Market Overview

Record Start to 2018 at Six Flags

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First Quarter Revenue Grows 30 Percent Driven by 27 Percent Increase in
Attendance

Six Flags Entertainment Corporation (NYSE:SIX), the world's largest
regional theme park company, today announced that revenue for the first
quarter of 2018 increased by $29 million or 30 percent from the first
quarter of 2017 to a record-high $129 million. The revenue growth
resulted primarily from a 27 percent increase in the number of guests
visiting Six Flags parks, and the success of both the company's pricing
strategy and international licensing program. Attendance at Six Flags
properties grew by 0.5 million to 2.4 million guests. This increase was
driven by additional operating days from Six Flags Magic Mountain moving
to a 365-day calendar; Hurricane Harbor Mexico being open in the first
quarter, while not open in the first quarter of 2017; adjustments to
park operating schedules due to the earlier timing of the Easter
holiday; and additional attendance due to the company's higher 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.

"We are firing on all cylinders as we made excellent progress in the
quarter against each of our five growth initiatives," said Jim
Reid-Anderson, Chairman, President and CEO. "With our record-high Active
Pass Base, ongoing price increases across all ticket and culinary
programs, growing dining pass penetration, new water park openings and
new international licensing agreements, we are poised to deliver another
record year of financial performance in 2018. We remain laser-focused on
exceeding $600 million of Modified EBITDA1 in 2018 and
continue to work toward our long-term aspirational goal of $750 million
of Modified EBITDA by 2020."

Since most of the parks were not scheduled to be open during the first
quarter, the company had a net loss during the quarter of $62 million.
The loss per share for the first quarter of 2018 was $0.74 compared to a
loss per share of $0.63 in the first quarter of 2017, primarily due to a
reduced tax benefit in the quarter because of federal tax reform.
Adjusted EBITDA2 for the first quarter was a loss of $19
million, an improvement of $16 million over the prior year period
primarily due to the 27 percent increase in attendance and higher guest
spending per capita. Modified EBITDA for the twelve months ended March
31, 2018, was $574 million, an increase of $41 million or 8 percent
compared to the twelve months ended March 31, 2017. Modified EBITDA
margin for the 12-month period improved to a new industry high of 41.4
percent.

The company's Active Pass Base increased 10 percent year-over-year to a
new all-time high for the first quarter. Increasing season pass and
membership penetration is a key tenet of the company's growth strategy,
providing a platform of recurring revenue and the ability to further
grow attendance as the company expands its network of parks. Season pass
holders, and especially members, are the company's most loyal and
valuable guests, generating more recurring revenue and cash flow for the
company than a single day guest. Season passes and memberships also
provide an excellent hedge against inclement weather throughout the
season.

Deferred revenue of $182 million as of March 31, 2018, increased by $25
million or 16 percent from March 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 for the first quarter of 2018 was
$46.07, an increase of $1.78 or 4 percent compared to the first quarter
of 2017. Admissions revenue per capita increased $0.66 to $28.15 and
in-park spending per capita increased $1.12 to $17.93. Favorable foreign
currency rate translation accounted for $0.59 of the increase in total
guest spending per capita, although it had a negligible impact on
Modified EBITDA and Adjusted EBITDA.

In the first quarter of 2018, the company invested $42 million in new
capital projects. The company also paid $66.0 million in dividends, or
$0.78 per common share, and repurchased 1.3 million shares of its common
stock at an aggregate cost of $81 million, leaving 83.5 million shares
of stock outstanding as of March 31, 2018. The authorized share
repurchase amount available as of March 31, 2018, was $262 million.

Net Debt3 as of March 31, 2018, calculated as total reported
debt of $2.18 billion less cash and cash equivalents of $33 million, was
$2.14 billion, representing a net leverage ratio of 4.0 times Adjusted
EBITDA.

Previous Announcements

On February 20, 2018, the company announced an ambitious initiative to
power two more of its parks almost entirely with solar power, bringing
the number of parks in this program to three. Once the projects are
constructed, the company expects to save approximately $3 million per
year in energy costs.

On March 26, 2018, the company announced that its lenders approved a
reduction to the borrowing rate on the company's Term Loan B Credit
Facility, reducing the company's borrowing rate by 25 basis points. In
conjunction with the repricing, the company increased the size of its
Term Loan B Credit Facility by $39 million, which funded on April 18,
2018. Proceeds will be used for general corporate purposes, including
share repurchases.

On April 4, 2018, the company and Saudi Arabia's Public Investment Fund
(PIF) announced plans to develop a Six Flags-branded theme park in the
city of Riyadh.

On April 24, 2018, the company and its partner in China, Riverside
Investment Group, announced a licensing agreement to develop three Six
Flags-branded parks in Nanjing, China, which will be the partner's third
park complex. The parks are expected to begin opening in 2021.

Conference Call

At 8:00 a.m. Central Time tomorrow, April 25, 2018, the company will
host a conference call to discuss its first quarter 2018 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 May 2, 2018 and requesting conference ID 1772359.

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 water parks 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 Modified 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 Adjusted EBITDA (a non-GAAP financial
measure) and its reconciliation to net income (loss).
 
(3) 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 Twelve Months Ended
(Amounts in thousands, except per share data)

March 31,
2018

March 31,
2017

March 31,
2018

March 31,
2017

Theme park admissions $ 66,321 $ 50,948 $ 756,648 $ 708,280
Theme park food, merchandise and other 42,246 31,160 535,668 514,037
Sponsorship, licensing and other fees 16,092 13,290 80,898 65,187
Accommodations revenue   4,305     4,130     15,296     16,003  
Total revenue 128,964 99,528 1,388,510 1,303,507
Operating expenses (excluding depreciation and amortization shown
separately below)
102,500 92,900 521,473 489,061
Selling, general and administrative expense (excluding depreciation,
amortization and stock-based compensation shown separately below)
36,385 34,983 183,169 176,723
Costs of products sold 10,463 7,581 113,256 107,022
Other net periodic pension benefit (1,277 ) (846 ) (3,753 ) (2,253 )
Depreciation 28,018 26,643 110,581 105,555
Amortization 611 648 2,428 2,601
Stock-based compensation 4,553 11,990 (30,134 ) 126,323
Loss on disposal of assets 1,911 670 5,200 3,121
Interest expense, net 25,885 21,001 103,894 83,415
Loss on debt extinguishment

37,116 2,935
Other expense (income), net   1,935     (903 )   3,109     82  
(Loss) income before income taxes (82,020 ) (95,139 ) 342,171 208,922
Income tax (benefit) expense   (19,675 )   (37,591 )   33,942     62,808  
Net (loss) income (62,345 ) (57,548 ) 308,229 146,114
Less: Net income attributable to noncontrolling interests           39,210     38,425  
Net (loss) income attributable to Six Flags Entertainment Corporation $ (62,345 ) $ (57,548 ) $ 269,019   $ 107,689  
 
Weighted-average number of common shares outstanding:
Weighted-average common shares outstanding — basic: 84,457 91,151 85,151 92,051
Weighted-average common shares outstanding — diluted: 84,457 91,151 86,689 94,011
 
Net (loss) income per average common share outstanding:
Net (loss) income per average common share outstanding — basic: $ (0.74 ) $ (0.63 ) $ 3.16   $ 1.17  
Net (loss) income per average common share outstanding — diluted: $ (0.74 ) $ (0.63 ) $ 3.10   $ 1.15  
Balance Sheet Data
   
As of
(Amounts in thousands) March 31, 2018 December 31, 2017
Cash and cash equivalents (excluding restricted cash) $ 33,055 $ 77,496
Total assets 2,443,991 2,456,676
 
Deferred revenue 182,268 142,014

Short-term borrowings

155,000

Long-term debt (excluding current portion) 2,021,675 2,021,178
 
Redeemable noncontrolling interests 494,431 494,431
 
Total stockholders' deficit (698,175 ) (505,112 )
 
Shares outstanding 83,536 84,488
 

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 (loss) income to
Adjusted EBITDA for the three months and twelve months ended March 31,
2018 and March 31, 2017:

   
Three Months Ended Twelve Months Ended
(Amounts in thousands)

March 31,
2018

 

March 31,
2017

March 31,
2018

 

March 31,
2017

Net (loss) income $ (62,345 ) $ (57,548 ) $ 308,229 $ 146,114
Income tax (benefit) expense (19,675 ) (37,591 ) 33,942 62,808
Other expense (income), net 1,935 (903 ) 3,109 82
Loss on debt extinguishment 37,116 2,935
Interest expense, net 25,885 21,001 103,894 83,415
Loss on disposal of assets 1,911 670 5,200 3,121
Amortization 611 648 2,428 2,601
Depreciation 28,018 26,643 110,581 105,555
Stock-based compensation 4,553 11,990 (30,134 ) 126,323
Impact of Fresh Start valuation adjustments (2)   3     10     33     77  
Modified EBITDA (3) (19,104 ) (35,080 ) 574,398 533,031
Third party interest in EBITDA of certain operations (4)           (39,210 )   (38,425 )
Adjusted EBITDA (3) $ (19,104 ) $ (35,080 ) $ 535,188   $ 494,606  
 
Weighted-average common shares outstanding — basic: 84,457 91,151 85,151 92,051
 

SIX FLAGS ENTERTAINMENT CORPORATION

The following table sets forth a reconciliation of net cash (used in)
provided by operating activities to Adjusted Free Cash Flow for the
three months and twelve months ended March 31, 2018 and March 31, 2017:

   
Three Months Ended Twelve Months Ended
(Amounts in thousands)

March 31,
2018

 

March 31,
2017

March 31,
2018

 

March 31,
2017

Net cash (used in) provided by operating activities $ (22,807 ) $ (60,588 ) $ 482,848 $ 455,652
Changes in working capital (28,004 ) 2,942 (26,476 ) (13,282 )
Interest expense, net 25,885 21,001 103,894 83,415
Income tax (benefit) expense (19,675 ) (37,591 ) 33,942 62,808
Amortization of debt issuance costs (962 ) (1,171 ) (3,852 ) (4,608 )
Other expense (income), net 26 1,171 (3,790 ) 1,826
Interest accretion on notes payable (335 ) (92 ) (1,299 ) (388 )
Changes in deferred income taxes 26,765 39,238 (10,902 ) (52,469 )
Impact of Fresh Start valuation adjustments (2) 3 10 33 77
Third party interest in EBITDA of certain operations (4) (39,210 ) (38,425 )
Capital expenditures (42,483 ) (51,634 ) (125,545 ) (138,030 )
Cash paid for interest, net (29,622 ) (35,774 ) (89,137 ) (75,907 )
Cash taxes (5)   (6,994 )   (2,662 )   (18,805 )   (13,950 )
Adjusted Free Cash Flow (6) $

(98,203

) $ (125,150 ) $

301,701

  $ 266,719  
 
Weighted-average common shares outstanding — basic: 84,457 91,151 85,151 92,051
 
(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 (used in) 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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