SIX 2010 Q2 RESULTS

[The Interpreter]

Say goodbye to the long term discounting at Six Flags:

...Profits for the quarter ended June 30 were $743.5 million, up from a loss of $121.6 million a year ago. For the 2010 quarter, that worked out to profits of $7.47 a share for April and 40 cents a share for the two months that ended in June. That compares with a loss of $1.25 a share for the comparable three-month period a year ago. The gain was due in part to debt reduction stemming from the bankruptcy initiated by the predecessor company -- Six Flags Inc. –- on June 13, 2009....

But the company has put too much of its marketing muscle behind "Mr. Six" –- the company's balding pitch man -- and relied too much on long term discounting, said Alexander "Al" Weber Jr., who moved last week from interim chief executive to chief operating officer.

Future marketing messages will shift away from the diminutive Mr. Six to ads that "showcase the product," he said. ...

Weber said the company plans to move to a "more strategic discount plan."

"We want to drive attendance the right way, without discounting on an ongoing basis," Reid-Anderson said. "This is a great company that had a bad balance sheet. I think the company has a really good future."

http://www.dallasnew...s.5c9c9445.html

The Press Release:

Financial Release

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Six Flags Announces Strong Second Quarter 2010 Results

-- Revenues increased by 7% for Q2 and the first six months of 2010(1) driven by increases in attendance and sponsorship

-- Q2 Adjusted EBITDA increased 68% to $94.7 million driven by top line growth and effective cost management

-- Strong liquidity position, including cash balance of $210 million as of August 1st with no revolver drawn, enables $25 million pay down of first lien term loan

-- Six Flags emerges from bankruptcy with approximately one-third of the annual financing cost burden (approximately $75 million) and over $1 billion in federal NOLs

-- New management team in place focused on theme park excellence and shareholder value creation DALLAS, Aug 16, 2010 /PRNewswire via COMTEX/ -- Six Flags Entertainment Corporation (NYSE: SIX) announced today its consolidated operating results for the second quarter and six months ended June 30, 2010(2).

"Our strong revenue and profitability in the quarter and year to date are a reflection of Six Flags' strong brand equity and the operational excellence of this superb team," said Jim Reid-Anderson, Chairman, President and Chief Executive Officer. "We are well positioned to leverage our base business momentum for long term success."

"I am honored to be a part of this great company, and I am pleased with the strong results we delivered in the second quarter," said Alexander Weber, Jr., Chief Operating Officer. "Six Flags has a renewed focus on its core theme park business. We remain committed to delivering a clean, safe and fun guest experience with new and exciting attractions for customers of all ages."

Three Month Results

Total revenue of $321.3 million for the second quarter increased 8% from the prior-year quarter's total of $296.8 million, reflecting $3.4 million of revenues from the Six Flags Great Escape Lodge and Indoor Waterpark (the "Lodge"), the results of which were consolidated beginning with the first quarter of 2010 as a result of adopting new consolidation accounting rules.(3) Excluding the consolidation of the Lodge, total revenues for the quarter increased $21.1 million, or 7%, compared to the prior-year quarter, primarily reflecting increased attendance and sponsorship revenue.

Attendance for the quarter was 8.2 million, a 7% increase over the prior-year quarter's attendance of 7.7 million, reflecting strong season pass visitation and higher group sales.

Per capita guest spending, which excludes sponsorship, licensing, Lodge accommodations and other fees, decreased 1% to $36.86 in the second quarter from $37.15 in the prior-year quarter, reflecting planned decreases in season pass pricing, partially offset by improved yield on single-day tickets, and the favorable exchange rate impact at our Mexico City and Montreal parks, which accounted for an $0.18 increase in per capita guest spending for the second quarter of 2010 compared to the prior-year quarter.

Cash operating expenses(4) of $213.3 million for the second quarter decreased $11.9 million, or 5%, compared to the second quarter of 2009. Excluding the Lodge, cash operating expenses totaled $210.8 million, a decrease of $14.4 million, or 6%, from the prior-year quarter, reflecting decreased marketing costs, insurance expense, and payroll and benefits expenses, partially offset by the currency impacts at our Montreal and Mexico City parks.

Non-cash operating expenses comprised of depreciation, amortization, stock-based compensation and loss on disposal of assets increased $2.3 million in the second quarter of 2010 to $40.6 million, compared with $38.3 million in the second quarter of 2009, reflecting increased depreciation and amortization primarily as a result of increased amortizable assets due to the application of fresh start accounting and the impact of the consolidation of the Lodge, partially offset by decreased loss on disposal of assets and lower stock-based compensation expense.

Other expense decreased from $16.3 million in the second quarter of 2009 to $1.0 million in the second quarter of 2010, reflecting the prior-year loss from interest-rate swaps. The Company also incurred $16.5 million in restructuring costs in the second quarter of 2010, which reflect severance and related costs from the change in senior management and the implementation of the Company's new cost reduction strategy.

The Company's income from continuing operations in the second quarter of 2010 totaled $749.2 million compared to a loss of $96.5 million in the prior-year quarter. Reorganization items resulted in a gain of $786.9 million in the second quarter of 2010 compared to a net expense of $78.7 million in the second quarter of 2009, primarily reflecting gains from the extinguishment of debt in connection with the consummation of the Plan(5) in the second quarter of 2010. Income from continuing operations before reorganization items and income taxes for the second quarter of 2010 totaled $22.5 million, an improvement of $40.5 million over the prior year quarter's loss of $18.0 million, primarily reflecting the impact of increased revenues, reduced operating expenses, lower interest expense resulting from the cancellation of debt in connection with the confirmation of the Plan and reduced other expense, partially offset by the current-year restructuring costs.

Income tax expense was $60.2 million for the second quarter of 2010 compared to a $0.2 million benefit for the second quarter of 2009, primarily reflecting the deferred income taxes that were recorded as a result of fresh start accounting.

Adjusted EBITDA(6) for the second quarter of 2010 was $94.7 million compared to $56.4 million for the prior-year quarter, reflecting the impact of increased revenues and reduced cash operating expenses.

Six Month Results

For the six months ended June 30, 2010, total revenue increased $30.6 million, or 9%, to $378.5 million compared to $347.9 million in the six months ended June 30, 2009, reflecting $7.7 million of revenues from the Lodge in the six months ended June 30, 2010. Excluding the consolidation of the Lodge, total revenues increased $22.9 million, or 7%, for the first half of 2010 compared to the first half of 2009, reflecting increased attendance, per capita in-park spending and sponsorship revenues.

Attendance for the first six months of 2010 was 9.5 million, a 6% increase over the prior-year period's attendance of 9.0 million, reflecting strong season pass visitation and higher group sales.

Per capita guest spending, which excludes sponsorship, licensing, Lodge accommodations and other fees, remained relatively flat at $36.67 in the first half of 2010 compared to $36.76 in the same period of the prior year, reflecting planned decreases in season pass pricing, partially offset by improved yield on single day tickets, and a favorable exchange rate impact attributable to our Montreal and Mexico City parks, which accounted for a $0.29 increase in per capita guest spending for the first half 2010 compared to the same prior-year period.

Cash operating expenses of $332.0 million for the first six months of 2010 decreased $5.8 million, or 2%, compared to the same period of 2009. Excluding the Lodge, cash operating expenses totaled $326.7 million, a decrease of $11.2 million, or 3%, from the prior-year period, reflecting decreased marketing costs, insurance expense, and payroll and benefits expenses, partially offset by the currency exchange rate impacts at our Montreal and Mexico City parks.

Non-cash operating expenses comprised of depreciation, amortization, stock-based compensation and loss on disposal of assets increased $2.3 million in the first six months of 2010 to $78.5 million, compared with $76.3 million in the same period of 2009, reflecting increased depreciation and amortization primarily as a result of increased amortizable assets due to the application of fresh start accounting and the impact of the consolidation of the Lodge, partially offset by decreased loss on disposal of assets and lower stock-based compensation expense.

Other expense decreased from $17.9 million in the first half of 2009 to $0.4 million in the first six months of 2010, reflecting the prior-year loss from interest rate swaps. The first half of 2010 results for the Company also reflect the restructuring costs recognized in the second quarter of 2010.

The Company's income from continuing operations in the first half of 2010 totaled $568.5 million compared to a loss of $233.6 million in the first half of 2009. Reorganization items resulted in a gain of $766.5 million in the first six months of 2010 compared to a net expense of $78.7 million in the first half of 2009, primarily reflecting gains from the extinguishment of debt from the confirmation of the Plan in the current period. Loss from continuing operations before reorganization items and income taxes for the first half of 2010 totaled $136.8 million, an improvement of $21.2 million over the loss of $158.0 million in the first half of 2009. This improvement primarily reflected the impact of increased revenues, reduced operating expenses and reduced other expense, partially offset by the restructuring costs in the first half of 2010 and increased interest expense. Higher interest expense was related to post-petition interest on the $400 million Senior Notes that were originally due in 2016, partially offset by reduced interest expense related to the debt that was canceled in connection with the consummation of the Plan.

Income tax expense was $61.1 million for the first six months of 2010 compared to a $3.2 million benefit for the first six months of 2009, primarily reflecting the deferred income taxes that were recorded as a result of fresh start accounting.

Adjusted EBITDA(7) for the first half of 2010 was $34.7 million compared to a loss of $3.1 million for the prior-year period, reflecting the impact of increased revenues and reduced cash operating expenses.

Recent Developments

On June 13, 2009, Six Flags, Inc., Six Flags Operations Inc., Six Flags Theme Parks Inc. ("SFTP") and certain of SFTP's domestic subsidiaries (collectively the "Debtors") filed voluntary petitions for relief (the "Chapter 11 Filing") under Chapter 11 in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") (Case No. 09-12019).

On April 1, 2010, the Debtors filed with the Bankruptcy Court their Modified Fourth Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code (the "Plan"). On April 30, 2010 (the "Effective Date"), the Bankruptcy Court entered an order confirming the Plan and the Debtors consummated their restructuring through a series of transactions contemplated by the Plan and the Plan became effective pursuant to its terms. On the Effective Date, Six Flags, Inc. changed its corporate name to "Six Flags Entertainment Corporation."

As a result of the consummation of the Plan, indebtedness of approximately $2.4 billion and the Company's obligation of $306.6 million under its preferred income equity redeemable shares (the "PIERS") were cancelled, and new debt of approximately $1.0 billion was issued (excluding the Company's new $120 million revolving credit facility). As a result of the lower debt burden, the Company's annual cash interest expense will be significantly reduced to approximately $75 million, based on current interest rates.

Pursuant to the Plan, the common stock of Six Flags, Inc. was cancelled, and new common stock of Six Flags Entertainment Corporation was issued. The Company's new common stock is traded on the New York Stock Exchange under ticker symbol "SIX." In addition, Six Flags has moved its corporate headquarters to Dallas. The Company anticipates that the relocation and reorganization of the corporate office, along with related corporate operating expense savings, will generate annualized cost savings of approximately $16.0 million, not including severance and other associated costs.

Due to the Company's solid results and significant liquidity, including approximately $210 million in cash at August 1, 2010 and the availability of its undrawn $120 million revolving credit facility, the Company made an unscheduled principal payment on its first lien term loan of $25 million on August 5, 2010.

On August 13, 2010, the Company announced the appointment of a new Chairman of the Board, President and Chief Executive Officer, James Reid-Anderson. Alexander Weber, Jr., who had served as the President and Interim Chief Executive Officer, is now the Chief Operating Officer.

Fresh Start Accounting

In connection with the Company's emergence from Chapter 11 on April 30, 2010, and the application of fresh start reporting upon emergence in accordance with ASC Topic 852, "Reorganizations," the results for the two-month period ended June 30, 2010 (we refer to the Company during such period as the "Successor") and the results for the one-month and four-month periods ended April 30, 2010 (we refer to the Company during such periods as the "Predecessor") are presented separately. This presentation is required by United States generally accepted accounting principles ("GAAP"), as the Successor is considered to be a new entity for financial reporting purposes, and the results of the Successor reflect the application of fresh-start reporting. Accordingly, the Company's financial statements after April 30, 2010, are not comparable to its financial statements for any period prior to its emergence from Chapter 11. For illustrative purposes in this earnings release, the Company has combined the Successor and Predecessor results to derive combined results for the three- and six-month periods ended June 30, 2010. However, because of various adjustments to the consolidated financial statements in connection with the application of fresh-start reporting, including asset valuation adjustments and liability adjustments, the results of operations for the Successor are not comparable to those of the Predecessor. The financial information accompanying this earnings release provides the Successor and the Predecessor GAAP results for the applicable periods, along with the combined results described above. The Company believes that subject to consideration of the impact of fresh start reporting, the combined results provide meaningful information about revenues and costs, which would not be available if the current year periods were not combined to accommodate analysis.

About Six Flags Entertainment

Six Flags Entertainment Corporation, a publicly-traded corporation headquartered in Dallas, Texas, is the world's largest regional theme park company with 19 parks across the United States, Mexico and Canada.

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, the potential adverse impact of the Chapter 11 Filing on Six Flags Entertainment's operations, management and employees; customer response to the Chapter 11 Filing; and the risk factors or uncertainties listed from time to time in Six Flags Entertainment's filings with the Securities and Exchange Commission ("SEC"). In addition, important factors, including factors impacting attendance, local conditions, events, disturbances and terrorist activities, risk of accidents occurring at Six Flags Entertainment's parks, adverse weather conditions, general financial and credit market conditions, economic conditions (including consumer spending patterns), competition, pending, threatened or future legal proceedings and other factors could cause actual results to differ materially from Six Flags Entertainment's expectations. Although Six Flags Entertainment believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. 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 Six Flags Entertainment's Annual Report on Form 10-K for the year ended December 31, 2009, its Quarterly Report for the quarter ended June 30, 2010, and its other filings and submissions with the SEC, each of which are available free of charge on Six Flags Entertainment's website http://www.sixflags.com/.

(1) Excludes results for the Six Flags Great Escape Lodge and Indoor Waterpark, which was consolidated beginning in 2010 due to new accounting rules, and has not been consolidated in the prior-year results.

(2) Reported results from continuing operations for all periods presented exclude the results of parks sold in prior years, as well as the park in New Orleans, Louisiana, which has been closed since August 2005 due to damage caused by Hurricane Katrina. The Company terminated its lease with the City of New Orleans and settled the related litigation. Furthermore, the results from continuing operations exclude the results of the Company's park in Louisville, Kentucky, which the Company no longer operates as a result of rejecting the lease in February 2010 in connection with the Company's Chapter 11 bankruptcy.

(3) Consolidation was required pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 810, Consolidation. Results for 2009 have not been adjusted to reflect the consolidation of the Lodge.

(4) Cash operating expenses are presented as costs and expenses excluding depreciation, amortization, stock-based compensation and loss on disposal of assets in the statement of operations data.

(5) See "Recent Developments" below.

(6) See the following tables and Note 3 to those tables for a discussion of Adjusted EBITDA and its reconciliation to net income (loss).

(7) See the following tables and Note 3 to those tables for a discussion of Adjusted EBITDA and its reconciliation to net income (loss).

Complete financial tables (very lengthy) along with the press release can be found at:

http://investors.six...0034&highlight=

[thekidd33]

Seems like they are off to a pretty decent start to the post-bankruptcy era. Should be interesting to see the price points for season passes/tickets next year.

[The Interpreter]

Interestingly, the attendance trends and the in park spending trends at both SIX and FUN are virtually identical...attendance up 7 percent, in park spending down 1 percent...even though one chain spent a great deal more on large thrill rides than did the other...

[The Interpreter]

My notes from listening to the conference call:

The focus is to reduce costs, improve efficiency, listen to the guests and give them what they want and empower local park management to make local changes to improve the business.

Debt is down from $2.7 billion pre-bankruptcy to $830 million now...freeing up substantial cash for more debt reduction and capital improvements.

Al Weber is capable of cute sarcasm: "I know a little bit about the theme park space."

The goal is best in class performance. The focus for now is on marketing, pricing and capital effectiveness.

Mr. Six, though having high awareness, is not effective and does not make people want to visit the parks. He will, therefore, slowly disappear.

They intend to target families and thrill seekers alike and "convey the message that Six Flags offers something for everyone."

It is of great importance that SIX is in 9 of the top 10 metro areas in this country...

SIX currently underprices its competitors by 20 percent. It was implied, but not stated, that this will soon end.

They need to select product that truly appeals to the customers and closes the gaps in the product mix. "We need to listen to our guests to better understand what they want."

Last year Kentucky Kingdom had 500,000 to 600,000 in attendance and lost a couple of million dollars in EBITDA.

Sponsorship/corporate alliance program has been very successful and they want to do more...it is "very, very high margin." (Look for more shrink wrapped coasters...)

They see, even with increased pricing integrity, increased future attendance by more closely aligning the product choices and guest experience to what guests want and expect.

In park spending is actually up one percent, while the decline in the gate component of per cap (caused by too broad discounting) actually resulted in an overall per cap decline of one percent.

[The Interpreter]

More Riders, More Revenues and More Fun: Six Flags:

http://www.fool.com/investing/general/2010/08/16/more-riders-more-revenue-and-more-fun-six-flags.aspx

[Oldiesmann]

I find it hard to believe that Mr. Six didn't make people want to visit Six Flags. It was definitely a fun marketing scheme regardless, and I wonder how long he'll stay in retirement this time...

[The Interpreter]

Probably for good. He creeps out way too many people. Little kids find him scary. He reminds others of a child molester, according to internal studies...not exactly what you want in your park "mascot."

He appealed ONLY to the teen market, and not a single study showed he brought even one visitor to the park who wasn't coming anyway, while driving others away.

I say Good Riddance.

[PREMiERdrum]

Probably for good. He creeps out way too many people. Little kids find him scary. He reminds others of a child molester, according to internal studies...not exactly what you want in your park "mascot."

He appealed ONLY to the teen market, and not a single study showed he brought even one visitor to the park who wasn't coming anyway, while driving others away.

I say Good Riddance.

Even creepier than the "real" Mr Six used in commercials was the in-park versions, with their oddly fit facial prosthetics and makeup. Let's go back to the drawing board on this one.

[The Interpreter]

Reporting from a Great Escape perspective:

http://poststar.com/news/local/article_2bd37a34-a981-11df-b12d-001cc4c03286.html

[KIfan1980]

What I think is really critical in Terpy's notes is the number of references to understanding who they are trying to attract to their parks and understanding what that customer wants (even if it different at a local park level). IF, and it's a big if, they can do this, they will be successful.

And for the record, I'm willing to bet there are many more distinctions than families and thrill seekers.

[The Interpreter]

It's Al Weber...IF he stays. The man is an absolute genius when it comes to marketing and product.

If I were Dick Kinzel, the mere thought I let Al Weber walk (no, pushed him out the door) and now he is competing against me would keep me up nights. If you read that transcript, there is subtle dig after subtle dig at Cedar Fair, and, by implication, Dick Kinzel.

Al Weber is a finance guy AND an operations guy AND a marketing guy.

[markr]

Maybe I'm in the minority but I love Mr. Six.

[bkroz]

Yes, Mr. Six is recognized. But consider Kings Island's 2009 Diamondback Ride Warriors commercial. It showcases the new ride and sends out a "challenge" to the teen crew. Then, you get "The Fun & Only" commercial on during the next break that shows Diamondback, yes, but also highlights Planet Snoopy, Boo Blasters, and other family rides. So you get out lots of images of rides, a few statistics, and an announcement of what's new.

Mr. Six comes on, and people pay attention because he is an attention-getting figure. However, during the commercial, you saw no roller coaster that was specifically connected to any park; no personalization for the local area; and when you did see kids having fun and dancing along, as Terpy said, it came across wrong to the target audience. Basically, the idea of him grabs the viewer's attention, but then you do not see him riding a ride at your "local" Six Flags. He doesn't announce where discount tickets are available or talk about what's new for 2010. So they basically had an interesting marketing campaign, and then they forgot to actually use it to market their parks. Instead they marketed the idea of their industry - they sold Six Flags, and not Six Flags Over Georgia, Six Flags Great Adventure, etc.