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Six Flags Operations Inc · 10-K · For 12/31/00

Filed On 4/2/01 1:17pm ET · SEC File 33-61338 · Accession Number 912057-1-506244

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 4/02/01  Six Flags Operations Inc          10-K       12/31/00    2:61                                     Merrill Corp/FA

Annual Report · Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         59    316K 
 2: EX-21       Subsidiaries of the Registrant                         2      8K

10-K · Annual Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Business Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Equity in Operations of Theme Parks Exhibits, Financial Statement Schedules, and Reports on Form 8-K Financial Statements and Supplementary Data Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations Market for the Registrant's Common Equity and Related Stockholder Matters Market Risks and Sensitivity Analyses Properties Quantitative and Qualitative Disclosures About Market Risk Six Flags Worlds of Adventure Submission of Matters to A Vote of Security Holders
1	1st Page
2	Item 1. Business
8	Six Flags Worlds of Adventure
17	Item 2. Properties
18	Item 3. Legal Proceedings
"	Item 4. Submission of Matters to A Vote of Security Holders
19	Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters
"	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
20	Equity in Operations of Theme Parks
25	Market Risks and Sensitivity Analyses
27	Item 7a. Quantitative and Qualitative Disclosures About Market Risk
"	Item 8. Financial Statements and Supplementary Data
"	Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
28	Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

10-K 1st Page of 59 TOC Top Previous Next Bottom Just 1st

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: DECEMBER 31, 2000
-----------------

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to ____________

Commission File Number: 333-46897-01

SIX FLAGS OPERATIONS INC.
(FORMERLY PREMIER PARKS OPERATIONS INC.)
---------

------------------------------
(Exact name of Registrant as specified in its charter)

DELAWARE 73-6137714
---------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

11501 NORTHEAST EXPRESSWAY
OKLAHOMA CITY, OKLAHOMA 73131
---------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (405) 475-2500
----------------------

Securities registered pursuant to Sec. 12(b) of the Act: NONE
---------

Securities registered pursuant to Sec. 12(g) of the Act: NONE
---------

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES /X/ NO / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /

State the aggregate market value of the voting stock held by
non-affiliates (assuming, solely for the purposes of this Form, that all the
directors of the Registrant are affiliates) of the Registrant:

None. All of the capital stock of the Company is held by its parent, Six
Flags, Inc.

Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest most practicable date:

The number of shares of Common Stock of the Registrant outstanding as of
March 1, 2001 was 1,000.

The Registrant meets the conditions set forth in General Instruction
I(1)(a) and (b) of Form 10-K and is therefore filing this form with reduced
disclosure format.
================================================================================

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PART I

ITEM 1. BUSINESS

INTRODUCTION

Six Flags Operations Inc., formerly known as Premier Parks Operations Inc.
(together with its subsidiaries, "SFO" or the "Company") is the surviving
corporation of a merger (the "Merger") on November 5, 1999 of Six Flags
Entertainment Corporation (together with its subsidiaries, "SFEC") into the
Company. Each party to the Merger was, and the Company is, a wholly-owned
subsidiary of Six Flags, Inc., formerly Premier Parks Inc. ("Six Flags"). Six
Flags, which operates 38 parks, is the largest theme park operator in the world.
The Company operates 35 parks which had attendance of approximately 41.5 million
in 2000. These parks include 14 of the of the 50 highest attendance theme parks
in North America, the largest paid admission theme park in Mexico and seven
theme parks in Europe. The Company is also managing the development and
construction of a new theme park in Spain. The Company's theme parks serve 8 of
the 10 largest metropolitan areas in the United States. For the year ended
December 31, 2000, the Company's reported total revenue was approximately
$1,006.6 million and its consolidated earnings before interest, taxes,
depreciation and amortization and noncash compensation ("EBITDA") were
approximately $370.5 million.

The Merger was accounted for as a reorganization of interests under common
control in a manner similar to a pooling of interests. All financial and
statistical information contained herein at dates or for periods subsequent to
April 1, 1998 (the date Six Flags acquired SFEC) give effect to the Merger as if
it had occurred on that date. Financial and statistical information at dates or
for periods prior to April 1, 1998 relate only to SFO.

The Company has operated regional theme parks under the Six Flags name for
nearly forty years and established a nationally recognized brand name. The
Company has worldwide ownership of the "Six Flags" brand name. To capitalize on
this name recognition, since the commencement of the 1998 season and including
the 2001 season, the Company has rebranded ten of its parks as "Six Flags"
parks, including three of its international parks.

The Company holds exclusive long-term licenses for theme park usage
throughout the United States (except the Las Vegas metropolitan area), Canada,
Europe and Latin and South America (including Mexico) of certain Warner Bros.
and DC Comics characters. These characters include BUGS BUNNY, DAFFY DUCK,
TWEETY BIRD, YOSEMITE SAM, BATMAN, SUPERMAN and others. In addition, the
Company's European and Latin and South American licenses with Warner Bros.
include the Hanna-Barbera and Cartoon Network characters, including YOGI BEAR,
SCOOBY-DOO and the FLINTSTONES.(1) The Company uses these characters to market
its parks and to provide an enhanced family entertainment experience. The
Company's licenses include the right to sell merchandise featuring the
characters at the parks, and to use the characters in its advertising, as
walk-around characters, in theming for rides, attractions and retail outlets.
The Company believes using these characters promotes increased attendance,
supports higher ticket prices, increases lengths-of-stay and enhances in-park
spending.

The Company's 35 parks are located in geographically diverse markets
across North America and Europe. Each of the Company's theme parks is
individually themed and provides a complete family-oriented entertainment
experience. The Company's theme parks generally offer a broad selection of
state-

----------
(1) LOONEY TUNES, characters, names and all related indicia are trademarks of
Warner Bros.(C)2001, a division of Time Warner Entertainment Company, L.P.
("TWE"). BATMAN and SUPERMAN and all related characters, names and indicia
are copyrights and trademarks of DC Comics(C)2001, CARTOON NETWORK and
logo are trademarks of Cartoon Network(C)2001, SIX FLAGS and all related
indicia are federally registered trademarks of Six Flags Theme Parks
Inc.(C)2001, a subsidiary of the Company. FIESTA TEXAS and all related
indicia are trademarks of Fiesta Texas, Inc.(C)2001, a subsidiary of the
Company.

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of-the-art and traditional thrill rides, water attractions, themed areas,
concerts and shows, restaurants, game venues and merchandise outlets.

DESCRIPTION OF RECENT AND PENDING ACQUISITIONS

In December 2000, Six Flags acquired Enchanted Village and Wild Waves, a
water park and children's ride park located near Seattle, Washington, which has
averaged approximately 500,000 in annual attendance over the last five years.
The park was transferred to the Company in early 2001. The park is located on
approximately 65 acres and is the only park located within the Seattle-Tacoma
metropolitan area, which is the 12th largest metropolitan area in the country.
The park is primarily a water park and currently lacks a full complement of
rides and revenue outlets. The park also has not benefited from significant
marketing programs. As a result, the Company believes that there is an
opportunity over the next several years to increase this park's revenue,
attendance and cash flow, with relatively modest capital expenditures.

In January 2001, the Company acquired substantially all of the assets used
in the operation of Sea World of Ohio, a 230 acre marine wildlife park located
adjacent to the Company's Six Flags Ohio theme park. The two parks are being
combined for the 2001 season under the name "Six Flags Worlds of Adventure." The
consolidation of the two parks, together with the Company's neighboring
campgrounds and hotel, enable the Company to offer a very attractive regional
destination experience. The Company believes that the combined facility will
enable the Company to increase attendance and revenue and to increase operating
efficiencies through shared expenses.

In November 2000, the Company entered into a letter of intent to acquire
La Ronde, a 146 acre theme park located near downtown Montreal on the former
site of the 1967 Montreal World's Fair. If this acquisition is completed, the
Company will acquire substantially all of the park assets for approximately U.S.
$20 million and lease the site from the City of Montreal on a long-term basis.
Although Six Flags expects to acquire the park prior to its 2001 season, the
Company does not expect to make any investment in the facility until after that
season. Since its inception, the park has been operated by a municipal authority
which contracted with third parties to operate a substantial majority of the
park's revenue outlets. Those third parties retained a significant portion of
the revenues generated by these outlets. Most of the contracts covering these
revenue outlets expire by the end of 2002. The Company also believes that it can
increase the scope and effectiveness of this park's marketing programs. As a
result, the Company believes that, if it acquires this park, the Company will be
able to substantially increase the park's revenue, attendance and cash flow over
the next several years. There is no assurance that the Company will be able to
complete this acquisition.

DESCRIPTION OF RECENT FINANCINGS

In February 2001, the Company retired by means of a tender offer $124.7
principal amount of its 9 3/4% Senior Notes due 2007. In addition, during that
month the Company repaid from a portion of the net proceeds of a senior note
offering by Six Flags $223.0 million principal amount of borrowings under the
reducing multicurrency revolving portion of the Company's senior credit
facility. Amounts repaid under the facility can reborrowed. The tender offer and
debt repayment were funded by capital contributions from Six Flags.

DESCRIPTION OF DOMESTIC PARKS

SIX FLAGS AMERICA

Six Flags America, a combination theme and water park located in Largo,
Maryland (approximately

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15 miles east of Washington, D.C. and 30 miles southwest of Baltimore, Maryland)
is the 40th largest theme park in North America.2 The park's primary market
includes Maryland, northern Virginia, Washington, D.C. and parts of Pennsylvania
and Delaware. This market provides the park with a permanent resident population
base of approximately 6.7 million people within 50 miles and 11.4 million people
within 100 miles. Based on a copyrighted 2000 survey of television households
within designated market areas ("DMAs") published by A.C. Nielsen Media
Research, the Washington, D.C. and Baltimore markets are the number 8 and number
24 DMAs in the United States, respectively.

The Company owns a site of 515 acres, with 131 acres currently used for
park operations. The remaining 384 acres, which are fully zoned for
entertainment and recreational uses, provide the Company with ample expansion
opportunity, as well as the potential to develop complementary operations.

Six Flags America's principal competitors are King's Dominion Park,
located in Doswell, Virginia (near Richmond); Hershey Park, located in Hershey,
Pennsylvania; and Busch Gardens, located in Williamsburg, Virginia. These parks
are located approximately 120, 125 and 175 miles, respectively, from Six Flags
America.

SIX FLAGS ASTROWORLD, SIX FLAGS WATERWORLD AND SPLASHTOWN

Six Flags AstroWorld, the 35th largest theme park in North America, and
the separately gated adjacent Six Flags WaterWorld are located in Houston,
Texas. In May 1999, the Company acquired Splashtown, a water park located
approximately 30 miles from Six Flags AstroWorld. Splashtown is the 12th largest
water park in the United States. The Houston, Texas market provides the parks
with a permanent resident population of 4.5 million people within 50 miles and
5.4 million people within 100 miles. The Houston market is the number 11 DMA in
the United States.

The Company owns sites of approximately 85 acres used for the theme park,
approximately 14 acres used for Six Flags WaterWorld and approximately 60 acres
for Splashtown. Six Flags WaterWorld and Splashtown compete with each other. Six
Flags AstroWorld competes with Sea World of Texas and the Company's Six Flags
Fiesta Texas, both located in San Antonio, Texas, approximately 200 miles from
the park. In addition, the park competes with Six Flags Over Texas, the
Company's park located in Arlington, Texas, approximately 250 miles from the
park.

SIX FLAGS DARIEN LAKE & CAMPING RESORT

Six Flags Darien Lake, a combination theme and water park, is the largest
theme park in the State of New York and the 39th largest theme park in North
America. Six Flags Darien Lake is located off Interstate 90 in Darien Center,
New York, approximately 30, 40 and 120 miles from Buffalo, Rochester and
Syracuse, New York, respectively. The park's primary market includes upstate New
York, western and northern Pennsylvania and southern Ontario, Canada. This
market provides the park with a permanent resident population base of
approximately 2.1 million people within 50 miles of the park and 3.2 million
within 100 miles. The Buffalo, Rochester and Syracuse markets are the number 44,
number 74 and number 80 DMAs in the United States, respectively.

The Six Flags Darien Lake property consists of approximately 988 acres,
including 144 acres for the theme park, 242 acres of campgrounds and 593 acres
of agricultural, undeveloped and water areas. Six Flags Darien Lake also has a
20,000 seat amphitheater. The Company has a long-term arrangement with a
national concert promoter to lease and operate the amphitheater.

----------
(2) Park rankings are based on 2000 attendance as published in AMUSEMENT
BUSINESS, an industry trade publication.

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Adjacent to the Six Flags Darien Lake theme park are a 163 room hotel and
a camping resort, each owned and operated by the Company. The campgrounds
include 1180 developed campsites, including 395 recreational vehicles (RV's)
available for daily and weekly rental. The campground is the fifth largest in
the United States. In 2000, approximately 333,000 people used the Six Flags
Darien Lake hotel and campgrounds. Substantially all of the hotel and camping
visitors visit the theme park.

Six Flags Darien Lake's principal competitor is Wonderland Park located in
Toronto, Canada, approximately 125 miles from Six Flags Darien Lake. In
addition, Six Flags Darien Lake competes to a lesser degree with three smaller
amusement parks located within 50 miles of the park. Six Flags Darien Lake is
significantly larger with a more diverse complement of entertainment than any of
these three smaller facilities.

SIX FLAGS ELITCH GARDENS

Six Flags Elitch Gardens is a combination theme and water park located on
approximately 67 acres in the downtown area of Denver, Colorado, next to Mile
High Stadium and the Pepsi Center Arena, and close to Coors Field. Six Flags
Elitch Gardens is the 42nd largest theme park in North America. The park's
primary market includes the greater Denver area, as well as most of central
Colorado. This market provides the park with a permanent resident population
base of approximately 2.5 million people within 50 miles of the park and
approximately 3.4 million people within 100 miles. The Denver area is the number
18 DMA in the United States. Six Flags Elitch Gardens has no significant direct
competitors.

SIX FLAGS FIESTA TEXAS

Six Flags Fiesta Texas, the 28th largest theme park in North America, is a
combination theme and water park located on approximately 206 acres in San
Antonio, Texas. The San Antonio, Texas market provides the park with a permanent
resident population of approximately 1.8 million people within 50 miles and
approximately 3.1 million people within 100 miles. The San Antonio market is the
number 37 DMA in the United States.

Six Flags Fiesta Texas' principal competitor is Sea World of Texas, also
located in San Antonio. In addition, the park competes to a lesser degree with
two Company parks: Six Flags AstroWorld, located in Houston, Texas, and Six
Flags Over Texas located in Arlington, Texas.

SIX FLAGS GREAT ADVENTURE, SIX FLAGS HURRICANE HARBOR AND SIX FLAGS WILD
SAFARI ANIMAL PARK

Six Flags Great Adventure, the 12th largest theme park in North America,
the separately gated adjacent Six Flags Hurricane Harbor, the 12th largest water
park in the United States, and Six Flags Wild Safari Animal Park are each
located in Jackson, New Jersey, approximately 70 miles south of New York City
and 50 miles east of Philadelphia. The New York and Philadelphia markets provide
the parks with a permanent resident population of approximately 13.3 million
people within 50 miles and approximately 26.2 million people within 100 miles.
The New York and Philadelphia markets are the number 1 and number 4 DMAs in the
United States, respectively.

The Company owns a site of approximately 2,200 acres, of which
approximately 125 acres are currently used for the theme park operations,
approximately 45 acres are used for the water park and approximately 350
adjacent acres are used for the wildlife safari park. Over 1,600 acres are
available for future development. The animal park is home to over 1,200 exotic
animals representing more than 58 species, which can be seen over a four and
one-half mile drive. Six Flags Great Adventure's principal competitors are
Hershey Park, located in Hershey, Pennsylvania, approximately 150 miles from the
park; and Dorney Park, located in Allentown, Pennsylvania, approximately 75
miles from the park. The water park competes with several other water parks in
the market.

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SIX FLAGS GREAT AMERICA

Six Flags Great America, the 21st largest theme park in North America, is
located in Gurnee, Illinois, between Chicago, Illinois and Milwaukee, Wisconsin.
The Chicago and Milwaukee markets provide the park with a permanent resident
population of approximately 8.3 million people within 50 miles and approximately
12.9 million people within 100 miles. The Chicago and Milwaukee markets are the
number 3 and number 33 DMAs in the United States, respectively.

The Company owns a site of approximately 440 acres of which 92 are used
for the theme park operations, and approximately 106 usable acres are located in
a separate parcel available for expansion and complementary uses. Six Flags
Great America currently has no direct theme park competitors in the region, but
does compete to some extent with Kings Island, located near Cincinnati, Ohio,
approximately 350 miles from the park; Cedar Point, located in Sandusky, Ohio,
approximately 340 miles from the park; and Six Flags St. Louis, the Company's
park located outside St. Louis, Missouri, approximately 320 miles from the park.

SIX FLAGS HURRICANE HARBOR

Six Flags Hurricane Harbor, the 6th largest water park in the United
States, is located in Arlington, Texas, between Dallas and Fort Worth, Texas.
The Dallas/Fort Worth market provides the park with a permanent resident
population of 4.8 million people within 50 miles and 5.9 million people within
100 miles. The Dallas/Fort Worth market is the number 8 DMA in the United
States.

The Company owns directly approximately 47 acres, of which approximately
17 acres are currently used for Hurricane Harbor and 30 acres remain
undeveloped. Six Flags Hurricane Harbor has no direct competitors in the area
other than a municipal water park.

SIX FLAGS KENTUCKY KINGDOM

Six Flags Kentucky Kingdom is a combination theme and water park, located
on approximately 58 acres on and adjacent to the grounds of the Kentucky Fair
and Exposition Center in Louisville, Kentucky. Of the 58 acres, approximately 38
acres are leased under ground leases with terms (including renewal options)
expiring between 2021 and 2049, with the balance owned by the Company. Six Flags
Kentucky Kingdom is the 49th largest theme park in North America. The park's
primary market includes Louisville and Lexington, Kentucky, Evansville and
Indianapolis, Indiana and Nashville, Tennessee. This market provides the park
with a permanent resident population of approximately 1.5 million people within
50 miles and approximately 4.7 million people within 100 miles. The Louisville
and Lexington markets are the number 48 and number 66 DMAs in the United States.

Six Flags Kentucky Kingdom's only significant direct competitor is Kings
Island, located near Cincinnati, Ohio, approximately 100 miles from the park.

SIX FLAGS MAGIC MOUNTAIN AND SIX FLAGS HURRICANE HARBOR

Six Flags Magic Mountain, the 15th largest theme park in North America,
and the separately gated adjacent Six Flags Hurricane Harbor are located in
Valencia, California, just 30 miles north of Los Angeles. The Los Angeles,
California market provides the parks with a permanent resident population of
approximately 9.7 million people within 50 miles and approximately 16.1 million
people within 100 miles. The Los Angeles market is the number 2 DMA in the
United States.

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The Company owns a site of approximately 260 acres with 160 acres used for
the theme park, and approximately 12 acres used for the pirate-themed water
park. Six Flags Magic Mountain's principal competitors include Disneyland in
Anaheim, California, located approximately 60 miles from the park, Universal
Studios Hollywood in Universal City, California, located approximately 20 miles
from the park, Knott's Berry Farm in Buena Park, California, located
approximately 50 miles from the park, Sea World of California in San Diego,
California, located approximately 150 miles from the park and Legoland in
Carlsbad, California, located approximately 120 miles away from the park. In
2001, Disney's California Adventure theme park opened up next to Disneyland
approximately 60 miles from the park.

Six Flags Hurricane Harbor's competitors include the new Soak City USA
Waterpark and Raging Waters, each located approximately 50 miles from the water
park.

SIX FLAGS MARINE WORLD

Six Flags Marine World, a theme park which also features marine mammals
and exotic land animals, is the 30th largest theme park in North America. Six
Flags Marine World is located in Vallejo, California, approximately 30 miles
from San Francisco, 20 miles from Oakland and 60 miles from Sacramento. This
market provides the park with a permanent resident population base of
approximately 5.5 million people within 50 miles and approximately 10.1 million
people within 100 miles. The San Francisco/Oakland and Sacramento areas are the
number 5 and number 19 DMAs in the United States, respectively.

The Company manages the operations of Six Flags Marine World under a
management agreement pursuant to which the Company is entitled to receive an
annual base management fee of $250,000 and up to $250,000 annually in additional
fees based on park performance. In addition, the Company leases approximately 55
acres of land at the site on a long-term basis and at nominal rent, entitling
the Company to receive, in addition to the management fee, 80% of the cash flow
generated by the combined operations of the park after operating expenses and
debt service. Finally, the Company has the option to purchase the entire park
beginning in February 2002.

Six Flags Marine World is located on approximately 136 acres and offers
various rides and other traditional theme park attractions, as well as
presentation stadiums, animal habitats and picnic areas, bordering a 55-acre
man-made lake. The park provides for the shelter and care for marine mammals,
land animals, sharks, birds and reptiles, tropical and cold water fish and
marine invertebrates, all featured in a variety of exhibits and participatory
attractions.

Six Flags Marine World's principal competitors are Underwater World at
Pier 39 in San Francisco, Great America in Santa Clara and Outer Bay at Monterey
Bay Aquarium. These attractions are located approximately 30, 60 and 130 miles
from Six Flags Marine World, respectively.

The Company accounts for its interest in Six Flags Marine World under the
equity method of accounting. See Note 5 to Notes to Consolidated Financial
Statements.

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SIX FLAGS NEW ENGLAND

Six Flags New England is a combination theme and water park, located off
Interstate 91 near Springfield, Massachusetts, approximately 90 miles west of
Boston. Six Flags New England is the 31st largest theme park in North America
with a primary market that includes Springfield and western Massachusetts,
Hartford and western Connecticut, as well as portions of eastern Massachusetts
(including Boston) and eastern New York. This market provides the park with a
permanent resident population base of approximately 3.1 million people within 50
miles and 15.2 million people within 100 miles. Springfield, Providence,
Hartford/New Haven and Boston are the number 105, number 50, number 27 and
number 6 DMAs in the United States. Six Flags New England is comprised of
approximately 230 acres, with 90 acres currently used for park operations, 12
acres for a picnic grove and approximately 128 undeveloped acres.

Six Flags New England's only significant competitor is Lake Compounce
located in Bristol, Connecticut, approximately 50 miles from Six Flags New
England. To a lesser extent, Six Flags New England competes with The Great
Escape, the Company's park located in Lake George, New York, approximately 150
miles from Six Flags New England.

SIX FLAGS ST. LOUIS

Six Flags St. Louis, the 33rd largest theme park in North America, is a
combination theme and water park located in Eureka, Missouri, about 35 miles
west of St. Louis, Missouri. The St. Louis market provides the park with a
permanent resident population of approximately 2.6 million people within 50
miles and approximately 3.8 million people within 100 miles. The St. Louis
market is the number 22 DMA in the United States.

The Company owns a site of approximately 497 acres of which approximately
132 are used for park operations. Six Flags St. Louis competes with Kings
Island, located near Cincinnati, Ohio, approximately 350 miles from the park;
Worlds of Fun in Kansas City, Missouri, located approximately 250 miles from the
park; Cedar Point, located in Sandusky, Ohio, approximately 515 miles from the
park; Silver Dollar City, located in Branson, Missouri, approximately 250 miles
from the park; and Six Flags Great America, the Company's park located near
Chicago, Illinois, approximately 320 miles from the park.

SIX FLAGS WORLDS OF ADVENTURE

Six Flags Worlds of Adventure, a combination theme, water and marine
wildlife park, represents the consolidation of Six Flags of Ohio and the
adjacent park formerly known as Sea World of Ohio. The park is located in
Aurora, Ohio, 20 miles southeast of Cleveland and approximately 30, 60 and 120
miles, respectively, from Akron and Youngstown, Ohio and Pittsburgh,
Pennsylvania. This market provides the park with a permanent resident population
base of approximately 4.0 million people within 50 miles of the park and
approximately 7.1 million within 100 miles. The Cleveland/Akron, Youngstown and
Pittsburgh markets are the number 15, number 99 and number 20 DMAs in the United
States, respectively.

Adjacent to Six Flags Worlds of Adventure are a 145 room hotel and a
camping resort each owned and operated by the Company. The campgrounds include
300 developed campsites, including 24 recreational vehicles (RV's) available for
daily and weekly rental. In 2000, approximately 73,550 people used the Six Flags
Ohio hotel and campgrounds.

The 690-acre property on which Six Flags Worlds of Adventure is situated
includes a 50-acre spring-fed lake. The theme park and the water park presently
occupy approximately 45 acres and the marine wildlife park is located on
approximately 113 acres. There are approximately 110 acres of undeveloped land
that have the potential for further development).

Six Flags Worlds of Adventure's principal competitors are Cedar Point in
Sandusky, Ohio and

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Kennywood in Pittsburgh, Pennsylvania. These parks are located approximately 90
miles and 120 miles, respectively, from the park. There are also three small
water parks within a 50-mile radius of Six Flags Worlds of Adventure.

ENCHANTED VILLAGE AND WILD WAVES

Enchanted Village and Wild Waves is a water park and children's ride park
located in Seattle, Washington. The facility is located on approximately 65
acres. The Seattle-Tacoma market provides the park with a permanent resident
population of approximately 3.4 million people within 50 miles and approximately
4.3 million people within 100 miles. The Seattle-Tacoma is the number 12 DMA in
the United States. The park is primarily a water park and currently lacks a full
complement of rides and revenue outlets. As a result, the Company believes that
there is an opportunity over the next several years to increase this park's
revenue, attendance and cash flow, with relatively modest capital expenditures.
The park does not have any significant direct competitors.

FRONTIER CITY

Frontier City is a western theme park located along Interstate 35 in
northeast Oklahoma City, Oklahoma, approximately 100 miles from Tulsa. The
park's market includes nearly all of Oklahoma and certain parts of Texas and
Kansas, with its primary market in Oklahoma City and Tulsa. This market provides
the park with a permanent resident population base of approximately 1.2 million
people within 50 miles of the park and 2.5 million people within 100 miles. The
Oklahoma City and Tulsa markets are the number 45 and number 59 DMAs in the
United States, respectively

The Company owns a site of approximately 109 acres, with 55 acres
currently used for park operations. Frontier City's only significant
competitor is the Company's Six Flags Over Texas, located in Arlington,
Texas, approximately 225 miles from Frontier City.

THE GREAT ESCAPE

The Great Escape, which opened in 1954, is a combination theme and water
park located off Interstate 87 in the Lake George, New York resort area, 180
miles north of New York City and 40 miles north of Albany. The park's primary
market includes the Lake George tourist population and the upstate New York and
western New England resident population. This market provides the park with a
permanent resident population base of approximately 880,000 people within 50
miles of the park and 2.8 million people within 100 miles. According to
information released by local governmental agencies, approximately 9 million
tourists visited the Lake George area in 2000. The Albany market is the number
56 DMA in the United States

The Great Escape is located on a site of approximately 368 acres, with 143
acres currently used for park operations. Approximately 43 of the undeveloped
acres are suitable for park expansion. The Great Escape's only significant
direct competitor is Six Flags New England, the Company's park located in
Springfield, Massachusetts, approximately 150 miles from The Great Escape. In
addition, there is a smaller water park located in Lake George.

WATERWORLD PARKS

The Waterworld Parks consist of two water parks (Waterworld USA/Concord
and Waterworld USA/Sacramento).

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Waterworld USA/Concord is located in Concord, California, in the East Bay
area of San Francisco. The park's primary market includes nearly all of the San
Francisco Bay area. This market provides the park with a permanent resident
population base of approximately 8.0 million people within 50 miles of the park
and 10.5 million people within 100 miles. The San Francisco Bay market is the
number 5 DMA in the United States.

Waterworld USA/Sacramento is located on the grounds of the California
State Fair in Sacramento, California. The facility's primary market includes
Sacramento and the immediate surrounding area. This market provides the park
with a permanent resident population base of approximately 2.8 million people
within 50 miles of the park and 10.1 million people within 100 miles. The
Sacramento market is the number 19 DMA in the United States.

Both facilities are leased under long-term ground leases. The Concord site
includes approximately 21 acres. The Sacramento facility is located on
approximately 14 acres, all of which is used for the park. Concord's only
significant direct competitor is Raging Waters located in San Jose,
approximately 50 miles from that facility. Sacramento's only significant
competitor is Sunsplash located in northeast Sacramento, approximately 20 miles
from that facility.

WHITE WATER BAY

White Water Bay is a tropical themed water park situated on approximately
22 acres located along Interstate 40 in southwest Oklahoma City, Oklahoma. The
park's primary market includes the greater Oklahoma City metropolitan area.
Oklahoma City is the number 45 DMA in the United States. This market provides
the park with a permanent resident population base of approximately 1.2 million
people within 50 miles of the park and 2.5 million people within 100 miles.

WYANDOT LAKE

Wyandot Lake is mainly a water park, but also offers traditional amusement
park attractions with 15 "dry" rides, games, shows and a large catering
facility. It is located just outside of Columbus, Ohio, adjacent to the Columbus
Zoo on property subleased from the Columbus Zoo. The park's primary market
includes the Columbus metropolitan area and other central Ohio towns. This
market provides the park with a permanent resident population base of
approximately 2.1 million people within 50 miles of the park and approximately
6.6 million people within 100 miles. The Columbus market is the number 34 DMA in
the United States.

The Company leases from the Columbus Zoo the land, the buildings and
several rides which existed on the property at the time the lease was entered
into in 1983. The current lease expires in 2002, but the Company expects to
exercise its available options through 2008. The land leased by Wyandot Lake
consists of approximately 18 acres. The park shares parking facilities with the
Columbus Zoo.

Wyandot Lake's direct competitors are Kings Island, located near
Cincinnati, Ohio, and Cedar Point, located in Sandusky, Ohio. Each of these
parks is located approximately 100 miles from Wyandot Lake. Although the
Columbus Zoo is located adjacent to the park, it is a complementary attraction,
with many patrons visiting both facilities.

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DESCRIPTION OF INTERNATIONAL PARKS

SIX FLAGS BELGIUM

Six Flags Belgium (formerly know as Walibi-Wavre) is a combination theme
park and year-round indoor water park - called Aqualibi - near Brussels. The
park is being rebranded for the 2001 season with the introduction of the Looney
Tunes and other Warner Bros. characters and an expansion of the park's rides and
attractions. The park is located on 120 acres. The Company estimates that
approximately 8.3 million people live within a 50 mile radius of the park and
approximately 23.9 million people live within 100 miles. The park's primary
competitors are Bobbejaanland in Belgium, Efteling in Holland and Parc Asterix
in France. These parks are located approximately 70, 100 and 200 miles from Six
Flags Belgium, respectively. The park also competes with the Company's
Bellewaerde park, approximately 100 miles from Six Flags Belgium.

SIX FLAGS HOLLAND

Six Flags Holland is a theme park located on 390 acres that features
over 30 rides and numerous shows, games and food venues. The park was
rebranded as a "Six Flags" park for the 2000 season in conjunction with a
substantial capital expansion and the introduction of the Looney Tunes and
other licensed characters. The park is located in the heart of the
Netherlands, just west of Amsterdam. This market provides the park with a
permanent resident population base of approximately 7.5 million people within
a 50 mile radius of the park and approximately 28.6 million people within 100
miles. The park's primary competitor is Efteling in Holland, approximately
100 miles from the park.

SIX FLAGS MEXICO

In May 1999, the Company acquired Reino Aventura, the largest paid
admission theme park in Mexico, which was rebranded as Six Flags Mexico for the
2000 season. The park first opened in 1982 and is located on approximately 107
acres in Mexico City, which are leased on a long-term basis from the Federal
District of Mexico. More than 22 million people live within 50 miles of Six
Flags Mexico. Six Flags Mexico's principal competitors are Chapultepec and
Divertido, both amusement parks located in Mexico City.

BELLEWAERDE

Bellewaerde is a combination animal and theme park in Ieper, Belgium.
It lies in historic Flanders, the northern area of Belgium. The park is
situated on 130 acres. The Company estimates that approximately 4.3 million
people live within a 50 mile radius of the park and approximately 16.8
million people live within 100 miles. The park's primary competitors are
Plopsaland and Bobbejaanland, each located in Belgium. These parks are
located approximately 125 and 120 miles from Bellewaerde, respectively. The
park also competes with Six Flags Belgium, approximately 100 miles from
Bellewaerde.

WALIBI AQUITAINE

Walibi Aquitaine is a theme park located in Southwestern France between
Bordeaux and Toulouse. The park is located on approximately 74 acres.
Approximately 1.0 million people live within a 50 mile radius of the park and
approximately 5.2 million people live within 100 miles. The park's nearest
competitor is Futuroscope in Poitiers, France which is located 250 miles from
Walibi Aquitaine.

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WALIBI RHONE-ALPES

Walibi Rhone-Alpes is a combination theme and water park located in
eastern France in the heart of the Lyon-Geneva-Grenoble triangle. The park is
located on approximately 86 acres. Approximately 3.9 million people live within
a 50 mile radius of the park and approximately 10.5 million people live within
100 miles. The park's primary competitor is Parc Asterix in France which is
located approximately 310 miles away.

WALIBI SCHTROUMPF

Walibi Schtroumpf is a Smurf-themed park located near Metz in northeastern
France. The park is located on approximately 375 acres. The park's main markets
include parts of France, Belgium, Luxembourg and Germany. These markets provide
the park with a permanent resident population base of approximately 2.2 million
people within a 50 mile radius of the park and approximately 4.5 million people
within 100 miles. The park's primary competitors are Europa Park in Germany and
Parc Asterix in France. These parks are located approximately 150 and 220 miles
from the park, respectively.

WARNER BROS. MOVIE WORLD GERMANY

In November 1999, the Company acquired Warner Bros. Movie World
Germany, a "Hollywood" themed park located near Dusseldorf, Germany. The park
is located on approximately 148 acres of land, most of which is leased on a
long-term basis with the balance owned. Approximately 15.0 million people
live within 50 miles of the park and 35.2 million people within 100 miles.
The park's primary competitors are Phantasialand Park, located approximately
75 miles from the park, and Efteling, located approximately 110 miles from
the park.

WARNER BROS. MOVIE WORLD MADRID (UNDER CONSTRUCTION)

The Company is managing the development of a new park to be known as
Warner Bros. Movie World Madrid, near Madrid, Spain. The park, which is
scheduled to open in the spring of 2002, will be located on approximately 150
acres with ample room for expansion.

The park's primary market includes the metropolitan Madrid area. This
market provides the park with a permanent resident population base of
approximately 5 million people within a 50 mile radius of the park and
approximately 10 million people within 100 miles. In addition, nearly 10 million
people visit Madrid annually and thus will become part of the market potential
of this park. The park's primary competitors are Parque de Atracciones in Madrid
and Terra Mitica in Valencia. These parks are located approximately 20 and 230
miles from the park, respectively.

The Company is paid a development fee from the owner and will manage the
park on a long-term basis following its opening. The Company also holds a
minority interest in the park's ownership.

For additional financial and other information concerning the Company's
international operations, see Note 3 to Notes to Consolidated Financial
Statements.

PENDING ACQUISITION

LA RONDE

The Company has entered into a letter of intent to acquire substantially
all of the assets of La Ronde, a theme park located in the City of Montreal for
Can. $30.0 million (approximately US $20.0 million using the December 31, 2000
exchange rate). Under this arrangement, the Company has agreed to

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invest in the park Can. $90.0 million (approximately US $60.0 million using that
exchange rate) over four seasons, commencing in 2002. The park is located on the
146 acre site of the 1967 Montreal Worlds Fair. The Company will lease the land
on which the park is located on a long-term basis. Montreal has a metropolitan
population of approximately 3.3 million, with approximately 4.1 million people
living within 50 miles and is a major tourist destination. There can be no
assurance that this acquisition will be completed.

MARKETING AND PROMOTION

The Company attracts visitors through locally oriented multimedia
marketing and promotional programs for each of its parks. These programs are
tailored to address the different characteristics of their respective markets
and to maximize the impact of specific park attractions and product
introductions. All marketing and promotional programs are updated or completely
revamped each year to address new developments. Marketing programs are
supervised by Six Flags' Senior Vice President for Marketing, with the
assistance of Six Flags' senior management and in-house marketing staff, as well
as its national advertising agency.

The Company also develops partnership relationships with well-known
national and regional consumer goods companies and retailers to supplement its
advertising efforts and to provide attendance incentives in the form of
discounts and/or premiums. The Company has also arranged for popular local radio
and television programs to be filmed or broadcast live from its parks.

Group sales and pre-sold tickets provide the Company with a consistent and
stable base of attendance. Each park has a group sales manager and a
well-trained sales staff dedicated to selling multiple group sales and pre-sold
ticket programs through a variety of methods, including direct mail,
telemarketing and personal sales calls.

The Company has also developed effective programs for marketing season
pass tickets. Season pass sales establish a solid attendance base in advance of
the season, thus reducing exposure to inclement weather. Additionally, season
pass holders often bring paying guests and generate "word-of-mouth" advertising
for the parks.

A significant portion of the Company's attendance is attributable to the
sale of discount admission tickets. The Company offers discounts on multi-visit
tickets, tickets for specific dates and tickets to affiliated groups such as
businesses, schools and religious, fraternal and similar organizations. The
increased in-park spending which results from such attendance is not offset by
incremental operating expenses, since such expenses are relatively fixed during
the operating season.

The Company also implements promotional programs as a means of targeting
specific market segments and geographic locations not reached through its group
or retail sales efforts. The promotional programs utilize coupons, sweepstakes,
reward incentives and rebates to attract additional visitors. These programs are
implemented through direct mail, telemarketing, direct response media,
sponsorship marketing and targeted multi-media programs. The special promotional
offers are usually for a limited time and offer a reduced admission price or
provide some additional incentive to purchase a ticket, such as combination
tickets with a complementary location.

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LICENSES

Six Flags and its subsidiaries, including the Company, have the exclusive
right on a long-term basis to theme park usage of the Warner Bros. and DC comics
animated characters throughout the world except for Asia, Australia, Africa and
the Las Vegas metropolitan area. In addition, the Cartoon Network and
Hanna-Barbera characters are available for use by the Company at theme parks
throughout Europe and Latin and South America. The Company believes that the use
of the Warner Bros. characters adds a new dimension of family entertainment,
helps drive attendance, lengthens visitors' stay in the parks and increases
in-park spending. The Company believes the licensed characters are well known in
its non-U.S. markets.

PARK OPERATIONS

The Company currently operates in geographically diverse markets in the
United States, Europe and Mexico. Each of the Company's parks is operated to the
extent practicable as a separate operating division of the Premier in order to
maximize local marketing opportunities and to provide flexibility in meeting
local needs. Each park is managed by a general manager who reports to one of Six
Flags' Executive Vice Presidents (each of whom reports to the Chief Operating
Officer) and is responsible for all operations and management of the individual
park. Six Flags also has as Executive Vice President responsible for retail and
in-park spending at all of the its parks. Local advertising, ticket sales,
community relations and hiring and training of personnel are the responsibility
of individual park management in coordination with corporate support teams.

Each of the Company's theme parks is managed by a full-time, on-site
management team under the direction of the general manager. Each such management
team includes senior personnel responsible for operations and maintenance,
marketing and promotion, human resources and merchandising. Park management
compensation structures are designed to provide incentives (including stock
options and cash bonuses) for individual park managers to execute the Company's
strategy and to maximize revenues and operating cash flow at each park.

The Company's parks are generally open daily from Memorial Day through
Labor Day. In addition, most of the Company's parks are open during weekends
prior to and following their daily seasons, including as a site for theme events
(such as Hallowscream, Fright Fest and Oktoberfest). Certain of the parks have
longer operating seasons. Typically, the parks charge a basic daily admission
price, which allows unlimited use of all rides and attractions, although in
certain cases special rides and attractions require the payment of an additional
fee.

CAPITAL IMPROVEMENTS

The Company regularly makes capital investments in the addition of new
rides and attractions at its parks. The Company purchases both new and used
rides. In addition, the Company rotates rides among its parks to provide fresh
attractions. The Company believes that the introduction of new rides is an
important factor in promoting the parks in order to achieve market penetration
and encourage longer visits, which lead to increased attendance and in-park
spending. In addition, the Company generally adds theming to acquired parks and
enhances the theming and landscaping of its existing parks in order to provide a
complete family oriented entertainment experience. Capital expenditures are
planned on a seasonal basis with most expenditures made during the off-season.
Expenditures for materials and services associated with maintaining assets, such
as painting and inspecting rides are expensed as incurred and therefore are not
included in capital expenditures.

The Company's level of capital expenditures are directly related to the
optimum mix of rides and attractions given park attendance and market
penetration. These targeted expenditures are intended to drive significant
attendance growth at the parks and to provide an appropriate complement of
entertainment value,

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depending on the size of a particular market. As an individual park begins to
reach an appropriate attendance penetration for its market, management generally
plans a new ride or attraction every two to four years in order to enhance the
park's entertainment product.

The Company believes that there are ample sources for rides and other
attractions, and the Company is not dependent on any single source. Certain of
these manufacturers are located outside the United States.

MAINTENANCE AND INSPECTION

The Company's rides are inspected daily by maintenance personnel during
the operating season. These inspections include safety checks as well as regular
maintenance and are made through both visual inspection of the ride and test
operation. Senior management of Premier and the individual parks evaluate the
risk aspects of each park's operation. Potential risks to employees and staff as
well as to the public are evaluated. Contingency plans for potential emergency
situations have been developed for each facility. During the off-season,
maintenance personnel examine the rides and repair, refurbish and rebuild them
where necessary. This process includes x-raying and magnafluxing (a further
examination for minute cracks and defects) steel portions of certain rides at
high-stress points. At March 1, 2001, the Company had approximately 1,135
full-time employees who devote substantially all of their time to maintaining
the parks and their rides and attractions.

In addition to the Company's maintenance and inspection procedures, the
Company's liability insurance carrier performs a periodic inspection of each
park and all attractions and related maintenance procedures. The result of
insurance inspections are written evaluation and inspection reports, as well as
written suggestions on various aspects of park operations. Governmental
inspectors in certain jurisdictions also conduct annual ride inspections before
the beginning of each season. Other portions of each park are also subject to
inspections by local fire marshals and health and building department officials.
Furthermore, the Company uses Ellis & Associates as water safety consultants at
its parks in order to train life guards and audit safety procedures.

INSURANCE

The Company maintains insurance of the type and in amounts that it
believes are commercially reasonable and that are available to businesses in its
industry. The Company maintains multi-layered general liability policies that
provide for excess liability coverage of up to $100.0 million per occurrence.
With respect to liability claims arising out of occurrences on and after July 1,
1998, there is no self-insured retention by the Company. In addition, with
respect to claims arising out of occurrences prior to July 1, 1998 at the parks
acquired by Six Flags in its acquisition of SFEC, there is no self-insured
retention. The self-insurance portion of claims arising out of occurrences prior
to that date at the Company's other U.S. parks is $50,000. The Company also
maintains fire and extended coverage, workers' compensation, business
interruption and other forms of insurance typical to businesses in its industry.
The fire and extended coverage policies insure the Company's real and personal
properties (other than land) against physical damage resulting from a variety of
hazards.

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COMPETITION

The Company's parks compete directly with other theme parks, water and
amusement parks and indirectly with all other types of recreational facilities
and forms of entertainment within their market areas, including movies, sports
attractions and vacation travel. Accordingly, the Company's business is and will
continue to be subject to factors affecting the recreation and leisure time
industries generally, such as general economic conditions and changes in
discretionary consumer spending habits. Within each park's regional market area,
the principal factors affecting competition include location, price, the
uniqueness and perceived quality of the rides and attractions in a particular
park, the atmosphere and cleanliness of a park and the quality of its food and
entertainment. The Company believes its parks feature a sufficient variety of
rides and attractions, restaurants, merchandise outlets and family orientation
to enable it to compete effectively.

SEASONALITY

The operations of the Company are highly seasonal, with more than 90% of
park attendance in 2000 occurring in the second and third calendar quarters and
the most active period falling between Memorial Day and Labor Day. The great
majority of the Company's revenues are earned in the second and third quarters
of each year.

ENVIRONMENTAL AND OTHER REGULATION

The Company's operations are subject to increasingly stringent federal,
state and local environmental laws and regulations including laws and
regulations governing water discharges, air emissions, soil and groundwater
contamination, the maintenance of underground storage tanks and the disposal of
waste and hazardous materials. In addition, its operations are subject to other
local, state and federal governmental regulations including, without limitation,
labor, health, safety, zoning and land use and minimum wage regulations
applicable to theme park operations, and local and state regulations applicable
to restaurant operations at the park. The Company believes that it is in
substantial compliance with applicable environmental and other laws and
regulations and, although no assurance can be given, it does not foresee the
need for any significant expenditures in this area in the near future.

In addition, portions of the undeveloped areas at some parks are
classified as wetlands. Accordingly, the Company may need to obtain governmental
permits and other approvals prior to conducting development activities that
affect these areas, and future development may be limited in some or all of
these areas.

EMPLOYEES

At March 1, 2001, the Company employed 2,774 full-time employees, and the
Company employed nearly 36,000 seasonal employees during the 2000 operating
season. In this regard, the Company competes with other local employers for
qualified student and other candidates on a season-by-season basis. As part of
the seasonal employment program, the Company employs a significant number of
teenagers, which subjects the Company to child labor laws.

Approximately 5.9% of the Company's full-time and approximately 6.3% of
its seasonal employees are subject to labor agreements with local chapters of
national unions. These labor agreements expire in December 2002 (Six Flags Great
Adventure) and January 2003 (Six Flags St. Louis). The Company has not
experienced any strikes or work stoppages by its employees, and the Company
considers its employee relations to be good.

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ITEM 2. PROPERTIES

Set forth below is a brief description of the Company's material real estate at
March 1, 2001:

Six Flags America, Largo, Maryland -- 515 acres (fee ownership)
Six Flags AstroWorld, Houston, Texas -- 85 acres (fee ownership)
Six Flags Belgium, Brussels, Belgium -- 120 acres (fee ownership)
Six Flags Darien Lake, Darien Center, New York -- 988 acres (fee ownership)
Six Flags Elitch Gardens, Denver, Colorado -- 67 acres (fee ownership)
Six Flags Fiesta Texas, San Antonio, Texas -- 206 acres (fee ownership)
Six Flags Great Adventure, Hurricane Harbor & Wild Safari, Jackson, New Jersey
-- 2,200 acres (fee ownership)
Six Flags Great America, Gurnee, Illinois -- 440 acres (fee ownership)
Six Flags Holland, Biddinghuizen, The Netherlands -- 390 acres (fee ownership
and leasehold interest)(1)
Six Flags Hurricane Harbor, Arlington, Texas -- 47 acres (fee ownership)
Six Flags Hurricane Harbor, Valencia, California -- 12 acres (fee ownership)
Six Flags Kentucky Kingdom, Louisville, Kentucky -- 58 acres (fee ownership and
leasehold interest)(2)
Six Flags Magic Mountain, Valencia, California -- 260 acres (fee ownership)
Six Flags Marine World, Vallejo, California -- 138 acres (long-term leasehold
interest at nominal rent)
Six Flags Mexico, Mexico City, Mexico - 107 acres (leasehold interest)(3)
Six Flags New England, Agawam, Massachusetts -- 230 acres (substantially all fee
ownership)
Six Flags St. Louis, Eureka, Missouri -- 497 acres (fee ownership)
Six Flags WaterWorld, Houston, Texas -- 14 acres (fee ownership)
Six Flags White Water Atlanta, Marietta, Georgia - 69 acres (fee ownership)
Six Flags Worlds of Adventure, Aurora, Ohio -- 690 acres (fee ownership)
Bellewaerde, Ieper, Belgium -- 130 acres (fee ownership)
Enchanted Village, Seattle, Washington -- 65 acres (leasehold interest)(4)
Frontier City, Oklahoma City, Oklahoma -- 109 acres (fee ownership)
The Great Escape, Lake George, New York -- 368 acres (fee ownership)
Splashtown, Spring, Texas - 60 acres (fee ownership)
Walibi Aquitaine, Roquefort, France -- 74 acres (fee ownership)
Walibi Rhone-Alpes, Les Avenieres, France -- 86 acres (fee ownership)
Walibi Schtroumpf, Metz, France -- 375 acres (fee ownership)
Warner Bros. Movie World Germany, Bottrop, Germany - 148 acres (fee ownership
and leasehold interest)(5)
Waterworld/Concord, Concord, California -- 21 acres (leasehold interest)(6)
Waterworld/Sacramento, Sacramento, California -- 14 acres (leasehold
interest)(7)
White Water Bay, Oklahoma City, Oklahoma -- 22 acres (fee ownership)
Wyandot Lake, Columbus, Ohio -- 18 acres (leasehold interest)(8)

----------
(1) A substantial portion of the land is leased from a governmental agency
with a term expiring in 2018. An undeveloped portion of the land is also
leased on a year-to-year basis. The balance is owned.
(2) Approximately 38 acres are leased under ground leases with terms
(including renewal options) expiring between 2021 and 2049, with the
balance owned by the Company.
(3) The site is leased from the Federal District of Mexico City. The lease
expires in 2017.
(4) The site is leased from the prior owner. The base term of the lease
expires in 2003 and the Company has renewal options covering an additional
46 years.
(5) Approximately 7% of the site is owned. The balance is leased from multiple
landlords with lease terms in most cases ranging between 60 and 99 years.
(6) The site is leased from the City of Concord. The lease expires in 2025 and
the Company has five five-year renewal options.
(7) The site is leased from the California Exposition and State Fair. The
lease expires in 2015 and, subject to the satisfaction of certain
conditions, may be renewed by the Company for an additional ten-year term.
(8) The site is subleased from the Columbus Zoo. The lease expires in 2002 and
the Company has two renewal options with an aggregate 8 year term. Acreage
for this site does not include approximately 30 acres of parking which is
shared with the Columbus Zoo.

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The Company has granted to its lenders under its $1.2 billion credit
agreement a mortgage on substantially all of its United States properties.

In addition to the foregoing, at March 1, 2001, the Company owned certain
undeveloped land in Indiana and indirectly owned real estate interests through
its non-controlling general partnership interest in 229 East 79th Street
Associates L.P., a limited partnership that converted to cooperative ownership a
New York City apartment building. In addition, the Company leases office space
and a limited number of rides and attractions at its parks. See Note 12 to Notes
to Consolidated Financial Statements.

The Company considers its properties to be well-maintained, in good
condition and adequate for their present uses and business requirements.

ITEM 3. LEGAL PROCEEDINGS

The nature of the industry in which the Company operates tends to expose
it to claims by visitors for injuries. Historically, the great majority of these
claims have been minor. While the Company believes that it is adequately insured
against the claims currently pending against it and any potential liability, if
the Company becomes subject to damages that cannot by law be insured against,
such as punitive damages, there may be a material adverse effect on its
operations.

In December 1998, a final judgment of $197.3 million in compensatory
damages was entered against SFEC, Six Flags Theme Parks Inc., Six Flags Over
Georgia, Inc. and TWE, and a final judgment of $245.0 million in punitive
damages was entered against Time Warner Entertainment Company, L.P. ("TWE") and
of $12.0 million in punitive damages was entered against the referenced Six
Flags entities. The compensatory damages judgment has been paid and the Company
has been advised that TWE is considering an appeal to the U.S. Supreme Court of
the punitive damages judgment. The judgments arose out of a case entitled SIX
FLAGS OVER GEORGIA, LLC ET AL. V. TIME WARNER ENTERTAINMENT COMPANY, L.P. ET AL.
based on, among other things, certain disputed partnership affairs prior to the
Company's acquisition of SFEC at Six Flags Over Georgia, including alleged
breaches of fiduciary duty.

The sellers in the SFEC acquisition, including Time Warner Inc., have
agreed to indemnify the Company from any and all liabilities arising out of this
litigation.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS

All of the Company's Common Stock is owned by Six Flags, and there is no
public market for the Common Stock.

The Company paid no cash dividends during the three years ended December
31, 2000. The indenture relating to the Company's notes and the Company's senior
credit facility limit the payment of cash dividends to Six Flags. See Note 7 to
Notes to Consolidated Financial Statements.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company's revenue is derived from the sale of tickets for entrance to
its parks (approximately 54.1%, 54.0%, and 53.5%, in 2000, 1999 and 1998,
respectively) and the sale of food, merchandise, games and attractions inside
its parks, as well as sponsorship and other income (approximately 45.9%, 46.0%
and 46.5% in 2000, 1999 and 1998, respectively). The Company's principal costs
of operations include salaries and wages, employee benefits, advertising,
outside services, maintenance, utilities and insurance. The Company's expenses
are relatively fixed. Costs for full-time employees, maintenance, utilities,
advertising and insurance do not vary significantly with attendance, thereby
providing the Company with a significant degree of operating leverage as
attendance increases and fixed costs per visitor decrease.

Results of operations for 2000 do not include the results of Enchanted
Village and Wild Waves since it was transferred to the Company by Six Flags in
early 2001. Historical results of operations for 1999 include the results of
operations of SFEC for the entire year, of Six Flags Mexico and Splashtown only
from the dates of their respective acquisitions in May 1999 and of Warner Bros.
Movie World Germany from its acquisition in November 1999 (following its 1999
operating season). Results of Walibi and SFEC are included in 1998 results only
from the dates of their respective acquisitions (March 26, 1998, in the case of
Walibi, and April 1, 1998, in the case of SFEC).

The Company believes that significant opportunities exist to acquire
additional theme parks. In addition, the Company intends to continue its
on-going expansion of the rides and attractions and overall improvement of its
parks to maintain and enhance their appeal. Management believes this strategy
has contributed to increased attendance, lengths of stay and in-park spending
and, therefore, profitability.

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RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2000 AND 1999

REVENUE. Revenue in 2000 totaled $1,006.6 million compared to $927.0
million for 1999, representing an 8.6% increase. The increase over the prior
year was primarily due to increased per capita spending at the Company's
domestic parks and the inclusion for the entire 2000 year of the revenues of
Movie World Germany acquired in November 1999. The Company believes that
revenues in 2000 were adversely affected by unusually difficult weather,
particularly in June and July, in a large number of its major markets. Reported
revenues from the Company's European parks as translated into U.S. dollars were
adversely impacted by a decline in European currencies during the 2000. Revenue
growth in 2000 would have been approximately $20.0 million higher had European
currency exchange rates remained at 1999 levels.

OPERATING EXPENSES. Operating expenses for 2000 increased $22.2 million
compared to actual expenses for 1999 but decreased $14.1 million from the
prior year on a same park basis (including the pre-acquisition results for
1999 of the parks acquired in that year). The 6.3% increase in actual
expenses is exclusively attributable to the inclusion for the entire year
ended December 31, 2000 of two consolidated parks acquired in May 1999 and
one acquired in November 1999 (the "Acquired Parks). If the full year results
of the Acquired Parks were included in both periods, as a percentage of
revenues operating expenses would have been 37.3% in 2000 and 39.5% in 1999.

SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative expenses for 2000 decreased $12.6 million from the prior year
on a same park basis. As a percentage of revenue (including the Acquired
Parks for both years), selling, general and administrative expenses would
have been 16.4% in 2000 and 17.1% in 1999.

COSTS OF PRODUCTS SOLD. Costs of products sold in 2000 increased $4.9
million compared to 1999 actual but decreased $3.8 million on a same park basis.
As a percentage of theme park food, merchandise and other revenues, costs of
products sold were 20.7% in 2000 compared to 21.8% in 1999.

DEPRECIATION AND AMORTIZATION EXPENSE; INTEREST EXPENSE, NET; OTHER INCOME
(EXPENSE). Depreciation and amortization expense for 2000 increased $24.2
million compared to 1999. The increase compared to the 1999 level was
attributable to the Company's on-going capital program at the previously owned
parks and from the additional expense associated with the Acquired Parks.
Exclusive of the Acquired Parks, 2000 depreciation and amortization expense
increased $15.4 million compared to 1999. Interest expense, net increased $25.2
million compared to the 1999 level. The increase resulted from higher average
interest rates on a higher average debt and reduced interest income from lower
average cash and cash equivalent balances during 2000. The $6.6 million
increase in other expense in 2000 was related to the removal and disposal of
rides, buildings and other assets at two parks that were substantially improved
and rebranded as "Six Flags" theme parks.

EQUITY IN OPERATIONS OF THEME PARKS. Equity in operations of theme park
partnerships reflects the Company's share of the income or loss of Six Flags
Marine World and its management. The Company became entitled to a share of the
cash flows from the lease and management of Six Flags Marine World in 1998. See
Note 2 to Notes to Consolidated Financial Statements.

INCOME TAX EXPENSE. Income tax expense was $41.8 million for 2000 compared
to a $44.3 million expense for 1999. The Company's effective tax rate is
adversely affected from permanent differences associated with goodwill
amortization for financial purposes and the lesser amount of amortization that
is deductible for tax purposes.

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At December 31, 2000, the Company estimates that it had approximately
$508.3 million of net operating losses ("NOLs") carryforwards for Federal income
tax purposes. The NOLs are subject to review and potential disallowance by the
Internal Revenue Service upon audit of the Federal income tax returns of the
Company and its subsidiaries. In addition, the use of such NOLs is subject to
limitations on the amount of taxable income that can be offset with such NOLs.
Some of such NOLs also are subject to a limitation as to which of the
subsidiaries' income such NOLs are permitted to offset. Although, no assurance
can be given as to the timing or amount of the availability of such NOLs to the
Company and its subsidiaries, the Company anticipates that it is more likely
than the NOLs will be utilized prior to their expiration. See Note 8 to Notes to
Consolidated Financial Statements.

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10-K 22nd Page of 59 TOC 1st Previous Next Bottom Just 22nd

YEARS ENDED DECEMBER 31, 1999 AND 1998

The table below sets forth certain historical financial information with
respect to the Company for the years ended December 31, 1999 (which includes
SFEC for the entire year) and 1998 and with respect to SFEC and Walibi for the
three months ended March 31, 1998 (representing the pre-acquisition portion of
the 1998 year).

[Enlarge/Download Table]

Year Ended December 31, 1998
----------------------------------------------------------
Historical Historical
SFEC Walibi for
for Period Period
Year Ended Prior to Prior to Pro
December 31, Historical April 1, March 26, Forma Company
1999 Company 1998(1) 1998(2) Adjustments Pro Forma
------------- --------- --------- --------- ----------- ----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In thousands)

Revenue:
Theme park admissions................. $ 500,417 $ 423,461 $ 15,047 $ 883 $ -- $ 439,391
Theme park food,
Merchandise and other............... 426,567 368,338 7,792 624 -- 376,754
--------- --------- --------- --------- --------- ---------
Total revenue...................... 926,984 791,799 22,839 1,507 -- 816,145
--------- --------- --------- --------- --------- ---------

Operating costs and expenses:
Operating expenses.................... 353,728 297,266 45,679 4,626 -- 347,571
Selling, general and
Administrative...................... 153,249 117,634 19,278 3,407 140,319
Noncash compensation.................. -- 675 -- -- -- 675
Costs of products sold................ 90,699 81,563 2,193 248 -- 84,004
Depreciation and amortization......... 153,675 109,676 17,629 3,214 6,440(3) 136,959
--------- --------- --------- --------- --------- ---------
Total operating costs
and expenses........................ 751,351 606,814 84,779 11,495 6,440 709,528
--------- --------- --------- --------- --------- ---------

Income (loss) from operations...... 175,633 184,985 (61,940) (9,988) (6,440) 106,617
--------- --------- --------- --------- --------- ---------

Other income (expense):
Interest expense, net................. (102,532) (95,410) (22,508) (889) (3,580) (122,387)
Equity in operations
of theme parks...................... 7,075 3,052 -- -- -- 3,052
Other income (expense), including
Minority interest................... (3,551) (1,983) -- (1) -- (1,984)
--------- --------- --------- --------- --------- ---------
Total other income (expense).......... (99,008) (94,341) (22,508) (890) (3,580) (121,319)
--------- --------- --------- --------- --------- ---------
Income (loss) before income taxes
and extraordinary loss................. 76,625 90,644 (84,448) (10,878) (10,020) (14,702)
Income tax expense....................... 44,263 46,634 -- (4,786) (33,755) 8,093
--------- --------- --------- --------- --------- ---------
Income (loss) before extraordinary loss.. $ 32,362 $ 44,010 $ (84,448) $ (6,092) $ 23,735 $ (22,795)
========= ========= ========= ========= ========= =========

EBITDA(6)................................ $ 329,308 $ 294,661 $ (44,311) $ (6,774) $ -- $ 243,576
========= ========= ========= ========= ========= =========

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10-K 23rd Page of 59 TOC 1st P

Six Flags Operations Inc · 10-K · For 12/31/00

Filed On 4/2/01 1:17pm ET · SEC File 33-61338 · Accession Number 912057-1-506244

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