Posted Monday, March 12, 2007 10:16 AM | Contributed by Jeff
Cedar Fair Entertainment Company today announced an increase in its regular quarterly cash distribution to $0.475 per limited partner unit. On an annualized basis, the Company’s distribution rate will increase from $1.88 (paid over the past four quarters) to $1.90 per unit.
Read the press release from Cedar Fair.
Monday, March 12, 2007 11:05 AM
The increase in distribution doen't surprise me. They have had 20 straight years of increasing distributions. While they did raise the distribution it when up about as little as possible $.005 per quarter. If they have a good summer season, we might see a second increase in distribution this year.
Monday, March 12, 2007 11:54 AM
I think the chain as a whole would be better off keeping much of these "distributions" in an effort to expand cap-ex budgets for the newly-acquired PPs. I understand completely that the partners expect to receive their distributions, and CF is nothing if not *consistent*.
But, as important as the unit-holders are, CF will need to show good faith in re-investing in the former PPs, or they risk losing alot of the goodwill built up over the years...
Of course, I was always a big fan of the way Paramount ran their parks - PGA notwithstanding, LOL....
Monday, March 12, 2007 12:27 PM
You don't have to relax the distribution to keep up your cap ex. I mean, they've been running things this way for decades now, building expensive rides and still paying the unit holders. Considering that virtually all of the senior management has a lot of units, they aren't going to change that. It's a great motivator. Kinzel has 516,443 units, which puts his cut alone at $981,241.70. Jack Falfas (COO) has 66,367, John Hildebrandt (CP GM) has 27,080. (These are all Yahoo Finance numbers, who knows how current they are.) The units these guys have are making more than a lot of people make working in a year.
I have 200 something, so I'll continue working my day job. :)
Monday, March 12, 2007 12:52 PM
^ But 200K units at 1.90 per means you made $380,000 last quarter - isn't that ENOUGH? ;)
LOL, I see exactly what you're getting at, Jeff, and I agree for the most part. Certainly there's more than one "pot of money" to draw from when it comes to funding *project X*. Just a little concerned (only a little) that this year's "wait-and-see approach" might lead to a little *stagnation* at the parks formerly known as....PCar, PKD, PCW.
On a more personal level, hehe, I'd WAY rather CF save on cap-ex and spend ALL of the additional funds rehabbing virtually every Paramount woodie....ON THE PLANET. :)
Monday, March 12, 2007 1:45 PM
I don't think it's stagnation, I think it's finding out how the parks perform under the "Cedar Fair way" of doing things. The PP's were certainly profitable, but I get the strong impression that they were not the tightest ship. They'll fix stuff that needs it I'm sure (provided the Canadians are available). Wolf KaBobs and (hopefully Villain this year) got the attention they needed.
Monday, March 12, 2007 2:01 PM
Aren't they required to give back a certain percentage to maintain tax status as a limited partnership? Plus, a company that continues to increase its distributions is more attractive to both its current and prospective unitholders. You can get a lot of money for your cap ex program by enticing a bank or fund to buy a few hundred thousand shares.
If they'd hold or even reduce their distribution, after awhile (or not so long a while if they lower it), people will start cashing out, thus lowering the share price and taking money out of the company.
Monday, March 12, 2007 2:25 PM
The other way to look at it. CF is known not as a growth stock but as a dividend stock. If the dividend doesn't keep going up ever so slightly, it won't look like a good investment. The increase is essentially just keeping up with inflation...
Monday, March 12, 2007 7:44 PM
"Wolf KaBobs and (hopefully Villain this year) got the attention they needed."
The Park really did not talk about the Vlliain getting much attetion this year.. i hope thats not a bad sign they backed out giving it much needed rehabbing.
My tax returns are going towards some CFE stock
Monday, March 12, 2007 10:11 PM
The Bobs were completely retracked by the begining of last season and Villian is suposed to be getting a lot of work this year.
Monday, March 12, 2007 10:15 PM
who said it was "getting a lot of work"?*** This post was edited by Mutedarkness 3/12/2007 10:16:01 PM ***
Monday, March 12, 2007 11:33 PM
I belive it was Mr Hildabrandt at East Coaster.
Tuesday, March 13, 2007 12:41 PM
hmm.. I hope we hear more
Tuesday, March 13, 2007 3:52 PM
This is always good news, and I'm hoping we do see both a great summer season, and another increase later this year!