Overview of the Combined Company’s Financial Performance

The Six Flags Entertainment Corporation (the “Combined Company”) is the result of a merger between Cedar Fair and Former Six Flags, completed on July 1, 2024. The Combined Company is now the largest regional amusement park operator in North America, with 27 amusement parks, 15 water parks, and 9 resorts.

The financial results for the three months ended March 30, 2025 reflect the combined operations of the former Cedar Fair and Six Flags companies. Compared to the same period in the prior year, net revenues increased by 98.8% to $202.1 million, driven by a 108.9% increase in attendance and a 5.5% increase in in-park per capita spending. However, operating costs and expenses also increased significantly, leading to an operating loss of $321.0 million, compared to a $126.3 million loss in the prior year period.

The increase in operating costs was primarily due to the addition of the former Six Flags operations, as well as higher wages, insurance costs, and general inflation. Depreciation and amortization expense also increased substantially due to the impact of the merger. After accounting for interest, taxes, and non-controlling interests, the Combined Company reported a net loss of $219.7 million for the quarter, compared to a $133.5 million loss in the prior year.

Revenue and Profit Trends

The Combined Company’s revenues are highly seasonal, with approximately 70% of annual attendance and revenue typically occurring during the second and third quarters. The first quarter has historically represented only 5-10% of full-year results for the former Cedar Fair and Six Flags companies.

For the first quarter of 2025, the Combined Company reported a 98.8% increase in net revenues compared to the prior year period. This was driven by a 108.9% increase in attendance, reflecting the addition of the former Six Flags parks, as well as a 5.5% increase in in-park per capita spending.

Out-of-park revenues, which include resorts, sponsorships, and other non-park sources, increased by 12.2% year-over-year. However, the increase in revenues was more than offset by a 91.6% rise in operating costs and expenses, leading to a significantly higher operating loss of $321.0 million, compared to $126.3 million in the prior year.

The increase in operating costs was primarily due to the addition of the former Six Flags operations, which contributed $146.1 million in additional operating expenses. There were also increases in selling, general, and administrative expenses, as well as cost of goods sold. Depreciation and amortization expense increased by $92.0 million, largely due to the impact of the merger.

After accounting for interest, taxes, and non-controlling interests, the Combined Company reported a net loss of $219.7 million for the quarter, compared to a $133.5 million loss in the prior year period.

Strengths and Weaknesses

The key strengths of the Combined Company include:

• Expanded and diversified property portfolio: The merger has created the largest regional amusement park operator in North America, with a broader geographic footprint and more diverse set of attractions.
• Improved guest experience: The companies’ complementary operating capabilities are expected to enhance the overall guest experience.
• Opportunity for accelerated investment: The combined cash flows of the two companies provide the opportunity to invest in capital improvements and new attractions across the portfolio.
• Integration of technology: The Combined Company plans to integrate and harmonize its technology systems to improve efficiency and the guest-facing digital experience.

The main weaknesses or challenges include:

• Integration and synergy capture: Successfully integrating the two companies and realizing the anticipated cost synergies will be critical to improving profitability.
• Seasonality and weather dependence: The business remains highly seasonal, with the majority of revenues and profits concentrated in the summer months. Adverse weather or other conditions during this peak period can have a disproportionate impact.
• Inflationary pressures: Rising costs for labor, supplies, and other inputs have been putting pressure on margins and will need to be managed effectively.
• Debt load: The Combined Company has a significant debt burden, with over $3.5 billion in long-term debt obligations as of March 30, 2025. Servicing this debt will be an ongoing priority.

Outlook and Future Prospects

Looking ahead, the Combined Company has outlined its “Project Accelerate” strategy to enhance shareholder value. The key objectives include:

1. Enhancing the guest experience through a stronger price-value proposition to drive demand.
2. Identifying and activating operating efficiencies to generate cost synergies and expand margins.
3. Maintaining a disciplined approach to capital investments to realize the full market potential of each park.
4. Integrating technology systems to eliminate redundancies and improve the guest experience.
5. Evaluating the potential divestiture of non-core assets.

To achieve these objectives, the Combined Company plans to invest approximately $1 billion in capital expenditures over 2025-2026 to open new rides and attractions, renovate water parks, and upgrade food and beverage facilities. Management also expects to continue realizing cost synergies in 2025 that began in 2024.

The Combined Company is forecasting capital expenditures of $475-$500 million in 2025, with cash interest payments of $310-$315 million and cash tax payments of $95-$105 million. Deferred revenue, which represents advance ticket sales and other prepaid items, totaled $374.2 million as of March 30, 2025, providing a source of near-term liquidity.

Overall, the merger has created a larger, more diversified amusement park operator with significant opportunities to improve the guest experience, drive operational efficiencies, and invest in growth. However, the Combined Company faces ongoing challenges related to seasonality, inflation, and its substantial debt load that will need to be carefully managed. The success of the “Project Accelerate” strategy will be crucial in determining the future prospects of the business.