Cedar Fair 3rd Quarter Result Quest

Hey gang, I got a quick question on Cedar Fair's 3rd Quarter results.

Lots of numbers floating around the press release, but the one that I had a question on was the net revenues up to $445 Million for the first nine months. Is this the profit that the company has made after everything has been paid?

The report goes on to mention more numbers on taxes, and such, and I was a little confused. Any help would be appreciated. The number of $445 Million sounded high to me for a complete profit, but maybe that's how much the company made. Thanks!

-Mikey

http://cedarfair.com/public/news/story.cfm?id=128

------------------
Let your mind go...and your body will follow...
*** This post was edited by olympic10086 11/12/2002 10:42:20 AM ***

I'm not an accountant. I'm restating things I learned at the Motley Fool.

Revenue is the total amount of money collected.

Profit is revenue minus expenses. Expenses are usually considered in two different "clumps": operating expenses, and most everything else. Most everything else includes interest on loans, taxes owed on profits, depreciation, and amortization.

Depreciation is the amount of value a tangible thing loses over time. For example, the car you bought last year for $10,000 is now only worth $8,000. That's a $2,000 "cost", but not one that you have to write a check for.

Amortization is the effect of spreading out a large payment over time. So, if you bought that car for $10K, but pay it back over three years, the payments *do* represent a check you write, but you've charged yourself the *costs* in the year you bought the car.

Cedar Fair reports earnings in several different ways. The one they focus on in press releases is revenues minus operating costs, not "everything else". That's what the phrase 'earnings before interest, taxes, depreciation, and amortization' means.

However, they also report earnings after depreciation (a signficant expense since most of their tangible assets are rides, buildings etc. that decay over time), and "net earnings". Net earnings is the amount of cash that is profit after all expenses. Most of those earnings go to shareholders in the form of dividends, because of the way Cedar Fair is structured.

A lot of analysts are starting to frown on the use of EBIDTA as a measure of success because it doesn't always measure cash flow (see: any corporate scandal in the last year). However, I think with Cedar Fair it's hard to hide when they're so hell bent on making sure that the dividends come flowing back to the investors.

That's why I have a growing portfolio of FUN, because the return gets as high as 8%, and I doubt you'll find many things that can make your money work harder.

------------------
Jeff
Webmaster/GTTP - Sillynonsense.com
"Climbing as we fall, we dare to hold on to our fate, and steal away our destiny to catch ourselves with quiet grace" - The Stairs, INXS

The Fool's comparison between FUN and PKS is a very enlightening read for those considering investing in the amusement business.

Edit: that article is now over one year old.

Disclaimer: I am not currently an investor in either FUN or PKS, but am considering investing in the former.
*** This post was edited by Brian Noble 11/12/2002 12:11:08 PM ***

A $15 million dollar increase in this nine month period versus the same period last year should not be a big surprise. The weather this Spring was much better than last year at most of the parks. In addition, Knott's likely saw an attendance bump with the opening of Xcelerator.

I know many people not interested in amusement parks like we are who still invest in Cedar Fair b/c of that return that Jeff describes.