Six Flags Entertainment Corp (FUN) 2008 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the Cedar Fair first quarter earnings conference call. During today's presentation all parties will be in a listen-only mode mode.

Following the presentation the conference will be open for questions. (OPERATOR INSTRUCTIONS) This conference call is being recorded today, Tuesday, May 6th of 2008. I would now like to turn the conference over to Stacy Frole, Director of Investor Relations. Please go ahead, ma'am.

Good afternoon and welcome to our first quarter earnings conference call. I'm Stacy Frole, Cedar Fair's Director of Investor Relations. Earlier today, we issued our first quarter earnings release. A copy of that release can be obtained on our corporate website at www.cedarfair.com or by contacting our investor relations offices at 419-627-2233.

On the call this afternoon are Dick Kinzel, our Chairman, President and Chief Executive Officer and Peter Crage, our Vice President of Finance and Chief Financial Officer. Before we begin, I need to caution you that comments made during this call will include forward-looking statements within the meaning of the Federal Securities laws. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. You may refer to filings by the company with the SEC, for a more detailed discussion of these risks.

In compliance with SEC regulation FD, this webcast is being made available to the media and the general public as well as analysts and investors. Because the webcast is open to all constituents and prior notification had been widely and unselectively disseminated, all content of the call will be considered fully disclosed. Now let me turn the call over to Dick Kinzel.

Thank you for joining us on the call. Today we'll discuss our first quarter performance, review early season trends for our 2008 operating season and provide our near term financial outlook.

First I'd like to remind every one that the first quarter represents less than 5% of our full year revenues. Thus I'll caution you that the first quarter is not material to our full year operating results and it is always risky to jump to any conclusions, based on the first quarter numbers alone. It is also important to note that there are five additional days in the the 2008 first fiscal quarter ended March the 30th, 2008, when compared with the 2007 first quarter ended March 25th, 2007.

Net revenues for the first quarter increased $10.4 million or 35% to $40.4 million. As part of our strategy for expanding the operating seasons at the newly acquired parks, several of which are located in warmer climates, we were able to open both Kings Dominion and California's Great America a week earlier than in prior years to take advantage of an early Easter, spring break season, which fell in the second quarter of 2007. The operating loss for the quarter increased to $56.4 million, from $50.9 million in 2007. Primarily the result of the additional five days in the current fiscal quarter. Revenues and preseason operating costs were in line with our expectations for the quarter.

Peter will review the details behind the financial results with you in just a bit, but first I'd like to briefly discuss the 2008 season and our expectations for the year. We continue to make improvements to the operating schedule of the new parks to take advantage of their geographic locations. We opened two parks, Great America and Kings Dominion, a week earlier to take advantage of early spring holiday and several parks will extend their operating seasons this fall by one additional weekend.

We have also extended the daily operating hours of several of the newly acquired parks, allowing our guests to take advantage of a full day of entertainment. Where the park used to close anywhere from 6:00 to 8:00 in evening, it will now operate until 8:00 on weekdays and 10:00 on weekends. This is just another way we are able to improve the guest experience and value at our parks. It is this type of change that guests appreciate and helps to keep families coming back year after year.

At this time we have seven of our ten seasonal amusement parks in operation, with Cedar Point and Valleyfair scheduled to open this weekend. I am pleased to say that our capital projects have been completed or are scheduled to be completed on time and within our overall budget. Canada's Wonderland, which opened two weeks ago, introduced their new ride Bohemouth. Bohemouth is Canada's longest, tallest and fastest roller coaster and was the highlight of our 2008 capital expenditures program at that park. I had the opportunity this last Saturday to visit the park and I rode Bohemouth and I can tell you it is everything I thought and was hoping the coaster would be.

While a significant part of our capital expenditure program has gone to the five roller coasters and three exciting thrill rides, I think it's important to point out in 2008 we will offer over 50 live shows across our parks, with over one third of them being new. This added entertainment option at our parks improves the overall guest experience and provides significant value to a visit. Since the Paramount Parks acquisition we have installed four ice stages with large production ice skating shows in the former of Paramount Theaters at Carowinds, Canada's Wonderland, Kings Island and Great America.

We've also reopened seven entertainment facilities that were closed by the previous owners. Kings Island, for example, has gone from one song and dance show and a karaoke show in 2006, to a large production ice show, four song and dance shows and two reopened theaters and a children's show in a new theater. This is a great example of how our management team is able to utilize existing assets to improve the overall guest experience and again I visited Kings Island a couple of weeks ago. I visited the shows and visited the parks and I can tell you I'm really pleased with the entertainment package and also the park in general.

We will also continue to make improvements to the Halloween events this year at our parks and will far exceed anything being offered in their markets. Over the past year some investors have expressed concern that our capital expenditures have decreased when analyzing it as a percentage of sales. It is important to note, we base our capital expenditures decision on the historical and future expectations of market demand at each park.

With respect to our larger attractions, there may be a two to three year lead time in development and construction of the ride. It is important to offer a variety of new rides, attractions, restaurants and live entertainment on a regular basis and we believe our current five year CapEx strategy, takes us into consideration. Currently we anticipate our average CapEx spending over the next several years to be between $80 and $90 million.

We believe with smart capital spending based on market demand and appropriate return, our company will continue to be successful for many years to come. Looking at some early season indicators, year-to-date season's pass sales are trending ahead of last year on both average unit price and passes sold. While we are pleased with this trend, it is still too early in the season to gauge the true success of the changes to our program. Hotel bookings especially at Cedar Point have been a bit soft.

We have experienced a trend in the later -- in the last few years that later or last minute reservations have been coming in a little bit different this time of the year now. However, group business is also trending ahead of last year. Although seasons pass sales and group business make up approximately 25% of our full year revenues and over half of these sales occur after our parks are in operation. It is still too early to accurately forecast 2008's full year performance.

Given the current trends and taking into consideration our strong capital programs, new marketing initiatives and continued focus on exceptional guest service, we do believe the company is well positioned for the upcoming season. It is no secret that the broader economy is not as healthy as it should be. This is something we have been dealing with on a regional basis in the Midwest for several years now and with some good success. We are hopeful that our high quality parks and resorts will fill a need for entertainment for families that don't want to travel long distances or over long periods of time.

As we have seen in the past during tough economic times. We hope that our convenient location to most metropolitan areas we serve, coupled with the outstanding value we offer in a full day of entertainment, will provide to be desirable this season and for many years to come. As we indicated on our last conference call, we expect to generate full year revenues of between $990 million and $1.02 billion, driven primarily by improved guest per capita spending and continued growth in accommodations revenues and our resort properties. We are also reiterating our guidance for full year adjusted EBITDA in the $340 to $350 million range.

At this point I'll turn the call over to Peter to discuss the first quarter numbers in more detail.

Thanks very much, Dick. Allow me to begin by reminding you that virtually all of the revenues from our seasonal amusement parks, water parks and other seasonal resort facilities, are realized during a 130 to 140 day operating period beginning in the second quarter. With the majority of revenues concentrated in the peak vacation months of July and August. Only Knott's Berry Farm, Castaway Bay and Star Trek the Experience are open year-round with Star Trek the Experience and Knott's Berry Farm operating at their lowest level of attendance during the first quarter of the year.

Thus as Dick mentioned earlier, the first quarter is not material to our full year operating results and it's always risky to jump to any conclusions based on first quarter numbers alone. Before I discuss our results in more detail, I would like to expand on the additional days in the first quarter of 2008. First, there were five additional days in the first fiscal quarter ended March 30th, 2008, when compared with the 2007 first fiscal quarter, ended March 25th, 2007. This resulted in an additional 19 park operating days in the current quarter. It was also an additional 22 park operating days in the first quarter due to the earlier park openings that Dick mentioned. This results in a total of 41 additional park operating days in the first quarter of 2008, when compared with the first quarter of 2007.

Now to the financial results. Consolidated net revenues for the three months ended March 30th, 2008, were $40.4 million broken down as follows. $17.6 million in admission revenues, $17.7 million in food, merchandise and games revenues, and $5.1 million in accommodations and other nonpark revenues. This was a $10.4 million increase or 35% over 2007 first quarter net revenues, of $30 million, primarily due to the additional operating days that I just mentioned.

Excluding depreciation and other noncash charges, cash operating costs and expenses were $90.5 million or a $14.1 million increase from last year's first quarter cash expenses of $76.4 million. This increase is primarily due to the five additional days in the first quarter of 2008 slightly offset by a reduction in costs at our Geauga Lake property, which we will operate exclusively as a Waterpark in 2008. While we were able to recognize additional revenue at our parks that were open during the additional operating days in the quarter, we had other parks that continued to incur their normal preseason opening costs without opening to the public. Including our largest parks, Cedar Point, Kings Island and Canada's Wonderland. These preseason operating costs are in line with our expectations.

After depreciation, amortization and all other noncash costs, the operating loss for the square increased $5.5 million to $56.4 million from $50.9 million a year ago. The increased depreciation expense of $1.9 million is primarily due to the additional operating days, when compared with the first quarter of 2007. Interest expense for the first quarter decreased 2% to $32.8 million in 2008, compared with $33.4 million in 2007. A net result of lower rates on debt offset by an extra five days of interest expense in current quarter.

A net credit for taxes of $44.8 million was recorded to account for the tax attributes of our corporate subsidiaries and publicly traded partnership taxes during the first quarter of 2008, compared with a net credit for taxes of $29.3 million in the same period a year ago. To determine the interim period income tax provision or benefit of our corporate subsidiaries, we apply an estimated annual effective tax rate to our year-to-date income or loss. In 2008, estimated annual effective tax rate includes the effect of an anticipated adjustment in the valuation allowance that relates to foreign tax credit carry forwards arising from our corporate subsidiaries.

The amount of this adjustment has a disproportionate impact on our annual effective tax rate that results in a significant variation in the customary relationship between the provision for taxes and income before taxes in interim periods. Cash taxes paid or payable are not impacted by these interim tax provisions and are estimated to be between $17 and $20 million for the 2008 calendar year. After interest expense and the credit for taxes the net loss for the period totaled $43.8 million or $0.81 per diluted limited partner unit compared with a net loss of $55.1 million or $1.02 per unit, a year ago.

At the end of the first quarter, our receivables and inventories were at normal seasonal levels and we have the necessary credit facilities in place to fund current liabilities, capital expenditures and preopening expenses as required. Partners equity totaled $175.3 million and our total cash on hand was $12.1 million.

Recently I have received several questions regarding the decrease in our partners equity account. The recent decrease is primarily related to noncash accounting items that have impacted our net income and the recording of the fair market value of our interest rate swap agreements as a component of accumulated other comprehensive loss within the equity section. We entered into these various swap arrangements as a means of reducing the risk associated with volatility and interest rates, in order to keep our cash interest costs predictable.

Although the fair market value of these instruments is recorded as a liability of $145 million in other liabilities on the balance sheet, with the offset reducing partners equity, this is expected to reverse over time as the swaps approach their maturity dates and continue to serve their purpose of leveling cash about interest costs. Finally our structure as a publicly trade partnership does not allow us to significantly increase balance sheet partners equity as our partnership agreement requires us to pay out all of our available cash as defined in distributions to our partners. Because of this structure we do not have any debt covenants that are tied to partners equity, but instead our debt covenants are typically based on adjusted EBITDA and cash flow as this is what drives our operating decisions and dictates performance.

At the end of the quarter total debt outstanding was $1.719 billion of variable rate debt, $17.5 million of which is classified as current and $137.8 million of which is borrowed under our revolving credit facility. As of March 30th, 2008, $1.57 billion of our outstanding variable rate long term debt has been converted to fixed rate debt, through the use of several interest rate swap agreements. As a result, the cost of our debt is approximately 6.8% at the current time.

I'm pleased to report that we finished the quarter in sound financial condition in terms of both liquidity and cash flow and consistent with our expectations as to results for the quarter including the added days. Credit facilities and cash flow from operation, are expected to be sufficient to meet working capital needs. Debt service, planned capital expenditures and regular quarterly cash distributions for the foreseeable future.

We are very well positioned and we look forward to the upcoming season. At this point I'll conclude our prepared remarks and allow for any questions that you might have.

Thank you, sir. Ladies and gentlemen, at this time we will begin the question and answer session. (OPERATOR INSTRUCTIONS) And our first question comes from the line of Kit Spring with Stifel Nicolaus. Please go ahead.

Hi, looks like a good start to the year in a tough time. Could you talk a little bit about how much of your costs come from electricity and what you see as the trends there and then on the food side do you think you'll be able to pass through any increasing food costs to consumers? And then finally can you just remind us where you are with your debt covenants? I believe you have quite a bit of room and just where that resets to, I believe, and when. I think it's in the summer. Thanks.

Kit, this is Dick. I'll start with the first two and then turn Pete over and let him discuss the debt covenants. On the utilities utilities continue to rise as everything does. We try to monitor them as close as we can. We try to go in some areas if we can go green.

In fact, at Cedar Point here we're looking to see if wind would be a variable for to us go into. There are several initiatives that the state has talked to us about or we're looking into to see if that could play a role in trying to divert some of the costs of utilities going forward.

Our food costs, we have to pass our food costs along. We've always been able to do that in the past as the orders come in from our purveyors and the costs come in we can see there certainly is a significant increase over what we were paying last year and those costs will have to be paid or passed along to the consumer. And, Pete, I'll turn it over to you on the debt covenant.

Sure. Kit, you're right. We do have more than enough room on the debt covenants right now both in terms of the available distributable cash covenant, which you may be familiar with and our availability to pay distributions. We have more than enough cushion this and even as the debt to EBITDA covenants tighten, both through the increase in EBITDA that we plan over the next few years and the opportunity to pay down debt modestly, we feel pretty comfortable with those.

Thank you.

Thank you. Your next question comes from the line of Scott Hamann with KeyBanc Capital Markets. Please go ahead.

Afternoon, gentlemen.

Hi, there.

Peter, just on the capital ex for the year, Where do you expect to come out?

About 80 million, 88 to 90 million is where we would expect to be.. I think you'll see on a trailing 12 month basis in the queue, it's going to come out we're at 88 and I expect that to repeat for 2008.

Okay. And then California's kind of been a pretty hard hit region recently. How would you characterize the results at Knott's so far and kind of maybe just on a relative basis year over year?

Sure. Knott's Berry Farm is doing exceptionally well. It's holding it's own with last year. We have not seen -- we've had to discount a little bit and we have some promotions, but all in all we're very much pleased with Knott's. The thing we can see a the bit is out of park revenues not necessarily at the hotel but out of park revenues at some of the restaurant and the gift shops have decreased somewhat, but park attendance has stayed pretty close to what it was last year and pretty close to budget.

I think in California the big surprise we have, Scott, is the one thing we're pleased about is that with we acquired California's Great America, we felt that that was an under used asset and we have increased operating days there and extended hours. And so far that has proven to be a smart move for us. We're real pleased with basically how both California parks are going, but especially the one in Santa Clara.

Did weather play a factor for those parks in the first quarter?

Yes. At Knott's Berry Farm we lost two operating days to bad weather and it was unusually bad in southern California. However, we always budget some bad weather into our budgets and so we try not to bring a weather into it, but in the first quarter of this year, why, we did have -- as I mentioned, we lost a couple of days at Knott's Berry Farm and there was some unusual bad weather there.

Okay. And then looking at admission prices year over year, what type of average increase do you plan to implement this year across the system?

We don't take a percentage. When we do our pricing, Scott. What we do is we take each market on an individual basis. For example, here at Cedar Point we did not raise the prices this year-over-year. However, in August of last year we raised the price. And each park is taken on an individual basis, but on the most part I would say if you start with when we started raising them last August I'd say for the most part we went up between a $1.00 and $1.25 for each park.

Okay. And is there any way to quantify the benefit for the lower Geauga Lake costs for the quarter and maybe what your expectation might be for the year?

Scott, it's difficult to carve out that particular cost savings at Geauga Lake. There are a lot of things happening particularly as we expect preopening costs for all of the parks. As you might imagine, it gets very difficult to carve out all the costs associated with that. I think the best way to answer that question is Geauga Lake, as we had reported previously had lost money in the past and the objective of eliminating those fixed costs and operating the -- stopping the amusement park, closing the amusement park and operating the Waterpark was to turn positive EBITDA and that's our plan for the year and we'll see what happens.

Okay. And with a couple seasons under your belt now with the new Paramount Parks. How far along do you think you are in the integration process and what kinds of things are you focusing on this year that you maybe learned last year and what's kind of what's left to do to really realize the full potential there?

When we made our presentation to the board on the acquisition of the parks we said it would take between three and five years to get everything we wanted in there and we're still sticking to those numbers I think this year we'll make some great strides. We learned an awful lot about the different markets that we were in last year and hopefully we've adjusted some of our marketing and pricing and season's pass proposals to try to get back some of the seasons pass holders we lost last year.

So we were in a learning process last year. We've learned and I'm sure we're going to learn a lot this year, but I still say that we're still going to take an additional -- we originally said three to five years and I think two of those years are behind us. And I think to get 100% benefits out of it it's still going to take another two or three years to get the full benefit out of the integration between the two companies, Scott.

Okay. And then, Peter, finally just kind of looking at margins either EBITDA or operating margins, what level of expansion do you think is realistic to expect this year and where do you expect that to come from?

Well, we did about 34.7 for the full year last year and clearly we want to try to eclipse that. I think Dick's point earlier on perhaps an under-utilized asset in Great American, California's Great America, may allow us an opportunity to move margins slightly higher but again that's not a significant portion of our business. For the year we're budgeting focusing on a 34 to 35% margin as we've done every year. We think those are doable but there are a few areas we may be able to improve on that and that's an example. That's one of them.

Great. Thanks a lot.

Thank you. Our next question comes from the line of Tim Conder with Wachovia Securities. Please go ahead.

Thank you. Just wanted to revisit a couple housekeeping items here first. Peter, just remind us on the depreciation and the amortization again guidance for this year.

I don't know if we provided guidance for that. Let me take a look at -- I'm thinking of $120 million to $125 million range. Stacy, you?

Yeah. I think around 130 on a rolling 12.

130 on a rolling 12. Bear with me just a second here.

Take into consideration that there's a small investment.

Yeah. We're 132 on a trailing 12 month basis. So I'd use 130 as a ballpark.

Okay, for the calendar year, okay. And then just to clarify one of your previous statements, you're looking at the 17 to 20 area on a tax basis for the year?

In cash taxes.

In cash taxes, okay, okay. And then the other income expense, granted it's not a big number but you had about, about a 735 or so million or 735,000 swing year over year from expense to income. Was that related to some of the swaps or what was going on in that line item?

That we settled our purchase to purchase price allocation, the final working capital items with the CBS from the purchase in June of '06. We settled that in January and a portion of that was interest income on the amount of money that we were owed in the purchase price allocation.

Okay. Okay. Okay. So that was more of a one time item there?

One time item.

Okay, great. And then, Dick, maybe and I apologize if I missed this. The timing of a couple of the earlier openings this year versus last year in a few of the parks, could you just go over that again.

Sure, Tim. We have approximately 35 additional operating days this year that we felt with the timing of Easter, of course, that played into our decision. But we made a concentrated effort especially at Great America in Santa Clara, that's going to have 14 extra operating days this year. The beginning of the season or at the end of the season plus extended hours and we also added a couple of operating days at Carowinds and Kings Dominion.

And I mean is there anything that opens here in the second quarter that you'll pick up a few?

No. It will all be in the first quarter. We might have one or two extra days at Halloween which would be -- some of that might be in the third quarter.

Right. Or the fourth quarter. Tim, this is Peter.

From a modeling perspective and from a fiscal quarter perspective, as we mentioned in the call here we have 41 additional days, operating days in the first quarter. We'll be essentially even in the second quarter give or take a few days. The third quarter of 2008 we'll have somewhat less days and then in the fourth quarter we may pick up a couple as Dick had mentioned, but the important point on -- that's remodeling, that's for quarter by quarter. But from an operating perspective we see about 35 additional days. Does that help?

Yup. On a full year basis, got it, okay. So 35 in total, okay. And then you gave a little bit of color regarding out of park spend at Knott's Berry Farm. Directionally if you look at out of park and in park just trends, I guess, up a little bit, down a little bit, flattish? And granted first quarter is a very small quarter, but just any additional color there on your collective nonticket spending?

I think, you pretty well said it. It's pretty early in the year to see any trends going there. Even though it's open year-round, why, that park really kicks in around Memorial Day just like our seasonal parks do and we have the opening of that new coaster, the Pony Express is going to be opening around Memorial Day. So it's just a little bit too early to really see any trends developing there.

And, gentlemen, for the year with the additional hours that you're doing at some of the Legacy paramount Parks. Would you anticipate that that in park spend number ex the tickets, should that be up or are you factoring in maybe some mitigation related to economic activity or just any comments as far as your expectations for the year on in park spend?

Certainly we think we can pass along our costs in food and it's a little more difficult to pass along the costs in merchandise and also in the games area. Also we're not projecting or budgeting a large increase in admissions per capita and the reason for that is we're going to have -- we hope we're going to have more attendance via the season's pass route and via group events. So -- but we are budgeting and forecasting that our total per capita will be up for the year.

Okay. And so you're saying, Dick, maybe on the in park spend collective would you anticipate that be a little bit flattish is what you're saying?

Just a little bit flat, maybe a little bit of upside to it, but I think food will probably increase but merchandise and games, they'll probably hold their own. What we've found in previous years, Tim, when we have economic times the way we have now is that people will come to the park. They certainly are going to eat. They'll have a funnel cake or they'll have doughnuts or they'll have a Pepsi or a Coke, but they will cut out the taking home a souvenir or playing the games.

Okay, okay. And, Peter, you gave us some color as far as what your costs of debt is currently. Did you do any changes in swaps, some roll-off, you put more on during the first quarter I guess is question No. one related to that. And then how is that looking as far as your cost to debt at this point assuming nothing else was done rolling out over the balance of the year?

Yes, Tim. In the first quarter we fixed another $300 million of variable rate debt, at I think right around 4.7% sub 5%. So at this point in time with about 90% of our variable, of all of our debt, which all variable rate, about 90% of it fixed, we are running about a 6.8% rate. Now we leave some of that variable particularly the revolver over the summer.

So as rates go down hopefully we'll see a little bit of a benefit, nothing significant. So I think that 6.8% is pretty good. The 300 million that we fixed as a swap that terminates in mid '09. It's a short term. We tried to take advantage of some short term upside if you will, down side on rates. So for the year I think 6.8 and that 6.7 to 7.0 I think is a good number.

Okay, okay. Great. Thank you, gentlemen.

Thank you. Your next question comes from the line of Phillip Acinapuro with Scott's Cove. Please go ahead.

Yes, hello. My first question is if you look at food, merchandise and games and you divide that by admissions, I see a big falloff. It was 123.8% in last year's quarter and it fell to 100.5% in this quarter. Now is that a good way to look at in park spending, first of all, and does it mean that people are spending less in the parks?

In terms of the ratio between the two?

Yes. Is that a good way to look at, it first of all?

I think it's too early to tell at this point in the season. Is what you're saying -- let me make sure I'm looking at your calculation correctly here. You're saying that 17, over 17 million, as opposed to 13 over 11 million last year?

That's correct.

I think it a bit too early to tell at this point what that really means other than that is what we particularly with the early opening. We -- it's difficult to tell to get a trend based on what that calculation shows.

Okay. Could you give us a sense of -- you said that your season pass sales were up. Can you give us a sense of the magnitude of that and also how do you account for season pass sales? Do you amortize it over some period?

Well, a season's passes are up -- they're up double-digit percentages from the year before and, Pete, do you want to --

Sure. What we do on season passes is we make an assumption based on years of history about how many times a person will visit and we recognize that over the season. When that individual and that ticket visits and then monthly we adjust those and look at those to ensure that we are recognizing it appropriately.

Okay. Also are there any trends that you're seeing so far in April?

Not really, Phillip. We're only open with the exception of Knott's, of course, we're only open two or three days, Friday, Saturday and Sunday and it really just is too early to see any trends at this point.

Okay. All right. Well, thank you.

You're welcome.

Thank you. (OPERATOR INSTRUCTIONS) And our next question comes from the line of Hayley Wolff with Rochdale Securities . Please go ahead.

Hi, guys. Just a couple questions. First, you brought somebody in to look at some sponsorship revenue generation. Can you give us an update on that and then second when you closed Geauga Lake, I assume there's some spillover into Cedar Point. Can you kind of go through your thoughts on whether Cedar Point incrementally gains and what that means for profitability at that park.

Sure. This is Dick. I'll start with Geauga Lake. We made a very concerted effort when we announced that Geauga Lake was closing. We approached all of the group sales clients, the good any day clients that handled Geauga Lake tickets.

We made them a great proposal to come to Cedar Point and I'm very pleased to say that a large percentage of the people that used to go to Geauga Lake have taken the opportunity to give Cedar Point a try. And we've walked a good deal of a great number of clients that went to Geauga Lake for years and they're new clients that are now going to come to Cedar Point, so we're real pleased with that. As far as sponsorship goes, we're working with the Kempton group and as far as any big ones coming up there's nothing really to report except they're working all the time on new sponsorships and as they develop, why, we certainly will make you aware of them.

Now in term of moving people over to Cedar Point, is it enough to actually move the needle in attendance there? I assume that has a much higher incremental margin than what you're getting off these people at Geauga Lake.

It is, but the main thing is we didn't want them to go somewhere else. We wanted them to stay with the Cedar Fair Park and so it's a little bit farther drive but they've at least accepted the fact they want to give us a try and they're going to try us for a year. And hopefully we can get them to come back year after year. Our sales staff has done a great job in talking to the clients and showing them the benefits of maybe just a little bit larger park and some of the benefits of driving maybe a half hour, 45 minutes further.

But there was a pick up, though.

Oh, definitely.

And then to Tim's question following up on that. When you extend the park operating hours, that should have a positive impact on in park spending when people are in the park longer. Is that something that's measurable over the course of year?

Yes, it is. We can -- we take in park per capitas every day and we can certainly compare them day to day.

That's certainly one of the intentions of leaving the parks open later is to try to encourage people having another sandwich or another Coke or Pepsi or something like that, an ice cream cone in the park. The other thing is it does extend the length of stay and if there's a couple of lines in the park, it gives the guests an opportunity to ride another coaster or see another show.

Okay. All right. Thanks a lot.

You're welcome, Hayley.

Thank you. The next question comes from the line of Justin Harrison with Ramsey Asset Management. Please go ahead.

Good afternoon. Do you break out the costs of the SG&A operating expense in the cost of food merchandise and games?

No. We did not.

Okay.

Cost of food, merchandise and games $5.4 million, operating expense $68.3 million, SG&A $16.9 million and depreciation and amortization $6.2 million.

Okay. And thank you and then I didn't catch the attendance number. Was that in the press release?

No. It's so early in the season that the attendance numbers right now are so small that it doesn't provide really much information, good information, at all.

I see. Okay. Thank you.

(OPERATOR INSTRUCTIONS) Gentlemen, I'm showing that there are no further questions. I'll turn it back to you for closing comments.

At this point in time if there are no further questions, I'd like to thank everyone for joining us on the call today. Should you have any follow-up questions please feel free to contact me at 419-627-2227. We look forward to speaking with you again in early August to discuss our second quarter results. Thank you.

Thank you. Ladies and gentlemen, that will conclude today's teleconference. We do thank you again for your participation and at this time you may disconnect.