Six Flags Entertainment Corporation/NEWFUN
Six Flags Entertainment Corporation/NEW Income Taxes Disclosure
Income and Partnership Taxes:
Since the completion of the Mergers, the Company has been subject to U.S. federal income taxes in addition to state and local income taxes as a corporation, as well as foreign income taxes on its foreign subsidiaries. Prior to the completion of the Mergers, Former Cedar Fair was subject to publicly traded partnership tax ("PTP tax") on certain partnership level gross income (net revenues less cost of food, merchandise, and games revenues), state and local income taxes on partnership income, U.S. federal, state and local income taxes on income from its corporate subsidiaries and foreign income taxes on its foreign subsidiary. As such, the total provision (benefit) for taxes prior to the completion of the Mergers included amounts for the PTP tax, as well as federal, state, local and foreign income taxes. The Partnership (Cedar Fair, L.P.) ceased to exist in connection with the Mergers. Income taxes are recognized for the amount of income taxes payable for the current year and for the impact of deferred tax assets and liabilities that represent future tax consequences of events that have been recognized differently in the financial statements than for tax purposes.
The following table summarizes the domestic and foreign components of the Company's income taxes for the years ended December 31, 2025, 2024 and 2023 were as follows:
| (In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Domestic | $ | (1,665,762) | $ | 25,541 | $ | 114,878 | ||||||||||||||
| Foreign | (47,684) | 8,637 | 57,724 | |||||||||||||||||
| Total (loss) income before taxes | $ | (1,713,446) | $ | 34,178 | $ | 172,602 | ||||||||||||||
The provision for income taxes was comprised of the following for the years ended December 31, 2025, 2024 and 2023:
| (In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Current federal | $ | (27,066) | $ | 32,126 | $ | 35,656 | ||||||||||||||
| Current state and local | (6,901) | 12,755 | 3,754 | |||||||||||||||||
| Current foreign | 22,669 | 15,037 | 15,390 | |||||||||||||||||
| Total current | (11,298) | 59,918 | 54,800 | |||||||||||||||||
| Deferred federal, state and local | (140,517) | 184,354 | (8,710) | |||||||||||||||||
| Deferred foreign | (12,165) | (3,429) | 1,953 | |||||||||||||||||
| Total deferred | (152,682) | 180,925 | (6,757) | |||||||||||||||||
| Total (benefit) provision for income taxes | $ | (163,980) | $ | 240,843 | $ | 48,043 | ||||||||||||||
The provision for income taxes for the corporate subsidiaries differed from the amount computed by applying the U.S. federal statutory income tax rate of 21% to income before taxes for the year ended December 31, 2025 in accordance with the guidance after the adoption of ASU 2023-09. The sources and tax effects of the differences were as follows:
| (in thousands) | 2025 | |||||||||||||
| Pre-tax income | $ | (1,713,446) | ||||||||||||
| US Federal statutory rate | $ | (359,824) | 21.00 | % | ||||||||||
| State and local income taxes, net of Federal income tax effects (1) | (33,553) | 1.96 | % | |||||||||||
| Foreign tax effects | ||||||||||||||
| Mexico | ||||||||||||||
| Impairment of goodwill | 18,758 | (1.09) | % | |||||||||||
| Other | 2,534 | (0.15) | % | |||||||||||
| Other foreign jurisdictions | (763) | 0.04 | % | |||||||||||
| Effect of cross-border tax laws | ||||||||||||||
| International income inclusions (net of FTCs) | (823) | 0.05 | % | |||||||||||
| Tax credits | ||||||||||||||
| General business credit | (4,478) | 0.26 | % | |||||||||||
| Changes in valuation allowances | 15,881 | (0.93) | % | |||||||||||
| Nontaxable of nondeductible items | ||||||||||||||
| Impairment of goodwill | 252,494 | (14.74) | % | |||||||||||
| Effect of non-controlling interest income distribution | (10,423) | 0.61 | % | |||||||||||
| Interest accretion on NCI call option liability | 7,302 | (0.43) | % | |||||||||||
| Non-deductible employee compensation | 11,637 | (0.68) | % | |||||||||||
| Other | 4,668 | (0.27) | % | |||||||||||
| Other | ||||||||||||||
| Merger-related windup of the Former Cedar Fair partnership (2) | (58,456) | 3.41 | % | |||||||||||
| Other | (8,934) | 0.53 | % | |||||||||||
| Effective tax rate | $ | (163,980) | 9.57 | % | ||||||||||
(1)During the year ended December 31, 2025, state taxes in California, New Jersey, and Virginia comprised greater than 50% of the tax effect in this category.
(2)Merger-related windup of the Former Cedar Fair partnership includes return to provision deferred tax adjustments over final merger related step ups in tax basis.
The provision for income taxes for the corporate subsidiaries differed from the amount computed by applying the U.S. federal statutory income tax rate of 21% to income before taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09. The sources and tax effects of the differences were as follows:
| (In thousands) | 2024 | 2023 | ||||||||||||
| Income tax provision based on the U.S. federal statutory tax rate | $ | 7,177 | $ | 36,246 | ||||||||||
| Partnership loss (income) not subject to corporate income tax | 15,781 | (14,624) | ||||||||||||
| Effect of non-controlling interest income distribution | (5,145) | — | ||||||||||||
| Effect of state and local taxes, net of federal tax benefit | 6,365 | 4,157 | ||||||||||||
| Change in valuation allowance | 2,938 | 9,703 | ||||||||||||
| Non-deductible employee compensation | 1,999 | — | ||||||||||||
| Uncertain tax positions | (1,096) | — | ||||||||||||
| Tax credits (including foreign tax credits) | (7,525) | (16,782) | ||||||||||||
| Change in U.S. tax law | 441 | 332 | ||||||||||||
| Foreign currency translation loss (gains) | 8,087 | (1,821) | ||||||||||||
| US Federal effects on international inclusions | 8,083 | 11,405 | ||||||||||||
| Foreign rate differential | 1,703 | 3,436 | ||||||||||||
| Change in tax status (1) | 194,785 | — | ||||||||||||
| PTP tax | 5,344 | 14,255 | ||||||||||||
| Nondeductible expenses and other | 1,906 | 1,736 | ||||||||||||
| Total provision for income taxes | $ | 240,843 | $ | 48,043 | ||||||||||
(1) Change in tax status includes non-cash tax effects of (a) the conversion of Former Cedar Fair to a corporation as part of the Mergers, and (b) an internal restructuring that converted a lower-tier partnership into a corporation for tax purposes on December 31, 2024.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of deferred tax assets and liabilities as of December 31, 2025 and December 31, 2024 were as follows:
| (In thousands) | 2025 | 2024 | ||||||||||||
| Compensation | $ | 16,356 | $ | 20,630 | ||||||||||
| Accrued expenses | 57,707 | 49,759 | ||||||||||||
| Foreign tax credits | 53,230 | 40,003 | ||||||||||||
| Tax attribute carryforwards | 224,442 | 153,069 | ||||||||||||
| Foreign currency translation | 6,355 | 6,841 | ||||||||||||
| Deferred revenue | 8,043 | 56,572 | ||||||||||||
| Lease liabilities | 54,204 | 57,188 | ||||||||||||
| Deferred tax assets | 420,337 | 384,062 | ||||||||||||
| Valuation allowance | (130,187) | (128,192) | ||||||||||||
| Net deferred tax assets | 290,150 | 255,870 | ||||||||||||
| Property and equipment | (508,787) | (526,711) | ||||||||||||
| Intangibles | (155,017) | (222,959) | ||||||||||||
| Partnership park outside basis difference | (67,521) | — | ||||||||||||
| Right-of-use assets | (46,318) | (48,783) | ||||||||||||
| Deferred tax liabilities | (777,643) | (798,453) | ||||||||||||
| Net deferred tax liabilities | $ | (487,493) | $ | (542,583) | ||||||||||
As of December 31, 2025, the Company had federal net operating losses of $57.2 million, which are indefinite lived. As of December 31, 2025, the Company had state net operating loss carryforwards of $71.1 million, which begin to expire in 2026 while others are indefinite lived. In addition, as of December 31, 2025, the Company had foreign tax credit carryforwards of $53.2 million, which expire in years 2026 through 2034. As of December 31, 2025, the Company had foreign net operating losses of $5.3 million which expire in years 2034 through 2043. As of December 31, 2025, the Company had interest expense limitation carryforwards of $108.9 million which do not expire.
The Company records a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. The need for this allowance is based on several factors including the
carryforward periods for net operating losses and tax credits, prior experience of tax credit limitations, and management's long-term estimates of domestic and foreign source income.
As of December 31, 2025, the Company had a $130.2 million valuation allowance consisting of $53.2 million related to foreign tax credits ("FTCs"), $54.6 million of state net operating loss carryforwards and other state deferred tax assets, $22.4 million related to Canadian capital loss carryforwards and other Canadian deferred tax assets. The following table presents the changes to the valuation allowance for the periods presented.
| (In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Beginning valuation allowance | $ | (128,192) | $ | (32,143) | $ | (24,228) | ||||||||||||||
| Change for valuation allowances acquired in the Mergers | — | (91,928) | — | |||||||||||||||||
| Change in foreign tax credit carryforward allowance | (15,881) | (4,116) | (6,524) | |||||||||||||||||
| Change in state valuation | 11,812 | (4,037) | (1,202) | |||||||||||||||||
| Change in Canadian capital loss carryforward allowance | 2,074 | 4,032 | (189) | |||||||||||||||||
| Ending valuation allowance | $ | (130,187) | $ | (128,192) | $ | (32,143) | ||||||||||||||
The Company evaluates its tax positions using a more-likely-than-not threshold, and those tax positions requiring recognition are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon effective settlement with a taxing authority that has full knowledge of all relevant information. As of December 31, 2025, the Company recorded unrecognized tax benefits of $25.6 million, all of which would impact the effective tax rate if recognized and were included within "Other liabilities" in the consolidated balance sheet. The following table presents the changes to unrecognized tax benefits for the periods presented.
| (In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Beginning unrecognized tax benefits | $ | 25,557 | $ | — | $ | — | ||||||||||||||
| Increases related to positions acquired in the Mergers | — | 26,853 | — | |||||||||||||||||
| Decreases due to expiration of statute of limitations | — | (1,296) | — | |||||||||||||||||
| Ending unrecognized tax benefits | $ | 25,557 | $ | 25,557 | $ | — | ||||||||||||||
The Company classifies interest and penalties attributable to income taxes as part of income tax expense. During the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the expense recognized for interest and penalties was not material.
Total cash paid for taxes (net of refunds) was composed of the following for the year ended December 31, 2025 in accordance with the guidance following the adoption of ASU 2023-09:
| (in thousands) | 2025 | |||||||
| Federal | $ | 15,457 | ||||||
| State | ||||||||
| Virginia | 3,055 | |||||||
| Other (1) | 3,254 | |||||||
| Foreign | ||||||||
| Mexico | 5,145 | |||||||
| Canada | 7,967 | |||||||
| Cash paid for income taxes, net of refunds received | $ | 34,878 | ||||||
(1) Represents individual jurisdictions with cash taxes less than 5% of total cash taxes paid
Total cash paid for income taxes, net of refunds, during the years ended December 31, 2024 and 2023 was $65.1 million and $45.0 million, respectively.
The Inflation Reduction Act was signed into law on August 16, 2022 and created a new 15% corporate alternative minimum tax ("CAMT") based on adjusted financial statement income. The effective date of the provision was January 1, 2023. The Company will not be subject to the CAMT as its reported earnings for each of the past three years did not exceed $1 billion.
The Canadian government has enacted Pillar Two legislation (Global Minimum Tax Act), that includes the Income Inclusion Rule and Qualified Domestic Minimum Top-Up Tax. The Canadian legislation is effective for fiscal years beginning January 1, 2024, and thereafter. The Company has performed an assessment of the potential exposure to Pillar Two income taxes. This assessment is based on the most recent information available regarding the financial performance of the constituent entities. Based on the assessment performed, the Company is not subject to Pillar Two taxes for 2025.
The Company is subject to taxation in the U.S., Canada, Mexico and various state and local jurisdictions. Its tax returns are subject to examination by state and federal tax authorities. With few exceptions, the Company is no longer subject to examination by the major taxing authorities for tax years before 2021.
The Company has designated the undistributed earnings of its foreign operations as indefinitely reinvested and, as a result, the Company does not provide for deferred income taxes on unremitted earnings of these subsidiaries. As of December 31, 2025, the determination of the amount of such unrecognized deferred tax liability is not practicable.
On July 4, 2025, the U.S. government enacted H.R. 1, the One Big Beautiful Bill Act (the "OBBBA"). The OBBBA maintains the 21% corporate tax rate and makes permanent many of the provisions from the Tax Cuts and Jobs Act of 2017 which had expired or were expiring. These provisions include more favorable interest deductibility and 100% bonus depreciation on capital expenditures. As a result of the enactment of OBBBA, the Company realized an impact to the deferred tax liability related to the provision for 100% bonus depreciation for certain asset classes placed in service after January 19, 2025. The Company did not have any material change to its effective tax rate as a result of the OBBBA.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.