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INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
Filed Pursuant to Rule 424(b)(4)
Registration No. 333-51716
PROSPECTUS
1,339,223 SHARES
SIX FLAGS, INC.
COMMON STOCK
---------------------
These shares are being sold by the selling stockholder identified under the
caption "Selling Stockholder" or by donees, transferees, pledgees or other
successors in interest of such stockholder that receive shares in a non-sale
related transfer. The selling stockholder acquired these shares in connection
with our acquisition on December 6, 2000 of Enchanted Village, a children's ride
park and water park located near Seattle, Washington. We will not receive any
proceeds from the sale of these shares.
The prices at which the selling stockholder may sell the shares in this
offering will be determined by the prevailing market price for the shares or in
negotiated transactions. Our common stock is listed on the New York Stock
Exchange under the trading symbol "PKS". On January 3, 2001, the closing sale
price of the common stock was $17.125.
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 8 IN THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS JANUARY 5, 2001
<PAGE>
You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information contained in or incorporated by reference in this prospectus is
accurate as of any date other than the date on the front of this prospectus.
------------------------
TABLE OF CONTENTS
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WHERE YOU CAN FIND MORE INFORMATION......................... 3
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS.................. 4
PROSPECTUS SUMMARY.......................................... 5
RISK FACTORS................................................ 8
USE OF PROCEEDS............................................. 13
SELLING STOCKHOLDER......................................... 13
PLAN OF DISTRIBUTION........................................ 14
LEGAL MATTERS............................................... 15
EXPERTS..................................................... 15
</TABLE>
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any document we file at the SEC's public reference rooms in Washington, D.C.,
New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our SEC filings are also
available to the public at the SEC's web site at http://www.sec.gov. Our Common
Stock is listed on the New York Stock Exchange. Our reports, proxy statements
and other information can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
This prospectus is part of a Registration Statement on Form S-3 filed with
the SEC under the Securities Act of 1933. This prospectus omits some of the
information contained in the Registration Statement. You should refer to the
Registration Statement for further information with respect to Six Flags, Inc.
and the securities offered by this prospectus. Any statement contained in this
prospectus concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the SEC is not necessarily
complete, and in each case you should refer to the copy of the document filed
for complete information.
The SEC allows us to "incorporate by reference" the information we file with
it, which means we can disclose important information to you by referring you to
those documents. The information incorporated by reference is considered to be a
part of this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
all of the securities covered by this prospectus are sold by the selling
stockholder.
1. Our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2000.
2. Our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2000.
3. Our Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2000.
4. Our Annual Report on Form 10-K for the fiscal year ended December 31,
1999.
5. The description of our common stock contained in our registration
statement on Form 8-A filed pursuant to Section 12 of the Securities
Exchange Act.
6. The description of the Rights relating to the shares of common stock
contained in our registration statement on Form 8-A filed pursuant to
Section 12 of the Securities Exchange Act.
7. Our Current Report on Form 8-K dated November 8, 2000.
8. Our Current Report on Form 8-K dated December 18, 2000.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Six Flags, Inc.
11501 Northeast Expressway
Oklahoma City, Oklahoma 73131
Attention: Richard Kipf, Corporate Secretary
Telephone: (405) 475-2500
Looney Tunes characters, names and all related indicia are trademarks of
Warner Bros. -C- 2000, 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- 2000, Cartoon
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Network and logo are trademarks of Cartoon Network -C- 2000, Six Flags and all
related indicia are federally registered trademarks of Six Flags Theme
Parks Inc. -C- 2000, our subsidiary.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
Some of the statements contained in or incorporated by reference in this
prospectus discuss our plans and strategies for our business or state other
forward-looking statements, as this term is defined in the Private Securities
Litigation Reform Act. The words "anticipates," "believes," "estimates,"
"expects," "plans," "intends" and similar expressions are intended to identify
these forward-looking statements, but are not the exclusive means of identifying
them. These forward-looking statements reflect the current views of our
management; however, various risks, uncertainties and contingencies could cause
our actual results, performance or achievements to differ materially from those
expressed in, or implied by, these statements, including the following:
- the success or failure of our efforts to implement our business strategy
- the other factors discussed under the heading "Risk Factors" and elsewhere
in this prospectus
We assume no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise. For a
discussion of important risks of an investment in our securities, including
factors that could cause actual results to differ materially from results
referred to in the forward-looking statements, see "Risk Factors." You should
carefully consider the information set forth under the caption "Risk Factors."
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in or incorporated by reference in this prospectus might not
occur.
4
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PROSPECTUS SUMMARY
THE COMPANY
We are the largest regional theme park operator in the world, based on
estimated 2000 attendance of approximately 45 million. We operate 37 regional
parks, including 15 of the 50 largest theme parks in North America, based on
2000 attendance, the largest paid admission theme park in Mexico and seven theme
parks in Europe. We also manage the development and construction of a new theme
park in Spain. Our theme parks serve the 10 largest metropolitan areas in the
United States. We estimate that approximately two-thirds of the population of
the continental United States live within a 150-mile radius of one of our theme
parks.
In 1998, we acquired Six Flags, which has operated regional theme parks
under the Six Flags name for nearly forty years and has established a nationally
recognized brand name. We have worldwide ownership of the "Six Flags" brand
name. To capitalize on this name recognition, since the 1998 season we have
rebranded nine of our parks as "Six Flags" parks, including two of our
international parks.
We hold 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, our European and Latin
and South American licenses include the Hanna-Barbera and Cartoon Network
characters. We use these characters to market our parks and to provide an
enhanced family entertainment experience. Our license includes the right to sell
merchandise featuring the characters at our parks, and to use the characters in
our advertising, as walk-around characters, in theming for rides and attractions
and in retail outlets. We believe using these characters promotes increased
attendance, supports higher ticket prices, increases lengths-of-stay and
enhances in-park spending.
Our 37 parks are located in geographically diverse markets across North
America and Europe. Our parks are individually themed and provide a complete
family-oriented entertainment experience. Our theme parks generally offer a
broad selection of state-of-the-art and traditional "thrill rides," water
attractions, themed areas, concerts and shows, restaurants, game venues and
merchandise outlets. In the aggregate, our theme parks offer more than 800
rides, including over 100 roller coasters, making us the leading operator of
thrill rides in the industry.
Since 1989, under our current management we have assumed control of 36 parks
and have achieved significant internal growth.
We believe that our parks benefit from limited direct competition, since the
combination of a limited supply of real estate appropriate for theme park
development, high initial capital investment, long development lead-time and
zoning restrictions provides each of our parks with a significant degree of
protection from competitive new theme park openings. Based on our knowledge of
the development of other theme parks in the United States, we estimate that it
would cost at least $200 million and would take a minimum of two years to
construct a new regional theme park comparable to one of our Six Flags parks.
Our senior and operating management team has extensive experience in the
theme park industry. Our senior executive officers have over 150 years aggregate
experience in the industry and our general managers have an aggregate of in
excess of 440 years experience in the industry, including in excess of
320 years at our parks.
STRATEGY
Our strategy for achieving growth includes pursuing internal growth
opportunities at existing parks, expanding our parks, and making selective
acquisitions.
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We believe there are substantial opportunities for continued internal growth
at our parks. We seek to increase revenue by increasing attendance and per
capita spending, while also maintaining strict control of operating expenses.
The primary elements we use to achieve these objectives are:
- adding rides and attractions and improving overall park quality
- enhancing marketing and sponsorship programs
- increasing group sales, season passes and other pre-sold tickets
- using ticket pricing strategies to maximize ticket revenues and park
utilization
- adding and enhancing restaurants and merchandise and other revenue outlets
- adding special events
Our approach is designed to exploit the operating leverage inherent in the
theme park business. Once parks achieve certain critical attendance levels,
operating cash flow margins increase because revenue growth through incremental
attendance gains and increased in-park spending is not offset by a comparable
increase in operating expenses, because a large portion of these expenses is
relatively fixed during any given year.
We have expanded several of our parks by adding complementary attractions,
such as campgrounds, lodging facilities and new water parks, in order to
increase attendance and per capita spending. For example, since 1998, we have
added hotels or other lodging facilities to Six Flags Darien Lake, Six Flags
Ohio and Six Flags Holland. Further, we added a water park to Six Flags St.
Louis for the 1999 season and to Six Flags Great Adventure (located between New
York City and Philadelphia) for the 2000 season. In addition, we own
approximately 400 acres adjacent to Six Flags America which are zoned for
entertainment, recreational and residential uses and are available for
complementary uses. In addition, we own over 1,500 undeveloped acres adjacent to
Six Flags Great Adventure suitable for additional complementary purposes. We
also own additional acreage which is suitable for development at several of our
other parks.
The regional theme park industry is highly fragmented. We believe that there
remain numerous acquisition opportunities, both in the U.S. and abroad, through
which we can expand our business. Although we will continue to pursue
acquisitions of regional parks with annual attendance between 300,000 and
1.5 million, we will also consider acquisitions of larger parks or park chains.
We believe we have a number of competitive advantages in acquiring theme
parks. Operators of destination or large regional park chains, other than Cedar
Fair L.P., have not generally been actively seeking to acquire parks in recent
years. Additionally, as a multi-park operator with a track record of
successfully acquiring, improving and repositioning parks, we believe we have
numerous competitive advantages over single-park operators in pursuing
acquisitions and improving the operating results at acquired parks. These
advantages include our ability to:
- exercise group purchasing power (for both operating expenses and capital
assets)
- use the Six Flags brand name and the characters licensed from Warner Bros.
and DC Comics
- achieve administrative economies of scale
- attract greater sponsorship revenue and support from sponsors with
nationally-recognized brands and marketing partners
- recruit and retain superior management
- use our access to capital markets as well as our capital stock as all or a
portion of future acquisition consideration
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ADDRESS
Our executive offices are located at 11501 Northeast Expressway, Oklahoma
City, Oklahoma 73131, (405) 475-2500, and at 122 East 42nd Street, New York, New
York 10168, (212) 599-4690.
THE OFFERING
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Common stock offered by selling
stockholder........................ 1,339,223 shares
Common stock outstanding as of
December 31, 2000.................. 80,043,826 shares
New York Stock Exchange symbol....... PKS
Use of proceeds...................... We will not receive any proceeds from
the sale of the common stock sold by
the selling stockholder.
</TABLE>
The purpose of this offering is to register the resale of the shares of
common stock owned by the selling stockholder. The selling stockholder acquired
these shares in connection with our acquisition on December 6, 2000 of Enchanted
Village, a children's ride park and water park near Seattle, Washington. The
selling stockholder is required to deliver a copy of this prospectus in
connection with any sale of these shares.
7
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER EACH OF THE FOLLOWING RISKS AND ALL OF THE
OTHER INFORMATION SET FORTH IN THIS PROSPECTUS BEFORE DECIDING TO INVEST IN OUR
COMMON STOCK. SOME OF THE FOLLOWING RISKS RELATE PRINCIPALLY TO OUR BUSINESS IN
GENERAL AND THE INDUSTRY IN WHICH WE OPERATE. OTHER RISKS RELATE PRINCIPALLY TO
THE SECURITIES MARKETS AND OWNERSHIP OF OUR SECURITIES. THE RISKS AND
UNCERTAINTIES DESCRIBED BELOW ARE NOT THE ONLY ONES FACING OUR COMPANY.
ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO US OR THAT WE
CURRENTLY BELIEVE TO BE IMMATERIAL MAY ALSO ADVERSELY AFFECT OUR BUSINESS. IF
ANY OF THE FOLLOWING RISKS AND UNCERTAINTIES DEVELOP INTO ACTUAL EVENTS, OUR
BUSINESS, FINANCIAL CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY
ADVERSELY AFFECTED.
SUBSTANTIAL LEVERAGE--OUR HIGH LEVEL OF INDEBTEDNESS AND OTHER MONETARY
OBLIGATIONS REQUIRE THAT A SIGNIFICANT PART OF OUR CASH FLOW BE USED TO PAY
INTEREST AND FUND THESE OTHER OBLIGATIONS.
We have a high level of debt. As of September 30, 2000, Six Flags and its
subsidiaries owed a combined total of approximately $2,224.2 million. We paid
total cash interest on our debt in 2000 of approximately $188 million
($25.9 million of which we paid with funds already deposited in escrow). Through
April 2001, we also have to pay quarterly dividends of $5.8 million on our
mandatorily convertible preferred stock, although we can pay these dividends
either in cash or shares of common stock. At September 30, 2000, we had
approximately $65.7 million of unrestricted cash and cash equivalents and
$90 million of restricted cash.
In addition to making interest payments on debt and dividend payments on our
preferred stock, we must satisfy the following obligations with respect to Six
Flags Over Georgia and Six Flags Over Texas:
- We must make annual distributions to our partners in such parks, which
amounted to approximately $48.6 million in 2000 (of which we received
$14.8 million due to our current ownership interest in such parks) with
similar amounts (adjusted for changes in cost of living) payable in future
years.
- We must spend a minimum of approximately 6% of each park's annual revenues
over specified periods for capital expenditures.
- Each year we must offer to purchase a specified maximum number of
partnership units from our partners in such parks, which in 2000 resulted
in an aggregate payment by us of approximately $3.3 million.
We will use cash flow from the operations at these parks to satisfy the
first two obligations before we use any of our other funds. In addition, we have
deposited in escrow approximately $75.0 million which can be used to satisfy
these obligations. The obligations relating to Six Flags Over Georgia continue
until 2027 and those relating to Six Flags Over Texas continue until 2028.
Our high level of debt and other obligations could have important negative
consequences to us and investors in our securities. These include:
- We may not be able to satisfy all of our obligations.
- We could have problems obtaining necessary financing in the future for
working capital, capital expenditures, debt service requirements,
refinancing or other purposes.
- We will have to use a significant part of our cash flow to make payments
on our debt, to pay the dividends on preferred stock (if we choose to pay
them in cash), and to satisfy the other obligations set forth above, which
may reduce the capital available for operations and expansion.
- Adverse economic or industry conditions may have more of a negative impact
on us.
8
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We expect to be able to meet all of our obligations with existing cash, cash
generated from the parks, and our current committed lines of credit. We believe
that funds from these sources will be sufficient to meet our obligations and
operating needs for the next several years and beyond. However, our business is
subject to factors beyond our control, such as economic conditions, weather and
competition. We cannot be sure that income from our parks will be as high as we
expect. We may have to refinance all or some of our debt or secure new
financing. We can not be sure that we will be able to obtain such refinancing or
new loans on reasonable terms or at all. We have agreed in our credit agreement
and the indentures covering certain of our outstanding notes to limit the amount
of additional debt we will incur.
If we can not meet all of our obligations, the market value and
marketability of our common stock will likely be adversely affected. In
addition, if we become the subject of bankruptcy proceedings, our creditors and
preferred stockholders will be entitled to our assets before any distributions
are made to common stockholders.
RESTRICTIVE COVENANTS--OUR FINANCIAL AND OPERATING ACTIVITIES ARE LIMITED BY
RESTRICTIONS CONTAINED IN THE TERMS OF OUR PRIOR FINANCINGS.
The terms governing our and our subsidiaries' indebtedness impose
significant operating and financial restrictions on us. These restrictions may
significantly limit or prohibit us from engaging in certain transactions,
including the following:
- incurring additional indebtedness
- creating liens on our assets
- paying dividends
- selling assets
- engaging in mergers or acquisitions
- making investments
Our failure to comply with the terms and covenants in our and our
subsidiaries' indebtedness could lead to a default under the terms of those
documents, which would entitle the lenders to accelerate the indebtedness and
declare all amounts owed due and payable. Moreover, the instruments governing
our indebtedness contain cross-default provisions so that a default under any of
our indebtedness will be considered a default under all other indebtedness. If a
cross-default occurs, the maturity of almost all of our indebtedness could be
accelerated and become immediately due and payable. If that happens, we would
not be able to satisfy all of our debt obligations, which would have a
substantial material adverse effect on the value of our common stock and our
ability to continue as a going concern. We cannot assure you that we will be
able to comply with these restrictions in the future or that our compliance
would not cause us to forego opportunities that might otherwise be beneficial to
us.
Further, certain of our subsidiaries are required to comply with specified
financial ratios and tests, including:
- interest expense
- fixed charges
- debt service
- total debt
- secured debt
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We are currently in compliance with all of these financial covenants and
restrictions. However, events beyond our control, such as weather and economic,
financial and industry conditions, may affect our ability to continue meeting
these financial tests and ratios. The need to comply with these financial
covenants and restrictions could limit our ability to expand our business or
prevent us from borrowing more money when necessary.
MANAGEMENT OF GROWTH STRATEGY--WE MAY NOT BE ABLE TO MANAGE OUR RAPID GROWTH OR
INTEGRATE ACQUISITIONS.
We have experienced significant growth through acquisitions and will
continue to consider acquisition opportunities that arise. Such acquisitions
could place a future strain on our operations. Our ability to manage future
acquisitions will depend on our ability to evaluate new markets and investments,
monitor operations, control costs, maintain effective quality controls and
expand our internal management and technical and accounting systems.
To fund future acquisitions, we may need to borrow more money or assume the
debts of acquired companies. In taking on any debt, we must comply with the
restrictions described above with respect to our existing indebtedness. If these
restrictions are not met and we do not receive necessary consents or waivers of
such restrictions, we may be unable to make certain acquisitions.
In the past, in certain circumstances we have used shares of our common
stock to fund all or a portion of the price of acquisitions. In the future, we
may again fund all or part of acquisitions by issuing new shares of our common
stock or other securities which can be converted into common stock. Issuing such
additional shares or convertible securities may cause a decrease in the per
share market price of our common stock.
If we do purchase additional businesses, it may negatively affect our
earnings, at least in the short term. Further, we cannot guarantee that any
future acquisition will generate the earnings or cash flow we expect. As with
any expansion, unexpected liabilities might arise and the planned benefits may
not be realized.
RISK OF ACCIDENTS--THERE IS THE RISK OF ACCIDENTS OCCURRING AT OUR PARKS WHICH
MAY REDUCE ATTENDANCE AND EARNINGS.
Almost all of our parks feature "thrill rides." While we carefully maintain
the safety of our rides, there are inherent risks involved with these
attractions. An accident or an injury at any of our parks may reduce attendance
at that and other parks, causing a drop in revenues.
On March 21, 1999, a raft capsized in the river rapids ride at Six Flags
Over Texas, resulting in one fatality and injuries to ten others. As a result, a
case entitled JERRY L. CARTWRIGHT, ET AL. VS. PREMIER PARKS INC. D/B/A SIX FLAGS
OVER TEXAS, INC. was commenced seeking unspecified damages. The park is covered
by our existing insurance and we don't believe that this incident or this
lawsuit will have a material adverse effect on our financial position,
operations or liquidity.
We maintain insurance of the type and in amounts that we believe is
commercially reasonable and that are available to businesses in our industry. We
maintain multi-layered general liability policies that provide for excess
liability coverage of up to $100.0 million per occurrence. We have no
self-insured retention, except that the self-insurance portion of claims arising
out of occurrences prior to July 1, 1998 at our U.S. parks owned prior to the
Six Flags acquisition is $50,000 per occurrence.
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FACTORS IMPACTING ATTENDANCE--LOCAL CONDITIONS, DISTURBANCES, EVENTS AND NATURAL
DISASTERS CAN ADVERSELY IMPACT PARK ATTENDANCE.
Lower attendance may also be caused by other local conditions or events. For
example:
- In 1994, fewer people attended our Six Flags Magic Mountain park because
of the Los Angeles County earthquake, and the earthquake also
significantly interrupted operation of the park.
- Six Flags Over Georgia suffered a drop in attendance in 1996 as a result
of the 1996 Summer Olympics.
In addition, since some of our parks are near major urban areas and appeal
to teenagers and young adults, there may be disturbances at one or more parks
which negatively affect our image. This may result in lower attendance at the
affected parks. We work with local police authorities on security-related
precautions to prevent such occurrences. We can make no assurance, however, that
these precautions will be able to prevent any such disturbances. We believe that
our ownership of many parks in different geographic locations reduces the
effects of such occurrences on our consolidated results.
ADVERSE WEATHER CONDITIONS--BAD WEATHER CAN ADVERSELY IMPACT ATTENDANCE AT OUR
PARKS; OUR OPERATIONS ARE SEASONAL.
Because most of the attractions at our theme parks are outdoors, attendance
at our parks is adversely affected by bad weather. The effects of bad weather on
attendance are more pronounced at our water parks. Bad weather and forecasts of
bad or mixed weather conditions can reduce the number of people who come to our
parks, which negatively affects our revenues. Although, we believe that our
ownership of many parks in different geographic locations reduces the effect
that adverse weather can have on our consolidated results, we believe our 2000
operating season results were adversely affected by abnormally cold and wet
weather (particularly in June and July) at a large number of our U.S. parks.
Our operations are seasonal. More than 90% of our annual park attendance
occurs during the spring, summer and early autumn months. By comparison, most of
our expenses for maintenance and costs of adding new attractions are incurred
when the parks are closed in the mid to late autumn and winter months. For this
reason, a quarter to quarter comparison is not a good indication of our
performance or of how we will perform in the future. However, the market price
of our common stock may still fluctuate significantly in response to changes in
our quarterly results of operations.
COMPETITION--THE THEME PARK INDUSTRY COMPETES WITH NUMEROUS ENTERTAINMENT
ALTERNATIVES.
Our parks compete with other theme, water and amusement parks and with other
types of recreational facilities and forms of entertainment, including movies,
sports attractions and vacation travel. Our business is also subject to factors
that affect the recreation and leisure industries generally, such as general
economic conditions and changes in consumer spending habits. The principal
competitive factors of a park include location, price, the uniqueness and
perceived quality of the rides and attractions, the atmosphere and cleanliness
of the park and the quality of its food and entertainment.
KEY PERSONNEL--THE LOSS OF KEY PERSONNEL COULD HURT OUR OPERATIONS.
Our success depends upon the continuing contributions of our executive
officers and other key operating personnel, including Kieran E. Burke, our
Chairman and Chief Executive Officer, and Gary Story, our President and Chief
Operating Officer. The complete or partial loss of their services or the
services of other key personnel could adversely affect our business. Although we
have entered into employment agreements with Mr. Burke and Mr. Story (which end
on December 31, 2003), we cannot be certain that we will be able to retain their
services during that or any subsequent period.
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INTERNATIONAL OPERATIONS--OUR INTERNATIONAL OPERATIONS HAVE ADDITIONAL RISKS.
We operate eight parks in Europe and Mexico. We also manage the development
and construction of a new European park. We also may acquire additional parks in
international locations. There are risks to which we are subject that are
inherent in operating abroad. Some examples of these risks can include:
- problems in staffing and managing foreign operations
- fluctuations in currency exchange rates
- political risks
- unexpected changes in regulatory requirements
- potentially detrimental tax consequences in many locations with different
tax laws
During the first nine months of 2000, reported revenues from our European
parks as translated into U.S. dollars were adversely impacted by a decline in
the value of European currencies.
SHARES ELIGIBLE FOR FUTURE SALE--THE PRICE OF OUR COMMON STOCK MAY DECLINE DUE
TO POSSIBLE SALES OF SHARES.
As of December 31, 2000, there were 80,043,826 shares of our common stock
outstanding, all of which are transferable without restriction or further
registration under the Securities Act of 1933, except for any shares held by our
affiliates. In addition, we have reserved and registered under the Securities
Act approximately 7.8 million shares for currently outstanding management-held
options, 2.2 million shares for future option issuances and up to 11.5 million
shares issuable in April 2001 pursuant to our mandatorily convertible preferred
stock.
In addition, other stockholders who own approximately 6.5 million shares of
common stock have the right to require us to register their shares for sale
under the Securities Act. If revenues in 2000 or 2001 at certain of our European
parks reach certain levels, we will be required to issue additional shares of
common stock. We may also issue additional shares of common stock to pay
quarterly dividend payments through April 2001 on our mandatorily convertible
preferred stock (which remaining dividends total $5.8 million). The sale or
expectation of sales of a large number of shares of common stock or securities
convertible into common stock in the public market at any time after the date of
this prospectus might negatively affect the market price of the common stock.
ANTI-TAKEOVER PROVISIONS--ANTI-TAKEOVER PROVISIONS LIMIT THE ABILITY OF
STOCKHOLDERS TO EFFECT A CHANGE IN CONTROL OF SIX FLAGS.
Certain provisions in our Certificate of Incorporation and in our debt
instruments and those of our subsidiaries may have the effect of deterring
transactions involving a change in control of Six Flags, including transactions
in which stockholders might receive a premium for their shares.
Our Certificate of Incorporation provides for the issuance of up to
5,000,000 shares of preferred stock with such designations, rights and
preferences as may be determined from time to time by our board of directors.
The authorization of preferred shares empowers our board of directors, without
further stockholder approval, to issue preferred shares with dividend,
liquidation, conversion, voting or other rights which could adversely affect the
voting power or other rights of the holders of our common stock. If issued, the
preferred stock could be used to discourage, delay or prevent a change of
control of Six Flags.
In addition, we have a rights plan which gives each holder of our common
stock the right to purchase a share of junior preferred stock in certain events
which would constitute a change of control. The rights plan is designed to deter
third parties from attempting to take control of Six Flags.
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In addition, we are subject to the anti-takeover provisions of the Delaware
General Corporation Law, which could have the effect of delaying or preventing a
change of control of Six Flags. Furthermore, upon a change of control, the
holders of substantially all of our outstanding indebtedness are entitled at
their option to be repaid in cash. These provisions may have the effect of
delaying or preventing changes in control or management of Six Flags. All of
these factors could materially adversely affect the price of our common stock.
We hold the exclusive right to use certain Warner Bros. and DC Comics
characters in our theme parks in the United States (except in the Las Vegas
metropolitan area), Canada, Europe and Latin and South America. Warner Bros. can
terminate these licenses under certain circumstances, including the acquisition
of Six Flags by persons engaged in the movie or television industries. This
could deter certain parties from seeking to acquire us.
DIVIDENDS--WE ARE NOT LIKELY TO PAY CASH DIVIDENDS ON OUR COMMON STOCK.
We have not paid dividends on our common stock during the last three years,
and we do not anticipate paying any cash dividends on such stock in the
foreseeable future. Our ability to pay cash dividends is restricted under the
indentures relating to our notes.
USE OF PROCEEDS
The selling stockholder will receive all of the net proceeds from the sale
of the shares of common stock offered under this prospectus. We will not receive
any proceeds from the sale of the selling stockholder's shares of common stock.
SELLING STOCKHOLDER
EPI Realty Holdings, Inc., which is the selling stockholder, may from time
to time offer and sell pursuant to this prospectus any or all of the shares of
common stock offered under this prospectus. The selling stockholder received the
shares of common stock covered by this prospectus as a portion of the purchase
price of our acquisition of Enchanted Village, a children's ride park and water
park in December 2000.
If the selling stockholder sells shares of common stock offered by this
prospectus during a specified period and the proceeds received by the selling
stockholder is less than designated levels, we have agreed to deliver cash or
additional shares to the selling stockholder in the amount of such deficiency.
In connection with the acquisition of Enchanted Village, we agreed to file
the registration statement of which this prospectus forms a part.
The following table sets forth information with respect to the ownership by
the selling stockholder of our shares of common stock.
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
OWNED PRIOR TO OWNED AFTER
NAME OFFERING SHARES OFFERED OFFERING
---- -------------- -------------- ------------
<S> <C> <C> <C>
EPI Realty Holdings, Inc............................ -- 1,339,223 --
</TABLE>
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<PAGE>
PLAN OF DISTRIBUTION
The shares offered hereby are being offered on behalf of EPI Realty
Holdings, Inc., which is the selling stockholder. We will not receive any
proceeds from the selling stockholder's sale of the shares of common stock or by
donees, transferees, pledgees or other successors in interest of such
stockholder that receive shares in a non-sale related transfer. The selling
stockholder will act independently of the Company in making decisions with
respect to the timing, manner and size of each sale.
Any distribution of the shares covered by this prospectus by the selling
stockholder may be effected from time to time in one or more of the following
transactions:
- through brokers, acting as agent in transactions (which may involve block
transactions), in special offerings, in the over-the-counter market, or
otherwise, at market prices obtainable at the time of sale, at prices
related to such prevailing market prices, at negotiated prices or at fixed
prices;
- to dealers or underwriters who acquire shares for their own account and
resell them in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices
determined at the time of sale (any public offering price and any discount
or concessions allowed or reallowed or paid to other dealers may be
changed from time to time);
- directly or through brokers or agents in private sales at negotiated
prices;
- to lenders pledged as collateral to secure loans, credit or other
financing arrangements and any subsequent foreclosure, if any, under those
arrangements; or
- by any other legally available means.
Also, offers to purchase shares covered by this prospectus may be solicited
by agents designated by the selling stockholder from time to time. Dealers,
underwriters or agents participating in an offering made pursuant to this
prospectus and the related registration statement may receive underwriting
discounts or commissions under the Securities Act of 1933, discounts or
concessions may be allowed or reallowed or paid to dealers, and brokers and
agents participating in such transactions may receive brokerage or agent's
commissions fees.
Six Flags has been advised by the selling stockholder that it has not, as of
the date of this prospectus, entered into any arrangement with an underwriter,
agent or broker-dealer for the sale of its shares covered by this prospectus.
The selling stockholder may also sell all or a portion of the shares covered
by this prospectus pursuant to Rule 144 under the Securities Act of 1933, to the
extent that such sales may be made in compliance with that Rule.
The selling stockholder and any agents or broker-dealers that participate
with the selling stockholder in the distribution of any of the shares covered by
this prospectus may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, and any discount or commission received by them and any
profit on the resale of shares covered by this prospectus purchased by them may
be deemed to be underwriting discounts or commissions under the Securities Act
of 1933.
In connection with a sale of shares covered by this prospectus, the
following information will, to the extent then required, be provided in a
prospectus supplement relating to such sale:
- the number of shares to be sold,
- the purchase price,
- the public offering price,
- the name of any underwriter, agent or broker-dealer, and
- any commissions, discounts or other items constituting compensation to
underwriters, agents or broker-dealers with respect to the particular
sale.
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<PAGE>
Six Flags has agreed to pay up to a maximum of $2,500 of the expenses
incident to the registration, offering and sale of the shares to the public
other than selling commissions or discounts of underwriters, broker-dealers or
agents.
An investor may only purchase the shares being offered hereby if such shares
are qualified for sale or are exempt from registration under the applicable
state securities laws of the state in which such prospective purchaser resides.
All or a portion of the shares offered by this Prospectus may be offered for
sale from time to time on the New York Stock Exchange.
LEGAL MATTERS
Our general counsel and an employee, James M. Coughlin, will issue an
opinion to us on certain legal matters relating to the shares of common stock.
EXPERTS
The consolidated financial statements of Six Flags, Inc. and subsidiaries as
of December 31, 1999 and 1998 and for each of the years in the three-year period
ended December 31, 1999, have been incorporated by reference herein in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
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