Six Flags Entertainment Corp (FUN) 2015 Q2 法說會逐字稿

Please stand by.

Good day everyone, and welcome to today's Cedar Fair second quarter conference.

Just as a reminder, today's call is being recorded.

At this time I would like to turn the call over to your host for today, Ms. Stacey Frole.

Please go ahead.

Thank you Sara.

Good morning, and welcome to our second quarter earnings conference call.

I am Stacey Frole, Cedar Fair's Vice President of Investor Relations.

This morning we issued our 2015 second quarter earnings release.

A copy of that release can be obtained on our website at www.CedarFair.com under the Investors tab, 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 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 addition, in accordance with Regulation G, Non-GAAP financial measures used on the conference call today are required to be reconciled to the most directly comparable GAAP measures.

During today's call we will make reference to adjusted EBITDA as defined in our earnings release.

The required reconciliation of adjusted EBITDA is in the earnings release, and is also available to investors on our website via the conference call access page.

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 contents of the call will be considered fully disclosed.

Now I will turn the call the call over to Matt Ouimet.

Thank you Stacey.

Good morning everyone.

Thanks for joining us on today's call.

Over the past few weeks I visited 9 of our 11 parks, with trips scheduled in the near future to the other two.

The greatest value comes from these visits comes from the interaction with our local management teams, and personally witnessing our commitment to the guest experience.

While our research continues to confirm very strong guest satisfaction scores, it is always comforting to me to see the guest experience firsthand.

Certainly some of the guest experiences driven by our 58 miles of coaster track, hundreds of family rides, and dozens of shows, but ultimately the quality of the guest experience is distinguished by the commitment our associates have to their roles in providing a best day of summer experience.

I think it is important that we start today by publicly acknowledging their role in our ongoing record results.

As we enter the final third of our operating season, I'm extremely pleased to report our operating performance remains strong, and we're on track to achieve our sixth consecutive year of record results.

Based on preliminary results through this past Sunday, August 2, net revenues have increased approximately 5% when compared with the same period a year ago.

The increase in net revenues is a result of increases across all areas of our business, including record levels of attendance and guest spending.

For the first 7 months of the year, attendance increased 3%.

Average in-park guest per capita spending increased 2%, and out of park revenues including resort accommodations increased 8%.

I would just note here that the declining value of the Canadian dollar negatively impacted our reported results, and Brian will provide the relevant details in his comments.

Our record attendance at 15.1 million guests through August 2 resulted from an increase in the number of unique visitors to our parks, as well more visits from our loyal season past customers.

Our strategy heading into this year was to provide experiences that would encourage our guests to visit our parks early and often.

This included a focus on early season pass sales, the introduction of an all-season dining program across all of our parks, new springtime events, and introducing innovative new rides and attractions as early as possible.

These have all been major drivers in our current year attendance growth.

We believe we are well-positioned to continue this momentum as we head into the busy month of August, and our extremely popular Halloween events later this fall.

Over the next month, our parks will be hosting many special limited time only events, such as Bands, Brews and BBQ events, charity events, running events from triathlons to 5K fun runs, coaster enthusiast events, and special activities for our season pass holders.

All of these events including Halloween are geared toward creating additional , urgent, and compelling reasons for our guests to visit our parks.

Our record average in-park guest per capita spending of $45.87 is a result of strength across all aspects of our business, including increased guest spending at admissions, food and beverage, merchandise and extra charge attractions.

These higher guest spending levels are largely attributable to our ability to drive advanced purchase commitments, combined with our continued investment in enhancing the overall guest experience.

Advanced purchase commitments Include early season pass renewals, sales of all-season dining, resort reservations, and group sales.

These commitments not only provide a buffer against traditional barriers to visitation, such as weather and alternative entertainment options, but also allow us to gain favorable in-park spending elasticity, from consumers who choose to pay in advance.

We believe our continued investment in the overall guest experience, including new rides and attractions, new live entertainment offerings, higher quality food offerings, and exceptional guest service allows us to drive higher pricing for greater value, as well as improve our penetration rates.

Another area of strength is our growth and food and beverage per caps.

Our executive chefs continue to introduce more regionally relevant food offerings throughout our parks, and our guests have certainly noticed.

Additionally the full rollout of all season dining has been well-received, and further enhances the value proposition we offer our season pass holders.

Our continued investment in technology and talent also give us confidence in our ability to drive the right price to the right consumer, with the right message at the right time.

Because of this, we fully expect our growth in guest spending to continue through the remainder of this year, and into the future.

Our strong capital program has helped drive improvement in our year-to-date results.

Fury 325 and the new Front Gate at Carowinds, combined with last year's investment in Harmony Hall, an indoor dining and entertainment facility, have been significant contributors to this park's success.

These investments have resulted in a strength across all ticket categories, and in-park guest spending at Carowinds.

The second iteration of our amusement dark portfolio, Voyage to the Iron Reef at Knott's Berry Farm, has also been extremely well-received, and a strong contributor to Knott's continued success in 2015.

This innovative new ride embraces the legacy of the historic park, while also producing a fun, interactive modern gaming experience for guests of all ages to enjoy.

Lastly I would like to touch on the Grand Reopening of Hotel Breakers at Cedar Point.

I urge you to attend our Analyst Event, which will take place next week at Cedar Point, as it is hard to accurately portray in words the transformation of this iconic property.

The completion of the two-year renovation has generated rave reviews, and has been the main driver in our record out of park revenues through this past weekend.

More importantly, Hotel Breakers is situated adjacent our flagship park on our mile long beach, now offers a world class resort experience, which parallels the world class experience at Cedar Point.

In the upcoming weeks, our parks will announce their new attractions for 2016.

I assure you it is an impressive line-up that further supports our revenue growth strategies, and reinforces our already strong consumer price value proposition.

Now I would like to turn the call over to Brian to discuss our financial results in more detail.

Before discussing some of our longer term initiatives.

Brian.

Thanks Matt, and good morning.

Before I begin, I want to remind everyone on the call that it is always difficult to extrapolate partial season performance into full-year results.

Essentially all of the revenues from our seasonal amusement parks, water parks, and other resort facilities are realized during the 130 day to 140 day operating period, beginning in the second quarter, with the vast majority of the revenues concentrated in the third quarter during the peak vacation months of July and August.

Only Knott's Berry Farm is open year round, and the third quarter is also their highest level of attendance.

As of this past Sunday, August 2, approximately one-third of our operating results are still to come.

First, I would like to briefly discuss our results through the second quarter, before moving onto more current revenue and attendance trends.

As noted in our earnings release issued earlier this morning, the 2015 season is off to a solid start, with net revenues the first half of the year up 5%, or $21 million to $424 million.

Our revenue growth over this period was largely driven by a 3%, or 220,000 visit increase in attendance, and a 2% or $0.79 increase in average in-park guest per capita spending.

Over the same period out of park revenues increased 11%, or $5 million to $51 million.

We're very pleased with the balanced growth across all areas of our business.

The 3% increase in combined attendance is attributable to broad strength across the majority of our core ticketing categories.

The very important season pass channel has been particularly strong and through the end of the June the percent of overall attendance from season pass visits is up 200 basis points over the same time last near.

This early season shift in attendance mix reflects the success of our efforts to improve our season pass penetration rates, which have been a core focus of our long term growth strategy over the past several years.

Our total 2015 season passes sold have now hit a record level, and through the end of the second quarter, average visitation per pass is up year-over-year.

At the end of the second quarter, our deferred revenue balance totalled $148 million, representing an increase of $13 million from the second quarter of 2014.

The year-over-year increase in deferred revenues reflects the record number of season passes sold, as well as the strong early adoption of our new all-season dining program, which was introduced across all parts for the first time this year.

Given the shift in attendance mix towards season pass, we're very pleased in our ability to improve guest per capita spending levels through the first half the year.

The 2% increase in per capita spending was primarily driven by a more than 5% increase in average food and beverage per cap, as well as higher guest spending levels on extra charge attractions and premium products, such as Sling Shot and Fast Lane.

The growth in guest spending on food and beverage is the direct result of our continued focus on improving the quality of our food and beverage offerings, as well as the successful rollout of the our all-season dining program.

Our in-park guest per capita spending through the first half of the year also benefited from continued strength in our admissions per cap.

We continue to successfully improve pricing across our various ticketing channels, while strategically managing discount offerings that appeal to our more value-oriented guests.

The 11%, or $5 million increase in out of park revenues we generated through the first half of the year reflects improved results from our resort properties, led largely by the successful renovation and rebranding of the historic Hotel Breakers at Cedar Point.

Out of park revenues have been also boosted by continued growth in events and catering facilities across our parks, including our Great America Park in Santa Clara, California, which sits adjacent to the new 49ers Stadium.

Moving onto the cost front, operating costs and expenses through the second quarter totaled $346 million, representing an increase of $14 million, or 4% from the same 6-month period in 2014.

The increase in operating costs includes higher labor and maintenance costs through the first half of the year, as we continue to invest in our employees and our park infrastructures, as well as an increase in costs of good sold due to our higher attendance levels.

As a percent of revenues, costs of goods sold remains comparable with prior years.

During the first half of the year, SG&A expenses also rose due to promotional activities related to park-specific events, along with the strong unit price performance during the period, and its impact on our reporting of non-cash equity-based compensation.

Meanwhile adjusted EBITDA, which we believe is a meaningful measure of our park level operating results totalled $84 million for the first half of 2015, up 6% or $5 million from 2014.

It's important to note that our year-over-year operating comparisons have been impacted for foreign currency translation from our park in Canada.

Adjusting for the impact of the foreign exchange, our revenues through the first six months of the year grew 6%, or $24 million on a constant currency basis and operating expenses were up 5%, or $18 million.

While the net effect of foreign exchange rates on reported adjusted EBITDA for the first half of 2015 was nominal at less than $0.5 million, we estimate that full-year reported adjusted EBITDA could be negatively impacted by as much as $5 million to $10 million, compared with 2014 if the deterioration of the Canadian dollar continues as expected into the third quarter, where we generate our largest share of EBITDA.

Turning our attention to the operating results through this past Sunday, August 2, based on preliminary results, year-to-date revenues through August 2nd, were up 5%, or $39 million or a reported US dollar basis.

On a constant currency basis, revenues were up 7%.

Consistent with our results through the second quarter, the strong results through July were led by a 3%, or 484,000 visit increase in combined attendance, a 2% higher average per cap level, and an 8% or $6 million increase in out of park revenues.

On a constant currency basis, our average in-park guest per cap has improved 3% year-over-year on the higher levels of guest spending on food and beverage and premium products, as well as the strength of our admissions per caps.

The continued improvement in attendance and per capita trends through this past weekend, as well as the growth in out of park revenues, gives us confidence that our 2015 capital programs and our long-term strategies are working very well, and the fundamentals of our business remain solid.

Now let me shift focus to our balance sheet for a moment.

At the close of the second quarter, our balance sheet remains in excellent condition, in terms of providing both liquidity and financial flexibility.

Our receivables and inventories are at normal seasonal levels, and we have long-term credit facilities in place to fund current liabilities, capital expenditures, and operating expenses as needed.

At the end of the second quarter, we had $35 million in cash on hand, and $609 million of variable rate term debt, before giving consideration to fixed rate interest swaps.

We also had $950 million of fixed rate bonds, and $42 million in outstanding borrowing under our revolving credit facilities.

In 2015, our revolver usage levels were similar with 2014.

We peaked in borrowings at the $85 million level, and we fully paid down borrowings by the first week in July.

To summarize, we're very pleased with our operating results through the first seven months of the year, as well as our solid financial position.

We continue to generate a significant amount of free cash flow, and our capital structure provides us with substantial operating flexibility.

We're well-positioned heading into the second half of 2015, and will continue to prudently manage our cash flows to maximize value for our unit holders, through a combination of cash distributions and organic growth opportunities.

With that, I'll turn the call back over to Matt.

Thank you Brian.

As we've noted in the past, our leadership team continues to manage the business in a manner that delivers both short term and long term results.

We've already discussed the execution of our 2015 operating strategy.

So I would now like to take a moment to discuss some of our plans for 2016 and beyond.

As these plans come together, we're increasingly confident in our ability to continue to drive both top line and bottom line growth.

I also believe it's important to remind everyone that no single metric reveals the quality of our business model at any point in time.

Certainly we follow attendance, per caps, margin and capital spending closely, but we also follow the number of unique individuals.

The response rates to each of our offers.

The net promoter scores by audience segment.

Spending patterns by guest segment, season pass renewal rates, and many other statistics.

And as the marketing world evolves, we're starting to put in place more disciplined metrics surrounding online search results, ensuring we are placing the right content in the right channel to optimize our positioning in the major search engines.

Over the past several years we've invested in both the talent and systems that allow us to be more dynamic and effective, as technology and social media continues to evolve.

Now I would like to give you some color around several future growth initiatives.

First, we are very pleased with the performance of Great America Park in Santa Clara, California.

The addition of the 49ers Stadium adjacent to this property, combined with the region's very strong economic growth, have provided us with expanded business opportunities.

Last year we invested in high quality meeting and catering facilities, allowing us to partner with the 49ers, and create an incremental revenue stream beyond our core summer season.

We're also in the middle of a rezoning application, which will provide greater certainty in terms of our ability to expand the offerings in and adjacent to this park going forward.

In addition, as we look into further embrace digital technology, we must first invest in our infrastructure.

This includes items such as park-wide Wi-Fi, which not only provides our guests with a service they increasingly expect, but it is the quiet utility that supports many of the guest facing technologies we current will have in development.

Todd Sasala, our VP or Information Systems, and his team launched this initiative as King's Island in Carowinds this past year.

We expect to roll it out in our five largest properties by 2016, with the remainder of our parks expected to be online shortly thereafter.

Several guest facing technologies that promote sharing and socialization, include mobile applications and digital imaging.

We have recently partnered with TE2 and have been testing a new mobile application at Kings' Island.

We've also recently completed an RFP process led by Carrie Boldman, our VP of Merchant Games, for digital imaging.

We believe our ability to capture images digitally, and deliver them our guests instantly, will enhance their experience, drive incremental revenue, and create active social media conversations.

We've learned a lot this past summer through both of these processes, and are now planning to roll these platforms out to our parks over the next few years.

Also high on our radar on the technology front is our continued integration of digital entertainment and our existing asset base.

Current R&D efforts are focused not just on ride-based attractions, but other applications which can be applied to every form of entertainment we offer.

Over the past few years we've continued to invest in our traditional ride vendor relationships, while dedicating both time and resources to working with start up ventures.

This fall we will test a virtual reality application on an existing coaster.

I repeat, this is only a test.

But it starts to give you a flavour for the opportunities that could happen over time where we would create a compelling and reprogrammable experience with less capital.

We expect to be in a position shortly to announce other projects of this nature.

In 2016 we will have our most aggressive season pass renewal program ever.

This will include incremental benefits for renewing early.

As just one example.

Our retention of what we refer to as controllership economics for Fast Lane, in other words we don't have a revenue sharing relationship, allows us to use this high value benefit for early renewals.

I should note that this controllership economics principle is also being applied to our digital imaging initiative.

Finally, we're very close to finalizing a public private partnership for an amateur sports venue which overlooks Cedar Point.

Amateur sports tourism is a rapidly growing industry, and by supporting events approximate to our parks, we benefit from incremental ticket sales to the players and their entourages.

These are just some of the opportunities our teams are currently exploring, testing, and/or implementing.

We have continued to update you on our quarterly calls regarding the progress of these initiatives, as well as new concepts we may be testing.

In conclusion, we remain confident in our ability to deliver solid financial results in 2015 and beyond.

We always believe it's important to manage the current season with urgency, while simultaneously positioning ourselves for sustained growth.

We expect 2015 to be another record year, and we're on pace to achieve our long term target of $500 million or more in adjusted EBITDA by 2018.

With that, let's open the lines for questions.

Thank you.

(Operator Instructions).

We'll go first to Afua Ahwoi of Goldman Sachs.

Good morning.

Just a couple of questions from me.

I'm interested in your comment about the unique visitors that they are also up, as well as the season passes.

Can you give us of how that has trended over the past few years?

Has your unique visitors always been up, or is that a new development?

And then I was also curious on your cost.

It looks like that sort of came in a little higher than we were expecting.

Is that a pull-forward of any sort of expenses, or is there any labor inflation with minimum wage, or anything we should think about?

And then for the balance of the year, should we look for costs to be higher than historical run rate?

Thank you.

Great.

Good morning.

This is Matt.

I'm take the unique visitors question, and then I'll let Brian give you the response to your cost question, if that's okay.

Yes, we do track sytemically, or systematically I should say, unique visitors, and that's a program we put in place over the last I would say two to three years, and with one exception in the early part of the first year we started tracking it, we have seen consistent growth in that.

We think about it like a retailer would think about it as foot traffic.

It's important to not only to be up in attendance, but it's also important to be up in unique visitors.

What the original concern was, and why we launched this program about three years ago, was because of the season pass growth, and if you are not careful it can shadow the loss of unique visitors.

We feel good about that.

We grew not only the season pass, but we grew in unique individuals so far this year as well.

Brian.

Yes, Afua on the cost front, there is definitely some timing delta in there, as often there is when we're talking about interim periods.

A portion of the increase in second quarter is also attributable to the increase in the unit price, and the impact it's had on reported equity-based comp.

As we said in the prepared remarks, labor and maintenance costs are up, as we focused on some initiatives around our employees and the park infrastructures.

I would also add that on the labor front, we have expanded our operating hours at several parks, as we look for finding ways to extend our guest average length of stay, as well as to entice incremental visitation out of our season pass base.

So those things are all playing into higher labor costs to this point year-to-date.

I would expect by the end of the year though, as we saw last year, that 3% to 4% lift in operating costs is not out of line with what we would expect to see for the full year.

Anything further, caller?

No, thank you.

Thank you, Afua.

Up next from Credit Suisse we'll go to Joel Simkins.

Good morning guys, a couple of quick questions here.

And Matt, you called out in some of the comments on Great America and your overall sport event asset.

I don't want to steal too much thunder from next week, but with that kind of commentary around Great America, how should we be thinking about capital of this asset?

Is this a property you think you can direct some capital and really accelerate some of that growth?

It's a great question, Joel.

I think and I probably won't give you a whole lot more insight next week, but at the same time the rezoning effort which we're going through with the city of Santa Clara is fundamental to our ability to grow that property.

We feel very confident about that.

We're in the middle of that process, and would expect it to be resolved either later this year or early part of next year, but it's a very unique as you probably know, it's a very unique marketplace up there these days, and the ability to grow that park will be important to us.

I can't tell you yet that there's a step function available to us.

Like we've seen at Carowinds, but it is something that has got us increasingly curious.

Sure.

One quick follow-up.

You called out some efforts to drive some early renewal activity for pass holders next season.

Does that basically imply that at this point you're not quite ready to commit to an auto renewal product?

I'm very proud of what the team has done with our season pass program, and particularly the understanding have we have of who our Cedar Fair customer is.

At this point in time, that is not a step that we are going to take.

I can't tell you that it wouldn't be a step that we would take in the future, but we think there's alternative programs right now that we would prioritize higher.

Thank you.

Your next from James Hardeman of Wedbush.

This is [Sean Wagner] on for James Hardeman.

Can you give us some help thinking about the trends specifically for the month of July, with regards to revenue or attendance or per cap?

Given the rounding, it is a little hard to tease out the August 2nd year-to-date numbers from the first half the year-to-date numbers, and July with what seems like better weather, seems like a better indicator of your momentum.

Can you give us any help on that?

The help I give you is July has been good.

In all seriousness, I was very pleased with the results we ultimately achieved for the first six months of this year.

All variables considered.

And then when you look at July, obviously if these first couple weeks of July have been very favorable for us, and you see that reflected in the difference between, I guess it was the constant currency number of about 7% revenue growth year-to-date, which was a 6% revenue growth I believe Brian at the end of the second quarter.

Correct.

So that one percentage point at this part of the year is a pretty good gain for a couple of weeks.

All right.

Thanks a lot.

Sure.

From Wells Fargo Security, we'll go to Tim Conder.

Good morning.

This is Karen calling in for Tim Conder.

Just a couple of questions.

First, I was wondering if you wondering, do you mind just reminding us what the season pass penetration as a percentage of total attendance was in 2014, and it sounds like year-to-date it's up, the mix has improved about 200 basis points.

Was that correct in what I heard?

Yes, Karen, this is Brian.

For 2014, we had said we were little north of 40% for the full year, as far as our mix of season pass to total attendance.

Where we're at the end of Q2 is trending a couple hundred basis points ahead of where we were at that same time last year.

We'll see how that develops over the balance of the year.

It's always hard to take a mid-year metric like that and extrapolate it out over the full year.

But we're very encouraged not only by the record number of passes we've sold in 2015, but also the average visitation.

Much of our CRM efforts led by our team in Charlotte has been around, not only selling more passes, but also getting our passholders to activate earlier, and visit more often.

And that has definitely been proving to be the case, as we saw average visitation up not only last year for the full year, but we've seen that continue to grow through the first half of 2015.

Okay, great.

And then also wondering if you can comment a little bit to whether throughout the quarter and through August 2, it seems like everything was generally fair over at the Midwest.

But as I recall it in the second quarter or third quarter, you had some pretty easy comparisons last year, so I just wanted to see where this year has trended so far compared to last year?

I think I would go back to our standard commentary which says, look, at any one point in time or any snapshot in time the weather can vary from year-to-year, but over the course of the year we expect it to be normalized, and I think that impact is probably our position as we sit here today.

Okay.

Great, thanks for taking our questions.

Thank you, Karen.

(Operator Instructions).

We'll go next to Scott Hamann of KeyBanc Capital Markets.

Thanks, good morning.

Two questions from me.

In terms of, one of the interesting things was the season passing up ,and spending not being adversely impacted.

Can you talk about, is that a function of spending patterns changing among your season pass people?

Or is it the balance of the attendance?

And then secondly, just in terms of the promotional spending that you highlighted in the release around specific events, is it a different approach you're taking, in terms of some of the CRM efforts or the marketing stuff to get people into the parks?

And just maybe a little color around what specifically you're doing there, what specifically you are doing there, and how we should think about that going forward?

Thanks.

Sure, Scott.

It's Brian.

As far as season pass visitation is concerned, and what we've seen in per caps, as we said on the call we're extremely pleased with our ability to drive higher per caps while the mix of visitation has shifted towards season pass holders over single day visitors through the year-to-date numbers.

We're seeing it, typically what we would say, and I think others in the space would talk to is that season pass, higher season pass visitation can definitely put pressure on your admissions per cap.

We would fully acknowledge that, and if we look park-by-park we're probably seeing that a little bit, where visitation is up more meaningfully than on season pass holders than at other parks.

But what we've been able to do with I think enhancing the in-park products, adding to the offerings that each one of our parks has, is drive better spend, not only from single day visitors but also the season pass visitors.

So big reason why F&B is up, is in part the season pass dining program, which appeals specifically to season pass holders.

We have a similar program around in-park beverage purchases.

So there's a lot of things initiatives that we've put in place to specifically go and activate spend from the season pass holders, that I think is definitely, those initiatives are intentional, and they're resulting in lift in season pass spending year-to-date.

Go ahead, Matt.

What I might add to that, Scott, is things like the addition of the executive chefs at each of the parks, who now have created programs, and candidly we have learned a lot off of Knott's Berry Farm, where they had very successful seasonal programs.

So Bands Brew and BBQ brings incremental attendance, but it also gives the season pass holders an urgent reason to come back, and it obviously provides an incremental spending opportunity, so I would say it's as combination of all of that, but we've been particularly pleased, because we can now track season pass spending separately in each of our parks.

But the spending level from our season pass holders not only for the new customers but the season pass holders has improved year-over-year, and I think it's a combination of those things.

It's great for our business in not only a per cap, but it also give us the season passholder another reason to visit our parks, and the more they visit our park the more likely they are to renew.

Matt alluded to there in his comments, Scott, I think the answer to your second question around the promotional spend.

The events that Matt was just highlighting, a lot of those are incremental in the last year or two, and our focus on enhancing those events, whether it be Brew and BBQ, whether it be Beach Blast at Cedar Point, those are all taking, we're taking an increased focus on driving market awareness of those events, because we see that as a way to drive urgency in what might otherwise be a normal summer, right?

The reason to come in May doesn't differentiate from June or July necessarily from the rides perspective, but the events and the promoting of those events makes coming in May, or coming this weekend in July versus last weekend in July, that much more urgent.

And so that's a big focus for us, and will remain a big focus for us.

And finally, Scott, I would close with saying we have a long-term objective with not being just a place where you ride rides, where it's a place your come to have fun, and quite honestly on many of these events, the activity is not necessarily about the coaster, but it's about the social side of the our parks, and we feel pretty strongly that will help us expand our audience over time.

And is there anything further, caller?

No, I'm set.

Thanks, Scott.

Up next from FBR Capital Markets, we go to Barton Crockett.

Thanks for taking the question.

A couple of things I was curious about.

First is just on the calendar.

I mean this lay Labor Day is on September 7th.

Last year it was on September 1st.

What does that mean in your kind of view of history for the third quarter?

Does it mean anything for the fourth quarter?

Yes, Barton, the calendar definitely is in our favor this week.

Labor Day is as late as it can be, and because of that for the parks, we have five parks in the system that stay in daily operations through Labor Day.

A number of our parks will go to weekends only mid-August because of school calendars, but for those parks that are in daily operations, we pick up an incremental 45 operating days essentially in the third quarter, that we don't trade back.

So that's very advantageous for us.

I will say that similar to, like, when we see Halloween fall on a more, like we saw last year fall upon a very favorable day in the week, and we pick up operating days because of that, it's not necessarily all going to be wholly incremental visitation.

There's a component of it that will be incremental, but there will be a little bit of a shift or migration from when customers will visit.

So we're pleased the calendar works in our favor.

But we just have to temper our expectations that it's not going to be 100% incremental.

Okay.

And then on the CapEx, I mean you've had an elevated CapEx profile this year.

You've outlined a bunch of really interesting things that you will be investing in going forward.

Our view has been that CapEx will trend back towards normalized levels next year and beyond.

Should we still be thinking that?

Do your investments, maybe should prompt to us rethink that a bit?

Yes, Barton, as we have and said as it relates to capital, the level of spend in 2014 and 2015 were definitely impacted or driven by a couple of things.

One, most notably the infrastructure projects and the major renovation of the Hotel Breakers here at Cedar Point probably being the most obvious of that, but also the incremental investments and accelerated investment in Carowinds, as we look to activate that market.

So when we normalize for that going forward, we would expect we would see capital pare back to that 130 to 135 range.

However we're not going to limit our investment spending to that level if we see compelling opportunities to drive EBITDA growth beyond the long-term base case.

One of the earlier questions around Great America and Matt's commentary to the extent that we can aggregate growth at a park like Great America, or to continue to invest in a park like Carowinds, where we see meaningful upside, that number, 130, 135 base or level of investment, we may revisit that if compelling returns are available to us.

Yes, the other exception I would say is, I talked briefly about Fast Lane.

The fact that we don't have to share revenue on Fast Lane, allows us to use that asset strategically.

For digital imaging, it was a lease versus buy analysis, and a revenue sharing analysis, and we don't want to share revenue on that either, so there will be some capital, not big dollars but capital associated with something like that, where I think in the past, we might have inhibited ourselves from getting into a better position, simply because of the strict limit on capital.

We're not talking a huge number there, but it's another example where I think we're thinking about it smarter.

Okay.

And then just final thing to kind of bring it home on the distribution.

As you kind of move towards a more normalized CapEx environment, how does that affect your thinking about your distribution?

I mean you've been paying us a good distribution in a high CapEx environment.

Do you feel more constructively about your ability to grow that as we normalize, or how should we be thinking about that?

It is for management, and it is for the Board, the distribution is a priority.

And I would not encourage necessarily a large step function involved here, but we feel that we can continue to aggressively grow the distribution, particularly as we see the results from the most recent capital investments in places like Carowinds and Knott's.

Okay.

That's great.

Thank you.

Thank you.

(Operator Instructions).

We'll go to Ray Cheeseman of Anfield Capital.

Brian, I just want to make sure I understand properly the full of the business this year.

I see that revenues grew 5% and you grew EBITDA 6% for the six months, but then it slowed down in the second quarter a little under 4% revenue growth, again just a little over 2% EBITDA growth.

It just unfair for me to look at interim periods, and I need to look at a full season, and your comments to the first questioner were that expenses should kind of even out by the end of the year, so your positive operating leverage should return in a more meaningful fashion?

YesYou hit on that exactly right.

The interim periods often can have some timing nuances with them that make flow-through a little odd.

I mean our focus is definitely where we're at the end of the first six months of the year.

And the 5% revenue lift and 6% EBITDA lift, we're very encouraged by, and as Matt said as we look at the results that we have produced in July, those trends have only improved at the top line.

So we'll continue to manage off of more of a year-to-date, and in the interim periods there are some timing differences that make those flow-throughs sometimes look a little wanky.

And more broadly, Ray, one of the things that I try to do, Canada is doing well, but if I step back and look at just the domestic parks, and Brian touched on these number, we grew attendance by more than 3% in the through August 2, and we grew in-park spending by more than 3%, and that's very solid I think for evidence for our domestic business, and helps to isolate that foreign currency impact.

Good luck with the foreign currency impact.

Yes, how about that, huh?

Thanks very much.

Thank you, Ray.

It appears there are no more further inquiries at this time.

I would like to turn the conference back over to our presenters for any additional or closing remarks.

Thank you everyone for your questions this morning, and most importantly, for your ongoing interest in Cedar Fair.

In closing, we have a strong plan in place, and as you can see, we're executing the plan.

We have a portfolio of high quality assets, and guest facing initiatives are continuing to gain traction.

The foundation for our future success remains providing a great experience at a strong value for our guests, and as long as we remain committed to this principle, we'll continue to create loyalty for our guests and value for our investors.

Stacey.

Thank you everyone for joining us on the call today.

If you have any follow-up questions, please feel free to contact our Investor Relations department at 419-627-2233.

We look forward to talking with you again in about three months to discuss our third quarter results.

Thank you, and again that does conclude today's conference.

Again we thank you all for joining.