Another Record Performance at Six Flags

Footnotes

(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)

Constant Currency calculations assume prior year results are translated at current year foreign exchange rates.

(3)

Cash EPS (or Cash Earnings Per Share), which is defined as Free Cash Flow^, as described in Note 6 to the following financial statements, 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.

(4)

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

(5)

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

SIX FLAGS ENTERTAINMENT CORPORATION

Statement of Operations Data ⁽¹⁾

Three Months Ended

Six Months Ended

(Amounts in thousands, except per share data)

June 30, 2015

June 30, 2014

June 30, 2015

June 30, 2014

Theme park admissions

$

206,998

$

205,428

$

247,544

$

240,138

Theme park food, merchandise and other

161,419

151,772

189,644

177,739

Sponsorship, licensing and other fees

13,676

15,543

25,118

23,721

Accommodations revenue

3,972

3,808

8,914

8,671

Total revenue

386,065

376,551

471,220

450,269

Operating expenses (excluding depreciation and amortization shown separately below)

132,771

126,531

216,133

208,159

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

50,994

54,420

83,274

83,395

Costs of products sold

34,182

31,348

41,367

37,591

Depreciation

24,925

25,511

51,062

52,540

Amortization

657

665

1,315

1,330

Stock-based compensation

4,408

5,740

26,715

11,099

Loss on disposal of assets

1,567

781

2,233

2,573

Gain on sale of investee

—

(10,031)

—

(10,031)

Interest expense, net

18,938

17,787

37,525

35,816

Loss on debt extinguishment

6,557

—

6,557

—

Other income, net

(407)

(64)

(479)

(254)

Income before income taxes

111,473

123,863

5,518

28,051

Income tax expense (benefit)

26,859

38,551

(8,770)

3,940

Net income

84,614

85,312

14,288

24,111

Net income attributable to noncontrolling interests

(19,082)

(19,006)

(19,082)

(19,006)

Net income (loss) attributable to Six Flags Entertainment Corporation

$

65,532

$

66,306

$

$

5,105

Weighted-average number of common shares outstanding:

Weighted-average number of common shares outstanding — basic

94,834

95,224

94,347

95,091

Weighted-average number of common shares outstanding — diluted

97,382

99,162

94,347

99,008

Net income (loss) per average common share outstanding:

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

$

0.69

$

0.70

$

(0.05)

$

0.05

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

$

0.67

$

0.67

$

(0.05)

$

0.05

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 six months ended June 30, 2015 and June 30, 2014:

Three Months Ended

Six Months Ended

(Amounts in thousands, except per share data)

June 30, 2015

June 30, 2014

June 30, 2015

June 30, 2014

Net income

$

84,614

$

85,312

$

14,288

$

24,111

Income tax expense (benefit)

26,859

38,551

(8,770)

3,940

Other income, net

(407)

(64)

(479)

(254)

Loss on debt extinguishment

6,557

—

6,557

—

Interest expense, net

18,938

17,787

37,525

35,816

Loss on disposal of assets

1,567

781

2,233

2,573

Gain on sale of investee

—

(10,031)

—

(10,031)

Amortization

657

665

1,315

1,330

Depreciation

24,925

25,511

51,062

52,540

Stock-based compensation

4,408

5,740

26,715

11,099

Impact of Fresh Start valuation adjustments ⁽²⁾

39

91

78

183

Modified EBITDA ⁽³⁾

168,157

164,343

130,524

121,307

Third party interest in EBITDA of certain operations ⁽⁴⁾

(19,082)

(19,006)

(19,082)

(19,006)

Adjusted EBITDA ⁽³⁾

149,075

145,337

111,442

102,301

Cash paid for interest, net

(6,944)

(5,909)

(34,505)

(33,004)

Capital expenditures, net of property insurance recoveries

(36,216)

(39,225)

(70,075)

(81,345)

Cash taxes ⁽⁵⁾

(1,098)

(1,908)

(4,933)

(6,338)

Free Cash Flow ⁽⁶⁾

$

104,817

$

98,295

$

1,929

$

Weighted-average number of common shares outstanding — basic

94,834

95,224

94,347

95,091

Cash Earnings (Loss) Per Share

$

1.11

$

1.03

$

0.02

$

SIX FLAGS ENTERTAINMENT CORPORATION

          The following table sets forth a reconciliation of net income to Adjusted EBITDA and Free Cash Flow for the twelve months ended June 30, 2015 and June 30, 2014:

Last Twelve Months Ended

(Amounts in thousands, except per share data)

June 30, 2015

June 30, 2014

Net income

$

104,211

$

177,037

Income from discontinued operations

(545)

(549)

Income tax expense

33,812

55,585

Other expense, net

131

796

Loss on debt extinguishment

6,557

789

Interest expense, net

74,298

72,984

Loss on disposal of assets

5,520

8,518

Gain on sale of investee

—

(10,031)

Amortization

2,643

8,525

Depreciation

103,971

107,111

Stock-based compensation

155,654

23,714

Impact of Fresh Start valuation adjustments ⁽²⁾

264

485

Modified EBITDA ⁽³⁾

486,516

444,964

Third party interest in EBITDA of certain operations ⁽⁴⁾

(38,088)

(38,794)

Adjusted EBITDA ⁽³⁾

448,428

406,170

Cash paid for interest, net

(68,178)

(71,106)

Capital expenditures, net of property insurance recoveries

(96,540)

(110,859)

Cash taxes ⁽⁵⁾

(15,367)

(12,087)

Free Cash Flow ⁽⁶⁾

$

268,343

$

212,118

Weighted-average number of common shares outstanding — basic

94,108

95,089

Cash Earnings Per Share

$

2.85

$

2.23

SIX FLAGS ENTERTAINMENT CORPORATION

Balance Sheet Data ⁽¹⁾

As of

(Amounts in thousands)

June 30, 2015

December 31, 2014

Cash and cash equivalents (excluding restricted cash)

$

154,785

$

73,884

Total assets

2,698,296

2,534,919

Deferred income

148,985

71,598

Current portion of long-term debt

7,484

6,301

Long-term debt (excluding current portion)

1,518,927

1,389,215

Redeemable noncontrolling interests

454,803

437,545

Total equity

135,475

223,895

Shares outstanding

94,760

92,938

(1)

Revenues and expenses of international operations are converted into U.S. dollars on an average basis as provided by accounting principles generally accepted in the United States ("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). 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, which are less than wholly owned. The Company purchased the noncontrolling interests from its partners in the Lodge in 2013.

(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.