FUN 10-Q Quarterly Report March 26, 2017 | Alphaminr

FUN 10-Q Quarter ended March 26, 2017

CEDAR FAIR L P
10-Qs and 10-Ks
10-Q
Quarter ended March 31, 2024
10-K
Fiscal year ended Dec. 31, 2023
10-Q
Quarter ended Sept. 24, 2023
10-Q
Quarter ended June 25, 2023
10-Q
Quarter ended March 26, 2023
10-K
Fiscal year ended Dec. 31, 2022
10-Q
Quarter ended Sept. 25, 2022
10-Q
Quarter ended June 26, 2022
10-Q
Quarter ended March 27, 2022
10-K
Fiscal year ended Dec. 31, 2021
10-Q
Quarter ended Sept. 26, 2021
10-Q
Quarter ended June 27, 2021
10-Q
Quarter ended March 28, 2021
10-K
Fiscal year ended Dec. 31, 2020
10-Q
Quarter ended Sept. 27, 2020
10-Q
Quarter ended June 28, 2020
10-Q
Quarter ended March 29, 2020
10-K
Fiscal year ended Dec. 31, 2019
10-Q
Quarter ended Sept. 29, 2019
10-Q
Quarter ended June 30, 2019
10-Q
Quarter ended March 31, 2019
10-K
Fiscal year ended Dec. 31, 2018
10-Q
Quarter ended Sept. 23, 2018
10-Q
Quarter ended June 24, 2018
10-Q
Quarter ended March 25, 2018
10-K
Fiscal year ended Dec. 31, 2017
10-Q
Quarter ended Sept. 24, 2017
10-Q
Quarter ended June 25, 2017
10-Q
Quarter ended March 26, 2017
10-K
Fiscal year ended Dec. 31, 2016
10-Q
Quarter ended Sept. 25, 2016
10-Q
Quarter ended June 26, 2016
10-Q
Quarter ended March 27, 2016
10-K
Fiscal year ended Dec. 31, 2015
10-Q
Quarter ended Sept. 27, 2015
10-Q
Quarter ended June 28, 2015
10-Q
Quarter ended March 29, 2015
10-K
Fiscal year ended Dec. 31, 2014
10-Q
Quarter ended Sept. 28, 2014
10-Q
Quarter ended June 29, 2014
10-Q
Quarter ended March 30, 2014
10-K
Fiscal year ended Dec. 31, 2013
10-Q
Quarter ended Sept. 29, 2013
10-Q
Quarter ended June 30, 2013
10-Q
Quarter ended March 31, 2013
10-K
Fiscal year ended Dec. 31, 2012
10-Q
Quarter ended Sept. 30, 2012
10-Q
Quarter ended July 1, 2012
10-Q
Quarter ended March 25, 2012
10-K
Fiscal year ended Dec. 31, 2011
10-Q
Quarter ended Sept. 25, 2011
10-Q
Quarter ended June 26, 2011
10-Q
Quarter ended March 27, 2011
10-K
Fiscal year ended Dec. 31, 2010
10-Q
Quarter ended Sept. 26, 2010
10-Q
Quarter ended June 27, 2010
10-Q
Quarter ended March 28, 2010
10-K
Fiscal year ended Dec. 31, 2009
PROXIES
DEF 14A
Filed on April 13, 2023
DEF 14A
Filed on April 7, 2022
DEF 14A
Filed on April 7, 2021
DEF 14A
Filed on April 7, 2020
DEF 14A
Filed on April 25, 2019
DEF 14A
Filed on April 26, 2018
DEF 14A
Filed on April 27, 2017
DEF 14A
Filed on April 27, 2016
DEF 14A
Filed on April 22, 2015
DEF 14A
Filed on April 23, 2014
DEF 14A
Filed on May 18, 2012
DEF 14A
Filed on Sept. 13, 2011
DEF 14A
Filed on June 2, 2011
DEF 14A
Filed on April 30, 2010
10-Q 1 cedarfair-10qx1x2017.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 March 26, 2017
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 May 1, 2017
Units Representing
Limited Partner Interests
56,235,646

Page 1 of 36 pages





CEDAR FAIR, L.P.
INDEX
FORM 10 - Q




PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
3/26/2017
12/31/2016
3/27/2016
ASSETS
Current Assets:
Cash and cash equivalents
$
34,242

$
122,716

$
64,551

Receivables
28,585

35,414

33,914

Inventories
39,318

26,276

38,455

Prepaid advertising
20,046

1,571

18,929

Other current assets
9,043

9,699

8,989

131,234

195,676

164,838

Property and Equipment:
Land
266,433

265,961

270,534

Land improvements
403,830

402,013

382,791

Buildings
664,936

663,982

650,581

Rides and equipment
1,649,934

1,643,770

1,575,003

Construction in progress
97,920

58,299

87,833

3,083,053

3,034,025

2,966,742

Less accumulated depreciation
(1,494,405
)
(1,494,805
)
(1,396,588
)
1,588,648

1,539,220

1,570,154

Goodwill
179,899

179,660

214,708

Other Intangibles, net
37,724

37,837

36,655

Other Assets
20,774

20,788

17,405

$
1,958,279

$
1,973,181

$
2,003,760

LIABILITIES AND PARTNERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt
$
4,350

$
2,775

$
4,050

Accounts payable
44,715

20,851

34,092

Deferred revenue
116,132

82,765

105,256

Accrued interest
11,013

9,986

11,360

Accrued taxes
8,536

58,958

10,563

Accrued salaries, wages and benefits
14,427

30,358

22,441

Self-insurance reserves
25,833

27,063

24,252

Distribution payable


46,314

Other accrued liabilities
11,619

9,927

7,196

236,625

242,683

265,524

Deferred Tax Liability
122,007

104,885

138,948

Derivative Liability
15,658

17,721

27,855

Other Liabilities
12,923

13,162

12,388

Long-Term Debt:
Revolving credit loans
85,000


65,000

Term debt
593,197

594,228

597,309

Notes
940,421

939,983

938,542

1,618,618

1,534,211

1,600,851

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

5,290

5,290

General partner
(1
)


Limited partners, 56,236, 56,201 and 56,069 units outstanding at March 26, 2017, December 31, 2016 and March 27, 2016, respectively
(57,116
)
52,288

(43,361
)
Accumulated other comprehensive income (loss)
4,275

2,941

(3,735
)
(47,552
)
60,519

(41,806
)
$
1,958,279

$
1,973,181

$
2,003,760

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
3/26/2017
3/27/2016
Net revenues:
Admissions
$
22,563

$
28,660

Food, merchandise and games
18,208

21,767

Accommodations, extra-charge products and other
7,547

8,011


48,318

58,438

Costs and expenses:

Cost of food, merchandise, and games revenues
5,480

6,237

Operating expenses
84,289

84,604

Selling, general and administrative
27,619

25,612

Depreciation and amortization
5,365

5,191

Loss on impairment / retirement of fixed assets, net
1,526

2,612


124,279

124,256

Operating loss
(75,961
)
(65,818
)
Interest expense
18,914

19,787

Net effect of swaps
301

1,842

Gain on foreign currency
(2,671
)
(19,561
)
Interest income
(32
)
(18
)
Loss before taxes
(92,473
)
(67,868
)
Benefit for taxes
(27,719
)
(19,382
)
Net loss
(64,754
)
(48,486
)
Net loss allocated to general partner
(1
)

Net loss allocated to limited partners
$
(64,753
)
$
(48,486
)
Net loss
$
(64,754
)
$
(48,486
)
Other comprehensive income (loss), (net of tax):
Foreign currency translation adjustment
(660
)
(4,395
)
Unrealized gain (loss) on cash flow hedging derivatives
1,994

(2,631
)
Other comprehensive income (loss), (net of tax)
1,334

(7,026
)
Total comprehensive loss
$
(63,420
)
$
(55,512
)
Basic loss per limited partner unit:
Weighted average limited partner units outstanding
56,008

55,877

Net loss per limited partner unit
$
(1.16
)
$
(0.87
)
Diluted loss per limited partner unit:
Weighted average limited partner units outstanding
56,008

55,877

Net loss per limited partner unit
$
(1.16
)
$
(0.87
)
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)
Three months ended
3/26/2017
3/27/2016
Limited Partnership Units Outstanding
Beginning balance
56,201

56,018

Limited partnership unit options exercised
10

7

Limited partnership unit forfeitures
(2
)

Issuance of limited partnership units as compensation
27

44

56,236

56,069

Limited Partners’ Equity
Beginning balance
$
52,288

$
48,428

Net loss
(64,753
)
(48,486
)
Partnership distribution declared ($0.855 and $0.825 per limited partnership unit)
(48,135
)
(46,314
)
Expense recognized for limited partnership unit options

5

Tax effect of units involved in treasury unit transactions
(1,369
)
(1,549
)
Issuance of limited partnership units as compensation
4,853

4,555

(57,116
)
(43,361
)
General Partner’s Equity
Beginning balance


Net loss
(1
)

Partnership distribution declared


(1
)

Special L.P. Interests
5,290

5,290

Accumulated Other Comprehensive Income
Foreign currency translation adjustment:
Beginning balance
18,891

22,591

Period activity, net of tax $0 and $2,520
(660
)
(4,395
)
18,231

18,196

Unrealized loss on cash flow hedging derivatives:
Beginning balance
(15,950
)
(19,300
)
Period activity, net of tax ($371) and $464
1,994

(2,631
)
(13,956
)
(21,931
)
4,275

(3,735
)
Total Partners’ Equity
$
(47,552
)
$
(41,806
)
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)
Three months ended
3/26/2017
3/27/2016
CASH FLOWS FOR OPERATING ACTIVITIES
Net loss
$
(64,754
)
$
(48,486
)
Adjustments to reconcile net loss to net cash for operating activities:
Depreciation and amortization
5,365

5,191

Non-cash foreign currency gain on debt
(2,010
)
(19,812
)
Other non-cash expenses
4,627

10,434

Net change in working capital
(33,738
)
(19,917
)
Net change in other assets/liabilities
16,526

5,657

Net cash for operating activities
(73,984
)
(66,933
)
CASH FLOWS FOR INVESTING ACTIVITIES
Capital expenditures
(48,455
)
(52,221
)
Purchase of identifiable intangible assets
(10
)

Net cash for investing activities
(48,465
)
(52,221
)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on revolving credit loans
85,000

65,000

Distributions paid to partners
(48,135
)

Tax effect of units involved in treasury unit transactions
(1,369
)
(1,549
)
Payments related to tax withholding for equity compensation
(1,904
)
(909
)
Net cash from financing activities
33,592

62,542

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
383

1,606

CASH AND CASH EQUIVALENTS
Net decrease for the period
(88,474
)
(55,006
)
Balance, beginning of period
122,716

119,557

Balance, end of period
$
34,242

$
64,551

SUPPLEMENTAL INFORMATION
Cash payments for interest expense
$
17,978

$
18,123

Interest capitalized
1,047

788

Cash payments for income taxes, net of refunds
8,084

2,834

Capital expenditures in accounts payable
11,898

4,809

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 MARCH 26, 2017 AND MARCH 27, 2016

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:
The Partnership’s unaudited condensed consolidated financial statements for the periods ended March 26, 2017 and March 27, 2016 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, 2016 , which were included in the Form 10-K filed on February 24, 2017 . 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.
Adopted Accounting Pronouncements
In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). The amendments in ASU 2016-09 are meant to simplify the current accounting for share-based payment transactions, specifically the accounting for income taxes, award classification, cash flow presentation, and accounting for forfeitures. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. The Partnership adopted this guidance in the first quarter of 2017. The impact of the guidance included: (1) prospective recognition of excess tax benefits and tax deficiencies as income tax expense (as opposed to the previous recognition in additional paid-in-capital), approximately $0.7 million of excess tax benefits were recognized in benefit for taxes for the three months ended March 26, 2017 ; (2) prospective exclusion of future excess tax benefits and deficiencies in the calculation of diluted shares, which had no impact on the net loss per limited partner unit for the three months ending March 26, 2017 ; (3) prospective classification of excess tax benefits as an operating activity within the statement of cash flows (as opposed to the previous classification as a financing activity), approximately $0.7 million of excess tax benefits were classified as an operating activity for the three months ended March 26, 2017 ; (4) the formal accounting policy election to recognize forfeitures as they occur (as opposed to estimating a forfeiture accrual), which did not have a material impact on the Partnership's financial statements; (5) retrospective classification of employee taxes paid when an employer withholds shares for tax withholding purposes as a financing activity within the statement of cash flows (as opposed to the previous classification as an operating activity), approximately $0.9 million was reclassified for the three months ended March 27, 2016 .
New Accounting Pronouncements
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). The amendments in ASU 2014-09 provide for a single, principles-based model for revenue recognition that replaces the existing revenue recognition guidance. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017 and will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective. It permits the use of either a retrospective or cumulative effect transition method, and early adoption is not permitted. The Partnership currently expects to adopt this standard in the first quarter of 2018. The Partnership anticipates the primary impact of the adoption on the consolidated financial statements will be the additional required disclosures around revenue recognition in the notes to the consolidated financial statements. The Partnership does not anticipate adoption of the standard to have a material effect on the consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases ("ASU 2016-02"). The amendments in ASU 2016-02 provide that most leases will now be recorded on the balance sheet. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018 and will replace most existing lease guidance under U.S. GAAP when it becomes effective. This ASU requires a modified transition method for existing leases and applies to the earliest period presented in the financial statements. The Partnership is in the process of evaluating the effect this standard will have on the consolidated financial statements and related disclosures.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). The amendments in ASU 2017-04 eliminates step two from the goodwill impairment test. Instead, an entity should recognize an impairment charge for the amount by which a reporting unit's carrying amount exceeds its fair value, not to

7


exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual and any interim impairment tests for periods beginning after December 15, 2019 on a prospective basis. Early adoption is permitted for annual and any interim impairment tests occurring after January 1, 2017. The Partnership expects to adopt the standard for its 2017 annual impairment test and does not anticipate the adoption of the standard to have a material effect on the consolidated financial statements.

(2) Interim Reporting:
The Partnership owns and operates eleven amusement parks, two separately gated outdoor water parks, one indoor water park and five 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. 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. In 2017, four of the seasonal properties will extend their operating seasons approximately 20 to 25 days to include WinterFest, a holiday event operating during November and December. 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 on multi-use products are recognized over the estimated number of uses expected for each type of product and are adjusted periodically during the operating season prior to the ticket or product expiration, which occurs no later than the close of the operating season or December 31 each year, (b) depreciation, 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. Revenues on multi-use products for the next operating season are deferred in the year received and recognized as revenue in the following operating season.

(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.

The long-lived operating asset impairment test involves a two-step process. The first step is a comparison of each asset group's carrying value to its estimated undiscounted future cash flows expected to result from the use of the assets, including disposition. Projected future cash flows reflect management's best estimates of economic and market conditions over the projected period, including growth rates in revenues and costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates. If the carrying value of the asset group is higher than its undiscounted future cash flows, there is an indication that impairment exists and the second step must be performed to measure the amount of impairment loss. The amount of impairment is determined by comparing the fair value of the asset group to its carrying value in a manner consistent with the highest and best use of those assets. The Partnership estimates fair value of operating assets using an income (discounted cash flows) approach, which uses an asset group's projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital reflective of current market conditions. If the fair value of the assets is less than their carrying value, an impairment charge is recorded for the difference.

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 has 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. The associated acreage is classified as assets held-for-sale within "Other Assets" in the unaudited condensed consolidated balance sheet.

8


(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 March 26, 2017 , 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 three months ended March 26, 2017 and March 27, 2016 is as follows:
(In thousands)
Goodwill
(gross)
Accumulated
Impairment
Losses
Goodwill
(net)
Balance at December 31, 2016
$
259,528

$
(79,868
)
$
179,660

Foreign currency translation
239


239

Balance at March 26, 2017
$
259,767

$
(79,868
)
$
179,899

Balance at December 31, 2015
$
290,679

$
(79,868
)
$
210,811

Foreign currency translation
3,897


3,897

Balance at March 27, 2016
$
294,576

$
(79,868
)
$
214,708


During the fourth quarter of 2016, management reassessed its accounting for the deferred income tax effects related to its Canadian disregarded entity temporary differences that were recorded in purchase accounting at the time of the acquisition. As a result, to appropriately reflect these tax effects, the Partnership recorded an adjustment that reduced goodwill and deferred tax liabilities by $33.9 million as of December 31, 2016. The adjustment did not impact the statements of operations and comprehensive income or cash flows for any period presented.

As of March 26, 2017 , December 31, 2016 , and March 27, 2016 , the Partnership’s other intangible assets consisted of the following:
(In thousands)
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Value
March 26, 2017
Other intangible assets:
Trade names
$
35,656

$

$
35,656

License / franchise agreements
3,301

(1,233
)
2,068

Total other intangible assets
$
38,957

$
(1,233
)
$
37,724

December 31, 2016
Other intangible assets:
Trade names
$
35,603

$

$
35,603

License / franchise agreements
3,326

(1,092
)
2,234

Total other intangible assets
$
38,929

$
(1,092
)
$
37,837

March 27, 2016
Other intangible assets:
Trade names
$
35,760

$

$
35,760

License / franchise agreements
1,444

(549
)
895

Total other intangible assets
$
37,204

$
(549
)
$
36,655


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

9


(5) Long-Term Debt:
Long-term debt as of March 26, 2017 , December 31, 2016 , and March 27, 2016 consisted of the following:
(In thousands)
March 26, 2017
December 31, 2016
March 27, 2016
Revolving credit facility (due 2018)
$
85,000

$

$
65,000

Term debt (1)
March 2013 U.S. term loan averaging 3.25% (due 2013-2020)
602,850

602,850

608,850

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

450,000

450,000

March 2013 U.S. fixed rate notes at 5.25% (due 2021)
500,000

500,000

500,000

1,637,850

1,552,850

1,623,850

Less current portion
(4,350
)
(2,775
)
(4,050
)
1,633,500

1,550,075

1,619,800

Less debt issuance costs
(14,882
)
(15,864
)
(18,949
)
$
1,618,618

$
1,534,211

$
1,600,851

(1)
The average interest rate does not reflect the effect of interest rate swap agreements (see Note 6).
In June 2014, the Partnership issued $450 million of 5.375% senior unsecured notes ("June 2014 notes"), maturing in 2024 . The net proceeds from the offering of the June 2014 notes were used to redeem in full all of the Partnership’s $405 million of 9.125% July 2010 senior unsecured notes that were scheduled to mature in 2018 (and which included $5.6 million of Original Issue Discount ("OID") to yield 9.375% ), to satisfy and discharge the indenture governing the notes that were redeemed and for general corporate purposes.

The Partnership's June 2014 notes pay interest semi-annually in June and December, with the principal due in full on June 1, 2024. Prior to June 1, 2017, 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% together with accrued and unpaid interest. 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 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.

In March 2013, the Partnership issued $500 million of 5.25% senior unsecured notes ("March 2013 notes"), maturing in 2021. The Partnership's March 2013 notes paid interest semi-annually in March and September, with the principal due in full on March 15, 2021 . The notes were redeemed in whole prior to March 15, 2018 at a price equal to 102.625% of the principal amount of the notes redeemed, together with accrued and unpaid interest to the redemption date.

Concurrently with this offering, the Partnership entered into an $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 terms of the senior secured term loan facility included a maturity date of March 6, 2020 and an interest rate of London InterBank Offering Rate ("LIBOR") plus 250 basis points (bps) with a LIBOR floor of 75 bps. The term loan amortized at $6.3 million annually. The net proceeds from the March 2013 notes and borrowings under the 2013 Credit Agreement were used to repay in full all amounts outstanding under the previous credit facilities. The facilities provided under the 2013 Credit Agreement were collateralized by substantially all of the assets of the Partnership.

Terms of the 2013 Credit Agreement included a revolving credit facility of a combined $255 million . Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility had a sub-limit of $15 million . U.S. denominated and Canadian denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 225 bps (with no LIBOR floor). The revolving credit facility was scheduled to mature in March 2018 and also provided for the issuance of documentary and standby letters of credit. The 2013 Credit Agreement required the Partnership to pay a commitment fee of 38 bps per annum on the unused portion of the credit facilities.

The 2013 Credit Agreement included two Financial Condition Covenants, which if breached for any reason and not cured, could result in an event of default. At the end of the first quarter of 2017, the first of these, the Consolidated Leverage Ratio, was set at a maximum of 5.50 x consolidated total debt (excluding the revolving debt)-to-consolidated EBITDA. The second of these required ratios, the Consolidated Fixed Charge Coverage Ratio, was set at a minimum of 1.1 x (consolidated total fixed charges-to-

10


consolidated EBITDA). As of March 26, 2017 , the Partnership was in compliance with these Financial Condition Covenants and all other covenants under the 2013 Credit Agreement.

The Partnership was allowed to make Restricted Payments, as defined in the 2013 Credit Agreement, of up to $60 million annually, so long as no default or event of default has occurred and is continuing and so long as the Partnership would be in compliance with certain financial ratios after giving effect to the payments. Additional Restricted Payments were allowed to be made based on an Excess-Cash-Flow formula should the Partnership’s pro-forma Consolidated Leverage Ratio be less than or equal to 5.00 x. Pursuant to the terms of the indentures governing the Partnership's June 2014 and March 2013 notes, the Partnership could make Restricted Payments of $60 million annually so long as no default or event of default has occurred and is continuing; and the Partnership's ability to make additional Restricted Payments was permitted should the Partnership's pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 5.00 x.

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.

On April 13, 2017 , the Partnership finalized the issuance of $500 million aggregate principal amount of 5.375% senior unsecured notes due 2027, in a private placement. Concurrently with this offering, the Partnership amended its existing 2013 Credit Agreement. The amended credit agreement includes a $750 million senior secured term loan facility and a $275 million senior secured revolving credit facility. Refer to Note 13 of the unaudited condensed consolidated financial statements for additional detail.

(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 our 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.

In the first quarter of 2016, the Partnership amended each of its four interest rate swap agreements to extend each of the maturities by two years to December 31, 2020 and effectively convert $500 million of variable-rate debt to a rate of 2.64% . As a result of the amendments, the previously existing interest rate swap agreements were de-designated, and the amounts recorded in AOCI are being amortized into earnings through the original December 31, 2018 maturity. The amended interest rate swap agreements are not designated as hedging instruments. There were no other changes to the terms of the agreements beyond those disclosed.

The fair market value of the Partnership's swap portfolio was recorded within "Derivative Liability" on the unaudited condensed consolidated balance sheets as of March 26, 2017 , December 31, 2016 , and March 27, 2016 as follows:
(In thousands)
March 26, 2017
December 31, 2016
March 27, 2016
Derivatives not designated as hedging instruments:
Interest rate swaps
$
(15,658
)
$
(17,721
)
$
(27,855
)

Derivatives Designated as Hedging Instruments
Changes in fair value of highly effective hedges are recorded as a component of AOCI in the balance sheet. Any ineffectiveness is recognized immediately in income. Amounts recorded as a component of accumulated other comprehensive income are reclassified into earnings in the same period the forecasted transactions affect earnings. As a result of the first quarter of 2016 amendments, the previously existing interest rate swap agreements were de-designated and the amended interest rate swap agreements are not designated as hedging instruments. As of March 26, 2017 , we have no designated derivatives; therefore, no amount of designated derivatives are forecasted to be reclassified into earnings in the next twelve months.

Derivatives Not Designated as Hedging Instruments
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 will be 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 are being amortized into earnings through the original December 31, 2018 maturity. As of March 26, 2017 , approximately $16.6 million of losses remain in AOCI related to the effective cash flow hedge contracts prior to de-designation, $9.5 million of which will be reclassified to earnings within the next twelve months.

The following table summarizes the effect of derivative instruments on income and other comprehensive income for the three-month periods ended March 26, 2017 and March 27, 2016 :
(In thousands)
Amount of Gain (Loss)
recognized in OCI on
Derivatives
(Effective Portion)
Amount and Location of Gain (Loss)
Reclassified from Accumulated OCI into Income
(Effective Portion)
Amount and Location of Gain (Loss) Recognized
in Income on Derivatives
Designated Derivatives
Three months ended 3/26/2017
Three months ended 3/27/2016
Designated Derivatives
Three months ended 3/26/2017
Three months ended 3/27/2016
Derivatives
Not Designated
Three months ended 3/26/2017
Three months ended 3/27/2016
Interest rate swaps
$

$
(4,671
)
Interest Expense
$

$
(851
)
Net effect of swaps
$
2,063

$
(265
)

During the quarter ended March 26, 2017 , the Partnership recognized $2.1 million of gains on the derivatives not designated as cash flow hedges and $2.4 million of expense representing the regular amortization of amounts in AOCI. The effect of these amounts resulted in a charge to earnings of $0.3 million recorded in “Net effect of swaps.”

During the quarter ended March 27, 2016 , the Partnership recognized $0.3 million of losses on the derivatives not designated as cash flow hedges and $1.6 million of expense representing the amortization of amounts in AOCI. The effect of these amounts resulted in a charge to earnings of $1.8 million recorded in “Net effect of swaps.”


11


(7) Fair Value Measurements:
The FASB's Accounting Standards Codification (ASC) 820 "Fair Value Measurements" 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 March 26, 2017 , December 31, 2016 , and March 27, 2016 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
March 26, 2017
December 31, 2016
March 27, 2016
Carrying Value
Fair
Value
Carrying Value
Fair
Value
Carrying Value
Fair
Value
Financial assets (liabilities) measured on a recurring basis:
Interest rate swap agreements not designated as cash flow hedges
Derivative Liability
Level 2
$
(15,658
)
$
(15,658
)
$
(17,721
)
$
(17,721
)
$
(27,855
)
$
(27,855
)
Other financial assets (liabilities):
Term debt
Long-Term Debt (1)
Level 2
$
(598,500
)
$
(601,493
)
$
(600,075
)
$
(603,075
)
$
(604,800
)
$
(604,800
)
March 2013 notes
Long-Term Debt (1)
Level 1
$
(500,000
)
$
(513,125
)
$
(500,000
)
$
(510,000
)
$
(500,000
)
$
(518,750
)
June 2014 notes
Long-Term Debt (1)
Level 1
$
(450,000
)
$
(462,375
)
$
(450,000
)
$
(462,375
)
$
(450,000
)
$
(464,625
)

(1)
Carrying values of long-term debt balances are before reductions for debt issuance costs of $14.9 million , $15.9 million , and $18.9 million as of March 26, 2017 , December 31, 2016 , and March 27, 2016 , respectively.

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.

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 March 26, 2017 , December 31, 2016 , or March 27, 2016 .

12


(8) Earnings per Unit:
Net loss per limited partner unit is calculated based on the following unit amounts:
Three months ended
3/26/2017
3/27/2016
(In thousands, except per unit amounts)
Basic weighted average units outstanding
56,008

55,877

Diluted weighted average units outstanding
56,008

55,877

Net loss per unit - basic
$
(1.16
)
$
(0.87
)
Net loss per unit - diluted
$
(1.16
)
$
(0.87
)

(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 corporate subsidiaries.

As of the first quarter of 2017, the Partnership has recorded $0.9 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.

(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.

13


(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-month periods ended March 26, 2017 and March 27, 2016 :

Changes in Accumulated Other Comprehensive Income by Component (1)
(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

(660
)
(660
)
Amounts reclassified from accumulated other comprehensive income, net of tax ($371) (2)
1,994


1,994

Net other comprehensive income
1,994

(660
)
1,334

Balance at March 26, 2017
$
(13,956
)
$
18,231

$
4,275


(1)
All amounts are net of tax. Amounts in parentheses indicate debits.
(2)
See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.

Changes in Accumulated Other Comprehensive Income by Component (1)
(In thousands)
Gains and Losses on Cash Flow Hedges
Foreign Currency Translation
Total
Balance at December 31, 2015
$
(19,300
)
$
22,591

$
3,291

Other comprehensive income before reclassifications, net of tax $711 and $2,520, respectively
(3,960
)
(4,395
)
(8,355
)
Amounts reclassified from accumulated other comprehensive income, net of tax ($247) (2)
1,329


1,329

Net other comprehensive income
(2,631
)
(4,395
)
(7,026
)
Balance at March 27, 2016
$
(21,931
)
$
18,196

$
(3,735
)

(1)
All amounts are net of tax. Amounts in parentheses indicate debits.
(2)
See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.

Reclassifications Out of Accumulated Other Comprehensive Income (1)
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
3/26/2017
Three months ended
3/27/2016
Interest rate contracts
$
2,365

$
1,576

Net effect of swaps
Provision for taxes
(371
)
(247
)
Benefit for taxes
Gains and losses on cash flow hedges
$
1,994

$
1,329

Net of tax

(1)
Amounts in parentheses indicate gains.

14


(12) Consolidating Financial Information of Guarantors and Issuers:
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 and March 2013 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 March 26, 2017 , December 31, 2016 , and March 27, 2016 and for the three-month periods ended March 26, 2017 and March 27, 2016 . In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, the Partnership has included the accompanying unaudited condensed consolidating financial statements.


15


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
March 26, 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
$

$

$
29,590

$
4,652

$

$
34,242

Receivables

1,552

61,894

541,622

(576,483
)
28,585

Inventories


2,008

37,310


39,318

Other current assets
74

907

3,419

26,350

(1,661
)
29,089

74

2,459

96,911

609,934

(578,144
)
131,234

Property and Equipment, net

835

176,952

1,410,861


1,588,648

Investment in Park
711,257

852,264

195,731

294,228

(2,053,480
)

Goodwill
674


59,620

119,605


179,899

Other Intangibles, net


13,306

24,418


37,724

Deferred Tax Asset

16,616



(16,616
)

Other Assets

2,000

109

18,665


20,774

$
712,005

$
874,174

$
542,629

$
2,477,711

$
(2,648,240
)
$
1,958,279

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

$
897

$
100

$
3,353

$

$
4,350

Accounts payable
453,329

125,934

2,081

39,854

(576,483
)
44,715

Deferred revenue


7,373

108,759


116,132

Accrued interest
864

589

7,729

1,831


11,013

Accrued taxes
1,084



9,113

(1,661
)
8,536

Accrued salaries, wages and benefits

13,792

635



14,427

Self-insurance reserves

11,397

1,484

12,952


25,833

Other accrued liabilities
2,644

3,907

164

4,904


11,619

457,921

156,516

19,566

180,766

(578,144
)
236,625

Deferred Tax Liability


13,273

125,350

(16,616
)
122,007

Derivative Liability
9,395

6,263




15,658

Other Liabilities

1,125


11,798


12,923

Long-Term Debt:
Revolving credit loans



85,000


85,000

Term debt

123,347

13,576

456,274


593,197

Notes
292,241

203,256

444,924



940,421

292,241

326,603

458,500

541,274


1,618,618

Equity
(47,552
)
383,667

51,290

1,618,523

(2,053,480
)
(47,552
)
$
712,005

$
874,174

$
542,629

$
2,477,711

$
(2,648,240
)
$
1,958,279





16


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2016
(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
$

$

$
65,563

$
58,178

$
(1,025
)
$
122,716

Receivables

1,409

28,019

576,975

(570,989
)
35,414

Inventories


1,371

24,905


26,276

Other current assets
173

796

2,229

9,833

(1,761
)
11,270

173

2,205

97,182

669,891

(573,775
)
195,676

Property and Equipment, net

844

175,358

1,363,018


1,539,220

Investment in Park
798,076

937,626

200,075

324,282

(2,260,059
)

Goodwill
674


59,381

119,605


179,660

Other Intangibles, net


13,255

24,582


37,837

Deferred Tax Asset

33,303



(33,303
)

Other Assets

2,000

108

18,680


20,788

$
798,923

$
975,978

$
545,359

$
2,520,058

$
(2,867,137
)
$
1,973,181

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

$
572

$
64

$
2,139

$

2,775

Accounts payable
428,396

145,258

740

18,471

(572,014
)
20,851

Deferred revenue


5,601

77,164


82,765

Accrued interest
4,613

3,207

2,057

109


9,986

Accrued taxes
405

18,653


41,661

(1,761
)
58,958

Accrued salaries, wages and benefits

29,227

1,131



30,358

Self-insurance reserves

12,490

1,321

13,252



27,063

Other accrued liabilities
2,282

3,018

193

4,434


9,927

435,696

212,425

11,107

157,230

(573,775
)
242,683

Deferred Tax Liability


12,838

125,350

(33,303
)
104,885

Derivative Liability
10,633

7,088




17,721

Other Liabilities

1,236


11,926


13,162

Long-Term Debt:
Term debt

123,672

13,598

456,958


594,228

Notes
292,075

203,140

444,768



939,983

292,075

326,812

458,366

456,958


1,534,211

Equity
60,519

428,417

63,048

1,768,594

(2,260,059
)
60,519

$
798,923

$
975,978

$
545,359

$
2,520,058

$
(2,867,137
)
$
1,973,181


17


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
March 27, 2016
(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
$

$

$
38,251

$
28,203

$
(1,903
)
$
64,551

Receivables
18

2,192

20,709

488,005

(477,010
)
33,914

Inventories

131

1,920

36,404


38,455

Other current assets
77

26,642

2,097

25,153

(26,051
)
27,918

95

28,965

62,977

577,765

(504,964
)
164,838

Property and Equipment, net

5,584

186,379

1,378,191


1,570,154

Investment in Park
699,382

904,557

176,055

24,194

(1,804,188
)

Goodwill
674


94,428

119,606


214,708

Other Intangibles, net


13,384

23,271


36,655

Deferred Tax Asset

2,920



(2,920
)

Other Assets

14,413

219

2,773


17,405

$
700,151

$
956,439

$
533,442

$
2,125,800

$
(2,312,072
)
$
2,003,760

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

$
1,649

$
93

$
2,308

$

$
4,050

Accounts payable
317,035

161,288

1,839

32,189

(478,259
)
34,092

Deferred revenue

139

6,313

98,804


105,256

Accrued interest
1,290

1,303

7,853

914


11,360

Accrued taxes
1,935


1,810

32,869

(26,051
)
10,563

Accrued salaries, wages and benefits

21,805

636



22,441

Self-insurance reserves

11,417

1,426

11,409


24,252

Distribution payable
46,968




(654
)
46,314

Other accrued liabilities
1,438

1,125

190

4,443


7,196

368,666

198,726

20,160

182,936

(504,964
)
265,524

Deferred Tax Liability


20,003

121,865

(2,920
)
138,948

Derivative Liability
16,713

11,142




27,855

Other Liabilities

1,232


11,156


12,388

Long-Term Debt:
Revolving credit loans
65,000





65,000

Term debt

243,628

13,660

340,021


597,309

Notes
291,578

202,794

444,170



938,542

356,578

446,422

457,830

340,021


1,600,851

Equity
(41,806
)
298,917

35,449

1,469,822

(1,804,188
)
(41,806
)
$
700,151

$
956,439

$
533,442

$
2,125,800

$
(2,312,072
)
$
2,003,760



18


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended March 26, 2017
(In thousands)
Cedar Fair L.P. (Parent)
Co-Issuer Subsidiary (Magnum)
Co-Issuer Subsidiary (Cedar Canada)
Guarantor Subsidiaries
Eliminations
Total
Net revenues
$
(6,138
)
$
(291
)
$
353

$
45,296

$
9,098

$
48,318

Costs and expenses:
Cost of food, merchandise, and games revenues



5,480


5,480

Operating expenses

40,592

5,304

29,295

9,098

84,289

Selling, general and administrative
894

14,495

746

11,484


27,619

Depreciation and amortization

8

2

5,355


5,365

Loss on impairment / retirement of fixed assets, net


445

1,081


1,526

894

55,095

6,497

52,695

9,098

124,279

Operating loss
(7,032
)
(55,386
)
(6,144
)
(7,399
)

(75,961
)
Interest expense (income), net
8,169

5,308

5,905

(500
)

18,882

Net effect of swaps
150

151




301

Gain on foreign currency


(2,671
)


(2,671
)
Other (income) expense
62

(15,264
)
657

14,545



Income from investment in affiliates
48,666

20,604

4,344

11,097

(84,711
)

Loss before taxes
(64,079
)
(66,185
)
(14,379
)
(32,541
)
84,711

(92,473
)
Provision (benefit) for taxes
675

(17,519
)
(3,276
)
(7,599
)

(27,719
)
Net loss
$
(64,754
)
$
(48,666
)
$
(11,103
)
$
(24,942
)
$
84,711

$
(64,754
)
Other comprehensive income (loss), (net of tax):
Foreign currency translation adjustment
(660
)

(660
)

660

(660
)
Unrealized gain on cash flow hedging derivatives
1,994

605



(605
)
1,994

Other comprehensive income (loss), (net of tax)
1,334

605

(660
)

55

1,334

Total comprehensive loss
$
(63,420
)
$
(48,061
)
$
(11,763
)
$
(24,942
)
$
84,766

$
(63,420
)



19


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended March 27, 2016
(In thousands)
Cedar Fair L.P. (Parent)
Co-Issuer Subsidiary (Magnum)
Co-Issuer Subsidiary (Cedar Canada)
Guarantor Subsidiaries
Eliminations
Total
Net revenues
$
(2,500
)
$
7,841

$
119

$
58,317

$
(5,339
)
$
58,438

Costs and expenses:
Cost of food, merchandise, and games revenues


(2
)
6,239


6,237

Operating expenses
10

39,978

5,277

44,678

(5,339
)
84,604

Selling, general and administrative
894

13,186

763

10,769


25,612

Depreciation and amortization

9


5,182


5,191

Loss on impairment / retirement of fixed assets, net


21

2,591


2,612

904

53,173

6,059

69,459

(5,339
)
124,256

Operating loss
(3,404
)
(45,332
)
(5,940
)
(11,142
)

(65,818
)
Interest expense (income), net
8,038

6,445

6,036

(750
)

19,769

Net effect of swaps
1,442

400




1,842

Gain on foreign currency


(19,561
)


(19,561
)
Other (income) expense
62

(19,371
)
874

18,435



Income (loss) from investment in affiliates
34,681

14,144

3,475

(725
)
(51,575
)

Income (loss) before taxes
(47,627
)
(46,950
)
3,236

(28,102
)
51,575

(67,868
)
Provision (benefit) for taxes
859

(12,270
)
2,510

(10,481
)

(19,382
)
Net income (loss)
$
(48,486
)
$
(34,680
)
$
726

$
(17,621
)
$
51,575

$
(48,486
)
Other comprehensive income (loss), (net of tax):
Foreign currency translation adjustment
(4,395
)

(4,395
)

4,395

(4,395
)
Unrealized loss on cash flow hedging derivatives
(2,631
)
(756
)


756

(2,631
)
Other comprehensive income (loss), (net of tax)
(7,026
)
(756
)
(4,395
)

5,151

(7,026
)
Total comprehensive loss
$
(55,512
)
$
(35,436
)
$
(3,669
)
$
(17,621
)
$
56,726

$
(55,512
)

























20


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Three Months Ended March 26, 2017
(In thousands)
Cedar Fair L.P. (Parent)
Co-Issuer Subsidiary (Magnum)
Co-Issuer Subsidiary (Cedar Canada)
Guarantor Subsidiaries
Eliminations
Total
NET CASH FROM (FOR) OPERATING ACTIVITIES
$
23,702

$
56,496

$
(35,208
)
$
(119,483
)
$
509

$
(73,984
)
CASH FLOWS FOR INVESTING ACTIVITIES
Intercompany receivables (payments) receipts



28,274

(28,274
)

Purchase of identifiable intangible assets



(10
)

(10
)
Capital expenditures


(1,148
)
(47,307
)

(48,455
)
Net cash for investing activities


(1,148
)
(19,043
)
(28,274
)
(48,465
)
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES
Borrowings on revolving credit loans



85,000


85,000

Distributions paid to partners
(48,651
)



516

(48,135
)
Intercompany payables (payments) receipts
24,949

(53,223
)


28,274


Tax effect of units involved in treasury unit transactions

(1,369
)



(1,369
)
Payments related to tax withholding for equity compensation

(1,904
)



(1,904
)
Net cash from (for) financing activities
(23,702
)
(56,496
)

85,000

28,790

33,592

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS


383



383

CASH AND CASH EQUIVALENTS
Net decrease for the period


(35,973
)
(53,526
)
1,025

(88,474
)
Balance, beginning of period


65,563

58,178

(1,025
)
122,716

Balance, end of period
$

$

$
29,590

$
4,652

$

$
34,242


21


CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Three Months Ended March 27, 2016
(In thousands)
Cedar Fair L.P. (Parent)
Co-Issuer Subsidiary (Magnum)
Co-Issuer Subsidiary (Cedar Canada)
Guarantor Subsidiaries
Eliminations
Total
NET CASH FROM (FOR) OPERATING
ACTIVITIES
$
(25,319
)
$
(51,142
)
$
(214
)
$
11,645

$
(1,903
)
$
(66,933
)
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES
Intercompany receivables (payments) receipts



63,088

(63,088
)

Capital expenditures


(2,247
)
(49,974
)

(52,221
)
Net cash from (for) investing activities


(2,247
)
13,114

(63,088
)
(52,221
)
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES
Borrowings on revolving credit loans
65,000





65,000

Intercompany payables (payments) receipts
(116,688
)
53,600



63,088


Tax effect of units involved in treasury unit transactions

(1,549
)



(1,549
)
Payments related to tax withholding for equity compensation

(909
)



(909
)
Net cash from (for) financing activities
(51,688
)
51,142



63,088

62,542

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS


1,606



1,606

CASH AND CASH EQUIVALENTS
Net increase (decrease) for the period
(77,007
)

(855
)
24,759

(1,903
)
(55,006
)
Balance, beginning of period
77,007


39,106

3,444


119,557

Balance, end of period
$

$

$
38,251

$
28,203

$
(1,903
)
$
64,551



22


(13) Subsequent Events:
On April 13, 2017 , the Partnership finalized the issuance of $500 million aggregate principal amount of 5.375% senior unsecured notes due 2027 , in a private placement ("April 2017 notes"). Concurrently with this offering, the Partnership amended its existing 2013 Credit Agreement. The amended credit agreement ("2017 Credit Agreement") includes a $750 million seven -year senior secured term loan facility and a $275 million five -year senior secured revolving credit facility. The net proceeds from the offering of the notes, along with the proceeds from the 2017 Credit Agreement, were used to redeem all of the Partnership's 5.25% senior unsecured notes due 2021 (the 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.

Terms of the 2017 Credit Agreement include an increase to the existing $255 million senior secured revolving credit facility to $275 million . Under the 2017 Credit Agreement, the Canadian revolving credit facility continues to have a sub-limit of $15 million . Borrowings under the new senior secured revolving credit facility bear interest at London Interbank Offered Rate ("LIBOR") or Canadian Dollar Offered Rate ("CDOR") plus 200 bps. The revolving credit facility, which matures in April 2022 , also provides the issuance of documentary and standby letters of credit. The 2017 Credit Agreement requires that we pay a commitment fee of 38 bps per annum on the unused portion of the credit facilities.

The U.S. term loan, which amortizes at 0.25% quarterly, or $7.5 million per year, is scheduled to mature in April 2024 and bears interest at a rate of LIBOR plus 225 bps.

The $500 million senior unsecured notes will pay interest semi-annually in April and October, with the principal due in full on April 15, 2027 . 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, 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. Prior to April 15, 2020 , up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 105.375% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any.

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 $7.6 million and debt premium payments of $15.5 million . Accordingly, the Partnership will record a loss on debt extinguishment of approximately $23.1 million in the second quarter of 2017.


23


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview:
We generate our revenues primarily from sales of (1) admission to our parks, (2) food, merchandise and games inside our parks, and (3) hotel rooms, extra-charge attractions, and food and other attractions both inside and outside our parks. Our principal costs and expenses, which include salaries and wages, advertising, maintenance, operating supplies, utilities, and insurance are relatively fixed and do not vary significantly with attendance.

Each of our properties is overseen by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including allocating resources, on a property-by-property basis.

Along with attendance and per capita statistics, discrete financial information and operating results are prepared at the individual park level for use by the CEO, who is the Chief Operating Decision Maker (CODM), as well as by the Chief Financial Officer, the Chief Operating Officer, the Executive Vice President - Operations, Regional Vice Presidents and the park general managers.

Critical Accounting Policies:
Management’s discussion and analysis of financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which were prepared in accordance with accounting principles generally accepted in the United States of America. These principles require us to make judgments, estimates and assumptions during the normal course of business that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ significantly from those estimates under different assumptions and conditions.

Management believes that judgment and estimates related to the following critical accounting policies could materially affect our consolidated financial statements:
Impairment of Long-Lived Assets
Goodwill and Other Intangible Assets
Self-Insurance Reserves
Derivative Financial Instruments
Revenue Recognition
Income Taxes

In the first quarter of 2017 , there were no changes in the above critical accounting policies from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016 .

24


Adjusted EBITDA:
We believe that Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the 2013 Credit Agreement) is a meaningful measure as it is widely used by analysts, investors and comparable companies in our industry to evaluate our operating performance on a consistent basis, as well as more easily compare our results with those of other companies in our industry. Further, management believes Adjusted EBITDA is a meaningful measure of park-level operating profitability and we use it for measuring returns on capital investments, evaluating potential acquisitions, determining awards under incentive compensation plans, and calculating compliance with certain loan covenants. Adjusted EBITDA is provided in the discussion of results of operations that follows as a supplemental measure of our operating results and is not intended to be a substitute for operating income, net income or cash flows from operating activities as defined under generally accepted accounting principles. In addition, Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

The table below sets forth a reconciliation of Adjusted EBITDA to net loss for the three-month periods ended March 26, 2017 and March 27, 2016 .
Three months ended
3/26/2017
3/27/2016
(In thousands)
(13 weeks)
(13 weeks)
Net loss
$
(64,754
)
$
(48,486
)
Interest expense
18,914

19,787

Interest income
(32
)
(18
)
Benefit for taxes
(27,719
)
(19,382
)
Depreciation and amortization
5,365

5,191

EBITDA
(68,226
)
(42,908
)
Net effect of swaps
301

1,842

Non-cash foreign currency gain
(2,679
)
(19,714
)
Non-cash equity compensation expense
3,417

2,468

Loss on impairment / retirement of fixed assets, net
1,526

2,612

Other (1)
192

244

Adjusted EBITDA
$
(65,469
)
$
(55,456
)

(1)
Consists of certain costs as defined in the Company's 2013 Credit Agreement and prior credit agreements. These items are excluded in the calculation of Adjusted EBITDA and have included certain legal expenses, costs associated with certain ride abandonment or relocation expenses, contract termination costs, and severance expenses.

25


Results of Operations:
We believe the following are significant measures in the structure of our management and operational reporting, and they are used as major factors in key operational decisions:
Attendance is defined as the number of guest visits to the Partnership's amusement parks and separately gated outdoor water parks.
In-park per capita spending is calculated as revenues generated within our amusement parks and separately gated outdoor water parks along with related tolls and parking revenues, divided by total attendance.
Out-of-park revenues are defined as revenues from resort, marina, sponsorship and all other out-of-park operations.
Both in-park per capita and out-of-park revenues exclude amounts remitted for concessionaire arrangements.
Three months ended March 26, 2017

Operating results for the first quarter are historically less than 5% of our full-year revenues and attendance. The results include normal off-season operating, maintenance, and administrative expenses at our ten seasonal amusement parks and two outdoor water parks, as well as daily operations at Knott's Berry Farm, which is open year-round, and Castaway Bay, which is generally open daily from Memorial Day to Labor Day plus a limited daily schedule for the balance of the year. The fiscal three-month period ended March 26, 2017 consisted of a 13-week period and included a total of 88 operating days compared with 13 weeks and 96 operating days for the fiscal three-month period ended March 27, 2016 . As of March 26, 2017 and March 27, 2016 , four of our amusement parks were operating.

The following table presents key financial information for the three months ended March 26, 2017 and March 27, 2016 :
Three months ended
Three months ended
3/26/2017
3/27/2016
Increase (Decrease)
(13 weeks)
(13 weeks)
$
%
(Amounts in thousands, except for per capita spending)
Net revenues
$
48,318

$
58,438

$
(10,120
)
(17.3
)%
Operating costs and expenses
117,388

116,453

935

0.8
%
Depreciation and amortization
5,365

5,191

174

3.4
%
Loss on impairment / retirement of fixed assets, net
1,526

2,612

(1,086
)
N/M

Operating loss
$
(75,961
)
$
(65,818
)
$
(10,143
)
(15.4
)%
N/M - Not meaningful
Other Data:
Adjusted EBITDA (1)
$
(65,469
)
$
(55,456
)
$
(10,013
)
(18.1
)%

(1)
For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation to net loss, see page 26.

For the quarter ended March 26, 2017 , net revenues decreased by $10.1 million , to $48.3 million , from $58.4 million in the first quarter of 2016. This reflects a decrease in attendance offset partially by an increase in in-park per capita spending. Out-of-park revenues were comparable with the same period in the prior year. The decrease in attendance was largely driven by the shift of the Easter holiday and spring break period from the first quarter of 2016 to the second quarter of 2017, and by rain at Knott's Berry Farm. The increase in in-park per capita spending was largely attributable to increases in admissions pricing. Out-of-park revenues were comparable with the prior period due to proceeds received in the current period from a business interruption insurance claim relating to a prior year water outage at Cedar Point largely offsetting prior period revenues received from an early season Super Bowl 50 special event. Currency exchange rates had an immaterial impact on net revenues for the quarter as our Canadian park was not operating during the period.

Operating costs and expenses for the quarter increased 0.8% , or $0.9 million , to $117.4 million from $116.5 million in the first quarter of 2016. The increase is the result of a $2.0 million increase in SG&A expense offset by an $0.8 million decrease in cost of good sold and a $0.3 million decrease in operating expenses. Cost of goods sold decreased due to lower sales volume during the quarter. Cost of goods sold, as a percentage of food, merchandise, and games revenue, was comparable for both periods. The $2.0 million increase in SG&A expense was primarily attributable to improvements in security and technology, increases in employee health costs, and increases in employee compensation and corresponding employer taxes. The $0.3 million decrease

26


in operating expenses was primarily due to decreased maintenance expense attributable to specific prior year repair projects that did not reoccur in the current year, partially offset by increased employer taxes and health care costs related to increased medical claims. The increase in operating costs and expenses was not materially impacted by foreign currency exchange rates during the first quarter.

Depreciation and amortization expense for the quarter increased $0.2 million , or 3.4% due to growth in capital improvements. For the first quarter of 2017, the loss on impairment / retirement of fixed assets was $1.5 million , reflecting the retirement of assets in the normal course of business at several of our properties, compared to $2.6 million in the first quarter of 2016.

After the items above, operating loss for the first quarter of 2017 increased $10.1 million to $76.0 million compared to an operating loss of $65.8 million for the first quarter of 2016.

Interest expense for the first quarter of 2017 decreased $0.9 million from $19.8 million in the first quarter of 2016. The net effect of our swaps resulted in a non-cash charge to earnings of $0.3 million for the first quarter of 2017 compared with a $1.8 million non-cash charge to earnings in the first quarter of 2016. The difference reflects the change in fair market value movements in our de-designated swap portfolio offset by the amortization of amounts in OCI for these swaps. During the current quarter, we also recognized a $2.7 million net benefit to earnings for foreign currency transaction gains and losses compared with a $19.6 million net benefit to earnings for the first quarter in 2016. Both amounts primarily represent remeasurement of the U.S.-dollar denominated debt held at our Canadian property from the applicable currency to the legal entity's functional currency.

During the first quarter of 2017, a benefit for taxes of $27.7 million was recorded to account for PTP taxes and income taxes on our corporate subsidiaries. This compares to a benefit for taxes recorded in the first quarter of 2016 of $19.4 million . This increase in tax benefit relates largely to an increase in pretax loss from our corporate subsidiaries compared to the same period a year ago.

After the items above, net loss for the current quarter totaled $64.8 million , or $1.16 per diluted limited partner unit, compared with a net loss of $48.5 million , or $0.87 per diluted unit, for the first quarter a year ago.

For the current quarter, our Adjusted EBITDA loss increased to $65.5 million from $55.5 million for the fiscal first quarter of 2016. The approximate $10.0 million increase in Adjusted EBITDA loss is due to the attendance and revenue decline largely driven by the shift of the Easter holiday and spring break period from the first quarter of 2016 to the second quarter of 2017, and due to rain at Knott's Berry Farm.

April 2017

Based on preliminary results, net revenues through April are up 2% over the same four-month period last year.

Liquidity and Capital Resources:
With respect to both liquidity and cash flow, we ended the first quarter of 2017 in sound condition. The working capital ratio (current assets divided by current liabilities) of 0.6 at March 26, 2017 is the result of normal seasonal activity. Receivables, inventories and payables are at normal seasonal levels.
Operating Activities
During the three -month period ended March 26, 2017 , net cash used for operating activities increased $7.1 million from the same period a year ago, primarily due to a higher net loss in the current period.
Investing Activities
Net cash used for investing activities for the first three months of 2017 was $48.5 million , a decrease of $3.8 million compared with the same period in the prior year. This decrease reflects lower capital expenditures in the period.
Financing Activities
Net cash from financing activities for the first three months of 2017 was $33.6 million , a decrease of $29.0 million compared with the same period in the prior year. This decrease reflects the year-over-year timing difference in the payment of unitholder distributions offset by an increase in net revolver borrowings of $20.0 million .


27


As of March 26, 2017 , our outstanding debt, before reduction for debt issuance costs, consisted of the following:

$450 million of 5.375% senior unsecured notes, maturing in 2024 , issued at par. Prior to June 1, 2017, 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% together with accrued and unpaid interest. 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 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 notes pay interest semi-annually in June and December.

$500 million of 5.25% senior unsecured notes, maturing in 2021 , issued at par. The notes were redeemed in whole prior to March 15, 2018 at a price equal to 102.625% of the principal amount of the notes redeemed, together with accrued and unpaid interest to the redemption date. The notes paid interest semi-annually in March and September.

$602.9 million of senior secured term debt, maturing in March 2020 under our 2013 Credit Agreement. The term debt had an interest rate of London InterBank Offering Rate ("LIBOR") plus 250 basis points (bps) with a LIBOR floor of 75 bps. The term loan amortized at $6.3 million annually. Current maturities totaled $4.4 million as of March 26, 2017 .

$85.0 million of borrowings under the $255 million senior secured revolving credit facility under our 2013 Credit Agreement. Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility had a sub-limit of $15.0 million . U.S. denominated and Canadian denominated loans made under the revolving credit facility had an interest rate of LIBOR plus 225 bps (with no LIBOR floor). The revolving credit facility was scheduled to mature in March 2018 and also provided for the issuance of documentary and standby letters of credit. The 2013 Credit Agreement required that we pay a commitment fee of 38 bps per annum on the unused portion of the credit facilities. After letters of credit, which totaled $15.9 million at March 26, 2017 , we had $154.1 million of available borrowings under the revolving credit facility and cash on hand of $34.2 million .

As of March 26, 2017 , we have four interest rate swap agreements that effectively convert $500 million of variable-rate debt to fixed rates. These swaps, which mature on December 31, 2020 and fix LIBOR at a weighted average rate of 2.64% , were not designated as cash flow hedges. Additional detail regarding our current and historical swap arrangements is provided in Note 6 to our unaudited condensed consolidated financial statements.

As of March 26, 2017 , the fair market value of our derivative portfolio was $15.7 million and was recorded in "Derivative Liability."

The 2013 Credit Agreement included two Financial Condition Covenants, which if breached for any reason and not cured, could result in an event of default. At the end of the first quarter of 2017, the first of these, the Consolidated Leverage Ratio, was set at a maximum of 5.50x consolidated total debt (excluding the revolving debt)-to-consolidated EBITDA. The second of these required ratios, the Consolidated Fixed Charge Coverage Ratio, was set at a minimum of 1.1x (consolidated total fixed charges-to-consolidated EBITDA). As of March 26, 2017 , the Partnership was in compliance with these Financial Condition Covenants and all other covenants under the 2013 Credit Agreement.

The Partnership was allowed to make Restricted Payments, as defined in the 2013 Credit Agreement, of up to $60 million annually, so long as no default or event of default has occurred and is continuing and so long as the Partnership would be in compliance with certain financial ratios after giving effect to the payments. Additional Restricted Payments were allowed to be made based on an Excess-Cash-Flow formula should the Partnership's pro-forma Consolidated Leverage Ratio be less than or equal to 5.00x. Pursuant to the terms of the indentures governing the Partnership's June 2014 and March 2013 notes, the Partnership could make Restricted Payments of $60 million annually so long as no default or event of default has occurred and is continuing; and our ability to make additional Restricted Payments was permitted should the Partnership's pro forma Total Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 5.00x.

2017 Debt Refinancing
On April 13, 2017 , the Partnership finalized the issuance of $500 million aggregate principal amount of 5.375% senior unsecured notes due 2027 , in a private placement ("April 2017 notes"). Concurrently with this offering, the Partnership amended its existing 2013 Credit Agreement. The amended credit agreement ("2017 Credit Agreement") includes a $750 million seven-year senior secured term loan facility and a $275 million five-year senior secured revolving credit facility. The net proceeds from the offering of the notes, along with the proceeds from the 2017 Credit Agreement, were used to redeem all of the Partnership's 5.25% senior unsecured notes due 2021 (the 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.


28


Terms of the 2017 Credit Agreement include an increase to the existing $255 million senior secured revolving credit facility to $275 million . Under the 2017 Credit Agreement, the Canadian revolving credit facility continues to have a sub-limit of $15 million . Borrowings under the new senior secured revolving credit facility bear interest at London Interbank Offered Rate ("LIBOR") or Canadian Dollar Offered Rate ("CDOR") plus 200 bps. The revolving credit facility, which matures in April 2022 , also provides the issuance of documentary and standby letters of credit. The 2017 Credit Agreement requires that we pay a commitment fee of 38 bps per annum on the unused portion of the credit facilities.

The U.S. term loan, which amortizes at 0.25% quarterly, or $7.5 million per year, is scheduled to mature in April 2024 and bears interest at a rate of LIBOR plus 225 bps.

The $500 million senior unsecured notes will pay interest semi-annually in April and October, with the principal due in full on April 15, 2027 . 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, 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. Prior to April 15, 2020 , up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 105.375% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any.

The 2017 Credit Agreement includes one Financial Condition Covenant, the Consolidated Leverage Ratio. The ratio is set at a maximum of 5.50x consolidated total debt-to-consolidated EBITDA, which if breached for any reason and not cured, could result in an event of default.

The Partnership is allowed to make Restricted Payments, as defined in the 2017 Credit Agreement, of up to $100 million annually, so long as no default or event of default has occurred and is continuing and so long as the Partnership would be in compliance with the Consolidated Leverage Ratio after giving effect to the payments. Additional Restricted Payments are allowed to be made based on an Excess-Cash-Flow formula should the Partnership's pro-forma Consolidated Leverage Ratio be less than or equal to 5.25x. Pursuant to the terms of the indenture governing the Partnership's April 2017 notes, the Partnership can make Restricted Payments of $100 million annually so long as no default or event of default has occurred and is continuing; and our ability to make additional Restricted Payments is permitted should the Partnership's pro forma Total Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 5.25x.

In accordance with the 2013 Credit Agreement debt provisions, on February 22, 2017, we announced the declaration of a distribution of $0.855 per limited partner unit, which was paid on March 15, 2017. Also, in accordance with the 2017 Credit Agreement debt provisions, on May 3, 2017, we announced the declaration of a distribution of $0.855 per limited partner unit, which will be payable on June 15, 2017.

Existing credit facilities and cash flows from operations are expected to be sufficient to meet working capital needs, debt service, partnership distributions and planned capital expenditures for the foreseeable future.

Off Balance Sheet Arrangements:
We had $15.9 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of March 26, 2017 . We have no other significant off-balance sheet financing arrangements.

Forward Looking Statements
Some of the statements contained in this report (including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section) that are not historical in nature are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements as to our expectations, beliefs and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond our control and could cause actual results to differ materially from those described in such statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors, including those listed under Item 1A in the Company’s Annual Report on Form 10-K, could adversely affect our future financial performance and cause actual results to differ materially from our expectations.

29


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks from fluctuations in interest rates, and to a lesser extent on currency exchange rates on our operations in Canada, and from time to time, on imported rides and equipment. The objective of our financial risk management is to reduce the potential negative impact of interest rate and foreign currency exchange rate fluctuations to acceptable levels. We do not acquire market risk sensitive instruments for trading purposes.

We manage interest rate risk through the use of a combination of fixed-rate long-term debt, interest rate swaps that fix a portion of our variable-rate long-term debt, and variable-rate borrowings under our revolving credit facility. Translation exposures with regard to our Canadian operations are not hedged.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the change in fair value of the derivative instrument is reported as a component of “Other comprehensive income (loss)” and reclassified into earnings in the period during which the hedged transaction affects earnings. Changes in fair value of derivative instruments that do not qualify as effective hedging activities are reported as “Net effect of swaps” in the unaudited condensed consolidated statements of operations. Additionally, the “Other comprehensive income (loss)” related to interest rate swaps that become ineffective is amortized over the remaining life of the interest rate swap and reported as a component of “Net effect of swaps” in the unaudited condensed consolidated statements of operations.

As of March 26, 2017 , on an adjusted basis after giving affect to the April 2017 debt refinancing and the impact of interest rate swap agreements, $1,450.0 million of our outstanding long-term debt represented fixed-rate debt and $250.0 million represented variable-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $24.9 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt (not considering the impact of our interest rate swaps) would lead to an increase of approximately $7.4 million in annual cash interest costs.

Assuming a hypothetical 100 bps increase in 30-day LIBOR, the amount of net cash interest paid on our derivative portfolio would decrease by $5.0 million over the next twelve months.

A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $3.0 million decrease in annual operating income.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures -
The Partnership maintains a system of controls and procedures designed to ensure that information required to be disclosed by the Partnership in its reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission and that such information is accumulated and communicated to the Partnership’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of March 26, 2017 , the Partnership's management, with the participation of the Partnership's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Partnership's disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Partnership's disclosure controls and procedures were effective as of March 26, 2017 .


(b) Changes in Internal Control Over Financial Reporting -
There were no changes in the Partnership’s internal control over financial reporting that occurred during the fiscal quarter ended March 26, 2017 that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

30


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS
Not applicable.

ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors previously disclosed in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2016 .


31


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities:
The following table presents information about repurchases of Cedar Fair, L.P. Depositary Units representing limited partner interests made by the Partnership during the first quarter of fiscal 2017:








Period
(a)






Total Number of Units Purchased (1)
(b)






Average Price Paid per Unit
(c)



Total Number of Units Purchased as Part of Publicly Announced Plans or Programs
(d)

Maximum Number (or Approximate Dollar Value) of Units that May Yet Be Purchased Under the Plans or Programs
January 1 - January 29
1,068

$
63.35


$

January 30 - February 26




February 27 - March 26
26,855

68.39



Total
27,923

$
68.20


$


(1)
All of the units reported as purchased are attributable to units that were reacquired by the Partnership in satisfaction of tax obligations related to the vesting of restricted units which were granted under the Partnership's Omnibus Incentive Plan.


32


ITEM 6. EXHIBITS
Exhibit (4.1)
Indenture, dated as of April 13, 2017, by and among Cedar Fair, L.P., Canada’s Wonderland Company, Magnum Management Corporation, and Millennium Operations LLC, as issuers, the guarantors named therein, and The Bank of New York Mellon, as trustee. Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed April 13, 2017.
Exhibit (4.2)
Form of 5.375% Senior Note due 2027 (included in Exhibit 4.1). Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed April 13, 2017.
Exhibit (4.3)
Registration Rights Agreement, dated April 13, 2017, by and among Cedar Fair, L.P., Canada’s Wonderland Company, Magnum Management Corporation, and Millennium Operations LLC, as issuers, the guarantors named therein, and J.P. Morgan Securities LLC, on behalf of itself and as representative of the initial purchasers named therein. Incorporated herein by reference to Exhibit 4.3 to the Registrant’s Form 8-K filed April 13, 2017.
Exhibit (10.1)
Restatement Agreement, dated April 13, 2017, among Cedar Fair, L.P., Magnum Management Corporation, Canada’s Wonderland Company, and Millennium Operations LLC, as borrowers, the several lenders from time to time party thereto, JPMorgan Chase Bank, N.A. as administrative agent and collateral agent, and the other parties thereto. Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed April 13, 2017.
Exhibit (31.1)
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit (31.2)
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit (32)
Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit (101)
The following materials from the Partnership's Quarterly Report on Form 10-Q for the quarter ended March 26, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) the Unaudited Condensed Consolidated Statements of Income, (ii) the Unaudited Condensed Consolidated Balance Sheets, (iii) the Unaudited Condensed Consolidated Statements of Cash Flow, (iv) the Unaudited Condensed Consolidated Statement of Equity, and (v) related notes.

33


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, Inc.
General Partner
Date:
May 3, 2017
/s/ Matthew A. Ouimet
Matthew A. Ouimet
Chief Executive Officer
Date:
May 3, 2017
/s/ Brian C. Witherow
Brian C. Witherow
Executive Vice President and
Chief Financial Officer


34


INDEX TO EXHIBITS
Exhibit (4.1)
Indenture, dated as of April 13, 2017, by and among Cedar Fair, L.P., Canada’s Wonderland Company, Magnum Management Corporation, and Millennium Operations LLC, as issuers, the guarantors named therein, and The Bank of New York Mellon, as trustee. Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed April 13, 2017.
Exhibit (4.2)
Form of 5.375% Senior Note due 2027 (included in Exhibit 4.1). Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed April 13, 2017.
Exhibit (4.3)
Registration Rights Agreement, dated April 13, 2017, by and among Cedar Fair, L.P., Canada’s Wonderland Company, Magnum Management Corporation, and Millennium Operations LLC, as issuers, the guarantors named therein, and J.P. Morgan Securities LLC, on behalf of itself and as representative of the initial purchasers named therein. Incorporated herein by reference to Exhibit 4.3 to the Registrant’s Form 8-K filed April 13, 2017.
Exhibit (10.1)
Restatement Agreement, dated April 13, 2017, among Cedar Fair, L.P., Magnum Management Corporation, Canada’s Wonderland Company, and Millennium Operations LLC, as borrowers, the several lenders from time to time party thereto, JPMorgan Chase Bank, N.A. as administrative agent and collateral agent, and the other parties thereto. Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed April 13, 2017.
Exhibit (31.1)
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit (31.2)
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit (32)
Certifications Pursuant to 18 U.S.C. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit (101)
The following materials from the Partnership's Quarterly Report on Form 10-Q for the quarter ended March 26, 2017 formatted in Extensible Business Reporting Language (XBRL): (i) the Unaudited Condensed Consolidated Statements of Income, (ii) the Unaudited Condensed Consolidated Balance Sheets, (iii) the Unaudited Condensed Consolidated Statements of Cash Flow, (iv) the Unaudited Condensed Consolidated Statement of Equity, and (v) related notes.

35
TABLE OF CONTENTS