Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 18, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2019 | |
Entity Registrant Name | Six Flags Entertainment Corporation | |
Entity File Number | 1-13703 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3995059 | |
Entity Address, Address Line One | 924 Avenue J East, | |
Entity Address, City or Town | Grand Prairie | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75050 | |
City Area Code | 972 | |
Local Phone Number | 595-5000 | |
Title of 12(b) Security | Common stock, $0.025 par value per share | |
Trading Symbol | SIX | |
Security Exchange Name | NYSE | |
Entity Central Index Key | 0000701374 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 84,524,441 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 211,797 | $ 44,608 |
Accounts receivable, net | 199,127 | 116,043 |
Inventories | 36,953 | 28,779 |
Prepaid expenses and other current assets | 60,508 | 52,499 |
Total current assets | 508,385 | 241,929 |
Property and equipment, net: | ||
Property and equipment, at cost | 2,322,291 | 2,204,678 |
Accumulated depreciation | (1,032,914) | (950,996) |
Total property and equipment, net | 1,289,377 | 1,253,682 |
Other assets: | ||
Right-of-use operating leases, net | 202,935 | |
Debt issuance costs | 3,836 | 1,793 |
Deposits and other assets | 10,740 | 11,277 |
Goodwill | 659,618 | 659,618 |
Intangible assets, net of accumulated amortization of $22,623 and $21,133 as of September 30, 2019 and December 31, 2018, respectively | 345,812 | 349,029 |
Total other assets | 1,222,941 | 1,021,717 |
Total assets | 3,020,703 | 2,517,328 |
Current liabilities: | ||
Accounts payable | 51,428 | 32,905 |
Accrued compensation, payroll taxes and benefits | 23,994 | 30,468 |
Accrued insurance reserves | 37,108 | 39,183 |
Accrued interest payable | 20,819 | 30,697 |
Other accrued liabilities | 61,038 | 45,880 |
Deferred revenue | 197,674 | 146,227 |
Short-term borrowings | 43,000 | |
Current portion of long-term debt | 8,000 | |
Short-term operating lease liabilities | 10,585 | |
Total current liabilities | 410,646 | 368,360 |
Noncurrent liabilities: | ||
Long-term debt | 2,268,704 | 2,063,512 |
Long-term operating lease liabilities | 185,365 | |
Other long-term liabilities | 22,133 | 29,280 |
Deferred income taxes | 223,656 | 173,998 |
Total noncurrent liabilities | 2,699,858 | 2,266,790 |
Total liabilities | 3,110,504 | 2,635,150 |
Redeemable noncontrolling interests | 545,386 | 525,271 |
Stockholders' deficit: | ||
Preferred stock, $1.00 par value | ||
Common stock, $0.025 par value, 140,000,000 shares authorized; 84,516,567 and 83,962,182 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 2,113 | 2,099 |
Capital in excess of par value | 1,066,312 | 1,037,640 |
Accumulated deficit | (1,628,394) | (1,611,334) |
Accumulated other comprehensive loss, net of tax | (75,218) | (71,498) |
Total stockholders' deficit | (635,187) | (643,093) |
Total liabilities and stockholders' deficit | $ 3,020,703 | $ 2,517,328 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Condensed Consolidated Balance Sheets | ||
Accumulated amortization of intangible assets | $ 22,623 | $ 21,133 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, par value (in dollars per share) | $ 0.025 | $ 0.025 |
Common stock, shares authorized (in shares) | 140,000,000 | 140,000,000 |
Common stock, shares issued (in shares) | 84,516,567 | 83,962,182 |
Common stock, shares outstanding (in shares) | 84,334,531 | 83,962,182 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Total revenues | $ 621,180 | $ 619,820 | $ 1,226,583 | $ 1,194,204 |
Operating expenses (excluding depreciation and amortization shown separately below) | 189,820 | 188,704 | 482,690 | 455,168 |
Selling, general and administrative expenses | 55,144 | 65,783 | 154,977 | 175,507 |
Costs of products sold | 53,508 | 50,081 | 107,296 | 100,064 |
Other net periodic pension benefit | (1,038) | (1,290) | (3,148) | (3,844) |
Depreciation | 30,084 | 29,008 | 87,228 | 84,335 |
Amortization | 601 | 612 | 1,805 | 1,835 |
Gain (loss) on disposal of assets | 2,659 | 386 | 3,105 | 2,551 |
Interest expense | 28,686 | 27,142 | 86,965 | 80,820 |
Interest income | (350) | (157) | (709) | (470) |
Loss on debt extinguishment | 6,231 | |||
Other (income) expense, net | 231 | (130) | (1,474) | 2,159 |
Income before income taxes | 261,835 | 259,681 | 301,617 | 296,079 |
Income tax expense | 61,626 | 55,260 | 70,644 | 59,498 |
Net income | 200,209 | 204,421 | 230,973 | 236,581 |
Less: Net income attributable to noncontrolling interests | (20,376) | (20,004) | (40,753) | (40,007) |
Net income attributable to Six Flags Entertainment Corporation | $ 179,833 | $ 184,417 | $ 190,220 | $ 196,574 |
Weighted-average common shares outstanding: | ||||
Weighted-average common shares outstanding-basic (in shares) | 84,413 | 84,143 | 84,276 | 84,087 |
Weighted-average common shares outstanding - diluted (in shares) | 85,045 | 85,516 | 84,938 | 85,504 |
Net income per average common share: | ||||
Net income per average common share outstanding - basic (in dollars per share) | $ 2.13 | $ 2.19 | $ 2.26 | $ 2.34 |
Net income per average common share outstanding - diluted (in dollars per share) | 2.11 | 2.16 | 2.24 | 2.30 |
Cash dividends declared per common share (in dollars per share) | $ 0.82 | $ 0.78 | $ 2.46 | $ 2.34 |
Park Admissions | ||||
Total revenues | $ 352,664 | $ 350,977 | $ 671,252 | $ 657,769 |
Park Food, Merchandise and Other | ||||
Total revenues | 242,059 | 232,952 | 472,692 | 451,253 |
Sponsorship, International Agreements and Accommodations | ||||
Total revenues | $ 26,457 | $ 35,891 | $ 82,639 | $ 85,182 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Consolidated Statements of Operations | ||||
Stock-based compensation | $ 3,903 | $ 10,183 | $ 11,347 | $ 30,772 |
Condensed Consolidation Stateme
Condensed Consolidation Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |||
Condensed Consolidated Statements of Comprehensive Income | ||||||
Net income | $ 200,209 | $ 204,421 | $ 230,973 | $ 236,581 | ||
Other comprehensive (loss) income, net of tax: | ||||||
Foreign currency translation adjustment | (1,466) | [1] | 3,338 | [1] | 249 | 4,413 |
Defined benefit retirement plan | 151 | [2] | 135 | [2] | 440 | 401 |
Change in cash flow hedging | (2,268) | [3] | (4,409) | |||
Other comprehensive loss, net of tax | (3,583) | 3,473 | (3,720) | 4,814 | ||
Comprehensive income | 196,626 | 207,894 | 227,253 | 241,395 | ||
Comprehensive income attributable to noncontrolling interests | (20,376) | (20,004) | (40,753) | (40,007) | ||
Comprehensive income attributable to Six Flags Entertainment Corporation | $ 176,250 | $ 187,890 | $ 186,500 | $ 201,388 | ||
[1] | Foreign currency translation adjustment is presented net of tax benefit of $0.4 million for the three months ended September 30, 2019 and tax expense of $0.9 million for the three months ended September 30, 2018, respectively. | |||||
[2] | Defined benefit retirement plan is presented net of tax expense of $0.1 million for the three months ended September 30, 2019 and net of nominal tax expense for the three months ended September 30, 2018, respectively. | |||||
[3] | Change in fair value of cash flow hedging is presented net of tax benefit of $0.8 million for the three months ended September 30, 2019. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Condensed Consolidated Statements of Comprehensive Income | ||||
Foreign currency translation adjustment, tax expense (benefit) | $ 0.4 | $ (0.9) | $ 0.1 | $ 1.2 |
Defined benefit retirement plan, tax | 0.1 | 0.1 | $ 0.1 | |
Derivatives qualifying as hedges, tax benefit | $ 0.8 | $ 1.5 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Common stock | Capital in excess of par value | Accumulated deficit | Accumulated other comprehensive loss | Total |
Increase (Decrease) in Stockholders' Deficit | |||||
Cumulative effect adjustment | $ 4,557 | $ (9,439) | $ (4,882) | ||
Adjusted balance at January 1, 2018 | $ 2,112 | $ 1,086,265 | (1,525,051) | (73,320) | (509,994) |
Beginning balance at Dec. 31, 2017 | $ 2,112 | 1,086,265 | (1,529,608) | (63,881) | (505,112) |
Beginning balance (in shares) at Dec. 31, 2017 | 84,488,433 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Issuance of common stock | $ 30 | 39,357 | 39,387 | ||
Issuance of common stock (in shares) | 1,190,870 | ||||
Stock-based compensation | 30,772 | 30,772 | |||
Dividends declared to common shareholders | (196,944) | (196,944) | |||
Repurchase of common stock | $ (33) | (10,493) | (70,466) | (80,992) | |
Repurchase of common stock (in shares) | (1,303,122) | ||||
Employee stock purchase plan | $ 1 | 1,089 | 1,090 | ||
Employee stock purchase plan (in shares) | 18,111 | ||||
Fresh start valuation adjustment for SFOT units purchased | 80 | 80 | |||
Net income attributable to Six Flags Entertainment Corporation | 196,574 | 196,574 | |||
Net other comprehensive income (loss), net of tax | 4,814 | 4,814 | |||
Ending balance at Sep. 30, 2018 | $ 2,110 | 1,146,990 | (1,595,807) | (68,506) | (515,213) |
Ending balance (in shares) at Sep. 30, 2018 | 84,394,292 | ||||
Beginning balance at Jun. 30, 2018 | $ 2,098 | 1,118,411 | (1,714,524) | (71,979) | (665,994) |
Beginning balance (in shares) at Jun. 30, 2018 | 83,910,255 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Issuance of common stock | $ 12 | 18,437 | 18,449 | ||
Issuance of common stock (in shares) | 484,657 | ||||
Stock-based compensation | 10,183 | 10,183 | |||
Dividends declared to common shareholders | (65,699) | (65,699) | |||
Repurchase of common stock | (45) | (1) | (46) | ||
Repurchase of common stock (in shares) | (684) | ||||
Employee stock purchase plan | 4 | 4 | |||
Employee stock purchase plan (in shares) | 64 | ||||
Net income attributable to Six Flags Entertainment Corporation | 184,417 | 184,417 | |||
Net other comprehensive income (loss), net of tax | 3,473 | 3,473 | |||
Ending balance at Sep. 30, 2018 | $ 2,110 | 1,146,990 | (1,595,807) | (68,506) | (515,213) |
Ending balance (in shares) at Sep. 30, 2018 | 84,394,292 | ||||
Beginning balance at Dec. 31, 2018 | $ 2,099 | 1,037,640 | (1,611,334) | (71,498) | (643,093) |
Beginning balance (in shares) at Dec. 31, 2018 | 83,962,182 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Issuance of common stock | $ 13 | 16,173 | 16,186 | ||
Issuance of common stock (in shares) | 528,330 | ||||
Stock-based compensation | 11,347 | 11,347 | |||
Dividends declared to common shareholders | (207,325) | (207,325) | |||
Repurchase of common stock | (52) | (52) | |||
Repurchase of common stock (in shares) | (882) | ||||
Employee stock purchase plan | $ 1 | 1,204 | 1,205 | ||
Employee stock purchase plan (in shares) | 26,937 | ||||
Fresh start valuation adjustment for SFOT units purchased | 45 | 45 | |||
Net income attributable to Six Flags Entertainment Corporation | 190,220 | 190,220 | |||
Net other comprehensive income (loss), net of tax | (3,720) | (3,720) | |||
Ending balance at Sep. 30, 2019 | $ 2,113 | 1,066,312 | (1,628,394) | (75,218) | (635,187) |
Ending balance (in shares) at Sep. 30, 2019 | 84,516,567 | ||||
Beginning balance at Jun. 30, 2019 | $ 2,108 | 1,058,675 | (1,738,955) | (71,635) | (749,807) |
Beginning balance (in shares) at Jun. 30, 2019 | 84,334,531 | ||||
Increase (Decrease) in Stockholders' Deficit | |||||
Issuance of common stock | $ 5 | 3,782 | 3,787 | ||
Issuance of common stock (in shares) | 182,851 | ||||
Stock-based compensation | 3,903 | 3,903 | |||
Dividends declared to common shareholders | (69,272) | (69,272) | |||
Repurchase of common stock | (48) | (48) | |||
Repurchase of common stock (in shares) | (815) | ||||
Net income attributable to Six Flags Entertainment Corporation | 179,833 | 179,833 | |||
Net other comprehensive income (loss), net of tax | (3,583) | (3,583) | |||
Ending balance at Sep. 30, 2019 | $ 2,113 | $ 1,066,312 | $ (1,628,394) | $ (75,218) | $ (635,187) |
Ending balance (in shares) at Sep. 30, 2019 | 84,516,567 |
Condensed Consolidation State_2
Condensed Consolidation Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||||
Net income | $ 200,209 | $ 204,421 | $ 230,973 | $ 236,581 | |
Adjustments to reconcile income to net cash used in operating activities: | |||||
Depreciation and amortization | 30,685 | 29,620 | 89,033 | 86,170 | |
Stock-based compensation | 11,347 | 30,772 | |||
Interest accretion on notes payable | 988 | 1,007 | |||
Loss on debt extinguishment | 6,231 | ||||
Amortization of debt issuance costs | 2,703 | 2,972 | |||
Other, including loss on disposal of assets | 3,773 | 5,755 | |||
Gain on sale of investee | (724) | ||||
Increase in accounts receivable | (83,061) | (94,567) | |||
Increase in inventories, prepaid expenses and other current assets | (19,188) | (24,614) | |||
Decrease in deposits and other assets | 242 | 515 | |||
Decrease in ROU operating leases | 6,030 | ||||
Increase in accounts payable, deferred revenue, accrued liabilities and other long-term liabilities | 62,266 | 68,786 | |||
Decrease in operating lease liabilities | (10,823) | ||||
Decrease in accrued interest payable | (9,878) | (5,020) | |||
Deferred income taxes | 50,953 | 33,654 | |||
Net cash used in operating activities | 340,865 | 342,011 | |||
Cash flows from investing activities: | |||||
Additions to property and equipment | (123,662) | (112,242) | |||
Property insurance recoveries | 1,637 | ||||
Acquisition of park assets, net of cash acquired | (19,059) | ||||
Proceeds from sale of assets | 24 | 55 | |||
Net cash used in investing activities | (122,001) | (131,246) | |||
Cash flows from financing activities: | |||||
Repayment of borrowings | (800,750) | (257,000) | |||
Proceeds from borrowings | 970,000 | 296,000 | |||
Payment of debt issuance costs | (8,927) | (793) | |||
Payment of cash dividends | (208,740) | (198,245) | |||
Proceeds from issuance of common stock | 17,391 | 40,477 | |||
Stock repurchases | (52) | (80,992) | |||
Purchase of redeemable noncontrolling interest | (217) | (353) | |||
Distributions to noncontrolling interests | (20,376) | (20,003) | |||
Net cash provided by (used in) financing activities | (51,671) | (220,909) | |||
Effect of exchange rate on cash | (4) | 1,205 | |||
Net increase (decrease) in cash and cash equivalents | 167,189 | (8,939) | |||
Cash and cash equivalents at beginning of period | 44,608 | 77,496 | $ 77,496 | ||
Cash and cash equivalents at end of period | $ 211,797 | $ 68,557 | 211,797 | 68,557 | $ 44,608 |
Supplemental cash flow information | |||||
Cash paid for interest | 93,153 | 81,861 | |||
Cash paid for income taxes | $ 24,953 | $ 24,659 |
General - Basis of Presentation
General - Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
General - Basis of Presentation | |
General - Basis of Presentation | 1. General — Basis of Presentation We own and operate regional theme parks and waterparks and are the largest regional theme park operator in the world and the largest operator of waterparks in North America based on the number of parks we operate. Of the 26 parks we owned or operated as of September 30, 2019, 23 parks are located in the United States, two are located in Mexico and one is located in Montreal, Canada. The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed, or omitted, pursuant to the rules and regulations of the SEC. "Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations" contains a discussion of our results of operations and our financial position and should be read in conjunction with the unaudited condensed consolidated financial statements and notes. The 2018 Annual Report includes additional information about us, our operations and our financial position, and should be referred to in conjunction with this Quarterly Report. The information furnished in this Quarterly Report reflects all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the results for the periods presented. Results of operations for the nine months ended September 30, 2019 are not indicative of the results expected for the full year. In particular, our park operations contribute more than half of their annual revenue during the period from Memorial Day to Labor Day each year, while expenses are incurred year-round. Additionally, we had increased costs in the current year related to the operations of the five new parks that we began operating on June 1, 2018, and Magic Waters, a waterpark in Rockford, Illinois that we began operating on April 1, 2019. a. Consolidated U.S. GAAP Presentation Our accounting policies reflect industry practices and conform to U.S. GAAP. The unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries. We also consolidate the partnerships that own Six Flags Over Texas ("SFOT") and Six Flags Over Georgia (including Six Flags White Water Atlanta) ("SFOG", and together with SFOT, the "Partnership Parks") as subsidiaries in our unaudited condensed consolidated financial statements, as we have determined that we have the power to direct the activities of the Partnership Parks that most significantly impact their economic performance and we have the obligation to absorb losses and receive benefits from the Partnership Parks that can be potentially significant to these entities. The equity interests owned by non-affiliated parties in the Partnership Parks are reflected in the accompanying unaudited condensed consolidated balance sheets as redeemable noncontrolling interests. See Note 6 for a description of the partnership agreements applicable to the Partnership Parks and Note 8 for further discussion on the non-affiliated parties’ share of the earnings of the Partnership Parks. b. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, including net operating loss and other tax carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. We recorded a valuation allowance of $116.4 million and $115.2 million as of September 30, 2019 and December 31, 2018, respectively, due to uncertainties related to our ability to use some of our deferred tax assets, primarily consisting of certain state net operating loss and other tax carryforwards, before they expire. The valuation allowance was based on our estimates of taxable income by jurisdiction in which we operate and the period over which our deferred tax assets were recoverable. Our projected taxable income over the foreseeable future gives us comfort that we will be able to use all of our federal net operating loss carryforwards before they expire. In determining the effective tax rate for interim periods, we consider the expected changes in our valuation allowance from current year originating or reversing timing differences between financial accounting and tax purposes and the taxable income or loss expected for the current year. For interim periods, we also account for the tax effect of significant non-recurring items in the period in which they occur as well as changes in the valuation allowance relating to a change in the assessment of the probability of utilization of the deferred income tax assets. Our liability for income taxes is finalized as auditable tax years pass their respective statutes of limitations in the various jurisdictions in which we are subject to tax. However, taxing authorities of these jurisdictions may audit prior years for which the statute of limitations is closed for the purpose of making an adjustment to our taxable income in a year for which the statute of limitations has not closed. Accordingly, taxing authorities of these jurisdictions may audit prior years of the Company and its predecessors for the purpose of adjusting net operating loss carryforwards to years for which the statute of limitations has not closed. We classify interest and penalties attributable to income taxes as part of income tax expense. As of September 30, 2019 and December 31, 2018, we had no recorded amounts for accrued interest or penalties. Because we do not permanently reinvest foreign earnings, United States deferred income taxes have been provided on unremitted foreign earnings to the extent that such foreign earnings are expected to be taxable upon repatriation. c. Long-Lived Assets We review long-lived assets, including finite-lived intangible assets subject to amortization, for impairment upon the occurrence of events or changes in circumstances that would indicate that the carrying value of the asset or group of assets may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of the asset or group of assets to the future net cash flows expected to be generated by the asset or group of assets. If such assets are not considered to be fully recoverable, any impairment to be recognized is measured by the amount by which the carrying amount of the asset or group of assets exceeds its respective fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. d. Earnings Per Common Share Basic earnings per common share is computed by dividing net income attributable to Holdings’ common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is computed by dividing net income attributable to Holdings’ common stockholders by the weighted average number of common shares outstanding during the period, including the effect of all dilutive common stock equivalents using the treasury stock method. In periods for which there is a net loss, diluted loss per common share is equal to basic loss per common share, since the effect of including any common stock equivalents would be antidilutive. Earnings per common share for the three and nine months ended September 30, 2019 and September 30, 2018 was calculated as follows: Three Months Ended Nine Months Ended (Amounts in thousands, except per share data) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Net income attributable to Six Flags Entertainment Corporation $ 179,833 $ 184,417 $ 190,220 $ 196,574 Weighted-average common shares outstanding - basic: 84,413 84,143 84,276 84,087 Effect of dilutive stock options and restricted stock units 632 1,373 662 1,417 Weighted-average common shares outstanding - diluted: 85,045 85,516 84,938 85,504 Earnings per share - basic: $ 2.13 $ 2.19 $ 2.26 $ 2.34 Earnings per share - diluted: $ 2.11 $ 2.16 $ 2.24 $ 2.30 e. Derivative Instruments and Hedging Activities We account for derivatives and hedging activities in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging We formally document all relationships between hedging instruments and hedged items, as well as our risk-management objective and our strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as cash flow hedges to forecasted transactions. We also assess, both at the hedge’s inception and on an ongoing basis throughout the contract term, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. Changes in the fair value of interest rate derivatives that are effective and that are designated and qualify as cash flow hedges are recorded in “Other comprehensive (loss) income” until operations are affected by the variability in cash flows of the designated hedged item, at which point they are reclassified to “interest expense”. Changes in the fair value of derivatives that do not qualify for hedge accounting or that are de-designated are recorded in “Other expense (income), net” in the unaudited condensed consolidated statements of operations. f. Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. We use a market approach for our recurring fair value measurements, and we endeavor to use the best information available. Accordingly, valuation techniques that maximize the use of observable impacts are favored. We present the estimated fair values and classifications of our financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurement. We use the following methods and assumptions to estimate the fair value of each class of financial instruments: ● The carrying values of cash and cash equivalents, accounts receivable, notes receivable, accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments. ● The measurement of the fair value of long-term debt is based on market prices that generally are observable for similar liabilities at commonly quoted intervals and is considered a Level 2 fair value measurement. See Note 3 for additional information. ● The measurement of the fair value of derivative assets and liabilities is based on market prices that generally are observable for similar assets and liabilities at commonly quoted intervals and is considered a Level 2 fair value measurement. Derivative assets and liabilities that have maturity dates equal to or less than twelve months from the balance sheet date are included in prepaid and other current assets and other accrued liabilities, respectively. Derivative assets and liabilities that have maturity dates greater than twelve months from the balance sheet date are included in deposits and other assets and other long-term liabilities, respectively. See Note 5 for additional information on our derivative instruments and related Company policies. g. Stock Benefit Plans Pursuant to the Six Flags Entertainment Corporation Long-Term Incentive Plan (the "Long-Term Incentive Plan"), Holdings may grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, deferred stock units, performance and cash-settled awards and dividend equivalent rights ("DERs") to select employees, officers, directors and consultants of Holdings and its affiliates. We recognize the fair value of each grant as compensation expense on a straight-line basis over the vesting period using the graded vesting terms of the respective grant. The fair value of stock option grants is estimated using the Black-Scholes option pricing valuation model. The fair value of stock, restricted stock units and restricted stock awards is the quoted market price of Holdings’ common stock on the date of grant. During the three and nine months ended September 30, 2019 and September 30, 2018, stock-based compensation expense consisted of the following: Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Long-Term Incentive Plan Options and other $ 3,828 $ 4,067 $ 11,138 $ 11,336 Performance awards (1) — 6,041 — 19,182 Employee Stock Purchase Plan 75 75 209 254 Total Stock-Based Compensation $ 3,903 $ 10,183 $ 11,347 $ 30,772 (1) h. Revenue Recognition FASB ASC 606, Revenue from Contracts with Customers memberships after the initial twelve-month term, we recognize revenue monthly as payments are received. As of September 30, 2019, deferred revenue was primarily comprised of (i) unredeemed season pass and all season dining pass revenue, (ii) pre-sold single-day admissions revenue for the current operating season, (iii) unredeemed portions of the membership program and member dining program that will be recognized in 2019 and 2020, and (iv) payments received from our international development partners in excess of revenue recognized. We have entered into international agreements to assist third parties in the planning, design, development and operation of Six Flags-branded parks outside of North America. These agreements typically consist of a brand licensing agreement, project services agreement, and management services agreement. Under Topic 606, we treat these agreements as one contract because they were negotiated with a single commercial objective. We have identified three distinct promises within the agreement with each third party partner as brand licensing, project services and management services. Each of these promises is its own performance obligation and distinct, as the third party could benefit from each service on its own with other readily available resources, and each service is separately identifiable from other services in the context of the contract. We recognize revenue under our international agreements over the relevant service period of each performance obligation based on its relative stand-alone selling price, as determined by our best estimate of selling price. We review the service period of each performance obligation on an ongoing basis and revise it as necessary throughout the year. Revisions to the relevant service periods of the performance obligations may result in revisions to revenue in future periods and are recognized in the period in which the change is identified. Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the observable prices charged to customers. We generally expense (i) sales commissions when incurred, and (ii) certain costs to obtain a contract where the amortization period would have been one year or less. These costs are recognized in "Selling, general and administrative expenses." We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less or (ii) contracts for which we recognize revenue at the amount for which we have the right to invoice for services performed. For certain of our contracts that have an original expected length of one year or less, we use the practical expedient applicable to such contracts and do not consider the time value of money. i. Leases We or certain of our subsidiaries are a lessee in various noncancelable operating leases, primarily for operating rights to amusement parks, land, office space, warehouses, office equipment and machinery. We account for leases in accordance with FASB ASC 842, Leases For our operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how we determine (i) the discount rate used to discount the unpaid lease payments to present value, (ii) the lease term and (iii) the lease payments. Topic 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate ("IBR"). Generally, we cannot determine the interest rate implicit in the lease and therefore we use the IBR as a discount rate for our leases. The IBR reflects the rate of interest we would pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease term for all of our leases includes the noncancelable period of the lease plus any additional periods covered by an option to extend the lease that are reasonably certain to be executed by us. Lease payments included in the measurement of the lease liability comprise fixed payments owed over the lease term, variable lease payments that depend on an index or rate, and the exercise price of an option to purchase the underlying asset if it is reasonably certain that we will exercise the option. The ROU asset is initially measured at cost, which comprises the initial amount of lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred, less any lease incentives received. For our operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, and adjusted for any prepaid or accrued lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the term of the operating lease. Variable lease payments associated with our leases are recognized upon the occurrence of the event, activity, or circumstance in the lease agreement on which those payments are assessed. Variable lease payments for operating leases are presented as operating expense in our condensed consolidated statements of operations in the same line item as expense arising from fixed lease payments. Property taxes and insurance paid on behalf of our lessors is included within variable lease payments. Operating lease ROU assets net of accumulated amortization are presented as "Right-of-use operating leases, net" on the condensed consolidated balance sheets. The current portion of operating lease liabilities is presented as "Short-term operating lease liabilities" and the long-term portion is presented separately as "Long-term operating lease liabilities" on the condensed consolidated balance sheets. We have elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less. We recognize the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term. Variable lease payments associated with short-term leases are recognized and presented in the same manner as for all other leases. The ROU assets for operating leases may be periodically reduced by impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant and Equipment - Overall j. Accounts Receivable, Net Accounts receivable are reported at net realizable value and consist primarily of amounts due from guests for the sale of group outings and multi-use admission products, such as season passes and the membership program. We are not exposed to a significant concentration of credit risk; however, based on the age of the receivables, our historical experience and other factors and assumptions we believe to be customary and reasonable, we record an allowance for doubtful accounts. As of September 30, 2019 and December 31, 2018, we have recorded an allowance for doubtful accounts of $20.5 million and $7.4 million, respectively, which is primarily comprised of estimated payment defaults under our membership program. To the extent that payments under our membership program have not been recognized in revenue, the allowance for doubtful accounts recorded against our membership program is offset with a corresponding reduction in deferred revenue. k. Recently Adopted Accounting Pronouncements On January 1, 2019, we adopted Topic 842 using the modified retrospective transition method applied to leases with terms extending past January 1, 2019. Topic 842 requires recognition on the balance sheet of lease ROU assets and lease liabilities by lessees for those leases classified as operating leases in order to give more transparency on commitments and future cash flow. The new guidance is effective for annual periods beginning after December 15, 2018, including interim periods within the fiscal year. The new standard supersedes the previous lease accounting standard under FASB ASC 840, Leases l. Recent Accounting Pronouncements In June 2016, FASB issued Accounting Standards Update 2016-13, Measurement of Credit Losses on Financial Instruments, over the life of financial assets rather than the current incurred loss impairment model that recognizes losses when a probable threshold is met. Topic 326 is effective for annual periods beginning after December 15, 2019 and interim periods within those fiscal years. We are evaluating the provisions of this accounting standards update and assessing the impact, if any, it may have on our condensed consolidated financial statements. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue | |
Revenue | 2. Revenue Revenues are recognized when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Sales and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. The following tables present our revenues disaggregated by contract duration for the three and nine months ended September 30, 2019 and September 30, 2018, respectively. Long-term and short-term contracts consist of our contracts with customers with terms greater than one year and less than or equal to one year, respectively. Sales and usage-based taxes are excluded from revenues. Three Months Ended September 30, 2019 Sponsorship, Park Food, International Merchandise Agreements and (Amounts in thousands) Park Admissions and Other Accommodations Consolidated Long-term contracts $ 38,684 $ 7,897 $ 16,029 $ 62,610 Short-term contracts and other (a) 313,980 234,162 10,428 558,570 Total revenues $ 352,664 $ 242,059 $ 26,457 $ 621,180 Three Months Ended September 30, 2018 Sponsorship, Park Food, International Merchandise Agreements and (Amounts in thousands) Park Admissions and Other Accommodations Consolidated Long-term contracts $ 43,976 $ 10,032 $ 25,703 $ 79,711 Short-term contracts and other (a) 307,001 222,920 10,188 540,109 Total revenues $ 350,977 $ 232,952 $ 35,891 $ 619,820 Nine Months Ended September 30, 2019 Sponsorship, Park Food, International Merchandise Agreements and (Amounts in thousands) Park Admissions and Other Accommodations Consolidated Long-term contracts $ 70,227 $ 15,511 $ 61,462 $ 147,200 Short-term contracts and other (a) 601,025 457,181 21,177 1,079,383 Total revenues $ 671,252 $ 472,692 $ 82,639 $ 1,226,583 Nine Months Ended September 30, 2018 Sponsorship, Park Food, International Merchandise Agreements and (Amounts in thousands) Park Admissions and Other Accommodations Consolidated Long-term contracts $ 78,203 $ 18,419 $ 60,938 $ 157,560 Short-term contracts and other (a) 579,566 432,834 24,244 1,036,644 Total revenues $ 657,769 $ 451,253 $ 85,182 $ 1,194,204 (a) Other revenues primarily include sales of single-use tickets and short-term transactional sales for which we have the right to invoice. Long-term Contracts Our long-term contracts consist of season passes purchased by customers in the year preceding the operating season to which they relate, sponsorship contracts and international agreements with third parties. We earn season pass revenue when our customers purchase a season pass for a fixed fee, which entitles the customer to visit our parks, including certain waterparks, throughout the duration of the parks’ operating season. We earn sponsorship revenue from separately-priced contracts with third parties pursuant to which we sell and advertise the third party’s products within the parks in exchange for consideration. Advertisements may include, but are not limited to, banners, signs, radio ads, association with certain events, sponsorship of rides within our parks and retail promotions. We earn international agreements revenue pursuant to arrangements in which we assist in the development and management of Six Flags-branded theme parks and waterparks outside of North America. Within our international agreements, we have identified three distinct performance obligations as brand licensing, project services and management services. We do not consider revenue recognized for the performance obligations related to our international agreements to be significant, neither individually nor in the aggregate, to any period presented. See Note 1 for additional information on our accounting for performance obligations under these contracts. The transaction price for our long-term contracts is explicitly stated within the contracts. Our sponsorship contracts and international agreements may include estimated variable consideration such as penalties for delay in performance of contract terms, and certain volume-based discounts and rebates. We do not believe there will be significant changes to our estimates of variable consideration. Our brand licensing and management services performance agreements include royalty payments and management fees, respectively, based on gross sales from Six Flags-branded parks once opened. We have elected to apply the sales-based royalty exemption to the brand licensing performance obligation, and accordingly, do not estimate revenue attributable to the gross sales-based royalty. We have also elected to apply the direct allocation exemption to the management services performance obligation, and accordingly, do not estimate revenue attributable to the gross sales-based management fee. We recognize season pass revenue in "Park admissions" over the estimated redemption rate as we believe this appropriately depicts the transfer of service to our customers. We estimate the redemption rate based on historical experience and other factors and assumptions that we believe to be customary and reasonable. We review the estimated redemption rate regularly, on an ongoing basis, and revise it as necessary throughout the year. Amounts received for multi-use admissions in excess of redemptions are recognized in "Deferred revenue." We recognize sponsorship and international agreements revenue over the term of the agreements using the passage of time as a measure of complete satisfaction of the performance obligations in "Sponsorship, international agreements and accommodations." Amounts received for unsatisfied sponsorship and international agreements performance obligations are recognized in "Deferred revenue." At January 1, 2019, $100.8 million of unearned revenue associated with outstanding long-term contracts was reported in "Deferred revenue," of which $46.9 million and $109.7 million was recognized as revenue for long-term contracts during the three and nine months ended September 30, 2019, respectively. As of September 30, 2019, the total unearned amount of revenue for remaining long-term contract performance obligations was $38.4 million. At January 1, 2018, $111.6 million of unearned revenue associated with outstanding long-term contracts was reported in "Deferred revenue," of which $39.0 million and $89.6 million was recognized as revenue for long-term contracts during the three and nine months ended September 30, 2018, respectively. As of September 30, 2018, the total unearned amount of revenue for remaining long-term contract performance obligations was $102.9 million. As of September 30, 2019, we expect to recognize estimated revenue for partially or wholly unsatisfied performance obligations on long-term contracts of approximately $30.9 million in the remainder of 2019, $119.4 million in 2020, $49.4 million in 2021, $29.9 million in 2022, and $1.0 million in 2023 and thereafter. Short-term Contracts and Other Our short-term contracts consist primarily of season passes and memberships purchased by customers in the year of the operating season to which they relate, certain sponsorship contracts and international agreements with third parties. We earn revenue from guests’ purchases of our season pass and membership products, which entitles the customer to visit our parks, including certain waterparks, throughout the duration of the parks’ operating season for a fixed fee. Current year season passes classified as short-term contracts are sold during the operating season to which they relate. We earn sponsorship and international agreements revenue from contracts with third parties, pursuant to which we sell and advertise the third party’s products within our parks on a short-term basis that generally coincides with our annual operating season and pursuant to certain activities in connection with our international agreements. The transaction price for our short-term contracts is explicitly stated within the contracts. We generally recognize revenue from short-term contracts over the passage of time, with the exception of season pass and membership revenues. We recognize season pass and membership revenues in "Park admissions" over the estimated redemption rate, as we believe this appropriately depicts the transfer of service to our customers. We estimate the redemption rate based on historical experience and other factors and assumptions we believe to be customary and reasonable. We review the estimated redemption rate regularly and on an ongoing basis and revise it as necessary throughout the year. Payments made by our members that have been enrolled in the membership program for longer than 12 months are recognized in revenue monthly as the payments are made. Amounts received for multi-use admissions in excess of redemptions are recognized in "Deferred revenue." Other revenues consist primarily of revenues from single-use tickets for entrance to our parks, in-park services (such as the sale of food and beverages, merchandise, games and attractions, standalone parking sales and other services inside our parks), accommodations revenue, and other miscellaneous products and services. Due to the short-term transactional nature of such purchases, we apply the practical expedient to recognize revenue for single-use ticket sales, in-park services, accommodations and other miscellaneous goods and services for which we have the right to invoice. |
Long-Term Indebtedness
Long-Term Indebtedness | 9 Months Ended |
Sep. 30, 2019 | |
Long-Term Indebtedness | |
Long-Term Indebtedness | 3. Long-Term Indebtedness Credit Facility As part of our ongoing operations, we periodically refinance our existing credit facility. As of September 30, 2019, our credit facility consisted of a $350.0 million revolving credit loan facility (the “Second Amended and Restated Revolving Loan”) and an $800.0 million Tranche B Term Loan facility (the “Second Amended and Restated Term Loan B”) pursuant to the amended and restated credit facility that we entered into in 2019 (the “Second Amended and Restated Credit Facility”). Our prior credit facility (as previously amended as described below, the “2015 Credit Facility”) consisted of a $250.0 million revolving credit loan facility (the “2015 Revolving Loan”) and a $700.0 million Tranche B Term Loan (the “2015 Term Loan B”) and was amended and restated in conjunction with the Second Amended and Restated Credit Facility. Additionally, we have amounts outstanding under the 2024 Notes and the 2027 Notes as described below. On March 26, 2018, we entered into an amendment to the 2015 Credit Facility that reduced the overall borrowing rate on the 2015 Term Loan B by 25 basis points through a reduction in the applicable margin from LIBOR plus 2.00% to LIBOR plus 1.75%. We capitalized $0.5 million of debt issuance costs directly associated with the issuance of this amendment. On April 18, 2018, we entered into an amendment to the 2015 Credit Facility that increased the 2015 Term Loan B borrowings by $39.0 million. We capitalized $0.3 million of debt issuance costs directly associated with the issuance of this amendment. The proceeds of the additional borrowings were used for general corporate purposes, including share repurchases. On April 17, 2019, we amended and restated the 2015 Credit Facility (as previously amended). The Second Amended and Restated Credit Facility is comprised of a $350.0 million revolving credit loan facility and an $800.0 million Tranche B term loan facility. In connection with entering into the Second Amended and Restated Credit Facility, we repaid the amounts outstanding on the 2015 Revolving Loan and the outstanding 2015 Term Loan B and we recognized a loss on debt extinguishment of $6.2 million. The remaining proceeds from the Second Amended and Restated Credit Facility will be used for general corporate purposes, including payment of refinancing fees. We capitalized $8.9 million of debt issuance costs directly associated with the issuance of the Second Amended and Restated Credit Facility. As of September 30, 2019, no advances under the Second Amended and Restated Revolving Loan were outstanding (excluding amounts reserved for letters of credit in the amount of $20.8 million). As of December 31, 2018, $43.0 million under the 2015 Revolving Loan was outstanding (excluding amounts reserved for letters of credit in the amount of $18.1 million). Interest on the Second Amended and Restated Revolving Loan accrues at an annual rate of LIBOR plus an applicable margin with an unused commitment fee based on our senior secured leverage ratio. As of September 30, 2019, the Second Amended and Restated Revolving Loan unused commitment fee was 0.30%. The principal amount of the Second Amended and Restated Revolving Loan is due and payable on April 17, 2024. As of September 30, 2019, $798.0 million was outstanding under the Second Amended and Restated Term Loan B. As of December 31, 2018, $583.8 million was outstanding under the 2015 Term Loan B. Interest on the Second Amended and Restated Term Loan B accrues at an annual rate of LIBOR plus 2.00%. In June 2019, we entered into three separate interest rate swap agreements with a notional amount of $300.0 million (collectively, the “June 2019 Swap Agreements”) to mitigate the risk of an increase in the LIBOR interest rate in effect on the Second Amended and Restated Term Loan B. In August 2019, we entered into two additional separate interest rate swap agreements with a notional value of $400.0 million (collectively, the “August 2019 Swap Agreements”) to mitigate the risk of an increase in the LIBOR interest rate in effect on the Second Amended and Restated Term Loan B. See Note 5 for a further discussion. As of September 30, 2019, the applicable interest rate on the Second Amended and Restated Term Loan B was 3.71%. Beginning on September 30, 2019, the Second Amended and Restated Term Loan B became payable in equal quarterly principal installments of $2.0 million. All remaining outstanding principal of the Second Amended and Restated Term Loan B is due and payable on April 17, 2026. Amounts outstanding under the Second Amended and Restated Credit Facility are guaranteed by Holdings, Six Flags Operations Inc. ("SFO") and certain of the domestic subsidiaries of Six Flags Theme Parks Inc. ("SFTP") (collectively, the "Loan Parties"). The Second Amended and Restated Credit Facility is secured by a first priority security interest in substantially all of the assets of the Loan Parties. The Second Amended and Restated Credit Facility agreement contains certain representations, warranties, affirmative covenants and financial covenants (specifically, a maximum senior leverage maintenance covenant). In addition, the Second Amended and Restated Credit Facility agreement contains restrictive covenants that, subject to certain exceptions, limit or restrict, among other things, the incurrence of indebtedness and liens, fundamental changes, restricted payments, capital expenditures, investments, prepayments of certain indebtedness, transactions with affiliates, changes in fiscal periods, modifications of certain documents, and certain hedging agreements, subject, in each case, to certain carve-outs. 2024 Notes and 2027 Notes On June 16, 2016, Holdings issued $300.0 million of 4.875% senior unsecured notes due July 31, 2024 (the "2024 Notes"). We capitalized $4.7 million of debt issuance costs directly associated with the issuance of the 2024 Notes. We used approximately $150.0 million of the proceeds from the issuance of the 2024 Notes to reduce our borrowings under the 2015 Term Loan B, and we used the remaining net proceeds of the sale of the 2024 Notes for general corporate and working capital purposes, which primarily consisted of share repurchases. On April 13, 2017, Holdings issued an additional $700.0 million of 4.875% Senior Notes due 2024 (the "2024 Notes Add-on"). We capitalized $3.9 million of debt issuance costs directly associated with the issuance of the 2024 Notes Add-on. Interest payments of $24.4 million for the 2024 Notes and the 2024 Notes Add-on are due semi-annually on January 31 and July 31 of each year, with the exception of the first payment for the 2024 Notes on January 31, 2017, which was $9.1 million. On April 13, 2017, Holdings issued $500.0 million of 5.50% Senior Notes due 2027 (the "2027 Notes"). We capitalized $2.6 million of debt issuance costs directly associated with the issuance of the 2027 Notes. Interest payments of $13.8 million are due semi-annually on April 15 and October 15 of each year, with the exception of the first payment on October 15, 2017, which was $13.9 million. The 2024 Notes, the 2024 Notes Add-on and the 2027 Notes are guaranteed by the Loan Parties. The 2024 Notes, the 2024 Notes Add-on and the 2027 Notes contain restrictive covenants that, subject to certain exceptions, limit or restrict, among other things, the ability of the Loan Parties to incur additional indebtedness, create liens, engage in mergers, consolidations and other fundamental changes, make investments, engage in transactions with affiliates, pay dividends and repurchase capital stock. The 2024 Notes, the 2024 Notes Add-on and the 2027 Notes contain certain events of default, including payment defaults, breaches of covenants and representations, cross defaults to other material indebtedness, judgment, and changes of control and bankruptcy events of default. Long-Term Indebtedness Summary As of September 30, 2019 and December 31, 2018, long-term debt consisted of the following: As of (Amounts in thousands) September 30, 2019 December 31, 2018 Second Amended and Restated Credit Facility Second Amended and Restated Term Loan B $ 798,000 $ — 2015 Credit Facility 2015 Term Loan B — 583,750 2015 Revolving Loan — 43,000 2024 Notes 1,000,000 1,000,000 2027 Notes 500,000 500,000 Net discount (6,904) (6,792) Deferred financing costs (14,392) (13,446) Total debt $ 2,276,704 $ 2,106,512 Less current portion of long-term debt (8,000) — Less short-term borrowings — (43,000) Total long-term debt $ 2,268,704 $ 2,063,512 Fair-Value of Long-Term Indebtedness As of September 30, 2019 and December 31, 2018, the fair value of our long-term debt was $2,347.4 million and $2,012.4 million, respectively. The measurement of the fair value of long-term debt is based on market prices that are generally observable for similar liabilities at commonly quoted intervals and is considered a Level 2 fair value measurement. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Loss | |
Accumulated Other Comprehensive Loss | 4. Accumulated Other Comprehensive Loss Changes in the composition of Accumulated Other Comprehensive Loss ("AOCI") during the nine months ended September 30, 2019 were as follows: Accumulated Cumulative Other Translation Cash Flow Defined Benefit Income Comprehensive (Amounts in thousands) Adjustment Hedges Plans Taxes Loss Balances at December 31, 2018 $ (27,352) $ — $ (41,071) $ (3,075) $ (71,498) Net current period change 316 (5,901) — 1,425 (4,160) Amounts reclassified from AOCI — — 589 (149) 440 Balances at September 30, 2019 $ (27,036) $ (5,901) $ (40,482) $ (1,799) $ (75,218) The Company had the following reclassifications out of AOCI during the three and nine months ended September 30, 2019 and September 30, 2018: Amount of Reclassification from AOCI Three Months Ended Nine Months Ended Component of AOCI Location of Reclassification into Income September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Amortization of deferred actuarial loss and prior service cost Operating expenses $ 205 $ 182 $ 589 $ 540 Income tax expense (54) (47) (149) (139) Net of tax $ 151 $ 135 $ 440 $ 401 Total reclassifications $ 151 $ 135 $ 440 $ 401 |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 5. Derivative Financial Instruments In June 2019, we entered the June 2019 Swap Agreements with an aggregate notional amount of $300.0 million to mitigate the risk of an increase in the LIBOR interest rate in effect on the Second Amended and Restated Term Loan B. The term of the June 2019 Swap Agreements began in June 2019 and expires in June 2023. Upon execution, we designated and documented the June 2019 Swap Agreements as cash flow hedges. The June 2019 Swap Agreements serve as economic hedges and provide protection against rising interest rates. In August 2019, we entered the August 2019 Swap Agreements with an aggregate notional amount of $400.0 million to mitigate the risk of an increase in the LIBOR interest rate in effect on the Second Amended and Restated Term Loan B. The term of the August 2019 Swap Agreements began in August 2019 and expires in August 2024. Upon execution, we designated and documented the August 2019 Swap Agreements as cash flow hedges. The August 2019 Swap Agreements serve as economic hedges and provide protection against rising interest rates. By utilizing a derivative instrument to hedge our exposure to LIBOR rate changes, we are exposed to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, the hedging instrument is placed with counterparties that we believe pose minimal credit risk. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates, commodity prices or currency exchange rates. We manage the market risk associated with derivative instruments by establishing and monitoring parameters that limit the types and degree of market risk that we may undertake. We hold and issue derivative instruments for risk management purposes only and do not utilize derivatives for trading or speculative purposes. We record derivative instruments at fair value on our unaudited condensed consolidated balance sheets. When in qualifying relationships, the effective portion of all cash flow designated derivatives are deferred in AOCI and are reclassified to interest expense when the forecasted transaction takes place. Ineffective changes, if any, and changes in the fair value of derivatives that are not designated as hedging instruments are recorded directly to “interest expense” and “other expense (income), net”, respectively. Derivative assets and derivative liabilities that have maturity dates equal to or less than twelve months from the balance sheet date are included in prepaid and other current assets and other accrued liabilities, respectively. Derivative assets and derivative liabilities that have maturity dates greater than twelve months from the balance sheet date are included in deposits and other assets and other long-term liabilities, respectively. Our derivatives are measured on a recurring basis using Level 2 inputs. The fair value measurements of our derivatives are based on market prices that generally are observable for similar assets or liabilities at commonly quoted intervals. Derivative assets recorded at fair value in our condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively, consisted of the following: Derivative Assets (Amounts in thousands) September 30, 2019 December 31, 2018 Derivatives Designated as Cash Flow Hedges Interest Rate Swap Agreements — Current $ 718 $ — Interest Rate Swap Agreements — Noncurrent — — $ 718 $ — Derivative liabilities recorded at fair value in our condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively, consisted of the following: Derivative Liabilities (Amounts in thousands) September 30, 2019 December 31, 2018 Derivatives Designated as Cash Flow Hedges Interest Rate Swap Agreements — Current $ (598) $ — Interest Rate Swap Agreements — Noncurrent (6,021) — $ (6,619) $ — As of September 30, 2019, we had no derivatives not designated as cash flow hedges. Gains and losses before taxes on derivatives designated as a cash flow hedge for the three and nine months ended September 30, 2019 and September 30, 2018 were as follows: Three Months Ended September 30, 2019 and September 30, 2018 Loss Recognized in Operations on Derivatives Loss Loss Reclassified from (Ineffective Portion and Recognized in AOCI AOCI into Operations Amount Excluded from (Effective Portion) (Effective Portion) Effectiveness Testing) (Amounts in thousands) 2019 2018 2019 2018 2019 2018 Interest Rate Swap Agreements $ (3,035) $ — $ — $ — $ — $ — Total $ (3,035) $ — $ — $ — $ — $ — Nine Months Ended September 30, 2019 and September 30, 2018 Loss Recognized in Operations on Derivatives Loss Loss Reclassified from (Ineffective Portion and Recognized in AOCI AOCI into Operations Amount Excluded from (Effective Portion) (Effective Portion) Effectiveness Testing) (Amounts in thousands) 2019 2018 2019 2018 2019 2018 Interest Rate Swap Agreements $ (5,901) $ — $ — $ — $ — $ — Total $ (5,901) $ — $ — $ — $ — $ — |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies Partnership Parks On April 1, 1998, we acquired all of the capital stock of the former Six Flags Entertainment Corporation (a corporation that has been merged out of existence and that has always been a separate corporation from Holdings, "Former SFEC") for $976.0 million, paid in cash. In addition to our obligations under outstanding indebtedness and other securities issued or assumed in the Former SFEC acquisition, we also guaranteed certain contractual obligations relating to the Partnership Parks. Specifically, we guaranteed the obligations of the general partners of those partnerships to (i) make minimum annual distributions (including rent) of approximately $72.5 million in 2019 (subject to cost of living adjustments) to the limited partners in the Partnership Parks (based on our ownership of units as of September 30, 2019, our share of the distribution will be approximately $31.7 million) and (ii) make minimum capital expenditures at each of the Partnership Parks during rolling five-year periods, based generally on 6% of the Partnership Parks’ revenues. Cash flow from operations at the Partnership Parks is used to satisfy these requirements first, before any funds are required from us. We also guaranteed the obligation of our subsidiaries to annually purchase all outstanding limited partnership units to the extent tendered by the unit holders (the "Partnership Park Put"). The agreed price for units tendered in the Partnership Park Put is based on a valuation of each of the respective Partnership Parks (the "Specified Price") that is the greater of (a) a valuation for each of the respective Partnership Parks derived by multiplying such park’s weighted average four-year EBITDA (as defined in the agreements that govern the partnerships) by a specified multiple (8.0 in the case of SFOG and 8.5 in the case of SFOT) and (b) a valuation derived from the highest prices previously offered for the units of the Partnership Parks by certain entities. Pursuant to the valuation methodologies described in the preceding sentence, the Specified Price for the Partnership Parks, if determined as of September 30, 2019, is $408.3 million in the case of SFOG and $520.6 million in the case of SFOT. As of September 30, 2019, we owned approximately 31.0% and 53.2% of the Georgia limited partner interests and Texas limited partner interests, respectively. Our obligations with respect to SFOG and SFOT will continue until 2027 and 2028, respectively. In 2027 and 2028, we will have the option to purchase all remaining units in the Georgia limited partner and the Texas limited partner, respectively, at a price based on the Specified Price, increased by a cost of living adjustment. Pursuant to the 2019 annual offer, no partnership units in the Georgia Partnership were tendered for purchase, and we purchased 0.1 units from the Texas partnership for $0.2 million in May 2019. As we purchase additional units, we are entitled to a proportionate increase in our share of the minimum annual distributions. The maximum unit purchase obligations for 2019 at both parks is approximately $525.1 million, representing approximately 69.0% of the outstanding units of SFOG and 46.8% of the outstanding units of SFOT. An additional $350.0 million of incremental borrowing is available under the Second Amended and Restated Credit Facility for future "put" obligations, if necessary. In connection with our acquisition of the Former SFEC, we entered into the Subordinated Indemnity Agreement with certain of the Company’s entities, Time Warner, and an affiliate of Time Warner (an indirect subsidiary of AT&T Inc. as a result of a merger in 2018), pursuant to which, among other things, we transferred to Time Warner (which has guaranteed all of our obligations under the Partnership Park arrangements) record title to the corporations that own the entities that have purchased and will purchase limited partnership units of the Partnership Parks, and we received an assignment from Time Warner of all cash flow received on such limited partnership units, and we otherwise control such entities. In addition, we issued preferred stock of the managing partner of the partnerships to Time Warner. In the event of a default by us under the Subordinated Indemnity Agreement or of our obligations to our partners in the Partnership Parks, these arrangements would permit Time Warner to take full control of both the entities that own limited partnership units and the managing partner. If we satisfy all such obligations, Time Warner is required to transfer to us the entire equity interests of these entities. The 2018 merger of Time Warner and AT&T Inc. did not affect the Time Warner guarantee of our obligations under the Subordinated Indemnity Agreement. We incurred $21.2 million of capital expenditures at the Partnership Parks during the 2018 season and intend to incur approximately $13.0 million of capital expenditures at these parks for the 2019 season, an amount in excess of the minimum required expenditure. Cash flows from operations at the Partnership Parks will be used to satisfy the annual distribution and capital expenditure requirements, before any funds are required from us. The Partnership Parks generated approximately $73.5 million of cash in 2018 from operating activities, after deduction of capital expenditures and excluding the impact of short-term intercompany advances from or payments to Holdings. As of September 30, 2019 and December 31, 2018, we had total loans receivable outstanding of $239.3 million from the partnerships that own the Partnership Parks, primarily to fund the acquisition of Six Flags White Water Atlanta and to make capital improvements to the Partnership Parks and distributions to the limited partners in prior years. Insurance We maintain insurance of the types and in amounts that we believe are commercially reasonable and that are available to businesses in our industry. We maintain multi-layered general liability policies that provide for excess liability coverage of up to $100.0 million per occurrence. For incidents arising on or after December 31, 2008, our self-insured retention is $2.0 million, followed by a $0.5 million deductible per occurrence applicable to all claims in the policy year for our domestic parks and our park in Canada and a nominal amount per occurrence for our parks in Mexico. Defense costs are in addition to these retentions. Our general liability policies cover the cost of punitive damages only in certain jurisdictions. Based upon reported claims and an estimate for incurred, but not reported claims, we accrue a liability for our self-insured contingencies. For workers’ compensation claims arising after November 15, 2003, our deductible is $0.75 million ($0.5 million deductible for the period from November 15, 2001 to November 15, 2003). We also maintain fire and extended coverage, business interruption, terrorism and other forms of insurance typical to businesses in our industry. Our all peril property coverage policies insure our real and personal properties (other than land) against physical damage resulting from a variety of hazards. Additionally, we maintain information security and privacy liability insurance in the amount of $10.0 million with a $0.25 million self-insured retention per event. The majority of our current insurance policies expire on December 31, 2019. We generally renegotiate our insurance policies on an annual basis. We cannot predict the level of the premiums that we may be required to pay for subsequent insurance coverage, the level of any self-insurance retention applicable thereto, the level of aggregate coverage available or the availability of coverage for specific risks. Litigation We are party to various legal actions arising in the normal course of business, including the cases discussed below. We record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated. We evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate. We exercise significant judgment to evaluate both the likelihood and the estimated amount of a loss related to such matters. Based on our current knowledge, we believe that the amount of reasonably possible loss will not, either individually or in aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is subject to inherent uncertainties and management’s view of these matters may change in the future. On January 7, 2016, a potential class action complaint was filed against Six Flags Entertainment Corporation in the Circuit Court of Lake County, Illinois. On April 22, 2016, Great America, LLC was added as a defendant. The complaint asserts that we violated the Illinois Biometric Information Privacy Act ("BIPA") in connection with the admission of season pass holders and members through the finger scan program that commenced in the 2014 operating season at Six Flags Great America in Gurnee, Illinois, and seeks statutory damages, attorneys’ fees and an injunction. An aggrieved party under BIPA may recover (i) $1,000 if a company is found to have negligently violated BIPA or (ii) $5,000 if a company is found to have intentionally or recklessly violated BIPA, plus reasonable attorneys’ fees in each case. The complaint does not allege that any information was misused or disseminated. On April 7, 2017, the trial court certified two questions for consideration by the Illinois Appellate Court of the Second District. On June 7, 2017, the Illinois Appellate Court granted our motion to appeal. Accordingly, two questions regarding the interpretation of BIPA were certified for consideration by the Illinois Appellate Court. On December 21, 2017, the Illinois Appellate Court found in our favor, holding that the plaintiff had to allege more than a technical violation of BIPA and had to be injured in some way in order to have a right of action. On March 1, 2018, the plaintiff filed a petition for leave to appeal to the Illinois Supreme Court. On May 30, 2018, the Illinois Supreme Court granted the plaintiff’s petition for leave to appeal and oral arguments were heard on November 20, 2018. On January 25, 2019, the Illinois Supreme Court found in favor of the plaintiff, holding that the plaintiff does not need to allege an actual injury beyond the violation of his rights under BIPA in order to proceed with a complaint. We intend to continue to vigorously defend ourselves against this litigation. Since this litigation is still in an early stage, the outcome is currently not determinable and a reasonable estimate of loss or range of loss in excess of the immaterial amount that we have recorded for this litigation cannot be made. During 2017, four potential class action complaints were filed against Six Flags Entertainment Corporation or one of its subsidiaries. Complaints were filed on August 11, 2017 in the Circuit Court of Lake County, Illinois, on September 1, 2017 in the United States District Court for the Northern District of Georgia, on September 11, 2017, in the Superior Court of Los Angeles County, California, and on November 30, 2017, in the Superior Court of Ocean County, New Jersey. The complaints allege that we, in violation of federal law, printed more than the last five digits of a credit or debit card number on customers’ receipts, and/or the expiration dates of those cards. A willful violation may subject a company to liability for actual damages or statutory damages between $100 and $1,000 per person, punitive damages in an amount determined by a court, and reasonable attorneys’ fees, all of which are sought by the plaintiffs. The complaints do not allege that any information was misused. We intend to vigorously defend ourselves against this litigation. Since this litigation is in an early stage, the outcome is currently not determinable, and a reasonable estimate of loss or range of loss in excess of the immaterial amount that we have recorded for this litigation cannot be made. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Leases | 7. Leases On January 1, 2019, we adopted Topic 842 using the modified retrospective approach on leases with terms extending past January 1, 2019. Results for reporting periods beginning after January 1, 2019, are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under Topic 840. As a result, we were not required to adjust our comparative period financial information for the effects of Topic 842 or make new lease disclosures for comparative prior periods before the date of adoption. See Note 1 ( i. Leases Upon adoption of Topic 842 on January 1, 2019, we recorded right-of-use assets and corresponding liabilities of $207.4 million and $204.3 million, respectively, with the impact primarily related to our leases of operating rights for theme park and waterpark properties and land. There was not a material impact to our condensed consolidated statements of operations or statements of cash flows as a result of adoption of Topic 842. We have operating leases for amusement parks, land, vehicles, machinery and certain equipment. Our leases have remaining lease terms of less than one year to 46 years, some of which include options to extend leases up to 20 years, and some of which include options to terminate the lease within one year. For our noncancelable operating leases with options to extend, because we may determine it is not reasonably certain we will exercise the option, the options are not considered in determining the lease term, and associated potential option payments are excluded from lease payments. Our leases generally do not include restrictive financial or other covenants. Payments due under the lease contracts include fixed payments and, for certain of our leases, variable payments. The components of lease cost for the three and nine months ended September 30, 2019 are as follows: Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2019 September 30, 2019 Operating lease cost $ 6,127 $ 18,524 Short-term lease cost 1,754 5,289 Variable lease cost 1,224 2,091 Total lease cost $ 9,105 $ 25,904 Lease costs for the three and nine months ended September 30, 2018 included minimum rental payments under operating leases recognized on a straight-line basis over the term of the lease. Rental expense for operating leases during the three and nine months ended September 30, 2018 was $9.5 million and $19.6 million, respectively. Other information related to leases for the three and nine months ended September 30, 2019 is as follows: Three Months Ended Nine Months Ended (Amounts in thousands, except for lease term and discount rate) September 30, 2019 September 30, 2019 Cash paid for amounts included in the measurement of lease liability operating cash flows $ 14,011 $ 22,464 ROU assets obtained in exchange for lease liabilities 253 4,610 Weighted-average remaining lease term (in years) 19.62 19.62 Weighted-average discount rate 6.91 % 6.91 % Maturities of noncancelable operating lease liabilities under Topic 842 as of September 30, 2019 are summarized in the table below. (Amounts in thousands) As of September 30, 2019 Remaining in 2019 $ 1,559 2020 23,741 2021 22,597 2022 21,588 2023 21,406 Thereafter 287,536 Total $ 378,427 Less: present value discount (182,477) Lease liability $ 195,950 Future minimum lease payments for long-term noncancelable operating leases under Topic 840 as of December 31, 2018 are summarized in the table below. (Amounts in thousands) As of December 31, 2018 2019 $ 23,936 2020 23,266 2021 22,384 2022 21,626 2023 21,563 Thereafter 314,799 Total $ 427,574 Practical Expedients We have elected the package of practical expedients for adoption of Topic 842 permitted under the transition guidance within the standard, which among other things allows us to carryforward historical lease classification, indirect costs, and the original determination of whether or not a contract contained a lease. We have elected the practical expedient to not separate a qualifying contract into its lease and non-lease components. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 9 Months Ended |
Sep. 30, 2019 | |
Redeemable Noncontrolling Interests | |
Redeemable Noncontrolling Interests | 8. Redeemable Noncontrolling Interests Redeemable noncontrolling interests represent the non-affiliated parties’ share of the assets of the Partnership Parks that are less than wholly-owned: SFOT, SFOG and Six Flags White Water Atlanta, which is owned by the partnership that owns SFOG. As of September 30, 2019, redeemable noncontrolling interests of the SFOT and SFOG partnerships was $253.7 million and $291.7 million, respectively. (Amounts in thousands) SFOT SFOG Total Balance at December 31, 2018 $ 243,756 $ 281,515 $ 525,271 Purchase of redeemable units of SFOT (217) — (217) Fresh start accounting fair market value adjustment for purchased units (45) — (45) Net income attributable to noncontrolling interests 20,452 20,301 40,753 Distributions to noncontrolling interests (10,226) (10,150) (20,376) Balance at September 30, 2019 $ 253,720 $ 291,666 $ 545,386 The redemption value of the noncontrolling partnership units in SFOT and SFOG as of September 30, 2019 was approximately $243.6 million and $281.5 million, respectively. See Note 6 for a description of the partnership arrangements applicable to the Partnership Parks, the accounts of which are included in the accompanying unaudited condensed consolidated financial statements. |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2019 | |
Business Segments | |
Business Segments | 9. Business Segments We manage our operations on an individual park location basis, including operations from parks owned, managed and branded. Discrete financial information is maintained for each park and provided to our corporate management for review and as a basis for decision making. The primary performance measure used to allocate resources is Park EBITDA (defined as park-related operating earnings, excluding the impact of interest, taxes, depreciation, amortization and any other non-cash income or expenditures). In general, all of our parks provide similar products and services through a similar process to the same class of customer through a consistent method. We also believe that the parks share common economic characteristics. Based on these factors, we have only one reportable segment—parks. The following table presents segment financial information and a reconciliation of net income to Park EBITDA. Park level expenses exclude all non-cash operating expenses, principally depreciation and amortization and all non-operating expenses. Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Net income $ 200,209 $ 204,421 $ 230,973 $ 236,581 Interest expense, net 28,336 26,985 86,256 80,350 Income tax expense 61,626 55,260 70,644 59,498 Depreciation and amortization 30,685 29,620 89,033 86,170 Corporate expenses 10,060 12,523 39,984 41,656 Stock-based compensation 3,903 10,183 11,347 30,772 Non-operating park level expense, net: Loss on disposal of assets 2,659 386 3,105 2,551 Loss on debt extinguishment, net — — 6,231 — Other expense (income), net 231 (130) (1,474) 2,159 Park EBITDA $ 337,709 $ 339,248 $ 536,099 $ 539,737 All of our owned or managed parks are located in the United States with the exception of two parks in Mexico and one park in Montreal, Canada. We also have revenue and expenses related to the development of Six Flags-branded parks outside of North America. The following information reflects our long-lived assets (which consists of property and equipment, right-of-use operating leases and intangible assets), revenues and income before income taxes by domestic and foreign categories as of or for the nine months ended September 30, 2019 and September 30, 2018: Domestic Foreign Total 2019 (Amounts in thousands) Long-lived assets $ 2,361,622 $ 136,120 $ 2,497,742 Revenues 1,138,640 87,943 1,226,583 Income before income taxes 284,868 16,749 301,617 2018 Long-lived assets $ 2,171,503 $ 104,029 $ 2,275,532 Revenues 1,101,836 92,368 1,194,204 Income before income taxes 274,811 21,268 296,079 |
Pension Benefits
Pension Benefits | 9 Months Ended |
Sep. 30, 2019 | |
Pension Benefits | |
Pension Benefits | 10. Pension Benefits We froze our pension plan effective March 31, 2006, pursuant to which most participants no longer earned future pension benefits. Effective February 16, 2009, the remaining participants in the pension plan no longer earned future benefits. The following summarizes our pension costs during the three and nine months ended September 30, 2019 and September 30, 2018: Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Service cost $ 313 $ 250 $ 988 $ 1,050 Interest cost 1,995 1,844 5,999 5,542 Expected return on plan assets (3,318) (3,431) (9,979) (10,307) Amortization of net actuarial loss 205 182 589 540 Total net periodic benefit $ (805) $ (1,155) $ (2,403) $ (3,175) The components of net periodic pension benefit other than the service cost component were included in "Other net periodic pension benefit" in the condensed consolidated statements of operations. Weighted-Average Assumptions Used To Determine Net Cost Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Discount rate 4.05 % 3.45 % 4.05 % 3.45 % Rate of compensation increase N/A N/A N/A N/A Expected return on plan assets 7.25 % 7.25 % 7.25 % 7.25 % Employer Contributions During both of the nine months ended September 30, 2019 and September 30, 2018, we made pension contributions of $6.0 million. |
Stock Repurchase Plans
Stock Repurchase Plans | 9 Months Ended |
Sep. 30, 2019 | |
Stock Repurchase Plans | |
Stock Repurchase Plans | 11. Stock Repurchase Plans On March 30, 2017, Holdings announced that its Board of Directors approved a stock repurchase plan that permits Holdings to repurchase an incremental $500.0 million in shares of Holdings’ common stock (the "March 2017 Stock Repurchase Plan"). As of October 18, 2019, Holdings repurchased 4,604,000 shares at a cumulative cost of approximately $268.3 million and an average price per share of $58.27 under the March 2017 Stock Repurchase Plan, leaving approximately $231.7 million available for permitted repurchases. The amount of share repurchases is limited by the covenants in the Second Amended and Restated Credit Facility, the 2024 Notes, the 2024 Notes Add-on and the 2027 Notes. We will continue to evaluate the share repurchase limits under the covenants on an ongoing basis to determine our ability to use the remaining amount authorized for share repurchases. See Note 3 for further discussion. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | 12. Subsequent Event On October 18, 2019, we entered into an amendment to the Second Amended and Restated Credit Facility which reduced the overall borrowing rate on the Second Amended and Restated Term Loan B by 25 basis points by reducing the applicable margin from LIBOR plus 2.00% to LIBOR plus 1.75%. Excluding the cost to execute the transaction, the lower borrowing rate will reduce interest expense by approximately $2.0 million annually. |
General - Basis of Presentati_2
General - Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
General - Basis of Presentation | |
Consolidated U.S. GAAP Presentation | a. Consolidated U.S. GAAP Presentation Our accounting policies reflect industry practices and conform to U.S. GAAP. The unaudited condensed consolidated financial statements include our accounts and the accounts of our wholly owned subsidiaries. We also consolidate the partnerships that own Six Flags Over Texas ("SFOT") and Six Flags Over Georgia (including Six Flags White Water Atlanta) ("SFOG", and together with SFOT, the "Partnership Parks") as subsidiaries in our unaudited condensed consolidated financial statements, as we have determined that we have the power to direct the activities of the Partnership Parks that most significantly impact their economic performance and we have the obligation to absorb losses and receive benefits from the Partnership Parks that can be potentially significant to these entities. The equity interests owned by non-affiliated parties in the Partnership Parks are reflected in the accompanying unaudited condensed consolidated balance sheets as redeemable noncontrolling interests. See Note 6 for a description of the partnership agreements applicable to the Partnership Parks and Note 8 for further discussion on the non-affiliated parties’ share of the earnings of the Partnership Parks. |
Income Taxes | b. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, including net operating loss and other tax carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. We recorded a valuation allowance of $116.4 million and $115.2 million as of September 30, 2019 and December 31, 2018, respectively, due to uncertainties related to our ability to use some of our deferred tax assets, primarily consisting of certain state net operating loss and other tax carryforwards, before they expire. The valuation allowance was based on our estimates of taxable income by jurisdiction in which we operate and the period over which our deferred tax assets were recoverable. Our projected taxable income over the foreseeable future gives us comfort that we will be able to use all of our federal net operating loss carryforwards before they expire. In determining the effective tax rate for interim periods, we consider the expected changes in our valuation allowance from current year originating or reversing timing differences between financial accounting and tax purposes and the taxable income or loss expected for the current year. For interim periods, we also account for the tax effect of significant non-recurring items in the period in which they occur as well as changes in the valuation allowance relating to a change in the assessment of the probability of utilization of the deferred income tax assets. Our liability for income taxes is finalized as auditable tax years pass their respective statutes of limitations in the various jurisdictions in which we are subject to tax. However, taxing authorities of these jurisdictions may audit prior years for which the statute of limitations is closed for the purpose of making an adjustment to our taxable income in a year for which the statute of limitations has not closed. Accordingly, taxing authorities of these jurisdictions may audit prior years of the Company and its predecessors for the purpose of adjusting net operating loss carryforwards to years for which the statute of limitations has not closed. We classify interest and penalties attributable to income taxes as part of income tax expense. As of September 30, 2019 and December 31, 2018, we had no recorded amounts for accrued interest or penalties. Because we do not permanently reinvest foreign earnings, United States deferred income taxes have been provided on unremitted foreign earnings to the extent that such foreign earnings are expected to be taxable upon repatriation. |
Long-Lived Assets | c. Long-Lived Assets We review long-lived assets, including finite-lived intangible assets subject to amortization, for impairment upon the occurrence of events or changes in circumstances that would indicate that the carrying value of the asset or group of assets may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of the asset or group of assets to the future net cash flows expected to be generated by the asset or group of assets. If such assets are not considered to be fully recoverable, any impairment to be recognized is measured by the amount by which the carrying amount of the asset or group of assets exceeds its respective fair value. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Earnings Per Common Share | d. Earnings Per Common Share Basic earnings per common share is computed by dividing net income attributable to Holdings’ common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share is computed by dividing net income attributable to Holdings’ common stockholders by the weighted average number of common shares outstanding during the period, including the effect of all dilutive common stock equivalents using the treasury stock method. In periods for which there is a net loss, diluted loss per common share is equal to basic loss per common share, since the effect of including any common stock equivalents would be antidilutive. Earnings per common share for the three and nine months ended September 30, 2019 and September 30, 2018 was calculated as follows: Three Months Ended Nine Months Ended (Amounts in thousands, except per share data) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Net income attributable to Six Flags Entertainment Corporation $ 179,833 $ 184,417 $ 190,220 $ 196,574 Weighted-average common shares outstanding - basic: 84,413 84,143 84,276 84,087 Effect of dilutive stock options and restricted stock units 632 1,373 662 1,417 Weighted-average common shares outstanding - diluted: 85,045 85,516 84,938 85,504 Earnings per share - basic: $ 2.13 $ 2.19 $ 2.26 $ 2.34 Earnings per share - diluted: $ 2.11 $ 2.16 $ 2.24 $ 2.30 |
Derivative Instruments and Hedging Activies | e. Derivative Instruments and Hedging Activities We account for derivatives and hedging activities in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging We formally document all relationships between hedging instruments and hedged items, as well as our risk-management objective and our strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as cash flow hedges to forecasted transactions. We also assess, both at the hedge’s inception and on an ongoing basis throughout the contract term, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. Changes in the fair value of interest rate derivatives that are effective and that are designated and qualify as cash flow hedges are recorded in “Other comprehensive (loss) income” until operations are affected by the variability in cash flows of the designated hedged item, at which point they are reclassified to “interest expense”. Changes in the fair value of derivatives that do not qualify for hedge accounting or that are de-designated are recorded in “Other expense (income), net” in the unaudited condensed consolidated statements of operations. |
Fair Value of Financial Instruments | f. Fair Value of Financial Instruments The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. We use a market approach for our recurring fair value measurements, and we endeavor to use the best information available. Accordingly, valuation techniques that maximize the use of observable impacts are favored. We present the estimated fair values and classifications of our financial instruments in accordance with FASB ASC Topic 820, Fair Value Measurement. We use the following methods and assumptions to estimate the fair value of each class of financial instruments: ● The carrying values of cash and cash equivalents, accounts receivable, notes receivable, accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments. ● The measurement of the fair value of long-term debt is based on market prices that generally are observable for similar liabilities at commonly quoted intervals and is considered a Level 2 fair value measurement. See Note 3 for additional information. ● The measurement of the fair value of derivative assets and liabilities is based on market prices that generally are observable for similar assets and liabilities at commonly quoted intervals and is considered a Level 2 fair value measurement. Derivative assets and liabilities that have maturity dates equal to or less than twelve months from the balance sheet date are included in prepaid and other current assets and other accrued liabilities, respectively. Derivative assets and liabilities that have maturity dates greater than twelve months from the balance sheet date are included in deposits and other assets and other long-term liabilities, respectively. See Note 5 for additional information on our derivative instruments and related Company policies. |
Stock Benefit Plans | g. Stock Benefit Plans Pursuant to the Six Flags Entertainment Corporation Long-Term Incentive Plan (the "Long-Term Incentive Plan"), Holdings may grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, deferred stock units, performance and cash-settled awards and dividend equivalent rights ("DERs") to select employees, officers, directors and consultants of Holdings and its affiliates. We recognize the fair value of each grant as compensation expense on a straight-line basis over the vesting period using the graded vesting terms of the respective grant. The fair value of stock option grants is estimated using the Black-Scholes option pricing valuation model. The fair value of stock, restricted stock units and restricted stock awards is the quoted market price of Holdings’ common stock on the date of grant. During the three and nine months ended September 30, 2019 and September 30, 2018, stock-based compensation expense consisted of the following: Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Long-Term Incentive Plan Options and other $ 3,828 $ 4,067 $ 11,138 $ 11,336 Performance awards (1) — 6,041 — 19,182 Employee Stock Purchase Plan 75 75 209 254 Total Stock-Based Compensation $ 3,903 $ 10,183 $ 11,347 $ 30,772 (1) |
Revenue Recognition | h. Revenue Recognition FASB ASC 606, Revenue from Contracts with Customers memberships after the initial twelve-month term, we recognize revenue monthly as payments are received. As of September 30, 2019, deferred revenue was primarily comprised of (i) unredeemed season pass and all season dining pass revenue, (ii) pre-sold single-day admissions revenue for the current operating season, (iii) unredeemed portions of the membership program and member dining program that will be recognized in 2019 and 2020, and (iv) payments received from our international development partners in excess of revenue recognized. We have entered into international agreements to assist third parties in the planning, design, development and operation of Six Flags-branded parks outside of North America. These agreements typically consist of a brand licensing agreement, project services agreement, and management services agreement. Under Topic 606, we treat these agreements as one contract because they were negotiated with a single commercial objective. We have identified three distinct promises within the agreement with each third party partner as brand licensing, project services and management services. Each of these promises is its own performance obligation and distinct, as the third party could benefit from each service on its own with other readily available resources, and each service is separately identifiable from other services in the context of the contract. We recognize revenue under our international agreements over the relevant service period of each performance obligation based on its relative stand-alone selling price, as determined by our best estimate of selling price. We review the service period of each performance obligation on an ongoing basis and revise it as necessary throughout the year. Revisions to the relevant service periods of the performance obligations may result in revisions to revenue in future periods and are recognized in the period in which the change is identified. Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the observable prices charged to customers. We generally expense (i) sales commissions when incurred, and (ii) certain costs to obtain a contract where the amortization period would have been one year or less. These costs are recognized in "Selling, general and administrative expenses." We do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less or (ii) contracts for which we recognize revenue at the amount for which we have the right to invoice for services performed. For certain of our contracts that have an original expected length of one year or less, we use the practical expedient applicable to such contracts and do not consider the time value of money. |
Leases | i. Leases We or certain of our subsidiaries are a lessee in various noncancelable operating leases, primarily for operating rights to amusement parks, land, office space, warehouses, office equipment and machinery. We account for leases in accordance with FASB ASC 842, Leases For our operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how we determine (i) the discount rate used to discount the unpaid lease payments to present value, (ii) the lease term and (iii) the lease payments. Topic 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate ("IBR"). Generally, we cannot determine the interest rate implicit in the lease and therefore we use the IBR as a discount rate for our leases. The IBR reflects the rate of interest we would pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease term for all of our leases includes the noncancelable period of the lease plus any additional periods covered by an option to extend the lease that are reasonably certain to be executed by us. Lease payments included in the measurement of the lease liability comprise fixed payments owed over the lease term, variable lease payments that depend on an index or rate, and the exercise price of an option to purchase the underlying asset if it is reasonably certain that we will exercise the option. The ROU asset is initially measured at cost, which comprises the initial amount of lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred, less any lease incentives received. For our operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, and adjusted for any prepaid or accrued lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the term of the operating lease. Variable lease payments associated with our leases are recognized upon the occurrence of the event, activity, or circumstance in the lease agreement on which those payments are assessed. Variable lease payments for operating leases are presented as operating expense in our condensed consolidated statements of operations in the same line item as expense arising from fixed lease payments. Property taxes and insurance paid on behalf of our lessors is included within variable lease payments. Operating lease ROU assets net of accumulated amortization are presented as "Right-of-use operating leases, net" on the condensed consolidated balance sheets. The current portion of operating lease liabilities is presented as "Short-term operating lease liabilities" and the long-term portion is presented separately as "Long-term operating lease liabilities" on the condensed consolidated balance sheets. We have elected not to recognize ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or less. We recognize the lease payments associated with short-term leases as an expense on a straight-line basis over the lease term. Variable lease payments associated with short-term leases are recognized and presented in the same manner as for all other leases. The ROU assets for operating leases may be periodically reduced by impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant and Equipment - Overall |
Accounts Receivable, Net | j. Accounts Receivable, Net Accounts receivable are reported at net realizable value and consist primarily of amounts due from guests for the sale of group outings and multi-use admission products, such as season passes and the membership program. We are not exposed to a significant concentration of credit risk; however, based on the age of the receivables, our historical experience and other factors and assumptions we believe to be customary and reasonable, we record an allowance for doubtful accounts. As of September 30, 2019 and December 31, 2018, we have recorded an allowance for doubtful accounts of $20.5 million and $7.4 million, respectively, which is primarily comprised of estimated payment defaults under our membership program. To the extent that payments under our membership program have not been recognized in revenue, the allowance for doubtful accounts recorded against our membership program is offset with a corresponding reduction in deferred revenue. |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements | k. Recently Adopted Accounting Pronouncements On January 1, 2019, we adopted Topic 842 using the modified retrospective transition method applied to leases with terms extending past January 1, 2019. Topic 842 requires recognition on the balance sheet of lease ROU assets and lease liabilities by lessees for those leases classified as operating leases in order to give more transparency on commitments and future cash flow. The new guidance is effective for annual periods beginning after December 15, 2018, including interim periods within the fiscal year. The new standard supersedes the previous lease accounting standard under FASB ASC 840, Leases l. Recent Accounting Pronouncements In June 2016, FASB issued Accounting Standards Update 2016-13, Measurement of Credit Losses on Financial Instruments, over the life of financial assets rather than the current incurred loss impairment model that recognizes losses when a probable threshold is met. Topic 326 is effective for annual periods beginning after December 15, 2019 and interim periods within those fiscal years. We are evaluating the provisions of this accounting standards update and assessing the impact, if any, it may have on our condensed consolidated financial statements. |
General - Basis of Presentati_3
General - Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
General - Basis of Presentation | |
Schedule of calculation of earnings per common share | Three Months Ended Nine Months Ended (Amounts in thousands, except per share data) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Net income attributable to Six Flags Entertainment Corporation $ 179,833 $ 184,417 $ 190,220 $ 196,574 Weighted-average common shares outstanding - basic: 84,413 84,143 84,276 84,087 Effect of dilutive stock options and restricted stock units 632 1,373 662 1,417 Weighted-average common shares outstanding - diluted: 85,045 85,516 84,938 85,504 Earnings per share - basic: $ 2.13 $ 2.19 $ 2.26 $ 2.34 Earnings per share - diluted: $ 2.11 $ 2.16 $ 2.24 $ 2.30 |
Schedule of stock-based compensation expense | Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Long-Term Incentive Plan Options and other $ 3,828 $ 4,067 $ 11,138 $ 11,336 Performance awards (1) — 6,041 — 19,182 Employee Stock Purchase Plan 75 75 209 254 Total Stock-Based Compensation $ 3,903 $ 10,183 $ 11,347 $ 30,772 (1) |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue | |
Revenues Disaggregated by Contract Duration | The following tables present our revenues disaggregated by contract duration for the three and nine months ended September 30, 2019 and September 30, 2018, respectively. Long-term and short-term contracts consist of our contracts with customers with terms greater than one year and less than or equal to one year, respectively. Sales and usage-based taxes are excluded from revenues. Three Months Ended September 30, 2019 Sponsorship, Park Food, International Merchandise Agreements and (Amounts in thousands) Park Admissions and Other Accommodations Consolidated Long-term contracts $ 38,684 $ 7,897 $ 16,029 $ 62,610 Short-term contracts and other (a) 313,980 234,162 10,428 558,570 Total revenues $ 352,664 $ 242,059 $ 26,457 $ 621,180 Three Months Ended September 30, 2018 Sponsorship, Park Food, International Merchandise Agreements and (Amounts in thousands) Park Admissions and Other Accommodations Consolidated Long-term contracts $ 43,976 $ 10,032 $ 25,703 $ 79,711 Short-term contracts and other (a) 307,001 222,920 10,188 540,109 Total revenues $ 350,977 $ 232,952 $ 35,891 $ 619,820 Nine Months Ended September 30, 2019 Sponsorship, Park Food, International Merchandise Agreements and (Amounts in thousands) Park Admissions and Other Accommodations Consolidated Long-term contracts $ 70,227 $ 15,511 $ 61,462 $ 147,200 Short-term contracts and other (a) 601,025 457,181 21,177 1,079,383 Total revenues $ 671,252 $ 472,692 $ 82,639 $ 1,226,583 Nine Months Ended September 30, 2018 Sponsorship, Park Food, International Merchandise Agreements and (Amounts in thousands) Park Admissions and Other Accommodations Consolidated Long-term contracts $ 78,203 $ 18,419 $ 60,938 $ 157,560 Short-term contracts and other (a) 579,566 432,834 24,244 1,036,644 Total revenues $ 657,769 $ 451,253 $ 85,182 $ 1,194,204 (a) Other revenues primarily include sales of single-use tickets and short-term transactional sales for which we have the right to invoice. |
Long-Term Indebtedness (Tables)
Long-Term Indebtedness (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Long-Term Indebtedness | |
Schedule of long-term debt | As of September 30, 2019 and December 31, 2018, long-term debt consisted of the following: As of (Amounts in thousands) September 30, 2019 December 31, 2018 Second Amended and Restated Credit Facility Second Amended and Restated Term Loan B $ 798,000 $ — 2015 Credit Facility 2015 Term Loan B — 583,750 2015 Revolving Loan — 43,000 2024 Notes 1,000,000 1,000,000 2027 Notes 500,000 500,000 Net discount (6,904) (6,792) Deferred financing costs (14,392) (13,446) Total debt $ 2,276,704 $ 2,106,512 Less current portion of long-term debt (8,000) — Less short-term borrowings — (43,000) Total long-term debt $ 2,268,704 $ 2,063,512 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accumulated Other Comprehensive Loss | |
Schedule of components of AOCI | Changes in the composition of Accumulated Other Comprehensive Loss ("AOCI") during the nine months ended September 30, 2019 were as follows: Accumulated Cumulative Other Translation Cash Flow Defined Benefit Income Comprehensive (Amounts in thousands) Adjustment Hedges Plans Taxes Loss Balances at December 31, 2018 $ (27,352) $ — $ (41,071) $ (3,075) $ (71,498) Net current period change 316 (5,901) — 1,425 (4,160) Amounts reclassified from AOCI — — 589 (149) 440 Balances at September 30, 2019 $ (27,036) $ (5,901) $ (40,482) $ (1,799) $ (75,218) |
Schedule of reclassifications out of accumulated other comprehensive income (loss) | The Company had the following reclassifications out of AOCI during the three and nine months ended September 30, 2019 and September 30, 2018: Amount of Reclassification from AOCI Three Months Ended Nine Months Ended Component of AOCI Location of Reclassification into Income September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Amortization of deferred actuarial loss and prior service cost Operating expenses $ 205 $ 182 $ 589 $ 540 Income tax expense (54) (47) (149) (139) Net of tax $ 151 $ 135 $ 440 $ 401 Total reclassifications $ 151 $ 135 $ 440 $ 401 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Financial Instruments | |
Schedule of derivative instruments recorded at fair value | Derivative assets recorded at fair value in our condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively, consisted of the following: Derivative Assets (Amounts in thousands) September 30, 2019 December 31, 2018 Derivatives Designated as Cash Flow Hedges Interest Rate Swap Agreements — Current $ 718 $ — Interest Rate Swap Agreements — Noncurrent — — $ 718 $ — Derivative liabilities recorded at fair value in our condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively, consisted of the following: Derivative Liabilities (Amounts in thousands) September 30, 2019 December 31, 2018 Derivatives Designated as Cash Flow Hedges Interest Rate Swap Agreements — Current $ (598) $ — Interest Rate Swap Agreements — Noncurrent (6,021) — $ (6,619) $ — |
Schedule of gains and losses before taxes on derivatives designated as cash flow hedges | Three Months Ended September 30, 2019 and September 30, 2018 Loss Recognized in Operations on Derivatives Loss Loss Reclassified from (Ineffective Portion and Recognized in AOCI AOCI into Operations Amount Excluded from (Effective Portion) (Effective Portion) Effectiveness Testing) (Amounts in thousands) 2019 2018 2019 2018 2019 2018 Interest Rate Swap Agreements $ (3,035) $ — $ — $ — $ — $ — Total $ (3,035) $ — $ — $ — $ — $ — Nine Months Ended September 30, 2019 and September 30, 2018 Loss Recognized in Operations on Derivatives Loss Loss Reclassified from (Ineffective Portion and Recognized in AOCI AOCI into Operations Amount Excluded from (Effective Portion) (Effective Portion) Effectiveness Testing) (Amounts in thousands) 2019 2018 2019 2018 2019 2018 Interest Rate Swap Agreements $ (5,901) $ — $ — $ — $ — $ — Total $ (5,901) $ — $ — $ — $ — $ — |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Schedule of components of lease cost | Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2019 September 30, 2019 Operating lease cost $ 6,127 $ 18,524 Short-term lease cost 1,754 5,289 Variable lease cost 1,224 2,091 Total lease cost $ 9,105 $ 25,904 |
Schedule of other information related to leases | Three Months Ended Nine Months Ended (Amounts in thousands, except for lease term and discount rate) September 30, 2019 September 30, 2019 Cash paid for amounts included in the measurement of lease liability operating cash flows $ 14,011 $ 22,464 ROU assets obtained in exchange for lease liabilities 253 4,610 Weighted-average remaining lease term (in years) 19.62 19.62 Weighted-average discount rate 6.91 % 6.91 % |
Schedule of maturities of noncancellable operating lease liabilities | Maturities of noncancelable operating lease liabilities under Topic 842 as of September 30, 2019 are summarized in the table below. (Amounts in thousands) As of September 30, 2019 Remaining in 2019 $ 1,559 2020 23,741 2021 22,597 2022 21,588 2023 21,406 Thereafter 287,536 Total $ 378,427 Less: present value discount (182,477) Lease liability $ 195,950 |
Schedule of future minimum lease payments | Future minimum lease payments for long-term noncancelable operating leases under Topic 840 as of December 31, 2018 are summarized in the table below. (Amounts in thousands) As of December 31, 2018 2019 $ 23,936 2020 23,266 2021 22,384 2022 21,626 2023 21,563 Thereafter 314,799 Total $ 427,574 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Redeemable Noncontrolling Interests | |
Schedule of redeemable noncontrolling interests of the SFOT and SFOG partnerships | (Amounts in thousands) SFOT SFOG Total Balance at December 31, 2018 $ 243,756 $ 281,515 $ 525,271 Purchase of redeemable units of SFOT (217) — (217) Fresh start accounting fair market value adjustment for purchased units (45) — (45) Net income attributable to noncontrolling interests 20,452 20,301 40,753 Distributions to noncontrolling interests (10,226) (10,150) (20,376) Balance at September 30, 2019 $ 253,720 $ 291,666 $ 545,386 |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Segments | |
Schedule of segment financial information and a reconciliation of net income to Park EBITDA | The following table presents segment financial information and a reconciliation of net income to Park EBITDA. Park level expenses exclude all non-cash operating expenses, principally depreciation and amortization and all non-operating expenses. Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Net income $ 200,209 $ 204,421 $ 230,973 $ 236,581 Interest expense, net 28,336 26,985 86,256 80,350 Income tax expense 61,626 55,260 70,644 59,498 Depreciation and amortization 30,685 29,620 89,033 86,170 Corporate expenses 10,060 12,523 39,984 41,656 Stock-based compensation 3,903 10,183 11,347 30,772 Non-operating park level expense, net: Loss on disposal of assets 2,659 386 3,105 2,551 Loss on debt extinguishment, net — — 6,231 — Other expense (income), net 231 (130) (1,474) 2,159 Park EBITDA $ 337,709 $ 339,248 $ 536,099 $ 539,737 |
Schedule of information reflecting long-lived assets, revenues and income before income taxes by domestic and foreign categories | Domestic Foreign Total 2019 (Amounts in thousands) Long-lived assets $ 2,361,622 $ 136,120 $ 2,497,742 Revenues 1,138,640 87,943 1,226,583 Income before income taxes 284,868 16,749 301,617 2018 Long-lived assets $ 2,171,503 $ 104,029 $ 2,275,532 Revenues 1,101,836 92,368 1,194,204 Income before income taxes 274,811 21,268 296,079 |
Pension Benefits (Tables)
Pension Benefits (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Pension Benefits | |
Summary of pension costs | Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Service cost $ 313 $ 250 $ 988 $ 1,050 Interest cost 1,995 1,844 5,999 5,542 Expected return on plan assets (3,318) (3,431) (9,979) (10,307) Amortization of net actuarial loss 205 182 589 540 Total net periodic benefit $ (805) $ (1,155) $ (2,403) $ (3,175) |
Schedule of weighted average assumptions used to determine net cost | Weighted-Average Assumptions Used To Determine Net Cost Three Months Ended Nine Months Ended September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Discount rate 4.05 % 3.45 % 4.05 % 3.45 % Rate of compensation increase N/A N/A N/A N/A Expected return on plan assets 7.25 % 7.25 % 7.25 % 7.25 % |
General - Basis of Presentati_4
General - Basis of Presentation - Additional Information (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2018 | Sep. 30, 2019USD ($)itemshares | Sep. 30, 2018shares | Sep. 30, 2019USD ($)itempaymentshares | Sep. 30, 2018shares | Dec. 31, 2018USD ($) | |
General - Basis of Presentation | ||||||
Number of parks owned or operated | 26 | 26 | ||||
Number of parks acquired | 5 | |||||
Valuation allowance | $ | $ 116.4 | $ 116.4 | $ 115.2 | |||
Accrued interest and penalties, income taxes | $ | $ 0 | $ 0 | 0 | |||
Antidilutive stock options excluded from computation of diluted shares outstanding (in shares) | shares | 3,554,000 | 881,000 | 3,595,000 | 729,000 | ||
Number of upfront payments | payment | 1 | |||||
Number of contracts in a typical international agreement | 1 | 1 | ||||
Number of distinct promises within a typical international agreement | 3 | 3 | ||||
Initial membership term | 12 months | |||||
Allowance for doubtful accounts | $ | $ 20.5 | $ 20.5 | $ 7.4 | |||
United States | ||||||
General - Basis of Presentation | ||||||
Number of parks owned or operated | 23 | 23 | ||||
Mexico | ||||||
General - Basis of Presentation | ||||||
Number of parks owned or operated | 2 | 2 | ||||
Canada | ||||||
General - Basis of Presentation | ||||||
Number of parks owned or operated | 1 | 1 |
General - Basis of Presentati_5
General - Basis of Presentation - Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Common Share | ||||
Antidilutive stock options excluded from computation of diluted shares outstanding (in shares) | 3,554,000 | 881,000 | 3,595,000 | 729,000 |
Calculation of earnings per common share | ||||
Net income attributable to Six Flags Entertainment Corporation | $ 179,833 | $ 184,417 | $ 190,220 | $ 196,574 |
Weighted-average common shares outstanding: | ||||
Weighted-average common shares outstanding-basic (in shares) | 84,413,000 | 84,143,000 | 84,276,000 | 84,087,000 |
Effect of dilutive stock options and restricted stock units (in shares) | 632,000 | 1,373,000 | 662,000 | 1,417,000 |
Weighted-average common shares outstanding-diluted (in shares) | 85,045,000 | 85,516,000 | 84,938,000 | 85,504,000 |
Earnings per share - basic (in dollars per share) | $ 2.13 | $ 2.19 | $ 2.26 | $ 2.34 |
Earnings per share - diluted (in dollars per share) | $ 2.11 | $ 2.16 | $ 2.24 | $ 2.30 |
General - Basis of Presentati_6
General - Basis of Presentation - Allocated Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Allocated share-based compensation expense | $ 3,903 | $ 10,183 | $ 11,347 | $ 30,772 |
Long Term Incentive Plan | Options and other | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Allocated share-based compensation expense | 3,828 | 4,067 | 11,138 | 11,336 |
Long Term Incentive Plan | Performance awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Allocated share-based compensation expense | 6,041 | 0 | 19,182 | |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Allocated share-based compensation expense | $ 75 | $ 75 | $ 209 | $ 254 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | Jan. 01, 2019USD ($) | Jan. 01, 2018USD ($) | |
Revenue | ||||||
Revenues | $ 621,180 | $ 619,820 | $ 1,226,583 | $ 1,194,204 | ||
Number of distinct obligations within international agreements | item | 3 | 3 | ||||
Long-term contracts | ||||||
Revenue | ||||||
Revenues | $ 62,610 | 79,711 | $ 147,200 | 157,560 | ||
Contract with customer, liability | $ 100,800 | $ 111,600 | ||||
Contract with customer, liability, revenue recognized | 46,900 | 39,000 | (109,700) | 89,600 | ||
Short-term contracts and other | ||||||
Revenue | ||||||
Revenues | 558,570 | 540,109 | 1,079,383 | 1,036,644 | ||
Park Admissions | ||||||
Revenue | ||||||
Revenues | 352,664 | 350,977 | 671,252 | 657,769 | ||
Park Admissions | Long-term contracts | ||||||
Revenue | ||||||
Revenues | 38,684 | 43,976 | 70,227 | 78,203 | ||
Park Admissions | Short-term contracts and other | ||||||
Revenue | ||||||
Revenues | 313,980 | 307,001 | 601,025 | 579,566 | ||
Park Food, Merchandise and Other | ||||||
Revenue | ||||||
Revenues | 242,059 | 232,952 | 472,692 | 451,253 | ||
Park Food, Merchandise and Other | Long-term contracts | ||||||
Revenue | ||||||
Revenues | 7,897 | 10,032 | 15,511 | 18,419 | ||
Park Food, Merchandise and Other | Short-term contracts and other | ||||||
Revenue | ||||||
Revenues | 234,162 | 222,920 | 457,181 | 432,834 | ||
Sponsorship, International Agreements and Accommodations | ||||||
Revenue | ||||||
Revenues | 26,457 | 35,891 | 82,639 | 85,182 | ||
Sponsorship, International Agreements and Accommodations | Long-term contracts | ||||||
Revenue | ||||||
Revenues | 16,029 | 25,703 | 61,462 | 60,938 | ||
Sponsorship, International Agreements and Accommodations | Short-term contracts and other | ||||||
Revenue | ||||||
Revenues | $ 10,428 | $ 10,188 | $ 21,177 | $ 24,244 |
Revenue - Performance Obligatio
Revenue - Performance Obligations (Details) - Long-term contracts - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Revenue | ||
Performance obligation | $ 38.4 | $ 102.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | ||
Revenue | ||
Performance obligation | $ 30.9 | |
Revenue | ||
Expected timing of satisfaction, period | 3 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | ||
Revenue | ||
Performance obligation | $ 119.4 | |
Revenue | ||
Expected timing of satisfaction, period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Revenue | ||
Performance obligation | $ 49.4 | |
Revenue | ||
Expected timing of satisfaction, period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||
Revenue | ||
Performance obligation | $ 29.9 | |
Revenue | ||
Expected timing of satisfaction, period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Revenue | ||
Performance obligation | $ 1 | |
Revenue | ||
Expected timing of satisfaction, period |
Long-Term Indebtedness - Additi
Long-Term Indebtedness - Additional Information (Details) $ in Thousands | Apr. 18, 2019USD ($) | Apr. 17, 2019USD ($) | Mar. 26, 2019USD ($) | Mar. 25, 2019 | Oct. 15, 2017USD ($) | Apr. 13, 2017USD ($) | Jan. 31, 2017USD ($) | Jun. 16, 2016USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Aug. 31, 2019USD ($) | Jun. 30, 2019USD ($)agreement | Dec. 31, 2018USD ($) | Apr. 30, 2014USD ($) |
Summary of Long-term debt | ||||||||||||||
Payments of debt issuance costs | $ 8,927 | $ 793 | ||||||||||||
Loss on debt extinguishment | 6,231 | |||||||||||||
Proceeds from issuance of debt utilized for extinguishment of existing debt instruments | $ 150,000 | |||||||||||||
Interest Rate Swap | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Notional amount | $ 300,000 | |||||||||||||
Interest Rate Swap Second Agreements | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Notional amount | $ 400,000 | |||||||||||||
Amended and Restated Revolving Loan | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Maximum borrowing capacity | 350,000 | |||||||||||||
Amended and Restated Term Loan B | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Maximum borrowing capacity | 800,000 | |||||||||||||
2015 Revolving Loan | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Maximum borrowing capacity | 250,000 | |||||||||||||
Credit Facility 2015 - Term Loan B | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Maximum borrowing capacity | $ 700,000 | |||||||||||||
Long-term line of credit | $ 583,750 | |||||||||||||
Credit Facility 2015 - Term Loan B | LIBOR | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Basis spread on variable rate | 2.00% | |||||||||||||
Credit Facility 2015 Revolving Loan | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Long-term line of credit | 43,000 | |||||||||||||
Letters of credit outstanding, amount | 18,100 | |||||||||||||
Credit Facility 2011 - Term Loan B | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Payments of debt issuance costs | $ 300 | |||||||||||||
Proceeds from lines of credit | $ 39,000 | |||||||||||||
Amended and Restated Term Loan B, As Amended March 2018 | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Basis spread reduction | (0.25%) | |||||||||||||
Basis spread on variable rate | 1.75% | |||||||||||||
Payments of debt issuance costs | $ 500 | |||||||||||||
Amended and Restated Term Loan B, As Amended June 2017 | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Basis spread on variable rate | 2.00% | |||||||||||||
Second Amended and Restated Credit Facility | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Payments of debt issuance costs | $ 8,900 | |||||||||||||
Second Amended and Restated Revolving Loan | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Maximum borrowing capacity | 350,000 | |||||||||||||
Long-term line of credit | $ 0 | |||||||||||||
Letters of credit outstanding, amount | $ 20,800 | |||||||||||||
Commitment fee percentage | 0.30% | |||||||||||||
Second Amended and Restated Term Loan B | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Maximum borrowing capacity | 800,000 | |||||||||||||
Loss on debt extinguishment | $ 6,200 | |||||||||||||
Long-term debt | $ 798,000 | |||||||||||||
Interest rate, stated percentage | 3.71% | |||||||||||||
Periodic payment | $ 2,000 | |||||||||||||
Periodic payment of interest | 798,000 | |||||||||||||
Second Amended and Restated Term Loan B | Interest Rate Swap | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Number of agreements | agreement | 3 | |||||||||||||
Notional amount | $ 300,000 | |||||||||||||
Second Amended and Restated Term Loan B | Interest Rate Swap Second Agreements | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Number of agreements | 2 | |||||||||||||
Notional amount | $ 400,000 | |||||||||||||
Senior Unsecured 2024 Notes | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Payments of debt issuance costs | 4,700 | |||||||||||||
Long-term debt | 1,000,000 | 1,000,000 | ||||||||||||
Debt instrument, face amount | $ 300,000 | |||||||||||||
Interest rate, stated percentage | 4.875% | |||||||||||||
Periodic payment of interest | $ 24,400 | $ 9,100 | ||||||||||||
Senior Unsecured 2024 Notes Add-on | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Payments of debt issuance costs | 3,900 | |||||||||||||
Debt instrument, face amount | $ 700,000 | |||||||||||||
Interest rate, stated percentage | 4.875% | |||||||||||||
Senior Unsecured 2027 Notes | ||||||||||||||
Summary of Long-term debt | ||||||||||||||
Payments of debt issuance costs | $ 2,600 | |||||||||||||
Long-term debt | $ 500,000 | $ 500,000 | ||||||||||||
Debt instrument, face amount | $ 500,000 | |||||||||||||
Interest rate, stated percentage | 5.50% | |||||||||||||
Periodic payment of interest | $ 13,900 | $ 13,800 |
Long-Term Indebtedness - Schedu
Long-Term Indebtedness - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Summary of Long-term debt | ||
Net discount | $ (6,904) | $ (6,792) |
Deferred financing costs | (14,392) | (13,446) |
Total debt | 2,276,704 | 2,106,512 |
Less current portion | (8,000) | |
Less short-term borrowings | (43,000) | |
Total long-term debt | 2,268,704 | 2,063,512 |
Second Amended and Restated Term Loan B | ||
Summary of Long-term debt | ||
Long-term debt | 798,000 | |
Credit Facility 2015 Revolving Loan | ||
Summary of Long-term debt | ||
Long-term line of credit | 43,000 | |
Credit Facility 2015 - Term Loan B | ||
Summary of Long-term debt | ||
Long-term line of credit | 583,750 | |
Senior Unsecured 2024 Notes | ||
Summary of Long-term debt | ||
Long-term debt | 1,000,000 | 1,000,000 |
Senior Unsecured 2027 Notes | ||
Summary of Long-term debt | ||
Long-term debt | 500,000 | 500,000 |
Estimate of Fair Value Measurement | ||
Summary of Long-term debt | ||
Total long-term debt | $ 2,347,400 | $ 2,012,400 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accumulated other comprehensive loss, net of tax | ||||
Beginning balance | $ (749,807) | $ (665,994) | $ (643,093) | $ (505,112) |
Net current period change | 440 | |||
Amounts reclassified from AOCI | (4,160) | |||
Ending balance | (635,187) | (515,213) | (635,187) | (515,213) |
Cumulative Translation Adjustment | ||||
Accumulated other comprehensive loss, net of tax | ||||
Beginning balance | (27,352) | |||
Amounts reclassified from AOCI | 316 | |||
Ending balance | (27,036) | (27,036) | ||
Cash Flow Hedges | ||||
Accumulated other comprehensive loss, net of tax | ||||
Amounts reclassified from AOCI | (5,901) | |||
Ending balance | (5,901) | (5,901) | ||
Defined Benefit Plans | ||||
Accumulated other comprehensive loss, net of tax | ||||
Beginning balance | (41,071) | |||
Net current period change | 589 | |||
Ending balance | (40,482) | (40,482) | ||
Income Taxes | ||||
Accumulated other comprehensive loss, net of tax | ||||
Beginning balance | (3,075) | |||
Net current period change | (149) | |||
Amounts reclassified from AOCI | 1,425 | |||
Ending balance | (1,799) | (1,799) | ||
Accumulated other comprehensive loss | ||||
Accumulated other comprehensive loss, net of tax | ||||
Beginning balance | (71,635) | (71,979) | (71,498) | (63,881) |
Ending balance | $ (75,218) | $ (68,506) | $ (75,218) | $ (68,506) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Reclassification out of AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Reclassifications out of accumulated other comprehensive income (loss): | ||||
Interest expense | $ 28,686 | $ 27,142 | $ 86,965 | $ 80,820 |
Income tax expense | 61,626 | 55,260 | 70,644 | 59,498 |
Total reclassifications | 4,160 | |||
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassifications out of accumulated other comprehensive income (loss): | ||||
Total reclassifications | 151 | 135 | 440 | 401 |
Reclassification out of Accumulated Other Comprehensive Income | Defined Benefit Plans | ||||
Reclassifications out of accumulated other comprehensive income (loss): | ||||
Operating expenses | 205 | 182 | 589 | 540 |
Income tax expense | (54) | (47) | (149) | (139) |
Total reclassifications | $ 151 | $ 135 | $ 440 | $ 401 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Millions | Aug. 31, 2019 | Apr. 30, 2014 |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Notional amount | $ 300 | |
Interest Rate Swap Second Agreements | ||
Derivative [Line Items] | ||
Notional amount | $ 400 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Derivative Instruments Recorded at Fair Value (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Derivative Financial Instruments | |
Interest Rate Swap Agreements | $ (6,619) |
Interest Rate Swap | |
Derivative Financial Instruments | |
Derivative Liabilities - Noncurrent | (6,021) |
Derivatives Designated as Cash Flow Hedges | Interest Rate Swap | |
Derivative Financial Instruments | |
Derivative Assets - Current | 718 |
Derivative Assets | 718 |
Derivative Liabilities - Current | (598) |
Derivatives Not Designated as Hedging Instruments | |
Derivative Financial Instruments | |
Derivative Assets | 0 |
Interest Rate Swap Agreements | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Gains and Losses before Taxes on Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Derivative [Line Items] | ||
Loss Recognized in AOCI (Effective Portion) | $ (3,035) | $ (5,901) |
Interest Rate Swap | ||
Derivative [Line Items] | ||
Loss Recognized in AOCI (Effective Portion) | $ (3,035) | $ (5,901) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jan. 07, 2016USD ($) | Apr. 01, 1998USD ($) | May 31, 2019USD ($)shares | Sep. 30, 2019USD ($)multiple | Sep. 30, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)claim | Jun. 30, 2019USD ($) | Apr. 07, 2017item |
Details of commitments and contingencies | ||||||||||
Acquisition of capital stock of the former Six Flags Entertainment Corporation, paid in cash | $ 976,000,000 | |||||||||
Redemption value of noncontrolling interests | $ 525,100,000 | |||||||||
Additions to property and equipment | $ 123,662,000 | $ 112,242,000 | ||||||||
Total loans receivable from the partnerships that own partnership parks | 239,300,000 | |||||||||
Number of questions certified for consideration by appellate court | item | 2 | |||||||||
Number of claims filed | claim | 4 | |||||||||
Minimum | ||||||||||
Details of commitments and contingencies | ||||||||||
Range of possible loss per aggrieved party | $ 1,000 | $ 100 | ||||||||
Maximum | ||||||||||
Details of commitments and contingencies | ||||||||||
Range of possible loss per aggrieved party | $ 5,000 | $ 1,000 | ||||||||
Multi-layered general liability policies | ||||||||||
Details of commitments and contingencies | ||||||||||
Excess liability coverage per occurrence | 100,000,000 | |||||||||
Self-insured retention per occurrence | 2,000,000 | |||||||||
Deductible per occurrence applicable to all claims in the policy year | 500,000 | |||||||||
Workers' compensation claims | ||||||||||
Details of commitments and contingencies | ||||||||||
Deductible per occurrence applicable to all claims in the policy year | 750,000 | |||||||||
Workers' compensation claims | November 16, 2001 - November 15, 2003 | ||||||||||
Details of commitments and contingencies | ||||||||||
Deductible per occurrence applicable to all claims in the policy year | 500,000 | |||||||||
Information security and privacy liability insurance policy | ||||||||||
Details of commitments and contingencies | ||||||||||
Self-insured retention per occurrence | 250,000 | |||||||||
Insurance value maintained | 10,000,000 | |||||||||
Amended and Restated Term Loan B, As Amended June 2017 | ||||||||||
Details of commitments and contingencies | ||||||||||
Additional contingent borrowing capacity | $ 350,000,000 | |||||||||
Six Flags over Georgia | ||||||||||
Details of commitments and contingencies | ||||||||||
Limited partner interests owned (as a percent) | 31.00% | |||||||||
Remaining redeemable units (as a percent) | 69.00% | |||||||||
Six Flags over Texas | ||||||||||
Details of commitments and contingencies | ||||||||||
Limited partner interests owned (as a percent) | 53.20% | |||||||||
Units purchased in partnership parks (in units) | shares | 0.1 | |||||||||
Units purchased in partnership parks | $ 200,000 | |||||||||
Remaining redeemable units (as a percent) | 46.80% | |||||||||
Six Flags over Texas and Georgia | ||||||||||
Details of commitments and contingencies | ||||||||||
Rolling period for making minimum capital expenditure at each of the Partnership Parks | 5 years | |||||||||
Percentage of capital expenditures to Partnership Parks' revenues | 6.00% | |||||||||
Weighted average period of the park's EBITDA for calculation of value of purchase price | 4 years | |||||||||
Additions to property and equipment | $ 21,200,000 | |||||||||
Cash generated from operating activities by partnerships, after deduction of capital expenditures and excluding the impact of short-term intercompany advances | $ 73,500,000 | |||||||||
Six Flags over Georgia | ||||||||||
Details of commitments and contingencies | ||||||||||
Specified multiple for purchase price valuation (in multipliers) | multiple | 8 | |||||||||
Specified price for purchase of partnership parks | $ 408,300,000 | |||||||||
Redemption value of noncontrolling interests | $ 281,500,000 | |||||||||
Six Flags over Texas | ||||||||||
Details of commitments and contingencies | ||||||||||
Specified multiple for purchase price valuation (in multipliers) | multiple | 8.5 | |||||||||
Specified price for purchase of partnership parks | $ 520,600,000 | |||||||||
Redemption value of noncontrolling interests | $ 243,600,000 | |||||||||
Six Flags over Texas | Six Flags over Georgia | ||||||||||
Details of commitments and contingencies | ||||||||||
Units purchased in partnership parks (in units) | shares | 0 | |||||||||
Scenario, Forecast | Six Flags over Texas and Georgia | ||||||||||
Details of commitments and contingencies | ||||||||||
Annual distributions by general partners to limited partners in partnership parks | $ 72,500,000 | |||||||||
Share of Partnership Parks' annual distributions paid to Six Flags Entertainment Corporation | 31,700,000 | |||||||||
Additions to property and equipment | $ 13,000,000 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | |
Lessee, Lease, Description [Line Items] | ||||
Right-of-use operating leases, net | $ 202,935 | $ 207,400 | ||
Lease liability | $ 195,950 | $ 204,300 | ||
Option to terminate, term | 1 year | |||
Operating leases, rent expense, net | $ 9,500 | $ 19,600 | ||
Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Term of contract | 1 year | |||
Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Term of contract | 46 years | |||
Renewal term | 20 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases | ||
Operating lease cost | $ 6,127 | $ 18,524 |
Short-term lease cost | 1,754 | 5,289 |
Variable lease cost | 1,224 | 2,091 |
Total lease cost | 9,105 | 25,904 |
Cash paid for amounts included in the measurement of lease liability operating cash flows | 14,011 | 22,464 |
ROU assets obtained in exchange for lease liabilities | $ 253 | $ 4,610 |
Weighted-average remaining lease term (in years) | 19 years 7 months 13 days | 19 years 7 months 13 days |
Weighted-average discount rate | 6.91% | 6.91% |
Leases - Future Minimum Lease O
Leases - Future Minimum Lease Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Leases | ||
Remaining in 2019 | $ 1,559 | |
2020 | 23,741 | |
2021 | 22,597 | |
2022 | 21,588 | |
2023 | 21,406 | |
Thereafter | 287,536 | |
Total | 378,427 | |
Less: present value discount | (182,477) | |
Lease liability | $ 195,950 | $ 204,300 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments under Topic 840 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases | |
2019 | $ 23,936 |
2020 | 23,266 |
2021 | 22,384 |
2022 | 21,626 |
2023 | 21,563 |
Thereafter | 314,799 |
Total | $ 427,574 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | |
Changes in redeemable noncontrolling interests | |||
Redeemable noncontrolling interests, beginning | $ 525,271 | ||
Purchase of redeemable units | (217) | $ (353) | |
Fresh start accounting fair market value adjustment for purchased units | (45) | ||
Net income attributable to noncontrolling interests | 40,753 | ||
Distributions to noncontrolling interests | (20,376) | ||
Redeemable noncontrolling interests, ending | 545,386 | ||
Redemption value of noncontrolling interests | $ 525,100 | ||
Six Flags over Texas | |||
Changes in redeemable noncontrolling interests | |||
Redeemable noncontrolling interests, beginning | 243,756 | ||
Purchase of redeemable units | (217) | ||
Fresh start accounting fair market value adjustment for purchased units | (45) | ||
Net income attributable to noncontrolling interests | 20,452 | ||
Distributions to noncontrolling interests | (10,226) | ||
Redeemable noncontrolling interests, ending | 253,720 | ||
Redemption value of noncontrolling interests | 243,600 | ||
Six Flags over Georgia | |||
Changes in redeemable noncontrolling interests | |||
Redeemable noncontrolling interests, beginning | 281,515 | ||
Net income attributable to noncontrolling interests | 20,301 | ||
Distributions to noncontrolling interests | (10,150) | ||
Redeemable noncontrolling interests, ending | 291,666 | ||
Redemption value of noncontrolling interests | $ 281,500 |
Business Segments - Schedule of
Business Segments - Schedule of Segment Financial Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)segment | Sep. 30, 2018USD ($) | |
Reconciliation of net loss to Park EBITDA | ||||
Number of reportable segments | segment | 1 | |||
Net income | $ 200,209 | $ 204,421 | $ 230,973 | $ 236,581 |
Interest expense, net | 28,336 | 26,985 | 86,256 | 80,350 |
Income tax benefit | 61,626 | 55,260 | 70,644 | 59,498 |
Depreciation and amortization | 30,685 | 29,620 | 89,033 | 86,170 |
Selling, general and administrative expenses | 55,144 | 65,783 | 154,977 | 175,507 |
Stock-based compensation | 3,903 | 10,183 | 11,347 | 30,772 |
Loss on disposal of assets | 2,659 | 386 | 3,105 | 2,551 |
Loss on debt extinguishment | 6,231 | |||
Other (income) expense, net | 231 | (130) | (1,474) | 2,159 |
Corporate, Non-Segment | ||||
Reconciliation of net loss to Park EBITDA | ||||
Selling, general and administrative expenses | 10,060 | 12,523 | 39,984 | 41,656 |
Operating Segments | ||||
Reconciliation of net loss to Park EBITDA | ||||
Park EBITDA | $ 337,709 | $ 339,248 | $ 536,099 | $ 539,737 |
Business Segments - Information
Business Segments - Information by Geographic Region (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | |
Business segment information by geographical areas | ||||
Number of parks owned or operated | item | 26 | 26 | ||
Long-lived assets | $ 2,497,742 | $ 2,275,532 | $ 2,497,742 | $ 2,275,532 |
Revenues | 621,180 | 619,820 | 1,226,583 | 1,194,204 |
Loss before income taxes | $ 261,835 | 259,681 | $ 301,617 | 296,079 |
Mexico | ||||
Business segment information by geographical areas | ||||
Number of parks owned or operated | item | 2 | 2 | ||
Canada | ||||
Business segment information by geographical areas | ||||
Number of parks owned or operated | item | 1 | 1 | ||
Domestic | ||||
Business segment information by geographical areas | ||||
Long-lived assets | $ 2,361,622 | 2,171,503 | $ 2,361,622 | 2,171,503 |
Revenues | 1,138,640 | 1,101,836 | ||
Loss before income taxes | 284,868 | 274,811 | ||
Foreign | ||||
Business segment information by geographical areas | ||||
Long-lived assets | $ 136,120 | $ 104,029 | 136,120 | 104,029 |
Revenues | 87,943 | 92,368 | ||
Loss before income taxes | $ 16,749 | $ 21,268 |
Pension Benefits (Details)
Pension Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net periodic benefit cost: | ||||
Service cost | $ 313 | $ 250 | $ 988 | $ 1,050 |
Interest cost | 1,995 | 1,844 | 5,999 | 5,542 |
Expected return on plan assets | (3,318) | (3,431) | (9,979) | (10,307) |
Amortization of net actuarial loss | 205 | 182 | 589 | 540 |
Total net periodic benefit | $ (805) | $ (1,155) | $ (2,403) | $ (3,175) |
Weighted average assumptions used to determine net cost | ||||
Discount rate | 4.05% | 3.45% | 4.05% | 3.45% |
Expected return on plan assets | 7.25% | 7.25% | 7.25% | 7.25% |
Employer contributions | $ 6,000 | $ 6,000 |
Stock Repurchase Plans (Details
Stock Repurchase Plans (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 28 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jul. 19, 2019 | Mar. 30, 2017 | |
Equity, Class of Treasury Stock | ||||||
Value of shares repurchased | $ 48 | $ 46 | $ 52 | $ 80,992 | ||
March 2017 Stock Repurchase Plan | ||||||
Equity, Class of Treasury Stock | ||||||
Amount authorized of shares to be repurchased under Stock Repurchase Program | $ 500,000 | |||||
Total number of shares purchased (in shares) | 4,604 | |||||
Value of shares repurchased | $ 268,300 | |||||
Shares acquired, average cost (in dollars per share) | $ 58.27 | |||||
Permitted dollar value of repurchases remaining | $ 231,700 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event - Second Amended and Restated Term Loan B - USD ($) $ in Millions | Oct. 18, 2019 | Oct. 17, 2019 |
Subsequent Event [Line Items] | ||
Basis spread reduction | 0.25% | |
Annual interest cost savings from borrowing rate reduction | $ 2 | |
LIBOR | ||
Subsequent Event [Line Items] | ||
Basis spread on variable rate | 1.75% | 2.00% |