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Six Flags Entertainment Corporation: Q2 2025 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 29, 2025. The filing reflects the operations of the "Combined Company" following the July 1, 2024, merger of equals between Cedar Fair and Former Six Flags. The company operates 27 amusement parks, 15 water parks, and nine resorts across North America. Results for the current period include Former Six Flags operations, whereas the prior year period (ended June 30, 2024) reflects only Cedar Fair operations, making direct comparisons limited.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Net revenues increased 62.8% for the quarter and 68.2% for the six months compared to the prior year. This growth is primarily driven by the inclusion of Former Six Flags operations ($388.7M and $499.7M in revenue for the three and six months, respectively).
• Operating Performance: While the quarter showed operating income of $74.5 million, the six-month period resulted in an operating loss of $246.5 million. This loss includes $162.9 million attributable to Former Six Flags operations and significant integration costs.
• Attendance and Spending: Attendance increased 64.3% (quarter) and 70.4% (six months) due to the merger. In-park per capita spending rose 2.5% and 3.0% respectively, driven by pricing strategies at Cedar Fair parks.
• Cost Structure: Operating expenses and SG&A increased significantly due to the merger integration, severance costs ($23.8M in Q2, $27.2M YTD), and higher depreciation ($134.6M in Q2) from the acquired assets.
• Debt Refinancing: In June 2025, the company amended its credit agreement to incur an additional $500 million in term debt, which was used to redeem the remaining 2025 Six Flags notes and reduce revolver borrowings.

Guidance, Outlook, and Risks

• July Update: Preliminary results for the five weeks ended August 3, 2025, estimate net revenues between $680 million and $685 million (down ~3% YoY) and attendance of 11 million guests (up 1% YoY). In-park per capita spending is estimated down ~4%.
• Capital Expenditures: Full-year 2025 CapEx is expected to range between $475 million and $500 million, focusing on new rides and facility upgrades.
• Strategic Actions: The company announced the closure of Six Flags America (Bowie, MD) following the 2025 season to market the property for redevelopment. This will result in an approximate $19 million increase in depreciation expense for 2025.
• Legal Contingencies: A $40.0 million settlement for a putative securities class action lawsuit has been approved and is fully funded by insurance carriers.
• Risks: Key risks include the failure to realize merger synergies, adverse weather conditions impacting attendance, and the high leverage ratio (Net First Lien Leverage Ratio covenant is 5.25x).

Investor Verification Checklist

• Merger Integration Costs: Verify the trajectory of integration and severance expenses, which significantly impacted YTD net income.
• Debt Covenants: Monitor the Net First Lien Leverage Ratio and Total Indebtedness to Consolidated Cash Flow Ratio to ensure compliance with the 5.25x thresholds.
• Seasonal Variance: Assess the impact of the reported 3% revenue decline in the July update against the strong Q2 performance to gauge full-year outlook.
• Asset Disposition: Track the timeline and financial impact of the Six Flags America closure and subsequent redevelopment.
• Non-Controlling Interests: Review the accretion on the Six Flags Over Georgia call option liability ($17.6M interest expense YTD) and the redemption obligations for Partnership Parks.