Edgar Filing: CEDAR FAIR L P

Large accelerated filer

Accelerated filer

Non-accelerated filer

o (Do not check if a smaller reporting company)

Smaller reporting company

Cedar Fair-10KA-2012

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Mark One)



x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2012



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 office)		(Zip Code)

Registrant's telephone number, including area code: (419) 626-0830

Securities registered pursuant to Section 12(b) of the Act:



Title of each class			Name of each exchange on which registered
Depositary Units (Representing Limited Partner Interests)			New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

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The aggregate market value of Depositary Units held by non-affiliates of the Registrant based on the closing price of such units on June 29, 2012 of $29.97 per unit was approximately $1,610,275,543.

Number of Depositary Units representing limited partner interests outstanding as of April 20, 2013: 55,713,078

DOCUMENTS INCORPORATED BY REFERENCE

None.

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CEDAR FAIR, L.P.

INDEX




		PAGE


PART II

Item 6.	Selected Financial Data	4

Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	5

Item 8.	Financial Statements and Supplementary Data	16

Item 9A.	Controls and Procedures	52

PART IV

Item 15.	Exhibits and Financial Statement Schedules	55

Signatures		57

Exhibit Index		58

Consent		59

Certifications		60

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EXPLANATORY NOTE

This Amendment No. 2 on Form 10-K/A (the “Amendment” or the “Form 10-K/A”) amends the Annual Report on Form 10-K of Cedar Fair, L.P. (“Cedar Fair” or the “Partnership”) for the year ended December 31, 2012, as initially filed with the Securities and Exchange Commission ("SEC") on February 25, 2013 (the “Original 2012 Form 10-K”) and as previously amended by Amendment No. 1 thereto filed with the SEC on April 30, 2013.

As previously discussed in a Form 8-K filed on May 8, 2013, on May 6, 2013, the Partnership determined that the previously issued consolidated financial statements for years ended December 31, 2012 and 2011 should no longer be relied upon.

The Audit Committee of our Board of Directors concurred with management's decision to amend our previously filed reports. The foregoing decision was made after a series of discussions with the SEC staff about a matter identified during their review of our 2011 Form 10-K and 2012 Form 10-K. This matter, which related to our deferral of a loss from the disposal of an asset under the composite method of depreciation, was discussed with the SEC's Office of the Chief Accountant and ultimately resulted in the conclusion that loss deferral was inappropriate.

In its Original 2012 Form 10-K, the Partnership announced plans to move off the composite depreciation method of accounting beginning in 2013. In the process of changing accounting methods and responding to an open SEC comment letter, the Partnership determined that its accounting treatment under the composite depreciation method for the retirement of a ride at one of its parks in 2011 was in error. In particular, the discrete charge related to that retirement (totaling $8.8 million on a pre-tax basis) should have been recorded to the statement of operations in 2011 rather than being deferred and recorded in the composite pool as was disclosed in the 2011 Form 10-K as originally filed. The Partnership originally determined that the asset retirement was normal, and thereby the composite method of depreciation resulted in $8.8 million (net book value after salvage) being recorded in Accumulated Depreciation in the Partnership's 2011 Annual Report on Form 10-K. The amount remaining in Accumulated Depreciation in the Partnership's Original 2012 Form 10-K was $7.8 million. The correction of this error results in adjustments to the financial statements that decrease pre-tax earnings in 2011 by $8.8 million and increase pre-tax earnings in 2012 by $1.0 million. The adjustments will have no impact on results of operations or balance sheet for 2010.

As disclosed in the Partnership's prior filings, the Partnership had determined that it was preferable to change from the composite method of depreciation to the unit method of depreciation with the change effective January 1, 2013. The Partnership believes that pursuant to generally accepted accounting principles, changing from the composite method of depreciation to the unit method of depreciation is a change in accounting estimate that is effected by a change in accounting principle, which should be accounted for prospectively. The change to the unit method of depreciation eliminates the qualitative judgment needed to determine whether an asset retirement is normal or unusual, as the net book value of all retirements will be recorded in the Consolidated Statements of Operations and Comprehensive Income.

The Partnership believes the above-described error reflects a material weakness in its internal control over financial reporting related to its fixed assets. As a result, the Partnership has concluded that its disclosure controls and procedures and its internal control over financial reporting related to its fixed assets were not effective as of the end of the period covered by this Form 10-K/A. The Partnership has remediated this material weakness through the conversion of all composite assets to the unit method of depreciation as of January 1, 2013.

This Amendment No. 2 does not supersede the Original 2012 Form 10-K as amended by Amendment No. 1 thereto in its entirety, and must be read in conjunction with the Original 2012 Form 10-K as amended by Amendment No. 1. The following items of the Original 2012 Form 10-K, as previously amended by Amendment No.1 thereto are superseded and replaced in their entirety by this Amendment No. 2;


•	Item 6. Selected Financial Data;


•	Item 7. Management's Discussion & Analysis of Financial Condition and Results of Operations;


•	Item 8. Financial Statements and Supplementary Data; and


•	Item 9A. Controls and Procedures.

Item 15 and the Exhibit Index following the Signatures hereto amend and modify such disclosures in the Original 2012 Form 10-K as amended by Amendment No. 1 thereto in order to provide certain exhibit filings with this Form 10-K/A including new certifications, but this Amendment No. 2 does not supersede those previous disclosures in their entirety.

Other than those items identified above, no other Parts or disclosures from the Original 2012 Form 10-K or Amendment No. 1 are included in or modified or updated by this Amendment No. 2. This Amendment is being filed solely for the purpose of correcting the Partnership's accounting treatment with respect to the retirement of a ride at one of its parks in 2011, as described above; except as required to reflect such correction or to incorporate language requested by the SEC staff in such included disclosure, this Amendment does not reflect events or developments that have occurred after the date of the Original 2012 Form 10-K and does not modify or update disclosures presented in the Original 2012 Form 10-K or Amendment No. 1 thereto in any way.

Among other things, disclosures and forward-looking statements made in the Original 2012 Form 10-K and Amendment No. 1 have not been revised to reflect events, results, or developments that have occurred or facts that have become known to us after the respective dates of such filings (other than as discussed above), and such disclosures and forward-looking statements should be read in their historical context. Accordingly, this Amendment should be read in conjunction with the Partnership's filings made with the SEC subsequent to the filing of the Original 2012 Form 10-K, including without limitation the Form 8-K filed by the Partnership on March 8, 2013.

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PART II - OTHER INFORMATION

ITEM 6. SELECTED FINANCIAL DATA.



	2012 ⁽²⁾		2011			2010⁽³⁾			2009 ⁽⁴⁾			2008 ⁽⁵⁾
	(In thousands, except per unit and per capita amounts)

	(As restated)		(As restated)
Statement of Operations
Net revenues	$	1,068,454	$	1,028,472		$	977,592		$	916,075		$	996,232
Operating income ⁽¹⁾	233,675		227,946			151,669			183,890			134,521
Income (loss) before taxes⁽¹⁾	133,614		73,173			(30,382		)	48,754			5,369
Net income (loss) ⁽¹⁾	101,857		65,296			(33,052		)	34,184			6,380
Net income (loss) per unit - basic ⁽¹⁾	1.83		1.18			(0.60		)	0.62			0.12
Net income (loss) per unit - diluted ⁽¹⁾	1.82		1.17			(0.60		)	0.61			0.12
Balance Sheet Data
Total assets⁽¹⁾	$	2,019,865	$	2,047,168		$	2,065,877		$	2,130,932		$	2,173,229
Working capital (deficit)	2,904		(104,928		)	(98,518		)	(70,212		)	(50,705		)
Long-term debt	1,532,180		1,556,379			1,579,703			1,626,346			1,724,075
Partners' equity⁽¹⁾	154,451		136,350			121,628			113,839			94,008
Distributions
Declared per limited partner unit	$	1.60	$	1.00		$	0.25		$	1.23		$	1.92
Paid per limited partner unit	1.60		1.00			0.25			1.23			1.92
Other Data
Depreciation and amortization⁽¹⁾	$	126,306	$	125,837		$	128,856		$	134,398		$	125,240
Adjusted EBITDA⁽⁶⁾	390,954		374,576			359,231			316,512			355,890
Capital expenditures	96,232		90,190			71,706			69,136			83,481
Combined attendance ⁽⁷⁾	23,300		23,386			22,794			21,136			22,720
Combined in-park guest per capita spending ⁽⁸⁾	$	41.95	$	40.03		$	39.21		$	39.56		$	40.13

Notes:


(1)	Historical figures that appeared in our Original 2012 Form 10-K have been adjusted to reflect changes due to the restatement for the asset disposition as described in Note 1 to the Consolidated Financial Statements in Item 8.


(2)	Operating results for 2012 include a non-cash charge of $25.0 million for the impairment of long-lived assets at Wildwater Kingdom.


(3)	Operating results for 2010 include a loss on debt extinguishment of $35.3 million and a non-cash charge of $62.0 million for the impairment of long-lived assets at Great America, the majority of which were originally recorded with the PPI acquisition.


(4)	Operating results for 2009 include a gain of $23.1 million for the sale of excess land near Canada's Wonderland and a $4.5 million non-cash charge for the impairment of trade-names originally recorded with the PPI acquisition.


(5)	Operating results for 2008 include an $87.0 million non-cash charge for the impairment of goodwill and other indefinite-lived intangibles originally recorded with the PPI acquisition in 2006.

(6)

Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in our current credit agreement. Adjusted EBITDA is not a measurement of operating performance computed in accordance with GAAP and should not be considered as a substitute for operating income, net income or cash flows from operating activities computed in accordance with GAAP. We believe that 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 may not be comparable to similarly titled measures of other companies. A reconciliation of net income (loss) to Adjusted EBITDA is provided below.


(7)	Combined attendance includes attendance figures from the eleven amusement parks, all separately gated outdoor water parks, and Star Trek: The Experience, which closed in September 2008.

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(8)	Combined in-park guest per capita spending ("per capita spending") includes all amusement park, outdoor water park, causeway tolls and parking revenues for the amusement park and water park operating seasons. Revenues from indoor water park, hotel, campground, marina and other out-of-park operations are excluded from per capita statistics.

Reconciliation of Net Income (Loss) to Adjusted EBITDA:



	2012			2011			2010			2009			2008
	(In thousands )
	(As restated)			(As restated)
Net income (loss)	$	101,857		$	65,296		$	(33,052	)	$	34,184		$	6,380
Interest expense	110,619			157,185			150,285			124,706			129,561
Interest income	(68		)	(157		)	(1,154		)	(44		)	(970		)
Provision (benefit) for taxes	31,757			7,877			2,670			14,570			(1,011		)
Depreciation and amortization	126,306			125,837			128,856			134,398			125,240
EBITDA	370,471			356,038			247,605			307,814			259,200
Loss on early extinguishment of debt	—			—			35,289			—			—
Other expense, net	—			—			—			—			361
Net effect of swaps	(1,492		)	(13,119		)	18,194			9,170			—
Unrealized foreign currency (gain) loss	(9,181		)	9,830			(17,464		)	—			—
Equity-based compensation	3,265			(239		)	(89		)	(26		)	716
Loss on impairment of goodwill and other intangibles	—			—			2,293			4,500			86,988
Loss on impairment/retirement of fixed assets, net	30,336			11,355			62,752			244			8,425
Gain on sale of other assets	(6,625		)	—			—			(23,098		)	—
Terminated merger costs	—			230			10,375			5,619			—
Refinancing costs	—			955			—			832			200
Licensing dispute settlement costs	—			—			—			1,980			—
Class action settlement costs	—			—			276			9,477			—
Other non-recurring costs ⁽¹⁾	4,180			9,526			—			—			—
Adjusted EBITDA	$	390,954		$	374,576		$	359,231		$	316,512		$	355,890


(1)	Other non-recurring costs as defined in the 2010 Amended Credit Agreement, include litigation expenses and costs for SEC compliance matters related to Special Meeting requests, costs associated with the relocation of a future ride, and costs associated with the transition to a new advertising agency.


ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Management's discussion and analysis has been revised solely to reflect the effects of the restatement of the Consolidated Financial Statements in this Form 10-K/A. See Note 1 to the Consolidated Financial Statements included in Item 8 and the "Explanatory Note" included in the forepart of this Form 10-K/A.

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, food and other attractions 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 run by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including the allocation of resources, on a property-by-property basis.

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, and the park general managers.

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The following table presents certain financial data expressed as a percent of total net revenues and selective statistical information for the periods indicated.



For the years ended December 31,	2012					2011					2010
	( amounts in millions, except attendance, per capita spending and percentages)

Net revenues:	(As restated)					(As restated)
Admissions	$	612.1		57.3	%	$	596.0		57.9	%	$	568.8		58.2	%
Food, merchandise and games	342.2			32.0	%	349.5			34.0	%	337.3			34.5	%
Accommodations and other	114.1			10.7	%	83.0			8.1	%	71.5			7.3	%
Net revenues	1,068.4			100.0	%	1,028.5			100.0	%	977.6			100.0	%
Operating costs and expenses	684.7			64.1	%	663.3			64.5	%	632.0			64.6	%
Depreciation and amortization	126.3			11.8	%	125.8			12.2	%	128.9			13.2	%
Loss on impairment of goodwill and other intangibles	—			—	%	—			—	%	2.3			0.2	%
Loss on impairment / retirement of fixed assets	30.3			2.8	%	11.4			1.1	%	62.8			6.4	%
Gain on sale of other assets	(6.6		)	(0.6	)%	—			—	%	—			—	%
Operating income	233.7			21.9	%	228.0			22.2	%	151.6			15.5	%
Interest and other expense, net	110.6			10.3	%	158.0			15.4	%	149.2			15.3	%
Net effect of swaps	(1.5		)	(0.1	)%	(13.1		)	(1.3	)%	18.2			1.9	%
Loss on early debt extinguishment	—			—	%	—			—	%	35.3			3.6	%
Unrealized / realized foreign currency (gain) loss	(9.0		)	(0.8	)%	9.9			1.0	%	(20.6		)	(2.1	)%
Provision for taxes	31.7			3.0	%	7.9			0.8	%	2.6			0.3	%
Net income (loss)	$	101.9		9.5	%	$	65.3		6.3	%	$	(33.1	)	(3.4	)%
Other data:
Combined attendance (in thousands)	23,300					23,386					22,794
Combined in-park guest per capita spending	$	41.95				$	40.03				$	39.21

Critical Accounting Policies

Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our 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 Consolidated Financial Statements and related notes. The following discussion addresses our critical accounting policies, which are those that are most important to the portrayal of our financial condition and operating results or involve a higher degree of judgment and complexity (see Note 3 to our Consolidated Financial Statements for a complete discussion of our significant accounting policies). Application of the critical accounting policies described below involves the exercise of judgment and the use of assumptions as to future uncertainties, and, as a result, actual results could differ from these estimates and assumptions.

Property and Equipment

Property and equipment are recorded at cost. Expenditures made to maintain such assets in their original operating condition are expensed as incurred, and improvements and upgrades are capitalized. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. The composite method is used for the group of assets acquired as a whole in 1983, as well as for the groups of like assets of each subsequent business acquisition. The unit method is used for all individual assets purchased.

Upon the normal retirement of an asset within a composite group, our practice generally had been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of our financial statements in 2012, management determined that this methodology was not appropriate. As a result, we revised the useful lives of our composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation) in the Original 2012 Form 10-K filed on February 25, 2013. We evaluated the amount and nature of these adjustments and concluded that they were not material to either our prior annual or quarterly financial statements. Nonetheless, the historical financial statement amounts included in that filing had been updated for this corrected estimate.

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In certain situations under the composite method, disposals are considered unusual and, accordingly, losses are not included in the composite depreciation pool but are rather charged immediately to expense. In 2013, the Partnership's initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was reviewed in connection with responding to an open SEC comment letter. We ultimately concluded that this particular disposition was unusual and that an $8.8 million charge should be reflected in the 2011 financial statements. The financial statements are being restated herein for this matter.

In its Original 2012 Form 10-K, the Partnership announced plans to move off the composite depreciation method of accounting beginning in 2013. In the process of changing accounting methods and responding to an open SEC comment letter, the Partnership determined that its accounting treatment under the composite depreciation method for the retirement of a ride at one of its parks in 2011 was in error. In particular, the discrete charge related to that retirement (totaling $8.8 million on a pre-tax basis) should have been recorded to the income statement in 2011 rather than being deferred and recorded in the composite pool as was disclosed in the 2011 Form 10-K as originally filed. The Partnership originally determined that the asset retirement was normal, and thereby the composite method of depreciation resulted in $8.8 million (net book value after salvage) being recorded in Accumulated Depreciation in the Partnership's 2011 Annual Report on Form 10-K. The amount remaining in Accumulated Depreciation in the Partnership's Original 2012 Form 10-K was $7.8 million. The correction of this error results in adjustments to the financial statements that decrease pre-tax earnings and increase accumulated depreciation in 2011 by $8.8 million and increase pre-tax earnings and decrease accumulated depreciation in 2012 by $1.0 million. The adjustments have no impact on results of operations or balance sheet for 2010. See Note 1 to the Consolidated Financial Statements for additional information.

The Partnership believes that pursuant to generally accepted accounting principles, changing from the composite method of depreciation to the unit method of depreciation is a change in accounting estimate that is effected by a change in accounting principle, which should be accounted for prospectively. This prospective application will result in the discontinuance of the composite method of depreciation for all prior acquisitions with the existing net book value of each composite pool allocated to the remaining individual assets (units) in that pool with each unit assigned an appropriate remaining useful life on an individual unit basis. Once under the unit method of depreciation, all gains or losses on prospective asset retirements will result in an adjustment to earnings rather than to accumulated depreciation which is the case for normal retirements under the composite method of depreciation. We do not believe such a change will have a material effect on our financial position or liquidity in future periods, but it is possible that future asset retirements could have a material impact on earnings in the periods such items occur.

Impairment of Long-Lived Assets

The carrying values of long-lived assets, including property and equipment, are reviewed whenever events or changes in circumstances indicate that the carrying values of the assets may not be recoverable. An impairment loss may be recognized when estimated undiscounted future cash flows expected to result from the use of the assets, including disposition, are less than the carrying value of the assets. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying amounts of the assets. Fair value is generally determined based on a discounted cash flow analysis. 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.

The determination of both undiscounted and discounted cash flows requires management to make significant estimates and consider an anticipated course of action as of the balance sheet date. Subsequent changes in estimated undiscounted and discounted cash flows arising from changes in anticipated actions could impact the determination of whether impairment exists, the amount of the impairment charge recorded and whether the effects could materially impact the consolidated financial statements.

At the end of the third quarter of 2012, the Partnership concluded based on 2012 operating results through the third quarter and updated forecasts, that a review of the carrying value of operating long-lived assets at Wildwater Kingdom was warranted. After performing its review, the Partnership determined that a portion of the park's fixed assets were impaired. Also, at the end of the third quarter of 2012, the Partnership concluded that market conditions had changed on the adjacent non-operating land of Wildwater Kingdom. After performing its review of the updated market value of the land, the Partnership determined the land was impaired. The Partnership recognized a total of $25.0 million of fixed-asset impairment for operating and non-operating assets during the third quarter of 2012.

There was no impairment of long-lived assets in 2011.

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. 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; the testing for recoverability of a significant asset group within a reporting unit; 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 our consolidated financial statements.

An impairment loss may be recognized if the carrying value of the reporting unit is higher than its fair value, which is estimated using both an income (discounted cash flow) and market approach. The amount of impairment is determined by comparing the implied fair value of reporting unit goodwill to the carrying value of the goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill is less than the recorded goodwill, an impairment charge is recorded for the difference. Goodwill and trade-names have been assigned at the reporting unit, or park level, for purposes of impairment testing.

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Until December 2010, goodwill related to parks acquired prior to 2006 was tested annually for impairment as of October 1, while goodwill and other indefinite-lived intangibles, including trade-name intangibles, related to the PPI acquisition in 2006 were tested annually for impairment as of April 1. Effective in December 2010, we changed the date of our annual goodwill impairment tests from April 1 and October 1 to December 31 to more closely align the impairment testing procedures with our long-range planning and forecasting process, which occurs in the fourth quarter each year. We believe the change is preferable since the long-term cash flow projections are a key component in performing our annual impairment tests of goodwill. In addition, we changed the date of our annual impairment test for other indefinite-lived intangibles from April 1 to December 31.

For both 2012 and 2011, we completed the review of goodwill and other indefinite-lived intangibles as of December 31, 2012 and December 31, 2011, respectively, and determined the goodwill was not impaired at either balance sheet date.

The change in accounting principle related to changing the annual goodwill impairment testing date did not delay, accelerate, avoid or cause an impairment charge. As it was impracticable to objectively determine operating and valuation estimates for periods prior to December 31, 2010, we have prospectively applied the change in the annual goodwill impairment testing date from December 31, 2010.

It is possible that our assumptions about future performance, as well as the economic outlook and related conclusions regarding the valuation of our reporting units (parks), could change adversely, which may result in additional impairment that would have a material effect on our financial position and results of operations in future periods. At December 31, 2012, all reporting units with goodwill had fair values in excess of their carrying values by greater than 10%.

Self-Insurance Reserves

Reserves are recorded for the estimated amounts of guest and employee claims and expenses incurred each period that are not covered by insurance. Reserves are established for both identified claims and incurred but not reported (IBNR) claims. Such amounts are accrued for when claim amounts become probable and estimable. Reserves for identified claims are based upon our own historical claims experience and third-party estimates of settlement costs. Reserves for IBNR claims, which are not material to our consolidated financial statements, are based upon our own claims data history, as well as industry averages. All reserves are periodically reviewed for changes in facts and circumstances and adjustments are made as necessary.

Derivative Financial Instruments

Derivative financial instruments are only used within our overall risk management program to manage certain interest rate and foreign currency risks from time to time. We do not use derivative financial instruments for trading purposes.

Derivative financial instruments used in hedging transactions are assessed both at inception and quarterly thereafter to ensure they are effective in offsetting changes in the cash flows of the related underlying exposures. 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 consolidated statement of operations. Additionally, the “Accumulated 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 consolidated statements of operations.

Revenue Recognition

Revenues on multi-day admission tickets are recognized over the estimated number of visits expected for each type of ticket, and are adjusted periodically during the season. All other revenues are recognized on a daily basis based on actual guest spending at our facilities, or over the park operating season in the case of certain marina revenues and certain sponsorship revenues. Revenues on admission tickets for the next operating season, including season passes, are deferred in the year received and recognized as revenue in the following operating season.

Admission revenues include amounts paid to gain admission into our parks, including parking fees. Revenues related to extra-charge attractions, including our premium benefit offerings, are included in Accommodations and other revenue.

Income Taxes

The Partnership's legal structure includes both partnerships and corporate subsidiaries. As a publicly traded partnership, the Partnership is subject to an entity-level tax (the "PTP tax"). Accordingly, the Partnership itself is not subject to corporate income taxes; rather, the Partnership's tax attributes (except those of the corporate subsidiaries) are included in the tax returns of its partners. The Partnership's corporate subsidiaries are subject to entity-level income taxes. The Partnership's "Provision for taxes" includes both the PTP tax and the income taxes from the corporate subsidiaries.

The Partnership's corporate subsidiaries account for income taxes under the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future book and tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are determined using enacted tax rate expected to apply in the year in which those temporary differences are expected to be recovered or settled.

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The Partnership records a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. Through December 31, 2011, the Partnership had recorded a $17.3 million valuation allowance related to the deferred tax asset for foreign tax credit carryforwards. The need for this allowance was based on several factors including the accumulated federal net operating loss carryforward, the ten-year carryforward period allowed for excess foreign tax credits, experience to date of foreign tax credit limitations, and management's long term estimates of domestic and foreign source income.

During 2012, we claimed and received refunds of $10.4 million for foreign taxes paid in previous years. The recovery of prior year taxes resulted in a redetermination of the foreign tax credit carryforwards and a $6.1 million reduction in the valuation allowance related to these carryforwards. Also during 2012, we continued to utilize the federal tax net operating loss carryforward and updated our long term estimates of domestic and foreign source income. Based on these updated estimates, we believe no additional adjustments to the valuation allowance was warranted. The total valuation allowance reduction results in a $6.0 million tax benefit in 2012. As of December 31, 2012, we had $31.2 million of deferred tax assets associated with the foreign tax credit carryforwards and an $11.3 million related valuation allowance.

There is inherent uncertainty in the estimates used to project the amount of foreign tax credit carryforwards that are more likely than not to be realized. It is possible that our future income projections, as well as the economic outlook and related conclusions regarding the valuation allowance could change, which may result in additional valuation allowance being recorded or may result in additional valuation allowance reductions, which may have a material negative or positive effect on our reported financial position and results of operations in future periods.

Results of Operations

2012 vs. 2011

The following table presents key operating and financial information for the years ended December 31, 2012 and 2011 (amounts in thousands, except per capita spending and percentages):



							Increase (Decrease)
	12/31/12			12/31/11			$			%

	(As restated)			(As restated)
Net revenues	$	1,068,454		$	1,028,472		$	39,982		3.9	%
Operating costs and expenses	684,762			663,334			21,428			3.2	%
Depreciation and amortization	126,306			125,837			469			0.4	%
Loss on impairment/retirement of fixed assets	30,336			11,355			18,981			N/M
Gain on sale of other assets	(6,625		)	—			(6,625		)	N/M
Operating income	$	233,675		$	227,946		$	5,729		2.5	%
Other Data:
Adjusted EBITDA ⁽¹⁾	$	390,954		$	374,576		$	16,378		4.4	%
Adjusted EBITDA margin	36.6		%	36.4		%	—			0.2	%
Attendance	23,300			23,386			(86		)	(0.4	)%
Per capita spending	$	41.95		$	40.03		$	1.92		4.8	%
Out-of-park revenues	$	116,767		$	117,556		$	(789	)	(0.7	)%
N/M - Not meaningful
(1) for additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net income, see Item 6, "Selected Financial Data," on pages 4-5.

Consolidated net revenues totaled $1,068.5 million in 2012, increasing $40.0 million, from $1,028.5 million in 2011. The 4% increase in revenues reflects a 5%, or $1.92, increase in average in-park guest per capita spending compared with a year ago and a less than 1%, or 0.1 million-visit, decrease in attendance. In-park guest per capita spending represents the amount spent per attendee to gain admission to a park, plus all amounts spent while inside the park gates. The increase in per capita spending was primarily due to new premium benefit offerings and the positive impact of new customer messaging and dynamic pricing. The slight decrease in attendance for 2012 compared to 2011 was largely due to less than favorable weather that the parks experienced during the fourth quarter of 2012. Despite the slight decrease in overall attendance, the parks experienced growth in the number of season passes sold, as well as season pass visits, which was a focus of management heading into the 2012 season. The growth in season-pass visits was the result of an increased marketing focus toward season passes at several of our parks, resulting in a record number of season passes sold in 2012.

The increase in 2012 revenues was somewhat offset by a decrease of less than 1%, or approximately $0.8 million, in out-of-park revenues, which represents the sale of hotel rooms, food, merchandise and other complementary activities located outside of the park gates. The decrease in out-

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of-park revenues was primarily driven by softness in our overall hotel properties performance in 2012. The increase in revenues for the fiscal year also reflects the negative impact of currency exchange rates and the weakening U.S. dollar on our Canadian operations (approximately $4.0 million) during 2012.

Operating costs and expenses increased $21.4 million, or 3%, to $684.7 million versus $663.3 million for 2011 and were in line with expectations. The increase in costs and expenses was the result of a $3.0 million increase in cost of goods sold, a $20.5 million increase in operating expenses, offset somewhat by a $2.1 decrease in selling, general and administrative costs. The 3% increase in cost of goods sold is consistent with anticipated cost increases associated with our efforts to improve the quality of food and other product offerings at the parks in 2012. Operating expenses increased due to several factors, including higher employment-related costs, higher operating supply costs, and higher self-insurance expenses. Employment-related costs increased approximately $11.0 million due to normal merit increases, increases in health-related benefit costs, additional staffing levels associated with new premium benefit offerings and other initiatives aimed at improving the overall guest experience, and non-recurring severance payments. Operating supplies and expenses increased approximately $4.6 million due primarily to initiatives to expand or enhance live entertainment at the parks, as well as incremental costs associated with our new e-commerce platform. During the year, public liability and workers compensation expense increased $3.3 million due to claim settlements and an increase in our reserves based on management's estimates of future claims. The decrease in selling, general and administrative costs was due to a decrease in employment-related costs ($1.5 million) and professional and administrative costs ($7.6 million), offset by an increase in operating supplies ($4.8 million) and advertising fees ($2.4 million). The decrease in employment costs was primarily due to a decrease in costs associated with a legal accrual made in 2011, offset somewhat by higher wages and benefits due to normal merit increases and additional staffing. Professional and administrative fees decreased primarily due to a reduction in litigation expenses and costs for SEC compliance matters related to Special Meeting requests in 2011. The operating supplies and advertising increases were due to incremental costs to support 2012 operating initiatives including general infrastructure improvements. The overall increase in costs and expenses also reflects the positive impact of exchange rates on our Canadian operations ($1.3 million) during 2012.

The loss on impairment/retirement of fixed assets, net, during 2012 totaled $30.3 million, reflects a non-cash charge of $25.0 million for the partial impairment of operating and non-operating assets at Wildwater Kingdom along with losses on other retirements in the normal course of business. During 2012, two non-core assets were sold at gains totaling $6.6 million. In 2011, a charge of $11.4 million for the retirement of fixed assets was recorded, which includes the retirement of a composite asset as described in more detail in Note 1 to the consolidated financial statements.

Depreciation and amortization expense for 2012 increased $0.5 million compared with 2011 due to the increase in capital spending in 2012 when compared with the prior year. After depreciation and amortization, as well as impairment charges and all other non-cash costs, operating income for 2012 increased $5.7 million to $233.7 million from $227.9 million in 2011.

Interest expense for the year decreased $46.6 million to $110.6 million from $157.2 million in 2011. The reduction in interest expense was primarily attributable to an approximate 300 basis point (bps) decline in our effective interest rate, the result of lower fixed rates on London InterBank Offered Rate (LIBOR) within our interest-rate swap contracts. The average fixed LIBOR rate in our swap agreements declined from 5.62% in 2011 to 2.48% in 2012. Additionally during 2012, $25.0 million of term debt principal payments were made, reducing our average debt outstanding.

During 2012, the net effect of our swaps was recorded as a benefit to earnings of $1.5 million compared to a benefit to earnings of $13.1 million in 2011. The difference reflects the regularly scheduled amortization of amounts in Accumulated Other Comprehensive Income ("AOCI") related to the swaps, which were offset by gains from marking the ineffective and de-designated swaps to market and foreign currency gains related to the U.S.-dollar denominated Canadian term loan in the current period. During 2012, we also recognized a $9.0 million net benefit to earnings for unrealized/realized foreign currency gains, which included a $9.2 million unrealized foreign currency gain on the U.S.-dollar denominated debt held at our Canadian property.

A provision for taxes of $31.7 million was recorded in 2012, consisting of a provision for the tax attributes of our corporate subsidiaries of $23.0 million and a provision for publicly traded partnership (PTP) taxes of $8.8 million. This compares with a provision for taxes of $7.9 million in 2011, consisting of a benefit for the tax attributes of our corporate subsidiaries of $0.4 million and a provision for PTP taxes of $8.3 million.

After interest expense and provision for taxes, net income for the period totaled $101.9 million, or $1.82 per diluted limited partner unit, compared with net income of $65.3 million, or $1.17 per unit, a year ago.

We believe Adjusted EBITDA is a meaningful measure of our operating results (for additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net income, see Note 6 in Item 6, “Selected Financial Data,” on pages 4-5). In 2012, Adjusted EBITDA increased $16.4 million, or 4%, to $391.0 million, with our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) increasing 20 bps to 36.6% from 36.4% in 2011. The increase in Adjusted EBITDA was due to the increase in revenues resulting from the successful introduction of our new premium benefit offerings and dynamic pricing initiatives, as well as the successful expansion of our season pass base.

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Results of Operations

2011 vs. 2010

The following table presents key operating and financial information for the years ended December 31, 2011 and 2010 (amounts in thousands, except per capita spending and percentages):



							Increase (Decrease)
	12/31/11			12/31/10			$			%
	(As restated)

Net revenues	$	1,028,472		$	977,592		$	50,880		5.2	%
Operating costs and expenses	663,334			632,022			31,312			5.0	%
Depreciation and amortization	125,837			128,856			(3,019		)	(2.3	)%
Loss on impairment of goodwill and other intangibles	—			2,293			(2,293		)	N/M
Loss on impairment/retirement of fixed assets	11,355			62,752			(51,397		)	N/M
Operating income	$	227,946		$	151,669		$	76,277		50.3	%
Other Data:
Adjusted EBITDA ⁽¹⁾	$	374,576		$	359,231		$	15,345		4.3	%
Adjusted EBITDA margin	36.4		%	36.7		%	—			(0.3	)%
Attendance	23,386			22,794			592			2.6	%
Per capita spending	$	40.03		$	39.21		$	0.82		2.1	%
Out-of-park revenues	$	117,556		$	108,761		$	8,795		8.1	%
N/M - Not meaningful
(1) for additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net income, see Item 6, "Selected Financial Data," on pages 4-5.

Consolidated net revenues totaled $1,028.5 million in 2011, increasing $50.9 million, from $977.6 million in 2010. The 5% increase in revenues reflects a 3%, or 0.6 million-visit, increase in attendance from a year ago and a 2%, or $0.82, increase in average in-park guest per capita spending for the year. In-park guest per capita spending represents the amount spent per attendee to gain admission to a park, plus all amounts spent while inside the park gates. The improved attendance for 2011 compared to 2010 was largely due to increases in season passes sold and season-pass visits. The growth in season-pass visits was the result of an increased marketing focus toward season passes at several of our parks, resulting in a significant increase in the number of season passes sold.

The increase in 2011 revenues also reflects an increase of 8%, or approximately $8.8 million, in out-of-park revenues, which represents the sale of hotel rooms, food, merchandise and other complementary activities located outside of the park gates. The increase in out-of-park revenues was primarily driven by an increase in occupancy and average-daily-room rates at most of our hotel properties. The increase in revenues for the fiscal year also reflects the impact of currency exchange rates and the weakening U.S. dollar on our Canadian operations (approximately $7.5 million) during 2011.

Operating costs and expenses increased $31.3 million, or 5%, to $663.3 million versus $632.0 million for 2010 and were in line with expectations. The increase in costs and expenses was the result of a $5.4 million increase in cost of goods sold, a $19.4 million increase in operating expenses, and a $6.4 increase in selling, general and administrative costs. The increase in operating expenses was primarily attributable to higher wages of $11.5 million, $4.8 million of higher maintenance costs and $2.6 million of higher operating supply costs. The cost of operating supplies trended up primarily as a result of higher attendance. The increase in wages was largely due to increased seasonal labor hours as a result of expanded operating hours at several parks, additional attractions and guest services, and the overall effect of increased attendance. The increase in selling, general and administrative costs reflects the impact of $9.7 million of non-recurring costs incurred in 2011, including litigation expenses and costs for SEC compliance matters related to Special Meeting requests, as well as costs associated with the relocation of a future ride and costs associated with the transition to a new advertising agency. Additionally, selling, general and administrative costs increased due to an increase in costs associated with our long-term executive compensation plans resulting in large part from the increase in the market price of our units during the period. The 2011-to-2010 comparison was impacted by approximately $10.4 million of expense recorded in 2010 for the terminated

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merger and a $2.5 million non-recurring payroll tax credit received in 2010. The overall increase in costs and expenses also reflects the negative impact of exchange rates on our Canadian operations ($2.9 million) during 2011.

During 2011, we recognized $11.4 million in non-cash charges for the retirement of assets, which includes the retirement of a composite asset as described in more detail in Note 1 to the consolidated financial statements. This compares to a non-cash charge of $62.0 million at Great America for the partial impairment of its fixed assets and a $0.8 million charge for asset retirements across all properties. Additionally, non-cash charges of $1.4 million and $0.9 million were recorded during the second and fourth quarters of 2010, respectively, for the partial impairment of trade-names originally recorded at the time of the PPI acquisition. Although the acquisition of the PPI parks continues to meet our collective operating and profitability goals, the performance of certain acquired parks fell below our original expectations in 2010, which when coupled with a higher cost of capital, resulted in the impairment charges recorded in 2010. It is important to note that each of the acquired PPI parks produces positive cash flow, and that trade-name write-downs and fixed asset impairment losses do not affect cash, Adjusted EBITDA or liquidity.

Depreciation and amortization expense for 2011 decreased $3.0 million resulting primarily from the impairment charge taken on the fixed assets of California's Great America at the end of 2010. After depreciation and amortization, as well as impairment charges and all other operating costs, operating income for 2011 increased $76.2 million to $227.9 million from $151.7 million in 2010.

Interest expense for the 2011 increased $6.9 million to $157.2 million from $150.3 million in 2010, primarily due to an increase in the amortization of loan fees of $4.3 million, which were incurred as a result of the July 2010 debt refinancing, as well as the February 2011 amendment to the credit agreement. Additionally, interest expense increased due to higher average interest-rates as a result of refinancing a portion of term debt with the bond indenture in July 2010. This increase in rates was slightly offset by a decline in rates on our derivative portfolio during the fourth quarter of 2011, as $1.0 billion of derivatives matured and were replaced by derivatives with lower effective interest rates. Also, as the result of the July 2010 refinancing, a $35.3 million loss on the early extinguishment of debt was recognized and recorded in the statement of operations for 2010.

During 2011, the net effect of our swaps increased $31.3 million to a non-cash benefit to earnings of $13.1 million, reflecting gains from marking the ineffective and de-designated swaps to market, offset somewhat by the regularly scheduled amortization of amounts in "Accumulated Other Comprehensive Income" ("AOCI") related to the swaps and foreign currency losses related to the U.S.-dollar denominated Canadian term loan in the current period. During the year, we also recognized a $9.9 million charge to earnings for unrealized/realized foreign currency losses, $8.8 million of which represents unrealized foreign currency losses on the U.S.-dollar denominated notes issued in July 2010 and held by our Canadian subsidiary.

A provision for taxes of $7.9 million was recorded in 2011, consisting of a benefit for the tax attributes of our corporate subsidiaries of $0.4 million and a provision for publicly traded partnership (PTP) taxes of $8.3 million. This compares with a provision for taxes of $2.7 million in 2010, consisting of a benefit of $5.2 million for corporate subsidiaries and a provision of $7.9 million for PTP taxes.

After interest expense and provision for taxes, net income for 2011 totaled $65.3 million, or $1.17 per diluted limited partner unit, compared with net loss of $33.1 million, or $0.60 per unit, in 2010.

In 2011, Adjusted EBITDA (for additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net income, see Note 6 in Item 6, “Selected Financial Data,” on pages 4-5) increased $15.4 million, or 4%, to $374.6 million, with our Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) decreasing 30 bps to 36.4% from 36.7% in 2010. The margin compression was primarily the result of a shift in the mix of operating profit in 2011 toward our lower margin parks.

Financial Condition

With respect to both liquidity and cash flow, we ended 2012 in sound condition. The working capital ratio (current assets divided by current liabilities) of 1.0 at December 31, 2012 was the result of our highly seasonal business. Receivables and inventories are at normally low seasonal levels and credit facilities are in place to fund current liabilities, capital expenditures, partnership distributions, and pre-opening expenses as required.

Operating Activities

Net cash from operating activities in 2012 increased $67.7 million to $285.9 million from $218.2 million in 2011. The increase in operating cash flows between years was primarily attributable to the increase in the operating results of our parks in 2012 over 2011 and deferred taxes, somewhat offset by a negative change in working capital.

Net cash from operating activities in 2011 increased $36.1 million to $218.2 million from $182.1 million in 2010. The increase in operating cash flows between years was primarily attributable to the increase in the operating results of our parks in 2011 and the positive change in working capital.

Investing Activities

Investing activities consist principally of capital investments we make in our parks and resort properties. During 2012, we sold two non-core assets and received net proceeds of $16.0 million. Total cash spent on capital expenditures was $96.2 million in 2012. Including the effect of the two asset sales, net cash used for investing activities in 2012 totaled $80.2 million, compared to $90.2 million in 2011 and $71.7 million in

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2010. The 2012 capital expenditures plan was larger than the prior year. The change between 2011 and 2010 was due to the timing of capital expenditures for rides being placed into service for the 2012 season.

Historically, we have been able to improve our revenues and profitability by continuing to make substantial capital investments in our park and resort facilities. This has enabled us to maintain or increase attendance levels, as well as to generate increases in guest per capita spending and revenues from guest accommodations. For the 2013 operating season, we will be investing approximately 9% of net revenues in marketable capital investments across our properties, with the highlight of the 2013 program being the addition of GateKeeper, a 164-foot-tall winged-steel coaster, at Cedar Point. In addition to GateKeeper, the tallest and fastest wooden coaster in Northern California, called Gold Stryker, will be making its debut at California's Great America.

In addition to these new thrill rides, we are also investing in other capital improvements across our parks, including the introduction of new dinosaur attractions at Carowinds, Valleyfair and Worlds of Fun. Additionally, we will be combining Worlds of Fun and Oceans of Fun into a single admission ticket, while significantly upgrading the water park attractions at Oceans of Fun. Finally, we will also be enhancing entertainment offerings and continuing our infrastructure upgrades across our properties.

Financing Activities

Net cash utilized for financing activities in 2012 totaled $163.0 million, compared with $100.7 million in 2011 and $112.7 in 2010. An increase in distribution payments in 2012 ($88.8 million vs. $55.3 million in 2011) and the settlement of a Canadian cross-currency derivative contract in the first quarter of 2012 ($50.5 million) were somewhat offset by an increase in cash from operating activities. Net cash utilized for financing activities in 2011, which reflected the February 2011 refinancing of our debt, decreased $12.0 million compared with 2010. An increase in distribution payments in 2011 ($55.3 million vs. $13.8 million in 2010) was somewhat offset by an increase in cash from operating activities.

Liquidity and Capital Resources

In July 2010, we issued $405 million of 9.125% senior unsecured notes (the "notes") in a private placement, including $5.6 million of original issue discount to yield 9.375%. The notes mature in 2018. Concurrently with this offering, we entered into a new $1,435 million credit agreement (the "2010 Credit Agreement"), which includes a $1,175 million senior secured term loan facility and a $260 million senior secured revolving credit facility. The net proceeds from the offering of the notes, along with borrowings under the 2010 Credit Agreement, were used to repay in full all amounts outstanding under our previous credit facilities. On February 25, 2011, we amended the 2010 Credit Agreement (as so amended, the "Amended 2010 Credit Agreement") and extended the maturity date of the U.S. term loan portion of the credit facilities by one year. Certain terms of the amendment are described below.

Terms of the 2010 Credit Agreement include a $260 million revolving credit facility. Under the agreement, the Canadian portion of the revolving credit facility has a limit of $15 million. U.S. denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 400 bps (with no LIBOR floor). Canadian denominated loans made under the Canadian portion of the facility also bear interest at a rate of LIBOR plus 400 bps (with no LIBOR floor). The revolving credit facility, which matures in July 2015, also provides for the issuance of documentary and standby letters of credit.

The extended U.S. term loan, as amended on February 25, 2011, amortizes at $11.8 million per year and matures in December 2017. In May 2012, the Partnership prepaid $16 million of long-term debt to meet its obligation under the Excess Cash Flow ("ECF") provision of the Credit Agreement. As a result of this prepayment, as well as additional optional long-term debt prepayments made in August 2011 and September 2012 of $18 million and $9 million, respectively, the Partnership has no scheduled term-debt principal payments until the first quarter of 2015. The extended U.S. term loan bears interest at a rate of LIBOR plus 300 bps, with a LIBOR floor of 100 bps. Until our amendment to the 2010 Credit Agreement, the U.S. term loan bore interest at a rate of LIBOR plus 400 bps, with a LIBOR floor of 150 bps.

At December 31, 2012, we had $1,131.1 million of variable-rate term debt, $401.1 million of the fixed-rate notes, and no borrowings outstanding under our revolving credit facility. After letters of credit, which totaled $16.4 million at December 31, 2012, we had $243.6 million of available borrowings under our revolving credit facility. Of our total term debt outstanding at the end of the year, none is scheduled to mature within the next twelve months.

Our $405 million face value of notes require semi-annual interest payments in February and August, with the principal due in full on August 1, 2018. The notes may be redeemed, in whole or in part, at any time prior to August 1, 2014 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 August 1, 2013, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at 109.125%.

In 2006, we entered into several fixed-rate interest rate swap agreements totaling $1.0 billion. The weighted average fixed-LIBOR rate on those interest rate swaps, which matured in October 2011, was 5.6%. Based upon our scheduled quarterly regression analysis testing for the effectiveness of the accounting treatment of these swaps, as well as changes in the forward interest rate yield curves used in that testing, the swaps were deemed to be ineffective beginning in October 2009 and continued through their maturity. This resulted in the swaps not qualifying for hedge accounting during the fourth quarter of 2009 through October of 2011.

In 2007, we entered into two cross-currency swap agreements, which matured in February 2012 and effectively converted $268.7 million of term debt at the time, and the associated interest payments, from U.S. dollar denominated debt at a rate of LIBOR plus 200 bps to 6.3% fixed-

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rate Canadian dollar denominated debt. As a result of paying down the underlying Canadian term debt with net proceeds from the sale of surplus land near Canada’s Wonderland in August 2009, the notional amounts of the underlying debt and the cross-currency swaps no longer matched. Because of the mismatch of the notional amounts, we determined the swaps would no longer be highly effective going forward, resulting in the de-designation of the swaps as of the end of August 2009. Based on the change in currency exchange rates from the time we originally entered into the cross-currency swap agreements in 2007, the termination liability of the swaps has increased steadily over time. In order to minimize further downside risk to the swaps' termination value, in May 2011 we entered into several foreign currency swap agreements to fix the exchange rate on 50% of the liability. In July 2011, we fixed the exchange rate on another 25% of the swap liability, leaving only 25% exposed to further fluctuations in currency exchange rates. Based on currency exchange rates in place at the termination date and the exchange rates contracted in the foreign currency swap agreements, the cash termination costs of the cross-currency swaps totaled $50.5 million on February 17, 2012.

In addition to the above mentioned covenants and provisions, the Amended 2010 Credit Agreement contains an initial three-year requirement that at least 50% of our aggregate term debt and senior notes be subject to either a fixed interest rate or interest rate protection. As of December 31, 2012, we were in compliance with this requirement as discussed below.

In order to maintain fixed interest costs on a portion of our domestic term debt beyond the expiration of the swaps that matured in October 2011, in September 2010 we entered into several forward-starting swap agreements that effectively convert a total of $600 million of LIBOR based variable-rate debt to fixed rates beginning in October 2011. The weighted average fixed rate on these LIBOR based interest rate swaps, which mature in December 2015, is 2.57%.

In order to monetize the difference in the LIBOR floors, in March 2011 we entered into several additional forward-starting basis-rate swap agreements ("March 2011 swaps") that, when combined with the September 2010 swaps, effectively convert $600 million of variable-rate debt to fixed rates beginning in October 2011. The September 2010 swaps and the March 2011 swaps, which have been jointly designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.46%.

On May 2, 2011, we entered into four additional forward-starting interest-rate swap agreements ("May 2011 forward-starting swaps") that effectively convert another $200 million of variable-rate debt to fixed rates beginning in October 2011. These swaps, which have been designated as cash flow hedges, mature in December 2015 and fix LIBOR at a weighted average rate of 2.54%. The fair market value of all $800 million of forward-starting swap agreements at December 31, 2012 was a liability of $32.3 million, which was recorded in "Derivative Liability" on the consolidated balance sheet.

The following table presents our September 2010 swaps, March 2011 swaps, and May 2011 forward-starting swaps, which became effective October 1, 2011 and mature December 15, 2015, along with their notional amounts and their effective fixed interest rates.



($'s in thousands)	Forward-Starting Interest Rate Swaps
	Notional Amounts		LIBOR Rate
	$	200,000	2.40	%
	75,000		2.43	%
	50,000		2.42	%
	150,000		2.55	%
	50,000		2.42	%
	50,000		2.55	%
	25,000		2.43	%
	50,000		2.54	%
	30,000		2.54	%
	70,000		2.54	%
	50,000		2.54	%
Total $'s / Average Rate	$	800,000	2.48	%

The Amended 2010 Credit Agreement requires us to maintain specified financial ratios, which if breached for any reason, including a decline in operating results due to economic or weather conditions, could result in an event of default under the agreement. The most critical of these ratios is the Consolidated Leverage Ratio. At the end of 2012, this ratio was set at 6.00x Consolidated Total Debt (excluding the revolving debt)-to-Consolidated EBITDA. As of December 31, 2012, our Consolidated Total Debt (excluding revolving debt)-to-Consolidated EBITDA ratio was 3.94x, providing $133.6 million of Consolidated EBITDA cushion on the Consolidated Leverage Ratio. We were also in compliance with all other covenants under the Amended 2010 Credit Agreement as of December 31, 2012.

The Amended 2010 Credit Agreement, also includes provisions that allow us to make restricted payments up to $20 million annually, at the discretion of the Board of Directors, so long as no default or event of default has occurred and is continuing. These restricted payments are not subject to any specific covenants. Additional restricted payments are allowed to be made based on an excess-cash-flow formula, should our

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pro-forma consolidated leverage ratio be less than or equal to 4.50x Consolidated Total Debt (excluding the revolving debt)-to-Consolidated EBITDA (as defined), measured on a quarterly basis. Per the terms of the indenture governing our notes, our ability to make restricted payments is permitted should our trailing-twelve-month Total-Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 4.75x Consolidated Total Indebtedness (including average revolving debt)-to-Consolidated EBITDA, measured on a quarterly basis. In accordance with these provisions, on November 6, 2012, we announced the declaration of a distribution of $0.40 per limited partner unit, which was paid on December 17, 2012, bringing the total distributions paid in fiscal 2012 distribution to $1.60 per unit.

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.

Contractual Obligations

The following table summarizes certain obligations (on an undiscounted basis) at December 31, 2012 (in millions):



	Payments Due by Period
									2018 -
	Total		2013		2014-2015		2016-2017		Thereafter

Long-term debt⁽¹⁾	$	2,067.3	$	103.5	$	216.7	$	1,267.1	$	480.0
Capital expenditures ⁽²⁾	83.8		78.7		5.1		—		—
Lease & other obligations ⁽³⁾	160.1		16.8		14.2		11.1		118.0
Total	$	2,311.2	$	199.0	$	236.0	$	1,278.2	$	598.0


(1)	Represents maturities and mandatory prepayments on long-term debt obligations, plus contractual interest payments on all debt. See Note 6 in “Notes to Consolidated Financial Statements” for further information.


(2)	Represents contractual obligations in place at year-end for the purchase of new rides and attractions. Obligations not denominated in U.S. dollars have been converted based on the currency exchange rates as of December 31, 2012.


(3)	Represents contractual lease and purchase obligations in place at year-end.

Off-Balance Sheet Arrangements

We had $16.4 million of letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of December 31, 2012. We have no other significant off-balance sheet financing arrangements.

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 consolidated statement 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 consolidated statement of operations.

After considering the impact of interest rate swap agreements, at December 31, 2012, approximately $1.2 billion of our outstanding long-term debt represents fixed-rate debt and approximately $331.1 million represents variable-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $61 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt would lead to an increase of approximately $2.6 million in annual cash interest costs due to the impact of our fixed-rate swap agreements.

A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $5.3 million decrease in annual operating income.

Impact of Inflation

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Substantial increases in costs and expenses could impact our operating results to the extent such increases could not be passed along to our guests. In particular, increases in labor, supplies, taxes, and utility expenses could have an impact on our operating results. The majority of our employees are seasonal and are paid hourly rates which are consistent with federal and state minimum wage laws. Historically, we have been able to pass along cost increases to guests through increases in admission, food, merchandise and other prices, and we believe that we will continue to have the ability to do so over the long term. We believe that the effects of inflation, if any, on our operating results and financial condition have been and will continue to be minor.

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 and Exchange Act of 1933 and Section 21E of the Securities and 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 Original 2012 Form 10-K could adversely affect our future financial performance and cause actual results, or our beliefs or strategies, to differ materially from our expectations. We do not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the filing date of this document.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The information appearing under the subheading “Quantitative and Qualitative Disclosures About Market Risk” under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operations” on page 15 of this Report is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Quarterly operating results for 2012 and 2011 are presented in the table below (in thousands, except per unit amounts):



									Net income			Net income
									(loss) per			(loss) per
			Operating income			Net income			limited partner			limited partner
(Unaudited)	Net revenues		(loss)			(loss)			unit-basic			unit-diluted
2012 (As restated)
1st Quarter ⁽¹⁾	$	28,198	$	(69,329	)	$	(65,415	)	$	(1.18	)	$	(1.18	)
2nd Quarter ⁽²⁾	357,606		87,326			36,583			0.65			0.65
3rd Quarter ^{(2) (3)}	553,445		204,565			141,013			2.54			2.52
4th Quarter⁽²⁾	129,205		11,113			(10,324		)	(0.19		)	(0.19		)
	$	1,068,454	$	233,675		$	101,857		$	1.83		$	1.82
2011 (As restated)
1st Quarter ⁽¹⁾	$	26,869	$	(67,506	)	$	(84,926	)	$	(1.53	)	$	(1.53	)
2nd Quarter	284,490		51,783			4,282			0.08			0.08
3rd Quarter	572,268		245,752			152,218			2.75			2.73
4th Quarter ⁽²⁾	144,845		(2,083		)	(6,278		)	(0.11		)	(0.11		)
	$	1,028,472	$	227,946		$	65,296		$	1.18		$	1.17

(1) As a result of the immaterial correction discussed in Note 1 to the consolidated financial statements, these amounts have been adjusted. The impact of this correction was to reduce net income by $233 and $234 for the quarterly periods ended March 25, 2012 and March 27, 2011, respectively.

(2) As a result of the correction related to the 2011 ride retirement as discussed in Note 1 to the consolidated financial statements, these amounts have been adjusted. The impact of this correction was to increase net income by $261, $325, and $55 for the quarterly periods ended July 1, 2012, September 30, 2012, and December 31, 2012, respectively and to decrease net income by $5,450 for the quarterly period ended December 31, 2011.

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(3) The third quarter of 2012 included a non-cash charge of $25 million for the impairment of long-lived assets at Wildwater Kingdom.

Note:

To assure that our highly seasonal operations will not result in misleading comparisons of interim periods, the Partnership has adopted the following reporting procedures: (a) seasonal operating costs are expensed over the operating season, including some costs incurred prior to the season, which are deferred and amortized over the season, and (b) all other costs are expensed as incurred or ratably over the entire year.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Unitholders of Cedar Fair, L.P.

Sandusky, Ohio

We have audited the accompanying consolidated balance sheets of Cedar Fair, L.P. and subsidiaries (the "Partnership") as of December 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive income, partners' equity, and cash flows for each of the three years in the period ended December 31, 2012. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Cedar Fair, L.P. and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, the accompanying 2012 and 2011 consolidated financial statements have been restated.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Partnership's internal control over financial reporting as of December 31, 2012, based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2013 (May 10, 2013 as to the effects of the material weakness described in Management's Report on Internal Control over Financial Reporting (as revised)), which report expressed an adverse opinion on the Partnership's internal control over financial reporting because of a material weakness.

/s/ Deloitte & Touche LLP

Cleveland, Ohio

February 25, 2013 (May 10, 2013 as to the effects of the restatement discussed in Note 1)

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CEDAR FAIR, L.P.

CONSOLIDATED BALANCE SHEETS

(In thousands)



	12/31/2012			12/31/2011
ASSETS	(As restated)			(As restated)
Current Assets:
Cash and cash equivalents	$	78,830		$	35,524
Receivables	18,192			7,611
Inventories	27,840			33,069
Current deferred tax asset	8,184			10,345
Other current assets	8,060			11,966
	141,106			98,515
Property and Equipment:
Land	303,348			312,859
Land improvements	339,081			333,423
Buildings	584,854			579,136
Rides and equipment	1,450,231			1,423,370
Construction in progress	28,971			33,892
	2,706,485			2,682,680
Less accumulated depreciation	(1,162,213		)	(1,071,978		)
	1,544,272			1,610,702
Goodwill	246,221			243,490
Other Intangibles, net	40,652			40,273
Other Assets	47,614			54,188
	$	2,019,865		$	2,047,168
LIABILITIES AND PARTNERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt	$	—		$	15,921
Accounts payable	10,734			12,856
Deferred revenue	39,485			29,594
Accrued interest	15,512			15,762
Accrued taxes	17,813			16,008
Accrued salaries, wages and benefits	24,836			33,388
Self-insurance reserves	23,906			21,243
Current derivative liability	—			50,772
Other accrued liabilities	5,916			7,899
	138,202			203,443
Deferred Tax Liability	153,792			130,427
Derivative Liability	32,260			32,400
Other Liabilities	8,980			4,090
Long-Term Debt:
Term debt	1,131,100			1,140,179
Notes	401,080			400,279
	1,532,180			1,540,458
Commitments and Contingencies (Note 11)
Partners’ Equity:
Special L.P. interests	5,290			5,290
General partner	1			—
Limited partners, 55,618, and 55,346 outstanding at December 31, 2012 and December 31, 2011, respectively	177,660			160,068
Accumulated other comprehensive loss	(28,500		)	(29,008		)
	154,451			136,350
	$	2,019,865		$	2,047,168

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

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CEDAR FAIR, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except per unit amounts)



For the years ended December 31,	2012			2011			2010
Net revenues:	(As restated)			(As restated)
Admissions	$	612,069		$	596,042		$	568,762
Food, merchandise and games	342,214			349,436			337,356
Accommodations and other	114,171			82,994			71,474
	1,068,454			1,028,472			977,592
Costs and expenses:
Cost of food, merchandise and games revenues	95,048			92,057			86,619
Operating expenses	451,403			430,851			411,402
Selling, general and administrative	138,311			140,426			134,001
Depreciation and amortization	126,306			125,837			128,856
Loss on impairment of goodwill and other intangibles	—			—			2,293
Loss on impairment / retirement of fixed assets, net	30,336			11,355			62,752
Gain on sale of other assets	(6,625		)	—			—
	834,779			800,526			825,923
Operating income	233,675			227,946			151,669
Interest expense	110,619			157,185			150,285
Net effect of swaps	(1,492		)	(13,119		)	18,194
Loss on early debt extinguishment	—			—			35,289
Unrealized/realized foreign currency (gain) loss	(8,998		)	9,909			(20,563		)
Other (income) expense	(68		)	798			(1,154		)
Income (loss) before taxes	133,614			73,173			(30,382		)
Provision for taxes	31,757			7,877			2,670
Net income (loss)	101,857			65,296			(33,052		)
Net income allocated to general partner	1			1			—
Net income (loss) allocated to limited partners	$	101,856		$	65,295		$	(33,052	)

Net income (loss)	101,857			65,296			(33,052		)
Other comprehensive income (loss), (net of tax):
Cumulative foreign currency translation adjustment	369			933			(6,475		)
Unrealized income on cash flow hedging derivatives	139			3,767			60,048
Other comprehensive income, (net of tax)	508			4,700			53,573
Total comprehensive income	$	102,365		$	69,996		$	20,521
Basic earnings (loss) per limited partner unit:
Weighted average limited partner units outstanding	55,518			55,345			55,316
Net income (loss) per limited partner unit	$	1.83		$	1.18		$	(0.60	)
Diluted earnings per limited partner unit:
Weighted average limited partner units outstanding	55,895			55,886			55,316
Net income (loss) per limited partner unit	$	1.82		$	1.17		$	(0.60	)

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

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CEDAR FAIR, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



For the years ended December 31,	2012			2011			2010

CASH FLOWS FROM OPERATING ACTIVITIES	(As restated)			(As restated)
Net income (loss)	$	101,857		$	65,296		$	(33,052	)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization	126,306			125,837			128,856
Non-cash equity based compensation expense	4,476			(239		)	(89		)
Loss on early debt extinguishment	—			—			35,289
Loss on impairment of goodwill and other intangibles	—			—			2,293
Loss on impairment / retirement of fixed assets, net	30,336			11,355			62,752
Gain on sale of other assets	(6,625		)	—			—
Net effect of swaps	(1,492		)	(13,119		)	18,194
Amortization of debt issuance costs	10,417			10,000			5,671
Unrealized foreign currency (gain) loss on notes	(8,758		)	8,753			(17,464		)
Other non-cash income	—			—			(1,893		)
Deferred income taxes	27,502			677			(14,664		)
Excess tax benefit from unit-based compensation expense	(1,208		)	—			—
Change in operating assets and liabilities:
(Increase) decrease in current assets	(1,420		)	1,686			(11,855		)
(Increase) decrease in other assets	(2,739		)	173			6
Increase (decrease) in accounts payable	170			(1,144		)	652
Increase (decrease) in accrued taxes	1,883			835			(2,242		)
Increase (decrease) in self-insurance reserves	2,676			(206		)	(383		)
(Decrease) increase in deferred revenue and other current liabilities	(1,345		)	14,170			7,653
Increase (decrease) in other liabilities	3,897			(5,897		)	2,391
Net cash from operating activities	285,933			218,177			182,115
CASH FLOWS FOR INVESTING ACTIVITIES
Sale of other assets	16,058			—			—
Capital expenditures	(96,232		)	(90,190		)	(71,706		)
Net cash for investing activities	(80,174		)	(90,190		)	(71,706		)
CASH FLOWS FOR FINANCING ACTIVITIES
Net (payments) borrowings on revolving credit loans - previous credit agreement	—			—			(86,300		)
Net (payments) borrowings on revolving credit loans - existing credit agreement	—			(23,200		)	23,200
Term debt borrowings	—			22,938			1,175,000
Note borrowings	—			—			399,383
Derivative settlement	(50,450		)	—			—
Term debt payments, including early termination penalties	(25,000		)	(23,900		)	(1,566,890		)
Distributions paid to partners	(88,813		)	(55,347		)	(13,834		)
Payment of debt issuance costs	—			(21,214		)	(43,264		)
Exercise of limited partnership unit options	76			5			7
Excess tax benefit from unit-based compensation expense	1,208			—			—
Net cash for financing activities	(162,979		)	(100,718		)	(112,698		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	526			(1,510		)	126
CASH AND CASH EQUIVALENTS
Net increase (decrease) for the year	43,306			25,759			(2,163		)
Balance, beginning of year	35,524			9,765			11,928
Balance, end of year	$	78,830		$	35,524		$	9,765
SUPPLEMENTAL INFORMATION
Cash payments for interest expense	$	101,883		$	153,326		$	129,815
Interest capitalized	1,322			1,835			1,343
Cash payments for income taxes, net of refunds	1,783			6,135			19,074

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

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CEDAR FAIR, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY

(In thousands, except per unit amounts)



For the years ended December 31,	2012			2011			2010

Limited Partnership Units Outstanding	(As restated)			(As restated)
Beginning balance	55,346			55,334			55,234
Limited partnership unit options exercised	16			—			42
Issuance of limited partnership units as compensation	256			12			58
	55,618			55,346			55,334
Limited Partners’ Equity
Beginning balance	$	160,068		$	150,047		$	195,831
Net income (loss)	101,856			65,295			(33,052		)
Partnership distribution declared (2012 - $1.60; 2011 - $1.00; 2010 - $0.25)	(88,813		)	(55,347		)	(13,834		)
Income recognized for limited partnership unit options	345			(239		)	(89		)
Limited partnership unit options exercised	76			5			7
Tax effect of units involved in option exercises and treasury unit transactions	1,208			127			545
Issuance of limited partnership units as compensation	2,920			180			639
	177,660			160,068			150,047
General Partner’s Equity
Beginning balance	—			(1		)	(1		)
Partnership distribution declared	—			—			—
Net income	1			1			—
	1			—			(1		)
Special L.P. Interests	5,290			5,290			5,290
Accumulated Other Comprehensive Income (Loss)
Cumulative foreign currency translation adjustment:
Beginning balance	(3,120		)	(4,053		)	2,422
Current year activity, net of tax (($213) in 2012, $245 in 2011, ($2,952) in 2010)	369			933			(6,475		)
	(2,751		)	(3,120		)	(4,053		)
Unrealized loss on cash flow hedging derivatives:
Beginning balance	(25,888		)	(29,655		)	(89,703		)
Current year activity, net of tax (($210) in 2012, $5,508 in 2011, ($5,825) in 2010)	139			3,767			60,048
	(25,749		)	(25,888		)	(29,655		)
	(28,500		)	(29,008		)	(33,708		)
Total Partners’ Equity	$	154,451		$	136,350		$	121,628

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

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Notes To Consolidated Financial Statements

(1) Restatement of Consolidated Financial Statements:

We have made one correction to the 2010 financial statements, two separate corrections to the 2011 financial statements and one correction to the 2012 financial statements relating to our use of the composite depreciation method.

•

The first correction to the 2011 and 2010 financial statements - which was reflected in our Original 2012 Form 10-K - related to a misapplication of the composite depreciation method. Upon the normal retirement of an asset within a composite group, our practice generally had been to extend the depreciable life of that composite group beyond its original estimated useful life. In conjunction with the preparation of our financial statements in 2012, management determined that this methodology was not appropriate. As a result, we revised the useful lives of our composite groups to their original estimated useful life (ascribed upon acquisition) and corrected previously computed depreciation expense (and accumulated depreciation). These adjustments are shown in the tables below under the heading “immaterial correction.” We titled such amount immaterial because we had originally evaluated the amount and nature of these adjustments and concluded that they were not material to either our prior annual or quarterly financial statements.

•

The second correction, which impacts the 2011 and 2012 financial statements - reflects a determination subsequent to our Original 2012 Form 10-K filing that a disposition from our composite group of assets was considered to be unusual. In certain situations under the composite method, disposals are considered unusual and, accordingly, losses are not included in the composite depreciation pool but are rather charged immediately to expense. In 2013, the Partnership's initial determination of whether a specific asset retired under the composite method of depreciation in 2011 was normal was reviewed in connection with responding to an open SEC comment letter. We ultimately concluded that such disposition was unusual and that a $8.8 million charge should be reflected in the 2011 financial statements. The financial statements are being restated herein to make this correction (and the related adjustments are shown in the table below under the heading "Restatement.")

The tables below reflect the impact on the financial statements of all of the above described corrections. The "As originally filed" amounts in the 2011 and 2010 columns represent amounts as filed in the Partnership's Original 2011 Form 10-K filed on February 29, 2012. The "As originally filed" amounts in the 2012 columns represent amounts as filed in the Partnership's Original 2012 Form 10-K filed on February 25, 2013. The "As restated with immaterial correction" amounts in the 2011 and 2010 columns represent amounts as filed in the Partnership's Original 2012 Form 10-K filed on February 25, 2013.

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Balance Sheets
(In thousands)	12/31/2012			12/31/2011
Accumulated depreciation
As originally filed	$	(1,154,456	)	$	(1,044,589	)
Immaterial correction	—			(18,599		)
As restated with immaterial correction	(1,154,456		)	(1,063,188		)
Restatement	(7,757		)	(8,790		)
As restated	$	(1,162,213	)	$	(1,071,978	)
Total assets
As originally filed	$	2,027,622		$	2,074,557
Immaterial correction	—			(18,599		)
As restated with immaterial correction	2,027,622			2,055,958
Restatement	(7,757		)	(8,790		)
As restated	$	2,019,865		$	2,047,168
Deferred Tax Liability
As originally filed	$	156,740		$	135,446
Immaterial correction	—			(1,679		)
As restated with immaterial correction	156,740			133,767
Restatement	(2,948		)	(3,340		)
As restated	$	153,792		$	130,427
Limited Partners' Equity
As originally filed	$	182,469		$	182,438
Immaterial correction	—			(16,920		)
As restated with immaterial correction	182,469			165,518
Restatement	(4,809		)	(5,450		)
As restated	$	177,660		$	160,068

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Statements of Operations and Comprehensive Income
For the years ended December 31,	2012			2011		2010
(In thousands, except per unit amounts)

Depreciation and amortization
As originally filed	$	127,339		$	123,805	$	126,796
Immaterial correction	—			2,032		2,060
As restated with immaterial correction	127,339			125,837		128,856
Restatement	(1,033		)	—		—
As restated	$	126,306		$