SIX FLAGS ENTERTAINMENT CORPORATION The following discussion and analysis contains forward-looking statements relating to future events or our future financial performance, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. Please see the discussion regarding forward-looking statements included under the caption "Cautionary Note Regarding Forward-Looking Statements" included elsewhere in this Quarterly Report and "Item 1A. Risk Factors" in the 2021 Annual Report and in this Quarterly Report for further discussion of the uncertainties, risks and assumptions associated with these statements. The following discussion and analysis presents information that we believe is relevant to an assessment and understanding of our condensed consolidated balance sheets and results of operations. This information should be read in conjunction with the condensed consolidated financial statements, and the notes thereto, and other financial data included elsewhere in this Quarterly Report. The following information should also be read in conjunction with our audited consolidated financial statements, and the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 2021 Annual Report. Overview General We are the largest regional theme park operator in the world and the largest operator of waterparks inNorth America based on the number of parks we operate. Of our 27 regional theme parks and waterparks, 24 are located inthe United States , two are located inMexico and one is located inMontreal, Canada . Our parks are located in geographically diverse markets acrossNorth America and generally offer a broad selection of state-of-the-art and traditional thrill rides, water attractions, themed areas, concerts and shows, restaurants, game venues and retail outlets, providing a complete family-oriented entertainment experience. We work continuously to improve our parks and our guests' experiences and to meet our guests' evolving needs and preferences. The results of operations for the three and six months endedJuly 3, 2022 andJuly 4, 2021 , are not indicative of the results expected for the full year. Typically, our park operations generate more than half of their annual revenue during the period fromMemorial Day toLabor Day each year while expenses are incurred year-round. During the first quarter of 2021, many of our parks remained closed or had capacity limits or other restrictions affecting attendance; however, we had a lesser amount of COVID-19 related impact to the second quarter of 2021. Our revenue is derived from (i) the sale of tickets (including season passes, summer passes, annual passes and memberships) for entrance to our parks (which accounted for approximately 55% and 53% of total revenue during the six months endedJuly 3, 2022 andJuly 4, 2021 , respectively), (ii) the sale of food and beverages, merchandise, games and attractions, parking and other services inside our parks, and (iii) sponsorship, international agreements and accommodations. Revenue from ticket sales and in-park sales are primarily impacted by park attendance and guest spending. Revenue from sponsorship, international agreements and accommodations can be impacted by the term, timing and extent of services and fees under these arrangements, which can result in fluctuations from quarter to quarter and year to year. During the six months endedJuly 3, 2022 , our earnings before interest, taxes, depreciation and amortization increased$15.0 million compared to the prior year. The increase was driven by increased guest spending per capita and cost savings in both operating expenses and sales, general and administrative expenses. Our principal costs of operations include salaries and wages, employee benefits, advertising, third party services, repairs and maintenance, utilities, rent and insurance. A large portion of our expenses is relatively fixed when our parks are operating, as our costs for full-time employees, maintenance, utilities, rent, and insurance do not vary significantly with attendance. 26
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Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted inthe United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses earned and incurred during the reporting period. Critical accounting estimates are fundamental to the portrayal of both our financial condition and results of operations and often require difficult, subjective and complex estimates and judgments. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which we believe to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in these estimates resulting from the continuing changes in the economic environment will be reflected in the financial statements in future periods. With respect to our critical accounting policies and estimates, there have been no material developments or changes from the policies and estimates discussed in the 2021 Annual Report. Recent Events
On
EffectiveJuly 16, 2022 , the Company's Chief Financial Officer, Mr.Gary Mick assumed the roles of Controller and Principal Accounting Officer on an interim basis while the Company conducts a search process to identify its next Controller and Principal Accounting Officer. 27 Table of Contents Results of Operations
Three Months Ended
The following table sets forth summary financial information for the three
months ended
Three Months Ended Percentage Change (%)
(Amounts in thousands, except percentage and per
capita data) July 3, 2022 July 4, 2021 2022 to 2021
Total revenue $ 435,422 $ 459,787 (5) %
Operating expenses 173,582 183,768 (6) %Selling, general and administrative expenses 53,573 50,205 7 % Cost of products sold 35,710 39,194 (9) % Other net periodic pension benefit (1,920) (1,690) 14 % Depreciation and amortization 27,537 28,052 (2) % Loss on disposal of assets 98 719 NM Interest expense, net 35,978 38,048 (5) % Loss on extinguishment of debt 17,533 - N/M Other expense, net 898 831 8 % Income before income taxes 92,433
120,660 (23) % Income tax expense 24,716 29,257 (16) % Net income 67,717 91,403 (26) % Less: Net income attributable to noncontrolling interests (22,325) (20,883) 7 % Net income attributable to Six Flags Entertainment Corporation$ 45,392 $
70,520 (36) % Other Data: Attendance 6,652 8,550 (22) % Revenue
Revenue recognized for the three months endedJuly 3, 2022 , totaled$435.4 million , a decrease of$24.4 million , or 5%, compared to the$459.8 million recognized for the three months endedJuly 4, 2021 . The decrease was attributable to an attendance decrease of 22% and a$5.0 million decrease in "Sponsorship, international agreements and accommodations" revenue. The decrease in attendance was net of a favorable visitation shift of approximately 200 thousand guests from the first quarter to the second quarter of 2022 due to the later timing of the Easter holiday in 2022, which caused some schools to schedule spring-break vacations in the second quarter of 2022 versus the first quarter in 2021. Total guest spending per capita, which excludes sponsorship, international agreements and accommodations revenue, for the three months endedJuly 3, 2022 , increased by$11.93 , to$63.87 , compared to the three months endedJuly 4, 2021 , driven by a$7.67 , or 27%, increase in admissions revenue per capita and a$4.26 , or 18%, increase in In-park spending per capita. The higher admissions per capita reflects higher realized ticket pricing and a higher mix of single day guests. The increase in In-park spending per capita reflects the benefits of our revenue management initiatives related to our premiumization strategy and in-park initiatives. Operating expenses
Operating expenses for the three months endedJuly 3, 2022 , decreased$10.2 million , or 6%, compared to the three months endedJuly 4, 2021 , primarily as a result of lower labor expenditures at the parks due to a reduction in operating hours and more efficient labor scheduling, which offset higher wage rates, as well as the moving of some back-office functions to a shared-services center, which shifted some operating costs to selling, general and administrative expenses.
Selling, general and administrative expenses
Selling, general and administrative expenses for the three months endedJuly 3, 2022 , increased$3.4 million , or 7%, compared to the three months endedJuly 4, 2021 . The increase was primarily related to the moving of some back-office functions to a shared-services center, which shifted a portion of costs from operating expenses to selling, general and 28
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administrative expenses, offset by lower advertising costs. All corporate expenses are included within selling, general and administrative expenses rather than operating expenses.
Cost of products sold Cost of products sold in the three months endedJuly 3, 2022 , decreased$3.5 million , or 9%, compared to the three months endedJuly 4, 2021 , primarily as a result of a decrease in total sales. Costs of products sold as a percentage of in-park revenue for the three months endedJuly 3, 2022 decreased slightly relative to the prior year period, primarily as a result of the mix of in-park revenue, an increase in retail prices, and a reduction in membership discounts, offset by higher unit costs for food and retail items.
Depreciation and amortization
Depreciation and amortization expense for the three months endedJuly 3, 2022 , decreased$0.5 million , or 2%, compared to the three months endedJuly 4, 2021 . The decrease in depreciation and amortization expense is primarily the result of decreased capital expenditures during 2020 due to the COVID-19 pandemic.
Loss on disposal of assets
We recognized a$0.1 million loss on disposal of assets for the three months endedJuly 3, 2022 , compared to a loss on disposal of assets of$0.7 million for the three months endedJuly 4, 2021 . These losses on disposal of assets were primarily driven by the write-off of assets in conjunction with our ongoing capital plan.
Interest expense, net
Interest expense, net decreased$2.1 million , or 5%, for the three months endedJuly 3, 2022 . The decrease is primarily attributable to lower effective interest rates on the unhedged portion of our Second Amended and Restated Term Loan B due to the termination of theAugust 2019 Swap Agreements onMarch 24, 2022 .
Loss on debt extinguishment
Loss on debt extinguishment was$17.5 million for the six months endedJuly 3, 2022 . We incurred a$17.5 million charge upon the repayment of$360.0 million of the 2025 Notes containing$12.6 million for the premium paid above par and$5.0 million for the write-off of deferred financing costs related to the transaction.
Income tax expense (benefit)
Income tax expense for the three months endedJuly 3, 2022 was$24.7 million reflecting an effective tax rate of 27%. The difference between our effective tax rate and the federal statutory rate primarily results from state and foreign income taxes and certain nondeductible expenses, including nondeductible executive compensation and a$4.0 million discrete tax assessment inMexico . 29 Table of Contents
Results of Operations
Six Months Ended
The following table sets forth summary financial information for the six months
ended
Six Months Ended Percentage Change (%)
(Amounts in thousands, except per capita data) July 3, 2022 July 4, 2021 2022 to 2021
Total revenue $ 573,529 $ 541,811 6 %
Operating expenses 283,526 276,411 3 %Selling, general and administrative expenses 92,905 86,331 8 % Costs of products sold 45,825 46,409 (1) % Other net periodic pension benefit (3,371) (3,333) 1 % Depreciation and amortization 56,586 56,885 (1) % (Gain) loss on disposal of assets (2,002) 1,239 (1) % Interest expense, net 73,508 76,468 (4) % Loss on debt extinguishment 17,533 - N/M Other expense, net 1,361 8,450 (84) % Income (loss) before income taxes 7,658 (7,049) N/M Income tax expense (benefit) 5,603 (2,613) N/M Net income (loss) 2,055 (4,436) N/M Less: Net income attributable to noncontrolling interests (22,325) (20,883) 7 % Net loss attributable to Six Flags Entertainment Corporation$ (20,270) $ (25,319) (20) % Other Data: Attendance 8,339 9,895 (16) % Revenue Revenue recognized for the six months endedJuly 3, 2022 , totaled$573.5 million , an increase of$31.7 million , or 6%, compared to the$541.8 million recognized for the six months endedJuly 4, 2021 . The increase was attributable to an increase in operating days in the first quarter of 2022 compared to the first quarter of 2021, which was negatively impacted by pandemic-related closures and restrictions. Total guest spending per capita, which excludes sponsorship, international agreements and accommodations revenue, for the six months endedJuly 3, 2022 , increased by$13.70 , to$66.21 , compared to the six months endedJuly 4, 2021 , driven by a$8.49 , or 29%, increase in admissions revenue per capita and a$5.21 , or 22%, increase in In-park spending per capita. The higher admissions per capita reflects higher realized ticket pricing and a higher mix of single day guests. The increase in In-park spending per capita reflects the benefits of our revenue management initiatives related to our premiumization strategy and in-park initiatives. Operating expenses Operating expenses for the six months endedJuly 3, 2022 , increased$7.1 million , or 3%, compared to the six months endedJuly 4, 2021 . These increases were primarily a result of increased operating days at ourCalifornia andMexico parks in the first quarter of 2022, as these parks were closed due to COVID-19 during the first quarter of 2021. The additional operating days in the first quarter and impacts from inflation drove the increase in salaries, wages, utilities and maintenance. This increase was partially offset by a decrease in operating days and operating hours in the second quarter, which was the result of park optimization initiatives.
Selling, general and administrative expenses
Selling, general and administrative expenses for the six months endedJuly 3, 2022 , increased$6.6 million , or 8%, compared to the six months endedJuly 4, 2021 . The increase was primarily related to the moving of some back-office functions to a shared-services center which shifted a portion of costs from operating expenses to selling, general and 30
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administrative expenses, offset by lower advertising costs. All corporate expenses are included within selling, general and administrative expenses rather than operating expenses.
Cost of products sold Cost of products sold in the six months endedJuly 3, 2022 , decreased$0.6 million , or 1%, compared to the six months endedJuly 4, 2021 , primarily as a result of a decrease in total items sold. Costs of products sold as a percentage of in-park revenue for the six months endedJuly 3, 2022 decreased slightly relative to the prior year period, primarily as a result of the mix of in-park revenue, an increase in retail prices, and a reduction in membership discounts, offset by higher unit costs of food and retail items
Depreciation and amortization
Depreciation and amortization expense for the six months endedJuly 3, 2022 , decreased$0.3 million , or 1%, compared to the six months endedJuly 4, 2021 . The decrease in depreciation and amortization expense is primarily the result of decreased capital expenditures during 2020 due to the COVID-19 pandemic.
(Gain) loss on disposal of assets
We recognized a$2.0 million gain on disposal of assets for the six months endedJuly 3, 2022 , compared to a loss on disposal of assets of$1.2 million for the six months endedJuly 4, 2021 . The$2.0 million gain on disposal of assets for the six months endedJuly 3, 2022 was driven by insurance proceeds reimbursing for prior year losses at multiple parks.
Interest expense, net
Interest expense, net decreased$3.0 million , or 4%, for the six months endedJuly 3, 2022 . The decrease is primarily attributable to lower interest rates on the unhedged portion of our Second Amended and Restated Term Loan B.
Loss on debt extinguishment
Loss on debt extinguishment was$17.5 million for the six months endedJuly 3, 2022 . We incurred a$17.5 million charge upon the repayment of$360.0 million of the 2025 Notes containing$12.6 million for the premium paid above par and$5.0 million for the write-off of deferred financing costs related to the transaction.
Income tax expense (benefit)
Income tax expense for the six months endedJuly 3, 2022 , was$5.6 million . The difference between the federal statuatory rate and our effective tax rate was driven by a$4.0 million discrete tax assessment inMexico . Our income tax expense was also driven by state and foreign income taxes and nondeductible expenses, including certain nondeductible executive compensation. 31
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Calculation of EBITDA for the three and six months ended
We manage our business primarily with three different metrics; Modified EBITDA, Adjusted EBITDA and Adjusted EBITDA minus capex.
"Modified EBITDA," a non-GAAP measure, is defined as our consolidated income (loss) from continuing operations: excluding the following: the cumulative effect of changes in accounting principles, discontinued operations gains or losses, income tax expense or benefit, restructure costs or recoveries, reorganization items (net), other income or expense, gain or loss on early extinguishment of debt, equity in income or loss of investees, interest expense (net), gain or loss on disposal of assets, gain or loss on the sale of investees, amortization, depreciation, stock-based compensation, and fresh start accounting valuation adjustments. Modified EBITDA, as defined herein, may differ from similarly titled measures presented by other companies. Management uses non-GAAP measures for budgeting purposes, measuring actual results, allocating resources and in determining employee incentive compensation. We believe that Modified EBITDA provides relevant and useful information for investors because it assists in comparing our operating performance on a consistent basis, makes it easier to compare our results with those of other companies in our industry as it most closely ties our performance to that of our competitors from a park-level perspective and allows investors to review performance in the same manner as our management. "Adjusted EBITDA," a non-GAAP measure, is defined as Modified EBITDA minus the interests of third parties in the Modified EBITDA of properties that are less than wholly owned (consisting ofSix Flags Over Georgia , Six Flags White WaterAtlanta and Six Flags Over Texas). Adjusted EBITDA is approximately equal to "Parent Consolidated Adjusted EBITDA" as defined in our secured credit agreement, except that Parent Consolidated Adjusted EBITDA excludes Adjusted EBITDA from equity investees that is not distributed to us in cash on a net basis and has limitations on the amounts of certain expenses that are excluded from the calculation. Adjusted EBITDA as defined herein may differ from similarly titled measures presented by other companies. Our board of directors and management use Adjusted EBITDA to measure our performance and our current management incentive compensation plans are based largely on Adjusted EBITDA. We believe that Adjusted EBITDA is frequently used by all our sell-side analysts and most investors as their primary measure of our performance in the evaluation of companies in our industry. In addition, the instruments governing our indebtedness use Adjusted EBITDA to measure our compliance with certain covenants and, in certain circumstances, our ability to make certain borrowings. Adjusted EBITDA, as computed by us, may not be comparable to similar metrics used by other companies in our industry. "Adjusted EBITDA minus capex," a non-GAAP measure, is defined as Modified EBITDA minus capital expenditures net of property insurance recoveries. Our board of directors and management use Adjusted EBITDA to measure our performance and our current management incentive compensation plans are based largely on Adjusted EBITDA minus capex. Adjusted EBITDA minus capex as defined herein may differ from similarly titled measures presented by other companies. Modified EBITDA, Adjusted EBITDA and Adjusted EBITDA minus capex are not recognized terms under US GAAP and should not be considered in isolation or as a substitute for a measure of our financial performance prepared in accordance with US GAAP. These metrics are not indicative of income or loss as determined under US GAAP. Modified EBITDA, Adjusted EBITDA and Adjusted EBITDA minus capex as presented may not be comparable to similarly titled measures of other companies due to varying methods of calculation. The following tables set forth a reconciliation of net income (loss) to Modified EBITDA, Adjusted EBITDA and Adjusted EBITDA minus capex for the three and six month periods endedJuly 3, 2022 andJuly 4, 2021 : 32 Table of Contents Three Months Ended Six Months Ended
(Amounts in thousands, except per share data) July 3, 2022 July 4, 2021 July 3, 2022 July 4, 2021 Net income (loss)$ 67,717
24,716 29,257 5,603 (2,613)
Other expense, net 898 831 1,361 8,450
Loss on debt extinguishment 17,533 - 17,533 -
Interest expense, net 35,978 38,048 73,508 76,468
Loss (gain) on disposal of assets 98
719 (2,002) 1,239
Amortization 5 5 11 11
Depreciation 27,532 28,047 56,575 56,874
Stock-based compensation 3,223 3,001 7,448 9,638
Modified EBITDA 177,700 191,311 162,092 145,631Third party interest in EBITDA of certain operations (22,325) (20,883) (22,325) (20,883) Adjusted EBITDA$ 155,375
(19,117) (55,342) (42,250) Adjusted EBITDA minus capex
$ 129,023
Adjusted EBITDA for the three months endedJuly 3, 2022 , decreased$15.1 million compared to the three months endedJuly 4, 2021 . This was primarily driven by a$24.3 million decrease in revenue for the period. This decrease was partially offset by cost savings in both operating expenses and sales, general and administrative expenses. Capital expenditures, net of property insurance recovery, increased by$40.9 million due to decreased spending in the prior year period when COVID-19 created economic uncertainty. Adjusted EBITDA for the six months endedJuly 3, 2022 , increased$15.0 million compared to the six months endedJuly 4, 2021 . This was primarily driven by a$31.7 million increase in revenue due to the resumption of operations at our parks inCalifornia andMexico , which were not open during the first quarter 2021 due to the COVID-19 pandemic. Revenue gains were partially offset by higher operating costs due to the increase in overall operating days. Capital expenditures, net of property insurance recovery, increased by$46.7 million due decreased spending in the prior year period when COVID-19 led to more uncertainty and decreased capital spending during the first and second quarters. 33 Table of Contents
Liquidity, Capital Commitments and Resources
On an annual basis, our principal sources of liquidity are cash generated from operations, funds from borrowings and existing cash on hand. Our principal uses of cash typically include the funding of working capital obligations, debt service, investments in parks (including capital projects), common stock dividends, payments to our partners in the Partnership Parks, and common stock repurchases. Holdings did not pay any dividends during the six months endedJuly 3, 2022 andJuly 4, 2021 . During the six months endedJuly 4, 2021 , we paid$0.2 million to employees with dividend equivalent rights for previously declared dividends due upon the vesting of the related shares. These dividends were declared prior to the suspension of dividend payments in connection with the increase in the Second Amended and Restated Revolving Loan inApril 2020 . As ofAugust 8, 2022 , Holdings has repurchased 8,071,000 shares of common stock at a cumulative cost of approximately$365.1 million and an average cost per share of$45.24 under its approved stock repurchase program, leaving approximately$134.9 million available for permitted repurchases. The stock price of Holdings' common stock could be adversely affected if our cash dividend rate or common stock repurchase activity differs from investors' expectations. Based on historical and anticipated operating results, we believe cash flow from operations, available cash and amounts available under the Second Amended and Restated Credit Facility will be adequate to meet our liquidity needs for at least the next twelve months, including any anticipated requirements for working capital, capital expenditures, scheduled debt service and obligations under arrangements relating to the Partnership Parks. Additionally, we expect to be able to use federal net operating loss carryforwards to reduce our federal income tax liability for several years. For the years 2022 through 2024, we have significant federal net operating loss carryforwards subject to an annual limitation that will offset approximately$32.5 million of taxable income per year. We expect taxable income in excess of the annual limitation in those years will be offset by net operating losses generated during 2020. In accordance with the CARES Act, net operating loss carryforwards generated in 2020 are not subject to expiration and will carryforward indefinitely. Our current and future liquidity is greatly dependent upon our operating results, which are driven largely by overall economic conditions as well as the price and perceived quality of the entertainment experience at our parks. Our liquidity could also be adversely affected by a disruption in the availability of credit as well as unfavorable weather; natural disasters; contagious diseases, such as Ebola, Zika, swine flu, COVID-19, Monkeypox or other diseases; accidents or the occurrence of an event or condition at our parks, including terrorist acts or threats inside or outside of our parks; negative publicity; or significant local competitive events, which could materially reduce paid attendance and revenue related to that attendance at any of our parks. While we work with local police authorities on security-related precautions to prevent certain types of disturbances, we can make no assurance that these precautions will be able to prevent these types of occurrences. However, we believe our ownership of many parks in different geographic locations reduces the effects of adverse weather and these other types of occurrences on our consolidated results. If such an adverse event were to occur, we may be unable to borrow under the Second Amended and Restated Revolving Loan or may be required to repay amounts outstanding under the Second Amended and Restated Credit Facility and/or may need to seek additional financing. In addition, we expect we may be required to seek additional financing to refinance all or a significant portion of our existing debt on or prior to maturity. The degree to which we are leveraged could adversely affect our ability to obtain any additional financing. See "Cautionary Note Regarding Forward-Looking Statements" and "Item 1A. Risk Factors" in the 2021 Annual Report and in this Quarterly Report. OnJuly 1, 2022 , we redeemed$360.0 million in aggregate principal amount of our senior secured 7.000% Notes due 2025 at a redemption price of 103.5%. We recorded a loss on debt extinguishment of$17.5 million in connection with the redemption. As ofJuly 3, 2022 , our total indebtedness, net of discount and deferred financing costs, was approximately$2,477.9 million . As ofJuly 3, 2022 , based on (i) non-revolving credit debt outstanding on that date, (ii) estimated interest rates for floating-rate debt, and (iii) the 2024 Notes, the 2025 Notes and the 2027 Notes, we anticipate annual cash interest payments of approximately$150 million and$130 million during 2022 and 2023, respectively. 34 Table of Contents
As ofJuly 3, 2022 , we had approximately$74.8 million of unrestricted cash and$129.0 million available for borrowing under the Second Amended and Restated Revolving Loan. Our ability to borrow under the Second Amended and Restated Revolving Loan depends on compliance with certain conditions, including a maximum senior secured net leverage maintenance covenant, a minimum liquidity covenant, and the absence of any material adverse change in our business or financial condition. If we were to become unable to borrow under the Second Amended and Restated Revolving Loan, and we failed to meet our projected results from operations significantly, we might be unable to pay in full our off-season obligations. A default under the Second Amended and Restated Revolving Loan could permit the lenders under the Second Amended and Restated Credit Facility to accelerate the obligations thereunder. The Second Amended and Restated Revolving Loan expires onApril 17, 2024 . The terms and availability of the Second Amended and Restated Credit Facility and other indebtedness are not affected by changes in the ratings issued by rating agencies in respect of our indebtedness. For a more detailed description of our indebtedness, see Note 3 to the unaudited condensed consolidated financial statements included in this Quarterly Report. We regularly make capital investments for new rides and attractions in our parks. In addition, each year we make capital investments in the food, retail, games and other in-park areas to increase guest spending per capita. We also make annual enhancements to theming and landscaping of our parks in order to provide a more complete family-oriented entertainment experience; and invest in our information technology infrastructure to attain operational efficiencies. We regularly perform maintenance capital enhancements, with most expenditures made during the off-season. Repairs and maintenance costs for materials and services associated with maintaining assets, such as painting and inspecting existing rides, are expensed as incurred and are not included in capital expenditures. During the six months endedJuly 3, 2022 , net cash provided by operating activities was$63.2 million , compared to net cash provided by operating activities of$129.3 million in the prior year period. Net cash used in investing activities during the six months endedJuly 3, 2022 , andJuly 4, 2021 , was$55.3 million and$42.2 million , respectively, consisting primarily of capital expenditures, net of property insurance recoveries. The additional investment spending in during the six months endedJuly 3, 2022 reflects the reduction in the effects of COVID-19 on our capital budget. Net cash used in financing activities during the six months endedJuly 3, 2022 , was$269.0 million and was primarily due to the repayment of$360.0 million repayment on the 2025 Notes and$96.8 million in stock repurchases, which was partially offset by borrowing of$200.0 million on the Second Amended and Restated Revolving Loan. Net cash provided by financing activities was$7.9 million during the six months endedJuly 4, 2021 , primarily due to the exercise of stock options. Since our business is both seasonal in nature and involves significant levels of cash transactions, our net operating cash flows are largely driven by attendance and guest spending per capita levels. Most of our cash-based expenses are relatively fixed and do not vary significantly with either attendance or spending per capita assuming that the parks are operating in the normal course. As the war inUkraine has continued and sanctions, export controls and other measures are imposed againstRussia ,Belarus and specific areas ofUkraine , the war is increasingly affecting the global economy and financial markets, as well as exacerbating ongoing economic challenges, including rising inflation and global supply-chain disruption. We will continue to monitor the impacts of theRussia -Ukraine war on macroeconomic conditions and continually assess the effect these matters may have on consumer demand, our suppliers' ability to deliver products, cybersecurity risks and our liquidity and access to capital. 35 Table of Contents Contractual Obligations SinceJanuary 2, 2022 , there have been no material changes to the contractual obligations of the Company outside the ordinary course of the Company's business outside of the early paydown of$360 million on the 2025 Notes. Payment Due by Period (Amounts in thousands) 2022 2023 - 2024 2025 - 2026 2027 and beyond Total Long-term debt including current portion (2025 Notes and Second Amended and Restated Revolving Loan) (1) $ -$ 200,000 $ 365,000 $ -$ 565,000 Interest on 2025 Notes (1) 11,803 46,583 6,951 - 65,337
(1) See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for further discussion on long-term debt.
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