UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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x☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 24, 201729, 2019
OR
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o☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File Number: 1-9444
CEDAR FAIR, L.P.
(Exact name of registrant as specified in its charter)
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| | |
DELAWAREDelaware | | 34-1560655 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
One Cedar Point Drive, Sandusky, Ohio44870-5259(Address of principal executive offices) (Zip Code)
(419) (419) 626-0830
(Registrant’s telephone number, including area code)
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| | |
Securities registered pursuant to Section 12(b) of the Act: |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Units Representing Limited Partner Interests | FUN | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx☒ No o☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yesx☒ No o☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | | x☒ | | Accelerated filer | | o |
| | | ☐ |
Non-accelerated filer | | o (Do not check if a smaller reporting company) ☐ | | Smaller reporting company | | o |
| | | | | | ☐ |
| | | | Emerging growth company | | o☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No x☒
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
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Title of Class | | Units Outstanding as of October 27, 2017November 1, 2019 |
Units Representing Limited Partner Interests | | 56,237,98856,663,821 |
Page 1 of 3949 pages
CEDAR FAIR, L.P.
INDEX
FORM 10 - Q10-Q CONTENTS
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Item 2. | | |
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Item 3. | | | | |
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Item 4. | | | | |
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Item 1. | | | | |
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Item 1A. | | | | |
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Item 2. | | | | |
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
| | | | | | | | | | | | |
| | September 29, 2019 | | December 31, 2018 | | September 23, 2018 |
ASSETS | | | | | | |
Current Assets: | | | | | | |
Cash and cash equivalents | | $ | 258,116 |
| | $ | 105,349 |
| | $ | 190,756 |
|
Receivables | | 68,754 |
| | 51,518 |
| | 58,398 |
|
Inventories | | 37,734 |
| | 30,753 |
| | 36,549 |
|
Other current assets | | 20,196 |
| | 12,589 |
| | 21,875 |
|
| | 384,800 |
| | 200,209 |
| | 307,578 |
|
Property and Equipment: | | | | | | |
Land | | 439,309 |
| | 268,411 |
| | 272,186 |
|
Land improvements | | 451,269 |
| | 434,501 |
| | 435,513 |
|
Buildings | | 801,175 |
| | 732,666 |
| | 729,108 |
|
Rides and equipment | | 1,900,910 |
| | 1,813,489 |
| | 1,817,601 |
|
Construction in progress | | 69,050 |
| | 77,716 |
| | 61,474 |
|
| | 3,661,713 |
| | 3,326,783 |
| | 3,315,882 |
|
Less accumulated depreciation | | (1,829,382 | ) | | (1,727,345 | ) | | (1,727,183 | ) |
| | 1,832,331 |
| | 1,599,438 |
| | 1,588,699 |
|
Goodwill | | 358,451 |
| | 178,719 |
| | 182,004 |
|
Other Intangibles, net | | 59,693 |
| | 36,376 |
| | 37,131 |
|
Right-of-Use Asset | | 11,067 |
| | — |
| | — |
|
Other Assets | | 11,669 |
| | 9,441 |
| | 13,536 |
|
| | $ | 2,658,011 |
| | $ | 2,024,183 |
| | $ | 2,128,948 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | |
Current Liabilities: | | | | | | |
Current maturities of long-term debt | | $ | 7,500 |
| | $ | 5,625 |
| | $ | 3,750 |
|
Accounts payable | | 32,928 |
| | 23,314 |
| | 32,989 |
|
Deferred revenue | | 130,265 |
| | 107,074 |
| | 102,326 |
|
Accrued interest | | 30,181 |
| | 7,927 |
| | 21,893 |
|
Accrued taxes | | 48,265 |
| | 29,591 |
| | 48,372 |
|
Accrued salaries, wages and benefits | | 39,206 |
| | 18,786 |
| | 30,578 |
|
Self-insurance reserves | | 23,837 |
| | 24,021 |
| | 25,923 |
|
Other accrued liabilities | | 17,297 |
| | 18,381 |
| | 22,232 |
|
| | 329,479 |
| | 234,719 |
| | 288,063 |
|
Deferred Tax Liability | | 82,658 |
| | 81,717 |
| | 74,637 |
|
Derivative Liability | | 27,773 |
| | 6,705 |
| | — |
|
Lease Liability | | 7,440 |
| | — |
| | — |
|
Other Liabilities | | 18,966 |
| | 11,058 |
| | 16,292 |
|
Long-Term Debt: | | | | | | |
Term debt | | 717,364 |
| | 719,507 |
| | 720,846 |
|
Notes | | 1,431,612 |
| | 938,061 |
| | 937,440 |
|
| | 2,148,976 |
| | 1,657,568 |
| | 1,658,286 |
|
Partners’ Equity: | | | | | | |
Special L.P. interests | | 5,290 |
| | 5,290 |
| | 5,290 |
|
General partner | | (1 | ) | | (1 | ) | | — |
|
Limited partners, 56,596, 56,564 and 56,441 units outstanding as of September 29, 2019, December 31, 2018 and September 23, 2018, respectively | | 21,276 |
| | 5,845 |
| | 78,464 |
|
Accumulated other comprehensive income | | 16,154 |
| | 21,282 |
| | 7,916 |
|
| | 42,719 |
| | 32,416 |
| | 91,670 |
|
| | $ | 2,658,011 |
| | $ | 2,024,183 |
| | $ | 2,128,948 |
|
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| | | | | | | | | | | | |
| | 9/24/2017 | | 12/31/2016 | | 9/25/2016 |
ASSETS | | | | | | |
Current Assets: | | | | | | |
Cash and cash equivalents | | $ | 249,946 |
| | $ | 122,716 |
| | $ | 187,302 |
|
Receivables | | 52,303 |
| | 35,414 |
| | 51,536 |
|
Inventories | | 34,240 |
| | 26,276 |
| | 31,059 |
|
Other current assets | | 18,624 |
| | 11,270 |
| | 13,809 |
|
| | 355,113 |
| | 195,676 |
| | 283,706 |
|
Property and Equipment: | | | | | | |
Land | | 272,213 |
| | 265,961 |
| | 267,175 |
|
Land improvements | | 416,629 |
| | 402,013 |
| | 394,141 |
|
Buildings | | 707,964 |
| | 663,982 |
| | 675,440 |
|
Rides and equipment | | 1,740,826 |
| | 1,643,770 |
| | 1,653,274 |
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Construction in progress | | 57,605 |
| | 58,299 |
| | 34,918 |
|
| | 3,195,237 |
| | 3,034,025 |
| | 3,024,948 |
|
Less accumulated depreciation | | (1,614,727 | ) | | (1,494,805 | ) | | (1,498,908 | ) |
| | 1,580,510 |
| | 1,539,220 |
| | 1,526,040 |
|
Goodwill | | 185,010 |
| | 179,660 |
| | 215,460 |
|
Other Intangibles, net | | 38,532 |
| | 37,837 |
| | 36,430 |
|
Other Assets | | 17,407 |
| | 20,788 |
| | 21,473 |
|
| | $ | 2,176,572 |
| | $ | 1,973,181 |
| | $ | 2,083,109 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | |
Current Liabilities: | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 2,775 |
| | $ | 1,200 |
|
Accounts payable | | 33,710 |
| | 20,851 |
| | 32,891 |
|
Deferred revenue | | 86,732 |
| | 82,765 |
| | 65,748 |
|
Accrued interest | | 23,928 |
| | 9,986 |
| | 10,939 |
|
Accrued taxes | | 78,657 |
| | 58,958 |
| | 69,916 |
|
Accrued salaries, wages and benefits | | 30,666 |
| | 30,358 |
| | 42,744 |
|
Self-insurance reserves | | 27,549 |
| | 27,063 |
| | 26,820 |
|
Other accrued liabilities | | 20,562 |
| | 9,927 |
| | 12,348 |
|
| | 301,804 |
| | 242,683 |
| | 262,606 |
|
Deferred Tax Liability | | 112,671 |
| | 104,885 |
| | 137,712 |
|
Derivative Liability | | 14,849 |
| | 17,721 |
| | 30,185 |
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Other Liabilities | | 12,340 |
| | 13,162 |
| | 12,488 |
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Long-Term Debt: | | | | | | |
Term debt | | 723,385 |
| | 594,228 |
| | 595,253 |
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Notes | | 936,241 |
| | 939,983 |
| | 939,418 |
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| | 1,659,626 |
| | 1,534,211 |
| | 1,534,671 |
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Partners’ Equity: | | | | | | |
Special L.P. interests | | 5,290 |
| | 5,290 |
| | 5,290 |
|
General partner | | — |
| | — |
| | 1 |
|
Limited partners, 56,238, 56,201 and 56,091 units outstanding at September 24, 2017, December 31, 2016 and September 25, 2016, respectively | | 74,155 |
| | 52,288 |
| | 100,956 |
|
Accumulated other comprehensive income (loss) | | (4,163 | ) | | 2,941 |
| | (800 | ) |
| | 75,282 |
| | 60,519 |
| | 105,447 |
|
| | $ | 2,176,572 |
| | $ | 1,973,181 |
| | $ | 2,083,109 |
|
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per unit amounts)
| | | Three months ended | | Nine months ended | Three months ended | | Nine months ended |
| 9/24/2017 | | 9/25/2016 | | 9/24/2017 | | 9/25/2016 | September 29, 2019 | | September 23, 2018 | | September 29, 2019 | | September 23, 2018 |
Net revenues: | | | | | | | | | | | | | | |
Admissions | $ | 361,279 |
| | $ | 361,949 |
| | $ | 598,723 |
| | $ | 604,947 |
| $ | 382,776 |
| | $ | 358,923 |
| | $ | 645,715 |
| | $ | 590,091 |
|
Food, merchandise and games | 205,137 |
| | 202,341 |
| | 356,512 |
| | 354,032 |
| 224,444 |
| | 210,426 |
| | 399,525 |
| | 361,428 |
|
Accommodations, extra-charge products and other | 86,273 |
| | 85,993 |
| | 138,570 |
| | 137,776 |
| 107,292 |
| | 94,354 |
| | 172,439 |
| | 147,227 |
|
| 652,689 |
| | 650,283 |
| | 1,093,805 |
| | 1,096,755 |
| 714,512 |
| | 663,703 |
| | 1,217,679 |
| | 1,098,746 |
|
Costs and expenses: |
| | | | | | |
| | | | | | |
Cost of food, merchandise, and games revenues | 52,647 |
| | 52,057 |
| | 92,376 |
| | 92,860 |
| 58,475 |
| | 53,891 |
| | 105,932 |
| | 94,912 |
|
Operating expenses | 202,710 |
| | 199,292 |
| | 447,379 |
| | 441,421 |
| 227,625 |
| | 206,505 |
| | 503,601 |
| | 462,750 |
|
Selling, general and administrative | 71,663 |
| | 65,099 |
| | 151,142 |
| | 142,082 |
| 83,080 |
| | 67,114 |
| | 174,527 |
| | 149,837 |
|
Depreciation and amortization | 70,060 |
| | 64,685 |
| | 126,237 |
| | 118,175 |
| 68,335 |
| | 74,374 |
| | 137,828 |
| | 132,114 |
|
Loss on impairment / retirement of fixed assets, net | 1,347 |
| | 1,355 |
| | 3,057 |
| | 5,382 |
| 1,675 |
| | 3,247 |
| | 3,781 |
| | 7,959 |
|
Gain on sale of investment | (1,877 | ) | | — |
| | (1,877 | ) | | — |
| — |
| | — |
| | (617 | ) | | — |
|
| 396,550 |
| | 382,488 |
| | 818,314 |
| | 799,920 |
| 439,190 |
| | 405,131 |
| | 925,052 |
| | 847,572 |
|
Operating income | 256,139 |
| | 267,795 |
| | 275,491 |
| | 296,835 |
| 275,322 |
| | 258,572 |
| | 292,627 |
| | 251,174 |
|
Interest expense | 21,638 |
| | 20,957 |
| | 62,472 |
| | 61,869 |
| 27,967 |
| | 21,464 |
| | 71,814 |
| | 62,563 |
|
Net effect of swaps | (952 | ) | | 1,650 |
| | 3,717 |
| | 8,902 |
| 3,910 |
| | (1,217 | ) | | 21,068 |
| | (5,751 | ) |
Loss on early debt extinguishment | — |
| | — |
| | 23,115 |
| | — |
| — |
| | — |
| | — |
| | 1,073 |
|
(Gain) loss on foreign currency | (29,193 | ) | | 7,341 |
| | (35,047 | ) | | (23,675 | ) | 5,608 |
| | (13,054 | ) | | (12,533 | ) | | 12,024 |
|
Other income | (416 | ) | | (58 | ) | | (464 | ) | | (84 | ) | (933 | ) | | (698 | ) | | (808 | ) | | (1,186 | ) |
Income before taxes | 265,062 |
| | 237,905 |
| | 221,698 |
| | 249,823 |
| 238,770 |
| | 252,077 |
| | 213,086 |
| | 182,451 |
|
Provision for taxes | 73,747 |
| | 62,918 |
| | 63,769 |
| | 65,339 |
| 48,815 |
| | 38,770 |
| | 43,506 |
| | 33,301 |
|
Net income | 191,315 |
| | 174,987 |
| | 157,929 |
| | 184,484 |
| 189,955 |
| | 213,307 |
| | 169,580 |
| | 149,150 |
|
Net income allocated to general partner | 1 |
| | 2 |
| | 1 |
| | 2 |
| 2 |
| | 3 |
| | 2 |
| | 2 |
|
Net income allocated to limited partners | $ | 191,314 |
| | $ | 174,985 |
| | $ | 157,928 |
| | $ | 184,482 |
| $ | 189,953 |
| | $ | 213,304 |
| | $ | 169,578 |
| | $ | 149,148 |
|
| | | | | | | | | | | | | | |
Net income | $ | 191,315 |
| | $ | 174,987 |
| | $ | 157,929 |
| | $ | 184,484 |
| $ | 189,955 |
| | $ | 213,307 |
| | $ | 169,580 |
| | $ | 149,150 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | |
Foreign currency translation adjustment | (11,143 | ) | | 1,397 |
| | (13,085 | ) | | (5,447 | ) | 2,554 |
| | (5,276 | ) | | (5,128 | ) | | 5,990 |
|
Unrealized gain on cash flow hedging derivatives | 1,994 |
| | 1,994 |
| | 5,981 |
| | 1,356 |
| |
Cash flow hedging derivative activity | | — |
| | 2,116 |
| | — |
| | 6,250 |
|
Other comprehensive income (loss), (net of tax) | (9,149 | ) | | 3,391 |
| | (7,104 | ) | | (4,091 | ) | 2,554 |
| | (3,160 | ) | | (5,128 | ) | | 12,240 |
|
Total comprehensive income | $ | 182,166 |
| | $ | 178,378 |
| | $ | 150,825 |
| | $ | 180,393 |
| $ | 192,509 |
| | $ | 210,147 |
| | $ | 164,452 |
| | $ | 161,390 |
|
Basic income per limited partner unit: | | | | | | | | | | | | | | |
Weighted average limited partner units outstanding | 56,078 |
| | 55,948 |
| | 56,062 |
| | 55,922 |
| 56,519 |
| | 56,231 |
| | 56,344 |
| | 56,205 |
|
Net income per limited partner unit | $ | 3.41 |
| | $ | 3.13 |
| | $ | 2.82 |
| | $ | 3.30 |
| $ | 3.36 |
| | $ | 3.79 |
| | $ | 3.01 |
| | $ | 2.65 |
|
Diluted income per limited partner unit: | | | | | | | | | | | | | | |
Weighted average limited partner units outstanding | 56,591 |
| | 56,365 |
| | 56,631 |
| | 56,392 |
| 56,931 |
| | 56,696 |
| | 56,816 |
| | 56,753 |
|
Net income per limited partner unit | $ | 3.38 |
| | $ | 3.10 |
| | $ | 2.79 |
| | $ | 3.27 |
| $ | 3.34 |
| | $ | 3.76 |
| | $ | 2.98 |
| | $ | 2.63 |
|
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY
(In thousands)
|
| | | | | | | |
| Nine months ended |
| 9/24/2017 | | 9/25/2016 |
Limited Partnership Units Outstanding | | | |
Beginning balance | 56,201 |
| | 56,018 |
|
Limited partnership unit options exercised | 9 |
| | 29 |
|
Limited partnership unit forfeitures | (3 | ) | | — |
|
Issuance of limited partnership units as compensation | 31 |
| | 44 |
|
| 56,238 |
| | 56,091 |
|
Limited Partners’ Equity | | | |
Beginning balance | $ | 52,288 |
| | $ | 48,428 |
|
Net income | 157,928 |
| | 184,482 |
|
Partnership distribution declared ($2.565 and $2.475 per limited partnership unit) | (144,516 | ) | | (139,041 | ) |
Expense recognized for limited partnership unit options | — |
| | 5 |
|
Tax effect of units involved in treasury unit transactions | (2,560 | ) | | (1,903 | ) |
Issuance of limited partnership units as compensation | 11,015 |
| | 8,985 |
|
| 74,155 |
| | 100,956 |
|
General Partner’s Equity | | | |
Beginning balance | — |
| | — |
|
Net income | 1 |
| | 2 |
|
Partnership distribution declared | (1 | ) | | (1 | ) |
| — |
| | 1 |
|
Special L.P. Interests | 5,290 |
| | 5,290 |
|
| | | |
Accumulated Other Comprehensive Income | | | |
Foreign currency translation adjustment: | | | |
Beginning balance | 18,891 |
| | 22,591 |
|
Period activity, net of tax $0 and $3,131 | (13,085 | ) | | (5,447 | ) |
| 5,806 |
| | 17,144 |
|
Unrealized loss on cash flow hedging derivatives: | | | |
Beginning balance | (15,950 | ) | | (19,300 | ) |
Period activity, net of tax ($1,113) and ($279) | 5,981 |
| | 1,356 |
|
| (9,969 | ) | | (17,944 | ) |
| (4,163 | ) | | (800 | ) |
Total Partners’ Equity | $ | 75,282 |
| | $ | 105,447 |
|
|
| | | | | | | | | | | | | | | | | | | | | | |
For the three months ended | Limited Partnership Units Outstanding | | Limited Partners’ Equity | | General Partner’s Equity | | Special L.P. Interests | | Accumulated Other Comprehensive Income (Loss) | | Total Partners’ Equity |
Balance as of June 24, 2018 | 56,441 |
| | $ | (86,435 | ) | | $ | (2 | ) | | $ | 5,290 |
| | $ | 11,076 |
| | $ | (70,071 | ) |
Net income | — |
| | 213,304 |
| | 3 |
| | — |
| | — |
| | 213,307 |
|
Partnership distribution declared ($0.890 per unit) | — |
| | (50,293 | ) | | (1 | ) | | — |
| | — |
| | (50,294 | ) |
Issuance of limited partnership units related to compensation | — |
| | 1,892 |
| | — |
| | — |
| | — |
| | 1,892 |
|
Tax effect of units involved in treasury unit transactions | — |
| | (4 | ) | | — |
| | — |
| | — |
| | (4 | ) |
Foreign currency translation adjustment, net of tax ($1,055) | — |
| | — |
| | — |
| | — |
| | (5,276 | ) | | (5,276 | ) |
Cash flow hedging derivative activity, net of tax ($249) | — |
| | — |
| | — |
| | — |
| | 2,116 |
| | 2,116 |
|
Balance as of September 23, 2018 | 56,441 |
| | $ | 78,464 |
| | $ | — |
| | $ | 5,290 |
| | $ | 7,916 |
| | $ | 91,670 |
|
| | | | | | | | | | | |
Balance as of June 30, 2019 | 56,597 |
| | $ | (119,088 | ) | | $ | (2 | ) | | $ | 5,290 |
| | $ | 13,600 |
| | $ | (100,200 | ) |
Net income | — |
| | 189,953 |
| | 2 |
| | — |
| | — |
| | 189,955 |
|
Partnership distribution declared ($0.925 per unit) | — |
| | (52,358 | ) | | (1 | ) | | — |
| | — |
| | (52,359 | ) |
Issuance of limited partnership units related to compensation | (1 | ) | | 2,823 |
| | — |
| | — |
| | — |
| | 2,823 |
|
Tax effect of units involved in treasury unit transactions | — |
| | (54 | ) | | — |
| | — |
| | — |
| | (54 | ) |
Foreign currency translation adjustment, net of tax $478 | — |
| | — |
| | — |
| | — |
| | 2,554 |
| | 2,554 |
|
Balance as of September 29, 2019 | 56,596 |
| | $ | 21,276 |
| | $ | (1 | ) | | $ | 5,290 |
| | $ | 16,154 |
| | $ | 42,719 |
|
| | | | | | | | | | | |
For the nine months ended | Limited Partnership Units Outstanding | | Limited Partners’ Equity | | General Partner’s Equity | | Special L.P. Interests | | Accumulated Other Comprehensive Income (Loss) | | Total Partners’ Equity |
Balance as of December 31, 2017 | 56,359 |
| | $ | 81,589 |
| | $ | — |
| | $ | 5,290 |
| | $ | (3,933 | ) | | $ | 82,946 |
|
Net income | — |
| | 149,148 |
| | 2 |
| | — |
| | — |
| | 149,150 |
|
Partnership distribution declared ($2.670 per unit) | — |
| | (150,850 | ) | | (2 | ) | | — |
| | — |
| | (150,852 | ) |
Issuance of limited partnership units related to compensation | 82 |
| | 1,235 |
| | — |
| | — |
| | — |
| | 1,235 |
|
Tax effect of units involved in treasury unit transactions | — |
| | (3,049 | ) | | — |
| | — |
| | — |
| | (3,049 | ) |
Foreign currency translation adjustment, net of tax $1,247 | — |
| | — |
| | — |
| | — |
| | 5,990 |
| | 5,990 |
|
Cash flow hedging derivative activity, net of tax ($845) | — |
| | — |
| | — |
| | — |
| | 6,250 |
| | 6,250 |
|
Reclassification of stranded tax effect | — |
| | 391 |
| | — |
| | — |
| | (391 | ) | | — |
|
Balance as of September 23, 2018 | 56,441 |
| | $ | 78,464 |
| | $ | — |
| | $ | 5,290 |
| | $ | 7,916 |
| | $ | 91,670 |
|
| | | | | | | | | | | |
Balance as of December 31, 2018 | 56,564 |
| | $ | 5,845 |
| | $ | (1 | ) | | $ | 5,290 |
| | $ | 21,282 |
| | $ | 32,416 |
|
Net income | — |
| | 169,578 |
| | 2 |
| | — |
| | — |
| | 169,580 |
|
Partnership distribution declared ($2.775 per unit) | — |
| | (157,043 | ) | | (2 | ) | | — |
| | — |
| | (157,045 | ) |
Issuance of limited partnership units related to compensation | 32 |
| | 4,511 |
| | — |
| | — |
| | — |
| | 4,511 |
|
Tax effect of units involved in treasury unit transactions | — |
| | (1,615 | ) | | — |
| | — |
| | — |
| | (1,615 | ) |
Foreign currency translation adjustment, net of tax ($1,142) | — |
| | — |
| | — |
| | — |
| | (5,128 | ) | | (5,128 | ) |
Balance as of September 29, 2019 | 56,596 |
| | $ | 21,276 |
| | $ | (1 | ) | | $ | 5,290 |
| | $ | 16,154 |
| | $ | 42,719 |
|
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| | | Nine months ended | Nine months ended |
| 9/24/2017 | | 9/25/2016 | September 29, 2019 | | September 23, 2018 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | |
Net income | $ | 157,929 |
| | $ | 184,484 |
| $ | 169,580 |
| | $ | 149,150 |
|
Adjustments to reconcile net income to net cash from operating activities: | | | | | | |
Depreciation and amortization | 126,237 |
| | 118,175 |
| 137,828 |
| | 132,114 |
|
Loss on early debt extinguishment | 23,115 |
| | — |
| — |
| | 1,073 |
|
Non-cash foreign currency gain on debt | (39,296 | ) | | (23,891 | ) | |
Non-cash foreign currency (gain) loss on debt | | (13,406 | ) | | 13,093 |
|
Other non-cash expenses | 26,942 |
| | 36,004 |
| 34,614 |
| | 8,512 |
|
Net change in working capital | 27,625 |
| | 31,267 |
| 54,854 |
| | 25,788 |
|
Net change in other assets/liabilities | 66 |
| | (5,337 | ) | 5,669 |
| | 4,704 |
|
Net cash from operating activities | 322,618 |
| | 340,702 |
| 389,139 |
| | 334,434 |
|
CASH FLOWS FOR INVESTING ACTIVITIES | | | | | | |
Capital expenditures | (152,373 | ) | | (126,864 | ) | (296,616 | ) | | (145,716 | ) |
Acquisitions, net of cash acquired | | (270,171 | ) | | — |
|
Proceeds from sale of investment | 3,281 |
| | — |
| 617 |
| | — |
|
Purchase of identifiable intangible assets | (66 | ) | | — |
| |
Net cash for investing activities | (149,158 | ) | | (126,864 | ) | (566,170 | ) | | (145,716 | ) |
CASH FLOWS FOR FINANCING ACTIVITIES | | | | |
Term debt borrowings | 750,000 |
| | — |
| |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | |
Note borrowings | 500,000 |
| | — |
| 500,000 |
| | — |
|
Term debt payments | (617,850 | ) | | (6,000 | ) | (1,875 | ) | | — |
|
Note payments, including amounts paid for early termination | (515,458 | ) | | — |
| |
Distributions paid to partners | (144,517 | ) | | (139,042 | ) | (157,045 | ) | | (150,852 | ) |
Payment of debt issuance costs | (19,684 | ) | | — |
| |
Payment of debt issuance costs and original issue discount | | (7,812 | ) | | (2,521 | ) |
Exercise of limited partnership unit options | | — |
| | 125 |
|
Tax effect of units involved in treasury unit transactions | (2,560 | ) | | (1,903 | ) | (1,615 | ) | | (3,049 | ) |
Payments related to tax withholding for equity compensation | (2,053 | ) | | (920 | ) | (4,249 | ) | | (6,943 | ) |
Net cash for financing activities | (52,122 | ) | | (147,865 | ) | |
Net cash from (for) financing activities | | 327,404 |
| | (163,240 | ) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 5,892 |
| | 1,772 |
| 2,394 |
| | (967 | ) |
CASH AND CASH EQUIVALENTS | | | | | | |
Net increase for the period | 127,230 |
| | 67,745 |
| 152,767 |
| | 24,511 |
|
Balance, beginning of period | 122,716 |
| | 119,557 |
| 105,349 |
| | 166,245 |
|
Balance, end of period | $ | 249,946 |
| | $ | 187,302 |
| $ | 258,116 |
| | $ | 190,756 |
|
SUPPLEMENTAL INFORMATION | | | | | | |
Net cash payments for interest expense | $ | 48,729 |
| | $ | 61,558 |
| |
Cash payments for interest expense | | $ | 49,001 |
| | $ | 48,128 |
|
Interest capitalized | 1,770 |
| | 1,699 |
| 2,524 |
| | 2,173 |
|
Cash payments for income taxes, net of refunds | 44,090 |
| | 33,141 |
| 30,604 |
| | 35,403 |
|
Capital expenditures in accounts payable | 5,582 |
| | 3,179 |
| 3,703 |
| | 4,333 |
|
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.
CEDAR FAIR, L.P.
INDEX FOR NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 24, 2017 AND SEPTEMBER 25, 2016
CEDAR FAIR, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements have been prepared from the financial records of Cedar Fair, L.P. (the Partnership)"Partnership," "we," "us," or "our") without audit and reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to fairly present the results of the interim periods covered in this report. Due to the seasonal nature of the Partnership'sour amusement and water park operations, the results for any interim period may not be indicative of the results expected for the full fiscal year.
(1) Significant Accounting and Reporting Policies:
The Partnership’sExcept for the changes described below, our unaudited condensed consolidated financial statements for the periods ended September 24, 2017 and September 25, 2016 included in this Form 10-Q report have been prepared in accordance with the accounting policies described in the Notes to Consolidated Financial Statements for the year ended December 31, 20162018, which were included in the Form 10-K filed on February 24, 2017.22, 2019. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the Commission)"Commission"). These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Form 10-K referred to above.
Adopted Accounting Pronouncements
In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). The amendments in ASU 2016-09 are meant to simplify the current accounting for share-based payment transactions, specifically the accounting for income taxes, award classification, cash flow presentation, and accounting for forfeitures. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. The PartnershipWe adopted this guidance in the first quarter of 2017. The impact of the guidance included: (1) prospective recognition of excess tax benefits and tax deficiencies as income tax expense (as opposed to the previous recognition in additional paid-in-capital), approximately $0.7 million of excess tax benefits were recognized in provision for taxes for the nine months ended September 24, 2017; (2) prospective exclusion of future excess tax benefits and deficiencies in the calculation of diluted shares, which had an immaterial impact on net income per limited partner unit for the nine months ending September 24, 2017; (3) prospective classification of excess tax benefits as an operating activity within the statement of cash flows (as opposed to the previous classification as a financing activity), approximately $0.7 million of excess tax benefits were classified as an operating activity for the nine months ended September 24, 2017; (4) the formal accounting policy election to recognize forfeitures as they occur (as opposed to estimating a forfeiture accrual), which did not have a material impact on the Partnership's financial statements; (5) retrospective classification of employee taxes paid when an employer withholds shares for tax withholding purposes as a financing activity within the statement of cash flows (as opposed to the previous classification as an operating activity), approximately $0.9 million was reclassified for the nine months ended September 25, 2016.
New Accounting Pronouncements
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). The ASU provides for a single, principles-based model for revenue recognition that replaces the existing revenue recognition guidance. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017 and will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective. It permits the use of either a retrospective or modified retrospective transition method, and early adoption is permitted only as of an annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period. The Partnership expects to adopt this standard in the first quarter of 2018 using the modified retrospective method. The Partnership anticipates the primary impact of the adoption on the consolidated financial statements will be the additional required disclosures around revenue recognition in the notes to the consolidated financial statements. The Partnership does not anticipate adoption of the standard to have a material effect on the consolidated financial statements.
In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases ("ASU 2016-02"). effective January 1, 2019 using the comparative reporting approach, which requires application of the new standard at the adoption date. The ASU requires the recognition of lease assets and lease liabilities within the balance sheet by lessees for operating leases, as well as requires additional disclosures in the condensed consolidated financial statements regarding the amount, timing, and uncertainty of cash flows arising from leases. The ASU does not significantly change the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee, nor does the ASU significantly change the accounting applied by a lessor. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. This ASU requires a modified retrospective method and applies toThe adoption of the earliest period presentedstandard resulted in the financial statements. The Partnership expects to adopt this standard in the first quarterrecognition of 2019. While the Partnership is still in the process of evaluating the effect this standard will have on the consolidated financial statements and related
disclosures, the Partnership anticipates recognizing a right-of-use assetassets and corresponding lease liability on the consolidated balance sheetliabilities for the Santa Clara land lease, as well as our other operating leases, upon adoption.
In January 2017,of $73.5 million and the
FASB issued Accounting Standards Update No. 2017-04, Simplifyingaddition of required disclosures (see Note 12). We elected not to reassess: whether any expired or existing contracts are or contain leases; the Testlease classification of any expired or existing leases; and the initial direct costs for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 eliminates step twoany existing leases. On June 28, 2019, we purchased the land at California's Great America from the goodwill impairment test. Instead, an entity should recognize an impairment chargelessor, the City of Santa Clara, for $150.3 million. Following the purchase, our remaining lease commitments were immaterial to the condensed consolidated financial statements. However, we assumed lease commitments when we completed the acquisition of the Schlitterbahn Waterpark & Resort New Braunfels and the Schlitterbahn Waterpark Galveston on July 1, 2019 (see Note 3). In particular, we assumed a lease commitment for the amount byland on which a reporting unit's carrying amount exceeds its fair value, not to exceedSchlitterbahn Waterpark Galveston is located. This land lease resulted in the carrying amountrecognition of goodwill. ASU 2017-04 is effective for annualan additional right-of-use asset totaling $6.8 million and any interim impairment tests for periods beginning after December 15, 2019 on a prospective basis. Early adoption is permitted for annual and any interim impairment tests occurring after January 1, 2017. The Partnership has adoptedan additional corresponding lease liability totaling $5.3 million during the standard for its 2017 annual impairment test which is currently in process. The Partnership does not anticipate the adoptionthird quarter of the standard to have a material effect on the consolidated financial statements.2019.
(2) Interim Reporting:
The Partnership owns and operates elevenWe are one of the largest regional amusement park operators in the world with 13 properties consisting of amusement parks, two separately gated outdoor water parks one indoor water park and five hotels. The Partnership'scomplementary resort facilities in our portfolio. All of our parks operate seasonally with the exception of Knott's Berry Farm. Our seasonal amusement parks are generally open during weekends beginning in April or May, and then daily from Memorial Day until Labor Day. After Labor Day, after which theyour seasonal parks are open during select weekends in September and, in most cases, October. The two separately gated outdoor water parks also operate seasonally, generally from Memorial Day to Labor Day, plus some additional weekends beforein the fourth quarter for Halloween and after this period.winter events. As a result, a substantial portion of the Partnership’sour revenues from these seasonal parks are generated during an approximate 130- to 140-day operating season with the major portion concentrated in the third quarter during the peak vacation months of July and August. In 2017, four of the seasonal properties will extend their operating seasons approximately 20 to 25 days to include WinterFest, a holiday event operating during November and December. Knott's Berry Farm continues to beis open daily on a year-round basis. Castaway Bay is generally open daily from Memorial Day to Labor Day with an additional limited daily schedule for the balance of the year.
To assure that these highly seasonal operations will not result in misleading comparisons of current and subsequent interim periods, the Partnership haswe have adopted the following accounting and reporting procedures for its seasonal parks:procedures: (a) revenues onfrom multi-use products are recognized over the estimated number of uses expected for each type of productproduct; and are adjustedthe estimated number of uses is reviewed and may be updated periodically during the operating season prior to the ticket or product expiration, which generally occurs no later than the close of the operating season,season; (b) depreciation, certain advertising and certain seasonal operating costs are expensed over each park’s operating season, including some costs incurred prior to the season, which are deferred and amortized over the season,season; and (c) all other costs are expensed as incurred or ratably over the entire year.
(3) Acquisitions:
On July 1, 2019, we completed the acquisition of 2 water parks and 1 resort in Texas, the Schlitterbahn Waterpark & Resort New Braunfels and the Schlitterbahn Waterpark Galveston ("Schlitterbahn parks"), for a cash purchase price of $257.7 million, subject to final working capital adjustments. The Schlitterbahn parks are included within our single reportable segment of amusement/water parks with accompanying resort facilities.
The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon management's estimated fair values at the date of acquisition. To the extent the purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets acquired, such excess was allocated to goodwill. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $178.0 million, property and equipment of $58.1 million and an indefinite-lived trade name of $23.2 million were recorded. All of the goodwill is expected to be deductible for income tax purposes. The purchase price allocation remains preliminary as management completes the valuation assessment of property acquired and finalizes the working capital adjustment.
The results of the Schlitterbahn parks' operations from the date of acquisition, including $41.5 million of net revenues and $20.2 million of net income, are included within the unaudited condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 29, 2019. Related acquisition transaction costs totaled $7.0 million for the nine months ended September 29, 2019 and are included within Selling, general and administrative expenses. If we had acquired the Schlitterbahn parks on January 1, 2018, our results for the nine months ended September 29, 2019 would have included net revenues and net income of approximately $68 million and $20 million, respectively. Comparable results for the nine months ended September 23, 2018 would have included net revenues and net income of approximately $66 million and $21 million, respectively.
In conjunction with the acquisition of the Schlitterbahn parks, we issued $500 million of 5.250% senior unsecured notes maturing in 2029 (see Note 7). The net proceeds from the offering of the notes were used to complete the acquisition, complete the purchase of land at California's Great America (see Note 12), to pay transaction fees and expenses, and for general corporate purposes and repayment of the revolving credit facility.
We completed an immaterial acquisition of Sawmill Creek Resort located in Huron, Ohio on July 3, 2019. Sawmill Creek Resort is a 236-room resort lodge located on 235 acres with a marina, a half-mile beach and 50 acres of undeveloped land.
(4) Revenue Recognition:
As disclosed within the unaudited condensed consolidated statements of operations and comprehensive income, revenues are generated from sales of (1) admission to our amusement parks and water parks, (2) food, merchandise and games both inside and outside the parks, and (3) accommodations, extra-charge products, and other revenue sources. Admission revenues include amounts paid to gain admission into our parks, including parking fees. Revenues related to extra-charge products, including premium benefit offerings such as front-of-line products, and online transaction fees charged to customers are included in "Accommodations, extra-charge products and other".
The following table presents net revenues disaggregated by revenues generated within the parks and revenues generated from out-of-park operations less amounts remitted to outside parties under concessionaire arrangements, described below, for the periods presented:
|
| | | | | | | | | | | | | | | | |
| | Three months ended | | Nine months ended |
(In thousands) | | September 29, 2019 | | September 23, 2018 | | September 29, 2019 | | September 23, 2018 |
In-park revenues | | $ | 658,645 |
| | $ | 611,999 |
| | $ | 1,114,240 |
| | $ | 1,005,133 |
|
Out-of-park revenues | | 76,347 |
| | 70,129 |
| | 140,452 |
| | 126,306 |
|
Concessionaire remittance | | (20,480 | ) | | (18,425 | ) | | (37,013 | ) | | (32,693 | ) |
Net revenues | | $ | 714,512 |
| | $ | 663,703 |
| | $ | 1,217,679 |
| | $ | 1,098,746 |
|
Due to our highly seasonal operations, a substantial portion of our revenues are generated during an approximate 130- to 140-day operating season. Most revenues are recognized on a daily basis based on actual guest spend at the properties. Revenues from multi-use products, including season-long products for admission, dining, beverage and other products, are recognized over the estimated number of uses expected for each type of product. The estimated number of uses is reviewed and may be updated periodically during the operating season prior to the ticket or product expiration, which generally occurs no later than the close of the operating season. The number of uses is estimated based on historical usage adjusted for expected usage. For any bundled products that include multiple performance obligations, revenue is allocated using the retail price of each distinct performance
obligation and any inherent discounts are allocated based on the gross margin and expected redemption of each performance obligation. We do not typically provide for refunds or returns.
In some instances, we arrange with outside parties ("concessionaires") to provide goods to guests, typically food and merchandise, and we act as an agent, resulting in net revenues recorded within the condensed consolidated statement of operations and comprehensive income. Concessionaire arrangement revenues are recognized over the operating season and are variable. Sponsorship revenues and marina revenues, which are classified as "Accommodations, extra-charge products and other," are recognized over the park operating season which represents the period in which the performance obligations are satisfied. Sponsorship revenues are typically fixed. However, some sponsorship revenues are variable based on achievement of specified operating metrics. We estimate variable revenues and perform a constraint analysis using both historical information and current trends to determine the amount of revenue that is not probable of a significant reversal.
Many products, including season-long products, are sold to customers in advance, resulting in a contract liability ("deferred revenue"). Deferred revenue is at its highest immediately prior to the peak summer season, and at its lowest in the fall after the peak summer season and at the beginning of the selling season for the next year's products. Season-long products represent the majority of the deferred revenue balance in any given period.
Of the $107.1 million of deferred revenue recorded as of January 1, 2019, 88% was related to season-long products. The remainder was related to deferred online transaction fees charged to customers, advanced ticket sales, marina deposits, advanced resort reservations, and other deferred revenue. During the nine months ended September 29, 2019, approximately $85.0 million of the deferred revenue balance as of January 1, 2019 was recognized. The remaining difference in the opening and closing balances of deferred revenue in the current period was attributable to additional season-long product sales during the first nine months of 2019.
Payment is due immediately on the transaction date for most products. Our receivable balance includes outstanding amounts on installment purchase plans which are offered for season-long products (and other select products for specific time periods), and includes sales to retailers, group sales and catering activities which are billed. Installment purchase plans vary in length from 3 monthly installments to 12 monthly installments. Payment terms for billings are typically net 30 days. Receivables are highest in the peak summer months and the lowest in the winter months. We are not exposed to a significant concentration of customer credit risk. As of September 29, 2019, December 31, 2018 and September 23, 2018, we recorded an $11.3 million, $2.6 million and $10.7 million allowance for doubtful accounts, respectively, representing estimated defaults on installment purchase plans. The default estimate is calculated using the historical default rate adjusted for current period trends. The allowance for doubtful accounts is recorded as a reduction of deferred revenue to the extent revenue has not been recognized on the corresponding season-long products.
Most deferred revenue from contracts with customers is classified as current within the balance sheet. However, a portion of deferred revenue from contracts with customers is classified as non-current during the third quarter related to season-long products sold in the current season for use in the subsequent season. Season-long products are sold beginning in August of the year preceding the operating season. Season-long products may be recognized 12 to 16 months after purchase depending on the date of sale. We estimate the number of uses expected outside of the next twelve months for each type of product and classify the related deferred revenue as non-current within "Other Liabilities" in the unaudited condensed consolidated balance sheets.
With the exception of the non-current deferred revenue described above, our contracts with customers have an original duration of one year or less. For these short-term contracts, we use the practical expedient, a relief provided in the accounting standard to simplify compliance, applicable to such contracts and have not disclosed the transaction price for the remaining performance obligations as of the end of each reporting period or when we expect to recognize this revenue. Further, we have elected to recognize incremental costs of obtaining a contract as an expense when incurred as the amortization period of the asset would be less than one year. Lastly, we have elected not to adjust consideration for the effects of significant financing components of our installment purchase plans because the terms of these plans do not exceed one year.
(5) Long-Lived Assets:
Long-lived assets are reviewed for impairment upon the occurrence of events or changes in circumstances that would indicate that the carrying value of the assets may not be recoverable. In order to determine if an asset has been impaired, assets are grouped and tested at the lowest level for which identifiable, independent cash flows are available. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in expected future cash flows; a sustained, significant decline in equity price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in
these factors could have a significant impact on the recoverability of these assets and could have a material impact on the Partnership'scondensed consolidated financial statements.
The long-lived operating asset impairment test involves a two-step process. The first step is a comparison of each asset group's carrying value to its estimated undiscounted future cash flows expected to result from the use of the assets, including disposition. Projected future cash flows reflect management's best estimates of economic and market conditions over the projected period, including growth rates in revenues and costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates. If the carrying value of the asset group is higher than its undiscounted future cash flows, there is an indication that impairment exists and the second step must be performed to measure the amount of impairment loss. The amount of impairment is determined by comparing the fair value of the asset group to its carrying value in a manner consistent with the highest and best use of those assets. The Partnership estimates fair value of operating assets using an income (discounted cash flows) approach, which uses an asset group's projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital reflective of current market conditions. If the fair value of the assets is less than their carrying value, an impairment charge is recorded for the difference.
Non-operating assets are evaluated for impairment based on changes in market conditions. When changes in market conditions are observed, impairment is estimated using a market-based approach. If the estimated fair value of the non-operating assets is less than their carrying value, an impairment charge is recorded for the difference.
During the third quarter of 2016, the Partnershipwe ceased operations of one1 of itsour separately gated outdoor water parks, Wildwater Kingdom, located near Cleveland in Aurora, Ohio. At the date that Wildwater Kingdom ceased operations, the only remaining long-lived asset was the approximateapproximately 670 acres of land owned by the Partnership. This land had an associated carrying value of $17.1 million.land. The Partnership assessed the remaining asset and concluded there was no impairment during the third quarter of 2016. The remaining Wildwater Kingdom acreage, reduced by acreage sold, is classified as assets held-for-salerecorded within "Other Assets" in the unaudited condensed consolidated balance sheet ($16.59.0 million as of September 24, 2017)29, 2019, December 31, 2018 and September 23, 2018).
(6) Goodwill and Other Intangible Assets:
Goodwill and other indefinite-lived intangible assets, including trade-names,trade names, are reviewed for impairment annually, or more frequently if indicators of impairment exist. As of September 24, 2017,29, 2019, there were no indicators of impairment. The Partnership's annual testing date is the first day of the fourth quarter. There were no impairments for any period presented.
A summary of changesChanges in the Partnership’s carrying value of goodwill for the nine months ended September 24, 201729, 2019 and September 25, 2016 is as follows:23, 2018 were:
|
| | | | | | | | | | | |
(In thousands) | Goodwill (gross) | | Accumulated Impairment Losses | | Goodwill (net) |
Balance as of December 31, 2018 | $ | 258,587 |
| | $ | (79,868 | ) | | $ | 178,719 |
|
| 177,994 |
| | — |
| | 177,994 |
|
Foreign currency translation | 1,738 |
| | — |
| | 1,738 |
|
Balance as of September 29, 2019 | $ | 438,319 |
| | $ | (79,868 | ) | | $ | 358,451 |
|
| | | | | |
Balance as of December 31, 2017 | $ | 263,698 |
| | $ | (79,868 | ) | | $ | 183,830 |
|
Foreign currency translation | (1,826 | ) | | — |
| | (1,826 | ) |
Balance as of September 23, 2018 | $ | 261,872 |
| | $ | (79,868 | ) | | $ | 182,004 |
|
|
| | | | | | | | | | | | |
(In thousands) | | Goodwill (gross) | | Accumulated Impairment Losses | | Goodwill (net) |
Balance at December 31, 2016 | | $ | 259,528 |
| | $ | (79,868 | ) | | $ | 179,660 |
|
Foreign currency translation | | 5,350 |
| | — |
| | 5,350 |
|
Balance at September 24, 2017 | | $ | 264,878 |
| | $ | (79,868 | ) | | $ | 185,010 |
|
| | | | | | |
Balance at December 31, 2015 | | $ | 290,679 |
| | $ | (79,868 | ) | | $ | 210,811 |
|
Foreign currency translation | | 4,649 |
| | — |
| | 4,649 |
|
Balance at September 25, 2016 | | $ | 295,328 |
| | $ | (79,868 | ) | | $ | 215,460 |
|
During the fourth quarter of 2016, management reassessed its accounting for the deferred income tax effects related to its Canadian disregarded entity temporary differences that were recorded in purchase accounting at the time of the acquisition. As a result, to appropriately reflect these tax effects, the Partnership recorded an adjustment that reduced goodwill and deferred tax liabilities by $33.9 million as of December 31, 2016. The adjustment did not impact the statement of operations and comprehensive income or the statement of cash flows for any period presented.
As of September 24, 2017,29, 2019, December 31, 2016,2018, and September 25, 2016, the Partnership’s23, 2018, other intangible assets consisted of the following:
|
| | | | | | | | | | | |
(In thousands) | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Value |
September 29, 2019 | | | | | |
Other intangible assets: | | | | | |
Trade names | $ | 58,981 |
| | $ | — |
| | $ | 58,981 |
|
License / franchise agreements | 3,509 |
| | (2,797 | ) | | 712 |
|
Total other intangible assets | $ | 62,490 |
| | $ | (2,797 | ) | | $ | 59,693 |
|
| | | | | |
December 31, 2018 | | | | | |
Other intangible assets: | | | | | |
Trade names | $ | 35,394 |
| | $ | — |
| | $ | 35,394 |
|
License / franchise agreements | 3,379 |
| | (2,397 | ) | | 982 |
|
Total other intangible assets | $ | 38,773 |
| | $ | (2,397 | ) | | $ | 36,376 |
|
| | | | | |
September 23, 2018 | | | | | |
Other intangible assets: | | | | | |
Trade names | $ | 36,125 |
| | $ | — |
| | $ | 36,125 |
|
License / franchise agreements | 3,351 |
| | (2,345 | ) | | 1,006 |
|
Total other intangible assets | $ | 39,476 |
| | $ | (2,345 | ) | | $ | 37,131 |
|
|
| | | | | | | | | | | | |
(In thousands) | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Value |
September 24, 2017 | | | | | | |
Other intangible assets: | | | | | | |
Trade names | | $ | 36,794 |
| | $ | — |
| | $ | 36,794 |
|
License / franchise agreements | | 3,361 |
| | (1,623 | ) | | 1,738 |
|
Total other intangible assets | | $ | 40,155 |
| | $ | (1,623 | ) | | $ | 38,532 |
|
| | | | | | |
December 31, 2016 | | | | | | |
Other intangible assets: | | | | | | |
Trade names | | $ | 35,603 |
| | $ | — |
| | $ | 35,603 |
|
License / franchise agreements | | 3,326 |
| | (1,092 | ) | | 2,234 |
|
Total other intangible assets | | $ | 38,929 |
| | $ | (1,092 | ) | | $ | 37,837 |
|
| | | | | | |
September 25, 2016 | | | | | | |
Other intangible assets: | | | | | | |
Trade names | | $ | 35,866 |
| | $ | — |
| | $ | 35,866 |
|
License / franchise agreements | | 1,475 |
| | (911 | ) | | 564 |
|
Total other intangible assets | | $ | 37,341 |
| | $ | (911 | ) | | $ | 36,430 |
|
Other intangible assets as of September 29, 2019 included $23.2 million for the Schlitterbahn trade name acquired on July 1, 2019, see Note 3. The Schlitterbahn trade name is an indefinite-lived intangible asset. Amortization expense of finite-lived other intangible assets is expected to continue to be immaterial going forward.
(7) Long-Term Debt:
Long-term debt as of September 24, 2017,29, 2019, December 31, 2016,2018, and September 25, 201623, 2018 consisted of the following:
|
| | | | | | | | | | | |
(In thousands) | September 24, 2017 | | December 31, 2016 | | September 25, 2016 |
| | | | | |
Term debt (1) | | | | | |
April 2017 U.S. term loan averaging 3.38% (due 2017-2024) | $ | 735,000 |
| | $ | — |
| | $ | — |
|
March 2013 U.S. term loan averaging 3.25% (due 2013-2020) | — |
| | 602,850 |
| | 602,850 |
|
Notes | | | | | |
April 2017 U.S. fixed rate notes at 5.375% (due 2027) | 500,000 |
| | — |
| | — |
|
June 2014 U.S. fixed rate notes at 5.375% (due 2024) | 450,000 |
| | 450,000 |
| | 450,000 |
|
March 2013 U.S. fixed rate notes at 5.25% (due 2021) | — |
| | 500,000 |
| | 500,000 |
|
| 1,685,000 |
| | 1,552,850 |
| | 1,552,850 |
|
Less current portion | — |
| | (2,775 | ) | | (1,200 | ) |
| 1,685,000 |
| | 1,550,075 |
| | 1,551,650 |
|
Less debt issuance costs | (25,374 | ) | | (15,864 | ) | | (16,979 | ) |
| $ | 1,659,626 |
| | $ | 1,534,211 |
| | $ | 1,534,671 |
|
|
| | | | | | | | | | | |
(In thousands) | September 29, 2019 | | December 31, 2018 | | September 23, 2018 |
| | | | | |
U.S. term loan averaging 4.16% YTD 2019; 3.83% in 2018; 3.75% YTD 2018 (due 2017-2024) (1) | $ | 733,125 |
| | $ | 735,000 |
| | $ | 735,000 |
|
Notes | | | | | |
2024 U.S. fixed rate notes at 5.375% | 450,000 |
| | 450,000 |
| | 450,000 |
|
2027 U.S. fixed rate notes at 5.375% | 500,000 |
| | 500,000 |
| | 500,000 |
|
2029 U.S. fixed rate notes at 5.250% | 500,000 |
| | — |
| | — |
|
| 2,183,125 |
| | 1,685,000 |
| | 1,685,000 |
|
Less current portion | (7,500 | ) | | (5,625 | ) | | (3,750 | ) |
| 2,175,625 |
| | 1,679,375 |
| | 1,681,250 |
|
Less debt issuance costs and original issue discount | (26,649 | ) | | (21,807 | ) | | (22,964 | ) |
| $ | 2,148,976 |
| | $ | 1,657,568 |
| | $ | 1,658,286 |
|
| |
(1) | The average interest rate is calculated over the life of the instrument and doesrates do not reflect the effect of interest rate swap agreements (see Note 6)8). |
Term Debt and Revolving Credit Facilities
In April 2017, the Partnership issued $500 million of 5.375% senior unsecured notes ("April 2017 notes"), maturing in 2027. The net proceeds from the offering of the April 2017 notes, together with borrowings under the 2017 Credit Agreement (defined below), were used to redeem all of the Partnership's 5.25% senior unsecured notes due 2021 ("March 2013 notes"), and pay accrued interest and transaction fees and expenses, to repay in full all amounts outstanding under its existing credit facilities and for general corporate purposes. The redemption of the March 2013 notes and repayments of the amounts outstanding under the existing credit facilities resulted in the write-off of debt issuance costs of $7.6 million and debt premium payments of $15.5 million. Accordingly, the Partnership recorded a loss on debt extinguishment of $23.1 million during the second quarter of 2017.
Concurrently with the April 2017 notes issuance, the Partnershipwe amended and restated itsour existing $885 million credit agreement (the "2013 Credit Agreement"), which included a $630 million senior secured term loan facility and a $255 million senior secured revolving credit facility.agreement. The $1,025 million amended and restated credit agreement (the "2017 Credit Agreement") includes a $750 million senior secured term loan facility and a $275 million senior secured revolving credit facility. The terms of2017 Credit Agreement was amended on March 14, 2018 (subsequently referred to as the "Amended 2017 Credit Agreement"). Specifically, the interest rate for the senior secured term loan facility include a maturity date of April 15, 2024 and an interest rate ofwas amended to London InterBank Offered Rate ("LIBOR") plus 225175 basis points (bps). The pricing terms for the amendment reflected $0.9 million of Original Issue Discount ("OID") and resulted in the write-off of debt issuance costs of $1.1 million which was recorded as a loss on early debt extinguishment during the first quarter of 2018. The senior secured term loan amortizes atfacility matures April 15, 2024 and $7.5 million is payable annually. The facilities provided under the Amended 2017 Credit Agreement are collateralized by substantially all of the assets of the Partnership.
Terms ofThe senior secured revolving credit facility under the Amended 2017 Credit Agreement includehas a revolving credit facilitycombined limit of a combined $275 million with a Canadian sub-limit of $15 million. Borrowings under the senior secured revolving credit facility bear interest at LIBOR or Canadian Dollar Offered Rate ("CDOR") plus 200 bps. The revolving credit facility is scheduled to mature in April 2022 and also provides for the issuance of documentary and standby letters of credit. As of September 29, 2019, 0 amounts were outstanding under the revolving credit facility. The Amended 2017 Credit Agreement requires the payment of a 37.5 bps commitment fee per annum on the unused portion of the credit facilities.
Notes
In June 2014, we issued $450 million of 5.375% senior unsecured notes ("2024 senior notes"). The 2024 senior notes pay interest semi-annually in June and December, with the principal due in full on June 1, 2024. The notes may be redeemed, in whole or in part, at various prices depending on the date redeemed.
In April 2017, concurrently with amending and restating our credit facilities, we issued $500 million of 5.375% senior unsecured notes maturing in 2027 ("2027 senior notes"). The net proceeds from the offering of the 2027 senior notes, together with borrowings under the 2017 Credit Agreement, were used to redeem all of our 5.25% senior unsecured notes due 2021 ("2021 senior notes"), and pay accrued interest and transaction fees and expenses, to repay in full all amounts outstanding under our existing credit facilities and for general corporate purposes. The redemption of the 2021 senior notes and repayments of the amounts outstanding under the existing credit facilities resulted in the write-off of debt issuance costs of $7.7 million and debt premium payments of $15.5 million. Accordingly, we recorded a loss on early debt extinguishment of $23.1 million during 2017.
The April 20172027 senior notes pay interest semi-annually in April and October, with the principal due in full on April 15, 2027. Prior to April 15, 2020, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 105.375% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any. The notes
may be redeemed, in whole or in part, at any time prior to April 15, 2022 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 and additional 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.
In June 2014,2019, in conjunction with the Partnershipacquisition of the Schlitterbahn parks (see Note 3), we issued $450$500 million of 5.375%5.250% senior unsecured notes ("June 2014 notes"), maturing in 2024.2029 ("2029 senior notes"). The Partnership's June 2014net proceeds from the offering of the 2029 senior notes were used to complete the acquisition, complete the purchase of land at California's Great America (see Note 12), to pay transaction fees and expenses, and for general corporate purposes and repayment of the revolving credit facility.
The 2029 senior notes pay interest semi-annually in JuneJanuary and December,July, with the principal due in full on June 1, 2024.July 15, 2029. Prior to July 15, 2022, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 105.250% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any. The notes may be redeemed, in whole or in part, at any time prior to June 1, 2019July 15, 2024 at a price equal to 100% of the principal amount of the notes redeemed together plus a "make-whole" premium together with accrued and unpaid interest and additional 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.
As market conditions warrant, we may from time to time repurchase debt securities issued in privately negotiated or open market transactions, by tender offer, exchange offer or otherwise.
Covenants
The Amended 2017 Credit Agreement includes a Consolidated Leverage Ratio, which if breached for any reason and not cured could result in an event of default. The ratio is set at a maximum of 5.50x consolidated total debt-to-consolidatedConsolidated Total Debt-to-Consolidated EBITDA. As of September 24, 2017, the Partnership was29, 2019, we were in compliance with this financial condition covenant and all other financial covenants under the Amended 2017 Credit Agreement.
The Partnership'sOur long-term debt agreements include Restricted Payment provisions. Pursuant to the terms of the indenture governing the Partnership's June 20142024 senior notes, which includes the most restrictive of these Restricted Payments provisions, the Partnershipwe can make Restricted Payments of $60 million annually so long as no default or event of default has occurred and is continuing; and the Partnership's ability towe can make additional Restricted Payments is permitted should the Partnership'sif our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio beis less than or equal to 5.00x.
As market conditions warrant, the Partnership may from time to time repurchase debt securities issued by the Partnership, in privately negotiated or open market transactions, by tender offer, exchange offer or otherwise.
(6)(8) Derivative Financial Instruments:
Derivative financial instruments are used within the Partnership’sour overall risk management program to manage certain interest rate and foreign currency risks. By utilizing a derivative instrument to hedge exposure to LIBOR rate changes, the Partnership iswe are exposed to counterparty credit risk, in particular the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, hedging instruments are placed with a counterparty that the Partnership believeswe believe poses minimal credit risk. The Partnership doesWe do not use derivative financial instruments for trading purposes.
In the first quarter of 2016, the Partnership amended each of its fourWe have 4 interest rate swap agreements to extend each of the maturities by two years tothat mature on December 31, 2020 and effectively convert $500 million of variable-rate debt to a rate of 2.64%4.39%. As a result of the amendments, the previously existingWe also have 4 additional interest rate swap agreements were de-designated, andthat convert the amounts recorded in AOCI are being amortized into earnings throughsame notional amount to a rate of 4.63% for the originalperiod December 31, 2018 maturity. The amended2020 through December 31, 2023. None of the interest rate swap agreements are not designated as hedging instruments.
The fair market value of the Partnership's swap portfolio was recorded within "Derivative Liability" onin the unaudited condensed consolidated balance sheets within "Derivative Liability" as of September 24, 2017,29, 2019 and December 31, 2016,2018 and within "Other Assets" as of September 25, 201623, 2018 as follows:
|
| | | | | | | | | | | | |
(In thousands) | | September 29, 2019 | | December 31, 2018 | | September 23, 2018 |
Derivatives not designated as hedging instruments: | | | | | | |
Interest rate swaps | | $ | (27,773 | ) | | $ | (6,705 | ) | | $ | 4,123 |
|
|
| | | | | | | | | | | | |
(In thousands) | | September 24, 2017 | | December 31, 2016 | | September 25, 2016 |
Derivatives not designated as hedging instruments: | | | | | | |
Interest rate swaps | | $ | (14,849 | ) | | $ | (17,721 | ) | | $ | (30,185 | ) |
Derivatives Designated as Hedging Instruments
Changes in fair value of highly effective hedges are recorded as a component of AOCI in the balance sheet. Any ineffectiveness is recognized immediately in income. Amounts recorded as a component of accumulated other comprehensive income are reclassified into earnings in the same period the forecasted transactions affect earnings. As a result of the first quarter of 2016 amendments, the previously existing interest rate swap agreements were de-designated and the amended interest rate swap agreements are not designated as hedging instruments. As of September 24, 2017, the Partnership has no designated derivatives; therefore, no amount of designated derivatives are forecasted to be reclassified into earnings in the next twelve months.
Derivatives Not Designated as Hedging Instruments
Instruments that do not qualify for hedge accounting or were de-designated are prospectively adjusted to fair value each reporting period through "Net effect of swaps" inwithin the unaudited condensed consolidated statements of operations and comprehensive income. The amounts that were previously recorded as a component of AOCI prior to the de-designation are reclassified to earnings, and a corresponding realized gain or loss will beis recognized when the forecasted cash flow occurs. As a result of the first quarter 2016 amendments, the previously existing interest rate swap agreements were de-designated, and the amounts previously recorded in AOCI are beingwere amortized into earnings through the original December 31, 2018 maturity. As of September 24, 2017, approximately $11.8 million ofmaturity date. Therefore, all losses remain in AOCI related to the effective cash flow hedge contracts prior to de-designation $9.5 millionhad been reclassified into earnings as of which will be reclassified to earnings within the next twelve months.
December 31, 2018.
The following table summarizes the effect of derivative instruments(gains) losses recognized in net income on income and other comprehensive income for the three months ended September 24, 2017 and September 25, 2016:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(In thousands) | | Amount of Gain (Loss) recognized in 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 Derivatives |
Designated Derivatives | | Three months ended 9/24/2017 | | Three months ended 9/25/2016 | | Designated Derivatives | | Three months ended 9/24/2017 | | Three months ended 9/25/2016 | | Derivatives Not Designated | | Three months ended 9/24/2017 | | Three months ended 9/25/2016 |
Interest rate swaps | | $ | — |
| | $ | — |
| | Interest Expense | | $ | — |
| | $ | — |
| | Net effect of swaps | | $ | 3,318 |
| | $ | 715 |
|
During the quarter ended September 24, 2017, the Partnership recognized $3.3 million of gains on the derivatives not designated as cash flow hedges and $2.4 million of expense representing the regular amortization of amountswere recorded in AOCI. The"Net effect of these amounts resulted in a benefit to earnings of $1.0 million recorded in “Net effect of swaps.”
During the quarter ended September 25, 2016, the Partnership recognized $0.7 million of gains on the derivatives not designated as cash flow hedges and $2.4 million of expense representing the amortization of amounts in AOCI. The effect of these amounts resulted in a charge to earnings of $1.7 million recorded in “Net effect of swaps.”
The following table summarizes the effect of derivative instruments on income and other comprehensive incomeswaps" for the nine months ended September 24, 2017 and September 25, 2016:periods presented as follows:
|
| | | | | | | | | | | | | | | | |
| | Three months ended | | Nine months ended |
(In thousands) | | September 29, 2019 | | September 23, 2018 | | September 29, 2019 | | September 23, 2018 |
Change in fair market value | | $ | 3,910 |
| | $ | (3,581 | ) | | $ | 21,068 |
| | $ | (12,845 | ) |
Amortization of amounts in AOCI | | — |
| | 2,364 |
| | — |
| | 7,094 |
|
Net effect of swaps | | $ | 3,910 |
| | $ | (1,217 | ) | | $ | 21,068 |
| | $ | (5,751 | ) |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(In thousands) | | Amount of Gain (Loss) recognized in 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 Derivatives |
Designated Derivatives | | Nine months ended 9/24/2017 | | Nine months ended 9/25/2016 | | Designated Derivatives | | Nine months ended 9/24/2017 | | Nine months ended 9/25/2016 | | Derivatives Not Designated | | Nine months ended 9/24/2017 | | Nine months ended 9/25/2016 |
Interest rate swaps | | $ | — |
| | $ | (4,671 | ) | | Interest Expense | | $ | — |
| | $ | (851 | ) | | Net effect of swaps | | $ | 3,378 |
| | $ | (2,596 | ) |
During the nine-month period ended September 24, 2017, the Partnership recognized $3.4 million of gains on the derivatives not designated as cash flow hedges and $7.1 million of expense representing the regular amortization of amounts in AOCI. The effect of these amounts resulted in a charge to earnings of $3.7 million recorded in “Net effect of swaps.”
During the nine-month period ended September 25, 2016, the Partnership recognized $2.6 million of losses on the derivatives not designated as cash flow hedges and $6.3 million of expense representing the amortization of amounts in AOCI. The effect of these amounts resulted in a charge to earnings of $8.9 million recorded in “Net effect of swaps.”
(7)(9) Fair Value Measurements:
The FASB's Accounting Standards Codification (ASC) 820 - Fair Value Measurements and Disclosures 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, FASB ASC 820the standard 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 24, 2017,29, 2019, December 31, 2016,2018, and September 25, 201623, 2018 on a recurring basis as well as the fair values of other financial instruments:
|
| | | | | | | | | | | | | | | | | | | | | | | |
(In thousands) | Unaudited Condensed Consolidated Balance Sheet Location | Fair Value Hierarchy Level | | September 29, 2019 | | December 31, 2018 | | September 23, 2018 |
| Carrying Value | Fair Value | | Carrying Value | Fair Value | | Carrying Value | Fair Value |
Financial assets (liabilities) measured on a recurring basis: |
Short-term investments | Other current assets | Level 1 | | $ | 476 |
| $ | 476 |
| | $ | 511 |
| $ | 511 |
| | $ | 1,081 |
| $ | 1,081 |
|
Interest rate swaps | Other Assets (Derivative Liability) | Level 2 | | $ | (27,773 | ) | $ | (27,773 | ) | | $ | (6,705 | ) | $ | (6,705 | ) | | $ | 4,123 |
| $ | 4,123 |
|
Other financial assets (liabilities): |
Term debt | Long-Term Debt (1) | Level 2 | | $ | (725,625 | ) | $ | (727,439 | ) | | $ | (729,375 | ) | $ | (707,494 | ) | | $ | (731,250 | ) | $ | (734,906 | ) |
2024 senior notes | Long-Term Debt (1) | Level 1 | | $ | (450,000 | ) | $ | (462,938 | ) | | $ | (450,000 | ) | $ | (441,000 | ) | | $ | (450,000 | ) | $ | (450,000 | ) |
2027 senior notes | Long-Term Debt (1) | Level 1 | | $ | (500,000 | ) | $ | (535,000 | ) | | $ | (500,000 | ) | $ | (475,000 | ) | | $ | (500,000 | ) | $ | (485,000 | ) |
2029 senior notes | Long-Term Debt (1) | Level 2 | | $ | (500,000 | ) | $ | (533,750 | ) | | — |
| — |
| | — |
| — |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
(In thousands) | Unaudited Condensed Consolidated Balance Sheet Location | Fair Value Hierarchy Level | | September 24, 2017 | | December 31, 2016 | | September 25, 2016 |
| Carrying Value | Fair Value | | Carrying Value | Fair Value | | Carrying Value | Fair Value |
Financial assets (liabilities) measured on a recurring basis: |
Short-term investments | Other current assets | Level 1 | | $ | 688 |
| $ | 688 |
| | — |
| — |
| | — |
| — |
|
Interest rate swap agreements not designated as cash flow hedges | Derivative Liability | Level 2 | | $ | (14,849 | ) | $ | (14,849 | ) | | $ | (17,721 | ) | $ | (17,721 | ) | | $ | (30,185 | ) | $ | (30,185 | ) |
Other financial assets (liabilities): |
March 2013 term debt | Long-Term Debt (1) | Level 2 | | — |
| — |
| | $ | (600,075 | ) | $ | (603,075 | ) | | $ | (601,650 | ) | $ | (603,154 | ) |
April 2017 term debt | Long-Term Debt (1) | Level 2 | | $ | (735,000 | ) | $ | (740,513 | ) | | — |
| — |
| | — |
| — |
|
March 2013 notes | Long-Term Debt (1) | Level 1 | | — |
| — |
| | $ | (500,000 | ) | $ | (510,000 | ) | | $ | (500,000 | ) | $ | (520,000 | ) |
June 2014 notes | Long-Term Debt (1) | Level 1 | | $ | (450,000 | ) | $ | (472,500 | ) | | $ | (450,000 | ) | $ | (462,375 | ) | | $ | (450,000 | ) | $ | (477,000 | ) |
April 2017 notes | Long-Term Debt (1) | Level 2 | | $ | (500,000 | ) | $ | (527,500 | ) | | — |
| — |
| | — |
| — |
|
| |
(1) | Carrying values of long-term debt balances are before reductions for debt issuance costs and original issue discount of $25.4$26.6 million, $15.9$21.8 million, and $17.0$23.0 million as of September 24, 2017,29, 2019, December 31, 2016,2018, and September 25, 2016,23, 2018, respectively. |
Fair values of the interest rate swap agreements are determined using significant inputs, including the LIBOR forward curves, which are considered Level 2 observable market inputs.
The carrying value of cash and cash equivalents, revolving credit loans, accounts receivable, current portion of term debt, 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 as of September 24, 2017,29, 2019, December 31, 2016,2018 or September 25, 2016.23, 2018.
(8)(10) Earnings per Unit:
Net income per limited partner unit iswas calculated based on the following unit amounts:
|
| | | | | | | | | | | | | | | |
| Three months ended | | Nine months ended |
| September 29, 2019 | | September 23, 2018 | | September 29, 2019 | | September 23, 2018 |
| (In thousands, except per unit amounts) |
Basic weighted average units outstanding | 56,519 |
| | 56,231 |
| | 56,344 |
| | 56,205 |
|
Effect of dilutive units: | | | | | | | |
Deferred units | 48 |
| | 46 |
| | 51 |
| | 46 |
|
Performance units | — |
| | — |
| | 33 |
| | 49 |
|
Restricted units | 239 |
| | 277 |
| | 263 |
| | 289 |
|
Unit options | 125 |
| | 142 |
| | 125 |
| | 164 |
|
Diluted weighted average units outstanding | 56,931 |
| | 56,696 |
| | 56,816 |
| | 56,753 |
|
Net income per unit - basic | $ | 3.36 |
| | $ | 3.79 |
| | $ | 3.01 |
| | $ | 2.65 |
|
Net income per unit - diluted | $ | 3.34 |
| | $ | 3.76 |
| | $ | 2.98 |
| | $ | 2.63 |
|
|
| | | | | | | | | | | | | | | |
| Three months ended | | Nine months ended |
| 9/24/2017 | | 9/25/2016 | | 9/24/2017 | | 9/25/2016 |
| (In thousands, except per unit amounts) |
Basic weighted average units outstanding | 56,078 |
| | 55,948 |
| | 56,062 |
| | 55,922 |
|
Effect of dilutive units: | | | | | | | |
Deferred units | 44 |
| | 33 |
| | 41 |
| | 30 |
|
Performance units | — |
| | — |
| | 48 |
| | 43 |
|
Restricted units | 284 |
| | 253 |
| | 292 |
| | 266 |
|
Unit options | 185 |
| | 131 |
| | 188 |
| | 131 |
|
Diluted weighted average units outstanding | 56,591 |
| | 56,365 |
| | 56,631 |
| | 56,392 |
|
Net income per unit - basic | $ | 3.41 |
| | $ | 3.13 |
| | $ | 2.82 |
| | $ | 3.30 |
|
Net income per unit - diluted | $ | 3.38 |
| | $ | 3.10 |
| | $ | 2.79 |
| | $ | 3.27 |
|
(9)(11) Income and Partnership Taxes:
We are subject to publicly traded partnership tax (PTP tax) on certain partnership level gross income (net revenues less cost of food, merchandise, and games revenues), state and local income taxes on partnership income, U.S. federal state and local income taxes on income from our corporate subsidiaries and foreign income taxes on our foreign subsidiary. As such, the total provision (benefit) for taxes includes amounts for the PTP gross income tax and federal, state, local and foreign income taxes. Under the applicable accounting rules, the total provision (benefit) for income taxes are recognized forincludes 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 representrepresents future tax consequences of events that have beenare recognized differentlyin different periods in the financial statements than for tax purposes.
The incometotal tax provision (benefit) for interim periods is determined by applying an estimated annual effective tax rate to the applicable quarterly income (loss) of. Our consolidated estimated annual effective tax rate differs from the Partnership’s corporate subsidiaries. In additionstatutory federal income tax rate primarily due to state, local and foreign income taxes on its corporate subsidiaries, the Partnership isand certain partnership level income not being subject to 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 subsidiaries.federal tax.
As of the end of the third quarter of 2017, the Partnership has recorded $0.7 million of unrecognizedUnrecognized tax benefits, including accrued interest and/orand penalties, related to statewere not material in any period presented. We recognize interest and local tax filing positions. The Partnership recognizes interest and/or penalties related to unrecognized tax benefits in theas income tax provision. The Partnership does not anticipate that the balance of the unrecognized tax benefit will change significantly over the next 12 months.expense.
(10)(12) Lease Commitments and Contingencies:
Lease Commitments
We have commitments under various operating leases. Right-of-use assets and lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Partnershipdiscount rate used to determine the present value of the future lease payments is our incremental borrowing rate as the rate implicit in most of our leases is not readily determinable. As a practical expedient, we recognize lease payments for short-term leases on a straight-line basis over the lease term and have elected to not separate lease components from non-lease components.
Prior to the second quarter of 2019, our most significant lease commitment was for the land on which California's Great America is located in the City of Santa Clara, which had an initial term through 2039 with renewal options through 2074. On June 28, 2019, we purchased the land at California's Great America from the lessor, the City of Santa Clara, for $150.3 million. Following the purchase, our remaining lease commitments were immaterial to the condensed consolidated financial statements. However, we assumed lease commitments when we completed the acquisition of the Schlitterbahn parks on July 1, 2019 (see Note 3). In particular, we assumed a lease commitment for the land on which Schlitterbahn Waterpark Galveston is located. This land lease resulted in the recognition of an additional right-of-use asset totaling $6.8 million and an additional corresponding lease liability totaling $5.3 million during the third quarter of 2019.
We lease a portion of the California's Great America parking lot to the Santa Clara Stadium Authority during Levi's Stadium events. The lease is effective through the life of the stadium, or approximately 25 years, from the opening of the stadium through 2039. The lease payments were prepaid, and the corresponding revenue is being recognized over the life of the stadium. We have also entered into various operating leases for office space, office equipment, vehicles, and revenue-generating assets. These lease commitments are immaterial to the condensed consolidated financial statements.
Total lease cost and related supplemental information as of September 29, 2019 was as follows:
|
| | | | |
(In thousands, except for lease term and discount rate) | | September 29, 2019 |
Operating lease expense | | $ | 4,718 |
|
Variable lease expense | | 1,383 |
|
Short-term lease expense | | 3,739 |
|
Sublease income | | (244 | ) |
Total lease cost | | $ | 9,596 |
|
| | |
Weighted-average remaining lease term | | 19.3 years |
|
Weighted-average discount rate | | 4.4 | % |
Operating cash flows for operating leases | | $ | 4,784 |
|
Leased assets obtained in exchange for new operating lease liabilities (non-cash activity) | | $ | 1,516 |
|
Lease expense, which includes short-term rentals for equipment and machinery, for the nine months ended September 23, 2018 totaled $11.7 million.
Future undiscounted cash flows under our operating leases and a reconciliation to the operating lease liabilities recognized as of September 29, 2019 are included below:
|
| | | | |
(In thousands) | | September 29, 2019 |
Undiscounted cash flows | | |
Remainder of 2019 | | $ | 610 |
|
2020 | | 2,129 |
|
2021 | | 1,282 |
|
2022 | | 690 |
|
2023 | | 470 |
|
Thereafter | | 8,747 |
|
Total | | $ | 13,928 |
|
| | |
Present value of cash flows | | |
Current lease liability | | $ | 1,926 |
|
Lease Liability | | 7,440 |
|
Total | | $ | 9,366 |
|
| | |
Difference between undiscounted cash flows and discounted cash flows | | $ | 4,562 |
|
Contingencies
We are a party to a number of lawsuits arising in the normal course of business. In the opinion of management, none of these matters are expected to have a material effect in the aggregate on the Partnership'scondensed consolidated financial statements.
(11)(13) Changes in Accumulated Other Comprehensive Income by Component:
The following tables reflect the changes in accumulated other comprehensive income (loss) related to limited partners' equity for the three monthsthree- and nine-month periods ended September 24, 201729, 2019 and September 25, 2016:23, 2018:
|
| | | | | | | | | | | | |
(In thousands) | | Foreign Currency Translation | | Cash Flow Hedging Derivative Activity | | Total |
For the three months ended | | | |
Balance as of June 24, 2018 | | $ | 15,308 |
| | $ | (4,232 | ) | | $ | 11,076 |
|
Other comprehensive income before reclassifications, net of tax ($1,055) | | (5,276 | ) | | — |
| | (5,276 | ) |
Amounts reclassified from accumulated other comprehensive income, net of tax ($249) | | — |
| | 2,116 |
| | 2,116 |
|
Balance as of September 23, 2018 | | $ | 10,032 |
| | $ | (2,116 | ) | | $ | 7,916 |
|
| | | | | | |
Balance as of June 30, 2019 | | $ | 13,600 |
| | $ | — |
| | $ | 13,600 |
|
Other comprehensive income before reclassifications, net of tax $478 | | 2,554 |
| | — |
| | 2,554 |
|
Balance as of September 29, 2019 | | $ | 16,154 |
| | $ | — |
| | $ | 16,154 |
|
| | | | | | |
For the nine months ended | | Foreign Currency Translation | | Cash Flow Hedging Derivative Activity | | Total |
Balance as of December 31, 2017 | | $ | 4,042 |
| | $ | (7,975 | ) | | $ | (3,933 | ) |
Other comprehensive income before reclassifications, net of tax $1,247 | | 5,990 |
| | — |
| | 5,990 |
|
Amounts reclassified from accumulated other comprehensive income, net of tax ($845) | | — |
| | 6,250 |
| | 6,250 |
|
Reclassification of stranded tax effect | | — |
| | (391 | ) | | (391 | ) |
Balance as of September 23, 2018 | | $ | 10,032 |
| | $ | (2,116 | ) | | $ | 7,916 |
|
| | | | | | |
Balance as of December 31, 2018 | | $ | 21,282 |
| | $ | — |
| | $ | 21,282 |
|
Other comprehensive income before reclassifications, net of tax ($1,142) | | (5,128 | ) | | — |
| | (5,128 | ) |
Balance as of September 29, 2019 | | $ | 16,154 |
| | $ | — |
| | $ | 16,154 |
|
|
| | | | | | | | | | | | | | | | |
Reclassifications Out of Accumulated Other Comprehensive Income |
(In thousands) | Affected Income Statement Location | Three months ended | | Nine months ended |
AOCI Component | September 29, 2019 | | September 23, 2018 | | September 29, 2019 | | September 23, 2018 |
Interest rate contracts | Net effect of swaps | $ | — |
| | $ | 2,365 |
| | $ | — |
| | $ | 7,095 |
|
Provision for taxes | Provision for taxes | — |
| | (249 | ) | | — |
| | (845 | ) |
Losses on cash flow hedges | Net of tax | $ | — |
| | $ | 2,116 |
| | $ | — |
| | $ | 6,250 |
|
|
| | | | | | | | | | | | | |
Changes in Accumulated Other Comprehensive Income by Component (1) |
(In thousands) | | Gains and Losses on Cash Flow Hedges | | Foreign Currency Translation | | Total |
Balance at June 25, 2017 | | $ | (11,963 | ) | | $ | 16,949 |
| | $ | 4,986 |
|
| | | | | | | |
Other comprehensive income before reclassifications | | — |
| | (11,143 | ) | | (11,143 | ) |
| | | | | | | |
Amounts reclassified from accumulated other comprehensive income, net of tax ($371) (2) | | 1,994 |
| | — |
| | 1,994 |
|
| | | | | | | |
Net other comprehensive income | | 1,994 |
| | (11,143 | ) | | (9,149 | ) |
| | | | | | | |
Balance at September 24, 2017 | | $ | (9,969 | ) | | $ | 5,806 |
| | $ | (4,163 | ) |
| |
(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 Translation | | Total |
Balance at June 26, 2016 | | $ | (19,938 | ) | | $ | 15,747 |
| | $ | (4,191 | ) |
| | | | | | | |
Other comprehensive income before reclassifications, net of tax ($803) | | — |
| | 1,397 |
| | 1,397 |
|
| | | | | | | |
Amounts reclassified from accumulated other comprehensive income, net of tax ($371) (2) | | 1,994 |
| | — |
| | 1,994 |
|
| | | | | | | |
Net other comprehensive income | | 1,994 |
| | 1,397 |
| | 3,391 |
|
| | | | | | | |
Balance at September 25, 2016 | | $ | (17,944 | ) | | $ | 17,144 |
| | $ | (800 | ) |
| |
(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 |
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 |
(In thousands) | | Three months ended 9/24/2017 | | Three months ended 9/25/2016 | | |
Interest rate contracts | | $ | 2,365 |
| | $ | 2,365 |
| | Net effect of swaps |
Provision for taxes | | (371 | ) | | (371 | ) | | Provision for taxes |
Losses on cash flow hedges | | $ | 1,994 |
| | $ | 1,994 |
| | Net of tax |
The following tables reflect the changes in accumulated other comprehensive income related to limited partners' equity for the nine months ended September 24, 2017 and September 25, 2016:
|
| | | | | | | | | | | | | |
Changes in Accumulated Other Comprehensive Income by Component (1) |
(In thousands) | | Gains and Losses on Cash Flow Hedges | | Foreign Currency Translation | | Total |
Balance at December 31, 2016 | | $ | (15,950 | ) | | $ | 18,891 |
| | $ | 2,941 |
|
| | | | | | | |
Other comprehensive income before reclassifications | | — |
| | (13,085 | ) | | (13,085 | ) |
| | | | | | | |
Amounts reclassified from accumulated other comprehensive income, net of tax ($1,113) (2) | | 5,981 |
| | — |
| | 5,981 |
|
| | | | | | | |
Net other comprehensive income | | 5,981 |
| | (13,085 | ) | | (7,104 | ) |
| | | | | | | |
Balance at September 24, 2017 | | $ | (9,969 | ) | | $ | 5,806 |
| | $ | (4,163 | ) |
| |
(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 Translation | | Total |
Balance at December 31, 2015 | | $ | (19,300 | ) | | $ | 22,591 |
| | $ | 3,291 |
|
| | | | | | | |
Other comprehensive income before reclassifications, net of tax $711 and $3,131, respectively | | (3,960 | ) | | (5,447 | ) | | (9,407 | ) |
| | | | | | | |
Amounts reclassified from accumulated other comprehensive income, net of tax ($990) (2) | | 5,316 |
| | — |
| | 5,316 |
|
| | | | | | | |
Net other comprehensive income | | 1,356 |
| | (5,447 | ) | | (4,091 | ) |
| | | | | | | |
Balance at September 25, 2016 | | $ | (17,944 | ) | | $ | 17,144 |
| | $ | (800 | ) |
| |
(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 |
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 |
(In thousands) | | Nine months ended 9/24/2017 | | Nine months ended 9/25/2016 | | |
Interest rate contracts | | $ | 7,094 |
| | $ | 6,306 |
| | Net effect of swaps |
Provision for taxes | | (1,113 | ) | | (990 | ) | | Provision for taxes |
Losses on cash flow hedges | | $ | 5,981 |
| | $ | 5,316 |
| | Net of tax |
(12)(14) Consolidating Financial Information of Guarantors and Issuers:Issuers of 2024 Senior Notes:
Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), and Magnum Management Corporation ("Magnum") are the co-issuers of the Partnership's June 20142024 senior notes (see Note 5)7). 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 24, 2017,29, 2019, December 31, 2016,2018, and September 25, 201623, 2018 and for the three-monththree and nine-monthnine month periods ended September 24, 201729, 2019 and September 25, 2016.23, 2018. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, the Partnership has included the accompanying unaudited condensed consolidating financial statements.statements have been included.
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
September 24, 201729, 2019
(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 | | $ | — |
| | $ | — |
| | $ | 92,047 |
| | $ | 160,593 |
| | $ | (2,694 | ) | | $ | 249,946 |
|
Receivables | | — |
| | 1,285 |
| | 33,158 |
| | 837,594 |
| | (819,734 | ) | | 52,303 |
|
Inventories | | — |
| | — |
| | 2,423 |
| | 31,817 |
| | — |
| | 34,240 |
|
Other current assets | | 275 |
| | 12,843 |
| | 743 |
| | 16,829 |
| | (12,066 | ) | | 18,624 |
|
| | 275 |
| | 14,128 |
| | 128,371 |
| | 1,046,833 |
| | (834,494 | ) | | 355,113 |
|
Property and Equipment, net | | — |
| | 842 |
| | 183,205 |
| | 1,396,463 |
| | — |
| | 1,580,510 |
|
Investment in Park | | 566,548 |
| | 1,016,857 |
| | 224,464 |
| | 222,953 |
| | (2,030,822 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 64,730 |
| | 119,606 |
| | — |
| | 185,010 |
|
Other Intangibles, net | | — |
| | — |
| | 14,443 |
| | 24,089 |
| | — |
| | 38,532 |
|
Deferred Tax Asset | | — |
| | 32,190 |
| | — |
| | — |
| | (32,190 | ) | | — |
|
Other Assets | | — |
| | — |
| | 53 |
| | 17,354 |
| | — |
| | 17,407 |
|
| | $ | 567,497 |
| | $ | 1,064,017 |
| | $ | 615,266 |
| | $ | 2,827,298 |
| | $ | (2,897,506 | ) | | $ | 2,176,572 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Accounts payable | | $ | 478,416 |
| | $ | 345,150 |
| | $ | 6,431 |
| | $ | 26,141 |
| | $ | (822,428 | ) | | $ | 33,710 |
|
Deferred revenue | | — |
| | — |
| | 7,137 |
| | 79,595 |
| | — |
| | 86,732 |
|
Accrued interest | | 292 |
| | 195 |
| | 9,209 |
| | 14,232 |
| | — |
| | 23,928 |
|
Accrued taxes | | 1,589 |
| | — |
| | 14,910 |
| | 74,224 |
| | (12,066 | ) | | 78,657 |
|
Accrued salaries, wages and benefits | | — |
| | 28,306 |
| | 2,360 |
| | — |
| | — |
| | 30,666 |
|
Self-insurance reserves | | — |
| | 12,090 |
| | 1,725 |
| | 13,734 |
| | — |
| | 27,549 |
|
Other accrued liabilities | | 2,985 |
| | 7,772 |
| | 499 |
| | 9,306 |
| | — |
| | 20,562 |
|
| | 483,282 |
| | 393,513 |
| | 42,271 |
| | 217,232 |
| | (834,494 | ) | | 301,804 |
|
Deferred Tax Liability | | — |
| | — |
| | 19,511 |
| | 125,350 |
| | (32,190 | ) | | 112,671 |
|
Derivative Liability | | 8,933 |
| | 5,916 |
| | — |
| | — |
| | — |
| | 14,849 |
|
Other Liabilities | | — |
| | 1,398 |
| | — |
| | 10,942 |
| | — |
| | 12,340 |
|
Long-Term Debt: | | | | | | | | | | | | |
Term debt | | — |
| | 127,402 |
| | — |
| | 595,983 |
| | — |
| | 723,385 |
|
Notes | | — |
| | — |
| | 444,874 |
| | 491,367 |
| | — |
| | 936,241 |
|
| | — |
| | 127,402 |
| | 444,874 |
| | 1,087,350 |
| | — |
| | 1,659,626 |
|
| | | | | | | | | | | | |
Equity | | 75,282 |
| | 535,788 |
| | 108,610 |
| | 1,386,424 |
| | (2,030,822 | ) | | 75,282 |
|
| | $ | 567,497 |
| | $ | 1,064,017 |
| | $ | 615,266 |
| | $ | 2,827,298 |
| | $ | (2,897,506 | ) | | $ | 2,176,572 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | 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 | | $ | — |
| | $ | — |
| | $ | 72,626 |
| | $ | 186,076 |
| | $ | (586 | ) | | $ | 258,116 |
|
Receivables | | — |
| | 1,013 |
| | 34,777 |
| | 1,065,774 |
| | (1,032,810 | ) | | 68,754 |
|
Inventories | | — |
| | — |
| | 2,616 |
| | 35,118 |
| | — |
| | 37,734 |
|
Other current assets | | 290 |
| | 585 |
| | 3,610 |
| | 18,067 |
| | (2,356 | ) | | 20,196 |
|
| | 290 |
| | 1,598 |
| | 113,629 |
| | 1,305,035 |
| | (1,035,752 | ) | | 384,800 |
|
Property and Equipment, net | | — |
| | 777 |
| | 180,417 |
| | 1,651,137 |
| | — |
| | 1,832,331 |
|
Investment in Park | | 681,560 |
| | 1,373,024 |
| | 291,833 |
| | 264,426 |
| | (2,610,843 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 60,178 |
| | 297,599 |
| | — |
| | 358,451 |
|
Other Intangibles, net | | — |
| | — |
| | 13,415 |
| | 46,278 |
| | — |
| | 59,693 |
|
Deferred Tax Asset | | — |
| | 18,224 |
| | — |
| | — |
| | (18,224 | ) | | — |
|
Right-of-Use Asset | | — |
| | — |
| | 83 |
| | 10,984 |
| | — |
| | 11,067 |
|
Other Assets | | — |
| | — |
| | 38 |
| | 11,631 |
| | — |
| | 11,669 |
|
| | $ | 682,524 |
| | $ | 1,393,623 |
| | $ | 659,593 |
| | $ | 3,587,090 |
| | $ | (3,664,819 | ) | | $ | 2,658,011 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 1,313 |
| | $ | — |
| | $ | 6,187 |
| | $ | — |
| | $ | 7,500 |
|
Accounts payable | | 630,144 |
| | 406,621 |
| | 3,198 |
| | 26,361 |
| | (1,033,396 | ) | | 32,928 |
|
Deferred revenue | | — |
| | — |
| | 12,344 |
| | 117,921 |
| | — |
| | 130,265 |
|
Accrued interest | | 136 |
| | 91 |
| | 7,999 |
| | 21,955 |
| | — |
| | 30,181 |
|
Accrued taxes | | 1,955 |
| | 217 |
| | — |
| | 48,449 |
| | (2,356 | ) | | 48,265 |
|
Accrued salaries, wages and benefits | | — |
| | 35,923 |
| | 3,283 |
| | — |
| | — |
| | 39,206 |
|
Self-insurance reserves | | — |
| | 9,837 |
| | 1,560 |
| | 12,440 |
| | — |
| | 23,837 |
|
Other accrued liabilities | | 3,524 |
| | 4,276 |
| | 498 |
| | 8,999 |
| | — |
| | 17,297 |
|
| | 635,759 |
| | 458,278 |
| | 28,882 |
| | 242,312 |
| | (1,035,752 | ) | | 329,479 |
|
Deferred Tax Liability | | — |
| | — |
| | 13,366 |
| | 87,516 |
| | (18,224 | ) | | 82,658 |
|
Derivative Liability | | 4,046 |
| | 23,727 |
| | — |
| | — |
| | — |
| | 27,773 |
|
Lease Liability | | — |
| | — |
| | 68 |
| | 7,372 |
| | — |
| | 7,440 |
|
Other Liabilities | | — |
| | 761 |
| | 477 |
| | 17,728 |
| | — |
| | 18,966 |
|
Long-Term Debt: | | | | | | | | | | | | |
Term debt | | — |
| | 126,028 |
| | — |
| | 591,336 |
| | — |
| | 717,364 |
|
Notes | | — |
| | — |
| | 446,665 |
| | 984,947 |
| | — |
| | 1,431,612 |
|
| | — |
| | 126,028 |
| | 446,665 |
| | 1,576,283 |
| | — |
| | 2,148,976 |
|
| | | | | | | | | | | | |
Equity | | 42,719 |
| | 784,829 |
| | 170,135 |
| | 1,655,879 |
| | (2,610,843 | ) | | 42,719 |
|
| | $ | 682,524 |
| | $ | 1,393,623 |
| | $ | 659,593 |
| | $ | 3,587,090 |
| | $ | (3,664,819 | ) | | $ | 2,658,011 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 20162018
(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 | | $ | — |
| | $ | — |
| | $ | 73,326 |
| | $ | 32,715 |
| | $ | (692 | ) | | $ | 105,349 |
|
Receivables | | — |
| | 1,093 |
| | 34,497 |
| | 938,397 |
| | (922,469 | ) | | 51,518 |
|
Inventories | | — |
| | — |
| | 2,135 |
| | 28,618 |
| | — |
| | 30,753 |
|
Other current assets | | 179 |
| | 1,411 |
| | 5,462 |
| | 10,544 |
| | (5,007 | ) | | 12,589 |
|
| | 179 |
| | 2,504 |
| | 115,420 |
| | 1,010,274 |
| | (928,168 | ) | | 200,209 |
|
Property and Equipment, net | | — |
| | 802 |
| | 172,344 |
| | 1,426,292 |
| | — |
| | 1,599,438 |
|
Investment in Park | | 601,706 |
| | 1,182,345 |
| | 262,462 |
| | 218,575 |
| | (2,265,088 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 58,440 |
| | 119,605 |
| | — |
| | 178,719 |
|
Other Intangibles, net | | — |
| | — |
| | 13,030 |
| | 23,346 |
| | — |
| | 36,376 |
|
Deferred Tax Asset | | — |
| | 18,224 |
| | — |
| | — |
| | (18,224 | ) | | — |
|
Other Assets | | — |
| | — |
| | 36 |
| | 9,405 |
| | — |
| | 9,441 |
|
| | $ | 602,559 |
| | $ | 1,203,875 |
| | $ | 621,732 |
| | $ | 2,807,497 |
| | $ | (3,211,480 | ) | | $ | 2,024,183 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 984 |
| | $ | — |
| | $ | 4,641 |
| | $ | — |
| | $ | 5,625 |
|
Accounts payable | | 565,472 |
| | 359,953 |
| | 2,430 |
| | 18,620 |
| | (923,161 | ) | | 23,314 |
|
Deferred revenue | | — |
| | — |
| | 8,460 |
| | 98,614 |
| | — |
| | 107,074 |
|
Accrued interest | | 1 |
| | 1 |
| | 2,054 |
| | 5,871 |
| | — |
| | 7,927 |
|
Accrued taxes | | 443 |
| | 6,668 |
| | — |
| | 27,487 |
| | (5,007 | ) | | 29,591 |
|
Accrued salaries, wages and benefits | | — |
| | 17,552 |
| | 1,234 |
| | — |
| | — |
| | 18,786 |
|
Self-insurance reserves | | — |
| | 10,214 |
| | 1,433 |
| | 12,374 |
| | — |
| | 24,021 |
|
Other accrued liabilities | | 3,318 |
| | 4,903 |
| | 136 |
| | 10,024 |
| | — |
| | 18,381 |
|
| | 569,234 |
| | 400,275 |
| | 15,747 |
| | 177,631 |
| | (928,168 | ) | | 234,719 |
|
Deferred Tax Liability | | — |
| | — |
| | 12,425 |
| | 87,516 |
| | (18,224 | ) | | 81,717 |
|
Derivative Liability | | 909 |
| | 5,796 |
| | — |
| | — |
| | — |
| | 6,705 |
|
Other Liabilities | | — |
| | 1,169 |
| | — |
| | 9,889 |
| | — |
| | 11,058 |
|
Long-Term Debt: | | | | | | | | | | | | |
Term debt | | — |
| | 126,525 |
| | — |
| | 592,982 |
| | — |
| | 719,507 |
|
Notes | | — |
| | — |
| | 446,241 |
| | 491,820 |
| | — |
| | 938,061 |
|
| | — |
| | 126,525 |
| | 446,241 |
| | 1,084,802 |
| | — |
| | 1,657,568 |
|
| | | | | | | | | | | | |
Equity | | 32,416 |
| | 670,110 |
| | 147,319 |
| | 1,447,659 |
| | (2,265,088 | ) | | 32,416 |
|
| | $ | 602,559 |
| | $ | 1,203,875 |
| | $ | 621,732 |
| | $ | 2,807,497 |
| | $ | (3,211,480 | ) | | $ | 2,024,183 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | 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 | | $ | — |
| | $ | — |
| | $ | 65,563 |
| | $ | 58,178 |
| | $ | (1,025 | ) | | $ | 122,716 |
|
Receivables | | — |
| | 1,409 |
| | 28,019 |
| | 576,975 |
| | (570,989 | ) | | 35,414 |
|
Inventories | | — |
| | — |
| | 1,371 |
| | 24,905 |
| | — |
| | 26,276 |
|
Other current assets | | 173 |
| | 796 |
| | 2,229 |
| | 9,833 |
| | (1,761 | ) | | 11,270 |
|
| | 173 |
| | 2,205 |
| | 97,182 |
| | 669,891 |
| | (573,775 | ) | | 195,676 |
|
Property and Equipment, net | | — |
| | 844 |
| | 175,358 |
| | 1,363,018 |
| | — |
| | 1,539,220 |
|
Investment in Park | | 798,076 |
| | 937,626 |
| | 200,075 |
| | 324,282 |
| | (2,260,059 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 59,381 |
| | 119,605 |
| | — |
| | 179,660 |
|
Other Intangibles, net | | — |
| | — |
| | 13,255 |
| | 24,582 |
| | — |
| | 37,837 |
|
Deferred Tax Asset | | — |
| | 33,303 |
| | — |
| | — |
| | (33,303 | ) | | — |
|
Other Assets | | — |
| | 2,000 |
| | 108 |
| | 18,680 |
| | — |
| | 20,788 |
|
| | $ | 798,923 |
| | $ | 975,978 |
| | $ | 545,359 |
| | $ | 2,520,058 |
| | $ | (2,867,137 | ) | | $ | 1,973,181 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 572 |
| | $ | 64 |
| | $ | 2,139 |
| | $ | — |
| | 2,775 |
|
Accounts payable | | 428,396 |
| | 145,258 |
| | 740 |
| | 18,471 |
| | (572,014 | ) | | 20,851 |
|
Deferred revenue | | — |
| | — |
| | 5,601 |
| | 77,164 |
| | — |
| | 82,765 |
|
Accrued interest | | 4,613 |
| | 3,207 |
| | 2,057 |
| | 109 |
| | — |
| | 9,986 |
|
Accrued taxes | | 405 |
| | 18,653 |
| | — |
| | 41,661 |
| | (1,761 | ) | | 58,958 |
|
Accrued salaries, wages and benefits | | — |
| | 29,227 |
| | 1,131 |
| | — |
| | — |
| | 30,358 |
|
Self-insurance reserves | | — |
| | 12,490 |
| | 1,321 |
| | 13,252 |
| |
|
| | 27,063 |
|
Other accrued liabilities | | 2,282 |
| | 3,018 |
| | 193 |
| | 4,434 |
| | — |
| | 9,927 |
|
| | 435,696 |
| | 212,425 |
| | 11,107 |
| | 157,230 |
| | (573,775 | ) | | 242,683 |
|
Deferred Tax Liability | | — |
| | — |
| | 12,838 |
| | 125,350 |
| | (33,303 | ) | | 104,885 |
|
Derivative Liability | | 10,633 |
| | 7,088 |
| | — |
| | — |
| | — |
| | 17,721 |
|
Other Liabilities | | — |
| | 1,236 |
| | — |
| | 11,926 |
| | — |
| | 13,162 |
|
Long-Term Debt: | | | | | | | | | | | | |
Term debt | | — |
| | 123,672 |
| | 13,598 |
| | 456,958 |
| | — |
| | 594,228 |
|
Notes | | 292,075 |
| | 203,140 |
| | 444,768 |
| | — |
| | — |
| | 939,983 |
|
| | 292,075 |
| | 326,812 |
| | 458,366 |
| | 456,958 |
| | — |
| | 1,534,211 |
|
| | | | | | | | | | | | |
Equity | | 60,519 |
| | 428,417 |
| | 63,048 |
| | 1,768,594 |
| | (2,260,059 | ) | | 60,519 |
|
| | $ | 798,923 |
| | $ | 975,978 |
| | $ | 545,359 |
| | $ | 2,520,058 |
| | $ | (2,867,137 | ) | | $ | 1,973,181 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
September 25, 201623, 2018
(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 | | $ | — |
| | $ | — |
| | $ | 77,878 |
| | $ | 116,511 |
| | $ | (3,633 | ) | | $ | 190,756 |
|
Receivables | | — |
| | 991 |
| | 47,193 |
| | 895,263 |
| | (885,049 | ) | | 58,398 |
|
Inventories | | — |
| | — |
| | 2,260 |
| | 34,289 |
| | — |
| | 36,549 |
|
Other current assets | | 293 |
| | 1,170 |
| | 3,594 |
| | 19,546 |
| | (2,728 | ) | | 21,875 |
|
| | 293 |
| | 2,161 |
| | 130,925 |
| | 1,065,609 |
| | (891,410 | ) | | 307,578 |
|
Property and Equipment, net | | — |
| | 811 |
| | 178,522 |
| | 1,409,366 |
| | — |
| | 1,588,699 |
|
Investment in Park | | 648,414 |
| | 1,205,086 |
| | 259,710 |
| | 246,968 |
| | (2,360,178 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 61,725 |
| | 119,605 |
| | — |
| | 182,004 |
|
Other Intangibles, net | | — |
| | — |
| | 13,763 |
| | 23,368 |
| | — |
| | 37,131 |
|
Deferred Tax Asset | | — |
| | 19,870 |
| | — |
| | — |
| | (19,870 | ) | | — |
|
Other Assets | | 1,197 |
| | 2,926 |
| | 39 |
| | 9,374 |
| | — |
| | 13,536 |
|
| | $ | 650,578 |
| | $ | 1,230,854 |
| | $ | 644,684 |
| | $ | 2,874,290 |
| | $ | (3,271,458 | ) | | $ | 2,128,948 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 656 |
| | $ | — |
| | $ | 3,094 |
| | $ | — |
| | $ | 3,750 |
|
Accounts payable | | 553,952 |
| | 334,696 |
| | 2,868 |
| | 30,155 |
| | (888,682 | ) | | 32,989 |
|
Deferred revenue | | — |
| | — |
| | 9,397 |
| | 92,929 |
| | — |
| | 102,326 |
|
Accrued interest | | 113 |
| | 75 |
| | 7,601 |
| | 14,104 |
| | — |
| | 21,893 |
|
Accrued taxes | | 1,551 |
| | 38,538 |
| | — |
| | 11,011 |
| | (2,728 | ) | | 48,372 |
|
Accrued salaries, wages and benefits | | — |
| | 28,162 |
| | 2,416 |
| | — |
| | — |
| | 30,578 |
|
Self-insurance reserves | | — |
| | 10,459 |
| | 1,635 |
| | 13,829 |
| | — |
| | 25,923 |
|
Other accrued liabilities | | 3,292 |
| | 6,796 |
| | 585 |
| | 11,559 |
| | — |
| | 22,232 |
|
| | 558,908 |
| | 419,382 |
| | 24,502 |
| | 176,681 |
| | (891,410 | ) | | 288,063 |
|
Deferred Tax Liability | | — |
| | — |
| | 12,562 |
| | 81,945 |
| | (19,870 | ) | | 74,637 |
|
Other Liabilities | | — |
| | 968 |
| | 390 |
| | 14,934 |
| | — |
| | 16,292 |
|
Long-Term Debt: | | | | | | | | | | | | |
Term debt | | — |
| | 126,800 |
| | — |
| | 594,046 |
| | — |
| | 720,846 |
|
Notes | | — |
| | — |
| | 445,846 |
| | 491,594 |
| | — |
| | 937,440 |
|
| | — |
| | 126,800 |
| | 445,846 |
| | 1,085,640 |
| | — |
| | 1,658,286 |
|
| | | | | | | | | | | | |
Equity | | 91,670 |
| | 683,704 |
| | 161,384 |
| | 1,515,090 |
| | (2,360,178 | ) | | 91,670 |
|
| | $ | 650,578 |
| | $ | 1,230,854 |
| | $ | 644,684 |
| | $ | 2,874,290 |
| | $ | (3,271,458 | ) | | $ | 2,128,948 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | 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 | | $ | — |
| | $ | — |
| | $ | 75,562 |
| | $ | 111,740 |
| | $ | — |
| | $ | 187,302 |
|
Receivables | | (5 | ) | | 1,387 |
| | 24,964 |
| | 585,190 |
| | (560,000 | ) | | 51,536 |
|
Inventories | | — |
| | — |
| | 1,519 |
| | 29,540 |
| | — |
| | 31,059 |
|
Other current assets | | 275 |
| | 24,479 |
| | 680 |
| | 12,800 |
| | (24,425 | ) | | 13,809 |
|
| | 270 |
| | 25,866 |
| | 102,725 |
| | 739,270 |
| | (584,425 | ) | | 283,706 |
|
Property and Equipment, net | | — |
| | 876 |
| | 179,172 |
| | 1,345,992 |
| | — |
| | 1,526,040 |
|
Investment in Park | | 820,465 |
| | 963,870 |
| | 197,538 |
| | 347,137 |
| | (2,329,010 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 95,180 |
| | 119,606 |
| | — |
| | 215,460 |
|
Other Intangibles, net | | — |
| | — |
| | 13,519 |
| | 22,911 |
| | — |
| | 36,430 |
|
Deferred Tax Asset | | — |
| | 3,651 |
| | — |
| | — |
| | (3,651 | ) | | — |
|
Other Assets | | — |
| | 1,999 |
| | 123 |
| | 19,351 |
| | — |
| | 21,473 |
|
| | $ | 821,409 |
| | $ | 996,262 |
| | $ | 588,257 |
| | $ | 2,594,267 |
| | $ | (2,917,086 | ) | | $ | 2,083,109 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 247 |
| | $ | 28 |
| | $ | 925 |
| | $ | — |
| | $ | 1,200 |
|
Accounts payable | | 399,384 |
| | 164,335 |
| | 1,342 |
| | 27,830 |
| | (560,000 | ) | | 32,891 |
|
Deferred revenue | | — |
| | — |
| | 5,091 |
| | 60,657 |
| | — |
| | 65,748 |
|
Accrued interest | | 875 |
| | 597 |
| | 7,784 |
| | 1,683 |
| | — |
| | 10,939 |
|
Accrued taxes | | 3,325 |
| | — |
| | 14,109 |
| | 76,907 |
| | (24,425 | ) | | 69,916 |
|
Accrued salaries, wages and benefits | | — |
| | 40,588 |
| | 2,156 |
| | — |
| | — |
| | 42,744 |
|
Self-insurance reserves | | — |
| | 12,394 |
| | 1,567 |
| | 12,859 |
| | — |
| | 26,820 |
|
Other accrued liabilities | | 2,358 |
| | 3,532 |
| | 510 |
| | 5,948 |
| | — |
| | 12,348 |
|
| | 405,942 |
| | 221,693 |
| | 32,587 |
| | 186,809 |
| | (584,425 | ) | | 262,606 |
|
Deferred Tax Liability | | — |
| | — |
| | 19,497 |
| | 121,866 |
| | (3,651 | ) | | 137,712 |
|
Derivative Liability | | 18,111 |
| | 12,074 |
| | — |
| | — |
| | — |
| | 30,185 |
|
Other Liabilities | | — |
| | 1,520 |
| | — |
| | 10,968 |
| | — |
| | 12,488 |
|
Long-Term Debt: | | | | | | | | | | | | |
Term debt | | — |
| | 123,996 |
| | 13,616 |
| | 457,641 |
| | — |
| | 595,253 |
|
Notes | | 291,909 |
| | 203,025 |
| | 444,484 |
| | — |
| | — |
| | 939,418 |
|
| | 291,909 |
| | 327,021 |
| | 458,100 |
| | 457,641 |
| | — |
| | 1,534,671 |
|
| | | | | | | | | | | | |
Equity | | 105,447 |
| | 433,954 |
| | 78,073 |
| | 1,816,983 |
| | (2,329,010 | ) | | 105,447 |
|
| | $ | 821,409 |
| | $ | 996,262 |
| | $ | 588,257 |
| | $ | 2,594,267 |
| | $ | (2,917,086 | ) | | $ | 2,083,109 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended September 24, 201729, 2019
(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 | | $ | 69,999 |
| | $ | 169,429 |
| | $ | 85,963 |
| | $ | 596,837 |
| | $ | (269,539 | ) | | $ | 652,689 |
| | $ | 73,704 |
| | $ | 198,065 |
| | $ | 86,566 |
| | $ | 659,928 |
| | $ | (303,751 | ) | | $ | 714,512 |
|
Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of food, merchandise, and games revenues | | — |
| | — |
| | 7,735 |
| | 44,912 |
| | — |
| | 52,647 |
| | — |
| | (51 | ) | | 7,263 |
| | 51,263 |
| | — |
| | 58,475 |
|
Operating expenses | | — |
| | 118,614 |
| | 19,627 |
| | 334,008 |
| | (269,539 | ) | | 202,710 |
| | — |
| | 135,330 |
| | 21,920 |
| | 374,126 |
| | (303,751 | ) | | 227,625 |
|
Selling, general and administrative | | 327 |
| | 21,752 |
| | 4,539 |
| | 45,045 |
| | — |
| | 71,663 |
| | 1,131 |
| | 25,002 |
| | 4,686 |
| | 52,261 |
| | — |
| | 83,080 |
|
Depreciation and amortization | | — |
| | 9 |
| | 7,856 |
| | 62,195 |
| | — |
| | 70,060 |
| | — |
| | 9 |
| | 7,121 |
| | 61,205 |
| | — |
| | 68,335 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | 87 |
| | 1,260 |
| | — |
| | 1,347 |
| |
Gain on sale of investment | | — |
| | (1,877 | ) | | — |
| | — |
| | — |
| | (1,877 | ) | |
(Gain) loss on impairment / retirement of fixed assets, net | | | — |
| | — |
| | (305 | ) | | 1,980 |
| | — |
| | 1,675 |
|
| | 327 |
| | 138,498 |
| | 39,844 |
| | 487,420 |
| | (269,539 | ) | | 396,550 |
| | 1,131 |
| | 160,290 |
| | 40,685 |
| | 540,835 |
| | (303,751 | ) | | 439,190 |
|
Operating income | | 69,672 |
| | 30,931 |
| | 46,119 |
| | 109,417 |
| | — |
| | 256,139 |
| | 72,573 |
| | 37,775 |
| | 45,881 |
| | 119,093 |
| | — |
| | 275,322 |
|
Interest expense, net | | 4,857 |
| | 4,305 |
| | 6,152 |
| | 5,973 |
| | — |
| | 21,287 |
| | 6,640 |
| | 5,313 |
| | 6,022 |
| | 9,185 |
| | — |
| | 27,160 |
|
Net effect of swaps | | (578 | ) | | (374 | ) | | — |
| | — |
| | — |
| | (952 | ) | | 20 |
| | 3,890 |
| | — |
| | — |
| | — |
| | 3,910 |
|
Gain on foreign currency | | — |
| | (27 | ) | | (29,166 | ) | | — |
| | — |
| | (29,193 | ) | |
Loss on foreign currency | | | — |
| | 13 |
| | 5,595 |
| | — |
| | — |
| | 5,608 |
|
Other (income) expense | | 62 |
| | (26,676 | ) | | 1,163 |
| | 25,386 |
| | — |
| | (65 | ) | | 63 |
| | (26,185 | ) | | 949 |
| | 25,047 |
| | — |
| | (126 | ) |
Income from investment in affiliates | | (132,699 | ) | | (98,522 | ) | | (16,843 | ) | | (58,378 | ) | | 306,442 |
| | — |
| | (129,774 | ) | | (98,037 | ) | | (22,574 | ) | | (48,597 | ) | | 298,982 |
| | — |
|
Income before taxes | | 198,030 |
| | 152,225 |
| | 84,813 |
| | 136,436 |
| | (306,442 | ) | | 265,062 |
| | 195,624 |
| | 152,781 |
| | 55,889 |
| | 133,458 |
| | (298,982 | ) | | 238,770 |
|
Provision for taxes | | 6,715 |
| | 19,526 |
| | 26,432 |
| | 21,074 |
| | — |
| | 73,747 |
| | 5,668 |
| | 23,005 |
| | 7,295 |
| | 12,847 |
| | — |
| | 48,815 |
|
Net income | | $ | 191,315 |
| | $ | 132,699 |
| | $ | 58,381 |
| | $ | 115,362 |
| | $ | (306,442 | ) | | $ | 191,315 |
| | $ | 189,956 |
| | $ | 129,776 |
| | $ | 48,594 |
| | $ | 120,611 |
| | $ | (298,982 | ) | | $ | 189,955 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustment | | (11,143 | ) | | — |
| | (11,143 | ) | | — |
| | 11,143 |
| | (11,143 | ) | | 2,554 |
| | — |
| | 2,554 |
| | — |
| | (2,554 | ) | | 2,554 |
|
Unrealized gain on cash flow hedging derivatives | | 1,994 |
| | 605 |
| | — |
| | — |
| | (605 | ) | | 1,994 |
| |
Other comprehensive income (loss), (net of tax) | | (9,149 | ) | | 605 |
| | (11,143 | ) | | — |
| | 10,538 |
| | (9,149 | ) | | 2,554 |
| | — |
| | 2,554 |
| | — |
| | (2,554 | ) | | 2,554 |
|
Total comprehensive income | | $ | 182,166 |
| | $ | 133,304 |
| | $ | 47,238 |
| | $ | 115,362 |
| | $ | (295,904 | ) | | $ | 182,166 |
| | $ | 192,510 |
| | $ | 129,776 |
| | $ | 51,148 |
| | $ | 120,611 |
| | $ | (301,536 | ) | | $ | 192,509 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended September 25, 201623, 2018
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | |
Net revenues | | $ | 92,371 |
| | $ | 172,703 |
| | $ | 77,164 |
| | $ | 606,823 |
| | $ | (298,778 | ) | | $ | 650,283 |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of food, merchandise, and games revenues | | — |
| | — |
| | 6,417 |
| | 45,640 |
| | — |
| | 52,057 |
|
Operating expenses | | (10 | ) | | 119,140 |
| | 17,885 |
| | 361,055 |
| | (298,778 | ) | | 199,292 |
|
Selling, general and administrative | | 610 |
| | 21,412 |
| | 4,413 |
| | 38,664 |
| | — |
| | 65,099 |
|
Depreciation and amortization | | — |
| | 9 |
| | 7,624 |
| | 57,052 |
| | — |
| | 64,685 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | 57 |
| | 1,298 |
| | — |
| | 1,355 |
|
| | 600 |
| | 140,561 |
| | 36,396 |
| | 503,709 |
| | (298,778 | ) | | 382,488 |
|
Operating income | | 91,771 |
| | 32,142 |
| | 40,768 |
| | 103,114 |
| | — |
| | 267,795 |
|
Interest expense, net | | 7,984 |
| | 5,759 |
| | 6,323 |
| | 833 |
| | — |
| | 20,899 |
|
Net effect of swaps | | 959 |
| | 691 |
| | — |
| | — |
| | — |
| | 1,650 |
|
Loss on foreign currency | | — |
| | — |
| | 7,337 |
| | 4 |
| | — |
| | 7,341 |
|
Other (income) expense | | 62 |
| | (29,663 | ) | | 1,302 |
| | 28,299 |
| | — |
| | — |
|
Income from investment in affiliates | | (98,451 | ) | | (62,240 | ) | | (12,574 | ) | | (28,737 | ) | | 202,002 |
| | — |
|
Income before taxes | | 181,217 |
| | 117,595 |
| | 38,380 |
| | 102,715 |
| | (202,002 | ) | | 237,905 |
|
Provision for taxes | | 6,230 |
| | 19,142 |
| | 9,643 |
| | 27,903 |
| | — |
| | 62,918 |
|
Net income | | $ | 174,987 |
| | $ | 98,453 |
| | $ | 28,737 |
| | $ | 74,812 |
| | $ | (202,002 | ) | | $ | 174,987 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | |
Foreign currency translation adjustment | | 1,397 |
| | — |
| | 1,397 |
| | — |
| | (1,397 | ) | | 1,397 |
|
Unrealized gain on cash flow hedging derivatives | | 1,994 |
| | 606 |
| | — |
| | — |
| | (606 | ) | | 1,994 |
|
Other comprehensive income (loss), (net of tax) | | 3,391 |
| | 606 |
| | 1,397 |
| | — |
| | (2,003 | ) | | 3,391 |
|
Total comprehensive income | | $ | 178,378 |
| | $ | 99,059 |
| | $ | 30,134 |
| | $ | 74,812 |
| | $ | (204,005 | ) | | $ | 178,378 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | |
Net revenues | | $ | 71,751 |
| | $ | 182,833 |
| | $ | 81,265 |
| | $ | 613,094 |
| | $ | (285,240 | ) | | $ | 663,703 |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of food, merchandise, and games revenues | | — |
| | — |
| | 7,020 |
| | 46,871 |
| | — |
| | 53,891 |
|
Operating expenses | | — |
| | 122,455 |
| | 20,145 |
| | 349,145 |
| | (285,240 | ) | | 206,505 |
|
Selling, general and administrative | | 185 |
| | 20,666 |
| | 4,582 |
| | 41,681 |
| | — |
| | 67,114 |
|
Depreciation and amortization | | — |
| | 8 |
| | 8,379 |
| | 65,987 |
| | — |
| | 74,374 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | — |
| | 3,247 |
| | — |
| | 3,247 |
|
| | 185 |
| | 143,129 |
| | 40,126 |
| | 506,931 |
| | (285,240 | ) | | 405,131 |
|
Operating income | | 71,566 |
| | 39,704 |
| | 41,139 |
| | 106,163 |
| | — |
| | 258,572 |
|
Interest expense, net | | 5,879 |
| | 4,072 |
| | 5,986 |
| | 4,997 |
| | — |
| | 20,934 |
|
Net effect of swaps | | 265 |
| | (1,482 | ) | | — |
| | — |
| | — |
| | (1,217 | ) |
(Gain) loss on foreign currency | | — |
| | 15 |
| | (13,069 | ) | | — |
| | — |
| | (13,054 | ) |
Other (income) expense | | 63 |
| | (28,849 | ) | | 1,484 |
| | 27,134 |
| | — |
| | (168 | ) |
Income from investment in affiliates | | (153,756 | ) | | (100,629 | ) | | (16,509 | ) | | (56,985 | ) | | 327,879 |
| | — |
|
Income before taxes | | 219,115 |
| | 166,577 |
| | 63,247 |
| | 131,017 |
| | (327,879 | ) | | 252,077 |
|
Provision for taxes | | 5,808 |
| | 12,823 |
| | 6,261 |
| | 13,878 |
| | — |
| | 38,770 |
|
Net income | | $ | 213,307 |
| | $ | 153,754 |
| | $ | 56,986 |
| | $ | 117,139 |
| | $ | (327,879 | ) | | $ | 213,307 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | |
Foreign currency translation adjustment | | (5,276 | ) | | — |
| | (5,276 | ) | | — |
| | 5,276 |
| | (5,276 | ) |
Cash flow hedging derivative activity | | 2,116 |
| | 728 |
| | — |
| | — |
| | (728 | ) | | 2,116 |
|
Other comprehensive income (loss), (net of tax) | | (3,160 | ) | | 728 |
| | (5,276 | ) | | — |
| | 4,548 |
| | (3,160 | ) |
Total comprehensive income | | $ | 210,147 |
| | $ | 154,482 |
| | $ | 51,710 |
| | $ | 117,139 |
| | $ | (323,331 | ) | | $ | 210,147 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended September 24, 201729, 2019
(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 | | $ | 92,672 |
| | $ | 262,739 |
| | $ | 114,141 |
| | $ | 1,019,399 |
| | $ | (395,146 | ) | | $ | 1,093,805 |
| | $ | 88,302 |
| | $ | 309,161 |
| | $ | 125,236 |
| | $ | 1,130,613 |
| | $ | (435,633 | ) | | $ | 1,217,679 |
|
Costs and expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of food, merchandise, and games revenues | | — |
| | — |
| | 10,569 |
| | 81,807 |
| | — |
| | 92,376 |
| | — |
| | — |
| | 11,189 |
| | 94,743 |
| | — |
| | 105,932 |
|
Operating expenses | | — |
| | 248,047 |
| | 37,701 |
| | 556,777 |
| | (395,146 | ) | | 447,379 |
| | 2 |
| | 285,675 |
| | 42,665 |
| | 610,892 |
| | (435,633 | ) | | 503,601 |
|
Selling, general and administrative | | 2,254 |
| | 51,358 |
| | 8,592 |
| | 88,938 |
| | — |
| | 151,142 |
| | 2,756 |
| | 55,554 |
| | 9,551 |
| | 106,666 |
| | — |
| | 174,527 |
|
Depreciation and amortization | | — |
| | 26 |
| | 12,869 |
| | 113,342 |
| | — |
| | 126,237 |
| | — |
| | 25 |
| | 12,803 |
| | 125,000 |
| | — |
| | 137,828 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | 542 |
| | 2,515 |
| | — |
| | 3,057 |
| |
(Gain) loss on impairment / retirement of fixed assets, net | | | — |
| | — |
| | (270 | ) | | 4,051 |
| | — |
| | 3,781 |
|
Gain on sale of investment | | — |
| | (1,877 | ) | | — |
| | — |
| | — |
| | (1,877 | ) | | — |
| | (617 | ) | | — |
| | — |
| | — |
| | (617 | ) |
| | 2,254 |
| | 297,554 |
| | 70,273 |
| | 843,379 |
| | (395,146 | ) | | 818,314 |
| | 2,758 |
| | 340,637 |
| | 75,938 |
| | 941,352 |
| | (435,633 | ) | | 925,052 |
|
Operating income (loss) | | 90,418 |
| | (34,815 | ) | | 43,868 |
| | 176,020 |
| | — |
| | 275,491 |
| | 85,544 |
| | (31,476 | ) | | 49,298 |
| | 189,261 |
| | — |
| | 292,627 |
|
Interest expense, net | | 18,285 |
| | 13,893 |
| | 18,317 |
| | 11,578 |
| | — |
| | 62,073 |
| | 19,704 |
| | 15,339 |
| | 17,780 |
| | 17,870 |
| | — |
| | 70,693 |
|
Net effect of swaps | | 2,162 |
| | 1,555 |
| | — |
| | — |
| | — |
| | 3,717 |
| | 3,137 |
| | 17,931 |
| | — |
| | — |
| | — |
| | 21,068 |
|
Loss on early debt extinguishment | | 11,773 |
| | 8,188 |
| | 198 |
| | 2,956 |
| | — |
| | 23,115 |
| |
Gain on foreign currency | | — |
| | (27 | ) | | (35,020 | ) | | — |
| | — |
| | (35,047 | ) | |
(Gain) loss on foreign currency | | | — |
| | 14 |
| | (12,547 | ) | | — |
| | — |
| | (12,533 | ) |
Other (income) expense | | 187 |
| | (56,623 | ) | | 2,640 |
| | 53,731 |
| | — |
| | (65 | ) | | 186 |
| | (62,156 | ) | | 2,974 |
| | 59,309 |
| | — |
| | 313 |
|
Income from investment in affiliates | | (108,835 | ) | | (109,414 | ) | | (24,389 | ) | | (58,648 | ) | | 301,286 |
| | — |
| | (116,919 | ) | | (128,489 | ) | | (29,372 | ) | | (65,974 | ) | | 340,754 |
| | — |
|
Income before taxes | | 166,846 |
| | 107,613 |
| | 82,122 |
| | 166,403 |
| | (301,286 | ) | | 221,698 |
| | 179,436 |
| | 125,885 |
| | 70,463 |
| | 178,056 |
| | (340,754 | ) | | 213,086 |
|
Provision (benefit) for taxes | | 8,917 |
| | (1,223 | ) | | 23,473 |
| | 32,602 |
| | — |
| | 63,769 |
| |
Provision for taxes | | | 9,855 |
| | 8,964 |
| | 4,492 |
| | 20,195 |
| | — |
| | 43,506 |
|
Net income | | $ | 157,929 |
| | $ | 108,836 |
| | $ | 58,649 |
| | $ | 133,801 |
| | $ | (301,286 | ) | | $ | 157,929 |
| | $ | 169,581 |
| | $ | 116,921 |
| | $ | 65,971 |
| | $ | 157,861 |
| | $ | (340,754 | ) | | $ | 169,580 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | | | | | | | | | | | |
Foreign currency translation adjustment | | (13,085 | ) | | — |
| | (13,085 | ) | | — |
| | 13,085 |
| | (13,085 | ) | | (5,128 | ) | | — |
| | (5,128 | ) | | — |
| | 5,128 |
| | (5,128 | ) |
Unrealized gain on cash flow hedging derivatives | | 5,981 |
| | 1,816 |
| | — |
| | — |
| | (1,816 | ) | | 5,981 |
| |
Other comprehensive income (loss), (net of tax) | | (7,104 | ) | | 1,816 |
| | (13,085 | ) | | — |
| | 11,269 |
| | (7,104 | ) | | (5,128 | ) | | — |
| | (5,128 | ) | | — |
| | 5,128 |
| | (5,128 | ) |
Total comprehensive income | | $ | 150,825 |
| | $ | 110,652 |
| | $ | 45,564 |
| | $ | 133,801 |
| | $ | (290,017 | ) | | $ | 150,825 |
| | $ | 164,453 |
| | $ | 116,921 |
| | $ | 60,843 |
| | $ | 157,861 |
| | $ | (335,626 | ) | | $ | 164,452 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended September 25, 201623, 2018
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | |
Net revenues | | $ | 84,921 |
| | $ | 275,214 |
| | $ | 111,184 |
| | $ | 1,023,713 |
| | $ | (396,286 | ) | | $ | 1,098,746 |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of food, merchandise, and games revenues | | — |
| | — |
| | 10,204 |
| | 84,708 |
| | — |
| | 94,912 |
|
Operating expenses | | — |
| | 258,162 |
| | 40,115 |
| | 560,759 |
| | (396,286 | ) | | 462,750 |
|
Selling, general and administrative | | 1,870 |
| | 50,754 |
| | 8,818 |
| | 88,395 |
| | — |
| | 149,837 |
|
Depreciation and amortization | | — |
| | 24 |
| | 14,319 |
| | 117,771 |
| | — |
| | 132,114 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | 67 |
| | 7,892 |
| | — |
| | 7,959 |
|
| | 1,870 |
| | 308,940 |
| | 73,523 |
| | 859,525 |
| | (396,286 | ) | | 847,572 |
|
Operating income (loss) | | 83,051 |
| | (33,726 | ) | | 37,661 |
| | 164,188 |
| | — |
| | 251,174 |
|
Interest expense, net | | 16,519 |
| | 13,031 |
| | 17,637 |
| | 14,565 |
| | — |
| | 61,752 |
|
Net effect of swaps | | (2,266 | ) | | (3,485 | ) | | — |
| | — |
| | — |
| | (5,751 | ) |
Loss on early debt extinguishment | | — |
| | 187 |
| | — |
| | 886 |
| | — |
| | 1,073 |
|
Loss on foreign currency | | — |
| | 36 |
| | 11,988 |
| | — |
| | — |
| | 12,024 |
|
Other (income) expense | | 186 |
| | (61,404 | ) | | 3,270 |
| | 57,573 |
| | — |
| | (375 | ) |
Income from investment in affiliates | | (89,426 | ) | | (74,345 | ) | | (21,578 | ) | | (22,798 | ) | | 208,147 |
| | — |
|
Income before taxes | | 158,038 |
| | 92,254 |
| | 26,344 |
| | 113,962 |
| | (208,147 | ) | | 182,451 |
|
Provision for taxes | | 8,888 |
| | 2,829 |
| | 3,545 |
| | 18,039 |
| | — |
| | 33,301 |
|
Net income | | $ | 149,150 |
| | $ | 89,425 |
| | $ | 22,799 |
| | $ | 95,923 |
| | $ | (208,147 | ) | | $ | 149,150 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | |
Foreign currency translation adjustment | | 5,990 |
| | — |
| | 5,990 |
| | — |
| | (5,990 | ) | | 5,990 |
|
Cash flow hedging derivative activity | | 6,250 |
| | 2,085 |
| | — |
| | — |
| | (2,085 | ) | | 6,250 |
|
Other comprehensive income (loss), (net of tax) | | 12,240 |
| | 2,085 |
| | 5,990 |
| | — |
| | (8,075 | ) | | 12,240 |
|
Total comprehensive income | | $ | 161,390 |
| | $ | 91,510 |
| | $ | 28,789 |
| | $ | 95,923 |
| | $ | (216,222 | ) | | $ | 161,390 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | |
Net revenues | | $ | 131,215 |
| | $ | 271,069 |
| | $ | 107,637 |
| | $ | 1,036,162 |
| | $ | (449,328 | ) | | $ | 1,096,755 |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of food, merchandise, and games revenues | | — |
| | — |
| | 9,389 |
| | 83,471 |
| | — |
| | 92,860 |
|
Operating expenses | | 2 |
| | 246,624 |
| | 36,249 |
| | 607,874 |
| | (449,328 | ) | | 441,421 |
|
Selling, general and administrative | | 2,264 |
| | 49,307 |
| | 8,757 |
| | 81,754 |
| | — |
| | 142,082 |
|
Depreciation and amortization | | — |
| | 27 |
| | 13,022 |
| | 105,126 |
| | — |
| | 118,175 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | 83 |
| | 5,299 |
| | — |
| | 5,382 |
|
| | 2,266 |
| | 295,958 |
| | 67,500 |
| | 883,524 |
| | (449,328 | ) | | 799,920 |
|
Operating income (loss) | | 128,949 |
| | (24,889 | ) | | 40,137 |
| | 152,638 |
| | — |
| | 296,835 |
|
Interest expense, net | | 23,776 |
| | 17,830 |
| | 18,672 |
| | 1,507 |
| | — |
| | 61,785 |
|
Net effect of swaps | | 5,617 |
| | 3,285 |
| | — |
| | — |
| | — |
| | 8,902 |
|
(Gain) loss on foreign currency | | — |
| | — |
| | (23,679 | ) | | 4 |
| | — |
| | (23,675 | ) |
Other (income) expense | | 187 |
| | (69,801 | ) | | 3,051 |
| | 66,563 |
| | — |
| | — |
|
Income from investment in affiliates | | (94,910 | ) | | (78,515 | ) | | (18,008 | ) | | (44,399 | ) | | 235,832 |
| | — |
|
Income before taxes | | 194,279 |
| | 102,312 |
| | 60,101 |
| | 128,963 |
| | (235,832 | ) | | 249,823 |
|
Provision for taxes | | 9,795 |
| | 7,403 |
| | 15,701 |
| | 32,440 |
| | — |
| | 65,339 |
|
Net income | | $ | 184,484 |
| | $ | 94,909 |
| | $ | 44,400 |
| | $ | 96,523 |
| | $ | (235,832 | ) | | $ | 184,484 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | |
Foreign currency translation adjustment | | (5,447 | ) | | — |
| | (5,447 | ) | | — |
| | 5,447 |
| | (5,447 | ) |
Unrealized gain on cash flow hedging derivatives | | 1,356 |
| | 455 |
| | — |
| | — |
| | (455 | ) | | 1,356 |
|
Other comprehensive income (loss), (net of tax) | | (4,091 | ) | | 455 |
| | (5,447 | ) | | — |
| | 4,992 |
| | (4,091 | ) |
Total comprehensive income | | $ | 180,393 |
| | $ | 95,364 |
| | $ | 38,953 |
| | $ | 96,523 |
| | $ | (230,840 | ) | | $ | 180,393 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 24, 201729, 2019
(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 | | $ | 61,966 |
| | $ | (3,954 | ) | | $ | 40,125 |
| | $ | 227,588 |
| | $ | (3,107 | ) | | $ | 322,618 |
| | $ | 93,000 |
| | $ | (82,026 | ) | | $ | 51,059 |
| | $ | 327,653 |
| | $ | (547 | ) | | $ | 389,139 |
|
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | |
Intercompany receivables (payments) receipts | | — |
| | — |
| | — |
| | (248,190 | ) | | 248,190 |
| | — |
| | — |
| | — |
| | — |
| | (114,269 | ) | | 114,269 |
| | — |
|
Proceeds from returns on investments | | 338,000 |
| | 15,500 |
| | — |
| | 146,500 |
| | (500,000 | ) | | — |
| | — |
| | 38,030 |
| | — |
| | — |
| | (38,030 | ) | | — |
|
Proceeds from sale of investment | | — |
| | 3,281 |
| | — |
| | — |
| | — |
| | 3,281 |
| | — |
| | 617 |
| | — |
| | — |
| | — |
| | 617 |
|
Purchase of identifiable intangible assets | | — |
| | — |
| | — |
| | (66 | ) | | — |
| | (66 | ) | |
Acquisitions, net of cash acquired | | | — |
| | — |
| | — |
| | (270,171 | ) | | — |
| | (270,171 | ) |
Capital expenditures | | — |
| | (25 | ) | | (5,679 | ) | | (146,669 | ) | | — |
| | (152,373 | ) | | — |
| | — |
| | (16,123 | ) | | (280,493 | ) | | — |
| | (296,616 | ) |
Net cash from (for) investing activities | | 338,000 |
| | 18,756 |
| | (5,679 | ) | | (248,425 | ) | | (251,810 | ) | | (149,158 | ) | | — |
| | 38,647 |
| | (16,123 | ) | | (664,933 | ) | | 76,239 |
| | (566,170 | ) |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | | | | | | | | | | | |
Intercompany payables (payments) receipts | | 50,003 |
| | 198,187 |
| | — |
| | — |
| | (248,190 | ) | | — |
| | 64,698 |
| | 49,571 |
| | — |
| | — |
| | (114,269 | ) | | — |
|
Payments for returns of capital | | — |
| | — |
| | — |
| | (500,000 | ) | | 500,000 |
| | — |
| | — |
| | — |
| | (38,030 | ) | | — |
| | 38,030 |
| | — |
|
Term debt borrowings | | — |
| | 131,000 |
| | — |
| | 619,000 |
| | — |
| | 750,000 |
| |
Note borrowings | | — |
| | — |
| | — |
| | 500,000 |
| | — |
| | 500,000 |
| | — |
| | — |
| | — |
| | 500,000 |
| | — |
| | 500,000 |
|
Term debt payments | | — |
| | (126,619 | ) | | (13,854 | ) | | (477,377 | ) | | — |
| | (617,850 | ) | | — |
| | (328 | ) | | — |
| | (1,547 | ) | | — |
| | (1,875 | ) |
Note payments, including amounts paid for early termination | | (304,014 | ) | | (211,444 | ) | | — |
| | — |
| | — |
| | (515,458 | ) | |
Distributions paid to partners | | (145,955 | ) | | — |
| | — |
| | — |
| | 1,438 |
| | (144,517 | ) | | (157,698 | ) | | — |
| | — |
| | — |
| | 653 |
| | (157,045 | ) |
Payment of debt issuance costs | | — |
| | (1,313 | ) | | — |
| | (18,371 | ) | | — |
| | (19,684 | ) | |
Payment of debt issuance costs and original issue discount | | | — |
| | — |
| | — |
| | (7,812 | ) | | — |
| | (7,812 | ) |
Tax effect of units involved in treasury unit transactions | | — |
| | (2,560 | ) | | — |
| | — |
| | — |
| | (2,560 | ) | | — |
| | (1,615 | ) | | — |
| | — |
| | — |
| | (1,615 | ) |
Payments related to tax withholding for equity compensation | | — |
| | (2,053 | ) | | — |
| | — |
| | — |
| | (2,053 | ) | | — |
| | (4,249 | ) | | — |
| | — |
| | — |
| | (4,249 | ) |
Net cash from (for) financing activities | | (399,966 | ) | | (14,802 | ) | | (13,854 | ) | | 123,252 |
| | 253,248 |
| | (52,122 | ) | | (93,000 | ) | | 43,379 |
| | (38,030 | ) | | 490,641 |
| | (75,586 | ) | | 327,404 |
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 5,892 |
| | — |
| | — |
| | 5,892 |
| | — |
| | — |
| | 2,394 |
| | — |
| | — |
| | 2,394 |
|
CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase for the period | | — |
| | — |
| | 26,484 |
| | 102,415 |
| | (1,669 | ) | | 127,230 |
| |
Net increase (decrease) for the period | | | — |
| | — |
| | (700 | ) | | 153,361 |
| | 106 |
| | 152,767 |
|
Balance, beginning of period | | — |
| | — |
| | 65,563 |
| | 58,178 |
| | (1,025 | ) | | 122,716 |
| | — |
| | — |
| | 73,326 |
| | 32,715 |
| | (692 | ) | | 105,349 |
|
Balance, end of period | | $ | — |
| | $ | — |
| | $ | 92,047 |
| | $ | 160,593 |
| | $ | (2,694 | ) | | $ | 249,946 |
| | $ | — |
| | $ | — |
| | $ | 72,626 |
| | $ | 186,076 |
| | $ | (586 | ) | | $ | 258,116 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 25, 201623, 2018
(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 | | $ | 95,426 |
| | $ | 13,190 |
| | $ | 41,319 |
| | $ | 188,005 |
| | $ | (3,506 | ) | | $ | 334,434 |
|
CASH FLOWS FOR INVESTING ACTIVITIES | | | | | | | | | | | | |
Intercompany receivables (payments) receipts | | — |
| | — |
| | (31,877 | ) | | (21,515 | ) | | 53,392 |
| | — |
|
Capital expenditures | | — |
| | — |
| | (16,355 | ) | | (129,361 | ) | | — |
| | (145,716 | ) |
Net cash for investing activities | | — |
| | — |
| | (48,232 | ) | | (150,876 | ) | | 53,392 |
| | (145,716 | ) |
CASH FLOWS FOR FINANCING ACTIVITIES | | | | | | | | | | | | |
Intercompany payables (payments) receipts | | 56,394 |
| | (3,002 | ) | | — |
| | — |
| | (53,392 | ) | | — |
|
Distributions paid to partners | | (151,820 | ) | | — |
| | — |
| | — |
| | 968 |
| | (150,852 | ) |
Payment of debt issuance costs and original issue discount | | — |
| | (321 | ) | | — |
| | (2,200 | ) | | — |
| | (2,521 | ) |
Exercise of limited partnership unit options | | — |
| | 125 |
| | — |
| | — |
| | — |
| | 125 |
|
Tax effect of units involved in treasury unit transactions | | — |
| | (3,049 | ) | | — |
| | — |
| | — |
| | (3,049 | ) |
Payments related to tax withholding for equity compensation | | — |
| | (6,943 | ) | | — |
| | — |
| | — |
| | (6,943 | ) |
Net cash for financing activities | | (95,426 | ) | | (13,190 | ) | | — |
| | (2,200 | ) | | (52,424 | ) | | (163,240 | ) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (967 | ) | | — |
| | — |
| | (967 | ) |
CASH AND CASH EQUIVALENTS | | | | | | | | | | | | |
Net increase (decrease) for the period | | — |
| | — |
| | (7,880 | ) | | 34,929 |
| | (2,538 | ) | | 24,511 |
|
Balance, beginning of period | | — |
| | — |
| | 85,758 |
| | 81,582 |
| | (1,095 | ) | | 166,245 |
|
Balance, end of period | | $ | — |
| | $ | — |
| | $ | 77,878 |
| | $ | 116,511 |
| | $ | (3,633 | ) | | $ | 190,756 |
|
(15) Consolidating Financial Information of Guarantors and Issuers of 2027 and 2029 Senior Notes:
Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), Magnum Management Corporation ("Magnum"), and Millennium Operations LLC ("Millennium") are the co-issuers of the 2027 and 2029 senior notes (see Note 7). 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, Magnum and Millennium) that guarantees the 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, Magnum, and Millennium, the co-issuers, and each 100% owned subsidiary of Cedar Fair (other than Cedar Canada, Magnum and Millennium), the guarantors (on a combined basis), as of September 29, 2019, December 31, 2018, and September 23, 2018 and for the three and nine month periods ended September 29, 2019 and September 23, 2018. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, the accompanying unaudited condensed consolidating financial statements have been included.
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
September 29, 2019
(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 | | $ | 99,232 |
| | $ | (54,042 | ) | | $ | 41,273 |
| | $ | 256,105 |
| | $ | (1,866 | ) | | $ | 340,702 |
|
CASH FLOWS FOR INVESTING ACTIVITIES | | | | | | | | | | | | |
Intercompany receivables (payments) receipts | | — |
| | — |
| | — |
| | (22,771 | ) | | 22,771 |
| | — |
|
Capital expenditures | | — |
| | — |
| | (6,451 | ) | | (120,413 | ) | | — |
| | (126,864 | ) |
Net cash for investing activities | | — |
| | — |
| | (6,451 | ) | | (143,184 | ) | | 22,771 |
| | (126,864 | ) |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | |
Term debt payments | | — |
| | (1,237 | ) | | (138 | ) | | (4,625 | ) | | — |
| | (6,000 | ) |
Distributions paid to partners | | (140,908 | ) | | — |
| | — |
| | — |
| | 1,866 |
| | (139,042 | ) |
Intercompany payables (payments) receipts | | (35,331 | ) | | 58,102 |
| | — |
| | — |
| | (22,771 | ) | | — |
|
Tax effect of units involved in treasury unit transactions | | — |
| | (1,903 | ) | | — |
| | — |
| | — |
| | (1,903 | ) |
Payments related to tax withholding for equity compensation | | — |
| | (920 | ) | | — |
| | — |
| | — |
| | (920 | ) |
Net cash from (for) financing activities | | (176,239 | ) | | 54,042 |
| | (138 | ) | | (4,625 | ) | | (20,905 | ) | | (147,865 | ) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 1,772 |
| | — |
| | — |
| | 1,772 |
|
CASH AND CASH EQUIVALENTS | | | | | | | | | | | | |
Net increase (decrease) for the period | | (77,007 | ) | | — |
| | 36,456 |
| | 108,296 |
| | — |
| | 67,745 |
|
Balance, beginning of period | | 77,007 |
| | — |
| | 39,106 |
| | 3,444 |
| | — |
| | 119,557 |
|
Balance, end of period | | $ | — |
| | $ | — |
| | $ | 75,562 |
| | $ | 111,740 |
| | $ | — |
| | $ | 187,302 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Co-Issuer Subsidiary (Millennium) | | Guarantor Subsidiaries | | Eliminations | | Total |
ASSETS | | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | — |
| | $ | — |
| | $ | 72,626 |
| | $ | 182,686 |
| | $ | 3,390 |
| | $ | (586 | ) | | $ | 258,116 |
|
Receivables | | — |
| | 1,013 |
| | 34,777 |
| | 47,338 |
| | 1,018,436 |
| | (1,032,810 | ) | | 68,754 |
|
Inventories | | — |
| | — |
| | 2,616 |
| | 29,410 |
| | 5,708 |
| | — |
| | 37,734 |
|
Other current assets | | 290 |
| | 585 |
| | 3,610 |
| | 14,617 |
| | 3,450 |
| | (2,356 | ) | | 20,196 |
|
| | 290 |
| | 1,598 |
| | 113,629 |
| | 274,051 |
| | 1,030,984 |
| | (1,035,752 | ) | | 384,800 |
|
Property and Equipment, net | | — |
| | 777 |
| | 180,417 |
| | — |
| | 1,651,137 |
| | — |
| | 1,832,331 |
|
Investment in Park | | 681,560 |
| | 1,373,024 |
| | 291,833 |
| | 2,119,748 |
| | 264,426 |
| | (4,730,591 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 60,178 |
| | 186,382 |
| | 111,217 |
| | — |
| | 358,451 |
|
Other Intangibles, net | | — |
| | — |
| | 13,415 |
| | — |
| | 46,278 |
| | — |
| | 59,693 |
|
Deferred Tax Asset | | — |
| | 18,224 |
| | — |
| | — |
| | — |
| | (18,224 | ) | | — |
|
Right-of-Use Asset | | — |
| | — |
| | 83 |
| | 10,557 |
| | 427 |
| | — |
| | 11,067 |
|
Other Assets | | — |
| | — |
| | 38 |
| | 2,648 |
| | 8,983 |
| | — |
| | 11,669 |
|
| | $ | 682,524 |
| | $ | 1,393,623 |
| | $ | 659,593 |
| | $ | 2,593,386 |
| | $ | 3,113,452 |
| | $ | (5,784,567 | ) | | $ | 2,658,011 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 1,313 |
| | $ | — |
| | $ | 6,187 |
| | $ | — |
| | $ | — |
| | $ | 7,500 |
|
Accounts payable | | 630,144 |
| | 406,621 |
| | 3,198 |
| | 20,844 |
| | 5,517 |
| | (1,033,396 | ) | | 32,928 |
|
Deferred revenue | | — |
| | — |
| | 12,344 |
| | 92,962 |
| | 24,959 |
| | — |
| | 130,265 |
|
Accrued interest | | 136 |
| | 91 |
| | 7,999 |
| | 21,955 |
| | — |
| | — |
| | 30,181 |
|
Accrued taxes | | 1,955 |
| | 217 |
| | — |
| | 11,358 |
| | 37,091 |
| | (2,356 | ) | | 48,265 |
|
Accrued salaries, wages and benefits | | — |
| | 35,923 |
| | 3,283 |
| | — |
| | — |
| | — |
| | 39,206 |
|
Self-insurance reserves | | — |
| | 9,837 |
| | 1,560 |
| | 10,833 |
| | 1,607 |
| | — |
| | 23,837 |
|
Other accrued liabilities | | 3,524 |
| | 4,276 |
| | 498 |
| | 6,971 |
| | 2,028 |
| | — |
| | 17,297 |
|
| | 635,759 |
| | 458,278 |
| | 28,882 |
| | 171,110 |
| | 71,202 |
| | (1,035,752 | ) | | 329,479 |
|
Deferred Tax Liability | | — |
| | — |
| | 13,366 |
| | — |
| | 87,516 |
| | (18,224 | ) | | 82,658 |
|
Derivative Liability | | 4,046 |
| | 23,727 |
| | — |
| | — |
| | — |
| | — |
| | 27,773 |
|
Lease Liability | | — |
| | — |
| | 68 |
| | 7,114 |
| | 258 |
| | — |
| | 7,440 |
|
Other Liabilities | | — |
| | 761 |
| | 477 |
| | 6,193 |
| | 11,535 |
| | — |
| | 18,966 |
|
Long-Term Debt: | | | | | | | | | | | | | | |
Term debt | | — |
| | 126,028 |
| | — |
| | 591,336 |
| | — |
| | — |
| | 717,364 |
|
Notes | | — |
| | — |
| | 446,665 |
| | 984,947 |
| | — |
| | — |
| | 1,431,612 |
|
| | — |
| | 126,028 |
| | 446,665 |
| | 1,576,283 |
| | — |
| | — |
| | 2,148,976 |
|
| | | | | | | | | | | | | | |
Equity | | 42,719 |
| | 784,829 |
| | 170,135 |
| | 832,686 |
| | 2,942,941 |
| | (4,730,591 | ) | | 42,719 |
|
| | $ | 682,524 |
| | $ | 1,393,623 |
| | $ | 659,593 |
| | $ | 2,593,386 |
| | $ | 3,113,452 |
| | $ | (5,784,567 | ) | | $ | 2,658,011 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2018
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Co-Issuer Subsidiary (Millennium) | | Guarantor Subsidiaries | | Eliminations | | Total |
ASSETS | | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | — |
| | $ | — |
| | $ | 73,326 |
| | $ | 30,663 |
| | $ | 2,052 |
| | $ | (692 | ) | | $ | 105,349 |
|
Receivables | | — |
| | 1,093 |
| | 34,497 |
| | 36,242 |
| | 902,155 |
| | (922,469 | ) | | 51,518 |
|
Inventories | | — |
| | — |
| | 2,135 |
| | 23,402 |
| | 5,216 |
| | — |
| | 30,753 |
|
Other current assets | | 179 |
| | 1,411 |
| | 5,462 |
| | 8,980 |
| | 1,564 |
| | (5,007 | ) | | 12,589 |
|
| | 179 |
| | 2,504 |
| | 115,420 |
| | 99,287 |
| | 910,987 |
| | (928,168 | ) | | 200,209 |
|
Property and Equipment, net | | — |
| | 802 |
| | 172,344 |
| | — |
| | 1,426,292 |
| | — |
| | 1,599,438 |
|
Investment in Park | | 601,706 |
| | 1,182,345 |
| | 262,462 |
| | 1,517,897 |
| | 218,574 |
| | (3,782,984 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 58,440 |
| | 8,388 |
| | 111,217 |
| | — |
| | 178,719 |
|
Other Intangibles, net | | — |
| | — |
| | 13,030 |
| | — |
| | 23,346 |
| | — |
| | 36,376 |
|
Deferred Tax Asset | | — |
| | 18,224 |
| | — |
| | — |
| | — |
| | (18,224 | ) | | — |
|
Other Assets | | — |
| | — |
| | 36 |
| | 417 |
| | 8,988 |
| | — |
| | 9,441 |
|
| | $ | 602,559 |
| | $ | 1,203,875 |
| | $ | 621,732 |
| | $ | 1,625,989 |
| | $ | 2,699,404 |
| | $ | (4,729,376 | ) | | $ | 2,024,183 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 984 |
| | $ | — |
| | $ | 4,641 |
| | $ | — |
| | $ | — |
| | $ | 5,625 |
|
Accounts payable | | 565,472 |
| | 359,953 |
| | 2,430 |
| | 14,995 |
| | 3,625 |
| | (923,161 | ) | | 23,314 |
|
Deferred revenue | | — |
| | — |
| | 8,460 |
| | 74,062 |
| | 24,552 |
| | — |
| | 107,074 |
|
Accrued interest | | 1 |
| | 1 |
| | 2,054 |
| | 5,871 |
| | — |
| | — |
| | 7,927 |
|
Accrued taxes | | 443 |
| | 6,668 |
| | — |
| | 8,087 |
| | 19,400 |
| | (5,007 | ) | | 29,591 |
|
Accrued salaries, wages and benefits | | — |
| | 17,552 |
| | 1,234 |
| | — |
| | — |
| | — |
| | 18,786 |
|
Self-insurance reserves | | — |
| | 10,214 |
| | 1,433 |
| | 10,308 |
| | 2,066 |
| | — |
| | 24,021 |
|
Other accrued liabilities | | 3,318 |
| | 4,903 |
| | 136 |
| | 5,471 |
| | 4,553 |
| | — |
| | 18,381 |
|
| | 569,234 |
| | 400,275 |
| | 15,747 |
| | 123,435 |
| | 54,196 |
| | (928,168 | ) | | 234,719 |
|
Deferred Tax Liability | | — |
| | — |
| | 12,425 |
| | — |
| | 87,516 |
| | (18,224 | ) | | 81,717 |
|
Derivative Liability | | 909 |
| | 5,796 |
| | — |
| | — |
| | — |
| | — |
| | 6,705 |
|
Other Liabilities | | — |
| | 1,169 |
| | — |
| | 87 |
| | 9,802 |
| | — |
| | 11,058 |
|
Long-Term Debt: | | | | | | | | | | | | | | |
Term debt | | — |
| | 126,525 |
| | — |
| | 592,982 |
| | — |
| | — |
| | 719,507 |
|
Notes | | — |
| | — |
| | 446,241 |
| | 491,820 |
| | — |
| | — |
| | 938,061 |
|
| | — |
| | 126,525 |
| | 446,241 |
| | 1,084,802 |
| | — |
| | — |
| | 1,657,568 |
|
| | | | | | | | | | | | | | |
Equity | | 32,416 |
| | 670,110 |
| | 147,319 |
| | 417,665 |
| | 2,547,890 |
| | (3,782,984 | ) | | 32,416 |
|
| | $ | 602,559 |
| | $ | 1,203,875 |
| | $ | 621,732 |
| | $ | 1,625,989 |
| | $ | 2,699,404 |
| | $ | (4,729,376 | ) | | $ | 2,024,183 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
September 23, 2018
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Co-Issuer Subsidiary (Millennium) | | Guarantor Subsidiaries | | Eliminations | | Total |
ASSETS | | | | | | | | | | | | | | |
Current Assets: | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | — |
| | $ | — |
| | $ | 77,878 |
| | $ | 115,323 |
| | $ | 1,188 |
| | $ | (3,633 | ) | | $ | 190,756 |
|
Receivables | | — |
| | 991 |
| | 47,193 |
| | 36,711 |
| | 858,552 |
| | (885,049 | ) | | 58,398 |
|
Inventories | | — |
| | — |
| | 2,260 |
| | 28,205 |
| | 6,084 |
| | — |
| | 36,549 |
|
Other current assets | | 293 |
| | 1,170 |
| | 3,594 |
| | 15,871 |
| | 3,675 |
| | (2,728 | ) | | 21,875 |
|
| | 293 |
| | 2,161 |
| | 130,925 |
| | 196,110 |
| | 869,499 |
| | (891,410 | ) | | 307,578 |
|
Property and Equipment, net | | — |
| | 811 |
| | 178,522 |
| | — |
| | 1,409,366 |
| | — |
| | 1,588,699 |
|
Investment in Park | | 648,414 |
| | 1,205,086 |
| | 259,710 |
| | 1,490,666 |
| | 246,968 |
| | (3,850,844 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 61,725 |
| | 8,388 |
| | 111,217 |
| | — |
| | 182,004 |
|
Other Intangibles, net | | — |
| | — |
| | 13,763 |
| | — |
| | 23,368 |
| | — |
| | 37,131 |
|
Deferred Tax Asset | | — |
| | 19,870 |
| | — |
| | — |
| | — |
| | (19,870 | ) | | — |
|
Other Assets | | 1,197 |
| | 2,926 |
| | 39 |
| | 312 |
| | 9,062 |
| | — |
| | 13,536 |
|
| | $ | 650,578 |
| | $ | 1,230,854 |
| | $ | 644,684 |
| | $ | 1,695,476 |
| | $ | 2,669,480 |
| | $ | (4,762,124 | ) | | $ | 2,128,948 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 656 |
| | $ | — |
| | $ | 3,094 |
| | $ | — |
| | $ | — |
| | $ | 3,750 |
|
Accounts payable | | 553,952 |
| | 334,696 |
| | 2,868 |
| | 23,330 |
| | 6,825 |
| | (888,682 | ) | | 32,989 |
|
Deferred revenue | | — |
| | — |
| | 9,397 |
| | 66,342 |
| | 26,587 |
| | — |
| | 102,326 |
|
Accrued interest | | 113 |
| | 75 |
| | 7,601 |
| | 14,104 |
| | — |
| | — |
| | 21,893 |
|
Accrued taxes | | 1,551 |
| | 38,538 |
| | — |
| | 9,569 |
| | 1,442 |
| | (2,728 | ) | | 48,372 |
|
Accrued salaries, wages and benefits | | — |
| | 28,162 |
| | 2,416 |
| | — |
| | — |
| | — |
| | 30,578 |
|
Self-insurance reserves | | — |
| | 10,459 |
| | 1,635 |
| | 11,856 |
| | 1,973 |
| | — |
| | 25,923 |
|
Other accrued liabilities | | 3,292 |
| | 6,796 |
| | 585 |
| | 6,937 |
| | 4,622 |
| | — |
| | 22,232 |
|
| | 558,908 |
| | 419,382 |
| | 24,502 |
| | 135,232 |
| | 41,449 |
| | (891,410 | ) | | 288,063 |
|
Deferred Tax Liability | | — |
| | — |
| | 12,562 |
| | — |
| | 81,945 |
| | (19,870 | ) | | 74,637 |
|
Other Liabilities | | — |
| | 968 |
| | 390 |
| | 3,304 |
| | 11,630 |
| | — |
| | 16,292 |
|
Long-Term Debt: | | | | | | | | | | | | | | |
Term debt | | — |
| | 126,800 |
| | — |
| | 594,046 |
| | — |
| | — |
| | 720,846 |
|
Notes | | — |
| | — |
| | 445,846 |
| | 491,594 |
| | — |
| | — |
| | 937,440 |
|
| | — |
| | 126,800 |
| | 445,846 |
| | 1,085,640 |
| | — |
| | — |
| | 1,658,286 |
|
| | | | | | | | | | | | | | |
Equity | | 91,670 |
| | 683,704 |
| | 161,384 |
| | 471,300 |
| | 2,534,456 |
| | (3,850,844 | ) | | 91,670 |
|
| | $ | 650,578 |
| | $ | 1,230,854 |
| | $ | 644,684 |
| | $ | 1,695,476 |
| | $ | 2,669,480 |
| | $ | (4,762,124 | ) | | $ | 2,128,948 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended September 29, 2019
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Co-Issuer Subsidiary (Millennium) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | | | |
Net revenues | | $ | 73,704 |
| | $ | 198,065 |
| | $ | 86,566 |
| | $ | 522,712 |
| | $ | 187,734 |
| | $ | (354,269 | ) | | $ | 714,512 |
|
Costs and expenses: | | | | | | | | | | | | | | |
Cost of food, merchandise and games revenues | | — |
| | (51 | ) | | 7,263 |
| | 42,719 |
| | 8,544 |
| | — |
| | 58,475 |
|
Operating expenses | | — |
| | 135,330 |
| | 21,920 |
| | 414,642 |
| | 10,002 |
| | (354,269 | ) | | 227,625 |
|
Selling, general and administrative | | 1,131 |
| | 25,002 |
| | 4,686 |
| | 45,217 |
| | 7,044 |
| | — |
| | 83,080 |
|
Depreciation and amortization | | — |
| | 9 |
| | 7,121 |
| | 13 |
| | 61,192 |
| | — |
| | 68,335 |
|
(Gain) loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | (305 | ) | | 367 |
| | 1,613 |
| | — |
| | 1,675 |
|
| | 1,131 |
| | 160,290 |
| | 40,685 |
| | 502,958 |
| | 88,395 |
| | (354,269 | ) | | 439,190 |
|
Operating income | | 72,573 |
| | 37,775 |
| | 45,881 |
| | 19,754 |
| | 99,339 |
| | — |
| | 275,322 |
|
Interest (income) expense, net | | 6,640 |
| | 5,313 |
| | 6,022 |
| | 19,292 |
| | (10,107 | ) | | — |
| | 27,160 |
|
Net effect of swaps | | 20 |
| | 3,890 |
| | — |
| | — |
| | — |
| | — |
| | 3,910 |
|
Loss on foreign currency | | — |
| | 13 |
| | 5,595 |
| | — |
| | — |
| | — |
| | 5,608 |
|
Other (income) expense | | 63 |
| | (26,185 | ) | | 949 |
| | — |
| | 25,047 |
| | — |
| | (126 | ) |
Income from investment in affiliates | | (129,774 | ) | | (98,037 | ) | | (22,574 | ) | | — |
| | (48,597 | ) | | 298,982 |
| | — |
|
Income before taxes | | 195,624 |
| | 152,781 |
| | 55,889 |
| | 462 |
| | 132,996 |
| | (298,982 | ) | | 238,770 |
|
Provision for taxes | | 5,668 |
| | 23,005 |
| | 7,295 |
| | 462 |
| | 12,385 |
| | — |
| | 48,815 |
|
Net income | | $ | 189,956 |
| | $ | 129,776 |
| | $ | 48,594 |
| | $ | — |
| | $ | 120,611 |
| | $ | (298,982 | ) | | $ | 189,955 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | |
Foreign currency translation adjustment | | 2,554 |
| | — |
| | 2,554 |
| | — |
| | — |
| | (2,554 | ) | | 2,554 |
|
Other comprehensive income (loss), (net of tax) | | 2,554 |
| | — |
| | 2,554 |
| | — |
| | — |
| | (2,554 | ) | | 2,554 |
|
Total comprehensive income | | $ | 192,510 |
| | $ | 129,776 |
| | $ | 51,148 |
| | $ | — |
| | $ | 120,611 |
| | $ | (301,536 | ) | | $ | 192,509 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended September 23, 2018
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Co-Issuer Subsidiary (Millennium) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | | | |
Net revenues | | $ | 71,751 |
| | $ | 182,833 |
| | $ | 81,265 |
| | $ | 474,711 |
| | $ | 189,672 |
| | $ | (336,529 | ) | | $ | 663,703 |
|
Costs and expenses: | | | | | | | | | | | | | | |
Cost of food, merchandise and games revenues | | — |
| | — |
| | 7,020 |
| | 38,134 |
| | 8,737 |
| | — |
| | 53,891 |
|
Operating expenses | | — |
| | 122,455 |
| | 20,145 |
| | 388,158 |
| | 12,276 |
| | (336,529 | ) | | 206,505 |
|
Selling, general and administrative | | 185 |
| | 20,666 |
| | 4,582 |
| | 34,578 |
| | 7,103 |
| | — |
| | 67,114 |
|
Depreciation and amortization | | — |
| | 8 |
| | 8,379 |
| | — |
| | 65,987 |
| | — |
| | 74,374 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | — |
| | 422 |
| | 2,825 |
| | — |
| | 3,247 |
|
| | 185 |
| | 143,129 |
| | 40,126 |
| | 461,292 |
| | 96,928 |
| | (336,529 | ) | | 405,131 |
|
Operating income | | 71,566 |
| | 39,704 |
| | 41,139 |
| | 13,419 |
| | 92,744 |
| | — |
| | 258,572 |
|
Interest (income) expense, net | | 5,879 |
| | 4,072 |
| | 5,986 |
| | 12,940 |
| | (7,943 | ) | | — |
| | 20,934 |
|
Net effect of swaps | | 265 |
| | (1,482 | ) | | — |
| | — |
| | — |
| | — |
| | (1,217 | ) |
(Gain) loss on foreign currency | | — |
| | 15 |
| | (13,069 | ) | | — |
| | — |
| | — |
| | (13,054 | ) |
Other (income) expense | | 63 |
| | (28,849 | ) | | 1,484 |
| | — |
| | 27,134 |
| | — |
| | (168 | ) |
Income from investment in affiliates | | (153,756 | ) | | (100,629 | ) | | (16,509 | ) | | — |
| | (56,985 | ) | | 327,879 |
| | — |
|
Income before taxes | | 219,115 |
| | 166,577 |
| | 63,247 |
| | 479 |
| | 130,538 |
| | (327,879 | ) | | 252,077 |
|
Provision for taxes | | 5,808 |
| | 12,823 |
| | 6,261 |
| | 479 |
| | 13,399 |
| | — |
| | 38,770 |
|
Net income | | $ | 213,307 |
| | $ | 153,754 |
| | $ | 56,986 |
| | $ | — |
| | $ | 117,139 |
| | $ | (327,879 | ) | | $ | 213,307 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | |
Foreign currency translation adjustment | | (5,276 | ) | | — |
| | (5,276 | ) | | — |
| | — |
| | 5,276 |
| | (5,276 | ) |
Cash flow hedging derivative activity | | 2,116 |
| | 728 |
| | — |
| | — |
| | — |
| | (728 | ) | | 2,116 |
|
Other comprehensive income (loss), (net of tax) | | (3,160 | ) | | 728 |
| | (5,276 | ) | | — |
| | — |
| | 4,548 |
| | (3,160 | ) |
Total comprehensive income | | $ | 210,147 |
| | $ | 154,482 |
| | $ | 51,710 |
| | $ | — |
| | $ | 117,139 |
| | $ | (323,331 | ) | | $ | 210,147 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended September 29, 2019
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Co-Issuer Subsidiary (Millennium) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | | | |
Net revenues | | $ | 88,302 |
| | $ | 309,161 |
| | $ | 125,236 |
| | $ | 903,497 |
| | $ | 328,962 |
| | $ | (537,479 | ) | | $ | 1,217,679 |
|
Costs and expenses: | | | | | | | | | | | | | | |
Cost of food, merchandise and games revenues | | — |
| | — |
| | 11,189 |
| | 79,049 |
| | 15,694 |
| | — |
| | 105,932 |
|
Operating expenses | | 2 |
| | 285,675 |
| | 42,665 |
| | 682,759 |
| | 29,979 |
| | (537,479 | ) | | 503,601 |
|
Selling, general and administrative | | 2,756 |
| | 55,554 |
| | 9,551 |
| | 91,278 |
| | 15,388 |
| | — |
| | 174,527 |
|
Depreciation and amortization | | — |
| | 25 |
| | 12,803 |
| | 13 |
| | 124,987 |
| | — |
| | 137,828 |
|
(Gain) loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | (270 | ) | | 1,160 |
| | 2,891 |
| | — |
| | 3,781 |
|
Gain on sale of investment | | — |
| | (617 | ) | | — |
| | — |
| | — |
| | — |
| | (617 | ) |
| | 2,758 |
| | 340,637 |
| | 75,938 |
| | 854,259 |
| | 188,939 |
| | (537,479 | ) | | 925,052 |
|
Operating income (loss) | | 85,544 |
| | (31,476 | ) | | 49,298 |
| | 49,238 |
| | 140,023 |
| | — |
| | 292,627 |
|
Interest (income) expense, net | | 19,704 |
| | 15,339 |
| | 17,780 |
| | 47,841 |
| | (29,971 | ) | | — |
| | 70,693 |
|
Net effect of swaps | | 3,137 |
| | 17,931 |
| | — |
| | — |
| | — |
| | — |
| | 21,068 |
|
(Gain) loss on foreign currency | | — |
| | 14 |
| | (12,547 | ) | | — |
| | — |
| | — |
| | (12,533 | ) |
Other (income) expense | | 186 |
| | (62,156 | ) | | 2,974 |
| | — |
| | 59,309 |
| | — |
| | 313 |
|
Income from investment in affiliates | | (116,919 | ) | | (128,489 | ) | | (29,372 | ) | | — |
| | (65,974 | ) | | 340,754 |
| | — |
|
Income before taxes | | 179,436 |
| | 125,885 |
| | 70,463 |
| | 1,397 |
| | 176,659 |
| | (340,754 | ) | | 213,086 |
|
Provision for taxes | | 9,855 |
| | 8,964 |
| | 4,492 |
| | 1,397 |
| | 18,798 |
| | — |
| | 43,506 |
|
Net income | | $ | 169,581 |
| | $ | 116,921 |
| | $ | 65,971 |
| | $ | — |
| | $ | 157,861 |
| | $ | (340,754 | ) | | $ | 169,580 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | |
Foreign currency translation adjustment | | (5,128 | ) | | — |
| | (5,128 | ) | | — |
| | — |
| | 5,128 |
| | (5,128 | ) |
Other comprehensive income (loss), (net of tax) | | (5,128 | ) | | — |
| | (5,128 | ) | | — |
| | — |
| | 5,128 |
| | (5,128 | ) |
Total comprehensive income | | $ | 164,453 |
| | $ | 116,921 |
| | $ | 60,843 |
| | $ | — |
| | $ | 157,861 |
| | $ | (335,626 | ) | | $ | 164,452 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended September 23, 2018
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Co-Issuer Subsidiary (Millennium) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | | | |
Net revenues | | $ | 84,921 |
| | $ | 275,214 |
| | $ | 111,184 |
| | $ | 807,575 |
| | $ | 310,159 |
| | $ | (490,307 | ) | | $ | 1,098,746 |
|
Costs and expenses: | | | | | | | | | | | | | | |
Cost of food, merchandise and games revenues | | — |
| | — |
| | 10,204 |
| | 69,628 |
| | 15,080 |
| | — |
| | 94,912 |
|
Operating expenses | | — |
| | 258,162 |
| | 40,115 |
| | 622,643 |
| | 32,137 |
| | (490,307 | ) | | 462,750 |
|
Selling, general and administrative | | 1,870 |
| | 50,754 |
| | 8,818 |
| | 73,572 |
| | 14,823 |
| | — |
| | 149,837 |
|
Depreciation and amortization | | — |
| | 24 |
| | 14,319 |
| | — |
| | 117,771 |
| | — |
| | 132,114 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | 67 |
| | 1,868 |
| | 6,024 |
| | — |
| | 7,959 |
|
| | 1,870 |
| | 308,940 |
| | 73,523 |
| | 767,711 |
| | 185,835 |
| | (490,307 | ) | | 847,572 |
|
Operating income (loss) | | 83,051 |
| | (33,726 | ) | | 37,661 |
| | 39,864 |
| | 124,324 |
| | — |
| | 251,174 |
|
Interest (income) expense, net | | 16,519 |
| | 13,031 |
| | 17,637 |
| | 37,539 |
| | (22,974 | ) | | — |
| | 61,752 |
|
Net effect of swaps | | (2,266 | ) | | (3,485 | ) | | — |
| | — |
| | — |
| | — |
| | (5,751 | ) |
Loss on early debt extinguishment | | — |
| | 187 |
| | — |
| | 886 |
| | — |
| | — |
| | 1,073 |
|
Loss on foreign currency | | — |
| | 36 |
| | 11,988 |
| | — |
| | — |
| | — |
| | 12,024 |
|
Other (income) expense | | 186 |
| | (61,404 | ) | | 3,270 |
| | — |
| | 57,573 |
| | — |
| | (375 | ) |
Income from investment in affiliates | | (89,426 | ) | | (74,345 | ) | | (21,578 | ) | | — |
| | (22,798 | ) | | 208,147 |
| | — |
|
Income before taxes | | 158,038 |
| | 92,254 |
| | 26,344 |
| | 1,439 |
| | 112,523 |
| | (208,147 | ) | | 182,451 |
|
Provision for taxes | | 8,888 |
| | 2,829 |
| | 3,545 |
| | 1,439 |
| | 16,600 |
| | — |
| | 33,301 |
|
Net income | | $ | 149,150 |
| | $ | 89,425 |
| | $ | 22,799 |
| | $ | — |
| | $ | 95,923 |
| | $ | (208,147 | ) | | $ | 149,150 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | | | |
Foreign currency translation adjustment | | 5,990 |
| | — |
| | 5,990 |
| | — |
| | — |
| | (5,990 | ) | | 5,990 |
|
Cash flow hedging derivative activity | | 6,250 |
| | 2,085 |
| | — |
| | — |
| | — |
| | (2,085 | ) | | 6,250 |
|
Other comprehensive income (loss), (net of tax) | | 12,240 |
| | 2,085 |
| | 5,990 |
| | — |
| | — |
| | (8,075 | ) | | 12,240 |
|
Total comprehensive income | | $ | 161,390 |
| | $ | 91,510 |
| | $ | 28,789 |
| | $ | — |
| | $ | 95,923 |
| | $ | (216,222 | ) | | $ | 161,390 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 29, 2019
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Co-Issuer Subsidiary (Millennium) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | | | |
NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 93,000 |
| | $ | (82,026 | ) | | $ | 51,059 |
| | $ | 182,457 |
| | $ | 145,196 |
| | $ | (547 | ) | | $ | 389,139 |
|
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | | | |
Intercompany receivables (payments) receipts | | — |
| | — |
| | — |
| | — |
| | (114,269 | ) | | 114,269 |
| | — |
|
Proceeds from returns on investments | | — |
| | 38,030 |
| | — |
| | — |
| | — |
| | (38,030 | ) | | — |
|
Proceeds from sale of investment | | — |
| | 617 |
| | — |
| | — |
| | — |
| | — |
| | 617 |
|
Acquisitions, net of cash acquired | | — |
| | — |
| | — |
| | (270,171 | ) | | — |
| | — |
| | (270,171 | ) |
Capital expenditures | | — |
| | — |
| | (16,123 | ) | | (250,904 | ) | | (29,589 | ) | | — |
| | (296,616 | ) |
Net cash from (for) investing activities | | — |
| | 38,647 |
| | (16,123 | ) | | (521,075 | ) | | (143,858 | ) | | 76,239 |
| | (566,170 | ) |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | | | |
Intercompany payables (payments) receipts | | 64,698 |
| | 49,571 |
| | — |
| | — |
| | — |
| | (114,269 | ) | | — |
|
Payments for returns of capital | | — |
| | — |
| | (38,030 | ) | | — |
| | — |
| | 38,030 |
| | — |
|
Note borrowings | | — |
| | — |
| | — |
| | 500,000 |
| | — |
| | — |
| | 500,000 |
|
Term debt payments | | — |
| | (328 | ) | | — |
| | (1,547 | ) | | — |
| | — |
| | (1,875 | ) |
Distributions paid to partners | | (157,698 | ) | | — |
| | — |
| | — |
| | — |
| | 653 |
| | (157,045 | ) |
Payment of debt issuance costs and original issue discount | | — |
| | — |
| | — |
| | (7,812 | ) | | — |
| | — |
| | (7,812 | ) |
Tax effect of units involved in treasury unit transactions | | — |
| | (1,615 | ) | | — |
| | — |
| | — |
| | — |
| | (1,615 | ) |
Payments related to tax withholding for equity compensation | | — |
| | (4,249 | ) | | — |
| | — |
| | — |
| | — |
| | (4,249 | ) |
Net cash from (for) financing activities | | (93,000 | ) | | 43,379 |
| | (38,030 | ) | | 490,641 |
| | — |
| | (75,586 | ) | | 327,404 |
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 2,394 |
| | — |
| | — |
| | — |
| | 2,394 |
|
CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | |
Net increase (decrease) for the period | | — |
| | — |
| | (700 | ) | | 152,023 |
| | 1,338 |
| | 106 |
| | 152,767 |
|
Balance, beginning of period | | — |
| | — |
| | 73,326 |
| | 30,663 |
| | 2,052 |
| | (692 | ) | | 105,349 |
|
Balance, end of period | | $ | — |
| | $ | — |
| | $ | 72,626 |
| | $ | 182,686 |
| | $ | 3,390 |
| | $ | (586 | ) | | $ | 258,116 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 23, 2018
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Co-Issuer Subsidiary (Millennium) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | | | |
NET CASH FROM OPERATING ACTIVITIES | | $ | 95,426 |
| | $ | 13,190 |
| | $ | 41,319 |
| | $ | 136,066 |
| | $ | 51,939 |
| | $ | (3,506 | ) | | $ | 334,434 |
|
CASH FLOWS FOR INVESTING ACTIVITIES | | | | | | | | | | | | | | |
Intercompany receivables (payments) receipts | | — |
| | — |
| | (31,877 | ) | | — |
| | (21,515 | ) | | 53,392 |
| | — |
|
Capital expenditures | | — |
| | — |
| | (16,355 | ) | | (98,973 | ) | | (30,388 | ) | | — |
| | (145,716 | ) |
Net cash for investing activities | | — |
| | — |
| | (48,232 | ) | | (98,973 | ) | | (51,903 | ) | | 53,392 |
| | (145,716 | ) |
CASH FLOWS FOR FINANCING ACTIVITIES | | | | | | | | | | | | | | |
Intercompany payables (payments) receipts | | 56,394 |
| | (3,002 | ) | | — |
| | — |
| | — |
| | (53,392 | ) | | — |
|
Distributions paid to partners | | (151,820 | ) | | — |
| | — |
| | — |
| | — |
| | 968 |
| | (150,852 | ) |
Payment of debt issuance costs and original issue discount | | — |
| | (321 | ) | | — |
| | (2,200 | ) | | — |
| | — |
| | (2,521 | ) |
Exercise of limited partnership unit options | | — |
| | 125 |
| | — |
| | — |
| | — |
| | — |
| | 125 |
|
Tax effect of units involved in treasury unit transactions | | — |
| | (3,049 | ) | | — |
| | — |
| | — |
| | — |
| | (3,049 | ) |
Payments related to tax withholding for equity compensation | | — |
| | (6,943 | ) | | — |
| | — |
| | — |
| | — |
| | (6,943 | ) |
Net cash for financing activities | | (95,426 | ) | | (13,190 | ) | | — |
| | (2,200 | ) | | — |
| | (52,424 | ) | | (163,240 | ) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | (967 | ) | | — |
| | — |
| | — |
| | (967 | ) |
CASH AND CASH EQUIVALENTS | | | | | | | | | | | | | | |
Net increase (decrease) for the period | | — |
| | — |
| | (7,880 | ) | | 34,893 |
| | 36 |
| | (2,538 | ) | | 24,511 |
|
Balance, beginning of period | | — |
| | — |
| | 85,758 |
| | 80,430 |
| | 1,152 |
| | (1,095 | ) | | 166,245 |
|
Balance, end of period | | $ | — |
| | $ | — |
| | $ | 77,878 |
| | $ | 115,323 |
| | $ | 1,188 |
| | $ | (3,633 | ) | | $ | 190,756 |
|
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 amusement parks and water parks, (2) food, merchandise and games inside our parks, and (3) hotel rooms, extra-charge attractions, and food and other attractions both inside and outside our parks.parks, and (3) accommodations, extra-charge products, and other revenue sources. Our principal costs and expenses, which include salaries and wages, advertising,operating supplies, maintenance, operating supplies,advertising, utilities and insurance, are relatively fixed for an operating season 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 in-park per capita spending 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, Regional Vice Presidents 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 condensed consolidated financial statements:
•Accounting for Business Combinations
•Impairment of Long-Lived Assets
•Goodwill and Other Intangible Assets
•Self-Insurance Reserves
•Derivative Financial Instruments
•Revenue Recognition
Income Taxes
In the third quarter of 2017, there2019, we completed the acquisition of the Schlitterbahn parks (see Note 3). We have, therefore, included Accounting for Business Combinations as a Critical Accounting Policy below. There were no other changes in the above critical accounting policies from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.2018.
Accounting for Business Combinations
Business combinations are accounted for under the acquisition method of accounting. The amounts assigned to the identifiable assets acquired and liabilities assumed in connection with acquisitions are based on estimated fair values as of the date of the acquisition, with the remainder, if any, recorded as goodwill. The fair values are determined by management, taking into consideration information supplied by the management of the acquired entities, valuations supplied by independent appraisal experts and other relevant information. The valuations are generally based upon future cash flow projections for the acquired assets, discounted to present value. The determination of fair values requires significant judgment by management.
Adjusted EBITDA:
We believe that Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the Amended 2017 Credit Agreement and the 2013 Credit Agreement)prior credit agreements) is a meaningful measure as it is widely used by analysts, investors and comparable companies in our industry to evaluate our operating performance on a consistent basis, as well as more easily compare our results with those of other companies in our industry. Further, management believes Adjusted EBITDA is a meaningful measure of park-level operating profitability and 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- and nine-month periods ended September 24, 201729, 2019 and September 25, 201623, 2018.
| | | Three months ended | | Nine months ended | Three months ended | | Nine months ended |
(In thousands) | 9/24/2017 | | 9/25/2016 | | 9/24/2017 | | 9/25/2016 | September 29, 2019 | | September 23, 2018 | | September 29, 2019 | | September 23, 2018 |
Net income | $ | 191,315 |
| | $ | 174,987 |
| | $ | 157,929 |
| | $ | 184,484 |
| $ | 189,955 |
| | $ | 213,307 |
| | $ | 169,580 |
| | $ | 149,150 |
|
Interest expense | 21,638 |
| | 20,957 |
| | 62,472 |
| | 61,869 |
| 27,967 |
| | 21,464 |
| | 71,814 |
| | 62,563 |
|
Interest income | (351 | ) | | (58 | ) | | (399 | ) | | (84 | ) | (807 | ) | | (530 | ) | | (1,121 | ) | | (811 | ) |
Provision for taxes | 73,747 |
| | 62,918 |
| | 63,769 |
| | 65,339 |
| 48,815 |
| | 38,770 |
| | 43,506 |
| | 33,301 |
|
Depreciation and amortization | 70,060 |
| | 64,685 |
| | 126,237 |
| | 118,175 |
| 68,335 |
| | 74,374 |
| | 137,828 |
| | 132,114 |
|
EBITDA | 356,409 |
| | 323,489 |
| | 410,008 |
| | 429,783 |
| 334,265 |
| | 347,385 |
| | 421,607 |
| | 376,317 |
|
Loss on early debt extinguishment | — |
| | — |
| | 23,115 |
| | — |
| — |
| | — |
| | — |
| | 1,073 |
|
Net effect of swaps | (952 | ) | | 1,650 |
| | 3,717 |
| | 8,902 |
| 3,910 |
| | (1,217 | ) | | 21,068 |
| | (5,751 | ) |
Non-cash foreign currency (gain) loss | (29,156 | ) | | 7,360 |
| | (34,985 | ) | | (23,535 | ) | 5,617 |
| | (13,064 | ) | | (12,528 | ) | | 12,026 |
|
Non-cash equity compensation expense | 3,126 |
| | 2,160 |
| | 9,728 |
| | 6,909 |
| 2,930 |
| | 1,906 |
| | 8,760 |
| | 8,054 |
|
Loss on impairment / retirement of fixed assets, net | 1,347 |
| | 1,355 |
| | 3,057 |
| | 5,382 |
| 1,675 |
| | 3,247 |
| | 3,781 |
| | 7,959 |
|
Gain on sale of investment | (1,877 | ) | | — |
| | (1,877 | ) | | — |
| — |
| | — |
| | (617 | ) | | — |
|
Employment practice litigation costs | 4,696 |
| | — |
| | 4,696 |
| | — |
| |
Acquisition-related costs | | 6,292 |
| | — |
| | 7,238 |
| | — |
|
Other (1) | 49 |
| | 1 |
| | 397 |
| | 341 |
| 499 |
| | (120 | ) | | 782 |
| | (27 | ) |
Adjusted EBITDA | $ | 333,642 |
| | $ | 336,015 |
| | $ | 417,856 |
| | $ | 427,782 |
| $ | 355,188 |
| | $ | 338,137 |
| | $ | 450,091 |
| | $ | 399,651 |
|
| |
(1) | Consists of certain costs as defined in the Company'sour Amended 2017 Credit Agreement and prior credit agreements. These items are excluded infrom the calculation of Adjusted EBITDA and have included certain legal expenses, costs associated with certain ride abandonment or relocation expenses and severance expenses. This balance also includes unrealized gains and losses on short-term investments. |
Results of Operations:
We believe the following are significantkey operational measures in the structure of our managementmanagerial and operational reporting, and they are used as major factors in keysignificant operational decisions:
Attendance is defined as the number of guest visits to our amusement parks and separately gated outdoor water parks.
In-park per capita spending is calculated as revenues generated within our amusement parks and separately gated outdoor water parks along with related tolls and parking revenues (in-park revenues), divided by total attendance.
Out-of-park revenues are defined as revenues from resort, marina, sponsorship, online transaction fees charged to customers and all other out-of-park operations.
Both Net revenues consist of in-park per capita spendingrevenues and out-of-park revenues exclude less amounts remitted forto outside parties under concessionaire arrangements. See Note 4 for further information.Nine months ended September 24, 2017
29, 2019
The fiscal nine-month period ended September 24, 2017 included a total of 1,722 operating days compared with 1,825 operating daysresults for the fiscal nine-month period ended September 25, 2016. On a same-park basis (excluding Wildwater Kingdom, one of29, 2019 are not directly comparable with the Partnership's separately gated outdoor water parks which was closed after the 2016 operating season),results for the fiscal nine-month period ended September 25, 201623, 2018. First, the current period includes results from the operations of the recently acquired Schlitterbahn parks from the July 1, 2019 acquisition date. Second, the current period consisted of a 39-week period and included a total of 1,7421,730 operating days. days (excluding the Schlitterbahn parks) compared with 38 weeks and 1,710 operating days (excluding the Schlitterbahn parks) for the prior period. Since many differences in our operating results relate to the acquisition and the additional week in the current period, we have also included a discussion of operating results on a same-park/same-week basis. For purposes of the nine-month same-park/same-week basis discussions, the current period discussed excludes the results of the Schlitterbahn parks and the prior period discussed is through September 30, 2018.
The following table presents key financial information for the nine months ended September 24, 201729, 2019 and September 25, 2016:23, 2018, as reported:
| | | | Nine months ended | | Nine months ended | | Increase (Decrease) | | Nine months ended | | Nine months ended | | Increase (Decrease) |
| | 9/24/2017 | | 9/25/2016 | | $ | | % | | September 29, 2019 | | September 23, 2018 | | $ | | % |
| | (Amounts in thousands, except for per capita spending) | | (Amounts in thousands, except for per capita spending) |
Net revenues | | $ | 1,093,805 |
| | $ | 1,096,755 |
| | $ | (2,950 | ) | | (0.3 | )% | | $ | 1,217,679 |
| | $ | 1,098,746 |
| | $ | 118,933 |
| | 10.8 | % |
Operating costs and expenses | | 690,897 |
| | 676,363 |
| | 14,534 |
| | 2.1 | % | | 784,060 |
| | 707,499 |
| | 76,561 |
| | 10.8 | % |
Depreciation and amortization | | 126,237 |
| | 118,175 |
| | 8,062 |
| | 6.8 | % | | 137,828 |
| | 132,114 |
| | 5,714 |
| | 4.3 | % |
Loss on impairment / retirement of fixed assets, net | | 3,057 |
| | 5,382 |
| | (2,325 | ) | | N/M |
| | 3,781 |
| | 7,959 |
| | (4,178 | ) | | N/M |
|
Gain on sale of investment | | (1,877 | ) | | — |
| | (1,877 | ) | | N/M |
| | (617 | ) | | — |
| | (617 | ) | | N/M |
|
Operating income | | $ | 275,491 |
| | $ | 296,835 |
| | $ | (21,344 | ) | | (7.2 | )% | | $ | 292,627 |
| | $ | 251,174 |
| | $ | 41,453 |
| | 16.5 | % |
N/M - Not meaningful | | | | | | | | | | | | | | | | |
Other Data: | | | | | | | | | | | | | | | | |
Adjusted EBITDA (1) | | $ | 417,856 |
| | $ | 427,782 |
| | $ | (9,926 | ) | | (2.3 | )% | | $ | 450,091 |
| | $ | 399,651 |
| | $ | 50,440 |
| | 12.6 | % |
Adjusted EBITDA margin (2) | | 38.2 | % | | 39.0 | % | | — |
| | (0.8 | )% | | 37.0 | % | | 36.4 | % | | — |
| | 0.6 | % |
Attendance | | 21,293 |
| | 21,472 |
| | (179 | ) | | (0.8 | )% | | 22,864 |
| | 21,026 |
| | 1,838 |
| | 8.7 | % |
In-park per capita spending | | $ | 47.24 |
| | $ | 46.82 |
| | $ | 0.42 |
| | 0.9 | % | | $ | 48.73 |
| | $ | 47.80 |
| | $ | 0.93 |
| | 1.9 | % |
Out-of-park revenues | | $ | 120,165 |
| | $ | 121,859 |
| | $ | (1,694 | ) | | (1.4 | )% | | $ | 140,452 |
| | $ | 126,306 |
| | $ | 14,146 |
| | 11.2 | % |
| |
(1) | For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation to net income, see page 29.39. |
| |
(2) | Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) is not a measurement computed in accordance with generally accepted accounting principles ("GAAP") or a substitute for measures computed in accordance with GAAP and may not be comparable to similarly titled measures of other companies. We provide Adjusted EBITDA margin because we believe the measure provides a meaningful measure of operating profitability. |
For the nine months ended September 24, 2017,29, 2019, net revenues decreased by $3.0increased 10.8%, or $118.9 million, to $1,093.8$1,217.7 million, from $1,096.8$1,098.7 million for the first nine months of 2016.ended September 23, 2018. This reflects a 179,000-visit decrease in attendance which was partially offset by the impact of a $0.421.8 million visit increase in attendance and a $0.93 increase in in-park per capita spending. Out-of-park revenues decreased $1.7increased $14.1 million compared with the same periodnine months ended September 23, 2018. The increase in net revenues was net of a $6.6 million unfavorable impact of foreign currency exchange related to our Canadian park.
Operating costs and expenses for the nine months ended September 29, 2019 increased 10.8%, or $76.6 million, to $784.1 million from $707.5 million for the nine months ended September 23, 2018. The increase was the result of an $11.0 million increase in cost of goods sold, a $40.9 million increase in operating expenses and a $24.7 million increase in SG&A expense. The increase in operating costs and expenses was net of a $3.1 million favorable impact of foreign currency exchange related to our Canadian park. Depreciation and amortization expense for the nine months ended September 29, 2019 increased $5.7 million compared with the nine months ended September 23, 2018.
The loss on impairment / retirement of fixed assets for the nine months ended September 29, 2019 was $3.8 million compared with $8.0 million for the nine months ended September 23, 2018. The decrease was attributable to the retirement of a specific asset in the second quarter of 2018 and the impairment of two specific assets in the third quarter of 2018. During the first quarter of 2019, a $0.6 million gain on sale of investment was recognized for additional proceeds from the liquidation of a preferred equity investment.
After the items above, operating income for the nine months ended September 29, 2019 increased $41.5 million to $292.6 million compared with $251.2 million for the nine months ended September 23, 2018.
Interest expense for the nine months ended September 29, 2019 increased $9.3 million due to interest incurred on the 2029 senior notes issued in late June 2019 and incremental revolving credit facility borrowings during 2019. We recognized a $1.1 million loss on early debt extinguishment during the first quarter of 2018 in connection with amending our 2017 Credit Agreement. The net effect of our swaps resulted in a charge to earnings of $21.1 million for the nine months ended September 29, 2019 compared with a $5.8 million benefit to earnings for the nine months ended September 23, 2018. The difference reflects the change in fair market value movements in our swap portfolio offset by the prior year.period amortization of amounts in OCI for our de-designated swaps. During the current period, we also recognized a $12.5 million net benefit to earnings for foreign currency gains and losses compared with a $12.0 million net charge to earnings for the nine months ended September 23, 2018. Both amounts primarily represent remeasurement of the U.S.-dollar denominated debt recorded at our Canadian entity from the U.S.-dollar to the legal entity's functional currency.
During the nine months ended September 29, 2019, a provision for taxes of $43.5 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes compared with a provision for taxes of $33.3 million for the nine months ended September 23, 2018. The decreaseincrease in provision for taxes was attributable to an increase in pretax income from our taxable subsidiaries.
After the items above, net income for the nine months ended September 29, 2019 totaled $169.6 million, or $2.98 per diluted limited partner unit, compared with net income of $149.2 million, or $2.63 per diluted limited partner unit, for the nine months ended September 23, 2018.
As stated previously, the results for the nine months ended September 29, 2019 included the results of the recently acquired Schlitterbahn parks and an additional week of operations as compared with the nine months ended September 23, 2018. Comparing both 2019 and 2018 on a same-park/same-week basis, net revenues increased by $53.9 million, or 5%, to $1,176.2 million. The increase reflects the impact of a 635,000-visit increase in attendance forto 22.2 million visits and an $0.83 increase in in-park per capita spending to $48.54 on a same-park/same-week basis. The increase in attendance, particularly season pass visitation, was driven by strong season pass sales, favorable third quarter weather conditions and the first nine monthsintroduction of 2017 relates primarily to the closure of Wildwater Kingdom after the 2016 operating season.new immersive events. The increase in in-park per capita spending was attributable to higher guest spending in food and beverage driven by the continued investment in our food and beverage offerings and in extra-charge products, particularly front-of-line products, driven by higher attendance levels. Out-of-park revenues increased $7.5 million to $136.0 million on a same-park/same-week basis largely attributabledue to an increase in revenues from our all-season diningonline transaction fees charged to customers and beverage programs, as well as our premium product offerings. The increase was partially offset by a decrease in in-park per capita spending related to admissions resulting from a higher season pass attendance mix, and from a shift of a portionthe acquisition of the estimated number of uses per season pass into the fourth quarter with three additional parks extending their operating seasonsSawmill Creek Resort at Cedar Point described in Note 3. Amounts remitted to include WinterFest,outside parties under concessionaire arrangements increased $2.4 million to $35.6 million on a holiday event operating during November and December. The decrease in out-of-park revenues was due to prior period revenues received from a Super Bowl 50 special event and a decline in accommodations revenue. Foreign currency exchange rates had an immaterial impact on net revenues.same-park/same-week basis.
Operating costs and expenses for the first nine months of 2017on a comparable same-park/same-week basis increased 2.1%by $44.6 million, or 6%, or $14.5 million, to $690.9 million from $676.4 million for the first nine months of 2016.$764.9 million. The increase iswas the result of a $9.1$6.5 million increase in cost of goods sold, an $18.5 million increase in operating expenses and a $19.6 million increase in SG&A expense a $6.0 million increase in operating expense offset by a $0.5 million decrease in cost of goods sold.for the comparable same-park/same-week basis. Cost of goods sold as a percentage of food, merchandise, and games net revenue was comparable for both periods.comparable. Operating expenses grew by $6.0$18.5 million primarily due to increased labor costs for seasonal, wages which werefull-time and maintenance labor largely driven by hourlyplanned wage and rate increases, and increasedas well as incremental operating supply expense attributable to incremental special andcosts associated with new immersive events. The seasonal events andrate increase was partially offset by a decrease in labor hours during the opening of several large capital projects.comparable periods. The $9.1$19.6 million increase in SG&A expense was primarily attributable to a reserve established for an employment practice claim,$7.2 million of acquisition-related costs, increased transaction fees related to higher merchant fees, increasedsales volume, higher technology related costs, and increasedan increase in full-time wages and related employee benefits and taxes. Foreign currency exchange rates had an immaterial impact on operating costs and expenses.
wages. Depreciation and amortization expense for the first nine months of 2017 increased $8.1$0.8 million to $126.2$135.7 million from $118.2 million foron a same-park/same-week basis.
After the same period insame-park/same-week basis fluctuations described above, and the prior year. The increase is attributable to a change in the estimated useful livesfluctuations of a long-lived asset at Cedar Point and a series of other long-lived assets across the portfolio. For the first nine months of 2017, the loss on impairment / retirement of fixed assets was $3.1 million, reflecting retirements of assets in the normal course of business at several of our properties. During the third quarter of 2017, a $1.9 millionand gain on sale of investment, was recognized forwhich were not materially impacted by the liquidationacquisition of a preferred equity investment.
After the items above,Schlitterbahn parks or the additional week of activity in the current period, operating income for the first nine months of 2017 decreased $21.3 million to $275.5 million compared with operating income of $296.8 million for the first nine months of 2016.
Intereston a comparable same-park/same-week basis increased $13.3 million. The fluctuations in interest expense, for the first nine months of 2017 was comparable to the same period in the prior year. We recognized a $23.1 million loss on early debt extinguishment, during the nine months ended September 24, 2017 attributable to the April 2017 debt refinancing. The net effect of swaps, resulted in a charge to earnings of $3.7 million for the first nine months of 2017 compared with a $8.9 million charge to earnings in 2016 for the same period. The difference reflects the amortization of amounts in OCI for our de-designated swap portfolio offset by fair market value movements for these swaps. During the period, we also recognized a $35.0 million net benefit to earnings for foreign currency gains(gain) loss, and losses compared with a $23.7 million net benefit to earnings for the same period in 2016. Both amounts primarily represent remeasurement of the U.S.-dollar denominated debt held at our Canadian property from the applicable currency to the legal entity's functional currency.
During the first nine months of 2017, a provision for taxes on a same-park/same-week basis were not materially impacted by the acquisition of $63.8 million was recorded to account for PTP taxes and income taxes on our corporate subsidiaries. This compares with a $65.3 million provision for taxes recorded for the first nine monthsSchlitterbahn parks or the additional week of 2016. The decreaseactivity in provision for taxes relates largely to the tax effect of foreign currency exchange related to our Canadian property partially offset by an increase in pretax income from our corporate subsidiaries compared with the same period a year ago.
current period. After thethese items, above, net income for the first nine months totaled $157.9 million, or $2.79 per diluted limited partner unit, compared with net income of $184.5 million, or $3.27 per diluted limited partner unit, for the same periodon a year ago.
For the nine month period, our Adjusted EBITDAcomparable same-park/same-week basis decreased to $417.9$7.6 million from $427.8 million for the same period in 2016. The approximate $9.9 million decrease in Adjusted EBITDA is due to decreased attendance and lower out-of-park revenue, as well as higher operating costs and expenses associated with labor, merchant fees and other planned spending. Our Adjusted EBITDA margin also decreased 80 basis points as a result of lower net revenues and expense growth.
On a same-park basis (excluding Wildwater Kingdom), net revenues increased by $2.5 million to $1,093.8$156.9 million for the nine months ended September 24, 201730, 2018 to $149.3 million for the nine months ended September 29, 2019.
For the nine months ended September 29, 2019, Adjusted EBITDA increased $50.4 million to $450.1 million from $1,091.3$399.7 million infor the same period in the prior year. This is the result ofnine months ended September 23, 2018. Adjusted EBITDA on a 59,000-visit increase insame-park/same-week basis increased $16.8 million, or 4%, due to increased net revenues driven by higher attendance, and a $0.15 increase in in-park per capita spending and out-of-park revenues offset by
higher expenses, particularly for planned increases in labor and operating supply costs and variable costs associated with higher attendance, such as cost of goods sold and transaction fees. Our Adjusted EBITDA margin for the nine months ended September 29, 2019 increased 60 basis points (bps) compared with Adjusted EBITDA margin for the nine months ended September 23, 2018. Adjusted EBITDA margin on a same-park basis. Operatingsame-park/same-week basis decreased 20 bps due to the planned expense increases in labor and operating supply costs, including costs for new facilities and expenses (includingimmersive events. Adjusted EBITDA and Adjusted EBITDA margin were computed in the same manner for both same-park/same-week periods (3).
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(3) | Adjusted EBITDA for the nine months ended September 29, 2019 excluding the Schlitterbahn parks' results (i.e. the same-park basis current period) was calculated as net income of $149.3 million plus interest expense of $71.8 million, interest income of $1.1 million, provision for taxes of $43.5 million, depreciation and amortization expense of $135.7 million, net effect of swaps charge of $21.1 million, non-cash foreign currency gain of $12.5 million, non-cash equity compensation expense of $8.8 million, loss on impairment / retirement of fixed assets of $3.8 million, and acquisition-related costs of $7.2 million. |
Adjusted EBITDA for the nine months ended September 30, 2018 (i.e. the same-week basis prior period) was calculated as net income of $156.9 million plus interest expense of $62.6 million, interest income of $0.8 million, provision for taxes of $33.4 million, depreciation and amortization expense of $134.9 million, loss on early debt extinguishment of $1.1 million, net effect of swaps benefit of $5.8 million, non-cash foreign currency loss of $12.1 million, non-cash equity compensation expense of $8.1 million, and loss on impairment / retirement of fixed assets and gain on sale of investment) on a same-park basis increased $23.8 million resulting in a $21.3 million decrease in same-park operating income.$8.0 million.
Three months ended September 24, 201729, 2019
The fiscal three-month period ended September 24, 2017 consisted of a total of 960 operating days compared with 1,021 operating daysresults for the fiscal three-month period ended September 25, 2016. On a same-park basis (excluding Wildwater Kingdom, one of29, 2019 are not directly comparable with the Partnership's separately gated outdoor water parks which was closed after the 2016 operating season),results for the fiscal three-month period ended September 25, 201623, 2018. First, the current period includes results from the operations of the recently acquired Schlitterbahn parks. Second, the current period included a total of 965903 operating days. days (excluding the Schlitterbahn parks) compared with 956 operating days (excluding the Schlitterbahn parks) for the prior period. Since many differences in our operating results relate to the acquisition and the fewer operating days in the current period, we have also included a discussion of operating results on a same-park/same-week basis. For purposes of the three-month same-park/same-week basis discussions, the current period discussed excludes the results of the Schlitterbahn parks and the prior period discussed is the 13-week period through September 30, 2018.
The following table presents key financial information for the three months ended September 24, 201729, 2019 and September 25, 2016:23, 2018, as reported:
| | | | Three months ended | | Three months ended | | Increase (Decrease) | | Three months ended | | Three months ended | | Increase (Decrease) |
| | 9/24/2017 | | 9/25/2016 | | $ | | % | | September 29, 2019 | | September 23, 2018 | | $ | | % |
| | (Amounts in thousands, except for per capita spending) | | (Amounts in thousands, except for per capita spending) |
Net revenues | | $ | 652,689 |
| | $ | 650,283 |
| | $ | 2,406 |
| | 0.4 | % | | $ | 714,512 |
| | $ | 663,703 |
| | $ | 50,809 |
| | 7.7 | % |
Operating costs and expenses | | 327,020 |
| | 316,448 |
| | 10,572 |
| | 3.3 | % | | 369,180 |
| | 327,510 |
| | 41,670 |
| | 12.7 | % |
Depreciation and amortization | | 70,060 |
| | 64,685 |
| | 5,375 |
| | 8.3 | % | | 68,335 |
| | 74,374 |
| | (6,039 | ) | | (8.1 | )% |
Loss on impairment / retirement of fixed assets, net | | 1,347 |
| | 1,355 |
| | (8 | ) | | N/M |
| | 1,675 |
| | 3,247 |
| | (1,572 | ) | | N/M |
|
Gain on sale of investment | | (1,877 | ) | | — |
| | (1,877 | ) | | N/M |
| |
Operating income | | $ | 256,139 |
| | $ | 267,795 |
| | $ | (11,656 | ) | | (4.4 | )% | | $ | 275,322 |
| | $ | 258,572 |
| | $ | 16,750 |
| | 6.5 | % |
N/M - Not meaningful | | | | | | | | | | | | | | | | |
Other Data: | | | | | | | | | | | | | | | | |
Adjusted EBITDA (1) | | $ | 333,642 |
| | $ | 336,015 |
| | $ | (2,373 | ) | | (0.7 | )% | | $ | 355,188 |
| | $ | 338,137 |
| | $ | 17,051 |
| | 5.0 | % |
Attendance | | 12,428 |
| | 12,492 |
| | (64 | ) | | (0.5 | )% | | 13,189 |
| | 12,371 |
| | 818 |
| | 6.6 | % |
In-park per capita spending | | $ | 48.73 |
| | $ | 48.01 |
| | $ | 0.72 |
| | 1.5 | % | | $ | 49.94 |
| | $ | 49.47 |
| | $ | 0.47 |
| | 1.0 | % |
Out-of-park revenues | | $ | 65,103 |
| | $ | 67,903 |
| | $ | (2,800 | ) | | (4.1 | )% | | $ | 76,347 |
| | $ | 70,129 |
| | $ | 6,218 |
| | 8.9 | % |
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(1) | For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation to net income, see page 29.39. |
For the quarterthree months ended September 24, 2017,29, 2019, net revenues increased by $2.47.7%, or $50.8 million, to $652.7$714.5 million, from $650.3$663.7 million infor the third quarter of 2016.three months ended September 23, 2018. This reflects the impact of an 0.8 million visit increase in attendance and a $0.72$0.47 increase in in-park per capita spending, partially offset by the impact of a 64,000-visit decrease in attendance.spending. Out-of-park revenues decreased $2.8increased $6.2 million compared with the same period in the prior year. The increase in in-park per capita spending was largely attributable to an increase in revenues from our all-season dining and beverage programs, as well as our premium product offerings and non-season pass admissions. The increase was partially offset by a decrease in in-park per capita spending related to season pass admissions resulting from a shift of a portion of the estimated number of uses per season pass into the fourth quarter with three additional parks extending their operating seasons to include WinterFest, a holiday event operating during November and December. The decrease in attendance for the third quarter relates to the closure of Wildwater Kingdom after the 2016 operating season. The decrease in out-of-park revenues was attributable to prior period proceeds received during the third quarter of 2016 from a business interruption claim at Cedar Point and a decrease in out-of-park food revenue.months
ended September 23, 2018. The increase in net revenues iswas net of a $0.9$2.5 million unfavorable impact of foreign currency exchange related to our Canadian park.
Operating costs and expenses for the three months ended September 29, 2019 increased 12.7%, or $41.7 million, to $369.2 million from $327.5 million for the three months ended September 23, 2018. The increase was the result of a $4.6 million increase in cost of goods sold, a $21.1 million increase in operating expenses and a $16.0 million increase in SG&A expense. The increase in operating costs and expenses was net of a $1.0 million favorable impact of foreign currency exchange related to our Canadian park. Depreciation and amortization expense for the three months ended September 29, 2019 decreased $6.0 million compared with the three months ended September 23, 2018.
The loss on impairment / retirement of fixed assets for the three months ended September 29, 2019 was $1.7 million compared with $3.2 million for the three months ended September 23, 2018. The decrease was attributable to the impairment of two specific assets in the third quarter of 2018.
After the items above, operating income for the three months ended September 29, 2019 increased $16.8 million to $275.3 million compared with $258.6 million for the three months ended September 23, 2018.
Interest expense for the three months ended September 29, 2019 increased $6.5 million due to interest incurred on the 2029 senior notes issued in late June 2019. The net effect of our swaps resulted in a charge to earnings of $3.9 million for the three months ended September 29, 2019 compared with a $1.2 million benefit to earnings for the three months ended September 23, 2018. The difference reflects the change in fair market value movements in our swap portfolio offset by the prior period amortization of amounts in OCI for our de-designated swaps. During the current period, we also recognized a $5.6 million net charge to earnings for foreign currency gains and losses compared with a $13.1 million net benefit to earnings for the three months ended September 23, 2018. Both amounts primarily represent remeasurement of the U.S.-dollar denominated debt recorded at our Canadian entity from the U.S.-dollar to the legal entity's functional currency.
During the three months ended September 29, 2019, a provision for taxes of $48.8 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes compared with a provision for taxes of $38.8 million for the three months ended September 23, 2018. The increase in provision for taxes was attributable to an increase in pretax income from our taxable subsidiaries.
After the items above, net income for the three months ended September 29, 2019 totaled $190.0 million, or $3.34 per diluted limited partner unit, compared with $213.3 million, or $3.76 per diluted limited partner unit, for the three months ended September 23, 2018.
As stated previously, the results for the three months ended September 29, 2019 included the results of the recently acquired Schlitterbahn parks and fewer operating days compared with the three months ended September 23, 2018. Comparing both 2019 and 2018 on a same-park/same-week basis, net revenues increased by $43.1 million, or 7%, to $673.0 million. The increase reflects the impact of a 732,000-visit increase in attendance to 12.5 million visits and a $0.21 increase in in-park per capita spending to $49.67 on a same-park/same-week basis. The increase in attendance, particularly season pass visitation, was driven by strong season pass sales, favorable third quarter weather conditions and the introduction of new immersive events. The increase in in-park per capita spending was attributable to higher guest spending in food and beverage and in extra-charge products offset by a decrease in admission spending due to a higher season pass attendance mix. Out-of-park revenues increased $6.0 million to $71.9 million on a same-park/same-week basis due to an increase in online transaction fees charged to customers, the acquisition of the Sawmill Creek Resort at Cedar Point described in Note 3 and increased accommodation revenues at our existing facilities. Amounts remitted to outside parties under concessionaire arrangements increased $1.7 million to $19.1 million on a same-park/same-week basis.
Operating costs and expenses for the quarteron a comparable same-park/same-week basis increased 3.3%by $33.9 million, or 11%, or $10.6 million, to $327.0 million from $316.4 million in the third quarter of 2016.$350.0 million. The increase iswas the result of a $6.6$4.8 million increase in cost of goods sold, a $14.9 million increase in operating expenses and a $14.2 million increase in SG&A expense a $3.4 million increase in operating expense, and a $0.6 million increase in cost of goods sold.for the comparable same-park/same-week periods. Cost of goods sold as a percentage of food, merchandise, and games net revenue was comparable for both periods.comparable. Operating expenses grew by $3.4$14.9 million primarily due to increased labor costs for seasonal wages which werelabor driven by hourlyplanned rate increases and to a lesser extent, increasedfull-time labor driven by both headcount and wage increases, as well as incremental operating supply expense attributable to additional seasonal events and the timing of maintenance projects.costs associated with new immersive events. The $6.6$14.2 million increase in SG&A expense was primarily attributable to a reserve established for$6.3 million of acquisition-related costs, increased transaction fees related to higher sales volume, and an employment practice claim, higher merchant fees, and increased technology related costs. The increase in operating costs and expenses is net of a $0.4 million unfavorable impact of foreign currency exchange related to our Canadian park.
full-time wages driven by accrued incentive compensation. Depreciation and amortization expense for the quarter increased $5.4on a comparable same-park/same-week basis decreased $4.3 million to $70.1$66.2 million compared to $64.7 million for the same period in the prior year. The increase is attributabledue to a change in the estimated useful liveslife of a long-lived asset at Cedar PointKings Island in the prior period.
After the same-park/same-week basis fluctuations described above, and a series of other long-lived assets across the portfolio. For the third quarter of 2017, the loss on impairment / retirement of fixed assets fluctuation, which was $1.3 million, reflectingnot materially impacted by the retirementsacquisition of assetsthe Schlitterbahn parks or the fewer operating days in the normal course of business at several of our properties. A $1.9 million gain on sale of investment was recognized during the quarter for the liquidation of a preferred equity investment.
After the items above,current period, operating income on a comparable same-week basis increased $15.2 million. The fluctuations in interest expense, net effect of swaps, foreign currency (gain) loss, and provision for taxes on a same-park/same-week basis were not materially impacted by the third quarteracquisition of 2017the Schlitterbahn parks or the fewer operating days in the current period. After these items, net income on a comparable same-park/same-week basis decreased $11.7$24.9 million to $256.1 million compared with an operating income of $267.8from $194.7 million for the third quarter of 2016.
Interest expense for the third quarter of 2017 was comparablethree months ended September 30, 2018 to the same period in the prior year. The net effect of our swaps resulted in a benefit to earnings of $1.0$169.7 million for the third quarterthree months ended September 29, 2019.
For the three months ended September 29, 2019, Adjusted EBITDA increased $17.1 million to $355.2 million from $338.1 million for the three months ended September 23, 2018. Adjusted EBITDA on a comparable same-park/same-week basis increased $16.6 million, or 5%, due to increased net revenues attributable to higher attendance, in-park per capita spending and out-of-park revenues offset by higher expenses, particularly for planned increases in labor and operating supply costs and variable costs associated with higher attendance, such as cost of 2017 compared with a $1.7 million charge to earningsgoods sold and transaction fees. Adjusted EBITDA was computed in the third quarter of 2016. The difference reflects the change in fair market value movements in our de-designated swap portfolio offset by the amortization of amounts in OCIsame manner for these swaps. During the current quarter, we also recognized a $29.2 million net benefit to earnings for foreign currency gains and losses compared with a $7.3 million net charge to earningsboth same-park/same-week periods (3).
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(3) | Adjusted EBITDA for the three months ended September 29, 2019 excluding the Schlitterbahn parks' results (i.e. the same-park basis current period) was calculated as net income of $169.7 million plus interest expense of $28.0 million, interest income of $0.8 million, provision for taxes of $48.8 million, depreciation and amortization expense of $66.2 million, net effect of swaps charge of $3.9 million, non-cash foreign currency loss of $5.6 million, non-cash equity compensation expense of $2.9 million, loss on impairment / retirement of fixed assets of $1.7 million and acquisition-related costs of $6.3 million. |
Adjusted EBITDA for the third quarter in 2016. Both amounts primarily represent remeasurementthree months ended September 30, 2018 (i.e. the same-week basis prior period) was calculated as net income of the U.S.-dollar denominated debt held at our Canadian property from the applicable currency to the legal entity's functional currency.
During the third quarter$194.7 million plus interest expense of 2017, a$21.5 million, interest income of $0.6 million, provision for taxes of $73.7$38.8 million, was recorded to account for PTP taxesdepreciation and income taxesamortization expense of $70.6 million, net effect of swaps benefit of $1.2 million, non-cash foreign currency gain of $13.0 million, non-cash equity compensation expense of $1.9 million, and loss on our corporate subsidiaries. This compares with a provision for taxes recorded inimpairment / retirement of fixed assets of $3.3 million.
Ten Month Results
These preliminary results include results from the third quarter of 2016 of $62.9 million. This increase in provision for taxes relates largely to an increase in pretax income from our corporate subsidiaries compared with the same period a year ago.
After the items above, net incomeSchlitterbahn parks which we acquired on July 1, 2019 (see Note 3). Net revenues for the current quarterten months ended November 3, 2019 were approximately $1.37 billion. Attendance totaled $191.325.8 million or $3.38guests, in-park per diluted limited partner unit, compared with a net income of $175.0 million, or $3.10 per diluted limited partner unit, for the third quarter a year ago.capita spending was $48.73, and out-of-park revenues totaled $155 million.
For the current quarter, our Adjusted EBITDA decreased to $333.6 million from $336.0 million for the fiscal third quarter of 2016. The approximate $2.4 million decrease in Adjusted EBITDA is attributable to decreased attendance and lower out-of-park revenue, as well as increased operating costs and expenses associated with labor, merchant fees, maintenance expense and other planned spending.
On a same-park basis (excluding Wildwater Kingdom)results from the Schlitterbahn parks), net revenues increased by $6.5 million to $652.7 million for the quarterten months ended September 24, 2017 from $646.2November 3, 2019 were approximately $1.33 billion, up $71 million, inor 6%, compared with the same period inten months ended November 4, 2018. The increase reflects the prior year reflectingimpact of a 103,000-visit4%, or 1 million- visit, increase in attendance, and a $0.39 increase in in-park per capita spending on a same-park basis. Operating costs and expenses (including depreciation and amortization, loss on impairment of fixed assets and gain on sale of investment) on a same-park basis increased $17.3 million resulting in a $10.8 million decrease in same-park operating income.
October 2017
Based on preliminary results, net revenues through October 29, 2017 were approximately $1.24 billion, up 1%, or $6 million, compared with the same period last year. The increase in net revenues was the result of a 1%, or $0.57, increase in in-park guest per capita spending to $47.40 offset byand a 45,000-visit, decrease in attendance to 24.1 million visits. During this same period, out-of-park revenues decreased 2%7%, or $3$10 million, to $133 million compared with 2016.
On a same-park basis (excluding Wildwater Kingdom), netincrease in out-of-park revenues were up approximately 1%, or $12 million, compared with the same period last year. The increase in net revenues on a same-park basis was the result of a 1%, or 192,000-visit, increase in attendance and a 1%, or $0.33, increase in in-park guest per capita spending. The fluctuation in out-of-park revenues was comparable on a same-park basis.prior period.
Liquidity and Capital Resources:
With respect to both liquidity and cash flow, we ended the third quarter of 2017 in sound condition. The working capital ratio (current assets divided by current liabilities) was 1.2 as of 1.2 at September 24, 2017 is the result29, 2019 and 1.1 as of normal seasonal activity. Receivables, inventories and payables are at normal seasonal levels.September 23, 2018.
Operating Activities
During the nine-month period ended September 24, 2017,29, 2019, net cash from operating activities was $322.6$389.1 million, a decreasean increase of $18.1$54.7 million fromcompared with the same period a year ago, primarilyago. The increase was largely attributable to higher earnings in the current period and the additional week in the current period due to lower earnings.the timing of the fiscal third quarter close.
Investing Activities
Net cash used for investing activities for the first nine months of 20172019 was $149.2$566.2 million, an increase of $22.3$420.5 million compared with the same period in the prior year. ThisThe increase reflects planned higher capital expenditures inwas attributable to the period.cash used to acquire the Schlitterbahn parks and Sawmill Creek Resort which totaled $270.2 million (see Note 3), and the purchase of the land at California's Great America from the City of Santa Clara for $150.3 million (see Note 12). Financing Activities
Net cash forfrom financing activities for the first nine months of 20172019 was $52.1$327.4 million, a decreasean increase of $95.7$490.6 million compared with net cash for financing activities during the same period in the prior year. This decrease reflects incremental debt borrowingsThe increase was primarily due to the increase in ournet cash proceeds from the 2029 senior securednotes issuance (see Note 7).
term loan facility under the 2017 Credit Agreement, offset by other impacts of the April 2017 refinancing including payment of debt issuance costs and early termination penalties.
As of September 24, 2017,29, 2019, our outstanding debt, before reduction for debt issuance costs and original issue discount, consisted of the following:
$733 million of senior secured term debt, maturing in April 2024 under our Amended 2017 Credit Agreement. The term debt bears interest at the London InterBank Offering Rate ("LIBOR") plus 175 basis points (bps), under amendments we entered into on March 14, 2018. The pricing terms for the amendment reflected $0.9 million of Original Issue Discount ("OID"). The term loan is payable $7.5 million annually. We have $7.5 million of current maturities as of September 29, 2019.
$450 million of 5.375% senior unsecured notes, maturing in June 2024, issued at par. The notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. The notes pay interest semi-annually in June and December.
$500 million of 5.375% senior unsecured notes, maturing in April 2027, issued at par. Prior to April 15, 2020, up to 35% of the notes may be redeemed with net cash proceeds of certain equity offerings at a price equal to 105.375% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any. The notes may be redeemed, in whole or in part, at any time prior to April 15, 2022 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 and additional 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. The notes pay interest semi-annually in April and October.
$450500 million of 5.375%5.250% senior unsecured notes, maturing in June 2024,July 2029, issued at par. Prior to July 15, 2022, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 105.250% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any. The notes may be redeemed, in whole or in part, at any time prior to June 1, 2019July 15, 2024 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 and additional 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. The notes pay interest semi-annually in JuneJanuary and December.July.
$735 million of senior secured term debt, maturing in April 2024 under our 2017 Credit Agreement. The term debt bears interest at London InterBank Offering Rate ("LIBOR") plus 225 basis points (bps). The term loan amortizes $7.5 million annually. We paid $15.0 million of amortization during the third quarter of 2017. Therefore, we have no current maturities as of September 24, 2017.
No borrowings under the $275 million senior secured revolving credit facility under our Amended 2017 Credit Agreement with a Canadian sub-limit of $15 million. Borrowings under the senior secured revolving credit facility bear interest at LIBOR or Canadian Dollar Offered Rate ("CDOR") plus 200 bps. The revolving credit facility is scheduled to mature in April 2022 and also provides for the issuance of documentary and standby letters of credit. The Amended 2017 Credit Agreement requires the payment of a 37.5 bps commitment fee per annum on the unused portion of the credit facilities. After letters of credit, which totaled $15.9$15.4 million atas of September 24, 2017,29, 2019, we had $259.1$259.6 million of available borrowings under the revolving credit facility and cash on hand of $249.9$258.1 million.
As of September 24, 2017,29, 2019, we have foureight interest rate swap agreements that effectively convert $500 million of variable-rate debt to a fixed rate. These swaps, whichFour of these agreements fix that variable-rate debt at 4.39% and mature on December 31, 2020. The other four fix the same notional amount of variable-rate debt at 4.63% for the period December 31, 2020 and fix LIBOR at a weighted averagethrough December 31, 2023. None of our interest rate of 2.64%,swap agreements were not designated as cash flow hedges.hedges in the periods presented. As of September 24, 2017,29, 2019, the fair market value of our derivativederivatives was a liability was $14.8of $27.8 million and was recorded in "Derivative Liability."Liability" within the unaudited condensed consolidated balance sheet.
The Amended 2017 Credit Agreement includes a Consolidated Leverage Ratio, which if breached for any reason and not cured could result in an event of default. The ratio is set at a maximum of 5.50x consolidated total debt-to-consolidatedConsolidated Total Debt-to-Consolidated EBITDA. As of September 24, 2017,29, 2019, we were in compliance with this financial condition covenant and all other financial covenants under the Amended 2017 Credit Agreement.
Our long-term debt agreements include Restricted Payment provisions. Pursuant to the terms of the indenture governing our June 20142024 senior notes, which includes the most restrictive of these Restricted Payments provisions, we can make Restricted Payments of $60 million annually so long as no default or event of default has occurred and is continuing; and our ability towe can make additional Restricted Payments is permitted shouldif our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio beis less than or equal to 5.00x.
In accordance with the Amended 2017 Credit Agreement debt provisions, on August 2, 2017,7, 2019, we announced the declaration of a distribution of $0.855$0.925 per limited partner unit, which was paid on September 15, 2017.17, 2019. Also, on November 2, 2017,6, 2019, we announced the declaration of a distribution of $0.89$0.935 per limited partner unit, which will be payable on December 15, 2017.17, 2019.
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 $15.9$15.4 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of September 24, 201729, 2019. 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"Management’s Discussion and Analysis of Financial Condition and Results of Operations”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. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the filing date of this document.
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 thatNone of our interest rate swap agreements 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.hedging instruments. Changes in fair value of derivative instruments that do not qualify as effective hedging activitiesfor hedge accounting or were de-designated are reported as “Net"Net effect of swaps”swaps" in the unaudited condensed consolidated statements of operations.operations and comprehensive income. Additionally, the “Other"Other comprehensive income (loss)”" related to interest rate swaps that become ineffectivehave been de-designated is amortized overthrough the remaining lifeoriginal maturity of the interest rate swap and reported as a component of “Net"Net effect of swaps”swaps" in the unaudited condensed consolidated statements of operations.operations and comprehensive income.
As of September 24, 2017,29, 2019, on an adjusted basis after giving affecteffect to the impact of interest rate swap agreements $1,450.0and before reduction for debt issuance costs and original issue discount, $1,950 million of our outstanding long-term debt represented fixed-rate debt and $235.0$233 million represented variable-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $7.2$34.7 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 $7.4$7.6 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 derivative portfolio would decrease by $5.0 million over the next twelve months.
A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $3.3$3.0 million decrease in annual operating income.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures -
We maintain a system of controls and procedures designed to ensure that information required to be disclosed by us in our 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 management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of September 24, 201729, 2019, management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 24, 201729, 2019.
(b)Changes in Internal Control Over Financial Reporting -
There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended September 24, 201729, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Freddie Ramos vs. Cedar Fair, L.P., Cedar Fair Management Company
The Partnership and Cedar Fair Management, Inc. are defendants in a lawsuit filed in Superior Court of the State of California for Orange County on November 23, 2016 by Freddie Ramos seeking damages and injunctive relief for claims related to certain employment and pay practices at our parks in California, including those related to certain check-out, time reporting, discharge, meal and rest period, and pay statement practices. The Partnership filed an answer on January 13, 2017 denying the allegations in the complaint and requesting a dismissal of all claims. On January 17, 2017, the Partnership filed a Notice of Removal of the case from the state court to the United State District Court for the Central District of California. The class has not been certified. On August 29, 2017, the Partnership participated in a mediation relating to the claims alleged in the lawsuit. Following this mediation, the Partnership negotiated a $4.2 million settlement with the named Plaintiff on a class wide basis. As part of the settlement the case will be remanded back to the Superior Court of the State of California for Orange County for a preliminary hearing and final court approval of the proposed settlement. The Partnership and the named Plaintiff are required to file a brief in support of the settlement with the court. The hearing to approve the final settlement is not expected to occur until at least the first quarter of 2018. Based upon the information available, the Partnership believes the liability recorded as of September 24, 2017 is adequate and does not expect the terms of the negotiated settlement or final briefing 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'sour Annual Report on Form 10-K for the year ended December 31, 2016.2018.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities:
The following table summarizes repurchases of Cedar Fair, L.P. Depositary Units representing limited partner interests by the Partnership during the three months ended September 24, 2017:29, 2019:
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Period | | (a)
Total Number of Units Purchased (1) | | (b)
Average Price Paid per Unit | | (c)
Total Number of Units Purchased as Part of Publicly Announced Plans or Programs | | (d)
Maximum Number (or Approximate Dollar Value) of Units that May Yet Be Purchased Under the Plans or Programs |
June 26 - July 30 | | 1,928 |
| | $ | 70.80 |
| | — |
| | $ | — |
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July 31 - August 27 | | — |
| | — |
| | — |
| | — |
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August 28 - September 24 | | — |
| | — |
| | — |
| | — |
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Total | | 1,928 |
| | $ | 70.80 |
| | — |
| | $ | — |
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| | (a) | | (b) | | (c) | | (d) |
Period | | Total Number of Units Purchased (1) | | Average Price Paid per Unit | | Total Number of Units Purchased as Part of Publicly Announced Plans or Programs | | Maximum Number (or Approximate Dollar Value) of Units that May Yet Be Purchased Under the Plans or Programs |
July 1 - July 31 | | — |
| | — |
| | — |
| | $ | — |
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August 1 - August 31 | | 1,960 |
| | $ | 54.93 |
| | — |
| | — |
|
September 1 - September 29 | | — |
| | — |
| | — |
| | — |
|
Total | | 1,960 |
| | $ | 54.93 |
| | — |
| | $ | — |
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(1) | All repurchased units were reacquired by the Partnership in satisfaction of tax obligations related to the vesting of restricted units which were granted under the Partnership's Omnibus Incentive Plan. |
ITEM 6. EXHIBITS
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Exhibit (101) | | The following materials from the Partnership's Quarterly Report on Form 10-Q for the quarter ended September 24, 201729, 2019 formatted in Extensible Business Reporting Language (XBRL):Inline XBRL: (i) the Unaudited Condensed Consolidated Statements of Income, (ii) the Unaudited Condensed Consolidated Balance Sheets, (iii) the Unaudited Condensed Consolidated Statements of Cash Flow, (iv) the Unaudited Condensed Consolidated Statement of Equity, and (v) related notes.notes, tagged as blocks of text and including detailed tags. |
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Exhibit (104) | | The cover page from the Partnership's Quarterly Report on Form 10-Q for the quarter ended September 29, 2019, formatted in Inline XBRL (included as Exhibit 101). |
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.
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| | CEDAR FAIR, L.P. | |
| | (Registrant) | |
| | | |
| | By Cedar Fair Management, Inc. |
| | General Partner | |
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Date: | November 2, 20176, 2019 | /s/ MatthewRichard A. OuimetZimmerman |
| | MatthewRichard A. OuimetZimmerman |
| | President and Chief Executive Officer |
| | | |
Date: | November 2, 20176, 2019 | /s/ Brian C. Witherow |
| | Brian C. Witherow |
| | Executive Vice President and |
| | Chief Financial Officer |