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FORM 10 - K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
Commission file number 1-9444
CEDAR FAIR, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 34-1560655
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 5006, Sandusky, Ohio 44871-5006
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (419) 626-0830
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
Depositary Units New York Stock Exchange
(Representing Limited Partner
Interests)
Securities registered pursuant to section 12(g) of the Act: None
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. Yes X No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of Depositary Units held by non-affiliates of the
Registrant based on the closing price of such units on February 16, 1996 of
$39.00 per unit was $866,000,000.
Number of Depositary Units representing limited partner interests
outstanding as of February 16, 1996: 22,960,208.
DOCUMENTS INCORPORATED BY REFERENCE
1995 Annual Report to Unitholders incorporated by reference into Part II
(Items 5-8) and Part IV Item 14.
*********************************
The Exhibit Index is located at Page 40
Page 1 of 46 pages
CEDAR FAIR, L.P.
INDEX
PART I PAGE
Item 1. Business 3
Item 2. Properties 8
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security 8
Holders
PART II
Item 5. Market for Registrant's Depositary Units
and Related Unitholder Matters 9
Item 6. Selected Financial Data 10
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of 11
Operations
Item 8. Financial Statements and Supplementary Data 14
Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial 25
Disclosure
PART III
Item 10. Directors and Executive Officers of 26
Registrant
Item 11. Executive Compensation 30
Item 12. Security Ownership of Certain Beneficial
Owners and Management 34
Item 13. Certain Relationships and Related
Transactions 35
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K 36
Signatures 39
Exhibit Index 40
PART I
ITEM 1. BUSINESS.
Cedar Fair, L.P. (the "Partnership") is a publicly traded Delaware limited
partnership, which was originally organized as a Minnesota limited
partnership in 1983 for the purpose of acquiring Cedar Point, Inc. ("CPI").
The Partnership is managed by Cedar Fair Management Company (the "Managing
General Partner"). The Partnership owns and operates four amusement parks:
Cedar Point, located on Lake Erie between Cleveland and Toledo in Sandusky,
Ohio; Valleyfair, located near Minneapolis-St. Paul in Shakopee, Minnesota;
Dorney Park & Wildwater Kingdom ("Dorney Park"), located near Allentown in
South Whitehall Township, Pennsylvania; and Worlds of Fun/Oceans of Fun,
which was acquired on July 28, 1995, located in Kansas City, Missouri. The
parks are family-oriented, with recreational facilities for people of all
ages, and provide clean and attractive environments with exciting rides and
entertainment.
Generally, the parks are open daily from 9:00 a.m. to 10:00-12:00 p.m. from
early May until Labor Day, after which they are open during weekends in
September and early October. As a result, virtually all of the operating
revenues of the parks are derived during the approximately 130-day
operating season. The parks charge a basic daily admission price, which
allows unlimited use of all rides and attractions with the exception of
Challenge Park at Cedar Point and Valleyfair, and Thrills Unlimited at
Dorney Park. The demographic groups that are most important to the parks
are young people ages 13 through 24 and families. Families are believed to
be attracted by a combination of the rides and entertainment and the clean,
wholesome atmosphere. Young people are believed to be attracted by the
action-packed rides. During the operating season, the parks conduct active
television, radio, and newspaper advertising campaigns in their major
market areas.
CEDAR POINT PARK
Cedar Point, which was first developed as a recreational area in 1870, is
located on a peninsula in Sandusky, Ohio bordered by Lake Erie and Sandusky
Bay, approximately 60 miles west of Cleveland and 100 miles southeast of
Detroit. Cedar Point is believed to be the largest seasonal amusement park
in the United States, measured by the number of rides and attractions and
the ride capacity per hour. It serves a six-state region in the midwestern
United States, which includes nearly all of Ohio and Michigan, western
Pennsylvania and New York, northern West Virginia and Indiana and
southwestern Ontario, Canada. The park's total market area includes
approximately 22 million people, and the major areas of dominant influence
in this market area, which are Cleveland, Akron, Toledo, Detroit, Columbus,
Flint, Saginaw and Youngstown, include approximately 12 million people.
The main amusement areas of Cedar Point consist of over two miles of
midways, with over 50 rides and attractions, including "Magnum XL-200",
"Raptor" and "Mean Streak", which are among the world's tallest steel,
inverted and wood roller coasters, respectively; beginning in 1996,
"Mantis", the world's tallest, fastest and steepest stand-up roller
coaster; eight additional roller coasters; "Snake River Falls", one of the
world's tallest water flume rides; Berenstain Bear Country, a 1.2 acre
children's activity area based on the best-selling Random House children's
books created by Stan and Jan Berenstain; "Oceana", which features a live
dolphin and sea lion show in a stadium seating up to 1,600 persons; live
entertainment shows featuring talented college students in three theaters;
the Cedar Point Cinema, which features a film using an IMAX projection
system on a 66-foot by 88-foot screen in a 950-seat theater; an aquarium; a
museum; bathing beach facilities; and "Challenge Park", an extra-charge
attraction which includes a water park named "Soak City", a 36-hole themed
miniature golf area and a Can-Am-style go-kart track. In addition, there
are over 50 restaurants, fast food outlets and refreshment stands, and a
number of gift shops, novelty shops and game areas. All principal rides
and attractions are owned and operated by the Partnership.
Cedar Point also owns and operates the historic Hotel Breakers, which has
496 guest rooms (206 of which were constructed in 1995) in addition to
dining and lounge facilities, a beach, lake swimming, a conference/meeting
center and two outdoor pools. In addition, Cedar Point offers the
lakefront Sandcastle Suites Hotel, containing 187 suites, each of which
accommodates up to six guests and features a balcony with a lake view.
This hotel includes other amenities such as a beach, lake swimming,
courtyard pool, tennis courts and the Breakwater Cafe, a contemporary
waterfront restaurant. Cedar Point also owns and operates the Cedar Point
Marina, which is one of the largest full-service marinas on the Great
Lakes, providing dockage facilities for over 700 boats, and Camper Village,
which provides sites for approximately 300 recreational vehicles.
The Partnership, through Cedar Point Bridge Company, its wholly-owned
subsidiary, owns and operates the Cedar Point Causeway across Sandusky Bay.
This causeway is a major access route to Cedar Point. The Partnership also
owns dormitory facilities located near the park which house up to 2,500 of
the park's approximately 3,800 seasonal employees.
VALLEYFAIR PARK
Valleyfair, which opened in 1976 and was acquired by CPI in 1978, is
located near Minneapolis-St. Paul in Shakopee, Minnesota, and is the
largest amusement park in Minnesota. Valleyfair's market area is centered
in Minneapolis-St. Paul, which has a population
of approximately two million, but the park also draws visitors from other
areas in Minnesota and surrounding states with a combined population of
eight million.
Valleyfair is comprised of approximately 35 rides and attractions,
including "Wild Thing", one of the tallest and fastest steel roller
coasters in the world, which is new in 1996, and four other roller
coasters; a water park named "Whitewater Country" which includes "Hurricane
Falls", a large waterslide raft ride and "Splash Station", a children's
water park; "Thunder Canyon", a white-water raft ride; "The Wave", a water
flume ride featuring a guest splash basin; a nostalgic train ride; a giant
ferris wheel; a log flume ride; a 500-seat amphitheater; a kiddie ride
area; "Challenge Park", an extra-charge attraction which includes a Can-Am-
style go-kart track and a 36-hole themed miniature golf area; "Berenstain
Bear Country", an indoor/outdoor children's activity area; and "The
Hydroblaster", a 40-foot tall wet/dry slide, or "water coaster". In
addition, there are over 20 restaurants, fast food outlets and refreshment
stands, and a number of gift shops, novelty shops and game areas.
DORNEY PARK
Dorney Park, which was first developed as a summer resort area in 1884, was
acquired by the Partnership on July 21, 1992 and is located near Allentown
in South Whitehall Township, Pennsylvania. Dorney Park is one of the
largest amusement parks in the Northeast and serves a total market area of
approximately 35 million people. The park's major markets include
Philadelphia, New Jersey, New York, Lancaster, Harrisburg, York, Scranton,
Wilkes-Barre, Hazleton and the Lehigh Valley.
Dorney Park features over 50 rides and attractions, including the
"Hercules", a world-class wooden roller coaster; two additional roller
coasters; "White Water Landing", one of the world's tallest water flume
rides featuring a guest splash basin; "Thunder Canyon", a white-water
rafting ride; a train ride named the "Cedar Creek Cannonball"; "Wildwater
Kingdom", one of the largest water parks in the United States featuring
twelve water slides, including the "Pepsi Aquablast", the longest elevated
waterslide in the world, a giant wave pool and two children's activity
areas; "Thunder Creek Mountain", a water flume ride; a giant ferris wheel;
a kiddie area featuring "Chester Cheetah's Playland"; live musical shows
featuring talented college students; "Thrills Unlimited", an extra-charge
attraction which includes a go-kart track and two 18-hole themed miniature
golf areas; the "Red Garter Saloon", an 1890's style restaurant and saloon
featuring live shows; "Berenstain Bear Country", a major children's
activity area; and an antique Dentzel carousel carved in 1921. In
addition, there are over 30 restaurants, fast food outlets and refreshment
stands, and a number of gift shops, novelty shops and game areas.
WORLDS OF FUN / OCEANS OF FUN
Worlds of Fun, which opened in 1973, and Oceans of Fun, the adjacent water
park which opened in 1982, were acquired by the Partnership on July 28,
1995. Located in Kansas City, Missouri, Worlds of Fun / Oceans of Fun is
one of the largest amusement parks in the Midwest and serves a total market
area of approximately seven million people centered in Kansas City, but
including most of Missouri, as well as portions of Kansas and Nebraska.
Worlds of Fun is a traditional amusement park themed around Jules Verne's
adventure book Around the World in Eighty Days. The park offers more than
50 rides and attractions, including "Timber Wolf", a world-class wooden
roller coaster; two additional roller coasters; "Monsoon", a water flume
ride; "Fury of the Nile", a white-water rafting ride; a 4,000-seat outdoor
amphitheater; live musical shows; and new in 1996, "Detonator", a 185-foot
thrill ride, which launches riders straight up the first twin-tower
structure of its kind in the world. Oceans of Fun, which requires a
separate admission fee, features a wide variety of water attractions
including "The Typhoon", one of the world's longest dual water slides; a
giant wave pool; and several children's activity areas, including
"Crocodile Isle". In addition, there are more than 25 restaurants, fast
food outlets and refreshment stands, and a number of gift shops, novelty
shops and game areas.
WORKING CAPITAL AND CAPITAL EXPENDITURES
The Partnership carries significant receivables and inventories of food and
merchandise during the operating season. Seasonal working capital needs
are met with a revolving credit facility.
The Managing General Partner believes that annual park attendance is to
some extent influenced by the investment in new attractions from year to
year. Capital expenditures are planned on a seasonal basis with the
majority of such capital expenditures incurred in the period after the
parks close in October through May, just prior to the beginning of the next
operating season. Capital expenditures for the calendar year may differ
from amounts identified with a particular operating season because of
timing considerations such as weather conditions, site preparation
requirements and availability of ride components, which result in
accelerated or delayed expenditures around calendar yearends.
COMPETITION
In general, the Partnership competes with all phases of the recreational
industry within its primary market areas of Cleveland, Detroit, Minneapolis-
St. Paul, Philadelphia and Kansas City, including several other amusement/
theme parks in the Partnership's market areas. The Partnership's business
is subject to factors generally affecting the recreational and leisure time
market, such as economic conditions, changes in discretionary spending
patterns and weather conditions.
In Cedar Point's major markets, its primary amusement park competitors are
Paramount Kings Island in southern Ohio, and Sea World of Ohio and Geauga
Lake near Cleveland.
Camp Snoopy, an indoor amusement park at the Mall of America which opened
in Minneapolis in 1992, is located approximately 15 miles from Valleyfair
and is the park's only nearby direct competitor. Adventureland, a theme
park in Des Moines, Iowa, is located approximately 250 miles from
Valleyfair.
Dorney Park faces the greatest competition of all the Company's parks, with
Hershey Park in central Pennsylvania and Six Flags Great Adventure in the
New Jersey / New York are being the major competitors in its market area.
In Worlds of Fun's major markets, its primary amusement park competitors
are Six Flags Over Mid-America in eastern Missouri and Silver Dollar City
in southern Missouri.
The principal competitive factors in the amusement park industry include
the uniqueness and perceived quality of the rides and attractions in a
particular park, its proximity to metropolitan areas, the atmosphere and
cleanliness of the park and the quality and variety of the food and
entertainment available. The Partnership believes that its amusement parks
feature a sufficient quality and variety of rides and attractions,
restaurants, gift shops and family orientation to make them highly
competitive with other parks.
GOVERNMENT REGULATION
All rides are run and inspected daily by both the Partnership's maintenance
and rides operation departments before being put into operation. The parks
are also periodically inspected by the Partnership's insurance carrier and,
at Cedar Point and Dorney Park, by state ride safety inspectors.
EMPLOYEES
The Partnership has approximately 600 full-time employees. During the
operating season, Cedar Point, Valleyfair, Dorney Park and Worlds of Fun
have approximately 3,800, 1,200, 2,600 and 2,200 seasonal employees,
respectively, most of whom are college students. Approximately 2,500 of
Cedar Point's seasonal employees live in dormitories owned by the
Partnership. The Partnership maintains training programs for all new
employees, and believes that its relations with its employees are good.
ITEM 2. PROPERTIES.
Cedar Point is located on approximately 365 acres owned by the Partnership
on the Cedar Point peninsula in Sandusky, Ohio. The Partnership also owns
approximately 60 acres of property on the mainland adjoining the approach
to the Cedar Point Causeway. Two seasonal employee housing complexes and a
fast-food restaurant owned and operated by the Partnership are located on
the adjoining property.
The Partnership controls, through ownership or an easement, a six-mile
public highway and owns approximately 38 acres of vacant land adjacent to
this highway, which is a secondary access route to Cedar Point and serves
about 250 private residences. The roadway is maintained by the Partnership
pursuant to deed provisions. The Cedar Point Causeway, a four-lane roadway
across Sandusky Bay, is the principal access road to Cedar Point and is
owned by Cedar Point Bridge Company, a subsidiary of the Partnership.
At Valleyfair approximately 118 acres have been developed, and
approximately 75 additional acres remain available for future expansion.
Dorney Park is situated on approximately 190 acres, including 41 acres of
vacant land that the Partnership acquired in 1992, primarily for additional
parking. The Partnership plans to continue to develop the area located
between the amusement park and the water park, previously used for guest
parking, by adding new rides and attractions over the next several years.
At Worlds of Fun / Oceans of Fun approximately 230 acres have been
developed, and approximately 80 additional acres remain available for
future expansion.
The Partnership, through its subsidiary Cedar Point of Michigan, Inc., owns
approximately 450 acres of land in Southern Michigan.
All of the Partnership's property is owned in fee simple without
encumbrance. The Partnership considers its properties to be well
maintained, in good condition and adequate for its present uses and
business requirements.
ITEM 3. LEGAL PROCEEDINGS.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S DEPOSITARY UNITS AND RELATED
UNITHOLDER MATTERS.
Cedar Fair, L.P. Depositary Units representing limited partner interests
are listed for trading on The New York Stock Exchange (trading symbol =
FUN). The cash distributions declared and the high and low prices of the
Partnership's units are shown in the table below:
1995 Distribution High Low
1st Quarter $.5625 32 3/4 28 1/8
2nd Quarter .5625 32 1/8 29 1/2
3rd Quarter .5750 32 1/4 29 7/8
4th Quarter .5750 37 1/8 30 1/2
1994 Distribution High Low
1st Quarter $.50 36 5/8 32 3/8
2nd Quarter .50 34 1/4 32 1/4
3rd Quarter .5625 32 5/8 30 7/8
4th Quarter .5625 32 26 3/4
ITEM 6. SELECTED FINANCIAL DATA
For the years ended December 31,
1995(1) 1994(2) 1993(3) 1992(4) 1991
(In thousands except amounts per unit and per capita)
OPERATING DATA
Net revenues $218,197 $198,358 $178,943 $152,961 $127,950
Operating income 73,013 68,016 57,480 49,111 42,394
Net income 66,136 62,825 61,879 42,921 35,975
Per limited
partner unit (5) 2.90 2.79 2.75 1.96 1.68
FINANCIAL POSITION
Total assets $274,717 $223,982 $218,359 $209,472 $142,532
Working capital
(deficit) (27,843) (25,404) (22,365) (19,028) (14,616)
Long-term debt 80,000 71,400 86,800 89,700 65,900
Partners' equity 151,476 115,054 99,967 81,333 55,132
DISTRIBUTIONS
DECLARED
Per limited
partner unit $2.275 $2.125 $1.925 $1.725 $1.525
OTHER DATA
Depreciation and
amortization $16,742 $14,960 $14,473 $12,421 $10,314
Cash flow from
operating
activities 84,565 81,093 69,243 56,034 46,275
Capital
expenditures 28,520 19,237 23,813 15,934 10,333
Combined
attendance 6,304 5,918 5,511 4,857 4,088
Combined guest
per capita
spending(6) $30.29 $30.04 $28.86 $27.98 $27.84
NOTE 1 - Worlds of Fun/Oceans of Fun is included in 1995 data for the
period subsequent to its acquisition on July 28, 1995.
NOTE 2 - The 1994 operating results include non-recurring gains of $2.1
million relating to insurance claim settlements, partially offset
by a $0.7 million charge to interest expense for refinancing of
long-term debt.
NOTE 3 - The 1993 operating results include a non-recurring credit for
deferred taxes of $11.0 million, or $0.49 per unit.
NOTE 4 - Dorney Park & Wildwater Kingdom is included in 1992 data for the
period subsequent to its acquisition on July 21, 1992.
NOTE 5 - Net income per limited partner unit is computed based on the
weighted average number of units outstanding.
NOTE 6 - Guest per capita spending includes all amusement park, causeway
tolls and parking revenues for the amusement park operating
season. Revenues from water parks, marina, hotel, campground
and other out-of-park operations are excluded from these
statistics. Per capita amounts for the years 1991 - 1994 have
been revised to exclude certain extra-charge attraction revenues
for consistency with the 1995 presentation.
As of February 16, 1996, there were approximately 9,800 registered
unitholders of Cedar Fair, L.P. Depositary Units, representing limited
partner interests.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
Net revenues for the year ended December 31, 1995 were $218.2 million, a
10% increase over the year ended December 31, 1994. This followed an 11%
increase in 1994, when revenues rose to $198.4 million from $178.9 in 1993.
Net revenues for 1995 reflect an increase of 7% in combined attendance
(from 5.9 million to 6.3 million), a 1% increase in combined guest per
capita spending, and a 31% increase in out-of-park revenues, principally
from hotel and water park expansions. Operating results for 1995 were
favorably impacted by Worlds of Fun/Oceans of Fun for the period since it
was acquired on July 28, 1995. Excluding the acquisition, net revenues for
1995 would have increased 4% to $206.8 million, reflecting a 3% increase in
guest per capita spending and a slight decrease in attendance from 1994's
record level at our original three parks. The combined attendance at our
original three parks is encouraging, particularly following a year in which
a very popular new roller coaster was introduced at Cedar Point, and after
an unusually cold and rainy Spring at Valleyfair and Dorney Park. In 1994,
combined attendance increased 7% to 5.9 million as Cedar Point achieved a
record year with favorable weather and the very successful debut of the
Raptor inverted roller coaster. In 1993, in spite of Valleyfair's 16%
attendance decline caused by prolonged rains and flooding in the
Minneapolis area, combined attendance increased 13% to 5.5 million from 4.9
million. Combined guest per capita spending increased 4% in 1994 and 3% in
1993.
For 1996, the Partnership plans to invest $30 million in capital
improvements, including world-class roller coasters at both Cedar Point and
Valleyfair, and we are optimistic that these major attractions, as well as
other investments at each of the parks, will generate a high level of
public interest and acceptance. However, stable population trends in our
market areas and uncontrollable factors, such as weather (as was the case
at Valleyfair in 1993) and the economy, preclude us from anticipating
significant long-term increases in attendance at our parks.
Historically, the Partnership has been able to improve its
profitability by continuing to make substantial investments in its parks.
This has enabled us to maintain a consistently high attendance level as
well as steady increases in guest per capita spending and revenues from
guest accommodations at Cedar Point, while carefully controlling operating
and administrative expenses.
The acquisition of Worlds of Fun/Oceans of Fun will continue to have a
material effect on the Partnership's financial condition and results of
operations in 1996, primarily due to the inclusion of a full year of
operations. We also believe this park has strong potential for increased
profitability.
Excluding Worlds of Fun/Oceans of Fun, costs and expenses before
depreciation and amortization in 1995 increased to $120.3 million from
$115.4 million in 1994. Included in costs and expenses are approximately
$3.9 million of incentive fees earned by the managing general partner
relating to 1995 cash distributions, which exceeded the minimum
distributions as defined in the partnership agreement by 94.5 cents per
unit or $21.6 million in the aggregate. This compares to $3.4 million and
$2.7 million of incentive fees in 1994 and 1993, respectively. On a
comparable basis, the ratio of costs and expenses (before incentive fees,
depreciation and amortization) to net revenues for 1995 decreased from
56.5% to 56.3%, primarily because many of our operating and administrative
expenses have been kept relatively fixed. These same costs and expenses
decreased from 58.0% in both 1993 and 1992.
Operating income increased 7% in 1995 to $73.0 million, following an 18%
increase in 1994 and a 17% increase in 1993. The 1995 increase in operating
income included a $2.1 million contribution from Worlds of Fun/Oceans of
Fun for the period after its acquisition. Operating income in 1994
increased as a result of a record year at Cedar Point, along with
Valleyfair rebounding strongly from 1993. Increased attendance and guest
per capita spending in 1993 at Cedar Point, which more than offset
Valleyfair's decrease, and Dorney Park's first full year, generated the
increase in operating income for 1993.
Net income for 1995 increased 5% to $66.1 million from $62.8 million in
1994 and $61.9 million in 1993. Net income for 1994 included non-recurring
gains of $2.1 million related to insurance claim settlements, partially
offset by a $0.7 million charge to interest expense for refinancing of long-
term debt. Net income for 1993 included an $11 million one-time, non-cash
credit for deferred taxes. Excluding the acquisition of Worlds of
Fun/Oceans of Fun and non-recurring items, net income in 1995 increased 4%
to $64.0 million from $61.4 million in 1994, which was up 21% from $50.9
million in 1993.
Financial Condition
The Partnership ended 1995 in sound financial condition in terms of both
liquidity and cash flow. In our highly seasonal business with investment
heavily concentrated in property and equipment, the negative working
capital ratio of 3.8 at December 31, 1995 is financially advantageous.
Receivables and inventories are at normally low seasonal levels and credit
facilities are in place to fund current liabilities and pre-opening
expenses as required.
In 1995, cash generated from operations totaled $84.6 million. The
Partnership used $28.5 million for capital expenditures, $51.2 million for
distributions to the general and limited partners and $5.3 million for the
reduction of debt. Distributions in 1996, at the current annual rate of
$2.30 per unit, would total approximately $53.3 million, 4% higher than the
distributions paid in 1995.
The Partnership has available through April 1998 a $95 million revolving
credit facility, of which $30.0 million was borrowed and in use as of
December 31, 1995. The maximum level of borrowings during 1995 on this
facility was $79.8 million. Credit facilities and cash flow are expected to
be adequate to meet seasonal working capital needs, planned capital
expenditures and distribution requirements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Partners of Cedar Fair, L.P.:
We have audited the accompanying consolidated balance sheets of Cedar Fair,
L.P. (a Delaware limited partnership) and subsidiaries as of December 31,
1995 and 1994, and the related consolidated statements of operations,
partners' equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Cedar Fair, L.P. and
subsidiaries as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1995 in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Cleveland, Ohio,
January 22, 1996.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per unit data)
For the years ended December 31, 1995 1994 1993
Net revenues:
Admissions $112,582 $100,532 $89,664
Food, merchandise and games 91,529 85,898 77,934
Accommodations and other 14,086 11,928 11,345
218,197 198,358 178,943
Cost and expenses:
Cost of products sold 22,880 21,113 19,525
Operating expenses 80,801 72,924 66,347
Selling, general and
administrative 24,761 21,345 21,118
Depreciation and amortization 16,742 14,960 14,473
145,184 130,342 121,463
Operating income 73,013 68,016 57,480
Insurance claim settlements -- 2,102 --
Interest expense, net 6,877 7,293 6,601
Deferred tax credit -- -- (11,000)
Net income $66,136 $62,825 $61,879
Net income allocated to general
partners 661 628 619
Net income allocated to limited
partners $65,475 $62,197 $61,260
Weighted average limited
partner units outstanding 22,607 22,267 22,252
Net income per limited partner
unit $2.90 $2.79 $2.75
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
CONSOLIDATED BALANCE SHEET
(In thousands)
December 31, 1995 1994
Assets
Current Assets:
Cash $111 $350
Receivables 2,468 1,350
Inventories 4,387 3,416
Prepaids 2,839 3,082
Total current assets 9,805 8,198
Land, Buildings and Equipment:
Land 27,999 22,675
Land improvements 36,617 31,366
Buildings 88,910 70,259
Rides and equipment 205,364 174,450
Construction in progress 8,047 4,503
366,937 303,253
Less accumulated depreciation (113,097) (98,922)
253,840 204,331
Intangibles, net of amortization 11,072 11,453
$274,717 $223,982
Liabilities and Partners' Equity
Current Liabilities:
Accounts payable $6,409 $5,728
Distribution payable to partners 13,335 12,636
Accrued interest 1,685 1,595
Accrued taxes 2,889 2,757
Accrued salaries, wages and benefits 4,601 3,241
Self-insurance reserves 6,402 6,087
Other accrued liabilities 2,327 1,558
Total current liabilities 37,648 33,602
Other Liabilities 5,593 3,926
Long-Term Debt:
Revolving credit loans 30,000 21,400
Term debt 50,000 50,000
80,000 71,400
Partners' Equity:
Special L.P. interests 5,290 5,290
General partners 531 389
Limited partners, 22,960,208 and
22,240,208 units outstanding in 1995
and 1994, respectively 145,655 109,375
151,476 115,054
$274,717 $223,982
The accompanying Notes to Consolidated Financial Statements are an integral
part of these balance sheets.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the years ended December 31, 1995 1994 1993
Cash Flows From (For) Operating Activities
Net income $66,136 $62,825 $61,879
Adjustments to reconcile net income to net
cash from operating activities
Depreciation and amortization 16,742 14,960 14,473
Deferred tax credit -- -- (11,000)
Change in assets and liabilities, net of
effects from acquisition of Worlds of
Fun/Oceans of Fun:
Decrease in inventories 670 86 449
Decrease (increase) in current and other
assets 267 (1,311) 131
Increase (decrease) in accounts payable (2,188) 695 140
Increase in self-insurance reserves 315 1,903 1,102
Increase in other current liabilities 956 349 791
Increase in other liabilities 1,667 1,586 1,278
Net cash from operating activities 84,565 81,093 69,243
Cash Flows From (For) Investing Activities
Capital expenditures (28,520) (19,237) (23,813)
Acquisition of Worlds of Fun/Oceans of Fun:
Land, buildings, rides and equipment
acquired (37,350) -- --
Negative working capital assumed, net of
cash acquired 1,481 -- --
Net cash (for) investing activities (64,389) (19,237) (23,813)
Cash Flows From (For) Financing Activities
Net payments on revolving credit loans (5,303) (15,400) (2,900)
Distributions paid to partners (51,245) (46,334) (42,403)
Acquisition of Worlds of Fun/Oceans of Fun:
Borrowings on revolving credit loans for
refinancing of assumed long-term debt 13,903 -- --
Issuance of limited partnership units 22,230 -- --
Net cash (for) financing activities (20,415) (61,734) (45,303)
Cash:
Net increase (decrease) for the period (239) 122 127
Balance, beginning of period 350 228 101
Balance, end of period $111 $350 $228
Supplemental Information:
Cash payments for interest expense $6,787 $7,039 $6,622
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
(In thousands)
Special General Limited Total
L.P. Partners' Partners' Partners'
Interests Equity Equity Equity
Balance at December 31, 1992 $5,290 $51 $75,992 $81,333
Allocation of net income -- 619 61,260 61,879
Partnership distributions
declared ($1.925 per limited
partner unit) -- (432) (42,813) (43,245)
Balance at December 31, 1993 5,290 238 94,439 99,967
Allocation of net income -- 628 62,197 62,825
Partnership distributions
declared ($2.125 per limited
partner unit) -- (477) (47,261) (47,738)
Balance at December 31, 1994 $5,290 $389 $109,375 $115,054
Issuance of 720,000 limited
partnership units, for
acquisition of Worlds of
Fun/Oceans of Fun -- -- 22,230 22,230
Allocation of net income -- 661 65,475 66,136
Partnership distributions
declared ($2.275 per limited
partner unit) -- (519) (51,425) (51,944)
Balance at December 31, 1995 $5,290 $531 $145,655 $151,476
The accompanying Notes to Consolidated Financial Statements are an integral
part of these statements.
(1) Partnership Organization:
Cedar Fair, L.P. (the "Partnership") is a Delaware limited partnership,
which commenced operations in 1983 when it acquired Cedar Point, Inc.
("CPI"). In 1987, 16 million limited partnership units were sold to the
public and 5,162,000 units were held by the original limited partners of
the Partnership. In 1992, the Partnership issued an additional 1,078,208
limited partnership units in connection with the acquisition of Dorney Park
& Wildwater Kingdom. These 22,240,208 units are listed on the New York
Stock Exchange.
On July 28, 1995, the Partnership issued 720,000 limited partnership units
in connection with the acquisition of Worlds of Fun/Oceans of Fun, as
discussed in Note 7. These units have not been registered with the
Securities and Exchange Commission, and are subject to certain trading
restrictions for a period of three years. Net income per limited partner
unit has been computed based on the weighted average units outstanding.
The Partnership's two General Partners are (a) Cedar Fair Management
Company, an Ohio corporation owned by the Partnership's executive
management (the "Managing General Partner") and (b) CF Partners (the
"Special General Partner"), a Delaware general partnership whose equal
partners are two former Directors and a Trust, whose co-trustee is Director
Mary Ann Jorgenson. Mrs. Jorgenson is a partner in the law firm which
serves as the Partnership's general counsel.
The Managing and Special General Partners each own a 0.5% general partner
interest in the Partnership's income and losses, except in defined
circumstances. The Managing General Partner has full control over all
activities of the Partnership. For the services it provides, the Managing
General Partner earns a fee equal to .25% of the Partnership's net
revenues, as defined, and also earns incentive compensation when quarterly
distributions exceed certain levels as defined in the Partnership
Agreement. The Managing General Partner earned $4,430,000, $3,874,000 and
$3,176,000 of such fees in 1995, 1994 and 1993, respectively. The Special
General Partner receives a fixed annual amount of $800,000 for its
services, which includes its share of cash distributions.
The General Partners may, with the approval of a specified percentage of
the limited partners, make additional capital contributions to the
Partnership, but are only obligated to do so if the liabilities of the
Partnership cannot otherwise be paid or there exists a negative balance in
their capital account at the time of their withdrawal from the Partnership.
The Managing General Partner, in accordance with the terms of the
Partnership
Agreement, is required to make regular cash distributions on a quarterly
basis of all the Partnership's available cash, as defined.
(2) Summary Of Significant Accounting Policies:
The following policies are used by the Partnership in its preparation of
the accompanying financial statements.
Principles Of Consolidation - The consolidated financial statements include
the accounts of the Partnership and its wholly-owned corporate
subsidiaries. All significant intercompany transactions and balances are
eliminated in consolidation.
Estimates- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and
expenses during each period. Actual results could differ from those
estimates.
Inventories - All inventories are valued at the lower of first-in, first-
out cost or market. The Partnership's inventories primarily represent
purchased products, such as merchandise and food, for sale to its
customers.
Depreciation - The Partnership's policy is to provide depreciation on a
straight-line basis over the estimated useful lives of its assets. The
composite method is used for the group of assets acquired as a whole from
CPI in 1983, for the Dorney Park & Wildwater Kingdom assets acquired in
1992 and for the Worlds of Fun/Oceans of Fun assets acquired in 1995. The
unit method is used for all individual assets subsequently purchased.
Under the composite depreciation method, assets with similar estimated
lives are grouped together and the several pools of assets are depreciated
on an aggregate basis. Gains and losses on the retirement of assets,
except those related to abnormal retirements, are credited or charged to
accumulated depreciation. Accumulated gains and losses on asset
retirements under the composite depreciation method have not been
significant.
Under the unit method of depreciation, individual assets are depreciated
over their estimated useful lives with gains and losses on all asset
retirements recognized currently in income.
The weighted average useful lives combining both methods are approximately:
Land improvements 23 Years
Buildings 28 Years
Rides 17 Years
Equipment 10 Years
Segment Reporting - The Partnership is in the single business of operating
amusement parks with accompanying resort facilities.
Income Taxes - The accompanying statements of operations do not include a
provision for current federal or state income taxes, as the income of the
Partnership is not taxed directly; rather, the Partnership's tax attributes
are included in the individual tax returns of its partners. Neither the
Partnership's financial reporting income, nor the distributions to
unitholders, can be used as a substitute for the detailed tax calculations
which the Partnership must perform annually for its partners. The tax
returns of the Partnership are subject to examination by state and federal
tax authorities. If such examinations result in changes to taxable income,
the tax liability of the partners could be changed accordingly.
The Omnibus Budget Reconciliation Act of 1993 (the "Act") was signed into
law in August 1993. Among other provisions, the Act allows taxpayers who
acquire an interest in an intangible asset to deduct its amortization over
a 15-year period beginning the month in which the intangible asset is
acquired. This provision extends to the acquisition of partnership
interests, to the extent that taxpayers obtain an increased basis for the
intangible assets of the partnership. The effect of the Act on taxpayers
acquiring Cedar Fair, L.P. units at market prices is to provide
amortization deductions which offset a substantial portion of the taxable
income otherwise allocable by the Partnership to these units for the next
several years. The amortization deductions will be recaptured and taxed as
ordinary income upon sale of the Partnership units. These rules generally
were effective for purchases of Partnership units after August 10, 1993,
but transitional relief in the Act permitted partners to elect to apply the
new rules to all units acquired after July 25, 1991.
The Revenue Act of 1987 provides that a "publicly traded partnership," such
as Cedar Fair, L.P., will be treated as a corporation for federal income
tax purposes beginning January 1, 1998, including the payment of corporate
income taxes. The partners' remaining unamortized basis in the
Partnership's tangible and intangible assets may be transferred to a
corporate successor entity. This aggregate tax basis would then be
amortizable for tax purposes by the new corporation to substantially reduce
its future corporate taxable income.
The amount of the tax basis available to a successor corporation will
depend on the price and volume of trading in the Partnership's units
through the date of its conversion to corporate status. In 1993,
management concluded that the amount of intangible assets resulting from
purchases of limited partner units during 1993 was sufficient to offset the
estimated amount of deferred income taxes otherwise requiring recognition
by the Partnership under Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes." Accordingly, the deferred income taxes
totaling $11 million recorded in connection with the 1992 acquisition of
Dorney Park & Wildwater Kingdom were reversed and credited to income in
1993.
The 1987 legislation also provides that net income from the Partnership is
not treated as "passive income" for federal income tax purposes. As a
result, partners subject to the passive activity loss rules are not
permitted to offset income from the Partnership with passive losses from
other sources.
(3) Long-Term Debt:
At December 31, 1995 and 1994, long-term debt consisted of the following:
[CAPTION] 1995 1994
(In thousands)
[S] [C] [C]
$ 30,000 $ 21,400
Revolving credit loans 50,000 50,000
Term debt $ 80,000 $ 71,400
Revolving Credit Loans - The Partnership is party to a revolving credit
agreement with three banks under which it has available a $95 million
credit facility through April 30, 1998. Borrowings under this credit
facility were $30.0 million as of December 31, 1995. The maximum
outstanding balance during 1995 was $79.8 million.
Borrowings under this agreement bear interest at the banks' prime lending
rate, with LIBOR and other rate options. The agreement requires the
Partnership to pay a commitment fee of 1/5% per annum on the daily unused
portion of the credit. The Partnership, at its option, may make
prepayments without penalty and reduce this loan commitment.
Term Debt - In August 1994, the Partnership refinanced its $50 million in
senior notes, reducing the interest rate to 8.43%. In connection with this
refinancing, the Partnership incurred a $0.7
million prepayment penalty which is included in 1994 interest expense. The
Partnership is required to make annual repayments of $10 million in August
2002 through August 2006 and may make prepayments with defined premiums.
The fair value of the aggregate future repayments on these senior notes at
December 31, 1995, as required by Statement of Financial Accounting
Standards No. 107, would be approximately $57.7 million, applying a
discount rate of 6.4%.
Covenants - Under the terms of the credit agreements, the Partnership,
among other restrictions, is required to maintain a specified level of net
tangible assets, as defined, and comply with certain cash flow, interest
coverage, and debt to net worth limits.
(4) Special L.P. Interests:
In accordance with the Partnership Agreement, the original limited partners
were allocated $5.3 million of 1987 and 1988 taxable income (without any
related cash distributions) for which they received Special L.P. Interests.
The Special L.P. Interests do not participate in cash distributions and
have no voting rights. However, the holders of Special L.P. Interests will
receive in the aggregate $5.3 million upon liquidation of the Partnership.
(5) Retirement Plans:
The Partnership has trusteed, noncontributory retirement plans for the
majority of its employees. Contributions are discretionary and were
$1,140,000 in 1995, $1,120,000 in 1994 and $1,165,000 in 1993.
The Partnership also has an Employees' Savings and Investment Plan under
which nonunion employees can contribute specified percentages of their
salary, matched up to a limit by the Partnership. Contributions by the
Partnership to this plan approximated $352,000 in 1995, $359,000 in 1994,
and $352,000 in 1993.
In addition, approximately 125 employees are covered by union-sponsored,
multi-employer pension plans for which approximately $298,000, $294,000 and
$276,000 were contributed for the years ended December 31, 1995, 1994 and
1993, respectively. The Partnership believes that, as of December 31,
1995, it would have no withdrawal liability as defined by the Multi-
employer Pension Plan Amendments Act of 1980.
In 1992, the Partnership amended its policy for payment of fees earned by
the Managing General Partner to permit a portion of such fees to be
deferred for payment after retirement or over certain vesting periods as
established by the Board of Directors.
Payment will be made in a combination of limited partnership units and
cash. The amounts deferred were $1,782,600 in 1995, $1,235,800 in 1994 and
$720,000 in 1993, including the value of 36,831, 27,991 and 10,588 limited
partnership units issuable in future years, which are included in the
calculation of weighted average units outstanding. Amounts not payable
within 12 months of the balance sheet date are included in Other
Liabilities.
(6) Contingencies:
The Partnership is a party to a number of lawsuits arising in the normal
course of business. In the opinion of management, these matters will not
have a material effect in the aggregate on the Partnership's financial
statements.
(7) Acquisition:
At the close of business on July 28, 1995, the Partnership acquired
substantially all of the assets of Worlds of Fun and Oceans of Fun, located
in Kansas City, Missouri, in a transaction valued at $40.0 million. Worlds
of Fun is a traditional, family-oriented amusement park and Oceans of Fun
is one of the largest water parks in the Midwest.
The purchase price consisted of the assumption of approximately $17 million
of liabilities and the issuance of 720,000 unregistered limited partnership
units (recorded at the July 28 NYSE closing price of $30.875, or $22.2
million in the aggregate). The Partnership subsequently repaid $13.9
million of long-term debt assumed with revolving credit borrowings at lower
rates.
Worlds of Fun and Oceans of Fun's assets, liabilities and results of
operations since July 28, 1995 are included in the accompanying
consolidated financial statements. The acquisition has been accounted for
as a purchase, and accordingly the purchase price has been allocated to
assets and liabilities acquired based upon their fair values at the date of
acquisition.
The table below summarizes the unaudited consolidated pro forma results of
operations assuming the acquisition had occurred at the beginning of each
of the periods presented, with adjustments primarily attributable to
interest expense relating to the refinancing of long-term debt and
depreciation expense relating to the fair value of assets acquired.
[CAPTION]
Years Ended December 31, 1995 1994
(In thousands except amounts per unit)
[S] [C] [C]
Net revenues $ 236,432 $229,986
Net income $ 66,083 $ 67,151
Net income per
limited partner unit $ 2.84 $ 2.89
These pro forma results have been prepared for comparative purposes only
and do not purport to be indicative of what would have occurred had the
acquisition been made at the beginning of the periods presented, or of
results which may occur in the future.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.
Cedar Fair Management Company, an Ohio corporation owned by the
Partnership's executive management consisting of 19 individuals, is the
Managing General Partner of the Partnership and has full responsibility for
the management of the Partnership. CF Partners, a Delaware general
partnership, is the Special General Partner of the Partnership.
Collectively, the Managing General Partner and the Special General Partner
are called the General Partners. For additional information, including the
fees paid to the General Partners for services rendered during 1995,
attention is directed to Note 1 to the consolidated financial statements on
page 11 in the Registrant's 1995 Annual Report to Unitholders, which note
is incorporated herein by this reference.
Directors:
Name Age Position with Managing General
Partner
Richard L. Kinzel 55 President, Chief Executive
Officer, Director since 1986
Lee A. Derrough* 51 Director since 1995
Mary Ann Jorgenson* 55 Director since 1988
Donald H. Messinger* 52 Director since 1993
James L. Miears 60 Executive Vice President and
General Manager-Cedar Point,
Director since 1993
Thomas A. Tracy* 64 Director since 1993
* Member of Audit and Compensation Committees
The Board of Directors of the Managing General Partner has a Compensation
Committee and an Audit Committee. The Compensation Committee reviews the
Partnership's compensation and employee benefit policies and programs and
recommends related actions, as well as executive compensation decisions, to
the Board of Directors. The Audit Committee meets periodically with the
Partnership's independent auditors, reviews the activities of the
Partnership's internal audit staff, considers the recommendations of the
independent and internal auditors, and reviews the annual financial
statements upon completion of the audit.
Each director of the Managing General Partner is elected for a one-year
term.
Executive Officers:
Name Age Position with Managing General Partner
Richard L. Kinzel 55 President and Chief Executive Officer
since 1986
John R. Albino 49 Vice President-General Manager-Dorney
Park since 1995
Richard J. Collingwood 56 Corporate Vice President-General
Services since 1992
Jacob T. Falfas 44 Vice President-Park Operations-Cedar
Point since 1993
H. John Hildebrandt 46 Vice President-Marketing-Cedar Point
since 1993
Bruce A. Jackson 44 Corporate Vice President-Finance and
Chief Financial Officer since 1992
Lee C. Jewett 61 Corporate Vice President-Planning &
Design since 1990
Daniel R. Keller 46 Vice President-General Manager-Worlds of
Fun since 1995
James L. Miears 60 Executive Vice President-General Manager-
Cedar Point since 1993
Thomas W. Salamone 51 Treasurer since 1982
Alan L. Schwartz 46 Vice President-Finance-Valleyfair since
1978
Linnea Stromberg-Wise 50 Vice President-Marketing-Valleyfair
since 1995
Joseph L. von der Weis 63 Vice President-Accommodations-Cedar
Point since 1973
Walter R. Wittmer 55 Vice President-General Manager-
Valleyfair since 1988
BUSINESS EXPERIENCE.
Directors:
Richard L. Kinzel has served as president and chief executive officer since
1986. Mr. Kinzel has been employed by the Partnership or its predecessor
since 1972, and from 1978 to 1986 he served as vice president and general
manager of Valleyfair.
Lee A. Derrough is President and Chief Executive Officer of Hunt Midwest
Enterprises, Inc., and has been associated with the Hunt companies since
1967. Mr. Derrough was elected as a director in 1995 pursuant to the
Contribution Agreement dated July 28, 1995, which entitles Hunt Midwest
Enterprises, Inc. to appoint a representative on the Board of Directors so
long as it owns more than 690,000 units of Cedar Fair, L.P. Mr. Derrough
is also a past president of the International Association of Amusement
Parks and Attractions.
Mary Ann Jorgenson is a partner in the law firm of Squire, Sanders &
Dempsey, the Partnership's General Counsel, and has been associated with
the firm since 1975. Mrs. Jorgenson is also co-trustee of a Trust which is
a general partner in CF Partners, the Partnership's Special General
Partner. She is also a director of S 2 Golf Inc. (manufacturer and
distributor of golf clubs and bags) and is a director and Secretary of
Essef Corporation (manufacturer of plastic pressure vessels for the water
treatment and systems industry; spa and pool equipment; and containers for
hazardous waste transportation).
Donald H. Messinger is the Partner-in-Charge of the Cleveland office of the
law firm of Thompson, Hine & Flory P.L.L. and has been associated with the
firm since 1968.
James L. Miears has served as Executive Vice President and General Manager
of Cedar Point since 1993. In 1992, he was Senior Vice President-
Merchandise at Cedar Point and prior to 1992 he served as Vice President-
Merchandise of Cedar Point for more than five years.
Thomas A. Tracy is a business consultant and was a partner in the public
accounting firm of Arthur Andersen LLP from 1966 until his retirement in
1989.
Executive Officers:
Richard L. Kinzel. See "Directors" above.
John R. Albino has served as Vice President-General Manager of Dorney Park
& Wildwater Kingdom since 1995. From 1993 to 1995, he served as Vice
President-Food Operations of Cedar Point, and prior to that was Director-
Food Operations for more than five years.
Richard J. Collingwood has served as Corporate Vice President-General
Services since 1992 and has primary responsibility for human resources,
purchasing and security. Prior to 1992, he served as Vice President-
General Services of Cedar Point for more than five years.
Jacob T. Falfas has served as Vice President-Park Operations of Cedar Point
since 1993. Prior to 1993, he served as Director-Park Operations of Cedar
Point for more than five years.
H. John Hildebrandt has served as Vice President-Marketing of Cedar Point
since 1993. Prior to 1993, he served as Director-Marketing of Cedar Point
for more than five years.
Bruce A. Jackson has served as Corporate Vice President-Finance and Chief
Financial Officer since 1992. From 1988 to 1992, he served as Vice
President-Finance and Chief Financial Officer. Mr. Jackson is a certified
public accountant.
Lee C. Jewett has served as Corporate Vice President-Planning & Design
since 1990. Prior to 1990, he served as Director-Planning & Design of
Cedar Point for more than five years.
Daniel R. Keller has served as Vice President-General Manager of Worlds of
Fun / Oceans of Fun since 1995. From 1993 to 1995, he served as Senior
Vice President-Operations of Cedar Point, and prior to that was Vice
President-Operations of Cedar Point for more than five years.
James L. Miears. See "Directors" above.
Thomas W. Salamone has served as Treasurer since 1982.
Alan L. Schwartz has served as Vice President-Finance of Valleyfair since
1978.
Linnea Stromberg-Wise has served as Vice President-Marketing of Valleyfair
since 1995. Prior to 1995, she served as Director-Marketing of Valleyfair
for more than five years.
Joseph L. von der Weis has served as Vice President-Accommodations of Cedar
Point since 1973.
Walter R. Wittmer has served as Vice President-General Manager of
Valleyfair since 1988.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Registrant's directors, executive officers and persons who own more than
ten percent of its Depositary Units ("Insiders") to file reports of
ownership and changes in ownership, within 10 days following the last day
of the month in which any change in such ownership has occurred, with the
Securities and Exchange Commission and the New York Stock Exchange, and to
furnish the Partnership with copies of all such forms they file. The
Partnership understands from the information provided to it by these
individuals that all filing requirements applicable to the Insiders were
adhered to for 1995.
ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensati
Compensation on
(a) (b) (c) (d) (f) (i)
Restricted All
Other
Salary Bonus Unit Compens
Awards ation
Name and Principal Position Year ($) ($) ($) ($)
Richard L. Kinzel, 1995 199,615 497,842 206,281 201,630
President and Chief 1994 189,385 469,298 179,735 200,698
Executive Officer 1993 173,692 396,000 66,000 166,913
James L. Miears, Executive 1995 149,422 271,551 129,425 105,030
Vice President and General 1994 134,423 242,508 97,160 99,698
Manager-Cedar Point 1993 119,827 199,000 31,000 77,813
Walter R. Wittmer, 1995 134,423 244,396 100,483 99,810
Vice President and General 1994 119,615 215,563 68,586 52,698
Manager-Valleyfair 1993 109,692 182,000 31,000 50,313
Daniel R. Keller, 1995 128,654 244,396 55,483 15,130
Vice President and General 1994 119,808 215,563 33,586 15,698
Manager-Worlds of Fun 1993 114,827 168,000 25,000 21,513
Bruce A. Jackson, Corporate 1995 124,808 226,293 97,854 28,830
Vice President-Finance and 1994 119,826 215,563 69,586 17,298
Chief Financial Officer 1993 115,327 191,000 31,500 23,313
[CAPTION]
Notes To Summary Compensation Table:
[S] [C]
Column (f) Restricted Unit Awards. The aggregate number of
restricted Cedar Fair, L.P. depositary units,
representing limited partner interests, awarded to
Messrs. Kinzel, Miears, Wittmer, Keller and Jackson as
of December 31, 1995, together with their market value
at yearend, were 16,858 ($623,746), 9,247 ($342,139),
7,244 ($268,028), 4,325 ($160,025) and 7,286
($269,582), respectively. These units will accrue
additional units on the date of each quarterly
distribution paid by the Registrant, calculated at the
NYSE closing price on that date.
Column (i) All Other Compensation. Comprises amounts accrued
under the following plans:
1. Profit Sharing Retirement Plan - With respect to
1995, $10,510 was credited to the accounts of each of
the named executive officers.
2. Employees' Savings and Investment Plan - With
respect to 1995, $4,620 was credited to the accounts
of each of the named executive officers, with the
exception of Mr. Wittmer, who chose not to
participate in this plan in 1995.
3. Supplemental Retirement Benefits - With respect
to 1995, the amounts credited to the accounts of
Messrs. Kinzel, Miears, Wittmer, Keller and Jackson
were $186,500, $89,900, $89,300, $0 and $13,700,
respectively.
Cash bonuses, restricted unit awards, and supplemental retirement benefits
provided to the Partnership's executive management are reimbursed by the
Managing General Partner out of funds provided by management and incentive
fees and cash distributions from the Partnership.
COMPENSATION OF DIRECTORS.
The Board of Directors establishes the fees paid to Directors and Board
Committee members for services in those capacities. The current schedule
of such fees is as follows:
1. For service as a member of the Board, $15,000 per annum,
payable quarterly, plus $1,000 for attendance at each meeting of the
Board;
2. For service as a Board Committee member, $250 for attendance at
each Committee meeting held on the same date on which the Board of
Directors meets and $1,000 for attendance at any additional
Committee meeting held on a date other than a date on which the
Board of Directors meets; and
3. For service as Chairman of a Committee of the Board, a fee of
$2,500 per annum.
These fees are payable only to non-management Directors. Management
Directors receive no additional compensation for service as a Director.
All Directors receive reimbursement from the Partnership for expenses
incurred in connection with service in that capacity.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS.
Severance Compensation.
All regular, full-time, non-union affiliated employees, including the named
executive officers, who have been employed by the Partnership for at least
one year are eligible for severance compensation under the Cedar Fair, L.P.
Severance Pay Plan. Under the Plan, employees are generally eligible for
severance pay if their employment is terminated due to the elimination of
the job or position, a mutually agreed-upon separation of the employee due
to performance, or a change in ownership which results in replacement of
the employee by the new owner. Upon termination of employment where
severance compensation is payable under the Plan, the employee is entitled
to receive a payment based on the following schedule:
Length of Service Severance Pay
1 year through 10 years One week of pay for each
full year of service
11 years through 30 years Ten weeks pay plus two
weeks of pay for each
full year of service in
excess of 10
31 years or more Fifty-two weeks of pay
In addition, seven executive officers of the Partnership, including each of
the named executive officers, are entitled to severance payments and
continuation of existing insurance benefits if their employment is
terminated within 24 months after any change in control occurs, as defined
in a plan approved by the Board of Directors in 1995. Such severance
payments and benefits range from 1.6 times the last five years' average
cash compensation and 24 months of continued insurance benefits for park
General Managers to three times the last five years' average cash
compensation, less $1, and 36 months of continued insurance benefits, for
the President and Chief Executive Officer.
Restricted Unit Awards.
Restricted unit awards represent the named executive officer's right to
receive newly issued Cedar Fair, L.P. units at specified future dates if
the individual is still employed by the Partnership at that time. The
dollars allocated to each officer are converted to a number of deferred
Partnership units based on the NYSE closing price on the first Monday in
December of the year granted. These units, together with quarterly
distributions thereon, vest in years three through five after date of
grant.
In the event of death, total disability, retirement at age 62 or over,
removal of the Managing General Partner, or a "change-in-control" of the
Partnership (as defined), all accrued units for a participant will become
fully vested and will be issued at the time of such event. Failure to
remain an employee of the Partnership on any vesting date for any other
reason will result in the forfeiture of all unissued deferred units of a
participant.
Supplemental Retirement Benefits.
Supplemental retirement benefits represent the named executive officer's
right to receive benefits from the Partnership upon retirement at age 62 or
over, with a minimum of 20 years' service to the Partnership, its
predecessors and/or successors. Amounts are allocated among the executive
officers as approved by the Compensation Committee of the Board, based on a
target annual retirement benefit (including amounts projected to be
available from the Partnership's profit sharing retirement plan) of 57.5%
of average base salary projected for the three years prior to retirement at
age 65. Each officer's account accrues interest at the prime rate as
established from time to time by the Partnership's lead bank, beginning on
December 1 of the year of grant. Executive officers leaving the employ of
the Partnership prior to reaching age 62 or with less than 20 years of
service will forfeit their entire balance. In the event of death, total
disability, retirement at age 62 or over with at least 20 years' service,
or removal of the Managing General Partner (unless
resulting from reorganization of the Partnership into corporate form), all
amounts accrued will become immediately and fully vested and payable to the
executive officers. In the event of a "change-in-control" (as defined),
all amounts accrued will become fully vested and will be funded in a trust,
for the benefit of the executive officers when they reach age 62, die, or
become totally disabled, whichever occurs first. At each executive
officer's option, the accrued balance may be distributed in a lump sum or
in a number of future payments over a period not to exceed 10 years.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
A. Security Ownership of Certain Beneficial Owners.
According to information obtained by the Partnership from Schedule 13G
filings with the Securities and Exchange Commission concerning the
beneficial ownership of its units (determined in accordance with the rules
of the Securities and Exchange Commission), there were no parties known to
the Partnership to own more than 5 percent of its Depositary Units
representing limited partner interests as of February 16, 1996.
B. Security Ownership of Management.
The following table sets forth the number of Depositary Units representing
limited partner interests beneficially owned by each Director and named
executive officer and by all officers and Directors as a group as of
February 16, 1996.
Amount and Nature of Beneficial Ownership
Investment Percent
Beneficial Power Voting Power of
Name of Beneficial Owner Ownership Sole Shared Sole Shared Units
Richard L. Kinzel (1) 290,349 97,239 193,110 97,239 193,110 1.3
Lee A. Derrough 1,000 1,000 -0- 1,000 -0- *
Mary Ann Jorgenson (2) 382,388 200 382,188 200 382,188 1.7
Donald H. Messinger 222 222 -0- 222 -0- *
James L. Miears (1) 216,396 18,928 197,468 18,928 197,468 *
Thomas A. Tracy 2,375 1,114 1,261 1,114 1,261 *
Walter R. Wittmer (3) 10,174 10,024 150 10,024 150 *
Daniel R. Keller (1) 214,157 22,647 191,510 22,647 191,510 *
Bruce A. Jackson 23,008 22,008 1,000 22,008 1,000 *
All Directors and officers
as a group (18 individuals) 829,921 255,464 574,457 255,464 574,457 3.6
* Less than one percent of outstanding units.
(1) Includes 191,510 units held by a corporation of which Messrs. Kinzel,
Miears and Keller, together with certain current and former executive
officers of the Partnership, are shareholders and, under Rule 13d-3 of
the Securities and Exchange Commission, are deemed to be the beneficial
owners of these units by having shared investment and voting power.
Messrs. Kinzel, Miears and Keller disclaim beneficial ownership of
165,700, 170,862 and 173,443, respectively, of these units. The units
owned by the corporation have been counted only once in the total of the
directors and executive officers as a group.
(2) Includes 381,988 units held by certain trusts of which Mrs. Jorgenson
and another partner of Squire, Sanders & Dempsey are trust advisors,
as to which Mrs. Jorgenson disclaims beneficial ownership.
(3) Includes 150 units held by Mr. Wittmer's son, as to which Mr. Wittmer
disclaims beneficial ownership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Attention is directed to Notes 1 and 4 to the consolidated financial
statements located on pages 19 and 23 of this Form 10-K report, which are
incorporated herein by this reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K.
A. 1. Financial Statements
With respect to the consolidated financial statements of the Registrant set
forth below, attention is directed to Item 8 beginning on page 14 of this
report, which is incorporated herein by this reference.
(i) Consolidated Balance Sheets - December 31, 1995 and 1994.
(ii) Consolidated Statements of Operations - Years ended December
31, 1995, 1994 and 1993.
(iii) Consolidated Statements of Partners' Equity - Years ended
December 31, 1995, 1994 and 1993.
(iv) Consolidated Statements of Cash Flows - Years ended December
31, 1995, 1994 and 1993.
(v) Notes to Consolidated Financial Statements - December 31,
1995, 1994 and 1993.
(vi) Report of Independent Public Accountants.
A. 2. Financial Statement Schedules
All Schedules are omitted, as the information is not required or is
otherwise furnished.
A. 3. Exhibits
The exhibits listed below are submitted in a separate section of this
report immediately following the Signatures page.
Exhibit
Number Description
3.1* Form of Third Amended and Restated Certificate and
Agreement of Limited Partnership of Cedar Fair, L.P.
(included as Exhibit A to the Prospectus).
3.2 Form of Admission and Substitution Agreement. Incorporated
herein by reference to Exhibit 3.2 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1988.
3.3 Amendment No. 2 to Third Amended and Restated Agreement of
Limited Partnership of Cedar Fair, L.P., dated as of
December 31, 1992. Incorporated herein by reference to
Exhibit 3.3 to Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992.
4* Form of Deposit Agreement.
10.1* Registration Agreement between Cedar Fair, L.P. and certain
limited partners thereof.
10.3* Letter amending Registration Agreement between Cedar Fair,
L.P. and certain limited partners thereof.
10.4 Private Shelf Agreement with Prudential Insurance Company
of America dated August 24, 1994 and $50,000,000, 8.43%
Senior Note Due August 24, 2006. Incorporated herein by
reference to Exhibit 10.1 to Registrant's Form 10-Q for the
quarter ended October 2, 1994.
10.5 Contribution Agreement by and among Dorney Park Coaster
Company, Wildwater Kingdom, Inc. and the Registrant, dated
July 21, 1992. Incorporated herein by reference to
Registrant's Form 8-K filed August 4, 1992.
10.9 Credit Agreement dated as of October 6, 1994 between Cedar
Fair, L.P. and Society National Bank, NBD Bank, N.A. and
National City Bank. Incorporated herein by reference to
Exhibit 10 to Registrant's Form 10-Q for the quarter ended
October 2, 1994.
10.15 Bonus and Incentive Compensation Policy for Officers of
Cedar Fair Management Company dated as of November 2, 1992.
Incorporated herein by reference to Exhibit 10.15 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1992.
10.16 Contribution Agreement by and among Hunt Midwest
Entertainment, Inc. and the Registrant, dated July 28,
1995. Incorporated herein by reference to Registrant's
Form 8-K filed August 11, 1995.
10.17 Cedar Fair, L.P. Executive Severance Plan dated as of July
26, 1995.
13 1995 Annual Report to Unitholders.
21* Subsidiaries of Cedar Fair, L.P.
* Incorporated herein by reference to the Registration
Statement on Form S-1 of Cedar Fair, L.P., Registration No.
1-9444, filed April 23, 1987.
B. Reports on Form 8-K.
The Registrant filed the following reports on Form 8-K during the year
ended December 31, 1995:
1) August 11, 1995: Form 8-K, Registrant acquires substantially
all of the assets of Hunt Midwest Entertainment, Inc., located
in Kansas City, Missouri.
2) October 11, 1995: Form 8-K/A, Amendment No. 1 to Form 8-K filed
August 11, 1995.
Item 7(a)(1) Financial Statements of Hunt Midwest Entertainment, Inc. for
the years ended December 31, 1994 and 1993, together with
Independent Auditors' Report.
(a)(2) Financial Statements (unaudited) of Hunt Midwest
Entertainment, Inc. for the six months ended June 30, 1995 and
1994.
(b) Pro Forma Financial Information.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
CEDAR FAIR, L.P.
(Registrant)
DATED: March 7, 1996
/S/Richard L. Kinzel
Richard L. Kinzel
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been executed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/S/ Richard L. Kinzel President and Chief Executive Officer, March 7, 1996
Richard L. Kinzel Director
/S/ Bruce A. Jackson Corporate Vice President-Finance March 7, 1996
Bruce A. Jackson (Chief Financial Officer)
/S/ Charles M. Paul Controller March 7, 1996
Charles M. Paul (Principal Accounting Officer)
/S/ Lee A. Derrough Director March 7, 1996
Lee A. Derrough
/S/ Mary Ann Jorgenson Director March 7, 1996
Mary Ann Jorgenson
/S/ Donald H. Messinger Director March 7, 1996
Donald H. Messinger
/S/ James L. Miears Executive Vice President, March 7, 1996
James L. Miears Director
/S/ Thomas A. Tracy Director March 7, 1996
Thomas A. Tracy
ANNUAL REPORT ON FORM 10-K
CEDAR FAIR, L.P.
For the Year Ended December 31, 1995
EXHIBIT INDEX
Exhibit Pag
e
3.1 Form of Third Amended and Restated Certificate and
Agreement of Limited Partnership of Cedar Fair, L.P. *
3.2 Form of Admission and Substitution Agreement. *
3.3 Amendment No. 2 to Third Amended and Restated Agreement of
Limited Partnership of Cedar Fair, L.P., dated as of
December 31, 1992. *
4 Form of Deposit Agreement. *
10.1 Registration Agreement between Cedar Fair, L.P. and
certain limited partners thereof. *
10.3 Letter amending Registration Agreement between Cedar Fair,
L.P. and certain limited partners thereof. *
10.4 Cedar Fair, L.P. $50,000,000, 8.43% Senior Notes Due
August 24, 2006 Note Agreement with PruCapital, Inc. dated
August 24, 1994. *
10.5 Contribution Agreement by and among Dorney Park Coaster
Company, Wildwater Kingdom, Inc. and the Registrant, dated
July 21, 1992. *
10.9 Credit Agreement dated as of October 6, 1994 between Cedar
Fair, L.P. and Society National Bank, NBD Bank, N.A. and
National City Bank. *
10.15 Bonus and Incentive Compensation Policy for Officers of
Cedar Fair Management Company dated as of November 2, 1992. *
10.16 Contribution Agreement by and among Hunt Midwest
Entertainment, Inc. and the Registrant, dated July 28,
1995. *
10.17 Cedar Fair, L.P. Executive Severance Plan dated as of July 41
26, 1995.
21 Subsidiaries of Cedar Fair, L.P. *
27 Financial Data Schedule 47
* Incorporated herein by reference; see Item 14(A) (3).