Six Flags Entertainment Corp (FUN) 2015 Q1 法說會逐字稿

Good day, and welcome to the Cedar Fair first quarter conference call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Stacy Frole. Please go ahead.

Thank you, Tracy. Good morning, and welcome to our first-quarter earnings conference call. I'm Stacy Frole, Cedar Fair's Vice president of Investor Relations.

Earlier today, we issued our 2015 first-quarter earnings release. A copy of that release can be obtained on our website at www.cedarfair.com under Investor Relation, or by contacting our Investor Relations offices at 419-627-2233. On the call this morning are Matt Ouimet; our President and Chief Executive Officer, and Brian Witherow, our Executive Vice President 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 has been widely and unselectively disseminated, all content of the call will be considered fully disclosed.

Now I'll turn the call over to Matt Ouimet.

Thank you, Stacy. And good morning, everyone.

As we mentioned during last quarter's call, we're going to take a different approach today. Since our first quarter typically represents less than 5% of our expected full-year net revenues, because most of our parks are closed for the winter season. We will provide only a brief summary of the first-quarter results on this call, and then spend the majority of our time discussing our longer-term goals, strategies and initiatives.

But just before I turn it over to Brian, I want to call out an important element of our business strategy that was particularly evident to me as I toured the parks in preparation for our 2015 operating season. Cedar Fair has always been good at delivering great rides and attractions, and this year's most notable entry, Fury 325 at Carowinds, is just the latest in a long history of record-breaking coasters.

Over the past two years, we've started to apply this same quality level commitment to our other lines of business. On the resort front, the newly refurbished Hotel Breakers at Cedar Point will now provide accommodations that match the park's world-class attractions. And the renovated and expanded campgrounds at several of our parks now offer upscale cabins that are the first to fill up.

On the retail front, the addition of Harmony Hall, a 550-seat dining and entertainment facility at Carowinds, has meaningfully improved the park's F&B per cap while reducing labor costs. Also the addition of innovative retail concepts like the new candy megastore, Sweet Spot, at both Cedar Point and King's Island, are sure to be well received by guests of all ages.

Lastly, new and renovated catering facilities at several of our parks, including Cedar Point and great America, allow us to expand capacity. And provide an enhanced guest experience for our catered event customers.

It's difficult to communicate asset quality in a call such as this. But I assure you these investments will make a difference to our guests, and to our results in 2015 and for many years to come. I strongly encourage all of you to visit one of our parks, and see firsthand what makes Cedar Fair, Cedar Fair.

I would now like to turn the call over to Brian to discuss our 2015 first-quarter financial results in more detail. Brian?

Thanks, Matt.

For the first quarter, net revenues are up $6 million or 16% to $47 million. While operating costs and expenses are up $3 million or 3%. As Matt just mentioned, our first quarter represents a small percentage of our annual operating results, as it includes first-quarter operations from our only year-round amusement park, Knott's Berry Farm, and the end of March opening weekends of three seasonal parks, Carowinds, King's Dominion and Great America.

During the first quarter, we generated record attendance. Along with increases in all revenue categories, including admissions, food and beverage, merchandise and games and accommodations. The 3% increase in costs is primarily related to the strong unit price performance in the quarter, up 20%, and its impact on the reporting of non-cash, equity-based compensation.

We also saw a nominal increase in cost of goods sold, due to the increase in attendance. Partially offsetting these increases was a decrease in first-quarter operating costs. Primarily related to the timing differences in both off-season maintenance projects and planned expenditures on 2015 OpEx initiatives.

Turning to the first quarter balance sheet for a moment. The solid start to our 2015 season is also reflected in deferred revenues, which are up $23 million or 33% to $93 million when compared with the first quarter last year. This increase has been driven by positive early season momentum in the sale of season passes, as well as strong early adoption of our all-season dining program which is being rolled out broadly across all of our parks this year.

While the earlier timing of Easter and some accelerated promotional programs contributed to a portion of the first-quarter increase in deferred revenues, season pass and all-season dining sales have continued to be strong into April. And deferred revenues remain up more than 20% year over year.

We continue to believe that our season pass base and our new all-season dining programs represent meaningful areas of growth for us in 2015 and beyond. As of today, we have seven parks open for operations, and an eighth, Dorney Park opens this weekend. I'm pleased to say all of our 2015 capital investment projects have opened or are scheduled to open on time and on budget.

Delivering our new attractions at the earliest possible date helps to reinforce the solid price value proposition we rely upon to drive strong attendance and per caps, and it encourages early season visitation. Obviously, we are pleased with our great start so far in 2015. As the positive first quarter trends in terms of attendance and guest spending have continued into April.

These early season trends put us on pace to deliver what we believe will be our six rate record year. But it is important to remember that the vast majority of our 2015 results are yet to come.

Now I'll turn the call back over to Matt.

Thank you, Brian.

In early 2012, Brian, Richard Zimmerman and I presented our FUNforward strategic plan that targeted $450 million or more in adjusted EBITDA by 2016. Within the plan, we identified several initiatives we were relying upon to achieve our goal. We are pleased to say the solid execution of the initiatives has produced results that are ahead of what we had originally forecast.

With this in mind, over the past year, we've worked actively with our Board of Directors to establish the next generation of FUNforward. In doing so, we paid special attention to what was happening outside of our parks, including trends that would represent both opportunities and threats.

We also focused on our core competencies. Some, like park operations and the delivery of world-class attractions, have long legacies. While others like CRM and revenue management have been installed over the past few years.

As we look forward, it was satisfying to reflect on how far we've come since we started putting the new management team together in June of 2011. But enough said about the past. Let's talk about the future.

And to mark the beginning of this new chapter, we launched the first generation of our new Corporate website today, www.cedarfair.com. This site will play an important role in communicating the new Cedar Fair to potential partners, investors, vendors and future employees.

To be clear, Cedar Fair's guests are loyal to their parks. And while many of them may appreciate the collective Cedar Fair story, the individual park websites will still be the primary online tool for our guests. But as we operate under a house of brand approach, with each park owning a unique brand built over many years, our unique Corporate website will allow us to combine all that is happening into one cohesive story.

The new site reflects our Corporate values and internal brand positioning as summarized in the brand positioning. We take fun seriously. The site will evolve dynamically as we determine how best to meet the various needs of this particular audience. I encourage all of you to visit the new Corporate site over the next few days, and monitor it as our story moves forward.

So where do we go from here? For external purposes, we are labeling the next generation of our strategic plan as FUNforward 2.0. Internally, we refer to it simply as more FUN.

Our new long-term target is to grow adjusted EBITDA of $500 million or more by 2018. This implies an average growth rate of 4% over the next four years, and is consistent with our original FUNforward growth rate.

It is important to note here that we do not anticipate this growth to be linear. Due to the possible impact that short-term macro factors can have on our operation, as well as the timing of returns on longer-term investments.

We've identified five themes that will drive our growth through 2018. These themes have evolved from the ones at our original FUNforward strategic plan, but they still encompass our original initiatives and aren't mutually exclusive. Let me list them first, and then I'll explain them in more detail.

First, we will continue to focus on enhancing the guest experience in an effort to deliver a strong price value proposition, targeting a quality family-oriented audience. Second, we will focus on growing advanced purchase commitments for all the products we offer in all of our attendance channels. Third, we will embrace digital technology in all aspects of our business.

Fourth, we will continue to be disciplined around the prioritization of capital and operating initiatives, as we look to realize the full market potential of each of our parks. And fifth, we will pursue complementary development adjacent to our parks.

We'll start with theme number one, which focuses on our abilities to stay in our strong price value proposition by delivering a quality guest experience. In everything we do, our first focus is always on how does this enhance the overall guest experience. Our ability to drive pricing relies upon the delivery of a quality guest experience, including new rides and attractions, new live entertainment offerings, and exceptional guest service, all which drives repeat visits.

We continue to believe the overall Cedar Fair park experience provides a strong price value proposition. Especially when compared with alternative forms of entertainment, such as movies, sporting events and concerts. This comparative value and strong price value proposition in turn supports our ability to dynamically push pricing at our parks.

Additionally, over the past three years, we have built the technology and town infrastructure to support our CRM efforts. The assembly of multi-year consumer data under one cohesive system, not previously available to us, will amplify our customer communication efforts going forward. As an example, all of our direct communications now contain segmented messages and images most relevant to a particular household.

We have never been better positioned to drive the right price, to the right consumer, with the right message, at the right time. I also believe we will benefit from a more consistent approach to early season value pricing.

Unlike the destination parks, where most people can readily identify the peak and value season, the regional amusement park industry does not have similar clarity. At Cedar Fair, we've begun a multi-year commitment to marketing campaigns that will let value-sensitive consumers know that the May-June time frame provides both a great value and a great experience.

Besides the direct benefits, early season demand provides us with greater pricing confidence throughout the balance of the season. We recognize that to optimize this early season opportunity it is important to continue our tradition of opening our new rides and attractions as early in the season as possible.

Finally, in this category, we will remain disciplined in all we do to continue to appeal to a wide family-oriented audience. This target audience is economically preferred, and supports a favorable in-park experience for all.

Our theme number two, driving advance purchase commitments, provides several benefits. By getting consumers to purchase admission tickets and other products ahead of time, we can use advanced purchase patterns to improve our visibility to market trends and enhance our management revenue capabilities. We've built a buffer against traditional barriers to visitation, such as weather and alternative entertainment option, and we gained favorable in-park spending elasticity from consumers who pay in advance.

Among other things, our guests can now buy season passes. Our most valuable advance purchase offering, as well as daily admission tickets, parking, dining plans and fast lane passes in advance of their visit. Our attractive installment payment programs have proven to be highly effective in growing our season pass base.

Many of our CRM campaigns, as well as in-park season pass-oriented special offers, have already driven increased season pass renewal rates across our system over the past two years. And we plan to introduce an enhanced season pass renewal program in the fall of 2015.

In addition, for 2015, we initiated numerous limited-time sales of single-day tickets that are only good for the early season, which typically means the tickets are good through June. These limited time offers include new campaigns such as Black Friday, Cyber Monday and President's Day sales. The results of these offers and the advanced purchase commitments they've produced for 2015 have been very encouraging.

Moving on to theme number three. We plan to further embrace digital technology in all aspects of our business. We are just now beginning to take advantage of all that digital innovations have to offer.

Over the past year, we've been applying digital innovations to enhance the guest experience within our parks. Most notably in our amusement dark rides such as Wonder Mountain's Guardian at Canada's Wonderland, and Voyage to the Iron Reef at Knott's Berry Farm, which is set to debut next month. We are actively pursuing additional digital entertainment-oriented applications that not only offer capital efficiency, but also greater appeal for our guests through content and storyline updates.

Based on the increasing importance of mobile apps, we've established a new partnership with a technology company that has developed a robust mobile platform for use within our parks. This new mobile app solution will allow us to enhance the in-park experience for our guests by providing them the conveniences and information they value, such as ride wait times, wave finding and show times.

The app will also allow us to create a two-way conversation with our guests, which can drive increased in-park spending and ensure the capture of valuable guest data for our CRM application. We are introducing this platform in two of our parks this year, King's Island and Carowinds, with the intention of a broader rollout in the future.

In-park photo capture is another opportunity on the digital technology front. The popularity of digital imaging has grown rapidly, and capturing and sharing memories has always been central to the park experience.

With the expiration of our previous photo imaging contracts in 2015, beginning next year, we will launch a new technologically-advanced in-park photo solution and pricing models that will appeal to all of our guests. With the ancillary benefit of amplifying our social media marketing efforts.

Another digitally-based initiative is FUNTV, which continues to advance. We introduced FUNTV at our parks in 2014, with the goal of creating a more effective platform for in-park sponsorships and corporate alliances.

We are also committed to using FUNTV to engage and entertain guests, as well as inform them of numerous park offerings while they wait in line. We continue to believe in this initiative, and expect it to generate a growing revenue stream over the next few years.

Lastly, we have begun the process of rolling out Wi-fi capacity to our parks. In 2015, these efforts will be concentrated at just a few parks where we will pilot our Wi-fi solution.

It will take us a couple years to install this capability in all of our parks. But besides being a fundamental guest expectation, it will provide an infrastructure for many of our systems, including the ones I just mentioned.

In addition to these revenue-generating initiatives, we remain focused on our IT systems and infrastructure to ensure transaction and labor efficiencies in all touch points. We call this ease of purchase. Anytime you want to spend money with us, it should be intuitive, simple and fast.

This is why we are modernizing the front gates at our largest parks, why we added traffic lanes at Carowinds, and why we have flexible capacity for activating season passes during your first park visit. No one likes to wait, and they certainly don't like to wait to give you money.

We have been successful in the past in identifying systems to enhance the guest experience, while at the same time reducing labor costs. And we will continue to make efficient investments in this area going forward.

Theme number four is on maximizing our park's market potential through discipline, capital and operating initiatives. Having seen the early results from our expanded commitment to Carowinds, we are proud of our decision to make a major investment in this park.

I encourage you to stand at the entrance bridge and listen to guest superlatives as Fury 325 flies both over your head and under your feet. Charlotte is a vibrant market, and we're moving forward aggressively to implement our planned multi-year investment in Carowinds.

At Knott's Berry Farm, where we continue to see the benefits establishing and delivering a differentiated brand positioning. The addition of family-oriented attractions, entertainments and streetmosphere to an already-strong collection of thrill rides, has been extraordinarily well received. Additionally, special event programming provides multiple compelling reasons to visit the park over the course of a season.

While we've spent relatively modest amounts of CapEx at this park, we did increase our operating costs in an effort to enhance experiential entertainment around the park. And we're clearly seeing the benefit through record attendance, guest spending and profits. We believe there are similar opportunities at our other parks that we will pursue over the next several years.

We will build from our experiences at Knott's Berry Farm and Carowinds to critically evaluate the growth potential of our other existing parks. Even our largest park, Cedar Point, has the potential for additional growth. And the renovation of Hotel Breakers, which is essentially complete, provides an opportunity to increase the park's super regional multi-days positioning. Now that the hotel renovations are complete, we're going to lean into the multi-day positioning for this park, as any increase in multi-day tickets will have a significant impact.

Our fifth and final theme is to pursue complementary development adjacent to our parks. Most notably, we have filed for rezoning our Great America property, which is adjacent to the new San Francisco 49ers football stadium in Santa Clara, California. Once the rezoning is complete, we will have more certainty in our ability to add new rides and attractions, as well as our ability to consider complementary commercial development such as retail, hotel, dining and entertainment.

This is a unique property in a unique market. We anticipate the rezoning to be completed within the next year.

At Carowinds, we've identified two sites where we have the opportunity to expand overnight accommodations for our guests and the growing Charlotte market. This synergistic use of the property would help drive incremental attendance, and create a consistent revenue stream.

We are currently evaluating several options, some of which would require little to no capital investment from Cedar Fair. We also believe there may be similar opportunities at our other properties.

Now embedded within the five themes we laid out, is the value we see from developing a broader range of third-party partnership relationships. The existing relationships that we have, have had a positive impact on our business. Including our partnership with innovative ride vendors, as well as our partnerships with Coke, Accesso, our eCommerce platform, Cramer-Krasselt, our ad agency, the San Francisco 49ers, Peanuts worldwide, and several others have clearly had a positive impact on our business.

As part of our scanning with the external entertainment landscape, we've initiated discussions with and are actively pursuing relationships with forward-thinking companies. Where we see mutually beneficial synergies to take both companies to the next level. The companies we are talking about generally fit within three categories.

First, those who have product innovations that we can apply in our parks. We're helping them understand how to commercialize their innovations in a way relevant to our business. These partners appreciate that we can provide commercial activation at a scale which is difficult to find anywhere else.

Second, we're expanding our relationships with partners who have an established product and loyal audience. To integrate consumers' experiences with these products into their experiences related to our parks. Most importantly, we expect these type of partnerships to incremental visitors through their already established distribution channels.

And third, those who have particular expertise which extends beyond our core business. One such example would be real estate developers. As with all partnerships, the timelines for implementation are less precise than the delivery of a new roller coaster.

This uncertainty is distinctly different from the full control we have for the rides and attractions we like to purchase. However, the value potential is considerable. These are the highlights of the five themes we expect to drive our growth over the next several years.

Now I'd like to turn the call back over to Brian for our outlook on the key uses of free cash flow going forward. After which, we'll open the call for questions. Brian?

Thanks, Matt.

As you're aware, we do our best to be as transparent as we can be in regard to the allocation of our cash flow. This is a fairly easy business to model, as cash is primarily allocated to four areas. Cash used for debt obligations including interest payments, cash used for taxes, cash used for capital investments, and cash used for unit holder return, primarily distributions.

Going forward, we expect annual cash interest payments to be approximately $85 million, As the majority of our debt has been fixed through long-term fixed rate notes or interest rate swap agreements. At this point in time, given we are within our targeted leverage ratio range of 3 to 4 times debt to adjusted EBITDA, we do not intend to make any additional debt payments outside of our regular amortization requirements.

Cash taxes are expected to be $20 million to $25 million this year, and will continue to increase into 2016 and 2017 as the remainder of our NOLs are used up. Based on our performance projections, our current entity structure, and an effective tax rate of approximately 28%, cash taxes are expected to increase to north of $50 million in the next few years.

Over the past year, we've been analyzing various ways to optimize our entity structure. The options we've identified could result in an effective tax rate approaching 25% in additional cash tax savings. However, we have more work to do as we analyze the implications of these options. We expect our review to be completed by the end of this year.

On the capital investment front, we continue to believe investing in new rides and attractions at our parks is critical to driving long-term growth. For 2015, our capital program is at a peak level of $170 million. Driven in large part by the Hotel Breakers renovation project at Cedar Point, as well as aggressive investment projects at Carowinds as we look to transform this park into our fifth big park.

Given our confidence in the Charlotte market, we plan to continue to be aggressive in our capital investments at this park going forward. Our capital plans will also continue to place an emphasis on building to scale in all of our projects. As we believe it differentiates our parks, and helps to protect the integrity of our business model for years to come.

The level of capital spending which aligns with our $500 million adjusted EBITDA target is in the range of $130 million a year. This not only includes new rides and attractions, but also a continuing investment in our parks' infrastructures. Spending above this level could occur if we identify incremental opportunities with compelling returns.

Finally, and most importantly, the remainder of our free cash flow will be returned to our unit holders through increased distributions as we have historically done. We're proud of our ability to aggressively grow our distribution over the past several years, and we believe we are well positioned with a solid balance sheet, appropriate liquidity reserve and a positive earnings outlook to continue this trend going forward. To be clear, our goal remains to provide a growing distribution in a steady and linear path.

With that, we'd now like to open up the call for questions. Tracy?

Thank you.

(Operator Instructions)

And we'll go first to Afua Ahwoi.

Thank you. Good morning. One question.

First, I think in the past, given the current fiscal year or calendar year guidance, I didn't see it in the press release. So is there a reason why, is there something that you can share with us to help us think about the year? I know you gave the long-term guidance.

And then the followup question on the -- I think you mentioned the partnership you mentioned established products with all companies of established product in the fan base. Are you talking about some sort of ITs or rides? I'm just trying to get specific on that. Thank you.

Sure, Afua, good morning. So the fist, let me lean in a little bit on 2015. I don't want this audience to read anything into our not giving annual guidance, as to anything less than absolute confidence in where we'll end up in 2015.

But we have seen, over the course of time, that that forecast isn't necessarily as helpful as it used to be. Maybe it is for certain analysts, by the way, I will acknowledge. And so we've decided to go to the long-term target.

The other reason we want to do that is to make sure that we are making the best decisions both short and long term. So we're not going to provide annual guidance anymore. I think that the long-term guidance probably fills that bill.

On the second question, that group does include as part of that group people who have intellectual property that we've started to establish relationships with that we think can have a unique role in our parks, and I'm hopeful that that comes to light over the next three to six months.

We'll go next to Tim Conder from Wells Fargo Securities.

Thank you. Matt, just wanted to review the long-term guidance as the first question here. What revenue growth do you have baked into that? Or Matt or Brian, either one

And then secondly, as it relates to the overall season passes. Can you give us a little more color on the units? How those are trending year over year, the attach rate of the dining pass?

And then any consideration you are giving -- I think you've always said you'd look at it. And maybe just give us an updated color related looking at a more membership-type model. I know you have the monthly payments available, but more of a membership type of a model similar to what's done elsewhere in the industry.

Tim, it's Brian. I'll tackle the first couple parts of that. As far as season pass trending, as we said on the call, we're very pleased with the early progress and trends that we've seen. Not only in season pass in terms of the number of units, but also the new season pass dining program that's being broadly rolled out.

We're not going to break out the level of detail between those. But I can tell you from an adoption rate perspective at the park level, we're pacing ahead of our original plan, and strongly enough at certain parks that we've already begun to review taking pricing up. And, in fact, one park in particular, Knott's Berry Farm, we have taken pricing up on that, as that park has been in daily operations from day one. So feel very good about where we are on both of those product lines and initiatives.

As far as the long-term guidance is concerned, we talked to the $500 million at the EBITDA line representing a 4% CAGR. I think we would expect something very similar at the top line, maybe a little inside of that.

We're not pushing at this point or talking to growing margins dramatically at this point in time. That continues to be an area or a metric of focus for us. But it's not the end-all, be-all.

So we'll continue to make the right investments in the OpEx as we've talked about, as well as CapEx. But I think you can anticipate a top line growth rate that's something close to that same 4%.

And then, Tim, this is Matt. Good morning.

As to your other question about the potential of other programs, season pass programs. We have done a considerable amount of work specific to our customer base. And so, I don't want to go into details today about what the renewal program will be.

But at this point in time, you can anticipate that our pass will be a little different than maybe others are doing in the industry, because I think our consumer base is different. So, we're excited about the program we'll rollout this fall, and I'll leave it at that for this call.

We'll go next to Joel Simkins from Credit Suisse.

Hello, this is Christie Fredericks on for Joel. I just had a question about the increased distributions that you mentioned. How should investors think about an increased dividend versus potentially repurchasing stock in the future?

I'll take that, and, Brian, you can pile on. Look, the core investment thesis for Cedar Fair remains the fact that we need to produce the optimal amount of free cash flow, and continue to grow the distribution aggressively and sustainably. And so that is the priority at this point in time. Stock buyback is not a priority on our list.

Great. Thanks.

We'll go next to Barton Crockett from FBR Capital Markets.

Hello. Thanks for taking the question. I was curious about a couple of things.

One is, how you see per cap trends this is year; if you have such strong growth in the deferred revenues type of season pass and the all-season dining, sometimes that can depress the effective per cap growth that we see as we change the mix. Is that a phenomena that you expect us to see this year or not? That's my first question.

And then I guess the second question, to throw that in here is, if you could give us some detail around the tax structures you're reviewing. Is that MLP-related, REIT-related, or something completely different?

Yes, so, Barton, your first question, and they're both good questions, I should say. Your first question, though, we do have a little higher season pass mix in our attendance for the first quarter. But as Brian referenced, we also saw increases in per cap spending in the parks.

So we aren't experiencing that traditional phenomena. We did a lot of work last year to understand season long spending of our season passholders, and we're approaching it a little differently.

And again, for purposes of this call, probably not appropriate to go into. But we have not seen the dilution of the per cap yet, even though we have a higher mix of season pass visitations so far this year. Now again, keep in mind, it's one small quarter and primarily Knott's Berry Farm.

Barton, it's Brian. As it relates to the tax structure, first let me remind everyone that the overall tax structure that we put back in place in 2006 with the Paramount Parks acquisition has been very efficient and beneficial to the Company and our unit holders over the years. However, as the business results have continued to grow, we've begun to use up those NOLs, and the benefits from those NOLs have begun to dry up.

So as we look at various options, we're contemplating a number of scenarios. Some of which where we would basically super charge our partnership structure. I think we have to remember that the MLP structure is a unique asset to Cedar Fair that we don't want to just walk away from.

But as we look at super charging that structure to reduce the overall effective tax rate, we also have to keep in mind that the gross income that we earn on those partnership structures are subject to a PTP excise tax. So it's not a zero sum game necessarily.

So we'll continue to do our homework. As we said on the call, we'll be better positioned later this year to comment on the direction that we're going to go in.

But there are certain limitations and certain things that we have to keep in mind. The excise tax on the PTP structure being one of those, and the fact that we have foreign interests in the case of Canada's Wonderland that we won't be able to get necessarily out of the partnership structure. Those are -- or into the partnership structure, I should say. So there are going to be certain assets that will always reside in the C corp entity world, and that will continue to be the case going forward.

We'll take our next question from Josh Borstein from Longbow Research.

Hello. Good morning, everyone. Thanks for taking my questions here.

You had mentioned you're probably not likely to go towards a membership pass model. And you referenced the fact that your customers are a little bit different than maybe some of your regional park peers.

I was just wondering if you can comment a little bit about how your customers may be a little bit different? Just because on the face of it, it would seem that your customers should be similar to some of your regional peers. Thanks.

I'll try, Josh, but obviously I don't have -- the information I have is specific to us. And we have -- the data we have would indicate that we have a larger percentage of family, attending as family, and that is one of the characteristics that differentiate us.

We've also seen through our research that our consumer does not seem to have an appeal for certain devices that are in membership systems more broadly. Not just in our industry. So we think we have other levers available to us that will encouraged more renewal.

The other thing I should say is, look, our renewal rate has been growing very well for the last two years. And I credit that to our CRM systems, where we're now able to have an active relevant dialogue with each of our season pass holders particularly.

And the new platform we are going to put in place will be particularly effective with our season pass holders. So I think you can play different playbooks, ours is just going to be a little differently -- little different, excuse me.

Great. Thank you. And then just a followup, if you can talk about the advance bookings for the Hotel Breakers. It sounds like that's on schedule, just what that might say about the business prospects for the year.

And in the press release, you mentioned the catering pavilion adjacent to the hotel. Could you discuss exactly what it is, if it's included for those staying at the Breakers, is it going to be an add-on option?

The second is the first, which is the catering facility and the hotel which we just walked yesterday, are both going to be phenomenal assets for us. The catering facility primarily services large groups with catered meals.

And so those are your church groups, the bands, the company picnics. And those pavilions are of a scale now that will allow us to provide both better service and a better experience. And so, again, back to my opening comments, I think it's important for people to get out to our parks and walk these assets to understand perhaps what differentiates us.

The hotel is the same thing. This hotel is going to allow us to jumpstart the multi-day positioning for Cedar Point. It is maybe the most important investment we've made since I've been here.

So I'm encouraged by that. The early season booking trend is positive, but I got -- again, it's so small. And the lead time for booking in our business is relatively short. So I don't want you to read too much into that, but the quality asset is dramatically different from what it was before.

Good luck on the balance of the year.

Thank you.

Thank you.

We'll take our next question from Tim Conder fro Wells Fargo Securities.

Thank you. Just wanted a little bit of clarity on FX, Brian. Just a little more color in the quarter, and a bit more importantly for the year as it relates to Canada's Wonderland?

Sure, Tim. As it relates to the quarter given Canada's Wonderland wasn't in operation, there's really no material or meaningful impact on Q1.

As we said in our year-end call, all depending on what your outlook is for the Canadian dollar long term, but based on the projections that we've seen, we would estimate the potential impact at the EBITDA line could be somewhere between $5 million to $10 million for 2015. So more than it was last year, but still in the grand scheme of things not overly burdensome on the full-year EBITDA.

Okay. And if I may just circling back, I know, again, maybe that's a slight component and there's variability and the focus is on the long term here. But your phrase that you're going to achieve your $450 million goal for 2016, that's on track, or it's ahead of plan, just any color on that?

Would the timing of that, would that be expected to clip that early then, is that what you're effectively saying by 2015? And then we go on and focus more on 2018? Just anything you can offer there.

All I would say, Tim, is we feel very confident that we're going to find that milestone relatively shortly. And all things considered, and that's why we've moved on to the $500 million. But all indications for 2015 are positive.

We feel good not only about the programs we've put in place, but the people we have in place. Things like our CRM system, things like the products we've introduced.

I rode Rougarou yesterday here at Cedar Point. It is an outstanding coaster. So, Tim, we're leaning into 2015, and hopefully we'll see that.

Okay. Great. Enough said. Thanks, Matt.

Thank you, Tim.

(Operator Instructions)

And we'll go next to Ray Cheesman from Anfield Capital.

Matt, I was wondering, as you start this new season, are you expecting to see any of those weather, school calendar challenges that some of the parks faced last year?

We don't anticipate that, Ray.

Terrific. The other thing I wondered was we, again, are starting a new season at a substantially lower fuel cost, or let's say fuel bleed of the family's disposal budgets. Do you think that's having any impact on you with the renewal rates, growth rates or the addition of people adding on an all-season dining pass to what they might have had the year before?

What we've traditionally said is, when gas prices go up, we don't seem to lose attendance. So I think with intellectual integrity, I don't know that we're going to see incremental attendance associated with it.

Where we do expect to see is some in-park spending elasticity should gas prices stay down measurably. That's normally where we would experience that dynamic.

Thanks very much.

Thank you.

And there are no other questions in the queue at this time. I'd like to turn the conference back over to our moderators.

First of all, thanks, everybody, for your questions, and your continued interest and ongoing support for Cedar Fair. As I'm sure or hope you can tell from our comments today, we're proud of what we've accomplished over the past four years. And even more excited about what is in store for us in the next four, including 2015, which we certainly expect to be another record year for which Cedar Fair.

Finally, I'll say I encourage all of you again to visit our parks this summer, and experience firsthand the Cedar Fair difference. Stacy?

Thank you, everyone, for joining us on the call today. Should you have any followup questions, please feel free to contact our Investor Relations department at 419-627-2233. We look forward to speaking with you again in about three months to discuss our second-quarter results.

This does conclude today's conference. We thank you for your participation. You may now disconnect.