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Six Flags Entertainment Corporation - Q1 2025 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 30, 2025. The filing reflects the first full quarter of operations for the "Combined Company" following the July 1, 2024, merger of Cedar Fair and Former Six Flags. The company operates 27 amusement parks, 15 water parks, and nine resorts across North America. Due to the seasonal nature of the business, Q1 results are not indicative of full-year performance, with approximately 70% of annual revenue typically generated in Q2 and Q3.

Key Financial Metrics

Note: Q1 2024 figures represent only Cedar Fair operations prior to the merger. Q1 2025 includes Former Six Flags operations.

Material Changes vs. Prior Period

• Revenue Growth: Net revenues increased 98.8% to $202.1 million, driven primarily by the inclusion of Former Six Flags operations ($111.0 million contribution). Attendance rose 108.9% to 2.8 million visits, and in-park per capita spending increased 5.5% to $65.40.
• Expense Expansion: Operating costs and expenses increased 91.6% to $411.9 million. This includes a $142.8 million increase in operating expenses and a $44.1 million increase in SG&A, largely attributable to the merger integration and Former Six Flags inclusion.
• Depreciation Impact: Depreciation and amortization surged 892.3% to $102.3 million. This increase is due to the acquisition of Former Six Flags assets and a change in interim depreciation accounting from a seasonal basis to a straight-line basis, which added approximately $29 million in expense for the quarter.
• Debt Structure: Total debt increased significantly to $5.27 billion following the assumption of Former Six Flags' debt obligations and refinancing activities. The company holds $625.7 million in revolving credit borrowings with $179.3 million remaining availability.

Guidance, Outlook, and Risks

• Strategy (Project Accelerate): Management is executing "Project Accelerate" to drive revenue growth, cost synergies, and capital efficiency. The company plans to invest approximately $1.0 billion in capital expenditures over 2025 and 2026.
• Capital Expenditures: 2025 CapEx is expected to range between $475 million and $500 million, focusing on new rides, water park renovations, and food/beverage upgrades.
• Liquidity: The company expects sufficient liquidity to meet obligations through Q1 2026. No dividends are planned in the near term.
• Legal Proceedings: A putative securities class action lawsuit regarding Former Six Flags' China operations has been settled for $40.0 million, fully funded by insurance. The SEC investigation into the same matter concluded in Q1 2025 with no enforcement actions recommended.
• Portfolio Optimization: In a subsequent event (May 1, 2025), the company announced the closure of Six Flags America and Hurricane Harbor in Bowie, Maryland, following the 2025 season to market the property for redevelopment.
• Risks: Key risks include the ability to realize merger synergies, adverse weather conditions, economic downturns affecting discretionary spending, and integration challenges.

Investor Verification Checklist

• Merger Integration Costs: Verify the timeline and magnitude of one-time integration costs ($15.6 million in Q1) and their impact on future profitability.
• Depreciation Accounting Change: Confirm the long-term impact of the shift from seasonal to straight-line depreciation on interim earnings reporting.
• Debt Covenants: Monitor compliance with the Net First Lien Leverage Ratio (currently max 5.25x) and restricted payment provisions under the 2024 Credit Agreement.
• Partnership Park Obligations: Review the financial impact of the "End-of-Term Option" exercise for Six Flags Over Georgia and the ongoing minimum distribution requirements for Six Flags Over Texas.
• Seasonal Performance: Assess Q2 and Q3 attendance and per capita spending trends to validate the "Project Accelerate" revenue growth assumptions.