| 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)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Depositary Units (Representing Limited Partner Interests) | FUN | 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 x ☐ Noo
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 ☑ Nox
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 ☐ Noo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). ☑ Yes x ☐ Noo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☑ | Accelerated filer | ☐ | |||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
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
The aggregate market value of Depositary Units held by non-affiliates of the Registrant based on the closing price of such units on June 22, 201825, 2021 of $64.09$46.46 per unit was approximately $3,540,385,307.$2,593,414,483.
Number of Depositary Units representing limited partner interests outstanding as of February 1, 2019: 56,566,6814, 2022: 56,865,394 units
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Form 10-K incorporates by reference certain information from the Registrant's definitive proxy statement to be used in connection with its annual meeting of limited partner unitholders to be held in June 2019.May 2022.
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Page 1 of 7665 pages
CEDAR FAIR, L.P.
| PAGE | ||||||||||||||
PART I
Unless the context otherwise indicates, all references to "we," "us," "our," or the "Partnership" in this Annual Report on Form 10-K refer to Cedar Fair, L.P. together with its affiliated companies.
ITEM 1. BUSINESS.
Our parks operate seasonally except for Knott's Berry Farm, which is typically open daily on which Cedar Point Sports Center is located. The sports park is operated by a third party.
The demographic groups that are most important to the parksour business are families and young people ages 12 through 24. Families are believed to be attracted by a combination of rides, live entertainment and the clean, wholesome atmosphere. Young people are believed to be attracted by the action-packed rides. During their operating season, the parksWe conduct active television, radio, newspaper and internet advertising campaigns in theirour major market areas geared toward these two groups.
The novel coronavirus (COVID-19) pandemic had a material impact on our business in 2020, had a continuing negative impact in 2021 and may have a longer-term negative effect. Beginning on March 14, 2020, we closed our properties for several months. We ultimately resumed partial operations at 10 of Parksour 13 properties in 2020, operating in accordance with local and state guidelines. Due to soft demand trends upon reopening in 2020, park operating calendars were adjusted for the remainder of 2020, including reduced operating days per week and operating hours within each operating day and earlier closure of certain parks than a typical operating year. We delayed the opening of our U.S. properties for the 2021 operating season until May 2021 and opened our Canadian property in July 2021. Upon opening in 2021, we operated with capacity restrictions, guest reservations, and other operating protocols in place. We removed most capacity restrictions, guest reservation requirements and other protocols at our U.S. properties beginning in July 2021. Canada's Wonderland operated with capacity restrictions, guest reservations, and other operating protocols in place throughout 2021. We adjusted our park operating calendars in 2021 and may continue to adjust future park operating calendars as we respond to changes in guest demand, labor availability and any state and local restrictions. We currently anticipate returning to full park operating calendars for the 2022 operating season at all of our parks. The lingering effects of the COVID-19 pandemic may impact guest demand and labor availability, and it is uncertain the extent to which those effects will impact our operational and financial results. Our future operations are dependent on factors beyond our knowledge or control, including the duration and severity of the COVID-19 pandemic and actions taken to contain its spread and mitigate its public health effects.
Despite a delayed start and various operating restrictions in place for the 2021 operating season, our 2021 operating results exceeded our initial expectations, driven by greater consumer demand resulting in higher attendance and in-park per capita spending. As a result, we made progress towards our goal to reduce outstanding debt obtained in response to the negative effects of the COVID-19 pandemic by redeeming $450 million of unsecured senior notes in December 2021. The notes redeemed were previously due in 2024.
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DESCRIPTION OF OUR PARKS
Cedar Point
Cedar Fair's flagship park, Cedar Point, was first developed as a recreational area in 1870. Located on a peninsula in Sandusky, Ohio bordered by Lake Erie and Sandusky Bay, the park is approximately 60 miles west ofbetween Cleveland and 100 miles southeastToledo, Cedar Point is annually rated one of Detroit. Attractive to both families and thrill-seekers, the park features 18 roller coasters, including many record-breakers, and three children's areas.best amusement parks in the industry by Amusement Today's international survey. Cedar Point serves a six-state region which includes nearly all of Ohio and Michigan, western Pennsylvania and New York, northern West Virginia and Indiana, as well as southwestern Ontario, Canada. The park's market area includes Cleveland, Toledo, AkronAttractive to both families and Columbus, Ohio;thrill-seekers, the park features 17 roller coasters, including many record-breakers, and Detroit, Grand Rapids, Flint and Lansing, Michigan.
three children's areas. Located adjacent to the park is Cedar Point Shores Water Park, a separately gated water park that featuresfeaturing more than 15 water rides and attractions. Cedar Point also features four hotels, three marinas, an upscale campground, and the nearby Cedar Point Sports Center which features both indoor and outdoor sports facilities. Cedar Point's four hotels include:
Castaway Bay Indoor Waterpark Resort - a year-round hotel located adjacent to the Causeway entrance to the park featuring tropical, Caribbean themed hotel rooms centered around an indoor water park, as well as a marina and dining facilities;
Cedar Point's Express Hotel is - a limited-service seasonal hotel.hotel located adjacent to the entrance to the park; and
Knott's Berry Farm
Knott's Berry Farm, located near Los Angeles in Buena Park, California, first opened in 1920 and was acquired by the Partnership in 1997. The park is one of several year-round theme parks in Southern California and serves a market area centered in Orange County with a large national and international tourism population.
The park is renowned for its seasonal events, including a special holiday event, Knott's Merry Farm, and a Halloween event, Knott's Scary Farm, which has been held for more than 45 years and is annually rated one of the best Halloween events in the industry by Amusement Today's international survey.
In 2020, while Knott's Berry Farm was unable to open amusement and water park operations following the first quarter of 2020 due to the COVID-19 pandemic, Knott's Berry Farm was recognized by Amusement Today's international survey for its creative sell-out culinary festivals. Adjacent to Knott's Berry Farm is Knott's Soak City, a separately gated seasonal water park that features multiple water rides and attractions.
Canada's Wonderland
Canada's Wonderland, a combination amusement and water park located near Toronto in Vaughan, Ontario, first opened in 1981 and was acquired by the Partnership in 2006. It contains numerous attractions, including 16 roller coasters, and is one of the most attended regional amusement parks in North America. Canada's Wonderland is in a culturally diverse metropolitan market with large populations of different ethnicities and national origins. Each year the park showcases an extensive entertainment and special event line-up which includes cultural festivals. In 2019, Canada's Wonderland will begin hosting WinterFest.
Kings Island
Kings Island, a combination amusement and water park located near Cincinnati, Ohio, first opened in 1972 and was acquired by the Partnership in 2006. Kings Island is also one of the most attended regional amusement parks in North America. The park features a children's area that has been consistently named one of the "Best Kids' Area in the World" by Amusement Today. The park's market area includes Cincinnati, Dayton and Columbus, Ohio; Louisville and Lexington, Kentucky; and Indianapolis, Indiana. In addition, Cedar Fair manages Kings Island Camp Cedar, a luxury campground near Kings Island. Kings Island Camp Cedar is owned by a third party.
Carowinds
Carowinds, a combination amusement and water park located in Charlotte, North Carolina, first opened in 1973 and was acquired by the Partnership in 2006. Carowinds' major markets include Charlotte, Greensboro, and Raleigh, North Carolina; as well as Greenville and Columbia, South Carolina.
The park also offersfeatures Camp Wilderness Resort, an upscale camping area that includes luxury cabins, RV sites, and tent and pop-up sites. The campground, features a convenience store and a swimming pool.SpringHill Suites by Marriott hotel located adjacent to the park entrance. The SpringHill Suites is a Marriott franchise operated by Cedar Fair. The hotel is open year-round and features suites, an outdoor pool, fitness center and bar.
Kings Dominion
Kings Dominion, a combination amusement and water park located near Richmond, Virginia, first opened in 1975 and was acquired by the Partnership in 2006. The park's market area includes Richmond and Norfolk, Virginia; Raleigh, North Carolina; Baltimore, Maryland and Washington, D.C.
Additionally, the park offers Kings Dominion Camp Wilderness Campground, an upscale camping area featuring luxury cabins, RV sites, and tent and pop-up sites. The campground also features a swimming pool, playground, and convenience store.campground.
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California's Great America
California's Great America, a combination amusement and water park located in Santa Clara, California, first opened in 1976 and was acquired by the Partnership in 2006. The park draws its visitors primarily from San Jose, San Francisco, Sacramento, Modesto and Monterey, among other cities in northern California.
Dorney Park
Dorney Park, a combination amusement and water park located in Allentown, Pennsylvania, was first developed as a summer resort area in 1884 and was acquired by the Partnership in 1992. Dorney Park's major markets include Philadelphia, Lancaster, Harrisburg, York, Scranton, Wilkes-Barre, Hazleton and the Lehigh Valley, Pennsylvania; New York City; and New Jersey.
Worlds of Fun
Worlds of Fun, which opened in 1973 and was acquired by the Partnership in 1995, is a combination amusement and water park located in Kansas City, Missouri. Worlds of Fun serves a market area centered in Kansas City, as well as most of Missouri and portions of Kansas and Nebraska.
Worlds of Fun also features Worlds of Fun Village, an upscale camping area that offers overnight guest accommodations next to the park with wood-side cottages, log cabins and deluxe RV sites. Included within the Village is a clubhouse with a swimming pool and a convenience store.campground.
Valleyfair
Valleyfair, which opened in 1976 and was acquired by the Partnership's predecessor in 1978, is a combination amusement and water park located near Minneapolis-St. Paul in Shakopee, Minnesota. Valleyfair's market area is centered in Minneapolis-St. Paul, but the park also draws visitors from other areas in Minnesota and surrounding states.
Michigan's Adventure
Michigan's Adventure, which opened in 1956 as Deer Park and was acquired by the Partnership in 2001, is a combination amusement and water park located in Muskegon, Michigan. Michigan's Adventure serves a market area principally from central and western Michigan and eastern Indiana.
Schlitterbahn Waterpark & Resort New Braunfels
Schlitterbahn Waterpark & Resort New Braunfels began as a resort in 1966, was introduced as a water park in 1979 and was acquired by the Partnership in 2019. The park is consistently rated the best water park in the industry by Amusement Today's international survey and is one of the most attended water parks in North America. The park, located in New Braunfels, Texas, features many river rides, water slides and attractions along the Comal River. The Resort at Schlitterbahn New Braunfels includes hotel rooms, suites, cabins, luxury suites and vacation homes. Schlitterbahn Waterpark & Resort New Braunfels’ major markets include San Antonio, Austin and Houston, Texas.
Schlitterbahn Waterpark Galveston
Schlitterbahn Waterpark Galveston opened in 2006 and was acquired by the Partnership in 2019. The park is one of the most attended water parks in North America. The park, located in Galveston, Texas, features a convertible roof system creating both indoor and outdoor areas. The park features many water attractions including an award-winning water coaster and a one-mile long river system. Schlitterbahn Waterpark Galveston serves a market area centered in Houston, Texas, as well as the tourism population in Galveston Island, Texas, a barrier island on the Texas Gulf Coast.
CAPITAL EXPENDITURES AND WORKING CAPITAL
During the operating season, the Partnership carrieswe carry significant receivables and inventories of food and merchandise, as well as payables and payroll-related accruals. AmountsThese amounts are typically substantially reduced in non-operating periods. Seasonal working capital needs are typically funded from current operations and revolving credit facilities. Revolving credit facilities are typically established at levels sufficient to accommodate the Partnership'sour peak borrowing requirements in April and May as the seasonal parks complete preparations for opening. Revolving credit borrowings are then typically reduced with the Partnership'sour positive cash flow during the seasonal operating period.
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COMPETITION
The principal competitive factors in the amusement park industry include the uniqueness and perceived quality of the rides and attractions in a particular park, its proximity to metropolitan areas, the atmosphere and cleanliness of the park, and the quality and variety of the food and immersive entertainment available. The Partnership believesWe believe that its amusementour parks feature a sufficient quality and variety of high quality rides and attractions, restaurants, gift shops and family atmosphere to make them highly competitive with other parks and forms of entertainment.
GOVERNMENT REGULATION
We also are subject to federal, state and local environmental health and safety laws and regulations. regulations such as those relating to water resources; discharges to air, water and land; the handling and disposal of solid and hazardous waste; and the cleanup of properties affected by regulated materials. Under these laws and regulations, we may be required to investigate and clean up hazardous or toxic substances or chemical releases from current or formerly owned or operated facilities or to mitigate potential environmental risks. Environmental laws typically impose cleanup responsibility and liability without regard to whether the relevant entity knew of or caused the presence of the contaminants. The costs of investigation, remediation or removal of regulated materials may be substantial, and the presence of those substances, or the failure to remediate a property properly, may impair our ability to use, transfer or obtain financing with respect to our property.
Currently, the Partnership believes it iswe believe we are in substantial compliance with applicable requirements under these laws and regulations. However, such requirements have generally become stricter over time, and there can be no assurance that new requirements, changes in enforcement policies or newly discovered conditions relating to itsour properties or operations will not require significant expenditures in the future.
All rides are operated and inspected daily by both the Partnership'sour maintenance and ride operations personnel before being placed into operation for our guests. The parks are also periodically inspected by the Partnership'sour insurance carrier and, at all parks except Valleyfair, Worlds of Fun, Schlitterbahn Waterpark New Braunfels, Schlitterbahn Waterpark Galveston and Carowinds' South Carolina rides, by state or county ride-safety inspectors. Valleyfair, Worlds of Fun, Schlitterbahn Waterpark New Braunfels, Schlitterbahn Waterpark Galveston and Carowinds each contract with a third party to inspect itsour rides pursuant to Minnesota, Missouri, Texas and South Carolina law, respectively, and submit the third-party report to the respective state agency. Additionally, all parks have added ride maintenance and operation inspections completed by third party qualified inspectors to make sure the Partnership'sour standards are being maintained.
HUMAN CAPITAL
Our highest priority continues to be the safety and well-being of our guests and employees. In 2021 and in dormitories rented byresponse to the Partnership. The Partnership maintainsCOVID-19 pandemic, we continued safety protocols to protect our employees, including staggering schedules to allow for greater social distancing, increasing hygiene, cleaning and sanitizing procedures, providing incremental personal protective equipment, and enabling employees to work from home where possible and during peaks in local case counts, and restricting business travel. We will continue to monitor the developments of the COVID-19 pandemic, as well as federal, state and local guidelines, and update our safety protocols based on the most recent recommendations and requirements.
Our employee guidelines and policies are founded on our cornerstones of safety, service and cleanliness and our core values of integrity, courtesy and inclusiveness. We are committed to equal opportunity employment and prohibit harassment or discrimination of any kind. We have adopted an open door policy to encourage an honest employer-associate relationship, which includes a confidential hotline available to all employees. As part of our commitment to our core values, we created a diversity, equity and inclusion ("DE&I") council and provided DE&I training to our employees in 2021.
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We maintain training programs for all new employees, including safety training specific to job responsibilities. We participate in the J-1 Visa program providing cultural and believes that it maintains good relationseducational exchange opportunities for our associates. We also have partnered with its employees.Bowling Green State University to create the Cedar Fair Resort and Attraction Management program, a bachelor's degree program, which is housed in downtown Sandusky, Ohio in a facility jointly owned by the Partnership and a third party developer. The bachelor's degree program prepares students for management careers at Cedar Fair parks or a similar establishment. We encourage a promote-from-within policy.
Our executive compensation program is designed to incentivize our key employees to drive superior results, to give key employees a vested interest in our growth and performance, and to enhance our ability to attract and retain exceptional managerial talent. Our executive compensation program rewards both successful individual performance and the consolidated operating results of the Partnership by directly tying compensation to our performance.
AVAILABLE INFORMATION
Copies of the Partnership'sour annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K and all amendments to those reports as filed or furnished with the SEC are available without charge upon written request to the Partnership'sour Investor Relations Office or through itsour website (www.cedarfair.com).
We use our website www.cedarfair.com as a channel of distribution of the Partnership's information. The information we post through this channel may be deemed material. Accordingly, investors should monitor this channel, in addition to following our news releases, SEC filings, and public conference calls and webcasts. The contents of our website shall not be deemed to be incorporated herein by reference.
The SEC maintains an Internet site at http://www.sec.gov that contains the Partnership'sour reports, proxy statements and other information.
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SUPPLEMENTAL ITEM. Information about our Executive Officers of Cedar Fair
| Name | Age | Position(s) | ||||||||||||
| Brian C. Witherow | Brian Witherow has served as Executive Vice President and Chief Financial Officer since | |||||||||||||
| Tim V. Fisher | Tim Fisher joined Cedar Fair as Chief Operating Officer in December 2017. Prior to joining Cedar Fair, he served as Chief Executive Officer of Village Roadshow Theme Parks International, an Australian-based theme park operator, since March 2017. Prior to this appointment with Village Roadshow Theme Parks International, Tim served as Chief Executive Officer of Village Roadshow Theme Parks since | |||||||||||||
| Brian M. Nurse | 50 | Brian Nurse joined Cedar Fair as Executive Vice President, Chief Legal Officer and Secretary in November 2021. Prior to joining Cedar Fair, he served as Senior Vice President, General Counsel and Secretary for World Wrestling Entertainment, Inc. (NYSE: WWE), an integrated media and entertainment company, from September 2018 to November 2020. Prior to joining WWE, Brian served as Vice President, Associate General Counsel and Secretary at Nestle Waters North America, Inc., a former division of Nestle S.A. which is a multinational food and drink corporation, from 2012 to 2018. Prior to that, he was Senior Legal Counsel for North American beverage/soft drink brands at PepsiCo, Inc. (NASDAQ: PEP), a multinational food, snack and beverage corporation, from 2003 to 2012. | ||||||||||||
| Kelley S. | Kelley | |||||||||||||
| David R. Hoffman | 53 | Dave Hoffman has served as Senior Vice President and Chief Accounting Officer since 2012. Prior to that, he served as Vice President of Finance and Corporate Tax since 2010. He served as Vice President of Corporate Tax from 2006 through 2010. Prior to joining Cedar Fair, Dave served as a business advisor with Ernst & Young from 2002 through 2006. | ||||||||||||
| Charles E. Myers | 58 | Charles Myers joined Cedar Fair as Senior Vice President, Creative Development in June 2019. Prior to joining Cedar Fair, he held a variety of Senior Leadership roles including Show Design, Production Management and Producing at Walt Disney Imagineering, the research and development arm of the Walt Disney Company, from 2013 to June 2019. Prior to this, he served as Senior Vice President, Licensing, Project Development & Business Development of Paramount Pictures from 2002 to 2013. | ||||||||||||
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ITEM 1A. RISK FACTORS.
Risks Related to the Amusement Park Industry
The COVID-19 pandemic has adversely impacted our business and may continue to adversely impact our business, as well as intensify certain risks we face, for an unknown length of time. The ultimate extent to which COVID-19 and measures taken in response will impact our business, including our results of operations and financial condition, cannot be reasonably predicted due to the ongoing development and fluidity of the pandemic and its effects.
Since 2020, the COVID-19 pandemic has had a material negative impact on our business. On March 14, 2020, we closed our properties in response to federal and local recommendations and restrictions to mitigate the spread of COVID-19. We were ultimately able to resume partial operations, subject to capacity, social distancing mandates and other governmental restrictions, at 10 of our 13 properties on a staggered basis in 2020. We operated all of our properties in 2021. However, 2021 operating seasons were delayed and certain restrictions remained in place at some of our properties. Because our amusement and water parks are our primary sources of net income and operating cash flows, our business and financial results and condition have been, and could continue to be, adversely impacted by these and any future mandated closures, capacity restrictions and governmental mandates required for operating our parks. There is uncertainty as to whether any future mandated or voluntary closures or other operating restrictions will occur. Our parks are geographically located throughout the United States and in Canada. The duration and severity of the COVID-19 pandemic and the related restrictions at any one location could result in a potentially disproportionate amount of risk if concentrated amongst our largest properties.
Consumer behavior and preferences may change in response to the effects of the COVID-19 pandemic both in the short term and long term, including impacts on discretionary consumer spending due to significant economic uncertainty caused by the COVID-19 pandemic. In 2020, we experienced lower demand upon reopening our properties resulting in a material decrease in revenues generated. In 2021, demand approached pre-pandemic levels, but we experienced lower demand at certain times and at certain properties. Future significant volatility or reductions in demand for, or interest in, our parks could materially adversely impact attendance, in-park per capita spending and revenue. In addition, we could experience damage to our brand and reputation due to actual or perceived health risks associated with our parks or the amusement park industry which could have a similar material adverse effect on attendance, in-park per capita spending and revenue.
We compete for discretionary spendingmay continue to experience operational risks due to the COVID-19 pandemic including limitations on our ability to recruit and discretionary free-time with many other entertainment alternatives and are subjecttrain employees in sufficient numbers to factors that generally affect the recreation and leisure industry, including general economic conditions.
We have not previously experienced the level of disruption caused by the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on the risks described above, as well as the other typesrisk factors described herein, depend on factors beyond our knowledge or control, including the duration and severity of recreational activitiesthe pandemic, success and formstiming of entertainment,current and future vaccination programs, the emergence of new variants, as well as any future actions taken to contain the pandemic spread and mitigate public health effects. It is difficult for management to estimate future performance under these conditions, and the ultimate impact of the COVID-19 pandemic on our business, results of operations and financial condition cannot be reasonably predicted. In the event we are unable to generate sufficient revenues from our parks due to a future prolonged period of closure, or experience future significant declines in business volumes, we may not have access to or may be burdened by onerous terms to acquire sufficient liquidity to meet our obligations.
Instability in economic conditions could impact our business, including movies, sporting events, restaurantsour results of operations and vacation travel. Our business is also subject to factors that generally affect the recreation and leisure industries and are not within our control. Such factors include, but are not limited to, generalfinancial condition.
Uncertain or deteriorating regional economic conditions, including relative fuel prices, and changes in consumer tastes and spending habits. Uncertainty regarding regional economic conditions and deterioration inas a result of the economy generallyCOVID-19 pandemic or during inflationary periods, may adversely impact attendance figures and guest spending patterns at our parks and disproportionatelyas uncertain economic conditions affect different demographicsour guests' levels of our target customers within our core markets. For example, group sales and season pass sales, which represent a significant portion of our revenues, are disproportionately affected by general economic conditions.discretionary spending. Both attendance (defined as the number of guest visits to our amusement parks and separately gated outdoor water parks) and in-park per capita spending (calculated as revenues generated within our amusement parks and separately gated outdoor water parks along with related tolls and parking revenues, divided by total attendance) at our parks are key drivers of our revenues and profitability, and reductions in either can directly and negatively affect revenues and profitability.
Periods of inflation or economic downturn could also impact our ability to obtain supplies and services and increase our operating costs. We have begun to see some effects, which may continue or worsen, in the current period of inflation related to domestic and global supply chain issues. In addition, the existence of unfavorable general economic conditions may also hinder the ability of those with which we do business, including vendors, concessionaires and customers, to satisfy their obligations to us. The materialization of these risks could lead to a decrease in our revenues, operating income and cash flows.
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The high fixed cost structure of amusement park operations can result in significantly lower margins if revenues do not achieve the anticipated results.meet expectations.
Bad or extreme weather conditions can adversely impact attendance at our parks, which in turn would reduce our revenues.
Because most of the attractions at our parks are outdoors, attendance at our parks can be adversely affected by continuous bad or extreme weather and by forecasts of bad or mixed weather conditions, which would negatively affect our revenues. We believe that our ownership of many parks in different geographic locations reduces, but does not completely eliminate, the effect that adverse weather can have on our consolidated results.
Our insurance coverage may not be adequate to cover all possible losses that we could suffer, and our insurance costs may increase.
Companies engaged in the amusement park business may be sued for substantial damages in the event of an actual or alleged accident. An accident occurring at our parks or at competing parks could reduce attendance, increase insurance premiums, and negatively impact our operating results. Although we carry liability insurance to cover this risk, there can be no assurance that our coverage will be adequate to cover liabilities, that we will be able to obtain coverage at commercially reasonable rates, or that we will be able to obtain adequate coverage should a catastrophic incident occur at our parks or at other parks.
Unanticipated construction delays in completing capital improvement projects in our parks and resort facilities, significant ride downtime, or other unplanned park closures could adversely affect our revenues.
A principal competitive factor for an amusement park is the uniqueness and perceived quality of its rides and attractions in a particular market area. Accordingly, the regular addition of new rides and attractions is important, and a key element of our revenue growth is strategic capital spending on new rides and attractions. Any construction delays, including construction delays in response to business disruptions or due to domestic and global supply chain issues, could adversely affect our attendance and our ability to realize revenue growth. Further, when rides, attractions, or an entire park, have unplanned downtime and/or closures, our revenue could be adversely affected.
There is a risk of accidents or other incidents occurring at amusement and water parks, which may reduce attendance and negatively impact our revenues.
The high fixed cost structuresafety of our guests and employees is one of our top priorities. Our amusement and water parks feature thrill rides. There are inherent risks involved with these attractions, and an accident or a serious injury at any of our parks may result in negative publicity and could reduce attendance and result in decreased revenues. In addition, accidents or injuries at parks operated by our competitors could influence the general attitudes of amusement park operations can result in significantly lower margins if revenues dopatrons and adversely affect attendance at our parks. Other types of incidents such as food borne illnesses and disruptive, negative guest behavior which have either been alleged or proved to be attributable to our parks or our competitors could adversely affect attendance and revenues.
Risks Related to Our Strategy
Our growth strategy may not meet expectations.achieve the anticipated results.
We compete for discretionary spending and discretionary free time with many other entertainment alternatives and are subject to factors that generally affect the recreation and leisure industry, including general economic conditions.
Our parks compete for discretionary spending and discretionary free time with other amusement, water and theme parks and with other types of recreational activities and forms of entertainment, including movies, sporting events, restaurants and vacation travel. Our business is also subject to factors that generally affect the recreation and leisure industries and are not within our control. Such factors include, but are not limited to, general economic conditions, including relative fuel prices, and changes in margins,consumer tastes and spending habits. There may be a material adverse effect on our business, financial condition or results of operations if we are unable to effectively compete with other entertainment alternatives.
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The operating season at most of our parks is of limited duration, which can magnify the impact of adverse conditions or events occurring within that operating season.
Twelve of our properties are seasonal, generally open during weekends beginning in April or May, then daily from Memorial Day through Labor Day. After Labor Day, the seasonal properties are open during select weekends in September and, in most cases, in the fourth quarter for Halloween and winter events. As a result, a substantial portion of our revenues profitabilityare typically generated during a 130- to 140-day operating season. Consequently, when adverse conditions or events occur during the operating season, particularly during the peak vacation months of July and cash flows. Such effectsAugust or the important fall season, there is only a limited period of time during which the impact of those conditions or events can be especially pronounced during periodsmitigated. Accordingly, the timing of economic contractionsuch conditions or slow economic growth.events may have a disproportionate adverse effect upon our revenues.
Risks Related to Human Capital
Increased costs of labor and employee health and welfare benefits may impact our results of operations.
Labor is a primary component in the cost of operating our business. Increased labor costs, due to competition, inflationary pressures, increased federal, state or local minimum wage orrequirements, and increased employee benefit costs, including health care costs, or otherwise, could adversely impact our operating expenses. In 2021, we experienced a meaningful increase in seasonal labor rate in order to recruit employees in a challenging labor market. Continued increases to both market wage rates and the statutory minimum wage rates could also materially impact our future seasonal labor rates. It is possible that these changes could significantly increase our labor costs, which would adversely affect our operating results and cash flows.
Our business depends on our ability to meet our workforce needs.
Our success depends on our ability to attract, motivate and retain qualified employees to keep pace with our needs. If we are unable to do so, our results of operations and cash flows may be adversely affected. In addition, we employ a significant seasonal workforce. We recruit year-round to fill thousands of seasonal staffing positions each season and work to manage seasonal wages and the timing of the hiring process to ensure the appropriate workforce is in place. There is no assurance that we will be able to recruit and hire adequate seasonal personnel as the business requires or that we will not experience material increases in the cost of securing our seasonal workforce in the future.future, including due to the ongoing effects of the COVID-19 pandemic which resulted in a meaningful increase in labor rate to adequately staff our parks in 2021.
If we lose key personnel, our business may be adversely affected.
Our success depends in part upon a number offew key employees, including our senior management team, whose members have been involved in the leisure and hospitality industries for an average of more than 20 years. The loss of services of our key employees or our inability to replace our key employees could cause disruption in important operational, financial and strategic functions and have a material adverse effect on our business.
The amount of our indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and prevent us from fulfilling our obligations under our debt agreements.
We had $1,700.4 million$2.6 billion of outstanding indebtedness as of December 31, 2018 (after giving effect to $15.4 million of outstanding letters of credit under our revolving credit facility and before2021 (before reduction of debt issuance costs and original issue discount).
The amount of our indebtedness could have important consequences. For example, it could:
•limit our ability to borrow money for our working capital, capital expenditures, debt service requirements, strategic initiatives or other purposes;
•limit our flexibility in planning or reacting to changes in business and future business operations; and
•make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing other indebtedness.
In addition, we may not be able to generate sufficient cash flow from operations, or be able to draw under our revolving credit facility or otherwise, in an amount sufficient to fund our liquidity needs, including the payment of principal and interest on our debt obligations. If our cash flows and capital resources are insufficient to service our indebtedness, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. Our ability to restructure or refinance our debt in the future will depend on the condition of the capital and credit markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. In addition, the terms of our existing or future debt agreements, including our credit agreement and the indentures governing our notes, may restrict us from adopting some of these alternatives. In the absence of sufficient operating results and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. We may not be able to consummate those dispositions for fair market value or at all. Furthermore, any proceeds that we could realize from any such dispositions may not be adequate to meet our debt service obligations then due.
11
Despite the amount of our indebtedness, we may be able to incur significant additional amounts of debt,indebtedness, which could further exacerbate the risks associated with the amount of our indebtedness.
Our debt agreements contain restrictions that could limit our flexibility in investing in our business, including the ability to pay partnership distributions.
Our credit agreement and the indentures governing our notes contain, and any future indebtedness of ours will likely contain, a number of covenants that could impose significant financial restrictions on us, including restrictions on our and our subsidiaries' ability to, among other things:
•pay distributions on or make distributions in respect of our partnership units or make other Restricted Payments;
•incur additional debt or issue certain preferred equity;
•make certain investments;
•sell certain assets;
•create restrictions on distributions from restricted subsidiaries;
•create liens on certain assets to secure debt;
•consolidate, merge, amalgamate, sell or otherwise dispose of all or substantially all our assets;
•enter into certain transactions with our affiliates; and
•designate our subsidiaries as unrestricted subsidiaries.
Our credit agreement includes: (i) a Senior Secured Leverage Ratio of 4.50x Total First Lien Senior Secured Debt-to-Consolidated EBITDA starting with the first quarter of 2022, which will step down to 4.00x in the second quarter of 2023 and which will step down further to 3.75x in the third quarter of 2023, with the covenant calculations for the first, second, and third quarters in 2022 to include Consolidated EBITDA from the second, third and fourth quarters of the fiscal year ended December 31, 2019 in lieu of the Consolidated EBITDA for the corresponding quarters in 2021 ("Deemed EBITDA Quarters"); (ii) a requirement that we maintain a minimum liquidity level of at least $125 million, tested at all times, until the earlier of December 31, 2022 or the termination of the Additional Restrictions Period (which generally includes the period from the effective date of the Second Amendment until the delivery of the compliance certificate for the fourth quarter of 2022); and (iii) a suspension of certain Restricted Payments, including partnership distributions, under our credit agreement until the termination of the Additional Restrictions Period. We may terminate the Additional Restrictions Period prior to December 31, 2022 by achieving compliance with the Senior Secured Leverage Ratio covenant as of the end of a fiscal quarter without giving effect to Deemed EBITDA Quarters for any fiscal quarter.
Our fixed rate note agreements include Restricted Payment provisions, which could limit our ability to pay partnership distributions. Pursuant to the terms of the indenture governing the 2027 senior notes, which includes the most restrictive of these Restricted Payments provisions under our fixed rate note agreements, if our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio is greater than 5.25x, we can still make Restricted Payments of $100 million annually so long as no default or event of default has occurred and is continuing. If our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio is less than or equal to 5.25x, we can make Restricted Payments up to our Restricted Payment pool.
Variable rate indebtedness could subject us to the risk of higher interest rates, which could cause our future debt service obligations to increase.
As of December 31, 2018, after giving consideration to current outstanding interest-rate swap arrangements, most of2021, our indebtedness under our term loan facilitycredit agreement accrues variable rate interest that is either fixed orhas been swapped to a fixed rate. After the expiration of outstanding interest-rate swap agreements, certain of our borrowings may be at variable rates of interest and expose us to interest rate risk. If interest rates increase, our annual debt service obligations on any variable-rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease.
Cyber-security risks and the indentures governing our notes contain, and any future indebtednessfailure to maintain the integrity of ours will likely contain, a number of covenants that could impose significant operating and financial restrictions on us, including restrictions on our and our subsidiaries' ability to, among other things:
In the normal course of default.business, we, or third parties on our behalf, collect and retain large volumes of internal and customer data, including credit card numbers and other personally identifiable information, which is used for target marketing and promotional purposes, and our various information technology systems enter, process, summarize and report such data. We also maintain personally identifiable information about our employees. The ratiointegrity and protection of such data is set atcritical to our business, and our guests and employees have a maximum of 5.50x Consolidated Total Debt-to-Consolidated EBITDA. As of December 31, 2018,high expectation that we were inwill adequately protect their personal information. The regulatory environment, as well as the requirements imposed on us by the credit card industry, governing information, security and privacy laws is increasingly demanding and continues to evolve. Maintaining compliance with applicable security and privacy regulations may increase our operating costs and/or adversely impact our ability to market our parks, products and services to our guests. Furthermore, if a person could circumvent our security measures, he or she could destroy or steal valuable information or disrupt our operations. Any security breach could expose us to risks of data loss, which could harm our reputation and result in remedial and other costs, fines or lawsuits. Although we carry liability insurance to cover this risk, there can be no assurance that our coverage will be adequate to cover liabilities, or that we will be able to obtain adequate coverage should a catastrophic incident occur.
12
Our operations, our workforce and our ownership of property subject us to various laws and regulatory compliance, which may create uncertainty regarding future expenditures and liabilities.
We may be required to incur costs to comply with regulatory requirements, such as those relating to employment practices, environmental requirements, and other regulatory matters, and the costs of compliance, investigation, remediation, litigation, and resolution of regulatory matters could be substantial. We are subject to extensive federal and state employment laws and regulations, including wage and hour laws and other pay practices and employee record-keeping requirements. We periodically have had to, and may have to, defend against lawsuits asserting non-compliance. Such lawsuits can be costly, time consuming and distract management, and adverse rulings in these types of claims could negatively affect our business, financial condition covenantor results.
We also are subject to federal, state and all other covenants underlocal environmental laws and regulations such as those relating to water resources; discharges to air, water and land; the Amended 2017 Credit Agreement.
Our tax treatment is dependent on our status as a partnership for federal income tax purposes. If the tax laws were to treat us as a corporation or we become subject to a material amount of entity-level taxation, it may substantially reduce the amount of cashour available for distribution to our unitholders.cash.
We are a limited partnership under Delaware law and are treated as a partnership for federal income tax purposes. A change in current tax law may cause us to be taxed as a corporation for federal income tax purposes or otherwise subject us to taxation as an entity. If we were treated as a corporation for federal income tax purposes, we would pay federal income tax on our entire taxable income at the corporate tax rate, rather than only on the taxable income from our corporate subsidiaries, and may be subject to additional state taxes at varying rates. Further, unitholder distributions would generally be taxed again as corporate distributions or dividends and no income, gains, losses, or deductions would flow through to unitholders. Because additional entity level taxes would be imposed upon us as a corporation, our cash available for distributioncash could be substantially reduced. Although we are not currently aware of any legislative proposal that would adversely impact our treatment as a partnership, we are unable to predict whether any changes or other proposals will ultimately be enacted.
Our insurance coverage may not be adequate to cover all possible losses that we could suffer,status as a partnership for federal income tax purposes subjects us and our insurance costs may increase.
Because we are treated as a partnership for substantial damages infederal income tax purposes, we are required to annually report to our unitholders certain partnership items. The nature of these items and the eventevolving legislation surrounding these reporting requirements may increase our unitholders' compliance cost and the cost of an actual or alleged accident. An accident occurring atowning our parks or at competing parks could reduce attendance, increase insurance premiums, and negatively impact our operating results. Although we carry liability insurance to cover this risk, there can be no assurance that our coverage will be adequate to cover liabilities, that we will be able to obtain coverage at commercially reasonable rates, or that we will be able to obtain adequate coverage should a catastrophic incident occur at our parks or at other parks.units.
General Risk Factors
Other factors, including local events, natural disasters, pandemics and terrorist activities, or threats of these events, could adversely impact park attendance and our revenues.
Lower attendance may result from various local events, natural disasters, pandemics or terrorist activities, or threats of these events, all of which are outside of our control.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
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ITEM 2.PROPERTIES.
| Park | Location | Approximate Total Acreage | Approximate Developed Acreage | Approximate Undeveloped Acreage | Park | Location | Approximate Total Acreage | Approximate Developed Acreage | Approximate Undeveloped Acreage | ||||||||||||||||
Cedar Point Cedar Point Shores | (1), (3) | Sandusky, Ohio | 685 | 540 | 145 | Cedar Point Cedar Point Shores | (1) | Sandusky, Ohio | 870 | 725 | 145 | ||||||||||||||
Knott's Berry Farm Knott's Soak City | Buena Park, California | 175 | 175 | — | Knott's Berry Farm Knott's Soak City | Buena Park, California | 175 | 175 | — | ||||||||||||||||
| Canada's Wonderland | Vaughan, Ontario, Canada | 295 | 295 | — | Canada's Wonderland | Vaughan, Ontario, Canada | 295 | 295 | — | ||||||||||||||||
| Kings Island | Mason, Ohio | 680 | 330 | 350 | Kings Island | Mason, Ohio | 680 | 330 | 350 | ||||||||||||||||
| Carowinds | Charlotte, North Carolina and Fort Mill, South Carolina | 400 | 300 | 100 | Carowinds | Charlotte, North Carolina and Fort Mill, South Carolina | 400 | 300 | 100 | ||||||||||||||||
| Kings Dominion | Doswell, Virginia | 740 | 280 | 460 | Kings Dominion | Doswell, Virginia | 740 | 280 | 460 | ||||||||||||||||
| California's Great America | (2) | Santa Clara, California | 165 | 165 | — | California's Great America | (2) | Santa Clara, California | 175 | 175 | — | ||||||||||||||
| Dorney Park | Allentown, Pennsylvania | 210 | 180 | 30 | Dorney Park | Allentown, Pennsylvania | 210 | 180 | 30 | ||||||||||||||||
| Worlds of Fun | Kansas City, Missouri | 350 | 250 | 100 | Worlds of Fun | Kansas City, Missouri | 350 | 250 | 100 | ||||||||||||||||
| Valleyfair | Shakopee, Minnesota | 190 | 110 | 80 | Valleyfair | Shakopee, Minnesota | 190 | 110 | 80 | ||||||||||||||||
| Michigan's Adventure | Muskegon, Michigan | 260 | 120 | 140 | Michigan's Adventure | Muskegon, Michigan | 260 | 120 | 140 | ||||||||||||||||
| Schlitterbahn Waterpark & Resort New Braunfels | Schlitterbahn Waterpark & Resort New Braunfels | New Braunfels, Texas | 90 | 75 | 15 | ||||||||||||||||||||
| Schlitterbahn Waterpark Galveston | Schlitterbahn Waterpark Galveston | (3) | Galveston, Texas | 40 | 35 | 5 | |||||||||||||||||||
(1) Cedar Point and Cedar Point Shores are located on approximately 365 acres, virtually all of which have been developed, on the Cedar Point peninsula in Sandusky, Ohio. The PartnershipWe also ownsown approximately 320505 acres of property on the mainland adjoining the approach to thenear Cedar Point Causeway with approximately 145 acres undeveloped. Cedar Point's Express Hotel, Castaway Bay Indoor Waterpark Resort and an adjoining restaurant, Castaway Bay Marina, two seasonal-employee housing complexes, and Cedar Point Sports Center and Sawmill Creek Resort are located on this property.
(2) Of the Partnership.
(3) We lease the land at Schlitterbahn Waterpark Galveston through a long-term lease agreement. The lease is renewable in 20392024 with options to renew at the Partnership'sour discretion through 2049 and has a right of first refusal clause to purchase the land. See Note 10 to the Consolidated Financial Statements for further information.
All of the Partnership'sour property is owned in fee simple and is encumbered by our credit agreement and the 2025 senior notes, with the exception of California's Great America in Santa Clara, California, andthe land at Schlitterbahn Waterpark Galveston, portions of the six-mile public highway that serves as secondary access route to Cedar Point, and is encumbered byportions of the Partnership's Amended 2017 Credit Agreement. The Partnership considers itsCalifornia's Great America parking lot. We consider our properties to be well maintained, in good condition and adequate for itsour present uses and business requirements.
ITEM 3.LEGAL PROCEEDINGS.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
14
PART II
ITEM 5. MARKET FOR REGISTRANT'S DEPOSITARY UNITS, RELATED UNITHOLDER MATTERS AND ISSUER
PURCHASES OF DEPOSITARY UNITS.
Cedar Fair, L.P. Depositary Units representing limited partner interests are listed for trading on The New York Stock Exchange under the symbol "FUN". As of February 1, 2019,4, 2022, there were approximately 5,1004,800 registered holders of Cedar Fair, L.P. Depositary Units, representing limited partner interests. Item 12 in this Form 10-K includes information regarding the Partnership'sour equity incentive plan, which is incorporated herein by reference.
Our fixed rate note agreements include Restricted Payment provisions.provisions, which could limit our ability to pay partnership distributions. Pursuant to the terms of the indenture governing the Partnership's June 20142027 senior notes, which includes the most restrictive of these Restricted PaymentPayments provisions the Partnershipunder our fixed rate note agreements, if our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio is greater than 5.25x, we can still make Restricted Payments of $60$100 million annually so long as no default or event of default has occurred and is continuing, and the Partnership can make additional Restricted Payments if the Partnership'scontinuing. If our pro forma Total Indebtedness-to-Consolidated-Cash-FlowTotal-Indebtedness-to-Consolidated-Cash-Flow Ratio is less than or equal to 5.00x.5.25x, we can make Restricted Payments up to our Restricted Payment pool. Our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio was greater than 5.25x as of December 31, 2021.
Unitholder Return Performance Graph
The graph below shows a comparison of the five-year cumulative total return (assuming all distributions/dividends reinvested) for Cedar Fair, L.P. limited partnership units, the S&P 500 Index, the S&P 400 Index, and the S&P - Movies and Entertainment Index, assuming investment of $100 on December 31, 2013.2016.
| Base Period | Return | |||||||||||||||||||||||||||||||||||||||||||
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Cedar Fair, L.P. | $ | 100.00 | $ | 106.47 | $ | 82.36 | $ | 103.32 | $ | 77.27 | $ | 98.32 | ||||||||||||||||||||||||||||||||
| S&P 500 | 100.00 | 121.83 | 116.49 | 153.18 | 181.36 | 233.43 | ||||||||||||||||||||||||||||||||||||||
| S&P 400 | 100.00 | 116.24 | 103.36 | 130.44 | 148.26 | 184.97 | ||||||||||||||||||||||||||||||||||||||
| S&P Movies and Entertainment | 100.00 | 105.02 | 105.66 | 133.89 | 186.22 | 181.64 | ||||||||||||||||||||||||||||||||||||||
15
| Base Period | Return | |||||||||||||||||||||||||
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | |||||||||||||||||||||
| Cedar Fair, L.P. | $ | 100.00 | $ | 102.19 | $ | 125.98 | $ | 152.97 | $ | 162.87 | $ | 125.98 | ||||||||||||||
| S&P 500 | 100.00 | 113.69 | 115.26 | 129.04 | 157.21 | 150.33 | ||||||||||||||||||||
| S&P 400 | 100.00 | 109.77 | 107.38 | 129.65 | 150.70 | 134.00 | ||||||||||||||||||||
| S&P Movies and Entertainment | 100.00 | 117.82 | 106.93 | 118.02 | 123.94 | 124.70 | ||||||||||||||||||||
Issuer Purchases of Equity Securities
The following table summarizes repurchases of Cedar Fair, L.P. Depositary Units representing limited partner interests by the Partnership during the three months ended December 31, 2021:
| (a) | (b) | (c) | (d) | |||||||||||||||||||||||
Period | Total Number of Units Purchased (1) | Average Price Paid per Unit | Total Number of Units Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Units that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
| September 27 - October 31 | — | — | — | $ | — | |||||||||||||||||||||
| November 1 - November 30 | — | — | — | — | ||||||||||||||||||||||
| December 1 - December 31 | 1,372 | $ | 50.09 | — | — | |||||||||||||||||||||
| Total | 1,372 | $ | 50.09 | — | $ | — | ||||||||||||||||||||
(1)All repurchased units were reacquired by the Partnership in satisfaction of tax obligations related to the vesting of restricted units which were granted under the Partnership's Omnibus Incentive Plan.
ITEM 6. SELECTED FINANCIAL DATA.RESERVED.
| Years Ended December 31, | ||||||||||||||||||||
| 2018 | 2017 (1) | 2016 | 2015 (2) | 2014 (3) | ||||||||||||||||
| (In thousands, except per unit and per capita amounts) | ||||||||||||||||||||
| Statement of Operations | ||||||||||||||||||||
| Net revenues | $ | 1,348,530 | $ | 1,321,967 | $ | 1,288,721 | $ | 1,235,778 | $ | 1,159,605 | ||||||||||
| Operating income | 290,519 | 295,211 | 316,939 | 295,331 | 278,332 | |||||||||||||||
| Income before taxes | 161,396 | 216,588 | 249,106 | 134,414 | 114,100 | |||||||||||||||
| Net income | 126,653 | 215,476 | 177,688 | 112,222 | 104,215 | |||||||||||||||
| Net income per unit - basic | $ | 2.25 | $ | 3.84 | $ | 3.18 | $ | 2.01 | $ | 1.88 | ||||||||||
| Net income per unit - diluted | $ | 2.23 | $ | 3.79 | $ | 3.14 | $ | 1.99 | $ | 1.86 | ||||||||||
| Balance Sheet Data | ||||||||||||||||||||
Total assets | $ | 2,024,183 | $ | 2,064,159 | $ | 1,973,181 | $ | 1,963,020 | $ | 2,004,448 | ||||||||||
| Working capital surplus (deficit) | (34,510 | ) | 21,489 | (47,007 | ) | (14,645 | ) | (3,767 | ) | |||||||||||
| Long-term debt | 1,657,568 | 1,660,515 | 1,534,211 | 1,536,676 | 1,534,244 | |||||||||||||||
| Partners' equity | 32,416 | 82,946 | 60,519 | 57,009 | 96,217 | |||||||||||||||
| Distributions | ||||||||||||||||||||
| Declared per limited partner unit | $ | 3.595 | $ | 3.455 | $ | 3.330 | $ | 3.075 | $ | 2.850 | ||||||||||
| Paid per limited partner unit | $ | 3.595 | $ | 3.455 | $ | 3.330 | $ | 3.075 | $ | 2.850 | ||||||||||
| Other Data | ||||||||||||||||||||
| Depreciation and amortization | $ | 155,529 | $ | 153,222 | $ | 131,876 | $ | 125,631 | $ | 124,286 | ||||||||||
Adjusted EBITDA (4) | 467,773 | 478,977 | 481,248 | 459,238 | 431,280 | |||||||||||||||
| Capital expenditures | 189,775 | 188,084 | 160,656 | 175,865 | 166,719 | |||||||||||||||
Attendance (5) | 25,912 | 25,723 | 25,104 | 24,448 | 23,305 | |||||||||||||||
In-park per capita spending (6) | $ | 47.69 | $ | 47.30 | $ | 46.90 | $ | 46.20 | $ | 45.54 | ||||||||||
| Years Ended December 31, | ||||||||||||||||||||
| (In thousands) | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
| Net income | $ | 126,653 | $ | 215,476 | $ | 177,688 | $ | 112,222 | $ | 104,215 | ||||||||||
| Interest expense | 85,687 | 85,603 | 83,863 | 86,849 | 96,286 | |||||||||||||||
| Interest income | (1,515 | ) | (855 | ) | (177 | ) | (64 | ) | (126 | ) | ||||||||||
| Provision for taxes | 34,743 | 1,112 | 71,418 | 22,192 | 9,885 | |||||||||||||||
| Depreciation and amortization | 155,529 | 153,222 | 131,876 | 125,631 | 124,286 | |||||||||||||||
| EBITDA | 401,097 | 454,558 | 464,668 | 346,830 | 334,546 | |||||||||||||||
| Loss on early debt extinguishment | 1,073 | 23,121 | — | — | 29,261 | |||||||||||||||
| Net effect of swaps | 7,442 | (45 | ) | (1,197 | ) | (6,884 | ) | (2,062 | ) | |||||||||||
| Non-cash foreign currency (gain) loss | 36,294 | (29,041 | ) | (14,345 | ) | 80,946 | 40,883 | |||||||||||||
| Non-cash equity compensation expense | 11,243 | 13,789 | 18,496 | 15,470 | 12,536 | |||||||||||||||
| Loss on impairment/retirement of fixed assets, net | 10,178 | 12,728 | 12,587 | 20,873 | 9,757 | |||||||||||||||
| Gain on sale of other assets | (112 | ) | (1,877 | ) | — | — | (921 | ) | ||||||||||||
| Employment practice litigation costs | — | 4,867 | — | 259 | 4,953 | |||||||||||||||
Other (1) | 558 | 877 | 1,039 | 1,744 | 2,327 | |||||||||||||||
| Adjusted EBITDA | $ | 467,773 | $ | 478,977 | $ | 481,248 | $ | 459,238 | $ | 431,280 | ||||||||||
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Business Overview
We generate our revenues from sales of (1) admission to our amusement parks and water parks, (2) food, merchandise and games both inside and outside our parks, and (3) accommodations, extra-charge products, and other revenue sources. Our principal costs and expenses, which include salaries and wages, operating supplies, maintenance, advertising, utilities and insurance,property taxes, are relatively fixed for ana typical operating season and do not vary significantly with attendance.
Each of our properties is overseen by a park general manager and operates autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including the allocation ofallocating resources, on a property-by-property basis.
Along with attendance and in-park per capita spending statistics, 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 of Operations, RegionalSenior Vice Presidents and the park general managers.
16
The following table presents certain financial data expressed as a percent of total net revenues and selective statistical information for the periods indicated.
| Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||
| 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||||
| (In thousands, except per capita spending and percentages) | ||||||||||||||||||||||||||||||||||||||
| Net revenues: | ||||||||||||||||||||||||||||||||||||||
| Admissions | $ | 674,799 | 50.4 | % | $ | 67,852 | 37.4 | % | $ | 795,271 | 53.9 | % | ||||||||||||||||||||||||||
| Food, merchandise and games | 432,513 | 32.3 | % | 76,921 | 42.4 | % | 473,499 | 32.1 | % | |||||||||||||||||||||||||||||
| Accommodations, extra-charge products and other | 230,907 | 17.3 | % | 36,782 | 20.3 | % | 206,155 | 14.0 | % | |||||||||||||||||||||||||||||
| Net revenues | 1,338,219 | 100.0 | % | 181,555 | 100.0 | % | 1,474,925 | 100.0 | % | |||||||||||||||||||||||||||||
| Operating costs and expenses | 1,030,466 | 77.0 | % | 483,891 | 266.5 | % | 990,716 | 67.2 | % | |||||||||||||||||||||||||||||
| Depreciation and amortization | 148,803 | 11.1 | % | 157,549 | 86.8 | % | 170,456 | 11.6 | % | |||||||||||||||||||||||||||||
| Loss on impairment / retirement of fixed assets, net | 10,486 | 0.8 | % | 8,135 | 4.5 | % | 4,931 | 0.3 | % | |||||||||||||||||||||||||||||
| Loss on impairment of goodwill and other intangibles | — | — | % | 103,999 | 57.3 | % | — | — | % | |||||||||||||||||||||||||||||
| Loss (gain) on other assets | 129 | — | % | (11) | — | % | (617) | �� | % | |||||||||||||||||||||||||||||
| Operating income (loss) | 148,335 | 11.1 | % | (572,008) | (315.1) | % | 309,439 | 21.0 | % | |||||||||||||||||||||||||||||
| Interest and other expense, net | 183,732 | 13.7 | % | 150,222 | 82.7 | % | 98,860 | 6.7 | % | |||||||||||||||||||||||||||||
| Net effect of swaps | (19,000) | (1.4) | % | 15,849 | 8.7 | % | 16,532 | 1.1 | % | |||||||||||||||||||||||||||||
| Loss on early debt extinguishment | 5,909 | 0.4 | % | 2,262 | 1.2 | % | — | — | % | |||||||||||||||||||||||||||||
| Loss (gain) on foreign currency | 6,177 | 0.5 | % | (12,183) | (6.7) | % | (21,107) | (1.4) | % | |||||||||||||||||||||||||||||
| Provision (benefit) for taxes | 20,035 | 1.5 | % | (137,915) | (76.0) | % | 42,789 | 2.9 | % | |||||||||||||||||||||||||||||
| Net (loss) income | $ | (48,518) | (3.6) | % | $ | (590,243) | (325.1) | % | $ | 172,365 | 11.7 | % | ||||||||||||||||||||||||||
| Other data: | ||||||||||||||||||||||||||||||||||||||
| Attendance | 19,498 | 2,595 | 27,938 | |||||||||||||||||||||||||||||||||||
| In-park per capita spending | $ | 62.03 | $ | 46.38 | $ | 48.32 | ||||||||||||||||||||||||||||||||
Impact of COVID-19 Pandemic
The novel coronavirus (COVID-19) pandemic had a material impact on our business in 2020, had a continuing negative impact in 2021 and may have a longer-term negative effect. On March 14, 2020, we closed our properties in response to the spread of COVID-19 and local government mandates. We ultimately resumed only partial operations at 10 of our 13 properties in 2020. Due to soft demand trends upon reopening in 2020, park operating calendars were adjusted, including reduced operating days per week and operating hours within each operating day and earlier closure of certain parks than a typical operating year. Following March 14, 2020, Knott's Berry Farm's partial operations in 2020 were limited to culinary festivals.
In May 2021, we opened all of our U.S. properties for the 2021 operating season on a staggered basis with capacity restrictions, guest reservations, and other operating protocols in place. Our 2021 operating calendars were designed to align with anticipated capacity restrictions, guest demand and labor availability, including fewer operating days in July and August at some of our smaller properties and additional operating days in September and the fourth quarter at most of our properties. As vaccination distribution efforts continued during the second quarter of 2021 and we were able to hire additional labor, we removed most capacity restrictions, guest reservation requirements and other protocols at our U.S. properties beginning in July 2021. We were also able to open our Canadian property, Canada's Wonderland, in July 2021. Canada's Wonderland operated with capacity restrictions, guest reservations, and other operating protocols in place throughout 2021. We adjusted our park operating calendars in 2021 and may continue to adjust future park operating calendars as we respond to changes in guest demand, labor availability and any state and local restrictions. We currently anticipate returning to full park operating calendars for the 2022 operating season at all of our parks. The lingering effects of the COVID-19 pandemic may impact guest demand and labor availability, and it is uncertain the extent to which those effects will impact our operational and financial results. Our future operations are dependent on factors beyond our knowledge or control, including the duration and severity of the COVID-19 pandemic and actions taken to contain its spread and mitigate its public health effects. See Risk Factors at Item 1A.
Despite a delayed start and various operating restrictions in place for the 2021 operating season, our 2021 operating results exceeded our initial expectations, driven by greater consumer demand resulting in higher attendance and in-park per capita spending. As a result, we made progress towards our goal to reduce outstanding debt obtained in response to the negative effects of the COVID-19 by redeeming $450 million of unsecured senior notes in December 2021. The notes redeemed were previously due in 2024.
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| Years Ended December 31, | |||||||||||||||||||||
| 2018 | 2017 | 2016 | |||||||||||||||||||
| (In thousands, except per capita spending and percentages) | |||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||
| Admissions | $ | 737,676 | 54.7 | % | $ | 734,060 | 55.5 | % | $ | 716,189 | 55.6 | % | |||||||||
| Food, merchandise and games | 433,315 | 32.1 | % | 422,469 | 32.0 | % | 407,673 | 31.6 | % | ||||||||||||
| Accommodations, extra-charge products and other | 177,539 | 13.2 | % | 165,438 | 12.5 | % | 164,859 | 12.8 | % | ||||||||||||
| Net revenues | 1,348,530 | 100.0 | % | 1,321,967 | 100.0 | % | 1,288,721 | 100.0 | % | ||||||||||||
| Operating costs and expenses | 892,416 | 66.2 | % | 862,683 | 65.3 | % | 827,319 | 64.2 | % | ||||||||||||
| Depreciation and amortization | 155,529 | 11.5 | % | 153,222 | 11.6 | % | 131,876 | 10.2 | % | ||||||||||||
| Loss on impairment / retirement of fixed assets, net | 10,178 | 0.8 | % | 12,728 | 1.0 | % | 12,587 | 1.0 | % | ||||||||||||
| Gain on sale of investment | (112 | ) | — | % | (1,877 | ) | (0.1 | )% | — | — | % | ||||||||||
| Operating income | 290,519 | 21.5 | % | 295,211 | 22.3 | % | 316,939 | 24.6 | % | ||||||||||||
| Interest and other expense, net | 84,354 | 6.3 | % | 84,633 | 6.4 | % | 83,686 | 6.5 | % | ||||||||||||
| Net effect of swaps | 7,442 | 0.6 | % | (45 | ) | — | % | (1,197 | ) | (0.1 | )% | ||||||||||
| Loss on early debt extinguishment | 1,073 | 0.1 | % | 23,121 | 1.7 | % | — | — | % | ||||||||||||
| (Gain) loss on foreign currency | 36,254 | 2.7 | % | (29,086 | ) | (2.2 | )% | (14,656 | ) | (1.1 | )% | ||||||||||
| Provision for taxes | 34,743 | 2.6 | % | 1,112 | 0.1 | % | 71,418 | 5.5 | % | ||||||||||||
| Net income | $ | 126,653 | 9.4 | % | $ | 215,476 | 16.3 | % | $ | 177,688 | 13.8 | % | |||||||||
| Other data: | |||||||||||||||||||||
| Attendance | 25,912 | 25,723 | 25,104 | ||||||||||||||||||
| In-park per capita spending | $ | 47.69 | $ | 47.30 | $ | 46.90 | |||||||||||||||
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 23 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.
Impairment of Long-Lived Assets
The determination of bothwhether an indicator of impairment has occurred and the estimation of 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 amountestimation of the impairment charge recordedundiscounted cash flows and whether the effects could materially impact the consolidated financial statements.
Due to the negative effects of the COVID-19 pandemic on our forecasted operating results, we tested our long-lived assets for impairment during the first and third quarters of 2020 (see Note 6). Management made significant estimates in performing these impairment tests, including the anticipated time frame to re-open our parks and the related anticipated demand upon re-opening our parks. Actual results could materially differ from these estimates depending on the ultimate extent of the effects of the COVID-19 pandemic. Due to the ongoing development and fluidity of the COVID-19 pandemic, the ultimate extent of the effects of the COVID-19 pandemic cannot be reasonably predicted.
Accounting for Business Combinations
Business combinations are accounted for under the acquisition method of accounting. The amounts assigned to the identifiable assets acquired and liabilities assumed in connection with acquisitions are based on estimated fair values as of the date of the acquisition, with the remainder, if any, recorded as goodwill. The fair values are determined by management, taking into consideration information supplied by the management of the acquired entities, valuations supplied by independent appraisal experts and other relevant information. The valuations are generally based upon future cash flow projections for the acquired assets, discounted to present value. The determination of fair values requires significant judgment by management. If future operating results do not meet expectations or anticipated synergies are not realized at Schlitterbahn Waterpark & Resort New Braunfels and the Schlitterbahn Waterpark Galveston, the Schlitterbahn reporting unit may become further impaired.
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 changeThe fair value of a reporting unit is established using a combination of an income (discounted cash flow) approach and market approach. The income approach uses a reporting unit's projection of estimated operating results and discounted cash flows using a weighted-average cost of capital that reflects current market conditions. Estimated operating results are established using management's best estimates of economic and market conditions over the projected period including growth rates in these factors could have arevenues and costs, estimates of future expected changes in operating margins and cash expenditures. Other significant impact onestimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. A market approach estimates fair value by applying cash flow multiples to the recoverability
18
reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar operating and could have a material impact on our consolidated financial statements.
It is possible that our assumptions about future performance, as well as the economic outlook and related conclusions regarding valuation, 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.
Due to the negative effects of the COVID-19 pandemic on our forecasted operating results, we tested our goodwill and indefinite-lived intangible assets for impairment during the first and third quarters of 2020 (see Note 7). Management made significant estimates in performing these impairment tests, including the anticipated time frame to re-open our parks and the related anticipated demand upon re-opening our parks. Actual results could materially differ from these estimates depending on the ultimate extent of the effects of the COVID-19 pandemic. Due to the ongoing development and fluidity of the COVID-19 pandemic, the ultimate extent of the effects of the COVID-19 pandemic cannot be reasonably predicted. In conjunction with our annual measurement date, we completed the review of goodwill and other indefinite-lived intangibles as of the first days of the fourth quarter of 2021 and 2020 and determined goodwill and other indefinite-lived intangibles were not further impaired as of these testing dates.
Self-Insurance Reserves
Revenue Recognition
As disclosed within the consolidated statements of operations and comprehensive (loss) income, revenues are generated from sales of (1) admission to our amusement parks and water parks, (2) food, merchandise and games both inside and outside the parks, and (3) accommodations, extra-charge products, and other revenue sources. Admission revenues include amounts paid to gain admission into our parks, including parking fees. Revenues related to extra-charge products, including premium benefit offerings such as front-of-line products, and online transaction fees charged to customers are included in "Accommodations, extra-charge products and other". Due to our highly seasonal operations, a substantial portion of our revenues are generated during an approximate 130- to 140-day operating season. Most revenues are recognized on a daily basis based on actual guest spend at theour properties. Revenues from multi-use products, including season-long products for admission, dining, beverage and other products, are recognized over the estimated number of uses expected for each type of product. The estimated number of uses is reviewed and may be updated periodically during the operating season prior to the ticket or product expiration, which generally occurs no later than the close of the operating season. The number of uses is estimated based on historical usage adjusted for current period trends. For any bundled
Due to the effects of the COVID-19 pandemic, we extended the validity of our 2020 season-long products that include multiple performance obligations, revenue is allocated usingthrough the retail price2021 operating season in order to ensure our season pass holders received a full season of each distinct performance obligation and any inherent discounts are allocated based on the gross margin and expected redemption of each performance obligation. We do not typically provide for refunds or returns.
Income Taxes
Our legal entity structure includes both partnerships and corporate subsidiaries. As aWe are subject to publicly traded partnership wetax ("PTP tax") on certain partnership level gross income (net revenues less cost of food, merchandise, and games revenues), state and local income taxes on partnership income, U.S. federal state and local income taxes on income from our corporate subsidiaries and foreign income taxes on our foreign subsidiary. As such, the total (benefit) provision for taxes includes amounts for the PTP gross income tax and federal, state, local and foreign income taxes. Under applicable accounting rules, the total (benefit) provision for income taxes includes the amount of taxes payable for the current year and the impact of deferred tax assets and liabilities, which represents future tax consequences of events that are 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 includedrecognized in different periods in the financial statements than for tax returns of our partners. Our corporate subsidiaries are subject to entity-level income taxes. Our "Provision for taxes" includes both the PTP tax and the income taxes from the corporate subsidiaries.purposes.
Our 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 rates expected to apply in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax law is recognized in income at the time of enactment of such change in tax law. Any interest or penalties due for payment of income taxes are included in the provision for income taxes.
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We record 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. The need for this allowance is based on several factors including the ten-year carryforward period allowed for excess foreign tax credits, experience to date of foreign tax credit limitations, carryforward periods of state net operating losses, and management's long termlong-term estimates of domestic and foreign source income.
There is inherent uncertainty in the estimates used to project the amount of foreign tax credit and state net operating loss 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 allowanceallowances could change, which may result in additional valuation allowance being recorded or may result in additional valuation allowance reductions, and which may have a material negative or positive effect on our reported financial position and results of operations in future periods.
Adjusted EBITDA
Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in our current and prior credit agreements. Adjusted EBITDA is not a measurement of operating performance computed in accordance with generally accepted accounting principles ("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 as it is widely used by analysts, investors and comparable companies in our industry to evaluate our operating performance on a consistent basis, as well as more easily compare our results with those of other companies in our industry. Further, management believes 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 is provided in the discussion of results of operations that follows as a supplemental measure of our operating results and is not intended to be a substitute for operating income, net income or cash flows from operating activities as defined under GAAP. In addition, Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
The Tax Cuts and Jobs Act (the "Act") was signed into law on December 22, 2017. The Act made significant changestable below sets forth a reconciliation of Adjusted EBITDA to U.S. tax law and, among other things, reduced federal corporate tax rates from 35% to 21%. The accounting treatmentnet (loss) income for the periods indicated:
| Years Ended December 31, | ||||||||||||||||||||
| (In thousands) | 2021 | 2020 | 2019 | |||||||||||||||||
| Net (loss) income | $ | (48,518) | $ | (590,243) | $ | 172,365 | ||||||||||||||
| Interest expense | 184,032 | 150,669 | 100,364 | |||||||||||||||||
| Interest income | (94) | (460) | (2,033) | |||||||||||||||||
| Provision (benefit) for taxes | 20,035 | (137,915) | 42,789 | |||||||||||||||||
| Depreciation and amortization | 148,803 | 157,549 | 170,456 | |||||||||||||||||
| EBITDA | 304,258 | (420,400) | 483,941 | |||||||||||||||||
| Loss on early debt extinguishment | 5,909 | 2,262 | — | |||||||||||||||||
| Net effect of swaps | (19,000) | 15,849 | 16,532 | |||||||||||||||||
| Non-cash foreign currency loss (gain) | 6,255 | (12,011) | (21,061) | |||||||||||||||||
| Non-cash equity compensation expense | 15,431 | (209) | 12,434 | |||||||||||||||||
| Loss on impairment/retirement of fixed assets, net | 10,486 | 8,135 | 4,931 | |||||||||||||||||
| Loss on impairment of goodwill and other intangibles | — | 103,999 | — | |||||||||||||||||
| Loss (gain) on other assets | 129 | (11) | (617) | |||||||||||||||||
| Acquisition-related costs | — | 16 | 7,162 | |||||||||||||||||
Other (1) | 1,173 | 359 | 1,351 | |||||||||||||||||
| Adjusted EBITDA | $ | 324,641 | $ | (302,011) | $ | 504,673 | ||||||||||||||
(1) Consists of these tax law changes was complex, and the SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118") to address the application of U.S. GAAP in situations when a registrant did not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain tax effects of the Act. We recognized the final tax impacts related to the reduction in tax rates including the revaluation of deferred tax assets and liabilitiescosts as defined in our consolidated financial statements forcurrent and prior credit agreements. These items are excluded from the year ended December 31, 2018. The final impact differed from our provisional amounts by $1.3 million.calculation of Adjusted EBITDA and have included certain legal expenses and severance expenses. This balance also includes unrealized gains and losses on short-term investments.
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Results of Operations
We believe the following are key operational measures in our managementmanagerial and operational reporting, and they are used as major factors in significant operational decisions:decisions as they are primary drivers of our financial and operational performance:
Attendance is defined as the number of guest visits to our amusement parks and separately gated outdoor water parks.
In-park per capita spending is calculated as revenues generated within our amusement parks and separately gated outdoor water parks along with related tolls and parking revenues (in-park revenues), divided by total attendance.
Out-of-park revenues are defined as revenues from resort, out-of-park food and retail locations, marina, sponsorship, online transaction fees charged to customers and all other out-of-park operations.
Net revenues consist of in-park revenues and out-of-park revenues less amounts remitted to outside parties under concessionaire arrangements. See arrangements (see Note 2 - Summary5).
2021 vs. 2020
Due to the effects of Significant Accounting Policiesthe COVID-19 pandemic, the results for further information.
the year ended December 31, 2021 were not directly comparable with the results for the year ended December 31, 2020. The year ended December 31, 20182021 included 2,0611,765 operating days compared with 2,049487 operating days for the year ended December 31, 2017. 2020.
Due to the effects of the COVID-19 pandemic, we postponed the opening of our parks for the 2021 operating season to May 2021, when all of our properties opened on a staggered basis except for our Canadian property, Canada's Wonderland, which opened in July 2021. Upon opening in 2021, park operating calendars were reduced, guest reservations were required, and some operating restrictions were in place. We removed most capacity restrictions, guest reservation requirements and other protocols at our U.S. properties beginning in July 2021. Operating restrictions remained in place at our Canadian property throughout 2021. We adjusted our 2021 operating calendars to reflect anticipated changes in guest demand, labor availability and state and local restrictions by including fewer operating days in July and August at some of our smaller properties and by including additional operating days in September and the fourth quarter at most of our properties. The year ended December 31, 2021 also included results prior to the May 2021 opening of our parks from limited out-of-park operations, including the operation of some of our hotel properties and a culinary festival at Knott's Berry Farm from March 5, 2021 through May 2, 2021.
For the year ended December 31, 2020 and due to the effects of the COVID-19 pandemic, our properties closed on March 14, 2020. Eight of our 13 properties resumed partial operations on a staggered basis beginning in the second quarter of 2020 with opening dates beginning in mid-June and continuing through mid-July. During this time, we also reopened operations at some of our out-of-park operations, such as hotel operations. Due to soft demand trends upon reopening, park operating calendars were adjusted for the remainder of 2020, including reduced operating days per week and operating hours within each operating day. In addition, some of our reopened parks closed earlier than the park's pre-pandemic operating calendar. Two additional parks reopened on weekends in November and December of 2020. Following March 14, 2020, Knott's Berry Farm's partial operations were limited to culinary festivals which were classified as out-of-park revenues. The 2020 results also included daily operations at Knott's Berry Farm and 16 operating days at the Schlitterbahn parks prior to the March 14, 2020 closure of our properties. Attendance, in-park per capita spending and operating day statistics for 2020 and 2021 exclude the Knott's Berry Farm culinary festivals.
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The following table presents key financial information and operating statistics for the years ended December 31, 20182021 and December 31, 2017:2020:
| Increase (Decrease) | ||||||||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | $ | % | |||||||||||||||||||||||
| (Amounts in thousands, except for per capita spending) | ||||||||||||||||||||||||||
| Net revenues | $ | 1,338,219 | $ | 181,555 | $ | 1,156,664 | N/M | |||||||||||||||||||
| Operating costs and expenses | 1,030,466 | 483,891 | 546,575 | 113.0 | % | |||||||||||||||||||||
| Depreciation and amortization | 148,803 | 157,549 | (8,746) | (5.6) | % | |||||||||||||||||||||
| Loss on impairment/retirement of fixed assets, net | 10,486 | 8,135 | 2,351 | N/M | ||||||||||||||||||||||
| Loss on impairment of goodwill and other intangibles | — | 103,999 | (103,999) | N/M | ||||||||||||||||||||||
| Loss (gain) on other assets | 129 | (11) | 140 | N/M | ||||||||||||||||||||||
| Operating income (loss) | $ | 148,335 | $ | (572,008) | $ | 720,343 | N/M | |||||||||||||||||||
| Other Data: | ||||||||||||||||||||||||||
Adjusted EBITDA (1) | $ | 324,641 | $ | (302,011) | $ | 626,652 | N/M | |||||||||||||||||||
| Attendance | 19,498 | 2,595 | 16,903 | N/M | ||||||||||||||||||||||
| In-park per capita spending | $ | 62.03 | $ | 46.38 | $ | 15.65 | 33.7 | % | ||||||||||||||||||
| Out-of-park revenues | $ | 167,978 | $ | 67,375 | $ | 100,603 | 149.3 | % | ||||||||||||||||||
| Increase (Decrease) | |||||||||||||||
| 12/31/2018 | 12/31/2017 | $ | % | ||||||||||||
| (Amounts in thousands, except for per capita spending) | |||||||||||||||
| Net revenues | $ | 1,348,530 | $ | 1,321,967 | $ | 26,563 | 2.0 | % | |||||||
| Operating costs and expenses | 892,416 | 862,683 | 29,733 | 3.4 | % | ||||||||||
| Depreciation and amortization | 155,529 | 153,222 | 2,307 | 1.5 | % | ||||||||||
| Loss on impairment/retirement of fixed assets, net | 10,178 | 12,728 | (2,550 | ) | N/M | ||||||||||
| Gain on sale of investment | (112 | ) | (1,877 | ) | 1,765 | N/M | |||||||||
| Operating income | $ | 290,519 | $ | 295,211 | $ | (4,692 | ) | (1.6 | )% | ||||||
| N/M - Not meaningful | |||||||||||||||
| Other Data: | |||||||||||||||
Adjusted EBITDA (1) | $ | 467,773 | $ | 478,977 | $ | (11,204 | ) | (2.3 | )% | ||||||
Adjusted EBITDA margin (2) | 34.7 | % | 36.2 | % | — | (1.5 | )% | ||||||||
| Attendance | 25,912 | 25,723 | 189 | 0.7 | % | ||||||||||
| In-park per capita spending | $ | 47.69 | $ | 47.30 | $ | 0.39 | 0.8 | % | |||||||
| Out-of-park revenues | $ | 152,216 | $ | 143,763 | $ | 8,453 | 5.9 | % | |||||||
N/M Not meaningful either due to the nature of the expense line-item or due to minimal operations in 2020
(1) For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net (loss) income, see page 20.
Consolidated net revenues totaled $1.3 billion for the year ended December 31, 2021 compared with $181.6 million for 2020. This increase in net revenues was attributable to the 1,278 operating day increase in 2021 resulting in a 16.9 million-visit increase in attendance and a $100.6 million increase in out-of-park revenues. In-park per capita spending for the year ended December 31, 2021 increased 34% to $62.03, which represented higher levels of guest spending across all key revenue categories, particularly admissions, extra-charge attractions, including front-of-line Fast Lane products, and food and beverage, and was driven by increases in pricing and volume. The increase in net revenues included a $6.5 million favorable impact of foreign currency exchange rates at our Canadian park.
Operating costs and expenses for the year ended December 31, 2021 increased to $1.0 billion from $483.9 million for 2020. This was the result of an $84.5 million increase in cost of food, merchandise and games revenues ("COGS"), a $350.5 million increase in operating expenses, and a $111.6 million increase in selling, general, and administrative expenses ("SG&A"), all of which were largely the result of the 1,278 operating day increase in 2021. While the majority of the $350.5 million increase in operating expenses was attributable to the increase in operating days, there was also a meaningful increase in seasonal labor rate in order to recruit employees in a challenging labor market, as well as higher full-time wages, including accrued bonus plans. Similarly, the $111.6 million increase in SG&A expense was driven by resumed park operations in 2021. However, the increase in SG&A expense was also driven by an increase in full-time wages, particularly for accrued bonus plans and equity-based compensation plans, as well as consulting fees incurred in 2021 related to a business optimization program. The increase in operating costs and expenses included a $3.4 million unfavorable impact of foreign currency exchange rates at our Canadian park.
Depreciation and amortization expense for the year ended December 31, 2021 decreased $8.7 million compared with 2020 due primarily to the full depreciation of 15-year useful lived property and equipment from our 2006 acquisition in 2021. The loss on impairment / retirement of fixed assets for 2021 was $10.5 million compared with $8.1 million for 2020. The loss on impairment / retirement of fixed assets for 2021 included retirements of assets in the normal course of business, as well as the impairment of a few specific assets in the second half of 2021. The loss on impairment / retirement of fixed assets for 2020 included a $2.7 million impairment charge with respect to the Schlitterbahn parks' long-lived assets triggered by the effects of the COVID-19 pandemic during the first quarter of 2020 (see ItemNote 6), "Selected Financial Data"as well as the impairment of two specific assets during the first quarter of 2020. Similarly triggered by the anticipated effects of the COVID-19 pandemic, the loss on impairment of goodwill and other intangibles for 2020 included a $73.6 million, $6.8 million and $7.9 million impairment of goodwill at the Schlitterbahn parks, goodwill at Dorney Park, and the Schlitterbahn trade name, respectively, during the first quarter of 2020, and an $11.3 million, $2.3 million and $2.2 million impairment of goodwill at the Schlitterbahn parks, goodwill at Dorney Park, and the Schlitterbahn trade name, respectively, during the third quarter of 2020 (see Note 7).
After the items above, operating income for 2021 totaled $148.3 million compared with an operating loss of $572.0 million for 2020.
22
Interest expense for 2021 increased $33.4 million due to interest incurred on the 2025 senior notes issued in April 2020 and the 2028 senior notes issued in October 2020. The net effect of our swaps resulted in a $19.0 million benefit to earnings for 2021 compared with a $15.8 million charge to earnings for 2020. The difference was attributable to the change in fair market value of our swap portfolio. We recognized a loss on early debt extinguishment of $5.9 million in 2021 related to a full redemption of the 2024 senior notes, and we recognized a $2.3 million loss on early debt extinguishment in 2020 related to the 2020 refinancing events (see Note 8). During 2021, we also recognized a $6.2 million net charge to earnings for foreign currency gains and losses compared with a $12.2 million net benefit to earnings for 2020. Both amounts primarily represent remeasurement of the U.S.-dollar denominated debt recorded at our Canadian entity from the U.S.-dollar to the legal entity's functional currency.
For 2021, a provision for taxes of $20.0 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes compared with a benefit for taxes of $137.9 million recorded for 2020. The difference in provision for taxes was attributable to a larger pretax loss in 2020 from our taxable subsidiaries, as well as expected benefits from the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), which was signed into law on March 27, 2020. The CARES Act resulted in various changes to the U.S. tax law, including, among other things, allowing net operating losses arising in tax years 2018 through 2020 to be carried back to the preceding five taxable years and removing the limitation that such losses only offset 80% of taxable income. As a result of these changes, we expect to recognize two benefits. First, we carried back the tax year 2020 losses incurred by our corporate subsidiaries, which will result in the refund of a portion of federal income taxes paid during the carryback period of approximately $79.7 million. Second, the annual effective tax rate for 2021 and for 2020 included a net benefit of $1.7 million and $18.1 million, respectively, from carrying back the tax year 2020 losses of the corporate subsidiaries. This tax benefit represents an estimated incremental benefit of tax loss carrybacks for periods when the federal income tax rate was greater than the current 21% rate. The overall benefit of the carryback of losses was decreased by $4.7 million and $16.1 million in 2021 and 2020, respectively, for a projected valuation allowance on foreign tax credits originally utilized during the carryback period which would be released as a result of the loss carryback but which are not expected to be utilized.
After the items above, net loss for 2021 totaled $48.5 million, or $0.86 per diluted limited partner unit, compared with a net loss of $590.2 million, or $10.45 per diluted unit, for 2020.
For 2021, Adjusted EBITDA totaled $324.6 million compared with a $302.0 million Adjusted EBITDA loss for 2020. The increase in Adjusted EBITDA was primarily due to the impact of COVID-19 related park closures in 2020 and the related improvement in attendance, in-park per capita spending and out-of-park revenues from reopening parks in 2021.
2021 vs. 2019
As described above, the results for the year ended December 31, 2021 were not directly comparable with the results for the year ended December 31, 2020 due to the effects of the COVID-19 pandemic. The results for the year ended December 31, 2021 were more comparable with the results for the year ended December 31, 2019. As a result, we have included analysis comparing our 2021 results with our 2019 results. However, the 2021 results are also not directly comparable with the 2019 results due to the postponed opening of our parks for the 2021 operating season until May 2021, as well as operating restrictions in place upon opening in 2021, compared with a pre-pandemic operating season in 2019. The year ended December 31, 2021 included 1,765 operating days compared with a total of 2,224 operating days for the year ended December 31, 2019. The following table presents key financial information and operating statistics for the years ended December 31, 2021 and December 31, 2020:
| Increase (Decrease) | ||||||||||||||||||||||||||
| December 31, 2021 | December 31, 2019 | $ | % | |||||||||||||||||||||||
| (Amounts in thousands, except for per capita spending) | ||||||||||||||||||||||||||
| Net revenues | $ | 1,338,219 | $ | 1,474,925 | $ | (136,706) | (9.3) | % | ||||||||||||||||||
| Operating costs and expenses | 1,030,466 | 990,716 | 39,750 | 4.0 | % | |||||||||||||||||||||
| Depreciation and amortization | 148,803 | 170,456 | (21,653) | (12.7) | % | |||||||||||||||||||||
| Loss on impairment/retirement of fixed assets, net | 10,486 | 4,931 | 5,555 | N/M | ||||||||||||||||||||||
| Loss (gain) on other assets | 129 | (617) | 746 | N/M | ||||||||||||||||||||||
| Operating income | $ | 148,335 | $ | 309,439 | $ | (161,104) | (52.1) | % | ||||||||||||||||||
| Other Data: | ||||||||||||||||||||||||||
Adjusted EBITDA (1) | $ | 324,641 | $ | 504,673 | $ | (180,032) | (35.7) | % | ||||||||||||||||||
Adjusted EBITDA margin (2) | 24.3 | % | 34.2 | % | — | (9.9) | % | |||||||||||||||||||
| Attendance | 19,498 | 27,938 | (8,440) | (30.2) | % | |||||||||||||||||||||
| In-park per capita spending | $ | 62.03 | $ | 48.32 | $ | 13.71 | 28.4 | % | ||||||||||||||||||
| Out-of-park revenues | $ | 167,978 | $ | 168,708 | $ | (730) | (0.4) | % | ||||||||||||||||||
N/M Not meaningful due to the nature of the expense line-item
23
(1) For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net (loss) income, see page 16.20.
(2) Adjusted EBITDA margin (Adjusted EBITDA divided by net revenues) is not a measurement computed in accordance with generally accepted accounting principles ("GAAP") or a substitute for measures computed in accordance with GAAP and may not be comparable to similarly titled measures of other companies. We provide Adjusted EBITDA margin because we believe the measure provides a meaningful metricmeasure of operating profitability.
Operating costs and expenses for the year ended December 31, 2021 increased 3.4%, or $29.7$39.8 million to $892.4 million from $862.7 million for 2017.compared with 2019. This increase was the result of a $3.9 million increase in cost of goods sold, a $26.2$56.0 million increase in operating expenses offset by a $13.8 million decrease in COGS and comparable selling, general, and administrativea $2.5 million decrease in SG&A expense, all of which were impacted by the result of fewer operating days in 2021. Operating expenses ("SG&A"). The $3.9 millionincreased compared with 2019 despite fewer operating days due to a meaningful increase in cost of goods sold relatedthe seasonal labor rate in order to the growthrecruit employees in our food and beverage programs. Cost of goods sold,a challenging labor market, as well as higher full-time wages attributable to an increase in headcount. Seasonal labor hours declined in 2021 compared to 2019. The decrease in COGS was attributable to fewer operating days in 2021. COGS as a percentage of food, merchandise and games revenue in 2021 was comparable for both periods. Approximately half of the
Depreciation and amortization expense for 2018 increased $2.3the year ended December 31, 2021 decreased $21.7 million compared with 2019 due primarily to the prior year. The increasefull depreciation of 15-year useful lived property and equipment from our 2006 acquisition in expense was attributable to growth2021, as well as the change in capital improvements offset by the impact of changes in the estimated useful liveslife of specifica long-lived assets,asset at Kings Dominion in particular at Cedar Point and Dorney Park in the prior period.2019. The loss on impairment / retirement of fixed assets for 20182021 was $10.2$10.5 million reflecting the retirement of a specific asset in the second quarter of 2018 and the impairment of two specific assets in the third quarter of 2018. This is compared with the $12.7$4.9 million for 2019. The loss on impairment / retirement of fixed assets for 2017 reflecting a charge of $7.6 million for2021 included the impairment of the remaining land at Wildwater Kingdom, one of our separately gated outdoor water parks which ceased operations in 2016, and the impairment ofa few specific assets in the normal coursesecond half of business at several of our properties. A $0.1 million and $1.9 million gain on sale of investment was recognized for the liquidation of a preferred equity investment during the fourth quarter of 2018 and third quarter of 2017, respectively.2021.
After the items above, operating income decreased $4.7for 2021 totaled $148.3 million to $290.5 million for 2018 fromcompared with operating income of $295.2$309.4 million for 2017.2019.
Interest expense for 2018 was comparable2021 increased $83.7 million due to interest incurred on the prior year.2025 senior notes and the 2028 senior notes, both of which were issued in 2020. The net effect of our swaps resulted in a $7.4$19.0 million benefit to earnings for 2021 compared with a $16.5 million charge to earnings for 2018 compared with an immaterial impact to earnings for 2017.2019. The difference reflects changeswas attributable to the change in fair market value for these swaps. During 2018, weof our swap portfolio. We recognized a $1.1 million loss on early debt extinguishment of $5.9 million in connection with amending our 2017 Credit Agreement, as compared with a $23.1 million loss on early debt extinguishment2021 related to our refinancing ina full redemption of the first half of 2017, as described in 2024 senior notes (see Note 58 to the Consolidated Financial Statements. We). During 2021, we also recognized a $36.3$6.2 million net charge to earnings for foreign currency gains and losses in 2018 compared with a $29.1$21.1 million net benefit to earnings for 2017.2019. Both amounts primarily representedrepresent remeasurement of the U.S.-dollar denominated debt recorded at our Canadian entity from the applicable currencyU.S.-dollar to the legal entity's functional currency.
For 2018,2021, a provision for taxes of $34.7$20.0 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes on our corporate subsidiaries. This comparescompared with a provision for taxes of $42.8 million recorded for 2017 of $1.1 million.2019. The increasedecrease in tax provision in the current year relates primarily to the prior year implementation of the Tax Cuts and Jobs Act (the "Act"), whichfor taxes was signed into law on December 22, 2017. The Act included numerous changes to the tax law, including a reduction in the federal corporate income tax rate from 35% to 21%. Since our corporate subsidiaries have a March tax year end, the applicable tax rate for the tax year ended March 25, 2018 was a 31.8% blended rate that was based on the applicable statutory rates and the number of days in each period within the taxable year before and after the effective date of the change in tax rate. For tax years following March 2018, the applicable tax rate will be 21%. Also, the change in tax rate required that we remeasure deferred tax balances that are expected to be realized following enactment using the applicable tax rates. As a result of the Act, we recognized a $49.2 million deferred tax benefit and a $6.1 million current income tax benefit in 2017 compared with a $1.3 million deferred tax benefit and an $8.6 million current income tax benefit in 2018. The $1.3 million deferred tax benefit in 2018 reflects the adjustment from our 2017 provisional amounts under SAB 118 to the final impact of the Act. Cash taxes paid in 2018 were $42.2 million compared with $56.0 million in 2017 dueattributable to a decrease in pretax income from our corporatetaxable subsidiaries and the decrease in federal statutory income tax rate from the Act. For 2019, cash taxes to be paid or payable are estimated to be approximately $45 million.during 2021.
After the items above, net incomeloss for 20182021 totaled $126.7$48.5 million, or $2.23$0.86 per diluted limited partner unit, compared with net income of $215.5$172.4 million, or $3.79$3.03 per diluted unit, for 2017.2019.
For 2018,2021, Adjusted EBITDA decreased to $467.8totaled $324.6 million from $479.0compared with $504.7 million for 2017. The $11.2 million decrease in Adjusted EBITDA is a result of higher operating costs and expenses associated with labor, especially seasonal wages due to planned rate increases, operating supplies and other planned spending out-pacing revenue growth. As a result,2019. Similarly, our Adjusted EBITDA margin for 2021 decreased compared with the Adjusted EBITDA margin for 2019. The decreases in Adjusted EBITDA and Adjusted EBITDA margin were both largely due to the postponed opening of our parks for the 2021 operating season until May 2021, other COVID-19 related operating calendar changes and restrictions, as well as significantly increased labor costs in 2021 due to labor rate pressures.
In order to provide a more meaningful comparison of our key operational measures, we have provided comparable same-day statistics for attendance and in-park per capita spending. These supplemental comparisons were used by 150management for operational decisions during 2021. We believe these supplemental key operational measures provide a more meaningful measure of demand and guest spending trends on an annual basis points.
For attendance and in-park per capita spending, the comparable same-day statistics compare the results from 1,695 operating days for the year ended December 31, 2016. On a same-park basis (excluding Wildwater Kingdom, one of2021 with the Partnership's separately gated outdoor water parks which was closed after the 2016comparable 1,695 operating season),days for the year ended December 31, 20162019. The 1,695 operating days for the year ended December 31, 2021 included the 1,765 total operating days for the period less 70
24
operating days from the Schlitterbahn parks which were acquired on July 1, 2019. As a totalresult, on a comparable same-day basis, we excluded $15.4 million of 1,997in-park revenues and 0.3 million visits for the year ended December 31, 2021. We also excluded $239.0 million of in-park revenues and 5.3 million visits for the year ended December 31, 2019 to exclude the results of 2019 operating days without equivalent 2021 operating days. No adjustments otherwise were made to the daily data from either period, including no adjustments to reflect the impact of fewer operating hours within an operating day or operating restrictions in place in 2021.
Attendance for the year ended December 31, 2021 represented approximately 85% of attendance for the year ended December 31, 2019 on a comparable same-day basis driven by season pass attendance and general admission and offset by an expected slower recovery in group sales attendance. In-park per capita spending for the year ended December 31, 2021 represented approximately 127% of in-park per capita spending for the year ended December 31, 2019 on a comparable same-day basis. The increase in in-park per capita spending on a comparable same-day basis was attributable to increases in all key spending categories, particularly admission, extra-charge attractions, including front-of-line Fast Lane products, and food and beverage. Attendance and in-park per capita spending as a percentage of 2019 results on a comparable same-day basis increased from the initial opening of our parks in May 2021 through the end of the year. Due to the nature of out-of-park revenues, we are not able to produce comparable same-day statistics.
2020 vs. 2019
The results for the year ended December 31, 2020 were not directly comparable with the results for the year ended December 31, 2019 due to park closures and operating calendar changes associated with the COVID-19 pandemic. On March 14, 2020, we closed our properties in response to the spread of COVID-19. We ultimately resumed only partial operations at 10 of our 13 properties in 2020. Beginning in the second quarter of 2020, we resumed partial operations at eight properties on a staggered basis with opening dates starting in mid-June and continuing through mid-July. We also reopened operations at some of our out-of-park attractions at this time, such as hotel operations. Attendance upon reopening was impacted by the ongoing effects of the pandemic and was below original expectations. Due to these soft demand trends upon reopening, park operating calendars were adjusted for the remainder of 2020, including reduced operating days per week and operating hours within each operating day. In addition, some of our reopened parks closed earlier in 2020 than the park's pre-pandemic operating calendar. Two parks, Cedar Point and Kings Island, remained open in 2020 after Labor Day. Two additional parks, Carowinds and Kings Dominion, reopened on weekends in November and December to host abbreviated versions of their traditional WinterFest events. Following March 14, 2020, Knott's Berry Farm's partial operations were limited to culinary festivals. Net revenues from these limited operations at Knott's Berry Farm were classified as out-of-park revenues. Attendance, in-park per capita spending and operating day statistics for 2020 exclude these limited operations at Knott's Berry Farm.
As a result of the effects of the COVID-19 pandemic, the year ended December 31, 2020 included 487 operating days compared with 2,224 operating days for the year ended December 31, 2019. The following table presents key financial information and operating statistics for the years ended December 31, 20172020 and December 31, 2016:2019:
| Increase (Decrease) | ||||||||||||||||||||||||||
| December 31, 2020 | December 31, 2019 | $ | % | |||||||||||||||||||||||
| (Amounts in thousands, except for per capita spending) | ||||||||||||||||||||||||||
| Net revenues | $ | 181,555 | $ | 1,474,925 | $ | (1,293,370) | (87.7) | % | ||||||||||||||||||
| Operating costs and expenses | 483,891 | 990,716 | (506,825) | (51.2) | % | |||||||||||||||||||||
| Depreciation and amortization | 157,549 | 170,456 | (12,907) | (7.6) | % | |||||||||||||||||||||
| Loss on impairment/retirement of fixed assets, net | 8,135 | 4,931 | 3,204 | N/M | ||||||||||||||||||||||
| Loss on impairment of goodwill and other intangibles | 103,999 | — | 103,999 | N/M | ||||||||||||||||||||||
| Gain on sale of investment | (11) | (617) | 606 | N/M | ||||||||||||||||||||||
| Operating (loss) income | $ | (572,008) | $ | 309,439 | $ | (881,447) | N/M | |||||||||||||||||||
| Other Data: | ||||||||||||||||||||||||||
Adjusted EBITDA (1) | $ | (302,011) | $ | 504,673 | $ | (806,684) | N/M | |||||||||||||||||||
| Attendance | 2,595 | 27,938 | (25,343) | (90.7) | % | |||||||||||||||||||||
| In-park per capita spending | $ | 46.38 | $ | 48.32 | $ | (1.94) | (4.0) | % | ||||||||||||||||||
| Out-of-park revenues | $ | 67,375 | $ | 168,708 | $ | (101,333) | (60.1) | % | ||||||||||||||||||
| Increase (Decrease) | |||||||||||||||
| 12/31/2017 | 12/31/2016 | $ | % | ||||||||||||
| (Amounts in thousands, except for per capita spending) | |||||||||||||||
| Net revenues | $ | 1,321,967 | $ | 1,288,721 | $ | 33,246 | 2.6 | % | |||||||
| Operating costs and expenses | 862,683 | 827,319 | 35,364 | 4.3 | % | ||||||||||
| Depreciation and amortization | 153,222 | 131,876 | 21,346 | 16.2 | % | ||||||||||
| Loss on impairment/retirement of fixed assets, net | 12,728 | 12,587 | 141 | N/M | |||||||||||
| Gain on sale of investment | (1,877 | ) | — | (1,877 | ) | N/M | |||||||||
| Operating income | $ | 295,211 | $ | 316,939 | $ | (21,728 | ) | (6.9 | )% | ||||||
| N/M - Not meaningful | |||||||||||||||
| Other Data: | |||||||||||||||
Adjusted EBITDA (1) | $ | 478,977 | $ | 481,248 | $ | (2,271 | ) | (0.5 | )% | ||||||
Adjusted EBITDA margin (2) | 36.2 | % | 37.3 | % | — | (1.1 | )% | ||||||||
| Attendance | 25,723 | 25,104 | 619 | 2.5 | % | ||||||||||
| In-park per capita spending | $ | 47.30 | $ | 46.90 | $ | 0.40 | 0.9 | % | |||||||
| Out-of-park revenue | $ | 143,763 | $ | 146,137 | $ | (2,374 | ) | (1.6 | )% | ||||||
N/M Not meaningful either due to the nature of the expense line-item or due to minimal operations in 2020
(1) For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net (loss) income, see Item 6, "Selected Financial Data", on page 16.20.
Consolidated net revenues totaled $1,322.0$181.6 million for the year ended December 31, 2017, increasing $33.2 million,2020, decreasing $1.3 billion, from $1,288.7 million$1.5 billion for 2016.2019. This reflected an increasethe impact of a 25.3 million-visit decrease in both attendance, anda $1.94 decrease in in-park per capita spending. Out-of-park
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spending, and a $101.3 million decrease in out-of-park revenues, decreased $2.4 million compared with 2016.all of which were heavily impacted by the aforementioned park closures and operating calendar changes. The 619,000 visit, or 2.5%, increasedecrease in attendance was driven by higher season pass visitation andalso due to soft initial demand upon re-opening our parks in 2020. However, demand steadily increased from 20-25% of comparable 2019 attendance during WinterFest, a holiday event operating during November and December.levels upon initially reopening up to 55% of comparable 2019 attendance levels in September 2020. The increase in WinterFest attendance related primarily to three new events in 2017 held at Kings Island, Carowinds, and Worlds of Fun. The $0.40, or 0.9%, increasedecrease in in-park per capita spending was primarilythe result of less guest spending on extra-charge products, specifically front-of-line products, and admission attributable to growth in oura higher season pass mix. In-park per capita spending on food, merchandise and beverage programs, and the closure of Wildwater Kingdom.games increased compared with 2019. The $2.4 million, or 1.6%, decrease in out-of-park revenues was dueprimarily attributable to revenues receiveda decline in 2016 from Super Bowl 50 special events andaccommodations revenue related to a decrease in occupancy due to the closures of our parks, as well as a decrease in online transaction fee revenue recognized during 2017. Foreigndue to a decline in online sales volume. Net revenues were not materially impacted by foreign currency exchange rates had an immaterial impact on net revenues.rates.
Operating costs and expenses for 2017 increased 4.3%the year ended December 31, 2020 decreased 51.2%, or $35.4$506.8 million, to $862.7$483.9 million from $827.3$990.7 million for 2016. This increase2019. The decrease was the result of a $4.2$98.3 million increasedecrease in cost of goods sold,COGS, a $19.2$294.4 million increasedecrease in operating expenses, and an $11.9a $114.1 million increasedecrease in SG&A expense. The $4.2 million increasedecrease in cost of goods sold relatedCOGS was due to the growthdecline in our foodsales volume due to park closures, operating calendar changes and beverage programs, as well as higher attendance levels. Cost of goods sold, as a percentage of food, merchandise, and games revenue, was comparable for both 2017 and 2016.soft initial demand at parks that opened in 2020. The $19.2$294.4 million increasedecrease in operating expenses was primarily dueattributable to higher$167.5 million of seasonal labor costs driven by rate increases, especially in California,savings, as well as incremental labor hours especially relatedreductions in operating supplies, maintenance supplies, utilities, entertainment-related fees and insurance attributable to WinterFest.closed properties, abbreviated operating calendars and fewer offerings at our parks in 2020. In addition, full-time wages increased as a result of incremental head count and normal merit increases, as well as increased maintenance labor associated with WinterFest. Lastly, operating supply expense increaseddecreased due to incremental special and seasonal events, especially for WinterFest, and the openinga decline in anticipated payout of several large capital projects that began operationbonus plans in 2017.2020. The $11.9$114.1 million increasedecrease in SG&A expense was attributable to $57.5 million of advertising expense savings, as well as a reserve for an employment practice settlement claimreduction in transaction fee expense due to a decline in online sales volume, a decline in the anticipated payout of $4.9 million, increased marketing expense, higher merchant fees,outstanding equity-based compensation and increased technology relatedbonus plans, and 2019 acquisition-related costs. ForeignOperating costs and expenses were not materially impacted by foreign currency exchange rates had an immaterial impact on operating costs and expenses.rates.
Depreciation and amortization expense for 2017 increased $21.32020 decreased $12.9 million compared with 2016. The increase was attributable2019 primarily due to athe 2019 change in the estimated useful liveslife of specifica long-lived assets, in particularasset at Cedar Point and Dorney Park, as well as growth in capital improvements.Kings Dominion. The loss on impairment / retirement of fixed assets for 20172020 was $12.7$8.1 million reflecting a charge of $7.6compared with $4.9 million for the impairment of the remaining land at Wildwater Kingdom and the retirement of assets in the normal course of business at several of our properties. This was compared with the $12.6 million2019. The loss on impairment / retirement of fixed assets for 2016 reflecting2020 included a $2.7 million impairment charge with respect to the retirementSchlitterbahn parks' long-lived assets triggered by the effects of the COVID-19 pandemic during the first quarter of 2020 (see Note 6), as well as the impairment of two specific assets induring the normal course
first quarter of business. During2020. Similarly triggered by the anticipated effects of the COVID-19 pandemic, the loss on impairment of goodwill and other intangibles for 2020 included a $73.6 million, $6.8 million and $7.9 million impairment of goodwill at the Schlitterbahn parks, goodwill at Dorney Park, and the Schlitterbahn trade name, respectively, during the first quarter of 2020, and an $11.3 million, $2.3 million and $2.2 million impairment of goodwill at the Schlitterbahn parks, goodwill at Dorney Park, and the Schlitterbahn trade name, respectively, during the third quarter of 2017,2020 (see Note 7). During the first quarter of 2019, a $1.9$0.6 million gain on sale of investment was recognized for additional proceeds from the liquidation of a preferred equity investment.
After the items above, operating income decreased $21.7loss for 2020 totaled $572.0 million to $295.2 million for 2017 fromcompared with operating income of $316.9$309.4 million for 2016.2019.
Interest expense for 20172020 increased $1.7$50.3 million compared with 2016. The increase was attributabledue to an increaseinterest incurred on the 2025 senior notes issued in outstanding term debt.April 2020 and on the 2029 senior notes issued in June 2019. The net effect of our swaps resulted in an immaterial impacta $15.8 million charge to earnings for 20172020 compared with a $1.2$16.5 million benefitcharge to earnings for 2016.2019. The difference reflectedwas attributable to the amortization of amounts in OCI in our de-designated swap portfolio offset by changeschange in fair market value for these swaps.of our swap portfolio. We recognized a $23.1$2.3 million loss on early debt extinguishment during 2017 as a result of the April 2017 debt refinancing. Werelated to our 2020 refinancing events (see Note 8). During 2020, we also recognized a $29.1$12.2 million net benefit to earnings for foreign currency gains and losses in 2017 compared with a $14.7$21.1 million net benefit to earnings for 2016.2019. Both amounts primarily represented remeasurement of the U.S.-dollar denominated debt recorded at our Canadian entity from the applicable currencyU.S.-dollar to the legal entity's functional currency.
For 2017,2020, a provisionbenefit for taxes of $1.1$137.9 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes on our corporate subsidiaries. This compared with a provision for taxes recorded for 20162019 of $71.4$42.8 million. The decreaseincrease in tax provisionbenefit for taxes was attributable to an increase in 2017 related primarily to implementation ofpretax loss from our taxable subsidiaries, as well as expected benefits from the Tax Cuts and JobsCARES Act. The CARES Act (the "Act"), which was signed into law on December 22, 2017. The Act included numerousresulted in various changes to the U.S. tax law, including, a reduction in the federal corporate income tax rate from 35% to 21%. Since our corporate subsidiaries have a March tax year end, the applicable tax rate for the tax year ended March 25, 2018 was a 31.8% blended rate based on the applicable statutory rates and the number of days in each period within the taxable year before and after the effective date of the changeamong other things, allowing net operating losses arising in tax rate. For tax years following March 2018 through 2020 to be carried back to the applicable tax rate will be 21%.preceding five taxable years and removing the limitation that such losses only offset 80% of taxable income. As a result of these changes, we expected to recognize two benefits. First, we expected to carryback the reduction2020 losses incurred by our corporate subsidiaries, which would result in the refund of a portion of federal income taxes paid during the carryback period of approximately $55.4 million as of December 31, 2020. Second, the annual effective tax rate for 2020 included a net benefit of $18.1 million from carrying back the projected 2020 losses of the corporate subsidiaries. This tax benefit represented an estimated $34.2 million incremental benefit of tax loss carrybacks for periods when the federal income tax rate we recognizedwas greater than the current 21% rate. The estimated $34.2 million benefit was decreased by $16.1 million in 2020 for a $6.1 million current incomeprojected valuation allowance on foreign tax benefit. Also,credits originally utilized during the change in tax rate required that we remeasure deferred tax balances that arecarryback period which would be released as a result of the loss carryback but which were not expected to be realized following enactment using the applicable tax rates. As a result of this remeasurement of our net deferred tax liability, we recognized a $49.2 million deferred tax benefit. The sum of these effects was recorded as a tax benefit in the consolidated statement of operations and comprehensive income for the year ended December 31, 2017. Cash taxes paid in 2017 were $56.0 million compared with $44.5 million in 2016. The change in cash taxes related to 2016 utilization of employment and foreign tax credits.utilized.
After the items above, net incomeloss for 20172020 totaled $215.5$590.2 million, or $3.79$10.45 per diluted limited partner unit, compared with net income of $177.7$172.4 million, or $3.14$3.03 per diluted unit, for 2016.2019.
For 2017,2020, Adjusted EBITDA decreased to $479.0loss totaled $302.0 million from $481.2compared with a $504.7 million Adjusted EBITDA for 2016.2019. The $2.3 million decreasevariance in Adjusted EBITDA was due to decreased net revenues offset somewhat by expense savings attributable to park closures and operating calendar changes as a result of the COVID-19 pandemic.
26
Liquidity and Capital Resources
Our principal sources of liquidity typically include cash from operating activities, funding from our long-term debt obligations and existing cash on hand. Due to the seasonality of our business, we typically fund pre-opening operations with revolving credit borrowings. Revolving credit borrowings are typically reduced with our positive cash flow during the seasonal operating period. Our primary uses of liquidity typically include operating expenses, partnership distributions, capital expenditures, interest payments and income tax obligations.
Due to the negative effects of the COVID-19 pandemic, we took steps in 2020 to secure additional liquidity and to obtain relief from certain financial covenants including issuing $1.3 billion of senior notes, amending our term debt and revolving credit agreement, reducing operating expenses, including labor costs, suspending capital expenditures, and suspending quarterly partnership distributions. Due to limited open operations, our 2020 and first quarter 2021 liquidity needs were funded from cash on hand from the recently issued senior notes. We began generating positive cash flows from operations during the second quarter of 2021. Despite a delayed start and various operating restrictions in place for the 2021 operating season, our 2021 operating results exceeded our initial expectations, driven by higher operating costsconsumer demand driving both attendance and expenses associated with labor, marketing, merchant fees, and other planned spending out-pacing revenue growth, specifically attendance growth.in-park per capita spending. As a result, we subsequently redeemed all of our Adjusted EBITDA margin decreased by 110 basis points.
As restrictions to mitigate the spread of COVID-19 have largely been lifted and our properties have mostly been able to resume full operations, management is focused on driving profitable and sustainable growth in 2017 significantly impacted the working capital ratiobusiness, reducing the Partnership's outstanding debt, and changereinstating the quarterly Partnership distribution. We expect to invest between $200 million and $215 million in cash position. Cash and credit facilities are in place to fund current liabilities, capital expenditures partnership distributions,for the 2022 operating season, which will include the completion of several resort renovation projects, and pre-opening expensesinvestments to expand our park offerings and develop new revenue centers, and technology enhancements, such as required.cashless parks, touch-free transactions and labor management tools.
Following the issuance of $1.3 billion of senior notes in 2020 and the redemption of the 2024 senior notes in December 2021, we anticipate $150 million in annual cash interest in 2022 of which 75% of the payments occur in the second and fourth quarter. We are expecting to receive $79.7 million in tax refunds attributable to the tax year 2020 net operating loss being carried back to prior years in the United States and an additional $9.5 million in tax refunds attributable to net operating losses being carried back to prior years in Canada. We anticipate receiving these tax refunds during 2022. In 2022, we anticipate cash payments for income taxes to range from $45 million to $60 million, exclusive of these tax refunds.
Operating Activities
Net cash from operating activities in 2018 increased $19.62021 totaled $201.2 million to $350.7 million from $331.2compared with net cash for operating activities of $416.5 million in 2017. Net2020 and net cash from operating activities in 2017 decreased $27.2 million to $331.2 million from $358.3of $403.0 million in 2016.2019. The fluctuations in operating cash flowsvariance between years was largely attributable to changeslower earnings in working capital driven primarily by changes in deferred revenue and income tax payments.
Cash interest payments totaled $174.3 million in 2021 compared with $130.4 million in 2020. The increase in cash interest payments from 2020 was attributable to a full year of interest paid on the 2025 senior notes and resort properties. During 2017,2028 senior notes which were issued during 2020. Cash interest payments in 2020 increased $44.8 million compared to 2019 due to a partial year of interest paid on the 2025 senior notes in 2020 offset by less outstanding term debt in 2020 following a $463.3 million prepayment in the second quarter of 2020. Cash payments for income taxes totaled $10.1 million in 2021 compared with $1.8 million in 2020 and $40.8 million in 2019. The variance between years for cash spent onpayments for income taxes was attributable to the impact of disrupted operations in 2020, and to a lesser extent 2021.
Investing Activities
Net cash for investing activities in 2021 totaled $57.8 million, a decrease of $63.0 million compared with 2020. The decrease from 2020 was attributable to less spending in 2021 as we continued to recover from the effects of the COVID-19 pandemic. Net cash for investing activities in 2020 decreased $479.4 million compared with 2019. The decrease from 2019 was attributable to two causes. First, in 2020 and due to the effects of the COVID-19 pandemic, we reduced our capital spending by approximately $60 million from our initial capital expenditures totaled $188.1 million. During 2017, we also received $3.3 million of proceeds from the sale of a preferred equity investment in a non-public entity. During 2016, cash spent on capital expenditures totaled $160.7 million. During 2016, we also purchased identifiable intangible assets for $0.6 million.
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Table of negotiating a purchase agreement to acquire the land, which will be subject to the approval of the Successor Agency to the Redevelopment Agency of the City of Santa Clara and the Oversight Board for Successor Agency to the City of Santa Clara Redevelopment Agency and certain other conditions. We also are evaluating different options to finance the purchase.Contents
Financing Activities
Net cash utilized for financing activities in 20182021 totaled $216.6$466.4 million compared with $106.4net cash from financing activities of $730.9 million in 2017. This increase is primarily2020. The variance in net cash (for) from financing activities was due to incremental borrowings under our senior secured term loan facility under the Amended 2017 Credit Agreement in the prior year as a resultfull redemption of the 2024 senior notes in 2021 and the April 2017 refinancing.
2020 refinancing events and the issuance of the 2028 senior notes in 2020. Net cash utilizedfrom financing activities in 2020 increased $460.4 million compared with net cash for financing activities in 2017 totaled $106.4 million,2019. The increase from 2019 was primarily attributable to the net cash proceeds from the April 2020 financing events and the issuance of the 2028 senior notes in 2020 compared with $194.5 millionthe 2029 senior notes issuance in 2016. This decrease reflects incremental debt borrowings due to the April 2017 refinancing,2019. The increase from 2019 was somewhat offset by other impactsthe suspension of quarterly partnership distributions following the April 2017 refinancing including payment of debt issuance costs and early termination penalties.first quarter 2020 partnership distribution.
Contractual Obligations
As of December 31, 2018,2021, our primary contractual obligations consisted of outstanding long-term debt beforeagreements and related derivative agreements. Before reduction for debt issuance costs and original issue discount, our long-term debt agreements consisted of the following:
•$500264 million of 5.375% senior unsecuredsecured term debt, maturing in April 2024 under the 2017 Credit Agreement, as amended. The term debt bears interest at London InterBank Offering Rate ("LIBOR") plus 175 bps, under amendments we entered into on March 14, 2018. The pricing terms for the 2018 amendment reflected $0.9 million of Original Issue Discount ("OID"). Following a $463.3 million prepayment during the second quarter of 2020, we do not have any required remaining quarterly payments. Therefore, we had no current maturities as of December 31, 2021.
•$1.0 billion of 5.500% senior secured notes, maturing in April 2027,May 2025, issued at par. The 2025 senior notes and the related guarantees are secured by first-priority liens on the issuers' and the guarantors' assets that secure all the obligations under our credit facilities. Prior to April 15, 2020,May 1, 2022, up to 35% of the 2025 senior notes may be redeemed with net cash proceeds of certain equity offerings at a price equal to 105.375%105.500% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any. The 2025 senior notes may be redeemed, in whole or in part, at any time prior to May 1, 2022 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 and additional interest, if any, to the redemption date. Thereafter, the 2025 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. The 2025 senior notes pay interest semi-annually in May and November.
•$500 million of 5.375% senior unsecured notes, maturing in April 2027, issued at par. The 2027 senior notes may be redeemed, in whole or in part, at any time prior to April 15, 2022 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 and additional interest, if any, to the redemption date. Thereafter, the 2027 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. The 2027 senior notes pay interest semi-annually in April and October.
•$450300 million of 5.375%6.500% senior unsecured notes, maturing in June 2024,October 2028, issued at par. Prior to October 1, 2023, up to 35% of the 2028 senior notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 106.500% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any. The 2028 senior notes may be redeemed, in whole or in part, at any time prior to JuneOctober 1, 20192023 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 and additional interest, if any, to the redemption date. Thereafter, the 2028 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. The 2028 senior notes pay interest semi-annually in JuneApril and December.
October.•$735500 million of 5.250% senior secured term debt,unsecured notes, maturing in AprilJuly 2029, issued at par. Prior to July 15, 2022, up to 35% of the 2029 senior notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 105.250% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any. The 2029 senior notes may be redeemed, in whole or in part, at any time prior to July 15, 2024 under our Amended 2017 Credit Agreement. 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 and additional interest, if any, to the redemption date. Thereafter, the 2029 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. The term debt bears2029 senior notes pay interest at London InterBank Offering Rate ("LIBOR") plus 175 basis points (bps), under amendments we entered into on March 14, 2018. The pricing terms for the amendment reflected $0.9 million of Original Issue Discount ("OID"). The term loan amortizes $7.5 million annually. We have $5.6 million of current maturities as of December 31, 2018.
semi-annually in January and July.•No borrowings under the $275$375 million senior secured revolving credit facility under our Amended 2017 Credit Agreementcurrent credit agreement with a Canadian sub-limit of $15$15 million. $300 million. Borrowings under of the senior secured revolving credit facility bearbears interest at LIBOR plus 350 bps or Canadian Dollar Offered Rate ("CDOR") plus 200 bps. The revolving credit facility is scheduled to mature in April 2022250 bps and also provides for the issuance of documentary and standby letters of credit. The Amended 2017 Credit Agreement requires the payment of a 37.562.5 bps commitment fee per annum on the unused portion of the credit facilities.
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letters of credit are primarily in place to backstop insurance arrangements. We did not borrow on the revolving credit facility during 2021. During the year ended December 31, 2020, the maximum outstanding balance under our revolving credit facility was $60.0$140.0 million.
On December 17, 2021, we redeemed $450 million duringof 5.375% senior unsecured notes, which otherwise would have matured in June 2024, at a redemption price equal to 100.896% of the year endedprincipal amount plus accrued and unpaid interest. We further amended the 2017 Credit Agreement in December 31, 2018 and $110.0 million during2021 to allow for the year ended December 31, 2017.redemption of the 2024 senior notes.
As of December 31, 2018, we have eight interest rate swap agreements that convert $500 million of variable-rate debt to a fixed rate. Four of these agreements fix our variable-rate debt at 4.39%2021 and mature on December 31, 2020. The other four agreements fix our variable-rate debt at 4.63% for the period December 31, 2020, through December 31, 2023. As of December 31, 2017, we had four interest rate swap agreements with a notional value of $500 million that convert $500 million of variable-rate debtone-month variable rate LIBOR to a fixed rate of 4.39% and mature on2.88% through December 31, 2020.2023. This results in a 4.63% fixed interest rate for borrowings under our senior secured term loan facility after the impact of interest rate swap agreements. None of our interest rate swapsswap agreements were designated as cash flow hedges in the periods presented. As of December 31, 2018,2021 and December 31, 2020, the fair market value of our swap portfolio was a liability of $6.7 million compared with a liability of $8.7 million as of December 31, 2017. In both periods presented, the fair value of our swap portfolio was classified as long-term and recorded in "Derivative Liability". Additional detail regarding our swap arrangements is provided in Note 6 to our Consolidated Financial Statements. within the consolidated balance sheets.
The Amended 2017 Credit Agreement, includesas amended, includes: (i) a ConsolidatedSenior Secured Leverage Ratio of 4.50x Total First Lien Senior Secured Debt-to-Consolidated EBITDA starting with the first quarter of 2022, which if breachedwill step down to 4.00x in the second quarter of 2023 and which will step down further to 3.75x in the third quarter of 2023, with the covenant calculations for any reasonthe first, second, and not cured could resultthird quarters in an event2022 to include Consolidated EBITDA from the second, third and fourth quarters of default. The ratio is setthe fiscal year ended December 31, 2019 in lieu of the Consolidated EBITDA for the corresponding quarters in 2021 ("Deemed EBITDA Quarters"); (ii) a requirement that we maintain a minimum liquidity level of at a maximum of 5.50x Consolidated Total Debt-to-Consolidated EBITDA. Asleast $125 million, tested at all times, until the earlier of December 31, 2018, we2022 or the termination of the Additional Restrictions Period (which generally includes the period from the effective date of the Second Amendment until the delivery of the compliance certificate for the fourth quarter of 2022); and (iii) a suspension of certain Restricted Payments, including partnership distributions, under the credit agreement until the termination of the Additional Restrictions Period. We may terminate the Additional Restrictions Period prior to December 31, 2022 by achieving compliance with the Senior Secured Leverage Ratio covenant as of the end of a fiscal quarter without giving effect to Deemed EBITDA Quarters for any fiscal quarter. We were in compliance with thisthe applicable financial condition covenant and all other covenants under the Amended 2017 Credit Agreement.our credit agreement during 2021.
Our long-term debtfixed rate note agreements include Restricted Payment provisions.provisions, which could limit our ability to pay partnership distributions. Pursuant to the terms of the indenture governing the June 20142027 senior notes, which includes the most restrictive of these Restricted Payments provisions under our fixed rate note agreements, if our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio is greater than 5.25x, we can still make Restricted Payments of $60$100 million annually so long as no default or event of default has occurred and is continuing, and we can make additional Restricted Payments ifcontinuing. If our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio is less than or equal to 5.00x.5.25x, we can make Restricted Payments up to our Restricted Payment pool. Our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio was greater than 5.25x as of December 31, 2021.
As market conditions warrant, we may from time to time repurchase our outstanding debt securities, issued by the Partnership, in privately negotiated or open market transactions, by tender offer, exchange offer or otherwise.
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Financial and Non-Financial Disclosure About Issuers and Guarantors of our debt provisions, on October 30, 2018,Registered Senior Notes
As discussed within the Long-Term Debt footnote at Note 8, we announcedhad four tranches of fixed rate senior notes outstanding at December 31, 2021: the declaration of a distribution of $0.925 per limited partner unit, which was paid2025, 2027, 2028 and 2029 senior notes. The 2024 senior notes were fully redeemed on December 17, 2018.
The 2027, 2028 and 2029 senior notes each rank equally in right of payment with all of each issuer’s existing and future senior unsecured debt, including the other registered senior notes. However, the 2027, 2028 and 2029 senior notes rank effectively junior to our secured debt under the 2017 Credit Agreement, as amended, and the 2025 senior notes to the extent of the value of the assets securing such debt.
In the event that the co-issuers (except for Cedar Fair, L.P.) or any subsidiary guarantor is released from operationsits obligations under our senior secured credit facilities (or the 2017 Credit Agreement, as amended), such entity will also be released from its obligations under the registered senior notes. In addition, the co-issuers (except for Cedar Fair, L.P.) or any subsidiary guarantor can be released from its obligations under the 2027, 2028 and 2029 senior notes under the following circumstances, assuming the associated transactions are expectedin compliance with the applicable provisions of the indentures governing the 2027, 2028 and 2029 senior notes: i) any direct or indirect sale, conveyance or other disposition of the capital stock of such entity following which the entity ceases to be sufficienta direct or indirect subsidiary of Cedar Fair or a sale or disposition of all or substantially all of the assets of such entity; ii) if such entity is dissolved or liquidated; iii) if we designate such entity as an Unrestricted Subsidiary; iv) upon transfer of such entity in a qualifying transaction if following such transfer the entity ceases to meet working capital needs, debt service, partnership distributionsbe a direct or indirect Restricted Subsidiary of Cedar Fair or is a Restricted Subsidiary that is not a guarantor under any credit facility; or v) in the case of the subsidiary guarantors, upon a discharge of the indenture or upon any legal defeasance or covenant defeasance of the indenture.
The obligations of each guarantor are limited to the extent necessary to prevent such guarantee from constituting a fraudulent conveyance or fraudulent transfer under applicable law. This provision may not, however, protect a guarantee from being voided under fraudulent transfer law, or may reduce the applicable guarantor’s obligation to an amount that effectively makes its guarantee worthless. If a guarantee were rendered voidable, it could be subordinated by a court to all other indebtedness of the guarantor, and planned capital expenditures fordepending on the foreseeable future.amount of such indebtedness, could reduce the guarantee to zero. Each guarantor that makes a payment or distribution under a guarantee is entitled to a pro rata contribution from each other guarantor based on the respective net assets of the guarantors.
The following table summarizes certain obligations (on an undiscounted basis)tables provide summarized financial information for each of our co-issuers and guarantors of the 2024, 2027, 2028 and 2029 senior notes (the "Obligor Group"). We presented each entity that is or was a co-issuer of any series of the registered senior notes separately. The subsidiaries that guarantee the 2027, 2028 and 2029 senior notes are presented on a combined basis with intercompany balances and transactions between entities in such guarantor subsidiary group eliminated. Intercompany balances and transactions between the co-issuers and guarantor subsidiaries have not been eliminated. The subsidiaries that guaranteed the 2024 senior notes included the guarantor subsidiary group, as well as Millennium. Millennium is a co-issuer under the 2027, 2028 and 2029 senior notes and was a guarantor under the 2024 senior notes. Certain subsidiaries of Cedar Fair did not guarantee our credit facilities or senior notes as the assets and results of operations of these subsidiaries were immaterial (the "non-guarantor" subsidiaries). The summarized financial information excludes results of the non-guarantor subsidiaries and does not reflect investments of the Obligor Group in the non-guarantor subsidiaries. The Obligor Group's amounts due from, amounts due to, and transactions with the non-guarantor subsidiaries have not been eliminated and included intercompany receivables from non-guarantors of $14.0 million and $11.5 million as of December 31, 2018:2021 and December 31, 2020, respectively.
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| Payments Due by Period | |||||||||||||||||||
| (In thousands) | Total | 2019 | 2020-2021 | 2022-2023 | 2024 - Thereafter | ||||||||||||||
Long-term debt (1) | $ | 2,205,956 | $ | 87,694 | $ | 178,394 | $ | 177,325 | $ | 1,762,543 | |||||||||
Capital expenditures (2) | 82,921 | 70,828 | 12,093 | — | — | ||||||||||||||
Lease & other obligations (3) | 147,951 | 22,087 | 17,840 | 16,515 | 91,509 | ||||||||||||||
| Total | $ | 2,436,828 | $ | 180,609 | $ | 208,327 | $ | 193,840 | $ | 1,854,052 | |||||||||
| Summarized Financial Information (In thousands) | Cedar Fair L.P. (Parent) | Magnum (Co-Issuer Subsidiary) | Cedar Canada (Co-Issuer Subsidiary) | Millennium (Co-Issuer 2027, 2028 & 2029 Guarantor 2024) | Guarantor Subsidiaries (1) | |||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
| Current Assets | $ | 517 | $ | 97,221 | $ | 96,042 | $ | 572,865 | $ | 1,187,211 | ||||||||||||||||||||||||||||||||||
| Non-Current Assets | (138,126) | 1,647,952 | 540,332 | 2,368,737 | 2,145,307 | |||||||||||||||||||||||||||||||||||||||
| Current Liabilities | 410,779 | 1,331,130 | 29,050 | 227,483 | 58,949 | |||||||||||||||||||||||||||||||||||||||
| Non-Current Liabilities | 147,021 | 21,274 | 24,043 | 2,385,100 | 97,803 | |||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
| Current Assets | $ | 421 | $ | 33,985 | $ | 44,465 | $ | 464,779 | $ | 1,044,779 | ||||||||||||||||||||||||||||||||||
| Non-Current Assets | (30,651) | 995,507 | 528,281 | 2,311,502 | 1,820,745 | |||||||||||||||||||||||||||||||||||||||
| Current Liabilities | 488,799 | 573,244 | 18,235 | 200,107 | 40,412 | |||||||||||||||||||||||||||||||||||||||
| Non-Current Liabilities | 146,106 | 44,778 | 461,903 | 2,370,939 | 91,835 | |||||||||||||||||||||||||||||||||||||||
| Summarized Statement of Operations (In thousands) | Cedar Fair L.P. (Parent) | Magnum (Co-Issuer Subsidiary) | Cedar Canada (Co-Issuer Subsidiary) | Millennium (Co-Issuer 2027 & 2029 Guarantor 2024) | Guarantor Subsidiaries (1) | |||||||||||||||||||||||||||||||||||||||
| Year Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
| Net revenues | $ | 35,908 | $ | 363,340 | $ | 75,353 | $ | 1,449,022 | $ | 344,778 | ||||||||||||||||||||||||||||||||||
| Operating income (loss) | 31,808 | (156,079) | 12,545 | 136,844 | 124,405 | |||||||||||||||||||||||||||||||||||||||
| Net (loss) income | (46,741) | (34,647) | 1,967 | — | 62,586 | |||||||||||||||||||||||||||||||||||||||
| Year Ended December 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
| Net revenues | $ | — | $ | 102 | $ | 440 | $ | 510,077 | $ | 150,439 | ||||||||||||||||||||||||||||||||||
| Operating (loss) income | (198,769) | (322,420) | (37,655) | 109,688 | (121,437) | |||||||||||||||||||||||||||||||||||||||
| Net loss | (588,690) | (359,984) | (54,046) | — | (149,704) | |||||||||||||||||||||||||||||||||||||||
(1)With respect to the 2024 senior notes, if the financial information presented for Millennium was combined with that of the other guarantor subsidiaries that have been presented on a combined basis, the following additional intercompany balances and transactions between Millennium and such other guarantor entities would be eliminated: Current Assets and Current Liabilities - $13.4 million of letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of December 31, 2018. We have no2021 and $12.7 million as of December 31, 2020; Non-Current Assets - $2,254.9 million as of December 31, 2021 and $2,201.8 million as of December 31, 2020; and Net revenues - $126.6 million as of December 31, 2021 and $130.3 million as of December 31, 2020. Combined amounts for all guarantors of the 2024 senior notes for all other significant off-balance sheet financing arrangements.line items within the table would be computed by adding the amounts in the Millennium and Guarantor Subsidiaries columns.
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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 ofusing 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.
None of our interest rate swap agreements are designated as hedging instruments. Changes in fair value of derivative instruments that do not qualify for hedge accounting or were de-designated are reported as "Net effect of swaps" in the consolidated statementstatements of operations and comprehensive income. Additionally, the "Other comprehensive income (loss)" related to interest rate swaps that have been de-designated is amortized through the original maturity of the interest rate swap and reported as a component of "Net effect of swaps" in the consolidated statement of operations and comprehensive income.
As of December 31, 2018,2021, on an adjusted basis after giving effect to the impact of interest rate swap agreements, and before reduction for debt issuance costs and original issue discount, $1,450 millionall of our outstanding long-term debt represented fixed-rate debt and $235 million represented variable-rate debt. Assuming an average balance on ourexcept for revolving credit borrowings. Assuming no revolving credit borrowings, of approximately $13.2 million, a hypothetical 100 bps increase in 30-day LIBOR on our variable-rate debt (not(including term debt and not considering the impact of our interest rate swaps) would lead to an increase of approximately $7.5$2.6 million in annual cash interest costs.costs over the next twelve months.
Assuming a hypothetical 100 bps increase in 30-day LIBOR, the amount of net cash interest paid on our derivative portfolio would decrease by $5.0$2.6 million over the next year.twelve months.
A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $3.0$1.0 million decrease in annual operating income.income for the year ended December 31, 2021.
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 Act of 1933 and Section 21E of the Securities 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.correct, including the timing of any debt paydown or payment of partnership distributions, or that our growth strategies will achieve the targeted results. Important factors, including those listed under Item 1A in this Form 10-K could adversely affect our future financial performance, as well as the timing of any debt paydown or payment of partnership distributions, and our growth strategies, and cause actual results to differ materially from our expectations. In addition, the proposed purchase of the land currently leased from the City of Santa Clara is subject to the risk that we may be unable to obtain the required governmental approval, that any conditions to the purchase are not satisfied or that required approvals may not be able to be obtained on expected or acceptable terms, which could cause the parties to abandon the transaction. 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" of this Report is incorporated herein by reference.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
FINANCIAL STATEMENTS INDEX
Unaudited (In thousands, except per unit amounts) | Net revenues | Operating income (loss) | Net income (loss) | Net income (loss) per limited partner unit-basic | Net income (loss) per limited partner unit-diluted | |||||||||||||||
| 2018 | ||||||||||||||||||||
| 1st Quarter | $ | 54,727 | $ | (75,647 | ) | $ | (83,400 | ) | $ | (1.49 | ) | $ | (1.49 | ) | ||||||
| 2nd Quarter | 380,316 | 68,249 | 19,243 | 0.34 | 0.34 | |||||||||||||||
| 3rd Quarter | 663,703 | 258,572 | 213,307 | 3.79 | 3.76 | |||||||||||||||
| 4th Quarter | 249,784 | 39,345 | (22,497 | ) | (0.40 | ) | (0.40 | ) | ||||||||||||
| $ | 1,348,530 | $ | 290,519 | $ | 126,653 | 2.25 | 2.23 | |||||||||||||
| 2017 | ||||||||||||||||||||
| 1st Quarter | $ | 48,318 | $ | (75,961 | ) | $ | (64,754 | ) | $ | (1.16 | ) | $ | (1.16 | ) | ||||||
| 2nd Quarter | 392,798 | 95,313 | 31,368 | 0.56 | 0.55 | |||||||||||||||
| 3rd Quarter | 652,689 | 256,139 | 191,315 | 3.41 | 3.38 | |||||||||||||||
4th Quarter (1) | 228,162 | 19,720 | 57,547 | 1.03 | 1.01 | |||||||||||||||
| $ | 1,321,967 | $ | 295,211 | $ | 215,476 | 3.84 | 3.79 | |||||||||||||
Index for | |||||
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Unitholders and the Board of Directors of
Cedar Fair, L.P.
We have audited the accompanying consolidated balance sheets of Cedar Fair, L.P., and subsidiaries (the "Partnership") as of December 31, 20182021 and 2017,2020, the related consolidated statements of operations and comprehensive (loss) income, partners' equity (deficit), and cash flows for each of the three years in the period ended December 31, 2018,2021, and the related notes (collectively referred to as the “financial statements”). We also have audited the Partnership's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018,2021, in conformity with accounting principles generally accepted in the United StatedStates of America.
Basis for Opinions
The Partnership's management is responsible for these financial statements, for maintaining effective internal control over financial reporting.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures thatto respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinion.opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Deferred Revenues - Refer to Notes 3 and 5 to the consolidated financial statements
Critical Audit Matter Description
The Partnership defers revenue for its multi-use products, including season-long products for admissions, dining, beverages, and other products and recognizes revenues over the estimated number of uses expected for each type of product. The Partnership estimates a redemption rate for each multi-use product using historical and forecasted uses at each park. Revenue is then recognized on a pro-rated basis based on the estimated allocated selling price of the multi-use product and the estimated uses of that product. During the third quarter of 2021, management began selling multi-use products for the 2022 operating season. These products include providing the customer park access for the remainder of the 2021 operating season. In addition, during the first and second quarters of 2021, the validity of certain multi-use products for two parks purchased for the 2020 and 2021 operating seasons were extended into the 2022 operating season. Deferred revenue as of December 31, 2021 was $187.6 million.
Auditing the amount of deferred revenue associated with the multi-use products that should be recognized in each fiscal year required a high degree of auditor judgment and increased extent of effort.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the estimated park use projections and the recognition of revenue from deferred revenue included the following, among others:
•We tested the effectiveness of controls over revenue recognition related to multi-use products.
•We tested the completeness and accuracy of the year end deferred revenue balance.
•We evaluated the reasonableness of the year-over-year change in deferred revenue.
•We tested whether revenue relating to the current fiscal year was appropriately recognized.
/s/ DELOITTE & TOUCHE LLP
Cleveland, Ohio
February 22, 201918, 2022
We have served as the Partnership’s auditor since 2004.
35
CEDAR FAIR, L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, 2021 | December 31, 2020 | |||||||||||||
| ASSETS | ||||||||||||||
| Current Assets: | ||||||||||||||
| Cash and cash equivalents | $ | 61,119 | $ | 376,736 | ||||||||||
| Receivables | 62,109 | 34,445 | ||||||||||||
| Inventories | 32,113 | 47,479 | ||||||||||||
| Current income tax receivable | 84,051 | 69,104 | ||||||||||||
| Other current assets | 24,249 | 26,747 | ||||||||||||
| 263,641 | 554,511 | |||||||||||||
| Property and Equipment: | ||||||||||||||
| Land | 443,190 | 442,708 | ||||||||||||
| Land improvements | 486,014 | 467,176 | ||||||||||||
| Buildings | 855,297 | 849,404 | ||||||||||||
| Rides and equipment | 1,986,235 | 1,962,324 | ||||||||||||
| Construction in progress | 57,666 | 75,507 | ||||||||||||
| 3,828,402 | 3,797,119 | |||||||||||||
| Less accumulated depreciation | (2,117,659) | (1,995,138) | ||||||||||||
| 1,710,743 | 1,801,981 | |||||||||||||
| Goodwill | 267,232 | 266,961 | ||||||||||||
| Other Intangibles, net | 49,994 | 50,288 | ||||||||||||
| Right-of-Use Asset | 16,294 | 13,527 | ||||||||||||
| Other Assets | 5,116 | 6,144 | ||||||||||||
| $ | 2,313,020 | $ | 2,693,412 | |||||||||||
| LIABILITIES AND PARTNERS’ EQUITY | ||||||||||||||
| Current Liabilities: | ||||||||||||||
| Accounts payable | $ | 53,912 | $ | 14,272 | ||||||||||
| Deferred revenue | 187,599 | 183,354 | ||||||||||||
| Accrued interest | 32,011 | 33,718 | ||||||||||||
| Accrued taxes | 9,075 | 10,775 | ||||||||||||
| Accrued salaries, wages and benefits | 53,833 | 24,975 | ||||||||||||
| Self-insurance reserves | 24,573 | 22,322 | ||||||||||||
| Other accrued liabilities | 20,511 | 10,565 | ||||||||||||
| 381,514 | 299,981 | |||||||||||||
| Deferred Tax Liability | 66,483 | 39,595 | ||||||||||||
| Derivative Liability | 20,086 | 39,086 | ||||||||||||
| Lease Liability | 13,345 | 10,483 | ||||||||||||
| Other Liabilities | 11,144 | 16,460 | ||||||||||||
| Long-Term Debt: | ||||||||||||||
| Term debt | 258,391 | 255,025 | ||||||||||||
| Notes | 2,260,545 | 2,699,219 | ||||||||||||
| 2,518,936 | 2,954,244 | |||||||||||||
| Partners’ Deficit: | ||||||||||||||
| Special L.P. interests | 5,290 | 5,290 | ||||||||||||
| General partner | (7) | (7) | ||||||||||||
| Limited partners, 56,854 and 56,706 units outstanding as of December 31, 2021 and December 31, 2020, respectively | (712,714) | (674,319) | ||||||||||||
| Accumulated other comprehensive income | 8,943 | 2,599 | ||||||||||||
| (698,488) | (666,437) | |||||||||||||
| $ | 2,313,020 | $ | 2,693,412 | |||||||||||
| December 31, 2018 | December 31, 2017 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 105,349 | $ | 166,245 | ||||
| Receivables | 51,518 | 37,722 | ||||||
| Inventories | 30,753 | 29,719 | ||||||
| Other current assets | 12,589 | 13,297 | ||||||
| 200,209 | 246,983 | |||||||
| Property and Equipment: | ||||||||
| Land | 268,411 | 271,021 | ||||||
| Land improvements | 434,501 | 421,593 | ||||||
| Buildings | 732,666 | 693,899 | ||||||
| Rides and equipment | 1,813,489 | 1,740,653 | ||||||
| Construction in progress | 77,716 | 72,847 | ||||||
| 3,326,783 | 3,200,013 | |||||||
| Less accumulated depreciation | (1,727,345 | ) | (1,614,241 | ) | ||||
| 1,599,438 | 1,585,772 | |||||||
| Goodwill | 178,719 | 183,830 | ||||||
| Other Intangibles, net | 36,376 | 38,064 | ||||||
| Other Assets | 9,441 | 9,510 | ||||||
| $ | 2,024,183 | $ | 2,064,159 | |||||
| LIABILITIES AND PARTNERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Current maturities of long-term debt | $ | 5,625 | $ | — | ||||
| Accounts payable | 23,314 | 24,621 | ||||||
| Deferred revenue | 107,074 | 86,131 | ||||||
| Accrued interest | 7,927 | 8,124 | ||||||
| Accrued taxes | 29,591 | 43,975 | ||||||
| Accrued salaries, wages and benefits | 18,786 | 18,740 | ||||||
| Self-insurance reserves | 24,021 | 25,107 | ||||||
| Other accrued liabilities | 18,381 | 18,796 | ||||||
| 234,719 | 225,494 | |||||||
| Deferred Tax Liability | 81,717 | 74,798 | ||||||
| Derivative Liability | 6,705 | 8,722 | ||||||
| Other Liabilities | 11,058 | 11,684 | ||||||
| Long-Term Debt: | ||||||||
| Term debt | 719,507 | 723,788 | ||||||
| Notes | 938,061 | 936,727 | ||||||
| 1,657,568 | 1,660,515 | |||||||
Commitments and Contingencies (Note 10) | ||||||||
| Partners’ Equity: | ||||||||
| Special L.P. interests | 5,290 | 5,290 | ||||||
| General partner | (1 | ) | — | |||||
| Limited partners, 56,564 and 56,359 units outstanding at December 31, 2018 and December 31, 2017, respectively | 5,845 | 81,589 | ||||||
| Accumulated other comprehensive income (loss) | 21,282 | (3,933 | ) | |||||
| 32,416 | 82,946 | |||||||
| $ | 2,024,183 | $ | 2,064,159 | |||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
36
CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(In thousands, except per unit amounts)
| Years Ended December 31, | ||||||||||||||||||||
| 2021 | 2020 | 2019 | ||||||||||||||||||
| Net revenues: | ||||||||||||||||||||
| Admissions | $ | 674,799 | $ | 67,852 | $ | 795,271 | ||||||||||||||
| Food, merchandise and games | 432,513 | 76,921 | 473,499 | |||||||||||||||||
| Accommodations, extra-charge products and other | 230,907 | 36,782 | 206,155 | |||||||||||||||||
| 1,338,219 | 181,555 | 1,474,925 | ||||||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Cost of food, merchandise and games revenues | 112,466 | 27,991 | 126,264 | |||||||||||||||||
| Operating expenses | 698,242 | 347,782 | 642,200 | |||||||||||||||||
| Selling, general and administrative | 219,758 | 108,118 | 222,252 | |||||||||||||||||
| Depreciation and amortization | 148,803 | 157,549 | 170,456 | |||||||||||||||||
| Loss on impairment / retirement of fixed assets, net | 10,486 | 8,135 | 4,931 | |||||||||||||||||
| Loss on impairment of goodwill and other intangibles | — | 103,999 | — | |||||||||||||||||
| Loss (gain) on other assets | 129 | (11) | (617) | |||||||||||||||||
| 1,189,884 | 753,563 | 1,165,486 | ||||||||||||||||||
| Operating income (loss) | 148,335 | (572,008) | 309,439 | |||||||||||||||||
| Interest expense | 184,032 | 150,669 | 100,364 | |||||||||||||||||
| Net effect of swaps | (19,000) | 15,849 | 16,532 | |||||||||||||||||
| Loss on early debt extinguishment | 5,909 | 2,262 | — | |||||||||||||||||
| Loss (gain) on foreign currency | 6,177 | (12,183) | (21,107) | |||||||||||||||||
| Other income | (300) | (447) | (1,504) | |||||||||||||||||
| (Loss) income before taxes | (28,483) | (728,158) | 215,154 | |||||||||||||||||
| Provision (benefit) for taxes | 20,035 | (137,915) | 42,789 | |||||||||||||||||
| Net (loss) income | (48,518) | (590,243) | 172,365 | |||||||||||||||||
| Net (loss) income allocated to general partner | — | (6) | 2 | |||||||||||||||||
| Net (loss) income allocated to limited partners | $ | (48,518) | $ | (590,237) | $ | 172,363 | ||||||||||||||
| Net (loss) income | $ | (48,518) | $ | (590,243) | $ | 172,365 | ||||||||||||||
| Other comprehensive income (loss), (net of tax): | ||||||||||||||||||||
| Foreign currency translation | 6,344 | (7,147) | (11,536) | |||||||||||||||||
| Other comprehensive income (loss), (net of tax) | 6,344 | (7,147) | (11,536) | |||||||||||||||||
| Total comprehensive (loss) income | $ | (42,174) | $ | (597,390) | $ | 160,829 | ||||||||||||||
| Basic (loss) income per limited partner unit: | ||||||||||||||||||||
| Weighted average limited partner units outstanding | 56,610 | 56,476 | 56,349 | |||||||||||||||||
| Net (loss) income per limited partner unit | $ | (0.86) | $ | (10.45) | $ | 3.06 | ||||||||||||||
| Diluted (loss) income per limited partner unit: | ||||||||||||||||||||
| Weighted average limited partner units outstanding | 56,610 | 56,476 | 56,921 | |||||||||||||||||
| Net (loss) income per limited partner unit | $ | (0.86) | $ | (10.45) | $ | 3.03 | ||||||||||||||
| Years Ended December 31, | ||||||||||||
| 2018 | 2017 | 2016 | ||||||||||
| Net revenues: | ||||||||||||
| Admissions | $ | 737,676 | $ | 734,060 | $ | 716,189 | ||||||
| Food, merchandise and games | 433,315 | 422,469 | 407,673 | |||||||||
| Accommodations, extra-charge products and other | 177,539 | 165,438 | 164,859 | |||||||||
| 1,348,530 | 1,321,967 | 1,288,721 | ||||||||||
| Costs and expenses: | ||||||||||||
| Cost of food, merchandise and games revenues | 114,733 | 110,811 | 106,608 | |||||||||
| Operating expenses | 584,350 | 558,102 | 538,881 | |||||||||
| Selling, general and administrative | 193,333 | 193,770 | 181,830 | |||||||||
| Depreciation and amortization | 155,529 | 153,222 | 131,876 | |||||||||
| Loss on impairment / retirement of fixed assets, net | 10,178 | 12,728 | 12,587 | |||||||||
| Gain on sale of investment | (112 | ) | (1,877 | ) | — | |||||||
| 1,058,011 | 1,026,756 | 971,782 | ||||||||||
| Operating income | 290,519 | 295,211 | 316,939 | |||||||||
| Interest expense | 85,687 | 85,603 | 83,863 | |||||||||
| Net effect of swaps | 7,442 | (45 | ) | (1,197 | ) | |||||||
| Loss on early debt extinguishment | 1,073 | 23,121 | — | |||||||||
| (Gain) loss on foreign currency | 36,254 | (29,086 | ) | (14,656 | ) | |||||||
| Other income | (1,333 | ) | (970 | ) | (177 | ) | ||||||
| Income before taxes | 161,396 | 216,588 | 249,106 | |||||||||
| Provision for taxes | 34,743 | 1,112 | 71,418 | |||||||||
| Net income | 126,653 | 215,476 | 177,688 | |||||||||
| Net income allocated to general partner | 1 | 2 | 2 | |||||||||
| Net income allocated to limited partners | $ | 126,652 | $ | 215,474 | $ | 177,686 | ||||||
| Net income | $ | 126,653 | $ | 215,476 | $ | 177,688 | ||||||
| Other comprehensive income (loss), (net of tax): | ||||||||||||
| Foreign currency translation adjustment | 17,240 | (14,849 | ) | (3,700 | ) | |||||||
| Cash flow hedging derivative activity | 8,366 | 7,975 | 3,350 | |||||||||
| Other comprehensive income (loss), (net of tax) | 25,606 | (6,874 | ) | (350 | ) | |||||||
| Total comprehensive income | $ | 152,259 | $ | 208,602 | $ | 177,338 | ||||||
| Basic earnings per limited partner unit: | ||||||||||||
| Weighted average limited partner units outstanding | 56,212 | 56,061 | 55,933 | |||||||||
| Net income per limited partner unit | $ | 2.25 | $ | 3.84 | $ | 3.18 | ||||||
| Diluted earnings per limited partner unit: | ||||||||||||
| Weighted average limited partner units outstanding | 56,860 | 56,800 | 56,562 | |||||||||
| Net income per limited partner unit | $ | 2.23 | $ | 3.79 | $ | 3.14 | ||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
37
CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY (DEFICIT)
(In thousands, except per unit amounts)
| Limited Partnership Units Outstanding | Limited Partners’ Equity | General Partner’s Equity | Special L.P. Interests | Accumulated Other Comprehensive Income (Loss) | Total Partners’ Equity | |||||||||||||||||
| Balance as of December 31, 2015 | 56,018 | $ | 48,428 | $ | — | $ | 5,290 | $ | 3,291 | $ | 57,009 | |||||||||||
| Net income | 177,686 | 2 | 177,688 | |||||||||||||||||||
| Partnership distribution declared ($3.330) | (187,180 | ) | (2 | ) | (187,182 | ) | ||||||||||||||||
| Issuance of limited partnership units related to compensation | 183 | 13,776 | 13,776 | |||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | (422 | ) | (422 | ) | ||||||||||||||||||
| Foreign currency translation adjustment, net of tax $2,127 | (3,700 | ) | (3,700 | ) | ||||||||||||||||||
| Cash flow hedging derivative activity, net of tax ($650) | 3,350 | 3,350 | ||||||||||||||||||||
| Balance as of December 31, 2016 | 56,201 | $ | 52,288 | $ | — | $ | 5,290 | $ | 2,941 | $ | 60,519 | |||||||||||
| Net income | 215,474 | 2 | 215,476 | |||||||||||||||||||
| Partnership distribution declared ($3.455) | (194,754 | ) | (2 | ) | (194,756 | ) | ||||||||||||||||
| Issuance of limited partnership units related to compensation | 158 | 13,021 | 13,021 | |||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | (4,440 | ) | (4,440 | ) | ||||||||||||||||||
| Foreign currency translation adjustment, net of tax ($4,330) | (14,849 | ) | (14,849 | ) | ||||||||||||||||||
| Cash flow hedging derivative activity, net of tax ($1,484) | 7,975 | 7,975 | ||||||||||||||||||||
| Balance as of December 31, 2017 | 56,359 | $ | 81,589 | $ | — | $ | 5,290 | $ | (3,933 | ) | $ | 82,946 | ||||||||||
| Net income | 126,652 | 1 | 126,653 | |||||||||||||||||||
| Partnership distribution declared ($3.595) | (203,197 | ) | (2 | ) | (203,199 | ) | ||||||||||||||||
| Issuance of limited partnership units related to compensation | 205 | 2,940 | 2,940 | |||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | (2,530 | ) | (2,530 | ) | ||||||||||||||||||
| Foreign currency translation adjustment, net of tax $3,862 | 17,240 | 17,240 | ||||||||||||||||||||
| Cash flow hedging derivative activity, net of tax ($1,094) | 8,366 | 8,366 | ||||||||||||||||||||
| Reclassification of stranded tax effect | 391 | (391 | ) | — | ||||||||||||||||||
| Balance as of December 31, 2018 | 56,564 | $ | 5,845 | $ | (1 | ) | $ | 5,290 | $ | 21,282 | $ | 32,416 | ||||||||||
| Limited Partnership Units Outstanding | Limited Partners’ Equity | General Partner’s Equity | Special L.P. Interests | Accumulated Other Comprehensive Income (Loss) | Total Partners’ Equity (Deficit) | ||||||||||||||||||||||||||||||
| Balance as of December 31, 2018 | 56,564 | $ | 5,845 | $ | (1) | $ | 5,290 | $ | 21,282 | $ | 32,416 | ||||||||||||||||||||||||
| Net income | — | 172,363 | 2 | — | — | 172,365 | |||||||||||||||||||||||||||||
| Partnership distribution declared ($3.710 per unit) | — | (210,009) | (2) | — | — | (210,011) | |||||||||||||||||||||||||||||
| Issuance of limited partnership units related to compensation | 102 | 8,183 | — | — | — | 8,183 | |||||||||||||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | — | (1,383) | — | — | — | (1,383) | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment, net of tax $(2,161) | — | — | — | — | (11,536) | (11,536) | |||||||||||||||||||||||||||||
| Balance as of December 31, 2019 | 56,666 | $ | (25,001) | $ | (1) | $ | 5,290 | $ | 9,746 | $ | (9,966) | ||||||||||||||||||||||||
| Net loss | — | (590,237) | (6) | — | — | (590,243) | |||||||||||||||||||||||||||||
| Partnership distribution declared ($0.935 per unit) | — | (53,020) | — | — | — | (53,020) | |||||||||||||||||||||||||||||
| Issuance of limited partnership units related to compensation | 40 | (4,721) | — | — | — | (4,721) | |||||||||||||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | — | (1,490) | — | — | — | (1,490) | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment, net of tax $(546) | — | — | — | — | (7,147) | (7,147) | |||||||||||||||||||||||||||||
| Other | — | 150 | — | — | — | 150 | |||||||||||||||||||||||||||||
| Balance as of December 31, 2020 | 56,706 | $ | (674,319) | $ | (7) | $ | 5,290 | $ | 2,599 | $ | (666,437) | ||||||||||||||||||||||||
| Net loss | — | (48,518) | — | — | — | (48,518) | |||||||||||||||||||||||||||||
| Issuance of limited partnership units related to compensation | 148 | 11,050 | — | — | — | 11,050 | |||||||||||||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | — | (927) | — | — | — | (927) | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment, net of tax $(154) | — | — | — | — | 6,344 | 6,344 | |||||||||||||||||||||||||||||
| Balance as of December 31, 2021 | 56,854 | $ | (712,714) | $ | (7) | $ | 5,290 | $ | 8,943 | $ | (698,488) | ||||||||||||||||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
38
CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Years Ended December 31, | ||||||||||||||||||||||||||||||||
| Years Ended December 31, | 2021 | 2020 | 2019 | |||||||||||||||||||||||||||||
| 2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||||||||||||||||
| Net income | $ | 126,653 | $ | 215,476 | $ | 177,688 | ||||||||||||||||||||||||||
| Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||||||||||||||||||||||
| CASH FLOWS FROM (FOR) OPERATING ACTIVITIES | CASH FLOWS FROM (FOR) OPERATING ACTIVITIES | |||||||||||||||||||||||||||||||
| Net (loss) income | Net (loss) income | $ | (48,518) | $ | (590,243) | $ | 172,365 | |||||||||||||||||||||||||
| Adjustments to reconcile net (loss) income to net cash from (for) operating activities: | Adjustments to reconcile net (loss) income to net cash from (for) operating activities: | |||||||||||||||||||||||||||||||
| Depreciation and amortization | 155,529 | 153,222 | 131,876 | Depreciation and amortization | 148,803 | 157,549 | 170,456 | |||||||||||||||||||||||||
| Loss on early debt extinguishment | 1,073 | 23,121 | — | Loss on early debt extinguishment | 5,909 | 2,262 | — | |||||||||||||||||||||||||
| Non-cash foreign currency (gain) loss on debt | 37,724 | (30,912 | ) | (14,771 | ) | |||||||||||||||||||||||||||
| Non-cash equity based compensation expense | 11,243 | 13,434 | 11,878 | |||||||||||||||||||||||||||||
| Loss on impairment of goodwill and other intangibles | Loss on impairment of goodwill and other intangibles | — | 103,999 | — | ||||||||||||||||||||||||||||
| Non-cash foreign currency loss (gain) on debt | Non-cash foreign currency loss (gain) on debt | 5,986 | (9,344) | (22,307) | ||||||||||||||||||||||||||||
| Non-cash equity-based compensation expense | Non-cash equity-based compensation expense | 15,431 | (209) | 11,910 | ||||||||||||||||||||||||||||
| Non-cash deferred income tax expense (benefit) | 11,259 | (35,770 | ) | 10,662 | Non-cash deferred income tax expense (benefit) | 26,888 | (41,933) | (4,106) | ||||||||||||||||||||||||
| Net effect of swaps | Net effect of swaps | (19,000) | 15,849 | 16,532 | ||||||||||||||||||||||||||||
| Other non-cash expenses | 16,146 | 13,516 | 13,300 | Other non-cash expenses | 21,005 | 14,547 | 7,928 | |||||||||||||||||||||||||
| Change in operating assets and liabilities: | Change in operating assets and liabilities: | |||||||||||||||||||||||||||||||
| (Increase) decrease in receivables | (13,975 | ) | (2,195 | ) | (5,887 | ) | (Increase) decrease in receivables | (27,651) | 28,729 | (8,166) | ||||||||||||||||||||||
| (Increase) decrease in inventories | (1,203 | ) | (3,332 | ) | (1,208 | ) | (Increase) decrease in inventories | 15,384 | (14,499) | (211) | ||||||||||||||||||||||
| (Increase) decrease in tax receivable | (Increase) decrease in tax receivable | (16,602) | (97,488) | 8,547 | ||||||||||||||||||||||||||||
| (Increase) decrease in other assets | 148 | (40 | ) | (53 | ) | (Increase) decrease in other assets | 1,928 | (12,180) | (5,221) | |||||||||||||||||||||||
| Increase (decrease) in accounts payable | 549 | 1,906 | (407 | ) | Increase (decrease) in accounts payable | 34,515 | (9,917) | (1,107) | ||||||||||||||||||||||||
| Increase (decrease) in deferred revenue | 21,564 | 2,964 | 13,099 | Increase (decrease) in deferred revenue | 3,622 | 31,160 | 36,920 | |||||||||||||||||||||||||
| Increase (decrease) in accrued interest | (25 | ) | (2,002 | ) | 13 | Increase (decrease) in accrued interest | (1,711) | 12,235 | 13,414 | |||||||||||||||||||||||
| Increase (decrease) in accrued taxes | (13,842 | ) | (15,398 | ) | 16,888 | |||||||||||||||||||||||||||
| Increase (decrease) in accrued salaries and wages | 149 | (8,004 | ) | 5,804 | ||||||||||||||||||||||||||||
| Increase (decrease) in self-insurance reserves | (959 | ) | (2,055 | ) | 3,026 | |||||||||||||||||||||||||||
| Increase (decrease) in accrued salaries, wages and benefits | Increase (decrease) in accrued salaries, wages and benefits | 28,850 | (4,609) | 10,674 | ||||||||||||||||||||||||||||
| Increase (decrease) in other liabilities | (1,293 | ) | 7,248 | (3,561 | ) | Increase (decrease) in other liabilities | 6,387 | (2,445) | (4,587) | |||||||||||||||||||||||
| Net cash from operating activities | 350,740 | 331,179 | 358,347 | |||||||||||||||||||||||||||||
| Net cash from (for) operating activities | Net cash from (for) operating activities | 201,226 | (416,537) | 403,041 | ||||||||||||||||||||||||||||
| CASH FLOWS FOR INVESTING ACTIVITIES | CASH FLOWS FOR INVESTING ACTIVITIES | |||||||||||||||||||||||||||||||
| Capital expenditures | (189,775 | ) | (188,084 | ) | (160,656 | ) | Capital expenditures | (59,183) | (129,087) | (330,662) | ||||||||||||||||||||||
| Sale of preferred equity investment | 112 | 3,281 | — | |||||||||||||||||||||||||||||
| Purchase of identifiable intangible assets | (41 | ) | (66 | ) | (577 | ) | ||||||||||||||||||||||||||
| Acquisitions, net of cash acquired | Acquisitions, net of cash acquired | — | — | (270,171) | ||||||||||||||||||||||||||||
| Proceeds from sale of other assets | Proceeds from sale of other assets | 1,405 | 8,266 | 617 | ||||||||||||||||||||||||||||
| Net cash for investing activities | (189,704 | ) | (184,869 | ) | (161,233 | ) | Net cash for investing activities | (57,778) | (120,821) | (600,216) | ||||||||||||||||||||||
| CASH FLOWS FOR FINANCING ACTIVITIES | ||||||||||||||||||||||||||||||||
| Term debt borrowings | — | 750,000 | — | |||||||||||||||||||||||||||||
| CASH FLOWS (FOR) FROM FINANCING ACTIVITIES | CASH FLOWS (FOR) FROM FINANCING ACTIVITIES | |||||||||||||||||||||||||||||||
| Note borrowings | — | 500,000 | — | Note borrowings | — | 1,300,000 | 500,000 | |||||||||||||||||||||||||
| Term debt payments | — | (617,850 | ) | (6,000 | ) | Term debt payments | — | (465,125) | (5,625) | |||||||||||||||||||||||
| Note payments, including amounts paid for early termination | — | (515,458 | ) | — | Note payments, including amounts paid for early termination | (460,755) | — | — | ||||||||||||||||||||||||
| Distributions paid to partners | (203,199 | ) | (194,756 | ) | (187,182 | ) | Distributions paid to partners | — | (53,020) | (210,011) | ||||||||||||||||||||||
| Payment of debt issuance costs and original issue discount | (2,543 | ) | (19,809 | ) | — | Payment of debt issuance costs and original issue discount | (367) | (46,849) | (8,262) | |||||||||||||||||||||||
| Exercise of limited partnership unit options | 125 | 65 | — | |||||||||||||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | (2,530 | ) | (4,440 | ) | (422 | ) | ||||||||||||||||||||||||||
| Payments related to tax withholding for equity compensation | (8,428 | ) | (4,173 | ) | (920 | ) | Payments related to tax withholding for equity compensation | (4,652) | (4,624) | (4,250) | ||||||||||||||||||||||
| Net cash for financing activities | (216,575 | ) | (106,421 | ) | (194,524 | ) | ||||||||||||||||||||||||||
| Other | Other | (659) | 468 | (1,383) | ||||||||||||||||||||||||||||
| Net cash (for) from financing activities | Net cash (for) from financing activities | (466,433) | 730,850 | 270,469 | ||||||||||||||||||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | (5,357 | ) | 3,640 | 569 | EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 7,368 | 992 | 3,609 | ||||||||||||||||||||||||
| Net increase (decrease) for the year | (60,896 | ) | 43,529 | 3,159 | ||||||||||||||||||||||||||||
| Net (decrease) increase for the year | Net (decrease) increase for the year | (315,617) | 194,484 | 76,903 | ||||||||||||||||||||||||||||
| Balance, beginning of year | 166,245 | 122,716 | 119,557 | Balance, beginning of year | 376,736 | 182,252 | 105,349 | |||||||||||||||||||||||||
| Balance, end of year | $ | 105,349 | $ | 166,245 | $ | 122,716 | Balance, end of year | $ | 61,119 | $ | 376,736 | $ | 182,252 | |||||||||||||||||||
| SUPPLEMENTAL INFORMATION | SUPPLEMENTAL INFORMATION | |||||||||||||||||||||||||||||||
| Net cash payments for interest expense | $ | 84,947 | $ | 85,975 | $ | 82,015 | ||||||||||||||||||||||||||
| Cash payments for interest | Cash payments for interest | $ | 174,253 | $ | 130,444 | $ | 85,596 | |||||||||||||||||||||||||
| Interest capitalized | 2,864 | 2,524 | 2,331 | Interest capitalized | 1,741 | 2,653 | 3,001 | |||||||||||||||||||||||||
| Cash payments for income taxes, net of refunds | 42,159 | 55,989 | 44,502 | Cash payments for income taxes, net of refunds | 10,054 | 1,792 | 40,793 | |||||||||||||||||||||||||
| Capital expenditures in accounts payable | 5,083 | 5,365 | 5,425 | Capital expenditures in accounts payable | 7,368 | 3,286 | 9,073 | |||||||||||||||||||||||||
The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
39
CEDAR FAIR, L.P.
INDEX FOR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
40
CEDAR FAIR, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Impact of COVID-19 Pandemic:
The novel coronavirus (COVID-19) pandemic had a material impact on our business in 2020, had a continuing negative impact in 2021 and may have a longer-term negative effect. On March 14, 2020, we closed our properties in response to the spread of COVID-19 and local government mandates. We ultimately resumed only partial operations at 10 of our 13 properties in 2020. Due to soft demand trends upon reopening in 2020, park operating calendars were adjusted, including reduced operating days per week and operating hours within each operating day and earlier closure of certain parks than a typical operating year. Following March 14, 2020, Knott's Berry Farm's partial operations in 2020 were limited to culinary festivals.
In May 2021, we opened all of our U.S. properties for the 2021 operating season on a staggered basis with capacity restrictions, guest reservations, and other operating protocols in place. Our 2021 operating calendars were designed to align with anticipated capacity restrictions, guest demand and labor availability, including fewer operating days in July and August at some of our smaller properties and additional operating days in September and the fourth quarter at most of our properties. As vaccination distribution efforts continued during the second quarter of 2021 and we were able to hire additional labor, we removed most capacity restrictions, guest reservation requirements and other protocols at our U.S. properties beginning in July 2021. We were also able to open our Canadian property, Canada's Wonderland, in July 2021. Canada's Wonderland operated with capacity restrictions, guest reservations, and other operating protocols in place throughout 2021.
Despite a delayed start and various operating restrictions in place for the 2021 operating season, our 2021 operating results exceeded our initial expectations, driven by greater consumer demand resulting in higher attendance and in-park per capita spending. As a result, we made progress towards our goal to reduce outstanding debt by redeeming $450 million of unsecured senior notes in December 2021. The notes redeemed were previously due in 2024.
Management has made significant estimates and assumptions to determine our liquidity requirements and estimate the impact of the COVID-19 pandemic on our business, including financial results in the near and long-term. Actual results could materially differ from these estimates depending on the ultimate extent of the effects of the COVID-19 pandemic. Our future operations are dependent on factors beyond our knowledge or control, including the duration and severity of the COVID-19 pandemic and actions taken to contain its spread and mitigate its public health effects.
(2) Partnership Organization:
Cedar Fair, L.P. (together with its affiliated companies, the "Partnership") is a Delaware limited partnership that commenced operations in 1983 when it acquired Cedar Point, Inc., and became a publicly traded partnership in 1987. The Partnership's general partner is Cedar Fair Management, Inc., an Ohio corporation (the “General Partner”), whose shares are held by an Ohio trust. The General Partner owns a 0.001% interest in the Partnership's income, losses and cash distributions, except in defined circumstances, and has full responsibility for management of the Partnership. As of December 31, 2018,2021, there were 56,563,93356,854,214 outstanding limited partnership units listed on The New York Stock Exchange, net of 498,050207,769 units held in treasury. As of December 31, 2017,2020, there were 56,358,79256,706,338 outstanding limited partnership units listed, net of 703,191355,645 units held in treasury.
The General Partner may, with the approval of a specified percentage of the limited partners, make additional capital contributions to the Partnership, but is only obligated to do so if the liabilities of the Partnership cannot otherwise be paid or there exists a negative balance in its capital account at the time of its withdrawal from the Partnership. The General Partner, in accordance with the terms of the Partnership Agreement, is required to make regular cash distributions on a quarterly basis of all the Partnership's available cash, as defined in the Partnership Agreement. InFollowing the closure of our parks in March 2020 in response to COVID-19 health recommendations, the Board of Directors suspended quarterly partnership distributions to maintain flexibility and additional liquidity. The Board of Directors is committed to reinstitute quarterly partnership distributions in accordance with the Partnership Agreement when it is appropriate to do so, and restrictions withinit is permissible under the Partnership's Amended 2017 Credit Agreement, as amended, and prior credit agreements, the General Partner paid $3.595 per limited partner unit in distributions, or approximately $203.2 million in aggregate, in 2018.our other debt covenants.
Principles of Consolidation
The consolidated financial statements include the accounts of the Partnership and its subsidiaries, all of which are wholly owned.owned or the Partnership is the primary beneficiary. Intercompany transactions and balances are eliminated in consolidation.
Foreign Currency
The U.S. dollar is theour reporting currency for the Partnership and the functional currency for the majoritymost of the Partnership'sour operations. The financial statements of the Partnership'sour Canadian subsidiary are measured using the Canadian dollar as its functional currency. Assets and liabilities are translated into U.S. dollars at the appropriate spot rates as of the balance sheet date, while income and expenses are translated at average monthly exchange rates. Translation gains and losses are included as components of accumulated other comprehensive (loss) income in partners' equity.equity (deficit). Gains or losses from remeasuring foreign currency transactions from the transaction
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currency to functional currency are included in (loss) income. Foreign currency losses (gains) losses for the periods presented were as follows:
| Years Ended December 31, | ||||||||||||||||||||
| (In thousands) | 2021 | 2020 | 2019 | |||||||||||||||||
| Loss (gain) on foreign currency related to re-measurement of U.S. dollar denominated debt held in Canada | $ | 5,986 | $ | (9,344) | $ | (22,307) | ||||||||||||||
| Loss (gain) on other transactions | 191 | (2,839) | 1,200 | |||||||||||||||||
| Loss (gain) on foreign currency | $ | 6,177 | $ | (12,183) | $ | (21,107) | ||||||||||||||
| Years Ended December 31, | ||||||||||||
| (In thousands) | 2018 | 2017 | 2016 | |||||||||
| (Gain) loss on foreign currency related to re-measurement of U.S. dollar denominated debt held in Canada | $ | 37,724 | $ | (30,912 | ) | $ | (14,771 | ) | ||||
| (Gain) loss on other transactions | (1,470 | ) | 1,826 | 115 | ||||||||
| (Gain) loss on foreign currency | $ | 36,254 | $ | (29,086 | ) | $ | (14,656 | ) | ||||
Segment Reporting
Estimates
The preparation of financial statements in conformity with generally accepted accounting principlesGAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during each period. Actual results could differ from those estimates.
Fair Value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, or an exit price. Inputs to valuation techniques used to measure fair value 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, a hierarchical disclosure framework ranks the quality and reliability of information used to determine fair values. 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. Assets and liabilities recognized or disclosed at fair value on a recurring basis include our derivatives, debt and short-term investments.
Cash and Cash Equivalents
Inventories
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 generally capitalized. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. Depreciation expense totaled $154.9$148.4 million in 2018, $152.52021, $157.0 million in 2017,2020, and $131.2$169.8 million in 2016.2019.
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The estimated useful lives of the assets are as follows:
| Land improvements | Approximately | 25 years | |||||||||
| Buildings | 25 years | - | 40 years | ||||||||
| Rides | Approximately | 20 years | |||||||||
| Equipment | 3 years | - | 10 years | ||||||||
Impairment of Long-Lived Assets
Accounting for Business Combinations
Business combinations are accounted for under the acquisition method of accounting. The amounts assigned to the identifiable assets acquired and liabilities assumed in connection with acquisitions are based on estimated fair values as of the date of the acquisition, with the remainder, if any, recorded as goodwill. The fair values are determined by management, taking into consideration information supplied by the management of the acquired entities, valuations supplied by independent appraisal experts and other relevant information. The valuations are generally based upon future cash flow projections for the acquired assets, discounted to present value. The determination of fair values requires significant judgment by management.
Goodwill
We may elect to first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, we calculate the fair value of goodwill in either period.
unit. The fair value of a reporting unit is established using a combination of an income (discounted cash flow) approach and market approach. The income approach uses a reporting unit's projection of estimated operating results and discounted cash flows that is discounted using a weighted-average cost of capital that reflects current market conditions. The projection usesEstimated operating results are established using 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, future estimates of capital expenditures and changes in future working capital requirements. A market approach estimates fair value by applying cash flow multiples to the reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics of the reporting units. If an impairment is identified, an impairment charge is recognized for the amount by which a reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill.
Other Intangible Assets
Our infinite-lived intangible assets consist of trade names. Our trade names are reviewed along with goodwill, annually for impairment, or more frequently if impairment indicators arise. A relief-from-royalty model is usedWe may elect to first perform a qualitative assessment to determine whether it is more likely than not that a trade name is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of trade-names exceed theirthe trade name exceeds its carrying amounts. Theamount, we calculate the fair value of the trade-names is determined astrade name using a relief-from-royalty model. Principal assumptions under the presentrelief-from-royalty model include royalty rates, growth rates in revenues, estimates of future expected changes in operating margins, terminal value growth rates, and a discount rate based on a weighted-average cost of fees avoided by owningcapital that reflects current market conditions. We assess the respective trade-name. The Partnership performed its annualindefinite-lived trade names for impairment test asseparately from goodwill.
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Table of the first days of the fourth quarter for 2018 and 2017, respectively, and concluded there was no impairment of the carrying value of these assets in either period. The Partnership's license and franchise agreements are amortized over the life of the agreement, generally ranging from three to twenty years.Contents
Self-Insurance Reserves
Derivative Financial Instruments
Leases
We have commitments under various operating leases. Right-of-use assets and lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The discount rate used to determine the present value of the future lease payments is our incremental borrowing rate as the rate implicit in most of our leases is not readily determinable. As a practical expedient, a relief provided in the accounting standard to simplify compliance, we do not recognize right-of-use assets and lease liabilities for leases with an original term of one year or less and have elected to not separate lease components from non-lease components. The current portion of our lease liability is recorded within "Other accrued liabilities" in the consolidated balance sheets.
Revenue Recognition and related receivables and contract liabilities
As disclosed within the consolidated statements of operations and comprehensive (loss) income, revenues are generated from sales of (1) admission to the Partnership'sour amusement parks and water parks, (2) food, merchandise and games both inside and outside the parks, and (3) accommodations, extra-charge products, and other revenue sources. Admission revenues include amounts paid to gain admission into the Partnership'sour parks, including parking fees. Revenues related to extra-charge products, including premium benefit offerings such as front-of-line products, and online transaction fees charged to customers are included in "Accommodations, extra-charge products and other".
| Years Ended December 31, | ||||||||||||
| (In thousands) | 2018 | 2017 | 2016 | |||||||||
| In-park revenues | $ | 1,235,742 | $ | 1,216,698 | $ | 1,177,447 | ||||||
| Out-of-park revenues | 152,216 | 143,763 | 146,137 | |||||||||
| Concessionaire remittance | (39,428 | ) | (38,494 | ) | (34,863 | ) | ||||||
| Net revenues | $ | 1,348,530 | $ | 1,321,967 | $ | 1,288,721 | ||||||
Due to the Partnership'sour highly seasonal operations, a substantial portion of the Partnership'sour revenues typically are generated during an approximate 130- to 140-day operating season. Most revenues are recognized on a daily basis based on actual guest spend at theour properties. Revenues from multi-use products, including season-long products for admission, dining, beverage and other products, are recognized over the estimated number of uses expected for each type of product. The estimated number of uses is reviewed and may be updated periodically during the operating season prior to the ticket or product expiration, which generally occurs no later than the close of the operating season. The number of uses is estimated based on historical usage adjusted for current period trends. For any bundled products that include multiple performance obligations, revenue is allocated using the retail price of each distinct performance obligation and any inherent discounts are allocated based on the gross margin and expected redemption of each performance obligation. The Partnership doesWe do not typically provide for refunds or returns.
In some instances, the Partnership arrangeswe arrange with outside parties ("concessionaires") to provide goods to guests, typically food and merchandise, and the Partnership actswe act as an agent, resulting in net revenuerevenues recorded within the income statement.consolidated statements of operations and comprehensive (loss) income. Concessionaire arrangement revenues are recognized over the operating season and are variable. Sponsorship revenues and marina revenues, which are classified as "Accommodations, extra-charge products and other" within the income statement,other," are recognized over the park operating season which represents the period in which the performance obligations are satisfied. Sponsorship revenues are typically fixed. However, some sponsorship revenues are variable based on achievement of specified operating metrics. The Partnership estimatesWe estimate variable revenues and performsperform a constraint analysis using both historical information and current trends to determine the amount of revenue that is not probable of a significant reversal.
Most deferred revenue from contracts with customers is classified as current within the balance sheet. However, a portion of deferred revenue from contracts with customers is typically classified as non-current during the third quarter relateddue to season-long products sold starting in the current season for use in the subsequent season. Season-long products are typically sold beginning in August of the year preceding the operating season. Season-long products may subsequently be recognized 12 to 16 months after purchase depending on the date of sale. The Partnership estimatesWe estimate the number of uses expected outside of the next twelve months for each type of product and classifiesclassify the related deferred revenue as non-current.non-current in the consolidated balance sheets.
44
for the effects of significant financing components in the form of our installment purchase plans asbecause the period between when the entity transfers the promised service to the customer and when the customer pays for that service doesterms of these plans do not exceed one year.
Advertising Costs
Production costs of commercials and programming are expensed in the year first aired. All other costs associated with advertising, promotion and marketing programs are expensed as incurred, or for certain costs, over each park's operating season. Advertising expense totaled $65.5 million in 2018, $63.9 million in 2017 and $60.8 million in 2016. Certain prepaid costs incurred through year-end for the following year's advertising programs are included within "Other current assets" in Other current assets.the consolidated balance sheets. Advertising expense totaled $37.0 million in 2021, $10.5 million in 2020 and $67.9 million in 2019. Due to the effects of the COVID-19 pandemic, we suspended all advertising costs in 2020 effective April 2020. For those parks which ultimately opened in 2020, we incurred limited incremental advertising expense for the remainder of 2020 to correspond with lower than typical attendance levels and abbreviated park operating calendars. In 2021, we also incurred less advertising costs than in previous years due to fewer operating days in the year, as well as the execution of a more efficient marketing program.
Equity-Based Compensation
Income Taxes
Neither the Partnership's financial reporting income, nor the cash distributions to unitholders, can be used as a substitute for the detailed tax calculations that the Partnershipwe must perform annually for itsour partners. Net income from the Partnership is not treated as passive income for federal income tax purposes. As a result, partners subject to the passive activity loss rules are not permitted to offset income from the Partnership with passive losses from other sources.
Earnings Per Unit
For purposes of calculating the basic and diluted earnings per limited partner unit, no adjustments have been made to the reported amounts of net (loss) income. The unit amounts used in calculating the basic and diluted earnings per limited partner unit for the years ended December 31, 2018, 20172021, 2020 and 20162019 are as follows:
| Years Ended December 31, | ||||||||||||||||||||
| (In thousands, except per unit amounts) | 2021 | 2020 | 2019 | |||||||||||||||||
| Basic weighted average units outstanding | 56,610 | 56,476 | 56,349 | |||||||||||||||||
| Effect of dilutive units: | ||||||||||||||||||||
| — | — | 50 | ||||||||||||||||||
| — | — | 118 | ||||||||||||||||||
| — | — | 275 | ||||||||||||||||||
| — | — | 129 | ||||||||||||||||||
| Diluted weighted average units outstanding | 56,610 | 56,476 | 56,921 | |||||||||||||||||
| Net (loss) income per unit - basic | $ | (0.86) | $ | (10.45) | $ | 3.06 | ||||||||||||||
| Net (loss) income per unit - diluted | $ | (0.86) | $ | (10.45) | $ | 3.03 | ||||||||||||||
| Years Ended December 31, | ||||||||||||
| 2018 | 2017 | 2016 | ||||||||||
| (In thousands, except per unit amounts) | ||||||||||||
| Basic weighted average units outstanding | 56,212 | 56,061 | 55,933 | |||||||||
| Effect of dilutive units: | ||||||||||||
Deferred units (Note 7) | 48 | 42 | 31 | |||||||||
Performance units (Note 7) | 135 | 188 | 181 | |||||||||
Restricted units (Note 7) | 312 | 324 | 288 | |||||||||
Unit options (Note 7) | 153 | 185 | 129 | |||||||||
| Diluted weighted average units outstanding | 56,860 | 56,800 | 56,562 | |||||||||
| Net income per unit - basic | $ | 2.25 | $ | 3.84 | $ | 3.18 | ||||||
| Net income per unit - diluted | $ | 2.23 | $ | 3.79 | $ | 3.14 | ||||||
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Adopted Accounting Pronouncements
In February 2016,December 2019, the FASB issued Accounting Standards Update No. 2016-02, Leases2019-12, Simplifying the Accounting for Income Taxes ("ASU 2016-02"2019-12"). The ASU requires the recognition of lease assets and lease liabilities within the balance sheet by lessees for operating leases, as well as requires additional disclosures in the consolidated financial statements regarding the amount, timing, and uncertainty of cash flows arising from leases. The ASU does not significantly change the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee, nor does the ASU change2019-12 simplifies the accounting appliedfor income taxes by a lessor.removing specific exceptions and clarifying and amending existing guidance under Topic 740, Income Taxes. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. The ASU can be adopted using either the modified retrospective approach, which requires application of the new standard at the beginning of the earliest comparative period presented, or the comparative reporting approach allowable under ASU 2018-11, which requires application of the new standard at the adoption date. The Partnership adopted this standard in the first quarter of 2019 using the comparative reporting approach. The Partnership elected not to reassess: whether any expired or existing contracts are or contain leases; the lease classification of any expired or existing leases; and the initial direct costs for any existing leases. The adoption of the standard is expected to result in the recognition of right-of-use assets and corresponding lease liabilities between $65.0 million and $75.0 million for the Partnership's Santa Clara land lease, as well as other operating leases.
In August 2018,November 2021, the FASB issued Accounting Standards Update No. 2018-15, Customer's Accounting2021-10, Disclosures by Business Entities about Government Assistance ("ASU 2021-10"). ASU 2021-10 requires annual disclosures about transactions with a government that are accounted for Implementation Costs Incurred inby applying a Cloud Computing Arrangement that is a Service Contract ("grant or contribution accounting model by analogy. ASU 2018-15"). The ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The capitalized implementation costs of a hosting arrangement that is a service contract will be expensed over the term of the hosting arrangement. ASU 2018-152021-10 is effective for financial statements issued for annual and interim periods beginning after December 15, 2019.2021. Early adoptionapplication is permitted, including adoption in any interim period.permitted. The amendments can be applied either prospectively or retrospectively. We adopted ASU 2021-10 retrospectively by providing the prescribed annual disclosures as part of these financial statements within the Income and Partnership Taxes footnote (see Note 12).
New Accounting Pronouncements
In March 2020, the FASB issued Accounting Standards Update No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate ("LIBOR") or prospectivelyanother reference rate expected to all implementation costs incurred afterbe discontinued because of reference rate reform. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022. In January 2021, the adoption date.FASB amended ASU 2020-04 by issuing Accounting Standards Update No. 2021-01, Reference Rate Reform Scope ("ASU 2021-01"). ASU 2021-01 clarifies the scope of optional expedients and exceptions to derivatives that are affected by the discounting transition. We are in the process of evaluating the effect these standards will have on the consolidated financial statements and related disclosures.
(4) Acquisitions:
On July 1, 2019, we completed the acquisition of 2 water parks and 1 resort in Texas, the Schlitterbahn Waterpark & Resort New Braunfels and the Schlitterbahn Waterpark Galveston ("Schlitterbahn parks"), for a cash purchase price of $257.7 million. The Partnership adopted this standardacquisition increased our presence in growing and attractive markets and further diversified our portfolio of properties. The Schlitterbahn parks are included within our single reportable segment of amusement/water parks with accompanying resort facilities.
The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon management's estimated fair values at the date of acquisition. To the extent the purchase price exceeded the estimated fair value of the net identifiable tangible and intangible assets acquired, such excess was allocated to goodwill. Based on the fair value of the assets acquired and the liabilities assumed, goodwill of $178.0 million, property and equipment of $58.1 million, an indefinite-lived trade name of $23.2 million, covenants not to compete of $0.2 million and a net working capital deficit of $3.3 million were recorded. We also assumed a lease commitment for the land on which Schlitterbahn Waterpark Galveston is located. This land lease resulted in the recognition of an additional right-of-use asset totaling $6.8 million and an additional corresponding lease liability totaling $5.3 million. All goodwill is expected to be deductible for income tax purposes.
Due to the negative effects of the COVID-19 pandemic on our forecasted operating results, we tested the long-lived assets, goodwill and indefinite-lived intangible assets of the Schlitterbahn parks for impairment during the first and third quarters of 2020. This resulted in impairment charges at the Schlitterbahn parks of $2.7 million for long-lived assets, $73.6 million for goodwill and $7.9 million for the Schlitterbahn trade name during the first quarter of 2020, and $11.3 million for goodwill and $2.2 million for the Schlitterbahn trade name during the third quarter of 20182020 (see Note 6 and Note 7).
The results of the Schlitterbahn parks' operations from the date of acquisition, including $63.9 million, $10.9 million and $42.5 million of net revenues; and $7.8 million of net income, $121.7 million of net loss and $12.0 million of net income, are included within the consolidated statements of operations and comprehensive (loss) income for the years ended December 31, 2021, December 31, 2020 and December 31, 2019, respectively. If we had acquired the Schlitterbahn parks on January 1, 2019, our results for the year ended December 31, 2019 would have included net revenues and net income of approximately $69 million and $11 million, respectively. Related acquisition transaction costs totaled $7.0 million for the year ended December 31, 2019 and were included within "Selling, general and administrative expenses".
(5) Revenue Recognition:
As disclosed within the consolidated statements of operations and comprehensive (loss) income, revenues are generated from sales of (1) admission to our amusement parks and water parks, (2) food, merchandise and games both inside and outside the parks, and (3) accommodations, extra-charge products, and other revenue sources. Admission revenues include amounts paid to gain admission into our parks, including parking fees. Revenues related to extra-charge products, including premium benefit offerings such as front-of-line products, and online transaction fees charged to customers are included in "Accommodations, extra-charge products and other".
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The following table presents net revenues disaggregated by revenues generated within the parks and revenues generated from out-of-park operations less amounts remitted to outside parties under concessionaire arrangements for the periods presented. The amounts are not comparable due to the effects of the COVID-19 pandemic.
| Years Ended December 31, | ||||||||||||||||||||
| (In thousands) | 2021 | 2020 | 2019 | |||||||||||||||||
| In-park revenues | $ | 1,209,505 | $ | 120,370 | $ | 1,349,903 | ||||||||||||||
| Out-of-park revenues | 167,978 | 67,375 | 168,708 | |||||||||||||||||
| Concessionaire remittance | (39,264) | (6,190) | (43,686) | |||||||||||||||||
| Net revenues | $ | 1,338,219 | $ | 181,555 | $ | 1,474,925 | ||||||||||||||
Many products, including season-long products, are sold to customers in advance, resulting in a contract liability ("deferred revenue"). Deferred revenue is typically at its highest immediately prior to the peak summer season, and at its lowest at the beginning of the calendar year following the close of our parks' operating seasons. Season-long products represent most of the deferred revenue balance in any given period.
Due to the effects of the COVID-19 pandemic, we extended the validity of our 2020 season-long products through the 2021 operating season in order to ensure our season pass holders received a full season of access to our parks. In addition, four of our parks provided their season pass holders a loyalty reward to be used on purchases within the park during the 2021 operating season. We identified the loyalty reward as a separate performance obligation and allocated revenue to the season pass and loyalty reward in a manner consistent with other bundled products. The extended validity of the 2020 season-long products, and to a much lesser extent the loyalty reward offering, resulted in a significant amount of revenue deferred from 2020 into 2021.
All 2020 and 2021 season-long product revenue has been recognized as of December 31, 2021 except for season-long product extensions into 2022 at two parks. In the first quarter of 2021, Knott's Berry Farm offered a further day-for-day extension into calendar year 2022 for 2020 and 2021 season-long products for every day the park was closed in 2021, as well as a further extension for out-of-state season pass holders due to more restrictive state guidelines for out-of-state visitors. In the second quarter of 2021, Canada's Wonderland extended its 2020 and 2021 season-long products through September 5, 2022. No other parks offered similar plans. We expect deferred revenue related to these further extended season-long products to be realized within 12 months from the balance sheet date.
In order to calculate revenue recognized on these extended season-long products, management made significant estimates regarding the estimated number of uses expected for these season-long products for admission, dining, beverage and other products, including during interim periods. Actual results could materially differ from these estimates depending on the ultimate extent of the effects of the COVID-19 pandemic.
Of the $183.4 million of current deferred revenue recorded as of January 1, 2021, 90% was related to season-long products. The remainder was related to deferred online transaction fees charged to customers, advanced ticket sales, marina deposits, advanced resort reservations, and other deferred revenue. During the year ended December 31, 2021, approximately $163 million of the deferred revenue balance as of January 1, 2021 was recognized. Typically, all deferred revenue as of January 1, 2021 would have been recognized by December 31, 2021 except for an immaterial amount of deferred revenue for prepaid products such as gift cards and prepaid games cards. The deferred revenue unrecognized from the $183.4 million of current deferred revenue recorded as of January 1, 2021 was due to the extension of the validity of our 2020 and 2021 season-long products into the 2022 operating season at two of our parks. As of January 1, 2021, we also had recorded $10.5 million of non-current deferred revenue which largely represented prepaid lease payments for a portion of the California's Great America parking lot. The prepaid lease payments are being recognized through 2039.
Payment is due immediately on the transaction date for most products. Our receivable balance includes outstanding amounts on installment purchase plans which are offered for season-long products (and other select products for specific time periods), and includes sales to retailers, group sales and catering activities which are billed. Installment purchase plans vary in length from 3 monthly installments to 12 monthly installments. Payment terms for billings are typically net 30 days. Receivables in a typical operating year are highest in the peak summer months and lowest in the winter months. We are not exposed to a significant concentration of customer credit risk. As of December 31, 2021 and December 31, 2020, we recorded a $5.7 million and $8.7 million allowance for doubtful accounts, respectively, representing estimated defaults on installment purchase plans. The default estimate is calculated using historical default rates adjusted for current period trends. The allowance for doubtful accounts is recorded as a reduction of deferred revenue to the prospective method. The Partnership anticipatesextent revenue has not been recognized on the standardcorresponding season-long products. Due to lengthenthe effects of the COVID-19 pandemic and given the uncertainty around the timing of expense recognition associated with upcoming cloud-based projects.the reopening of our parks, we paused collections on our installment purchase plans in April 2020. For those parks which opened during the summer of 2020, we resumed collections of guest payments on installment purchase products as each of these parks opened for the 2020 operating season. For those parks which did not open during the summer of 2020, we resumed collections of guest payments in April 2021, except for Canada's Wonderland where we resumed collections in June 2021. As of December 31, 2021, all 2020 and 2021 installment plans had concluded.
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(6) 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 declinedecrease in expected future cash flows;the market price of a sustained,long-lived asset; a significant declineadverse change in equity price and market capitalization;the extent or manner in which a long-lived asset is being used or in its physical condition; a significant adverse change in legal factors or in the business climate; unanticipated competition;an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset; past, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset; and slower growth rates.a current expectation that a long-lived asset will be sold or disposed significantly before the end of its previously estimated useful life. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on the Partnership's consolidated financial statements.
Remaining acreage from the former WildWater Kingdom, a separately gated outdoor water park located near Cleveland in Aurora, Ohio, was recorded within "Other Assets" in the prior period consolidated balance sheet ($2.1 million as of December 31, 2020). All remaining acreage from this property was sold during the second quarter of 2021.
(7) 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. During 2021, we concluded indicators of impairment did not exist. We based our conclusion on our financial performance projections, as well as an updated analysis of macroeconomic and industry-specific conditions. During the first and third quarters of 2020 and due to the negative effects of the COVID-19 pandemic on our forecasted operating results, we tested our goodwill and indefinite-lived intangible assets for impairment. We concluded the estimated fair value of goodwill at the Schlitterbahn parks and Dorney Park reporting units, and the estimated fair value of the Schlitterbahn trade name no longer exceeded their carrying values. Therefore, we recorded a $73.6 million, $6.8 million and $7.9 million impairment of goodwill at the Schlitterbahn parks, goodwill at Dorney Park, and the Schlitterbahn trade name, respectively, during the first quarter of 2020. We also recorded an $11.3 million, $2.3 million and $2.2 million impairment of goodwill at the Schlitterbahn parks, goodwill at Dorney Park, and the Schlitterbahn trade name, respectively, during the third quarter of 2020. The impairment charges were equal to the amount by which the carrying amounts exceeded the assets' fair value and were recorded in "Loss on impairment of goodwill and other intangibles" within the consolidated statement of operations and comprehensive loss. We performed our annual impairment test as of the first days of the fourth quarter in 2021 and 2020, respectively, and concluded there was no further impairment of the carrying value of goodwill or other indefinite-lived intangible assets in either period.
The fair value of our reporting units was established using a combination of an income (discounted cash flow) approach and market approach. The income approach used each reporting unit's projection of estimated operating results and discounted cash flows reflect management'susing a weighted-average cost of capital that reflected current market conditions. Estimated operating results were established using our 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.expenditures, the anticipated time frame to re-open our parks, and the related anticipated demand upon re-opening our parks. Other significant estimates and assumptions includeincluded terminal value growth rates. Ifrates, future estimates of capital expenditures and changes in future working capital requirements. The market approach estimated fair value by applying cash flow multiples to each reporting unit's operating performance. The multiples were derived from comparable publicly traded companies with similar operating and investment characteristics of the reporting units. The impairment charges recognized were for the amount by which the reporting unit's carrying amount exceeded its fair value.
Our indefinite-lived intangible assets consist of trade names. The fair value of the asset group is higher than its undiscounted future cash flows, there is an indication thatour trade names was calculated using a relief-from-royalty model. The impairment exists and the second step must be performed to measurecharges recognized were for the amount by which the trade name's carrying amount exceeded its fair value.
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Management made significant estimates calculating the fair value of our reporting units and trade names. Actual results could materially differ from these estimates depending on 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 (discounted cash flows) approach, which 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. If the fair valueultimate extent of the assets is less than their carrying value, an impairment charge is recorded for the difference.
| (In thousands) | Goodwill | |||||||
| Balance as of December 31, 2019 | $ | 359,654 | ||||||
| Impairment | (93,929) | |||||||
| Foreign currency exchange translation | 1,236 | |||||||
| Balance as of December 31, 2020 | $ | 266,961 | ||||||
| Impairment | — | |||||||
| Foreign currency exchange translation | 271 | |||||||
| Balance as of December 31, 2021 | $ | 267,232 | ||||||
| (In thousands) | Goodwill (gross) | Accumulated Impairment Losses | Goodwill (net) | |||||||||
| Balance as of December 31, 2016 | $ | 259,528 | $ | (79,868 | ) | $ | 179,660 | |||||
| Foreign currency exchange translation | 4,170 | — | 4,170 | |||||||||
| Balance as of December 31, 2017 | 263,698 | (79,868 | ) | 183,830 | ||||||||
| Foreign currency exchange translation | (5,111 | ) | — | (5,111 | ) | |||||||
| Balance as of December 31, 2018 | $ | 258,587 | $ | (79,868 | ) | $ | 178,719 | |||||
As of December 31, 20182021 and December 31, 2017, the Partnership's2020, other intangible assets consisted of the following:
| (In thousands) | Weighted Average Amortization Period | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||||||
| December 31, 2021 | ||||||||||||||||||||||||||
| Other intangible assets: | ||||||||||||||||||||||||||
| Trade names | — | $ | 49,515 | $ | — | $ | 49,515 | |||||||||||||||||||
| License / franchise agreements | 12.0 years | 4,262 | (3,783) | 479 | ||||||||||||||||||||||
| Total other intangible assets | $ | 53,777 | $ | (3,783) | $ | 49,994 | ||||||||||||||||||||
| December 31, 2020 | ||||||||||||||||||||||||||
| Other intangible assets: | ||||||||||||||||||||||||||
| Trade names | — | $ | 49,454 | $ | — | $ | 49,454 | |||||||||||||||||||
| License / franchise agreements | 7.1 years | 4,259 | (3,425) | 834 | ||||||||||||||||||||||
| Total other intangible assets | $ | 53,713 | $ | (3,425) | $ | 50,288 | ||||||||||||||||||||
| (In thousands) | Weighted Average Amortization Period | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | |||||||||||
| December 31, 2018 | |||||||||||||||
| Other intangible assets: | |||||||||||||||
| Trade names | — | $ | 35,394 | $ | — | $ | 35,394 | ||||||||
| License / franchise agreements | 6.9 years | 3,379 | (2,397 | ) | 982 | ||||||||||
| Total other intangible assets | $ | 38,773 | $ | (2,397 | ) | $ | 36,376 | ||||||||
| December 31, 2017 | |||||||||||||||
| Other intangible assets: | |||||||||||||||
| Trade names | — | $ | 36,531 | $ | — | $ | 36,531 | ||||||||
| License / franchise agreements | 5.9 years | 3,360 | (1,827 | ) | 1,533 | ||||||||||
| Total other intangible assets | $ | 39,891 | $ | (1,827 | ) | $ | 38,064 | ||||||||
Amortization expense of finite-lived other intangible assets for 2018, 20172021, 2020 and 20162019 was immaterial and is expected to be immaterial going forward.
Long-term debt as of December 31, 20182021 and December 31, 20172020 consisted of the following:
| (In thousands) | December 31, 2021 | December 31, 2020 | ||||||||||||
| U.S. term loan averaging 1.85% in 2021; 2.70% in 2020 (due 2017-2024) (1) | $ | 264,250 | $ | 264,250 | ||||||||||
| Notes | ||||||||||||||
| 2024 U.S. fixed rate senior unsecured notes at 5.375% | — | 450,000 | ||||||||||||
| 2025 U.S. fixed rate senior secured notes at 5.500% | 1,000,000 | 1,000,000 | ||||||||||||
| 2027 U.S. fixed rate senior unsecured notes at 5.375% | 500,000 | 500,000 | ||||||||||||
| 2028 U.S. fixed rate senior unsecured notes at 6.500% | 300,000 | 300,000 | ||||||||||||
| 2029 U.S. fixed rate senior unsecured notes at 5.250% | 500,000 | 500,000 | ||||||||||||
| 2,564,250 | 3,014,250 | |||||||||||||
| Less current portion | — | — | ||||||||||||
| 2,564,250 | 3,014,250 | |||||||||||||
| Less debt issuance costs and original issue discount | (45,314) | (60,006) | ||||||||||||
| $ | 2,518,936 | $ | 2,954,244 | |||||||||||
| (In thousands) | December 31, 2018 | December 31, 2017 | ||||||
Term debt (1) | ||||||||
| April 2017 U.S. term loan averaging 3.83% in 2018; 3.43% in 2017 (due 2017-2024) | $ | 735,000 | $ | 735,000 | ||||
| Notes | ||||||||
| April 2017 U.S. fixed rate notes at 5.375% (due 2027) | 500,000 | 500,000 | ||||||
| June 2014 U.S. fixed rate notes at 5.375% (due 2024) | 450,000 | 450,000 | ||||||
| 1,685,000 | 1,685,000 | |||||||
| Less current portion | (5,625 | ) | — | |||||
| 1,679,375 | 1,685,000 | |||||||
| Less debt issuance costs and original issue discount | (21,807 | ) | (24,485 | ) | ||||
| $ | 1,657,568 | $ | 1,660,515 | |||||
(1)The weighted average interest rates do not reflect the effect of interest rate swap agreements (see Note 9).
Term Debt and Revolving Credit Facilities
In April 2017, the Partnership issued $500 million of 5.375% senior unsecured notes ("April 2017 notes"), maturing in 2027. The net proceeds from the offering of the April 2017 notes, together with borrowings under the 2017 Credit Agreement (defined below), were used to redeem all
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further amended the 2017 Credit Agreement (the "Second Amendment") to suspend and revise certain financial covenants, and to adjust the interest rate on earlyand reflect additional commitments and capacity for our revolving credit facility. In conjunction with the Second Amendment, we prepaid $463.3 million of our outstanding senior secured term loan facility. Following the prepayment, we do not have any required remaining scheduled quarterly payments on our senior secured term loan facility. We may prepay some or all of our term debt extinguishment during the first quarterwithout premium or penalty at any time. A schedule of 2018. Theminimum annual maturities for our senior secured term loan facility matures April 15, 2024.follows:
| (In thousands) | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 and beyond | Total | ||||||||||||||||||||||||||||||||||
| U.S. term loan | — | — | $ | 264,250 | — | — | — | $ | 264,250 | ||||||||||||||||||||||||||||||||
In September 2020, in response to the continuing effects of the COVID-19 pandemic, we further amended the 2017 Credit Agreement (the "Third Amendment") to further suspend and revise certain of the financial covenants and extend the maturity of and adjust the terms that apply to a portion of our senior secured revolving credit facility. We also amended the 2017 Credit Agreement in December 2021 to allow for the redemption of the 2024 senior notes. The facilities provided under the Amended 2017 Credit Agreement are collateralized by substantially all of the assets of the Partnership.
facility. The $750revolving credit facility was scheduled to mature in April 2022 under the Second Amendment. In September 2020, the Third Amendment extended the maturity date of $300 million of the $375 million senior secured term loanrevolving credit facility to December 2023 (which portion of the facility is subsequently referred to as the "2023 Revolving Credit Facility Capacity"). Under the Third Amendment, the 2023 Revolving Credit Facility Capacity bears interest at LIBOR plus 350 bps or CDOR plus 250 bps and requires the payment of a 62.5 bps commitment fee per annum on the unused portion of the 2023 Revolving Credit Facility Capacity, in each case without any step-downs. The terms of the remaining $75 million available under the Amendedsenior secured revolving credit facility remain unchanged from the Second Amendment. Prior to the Second Amendment and Third Amendment, our senior secured revolving credit facility had a combined limit of $275 million with a Canadian sub-limit of $15 million and bore interest at LIBOR or CDOR plus 200 bps. The 2017 Credit Agreement has a maturity datealso provides for the issuance of April 15, 2024documentary and an interest ratestandby letters of LIBOR plus 175 bps. The term loan amortizes at $7.5 million annually. The minimum maturities of term debt under the Amended 2017 Credit Agreement are as follows:credit.
| (In thousands) | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 & Beyond | Total | ||||||||||||||||||||
| April 2017 U.S. term loan averaging 3.83% in 2018; 3.43% in 2017 (due 2017-2024) | $ | 5,625 | $ | 7,500 | $ | 7,500 | $ | 7,500 | $ | 7,500 | $ | 699,375 | $ | 735,000 | |||||||||||||
As of December 31, 2018, there2021 and December 31, 2020, no amounts were $5.6outstanding under the revolving credit facility. After letters of credit of $15.8 million and $15.9 million, we had $359.2 million and $359.1 million of current maturities outstanding.available borrowings under our revolving credit facility as of December 31, 2021 and December 31, 2020, respectively. We did not borrow on the revolving credit facility during 2021.
Notes
In April 2020, as a result of the anticipated effects of the COVID-19 pandemic and in connection with the Second Amendment, we issued $1.0 billion of 5.500% senior secured notes due 2025 ("2025 senior notes") in a private placement. The Partnership2025 senior notes and the related guarantees are secured by first-priority liens on the issuers' and the guarantors' assets that secure all the obligations under our credit facilities. The net proceeds from the offering of the 2025 senior notes were used to repay $463.3 million of our then-outstanding senior secured term loan facility. The remaining amount was for general corporate and working capital purposes, including fees and expenses related to the transaction.
The 2025 senior notes pay interest semi-annually in May and November, with the principal due in full on May 1, 2025. Prior to May 1, 2022, up to 35% of the 2025 senior notes may prepay somebe redeemed with the net cash proceeds of certain equity offerings at a price equal to 105.500% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any. The 2025 senior notes may be redeemed, in whole or in part, at any time prior to May 1, 2022 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 and additional interest, if any, to the redemption date. Thereafter, the 2025 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed.
In June 2014, we issued $450 million of 5.375% senior unsecured notes due 2024 ("2024 senior notes"). The 2024 senior notes paid interest semi-annually in June and December, with the principal due in full on June 1, 2024. On December 17, 2021, we redeemed all of its termthe 2024 senior notes at a redemption price equal to 100.896% of the principal amount plus accrued and unpaid interest. As a result, we recognized a $5.9 million loss on early debt withoutextinguishment during the fourth quarter of 2021, inclusive of debt premium or penalty at any time.payments of $4.1 million and the write-off of debt issuance costs of $1.8 million.
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In June 2014, the Partnership2019, we issued $450$500 million of 5.375%5.250% senior unsecured notes due 2029 ("June 20142029 senior notes"). The June 20142029 senior notes pay interest semi-annually in JuneJanuary and December,July, with the principal due in full on June 1, 2024.July 15, 2029. Prior to July 15, 2022, up to 35% of the 2029 senior notes may be redeemed with the net cash proceeds of certain equity offerings at a price equal to 105.250% of the principal amount thereof, together with accrued and unpaid interest and additional interest, if any. The 2029 senior notes may be redeemed, in whole or in part, at any time prior to June 1, 2019July 15, 2024 at a price equal to 100% of the principal amount of the notes redeemed plus a “make-whole”"make-whole" premium together with accrued and unpaid interest and additional interest, if any, to the redemption date. Thereafter, the 2029 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed.
As market conditions warrant, the Partnershipwe may from time to time repurchase our outstanding debt securities issued by the Partnership, in privately negotiated or open market transactions, by tender offer, exchange offer or otherwise.
Covenants
The Amended 2017 Credit Agreement, includesas amended, includes: (i) a ConsolidatedSenior Secured Leverage Ratio of 4.50x Total First Lien Senior Secured Debt-to-Consolidated EBITDA starting with the first quarter of 2022, which if breachedwill step down to 4.00x in the second quarter of 2023 and which will step down further to 3.75x in the third quarter of 2023, with the covenant calculations for any reasonthe first, second, and not cured could resultthird quarters in an event2022 to include Consolidated EBITDA from the second, third and fourth quarters of default. The ratio is setthe fiscal year ended December 31, 2019 in lieu of the Consolidated EBITDA for the corresponding quarters in 2021 ("Deemed EBITDA Quarters"); (ii) a requirement that we maintain a minimum liquidity level of at a maximum of 5.50x Consolidated Total Debt-to-Consolidated EBITDA. Asleast $125 million, tested at all times, until the earlier of December 31, 2018,2022 or the Partnership wastermination of the Additional Restrictions Period (which generally includes the period from the effective date of the Second Amendment until the delivery of the compliance certificate for the fourth quarter of 2022); and (iii) a suspension of certain Restricted Payments, including partnership distributions, under the credit agreement until the termination of the Additional Restrictions Period. We may terminate the Additional Restrictions Period prior to December 31, 2022 by achieving compliance with the Senior Secured Leverage Ratio covenant as of the end of a fiscal quarter without giving effect to Deemed EBITDA Quarters for any fiscal quarter. We were in compliance with this financial condition covenant and all otherthe applicable financial covenants under the Amended 2017 Credit Agreement.our credit agreement during 2021.
Derivative financial instruments are used within the Partnership’sour overall risk management program to manage certain interest rate and foreign currency risks. By utilizing a derivative instrument to hedge exposure to LIBOR rate changes, the Partnership iswe are exposed to counterparty credit risk, in particular 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 believeswe believe poses minimal credit risk. The Partnership doesWe do not use derivative financial instruments for trading purposes.
| (In thousands) | Balance Sheet Location | December 31, 2021 | December 31, 2020 | |||||||||||
| Derivatives not designated as hedging instruments: | ||||||||||||||
| Interest rate swaps | Derivative Liability | $ | (20,086) | $ | (39,086) | |||||||||
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| (In thousands) | December 31, 2018 | December 31, 2017 | |||||
| Derivatives not designated as hedging instruments: | |||||||
| Interest rate swaps | $ | (6,705 | ) | $ | (8,722 | ) | |
Instruments that do not qualify for hedge accounting or were de-designated are prospectively adjusted to fair value each reporting period through "Net effect of swaps" within the consolidated statements of operations and comprehensive (loss) income. The amounts that were previously recorded as a component of AOCI prior to de-designation are reclassified to earnings, and a corresponding realized gain or loss is recognized when the forecasted cash flow occurs. As a result of the first quarter 2016 amendments, the previously existing interest rate swap agreements were de-designated, and the amounts previously recorded in AOCI were amortized into earnings through the original December 31, 2018 maturity. Therefore, all losses in AOCI related to the effective cash flow hedge contracts prior to de-designation have been reclassified to earnings as of December 31, 2018.
| Years Ended December 31, | ||||||||||||
| (In thousands) | 2018 | 2017 | 2016 | |||||||||
| Change in fair market value | $ | (2,017 | ) | $ | (9,504 | ) | $ | (9,868 | ) | |||
| Amortization of amounts in AOCI | 9,459 | 9,459 | 8,671 | |||||||||
| Net effect of swaps | $ | 7,442 | $ | (45 | ) | $ | (1,197 | ) | ||||
Special L.P. Interests
In accordance with the Partnership Agreement, certain partners were allocated $5.3$5.3 million of 1987 and 1988 taxable income (without any related cash distributions) for which they received Special L.P. Interests. The Special L.P. Interests do not participate in cash distributions and have no voting rights. However, the holders of Special L.P. Interests will receive in the aggregate $5.3$5.3 million upon liquidation of the Partnership.
Equity-Based Incentive Plan
The 2016 Omnibus Incentive Plan was approved by the Partnership'sour unitholders in June 2016 and allows the awarding of up to 2.8 million unit options and other forms of equity as determined by the Compensation Committee of the Board of Directors as an element of compensation to senior management, key employees and other key employees.directors. The 2016 Omnibus Incentive Plan superseded the 2008 Omnibus Incentive Plan which was approved by the Partnership'sour unitholders in May 2008 and allowed the awarding of up to 2.5 million unit options and other forms of equity. Outstanding awards under the 2008 Omnibus Incentive Plan continue to be in effect and are governed by the terms of that plan. The 2016 Omnibus Incentive Plan provides an opportunity for officers, directors, and eligible persons to acquire an interest in the growth and performance of the Partnership'sour units and provides employees annual and long-term incentive awards as determined by the Board of Directors. Under the 2016 Omnibus Incentive Plan, the Compensation Committee of the Board of Directors may grant unit options, unit appreciation rights, restricted units, performance awards, other unit awards, cash incentive awards and unrestricted unit awards. The awards granted by the Compensation Committee fall into two categories, Awards Payable in Cash or Equity, and Awards Payable in Equity. The impact of these awards is more fully described below.
Equity-based compensation expense recognized in the consolidated statements of operations and comprehensive (loss) income within "Selling, General and Administrative Expense" for the applicable periods was as follows:
| Years Ended December 31, | ||||||||||||||||||||
| (In thousands) | 2021 (1) | 2020 (2) | 2019 | |||||||||||||||||
| Awards Payable in Cash or Equity | ||||||||||||||||||||
| Deferred units | $ | 1,014 | $ | (588) | $ | 611 | ||||||||||||||
| Awards Payable in Equity | ||||||||||||||||||||
| Performance units | 10,554 | (5,270) | 5,535 | |||||||||||||||||
| Restricted units | 4,878 | 5,061 | 6,375 | |||||||||||||||||
| Total equity-based compensation expense | $ | 16,446 | $ | (797) | $ | 12,521 | ||||||||||||||
| Years Ended December 31, | ||||||||||||
| (In thousands) | 2018 | 2017 | 2016 | |||||||||
| Awards Payable in Cash or Equity | ||||||||||||
| Performance units | $ | — | $ | 507 | $ | 4,586 | ||||||
| Deferred units | (266 | ) | 627 | 993 | ||||||||
| Awards Payable in Equity | ||||||||||||
| Performance units | 5,413 | 8,822 | 7,519 | |||||||||
| Restricted units | 5,830 | 4,612 | 3,856 | |||||||||
| Unit Options | — | — | 5 | |||||||||
| Total equity-based compensation expense | $ | 10,977 | $ | 14,568 | $ | 16,959 | ||||||
(1) Due to the effects of the COVID-19 pandemic on 2020 results, the 2018-2020 three-year performance plan was below the payout threshold. Given that two full years of the program were completed, the 2018-2020 performance unit awards were modified to allow for a payout taking into account 2018-2019 results, management's performance relative to 2020 COVID-19 strategic goals and 2020 pre-COVID-19 forecast, resulting in $3.9 million of additional expense recognized during the year ended December 31, 2021.
(2) The market value of our deferred unit awards and the anticipated payout of our annual performance unit awards decreased due to the effects of the COVID-19 pandemic resulting in expense reversed during the year ended December 31, 2020.
Awards Payable in Cash or Equity
Deferred Units
| (In thousands, except per unit amounts) | Number of Units | Weighted Average Grant Date Fair Value Per Unit | ||||||||||||
| Outstanding deferred units at December 31, 2020 | 46 | $ | 52.07 | |||||||||||
| Granted | 10 | $ | 50.06 | |||||||||||
| Outstanding deferred units at December 31, 2021 | 56 | $ | 51.70 | |||||||||||
| (In thousands, except per unit amounts) | Number of Units | Weighted Average Grant Date Fair Value Per Unit | |||||
| Outstanding deferred units at December 31, 2017 | 44 | $ | 55.41 | ||||
Granted (1) | 12 | $ | 49.35 | ||||
| Forfeited | — | — | |||||
| Vested | — | — | |||||
| Outstanding deferred units at December 31, 2018 | 56 | $ | 54.21 | ||||
Deferred unit awards vest over a one-year period and the settlement of these units is deferred until the individual's service to the Partnership ends. The deferred units begin to accumulate distribution-equivalents upon vesting and are paid when the restriction ends. The effect of
outstanding deferred unit awards has been included in the diluted earnings per unit calculation for the year ended December 31, 2019, as a portion of the awards are expected to be settled in limited partnership units. As of December 31, 2018,2021, the market value of the deferred units was $2.6$2.8 million, was classified as current and was recorded within "Other
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"Other accrued liabilities" within the consolidated balance sheet. As of December 31, 2018,2021, there was no unamortized expense related to unvested deferred unit awards as all units were fully vested.
Awards Payable in Equity
Performance Units
| (In thousands, except per unit amounts) | Number of Units | Weighted Average Grant Date Fair Value Per Unit | ||||||||||||
| Unvested performance units at December 31, 2020 | 81 | $ | 27.92 | |||||||||||
Granted (1) | 460 | $ | 46.86 | |||||||||||
| Forfeited | (29) | $ | 47.26 | |||||||||||
Vested (1) | (82) | $ | 47.66 | |||||||||||
| Unvested performance units at December 31, 2021 | 430 | $ | 43.13 | |||||||||||
| (In thousands, except per unit amounts) | Number of Units | Weighted Average Grant Date Fair Value Per Unit | |||||
| Unvested performance units at December 31, 2017 | 532 | $ | 57.18 | ||||
Granted (1) | 122 | $ | 52.56 | ||||
| Forfeited | (58 | ) | $ | 59.10 | |||
| Vested | (217 | ) | $ | 54.63 | |||
| Unvested performance units at December 31, 2018 | 379 | $ | 56.86 | ||||
(1) Includes 18 forfeitable distribution-equivalentDue to the effects of the COVID-19 pandemic on 2020 results, the 2018-2020 three-year performance plan was below the payout threshold. Given that two full years of the program were completed, the 2018-2020 performance unit awards were modified to allow for a payout taking into account 2018-2019 results, management's performance relative to 2020 COVID-19 strategic goals and 2020 pre-COVID-19 forecast, resulting in 82,000 units both granted and vested during the year ended December 31, 2021.
Our annual performance unit awards based upon the 2019-2021 and 2020-2022 three-year performance periods are not anticipated to payout due to the effects of the COVID-19 pandemic. The number of performance units issuable under these annual performance unit awards are contingently based upon certain performance targets over aeach three-year vesting period. The annual performance awards and the related forfeitable distribution-equivalent units generally are paid out in the first quarter following the performance period in limited partnership units.
Of the unvested performance units outstanding as of December 31, 2021, 91,818 represented performance-based other units awarded in 2020 to incentivize optimal executive performance in light of the effects of the COVID-19 pandemic. The effectnumber of these typesunits issuable were contingently based upon the level of attainment of various performance objectives over a six-month period with the awards payable in limited partnership units following the one-year anniversary of the six-month performance period, which will occur in the first quarter of 2022. These unit awards do not earn distribution-equivalent units.
The remaining outstanding performance units as of December 31, 2021 represented 2021-2025 performance-based units awarded in 2021. These units were awarded instead of the traditional annual performance unit awards with three-year performance periods due to continued uncertainty related to the COVID-19 pandemic. The number of performance units issuable under the 2021-2025 performance-based unit awards are contingently based upon 3 separate financial performance targets which can vest over a three to five-year period. The performance targets become incrementally higher over the five-year period. The 2021-2025 performance-based unit awards and related forfeitable distribution-equivalent units will be paid out in limited partnership units upon the achievement of each target in the first quarter following the year the target was earned.
The effect of outstanding performance unit awards, for which the performance conditions havehad been met, have been included in the diluted earnings per unit calculation. The number of units vested in 2018 include 62,117 retention grant units. Vesting of the retention grant unit award followed a three-year performance period. Half of the retention grant unit award vested in December 2017 and the remaining half of the award vested in December 2018. The forfeitable distribution equivalentscalculation for the retention grant units are payable in cash at the same time. As ofyear ended December 31, 2018, $1.0 million of forfeitable distribution equivalents were accrued prior to payment in early January 2019, classified as current and recorded within "Other accrued liabilities" within the consolidated balance sheet.2019.
As of December 31, 2018,2021, unamortized compensation expense related to these unvested performance unit awards was $9.6$11.1 million, which is expected to be amortized over a weighted average period of 2.32.0 years. The fair value of the performance units is based on the unit price the day before the date of grant along with reinvested forfeitable distribution-equivalent units. The Partnership assessesgrant. We assess the probability of the performance targets being met and may reverse prior period expense or recognize additional expense accordingly.
Restricted Units
| (In thousands, except per unit amounts) | Number of Units | Weighted Average Grant Date Fair Value Per Unit | ||||||||||||
| Unvested restricted units at December 31, 2020 | 219 | $ | 54.77 | |||||||||||
| Granted | 127 | $ | 47.39 | |||||||||||
| Forfeited | (9) | $ | 48.40 | |||||||||||
| Vested | (109) | $ | 57.82 | |||||||||||
| Unvested restricted units at December 31, 2021 | 228 | $ | 49.44 | |||||||||||
| (In thousands, except per unit amounts) | Number of Units | Weighted Average Grant Date Fair Value Per Unit | |||||
| Unvested restricted units at December 31, 2017 | 252 | $ | 59.75 | ||||
| Granted | 130 | $ | 53.62 | ||||
| Forfeited | (5 | ) | $ | 60.74 | |||
| Vested | (67 | ) | $ | 56.59 | |||
| Unvested restricted units at December 31, 2018 | 310 | $ | 57.85 | ||||
The majority of theour annual restricted unitsunit awards vest evenly over aan approximate three-year period, and the restrictions on these units lapse upon vesting. In addition,period. However, as of the unvested restricted units at December 31, 2018, 32,1542021, 60,582 units outstanding vest following a two-yearan approximate three-year cliff vesting period, and 85,6458,833 units outstanding vest following a three-year cliffunder alternate vesting period.schedules, all of which approximate three years. Restrictions on our restricted unit
53
awards lapse upon vesting. During the vesting period for restricted unit awards, the units accumulate forfeitable distribution-equivalents, which, when the units are fully vested, are payable in cash. As of December 31, 2018,2021, the amount of forfeitable distribution equivalents accrued totaled $1.4$0.3 million; $0.5$0.2 million of which was classified as current and recorded within "Other accrued liabilities" within the consolidated balance sheet and $0.9$0.1 million of which was classified as non-current and recorded within "Other Liabilities".
As of December 31, 2018,2021, unamortized compensation expense, determined as the market value of the units on the day before the date of grant, related to unvested restricted unit awards was $10.9$5.5 million, which is expected to be amortized over a weighted average period of 2.11.8 years.
Unit Options
| (In thousands, except per unit amounts) | Unit Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | ||||||||||||||||||||||
| Options outstanding at December 31, 2020 | 352 | $ | 34.50 | |||||||||||||||||||||||
| Exercised | (234) | $ | 34.12 | |||||||||||||||||||||||
| Options outstanding at December 31, 2021 | 118 | $ | 35.27 | |||||||||||||||||||||||
| Options exercisable, end of year | 118 | $ | 35.27 | 0.9 years | $ | 1,740 | ||||||||||||||||||||
| (In thousands, except per unit amounts) | Unit Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
| Options outstanding at December 31, 2017 | 374 | $ | 34.55 | ||||||||||
| Exercised | (6 | ) | 36.95 | ||||||||||
| Options outstanding at December 31, 2018 | 368 | $ | 34.51 | ||||||||||
| Options exercisable, end of year | 368 | $ | 34.51 | 3.8 years | $ | 4,707 | |||||||
The range of exercise prices of unit options outstanding was $29.53 to $36.95 as of December 31, 2018.2021. The total intrinsic value of unit options exercised during the years ended December 31, 2018, 20172021, 2020 and 2016 were $0.22019 was $2.0 million, $0.7$0.0 million, and $2.8$0.1 million, respectively.
In addition, approximately 240275 employees are covered by union-sponsored, multi-employer pension plans for which approximately $1.8$1.9 million, $1.8$2.0 million and $1.7$2.0 million were contributed for the years ended December 31, 2018, 20172021, 2020 and 2016,2019, respectively. The Partnership hasWe have no plans to withdraw from any of the multi-employer plans. The Partnership believes that the liability resulting from any such withdrawal, as defined by the Multi-employer Pension Plan Amendments Act of 1980, would not be material.
Federal and state tax legislation in 1997 provided a permanent income tax exemption to existing publicly traded partnerships (PTP), such as Cedar Fair, L.P., with a PTP tax levied on partnership gross income (net revenues less cost of food, merchandise and games) beginning in 1998. In addition, income taxes are recognized for the amount of income taxes payable by the Partnership'sCedar Fair, L.P. and its corporate subsidiaries for the current year and for the impact of deferred tax assets and liabilities that represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes. As such, the Partnership's "Provision (benefit) for taxes" includes amounts for both the PTP tax and for federal, state, local and foreign income taxes on the Partnership's corporate subsidiaries.taxes.
The Partnership's 20182021 tax provision totaled $34.7$20.0 million, which consisted of an $11.6a $10.3 million provision for the PTP tax and a $23.1$9.7 million provision for income taxes. This comparescompared with the Partnership's 2017a 2020 tax provisionbenefit of $1.1$137.9 million, which consisted of an $11.1a $2.5 million provision for the PTP tax and a $10.0$140.4 million benefit for income taxes, and the 2016a 2019 tax provision of $71.4$42.8 million, which consisted of an $11.4a $12.1 million provision for the PTP tax and a $60.0$30.7 million provision for income taxes. The calculation of the tax provision (benefit) involves significant estimates and assumptions and actualassumptions. Actual results could differ from those estimates.
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Significant components of (loss) income before taxes for the years ended December 31, 2018, 20172021, 2020 and 20162019 were as follows:
| (In thousands) | 2018 | 2017 | 2016 | (In thousands) | 2021 | 2020 | 2019 | |||||||||||||||||||||||||
| Domestic | $ | 185,749 | $ | 171,382 | $ | 223,626 | Domestic | $ | (3,603) | $ | (675,746) | $ | 167,510 | |||||||||||||||||||
| Foreign | (24,353 | ) | 45,206 | 25,480 | Foreign | (24,880) | (52,412) | 47,644 | ||||||||||||||||||||||||
| Total income before taxes | $ | 161,396 | $ | 216,588 | $ | 249,106 | ||||||||||||||||||||||||||
| Total (loss) income before taxes | Total (loss) income before taxes | $ | (28,483) | $ | (728,158) | $ | 215,154 | |||||||||||||||||||||||||
The provision (benefit) for income taxes was comprised of the following for the years ended December 31, 2018, 20172021, 2020 and 2016:2019:
| (In thousands) | 2021 | 2020 | 2019 | |||||||||||||||||
| Current federal | $ | (21,438) | $ | (61,726) | $ | 22,745 | ||||||||||||||
| Current state and local | 1,395 | (3,747) | 6,261 | |||||||||||||||||
| Current foreign | 2,896 | (32,987) | 5,759 | |||||||||||||||||
| Total current | (17,147) | (98,460) | 34,765 | |||||||||||||||||
| Deferred federal, state and local | 17,870 | (43,220) | (5,953) | |||||||||||||||||
| Deferred foreign | 9,018 | 1,287 | 1,847 | |||||||||||||||||
| Total deferred | 26,888 | (41,933) | (4,106) | |||||||||||||||||
| Total provision (benefit) for income taxes | $ | 9,741 | $ | (140,393) | $ | 30,659 | ||||||||||||||
| (In thousands) | 2018 | 2017 | 2016 | |||||||||
| Income taxes: | ||||||||||||
| Current federal | $ | 2,682 | $ | 18,640 | $ | 40,440 | ||||||
| Current state and local | 4,901 | 4,631 | 5,729 | |||||||||
| Current foreign | 4,301 | 2,501 | 3,188 | |||||||||
| Total current | 11,884 | 25,772 | 49,357 | |||||||||
| Deferred federal, state and local | 15,525 | (41,133 | ) | 5,766 | ||||||||
| Deferred foreign | (4,266 | ) | 5,363 | 4,896 | ||||||||
| Total deferred | 11,259 | (35,770 | ) | 10,662 | ||||||||
| Total provision (benefit) for income taxes | $ | 23,143 | $ | (9,998 | ) | $ | 60,019 | |||||
The provision (benefit) for income taxes for the Partnership's corporate subsidiaries differsdiffered from the amount computed by applying the U.S. federal statutory income tax rate of 21% to the Partnership's(loss) income before taxes in 2018 (35% in 2017 and 2016).
taxes. The sources and tax effects of the differences were as follows:
| (In thousands) | 2018 | 2017 | 2016 | (In thousands) | 2021 | 2020 | 2019 | |||||||||||||||||||||||||
| Income tax provision based on the U.S. federal statutory tax rate | $ | 33,893 | $ | 75,806 | $ | 87,187 | Income tax provision based on the U.S. federal statutory tax rate | $ | (5,981) | $ | (152,913) | $ | 45,182 | |||||||||||||||||||
| Partnership income not includible in corporate income | (16,403 | ) | (23,644 | ) | (38,702 | ) | ||||||||||||||||||||||||||
| State and local taxes, net of federal income tax benefit | 5,278 | 4,878 | 6,323 | |||||||||||||||||||||||||||||
| Partnership loss (income) not subject to corporate income tax | Partnership loss (income) not subject to corporate income tax | 257 | 47,631 | (14,031) | ||||||||||||||||||||||||||||
| State and local taxes, net | State and local taxes, net | 776 | (20,594) | 4,906 | ||||||||||||||||||||||||||||
| Valuation allowance | 2,321 | (119 | ) | (1,473 | ) | Valuation allowance | 14,619 | 3,150 | 196 | |||||||||||||||||||||||
| Expired foreign tax credits | Expired foreign tax credits | 888 | 2,253 | — | ||||||||||||||||||||||||||||
| Tax credits | (1,300 | ) | (1,063 | ) | (1,066 | ) | Tax credits | (901) | (426) | (1,026) | ||||||||||||||||||||||
| Change in U.S. tax law | (8,730 | ) | (54,171 | ) | 7,366 | Change in U.S. tax law | (1,326) | (17,983) | 111 | |||||||||||||||||||||||
| Foreign currency translation (gains) losses | 7,949 | (10,756 | ) | — | ||||||||||||||||||||||||||||
| Foreign currency translation losses (gains) | Foreign currency translation losses (gains) | 1,143 | (1,455) | (4,707) | ||||||||||||||||||||||||||||
| Nondeductible expenses and other | 135 | (929 | ) | 384 | Nondeductible expenses and other | 266 | (56) | 28 | ||||||||||||||||||||||||
| Total provision (benefit) for income taxes | $ | 23,143 | $ | (9,998 | ) | $ | 60,019 | Total provision (benefit) for income taxes | $ | 9,741 | $ | (140,393) | $ | 30,659 | ||||||||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of deferred tax assets and liabilities as of December 31, 20182021 and December 31, 20172020 were as follows:
| (In thousands) | 2021 | 2020 | ||||||||||||
| Deferred tax assets: | ||||||||||||||
| Compensation | $ | 11,835 | $ | 5,800 | ||||||||||
| Accrued expenses | 5,051 | 5,408 | ||||||||||||
| Foreign tax credits | 8,392 | 8,765 | ||||||||||||
| Tax attribute carryforwards | 20,580 | 13,224 | ||||||||||||
| Derivatives | 5,021 | 9,771 | ||||||||||||
| Foreign currency | 2,523 | 5,318 | ||||||||||||
| Deferred revenue | 3,539 | 10,012 | ||||||||||||
| Deferred tax assets | 56,941 | 58,298 | ||||||||||||
| Valuation allowance | (24,374) | (9,755) | ||||||||||||
| Net deferred tax assets | 32,567 | 48,543 | ||||||||||||
| Deferred tax liabilities: | ||||||||||||||
| Property | (78,062) | (68,256) | ||||||||||||
| Intangibles | (20,988) | (19,882) | ||||||||||||
| Deferred tax liabilities | (99,050) | (88,138) | ||||||||||||
| Net deferred tax liability | $ | (66,483) | $ | (39,595) | ||||||||||
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| (In thousands) | 2018 | 2017 | ||||||
| Deferred tax assets: | ||||||||
| Compensation | $ | 5,899 | $ | 9,022 | ||||
| Accrued expenses | 3,932 | 4,647 | ||||||
| Foreign tax credits | 8,758 | 8,654 | ||||||
| Tax attribute carryforwards | 2,321 | 2,016 | ||||||
| Derivatives | 1,478 | 938 | ||||||
| Foreign currency | 8,965 | 5,443 | ||||||
| Deferred revenue | 2,521 | 2,653 | ||||||
| Deferred tax assets | 33,874 | 33,373 | ||||||
| Valuation allowance | (6,410 | ) | (4,088 | ) | ||||
| Net deferred tax assets | 27,464 | 29,285 | ||||||
| Deferred tax liabilities: | ||||||||
| Property | (94,847 | ) | (91,730 | ) | ||||
| Intangibles | (14,334 | ) | (12,353 | ) | ||||
| Deferred tax liabilities | (109,181 | ) | (104,083 | ) | ||||
| Net deferred tax liability | $ | (81,717 | ) | $ | (74,798 | ) | ||
As of December 31, 2018, the Partnership had2021, we recorded a $6.4$24.4 million valuation allowance which was a combination of three items. First, as of December 31, 2021, we had $20.6 million of tax attribute carryforwards consisting of $15.5 million for the tax effect of state net operating loss carryforwards, $2.5 million for the tax effect of business interest limitation carryforwards, $2.5 million for the tax effect of Canadian capital loss carryforwards and $0.1 million for the tax effect of Canadian net operating loss carryforwards. The unused state net operating loss carryforwards will expire from 2025 to 2040. We do not expect to fully realize all of these tax attribute carryforwards. As such, we recorded a $13.6 million valuation allowance relating to the tax effect of state net operating loss carryforwards as of December 31, 2021. This represented a $5.4 million increase in the valuation allowance from 2020 due to continuing losses in the corporate subsidiaries. Second, as of December 31, 2021, we recorded an $8.4 million valuation allowance related to an $8.8$8.4 million deferred tax asset for foreign tax credit carryforwards. During the fourth quarter of 2018, the Partnership recognizedThis represented a $2.3$6.8 million increase in the valuation allowance based on management's updated projection of futurefrom 2020 primarily due to overall foreign tax credit utilization. The valuation allowance had previously been reduced by $0.1 million for the year ended December 31, 2017.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into law. The CARES Act resulted in various changes to the U.S. tax law, including, among other things, allowing net operating losses arising in tax years 2018 through 2020 to be carried back to the preceding five taxable years and removing the limitation that such losses only offset 80% of taxable income. As a result of these changes, we expect to recognize two benefits. First, we expect to carryback the 2020 losses incurred by our corporate subsidiaries, which will result in the refund of a portion of federal income taxes paid during the carryback period of approximately $79.7 million as of December 31, 2021 and $55.4 million as of December 31, 2020. Second, as of December 31, 2021 and December 31, 2020, the annual effective tax rate included a net benefit of $1.7 million and $18.1 million, respectively, from carrying back the projected 2020 losses of the corporate subsidiaries. This tax benefit represents an estimated incremental benefit of tax loss carryforwards. Unused statecarrybacks for periods when the federal income tax rate was greater than the current 21% rate. The overall benefit of the carryback of losses was decreased by $4.7 million and $16.1 million as of December 31, 2021 and December 31, 2020, respectively, for a projected valuation allowance on foreign tax credits originally utilized during the carryback period which would be released as a result of the loss carryback but which are not expected to be utilized.
As of December 31, 2021 and December 31, 2020, $79.7 million and $55.4 million in tax refunds, respectively, attributable to the net operating loss carryforwards will expire from 2019in the 2020 tax year being carried back to 2028. The Partnership expectsprior years in the United States, and an additional $9.5 million and $11.9 million in tax refunds, respectively, attributable to fully realizethe net operating loss of our Canadian corporate subsidiary being carried back to prior years in Canada, were recorded within "Current income tax receivable" in the consolidated balance sheet. We initially anticipated receiving these tax attribute carryforwards.refunds in the fourth quarter of 2021. As such, no valuation allowance has been recorded relating toof December 31, 2021, we anticipate receiving these tax attribute carryforwards.refunds during 2022. These amounts were offset by accrued tax payments within the same jurisdictions for tax year 2021.
During the year ended December 31, 2020, additional benefits from the CARES Act included an $8.2 million deferral of the employer's share of Social Security taxes and $3.7 million in tax benefits from the Employee Retention Credit program. We also received $0.5 million in tax benefits from the Employee Retention Credit program during the year ended December 31, 2021. The Partnership hasdeferral of the employer's share of Social Security taxes is payable in 50% increments in the fourth quarter of 2021 and the fourth quarter of 2022. The current portion of the deferral was included within "Accrued salaries, wages and benefits" and the 2020 non-current portion of the deferral was included within "Other Liabilities" within the consolidated balance sheets. The tax benefits from the Employee Retention Credit program were recorded as a reduction to wage expense within the consolidated statement of operations and comprehensive (loss) income as the benefits were offered to defray labor costs during the COVID-19 pandemic.
We also received $5.1 million and $5.0 million from the Canada Emergency Wage Subsidy ("CEWS") during the years ended December 31, 2021 and December 31, 2020, respectively. The CEWS provides cash payments to Canadian employers that experienced a decline in revenues related to the COVID-19 pandemic. We also recorded the CEWS payments as a reduction to wage expense within the consolidated statement of operations and comprehensive (loss) income as the payments were offered to defray labor costs during the COVID-19 pandemic.
We have recorded a deferred tax liability of $0.5$3.3 million and $3.2 million as of December 31, 20182021 and December 31, 2020, respectively, to account for foreign currency translation adjustments and a deferred tax liability of $3.2 million as of December 31, 2017 to account for the tax effect of derivatives and foreign currency translation adjustments included in other comprehensive income.
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We are subject to taxation in the U.S., Canada and various state and local jurisdictions. TheOur tax returns of the Partnership are subject to examination by state and federal tax authorities. With few exceptions, the Partnership and its corporate subsidiarieswe are no longer subject to examination by the major taxing authorities for tax years before 2014.2017.
Our most significant lease commitments include office space for our corporate office in Charlotte, North Carolina and Contingencies:
the land on which Schlitterbahn Waterpark Galveston is located. The Partnershipcorporate office space is leased through 2029. The Schlitterbahn Waterpark Galveston land lease has commitments underan initial term through 2024 with renewal options through 2049. We have also entered into various operating leases at its parks. Future minimumfor office equipment, vehicles, storage and revenue-generating assets. As a lessor, we lease payments under non-cancelable operating leases asa portion of December 31, 2018 were as follows:
| (In thousands) | Future Minimum Lease Payments | ||
| Year: | |||
| 2019 | $ | 7,563 | |
| 2020 | 6,494 | ||
| 2021 | 5,742 | ||
| 2022 | 5,438 | ||
| 2023 | 5,366 | ||
| Thereafter | 85,689 | ||
| Total | $ | 116,292 | |
Prior to the second quarter of 2019, our most significant lease commitment was for the land lease to purchaseon which California's Great America is located in the City of Santa Clara, which had an initial term through 2039 with renewal options through 2074. On June 28, 2019, we purchased the land at California's Great America from the lessor, the City of Santa Clara, for $150$150.3 million. The Partnership is in
Total lease cost and related supplemental information for the process of negotiatingyears ended December 31, 2021, 2020 and 2019 were as follows:
| Years Ended December 31, | ||||||||||||||||||||||||||
| (In thousands, except for lease term and discount rate) | 2021 | 2020 | 2019 | |||||||||||||||||||||||
| Operating lease expense | $ | 2,711 | $ | 2,797 | $ | 5,623 | ||||||||||||||||||||
| Variable lease expense | 872 | 173 | 1,579 | |||||||||||||||||||||||
| Short-term lease expense | 7,563 | 2,205 | 6,635 | |||||||||||||||||||||||
| Sublease income | — | — | (244) | |||||||||||||||||||||||
| Total lease cost | $ | 11,146 | $ | 5,175 | $ | 13,593 | ||||||||||||||||||||
| Weighted-average remaining lease term | 14.1 years | 16.8 years | 16.7 years | |||||||||||||||||||||||
| Weighted-average discount rate | 3.7 | % | 4.1 | % | 4.2 | % | ||||||||||||||||||||
| Operating cash flows for operating leases | $ | 2,299 | $ | 2,679 | $ | 5,494 | ||||||||||||||||||||
| Leased assets obtained in exchange for new operating lease liabilities (non-cash activity) | $ | 4,914 | $ | 1,769 | $ | 5,512 | ||||||||||||||||||||
Future undiscounted cash flows under our operating leases and a purchase agreement to acquire the land, which will be subjectreconciliation to the approval of the Successor Agency to the Redevelopment Agency of the City of Santa Clara and the Oversight Board for Successor Agency to the City of Santa Clara Redevelopment Agency and certain other conditions. The Partnership also is evaluating different options to finance the purchase. If the Partnership acquires the land, following the purchase, the Partnership anticipates the remaining operating lease commitments would be immaterial to the consolidated financial statements.liabilities recognized as of December 31, 2021 are included below:
| (In thousands) | December 31, 2021 | |||||||
| Undiscounted cash flows | ||||||||
| 2022 | $ | 2,467 | ||||||
| 2023 | 2,158 | |||||||
| 2024 | 1,742 | |||||||
| 2025 | 1,635 | |||||||
| 2026 | 1,393 | |||||||
| Thereafter | 10,769 | |||||||
| Total | $ | 20,164 | ||||||
| Present value of cash flows | ||||||||
| Current lease liability | $ | 1,962 | ||||||
| Lease Liability | 13,345 | |||||||
| Total | $ | 15,307 | ||||||
| Difference between undiscounted cash flows and discounted cash flows | $ | 4,857 | ||||||
57
| (In thousands) | December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||||
| Consolidated Balance Sheet Location | Fair Value Hierarchy Level | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||||||
| Financial assets (liabilities) measured on a recurring basis: | |||||||||||||||||||||||||||||
| Short-term investments | Other current assets | Level 1 | $ | 478 | $ | 478 | $ | 280 | $ | 280 | |||||||||||||||||||
| Interest rate swaps | Derivative Liability | Level 2 | $ | (20,086) | $ | (20,086) | $ | (39,086) | $ | (39,086) | |||||||||||||||||||
| Other financial assets (liabilities): | |||||||||||||||||||||||||||||
| Term debt | Long-Term Debt (1) | Level 2 | $ | (264,250) | $ | (257,644) | $ | (264,250) | $ | (253,680) | |||||||||||||||||||
| 2024 senior notes | Long-Term Debt (1) | Level 1 | — | — | $ | (450,000) | $ | (451,125) | |||||||||||||||||||||
| 2025 senior notes | Long-Term Debt (1) | Level 2 | $ | (1,000,000) | $ | (1,035,000) | $ | (1,000,000) | $ | (1,043,750) | |||||||||||||||||||
| 2027 senior notes | Long-Term Debt (1) | Level 1 | $ | (500,000) | $ | (513,750) | $ | (500,000) | $ | (507,500) | |||||||||||||||||||
| 2028 senior notes | Long-Term Debt (1) | Level 1 (2) | $ | (300,000) | $ | (319,125) | $ | (300,000) | $ | (318,000) | |||||||||||||||||||
| 2029 senior notes | Long-Term Debt (1) | Level 1 | $ | (500,000) | $ | (513,750) | $ | (500,000) | $ | (505,625) | |||||||||||||||||||
| (In thousands) | December 31, 2018 | December 31, 2017 | |||||||||||||||
| Consolidated Balance Sheet Location | Fair Value Hierarchy Level | Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
| Financial assets (liabilities) measured on a recurring basis: | |||||||||||||||||
| Short-term investments | Other current assets | Level 1 | $ | 511 | $ | 511 | $ | 736 | $ | 736 | |||||||
| Interest rate swaps | Derivative Liability | Level 2 | $ | (6,705 | ) | $ | (6,705 | ) | $ | (8,722 | ) | $ | (8,722 | ) | |||
| Other financial assets (liabilities): | |||||||||||||||||
| April 2017 term debt | Long-Term Debt (1) | Level 2 | $ | (729,375 | ) | $ | (707,494 | ) | $ | (735,000 | ) | $ | (742,350 | ) | |||
| April 2017 notes | Long-Term Debt (1) | Level 1 (2) | $ | (500,000 | ) | $ | (475,000 | ) | $ | (500,000 | ) | $ | (525,000 | ) | |||
| June 2014 notes | Long-Term Debt (1) | Level 1 | $ | (450,000 | ) | $ | (441,000 | ) | $ | (450,000 | ) | $ | (469,125 | ) | |||
(2)The 2028 senior notes were based on Level 1 inputs as of December 31, 2021 and Level 2 inputs as of December 31, 2020.
Fair values of the interest rate swap agreements are determined using significant inputs, including LIBOR forward curves, which are considered Level 2 observable market inputs.
The fair value determination for our long-lived assets, reporting units and indefinite-lived intangible assets included numerous assumptions based on Level 3 inputs. The fair value of our long-lived assets was determined using a real and personal property appraisal of which the principal assumptions included the principal market and market participants upon sale. The primary assumptions used to determine the fair value of our reporting units included growth rates in revenues and costs, estimates of future expected changes in operating margins and cash expenditures, the anticipated time frame to re-open our parks, the related anticipated demand upon re-opening our parks, terminal value growth rates, future estimates of capital expenditures, changes in future capital requirements, and a weighted-average cost of capital that reflected current market conditions. The fair value of our indefinite-lived intangible assets was determined using a relief-from-royalty method of which the principal assumptions included royalty rates, growth rates in revenues, estimates of future expected changes in operating margins, the anticipated time frame to re-open our parks, the related anticipated demand upon re-opening our parks, terminal value growth rates, and a discount rate based on a weighted-average cost of capital that reflected current market conditions.
The carrying value of cash and cash equivalents, accounts receivable, current portion of term debt, 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 as of December 31, 2018.
58
| Changes in Accumulated Other Comprehensive Income by Component | ||||||||||||
| (In thousands) | Losses on Cash Flow Hedges | Foreign Currency Translation | Total | |||||||||
| Balance as of December 31, 2015 | $ | (19,300 | ) | $ | 22,591 | $ | 3,291 | |||||
| Other comprehensive income before reclassifications, net of tax $711 and $2,127 | (3,960 | ) | (3,700 | ) | (7,660 | ) | ||||||
| Amounts reclassified from accumulated other comprehensive income, net of tax ($1,361) | 7,310 | — | 7,310 | |||||||||
| Balance as of December 31, 2016 | $ | (15,950 | ) | $ | 18,891 | $ | 2,941 | |||||
| Other comprehensive income before reclassifications, net of tax ($4,330) | — | (14,849 | ) | (14,849 | ) | |||||||
| Amounts reclassified from accumulated other comprehensive income, net of tax ($1,484) | 7,975 | — | 7,975 | |||||||||
| Balance as of December 31, 2017 | $ | (7,975 | ) | $ | 4,042 | $ | (3,933 | ) | ||||
| Other comprehensive income before reclassifications, net of tax $3,862 | — | 17,240 | 17,240 | |||||||||
| Amounts reclassified from accumulated other comprehensive income, net of tax ($1,094) | 8,366 | — | 8,366 | |||||||||
| Reclassification of stranded tax effect | (391 | ) | — | (391 | ) | |||||||
| Balance as of December 31, 2018 | $ | — | $ | 21,282 | $ | 21,282 | ||||||
| Reclassifications Out of Accumulated Other Comprehensive Income | |||||||||||||
| (In thousands) | Affected Income Statement Location | Years Ended December 31, | |||||||||||
| AOCI Component | 2018 | 2017 | 2016 | ||||||||||
| Interest rate contracts | Net effect of swaps | $ | 9,460 | $ | 9,459 | $ | 8,671 | ||||||
| Provision for taxes | Provision for taxes | (1,094 | ) | (1,484 | ) | (1,361 | ) | ||||||
| Losses on cash flow hedges | Net of tax | $ | 8,366 | $ | 7,975 | $ | 7,310 | ||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Current Assets: | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | — | $ | — | $ | 73,326 | $ | 32,715 | $ | (692 | ) | $ | 105,349 | |||||||||||
| Receivables | — | 1,093 | 34,497 | 938,397 | (922,469 | ) | 51,518 | |||||||||||||||||
| Inventories | — | — | 2,135 | 28,618 | — | 30,753 | ||||||||||||||||||
| Other current assets | 179 | 1,411 | 5,462 | 10,544 | (5,007 | ) | 12,589 | |||||||||||||||||
| 179 | 2,504 | 115,420 | 1,010,274 | (928,168 | ) | 200,209 | ||||||||||||||||||
| Property and Equipment, net | — | 802 | 172,344 | 1,426,292 | — | 1,599,438 | ||||||||||||||||||
| Investment in Park | 601,706 | 1,182,345 | 262,462 | 218,575 | (2,265,088 | ) | — | |||||||||||||||||
| Goodwill | 674 | — | 58,440 | 119,605 | — | 178,719 | ||||||||||||||||||
| Other Intangibles, net | — | — | 13,030 | 23,346 | — | 36,376 | ||||||||||||||||||
| Deferred Tax Asset | — | 18,224 | — | — | (18,224 | ) | — | |||||||||||||||||
| Other Assets | — | — | 36 | 9,405 | — | 9,441 | ||||||||||||||||||
| $ | 602,559 | $ | 1,203,875 | $ | 621,732 | $ | 2,807,497 | $ | (3,211,480 | ) | $ | 2,024,183 | ||||||||||||
| LIABILITIES AND PARTNERS’ EQUITY | ||||||||||||||||||||||||
| Current Liabilities: | ||||||||||||||||||||||||
| Current maturities of long-term debt | $ | — | $ | 984 | $ | — | $ | 4,641 | $ | — | $ | 5,625 | ||||||||||||
| Accounts payable | 565,472 | 359,953 | 2,430 | 18,620 | (923,161 | ) | 23,314 | |||||||||||||||||
| Deferred revenue | — | — | 8,460 | 98,614 | — | 107,074 | ||||||||||||||||||
| Accrued interest | 1 | 1 | 2,054 | 5,871 | — | 7,927 | ||||||||||||||||||
| Accrued taxes | 443 | 6,668 | — | 27,487 | (5,007 | ) | 29,591 | |||||||||||||||||
| Accrued salaries, wages and benefits | — | 17,552 | 1,234 | — | — | 18,786 | ||||||||||||||||||
| Self-insurance reserves | — | 10,214 | 1,433 | 12,374 | — | 24,021 | ||||||||||||||||||
| Other accrued liabilities | 3,318 | 4,903 | 136 | 10,024 | — | 18,381 | ||||||||||||||||||
| 569,234 | 400,275 | 15,747 | 177,631 | (928,168 | ) | 234,719 | ||||||||||||||||||
| Deferred Tax Liability | — | — | 12,425 | 87,516 | (18,224 | ) | 81,717 | |||||||||||||||||
| Derivative Liability | 909 | 5,796 | — | — | — | 6,705 | ||||||||||||||||||
| Other Liabilities | — | 1,169 | — | 9,889 | — | 11,058 | ||||||||||||||||||
| Long-Term Debt: | ||||||||||||||||||||||||
| Term debt | — | 126,525 | — | 592,982 | — | 719,507 | ||||||||||||||||||
| Notes | — | — | 446,241 | 491,820 | — | 938,061 | ||||||||||||||||||
| — | 126,525 | 446,241 | 1,084,802 | — | 1,657,568 | |||||||||||||||||||
| Equity | 32,416 | 670,110 | 147,319 | 1,447,659 | (2,265,088 | ) | 32,416 | |||||||||||||||||
| $ | 602,559 | $ | 1,203,875 | $ | 621,732 | $ | 2,807,497 | $ | (3,211,480 | ) | $ | 2,024,183 | ||||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Current Assets: | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | — | $ | — | $ | 85,758 | $ | 81,582 | $ | (1,095 | ) | $ | 166,245 | |||||||||||
| Receivables | — | 1,184 | 15,574 | 857,205 | (836,241 | ) | 37,722 | |||||||||||||||||
| Inventories | — | — | 1,891 | 27,828 | — | 29,719 | ||||||||||||||||||
| Other current assets | 164 | 28,297 | 3,454 | 10,983 | (29,601 | ) | 13,297 | |||||||||||||||||
| 164 | 29,481 | 106,677 | 977,598 | (866,937 | ) | 246,983 | ||||||||||||||||||
| Property and Equipment, net | — | 835 | 181,673 | 1,403,264 | — | 1,585,772 | ||||||||||||||||||
| Investment in Park | 588,684 | 1,045,640 | 238,132 | 234,238 | (2,106,694 | ) | — | |||||||||||||||||
| Goodwill | 674 | — | 63,551 | 119,605 | — | 183,830 | ||||||||||||||||||
| Other Intangibles, net | — | — | 14,177 | 23,887 | — | 38,064 | ||||||||||||||||||
| Deferred Tax Asset | — | 20,956 | — | — | (20,956 | ) | — | |||||||||||||||||
| Other Assets | — | — | 40 | 9,470 | — | 9,510 | ||||||||||||||||||
| $ | 589,522 | $ | 1,096,912 | $ | 604,250 | $ | 2,768,062 | $ | (2,994,587 | ) | $ | 2,064,159 | ||||||||||||
| LIABILITIES AND PARTNERS’ EQUITY | ||||||||||||||||||||||||
| Current Liabilities: | ||||||||||||||||||||||||
| Accounts payable | $ | 497,558 | $ | 344,410 | $ | 1,379 | $ | 18,610 | $ | (837,336 | ) | $ | 24,621 | |||||||||||
| Deferred revenue | — | — | 6,237 | 79,894 | — | 86,131 | ||||||||||||||||||
| Accrued interest | 27 | 18 | 2,055 | 6,024 | — | 8,124 | ||||||||||||||||||
| Accrued taxes | 352 | — | — | 73,224 | (29,601 | ) | 43,975 | |||||||||||||||||
| Accrued salaries, wages and benefits | — | 17,498 | 1,242 | — | — | 18,740 | ||||||||||||||||||
| Self-insurance reserves | — | 10,947 | 1,618 | 12,542 | — | 25,107 | ||||||||||||||||||
| Other accrued liabilities | 3,406 | 5,094 | 157 | 10,139 | — | 18,796 | ||||||||||||||||||
| 501,343 | 377,967 | 12,688 | 200,433 | (866,937 | ) | 225,494 | ||||||||||||||||||
| Deferred Tax Liability | — | — | 13,809 | 81,945 | (20,956 | ) | 74,798 | |||||||||||||||||
| Derivative Liability | 5,233 | 3,489 | — | — | — | 8,722 | ||||||||||||||||||
| Other Liabilities | — | 873 | — | 10,811 | — | 11,684 | ||||||||||||||||||
| Long-Term Debt: | ||||||||||||||||||||||||
| Term debt | — | 127,437 | — | 596,351 | — | 723,788 | ||||||||||||||||||
| Notes | — | — | 445,156 | 491,571 | — | 936,727 | ||||||||||||||||||
| — | 127,437 | 445,156 | 1,087,922 | — | 1,660,515 | |||||||||||||||||||
| Equity | 82,946 | 587,146 | 132,597 | 1,386,951 | (2,106,694 | ) | 82,946 | |||||||||||||||||
| $ | 589,522 | $ | 1,096,912 | $ | 604,250 | $ | 2,768,062 | $ | (2,994,587 | ) | $ | 2,064,159 | ||||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||||||
| Net revenues | $ | 103,687 | $ | 336,778 | $ | 124,506 | $ | 1,268,200 | $ | (484,641 | ) | $ | 1,348,530 | |||||||||||
| Costs and expenses: | ||||||||||||||||||||||||
| Cost of food, merchandise and games revenues | — | — | 10,841 | 103,892 | — | 114,733 | ||||||||||||||||||
| Operating expenses | — | 328,709 | 47,551 | 692,731 | (484,641 | ) | 584,350 | |||||||||||||||||
| Selling, general and administrative | 2,301 | 67,582 | 10,586 | 112,864 | — | 193,333 | ||||||||||||||||||
| Depreciation and amortization | — | 33 | 15,273 | 140,223 | — | 155,529 | ||||||||||||||||||
| Loss on impairment / retirement of fixed assets, net | — | — | 221 | 9,957 | — | 10,178 | ||||||||||||||||||
| Gain on sale of investment | — | (112 | ) | — | — | — | (112 | ) | ||||||||||||||||
| 2,301 | 396,212 | 84,472 | 1,059,667 | (484,641 | ) | 1,058,011 | ||||||||||||||||||
| Operating income (loss) | 101,386 | (59,434 | ) | 40,034 | 208,533 | — | 290,519 | |||||||||||||||||
| Interest expense, net | 23,339 | 18,331 | 23,988 | 18,514 | — | 84,172 | ||||||||||||||||||
| Net effect of swaps | 1,228 | 6,214 | — | — | — | 7,442 | ||||||||||||||||||
| Loss on early debt extinguishment | — | 187 | — | 886 | — | 1,073 | ||||||||||||||||||
| Loss on foreign currency | — | 51 | 36,203 | — | — | 36,254 | ||||||||||||||||||
| Other (income) expense | 250 | (78,571 | ) | 4,196 | 74,307 | — | 182 | |||||||||||||||||
| (Income) loss from investment in affiliates | (61,484 | ) | (62,244 | ) | (24,329 | ) | 2,517 | 145,540 | — | |||||||||||||||
| Income (loss) before taxes | 138,053 | 56,598 | (24 | ) | 112,309 | (145,540 | ) | 161,396 | ||||||||||||||||
| Provision (benefit) for taxes | 11,400 | (4,886 | ) | 2,494 | 25,735 | — | 34,743 | |||||||||||||||||
| Net income (loss) | $ | 126,653 | $ | 61,484 | $ | (2,518 | ) | $ | 86,574 | $ | (145,540 | ) | $ | 126,653 | ||||||||||
| Other comprehensive income (loss), (net of tax): | ||||||||||||||||||||||||
| Cumulative foreign currency translation adjustment | 17,240 | — | 17,240 | — | (17,240 | ) | 17,240 | |||||||||||||||||
| Cash flow hedging derivative activity | 8,366 | 2,813 | — | — | (2,813 | ) | 8,366 | |||||||||||||||||
| Other comprehensive income (loss), (net of tax) | 25,606 | 2,813 | 17,240 | — | (20,053 | ) | 25,606 | |||||||||||||||||
| Total comprehensive income | $ | 152,259 | $ | 64,297 | $ | 14,722 | $ | 86,574 | $ | (165,593 | ) | $ | 152,259 | |||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||||||
| Net revenues | $ | 104,080 | $ | 317,496 | $ | 127,929 | $ | 1,239,067 | $ | (466,605 | ) | $ | 1,321,967 | |||||||||||
| Costs and expenses: | ||||||||||||||||||||||||
| Cost of food, merchandise and games revenues | — | — | 11,483 | 99,328 | — | 110,811 | ||||||||||||||||||
| Operating expenses | — | 313,654 | 44,990 | 666,063 | (466,605 | ) | 558,102 | |||||||||||||||||
| Selling, general and administrative | 3,007 | 67,872 | 10,497 | 112,394 | — | 193,770 | ||||||||||||||||||
| Depreciation and amortization | — | 33 | 15,654 | 137,535 | — | 153,222 | ||||||||||||||||||
| Loss on impairment / retirement of fixed assets, net | — | — | 656 | 12,072 | — | 12,728 | ||||||||||||||||||
| Gain on sale of investment | — | (1,877 | ) | — | — | — | (1,877 | ) | ||||||||||||||||
| 3,007 | 379,682 | 83,280 | 1,027,392 | (466,605 | ) | 1,026,756 | ||||||||||||||||||
| Operating income (loss) | 101,073 | (62,186 | ) | 44,649 | 211,675 | — | 295,211 | |||||||||||||||||
| Interest expense, net | 23,739 | 18,837 | 24,839 | 17,333 | — | 84,748 | ||||||||||||||||||
| Net effect of swaps | (150 | ) | 105 | — | — | — | (45 | ) | ||||||||||||||||
| Loss on early debt extinguishment | 11,773 | 8,188 | 205 | 2,955 | — | 23,121 | ||||||||||||||||||
| Gain on foreign currency | — | (25 | ) | (29,061 | ) | — | — | (29,086 | ) | |||||||||||||||
| Other (income) expense | 250 | (73,581 | ) | 3,460 | 69,756 | — | (115 | ) | ||||||||||||||||
| Income from investment in affiliates | (160,925 | ) | (176,698 | ) | (38,057 | ) | (84,398 | ) | 460,078 | — | ||||||||||||||
| Income before taxes | 226,386 | 160,988 | 83,263 | 206,029 | (460,078 | ) | 216,588 | |||||||||||||||||
| Provision (benefit) for taxes | 10,910 | 60 | (1,134 | ) | (8,724 | ) | — | 1,112 | ||||||||||||||||
| Net income | $ | 215,476 | $ | 160,928 | $ | 84,397 | $ | 214,753 | $ | (460,078 | ) | $ | 215,476 | |||||||||||
| Other comprehensive income (loss), (net of tax): | ||||||||||||||||||||||||
| Cumulative foreign currency translation adjustment | (14,849 | ) | — | (14,849 | ) | — | 14,849 | (14,849 | ) | |||||||||||||||
| Cash flow hedging derivative activity | 7,975 | 2,422 | — | — | (2,422 | ) | 7,975 | |||||||||||||||||
| Other comprehensive income (loss), (net of tax) | (6,874 | ) | 2,422 | (14,849 | ) | — | 12,427 | (6,874 | ) | |||||||||||||||
| Total comprehensive income | $ | 208,602 | $ | 163,350 | $ | 69,548 | $ | 214,753 | $ | (447,651 | ) | $ | 208,602 | |||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||||||
| Net revenues | $ | 144,042 | $ | 320,945 | $ | 117,962 | $ | 1,234,075 | $ | (528,303 | ) | $ | 1,288,721 | |||||||||||
| Costs and expenses: | ||||||||||||||||||||||||
| Cost of food, merchandise and games revenues | — | — | 9,868 | 96,740 | — | 106,608 | ||||||||||||||||||
| Operating expenses | — | 303,974 | 42,820 | 720,390 | (528,303 | ) | 538,881 | |||||||||||||||||
| Selling, general and administrative | 3,029 | 68,422 | 10,151 | 100,228 | — | 181,830 | ||||||||||||||||||
| Depreciation and amortization | — | 35 | 14,816 | 117,025 | — | 131,876 | ||||||||||||||||||
| Loss on impairment / retirement of fixed assets, net | — | — | 159 | 12,428 | — | 12,587 | ||||||||||||||||||
| 3,029 | 372,431 | 77,814 | 1,046,811 | (528,303 | ) | 971,782 | ||||||||||||||||||
| Operating income (loss) | 141,013 | (51,486 | ) | 40,148 | 187,264 | — | 316,939 | |||||||||||||||||
| Interest expense, net | 32,643 | 24,114 | 25,403 | 1,526 | — | 83,686 | ||||||||||||||||||
| Net effect of swaps | (473 | ) | (724 | ) | — | — | — | (1,197 | ) | |||||||||||||||
| (Gain) loss on foreign currency | — | — | (14,660 | ) | 4 | — | (14,656 | ) | ||||||||||||||||
| Other (income) expense | 250 | (83,657 | ) | 3,925 | 79,482 | — | — | |||||||||||||||||
| Income from investment in affiliates | (80,295 | ) | (73,132 | ) | (20,545 | ) | (27,628 | ) | 201,600 | — | ||||||||||||||
| Income before taxes | 188,888 | 81,913 | 46,025 | 133,880 | (201,600 | ) | 249,106 | |||||||||||||||||
| Provision for taxes | 11,200 | 1,621 | 18,396 | 40,201 | — | 71,418 | ||||||||||||||||||
| Net income | $ | 177,688 | $ | 80,292 | $ | 27,629 | $ | 93,679 | $ | (201,600 | ) | $ | 177,688 | |||||||||||
| Other comprehensive income (loss), (net of tax): | ||||||||||||||||||||||||
| Cumulative foreign currency translation adjustment | (3,700 | ) | — | (3,700 | ) | — | 3,700 | (3,700 | ) | |||||||||||||||
| Cash flow hedging derivative activity | 3,350 | 1,060 | — | — | (1,060 | ) | 3,350 | |||||||||||||||||
| Other comprehensive income (loss), (net of tax) | (350 | ) | 1,060 | (3,700 | ) | — | 2,640 | (350 | ) | |||||||||||||||
| Total comprehensive income | $ | 177,338 | $ | 81,352 | $ | 23,929 | $ | 93,679 | $ | (198,960 | ) | $ | 177,338 | |||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||||||
| NET CASH FROM OPERATING ACTIVITIES | $ | 136,471 | $ | 11,057 | $ | 12,901 | $ | 191,056 | $ | (745 | ) | $ | 350,740 | |||||||||||
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | ||||||||||||||||||||||||
| Intercompany receivables (payments) receipts | — | — | — | (67,861 | ) | 67,861 | — | |||||||||||||||||
| Purchase of identifiable intangible assets | — | — | — | (41 | ) | — | (41 | ) | ||||||||||||||||
| Sale of preferred equity investment | — | 112 | — | — | — | 112 | ||||||||||||||||||
| Capital expenditures | — | — | (19,976 | ) | (169,799 | ) | — | (189,775 | ) | |||||||||||||||
| Net cash from (for) investing activities | — | 112 | (19,976 | ) | (237,701 | ) | 67,861 | (189,704 | ) | |||||||||||||||
| CASH FLOWS FOR FINANCING ACTIVITIES | ||||||||||||||||||||||||
| Intercompany payables (payments) receipts | 67,876 | (15 | ) | — | — | (67,861 | ) | — | ||||||||||||||||
| Distributions paid to partners | (204,347 | ) | — | — | — | 1,148 | (203,199 | ) | ||||||||||||||||
| Payment of debt issuance costs and original issue discount | — | (321 | ) | — | (2,222 | ) | — | (2,543 | ) | |||||||||||||||
| Exercise of limited partnership unit options | — | 125 | — | — | — | 125 | ||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | — | (2,530 | ) | — | — | — | (2,530 | ) | ||||||||||||||||
| Payments related to tax withholding for equity compensation | — | (8,428 | ) | — | — | — | (8,428 | ) | ||||||||||||||||
| Net cash for financing activities | (136,471 | ) | (11,169 | ) | — | (2,222 | ) | (66,713 | ) | (216,575 | ) | |||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | (5,357 | ) | — | — | (5,357 | ) | ||||||||||||||||
| CASH AND CASH EQUIVALENTS | ||||||||||||||||||||||||
| Net decrease for the year | — | — | (12,432 | ) | (48,867 | ) | 403 | (60,896 | ) | |||||||||||||||
| Balance, beginning of year | — | — | 85,758 | 81,582 | (1,095 | ) | 166,245 | |||||||||||||||||
| Balance, end of year | $ | — | $ | — | $ | 73,326 | $ | 32,715 | $ | (692 | ) | $ | 105,349 | |||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||||||
| NET CASH FROM (FOR) OPERATING ACTIVITIES | $ | 93,378 | $ | (10,710 | ) | $ | 40,569 | $ | 209,780 | $ | (1,838 | ) | $ | 331,179 | ||||||||||
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | ||||||||||||||||||||||||
| Intercompany receivables (payments) receipts | — | — | — | (278,051 | ) | 278,051 | — | |||||||||||||||||
| Proceeds from returns on investments | 338,000 | 15,500 | — | 146,500 | (500,000 | ) | — | |||||||||||||||||
| Purchase of identifiable intangible assets | — | — | — | (66 | ) | — | (66 | ) | ||||||||||||||||
| Proceeds from sale of preferred equity investment | — | 3,281 | — | — | — | 3,281 | ||||||||||||||||||
| Capital expenditures | — | (25 | ) | (10,160 | ) | (177,899 | ) | — | (188,084 | ) | ||||||||||||||
| Net cash from (for) investing activities | 338,000 | 18,756 | (10,160 | ) | (309,516 | ) | (221,949 | ) | (184,869 | ) | ||||||||||||||
| CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | ||||||||||||||||||||||||
| Intercompany payables (payments) receipts | 69,160 | 208,891 | — | — | (278,051 | ) | — | |||||||||||||||||
| Payments for returns of capital | — | — | — | (500,000 | ) | 500,000 | — | |||||||||||||||||
| Term debt borrowings | — | 131,000 | — | 619,000 | — | 750,000 | ||||||||||||||||||
| Note borrowings | — | — | — | 500,000 | — | 500,000 | ||||||||||||||||||
| Term debt payments | — | (126,619 | ) | (13,854 | ) | (477,377 | ) | — | (617,850 | ) | ||||||||||||||
| Note payments, including amounts paid for early termination | (304,014 | ) | (211,444 | ) | — | — | — | (515,458 | ) | |||||||||||||||
| Distributions paid to partners | (196,524 | ) | — | — | — | 1,768 | (194,756 | ) | ||||||||||||||||
| Payment of debt issuance costs | — | (1,326 | ) | — | (18,483 | ) | — | (19,809 | ) | |||||||||||||||
| Exercise of limited partnership unit options | — | 65 | — | — | — | 65 | ||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | — | (4,440 | ) | — | — | — | (4,440 | ) | ||||||||||||||||
| Payments related to tax withholding for equity compensation | — | (4,173 | ) | — | — | — | (4,173 | ) | ||||||||||||||||
| Net cash from (for) financing activities | (431,378 | ) | (8,046 | ) | (13,854 | ) | 123,140 | 223,717 | (106,421 | ) | ||||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | 3,640 | — | — | 3,640 | ||||||||||||||||||
| CASH AND CASH EQUIVALENTS | ||||||||||||||||||||||||
| Net increase for the year | — | — | 20,195 | 23,404 | (70 | ) | 43,529 | |||||||||||||||||
| Balance, beginning of year | — | — | 65,563 | 58,178 | (1,025 | ) | 122,716 | |||||||||||||||||
| Balance, end of year | $ | — | $ | — | $ | 85,758 | $ | 81,582 | $ | (1,095 | ) | $ | 166,245 | |||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Guarantor Subsidiaries | Eliminations | Total | |||||||||||||||||||
| NET CASH FROM (FOR) OPERATING ACTIVITIES | $ | 118,833 | $ | (28,315 | ) | $ | 33,918 | $ | 237,262 | $ | (3,351 | ) | $ | 358,347 | ||||||||||
| CASH FLOWS FOR INVESTING ACTIVITIES | ||||||||||||||||||||||||
| Intercompany receivables (payments) receipts | — | — | — | (24,562 | ) | 24,562 | — | |||||||||||||||||
| Purchase of identifiable intangible assets | — | — | (29 | ) | (548 | ) | — | (577 | ) | |||||||||||||||
| Capital expenditures | — | — | (7,863 | ) | (152,793 | ) | — | (160,656 | ) | |||||||||||||||
| Net cash for investing activities | — | — | (7,892 | ) | (177,903 | ) | 24,562 | (161,233 | ) | |||||||||||||||
| CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | ||||||||||||||||||||||||
| Term debt payments | — | (1,237 | ) | (138 | ) | (4,625 | ) | — | (6,000 | ) | ||||||||||||||
| Intercompany payables (payments) receipts | (6,332 | ) | 30,894 | — | — | (24,562 | ) | — | ||||||||||||||||
| Distributions paid to partners | (189,508 | ) | — | — | — | 2,326 | (187,182 | ) | ||||||||||||||||
| Tax effect of units involved in treasury unit transactions | — | (422 | ) | — | — | — | (422 | ) | ||||||||||||||||
| Payments related to tax withholding for equity compensation | — | (920 | ) | — | — | �� | — | (920 | ) | |||||||||||||||
| Net cash from (for) financing activities | (195,840 | ) | 28,315 | (138 | ) | (4,625 | ) | (22,236 | ) | (194,524 | ) | |||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | 569 | — | — | 569 | ||||||||||||||||||
| CASH AND CASH EQUIVALENTS | ||||||||||||||||||||||||
| Net increase (decrease) for the year | (77,007 | ) | — | 26,457 | 54,734 | (1,025 | ) | 3,159 | ||||||||||||||||
| Balance, beginning of year | 77,007 | — | 39,106 | 3,444 | — | 119,557 | ||||||||||||||||||
| Balance, end of year | $ | — | $ | — | $ | 65,563 | $ | 58,178 | $ | (1,025 | ) | $ | 122,716 | |||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Co-Issuer Subsidiary (Millennium) | Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||
| Current Assets: | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | — | $ | — | $ | 73,326 | $ | 30,663 | $ | 2,052 | $ | (692 | ) | $ | 105,349 | |||||||||||||
| Receivables | — | 1,093 | 34,497 | 36,242 | 902,155 | (922,469 | ) | 51,518 | ||||||||||||||||||||
| Inventories | — | — | 2,135 | 23,402 | 5,216 | — | 30,753 | |||||||||||||||||||||
| Other current assets | 179 | 1,411 | 5,462 | 8,980 | 1,564 | (5,007 | ) | 12,589 | ||||||||||||||||||||
| 179 | 2,504 | 115,420 | 99,287 | 910,987 | (928,168 | ) | 200,209 | |||||||||||||||||||||
| Property and Equipment, net | — | 802 | 172,344 | — | 1,426,292 | — | 1,599,438 | |||||||||||||||||||||
| Investment in Park | 601,706 | 1,182,345 | 262,462 | 1,517,897 | 218,574 | (3,782,984 | ) | — | ||||||||||||||||||||
| Goodwill | 674 | — | 58,440 | 8,388 | 111,217 | — | 178,719 | |||||||||||||||||||||
| Other Intangibles, net | — | — | 13,030 | — | 23,346 | — | 36,376 | |||||||||||||||||||||
| Deferred Tax Asset | — | 18,224 | — | — | — | (18,224 | ) | — | ||||||||||||||||||||
| Other Assets | — | — | 36 | 417 | 8,988 | — | 9,441 | |||||||||||||||||||||
| $ | 602,559 | $ | 1,203,875 | $ | 621,732 | $ | 1,625,989 | $ | 2,699,404 | $ | (4,729,376 | ) | $ | 2,024,183 | ||||||||||||||
| LIABILITIES AND PARTNERS’ EQUITY | ||||||||||||||||||||||||||||
| Current Liabilities: | ||||||||||||||||||||||||||||
| Current maturities of long-term debt | $ | — | $ | 984 | $ | — | $ | 4,641 | $ | — | $ | — | $ | 5,625 | ||||||||||||||
| Accounts payable | 565,472 | 359,953 | 2,430 | 14,995 | 3,625 | (923,161 | ) | 23,314 | ||||||||||||||||||||
| Deferred revenue | — | — | 8,460 | 74,062 | 24,552 | — | 107,074 | |||||||||||||||||||||
| Accrued interest | 1 | 1 | 2,054 | 5,871 | — | — | 7,927 | |||||||||||||||||||||
| Accrued taxes | 443 | 6,668 | — | 8,087 | 19,400 | (5,007 | ) | 29,591 | ||||||||||||||||||||
| Accrued salaries, wages and benefits | — | 17,552 | 1,234 | — | — | — | 18,786 | |||||||||||||||||||||
| Self-insurance reserves | — | 10,214 | 1,433 | 10,308 | 2,066 | — | 24,021 | |||||||||||||||||||||
| Other accrued liabilities | 3,318 | 4,903 | 136 | 5,471 | 4,553 | — | 18,381 | |||||||||||||||||||||
| 569,234 | 400,275 | 15,747 | 123,435 | 54,196 | (928,168 | ) | 234,719 | |||||||||||||||||||||
| Deferred Tax Liability | — | — | 12,425 | — | 87,516 | (18,224 | ) | 81,717 | ||||||||||||||||||||
| Derivative Liability | 909 | 5,796 | — | — | — | — | 6,705 | |||||||||||||||||||||
| Other Liabilities | — | 1,169 | — | 87 | 9,802 | — | 11,058 | |||||||||||||||||||||
| Long-Term Debt: | ||||||||||||||||||||||||||||
| Term debt | — | 126,525 | — | 592,982 | — | — | 719,507 | |||||||||||||||||||||
| Notes | — | — | 446,241 | 491,820 | — | — | 938,061 | |||||||||||||||||||||
| — | 126,525 | 446,241 | 1,084,802 | — | — | 1,657,568 | ||||||||||||||||||||||
| Equity | 32,416 | 670,110 | 147,319 | 417,665 | 2,547,890 | (3,782,984 | ) | 32,416 | ||||||||||||||||||||
| $ | 602,559 | $ | 1,203,875 | $ | 621,732 | $ | 1,625,989 | $ | 2,699,404 | $ | (4,729,376 | ) | $ | 2,024,183 | ||||||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Co-Issuer Subsidiary (Millennium) | Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||
| Current Assets: | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | — | $ | — | $ | 85,758 | $ | 80,430 | $ | 1,152 | $ | (1,095 | ) | $ | 166,245 | |||||||||||||
| Receivables | — | 1,184 | 15,574 | 26,130 | 831,075 | (836,241 | ) | 37,722 | ||||||||||||||||||||
| Inventories | — | — | 1,891 | 22,528 | 5,300 | — | 29,719 | |||||||||||||||||||||
| Other current assets | 164 | 28,297 | 3,454 | 9,341 | 1,642 | (29,601 | ) | 13,297 | ||||||||||||||||||||
| 164 | 29,481 | 106,677 | 138,429 | 839,169 | (866,937 | ) | 246,983 | |||||||||||||||||||||
| Property and Equipment, net | — | 835 | 181,673 | — | 1,403,264 | — | 1,585,772 | |||||||||||||||||||||
| Investment in Park | 588,684 | 1,045,640 | 238,132 | 1,392,761 | 234,237 | (3,499,454 | ) | — | ||||||||||||||||||||
| Goodwill | 674 | — | 63,551 | 8,387 | 111,218 | — | 183,830 | |||||||||||||||||||||
| Other Intangibles, net | — | — | 14,177 | — | 23,887 | — | 38,064 | |||||||||||||||||||||
| Deferred Tax Asset | — | 20,956 | — | — | — | (20,956 | ) | — | ||||||||||||||||||||
| Other Assets | — | — | 40 | 402 | 9,068 | — | 9,510 | |||||||||||||||||||||
| $ | 589,522 | $ | 1,096,912 | $ | 604,250 | $ | 1,539,979 | $ | 2,620,843 | $ | (4,387,347 | ) | $ | 2,064,159 | ||||||||||||||
| LIABILITIES AND PARTNERS’ EQUITY | ||||||||||||||||||||||||||||
| Current Liabilities: | ||||||||||||||||||||||||||||
| Accounts payable | $ | 497,558 | $ | 344,410 | $ | 1,379 | $ | 13,572 | $ | 5,038 | $ | (837,336 | ) | $ | 24,621 | |||||||||||||
| Deferred revenue | — | — | 6,237 | 59,307 | 20,587 | — | 86,131 | |||||||||||||||||||||
| Accrued interest | 27 | 18 | 2,055 | 6,024 | — | — | 8,124 | |||||||||||||||||||||
| Accrued taxes | 352 | — | — | 6,176 | 67,048 | (29,601 | ) | 43,975 | ||||||||||||||||||||
| Accrued salaries, wages and benefits | — | 17,498 | 1,242 | — | — | — | 18,740 | |||||||||||||||||||||
| Self-insurance reserves | — | 10,947 | 1,618 | 10,156 | 2,386 | — | 25,107 | |||||||||||||||||||||
| Other accrued liabilities | 3,406 | 5,094 | 157 | 5,649 | 4,490 | — | 18,796 | |||||||||||||||||||||
| 501,343 | 377,967 | 12,688 | 100,884 | 99,549 | (866,937 | ) | 225,494 | |||||||||||||||||||||
| Deferred Tax Liability | — | — | 13,809 | — | 81,945 | (20,956 | ) | 74,798 | ||||||||||||||||||||
| Derivative Liability | 5,233 | 3,489 | — | — | — | — | 8,722 | |||||||||||||||||||||
| Other Liabilities | — | 873 | — | 120 | 10,691 | — | 11,684 | |||||||||||||||||||||
| Long-Term Debt: | ||||||||||||||||||||||||||||
| Term debt | — | 127,437 | — | 596,351 | — | — | 723,788 | |||||||||||||||||||||
| Notes | — | — | 445,156 | 491,571 | — | — | 936,727 | |||||||||||||||||||||
| — | 127,437 | 445,156 | 1,087,922 | — | — | 1,660,515 | ||||||||||||||||||||||
| Equity | 82,946 | 587,146 | 132,597 | 351,053 | 2,428,658 | (3,499,454 | ) | 82,946 | ||||||||||||||||||||
| $ | 589,522 | $ | 1,096,912 | $ | 604,250 | $ | 1,539,979 | $ | 2,620,843 | $ | (4,387,347 | ) | $ | 2,064,159 | ||||||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Co-Issuer Subsidiary (Millennium) | Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
| Net revenues | $ | 103,687 | $ | 336,778 | $ | 124,506 | $ | 995,350 | $ | 382,569 | $ | (594,360 | ) | $ | 1,348,530 | |||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||
| Cost of food, merchandise and games revenues | — | — | 10,841 | 85,698 | 18,194 | — | 114,733 | |||||||||||||||||||||
| Operating expenses | — | 328,709 | 47,551 | 759,590 | 42,860 | (594,360 | ) | 584,350 | ||||||||||||||||||||
| Selling, general and administrative | 2,301 | 67,582 | 10,586 | 93,734 | 19,130 | — | 193,333 | |||||||||||||||||||||
| Depreciation and amortization | — | 33 | 15,273 | — | 140,223 | — | 155,529 | |||||||||||||||||||||
| Loss on impairment / retirement of fixed assets, net | — | — | 221 | 2,260 | 7,697 | — | 10,178 | |||||||||||||||||||||
| Gain on sale of investment | — | (112 | ) | — | — | — | — | (112 | ) | |||||||||||||||||||
| 2,301 | 396,212 | 84,472 | 941,282 | 228,104 | (594,360 | ) | 1,058,011 | |||||||||||||||||||||
| Operating income (loss) | 101,386 | (59,434 | ) | 40,034 | 54,068 | 154,465 | — | 290,519 | ||||||||||||||||||||
| Interest expense, net | 23,339 | 18,331 | 23,988 | 51,643 | (33,129 | ) | — | 84,172 | ||||||||||||||||||||
| Net effect of swaps | 1,228 | 6,214 | — | — | — | — | 7,442 | |||||||||||||||||||||
| Loss on early debt extinguishment | — | 187 | — | 886 | — | — | 1,073 | |||||||||||||||||||||
| Loss on foreign currency | — | 51 | 36,203 | — | — | — | 36,254 | |||||||||||||||||||||
| Other (income) expense | 250 | (78,571 | ) | 4,196 | — | 74,307 | — | 182 | ||||||||||||||||||||
| (Income) loss from investment in affiliates | (61,484 | ) | (62,244 | ) | (24,329 | ) | — | 2,517 | 145,540 | — | ||||||||||||||||||
| Income (loss) before taxes | 138,053 | 56,598 | (24 | ) | 1,539 | 110,770 | (145,540 | ) | 161,396 | |||||||||||||||||||
| Provision (benefit) for taxes | 11,400 | (4,886 | ) | 2,494 | 1,539 | 24,196 | — | 34,743 | ||||||||||||||||||||
| Net income (loss) | $ | 126,653 | $ | 61,484 | $ | (2,518 | ) | $ | — | $ | 86,574 | $ | (145,540 | ) | $ | 126,653 | ||||||||||||
| Other comprehensive income (loss), (net of tax): | ||||||||||||||||||||||||||||
| Cumulative foreign currency translation adjustment | 17,240 | — | 17,240 | — | — | (17,240 | ) | 17,240 | ||||||||||||||||||||
| Cash flow hedging derivative activity | 8,366 | 2,813 | — | — | — | (2,813 | ) | 8,366 | ||||||||||||||||||||
| Other comprehensive income (loss), (net of tax) | 25,606 | 2,813 | 17,240 | — | — | (20,053 | ) | 25,606 | ||||||||||||||||||||
| Total comprehensive income | $ | 152,259 | $ | 64,297 | $ | 14,722 | $ | — | $ | 86,574 | $ | (165,593 | ) | $ | 152,259 | |||||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Co-Issuer Subsidiary (Millennium) | Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
| Net revenues | $ | 104,080 | $ | 317,496 | $ | 127,929 | $ | 960,108 | $ | 395,745 | $ | (583,391 | ) | $ | 1,321,967 | |||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||
| Cost of food, merchandise and games revenues | — | — | 11,483 | 80,942 | 18,386 | — | 110,811 | |||||||||||||||||||||
| Operating expenses | — | 313,654 | 44,990 | 738,719 | 44,130 | (583,391 | ) | 558,102 | ||||||||||||||||||||
| Selling, general and administrative | 3,007 | 67,872 | 10,497 | 92,527 | 19,867 | — | 193,770 | |||||||||||||||||||||
| Depreciation and amortization | — | 33 | 15,654 | — | 137,535 | — | 153,222 | |||||||||||||||||||||
| Loss on impairment / retirement of fixed assets, net | — | — | 656 | 3,102 | 8,970 | — | 12,728 | |||||||||||||||||||||
| Gain on sale of investment | — | (1,877 | ) | — | — | — | — | (1,877 | ) | |||||||||||||||||||
| 3,007 | 379,682 | 83,280 | 915,290 | 228,888 | (583,391 | ) | 1,026,756 | |||||||||||||||||||||
| Operating income (loss) | 101,073 | (62,186 | ) | 44,649 | 44,818 | 166,857 | — | 295,211 | ||||||||||||||||||||
| Interest expense, net | 23,739 | 18,837 | 24,839 | 39,768 | (22,435 | ) | — | 84,748 | ||||||||||||||||||||
| Net effect of swaps | (150 | ) | 105 | — | — | — | — | (45 | ) | |||||||||||||||||||
| Loss on early debt extinguishment | 11,773 | 8,188 | 205 | 2,955 | — | — | 23,121 | |||||||||||||||||||||
| Gain on foreign currency | — | (25 | ) | (29,061 | ) | — | — | — | (29,086 | ) | ||||||||||||||||||
| Other (income) expense | 250 | (73,581 | ) | 3,460 | — | 69,756 | — | (115 | ) | |||||||||||||||||||
| Income from investment in affiliates | (160,925 | ) | (176,698 | ) | (38,057 | ) | — | (84,398 | ) | 460,078 | — | |||||||||||||||||
| Income before taxes | 226,386 | 160,988 | 83,263 | 2,095 | 203,934 | (460,078 | ) | 216,588 | ||||||||||||||||||||
| Provision (benefit) for taxes | 10,910 | 60 | (1,134 | ) | 2,095 | (10,819 | ) | — | 1,112 | |||||||||||||||||||
| Net income | $ | 215,476 | $ | 160,928 | $ | 84,397 | $ | — | $ | 214,753 | $ | (460,078 | ) | $ | 215,476 | |||||||||||||
| Other comprehensive income (loss), (net of tax): | ||||||||||||||||||||||||||||
| Cumulative foreign currency translation adjustment | (14,849 | ) | — | (14,849 | ) | — | — | 14,849 | (14,849 | ) | ||||||||||||||||||
| Cash flow hedging derivative activity | 7,975 | 2,422 | — | — | — | (2,422 | ) | 7,975 | ||||||||||||||||||||
| Other comprehensive income (loss), (net of tax) | (6,874 | ) | 2,422 | (14,849 | ) | — | — | 12,427 | (6,874 | ) | ||||||||||||||||||
| Total comprehensive income | $ | 208,602 | $ | 163,350 | $ | 69,548 | $ | — | $ | 214,753 | $ | (447,651 | ) | $ | 208,602 | |||||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Co-Issuer Subsidiary (Millennium) | Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
| Net revenues | $ | 144,042 | $ | 320,945 | $ | 117,962 | $ | 962,363 | $ | 378,556 | $ | (635,147 | ) | $ | 1,288,721 | |||||||||||||
| Costs and expenses: | ||||||||||||||||||||||||||||
| Cost of food, merchandise and games revenues | — | — | 9,868 | 78,984 | 17,756 | — | 106,608 | |||||||||||||||||||||
| Operating expenses | — | 303,974 | 42,820 | 777,841 | 49,393 | (635,147 | ) | 538,881 | ||||||||||||||||||||
| Selling, general and administrative | 3,029 | 68,422 | 10,151 | 85,170 | 15,058 | — | 181,830 | |||||||||||||||||||||
| Depreciation and amortization | — | 35 | 14,816 | — | 117,025 | — | 131,876 | |||||||||||||||||||||
| Loss on impairment / retirement of fixed assets, net | — | — | 159 | 2,686 | 9,742 | — | 12,587 | |||||||||||||||||||||
| 3,029 | 372,431 | 77,814 | 944,681 | 208,974 | (635,147 | ) | 971,782 | |||||||||||||||||||||
| Operating income (loss) | 141,013 | (51,486 | ) | 40,148 | 17,682 | 169,582 | — | 316,939 | ||||||||||||||||||||
| Interest expense, net | 32,643 | 24,114 | 25,403 | 15,695 | (14,169 | ) | — | 83,686 | ||||||||||||||||||||
| Net effect of swaps | (473 | ) | (724 | ) | — | — | — | — | (1,197 | ) | ||||||||||||||||||
| (Gain) loss on foreign currency | — | — | (14,660 | ) | 4 | — | — | (14,656 | ) | |||||||||||||||||||
| Other (income) expense | 250 | (83,657 | ) | 3,925 | — | 79,482 | — | — | ||||||||||||||||||||
| Income from investment in affiliates | (80,295 | ) | (73,132 | ) | (20,545 | ) | — | (27,628 | ) | 201,600 | — | |||||||||||||||||
| Income before taxes | 188,888 | 81,913 | 46,025 | 1,983 | 131,897 | (201,600 | ) | 249,106 | ||||||||||||||||||||
| Provision for taxes | 11,200 | 1,621 | 18,396 | 1,983 | 38,218 | — | 71,418 | |||||||||||||||||||||
| Net income | $ | 177,688 | $ | 80,292 | $ | 27,629 | $ | — | $ | 93,679 | $ | (201,600 | ) | $ | 177,688 | |||||||||||||
| Other comprehensive income (loss), (net of tax): | ||||||||||||||||||||||||||||
| Cumulative foreign currency translation adjustment | (3,700 | ) | — | (3,700 | ) | — | — | 3,700 | (3,700 | ) | ||||||||||||||||||
| Cash flow hedging derivative activity | 3,350 | 1,060 | — | — | — | (1,060 | ) | 3,350 | ||||||||||||||||||||
| Other comprehensive income (loss), (net of tax) | (350 | ) | 1,060 | (3,700 | ) | — | — | 2,640 | (350 | ) | ||||||||||||||||||
| Total comprehensive income | $ | 177,338 | $ | 81,352 | $ | 23,929 | $ | — | $ | 93,679 | $ | (198,960 | ) | $ | 177,338 | |||||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Co-Issuer Subsidiary (Millennium) | Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
| NET CASH FROM OPERATING ACTIVITIES | $ | 136,471 | $ | 11,057 | $ | 12,901 | $ | 78,559 | $ | 112,497 | $ | (745 | ) | $ | 350,740 | |||||||||||||
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | ||||||||||||||||||||||||||||
| Intercompany receivables (payments) receipts | — | — | — | — | (67,861 | ) | 67,861 | — | ||||||||||||||||||||
| Purchase of identifiable intangible assets | — | — | — | (8 | ) | (33 | ) | — | (41 | ) | ||||||||||||||||||
| Sale of preferred equity investment | — | 112 | — | — | — | — | 112 | |||||||||||||||||||||
| Capital expenditures | — | — | (19,976 | ) | (126,096 | ) | (43,703 | ) | — | (189,775 | ) | |||||||||||||||||
| Net cash from (for) investing activities | — | 112 | (19,976 | ) | (126,104 | ) | (111,597 | ) | 67,861 | (189,704 | ) | |||||||||||||||||
| CASH FLOWS FOR FINANCING ACTIVITIES | ||||||||||||||||||||||||||||
| Intercompany payables (payments) receipts | 67,876 | (15 | ) | — | — | — | (67,861 | ) | — | |||||||||||||||||||
| Distributions paid to partners | (204,347 | ) | — | — | — | — | 1,148 | (203,199 | ) | |||||||||||||||||||
| Payment of debt issuance costs and original issue discount | — | (321 | ) | — | (2,222 | ) | — | — | (2,543 | ) | ||||||||||||||||||
| Exercise of limited partnership unit options | — | 125 | — | — | — | — | 125 | |||||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | — | (2,530 | ) | — | — | — | — | (2,530 | ) | |||||||||||||||||||
| Payments related to tax withholding for equity compensation | — | (8,428 | ) | — | — | — | — | (8,428 | ) | |||||||||||||||||||
| Net cash for financing activities | (136,471 | ) | (11,169 | ) | — | (2,222 | ) | — | (66,713 | ) | (216,575 | ) | ||||||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | (5,357 | ) | — | — | — | (5,357 | ) | |||||||||||||||||||
| CASH AND CASH EQUIVALENTS | ||||||||||||||||||||||||||||
| Net increase (decrease) for the year | — | — | (12,432 | ) | (49,767 | ) | 900 | 403 | (60,896 | ) | ||||||||||||||||||
| Balance, beginning of year | — | — | 85,758 | 80,430 | 1,152 | (1,095 | ) | 166,245 | ||||||||||||||||||||
| Balance, end of year | $ | — | $ | — | $ | 73,326 | $ | 30,663 | $ | 2,052 | $ | (692 | ) | $ | 105,349 | |||||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Co-Issuer Subsidiary (Millennium) | Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
| NET CASH FROM (FOR) OPERATING ACTIVITIES | $ | 93,378 | $ | (10,710 | ) | $ | 40,569 | $ | 48,979 | $ | 160,801 | $ | (1,838 | ) | $ | 331,179 | ||||||||||||
| CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | ||||||||||||||||||||||||||||
| Intercompany receivables (payments) receipts | — | — | — | — | (278,051 | ) | 278,051 | — | ||||||||||||||||||||
| Proceeds from returns on investments | 338,000 | 15,500 | — | — | 146,500 | (500,000 | ) | — | ||||||||||||||||||||
| Purchase of identifiable intangible assets | — | — | — | (66 | ) | — | — | (66 | ) | |||||||||||||||||||
| Proceeds from sale of preferred equity investment | — | 3,281 | — | — | — | — | 3,281 | |||||||||||||||||||||
| Capital expenditures | — | (25 | ) | (10,160 | ) | (149,448 | ) | (28,451 | ) | — | (188,084 | ) | ||||||||||||||||
| Net cash from (for) investing activities | 338,000 | 18,756 | (10,160 | ) | (149,514 | ) | (160,002 | ) | (221,949 | ) | (184,869 | ) | ||||||||||||||||
| CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | ||||||||||||||||||||||||||||
| Intercompany payables (payments) receipts | 69,160 | 208,891 | — | — | — | (278,051 | ) | — | ||||||||||||||||||||
| Payments for returns of capital | — | — | — | (500,000 | ) | — | 500,000 | — | ||||||||||||||||||||
| Term debt borrowings | — | 131,000 | — | 619,000 | — | — | 750,000 | |||||||||||||||||||||
| Note borrowings | — | — | — | 500,000 | — | — | 500,000 | |||||||||||||||||||||
| Term debt payments | — | (126,619 | ) | (13,854 | ) | (477,377 | ) | — | — | (617,850 | ) | |||||||||||||||||
| Note payments, including amounts paid for early termination | (304,014 | ) | (211,444 | ) | — | — | — | — | (515,458 | ) | ||||||||||||||||||
| Distributions paid to partners | (196,524 | ) | — | — | — | — | 1,768 | (194,756 | ) | |||||||||||||||||||
| Payment of debt issuance costs | — | (1,326 | ) | — | (18,483 | ) | — | — | (19,809 | ) | ||||||||||||||||||
| Exercise of limited partnership unit options | — | 65 | — | — | — | — | 65 | |||||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | — | (4,440 | ) | — | — | — | — | (4,440 | ) | |||||||||||||||||||
| Payments related to tax withholding for equity compensation | — | (4,173 | ) | — | — | — | — | (4,173 | ) | |||||||||||||||||||
| Net cash from (for) financing activities | (431,378 | ) | (8,046 | ) | (13,854 | ) | 123,140 | — | 223,717 | (106,421 | ) | |||||||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | 3,640 | — | — | — | 3,640 | |||||||||||||||||||||
| CASH AND CASH EQUIVALENTS | ||||||||||||||||||||||||||||
| Net increase for the year | — | — | 20,195 | 22,605 | 799 | (70 | ) | 43,529 | ||||||||||||||||||||
| Balance, beginning of year | — | — | 65,563 | 57,825 | 353 | (1,025 | ) | 122,716 | ||||||||||||||||||||
| Balance, end of year | $ | — | $ | — | $ | 85,758 | $ | 80,430 | $ | 1,152 | $ | (1,095 | ) | $ | 166,245 | |||||||||||||
| Cedar Fair L.P. (Parent) | Co-Issuer Subsidiary (Magnum) | Co-Issuer Subsidiary (Cedar Canada) | Co-Issuer Subsidiary (Millennium) | Guarantor Subsidiaries | Eliminations | Total | ||||||||||||||||||||||
| NET CASH FROM (FOR) OPERATING ACTIVITIES | $ | 118,833 | $ | (28,315 | ) | $ | 33,918 | $ | 189,534 | $ | 47,728 | $ | (3,351 | ) | $ | 358,347 | ||||||||||||
| CASH FLOWS FOR INVESTING ACTIVITIES | ||||||||||||||||||||||||||||
| Intercompany receivables (payments) receipts | — | — | — | — | (24,562 | ) | 24,562 | — | ||||||||||||||||||||
| Purchase of identifiable intangible assets | — | — | (29 | ) | (74 | ) | (474 | ) | — | (577 | ) | |||||||||||||||||
| Capital expenditures | — | — | (7,863 | ) | (129,815 | ) | (22,978 | ) | — | (160,656 | ) | |||||||||||||||||
| Net cash for investing activities | — | — | (7,892 | ) | (129,889 | ) | (48,014 | ) | 24,562 | (161,233 | ) | |||||||||||||||||
| CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | ||||||||||||||||||||||||||||
| Intercompany payables (payments) receipts | (6,332 | ) | 30,894 | — | — | — | (24,562 | ) | — | |||||||||||||||||||
| Term debt payments | — | (1,237 | ) | (138 | ) | (4,625 | ) | — | — | (6,000 | ) | |||||||||||||||||
| Distributions paid to partners | (189,508 | ) | — | — | — | — | 2,326 | (187,182 | ) | |||||||||||||||||||
| Tax effect of units involved in treasury unit transactions | — | (422 | ) | — | — | — | — | (422 | ) | |||||||||||||||||||
| Payments related to tax withholding for equity compensation | — | (920 | ) | — | — | — | — | (920 | ) | |||||||||||||||||||
| Net cash from (for) financing activities | (195,840 | ) | 28,315 | (138 | ) | (4,625 | ) | — | (22,236 | ) | (194,524 | ) | ||||||||||||||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | — | — | 569 | — | — | — | 569 | |||||||||||||||||||||
| CASH AND CASH EQUIVALENTS | ||||||||||||||||||||||||||||
| Net increase (decrease) for the year | (77,007 | ) | — | 26,457 | 55,020 | (286 | ) | (1,025 | ) | 3,159 | ||||||||||||||||||
| Balance, beginning of year | 77,007 | — | 39,106 | 2,805 | 639 | — | 119,557 | |||||||||||||||||||||
| Balance, end of year | $ | — | $ | — | $ | 65,563 | $ | 57,825 | $ | 353 | $ | (1,025 | ) | $ | 122,716 | |||||||||||||
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
Management's Report on Internal Control over Financial Reporting
Changes in Internal Control over Financial Reporting
There were no changes in the Partnership'sour internal control over financial reporting that occurred during the fourth quarter of 20182021 that have materially affected, or are reasonably likely to materially affect, the Partnership'sour internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Cedar Fair Management, Inc., an Ohio corporation owned by an Ohio trust, is the General Partner of the Partnership and has full responsibility for the management of the Partnership. For additional information, attention is directed to Partnership (see Note 12 to the Consolidated Financial Statements.).
A. Identification of Directors:
The information required by this item is incorporated by reference to the material in our Proxy Statement to be used in connection with the annual meeting of limited partner unitholders to be held in June 2019May 2022 (the "Proxy Statement") under the captions "Proposal One. Election of Directors", "Board Committees", and, "Sectionif required, "Delinquent Section 16(a) Beneficial Ownership Reporting Compliance"Reports".
B. Identification of Executive Officers:
Information regarding executive officers of the Partnership is included in this Annual Report on Form 10-K under the caption "Supplemental Item. Information about our Executive Officers of Cedar Fair"Officers" in Item 1 of Part I and is incorporated herein by reference.
C. Code of Ethics and Certifications:
In accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and Item 406 of Regulation S-K, the Partnership haswe have adopted a Code of Conduct and Ethics (the "Code"), which applies to all directors, officers and employees, of the Partnership, including the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. A copy of the Code is available on the Internet at the Investor Relations section of our web sitewebsite (www.cedarfair.com).
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item is incorporated by reference to the material in our Proxy Statement under the captions "Executive Compensation", "Compensation Committee Interlocks and Insider Participation", and "Compensation Committee Report".
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED UNITHOLDER MATTERS.
The information required by this item is incorporated by reference to the material in our Proxy Statement under the caption "Security Ownership of Certain Beneficial Owners and Management".
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information concerning units authorized or available for issuance under our equity compensation plan (see Note 10) as of December 31, 2018:2021:
| Plan Category | Number of units to be issued upon exercise of outstanding options, warrants and rights (a) (1) | Weighted-average exercise price of outstanding options, warrants and rights (b) (2) | Number of units remaining available for future issuance under equity compensation plans (excluding units reflected in column (a)) (c) | |||||||||||||||||
| Equity compensation plans approved by unitholders | 1,198,765 | $ | 35.27 | 1,772,259 | ||||||||||||||||
| Equity compensation plans not approved by unitholders | — | — | — | |||||||||||||||||
| Total | 1,198,765 | $ | 35.27 | 1,772,259 | ||||||||||||||||
(1)The units in column (a) include performance awards and deferred unit awards at the maximum number of units issuable, as well as unit options outstanding.
(2)The weighted average price in column (b) represents the weighted average price of 117,638 unit options outstanding. Performance awards and deferred unit awards are excluded from column (b).
60
| Plan Category | Number of units to be issued upon exercise of outstanding options, warrants and rights (a) (1) | Weighted-average exercise price of outstanding options, warrants and rights (b) (2) | Number of units remaining available for future issuance under equity compensation plans (excluding units reflected in column (a)) (c) | |||||||
| Equity compensation plans approved by unitholders | 1,134,773 | $ | 34.51 | 2,461,732 | ||||||
| Equity compensation plans not approved by unitholders | — | — | — | |||||||
| Total | 1,134,773 | $ | 34.51 | 2,461,732 | ||||||
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The information required by this item is incorporated by reference to the material in our Proxy Statement under the captions "Certain Relationships and Related Transactions", "Board Independence", and "Board Committees".
ITEM 14. PRINCIPAL ACCOUNTINGACCOUNTANT FEES AND SERVICES.
The information required by this item is incorporated by reference to the material in our Proxy Statement under the caption "Independent Registered Public Accounting Firm Services and Fees".
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
A. 1. Financial Statements
The following consolidated financial statements of the Registrant, the notes thereto and the related Report of Independent Registered Public Accounting Firm are filed under Item 8 of this Report:
| Page | ||||||||
| (i) | ||||||||
| Report of Independent Registered Public Accounting Firm | ||||||||
| (ii) | Consolidated Balance Sheets - December 31, | |||||||
| (iii) | Consolidated Statements of Operations and Comprehensive (Loss) Income - Years ended December 31, | |||||||
| (iv) | Consolidated Statements of Cash Flows - Years ended December 31, | |||||||
| (v) | Consolidated Statements of Partners' Equity (Deficit) - Years ended December 31, | |||||||
| (vi) | Notes to Consolidated Financial Statements - December 31, | |||||||
A. 2. Financial Statement Schedules
All schedules are omitted as the information is not required or is otherwise furnished.
61
A. 3. Exhibits
The exhibits listed below are incorporated herein by reference to prior SEC filings by the Registrant or are included as exhibits in this Form 10-K.
| Exhibit Number | Description | |||||
62
| Exhibit Number | Description | |||||
63
| Exhibit Number | Description | |||||
| 101 | The following materials from the Partnership's Annual Report on Form 10-K for the year ended December 31, | |||||
| 104 | The cover page from the Partnership's Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL (included as Exhibit 101). | |||||
(+) Management contract or compensatory plan or arrangement.
ITEM 16.FORM 10-K SUMMARY.
None.
64
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CEDAR FAIR, L.P.
(Registrant)
DATED: February 22, 2019 18, 2022
By: Cedar Fair Management, Inc.
General Partner
| /S/ Richard A. Zimmerman | ||
| Richard A. Zimmerman | ||
| President and Chief Executive Officer | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||||||||||||
| /S/ | Richard A. Zimmerman | President and Chief Executive Officer | February 18, 2022 | |||||||||||
| Richard A. Zimmerman | Director | |||||||||||||
| /S/ | ||||||||||||||
| Brian C. Witherow | Executive Vice President and Chief Financial Officer | February | ||||||||||||
| Brian C. Witherow | (Principal Financial Officer) | |||||||||||||
| /S/ | David R. Hoffman | Senior Vice President and Chief Accounting Officer | February | |||||||||||
| David R. Hoffman | (Principal Accounting Officer) | |||||||||||||
| /S/ | Daniel J. Hanrahan | Chairman of the Board of Directors | February 18, 2022 | |||||||||||
| Daniel J. Hanrahan | ||||||||||||||
| /S/ | Louis Carr | Director | February 18, 2022 | |||||||||||
| Louis Carr | ||||||||||||||
| /S/ | Gina D. France | Director | February 18, 2022 | |||||||||||
| Gina D. France | ||||||||||||||
| /S/ | D. Scott Olivet | Director | February 18, 2022 | |||||||||||
| D. Scott Olivet | ||||||||||||||
| /S/ | Matthew A. Ouimet | February | ||||||||||||
| Matthew A. Ouimet | ||||||||||||||
| /S/ | February | |||||||||||||
| /S/ | ||||||||||||||
| Lauri M. Shanahan | Director | February | ||||||||||||
| Lauri M. Shanahan | ||||||||||||||
| /S/ | Debra Smithart-Oglesby | Director | February 18, 2022 | |||||||||||
| Debra Smithart-Oglesby | ||||||||||||||
65