Summary of Six Flags Entertainment (SIX) 2025 Investor Day Company Overview - **Company**: Six Flags Entertainment (SIX) - **Event**: 2025 Investor Day - **Date**: May 20, 2025 - **Location**: Cedar Point, Sandusky, Ohio Key Points Industry and Market Position - Six Flags is the leading regional amusement park operator in North America, operating 42 parks and entertaining almost 50 million guests annually [14][20] - The amusement park sector is projected to grow at a CAGR of nearly 4% over the next five years, indicating long-term tailwinds for the industry [22] Merger and Integration - The merger has created a stronger and more strategically positioned company, allowing for cost synergies and improved guest experiences [8][9] - The company aims to reduce leverage to below 4x by the end of 2026, which will enable cash returns to shareholders [11] - The integration process is on track, with positive trends in guest satisfaction, attendance, and revenue [34] Financial Targets - By 2028, Six Flags targets 58 million in attendance and $3.8 billion in revenue, with an adjusted EBITDA of $1.5 billion and a 40% margin [12][13] - The company plans to generate free cash flow for reinvestment and debt reduction [11] Attendance Growth Strategies - The company aims to regain 10 million guests lost during the pandemic, focusing on improving market penetration in underperforming parks [44][45] - Strategies include enhancing guest satisfaction, leveraging marketing and CRM, and introducing a regional pass model to increase attendance [58][60] In-Park Revenue Growth - Six Flags is focused on improving food and beverage operations, which have seen a steady 7% CAGR growth in revenue [62][63] - The company plans to enhance guest experience through renovations and new offerings, including adult beverages and themed food items [64][66] - The introduction of premium products, such as cabanas, is expected to drive high-margin revenue [71] Cost Management and Operational Efficiency - The company is committed to optimizing its cost structure to achieve a 40% margin, focusing on operational efficiencies and revenue optimization [39] - Portfolio optimization efforts are underway, with a focus on high-growth parks while evaluating the potential sale of underperforming assets [37][88] Guest Experience and Satisfaction - Six Flags emphasizes the importance of guest satisfaction in driving attendance, with a focus on providing a high-quality experience [50][51] - The company is investing in new attractions and improving existing facilities to enhance the overall park experience [90][91] Risk Management - The company has strategies in place to manage potential recessionary challenges, including adjusting capital expenditures and operational expenses [28][29] - Diversification across parks mitigates risk, as no single region contributes more than 30% of adjusted EBITDA [32] Conclusion - Six Flags is positioned for growth through strategic initiatives aimed at increasing attendance, enhancing guest experiences, and optimizing revenue streams, all while managing costs and reducing leverage [39][72]

Financial Targets & Growth Strategy - The company aims for approximately 6% CAGR (Compound Annual Growth Rate) in sustainable revenue growth from 2025 to 2028[29] - The company is targeting a Modified EBITDA margin of approximately 40% by 2028[29] - The company anticipates a ~$400 million increase in Free Cash Flow in 2028 compared to the projected 2025[30] - The company is targeting net total leverage to be less than 40x by the end of 2026[29] - The company projects net revenues of ~$38 billion in 2028[32] Synergies & Cost Savings - The company is targeting ~$180 million in synergies by the end of 2026[20, 29] - The company plans to achieve cost savings through headcount/labor reductions and non-headcount/labor reductions[194] Attendance & Guest Experience - The company aims to regain approximately 10 million visits through new rides, improved marketing, and a unified season pass strategy[21, 90, 91] - The company is focused on improving guest satisfaction to drive attendance at underpenetrated parks[22, 95, 97] - The company's strategy includes expanding low penetration parks to half of high penetration parks level, which would yield 10 million in new attendance[63] Market Position & Revenue Drivers - The company is the largest regional amusement park operator in North America, entertaining 50 million guests in 2024 on a combined basis[36] - The company aims to grow in-park revenue and expand attendance, targeting ~$38 billion in revenue by 2028[85]

Financial Data and Key Metrics Changes - The first quarter operating loss was greater than the combined loss of legacy companies in 2024, but only slightly above expectations in the operating plan, consistent with off-season investments needed for park preparations [7][14] - First quarter attendance represented approximately 5.5% of full year attendance, and revenues were closer to 6%, lower than the historical expectation of 7% [14][46] - The company maintained its full year 2025 adjusted EBITDA guidance of $1,080 million to $1,120 million [21] Business Line Data and Key Metrics Changes - Attendance trends in April showed a slight increase of over 1% year-over-year, despite adverse weather conditions impacting attendance by approximately 175,000 visits [15][56] - Per capita spending improved in April, indicating a positive trend as attendance levels increased [16][58] Market Data and Key Metrics Changes - Season pass sales showed positive momentum, narrowing the sales gap to prior year by approximately 2% in units sold and 3% in total sales [16][58] - Bookings at resort properties increased by over 10% compared to the same week last year, indicating strong consumer engagement [9] Company Strategy and Development Direction - The company is focused on minimizing lower value operating days in the first and fourth quarters while maximizing operating days in the second and third quarters [8][10] - Significant progress has been made in merger integration, with a target of achieving $120 million in merger cost synergies by year-end, six months ahead of schedule [10][24] - The decision to close parks in Maryland aligns with the strategy to simplify operations and focus on high-margin, high-growth parks [25][26] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the business outlook despite macroeconomic challenges, citing strong demand indicators and consumer willingness to spend on entertainment [9][10][56] - The company is actively monitoring the evolving tariff situation, believing its exposure is limited due to the labor-intensive cost structure [12] Other Important Information - The company ended the quarter with $62 million in cash and $179 million available under its revolving credit facility, with gross debt of $5.3 billion [22][23] - Capital expenditures for the first quarter were $140 million, consistent with the full-year expectation of $475 million to $500 million [23] Q&A Session Summary Question: What is the expected attendance and sales growth in the second quarter? - Management indicated that the second and third quarters are expected to be higher margin days with strong demand anticipated [32][34] Question: Can you quantify the impact of the Easter and Boysenberry Festival shifts? - Management noted that weather impacted attendance in April, but they expect to recover lost attendance in May and June [35][36] Question: What are the expectations for the closure of the Six Flags Park in Maryland? - The closure is part of a strategy to maximize value from land sales and focus on more profitable parks [48][50] Question: What gives confidence to maintain guidance despite softer April performance? - Management cited strong long lead indicators, including season pass sales and consumer spending trends, as reasons for confidence [56][58] Question: What are the expectations for proceeds from land sales? - Management indicated that gross proceeds from land sales could exceed a couple of hundred million dollars [64]

Financial Data and Key Metrics Changes - The first quarter operating loss was greater than the combined loss of the legacy companies in 2024, but only slightly above expectations in the operating plan, consistent with off-season investments [5][12] - First quarter attendance represented approximately 5.5% of full year attendance, and revenues were closer to 6%, lower than the historical expectation of 7% [12][40] - The company maintains its full year 2025 adjusted EBITDA guidance of $1,080 million to $1,120 million [19] Business Line Data and Key Metrics Changes - Attendance trends in April showed a slight increase of over 1% compared to the prior year, despite adverse weather conditions [14] - Per capita spending improved in April, indicating a positive trend as attendance levels increased [15][55] - Season pass sales narrowed the gap to prior year by approximately 2% in units sold and 3% in total sales [15] Market Data and Key Metrics Changes - Bookings at resort properties increased by more than 10% compared to the same week last year, indicating strong consumer engagement [7] - The company experienced a significant impact on attendance due to weather, estimating a loss of approximately 175,000 visits in April [14][51] Company Strategy and Development Direction - The company is focused on executing its merger integration plan, optimizing cost structures, and enhancing guest experiences to drive demand [8][27] - Plans to close the Maryland parks after the 2025 season align with the strategy to simplify operations and focus on high-margin parks [24][25] - The capital strategy remains disciplined, with expectations to invest approximately $1 billion in capital projects for 2025 and 2026 [26] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the business outlook despite macroeconomic uncertainties, supported by strong demand indicators [6][19] - The company is actively monitoring consumer behavior and has seen resilience in spending on entertainment options [7][55] - Management emphasized the importance of maintaining a strong guest experience to drive repeat visits [86] Other Important Information - The company ended the quarter with $62 million in cash and $179 million available under its revolving credit facility [21] - Capital expenditures for the first quarter were $140 million, consistent with the full year expectation of $475 million to $500 million [22] Q&A Session Summary Question: How do you expect attendance and sales growth in the second quarter? - Management believes the second and third quarters present higher margin opportunities and expects strong demand [31][32] Question: Can you quantify the attendance impact from the Easter and Boysenberry Festival shifts? - Management noted that weather impacted attendance, but they expect to recover lost opportunities in the second quarter [33][34] Question: What gives you confidence to keep the guidance unchanged despite softer April tracking? - Management cited strong long lead indicators, including season pass sales and positive consumer behavior even in poor weather [50][51] Question: What are the expectations for proceeds from land sales? - Management indicated that proceeds from land sales could exceed a couple of hundred million dollars [59] Question: How is the unification of the season pass selling strategy progressing? - Management noted that harmonization efforts are ongoing and that they expect improved sales trends as the season progresses [61][65]

Core Insights - Six Flags America and Hurricane Harbor in Bowie, Maryland, will close on November 2, as they are no longer considered a strategic fit for Six Flags Entertainment Corporation's long-term growth plan [1][2] - The park features the historic Wild One roller coaster, which has been operational since 1917 and is recognized for its height and thrilling experience [2][5] - The closure will affect approximately 70 full-time employees, who will receive severance and other benefits [6][9] Company Strategy - Six Flags President & CEO Richard Zimmerman stated that marketing the property for redevelopment is expected to generate the highest value and return on investment [2] - The decision aligns with a comprehensive review of the park portfolio, indicating a shift in focus towards more strategically aligned properties [2] Community Impact - Local officials, including Prince George's County Council Chair Edward Burroughs, see potential for redevelopment of the park area, emphasizing collaboration with the community for future projects [10] - The closure follows the recent announcement by the NFL's Washington Commanders to leave Prince George's County, indicating a broader trend of significant changes in the local entertainment landscape [12]

Core Insights - Barnes & Noble Education, Inc. (BNED) has appointed Christopher Neumann as General Counsel & Corporate Secretary and Gary Luster as Chief Accounting Officer, effective March 3, 2025 [1][2][4] Group 1: Leadership Appointments - Christopher Neumann brings extensive legal experience from Six Flags, where he led legal and corporate governance functions, including a significant $8 billion merger [2] - Neumann's background in the education sector includes serving as Vice President and Deputy General Counsel for Kaplan, enhancing his expertise in the industry [2][3] - Gary Luster has a strong accounting and finance background, having led financial transformations in large retailers, which will aid BNED in improving operational efficiencies [4][5] Group 2: Strategic Importance - The appointments of Neumann and Luster are expected to enhance BNED's leadership capabilities, driving operational improvements and aligning strategies with industry best practices [6] - Their combined expertise is anticipated to strengthen BNED's legal framework, business strategy, governance, and risk management, positioning the company for long-term growth [3][6] Group 3: Company Overview - BNED is a leading solutions provider for the education industry, focusing on affordability, access, and achievement for academic institutions and millions of students [7] - The company offers a range of services including campus retail, academic solutions, and wholesale capabilities, supporting educational advancement [7]

Financial Data and Key Metrics Changes - For Q4 2024, the company generated net revenues of $687 million with attendance of 10.7 million visits, reflecting strong performance compared to the previous year [11] - Adjusted EBITDA for Q4 2024 increased by $120 million to $209 million, with a modified EBITDA margin improvement of 650 basis points to 30.4% [17] - The company ended the year with $83 million in cash and approximately $5 billion in gross debt, providing ample financial flexibility [20] Business Line Data and Key Metrics Changes - Legacy Six Flags operations contributed $324 million in net revenues and 5 million visits during Q4, while legacy Cedar Fair operations saw a decrease of $8 million in revenues due to 115,000 fewer visits [11][12] - In-park per capita spending increased by 3% to $61.6, driven primarily by legacy Six Flags operations [12][13] - AutoPark revenues totaled $48 million in Q4, including $14 million from legacy Six Flags operations [13] Market Data and Key Metrics Changes - Attendance in the first two months of 2025 is up 2%, and sales of season pass units are up 3%, indicating strong consumer demand [7][21] - The company is closely monitoring the impact of recent wildfires in California on its Southern California parks, which are significant contributors to EBITDA [25] Company Strategy and Development Direction - The company aims to achieve adjusted EBITDA of $1.08 billion to $1.12 billion in 2025, focusing on driving attendance and optimizing operating efficiencies [8][27] - A significant capital program for 2025 includes investments in new attractions at 11 of the 14 largest properties, aimed at enhancing guest experiences and increasing demand [28][31] - The company is also pursuing portfolio optimization efforts, considering divestitures of non-core properties to enhance shareholder value [32][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the healthy economic environment for consumers, with park-goers willing to spend on high-quality entertainment experiences [8] - The company is optimistic about the potential for attendance growth, which is seen as a key driver for sustainable cash flow growth and shareholder value creation [27][68] - Management acknowledged potential risks from foreign currency exchange rates and the residual impact of wildfires on performance [25][41] Other Important Information - The company achieved approximately $50 million in gross cost synergies in 2024, with plans for an additional $70 million in 2025 [18][19] - Capital expenditures for 2025 are projected to be between $475 million and $500 million, focusing on maximizing free cash flow [23][24] Q&A Session Summary Question: Guidance assumptions for 2025 - Management discussed that guidance is based on normal weather patterns, no significant economic downturn, and moderate inflation [41][42] Question: Portfolio optimization and monetization of smaller parks - Management emphasized the strategic decision-making process regarding portfolio optimization, focusing on value creation and geographic diversification [51][54] Question: Update on revenue synergies and Allpark Pass - Management noted that revenue synergies are still being realized, with early adoption of the Allpark Pass being encouraging but still in the early stages [59][61] Question: Attendance growth drivers and season pass pricing - Management highlighted the importance of season pass sales and the potential for higher attendance levels to drive revenue growth [68][80] Question: Maintenance CapEx versus structural changes - Management indicated that consistent investment is crucial for driving guest interest and improving in-park revenue [95][98]

Risks Related to Mergers - The company is subject to risks related to the proposed Mergers, including potential disruptions to current plans and operations, and the impact on business relationships and operating results[12] Macro-Economic Conditions - Macro-economic conditions, including inflation and supply chain issues, may impact customer spending patterns and the company's financial performance[12] Risks Related to Attendance - The company faces risks related to attendance, including local conditions, contagious diseases, and global political instability such as the war in Ukraine and the Middle East[12] Weather-Related Risks - Adverse weather conditions, such as excess heat or cold, rain, and storms, could negatively affect the company's operations[12] Labor-Related Risks - The company is exposed to risks related to labor, including dependence on a seasonal workforce, unionization activities, and labor disputes[12] Cybersecurity Risks - Cybersecurity risks are a significant concern for the company, potentially impacting its operations and reputation[17] Strategy Implementation Risks - The company's ability to implement its strategy successfully is subject to various uncertainties, including changes in public and consumer tastes[12] Construction and Ride Downtime Risks - Construction delays in capital improvements or ride downtime could affect the company's ability to attract visitors[12] Competition Risks - The company faces competition from other theme parks, water parks, and entertainment alternatives[12] Legal Proceedings Risks - Legal proceedings and the associated expenses could have a material impact on the company's financial condition[13]

Table of Contents FORM 10-Q ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended October 2, 2022 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to Commission file number: 1-13703 Six Flags Entertainment Corporation (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation or Organization) 13-3995059 (I.R.S. Emplo ...

[FORM 10-Q General Information](index=1&type=section&id=FORM%2010-Q%20General%20Information) This section provides the SEC filing details for Six Flags Entertainment Corporation's Form 10-Q, including its filer status and shares outstanding [SEC Filing Details](index=1&type=section&id=SEC%20Filing%20Details) This section outlines the key filing specifics for Six Flags Entertainment Corporation's Form 10-Q, including its filer status and common stock outstanding - Filing Type: Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended April 3, 2022[2](index=2&type=chunk) - Registrant: Six Flags Entertainment Corporation[2](index=2&type=chunk) - Filer Status: **Large Accelerated Filer**[3](index=3&type=chunk) - Shares Outstanding: **86,443,033 shares of common stock** as of May 9, 2022[3](index=3&type=chunk) [Cautionary Note Regarding Forward-Looking Statements and General Disclosures](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section provides a cautionary note on forward-looking statements, outlining key risks and uncertainties that could materially affect actual results [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section warns that forward-looking statements are subject to significant risks and uncertainties, including COVID-19 impacts and strategic execution challenges - Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions, and other factors beyond the company's control[6](index=6&type=chunk) - Key risk factors include COVID-19 pandemic disruptions, adequacy of cash flows, strategic plan timing and costs, capital plan implementation, geographical park diversity, regulatory compliance, ability to obtain financing, interest payments, accounting pronouncements, litigation outcomes, tax liability, and uncertain tax positions[6](index=6&type=chunk) - Additional risks include factors impacting attendance (e.g., local conditions, contagious diseases, global instability), product recalls, safety incidents, insurance availability, inability to achieve financial targets, adverse weather, economic conditions, changes in consumer tastes, competition, seasonal workforce dependence, labor disputes, and environmental/tax laws[7](index=7&type=chunk) [Available Information](index=5&type=section&id=Available%20Information) This section details how to access Six Flags' SEC filings, available free on its investor relations website or via written request - SEC reports (10-K, 10-Q, 8-K) are available free on the company's investor relations website: investors.sixflags.com[10](index=10&type=chunk) - Physical copies of reports can be requested in writing from Six Flags Entertainment Corporation, Attn: Investor Relations[10](index=10&type=chunk) [Definitions](index=5&type=section&id=Definitions) This section defines key terms like 'Company' and 'Holdings' as used throughout the report for clarity and precision - 'We,' 'our,' 'Company,' and 'Six Flags' refer to Six Flags Entertainment Corporation and its consolidated subsidiaries[11](index=11&type=chunk) - 'Holdings' refers specifically to Six Flags Entertainment Corporation, excluding its consolidated subsidiaries[11](index=11&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, reflecting the company's seasonal business [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements, prepared under U.S. GAAP, highlighting the seasonal nature of the company's operations - The company operates **27 regional theme parks and waterparks**, with 24 in the U.S., two in Mexico, and one in Canada, making it the largest regional theme park operator globally and largest waterpark operator in North America by park count[27](index=27&type=chunk) - The financial statements are unaudited and condensed, prepared in conformity with U.S. GAAP, with certain information and footnote disclosures condensed or omitted per SEC rules[28](index=28&type=chunk) - Results for the three months ended April 3, 2022, are not indicative of full-year results due to the highly seasonal nature of operations, with approximately **75% of attendance and revenues** typically occurring in the second and third calendar quarters[31](index=31&type=chunk) - The COVID-19 pandemic continues to present material uncertainty and risk, impacting performance and financial results due to fluctuating infection rates, restrictions, and global supply chain/wage cost challenges[32](index=32&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' deficit at specific reporting dates | Metric (Amounts in thousands) | April 3, 2022 | January 2, 2022 | April 4, 2021 | | :---------------------------- | :------------ | :-------------- | :------------ | | Cash and cash equivalents | $252,203 | $335,585 | $62,905 | | Total current assets | $433,279 | $516,035 | $217,548 | | Total assets | $2,884,032 | $2,968,590 | $2,673,965 | | Total current liabilities | $444,265 | $463,239 | $466,008 | | Long-term debt | $2,631,246 | $2,629,524 | $2,624,361 | | Total liabilities | $3,399,741 | $3,428,723 | $3,387,053 | | Total stockholders' deficit | $(1,037,776) | $(982,200) | $(1,236,464) | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance, including revenues, expenses, and net loss for the reported periods | Metric (Amounts in thousands) | Three Months Ended April 3, 2022 | Three Months Ended April 4, 2021 | | :---------------------------- | :------------------------------- | :------------------------------- | | Total revenues | $138,107 | $82,024 | | Operating expenses | $109,944 | $92,643 | | Selling, general and administrative expenses | $39,332 | $36,126 | | Interest expense | $37,857 | $38,460 | | Loss before income taxes | $(84,775) | $(127,709) | | Net loss | $(65,662) | $(95,839) | | Net loss per average common share outstanding - basic and diluted | $(0.76) | $(1.12) | [Condensed Consolidated Statements of Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section details the company's comprehensive loss, including net loss and other comprehensive income or loss components | Metric (Amounts in thousands) | Three Months Ended April 3, 2022 | Three Months Ended April 4, 2021 | | :---------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(65,662) | $(95,839) | | Other comprehensive income, net of tax | $5,565 | $2,209 | | Comprehensive loss | $(60,097) | $(93,630) | [Condensed Consolidated Statements of Stockholders' Deficit](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) This section presents changes in the company's stockholders' deficit, including common stock, capital in excess of par, and accumulated deficit | Metric (Amounts in thousands) | Balances at January 2, 2022 | Balances at April 3, 2022 | | :---------------------------- | :-------------------------- | :------------------------ | | Common stock, Shares issued | 86,162,879 | 86,248,545 | | Common stock, Amount | $2,154 | $2,156 | | Capital in excess of par value | $1,120,084 | $1,124,603 | | Accumulated deficit | $(2,023,251) | $(2,088,913) | | Accumulated other comprehensive loss | $(81,187) | $(75,622) | | Total stockholders' deficit | $(982,200) | $(1,037,776) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities for the reported periods | Metric (Amounts in thousands) | Three Months Ended April 3, 2022 | Three Months Ended April 4, 2021 | | :---------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(55,712) | $(80,398) | | Net cash used in investing activities | $(28,990) | $(23,100) | | Net cash provided by financing activities | $81 | $8,798 | | Net change in cash and cash equivalents | $(83,382) | $(94,855) | | Cash and cash equivalents at end of period | $252,203 | $62,905 | | Cash paid for interest | $52,157 | $63,937 | | Cash paid for income taxes | $885 | $268 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on accounting policies, revenue recognition, debt, derivatives, and commitments, offering crucial context to the financial statements [Note 1. General — Basis of Presentation](index=11&type=section&id=Note%201.%20General%20%E2%80%94%20Basis%20of%20Presentation) This note details the basis of financial statement presentation, including consolidation policies, valuation allowances, and goodwill impairment testing - The company consolidates partnership parks (Six Flags Over Texas and Six Flags Over Georgia) as subsidiaries due to its power to direct their activities and absorb/receive significant economic impacts[34](index=34&type=chunk) - A valuation allowance of **$107.8 million** was recorded as of April 3, 2022, due to uncertainties in using certain state net operating loss and other tax carryforwards[35](index=35&type=chunk) - The company is a single reporting unit for goodwill impairment testing, and its market capitalization is considered the best indicator of fair value; no triggering events for impairment were identified as of April 3, 2022[38](index=38&type=chunk) - Diluted shares outstanding equaled basic shares outstanding for loss per common share due to net losses in both periods, excluding antidilutive stock options, restricted stock units, and performance stock units[40](index=40&type=chunk) - Stock-based compensation expense for the three months ended April 3, 2022, was **$4.225 million**, down from **$6.637 million** in the prior year[43](index=43&type=chunk) - An allowance for doubtful accounts of **$5.7 million** was recorded as of April 3, 2022, primarily for estimated payment defaults under the membership program[44](index=44&type=chunk) [Note 2. Revenue](index=16&type=section&id=Note%202.%20Revenue) This note explains the company's revenue recognition policies, disaggregating revenue by contract duration and detailing unearned revenue - Revenues are disaggregated by contract duration (long-term and short-term) Long-term contracts include season passes purchased in the preceding year, sponsorship contracts, and international agreements Short-term contracts primarily include current year season passes, memberships, and transactional sales[49](index=49&type=chunk)[51](index=51&type=chunk)[54](index=54&type=chunk) - Season pass and membership revenues are recognized over the estimated redemption rate, based on historical experience and other factors[55](index=55&type=chunk) - As of April 3, 2022, **$59.0 million of unearned revenue** for long-term contracts remained, with **$75.9 million** expected to be recognized in the remainder of 2022[52](index=52&type=chunk)[53](index=53&type=chunk) | Revenue Type (Amounts in thousands) | Three Months Ended April 3, 2022 | Three Months Ended April 4, 2021 | | :---------------------------------- | :------------------------------- | :------------------------------- | | Long-term contracts | $11,261 | $12,170 | | Short-term contracts and other | $126,846 | $69,854 | | Total revenues | $138,107 | $82,024 | [Note 3. Long-Term Indebtedness](index=18&type=section&id=Note%203.%20Long-Term%20Indebtedness) This note details the company's long-term debt, including credit facilities, various notes, and interest rate swap agreements - The credit facility consists of a **$481.0 million revolving credit loan** (maturing April 2024) and a **$479.0 million Tranche B Term Loan** (maturing April 2026)[57](index=57&type=chunk)[58](index=58&type=chunk)[61](index=61&type=chunk) - As of April 3, 2022, no amounts were outstanding under the revolving loan (excluding letters of credit), and **$479.0 million** was outstanding under the Term Loan B[58](index=58&type=chunk)[59](index=59&type=chunk) - The company has **$949.5 million in 2024 Notes**, **$725.0 million in 2025 Notes**, and **$500.0 million in 2027 Notes** outstanding[62](index=62&type=chunk) - The August 2019 interest rate swap agreements were terminated on March 24, 2022, making the Second Amended and Restated Term Loan B entirely floating rate debt[60](index=60&type=chunk)[61](index=61&type=chunk) | Debt Type (Amounts in thousands) | April 3, 2022 | January 2, 2022 | April 4, 2021 | | :------------------------------- | :------------ | :-------------- | :------------ | | Second Amended and Restated Term Loan B | $479,000 | $479,000 | $479,000 | | 2024 Notes | $949,490 | $949,490 | $949,490 | | 2025 Notes | $725,000 | $725,000 | $725,000 | | 2027 Notes | $500,000 | $500,000 | $500,000 | | Total long-term debt | $2,631,246 | $2,629,524 | $2,624,361 | - Fair value of long-term debt was **$2,660.5 million** as of April 3, 2022, compared to **$2,703.5 million** on January 2, 2022, and **$2,700.5 million** on April 4, 2021[64](index=64&type=chunk) [Note 4. Accumulated Other Comprehensive Loss](index=21&type=section&id=Note%204.%20Accumulated%20Other%20Comprehensive%20Loss) This note provides a breakdown of accumulated other comprehensive loss components and reclassifications out of AOCI | Component (Amounts in thousands) | Balances at January 2, 2022 | Balances at April 3, 2022 | | :------------------------------- | :-------------------------- | :------------------------ | | Cumulative Translation Adjustment | $(31,970) | $(37,141) | | Cash Flow Hedges | $(4,985) | $7,672 | | Defined Benefit Plans | $(44,093) | $(43,864) | | Income Taxes | $(139) | $(2,289) | | Accumulated Other Comprehensive Loss | $(81,187) | $(75,622) | - Reclassifications out of AOCI for the three months ended April 3, 2022, totaled **$1.008 million**, primarily from amortization of loss on interest rate hedges and deferred actuarial loss[66](index=66&type=chunk) [Note 5. Derivative Financial Instruments](index=22&type=section&id=Note%205.%20Derivative%20Financial%20Instruments) This note describes the company's use of interest rate swap agreements for risk management and their impact on financial statements - The company uses interest rate swap agreements to mitigate LIBOR rate increase risk on the Term Loan B, solely for risk management, not speculation[67](index=67&type=chunk) - The August 2019 Swap Agreements were terminated on March 24, 2022, for **$7.4 million net cash proceeds**, with the **$7.7 million settlement** recorded in AOCI to be amortized through September 2024[69](index=69&type=chunk) - Derivative assets as of April 3, 2022, were **$3.996 million** (non-current interest rate swaps), while derivative liabilities were **$11.762 million** (current and non-current interest rate swaps not designated as hedges)[70](index=70&type=chunk) - Net losses of **$3.3 million** currently in AOCI are expected to be reclassified into 'Interest expense, net' within the next twelve months[71](index=71&type=chunk) [Note 6. Commitments and Contingencies](index=23&type=section&id=Note%206.%20Commitments%20and%20Contingencies) This note outlines the company's various commitments, including partnership park guarantees, unit purchase obligations, and ongoing legal proceedings - The company guarantees minimum annual distributions (**$80.5 million in 2022**) and capital expenditures (**6.0% of revenues**) for the Partnership Parks (SFOT, SFOG)[72](index=72&type=chunk) - The maximum unit purchase obligation for Partnership Park units in 2022 is approximately **$522.1 million**, with a minimum price floor set due to COVID-19 impacts[73](index=73&type=chunk) - Capital expenditures at Partnership Parks were **$25.5 million in 2021** and are projected at **$19.8 million for 2022**, exceeding minimum requirements[74](index=74&type=chunk) - Redeemable noncontrolling interests for SFOG and SFOT partnerships were **$280.2 million** and **$241.9 million**, respectively, as of April 3, 2022[76](index=76&type=chunk) - The company is involved in various legal actions, including securities class action lawsuits (appeal pending), stockholder derivative lawsuits (dismissed or stayed), and wage and hour class action lawsuits (some settled for immaterial amounts, others pending)[79](index=79&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[85](index=85&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - A multidistrict personal injury litigation is pending regarding a chemical vapor release at Six Flags Splashtown, which the company intends to vigorously defend[94](index=94&type=chunk) [Note 7. Business Segments](index=31&type=section&id=Note%207.%20Business%20Segments) This note identifies the company's single reportable segment (parks) and provides disaggregated financial information by geographic region - The company operates as a single reportable segment: parks, with most owned/managed parks in the U.S., two in Mexico, and one in Montreal, Canada[97](index=97&type=chunk) | Metric (Amounts in thousands) | April 3, 2022 | January 2, 2022 | April 4, 2021 | | :---------------------------- | :------------ | :-------------- | :------------ | | Domestic Goodwill & Long-Lived Assets | $2,321,053 | $2,324,420 | $2,312,048 | | Foreign Goodwill & Long-Lived Assets | $114,556 | $117,066 | $131,207 | | Total Goodwill & Long-Lived Assets | $2,435,609 | $2,441,486 | $2,443,255 | | Metric (Amounts in thousands) | Domestic (2022) | Foreign (2022) | Total (2022) | Domestic (2021) | Foreign (2021) | Total (2021) | | :---------------------------- | :-------------- | :------------- | :----------- | :-------------- | :------------- | :----------- | | Revenues | $125,903 | $12,204 | $138,107 | $78,673 | $3,351 | $82,024 | | Loss before income taxes | $(83,048) | $(1,727) | $(84,775) | $(121,192) | $(6,517) | $(127,709) | [Note 8. Pension Benefits](index=31&type=section&id=Note%208.%20Pension%20Benefits) This note details the company's frozen pension plan, including net periodic benefit costs and contribution information - The pension plan was frozen in 2006, and participants stopped earning future benefits in 2009[99](index=99&type=chunk) | Pension Costs (Amounts in thousands) | Three Months Ended April 3, 2022 | Three Months Ended April 4, 2021 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Service cost | $300 | $275 | | Interest cost | $1,384 | $1,275 | | Expected return on plan assets | $(3,059) | $(3,069) | | Amortization of net actuarial loss | $229 | $340 | | Total net periodic benefit | $(1,146) | $(1,179) | - No pension contributions were made during the three months ended April 3, 2022, or April 4, 2021[101](index=101&type=chunk) [Note 9. Stock Repurchase Plans](index=32&type=section&id=Note%209.%20Stock%20Repurchase%20Plans) This note describes the company's stock repurchase plan, available authorization, and the temporary suspension of repurchases and dividends - The Board approved a **$500.0 million stock repurchase plan** in March 2017 As of April 3, 2022, **$231.7 million** remained available[102](index=102&type=chunk) - Stock repurchases and dividend payments were suspended until the earlier of December 31, 2022, or when incremental revolving credit commitments are reduced by **$131 million**, due to COVID-19 impacts and credit facility amendments[103](index=103&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section offers management's analysis of financial condition and results, covering business overview, critical accounting policies, revenue and expense analysis, and liquidity - Six Flags is the world's largest regional theme park operator and North America's largest waterpark operator, with **27 parks** offering diverse entertainment experiences[107](index=107&type=chunk) - Revenue is primarily from ticket sales (**53-54% of total revenue**), in-park sales (food, merchandise, games), and sponsorship/international agreements[109](index=109&type=chunk) - Principal costs include salaries, employee benefits, advertising, third-party services, repairs, utilities, rent, and insurance, with a large portion being relatively fixed[110](index=110&type=chunk) [Overview](index=33&type=section&id=Overview) This section provides a high-level summary of the company's business and financial performance, emphasizing seasonality and key drivers - The first quarter results are not indicative of the full year due to seasonality, with over half of annual revenue typically generated between Memorial Day and Labor Day[108](index=108&type=chunk) - Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by **$30 million** in Q1 2022 compared to the prior year, driven by higher attendance and guest spending per capita due to more parks being open[109](index=109&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses the significant accounting policies and estimates that require management judgment and affect reported financial amounts - Financial statements require management to make estimates and assumptions affecting reported amounts, which are evaluated continuously using historical experience and current economic conditions[112](index=112&type=chunk)[113](index=113&type=chunk) - No material developments or changes to critical accounting policies and estimates have occurred since the 2021 Annual Report[113](index=113&type=chunk) [Recent Events](index=35&type=section&id=Recent%20Events) This section highlights significant recent corporate events, including changes in executive leadership - Sandeep Reddy resigned as EVP and CFO effective March 27, 2022, with Stephen Purtell assuming the role of interim CFO while a search for a permanent replacement is underway[114](index=114&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's revenues, expenses, and profitability for the reported periods | Metric (Amounts in thousands, except per capita) | Three Months Ended April 3, 2022 | Three Months Ended April 4, 2021 | Percentage Change (%) | | :----------------------------------------------- | :------------------------------- | :------------------------------- | :-------------------- | | Total revenue | $138,107 | $82,024 | 68% | | Operating expenses | $109,944 | $92,643 | 19% | | Selling, general and administrative expenses | $39,332 | $36,126 | 9% | | Cost of products sold | $10,115 | $7,215 | 40% | | Depreciation and amortization | $29,049 | $28,833 | 1% | | (Gain) loss on disposal of assets | $(2,100) | $520 | N/M | | Interest expense, net | $37,530 | $38,420 | (2)% | | Loss before income taxes | $(84,775) | $(127,709) | (34)% | | Net loss | $(65,662) | $(95,839) | (31)% | | Attendance (in thousands) | 1,686 | 1,346 | 25% | | Total guest spending per capita | $75.46 | $56.16 | 34% | - Revenue increased by **$56.1 million (68%)** due to a **25% increase in attendance** and a **34% increase in total guest spending per capita**, primarily from more operating days in 2022 compared to pandemic-impacted 2021[118](index=118&type=chunk) - Total guest spending per capita rose by **$19.30 to $75.46**, driven by a **31% increase in admissions revenue per capita** and a **39% increase in in-park spending per capita**, reflecting higher ticket pricing, membership revenue recognition, and premiumization strategies[119](index=119&type=chunk) - Operating expenses increased by **$17.3 million (19%)** due to increased operating days at California and Mexico parks, which were closed in Q1 2021[120](index=120&type=chunk) - Selling, general and administrative expenses increased by **$3.2 million (9%)** due to a centralization initiative shifting costs from operating expenses[121](index=121&type=chunk) - Cost of products sold increased by **$2.9 million (40%)** due to higher attendance, but as a percentage of in-park revenue, it slightly decreased due to retail price increases, revenue mix, and reduced membership discounts[122](index=122&type=chunk) - A **$2.1 million gain on disposal of assets** was recognized in Q1 2022, compared to a **$0.5 million loss** in Q1 2021, primarily from insurance proceeds for prior year losses[124](index=124&type=chunk) - Net interest expense decreased by **$0.9 million (2%)** due to lower interest rates on the unhedged portion of the Term Loan B[125](index=125&type=chunk) - Income tax benefit decreased by **$12.8 million** due to a lower pre-tax loss, with effective tax rates of **23.0% in 2022** and **24.9% in 2021**[126](index=126&type=chunk) - Adjusted EBITDA minus capex increased by **$28.7 million**, driven by higher revenue from resumed operations, partially offset by increased operating and SG&A expenses, and a **$5.4 million increase in capital expenditures**[133](index=133&type=chunk) | Non-GAAP Metrics (Amounts in thousands) | Three Months Ended April 3, 2022 | Three Months Ended April 4, 2021 | | :-------------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $(65,662) | $(95,839) | | Modified EBITDA | $(15,608) | $(45,680) | | Adjusted EBITDA | $(15,608) | $(45,680) | | Capital expenditures, net of property insurance recovery | $(28,990) | $(23,133) | | Adjusted EBITDA minus capex | $(44,598) | $(68,813) | [Liquidity, Capital Commitments and Resources](index=39&type=section&id=Liquidity,%20Capital%20Commitments%20and%20Resources) This section discusses the company's sources and uses of liquidity, capital commitments, and available financial resources - Principal liquidity sources are cash from operations, borrowings, and existing cash; uses include working capital, debt service, park investments, and payments to Partnership Parks[134](index=134&type=chunk) - Stock repurchases and dividend payments are suspended until at least December 31, 2022, or until specific credit facility conditions are met[135](index=135&type=chunk) - The company expects cash flow from operations, available cash, and credit facility amounts to be adequate for liquidity needs for the next twelve months, including capital expenditures and debt service[136](index=136&type=chunk) - Federal net operating loss carryforwards are expected to offset approximately **$32.5 million of taxable income annually** for 2022-2024, with 2020 NOLs carrying forward indefinitely[136](index=136&type=chunk) - Total indebtedness, net of discount and deferred financing costs, was approximately **$2,631.2 million** as of April 3, 2022[141](index=141&type=chunk) - Anticipated annual cash interest payments are approximately **$150 million for 2022** and **$155 million for 2023**[141](index=141&type=chunk) - As of April 3, 2022, the company had **$252.2 million in unrestricted cash** and **$460.0 million available** under the revolving loan[142](index=142&type=chunk) - Net cash used in operating activities decreased to **$55.7 million in Q1 2022** from **$80.4 million in Q1 2021**, driven by increased net income[145](index=145&type=chunk) - Net cash used in investing activities increased to **$29.0 million in Q1 2022** from **$23.1 million in Q1 2021**, due to delayed capital budget spending in the prior year[145](index=145&type=chunk) - The Russia-Ukraine war is increasing global economic challenges, including inflation and supply-chain disruption, which the company continues to monitor for impacts on consumer demand, suppliers, cybersecurity, and liquidity[147](index=147&type=chunk) [Contractual Obligations](index=43&type=section&id=Contractual%20Obligations) This section addresses the company's contractual obligations, noting any material changes since the last reporting period - No material changes to contractual obligations have occurred since January 2, 2022, outside the ordinary course of business[148](index=148&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section confirms no material changes to the company's market risk exposure since the 2021 Annual Report disclosure - No material changes in market risk exposure from that disclosed in the 2021 Annual Report as of April 3, 2022[149](index=149&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes to internal control over financial reporting - Disclosure controls and procedures were evaluated as effective as of April 3, 2022, ensuring timely and accurate information disclosure[150](index=150&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended April 3, 2022[151](index=151&type=chunk) [PART II. OTHER INFORMATION](index=45&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers additional information not included in the financial statements, such as legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section outlines the company's involvement in routine legal actions and refers to Note 6 for details on significant ongoing proceedings - The company is exposed to claims by guests for injuries in the normal course of business, and while adequately insured, certain damages (e.g., punitive) could have a material adverse effect[154](index=154&type=chunk) - Further details on legal proceedings are provided in Note 6, 'Commitments and Contingencies,' of the unaudited condensed consolidated financial statements[155](index=155&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) This section confirms no material changes to the principal risk factors affecting the company's business and financial condition since the 2021 Annual Report - No material changes to the principal risk factors have occurred since the 2021 Annual Report[156](index=156&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no stock repurchases during the quarter and details the suspension of repurchases and dividends due to credit facility amendments - No stock repurchases were made during the three months ended April 3, 2022[157](index=157&type=chunk) - As of May 9, 2022, **$231.7 million** remained available under the **$500.0 million March 2017 Stock Repurchase Plan**[157](index=157&type=chunk) - Stock repurchases and dividend payments are suspended until the earlier of December 31, 2022, or when specific conditions related to the credit facility are met[158](index=158&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including required certifications and financial statement formats - Exhibits include certifications (CEO, CFO) under Sarbanes-Oxley Act, Form of Performance Stock Unit Agreement, and financial statements formatted in Inline XBRL[159](index=159&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) [Signatures](index=48&type=section&id=Signatures) This section contains the official signatures of the company's authorized officers, certifying the submission of the report [Signatures of Authorized Officers](index=48&type=section&id=Signatures%20of%20Authorized%20Officers) This section provides the official signatures of the President and CEO and the Interim CFO, certifying the report's submission - Report signed by Selim Bassoul (President and CEO) and Stephen Purtell (SVP and Interim CFO) on May 12, 2022[165](index=165&type=chunk)