Market Overview

Record First-Half Revenue for Six Flags

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Deferred Revenue Up $32 Million or 16 Percent and Active Pass Base up 8
Percent at End of June

Six Flags Entertainment Corporation (NYSE:SIX), the world's largest
regional theme park company and largest operator of waterparks in North
America, today announced that revenue for the second quarter of 2018
increased $23 million or 5 percent from the second quarter of 2017 to
$445 million. The revenue growth resulted primarily from a 3 percent
increase in attendance to 9.8 million guests, a 2 percent increase in
guest spending per capita and a 9 percent increase in sponsorship,
international licensing and accommodations revenue. Adjusting for the
nearly 200,000 guest visits that occurred during the first quarter
versus the second quarter due to the earlier timing of Easter in 2018
versus 2017, second quarter 2018 attendance grew 5 percent.

Net income for the quarter increased $22 million or 43 percent and
diluted earnings per share increased 49 percent to $0.88, primarily due
to a $37 million charge related to the early retirement of debt in April
2017 and the positive impact of tax reform, partially offset by an
increase in stock-based compensation related to accounting for the
company's Project 600 award. Adjusted EBITDA1 in the second
quarter 2018 increased $4 million or 3 percent to $170 million.

"I am very pleased with our continued strong momentum and execution in
the quarter as we expanded our global footprint and successfully
rolled-out our new, premium-tiered membership program," said Jim
Reid-Anderson, Chairman, President and CEO. "I am confident 2018 will be
another record year for our shareholders as we continue to innovate and
execute on our five-pillar strategy to drive our business to achieve our
aspirational goal of $750 million of Modified EBITDA2 by
2020."

Total guest spending per capita for the second quarter of 2018 was
$42.63, which was an increase of $0.96 or 2 percent compared to the
second quarter of 2017, as ticket price gains and premium membership
sales more than offset both the higher mix of season pass holder and
member attendance at all the company's parks and lower per capita
spending at the five new domestic parks, whose lease rights were
acquired by the company in June 2018. Admissions per capita increased 5
percent to $24.61 and in-park spending per capita decreased 2 percent to
$18.02.

For the first six months of 2018, revenue was $574 million, a 10 percent
increase compared to the prior year period, driven primarily by a 7
percent increase in attendance, a 3 percent increase in guest spending
per capita and a 12 percent increase in sponsorship, international
licensing and accommodations revenue. The company had net income of $12
million and diluted earnings per share of $0.14 for the first six months
of 2018 as compared to a diluted loss per share of $0.06 for the same
period in 2017. Adjusted EBITDA was $151 million for the first six
months of 2018, an increase of 16% versus the prior year period.

Attendance for the first six months of 2018 grew to 12.1 million guests
or 7 percent as compared to the first six months of 2017. The increase
in attendance was driven primarily by the five new domestic parks, the
two new waterparks in Mexico and California, and the impact of 365-day
operations at Six Flags Magic Mountain. Guest spending per capita
increased 3 percent to $43.30 for the first six months of 2018, with
admissions per capita increasing 5 percent and in-park spending per
capita decreasing less than 1 percent to $25.30 and $18.00, respectively.

The company's success in upselling guests from single day tickets to
memberships and season passes resulted in an 8 percent year-over-year
increase in its Active Pass Base, which represents the total number of
guests who are enrolled in the company's membership program or have a
season pass. The mix of memberships in the Active Pass Base
significantly increased as a result of the company's roll-out of a new,
premium-tiered membership program. Members are the company's most loyal
and valuable guests, with higher retention rates and higher revenue
compared to traditional season passes. Deferred revenue of $227 million
as of June 30, 2018, increased by $32 million or 16% percent over June
30, 2017, primarily due to the impact of the new North American parks,
incremental sales of memberships, and higher sales of all-season dining
products.

In the first half of 2018, the company invested $91 million in new
capital projects and $23 million, less net working capital and other
adjustments, to acquire the lease rights to five new parks; paid $131
million in dividends, or $0.78 per common share per quarter; and
repurchased $81 million of its common stock. The authorized share
repurchase amount available as of June 30, 2018, was $262 million. Net
Debt3 as of June 30, 2018, calculated as total reported debt
of $2,180 million less cash and cash equivalents of $69 million, was
$2,112 million, representing a 3.9 times Adjusted EBITDA net leverage
ratio.

Previous Announcements

On May 22, 2018, the company announced it had entered into a purchase
agreement with affiliates of Premier Parks, LLC to acquire the lease
rights to operate five parks owned by EPR Properties, expanding the
company's portfolio of North American parks to twenty-five.

On May 29, 2018, the company and its partner in China, the Riverside
Group, announced a licensing agreement to develop a Six Flags Kids
World, the fourth park in the Nanjing entertainment complex and the
eleventh park in China. The Kids World property is scheduled to open in
2021 with the waterpark and adventure park. The theme park is scheduled
to open in 2022.

Conference Call

At 8:00 a.m. Central Time today, July 25, 2018, the company will host a
conference call to discuss its second 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 August 2, 2018 and requesting conference ID
1772360.

About Six Flags Entertainment Corporation

Six Flags Entertainment Corporation is the world's largest regional
theme park company and the largest operator of waterparks in North
America, with $1.4 billion in revenue and 25 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) 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 Six Months Ended Twelve Months Ended
(Amounts in thousands, except per share data)

June 30, 2018

June 30, 2017 June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017
Theme park admissions $ 240,471 $ 221,913 $ 306,792 $ 272,861 $ 775,206 $ 714,431
Theme park food, merchandise and other 176,056 174,012 218,302 205,172 537,712 519,713
Sponsorship, licensing and accommodations   28,893     26,447     48,290     43,867     98,640     84,669  
Total revenue 445,420 422,372 574,384 521,900 1,411,558 1,318,813
Operating expenses (excluding depreciation and amortization shown
separately below)
163,964 146,556 266,464 239,456 538,881 493,677

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

52,750 53,481 89,135 88,464 182,438 175,068
Costs of products sold 39,520 37,489 49,983 45,070 115,287 108,491
Other net periodic pension benefit (1,277 ) (846 ) (2,554 ) (1,692 ) (4,184 ) (2,586 )
Depreciation 27,309 26,171 55,327 52,814 111,719 106,453
Amortization 612 651 1,223 1,299 2,389 2,601
Stock-based compensation 16,036 (15,305 ) 20,589 (3,315 ) 1,207 106,774
Loss on disposal of assets 254 1,657 2,165 2,327 3,797 4,181
Interest expense, net 27,480 27,156 53,365 48,157 104,218 90,381
Loss on debt extinguishment 37,109 37,109 7 37,667
Other expense (income), net   354     568     2,289     (335 )   2,895     658  
Income before income taxes 118,418 107,685 36,398 12,546 352,904 195,448
Income tax expense (benefit)   23,913     36,054     4,238     (1,537 )   21,801     57,803  
Net income 94,505 71,631 32,160 14,083 331,103 137,645
Less: Net income attributable to noncontrolling interests   (20,003 )   (19,605 )   (20,003 )   (19,605 )   (39,608 )   (38,817 )
Net income (loss) attributable to Six Flags Entertainment Corporation $ 74,502   $ 52,026   $ 12,157   $ (5,522 ) $ 291,495   $ 98,828  
 
Weighted-average number of common shares outstanding:
Basic: 83,666 87,136 84,059 89,133 84,304 90,575
Diluted: 85,072 88,832 85,489 89,133 85,779 92,479
 
Net income (loss) per average common share outstanding:
Net income (loss) per average common share outstanding — basic: $ 0.89   $ 0.60   $ 0.14   $ (0.06 ) $ 3.46   $ 1.09  
Net income (loss) per average common share outstanding — diluted: $ 0.88   $ 0.59   $ 0.14   $ (0.06 ) $ 3.40   $ 1.07  
 
Balance Sheet Data
   
As of
(Amounts in thousands) June 30, 2018 December 31, 2017
Cash and cash equivalents $ 68,625 $ 77,496
Total assets 2,610,392 2,456,676
 
Deferred revenue 226,971 142,014
Short-term borrowings 119,000
Long-term debt 2,061,423 2,021,178
 
Redeemable noncontrolling interests 514,001 494,431
 
Total stockholders' deficit (665,994 ) (505,112 )
 
Shares outstanding 83,910 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 income to
Adjusted EBITDA for the three months, six months and twelve months ended
June 30, 2018 and June 30, 2017:

  Three Months Ended   Six Months Ended   Twelve Months Ended
(Amounts in thousands) June 30, 2018   June 30, 2017 June 30, 2018   June 30, 2017 June 30, 2018   June 30, 2017
Net income $ 94,505 $ 71,631 $ 32,160 $ 14,083 $ 331,103 $ 137,645
Income tax expense (benefit) 23,913 36,054 4,238 (1,537 ) 21,801 57,803
Other expense (income), net 354 568 2,289 (335 ) 2,895 658
Loss on debt extinguishment 37,109 37,109 7 37,667
Interest expense, net 27,480 27,156 53,365 48,157 104,218 90,381
Loss on disposal of assets 254 1,657 2,165 2,327 3,797 4,181
Amortization 612 651 1,223 1,299 2,389 2,601
Depreciation 27,309 26,171 55,327 52,814 111,719 106,453
Stock-based compensation 16,036 (15,305 ) 20,589 (3,315 ) 1,207 106,774
Impact of Fresh Start valuation adjustments (2)   4     9     7     19     28     64  
Modified EBITDA (3) 190,467 185,701 171,363 150,621 579,164 544,227
Third party interest in EBITDA of certain operations (4)   (20,003 )   (19,605 )   (20,003 )   (19,605 )   (39,608 )   (38,817 )
Adjusted EBITDA (3) $ 170,464   $ 166,096   $ 151,360   $ 131,016   $ 539,556   $ 505,410  
 
Weighted-average common shares outstanding — basic: 83,666 87,136 84,059 89,133 84,304 90,575
 

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,
six months and twelve months ended June 30, 2018 and June 30, 2017:

     
Three Months Ended Six Months Ended Twelve Months Ended
(Amounts in thousands) June 30, 2018   June 30, 2017 June 30, 2018   June 30, 2017 June 30, 2018   June 30, 2017
Net cash provided by operating activities $ 157,498 $ 193,454 $ 134,691 $ 132,866 $ 446,892 $ 457,523
Changes in working capital 2,960 (36,705 ) (25,044 ) (33,763 ) 13,189 (10,898 )
Interest expense, net 27,480 27,156 53,365 48,157 104,218 90,381
Income tax expense (benefit) 23,913 36,054 4,238 (1,537 ) 21,801 57,803
Amortization of debt issuance costs (1,004 ) (970 ) (1,966 ) (2,141 ) (3,886 ) (4,486 )
Other (income) expense, net (1,245 ) 204 (1,219 ) 1,375 (5,239 ) 3,087
Interest accretion on notes payable (335 ) (298 ) (670 ) (390 ) (1,336 ) (571 )
Changes in deferred income taxes (18,804 ) (33,203 ) 7,961 6,035 3,497 (48,676 )
Impact of Fresh Start valuation adjustments (2) 4 9 7 19 28 64
Third party interest in EBITDA of certain operations (4) (20,003 ) (19,605 ) (20,003 ) (19,605 ) (39,608 ) (38,817 )
Capital expenditures (48,050 ) (45,566 ) (90,533 ) (97,200 ) (128,029 ) (145,443 )
Cash paid for interest, net (21,032 ) (11,052 ) (50,654 ) (46,826 ) (99,117 ) (78,986 )
Cash taxes (5)   (7,838 )   (3,197 )   (14,832 )   (5,859 )   (23,446 )   (12,453 )
Adjusted Free Cash Flow (6) $ 93,544   $ 106,281   $ (4,659 ) $ (18,869 ) $ 288,964   $ 268,528  
 
Weighted-average common shares outstanding — basic: 83,666 87,136 84,059 89,133 84,304 90,575
     
 
(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 (used in) 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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