Record Revenue and Earnings in the Second Quarter at Six Flags

(1)

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).

(2)

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

(3)

Cash EPS (or Cash Earnings Per Share), 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.

(4)

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

Statement of Operations Data ⁽¹⁾

Three Months Ended

(Amounts in thousands, except per share data)

June 30, 2014

June 30, 2013

Theme park admissions

$

205,428

$

199,666

Theme park food, merchandise and other

151,772

149,669

Sponsorship, licensing and other fees

15,543

10,582

Accommodations revenue

3,808

3,784

Total revenue

376,551

363,701

Operating expenses (excluding depreciation and amortization shown separately below)

126,531

122,312

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

54,420

52,919

Costs of products sold

31,348

31,000

Depreciation

25,511

27,564

Amortization

665

3,599

Stock-based compensation

5,740

7,322

Loss on disposal of assets

781

1,564

Gain on sale of investee

(10,031)

—

Interest expense, net

17,787

18,580

Other (income) expense, net

(64)

426

Income before income taxes

123,863

98,415

Income tax expense

38,551

32,355

Net income

85,312

66,060

Less: Net income attributable to noncontrolling interests

(19,006)

(18,699)

Net income attributable to Six Flags Entertainment Corporation

$

66,306

$

47,361

Weighted-average common shares outstanding:

Weighted-average number of common shares outstanding — basic

95,224

95,751

Weighted-average number of common shares outstanding — diluted

99,162

100,466

Net income per average common share outstanding:

Net income per average common share outstanding — basic

$

0.70

$

0.49

Net income per average common share outstanding — diluted

$

0.67

$

0.47

Statement of Operations Data ⁽¹⁾

Six Months Ended

(Amounts in thousands, except per share data)

June 30, 2014

June 30, 2013

Theme park admissions

$

240,138

$

241,198

Theme park food, merchandise and other

177,739

182,501

Sponsorship, licensing and other fees

23,721

18,475

Accommodations revenue

8,671

9,048

Total revenue

450,269

451,222

Operating expenses (excluding depreciation and amortization shown separately below)

208,159

206,531

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

83,395

85,520

Costs of products sold

37,591

38,925

Depreciation

52,540

59,111

Amortization

1,330

7,198

Stock-based compensation

11,099

14,419

Loss on disposal of assets

2,573

2,634

Gain on sale of investee

(10,031)

—

Interest expense, net

35,816

36,977

Other (income) expense, net

4

Income (loss) before income taxes

28,051

(97)

Income tax expense (benefit)

3,940

(4,044)

Net income

24,111

3,947

Less: Net income attributable to noncontrolling interests

(19,006)

(19,113)

Net income (loss) attributable to Six Flags Entertainment Corporation

$

5,105

$

(15,166)

Weighted-average common shares outstanding:

Weighted-average number of common shares outstanding — basic

95,091

98,822

Weighted-average number of common shares outstanding — diluted

99,008

98,822

Net income (loss) per average common share outstanding:

Net income (loss) per average common share outstanding — basic

$

0.05

$

(0.15)

Net income (loss) per average common share outstanding — diluted

$

0.05

$

(0.15)

Three Months Ended

(Amounts in thousands, except per share data)

June 30, 2014

June 30, 2013

Net income

$

85,312

$

66,060

Income tax expense

38,551

32,355

Other (income) expense, net

(64)

426

Interest expense, net

17,787

18,580

Loss on disposal of assets

781

1,564

Gain on sale of investee

(10,031)

—

Amortization

665

3,599

Depreciation

25,511

27,564

Stock-based compensation

5,740

7,322

Impact of Fresh Start valuation adjustments ⁽²⁾

91

147

Modified EBITDA ⁽³⁾

164,343

157,617

Third party interest in EBITDA of certain operations ⁽⁴⁾

(19,006)

(19,269)

Adjusted EBITDA ⁽³⁾

145,337

138,348

Cash paid for interest, net

(5,909)

(6,748)

Capital expenditures, net of property insurance recoveries in 2014

(39,225)

(35,739)

Cash taxes ⁽⁵⁾

(1,908)

(2,611)

Free Cash Flow ⁽⁶⁾

$

98,295

$

93,250

Weighted-average number of common shares outstanding — basic

95,224

95,751

Cash Earnings Per Share

$

1.03

$

0.97

Six Months Ended

(Amounts in thousands, except per share data)

June 30, 2014

June 30, 2013

Net income

$

24,111

$

3,947

Income tax expense (benefit)

3,940

(4,044)

Other (income) expense, net

(254)

4

Interest expense, net

35,816

36,977

Loss on disposal of assets

2,573

2,634

Gain on sale of investee

(10,031)

—

Amortization

1,330

7,198

Depreciation

52,540

59,111

Stock-based compensation

11,099

14,419

Impact of Fresh Start valuation adjustments ⁽²⁾

183

292

Modified EBITDA ⁽³⁾

121,307

120,538

Third party interest in EBITDA of certain operations ⁽⁴⁾

(19,006)

(20,295)

Adjusted EBITDA ⁽³⁾

102,301

100,243

Cash paid for interest, net

(33,004)

(13,247)

Capital expenditures, net of property insurance recoveries in 2014

(81,345)

(72,339)

Cash taxes ⁽⁵⁾

(6,338)

(8,019)

Free Cash Flow ⁽⁶⁾

$

(18,386)

$

6,638

Weighted-average number of common shares outstanding — basic

95,091

98,822

Cash (Loss) Earnings Per Share

$

(0.19)

$

0.07

Last Twelve Months Ended

(Amounts in thousands, except per share data)

June 30, 2014

June 30, 2013

Net income

$

177,037

$

431,224

Income from discontinued operations

(549)

(7,325)

Income tax expense (benefit)

55,585

(185,636)

Reorganization items, net

—

939

Other expense, net

796

1,333

Loss on debt extinguishment

789

587

Equity in loss of investee

—

1,652

Interest expense, net

72,984

60,786

Loss on disposal of assets

8,518

8,284

Gain on sale of investee

(10,031)

(67,319)

Amortization

8,525

14,427

Depreciation

107,111

122,517

Stock-based compensation

23,714

45,161

Impact of Fresh Start valuation adjustments ⁽²⁾

485

797

Modified EBITDA ⁽³⁾

444,964

427,427

Third party interest in EBITDA of certain operations ⁽⁴⁾

(38,794)

(39,648)

Adjusted EBITDA ⁽³⁾

406,170

387,779

Cash paid for interest, net

(71,106)

(34,259)

Capital expenditures, net of property insurance recoveries in 2014

(110,859)

(106,529)

Cash taxes ⁽⁵⁾

(12,087)

(11,027)

Free Cash Flow ⁽⁶⁾

$

212,118

$

235,964

Weighted-average number of common shares outstanding — basic

95,089

102,938

Cash Earnings Per Share

$

2.23

$

2.29

Balance Sheet Data ⁽¹⁾

As of

(Amounts in thousands)

June 30, 2014

December 31, 2013

Cash and cash equivalents (excluding restricted cash)

$

117,242

$

169,310

Total assets

2,728,839

2,607,814

Deferred income

128,909

60,443

Current portion of long-term debt

6,279

6,269

Long-term debt (excluding current portion)

1,391,772

1,394,334

Redeemable noncontrolling interests

456,551

437,569

Total equity

303,491

373,337

Shares outstanding

95,421

94,857

(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.