SANDUSKY, Ohio— Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and immersive entertainment, today reported record net revenues for its full-year and fourth-quarter 2019 results. The Company also announced a new long-term Adjusted EBITDA growth target.

Full-year 2019 results are not directly comparable with full-year 2018, as 2019 includes results from the operations of the two Schlitterbahn water parks since their July 1, 2019 acquisition date. For purposes of same-park discussions, current year data excludes the results of the Schlitterbahn water parks.

2019 Highlights

• Net revenues increased 9% to a record $1.47 billion; same-park net revenues were up 6%.
  • Attendance at Cedar Fair’s parks increased 8% to a record 27.9 million guests; same-park attendance increased 5%.
  • In-park per capita spending increased 1% to a record $48.32; in-park per capita spending on a same-park basis was up 1%.
  • Out-of-park revenues were up 11% to a record $169 million; same-park out-of-park revenues increased 8%.
• Net income increased 36%, or $46 million, to $172 million and Adjusted EBITDA increased 8%, or $37 million, to $505 million. On a same-park basis, net income increased 27%, or $34 million, and Adjusted EBITDA³ increased 5%, or $21 million.
• Through Dec. 31, 2019, sales of 2020 season passes and related all-season products, are up more than 40% from the same time last year.

1	For additional information regarding Adjusted EBITDA, including how the Company defines and uses Adjusted EBITDA, see the attached historical reconciliation table and related footnotes.
2	The Company is not reconciling Adjusted EBITDA targets or guidance to Net Income, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable, without unreasonable efforts, to forecast certain individual items required to reconcile Adjusted EBITDA targets or guidance to the most directly comparable GAAP financial measure (Net Income). These items include the net effect of swaps, non-cash foreign currency (gain) loss, as well as other non-cash and unusual items and other adjustments as defined under the Company’s debt agreements, which are difficult to predict in advance in order to include in a GAAP estimate.
3	Adjusted EBITDA for the year ended December 31, 2019, excluding the Schlitterbahn parks’ results (i.e.: the same-park basis) was calculated as net income of $160.4 million plus interest expense of $100.4 million, interest income of $2.0 million, provision for taxes of $42.8 million, depreciation and amortization of $167.8 million, net effect of swaps charge of $16.5 million, non-cash foreign currency gain of $21.1 million, non-cash equity compensation of $12.4 million, loss on impairment / retirement of fixed assets of $4.7 million, and acquisition-related costs of $7.2 million.

CEO Commentary
“We are extremely pleased with our 2019 season, which was the most successful year in Cedar Fair’s history,” said Richard A. Zimmerman, president and CEO of Cedar Fair. “The initiatives within our long-range strategic plan, which focused on broadening the guest experience through more immersive attractions and entertainment, are clearly resonating in our markets. The successful execution of these initiatives by our talented park teams, and the early contributions from the newly acquired Schlitterbahn water parks, combined to produce our record results in 2019.

“I am particularly pleased we once again, achieved solid growth across our three core revenue metrics of attendance, in-park per capita spending and out-of-park revenues,” added Zimmerman. “These record results reflect the strong consumer demand for our parks, rides and attractions, the special event programming and the immersive entertainment they offer.

“I’m extremely proud of what we were able to accomplish this year — producing record results in the near term while setting the stage for further growth and creating value for our unitholders over the long term,” continued Zimmerman. “The success of our core operations, combined with many long-term initiatives now coming online, and the opportunities that acquisitions like Schlitterbahn present, give us great confidence in our ability to continue these record-setting trends for years to come.”

2019 Full-Year Results
For the full year ended Dec. 31, 2019, Cedar Fair generated record net revenues of $1.47 billion, an increase of $126 million, or 9%, compared with 2018. Driving the increase was an 8%, or 2 million-visit, increase in attendance to a record 27.9 million visits; a 1%, or $0.63, increase in in-park per capita spending to a record $48.32; and an 11%, or $16 million, increase in out-of-park revenues to a record $169 million.

On a same-park basis (excluding the two Schlitterbahn water parks acquired on July 1, 2019), 2019 net revenues totaled a record $1.43 billion, up $84 million, or 6%, driven by a 5%, or 1.3 million-visit, increase in attendance; a 1%, or $0.44, increase in in-park per capita spending; and an 8%, or $12 million, increase in out-of-park revenues.

The Company noted the 5% increase in 2019 same-park attendance reflects the following:

• Record performance during the peak operating period of July through October;
• Record performance of the parks’ season pass programs, which produced 53% of the total attendance mix;
• A 6%, or nearly 1 million-visit, increase in unique visitors; and
• The inaugural year of WinterFest at Canada’s Wonderland, the Company’s park in Toronto.

The 1% increase in same-park in-park per capita spending reflects improved non-season pass admissions pricing and growth in other in-park spending. Solid year-over-year increases in the food/beverage and extra-charge product categories continued to drive the overall increase in other in-park spending despite the growth of the season pass attendance mix.

The 8% increase in same-park out-of-park revenues was primarily attributable to an increase in transaction fee revenues during the year, as well as increased accommodations revenues, including resort bookings at Sawmill Creek after its acquisition on July 3, 2019.

Operating income for 2019 was $309 million, up $19 million, or 7%, when compared to 2018. The increase in operating income is attributable to the 9% increase in net revenues noted above, offset somewhat by an increase of $98 million, or 11%, in operating costs and expenses compared to 2018. On a same-park basis, and excluding $7 million of acquisition-related costs, operating costs and expenses in 2019 were up $64 million, or 7%, with the increase due to higher labor costs driven by wage-rate increases; incremental operating costs associated with the Company’s new facilities and immersive events, including the inaugural WinterFest at Canada’s Wonderland; and incremental variable operating costs, in particular, cost of goods sold and transaction fees associated with the record attendance levels.

During 2019, the Company recognized $100 million of interest expense compared with $86 million for 2018, with the increase due to interest incurred on the 2029 senior notes issued in June 2019 and incremental revolver borrowings during the year. The net effect of swaps in 2019 resulted in a $17 million charge to earnings compared with $7 million in 2018. The difference reflects changes in fair market value for these swaps. During the year, the Company also recognized a $21 million gain on foreign currency compared with a $36 million net charge for 2018. Both amounts primarily represent the re-measurement of the U.S.-dollar denominated debt held at the Company’s Canadian property from the applicable currency to the legal entity’s currency. In addition, the provision for taxes in 2019 increased $8 million to $43 million due to a $10 million tax benefit recognized in 2018 for the implementation of the Tax Cut and Jobs Act.

After the items above, net income for 2019 totaled $172 million, or $3.03 per diluted limited partner (LP) unit, a 36% increase when compared with net income of $127 million, or $2.23 per diluted unit, in 2018. On a same-park basis, net income for the year totaled $160 million, up $34 million, or 27%.

For 2019, Adjusted EBITDA, which management believes is a meaningful measure of the Company’s park-level operating results, was $505 million, an increase of 8%, or $37 million, when compared with last year. On a same-park basis, Adjusted EBITDA was up 5%, or $21 million, largely the result of the increase in revenues during the year. The higher revenues in 2019 are attributable to solid increases in attendance, in-park per capita spending and out-of-park revenues, offset in part by planned increases in labor and operating supply costs and variable costs associated with the higher attendance. See the attached table and footnote 3 for a reconciliation of net income to Adjusted EBITDA.

Outlook
“The early impact of our strategic initiatives was at the center of our success in 2019 and we expect those initiatives to be a cornerstone driver of growth well into the future,” said Zimmerman. “In 2020, we plan to expand upon our strategy of offering limited duration special events and experiential entertainment of scale, while continuing to invest in the traditional rides and attractions which have worked so well for so long.”

For the coaster enthusiast, Zimmerman noted the headliner in 2020 will be Kings Island’s Orion^TM, one of only seven giga coasters worldwide and the park’s 15^th coaster. Meanwhile, new water park features are coming to five of the Company’s properties, with California’s Great America introducing the expanded and rebranded South Bay Shores, and the Company’s newest parks, Schlitterbahn New Braunfels and Schlitterbahn Galveston, introducing the first phase of improvements within multi-year refreshment plans. A new Camp Snoopy will greet young families at Michigan’s Adventure in 2020, while Grand Carnivale and Summer Nights will turn midways into evening street parties at several additional parks this year. Finally, season-long surprises and yet-to-be-announced special events await guests celebrating the major milestones of Cedar Point’s 150^th Anniversary and Knott’s Berry Farm’s 100^th Anniversary.

Zimmerman also noted the Company continues to advance important long-term initiatives that position it for growth well into the future. In 2020, the Company will broadly launch PassPerks^TM, its new loyalty program, which was piloted in 2019 and is designed to encourage passholders to visit more often, as well as provide rewards that promote higher renewal and retention rates. The Company’s resort properties also expand in 2020 with full-year operations commencing at the newly opened SpringHill Suites hotel at Carowinds, in Charlotte, and tournament play beginning at the new Cedar Point Sports Center, in Sandusky, Ohio.

Zimmerman added that current long-lead indicators offer an encouraging outlook for the Company heading into 2020. “Building off the momentum we established during this past season, our 2020 season pass sales program, which began in August, is off to its best start ever, with sales of season passes and related all-season products up more than $40 million across the system,” said Zimmerman. “Few indicators reflect the appreciation and demand for the entertainment product we provide more than seeing a 40%-plus ramp in the early-season sale of season passes.”

Zimmerman concluded by saying, “We are committed to evolving the guest experience and being more than just a place to ride rides. Looking ahead to 2020 and beyond, we remain confident in the fundamentals of our business model, the growth opportunities available to us, and our ability to maintain and grow the distribution. In everything we do, we remain committed to delivering excellent near-term value to our unitholders, while at the same time delivering on our new long-term growth target of increasing annual Adjusted EBITDA to $600 million by 2024.”

Distribution Declared
The Company also announced the declaration of a cash distribution of $0.935 per LP unit, which is consistent with its targeted annualized distribution rate of $3.74 per LP unit. The distribution will be paid on March 17, 2020, to unitholders of record as of March 4, 2020.

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