Investor Presentation February 2020 - Six Flags
Investor PresentationFebruary 2020February 20201
DisclaimerPresentation is subject to safe harbor lawsFebruary 2020 Presentation includes forward looking statements about eventsand financial results Actual events or results may be materially different Risks are described in the company’s filings with the SEC Statements are made subject to “safe harbor” provisions ofPrivate Securities Reform Act of 1995 Full disclaimer and reconciliation of Non-GAAP financialmeasures to GAAP measures are at the end of this presentation2
Overview of Six FlagsGlobal leader in an attractive industry Ongoing Growth OpportunityExceptional brand & businessfoundation594 568558520 545Growth opportunitieso Base businesso North American expansiono International licensing379416444477323223 Strong, recurring cash flowo Industry-leading EBITDA andEBITDA less CAPEX marginso Efficient CAPEX(1)(2)2009201020112012201320142015Adjusted EBITDA MM(1)(2)2016201720182019Modified EBITDA MMExcludes SFKK as discontinued operation2009 Modified EBITDA calculation includes revenue from Six Flags Great Escape Lodge and Indoor Water Park so it is consistent with future periodsFebruary 20203
Investment ThesisGlobal leader in an attractive industry Attractive industryooStable in a weak economyHigh barriers to entry Exceptional brand and business foundationooFocused strategyExpansive array of entertainment & services Substantial growth opportunitiesooooooInnovative products and programsMembership / Season Pass penetrationPricing and ticket yield managementIn-park revenue initiativesNorth American expansion strategyInternational agreements Financial ExcellenceooooStrong recurring revenue and cash flowIndustry-leading marginFavorable capital allocation strategyNOL carry forward Employees closely aligned with shareholdersFebruary 20204
Attractive IndustryStable industry with high barriers to entry Stable in normal economy – resilient in a weak one Compelling value relative to other forms of entertainmento Consumers focused on experiences High recurring revenue High barriers to entryo 500-700MM investment; 3 years developmento Key North American markets already servedFebruary 20205
Investment ThesisGlobal leader in an attractive industry Attractive industryooStable in a weak economyHigh barriers to entry Exceptional brand and business foundationooFocused strategyExpansive array of entertainment & services Substantial growth opportunitiesooooooInnovative products and programsMembership / Season Pass penetrationPricing and ticket yield managementIn-park revenue initiativesNorth American expansion strategyInternational agreements Financial ExcellenceooooStrong recurring revenue and cash flowIndustry-leading marginFavorable capital allocation strategyNOL carry forward Employees closely aligned with shareholdersFebruary 20206
A Focused StrategyDelivering excellence in all we doFebruary 20207
26 Strategically Located ParksPrime locations; economic and weather diversity; limited direct competition 1.5 billion revenue 33 million guests 52,000 employeeso 2,400 full-time 925 rides / 145 coasters*February 20208
Top Rated RidesHome to many of the top coasters and ridesUSA Today Best New AttractionWorld’s Tallest, Fastest Roller Coaster41 story drop at 91 miles per hourIndustry’s Best New Attraction 2015Immersive interactive rideWorld’s tallest and steepestwooden coasterWorld’s First Racing Launch CoasterSide by side tracksWorld’s Tallest Pendulum Ride50 meters tall, 120 km/hrFebruary 20209
Expansive Array of EntertainmentMore than coasters we provide thrills and entertainment for all agesWaterparksGamesConcerts & ShowsFamily CoastersAnimalsEventsFebruary 202010
Investment ThesisGlobal leader in an attractive industry Attractive industryooStable in a weak economyHigh barriers to entry Exceptional brand and business foundationooFocused strategyExpansive array of entertainment & services Substantial growth opportunitiesooooooInnovative products and programsMembership / Season Pass penetrationPricing and ticket yield managementIn-park revenue initiativesNorth American expansion strategyInternational agreements Financial ExcellenceooooStrong recurring revenue and cash flowIndustry-leading marginFavorable capital allocation strategyNOL carry forward Employees closely aligned with shareholdersFebruary 202011
Growth OpportunitiesFive growth initiatives driven by industry-leading innovationTotal Revenue ( MM’s)1,4881,464 Membership / SeasonPass penetration1,3591,3191,264 Ticket yield management In-park revenueinitiatives North Americanexpansion strategy International agreements(1)9761,1761,1101,0701,013913(1)2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20192009 Revenue restated to include Six Flags Great Escape Lodge and Indoor Water Park, which was consolidated for reporting purposes beginning January 1, 2010February 202012
InnovationLeading the industry in innovationRecent Innovationso First-of-Kind Rideso All Season Diningo News in Every Park, Every Yearo Loyalty ProgramCapital Spending has averaged 9% of RevenueAssetMaintenanceNew rides andattractions25%60%In-ParkFebruary 202015%13
2020 Ride InnovationFebruary 202014
Membership & Season Pass PenetrationLarge Active Base of members and season passholders – 7.7 million as of December 31, 2019 Generate more annual revenue and cash flow thansingle day visitors Build recurring revenue Visit during off-peak periods Provide weather hedge Only about 40% of our unique visitors have a passFebruary 202015
Premium-tiered Membership ProgramGrows contractual, recurring revenue stream Offers up to 50 exclusive benefits Creates Members, our most loyal andprofitable guests– Higher retention rates– 3-4x lifetime revenue of Season Passholder Provides three revenue sources– Higher annual prices w/auto-renewal– Easy upgrades / add-ons Member Dining Member THE FLASH Pass– Incremental in-park spendingFebruary 202016
Ticket Yield ManagementAdmissions Revenue ( MM)A multi-year approach toimprove ticket yields 810 816688Execute dynamic pricing483 Drive membership penetration Continue to raise guests’value-for-the-money ratings 2009511542577 6027157416422010 2011 2012 2013 2014 2015 2016 2017 2018 2019Admissions Per Cap – vs. Others*Close / surpass pricing gap vs.others 34.98o SIX parks serve top 10 US markets 28.47 24.86SIXFUNSEAS*SIX and FUN Full-year 2019; SEAS LTM 9/30/2019February 202017
In-Park Revenue InitiativesIn-Park Revenue ( MM)Highly profitable businesseswithin the business574554525 More than 2,500 locations500 New products and programs437401o All Season Dining Passo Broader offeringso Mobile Dining4494604143752009 2010 2011 2012 2013 2014 2015 2017 2018 2019February 202018
North American Expansion StrategySeeking to own or operate parks in markets adjacent to our theme parks Largest waterpark operator in NorthAmerica Added 8 parks in two years Dozens of potential targets Strategy will:o Expand active pass reach toadjacent marketso Create demand for membership andseason passes by providingadditional valueo Leverage significant active passbase to sell combo upgradesFebruary 202019
International AgreementsSaudi ThemeParkLong-term strategy to license brand outside North America Strong global brand recognitionGrowing middle class, disposable income, and demand for entertainmentZero capital investmentSaudi Arabia Theme Park targeting 2023 openingSelectively seeking future partnersFebruary 202020
Investment ThesisGlobal leader in an attractive industry Attractive industryooStable in a weak economyHigh barriers to entry Exceptional brand and business foundationooFocused strategyExpansive array of entertainment & services Substantial growth opportunitiesooooooInnovative products and programsMembership / Season Pass penetrationPricing and ticket yield managementIn-park revenue initiativesNorth American expansion strategyInternational agreements Financial ExcellenceooooStrong recurring revenue and cash flowIndustry-leading marginFavorable capital allocation strategyNOL carry forward Employees closely aligned with shareholdersFebruary 202021
Strong Recurring RevenueGrowing attendance fuels revenue growthAttendance / Guest Spending Per Capita42.9739.33 39.4140.1836.84 37.55Revenue ( MM)1,4881,46442.58 42.3741.6041.07 41.6132.832.01,3591,3191,26430.1 30.428.61,1761,11025.7 26.1 25.61,0701,01324.3 24.397623.39132009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Attendance (MM)(1)2009(1)2009 (1)2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Guest Spending Per Cap ( )Revenue restated to include Six Flags Great Escape Lodge and Indoor Water Park, which was consolidated for reporting purposes beginning January 1, 2010February 202022
Cost DisciplineContinued focus on effective management of costs and capital investmentCash Capex as a % of RevenueCash Operating Costs(1) as a % of Revenue10.9%75.6%9.8%9.0%10.0%9.2% 9.2% 9.2%9.0%9.4%67.4%9.0%8.1%62.8%61.8%61.2%60.0%59.4% 58.9%58.7% 58.9%12959.5%98919810210813513314011479(2)2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(2)2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Capital Spend(1)(2)% of RevenueIncludes Cash Operating Expenses, SG&A and Cost of Goods Sold2009 adjusted to include Six Flags Great Escape Lodge and Indoor Water Park, which was consolidated for reporting purposes beginning January 1, 2010February 202023
Strong EBITDAStrong history of growing earnings with high cash marginAdjusted EBITDA ( MM’s)(1) and Modified EBITDA d EBITDA(1)(2)Modified EBITDA Margin201520162019Modified EBITDA less CAPEX MarginExcludes SFKK as discontinued operation2009 Modified EBITDA Margin calculation includes revenue from Six Flags Great Escape Lodge and Indoor Water Park so it is consistent with future periodsFebruary 202024
Cumulative DistributionsNearly 3.8 Billion excess cash returned to shareholder 3,793 3,514 MM 3,1362,078 2,4091,967 1,977 1,5312,0781,4681,256 1,1511,011 452816 71602921603365202011201220132014DividendsFebruary 2020721201594120161,16920171,43620181,7152019Share Repurchases25
Investment ThesisGlobal leader in an attractive industry Attractive industryooStable in a weak economyHigh barriers to entry Exceptional brand and business foundationooFocused strategyExpansive array of entertainment & services Substantial growth opportunitiesooooooInnovative products and programsMembership / Season Pass penetrationPricing and ticket yield managementIn-park revenue initiativesNorth American expansion strategyInternational agreements Financial ExcellenceooooStrong recurring revenue and cash flowIndustry-leading marginFavorable capital allocation strategyNOL carry forward Employees closely aligned with shareholdersFebruary 202026
SummaryDelivering shareholder value Delighting our guests Building brand equity Leveraging brand outside of North America Maximizing revenue and cash flow Generating strong returns for our shareholdersFebruary 202027
Reconciliation ofNon-GAAP Measures( MM; Share amounts in 000's)Net (Loss) IncomeLoss (Income) from Discontinued OperationsIncome Tax Expense (Benefit)Reorganization Items, NetRestructure CostsOther Expense, NetLoss on Debt ExtinguishmentEquity in (Income) Loss or (Gain) on Sale of InvesteeInterest Expense, NetLoss on Disposal of AssetsAmortizationDepreciationStock-based CompensationImpact of Fesh Start Valuaion AdjustmentsModified EBITDAThird Part Interest in EBITDA of Certain OperationsAdjusted sted EBITDACapital Expenditures (net of insurance proceeds)Cash InterestCash TaxesAdjusted Free Cash FlowShares Outstanding (weighted average, 3)(98)(30)29384,10013(1)(8)225-2009 includes the results of Six Flags Great Escape Lodge and Indoor Water Park so it is consistent with future periodsReflects June 2011 and June 2013 stock splitsFebruary 202028
DisclaimerNote About Forward-Looking Information The information contained in this presentation, other than purely historical information, contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. We caution you that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. These risks and uncertainties include, but are notlimited to, statements we make regarding: (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 capitalenhancements and planned initiatives in a timely and cost effective manner, (iii) our ability to improve operating results by implementing strategic cost reductions, and organizational and personnel changes withoutadversely affecting our business, (iv) our dividend policy and ability to pay dividends on our common stock, (v) the effect of and cost and timing of compliance with newly enacted laws, regulations and accounting policies,(vi) our ability to realize future growth and execute and deliver on our strategic initiatives, (vii) our expectations regarding uncertain tax positions, (viii) our expectations regarding our deferred revenue growth, (ix) ouroperations and results of operations, and (x) the risk factors or uncertainties listed from time to time in the company’s filings with the Securities and Exchange Commission ("SEC"). Additional important factors that couldcause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and include, but notlimited to, the following: (i) factors impacting attendance, such as local conditions, natural disasters, contagious diseases, events, disturbances and terrorist activities; (ii) accidents occurring at our parks or other parks inthe industry and adverse publicity related thereto; (iii) adverse weather conditions; (iv) general financial and credit market conditions; (v) economic conditions; (vi) competition with other theme parks and otherentertainment alternatives; and (vii) pending, threatened or future legal proceedings and the significant expenses associated with litigation. Reference is made to a more complete discussion of forward-looking statements and applicable risks contained under the caption “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in ourAnnual Report on Form 10-K for the year ended December 31, 2017 that is available on our website at www.investors.sixflags.com. Any forward-looking statement made by us in this presentation, or on our behalf by our directors, officers or employees related to the information contained herein, speaks only as of the date of this presentation. Factors orevents that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not intend to update any forward-looking statement, whether as a result of newinformation, future developments or otherwise.Non-GAAP Financial Measures The non-GAAP financial measures defined herein are used throughout this presentation and a reconciliation to GAAP has been included in the appendix of this presentation. We believe that these non-GAAP financialmeasures 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 ofother 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. Byproviding 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. Asa 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 arepresented 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 relatedreconciliation as detailed below. 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 orlosses, 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, interestexpense (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 definedherein 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 employeeincentive 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 tocompare 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 samemanner 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, SixFlags 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 ConsolidatedAdjusted 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. AdjustedEBITDA 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 managementincentive 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 theevaluation of companies in our industry. In addition, the instruments governing our indebtedness use
Investor Presentation February 2020. February 2020 2 Disclaimer Presentation includes forward looking statements about events and financial results Actual events or results may be materially different . holders –7.7 million as of December 31, 2019 Membership & Season Pass Penetration. February 2020 16
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