10-Q 1 cedarfair-10qx2x2018.htm 10-Q Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 24, 2018
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission File Number: 1-9444
CEDAR FAIR, L.P.
(Exact name of registrant as specified in its charter)
 
DELAWARE
 
34-1560655
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
One Cedar Point Drive, Sandusky, Ohio 44870-5259
(Address of principal executive offices) (Zip Code)
(419) 626-0830
(Registrant’s telephone number, including area code)
 
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  o 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
x
  
Accelerated filer
 
o
 
 
 
 
Non-accelerated filer
 
o (Do not check if a smaller reporting company)
  
Smaller reporting company
 
o
 
 
 
 
 
 
 
 
 
 
 
Emerging growth company
 
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x



 
 
 
Title of Class
 
Units Outstanding as of July 27, 2018
Units Representing
Limited Partner Interests
 
56,440,139

Page 1 of 48 pages





CEDAR FAIR, L.P.
FORM 10-Q CONTENTS
 




PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
 
6/24/2018
 
12/31/2017
 
6/25/2017
ASSETS
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
Cash and cash equivalents
 
$
60,119

 
$
166,245

 
$
101,083

Receivables
 
85,379

 
37,722

 
83,377

Inventories
 
47,000

 
29,719

 
44,285

Prepaid advertising
 
22,210

 
3,031

 
18,779

Other current assets
 
18,434

 
10,266

 
14,785

 
 
233,142

 
246,983

 
262,309

Property and Equipment:
 
 
 
 
 
 
Land
 
266,849

 
271,021

 
266,823

Land improvements
 
433,505

 
421,593

 
418,473

Buildings
 
728,243

 
693,899

 
699,548

Rides and equipment
 
1,804,512

 
1,740,653

 
1,723,960

Construction in progress
 
36,569

 
72,847

 
39,775

 
 
3,269,678

 
3,200,013

 
3,148,579

Less accumulated depreciation
 
(1,650,680
)
 
(1,614,241
)
 
(1,539,953
)
 
 
1,618,998

 
1,585,772

 
1,608,626

Goodwill
 
180,186

 
183,830

 
180,370

Other Intangibles, net
 
36,991

 
38,064

 
37,653

Other Assets
 
9,899

 
9,510

 
20,499

 
 
$
2,079,216

 
$
2,064,159

 
$
2,109,457

LIABILITIES AND PARTNERS’ EQUITY
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
Current maturities of long-term debt
 
$
1,875

 
$

 
$
7,500

Accounts payable
 
49,551

 
24,621

 
45,374

Deferred revenue
 
211,173

 
86,131

 
193,338

Accrued interest
 
9,265

 
8,124

 
9,735

Accrued taxes
 
12,740

 
43,975

 
30,352

Accrued salaries, wages and benefits
 
26,228

 
18,740

 
24,955

Self-insurance reserves
 
25,272

 
25,107

 
26,860

Other accrued liabilities
 
24,395

 
18,796

 
16,706

 
 
360,499

 
225,494

 
354,820

Deferred Tax Liability
 
93,474

 
74,798

 
116,797

Derivative Liability
 

 
8,722

 
18,166

Other Liabilities
 
10,982

 
11,684

 
12,423

Long-Term Debt:
 
 
 
 
 
 
Revolving credit loans
 
25,000

 

 

Term debt
 
722,186

 
723,788

 
731,258

Notes
 
937,146

 
936,727

 
936,633

 
 
1,684,332

 
1,660,515

 
1,667,891

Partners’ Equity:
 
 
 
 
 
 
Special L.P. interests
 
5,290

 
5,290

 
5,290

General partner
 
(2
)
 

 
(1
)
Limited partners, 56,441, 56,359 and 56,240 units outstanding at June 24, 2018, December 31, 2017 and June 25, 2017, respectively
 
(86,435
)
 
81,589

 
(70,915
)
Accumulated other comprehensive income (loss)
 
11,076

 
(3,933
)
 
4,986

 
 
(70,071
)
 
82,946

 
(60,640
)
 
 
$
2,079,216

 
$
2,064,159

 
$
2,109,457

    
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

3


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per unit amounts)
 
Three months ended
 
Six months ended
 
6/24/2018
 
6/25/2017
 
6/24/2018
 
6/25/2017
Net revenues:
 
 
 
 
 
 
 
Admissions
$
204,447

 
$
214,881

 
$
231,168

 
$
237,444

Food, merchandise and games
129,947

 
133,167

 
151,002

 
151,375

Accommodations, extra-charge products and other
45,922

 
44,750

 
52,873

 
52,297


380,316

 
392,798

 
435,043

 
441,116

Costs and expenses:

 
 
 
 
 
 
Cost of food, merchandise, and games revenues
35,018

 
34,249

 
41,021

 
39,729

Operating expenses
167,417

 
160,380

 
256,245

 
244,669

Selling, general and administrative
54,041

 
51,860

 
82,723

 
79,479

Depreciation and amortization
52,219

 
50,812

 
57,740

 
56,177

Loss on impairment / retirement of fixed assets, net
3,372

 
184

 
4,712

 
1,710


312,067

 
297,485

 
442,441

 
421,764

Operating income (loss)
68,249

 
95,313

 
(7,398
)
 
19,352

Interest expense
21,337

 
21,920

 
41,099

 
40,834

Net effect of swaps
(906
)
 
4,368

 
(4,534
)
 
4,669

Loss on early debt extinguishment

 
23,115

 
1,073

 
23,115

Loss (gain) on foreign currency
14,984

 
(3,183
)
 
25,078

 
(5,854
)
Other income
(139
)
 
(16
)
 
(488
)
 
(48
)
Income (loss) before taxes
32,973

 
49,109

 
(69,626
)
 
(43,364
)
Provision (benefit) for taxes
13,730

 
17,741

 
(5,469
)
 
(9,978
)
Net income (loss)
19,243

 
31,368

 
(64,157
)
 
(33,386
)
Net income (loss) allocated to general partner

 
1

 
(1
)
 

Net income (loss) allocated to limited partners
$
19,243

 
$
31,367

 
$
(64,156
)
 
$
(33,386
)
 
 
 
 
 
 
 
 
Net income (loss)
$
19,243

 
$
31,368

 
$
(64,157
)
 
$
(33,386
)
Other comprehensive income, (net of tax):
 
 
 
 
 
 
 
Foreign currency translation adjustment
6,662

 
(1,282
)
 
11,266

 
(1,942
)
Unrealized gain on cash flow hedging derivatives
2,116

 
1,993

 
4,134

 
3,987

Other comprehensive income, (net of tax)
8,778

 
711

 
15,400

 
2,045

Total comprehensive income (loss)
$
28,021

 
$
32,079

 
$
(48,757
)
 
$
(31,341
)
Basic income (loss) per limited partner unit:
 
 
 
 
 
 
 
Weighted average limited partner units outstanding
56,231

 
56,076

 
56,192

 
56,025

Net income (loss) per limited partner unit
$
0.34

 
$
0.56

 
$
(1.14
)
 
$
(0.60
)
Diluted income (loss) per limited partner unit:
 
 
 
 
 
 
 
Weighted average limited partner units outstanding
56,727

 
56,598

 
56,192

 
56,025

Net income (loss) per limited partner unit
$
0.34

 
$
0.55

 
$
(1.14
)
 
$
(0.60
)
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

4


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY
(In thousands)
 
Six months ended
 
6/24/2018
 
6/25/2017
Limited Partnership Units Outstanding
 
 
 
Beginning balance
56,359

 
56,201

Limited partnership unit options exercised
6

 
10

Limited partnership unit forfeitures
(2
)
 
(2
)
Issuance of limited partnership units as compensation
78

 
31

 
56,441

 
56,240

Limited Partners’ Equity
 
 
 
Beginning balance
$
81,589

 
$
52,288

Net loss
(64,156
)
 
(33,386
)
Partnership distribution declared ($1.78 and $1.71 per limited partnership unit)
(100,557
)
 
(96,329
)
Reclassification of stranded tax effect
391

 

Expense recognized for limited partnership unit options
125

 

Tax effect of units involved in treasury unit transactions
(3,045
)
 
(1,377
)
Issuance of limited partnership units as compensation
(782
)
 
7,889

 
(86,435
)
 
(70,915
)
General Partner’s Equity
 
 
 
Beginning balance

 

Net loss
(1
)
 

Partnership distribution declared
(1
)
 
(1
)
 
(2
)
 
(1
)
Special L.P. Interests
5,290

 
5,290

 
 
 
 
Accumulated Other Comprehensive Income
 
 
 
Foreign currency translation adjustment:
 
 
 
Beginning balance
4,042

 
18,891

Period activity, net of tax $2,302 and $0
11,266

 
(1,942
)
 
15,308

 
16,949

Unrealized loss on cash flow hedging derivatives:
 
 
 
Beginning balance
(7,975
)
 
(15,950
)
Period activity, net of tax ($596) and ($742)
4,134

 
3,987

Reclassification of stranded tax effect
(391
)
 

 
(4,232
)
 
(11,963
)
 
11,076

 
4,986

Total Partners’ Equity
$
(70,071
)
 
$
(60,640
)
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.


5


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
Six months ended
 
6/24/2018
 
6/25/2017
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
Net loss
$
(64,157
)
 
$
(33,386
)
Adjustments to reconcile net loss to net cash from operating activities:
 
 
 
Depreciation and amortization
57,740

 
56,177

Loss on early debt extinguishment
1,073

 
23,115

Non-cash foreign currency (gain) loss on debt
26,541

 
(5,541
)
Other non-cash expenses
24,123

 
24,410

Net change in working capital
40,996

 
22,598

Net change in other assets/liabilities
(551
)
 
296

Net cash from operating activities
85,765

 
87,669

CASH FLOWS FOR INVESTING ACTIVITIES
 
 
 
Capital expenditures
(100,637
)
 
(123,694
)
Net cash for investing activities
(100,637
)
 
(123,694
)
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES
 
 
 
Net borrowings on revolving credit loans
25,000

 

Term debt borrowings

 
750,000

Note borrowings

 
500,000

Term debt payments

 
(602,850
)
Note payments, including amounts paid for early termination

 
(515,458
)
Distributions paid to partners
(100,558
)
 
(96,330
)
Payment of debt issuance costs and original issue discount
(2,512
)
 
(18,381
)
Exercise of limited partnership unit options
125

 

Tax effect of units involved in treasury unit transactions
(3,045
)
 
(1,377
)
Payments related to tax withholding for equity compensation
(6,930
)
 
(2,053
)
Net cash from (for) financing activities
(87,920
)
 
13,551

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
(3,334
)
 
841

CASH AND CASH EQUIVALENTS
 
 
 
Net decrease for the period
(106,126
)
 
(21,633
)
Balance, beginning of period
166,245

 
122,716

Balance, end of period
$
60,119

 
$
101,083

SUPPLEMENTAL INFORMATION
 
 
 
Cash payments for interest expense
$
39,854

 
$
40,103

Interest capitalized
1,771

 
1,536

Cash payments for income taxes, net of refunds
11,101

 
12,534

Capital expenditures in accounts payable
7,859

 
5,955

The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

6


CEDAR FAIR, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED JUNE 24, 2018 AND JUNE 25, 2017

The accompanying unaudited condensed consolidated financial statements have been prepared from the financial records of Cedar Fair, L.P. (the Partnership) without audit and reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to fairly present the results of the interim periods covered in this report. Due to the seasonal nature of the Partnership's amusement and water park operations, the results for any interim period may not be indicative of the results expected for the full fiscal year.

(1) Significant Accounting and Reporting Policies:
Except for the changes described below, the Partnership’s unaudited condensed consolidated financial statements for the periods ended June 24, 2018 and June 25, 2017 included in this Form 10-Q report have been prepared in accordance with the accounting policies described in the Notes to Consolidated Financial Statements for the year ended December 31, 2017, which were included in the Form 10-K filed on February 23, 2018. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the Commission). These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Form 10-K referred to above.

The Partnership adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09") effective January 1, 2018 using the modified retrospective method. The adoption of the standard did not have a material effect on the consolidated financial statements. The Partnership's accounting policy as a result of adopting ASU 2014-09 is discussed below:
Revenue Recognition and related receivables and contract liabilities
As disclosed within the consolidated statements of operations and comprehensive income, revenues are generated from sales of (1) admission to the Partnership's amusement parks and water parks, (2) food, merchandise and games both inside and outside the parks, and (3) accommodations, extra-charge products, and other revenue sources. Admission revenues include amounts paid to gain admission into the Partnership's parks, including parking fees. Revenues related to extra-charge products, including premium benefit offerings such as front-of-line products, and online advanced purchase transaction fees charged to customers are included in "Accommodations, extra-charge products and other". Due to the Partnership's highly seasonal operations, a substantial portion of the Partnership's revenues are generated during an approximate 130- to 140-day operating season. Most revenues are recognized on a daily basis based on actual guest spend at the properties. Revenues from multi-use products, including season-long products for admission, dining, beverage and other products, are recognized over the estimated number of uses expected for each type of product. The estimated number of uses is reviewed and may be updated periodically during the operating season prior to the ticket or product expiration, which generally occurs no later than the close of the operating season. The number of uses is estimated based on historical usage adjusted for current period trends. For any bundled products that include multiple performance obligations, revenue is allocated using the retail price of each distinct performance obligation and any inherent discounts are allocated based on the gross margin and expected redemption of each performance obligation. The Partnership does not typically provide for refunds or returns.

In some instances, the Partnership arranges with outside parties ("concessionaires") to provide goods to guests, typically food and merchandise, and the Partnership acts as an agent, resulting in net revenue recorded within the income statement. Concessionaire arrangement revenues are recognized over the operating season and are variable. Sponsorship revenues and marina revenues, which are classified as "Accommodations, extra-charge products and other" within the income statement, are recognized over the park operating season which represents the period in which the performance obligations are satisfied. Sponsorship revenues are typically fixed. However, some sponsorship revenues are variable based on achievement of specified operating metrics. The Partnership estimates variable revenues and performs a constraint analysis using both historical information and current trends to determine the amount of revenue that is not probable of a significant reversal.

Many products, including season-long products, are sold to customers in advance, resulting in a contract liability ("deferred revenue"). Deferred revenue is at its highest immediately prior to the peak summer season, and at its lowest in the fall after the peak summer season and at the beginning of the selling season for the next year's products. Season-long products represent the majority of the deferred revenue balance in any given period.

Of the $86.1 million of deferred revenue recorded as of January 1, 2018, 88% was related to season-long products. The remainder was related to deferred online advanced purchase transaction fees charged to customers, advanced ticket sales, marina deposits, advanced resort reservations, and other deferred revenue. Most deferred revenue outstanding as of January 1, 2018 will be recognized by December 31, 2018 with the exception of an immaterial amount of deferred revenue for prepaid products such as

7


gift cards and prepaid games cards. During the six months ended June 24, 2018, approximately $35.8 million of the deferred revenue balance as of January 1, 2018 was recognized. The difference in the opening and closing balances of the Partnership's deferred revenue balance in the current period is attributable to additional sales for the current year's operating season offset by revenue recognized during the first six months of 2018.

Payment is due immediately on the transaction date for most products. The Partnership's receivable balance includes outstanding amounts on installment purchase plans which are offered for season-long products (and other select products for specific time periods), and includes sales to retailers, group sales and catering activities which are billed. Installment purchase plans include three month, four month, six month and nine month plans. Payment terms for billings are typically net 30 days. Receivables are highest in the peak summer months and the lowest in the winter months. The Partnership is not exposed to a significant concentration of customer credit risk.

Most deferred revenue from contracts with customers is classified as current within the balance sheet. However, a portion of deferred revenue from contracts with customers is classified as long-term during the third quarter related to season-long products sold in the current season for use in the subsequent season. Season-long products are sold beginning in August of the year preceding the operating season. Season-long products may be recognized 12 to 16 months after purchase depending on the date of sale. The Partnership estimates the number of uses expected outside of the next twelve months for each type of product and classifies the related deferred revenue as long-term.

With the exception of the long-term deferred revenue described above, the Partnership's contracts with customers have an original duration of one year or less. For these short-term contracts, the Partnership uses the practical expedient, a relief provided in the accounting standard to simplify compliance, applicable to such contracts and has not disclosed the transaction price for the remaining performance obligations as of the end of each reporting period or when the Company expects to recognize this revenue. Further, the Partnership has elected to recognize incremental costs of obtaining a contract as an expense when incurred as the amortization period of the asset would be less than one year. Lastly, the Partnership has elected not to adjust consideration for the effects of significant financing components in the form of installment purchase plans as the period between when the entity transfers the promised service to the customer and when the customer pays for that service does not exceed one year.
Reclassifications
Certain prior year prepaid supplies amounts of $1.0 million have been reclassified to inventory in the unaudited condensed consolidated balance sheet for the period ended June 25, 2017 to conform to fiscal 2018 presentation.
New Accounting Pronouncements
In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases ("ASU 2016-02"). The ASU requires the recognition of lease assets and lease liabilities within the balance sheet by lessees for operating leases, as well as requires additional disclosures in the consolidated financial statements regarding the amount, timing, and uncertainty of cash flows arising from leases. The ASU does not significantly change the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee, nor does the ASU change the accounting applied by a lessor. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. The ASU can be adopted using either the modified retrospective approach, which requires application of the new standard at the beginning of the earliest comparative period presented, or the alternative approach, which requires application of the new standard at the beginning of the standard's effective date. The Partnership expects to adopt this standard in the first quarter of 2019 using the alternative approach. While the Partnership is still in the process of evaluating the effect this standard will have on the consolidated financial statements and related disclosures, the Partnership anticipates recognizing a right-of-use asset and corresponding lease liability on the consolidated balance sheet for the Santa Clara land lease, as well as other operating leases, upon adoption.
In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Comprehensive Income ("ASU 2018-02"). The ASU allows a reclassification from accumulated other comprehensive income to retained earnings of stranded tax effects resulting from the Tax Cuts and Jobs Act. ASU 2018-02 is effective for fiscal years after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period, and the amendments can be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Partnership elected to adopt ASU 2018-02 in the first quarter of 2018. The amendment was applied in the period of adoption and resulted in a $0.4 million reclassification from accumulated other comprehensive income to limited partners' equity during the first quarter ended March 25, 2018.


8


(2) Interim Reporting:
The Partnership owns and operates eleven amusement parks, two separately gated outdoor water parks, one indoor water park and four hotels. The Partnership's seasonal amusement parks are generally open during weekends beginning in April or May, and then daily from Memorial Day until Labor Day, after which they are open during weekends in September and, in most cases, October for Halloween events. The two separately gated outdoor water parks also operate seasonally, generally from Memorial Day to Labor Day, plus some additional weekends before and after this period. As a result, a substantial portion of the Partnership’s revenues from these parks are generated during an approximate 130- to 140-day operating season with the major portion concentrated in the third quarter during the peak vacation months of July and August. Five of the seasonal properties are open approximately 25 to 30 days to include WinterFest, a holiday event operating during November and December showcasing holiday shows and festivities. Knott's Berry Farm continues to be open daily on a year-round basis. Castaway Bay is generally open daily from Memorial Day to Labor Day with an additional limited daily schedule for the balance of the year.

To assure that these highly seasonal operations will not result in misleading comparisons of current and subsequent interim periods, the Partnership has adopted the following accounting and reporting procedures for its seasonal parks: (a) revenues from multi-use products are recognized over the estimated number of uses expected for each type of product; and the estimated number of uses is reviewed and may be updated periodically during the operating season prior to the ticket or product expiration, which generally occurs no later than the close of the operating season; (b) depreciation, certain advertising and certain seasonal operating costs are expensed over each park’s operating season, including some costs incurred prior to the season, which are deferred and amortized over the season; and (c) all other costs are expensed as incurred or ratably over the entire year.

(3) Long-Lived Assets:
Long-lived assets are reviewed for impairment upon the occurrence of events or changes in circumstances that would indicate that the carrying value of the assets may not be recoverable. In order to determine if an asset has been impaired, assets are grouped and tested at the lowest level for which identifiable, independent cash flows are available. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in expected future cash flows; a sustained, significant decline in equity price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on the Partnership's consolidated financial statements.

Non-operating assets are evaluated for impairment based on changes in market conditions. When changes in market conditions are observed, impairment is estimated using a market-based approach. If the estimated fair value of the non-operating assets is less than their carrying value, an impairment charge is recorded for the difference.

During the third quarter of 2016, the Partnership ceased operations of one of its separately gated outdoor water parks, Wildwater Kingdom, located near Cleveland in Aurora, Ohio. At the date that Wildwater Kingdom ceased operations, the only remaining long-lived asset was the approximate 670 acres of land owned by the Partnership. This land had an associated carrying value of $17.1 million. The Partnership assessed the remaining asset and concluded there was no impairment during the third quarter of 2016. In the fourth quarter of 2017, the Partnership recorded a $7.6 million impairment charge based on information from ongoing marketing activities. The amount was recorded in "Loss on impairment / retirement of fixed assets, net" in the consolidated statement of operations and comprehensive income. The remaining Wildwater Kingdom acreage, reduced by acreage sold, is classified as assets held-for-sale within "Other Assets" in the unaudited condensed consolidated balance sheet ($9.0 million as of June 24, 2018, $9.0 million as of December 31, 2017 and $17.0 million as of June 25, 2017).

9


(4) Goodwill and Other Intangible Assets:
Goodwill and other indefinite-lived intangible assets, including trade-names, are reviewed for impairment annually, or more frequently if indicators of impairment exist. As of June 24, 2018, there were no indicators of impairment. The Partnership's annual testing date is the first day of the fourth quarter. There were no impairments for any period presented.

A summary of changes in the Partnership’s carrying value of goodwill for the six months ended June 24, 2018 and June 25, 2017 is as follows:
(In thousands)
 
Goodwill
(gross)
 
Accumulated
Impairment
Losses
 
Goodwill
(net)
Balance at December 31, 2017
 
$
263,698

 
$
(79,868
)
 
$
183,830

Foreign currency translation
 
(3,644
)
 

 
(3,644
)
Balance at June 24, 2018
 
$
260,054

 
$
(79,868
)
 
$
180,186

 
 
 
 
 
 
 
Balance at December 31, 2016
 
$
259,528

 
$
(79,868
)
 
$
179,660

Foreign currency translation
 
710

 

 
710

Balance at June 25, 2017
 
$
260,238

 
$
(79,868
)
 
$
180,370


As of June 24, 2018, December 31, 2017, and June 25, 2017, the Partnership’s other intangible assets consisted of the following:
(In thousands)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Value
June 24, 2018
 
 
 
 
 
 
Other intangible assets:
 
 
 
 
 
 
Trade names
 
$
35,720

 
$

 
$
35,720

License / franchise agreements
 
3,357

 
(2,086
)
 
1,271

Total other intangible assets
 
$
39,077

 
$
(2,086
)
 
$
36,991

 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
Other intangible assets:
 
 
 
 
 
 
Trade names
 
$
36,531

 
$

 
$
36,531

License / franchise agreements
 
3,360

 
(1,827
)
 
1,533

Total other intangible assets
 
$
39,891

 
$
(1,827
)
 
$
38,064

 
 
 
 
 
 
 
June 25, 2017
 
 
 
 
 
 
Other intangible assets:
 
 
 
 
 
 
Trade names
 
$
35,761

 
$

 
$
35,761

License / franchise agreements
 
3,308

 
(1,416
)
 
1,892

Total other intangible assets
 
$
39,069

 
$
(1,416
)
 
$
37,653


Amortization expense of other intangible assets is expected to continue to be immaterial going forward.

10


(5) Long-Term Debt:
Long-term debt as of June 24, 2018, December 31, 2017, and June 25, 2017 consisted of the following:
(In thousands)
June 24, 2018
 
December 31, 2017
 
June 25, 2017
 
 
 
 
 
 
Revolving credit facility (due 2022)
$
25,000

 
$

 
$

Term debt (1)
 
 
 
 
 
April 2017 U.S. term loan averaging 3.54% (due 2017-2024)
735,000

 
735,000

 
750,000

Notes
 
 
 
 
 
April 2017 U.S. fixed rate notes at 5.375% (due 2027)
500,000

 
500,000

 
500,000

June 2014 U.S. fixed rate notes at 5.375% (due 2024)
450,000

 
450,000

 
450,000

 
1,710,000

 
1,685,000

 
1,700,000

Less current portion
(1,875
)
 

 
(7,500
)
 
1,708,125

 
1,685,000

 
1,692,500

Less debt issuance costs and original issue discount
(23,793
)
 
(24,485
)
 
(24,609
)
 
$
1,684,332

 
$
1,660,515

 
$
1,667,891

(1)
The average interest rate is calculated over the life of the instrument and does not reflect the effect of interest rate swap agreements (see Note 6).
In April 2017, the Partnership issued $500 million of 5.375% senior unsecured notes ("April 2017 notes"), maturing in 2027. The net proceeds from the offering of the April 2017 notes, together with borrowings under the 2017 Credit Agreement (defined below), were used to redeem all of the Partnership's 5.25% senior unsecured notes due 2021 ("March 2013 notes"), and pay accrued interest and transaction fees and expenses, to repay in full all amounts outstanding under its existing credit facilities and for general corporate purposes. The redemption of the March 2013 notes and repayments of the amounts outstanding under the existing credit facilities resulted in the write-off of debt issuance costs of $7.7 million and debt premium payments of $15.5 million. Accordingly, the Partnership recorded a loss on early debt extinguishment of $23.1 million during 2017.

Concurrently with the April 2017 notes issuance, the Partnership amended and restated its existing $885 million credit agreement (the "2013 Credit Agreement"), which included a $630 million senior secured term loan facility and a $255 million senior secured revolving credit facility. The $1,025 million amended and restated credit agreement (the "2017 Credit Agreement") includes a $750 million senior secured term loan facility and a $275 million senior secured revolving credit facility. The 2017 Credit Agreement was amended on March 14, 2018 (subsequently referred to as the "Amended 2017 Credit Agreement"). Specifically, the interest rate for the senior secured term loan facility was amended to London InterBank Offered Rate ("LIBOR") plus 175 basis points (bps). The pricing terms for the amendment reflected $0.9 million of Original Issue Discount ("OID") and resulted in the write-off of debt issuance costs of $1.1 million which was recorded as a loss on early debt extinguishment during the first quarter of 2018. The senior secured term loan facility matures April 15, 2024 and amortizes at $7.5 million annually. The facilities provided under the Amended 2017 Credit Agreement are collateralized by substantially all of the assets of the Partnership.

The senior secured revolving credit facility under the Amended 2017 Credit Agreement has a combined limit of $275 million with a Canadian sub-limit of $15 million. Borrowings under the senior secured revolving credit facility bear interest at LIBOR or Canadian Dollar Offered Rate ("CDOR") plus 200 bps. The revolving credit facility is scheduled to mature in April 2022 and also provides for the issuance of documentary and standby letters of credit. The Amended 2017 Credit Agreement requires the payment of a 37.5 bps commitment fee per annum on the unused portion of the credit facilities.

The April 2017 notes pay interest semi-annually in April and October, with the principal due in full on April 15, 2027. Prior to April 15, 2020, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 105.375% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any. The notes may be redeemed, in whole or in part, at any time prior to April 15, 2022 at a price equal to 100% of the principal amount of the notes redeemed plus a "make-whole" premium together with accrued and unpaid interest and additional interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed.

In June 2014, the Partnership issued $450 million of 5.375% senior unsecured notes ("June 2014 notes"). The June 2014 notes pay interest semi-annually in June and December, with the principal due in full on June 1, 2024. The notes may be redeemed, in whole or in part, at any time prior to June 1, 2019 at a price equal to 100% of the principal amount of the notes redeemed together

11


plus a "make-whole" premium together with accrued and unpaid interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed.

The Amended 2017 Credit Agreement includes a Consolidated Leverage Ratio, which if breached for any reason and not cured could result in an event of default. The ratio is set at a maximum of 5.50x Consolidated Total Debt-to-Consolidated EBITDA. As of June 24, 2018, the Partnership was in compliance with this financial condition covenant and all other financial covenants under the Amended 2017 Credit Agreement.

The Partnership's long-term debt agreements include Restricted Payment provisions. Pursuant to the terms of the indenture governing the Partnership's June 2014 notes, which includes the most restrictive of these Restricted Payments provisions, the Partnership can make Restricted Payments of $60 million annually so long as no default or event of default has occurred and is continuing; and the Partnership can make additional Restricted Payments if the Partnership's pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio is less than or equal to 5.00x.

As market conditions warrant, the Partnership may from time to time repurchase debt securities issued by the Partnership, in privately negotiated or open market transactions, by tender offer, exchange offer or otherwise.

(6) Derivative Financial Instruments:
Derivative financial instruments are used within the Partnership’s overall risk management program to manage certain interest rate and foreign currency risks. By utilizing a derivative instrument to hedge exposure to LIBOR rate changes, the Partnership is exposed to counterparty credit risk, in particular the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, hedging instruments are placed with a counterparty that the Partnership believes poses minimal credit risk. The Partnership does not use derivative financial instruments for trading purposes.

During the first quarter of 2016, the Partnership amended its four interest rate swap agreements to extend each of the maturities to December 31, 2020 and convert $500 million of variable-rate debt to a rate of 4.39%. During the second quarter of 2018, the Partnership entered into four additional interest rate swap agreements that convert the same notional amount to a rate of 4.63% for the period December 31, 2020 through December 31, 2023. None of the interest rate swap agreements are designated as hedging instruments. The fair market value of the swap portfolio was recorded in the unaudited condensed consolidated balance sheets within "Other Assets" as of June 24, 2018 and within "Derivative Liability" as of December 31, 2017 and June 25, 2017 as follows:
(In thousands)
 
June 24, 2018
 
December 31, 2017
 
June 25, 2017
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
Interest rate swaps
 
$
542

 
$
(8,722
)
 
$
(18,166
)
Instruments that do not qualify for hedge accounting or were de-designated are prospectively adjusted to fair value each reporting period through "Net effect of swaps" in the unaudited condensed consolidated statements of operations and comprehensive income. The amounts that were previously recorded as a component of AOCI prior to the de-designation are reclassified to earnings, and a corresponding realized gain or loss is recognized when the forecasted cash flow occurs. As a result of the first quarter 2016 amendments, the previously existing interest rate swap agreements were de-designated, and the amounts previously recorded in AOCI for these agreements are being amortized into earnings through the original December 31, 2018 maturity. As of June 24, 2018, approximately $4.7 million of losses remain in AOCI related to the effective cash flow hedge contracts prior to de-designation, all of which will be reclassified to earnings within the next twelve months.
The gains (losses) recognized in income on derivatives not designated as cash flow hedges were recorded in "Net effect of swaps" within the income statement for the periods presented as follows:
 
 
Three months ended
 
Six months ended
(In thousands)
 
June 24, 2018
 
June 25, 2017
 
June 24, 2018
 
June 25, 2017
Change in fair market value
 
$
3,271

 
$
(2,003
)
 
$
9,264

 
$
60

Amortization of amounts in AOCI
 
(2,365
)
 
(2,365
)
 
(4,730
)
 
(4,729
)
Net effect of swaps
 
$
906

 
$
(4,368
)
 
$
4,534

 
$
(4,669
)

12


(7) Fair Value Measurements:
The FASB's Accounting Standards Codification (ASC) 820 - Fair Value Measurements and Disclosures emphasizes that fair value is a market-based measurement that should be determined based on assumptions (inputs) that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable, and valuation techniques used to measure fair value should maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Accordingly, FASB ASC 820 establishes a hierarchal disclosure framework that ranks the quality and reliability of information used to determine fair values. The hierarchy is associated with the level of pricing observability utilized in measuring fair value and defines three levels of inputs to the fair value measurement process. Quoted prices are the most reliable valuation inputs, whereas model values that include inputs based on unobservable data are the least reliable. Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety.

The three broad levels of inputs defined by the fair value hierarchy are as follows:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The table below presents the balances of assets and liabilities measured at fair value as of June 24, 2018, December 31, 2017, and June 25, 2017 on a recurring basis as well as the fair values of other financial instruments:
(In thousands)
Unaudited Condensed 
Consolidated Balance Sheet Location
Fair Value Hierarchy Level
 
June 24, 2018
 
December 31, 2017
 
June 25, 2017
 
Carrying Value
Fair 
Value
 
Carrying Value
Fair 
Value
 
Carrying Value
Fair 
Value
Financial assets (liabilities) measured on a recurring basis:
Short-term investments
Other current assets
Level 1
 
$
932

$
932

 
$
736

$
736

 


Interest rate swaps
Other Assets (Derivative Liability)
Level 2
 
$
542

$
542

 
$
(8,722
)
$
(8,722
)
 
$
(18,166
)
$
(18,166
)
Other financial assets (liabilities):
April 2017 term debt
Long-Term Debt (1)
Level 2
 
$
(733,125
)
$
(736,791
)
 
$
(735,000
)
$
(742,350
)
 
$
(742,500
)
$
(747,141
)
June 2014 notes
Long-Term Debt (1)
Level 1
 
$
(450,000
)
$
(451,125
)
 
$
(450,000
)
$
(469,125
)
 
$
(450,000
)
$
(475,875
)
April 2017 notes
Long-Term Debt (1)
Level 1(2)
 
$
(500,000
)
$
(496,250
)
 
$
(500,000
)
$
(525,000
)
 
$
(500,000
)
$
(529,375
)

(1)
Carrying values of long-term debt balances are before reductions for debt issuance costs and original issue discount of $23.8 million, $24.5 million, and $24.6 million as of June 24, 2018, December 31, 2017, and June 25, 2017, respectively.
(2)
The April 2017 notes were based on Level 1 inputs as of June 24, 2018 and Level 2 inputs as of December 31, 2017 and June 25, 2017.

Fair values of the interest rate swap agreements are determined using significant inputs, including the LIBOR forward curves, which are considered Level 2 observable market inputs.

As of December 31, 2017, the Partnership measured the remaining land at Wildwater Kingdom, one of the Partnership's separately gated outdoor water parks which ceased operations in 2016, at fair value less cost to sell based on Level 3 unobservable market input. In the fourth quarter of 2017, the Partnership recorded a $7.6 million impairment charge based on information from ongoing marketing activities. This amount was recorded in "Loss on impairment / retirement of fixed assets, net" in the consolidated statement of operations and comprehensive income.

The carrying value of cash and cash equivalents, revolving credit loans, accounts receivable, current portion of term debt, accounts payable, and accrued liabilities approximates fair value because of the short maturity of these instruments. There were no assets measured at fair value on a non-recurring basis as of June 24, 2018 or June 25, 2017.

13


(8) Earnings per Unit:
Net income (loss) per limited partner unit is calculated based on the following unit amounts:
 
Three months ended
 
Six months ended
 
6/24/2018
 
6/25/2017
 
6/24/2018
 
6/25/2017
 
(In thousands, except per unit amounts)
Basic weighted average units outstanding
56,231

 
56,076

 
56,192

 
56,025

Effect of dilutive units:
 
 
 
 
 
 
 
Deferred units
46

 
40

 

 

Restricted units
277

 
288

 

 

Unit options
173

 
194

 

 

Diluted weighted average units outstanding
56,727

 
56,598

 
56,192

 
56,025

Net income (loss) per unit - basic
$
0.34

 
$
0.56

 
$
(1.14
)
 
$
(0.60
)
Net income (loss) per unit - diluted
$
0.34

 
$
0.55

 
$
(1.14
)
 
$
(0.60
)

(9) Income and Partnership Taxes:
Under the applicable accounting rules, income taxes are recognized for the amount of taxes payable by the Partnership’s corporate subsidiaries for the current year and for the impact of deferred tax assets and liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. The income tax provision (benefit) for interim periods is determined by applying an estimated annual effective tax rate to the quarterly income (loss) of the Partnership’s corporate subsidiaries. In addition to income taxes on its corporate subsidiaries, the Partnership is subject to a publicly traded partnership tax (PTP tax) on partnership-level gross income (net revenues less cost of food, merchandise, and games). As such, the Partnership’s total provision (benefit) for taxes includes amounts for both the PTP tax and for income taxes on its subsidiaries.

As of the end of the second quarter of 2018, the Partnership has recorded $0.7 million of unrecognized tax benefits including interest and/or penalties related to state and local tax filing positions. The Partnership recognizes interest and/or penalties related to unrecognized tax benefits in the income tax provision. The Partnership does not anticipate that the balance of the unrecognized tax benefit will change significantly over the next 12 months.

On December 22, 2017, the Tax Cuts and Jobs Act (the "Act"), was signed into law.  The Act includes numerous tax law changes, including a reduction in the federal corporate income tax rate from 35% to 21%.  The change in tax rates necessitated the remeasurement of deferred tax balances that are expected to reverse following enactment using the applicable tax rates.  As a result of the remeasurement of the net deferred tax liability, the Partnership realized a $49.2 million deferred tax benefit during the fourth quarter of 2017.  The amounts recorded to reflect the effects of the Act were and remain provisional and are subject to change in accordance with SAB 118.  The Partnership expects to complete these calculations and record the final effects of the Act before the end of the fourth quarter of 2018.

(10) Contingencies:
The Partnership is a party to a number of lawsuits arising in the normal course of business. In the opinion of management, none of these matters are expected to have a material effect in the aggregate on the Partnership's financial statements.

14


(11) Changes in Accumulated Other Comprehensive Income by Component:
The following tables reflect the changes in accumulated other comprehensive income related to limited partners' equity for the three months ended June 24, 2018 and June 25, 2017:

Changes in Accumulated Other Comprehensive Income by Component
(In thousands)
 
Gains and Losses on Cash Flow Hedges
 
Foreign Currency Translation
 
Total
Balance at March 25, 2018
 
$
(6,348
)
 
$
8,646

 
$
2,298

 
 
 
 
 
 
 
 
Other comprehensive income before reclassifications, net of tax $1,157
 

 
6,662

 
6,662

 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income, net of tax ($249)
 
2,116

 

 
2,116

 
 
 
 
 
 
 
 
Net other comprehensive income
 
2,116

 
6,662

 
8,778

 
 
 
 
 
 
 
 
Balance at June 24, 2018
 
$
(4,232
)
 
$
15,308

 
$
11,076


Changes in Accumulated Other Comprehensive Income by Component
(In thousands)
 
Gains and Losses on Cash Flow Hedges
 
Foreign Currency Translation
 
Total
Balance at March 26, 2017
 
$
(13,956
)
 
$
18,231

 
$
4,275

 
 
 
 
 
 
 
 
Other comprehensive income before reclassifications
 

 
(1,282
)
 
(1,282
)
 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income, net of tax ($371)
 
1,993

 

 
1,993

 
 
 
 
 
 
 
 
Net other comprehensive income
 
1,993

 
(1,282
)
 
711

 
 
 
 
 
 
 
 
Balance at June 25, 2017
 
$
(11,963
)
 
$
16,949

 
$
4,986


Reclassifications Out of Accumulated Other Comprehensive Income
Details about Accumulated Other Comprehensive Income Components
 
Amount Reclassified from Accumulated Other Comprehensive Income
 
Affected Line Item in the Statement Where Net Income is Presented
(In thousands)
 
Three months ended
6/24/2018
 
Three months ended
6/25/2017
 
 
Interest rate contracts
 
$
2,365

 
$
2,364

 
Net effect of swaps
Provision for taxes
 
(249
)
 
(371
)
 
Provision (benefit) for taxes
Losses on cash flow hedges
 
$
2,116

 
$
1,993

 
Net of tax

15


The following tables reflect the changes in accumulated other comprehensive income related to limited partners' equity for the six months ended June 24, 2018 and June 25, 2017:

Changes in Accumulated Other Comprehensive Income by Component
(In thousands)
 
Gains and Losses on Cash Flow Hedges
 
Foreign Currency Translation
 
Total
Balance at December 31, 2017
 
$
(7,975
)
 
$
4,042

 
$
(3,933
)
 
 
 
 
 
 
 
 
Other comprehensive income before reclassifications, net of tax $2,302
 

 
11,266

 
11,266

 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income, net of tax ($596)
 
4,134

 

 
4,134

 
 
 
 
 
 
 
 
Net other comprehensive income
 
4,134

 
11,266

 
15,400

 
 
 
 
 
 
 
 
Reclassification of stranded tax effect
 
(391
)
 

 
(391
)
 
 
 
 
 
 
 
 
Balance at June 24, 2018
 
$
(4,232
)
 
$
15,308

 
$
11,076


Changes in Accumulated Other Comprehensive Income by Component
(In thousands)
 
Gains and Losses on Cash Flow Hedges
 
Foreign Currency Translation
 
Total
Balance at December 31, 2016
 
$
(15,950
)
 
$
18,891

 
$
2,941

 
 
 
 
 
 
 
 
Other comprehensive income before reclassifications
 

 
(1,942
)
 
(1,942
)
 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income, net of tax ($742)
 
3,987

 

 
3,987

 
 
 
 
 
 
 
 
Net other comprehensive income
 
3,987

 
(1,942
)
 
2,045

 
 
 
 
 
 
 
 
Balance at June 25, 2017
 
$
(11,963
)
 
$
16,949

 
$
4,986


Reclassifications Out of Accumulated Other Comprehensive Income
Details about Accumulated Other Comprehensive Income Components
 
Amount Reclassified from Accumulated Other Comprehensive Income
 
Affected Line Item in the Statement Where Net Income is Presented
(In thousands)
 
Six months ended
6/24/2018
 
Six months ended
6/25/2017
 
 
Interest rate contracts
 
$
4,730

 
$
4,729

 
Net effect of swaps
Provision for taxes
 
(596
)
 
(742
)
 
Provision (benefit) for taxes
Losses on cash flow hedges
 
$
4,134

 
$
3,987

 
Net of tax


16


(12) Consolidating Financial Information of Guarantors and Issuers of June 2014 Notes:
Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), and Magnum Management Corporation ("Magnum") are the co-issuers of the Partnership's June 2014 Notes (see Note 5). The notes have been fully and unconditionally guaranteed, on a joint and several basis, by each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum) that guarantees the Partnership's senior secured credit facilities. There are no non-guarantor subsidiaries.

The following consolidating schedules present condensed financial information for Cedar Fair, L.P., Cedar Canada, and Magnum, the co-issuers, and each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum), the guarantors (on a combined basis), as of June 24, 2018, December 31, 2017, and June 25, 2017 and for the three- and six-month periods ended June 24, 2018 and June 25, 2017. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, the accompanying unaudited condensed consolidating financial statements have been included.


17


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
June 24, 2018
(In thousands)
 
 
Cedar Fair L.P.
(Parent)
 
Co-Issuer Subsidiary (Magnum)
 
Co-Issuer Subsidiary (Cedar Canada)
 
Guarantor Subsidiaries
 
Eliminations
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$

 
$
38,934

 
$
21,874

 
$
(689
)
 
$
60,119

Receivables
 

 
1,198

 
66,120

 
869,175

 
(851,114
)
 
85,379

Inventories
 

 

 
3,821

 
43,179

 

 
47,000

Other current assets
 
398

 
3,293

 
2,429

 
36,476

 
(1,952
)
 
40,644

 
 
398

 
4,491

 
111,304

 
970,704

 
(853,755
)
 
233,142

Property and Equipment, net
 

 
819

 
174,962

 
1,443,217

 

 
1,618,998

Investment in Park
 
476,659

 
1,009,725

 
243,201

 
186,540

 
(1,916,125
)
 

Goodwill
 
674

 

 
59,907

 
119,605

 

 
180,186

Other Intangibles, net
 

 

 
13,362

 
23,629

 

 
36,991

Other Assets
 
74

 
467

 
38

 
9,320

 

 
9,899

 
 
$
477,805

 
$
1,015,502

 
$
602,774

 
$
2,753,015

 
$
(2,769,880
)
 
$
2,079,216

LIABILITIES AND PARTNERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Current maturities of long-term debt
 
$

 
$
328

 
$

 
$
1,547

 
$

 
$
1,875

Accounts payable
 
542,730

 
313,605

 
5,069

 
39,950

 
(851,803
)
 
49,551

Deferred revenue
 

 

 
20,950

 
190,223

 

 
211,173

Accrued interest
 
137

 
92

 
1,571

 
7,465

 

 
9,265

Accrued taxes
 
1,453

 

 
3,668

 
9,571

 
(1,952
)
 
12,740

Accrued salaries, wages and benefits
 

 
23,837

 
2,391

 

 

 
26,228

Self-insurance reserves
 

 
10,355

 
1,482

 
13,435

 

 
25,272

Other accrued liabilities
 
3,556

 
7,014

 
670

 
13,155

 

 
24,395

 
 
547,876

 
355,231

 
35,801

 
275,346

 
(853,755
)
 
360,499

Deferred Tax Liability
 

 
22

 
11,507

 
81,945

 

 
93,474

Other Liabilities
 

 
839

 

 
10,143

 

 
10,982

Long-Term Debt:
 
 
 
 
 
 
 
 
 
 
 
 
Revolving credit loans
 

 

 

 
25,000

 

 
25,000

Term debt
 

 
127,075

 

 
595,111

 

 
722,186

Notes
 

 

 
445,790

 
491,356

 

 
937,146

 
 

 
127,075

 
445,790

 
1,111,467

 

 
1,684,332

 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
(70,071
)
 
532,335

 
109,676

 
1,274,114

 
(1,916,125
)
 
(70,071
)
 
 
$
477,805

 
$
1,015,502

 
$
602,774

 
$
2,753,015

 
$
(2,769,880
)
 
$
2,079,216


18


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2017
(In thousands)
 
 
Cedar Fair L.P.
(Parent)
 
Co-Issuer Subsidiary (Magnum)
 
Co-Issuer Subsidiary (Cedar Canada)
 
Guarantor Subsidiaries
 
Eliminations
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$

 
$
85,758

 
$
81,582

 
$
(1,095
)
 
$
166,245

Receivables
 

 
1,184

 
15,574

 
857,205

 
(836,241
)
 
37,722

Inventories
 

 

 
1,891

 
27,828

 

 
29,719

Other current assets
 
164

 
28,297

 
3,454

 
10,983

 
(29,601
)
 
13,297

 
 
164

 
29,481

 
106,677

 
977,598

 
(866,937
)
 
246,983

Property and Equipment, net
 

 
835

 
181,673

 
1,403,264

 

 
1,585,772

Investment in Park
 
588,684

 
1,045,640

 
238,132

 
234,238

 
(2,106,694
)
 

Goodwill
 
674

 

 
63,551

 
119,605

 

 
183,830

Other Intangibles, net
 

 

 
14,177

 
23,887

 

 
38,064

Deferred Tax Asset
 

 
20,956

 

 

 
(20,956
)
 

Other Assets
 

 

 
40

 
9,470

 

 
9,510

 
 
$
589,522

 
$
1,096,912

 
$
604,250

 
$
2,768,062

 
$
(2,994,587
)
 
$
2,064,159

LIABILITIES AND PARTNERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
497,558

 
$
344,410

 
$
1,379

 
$
18,610

 
$
(837,336
)
 
$
24,621

Deferred revenue
 

 

 
6,237

 
79,894

 

 
86,131

Accrued interest
 
27

 
18

 
2,055

 
6,024

 

 
8,124

Accrued taxes
 
352

 

 

 
73,224

 
(29,601
)
 
43,975

Accrued salaries, wages and benefits
 

 
17,498

 
1,242

 

 

 
18,740

Self-insurance reserves
 

 
10,947

 
1,618

 
12,542

 


 
25,107

Other accrued liabilities
 
3,406

 
5,094

 
157

 
10,139

 

 
18,796

 
 
501,343

 
377,967

 
12,688

 
200,433

 
(866,937
)
 
225,494

Deferred Tax Liability
 

 

 
13,809

 
81,945

 
(20,956
)
 
74,798

Derivative Liability
 
5,233

 
3,489

 

 

 

 
8,722

Other Liabilities
 

 
873

 

 
10,811

 

 
11,684

Long-Term Debt:
 
 
 
 
 
 
 
 
 
 
 
 
Term debt
 

 
127,437

 

 
596,351

 

 
723,788

Notes
 

 

 
445,156

 
491,571

 

 
936,727

 
 

 
127,437

 
445,156

 
1,087,922

 

 
1,660,515

 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
 
82,946

 
587,146

 
132,597

 
1,386,951

 
(2,106,694
)
 
82,946

 
 
$
589,522

 
$
1,096,912

 
$
604,250

 
$
2,768,062

 
$
(2,994,587
)
 
$
2,064,159


19


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
June 25, 2017
(In thousands)
 
 
Cedar Fair L.P.
(Parent)
 
Co-Issuer Subsidiary (Magnum)
 
Co-Issuer Subsidiary (Cedar Canada)
 
Guarantor Subsidiaries
 
Eliminations
 
Total
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$

 
$