Six Flags Entertainment Corporation/NEW 10-Q

ITEM 1. FINANCIAL STATEMENTS SIX FLAGS ENTERTAINMENT CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) September 29, 2024 December 31, 2023 September 24, 2023 ASSETS Current assets: Cash and cash equivalents $ 89,705 $ 65,488 $ 134,394 Receivables 201,653 79,513 88,256 Inventories 89,842 41,048 51,531 Other current assets 75,761 22,791 31,127 456,961 208,840 305,308 Property and equipment, gross 7,526,470 4,004,195 3,956,079 Accumulated depreciation ( 2,547,454 ) ( 2,368,862 ) ( 2,342,275 ) Property and equipment, net 4,979,016 1,635,333 1,613,804 Goodwill 2,786,109 264,625 263,557 Other intangibles, net 898,662 49,062 48,883 Right-of-use assets 236,286 81,173 84,799 Other assets 12,192 1,500 2,252 $ 9,369,226 $ 2,240,533 $ 2,318,603 LIABILITIES AND EQUITY Current liabilities: Current maturities of long-term debt $ 210,000 $ — $ — Accounts payable 120,351 37,595 56,145 Deferred revenue 330,945 183,689 186,175 Accrued interest 95,367 32,587 49,268 Accrued taxes 74,368 45,296 44,867 Accrued salaries, wages and benefits 49,890 37,421 38,167 Self-insurance reserves 124,618 30,784 29,176 Other accrued liabilities 135,072 35,354 42,659 1,140,611 402,726 446,457 Deferred tax liabilities 476,292 63,403 66,167 Lease liabilities 236,810 71,951 74,957 Other liabilities 53,743 9,964 23,830 Long-term debt: Revolving credit loans 139,080 — — Term debt 976,622 — — Notes 3,458,805 2,275,451 2,272,961 4,574,507 2,275,451 2,272,961 Commitments and contingencies ( Note 1 ) Redeemable non-controlling interests 545,685 — — Equity: Former Cedar Fair, L.P. Partners’ Deficit: Special L.P. interests — 5,290 5,290 General partner — ( 6 ) ( 6 ) Limited partners, 51,013 and 51,017 units outstanding as of December 31, 2023 and September 24, 2023, respectively — ( 602,947 ) ( 586,074 ) Six Flags Entertainment Corporation Stockholders' Equity: Common stock, 100,275 shares outstanding as of September 29, 2024 1,003 — — Additional paid-in-capital 2,215,647 — — Retained earnings 110,966 — — Accumulated other comprehensive income 13,962 14,701 15,021 2,341,578 ( 582,962 ) ( 565,769 ) $ 9,369,226 $ 2,240,533 $ 2,318,603 The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements. 3 Table of Contents SIX FLAGS ENTERTAINMENT CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (In thousands, except per share and per unit amounts) Three months ended Nine months ended September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023 Net revenues: Admissions $ 716,684 $ 430,952 $ 1,043,375 $ 725,367 Food, merchandise and games 436,781 281,546 685,663 493,274 Accommodations, extra-charge products and other 194,920 129,511 292,578 208,904 1,348,385 842,009 2,021,616 1,427,545 Costs and expenses: Cost of food, merchandise, and games revenues 109,890 70,072 174,759 129,085 Operating expenses 575,032 332,559 999,159 739,216 Selling, general and administrative 209,260 64,799 322,518 141,405 Depreciation and amortization 144,560 65,936 211,887 127,711 Loss on retirement of fixed assets, net 4,671 2,018 11,406 12,779 Loss on impairment of goodwill 42,462 — 42,462 — 1,085,875 535,384 1,762,191 1,150,196 Operating income 262,510 306,625 259,425 277,349 Interest expense, net 81,742 35,296 155,903 104,099 Loss on early debt extinguishment 2,063 — 7,974 — Other (income) expense, net ( 101 ) 5,162 6,862 ( 1,508 ) Income before taxes 178,806 266,167 88,686 174,758 Provision for taxes 43,341 50,673 31,135 40,246 Net income 135,465 215,494 57,551 134,512 Net income attributable to non-controlling interests 24,499 — 24,499 — Net income attributable to Six Flags Entertainment Corporation $ 110,966 $ 215,494 $ 33,052 $ 134,512 Net income $ 135,465 $ 215,494 $ 57,551 $ 134,512 Other comprehensive income, (net of tax): Foreign currency translation ( 1,060 ) 584 ( 1,076 ) ( 588 ) Defined benefit retirement plan 337 — 337 — Other comprehensive (loss) income, (net of tax) ( 723 ) 584 ( 739 ) ( 588 ) Comprehensive income 134,742 216,078 56,812 133,924 Comprehensive income attributable to non-controlling interests 24,499 — 24,499 — Comprehensive income attributable to Six Flags Entertainment Corporation $ 110,243 $ 216,078 $ 32,313 $ 133,924 Weighted average common shares / LP units outstanding (See Note 11 ) Basic 99,741 50,668 67,072 51,064 Diluted 100,988 51,150 67,999 51,587 Income attributable to Six Flags Entertainment Corporation per average common share / LP unit outstanding ( See N ote 1 1 ) Net income per common share / LP unit - basic $ 1.11 $ 4.25 $ 0.49 $ 2.63 Net income per common share / LP unit - diluted $ 1.10 $ 4.21 $ 0.49 $ 2.61 The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements. 4 Table of Contents SIX FLAGS ENTERTAINMENT CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except per share and per unit amounts) For the three months ended Common Shares Outstanding Limited Partnership Units Outstanding Common Stock Additional Paid-in-Capital Retained Earnings Limited Partners’ Deficit General Partner’s Deficit Special L.P. Interests Accumulated Other Comprehensive Income (Loss) Total Equity Balance as of June 25, 2023 — 51,330 $ — $ — $ — $ ( 782,377 ) $ ( 8 ) $ 5,290 $ 14,437 $ ( 762,658 ) Net income attributable to Six Flags Entertainment Corporation — — — — — 215,492 2 — — 215,494 Repurchase of limited partnership units — ( 315 ) — — — ( 12,038 ) — — — ( 12,038 ) Partnership distribution declared ($ 0.300 per unit) — — — — — ( 15,305 ) — — — ( 15,305 ) Equity-based compensation — 2 — — — 8,154 — — — 8,154 Foreign currency translation adjustment, net of tax $ 637 — — — — — — — — 584 584 Balance as of September 24, 2023 — 51,017 $ — $ — $ — $ ( 586,074 ) $ ( 6 ) $ 5,290 $ 15,021 $ ( 565,769 ) Balance as of June 30, 2024 — 51,243 $ — $ — $ — $ ( 702,046 ) $ ( 7 ) $ 5,290 $ 14,685 $ ( 682,078 ) Net income attributable to Six Flags Entertainment Corporation — — — — 110,966 — — — — 110,966 Equity-based compensation 40 7 — 35,439 — — — — — 35,439 Foreign currency translation adjustment, net of tax $( 143 ) — — — — — — — — ( 1,060 ) ( 1,060 ) Defined benefit retirement plan, net of tax $( 113 ) — — — — — — — — 337 337 Effect of Mergers 48,922 — 489 2,550,736 — — — — — 2,551,225 LP conversion to corporation 51,313 ( 51,250 ) 514 ( 370,528 ) — 702,046 7 ( 5,290 ) — 326,749 Balance as of September 29, 2024 100,275 — $ 1,003 $ 2,215,647 $ 110,966 $ — $ — $ — $ 13,962 $ 2,341,578 The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of this statement. 5 Table of Contents SIX FLAGS ENTERTAINMENT CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except per unit amounts) For the nine months ended Common Shares Outstanding Limited Partnership Units Outstanding Common Stock Additional Paid-in-Capital Retained Earnings Limited Partners’ Deficit General Partner’s Deficit Special L.P. Interests Accumulated Other Comprehensive Income (Loss) Total Equity Balance as of December 31, 2022 — 52,563 $ — $ — $ — $ ( 612,497 ) $ ( 4 ) $ 5,290 $ 15,609 $ ( 591,602 ) Net income attributable to Six Flags Entertainment Corporation — — — — — 134,511 1 — — 134,512 Repurchase of limited partnership units — ( 1,735 ) — — — ( 74,534 ) ( 3 ) — — ( 74,537 ) Partnership distribution declared ($ 0.900 per unit) — — — — — ( 46,275 ) — — — ( 46,275 ) Equity-based compensation — 189 — — — 12,976 — — — 12,976 Tax effect of units involved in treasury unit transactions — — — — — ( 255 ) — — — ( 255 ) Foreign currency translation adjustment, net of tax $ 62 — — — — — — — — ( 588 ) ( 588 ) Balance as of September 24, 2023 — 51,017 $ — $ — $ — $ ( 586,074 ) $ ( 6 ) $ 5,290 $ 15,021 $ ( 565,769 ) Balance as of December 31, 2023 — 51,013 $ — $ — $ — $ ( 602,947 ) $ ( 6 ) $ 5,290 $ 14,701 $ ( 582,962 ) Net income attributable to Six Flags Entertainment Corporation — — — — 110,966 ( 77,913 ) ( 1 ) — — 33,052 Partnership distribution declared ($ 0.600 per unit) — — — — — ( 30,764 ) — — — ( 30,764 ) Equity-based compensation 40 237 — 35,439 — 9,730 — — — 45,169 Tax effect of units involved in treasury unit transactions — — — — — ( 152 ) — — — ( 152 ) Foreign currency translation adjustment, net of tax $ 987 — — — — — — — — ( 1,076 ) ( 1,076 ) Defined benefit retirement plan, net of tax $( 113 ) — — — — — — — — 337 337 Effect of Mergers 48,922 — 489 2,550,736 — — — — — 2,551,225 LP conversion to corporation 51,313 ( 51,250 ) 514 ( 370,528 ) — 702,046 7 ( 5,290 ) — 326,749 Balance as of September 29, 2024 100,275 — $ 1,003 $ 2,215,647 $ 110,966 $ — $ — $ — $ 13,962 $ 2,341,578 The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of this statement. 6 Table of Contents SIX FLAGS ENTERTAINMENT CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Nine months ended September 29, 2024 September 24, 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 57,551 $ 134,512 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 211,887 127,711 Loss on early debt extinguishment 7,974 — Loss on impairment of goodwill 42,462 — Non-cash foreign currency loss (gain) on USD notes 5,821 ( 1,950 ) Non-cash equity based compensation expense 53,362 15,841 Deferred income tax benefit ( 9,201 ) ( 3,245 ) Other non-cash expenses 12,859 16,442 Changes in assets and liabilities: (Increase) decrease in receivables ( 38,124 ) ( 17,287 ) (Increase) decrease in inventories ( 8,557 ) ( 9,615 ) (Increase) decrease in other assets 8,522 4,049 Increase (decrease) in accounts payable 4,918 4,559 Increase (decrease) in deferred revenue ( 37,251 ) 35,359 Increase (decrease) in accrued interest 39,353 17,095 Increase (decrease) in accrued taxes 13,988 8,682 Increase (decrease) in accrued salaries, wages and benefits ( 6,381 ) ( 15,184 ) Increase (decrease) in self-insurance reserves 18,207 1,401 Increase (decrease) in other liabilities 28,593 11,648 Net cash from operating activities 405,983 330,018 CASH FLOWS FOR INVESTING ACTIVITIES Capital expenditures ( 227,620 ) ( 169,579 ) Mergers, net of cash acquired ( 151,085 ) — Net cash for investing activities ( 378,705 ) ( 169,579 ) CASH FLOWS FOR FINANCING ACTIVITIES Net borrowings on revolving credit loans 156,000 — Term debt borrowings 1,000,000 — Note payments ( 1,056,867 ) — Repurchase of limited partnership units — ( 74,537 ) Distributions paid to partners ( 30,764 ) ( 46,275 ) Payment of debt issuance costs ( 34,679 ) ( 2,643 ) Payments related to tax withholding for equity compensation ( 4,689 ) ( 2,865 ) Distributions to non-controlling interests ( 24,499 ) — Other ( 5,668 ) ( 255 ) Net cash for financing activities ( 1,166 ) ( 126,575 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS ( 1,895 ) ( 659 ) CASH AND CASH EQUIVALENTS Net increase for the period 24,217 33,205 Balance, beginning of period 65,488 101,189 Balance, end of period $ 89,705 $ 134,394 SUPPLEMENTAL INFORMATION Cash payments for interest $ 155,294 $ 84,094 Interest capitalized 3,399 3,017 Net cash payments for income taxes 30,672 39,308 Capital expenditures in accounts payable 17,809 11,545 The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements. 7 Table of Contents SIX FLAGS ENTERTAINMENT CORPORATION INDEX FOR NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 Description of the Business and Significant Accounting Policies 9 Note 2 Mergers 11 Note 3 Revenue Recognition 15 Note 4 Long-Lived Assets 16 Note 5 Goodwill and Other Intangible Assets 16 Note 6 Long-Term Debt 18 Note 7 Non-Controlling Interests 20 Note 8 Income and Partnership Taxes 22 Note 9 Partners' Equity 23 Note 10 Pension Benefits 24 Note 11 Earnings Per Share 24 Note 12 Fair Value Measurements 25 Note 13 Segments 26 8 Table of Contents SIX FLAGS ENTERTAINMENT CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The accompanying unaudited condensed consolidated financial statements have been prepared from the financial records of the Combined Company. The Mergers are accounted for as a business combination under Accounting Standards Codification 805, Business Combinations , using the acquisition method of accounting, and Former Cedar Fair has been determined to be the accounting acquirer and the predecessor for financial statement purposes. Accordingly, financial results and disclosures referring to periods prior to the Closing Date include only Former Cedar Fair's results before giving effect to the Mergers, including the financial statements as of December 31, 2023 and September 24, 2023 and for the three and nine months ended September 24, 2023. The results of Former Six Flags are included in the Combined Company's results from the Closing Date forward. Accordingly, financial results and disclosures for the three months ended September 29, 2024 reflect the Combined Company's operations. Financial results for the nine months ended September 29, 2024 reflect combined operations for only July 1, 2024, through September 29, 2024, and include only Former Cedar Fair's results before giving effect to the Mergers for the first six months of 2024. References to the "Combined Company" and the "Company" are to Former Cedar Fair, Former Six Flags and Copper Merger Sub after giving effect to the Mergers. References to "Cedar Fair," "Former Cedar Fair, or the "Partnership" are to Cedar Fair prior to the Mergers. The Mergers are described in more detail in Note 2 . The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to fairly present the results of the interim periods covered in this report. Due to the seasonal nature of the amusement and water park operations, the results for any interim period may not be indicative of the results expected for the full fiscal year. (1) Description of the Business and Significant Accounting Policies: The unaudited condensed consolidated financial statements included in this Report on Form 10-Q have been prepared in accordance with the accounting policies described in the Notes to Consolidated Financial Statements for the year ended December 31, 2023, which were included in the Form 10-K filed by Cedar Fair on February 16, 2024. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission" or the "SEC"). These financial statements should be read in conjunction with the financial statements and the notes included in the Form 10-K referred to above. Interim Reporting The Combined Company's operations are seasonal. In a typical year at Former Cedar Fair and Former Six Flags, approximately 70 % of annual attendance and net revenues occurred during the second and third quarters of each year. As a result, a substantial portion of the Combined Company's net revenues are expected to be generated from Memorial Day through Labor Day with the major portion concentrated during the peak vacation months of July and August. To assure that these seasonal operations will not result in misleading comparisons of current and subsequent interim periods, management has adopted the following accounting procedures: (a) revenues from multi-use products are recognized over the estimated number of uses expected for each type of product; and the estimated number of uses is reviewed and may be updated periodically during the operating season prior to the ticket or product expiration, which generally occurs no later than the close of the operating season associated with each product; (b) certain seasonal operating costs are expensed over each park’s operating season, including some costs incurred prior to the season, which are deferred and amortized over the season; and (c) all other costs are expensed as incurred or ratably over the entire year. Business Combination Business combinations are accounted for under the acquisition method of accounting. The amounts assigned to the identifiable assets acquired and liabilities assumed in connection with acquisitions are based on estimated fair values as of the date of the acquisition, with the remainder, if any, recorded as goodwill. The fair values are determined by management, taking into consideration information supplied by the management of the acquired entities, valuations supplied by independent appraisal experts and other relevant information. The determination of fair values requires significant judgment by management. During the measurement period, which may be up to one year from the acquisition date, adjustments to the assets acquired and liabilities assumed may be recorded with the corresponding offset to goodwill. Upon the measurement period's conclusion or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the condensed consolidated statement of operations and comprehensive income. Acquisition-related expenses are recognized separately from the business combination and expensed as incurred. Accounting Change Former Cedar Fair recognized depreciation expense on a straight-line basis for each annual period but followed an accounting convention in interim periods to record depreciation expense over each park's operating season. Beginning on July 1, 2024, the Combined Company changed its interim basis of recording depreciation from park operating days to straight-line. This method was deemed to be preferable to improve internal comparability, achieve better industry comparability and provide a better representation of the impact on the value of fixed assets over time. 9 Table of Contents This change in interim depreciation method led to a decrease in depreciation expense of approximately $ 19 million resulting in an increase in income from continuing operations and a tax effected impact on net income of approximately $ 14 million ($ 0.14 per share) for the three months ended September 29, 2024. The change in interim depreciation method will have no impact on annual operating income or net income. Reclassifications As a result of the Mergers (described in Note 2 ), the Combined Company made certain reclassification adjustments to prior period amounts where it adopted the Former Six Flags classification as opposed to the Former Cedar Fair classification. These reclassifications had no net impact on net revenues, operating income, net income, cash flows, or total assets, liabilities and equity. – Certain prior year supplies inventory amounts of $ 3.0 million as of December 31, 2023 and $ 3.4 million as of September 24, 2023 have been reclassified from "Inventories" to "Other current assets" in the unaudited condensed consolidated balance sheets to conform with the Combined Company presentation. – Certain processing fees charged to customers totaling $ 13.0 million for the three months ended September 24, 2023 and $ 25.4 million for the nine months ended September 24, 2023 have been reclassified from "Accommodations, extra-charge products and other" to "Admissions" in the unaudited condensed consolidated statements of operations and comprehensive income. In addition, the amounts were also reclassified from out-of-park revenues to in-park revenues as defined within Management's Discussion and Analysis and as disclosed within the Revenue Recognition footnote. – Certain expenses, including credit card fees, other revenue processing fees, and park level technology and marketing costs, totaling $ 31.1 million for the three months ended September 24, 2023 and $ 68.0 million for the nine months ended September 24, 2023 have been reclassified from "Selling, general and administrative" to "Operating expenses" in the unaudited condensed consolidated statements of operations and comprehensive income. – Interest income totaling $ 0.8 million for the three months ended September 24, 2023 and $ 1.5 million for the nine months ended September 24, 2023 have been reclassified from "Other (income) expense, net" to "Interest expense, net" in the unaudited condensed consolidated statements of operations and comprehensive income. Contingencies The Combined Company is a party to a number of lawsuits in the normal course of business. In the opinion of management, none of these matters, beyond what has been disclosed in this Quarterly Report on Form 10-Q, are expected to have a material effect in the aggregate on the unaudited condensed consolidated financial statements. Putative Securities Class Action Lawsuit During the third quarter of 2024, the Combined Company entered into a settlement agreement, subject to court approval, resolving the Putative Securities Class Action Lawsuit described below. The Combined Company will pay $ 40.0 million to settle the claims, an amount that will be fully funded by the Combined Company’s insurance carriers. Therefore, the Combined Company's unaudited condensed consolidated balance sheet as of September 29, 2024 included a $ 40.0 million receivable and a corresponding $ 40.0 million liability recorded within "Other accrued liabilities". In February 2020, two putative securities class action complaints were filed against Former Six Flags and certain of its former executive officers (collectively, the “defendants”) in the U.S. District Court for the Northern District of Texas. On March 2, 2020, the two cases were consolidated in an action captioned Electrical Workers Pension Fund Local 103 I.B.E.W. v. Six Flags Entertainment Corp., et al. , Case No. 4:20-cv-00201-P (N.D. Tex.) (the “Electrical Workers litigation”), and an amended complaint was filed on March 20, 2020. On May 8, 2020, Oklahoma Firefighters Pension and Retirement System (“Oklahoma Firefighters”) and Electrical Workers Pension Fund Local 103 I.B.E.W. were appointed as lead plaintiffs, Bernstein Litowitz Berger & Grossman LLP was appointed as lead counsel, and McKool Smith PC was appointed as liaison counsel. On July 2, 2020, lead plaintiffs filed a consolidated complaint. The consolidated complaint alleges, among other things, that the defendants made materially false or misleading statements or omissions regarding Former Six Flags' business, operations and growth prospects, specifically with respect to the development of its Six Flags branded parks in China and the financial health of its former partner, Riverside Investment Group Co. Ltd., in violation of the federal securities laws. The consolidated complaint seeks an unspecified amount of compensatory damages and other relief on behalf of a putative class of purchasers of Former Six Flags’ publicly traded common stock during the period between April 24, 2018 and February 19, 2020. On August 3, 2020, defendants filed a motion to dismiss the consolidated complaint. On March 3, 2021, the district court granted defendants’ motion, dismissing the complaint in its entirety and with prejudice. On August 25, 2021, Co-Lead Plaintiff Oklahoma Firefighters filed a notice of appeal to the U.S. Court of Appeals for the Fifth Circuit (“the Fifth Circuit”) from the district court’s decisions granting defendants’ motion to dismiss, denying plaintiffs’ motion to amend or set aside judgment, and denying plaintiffs’ motion for leave to file a supplemental brief. The appeal was fully briefed as of December 15, 2021, and oral argument was held on March 7, 2022. On January 18, 2023, the Fifth Circuit reversed the dismissal and remanded the case to the district court for further proceedings. On February 9, 2023, the Fifth Circuit mandate issued to the district court. On March 7, 2023, the district court entered a scheduling order governing pre-trial proceedings. On 10 Table of Contents April 18, 2023, Oklahoma Firefighters filed a motion for leave to file an amended complaint that would add a new named plaintiff, remove former Co-Lead Plaintiff Electrical Workers Pension Fund Local 103 I.B.E.W., and modify the case caption. On May 2, 2023, defendants filed an opposition to that motion and a motion for judgment on the pleadings. On June 2, 2023, the district court granted defendants’ motion for judgment on the pleadings, dismissing the case with prejudice, and denied Oklahoma Firefighters’ motions. On June 30, 2023, plaintiffs filed a notice of appeal to the Fifth Circuit from the district court’s decisions. The appeal was fully briefed as of December 4, 2023, and oral argument was held on March 4, 2024. On April 18, 2024, the Fifth Circuit reversed the dismissal and remanded the case to the district court. On May 31, 2024, the district court entered a scheduling order setting the case for trial on December 8, 2025. On September 3, 2024, the parties entered into a settlement agreement, subject to court approval, resolving the claims. The Combined Company will pay $ 40.0 million to settle the claims, an amount that will be fully funded by the Combined Company’s insurance carriers. On September 23, 2024, the District Court granted the plaintiffs’ motion for preliminary approval of the settlement and scheduled a final fairness hearing for January 25, 2025. Securities and Exchange Commission Investigation The Securities and Exchange Commission is conducting an investigation into Former Six Flags' disclosures and reporting made in 2018 through February 2020 related to its business, operations and growth prospects of its Six Flags branded parks in China and the financial health of its former business partner, Riverside Investment Group Co. Ltd. Former Six Flags received a document subpoena in February 2020 and subsequently certain current and former executives received subpoenas in connection with this matter and they continue to provide responsive information. The involved parties are fully cooperating and are committed to continuing to cooperate fully with the SEC in this matter. The length, scope or results of the investigation, or the impact, of the investigation on results of operations, business or financial condition cannot be predicted. Self-Insurance Reserves As disclosed in the Form 10-K filed by Former Cedar Fair on February 16, 2024, the Combined Company records self-insurance reserves for the estimated amount of guest and employee claims and related expenses incurred each period. During the third quarter of 2024, an actuarial analysis of Former Cedar Fair's self-insurance reserves resulted in a change in estimate that increased the incurred but not reported ("IBNR") reserves related to these self-insurance reserves by $ 14.9 million, which was recorded within "Operating expenses" in the unaudited condensed consolidated statements of operations and comprehensive income. The increase was driven by an observed pattern of increasing litigation and settlement costs. New Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 requires the disclosure of incremental segment information on an annual and interim basis, including the disclosure of significant segment expense categories. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. Management is in the process of evaluating the effect this standard will have on the consolidated financial statement disclosures. In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires additional income tax disclosures, including amendments to the rate reconciliation and income taxes paid disclosure. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied on a prospective basis, but retrospective application is permitted. Management is in the process of evaluating the effect this standard will have on the consolidated financial statement disclosures. (2) Mergers: On July 1, 2024, the previously announced merger of equals transaction contemplated by the Merger Agreement, by and among the Combined Company, Cedar Fair, Former Six Flags and Copper Merger Sub, was completed. Upon the consummation of the Mergers, the separate legal existences of each of Copper Merger Sub, Cedar Fair and Former Six Flags ceased, and the Combined Company changed its name to “Six Flags Entertainment Corporation”. The Combined Company trades on the New York Stock Exchange under the ticker symbol "FUN". The Mergers were entered into to create a leading amusement park operator with an expanded and diversified property portfolio, improved guest experience utilizing the complementary operating capabilities of Cedar Fair and Former Six Flags, and the opportunity for accelerated investment in the Cedar Fair and Former Six Flags properties with the cash flows of the Combined Company. The Mergers have been accounted for as a business combination under Accounting Standards Codification 805, Business Combinations , using the acquisition method of accounting, and Cedar Fair has been determined to be the accounting acquirer. Upon completion of the Mergers, subject to certain exceptions, (i) each issued and outstanding unit of limited partnership interest in Cedar Fair, including limited partnership interests underlying depositary units representing limited partnership interests on deposit (each a “Cedar Fair Unit” and collectively, the “Cedar Fair Units”) (excluding any (a) units held in the treasury of Cedar Fair or owned by Cedar Fair Management, Inc., the general partner of Cedar Fair (“Cedar Fair General Partner”) and (b) restricted units of Cedar Fair, which were converted into restricted shares of Combined Company Common Stock based on the 11 Table of Contents Cedar Fair Exchange Ratio, as further described below), was converted into the right to receive one ( 1 ) share of common stock, par value $ 0.01 per share, of the Combined Company (the “Combined Company Common Stock”) (the “Cedar Fair Exchange Ratio”), together with cash in lieu of fractional shares of Combined Company Common Stock, without interest and (ii) each issued and outstanding share of common stock, par value $ 0.025 per share of Former Six Flags (the “Six Flags Common Stock”) (excluding any (a) shares of Six Flags Common Stock held in treasury of Former Six Flags and (b) restricted shares of Former Six Flags, which were converted into restricted shares of Combined Company Common Stock based on the Former Six Flags Exchange Ratio, as further described below), was converted into the right to receive 0.5800 shares of Combined Company Common Stock (the “Six Flags Exchange Ratio”), together with cash in lieu of fractional shares of Combined Company Common Stock, without interest. Following the close of the transaction, the holders of the Cedar Fair Units immediately prior to the closing owned approximately 51.2 % of the outstanding shares of the Combined Company Common Stock and the holders of the Six Flags Common Stock immediately prior to the closing owned approximately 48.8 % of the outstanding shares of the Combined Company Common Stock. At the time of the Cedar Fair First Merger when each Cedar Fair Unit was converted into Combined Company Common Stock, the transaction gave rise to certain deferred tax assets which were accounted for as equity because management concluded the transaction to be amongst shareholders. The adjustment to equity was recorded within "Additional-Paid-in-Capital" and totaled $ 328.6 million. The following table illustrates the computation of the preliminary estimated fair value of consideration transferred. As part of the Mergers, Cedar Fair paid $ 205.2 million of outstanding borrowings under Former Six Flags' revolving credit facility, inclusive of interest and fees, and paid the $ 128.2 million Former Six Flags Special Dividend, which is further described below. (In thousands) Consideration Fair value of Combined Company Common Stock issued (1) $ 2,531,714 Former Six Flags revolving credit facility repaid upon close of the Mergers 205,169 Payment of outstanding pre-merger special dividend per the Merger Agreement 128,161 Fair value of Former Six Flags equity awards converted (2) 19,511 Fair value of purchase consideration transferred 2,884,555 Fair value of redeemable non-controlling interests (3) 545,685 Less: cash acquired 182,914 Total Merger Consideration, net of cash acquired $ 3,247,326 (1) Reflects Former Six Flags Common Stock outstanding as of July 1, 2024 converted to Combined Company Common Stock based upon the Six Flags Exchange Ratio. (2) Reflects the estimated Closing Date fair value of the converted Former Six Flags equity awards for which associated service has been allocated to the pre-combination period. (3) Reflects the fair value of Former Six Flags redeemable non-controlling interests as of the Closing Date. The fair value reflects the consideration that would have been received by the non-controlling interest holders if the Closing Date was also the redemption date for the non-controlling interests. 12 Table of Contents Merger Consideration was allocated to tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The following table summarizes the preliminary purchase price allocation of the assets acquired and liabilities assumed in the Mergers: (In thousands) Estimated Fair Value Receivables $ 84,853 Inventories 40,580 Other current assets 53,000 Property and equipment, net 3,356,409 Other intangibles, net 850,000 Right-of-use assets 167,074 Other assets 14,688 Total assets acquired 4,566,604 Current maturities of long-term debt 56,867 Accounts payable 73,445 Deferred revenue 206,398 Accrued interest 23,448 Accrued taxes 15,465 Accrued salaries, wages and benefits 19,216 Self-insurance reserves 75,670 Other accrued liabilities 63,487 Deferred tax liabilities 756,211 Lease liabilities 184,343 Other liabilities 24,497 Long-term debt 2,373,322 Total liabilities assumed 3,872,369 Total net assets to be acquired 694,235 Goodwill 2,553,091 Fair Value of Net Assets Acquired $ 3,247,326 The preliminary purchase price allocation is subject to any subsequent valuation adjustments within the measurement period. Management has not finalized the fair values of assets acquired and liabilities assumed. The estimated fair values of certain assets and liabilities including, but not limited to, property and equipment, the Six Flags trade name, self-insurance reserves, contingencies and deferred taxes require judgment and assumptions that increase the likelihood that adjustments may be made to these estimates during the measurement period, and those adjustments could be material. Goodwill is primarily attributable to expected synergies from combining the operations of Former Cedar Fair and Former Six Flags, as well as intangible assets that do not qualify for separate recognition. The majority of Goodwill is not deductible for tax purposes. Goodwill has been allocated to the Company's single reportable segment. The fair values of assets acquired includes accounts receivable of $ 84.9 million that are not purchased financial assets with credit deterioration. The Combined Company did not recognize an allowance with a corresponding credit loss expense for the acquired receivables during the period ended September 29, 2024. The allowance for doubtful accounts is recorded as a reduction of deferred revenue to the extent revenue has not been recognized on the corresponding season-long products. Former Six Flags contributed net revenues of $ 558.0 million and net income of $ 27.5 million to the Combined Company from the Closing Date, July 1, 2024, through September 29, 2024. The following unaudited pro forma financial information presents combined results of operations for each of the periods presented, as if the Mergers had occurred as of January 1, 2023, prepared in accordance with ASC 805. The information below reflects pro forma adjustments based on available information and certain assumptions that management believes are factual and supportable. The unaudited pro forma information includes adjustments primarily related to stock-based compensation expense, interest expense for transaction financing, amortization of deferred assets and liabilities, and depreciation of property, plant and equipment acquired, along with the consequential tax effects, and accounting policy alignments. The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of the consolidated results of operations of the combined business had the Mergers actually occurred as of January 1, 2023, or of the results of future operations of the combined business. 13 Table of Contents Pro Forma (Unaudited) Three Months Ended Nine Months Ended (In thousands) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023 Net revenues $ 1,348,385 $ 1,392,282 $ 2,597,662 $ 2,567,482 Net income (loss) $ 135,465 $ 262,284 $ ( 132,269 ) $ ( 62,361 ) During the three and nine months ended September 29, 2024, $ 55.5 million and $ 69.2 million, respectively, of merger transaction related costs were incurred. During the three and nine months ended September 24, 2023, $ 5.0 million of merger transaction related costs were incurred. These amounts included third-party legal and consulting costs related to the transaction and were recorded within "Selling, general and administrative" in the unaudited condensed consolidated statement of operations and comprehensive income. Special Dividend As previously announced by Former Six Flags, on June 18, 2024, Former Six Flags declared a special dividend, payable to holders of record of Former Six Flags Common Stock as of the close of business one business day prior to the Closing Date, June 28, 2024, with a per share amount of $ 1.53 , which is equal to (a) $ 1.00 plus (b) the product (rounded up to the nearest whole cent) of (i) the Six Flags Exchange Ratio and (ii) the aggregate amount of distributions per unit declared or paid by Cedar Fair with respect to a Cedar Fair Unit with a record date following November 2, 2023 and prior to the time the Six Flags Merger became effective (the “Closing Effective Time”) after giving effect to appropriate adjustments to reflect the Mergers (the “Special Dividend”), which distributions per Cedar Fair Unit were $ 0.90 in the aggregate. The payment of the Special Dividend was completed on or about July 8, 2024 and was included in Merger Consideration. Treatment of Equity Awards and Treasury Stock At the time the Cedar Fair First Merger became effective (the “Cedar Fair First Merger Effective Time”), each outstanding Cedar Fair equity award (other than each Cedar Fair deferred unit) was converted into a corresponding award relating to shares of Combined Company Common Stock, with the number of shares of Combined Company Common Stock subject to such converted award based on the Cedar Fair Exchange Ratio. The converted Cedar Fair equity awards remain outstanding and subject to the same terms and conditions applied under the Cedar Fair 2016 Omnibus Incentive Plan and the applicable award agreements immediately prior to the Cedar Fair First Merger Effective Time, including vesting protections for qualifying terminations that occur within a period of 24 months following the closing of the Mergers. Cedar Fair Performance Units were converted based on the higher of target performance and actual performance or, in the case of awards (or portion thereof) related to any performance period that would have begun after the Closing Effective Time, were converted based on target performance and will not be subject to future performance-based vesting conditions (but remain subject to service-based vesting conditions). Any outstanding Cedar Fair Deferred Units were settled at the First Cedar Fair Merger Effective Time in either cash or shares of Combined Company Common Stock in accordance with such terms. Each Cedar Fair Unit held (i) in the treasury of Cedar Fair or (ii) by the Cedar Fair General Partner, in each case, immediately prior to the Cedar Fair First Merger Effective Time, was canceled and retired and ceases to exist, and no consideration was delivered in exchange therefor. At the Closing Effective Time, generally and other than as provided in certain employment agreements entered into in connection with the Mergers, each Former Six Flags equity award was converted into a corresponding award relating to shares of Combined Company Common Stock, with the number of shares of Combined Company Common Stock subject to such converted award based on the Six Flags Exchange Ratio. The converted Former Six Flags equity awards remain outstanding and subject to the same terms and conditions as applied under the Former Six Flags Long Term Incentive Plan and the applicable award agreements immediately prior to the Closing Effective Time (except that (i) performance-based awards were converted based on the higher of target and actual performance and will not be subject to future performance-based vesting conditions (but remain subject to service-based vesting conditions) and (ii) all converted awards are subject to vesting protections for qualifying terminations that occur within a period of 24 months following the Closing). Any Former Six Flags Deferred Share Unit Awards were settled at the time of the Closing Effective Time in shares of Combined Company Common Stock based on the Six Flags Exchange Ratio. Former Six Flags equity awards were eligible for payment of the Special Dividend; provided, that such amount will not be paid until such time as the underlying Former Six Flags equity award, as converted, becomes vested or settled pursuant to its terms (if at all). Each share of Six Flags Common Stock held in the treasury of Six Flags immediately prior to the Closing Effective Time, was canceled and retired and ceases to exist, and no consideration was delivered in exchange therefor. 14 Table of Contents 2024 Omnibus Incentive Plan The 2024 Omnibus Incentive Plan was adopted by CopperSteel HoldCo, Inc. and approved by CopperSteel HoldCo, Inc.'s stockholders prior to the Mergers, and is effective as of the Closing Date. The 2024 Omnibus Incentive Plan allows the Combined Company to award up to 8.0 million shares of Combined Company Common Stock as an element of compensation to any employee, officer, non-employee director, or consultant at the discretion of the People, Culture & Compensation Committee (the "Compensation Committee") of the Board of Directors. The types of awards available under the 2024 Omnibus Incentive Plan include stock options, stock appreciation rights, restricted stock awards, restricted stock units (including performance units), other awards and dividend equivalent rights. Outstanding awards under the Cedar Fair 2016 Omnibus Incentive Plan and the Former Six Flags Long Term Incentive Plan continue to be in effect and are governed by the terms of those plans, but no new awards may be issued under either legacy plan. The Compensation Committee approved certain awards of performance stock units ("PSUs") on August 20, 2024 under the 2024 Omnibus Incentive Plan. Each PSU represents a contingent right to receive one share of Combined Company Common Stock. Based on actual results, each executive will be eligible to receive between 0 % and 200 % of the target number of PSUs. The PSUs will be eligible to vest based on the attainment of specified Adjusted EBITDA performance goals by the Combined Company during the applicable performance period, which ends December 31, 2026, and subject to each executives' continued employment with the Combined Company through the determination date following the performance period. (3) Revenue Recognition: Revenues are generated from sales of (1) admission to amusement parks and water parks, (2) food, merchandise and games both inside and outside the parks, and (3) accommodations, extra-charge products, and other revenue sources. Admission revenues include amounts paid to gain admission into the parks, including parking fees, and online transaction fees charged to customers. Revenues related to extra-charge products, including premium benefit offerings such as front-of-line products, are included in "Accommodations, extra-charge products and other". The following table presents net revenues disaggregated by revenues generated within the parks and revenues generated from out-of-park operations less amounts remitted to outside parties under concessionaire arrangements for the periods presented. The results for the three and nine months ended September 29, 2024 include the results of the acquired Former Six Flags operations since the Closing Date of the Mergers (see Note 2 ). Certain prior period amounts have been reclassified from out-of-park revenues to in-park revenues following completion of the Mergers (see Note 1 . Reclassifications ). Three months ended Nine months ended (In thousands) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023 In-park revenues $ 1,284,875 $ 779,532 $ 1,894,766 $ 1,314,723 Out-of-park revenues 102,265 85,995 184,623 155,366 Concessionaire remittance ( 38,755 ) ( 23,518 ) ( 57,773 ) ( 42,544 ) Net revenues $ 1,348,385 $ 842,009 $ 2,021,616 $ 1,427,545 Due to the Combined Company's seasonal operations, a substantial portion of its revenues are generated from Memorial Day through Labor Day. Most revenues are recognized on a daily basis based on actual guest spend at the properties. Revenues from multi-use products, including season-long products for admission, dining, beverage and other products and the first 12-month period for membership products, are recognized over the estimated number of uses expected for each type of product. The estimated number of uses is reviewed and may be updated periodically during the operating season prior to the ticket or product expiration. The number of uses is estimated based on historical usage adjusted for current period trends. Membership products beginning with the 13th month following purchase are recognized straight-line. For any bundled products that include multiple performance obligations, revenue is allocated using the retail price of each distinct performance obligation and any inherent discounts are allocated based on the gross margin and expected redemption of each performance obligation. The Combined Company does not typically provide for refunds or returns. Sales and other taxes collected concurrent with revenue-producing activities are excluded from revenue. Many products, including season-long products, are sold to customers in advance, resulting in a contract liability ("deferred revenue"). Deferred revenue is typically at its highest immediately prior to the peak summer season, and at its lowest after the peak summer and important fall seasons. Season-long products, including memberships, represent most of the deferred revenue balance in any given period. Of the $ 183.7 million of current deferred revenue recorded as of January 1, 2024, 89 % was related to season-long products. The remainder was related to deferred online transaction fees charged to customers, advanced resort reservations, advanced ticket sales, prepaid games cards, marina deposits and other deferred revenue. Approximately $ 151 million of the current deferred revenue balance as of January 1, 2024 was recognized during the nine months ended September 29, 2024. As of September 29, 2024 and September 24, 2023, $ 28.3 million and $ 22.0 million of non-current deferred revenue was recorded, respectively. A portion of deferred revenue is typically classified as non-current during the third quarter related to 15 Table of Contents season-long products sold in the current season for use in the subsequent season. Season-long products are typically sold beginning in August of the year preceding the operating season. Season-long products may subsequently be recognized 12 to 16 months after purchase depending on the date of sale. The number of uses expected outside of the next twelve months for each type of product is estimated, and the related deferred revenue is classified as non-current within "Other Liabilities" in the unaudited condensed consolidated balance sheets. As of September 29, 2024 and September 24, 2023, $ 21.9 million and $ 13.6 million was recorded, respectively, related to the non-current portion of season-long products purchased for the subsequent operating season. The remaining non-current deferred revenue balances in the periods primarily represented prepaid lease payments for a portion of the California's Great America parking lot. The prepaid lease payments will be recognized through 2027, or through the sale-leaseback period for the land under California's Great America. Payment is due immediately on the transaction date for most products. The receivable balance includes outstanding amounts on installment purchase plans which are offered for season-long products, including memberships, and includes sales to retailers, group sales and catering activities which are billed. Installment purchase plans vary in length from three monthly installments to 12 monthly installments. Payment terms for billings are typically net 30 days. Receivables in a typical operating year are highest in the peak summer months and lowest in the winter months. The Combined Company is not exposed to a significant concentration of customer credit risk. As of September 29, 2024, December 31, 2023 and September 24, 2023, a $ 25.3 million, $ 6.3 million and $ 18.3 million allowance for doubtful accounts was recorded, respectively, representing estimated defaults on installment purchase plans. The default estimate is calculated using historical default rates adjusted for current period trends. The allowance for doubtful accounts is recorded as a reduction of deferred revenue to the extent revenue has not been recognized on the corresponding season-long products. (4) Long-Lived Assets: As of September 29, 2024, December 31, 2023, and September 24, 2023, property and equipment was classified as following: (In thousands) September 29, 2024 December 31, 2023 September 24, 2023 Land $ 811,590 $ 288,761 $ 287,353 Land improvements 1,053,899 523,336 518,365 Buildings 1,623,556 991,424 985,545 Rides and equipment 3,838,722 2,125,726 2,111,057 Construction in progress 198,703 74,948 53,759 Property and equipment, gross 7,526,470 4,004,195 3,956,079 Accumulated depreciation ( 2,547,454 ) ( 2,368,862 ) ( 2,342,275 ) Property and equipment, net $ 4,979,016 $ 1,635,333 $ 1,613,804 Property and equipment, net as of September 29, 2024 included $ 3.4 billion of Former Six Flags assets acquired on July 1, 2024 (see Note 2 ). Long-lived assets are reviewed for impairment upon the occurrence of events or changes in circumstances that would indicate that the carrying value of the assets may not be recoverable. In order to determine if an asset has been impaired, assets are grouped and tested at the lowest level for which identifiable, independent cash flows are available. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others: a significant decrease in the market price of a long-lived asset; a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition; a significant adverse change in legal factors or in the business climate; an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset; past, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset; and a current expectation that a long-lived asset will be sold or disposed significantly before the end of its previously estimated useful life. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on the unaudited condensed consolidated financial statements. During the third quarter of 2024, management tested the Schlitterbahn Waterpark & Resort New Braunfels and the Schlitterbahn Waterpark Galveston ("Schlitterbahn") long-lived assets for impairment due to a decline in estimated future cash flows as a result of shifting priorities following the Mergers. The analysis resulted in no impairment. Except for those losses on disposals or retirements of fixed assets recorded in the ordinary course of business, management concluded no other indicators of impairment of long-lived assets existed during the first nine months of 2024 and the first nine months of 2023. Management's conclusions were based on updated financial performance projections, as well as an updated analysis of macroeconomic and industry-specific conditions. (5) Goodwill and Other Intangible Assets: Goodwill and other indefinite-lived intangible assets, including trade names, are reviewed for impairment annually, or more frequently if indicators of impairment exist. During the third quarter of 2024, management tested the Schlitterbahn trade name and Schlitterbahn reporting unit's fair value due to a decline in estimated future cash flows as a result of shifting investment priorities at those locations following the Mergers. Management concluded the estimated fair value of goodwill at the Schlitterbahn reporting unit no longer exceeded its carrying value. Therefore, a $ 42.5 million impairment of the goodwill at the Schlitterbahn reporting unit was recorded during the third quarter of 2024. The impairment charge was equal to the amount by 16 Table of Contents which the carrying amount exceeded the fair value and was recorded in "Loss on impairment of goodwill" within the unaudited condensed consolidated statements of operations and comprehensive income. The trade name was deemed not to be impaired. Management concluded no other indicators of impairment existed during the first nine months of 2024, and no indicators of impairment existed during the first nine months of 2023. Management's conclusions were based on updated financial performance projections, as well as an updated analysis of macroeconomic and industry-specific conditions. The fair value of reporting units is established using a combination of an income (discounted cash flow) approach and market approach. The income approach uses each reporting unit's projection of estimated operating results and discounted cash flows using a weighted-average cost of capital that reflects current market conditions. Estimated operating results are established using best estimates of economic and market conditions over the projected period including growth rates in revenues and costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. The market approach estimates fair value by applying cash flow multiples to each reporting unit's operating performance. The multiples are derived from comparable publicly traded companies with similar operating and investment characteristics of the reporting units. Any impairment charges recognized are for the amount by which the reporting unit's carrying amount exceeds its fair value. The fair value of trade names is calculated using a relief-from-royalty method. Any impairment charges recognized are for the amount by which the trade name's carrying amount exceeds its fair value. Management makes significant estimates calculating the fair value of reporting units and trade names. Actual results could materially differ from these estimates. Changes in the carrying value of goodwill for the nine months ended September 29, 2024 and September 24, 2023 were: (In thousands) Gross Goodwill Accumulated Impairment Losses Net Goodwill Balance as of December 31, 2023 $ 438,422 $ ( 173,797 ) $ 264,625 Mergers ( Not e 2 ) 2,553,091 — 2,553,091 Impairment — ( 42,462 ) ( 42,462 ) Foreign currency translation 10,855 — 10,855 Balance as of September 29, 2024 $ 3,002,368 $ ( 216,259 ) $ 2,786,109 Balance as of December 31, 2022 $ 437,003 $ ( 173,797 ) $ 263,206 Foreign currency translation 351 — 351 Balance as of September 24, 2023 $ 437,354 $ ( 173,797 ) $ 263,557 As of September 29, 2024, December 31, 2023, and September 24, 2023, other intangible assets consisted of the following: (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Value September 29, 2024 Other intangible assets: Trade names (1) $ 898,647 $ ( 291 ) $ 898,356 License / franchise agreements 1,320 ( 1,014 ) 306 Total other intangible assets $ 899,967 $ ( 1,305 ) $ 898,662 December 31, 2023 Other intangible assets: Trade names (1) $ 48,934 $ ( 190 ) $ 48,744 License / franchise agreements 1,249 ( 931 ) 318 Total other intangible assets $ 50,183 $ ( 1,121 ) $ 49,062 September 24, 2023 Other intangible assets: Trade names (1) $ 48,697 $ ( 162 ) $ 48,535 License / franchise agreements 1,248 ( 900 ) 348 Total other intangible assets $ 49,945 $ ( 1,062 ) $ 48,883 Other intangible assets as of September 29, 2024 included $ 850.0 million for the Six Flags trade name acquired on July 1, 2024 (see Note 2 ). The Six Flags trade name is an indefinite-lived intangible asset. (1) Trade name amortization represents amortization of the California's Great America trade name. The gross carrying amount of the California's Great America trade name totals $ 0.7 million. Other trade names are indefinite-lived. 17 Table of Contents (6) Long-Term Debt: Long-term debt as of September 29, 2024, December 31, 2023, and September 24, 2023 consisted of the following: (In thousands) September 29, 2024 December 31, 2023 September 24, 2023 Revolving credit facility averaging 7.8 % YTD 2024 $ 156,000 $ — $ — Term loan averaging 7.3 % YTD 2024 1,000,000 — — Former Cedar Fair notes 2025 senior secured notes at 5.500 % — 1,000,000 1,000,000 2027 senior unsecured notes at 5.375 % 500,000 500,000 500,000 2028 senior unsecured notes at 6.500 % 300,000 300,000 300,000 2029 senior unsecured notes at 5.250 % 500,000 500,000 500,000 Former Six Flags notes (See Note 2 ) 2025 senior secured notes at 7.000 % 200,000 — — 2027 senior unsecured notes at 5.500 % 500,000 — — 2031 senior unsecured notes at 7.250 % 800,000 — — 2032 senior secured notes at 6.625 % 850,000 — — 4,806,000 2,300,000 2,300,000 Less current portion ( 210,000 ) — — 4,596,000 2,300,000 2,300,000 Less debt issuance costs and original issue discount ( 44,494 ) ( 24,549 ) ( 27,039 ) Plus acquisition fair value layers 23,001 — — $ 4,574,507 $ 2,275,451 $ 2,272,961 Term Debt and Revolving Credit Facilities On May 1, 2024, Former Cedar Fair entered into a new credit agreement (the "2024 Credit Agreement"), which includes a $ 1.0 billion senior secured term loan facility and included a $ 300 million revolving credit facility. The revolving credit facility replaced the existing revolving credit facility under Former Cedar Fair's prior credit agreement (the "2017 Credit Agreement"). Upon consummation of the Mergers, the 2024 Credit Agreement was assumed by the Combined Company, subsidiaries of Former Six Flags became borrowers and/or guarantors under the 2024 Credit Agreement, and the 2024 Credit Agreement was amended (the "First Amendment"). The facilities provided under the 2024 Credit Agreement are collateralized by substantially all of the assets of Former Cedar Fair, its wholly owned domestic subsidiaries and its Canadian subsidiary that is a borrower under the 2024 Credit Agreement, and the subsidiaries of Former Six Flags that are co-issuers and/or guarantors under the 2025 Six Notes (as defined below) and/or the 2032 Six Notes (as defined below), subject to customary exceptions set forth in the 2024 Credit Agreement, as amended. The senior secured term loan facility under the 2024 Credit Agreement, as amended, requires amortization payments of $ 10.0 million per year, payable in equal quarterly installments; matures on May 1, 2031; and bears interest at Term Secured Overnight Financing Rate ("SOFR") plus a margin of 200 basis points ("bps") per annum or base rate plus a margin of 100 bps per annum. Following the First Amendment, the revolving credit facility capacity under the 2024 Credit Agreement, as amended, is $ 850 million with a maturity date of July 1, 2029, subject to a springing maturity date on the date that is 91 days prior to the final maturity of certain indebtedness in an aggregate outstanding principal amount greater than $ 200 million on such date. The revolving credit facility bears interest at Term SOFR or Term Canadian Overnight Repo Rate Average plus a margin of 200 bps per annum, or base rate or Canadian prime rate plus a margin of 100 bps per annum; and requires a commitment fee of 50 bps per annum on the unused portion of the revolving credit facility, which is subject to decrease to 37.5 bps upon achievement of a 3.5 x Net First Lien Leverage Ratio (as defined in the 2024 Credit Agreement, as amended). Prior to the First Amendment, the then-existing revolving credit facility would have matured on February 10, 2028, subject to a springing maturity date on the date that was 91 days prior to the final maturity of certain indebtedness in an aggregate outstanding principal amount greater than $ 200 million on such date. There was $ 156.0 million of outstanding borrowings under the revolving credit facility as of September 29, 2024. The 2024 Credit Agreement, as amended, also provides for the issuance of documentary and standby letters of credit. After letters of credit of $ 40.9 million, the Combined Company had $ 653.1 million of availability under its revolving credit facility as of September 29, 2024. The total senior secured revolving credit facility capacity under the 2017 Credit Agreement was $ 300 million with a Canadian sub-limit of $ 15 million. The senior secured revolving credit facility bore interest at SOFR plus 350 bps with a SOFR adjustment of 10 bps per annum and a floor of zero , required the payment of a 62.5 bps commitment fee per annum on the unused portion of the revolving credit facility, in each case without any step-downs, and was collateralized by substantially all of the assets of the 18 Table of Contents Partnership. Under the 2017 Credit Agreement, the senior secured revolving credit facility would have matured on February 10, 2028, provided that the maturity date would have been (x) January 30, 2025 if at least $ 200 million of the 2025 senior notes remained outstanding as of that date, or (y) January 14, 2027 if at least $ 200 million of the 2027 senior notes remained outstanding as of that date. During 2022, Former Cedar Fair fully repaid the term loan facility under the 2017 Credit Agreement. Former Cedar Fair Notes In April 2017, Former Cedar Fair issued $ 500 million of 5.375 % senior unsecured notes due 2027 ("2027 senior notes"). Interest is payable under the 2027 senior notes semi-annually in April and October, with the principal due in full on April 15, 2027. The 2027 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. In June 2019, Former Cedar Fair issued $ 500 million of 5.250 % senior unsecured notes due 2029 ("2029 senior notes"). Interest is payable under the 2029 senior notes semi-annually in January and July, with the principal due in full on July 15, 2029. The 2029 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. In October 2020, Former Cedar Fair issued $ 300 million of 6.500 % senior unsecured notes due 2028 ("2028 senior notes"). Interest is payable under the 2028 senior notes semi-annually in April and October with the principal due in full on October 1, 2028. The 2028 senior notes may be redeemed, in whole or in part, at various prices depending on the date redeemed. In April 2020, Former Cedar Fair issued $ 1.0 billion of 5.500 % senior secured notes due 2025 ("2025 senior notes") in a private placement. The 2025 senior notes and the related guarantees were secured by first-priority liens on the issuers' and the guarantors' assets that secured all the obligations under the 2017 Credit Agreement. Interest was payable under the 2025 senior notes semi-annually in May and November, with the principal due in full on May 1, 2025. On May 2, 2024, the net proceeds from the new senior secured term loan facility under the 2024 Credit Agreement and cash on hand were used to redeem all of the 2025 senior notes. The redemption price was $ 1.0 billion in aggregate principal amount, plus accrued interest to the redemption date. As a result of the May 2024 refinancing, an $ 8.0 million loss on early debt extinguishment was recognized, inclusive of the write-off of debt issuance costs and the portion of a consent payment attributable to the 2025 senior notes. Substantially concurrently with the closing and in connection with the Mergers, the Combined Company entered into supplemental indentures to assume all of Former Cedar Fair's obligations under the indentures governing the 2027 senior notes, 2028 senior notes and 2029 senior notes (collectively, the "Cedar Fair Notes"). In addition, under the supplemental indentures for the Cedar Fair Notes, each of the Former Six Flags subsidiary guarantors under the 2024 Credit Agreement, as amended, agreed to fully and unconditionally guarantee the Cedar Fair Notes. Former Six Flags Notes Substantially concurrently with the closing and in connection with the Mergers, the Combined Company entered into supplemental indentures to assume all of Former Six Flags’ obligations under its outstanding notes, including: – $ 56.9 million of 4.875 % senior unsecured notes due July 2024 ("2024 Six Notes"). The Combined Company paid the remaining outstanding balance of the 2024 Six Notes on July 31, 2024. – $ 365.0 million of 7.000 % senior secured notes due 2025 ("2025 Six Notes"). Interest is payable under the 2025 Six Notes semi-annually in January and July, with the principal due in full on July 1, 2025. $ 165 million of the outstanding balance of the 2025 Six Notes was paid on July 1, 2024. – $ 500.0 million of 5.500 % senior unsecured notes due 2027 ("2027 Six Notes"). Interest is payable under the 2027 Six Notes semi-annually in April and October, with the principal due in full on April 15, 2027. – $ 800.0 million of 7.250 % senior unsecured notes due 2031 ("2031 Six Notes"). Interest is payable under the 2031 Six Notes semi-annually in May and November, with the principal due in full on May 15, 2031. – $ 850.0 million of 6.625 % senior secured notes due 2032 ("2032 Six Notes"). Interest is payable under the 2032 Six Notes semi-annually in May and November, with the principal due in full on May 1, 2032. Under the supplemental indenture to the 2032 Six Notes, each of the Cedar Fair co-issuers under the 2024 Credit Agreement became co-issuers of the 2032 Six Notes and each of the Cedar Fair subsidiary guarantors under the 2024 Credit Agreement became guarantors of the 2032 Six Notes. Under the supplemental indentures for all other Former Six Flags Notes, each of the Cedar Fair co-issuers and subsidiary guarantors under the 2024 Credit Agreement became guarantors of the 2024 Six Notes, 2025 Six Notes, 2027 Six Notes, and 2031 Six Notes. In connection with the execution of the supplemental indentures to the 2025 Six Notes and the 2032 Six Notes, each of the Cedar Fair subsidiary guarantors under the 2024 Credit Agreement (the "Cedar Fair Subsidiary Guarantors") also entered into certain security agreements, pursuant to which the Cedar Fair Subsidiary Guarantors granted a first priority security interest in substantially all of their assets (subject to certain exceptions) to secure the 2025 Six Notes and the 2032 Six Notes. 19 Table of Contents As market conditions warrant, the Combined Company may from time to time repurchase outstanding debt securities in privately negotiated or open market transactions, by tender offer, exchange offer or otherwise. Covenants With respect to the revolving credit facility only, the 2024 Credit Agreement, as amended, includes a maximum Net First Lien Leverage Ratio (as defined in the 2024 Credit Agreement) financial maintenance covenant, which is required to be tested as of the last day of each quarter except for the quarter in which the consummation of the Mergers occurred. The maximum Net First Lien Leverage Ratio following the consummation of the Mergers is 5.25 x beginning with the test period ending on or about December 31, 2024, with step-downs of 25 bps after every four consecutive quarters, culminating at 4.5 x beginning with the test period ending on or about December 31, 2027. The 2024 Credit Agreement, as amended, and fixed rate note agreements include restricted payment provisions, which could limit the Combined Company's ability to pay dividends. Under the 2024 Credit Agreement, as amended, if the pro forma Net Secured Leverage Ratio (as defined in the 2024 Credit Agreement) is less than or equal to 3.00 x, the Combined Company can make unlimited restricted payments so long as no event of default has occurred and is continuing. If the pro forma Net Total Leverage Ratio (as defined in the 2024 Credit Agreement) is less than or equal to 5.25 x, the Combined Company can make restricted payments up to the then-available Cumulative Credit (as defined in the 2024 Credit Agreement), so long as no event of default has occurred and is continuing. Irrespective of any leverage calculations, the Combined Company can make restricted payments not to exceed the greater of 7.0 % of Market Capitalization (as defined in the 2024 Credit Agreement) and $ 200 million annually. Pursuant to the terms of the indenture governing the 2027 senior notes, which includes the most restrictive of the restricted payments provisions under the terms of the Combined Company's outstanding notes, even if the pro forma Total Indebtedness to Consolidated Cash Flow Ratio (as defined in the indenture governing the 2027 senior notes) is greater than 5.25 x, the Combined Company can still make restricted payments of $ 100 million annually so long as no default or event of default has occurred and is continuing. If the pro forma Total Indebtedness to Consolidated Cash Flow Ratio is less than or equal to 5.25 x, the Combined Company can make restricted payments up to its restricted payment pool so long as no default or event of default has occurred and is continuing or would occur as a consequence thereof. The Combined Company's pro forma Total Indebtedness to Consolidated Cash Flow Ratio was less than 5.25 x as of September 29, 2024. On November 9, 2023, Cedar Fair entered into supplemental indentures related to the 2025 senior notes, 2027 senior notes, 2028 senior notes and 2029 senior notes (the "Amendments") following receipt of requisite consents from the holders of the notes. The Amendments enabled Cedar Fair to select November 2, 2023, the date the Merger Agreement with Former Six Flags was entered into, as the testing date for purposes of calculating, with respect to the Mergers and related transactions, any and all ratio tests under those notes, each of which was satisfied when tested on November 2, 2023. To become operative, the Amendments required a payment, which was made upon the consummation of the Mergers. The payment related to the 2025 senior notes was still required despite the redemption of those notes in May 2024. (7) Non-Controlling Interests Substantially concurrently with the closing and in connection with the Mergers, the Combined Company assumed certain obligations regarding Six Flags Over Georgia, including Six Flags White Water Atlanta ("SFOG"), and Six Flags Over Texas ("SFOT"), and together with SFOG (the "Partnership Parks"). The Partnership Parks are not wholly owned, but the Partnership Parks are consolidated as subsidiaries in the consolidated financial statements as it has been determined that the Combined Company has the power to direct the activities of those entities that most significantly impact the entities' economic performance, and the Combined Company has the obligation to absorb losses and receive benefits from the entities that can be potentially significant to these entities. The equity interests owned by non-affiliated parties in the Partnership Parks are reflected in the unaudited condensed consolidated balance sheet as redeemable non-controlling interests. The portion of earnings or loss attributable to non-affiliated parties in the Partnership Parks is reflected as net income attributable to non-controlling interests in the unaudited condensed consolidated statements of operations and comprehensive income. Obligations related to the Partnership Parks continue until 2027, in the case of SFOG, and 2028, in the case of SFOT. Such obligations include: (i) Minimum annual distributions of approximately $ 88.5 million in 2024 (subject to cost of living adjustments) to the limited partners of the partnership entities (the "Georgia Partnership" with respect to SFOG and the "Texas Partnership" with respect to SFOT) that own the Partnership Parks. Based on the Combined Company's ownership of units as of September 29, 2024, the Combined Company's share of the distribution will be approximately $ 39.5 million. When combined with the minimum annual distributions incurred by Former Six Flags, the total minimum annual distributions for 2024 totaled $ 88.5 million . (ii) Minimum capital expenditures at each of the Partnership Parks during rolling five-year periods, based generally on 6.00 % of the Partnership Parks’ revenues. The capital expenditures at the Partnership Parks is expected to be in excess of the minimum required expenditures for 2024 and was in excess of the minimum required expenditures for 2023. (iii) An annual offer to purchase all outstanding limited partnership units at the Specified Price (defined below) to the extent tendered by the unitholders, which annual offer must remain open from March 31 through late April of each year, and any limited partnership interest tendered during such time period must be fully paid no later than May 15th of that year (the "Partnership 20 Table of Contents Park Put"). The Combined Company is required to repurchase such limited partnership units through May 15, 2026 in the case of the Georgia Partnership and May 15, 2027 in the case of the Texas Partnership. As the Combined Company purchases additional units, it is entitled to a proportionate increase in its share of the minimum annual distributions. As part of the 2024 annual offering, Former Six Flags purchased 0.269 limited partnership units of the Georgia Partnership for $ 1.1 million and 0.005 units of the Texas Partnership for a nominal amount. 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. In light of the temporary suspension of operations of the parks due to the COVID-19 pandemic in March 2020, which would have caused the specified price of the limited partnership units of the Partnership Parks to decrease in 2021 and thereafter, Former Six Flags adjusted the annual offer to purchase these units to set a minimum price floor for all future purchases. Pursuant to the new minimum price floor, the Specified Price for the Partnership Parks, if determined as of September 29, 2024, is $ 409.7 million in the case of SFOG and $ 527.4 million in the case of SFOT. As of September 29, 2024, the Combined Company owned approximately 31.8 % and 54.1 % of the Georgia limited partner interests and Texas limited partner interests, respectively. The remaining redeemable units of approximatel y 68.2 % and 45.9 % of the Georgia limited partner interests and Texas limited partner interests, respectively, represent a current redemption value of approximately $ 545.7 million . The obligations with respect to SFOG and SFOT will continue until 2027 and 2028, respectively. (iv) Either (a) purchasing all of the outstanding limited partnership interests in the Partnership Parks through the exercise of a call option upon the earlier of the occurrence of specified events and the end of the term of the partnership that hold the Partnership Parks in 2027 in the case of SFOG and 2028 in the case of SFOT, or (b) causing each of the partnerships that hold the Partnership Parks to have no indebtedness and to meet certain other financial tests as of the end of the term of such partnership. In January 2027 with respect to the Georgia Partnership and in January 2028 with respect to the Texas Partnership, the Combined Company will have the option (each the "End-of-Term Option") to require the redemption of all the limited partnership units that the Combined Company does not then own in the Partnerships. To exercise the End-of-Term Option, the Combined Company must give the Georgia Partnership notice of its exercise no later than December 31, 2024, and the Combined Company must give the Texas Partnership notice of its exercise no later than December 31, 2025. If the End-of-Term Option is not exercised, the parties may decide to renew and extend the arrangements relating to the Partnership Parks. Alternatively, if the End-of-Term Option is not exercised, the Partnership Park entities may be sold and the proceeds applied to redeem the outstanding interests in the Georgia Partnership and Texas Partnership, as applicable. If the End-of-Term Option is exercised, the price offered, and required to be accepted by the holders' of the limited units that the Combined Company does not then own, is based on the agreed upon value of the partnerships included in the original agreements, multiplied by the change in the Consumer Price Index ("CPI") between the beginning and end of the agreement. The agreements for the Georgia Partnership and Texas Partnership began in 1997 and 1998, respectively. The agreed-upon value for the partnerships when the agreements were executed was $ 250.0 million and $ 374.8 million for SFOG and SFOT, respectively. As of December 31, 2023, the agreed-upon value, as adjusted for CPI, would be $ 483.5 million and $ 712.7 million for SFOG and SFOT, respectively. The agreed-upon values, if determined as of December 31, 2023, multiplied by the 68.5 % and 45.9 % of units held by the limited partner for SFOG and SFOT respectively, represent $ 332.6 million and $ 330.9 million that would be required to be paid to the limited partner of SFOG and SFOT, respectively if the End-of-Option Term were to be exercised. The actual agreed upon value of the End-of-Term Option will be further adjusted by CPI until the end of each respective agreement. The decision to exercise, or not exercise, the End-of-Term Option for either of SFOG or SFOT will ultimately be made based on numerous factors, including prevailing macro-economic and industry conditions and the cost and availability of financing to fund the purchase. Cash flows from operations at the Partnership Parks are used to satisfy the above requirements before any funds are required from the Combined Company. After the payment of the minimum distribution, the Combined Company is entitled to a management fee equal to 3 % of prior year gross revenues and, thereafter, any additional cash is distributed first to any management fee in arrears and then towards the repayment of any interest and principal on intercompany loans. Any additional cash, to the extent available, is distributed 95 % to the Combined Company in the case of SFOG and 92.5 % to the Combined Company in the case of SFOT. The Partnership Parks generated approximately $ 16.0 million of cash in 2023, after deduction of capital expenditures and excluding the impact of short-term intercompany advances from or payments to Former Six Flags. Former Six Flags entered into a Subordinated Indemnity Agreement with certain of the Combined 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, Former Six Flags transferred to Time Warner (which has guaranteed all of the obligations under the Partnership Park arrangements) record title to the corporations that own the entities that purchase limited partnership units of the Partnership Parks, and Former Six Flags received an assignment from Time Warner of all cash flow received on such limited partnership units, and the Combined Company otherwise controls such entities. In addition, Former Six Flags issued preferred stock of the managing partner of the partnerships to Time Warner. In the event of default by the Combined Company under the Subordinated Indemnity Agreement or of the Combined Company's obligations to the 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 the Combined Company satisfies all such obligations, Time Warner is required to transfer to the Combined 21 Table of Contents Company the entire equity interests of these entities at the end of the term, which is 2027 for the Georgia Partnership and 2028 for the Texas Partnership. Redeemable non-controlling interests represent the non-affiliated parties’ share of the assets of the Partnership Parks that are less than wholly-owned: SFOG and Six Flags White Water Atlanta, which is owned by the partnership that owns SFOG, and SFOT. As of September 29, 2024, redeemable non-controlling interests of the Georgia Partnership and the Texas Partnership were $ 291.6 million and $ 254.1 million, respectively. Changes in the carrying value of redeemable non-controlling interests for the nine months ended September 29, 2024 were: (In thousands) SFOG SFOT Total Balance as of December 31, 2023 $ — $ — $ — Mergers ( N ote 2 ) 291,628 254,057 545,685 Purchase of redeemable units — — — Net income attributable to non-controlling interests 12,258 12,241 24,499 Distributions to non-controlling interests ( 12,258 ) ( 12,241 ) ( 24,499 ) Balance as of September 29, 2024 $ 291,628 $ 254,057 $ 545,685 The redemption value of the non-controlling partnership units of the Georgia Partnership and of the Texas Partnership as of September 29, 2024 was approximately $ 279.4 million and $ 241.8 million, respectively. (8) Income and Partnership Taxes: Income tax expense was $ 43.3 million and $ 31.1 million for the three and nine months ended September 29, 2024, respectively, and $ 50.7 million and $ 40.2 million for the three and nine months ended September 24, 2023 , respectively. The effective tax rate for the three and nine months ended September 29, 2024 was 24.2 % and 35.1 % , respectively, and 19.0 % and 23.0 % for the three and nine months ended September 24, 2023. The effective tax rate for the three and nine months ended September 29, 2024 differed from the United States Federal statutory rate of 21% for pre-merger publicly traded partnership tax ("PTP tax"), partnership income or loss not subject to corporate income tax, non-deductible executive compensation, state and local income taxes and tax rate differences in foreign jurisdictions. For the three and nine months ended September 29, 2024, the Combined Company also recognized discrete tax benefits for the change in tax status associated with the Mergers discussed in Note 2 , primarily related to recognition of certain deferred tax assets, offset by certain adjustments to account for non-deductible executive compensation. Prior to the Mergers, Former Cedar Fair was subject to PTP tax on certain partnership level gross income (net revenues less cost of food, merchandise, and games revenues), state and local income taxes on partnership income, U.S. federal, state and local income taxes on income from its corporate subsidiaries and foreign income taxes on its foreign subsidiary. As such, the total provision (benefit) for taxes prior to the Mergers includes amounts for the PTP tax and federal, state, local and foreign income taxes. The Partnership (Cedar Fair, L.P.) ceased to exist in connection with the Mergers. Following the completion of the Mergers, the Combined Company is subject to U.S. federal income taxes in addition to state and local income taxes as a corporation. This subjects all domestic and Canadian branch earnings (losses) before the provision for income taxes to a U.S. statutory rate of 21% and all earnings (losses) before provision of income taxes derived from operations in Mexico and Canada to their respective statutory rates of 30% and 26.5%. Under applicable accounting rules, the total provision (benefit) for income taxes includes the amount of taxes payable for the current year and the impact of deferred tax assets and liabilities, which represents future tax consequences of events that are recognized in different periods in the financial statements than for tax purposes. The total tax provision (benefit) for interim periods is determined by applying an estimated annual effective tax rate to the applicable quarterly income (loss). The consolidated estimated annual effective tax rate differed from the statutory federal income tax rate primarily due to state, local and foreign income taxes, certain nondeductible executive compensation and the effect of the partnership distributions for the Six Flags Over Georgia Partnership and Six Flags Over Texas Partnership. Unrecognized tax benefits, including accrued interest and penalties, were not material in any period presented. Interest and penalties related to unrecognized tax benefits are recognized as income tax expense. Valuation allowances have been recorded on certain deferred tax assets due to uncertainties related to the ability to use some of the deferred tax assets. The valuation is based on estimates of taxable income by jurisdiction and the period over which the deferred tax assets are recoverable. Projected taxable income over the foreseeable future indicates all of the federal net operating loss carryforwards will be able to be used prior to expiration. The majority of the remaining valuation allowance is based on the inability to use foreign tax credits and state deferred tax assets related to net operating losses that were generated in states where the Combined Company no longer does business or where the Combined Company has consistently not generated taxable income. Management does not believe that the Mergers will have a significant effect on the ability to use net operating losses. 22 Table of Contents Management analyzes its ability to use foreign tax credits based on the most probable outcome for future foreign sourced income. Based on that analysis, management has determined that it is more likely than not that some of the foreign tax credits will not be fully utilized and have established a valuation allowance. The Inflation Reduction Act was signed into law on August 16, 2022 and created a new 15% corporate alternative minimum tax ("CAMT") based on adjusted financial statement income. The effective date of the provision was January 1, 2023. The Combined Company will not be subject to CAMT as its reported earnings for each of the past three years did not exceed $1 billion. On June 20, 2024, the Canadian government enacted Pillar Two legislation that includes the Income Inclusion Rule and Qualified Domestic Minimum Top-Up Tax (as defined in the Global Minimum Tax Act). The Pillar Two legislation requires multi-national entities to pay taxes of at least 15% in each jurisdiction in which they have operations. The Canadian legislation is effective for the fiscal year beginning January 1, 2024. Management performed an assessment of the potential exposure to Pillar Two income taxes related to the Combined Company. This assessment was based on the most recent information available regarding the financial performance of the constituent entities. Management considered the applicable tax law changes on Pillar Two implementation in the relevant countries, and there was no material impact to the Combined Company tax provision for the nine months ended September 29, 2024. The Combined Company will continue to evaluate the impact of these tax law changes on future reporting periods. (9) Partners' Equity: On August 3, 2022, Former Cedar Fair announced that the Board of Directors of its general partner approved a unit repurchase program authorizing the Partnership to repurchase units for an aggregate amount of not more than $ 250 million. There were 1.4 million limited partnership units repurchased under the August 2022 repurchase program during the nine months ended September 24, 2023 at an average price of $ 44.00 per limited partner unit for an aggregate amount of $ 62.5 million. There was no remaining availability under the August 2022 repurchase program following the repurchase of units under that program during April 2023. Accordingly, there were no limited partnership units repurchased under the August 2022 repurchase program during the three months ended September 24, 2023. On May 4, 2023, Former Cedar Fair announced that the Board of Directors of its general partner authorized the Partnership to repurchase additional units for an aggregate amount of not more than $ 250 million. There were 0.3 million units repurchased under the May 2023 repurchase program during the three and nine months ended September 24, 2023 at an average price of $ 38.27 per limited partner unit for an aggregate amount of $ 12.0 million. Accordingly, there was a total of 1.7 million units repurchased under the August 2022 and May 2023 repurchase programs during the nine months ended September 24, 2023 at an average price of $ 42.97 per limited partner unit for an aggregate amount of $ 74.5 million. There were no units repurchased during the nine months ended September 29, 2024 under either program. Subject to applicable rules and regulations, Former Cedar Fair could have repurchased units from time-to-time in the open market or by negotiated transactions. The amount and timing of such repurchases were based on a variety of factors, including liquidity, capital needs of the business, market conditions, regulatory requirements, and other business considerations. No limit was placed on the duration of either repurchase program. The Partnership was not obligated to repurchase any minimum dollar amount or specific number of units, and could modify, suspend, or discontinue the program at any time. There are no repurchase programs outstanding related to the Combined Company following the Mergers. 23 Table of Contents (10) Pension Benefits: Substantially concurrently with the closing and in connection with the Mergers, the Combined Company assumed the obligations of the Former Six Flags pension plan. Former Six Flags froze its pension plan effective March 31, 2006, and effective February 16, 2009, the remaining participants in the pension plan no longer earned future benefits. The following summarizes pension costs and the weighted-average assumptions used to determine net cost for the three months ended September 29, 2024. The components of net periodic expense (benefit) were included in "Other (income) expense, net" in the unaudited condensed consolidated statements of operations and comprehensive income. Neither Former Six Flags nor the Combined Company made any pension contributions during the three or nine month periods ended September 29, 2024 and September 24, 2023. Three months ended (In thousands) September 29, 2024 Interest cost $ 1,959 Expected return on plan assets ( 2,280 ) Amortization of net actuarial loss — Administrative fees 225 Total net periodic expense (benefit) $ ( 96 ) Discount rate 5.25 % Rate of compensation increase N/A Expected return on plan assets 5.75 % (11) Earnings per Share: Earnings per common share for the three and nine month periods ended September 29, 2024 and earnings per limited partner unit for the three and nine month periods ended September 24, 2023 were calculated based on the following amounts: Three months ended Nine months ended (In thousands, except per share amounts) September 29, 2024 September 24, 2023 September 29, 2024 September 24, 2023 Net income attributable to Six Flags Entertainment Corporation 110,966 215,494 33,052 134,512 Basic weighted average common shares / LP units outstanding 99,741 50,668 67,072 51,064 Effect of dilutive awards: Deferred stock units — 51 41 50 Performance stock units — — 96 — Restricted stock units 1,247 431 790 473 Diluted weighted average common shares / LP units outstanding 100,988 51,150 67,999 51,587 Net income per common shares / LP units - basic $ 1.11 $ 4.25 $ 0.49 $ 2.63 Net income per common shares / LP units - diluted $ 1.10 $ 4.21 $ 0.49 $ 2.61 There were approximately 0.8 million potentially dilutive units excluded from the computation of diluted net income per common share for the three and nine months ended September 29, 2024 as their effect would have been anti-dilutive. 24 Table of Contents (12) Fair Value Measurements: The table below presents the balances of assets and liabilities measured at fair value as of September 29, 2024, December 31, 2023, and September 24, 2023 on a recurring basis as well as the fair values of other financial instruments, including their locations within the unaudited condensed consolidated balance sheets: (In thousands) Balance Sheet Location Fair Value Hierarchy Level September 29, 2024 December 31, 2023 September 24, 2023 Carrying Value Fair Value Carrying Value Fair Value Carrying Value Fair Value Financial assets (liabilities) measured on a recurring basis: Short-term investments Other current assets Level 1 $ 304 $ 304 $ 319 $ 319 $ 338 $ 338 Other financial assets (liabilities): Term debt Long-Term Debt (1) Level 2 $ ( 1,000,000 ) $ ( 999,750 ) — — — — 2025 notes at 5.500 % Long-Term Debt (1) Level 2 — — $ ( 1,000,000 ) $ ( 996,250 ) $ ( 1,000,000 ) $ ( 980,000 ) 2027 notes at 5.375 % Long-Term Debt (1) Level 1 $ ( 500,000 ) $ ( 498,610 ) $ ( 500,000 ) $ ( 490,000 ) $ ( 500,000 ) $ ( 470,000 ) 2028 notes at 6.500 % Long-Term Debt (1) Level 1 $ ( 300,000 ) $ ( 304,383 ) $ ( 300,000 ) $ ( 298,125 ) $ ( 300,000 ) $ ( 286,500 ) 2029 notes at 5.250 % Long-Term Debt (1) Level 1 $ ( 500,000 ) $ ( 491,750 ) $ ( 500,000 ) $ ( 472,500 ) $ ( 500,000 ) $ ( 440,000 ) 2025 notes at 7.000 % Long-Term Debt (1) Level 2 $ ( 200,000 ) $ ( 206,624 ) — — — — 2027 notes at 5.500 % Long-Term Debt (1) Level 2 $ ( 500,000 ) $ ( 497,225 ) — — — — 2031 notes at 7.250 % Long-Term Debt (1) Level 2 $ ( 800,000 ) $ ( 830,504 ) — — — — 2032 notes at 6.625 % Long-Term Debt (1) Level 2 $ ( 850,000 ) $ ( 879,750 ) — — — — (1) Carrying values of long-term debt balances are before reductions for (1) current maturities of long-term debt of $ 210.0 million as of September 29, 2024; (2) debt issuance costs and original issue discount of $ 44.5 million, $ 24.5 million and $ 27.0 million as of September 29, 2024, December 31, 2023 and September 24, 2023, respectively; and (3) acquisition fair value layers of $ 23.0 million as of September 29, 2024. During the third quarter of 2024, management tested the Schlitterbahn reporting unit's fair value due to a decline in estimated future cash flows as a result of shifting investment priorities at those locations following the Mergers. Management concluded the estimated fair value of goodwill at the Schlitterbahn reporting unit no longer exceeded its carrying value. Therefore, a $ 42.5 million impairment of the goodwill at the Schlitterbahn reporting unit was recorded during the third quarter of 2024. The impairment charge was equal to the amount by which the carrying amount exceeded the fair value and was recorded in "Loss on impairment of goodwill" within the unaudited condensed consolidated statements of operations and comprehensive income. The fair value of reporting units is established using a combination of an income (discounted cash flow) approach and market approach and includes numerous assumptions based on Level 3 inputs. The primary assumptions used to determine the fair value of reporting units includes growth rates in revenues and costs, estimates of future expected changes in operating margins and cash expenditures, terminal value growth rates, future estimates of capital expenditures, changes in future capital requirements, and a weighted-average cost of capital that reflected current market conditions. The carrying value of cash and cash equivalents, revolving credit loans, accounts receivable, accounts payable, and accrued liabilities approximates fair value because of the short maturity of these instruments. There were no other assets measured at fair value on a non-recurring basis as of September 29, 2024, December 31, 2023 or September 24, 2023. The net plan asset for the Former Six Flags pension plan will be measured at fair value annually. 25 Table of Contents (13) Segments: Each of the Combined Company's parks are overseen by a general manager and operate autonomously. Management reviews operating results, evaluates performance and makes operating decisions, including allocating resources, on a park-by-park basis. Discrete financial information and operating results are prepared at the individual park level for use by the CEO, who is the Chief Operating Decision Maker (CODM), as well as by the Chief Financial Officer, the Chief Operating Officer, Senior Vice Presidents and the general managers of the parks. Substantially all of the parks provide similar products and services through a similar process to the same class of customer utilizing a consistent method. In addition, the parks share common economic characteristics. Based on these factors, the Combined Company operates within a single reportable segment of amusement/water parks with accompanying resort facilities. All of the Combined Company's parks are located in the United States with the exception of two parks in Mexico and two parks in Canada. The Combined Company also recognizes revenue and expense related to the development of a Six Flags-branded park outside of North America. These management fees are disclosed as "Domestic" within the below tables. Prior to the Mergers, Former Cedar Fair did not disclose geographic segment related information as it had only one foreign park, and management believed disclosure of a single park's results provided sensitive information to its competitors. As a result, the below information only includes results since the Closing Date of the Mergers. As of September 29, 2024, long-lived assets (which consists of property and equipment, goodwill, intangible assets and right-of-use assets) by domestic and foreign properties was as follows: (In thousands) September 29, 2024 Domestic $ 8,509,518 Foreign 390,555 Total $ 8,900,073 For the three months ended September 29, 2024, net revenues and income before taxes by domestic and foreign properties were as follows: Three months ended (In thousands) September 29, 2024 Net revenues Domestic $ 1,210,449 Foreign 137,936 Total $ 1,348,385 Income before taxes Domestic $ 128,734 Foreign 50,072 Total $ 178,806 26 Table of Contents