Market Overview

Eighth Consecutive Record Year for Six Flags

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Fourth Quarter Revenue Grows 7 Percent While Net Income Grows $96
Million and Modified EBITDA Increases 16 Percent

Six Flags Entertainment Corporation (NYSE:SIX), the world's largest
regional theme park company, today announced that 2017 represented its
eighth consecutive year of record financial performance as revenue grew
$40 million or 3 percent to $1.4 billion. The full-year revenue growth
resulted primarily from the success of the company's pricing strategy
and international licensing program, as well as an increase in the
number of guests visiting Six Flags parks. Attendance at Six Flags
properties in 2017 grew by 1 percent or 0.3 million to 30.4 million
guests, driven by the opening of two new waterparks and the continued
success of selling season passes and memberships, whose holders
accounted for 63 percent of total visitation.

Net income for the year increased by $156 million or 131 percent, driven
by a reduction in stock-based compensation expense, an upward adjustment
of $85 million as a result of tax reform, and continued operating
earnings growth. Diluted earnings per share for 2017 was $3.09,
representing an increase of $1.84 or 147 percent compared to 2016.
Adjusted EBITDA1 for the full year grew to a new high of $519
million, up $13 million or 2 percent over the prior year, while Modified
EBITDA2 for the year was $558 million. Six Flags 2017
Modified EBITDA margin of 41.1 percent continues to lead the industry.

"I am very proud that we have achieved our eighth consecutive year of
record performance in the face of unprecedented natural events," said
Jim Reid-Anderson, Chairman, President and CEO. "With our growing Active
Pass Base, ongoing price increases, higher penetration of culinary
programs, and new international licensing agreements and waterparks, we
are very well-positioned to deliver another record year in 2018. We are
laser-focused on overachieving $600 million of Modified EBITDA in 2018
and continue to work toward our long-term aspirational goal of $750
million of Modified EBITDA by 2020."

Fourth quarter 2017 revenue grew $17 million or 7 percent over the
fourth quarter of 2016 to a new record of $257 million. The strong
revenue growth was primarily driven by a $9 million increase in
international licensing revenue and a 7 percent increase in guest
spending per capita. Net income for the fourth quarter of 2017 was $98
million, and Adjusted EBITDA of $87 million represented an increase of
$12 million or 16 percent over the fourth quarter of 2016.

The company's Active Pass Base, which represents the total number of
guests who have purchased a season pass or who are enrolled in the
company's membership program, increased 10 percent to a new all-time
high as of December 31, 2017. Increasing season pass and membership
penetration is a key tenet of the company's growth strategy, providing a
recurring revenue stream and a platform to further grow attendance as
the company expands its network of parks. Season pass holders and
members are the company's most valuable guests, generating more than
double the revenue and cash flow of a single-day guest over the course
of a season. They are also the company's most loyal guests, serving as
an excellent hedge against inclement weather throughout the season.

Deferred revenue increased by $18 million or 15 percent over prior year
to $142 million as of December 31, 2017, primarily due to a higher level
of season pass, membership and all season dining pass sales for the 2018
season.

Total guest spending per capita in 2017 was $41.61, an increase of $0.54
or 1 percent compared to 2016, as ticket price gains were partially
offset by lower in-park spending per capita. Admissions revenue per
capita increased $0.61 to $24.37 and in-park spending per capita
decreased $0.07 to $17.24. For the fourth quarter of 2017, guest
spending per capita was $37.90, an increase of $2.51 or 7 percent over
the fourth quarter of 2016, driven by both higher realized ticket prices
and higher in-park spending.

In 2017, the company generated $275 million of Adjusted Free Cash Flow3
after investing $135 million in new capital projects, net of insurance
proceeds. Capital expenditures included the remaining half of the
incremental $18 million investment into the company's new waterpark in
Oaxtepec, Mexico. The company also paid $227 million in dividends, or
$2.62 per common share for the year, and repurchased $499 million or 8.4
million shares of its common stock, leaving 84.5 million shares of
common stock outstanding as of December 31, 2017. The authorized share
repurchase amount available as of December 31, 2017, was $343 million.

Net Debt4 as of December 31, 2017, calculated as total
reported debt of $2.02 billion less cash and cash equivalents of $77
million, was $1.94 billion, representing a net leverage ratio of 3.7
times Adjusted EBITDA.

Conference Call

At 8:00 a.m. Central Time today, February 20, 2018, the company will
host a conference call to discuss its fourth quarter and full year 2017
financial performance. The call is accessible through either the Six
Flags Investor Relations website at investors.sixflags.com or by dialing
1-855-889-1976 in the United States or +1-937-641-0558 outside the
United States and requesting the Six Flags earnings call. A replay of
the call will be available by dialing 1-855-859-2056 or +1-404-537-3406
through February 27, 2018 and requesting conference ID 1772358.

About Six Flags Entertainment Corporation

Six Flags Entertainment Corporation is the world's largest regional
theme park company with $1.4 billion in revenue and 20 parks across the
United States, Mexico and Canada. For 57 years, Six Flags has
entertained millions of families with world-class coasters, themed
rides, thrilling waterparks and unique attractions. For more
information, visit www.sixflags.com.

Forward-Looking Statements

The information contained in this release, other than historical
information, consists of forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act. These statements may involve risks and uncertainties that
could cause actual results to differ materially from those described in
such statements. These risks and uncertainties include, among others,
(i) the adequacy of cash flows from operations, available cash and
available amounts under our credit facilities to meet our future
liquidity needs, (ii) our ability to roll out our capital enhancements
in a timely and cost effective manner, (iii) our ability to improve
operating results by implementing strategic cost reductions, and
organizational and personnel changes without adversely affecting our
business, (iv) our operations and results of operations, and (v) the
risk factors or uncertainties listed from time to time in the company's
filings with the Securities and Exchange Commission ("SEC"). In
addition, important factors, including factors impacting attendance,
such as local conditions, natural disasters, contagious diseases,
events, disturbances and terrorist activities; recall of food, toys and
other retail products sold at our parks; risk of accidents occurring at
the company's parks or other parks in the industry and adverse publicity
concerning our parks or other parks in the industry; inability to
achieve desired improvements and our aspirational financial performance
goals; adverse weather conditions such as excess heat or cold, rain and
storms; general financial and credit market conditions; economic
conditions (including customer spending patterns); changes in public and
consumer tastes; construction delays in capital improvements or ride
downtime; competition with other theme parks and other entertainment
alternatives; dependence on a seasonal workforce; unionization
activities and labor disputes; laws and regulations affecting labor and
employee benefit costs, including increases in state and federally
mandated minimum wages, and healthcare reform; pending, threatened or
future legal proceedings and the significant expenses associated with
litigation; cyber security risks and other factors could cause actual
results to differ materially from the company's expectations. Although
the company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that
such expectations will be realized and actual results could vary
materially. Reference is made to a more complete discussion of
forward-looking statements and applicable risks contained under the
captions "Cautionary Note Regarding Forward-Looking Statements" and
"Risk Factors" in the company's Annual and Quarterly Reports on Forms
10-K and 10-Q, and its other filings and submissions with the SEC, each
of which are available free of charge on the company's investor
relations website at investors.sixflags.com and on the SEC's website at www.sec.gov.

Footnotes

(1)     See the following financial statements and Note 3 to those financial
statements for a discussion of Adjusted EBITDA (a non-GAAP financial
measure) and its reconciliation to net income (loss).
(2) See the following financial statements and Note 3 to those financial
statements for a discussion of Modified EBITDA (a non-GAAP financial
measure) and its reconciliation to net income (loss).
(3) See the following financial statements and Note 6 to those financial
statements for a discussion of Adjusted Free Cash Flow (a non-GAAP
financial measure) and its reconciliation to net cash provided by
operating activities.
(4) Net Debt (a non-GAAP financial measure) represents total long-term
debt as reported, 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 Year Ended
(Amounts in thousands, except per share data) December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016
Theme park admissions $ 137,170 $ 130,143 $ 741,275 $ 715,413
Theme park food, merchandise and other 95,549 93,874 524,582 521,167
Sponsorship, licensing and other fees 21,302 12,393 78,096 66,329
Accommodations revenue 2,735   2,904   15,121   16,489  
Total revenue 256,756 239,314 1,359,074 1,319,398
Operating expenses (excluding depreciation and amortization shown
separately below)
104,581 102,031 509,123 489,407
Selling, general and administrative expense (excluding depreciation,
amortization and stock-based compensation shown separately below)
45,536 42,593 181,195 175,455
Costs of products sold 19,353 19,144 110,374 109,579
Depreciation 28,430 26,899 109,206 104,290
Amortization 595 649 2,465 2,603
Stock-based compensation 16,358 20,095 (22,697 ) 116,339
(Gain) loss on disposal of assets (378 ) 1,055 3,959 1,968
Interest expense, net 25,132 21,058 99,010 81,872
Loss on debt extinguishment 7 558 37,116 2,935
Other expense (income), net 231   (325 ) 271   1,684  
Income before income taxes 16,911 5,557 329,052 233,266
Income tax (benefit) expense (81,102 ) 3,689   16,026   76,539  
Net income 98,013 1,868 313,026 156,727
Less: Net income attributable to noncontrolling interests     (39,210 ) (38,425 )
Net income attributable to Six Flags Entertainment Corporation $ 98,013   $ 1,868   $ 273,816   $ 118,302  
 
Weighted-average number of common shares outstanding:
Basic: 84,209 91,785 86,802 92,349
Diluted: 85,849 93,668 88,494 94,398
 
Net income per average common share outstanding:
Basic: $ 1.16   $ 0.02   $ 3.15   $ 1.28  
Diluted: $ 1.14   $ 0.02   $ 3.09   $ 1.25  
 
 
Balance Sheet Data
 
As of
(Amounts in thousands) December 31, 2017 December 31, 2016
Cash and cash equivalents (excluding restricted cash) $ 77,496 $ 137,385
Total assets 2,456,676 2,487,672
 
Deferred revenue 142,014 123,955
Current portion of long-term debt 29,161
Long-term debt (excluding current portion) 2,021,178 1,624,486
 
Redeemable noncontrolling interests 494,431 485,876
 
Total stockholders' deficit (505,112 ) (186,490 )
 
Shares outstanding 84,488 90,849
 
 

SIX FLAGS ENTERTAINMENT CORPORATION

Definition and Reconciliation of Non-GAAP Financial Measures

We prepare our financial statements in accordance with United States
generally accepted accounting principles ("GAAP"). In our press release,
we make reference to non-GAAP financial measures including Modified
EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow. The definition for
each of these non-GAAP financial measures is set forth below in the
notes to the reconciliation tables. We believe that these non-GAAP
financial measures provide important and useful information for
investors to facilitate a comparison of our operating performance on a
consistent basis from period to period and make it easier to compare our
results with those of other companies in our industry. We use these
measures for internal planning and forecasting purposes, to evaluate
ongoing operations and our performance generally, and in our annual and
long-term incentive plans. By providing these measures, we provide our
investors with the ability to review our performance in the same manner
as our management.

However, because these non-GAAP financial measures are not determined in
accordance with GAAP, they are susceptible to varying calculations, and
not all companies calculate these measures in the same manner. As a
result, these non-GAAP financial measures as presented may not be
directly comparable to a similarly titled non-GAAP financial measure
presented by another company. These non-GAAP financial measures are
presented as supplemental information and not as alternatives to any
GAAP financial measures. When reviewing a non-GAAP financial measure, we
encourage our investors to fully review and consider the related
reconciliation as detailed below.

The following table sets forth a reconciliation of net income to
Adjusted EBITDA for the three months and years ended December 31, 2017
and December 31, 2016:

      Three Months Ended       Year Ended
(Amounts in thousands) December 31, 2017       December 31, 2016 December 31, 2017       December 31, 2016
Net income $ 98,013 $ 1,868 $ 313,026 $ 156,727
Income tax (benefit) expense (81,102 ) 3,689 16,026 76,539
Other expense (income), net 231 (325 ) 271 1,684
Loss on debt extinguishment 7 558 37,116 2,935
Interest expense, net 25,132 21,058 99,010 81,872
(Gain) loss on disposal of assets (378 ) 1,055 3,959 1,968
Amortization 595 649 2,465 2,603
Depreciation 28,430 26,899 109,206 104,290
Stock-based compensation 16,358 20,095 (22,697 ) 116,339
Impact of Fresh Start valuation adjustments (2) 11   23   40   89  
Modified EBITDA (3) 87,297 75,569 558,422 545,046
Third party interest in EBITDA of certain operations (4)     (39,210 ) (38,425 )
Adjusted EBITDA (3) $ 87,297   $ 75,569   $ 519,212   $ 506,621  
 
Weighted-average common shares outstanding — basic: 84,209 91,785 86,802 92,349
 

SIX FLAGS ENTERTAINMENT CORPORATION

The following table sets forth a reconciliation of net cash provided by
operating activities to Adjusted Free Cash Flow for the three months and
years ended December 31, 2017 and December 31, 2016:

      Three Months Ended       Year Ended
(Amounts in thousands) December 31, 2017       December 31, 2016 December 31, 2017       December 31, 2016
Net cash provided by operating activities $ 65,411 $ 88,481 $ 445,067 $ 463,235
Changes in working capital (2,716 ) (35,814 ) 4,470 (11,147 )
Interest expense, net 25,132 21,058 99,010 81,872
Income tax (benefit) expense (81,102 ) 3,689 16,026 76,539
Amortization of debt issuance costs (960 ) (1,172 ) (4,061 ) (4,503 )
Other (income) expense, net (4,999 ) 2,457 (2,645 ) 2,660
Interest accretion on notes payable (333 ) (91 ) (1,056 ) (413 )
Changes in deferred income taxes 86,853 (3,062 ) 1,571 (63,286 )
Impact of Fresh Start valuation adjustments (2) 11 23 40 89
Third party interest in EBITDA of certain operations (4) (39,210 ) (38,425 )
Capital expenditures, net of property insurance recoveries (18,148 ) (28,024 ) (134,696 ) (128,938 )
Cash paid for interest, net (18,613 ) (5,414 ) (95,289 ) (68,815 )
Cash taxes (5) (3,294 ) (3,267 ) (14,473 ) (17,267 )
Adjusted Free Cash Flow (6) $ 47,242   $ 38,864   $ 274,754   $ 291,601  
 
Weighted-average common shares outstanding — basic: 84,209 91,785 86,802 92,349
 
(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 our
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. 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 Adjusted EBITDA of
properties that are less than wholly owned (consisting of Six Flags
Over Georgia, Six Flags White Water Atlanta 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.
 
(4) Represents interests of third parties in the Adjusted EBITDA of Six
Flags Over Georgia, Six Flags Over Texas and Six Flags White Water
Atlanta.
 
(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 two years. Cash taxes paid represents statutory taxes paid,
primarily driven by Mexico and state level obligations.
 
(6) Management uses Adjusted Free Cash Flow, a non-GAAP measure, in its
financial and operational decision making processes, for internal
reporting, and as part of its forecasting and budgeting processes as
it provides additional transparency of our operations. Management
believes that Adjusted Free Cash Flow is useful information to
investors regarding the amount of cash that we estimate that we will
generate from operations over a certain period. Management believes
the presentation of this measure will enhance the investors' ability
to analyze trends in the business and evaluate the Company's
underlying performance relative to other companies in the industry.
A reconciliation from net cash provided by operating activities to
Adjusted Free Cash Flow is presented in the table above. Adjusted
Free Cash Flow as presented herein may differ from similarly titled
measures presented by other companies.
 

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