Another Record Quarter at Six Flags as Revenue Climbs Seven Percent and Trailing Twelve Month Cash EPS(1) Rises 14 Percent

Footnotes

(1)

Cash Earnings Per Share (or Cash EPS), which is defined as Free Cash Flow divided by the weighted average basic shares outstanding, is not a U.S. GAAP defined measure. The company believes this measure provides meaningful profitability metrics, given current accumulated tax loss carryforwards and the net depreciation/amortization impacts relating to the revaluation of assets in connection with the company's emergence from Chapter 11 in April 2010.

(2)

See the following financial statements and Note 3 to those financial statements for a discussion of Adjusted EBITDA and its reconciliation to net income (loss).

(3)

See Note 3 to the following financial statements for a discussion of Modified EBITDA and its reconciliation to net income (loss).

(4)

Net Debt represents total long-term debt, including current portion, less cash and cash equivalents.

SIX FLAGS ENTERTAINMENT CORPORATION

Statement of Operations Data ⁽¹⁾

Three Months Ended

Nine Months Ended

(Amounts in thousands, except per share data)

September 30, 2014

September 30, 2014

September 30, 2013

Theme park admissions

$

305,820

$

282,095

$

545,958

$

523,293

Theme park food, merchandise and other

211,870

203,846

389,609

386,347

Sponsorship, licensing and other fees

18,717

13,589

42,438

32,064

Accommodations revenue

5,436

4,990

14,107

14,038

Total revenue

541,843

504,520

992,112

955,742

Operating expenses (excluding depreciation and amortization shown separately below)

143,881

134,395

352,040

340,926

Selling, general and administrative expense (excluding depreciation, amortization and stock-based compensation shown separately below)

48,494

45,571

131,889

131,091

Costs of products sold

39,730

36,616

77,321

75,541

Depreciation

26,467

27,300

79,007

86,411

Amortization

665

3,598

1,995

10,796

Stock-based compensation

78,168

7,077

89,267

21,496

Loss on disposal of assets

1,608

4,325

4,181

6,959

Gain on sale of investee

—

—

(10,031)

—

Interest expense, net

18,464

18,603

54,280

55,580

Other (income) expense, net

(6)

1,013

1,017

Income before income taxes

184,372

226,022

212,423

225,925

Income tax expense

60,332

86,405

64,272

82,361

Net income

124,040

139,617

148,151

143,564

Less: Net income attributable to noncontrolling interests

(19,006)

(19,214)

(38,012)

(38,327)

Net income attributable to Six Flags Entertainment Corporation

$

105,034

$

120,403

$

110,139

$

105,237

Weighted-average common shares outstanding:

Weighted-average number of common shares outstanding — basic

94,522

95,105

94,900

97,569

Weighted-average number of common shares outstanding — diluted

97,274

98,472

97,885

100,819

Net income per average common share outstanding:

Net income per average common share outstanding — basic

$

1.11

$

1.27

$

1.16

$

1.08

Net income per average common share outstanding — diluted

$

1.08

$

1.22

$

1.13

$

1.04

SIX FLAGS ENTERTAINMENT CORPORATION

The following table sets forth a reconciliation of net income to Adjusted EBITDA and Free Cash Flow for the three and nine months ended September 30, 2014 and September 30, 2013:

Three Months Ended

Nine Months Ended

(Amounts in thousands, except per share data)

September 30, 2014

September 30, 2013

September 30, 2014

September 30, 2013

Net income

$

124,040

$

139,617

$

148,151

$

143,564

Income tax expense

60,332

86,405

64,272

82,361

Other (income) expense, net

(6)

1,013

(260)

1,017

Interest expense, net

18,464

18,603

54,280

55,580

Loss on disposal of assets

1,608

4,325

4,181

6,959

Gain on sale of investee

—

—

(10,031)

—

Amortization

665

3,598

1,995

10,796

Depreciation

26,467

27,300

79,007

86,411

Stock-based compensation

78,168

7,077

89,267

21,496

Impact of Fresh Start valuation adjustments ⁽²⁾

92

150

275

442

Modified EBITDA ⁽³⁾

309,830

288,088

431,137

408,626

Third party interest in EBITDA of certain operations ⁽⁴⁾

(19,006)

(19,785)

(38,012)

(40,080)

Adjusted EBITDA ⁽³⁾

290,824

268,303

393,125

368,546

Cash paid for interest, net

(27,307)

(31,483)

(60,311)

(44,730)

Capital expenditures, net of property insurance recoveries in 2014

(14,075)

(16,843)

(95,420)

(89,182)

Cash taxes ⁽⁵⁾

(6,290)

(3,428)

(12,628)

(11,447)

Free Cash Flow ⁽⁶⁾

$

243,152

$

216,549

$

224,766

$

223,187

Weighted-average number of common shares outstanding — basic

94,522

95,105

94,900

97,569

Cash Earnings Per Share

$

2.57

$

2.28

$

2.37

$

2.29

(1)

Revenues and expenses of international operations are converted into U.S. dollars on an average basis as provided by GAAP.

(2)

Amounts recorded as valuation adjustments and included in reorganization items for the month of April 2010 that would have been included in Modified EBITDA and Adjusted EBITDA, had fresh start accounting not been applied. Balance consists primarily of discounted insurance reserves that will be accreted through the statement of operations each quarter through 2018.

(3)

"Modified EBITDA", a non-GAAP measure, is defined as the Company's consolidated income (loss) from continuing operations: excluding 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. The Company believes that Modified EBITDA is useful to investors, equity analysts and rating agencies as a measure of the Company's performance. The Company believes that Modified EBITDA is a measure that can be readily compared to other companies, and the Company uses Modified EBITDA in its internal evaluation of operating effectiveness and decisions regarding the allocation of resources. Modified EBITDA is not defined by GAAP and should not be considered in isolation or as an alternative to net income (loss), income (loss) from continuing operations, net cash provided by (used in) operating, investing and financing activities or other financial data prepared in accordance with GAAP or as an indicator of the Company's operating performance. Modified EBITDA as defined herein may differ from similarly titled measures presented by other companies.

"Adjusted EBITDA", a non-GAAP measure, is defined as Modified EBITDA minus the interests of third parties in the Adjusted EBITDA of properties that are less than wholly owned (consisting of Six Flags Over Georgia, Six Flags White Water Atlanta, Six Flags Over Texas, and Six Flags Great Escape Lodge & Indoor Waterpark (the "Lodge") of which the Company purchased the noncontrolling interests from its partners in the Lodge in 2013) plus the Company's interest in the Adjusted EBITDA of dick clark productions, inc., which was sold in September 2012. The Company believes that Adjusted EBITDA provides useful information to investors regarding the Company's operating performance and its capacity to incur and service debt and fund capital expenditures. Adjusted EBITDA is approximately equal to "Parent Consolidated Adjusted EBITDA" as defined in the Company's secured credit agreement, except that Parent Consolidated Adjusted EBITDA excludes Adjusted EBITDA from equity investees that is not distributed to the Company in cash on a net basis and has limitations on the amounts of certain expenses that are excluded from the calculation. Adjusted EBITDA is not defined by GAAP and should not be considered in isolation or as an alternative to net income (loss), income (loss) from continuing operations, net cash provided by (used in) operating, investing and financing activities or other financial data prepared in accordance with GAAP or as an indicator of the Company's operating performance. Adjusted EBITDA as defined herein may differ from similarly titled measures presented by other companies.

(4)

Represents interests of third parties in the Adjusted EBITDA of Six Flags Over Georgia, Six Flags Over Texas, Six Flags White Water Atlanta and the Lodge, plus the Company's interest in the Adjusted EBITDA of dick clark productions, inc., which are less than wholly owned. The Company purchased the noncontrolling interests from its partners in the Lodge in 2013 and sold its interest in dick clark productions, inc. in September 2012.

(5)

Based on our current federal net operating loss carryforwards, we believe we will continue to pay minimal amounts for cash taxes for the next three to four years. Cash taxes paid represents statutory taxes paid, primarily in Mexico.

(6)

Free Cash Flow, a non-GAAP measure, is defined as Adjusted EBITDA less (i) cash paid for interest expense net of interest income receipts, (ii) capital expenditures net of property insurance recoveries, and (iii) cash taxes. The Company has excluded from the definition of Free Cash Flow deferred financing costs related to the Company's debt due to the nature of these items. The Company believes that Free Cash Flow is useful to investors, equity analysts and rating agencies as a performance measure. The Company uses Free Cash Flow in its internal evaluation of operating effectiveness and decisions regarding the allocation of resources. Free Cash Flow is not defined by GAAP and should not be considered in isolation or as an alternative to net income (loss), income (loss) from continuing operations, net cash provided by (used in) operating, investing and financing activities or other financial data prepared in accordance with GAAP or as an indicator of the Company's operating performance. Free Cash Flow as defined herein may differ from similarly titled measures presented by other companies.