FORM 10 - Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

(Mark One)

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2001

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 1-9444

 

CEDAR FAIR, L.P.

(Exact name of Registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of

incorporation or organization)

34-1560655

(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 .

Title of Class

Depositary Units

(Representing Limited Partner Interests)

Units Outstanding As Of

November 9, 2001

50,513,599

 

 

CEDAR FAIR, L.P.

INDEX

FORM 10 - Q

 

 

 

Part I - Financial Information

   
         

Item 1.

 

Financial Statements

 

3-9

         

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

10

         
         

Part II - Other Information

   
         

Item 6.

 

Exhibits and Reports on Form 8-K

 

11

         

Signatures

     

12

         

Index to Exhibits

     

13

 

PART I - FINANCIAL INFORMATION

Item 1. - Financial Statements

CEDAR FAIR, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands)

   

9/30/01

 

12/31/00

ASSETS

       

Current Assets:

       

Cash

 

$ 6,078

 

$ 2,392

Receivables

 

21,505

 

5,270

Inventories

 

16,095

 

13,358

Prepaids

 

3,050

 

4,358

   

46,728

 

25,378

Land, Buildings, Rides and Equipment:

       

Land

 

148,707

 

136,564

Land improvements

 

119,666

 

112,927

Buildings

 

248,844

 

238,446

Rides and equipment

 

494,955

 

466,545

Construction in progress

 

11,030

 

10,918

   

1,023,202

 

965,400

Less accumulated depreciation

 

(252,475)

 

(236,481)

   

770,727

 

728,919

         

Intangibles, net of amortization

 

10,571

 

9,846

   

$ 828,026

 

$ 764,143

LIABILITIES AND PARTNERS' EQUITY

       
         

Current Liabilities:

       

Short-term borrowings

 

$ 43,950

 

$ 38,550

Current maturities of long-term debt

 

165,000

 

-

Accounts payable

 

29,724

 

16,562

Distribution payable to partners

 

20,732

 

19,837

Accrued interest

 

1,780

 

3,474

Accrued taxes

 

14,759

 

14,293

Accrued salaries, wages and benefits

 

17,040

 

9,776

Self-insurance reserves

 

11,992

 

10,156

Other accrued liabilities

 

4,869

 

1,376

   

309,846

 

114,024

         

Other Liabilities

 

33,354

 

19,530

         

Long-Term Debt:

       

Revolving credit loans

 

-

 

200,000

Term debt

 

140,000

 

100,000

   

140,000

 

300,000

Partners' Equity:

       

Special L.P. interests

 

5,290

 

5,290

General partner

 

134

 

110

Limited partners, 50,514 and 50,813 units outstanding at

       

September 30, 2001 and December 31, 2000, respectively

 

343,613

 

325,189

Limited partnership unit options

 

2,624

 

-

Accumulated other comprehensive loss

 

(6,835)

 

-

   

344,826

 

330,589

   

$ 828,026

 

$ 764,143

The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets.

CEDAR FAIR, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands except per unit data)

 

   

Three months ended

 

Twelve months ended

   

9/30/01

 

9/24/00

 

9/30/01

 

9/24/00

                 

Net revenues:

               

Admissions

 

$ 147,410

 

$ 136,523

 

$ 243,010

 

$ 231,309

Food, merchandise and games

 

109,251

 

103,912

 

196,204

 

191,839

Accommodations and other

 

28,974

 

26,388

 

46,068

 

43,654

   

285,635

 

266,823

 

485,282

 

466,802

Costs and expenses:

               

Cost of products sold

 

28,761

 

26,451

 

53,458

 

50,946

Operating expenses

 

86,969

 

80,443

 

209,608

 

201,958

Selling, general and administrative

 

28,337

 

23,996

 

60,653

 

54,182

Depreciation and amortization

 

21,424

 

18,961

 

42,937

 

38,027

Non-cash unit option expense (credit)

 

(3,111)

 

-

 

2,624

 

-

Non-recurring cost to terminate general partner fees

 

-

 

7,838

 

(11)

 

7,838

   

162,380

 

157,689

 

369,269

 

352,951

                 

Operating income

 

123,255

 

109,134

 

116,013

 

113,851

Interest expense

 

6,289

 

5,548

 

24,495

 

18,987

                 

Income before taxes

 

116,966

 

103,586

 

91,518

 

94,864

Provision for taxes

 

9,720

 

9,107

 

16,854

 

16,061

                 

Net income

 

107,246

 

94,479

 

74,664

 

78,803

Net income allocated to general partner

 

107

 

94

 

75

 

48

Net income allocated to limited partners

 

$ 107,139

 

$ 94,385

 

$ 74,589

 

$ 78,755

                 

Basic earnings per limited partner unit:

               

Weighted average limited partner units

outstanding

 

50,592

 

51,350

 

50,854

 

51,622

Net income per limited partner unit

 

$ 2.12

 

$ 1.84

 

$ 1.47

 

$ 1.53

                 

Diluted earnings per limited partner unit:

               

Weighted average limited partner units

outstanding

 

50,925

 

51,673

 

51,092

 

52,072

Net income per limited partner unit

 

$ 2.10

 

$ 1.83

 

$ 1.46

 

$ 1.51

                 

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

 

CEDAR FAIR, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY

(In thousands)

                   

Accumulated

   
   

Special

 

General

 

Limited

     

Other

 

Total

   

L.P.

 

Partner's

 

Partners'

 

L.P. Unit

 

Comprehensive

 

Partners'

   

Interests

 

Equity

 

Equity

 

Options

 

Loss

 

Equity

                         

Balance at June 24, 2001

 

$ 5,290

 

$ 48

 

$259,758

 

$ 5,735

 

$ (4,466)

 

$266,365

                         

Comprehensive income:

                       
                         

Net income

 

-

 

107

 

107,139

 

-

 

-

 

107,246

                         

Other comprehensive loss on interest rate swap agreements:

 

                   
                         

Unrealized loss for the quarter

 

-

 

-

 

-

 

-

 

(2,369)

 

(2,369)

                         

Total comprehensive income

                     

104,877

                         

Vested value of L.P. unit options

 

-

 

-

 

-

 

(3,111)

 

-

 

(3,111)

                         

Units repurchased

 

-

 

-

 

(1,866)

 

-

 

-

 

(1,866)

                         

Distribution declared

                       

($.41 per limited partner unit)

 

-

 

(21)

 

(21,418)

 

-

 

-

 

(21,439)

                         

Balance at September 30, 2001

 

$ 5,290

 

$ 134

 

$ 343,613

 

$ 2,624

 

$ (6,835)

 

$344,826

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

CEDAR FAIR, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

   

Three months ended

 

Twelve months ended

   

9/30/01

 

9/24/00

 

9/30/01

 

9/24/00

CASH FLOWS FROM (FOR) OPERATING ACTIVITIES

               

Net income

 

$107,246

 

$ 94,479

 

$ 74,664

 

$ 78,803

Adjustments to reconcile net income to net cash from

               

operating activities:

               

Depreciation and amortization

 

21,424

 

18,961

 

42,937

 

38,027

Non-cash unit option expense (credit)

 

(3,111)

 

-

 

2,624

 

-

Change in assets and liabilities, net of effects from acquisitions:

               

(Increase) decrease in inventories

 

8,281

 

7,268

 

(1,319)

 

(1,415)

(Increase) in current and other assets

 

(4,689)

 

(794)

 

(2,298)

 

(1,293)

Increase (decrease) in accounts payable

 

(14,081)

 

(19,044)

 

3,998

 

(5,684)

Increase (decrease) in accrued taxes

 

5,508

 

(11,865)

 

1,259

 

(7,697)

Increase in self-insurance reserves

 

2,248

 

1,022

 

2,137

 

783

Increase (decrease) in other current liabilities

 

1,342

 

(2,944)

 

(1,052)

 

308

Increase (decrease) in other liabilities

 

(1,824)

 

8,947

 

6,655

 

9,050

Net cash from operating activities

 

122,344

 

96,030

 

129,605

 

110,882

CASH FLOWS FROM (FOR) INVESTING ACTIVITIES

               

Capital expenditures

 

(11,550)

 

(15,537)

 

(51,049)

 

(110,224)

Acquisition of Michigan's Adventure:

               

Land, buildings, rides and equipment acquired

 

-

 

-

 

(27,959)

 

-

Negative working capital assumed

 

-

 

-

 

358

 

-

Acquisition of Oasis Water Park:

               

Land, buildings, rides and equipment acquired

 

-

 

-

 

(9,311)

 

-

Acquisition of White Water Canyon:

               

Land, buildings, rides and equipment acquired

 

-

 

-

 

-

 

(11,796)

Negative working capital assumed

 

-

 

-

 

-

 

227

Net cash (for) investing activities

 

(11,550)

 

(15,537)

 

(87,961)

 

(121,793)

CASH FLOWS FROM (FOR) FINANCING ACTIVITIES

               

Net borrowings (payments) on revolving credit loans

 

(144,500)

 

(63,050)

 

(4,961)

 

86,231

Borrowings of term debt

 

50,000

 

-

 

50,000

 

-

Distributions paid to partners

 

(19,759)

 

(19,437)

 

(79,379)

 

(76,670)

Repurchase of limited partnership units

 

(1,866)

 

(11,897)

 

(42,817)

 

(19,445)

Issuance of units for vested deferred compensation

 

-

 

8,858

 

-

 

8,858

Reduction of general partner interest

 

-

 

(847)

 

-

 

(847)

Acquisition of Michigan's Adventure:

               

Issuance of 1,250,000 units

 

-

 

-

 

27,613

 

-

Acquisition of Oasis Water Park:

               

Borrowings on revolving credit loans

 

-

 

-

 

9,311

 

-

Acquisition of White Water Canyon:

               

Borrowings on revolving credit loans

 

-

 

-

 

-

 

11,569

Net cash from (for) financing activities

 

(116,125)

 

(86,373)

 

(40,233)

 

9,696

CASH

               

Net increase (decrease) for the period

 

(5,331)

 

(5,880)

 

1,411

 

(1,215)

Balance, beginning of period

 

11,409

 

10,547

 

4,667

 

5,882

Balance, end of period

 

$ 6,078

 

$ 4,667

 

$ 6,078

 

$ 4,667

                 

SUPPLEMENTAL INFORMATION

               

Cash payments for interest expense

$ 7,578

$ 7,590

$ 23,926

$ 18,838

Interest capitalized

 

68

 

130

 

535

 

2,155

Cash payments for income taxes

4,100

4,226

5,634

8,157

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

 

CEDAR FAIR, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE QUARTERS ENDED

SEPTEMBER 30, 2001 AND SEPTEMBER 24, 2000

 

 

 

The accompanying consolidated financial statements have been prepared from the financial records of Cedar Fair, L.P. (the Partnership) without audit and reflect all 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 highly seasonal nature of the Partnership's amusement park operations, the results for any interim period are not indicative of the results to be expected for the full calendar year. Accordingly, the Partnership has elected to present financial information regarding operations and cash flows for the preceding twelve-month periods ended September 30, 2001 and September 24, 2000 to accompany the quarterly results. Because amounts for the twelve months ended September 30, 2001 include actual 2000 fourth quarter operating results, they may not be indicative of 2001 full calendar year operations.

 

 

(1) Significant Accounting and Reporting Policies:

The Partnership's consolidated financial statements for the quarters ended September 30, 2001 and September 24, 2000 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, 2000, which were included in the Form 10-K filed on March 30, 2001, except for the change described in Note 3 of these statements. 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. 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.

 

 

(2) Interim Reporting:

The Partnership owns and operates six amusement parks: Cedar Point in Sandusky, Ohio; Knott's Berry Farm located near Los Angeles in Buena Park, California; Dorney Park & Wildwater Kingdom near Allentown, Pennsylvania; Valleyfair in Shakopee, Minnesota; Worlds of Fun in Kansas City, Missouri; and Michigan's Adventure near Muskegon, Michigan. The Partnership also owns and operates five seasonal water parks located near San Diego and in Palm Springs, California, and adjacent to Cedar Point, Knott's Berry Farm and Worlds of Fun. The Partnership also operates Camp Snoopy at the Mall of America in Bloomington, Minnesota under a management contract. Virtually all of the Partnership's revenues from its five seasonal amusement parks, as well as its five water parks, are realized during a 130-day operating period beginning in early May, with the major portion concentrated in the third quarter during the peak vacation months of July and August. Knott's Berry Farm is open year-round but operates at its highest level of attendance during the third quarter 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 reporting procedures for its seasonal parks: (a) depreciation, advertising and certain other seasonal operating costs are expensed ratably during the operating season, including certain costs incurred prior to the season which are amortized over the season and (b) all other costs are expensed as incurred or ratably over the entire year.

(3) Derivative Financial Instruments:

Effective January 1, 2001, the Partnership adopted Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities" and related amendments. This statement requires that all derivative instruments be recorded on the balance sheet at their fair values. Changes in the fair values of derivatives that effectively hedge a business transaction are recorded each period in an equity account called "other comprehensive income (loss)."

The Partnership only uses derivative financial instruments to reduce its exposure to fluctuations in interest rates and foreign exchange rates. The Partnership has entered into several interest rate swap agreements as a means of converting a portion of its variable rate bank debt into fixed rate debt. Cash flows related to these interest rate swap agreements are included in interest expense over the terms of the agreements, which range from one to four years in maturity. The fair market value of all interest rate swap agreements, which was obtained from broker quotes, is included in other liabilities on the consolidated balance sheet as of September 30, 2001, and the changes in fair market value are reflected in other comprehensive income (loss) on the consolidated statement of partners' equity.

 

 

(4) Unit Options:

The Partnership accounts for unit options under APB Opinion No. 25, "Accounting for Stock Issued to Employees." As of September 30, 2001, the market price of limited partnership units exceeded the exercise price of the vested variable-priced unit options, but by a lesser amount than at the end of the preceding quarter, resulting in a current period credit of $3.1 million, which is reflected as non-cash unit option expense (credit) on the consolidated statement of operations.

 

 

(5) Long-Term Debt:

In August 2001, the Partnership entered into a new note agreement for the issuance of $50 million in 6.40% senior notes to refinance a portion of our variable-priced revolving credit loans at favorable rates. The Partnership is required to make annual repayments of $10 million in August 2004 through August 2008 and may make prepayments with defined premiums.

 

 

(6) Acquisitions:

Effective June 1, 2001, the Partnership acquired Michigan's Adventure amusement park, located near Muskegon, Michigan, for 1,250,000 unregistered limited partnership units valued at approximately $27.6 million. The park's assets, liabilities and results of operations since the acquisition date are included in the accompanying financial statements and the purchase price has been allocated to assets and liabilities based on their fair values at the date of acquisition.

On May 29, 2001, the Partnership acquired Oasis Water Park, which is located in Palm Springs, California, for a cash purchase price of $9.3 million. The purchase price has been allocated to assets and liabilities acquired based on their relative fair values at the date of acquisition, and the park's results of operations are included in these consolidated financial statements for the period following the acquisition.

 

 

 

 

(7) Earnings per Unit:

Net income per limited partner unit is calculated based on the following unit amounts:

   

Three months ended

 

Twelve months ended

   

9/30/01

 

9/24/00

 

9/30/01

 

9/24/00

 

(in thousands except per unit data)

                 

Basic weighted average units outstanding

 

50,592

 

51,350

 

50,854

 

51,622

Effect of dilutive units:

               

Unit options

 

333

 

-

 

238

 

-

Deferred units

 

-

 

323

 

-

 

440

Contingent units - Knott's acquisition

 

-

 

-

 

-

 

10

                 

Diluted weighted average units outstanding

 

50,925

 

51,673

 

51,092

 

52,072

                 

Net income per unit - basic

 

$ 2.12

 

$ 1.84

 

$ 1.47

 

$ 1.53

                 

Net income per unit - diluted

 

$ 2.10

 

$ 1.83

 

$ 1.46

 

$ 1.51

                 

 

 

 

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Results of Operations:

Net revenues for the quarter ended September 30, 2001, increased 7% to $285.6 million from $266.8 million in 2000, on a 9% increase in combined attendance, a 6% increase in out-of-park revenues, including resort hotels, and flat combined in-park guest per capita spending. During this same period, earnings before interest, taxes, depreciation and amortization, and non-recurring items (adjusted EBITDA) increased 4% to $141.6 million, before a non-cash accounting credit for unit option expense.

Excluding results from the Partnership's two newest properties, Michigan's Adventure and Oasis Water Park, net revenues for the quarter increased 3% on a 2% increase in combined attendance, a 6% increase in out-of-park revenues, and only a slight increase in in-park guest per capita spending, due to aggressive promotions offered to address soft early-season attendance at several of our parks. Adjusted EBITDA, excluding the acquired parks, was level with the third quarter of 2000.

Total operating costs and expenses for the quarter increased 10% to $144.1 million, excluding depreciation and non-cash or non-recurring charges, due in part to the Partnership's two new parks. After depreciation and a $3.1 million ($.06 per unit) non-cash credit for unit options, operating income increased 13% to $123.3 million from $109.1 million a year ago. Net income for the quarter, after higher interest expense resulting from acquisitions and large unit repurchases, increased 14% to $107.2 million, or $2.10 per limited partner unit, from $94.5 million, or $1.83 per unit, in 2000.

The 2001 season was a difficult one for several of the Partnership's parks, with the overall weakness in the economy being the most significant factor negatively impacting the year's results. Dorney Park performed very well this season with the introduction of another world-class roller coaster, but attendance at the Partnership's other parks remained below expectations. Through the first nine months of the year, combined attendance was up 3% from 2000, but excluding results from the Partnership's two newest properties was down 2%. Over this same nine-month period, guest per capita spending remained relatively flat and out-of-park revenues increased 5%.

In the weeks that followed the terrorist attacks of September 11, attendance at the Partnership's parks was understandably below normal levels, although the effect on third-quarter results was not significant, with the peak season already concluded at the Partnership's seasonal parks, and only Knott's Berry Farm open on a daily basis at that time of the year. In October, attendance at the parks' popular Halloween events began to improve, including attendance at Knott's Berry Farm, which represents the largest portion of the Partnership's fourth quarter revenues. For the month, combined attendance was relatively flat with last year, and based on this, management expects to see no material impact on fourth quarter or full-year results.

Security efforts at the Partnership's parks were immediately increased after September 11 and those measures will continue in the future. Management does not expect the impact of increased security at the parks to be material to the Partnership's overall results. In addition, although the insurance market has hardened considerably since September 11, the Partnership was able to renew coverage at adequate levels for next year, with premium increases kept to a manageable level.

Financial Condition and Liquidity:

The Partnership has available through April 2002 a $200 million revolving credit facility and has an additional $25 million revolving credit facility available through November 2001 to fund seasonal requirements. Borrowings under these credit facilities were $199.0 million as of September 30, 2001. Because of their favorable terms, the Partnership has delayed replacing these credit facilities until the last quarter of 2001; accordingly, borrowings under both facilities must be shown as current liabilities as of September 30, 2001.

The Partnership is in the process of finalizing an agreement with its bank group and expects to have a new 3-year revolving credit facility in place by the end of the year. Management expects the new credit facility will carry somewhat higher rates than the previous credit facilities, but does not expect the impact on interest expense to be material. The total amount of credit available to the Partnership from all sources is expected to be adequate to fund seasonal working capital needs, planned capital expenditures and regular quarterly distributions to partners.

Current assets and liabilities are at normal seasonal levels at September 30, 2001, and the negative working capital is the result of the Partnership's highly seasonal business and careful management of cash flow.

 

PART II - OTHER INFORMATION

 

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

Exhibit (10.1) - Senior Series C Notes issued pursuant to the Private Shelf Agreement with The Prudential Insurance Company of America dated January 28, 1998 for $50,000,000, 6.40% Series C Notes due August 24, 2008.

Exhibit (20) - 2001 Third Quarter Press Release

 

(b) Reports on Form 8-K: None.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CEDAR FAIR, L.P.

(Registrant)

By Cedar Fair Management Company

General Partner

 

 

Date: November 14, 2001

Bruce A. Jackson

 

Bruce A. Jackson

 

Corporate Vice President - Finance

 

(Chief Financial Officer)

   
   
 

Charles M. Paul

 

Charles M. Paul

 

Vice President and Corporate Controller

 

(Chief Accounting Officer)

 

 

 

INDEX TO EXHIBITS

Page Number

 

Exhibit (10.1) Senior Series C Notes issued pursuant to the Private Shelf Agreement

with The Prudential Insurance Company of America dated January 28,

1998 for $50,000,000, 6.40% Series C Notes due August 24, 2008. 14

Exhibit (20) 2001 Third Quarter Press Release. 26

CEDAR FAIR, L.P.

KNOTT'S BERRY FARM

 

SENIOR SERIES C NOTE

 

 

No. 2001 C-1

ORIGINAL PRINCIPAL AMOUNT: $35,000,000

ORIGINAL ISSUE DATE: August 9, 2001

INTEREST RATE: 6.40%

INTEREST PAYMENT DATES: February 24 and August 24 of each year, commencing

August 24, 2001

FINAL MATURITY DATE: August 24, 2008

PRINCIPAL PREPAYMENT DATES AND AMOUNTS: $7,000,000 on August 24 of each

of the years 2004-2008, inclusive

 

FOR VALUE RECEIVED, the undersigned, Cedar Fair, L.P., a limited partnership organized and existing under the laws of the State of Delaware (the "Company") and Knott's Berry Farm, a general partnership organized and existing under the laws of the State of California ("Knott's Berry Farm") (the Company and Knott's Berry Farm are hereinafter referred to as the "Co-Issuers") hereby, jointly and severally, promise to pay to The Prudential Insurance Company of America, or registered assigns, the principal sum of THIRTY FIVE MILLION DOLLARS, payable on the Principal Prepayment Dates and in the amounts specified above, and on the Final Maturity Date specified above in an amount equal to the unpaid balance of the principal hereof with interest (computed on the basis of a 360-day year--30-day month) (a) on the unpaid balance thereof at the Interest Rate per annum specified above, payable on each Interest Payment Date specified above and on the Final Maturity Date specified above, commencing with the Interest Payment Date next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) on any overdue payment (including any overdue prepayment) of principal, any overdue payment of Yield-Maintenance Amount (as defined in the Agreement referenced below) and any overdue payment of interest, payable on each Interest Payment Date as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 2% plus the Interest Rate specified above or (ii) 2% plus the rate of interest publicly announced by Morgan Guaranty Trust Company of New York from time to time in New York City as its Prime Rate.

Payments of principal, Yield-Maintenance Amounts, if any, and interest are to be made at the main office of Bank of New York in New York City or at such other place as the holder hereof shall designate to the Co-Issuers in writing, in lawful money of the United States of America.

 

This Note is one of a series of Senior Notes (herein called the "Notes") issued pursuant to the Note Purchase and Private Shelf Agreement, dated as of January 28, 1998 (herein called the "Agreement"), between the Co-Issuers, on the one hand, and The Prudential Insurance Company of America and each Prudential Affiliate (as defined in the Agreement) which becomes a party thereto, on the other hand, and is entitled to the benefits thereof. As provided in the Agreement, this Note is subject to prepayment, in whole or from time to time in part, in some cases without the Yield-Maintenance Amount and in other cases with the Yield-Maintenance Amount (if any) specified in the Agreement.

This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Co-Issuers may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Co-Issuers shall not be affected by any notice to the contrary.

In case an Event of Default, as defined in the Agreement, shall occur and be continuing, the principal of this Note may be declared or otherwise become due and payable in the manner and with the effect provided in the Agreement.

The obligations of the Partners (as defined in the Agreement) with respect to this Note are limited as provided in paragraph 11L of the Agreement.

 

This Note is intended to be performed in the State of Illinois and shall be construed and enforced in accordance with the internal law of such State.

 

 

CEDAR FAIR, L.P.

By: CEDAR FAIR MANAGEMENT COMPANY, Managing General Partner

 

By: _____________________________________

Bruce A. Jackson

Vice President & Chief Financial Officer

 

KNOTT'S BERRY FARM

By: Magnum Management Corporation

one of its general partners

 

By: _____________________________________

Bruce A. Jackson

Vice President & Chief Financial Officer

 

 

 

 

 

 

CEDAR FAIR, L.P.

KNOTT'S BERRY FARM

 

SENIOR SERIES C NOTE

 

 

No. 2001 C-2

ORIGINAL PRINCIPAL AMOUNT: $7,000,000

ORIGINAL ISSUE DATE: August 9, 2001

INTEREST RATE: 6.40%

INTEREST PAYMENT DATES: February 24 and August 24 of each year, commencing

August 24, 2001

FINAL MATURITY DATE: August 24, 2008

PRINCIPAL PREPAYMENT DATES AND AMOUNTS: $1,400,000 on August 24 of each

of the years 2004-2008, inclusive

 

FOR VALUE RECEIVED, the undersigned, Cedar Fair, L.P., a limited partnership organized and existing under the laws of the State of Delaware (the "Company") and Knott's Berry Farm, a general partnership organized and existing under the laws of the State of California ("Knott's Berry Farm") (the Company and Knott's Berry Farm are hereinafter referred to as the "Co-Issuers") hereby, jointly and severally, promise to pay to The Prudential Insurance Company of America, or registered assigns, the principal sum of SEVEN MILLION DOLLARS, payable on the Principal Prepayment Dates and in the amounts specified above, and on the Final Maturity Date specified above in an amount equal to the unpaid balance of the principal hereof with interest (computed on the basis of a 360-day year--30-day month) (a) on the unpaid balance thereof at the Interest Rate per annum specified above, payable on each Interest Payment Date specified above and on the Final Maturity Date specified above, commencing with the Interest Payment Date next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) on any overdue payment (including any overdue prepayment) of principal, any overdue payment of Yield-Maintenance Amount (as defined in the Agreement referenced below) and any overdue payment of interest, payable on each Interest Payment Date as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 2% plus the Interest Rate specified above or (ii) 2% plus the rate of interest publicly announced by Morgan Guaranty Trust Company of New York from time to time in New York City as its Prime Rate.

Payments of principal, Yield-Maintenance Amounts, if any, and interest are to be made at the main office of Bank of New York in New York City or at such other place as the holder hereof shall designate to the Co-Issuers in writing, in lawful money of the United States of America.

 

This Note is one of a series of Senior Notes (herein called the "Notes") issued pursuant to the Note Purchase and Private Shelf Agreement, dated as of January 28, 1998 (herein called the "Agreement"), between the Co-Issuers, on the one hand, and The Prudential Insurance Company of America and each Prudential Affiliate (as defined in the Agreement) which becomes a party thereto, on the other hand, and is entitled to the benefits thereof. As provided in the Agreement, this Note is subject to prepayment, in whole or from time to time in part, in some cases without the Yield-Maintenance Amount and in other cases with the Yield-Maintenance Amount (if any) specified in the Agreement.

This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Co-Issuers may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Co-Issuers shall not be affected by any notice to the contrary.

In case an Event of Default, as defined in the Agreement, shall occur and be continuing, the principal of this Note may be declared or otherwise become due and payable in the manner and with the effect provided in the Agreement.

The obligations of the Partners (as defined in the Agreement) with respect to this Note are limited as provided in paragraph 11L of the Agreement.

 

This Note is intended to be performed in the State of Illinois and shall be construed and enforced in accordance with the internal law of such State.

 

 

CEDAR FAIR, L.P.

By: CEDAR FAIR MANAGEMENT COMPANY, Managing General Partner

 

By: _____________________________________

Bruce A. Jackson

Vice President & Chief Financial Officer

 

KNOTT'S BERRY FARM

By: Magnum Management Corporation

one of its general partners

 

By: _____________________________________

Bruce A. Jackson

Vice President & Chief Financial Officer

 

 

 

 

 

CEDAR FAIR, L.P.

KNOTT'S BERRY FARM

 

SENIOR SERIES C NOTE

 

 

No. 2001 C-3

ORIGINAL PRINCIPAL AMOUNT: $5,000,000

ORIGINAL ISSUE DATE: August 9, 2001

INTEREST RATE: 6.40%

INTEREST PAYMENT DATES: February 24 and August 24 of each year, commencing

August 24, 2001

FINAL MATURITY DATE: August 24, 2008

PRINCIPAL PREPAYMENT DATES AND AMOUNTS: $1,000,000 on August 24 of each

of the years 2004-2008, inclusive

 

FOR VALUE RECEIVED, the undersigned, Cedar Fair, L.P., a limited partnership organized and existing under the laws of the State of Delaware (the "Company") and Knott's Berry Farm, a general partnership organized and existing under the laws of the State of California ("Knott's Berry Farm") (the Company and Knott's Berry Farm are hereinafter referred to as the "Co-Issuers") hereby, jointly and severally, promise to pay to Hartford Life Insurance Company, or registered assigns, the principal sum of FIVE MILLION DOLLARS, payable on the Principal Prepayment Dates and in the amounts specified above, and on the Final Maturity Date specified above in an amount equal to the unpaid balance of the principal hereof with interest (computed on the basis of a 360-day year--30-day month) (a) on the unpaid balance thereof at the Interest Rate per annum specified above, payable on each Interest Payment Date specified above and on the Final Maturity Date specified above, commencing with the Interest Payment Date next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) on any overdue payment (including any overdue prepayment) of principal, any overdue payment of Yield-Maintenance Amount (as defined in the Agreement referenced below) and any overdue payment of interest, payable on each Interest Payment Date as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 2% plus the Interest Rate specified above or (ii) 2% plus the rate of interest publicly announced by Morgan Guaranty Trust Company of New York from time to time in New York City as its Prime Rate.

Payments of principal, Yield-Maintenance Amounts, if any, and interest are to be made at the main office of Bank of New York in New York City or at such other place as the holder hereof shall designate to the Co-Issuers in writing, in lawful money of the United States of America.

 

This Note is one of a series of Senior Notes (herein called the "Notes") issued pursuant to the Note Purchase and Private Shelf Agreement, dated as of January 28, 1998 (herein called the "Agreement"), between the Co-Issuers, on the one hand, and The Prudential Insurance Company of America and each Prudential Affiliate (as defined in the Agreement) which becomes a party thereto, on the other hand, and is entitled to the benefits thereof. As provided in the Agreement, this Note is subject to prepayment, in whole or from time to time in part, in some cases without the Yield-Maintenance Amount and in other cases with the Yield-Maintenance Amount (if any) specified in the Agreement.

This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Co-Issuers may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Co-Issuers shall not be affected by any notice to the contrary.

In case an Event of Default, as defined in the Agreement, shall occur and be continuing, the principal of this Note may be declared or otherwise become due and payable in the manner and with the effect provided in the Agreement.

The obligations of the Partners (as defined in the Agreement) with respect to this Note are limited as provided in paragraph 11L of the Agreement.

 

This Note is intended to be performed in the State of Illinois and shall be construed and enforced in accordance with the internal law of such State.

 

 

CEDAR FAIR, L.P.

By: CEDAR FAIR MANAGEMENT COMPANY, Managing General Partner

 

By: _____________________________________

Bruce A. Jackson

Vice President & Chief Financial Officer

 

KNOTT'S BERRY FARM

By: Magnum Management Corporation

one of its general partners

 

By: _____________________________________

Bruce A. Jackson

Vice President & Chief Financial Officer

 

 

 

 

 

CEDAR FAIR, L.P.

KNOTT'S BERRY FARM

 

SENIOR SERIES C NOTE

 

 

No. 2001 C-4

ORIGINAL PRINCIPAL AMOUNT: $3,000,000

ORIGINAL ISSUE DATE: August 9, 2001

INTEREST RATE: 6.40%

INTEREST PAYMENT DATES: February 24 and August 24 of each year, commencing

August 24, 2001

FINAL MATURITY DATE: August 24, 2008

PRINCIPAL PREPAYMENT DATES AND AMOUNTS: $600,000 on August 24 of each

of the years 2004-2008, inclusive

 

FOR VALUE RECEIVED, the undersigned, Cedar Fair, L.P., a limited partnership organized and existing under the laws of the State of Delaware (the "Company") and Knott's Berry Farm, a general partnership organized and existing under the laws of the State of California ("Knott's Berry Farm") (the Company and Knott's Berry Farm are hereinafter referred to as the "Co-Issuers") hereby, jointly and severally, promise to pay to Medica Health Plan, or registered assigns, the principal sum of THREE MILLION DOLLARS, payable on the Principal Prepayment Dates and in the amounts specified above, and on the Final Maturity Date specified above in an amount equal to the unpaid balance of the principal hereof with interest (computed on the basis of a 360-day year--30-day month) (a) on the unpaid balance thereof at the Interest Rate per annum specified above, payable on each Interest Payment Date specified above and on the Final Maturity Date specified above, commencing with the Interest Payment Date next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) on any overdue payment (including any overdue prepayment) of principal, any overdue payment of Yield-Maintenance Amount (as defined in the Agreement referenced below) and any overdue payment of interest, payable on each Interest Payment Date as aforesaid (or, at the option of the registered holder hereof, on demand), at a rate per annum from time to time equal to the greater of (i) 2% plus the Interest Rate specified above or (ii) 2% plus the rate of interest publicly announced by Morgan Guaranty Trust Company of New York from time to time in New York City as its Prime Rate.

Payments of principal, Yield-Maintenance Amounts, if any, and interest are to be made at the main office of Bank of New York in New York City or at such other place as the holder hereof shall designate to the Co-Issuers in writing, in lawful money of the United States of America.

 

This Note is one of a series of Senior Notes (herein called the "Notes") issued pursuant to the Note Purchase and Private Shelf Agreement, dated as of January 28, 1998 (herein called the "Agreement"), between the Co-Issuers, on the one hand, and The Prudential Insurance Company of America and each Prudential Affiliate (as defined in the Agreement) which becomes a party thereto, on the other hand, and is entitled to the benefits thereof. As provided in the Agreement, this Note is subject to prepayment, in whole or from time to time in part, in some cases without the Yield-Maintenance Amount and in other cases with the Yield-Maintenance Amount (if any) specified in the Agreement.

This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder's attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Co-Issuers may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Co-Issuers shall not be affected by any notice to the contrary.

In case an Event of Default, as defined in the Agreement, shall occur and be continuing, the principal of this Note may be declared or otherwise become due and payable in the manner and with the effect provided in the Agreement.

The obligations of the Partners (as defined in the Agreement) with respect to this Note are limited as provided in paragraph 11L of the Agreement.

 

This Note is intended to be performed in the State of Illinois and shall be construed and enforced in accordance with the internal law of such State.

 

 

CEDAR FAIR, L.P.

By: CEDAR FAIR MANAGEMENT COMPANY, Managing General Partner

 

By: _____________________________________

Bruce A. Jackson

Vice President & Chief Financial Officer

 

KNOTT'S BERRY FARM

By: Magnum Management Corporation

one of its general partners

 

By: _____________________________________

Bruce A. Jackson

Vice President & Chief Financial Officer

 

 

 

 

Exhibit (20)

Cedar Fair, L.P. Press Release

One Cedar Point Drive

Sandusky, Ohio 44870-5259

For Immediate Release Contact: Brian C. Witherow

November 8, 2001 (419) 627-2173

Cedar Fair, L.P. Reports Record Revenues and EBITDA for the
Third Quarter of 2001

SANDUSKY, OHIO, November 8, 2001-- Cedar Fair, L.P. (NYSE: FUN), a publicly traded partnership which owns and operates six amusement parks and five water parks, today announced a 7% increase in 2001 third-quarter revenues and a 4% increase in earnings before interest, taxes, depreciation and amortization, and non-cash and non-recurring items (adjusted EBITDA).

Net revenues for the quarter ended September 30, 2001 increased 7% to $285.6 million from $266.8 million in 2000, on a 9% increase in combined attendance, a 6% increase in out-of-park revenues, including resort hotels, and flat combined in-park guest per capita spending. During the same period, adjusted EBITDA increased 4% to $141.6 million, before a non-cash accounting credit for unit option expense.

Excluding depreciation and non-cash or non-recurring charges, total operating costs and expenses for the quarter increased 10% to $144.1 million, due in part to the 2001 acquisitions of Michigan's Adventure and Oasis Water Park. After depreciation and the $3.1 million ($.06 per unit) non-cash credit for unit options, operating income increased 13% to $123.3 million from $109.1 million a year ago. Net income for the quarter, after higher interest expense resulting from acquisitions and large unit repurchases, increased 14% to $107.2 million, or $2.10 per limited partner unit, from $94.5 million, or $1.83 per unit, in 2000.

"Although our attendance expectations for 2001 were higher than we achieved, we are pleased with the record third-quarter results, particularly given the overall weakness in the economy this year," said Richard L. Kinzel, president and chief executive officer. "Excluding results from our two newest properties, net revenues and operating income for the quarter increased 3% and 8%, respectively, on a 2% increase in combined attendance, a 6% increase in out-of-park revenues, and only a slight increase in in-park guest per capita spending due to aggressive promotions offered to address soft early-season attendance at several of our parks."

Commenting on results through the first nine months of the year, Kinzel said, "Although our 2001 capital program was significantly lower than last year, the new rides, attractions and resort facilities we added generated solid returns and strong guest satisfaction. Through the first nine months of the year, combined attendance was up 3% from 2000, but excluding results from our two newest properties was down 2%. Over this same period, guest per capita spending remained relatively flat and out-of-park revenues increased 5%."

Kinzel concluded by explaining that virtually all of Cedar Fair's revenues from its seasonal parks are realized during a 130-day operating season beginning in early May, with the major portion concentrated in the peak vacation months of July and August. Knott's Berry Farm is open year-round but also operates at its highest level of attendance during the third quarter of the year.

Cedar Fair's six amusement parks are Cedar Point, located on Lake Erie between Cleveland and Toledo; Knott's Berry Farm near Los Angeles in Buena Park, California; Dorney Park & Wildwater Kingdom near Allentown, Pennsylvania; Valleyfair near Minneapolis/St. Paul; Worlds of Fun, located in Kansas City, Missouri; and Michigan's Adventure near Muskegon, Michigan. The Partnership's water parks are located near San Diego and in Palm Springs, California, and adjacent to Cedar Point, Knott's Berry Farm and Worlds of Fun. Cedar Fair also operates Camp Snoopy at the Mall of America in Bloomington, Minnesota under a management contract.