This excerpt taken from the FUN 8-K filed Nov 3, 2009.
Kinzel stated that based on trailing twelve month results as of September 27, 2009, preliminary October results and a tightening at December 31st of the maximum consolidated leverage ratio within the credit agreement, it is expected that the Company will suspend distributions beginning in 2010 and the cash flow be redirected to retire term debt.
Over the past 12 months we have accomplished initiatives that have reduced debt by approximately $110 million and addressed our capital structure, said Kinzel. This has been done through the reduction of our annual distribution rate, the sale of 87 acres of surplus land in Toronto, regular amortization payments and an extension of $900 million of our term debt. We have also considered several alternatives including the sale of selected assets, issuing additional equity in a public or private offering, as well as others, but concluded that, in the current market environment, these are not executable on terms that would be beneficial to the Company and the unitholders.
Our actions, although successful, have not been enough to offset the decrease in operating performance we have experienced in 2009, continued Kinzel. We will be reviewing alternatives to improve operating performance and enable unitholders to realize value consistent with our financial performance, including changes to capital structure, corporate structure, the Companys debt and other strategic options. We will pursue those alternatives that we believe are in the best interest of the Company and the unitholders.
The Company previously announced that a cash distribution of $0.25 per limited partner unit will be paid on November 16, 2009 to unitholders of record on November 4, 2009.
Kinzel concluded by noting that virtually all of Cedar Fairs revenues from its seasonal amusement parks, water parks and other seasonal resort facilities are realized during a 130- to 140-day operating period beginning in early May, with the major portion concentrated in the peak vacation months of July and August. Only Knotts Berry Farm and Castaway Bay are open year-round, with Knotts Berry Farm operating at its highest level of attendance during the third and fourth quarters of the year.
Management will host a conference call with analysts today, November 3, 2009, at 10:00 a.m. Eastern Time, which will be web cast live in listen only mode via the Cedar Fair web site (www.cedarfair.com). It will also be available for replay starting at approximately 1:00 p.m. ET, Tuesday, November 3, 2009, until 11:59 p.m. ET, Tuesday, November 17, 2009. In order to access the replay of the earnings call, please dial 1-800-406-7325 followed by the access code 4151550.