Record First-Quarter Financial 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)

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.

(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, and short-term bank borrowings less cash and cash equivalents.

SIX FLAGS ENTERTAINMENT CORPORATION

Statement of Operations Data ⁽¹⁾

Three Months Ended

(Amounts in thousands, except per share data)

March 31, 2015

March 31, 2014

Theme park admissions

$

40,546

$

34,710

Theme park food, merchandise and other

28,225

25,967

Sponsorship, licensing and other fees

11,442

8,178

Accommodations revenue

4,942

4,863

85,155

73,718

Operating expenses (excluding depreciation and amortization shown separately below)

83,362

81,628

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

32,280

28,975

Costs of products sold

7,185

6,243

Depreciation

26,137

27,029

Amortization

658

665

Stock-based compensation

22,307

5,359

Loss on disposal of assets

666

1,792

Interest expense, net

18,587

18,029

Other income, net

(72)

(190)

Loss before income taxes

(105,955)

(95,812)

Income tax benefit

(35,629)

(34,611)

Net loss

$

(70,326)

$

(61,201)

Weighted-average number of common shares outstanding - basic and diluted:

93,855

94,958

Net loss per average common share outstanding - basic and diluted:

$

(0.75)

$

(0.64)

SIX FLAGS ENTERTAINMENT CORPORATION

The following table sets forth a reconciliation of net (loss) income to Adjusted EBITDA and Free Cash Flow for the three and twelve months ended March 31, 2015 and March 31, 2014:

Three Months Ended

Twelve Months Ended

(Amounts in thousands, except per share data)

March 31, 2015

March 31, 2014

March 31, 2015

March 31, 2014

Net (loss) income

$

(70,326)

$

(61,201)

$

104,909

$

157,785

Income from discontinued operations

—

—

(545)

(549)

Income tax (benefit) expense

(35,629)

(34,611)

45,504

49,389

Other (income) expense, net

(72)

(190)

474

1,286

Loss on debt extinguishment

—

—

—

789

Interest expense, net

18,587

18,029

73,147

73,777

Loss on disposal of assets

666

1,792

4,734

9,301

Gain on sale of investee

—

—

(10,031)

—

Amortization

658

665

2,651

11,459

Depreciation

26,137

27,029

104,557

109,164

Stock-based compensation

22,307

5,359

156,986

25,296

Impact of Fresh Start valuation adjustments ⁽²⁾

39

92

316

541

Modified EBITDA ⁽³⁾

(37,633)

(43,036)

482,702

438,238

Third party interest in EBITDA of certain operations ⁽⁴⁾

—

—

(38,012)

(39,057)

Adjusted EBITDA ⁽³⁾

(37,633)

(43,036)

444,690

399,181

Cash paid for interest, net

(27,561)

(27,095)

(67,143)

(71,945)

Capital expenditures, net of property insurance recoveries

(33,859)

(42,120)

(99,549)

(107,373)

Cash taxes ⁽⁵⁾

(3,835)

(4,430)

(16,177)

(12,790)

Free Cash Flow ⁽⁶⁾

$

(102,888)

$

(116,681)

$

261,821

$

207,073

Weighted-average number of common shares outstanding — basic

93,855

94,958

94,205

95,217

Cash (Loss) Earnings Per Share

$

(1.10)

$

(1.23)

$

2.78

$

2.17

SIX FLAGS ENTERTAINMENT CORPORATION

Balance Sheet Data ⁽¹⁾

As of

(Amounts in thousands)

March 31, 2015

December 31, 2014

Cash and cash equivalents (excluding restricted cash)

$

16,348

$

73,884

Total assets

2,480,428

2,534,919

Deferred income

98,939

71,598

Short-term bank borrowings

80,000

—

Current portion of long-term debt

6,303

6,301

Long-term debt (excluding current portion)

1,387,934

1,389,215

Redeemable noncontrolling interests

437,545

437,545

Total equity

124,588

223,895

Shares outstanding

94,867

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.