Income and Partnership Taxes |
6 Months Ended |
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Jun. 29, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income and Partnership Taxes | Income and Partnership Taxes: The Combined Company's income tax benefit was $110.5 million for the six months ended June 29, 2025 and $12.2 million for the six months ended June 30, 2024. The effective tax rate for the six months ended June 29, 2025 was 27.3% and 13.5% for the six months ended June 30, 2024. The Combined Company's income tax provision was $76.3 million for the three months ended June 29, 2025 and $20.2 million for the three months ended June 30, 2024. The effective tax rate for the three months ended June 29, 2025 was not meaningful due to pre-tax income approaching breakeven for the quarter. The effective tax rate for the three months ended June 30, 2024 was 26.7%. The effective tax rate for the six months ended June 29, 2025 differed from the United States Federal statutory rate of 21% due to discrete non-cash provision to return adjustments related to the Merger-related windup of the Former Cedar Fair partnership, effects of the non-controlling interest distribution, accretion on the Six Flags Over Georgia call option liability, non-deductible executive compensation, state and local income taxes and tax rate differences in foreign jurisdictions. Prior to the completion of the Mergers, Former Cedar Fair was taxed as a publicly traded partnership ("PTP"), with a tax levied on partnership level gross income (net revenues less cost of food, merchandise, and games revenues). The PTP was historically not subject to US federal or state income tax as permanent income tax exemptions are available for qualifying PTPs. As such, the total provision (benefit) for taxes prior to the Mergers includes amounts for the PTP tax and federal, state, local and foreign income taxes. The Partnership (Cedar Fair, L.P.) ceased to exist in connection with the Mergers. Following the completion of the Mergers, the Combined Company is subject to U.S. federal income taxes in addition to state and local income taxes as a corporation. This subjects all domestic and Canadian branch earnings (losses) before the provision for income taxes to a U.S. statutory rate of 21% and all earnings (losses) before provision of income taxes derived from operations in Mexico and Canada to their respective statutory rates of 30% and 26.5%. Under applicable accounting rules, the total provision (benefit) for income taxes includes the amount of taxes payable for the current year and the impact of deferred tax assets and liabilities, which represents future tax consequences of events that are recognized in different periods in the financial statements than for tax purposes. The Combined Company evaluates its tax positions using a more-likely-than-not threshold, and those tax positions requiring recognition are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon effective settlement with a taxing authority that has full knowledge of all relevant information. As of June 29, 2025, the Combined Company recorded unrecognized tax benefits of $25.6 million, all of which would impact the effective tax rate if recognized and were included within "Other liabilities" in the unaudited condensed consolidated balance sheet. Due to uncertainties regarding the timing of examination and the amount of any settlements, the Combined Company does not anticipate a reduction in the unrecognized tax benefits within the next twelve months. The Combined Company classifies interest and penalties attributable to income taxes as part of income tax expense. During the six months ended June 29, 2025 and June 30, 2024, the expense recognized for interest and penalties was not material. The Canadian government has enacted Pillar Two legislation (Global Minimum Tax Act) that includes the Income Inclusion Rule and Qualified Domestic Minimum Top-Up Tax (as defined in the Global Minimum Tax Act). The Canadian legislation is effective for fiscal years beginning January 1, 2024, and thereafter. The Combined Company has performed an assessment of the potential exposure to Pillar Two income taxes. This assessment is based on the most recent information available regarding the financial performance of the constituent entities. Based on the assessment performed, the Pillar Two effective tax rates in all jurisdictions in which the Combined Company operates is above the 15% minimum tax rate. The Combined Company continues to evaluate the legislation and does not expect an exposure to Pillar Two taxes for 2025. On July 4, 2025, the U.S. government enacted H.R. 1, the One Big Beautiful Bill Act (the "OBBBA"). The OBBBA maintains the 21% corporate tax rate and makes permanent many of the provisions from the Tax Cuts and Jobs Act of 2017 which had expired or were expiring. These provisions include more favorable interest deductibility and 100% bonus depreciation on capital expenditures. As a result of the enactment of OBBBA, the Combined Company anticipates an impact to the deferred tax liability and the income tax payable related to the provision for 100% bonus depreciation for certain asset classes placed in service after January 19, 2025. The Combined Company does not expect any material change to its ongoing tax rate as a result of the OBBBA.
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