Six Flags Entertainment Corporation · NYSE:FUN
Six Flags Entertainment — Cedar Fair — Debt Investor Presentation (June 2006)
48 slides from Six Flags Entertainment's debt investor presentation, Jun 15, 2006
Slide 1: Presentation to Prospective Lenders: Senior Secured Credit Facilities
* Exhibit 99 * * * * ***** Presentation to Prospective Lenders $2,095,000,000 Senior Secured Credit Facilities June 2006
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking information, 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, that is based on management’s beliefs and assumptions, current expectations, estimates
Slide 3: Agenda
Agenda Transaction Overview Acquisition Rationale Cedar Fair Overview Paramount Parks Overview Historical Financial Results Syndication Overview Public Q&A Projected Pro Forma Financial Results Private Q&A
Slide 4: Transaction Overview
* * * * * ****** Transaction Overview
Slide 5: Transaction Overview
Transaction Overview On May 22, 2006, Cedar Fair entered into a definitive agreement to acquire Paramount Parks for approximately $1.24 billion(1) Paramount Parks owns and operates five amusement parks in North America with over 12 million annual visitors As part of the Acquisition, Cedar Fair inten
Slide 6: Sources and Uses of Funds
($ in millions) Sources and Uses of Funds(1) Sources Uses Revolver(2) $20.2 Purchaseof Paramount Parks $1,213.2 US Dollar Term Loan(3) 1,475.0 RefinanceExisting CedarFair Debt 483.0 CanadianRevolver(4) 0.0 Estimated Feesand Expenses 54.0 CanadianTerm Loan 270.0 Cost to Achieve Synergies(5) 15.0 Tota
Slide 7: Pro Forma Capitalization
($ in millions) Pro Forma Capitalization(1) PF Acquisition Multiple of PF and Equity Multiple of PF PF Acquisition LTM EBITDA(2) Offering LTM EBITDA(2) Cash $2.0 $2.0 US Revolver(3) 20.2 0.1x 31.4 0.1x CanadianRevolver(4) 0.0 0.0 0.0 0.0 US Term Loan 1,475.0 4.7 1,225.0 3.9 Canadian Term Loan 270.0
Slide 8: Senior Management Representatives
Senior Management Representatives Richard L. Kinzel Chairman, President and Chief Executive Officer Peter J. Crage Chief Financial Officer
Slide 9: Experienced Management Team
Experienced Management Team The Company’s senior management team has extensive experience in the theme park industry. Years with Years in Name/Position Cedar Fair Theme Park Industry Richard Kinzel-Chairman, President and CEO 34 34 Jack Falfas-Chief Operating Officer 30 30 Peter Crage-Chief Financia
Slide 10: Cedar Fair Overview
Cedar Fair Overview Business Description Cedar Fair owns seven amusement parks: 5 6 Cedar Point (Sandusky, OH) 7 8 9 Knott’s Berry Farm (Buena Park, CA) 4 Dorney Park (Allentown, PA) 1 2 Valleyfair (Shakopee, MN) Worlds of Fun (Kansas City, MO) 3 Geauga Lake (Cleveland, OH) Michigan’s Adventure (Mus
Slide 11: Paramount Parks Company Overview
Paramount Parks Company Overview Paramount Parks owns five of the 35 most attended theme parks in North America including: 3 Canada’s Wonderland (Toronto, Ontario) 2 5 Kings Island (Cincinnati, OH) 1 Kings Dominion (Doswell, VA) 4 Carowinds (Charlotte, NC) Great America (Santa Clara, CA) All parks i
Slide 12: Acquisition Rationale
* * * * * * * * * Acquisition Rationale * * *
Slide 13: Compelling Strategic Rationale
Compelling Strategic Rationale Well-run family-oriented theme parks Attractive & Complementary locations Complementary Asset Portfolio Quality assets-minimal “catch-up” capital and maintenance expenditures required Corporate overhead More efficient operations Significant Potential Opportunity for Sy
Slide 14: Complementary Asset Portfolio
Complementary Asset Portfolio After the Acquisition, Cedar Fair will have a national footprint. Michigan’s Adventure Cedar Point Valleyfair Geauga Lake Paramount Canada’s Wonderland Shakopee, MN Paramount’s Muskegon, MI Toronto, ON Dorney Park and Worlds Cleveland, OH Wildwater Kingdom Great America
Slide 15: Enhanced Revenue Diversification
($ in millions) Enhanced Revenue Diversification The Company will have a diversified revenue stream with four parks generating attendance of over 3.0 million visits. Cedar Fair 2005 Revenue Pro Forma 2005 Revenue Mix by Park Mix by Park Michigan’s Geauga Kings Carowinds Great America Worlds Lake Adv
Slide 16: Opportunity to Improve Operating Performance
Opportunity to Improve Operating Performance While both Cedar Fair and Paramount have strong profitability, Cedar Fair will increase growth and margin after Paramount is fully integrated. 2001–2005 Growth 2005 In-Park Revenue per Capita 10% $50 8 6.2% 6 4.6% $37.68 40 $34.23 4 $32.37 1.4% 2.0% 1.0%
Slide 17: More Efficient Capital Spending
More Efficient Capital Spending Cedar Fair has achieved a dramatically higher return on invested capital and believes it can improve returns at Paramount Pre-Tax ROIC Commentary 20% Theming adds significant additional costs to 18.3% attraction development and implementation Incremental capital does
Slide 18: Branding Strategy
Branding Strategy In connection with the Acquisition, Cedar Fair will acquire the right to use the Paramount and Nickelodeon intellectual property under separate license agreements Each agreement includes a royalty on net sales in the acquired parks Nickelodeon brands are believed to drive family at
Slide 19: Steady-State Cost Synergy Estimates
($ in millions) Steady-State Cost Synergy Estimates Target Category Amount Comment Cost of Goods Sold: Merchandise $1.0–$1.5 Cedar Fair COGS lower as a % of sales Games 1.0–1.5 Driven by direct sourcing Wages (Full-time Excl. Corp.) 5.0–7.0 Significant differences in staffing levels and in some inst
Slide 20: Integration Strategy
Integration Strategy Cedar Fair will draw on its acquisition experience to efficiently realize synergies and cost reductions while improving operations. Stage One Stage Two Stage Three Immediate corporate Adjust staffing Optimal pricing and overhead reductions marketing strategies in Determine Param
Slide 21: Proven Acquisition Integration Success
(Amounts in millions, except Rev/Cap) Proven Acquisition Integration Success Since acquiring Knott’s Berry Farm and Dorney Park, Cedar Fair has driven substantial improvement in operating results at both parks. Case Study: Knott’s Berry Farm Case Study: Dorney Park Acquired in 1997 Acquired in 1992
Slide 22: Investment Highlights
Investment Highlights Strong Market Position Operating Scale and Diversity Significant Real Estate Holdings Strong Historical and Projected Results Industry Leading Operating Metrics Established and Well-Known Brands Significant Equity Value
Slide 23: Cedar Fair Overview
* * * * * * * * * * * * Cedar Fair Overview * * * * *
Slide 24: Cedar Fair Revenue Mix
($ in millions) Cedar Fair Revenue Mix 2005—By Park Michigan’s Geauga Worlds Lake Adventure of Fun 3.3% 4.6% 6.2% Cedar Point Valleyfair 37.0% 6.3% Dorney Park 9.8% Knott’s Berry Farm 32.8% 2005 Revenue of $568.2 million
Slide 25: Cedar Fair Summary Financial Information
(Amounts in millions, except Rev/Cap) Cedar Fair Summary Financial Information ’01–’05 CAGR (Excluding ’01–’05 Geauga 2001A 2002A 2003A 2004A(1) 2005A CAGR Lake(1) ) Attendance 11.9 12.4 12.2 12.6 12.7 1.6% 0.2 % In—Park Rev/Cap $34.41 $34.50 $35.48 $36.59 $37.68 2.3 2.3 Revenue(2) 475.2 500.2 508.1
Slide 26: Cedar Point Park Highlights
Cedar Point Park Highlights Industry leading profitability A “Destination Amusement Park” Out of park development includes hotels, campgrounds, cottages, restaurants and two marinas More than 65 rides including 16 world-class roller coasters including 3 of Coaster Magazine’s top 4 roller coasters Tw
Slide 27: Knott's Berry Farm Park Highlights
Knott’s Berry Farm Park Highlights Acquired by Cedar Fair in 1997 Year round park (364 days per year) lessens overall seasonality Huge market with 20 million local population and leading tourist destination Three separately gated Knott’s Soak City water parks One adjacent to Knott’s Berry Farm and o
Slide 28: Dorney Park and Valleyfair Park Highlights
Dorney Park Park Highlights Acquired by Cedar Fair in 1992, and is located near Allentown in South Whitehall Township, Pennsylvania Features more than 50 rides and attractions Significant turnaround after acquisition in 1992 Valleyfair Park Highlights Acquired in 1978 More than 35 rides and attracti
Slide 29: Worlds of Fun and Michigan's Adventure Park Highlights
Worlds of Fun Park Highlights Acquired by Cedar Fair in 1995 Traditional amusement park themed around Jules Verne’s adventure book Around the World in Eighty Days Offers its guests more than 40 rides and attractions One of the largest water parks in the Midwest Michigan’s Adventure Park Highlights A
Slide 30: Geauga Lake Park Highlights
Geauga Lake Park Highlights Acquired by Cedar Fair in 2004 Includes a 50 acre spring-fed lake and a wide variety of rides and attractions New Wildwater Kingdom water park built in 2005 and 2006
Slide 31: Paramount Parks Overview
* * * * ******* Paramount Parks Overview
Slide 32: Paramount Parks Revenue Mix
Paramount Parks Revenue Mix 2005—By Park Great Canada’s America Wonderland 15.5% 22.9% Carowinds 14.9% Kings Dominion Kings Island 20.0% 26.7% 2005 Revenue of $405.1 million
Slide 33: Paramount Parks Adjusted Financial Information
(Amounts in millions, except Rev/Cap) Paramount Parks Adjusted Financial Information ’01–’05 2001A 2002A 2003A 2004A 2005A CAGR Attendance(1) 11.2 10.8 10.7 11.9 12.2 2.2% Rev/Cap(1) $36.28 $36.13 $35.50 $34.68 $34.23 (1.4 ) Revenue(1)(2) 382.6 371.0 367.5 399.3 405.1 1.4 % Growth NA (3.0 %) (0.9 %)
Slide 34: Canada's Wonderland Park Highlights
Canada’s Wonderland Park Highlights Highest amusement park attendance for any seasonal theme park in North America (3.3 million in 2005) “National Theme Park of Canada”—attendance twice that of the second largest park in Canada (Six Flags, La Ronde in Montreal) Large growing and ethnically diverse c
Slide 35: Kings Island and Kings Dominion Park Highlights
Kings Island Park Highlights Strong local brand equity since founded in 1972 Attractions include 59 rides, six shows and Boomerang Bay Water Park Resort Caters to families with small children-Amusement Today’s ”Best Kid’s Area” in the world in each of the last five years Water park includes 50 water
Slide 36: Carowinds and Great America Park Highlights
Carowinds Park Highlights Limited competition-only regional theme park in the Carolinas Attractive local market-6.7% population growth projected in the next five years High seasonal pass penetration/local guest visitation Attractions include 45 rides, five shows and a water park Great America Park H
Slide 37: Historical Financial Results
* * * * * ****** Historical Financial Results
Slide 38: Summary Historical Combined Financial & Operating Information
($ in millions, except per capita) Summary Historical Combined Financial & Operating Information Attendance(1) 45 30 23 23 23 25 25 15 11 11 11 12 12 12 12 12 13 13 0 2001A 2002A 2003A 2004A 2005A % Growth 0.4% (1.3%) 7.0% 1.6% 2001–2005 CAGR = 1.9% Revenue Per Capita(1) $100 $35 $35 $35 $36 $36 50
Slide 39: Summary Historical Combined Financial & Operating Information (cont.)
($ in millions, except per capita) Summary Historical Combined Financial & Operating Information (cont.) Revenue $1,200 $939 $973 $858 $871 $876 900 $399 $405 $383 $371 $368 600 300 $539 $568 $475 $500 $508 0 2001A 2002A 2003A 2004A 2005A % Growth 1.6% 0.5% 7.2% 3.7% 2001–2005 CAGR = 3.2% (1) (2) Ce
Slide 40: Summary Historical Combined Financial & Operating Information (cont.)
($ in millions, except per capita) Summary Historical Combined Financial & Operating Information (cont.) EBITDA $400 $304 $270 $277 $254 $262 $109 $92 $94 $103 200 $101 $170 $177 $173 $194 $153 0 2001A 2002A 2003A 2004A 2005A (1) (2) Cedar Fair Paramount % Growth 3.3% 3.0% 2.4% 9.8% % Margin-Total 2
Slide 41: Summary Historical Combined Financial & Operating Information (cont.)
($ in millions, except per capita) Summary Historical Combined Financial & Operating Information (cont.) Capital Investment (1) $200 $133 $93 $45 100 $91 $88 $85 $42 $39 $42 $42 $88 $49 $43 $49 $51 0 2001A 2002A 2003A 2004A 2005A % of Revenue 10.6% 9.7% 10.1% 9.9% 13.7% Cedar Fair Paramount (1) Repr
Slide 42: Syndication Overview
* * * * * ******* Syndication Overview
Slide 43: Pro Forma Corporate Structure
Pro Forma Corporate Structure Public Corporate L.Ps. G.P. Corporate HoldCo Canada’s Kings Great Kings Carowinds Wonderland Dominion America Island (Foreign)
Slide 44: Summary of Terms—Senior Credit Facilities
($ in millions) Summary of Terms—Senior Credit Facilities ` Borrowers: Cedar Fair, L.P. (the “US Borrower”), Paramount Canada’s Wonderland (the “Canadian Borrower”) (collectively the “Borrowers”) Guarantors: Any parent company of the Borrowers and each of the Borrowers’ direct and indirect present a
Slide 45: Summary of Terms—Senior Credit Facilities (cont.)
Summary of Terms—Senior Credit Facilities (cont.) Financial Covenants: (i) Maximum Total Leverage Ratio and (ii) Minimum Fixed Charge Coverage Ratio Permitted No default or event of Default; Distributions: No Distribution Suspension Period; Such Payment, together with all such other restricted payme
Slide 46: Syndication Timetable
Syndication Timetable(1) 2006 June July S M T W T F S S M T W T F S 1 2 3 1 4 5 6 7 8 9 10 2 3 4 5 6 7 8 11 12 13 14 15 16 17 9 10 11 12 13 14 15 18 19 20 21 22 23 24 16 17 18 19 20 21 22 25 26 27 28 29 30 23 24 25 26 27 28 29 30 31 Holiday Key Dates Key Dates Event June 15 Bank Meeting June 29 Comm
Slide 47: Public Q&A
* * * * * Public Q&A ******
Slide 48: Presentation to Prospective Lenders: Private Version
* * * * * ****** Presentation to Prospective Lenders Private Version $2,095,000,000 Senior Secured Credit Facilities June 2006