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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1995
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OR
[ ] 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: 0-9789
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Premier Parks Inc.
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(Exact name of registrant as specified in its charter)
Delaware 73-6137714
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11501 Northeast Expressway
Oklahoma City, Oklahoma 73131
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (405) 475-2500
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Securities registered pursuant to Sec. 12(b) of the Act: NONE
Securities registered pursuant to Sec. 12(g) of the Act:
Shares of common stock, par value $.01 per share
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(Title of class)
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 __
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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 the Registrant's knowledge, in the 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]
State the aggregate market value of the voting stock held by non-
affiliates (assuming, solely for the purposes of this Form, that all the
directors of the Registrant are affiliates) of the Registrant:
Approximately $9.5 million as of March 12, 1996 (based on the average
of the closing bid and asked quotations as reported on The Pink Sheets(R) and
the OTC Bulletin Board). See "Item 5. -- Market for the Registrant's
Common Equity and Related Stockholder Matters."
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest most practicable date:
The number of shares of Common Stock of the Registrant outstanding as
of March 15, 1996 was 24,287,772 shares.
DOCUMENTS INCORPORATED BY REFERENCE
The information required in Part III by Item 10, as to directors, and
by Items 11, 12 and 13 is incorporated by reference to the Registrant's
proxy statement in connection with the annual meeting of stockholders to be
held in June 1996, which will be filed by the Registrant within 120 days
after the close of its 1995 fiscal year.
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PART I
ITEM 1. BUSINESS
Introduction
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The Company1 is a leading theme park operator which operates six
parks with an aggregate 1995 attendance of approximately 4.1 million. The
parks are located in five geographically diverse markets and are designed
to provide a complete family-oriented entertainment experience. They
feature a broad selection of state-of-the-art and traditional thrill rides,
water attractions, themed areas, concerts and shows, restaurants, game
venues and merchandise outlets.
The Company operates six parks: Adventure World, a combination theme
and water park located three miles off the Beltway, between Washington,
D.C. (15 miles away) and Baltimore, Maryland (30 miles away); Frontier
City, a western themed park in Oklahoma City, Oklahoma; White Water Bay, a
tropical themed water park also located in Oklahoma City; Geauga Lake, a
combination theme and water park near Cleveland, Ohio; Darien Lake &
Camping Resort, a combination theme and water park with an adjacent camping
resort and amphitheater, located between Buffalo and Rochester, New York;
and Wyandot Lake, a water park, which also includes "dry" rides and other
attractions, located adjacent to the Columbus Zoo in Columbus, Ohio.
Geauga Lake, Darien Lake and Wyandot Lake were acquired by the Company in
August 1995 by virtue of the Company's acquisition by merger (the "Merger")
of all of the capital stock of Funtime Parks, Inc. ("Funtime"). For
additional information concerning the Merger and the financing thereof, see
"Item 7 -- Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity, Capital Commitments and Resources."
The Company believes that significant opportunities exist to acquire
additional parks and intends to actively pursue such opportunities.
Adventure World
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Overview. Adventure World is a combination theme and water park
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located in Largo, Maryland, approximately 15 miles east of Washington, D.C.
and 30 miles southwest of Baltimore, Maryland. The park's primary market
includes Maryland, northern Virginia, Washington, D.C. and parts of
Pennsylvania and Delaware. This market provides the park with a permanent
resident population base of approximately 6.5 million people within 50
miles and 10.8 million people within 100 miles. According to a copyrighted
1994 study published by A.C. Nielsen Media Research (the "Nielsen
Report"), which measures the number of persons in television households
within a given geographic area or so-called
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1 As used in this Report, the terms "Company" or "Premier"
includes Premier Parks Inc. and its consolidated
subsidiaries, unless the context otherwise indicates.
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designated market area ("DMA"), the Washington, D.C. and Baltimore markets
are the number 7 and number 23 DMAs in the United States, respectively.
This market also has a substantial base of businesses, associations,
schools and churches for group sales and outings, as well as a large
tourist market.
The Company owns a site of 515 acres, with 115 acres currently used
for park operations. During the 1995 season, Adventure World had 32 adult
and 14 children's rides, 29 food outlets, 15 merchandise outlets, 38 game
venues and 3 theaters. In addition, picnic grounds are available for
family and group outings. Adventure World also offers a complete water
park, including a large wave pool, water slides, a large activity pool, a
"lazy river" ride and a children's play area.
Adventure World's principal competitors are King's Dominion Park,
located in Doswell, Virginia (near Richmond) ; Hershey Park, located in
Hershey, Pennsylvania; and Busch Gardens, located in Williamsburg, Virginia.
These parks are located approximately 120, 125 and 175 miles, respectively,
from Adventure World.
Background. Adventure World was originally developed in the 1970s as
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a drive-through wild life preserve. After 1980, the park was converted by
prior ownership into a combination theme and water park, with an emphasis
on the water park component. Prior to the Company's acquisition of
Adventure World in early 1992, the theme park component lacked sufficient
rides and attractions, as well as appropriate theming.
Since acquiring the park, the Company has implemented new marketing,
sales and promotional programs and expanded the attractions at the park,
adding ten major new rides, an elaborately themed new children's area with
14 new rides and attractions and a major new western themed area, and also
upgraded and expanded the picnic/festival grounds.
Strategy. The Company's strategy is to continue its capital
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investment and marketing programs at Adventure World in order to further
penetrate the densely populated Washington, D.C./Baltimore market and to
achieve further growth in attendance and per capita spending. The Company
anticipates making capital expenditures at Adventure World of approximately
$4.0 million prior to the 1996 season to fund the development of additional
rides, attractions and revenue locations, as well as general park
improvements.
Frontier City
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Overview. Frontier City is a western theme park located along
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Interstate 35 in northeast Oklahoma City, Oklahoma, approximately 100 miles
from Tulsa. The park's market includes nearly all of Oklahoma and certain
parts of Texas and Kansas, with its primary market being in Oklahoma City
and Tulsa. This market provides the park with a permanent resident
population base of approximately 1.2 million people within 50 miles of the
park and 2.4 million people within 100 miles. According to the Nielsen
Report, the Oklahoma City and Tulsa markets are the number 43 and number 59
DMAs in the United
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States, respectively. This market also has a substantial base of
businesses, associations, schools and churches for group sales and outings.
The Company owns a site of approximately 90 acres, with 60 acres
currently used for park operations. During the 1995 season, Frontier City
had 20 adult and 10 children's rides, 26 food outlets, 21 merchandise
outlets, 33 game venues and four theaters. In addition, the Company
professionally produces eight live shows daily, such as country music
shows, a 50's musical revue and a magic show, and holds a concert series
each summer. In addition, Fort Frontier, a 12,000 square foot
air-conditioned mall and main event center, contains numerous food and
retail locations, an entertainment center and a 500-seat western opera
house. In the off-season, the center serves as a banquet facility,
accommodating groups of up to 1,500 people. Picnic grounds are also
available for family picnics and group outings.
Frontier City's only significant competitor is Six Flags Over Texas
located in Arlington, Texas, approximately 225 miles from Frontier City.
Background. Frontier City opened in 1958 as a replica of an 1880s
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western town and was acquired by the Company in 1982. The Company began
redeveloping the park after the 1989 season with a two-year capital program
to reposition and revitalize the park. In addition to extensive western
theming and landscaping and general upgrading of the physical plant,
capital improvements included the addition of three major rides, the
expansion and improvement of the O.K. Kiddie Corral children's area
(including the addition of three children's rides), the expansion and
theming of the group picnic facilities and the addition of Fort Frontier.
The Company has continued to add rides and attractions to Frontier City
through the 1995 season.
Strategy. Management believes that as a result of its capital
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improvement program to date, Frontier City has reached an appropriate level
of attractions for its market size. As a result, with maintenance-level
capital expenditures and additions of new marketable attractions every two
or three years, the Company believes that the park should be able to
achieve moderate attendance growth, to gradually increase ticket prices and
to increase in-park spending, as well as to improve operating margins as
revenue increases.
Because of the parks' geographic proximity, the Company seeks to take
advantage of operational efficiencies and other tie-in benefits at Frontier
City and White Water Bay. For example, prior to the 1995 season the Company
introduced an enhanced joint marketing program for Frontier City and White
Water Bay, including a revised season pass program which offers unlimited use
of both facilities for a single price.
White Water Bay
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Overview. White Water Bay is a tropical themed water park located
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along Interstate 40 in southwest Oklahoma City, Oklahoma. The park's
primary market includes the greater Oklahoma City metropolitan area.
According to the Nielsen Report, Oklahoma City is the number 43 DMA in the
United States. This market provides the park with a permanent resident
population base of approximately 1.2 million people within 50 miles of the
park and
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2.4 million people within 100 miles. White Water Bay also attracts group
sales from groups such as churches and other civic organizations.
The Company owns a site of 22 acres, all of which are currently used
for park operations. During the 1995 season, White Water Bay featured a
500,000 gallon wave pool, an eight story multiple slide ride, a 450,000
gallon activity pool, nine slides, a "lazy river" ride, a children's
activity pool and four volleyball courts. White Water Bay also has a full
service restaurant and two snack stands. Raft and locker rentals are also
available. In addition, the park has picnic grounds for family and group
outings.
There are no other water parks located in Oklahoma City and,
therefore, the Company's primary competition is from other outdoor water
activities, such as local swimming pools.
Background. White Water Bay was originally opened in 1981 and was
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acquired by the Company in 1991.
Strategy. Stand-alone water parks are by their nature less capital
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intensive than theme parks. As a result of the capital expenditures made
in recent years, management expects that White Water Bay will require
minimal ongoing capital expenditures and additions of new attractions only
every three or four years. In addition, the Company plans to continue to
develop special events at the park, such as youth dances. In addition, White
Water Bay expects to continue to benefit from the joint marketing initiatives
with Frontier City described above.
Geauga Lake
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Overview. Geauga Lake is a combination theme and water park, and is
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the 44th largest theme park in the United States based on 1994 attendance
of 1.1 million. Geauga Lake is located in Aurora, Ohio, 20 miles southeast
of Cleveland and approximately 30, 60 and 120 miles, respectively, from
Akron and Youngstown, Ohio and Pittsburgh, Pennsylvania. This market
provides the park with a permanent resident population base of
approximately 4.0 million people within 50 miles of the park and 7.4
million within 100 miles. According to the Nielsen Report, the
Cleveland/Akron, Youngstown and Pittsburgh markets are the number 13,
number 94 and number 17 DMAs in the United States, respectively.
The 257-acre property on which Geauga Lake is situated includes a
55-acre spring-fed lake. The theme park presently occupies approximately
116 acres. There are approximately 87 acres of undeveloped land (of which
approximately 30 acres have the potential for further development). During
the 1995 season, Geauga Lake featured over 60 "wet" and "dry" attractions,
a tidal wave pool, 38 game venues, 13 restaurants, 16 picnic pavilions, 25
merchandise outlets, three theatres and two arcades. Rainbow Island, the
park's "dry" area for young children, featured 16 children's rides. Turtle
Beach, a 1.4-acre water activity area designed exclusively for children
ages two through twelve, is located adjacent to Rainbow Island.
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Geauga Lake's principal competitors are Cedar Point located in
Sandusky, Ohio and Kennywood, located in Pittsburgh, Pennsylvania. These
parks are located approximately 90 miles and 120 miles, respectively, from
Geauga Lake. There are also three small water parks within a 50-mile
radius of Geauga Lake and Sea World, a marine park, is on the other side of
Geauga Lake. While Sea World does, to some extent, compete with Geauga
Lake for patrons, it is a complementary attraction, and many patrons visit
both facilities.
Background. Geauga Lake has been in continuous operation for over
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100 years. The park was one of the first theme parks in the United States
to introduce a complete water entertainment complex within a traditional
theme park at no additional charge to visitors. The Company believes that
this park, like the other parks acquired in the Merger, suffered under
prior ownership from a lack of capital investment in marketable rides and
attractions and creative marketing, which provides a significant
opportunity for improved performance under the Company's management.
Strategy. The Company plans to add marketable new rides and
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attractions, improve the quality of the park's daily live shows, upgrade
the quality of the merchandise outlets and restaurants, improve the park's
theming, signage and landscaping, and implement more professional and
creative marketing programs, with an emphasis on the park's improved
product offerings. Of its capital expenditure budget for 1996, the Company
anticipates spending approximately $7.5 million on Geauga Lake to fund the
development of additional rides, attractions and revenue locations as well
as general park improvements. In anticipation of these improvements, the
Company intends to increase its marketing and sales activities for the 1996
season.
Darien Lake & Camping Resort
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Overview. Darien Lake is a combination theme and water park, and is
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the largest theme park in the State of New York and the 45th largest theme
park in the United States based on 1994 attendance of 1.0 million. Darien
Lake is located on Interstate 90 in Darien Center, New York approximately
30, 120 and 40 miles, from Buffalo, Syracuse and Rochester, New York,
respectively. The park's primary market includes upstate New York, western
and northern Pennsylvania and southern Ontario, Canada. This market
provides the park with a permanent resident population base of
approximately 2.2 million people within 50 miles of the park and 3.1
million with 100 miles. According to the Nielsen Report, the Buffalo,
Syracuse and Rochester markets are the number 41, number 66 and number 71
DMAs in the United States, respectively.
The Darien Lake property consists of approximately 1,000 acres,
including 144 acres for the theme park, 242 acres of campgrounds, and 593
acres of agricultural, undeveloped and water areas. During the 1995
season, Darien Lake had 25 "wet" rides, 18 "dry" rides, 11 children's
rides, 40 game venues, three restaurants, eight picnic pavilions, 19
merchandise outlets and five arcades. For the 1995 season, a total of 10
concerts were booked in Darien Lake's 20,000-person capacity Performing
Arts Center.
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Adjacent to the Darien Lake theme park is a camping resort owned and
operated by the Company with 1,180 developed campsites, including 330
recreational vehicles available for daily and weekly rental. In addition,
there are 500 other campsites available for tenting. Darien Lake is one of
the few theme parks in the United States which offers a first class
campground adjacent to the park. The campground is the fifth largest in the
United States. Since admission to the campgrounds requires visitors to
also purchase admission tickets to the theme and water park, the Company
believes that substantially all of the camping visitors use the theme park.
Darien Lake's principal competitor is Wonderland Park located in
Toronto, Canada, approximately 125 miles from Darien Lake. In addition,
Darien Lake competes to a lesser degree with three smaller amusement parks
located within 50 miles of the park. Darien Lake is significantly larger
with a more diverse complement of entertainment than any of these three
smaller facilities. Unlike Darien Lake, none of these parks have camping
facilities or large concert venues.
Background. Darien Lake was opened in 1964. The Company believes
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that under prior ownership the park suffered from a lack of capital
investment in marketable rides and attractions and creative marketing,
which provides a significant opportunity for improved performance under the
Company's management.
Strategy. The Company plans to add marketable new rides and
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attractions, improve the quality of the park's daily live shows, upgrade
the quality of the merchandise outlets and restaurants, improve the park's
theming, signage and landscaping, and implement more professional and
creative marketing, sales and promotional programs which emphasize the
park's improved product offerings. Of its capital expenditure budget for
1996, the Company anticipates spending approximately $7.5 million on Darien
Lake to fund the development of additional rides, attractions and revenue
locations as well as general park and campground improvements. Further,
the Company believes there is significant potential to increase cash flow by
taking further advantage of the Performing Arts Center. To this end, following
the 1995 season, the Company entered into a long-term arrangement with a
national concert promoter pursuant to which the promoter will fund
approximately $2.5 million of capital improvements at the Center prior to
the 1996 season (including a new stage, improved restroom facilities and a
roof over a substantial portion of the permanent seating area) and agreed
to book at the Center at least 20 concerts per season featuring nationally
recognized performers.
Wyandot Lake
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Overview. Wyandot Lake, which had 12 water rides in the 1995 season,
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is the 12th largest water park in the United States based on 1994
attendance of approximately 362,000. During the 1995 season, the park also
had 18 "dry" rides. Wyandot Lake is located just outside of Columbus,
Ohio, adjacent to the Columbus Zoo on property sub-leased from the Columbus
Zoo. The park's primary market includes the Columbus metropolitan area and
other central Ohio towns. This market provides the park with a permanent
resident population base of approximately 2.0 million people within 50
miles of the park and
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approximately 6.4 million people within 100 miles. The Columbus market,
according to the Nielsen Report, is the number 35 DMA in the United States.
The Company leases from the Columbus Zoo the land, the buildings and
several rides which existed on the property at the time the lease was
entered into in 1983. The lease expires in 1998 and the Company has two
five-year renewal options. The land leased by Wyandot Lake consists of
approximately 18 acres. The park shares parking facilities with the
Columbus Zoo. Wyandot Lake features a variety of "wet" and "dry"
attractions, including a "wet" and "dry" area for young children which
includes mini-boats, a Tadpool kids area, geysers, aquatic play unit for
kids, a children's ferris wheel and treehouse playground.
Wyandot Lake's direct competitors are King's Island and The Beach,
each located in Cincinnati, Ohio, and Cedar Point, located in Sandusky,
Ohio. These three parks are each located approximately 100 miles from
Wyandot Lake. Although the Columbus Zoo is located adjacent to the park,
it is a complementary attraction, and many patrons visit both facilities.
Background. Wyandot Lake has been in operation since 1981. The
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Company believes that under prior ownership the park suffered from a lack
of capital investment in marketable rides and attractions and creative
marketing, which provides a significant opportunity for improved
performance under the Company's management.
Strategy. The Company anticipates spending approximately $2.0
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million on Wyandot Lake, primarily to expand the water park area and add a
significant, family-oriented water attraction. The Company will implement
aggressive marketing and sales activities for the 1996 season to highlight
these park upgrades. The Company also expects Wyandot Lake to benefit from
the $75 million planned expansion of the Columbus Zoo located adjacent to the
park.
Marketing and Promotion
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The Company attracts visitors through multi-media marketing and
promotional programs for each of its parks. These programs are tailored to
address the different characteristics of their respective markets and to
maximize the impact of specific park attractions and introductions. All
marketing and promotional programs are updated or completely revamped each
year to address new developments. During the three years ended December
31, 1995, the Company incurred advertising expense of approximately $2.8
million, $3.7 million and $5.7 million (including approximately $1.5
million expended by Funtime after the August 15, 1995 Merger),
respectively.
The Company believes that the local orientation of its marketing
programs is a key ingredient to successfully promoting its parks. For
example, Cal Ripken, Jr., the all-star shortstop for the Baltimore Orioles,
serves as official spokesperson for Adventure World, making numerous
appearances in radio and television commercials. The Company also develops
partnership relationships with well-known national and regional
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sponsors to supplement its advertising efforts and to provide attendance
incentives in the form of discounts and/or premiums.
Group sales and pre-sold tickets provide the Company with a
consistent and stable base of attendance, representing over 40% of
aggregate attendance in 1995. Each park has a group sales and pre-sold
ticket manager and a well-trained sales staff dedicated to selling multiple
group sales and pre-sold ticket programs through a variety of methods,
including direct mail, telemarketing and personal sales calls.
A significant portion of the Company's attendance is attributable to
the sale of discount admission tickets. The Company offers discounts on
season and multi-visit tickets, tickets for specific dates and tickets to
affiliated groups such as businesses, schools and religious, fraternal and
similar organizations. Management believes that incremental attendance
and in-park spending generated from discount sales activities has a positive
effect on operating results.
The Company also implements promotional programs as a means of
targeting specific market segments not reached through its group or retail
sales efforts. The promotional programs utilize coupons, sweepstakes,
reward incentives and rebates to attract additional visitors. These
programs are implemented through direct mail, telemarketing, direct
response media and sponsorship marketing. The special promotional offers
are usually for a limited period of time and offer a reduced admission
price or provide some additional incentive to purchase a ticket.
Park Operations
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The Company is headquartered in Oklahoma City, Oklahoma and New York,
New York and operates in five geographically diverse markets: Washington,
D.C./Baltimore, Maryland; Buffalo/ Rochester, New York; Cleveland, Ohio;
Columbus, Ohio; and Oklahoma City, Oklahoma. Each park is managed by a
general manager who reports to the Company's Chief Operating Officer and
is responsible for all operations and management of the park. Advertising,
ticket sales, community relations and hiring and training of personnel are the
responsibility of individual park management in coordination with corporate
support teams. The Company has systems and controls in place for the daily
tracking and monitoring of revenues and expenses associated with ticket
sales and in-park spending.
Each of the Company's parks is managed by a full-time, on-site
management team under the direction of the general manager. Each such
management team includes senior personnel responsible for operations and
maintenance, marketing and promotion, human
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resources and merchandising. Park management compensation structures are
designed to provide incentives for individual park managers to execute the
Company's strategy and to maximize revenues and profits at each park.
The Company maintains a trained security force to administer the
parks' crowd control policies and guest screening procedures and to enforce
the parks' rules relating to behavior of guests in the parks. The specific
policies and practices of the security forces are dictated on a
park-by-park basis by crowd composition and operating experience.
The Company's parks are generally open daily from Memorial Day
through Labor Day. In addition, five of the parks are open during weekends
both prior to and following their daily seasons, primarily as a site for
special events, such as concerts, live entertainment and theme events (such
as Hallowscream and Oktoberfest). Typically, the parks charge a basic
daily admission price, which allows unlimited use of all rides and
attractions, although in certain cases special rides and attractions
require the payment of an additional fee.
Competition
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The Company's theme parks compete directly with other theme parks and
amusement parks and indirectly with all other types of recreational
facilities and forms of entertainment within their market areas, including
movies, sports attractions and vacation travel. Accordingly, the Company's
business is and will continue to be subject to factors affecting the
recreation and leisure time industries generally, such as general economic
conditions and changes in discretionary consumer spending habits. Within
each park's regional market area, the principal factors affecting
competition include location, price, the uniqueness and perceived quality
of the rides and attractions in a particular park, the atmosphere and
cleanliness of a park and the quality of its food and entertainment. The
Company believes its parks feature a sufficient variety of rides and
attractions, restaurants, merchandise outlets and family orientation to
enable it to compete effectively. Certain of the Company's direct
competitors have substantially greater financial resources than the
Company.
Capital Improvements
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The Company makes capital investments each year in the development
and implementation of new rides and attractions. The Company believes that
the introduction of new rides is an important factor in promoting each of
the parks and in encouraging longer visits, which lead to increased sales
of food and merchandise. Capital expenditures are planned on a seasonal
basis with most expenditures made during the off-season.
The Company expects to spend approximately $23.5 million for park and other
improvements for the 1996 season, including the expansion of rides and
attractions. These improvements will be funded from a portion of the
proceeds of the Company's 1995 senior note and preferred stock issuances.
See "Item 7 -- Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity, Capital Commitments and Resources."
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Seasonality
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The operations of the Company are highly seasonal, with at least
80-85% of park attendance occurring in the second and third calendar
quarters and the most active period falling between Memorial Day and Labor
Day. The great majority of the Company's revenues are collected in the
second and third quarters of each year while most expenditures for capital
improvements and significant maintenance are incurred when the parks are
closed in the first and fourth quarters of each year.
Government Regulation
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Operations at the parks are subject to certain local, state and
federal governmental regulations including, without limitation, labor,
health, safety and minimum wage regulations applicable to theme park
operations, and local and state regulations applicable to restaurant
operations at the park. The Company believes that it is in substantial
compliance with applicable regulatory standards and, although no assurance
can be given, it does not foresee the need for any significant expenditures
in this area in the near future.
Environmental Regulation
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The Company's operations are subject to increasingly stringent
federal, state and local environmental laws and regulations governing water
discharges, air emissions, soil contamination, the maintenance of
underground storage tanks and the disposal of waste and hazardous
materials. The Company believes that it is in substantial compliance with
all such laws and regulations. At Geauga Lake, the Company is conducting
groundwater monitoring around a former on-site landfill under the
supervision of the Ohio Environmental Protection Agency. The Company is
awaiting administrative action on its request for curtailment of the scope
and duration of this monitoring, based on the sampling results to date. The
Company does not currently anticipate that it will be required to expend
any material amounts in connection with the monitoring program or any other
post-closure activities.
Employees
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The Company employs approximately 200 full-time employees and
approximately 4,600 seasonal employees during the operating season. In
this regard, the Company competes with other local employers for qualified
student and other candidates on a season-by-season basis. As part of the
seasonal employment program, the Company employs a significant number of
teenagers, which subjects the Company to child labor laws.
None of the employees of the Company are represented by a union or
other collective bargaining unit. The Company has not experienced any
strikes or work stoppages by its employees, and the Company considers its
employee relations to be good.
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Other Assets of the Company
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229 East 79th Street Associates L.P. The Company holds a 40% general
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partnership interest in 229 East 79th Street Associates L.P., a limited
partnership organized to own, operate and convert to cooperative ownership
an 89-unit, prewar apartment building located in New York City. The
partnership's operations are controlled by a managing general partner who
is not affiliated with the Company.
At December 31, 1995, the amount outstanding under the limited
partnership's mortgage loan was $673,386, of which the Company has
guaranteed 40%, approximately $270,000. However, if, at the time of any
default by the partnership on the loan, the lender is paid any amounts then
past due on the loan and certain other incidental amounts, the Company will
be relieved of its obligation under its guaranty. During 1995, 1994 and
1993, the Company advanced $63,000, $83,200 and $113,520, respectively, to
the partnership to fund the Company's 40% proportionate share of the
partnership's deficit.
As of December 31, 1995, 64 of the building's 89 units had been sold.
The Company anticipates that a maximum of $60,000 of advances by it will be
required in 1996 in order to meet its share of the partnership's debt
service requirements while the sales process continues.
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Executive Officers of the Registrant
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Age as of
Name March 1, 1996 Position
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Kieran E. Burke (38) Director, Chairman of the Board and
Chief Executive Officer since June
1994; Director, President and Chief
Executive Officer from October 1989
through June 1994.
Gary Story (40) Director, President and Chief
Operating Officer since June 1994;
Executive Vice President and Chief
Operating Officer from February 1992
through June 1994; prior to such
period, general manager of Frontier
City theme park for more than five
years.
James F. Dannhauser (43) Chief Financial Officer since October
1, 1995; Director since October 1992;
Managing Director of Lepercq de
Neuflize & Co. Incorporated for more
than five years.
Richard A. Kipf (61) Secretary/Treasurer since 1975; Vice
President since June 1994
Each of the above executive officers has been elected to serve in the
position indicated until the next annual meeting of directors which will
follow the annual meeting of stockholders to be held in June 1996.
ITEM 2. PROPERTIES
Set forth below is a brief description of the Company's real estate at
March 1, 1996:
White Water Bay, Oklahoma City, Oklahoma -- 22 acres (fee ownership
interest)
Adventure World, Largo, Maryland -- 515 acres (fee ownership interest)
Frontier City, Oklahoma City, Oklahoma -- 90 acres (fee ownership
interest)
Geauga Lake, Aurora, Ohio -- 258 acres (fee ownership interest)
Darien Lake, Darien Center, New York -- 979 acres (fee ownership
interest)
Wyandot Lake, Columbus, Ohio -- 18 acres (leasehold interest)(1)
In addition to the foregoing, at March 1, 1996, the Company indirectly
owned real estate through its general partnership interest in 229 East 79th
Street Associates L.P.
- --------------------
(1) Site is subleased from the Columbus Zoo. The lease expires in 1998
and the Company has two-five year renewal options. Acreage for this
site does not include approximately 30 acres of parking which is
shared with Columbus Zoo.
-14-
The Company leases office space in New York City for which it paid
approximately $136,000 in rental payments during 1995, of which Windcrest
Partners, an affiliate of the Company, paid 50%. The Company also leases
certain of the rides and attractions at its parks. See Notes 6 and 12 to
Notes to Consolidated Financial Statements.
The Company considers its properties to be well-maintained, in good
condition and adequate for their present uses and business requirements.
ITEM 3. LEGAL PROCEEDINGS
The nature of the industry in which the Company operates tends to
expose it to claims by visitors for injuries. Historically, the great
majority of these claims have been minor. While the Company believes that
it is adequately insured against the claims currently pending against it
and any potential liability, if the number of such events resulting in
liability significantly increased, or if the Company becomes subject to
damages that cannot by law be insured against, such as punitive damages,
there may be a material adverse effect on its operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
-15-
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
During the second quarter of 1994, The Pink Sheets(R) and the OTC
Bulletin Board commenced reporting of trading in the Company's common stock
under the symbol PARK. Prior to that time, the Company had been unable to
obtain any reliable price quotations for its common stock since October
1989. Set forth below are the high and low bid quotations for the common
stock as reported on The Pink Sheets and the OTC Bulletin Board for the
periods indicated. These quotations reflect inter-dealer prices, without
mark-up, mark-down or commission and may not necessarily represent actual
transactions. The Company believes that the trading market for its common
stock is highly illiquid and that the following pricing information should
not be deemed to indicate that an established trading market exists
therefor.
Year Quarter High Low
---- ------- ---- ---
1996 First (through $2 5/8 $2
March 12, 1996)
1995 Fourth 2 3/4 1 5/8
Third 3 1/2 7/8
Second 1 5/16 3/8
First 1 1/8 1/2
1994 Fourth 1 3/4
Third 1 1/2
Second 3/4 1/2
As of March 1, 1996, there were 862 holders of record of the Company's
common stock. The Company paid no dividends during the three years ended
December 31, 1995. The Company does not anticipate paying any cash
dividends during the foreseeable future. The Company's loan agreements
prohibit the payment of cash dividends to its stockholders.
-16-
ITEM 6. SELECTED FINANCIAL DATA
(In thousands, except per share data)
-----------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Revenue $41,496 $24,899 $21,860 $17,432 $10,774
Depreciation and
amortization 3,866 1,997 1,537 1,442 1,107
Interest expense, net 5,578 2,299 1,438 1,413 858
Provision for income
tax expense (benefit) (762) 68 91 427 --
Income (loss) from
continuing operations (1,045) 102 1,354 (1,735) (118)
Income (loss) from
discontinued
operations -- -- -- (2,252) (9,308)
Extraordinary gain
(loss),
net of tax effect (140) -- -- 18,350 --
Cumulative effect of
accounting change -- -- -- 2,298 --
Net Income (loss) (1,185) 102 1,354 16,661 (9,426)
Per Share:
Income (loss) from
continuing
operations (.08) .01 0.10 (0.42) (0.05)
Income (loss) from
discontinued
operations -- -- -- (0.54) (4.09)
Extraordinary gain
(loss), net of tax
effect (.01) -- -- 4.43 --
Cumulative effect of
accounting change -- -- -- 0.56 --
Net Income (loss) (.09) .01 0.10 4.03 (4.14)
Cash Dividends -- -- -- -- --
Net cash provided by
operating activities 10,646 1,060 2,699 1,980 1,924
Net cash used in
investing activities (74,139) (10,177) (7,698) (5,649) (6,841)
Net cash provided by
financing activities 90,914 7,457 2,106 8,736 5,175
Total assets 173,318 45,539 36,707 30,615 74,556
Long-term debt and
capitalized lease
obligations(1) $94,278 $24,108 $20,820 $15,627 $74,913
- --------------------
(1) Includes current portion.
-17-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
- -------
The Company's revenue is derived principally from the sale of
tickets for entrance to its parks (approximately 53% and 56% in 1995 and
1994, respectively) and the sale of food, merchandise, games and
attractions inside its parks (approximately 47% and 44% in 1995 and 1994,
respectively). The Company's principal costs of operations include
salaries and wages, fringe benefits, advertising, outside services,
maintenance, utilities and insurance. The Company's expenses are
relatively fixed. Costs for maintenance, utilities, advertising and
insurance do not vary significantly with attendance, thereby providing the
Company with a significant degree of operating leverage as attendance
increases.
An important element of the Company's business strategy is the
ongoing expansion of its rides and attractions and overall improvement of
its parks, which management believes has contributed to increased
attendance as well as increased length of stay and in-park spending. The
Company intends to continue to make significant capital expenditures in order
to maintain and enhance the appeal of its parks, which it expects will, in
turn, increase attendance and profitability.
Results of Operations
- ---------------------
Years Ended December 31, 1995 and 1994
- --------------------------------------
Revenue. Revenue aggregated $41.5 million in 1995, a 66.7% increase
-------
over 1994 revenue of $24.9 million. A large portion of the increase ($13.5
million) resulted from the Merger on August 15, 1995. These results
include the income from the acquired parks from and after that date. The
1995 results of the Company without consideration of the Merger provided an
increase of 12.5% from $24.9 million in 1994 to $28.0 million in 1995. This
increase in revenue is primarily attributable to the increased attendance
of 14.3% from 1.4 million in 1994 to 1.6 million in 1995 at the three theme
parks owned by the Company prior to the Merger.
Operating Expenses. Operating expenses increased approximately $7.4
------------------
million, or 60%, in 1995 over 1994 levels. A large portion of the increase
($6.9 million) is a result of the Merger. The 1995 results of the Company
without consideration of the Merger provided an increase of 3.2% in
operating expenses from $12.4 million in 1994 to $12.8 million in 1995. As
a percentage of revenue, operating expenses constituted approximately 47.7%
in 1995 and approximately 49.6% in 1994. Without consideration of the
Merger, operating expenses constituted approximately 45.7% of revenue in
1995.
Selling, General and Administrative. Selling, general and
-----------------------------------
administrative expenses increased from approximately $5.5 million in 1994
to approximately $9.3 million in 1995. A large portion of the increase
($2.6 million) is a result of the Merger. The Company's selling, general
and administrative expenses without consideration of the Merger increased
21.8% from $5.5 million in 1994 to $6.7 million in 1995 primarily due to a
20.3% increase in marketing and advertising expenses. Most of the increase
was incurred at Adventure World as part of the advertising campaign design
to promote public awareness of the new Mind Eraser suspended, looping
roller coaster,
-18-
and a lesser portion of this increase was incurred in connection with the
promotion of the new combined season pass program at Frontier City and
White Water Bay.
Costs of Products sold. Costs of products sold increased from $2.6
----------------------
million in 1994 to $4.6 million in 1995. A large portion of the increase
($1.7 million) is a result of the Merger. The Company's cost of products
sold without consideration of the Merger increased 11.5% from $2.6 million
in 1994 to $2.9 million in 1995. This increase is a direct result of
increased in-park sales at the parks.
Depreciation and Amortization. Depreciation and amortization
-----------------------------
expense aggregated approximately $3.9 million in 1995 and approximately
$2.0 million in 1994. This 95% increase resulted primarily from the
Merger. The Company's depreciation and amortization without consideration
of the Merger increased 25.0% from $2.0 million in 1994 to $2.5 million in
1995, reflecting the effect of the Company's additional capital
improvements.
Income Taxes. The Company had an income tax benefit in 1995 of
------------
$852,000, compared to an income tax expense of $68,000 in 1994. The
Company's income tax benefit in 1995 was allocated to loss before income
taxes ($762,000) and an extraordinary loss ($90,000) on extinguishment of
debt. The effective income tax rate for 1995 was 42.2% as compared to
approximately 40% in 1994. The Company anticipates an effective tax rate
of between 40% and 42% in the future since the parks acquired in the Merger
are located in higher tax jurisdictions than the Company's three previous
parks and due to the non-deductibility of the amortization of the goodwill
that resulted from the Merger. See Note 7 to Notes to the Consolidated
Financial Statements.
Years Ended December 31, 1994 and 1993
- --------------------------------------
Revenue. Revenue aggregated $24.9 million in 1994, a 13.9% increase
-------
over 1993 revenue of $21.9 million, resulting from a 30.1% increase in
revenue at Adventure World and a 3.8% increase in revenue at Frontier City,
offset in part by a 7.0% decrease in revenue at White Water Bay.
Attendance at Premier's three parks in 1994 increased approximately
6.5% compared to 1993 levels primarily as a result of a 19.2% increase at
Adventure World based on Premier's substantial investment in new rides and
attractions and increased marketing (including the engagement of Cal
Ripken, Jr. as the park's official spokesperson). The increase in
attendance in 1994 was augmented by a 1.8% increase in ticket revenue per
customer and a 8.4% increase in per-customer in-park spending in that year.
The increased ticket revenue resulted from increased prices and a reduction
in discount levels. The increased in-park spending in 1994 was primarily
attributable to higher price levels, additional food and other retail
outlets at the parks in that year and longer in-park stays. Of the 1994
revenues, $417,000 represents the excess of insurance proceeds received by
Premier over the net book value of assets destroyed, and repair costs of
assets damaged, by high winds at one of Premier parks. See Note 11 to
Notes to Consolidated Financial Statements. The Company believes that the
storm and the resulting damage caused a substantial loss of attendance and
revenue at the affected park. The Company estimates that the storm
resulted in an attendance loss of at least 20,000 customers at the park.
During 1994, revenue per visitor at the affected park was approximately
$20.30.
-19-
Operating Expenses. Operating expenses increased approximately $2.0
------------------
million, or 18.8%, in 1994 over 1993 levels. As a percentage of revenues,
operating expenses constituted approximately 49.6% in 1994 and 47.6% in
1993. The increase in operating expenses during 1994 was primarily
attributable to an approximate $805,000 increase (representing a 12%
increase over 1993 levels) in salaries and other compensation benefits
during that year, an approximate $406,000 (65%) increase in repair and
maintenance expense and a $511,000 (42%) increase in operating supplies,
equipment rentals and other expense. The increase in personnel cost
reflected an increase primarily at Adventure World in the number of
seasonal employees (11%) required to operate additional attractions as well
as longer operating hours and, to a lesser extent, changes in hourly rates
paid to lifeguards and other skilled employees (6%). Salary and other
compensation benefits increased $613,000 at Adventure World in 1994.
Repairs and maintenance increased due largely to a $288,000 increase at
Adventure World arising out of the significant expansion of that park with
the addition of 14 new rides and numerous other improvements during the two
years preceding the 1994 season. Operating supplies, equipment rentals and
other expenses increased due to additional "live" shows presented at the
parks, additional equipment rentals, particularly at Adventure World,
increases in utility costs due to the additional rides and attractions at
the parks, and costs associated with the preparation of group sales
brochures.
Selling, General and Administrative. Selling, general and
-----------------------------------
administrative expenses increased from $4.8 million in 1993 to $5.4 million
in 1994. Selling, general and administrative expenses (as a percentage of
revenues) constituted 21.8% in each of 1994 and 1993. The increase in
these expenses in 1994 was almost exclusively the result of a 37% increase
in sales and advertising expense. Of this increase $578,000 represented
additional marketing and advertising expense at Adventure World, which was
designed to increase public awareness of the significant capital
improvements made at the parks.
Costs of Products Sold. Costs of products sold aggregated
----------------------
approximately $2.6 million in 1994, as compared to the 1993 level of $2.1
million. Cost of products sold (as a percentage of in-park revenue)
constituted approximately 23.3% and 23.8%, during 1994 and 1993,
respectively.
Depreciation and Amortization. Depreciation and amortization
-----------------------------
expense aggregated $2.0 million in 1994 and $1.5 million in 1993. This
33.3% increase reflected the effect of Premier's additional capital
improvements.
Income Taxes. Premier's provision for income taxes represented
------------
approximately 40% of 1994 earnings before income taxes compared to 6.3% of
1993 earnings before income taxes. State and local taxes were the
principal reason that Premier's effective tax rate was higher than the 34%
federal corporate rate. See Note 7 to Notes to Consolidated Financial
Statements.
Liquidity, Capital Commitments and Resources
- --------------------------------------------
The operations of the Company are highly seasonal, with the majority
of the operating season occurring between Memorial Day and Labor Day. Most
of the Company's revenue is collected in the second and third quarters of
each year while most expenditures for capital improvements and major
maintenance are incurred when the parks are closed. The Company employs a
substantial number of seasonal employees who are compensated on an hourly
basis.
-20-
An increase in the federal or any applicable state minimum wage rate would
result in increased compensation expense for the Company.
Prior to the 1993 season, the Company began implementing a
long-range capital improvement program for its parks, spending
approximately $7.7 million in 1993, $10.1 million in 1994 and $10.7 million
in 1995. Also, Premier acquired certain rides and attractions through
leases and borrowings of $2.7 million, $570,000 and $3.3 million in 1993,
1994 and 1995, respectively.
During 1995, the Company generated approximately $10.6 million in
net cash from operating activities. Additionally, financing activities
provided approximately $90.9 million in net cash during that year, of which
$90.0 million represented the proceeds of the Senior Note offering and $20
million represented the proceeds of 7% Convertible Preferred Stock offering
which were consummated in connection with the Merger. These proceeds were
offset in part by the Company's repayment of approximately $17.5 million of
indebtedness. During 1995, the Company used $74.1 million in net cash in
connection with investing activities, $63.3 million of which was employed
in connection with the Merger and $10.7 million represented additions to
buildings, rides and attractions at the Company's parks made in connection
with its capital improvement program. As a result of these activities, the
Company's property and equipment (after depreciation) at December 31, 1995
increased approximately $77.4 million over the amount at December 31, 1994,
and cash and cash equivalents at December 31, 1995 increased $27.4 million
as compared to the December 31, 1994 level. Liabilities at December 31,
1994 aggregated $127.4 million, representing a $100 million increase over
December 31, 1994, most of which ($90 million) represented the Company's
indebtedness under its Senior Notes.
During 1994, the Company generated $1.0 million in net cash from
operating activities. Additionally, financing activities provided
approximately $7.5 million in net cash during that year, of which
approximately $4.2 million represented the proceeds of a 1994 private
placement of common stock and approximately $3.4 million represented net
borrowings. During that year, the Company used $10.1 million in net cash
in connection with investing activities, substantially all of which
represented additions to buildings, rides and attractions at Premier's
parks made in connection with its capital improvement program. The 1994
capital improvements were funded from cash generated from operations in
1993, and the proceeds of borrowings. As a result of these activities, the
Company's property and equipment (after depreciation) at December 31, 1994
increased approximately $8.7 million over the amount at December 31, 1993,
and cash and cash equivalents at 1994 year-end decreased $1.7 million as
compared to the December 31, 1993 level. Liabilities at December 31, 1994
aggregated $27.4 million, representing a $3.9 million increase over
December 31, 1993, substantially all of which represented increased
borrowings in 1994.
On August 15, 1995, the Company acquired Funtime in the Merger for
approximately $60.0 million (excluding the post-closing adjustment of
approximately $5.4 million paid in December 1995) and repaid in full its
existing bank debt, $16.1 million. The Company funded these amounts from a
portion of its simultaneous $90 million Senior Note offering and $20
million Convertible Preferred Stock offering. In addition, on that date,
other indebtedness of the Company in the principal amount of $9.1 million
was converted into common stock of the Company, and the Company entered
into a three-year $20.0 million secured revolving credit
-21-
facility ("Senior Credit Facility"). The transactions described in this
paragraph are collectively referred to below as the "Merger Transactions."
At December 31, 1995, substantially all of the Company's
indebtedness was represented by the Senior Notes, which require annual
interest payments of $10.8 million. Except in the event of a change of
control of the Company and certain other circumstances, no principal
payment on the Senior Notes is due and payable until maturity, August 15,
2003. The annual dividend requirements on the Convertible Preferred Stock
is $1.4 million, payable at the election of the Company in cash or
additional shares of such stock. The Senior Credit Facility prohibits
payment of cash dividends by the Company.
Borrowings under the Senior Credit Facility are secured by
substantially all of the Company's assets (other than real estate),
including the capital stock of its subsidiaries. The Senior Credit
Facility has an aggregate availability of $20.0 million, none of which had
been borrowed as of March 15, 1996. Interest rates per annum thereunder
are equal to Chemical Bank's Alternative Base Rate plus 0.25% or the London
Interbank Offering Rate plus 3.00%. The Senior Credit Facility matures
August 15, 1998. Under the Senior Credit Facility, the Company is required
to repay in full the principal balance for at least 45 consecutive days
during the period from July 1 to November 1 of each year. The Senior
Credit Facility contains restrictive covenants that, among other things,
limit the ability of the Company and its subsidiaries to dispose of assets;
incur additional indebtedness or liens; pay dividends; repurchase stock;
make investments; engage in mergers or consolidations; and engage in
certain transactions with subsidiaries and affiliates. In addition, the
Senior Credit Facility requires that the Company comply with certain
specified financial ratios and tests, including cash interest expense
coverage, a minimum net worth requirement and a maximum capital expenditure
requirement.
The Merger Transactions generated approximately $29.9 million of
excess net proceeds (excluding amounts deposited in escrow or retained by
the Company to fund specified Funtime liabilities under the Merger
agreement). The Company expects that the excess net proceeds from the
Merger Transactions, internally generated funds from 1995 and 1996
operations and borrowings under its $20.0 million Senior Credit Facility
will be the Company's primary sources of liquidity, including its capital
expenditure program prior to the 1996 season. The Company believes that
the funds available from its sources of liquidity will be adequate to cover
its currently anticipated working capital and debt service requirements.
Newly Issued Accounting Standards
- ---------------------------------
The Financial Accounting Standards Board has issued SFAS No. 123,
"Accounting for Stock-Based Compensation" ("Statement No. 123"), which
establishes a fair value based method of accounting for stock-based
compensation plans. Entities are encouraged to adopt all provisions of
Statement No. 123 but are required only to comply with the disclosure
requirements of Statement No. 123. Statement No. 123 is effective for
financial statements for fiscal years beginning after December 15, 1995.
The provisions of Statement No. 123 will not have a material effect on the
consolidated financial condition or operating results of the Company, as the
Company does not intend to adopt the optional value based measurement concept
related to stock-based compensation contained in Statement No. 123.
The Financial Accounting Standards Board has also issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of"
-22-
("Statement No. 121"). Statement No. 121 requires that long-lived assets
and certain intangibles be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. The Company periodically reevaluates the carrying
amounts of its long-lived assets and the related depreciation and
amortization periods as discussed in the notes to the Company's
Consolidated Financial Statements, and the Company believes that the
adoption of Statement No. 121 will not have a material effect on its
consolidated financial statements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and schedules listed in Item 14(a)(1) and
(2) are included in this Report beginning on page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Identification of Directors
Incorporated by reference from the information captioned
"Proposal 1: Election of Directors" included in the Company's Proxy
Statement in connection with the annual meeting of stockholders to be held
in June 1996.
(b) Identification of Executive Officers
Information regarding executive officers is included in Item 1 of
Part I herein.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference from the information captioned "Executive
Compensation" included in the Company's Proxy Statement in connection with
the annual meeting of stockholders to be held in June 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
(a), (b) Incorporated by reference from the information captioned
"Stock Ownership of Management and Certain Beneficial Holders" included in
the Company's Proxy Statement in connection with the annual meeting of
stockholders to be held in June 1996.
(c) Changes in Control
None.
-23-
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference from the information captioned "Certain
Transactions" included in the Company's Proxy Statement in connection with
the annual meeting of stockholders to be held in June 1996.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
(a)(1) and (2) Financial Statements and Financial Statement
Schedules
The following consolidated financial statements of the Premier Park
Inc. and subsidiaries, the notes thereto, the related report thereon of
independent auditors, and financial statement schedules are filed under
Item 8 of this Report:
PAGE
----
Independent Auditor's Report F-2
Consolidated Balance Sheets - December 31, 1995 and 1994 F-3
Consolidated Statements of Operations Years ended F-5
December 31, 1995, 1994 and 1993
Consolidated Statements of Stockholders' Equity F-6
Years ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows F-7
Years ended December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements F-9
Schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are omitted because
they either are not required under the related instructions, are
inapplicable, or the required information is shown in the financial
statements or notes thereto.
(a)(3) See Exhibit Index.
(b) Reports on Form 8-K
-------------------
None.
(c) Exhibits
See Item 14(a)(3) above.
-24-
PREMIER PARKS INC.
Index to Consolidated Financial Statements
Page
Independent Auditors' Report .......................................... F-2
Consolidated Balance Sheets - December 31, 1995 and 1994 .............. F-3
Consolidated Statements of Operations - Years ended December 31,
1995, 1994 and 1993 ................................................ F-5
Consolidated Statements of Stockholders' Equity - Years ended
December 31, 1995, 1994 and 1993 ................................... F-6
Consolidated Statements of Cash Flows - Years ended
December 31, 1995, 1994 and 1993 ................................... F-7
Notes to Consolidated Financial Statements ............................ F-9
F-1
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Premier Parks Inc.:
We have audited the consolidated financial statements of Premier Parks Inc. and
subsidiaries as listed in the accompanying index. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Premier Parks Inc.
and subsidiaries as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1995, in conformity with generally accepted accounting
principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Oklahoma City, Oklahoma
February 29, 1996
F-2
PREMIER PARKS INC.
Consolidated Balance Sheets
December 31, 1995 and 1994
Assets 1995 1994
------ ---- ----
Current assets:
Cash and cash equivalents $ 28,787,000 1,366,000
Accounts receivable 965,000 870,000
Inventories 2,904,000 1,018,000
Prepaid expenses 2,352,000 765,000
----------- -----------
Total current assets 35,008,000 4,019,000
----------- -----------
Other assets:
Investment in and advances to a partnership,
at equity 1,118,000 1,124,000
Deferred charges 4,839,000 428,000
Deposits and other 3,111,000 1,396,000
----------- -----------
Total other assets 9,068,000 2,948,000
----------- -----------
Property and equipment, at cost 125,906,000 44,842,000
Less accumulated depreciation 9,905,000 6,270,000
----------- -----------
116,001,000 38,572,000
Intangible assets 13,471,000 -
Less accumulated amortization 230,000 -
----------- -----------
13,241,000 -
Total assets $ 173,318,000 45,539,000
=========== ===========
See accompanying notes to consolidated financial statements.
F-3
Liabilities and Stockholders' Equity 1995 1994
------------------------------------ ---- ----
Current liabilities
Accounts payable and accrued expenses $ 6,361,000 1,281,000
Accrued interest payable 4,158,000 102,000
Current portion of long-term debt - unrelated
parties 56,000 1,239,000
Current portion of long-term debt - related
parties - 200,000
Current portion of capitalized lease obligations 1,009,000 453,000
----------- -----------
Total current liabilities 11,584,000 3,275,000
----------- -----------
Long-term debt and capitalized lease obligations:
Capitalized lease obligations 3,213,000 1,420,000
Long-term debt - unrelated parties:
Senior subordinated notes - 1,240,000
Senior notes 90,000,000 11,901,000
Long-term debt - related parties:
Senior subordinated notes - 5,760,000
Junior subordinated loan - 1,895,000
------------ -----------
Total long-term debt and capitalized lease
obligations 93,213,000 22,216,000
Other long-term liabilities 3,465,000 -
Deferred income taxes 19,145,000 1,914,000
----------- -----------
Total liabilities 127,407,000 27,405,000
----------- -----------
Stockholders' equity:
Preferred stock, 500,000 shares authorized at
December 31, 1995 and 1994; 200,000 shares
Series A, 7% cumulative convertible, $1 par
value ($100 redemption value) issued and
outstanding at December 31, 1995, and no shares
issued and outstanding at December 31, 1994 200,000 -
Common stock, $.01 par value, 45,000,000 shares
authorized at December 31, 1995 and 1994,
respectively; 24,419,500 and 16,992,335 shares
issued and 24,287,772 and 16,860,607 shares
outstanding as of December 31, 1995 and 1994,
respectively 244,000 170,000
Capital in excess of par value 79,261,000 50,573,000
Accumulated deficit (33,105,000) (31,920,000)
----------- -----------
46,600,000 18,823,000
Less 131,728 common shares of treasury stock,
at cost 689,000 689,000
----------- -----------
Total stockholders' equity 45,911,000 18,134,000
----------- -----------
Total liabilities and stockholders' equity $ 173,318,000 45,539,000
=========== ===========
F-4
PREMIER PARKS INC.
Consolidated Statements of Operations
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
---- ---- ----
Revenue:
Theme park admissions $ 21,863,000 13,936,000 12,874,000
Theme park food, merchandise, and
other 19,633,000 10,963,000 8,986,000
---------- ---------- ----------
Total revenue 41,496,000 24,899,000 21,860,000
---------- ---------- ----------
Operating costs and expenses:
Operating expenses 19,775,000 12,358,000 10,401,000
Selling, general and administrative 9,272,000 5,448,000 4,768,000
Costs of products sold 4,635,000 2,553,000 2,135,000
Depreciation and amortization 3,866,000 1,997,000 1,537,000
---------- ---------- ----------
Total operating costs and
expenses 37,548,000 22,356,000 18,841,000
---------- ---------- ----------
Income from operations 3,948,000 2,543,000 3,019,000
Other income (expense):
Interest expense, net (5,578,000) (2,299,000) (1,438,000)
Equity in loss of partnership (69,000) (83,000) (142,000)
Other income (expense) (108,000) 9,000 6,000
---------- ---------- ----------
(5,755,000) (2,373,000) (1,574,000)
---------- ---------- ----------
Income (loss) before income
taxes (1,807,000) 170,000 1,445,000
Income tax expense (benefit) (762,000) 68,000 91,000
---------- ---------- ----------
Income (loss) before
extraordinary loss (1,045,000) 102,000 1,354,000
Extraordinary loss on extinguishment
of debt, net of income tax benefit
of $90,000 (140,000) - -
---------- ---------- ----------
Net income (loss) $ (1,185,000) 102,000 1,354,000
========== ========== ==========
Net income (loss) applicable to
common stock $ (1,714,000) 102,000 1,354,000
========== ========== ==========
Weighted average number of common
shares outstanding 19,689,000 14,052,000 13,276,000
========== ========== ==========
Income (loss) per common share:
Income (loss) before extraordinary
loss (.08) .01 .10
Extraordinary loss (.01) - -
---- --- ---
Net income (loss) (.09) .01 .10
==== === ===
See accompanying notes to consolidated financial statements.
F-5
PREMIER PARKS INC.
Consolidated Statements of Stockholders' Equity
Years ended December 31, 1995, 1994 and 1993
Series A, 7%
Cumulative
Convertible
Preferred Stock Common Stock
----------------- -------------------- Capital in
Shares Shares Excess of Accumulated Treasury
Issued Amount Issued Amount Par Value Deficit Stock Total
------- -------- ---------- -------- ---------- ----------- -------- -----------
Balances at December 31, 1992 -- $ -- 13,407,825 $134,000 45,769,000 (33,376,000) (689,000) 11,838,000
Net income -- -- -- -- -- 1,354,000 -- 1,354,000
------- -------- ---------- -------- ---------- ----------- -------- -----------
Balances at December 31, 1993 -- -- 13,407,825 134,000 45,769,000 (32,022,000) (689,000) 13,192,000
Issuance of common stock:
Cash proceeds - net -- -- 3,099,073 31,000 4,154,000 -- -- 4,185,000
Exchange of debt for equity -- -- 485,437 5,000 650,000 -- -- 655,000
Net income -- -- -- -- -- 102,000 -- 102,000
------- -------- ---------- -------- ---------- ----------- -------- -----------
Balances at December 31, 1994 -- -- 16,992,335 170,000 50,573,000 (31,920,000) (689,000) 18,134,000
Issuance of preferred stock 200,000 200,000 -- -- 19,800,000 -- -- 20,000,000
Conversion of debt to equity -- -- 7,427,165 74,000 8,888,000 -- -- 8,962,000
Net loss -- -- -- -- -- (1,185,000) -- (1,185,000)
------- -------- ---------- -------- ---------- ----------- -------- -----------
Balances at December 31, 1995 200,000 $200,000 24,419,500 $244,000 79,261,000 (33,105,000) (689,000) 45,911,000
======= ======== ========== ======== ========== =========== ======== ===========
See accompanying notes to consolidated financial statements.
F-6
PREMIER PARKS INC.
Consolidated Statements of Cash Flows
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
---- ---- ----
Cash flows from operating activities:
Net income (loss) $ (1,185,000) 102,000 1,354,000
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 3,866,000 1,997,000 1,537,000
Extraordinary loss on early
extinguishment of debt 230,000 -- --
Amortization of discount on debt
and debt issuance costs 317,000 94,000 290,000
Gain on sale of assets -- (9,000) (3,000)
Equity in losses of partnerships 69,000 83,000 142,000
Decrease in escrow cash accounts -- -- 506,000
(Increase) decrease in accounts
receivable 5,794,000 (496,000) (210,000)
Deferred income taxes (benefit) (808,000) 24,000 91,000
Increase in inventories and
prepaid expenses (455,000) (422,000) (339,000)
(Increase) decrease in deposits
and other assets 1,128,000 (891,000) (123,000)
Increase (decrease) in accounts
payable and accrued expenses (2,366,000) 511,000 (532,000)
Increase (decrease) in accrued
interest payable 4,056,000 67,000 (14,000)
------------ ----------- -----------
Total adjustments 11,831,000 958,000 1,345,000
------------ ----------- -----------
Net cash provided by
operating activities 10,646,000 1,060,000 2,699,000
------------ ----------- -----------
Cash flows from investing activities:
Proceeds from the sale of equipment -- 14,000 90,000
Increase in investments in and
advances topartnerships (63,000) (83,000) (114,000)
Additions to property and equipment (10,732,000) (10,108,000) (7,674,000)
Acquisition of Funtime Parks, Inc.,
net of cash acquired (63,344,000) -- --
------------ ----------- -----------
Net cash used in investing
activities (74,139,000) (10,177,000) (7,698,000)
Cash flows from financing activities:
Repayment of debt (17,487,000) (5,079,000) (8,252,000)
Proceeds from borrowings 93,500,000 8,451,000 10,758,000
Net cash proceeds from issuance of
preferred stock 20,000,000 -- --
Net cash proceeds from issuance of
common stock -- 4,185,000 --
Payments of debt issuance costs (5,099,000) (100,000) (400,000)
------------ ----------- -----------
Net cash provided by
financing activities 90,914,000 7,457,000 2,106,000
------------ ----------- -----------
(Decrease) increase in cash and cash
equivalents 27,421,000 (1,660,000) (2,893,000)
Cash and cash equivalents at beginning of
year 1,366,000 3,026,000 5,919,000
------------ ----------- -----------
Cash and cash equivalents at end of year $ 28,787,000 1,366,000 3,026,000
============ =========== ===========
(Continued)
F-7
PREMIER PARKS INC.
Consolidated Statements of Cash Flows, Continued
Years ended December 31, 1995, 1994 and 1993
1995 1994 1993
---- ---- ----
Supplementary cash flow information:
Cash paid for interest $ 2,018,000 2,178,000 1,433,000
========= ========= =========
Cash paid for income taxes (refund) $ (22,000) 38,000 -
========= ========= =========
Supplemental disclosure of noncash investing and financing activities:
1995
o Common stock (7,427,165 shares) was exchanged for $9,095,000 of debt, net
of $133,000 of costs (notes 3 and 9).
o The Company purchased certain rides and attractions through capital leases
with obligations totaling $3,259,000.
1994
o Common stock (485,437 shares) was exchanged for $655,000 of debt (note 9).
o The Company entered into two separate note agreements, aggregating $570,000
for the purchase of property and equipment.
1993
o The Company purchased certain rides and attractions through capital leases
with obligations totaling $2,745,000.
o In connection with a term loan obtained during the year, $5,824,000 was
used to retire existing notes with the same institution.
See accompanying notes to consolidated financial statements.
F-8
PREMIER PARKS INC.
Notes to Consolidated Financial Statements
December 31, 1995, 1994 and 1993
(1) Summary of Significant Policies
Description of Business
Premier Parks Inc. (the Company) owns and operates regional themed
amusement and water parks. The Company and its subsidiaries currently own
and operate six parks: Frontier City, a western theme park located in
Oklahoma City, Oklahoma; White Water Bay, a tropical theme water park
located in Oklahoma City, Oklahoma; Adventure World, a combination theme
and water park located in Largo, Maryland; Geauga Lake, a combination
theme and water park located near Cleveland, Ohio; Darien Lake & Camping
Resort, a combination theme and water park with an adjacent camping resort
and performing arts center, located between Buffalo and Rochester, New
York; and Wyandot Lake, a water park which also includes "dry rides"
located in Columbus, Ohio.
Basis of Presentation
The Company's accounting policies reflect industry practices and conform
to generally accepted accounting principles.
The consolidated financial statements include the accounts of the Company,
its wholly owned subsidiaries, and the limited partnership (Frontier City
Partners Limited Partnership) in which the Company beneficially owns 100%
of the partnership interests. Intercompany transactions and accounts have
been eliminated in consolidation.
The Company's investment in a partnership in which it does not own a
controlling interest is accounted for using the equity method.
Cash Equivalents
Cash equivalents of $26,728,000 at December 31, 1995, consist of
short-term highly liquid investments with an original maturity of three
months or less, which are readily convertible into cash. For purposes of
the consolidated statements of cash flows, the Company considers all
highly liquid debt instruments with original maturities of three months or
less to be cash equivalents.
Inventories
Inventories are stated at the lower of cost (first in, first out) or
market and consist of products for resale including merchandise and food
and miscellaneous supplies including repair parts for rides.
Advertising Costs
Production costs of commercials and programming are charged to operations
in the year first aired. The costs of other advertising, promotion, and
marketing programs are charged to operations in the year incurred. The
amounts capitalized at year-end are included in prepaid expenses.
Deferred Charges
The Company capitalizes all costs related to the issuance of debt with
such costs included in deferred charges in the consolidated balance
F-9
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
sheets. The capitalized debt costs at December 31, 1995 relate to the
senior notes and senior credit facility and the amortization of such costs
are recognized as interest expense under a method approximating the
interest method over the life of the respective debt issue.
Depreciation and Amortization
Buildings and improvements are depreciated over their estimated useful
lives of approximately 30 years by use of the straight-line method.
Furniture and equipment are depreciated using the straight-line method
over 5-10 years. Rides and attractions are depreciated using the
straight-line method over 5-25 years. Amortization of property associated
with capitalized lease obligations is included in depreciation expense in
the consolidated financial statements.
Maintenance and repairs are charged directly to expense as incurred, while
betterments and renewals are generally capitalized in the property
accounts. When an item is retired or otherwise disposed of, the cost and
applicable accumulated depreciation are removed and the resulting gain or
loss is recognized.
Intangible Assets
Goodwill, which represents the excess of purchase price over fair value of
net assets acquired, is amortized on a straight-line basis over the
expected period to be benefited, generally 25 years. The Company assesses
the recoverability of this intangible asset by determining whether the
amortization of the goodwill balance over its remaining life can be
recovered through undiscounted future operating cash flows of the acquired
operations. The amount of goodwill impairment, if any, is measured based
on projected discounted future operating cash flows using an appropriate
interest rate. The assessment of the recoverability of goodwill will be
impacted if estimated future operating cash flows are not achieved.
Interest Expense Recognition
Interest on notes payable is generally recognized as expense on the basis
of stated interest rates. Notes payable and capitalized lease obligations
that do not have a stated interest rate or that have interest rates
considered to be lower than prevailing market rates (when the obligations
were incurred) are carried at amounts discounted to impute a market rate
of interest cost. Total interest expense incurred was $6,074,000,
$2,341,000, and $1,481,000 in 1995, 1994 and 1993, respectively. Interest
expense in the accompanying consolidated statements of operations is shown
net of interest income.
Income Taxes
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date.
F-10
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
Income (Loss) Per Share
Income (loss) per share is computed based on income (loss) applicable to
common stock divided by the weighted average number of common shares
outstanding during the period. For the year ended December 31, 1995, no
warrants, options, or potential shares from convertible securities were
considered as the effect would be antidilutive. For the years ended
December 31, 1994 and 1993, warrants and options outstanding have been
excluded from the per share calculations as no active trading market
existed for the Company's common stock during those periods.
The Company's former senior subordinated notes were converted into common
shares in 1995. For 1994 and 1993, the senior subordinated notes were
considered to be potentially dilutive securities. The weighted average
number of common shares attributable to the conversion feature of the
notes was 5,600,000 and 2,378,000 for the years ended December 31, 1994
and 1993, respectively. The former senior subordinated notes bore interest
and if the notes had been converted, the interest expense on the notes in
1994 or 1993 would not have been incurred. After consideration of the
increase in income that would have occurred from the reduction in interest
expense, the effect of the convertible shares on income was antidilutive.
The Company issued convertible preferred stock in 1995 which is a
potentially dilutive security. The 12,121,121 common shares that would
result from conversion of the preferred stock are not considered in the
1995 calculation of loss per share, as the effect would be antidilutive.
Accumulated, but unpaid, preferred stock dividends of $529,000 were
considered in determining net loss applicable to common stock in 1995.
Use of 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 the reporting period. Actual results could differ from those
estimates.
Reclassifications
Reclassifications have been made to certain amounts reported in 1994 and
1993 to conform with the 1995 presentation.
(2) Fair Value of Financial Instruments
The recorded amounts for cash and cash equivalents, accounts receivable,
deposits, accounts payable and accrued expenses, and accrued interest
payable approximate fair value because of the short maturity of these
financial instruments. The fair value estimates, methods, and assumptions
relating to the Company's other financial instruments are discussed in
note 6.
(3) Acquisition of Theme Parks
Pursuant to a merger agreement, the Company acquired Funtime Parks, Inc.
(Funtime), a company owning three regional theme parks, for an initial
purchase price of approximately $60,000,000 in cash with an additional
amount of approximately $5,400,000 paid to the former shareholders as a
postclosing adjustment related to the operating cash flows of the former
Funtime parks after the acquisition. The acquisition was accounted for as
a purchase. The allocation of the purchase price was determined based upon
estimates of fair value as determined by independent appraisal. As of the
F-11
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
acquisition date and after giving effect to the purchase, $18,030,000 of
deferred tax liabilities were recognized for the tax consequences
attributable to the differences between the financial statement carrying
amounts and the tax basis of Funtime's assets and liabilities.
Approximately $13,500,000 of cost in excess of the fair value of the net
assets acquired was recorded as goodwill. To fund the acquisition, on
August 15, 1995, the Company issued $90,000,000 aggregate principal amount
of 12% senior notes due 2003 (the Notes) and $20,000,000 of convertible
preferred stock and converted approximately $9,100,000 of previously
existing indebtedness into Company common stock. Except in the case of a
change of control (as defined in the indenture relating to the Notes) and
certain other circumstances, no principal payment on the Notes is due
prior to maturity (August 15, 2003). As part of the acquisition,
$2,500,000 of the purchase price was placed into escrow as an
indemnification fund. Except in limited circumstances, the indemnification
fund represents the sole source of funds for indemnification claims made
by the Company against the former shareholders of Funtime. The escrow is
to be released in February 1997. The indemnification fund is classified in
the accompanying consolidated financial statements as a deposit and as a
noncurrent other liability.
The accompanying 1995 consolidated statement of operations reflects the
results of Funtime from the date of acquisition (August 15, 1995).
The following summarized pro forma results of operations for the years
ended December 31, 1995 and 1994, assumes that the acquisition and related
transactions occurred as of the beginning of 1994 (in thousands):
1995 1994
---- ----
(Unaudited)
Revenue:
Theme park admissions $ 37,738 34,275
Theme park food, merchandise, and other 42,301 41,319
------- -------
Total revenue 80,039 75,594
Operating costs and expenses:
Operating expenses 35,616 34,832
Selling, general and administrative 13,764 12,380
Costs of products sold 9,671 9,188
Depreciation and amortization 6,223 5,768
------- -------
Total operating costs and expenses 65,274 62,168
Income from operations 14,765 13,426
Interest expense, net (11,022) (11,559)
Equity in loss of partnership (69) (83)
Other income (expense) (108) (27)
------- -------
Total other expense (11,199) (11,669)
------- -------
Income before income taxes and extraordinary
loss 3,566 1,757
Income tax expense 1,666 948
------- -------
Income before extraordinary loss $ 1,900 809
======= =======
Income (loss) before extraordinary loss
applicable to common stock $ 500 (591)
======= =======
Income (loss) before extraordinary loss per
common share $ .02 (.02)
======== ========
F-12
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
(4) Investment in and Advances to a Partnership
1995 1994
---- ----
40% general partner capital interest (including
cumulative advances of $1,341,000 and
$1,278,000 at December 31, 1995 and 1994,
respectively) in 229 East 79th Street
Associates LP, a limited partnership
(Associates) formed in 1987 to acquire,
operate, manage, and convert to cooperative
ownership a residential building located at
229 East 79th Street, New York, NY. $ 1,118,000 1,124,000
========= =========
While the Company is a general partner, the Company does not operate,
manage, or control the limited partnership. Operations, management, and
control are performed by the managing general partner.
Under the terms of the partnership agreement, the Company funds 40% of
required working capital needed by Associates. During 1995 and 1994, the
Company made advances of $63,000 and $83,000, respectively. Presently, the
Company expects to continue to advance funds as needed during 1996. The
Company has guaranteed up to approximately $270,000 of borrowings by
Associates in connection with its acquisition of real estate. However, if
at the time of a default by Associates, the lender is paid amounts accrued
to date, the Company will be relieved of its obligation under its
guaranty.
The following information summarizes the financial position of Associates
and the results of its operations:
December 31
--------------------------
1995 1994
------------ ------------
Assets $ 3,496,000 3,686,000
========= =========
Liabilities 4,061,000 4,072,000
Partners' deficit (565,000) (386,000)
--------- ---------
$ 3,496,000 3,686,000
========= =========
Year ended December 31
---------------------------------
1995 1994 1993
----------- --------- ---------
Revenues $ 288,000 294,000 300,000
Costs and expenses 461,000 534,000 612,000
-------- -------- --------
(173,000) (240,000) (312,000)
(Loss) gain on sale of co-op shares - 32,000 (43,000)
--------- -------- --------
Net loss $ (173,000) (208,000) (355,000)
======== ======== ========
F-13
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
(5) Property and Equipment
Property and equipment, at cost, are classified as follows:
1995 1994
---- ----
Theme parks:
Land $ 12,230,000 5,964,000
Buildings and improvements 54,935,000 15,213,000
Rides and attractions 51,653,000 20,179,000
Equipment 7,088,000 3,486,000
----------- ----------
Total theme parks 125,906,000 44,842,000
Less accumulated depreciation 9,905,000 6,270,000
----------- ----------
$ 116,001,000 38,572,000
=========== ==========
Included in property and equipment are costs and accumulated depreciation
associated with capital leases as follows:
1995 1994
---- ----
Cost $ 6,005,000 2,745,000
Accumulated depreciation (334,000) (165,000)
--------- ---------
$ 5,671,000 2,580,000
========= =========
(6) Long-Term Debt and Capitalized Lease Obligations
At December 31, 1995 and 1994, debt consists of:
1995 1994
---- ----
Capitalized lease obligations:
Capitalized lease obligations expiring 1997
through 2000, requiring aggregate annual lease
payments ranging from approximately $1,172,000
to $360,000 including implicit interest at
rates ranging from 9.875% to 11% and secured
by equipment with a net book value of
approximately $5,671,000 as of
December 31, 1995 $ 4,222,000 1,873,000
Debt to unrelated parties:
Senior notes (a) 90,000,000 -
Senior subordinated convertible debt maturing
in 2000, convertible into common stock at a
conversion price of $1.25, requiring
quarterly interest payments at9.5% per
annum (b) - 1,240,000
Term note payable due December 1998, requiring
monthly interest payments at prime plus 1%
(9.5% as of December 31, 1994) and
principal payments annually and borrowings
under a revolving line of credit (c) - 12,451,000
Other debt 56,000 689,000
---------- ----------
Total - debt to unrelated parties 90,056,000 14,380,000
---------- ----------
F-14
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
1995 1994
---- ----
Debt to related parties:
Junior subordinated loan payable with
interest at 8% per annum plus accrued
interest unpaid (d) $ - 2,095,000
Senior subordinated convertible debt maturing
in 2000, convertible into common stock at
a conversion price of $1.25 requiring
quarterly interest payments at 9.5% per
annum (b) - 5,760,000
----------- ----------
Total - debt to related parties - 7,855,000
----------- ----------
Total $ 94,278,000 24,108,000
========== ==========
(a) The notes are senior unsecured obligations of the Company, with a
$90,000,000 aggregate principal amount, and mature on August 15,
2003. The notes bear interest at 12% per annum payable semiannually
on August 15 and February 15 of each year, commencing February 15,
1996. The notes are redeemable, at the Company's option, in whole or
part, at any time on or after August 15, 1999, at varying redemption
prices. Additionally, at any time and from time-to-time prior to
August 15, 1998, the Company may redeem in the aggregate up to 33
1/3% of the original aggregate principal amount of notes with the
proceeds of one or more public equity offerings at a redemption price
of 110% of the principal amount. These notes are guaranteed by all of
the Company's principal operating subsidiaries.
The indenture under which the notes were issued places limitations on
operations and sales of assets by the Company or its subsidiaries,
requires maintenance of certain financial ratios, and limits the
Company's ability to pay cash dividends or make other distributions
to the holders of its capital stock or to redeem such stock.
The indenture permits the Company, subject to certain limitations, to
incur additional indebtedness, including secured senior indebtedness
under its $20,000,000 senior credit facility described below.
The Company is a holding company with no operations or assets other
than its investment in its wholly owned direct and indirect
subsidiaries and its investment in Associates. All of the Company's
subsidiaries, except for one indirect wholly owned subsidiary,
Funtime-Famous Recipe, Inc., are full, unconditional, and joint and
several guarantors of the notes. The assets and operations of
Funtime-Famous Recipe, Inc. are inconsequential to the Company and
its consolidated financial condition and results of operations.
Condensed financial statement information for the guarantors is not
included herein, as the Company does not believe such information
would be material to the understanding of the Company and its direct
and indirect subsidiaries.
(b) During 1993, the Company consummated a private placement of
$7,000,000 of its 9.5% senior subordinated convertible notes due
March 2000. The notes were funded on July 29, 1993. The notes were
convertible into shares of common stock at the conversion price of
$1.25 per share subject to certain antidilution adjustments. These
notes were converted into 5,875,313 common shares during 1995.
(c) On December 7, 1993, the Company entered into a loan agreement with a
financial institution which provided for a $13,583,000 term loan
facility due December 31, 1997, and a $3,500,000 revolving line of
credit that was due December 31, 1995. The term loan facility was
fully funded in 1994. The revolving line had a zero balance at
December 31, 1994. All amounts outstanding including amounts advanced
under the line of credit were repaid during 1995 in connection with
F-15
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
the issuance of the senior notes. Additionally, the line of credit
was cancelled.
(d) On October 30, 1992, in connection with a private placement, the
Company consolidated the outstanding Windcrest Partners loans in the
principal amount of $2,095,000 into a junior subordinated term loan.
Under the terms of this loan agreement, interest was payable monthly
at the rate of 8% per annum until maturity on December 31, 1999. The
junior term loan was exchanged for common stock (1,551,852 shares)
during 1995.
Annual maturities of long-term debt and capitalized lease obligations
during the five years subsequent to December 31, 1995, are as follows:
1996 $ 1,065,000
1997 1,473,000
1998 713,000
1999 360,000
2000 and thereafter 90,667,000
----------
$ 94,278,000
==========
The Company's $20,000,000 senior credit facility is secured by
substantially all of the Company's assets (other than real estate),
including the capital stock of its subsidiaries. The facility matures in
August 1998. At December 31, 1995, no advances were outstanding under the
senior credit facility. Advances under the senior credit facility will
bear interest at a variable rate.
The senior credit facility contains restrictive covenants that, among
other things, limit the ability of the Company and its subsidiaries to
dispose of assets; incur additional indebtedness or liens; pay dividends;
repurchase stock; make investments; engage in mergers or consolidations;
engage in certain transactions with subsidiaries and affiliates; and
redeem or purchase the senior notes. In addition, the senior credit
facility requires that the Company comply with certain specified financial
ratios and tests, including cash interest expense coverage, a minimum net
worth requirement, and a maximum capital expenditure requirement.
The fair value of the Company's long-term debt is estimated by using
quoted bond prices or discounted cash flow analyses based on current
borrowing rates for debt with similar maturities. Under the above
assumptions the estimated fair value of long-term debt and capitalized
lease obligations at December 31, 1995, is approximately $103,000,000.
(7) Income Taxes
The Company recognized an income tax benefit of $852,000 in 1995. The
benefit of $762,000 was allocated to loss before income taxes and $90,000
to the extraordinary loss.
F-16
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
Income tax expense (benefit) allocated to operations for 1995, 1994 and
1993 consists of the following:
Current Deferred Total
------- -------- -----
1995:
U.S. Federal $ (44,000) (508,000) (552,000)
State and local - (210,000) (210,000)
-------- -------- --------
$ (44,000) (718,000) (762,000)
======= ======== ========
1994:
U.S. Federal 44,000 15,000 59,000
State and local - 9,000 9,000
-------- -------- --------
$ 44,000 24,000 68,000
======= ======== ========
1993:
U.S. Federal - 75,000 75,000
State and local - 16,000 16,000
-------- -------- --------
$ - 91,000 91,000
======== ======== ========
Recorded income tax expense (benefit) allocated to operations differed
from amounts computed by applying the U.S. federal income tax rate of 34%
to pretax income approximately as follows:
1995 1994 1993
---- ---- ----
Computed "expected" federal income
tax expense (benefit) $ (614,000) 58,000 491,000
Amortization of goodwill 78,000 - -
Other, net (16,000) 1,000 (6,000)
Effect of state and local income
taxes (210,000) 9,000 16,000
Change in the beginning-of-the-year
balance of the valuation
allowance for deferred tax assets - - (410,000)
--------- ------- --------
$ (762,000) 68,000 91,000
======== ====== ========
F-17
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
Substantially all of the Company's future taxable temporary differences
(deferred tax liabilities) relate to the different financial accounting
and tax depreciation methods and periods for property and equipment. The
Company's net operating loss carryforwards and alternative minimum tax
carryforwards represent future income tax deductions (deferred tax
assets). The tax effects of these temporary differences as of December 31,
1995 and 1994, are presented below:
1995 1994
---- ----
Deferred tax assets before valuation
allowance $ 7,860,000 3,161,000
Less valuation allowance - -
Net deferred tax assets 7,860,000 3,161,000
Deferred tax liabilities 27,005,000 5,075,000
---------- ---------
Net deferred tax liability $ 19,145,000 1,914,000
========== =========
The Company's deferred tax liability results from the financial carrying
value for assets acquired in the Funtime acquisition, which was based upon
the fair value at the acquisition date, being substantially in excess of
Funtime's tax basis in the assets and from the Company's remaining
depreciable assets being depreciated primarily over a 7-year period for
tax reporting purposes and a longer 20- to 25-year period for financial
purposes. The faster tax depreciation has resulted in tax losses which can
be carried forward to offset future taxable income. Because the Company's
assets' financial carrying value and tax basis difference will primarily
reverse before the expiration of the net operating loss carryforwards and
taking into account the Company's projections of future taxable income
over the same period, management believes that it will more likely than
not realize the benefits of these net future deductions.
The Company experienced an ownership change within the meaning of the
Internal Revenue Code Section 382 and the regulations thereunder on
October 30, 1992, as a result of the issuance of 11,000,000 shares of
common stock. As a result of the ownership change, net operating loss
carryforwards generated before the ownership change can be deducted in
subsequent periods only in certain limited situations. Accordingly, it is
probable that the Company will not be able to use net operating loss
carryforwards generated prior to October 30, 1992. None of the pre-October
30, 1992, net operating loss carryforwards were considered in computing
the Company's available net operating loss carryforwards and deferred tax
liability. Net operating loss carryforwards generated after October 30,
1992, can be utilized without restriction unless another ownership change
in excess of 50% during any three-year period occurs.
As of December 31, 1995, the Company has approximately $13,681,000 of
unrestricted net operating loss and $4,077,000 of alternative minimum tax
carryforwards available for federal income tax purposes which expire in
2008 through 2010. Additionally, the Company has $1,864,000 of alternative
minimum tax credits which have no expiration date.
F-18
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
(8) Preferred Stock
The Company has authorized 500,000 shares of preferred stock, $1 par
value. During 1995, the Company issued 200,000 shares of Series A, 7%
cumulative convertible preferred stock at $100 per share.
All shares of Series A preferred stock rank senior and prior in right to
all of the Company's now or hereafter issued common stock with respect to
dividend payments and distribution of assets upon liquidation or
dissolution of the Company,
Holders of Series A preferred stock are entitled to receive cumulative
dividends at an annual rate of $7 per share. At the Company's election,
dividends are payable in cash and/or in additional Series A preferred
stock. The terms of the Company's senior notes and senior credit facility
limit the Company's ability to pay cash dividends.
At the option of the holder, the Series A preferred stock may be converted
into fully-paid and nonassessable shares of common stock. The number of
shares of common stock deliverable upon conversion of one share of Series
A preferred stock will be determined by dividing $100 by the then
applicable conversion rate. The initial conversion rate was $1.65 and will
be adjusted from time to time in accordance with the provisions of the
Series A preferred stock. The Company has agreed to provide the preferred
stockholders certain registration rights relative to the common stock
issued upon conversion of the preferred stock.
The Company may redeem the Series A preferred stock at any time in whole
or from time to time in part at a redemption price of $100 per share
provided that either certain common stock market price levels are met or
that the Company will have consummated an underwritten public offering of
common stock with gross proceeds of at least $15,000,000.
(9) Capital Stock
In October 1994, the Company issued 3,099,073 common shares in a private
placement with existing stockholders for cash. In connection with this
placement, Windcrest Partners also exchanged $655,000 of then existing
debt for 485,437 shares of common stock. The Company has agreed to provide
the stockholders certain registration rights in the future.
In August 1995, the Company issued 5,875,313 common shares in full
exchange for the Company's $7,000,000 senior subordinated convertible
notes and 1,551,852 common shares in full exchange for the Company's
$2,095,000 junior subordinated term loan. The Company has agreed to
provide the stockholders certain registration rights in the future.
(10) Stock Options and Warrants
In 1995, 1994 and 1993, certain members of the Company's management were
issued seven-year options to purchase 1,240,000, 180,000, and 766,002
shares of common stock, at an exercise price of $1.65, $1.50, and $1.00
per share, respectively, under the Company's 1993 and 1995 Stock Option
and Incentive Plans. The options granted in 1995 are subject to the
approval of the Company's shareholders at the 1996 annual meeting. These
options may be exercised on a cumulative basis with 20% of the total
exercisable on date of issuance and with an additional 20% being available
for exercise on each of the succeeding anniversary dates. Any unexercised
portion of the options will automatically and without notice terminate
F-19
PREMIER PARKS INC.
Notes to Consolidated Financial Statements, Continued
upon the seventh anniversary of the issuance date or upon termination of
employment. At December 31, 1995, 507,601 options were exercisable.
In October 1989, the Company's current chairman was issued a ten-year
warrant to purchase 131,728 shares of common stock (currently being held
as treasury stock) at an exercise price of $.20 per share and a ten-year
warrant to purchase 93,466 shares of common stock at an exercise price of
$.20 per share.
(11) Casualty Loss
On July 27, 1994, high winds damaged the Company's Adventure World
location. The loss was covered by insurance and the total insurance
benefits recognized during 1994 were $748,000, including approximately
$348,000 accrued as a receivable, which was collected subsequent to
December 31, 1994. The Company spent approximately $393,000 in 1994 to
replace and repair capital assets which had been destroyed or damaged.
Insurance proceeds in excess of the net book value of destroyed assets and
the repair costs of damaged assets were approximately $417,000 and are
reflected in the 1994 consolidated statement of operations in theme parks
revenue.
(12) Commitments and Contingencies
The Company leases office space under a lease agreement which expires
April 30, 2001. The lease requires minimum monthly payments over its term
and also escalation charges for proportionate share of expenses as defined
in the lease. The Company may also terminate the lease during 1996 and pay
a termination penalty. Windcrest Partners, an affiliate of the Company,
shares office space with the Company and has agreed to pay 50% of the
rental payments. Rent expense recognized by the Company (after deduction
of amounts paid by Windcrest Partners) for the years ended December 1995,
1994, and 1993, aggregated $68,000, $68,000, $70,000, respectively.
Future minimum lease payments (exclusive of amounts to be reimbursed by
Windcrest Partners) on operating leases for the Company's office space and
equipment (with initial or remaining lease terms in excess of one year),
are as follows:
1996 $ 416,000
1997 336,000
1998 220,000
1999 70,000
2000 70,000
Later years 70,000
The Company is not a party to, nor is its property subject to, any pending
material legal proceedings.
(13) Certain Transactions
In connection with the acquisition of Funtime and the issuance of the
$90,000,000 senior notes, the Company paid investment banking and
financial advisory fees in the amount of $800,000 and $475,000 to Lepercq,
de Neuflize & Co. Incorporated (Lepercq) and Hanseatic Corporation
(Hanseatic), respectively. Two directors of the Company are managing
director and treasurer, respectively, of Lepercq and Hanseatic.
F-20
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Form 10-K to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 28, 1996
PREMIER PARKS INC.
By: /s/ Kieran E. Burke
--------------------------------
Kieran E. Burke
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
registrant and in the following capacities on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Kieran E. Burke Chairman of the Board, Chief March 28, 1996
-----------------------
Kieran E. Burke Executive Officer (Principal
Executive Officer) and
Director
/s/ Gary Story President, Chief Operating March 28, 1996
-----------------------
Gary Story Officer and Director
/s/ James F. Dannhauser Chief Financial Officer March 28, 1996
-----------------------
James F. Dannhauser (Principal Financial Officer)
and Director
/s/ Richard R. Webb Vice President March 28, 1996
-----------------------
Richard R. Webb (Principal Accounting Officer)
/s/ Paul A. Biddelman Director March 28, 1996
-----------------------
Paul A. Biddelman
/s/ Michael E. Gellert Director March 28, 1996
-----------------------
Michael E. Gellert
/s/ Jack Tyrrell Director March 21, 1996
-----------------------
Jack Tyrrell
EXHIBIT INDEX
-------------
Page
----
(3) Articles of Incorporation and By-Laws:
(a) Certificate of Incorporation of Registrant dated
March 24, 1981 -- incorporated by
reference from Exhibit 3 to Form 10-Q of
Registrant for the quarter ended
June 30, 1987.
(b) Plan and Agreement of Merger of Registrant
and Tierco, a Massachusetts business
trust, dated March 31, 1981 --
incorporated by reference from Exhibit 3
to Form 10-Q of Registrant for the
quarter ended June 30, 1987.
(c) Certificate of Amendment of Certificate of
Incorporation of Registrant dated
April 14, 1985 -- incorporated by
reference from Exhibit 3 to Form 10-Q of
Registrant for the quarter ended
June 30, 1987.
(d) Certificate of Amendment of Certificate of
Incorporation of Registrant dated May 8,
1987 -- incorporated by reference from
Exhibit 3 to Form 10-Q of Registrant for
the quarter ended June 30, 1987.
(e) Certificate of Amendment of Certificate of
Incorporation of Registrant dated
June 11, 1987 -- incorporated by
reference from Exhibit 3 to Form 10-Q of
Registrant for the quarter ended
June 30, 1987.
(f) Certificate of Amendment of Certificate of
Incorporation
of Registrant dated April 30, 1991 --
incorporated by reference from Exhibit
3(f) to Form 10-K of Registrant for the
year ended December 31, 1991.
(g) Certificate of Amendment of Certificate of
Incorporation
of Registrant dated June 30, 1992 --
incorporated by reference from Exhibit
3(g) to Form 10-K of Registrant for the
year ended December 31, 1992.
(h) Certificate of Amendment of Certificate of
Incorporation
of Registrant dated June 23, 1993 --
incorporated by reference from Exhibit
3(a) to Form 10-Q of Registrant for the
quarter ended June 30, 1993.
(i) Certificate of Amendment to Certificate of
Incorporation
dated October 7, 1994 -- incorporated by
reference from Exhibit 3(i) to Form 10-K
of Registrant for the year ended
December 31, 1994.
(j) Certificate of Designation of Series A 7% Cumulative
Convertible Preferred Stock (the
"Preferred Stock") of Registrant --
incorporated by reference from Exhibit
3(10) to Registrant's Registration
Statement on Form
S-1 (Reg. No. 33-62225) declared
effective on November 9, 1995 (the
"Registration Statement").
(k) By-laws of Registrant -- incorporated by reference
from Exhibit 3(g) to Form 10-K of
Registrant for the year ended December
31, 1991.
(4) Instruments Defining the Rights of Security
Holders, Including Indentures:
(a) Indenture dated as of August 15, 1995, among the
Registrant, the subsidiaries of the
Registrant named therein and United
States Trust Company of New York, as
trustee (including the form of Notes) --
incorporated by reference from Exhibit
4(2) to the Registration Statement.
(b) Purchase Agreement, dated August 10, 1995, among
the Registrant, the subsidiaries of the
Registrant named therein and Chemical
Securities Inc -- incorporated by
reference from Exhibit 4(3) to the
Registration Statement.
(c) Exchange and Registration Rights Agreement, dated
August 15, 1995, among the Registrant,
the subsidiaries of the Registrant named
therein and Chemical Securities Inc. --
incorporated by reference from Exhibit
4(4) to the Registration Statement.
(d) Form of Subscription Agreement between the Registrant
and each of the purchasers of shares of
Preferred Stock -- incorporated by
reference from Exhibit 4(10) to the
Registration Statement.
-ii-
(e) Credit Facility, dated August 15, 1995, among the
Registrant, the subsidiaries of the
Registrant named therein, Chemical Bank,
The Merchant Bank of New York and
Chemical Bank, as agent (including forms
of guarantee agreements, security
agreements and pledge agreements) --
incorporated by reference from Exhibit
4(1) to the Registration Statement.
(f) Convertible Note Purchase Agreement, dated as of
March 3, 1993, between the Registrant
and the purchasers named therein
(including forms of Senior Subordinated
Convertible Note and Registration Rights
Agreement) -- incorporated by reference
from Exhibit 4(i) to Form 10-K of the
Registrant for the year ended December
31, 1992.
(g) Form of Subscription Agreement, dated October 1992,
between the Registrant and certain
investors -- incorporated by reference
from Exhibit 4(a) to the Registrant's
Current Report on Form 8-K dated October
30, 1992.
(h) Stock Purchase and Warrant Issuance Agreement,
dated October 16, 1989, between The
Tierco Group, Inc. and Kieran E. Burke
-- incorporated by reference from
Exhibit 4(i) to Form 10-K of Registrant
for the year ended December 31, 1989.
(i) Warrant, dated October 16, 1989, to purchase
131,728 shares of Common Stock issued by
The Tierco Group, Inc. to Kieran E.
Burke -- incorporated by reference from
Exhibit 4(k) to Form 10-K of Registrant
for the year ended December 31, 1989.
(j) Warrant, dated October 16, 1989, to purchase
93,466 shares of Common Stock issued by
The Tierco Group, Inc. to Kieran E.
Burke -- incorporated by reference from
Exhibit 4(1) to Form 10-K of Registrant
for the year ended December 31, 1989.
-iii-
(10) Material Contracts:
(a) Agreement of Limited Partnership of 229 East 79th
Street Associates LP dated July 24,
1987, together with amendments thereto
dated, respectively, August 31, 1987,
October 21, 1987, and December 21, 1987
-- incorporated by reference from
Exhibit 10(i) to Form 10-K of Registrant
for year ended December 31, 1987.
(b) Agreement of Limited Partnership of Frontier City
Partners Limited Partnership, dated
October 18, 1989, between Frontier City
Properties, Inc. as general partner, and
the Registrant and Frontier City
Properties, Inc. as limited partners
-- incorporated by reference from
Exhibit 10(g) to the Registrant's
Current Report on Form 8-K dated October
18, 1989.
(c) Asset Purchase Agreement, dated December 10,
1990, between Registrant and Silver
Dollar City, Inc., -- incorporated by
reference from Exhibit 10(c) to the
Registrant's Current Report on Form 8-K
dated February 6, 1991.
(d) Asset Purchase Agreement, dated December 16,
1991, among the Registrant, Tierco
Maryland, RWP, John J. Mason and Stuart
A. Bernstein -- incorporated by
reference from Exhibit 10(a) to the
Registrant's Current Report on Form-8K
dated January 31, 1992.
(e) Asset Transfer Agreement, dated as of June 30,
1992, by and among the Registrant, B&E
Holding Company and the creditors
referred to therein -- incorporated by
reference from Exhibit 10(a) to the
Registrant's Current Report on Form 8-K
dated July 20, 1992.
(f) Purchase Agreement, dated September 30,
1992, among the Registrant, Palma Real
Estate Management Company, First
Stratford Life Insurance Company and
Executive Life Insurance Company --
incorporated by reference to Exhibit
2(a) to the Registrant's Current Report
on Form 8-K dated September 30, 1992.
-iv-
(g) Lease Agreement, dated January 18, 1993,
among Registrant, Frontier City Partners
Limited Partnership and Fitraco N.V. --
incorporated by reference from Exhibit
10(k) to Form 10-K of Registrant for the
year ended December 31, 1992.
(h) Lease Agreement, dated January 18, 1993,
among Registrant, Tierco Maryland, Inc.
and Fitraco N.V. -- incorporated by
reference from Exhibit 10(l) to Form 10-
K of Registrant for the year ended
December 31, 1992.
(i) Security Agreement and Conditional Sale
Contract, between Chance Rides, Inc. and
Tierco Maryland, Inc. and Guaranty of
Registrant in favor of Chance Rides,
Inc. -- incorporated by reference from
Exhibit 10(m) to Form 10-K of Registrant
for the year ended December 31, 1992.
(j) Registrant's 1993 Stock Option and Incentive Plan --
incorporated by reference from Exhibit 10(k) to
Form 10-K of Registrant for the year ended
December 31, 1993.
(k) Agreement and Plan of Merger, dated as of June 30,
1995 among the Registrant, Premier Parks
Acquisition Inc., Funtime Parks, Inc.
("Funtime") and its shareholders --
incorporated by reference from Exhibit 10(11)
to the Registration Statement.
(l) Escrow Agreement, dated as of August 15, 1995, among
the Registrant, certain shareholders of
Funtime and First National Bank of Ohio,
Trust Division -- incorporated by reference
from Exhibit 10(12) to the Registration
Statement.
(m) Consulting Agreement, dated as of August 15, 1995,
between Registrant and Bruce E. Walborn --
incorporated by reference from Exhibit 10(13)
to the Registration Statement.
(n) Consulting Agreement, dated as of August 15, 1995,
between Registrant and Gaspar C. Lococo --
incorporated by reference from Exhibit 10(14)
to the Registration Statement.
(o) Lease Agreement dated December 22, 1995 between
Darien Lake Theme Park and Camping
Resort, Inc. and The Metropolitan
Entertainment Co., Inc.
-v-
(11) Statement re computation of per share
earnings.
(21) Subsidiaries of the Registrant --
incorporated by
reference from Exhibit 21 to the Registration
Statement.
(last page of exhibits)
-vi-