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

August 07, 2009 | About:

Cedar Fair L.P. Depositary (NYSE:FUN) filed Quarterly Report for the period ended 2009-06-28.

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 $586.7 million; its shares were traded at around $10.63 with a P/E ratio of 15.7 and P/S ratio of 0.6. The dividend yield of Cedar Fair L.P. Depositary stocks is 9.4%. 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:

Net revenues for the six months ended June 28, 2009 decreased $46.0 million to $290.6 million from $336.6 million during the six months ended June 29, 2008. On a same-park basis, excluding revenues from Star Trek which closed in September 2008, net revenues decreased $40.0 million between years.

Excluding depreciation, amortization and other non-cash expenses, operating costs and expenses decreased 9%, or $26.1 million, to $258.5 million for the period ended June 28, 2009 versus $284.6 million for the same period in 2008. This decrease was largely due to the fewer operating days through the first six months of 2009, cost savings from the closure of Star Trek and tight control of operating expenses in the face of decreased revenue. After depreciation, amortization, loss on impairment / retirement of fixed assets, and all other non-cash costs, the operating loss for the period increased $13.7 million to $15.6 million in 2009 from an operating loss of $1.9 million in 2008. Depreciation expense for the period decreased $3.1 million due to the decrease in operating days in 2009. Additionally impacting 2008 results was a $3.3 million impairment charge related to the sale of fixed assets at Geauga Lake as part of that parks restructuring.

During the first half of the year, a credit for taxes of $29.3 million was recorded to account for the tax attributes of our corporate subsidiaries and publicly traded partnership (PTP) taxes. This compares with a $39.5 million credit for taxes for the same fiscal six-month period in 2008. 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). The 2009 estimated annual effective tax rate includes the effect of an anticipated adjustment to the valuation allowance that relates to foreign tax credit carry-forwards arising from our corporate subsidiaries. The amount of this adjustment has a disproportionate impact on our annual effective tax rate that results in a significant variation in the customary relationship between the provision for taxes and income before taxes in interim periods. Cash taxes paid or payable are not impacted by these interim tax provisions and are estimated to be between $18-$21 million for the 2009 calendar year.

After interest expense and the credit for taxes, the net loss for the six months ended June 28, 2009 totaled $45.9 million, or $0.83 per diluted limited partner unit, compared with a net loss of $29.1 million, or $0.53 per unit, for the same period a year ago.

Excluding depreciation, amortization and other non-cash expenses, operating costs and expenses for the quarter decreased 7%, or $13.9 million, to $180.2 million from $194.1 million in 2008, resulting from the closure of Star Trek in September 2008, as well as a continued focus on controlling cash operating costs across the parks. After depreciation, amortization, other non-cash costs, operating income for the quarter totaled $40.7 million, down $13.8 million from $54.5 million for the second quarter of 2008.

During the quarter, a provision for taxes of $2.6 million was recorded to account for the tax attributes of our corporate subsidiaries and PTP taxes, compared to a provision for taxes of $5.3 million in the same period a year ago. After interest expense and the provision for taxes, net income for the quarter totaled $7.4 million, or $0.13 per diluted limited partner unit, compared with net income of $14.7 million, or $0.26 per unit, a year ago.

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Rating: 4.5/5 (2 votes)

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