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Financial report summary
?Risks
- Instability in economic conditions could impact our business, including our results of operations and financial condition.
- Public health concerns or a future pandemic could adversely impact our business, as well as intensify certain risks we face.
- The high fixed cost structure of amusement park operations can result in significantly lower margins, profitability and cash flows if attendance levels do not meet expectations.
- Bad or extreme weather conditions can adversely impact attendance at our parks, which in turn would reduce our revenues.
- Our insurance coverage may not be adequate to cover all possible losses that we could suffer, and our insurance costs may increase.
- 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.
- There is a risk of accidents or other incidents occurring at amusement and water parks, which may reduce attendance and negatively impact our revenues.
- Extended disruptions to our technology platforms may adversely impact our sales and revenues.
- The proposed merger with Six Flags and integration of both companies may be more difficult, costly or time-consuming than expected, and we may fail to realize the anticipated benefits of the merger.
- The market price of the combined company's common stock following the closing of the merger may be affected by factors different from those that historically have affected or currently affect our units.
- We have incurred and expect to continue to incur substantial costs, fees, expenses, and charges related to the merger and integration, and may incur additional costs we do not currently anticipate.
- We may be unable to retain personnel successfully while the merger is pending or after the merger is completed.
- The announcement or completion of the proposed merger may disrupt and/or harm our current plans and operations or those of Six Flags, may divert management’s time and attention and may affect existing business relationships, any of which may impact financial performance, operating results and/or our ability to achieve the benefits of the merger.
- Regulatory approvals may not be received, may take longer than expected, or may impose conditions that are not presently anticipated or that affect the anticipated benefits of the merger.
- The merger agreement may be terminated in accordance with its terms, and the merger may not be completed, which could negatively impact our business, financial results, and/or unit price.
- The merger agreement subjects Six Flags and Cedar Fair to restrictions on their respective business activities prior to the closing of the merger.
- The merger agreement limits Cedar Fair’s ability to pursue alternative transaction proposals, which may discourage other companies from making a favorable alternative transaction proposal.
- Litigation relating to the proposed merger may be filed against Six Flags, us and/or each entity's board of directors that could prevent or delay the closing and/or result in the payment of damages.
- Our unitholders as of immediately prior to the merger will have reduced ownership in the combined company.
- Declaration, payment and amounts of dividends, if any, distributed to stockholders of the combined company will be uncertain.
- Even if the merger otherwise qualifies for tax-free treatment, a unitholder will recognize taxable gain upon the exchange of units if and to the extent that the aggregate amount of our liabilities attributable for tax purposes to the units exchanged by the unitholder exceeds the unitholder’s aggregate tax basis in the units exchanged.
- Our non-U.S. unitholders will be subject to withholding in the exchange of partnership units for the successor merged company stock and the applicable withholding agent may satisfy such withholding by retaining shares of the successor merged company stock or cash or other property of our non-U.S. unitholder.
- The Amendments, as defined in Note 6 of the Consolidated Financial Statements, becoming operative and payment of the Consent Payment, as defined in Note 6 to the Consolidated Financial Statements, in connection with the Consent Solicitation, as defined in Note 6 to the Consolidated Financial Statements, with respect to our bonds may result in our unitholders being allocated cancellation of debt income (CODI) for U.S. federal income tax purposes.
- Our growth strategy may not 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.
- 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.
- Increased costs of labor and employee health and welfare benefits may impact our results of operations.
- Our business depends on our ability to meet our workforce needs.
- If we lose key personnel, our business may be adversely affected.
- 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.
- Our debt agreements contain restrictions that could limit our flexibility in investing in our business, including the ability to pay partnership distributions.
- Variable rate indebtedness could subject us to the risk of higher interest rates, which could cause our future debt service obligations to increase.
- Cyber-security risks and the failure to maintain the integrity of internal or customer data could result in damages to our reputation and/or subject us to costs, fines or lawsuits.
- 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.
- 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 our available cash.
- Our status as a partnership for federal income tax purposes subjects us and our unitholders to additional tax reporting that may be costly and may increase complexity.
- Other factors, including local events, natural disasters, pandemics and terrorist activities, or threats of these events, could adversely impact park attendance and our revenues.
Management Discussion
- 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 parking revenues (in-park revenues), divided by total attendance.
- Out-of-park revenues are defined as revenues from resorts, out-of-park food and retail locations, online transaction fees charged to customers, sponsorships and all other out-of-park operations.