-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NMonKcunLcln5zJDdOci/5BBaVQ2kQjFfqPveCUuwbVIYiIXS1CkYcZDgsyoqLcT ZwIQ2n+0gfTg57dzk6Dj6Q== 0000914121-06-002443.txt : 20060721 0000914121-06-002443.hdr.sgml : 20060721 20060721144838 ACCESSION NUMBER: 0000914121-06-002443 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060721 ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060721 DATE AS OF CHANGE: 20060721 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIX FLAGS INC CENTRAL INDEX KEY: 0000701374 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 736137714 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13703 FILM NUMBER: 06973966 BUSINESS ADDRESS: STREET 1: 11501 NE EXPWY CITY: OKLAHOMA CITY STATE: OK ZIP: 73131 BUSINESS PHONE: 4054752500 MAIL ADDRESS: STREET 1: 122 EAST 42ND STREET 49TH STREET CITY: NEW YORK STATE: NY ZIP: 10168 FORMER COMPANY: FORMER CONFORMED NAME: TIERCO GROUP INC/DE/ DATE OF NAME CHANGE: 19920703 8-K 1 si732420-8k.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION PLACECITYWASHINGTON, STATEDC POSTALCODE20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) July 21, 2006 -------------------------------- Six Flags, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Delaware - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-13703 13-3995059 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 1540 Broadway; 15th Floor New York, New York 10036 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (212) 652-9403 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 7.01 Regulation FD Disclosure. As previously announced on June 22, 2006, Six Flags, Inc. (the "Company") has entered into discussions with the agent bank under its credit agreement in order to seek amendments to certain of the financial covenants contained in the Company's credit agreement. A copy of the Company's presentation to lenders is furnished as Exhibit 99.1 This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. Item 9.01 Financial Statements and Exhibits. --------------------------------- (d) Exhibits 99.1 Presentation to Lenders SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SIX FLAGS, INC. By: /s/ James M. Coughlin ----------------------------------------- Name: James M. Coughlin Title: Vice President and General Counsel Date: July 21, 2006 EXHIBIT INDEX Paper (P) or Exhibit No. Description Electronic (E) - ------------- ----------------------------------------------- ------------------ 99.1 Presentation to Lenders E EX-99.1 2 si732420-ex99_1.txt PRESENTATION TO LENDERS EXHIBIT 99.1 STRICTLY CONFIDENTIAL Presentation to Lenders [GRAPHIC OMITTED] JULY 2006 [SIX FLAGS LOGO] Review of Q1 2006 Results - ------------------------- o Attendance decreased 23% to 1.15 million in Q1 2006 from 1.50 million in Q1 2005, partly due to timing differences of 2006 season vs. 2005 season - Q1 2005 benefited from Easter vacation period and 19 more operating days (10% more than Q1'06) o Total revenue per capita up $4.13, or 13%, over Q1 2005 to $37.13 o Revenue of $42.7 million, down $6.8 million, or 14% from Q1 2005 o Adjusted EBITDA decreased to ($87.6) million from ($70.1) million in Q1 2005 (on a historically comparable basis) - Excludes $11.6 million of non-recurring expenses related to senior management and corporate strategy changes in Q1 2006 Six Flags' Summary Financial Performance (Q1 2006) (Amounts in millions, except per capita revenue) Q1 2005 Q1 2006 ------- ------- Attendance 1.50 1.15 Total Revenue Per Capita $33.00 $37.13 Revenue $49.5 $42.7 "As Reported" Adjusted EBITDA ($67.8) ($97.0) Discontinued Operations (2.4) (2.2) Management / Strategy Change Expenses - 11.6 ------ ------ Adjusted EBITDA (Historically Comparable Basis) ($70.1) ($87.6) [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 2 Operating Performance Through June 18th (1) - ------------------------------------------- o Attendance down 13%, or 1.3 million from prior year - Driven primarily by anticipated decline in season pass sales (~550,000) - Attendance also negatively impacted by particular circumstances: o Season-long closure of New Orleans park (~200,000) o Reduced visits to Mexico City park by school groups (~150,000) o Reduced marketing expenditures, late opening of new rides, and poor weather on the East Coast in May / June (~400,000) o Per capita guest spending up 14%, or $4.12 per capita over prior year - Driven by increased spending on tickets, food, parking, merchandise and games - Reflects strategic shift from teens to family demographics o Revenue down 1%, or $3.2 million, compared to prior year - 13% decrease in attendance offset by 14% increase in per capita guest spending - --------------------------- (1) Includes operations of parks classified as Discontinued Operations. [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 3 Update on Key Initiatives for 2006 - ---------------------------------- o Continue to drive revenue performance primarily through increased per capita guest spending - While lower YTD attendance reveals that replacing low-spending teens with higher per capita families will take time, increased guest spending YTD is encouraging - New management is focused on improving operations and rebuilding trust with families to bring them back to the new Six Flags o Accelerate operational improvements by increasing cash operating expenses by $15 million above prior guidance (to ~$60 million above pro forma 2005) - Long-term investment in operations to improve Six Flags' brand equity and enhance guest experience, resulting in increased attendance and guest spending o Grow sponsorship revenue from $19 million to $29 million - New sponsorships signed include Papa John's and Home Depot [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 4 Guest Satisfaction is Increasing - -------------------------------- Results of June 2006 guest survey (1) : o Highest scores in the last five years in the following categories: - Variety of things to do, character presence and non-stop entertainment in the park - Feeling of overall safety and ride safety - Employee service, speed of ride lines and food quality - Park beauty, park cleanliness and restroom cleanliness - Overall visit / experience o Strong response in the following areas: - 96% of guests will or definitely will recommend the parks to a friend - 92% of guests will or definitely will visit again this year or next - 93% of guests agree or strongly agree that "My experience was worth the money" - --------------------------- (1) Survey of approximately 4,800 guests at 17 Six Flags parks, conducted by Delta Market Research of Hatboro, Pennsylvania. [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 5 Asset Sale Progress to Date - --------------------------- Since March 2006, the Company has achieved several objectives o Sold land underlying AstroWorld park in Houston for $77 million o Agreed to sell assets of Columbus, OH water park for $2 million at end of lease term (Oct. 31, 2006) o Exercised right to terminate lease of Sacramento water park following 2006 season and entered into discussions to sell rides and attractions at that park o Announced plans to sell two Oklahoma parks and received multiple bids on these parks that the Company is still evaluating o Actively marketing certain parcels of land at parks in Gurnee, IL and Eureka, MO [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 6 Additional Asset Sale Opportunities - ----------------------------------- Following a comprehensive review, Six Flags will explore potential strategic options with respect to six of its properties o Darien Lake (outside Buffalo, NY), Waterworld (Concord, CA), Elitch Gardens (Denver, CO), Wild Waves and Enchanted Village (outside Seattle, WA), Splashtown (Houston, TX), Magic Mountain and Hurricane Harbor (near Los Angeles, CA) o Combined, these parks represented ~25% of 2005 Adjusted EBITDA (i.e., ~$75 million), providing a significant source of potential cash proceeds o While the Company cannot predict the timing of any potential transaction (or transactions), it will seek to aggressively maximize value for all stakeholders and reduce leverage [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 7 Capital Structure Overview as of 3/31/06 - ---------------------------------------- ---------------------------------------- Six Flags, Inc. ("SFI") - ------------------------------| NYSE: SIX Owns interests in Six Flags | Over Texas (38%) and Six Flags| o $288 mm 7.250% PIERS due 2009 Over Georgia (25%) | ("Partnership Parks") |====> o $299 mm 4.500% Convertible Senior | Notes due 2015 General and Limited | Partnership Units | o $300 mm 8.875% Senior Notes due 2010 - ------------------------------| o $388 mm 9.750% Senior Notes due 2013 o $504 mm 9.625% Senior Notes due 2014 ---------------------------------------- | | 100% owned \/ ---------------------------------------- Six Flags Operations Inc. ("SFO") ---------------------------------------- | | 100% owned \/ ---------------------------------------- Six Flags Theme Parks Inc. ("SFTP") - -------------------------------- Owns (directly and indirectly) | Senior Secured Credit Facility all parks excluding the | Partnership Parks (SF Over Texas|===> o W/C Revolver due 6/30/08 ($300 mm and SF Over Georgia) which are | commitment, $190 mm drawn as of owned by SFI | 3/31/06) - --------------------------------| o Reducing Revolver due 6/30/08 ($82.5 mm commitment, undrawn) o $644 mm Term Loan B due 6/30/09 ---------------------------------------- - --------------------------- Note: Not pro forma for use of proceeds from Houston land sale. [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 8 Liquidity Position - ------------------ As of March 31, 2006 Six Flags, Inc. ("SFI") Six Flags Operations, Inc. ("SFO") ----------------------- ---------------------------------- o $10.4 million in cash(1) o $7.5 million in cash o No significant maturities at SFI o $159.8 million in revolver until end of 2009 availability(2) o No significant maturities at SFO until 2008 o Liquidity position enhanced by recent sale of land underlying Houston AstroWorld site for $77 million - --------------------------- (1) Consolidated cash balance. (2) Excludes letters of credit in the amount of $32.7 million. [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 9 SFO Cap Summary/Credit Ratios - -----------------------------
Capitalization Summary Credit Ratios ---------------------- ------------- Actual Actual ($ in millions) 3/31/2006(1) ($ in millions) 3/31/2006 ------------ --------- Cash $7.5 LTM Adj. EBITDA(2) $263.2 Total Debt / LTM Adj. EBITDA 3.17x Debt Position Net Debt / LTM Adj. EBITDA 3.14x W/C Revolver $190.0 LTM Adj. EBITDA / Interest Expense 4.66x Term Loan B 643.5 LTM Adj. EBITDA / Fixed Charges(3) 1.08x Other 1.1 Total Debt / Total Book Capitalization 32.1% ------------ Total Debt (Avg. Revolver) / LTM Adj. EBITDA(4) 2.87x Total Debt $834.7 Net Debt (Avg. Revolver) / LTM Adj. EBITDA 2.84x Net Debt $827.2
- ------------------------------- Source: SEC filings, SFO 3/31/06 Consolidated Financial Statements and SFO 3/31/06 Loan Compliance Certificate. (1) Not pro forma for use of proceeds from Houston land sale. (2) Includes results of AstroWorld, which was closed following the 2005 season. (3) Fixed Charges includes SFO debt service, sustaining capex ($28.8mm LTM as of 3/31/06) and Restricted Payments, based on 3/31/06 SFO Loan Compliance Certificate. (4) Total Debt (Avg. Revolver) equals Total Debt (other than Revolving Credit Loans and Swing Line Loans) plus the average of Revolving Credit Loans and Swing Line Loans outstanding on the last day of each of the last four fiscal quarters. [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 10 Amendment Requests - ------------------ The Company is requesting the following revisions to the Credit Agreement in order to provide flexibility to execute new management's strategy: Covenant Changes o Waive Q2 2006 Financial Covenants o Amend Consolidated Leverage, Debt Service and Interest Coverage Covenants through Q4 2007 o Remove Consolidated Fixed Charge Coverage Covenant through Q4 2007 Other Amendment Requests o Add Maximum Capex Covenant of $120mm for 2007 Calendar Year o New Leverage and Ratings Based Pricing Grid for Revolver and Term Loan - > 3.0x: L + 275 - > 4.25x: L + 350 - > 3.5x: L + 300 - If ratings downgrade, pricing grid - > 4.0x: L + 325 increased by 25 bps o Offer Asset Sale Proceeds to Term Loan Lenders [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 11 Amendment Requests (Cont'd) - --------------------------- Proposed Covenants
Consolidated Interest Consolidated Debt Service Consolidated Leverage Ratio Coverage Ratio Coverage Ratio Fiscal Existing Proposed Fiscal Existing Proposed Fiscal Existing Proposed Quarter Covenant Covenant Quarter Covenant Covenant Quarter Covenant Covenant Q3 2006 3.00x 4.50x Q3 2006 4.00x 2.50x Q3 2006 3.50x 2.00x Q4 2006 3.00x 4.50x Q4 2006 4.00x 2.50x Q4 2006 3.50x 2.00x Q1 2007 2.50x 4.50x Q1 2007 4.00x 2.50x Q1 2007 3.50x 2.00x Q2 2007 2.50x 4.00x Q2 2007 4.00x 2.75x Q2 2007 3.50x 2.25x Q3 2007 2.50x 3.75x Q3 2007 4.00x 3.00x Q3 2007 3.50x 2.50x Q4 2007 2.50x 3.50x Q4 2007 4.00x 3.25x Q4 2007 3.50x 2.75x Q1 2008 * 2.50x 2.50x Q1 2008 * 4.00x 4.00x Q1 2008 * 3.50x 3.50x and thereafter and thereafter and thereafter
- ----------------------- * No change. [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 12 Timeline o Mon, July 17: Launch Amendment and post Amendment Letter to Intralinks o Tues, July 18: Lender conference call; Amendment documentation posted to Intralinks o Fri, July 28: Consents due by 5:00 PM EDT - 25 bps fee will be paid to Lenders consenting prior to Consent Deadline o Mon, July 31: Finalize Amended Credit Agreement [SIX FLAGS LOGO] STRICTLY CONFIDENTIAL Page 13 -----END PRIVACY-ENHANCED MESSAGE-----