Six Flags Entertainment Corporation (NYSE: SIX), the world’s
largest regional theme park company and the largest operator of
waterparks in North America, today reported attendance of 6 million
guests and total revenue of $317 million for fourth quarter 2021.
Results for fourth quarter and full year 2021 are not directly
comparable to the same prior-year periods due to the company’s
COVID-19 related suspension of operations and operating
restrictions that began in mid-March 2020. The company believes it
is most relevant to compare its results in 2021 to the same periods
in 2019.
In the fourth quarter (October 4, 2021, through January 2,
2022), attendance at the company’s parks was approximately 98%
compared to the comparable fiscal period in 2019 (October 7, 2019,
through January 5, 2020). Attendance by pre-booked groups,
inclusive of school groups who typically book in advance, has been
significantly diminished due to the pandemic. Excluding pre-booked
groups, attendance at the company’s parks in fourth quarter 2021
was approximately 100% compared to the same period in 2019.
“In my first 100 days, we have established a new,
customer-obsessed culture, a lean and empowered organization, and a
strategic focus on delivering a premium guest experience” said
Selim Bassoul, President and CEO. “With our foundation now in
place, we are moving quickly to invigorate the magic of Six
Flags.”
Fourth Quarter 2021
Highlights
- Attendance was 6 million guests, inclusive of a negative
calendar shift of 363 thousand guests due to a change in the
company’s reporting calendar, for a decrease of 354 thousand guests
compared to fourth quarter 2019.
- Total Revenue was $317 million, an increase of $56 million
compared to fourth quarter 2019.
- Net Loss was $2 million, an improvement of $9 million compared
to fourth quarter 2019.
- Adjusted EBITDA1 was $95 million, an increase of $23 million
compared to fourth quarter 2019.
- Net cash outflow for fourth quarter 2021 was $54 million.
Full Year 2021
Highlights
- Attendance was 28 million guests, a decrease of 5 million
guests compared to full year 2019.
- Total Revenue was $1,497 million, an increase of $9 million
compared to full year 2019.
- Net Income was $130 million, a decrease of $49 million compared
to full year 2019.
- Adjusted EBITDA was $498 million, a decrease of $29 million
compared to full year 2019.
- Net cash flow for full year 2021 was $178 million.
Fourth Quarter 2021
Results
(In millions, except per share and per
capita amounts)
Three Months Ended
January 2, 2022
December 31, 2020
December 31, 2019
% Change vs. 2020
% Change vs. 2019
Total revenues
$
317
$
109
$
261
N/M
21
%
Net loss attributable to Six Flags
Entertainment Corporation
$
(2)
$
(86)
$
(11)
N/M
N/M
%
Net loss per share, diluted
$
(0.02)
$
(1.00)
$
(0.13)
N/M
N/M
%
Adjusted EBITDA
$
95
$
(39)
$
72
N/M
32
%
Attendance
5.8
2.2
6.1
N/M
(6)
%
Total guest spending per capita
$
53.00
$
47.00
$
40.22
13
%
32
%
Admissions spending per capita
$
27.90
$
27.28
$
23.60
2
%
18
%
In-park spending per capita
$
25.10
$
19.72
$
16.62
27
%
51
%
Pro-forma allocation of admissions
spending to in-park spending2
Total guest spending per capita
$
53.00
$
47.00
$
40.22
13
%
32
%
Admissions spending per capita
$
27.90
$
27.95
$
21.80
0
%
28
%
In-park spending per capita
$
25.10
$
19.05
$
18.42
32
%
36
%
In fourth quarter 2021, the company generated $317 million of
total revenue with attendance of 6 million guests, a net loss of $2
million, and Adjusted EBITDA of $95 million. The company changed
its fiscal reporting periods beginning in first quarter 2021. The
change resulted in three fewer calendar days in October and two
additional days in January for fourth quarter 2021 than were
included in the fourth quarter for both 2020 and 2019. The net
impact was a reduction of 363 thousand of attendance and
approximately $26 million of revenue in fourth quarter 2021.3 The
Adjusted EBITDA calculation reflects an add-back adjustment of
approximately $10 million of non-recurring costs, including $9
million of employee termination costs and $1 million of technology
costs.
Results of fourth quarter 2021 compared to fourth quarter
2019
The $56 million increase in total revenue was driven by higher
guest spending per capita, offset by a 6% decrease in attendance
and a $4 million reduction in sponsorship, international agreements
and accommodations revenue due to the pandemic. The decrease in
attendance was caused by a reduction in pre-booked groups due to
the pandemic and the change in the company’s fiscal reporting
calendar.
Total guest spending per capita in fourth quarter 2021 increased
32% compared to fourth quarter 2019. Applying the pro forma
allocation from admissions spending to in-park spending for 2019,
admissions spending per capita increased 28% and in-park spending
per capita increased 36%. The increase in admissions spending per
capita was driven by higher pricing on single day tickets,
particularly during the company’s Fright Fest event, and a higher
mix of single-day ticket attendance. The increase in in-park
spending per capita was due to strong consumer trends and a higher
mix of single-day guests, who tend to spend more than season pass
holders and members on a per day basis.
Full Year 2021 Results
(In millions, except per share and per
capita amounts)
Twelve Months Ended
January 2, 2022
December 31, 2020
December 31, 2019
% Change vs. 2020
% Change vs. 2019
Total revenues
$
1,497
$
357
$
1,488
N/M
0
%
Net income (loss) attributable to Six
Flags Entertainment Corporation
$
130
$
(423)
$
179
N/M
(27)
%
Net income (loss) per share, diluted
$
1.50
$
(4.99)
$
2.11
N/M
(29)
%
Adjusted EBITDA
$
498
$
(231)
$
527
N/M
(5)
%
Attendance
27.7
6.8
32.8
N/M
(16)
%
Total guest spending per capita
$
52.40
$
48.45
$
42.37
8
%
24
%
Admissions spending per capita
$
28.73
$
29.85
$
24.86
(4)
%
16
%
In-park spending per capita
$
23.67
$
18.60
$
17.51
27
%
35
%
Pro-forma allocation of admissions
spending to in-park spending2
Total guest spending per capita
$
52.40
$
48.45
$
42.37
8
%
24
%
Admissions spending per capita
$
28.73
$
28.31
$
23.57
1
%
22
%
In-park spending per capita
$
23.67
$
20.14
$
18.80
18
%
26
%
For full year 2021, the company generated $1,497 million of
revenue with attendance of 28 million guests, net income of $130
million, and Adjusted EBITDA of $498 million. The company changed
its fiscal reporting periods beginning in first quarter 2021. The
change resulted in two additional calendar days for full year 2021
versus both 2020 and 2019. The impact was an additional 107
thousand in attendance and $6 million of revenue for full year
2021.4
The Adjusted EBITDA calculation reflects an add-back adjustment
of approximately $21 million of non-recurring costs that were
associated with the company’s transformation plan that commenced in
March 2020. For 2021, this included $10 million of employee
termination costs, $5 million of technology costs, and $7 million
of consulting costs. The company has concluded the transformation
plan, and does not expect to incur any further associated
costs.
The company received a settlement payment of $11.3 million
related to the termination of its agreements in China, which was
recorded in second quarter 2021 and is included in Adjusted EBITDA.
Of this amount, $6.7 million was allocated to revenue from
international agreements and $4.6 million was a credit to
expense.
Results of Full Year 2021 compared to Full Year 2019
The $9 million increase in total revenue was driven by higher
guest spending per capita, offset by a 16% decrease in attendance
due to the pandemic, and a $52 million reduction in sponsorship,
international agreements and accommodations revenue, primarily
related to the termination of the company’s agreements in China and
Dubai in 2020 and 2019, respectively, and a reduction in
sponsorship revenue and accommodations revenue due to the
pandemic.
Total guest spending per capita for full year 2021 increased 24%
compared to full year 2019. Applying the pro forma allocation from
admissions spending to in-park spending for 2019, admissions
spending per capita increased 22% and in-park spending per capita
increased 26%. The increase in admissions spending per capita was
driven by the company’s revenue management initiatives and a higher
mix of single-day ticket attendance. The increase in in-park
spending per capita was due to strong consumer trends and a higher
mix of single-day guests, who tend to spend more than season pass
holders and members on a per day basis.
Active Pass Base
The Active Pass Base of 8.3 million included 2.1 million members
as of the end of fourth quarter 2021, compared to approximately 1.7
million at the end of fourth quarter 2020 and 2.6 million members
at end of fourth quarter 2019. The Active Pass Base also included
6.2 million traditional season pass holders compared to 2.1 million
season pass holders at the end of fourth quarter 2020 and 5.1
million season pass holders at the end of fourth quarter 2019.
Deferred revenue was $178 million as of January 2, 2022, a decrease
of $27 million, or 13%, from December 31, 2020, and an increase of
$34 million, or 23%, from December 31, 2019. The deferred revenue
growth versus 2019 was driven by the extension of membership
benefits to members who have continued to make monthly payments but
were unable to use their home park while it was closed during the
pandemic.
Balance Sheet and
Liquidity
As of January 2, 2022, the company had cash on hand of $336
million and $461 million available under its revolving credit
facility, net of $20 million of letters of credit, or total
liquidity of $797 million. This compares to $851 million of
liquidity as of October 3, 2021. The company’s net cash outflow was
$54 million for fourth quarter 2021, including $60 million of
capital expenditures and $10 million of non-recurring costs.
For full year 2021, the company invested $122 million in new
capital projects. Net debt as of January 2, 2022, calculated as
total reported debt of $2,630 million less cash and cash
equivalents of $336 million, was $2,294 million.
In 2020, the company entered into amendments to its credit
facility which, among other things, allows the company to use
operating results from 2019 rather than actual results for the
corresponding quarters in 2021 to test its senior secured leverage
ratio financial maintenance covenant throughout 2022. In connection
with these amendments, the company agreed to various restrictions,
including a prohibition from prepaying debt. The restriction on
prepaying debt will end on the earlier of the end of 2022 or such
time as the company demonstrates compliance with its financial
maintenance covenant using actual results. Based on its improved
liquidity position and financial outlook, and in order to be
permitted to begin pre-paying its debt, the company voluntarily
tested its senior secured leverage ratio financial maintenance
covenant based on actual results beginning in fourth quarter 2021
and was in compliance.
Change in Reporting
Calendar
The company changed its fiscal reporting periods, such that each
fiscal quarter (beginning with the fiscal quarter commencing
January 1, 2021) consists of thirteen consecutive weeks ending on a
Sunday5 and each fiscal year (beginning with the fiscal year
commencing January 1, 2021) consists of 52 weeks or 53 weeks, as
applicable, and ends on the Sunday closest to December 31. The
company made the change to align the company’s fiscal reporting
calendar with how the company operates its business and to improve
comparability across periods. A summary of the comparable reporting
periods is set forth below.
Q1
Q2
Q3
Q4
2019
January 1- March 31
April 1 – June 30
July 1 – September 30
October 1 – December 31, 2019
2020
January 1- March 31
April 1 – June 30
July 1 – September 30
October 1 – December 31, 2020
2021
January 1 – April 4
April 5 – July 4
July 5 – October 3
October 4 – January 2, 2022
2022
January 3 – April 3
April 4 – July 3
July 4 – October 2
October 3 – January 1, 2023
Conference Call
At 7:00 a.m. Central Time today, February 24, 2022, the company
will host a conference call to discuss its fourth quarter and full
year 2021 financial performance. The call is accessible through
either the Six Flags Investor Relations website at
investors.sixflags.com or by dialing 1-855-889-1976 in the United
States or +1-937-641-0558 outside the United States and requesting
the Six Flags earnings call. A replay of the call will be available
through March 3, 2022, by dialing 1-855-859-2056 or +1-404-537-3406
and requesting conference ID 8550617.
About Six Flags Entertainment
Corporation
Six Flags Entertainment Corporation is the world’s largest
regional theme park company with 27 parks across the United States,
Mexico and Canada. For 60 years, Six Flags has entertained hundreds
of millions of guests with world-class coasters, themed rides,
thrilling waterparks and unique attractions. Six Flags is committed
to creating an inclusive environment that fully embraces the
diversity of our team members and guests. For more information,
visit www.sixflags.com
Forward Looking
Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
including statements regarding (i) the effect, impact, potential
duration or other implications of the COVID-19 pandemic or virus
variants, and any expectations we may have with respect thereto
including the continuing efficacy of the COVID-19 vaccines, (ii)
the adequacy of our cash flows from operations, available cash and
available amounts under our credit facilities to meet our liquidity
needs, including in the event of a prolonged closure of one or more
of our parks, (iii) our ability to significantly improve our
financial performance and the guest experience, (iv) expectations
regarding consumer demand for regional, outdoor, out-of-home
entertainment, including for our parks, and (v) expectations
regarding our annual income tax liability and the availability and
effect of net operating loss carryforwards and other tax benefits.
Forward-looking statements include all statements that are not
historical facts and often use words such as "anticipates,"
"intends," "plans," "seeks," "believes," "estimates," "expects,"
"may," "should," "could" and variations of such words or similar
expressions. 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, factors impacting attendance, such as local
conditions, natural disasters, contagious diseases, including
COVID-19, or the perceived threat of contagious diseases, events,
disturbances and terrorist activities; regulations and guidance of
federal, state and local governments and health officials regarding
the response to COVID-19, including with respect to business
operations, safety protocols and public gatherings; political or
military events; recall of food, toys and other retail products
sold at our parks; accidents or incidents involving the safety of
guests and employees, or contagious disease outbreaks occurring at
our parks or other parks in the industry and adverse publicity
concerning our parks or other parks in the industry; availability
of commercially reasonable insurance policies at reasonable rates;
inability to achieve desired improvements and our financial
performance targets; adverse weather conditions such as excess heat
or cold, rain and storms; general financial and credit market
conditions, including our ability to access credit or raise
capital; economic conditions (including customer spending
patterns); changes in public and consumer tastes; construction
delays in capital improvements or ride downtime; competition with
other theme parks, waterparks and entertainment alternatives;
dependence on a seasonal workforce; unionization activities and
labor disputes; laws and regulations affecting labor and employee
benefit costs, including increases in state and federally mandated
minimum wages, and healthcare reform; environmental laws and
regulations; laws and regulations affecting corporate taxation;
pending, threatened or future legal proceedings and the significant
expenses associated with litigation; cybersecurity risks; and other
factors could cause actual results to differ materially from the
company’s expectations, including the risk factors or uncertainties
listed from time to time in the company’s filings with the
Securities and Exchange Commission (the “SEC”). Although we believe
that the expectations reflected in such forward-looking statements
are reasonable, we make no assurance that such expectations will be
realized and actual results could vary materially. Reference is
made to a more complete discussion of forward-looking statements
and applicable risks contained under the captions "Cautionary Note
Regarding Forward-Looking Statements" and "Risk Factors" in our
Annual and Quarterly Reports on Forms 10-K and 10-Q, and our other
filings and submissions with the SEC, each of which are available
free of charge on the company’s investor relations website at
investors.sixflags.com and on the SEC’s website at www.sec.gov.
Footnotes
(1)
See the following financial statements and
Note 4 to those financial statements for a discussion of Adjusted
EBITDA (a non-GAAP financial measure) and its reconciliation to net
income (loss).
(2)
Certain of the company’s memberships
include bundled products and offerings. Since the beginning of the
membership program, a portion of the membership revenue has been
allocated from “Park admissions” revenue to “Park food, merchandise
and other revenue.” Beginning in October 2020, the company
prospectively began allocating an incremental portion of membership
revenue from “Park admissions” revenue to “Park food, merchandise
and other revenue.” This resulted in a reduction in reported
admissions spending per capita and an increase in in-park spending
per capita, but the allocation of revenue between “Park Admissions”
revenue and “Park food, merchandise and other” revenue has no
impact on “Total revenues” or “Total guest spending per
capita.”
(3)
Assumes average total guest spending per
capita in fourth quarter 2021 for the period January 1 through
January 2, 2022, and $32 million of revenue for the period October
1 through October 3, 2021.
(4)
Assumes average total guest spending per
capita in fourth quarter 2021 for the period January 1 through
January 2, 2022.
(5)
When a fiscal year contains 53 weeks,
approximately every 5 to 6 years, the fourth quarter of that fiscal
year will contain 14 weeks.
Statement of Operations Data
(1)
Three Months Ended
Twelve Months Ended
(Amounts in thousands, except per share
data)
January 2, 2022
December 31, 2020
December 31, 2019
January 2, 2022
December 31, 2020
December 31, 2019
Park admissions
$
160,933
$
58,958
$
144,530
$
795,649
$
202,646
$
815,782
Park food, merchandise and other
144,831
42,635
101,748
655,451
126,306
574,440
Sponsorship, international agreements and
accommodations
11,046
7,009
14,722
45,805
27,623
97,361
Total revenues
316,810
108,602
261,000
1,496,905
356,575
1,487,583
Operating expenses (excluding depreciation
and amortization shown separately below)
142,720
107,348
125,101
647,250
389,726
607,791
Selling, general and administrative
expenses (excluding depreciation, amortization, and stock-based
compensation shown separately below)
56,746
31,394
42,290
189,919
127,765
185,920
Costs of products sold
25,219
11,165
23,008
125,728
34,119
130,304
Other net periodic pension benefit
(2,485
)
(2,205
)
(1,038
)
(5,894
)
(5,190
)
(4,186
)
Depreciation
29,491
31,284
28,597
114,412
119,159
115,825
Amortization
5
6
600
22
1,014
2,405
Stock-based compensation
3,948
1,323
1,927
21,462
19,530
13,274
Loss (gain) on disposal of assets
10,274
(2,769
)
(943
)
12,137
7,689
2,162
Interest expense, net
37,873
38,127
27,046
152,436
154,723
113,302
Loss on debt extinguishment
—
—
253
—
6,106
6,484
Other expense, net
9,326
5,711
4,016
18,122
24,993
2,542
Income (loss) before income taxes
3,693
(112,782
)
10,143
221,311
(523,059
)
311,760
Income tax expense (benefit)
5,692
(27,014
)
21,298
49,622
(140,967
)
91,942
Net (loss) income
(1,999
)
(85,768
)
(11,155
)
171,689
(382,092
)
219,818
Less: Net income attributable to
noncontrolling interests
—
—
—
(41,766
)
(41,288
)
(40,753
)
Net (loss) income attributable to Six
Flags Entertainment Corporation
$
(1,999
)
$
(85,768
)
$
(11,155
)
$
129,923
$
(423,380
)
$
179,065
Weighted-average common shares
outstanding:
Basic:
86,047
85,008
84,560
85,708
84,800
84,348
Diluted:
86,754
85,008
84,560
86,651
84,800
84,968
Net (loss) income per average common share
outstanding:
Basic:
$
(0.02
)
$
(1.00
)
$
(0.13
)
$
1.52
$
(4.99
)
$
2.12
Diluted:
$
(0.02
)
$
(1.00
)
$
(0.13
)
$
1.50
$
(4.99
)
$
2.11
Balance Sheet Data
As of
(Amounts in thousands)
January 2, 2022
December 31, 2020
December 31, 2019
Cash and cash equivalents
$
335,585
$
157,760
$
174,179
Total assets
2,968,590
2,772,691
2,882,540
Deferred revenue
177,831
205,125
144,040
Long-term debt
2,629,524
2,622,641
2,266,884
Redeemable noncontrolling interests
522,067
523,376
529,258
Total stockholders' deficit
(982,200
)
(1,158,547
)
(716,118
)
Shares outstanding
86,163
85,076
84,634
Definition and Reconciliation of Non-GAAP Financial
Measures
We prepare our financial statements in accordance with United
States generally accepted accounting principles ("GAAP"). In our
press release, we make reference to non-GAAP financial measures
including Modified EBITDA, Adjusted EBITDA and Adjusted Free Cash
Flow. The definition for each of these non-GAAP financial measures
is set forth below in the notes to the reconciliation tables. We
believe that these non-GAAP financial measures provide important
and useful information for investors to facilitate a comparison of
our operating performance on a consistent basis from period to
period and make it easier to compare our results with those of
other companies in our industry. We use these measures for internal
planning and forecasting purposes, to evaluate ongoing operations
and our performance generally, and in our annual and long-term
incentive plans. By providing these measures, we provide our
investors with the ability to review our performance in the same
manner as our management.
However, because these non-GAAP financial measures are not
determined in accordance with GAAP, they are susceptible to varying
calculations, and not all companies calculate these measures in the
same manner. As a result, these non-GAAP financial measures as
presented may not be directly comparable to a similarly titled
non-GAAP financial measure presented by another company. These
non-GAAP financial measures are presented as supplemental
information and not as alternatives to any GAAP financial measures.
When reviewing a non-GAAP financial measure, we encourage our
investors to fully review and consider the related reconciliation
as detailed below.
The following tables set forth a reconciliation of net income
(loss) to Adjusted EBITDA for the three-month periods and
twelve-month periods ended January 2, 2022, December 31, 2020, and
December 31, 2019:
Three Months Ended
Twelve Months Ended
(Amounts in thousands, except per share
data)
January 2, 2022
December 31, 2020
December 31, 2019
January 2, 2022
December 31, 2020
December 31, 2019
Net (loss) income
$
(1,999
)
$
(85,768
)
$
(11,155
)
$
171,689
$
(382,092
)
$
219,818
Income tax expense (benefit)
5,692
(27,014
)
21,298
49,622
(140,967
)
91,942
Other expense, net (2)
9,326
5,711
4,016
18,122
24,993
2,542
Loss on debt extinguishment
—
—
253
—
6,106
6,484
Interest expense, net
37,873
38,127
27,046
152,436
154,723
113,302
Loss (gain) on disposal of assets
10,274
(2,769
)
(943
)
12,137
7,689
2,162
Amortization
5
6
600
22
1,014
2,405
Depreciation
29,491
31,284
28,597
114,412
119,159
115,825
Stock-based compensation
3,948
1,323
1,927
21,462
19,530
13,274
Modified EBITDA (4)
94,610
(39,100
)
71,639
539,902
(189,845
)
567,754
Third party interest in EBITDA of certain
operations (5)
—
—
—
(41,766
)
(41,288
)
(40,753
)
Adjusted EBITDA (4)
$
94,610
$
(39,100
)
$
71,639
$
498,136
$
(231,133
)
$
527,001
Weighted-average common shares
outstanding
86,047
85,008
84,560
85,708
84,800
84,348
The following tables set forth a reconciliation of net cash
provided by (used in) operating activities to Adjusted Free Cash
Flow for the three-month periods and twelve-month periods ended
January 2, 2022, December 31, 2020, and December 31, 2019:
Three Months Ended
Twelve Months Ended
(Amounts in thousands, except per share
data)
January 2, 2022
December 31, 2020
December 31, 2019
January 2, 2022
December 31, 2020
December 31, 2019
Net cash provided by (used in) operating
activities
$
28,966
$
(36,916
)
$
69,708
$
334,905
$
(190,880
)
$
410,573
Changes in working capital
8,084
(48,542
)
(25,673
)
31,884
(175,938
)
28,739
Interest expense, net
37,873
38,127
27,046
152,436
154,723
113,302
Income tax expense (benefit)
5,692
(27,014
)
21,298
49,622
(140,967
)
91,942
Amortization of debt issuance costs
(1,978
)
(1,977
)
(860
)
(7,911
)
(6,535
)
(3,563
)
Other expense, net (2)
9,449
17,278
7,875
20,718
36,710
6,457
Interest accretion on notes payable
(277
)
(276
)
(322
)
(1,108
)
(1,157
)
(1,310
)
Changes in deferred income taxes
6,801
20,220
(27,433
)
(40,644
)
134,199
(78,386
)
Third party interest in EBITDA of certain
operations (5)
—
—
—
(41,766
)
(41,288
)
(40,753
)
Capital expenditures, net of property
insurance recovery
(59,927
)
(7,918
)
(18,151
)
(121,742
)
(98,364
)
(140,176
)
Cash paid for interest, net
(12,476
)
(19,847
)
(20,553
)
(147,163
)
(98,551
)
(112,997
)
Cash taxes (6)
(10,495
)
(1,321
)
(3,256
)
(11,278
)
(5,917
)
(28,209
)
Adjusted Free Cash Flow (7)
$
11,712
$
(68,186
)
$
29,679
$
217,953
$
(433,965
)
$
245,619
Weighted-average common shares outstanding
- basic:
86,047
85,008
84,560
85,708
84,800
84,348
(1)
Revenues and expenses of international
operations are converted into U.S. dollars on an average basis as
provided by GAAP.
(2)
Amounts recorded as “Other (income)
expense, net” include certain non-recurring costs incurred in
conjunction with changes made to our organizational structure in
December 2021 and the transformation plan initiated in early 2020.
The transformation plan has since been concluded and no further
costs are anticipated. These amounts are excluded from Modified
EBITDA as they are non-routine, non-recurring and unrelated to our
ongoing operations and costs necessary to operate our business. For
the year ended January 2, 2022, these amounts included consulting
costs of $6.9 million, technology modernization costs of $4.5
million and employee termination costs of $10.1 million. For the
year ended December 31, 2020, these amounts included consulting
costs of $20.5 million, employee termination costs of $4.4 million
and non-cash write-offs of ride assets of $9.8 million.
(3)
Amounts recorded as valuation adjustments
and included in reorganization items for the month of April 2010
would have been included in Modified EBITDA and Adjusted EBITDA had
fresh start accounting not been applied. Balances consisted
primarily of discounted insurance reserves that were accreted
through the Statement of Operations each quarter through 2018.
(4)
“Modified EBITDA,” a non-GAAP measure, is
defined as our consolidated income (loss) from continuing
operations: excluding the following: the cumulative effect of
changes in accounting principles, discontinued operations gains or
losses, income tax expense or benefit, restructure costs or
recoveries, reorganization items (net), other income or expense,
gain or loss on early extinguishment of debt, equity in income or
loss of investees, interest expense (net), gain or loss on disposal
of assets, gain or loss on the sale of investees, amortization,
depreciation, stock-based compensation, and fresh start accounting
valuation adjustments. Modified EBITDA, as defined herein, may
differ from similarly titled measures presented by other companies.
Management uses non-GAAP measures for budgeting purposes, measuring
actual results, allocating resources and in determining employee
incentive compensation. We believe that Modified EBITDA provides
relevant and useful information for investors because it assists in
comparing our operating performance on a consistent basis, makes it
easier to compare our results with those of other companies in our
industry as it most closely ties our performance to that of our
competitors from a park-level perspective and allows investors to
review performance in the same manner as our management.
"Adjusted EBITDA," a non-GAAP measure, is
defined as Modified EBITDA minus the interests of third parties in
the Modified EBITDA of properties that are less than wholly owned
(consisting of Six Flags Over Georgia, Six Flags White Water
Atlanta and Six Flags Over Texas). Adjusted EBITDA is approximately
equal to “Parent Consolidated Adjusted EBITDA” as defined in our
secured credit agreement, except that Parent Consolidated Adjusted
EBITDA excludes Adjusted EBITDA from equity investees that is not
distributed to us in cash on a net basis and has limitations on the
amounts of certain expenses that are excluded from the calculation.
Adjusted EBITDA as defined herein may differ from similarly titled
measures presented by other companies. Our board of directors and
management use Adjusted EBITDA to measure our performance and our
current management incentive compensation plans are based largely
on Adjusted EBITDA. We believe that Adjusted EBITDA is frequently
used by all our sell-side analysts and most investors as their
primary measure of our performance in the evaluation of companies
in our industry. In addition, the instruments governing our
indebtedness use Adjusted EBITDA to measure our compliance with
certain covenants and, in certain circumstances, our ability to
make certain borrowings. Adjusted EBITDA, as computed by us, may
not be comparable to similar metrics used by other companies in our
industry.
(5)
Represents interests of non-controlling
interests in the Adjusted EBITDA of Six Flags Over Georgia, Six
Flags Over Texas and Six Flags White Water Atlanta.
(6)
Cash taxes represents statutory taxes
paid, primarily driven by Mexico and state level obligations. Based
on our current federal net operating loss carryforwards, we
anticipate paying minimal federal income taxes in 2022 and do not
anticipate becoming a full cash taxpayer until at least 2024.
(7)
Management uses Adjusted Free Cash Flow, a
non-GAAP measure, in its financial and operational decision-making
processes, for internal reporting, and as part of its forecasting
and budgeting processes as it provides additional transparency of
our operations. Management believes that Adjusted Free Cash Flow is
useful information to investors regarding the amount of cash that
we estimate we will generate from operations over a certain period.
Management believes the presentation of this measure will enhance
the investors' ability to analyze trends in the business and
evaluate the Company's underlying performance relative to other
companies in the industry. A reconciliation from net cash provided
by (used in) operating activities to Adjusted Free Cash Flow is
presented in the table above. Adjusted Free Cash Flow as presented
herein may differ from similarly titled measures presented by other
companies.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220224005399/en/
Stephen Purtell Senior Vice President Corporate Communications,
Investor Relations and Treasurer +1-972-595-5180
investors@sftp.com
Six Flags Entertainment (NYSE:SIX)
Historical Stock Chart
From Oct 2024 to Nov 2024
Six Flags Entertainment (NYSE:SIX)
Historical Stock Chart
From Nov 2023 to Nov 2024