CEDAR FAIR L P [FUN] Filings

10-Q 1 fun-20220626.htm 10-Q fun-20220626

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 26, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 1-9444

CEDAR FAIR, L.P.

(Exact name of registrant as specified in its charter)


Delaware						34-1560655
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

One Cedar Point Drive, Sandusky, Ohio 44870-5259

(Address of principal executive offices) (Zip Code)

(419) 626-0830

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Depositary Units (Representing Limited Partner Interests)	FUN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.


Title of Class						Units Outstanding as of July 29, 2022
Depositary Units (Representing Limited Partner Interests)						57,039,740

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CEDAR FAIR, L.P.

FORM 10-Q CONTENTS

Part I - Financial Information

Item 1.

Financial Statements

Index for Notes to Unaudited Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Part II - Other Information

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CEDAR FAIR, L.P.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)


	June 26, 2022		December 31, 2021		June 27, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	124,929	$	61,119	$	292,596
Receivables	101,449		62,109		52,259
Inventories	56,608		32,113		46,983

Current income tax receivable	2,526		84,051		91,608
Land held for sale	150,595		—		—
Other current assets	40,268		24,249		40,298
	476,375		263,641		523,744
Property and Equipment:
Land	291,166		443,190		445,274
Land improvements	490,191		486,014		485,242
Buildings	913,699		855,297		857,452
Rides and equipment	2,025,153		1,986,235		2,001,500
Construction in progress	44,637		57,666		41,078
	3,764,846		3,828,402		3,830,546
Less accumulated depreciation	(2,164,908)		(2,117,659)		(2,028,345)
	1,599,938		1,710,743		1,802,201
Goodwill	265,988		267,232		269,193
Other Intangibles, net	49,702		49,994		50,751
Right-of-Use Asset	17,818		16,294		13,520
Other Assets	7,176		5,116		4,824
	$	2,416,997	$	2,313,020	$	2,664,233
LIABILITIES AND PARTNERS’ EQUITY
Current Liabilities:

Accounts payable	$	80,948	$	53,912	$	51,452
Deferred revenue	297,930		187,599		275,506
Accrued interest	31,374		32,011		34,402
Accrued taxes	17,734		9,075		13,002
Accrued salaries, wages and benefits	30,358		53,833		28,344
Self-insurance reserves	24,662		24,573		22,336
Other accrued liabilities	26,388		20,511		17,913
	509,394		381,514		442,955
Deferred Tax Liability	62,956		66,483		38,488
Derivative Liability	—		20,086		31,690
Lease Liability	14,548		13,345		10,620

Other Liabilities	9,847		11,144		21,325
Long-Term Debt:
Revolving credit loans	90,000		—		—
Term debt	190,920		258,391		256,713
Notes	2,265,114		2,260,545		2,704,002
	2,546,034		2,518,936		2,960,715
Partners’ Deficit
Special L.P. interests	5,290		5,290		5,290
General partner	(7)		(7)		(9)
Limited partners, 57,040, 56,854 and 56,829 units outstanding as of June 26, 2022, December 31, 2021 and June 27, 2021, respectively	(745,680)		(712,714)		(840,663)
Accumulated other comprehensive income (loss)	14,615		8,943		(6,178)
	(725,782)		(698,488)		(841,560)
	$	2,416,997	$	2,313,020	$	2,664,233

The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

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CEDAR FAIR, L.P.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per unit amounts)


	Three months ended				Six months ended
	June 26, 2022		June 27, 2021		June 26, 2022		June 27, 2021
Net revenues:
Admissions	$	253,494	$	99,072	$	302,930	$	99,072
Food, merchandise and games	177,153		83,945		213,868		91,191
Accommodations, extra-charge products and other	78,844		41,120		91,528		43,616
	509,491		224,137		608,326		233,879
Costs and expenses:
Cost of food, merchandise, and games revenues	49,162		23,630		59,986		25,936
Operating expenses	232,421		155,945		352,271		222,099
Selling, general and administrative	65,601		47,066		106,387		77,416
Depreciation and amortization	49,037		33,992		58,636		35,445
Loss on impairment / retirement of fixed assets, net	1,199		1,937		2,747		3,476

Gain on sale of investment	—		—		—		(2)
	397,420		262,570		580,027		364,370
Operating income (loss)	112,071		(38,433)		28,299		(130,491)
Interest expense	40,214		46,005		78,337		90,101
Net effect of swaps	(7,739)		(3,834)		(21,941)		(7,396)
Loss on early debt extinguishment	—		—		—		4
Loss (gain) on foreign currency	9,845		(11,099)		9,860		(16,904)
Other income	(394)		(27)		(443)		(105)
Income (loss) before taxes	70,145		(69,478)		(37,514)		(196,191)
Provision (benefit) for taxes	19,373		(10,608)		223		(26,905)
Net income (loss)	50,772		(58,870)		(37,737)		(169,286)
Net income (loss) allocated to general partner	1		(1)		—		(2)
Net income (loss) allocated to limited partners	$	50,771	$	(58,869)	$	(37,737)	$	(169,284)

Net income (loss)	$	50,772	$	(58,870)	$	(37,737)	$	(169,286)
Other comprehensive income (loss), (net of tax):
Foreign currency translation adjustment	2,819		(5,686)		5,672		(8,777)

Other comprehensive income (loss), (net of tax)	2,819		(5,686)		5,672		(8,777)
Total comprehensive income (loss)	$	53,591	$	(64,556)	$	(32,065)	$	(178,063)
Basic income (loss) per limited partner unit:
Weighted average limited partner units outstanding	56,760		56,622		56,720		56,588
Net income (loss) per limited partner unit	$	0.89	$	(1.04)	$	(0.67)	$	(2.99)
Diluted income (loss) per limited partner unit:
Weighted average limited partner units outstanding	57,127		56,622		56,720		56,588
Net income (loss) per limited partner unit	$	0.89	$	(1.04)	$	(0.67)	$	(2.99)

The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

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CEDAR FAIR, L.P.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS’ DEFICIT

(In thousands)


For the three months ended	Limited Partnership Units Outstanding	Limited Partners’ Deficit		General Partner’s Deficit		Special L.P. Interests		Accumulated Other Comprehensive Income (Loss)		Total Partners’ Deficit
Balance as of March 28, 2021	56,828	$	(785,400)	$	(8)	$	5,290	$	(492)	$	(780,610)
Net loss	—	(58,869)		(1)		—		—		(58,870)

Limited partnership units related to equity-based compensation	1	3,619		—		—		—		3,619
Tax effect of units involved in treasury unit transactions	—	(13)		—		—		—		(13)
Foreign currency translation adjustment, net of tax $(801)	—	—		—		—		(5,686)		(5,686)


Balance as of June 27, 2021	56,829	$	(840,663)	$	(9)	$	5,290	$	(6,178)	$	(841,560)

Balance as of March 27, 2022	57,042	$	(804,659)	$	(8)	$	5,290	$	11,796	$	(787,581)
Net income	—	50,771		1		—		—		50,772

Limited partnership units related to equity-based compensation	(2)	8,218		—		—		—		8,218
Tax effect of units involved in treasury unit transactions	—	(10)		—		—		—		(10)
Foreign currency translation adjustment, net of tax $982	—	—		—		—		2,819		2,819


Balance as of June 26, 2022	57,040	$	(745,680)	$	(7)	$	5,290	$	14,615	$	(725,782)

For the six months ended	Limited Partnership Units Outstanding	Limited Partners’ Deficit		General Partner’s Deficit		Special L.P. Interests		Accumulated Other Comprehensive Income (Loss)		Total Partners’ Deficit
Balance as of December 31, 2020	56,706	$	(674,319)	$	(7)	$	5,290	$	2,599	$	(666,437)
Net loss	—	(169,284)		(2)		—		—		(169,286)

Limited partnership units related to equity-based compensation	123	4,501		—		—		—		4,501
Tax effect of units involved in treasury unit transactions	—	(1,561)		—		—		—		(1,561)
Foreign currency translation adjustment, net of tax $(1,228)	—	—		—		—		(8,777)		(8,777)


Balance as of June 27, 2021	56,829	$	(840,663)	$	(9)	$	5,290	$	(6,178)	$	(841,560)

Balance as of December 31, 2021	56,854	$	(712,714)	$	(7)	$	5,290	$	8,943	$	(698,488)
Net loss	—	(37,737)		—		—		—		(37,737)

Limited partnership units related to equity-based compensation	186	6,760		—		—		—		6,760
Tax effect of units involved in treasury unit transactions	—	(1,989)		—		—		—		(1,989)
Foreign currency translation adjustment, net of tax $557	—	—		—		—		5,672		5,672


Balance as of June 26, 2022	57,040	$	(745,680)	$	(7)	$	5,290	$	14,615	$	(725,782)

The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.

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CEDAR FAIR, L.P.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Six months ended
	June 26, 2022		June 27, 2021
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES
Net loss	$	(37,737)	$	(169,286)
Adjustments to reconcile net loss to net cash from (for) operating activities:
Depreciation and amortization	58,636		35,445
Loss on early debt extinguishment	—		4

Non-cash foreign currency gain on debt	—		(15,777)
Non-cash equity based compensation expense	11,883		9,007
Non-cash deferred income tax benefit	(2,732)		(2,495)
Net effect of swaps	(21,941)		(7,396)
Other non-cash expenses	17,545		7,330
Changes in assets and liabilities:
(Increase) decrease in receivables	(39,442)		(17,723)
(Increase) decrease in inventories	(24,573)		677
(Increase) decrease in tax receivable/accrual	90,123		(19,785)
(Increase) decrease in other assets	(16,245)		(14,034)
Increase (decrease) in accounts payable	19,722		33,384
Increase (decrease) in deferred revenue	109,627		97,157
Increase (decrease) in accrued interest	(637)		617
Increase (decrease) in accrued salaries, wages and benefits	(23,428)		3,334
Increase (decrease) in other liabilities	5,447		6,560
Net cash from (for) operating activities	146,248		(52,981)
CASH FLOWS FOR INVESTING ACTIVITIES
Capital expenditures	(95,790)		(25,491)

Proceeds from sale of investment	—		1,405

Net cash for investing activities	(95,790)		(24,086)
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES
Net borrowings on revolving credit loans	90,000		—


Term debt payments	(69,000)		—


Payment of debt issuance costs	—		(77)
Payments related to tax withholding for equity compensation	(5,126)		(4,507)
Other	(1,987)		(1,563)
Net cash from (for) financing activities	13,887		(6,147)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(535)		(926)
CASH AND CASH EQUIVALENTS
Net increase (decrease) for the period	63,810		(84,140)
Balance, beginning of period	61,119		376,736
Balance, end of period	$	124,929	$	292,596
SUPPLEMENTAL INFORMATION
Cash payments for interest expense	$	74,345	$	83,937
Interest capitalized	1,468		1,150
Net cash refunds for income taxes	(78,931)		(10)
Capital expenditures in accounts payable	14,715		8,302

The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

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CEDAR FAIR, L.P.

INDEX FOR NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1	Description of the Business and Significant Accounting Policies	8
Note 2	Interim Reporting	9
Note 3	Revenue Recognition	9
Note 4	Long-Lived Assets	10
Note 5	Goodwill and Other Intangible Assets	11
Note 6	Long-Term Debt	12
Note 7	Derivative Financial Instruments	13
Note 8	Fair Value Measurements	14
Note 9	Income (Loss) per Unit	14
Note 10	Income and Partnership Taxes	15
Note 11	Subsequent Events	15

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CEDAR FAIR, L.P.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have been prepared from the financial records of Cedar Fair, L.P. (the "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 our amusement and water park operations, the results for any interim period may not be indicative of the results expected for the full fiscal year.

(1) Description of the Business and Significant Accounting Policies:

Impact of COVID-19 Pandemic

The novel coronavirus (COVID-19) pandemic had a material impact on our business in 2020, had a continuing negative impact in 2021 and may have a longer-term negative effect. On March 14, 2020, we closed our properties in response to the spread of COVID-19 and local government mandates. We ultimately resumed only partial operations at 10 of our 13 properties in 2020. Due to soft demand trends upon reopening in 2020, park operating calendars were adjusted, including reduced operating days per week and operating hours within each operating day and earlier closure of certain parks than a typical operating year. Following March 14, 2020, Knott's Berry Farm's partial operations in 2020 were limited to culinary festivals.

In May 2021, we opened all of our U.S. properties for the 2021 operating season on a staggered basis with capacity restrictions, guest reservations, and other operating protocols in place. Our 2021 operating calendars were designed to align with anticipated capacity restrictions, guest demand and labor availability, including fewer operating days in July and August at some of our smaller properties and additional operating days in September and the fourth quarter at most of our properties. As vaccination distribution efforts continued during the second quarter of 2021 and we were able to hire additional labor, we removed most capacity restrictions, guest reservation requirements and other protocols at our U.S. properties beginning in July 2021. We were also able to open our Canadian property, Canada's Wonderland, in July 2021. Canada's Wonderland operated with capacity restrictions, guest reservations, and other operating protocols in place throughout 2021.

During the second quarter of 2022, all of our properties had opened for the 2022 operating season without restrictions as planned. We currently anticipate maintaining full park operating calendars for the 2022 operating season at all of our parks. However, we have and may continue to adjust future park operating calendars as we respond to changes in guest demand, labor availability and any federal, provincial, 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. Furthermore, management has made significant estimates and assumptions to estimate the impact of the COVID-19 pandemic on our business, including financial results in the near and long-term. Actual results could materially differ from these estimates depending on the ultimate extent of the effects of the COVID-19 pandemic.

Significant Accounting Policies

Except for the changes described below, our unaudited condensed consolidated financial statements included in this Form 10-Q report have been prepared in accordance with the accounting policies described in the Notes to Consolidated Financial Statements for the year ended December 31, 2021, which were included in the Form 10-K filed on February 18, 2022. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission"). These financial statements should be read in conjunction with the financial statements and the notes included in the Form 10-K referred to above.

New Accounting Pronouncements

In March 2020, the FASB issued Accounting Standards Update No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022. In January 2021, the FASB amended ASU 2020-04 by issuing Accounting Standards Update No. 2021-01, Reference Rate Reform Scope ("ASU 2021-01"). ASU 2021-01 clarifies the scope of optional expedients and exceptions to derivatives that are affected by the discounting transition. We are in the process of evaluating the effect these standards will have on the unaudited condensed consolidated financial statements and related disclosures.

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(2) Interim Reporting:

We are one of the largest regional amusement park operators in the world with 13 properties in our portfolio consisting of amusement parks, water parks and complementary resort facilities. Our parks operate seasonally except for Knott's Berry Farm, which is typically open daily on a year-round basis. Our seasonal parks are generally open during weekends beginning in March, April or May, and then daily from Memorial Day until Labor Day. After Labor Day, our seasonal parks are open during select weekends in September and, in most cases, in the fourth quarter for Halloween and winter events. As a result, a substantial portion of our revenues from these seasonal parks typically are generated during an approximate 130- to 140-day operating season with the major portion concentrated in the third quarter during the peak vacation months of July and August. COVID-19 impacted our parks' operating calendars in 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, we have adopted the following accounting procedures: (a) revenues from multi-use products are recognized over the estimated number of uses expected for each type of product; and 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; (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; 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.

(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				Six months ended
(In thousands)	June 26, 2022		June 27, 2021		June 26, 2022		June 27, 2021
In-park revenues	$	466,987	$	190,666	$	552,523	$	190,666
Out-of-park revenues	59,622		40,833		76,114		50,980
Concessionaire remittance	(17,118)		(7,362)		(20,311)		(7,767)
Net revenues	$	509,491	$	224,137	$	608,326	$	233,879

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. The extended validity of the 2020 season-long products resulted in a significant amount of revenue deferred from 2020 into 2021. All 2020 and 2021 season-long product revenue had been recognized as of December 31, 2021 except for season-long product extensions into 2022 at two parks. In the first quarter of 2021, Knott's Berry Farm offered a further day-for-day extension into calendar year 2022 for 2020 and 2021 season-long products for every day the park was closed in 2021. The extension for the 2020 and 2021 season-long products at Knott's Berry Farm concluded during the second quarter of 2022 and all related revenue had been recognized. In the second quarter of 2021, Canada's Wonderland extended its 2020 and 2021 season-long products through September 5, 2022. All Canada's Wonderland 2020 and 2021 season-long product revenue is expected to be recognized by the

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third quarter of 2022. No other parks offered similar plans. As of June 27, 2021, we classified $5.8 million of deferred revenue as non-current due to the Canada's Wonderland extension.

In order to calculate revenue recognized on these extended season-long products, management made significant estimates regarding the estimated number of uses expected for these season-long products for admission, dining, beverage and other products, including during interim periods.

Of the $187.6 million of current deferred revenue recorded as of January 1, 2022, 91% was related to season-long products. The remainder was related to deferred online transaction fees charged to customers, advanced ticket sales, prepaid games cards, advanced resort reservations, marina deposits and other deferred revenue. Approximately $84 million of the current deferred revenue balance as of January 1, 2022 was recognized during the six months ended June 26, 2022. As of January 1, 2022 and June 26, 2022, we also had recorded $10.0 million and $8.7 million, respectively, of non-current deferred revenue which largely represented prepaid lease payments for a portion of the California's Great America parking lot. The prepaid lease payments are being recognized through 2027 following the sale of the land under California's Great America; see Note 11. Prior to the sale, the prepaid lease payments were being recognized through 2039.

Payment is due immediately on the transaction date for most products. Our receivable balance includes outstanding amounts on installment purchase plans which are offered for season-long products, and includes sales to retailers, group sales and catering activities which are billed. Installment purchase plans vary in length from three monthly installments to 12 monthly installments. Payment terms for billings are typically net 30 days. Receivables in a typical operating year are highest in the peak summer months and lowest in the winter months. We are not exposed to a significant concentration of customer credit risk. As of June 26, 2022, December 31, 2021 and June 27, 2021, we recorded a $13.6 million, $5.7 million and $10.8 million allowance for doubtful accounts, respectively, representing estimated defaults on installment purchase plans. The default estimate is calculated using historical default rates adjusted for current period trends. The allowance for doubtful accounts is recorded as a reduction of deferred revenue to the 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. All 2020 and 2021 installment plans had concluded as of December 31, 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 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. 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 unaudited condensed consolidated financial statements.

As of June 26, 2022, we classified the land at California's Great America totaling $150.6 million as held for sale within the unaudited condensed consolidated balance sheet. We completed a sale of the land on June 27, 2022; see Note 11. Concurrently with the sale, we entered into a lease contract that allows us to operate the park during a six-year term with an option to extend the term for an additional five years. Upon termination of the lease, we will remove the rides and attractions from the land. As a result, during the second quarter of 2022, we changed the estimated useful lives of the remaining property and equipment at California's Great America to an approximate 5.5-year period, or through December 31, 2027. We expect this to result in an approximate $8 million increase in annual depreciation expense over the 5.5-year period. We may dispose of the remaining property and equipment at California's Great America significantly before the end of their previously estimated useful lives if the assets are not sold to a third party or transferred for an alternate use. As a result, we also tested the long-lived assets at California's Great America for impairment, which resulted in no impairment. The fair value of the long-lived assets was determined using a replacement cost approach.

We concluded no other indicators of impairment existed during the first six months of 2022 and 2021, respectively. We based our conclusions on our financial performance projections, as well as an updated analysis of macroeconomic and industry-specific conditions.

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(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 second quarter of 2022, we concluded the useful life of the trade name, California's Great America, was no longer indefinite due to the anticipated sale of the land and the eventual disposal of the remaining assets; see Note 11. As a result, we tested the California's Great America trade name totaling $0.7 million for impairment resulting in no impairment charges. The fair value of the trade name was calculated using a relief-from-royalty model. We began amortizing the trade name over an approximate 5.5-year period, or through December 31, 2027, during the second quarter of 2022.

Changes in the carrying value of goodwill for the six months ended June 26, 2022 and June 27, 2021 were:


(In thousands)	Goodwill
Balance as of December 31, 2021	$	267,232

Foreign currency translation	(1,244)
Balance as of June 26, 2022	$	265,988

Balance as of December 31, 2020	$	266,961

Foreign currency translation	2,232
Balance as of June 27, 2021	$	269,193

As of June 26, 2022, December 31, 2021, and June 27, 2021, other intangible assets consisted of the following:


(In thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
June 26, 2022
Other intangible assets:
Trade names	$	49,238	$	—	$	49,238
License / franchise agreements	4,295		(3,831)		464
Total other intangible assets	$	53,533	$	(3,831)	$	49,702

December 31, 2021
Other intangible assets:
Trade names	$	49,515	$	—	$	49,515
License / franchise agreements	4,262		(3,783)		479
Total other intangible assets	$	53,777	$	(3,783)	$	49,994

June 27, 2021
Other intangible assets:
Trade names	$	49,951	$	—	$	49,951
License / franchise agreements	4,263		(3,463)		800
Total other intangible assets	$	54,214	$	(3,463)	$	50,751

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(6) Long-Term Debt:

Long-term debt as of June 26, 2022, December 31, 2021, and June 27, 2021 consisted of the following:


(In thousands)	June 26, 2022		December 31, 2021		June 27, 2021

Revolving credit facility	$	90,000	$	—	$	—
U.S. term loan averaging 2.19% YTD 2022; 1.85% in 2021; 1.87% YTD 2021 (1)	195,250		264,250		264,250
Notes
2024 U.S. fixed rate senior unsecured notes at 5.375%	—		—		450,000
2025 U.S. fixed rate senior secured notes at 5.500%	1,000,000		1,000,000		1,000,000
2027 U.S. fixed rate senior unsecured notes at 5.375%	500,000		500,000		500,000
2028 U.S. fixed rate senior unsecured notes at 6.500%	300,000		300,000		300,000
2029 U.S. fixed rate senior unsecured notes at 5.250%	500,000		500,000		500,000
	2,585,250		2,564,250		3,014,250
Less current portion	—		—		—
	2,585,250		2,564,250		3,014,250
Less debt issuance costs and original issue discount	(39,216)		(45,314)		(53,535)
	$	2,546,034	$	2,518,936	$	2,960,715

(1) The average interest rates do not reflect the effect of interest rate swap agreements (see Note 7).

Term Debt and Revolving Credit Facilities

In April 2017, we amended and restated our credit agreement (the "2017 Credit Agreement") which includes our senior secured term loan facility and senior secured revolving credit facility. The $750 million senior secured term loan facility under the 2017 Credit Agreement matures on April 15, 2024 and, following an amendment in March 2018, bears interest at London InterBank Offered Rate ("LIBOR") plus 175 basis points (bps). The pricing terms for the March 2018 amendment reflected $0.9 million of Original Issue Discount ("OID"). In April 2020, as a result of the anticipated effects of the COVID-19 pandemic, we further amended the 2017 Credit Agreement (the "Second Amendment") to suspend and revise certain financial covenants, and to adjust the interest rate on and reflect additional commitments and capacity for our revolving credit facility. In conjunction with the Second Amendment, we prepaid $463.3 million of our outstanding senior secured term loan facility. Following the prepayment, we do not have any remaining scheduled quarterly payments required on our senior secured term loan facility. During the second quarter of 2022, we made a $69.0 million payment on our outstanding senior secured term loan facility which was required pursuant to certain loan covenants. In September 2020, in response to the continuing effects of the COVID-19 pandemic, we further amended the 2017 Credit Agreement (the "Third Amendment") to further suspend and revise certain of the financial covenants and extend the maturity of and adjust the terms that apply to a portion of our senior secured revolving credit facility. We also amended the 2017 Credit Agreement in December 2021 to allow for the redemption of the 2024 senior notes and in February 2022 to allow for larger sale and leaseback transactions. The facilities provided under the 2017 Credit Agreement, as amended, are collateralized by substantially all of the assets of the Partnership.

As of June 26, 2022, our total senior secured revolving credit facility capacity under the 2017 Credit Agreement, as amended, was $300 million with a Canadian sub-limit of $15 million. The senior secured revolving credit facility bears interest at LIBOR plus 350 bps or Canadian Dollar Offered Rate ("CDOR") plus 250 bps, requires the payment of a 62.5 bps commitment fee per annum on the unused portion of the revolving credit facility, in each case without any step-downs, and matures in December 2023. In April 2022, $75 million of the senior secured revolving credit facility capacity under the 2017 Credit Agreement matured, and the outstanding borrowings were repaid. While such $75 million of senior secured revolving credit facility capacity was available, borrowings under this portion of the revolver capacity bore interest at LIBOR plus 300 bps or CDOR plus 200 bps, and the unused portion of this revolving credit facility capacity required the payment of a 37.5 bps commitment fee per annum. The 2017 Credit Agreement, as amended, also provides for the issuance of documentary and standby letters of credit. After outstanding borrowings of $90.0 million and letters of credit of $15.8 million, we had $194.2 million of available borrowings under our revolving credit facility as of June 26, 2022.

Notes

In April 2020, as a result of the anticipated effects of the COVID-19 pandemic and in connection with the Second Amendment, we issued $1.0 billion of 5.500% senior secured notes due 2025 ("2025 senior notes") in a private placement. The 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. The net proceeds from the offering of the 2025 senior notes were used to repay $463.3 million of our then-outstanding senior secured term loan facility. The remaining amount was for general corporate and working capital purposes, including fees and expenses related to the transaction. The 2025 senior notes pay interest semi-annually in May and November, with the principal due in full on May 1, 2025. The 2025 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed.

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In June 2014, we issued $450 million of 5.375% senior unsecured notes due 2024 ("2024 senior notes"). The 2024 senior notes paid interest semi-annually in June and December, with the principal due in full on June 1, 2024. On December 17, 2021, we redeemed all of the 2024 senior notes at a redemption price equal to 100.896% of the principal amount plus accrued and unpaid interest. As a result, we recognized a $5.9 million loss on early debt extinguishment during the fourth quarter of 2021, inclusive of debt premium payments of $4.1 million and the write-off of debt issuance costs of $1.8 million.

In April 2017, we issued $500 million of 5.375% senior unsecured notes due 2027 ("2027 senior notes"). The 2027 senior notes pay interest semi-annually in April and October, with the principal due in full on April 15, 2027. The 2027 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed.

In June 2019, we issued $500 million of 5.250% senior unsecured notes due 2029 ("2029 senior notes"). The 2029 senior notes pay interest semi-annually in January and July, with the principal due in full on July 15, 2029. The 2029 senior notes may be redeemed, in whole or in part, at any time prior to July 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.

In October 2020, in response to the continuing effects of the COVID-19 pandemic, we issued $300 million of 6.500% senior unsecured notes due 2028 ("2028 senior notes"). The net proceeds from the offering of the 2028 senior notes were for general corporate and working capital purposes, including fees and expenses related to the transaction. The 2028 senior notes pay interest semi-annually in April and October with the principal due in full on October 1, 2028. 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, if any. The 2028 senior notes may be redeemed, in whole or in part, at any time prior to October 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.

As market conditions warrant, we may from time to time repurchase our outstanding debt securities in privately negotiated or open market transactions, by tender offer, exchange offer or otherwise.

Covenants

The 2017 Credit Agreement, as amended, includes a Senior Secured Leverage Ratio of 4.50x Total First Lien Senior Secured Debt-to-Consolidated EBITDA, 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. The 2017 Credit Agreement, as amended, included an Additional Restrictions Period to provide further covenant relief during the COVID-19 pandemic. We terminated the Additional Restrictions Period during the first quarter of 2022 by achieving compliance with the Senior Secured Leverage Ratio covenant as of the end of the fourth quarter of 2021. We were in compliance with the applicable financial covenants under our credit agreement during the six months ended June 26, 2022.

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 less than 5.25x as of June 26, 2022.

(7) Derivative Financial Instruments:

Derivative financial instruments are used within our overall risk management program to manage certain interest rate and foreign currency risks. By utilizing a derivative instrument to hedge exposure to LIBOR rate changes, we are exposed to counterparty credit risk, in particular the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, hedging instruments are placed with a counterparty that we believe poses minimal credit risk. We do not use derivative financial instruments for trading purposes.

We have 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% through December 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 the interest rate swap agreements are designated as hedging instruments. The fair value of our swap portfolio, including the location within the unaudited condensed consolidated balance sheets, for the periods presented were as follows:

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(In thousands)	Balance Sheet Location	June 26, 2022		December 31, 2021		June 27, 2021
Derivatives not designated as hedging instruments:

Interest Rate Swaps	Other Assets (Derivative Liability)	$	1,855	$	(20,086)	$	(31,690)

Instruments that do not qualify for hedge accounting are adjusted to fair value each reporting period through "Net effect of swaps" within the unaudited condensed consolidated statements of operations and comprehensive income (loss).

(8) Fair Value Measurements:

The table below presents the balances of assets and liabilities measured at fair value as of June 26, 2022, December 31, 2021, and June 27, 2021 on a recurring basis as well as the fair values of other financial instruments, including their locations within the unaudited condensed consolidated balance sheets:


(In thousands)	Balance Sheet Location	Fair Value Hierarchy Level	June 26, 2022				December 31, 2021				June 27, 2021
(In thousands)	Balance Sheet Location	Fair Value Hierarchy Level	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets (liabilities) measured on a recurring basis:
Short-term investments	Other current assets	Level 1	$	333	$	333	$	478	$	478	$	361	$	361
Interest rate swaps	Other Assets (Derivative Liability)	Level 2	$	1,855	$	1,855	$	(20,086)	$	(20,086)	$	(31,690)	$	(31,690)
Other financial assets (liabilities):
Term debt	Long-Term Debt (1)	Level 2	$	(195,250)	$	(187,928)	$	(264,250)	$	(257,644)	$	(264,250)	$	(258,965)
2024 senior notes	Long-Term Debt (1)	Level 1	—		—		—		—		$	(450,000)	$	(453,938)
2025 senior notes	Long-Term Debt (1)	Level 2	$	(1,000,000)	$	(975,000)	$	(1,000,000)	$	(1,035,000)	$	(1,000,000)	$	(1,041,250)
2027 senior notes	Long-Term Debt (1)	Level 1	$	(500,000)	$	(467,500)	$	(500,000)	$	(513,750)	$	(500,000)	$	(516,250)
2028 senior notes	Long-Term Debt (1)	Level 1	$	(300,000)	$	(288,000)	$	(300,000)	$	(319,125)	$	(300,000)	$	(324,000)
2029 senior notes	Long-Term Debt (1)	Level 1	$	(500,000)	$	(446,250)	$	(500,000)	$	(513,750)	$	(500,000)	$	(515,000)

(1)Carrying values of long-term debt balances are before reductions for debt issuance costs and original issue discount of $39.2 million, $45.3 million and $53.5 million as of June 26, 2022, December 31, 2021 and June 27, 2021, respectively.

Fair values of the interest rate swap agreements are determined using significant inputs, including the LIBOR forward curves, which are considered Level 2 observable market inputs.

The carrying value of cash and cash equivalents, revolving credit loans, accounts receivable, accounts payable, and accrued liabilities approximates fair value because of the short maturity of these instruments. There were no assets measured at fair value on a non-recurring basis as of June 26, 2022, December 31, 2021 or June 27, 2021.

(9) Income (Loss) per Unit:

Net income (loss) per limited partner unit was calculated based on the following unit amounts:


	Three months ended				Six months ended
(In thousands, except per unit amounts)	June 26, 2022		June 27, 2021		June 26, 2022		June 27, 2021
Basic weighted average units outstanding	56,760		56,622		56,720		56,588
Effect of dilutive units:
Deferred units	56		—		—		—

Restricted units	288		—		—		—
Unit options	23		—		—		—

Diluted weighted average units outstanding	57,127		56,622		56,720		56,588
Net income (loss) per unit - basic	$	0.89	$	(1.04)	$	(0.67)	$	(2.99)
Net income (loss) per unit - diluted	$	0.89	$	(1.04)	$	(0.67)	$	(2.99)

There were approximately 0.4 million potentially dilutive units excluded from the computation of diluted loss per limited partner unit for the three months ended June 27, 2021, as their effect would have been anti-dilutive due to the net loss in the period. There were approximately