Six Flags Entertainment CorporationNEW

Previous wording

The following discussion and analysis is intended to facilitate an understanding of Cedar Fair's business and results of operations and should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion should also be read in conjunction with Cedar Fair's consolidated financial statements and related notes thereto, and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Cedar Fair's Annual Report on Form 10-K for the year ended December 31, 2023. A discussion and analysis of Former Six Flags's business and results of operations can be found within the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of the Current Report on Form 8-K to be filed by the Combined Company concurrently with this Quarterly Report on Form 10-Q.

Current wording

The following discussion and analysis is intended to facilitate an understanding of the Combined Company's business and results of operations and should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion should also be read in conjunction with the Combined Company's consolidated financial statements and related notes thereto, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of Cedar Fair's Annual Report on Form 10-K for the year ended December 31, 2023.

Previous wording

On July 1, 2024, Six Flags Entertainment Corporation completed the previously announced merger of equals transaction contemplated by the Merger Agreement, by and among CopperSteel HoldCo, Inc., Cedar Fair, Former Six Flags and Copper Merger Sub. Upon the consummation of the Mergers, the separate legal existences of each of Copper Merger Sub, Cedar Fair and Former Six Flags ceased, and the Combined Company changed its name to “Six Flags Entertainment Corporation”. The Combined Company trades on the New York Stock Exchange under the ticker symbol "FUN". References to the "Partnership," "Cedar Fair," or "Former Cedar Fair" are to Cedar Fair prior to the Mergers, and references to the "Combined Company" are to Cedar Fair, Former Six Flags and Copper Merger Sub after giving effect to the Mergers. The Mergers were entered into to create a leading amusement park operator with an expanded and diversified property portfolio, improved guest experience utilizing the complementary operating capabilities of Cedar Fair and Former Six Flags, and the opportunity for accelerated investment in the Cedar Fair and Former Six Flags properties with the cash flows of the Combined Company.

Current wording

On July 1, 2024, the previously announced merger of equals transaction contemplated by the Merger Agreement, by and among CopperSteel HoldCo, Inc., Cedar Fair, Former Six Flags and Copper Merger Sub, was completed. Upon the consummation of the Mergers, the separate legal existences of each of Copper Merger Sub, Cedar Fair and Former Six Flags ceased, and the Combined Company changed its name to “Six Flags Entertainment Corporation”. The Combined Company trades on the New York Stock Exchange under the ticker symbol "FUN". References to the "Partnership," "Cedar Fair," or "Former Cedar Fair" are to Cedar Fair prior to the Mergers, and references to the "Combined Company" are to Cedar Fair, Former Six Flags and Copper Merger Sub after giving effect to the Mergers. The Mergers were entered into to create a leading amusement park operator with an expanded and diversified property portfolio, improved guest experience utilizing the complementary operating capabilities of Cedar Fair and Former Six Flags, and the opportunity for accelerated investment in the Cedar Fair and Former Six Flags properties with the cash flows of the Combined Company. For additional information, see the Explanatory Note in this Quarterly Report on Form 10-Q and Note 2.

Previous wording

The Combined Company generates revenues from sales of (1) admission to 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. The Combined Company's principal costs and expenses, which include salaries and wages, operating supplies, maintenance and advertising, are relatively fixed for a typical operating season and do not vary significantly with attendance.

Current wording

The Combined Company generates revenues from sales of (1) admission to 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. The Combined Company's principal costs and expenses, which include salaries and wages, operating supplies, maintenance, insurance and advertising, are relatively fixed for a typical operating season and do not vary significantly with attendance.

Previous wording

Each of the Cedar Fair parks are overseen by a general manager and operate autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including allocating resources, on a park-by-park basis. 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 of the parks. Cedar Fair operates within a single reportable segment of amusement/water parks with accompanying resort facilities. The Combined Company is expected to operate in a similar manner.

Current wording

Each of the parks are overseen by a general manager and operate autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including allocating resources, on a park-by-park basis. 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 of the parks. The Combined Company operates within a single reportable segment of amusement/water parks with accompanying resort facilities.

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon the unaudited condensed consolidated financial statements of Former Cedar Fair, which were prepared in accordance with accounting principles generally accepted in the United States of America. These principles require management to make judgments, estimates and assumptions during the normal course of business that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ significantly from those estimates under different assumptions and conditions.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon the unaudited condensed consolidated financial statements of the Combined Company, which were prepared in accordance with accounting principles generally accepted in the United States of America. These principles require management to make judgments, estimates and assumptions during the normal course of business that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ significantly from those estimates under different assumptions and conditions.

Previous wording

During the second quarter of 2024, there were no changes in the above critical accounting policies from those previously disclosed in Cedar Fair's Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

During the third quarter of 2024, the Mergers were completed (see Note 2). Therefore, Accounting for Business Combinations has been identified as a Critical Accounting Policy and included below. There were no other changes to the above critical accounting policies from those previously disclosed in Cedar Fair's Annual Report on Form 10-K for the year ended December 31, 2023.

Previous wording

The following operational measures are key performance metrics in Cedar Fair's managerial and operational reporting. They are used as major factors in significant operational decisions as they are primary drivers of financial and operational performance, measuring demand, pricing and consumer behavior. In-park revenues, in-park per capita spending and out-of-park revenues are non-GAAP measures.

Current wording

The following operational measures are key performance metrics in the Combined Company's managerial and operational reporting. They are used as major factors in significant operational decisions as they are primary drivers of financial and operational performance, measuring demand, pricing and consumer behavior. In-park revenues, in-park per capita spending and out-of-park revenues are non-GAAP measures.

Previous wording

In-park per capita spending is calculated as revenues generated within the amusement parks and separately gated outdoor water parks, along with related parking revenues (in-park revenues), divided by total attendance.

Current wording

In-park per capita spending is calculated as revenues generated within the amusement parks and separately gated outdoor water parks, along with related parking revenues and online transaction fees charged to customers (in-park revenues), divided by total attendance.

Previous wording

Out-of-park revenues are defined as revenues from resorts, out-of-park food and retail locations, online transaction fees charged to customers, sponsorships, and all other out-of-park operations.

Current wording

Out-of-park revenues are defined as revenues from resorts, out-of-park food and retail locations, sponsorships, international agreements and all other out-of-park operations.

Previous wording

Net revenues consist ofin-park revenues andout-of-park revenues less amounts remitted to outside third parties under concessionaire arrangements; see Note 3 for a reconciliation ofin-park revenues andout-of-park revenuesto net revenues.

Current wording

Net revenues consist ofin-park revenues andout-of-park revenues less amounts remitted to outside third parties under concessionaire arrangements; see Note 3 for a reconciliation ofin-park revenues andout-of-park revenuesto net revenues. Certain prior period amounts have been reclassified from out-of-park revenues to in-park revenues following completion of the Mergers (see Note 1. Reclassifications).

Previous wording

The current six-month period included 906 operating days compared with 897 operating days for the six-month period ended June 25, 2023. The current period included 102 additional operating days due to a fiscal calendar shift. As a result of the fiscal calendar shift, the current period included 26 weeks of results, while the prior period included 25 weeks of results. The additional operating days due to the calendar shift were largely offset by fewer planned early season operating days at some of Cedar Fair's seasonal parks. In particular, Carowinds, Kings Dominion and California's Great America were open additional days in January and February in the prior period that were not planned in the current period. Due to the variance in impact of early season operating days to peak season operating days and the additional week of results in the current period, a same-week analysis comparing the six months ended June 30, 2024 with the six months ended July 2, 2023 has been included.

Current wording

The current nine-month period included 3,491 operating days compared with 1,988 operating days for the nine-month period ended September 24, 2023, an increase of 1,503 operating days. There were 1,591 operating days in the third quarter of 2024 at Former Six Flags parks following the completion of the Mergers. There were also 31 additional operating days period over period at Former Cedar Fair parks due to the fiscal calendar shift. These increases were partially offset by 119 fewer operating days driven by fewer planned early season operating days at some of Former Cedar Fair's seasonal parks. In particular, Carowinds, Kings Dominion and California's Great America were open additional operating days in January and February in the prior period that were not planned in the current period.

Previous wording

The following table presents key financial information for Former Cedar Fair for the six months ended June 30, 2024 and June 25, 2023:

Current wording

The following table presents key financial information for the Combined Company for the nine months ended September 29, 2024 and September 24, 2023:

Previous wording

For the six months ended June 30, 2024, net revenues increased $87.7 million, or 15.0%, compared with the six months ended June 25, 2023. The increase in net revenues reflected the impact of a 1.5 million-visit, or 18.1%, increase in attendance and an 18.1%, or $14.8 million, increase in out-of-park revenues, partially offset by the impact of a 3.5% decrease in in-park per capita spending to $59.67. The increase in attendance was primarily driven by the inclusion of an additional calendar week in the current period, higher season pass sales and improved weather in California, and increased demand at Cedar Fair's parks with significant marketable new rides and attractions. These factors were partially offset by the impact of fewer planned operating days. The decrease in in-park per capita spending was primarily attributable to a planned decrease in average season pass pricing and a higher mix of season pass visitation, partially offset by improved in-park per capita spending for food and beverage and extra-charge products, including Fast Lane. The increase in out-of-park revenues was largely attributable to the additional calendar week in the current period, as well as additional sponsorship revenues and increased revenues from the Knott's Hotel following a recent renovation. The increase in net revenues included a $1.0 million unfavorable impact of foreign currency exchange rates at Cedar Fair's Canadian park.

Current wording

For the nine months ended September 29, 2024, net revenues increased $594.1 million compared with the nine months ended September 24, 2023. The increase in net revenues reflected $558.0 million in net revenues contributed by Former Six Flags operations during the three months ended September 29, 2024 and a $36.1 million increase in net revenues contributed by Former Cedar Fair operations during the nine months ended September 29, 2024 compared to the prior period. The increase in net revenues reflected the impact of a 10.1 million-visit increase in attendance and a $29.3 million increase in out-of-park revenues, partially offset by the impact of a $1.73, or 2.7%, decrease in in-park per capita spending. The 10.1 million-visit increase in attendance included a 9.2 million-visit increase resulting from attendance at Former Six Flags parks in the third quarter of 2024 following the Mergers and a 0.6 million-visit increase attributable to the fiscal calendar shift for Former Cedar Fair, with the remaining increase driven by higher season pass sales at Former Cedar Fair parks, improved weather in California, and increased demand at Former Cedar Fair's parks with significant marketable new rides and attractions. These factors were partially offset by the impact of fewer planned operating days. Of the $1.73 decrease in in-park per capita spending, $0.39 of the decrease related to the impact of in-park per capita spending at the Former Six Flags parks during the third quarter of 2024, with the remaining decrease attributable to a planned decrease in average season pass pricing and a higher mix of season pass visitation at the Former Cedar Fair parks, partially offset by improved in-park per capita spending for food and beverage and extra-charge products at the Former Cedar Fair parks, including Fast Lane. The $29.3 million increase in out-of-park revenues was due primarily to $20.9 million contributed by Former Six Flags operations in the third quarter of 2024, and $3.1 million in increased out-of-park revenues due to the fiscal calendar shift for Former Cedar Fair, with the remaining increase largely attributable to increased revenues from the Knott's Hotel following a recent renovation. The increase in net revenues included a $2.9 million unfavorable impact of foreign currency exchange rates.

Previous wording

Operating costs and expenses for the three months ended June 30, 2024 increased $35.2 million, or 10.0%, compared with the three months ended June 25, 2023. The increase in operating costs and expenses was the result of a $25.9 million increase in SG&A expenses, a $4.7 million increase in operating expenses and a $4.6 million increase in cost of goods sold. The increase in SG&A expenses was primarily attributable to $11.1 million of costs associated with the Mergers, an increase in equity-based compensation plan expense as a result of improved performance expectations, and the impact of the calendar shift in the current period. The increase in operating expenses was due to the calendar shift in the current period. Excluding the calendar shift, operating expenses decreased largely as a result of a planned reduction in labor costs, including declines in seasonal hours and full-time head count, and the related taxes and benefits. Cost of goods sold as a percentage of food, merchandise and games revenue decreased 1.7% driven by both planned reductions in costs and higher pricing. The increase in operating costs and expenses included a $1.3 million favorable impact of foreign currency exchange rates at Cedar Fair's Canadian park.

Current wording

Operating costs and expenses for the nine months ended September 29, 2024 increased $486.7 million compared with the nine months ended September 24, 2023. The increase in operating costs and expenses was the result of a $259.9 million increase in operating expenses, a $181.1 million increase in selling, general and administrative ("SG&A") expenses and a $45.7 million increase in cost of goods sold. The $259.9 million increase in operating expenses included a $245.2 million increase related to Former Six Flags operations in the third quarter of 2024, a $15.9 million increase due to the fiscal calendar shift for Former Cedar Fair and a $22.5 million increase in self-insurance reserves at Former Cedar Fair (see Note 1). Excluding these factors, operating expenses decreased in relation to Former Cedar Fair operations largely as a result of a planned reduction in labor costs totaling $19.3 million, including declines in seasonal hours and full-time head count, including related benefits, and a planned reduction in operating supplies, particularly for live entertainment. The $181.1 million increase in SG&A expenses included $80.9 million of additional expenses related to Former Six Flags operations in the third quarter of 2024, $75.5 million of increased transaction and integration costs incurred as the accounting acquirer in the Mergers, and $2.4 million due to the fiscal calendar shift for Former Cedar Fair. Excluding these factors, SG&A expenses increased at Former Cedar Fair due to higher full-time wages of $15.1 million, including bonuses and equity compensation, and to a lesser extent, advertising and costs related to information technology. Cost of goods sold as a percentage of food, merchandise and games revenue decreased 0.7%, of which 0.1% was a result of the Mergers, and the remainder of which was driven by both planned reductions in costs and higher pricing at Former Cedar Fair. The increase in operating costs and expenses included a $1.3 million favorable impact of foreign currency exchange rates.

Previous wording

Depreciation and amortization expense for the six months ended June 30, 2024 increased $5.6 million compared with the six months ended June 25, 2023, due to the additional calendar week in the current period. The loss on impairment / retirement of fixed assets for both periods was due to retirement of assets in the normal course of business, which in the prior period included the retirement of two specific assets.

Current wording

Depreciation and amortization expense for the nine months ended September 29, 2024 increased $84.2 million compared with the nine months ended September 24, 2023. A $95.0 million increase in depreciation expense was attributable to the Mergers, which was partially offset by the impact of a change in interim depreciation method for Former Cedar Fair (see Note 1). The loss on impairment / retirement of fixed assets for both periods was due to retirement of assets in the normal course of business, which in the prior period included the retirement of two specific assets. During the third quarter of 2024, management tested the Schlitterbahn reporting unit's fair value due to a decline in estimated future cash flows as a result of shifting investment priorities at those locations following the Mergers. Management concluded the estimated fair value of goodwill at the Schlitterbahn reporting unit no longer exceeded its carrying value. Therefore, a $42.5 million impairment of the goodwill at the Schlitterbahn reporting unit was recorded during the third quarter of 2024.

Previous wording

Interest expense for the six months ended June 30, 2024 increased $5.2 million as a result of the refinancing events during the current period, including the full redemption of the 2025 senior notes which were refinanced with a $1.0 billion senior secured term loan facility. The refinancing events also resulted in a loss on early debt extinguishment of $5.9 million during the current period. Cedar Fair recognized a $7.0 million net charge to earnings for foreign currency gains and losses in the current period compared with a $6.7 million net benefit to earnings in the prior period. Both amounts primarily represented the remeasurement of U.S. dollar denominated notes to the Canadian entity's functional currency.

Current wording

Interest expense, net for the nine months ended September 29, 2024 increased $51.8 million as a result of $39.2 million of interest incurred on debt acquired in the Mergers, as well as refinancing events during the current period, including the full redemption of the 2025 senior notes which were refinanced with a $1.0 billion senior secured term loan facility, and additional revolver borrowings in the current period. The refinancing events also resulted in a loss on early debt extinguishment of $8.0 million during the current period. Other (income) expense, net primarily represented the remeasurement of U.S. dollar denominated notes to an entity's functional currency.

Previous wording

Three months ended June 30, 2024 vs. Three months ended June 25, 2023 (FORMER CEDAR FAIR, L.P.)

Current wording

Three months ended September 29, 2024 vs. Three months ended September 24, 2023

Previous wording

The following table presents key financial information for Former Cedar Fair for the three months ended June 30, 2024 and June 25, 2023:

Current wording

The following table presents key financial information for the Combined Company for the three months ended September 29, 2024 and September 24, 2023:

Previous wording

For the three months ended June 30, 2024, net revenues increased $70.6 million, or 14.1%, compared with the three months ended June 25, 2023. The increase in net revenues reflected the impact of a 1.2 million-visit, or 16.7%, increase in attendance and a 17.2%, or $10.7 million, increase in out-of-park revenues, partially offset by the impact of a 3.1% decrease in in-park per capita spending to $59.54. The increase in attendance was primarily driven by the calendar shift in the current period, higher season pass sales at Knott's Berry Farm, and increased demand at Cedar Fair's parks with significant marketable new rides and attractions. These factors were partially offset by the impact of fewer planned operating days. The decrease in in-park per capita spending was primarily attributable to a planned decrease in average season pass pricing and a higher mix of season pass visitation, partially offset by improved in-park per capita spending for food and beverage and extra-charge products, including Fast Lane. The increase in out-of-park revenues was largely attributable to the calendar shift in the current period, as well as additional sponsorship revenues and increased revenues from the Knott's Hotel following a recent renovation. The increase in net revenues included a $1.9 million unfavorable impact of foreign currency exchange rates at Cedar Fair's Canadian park.

Current wording

For the three months ended September 29, 2024, net revenues increased $506.4 million compared with the three months ended September 24, 2023. The increase in net revenues reflected $558.0 million in net revenues contributed by Former Six Flags operations during the three months ended September 29, 2024 offset by $51.6 million in lower net revenues for Former Cedar Fair operations during the three months ended September 29, 2024 compared to the prior year period. The increase in net revenues reflected the impact of an 8.5 million-visit increase in attendance and a $16.3 million increase in out-of-park revenues, partially offset by the impact of a $1.43, or 2.3%, decrease in in-park per capita spending. The 8.5 million-visit increase in attendance included a 9.2 million-visit increase resulting from attendance at Former Six Flags parks following the Mergers offset by a 460,000-visit decrease at Former Cedar Fair parks driven by the calendar shift in the current period for Former Cedar Fair. The remaining 200,000-visit decrease was driven by inclement weather at multiple Former Cedar Fair parks, including the impact of hurricanes and flooding. Of the $1.43 decrease in in-park per capita spending, $0.77 of the decrease related to the impact of in-park per capita spending at the Former Six Flags parks, with the remaining decrease attributable to a planned decrease in average season pass pricing and a higher mix of season pass visitation at the Former Cedar Fair parks, partially offset by improved in-park per capita spending for food and beverage and extra-charge products at the Former Cedar Fair parks, including Fast Lane. The $16.3 million increase in out-of-park revenues was due to $20.9 million contributed by Former Six Flags operations offset by a $4.6 million decrease due to the fiscal calendar shift for Former Cedar Fair. The increase in net revenues included a $1.9 million unfavorable impact of foreign currency exchange rates.

Previous wording

Operating costs and expenses for the six months ended June 30, 2024 increased $60.0 million, or 11.1%, compared with the six months ended June 25, 2023. The increase in operating costs and expenses was the result of a $40.9 million increase in selling, general and administrative ("SG&A") expenses, a $13.3 million increase in operating expenses and a $5.9 million increase in cost of goods sold. The increase in SG&A expenses was primarily attributable to $21.3 million of costs associated with the Mergers, an increase in equity-based compensation plan expense as a result of improved performance expectations, and the impact of the additional calendar week in the current period. The increase in operating expenses was due to the additional calendar week in the current period. Excluding the additional calendar week, operating expenses decreased largely as a result of a planned reduction in labor costs, including declines in seasonal hours and full-time head count, and the related benefits and taxes; all of which were somewhat offset by an increase in self-insurance reserves. Cost of goods sold as a percentage of food, merchandise and games revenue decreased 1.8% driven by both planned reductions in costs and higher pricing. The increase in operating costs and expenses included a $0.5 million favorable impact of foreign currency exchange rates at Cedar Fair's Canadian park.

Current wording

Operating costs and expenses for the three months ended September 29, 2024 increased $426.8 million compared with the three months ended September 24, 2023. The increase in operating costs and expenses was the result of a $242.5 million increase in operating expenses, a $144.5 million increase in SG&A expenses and a $39.8 million increase in cost of goods sold. The $242.5 million increase in operating expenses included a $245.2 million increase related to Former Six Flags operations and a $17.9 million increase in self-insurance reserves at Former Cedar Fair described above offset by a $9.7 million decrease due to the calendar shift in the current period for Former Cedar Fair. Excluding these factors, operating expenses decreased in relation to Former Cedar Fair operations largely as a result of a planned reduction in seasonal labor costs totaling $4.7 million and operating supply costs, particularly for live entertainment. The $144.5 million increase in SG&A expenses included $80.9 million of additional expenses related to Former Six Flags operations, $54.5 million of increased transaction and integration costs incurred as the accounting acquirer in the Mergers, and higher full-time wages of $6.2 million primarily driven by bonuses at Former Cedar Fair. Cost of goods sold as a percentage of food, merchandise and games revenue increased 0.3%, of which 0.1% was a result of the Mergers, and the remainder of which was driven by an increase in food and beverage costs at Former Cedar Fair. The increase in operating costs and expenses included a $0.8 million favorable impact of foreign currency exchange rates.

Previous wording

After the items above, operating income for the three months ended June 30, 2024 totaled $123.2 million compared with operating income of $93.7 million for the three months ended June 25, 2023.

Current wording

After the items above, operating income for the three months ended September 29, 2024 totaled $262.5 million compared with $306.6 million for the three months ended September 24, 2023. The amount for the three months ended September 29, 2024 included $91.2 million of operating income from activity relating to the Former Six Flags operations.

Previous wording

Interest expense for the three months ended June 30, 2024 increased $2.7 million as a result of the refinancing events during the current period, including the full redemption of the 2025 senior notes in full which were refinanced with a $1.0 billion senior secured term loan facility. The refinancing events also resulted in a loss on early debt extinguishment of $5.9 million during the current period. Cedar Fair recognized a $1.8 million net charge to earnings for foreign currency gains and losses in the current period compared with a $10.7 million net benefit to earnings in the prior period. Both amounts primarily represented the remeasurement of U.S. dollar denominated notes to the Canadian entity's functional currency.

Current wording

Interest expense, net for the three months ended September 29, 2024 increased $46.4 million as a result of $39.2 million of interest incurred on debt acquired in the Mergers, as well as refinancing events during the current period, including the full redemption of the 2025 senior notes in full which were refinanced with a $1.0 billion senior secured term loan facility, and additional revolver borrowings in the current period. The refinancing events also resulted in a loss on early debt extinguishment of $2.1 million during the current period representing consent payments on the 2025 senior notes (see Note 6). Other (income) expense, net primarily represented the remeasurement of U.S. dollar denominated notes to the Canadian entity's functional currency.

Previous wording

For the five week period ended August 4, 2024, preliminary attendance for the Combined Company totaled 10.9 million visits, which was down 3% compared with the five week period ended August 6, 2023. A majority of the decline in attendance was attributable to four parks where operations were either partially or entirely disrupted, including a utility disruption at Michigan's Adventure, flooding at Valleyfair, and the effects of Hurricane Beryl on Schlitterbahn Waterpark Galveston and Six Flags Hurricane Harbor Splashtown in Houston, Texas.

Current wording

For the five week period ended November 3, 2024, preliminary attendance for the Combined Company totaled 6.5 million visits, which was up 20% compared with combined attendance for Former Cedar Fair and Former Six Flags over the five week period ended November 5, 2023.

Previous wording

Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in Cedar Fair's 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. Management believes Adjusted EBITDA is a meaningful measure of park-level operating profitability, and uses 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 widely used by analysts, investors and comparable companies in the industry to evaluate operating performance on a consistent basis, as well as more easily compare results with those of other companies in the industry. This measure is provided as a supplemental measure of Cedar Fair's operating results and may not be comparable to similarly titled measures of other companies.

Current wording

Modified EBITDA represents earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the Combined Company's credit agreement. Adjusted EBITDA represents Modified EBITDA minus net income attributable to non-controlling interests. Both measures have been included to disclose the effect of non-controlling interests. Prior to the Mergers, Former Cedar Fair did not have net income attributable to non-controlling interests. Modified EBITDA and Adjusted EBITDA are not measurements 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. Management believes Modified EBITDA and Adjusted EBITDA are meaningful measures of park-level operating profitability, and use them 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 widely used by analysts, investors and comparable companies in the industry to evaluate operating performance on a consistent basis, as well as more easily compare results with those of other companies in the industry. These measures are provided as a supplemental measure of the Combined Company's operating results and may not be comparable to similarly titled measures of other companies.

Previous wording

The table below sets forth a reconciliation of Adjusted EBITDA to net income (loss) for the three and six-month periods ended June 30, 2024 and June 25, 2023.

Current wording

The table below sets forth a reconciliation of Modified EBITDA and Adjusted EBITDA to net income for the three and nine-month periods ended September 29, 2024 and September 24, 2023. The results for the three and nine months ended September 29, 2024 include the results of the acquired Former Six Flags operations from the Closing Date of the Mergers forward (see Note 2).

Previous wording

(1) Consists of third-party legal and consulting transaction costs, as well as integration costs related to the Mergers. Integration costs include third-party consulting costs, travel costs and contract termination costs. See Note 11 for additional information related to the Mergers. These costs are added back to net income (loss) to calculate Adjusted EBITDA as defined in Cedar Fair's current and prior credit agreements and were recorded within "Selling, general and administrative" in the unaudited condensed consolidated statement of operations and comprehensive income (loss).

Current wording

(1) Consists of third-party legal and consulting transaction costs, as well as integration costs related to the Mergers. Integration costs include third-party consulting costs, travel costs and contract termination costs. See Note 2 for additional information related to the Mergers. These costs are added back to net income to calculate Modified EBITDA and Adjusted EBITDA as defined in the Combined Company's credit agreement and were recorded within "Selling, general and administrative" in the unaudited condensed consolidated statement of operations and comprehensive income.

Previous wording

(2) Consists of certain costs as defined in Cedar Fair's current and prior credit agreements. These costs are added back to net income (loss) to calculate Adjusted EBITDA and have included certain legal expenses, severance and related benefits, and contract termination costs. This balance also includes unrealized gains and losses on short-term investments.

Current wording

(3) Consists of certain costs as defined in the Combined Company's credit agreement. These costs are added back to net income to calculate Modified EBITDA and Adjusted EBITDA and have included certain legal expenses, severance and related benefits, and contract termination costs. This balance also includes unrealized gains and losses on short-term investments.

Previous wording

The Combined Company's principal sources of liquidity include cash from operating activities, funding from long-term debt obligations and existing cash on hand. Due to the seasonality of the business, pre-opening operations are funded with revolving credit borrowings, which are reduced with positive cash flow during the seasonal operating period. Primary uses of liquidity include operating expenses, capital expenditures, interest payments, and income tax obligations. Following the Mergers, the Combined Company's revolving credit facility was amended to increase the revolving credit facility capacity to $850 million. With the increased revolving credit facility capacity and the Combined Company's cash on hand, the Combined Company has sufficient liquidity to satisfy existing cash obligations through the third quarter of 2025.

Current wording

The Combined Company's principal sources of liquidity include cash from operating activities, funding from long-term debt obligations and existing cash on hand. Due to the seasonality of the business, pre-opening operations are funded with revolving credit borrowings, which are reduced with positive cash flow during the seasonal operating period. Primary uses of liquidity include operating expenses, capital expenditures, interest payments, and income tax obligations. With the Combined Company's revolving credit facility capacity and cash on hand, the Combined Company has sufficient liquidity to satisfy existing cash obligations through the fourth quarter of 2025.

Previous wording

The following table presents key cash flow information for Former Cedar Fair for the six months ended June 30, 2024 and June 25, 2023:

Current wording

The following table presents key cash flow information for the nine months ended September 29, 2024 and September 24, 2023:

Previous wording

Net cash from operating activities for Cedar Fair for the first six months of 2024 totaled $68.6 million, an increase of $55.5 million compared with the same period in the prior year. The increase was primarily due to an additional calendar week in the current period, as well as an increase in net revenues driven by higher attendance and lower planned costs, particularly labor costs, in the current period.

Current wording

Net cash from operating activities for the first nine months of 2024 totaled $406.0 million, an increase of $76.0 million compared with the same period in the prior year. The increase was primarily due to the inclusion of operations of the acquired Former Six Flags operations since the Closing Date of the Mergers offset by an increase in interest payments on Former Cedar Fair debt.

Previous wording

Net cash for investing activities for Cedar Fair for the first six months of 2024 totaled $118.0 million, a decrease of $6.5 million compared with the same period in the prior year. The decrease was due to the timing of capital expenditures.

Current wording

Net cash for investing activities for the first nine months of 2024 totaled $378.7 million, an increase of $209.1 million compared with the same period in the prior year. The increase was due to net cash consideration paid for the Mergers and the inclusion of capital expenditures of the acquired Former Six Flags operations since the Closing Date of the Mergers.

Previous wording

Net cash from financing activities for Cedar Fair for the first six months of 2024 totaled $37.4 million, a decrease of $20.5 million compared with the same period in the prior year. The decrease was primarily attributable to less revolving credit facility borrowings and additional payments for debt issuance costs in the current period somewhat offset by repurchases of limited partnership units in the prior period.

Current wording

Net cash for financing activities for the first nine months of 2024 totaled $1.2 million, a decrease of $125.4 million compared with the same period in the prior year. The decrease was primarily attributable to higher revolving credit facility borrowings in the current period, partially offset by repurchases of limited partnership units of Cedar Fair in the prior period.

Previous wording

As of June 30, 2024, Cedar Fair's primary contractual obligations consisted of outstanding long-term debt agreements. Before reduction for debt issuance costs, Cedar Fair's long-term debt agreements at such date consisted of the following:

Current wording

As of September 29, 2024, the Combined Company's primary contractual obligations consisted of outstanding long-term debt agreements and certain obligations pertaining to the Partnership Parks (see Note 7). Before reduction for debt issuance costs, the Combined Company's long-term debt agreements at such date consisted of the following:

Previous wording

•$1.0 billion of senior secured term debt, maturing in May 2031 under the 2024 Credit Agreement. The term debt amortizes at 25 bps quarterly, or $10.0 million per year, and bears interest at SOFR plus a margin of 200 bps per annum or base rate plus a margin of 100 bps per annum. There were $10.0 million of current maturities outstanding as of June 30, 2024.

Current wording

•$1.0 billion of senior secured term debt, maturing in May 2031 under the 2024 Credit Agreement, as amended. Amortization payments of $10.0 million per year, paid in equal quarterly installments, are required to be made on the term debt. The term debt bears interest at a rate equal to SOFR plus a margin of 200 bps per annum or base rate plus a margin of 100 bps per annum. There was $10.0 million of current maturities outstanding and payable within the next twelve months as of September 29, 2024 related to the senior secured term debt facility.

Previous wording

•$500 million of 5.375% senior unsecured notes, maturing in April 2027, issued at par. The 2027 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Interest is payable under the 2027 senior notes semi-annually in April and October.

Current wording

•$500 million of 5.375% senior unsecured notes, maturing in April 2027. Interest is payable under the 2027 senior notes semi-annually in April and October.

Previous wording

•$300 million of 6.500% senior unsecured notes, maturing in October 2028, issued at par. The 2028 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Interest is payable under the 2028 senior notes semi-annually in April and October.

Current wording

•$300 million of 6.500% senior unsecured notes, maturing in October 2028. Interest is payable under the 2028 senior notes semi-annually in April and October.

Previous wording

•$500 million of 5.250% senior unsecured notes, maturing in July 2029, issued at par. The 2029 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. Interest is payable under the 2029 senior notes semi-annually in January and July.

Current wording

•$500 million of 5.250% senior unsecured notes, maturing in July 2029. Interest is payable under the 2029 senior notes semi-annually in January and July.

Previous wording

•$88.0 million borrowings under the former $300 million senior secured revolving credit facility under the 2024 Credit Agreement. The 2024 Credit Agreement was amended concurrently with the Mergers resulting an increase in the senior secured revolving credit facility capacity to $850 million. The revolving credit facility bears interest at Term SOFR or Term Canadian Overnight Repo Rate Average plus a margin of 200 bps per annum, or base rate or Canadian prime rate plus a margin of 100 bps per annum; matures on July 1, 2029, following the amendment to the 2024 Credit Agreement and subject to a springing maturity date on the date that is 91 days prior to the final maturity of certain indebtedness in an aggregate outstanding principal amount greater than $200 million on such date; and requires a commitment fee of 50 bps per annum on the unused portion of the revolving credit facility, which is subject to decrease to 37.5 bps upon achievement of a 3.5x Net First Lien Leverage Ratio (as defined in the 2024 Credit Agreement and following the consummation of the Mergers). The 2024 Credit Agreement also provides for the issuance of documentary and standby letters of credit. After letters of credit of $19.9 million as of June 30, 2024, Cedar Fair had $192.1 million of availability under the former revolving credit facility. Letters of credit are primarily in place to backstop insurance arrangements.

Current wording

•$156 million of borrowings under the $850 million senior secured revolving credit facility under the 2024 Credit Agreement, as amended. The revolving credit facility bears interest at Term SOFR or Term Canadian Overnight Repo Rate Average plus a margin of 200 bps per annum, or base rate or Canadian prime rate plus a margin of 100 bps per annum; matures on July 1, 2029, following the amendment to the 2024 Credit Agreement and subject to a springing maturity date on the date that is 91 days prior to the final maturity of certain indebtedness in an aggregate outstanding principal amount greater than $200 million on such date; and requires a commitment fee of 50 bps per annum on the unused portion of the revolving credit facility, which is subject to decrease to 37.5 bps upon achievement of a 3.5x Net First Lien Leverage Ratio (as defined in the 2024 Credit Agreement, as amended). The 2024 Credit Agreement also provides for the issuance of documentary and standby letters of credit. After letters of credit of $40.9 million as of September 29, 2024, the Combined Company had $653.1 million of availability under the former revolving credit facility. Letters of credit are primarily in place to backstop insurance arrangements.

Previous wording

With respect to the revolving credit facility only, the 2024 Credit Agreement includes a maximum Net First Lien Leverage Ratio (as defined in the 2024 Credit Agreement) financial maintenance covenant, which is required to be tested as of the last day of each quarter except for the quarter in which the consummation of the Mergers occurred. The maximum Net First Lien Leverage Ratio following the consummation of the Mergers is 5.25x beginning with the test period ending on or about December 31, 2024, with 25 bps step-downs each year culminating at 4.5x beginning with the test period ending on or about December 31, 2027.

Current wording

With respect to the revolving credit facility only, the 2024 Credit Agreement, as amended, includes a maximum Net First Lien Leverage Ratio (as defined in the 2024 Credit Agreement) financial maintenance covenant, which is required to be tested as of the last day of each quarter except for the quarter in which the consummation of the Mergers occurred. The maximum Net First Lien Leverage Ratio following the consummation of the Mergers is 5.25x beginning with the test period ending on or about December 31, 2024, with step-downs of 25 bps after every four consecutive quarters, culminating at 4.5x beginning with the test period ending on or about December 31, 2027.

Previous wording

The 2024 Credit Agreement and fixed rate note agreements include restricted payment provisions, which could limit the Combined Company's ability to pay dividends. Under the 2024 Credit Agreement, if the pro forma Net Secured Leverage Ratio (as defined in the 2024 Credit Agreement) is less than or equal to 3.00x, the Combined Company can make unlimited restricted payments so long as no default or event of default has occurred and is continuing. If the pro forma Net Total Leverage Ratio (as defined in the 2024 Credit Agreement) is less than or equal to 5.25x, the Combined Company can make restricted payments up to the Cumulative Credit (as defined in the 2024 Credit Agreement). Irrespective of any leverage calculations, the Combined Company can make restricted payments not to exceed the greater of 7.0% of Market Capitalization (as defined in the 2024 Credit Agreement) and $200 million annually.

Current wording

The 2024 Credit Agreement, as amended, and fixed rate note agreements include restricted payment provisions, which could limit the Combined Company's ability to pay dividends. Under the 2024 Credit Agreement, as amended, if the pro forma Net Secured Leverage Ratio (as defined in the 2024 Credit Agreement) is less than or equal to 3.00x, the Combined Company can make unlimited restricted payments so long as no event of default has occurred and is continuing. If the pro forma Net Total Leverage Ratio (as defined in the 2024 Credit Agreement) is less than or equal to 5.25x, the Combined Company can make restricted payments up to the then-available Cumulative Credit (as defined in the 2024 Credit Agreement), so long as no event of default has occurred and is continuing. Irrespective of any leverage calculations, the Combined Company can make restricted payments not to exceed the greater of 7.0% of Market Capitalization (as defined in the 2024 Credit Agreement) and $200 million annually.