Washington, D.C. 20549
For the transition period from to .
CEDAR FAIR, L.P.
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.
CEDAR FAIR, L.P.
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.
CEDAR FAIR, L.P.
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.
CEDAR FAIR, L.P.
The accompanying unaudited condensed consolidated financial statements have been prepared from the financial records of Cedar Fair, L.P. (the Partnership)"Partnership," "we," "us," or "our") without audit and reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to fairly present the results of the interim periods covered in this report. Due to the seasonal nature of the Partnership'sour amusement and water park operations, the results for any interim period may not be indicative of the results expected for the full fiscal year.
In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 eliminates step two from the goodwill impairment test. Instead, an entity should recognize an impairment charge for the amount by which a reporting unit's carrying amount exceeds its fair value, not to exceed the carrying amount
(2) Interim Reporting:
The Partnership owns and operates elevenWe are one of the largest regional amusement park operators in the world with 13 properties in our portfolio consisting of amusement parks, two separately gated outdoor water parks one indoor water park and five hotels. The Partnership'scomplementary resort facilities. Our parks operate seasonally except for Knott's Berry Farm, which is typically open daily on a year-round basis. Our seasonal amusement parks are generally open during weekends beginning in April or May, and then daily from Memorial Day until Labor Day. After Labor Day, after which theyour seasonal parks are open during select weekends in September and, in most cases, October. The two separately gated outdoor water parks also operate seasonally, generally from Memorial Day to Labor Day, plus some additional weekends beforein the fourth quarter for Halloween and after this period.winter events. As a result, a substantial portion of the Partnership’sour revenues from these seasonal parks typically are generated during an approximate 130-130- to 140-day140-day operating season with the major portion concentrated in the third quarter during the peak vacation months of July and August. In 2017, four of the seasonal properties will extend theirCOVID-19 impacted our parks' operating seasons approximately 20 to 25 days to include WinterFest, a holiday event operating during Novembercalendars in 2020 and December. Knott's Berry Farm continues to be open daily on a year-round basis. Castaway Bay is generally open daily from Memorial Day to Labor Day with an additional limited daily schedule for the balance of the year.2021 as described within Note 1.
To assure that these highly seasonal operations will not result in misleading comparisons of current and subsequent interim periods, the Partnership haswe have adopted the following accounting and reporting procedures for its seasonal parks:procedures: (a) revenues onfrom multi-use products are recognized over the estimated number of uses expected for each type of productproduct; and are adjustedthe 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,season; (b) depreciation, certain advertising and certain seasonal operating costs are expensed over each park’s operating season, including some costs incurred prior to the season, which are deferred and amortized over the season,season; and (c) all other costs are expensed as incurred or ratably over the entire year. For those operating costs that are expensed over each park's operating season, we recognize expense over each park's planned operating days. In 2020, pre-COVID-19 budgeted operating days represented each park's planned operating days. Pre-COVID-19 budgeted operating days more accurately reflected incurred expense, resulted in greater consistency between parks and with historical results, and was more consistent with our interim reporting accounting procedures compared with updating our procedures to recognize expense over the much fewer actual operating days in 2020.
(3) Revenue Recognition:
As disclosed within the unaudited condensed consolidated statements of operations and comprehensive income (loss), 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".
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.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Nine months ended |
(In thousands) | | September 26, 2021 | | September 27, 2020 | | September 26, 2021 | | September 27, 2020 |
In-park revenues | | $ | 692,013 | | | $ | 61,764 | | | $ | 882,679 | | | $ | 106,008 | |
Out-of-park revenues | | 83,074 | | | 29,051 | | | 134,054 | | | 46,705 | |
Concessionaire remittance | | (21,683) | | | (3,358) | | | (29,450) | | | (5,035) | |
Net revenues | | $ | 753,404 | | | $ | 87,457 | | | $ | 987,283 | | | $ | 147,678 | |
Due to our highly seasonal operations, a substantial portion of our 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 our 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. We do not typically provide for refunds or returns.
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 being deferred into 2021. In the first quarter of 2021 and in addition to the extended validity through 2021, Knott's Berry Farm also offered a 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 passes through September 5, 2022. No other parks offered similar plans. We expect deferred revenue related to our outstanding 2020 and 2021 season-long products to be realized within 12 months from the balance sheet date. In order to calculate revenue recognized on 2020 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 for the 2021 and 2022 operating seasons. 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. Approximately $141 million of the current deferred revenue balance as of January 1, 2021 was recognized during the nine months ended September 26, 2021. We also had recorded $10.5 million of non-current deferred revenue as of January 1, 2021 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.
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 related to season-long products sold 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. We estimate the number of uses expected outside of the next twelve months for each type of product and classify the related deferred revenue as non-current within "Non-Current Deferred Revenue" in the unaudited condensed consolidated balance sheets. As of September 26, 2021, $13.9 million of the total non-current deferred revenue balance represented estimated fourth quarter 2022 usage of 2022 season-long products. As of September 27, 2020 and due to the extension of the validity of the 2020 season-long products into 2021, $27.1 million of the total non-current deferred revenue balance represented estimated fourth quarter 2021 usage of both 2020 and 2021 season-long products. The remainder of the non-current deferred revenue balance in both periods was largely attributable to the lease of a portion of the California's Great America parking lot.
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 are typically 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 September 26, 2021, December 31, 2020 and September 27, 2020, we recorded a $14.4 million, $8.7 million and $8.5 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, including an adjustment for the impact of the COVID-19 pandemic on our customers' ability to pay based on collection rates since March 2020. The allowance for doubtful accounts is recorded as a reduction of deferred revenue to the extent revenue has not been recognized on the corresponding season-long products. Due to the effects of the COVID-19 pandemic and given the uncertainty around the timing of 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.
(4) Long-Lived Assets:
Long-lived assets are reviewed for impairment upon the occurrence of events or changes in circumstances that would indicate that the carrying value of the assets may not be recoverable. In order to determine if an asset has been impaired, assets are grouped and tested at the lowest level for which identifiable, independent cash flows are available. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in expected future cash flows; a sustained, significant decline in equity price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on the Partnership'sunaudited condensed consolidated financial statements.
TheWe concluded indicators of impairment did not exist during the first nine months of 2021. 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 expected future operating results, we tested our long-lived operating assetassets for impairment. We concluded the estimated fair values of the long-lived assets at Schlitterbahn Waterpark & Resort New Braunfels and Schlitterbahn Waterpark Galveston (collectively "the Schlitterbahn parks") no longer exceeded the related carrying values during the first quarter of 2020. Therefore, we recorded a $2.7 million impairment test involves a two-step process. The first step is a comparison of each asset group'scharge equal to the difference between the fair value and the carrying value to its estimated undiscounted future cash flows expected to result from the useamounts of the assets in "Loss on impairment /
retirement of fixed assets" within the unaudited condensed consolidated statement of operations and comprehensive loss during the first quarter of 2020. The fair value of the long-lived assets was determined using a real and personal property appraisal which was performed in accordance with ASC 820 - Fair Value Measurement. We performed additional impairment testing during the third quarter of 2020 due to a further decline in our financial performance projections. Our impairment testing during the third quarter of 2020 resulted in no further impairment of our long-lived assets. Management made significant estimates in performing the impairment tests, including disposition. Projectedthe 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.
Remaining acreage from the former WildWater Kingdom, a separately gated outdoor water park near Cleveland in Aurora, Ohio, was recorded within "Other Assets" in the prior period unaudited condensed consolidated balance sheets ($2.1 million as of December 31, 2020 and $7.5 million as of September 27, 2020). All remaining acreage from this property was sold during the second quarter of 2021.
(5) 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 the first nine months of 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 expected future 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 unaudited condensed consolidated statement of operations and comprehensive loss.
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 of impairment loss. Theby which the trade name's carrying amount of impairment is determined by comparingexceeded its fair value.
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.
Non-operating assets are evaluated for impairment based on changes in market conditions. When changes in market conditions are observed, impairment is estimated using a market-based approach. If the estimated fair valueeffects of the non-operating assets is less than their carrying value, an impairment charge is recorded for the difference.COVID-19 pandemic.
During the third quarter of 2016, the Partnership ceased operations of one of its separately gated outdoor water parks, Wildwater Kingdom, located near Cleveland in Aurora, Ohio. At the date that Wildwater Kingdom ceased operations, the only remaining long-lived asset was the approximate 670 acres of land owned by the Partnership. This land had an associated carrying value of $17.1 million. The Partnership assessed the remaining asset and concluded there was no impairment during the third quarter of 2016. The remaining Wildwater Kingdom acreage, reduced by acreage sold, is classified as assets held-for-sale within "Other Assets"Changes in the unaudited condensed consolidated balance sheet ($16.5 million as of September 24, 2017).
(4) 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. As of September 24, 2017, there were no indicators of impairment. The Partnership's annual testing date is the first day of the fourth quarter. There were no impairments for any period presented.
A summary of changes in the Partnership’s carrying value of goodwill for the nine months ended September 24, 201726, 2021 and September 25, 2016 is as follows:27, 2020 were:
| | | | | | | | |
(In thousands) | | Goodwill |
Balance as of December 31, 2020 | | $ | 266,961 | |
| | |
Foreign currency translation | | 255 | |
Balance as of September 26, 2021 | | $ | 267,216 | |
| | |
Balance as of December 31, 2019 | | $ | 359,654 | |
Impairment | | (93,929) | |
Foreign currency translation | | (1,865) | |
Balance as of September 27, 2020 | | $ | 263,860 | |
|
| | | | | | | | | | | | |
(In thousands) | | Goodwill (gross) | | Accumulated Impairment Losses | | Goodwill (net) |
Balance at December 31, 2016 | | $ | 259,528 |
| | $ | (79,868 | ) | | $ | 179,660 |
|
Foreign currency translation | | 5,350 |
| | — |
| | 5,350 |
|
Balance at September 24, 2017 | | $ | 264,878 |
| | $ | (79,868 | ) | | $ | 185,010 |
|
| | | | | | |
Balance at December 31, 2015 | | $ | 290,679 |
| | $ | (79,868 | ) | | $ | 210,811 |
|
Foreign currency translation | | 4,649 |
| | — |
| | 4,649 |
|
Balance at September 25, 2016 | | $ | 295,328 |
| | $ | (79,868 | ) | | $ | 215,460 |
|
As of September 24, 2017,26, 2021, December 31, 2016,2020, and September 25, 2016, the Partnership’s27, 2020, other intangible assets consisted of the following:
| | | | | | | | | | | | | | | | | |
(In thousands) | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Value |
September 26, 2021 | | | | | |
Other intangible assets: | | | | | |
Trade names | $ | 49,511 | | | $ | — | | | $ | 49,511 | |
License / franchise agreements | 4,262 | | | (3,646) | | | 616 | |
Total other intangible assets | $ | 53,773 | | | $ | (3,646) | | | $ | 50,127 | |
| | | | | |
December 31, 2020 | | | | | |
Other intangible assets: | | | | | |
Trade names | $ | 49,454 | | | $ | — | | | $ | 49,454 | |
License / franchise agreements | 4,259 | | | (3,425) | | | 834 | |
Total other intangible assets | $ | 53,713 | | | $ | (3,425) | | | $ | 50,288 | |
| | | | | |
September 27, 2020 | | | | | |
Other intangible assets: | | | | | |
Trade names | $ | 48,764 | | | $ | — | | | $ | 48,764 | |
License / franchise agreements | 4,257 | | | (3,304) | | | 953 | |
Total other intangible assets | $ | 53,021 | | | $ | (3,304) | | | $ | 49,717 | |
million with a Canadian sub-limit of $15 million. Borrowings under the seniorSenior secured revolving credit facility bearborrowings following the Second Amendment bore interest at LIBOR plus 300 bps or Canadian Dollar Offered Rate ("CDOR") plus 200 bps. The revolving credit facility is scheduled to mature in April 2022bps and also provides for the issuance of documentary and standby letters of credit. The 2017 Credit Agreement requiresrequired the payment of a 37.5 bps commitment fee per annum on the unused portion of the revolving credit facility. The revolving 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 revolving 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 senior 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 Third Amended 2017 Credit Agreement also provides for the issuance of documentary and standby letters of credit. As of September 26, 2021, no borrowings were outstanding under the revolving credit facility.
(10) Contingencies:
The Partnership is a party to a number of lawsuits arising in the normal course of business. In the opinion of management, none of these matters are expected to have a material effect in the aggregate on the Partnership's financial statements.
(11) Changes in Accumulated Other Comprehensive Income by Component:
The following tables reflect the changes in accumulated other comprehensive income related to limited partners' equity for the three months ended September 24, 2017 and September 25, 2016:
|
| | | | | | | | | | | | | |
Changes in Accumulated Other Comprehensive Income by Component (1) |
(In thousands) | | Gains and Losses on Cash Flow Hedges | | Foreign Currency Translation | | Total |
Balance at June 25, 2017 | | $ | (11,963 | ) | | $ | 16,949 |
| | $ | 4,986 |
|
| | | | | | | |
Other comprehensive income before reclassifications | | — |
| | (11,143 | ) | | (11,143 | ) |
| | | | | | | |
Amounts reclassified from accumulated other comprehensive income, net of tax ($371) (2) | | 1,994 |
| | — |
| | 1,994 |
|
| | | | | | | |
Net other comprehensive income | | 1,994 |
| | (11,143 | ) | | (9,149 | ) |
| | | | | | | |
Balance at September 24, 2017 | | $ | (9,969 | ) | | $ | 5,806 |
| | $ | (4,163 | ) |
| |
(1) | All amounts are net of tax. Amounts in parentheses indicate debits. |
| |
(2) | See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details. |
|
| | | | | | | | | | | | | |
Changes in Accumulated Other Comprehensive Income by Component (1) |
(In thousands) | | Gains and Losses on Cash Flow Hedges | | Foreign Currency Translation | | Total |
Balance at June 26, 2016 | | $ | (19,938 | ) | | $ | 15,747 |
| | $ | (4,191 | ) |
| | | | | | | |
Other comprehensive income before reclassifications, net of tax ($803) | | — |
| | 1,397 |
| | 1,397 |
|
| | | | | | | |
Amounts reclassified from accumulated other comprehensive income, net of tax ($371) (2) | | 1,994 |
| | — |
| | 1,994 |
|
| | | | | | | |
Net other comprehensive income | | 1,994 |
| | 1,397 |
| | 3,391 |
|
| | | | | | | |
Balance at September 25, 2016 | | $ | (17,944 | ) | | $ | 17,144 |
| | $ | (800 | ) |
| |
(1) | All amounts are net of tax. Amounts in parentheses indicate debits. |
| |
(2) | See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details. |
|
| | | | | | | | | | | |
Reclassifications Out of Accumulated Other Comprehensive Income |
Details about Accumulated Other Comprehensive Income Components | | Amount Reclassified from Accumulated Other Comprehensive Income | | Affected Line Item in the Statement Where Net Income is Presented |
(In thousands) | | Three months ended 9/24/2017 | | Three months ended 9/25/2016 | | |
Interest rate contracts | | $ | 2,365 |
| | $ | 2,365 |
| | Net effect of swaps |
Provision for taxes | | (371 | ) | | (371 | ) | | Provision for taxes |
Losses on cash flow hedges | | $ | 1,994 |
| | $ | 1,994 |
| | Net of tax |
The following tables reflect the changes in accumulated other comprehensive income related to limited partners' equity for the nine months ended September 24, 2017 and September 25, 2016:
|
| | | | | | | | | | | | | |
Changes in Accumulated Other Comprehensive Income by Component (1) |
(In thousands) | | Gains and Losses on Cash Flow Hedges | | Foreign Currency Translation | | Total |
Balance at December 31, 2016 | | $ | (15,950 | ) | | $ | 18,891 |
| | $ | 2,941 |
|
| | | | | | | |
Other comprehensive income before reclassifications | | — |
| | (13,085 | ) | | (13,085 | ) |
| | | | | | | |
Amounts reclassified from accumulated other comprehensive income, net of tax ($1,113) (2) | | 5,981 |
| | — |
| | 5,981 |
|
| | | | | | | |
Net other comprehensive income | | 5,981 |
| | (13,085 | ) | | (7,104 | ) |
| | | | | | | |
Balance at September 24, 2017 | | $ | (9,969 | ) | | $ | 5,806 |
| | $ | (4,163 | ) |
| |
(1) | All amounts are net of tax. Amounts in parentheses indicate debits. |
| |
(2) | See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details. |
|
| | | | | | | | | | | | | |
Changes in Accumulated Other Comprehensive Income by Component (1) |
(In thousands) | | Gains and Losses on Cash Flow Hedges | | Foreign Currency Translation | | Total |
Balance at December 31, 2015 | | $ | (19,300 | ) | | $ | 22,591 |
| | $ | 3,291 |
|
| | | | | | | |
Other comprehensive income before reclassifications, net of tax $711 and $3,131, respectively | | (3,960 | ) | | (5,447 | ) | | (9,407 | ) |
| | | | | | | |
Amounts reclassified from accumulated other comprehensive income, net of tax ($990) (2) | | 5,316 |
| | — |
| | 5,316 |
|
| | | | | | | |
Net other comprehensive income | | 1,356 |
| | (5,447 | ) | | (4,091 | ) |
| | | | | | | |
Balance at September 25, 2016 | | $ | (17,944 | ) | | $ | 17,144 |
| | $ | (800 | ) |
| |
(1) | All amounts are net of tax. Amounts in parentheses indicate debits. |
| |
(2) | See Reclassifications Out of Accumulated Other Comprehensive Income table below for reclassification details. |
|
| | | | | | | | | | | |
Reclassifications Out of Accumulated Other Comprehensive Income |
Details about Accumulated Other Comprehensive Income Components | | Amount Reclassified from Accumulated Other Comprehensive Income | | Affected Line Item in the Statement Where Net Income is Presented |
(In thousands) | | Nine months ended 9/24/2017 | | Nine months ended 9/25/2016 | | |
Interest rate contracts | | $ | 7,094 |
| | $ | 6,306 |
| | Net effect of swaps |
Provision for taxes | | (1,113 | ) | | (990 | ) | | Provision for taxes |
Losses on cash flow hedges | | $ | 5,981 |
| | $ | 5,316 |
| | Net of tax |
(12) Consolidating Financial Information of Guarantors and Issuers:
Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), and Magnum Management Corporation ("Magnum") are the co-issuers of the Partnership's June 2014 notes (see Note 5). The notes have been fully and unconditionally guaranteed, on a joint and several basis, by each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum) that guarantees the Partnership's senior secured credit facilities. There are no non-guarantor subsidiaries.
The following consolidating schedules present condensed financial information for Cedar Fair, L.P., Cedar Canada, and Magnum, the co-issuers, and each 100% owned subsidiary of Cedar Fair (other than Cedar Canada and Magnum), the guarantors (on a combined basis), as of September 24, 2017, December 31, 2016, and September 25, 2016 and for the three-month and nine-month periods ended September 24, 2017 and September 25, 2016. In lieu of providing separate unaudited financial statements for the guarantor subsidiaries, the Partnership has included the accompanying unaudited condensed consolidating financial statements.
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
September 24, 2017
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | 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 | | $ | — |
| | $ | — |
| | $ | 92,047 |
| | $ | 160,593 |
| | $ | (2,694 | ) | | $ | 249,946 |
|
Receivables | | — |
| | 1,285 |
| | 33,158 |
| | 837,594 |
| | (819,734 | ) | | 52,303 |
|
Inventories | | — |
| | — |
| | 2,423 |
| | 31,817 |
| | — |
| | 34,240 |
|
Other current assets | | 275 |
| | 12,843 |
| | 743 |
| | 16,829 |
| | (12,066 | ) | | 18,624 |
|
| | 275 |
| | 14,128 |
| | 128,371 |
| | 1,046,833 |
| | (834,494 | ) | | 355,113 |
|
Property and Equipment, net | | — |
| | 842 |
| | 183,205 |
| | 1,396,463 |
| | — |
| | 1,580,510 |
|
Investment in Park | | 566,548 |
| | 1,016,857 |
| | 224,464 |
| | 222,953 |
| | (2,030,822 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 64,730 |
| | 119,606 |
| | — |
| | 185,010 |
|
Other Intangibles, net | | — |
| | — |
| | 14,443 |
| | 24,089 |
| | — |
| | 38,532 |
|
Deferred Tax Asset | | — |
| | 32,190 |
| | — |
| | — |
| | (32,190 | ) | | — |
|
Other Assets | | — |
| | — |
| | 53 |
| | 17,354 |
| | — |
| | 17,407 |
|
| | $ | 567,497 |
| | $ | 1,064,017 |
| | $ | 615,266 |
| | $ | 2,827,298 |
| | $ | (2,897,506 | ) | | $ | 2,176,572 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Accounts payable | | $ | 478,416 |
| | $ | 345,150 |
| | $ | 6,431 |
| | $ | 26,141 |
| | $ | (822,428 | ) | | $ | 33,710 |
|
Deferred revenue | | — |
| | — |
| | 7,137 |
| | 79,595 |
| | — |
| | 86,732 |
|
Accrued interest | | 292 |
| | 195 |
| | 9,209 |
| | 14,232 |
| | — |
| | 23,928 |
|
Accrued taxes | | 1,589 |
| | — |
| | 14,910 |
| | 74,224 |
| | (12,066 | ) | | 78,657 |
|
Accrued salaries, wages and benefits | | — |
| | 28,306 |
| | 2,360 |
| | — |
| | — |
| | 30,666 |
|
Self-insurance reserves | | — |
| | 12,090 |
| | 1,725 |
| | 13,734 |
| | — |
| | 27,549 |
|
Other accrued liabilities | | 2,985 |
| | 7,772 |
| | 499 |
| | 9,306 |
| | — |
| | 20,562 |
|
| | 483,282 |
| | 393,513 |
| | 42,271 |
| | 217,232 |
| | (834,494 | ) | | 301,804 |
|
Deferred Tax Liability | | — |
| | — |
| | 19,511 |
| | 125,350 |
| | (32,190 | ) | | 112,671 |
|
Derivative Liability | | 8,933 |
| | 5,916 |
| | — |
| | — |
| | — |
| | 14,849 |
|
Other Liabilities | | — |
| | 1,398 |
| | — |
| | 10,942 |
| | — |
| | 12,340 |
|
Long-Term Debt: | | | | | | | | | | | | |
Term debt | | — |
| | 127,402 |
| | — |
| | 595,983 |
| | — |
| | 723,385 |
|
Notes | | — |
| | — |
| | 444,874 |
| | 491,367 |
| | — |
| | 936,241 |
|
| | — |
| | 127,402 |
| | 444,874 |
| | 1,087,350 |
| | — |
| | 1,659,626 |
|
| | | | | | | | | | | | |
Equity | | 75,282 |
| | 535,788 |
| | 108,610 |
| | 1,386,424 |
| | (2,030,822 | ) | | 75,282 |
|
| | $ | 567,497 |
| | $ | 1,064,017 |
| | $ | 615,266 |
| | $ | 2,827,298 |
| | $ | (2,897,506 | ) | | $ | 2,176,572 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2016
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | 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 | | $ | — |
| | $ | — |
| | $ | 65,563 |
| | $ | 58,178 |
| | $ | (1,025 | ) | | $ | 122,716 |
|
Receivables | | — |
| | 1,409 |
| | 28,019 |
| | 576,975 |
| | (570,989 | ) | | 35,414 |
|
Inventories | | — |
| | — |
| | 1,371 |
| | 24,905 |
| | — |
| | 26,276 |
|
Other current assets | | 173 |
| | 796 |
| | 2,229 |
| | 9,833 |
| | (1,761 | ) | | 11,270 |
|
| | 173 |
| | 2,205 |
| | 97,182 |
| | 669,891 |
| | (573,775 | ) | | 195,676 |
|
Property and Equipment, net | | — |
| | 844 |
| | 175,358 |
| | 1,363,018 |
| | — |
| | 1,539,220 |
|
Investment in Park | | 798,076 |
| | 937,626 |
| | 200,075 |
| | 324,282 |
| | (2,260,059 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 59,381 |
| | 119,605 |
| | — |
| | 179,660 |
|
Other Intangibles, net | | — |
| | — |
| | 13,255 |
| | 24,582 |
| | — |
| | 37,837 |
|
Deferred Tax Asset | | — |
| | 33,303 |
| | — |
| | — |
| | (33,303 | ) | | — |
|
Other Assets | | — |
| | 2,000 |
| | 108 |
| | 18,680 |
| | — |
| | 20,788 |
|
| | $ | 798,923 |
| | $ | 975,978 |
| | $ | 545,359 |
| | $ | 2,520,058 |
| | $ | (2,867,137 | ) | | $ | 1,973,181 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 572 |
| | $ | 64 |
| | $ | 2,139 |
| | $ | — |
| | 2,775 |
|
Accounts payable | | 428,396 |
| | 145,258 |
| | 740 |
| | 18,471 |
| | (572,014 | ) | | 20,851 |
|
Deferred revenue | | — |
| | — |
| | 5,601 |
| | 77,164 |
| | — |
| | 82,765 |
|
Accrued interest | | 4,613 |
| | 3,207 |
| | 2,057 |
| | 109 |
| | — |
| | 9,986 |
|
Accrued taxes | | 405 |
| | 18,653 |
| | — |
| | 41,661 |
| | (1,761 | ) | | 58,958 |
|
Accrued salaries, wages and benefits | | — |
| | 29,227 |
| | 1,131 |
| | — |
| | — |
| | 30,358 |
|
Self-insurance reserves | | — |
| | 12,490 |
| | 1,321 |
| | 13,252 |
| |
|
| | 27,063 |
|
Other accrued liabilities | | 2,282 |
| | 3,018 |
| | 193 |
| | 4,434 |
| | — |
| | 9,927 |
|
| | 435,696 |
| | 212,425 |
| | 11,107 |
| | 157,230 |
| | (573,775 | ) | | 242,683 |
|
Deferred Tax Liability | | — |
| | — |
| | 12,838 |
| | 125,350 |
| | (33,303 | ) | | 104,885 |
|
Derivative Liability | | 10,633 |
| | 7,088 |
| | — |
| | — |
| | — |
| | 17,721 |
|
Other Liabilities | | — |
| | 1,236 |
| | — |
| | 11,926 |
| | — |
| | 13,162 |
|
Long-Term Debt: | | | | | | | | | | | | |
Term debt | | — |
| | 123,672 |
| | 13,598 |
| | 456,958 |
| | — |
| | 594,228 |
|
Notes | | 292,075 |
| | 203,140 |
| | 444,768 |
| | — |
| | — |
| | 939,983 |
|
| | 292,075 |
| | 326,812 |
| | 458,366 |
| | 456,958 |
| | — |
| | 1,534,211 |
|
| | | | | | | | | | | | |
Equity | | 60,519 |
| | 428,417 |
| | 63,048 |
| | 1,768,594 |
| | (2,260,059 | ) | | 60,519 |
|
| | $ | 798,923 |
| | $ | 975,978 |
| | $ | 545,359 |
| | $ | 2,520,058 |
| | $ | (2,867,137 | ) | | $ | 1,973,181 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
September 25, 2016
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | 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 | | $ | — |
| | $ | — |
| | $ | 75,562 |
| | $ | 111,740 |
| | $ | — |
| | $ | 187,302 |
|
Receivables | | (5 | ) | | 1,387 |
| | 24,964 |
| | 585,190 |
| | (560,000 | ) | | 51,536 |
|
Inventories | | — |
| | — |
| | 1,519 |
| | 29,540 |
| | — |
| | 31,059 |
|
Other current assets | | 275 |
| | 24,479 |
| | 680 |
| | 12,800 |
| | (24,425 | ) | | 13,809 |
|
| | 270 |
| | 25,866 |
| | 102,725 |
| | 739,270 |
| | (584,425 | ) | | 283,706 |
|
Property and Equipment, net | | — |
| | 876 |
| | 179,172 |
| | 1,345,992 |
| | — |
| | 1,526,040 |
|
Investment in Park | | 820,465 |
| | 963,870 |
| | 197,538 |
| | 347,137 |
| | (2,329,010 | ) | | — |
|
Goodwill | | 674 |
| | — |
| | 95,180 |
| | 119,606 |
| | — |
| | 215,460 |
|
Other Intangibles, net | | — |
| | — |
| | 13,519 |
| | 22,911 |
| | — |
| | 36,430 |
|
Deferred Tax Asset | | — |
| | 3,651 |
| | — |
| | — |
| | (3,651 | ) | | — |
|
Other Assets | | — |
| | 1,999 |
| | 123 |
| | 19,351 |
| | — |
| | 21,473 |
|
| | $ | 821,409 |
| | $ | 996,262 |
| | $ | 588,257 |
| | $ | 2,594,267 |
| | $ | (2,917,086 | ) | | $ | 2,083,109 |
|
LIABILITIES AND PARTNERS’ EQUITY | | | | | | | | | | | | |
Current Liabilities: | | | | | | | | | | | | |
Current maturities of long-term debt | | $ | — |
| | $ | 247 |
| | $ | 28 |
| | $ | 925 |
| | $ | — |
| | $ | 1,200 |
|
Accounts payable | | 399,384 |
| | 164,335 |
| | 1,342 |
| | 27,830 |
| | (560,000 | ) | | 32,891 |
|
Deferred revenue | | — |
| | — |
| | 5,091 |
| | 60,657 |
| | — |
| | 65,748 |
|
Accrued interest | | 875 |
| | 597 |
| | 7,784 |
| | 1,683 |
| | — |
| | 10,939 |
|
Accrued taxes | | 3,325 |
| | — |
| | 14,109 |
| | 76,907 |
| | (24,425 | ) | | 69,916 |
|
Accrued salaries, wages and benefits | | — |
| | 40,588 |
| | 2,156 |
| | — |
| | — |
| | 42,744 |
|
Self-insurance reserves | | — |
| | 12,394 |
| | 1,567 |
| | 12,859 |
| | — |
| | 26,820 |
|
Other accrued liabilities | | 2,358 |
| | 3,532 |
| | 510 |
| | 5,948 |
| | — |
| | 12,348 |
|
| | 405,942 |
| | 221,693 |
| | 32,587 |
| | 186,809 |
| | (584,425 | ) | | 262,606 |
|
Deferred Tax Liability | | — |
| | — |
| | 19,497 |
| | 121,866 |
| | (3,651 | ) | | 137,712 |
|
Derivative Liability | | 18,111 |
| | 12,074 |
| | — |
| | — |
| | — |
| | 30,185 |
|
Other Liabilities | | — |
| | 1,520 |
| | — |
| | 10,968 |
| | — |
| | 12,488 |
|
Long-Term Debt: | | | | | | | | | | | | |
Term debt | | — |
| | 123,996 |
| | 13,616 |
| | 457,641 |
| | — |
| | 595,253 |
|
Notes | | 291,909 |
| | 203,025 |
| | 444,484 |
| | — |
| | — |
| | 939,418 |
|
| | 291,909 |
| | 327,021 |
| | 458,100 |
| | 457,641 |
| | — |
| | 1,534,671 |
|
| | | | | | | | | | | | |
Equity | | 105,447 |
| | 433,954 |
| | 78,073 |
| | 1,816,983 |
| | (2,329,010 | ) | | 105,447 |
|
| | $ | 821,409 |
| | $ | 996,262 |
| | $ | 588,257 |
| | $ | 2,594,267 |
| | $ | (2,917,086 | ) | | $ | 2,083,109 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended September 24, 2017
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | |
Net revenues | | $ | 69,999 |
| | $ | 169,429 |
| | $ | 85,963 |
| | $ | 596,837 |
| | $ | (269,539 | ) | | $ | 652,689 |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of food, merchandise, and games revenues | | — |
| | — |
| | 7,735 |
| | 44,912 |
| | — |
| | 52,647 |
|
Operating expenses | | — |
| | 118,614 |
| | 19,627 |
| | 334,008 |
| | (269,539 | ) | | 202,710 |
|
Selling, general and administrative | | 327 |
| | 21,752 |
| | 4,539 |
| | 45,045 |
| | — |
| | 71,663 |
|
Depreciation and amortization | | — |
| | 9 |
| | 7,856 |
| | 62,195 |
| | — |
| | 70,060 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | 87 |
| | 1,260 |
| | — |
| | 1,347 |
|
Gain on sale of investment | | — |
| | (1,877 | ) | | — |
| | — |
| | — |
| | (1,877 | ) |
| | 327 |
| | 138,498 |
| | 39,844 |
| | 487,420 |
| | (269,539 | ) | | 396,550 |
|
Operating income | | 69,672 |
| | 30,931 |
| | 46,119 |
| | 109,417 |
| | — |
| | 256,139 |
|
Interest expense, net | | 4,857 |
| | 4,305 |
| | 6,152 |
| | 5,973 |
| | — |
| | 21,287 |
|
Net effect of swaps | | (578 | ) | | (374 | ) | | — |
| | — |
| | — |
| | (952 | ) |
Gain on foreign currency | | — |
| | (27 | ) | | (29,166 | ) | | — |
| | — |
| | (29,193 | ) |
Other (income) expense | | 62 |
| | (26,676 | ) | | 1,163 |
| | 25,386 |
| | — |
| | (65 | ) |
Income from investment in affiliates | | (132,699 | ) | | (98,522 | ) | | (16,843 | ) | | (58,378 | ) | | 306,442 |
| | — |
|
Income before taxes | | 198,030 |
| | 152,225 |
| | 84,813 |
| | 136,436 |
| | (306,442 | ) | | 265,062 |
|
Provision for taxes | | 6,715 |
| | 19,526 |
| | 26,432 |
| | 21,074 |
| | — |
| | 73,747 |
|
Net income | | $ | 191,315 |
| | $ | 132,699 |
| | $ | 58,381 |
| | $ | 115,362 |
| | $ | (306,442 | ) | | $ | 191,315 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | |
Foreign currency translation adjustment | | (11,143 | ) | | — |
| | (11,143 | ) | | — |
| | 11,143 |
| | (11,143 | ) |
Unrealized gain on cash flow hedging derivatives | | 1,994 |
| | 605 |
| | — |
| | — |
| | (605 | ) | | 1,994 |
|
Other comprehensive income (loss), (net of tax) | | (9,149 | ) | | 605 |
| | (11,143 | ) | | — |
| | 10,538 |
| | (9,149 | ) |
Total comprehensive income | | $ | 182,166 |
| | $ | 133,304 |
| | $ | 47,238 |
| | $ | 115,362 |
| | $ | (295,904 | ) | | $ | 182,166 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended September 25, 2016
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | |
Net revenues | | $ | 92,371 |
| | $ | 172,703 |
| | $ | 77,164 |
| | $ | 606,823 |
| | $ | (298,778 | ) | | $ | 650,283 |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of food, merchandise, and games revenues | | — |
| | — |
| | 6,417 |
| | 45,640 |
| | — |
| | 52,057 |
|
Operating expenses | | (10 | ) | | 119,140 |
| | 17,885 |
| | 361,055 |
| | (298,778 | ) | | 199,292 |
|
Selling, general and administrative | | 610 |
| | 21,412 |
| | 4,413 |
| | 38,664 |
| | — |
| | 65,099 |
|
Depreciation and amortization | | — |
| | 9 |
| | 7,624 |
| | 57,052 |
| | — |
| | 64,685 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | 57 |
| | 1,298 |
| | — |
| | 1,355 |
|
| | 600 |
| | 140,561 |
| | 36,396 |
| | 503,709 |
| | (298,778 | ) | | 382,488 |
|
Operating income | | 91,771 |
| | 32,142 |
| | 40,768 |
| | 103,114 |
| | — |
| | 267,795 |
|
Interest expense, net | | 7,984 |
| | 5,759 |
| | 6,323 |
| | 833 |
| | — |
| | 20,899 |
|
Net effect of swaps | | 959 |
| | 691 |
| | — |
| | — |
| | — |
| | 1,650 |
|
Loss on foreign currency | | — |
| | — |
| | 7,337 |
| | 4 |
| | — |
| | 7,341 |
|
Other (income) expense | | 62 |
| | (29,663 | ) | | 1,302 |
| | 28,299 |
| | — |
| | — |
|
Income from investment in affiliates | | (98,451 | ) | | (62,240 | ) | | (12,574 | ) | | (28,737 | ) | | 202,002 |
| | — |
|
Income before taxes | | 181,217 |
| | 117,595 |
| | 38,380 |
| | 102,715 |
| | (202,002 | ) | | 237,905 |
|
Provision for taxes | | 6,230 |
| | 19,142 |
| | 9,643 |
| | 27,903 |
| | — |
| | 62,918 |
|
Net income | | $ | 174,987 |
| | $ | 98,453 |
| | $ | 28,737 |
| | $ | 74,812 |
| | $ | (202,002 | ) | | $ | 174,987 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | |
Foreign currency translation adjustment | | 1,397 |
| | — |
| | 1,397 |
| | — |
| | (1,397 | ) | | 1,397 |
|
Unrealized gain on cash flow hedging derivatives | | 1,994 |
| | 606 |
| | — |
| | — |
| | (606 | ) | | 1,994 |
|
Other comprehensive income (loss), (net of tax) | | 3,391 |
| | 606 |
| | 1,397 |
| | — |
| | (2,003 | ) | | 3,391 |
|
Total comprehensive income | | $ | 178,378 |
| | $ | 99,059 |
| | $ | 30,134 |
| | $ | 74,812 |
| | $ | (204,005 | ) | | $ | 178,378 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended September 24, 2017
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | |
Net revenues | | $ | 92,672 |
| | $ | 262,739 |
| | $ | 114,141 |
| | $ | 1,019,399 |
| | $ | (395,146 | ) | | $ | 1,093,805 |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of food, merchandise, and games revenues | | — |
| | — |
| | 10,569 |
| | 81,807 |
| | — |
| | 92,376 |
|
Operating expenses | | — |
| | 248,047 |
| | 37,701 |
| | 556,777 |
| | (395,146 | ) | | 447,379 |
|
Selling, general and administrative | | 2,254 |
| | 51,358 |
| | 8,592 |
| | 88,938 |
| | — |
| | 151,142 |
|
Depreciation and amortization | | — |
| | 26 |
| | 12,869 |
| | 113,342 |
| | — |
| | 126,237 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | 542 |
| | 2,515 |
| | — |
| | 3,057 |
|
Gain on sale of investment | | — |
| | (1,877 | ) | | — |
| | — |
| | — |
| | (1,877 | ) |
| | 2,254 |
| | 297,554 |
| | 70,273 |
| | 843,379 |
| | (395,146 | ) | | 818,314 |
|
Operating income (loss) | | 90,418 |
| | (34,815 | ) | | 43,868 |
| | 176,020 |
| | — |
| | 275,491 |
|
Interest expense, net | | 18,285 |
| | 13,893 |
| | 18,317 |
| | 11,578 |
| | — |
| | 62,073 |
|
Net effect of swaps | | 2,162 |
| | 1,555 |
| | — |
| | — |
| | — |
| | 3,717 |
|
Loss on early debt extinguishment | | 11,773 |
| | 8,188 |
| | 198 |
| | 2,956 |
| | — |
| | 23,115 |
|
Gain on foreign currency | | — |
| | (27 | ) | | (35,020 | ) | | — |
| | — |
| | (35,047 | ) |
Other (income) expense | | 187 |
| | (56,623 | ) | | 2,640 |
| | 53,731 |
| | — |
| | (65 | ) |
Income from investment in affiliates | | (108,835 | ) | | (109,414 | ) | | (24,389 | ) | | (58,648 | ) | | 301,286 |
| | — |
|
Income before taxes | | 166,846 |
| | 107,613 |
| | 82,122 |
| | 166,403 |
| | (301,286 | ) | | 221,698 |
|
Provision (benefit) for taxes | | 8,917 |
| | (1,223 | ) | | 23,473 |
| | 32,602 |
| | — |
| | 63,769 |
|
Net income | | $ | 157,929 |
| | $ | 108,836 |
| | $ | 58,649 |
| | $ | 133,801 |
| | $ | (301,286 | ) | | $ | 157,929 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | |
Foreign currency translation adjustment | | (13,085 | ) | | — |
| | (13,085 | ) | | — |
| | 13,085 |
| | (13,085 | ) |
Unrealized gain on cash flow hedging derivatives | | 5,981 |
| | 1,816 |
| | — |
| | — |
| | (1,816 | ) | | 5,981 |
|
Other comprehensive income (loss), (net of tax) | | (7,104 | ) | | 1,816 |
| | (13,085 | ) | | — |
| | 11,269 |
| | (7,104 | ) |
Total comprehensive income | | $ | 150,825 |
| | $ | 110,652 |
| | $ | 45,564 |
| | $ | 133,801 |
| | $ | (290,017 | ) | | $ | 150,825 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Nine Months Ended September 25, 2016
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | |
Net revenues | | $ | 131,215 |
| | $ | 271,069 |
| | $ | 107,637 |
| | $ | 1,036,162 |
| | $ | (449,328 | ) | | $ | 1,096,755 |
|
Costs and expenses: | | | | | | | | | | | | |
Cost of food, merchandise, and games revenues | | — |
| | — |
| | 9,389 |
| | 83,471 |
| | — |
| | 92,860 |
|
Operating expenses | | 2 |
| | 246,624 |
| | 36,249 |
| | 607,874 |
| | (449,328 | ) | | 441,421 |
|
Selling, general and administrative | | 2,264 |
| | 49,307 |
| | 8,757 |
| | 81,754 |
| | — |
| | 142,082 |
|
Depreciation and amortization | | — |
| | 27 |
| | 13,022 |
| | 105,126 |
| | — |
| | 118,175 |
|
Loss on impairment / retirement of fixed assets, net | | — |
| | — |
| | 83 |
| | 5,299 |
| | — |
| | 5,382 |
|
| | 2,266 |
| | 295,958 |
| | 67,500 |
| | 883,524 |
| | (449,328 | ) | | 799,920 |
|
Operating income (loss) | | 128,949 |
| | (24,889 | ) | | 40,137 |
| | 152,638 |
| | — |
| | 296,835 |
|
Interest expense, net | | 23,776 |
| | 17,830 |
| | 18,672 |
| | 1,507 |
| | — |
| | 61,785 |
|
Net effect of swaps | | 5,617 |
| | 3,285 |
| | — |
| | — |
| | — |
| | 8,902 |
|
(Gain) loss on foreign currency | | — |
| | — |
| | (23,679 | ) | | 4 |
| | — |
| | (23,675 | ) |
Other (income) expense | | 187 |
| | (69,801 | ) | | 3,051 |
| | 66,563 |
| | — |
| | — |
|
Income from investment in affiliates | | (94,910 | ) | | (78,515 | ) | | (18,008 | ) | | (44,399 | ) | | 235,832 |
| | — |
|
Income before taxes | | 194,279 |
| | 102,312 |
| | 60,101 |
| | 128,963 |
| | (235,832 | ) | | 249,823 |
|
Provision for taxes | | 9,795 |
| | 7,403 |
| | 15,701 |
| | 32,440 |
| | — |
| | 65,339 |
|
Net income | | $ | 184,484 |
| | $ | 94,909 |
| | $ | 44,400 |
| | $ | 96,523 |
| | $ | (235,832 | ) | | $ | 184,484 |
|
Other comprehensive income (loss), (net of tax): | | | | | | | | | | | | |
Foreign currency translation adjustment | | (5,447 | ) | | — |
| | (5,447 | ) | | — |
| | 5,447 |
| | (5,447 | ) |
Unrealized gain on cash flow hedging derivatives | | 1,356 |
| | 455 |
| | — |
| | — |
| | (455 | ) | | 1,356 |
|
Other comprehensive income (loss), (net of tax) | | (4,091 | ) | | 455 |
| | (5,447 | ) | | — |
| | 4,992 |
| | (4,091 | ) |
Total comprehensive income | | $ | 180,393 |
| | $ | 95,364 |
| | $ | 38,953 |
| | $ | 96,523 |
| | $ | (230,840 | ) | | $ | 180,393 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 24, 2017
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | |
NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 61,966 |
| | $ | (3,954 | ) | | $ | 40,125 |
| | $ | 227,588 |
| | $ | (3,107 | ) | | $ | 322,618 |
|
CASH FLOWS FROM (FOR) INVESTING ACTIVITIES | | | | | | | | | | | | |
Intercompany receivables (payments) receipts | | — |
| | — |
| | — |
| | (248,190 | ) | | 248,190 |
| | — |
|
Proceeds from returns on investments | | 338,000 |
| | 15,500 |
| | — |
| | 146,500 |
| | (500,000 | ) | | — |
|
Proceeds from sale of investment | | — |
| | 3,281 |
| | — |
| | — |
| | — |
| | 3,281 |
|
Purchase of identifiable intangible assets | | — |
| | — |
| | — |
| | (66 | ) | | — |
| | (66 | ) |
Capital expenditures | | — |
| | (25 | ) | | (5,679 | ) | | (146,669 | ) | | — |
| | (152,373 | ) |
Net cash from (for) investing activities | | 338,000 |
| | 18,756 |
| | (5,679 | ) | | (248,425 | ) | | (251,810 | ) | | (149,158 | ) |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | |
Intercompany payables (payments) receipts | | 50,003 |
| | 198,187 |
| | — |
| | — |
| | (248,190 | ) | | — |
|
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 | | (145,955 | ) | | — |
| | — |
| | — |
| | 1,438 |
| | (144,517 | ) |
Payment of debt issuance costs | | — |
| | (1,313 | ) | | — |
| | (18,371 | ) | | — |
| | (19,684 | ) |
Tax effect of units involved in treasury unit transactions | | — |
| | (2,560 | ) | | — |
| | — |
| | — |
| | (2,560 | ) |
Payments related to tax withholding for equity compensation | | — |
| | (2,053 | ) | | — |
| | — |
| | — |
| | (2,053 | ) |
Net cash from (for) financing activities | | (399,966 | ) | | (14,802 | ) | | (13,854 | ) | | 123,252 |
| | 253,248 |
| | (52,122 | ) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 5,892 |
| | — |
| | — |
| | 5,892 |
|
CASH AND CASH EQUIVALENTS | | | | | | | | | | | | |
Net increase for the period | | — |
| | — |
| | 26,484 |
| | 102,415 |
| | (1,669 | ) | | 127,230 |
|
Balance, beginning of period | | — |
| | — |
| | 65,563 |
| | 58,178 |
| | (1,025 | ) | | 122,716 |
|
Balance, end of period | | $ | — |
| | $ | — |
| | $ | 92,047 |
| | $ | 160,593 |
| | $ | (2,694 | ) | | $ | 249,946 |
|
CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 25, 2016
(In thousands)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Cedar Fair L.P. (Parent) | | Co-Issuer Subsidiary (Magnum) | | Co-Issuer Subsidiary (Cedar Canada) | | Guarantor Subsidiaries | | Eliminations | | Total |
| | | | | | | | | | | | |
NET CASH FROM (FOR) OPERATING ACTIVITIES | | $ | 99,232 |
| | $ | (54,042 | ) | | $ | 41,273 |
| | $ | 256,105 |
| | $ | (1,866 | ) | | $ | 340,702 |
|
CASH FLOWS FOR INVESTING ACTIVITIES | | | | | | | | | | | | |
Intercompany receivables (payments) receipts | | — |
| | — |
| | — |
| | (22,771 | ) | | 22,771 |
| | — |
|
Capital expenditures | | — |
| | — |
| | (6,451 | ) | | (120,413 | ) | | — |
| | (126,864 | ) |
Net cash for investing activities | | — |
| | — |
| | (6,451 | ) | | (143,184 | ) | | 22,771 |
| | (126,864 | ) |
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES | | | | | | | | | | | | |
Term debt payments | | — |
| | (1,237 | ) | | (138 | ) | | (4,625 | ) | | — |
| | (6,000 | ) |
Distributions paid to partners | | (140,908 | ) | | — |
| | — |
| | — |
| | 1,866 |
| | (139,042 | ) |
Intercompany payables (payments) receipts | | (35,331 | ) | | 58,102 |
| | — |
| | — |
| | (22,771 | ) | | — |
|
Tax effect of units involved in treasury unit transactions | | — |
| | (1,903 | ) | | — |
| | — |
| | — |
| | (1,903 | ) |
Payments related to tax withholding for equity compensation | | — |
| | (920 | ) | | — |
| | — |
| | — |
| | (920 | ) |
Net cash from (for) financing activities | | (176,239 | ) | | 54,042 |
| | (138 | ) | | (4,625 | ) | | (20,905 | ) | | (147,865 | ) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | | — |
| | — |
| | 1,772 |
| | — |
| | — |
| | 1,772 |
|
CASH AND CASH EQUIVALENTS | | | | | | | | | | | | |
Net increase (decrease) for the period | | (77,007 | ) | | — |
| | 36,456 |
| | 108,296 |
| | — |
| | 67,745 |
|
Balance, beginning of period | | 77,007 |
| | — |
| | 39,106 |
| | 3,444 |
| | — |
| | 119,557 |
|
Balance, end of period | | $ | — |
| | $ | — |
| | $ | 75,562 |
| | $ | 111,740 |
| | $ | — |
| | $ | 187,302 |
|
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Business Overview:
We generate our revenues primarily from sales of (1) admission to our amusement parks and water parks, (2) food, merchandise and games inside our parks, and (3) hotel rooms, extra-charge attractions, and food and other attractions both inside and outside our parks.parks, and (3) accommodations, extra-charge products, and other revenue sources. Our principal costs and expenses, which include salaries and wages, advertising, maintenance, operating supplies, maintenance, advertising, utilities and insurance,property taxes, are relatively fixed for a 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 allocating 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 - Operations, Regional Vice Presidents and the park general managers.
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. 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. As vaccination distribution efforts continued during the second quarter of 2021 and we were able to secure additional labor, we removed most capacity restrictions, guest reservation requirements and other protocols at our U.S. properties beginning in July 2021. We were able to open our Canadian property, Canada's Wonderland, in July 2021. Canada's Wonderland is operating with capacity restrictions, guest reservations, and other operating protocols in place. We adjusted and may continue to adjust our 2021 operating calendars as we respond to changes in guest demand, labor availability and any state and local restrictions. Our future operations are dependent on factors outside of 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.
Critical Accounting Policies:
Management’s discussionDiscussion and analysisAnalysis of financial conditionFinancial Condition and resultsResults of operationsOperations is based upon our unaudited condensed 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 unaudited condensed consolidated financial statements. Beyond estimates in the normal course of business, management has also made significant estimates and assumptions related to the COVID-19 pandemic to determine our liquidity requirements and estimate the impact on our business, including financial results in the near and long-term. Actual results could differ significantly from those estimates under different assumptions and conditions.
Management believes that judgment and estimates related to the following critical accounting policies could materially affect our unaudited condensed consolidated financial statements:
•Impairment of Long-Lived Assets
•Goodwill and Other Intangible Assets
•Self-Insurance Reserves
•Derivative Financial Instruments
•Revenue Recognition
•Income Taxes
In the third quarter of 2017,2021, there were no changes in the above critical accounting policies from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.2020.
Adjusted EBITDA:
We believe that Adjusted EBITDA (earningsrepresents earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the Third Amended 2017 Credit Agreement and the 2013 Credit Agreement)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 generally accepted accounting principles.GAAP. In addition, Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
The table below sets forth a reconciliation of Adjusted EBITDA to net income (loss) for the three-three and nine-monthnine month periods ended September 24,26, 2021, September 27, 2020 and September 29, 2019. Due to the effects of the COVID-19 pandemic on our 2020 results, we included comparisons to 2019 in addition to comparisons to 2020 within the Results of Operations.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended | | Nine months ended |
(In thousands) | September 26, 2021 | | September 27, 2020 | | September 29, 2019 | | September 26, 2021 | | September 27, 2020 | | September 29, 2019 |
Net income (loss) | $ | 147,987 | | | $ | (136,261) | | | $ | 189,955 | | | $ | (21,299) | | | $ | (484,790) | | | $ | 169,580 | |
Interest expense | 46,270 | | | 40,376 | | | 27,967 | | | 136,371 | | | 104,341 | | | 71,814 | |
Interest income | (35) | | | (25) | | | (807) | | | (66) | | | (449) | | | (1,121) | |
Provision (benefit) for taxes | 43,764 | | | (30,393) | | | 48,815 | | | 16,859 | | | (116,156) | | | 43,506 | |
Depreciation and amortization | 77,461 | | | 67,436 | | | 68,335 | | | 112,906 | | | 127,447 | | | 137,828 | |
EBITDA | 315,447 | | | (58,867) | | | 334,265 | | | 244,771 | | | (369,607) | | | 421,607 | |
Loss on early debt extinguishment | — | | | 317 | | | — | | | 4 | | | 2,013 | | | — | |
Net effect of swaps | (3,186) | | | (1,558) | | | 3,910 | | | (10,582) | | | 19,780 | | | 21,068 | |
Non-cash foreign currency loss (gain) | 15,157 | | | (9,561) | | | 5,617 | | | (1,665) | | | 12,127 | | | (12,528) | |
Non-cash equity compensation expense | 2,903 | | | 1,618 | | | 2,930 | | | 11,910 | | | (1,842) | | | 8,760 | |
Loss on impairment / retirement of fixed assets, net | 2,397 | | | 727 | | | 1,675 | | | 5,873 | | | 8,530 | | | 3,781 | |
Loss on impairment of goodwill and other intangibles | — | | | 15,818 | | | — | | | — | | | 103,999 | | | — | |
Gain on sale of investment | — | | | (11) | | | — | | | (2) | | | (11) | | | (617) | |
Acquisition-related costs | — | | | — | | | 6,292 | | | — | | | 16 | | | 7,238 | |
| | | | | | | | | | | |
Other (1) | 650 | | | 29 | | | 499 | | | 1,157 | | | 183 | | | 782 | |
Adjusted EBITDA | $ | 333,368 | | | $ | (51,488) | | | $ | 355,188 | | | $ | 251,466 | | | $ | (224,812) | | | $ | 450,091 | |
(1) Consists of certain costs as defined in our Third Amended 2017 Credit Agreement and September 25, 2016.prior credit agreements. These items are excluded from the 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.
|
| | | | | | | | | | | | | | | |
| Three months ended | | Nine months ended |
(In thousands) | 9/24/2017 | | 9/25/2016 | | 9/24/2017 | | 9/25/2016 |
Net income | $ | 191,315 |
| | $ | 174,987 |
| | $ | 157,929 |
| | $ | 184,484 |
|
Interest expense | 21,638 |
| | 20,957 |
| | 62,472 |
| | 61,869 |
|
Interest income | (351 | ) | | (58 | ) | | (399 | ) | | (84 | ) |
Provision for taxes | 73,747 |
| | 62,918 |
| | 63,769 |
| | 65,339 |
|
Depreciation and amortization | 70,060 |
| | 64,685 |
| | 126,237 |
| | 118,175 |
|
EBITDA | 356,409 |
| | 323,489 |
| | 410,008 |
| | 429,783 |
|
Loss on early debt extinguishment | — |
| | — |
| | 23,115 |
| | — |
|
Net effect of swaps | (952 | ) | | 1,650 |
| | 3,717 |
| | 8,902 |
|
Non-cash foreign currency (gain) loss | (29,156 | ) | | 7,360 |
| | (34,985 | ) | | (23,535 | ) |
Non-cash equity compensation expense | 3,126 |
| | 2,160 |
| | 9,728 |
| | 6,909 |
|
Loss on impairment / retirement of fixed assets, net | 1,347 |
| | 1,355 |
| | 3,057 |
| | 5,382 |
|
Gain on sale of investment | (1,877 | ) | | — |
| | (1,877 | ) | | — |
|
Employment practice litigation costs | 4,696 |
| | — |
| | 4,696 |
| | — |
|
Other (1) | 49 |
| | 1 |
| | 397 |
| | 341 |
|
Adjusted EBITDA | $ | 333,642 |
| | $ | 336,015 |
| | $ | 417,856 |
| | $ | 427,782 |
|
| |
(1) | Consists of certain costs as defined in the Company's 2017 Credit Agreement and prior credit agreements. These items are excluded in the calculation of Adjusted EBITDA and have included certain legal expenses, costs associated with certain ride abandonment or relocation expenses, and severance expenses. This balance also includes unrealized gains and losses on short-term investments. |
Results of Operations:
We believe the following are significantkey operational measures in the structure of our managementmanagerial and operational reporting, and they are used as major factors in keysignificant 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.
Both Net revenues consist of in-park per capita spendingrevenues and out-of-park revenues exclude less amounts remitted forto outside parties under concessionaire arrangements.arrangements (see Note 3).
Nine months ended September 24, 201726, 2021 vs. Nine months ended September 27, 2020
Due to the effects of the COVID-19 pandemic, the results for the nine months ended September 26, 2021 were not directly comparable with the results for the nine months ended September 27, 2020. The fiscalcurrent nine-month period included 1,381 operating days compared with a total of 443 operating days for the nine-month period ended September 24, 2017 included27, 2020.
In the current period and 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 totalstaggered 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 the third quarter of 1,7222021. 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 compared with 1,825in July and August at some of our smaller properties and by including additional operating days forin September. The current period also included results prior to the fiscalMay 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 nine-month period ended September 25, 2016. On a same-park basis (excluding Wildwater Kingdom, one27, 2020 and due to the effects of the Partnership's separately gated outdoor waterCOVID-19 pandemic, our properties closed on March 14, 2020. Eight of our 13 properties resumed partial operations on a staggered basis during the third 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. 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 which was closed afterprior to the 2016 operating season), the fiscal nine-month period ended September 25, 2016 included a totalMarch 14, 2020 closure of 1,742 operating days. our properties.
The following table presents key financial information for the nine months ended September 24, 201726, 2021 and September 25, 2016:27, 2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended | | Increase (Decrease) |
| | September 26, 2021 | | September 27, 2020 | | $ | | % |
| | (Amounts in thousands, except per capita and operating days) |
Net revenues | | $ | 987,283 | | | $ | 147,678 | | | $ | 839,605 | | | N/M |
Operating costs and expenses | | 749,242 | | | 370,878 | | | 378,364 | | | 102.0 | % |
Depreciation and amortization | | 112,906 | | | 127,447 | | | (14,541) | | | (11.4) | % |
Loss on impairment / retirement of fixed assets, net | | 5,873 | | | 8,530 | | | (2,657) | | | N/M |
Loss on impairment of goodwill and other intangibles | | — | | | 103,999 | | | (103,999) | | | N/M |
Gain on sale of investment | | (2) | | | (11) | | | 9 | | | N/M |
Operating income (loss) | | $ | 119,264 | | | $ | (463,165) | | | $ | 582,429 | | | 125.7 | % |
| | | | | | | | |
Other Data: | | | | | | | | |
Adjusted EBITDA (1) | | $ | 251,466 | | | $ | (224,812) | | | $ | 476,278 | | | N/M |
| | | | | | | | |
Attendance | | 14,178 | | | 2,280 | | | 11,898 | | | N/M |
In-park per capita spending | | $ | 62.26 | | | $ | 46.49 | | | $ | 15.77 | | | 33.9 | % |
Out-of-park revenues | | $ | 134,054 | | | $ | 46,705 | | | $ | 87,349 | | | 187.0 | % |
Operating days | | 1,381 | | | 443 | | | 938 | | | N/M |
|
| | | | | | | | | | | | | | | |
| | Nine months ended | | Nine months ended | | Increase (Decrease) |
| | 9/24/2017 | | 9/25/2016 | | $ | | % |
| | (Amounts in thousands, except for per capita spending) |
Net revenues | | $ | 1,093,805 |
| | $ | 1,096,755 |
| | $ | (2,950 | ) | | (0.3 | )% |
Operating costs and expenses | | 690,897 |
| | 676,363 |
| | 14,534 |
| | 2.1 | % |
Depreciation and amortization | | 126,237 |
| | 118,175 |
| | 8,062 |
| | 6.8 | % |
Loss on impairment / retirement of fixed assets, net | | 3,057 |
| | 5,382 |
| | (2,325 | ) | | N/M |
|
Gain on sale of investment | | (1,877 | ) | | — |
| | (1,877 | ) | | N/M |
|
Operating income | | $ | 275,491 |
| | $ | 296,835 |
| | $ | (21,344 | ) | | (7.2 | )% |
N/M - Not meaningful | | | | | | | | |
Other Data: | | | | | | | | |
Adjusted EBITDA (1) | | $ | 417,856 |
| | $ | 427,782 |
| | $ | (9,926 | ) | | (2.3 | )% |
Adjusted EBITDA margin (2) | | 38.2 | % | | 39.0 | % | | — |
| | (0.8 | )% |
Attendance | | 21,293 |
| | 21,472 |
| | (179 | ) | | (0.8 | )% |
In-park per capita spending | | $ | 47.24 |
| | $ | 46.82 |
| | $ | 0.42 |
| | 0.9 | % |
Out-of-park revenues | | $ | 120,165 |
| | $ | 121,859 |
| | $ | (1,694 | ) | | (1.4 | )% |
N/M Not meaningful either due to the nature of the expense line-item or due to minimal operations in the prior period
| |
(1) | For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation to net income, see page 29. |
| |
(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 measure of operating profitability. |
(1) For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation to net income (loss), see page 18.
For the nine months ended September 24, 2017,26, 2021, net revenues decreased by $3.0totaled $987.3 million to $1,093.8 million, from $1,096.8compared with $147.7 million for the first nine months of 2016. This reflects a 179,000-visit decrease in attendance which was partially offset by the impact of a $0.42 increase in in-park per capita spending. Out-of-park revenues decreased $1.7 million compared with the same period in the prior year. The decrease in attendance for the first nine months of 2017 relates primarily to the closure of Wildwater Kingdom after the 2016 operating season.ended September 27, 2020. The increase in in-parknet revenues was attributable to the 938 operating day increase in the current period resulting in an 11.9 million-visit increase in attendance and an $87.3 million increase in out-of-park revenues. In-park per capita spending for the nine months ended September 26, 2021 increased 34% to $62.26, which represented higher levels of guest spending across all key revenue categories, particularly admissions and extra-charge attractions, including front-of-line FastLane products, and was largely attributable to andriven by increases in pricing and volume. The increase in net revenues from our all-season dining and beverage programs, as well as our premium product offerings. The increase was partially offset byincluded a decrease in in-park per capita spending related to admissions resulting from a higher season pass attendance mix, and from a shift$4.7 million favorable impact of a portion of the estimated number of uses per season pass into the fourth quarter with three additional parks extending their operating seasons to include WinterFest, a holiday event operating during November and December. The decrease in out-of-park revenues was due to prior period revenues received from a Super Bowl 50 special event and a decline in accommodations revenue. Foreignforeign currency exchange rates had an immaterial impact on net revenues.at our Canadian park.
Operating costs and expenses for the first nine months of 2017ended September 26, 2021 increased 2.1%, or $14.5 million, to $690.9$749.2 million from $676.4$370.9 million for the first nine months of 2016. The increase isended September 27, 2020. This was the result of a $9.1$65.4 million increase in cost of goods sold, a $221.4 million increase in operating expenses and a $91.6 million increase in SG&A expense, a $6.0all of which were largely the result of the 938 operating day increase in the current period. While the majority of the $221.4 million increase in operating expense offset by a $0.5 million decrease in cost of goods sold. Cost of goods sold, as a percentage of food, merchandise, and games net revenue,expenses was comparable for both periods. Operating expenses grew by $6.0 million primarily due to increased seasonal wages which were driven by hourly rate increases, and increased operating supply expense attributable to incremental special andthe increase in operating days, there was also a meaningful increase in seasonal events andlabor rate in order to recruit
employees in a challenging labor market, as well as higher full-time wages, including accrued bonus plans. Similarly, the opening of several large capital projects. The $9.1$91.6 million increase in SG&A expense was primarily attributable todriven 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 current period consulting fees incurred as a reserve established for an employment practice claim, higher merchant fees, increased technology relatedresult of a business optimization program. The increase in operating costs and increased full-time wages and related employee benefits and taxes. Foreignexpenses included a $2.4 million unfavorable impact of foreign currency exchange rates had an immaterial impact on operating costs and expenses.at our Canadian park.
Depreciation and amortization expense for the first nine months of 2017 increased $8.1ended September 26, 2021 decreased $14.5 million to $126.2 million from $118.2 million forcompared with the same period in the prior year. The increase is attributable to a change in the estimated useful lives of a long-lived asset at Cedar Point and a series of other long-lived assets across the portfolio. For the first nine months ended September 27, 2020 due primarily to the full depreciation of 2017, the15-year useful lived property and equipment from our 2006 acquisition. The loss on impairment / retirement of fixed assets for the nine months ended September 26, 2021 was $3.1$5.9 million reflectingcompared with $8.5 million for the nine months ended September 27, 2020. The current period included retirements of assets in the normal course of business at severalbusiness. The nine months ended September 27, 2020 included a $2.7 million impairment charge with respect to the Schlitterbahn parks' long-lived assets triggered by the anticipated negative effects of our properties. Duringthe COVID-19 pandemic during the first quarter of 2020 (see Note 4). Similarly triggered by the anticipated negative effects of the COVID-19 pandemic, the loss on impairment of goodwill and other intangibles for the nine months ended September 27, 2020 included impairment charges of $73.6 million, $6.8 million and $7.9 million during the first quarter of 2020, as well as impairment charges of $11.3 million, $2.3 million and $2.2 million during the third quarter of 2017, a $1.9 million gain on sale2020 attributable to impairment of investment was recognized forgoodwill at the liquidation of a preferred equity investment.Schlitterbahn parks, goodwill at Dorney Park, and the Schlitterbahn trade name, respectively (see Note 5).
After the items above, operating income for the first nine months of 2017 decreased $21.3 million to $275.5ended September 26, 2021 totaled $119.3 million compared with an operating incomeloss of $296.8$463.2 million for the first nine months of 2016.ended September 27, 2020.
Interest expense for the first nine months ended September 26, 2021 increased $32.0 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 2017our swaps resulted in a benefit to earnings of $10.6 million for the nine months ended September 26, 2021 compared with a $19.8 million charge to earnings for the nine months ended September 27, 2020. The difference was comparableattributable to the same periodchange in the prior year.fair market value movements in our swap portfolio. We recognized a $23.1$2.0 million loss on early debt extinguishment during the nine months ended September 24, 2017 attributablerelated to theour April 2017 debt refinancing. The net effect of swaps resulted in a charge to earnings of $3.7 million for2020 refinancing during the first nine months of 2017 compared with a $8.9 million charge to earnings in 2016 for2020. During the same period. The difference reflects the amortization of amounts in OCI for our de-designated swap portfolio offset by fair market value movements for these swaps. During thecurrent period, we also recognized a $35.0$1.7 million net benefit to earnings for foreign currency gains and losses compared with a $23.7$12.0 million net benefitcharge to earnings for the same period in 2016.nine months ended September 27, 2020. Both amounts primarily representrepresented remeasurement of the U.S.-dollar denominated debt heldrecorded at our Canadian propertyentity from the applicable currencyU.S.-dollar to the legal entity's functional currency.
During the first nine months of 2017,ended September 26, 2021, a provision for taxes of $63.8$16.9 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes on our corporate subsidiaries. This comparescompared with a $65.3 million provisionbenefit for taxes recordedof $116.2 million for the first nine months of 2016.ended September 27, 2020. The decreasedifference in provision for taxes relates largelywas attributable to a larger prior period pretax loss 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 effectlaw, 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 foreign currency exchange relatedtaxable income. As a result of these changes, we expect to our Canadian property partially offsetrecognize two benefits. First, we expect to carry back the tax year 2020 losses incurred by an increase in pretax income from our corporate subsidiaries, compared withwhich will result in the samerefund of a portion of federal income taxes paid during the carryback period of approximately $79.7 million. Second, as of September 26, 2021, the annual effective tax rate included a net benefit of $2.3 million from carrying back the projected tax year ago.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 $7.2 million 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 incomeloss for the first nine months ended September 26, 2021 totaled $157.9$21.3 million, or $2.79$0.38 per diluted limited partner unit, compared with a net incomeloss of $184.5$484.8 million, or $3.27$8.58 per diluted limited partner unit, for the same period a year ago.nine months ended September 27, 2020.
For the nine month period, ourmonths ended September 26, 2021, Adjusted EBITDA decreased to $417.9totaled $251.5 million from $427.8 million for the same period in 2016. The approximate $9.9 million decrease incompared with an Adjusted EBITDA is due to decreased attendance and lower out-of-park revenue, as well as higher operating costs and expenses associated with labor, merchant fees and other planned spending. Our Adjusted EBITDA margin also decreased 80 basis points as a resultloss of lower net revenues and expense growth.
On a same-park basis (excluding Wildwater Kingdom), net revenues increased by $2.5 million to $1,093.8$224.8 million for the nine months ended September 24, 2017 from $1,091.3 million in the same period in the prior year. This is the result of a 59,000-visit27, 2020. The increase in attendanceAdjusted EBITDA was primarily due to the impact of COVID-19 related park closures in 2020 and a $0.15 increasethe related improvement in attendance, in-park per capita spending on a same-park basis. Operating costs and expenses (including depreciation and amortization, loss on impairmentout-of-park revenues from reopening parks in 2021.
ThreeNine months ended September 24, 201726, 2021 vs. Nine months ended September 29, 2019
As described above, the results for the nine months ended September 26, 2021 were not directly comparable with the results for the nine months ended September 27, 2020 due to the effects of the COVID-19 pandemic. The fiscal three-monthresults for the nine months ended September 26, 2021 were also not directly comparable with the nine months ended September 29, 2019 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 typical operating season in 2019. The current nine-month period ended September 24, 2017 consisted of a total of 960included 1,381 operating days compared with 1,021a total of 1,862 operating days for the fiscal three-month period ended September 25, 2016. On a same-park basis (excluding Wildwater Kingdom, one of the Partnership's separately gated outdoor water parks which was closed after the 2016 operating season), the fiscal three-monthnine-month period ended September 25, 2016 included a total of 965 operating days.29, 2019. The following table presents key financial information for the threenine months ended September 24, 201726, 2021 and September 25, 2016:29, 2019:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine months ended | | Increase (Decrease) |
| | September 26, 2021 | | September 29, 2019 | | $ | | % |
| | (Amounts in thousands, except per capita and operating days) |
Net revenues | | $ | 987,283 | | | $ | 1,217,679 | | | $ | (230,396) | | | (18.9) | % |
Operating costs and expenses | | 749,242 | | | 784,060 | | | (34,818) | | | (4.4) | % |
Depreciation and amortization | | 112,906 | | | 137,828 | | | (24,922) | | | (18.1) | % |
Loss on impairment / retirement of fixed assets, net | | 5,873 | | | 3,781 | | | 2,092 | | | N/M |
| | | | | | | | |
Gain on sale of investment | | (2) | | | (617) | | | 615 | | | N/M |
Operating income | | $ | 119,264 | | | $ | 292,627 | | | $ | (173,363) | | | (59.2) | % |
| | | | | | | | |
Other Data: | | | | | | | | |
Adjusted EBITDA (1) | | $ | 251,466 | | | $ | 450,091 | | | $ | (198,625) | | | (44.1) | % |
Adjusted EBITDA margin (2) | | 25.5 | % | | 37.0 | % | | | | (11.5) | % |
Attendance | | 14,178 | | | 22,864 | | | (8,686) | | | (38.0) | % |
In-park per capita spending (3) | | $ | 62.26 | | | $ | 48.73 | | | $ | 13.53 | | | 27.8 | % |
Out-of-park revenues | | $ | 134,054 | | | $ | 140,452 | | | $ | (6,398) | | | (4.6) | % |
Operating days | | 1,381 | | | 1,862 | | | (481) | | | (25.8) | % |
|
| | | | | | | | | | | | | | | |
| | Three months ended | | Three months ended | | Increase (Decrease) |
| | 9/24/2017 | | 9/25/2016 | | $ | | % |
| | (Amounts in thousands, except for per capita spending) |
Net revenues | | $ | 652,689 |
| | $ | 650,283 |
| | $ | 2,406 |
| | 0.4 | % |
Operating costs and expenses | | 327,020 |
| | 316,448 |
| | 10,572 |
| | 3.3 | % |
Depreciation and amortization | | 70,060 |
| | 64,685 |
| | 5,375 |
| | 8.3 | % |
Loss on impairment / retirement of fixed assets, net | | 1,347 |
| | 1,355 |
| | (8 | ) | | N/M |
|
Gain on sale of investment | | (1,877 | ) | | — |
| | (1,877 | ) | | N/M |
|
Operating income | | $ | 256,139 |
| | $ | 267,795 |
| | $ | (11,656 | ) | | (4.4 | )% |
N/M - Not meaningful | | | | | | | | |
Other Data: | | | | | | | | |
Adjusted EBITDA (1) | | $ | 333,642 |
| | $ | 336,015 |
| | $ | (2,373 | ) | | (0.7 | )% |
Attendance | | 12,428 |
| | 12,492 |
| | (64 | ) | | (0.5 | )% |
In-park per capita spending | | $ | 48.73 |
| | $ | 48.01 |
| | $ | 0.72 |
| | 1.5 | % |
Out-of-park revenues | | $ | 65,103 |
| | $ | 67,903 |
| | $ | (2,800 | ) | | (4.1 | )% |
N/M Not meaningful due to the nature of the expense line-item
| |
(1) | For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation to net income, see page 29. |
(1) For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation to net income (loss), see page 18.
(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 measure of operating profitability.
(3) Net revenues as disclosed within the statements of operations and comprehensive income (loss) consist of in-park revenues and out-of-park revenues less amounts remitted to outside parties under concessionaire arrangements. In-park per capita spending is calculated as in-park revenues divided by total attendance. In-park revenues and concessionaire remittance totaled $1.1 billion and $37.0 million, respectively, for the nine months ended September 29, 2019.
For the quarternine months ended September 24, 2017,26, 2021, net revenues increasedtotaled $987.3 million compared with $1.2 billion for the nine months ended September 29, 2019. The decrease in net revenues reflected the impact of an 8.7 million-visit, or 38.0%, decline in attendance offset by $2.4 million, to $652.7 million, from $650.3 million in the third quarter of 2016. This reflects a $0.72$13.53, or 28%, increase in in-park per capita spending, partially offset byspending. The decreases in net revenues and attendance were primarily attributable to 481 fewer operating days in the impact of a 64,000-visit decrease in attendance.current period. Out-of-park revenues for the nine months ended September 26, 2021 decreased $2.8$6.4 million compared with the same period in the prior year. The increase in in-park per capita spending was largely attributable to an increase in revenues from our all-season dining and beverage programs, as well as our premium product offerings and non-season pass admissions. The increase was partially offset by a decrease in in-park per capita spending related to season pass admissions resulting from a shift of a portion of the estimated number of uses per season pass into the fourth quarter with three additional parks extending their operating seasons to include WinterFest, a holiday event operating during November and December. The decrease in attendance for the third quarter relates to the closure of Wildwater Kingdom after the 2016 operating season.nine months ended September 29, 2019. The decrease in out-of-park revenues was attributable to prior period proceeds received during the third quarterdelayed opening of 2016our parks in 2021 until May 2021, as well as the temporary closure of two hotel properties for renovations, which was somewhat offset by revenues from a business interruption claim at Cedar Point and a decreasethe Knott's Berry Farm culinary festival in out-of-park food revenue. The increase in net revenues is net of a $0.9 million favorable impact of foreign currency exchange related to our Canadian park.the current period.
Operating costs and expenses for the quarter increased 3.3%, or $10.6nine months ended September 26, 2021 decreased $34.8 million to $327.0 million from $316.4 million incompared with the third quarter of 2016. The increase isnine months ended September 29, 2019. This was the result of a $6.6$20.5 million increasedecrease in cost of goods sold, an $8.1 million decrease in operating expenses and a $6.2 million decrease in SG&A expense, all of which were largely the result of fewer operating days in the current period. The decrease in operating expenses was primarily attributable to less seasonal labor hours, maintenance costs, and entertainment costs due to fewer operating days offset by a $3.4 millionmeaningful increase in operating expense, andseasonal labor rate in order to recruit employees in a $0.6 millionchallenging labor market, as well as higher full-time wages attributable to an increase in cost of goods sold. Cost of goods sold, as a percentage of food, merchandise, and games net revenue, was comparable for both periods. Operating expenses grew by $3.4 million primarily due to increased seasonal wages which were driven by hourly rate increases, and to a lesser extent, increased operating supply expense attributable to additional seasonal events and the timing of maintenance projects.headcount. The $6.6 million increasedecrease in SG&A expense was primarily attributabledue to less advertising expense due to fewer operating days and a reserve established formore efficient marketing program offset by an employment practice claim, higher merchant fees, and increased technology related costs. The increase in operating costsfull-time wages, particularly for accrued bonus plans and expenses is netequity-based compensation plans.
Depreciation and amortization expense for the quarter increased $5.4 million to $70.1nine months ended September 26, 2021 decreased $24.9 million compared with the nine months ended September 29, 2019 due primarily to $64.7 million for the same period infull depreciation of 15-year useful lived property and equipment from our 2006 acquisition and the prior year. The increase is attributable to a change in the estimated useful liveslife of a long-lived asset at Cedar Point and a series of other long-lived assets across the portfolio. For the third quarter of 2017, theKings Dominion in 2019. The loss on impairment / retirement of fixed assets was $1.3 million, reflectingfor the nine months ended September 26, 2021 and September 29, 2019 included retirements of assets in the normal course of business at several of our properties. A $1.9 million gain on sale of investment was recognized during the quarter for the liquidation of a preferred equity investment.business.
After the items above, operating income for the third quarter of 2017 decreased $11.7 million to $256.1nine months ended September 26, 2021 totaled $119.3 million compared with an operating income of $267.8$292.6 million for the third quarter of 2016.nine months ended September 29, 2019.
Interest expense for the third quarternine months ended September 26, 2021 increased $64.6 million compared with the nine months ended September 29, 2019 primarily due to interest incurred on the 2025 senior notes and 2028 senior notes, both of 2017 was comparable to the same periodwhich were issued in the prior year.2020. The net effect of our swaps resulted in a benefit to earnings of $1.0$10.6 million for the third quarter of 2017nine months ended September 26, 2021 compared with a $1.7$21.1 million charge to earnings infor the third quarter of 2016.nine months ended September 29, 2019. The difference reflectswas attributable to the change in fair market value movements in our de-designated swap portfolio offset by the amortization of amounts in OCI for these swaps.portfolio. During the current quarter,period, we also recognized a $29.2$1.7 million net benefit to earnings for foreign currency gains and losses compared with a $7.3$12.5 million net chargebenefit to earnings for the third quarter in 2016.nine months ended September 29, 2019. Both amounts primarily representrepresented remeasurement of the U.S.-dollar denominated debt heldrecorded at our Canadian propertyentity from the applicable currencyU.S.-dollar to the legal entity's functional currency.
During the third quarter of 2017,nine months ended September 26, 2021, a provision for taxes of $73.7$16.9 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 recordedof $43.5 million for the nine months ended September 29, 2019. The decrease in provision for taxes was attributable to a decrease in pretax income from our taxable subsidiaries during the current nine-month period.
After the items above, net loss for the nine months ended September 26, 2021 totaled $21.3 million, or $0.38 per diluted limited partner unit, compared with net income of $169.6 million, or $2.98 per diluted limited partner unit, for the nine months ended September 29, 2019.
For the nine months ended September 26, 2021, Adjusted EBITDA totaled $251.5 million compared with $450.1 million for the nine months ended September 29, 2019. Similarly, our Adjusted EBITDA margin for the nine months ended September 26, 2021 decreased compared with the Adjusted EBITDA margin for the nine months ended September 29, 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, as well as increased labor costs in the current period 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 are being used by management for operational decisions. We believe these supplemental key operational measures provide a more meaningful measure of current demand and guest spending trends due to the material variances in operating days between years.
For attendance and in-park per capita spending, the comparable same-day statistics compare the results from 1,255 operating days for the nine months ended September 26, 2021 with the comparable 1,255 operating days for the nine months ended September 29, 2019. The 1,255 operating days for the nine months ended September 26, 2021 included the 1,381 total operating days for the period less 70 operating days from the Schlitterbahn parks which were acquired on July 1, 2019 and less 56 2021 operating days which did not have equivalent 2019 operating days. As a result, on a comparable same-day basis, we excluded $34.4 million of in-park revenues and 0.6 million visits for the nine months ended September 26, 2021 to exclude the results of 2021 operating days without equivalent 2019 operating days. We also excluded $277.5 million of in-park revenues and 6.1 million visits for the nine months ended September 29, 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 nine months ended September 26, 2021 represented approximately 80% of attendance for the first nine months of 2019 on a comparable same-day basis driven by general admission and season pass attendance and offset by an expected slower recovery in group sales attendance. In-park per capita spending for the nine months ended September 26, 2021 represented approximately 120% of in-park per capita spending for the first nine months of 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 and extra-charge attractions, including front-of-line FastLane products. Attendance and in-park per capita spending as a percentage of 2019 results on a comparable same-day basis increased each month from the initial opening of our parks in May 2021 through the end of the third quarter of 2021. Due to the nature of out-of-park revenues, we are not able to produce comparable same-day statistics.
Three months ended September 26, 2021 vs. Three months ended September 27, 2020
Due to the effects of the COVID-19 pandemic, the results for the three months ended September 26, 2021 were not directly comparable with the results for the three months ended September 27, 2020. The current three-month period included 988 operating days compared with a total of 314 operating days for the three months ended September 27, 2020.
In the current period, all of our properties were open during the third quarter of 2021, and 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 the third quarter of 2021. We adjusted our third quarter 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.
For the three months ended September 27, 2020 and due to the effects of the COVID-19 pandemic, eight of our 13 properties resumed partial operations on a staggered basis during the third 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 at this time, such as hotel operations. 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 following table presents key financial information for the three months ended September 26, 2021 and September 27, 2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Increase (Decrease) |
| | September 26, 2021 | | September 27, 2020 | | $ | | % |
| | (Amounts in thousands, except per capita and operating days) |
Net revenues | | $ | 753,404 | | | $ | 87,457 | | | $ | 665,947 | | | N/M |
Operating costs and expenses | | 423,791 | | | 140,601 | | | 283,190 | | | N/M |
Depreciation and amortization | | 77,461 | | | 67,436 | | | 10,025 | | | 14.9 | % |
Loss on impairment / retirement of fixed assets, net | | 2,397 | | | 727 | | | 1,670 | | | N/M |
Loss on impairment of goodwill and other intangibles | | — | | | 15,818 | | | (15,818) | | | N/M |
Gain on sale of investment | | — | | | (11) | | | 11 | | | N/M |
Operating income (loss) | | $ | 249,755 | | | $ | (137,114) | | | $ | 386,869 | | | N/M |
| | | | | | | | |
Other Data: | | | | | | | | |
Adjusted EBITDA (1) | | $ | 333,368 | | | $ | (51,488) | | | $ | 384,856 | | | N/M |
| | | | | | | | |
Attendance | | 10,769 | | | 1,306 | | | 9,463 | | | N/M |
In-park per capita spending | | $ | 64.26 | | | $ | 47.29 | | | $ | 16.97 | | | 35.9 | % |
Out-of-park revenues | | $ | 83,074 | | | $ | 29,051 | | | $ | 54,023 | | | 186.0 | % |
Operating days | | 988 | | | 314 | | | 674 | | | N/M |
N/M Not meaningful either due to minimal operations in the prior period or due to the nature of the expense line-item
(1) For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation to net income (loss), see page 18.
For the three months ended September 26, 2021, net revenues totaled $753.4 million compared with $87.5 million for the three months ended September 27, 2020. The increase in net revenues was attributable to the 674 operating day increase in the current period resulting in a 9.5 million-visit increase in attendance and a $54.0 million increase in out-of-park revenues. In-park per capita spending increased 36% to $64.26 for the three months ended September 26, 2021, which represented higher levels of guest spending, particularly admissions and extra-charge attractions, including front-of-line FastLane products, and was driven by increases in pricing and volume. The increase in net revenues included a $2.9 million favorable impact of foreign currency exchange rates at our Canadian park.
Operating costs and expenses for the three months ended September 26, 2021 increased to $423.8 million from $140.6 million for the three months ended September 27, 2020. This was the result of a $47.9 million increase in cost of goods sold, a $172.6 million increase in operating expenses and a $62.7 million increase in SG&A expense, all of which were largely the result of a 674 operating day increase in the current period. While the majority of the $172.6 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 attributable to accrued bonus plans and increased headcount. Similarly, the $62.7 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. The increase in operating costs and expenses included a $1.5 million unfavorable impact of foreign currency exchange rates at our Canadian park.
Depreciation and amortization expense for the three months ended September 26, 2021 increased $10.0 million compared with the three months ended September 27, 2020 due to a higher percentage of total planned operating days in the third quarter of 20162021 compared with the percentage of $62.9 million. This increasetotal planned operating days in the third quarter of 2020. We recognize depreciation and amortization expense over planned operating days. The loss on impairment / retirement of fixed assets for the three months ended September 26, 2021 was comparable with the results from the three months ended September 27, 2020 and was due to retirements of assets in the normal course of business. The loss on impairment of goodwill and other intangibles for the three months ended September 27, 2020 included impairment charges of $11.3 million, $2.3 million and $2.2 million during the third quarter of 2020 attributable to impairment of goodwill at the Schlitterbahn parks, goodwill at Dorney Park, and the Schlitterbahn trade name, respectively (see Note 5).
After the items above, operating income for the three months ended September 26, 2021 totaled $249.8 million compared with an operating loss of $137.1 million for the three months ended September 27, 2020.
Interest expense for the three months ended September 26, 2021 increased $5.9 million due to interest incurred on the 2028 senior notes issued in October 2020. The net effect of our swaps resulted in a benefit to earnings of $3.2 million for the three months ended September 26, 2021 compared with a $1.6 million benefit to earnings for the three months ended September 27, 2020. The difference was attributable to the change in fair market value movements in our swap portfolio. We recognized a $0.3 million loss on early debt extinguishment related to our April 2020 refinancing during the three months ended September 27, 2020. During the third quarter of 2021, we also recognized a $15.2 million net charge to earnings for foreign currency gains and losses compared with a $9.6 million net benefit to earnings for the three months ended September 27, 2020. Both amounts primarily represented 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.
During the three months ended September 26, 2021, a provision for taxes of $43.8 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes compared with a benefit for taxes of $30.4 million for the three months ended September 27, 2020. The difference in provision for taxes relates largelywas attributable to an increase in pretax income in the current period compared with a prior period pretax loss 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 expect to carry back the tax year 2020 losses incurred by our corporate subsidiaries, compared withwhich will result in the samerefund of a portion of federal income taxes paid during the carryback period of approximately $79.7 million. Second, as of September 26, 2021, the annual effective tax rate included a net benefit of $2.3 million from carrying back the projected tax year ago.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 $7.2 million 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 income for the current quarterthree months ended September 26, 2021 totaled $191.3$148.0 million, or $3.38$2.60 per diluted limited partner unit, compared with a net incomeloss of $175.0$136.3 million, or $3.10$2.41 per diluted limited partner unit, for the third quarter a year ago.three months ended September 27, 2020.
For the current quarter, ourthree months ended September 26, 2021, Adjusted EBITDA decreased to $333.6totaled $333.4 million from $336.0compared with Adjusted EBITDA loss of $51.5 million for the fiscalthree months ended September 27, 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.
Three months ended September 26, 2021 vs. Three months ended September 29, 2019
As described above, the results for the three months ended September 26, 2021 were not directly comparable with the results for the three months ended September 27, 2020 due to the effects of the COVID-19 pandemic. Therefore, we also included a comparison to the three months ended September 29, 2019. The current three-month period included 988 operating days compared with a total of 1,035 operating days for the three months ended September 29, 2019. In the current period, all of our properties were open during the third quarter of 2016.2021, and 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 the third quarter of 2021. We adjusted our third quarter 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. The approximate $2.4 million decreasefollowing table presents key financial information for the three months ended September 26, 2021 and September 29, 2019:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | Increase (Decrease) |
| | September 26, 2021 | | September 29, 2019 | | $ | | % |
| | (Amounts in thousands, except per capita and operating days) |
Net revenues | | $ | 753,404 | | | $ | 714,512 | | | $ | 38,892 | | | 5.4 | % |
Operating costs and expenses | | 423,791 | | | 369,180 | | | 54,611 | | | 14.8 | % |
Depreciation and amortization | | 77,461 | | | 68,335 | | | 9,126 | | | 13.4 | % |
Loss on impairment / retirement of fixed assets, net | | 2,397 | | | 1,675 | | | 722 | | | N/M |
| | | | | | | | |
| | | | | | | | |
Operating income | | $ | 249,755 | | | $ | 275,322 | | | $ | (25,567) | | | (9.3) | % |
| | | | | | | | |
Other Data: | | | | | | | | |
Adjusted EBITDA (1) | | $ | 333,368 | | | $ | 355,188 | | | $ | (21,820) | | | (6.1) | % |
Adjusted EBITDA margin (2) | | 44.2 | % | | 49.7 | % | | | | (5.5) | % |
Attendance | | 10,769 | | | 13,189 | | | (2,420) | | | (18.3) | % |
In-park per capita spending | | $ | 64.26 | | | $ | 49.94 | | | $ | 14.32 | | | 28.7 | % |
Out-of-park revenues | | $ | 83,074 | | | $ | 76,347 | | | $ | 6,727 | | | 8.8 | % |
Operating days | | 988 | | | 1,035 | | | (47) | | | (4.5) | % |
N/M Not meaningful due to minimal operations in the prior period
(1) For additional information regarding Adjusted EBITDA, is attributable to decreased attendanceincluding how we define and lower out-of-park revenue,use Adjusted EBITDA, as well as increaseda reconciliation to net income (loss), see page 18.
(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 measure of operating costs and expenses associated with labor, merchant fees, maintenance expense and other planned spending.profitability.
On a same-park basis (excluding Wildwater Kingdom),For the three months ended September 26, 2021, net revenues increased by $6.5totaled $753.4 million, to $652.7increasing $38.9 million forcompared with the quarterthree months ended September 24, 2017 from $646.2 million in the same period in the prior year reflecting a 103,000-visit29, 2019. The increase in attendance andnet revenues reflected the impact of a $0.39$14.32, or 29%, increase in in-park per capita spending onoffset by the impact of a same-park basis. 2.4 million-visit, or 18%, decline in attendance. The increase in in-park per capita spending was driven by higher guest spending across all key revenue categories, particularly admissions spending, and was driven by increases in pricing and fewer visits per season pass. The decrease in attendance was largely due to an expected slower recovery in group sales attendance, as well as operating restrictions during the current quarter. Attendance and in-park per capita spending as a percentage of 2019 results increased each month of the third quarter of 2021. Out-of-park revenues increased $6.7 million compared with the three months ended September 29, 2019. The increase in out-of-park revenues was largely attributable to online transaction fee revenue. Out-of-park revenues were hindered by the temporary closure of two hotel properties for renovations.
Operating costs and expenses (including depreciation and amortization, loss on impairment of fixed assets and gain on sale of investment) on a same-park basisfor the three months ended September 26, 2021 increased $17.3to $423.8 million resulting in a $10.8from $369.2 million decrease in same-park operating income.
October 2017
Based on preliminary results, net revenues through Octoberfor the three months ended September 29, 2017 were approximately $1.24 billion, up 1%, or $6 million, compared with the same period last year. The increase in net revenues2019. This was the result of a 1%$1.0 million increase in cost of goods sold, a $45.8 million increase in operating expenses and a $7.8 million increase in SG&A expense. Cost of goods sold as a percentage of food, merchandise and games revenue for the three months ended September 26, 2021 was consistent with the results for the three months ended September 29, 2019. Of the $45.8 million increase in operating expenses, approximately half was attributable to an increase in seasonal labor wages. The increase in seasonal labor wages was entirely due to a meaningful increase in the seasonal labor rate to recruit employees in a challenging labor market. Seasonal labor hours declined compared with the comparable period in 2019 due to abbreviated operating calendars in 2021. The remaining increase in operating expenses was attributable to higher full-time wages attributable to additional head count and higher costs for operating and maintenance supplies. The $7.8 million increase in SG&A expense was largely attributable to an increase in full-time wages, particularly for accrued bonus plans, and operating supplies offset by less advertising expense due to a more efficient marketing program.
Depreciation and amortization expense for the three months ended September 26, 2021 increased $9.1 million compared with the three months ended September 29, 2019 due to a higher percentage of total planned operating days in the third quarter of 2021 compared with the percentage of total planned operating days in the third quarter of 2019. We recognize depreciation and amortization expense over planned operating days. The loss on impairment / retirement of fixed assets for the three months ended September 26, 2021 was comparable with the results from the three months ended September 29, 2019 and was due to retirements of assets in the normal course of business.
After the items above, operating income for the three months ended September 26, 2021 totaled $249.8 million compared with $275.3 million for the three months ended September 29, 2019.
Interest expense for the three months ended September 26, 2021 increased $18.3 million compared with the three months ended September 29, 2019 primarily due to interest incurred on the 2025 senior notes and 2028 senior notes, both of which were issued in 2020. The net effect of our swaps resulted in a benefit to earnings of $3.2 million for the three months ended September 26, 2021 compared with a $3.9 million charge to earnings for the three months ended September 29, 2019. The difference was attributable to the change in fair market value movements in our swap portfolio. During the third quarter of 2021, we also recognized a $15.2 million net charge to earnings for foreign currency gains and losses compared with a $5.6 million net charge to earnings for the three months ended September 29, 2019. Both amounts primarily represented 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.
During the three months ended September 26, 2021, a provision for taxes of $43.8 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes compared with a provision for taxes of $48.8 million for the three months ended September 29, 2019. The decrease in provision for taxes was attributable to a decrease in pretax income from our taxable subsidiaries during the current quarter.
After the items above, net income for the three months ended September 26, 2021 totaled $148.0 million, or $2.60 per diluted limited partner unit, compared with net income of $190.0 million, or $3.34 per diluted limited partner unit, for the three months ended September 29, 2019.
For the three months ended September 26, 2021, Adjusted EBITDA totaled $333.4 million compared with $355.2 million for the three months ended September 29, 2019. The decrease in Adjusted EBITDA was largely due to increased labor costs in the current period due to labor rate pressures, as well as the impact of operating restrictions during the third quarter of 2021. Similarly, our Adjusted EBITDA margin for the three months ended September 26, 2021 decreased compared with the Adjusted EBITDA margin for the three months ended September 29, 2019 due to increased costs in the current period, particularly due to increases in seasonal labor rates.
October Update
Preliminary net revenues for the ten months ended October 31, 2021 totaled approximately $1.2 billion. Attendance totaled 17.3 million visits, in-park per capita spending was $62.73, and out-of-park revenues totaled $153 million. Given the effects of the COVID-19 pandemic and suspension of park operations in 2020, we compared the results for the five weeks ended October 31, 2021 with the results for the five weeks ended November 3, 2019. For the five weeks ended October 31, 2021, preliminary net revenues totaled approximately $219 million, representing an increase of 42%, or $0.57,$65 million, compared to the five weeks ended November 3, 2019. The increase was driven by an 8% increase in attendance to 3.2 million visits; a 32% increase in in-park guest per capita spending to $47.40 offset by a 45,000-visit, decrease in attendance to 24.1 million visits. During this same period, out-of-park revenues decreased 2%, or $3 million, to $133 million compared with 2016.
On a same-park basis (excluding Wildwater Kingdom), net revenues were up approximately 1%, or $12 million, compared with the same period last year. The increase in net revenues on a same-park basis was the result of a 1%, or 192,000-visit, increase in attendance$64.86; and a 1%, or $0.33,33% increase in in-park guest per capita spending. The fluctuation in out-of-park revenues was comparable on a same-park basis.to $19 million.
Liquidity and Capital Resources:
With respectOur principal sources of liquidity typically include cash from operating activities, funding from our long-term debt obligations and existing cash on hand. Due to boththe 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 flow,on hand from the recently issued senior notes. We generated positive cash flows from operations during the second and third quarters of 2021. As of September 26, 2021, we endedhad cash on hand of $562.7 million and $359.2 million of available borrowings under our revolving credit facility. Based on this level of liquidity, we have concluded that we will have sufficient liquidity to satisfy our obligations and remain in compliance with our debt covenants at least through the thirdfourth quarter of 2022.
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 the business, as well as reducing the Company's leverage. In 2021, we commenced a business optimization program as part of our long-range strategic plan. Efforts include capturing cost efficiencies and driving incremental revenues through data-driven decision making, as well as enhancements to the guest experience to meet changing consumer behaviors and preferences. The program focuses on reductions in fixed costs that are independent of attendance levels, as well as incremental revenue opportunities and variable cost savings. Also, in the long term, management anticipates returning to historical annual capital expenditure investments of 9-10% of revenues under normal operating conditions. Management is also committed to reinstituting quarterly partnership distributions when it is appropriate to do so and it is permissible under the Third Amended 2017 Credit Agreement and our other debt covenants.
For the 2021 operating season, capital investments will again be less than pre-COVID historical levels, as many new rides and attractions originally planned for the 2020 operating season were introduced to our guests in sound condition. The working2021. For 2021, we expect to invest between $50 million and $75 million in capital ratio (current assets divided by current liabilities)expenditures, roughly equally split between the completion of 1.2 at September 24, 2017 isselect unfinished projects from 2020, including the resultrenovation of normal seasonal activity. Receivables, inventoriessome of our resort properties, essential compliance and payablesinfrastructure requirements, and the start of projects planned for the 2022 operating season. For 2022, we expect to invest between $175 million and $200 million in capital expenditures. Due to the issuance of $1.3 billion of senior notes in 2020, we anticipate $175 million in annual cash interest in 2021 of which 80% of the payments occur in the second and fourth quarter. We are at normal seasonal levels.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 in the fourth quarter of 2021. Also, in 2021, we anticipate cash payments for income taxes to range from $8 million to $13 million, exclusive of these tax refunds. We anticipate funding our remaining 2021 liquidity needs from cash on hand and cash from operating activities.
Operating Activities
DuringNet cash from operating activities for the nine-monthfirst nine months of 2021 totaled $230.1 million, an increase of $505.6 million compared with net cash for operating activities for the same period ended September 24, 2017,in the prior year. The increase in net cash from operating activities was $322.6 million, a decreaselargely attributable to the opening of $18.1 million from the same period a year ago, primarily due to lower earnings.all of our properties in 2021.
Investing Activities
Net cash used for investing activities for the first nine months of 2017 was $149.22021 totaled $38.1 million, an increasea decrease of $22.3$80.6 million compared with the same period in the prior year. This increase reflectsThe decrease in net cash for investing activities was due to a planned higherreduction in capital expenditures in the period.spending for 2021.
Financing Activities
Net cash for financing activities for the first nine months of 2017 was $52.12021 totaled $6.1 million, a decrease of $95.7$445.9 million compared with net cash from financing activities for the same period in the prior year. ThisThe decrease reflects incrementalwas attributable to net cash proceeds from the April 2020 refinancing in the prior period, including the issuance of the 2025 senior notes and prepayment of a portion of our term debt, borrowings due to the increase in our senior secured
term loan facility under the 2017 Credit Agreement,somewhat offset by other impacts of the April 2017 refinancing including payment of debt issuance costs and early termination penalties.first quarter 2020 partnership distribution.
Contractual Obligations
As of September 24, 2017,26, 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 our Third Amended 2017 Credit Agreement. The term debt bears 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 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 September 26, 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 the 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.
•$450 million of 5.375% senior unsecured notes, maturing in June 2024, issued at par. The 2024 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. The 2024 senior notes pay interest semi-annually in June and December.
•$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 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 225 basis points (bps). The term loan amortizes $7.5 million annually. We paid $15.0 million of amortization during the third quarter of 2017. Therefore, we have no current maturities as of September 24, 2017.
semi-annually in January and July.
•No borrowings under the $275$375 million senior secured revolving credit facility under our Third Amended 2017 Credit Agreement with a Canadian sub-limit of $15 million. Borrowings under$300 million of the senior secured revolving credit facility bearbears interest at LIBOR plus 350 bps or Canadian Dollar Offered Rate ("CDOR") plus 200 bps.250 bps and requires the payment of a 62.5 bps commitment fee per annum on the unused portion of the credit facilities. The remaining $75 million of the revolving credit facility is scheduled to mature in April 2022bears interest at LIBOR plus 300 bps or CDOR plus 200 bps and also provides for the issuance of documentary and standby letters of credit. The 2017 Credit Agreement requires the payment of a 37.5 bps commitment fee per annum on the unused portion of the credit facilities. $300 million of the revolving credit facility is scheduled to mature in December 2023 and $75 million of the revolving credit facility is scheduled to mature in April 2022. The Third Amended 2017 Credit Agreement provides for the issuance of documentary and standby letters of credit. After letters of credit, which totaled $15.9$15.8 million atas of September 24, 2017,26, 2021, we had $259.1$359.2 million of available borrowings under the revolving credit facility and cash on handfacility. Our letters of $249.9 million.credit are primarily in place to backstop insurance arrangements.
As of September 24, 2017,26, 2021, we have four interest rate swap agreements that effectively convertwith a notional value of $500 million of variable-rate debtthat convert one-month variable rate LIBOR to a fixed rate. These swaps, which mature onrate of 2.88% through December 31, 2020 and fix LIBOR at2023. This results in a weighted average4.63% fixed interest rate for borrowings under our senior secured term loan facility after the impact of 2.64%,interest rate swap agreements. None of our interest rate swap agreements were not designated as cash flow hedges.hedges in the periods presented. As of September 24, 2017,26, 2021, the fair market value of our derivative liabilityswap portfolio was $14.8 millionclassified as long-term and was recorded in "Derivative Liability."Liability" within the unaudited condensed consolidated balance sheet.
The Third Amended 2017 Credit Agreement includesincludes: (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 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 the Third Amended 2017 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 reason and not cured could result in an event of default. The ratio is set at a maximum of 5.50x consolidated total debt-to-consolidated EBITDA. As of September 24, 2017, wefiscal quarter. We were in compliance with thisthe applicable financial condition covenant and all other covenants under the Third Amended 2017 Credit Agreement.Agreement during the nine months ended September 26, 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 our June 2014the 2024 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 5.00x, we can still make Restricted Payments of $60 million annually so long as no default or event of default has occurred and is continuing; and our ability to make additional Restricted Payments is permitted shouldcontinuing. If our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio beis less than or equal to 5.00x.5.00x, we can make Restricted Payments up to our Restricted Payment pool. Our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio was greater than 5.00x as of September 26, 2021.
Financial and Non-Financial Disclosure About Issuers and Guarantors of our Registered Senior Notes
As discussed within the Long-Term Debt footnote at Note 6, we have issued five tranches of fixed rate senior notes: the 2024, 2025, 2027, 2028 and 2029 senior notes (“senior notes”). The 2024, 2027, 2028 and 2029 senior notes (the “registered senior notes”) have been registered under the Securities Act of 1933. The 2025 senior notes were sold in a private placement in reliance on exemptions from registration under the Securities Act of 1933. Cedar Fair, L.P., Canada's Wonderland Company ("Cedar Canada"), and Magnum Management Corporation ("Magnum") are the co-issuers of the 2024 senior notes. Cedar Fair, L.P., Cedar Canada, Magnum, and Millennium Operations LLC (“Millennium”) are the co-issuers of the 2027, 2028 and 2029 senior notes. Our senior notes have been irrevocably and unconditionally guaranteed, on a joint and several basis, by each wholly owned subsidiary of Cedar Fair (other than the co-issuers) that guarantees our credit facilities under the Third Amended 2017 Credit Agreement. A full listing of the issuers and guarantors of our registered senior notes can be found within Exhibit 22, and additional information with respect to our registered senior notes and the related guarantees follows.
The 2024, 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 2024, 2027, 2028 and 2029 senior notes are ranked effectively junior to our secured debt under the Third Amended 2017 Credit Agreement debt provisions, on August 2, 2017, we announcedand the declaration2025 senior notes to the extent of a distributionthe value of $0.855 per limited partner unit, which was paid on September 15, 2017. Also, on November 2, 2017, we announced the declaration of a distribution of $0.89 per limited partner unit, which will be payable on December 15, 2017.assets securing such debt.
ExistingIn the event that the co-issuers (except for Cedar Fair, L.P.) or any subsidiary guarantor is released from its obligations under our senior secured credit facilities (or the Third Amended 2017 Credit Agreement), 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 2024, 2027, 2028 and cash flows from operations2029 senior notes under the following circumstances, assuming the associated transactions are expectedin compliance with the applicable provisions of the indentures governing the 2024, 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 expendituresdepending on the 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 tables provide summarized financial information for each of our co-issuers and guarantors of the foreseeable future.
Off Balance Sheet Arrangements:
We had $15.9 million in letters of credit, which are primarily in place to backstop insurance arrangements, outstanding on our revolving credit facility as of September 24, 20172024, 2027, 2028 and 2029 senior notes (the "Obligor Group"). We have nopresented each entity that is 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 guarantee the 2024 senior notes include the guarantor subsidiary group, as well as Millennium. Millennium is a co-issuer under the 2027, 2028 and 2029 senior notes and a guarantor under the 2024 senior notes. Certain subsidiaries of Cedar Fair do not guarantee our credit facilities or senior notes as the assets and results of operations of these subsidiaries are 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 $13.7 million and $11.5 million as of September 26, 2021 and December 31, 2020, respectively.
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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 September 26, 2021 | | | | | | | | | | | | |
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Current Assets | | $ | 823 | | | $ | 41,556 | | | $ | 76,197 | | | $ | 615,795 | | | $ | 1,143,187 | | | | | |
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Non-Current Assets | | (95,475) | | | 1,155,669 | | | 540,321 | | | 2,350,755 | | | 1,744,008 | | | | | |
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Current Liabilities | | 438,525 | | | 758,625 | | | 41,623 | | | 246,134 | | | 46,766 | | | | | |
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Non-Current Liabilities | | 146,792 | | | 33,765 | | | 463,777 | | | 2,389,869 | | | 94,183 | | | | | |
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Balance as of December 31, 2020 | | | | | | | | | | | | |
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Current Assets | | $ | 421 | | | $ | 33,985 | | | $ | 44,465 | | | $ | 464,779 | | | $ | 1,044,779 | | | | | |
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Non-Current Assets | | (30,651) | | | 995,507 | | | 528,281 | | | 2,311,502 | | | 1,820,745 | | | | | |
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Current Liabilities | | 488,799 | | | 573,244 | | | 18,235 | | | 200,107 | | | 40,412 | | | | | |
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Non-Current Liabilities | | 146,106 | | | 44,778 | | | 461,903 | | | 2,370,939 | | | 91,835 | | | | | |
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Nine Months Ended September 26, 2021 | | | | | | | | | | | | |
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Net revenues | | $ | 26,951 | | | $ | 275,190 | | | $ | 53,283 | | | $ | 1,079,994 | | | $ | 258,106 | | | | | |
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Operating income (loss) | | 24,061 | | | (114,564) | | | 11,694 | | | 100,751 | | | 98,186 | | | | | |
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Net (loss) income | | (19,925) | | | (11,333) | | | 15,391 | | | — | | | 66,607 | | | | | |
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Twelve Months Ended December 31, 2020 | | | | | | | | | | | | |
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Net revenues | | $ | — | | | $ | 102 | | | $ | 440 | | | $ | 510,077 | | | $ | 150,439 | | | | | |
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Operating (loss) income | | (198,769) | | | (322,420) | | | (37,655) | | | 109,688 | | | (121,437) | | | | | |
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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 significant off-balance sheet financing arrangements.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 as of September 26, 2021 and $12.7 million as of December 31, 2020; Non-Current Assets - $2,239.4 million as of September 26, 2021 and $2,201.8 million as of December 31, 2020; and Net revenues - $96.7 million as of September 26, 2021 and $130.3 million as of December 31, 2020. Combined amounts for all guarantors of the 2024 senior notes for all other line items within the table would be computed by adding the amounts in the Millennium and Guarantor Subsidiaries columns.
Forward Looking Statements
Some of the statements contained in this report (including the “Management’s"Management’s Discussion and Analysis of Financial Condition and Results of Operations”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, goals 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, or that our business optimization and growth strategies will achieve the targeted results. Important factors, including those listed under Item 1Athe impacts of the COVID-19 pandemic, general economic conditions, adverse weather conditions, competition for consumer leisure time and spending, unanticipated construction delays, changes in our capital investment plans and projects and other factors we discuss from time to time in our reports filed with the Company’s Annual Report on Form 10-K,Securities and Exchange Commission (the "SEC") could adversely affect attendance at our future financial performanceparks, as well as our business optimization program, and could cause actual results to differ materially from our expectations.expectations or otherwise to fluctuate or decrease. Additional information on risk factors that may affect our business and financial results can be found in our Annual Report on Form 10-K and in the filings we make from time to time with the SEC, including this Form 10-Q. 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 3. 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.
For derivative instruments thatNone of our interest rate swap agreements are designated and qualify as cash flow hedges, the effective portion of the change in fair value of the derivative instrument is reported as a component of “Other comprehensive income (loss)” and reclassified into earnings in the period during which the hedged transaction affects earnings.hedging instruments. Changes in fair value of derivative instruments that do not qualify as effective hedging activitiesfor hedge accounting are reported as “Net"Net effect of swaps”swaps" in the unaudited condensed consolidated statements of operations. Additionally, the “Otheroperations and comprehensive income (loss)” related to interest rate swaps that become ineffective is amortized over the remaining life of the interest rate swap and reported as a component of “Net effect of swaps” in the unaudited condensed consolidated statements of operations..
As of September 24, 2017,26, 2021, on an adjusted basis after giving affecteffect to the impact of interest rate swap agreements, $1,450.0 millionall of our outstanding long-term debt represented fixed-rate debt and $235.0 million represented variable-rate debt. Assuming an average balance on ourexcept for revolving credit borrowings. Assuming no revolving credit borrowings, of approximately $7.2 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 $7.4$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 twelve months.
A uniform 10% strengthening of the U.S. dollar relative to the Canadian dollar would result in a $3.3$0.4 million decrease in annual operating income.income for the trailing twelve months ended September 26, 2021.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures -
We maintain a system of controls and procedures designed to ensure that information required to be disclosed by us in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of September 24, 2017,26, 2021, management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 24, 2017.26, 2021.
(b)Changes in Internal Control Over Financial Reporting -
There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended September 24, 201726, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Freddie Ramos vs. Cedar Fair, L.P., Cedar Fair Management Company
The Partnership and Cedar Fair Management, Inc. are defendants in a lawsuit filed in Superior Court of the State of California for Orange County on November 23, 2016 by Freddie Ramos seeking damages and injunctive relief for claims related to certain employment and pay practices at our parks in California, including those related to certain check-out, time reporting, discharge, meal and rest period, and pay statement practices. The Partnership filed an answer on January 13, 2017 denying the allegations in the complaint and requesting a dismissal of all claims. On January 17, 2017, the Partnership filed a Notice of Removal of the case from the state court to the United State District Court for the Central District of California. The class has not been certified. On August 29, 2017, the Partnership participated in a mediation relating to the claims alleged in the lawsuit. Following this mediation, the Partnership negotiated a $4.2 million settlement with the named Plaintiff on a class wide basis. As part of the settlement the case will be remanded back to the Superior Court of the State of California for Orange County for a preliminary hearing and final court approval of the proposed settlement. The Partnership and the named Plaintiff are required to file a brief in support of the settlement with the court. The hearing to approve the final settlement is not expected to occur until at least the first quarter of 2018. Based upon the information available, the Partnership believes the liability recorded as of September 24, 2017 is adequate and does not expect the terms of the negotiated settlement or final briefing to materially affect its financial results in future periods.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors previously disclosed in the Partnership'sour Annual Report on Form 10-K for the year ended December 31, 2016.2020.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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 September 24, 2017:
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Period | | (a)
Total Number of Units Purchased (1) | | (b)
Average Price Paid per Unit | | (c)
Total Number of Units Purchased as Part of Publicly Announced Plans or Programs | | (d)
Maximum Number (or Approximate Dollar Value) of Units that May Yet Be Purchased Under the Plans or Programs |
June 26 - July 30 | | 1,928 |
| | $ | 70.80 |
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July 31 - August 27 | | — |
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August 28 - September 24 | | — |
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Total | | 1,928 |
| | $ | 70.80 |
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| | $ | — |
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(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. EXHIBITS
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Exhibit (101) | | The following materials from the Partnership's Quarterly Report on Form 10-Q for the quarter ended September 24, 201726, 2021 formatted in Extensible Business Reporting Language (XBRL):Inline XBRL: (i) the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), (ii) the Unaudited Condensed Consolidated Balance Sheets, (iii) the Unaudited Condensed Consolidated Statements of Cash Flow, (iv) the Unaudited Condensed Consolidated StatementStatements of Equity,Partners' Deficit, and (v) related notes.notes, tagged as blocks of text and including detailed tags. |
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Exhibit (104) | | The cover page from the Partnership's Quarterly Report on Form 10-Q for the quarter ended September 26, 2021 formatted in Inline XBRL (included as Exhibit 101). |
SIGNATURES
Pursuant to the requirements 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.
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| | CEDAR FAIR, L.P. | |
| | (Registrant) | |
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| | CEDAR FAIR, L.P. | |
| | (Registrant) | |
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| | By Cedar Fair Management, Inc. |
| | General Partner | |
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Date: | November 2, 20173, 2021 | /s/ MatthewRichard A. OuimetZimmerman |
| | MatthewRichard A. OuimetZimmerman |
| | President and Chief Executive Officer |
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Date: | November 2, 20173, 2021 | /s/ Brian C. Witherow |
| | Brian C. Witherow |
| | Executive Vice President and |
| | Chief Financial Officer |