in the second quarter of 2014.2014 until it reaches 5.25x. Based on our trailing-twelve-month results ending September 29, 2013March 30, 2014, our Consolidated Leverage Ratio was 3.573.63x, providing $184.1175.2 million of EBITDA cushion on the ratio at the end of the thirdfirst quarter. We were in compliance with all other covenants under the 2013 Credit Agreement as of September 29, 2013March 30, 2014.
The 2013 Credit Agreement allows restricted payments of up to $60 million annually 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 September 29, 2013, the
The indentures governing our notes maturing inalso include annual restricted payment limitations and additional permitted payment formulas. The restricted payment provisions applicable to our 2018 havenotes are more restrictive than those that apply to our 2021 notes. Under the more restrictive covenants. The terms of the indenture governing our 2018 notes permit us tocovenants, we can make restricted payments of $20 million annually.annually so long as no default or event of default has occurred and is continuing. Our ability to make additional restricted payments in 2013 and beyond is permitted should our pro-forma trailing-twelve-month Total-Indebtedness-to-Consolidated-Cash-FlowTotal Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 4.75x, measured on a quarterly basis.4.75x. In accordance with these debt provisions, on August 8, 2013,February 26, 2014, we announced the declaration of a distribution of $0.625$0.70 per limited partner unit, which was paid on September 16, 2013,March 25, 2014, and on November 7, 2013May 8, 2014 we announced the declaration of a distribution of $0.70 per limited partner unit, payable DecemberJune 16, 2013.2014. 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$16.3 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of September 29, 2013March 30, 2014. 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 September 29, 2013,March 30, 2014, we had $901.6$902.0 million of fixed-rate senior unsecured notes and $628.4$618.9 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 $31$27 million, a hypothetical 100 bps
increase in 30-day LIBOR on our variable-rate debt (not considering the impact of our interest rate swaps) would lead to an increase of approximately $3.8 million in annual cash interest costs. Assuming a hypothetical 100 bps increase in 30-day LIBOR, the amount of net cash interest paid on our variable-rate debt, afterderivative portfolio would decrease by $4.6 million over the fixed-rate swap agreements, would lead to a decrease of approximately $0.7 million in annual cash interest costs.next year. A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $3.7$4.2 million decrease in annual operating income.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures - The Partnership maintains a system of controls and procedures designed to ensure that information required to be disclosed by the Partnership in its reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission and that such information is accumulated and communicated to the Partnership’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of September 29, 2013March 30, 2014, 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.Officer, has evaluated the effectiveness of the Partnership's disclosure controls and procedures. 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 September 29, 2013March 30, 2014.
(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 September 29, 2013March 30, 2014 that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting. On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued an updated version of its Internal Control - Integrated Framework (2013 Framework). Originally issued in 1992 (1992 Framework), the framework helps organizations design, implement and evaluate the effectiveness of internal control concepts and simplify their use and application. The 1992 Framework remains available during the transition period, which extends to December 15, 2014, after which time COSO will consider it as superseded by the 2013 Framework. As of March 30, 2014, the Partnership continues to utilize the 1992 Framework during the transition to the 2013 Framework by the end of 2014.
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. On September 25, 2013, the Supreme Court of 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 its applicability to individual employment agreements. The matter will now proceed on the merits and both sides will have the opportunity to fileBoth parties filed legal briefs with the court setting forth the basis of their legal arguments. On April 9, 2014, the parties made oral arguments to the Court in support of their respective arguments.positions. Upon the conclusion of the oral arguments the procedural stage of the case was closed and the case was submitted to the court for a final ruling. The Partnership believes the liability recorded
as of September 29, 2013March 30, 2014 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 the Partnership's Annual Report on Form 10-K for the year ended December 31, 2012.2013.
ITEM 5. OTHER INFORMATION
On May 8, 2013, the Partnership announced that it had identified a historical classification error in its 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 that 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 was 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 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 CreditCedar Fair, L.P. 2008 Omnibus Incentive Plan Performance Award Agreement, dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with31, 2014, by and between Magnum Management Corporation and Matthew A. Ouimet, dated October 21, 2013.Ouimet. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013.April 4, 2014. | | | | Exhibit (10.2) | | Cedar Fair, L.P. 2008 Omnibus Incentive Plan Form of Restricted Unit Award Agreement. | | | | Exhibit (10.3) | | Cedar Fair, L.P. 2008 Omnibus Incentive Plan Form of Deferred Unit Award Agreement. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2013March 30, 2014 formatted in Extensible Business Reporting Language (XBRL): (i) Thethe Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) Thethe Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notesnotes. |
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. | | | | | | | CEDAR FAIR, L.P. | | | | (Registrant) | | | | | | | | By Cedar Fair Management, Inc. | | | | General Partner | | | | | Date: | November 7, 2013May 9, 2014 | /s/ Matthew A. Ouimet | | | Matthew A. Ouimet | | | President and Chief Executive Officer | | | | | Date: | November 7, 2013May 9, 2014 | /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 CreditCedar Fair, L.P. 2008 Omnibus Incentive Plan Performance Award Agreement, dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with31, 2014, by and between Magnum Management Corporation and Matthew A. Ouimet, dated October 21, 2013.Ouimet. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013.April 4, 2014. | | | | Exhibit (10.2) | | Cedar Fair, L.P. 2008 Omnibus Incentive Plan Form of Restricted Unit Award Agreement. | | | | Exhibit (10.3) | | Cedar Fair, L.P. 2008 Omnibus Incentive Plan Form of Deferred Unit Award Agreement. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2013March 30, 2014 formatted in Extensible Business Reporting Language (XBRL): (i) Thethe Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) Thethe Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notesnotes. |
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 September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | | | Three months ended | | Three months ended | | 3/30/14 | | 3/31/13 | | | | 3/30/14 | | 3/31/13 | | | | 3/30/14 | | 3/31/13 | Interest rate swaps | | $ | (2,742 | ) | | $ | 2,266 |
| | Interest Expense | | $ | — |
| | $ | (2,797 | ) | | Net effect of swaps | | $ | — |
| | $ | 435 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (In thousands) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Three months ended | | Three months ended | | | | 9/29/13 | | 9/30/12 | Interest rate swaps (1) | | Net effect of swaps | | 609 |
| | — |
| | | | | $ | 609 |
| | $ | — |
| | | | | | | |
| | | | | | | | | | | | (In thousands) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Three months ended | | Three months ended | | | | 3/30/14 | | 3/31/13 | Interest rate swaps | | Net effect of swaps | | 1,617 |
| | (1,471 | ) | | | | | $ | 1,617 |
| | $ | (1,471 | ) | | | | | | | |
| | (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 September 29, 2013March 30, 2014, in addition to gains of $0.61.6 million recognized in income 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 charge to earnings of $1.40.4 million recorded in “Net effect of swaps.”
For the three-month period ended September 30, 2012, $0.2 million of income 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 nine-month periods ended September 29, 2013 and 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 | | 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 | | | | 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 nine-month period ended September 29,March 31, 2013, in addition to the $3.7 million$435 thousand gain recognized in income on the ineffective portion of derivatives and $0.1$1.5 million gain loss recognized in income on the derivatives not designated as cash flow hedges (as noted in the tables above), $7.8$7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $4.3 million330 thousand of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the period.operations. The effect of these amounts resulted in a charge to earnings of $8.39.2 million recorded in “Net effect of swaps.”
For the nine-month period ended 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, $0.2 million of expense representing the amortization of amounts in AOCI for the swaps and $0.2 million of foreign currency gain in the period related to the U.S. dollar denominated Canadian term loan were
recorded in “Net effect of swaps” in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings of $1.3 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 September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (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 of Gain (Loss) Recognized in Accumulated OCI on Derivatives (Effective Portion) | | Amount and Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | Derivatives designated as Cash Flow Hedging Relationships | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | | | Twelve months ended | | Twelve months ended | | 3/30/14 | | 3/31/13 | | | | 3/30/14 | | 3/31/13 | | | | 3/30/14 | | 3/31/13 | Interest rate swaps | | $ | (6,658 | ) | | $ | 2,286 |
| | Interest Expense | | $ | (2,797 | ) | | $ | (12,031 | ) | | Net effect of swaps | | $ | 3,268 |
| | $ | 435 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | (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 |
| | | | | | | |
| | | | | | | | | | | | (In thousands) | | Amount and Location of Gain (Loss) Recognized in Income on Derivative | Derivatives not designated as Cash Flow Hedging Relationships | | | | Twelve months ended | | Twelve months ended | | | | 3/30/14 | | 3/31/13 | Interest rate swaps | | Net effect of swaps | | 6,635 |
| | (1,471 | ) | | | | | $ | 6,635 |
| | $ | (1,471 | ) | | | | | | | |
| | (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 $3.73.3 million gain recognized in income on the ineffective portion of derivatives and $0.16.6 million gain 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 $4.17.9 million of expense representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended 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 $8.1 million recorded in “Net effect of swaps.” For the twelve-month period ending SeptemberMarch 30, 2012, in addition to the $4.8 million gain recognized in income on the ineffective portion of derivatives designated as derivatives and $5.6 million of gain recognized in income on the ineffective portion of derivatives not designated as derivatives noted in the tables above, $0.1 million of income representing the amortization of amounts in AOCI for the swaps and a $0.4 million foreign currency gain in the twelve month period related to the U.S. dollar denominated Canadian term loan was recorded during the trailing twelve months ended September 30, 20122014 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a benefit to earnings for the trailing twelve month period of $10.92.0 million recorded in “Net effect of swaps.”
For the twelve-month period ending March 31, 2013, in addition to the $435 thousand gain recognized in income on the ineffective portion of designated derivatives and $1.5 million of loss recognized in income 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 $192 thousand of income representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended March 31, 2013 in the condensed consolidated statements of operations. The net effect of these amounts resulted in expense for the trailing twelve month period of $8.7 million recorded in “Net effect of swaps.” (7) Fair Value Measurements: The FASB Accounting Standards Codification (ASC) relating to fair value measurements emphasizes that fair value is a market-based measurement that should be determined based on assumptions (inputs) that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable, and valuation techniques used to measure fair value should maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Accordingly, the FASB’s ASC establishes a hierarchal disclosure framework that ranks the quality and reliability of information used to determine fair values. The hierarchy is associated with the level of pricing observability utilized in measuring fair value and defines three levels of inputs to the fair value measurement process—quoted prices are the most reliable valuation inputs, whereas model values that include inputs based on unobservable data are the least reliable. Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety.
The three broad levels of inputs defined by the fair value hierarchy are as follows: Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The table below presents the balances of assets and liabilities measured at fair value as of September 29, 2013March 30, 2014, December 31, 2012,2013, and September 30, 2012March 31, 2013 on a recurring basis: | | | | | | | | | | | | | | | | | | | | 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 | ) | | $ | — |
|
| | | | | | | | | | | | | | | | | | | | Total | | Level 1 | | Level 2 | | Level 3 | March 30, 2014 | | | | | | | | | (In thousands) | | | | | | | | | Interest rate swap agreements (1) | | $ | (6,657 | ) | | $ | — |
| | $ | (6,657 | ) | | $ | — |
| Interest rate swap agreements (2) | | (21,132 | ) | | — |
| | (21,132 | ) | | — |
| Net derivative liability | | $ | (27,789 | ) | | $ | — |
| | $ | (27,789 | ) | | $ | — |
| | | | | | | | | | December 31, 2013 | | | | | | | | | Interest rate swap agreements (1) | | $ | (3,916 | ) | | $ | — |
| | $ | (3,916 | ) | | $ | — |
| Interest rate swap agreements (2) | | $ | (22,746 | ) | | $ | — |
| | $ | (22,746 | ) | | $ | — |
| Net derivative liability | | $ | (26,662 | ) | | $ | — |
| | $ | (26,662 | ) | | $ | — |
| | | | | | | | | | March 31, 2013 | | | | | | | | | Interest rate swap agreements (1) | | $ | (23,388 | ) | | $ | — |
| | $ | (23,388 | ) | | $ | — |
| Interest rate swap agreements (2) | | $ | (7,643 | ) | | $ | — |
| | $ | (7,643 | ) | | $ | — |
| Net derivative liability | | $ | (31,031 | ) | | $ | — |
| | $ | (31,031 | ) | | $ | — |
|
| | (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 $0.90.6 million as of September 29, 2013March 30, 2014. 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 September 29, 2013March 30, 2014 or September 30, 2012March 31, 2013, 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 September 29, 2013March 30, 2014 was approximately $627.6618.9 million based on borrowing rates currently available to the Partnership on long-term debt with similar terms and average maturities. The fair value of the Partnership's notes at September 29, 2013March 30, 2014 was approximately $922.0938.6 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 per limited partner unit is calculated based on the following unit amounts: | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Three months ended | | Twelve months ended | | | 3/30/2014 | | 3/31/2013 | | 3/30/2014 | | 3/31/2013 | | | (In thousands except per unit amounts) | Basic weighted average units outstanding | | 55,500 |
| | 55,854 |
| | 55,531 |
| | 55,694 |
| Effect of dilutive units: | | | | | | | | | Unit options and restricted unit awards | | — |
| | — |
| | 209 |
| | 63 |
| Phantom units | | — |
| | — |
| | 170 |
| | 299 |
| Diluted weighted average units outstanding | | 55,500 |
| | 55,854 |
| | 55,910 |
| | 56,056 |
| Net income per unit - basic | | $ | (1.51 | ) | | $ | (1.95 | ) | | $ | 2.41 |
| | $ | 1.04 |
| Net income per unit - diluted | | $ | (1.51 | ) | | $ | (1.95 | ) | | $ | 2.39 |
| | $ | 1.04 |
| | | | | | | | | |
The effect of out-of-the-money and/or antidilutive unit options on the three nine and twelve months ended September 29,March 30, 2014 and March 31, 2013, respectively, had they not been out of the money or antidilutive, would have been zero, 7,000, and 4,000 units, respectively. The effect of out-of-the-money and/or antidilutive unit options on the three, nine and twelve months ended September 30, 2012, had they not been out of the money or antidilutive, would have been 66,000, 34,000 and 36,000 units, respectively.immaterial in all periods presented. (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 thirdfirst quarter of 20132014 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:
The Partnership has made the following correction relating to its use of the composite depreciation method.
This correction, which impacts the Balance Sheet at September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three-, nine-, and twelve-month periods ended September 30, 2012, reflects a subsequent determination that a disposition from the 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 a response to an SEC comment letter. The Partnership ultimately concluded that such disposition was unusual and that an $8.8 millioncharge 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) | 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 | | 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)(11) Changes in Accumulated Other Comprehensive Income (Loss) by Component:
The following tables reflect the changes in Accumulated Other Comprehensive Income (Loss) related to limited partners' equity for the three-, nine-, and twelve-month periods ended September 29, 2013March 30, 2014: and March 31, 2013:
| | | | | | | | | | | | | | | | 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 | ) |
| | | | | | | | | | | | | | | | 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, 2013 | | $ | (15,013 | ) | | $ | 5 |
| | $ | (15,008 | ) | | | | | | | | | Other comprehensive income before reclassifications, net of tax $413 and ($932), respectively | | (2,328 | ) | | 1,621 |
| | (707 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income, net of tax ($307) (2) | | 1,678 |
| | — |
| | 1,678 |
| | | | | | | | | Net other comprehensive income | | (650 | ) | | 1,621 |
| | 971 |
| | | | | | | | | March 30, 2014 | | $ | (15,663 | ) | | $ | 1,626 |
| | $ | (14,037 | ) |
(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 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 | ) |
| | | | | | | | | | | | | | | | 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, net of tax $326 and ($174), respectively | | 1,940 |
| | 301 |
| | 2,241 |
| | | | | | | | | Amounts reclassified from accumulated other comprehensive income, net of tax ($1,229) (2) | | 6,945 |
| | — |
| | 6,945 |
| | | | | | | | | Net other comprehensive income | | 8,885 |
| | 301 |
| | 9,186 |
| | | | | | | | | March 31, 2013 | | $ | (16,864 | ) | | $ | (2,450 | ) | | $ | (19,314 | ) |
(1) All amounts are net of tax. Amounts in parentheses indicate debits. (2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.
| | | | | | | | | | | | | | | | 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 | ) |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at March 31, 2013 | | $ | (16,864 | ) | | $ | (2,450 | ) | | $ | (19,314 | ) | | | | | | | | | Other comprehensive income before reclassifications, net of tax $1,144 and ($2,343), respectively | | (5,514 | ) | | 4,076 |
| | (1,438 | ) | | | | | | | | | Amounts reclassified from accumulated other comprehensive income, net of tax ($1,228) (2) | | 6,715 |
| | — |
| | 6,715 |
| | | | | | | | | Net other comprehensive income | | 1,201 |
| | 4,076 |
| | 5,277 |
| | | | | | | | | March 30, 2014 | | $ | (15,663 | ) | | $ | 1,626 |
| | $ | (14,037 | ) |
(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 |
| | | | | | | | | | | | | | | | Changes in Accumulated Other Comprehensive Income by Component (1) | (In thousands) | | | | | | | | | | Gains and Losses | | | | | | | | on Cash Flow Hedges | | Foreign Currency Items | | | | | | | | | | Total | Balance at March 25, 2012 | | $ | (25,549 | ) | | $ | (4,289 | ) | | $ | (29,838 | ) | | | | | | | | | Other comprehensive income before reclassifications, net of tax ($298) and ($1,058), respectively | | 1,988 |
| | 1,839 |
| | 3,827 |
| | | | | | | | | Amounts reclassified from accumulated other comprehensive income, net of tax ($1,445) (2) | | 6,697 |
| | — |
| | 6,697 |
| | | | | | | | | Net other comprehensive income | | 8,685 |
| | 1,839 |
| | 10,524 |
| | | | | | | | | March 31, 2013 | | $ | (16,864 | ) | | $ | (2,450 | ) | | $ | (19,314 | ) |
(1) All amounts are net of tax. Amounts in parentheses indicate debits. (2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.
| | | | | | | | | | | | | | | | | | | | | | Reclassifications Out of Accumulated Other Comprehensive Income (1) | (In thousands) | | | | | | | | | | | | Details about Accumulated Other Comprehensive Income Components | | Amount Reclassified from Accumulated Other Comprehensive Income | | Affected Line Item in the Statement Where Net Income is Presented | Gains and losses on cash flow hedges | | 3 months ended 3/30/14 | | 3 months ended 3/31/13 | | 12 months ended 3/30/14 | | 12 months ended 3/31/13 | | | | Interest rate contracts | | $ | 1,985 |
| | $ | 8,174 |
| | $ | 7,943 |
| | $ | 8,142 |
| | Net effect of swaps | | | | $ | 1,985 |
| | $ | 8,174 |
| | $ | 7,943 |
| | $ | 8,142 |
| | Total before tax | | | | (307 | ) | | (1,229 | ) | | (1,228 | ) | | (1,445 | ) | | Benefit for taxes | | | | $ | 1,678 |
| | $ | 6,945 |
| | $ | 6,715 |
| | $ | 6,697 |
| | Net of tax |
(1) Amounts in parentheses indicate debits.
(13)(12) Consolidating Financial Information of Guarantors and Issuers:
Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), and Magnum Management Corporation ("Magnum") are the co-issuers of the Partnership's 9.125% notes and the 5.25% notes (see Note 5). The notes have been fully and unconditionally guaranteed, on a joint and several basis, by each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum) that guarantees the Partnership's senior secured credit facilities. There are no non-guarantor subsidiaries.
The following consolidating schedules present condensed financial information for Cedar Fair, L.P., Cedar Canada, and Magnum, the co-issuers, and each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum), the guarantors (on a combined basis), as of September 29, 2013March 30, 2014, December 31, 2012,2013, and September 30, 2012March 31, 2013 and for the three nine and twelve month periods ended September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, the Partnership has included the accompanying condensed consolidating financial statements.
SinceThe Partnership adopted ASU 2013-04, “Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date" as of January 1, 2014. The debt disclosed on the unaudited balance sheets as of March 31, 2014, December 31, 2013 and March 31, 2013 reflect the adoption of this guidance. For the periods ended December 31, 2013 and March 31, 2013, the debt disclosed and related items have been adjusted to reflect only the amounts of debt Cedar Fair, L.P.,L.P, Cedar Canada, and Magnum are co-issuershave recorded on their books.
In addition to making the retrospective adjustments to the balance sheets related to the adoption of ASU 2013-14, the notesUnaudited Condensed Consolidating Statements of Cash Flows for the three and co-borrowers undertwelve month periods ended March 31, 2013 have been revised to correct the presentation of income from investments in affiliates and other intercompany transactions as an adjustment to cash flows from operating activities. We previously reported the following amounts as cash flows from (for) investing activities. | | | | | | | | | | | | | | | | | | | | | | | | | | (in thousands) | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Three months ended March 31, 2013 | | | | | | | | | | | | | Investment in joint ventures and affiliates | | $ | 65,636 |
| | $ | 58,171 |
| | $ | (2,442 | ) | | $ | 32,098 |
| | $ | (153,463 | ) | | $ | — |
| | | | | | | | | | | | | | Twelve months ended March 31, 2013 | | | | | | | | | | | | | Investment in joint ventures and affiliates | | 43,043 |
| | (49,642 | ) | | (2,479 | ) | | 4,568 |
| | 4,510 |
| | — |
|
In addition, the Unaudited Condensed Consolidating Statement of Cash Flows for the twelve month period ended March 31, 2013 Credit Agreement, all outstanding debt has been equally reflected within each co-issuer'srevised to correct the presentation of cash received by a co-issuer subsidiary (Magnum), related to intercompany term debt as cash flows from investing activities. We previously reported an September 29, 2013, December 31, 2012 and September 30, 2012$104.2 million balance sheets in the accompanying condensed consolidating financial statements.intercompany term debt receipt as cash flows from financing activities.
The consolidating financial information has been corrected forThese revisions had no effect on the information described in Note 11.
Partnership's Unaudited Condensed Consolidated Balance Sheets, Statements of Operations and Comprehensive Income, Statements of Partner's Equity, or Statements of Cash Flows.
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET September 29, 2013March 30, 2014
(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. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 571 |
| | $ | 3,524 |
| | $ | 4,772 |
| | $ | — |
| | $ | 8,867 |
| Receivables | | 59 |
| | 96,547 |
| | 76,669 |
| | 530,662 |
| | (684,307 | ) | | 19,630 |
| Inventories | | — |
| | 3,794 |
| | 2,841 |
| | 31,629 |
| | — |
| | 38,264 |
| Current deferred tax asset | | — |
| | 22,409 |
| | 800 |
| | 3,444 |
| | — |
| | 26,653 |
| Other current assets | | 325 |
| | 10,578 |
| | 5,589 |
| | 15,891 |
| | (2,363 | ) | | 30,020 |
| | | 384 |
| | 133,899 |
| | 89,423 |
| | 586,398 |
| | (686,670 | ) | | 123,434 |
| Property and Equipment (net) | | 455,780 |
| | 8,110 |
| | 240,175 |
| | 829,897 |
| | — |
| | 1,533,962 |
| Investment in Park | | 443,179 |
| | 744,425 |
| | 138,604 |
| | 35,052 |
| | (1,361,260 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 113,249 |
| | 111,218 |
| | — |
| | 233,528 |
| Other Intangibles, net | | — |
| | — |
| | 16,037 |
| | 22,883 |
| | — |
| | 38,920 |
| Deferred Tax Asset | | — |
| | 30,296 |
| | — |
| | 117 |
| | (30,413 | ) | | — |
| Intercompany Receivable | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Other Assets | | 12,213 |
| | 22,179 |
| | 6,087 |
| | 2,912 |
| | — |
| | 43,391 |
| | | $ | 920,617 |
| | $ | 938,909 |
| | $ | 603,575 |
| | $ | 1,588,477 |
| | $ | (2,078,343 | ) | | $ | 1,973,235 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 827 |
| | $ | 590 |
| | $ | 33 |
| | $ | — |
| | $ | — |
| | $ | 1,450 |
| Accounts payable | | 173,364 |
| | 230,516 |
| | 10,818 |
| | 314,637 |
| | (684,307 | ) | | 45,028 |
| Deferred revenue | | — |
| | 85 |
| | 4,048 |
| | 66,015 |
| | — |
| | 70,148 |
| Accrued interest | | 2,580 |
| | 1,567 |
| | 5,926 |
| | — |
| | — |
| | 10,073 |
| Accrued taxes | | 4,757 |
| | 849 |
| | — |
| | 3,209 |
| | (2,363 | ) | | 6,452 |
| Accrued salaries, wages and benefits | | — |
| | 18,183 |
| | 503 |
| | 5,833 |
| | — |
| | 24,519 |
| Self-insurance reserves | | — |
| | 5,431 |
| | 1,664 |
| | 15,601 |
| | — |
| | 22,696 |
| Other accrued liabilities | | 280 |
| | 3,086 |
| | 125 |
| | 1,405 |
| | — |
| | 4,896 |
| | | 181,808 |
| | 260,307 |
| | 23,117 |
| | 406,700 |
| | (686,670 | ) | | 185,262 |
| Deferred Tax Liability | | — |
| | — |
| | 56,045 |
| | 131,649 |
| | (30,413 | ) | | 157,281 |
| Derivative Liability | | 16,281 |
| | 11,508 |
| | — |
| | — |
| | — |
| | 27,789 |
| Other Liabilities | | — |
| | 4,358 |
| | — |
| | 3,397 |
| | — |
| | 7,755 |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 55,000 |
| | — |
| | — |
| | — |
| | — |
| | 55,000 |
| Term debt | | 351,840 |
| | 251,371 |
| | 14,189 |
| | — |
| | — |
| | 617,400 |
| Notes | | 294,897 |
| | 205,103 |
| | 401,957 |
| | — |
| | — |
| | 901,957 |
| | | 701,737 |
| | 456,474 |
| | 416,146 |
| | — |
| | — |
| | 1,574,357 |
| | | | | | | | | | | | | | Equity | | 20,791 |
| | 206,262 |
| | 108,267 |
| | 1,046,731 |
| | (1,361,260 | ) | | 20,791 |
| | | $ | 920,617 |
| | $ | 938,909 |
| | $ | 603,575 |
| | $ | 1,588,477 |
| | $ | (2,078,343 | ) | | $ | 1,973,235 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET December 31, 20122013 (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. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 75,000 |
| | $ | 4,144 |
| | $ | 35,575 |
| | $ | 3,337 |
| | $ | — |
| | $ | 118,056 |
| Receivables | | 6 |
| | 115,972 |
| | 67,829 |
| | 552,633 |
| | (715,107 | ) | | 21,333 |
| Inventories | | — |
| | 1,968 |
| | 1,898 |
| | 22,214 |
| | — |
| | 26,080 |
| Current deferred tax asset | | — |
| | 5,430 |
| | 800 |
| | 3,445 |
| | — |
| | 9,675 |
| Other current assets | | 599 |
| | 4,443 |
| | 14,266 |
| | 7,764 |
| | (15,719 | ) | | 11,353 |
| | | 75,605 |
| | 131,957 |
| | 120,368 |
| | 589,393 |
| | (730,826 | ) | | 186,497 |
| Property and Equipment (net) | | 447,724 |
| | 976 |
| | 243,208 |
| | 813,855 |
| | — |
| | 1,505,763 |
| Investment in Park | | 514,948 |
| | 796,735 |
| | 142,668 |
| | 63,948 |
| | (1,518,299 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 117,810 |
| | 111,218 |
| | — |
| | 238,089 |
| Other Intangibles, net | | — |
| | — |
| | 16,683 |
| | 22,788 |
| | — |
| | 39,471 |
| Deferred Tax Asset | | — |
| | 31,122 |
| | — |
| | 117 |
| | (31,239 | ) | | — |
| Other Assets | | 25,210 |
| | 10,002 |
| | 6,657 |
| | 2,938 |
| | — |
| | 44,807 |
| | | $ | 1,072,548 |
| | $ | 970,792 |
| | $ | 647,394 |
| | $ | 1,604,257 |
| | $ | (2,280,364 | ) | | $ | 2,014,627 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Accounts payable | | $ | 259,850 |
| | $ | 188,818 |
| | $ | 17,632 |
| | $ | 262,029 |
| | $ | (715,107 | ) | | $ | 13,222 |
| Deferred revenue | | — |
| | — |
| | 2,815 |
| | 41,706 |
| | — |
| | 44,521 |
| Accrued interest | | 4,637 |
| | 3,223 |
| | 15,341 |
| | — |
| | — |
| | 23,201 |
| Accrued taxes | | 4,609 |
| | — |
| | — |
| | 30,591 |
| | (15,719 | ) | | 19,481 |
| Accrued salaries, wages and benefits | | — |
| | 21,596 |
| | 1,101 |
| | 6,503 |
| | — |
| | 29,200 |
| Self-insurance reserves | | — |
| | 5,757 |
| | 1,742 |
| | 16,154 |
| | — |
| | 23,653 |
| Other accrued liabilities | | 1,146 |
| | 2,993 |
| | 181 |
| | 1,201 |
| | — |
| | 5,521 |
| | | 270,242 |
| | 222,387 |
| | 38,812 |
| | 358,184 |
| | (730,826 | ) | | 158,799 |
| Deferred Tax Liability | | — |
| | — |
| | 57,704 |
| | 131,648 |
| | (31,239 | ) | | 158,113 |
| Derivative Liability | | 15,610 |
| | 11,052 |
| | — |
| | — |
| | — |
| | 26,662 |
| Other Liabilities | | — |
| | 7,858 |
| | — |
| | 3,432 |
| | — |
| | 11,290 |
| Long-Term Debt: | | | | | | | | | | | | | Term debt | | 352,668 |
| | 251,961 |
| | 14,221 |
| | — |
| | — |
| | 618,850 |
| Notes | | 294,897 |
| | 205,103 |
| | 401,782 |
| | — |
| | — |
| | 901,782 |
| | | 647,565 |
| | 457,064 |
| | 416,003 |
| | — |
| | — |
| | 1,520,632 |
| | | | | | | | | | | | | | Equity | | 139,131 |
| | 272,431 |
| | 134,875 |
| | 1,110,993 |
| | (1,518,299 | ) | | 139,131 |
| | | $ | 1,072,548 |
| | $ | 970,792 |
| | $ | 647,394 |
| | $ | 1,604,257 |
| | $ | (2,280,364 | ) | | $ | 2,014,627 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET September 30, 2012 (As restated)March 31, 2013
(In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | 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. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | ASSETS | | | | | | | | | | | | | Current Assets: | | | | | | | | | | | | | Cash and cash equivalents | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| Receivables | | 682 |
| | 79,472 |
| | 67,302 |
| | 436,595 |
| | (570,709 | ) | | 13,342 |
| Inventories | | — |
| | 3,645 |
| | 3,032 |
| | 32,386 |
| | — |
| | 39,063 |
| Current deferred tax asset | | — |
| | 31,543 |
| | 816 |
| | 3,663 |
| | — |
| | 36,022 |
| Other current assets | | 207 |
| | 9,630 |
| | 1,618 |
| | 16,260 |
| | — |
| | 27,715 |
| | | 889 |
| | 125,022 |
| | 76,893 |
| | 494,085 |
| | (570,709 | ) | | 126,180 |
| Property and Equipment (net) | | 457,484 |
| | 1,003 |
| | 262,941 |
| | 849,424 |
| | — |
| | 1,570,852 |
| Investment in Park | | 419,501 |
| | 714,013 |
| | 115,401 |
| | 21,689 |
| | (1,270,604 | ) | | — |
| Goodwill | | 9,061 |
| | — |
| | 123,374 |
| | 111,218 |
| | — |
| | 243,653 |
| Other Intangibles, net | | — |
| | — |
| | 17,470 |
| | 22,853 |
| | — |
| | 40,323 |
| Deferred Tax Asset | | — |
| | 34,890 |
| | — |
| | 90 |
| | (34,980 | ) | | — |
| Other Assets | | 14,581 |
| | 10,291 |
| | 7,473 |
| | 2,303 |
| | — |
| | 34,648 |
| | | $ | 901,516 |
| | $ | 885,219 |
| | $ | 603,552 |
| | $ | 1,501,662 |
| | $ | (1,876,293 | ) | | $ | 2,015,656 |
| LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | Current Liabilities: | | | | | | | | | | | | | Current maturities of long-term debt | | $ | 3,332 |
| | $ | 2,823 |
| | $ | 145 |
| | $ | — |
| | $ | — |
| | $ | 6,300 |
| Accounts payable | | 103,654 |
| | 215,425 |
| | 3,891 |
| | 285,182 |
| | (570,709 | ) | | 37,443 |
| Deferred revenue | | — |
| | — |
| | 6,679 |
| | 59,505 |
| | — |
| | 66,184 |
| Accrued interest | | 1,444 |
| | 916 |
| | 5,979 |
| | — |
| | — |
| | 8,339 |
| Accrued taxes | | 4,790 |
| | 390 |
| | 331 |
| | 3,489 |
| | — |
| | 9,000 |
| Accrued salaries, wages and benefits | | — |
| | 13,483 |
| | 1,095 |
| | 5,604 |
| | — |
| | 20,182 |
| Self-insurance reserves | | — |
| | 5,324 |
| | 1,696 |
| | 16,537 |
| | — |
| | 23,557 |
| Other accrued liabilities | | 589 |
| | 5,161 |
| | 133 |
| | 1,984 |
| | — |
| | 7,867 |
| | | 113,809 |
| | 243,522 |
| | 19,949 |
| | 372,301 |
| | (570,709 | ) | | 178,872 |
| Deferred Tax Liability | | — |
| | — |
| | 62,700 |
| | 126,867 |
| | (34,980 | ) | | 154,587 |
| Derivative Liability | | 18,594 |
| | 12,437 |
| | — |
| | — |
| | — |
| | 31,031 |
| Other Liabilities | | — |
| | 4,185 |
| | — |
| | 3,500 |
| | — |
| | 7,685 |
| Long-Term Debt: | | | | | | | | | | | | | Revolving credit loans | | 96,000 |
| | — |
| | — |
| | — |
| | — |
| | 96,000 |
| Term debt | | 355,690 |
| | 253,677 |
| | 14,333 |
| | — |
| | — |
| | 623,700 |
| Notes | | 294,897 |
| | 205,103 |
| | 401,255 |
| | — |
| | — |
| | 901,255 |
| | | 746,587 |
| | 458,780 |
| | 415,588 |
| | — |
| | — |
| | 1,620,955 |
| | | | | | | | | | | | | | Equity | | 22,526 |
| | 166,295 |
| | 105,315 |
| | 998,994 |
| | (1,270,604 | ) | | 22,526 |
| | | $ | 901,516 |
| | $ | 885,219 |
| | $ | 603,552 |
| | $ | 1,501,662 |
| | $ | (1,876,293 | ) | | $ | 2,015,656 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Three Months Ended September 29, 2013 March 30, 2014 (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. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 4,755 |
| | $ | 8,679 |
| | $ | 151 |
| | $ | 40,312 |
| | $ | (13,431 | ) | | $ | 40,466 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise, and games revenues | | — |
| | — |
| | 1 |
| | 4,984 |
| | — |
| | 4,985 |
| Operating expenses | | 1,348 |
| | 22,462 |
| | 6,937 |
| | 63,034 |
| | (13,431 | ) | | 80,350 |
| Selling, general and administrative | | 1,396 |
| | 16,672 |
| | 873 |
| | 2,463 |
| | — |
| | 21,404 |
| Depreciation and amortization | | 474 |
| | 9 |
| | — |
| | 3,824 |
| | — |
| | 4,307 |
| Gain on sale of other assets | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Loss on impairment / retirement of fixed assets, net | | 249 |
| | — |
| | — |
| | 748 |
| | — |
| | 997 |
| | | 3,467 |
| | 39,143 |
| | 7,811 |
| | 75,053 |
| | (13,431 | ) | | 112,043 |
| Operating income | | 1,288 |
| | (30,464 | ) | | (7,660 | ) | | (34,741 | ) | | — |
| | (71,577 | ) | Interest expense (income), net | | 10,199 |
| | 7,011 |
| | 9,468 |
| | (2,019 | ) | | — |
| | 24,659 |
| Net effect of swaps | | 194 |
| | 177 |
| | — |
| | — |
| | — |
| | 371 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | 17,184 |
| | — |
| | — |
| | 17,184 |
| Other (income) expense | | 187 |
| | (3,274 | ) | | 374 |
| | 2,713 |
| | — |
| | — |
| Loss from investment in affiliates | | 73,588 |
| | 47,143 |
| | 4,064 |
| | 28,244 |
| | (153,039 | ) | | — |
| Loss before taxes | | (82,880 | ) | | (81,521 | ) | | (38,750 | ) | | (63,679 | ) | | 153,039 |
| | (113,791 | ) | Provision (benefit) for taxes | | 660 |
| | (10,422 | ) | | (10,506 | ) | | (9,983 | ) | | — |
| | (30,251 | ) | Net loss | | $ | (83,540 | ) | | $ | (71,099 | ) | | $ | (28,244 | ) | | $ | (53,696 | ) | | $ | 153,039 |
| | $ | (83,540 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,621 |
| | — |
| | 1,621 |
| | — |
| | (1,621 | ) | | 1,621 |
| Unrealized income (loss) on cash flow hedging derivatives | | (650 | ) | | (173 | ) | | — |
| | — |
| | 173 |
| | (650 | ) | Other comprehensive income (loss), (net of tax) | | 971 |
| | (173 | ) | | 1,621 |
| | — |
| | (1,448 | ) | | 971 |
| Total Comprehensive Income | | $ | (82,569 | ) | | $ | (71,272 | ) | | $ | (26,623 | ) | | $ | (53,696 | ) | | $ | 151,591 |
| | $ | (82,569 | ) |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Three Months Ended September 30, 2012 (As restated)March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 79,663 |
| | $ | 141,134 |
| | $ | 88,334 |
| | $ | 464,902 |
| | $ | (220,588 | ) | | $ | 553,445 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 6,447 |
| | 40,906 |
| | — |
| | 47,353 |
| Operating expenses | | 1,368 |
| | 74,191 |
| | 18,736 |
| | 289,604 |
| | (220,588 | ) | | 163,311 |
| Selling, general and administrative | | 1,853 |
| | 32,627 |
| | 4,822 |
| | 13,691 |
| | — |
| | 52,993 |
| Depreciation and amortization | | 19,209 |
| | 10 |
| | 9,430 |
| | 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. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 4,317 |
| | $ | 8,371 |
| | $ | 289 |
| | $ | 41,510 |
| | $ | (12,688 | ) | | $ | 41,799 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise, and games revenues | | — |
| | — |
| | — |
| | 5,037 |
| | — |
| | 5,037 |
| Operating expenses | | 1,423 |
| | 21,606 |
| | 5,941 |
| | 60,375 |
| | (12,688 | ) | | 76,657 |
| Selling, general and administrative | | 1,292 |
| | 16,613 |
| | 711 |
| | 2,423 |
| | — |
| | 21,039 |
| Depreciation and amortization | | 475 |
| | 9 |
| | — |
| | 4,302 |
| | — |
| | 4,786 |
| Loss on impairment / retirement of fixed assets, net | | 36 |
| | — |
| | 478 |
| | 86 |
| | — |
| | 600 |
| | | 3,226 |
| | 38,228 |
| | 7,130 |
| | 72,223 |
| | (12,688 | ) | | 108,119 |
| Operating income | | 1,091 |
| | (29,857 | ) | | (6,841 | ) | | (30,713 | ) | | — |
| | (66,320 | ) | Interest expense, net | | 10,512 |
| | 7,677 |
| | 9,764 |
| | (2,230 | ) | | — |
| | 25,723 |
| Net effect of swaps | | 5,635 |
| | 3,576 |
| | — |
| | — |
| | — |
| | 9,211 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | 8,958 |
| | — |
| | — |
| | 8,958 |
| Other (income) expense | | 188 |
| | (2,388 | ) | | 800 |
| | 1,400 |
| | — |
| | — |
| Loss from investment in affiliates | | 72,096 |
| | 35,640 |
| | 3,520 |
| | 21,227 |
| | (132,483 | ) | | — |
| Loss before taxes | | (108,515 | ) | | (87,143 | ) | | (30,500 | ) | | (51,110 | ) | | 132,483 |
| | (144,785 | ) | Provision (benefit) for taxes | | 611 |
| | (17,665 | ) | | (9,254 | ) | | (9,351 | ) | | — |
| | (35,659 | ) | Net loss | | $ | (109,126 | ) | | $ | (69,478 | ) | | $ | (21,246 | ) | | $ | (41,759 | ) | | $ | 132,483 |
| | $ | (109,126 | ) | Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 301 |
| | — |
| | 301 |
| | — |
| | (301 | ) | | 301 |
| Unrealized income (loss) on cash flow hedging derivatives | | 8,885 |
| | 2,535 |
| | — |
| | — |
| | (2,535 | ) | | 8,885 |
| Other comprehensive income (loss), (net of tax) | | 9,186 |
| | 2,535 |
| | 301 |
| | — |
| | (2,836 | ) | | 9,186 |
| Total Comprehensive Income | | $ | (99,940 | ) | | $ | (66,943 | ) | | $ | (20,945 | ) | | $ | (41,759 | ) | | $ | 129,647 |
| | $ | (99,940 | ) |
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended 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 | | $ | 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 September 29, 2013March 30, 2014 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 152,907 |
| | $ | 296,385 |
| | $ | 127,554 |
| | $ | 1,005,271 |
| | $ | (448,878 | ) | | $ | 1,133,239 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise, and games revenues | | — |
| | — |
| | 9,323 |
| | 82,397 |
| | — |
| | 91,720 |
| Operating expenses | | 5,928 |
| | 184,460 |
| | 48,766 |
| | 685,761 |
| | (448,878 | ) | | 476,037 |
| Selling, general and administrative | | 5,821 |
| | 100,884 |
| | 11,146 |
| | 34,926 |
| | — |
| | 152,777 |
| Depreciation and amortization | | 36,806 |
| | 37 |
| | 17,333 |
| | 67,832 |
| | — |
| | 122,008 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (8,743 | ) | | — |
| | (8,743 | ) | Loss on impairment / retirement of fixed assets, net | | 637 |
| | — |
| | 1 |
| | 2,298 |
| | — |
| | 2,936 |
| | | 49,192 |
| | 285,381 |
| | 86,569 |
| | 864,471 |
| | (448,878 | ) | | 836,735 |
| Operating income | | 103,715 |
| | 11,004 |
| | 40,985 |
| | 140,800 |
| | — |
| | 296,504 |
| Interest (income) expense, net | | 42,317 |
| | 28,209 |
| | 39,080 |
| | (7,753 | ) | | — |
| | 101,853 |
| Net effect of swaps | | (1,251 | ) | | (706 | ) | | — |
| | — |
| | — |
| | (1,957 | ) | Loss on early debt extinguishment | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Unrealized / realized foreign currency loss | | — |
| | — |
| | 37,167 |
| | — |
| | — |
| | 37,167 |
| Other (income) expense | | 749 |
| | (12,143 | ) | | 3,253 |
| | 8,141 |
| | — |
| | — |
| Income (loss) from investment in affiliates | | (82,065 | ) | | (26,017 | ) | | (16,894 | ) | | 9,494 |
| | 115,482 |
| | — |
| Income (loss) before taxes | | 143,965 |
| | 21,661 |
| | (21,621 | ) | | 130,918 |
| | (115,482 | ) | | 159,441 |
| Provision (benefit) for taxes | | 10,175 |
| | (4,890 | ) | | (12,108 | ) | | 32,474 |
| | — |
| | 25,651 |
| Net income (loss) | | $ | 133,790 |
| | $ | 26,551 |
| | $ | (9,513 | ) | | $ | 98,444 |
| | $ | (115,482 | ) | | $ | 133,790 |
| Other comprehensive income, (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 4,076 |
| | — |
| | 4,076 |
| | — |
| | (4,076 | ) | | 4,076 |
| Unrealized income on cash flow hedging derivatives | | 1,201 |
| | 140 |
| | — |
| | — |
| | (140 | ) | | 1,201 |
| Other comprehensive income, (net of tax) | | 5,277 |
| | 140 |
| | 4,076 |
| | — |
| | (4,216 | ) | | 5,277 |
| Total Comprehensive Income | | $ | 139,067 |
| | $ | 26,691 |
| | $ | (5,437 | ) | | $ | 98,444 |
| | $ | (119,698 | ) | | $ | 139,067 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME For the Twelve Months Ended September 30, 2012 (As restated)March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 147,733 |
| | $ | 261,878 |
| | $ | 142,250 |
| | $ | 941,465 |
| | $ | (409,232 | ) | | $ | 1,084,094 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,531 |
| | 85,471 |
| | — |
| | 96,002 |
| Operating expenses | | 5,452 |
| | 180,665 |
| | 47,134 |
| | 636,106 |
| | (409,232 | ) | | 460,125 |
| Selling, general and administrative | | 6,865 |
| | 90,892 |
| | 11,650 |
| | 36,381 |
| | — |
| | 145,788 |
| Depreciation and amortization | | 37,698 |
| | 41 |
| | 18,300 |
| | 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. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | Net revenues | | $ | 148,576 |
| | $ | 263,930 |
| | $ | 140,441 |
| | $ | 941,246 |
| | $ | (412,138 | ) | | $ | 1,082,055 |
| Costs and expenses: | | | | | | | | | | | | | Cost of food, merchandise, and games revenues | | — |
| | — |
| | 10,316 |
| | 85,682 |
| | — |
| | 95,998 |
| Operating expenses | | 5,468 |
| | 177,526 |
| | 48,147 |
| | 637,772 |
| | (412,138 | ) | | 456,775 |
| Selling, general and administrative | | 6,455 |
| | 89,532 |
| | 11,086 |
| | 34,293 |
| | — |
| | 141,366 |
| Depreciation and amortization | | 37,439 |
| | 40 |
| | 18,199 |
| | 71,335 |
| | — |
| | 127,013 |
| (Gain) on sale of other assets | | — |
| | — |
| | — |
| | (6,625 | ) | | — |
| | (6,625 | ) | Loss (gain) on impairment / retirement of fixed assets, net | | 25,089 |
| | — |
| | 474 |
| | 5,281 |
| | — |
| | 30,844 |
| | | 74,451 |
| | 267,098 |
| | 88,222 |
| | 827,738 |
| | (412,138 | ) | | 845,371 |
| Operating income (loss) | | 74,125 |
| | (3,168 | ) | | 52,219 |
| | 113,508 |
| | — |
| | 236,684 |
| Interest expense, net | | 47,879 |
| | 30,390 |
| | 40,231 |
| | (9,013 | ) | | — |
| | 109,487 |
| Net effect of swaps | | 5,324 |
| | 3,365 |
| | — |
| | — |
| | — |
| | 8,689 |
| Loss on early debt extinguishment | | 21,175 |
| | 12,781 |
| | 617 |
| | — |
| | — |
| | 34,573 |
| Unrealized / realized foreign currency gain | | — |
| | — |
| | 8,152 |
| | — |
| | — |
| | 8,152 |
| Other (income) expense | | 750 |
| | (8,860 | ) | | 2,623 |
| | 5,487 |
| | — |
| | — |
| Income (loss) from investment in affiliates | | (68,417 | ) | | (53,593 | ) | | (14,307 | ) | | (18,503 | ) | | 154,820 |
| | — |
| Income before taxes | | 67,414 |
| | 12,749 |
| | 14,903 |
| | 135,537 |
| | (154,820 | ) | | 75,783 |
| Provision (benefit) for taxes | | 9,269 |
| | (15,849 | ) | | (3,507 | ) | | 27,725 |
| | — |
| | 17,638 |
| Net income | | $ | 58,145 |
| | $ | 28,598 |
| | $ | 18,410 |
| | $ | 107,812 |
| | $ | (154,820 | ) | | $ | 58,145 |
| Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | Cumulative foreign currency translation adjustment | | 1,839 |
| | — |
| | 1,839 |
| | — |
| | (1,839 | ) | | 1,839 |
| Unrealized income (loss) on cash flow hedging derivatives | | 8,685 |
| | 2,551 |
| | — |
| | — |
| | (2,551 | ) | | 8,685 |
| Other comprehensive income (loss), (net of tax) | | 10,524 |
| | 2,551 |
| | 1,839 |
| | — |
| | (4,390 | ) | | 10,524 |
| Total Comprehensive Income | | $ | 68,669 |
| | $ | 31,149 |
| | $ | 20,249 |
| | $ | 107,812 |
| | $ | (159,210 | ) | | $ | 68,669 |
|
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended September 29, 2013March 30, 2014 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | (73,627 | ) | | $ | (3,001 | ) | | $ | (26,042 | ) | | $ | 20,317 |
| | $ | (903 | ) | | $ | (83,256 | ) | CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Capital expenditures | | (16,379 | ) | | (4 | ) | | (5,077 | ) | | (18,882 | ) | | — |
| | (40,342 | ) | Net cash from investing activities | | (16,379 | ) | | (4 | ) | | (5,077 | ) | | (18,882 | ) | | — |
| | (40,342 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 55,000 |
| | — |
| | — |
| | — |
| | — |
| | 55,000 |
| Distributions paid | | (39,994 | ) | | — |
| | — |
| | — |
| | 903 |
| | (39,091 | ) | Excess tax benefit from unit-based compensation expense | | — |
| | (568 | ) | | — |
| | — |
| | — |
| | (568 | ) | Net cash (for) financing activities | | 15,006 |
| | (568 | ) | | — |
| | — |
| | 903 |
| | 15,341 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (932 | ) | | — |
| | — |
| | (932 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | (75,000 | ) | | (3,573 | ) | | (32,051 | ) | | 1,435 |
| | — |
| | (109,189 | ) | Balance, beginning of period | | 75,000 |
| | 4,144 |
| | 35,575 |
| | 3,337 |
| | — |
| | 118,056 |
| Balance, end of period | | $ | — |
| | $ | 571 |
| | $ | 3,524 |
| | $ | 4,772 |
| | $ | — |
| | $ | 8,867 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the NineThree Months Ended September 30, 2012 (As restated)March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM 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. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | (52,034 | ) | | $ | 8,508 |
| | $ | (44,472 | ) | | $ | 19,331 |
| | $ | — |
| | $ | (68,667 | ) | CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Capital expenditures | | (17,866 | ) | | — |
| | (600 | ) | | (17,363 | ) | | — |
| | (35,829 | ) | Net cash (for) investing activities | | (17,866 | ) | | — |
| | (600 | ) | | (17,363 | ) | | — |
| | (35,829 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | 96,000 |
| | — |
| | — |
| | — |
| | — |
| | 96,000 |
| Term debt borrowings | | 359,022 |
| | 256,500 |
| — |
| 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Payment of debt issuance costs | | (14,763 | ) | | (8,538 | ) | | (190 | ) | | — |
| | — |
| | (23,491 | ) | Term debt payments, including early termination penalties | | (654,568 | ) | | (462,054 | ) | | (14,478 | ) | | — |
| | — |
| | (1,131,100 | ) | Distributions paid | | (35,688 | ) | | 868 |
| | — |
| | — |
| | — |
| | (34,820 | ) | Exercise of limited partnership unit options | | — |
| | 28 |
| | — |
| | — |
| | — |
| | 28 |
| Excess tax benefit from unit-based compensation expense | | — |
| | (127 | ) | | — |
| | — |
| | — |
| | (127 | ) | Net cash from (for) financing activities | | 44,900 |
| | (8,220 | ) | | (190 | ) | | — |
| | — |
| | 36,490 |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (786 | ) | | — |
| | — |
| | (786 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase for the period | | (25,000 | ) | | 288 |
| | (46,048 | ) | | 1,968 |
| | — |
| | (68,792 | ) | Balance, beginning of period | | 25,000 |
| | 444 |
| | 50,173 |
| | 3,213 |
| | — |
| | 78,830 |
| Balance, end of period | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 29, 2013March 30, 2014 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM OPERATING ACTIVITIES | | $ | 253,410 |
| | $ | 3,318 |
| | $ | 15,737 |
| | $ | 40,148 |
| | $ | (3,531 | ) | | $ | 309,082 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Sale of other assets | | — |
| | — |
| | — |
| | 15,297 |
| | — |
| | 15,297 |
| Capital expenditures | | (54,767 | ) | | (4 | ) | | (14,201 | ) | | (55,854 | ) | | — |
| | (124,826 | ) | Net cash (for) investing activities | | (54,767 | ) | | (4 | ) | | (14,201 | ) | | (40,557 | ) | | — |
| | (109,529 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | (41,000 | ) | | — |
| | — |
| | — |
| | — |
| | (41,000 | ) | Term debt payments, including early termination penalties | | (6,612 | ) | | (4,281 | ) | | (257 | ) | | — |
| | — |
| | (11,150 | ) | Distributions paid | | (151,259 | ) | | — |
| | — |
| | — |
| | 3,531 |
| | (147,728 | ) | Exercise of limited partnership unit options | | — |
| | 24 |
| | — |
| | — |
| | — |
| | 24 |
| Payment of debt issuance costs | | 228 |
| | 368 |
| | (354 | ) | | — |
| | — |
| | 242 |
| Excess tax benefit from unit-based compensation expense | | — |
| | 414 |
| | — |
| | — |
| | — |
| | 414 |
| Net cash (for) financing activities | | (198,643 | ) | | (3,475 | ) | | (611 | ) | | — |
| | 3,531 |
| | (199,198 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (1,526 | ) | | — |
| | — |
| | (1,526 | ) | CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | (161 | ) | | (601 | ) | | (409 | ) | | — |
| | (1,171 | ) | Balance, beginning of period | | — |
| | 732 |
| | 4,125 |
| | 5,181 |
| | — |
| | 10,038 |
| Balance, end of period | | $ | — |
| | $ | 571 |
| | $ | 3,524 |
| | $ | 4,772 |
| | $ | — |
| | $ | 8,867 |
| | | | | | | | | | | | | |
CEDAR FAIR, L.P. UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the Twelve Months Ended September 30, 2012 (As restated)March 31, 2013 (In thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 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 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total | | | | | | | | | | | | | | NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 231,264 |
| | $ | (87,117 | ) | | $ | 14,067 |
| | $ | 139,733 |
| | $ | — |
| | $ | 297,947 |
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | Intercompany term debt receipts | | — |
| | 104,165 |
| | — |
| | — |
| | (104,165 | ) | | — |
| Sale of other assets | | 1,173 |
| | — |
| | — |
| | 14,885 |
| | — |
| | 16,058 |
| Capital expenditures | | (43,156 | ) | | (8 | ) | | (8,023 | ) | | (52,075 | ) | | — |
| | (103,262 | ) | Net cash (for) investing activities | | (41,983 | ) | | 104,157 |
| | (8,023 | ) | | (37,190 | ) | | (104,165 | ) | | (87,204 | ) | CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | Net borrowings on revolving credit loans | | (57,000 | ) | | — |
| | (2,004 | ) | | — |
| | — |
| | (59,004 | ) | Term debt borrowings | | 359,022 |
| | 256,500 |
| | 14,478 |
| | — |
| | — |
| | 630,000 |
| Note borrowings | | 294,897 |
| | 205,103 |
| | — |
| | — |
| | — |
| | 500,000 |
| Intercompany term debt payments | | — |
| | — |
| | — |
| | (104,165 | ) | | 104,165 |
| | — |
| Term debt payments, including early termination penalties | | (669,035 | ) | | (472,267 | ) | | (14,798 | ) | | — |
| | — |
| | (1,156,100 | ) | Distributions paid | | (102,402 | ) | | 920 |
| | — |
| | — |
| | — |
| | (101,482 | ) | Payment of debt issuance costs | | (14,763 | ) | | (8,537 | ) | | (191 | ) | | — |
| | — |
| | (23,491 | ) | Exercise of limited partnership unit options | | — |
| | 57 |
| | — |
| | — |
| | — |
| | 57 |
| Excess tax benefit from unit-based compensation | | — |
| | 1,519 |
| | — |
| | — |
| | — |
| | 1,519 |
| Net cash from (for) financing activities | | (189,281 | ) | | (16,705 | ) | | (2,515 | ) | | (104,165 | ) | | 104,165 |
| | (208,501 | ) | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 477 |
| | — |
| | — |
| | 477 |
| CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | Net increase (decrease) for the period | | — |
| | 335 |
| | 4,006 |
| | (1,622 | ) | | — |
| | 2,719 |
| Balance, beginning of period | | — |
| | 397 |
| | 119 |
| | 6,803 |
| | — |
| | 7,319 |
| Balance, end of period | | $ | — |
| | $ | 732 |
| | $ | 4,125 |
| | $ | 5,181 |
| | $ | — |
| | $ | 10,038 |
|
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.
Along with attendance and guest per capita statistics, discrete financial information and operating results are prepared 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 thirdfirst quarter of 20132014, there were no changes in the above critical accounting policies previously disclosed in our Annual Report on Form 10-K/A10-K for the year ended December 31, 20122013 except as noted below.. Change in Depreciation Method
Effective January 1, 2013, we changed our 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, we 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, we had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation for all assets. We 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 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-, nine- and twelve-month periods ended September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013. | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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 | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Three months ended | | Twelve months ended | | | 3/30/2014 | | 3/31/2013 | | 3/30/2014 | | 3/31/2013 | | | (13 weeks) | | (13 weeks) | | (52 weeks) | | (53 weeks) | | | (In thousands) | Net income (loss) | | $ | (83,540 | ) | | $ | (109,126 | ) | | $ | 133,790 |
| | $ | 58,145 |
| Interest expense | | 24,732 |
| | 25,763 |
| | 102,040 |
| | 109,579 |
| Interest income | | (73 | ) | | (40 | ) | | (187 | ) | | (92 | ) | Provision (benefit) for taxes | | (30,251 | ) | | (35,659 | ) | | 25,651 |
| | 17,638 |
| Depreciation and amortization | | 4,307 |
| | 4,786 |
| | 122,008 |
| | 127,013 |
| EBITDA | | (84,825 | ) | | (114,276 | ) | | 383,302 |
| | 312,283 |
| Loss on early extinguishment of debt | | — |
| | 34,573 |
| | — |
| | 34,573 |
| Net effect of swaps | | 371 |
| | 9,211 |
| | (1,957 | ) | | 8,689 |
| Unrealized foreign currency loss | | 17,182 |
| | 8,881 |
| | 37,386 |
| | 7,949 |
| Non-cash equity expense | | 3,956 |
| | 2,933 |
| | 6,558 |
| | 4,498 |
| Loss on impairment/retirement of fixed assets, net | | 997 |
| | 600 |
| | 2,936 |
| | 30,844 |
| Gain on sale of other assets | | — |
| | — |
| | (8,743 | ) | | (6,625 | ) | Other non-recurring items (as defined) (1) | | 354 |
| | 805 |
| | 1,256 |
| | 3,264 |
| Adjusted EBITDA | | $ | (61,965 | ) | | $ | (57,273 | ) | | $ | 420,738 |
| | $ | 395,475 |
| | | | | | | | | | (1) The Company's 2013 Credit Agreement references certain costs as non-recurring or unusual. These items are excluded in the calculation of Adjusted EBITDA and have included certain litigation expenses, contract termination costs, and severance expense.
|
Results of Operations:
RestatementFirst Quarter -
We have madeOperating results for the first quarter historically include less than 5% of our full-year revenues and attendance. The results include normal off-season operating, maintenance and administrative expenses at our ten seasonal amusement parks and three outdoor water parks, as well as daily operations at Knott's Berry Farm, which is open year-round, and Castaway Bay, which is generally open daily from Memorial Day to Labor Day plus a correction relating to our uselimited daily schedule for the balance of the composite depreciation method.year. The correction, which impacts the Balance Sheet at September 30, 2012 and the Statement of Operations and Other Comprehensive Income for the three-, nine-, and twelve-month periods ended 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, our initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was reviewed in connection with a response to an SEC comment letter. We ultimately concluded that such disposition was unusual and that an $8.8 millioncharge should have been reflected in the 2011 financial statements.
Nine months ended September 29, 2013
The fiscal nine-month period ended September 29, 2013, consisted of a 39-week period andcurrent quarter included a total of 1,93694 operating days compared with 39 weeks and 2,178to 117 operating days forduring the fiscal nine-month period ended September 30, 2012.first quarter of 2013. The differencedecrease in operating days is primarilywas due to the sale of two non-corea water parks, as well aspark during 2013 and the combination of two parks, Worlds of Fun and Oceans of Fun, into one gate for 2013.
The following table presents key financial information for the nine months ended September 29, 2013 and September 30, 2012:
| | | | | | | | | | | | | | | | | | | 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 nine months ended September 29, 2013 increased $56.3 million to $995.5 million from $939.2 million during the nine months ended September 30, 2012. The increase in revenues reflects a 6%, or $2.46, increase in average in-park guest per capita spending during the first nine months of the year when compared with the first nine 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 5% increaseshift in the admissions per capEaster and a 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 nine-month period, out-of-park revenues increased 7%, or $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 drove higher average daily room rates while maintaining or growing occupancy rates. The increase in overall net revenues includes attendance that was essentially comparable through the first nine months of 2013 when compared with the same period a year ago. The variance in attendance is entirely attributable to the sale of two non-core water parks. Excluding the sale of the water parks, attendance increased 1%, or 195,000 visits on a comparable park basis.
Revenues for the first nine months of the year also reflect the negative impact of exchange rates and the strengthening U.S. dollar on our Canadian operations ($3.6 million) during the period.
For the nine-month period in 2013, operating costs and expenses increased 3%, or $15.6 million, to $595.8 million from $580.2 million for the same period in 2012, the net result of a $7.5 million increase in operating expenses and a $10.0 million increase in selling, general and administrative costs ("SG&A"). These cost increases were offset slightly by a 2%, or $1.9 million decrease in cost of goods sold during the period. The $7.5 million increase in operating expenses was due to increases of approximately $4.3 million in employee costs, $3.2 million in operating supplies and $1.5 million in maintenance materials, offset slightly by a decrease of $2.7 million in insurance expense. The increase in employee costs was primarily due to increased costs of benefits. Operating supplies increased due to premium benefit offerings and improved guest services. The $2.7 million decrease in insurance expense was due to a reduction in insurance settlements and accruals. The $10.0 million increase in SG&A expenses was due primarily to additional marketing efforts and agency advertising costs, and increased full-time employee costs, largely related to performance incentives and an increase in staffing levels.
Depreciation and amortization expense for the period decreased $3.9 million due to several significant assets being fully depreciated at the end of 2012. For the nine-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 totaled $2.3 million for the retirement of assets 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 on impairment / retirement of fixed assets, and all other non-cash costs, operating income for the period increased $75.3 million to $297.9 million in the first nine months of 2013 from operating income of $222.6 million in the first nine months of 2012.
Interest expense for the first nine months of 2013 was $77.2 million, a decrease of $6.8 millionSpring Break holidays from the first nine months of 2012. The decreasequarter in interest expense was due2013 to the settlement of our Canadian cross-currency swapssecond quarter in the first quarter of 2012, the decrease in non-cash amortization expense resulting from the write-off of loan fees related to our prior credit agreement, and a decrease in revolver interest due to lower average borrowings and a lower effective interest rate from the March 2013 refinancing.
The net effect of our swaps resulted in a non-cash charge to earnings of $8.3 million for the first nine months of 2013 compared with a $1.3 million non-cash benefit to earnings in the first nine 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 ineffective designated and de-designated swaps to market. During the current year-to-date period, we also recognized a $15.2 million net charge to earnings for unrealized/realized foreign currency losses, which included 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 nine months of 2013, a provision for taxes of $34.0 million was recorded to account for publicly traded partnership (“PTP”) taxes and the tax attributes of our corporate subsidiaries. During the same nine-month period in 2012, a $41.8 million provision 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, net income for the nine months ended September 29, 2013 totaled $128.7 million, or $2.31 per diluted limited partner unit, compared with net income of $112.2 million, or $2.01 per diluted unit, for the same period a year ago.
For the nine-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 $405.2 million compared with $365.5 million for the fiscal nine-month period ended 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 our food and beverage initiatives, offset slightly by an increase in employee related costs, advertising expenses, and 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.
Third Quarter -
The fiscal three-month period ended September 29, 2013, consisted of a 13-week period and included a total of 1,019 operating days compared with 13 weeks and 1,177 operating days for the fiscal three-month period ended September 30, 2012. The difference in operating days is due to the sale of two non-core water parks, as well as the combination of two parks, Worlds of Fun and Oceans of Fun, into one gate during 2013.2014.
The following table presents key financial information for the three months ended September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013: | | | | | | | | | | | | | | | | | | | 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 | % |
| | | | | | | | | | | | | | | | | | | Three months ended | | Three months ended | | Increase (Decrease) | | | 3/30/2014 | | 3/31/2013 | | $ | | % | | | (13 weeks) | | (13 weeks) | | | | | | | (Amounts in thousands) | Net revenues | | $ | 40,466 |
| | $ | 41,799 |
| | $ | (1,333 | ) | | (3.2 | )% | Operating costs and expenses | | 106,739 |
| | 102,733 |
| | 4,006 |
| | 3.9 | % | Depreciation and amortization | | 4,307 |
| | 4,786 |
| | (479 | ) | | (10.0 | )% | Loss on impairment / retirement of fixed assets | | 997 |
| | 600 |
| | 397 |
| | N/M |
| Operating loss | | $ | (71,577 | ) | | $ | (66,320 | ) | | $ | (5,257 | ) | | 7.9 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | (61,965 | ) | | $ | (57,273 | ) | | $ | (4,692 | ) | | 8.2 | % |
For the quarter ended September 29, 2013March 30, 2014, net revenues increased 7%decreased 3%, or $38.6$1.3 million, to $592.1$40.5 million from $553.5$41.8 million in the thirdfirst quarter of 2012. This increase reflects a 7% increase in average in-park per capita spending and an 8%, or $4.4 million, increase in out-of park revenues, and attendance that2013. The decrease between periods was comparable with the prior year period. The increase in per capita spending was the result of higher admissions pricing, the successful expansion of our in-park premium benefit offerings, and improvements in our food and beverage programs. The increase in out-of-park revenues wasentirely due to the shift of the Easter and Spring Break holidays to the second quarter of 2014 from the first quarter of 2013. The impact of the calendar shift was partially offset by strong early season performance at Knott's Berry Farm. At the end of the first quarter of 2014, only three of our resort properties. Excluding14 properties were in operation. The other parks, including three of our larger parks, Cedar Point and Kings Island located in Ohio and Canada's Wonderland in Toronto, were in the sale our two non-core water parks, attendance increased 2%, or 207,000 visits on a comparable park basis.final stages of preparing to open for the 2014 operating season.
Operating costs and expenses for the quarter increased 4%, or $11.3$4.0 million to $275.0$106.7 million from $263.7$102.7 million in 2013 and were in line with expectations. Operating results for the thirdfirst quarter of 2012, the net result ofinclude normal off-season operating, maintenance and administrative expenses at our seasonal amusement and water parks, and daily operations at Knott’s Berry Farm and Castaway Bay. The increase in first-quarter costs reflects a $1.5 million decrease in cost of goods sold, a $7.0$3.7 million increase in operating expenses and a $5.7 millionslight increase in SG&A costs. As a percentage of net revenues, costsselling, general and expenses decreased 120 basis points, and was in line with expectations.administrative ("SG&A") expenses. The decrease in cost of goods sold was primarilyfood, merchandise and games revenues for the result of successful cost-savings initiatives in food and beverage.period were flat compared to a year ago. The $7.0$3.7 million increase in operating expenses was due primarily due to a $2.8 million increase in employee related costs, a $1.6 million increase in operating supplies, and a $1.5 million increasebudgeted increases in maintenance expense. The increaseexpense as we continue to invest in employee related costs was primarily due to higher staffing levels, salary increases, and increases in benefit costs. Operating supplies increased due to premium benefit offerings and improved guest services. The $5.7 million increase in SG&A costs was due to increases in employee-related costs and agency advertising costs. The increase in SG&A employee-related expenses was due to an increase in performance incentive awards due to strong 2013 operating results to date,the infrastructure of our parks, as well as an increase in staffing levels across the company. Advertisingmaintenance labor and other employee related expenses. Additionally, utility costs increased as a resultdue to the harsh winter experienced at several of additional marketing efforts in the period, including our Customer Relationship Management platform.parks.
Depreciation and amortization expense for the quarter decreased $2.7$0.5 million primarily due to several significant assets reaching the endshifting 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.operating calendar. Loss on impairment/retirement of fixed assets for the current period was $1.6$1.0 million compared to $0.6 million during the first quarter of 2013, reflecting losses on the retirement of assets across allseveral 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 on impairment / retirement of fixed assets, and all other non-cash costs, operating incomeloss in the thirdfirst quarter of 20132014 increased $62.1$5.3 million to $266.7$71.6 million from an operating incomeloss of $204.6$66.3 million in the thirdfirst quarter of 2012.2013.
Interest expense for the thirdfirst quarter of 20132014 was $25.5$24.7 million, representing a $1.3$1.0 million decrease from the interest expense for the thirdfirst quarter of 2012. As mentioned in the nine-month discussion above, interest2013. 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 third2014 first quarter, the net effect of our swaps resulted in a $1.4$0.4 million non-cash charge to earnings, compared to a non-cash benefitcharge to earnings of $0.2$9.2 million in the thirdfirst quarter of 2012.2013. 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.portfolio, along with the write off of amounts in AOCI related to de-designated interest rate swaps. During the 2013 third2014 first quarter, we also recognized a $8.6$17.2 million net benefitcharge to earnings for unrealized/realized foreign currency gains,losses, which included a $8.5$16.3 million unrealized foreign currency gainloss on the U.S.-dollar denominated debt held at our Canadian property. Due to our March 2013 refinancing, loan fees related to our 2010 and 2011 financings were written off, resulting in a $34.6 million charge to earnings in the first quarter of 2013.
During the quarter, a provisionbenefit for taxes of $58.0$30.3 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provisionbenefit for taxes of $51.9$35.7 million in the same period a year ago. The decrease in tax benefit recorded relates to the combination of a decrease in the pre-tax net loss for the period and a decrease in the effective tax rate.
After interest expense and the provisionbenefit for taxes, net incomeloss for the quarter totaled $190.4$83.5 million, or $3.41$1.51 per diluted limited partner unit, compared with a net incomeloss of $141.0$109.1 million, or $2.52$1.95 per diluted unit, for the thirdfirst quarter a year ago.
For the current quarter, Adjusted EBITDA increased to $318.4 million from $292.3 million for the fiscal third quarter of 2012. The $26.1 million increase in Adjusted EBITDA was largely 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. These revenue increases were somewhat offset by higher costs associated with improving guest services and expanding our marketing efforts.
Twelve Months Ended September 29, 2013March 30, 2014 -
The fiscal twelve-month period ended September 29, 2013March 30, 2014, consisted of a 52-week period and 2,1402,118 operating days, compared with 53 weeks and 2,4162,403 operating days for the fiscal twelve-month period ended September 30, 2012March 31, 2013. The difference in operating days was due primarily to the 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 weekcalendar shift of operationsthe Easter and Spring Break holidays in the twelve-month period ending September 30, 2012.2014 described above.
The following table presents key financial information for the twelve months ended September 29, 2013March 30, 2014 and September 30, 2012March 31, 2013: | | | | | | | | | | | | | | | | | | | 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 | % |
| | | | | | | | | | | | | | | | | | | Twelve months ended | | Twelve months ended | | Increase (Decrease) | | | 3/30/2014 | | 3/31/2013 | | $ | | % | | | (52 weeks) | | (53 weeks) | | | | | | | | | | | | | | | | (Amounts in thousands) | Net revenues | | $ | 1,133,239 |
| | $ | 1,082,055 |
| | $ | 51,184 |
| | 4.7 | % | Operating costs and expenses | | 720,534 |
| | 694,139 |
| | 26,395 |
| | 3.8 | % | Depreciation and amortization | | 122,008 |
| | 127,013 |
| | (5,005 | ) | | (3.9 | )% | Gain on sale of other assets | | (8,743 | ) | | (6,625 | ) | | (2,118 | ) | | N/M |
| Loss on impairment/retirement of fixed assets | | 2,936 |
| | 30,844 |
| | (27,908 | ) | | N/M |
| Operating income | | $ | 296,504 |
| | $ | 236,684 |
| | $ | 59,820 |
| | 25.3 | % | N/M - Not meaningful | | | | | | | | | Other Data: | | | | | | | | | Adjusted EBITDA | | $ | 420,738 |
| | $ | 395,475 |
| | $ | 25,263 |
| | 6.4 | % | Adjusted EBITDA margin | | 37.1 | % | | 36.5 | % | | — |
| | 0.6 | % |
Net revenues totaled $1,124.71,133.2 million for the twelve months ended September 29, 2013March 30, 2014, increasing $40.6$51.1 million,, from $1,084.11,082.1 million for the trailing twelve months ended September 30, 2012March 31, 2013. The 4%5% increase in revenues for the twelve-month period was driven by a 7%an increase in average in-park guest per capita spending, the result of a stronger admissions per cap and improved pure in-park spending. The increase in pure in-park spending was in 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
yearsprimarily due to the extra week of operations in the twelve-month period ended September 30, 2012, as well as the sale of two non-core water parks during the current yeartwelve-month period. Excluding the sale of the two water parks, attendance would have increased . Out-of-park revenues increased $4.6$6.4 million primarily due to an increase in processing fees as partthe strong performance of our expansion of ticketing options. The increase in net revenues for the twelve months ended September 29, 2013 also reflects the negative impact of currency exchangeresort properties, which drove higher average daily room rates and the weakening Canadian dollar on our Canadian operations (approximately $3.2 million) during the period.occupancy rates.
Operating costs and expenses decreased $1.6increased $26.4 million, or less than 1%4%, to $700.3$720.5 million, in large part due to one less week of operations infrom $694.1 million for the current twelve-month period and were in line with expectations.ended March 31, 2013. The decreaseincrease in costs and expenses reflects a $2.9$19.3 million increase in operating expenses and a $11.4 million increase in SG&A costs, somewhat offset by a decrease in cost of goods sold of $4.3 million. The decrease of 4% in cost of goods sold was primarily driven by food and a $1.2 million decrease in operating expenses, due primarily to the one less week in the period. These year-over-year cost decreases were partially offset by a $2.6 million increase in SG&A costs.beverage efficiency initiatives. The increase in operating costs was due to higher normal operating and maintenance expense, enhancements to park infrastructure, and increased employment related costs including
performance bonuses. SG&A costs reflects a $2.8 million increase in employment-relatedincreased due to full-time labor and benefit costs, related to higher staffing levels andincluding 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 byand consumer relationship management database development costs. Exchange rates had 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 infavorable impact ($4.6 million) on costs and expenses also reflects the impact of exchange rates onat our Canadian operations ($1.0 million) during the period.
For the twelve-month period ending September 29, 2013,ended March 30, 2014, the gain on sale of other assets was $15.4$8.7 million reflectingdue to the gainsale of one non-core water park during 2013. Gain on sale of other assets totaled $6.6 million for the twelve-month period ending March 31, 2013, reflecting the sale of two non-core water parksassets during the period. Loss on impairment/retirement of fixed assets for the period was $8.4$2.9 million, due to the removal of a ride to enhance a section of one of our parks, as well asasset retirements of assets across all of our properties. Loss on impairment/retirement of fixed assets during the period ended September 30, 2012March 31, 2013 totaled $34.5$30.8 million, which reflected a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom and an $8.8 million charge for the retirementasset retirements across all of an asset which is further described in Note 11 to the financial statements.our properties.
Depreciation and amortization expense for the period decreased $4.8$5.0 million compared with the prior period due primarily to several significant assets being fully depreciated at the end of 2012.2012 and the later opening of parks for the 2014 operating season when compared to 2013. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for the current period increased $88.5$59.8 million to $309.0$296.5 million from $220.5$236.7 million.
Interest expense for the twelve months ended September 29, 2013March 30, 2014 decreased $12.5$7.6 million to $103.9$102.0 million, from $116.4$109.6 million for the same twelve-month period a year ago. The decrease in interest expense reflects a decrease in revolver interest in the period due to lower borrowings, and a lower average cost resulting from the March 2013 refinancing and a decrease in non-cash amortization expense resulting from the write-off of loan fees related to our prior credit agreement, and the impact of the settlement of our Canadian cross-currency swaps in the first quarter of 2012.agreement.
During the current twelve-month period, the net effect of our interest rate swaps was recorded as a benefit to earnings of $2.0 million compared to a charge to earnings of $8.1 million compared to a benefit to earnings of $10.9$8.7 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 in the current period. During the current period, we also recognized a $20.2$37.2 million charge to earnings for unrealized/realized foreign currency losses, which included a $19.4$35.5 million unrealized foreign currency loss on the U.S.-dollar denominated debt held at our Canadian property. Due toDuring the twelve months ended March 31, 2013, as a result of 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 $24.0$25.7 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 $27.9$17.6 million in twelve-month period ended September 30, 2012.March 31, 2013. The increase in tax provision recorded relates to the combination of an increase in pre-tax net income for the period, offset somewhat by a decrease in the effective tax rate.
After interest expense and provision for taxes, net income for the period totaled $118.4$133.8 million, or $2.12$2.39 per diluted limited partner unit, compared with net income of $105.9$58.1 million, or $1.89$1.04 per diluted unit, a year ago.
As discussed above, the current trailing-twelve-month results include one less week of operations due to the timing of the third quarter fiscal close. Comparing the twelve-month periods for both 2013 and 2012 onWe believe Adjusted EBITDA is a comparable 52-week basis, net revenues would be up approximately $55.1 million, or 5%, on increases in both average in-park guest per capita spending and out-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 cap and improved pure in-park spending, driven largely by improvements in our food and beverage programs and the expansion and continued successmeaningful measure of our premium benefit offerings. Out-of-park revenues would have increased $6.3 million primarily due to an increase in transaction fees from on-line ticket sales. Attendance for the comparable period would have decreased 351,000 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 $9.1 million, the net result of a $1.9 million decrease in cost of goods sold, a $6.2 million increase in operating expenses and a $4.8 million increase in SG&A costs. The increase in operating expenses was primarily attributable to an increase in employment-related expenses of $3.3 million, a $3.9 million increase in operating supply costs, and a $1.6 million increase in utility costs. Somewhat offsetting these operating-expense increases were decreases in maintenance expenses of $3.5 million and insurance expenses of $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 ofresults (for additional attractions and enhanced guest services at our parks. Operating supplies increased due largely to the introduction of new extra-charge attractions and incremental expenses related to our expanded premium benefit offerings. Utility 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 $3.4 million increase in employment-related costs due to higher staffing levels and incentive compensation plans tied to company performance, and a $4.0 million increase in advertising costs related to the transition to a new advertising agency. Somewhat offsetting these SG&A cost increases was a $2.5 million decrease in professional and administrative costs primarily due to reductions in litigation expenses and consulting fees in the period.
information regarding Adjusted EBITDA, forincluding how we define and use Adjusted EBITDA, as well as a reconciliation from net income, see pages 31-32). For the twelve-month period ended September 29, 2013,March 30, 2014, Adjusted EBITDA increased $37.1$25.3 million, or 9%6%, to $430.7$420.7 million. On a same-week basis, Adjusted EBITDA for the twelve-monthOver this same period, would have increased approximately $40.9 million, or 11%. On a same-week basis, our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increased 19060 bps to 38.3%37.1% from 36.4%36.5% for the twelve-month period ended September 29, 2013,March 31, 2013. The increase in Adjusted EBITDA was primarily due to the success of high-margin revenuesrevenue initiatives during the period, such as growth in our premium guest benefit offerings and our admission pricing, combined with another year of growth in our season pass base and a continued focus on controlling operating costs.
October 2013 -
Based on preliminary results, net revenues through November 3, 2013 were approximately $1,104 million, up 6%, or $65 million, compared with $1,039 million forcosts at the same period last year. The increase was the result of an approximate 6%, or $2.31, increase in average in-park guest per capita spending to a record $44.33, and an approximate 7%, or $8 million increase, in out-of-park revenues to $117 million. Also contributing to revenue growth was an increase in attendance of 100,000 visits, compared with last year. Excluding the sale of two water parks, attendance was up 2%, or 334,000 visits, to a record 22.7 million visits on a comparable park basis.level.
Liquidity and Capital Resources: With respect to both liquidity and cash flow, we ended the thirdfirst quarter of 20132014 in sound condition. The negative working capital ratio (current assetsliabilities divided by current liabilities)assets) of 1.5 at September 29, 2013March 30, 2014 reflectsis the impactresult of ournormal seasonal business.activity. Receivables, inventories, and payables are at normal seasonal levels. Operating Activities During the nine-monththree-month period ended September 29, 2013,March 30, 2014, net cash providedused by operating activities increased $40.2$14.6 million from the same period a year ago, due primarily due to the year-over-year growth in revenues.working capital timing differences. For the twelve-month period ended September 29, 2013March 30, 2014 net cash provided by operating activities increased $52.3$11.1 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 monthsquarter of 20132014 was $82.2$40.3 million, an increase of $7.6$4.5 million compared with the nine monththree-month period ended September 30, 2012. Within investing activities,March 31, 2013, due to greater 2014 capital expenditures increased $21.7 million. During the current period, $15.3 million was received for the sale of a non-core waterpark.expenditures. Net cash used in investing activities for the trailing-twelve-month period ended September 29, 2013March 30, 2014 totaled $86.6$109.5 million compared with $91.9$87.2 million for the same period a year ago. The decrease reflectsincrease is due to greater capital expenditures in 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.current twelve-month period. Financing Activities Net cash used infrom financing activities in the first ninethree months of 20132014 was $130.1$15.3 million, a decrease of $12.3$21.1 million compared with the nine-monththree-month period ended September 30, 2012.March 31, 2013. The decrease was due to a one-time cash costlower overall revolver borrowings, net of $50.5 million to settle our Canadian derivativeincreases in the first quarter of 2012, offset somewhat by an increase in distributions paid in the current year of $37.9 million.unitholder distributions. Net cash used in financing activities in the trailing-twelve-month period ended September 29, 2013March 30, 2014 totaled $150.6$199.2 million, a decrease of $31.2$9.3 million compared with the twelve-month period ended September 30, 2012.March 31, 2013. The decrease was largely due to the $50.5
million Canadian derivative settlementa reduction in 2012, offset somewhat by an increase in distributions paid of $21.4 million indebt payments and debt issuance costs during the current twelve-month period.period, net of increases in unitholder distributions.
In July 2010, we issued $405As of March 30, 2014, our debt consisted of the following:
$405 million of 9.125% senior unsecured notes, maturing in 2018, yielding 9.375% due to the notes being issued at a discount in a private placement, including $5.6 million of Original Issue Discount (OID) to yield 9.375%. The $405 million senior unsecured notes require semi-annual interest payments in February and August, with the principal due in full on August 1, 2018.July 2010. 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 theThe notes may be redeemed with the net cash proceeds of certain equity offerings at 109.125%.pay interest semi-annually in February and August. 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.issued at par. 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%. These notes pay interest semi-annually in March and September.
Concurrently with this offering, we entered into a new $885 million credit agreement (the "2013 Credit Agreement"), which included a $630 million seniorSenior secured term loan facility anddebt of $618.9 million, maturing in March 2020 under our 2013 Credit Agreement. The term debt bears interest at 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$6.3 million annually. The net proceeds fromDue to a prepayment made during 2013, we only have current maturities totaling $1.5 million as of March 30, 2014.
$55 million in borrowings under the notes and borrowings$255 million senior secured revolving credit facility under our 2013 Credit Agreement. 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 limitsub-limit of $15 million.$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 tothat we pay a commitment fee of 5038 bps per annum on the unused portion of the credit facilities.
At the end of the quarter, we had a total of $628.4$618.9 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $901.6$902.0 million of fixed-rate debt (including OID), no$55.0 million in outstanding borrowings under our revolving credit facility, and cash on hand of $183.5$8.9 million. After letters of credit, which totaled $16.4$16.3 million at September 29, 2013March 30, 2014, we had $238.6$183.7 million of available borrowings under the revolving credit facility. In order to lock in fixed interest costs on a portion of our domestic term debt, in September 2010 we
We have entered into several forward-starting swap agreements ("September 2010 swaps") tointerest rate swaps that effectively convert a totalfix all of $600 million ofour variable-rate debt to fixed rates beginningpayments. As of March 30, 2014, we have $800 million of interest rate swaps 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")place 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 ofconvert variable-rate debt to fixed rates. The Combination Swaps were designated as cash flow hedges,These swaps, which 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 million2.38%, which will be amortized out of AOCI into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive incomethrough December 2015. At the time of the de-designation, the fair market value of the May 2011 swaps was $7.8 million and was immediately recognized into expense in "Net effect of swaps" in the unaudited condensed consolidated statements of operations.have been de-designated as cash flow hedges. 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 thirdand fourth quarter of 2013, the Partnershipwe entered into threefour forward-starting interest rate swap agreements ("2013 forwards") that will effectively convert $400$500 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%2.94%. In October 2013,Additional detail regarding our current and historical swap arrangements is provided in Note 6 to our Unaudited Condensed Consolidated Financial Statements and in Note 6 to 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 beginningAudited Consolidated Financial Statements included in December of 2015.our Form 10-K filed on February 26, 2014.
At September 29, 2013March 30, 2014, the fair market value of the derivative portfolio was $31.627.8 million, which was recorded in “Derivative Liability” on the condensed consolidated balance sheet. The following table presents our 2013 forwards and the October 2013 swaps which mature in December 2018, and the Combination Swaps and May 2011 swaps which mature December 15, 2015, along with their notional amounts and their fixed interest rates.
| | | | | | | | | | | | | | | | Interest Rate Swaps | ($'s in thousands) | Derivatives designated as hedging instruments | | Derivatives not designated as hedging instruments | | Notional Amounts | | LIBOR Rate | | Notional Amounts | | LIBOR Rate | | $ | 200,000 |
| | 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 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 thirdfirst quarter of 2013,2014, 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 by 0.25x each second quarter beginning in the second quarter of 2014.2014 until it reaches 5.25x. Based on our trailing-twelve-month results ending September 29, 2013March 30, 2014, our Consolidated Leverage Ratio was 3.573.63x, providing $184.1175.2 million of EBITDA cushion on the ratio at the end of the thirdfirst quarter. We were in compliance with all other covenants under the 2013 Credit Agreement as of September 29, 2013March 30, 2014.
The 2013 Credit Agreement allows restricted payments of up to $60 million annually 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 September 29, 2013, the
The indentures governing our notes maturing inalso include annual restricted payment limitations and additional permitted payment formulas. The restricted payment provisions applicable to our 2018 havenotes are more restrictive than those that apply to our 2021 notes. Under the more restrictive covenants. The terms of the indenture governing our 2018 notes permit us tocovenants, we can make restricted payments of $20 million annually.annually so long as no default or event of default has occurred and is continuing. Our ability to make additional restricted payments in 2013 and beyond is permitted should our pro-forma trailing-twelve-month Total-Indebtedness-to-Consolidated-Cash-FlowTotal Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 4.75x, measured on a quarterly basis.4.75x. In accordance with these debt provisions, on August 8, 2013,February 26, 2014, we announced the declaration of a distribution of $0.625$0.70 per limited partner unit, which was paid on September 16, 2013,March 25, 2014, and on November 7, 2013May 8, 2014 we announced the declaration of a distribution of $0.70 per limited partner unit, payable DecemberJune 16, 2013.2014. 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$16.3 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of September 29, 2013March 30, 2014. 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 September 29, 2013,March 30, 2014, we had $901.6$902.0 million of fixed-rate senior unsecured notes and $628.4$618.9 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 $31$27 million, a hypothetical 100 bps
increase in 30-day LIBOR on our variable-rate debt (not considering the impact of our interest rate swaps) would lead to an increase of approximately $3.8 million in annual cash interest costs. Assuming a hypothetical 100 bps increase in 30-day LIBOR, the amount of net cash interest paid on our variable-rate debt, afterderivative portfolio would decrease by $4.6 million over the fixed-rate swap agreements, would lead to a decrease of approximately $0.7 million in annual cash interest costs.next year. A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $3.7$4.2 million decrease in annual operating income.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures - The Partnership maintains a system of controls and procedures designed to ensure that information required to be disclosed by the Partnership in its reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission and that such information is accumulated and communicated to the Partnership’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. As of September 29, 2013March 30, 2014, 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.Officer, has evaluated the effectiveness of the Partnership's disclosure controls and procedures. 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 September 29, 2013March 30, 2014.
(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 September 29, 2013March 30, 2014 that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting. On May 14, 2013, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) issued an updated version of its Internal Control - Integrated Framework (2013 Framework). Originally issued in 1992 (1992 Framework), the framework helps organizations design, implement and evaluate the effectiveness of internal control concepts and simplify their use and application. The 1992 Framework remains available during the transition period, which extends to December 15, 2014, after which time COSO will consider it as superseded by the 2013 Framework. As of March 30, 2014, the Partnership continues to utilize the 1992 Framework during the transition to the 2013 Framework by the end of 2014.
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. On September 25, 2013, the Supreme Court of 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 its applicability to individual employment agreements. The matter will now proceed on the merits and both sides will have the opportunity to fileBoth parties filed legal briefs with the court setting forth the basis of their legal arguments. On April 9, 2014, the parties made oral arguments to the Court in support of their respective arguments.positions. Upon the conclusion of the oral arguments the procedural stage of the case was closed and the case was submitted to the court for a final ruling. The Partnership believes the liability recorded
as of September 29, 2013March 30, 2014 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 the Partnership's Annual Report on Form 10-K for the year ended December 31, 2012.2013.
ITEM 5. OTHER INFORMATION
On May 8, 2013, the Partnership announced that it had identified a historical classification error in its 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 that 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 was 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 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 CreditCedar Fair, L.P. 2008 Omnibus Incentive Plan Performance Award Agreement, dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with31, 2014, by and between Magnum Management Corporation and Matthew A. Ouimet, dated October 21, 2013.Ouimet. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013.April 4, 2014. | | | | Exhibit (10.2) | | Cedar Fair, L.P. 2008 Omnibus Incentive Plan Form of Restricted Unit Award Agreement. | | | | Exhibit (10.3) | | Cedar Fair, L.P. 2008 Omnibus Incentive Plan Form of Deferred Unit Award Agreement. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2013March 30, 2014 formatted in Extensible Business Reporting Language (XBRL): (i) Thethe Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) Thethe Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notesnotes. |
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. | | | | | | | CEDAR FAIR, L.P. | | | | (Registrant) | | | | | | | | By Cedar Fair Management, Inc. | | | | General Partner | | | | | Date: | November 7, 2013May 9, 2014 | /s/ Matthew A. Ouimet | | | Matthew A. Ouimet | | | President and Chief Executive Officer | | | | | Date: | November 7, 2013May 9, 2014 | /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 CreditCedar Fair, L.P. 2008 Omnibus Incentive Plan Performance Award Agreement, dated as of March 6, 2013. | | | | Exhibit (10.2) | | Employment Agreement with31, 2014, by and between Magnum Management Corporation and Matthew A. Ouimet, dated October 21, 2013.Ouimet. Incorporated herein by reference to Exhibit 10.1 to the Registrant's Form 8-K filed on October 21, 2013.April 4, 2014. | | | | Exhibit (10.2) | | Cedar Fair, L.P. 2008 Omnibus Incentive Plan Form of Restricted Unit Award Agreement. | | | | Exhibit (10.3) | | Cedar Fair, L.P. 2008 Omnibus Incentive Plan Form of Deferred Unit Award Agreement. | | | | Exhibit (31.1) | | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (31.2) | | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (32) | | Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002. | | | Exhibit (101) | | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2013March 30, 2014 formatted in Extensible Business Reporting Language (XBRL): (i) Thethe Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) Thethe Condensed Consolidated Statements of Cash Flow, (iv) the Condensed Consolidated Statement of Equity and, (v) related notesnotes. |
s / Average Rate | $ | 400,000 |
| | 3.00 | % | | $ | 800,000 |
| | 2.38 | % | $ | 500,000 |
| | 2.94 | % | | $ | 800,000 |
| | 2.38 | % |