Cedar Fair-10Q-3-2014
Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 28, 2014
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission file number 1-9444
CEDAR FAIR, L.P.
(Exact name of registrant as specified in its charter)
 
DELAWARE
 
34-1560655
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
One Cedar Point Drive, Sandusky, Ohio 44870-5259
(Address of principal executive offices) (Zip Code)
(419) 626-0830
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x    No  o 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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):
Large accelerated filer
 
x
  
Accelerated filer
 
o
 
 
 
 
Non-accelerated filer
 
o (Do not check if a smaller reporting company)
  
Smaller reporting company
 
o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x
 
 
 
Title of Class
 
Units Outstanding As Of November 1, 2014
Units Representing
Limited Partner Interests
 
55,862,834


Table of Contents

CEDAR FAIR, L.P.
INDEX
FORM 10 - Q
 
 
 
 
 
 
  
 
 
 
 
Item 1.
 
  
 
 
 
Item 2.
 
  
 
 
 
Item 3.
 
  
 
 
 
Item 4.
 
  
 
 
  
 
 
 
 
Item 1.
 
  
 
 
 
Item 1A.
 
 
 
 
 
 
 
Item 6.
 
  
 
 
  
 
 
  



Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
 
9/28/2014
 
12/31/2013
 
9/29/2013
ASSETS
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
Cash and cash equivalents
 
$
189,374

 
$
118,056

 
$
183,482

Receivables
 
41,262

 
21,333

 
42,534

Inventories
 
30,461

 
26,080

 
29,316

Current deferred tax asset
 
9,675

 
9,675

 
8,185

Other current assets
 
13,985

 
11,353

 
9,626

 
 
284,757

 
186,497

 
273,143

Property and Equipment:
 
 
 
 
 
 
Land
 
279,350

 
283,313

 
298,589

Land improvements
 
372,145

 
350,869

 
351,731

Buildings
 
607,065

 
584,659

 
584,066

Rides and equipment
 
1,562,070

 
1,494,112

 
1,506,895

Construction in progress
 
39,058

 
44,550

 
18,990

 
 
2,859,688

 
2,757,503

 
2,760,271

Less accumulated depreciation
 
(1,341,557
)
 
(1,251,740
)
 
(1,245,597
)
 
 
1,518,131

 
1,505,763

 
1,514,674

Goodwill
 
232,513

 
238,089

 
241,936

Other Intangibles, net
 
38,766

 
39,471

 
40,025

Other Assets
 
42,909

 
44,807

 
31,269

 
 
$
2,117,076

 
$
2,014,627

 
$
2,101,047

LIABILITIES AND PARTNERS’ EQUITY
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
Current maturities of long-term debt
 
$
4,600

 
$

 
$
6,300

Accounts payable
 
21,866

 
13,222

 
21,877

Deferred revenue
 
48,141

 
44,521

 
37,627

Accrued interest
 
12,008

 
23,201

 
10,253

Accrued taxes
 
38,407

 
19,481

 
39,393

Accrued salaries, wages and benefits
 
42,139

 
29,200

 
39,621

Self-insurance reserves
 
23,931

 
23,653

 
24,088

Other accrued liabilities
 
8,392

 
5,521

 
7,618

 
 
199,484

 
158,799

 
186,777

Deferred Tax Liability
 
157,389

 
158,113

 
157,603

Derivative Liability
 
25,802

 
26,662

 
31,646

Other Liabilities
 
16,595

 
11,290

 
9,073

Long-Term Debt:
 
 
 
 
 
 
Term debt
 
614,250

 
618,850

 
622,125

Notes
 
950,000

 
901,782

 
901,606

 
 
1,564,250

 
1,520,632

 
1,523,731

Commitments and Contingencies (Note 10)
 

 

 

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

 
5,290

 
5,290

General partner
 
3

 
2

 
2

Limited partners, 55,863, 55,716 and 55,714 units outstanding at September 28, 2014, December 31, 2013 and September 29, 2013, respectively
 
161,157

 
148,847

 
206,428

Accumulated other comprehensive loss
 
(12,894
)
 
(15,008
)
 
(19,503
)
 
 
153,556

 
139,131

 
192,217

 
 
$
2,117,076

 
$
2,014,627

 
$
2,101,047

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

3

Table of Contents

CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except per unit amounts)
 
 
Three months ended
 
Nine months ended
 
Twelve months ended
 
 
9/28/2014
 
9/29/2013
 
9/28/2014
 
9/29/2013
 
9/28/2014
 
9/29/2013
Net revenues:
 
 
 
 
 
 
 
 
 
 
 
 
Admissions
 
$
340,101

 
$
339,655

 
$
566,126

 
$
562,214

 
$
650,919

 
$
641,140

Food, merchandise and games
 
184,038

 
180,408

 
322,025

 
316,940

 
361,190

 
353,951

Accommodations and other
 
71,179

 
72,013

 
110,647

 
116,341

 
125,766

 
129,609


 
595,318

 
592,076

 
998,798

 
995,495

 
1,137,875

 
1,124,700

Costs and expenses:
 

 
 
 
 
 
 
 
 
 
 
Cost of food, merchandise, and games revenues
 
46,812

 
45,843

 
82,887

 
81,933

 
92,726

 
93,055

Operating expenses
 
178,649

 
170,394

 
406,191

 
388,335

 
490,200

 
458,906

Selling, general and administrative
 
57,205

 
58,727

 
125,226

 
125,533

 
152,105

 
148,356

Depreciation and amortization
 
58,244

 
57,495

 
109,525

 
108,313

 
123,699

 
122,408

Gain on sale of other assets
 

 
(8,743
)
 
(921
)
 
(8,743
)
 
(921
)
 
(15,368
)
Loss on impairment / retirement of fixed assets, net
 
1,475

 
1,637

 
2,687

 
2,266

 
2,960

 
8,372


 
342,385

 
325,353

 
725,595

 
697,637

 
860,769

 
815,729

Operating income
 
252,933

 
266,723

 
273,203

 
297,858

 
277,106

 
308,971

Interest expense
 
21,462

 
25,529

 
74,101

 
77,153

 
100,019

 
103,870

Net effect of swaps
 
(1,087
)
 
1,377

 
(1,031
)
 
8,315

 
(2,463
)
 
8,141

Loss (gain) on early debt extinguishment
 
(246
)
 

 
29,027

 
34,573

 
29,027

 
34,573

Unrealized/realized foreign currency (gain) loss
 
21,515

 
(8,615
)
 
22,597

 
15,229

 
36,309

 
20,157

Other income
 
(16
)
 
(17
)
 
(95
)
 
(126
)
 
(123
)
 
(163
)
Income before taxes
 
211,305

 
248,449

 
148,604

 
162,714

 
114,337

 
142,393

Provision for taxes
 
49,403

 
58,025

 
26,340

 
34,026

 
12,557

 
24,030

Net income
 
161,902

 
190,424

 
122,264

 
128,688

 
101,780

 
118,363

Net income allocated to general partner
 
2

 
2

 
1

 
1

 
1

 
1

Net income allocated to limited partners
 
$
161,900

 
$
190,422

 
$
122,263

 
$
128,687

 
$
101,779

 
$
118,362

 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
161,902

 
$
190,424

 
$
122,264

 
$
128,688

 
$
101,780

 
$
118,363

Other comprehensive income (loss), (net of tax):
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative foreign currency translation adjustment
 
2,975

 
(699
)
 
2,279

 
1,194

 
3,841

 
2,814

Unrealized income (loss) on cash flow hedging derivatives
 
2,726

 
(2,761
)
 
(165
)
 
7,803

 
2,768

 
9,740

Other comprehensive income (loss), (net of tax)
 
5,701

 
(3,460
)
 
2,114

 
8,997

 
6,609

 
12,554

Total comprehensive income
 
$
167,603

 
$
186,964

 
$
124,378

 
$
137,685

 
$
108,389

 
$
130,917

Basic earnings per limited partner unit:
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average limited partner units outstanding
 
55,439

 
55,485

 
55,448

 
55,472

 
55,458

 
55,460

Net income per limited partner unit
 
$
2.92

 
$
3.43

 
$
2.21

 
$
2.32

 
$
1.84

 
$
2.13

Diluted earnings per limited partner unit:
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average limited partner units outstanding
 
55,855

 
55,863

 
55,855

 
55,803

 
55,864

 
55,804

Net income per limited partner unit
 
$
2.90

 
$
3.41

 
$
2.19

 
$
2.31

 
$
1.82

 
$
2.12

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

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CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PARTNERS’ EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 28, 2014
(In thousands)

 
Nine months ended
 
9/28/14
Limited Partnership Units Outstanding
 
Beginning balance
55,716

Limited partnership unit options exercised
19

Issuance of limited partnership units as compensation
128

 
55,863

Limited Partners’ Equity
 
Beginning balance
$
148,847

Net income
122,263

Partnership distribution declared ($2.10 per limited partnership unit)
(117,468
)
Expense recognized for limited partnership unit options
668

Tax effect of units involved in option exercises and treasury unit transactions
(785
)
Issuance of limited partnership units as compensation
7,632

 
161,157

General Partner’s Equity
 
Beginning balance
2

Net income
1

 
3

Special L.P. Interests
5,290

Accumulated Other Comprehensive Income (Loss)
 
Cumulative foreign currency translation adjustment:
 
Beginning balance
5

Current period activity, net of tax ($1,310)
2,279

 
2,284

Unrealized loss on cash flow hedging derivatives:
 
Beginning balance
(15,013
)
Current period activity, net of tax $6
(165
)
 
(15,178
)
 
(12,894
)
Total Partners’ Equity
$
153,556







The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.


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Table of Contents

CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

 
 
Nine months ended
 
Twelve months ended
 
 
9/28/2014
 
9/29/2013
 
9/28/2014
 
9/29/2013
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES
 
 
 
 
 
 
 
 
Net income
 
$
122,264

 
128,688

 
$
101,780

 
118,363

Adjustments to reconcile net income to net cash from operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
109,525

 
108,313

 
123,699

 
122,408

Loss on early debt extinguishment
 
29,027

 
34,573

 
29,027

 
34,573

Loss on impairment / retirement of fixed assets, net
 
2,687

 
2,266

 
2,960

 
8,372

Gain on sale of other assets
 
(921
)
 
(8,743
)
 
(921
)
 
(15,368
)
Net effect of swaps
 
(1,031
)
 
8,315

 
(2,463
)
 
8,141

Non-cash expense
 
33,167

 
23,875

 
52,093

 
32,245

Net change in working capital
 
10,546

 
16,031

 
8,510

 
(6,769
)
Net change in other assets/liabilities
 
6,455

 
3,637

 
3,312

 
22,883

Net cash from operating activities
 
311,719

 
316,955

 
317,997

 
324,848

CASH FLOWS FROM (FOR) INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
Sale of other assets
 
1,377

 
15,297

 
1,377

 
30,182

Capital expenditures
 
(137,013
)
 
(97,534
)
 
(160,072
)
 
(116,761
)
Net cash for investing activities
 
(135,636
)
 
(82,237
)
 
(158,695
)
 
(86,579
)
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
Term debt borrowings
 

 
630,000

 

 
630,000

Note borrowings
 
450,000

 
500,000

 
450,000

 
500,000

Term debt payments, including amounts paid for early termination
 

 
(1,132,675
)
 
(9,575
)
 
(1,132,675
)
Note payments, including amounts paid for early termination
 
(426,148
)
 

 
(426,148
)
 

Distributions paid to partners
 
(117,468
)
 
(104,458
)
 
(156,467
)
 
(126,706
)
Exercise of limited partnership unit options
 

 
43

 
10

 
43

Payment of debt issuance costs
 
(9,795
)
 
(22,812
)
 
(10,232
)
 
(22,812
)
Excess tax benefit from unit-based compensation expense
 
(785
)
 
(148
)
 
218

 
1,515

Net cash for financing activities
 
(104,196
)
 
(130,050
)
 
(152,194
)
 
(150,635
)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
 
(569
)
 
(16
)
 
(1,216
)
 
(254
)
CASH AND CASH EQUIVALENTS
 
 
 
 
 
 
 
 
Net increase for the period
 
71,318

 
104,652

 
5,892

 
87,380

Balance, beginning of period
 
118,056

 
78,830

 
183,482

 
96,102

Balance, end of period
 
$
189,374

 
$
183,482

 
$
189,374

 
$
183,482

SUPPLEMENTAL INFORMATION
 
 
 
 
 
 
 
 
Cash payments for interest expense
 
$
80,203

 
$
78,852

 
$
92,185

 
$
94,717

Interest capitalized
 
1,167

 
1,175

 
2,008

 
1,406

Cash payments for income taxes, net of refunds
 
10,283

 
11,746

 
13,359

 
4,768

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

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CEDAR FAIR, L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 28, 2014 AND SEPTEMBER 29, 2013
The accompanying unaudited condensed consolidated financial statements have been prepared from the financial records of Cedar Fair, L.P. (the Partnership) without audit and reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to fairly present the results of the interim periods covered in this report.
Due to the highly seasonal nature of the Partnership’s amusement and water park operations, the results for any interim period are not indicative of the results to be expected for the full fiscal year. Accordingly, the Partnership has elected to present financial information regarding operations and cash flows for the preceding fiscal twelve-month periods ended September 28, 2014 and September 29, 2013 to accompany the quarterly results. Since amounts for the fiscal twelve months ended September 28, 2014 include actual 2013 season operating results, they may not be indicative of 2014 full calendar year operations.

(1) Significant Accounting and Reporting Policies:
The Partnership’s unaudited condensed consolidated financial statements for the periods ended September 28, 2014 and September 29, 2013 included in this Form 10-Q report have been prepared in accordance with the accounting policies described in the Notes to Consolidated Financial Statements for the year ended December 31, 2013, which were included in the Form 10-K filed on February 26, 2014. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the Commission). These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Form 10-K referred to above.
New Accounting Pronouncements

In February 2013, the FASB issued ASU 2013-04, “Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date,” which requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, as the sum of the following:

The amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors.
Any additional amount the reporting entity expects to pay on behalf of its co-obligors.

The guidance also requires an entity to disclose the nature and amount of the obligation as other information about those obligations. The amendments in the guidance are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, however early adoption is permitted. The Partnership adopted this guidance in the first quarter of 2014 and the December 31, 2013 and September 29, 2013 Unaudited Condensed Consolidating Balance Sheets in Note 12 reflect the effect of the adoption of this guidance.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). The amendments in ASU 2014-09 provide for a single, principles-based model for revenue recognition that replaces the existing revenue recognition guidance. ASU 2014-09 is effective for annual and interim periods beginning on or after December 15, 2016 and will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective. It permits the use of either a retrospective or cumulative effect transition method and early adoption is not permitted. The Partnership has not yet selected a transition method and is in the process of evaluating the effect this standard will have on the consolidated financial statements and related disclosures.

(2) Interim Reporting:
The Partnership owns and operates eleven amusement parks, three separately gated outdoor water parks, one indoor water park and five hotels. Virtually all of the Partnership’s revenues from its seasonal amusement parks, as well as its outdoor water parks and other seasonal resort facilities, are realized during a 130- to 140-day operating period beginning in early May, with the major portion concentrated in the third quarter during the peak vacation months of July and August. Knott's Berry Farm is open daily on a year-round basis. Castaway Bay is generally open daily from Memorial Day to Labor Day, plus a limited daily schedule for the balance of the year.
To assure that these highly seasonal operations will not result in misleading comparisons of current and subsequent interim periods, the Partnership has adopted the following accounting and reporting procedures for its seasonal parks: (a) revenues on multi-day admission tickets are recognized over the estimated number of visits expected for each type of ticket and are adjusted periodically

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during the season, (b) depreciation, advertising and certain seasonal operating costs are expensed during each park’s operating season, including certain costs incurred prior to the season which are amortized over the season, and (c) all other costs are expensed as incurred or ratably over the entire year.

(3) Long-Lived Assets:
Long-lived assets are reviewed for impairment upon the occurrence of events or changes in circumstances that would indicate that the carrying value of the assets may not be recoverable. In order to determine if an asset has been impaired, assets are grouped and tested at the lowest level for which identifiable, independent cash flows are available. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in expected future cash flows; a sustained, significant decline in equity price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on our consolidated financial statements.

The long-lived operating asset impairment test involves a two-step process. The first step is a comparison of each asset group's carrying value to its estimated undiscounted future cash flows expected to result from the use of the assets, including disposition. Projected future cash flows reflect management's best estimates of economic and market conditions over the projected period, including growth rates in revenues and costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates and future estimates of capital expenditures. If the carrying value of the asset group is higher than its undiscounted future cash flows, there is an indication that impairment exists and the second step must be performed to measure the amount of impairment loss. The amount of impairment is determined by comparing the implied fair value of the asset group to its carrying value in a manner consistent with the highest and best use of those assets.

The Partnership estimates fair value of operating assets using an income, market, and/or cost approach. The income approach uses an asset group's projection of estimated operating results and cash flows that is discounted using a weighted-average cost of capital reflective of current market conditions. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The cost approach is based on the amount currently required to replace the service capacity of an asset adjusted for obsolescence. If the implied fair value of the assets is less than their carrying value, an impairment charge is recorded for the difference.

Non-operating assets are evaluated for impairment based on changes in market conditions. When changes in market conditions are observed, impairment is estimated using a market-based approach. If the estimated fair value of the non-operating assets is less than their carrying value, an impairment charge is recorded for the difference.

(4) Goodwill and Other Intangible Assets:
In accordance with the applicable accounting rules, goodwill is not amortized, but, along with indefinite-lived trade-names, is evaluated for impairment on an annual basis or more frequently if indicators of impairment exist. As of September 28, 2014, there were no indicators of impairment. The Partnership's annual testing date is December 31.
The Partnership tested goodwill and other indefinite-lived intangibles for impairment on December 31, 2013 and no impairment was indicated.
A summary of changes in the Partnership’s carrying value of goodwill for the nine months ended September 28, 2014 and September 29, 2013 is as follows:
(In thousands)
 
Goodwill
(gross)
 
Accumulated
Impairment
Losses
 
Goodwill
(net)
Balance at December 31, 2012
 
$
326,089

 
$
(79,868
)
 
$
246,221

Foreign currency translation
 
(4,285
)
 

 
(4,285
)
Balance at September 29, 2013
 
$
321,804

 
$
(79,868
)
 
$
241,936

 
 
 
 
 
 
 
Balance at December 31, 2013
 
$
317,957

 
$
(79,868
)
 
$
238,089

Foreign currency translation
 
(5,576
)
 

 
(5,576
)
Balance at September 28, 2014
 
$
312,381

 
$
(79,868
)
 
$
232,513


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At September 28, 2014, December 31, 2013, and September 29, 2013 the Partnership’s other intangible assets consisted of the following:
September 28, 2014
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Value
(In thousands)
 
 
 
 
 
 
Other intangible assets:
 
 
 
 
 
 
Trade names
 
$
38,280

 
$

 
$
38,280

License / franchise agreements
 
899

 
413

 
486

Total other intangible assets
 
$
39,179

 
$
413

 
$
38,766

 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
(In thousands)
 
 
 
 
 
 
Other intangible assets:
 
 
 
 
 
 
Trade names
 
$
39,070

 
$

 
$
39,070

License / franchise agreements
 
800

 
399

 
401

Total other intangible assets
 
$
39,870

 
$
399

 
$
39,471

 
 
 
 
 
 
 
September 29, 2013
 
 
 
 
 
 
(In thousands)
 
 
 
 
 
 
Other intangible assets:
 
 
 
 
 
 
Trade names
 
$
39,615

 
$

 
$
39,615

License / franchise agreements
 
799

 
389

 
410

Total other intangible assets
 
$
40,414

 
$
389

 
$
40,025

Estimated amortization expense is expected to total less than $75,000 in each year from 2014 through 2018.

(5) Long-Term Debt:

In June of 2014, the Partnership issued $450 million of 5.375% senior unsecured notes ("June 2014 notes"), maturing in 2024, in a private placement. The net proceeds from the offering of the June 2014 notes were used to redeem in full all of the Partnership’s $405 million of 9.125% senior unsecured notes that were scheduled to mature in 2018 (and which included $5.6 million of Original Issue Discount ("OID") to yield 9.375%), to satisfy and discharge the indenture governing the notes that were redeemed and for general corporate purposes.
The Partnership's June 2014 notes pay interest semi-annually in June and December, with the principal due in full on June 1, 2024. The notes may be redeemed, in whole or in part, at any time prior to June 1, 2019 at a price equal to 100% of the principal amount of the notes redeemed plus a “make-whole” premium together with accrued and unpaid interest, if any, to the redemption date. Thereafter, the notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Prior to June 1, 2017, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 105.375% together with accrued and unpaid interest.
In March 2013, the Partnership issued $500 million of 5.25% senior unsecured notes ("March 2013 notes"), maturing in 2021, in a private placement. Concurrently with this offering, the Partnership entered into a new $885 million credit agreement (the "2013 Credit Agreement"), which included a $630 million senior secured term loan facility and a $255 million senior secured revolving credit facility. The terms of the senior secured term loan facility include a maturity date of March 6, 2020 and bear interest at a rate of LIBOR ("London InterBank Offering Rate") plus 250 bps with a LIBOR floor of 75 bps. The term loan amortizes at $6.3 million annually and allows interest to be paid on a 30-, 60-, or 90-day basis. The Partnership is currently paying interest on a 30-day basis. The net proceeds from the notes and borrowings under the 2013 Credit Agreement were used to repay in full all amounts outstanding under the previous credit facilities. The facilities provided under the 2013 Credit Agreement are collateralized by substantially all of the assets of the Partnership.

Terms of the 2013 Credit Agreement include a revolving credit facility of a combined $255 million. Under the 2013 Credit Agreement, the Canadian portion of the revolving credit facility has a sub-limit of $15 million. U.S. denominated and Canadian denominated loans made under the revolving credit facility bear interest at a rate of LIBOR plus 225 bps (with no LIBOR floor).

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Table of Contents

The revolving credit facility is scheduled to mature in March 2018 and also provides for the issuance of documentary and standby letters of credit. The 2013 Credit Agreement requires the Partnership to pay a commitment fee of 38 bps per annum on the unused portion of the credit facilities.

The 2013 Credit Agreement requires the Partnership to maintain specified financial ratios, which if breached for any reason, including a decline in operating results, could result in an event of default under the agreement. The most restrictive of these ratios is the Consolidated Leverage Ratio which is measured quarterly on a trailing-twelve month basis. The Consolidated Leverage Ratio decreased to 6.00x consolidated total debt (excluding the revolving debt)-to-Consolidated EBITDA at the end of the second quarter in 2014, and the ratio will decrease by 0.25x each second quarter until it reaches 5.25x. As of September 28, 2014, the Partnership’s Consolidated Leverage Ratio was 3.78x. The Partnership was in compliance with all other covenants under the 2013 Credit Agreement as of September 28, 2014.

The Partnership is allowed to make Restricted Payments, as defined in the 2013 Credit Agreement, of up to $60 million annually, so long as no default or event of default has occurred and is continuing. 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 the Partnership’s pro-forma Consolidated Leverage Ratio be less than or equal to 5.00x. Per the terms of the indentures governing the Partnership's June 2014 and March 2013 notes, we can make Restricted Payments of $60 million annually so long as no default or event of default has occurred and is continuing, and our ability to make additional Restricted Payments in 2014 and beyond is permitted should the Partnership's pro forma trailing-twelve-month Total-Indebtedness-to-Consolidated-Cash-Flow Ratio be less than or equal to 5.00x.

The Partnership's March 2013 notes pay interest semi-annually in March and September, with the principal due in full on March 15, 2021. The notes may be redeemed, in whole or in part, at any time prior to March 15, 2016 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 March 15, 2016, up to 35% of the notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 105.25% together with accrued and unpaid interest.

As market conditions warrant, the Partnership may from time to time repurchase debt securities issued by the Partnership, in privately negotiated or open market transactions, by tender offer, exchange offer or otherwise.

(6) Derivative Financial Instruments:
Derivative financial instruments are used within the Partnership’s overall risk management program to manage certain interest rate and foreign currency risks. By utilizing a derivative instrument to hedge our exposure to LIBOR rate changes, the Partnership is exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, hedging instruments are placed with a counterparty that the Partnership believes poses minimal credit risk.
The Partnership does not use derivative financial instruments for trading purposes.
We have entered into several interest rate swaps that fix all of our variable rate term-debt payments. As of September 28, 2014, we have $800 million of variable-rate debt to fixed rates swaps that mature in December 2015 and fix LIBOR at a weighted average rate of 2.38%. These swaps have been de-designated as cash flow hedges. During the third quarter and fourth quarter of 2013, we entered into four forward-starting interest rate swap agreements that will effectively convert $500 million of variable-rate debt to fixed rates beginning in December of 2015. These swaps, which were designated as cash flow hedges, mature on December 31, 2018 and fix LIBOR at a weighted average rate of 2.94%.

10

Table of Contents

Fair Value of Derivative Instruments and the Classification in Condensed Consolidated Balance Sheet:
(In thousands)
 
Condensed Consolidated
Balance Sheet Location
 
Fair Value as of
 
Fair Value as of
 
Fair Value as of
September 28, 2014
 
December 31, 2013
 
September 29, 2013
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
Interest rate swaps
 
Derivative Liability
 
$
(10,044
)
 
$
(3,916
)
 
$
(5,483
)
Total derivatives designated as hedging instruments
 
 
 
$
(10,044
)
 
$
(3,916
)
 
$
(5,483
)
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
Interest rate swaps
 
Derivative Liability
 
$
(15,758
)
 
$
(22,746
)
 
$
(26,163
)
Total derivatives not designated as hedging instruments
 
 
 
$
(15,758
)
 
$
(22,746
)
 
$
(26,163
)
Net derivative liability
 
 
 
$
(25,802
)
 
$
(26,662
)
 
$
(31,646
)
 
Derivatives Designated as Hedging Instruments
Changes in fair value of highly effective hedges are recorded as a component of accumulated other comprehensive loss in the unaudited condensed consolidated balance sheets. Any ineffectiveness is recognized immediately in income. Amounts recorded as a component of accumulated other comprehensive loss are reclassified into earnings in the same period the forecasted transactions affect earnings. As of September 28, 2014 we have no amounts that are forecasted to be reclassified into earnings in the next twelve months.
Derivatives Not Designated as Hedging Instruments
Certain interest rate swap contracts were deemed ineffective in prior years and no longer qualified for hedge accounting. As a result of discontinued hedge accounting, the instruments are prospectively adjusted to fair value each reporting period through "Net effect of swaps" on the unaudited condensed consolidated statements of operations and comprehensive income. The amounts that were previously recorded as a component of accumulated other comprehensive loss prior to the de-designation are reclassified to earnings and a corresponding realized gain or loss will be recognized when the forecasted cash flow occurs. As of September 28, 2014, approximately $7.8 million of losses remain in accumulated comprehensive loss related to the effective cash flow hedge contracts prior to de-designation. We estimate that losses of $7.8 million will be reclassified to earnings within the next 12 months.
The following table presents our derivative portfolio along with their notional amounts and their fixed interest rates as of September 28, 2014.
 
Interest Rate Swaps
($'s in thousands)
Derivatives designated as hedging instruments
 
Derivatives not designated as hedging instruments
 
Notional Amounts
 
LIBOR Rate
 
Notional Amounts
 
LIBOR Rate
 
$
200,000

 
3.00
%
 
$
200,000

 
2.27
%
 
100,000

 
3.00
%
 
150,000

 
2.43
%
 
100,000

 
3.00
%
 
75,000

 
2.30
%
 
100,000

 
2.70
%
 
70,000

 
2.54
%
 
 
 
 
 
50,000

 
2.54
%
 
 
 
 
 
50,000

 
2.54
%
 
 
 
 
 
50,000

 
2.43
%
 
 
 
 
 
50,000

 
2.29
%
 
 
 
 
 
50,000

 
2.29
%
 
 
 
 
 
30,000

 
2.54
%
 
 
 
 
 
25,000

 
2.30
%
Total $'s / Average Rate
$
500,000

 
2.94
%
 
$
800,000

 
2.38
%


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Table of Contents

Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the three-month periods ended September 28, 2014 and September 29, 2013:
 
(In thousands)
 
Amount of Gain (Loss) Recognized in  Accumulated OCI on Derivatives (Effective Portion)
 
Amount and Location of Gain (Loss)
Reclassified from Accumulated OCI into Income
(Effective Portion)
 
Amount and Location of Gain (Loss)
Recognized in Income on Derivative
(Ineffective Portion)
Derivatives designated as
Cash Flow Hedging
Relationships
 
Three months ended
 
Three months ended
 
 
 
Three months ended
 
Three months ended
 
 
 
Three months ended
 
Three months ended
 
9/28/14
 
9/29/13
 
 
 
9/28/14
 
9/29/13
 
 
 
9/28/14
 
9/29/13
Interest rate swaps
 
$
1,235

 
$
(5,483
)
 
Interest Expense
 
$

 
$

 
Net effect of swaps
 
$

 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In thousands)
 
Amount and Location of Gain (Loss) Recognized
in Income on Derivative
Derivatives not designated as Cash Flow
Hedging Relationships
 
 
 
Three months ended
 
Three months ended
 
 
 
9/28/14
 
9/29/13
Interest rate swaps
 
Net effect of swaps
 
$
3,073

 
$
609

 
 
 
 
$
3,073

 
$
609

 
 
 
 
 
 
 
During the quarter ended September 28, 2014, in addition to gains of $3.1 million recognized in income on the derivatives not designated as cash flow hedges (as noted in the tables above), $2.0 million of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the quarter. The effect of these amounts resulted in a benefit to earnings of $1.1 million recorded in “Net effect of swaps.”

For the three-month period ended September 29, 2013, in addition to the $0.6 million recognized in income on the derivatives not designated as cash flow hedges (as noted in the tables above), $2.0 million of expense representing the amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations. The effect of these amounts resulted in a charge to earnings of $1.4 million recorded in “Net effect of swaps.”



Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the nine-month periods ended September 28, 2014 and September 29, 2013:
 
(In thousands)
 
Amount of Gain (Loss) Recognized in  Accumulated OCI on Derivatives (Effective Portion)
 
Amount and Location of Gain (Loss)
Reclassified from Accumulated OCI into Income
(Effective Portion)
 
Amount and Location of Gain (Loss)
Recognized in Income on Derivative
(Ineffective Portion)
Derivatives designated as
Cash Flow Hedging
Relationships
 
Nine months ended
 
Nine months ended
 
 
 
Nine months ended
 
Nine months ended
 
 
 
Nine months ended
 
Nine months ended
 
9/28/14
 
9/29/13
 
 
 
9/28/14
 
9/29/13
 
 
 
9/28/14
 
9/29/13
Interest rate swaps
 
$
(6,129
)
 
$
(3,217
)
 
Interest Expense
 
$

 
$
(2,797
)
 
Net effect of swaps
 
$

 
$
3,703

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(In thousands)
 
Amount and Location of Gain (Loss) Recognized
in Income on Derivative
Derivatives not designated as Cash Flow
Hedging Relationships
 
 
 
Nine months ended
 
Nine months ended
 
 
 
9/28/14
 
9/29/13
Interest rate swaps
 
Net effect of swaps
 
$
6,991

 
$
130

 
 
 
 
$
6,991

 
$
130

 
 
 
 
 
 
 

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Table of Contents

During the nine-month period ended ended September 28, 2014, in addition to gains of $7.0 million recognized in income on the derivatives not designated as cash flow hedges (as noted in the tables above), $6.0 million of expense representing the regular amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations for the quarter. The effect of these amounts resulted in a benefit to earnings of $1.0 million recorded in “Net effect of swaps.”

For the nine-month period ended September 29, 2013, in addition to the $3.7 million gain recognized in income on the ineffective portion of derivatives and $0.1 million gain on the derivatives not designated as cash flow hedges (as noted in the tables above), $7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $4.3 million of expense representing the amortization of amounts in AOCI was recorded in the condensed consolidated statements of operations. The effect of these amounts resulted in a charge to earnings of $8.3 million recorded in “Net effect of swaps.”

Effects of Derivative Instruments on Income (Loss) and Other Comprehensive Income (Loss) for the twelve-month periods ended September 28, 2014 and September 29, 2013:
(In thousands)
 
Amount of Gain (Loss)
Recognized in Accumulated OCI on Derivatives
(Effective Portion)
 
Amount and Location of Gain (Loss)
Reclassified from Accumulated OCI into Income
(Effective Portion)
 
Amount and Location of Gain (Loss)
Recognized in Income on Derivative
(Ineffective Portion)
Derivatives designated as
Cash Flow Hedging
Relationships
 
Twelve months ended
 
Twelve months ended
 
 
 
Twelve months ended
 
Twelve months ended
 
 
 
Twelve months ended
 
Twelve months ended
 
9/28/14
 
9/29/13
 
 
 
9/28/14
 
9/29/13
 
 
 
9/28/14
 
9/29/13
Interest rate swaps
 
$
(4,562
)
 
$
(769
)
 
Interest Expense
 
$

 
$
(5,820
)
 
Net effect of swaps
 
$

 
$
3,703

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

(In thousands)
 
Amount and Location of Gain (Loss) Recognized
in Income on Derivative
Derivatives not designated as Cash Flow Hedging
Relationships
 
 
 
Twelve months ended
 
Twelve months ended
 
 
 
9/28/14
 
9/29/13
Interest rate swaps
 
Net effect of swaps
 
$
10,408

 
$
130

 
 
 
 
$
10,408

 
$
130

 
 
 
 
 
 
 

During the twelve-month period ending September 28, 2014, in addition to the $10.4 million gain recognized in income on derivatives not designated as cash flow hedges (as noted in the tables above), $7.9 million of expense representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended September 28, 2014 in the condensed consolidated statements of operations. The effect of these amounts resulted in a benefit to earnings of $2.5 million recorded in “Net effect of swaps.”
For the twelve-month period ending September 29, 2013, in addition to the $3.7 million gain recognized in income on the ineffective portion of designated derivatives and $0.1 million of gain recognized in income on the derivatives not designated as cash flow hedges as noted in the tables above, $7.8 million of expense related to the write off of OCI balances on our May 2011 swaps and $4.1 million of expense representing the amortization of amounts in AOCI for the swaps was recorded during the trailing twelve months ended September 29, 2013 in the condensed consolidated statements of operations. The net effect of these amounts resulted in a charge to earnings for the trailing twelve month period of $8.1 million recorded in “Net effect of swaps.”
 
(7) Fair Value Measurements:
The FASB Accounting Standards Codification (ASC) relating to fair value measurements emphasizes that fair value is a market-based measurement that should be determined based on assumptions (inputs) that market participants would use in pricing an asset or liability. Inputs may be observable or unobservable, and valuation techniques used to measure fair value should maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Accordingly, the FASB’s ASC establishes a hierarchal disclosure framework that ranks the quality and reliability of information used to determine fair values. The hierarchy is associated with the level of pricing observability utilized in measuring fair value and defines three levels of inputs to the fair value measurement process—quoted prices are the most reliable valuation inputs, whereas model values that include inputs based on unobservable data are the least reliable. Each fair value measurement must be assigned to a level corresponding to the lowest level input that is significant to the fair value measurement in its entirety.

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Table of Contents

The three broad levels of inputs defined by the fair value hierarchy are as follows:
 
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
 
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
 
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The table below presents the balances of assets and liabilities measured at fair value as of September 28, 2014, December 31, 2013, and September 29, 2013 on a recurring basis:
 
 
Total
 
Level 1
 
Level 2
 
Level 3
September 28, 2014
 
 
 
 
 
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
Interest rate swap agreements (1)
 
$
(10,044
)
 
$

 
$
(10,044
)
 
$

Interest rate swap agreements (2)
 
(15,758
)
 

 
(15,758
)
 

Net derivative liability
 
$
(25,802
)
 
$

 
$
(25,802
)
 
$

 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
Interest rate swap agreements (1)
 
$
(3,916
)
 
$

 
$
(3,916
)
 
$

Interest rate swap agreements (2)
 
$
(22,746
)
 
$

 
$
(22,746
)
 
$

Net derivative liability
 
$
(26,662
)
 
$

 
$
(26,662
)
 
$

 
 
 
 
 
 
 
 
 
September 29, 2013
 
 
 
 
 
 
 
 
Interest rate swap agreements (1)
 
$
(5,483
)
 
$

 
$
(5,483
)
 
$

Interest rate swap agreements (2)
 
$
(26,163
)
 
$

 
$
(26,163
)
 
$

Net derivative liability
 
$
(31,646
)
 
$

 
$
(31,646
)
 
$

(1)
Designated as cash flow hedges and are included in “Derivative Liability” on the Unaudited Condensed Consolidated Balance Sheet
(2)
Not designated as cash flow hedges and are included in "Derivative Liability" on the Unaudited Condensed Consolidated Balance Sheet
Fair values of the interest rate swap agreements are determined using significant inputs, including the LIBOR forward curves, which are considered Level 2 observable market inputs. In addition, the Partnership considered the effect of its credit and non-performance risk on the fair values provided, and recognized an adjustment decreasing the net derivative liability by approximately $0.6 million as of September 28, 2014.
The carrying value of cash and cash equivalents, revolver, accounts receivable, accounts payable, and accrued liabilities approximates fair value because of the short maturity of these instruments.
There were no assets measured at fair value on a non-recurring basis at September 28, 2014, December 31, 2013, or September 29, 2013, except for as described below.
The fair value of term debt at September 28, 2014 was approximately $614.2 million based on borrowing rates currently available to the Partnership on long-term debt with similar terms and average maturities. The fair value of the Partnership's notes at September 28, 2014 was approximately $919.5 million based on public trading levels as of that date. The fair value of the term debt and June 2014 notes were based on Level 2 inputs and the March 2013 notes were based on Level 1 inputs.


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Table of Contents

(8) Earnings per Unit:
Net income per limited partner unit is calculated based on the following unit amounts:
 
 
Three months ended
 
Nine months ended
 
Twelve months ended
 
 
9/28/2014
 
9/29/2013
 
9/28/2014
 
9/29/2013
 
9/28/2014
 
9/29/2013
 
 
(In thousands except per unit amounts)
Basic weighted average units outstanding
 
55,439

 
55,485

 
55,448

 
55,472

 
55,458

 
55,460

Effect of dilutive units:
 
 
 
 
 
 
 
 
 
 
 
 
Unit options and restricted unit awards
 
336

 
189

 
317

 
146

 
290

 
120

Phantom units
 
80

 
189

 
90

 
185

 
116

 
224

Diluted weighted average units outstanding
 
55,855

 
55,863

 
55,855

 
55,803

 
55,864

 
55,804

Net income per unit - basic
 
$
2.92

 
$
3.43

 
$
2.21

 
$
2.32

 
$
1.84

 
$
2.13

Net income per unit - diluted
 
$
2.90

 
$
3.41

 
$
2.19

 
$
2.31

 
$
1.82

 
$
2.12

 
 
 
 
 
 
 
 
 
 
 
 
 
The effect of out-of-the-money and/or antidilutive unit options on the three, nine and twelve months ended September 28, 2014 and September 29, 2013, respectively, had they not been out of the money or antidilutive, would have been immaterial in all periods presented.
 
(9) Income and Partnership Taxes:
Under the applicable accounting rules, income taxes are recognized for the amount of taxes payable by the Partnership’s corporate subsidiaries for the current year and for the impact of deferred tax assets and liabilities, which represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. The income tax provision (benefit) for interim periods is determined by applying an estimated annual effective tax rate to the quarterly income (loss) of the Partnership’s corporate subsidiaries. In addition to income taxes on its corporate subsidiaries, the Partnership pays a publicly traded partnership tax (PTP tax) on partnership-level gross income (net revenues less cost of food, merchandise and games). As such, the Partnership’s total provision (benefit) for taxes includes amounts for both the PTP tax and for income taxes on its corporate subsidiaries.
As of the third quarter of 2014 the Partnership has recorded $1.1 million of unrecognized tax benefits including interest and/or penalties related to state and local tax filing positions. The Partnership recognizes interest and/or penalties related to unrecognized tax benefits in the income tax provision. The Partnership does not anticipate that the balance of the unrecognized tax benefit will change significantly over the next 12 months.

(10) Contingencies:

The Partnership is a party to a number of lawsuits arising in the normal course of business. In the opinion of management, none of these matters is expected to have a material effect in the aggregate on the Partnership's financial statements.



15

Table of Contents

(11) Changes in Accumulated Other Comprehensive Income (Loss) by Component:

The following tables reflect the changes in Accumulated Other Comprehensive Income (Loss) related to limited partners' equity for the three-, nine-, and twelve-month periods ended September 28, 2014 and September 29, 2013:

 
Changes in Accumulated Other Comprehensive Income by Component (1)
(In thousands)
 
 
 
 
 
 
 
 
 
Gains and Losses
 
 
 
 
 
 
 
on Cash Flow Hedges
 
Foreign Currency Items
 
 
 
 
 
 
 
 
 
Total
Balance at June 29, 2014
 
$
(17,904
)
 
$
(691
)
 
$
(18,595
)
 
 
 
 
 
 
 
 
Other comprehensive income before reclassifications, net of tax ($187) and ($1,713), respectively
 
1,048

 
2,975

 
4,023

 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income, net of tax ($307) (2)
 
1,678

 

 
1,678

 
 
 
 
 
 
 
 
Net other comprehensive income
 
2,726

 
2,975

 
5,701

 
 
 
 
 
 
 
 
September 28, 2014
 
$
(15,178
)
 
$
2,284

 
$
(12,894
)
(1) All amounts are net of tax. Amounts in parentheses indicate debits.
(2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.

 
Changes in Accumulated Other Comprehensive Income by Component (1)
(In thousands)
 
 
 
 
 
 
 
 
 
Gains and Losses
 
 
 
 
 
 
 
on Cash Flow Hedges
 
Foreign Currency Items
 
 
 
 
 
 
 
 
 
Total
Balance at June 30, 2013
 
$
(15,185
)
 
$
(858
)
 
$
(16,043
)
 
 
 
 
 
 
 
 
Other comprehensive income before reclassifications, net of tax ($1,044) and $401, respectively
 
(4,440
)
 
(699
)
 
(5,139
)
 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income, net of tax ($307) (2)
 
1,679

 

 
1,679

 
 
 
 
 
 
 
 
Net other comprehensive income
 
(2,761
)
 
(699
)
 
(3,460
)
 
 
 
 
 
 
 
 
September 29, 2013
 
$
(17,946
)
 
$
(1,557
)
 
$
(19,503
)
(1) All amounts are net of tax. Amounts in parentheses indicate debits.
(2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.



16

Table of Contents

 
Changes in Accumulated Other Comprehensive Income by Component (1)
(In thousands)
 
 
 
 
 
 
 
 
 
Gains and Losses
 
 
 
 
 
 
 
on Cash Flow Hedges
 
Foreign Currency Items
 
 
 
 
 
 
 
 
 
Total
Balance at December 31, 2013
 
$
(15,013
)
 
$
5

 
$
(15,008
)
 
 
 
 
 
 
 
 
Other comprehensive income before reclassifications, net of tax $928 and ($1,310), respectively
 
(5,200
)
 
2,279

 
(2,921
)
 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income, net of tax ($922) (2)
 
5,035

 

 
5,035

 
 
 
 
 
 
 
 
Net other comprehensive income
 
(165
)
 
2,279

 
2,114

 
 
 
 
 
 
 
 
September 28, 2014
 
$
(15,178
)
 
$
2,284

 
$
(12,894
)
(1) All amounts are net of tax. Amounts in parentheses indicate debits.
(2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.

 
Changes in Accumulated Other Comprehensive Income by Component (1)
(In thousands)
 
 
 
 
 
 
 
 
 
Gains and Losses
 
 
 
 
 
 
 
on Cash Flow Hedges
 
Foreign Currency Items
 
 
 
 
 
 
 
 
 
Total
Balance at December 31, 2012
 
$
(25,749
)
 
$
(2,751
)
 
$
(28,500
)
 
 
 
 
 
 
 
 
Other comprehensive income before reclassifications, net of tax $718 and ($689), respectively
 
(2,500
)
 
1,194

 
(1,306
)
 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income, net of tax ($1,843) (2)
 
10,303

 

 
10,303

 
 
 
 
 
 
 
 
Net other comprehensive income
 
7,803

 
1,194

 
8,997

 
 
 
 
 
 
 
 
September 29, 2013
 
$
(17,946
)
 
$
(1,557
)
 
$
(19,503
)
(1) All amounts are net of tax. Amounts in parentheses indicate debits.
(2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.


17

Table of Contents

 
Changes in Accumulated Other Comprehensive Income by Component (1)
(In thousands)
 
 
 
 
 
 
 
 
 
Gains and Losses
 
 
 
 
 
 
 
on Cash Flow Hedges
 
Foreign Currency Items
 
 
 
 
 
 
 
 
 
Total
Balance at September 29, 2013
 
$
(17,946
)
 
$
(1,557
)
 
$
(19,503
)
 
 
 
 
 
 
 
 
Other comprehensive income before reclassifications, net of tax $615 and ($2,208), respectively
 
(3,946
)
 
3,841

 
(105
)
 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income, net of tax ($1,228) (2)
 
6,714

 

 
6,714

 
 
 
 
 
 
 
 
Net other comprehensive income
 
2,768

 
3,841

 
6,609

 
 
 
 
 
 
 
 
September 28, 2014
 
$
(15,178
)
 
$
2,284

 
$
(12,894
)
(1) All amounts are net of tax. Amounts in parentheses indicate debits.
(2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.

 
Changes in Accumulated Other Comprehensive Income by Component (1)
(In thousands)
 
 
 
 
 
 
 
 
 
Gains and Losses
 
 
 
 
 
 
 
on Cash Flow Hedges
 
Foreign Currency Items
 
 
 
 
 
 
 
 
 
Total
Balance at September 30, 2012
 
$
(27,686
)
 
$
(4,371
)
 
$
(32,057
)
 
 
 
 
 
 
 
 
Other comprehensive income before reclassifications, net of tax $355 and ($1,619), respectively
 
(416
)
 
2,814

 
2,398

 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income, net of tax ($1,816) (2)
 
10,156

 

 
10,156

 
 
 
 
 
 
 
 
Net other comprehensive income
 
9,740

 
2,814

 
12,554

 
 
 
 
 
 
 
 
September 29, 2013
 
$
(17,946
)
 
$
(1,557
)
 
$
(19,503
)
(1) All amounts are net of tax. Amounts in parentheses indicate debits.
(2) See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details.

Reclassifications Out of Accumulated Other Comprehensive Income (1)
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Details about Accumulated Other Comprehensive Income Components
 
Amount Reclassified from Accumulated Other Comprehensive Income
 
Affected Line Item in the Statement Where Net Income is Presented
Gains and losses on cash flow hedges
 
3 months ended 9/28/14
 
3 months ended 9/29/13
9 months ended 9/28/14
 
9 months ended 9/29/13
 
12 months ended 9/28/14
 
12 months ended 9/29/13
 
 
 
Interest rate contracts
 
$
1,985<