Q4 2014 Annual Report

2014 Annual Report Dear Six Flags Shareholders, Over the last five years we have built an increasingly stable foundation for the company and are well- positioned for future growth. In 2014 we achieved new record highs in all of our key metrics that track how well we serve and build value for our guests, shareholders and employees. Our success starts with a focused business strategy and team members who consistently develop and execute new ways to delight our guests. It is through their dedication and creativity that Six Flags leads the industry in innovation—including new rides, attractions and services—helping us achieve our highest guest satisfaction ratings ever while maintaining world-class safety standards and keeping our guests safe. We also set new records for financial performance in 2014. Revenue increased six percent to $1.2 billion as we optimized ticket yields, grew our season pass holder and membership base, and expanded our in-park offerings including our All Season Dining Pass. In addition, we took significant steps toward expanding our brand outside North America by aligning with two partners to develop Six Flags-branded theme parks in China and the Middle East. Combined with improved operational efficiencies, Adjusted EBITDA(1) grew 9 percent during the year and our Modified EBITDA(1) margin reached another new industry high. For the year, our shareholders earned a 23 percent return on investment resulting from a combination of share price appreciation and a near five percent dividend yield. Our recent success is only the beginning of a long-term approach to taking Six Flags to new heights. Every minute of every day we are creating fun and thrilling memories for our guests and building an even stronger foundation for our shareholders. Our future growth will come from improved ticket yields, further penetration of season pass and membership sales, and higher in-park revenue. In addition, our goal is to build additional licensing relationships outside of North America in attractive growing markets. We believe our strategy will yield significant benefits for our guests, employees and shareholders for years to come. I am convinced that our future remains very bright, and I cannot imagine a more dedicated or energized team to lead this company into the future. Thank you for your ongoing support of me, my team and Six Flags as we work to further enhance shareholder value. Jim Reid-Anderson Chairman, President, and Chief Executive Officer Six Flags Entertainment Corporation (1) See inside back cover for the definition of Adjusted EBITDA and Modified EBITDA, and a reconciliation of these measures to U.S. GAAP financial measures. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2014 or Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 1-13703 SIX FLAGS ENTERTAINMENT CORPORATION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of 13-3995059 incorporation or organization) (I.R.S. Employer Identification No.) 924 Avenue J East Grand Prairie, Texas 75050 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (972) 595-5000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, par value $0.025 per share New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1993. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No On the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the common stock of the registrant held by non-affiliates was approximately $3,116.0 million based on the closing price ($42.55) of the common stock on The New York Stock Exchange on such date. Shares of common stock beneficially held by each executive officer and director and one major stockholder have been excluded from this computation because these persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purposes. Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No On February 13, 2015, there were 93,055,389 shares of common stock, par value $0.025, of the registrant issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the information required in Part III by Items 10, 11, 12, 13 and 14 are incorporated by reference to the registrant's proxy statement for the 2015 annual meeting of stockholders, which will be filed by the registrant within 120 days after the close of its 2014 fiscal year. TABLE OF CONTENTS Page No. Part I Item 1 Business 1 Item 1A Risk Factors 11 Item 1B Unresolved Staff Comments 19 Item 2 Properties 20 Item 3 Legal Proceedings 20 Item 4 Mine Safety Disclosures 21 Part II Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Item 5 Securities 22 Item 6 Selected Financial Data 25 Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 7A Quantitative and Qualitative Disclosures about Market Risk 39 Item 8 Financial Statements and Supplementary Data 40 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 78 Item 9A Controls and Procedures 78 Item 9B Other Information 78 Part III Item 10 Directors, Executive Officers and Corporate Governance 79 Item 11 Executive Compensation 79 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 79 Item 13 Certain Relationships and Related Transactions and Director Independence 80 Item 14 Principal Accounting Fees and Services 80 Part IV Item 15 Exhibits and Financial Statement Schedules 81 Signatures 82 i CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K (the "Annual Report") and the documents incorporated herein by reference contain 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. Forward-looking statements include all statements that are not historical facts and can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "may," "should," "could" and variations of such words or similar expressions. Forward-looking statements are based on our current beliefs, expectations and assumptions regarding our business, the economy and other future conditions. Because forward- looking statements relate to the future, they are, by their nature, subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward- looking statements. Therefore, we caution you that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. 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, but are not limited to, statements we make regarding: (i) the adequacy of cash flows from operations, available cash and available amounts under our credit facilities to meet our future liquidity needs, (ii) our ability to roll out our capital enhancements in a timely and cost effective manner, (iii) our ability to improve operating results by implementing strategic cost reductions, and organizational and personnel changes without adversely affecting our business, and (iv) our operations and results of operations.

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