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Cedar Fair L.P. Depositary Reports Operating Results (10-Q)

May 08, 2009 | About:

Cedar Fair L.P. Depositary (NYSE:FUN) filed Quarterly Report for the period ended 2009-03-29.

Cedar Fair L.P. and its affiliated companies own and operate five amusement parks: Cedar Point Knott's Berry Farm Dorney Park & Wildwater Kingdom Valleyfair and Worlds of Fun/Oceans of Fun. The parks are family-oriented with recreational facilities for people of all ages and provide clean and attractive environments with exciting rides and entertainment. The company also owns and operates four hotel facilities. Cedar Point also owns and operates the Cedar Point Marina one of the largest full-service marinas on the Great Lakes. Cedar Fair L.P. Depositary has a market cap of $603.7 million; its shares were traded at around $10.95 with a P/E ratio of 13.1 and P/S ratio of 0.6. The dividend yield of Cedar Fair L.P. Depositary stocks is 17.6%. Cedar Fair L.P. Depositary had an annual average earning growth of 8.6% over the past 10 years. GuruFocus rated Cedar Fair L.P. Depositary the business predictability rank of 4-star.

Highlight of Business Operations:

Interest expense for the first quarter decreased 12% to $28.9 million in 2009 compared with $32.8 million in 2008, due primarily to lower interest rates on our variable-rate outstanding borrowings. A net credit for taxes of $31.9 million was recorded to account for the tax attributes of our corporate subsidiaries and publicly traded partnership (PTP) taxes during the first quarter of 2009 compared with a net credit for taxes of $44.8 million in the same period a year ago. To determine the interim period income tax provision (benefit) of our corporate subsidiaries we apply an estimated annual effective tax rate to our year-to-date income (loss). Cash taxes paid or payable are not impacted by these interim tax provisions and are estimated to be between $17-20 million for the 2009 calendar year.

After interest expense and the credit for taxes, the net loss for the period totaled $53.3 million, or $0.97 per diluted limited partner unit, compared with a net loss of $43.8 million, or $0.81 per unit, a year ago.

After depreciation, amortization, an impairment charge on goodwill and other intangibles, and a loss on impairment/retirement of fixed assets, operating income for the twelve months totaled $134.1 million compared with $149.0 million for the same period in 2008. During the fourth quarter of 2008, we recorded estimated non-cash charges of $79.9 million and $7.1 million for impairment of goodwill and trade-names, respectively, that were originally recorded when we acquired the PPI parks in 2006. During the first quarter of 2009, we completed our testing of goodwill and determined that no further impairment charges were needed. Although the acquisition of the PPI parks continues to meet our collective operating and profitability goals, the performance of certain acquired parks has fallen below our original expectations, which when coupled with a higher cost of

After interest expense and provision for taxes, net loss for the twelve months ended March 29, 2009 was $3.8 million, or $0.07 per diluted limited partner unit, compared with net income of $6.9 million, or $0.12 per diluted limited partner unit, for the twelve months ended March 30, 2008.

At the end of the quarter, we had $1.688 billion of variable-rate term debt and $148.7 million of outstanding borrowings under our revolving credit facilities. After letters of credit, which totaled $11.1 million at March 29, 2009, we had $185.2 million of available borrowings under our revolving credit agreements. Of our total term debt, $17.3 million is scheduled to mature within the next twelve months.

Given the current uncertainty of the credit markets and our need to refinance our debt in the future, we are looking at a wide range of alternatives to address our capital structure and reduce debt levels. One such alternative examined was our distribution policy. In response to this examination, on March 9, 2009, we announced that we would reduce our annual distribution rate from $1.92 per unit to $1.00 per unit beginning with the distribution declared during the second quarter of 2009. A $0.92 reduction in the per-unit rate, along with scheduled debt repayments and interest savings on the lower debt balance, will allow us to reduce our debt by approximately $200 million over the next three fiscal years. As part of the March 9, 2009 announcement, we also made note of the potential marketing for sale of three of our amusement parks, as well as the continued marketing efforts to sell excess land. The reduction of our distribution, along with the successful execution of selling select assets, will have a positive impact on our leverage ratio, which in turn should benefit debt refinancing efforts. In the first quarter of 2009, we used the cash available from our reduced distribution, to be paid on May 15, 2009, to repay $13.0 million of term debt.

Read the The complete Report

Rating: 1.0/5 (1 vote)


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