2018 SIXFLAGS ANNUAL.pdf 1 3/1/18 1:32 PM Six Flags Entertainment Corporation 924 Avenue J East 2017 ANNUAL REPORT Grand Prairie, Texas 75050 972-595-5000 www.sixflags.com C M Y CM MY CY CMY K Dear Six Flags Shareholders, Six Flags has the strongest and most recognized brand in the very compelling regional theme park sector of the entertainment industry. We sit at the sweet spot of broad trends driving the “experience” and “membership” economies, while being insulated from the online threats impacting so many companies. I am very proud of our outstanding team members who overcame unprecedented natural events to deliver our eighth consecutive year of record financial performance in 2017. I am even more excited about our future as we continue to build our lucrative, recurring revenue base. In 2017, Adjusted EBITDA (1) grew two percent, and our Modified EBITDA (1) margin remained the industry high. We returned $727 million to shareholders in the form of stock repurchases and dividends and delivered a 16 percent total return. In addition, we increased our dividend twice since the third quarter 2017 to an annual run-rate of $3.12 per share. This marks our ninth consecutive year of dividend increases and provides a yield more than double the S&P 500, making us the ultimate growth and yield stock. Over the course of 2017, we made notable progress to advance all our five major growth areas: 1) Took pricing up 3-5 percent on all our tickets, while reaching new highs in our value-for-the- money-ratings and achieving the most successful pre-sale of season passes in company history; 2) Grew our Active Pass Base—the number of guests who have a season pass or who are enrolled in the company’s membership program—by 10% to a new all-time high, while growing the proportion of contractual revenue from memberships; 3) Increased penetration of our all season dining pass, leading to higher sales of our high-margin and lucrative culinary products; 4) Announced five additional theme parks in China, bringing our total to eight parks under development and demonstrating the momentum of our emergent international licensing business; and 5) Finally, as part of our new waterpark initiative, successfully opened two new waterparks near our theme parks in Mexico and Northern California, expanding our addressable market. Our exceptional track record is the direct result of everything our committed Six Flags team does to engage and build relationships with our guests, leading to loyalty, retention and longer and more frequent visitation. I have never been more confident about our strategy and future growth potential. Spirits are high as we remain focused and invigorated to achieve our aspirational target of $750 million of Modified EBITDA (1) by 2020. As always, I thank you for your continued trust and support. Jim Reid-Anderson Chairman, President and CEO Six Flags Entertainment Corporation (1) See the inside back cover of this annual report for the definition of Adjusted EBITDA and Modified EBITDA, and a reconciliation of these measures to U.S. GAAP financial measures. 5BCMFPG$POUFOUT 6/*5&%45"5&4 4&$63*5*&4"/%&9$)"/(&$0..*44*0/ 8BTIJOHUPO %$ '03., a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