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Six Flags Entertainment Corporation (SIX)

Q2 2010 Earnings Call

August 16, 2010 8:30 am ET


Sandra Daniels - VP of Communications

Jim Reid-Anderson - Chairman, President and CEO

Al Weber - COO

Jeff Speed - EVP and CFO


Joe Stauff - Susquehanna

Ian Corydon - B. Riley

Ken Smalley - Seaport Group



Good day, ladies and gentlemen, and welcome to the Six Flags second quarter 2010 earnings conference call. (Operator Instructions)

I would now like to turn the conference over to your host for today's call, Ms. Sandra Daniels, Vice President of Communications.

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Sandra Daniels

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Good morning, everyone, and welcome to our second quarter 2010 earnings call. With me on the call today are Jim Reid-Anderson, Six Flag's new Chairman, President and CEO; Al Weber, Chief Operating Officer; and Jeff Speed, Executive Vice President and CFO.

At this time, I'd like to take a moment to read through the forward-looking statements. In compliance with SEC Regulation FD, a webcast of this call is being made available to the media and the general public, as well as analysts and investors. The company cautions you that comments made during the call will include forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in such statements. You may refer to the company's 2009 Annual Report on Form 10-K, which is also posted on its website, for a detailed discussion of these risks.

Because the webcast is open to all constituents and prior notification has been widely and unselectively disseminated, all contents of the call will be considered fully disclosed. In accordance with SEC Regulation G, non-GAAP financial measures used in the earnings release and in the company's oral presentation today are required to be reconciled to the most directly comparable GAAP measure. Those reconciliations are available to investors in the earnings release and on our website.

And now, it is my pleasure to introduce Six Flag's new Chairman, President and CEO, Jim Reid-Anderson. Jim joined Six Flags with the distinguished track record, notably as the former Chairman, President and CEO of Dade Behring Holdings.

Jim Reid-Anderson

Thank you for that very nice introduction, Sandra. I am extremely honored to serve as Six Flags' new Chairman, President and CEO, and I'm very excited about taking on this new role.

I have to say when I was approached with this opportunity, I did not hesitate. With its world-class portfolio of theme parks and strong balance sheet, the company is well positioned for success. I am invigorated by the challenge of continuing to improve the company's operational performance through focused execution and to further enhance the company's capital structure through disciplined financial management. There are clear goals in place designed to reduce costs and improve efficiency, and those efforts will continue.

I am very pleased to have the expertise of Al Weber and the great team of executives around the company to draw on. Al has done a fantastic job leading the company over the last few months. His expertise has been critical as the company had transitioned from a successful financial restructuring to a busy summer season.

I will be visiting all of our parks in the coming weeks and examining the core businesses. Six Flags has some of the most talented people in the business, and I am really eager to meet everyone. I anticipate that my first tasks will involve a lot of listening and a lot of asking questions.

Clearly, it's also a high priority for me to get to know our customers and also many of you in the financial community. I look forward to listening to your thoughts. And during the next few months, I also hope to be able to meet as many of you as possible face-to-face.

One of the most important concepts in corporate governance is transparency. For me, that has always been my policy. I am committed to maintaining an open dialog with all shareholders. I believe we have a great story to tell, and I will do my best to communicate about our business and our plans.

That said, today is my first day on the job. So I'm not yet in a position to discuss the specifics of Six Flags business and performance. Al and Jeff are here to provide that information and to take questions along those lines.

Before they give us all the details, I would like to reinforce that all in all, this was a very memorable quarter marked by a great operating and financial performance, strong support from guests, partners, suppliers, employees, lenders and committed shareholders and a positive conclusion to a long and often complex restructuring process.

With that, Al, I'll turn the call over to you now.

Al Weber

Thank you, Jim. Welcome to Six Flags. I look forward to partnering with you. Good morning, everyone, and thank you for participating in this call and for your interest in Six Flags Entertainment.

As you can imagine, a lot has taken place since the company's last investor conference call in the spring of 2009. First, I'd like to talk about what Six Flags accomplished during its financial restructuring.

While the process was challenging, it resulted in the cancellation of $1.7 billion in debt and preferred equity. As of August 1, our net debt balance was $830 million, down from our pre-petitioned balance including peers of over $2.7 billion. Our annual cash financing burden is approximately $75 million and is approximately one-third of historical levels. We have preserved in excess of $1 billion in federal net operating losses, which means that we will pay minimal taxes for the foreseeable future.

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