<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 3, 1999
OR
|_| 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
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SIX FLAGS ENTERTAINMENT CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of 22-3136577
incorporation or organization) (I.R.S. Employer Identification No.)
11501 NORTHEAST EXPRESSWAY, OKLAHOMA CITY, OKLAHOMA 73131
(Address of principal executive offices, including zip code)
(405) 475-2500
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date:
At November 4, 1999, Six Flags Entertainment Corporation had
outstanding 1,000 shares of Common Stock.
This Registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced
disclosure format.
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<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
SIX FLAGS ENTERTAINMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
OCTOBER 3, 1999 JANUARY 3, 1999
-------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............. $ 108,565,000 $ 46,112,000
Accounts receivable ................... 33,473,000 10,399,000
Receivable from affiliate ............. 17,832,000 --
Inventories ........................... 17,588,000 13,685,000
Prepaid expenses ...................... 8,177,000 5,981,000
Restricted-use investments ............ 190,951,000 183,342,000
-------------- --------------
Total current assets ......... 376,586,000 259,519,000
Property and equipment, at cost, net ..... 999,959,000 892,913,000
Deferred financing costs, net ............ 11,001,000 12,346,000
Deposits and other assets ................ 50,137,000 51,284,000
Intangible assets, net ................... 1,134,927,000 1,160,941,000
-------------- --------------
Total assets ................. $2,572,610,000 $2,377,003,000
============== ==============
</TABLE>
See accompanying notes to consolidated financial statements
-2-
<PAGE>
ITEM 1 -- FINANCIAL STATEMENTS (CONTINUED)
SIX FLAGS ENTERTAINMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
OCTOBER 3, 1999 JANUARY 3, 1999
-------------- --------------
(UNAUDITED)
<S> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable ................................. $ 20,063,000 $ 12,664,000
Accrued interest payable ......................... 2,340,000 13,547,000
Other accrued liabilities ........................ 44,827,000 59,389,000
Current maturities of long-term debt ............. 191,951,000 183,877,000
Current portion of capitalized lease obligations . 493,000 493,000
-------------- --------------
Total current liabilities ..................... 259,674,000 269,970,000
Long-term debt and capitalized lease obligations:
Notes payable .................................... 170,000,000 491,167,000
Credit facilities ................................ 408,000,000 408,750,000
Capitalized lease obligations .................... 163,000 557,000
Other long-term liabilities ......................... 43,880,000 46,946,000
Deferred income taxes ............................... 145,356,000 99,333,000
-------------- --------------
Total liabilities ............................. 1,027,073,000 1,316,723,000
Stockholder's equity:
Common stock ..................................... -- --
Additional paid-in-capital ....................... 1,474,055,000 1,031,598,000
Retained earnings ................................ 71,482,000 28,682,000
-------------- --------------
Total stockholder's equity .................... 1,545,537,000 1,060,280,000
-------------- --------------
Total liabilities and stockholder's equity .... $2,572,610,000 $2,377,003,000
============== ==============
</TABLE>
See accompanying notes to consolidated financial statements
-3-
<PAGE>
ITEM 1 -- FINANCIAL STATEMENTS (CONTINUED)
SIX FLAGS ENTERTAINMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED OCTOBER 3, 1999 AND SEPTEMBER 27, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTH THREE MONTH
PERIOD ENDED PERIOD ENDED
OCTOBER 3, 1999 SEPTEMBER 27, 1998
--------------- ------------------
<S> <C> <C>
Revenue:
Theme park admissions ................ $ 130,998,000 $ 121,424,000
Theme park food, merchandise and other 115,023,000 116,493,000
------------- -------------
Total revenue ..................... 246,021,000 237,917,000
------------- -------------
Operating costs and expenses:
Operating expenses ................... 69,199,000 69,362,000
Selling, general and administrative .. 16,255,000 21,577,000
Costs of products sold ............... 23,298,000 25,107,000
Depreciation and amortization ........ 26,359,000 22,801,000
------------- -------------
Total operating costs and expenses 135,111,000 138,847,000
------------- -------------
Income from operations ............ 110,910,000 99,070,000
------------- -------------
Other income (expense):
Interest expense ..................... (15,098,000) (21,003,000)
Interest income ...................... 3,702,000 3,878,000
------------- -------------
Total other income (expense) ...... (11,396,000) (17,125,000)
------------- -------------
Income before income tax .......... 99,514,000 81,945,000
Income tax expense ..................... 42,383,000 35,525,000
------------- -------------
Net income ........................ $ 57,131,000 $ 46,420,000
============= =============
</TABLE>
See accompanying notes to consolidated financial statements
-4-
<PAGE>
ITEM 1 -- FINANCIAL STATEMENTS (CONTINUED)
SIX FLAGS ENTERTAINMENT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED OCTOBER 3, 1999,
180-DAY PERIOD ENDED SEPTEMBER 27, 1998,
AND 93-DAY PERIOD ENDED MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
POST-ACQUISITION PRE-ACQUISITION
180-DAY 93-DAY
PERIOD ENDED PERIOD ENDED PERIOD ENDED
OCTOBER 3, 1999 SEPTEMBER 27, 1998 MARCH 31, 1998
------------- ------------- -------------
<S> <C> <C> <C>
Revenue:
Theme park admissions .............................. $ 275,356,000 $ 233,934,000 $ 15,047,000
Theme park food, merchandise and other ............. 217,955,000 197,046,000 7,792,000
------------- ------------- -------------
Total revenue ................................... 493,311,000 430,980,000 22,839,000
------------- ------------- -------------
Operating costs and expenses:
Operating expenses ................................. 163,119,000 135,797,000 56,307,000
Selling, general and administrative ................ 68,899,000 50,912,000 54,711,000
Costs of products sold ............................. 45,208,000 44,638,000 2,193,000
Depreciation and amortization ...................... 75,909,000 44,315,000 17,629,000
------------- ------------- -------------
Total operating costs and expenses .............. 353,135,000 275,662,000 130,840,000
------------- ------------- -------------
Income (loss) from operations ................... 140,176,000 155,318,000 (108,001,000)
------------- ------------- -------------
Other income (expenses):
Interest expense ................................... (59,488,000) (44,920,000) (22,585,000)
Interest income .................................... 9,057,000 6,614,000 77,000
Equity in operation of theme park partnerships ..... -- -- (13,152,000)
------------- ------------- -------------
Total other income (expense) .................... (50,431,000) (38,306,000) (35,660,000)
------------- ------------- -------------
Income (loss) before income tax and extraordinary
loss ............................................ 89,745,000 117,012,000 (143,661,000)
Income tax expense (benefit) ......................... 46,476,000 53,499,000 --
------------- ------------- -------------
Income (loss) before extraordinary item ............ 43,269,000 63,513,000 (143,661,000)
Extraordinary loss on extinguishment of debt, net of
income tax benefit of $312,000 .................. (469,000) -- --
============= ============= =============
Net income (loss) ............................... $ 42,800,000 $ 63,513,000 $(143,661,000)
============= ============= =============
</TABLE>
See accompanying notes to consolidated financial statements
-5-
<PAGE>
ITEM 1 -- FINANCIAL STATEMENTS (CONTINUED)
SIX FLAGS ENTERTAINMENT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED OCTOBER 3, 1999, 180 DAY PERIOD ENDED SEPTEMBER 27, 1998 AND
93 DAY PERIOD ENDED MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
POST-ACQUISITION
(NOTE 1) PRE-ACQUISITION
NINE MONTHS 180-DAY (NOTE 1)
ENDED PERIOD ENDED 93-DAY PERIOD ENDED
OCTOBER 3, 1999 SEPTEMBER 27, 1998 MARCH 31, 1998
--------------- ------------------ --------------
<S> <C> <C> <C>
Cash flow from operating activities:
Net income (loss) .......................................... $ 42,800,000 $ 63,513,000 $(143,661,000)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization ........................... 75,909,000 44,315,000 17,629,000
Extraordinary loss on early extinguishment of debt ...... 781,000 -- --
Equity in operations of theme park partnerships ......... -- -- 13,152,000
Deferred income tax ..................................... 46,023,000 53,499,000 --
Interest accretion on notes payable ..................... 2,900,000 8,394,000 11,932,000
Interest accretion on restricted use investment ......... (7,609,000) (4,845,000) --
Amortization of debt issuance costs ..................... 1,514,000 986,000 1,027,000
(Increase) decrease in accounts receivable .............. (23,074,000) (25,304,000) 1,742,000
Increase in receivable from affiliate ................... (17,832,000) -- --
(Increase) decrease in inventories and prepaid expenses . (6,099,000) 181,000 (24,852,000)
Increase (decrease) in accounts payable and accrued
liabilities ........................................... (18,462,000) 2,362,000 68,234,000
Other, net .............................................. 1,147,000 1,327,000 18,000
------------- ------------- -------------
Net cash provided by (used in) operating activities ..... 97,998,000 144,428,000 (54,779,000)
------------- ------------- -------------
Cash flow from investing activities:
Additions to property and equipment ........................ (135,204,000) (25,815,000) (25,335,000)
Acquisition of theme park assets ........................... (20,656,000) -- --
Transfer of interests in theme park partnerships to Premier -- 208,082,000 --
Purchase of partnership parks limited partnership units .... -- -- (117,652,000)
Purchase of restricted use investments ..................... -- (176,028,000) --
Prepayment of SFOT partnership obligation .................. -- -- (13,866,000)
------------- ------------- -------------
Net cash provided by (used in) investing activities ..... (155,860,000) 6,239,000 (156,853,000)
------------- ------------- -------------
Cash flow from financing activities:
Proceeds from borrowings ................................... -- 580,000,000 240,000,000
Repayment of long-term debt ................................ (320,984,000) (588,500,000) (30,503,000)
Payment of debt issuance costs ............................. (169,000) (13,212,000) --
Capital contribution ....................................... 441,468,000 13,669,000 4,000,000
------------- ------------- -------------
Net cash provided by (used in) financing activities ..... 120,315,000 (8,043,000) 213,497,000
------------- ------------- -------------
Increase (decrease) in cash and cash equivalents ............. 62,453,000 142,624,000 1,865,000
Cash and cash equivalents at beginning of period ............. 46,112,000 18,670,000 16,805,000
------------- ------------- -------------
Cash and cash equivalents at end of period ................... $ 108,565,000 $ 161,294,000 $ 18,670,000
============= ============= =============
</TABLE>
See accompanying notes to consolidated financial statements
-6-
<PAGE>
SIX FLAGS ENTERTAINMENT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL -- BASIS OF PRESENTATIOn
At October 3, 1999, Six Flags Entertainment Corporation ("SFEC," and
together with its subsidiaries at that date, the "Company" or "Six Flags") owned
100% of the common stock of S.F. Holdings, Inc. ("SF Holdings") which owns 100%
of the common stock of Six Flags Theme Parks Inc. ("SFTP"). On November 5, 1999,
SF Holdings was merged into SFEC, and SFEC was merged into Premier Parks
Operations Inc. ("Premier Operations"), a wholly-owned subsidiary of Premier
Parks Inc. ("Premier"). See Note 7.
Prior to April 1, 1998, Six Flags operated twelve "Six Flags" branded
theme parks in eight locations throughout the United States. For all periods
presented, nine of the theme parks, Six Flags Great Adventure and Wild Safari
Animal Park (New York-Philadelphia), Six Flags Great America
(Chicago-Milwaukee), Six Flags Magic Mountain and Six Flags Hurricane Harbor
(Los Angeles), Six Flags AstroWorld and Six Flags Waterworld (Houston), Six
Flags St. Louis (St. Louis) and Six Flags Hurricane Harbor (Dallas-Ft. Worth)
were owned by Six Flags. Six Flags Fiesta Texas, located in San Antonio, Texas,
is leased by a limited partnership of which a subsidiary of Six Flags is a
general partner and manages the park. On October 30, 1998, Six Flags purchased
the minority interest in the limited partnership and title to the park. Two
parks -- Six Flags Over Texas (Dallas-Ft. Worth) and Six Flags Over Georgia
(Atlanta) (the "Partnership Parks") -- are owned by limited partnerships of
which the managing general partner was (prior to April 1, 1998) a wholly-owned
subsidiary of Six Flags. On April 1, 1998, Premier purchased all of the stock of
SFEC (the "Acquisition"). At that time, Six Flags' interests in the Partnership
Parks were transferred to Premier. See Note 3.
Management's Discussion and Analysis of Financial Condition and Results
of Operations which follow these notes contains additional information on the
results of operations and the financial position of the Company. Those comments
should be read in conjunction with these notes. The Company's annual report on
Form 10-K for the year ended January 3, 1999 includes additional information
about the Company, its operations and its financial position, and should be
referred to in conjunction with this quarterly report on Form 10-Q. The
information furnished in this report reflects all adjustments (all of which are
normal and recurring) which are, in the opinion of management, necessary to
present a fair statement of the results for the periods presented.
Results of operations for the three-month and nine-month periods ended
October 3, 1999 are not indicative of the results expected for the full year. In
particular, the Company's theme park operations contribute most of their annual
revenue during the period from Memorial Day to Labor Day each year.
As discussed above, Premier purchased SFEC on April 1, 1998. In
accordance with Securities and Exchange Commission Staff Accounting Bulletin No.
54 ("SAB No. 54"), SFEC has "pushed down" Premier's purchase price in revaluing
the assets and liabilities of SFEC. According to the provisions of SAB No. 54,
purchase transactions that result in an entity becoming substantially
wholly-owned require a new basis of accounting for the purchased assets and
liabilities. As a result of the purchase, SFEC recorded the following purchase
price adjustments as of April 1, 1998 (amounts in thousands):
<TABLE>
<CAPTION>
INCREASE (DECREASE)
-------------------
<S> <C>
Current assets $(15,621)
Debt issuance costs (19,597)
Property and equipment 322,183
Intangible assets 1,006,606
Deposit and other assets 14,299
Accrued liabilities 26,599
Long-term debt 51,592
Deferred income taxes 64,820
Stockholder's equity 1,164,859
</TABLE>
-7-
<PAGE>
Six Flags Entertainment Corporation
Notes to Consolidated Financial Statements (Continued)
The consolidated financial statements of SFEC for the period from
December 29, 1997 to March 31, 1998 reflect the accounting basis used by SFEC
prior to its acquisition by Premier. The financial statements of SFEC subsequent
to April 1, 1998 reflect the accounting basis for the purchased assets and
liabilities used by SFEC subsequent to its acquisition by Premier. The vertical
line that separates the SFEC consolidated financial statements emphasizes that
the new basis of accounting used by SFEC after the purchase by Premier is not
comparable to the basis of accounting used by SFEC prior to the purchase by
Premier.
RECLASSIFICATIONS
Certain items in the January 3, 1999 consolidated balance sheet and
consolidated statements of operations for the Post-Acquisition 180-day period
ended September 27, 1998 and the Pre-Acquisition 93-day period ended March 31,
1998 have been reclassified to conform to the October 3, 1999 presentation.
2. ACCOUNTING CHANGES
INVESTMENT IN THEME PARK PARTNERSHIPS
Prior to the Acquisition by Premier, Six Flags, through two
subsidiaries, was the general partner in the Partnerships Parks. Six Flags
accounted for the parks as co-ventures, I.E., the revenues and expenses
(excluding partnership depreciation) were included in Six Flags' consolidated
statements of operations and the net amounts distributed to the limited partners
were deducted as operating expenses. Except for the limited partnership units
purchased by Six Flags from unrelated limited partners, Six Flags had no rights
or title to the Partnership Parks' assets or to the proceeds from any sale of
the Partnership Parks' assets.
On April 1, 1998, Six Flags changed its method of accounting for the
Partnership Parks to the equity method of accounting as prescribed by Accounting
Principles Board Opinion 18 and related interpretations. The change was applied
retroactively to the beginning of Six Flags' 1998 fiscal year, and accordingly,
the consolidated statement of operations for the Pre-Acquisition 1998 period
reflects Six Flags' interests in the operations of the Partnership Parks on the
equity method. Six Flags' interests in the Partnership Parks were transferred to
Premier on April 1, 1998 and therefore, the consolidated statements of
operations for the Post-Acquisition 1998 and 1999 periods, does not include
results of Premier's ownership interests in the Partnership Parks. Six Flags
changed its accounting for the Partnership Parks to reflect in operations
revenues and costs and expenses of only those parks controlled by Six Flags
through majority ownership. This accounting change had no cumulative effect on
Six Flags' accumulated deficit as of December 28, 1997.
ACCOUNTING FOR OFF-SEASON EXPENSES
On April 1, 1998, Six Flags changed its method of accounting for
off-season expenses related to park operations. Prior to the Acquisition by
Premier, Six Flags deferred interim period costs related to park operations and
charged such costs to interim periods based on estimated annual revenues,
substantially all of which were generated in the second and third quarters of
the year. No costs were deferred at the end of a fiscal year.
The change was applied retroactively to the beginning of Six Flags'
1998 fiscal year to conform with Premier's accounting policy for off-season
expenses. This accounting change had no cumulative effect on Six Flags'
accumulated deficit as of December 28, 1997. This accounting change had the
effect of increasing the net loss for the 1998 period by approximately
$96,654,000.
3. ACQUISITION OF SFEC
On April 1, 1998, Premier acquired all of the outstanding capital stock
of SFEC for $976,000,000, paid in cash. In addition, Premier repaid at closing,
assumed or refinanced approximately $1,032,717,000 of Company debt (including
approximately $285,000,000 in aggregate principal amount at maturity of Six
Flags 12 1/4% Series A
-8-
<PAGE>
Six Flags Entertainment Corporation
Notes to Consolidated Financial Statements (Continued)
Senior Subordinated Discount Notes due 2005 (the "SFTP Notes") and
approximately $164,703,000 accreted value at April 1, 1998 (carrying value of
$190,951,000 as of October 3, 1999) of SFEC Zero Coupon Notes (the "Old SFEC
Notes")). Premier funded the Acquisition with the proceeds of concurrent
public offerings and bank facilities (including a new $472,000,000 credit
facility of Six Flags (the "Six Flags Credit Facility") and $170,000,000 of
8 7/8% Senior Notes due 2006 of SFEC (the "SFEC Notes")). See Note 4. The
proceeds of the SFEC Notes, together with cash contributed by Premier, were
deposited in escrow and invested in restricted-use investments to provide for
the repayment in full at or prior to maturity in December 1999 of the Old
SFEC Notes. Pursuant to the Acquisition, Six Flags transferred to Premier all
of its interests in the limited partnerships that own the Partnership Parks,
for $46,000,000 in cash and Premier's payment of $165,686,000 of SFEC debt.
Also in connection with the Acquisition, Premier and Warner Bros. Consumer
Products Division entered into a long-term licensing agreement that gives
Premier (and its subsidiaries, including Six Flags and Premier Parks
Operations Inc.) the exclusive theme park usage rights in the U.S. and Canada
(excluding the Las Vegas, Nevada metropolitan area) for all Warner Bros. and
DC Comics animated and comic book characters.
The following summarized unaudited pro forma results of operations for
the nine months ended September 27, 1998, assume that the Acquisition, the
transfer and sale of the interests of Six Flags in the Partnership Parks and the
related financings occurred as of the beginning of that period.
<TABLE>
<S> <C>
Total revenues.................................................. $ 453,819,000
Net income...................................................... $ 8,327,000
</TABLE>
4. LONG-TERM INDEBTEDNESS
(a) On April 1, 1998, SFEC issued $170.0 million principal amount of
SFEC Notes, which are senior obligations of SFEC. The SFEC Notes are guaranteed
on a fully subordinated basis by Premier. The SFEC Notes require annual interest
payments of approximately $15.1 million (8 7/8% per annum) and, except in the
event of a change of control of SFEC and certain other circumstances, do not
require any principal payments prior to their maturity in 2006. The SFEC Notes
are redeemable, at SFEC's option, in whole or in part, at any time on or after
April 1, 2002, at varying redemption prices. The net proceeds of the SFEC Notes,
together with other funds, were invested in restricted-use investment securities
for the repayment in full on or before December 15, 1999 of the Old SFEC Notes
(with a carrying value of $191.0 million at October 3, 1999).
The indenture under which the SFEC Notes were issued limits the ability
of SFEC and its subsidiaries to dispose of assets; incur additional indebtedness
or liens; pay dividends; engage in mergers or consolidations; and engage in
certain transactions with affiliates.
(b) The SFTP Notes were discharged in full on June 30, 1999 out of the
proceeds of a capital contribution of $320.3 million to SFEC. The extinguishment
resulted in an extraordinary loss of $0.5 million, net of a $0.3 million tax
benefit. The SFTP Notes required interest payments of approximately $34.9
million per annum (12 1/4% per annum). As a result of the application of
purchase accounting, the carrying value of the SFTP Senior Subordinated Notes
was increased to $318.5 million, which was the estimated fair value at the
acquisition date of April 1, 1998. The premium that resulted from the adjustment
of the carrying value was amortized as a reduction to interest expense over the
remaining term of the SFTP Senior Subordinated Notes, resulting in an effective
interest rate of approximately 9 3/4%.
(c) On April 1, 1998, SFTP entered into the Six Flags Credit Facility,
pursuant to which it had outstanding $409.0 million at October 3, 1999. The Six
Flags Credit Facility included ( i) a $100.0 million five-year revolving credit
facility used to refinance Six Flags bank indebtedness as of April 1, 1998 and
for working capital and other general corporate purposes (of which $38.0 million
was outstanding on October 3, 1999); and (ii) a $372.0 million term loan
facility (the "Term Loan Facility"), of which $371.0 million was outstanding on
October 3, 1999. Borrowings under the Term Loan Facility will mature on November
30, 2004. However, aggregate principal payments and reductions of $1.0 million
were required during each of the first, second, third and fourth years;
aggregate principal payments of $25.0 million and $40.0 million are required in
years five and six, respectively, and $303.0 million at maturity. Borrowings
under the Six Flags Credit Facility were secured by substantially all of the
-9-
<PAGE>
Six Flags Entertainment Corporation
Notes to Consolidated Financial Statements (Continued)
assets of SFTP and its subsidiaries and a pledge of the stock of SFTP, and were
guaranteed by such subsidiaries and SFEC.
The Six Flags Credit Facility contained restrictive covenants that,
among other things, limited the ability of SFTP and its subsidiaries to dispose
of assets; incur additional indebtedness or liens; pay dividends, except that
(subject to covenant compliance) dividends were permitted to allow SFEC to meet
interest obligations with respect to the SFEC Notes and to permit Premier to
meet a portion of its interest obligations with respect to its 9 3/4% New Notes,
a portion of the proceeds of which were used to discharge the SFTP Notes (See
Note 4b); repurchase stock; make investments; engage in mergers or
consolidations and engage in certain transactions with subsidiaries and
affiliates. In addition, the Six Flags Credit Facility required that SFTP comply
with certain specified financial ratios and tests. On November 5, 1999, the
Company refinanced the indebtedness outstanding under the Six Flags Credit
Facility. See Note 7.
5. COMMITMENTS AND CONTINGENCIES
In December 1998, a final judgment of $197.3 million in compensatory
damages was entered against SFEC, SFTP, Six Flags Over Georgia, Inc. and Time
Warner Entertainment Company, L.P. ("TWE"), and a final judgment of $245.0
million in punitive damages was entered against TWE and of $12.0 million in
punitive damages was entered against the referenced Six Flags entities. TWE has
appealed the judgments. The judgments arose out of a case entitled SIX FLAGS
OVER GEORGIA, INC. AND SIX FLAGS THEME PARKS, INC. V. SIX FLAGS FUND, LTD., AND
AVRAM SALKIN, AS TRUSTEE OF THE CLAIMS TRUST based on certain disputed
partnership affairs prior to the Acquisition at Six Flags Over Georgia,
including alleged breaches of fiduciary duty. The sellers in the Acquisition,
including Time Warner Inc., have agreed to indemnify the Company against any and
all liabilities arising out of this litigation.
The Company is party to various other legal actions arising in the
normal course of business. Matters that are probable of unfavorable outcome to
the Company and which can be reasonably estimated are accrued. Such accruals are
based on information known about the matters, the Company's estimates of the
outcomes of such matters and its experience in contesting, litigating and
settling similar matters.
None of the other actions are believed by management to involve amounts
that would be material to the Company's consolidated financial condition,
operations or liquidity after consideration of recorded accruals.
6. BUSINESS SEGMENTS
Both previous and current management managed the Company's operations
on an individual park location basis. Discrete financial information is
maintained for each park and provided to the Company's management for review and
as a basis for decision-making. The primary performance measure used to allocate
resources is earnings before interest, tax expense, depreciation and
amortization ("EBITDA"). All of the Company's parks provide similar products and
services through a similar process to the same class of customer through a
consistent method. As such, the Company has only one reportable segment --
operation of theme parks. The following tables present segment financial
information, a reconciliation of the primary segment performance measure to
income (loss) before income taxes and a reconciliation of theme park revenues to
consolidated total revenues. Park level expenses exclude all noncash operating
expenses, principally depreciation and amortization. The results presented for
the nine months ended September 27, 1998 include results of both the
Pre-Acquisition and Post-Acquisition periods.
-10-
<PAGE>
Six Flags Entertainment Corporation
Notes to Consolidated Financial Statements (Continued)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------------------------------------
OCTOBER 3, SEPTEMBER 27, OCTOBER 3, SEPTEMBER 27,
1999 1998 1999 1998
---------- ------------- ---------- -------------
(IN THOUSANDS) (IN THOUSANDS)
<S> <C> <C> <C> <C>
Theme park revenue ................ 246,021 237,917 493,311 463,987
Theme park cash expenses .......... 107,181 106,925 270,045 297,856
-------- -------- -------- --------
Aggregate park EBITDA ............. 138,840 130,992 223,266 166,131
Amortization of investment in theme
park partnerships ............... -- -- -- (819)
Unallocated net expenses, including
corporate and other expenses .... (1,571) (9,121) (7,181) (69,203)
Depreciation and amortization ..... (26,359) (23,801) (75,909) (61,944)
Interest expense .................. (15,098) (21,003) (59,488) (67,505)
Interest income ................... 3,702 3,878 9,057 6,691
-------- -------- -------- --------
Income (loss) before income taxes . 99,514 81,945 89,745 (26,649)
======== ======== ======== ========
Theme park revenue ................ 246,021 237,917 493,311 463,987
Theme park revenue from parks
accounted for under the equity
method .......................... -- -- -- (10,168)
-------- -------- -------- --------
Consolidated total revenue ........ 246,021 237,917 493,311 453,819
======== ======== ======== ========
</TABLE>
7. SUBSEQUENT EVENTS
On November 5, 1999, the Company entered into the New Credit Facility
and, in connection therewith, SFEC was merged into Premier Operations, another
wholly-owned subsidiary of Premier. The New Credit Facility includes a $300
million five-year revolving credit facility, a $300 million five-and-one-half-
year multicurrency facility and a $600 million six-year term loan. Borrowings
under the revolving credit facility must be repaid in full for thirty
consecutive days each year. The multicurrency facility, which permits optional
prepayments and refinancings, provides for quarterly reductions in the committed
amount of 2.5% of the outstanding amount thereof commencing on December 31,
2001, 5.0% commencing on December 31, 2002, 7.5% commencing on December 31, 2003
and 20.0% commencing on December 31, 2004. The multicurrency facility must be
repaid to the extent amounts then outstanding exceed such reduced commitment
levels. The term loan facility requires quarterly repayments of 0.25% thereof
commencing on December 31, 2001 and 24.25% commencing on December 31, 2004. The
principal borrower under the facility is SFTP, and borrowings under the New
Credit Facility are guaranteed by Premier, Premier Operations and all of
domestic subsidiaries and are secured by substantially all of Premier
Operations' assets.
The New Credit Facility contains restrictive covenants that, among
other things, limit the ability of Premier Operations and its subsidiaries to
dispose of assets; incur additional indebtedness or liens; repurchase stock;
make investments; engage in mergers or consolidations and pay dividends, except
that (subject to covenant compliance) dividends will be permitted to allow
Premier to meet cash interest obligations with respect to its senior notes, cash
dividend payments on its mandatorily convertible preferred stock and its
obligations to the limited partners in the Partnership Parks; engage in certain
transactions with subsidiaries and affiliates. In addition, the New Credit
Facility requires that Premier Operations comply with certain specified
financial ratios and tests.
On November 5, 1999, the Company repaid all amounts outstanding under
the Six Flags Credit Facility from a portion of a $892.0 million borrowing made
by SFTP under the New Credit Facility. The termination of the Six Flags Credit
Facility will result in an extraordinary loss in the fourth quarter of 1999
solely in respect of the debt issuance costs related thereto.
-11-
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
GENERAL
Prior to the Acquisition, the Company was a general partner in the
limited partnerships that owned the Partnership Parks. For the historical
periods prior to the Acquisition, the Company accounted for the Partnership
Parks as co-ventures, I.E., their revenues and expenses (excluding partnership
depreciation) were included in the Company's consolidated statements of
operations and the net amounts distributed to the limited partners were deducted
as expenses.
In connection with the Acquisition, the Company transferred its
interests in the Partnership Parks to Premier for cash and assumption of debt.
Accordingly, cash flows from these parks will not be available to service the
debt of the Company (including the SFEC Notes, the SFTP Notes and borrowings
under the Six Flags Credit Facility) and the Company has no continuing interest
in the revenues or cash flows of the Partnership Parks. However, the Company is
a guarantor of certain obligations to the limited partners of the Partnership
Parks. Historical results for the first quarter of 1998 of the Company include
the results of the Partnership Parks which were transferred to Premier as part
of the Acquisition.
Results of operations for the three-month and nine-month periods ended
October 3, 1999 are not indicative of the results expected for the full year. In
particular, the Company's theme park operations contribute most of their annual
revenue during the period from Memorial Day to Labor Day each year.
THREE MONTHS ENDED OCTOBER 3, 1999 VS. THREE MONTHS ENDED SEPTEMBER 27,
1998
Revenue in the third quarter of 1999 totaled $246.0 million compared to
$237.9 million for the third quarter of 1998. The $8.1 million (3.4%) increase
in 1999 revenue compared to 1998 resulted primarily from the inclusion of the
results of the Splashtown Water Park in Houston, Texas acquired in the second
quarter of 1999 ("Splashtown") and from a 9.7% increase in attendance at the
other parks owned by the Company.
Operating expenses were $69.2 million in the 1999 quarter ($68.2
million excluding Splashtown) as compared to $69.4 million for 1998. As a
percentage of revenues, operating expenses represented 28.1% and 29.2%
respectively, in the 1999 and 1998 quarters.
Selling, general and administrative expenses for the third quarter of
1999 decreased $5.3 million (24.5%) compared to expenses for the third quarter
of 1998. The decrease in selling, general and administrative expenses in the
1999 period resulted from continued reduced advertising expense in 1999 as
compared to the 1998 period and from reduced corporate level expenditures,
including staffing, subsequent to the April 1, 1998 acquisition. As a
percentage of revenues, these expenses decreased from 9.1% in the 1998
quarter to 6.6% in the 1999 quarter.
Costs of products sold in the 1999 period decreased $1.8 million
compared to expenses for the second quarter of 1998. As a percentage of food,
merchandise and other spending, cost of goods sold represented 20.3% in 1999, as
compared to 21.6% in 1998.
Depreciation and amortization expense for the second quarter of 1999
increased $3.6 million compared to the second quarter of 1998, primarily
attributable to the Company's ongoing capital program. Interest expense, net
decreased $5.7 million compared to the second quarter of 1998, as a result of
the retirement of the SFTP Notes on June 30, 1999.
Income tax expense was $42.4 million for the second quarter of 1999
compared to $35.5 million for the second quarter of 1998. The effective tax rate
for the second quarter of 1999 was 42.6% compared to 43.4% for the second
quarter of 1998. The Company's quarterly effective tax rate will vary from
period-to-period based upon the
-12-
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
inherent seasonal nature of the theme park business, as a result of permanent
differences associated with goodwill amortization for financial purposes and the
non-deductible portion of the amortization for tax purposes.
NINE MONTHS ENDED OCTOBER 3, 1999 VS. AGGREGATE NINE MONTHS ENDED
SEPTEMBER 27, 1998.
The table below sets forth certain financial information with respect to the
Company for the nine months ended October 3, 1999 and for the aggregate nine
month period ended September 27, 1998 and on a pro forma basis for such period
with respect to (i) the transfer of the Company's interest in the Partnership
Parks, and (ii) the elimination of deferred compensation expenses arising out of
the exercise of stock options in connection with the Acquisition, in each case
as if the Acquisition had occurred on December 29, 1997:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 27, 1998
------------------------------------------------------------
POST-ACQUISITION POST-ACQUISITION PRE-ACQUISITION
NINE MONTHS 180-DAY PERIOD 3-DAY PERIOD
ENDED ENDED ENDED
OCTOBER 3, SEPTEMBER 27, MARCH 31, PRO FORMA COMPANY
1999 1998 1998 ADJUSTMENTS PRO FORMA
--------- --------- --------- ----------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Revenues:
Theme park admissions .............. $ 275,356 $ 233,934 $ 15,047 $ -- $ 248,981
Theme park food, merchandise
and other ........................ 217,955 197,046 7,792 -- 204,838
--------- --------- --------- --------- ---------
Total revenue ...................... 493,311 430,980 22,839 -- 453,819
Operating costs and expense:
Operating expenses ................. 163,119 135,797 56,307 (10,628) 181,476
Selling, general and administrative 68,899 50,912 54,711 (35,433) 70,190
Costs of products sold ............. 45,208 44,638 2,193 -- 46,831
Depreciation and amortization ...... 75,909 44,315 17,629 -- 61,944
--------- --------- --------- --------- ---------
Total operating costs and expenses . 353,135 275,662 130,840 (46,061) 360,441
Income (loss) from operations ...... 140,176 155,318 (108,001) 46,061 93,378
Other income (expense):
Interest expense, net .............. (50,431) (38,306) (22,508) -- (60,814)
Equity in operations of theme park
partnerships ....................... -- -- (13,152) 13,152 --
--------- --------- --------- --------- ---------
Total other income (expense) ....... (50,431) (38,306) (35,660) 13,152 (60,814)
Income (loss) before taxes ......... 89,745 117,012 (143,661) 59,213 32,564
Income tax expense (benefit) ....... 46,476 53,499 -- (32,077) 21,422
--------- --------- --------- --------- ---------
Income (loss) before
extraordinary item ................. $ 43,269 $ 63,513 $(143,661) $ 91,290 $ 11,142
========= ========= ========= ========= =========
</TABLE>
Revenue in the first nine months of 1999 totaled $493.3 million ($486.5
million excluding Splashtown) compared to $453.8 million pro forma for the first
nine months of 1998. The $32.7 million (7.2%) increase in 1999 revenue
(excluding Splashtown) compared to pro forma revenue for the 1998 period
resulted primarily from an aggregate same park attendance increase of 2.2
million (15.7%) and substantial season pass sales, resulting in increased
admission and in-park revenues.
Operating expenses for the first nine months of 1999 (excluding
Splashtown) were $161.2 million, a decrease of $20.3 million compared to pro
forma expenses for the first nine months of 1998. The 11.2% decrease compared to
pro forma expenses for 1998 resulted primarily from continued operating
efficiencies realized at the Six Flags parks subsequent to their acquisition on
April 1, 1998. Comparing 1999 actual (excluding Splashtown) to 1998 pro forma as
a percentage of revenues, these expenses were 33.1% and 40.0%, respectively.
-13-
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Selling, general and administrative expenses for the first nine months
of l999 (excluding Splashtown) were $68.1 million, a decrease of $2.1 million
compared to pro forma expenses for the first nine months of 1998. The decrease
compared to pro forma expenses for 1998 resulted from increased advertising
expense offset by a decrease in other selling, general and administrative
expenses. The increase in advertising expenditures reflects a return to
historical advertising levels of expenditures at the Six Flags parks. The
decrease in remaining selling, general and administrative expenses in the 1999
period resulted primarily from reduced corporate level expenditures, including
staffing, related to the closing of the former Six Flags corporate office
subsequent to the April 1, 1998 acquisition, as well as certain other savings,
including insurance. Comparing 1999 actual (excluding Splashtown) to 1998 pro
forma as a percentage of revenues, these expenses were 14.0% and 15.5%
respectively.
Costs of products sold in the 1999 period decreased $1.6 million
compared to pro forma expenses for the first nine months of 1998. As a
percentage of food, merchandise and other spending, cost of products sold
represented 20.7% in 1999, as compared to 22.8% in 1998 (pro forma).
Depreciation and amortization expense for the first nine months of 1999
increased $14.0 million compared to the pro forma amount for the first nine
months of 1998. The increase compared to the pro forma 1998 level was
attributable to the Company's on-going capital program. Interest expense, net
decreased $10.4 million compared to the pro forma interest expense, net for the
first nine months of 1998, reflecting reduction in interest expense in the 1999
period arising out of the retirement of the SFTP Notes on June 30, 1999 and
interest income earned on investment securities in the first nine months of
1999, which investments were made during the 1998 post-acquisition period.
Equity in operations of theme park partnerships for the first quarter
of 1998 reflected the Company's share of the loss of Six Flags Over Texas and
Six Flags Over Georgia. The Company's ownership interests in Six Flags Over
Texas and Six Flags Over Georgia were transferred to Premier on April 1, 1998,
as part of the Acquisition.
Income tax expense was $46.5 million for the first nine months of 1999
compared to a $21.4 million expense for the pro forma results for the first nine
months of 1998. The Company's effective tax are will vary from period-to-period
based upon the inherent seasonal nature of the theme park business, as a result
of permanent differences associated with goodwill amortization for financial
purposes and the non-deductible portion of the amortization for tax purposes.
Prior to the Acquisition, the recoverability of deferred tax assets, including
net operating loss carry-forwards, was assessed as not probable. Thus, no income
tax benefit was recognized in the first quarter of 1998.
LIQUIDITY, CAPITAL COMMITMENTS AND RESOURCES
At October 3, 1999, the Company's indebtedness (including $191.0
million carrying value of the pre-existing SFEC notes which will be repaid in
full from the proceeds of the SFEC Notes, together with other funds, all of
which have been deposited in escrow) aggregated $770.6 million, of which
approximately $192.4 million (including $191.0 million carrying value of the
pre-existing SFEC Notes) matures prior to October 3, 2000. On November 5, 1999,
the Company refinanced all amounts outstanding under the Six Flags Credit
Facility (aggregating $409.3 million at October 3, 1999) with a portion of the
proceeds of a borrowing under the New Credit Facility. See Notes 4 and 7 to the
Company's Consolidated Financial Statements for additional information regarding
the Company's indebtedness.
During the nine months ended October 3, 1999, net cash provided by
operating activities was $98.0 million. Net cash used in investing activities in
the first nine months of 1999 totaled $155.9 million, consisting primarily of
capital expenditures and the purchase of Splashtown. Net cash provided by
financing activities in the first nine months of 1999 was $120.3 million,
primarily representing capital contributions from Premier, net of the
extinguishment of the SFTP Notes (with a carrying value of $318.4 million as of
the extinguishment date).
-14-
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The degree to which the Company is leveraged could adversely affect its
liquidity. The Company's liquidity could also be adversely affected by
unfavorable weather, accidents or the occurrence of an event or condition,
including negative publicity or significant local competitive events, that
significantly reduce paid attendance and, therefore, revenue at any of its theme
parks.
The Company believes that, based on historical and anticipated
operating results, cash flows from operations, available cash, available amounts
under the New Credit Facility and contributions by Premier will be adequate to
meet the Company's future liquidity needs, including anticipated requirements
for working capital, capital expenditures and scheduled debt for at least the
next several years. The Company may, however, need to refinance all or a portion
of its existing debt on or prior to maturity or to seek additional financing.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS NOT YET ADOPTED
In June, 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
recognition of all derivatives as either assets or liabilities in the balance
sheet and measurement of those instruments at fair value. If certain conditions
are met, a derivative may be specifically designated as a hedge. The accounting
for changes in the fair value of a derivative (that is, gains and losses)
depends on the intended use of the derivative and whether it qualifies as a
hedge. SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. A subsequent pronouncement, SFAS 137 was issued
in July 1999 that delayed the effective date of SFAS No.133 until the fiscal
year beginning after June 15, 2000. The Company plans to adopt the provisions of
SFAS No.133 in the first quarter of the year ending December 31, 2001. If the
provisions of SFAS No. 133 were to be applied as of September 30, 1999, they
would not have a material effect on the Company's financial position as of such
date, or the results of operations for the three-month and nine-month periods
then ended.
IMPACT OF YEAR 2000 ISSUE
The Company's Year 2000 Project (the "Project") is in process. The
Project is addressing the Year 2000 issue caused by computer programs being
written utilizing two digits rather than four to define an applicable year. As a
result, the Company's computer equipment, software and devices with embedded
technology that are time sensitive may misinterpret the actual date beginning on
January 1, 2000. This could result in a system failure or miscalculations
causing disruptions of operations, including, but not limited to, a temporary
inability to process transactions.
The Company has undertaken various initiatives intended to ensure that
its computer equipment and software will function properly with respect to dates
in the Year 2000 and thereafter. In planning and developing the Project, the
Company has considered both its information technology ("IT") and its non-IT
systems. The term "computer equipment and software" includes systems that are
commonly thought of as IT systems, including accounting, data processing,
telephone systems, scanning equipment and other miscellaneous systems. Those
items not to be considered as IT technology include alarm systems, fax machines,
monitors for park operations or other miscellaneous systems. Both IT and non-IT
systems may contain embedded technology, which complicates the Company's Year
2000 identification, assessment, remediation and testing efforts. Based upon its
identification and assessment efforts to date, the Company is in the process of
replacing the computer equipment and upgrading the software it currently uses to
become Year 2000 compliant. In addition, in the ordinary course of replacing
computer equipment and software, the Company plans to obtain replacements that
are in compliance with Year 2000.
The Company has initiated correspondence with its significant vendors
and service providers to determine the extent such entities are vulnerable to
Year 2000 issues and whether the products and services purchased from such
entities are Year 2000 compliant. The Company expects to receive a favorable
response from such third parties and it is anticipated that their significant
Year 2000 issues will be addressed on a timely basis.
-15-
<PAGE>
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
With regard to IT, non-IT systems and communications with third
parties, the Company anticipates that the Project will be completed in November
1999.
As noted above, the Company is in the process of replacing certain
computer equipment and software because of the Year 2000 issue. The Company
estimates that the total cost of such replacements will be no more than $1.5
million. Substantially all of the personnel being used on the Project are
existing Company employees. Therefore, the labor costs of its Year 2000
identification, assessment, remediation and testing efforts, as well as
currently anticipated labor costs to be incurred by the Company with respect to
Year 2000 issues of third parties, are expected to be less than $0.8 million.
The Company has not yet developed a most reasonably likely worst case
scenario with respect to Year 2000 issues, but instead has focused its efforts
on reducing uncertainties through the review described above. The Company has
not developed Year 2000 contingency plans other than as described above, and
does not expect to do so unless merited by the results of its continuing review.
However, all but one of the Company's parks will not be in operation on January
1, 2000 due to the operating season for the Company's parks being primarily from
Memorial Day to Labor Day.
The Company presently does not expect to incur significant operational
problems due to the Year 2000 issue. However, if all Year 2000 issues are not
properly and timely identified, assessed, remediated and tested, there can be no
assurance that the Year 2000 issue will not materially impact the Company's
results of operations or adversely affect its relationships with vendors or
others. Additionally, there can be no assurance that the Year 2000 issues of
other entities will not have a material impact on the Company's systems or
results of operations.
ITEM 3 -- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
See Item 7A of the Company's January 3, 1999 Form 10-K. There have been
no material changes in the Company's exposure to market risk since January 3,
1999.
-16-
<PAGE>
PART II -- OTHER INFORMATION
ITEMS 1 -- 5
Not applicable.
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule -- October 3, 1999
(b) Reports on Form 8-K
None.
-17-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SIX FLAGS ENTERTAINMENT CORPORATION
(Registrant)
/s/ KIERAN E. BURKE
-----------------------------------
Kieran E. Burke
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
/s/ JAMES F. DANNHAUSER
-----------------------------------
James F. Dannhauser
CHIEF FINANCIAL OFFICER
Date: November 18, 1999
-18-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-03-1999
<PERIOD-END> OCT-03-1999
<CASH> 108,565
<SECURITIES> 0
<RECEIVABLES> 33,473
<ALLOWANCES> 0
<INVENTORY> 17,588
<CURRENT-ASSETS> 376,586
<PP&E> 1,075,023
<DEPRECIATION> 75,064
<TOTAL-ASSETS> 2,572,610
<CURRENT-LIABILITIES> 259,674
<BONDS> 578,000
0
0
<COMMON> 0
<OTHER-SE> 1,545,537
<TOTAL-LIABILITY-AND-EQUITY> 2,572,610
<SALES> 493,311
<TOTAL-REVENUES> 493,311
<CGS> 45,208
<TOTAL-COSTS> 45,208
<OTHER-EXPENSES> 239,028
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50,431
<INCOME-PRETAX> 89,745
<INCOME-TAX> 46,476
<INCOME-CONTINUING> 43,269
<DISCONTINUED> 0
<EXTRAORDINARY> 469
<CHANGES> 0
<NET-INCOME> 42,800
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
