Company overview
We generate our revenues from sales of (1) admission to our amusement parks and water parks, (2) food, merchandise and games both inside and outside our parks, and (3) accommodations, extra-charge products, and other revenue sources. Our principal costs and expenses, which include salaries and wages, operating supplies, maintenance, advertising, utilities and 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 General Manager and operates independently. Management reviews operating results, evaluates performance and makes operating decisions, including resource allocation, 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, Senior Vice
Presidents and the general managers.
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The following table presents certain financial data expressed as a percent of
total net revenues and selective statistical information for the periods
indicated.
Years Ended December 31,
2021 2020 2019
(In
thousands, except per capita expenditures and percentages) Net revenue: Admissions
$ 674,799 50.4 %$ 67,852 37.4 %$ 795,271 53.9 % Food, merchandise and games 432,513 32.3 % 76,921 42.4 % 473,499 32.1 % Accommodations, extra-charge products and other 230,907 17.3 % 36,782 20.3 % 206,155 14.0 % Net revenues 1,338,219 100.0 % 181,555 100.0 % 1,474,925 100.0 % Operating costs and expenses 1,030,466 77.0 % 483,891 266.5 % 990,716 67.2 % Depreciation and amortization 148,803 11.1 % 157,549 86.8 % 170,456 11.6 % Loss on impairment / retirement of fixed assets, net 10,486 0.8 % 8,135 4.5 % 4,931 0.3 % Loss on impairment of goodwill and other intangibles - - % 103,999 57.3 % - - % Loss (gain) on other assets 129 - % (11) - % (617) - % Operating income (loss) 148,335 11.1 % (572,008) (315.1) % 309,439 21.0 % Interest and other expense, net 183,732 13.7 % 150,222 82.7 % 98,860 6.7 % Net effect of swaps (19,000) (1.4) % 15,849 8.7 % 16,532 1.1 % Loss on early debt extinguishment 5,909 0.4 % 2,262 1.2 % - - % Loss (gain) on foreign currency 6,177 0.5 % (12,183) (6.7) % (21,107) (1.4) % Provision (benefit) for taxes 20,035 1.5 % (137,915) (76.0) % 42,789 2.9 % Net (loss) income$ (48,518) (3.6) %$ (590,243) (325.1) %$ 172,365 11.7 % Other data: Attendance 19,498 2,595 27,938 In-park per capita spending$ 62.03 $ 46.38 $ 48.32 Impact of COVID-19 Pandemic The novel coronavirus (COVID-19) pandemic had a material impact on our business in 2020, had a continuing negative impact in 2021 and may have a longer-term negative effect. OnMarch 14, 2020 , we closed our properties in response to the spread of COVID-19 and local government mandates. We ultimately resumed only partial operations at 10 of our 13 properties in 2020. Due to soft demand trends upon reopening in 2020, park operating calendars were adjusted, including reduced operating days per week and operating hours within each operating day and earlier closure of certain parks than a typical operating year. FollowingMarch 14, 2020 ,Knott's Berry Farm's partial operations in 2020 were limited to culinary festivals. InMay 2021 , we opened all of ourU.S. properties for the 2021 operating season on a staggered basis with capacity restrictions, guest reservations, and other operating protocols in place. Our 2021 operating calendars were designed to align with anticipated capacity restrictions, guest demand and labor availability, including fewer operating days in July and August at some of our smaller properties and additional operating days in September and the fourth quarter at most of our properties. As vaccination distribution efforts continued during the second quarter of 2021 and we were able to hire additional labor, we removed most capacity restrictions, guest reservation requirements and other protocols at ourU.S. properties beginning inJuly 2021 . We were also able to open our Canadian property,Canada's Wonderland , inJuly 2021 .Canada's Wonderland operated with capacity restrictions, guest reservations, and other operating protocols in place throughout 2021. We adjusted our park operating calendars in 2021 and may continue to adjust future park operating calendars as we respond to changes in guest demand, labor availability and any state and local restrictions. We currently anticipate returning to full park operating calendars for the 2022 operating season at all of our parks. The lingering effects of the COVID-19 pandemic may impact guest demand and labor availability, and it is uncertain the extent to which those effects will impact our operational and financial results. Our future operations are dependent on factors beyond our knowledge or control, including the duration and severity of the COVID-19 pandemic and actions taken to contain its spread and mitigate its public health effects. See Risk Factors at Item 1A . Despite a delayed start and various operating restrictions in place for the 2021 operating season, our 2021 operating results exceeded our initial expectations, driven by greater consumer demand resulting in higher attendance and in-park per capita spending. As a result, we made progress towards our goal to reduce outstanding debt obtained in response to the negative effects of the COVID-19 by redeeming$450 million of unsecured senior notes inDecember 2021 . The notes redeemed were previously due in 2024. 17 -------------------------------------------------------------------------------- Table of Contents Critical Accounting Policies Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which were prepared in accordance with accounting principles generally accepted inthe United States of America . These principles require us to make judgments, estimates and assumptions during the normal course of business that affect the amounts reported in the Consolidated Financial Statements and related notes. The following discussion addresses our critical accounting policies, which are those that are most important to the portrayal of our financial condition and operating results or involve a higher degree of judgment and complexity (see Note 3 for a complete discussion of our significant accounting policies). Application of the critical accounting policies described below involves the exercise of judgment and the use of assumptions as to future uncertainties, and as a result, actual results could differ from these estimates and assumptions.
Impairment of long-lived assets
Long-lived assets, including property and equipment, 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. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decrease in the market price of a long-lived asset; a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; a significant adverse change in legal factors or in the business climate; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset; past, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset; and a current expectation that a long-lived asset will be sold or disposed significantly before the end of its previously estimated useful life. An impairment loss may be recognized when estimated undiscounted future cash flows expected to result from the use of the asset, including disposition, are less than the carrying value of the asset. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying amounts of the assets. Fair value is generally determined using a combination of a cost and market approach. Significant factors considered in the cost approach include replacement cost, reproduction cost, depreciation, physical deterioration, functional obsolescence and economic obsolescence of the assets. The market approach estimates fair value by utilizing market data for similar assets. 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. The determination of whether an indicator of impairment has occurred and the estimation of undiscounted cash flows requires management to make significant estimates and consider an anticipated course of action as of the balance sheet date. Subsequent changes arising from changes in anticipated actions could impact the determination of whether impairment exists, the estimation of undiscounted cash flows and whether the effects could materially impact the consolidated financial statements. Due to the negative effects of the COVID-19 pandemic on our forecasted operating results, we tested our long-lived assets for impairment during the first and third quarters of 2020 (see Note 6 ). Management made significant estimates in performing these impairment tests, including the anticipated time frame to re-open our parks and the related anticipated demand upon re-opening our parks. Actual results could materially differ from these estimates depending on the ultimate extent of the effects of the COVID-19 pandemic. Due to the ongoing development and fluidity of the COVID-19 pandemic, the ultimate extent of the effects of the COVID-19 pandemic cannot be reasonably predicted.
Accounting for business combinations
Business combinations are accounted for under the acquisition method of accounting. The amounts assigned to the identifiable assets acquired and liabilities assumed in connection with acquisitions are based on estimated fair values as of the date of the acquisition, with the remainder, if any, recorded as goodwill. The fair values are determined by management, taking into consideration information supplied by the management of the acquired entities, valuations supplied by independent appraisal experts and other relevant information. The valuations are generally based upon future cash flow projections for the acquired assets, discounted to present value. The determination of fair values requires significant judgment by management. If future operating results do not meet expectations or anticipated synergies are not realized at Schlitterbahn Waterpark & Resort New Braunfels and the Schlitterbahn Waterpark Galveston, the Schlitterbahn reporting unit may become further impaired.
Goodwill and other indefinite-lived intangible assets, including trade-names, are reviewed for impairment annually, or more frequently if indicators of impairment exist. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decline in expected future cash flows; a sustained, significant decline in equity price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; the testing for recoverability of a significant asset group within a reporting unit; and slower growth rates. The fair value of a reporting unit is established using a combination of an income (discounted cash flow) approach and market approach. The income approach uses a reporting unit's projection of estimated operating results and discounted cash flows using a weighted-average cost of capital that reflects current market conditions. Estimated operating results are established using management's best estimates of economic and market conditions over the projected period including growth rates in revenues and costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. A market approach estimates fair value by applying cash flow multiples to the 18
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the operational performance of the reporting unit. The multiples are derived from comparable publicly traded companies with operating and investment characteristics similar to the reporting units.
It is possible that our assumptions about future performance, as well as the
economic outlook and related conclusions regarding valuation, could change
adversely, which may result in additional impairment that would have a material
effect on our financial position and results of operations in future periods.
Due to the negative effects of the COVID-19 pandemic on our forecasted operating
results, we tested our goodwill and indefinite-lived intangible assets for
impairment during the first and third quarters of 2020 (see Note 7 ).
Management made significant estimates in performing these impairment tests,
including the anticipated time frame to re-open our parks and the related
anticipated demand upon re-opening our parks. Actual results could materially
differ from these estimates depending on the ultimate extent of the effects of
the COVID-19 pandemic. Due to the ongoing development and fluidity of the
COVID-19 pandemic, the ultimate extent of the effects of the COVID-19 pandemic
cannot be reasonably predicted. In conjunction with our annual measurement date,
we completed the review of goodwill and other indefinite-lived intangibles as of
the first days of the fourth quarter of 2021 and 2020 and determined goodwill
and other indefinite-lived intangibles were not further impaired as of these
testing dates.
Self-Insurance Reserves
Self-insurance reserves are recorded for the estimated amounts of guest and
employee claims and related expenses incurred each period. Reserves are
established for both identified claims and incurred but not reported ("IBNR")
claims and are recorded when claim amounts become probable and estimable.
Reserves for identified claims are based upon our historical claim experience
and third-party estimates of settlement costs. Reserves for IBNR claims are
based upon our claims data history. Self-insurance reserves are periodically
reviewed for changes in facts and circumstances and adjustments are made as
necessary. The ultimate cost for identified claims can be difficult to predict
due to the unique facts and circumstances associated with each claim.
Revenue recognition
As disclosed within the consolidated statements of operations and comprehensive (loss) income, revenues are generated from sales of (1) admission to our amusement parks and water parks, (2) food, merchandise and games both inside and outside the parks, and (3) accommodations, extra-charge products, and other revenue sources. 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. 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. The extended validity of the 2020 season-long products resulted in a significant amount of revenue deferred from 2020 into 2021. 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, andCanada's Wonderland extended its 2020 and 2021 season-long products throughSeptember 5, 2022 . In order to calculate revenue recognized on extended season-long products, management made significant estimates regarding the estimated number of uses expected for these season-long products for admission, dining, beverage and other products, including during interim periods. Actual results could materially differ from these estimates depending on the ultimate extent of the effects of the COVID-19 pandemic. Due to the ongoing development and fluidity of the COVID-19 pandemic, the ultimate extent of the effects of the COVID-19 pandemic cannot be reasonably predicted.
Income taxes
Our legal entity structure includes both partnerships and corporate
subsidiaries. We are subject to publicly traded partnership tax ("PTP tax") on
certain partnership level gross income (net revenues less cost of food,
merchandise, and games revenues), state and local income taxes on partnership
income, U.S. federal state and local income taxes on income from our corporate
subsidiaries and foreign income taxes on our foreign subsidiary. As such, the
total (benefit) provision for taxes includes amounts for the PTP gross income
tax and federal, state, local and foreign income taxes. Under applicable
accounting rules, the total (benefit) provision for income taxes includes the
amount of taxes payable for the current year and the impact of deferred tax
assets and liabilities, which represents future tax consequences of events that
are recognized in different periods in the financial statements than for tax
purposes.
Our corporate subsidiaries account for income taxes under the asset and
liability method. Accordingly, deferred tax assets and liabilities are
recognized for the future book and tax consequences attributable to temporary
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are determined using enacted tax rates expected to apply in the year
in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax law is
recognized in income at the time of enactment of such change in tax law. Any
interest or penalties due for payment of income taxes are included in the
provision for income taxes.
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We record a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. The need for this allowance is based on several factors including the ten-year carryforward period allowed for excess foreign tax credits, experience to date of foreign tax credit limitations, carryforward periods of state net operating losses, and management's long-term estimates of domestic and foreign source income. There is inherent uncertainty in the estimates used to project the amount of foreign tax credit and state net operating loss carryforwards that are more likely than not to be realized. It is possible that our future income projections, as well as the economic outlook and related conclusions regarding valuation allowances could change, which may result in additional valuation allowance being recorded or may result in additional valuation allowance reductions, and which may have a material negative or positive effect on our reported financial position and results of operations in future periods.
Adjusted EBITDA
Adjusted EBITDA represents earnings before interest, taxes, depreciation,
amortization, other non-cash items, and adjustments as defined in our current
and prior credit agreements. Adjusted EBITDA is not a measurement of operating
performance computed in accordance with generally accepted accounting principles
("GAAP") and should not be considered as a substitute for operating income, net
income or cash flows from operating activities computed in accordance with GAAP.
We believe that Adjusted EBITDA is a meaningful measure as it is widely used by
analysts, investors and comparable companies in our industry to evaluate our
operating performance on a consistent basis, as well as more easily compare our
results with those of other companies in our industry. Further, management
believes Adjusted EBITDA is a meaningful measure of park-level operating
profitability and we use it for measuring returns on capital investments,
evaluating potential acquisitions, determining awards under incentive
compensation plans, and calculating compliance with certain loan covenants.
Adjusted EBITDA is provided in the discussion of results of operations that
follows as a supplemental measure of our operating results and is not intended
to be a substitute for operating income, net income or cash flows from operating
activities as defined under GAAP. In addition, Adjusted EBITDA may not be
comparable to similarly titled measures of other companies.
The table below provides a reconciliation between Adjusted EBITDA and Net income (loss) for the periods indicated:
Years Ended December 31,
(In thousands) 2021 2020 2019
Net (loss) income $ (48,518) $ (590,243) $ 172,365
Interest expense 184,032 150,669 100,364
Interest income (94) (460) (2,033)
Provision (benefit) for taxes 20,035 (137,915) 42,789
Depreciation and amortization 148,803 157,549 170,456
EBITDA 304,258 (420,400) 483,941
Loss on early debt extinguishment 5,909 2,262 -
Net effect of swaps (19,000) 15,849 16,532
Non-cash foreign currency loss (gain) 6,255 (12,011) (21,061)
Non-cash equity compensation expense 15,431 (209) 12,434
Loss on impairment/retirement of fixed assets, net 10,486 8,135 4,931
Loss on impairment of goodwill and other intangibles - 103,999 -
Loss (gain) on other assets 129 (11) (617)
Acquisition-related costs - 16 7,162
Other (1) 1,173 359 1,351
Adjusted EBITDA $ 324,641 $ (302,011) $ 504,673
(1) Consists of certain costs as defined in our current and 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.
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Results of Operations
We believe that the following are key operational measures in our management and operational reports, and they are used as major factors in important operational decisions because they are the primary drivers of our financial and operational performance:
Attendance is defined as the number of guest visits to our separately closed amusement parks and outdoor water parks.
Per capita in-park spending is calculated as revenue generated at our separately closed amusement parks and outdoor water parks, plus tolls and related parking revenue (in-park revenue), divided by total attendance.
Off-park revenue is defined as revenue from resorts, off-park dining and retail locations, marina, sponsorship, online transaction fees charged to customers, and all other off-park operations. Park.
Net revenue includes in-fleet revenue and non-fleet revenue less amounts paid to third parties under concession agreements (see note 5
).
2021 vs. 2020
Due to the effects of the COVID-19 pandemic, the results for the year endedDecember 31, 2021 were not directly comparable with the results for the year endedDecember 31, 2020 . The year endedDecember 31, 2021 included 1,765 operating days compared with 487 operating days for the year endedDecember 31, 2020 . Due to the effects of the COVID-19 pandemic, we postponed the opening of our parks for the 2021 operating season toMay 2021 , when all of our properties opened on a staggered basis except for our Canadian property,Canada's Wonderland , which opened inJuly 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 ourU.S. properties beginning inJuly 2021 . Operating restrictions remained in place at our Canadian property throughout 2021. We adjusted our 2021 operating calendars to reflect anticipated changes in guest demand, labor availability and state and local restrictions by including fewer operating days in July and August at some of our smaller properties and by including additional operating days in September and the fourth quarter at most of our properties. The year endedDecember 31, 2021 also included results prior to theMay 2021 opening of our parks from limited out-of-park operations, including the operation of some of our hotel properties and a culinary festival atKnott's Berry Farm fromMarch 5, 2021 throughMay 2, 2021 . For the year endedDecember 31, 2020 and due to the effects of the COVID-19 pandemic, our properties closed onMarch 14, 2020 . Eight of our 13 properties resumed partial operations on a staggered basis beginning in the second quarter of 2020 with opening dates beginning in mid-June and continuing through mid-July. During this time, we also reopened operations at some of our out-of-park operations, such as hotel operations. Due to soft demand trends upon reopening, park operating calendars were adjusted for the remainder of 2020, including reduced operating days per week and operating hours within each operating day. In addition, some of our reopened parks closed earlier than the park's pre-pandemic operating calendar. Two additional parks reopened on weekends in November and December of 2020. FollowingMarch 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 atKnott's Berry Farm and 16 operating days at the Schlitterbahn parks prior to theMarch 14, 2020 closure of our properties. Attendance, in-park per capita spending and operating day statistics for 2020 and 2021 exclude theKnott's Berry Farm culinary festivals. 21
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The following table presents selected financial information and operating statistics for the years ended
Increase (Decrease)
December 31, December 31,
2021 2020 $ %
(Amounts in thousands, except expenditure per capita) Net revenue
$ 1,338,219 $ 181,555 $ 1,156,664 N/M Operating costs and expenses 1,030,466 483,891 546,575 113.0 % Depreciation and amortization 148,803 157,549 (8,746) (5.6) % Loss on impairment/retirement of fixed assets, net 10,486 8,135 2,351 N/M Loss on impairment of goodwill and other intangibles - 103,999 (103,999) N/M Loss (gain) on other assets 129 (11) 140 N/M Operating income (loss)$ 148,335 $ (572,008) $ 720,343 N/M Other Data: Adjusted EBITDA (1)$ 324,641 $ (302,011) $ 626,652 N/M Attendance 19,498 2,595 16,903 N/M In-park per capita spending$ 62.03 $ 46.38 $ 15.65 33.7 % Out-of-park revenues$ 167,978 $ 67,375 $ 100,603 149.3 %
N/M Not significant either due to the nature of the expense item or due to minimal operations in 2020
(1) For more information on Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation to net profit (loss), see page 20.
Consolidated net revenues totaled$1.3 billion for the year endedDecember 31, 2021 compared with$181.6 million for 2020. This increase in net revenues was attributable to the 1,278 operating day increase in 2021 resulting in a 16.9 million-visit increase in attendance and a$100.6 million increase in out-of-park revenues. In-park per capita spending for the year endedDecember 31, 2021 increased 34% to$62.03 , which represented higher levels of guest spending across all key revenue categories, particularly admissions, extra-charge attractions, including front-of-lineFast Lane products, and food and beverage, and was driven by increases in pricing and volume. The increase in net revenues included a$6.5 million favorable impact of foreign currency exchange rates at our Canadian park. Operating costs and expenses for the year endedDecember 31, 2021 increased to$1.0 billion from$483.9 million for 2020. This was the result of an$84.5 million increase in cost of food, merchandise and games revenues ("COGS"), a$350.5 million increase in operating expenses, and a$111.6 million increase in selling, general, and administrative expenses ("SG&A"), all of which were largely the result of the 1,278 operating day increase in 2021. While the majority of the$350.5 million increase in operating expenses was attributable to the increase in operating days, there was also a meaningful increase in seasonal labor rate in order to recruit employees in a challenging labor market, as well as higher full-time wages, including accrued bonus plans. Similarly, the$111.6 million increase in SG&A expense was driven by resumed park operations in 2021. However, the increase in SG&A expense was also driven by an increase in full-time wages, particularly for accrued bonus plans and equity-based compensation plans, as well as consulting fees incurred in 2021 related to a business optimization program. The increase in operating costs and expenses included a$3.4 million unfavorable impact of foreign currency exchange rates at our Canadian park. Depreciation and amortization expense for the year endedDecember 31, 2021 decreased$8.7 million compared with 2020 due primarily to the full depreciation of 15-year useful lived property and equipment from our 2006 acquisition in 2021. The loss on impairment / retirement of fixed assets for 2021 was$10.5 million compared with$8.1 million for 2020. The loss on impairment / retirement of fixed assets for 2021 included retirements of assets in the normal course of business, as well as the impairment of a few specific assets in the second half of 2021. The loss on impairment / retirement of fixed assets for 2020 included a$2.7 million impairment charge with respect to the Schlitterbahn parks' long-lived assets triggered by the effects of the COVID-19 pandemic during the first quarter of 2020 (see Note 6 ), as well as the impairment of two specific assets during the first quarter of 2020. Similarly triggered by the anticipated effects of the COVID-19 pandemic, the loss on impairment of goodwill and other intangibles for 2020 included a$73.6 million ,$6.8 million and$7.9 million impairment of goodwill at the Schlitterbahn parks, goodwill atDorney Park , and the Schlitterbahn trade name, respectively, during the first quarter of 2020, and an$11.3 million ,$2.3 million and$2.2 million impairment of goodwill at the Schlitterbahn parks, goodwill atDorney Park , and the Schlitterbahn trade name, respectively, during the third quarter of 2020 (see
Note 7 ).
After the above items, 2021 operating income stands at
22 -------------------------------------------------------------------------------- Table of Contents Interest expense for 2021 increased$33.4 million due to interest incurred on the 2025 senior notes issued inApril 2020 and the 2028 senior notes issued inOctober 2020 . The net effect of our swaps resulted in a$19.0 million benefit to earnings for 2021 compared with a$15.8 million charge to earnings for 2020. The difference was attributable to the change in fair market value of our swap portfolio. We recognized a loss on early debt extinguishment of$5.9 million in 2021 related to a full redemption of the 2024 senior notes, and we recognized a$2.3 million loss on early debt extinguishment in 2020 related to the 2020 refinancing events (see Note 8 ). During 2021, we also recognized a$6.2 million net charge to earnings for foreign currency gains and losses compared with a$12.2 million net benefit to earnings for 2020. Both amounts primarily represent remeasurement of theU.S. -dollar denominated debt recorded at our Canadian entity from theU.S. -dollar to the legal entity's functional currency. For 2021, a provision for taxes of$20.0 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes compared with a benefit for taxes of$137.9 million recorded for 2020. The difference in provision for taxes was attributable to a larger pretax loss in 2020 from our taxable subsidiaries, as well as expected benefits from the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), which was signed into law onMarch 27, 2020 . The CARES Act resulted in various changes to theU.S. tax law, including, among other things, allowing net operating losses arising in tax years 2018 through 2020 to be carried back to the preceding five taxable years and removing the limitation that such losses only offset 80% of taxable income. As a result of these changes, we expect to recognize two benefits. First, we carried back the tax year 2020 losses incurred by our corporate subsidiaries, which will result in the refund of a portion of federal income taxes paid during the carryback period of approximately$79.7 million . Second, the annual effective tax rate for 2021 and for 2020 included a net benefit of$1.7 million and$18.1 million , respectively, from carrying back the tax year 2020 losses of the corporate subsidiaries. This tax benefit represents an estimated incremental benefit of tax loss carrybacks for periods when the federal income tax rate was greater than the current 21% rate. The overall benefit of the carryback of losses was decreased by$4.7 million and$16.1 million in 2021 and 2020, respectively, for a projected valuation allowance on foreign tax credits originally utilized during the carryback period which would be released as a result of the loss carryback but which are not expected to be utilized. After the items above, net loss for 2021 totaled$48.5 million , or$0.86 per diluted limited partner unit, compared with a net loss of$590.2 million , or$10.45 per diluted unit, for 2020. For 2021, Adjusted EBITDA totaled$324.6 million compared with a$302.0 million Adjusted EBITDA loss for 2020. The increase in Adjusted EBITDA was primarily due to the impact of COVID-19 related park closures in 2020 and the related improvement in attendance, in-park per capita spending and out-of-park revenues from reopening parks in 2021. 2021 vs. 2019 As described above, the results for the year endedDecember 31, 2021 were not directly comparable with the results for the year endedDecember 31, 2020 due to the effects of the COVID-19 pandemic. The results for the year endedDecember 31, 2021 were more comparable with the results for the year endedDecember 31, 2019 . As a result, we have included analysis comparing our 2021 results with our 2019 results. However, the 2021 results are also not directly comparable with the 2019 results due to the postponed opening of our parks for the 2021 operating season untilMay 2021 , as well as operating restrictions in place upon opening in 2021, compared with a pre-pandemic operating season in 2019. The year endedDecember 31, 2021 included 1,765 operating days compared with a total of 2,224 operating days for the year endedDecember 31, 2019 . The following table presents key financial information and operating statistics for the years endedDecember 31, 2021 andDecember 31, 2020 : Increase (Decrease) December 31, 2021 December 31, 2019 $ %
(Amounts in thousands, except expenditure per capita) Net revenue
$ 1,338,219 $ 1,474,925 $ (136,706) (9.3) % Operating costs and expenses 1,030,466 990,716 39,750 4.0 % Depreciation and amortization 148,803 170,456 (21,653) (12.7) % Loss on impairment/retirement of fixed assets, net 10,486 4,931 5,555 N/M Loss (gain) on other assets 129 (617) 746 N/M Operating income $ 148,335 $ 309,439 $ (161,104) (52.1) % Other Data: Adjusted EBITDA (1) $ 324,641 $ 504,673 $ (180,032) (35.7) % Adjusted EBITDA margin (2) 24.3 % 34.2 % - (9.9) % Attendance 19,498 27,938 (8,440) (30.2) % In-park per capita spending $ 62.03 $ 48.32 $ 13.71 28.4 % Out-of-park revenues $ 167,978 $ 168,708 $ (730) (0.4) % N/M Not meaningful due to the nature of the expense line-item 23 -------------------------------------------------------------------------------- Table of Contents (1) For additional information regarding Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation from net (loss) income, see page 20. (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. For the year endedDecember 31, 2021 , net revenues totaled$1.3 billion compared with$1.5 billion for 2019. The decrease in net revenues reflected the impact of an 8.4 million-visit, or 30%, decline in attendance partially offset by the impact of a$13.71 , or 28%, increase in in-park per capita spending. The decrease in net revenues and attendance was primarily attributable to 459 fewer operating days in 2021. Out-of-park revenues for the year endedDecember 31, 2021 were comparable to 2019. Lower out-of-park revenues that resulted from the delayed opening of our parks in 2021 untilMay 2021 and the temporary closure of two hotel properties for renovations during 2021 were mostly offset by additional out-of-park revenues from theKnott's Berry Farm culinary festival in 2021. Operating costs and expenses for the year endedDecember 31, 2021 increased$39.8 million compared with 2019. This was the result of a$56.0 million increase in operating expenses offset by a$13.8 million decrease in COGS and a$2.5 million decrease in SG&A expense, all of which were impacted by the result of fewer operating days in 2021. Operating expenses increased compared with 2019 despite fewer operating days due to a meaningful increase in the seasonal labor rate in order to recruit employees in a challenging labor market, as well as higher full-time wages attributable to an increase in headcount. Seasonal labor hours declined in 2021 compared to 2019. The decrease in COGS was attributable to fewer operating days in 2021. COGS as a percentage of food, merchandise and games revenue in 2021 was comparable to 2019. The decrease in SG&A expense was primarily due to less advertising expense due to fewer operating days and a more efficient marketing program offset by an increase in full-time wages, particularly for accrued bonus plans and equity-compensation plans. Depreciation and amortization expense for the year endedDecember 31, 2021 decreased$21.7 million compared with 2019 due primarily to the full depreciation of 15-year useful lived property and equipment from our 2006 acquisition in 2021, as well as the change in estimated useful life of a long-lived asset at Kings Dominion in 2019. The loss on impairment / retirement of fixed assets for 2021 was$10.5 million compared with$4.9 million for 2019. The loss on impairment / retirement of fixed assets for 2021 included the impairment of a few specific assets in the second half of 2021.
After the above items, 2021 operating income stands at
Interest expense for 2021 increased$83.7 million due to interest incurred on the 2025 senior notes and the 2028 senior notes, both of which were issued in 2020. The net effect of our swaps resulted in a$19.0 million benefit to earnings for 2021 compared with a$16.5 million charge to earnings for 2019. The difference was attributable to the change in fair market value of our swap portfolio. We recognized a loss on early debt extinguishment of$5.9 million in 2021 related to a full redemption of the 2024 senior notes (see Note 8 ). During 2021, we also recognized a$6.2 million net charge to earnings for foreign currency gains and losses compared with a$21.1 million net benefit to earnings for 2019. Both amounts primarily represent remeasurement of theU.S. -dollar denominated debt recorded at our Canadian entity from theU.S. -dollar to the legal entity's functional currency. For 2021, a provision for taxes of$20.0 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes compared with a provision for taxes of$42.8 million recorded for 2019. The decrease in provision for taxes was attributable to a decrease in pretax income from our taxable subsidiaries during 2021. After the items above, net loss for 2021 totaled$48.5 million , or$0.86 per diluted limited partner unit, compared with net income of$172.4 million , or$3.03 per diluted unit, for 2019. For 2021, Adjusted EBITDA totaled$324.6 million compared with$504.7 million for 2019. Similarly, our Adjusted EBITDA margin for 2021 decreased compared with the Adjusted EBITDA margin for 2019. The decreases in Adjusted EBITDA and Adjusted EBITDA margin were both largely due to the postponed opening of our parks for the 2021 operating season untilMay 2021 , other COVID-19 related operating calendar changes and restrictions, as well as significantly increased labor costs in 2021 due to labor rate pressures. In order to provide a more meaningful comparison of our key operational measures, we have provided comparable same-day statistics for attendance and in-park per capita spending. These supplemental comparisons were used by management for operational decisions during 2021. We believe these supplemental key operational measures provide a more meaningful measure of demand and guest spending trends on an annual basis 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 1,695 operating days for the year endedDecember 31, 2021 with the comparable 1,695 operating days for the year endedDecember 31, 2019 . The 1,695 operating days for the year endedDecember 31, 2021 included the 1,765 total operating days for the period less 70 24 -------------------------------------------------------------------------------- Table of Contents operating days from the Schlitterbahn parks which were acquired onJuly 1, 2019 . As a result, on a comparable same-day basis, we excluded$15.4 million of in-park revenues and 0.3 million visits for the year endedDecember 31, 2021 . We also excluded$239.0 million of in-park revenues and 5.3 million visits for the year endedDecember 31, 2019 to exclude the results of 2019 operating days without equivalent 2021 operating days. No adjustments otherwise were made to the daily data from either period, including no adjustments to reflect the impact of fewer operating hours within an operating day or operating restrictions in place in 2021. Attendance for the year endedDecember 31, 2021 represented approximately 85% of attendance for the year endedDecember 31, 2019 on a comparable same-day basis driven by season pass attendance and general admission and offset by an expected slower recovery in group sales attendance. In-park per capita spending for the year endedDecember 31, 2021 represented approximately 127% of in-park per capita spending for the year endedDecember 31, 2019 on a comparable same-day basis. The increase in in-park per capita spending on a comparable same-day basis was attributable to increases in all key spending categories, particularly admission, extra-charge attractions, including front-of-lineFast Lane products, and food and beverage. Attendance and in-park per capita spending as a percentage of 2019 results on a comparable same-day basis increased from the initial opening of our parks inMay 2021 through the end of the year. Due to the nature of out-of-park revenues, we are not able to produce comparable same-day statistics. 2020 vs. 2019 The results for the year endedDecember 31, 2020 were not directly comparable with the results for the year endedDecember 31, 2019 due to park closures and operating calendar changes associated with the COVID-19 pandemic. OnMarch 14, 2020 , we closed our properties in response to the spread of COVID-19. We ultimately resumed only partial operations at 10 of our 13 properties in 2020. Beginning in the second quarter of 2020, we resumed partial operations at eight properties on a staggered basis with opening dates starting in mid-June and continuing through mid-July. We also reopened operations at some of our out-of-park attractions at this time, such as hotel operations. Attendance upon reopening was impacted by the ongoing effects of the pandemic and was below original expectations. Due to these soft demand trends upon reopening, park operating calendars were adjusted for the remainder of 2020, including reduced operating days per week and operating hours within each operating day. In addition, some of our reopened parks closed earlier in 2020 than the park's pre-pandemic operating calendar. Two parks,Cedar Point andKings Island , remained open in 2020 afterLabor Day . Two additional parks,Carowinds and Kings Dominion, reopened on weekends in November and December to host abbreviated versions of their traditional WinterFest events. FollowingMarch 14, 2020 ,Knott's Berry Farm's partial operations were limited to culinary festivals. Net revenues from these limited operations atKnott's Berry Farm were classified as out-of-park revenues. Attendance, in-park per capita spending and operating day statistics for 2020 exclude these limited operations atKnott's Berry Farm . As a result of the effects of the COVID-19 pandemic, the year endedDecember 31, 2020 included 487 operating days compared with 2,224 operating days for the year endedDecember 31, 2019 . The following table presents key financial information and operating statistics for the years endedDecember 31, 2020 andDecember 31, 2019 : Increase (Decrease) December 31, December 31, 2020 2019 $ %
(Amounts in thousands, except expenditure per capita) Net revenue
$ 181,555 $ 1,474,925 $ (1,293,370) (87.7) % Operating costs and expenses 483,891 990,716 (506,825) (51.2) % Depreciation and amortization 157,549 170,456 (12,907) (7.6) % Loss on impairment/retirement of fixed assets, net 8,135 4,931 3,204 N/M Loss on impairment of goodwill and other intangibles 103,999 - 103,999 N/M Gain on sale of investment (11) (617) 606 N/M Operating (loss) income$ (572,008) $ 309,439 $ (881,447) N/M Other Data: Adjusted EBITDA (1)$ (302,011) $ 504,673 $ (806,684) N/M Attendance 2,595 27,938 (25,343) (90.7) % In-park per capita spending$ 46.38 $ 48.32 $ (1.94) (4.0) % Out-of-park revenues$ 67,375 $ 168,708 $ (101,333) (60.1) %
N/M Not significant either due to the nature of the expense item or due to minimal operations in 2020
(1) For more information on Adjusted EBITDA, including how we define and use Adjusted EBITDA, as well as a reconciliation to net profit (loss), see page 20.
Consolidated net revenues totaled$181.6 million for the year endedDecember 31, 2020 , decreasing$1.3 billion , from$1.5 billion for 2019. This reflected the impact of a 25.3 million-visit decrease in attendance, a$1.94 decrease in in-park per capita 25 -------------------------------------------------------------------------------- Table of Contents spending, and a$101.3 million decrease in out-of-park revenues, all of which were heavily impacted by the aforementioned park closures and operating calendar changes. The decrease in attendance was also due to soft initial demand upon re-opening our parks in 2020. However, demand steadily increased from 20-25% of comparable 2019 attendance levels upon initially reopening up to 55% of comparable 2019 attendance levels inSeptember 2020 . The decrease in in-park per capita spending was the result of less guest spending on extra-charge products, specifically front-of-line products, and admission attributable to a higher season pass mix. In-park per capita spending on food, merchandise and games increased compared with 2019. The decrease in out-of-park revenues was primarily attributable to a decline in accommodations revenue related to a decrease in occupancy due to the closures of our parks, as well as a decrease in online transaction fee revenue due to a decline in online sales volume. Net revenues were not materially impacted by foreign currency exchange rates. Operating costs and expenses for the year endedDecember 31, 2020 decreased 51.2%, or$506.8 million , to$483.9 million from$990.7 million for 2019. The decrease was the result of a$98.3 million decrease in COGS, a$294.4 million decrease in operating expenses, and a$114.1 million decrease in SG&A expense. The decrease in COGS was due to the decline in sales volume due to park closures, operating calendar changes and soft initial demand at parks that opened in 2020. The$294.4 million decrease in operating expenses was attributable to$167.5 million of seasonal labor savings, as well as reductions in operating supplies, maintenance supplies, utilities, entertainment-related fees and insurance attributable to closed properties, abbreviated operating calendars and fewer offerings at our parks in 2020. In addition, full-time wages decreased due to a decline in anticipated payout of bonus plans in 2020. The$114.1 million decrease in SG&A expense was attributable to$57.5 million of advertising expense savings, as well as a reduction in transaction fee expense due to a decline in online sales volume, a decline in the anticipated payout of outstanding equity-based compensation and bonus plans, and 2019 acquisition-related costs. Operating costs and expenses were not materially impacted by foreign currency exchange rates. Depreciation and amortization expense for 2020 decreased$12.9 million compared with 2019 primarily due to the 2019 change in estimated useful life of a long-lived asset at Kings Dominion. The loss on impairment / retirement of fixed assets for 2020 was$8.1 million compared with$4.9 million for 2019. The loss on impairment / retirement of fixed assets for 2020 included a$2.7 million impairment charge with respect to the Schlitterbahn parks' long-lived assets triggered by the effects of the COVID-19 pandemic during the first quarter of 2020 (see Note 6 ), as well as the impairment of two specific assets during the first quarter of 2020. Similarly triggered by the anticipated effects of the COVID-19 pandemic, the loss on impairment of goodwill and other intangibles for 2020 included a$73.6 million ,$6.8 million and$7.9 million impairment of goodwill at the Schlitterbahn parks, goodwill atDorney Park , and the Schlitterbahn trade name, respectively, during the first quarter of 2020, and an$11.3 million ,$2.3 million and$2.2 million impairment of goodwill at the Schlitterbahn parks, goodwill atDorney Park , and the Schlitterbahn trade name, respectively, during the third quarter of 2020 (see Note 7 ). During the first quarter of 2019, a$0.6 million gain on sale of investment was recognized for additional proceeds from the liquidation of a preferred equity investment.
After the above items, the operating loss for 2020 amounts to
Interest expense for 2020 increased$50.3 million due to interest incurred on the 2025 senior notes issued inApril 2020 and on the 2029 senior notes issued inJune 2019 . The net effect of our swaps resulted in a$15.8 million charge to earnings for 2020 compared with a$16.5 million charge to earnings for 2019. The difference was attributable to the change in fair market value of our swap portfolio. We recognized a$2.3 million loss on early debt extinguishment related to our 2020 refinancing events (see Note 8 ). During 2020, we also recognized a$12.2 million net benefit to earnings for foreign currency gains and losses compared with a$21.1 million net benefit to earnings for 2019. Both amounts primarily represented remeasurement of theU.S. -dollar denominated debt recorded at our Canadian entity from theU.S. -dollar to the legal entity's functional currency. For 2020, a benefit for taxes of$137.9 million was recorded to account for PTP taxes and federal, state, local and foreign income taxes compared with a provision for taxes recorded for 2019 of$42.8 million . The increase in benefit for taxes was attributable to an increase in pretax loss from our taxable subsidiaries, as well as expected benefits from the CARES Act. The CARES Act resulted in various changes to theU.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 expected to recognize two benefits. First, we expected to carryback the 2020 losses incurred by our corporate subsidiaries, which would result in the refund of a portion of federal income taxes paid during the carryback period of approximately$55.4 million as ofDecember 31, 2020 . Second, the annual effective tax rate for 2020 included a net benefit of$18.1 million from carrying back the projected 2020 losses of the corporate subsidiaries. This tax benefit represented an estimated$34.2 million incremental benefit of tax loss carrybacks for periods when the federal income tax rate was greater than the current 21% rate. The estimated$34.2 million benefit was decreased by$16.1 million in 2020 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 were not expected to be utilized. After the items above, net loss for 2020 totaled$590.2 million , or$10.45 per diluted limited partner unit, compared with net income of$172.4 million , or$3.03 per diluted unit, for 2019. For 2020, Adjusted EBITDA loss totaled$302.0 million compared with a$504.7 million Adjusted EBITDA for 2019. The variance in Adjusted EBITDA was due to decreased net revenues offset somewhat by expense savings attributable to park closures and operating calendar changes as a result of the COVID-19 pandemic. 26 -------------------------------------------------------------------------------- Table of Contents Liquidity and Capital Resources Our principal sources of liquidity typically include cash from operating activities, funding from our long-term debt obligations and existing cash on hand. Due to the seasonality of our business, we typically fund pre-opening operations with revolving credit borrowings. Revolving credit borrowings are typically reduced with our positive cash flow during the seasonal operating period. Our primary uses of liquidity typically include operating expenses, partnership distributions, capital expenditures, interest payments and income tax obligations. Due to the negative effects of the COVID-19 pandemic, we took steps in 2020 to secure additional liquidity and to obtain relief from certain financial covenants including issuing$1.3 billion of senior notes, amending our term debt and revolving credit agreement, reducing operating expenses, including labor costs, suspending capital expenditures, and suspending quarterly partnership distributions. Due to limited open operations, our 2020 and first quarter 2021 liquidity needs were funded from cash on hand from the recently issued senior notes. We began generating positive cash flows from operations during the second quarter of 2021. Despite a delayed start and various operating restrictions in place for the 2021 operating season, our 2021 operating results exceeded our initial expectations, driven by higher consumer demand driving both attendance and in-park per capita spending. As a result, we subsequently redeemed all of our 2024 senior notes inDecember 2021 . We expect to fund our 2022 liquidity needs with cash from operating activities and borrowings from our revolving credit facility. As ofDecember 31, 2021 , we had cash on hand of$61.1 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 first quarter of 2023. 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, reducing the Partnership's outstanding debt, and reinstating the quarterly Partnership distribution. We expect to invest between$200 million and$215 million in capital expenditures for the 2022 operating season, which will include the completion of several resort renovation projects, and investments to expand our park offerings and develop new revenue centers, and technology enhancements, such as cashless parks, touch-free transactions and labor management tools. Following the issuance of$1.3 billion of senior notes in 2020 and the redemption of the 2024 senior notes inDecember 2021 , we anticipate$150 million in annual cash interest in 2022 of which 75% of the payments occur in the second and fourth quarter. We are expecting to receive$79.7 million in tax refunds attributable to the tax year 2020 net operating loss being carried back to prior years inthe United States and an additional$9.5 million in tax refunds attributable to net operating losses being carried back to prior years inCanada . We anticipate receiving these tax refunds during 2022. In 2022, we anticipate cash payments for income taxes to range from$45 million to$60 million , exclusive of these tax refunds.
Operational activities
Net cash from operating activities in 2021 totaled$201.2 million compared with net cash for operating activities of$416.5 million in 2020 and net cash from operating activities of$403.0 million in 2019. The variance between years was attributable to lower earnings in 2020, and to a lesser extent in 2021, as a result of disrupted operations due to the COVID-19 pandemic. Cash interest payments totaled$174.3 million in 2021 compared with$130.4 million in 2020. The increase in cash interest payments from 2020 was attributable to a full year of interest paid on the 2025 senior notes and 2028 senior notes which were issued during 2020. Cash interest payments in 2020 increased$44.8 million compared to 2019 due to a partial year of interest paid on the 2025 senior notes in 2020 offset by less outstanding term debt in 2020 following a$463.3 million prepayment in the second quarter of 2020. Cash payments for income taxes totaled$10.1 million in 2021 compared with$1.8 million in 2020 and$40.8 million in 2019. The variance between years for cash payments for income taxes was attributable to the impact of disrupted operations in 2020, and to a lesser extent 2021.
Investing activities
Net cash for investing activities in 2021 totaled$57.8 million , a decrease of$63.0 million compared with 2020. The decrease from 2020 was attributable to less spending in 2021 as we continued to recover from the effects of the COVID-19 pandemic. Net cash for investing activities in 2020 decreased$479.4 million compared with 2019. The decrease from 2019 was attributable to two causes. First, in 2020 and due to the effects of the COVID-19 pandemic, we reduced our capital spending by approximately$60 million from our initial capital expenditures budget to maintain flexibility and retain liquidity. Second, in 2019, net cash for investing activities included the acquisitions of the Schlitterbahn parks andSawmill Creek Resort and the purchase of the land atCalifornia's Great America from theCity of Santa Clara . 27 -------------------------------------------------------------------------------- Table of Contents Financing Activities Net cash for financing activities in 2021 totaled$466.4 million compared with net cash from financing activities of$730.9 million in 2020. The variance in net cash (for) from financing activities was due to the full redemption of the 2024 senior notes in 2021 and theApril 2020 refinancing events and the issuance of the 2028 senior notes in 2020. Net cash from financing activities in 2020 increased$460.4 million compared with net cash for financing activities in 2019. The increase from 2019 was primarily attributable to the net cash proceeds from theApril 2020 financing events and the issuance of the 2028 senior notes in 2020 compared with the 2029 senior notes issuance in 2019. The increase from 2019 was somewhat offset by the suspension of quarterly partnership distributions following the first quarter 2020 partnership distribution.
Contractual obligations
As ofDecember 31, 2021 , our primary contractual obligations consisted of outstanding long-term debt agreements and related derivative agreements. Before reduction for debt issuance costs and original issue discount, our long-term debt agreements consisted of the following: •$264 million of senior secured term debt, maturing inApril 2024 under the 2017 Credit Agreement, as amended. The term debt bears interest at London InterBank Offering Rate ("LIBOR") plus 175 bps, under amendments we entered into onMarch 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 ofDecember 31, 2021 . •$1.0 billion of 5.500% senior secured notes, maturing inMay 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 toMay 1, 2022 , up to 35% of the 2025 senior notes may be redeemed with net cash proceeds of certain equity offerings at a price equal to 105.500% 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 toMay 1, 2022 at a price equal to 100% of the principal amount of the notes redeemed plus a "make-whole" premium together with accrued and unpaid interest and additional interest, if any, to the redemption date. Thereafter, the 2025 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. The 2025 senior notes pay interest semi-annually in May and November. •$500 million of 5.375% senior unsecured notes, maturing inApril 2027 , issued at par. The 2027 senior notes may be redeemed, in whole or in part, at any time prior toApril 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. •$300 million of 6.500% senior unsecured notes, maturing inOctober 2028 , issued at par. Prior toOctober 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 toOctober 1, 2023 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 April and October. •$500 million of 5.250% senior unsecured notes, maturing inJuly 2029 , issued at par. Prior toJuly 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 toJuly 15, 2024 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 2029 senior notes pay interest semi-annually in January and July. •No borrowings under the$375 million senior secured revolving credit facility under our current credit agreement with a Canadian sub-limit of$15 million .$300 million of the revolving credit facility bears interest at LIBOR plus 350 bps or Canadian Dollar Offered Rate ("CDOR") plus 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 bears interest at LIBOR plus 300 bps or CDOR plus 200 bps and 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 inDecember 2023 and$75 million of the revolving credit facility is scheduled to mature inApril 2022 . The credit agreement provides for the issuance of documentary and standby letters of credit. After letters of credit, which totaled$15.8 million as ofDecember 31, 2021 and$15.9 million as ofDecember 31, 2020 , we had available borrowings under our revolving credit facility of$359.2 million as ofDecember 31, 2021 and$359.1 million as ofDecember 31, 2020 . Our 28 -------------------------------------------------------------------------------- Table of Contents letters of credit are primarily in place to backstop insurance arrangements. We did not borrow on the revolving credit facility during 2021. During the year endedDecember 31, 2020 , the maximum outstanding balance under our revolving credit facility was$140.0 million . OnDecember 17, 2021 , we redeemed$450 million of 5.375% senior unsecured notes, which otherwise would have matured inJune 2024 , at a redemption price equal to 100.896% of the principal amount plus accrued and unpaid interest. We further amended the 2017 Credit Agreement inDecember 2021 to allow for the redemption of the 2024 senior notes. As ofDecember 31, 2021 andDecember 31, 2020 , we had four interest rate swap agreements with a notional value of$500 million that convert one-month variable rate LIBOR to a fixed rate of 2.88% throughDecember 31, 2023 . This results in a 4.63% fixed interest rate for borrowings under our senior secured term loan facility after the impact of interest rate swap agreements. None of our interest rate swap agreements were designated as cash flow hedges in the periods presented. As ofDecember 31, 2021 andDecember 31, 2020 , the fair market value of our swap portfolio was classified as long-term and recorded in "Derivative Liability" within the consolidated balance sheets. The 2017 Credit Agreement, as amended, includes: (i) a Senior Secured Leverage Ratio of 4.50x Total First Lien Senior Secured Debt-to-Consolidated EBITDA starting with the first quarter of 2022, which will step down to 4.00x in the second quarter of 2023 and which will step down further to 3.75x in the third quarter of 2023, with the covenant calculations for the first, second, and third quarters in 2022 to include Consolidated EBITDA from the second, third and fourth quarters of the fiscal year endedDecember 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 ofDecember 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 credit agreement until the termination of the Additional Restrictions Period. We may terminate the Additional Restrictions Period prior toDecember 31, 2022 by achieving compliance with the Senior Secured Leverage Ratio covenant as of the end of a fiscal quarter without giving effect to Deemed EBITDA Quarters for any fiscal quarter. We were in compliance with the applicable financial covenants under our credit agreement during 2021. Our fixed rate note agreements include Restricted Payment provisions, which could limit our ability to pay partnership distributions. Pursuant to the terms of the indenture governing the 2027 senior notes, which includes the most restrictive of these Restricted Payments provisions under our fixed rate note agreements, if our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio is greater than 5.25x, we can still make Restricted Payments of$100 million annually so long as no default or event of default has occurred and is continuing. If our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio is less than or equal to 5.25x, we can make Restricted Payments up to our Restricted Payment pool. Our pro forma Total-Indebtedness-to-Consolidated-Cash-Flow Ratio was greater than 5.25x as ofDecember 31, 2021 .
If market conditions warrant, we may from time to time repurchase our outstanding debt securities, in privately negotiated transactions or on the open market, by take-over bid, exchange offer or otherwise. .
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Table of Contents Financial and Non-Financial Disclosure About the Issuers and Guarantors of Our Registered Senior Notes
As discussed within the Long-Term Debt footnote at Note 8 , we had four tranches of fixed rate senior notes outstanding atDecember 31, 2021 : the 2025, 2027, 2028 and 2029 senior notes. The 2024 senior notes were fully redeemed onDecember 17, 2021 . The 2024, 2027, 2028 and 2029 senior notes (the "registered senior notes") were 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"), andMagnum Management Corporation ("Magnum") were the co-issuers of the 2024 senior notes.Cedar Fair, L.P. ,Cedar Canada , Magnum, andMillennium 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 ofCedar Fair (other than the co-issuers) that guarantees our credit facilities under our 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 2027, 2028 and 2029 senior notes each rank equally in right of payment with all of each issuer's existing and future senior unsecured debt, including the other registered senior notes. However, the 2027, 2028 and 2029 senior notes rank effectively junior to our secured debt under the 2017 Credit Agreement, as amended, and the 2025 senior notes to the extent of the value of the assets securing such debt. In the event that the co-issuers (except forCedar Fair, L.P. ) or any subsidiary guarantor is released from its obligations under our senior secured credit facilities (or the 2017 Credit Agreement, as amended), such entity will also be released from its obligations under the registered senior notes. In addition, the co-issuers (except forCedar Fair, L.P. ) or any subsidiary guarantor can be released from its obligations under the 2027, 2028 and 2029 senior notes under the following circumstances, assuming the associated transactions are in compliance with the applicable provisions of the indentures governing the 2027, 2028 and 2029 senior notes: i) any direct or indirect sale, conveyance or other disposition of the capital stock of such entity following which the entity ceases to be a direct or indirect subsidiary ofCedar 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 be a direct or indirect Restricted Subsidiary ofCedar 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 depending 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 2024, 2027, 2028 and 2029 senior notes (the "Obligor Group "). We presented each entity that is or was a co-issuer of any series of the registered senior notes separately. The subsidiaries that guarantee the 2027, 2028 and 2029 senior notes are presented on a combined basis with intercompany balances and transactions between entities in such guarantor subsidiary group eliminated. Intercompany balances and transactions between the co-issuers and guarantor subsidiaries have not been eliminated. The subsidiaries that guaranteed the 2024 senior notes included the guarantor subsidiary group, as well as Millennium. Millennium is a co-issuer under the 2027, 2028 and 2029 senior notes and was a guarantor under the 2024 senior notes. Certain subsidiaries ofCedar Fair did not guarantee our credit facilities or senior notes as the assets and results of operations of these subsidiaries were immaterial (the "non-guarantor" subsidiaries). The summarized financial information excludes results of the non-guarantor subsidiaries and does not reflect investments of theObligor Group in the non-guarantor subsidiaries.The Obligor Group's amounts due from, amounts due to, and transactions with the non-guarantor subsidiaries have not been eliminated and included intercompany receivables from non-guarantors of$14.0 million and$11.5 million as ofDecember 31, 2021 andDecember 31, 2020 , respectively. 30 --------------------------------------------------------------------------------
Table of Contents
Summarized Financial
Information Millennium
(Co-Issuer
Magnum Cedar Canada 2027, 2028 &
Cedar Fair L.P. (Co-Issuer (Co-Issuer 2029 Guarantor
(In thousands) (Parent) Subsidiary) Subsidiary) Guarantor 2024) Subsidiaries (1)
Balance as of December 31, 2021
Current Assets $ 517 $ 97,221 $ 96,042 $ 572,865 $ 1,187,211
Non-Current Assets (138,126) 1,647,952 540,332 2,368,737 2,145,307
Current Liabilities 410,779 1,331,130 29,050 227,483 58,949
Non-Current Liabilities 147,021 21,274 24,043 2,385,100 97,803
Balance as of December 31, 2020
Current Assets $ 421 $ 33,985 $ 44,465 $ 464,779 $ 1,044,779
Non-Current Assets (30,651) 995,507 528,281 2,311,502 1,820,745
Current Liabilities 488,799 573,244 18,235 200,107 40,412
Non-Current Liabilities 146,106 44,778 461,903 2,370,939 91,835
Summarized Statement of
Operations
Millennium
Magnum Cedar Canada (Co-Issuer 2027 Guarantor
Cedar Fair (Co-Issuer (Co-Issuer & 2029 Subsidiaries
(In thousands) L.P. (Parent) Subsidiary) Subsidiary) Guarantor 2024) (1)
Year Ended December 31, 2021
Net revenues $ 35,908 $ 363,340 $ 75,353 $ 1,449,022 $ 344,778
Operating income (loss) 31,808 (156,079) 12,545 136,844 124,405
Net (loss) income (46,741) (34,647) 1,967 - 62,586
Year Ended December 31, 2020
Net revenues $ - $ 102 $ 440 $ 510,077 $ 150,439
Operating (loss) income (198,769) (322,420) (37,655) 109,688 (121,437)
Net loss (588,690) (359,984) (54,046) - (149,704)
(1) With respect to the 2024 senior notes, if the financial information
presented for Millennium was combined with that of the other guarantor
subsidiaries that have been presented on a combined basis, the following
additional intercompany balances and transactions between Millennium and such
other guarantor entities would be eliminated: Current Assets and Current
Liabilities - $13.4 million as of December 31, 2021 and $12.7 million as of
December 31, 2020 ; Non-Current Assets - $2,254.9 million as of December 31, 2021
and $2,201.8 million as of December 31, 2020 ; and Net revenues - $126.6 million
as of December 31, 2021 and $130.3 million as of December 31, 2020 . Combined
amounts for all guarantors of the 2024 senior notes for all other line items
within the table would be computed by adding the amounts in the Millennium and
Guarantor Subsidiaries columns.
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Contents
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