Six Flags Entertainment Corporation · NYSE:FUN
Six Flags Entertainment — Debt Investor Presentation (November 2009)
35 slides from Six Flags Entertainment's debt investor presentation, Nov 9, 2009
Slide 1: Management Presentation to Subcommittee of SFO Noteholders
October 29, 2009 Management Presentation to Subcommittee of SFO Noteholders
Slide 2: Disclaimer
Disclaimer 2 This presentation (the “Presentation”) was produced to provide information to the Subcommittee Committee of SFO Noteholders (the “Informal Committee”) pursuant to a potential amended plan of reorganization (the “Amended Plan”) for Six Flags, Inc. and its subsidiaries (“Six Flags”, “SFI”
Slide 3: Disclaimer: Cautionary Statement Regarding Forward-Looking Information
Disclaimer 3 Cautionary Statement Regarding Forward-Looking Information This Presentation may contain “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,”
Slide 4: Disclaimer: Non-GAAP Financial Measures
Disclaimer 4 Non-GAAP Financial Measures The Company uses “Adjusted EBITDA”, “Modified EBITDA” and “Free Cash Flow” to assess the operating results and effectiveness of its business. These terms presented in this Presentation are supplemental measures of performance that are not required by, or reco
Slide 5: Long Range Plan Executive Summary
Long Range Plan Executive Summary Plan is based upon gradual economic recovery over the period rather than “hockey-stick” rebound Moderate top-line growth in attendance and per caps when added to solid sponsorship and licensing increases results in revenue growth exceeding industry multi-year foreca
Slide 6: US Amusement and Theme Park Outlook
Long Range Plan US Amusement and Theme Park Outlook Set forth below is the projected revenue growth for both Six Flags and the Amusement Industry IBISWorld estimates that over the five years to 2014, industry revenue will increase at an average annual rate of 2.1% The Company is projecting to grow f
Slide 7: Long Range Plan Attendance
Long Range Plan 7 Long Range Plan Attendance 2010 attendance growth of 800K primarily driven by rebound from 2009 swine flu impact in Mexico and Texas, distance from negative publicity relating to restructuring, reduced season pass pricing and more normalized weather Attendance decline in 2009 (1.4M
Slide 8: Long Range Plan Per Capita Spending
Long Range Plan Long Range Plan Per Capita Spending Moderate 2010 per cap growth of $0.28 / 0.7% driven by significant growth in sponsorship/licensing, partially offset by lower season pass pricing in New York, Chicago, Dallas, San Antonio, and New England Growth of $1.10 / 2.8% in 2011 driven by 50
Slide 9: Sponsorship / Licensing / Management Fees
Long Range Plan 9 Long Range Plan Sponsorship / Licensing / Management Fees Sponsorship growth primarily driven by leveraging new SFTV media assets, sales staff expansion, as well as the recovery of the advertising market Licensing increases in out years primarily driven by the Dubai project startin
Slide 10: Cash Operating Expenses
Long Range Plan Long Range Plan Cash Operating Expenses 2010 expense growth of $10MM / 2% to 2009 driven by increases in minimum wages, royalties, other operating cost inflation and an increased investment in corporate alliance sales personnel that are offset by reductions in agency fees and employe
Slide 11: 2010 Attendance Bridge
2010 Attendance Bridge (000) 2009 FCST 23,941.9 2009 Capital (55.0) 2010 Capital 153.0 Pricing / Swine Flu/ Weather 884.4 Week 53 (174.3; Total Change 808.1 2010 PLAN 24,750.0
Slide 12: 2010 In-Park Spending Bridge
2010 In-Park Spending Bridge 12
Slide 13: Sponsorship and Licensing
soltritas 4 Sponsorship and Licensing ~~
Slide 14: Sponsorship/Licensing 2005 – 2010 Evolution
Sponsorship/Licensing 2005 – 2010 Evolution 14 2010 2009 2008 2007 2006 2005 Amounts in ($000, except PCs) Plan Forecast Actual Actual Actual Actual Total Attendance 24,750 23,942 25,342 24,902 24,840 28,201 Sponsorship/Licensing Revenues 52,000 42,480 59,029 38,596 25,713 20,433 Per Cap $2.10 $1.77
Slide 15: 2009 National/Regional Deals
2009 National/Regional Deals American Express Ben & Jerry’s T-Mobile Cartoon Network Chase Chrysler Cigna Coca Cola Cold Stone Creamery DirecTV Kraft Levi’s Signature Mars McDonald’s MGM Nokia Panda Express Papa John’s Post Skittles 2009 results achieved via execution / fulfillment for over 40 natio
Slide 16: Intellectual Property
sulle lags 4 Intellectual Property
Slide 17: Impact of Costumed Characters
Impact of Costumed Characters Value for the Money Overall Experience Guests seeing costumed characters significantly more likely to rate “Value for the Money” and “Overall Experience” a “10” versus those not seeing characters Guests who do not recall seeing costumed characters significantly more lik
Slide 18: Costumed Characters Stimulate Spending
Costumed Characters Stimulate Spending Source: 2009 GSS Guests who saw costumed characters more likely to spend money Proportion of Guest Participation 19
Slide 19: Costumed Characters Stimulate Spending (continued)
Costumed Characters Stimulate Spending (continued) CAGR ‘05 – ’08: 23.8 % Investment in costumed character program in 2006 yielded significant average annual growth of Warner Bros. & DC Comics licensed retail items sold Annual Royalty Payment to WB ($) 20
Slide 20: Value of Intellectual Property
Value of Intellectual Property No comparable retail location during prior year As of: 10/27/2009 Ride opened : 5/23/2009 Introduced the Dark Knight coasters (2) in 2008 for relatively low capital investment ($8 million) Attendance increase was 188,006 and 126,030 in New York and Chicago, respectivel
Slide 21: GSS Comparison 2009 vs. 2005
GSS Comparison 2009 vs. 2005 Overall, we are providing a better experience, with increases in satisfaction, likelihood to recommend and visitation intent These overall gains have been realized through cleaning up our parks, providing a variety of high quality product and more efficiently delivering
Slide 22: GSS Comparison 2009 vs. 2005 (Cont'd)
GSS Comparison 2009 vs. 2005 (Cont’d) Ratings of shows have declined from 2005 to 2009 due to an overall reduction in the number of shows, their frequency as well as a shift to taped content from live content. Source: 2005 and 2009 GSS 23 Six Flags Guest Satisfaction Survey 2009 2005 Difference Aver
Slide 23: Corporate Operating Expense Bridge
Corporate Operating Expense Bridge 25
Slide 24: Office Rent Comparison
Office Rent Comparison 26 Key Benefits of being located in New York City Proximity to our ad agency, media, and production partners Larger base of potential sponsorship partners Close to major financial institutions Six of our parks are located on the east coast and 2 within driving distance
Slide 25: Alternative Plan Observations
Alternative Plan Observations
Slide 26: Alternative Plan Observations
Alternative Plan Observations Observations are based on review of limited top-line summaries of the Kings Leisure (“Kings”) business plan as described in presentations dated July 23rd, August 19th, and a Barclays presentation dated October 23rd REVENUE OBSERVATIONS Top-line revenue growth relies on
Slide 27: Alternative Plan Observations (continued)
Alternative Plan Observations (continued) COST OBSERVATIONS The Kings plan appears to contemplate reducing corporate costs by $25 million without any detail other than citing “industry benchmarks” of 2.5% of revenue while also citing 4.4 – 5.3% in “other organizations” Notwithstanding the corporate
Slide 28: Paramount Park Performance 2003 - 2005
Paramount Park Performance 2003 - 2005 Paramount Parks ran at an average 25.8% EBITDA margin from 2003 to 2005 with only direct allocation of corporate G&A Although revenue grew from $375MM to $423MM, EBITDA increased only $13MM Average annual Capex spend was $45MM (11.2% of revenue) on average on a
Slide 29: Appendix
sulle lags a APPENDIX
Slide 30: Appendix: Cedar Fair Comparison
APPENDIX Cedar Fair Comparison
Slide 31: Operating Performance Comparison
Operating Performance Comparison Set forth below is a comparison of Six Flags, Inc.’s and Cedar Fair LP’s financial performance for each of FYE 2008 In order to demonstrate financial performance on a comparable basis, given Six Flags’ non-wholly owned parks (the “Partnership Parks”), this analysis c
Slide 32: Per Capita Comparison
Per Capita Comparison Per Cap Spending Comparison Cedar Fair’s EBITDA Margins were approximately 5.6 ppts higher than Six Flags’ EBITDA Margins in 2008 The difference is primarily attributable to its significant ticket per cap premium over Six Flags Cedar Fair is able to obtain higher ticket pricing
Slide 33: Marketing Cost Comparison
Marketing Cost Comparison Due to the location of its parks, Six Flags has significantly higher marketing and advertising costs than Cedar Fair Six Flags’ parks are concentrated in high cost Designated Market Areas (“DMAs”), particularly on the East Coast, while Cedar Fair’s parks are concentrated pr
Slide 34: Geographic Footprint
Geographic Footprint As shown in the chart below, Six Flags operates thirteen parks in the top ten DMAs in the United States while Cedar Fair operates only four parks in the top ten DMAs Six Flags’ Designated Market Areas Cedar Fair’s Designated Market Areas 37
Slide 35: Cost of Living Comparison
Cost of Living Comparison Of the 18 US parks that Six Flags operates, 12 are in cities that have a cost of living that is over 10% greater than the US average Of those, 8 are over 20% higher than average Of the 16 US theme and water parks that Cedar Fair operates, 10 are in cities that have a cost o
Six Flags — Debt Investor Presentation (November 2009) on 6ix