Six Flags Entertainment Corp (FUN) 2018 Q1 法說會逐字稿

Good day, everyone, and welcome to the Cedar Fair First Quarter 2018 Earnings Conference Call.

Today's call is being recorded.

And at this time, I'd like to turn the conference over to Stacy Frole.

Please go ahead.

Thank you, Vicki.

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 2018 first 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 officers at (419) 627-2233.

On the call this morning are Richard Zimmerman, our President and Chief Executive Officer; and Brian Witherow, our Executive Vice President and Chief Financial Officer.

Before we begin, I need to remind 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.

For a more detailed discussion of these risks, you can refer to filings made by the company with the SEC.

In compliance with the SEC's 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 will turn the call over to Richard Zimmerman.

Richard?

Thanks, Stacy, and thank you all for joining us this morning.

As you would expect, our main focus during the first quarter is to prepare our seasonal parks for opening.

Knott's Berry Farm, our year-round park in Southern California, is our only park with meaningful first quarter operations.

As such, we will keep our prepared remarks brief this morning because our first quarter operations represent less than 5% of our expected full-year net revenues.

We would caution that our results in the first quarter are not indicative of performance for the remainder of 2018, but we have seen some positive trends that we'd like to comment on.

I'll let Brian speak to the specific numbers in a moment, but the key message for today is that early-season results and sales trends in advanced purchase commitments continue to support our optimistic outlook for 2018.

With a strong finish in 2017 and a fast start in the current year, we believe we are well positioned to deliver another outstanding year in 2018.

We remain confident in our business model and our ability to maintain the growth trajectory we have produced for the past several years, which supports our commitment to a steady 4% increase in our annual distribution rate going forward.

At this time of year, we are always cautious about reading too much into early-season returns.

Yet, stepping back and looking at what we expect to be the primary drivers of our top line performance for 2018, we would like to highlight 3 areas of focus: first, the appeal of new attractions that expand our audience, enhance repeatability and improve value perceptions.

Steel Vengeance, a record-breaking hyper-hybrid rollercoaster at Cedar Point, and HangTime, the West Coast's first dive coaster at Knott's Berry Farm, are expected to be significant contributors in 2018.

Both parks will also have a second year of benefits from the major water park expansions we introduced last year, investments that proved very successful in 2017 and should continue to be attendance drivers in 2018 and beyond.

Second, the product and experiences we offer to encourage advanced sales and incremental spending.

Consumers continue to prioritize experiences over possessions, and our parks provide a platform where we can offer immersive entertainment at a scale not easily replicated by other regional entertainment operators.

This includes our new rides and attractions; our culinary live entertainment offerings; and our multiweek special events, such as Knott's Annual Boysenberry Festival, Halloween Haunt, and WinterFest, all of which provide a better and more differentiating guest experience.

Third, the effectiveness of our marketing and sales programs allow us to speak to our guests with messages that break through the noise and create an emotional connection that drives action.

Our brand positioning work has become a rallying point for developing attractions and programming that are true to the unique history and local market taste of each of our parks.

And with this, our marketing efforts have become more strategic and analytical.

We now have the historical data to analyze and determine the best audience for specific marketing campaigns that embrace the unique aspects of each of our parks.

In a few minutes, I will provide additional color on our 2018 plans and an update on some of our longer-term initiatives.

But first, I want to turn the call over to Brian to discuss the quarter's results in more detail.

Brian?

Thanks, Richard.

As Richard briefly touched on earlier, our first quarter represents less than 5% of our full year net revenues.

Even so, we are very pleased that net revenues for the 3 months ended March 25, 2018, were up $6 million, or 13%, to $55 million.

Given the seasonal nature of our business, the majority of our revenues are realized during a 130- to 140-day time frame beginning in our second quarter.

Most of our revenues concentrated in the peak vacation months of July and August, and in recent years, that has been supplemented with the growing amount of fourth quarter revenue stemming from our popular events and activities surrounding the Halloween season and, more recently, with our WinterFest celebrations.

Our revenue increase for the quarter was primarily driven by the outstanding early-season performance of Knott's Berry Farm, our only park with meaningful first quarter operations.

Knott's is a leader in the regional amusement park industry when it comes to immersive multiweek events.

It delivers unique experiences that embrace the park's history and features the culinary expertise of its executive chef and overall food and beverage team.

During the first quarter this year, this included their inaugural PEANUTS Celebration and a portion of their Annual Boysenberry Festival.

The excitement surrounding these events as well as the other investments we've made and continue making at the park has not only led to strong sales in the first quarter but has also led to strong year-over-year increases in season pass sales in both the number of units sold and price per unit.

The strength of our advanced purchase commitments combined with this month's debut of HangTime, a world-class rollercoaster, is setting Knott's up nicely for future success in a highly competitive market.

The first quarter success at Knott's was slightly offset by a small decrease in out-of-park revenues compared with the prior year period.

This is primarily due to the proceeds we received during the first quarter of last year from a business interruption claim at Cedar Point.

Operating costs and expenses in the first quarter were up $6 million or 5% to $124 million, which is in line with our expectations.

They include normal off-season operating maintenance and administrative expenses at our seasonal amusement and water parks and daily operations at Knott's Berry Farm and Castaway Bay.

The year-over-year increase in costs and expenses is a result of the higher attendance and guest spending during the period, higher labor costs due to market and minimum wage rate increases, as anticipated, and higher operating expenses attributable to the disassembling of the inaugural WinterFest holiday events at 3 parks.

Looking at longer lead indicators for a moment, our advanced purchase commitments, including season pass sales, group event bookings, hotel reservations and the sale of all-season products, such as all-season dining and all-season beverage, are up when compared with the same period last year.

This positive momentum is reflected in our deferred revenues, which were up $8 million or 7%, to $125 million, when compared with the first quarter of 2017.

All-in-all, we're pleased with our strong start to the year and the nice increase in early-season advanced purchase commitments.

These positive trends put us on pace to deliver yet another outstanding year for Cedar Fair and to generate a significant amount of free cash flow in 2018.

Our focus has been and always will be on optimizing the use of free cash flow to maximize unitholder value in both the short and long term.

This includes making strategic long-term investments at our parks and continuing to grow our distribution, which currently has an attractive tax advantage distribution yield of approximately 5.3%.

Finally, before I turn the call back over to Richard, I want to highlight for this group that our fiscal quarters typically end on the last Sunday of the month, as was the case with this past quarter and will be the case for the fiscal second quarter, which ends June 24.

However, in 2018, our fiscal third quarter will end on Sunday, September 23.

This will ensure that our interim results are comparable year-over-year with 13 weeks in the fiscal third quarter for both 2018 and 2017.

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

Thanks, Brian.

This is always an exciting time of year for us, as we now have 7 parks in full operation, with 2 more opening this weekend, including Cedar Point for its 149th season.

Our commitment to investing in high-quality and immersive experience at our parks is a key differentiator for Cedar Fair.

We believe everything we should -- we do should be unique by scale and unique by offer.

We invest a little more to build record-breaking rollercoasters that offer a highly repeatable experience because the track is a little longer, allowing for smoother transitions between the ride elements.

We run a 3-train operation, which expands ride capacity and provides flexibility for maintenance without disrupting the guest experience.

We invest in the areas around our new rides to provide new experiences for our guests through enhanced culinary, retail and immersive entertainment offerings.

And we are investing in overnight resort accommodations to enhance the guest experience and extend length of stay.

All of these investments elevate the overall guest experience, encourage repeat visitation and provide us with greater pricing power.

It also allows us to more aggressively market to incremental audiences outside the traditional geographic market range.

This year, we have an aggressive capital program with 4 new rollercoasters, refreshed and expanded children's areas, new and upgraded restaurants and catering facilities and expanded resort facilities with waterfront hotel rooms and luxury RV sites.

Many of our investments have already debuted to media and guests, with exceptional responses from both giving us great confidence in the consumer demand for our products.

In 2018, we are once again expanding our immersive multi-week special events.

This includes the expansion of WinterFest, our winter holiday celebration, to Kings Dominion, our park in Richmond; the introduction of a PEANUTs Celebration at Knott's Berry Farm in Kings Island; and continued investment into an expansion of our popular Halloween Haunt events across all of our properties.

Our ability to provide very distinct Seasons of FUN throughout the year, capturing each parks' unique regional brand, is allowing us to be more engaged with our customer base throughout the year.

In turn, this improves the overall price-value proposition of our parks with all audiences and drives incremental advanced purchase commitments, including season pass sales, all-season products and group business.

We believe these special events are another differentiator for Cedar Fair.

These built-to-scale events create urgency to visit our parks multiple times throughout the year and drive increased guest spending through unique culinary experiences that feature the creativity of our executive chefs.

Because of our growth over the past 5 years -- because of this, our growth over the past 5 years has been balanced between improved attendance and guest spending levels.

And we fully expect this balanced growth to continue over the long term.

New state-of-the-art catering facilities are just one more way we are enhancing the guest experience and marketing more aggressively to our group clients, including corporations, youth groups and families.

Our catering facilities are no longer picnic tables under roofs, but rather indoor and outdoor high-end dining areas with modern kitchen facilities, free Wi-Fi and self-service refreshment centers.

The addition of executive chefs at all of our parks also allows us to provide customized experiences with premium food offerings.

Our long-term commitment to investing in these facilities and our team, including the high quality of our group sales associates and executive chefs, is delivering improved results.

Over the past few years, we have generated meaningful increases in active group bookings, and I'm pleased to say that in 2018, our active group bookings are again up double digits when compared to this same time last year.

As another key channel for advanced purchase commitments, we continue to believe our group sales category has strong upside potential, and we expect it to be impactful in 2018 and beyond.

As you can tell from our comments today, we are focused on the execution of our initiatives and delivering another outstanding year in 2018.

We also continue to have ongoing discussions with our Board of Directors regarding long-term growth opportunities for Cedar Fair.

We are excited about our future and intend to provide an update on our long-term strategic plan in late 2018 or in early 2019, once we're through the core of the 2018 season.

We will provide additional details, including timing for an event, over the course of the next few months.

Before I open up the call for questions, it's important for our investors to understand how Cedar Fair continues to build on its reputation as the place to be for fun.

Our culture puts the customer first so that each and every guest passing through our gates will want to return another day.

Meeting that challenge requires a commitment from our people, a dedication like no other.

Therefore, we set the bar high and ask our employees to respond and, indeed, they do.

We shine because of their dedication from our associates on the front lines to all those supporting them throughout the organization.

For any associates who may be listening, I want to say thank you.

But when all is said and done, providing a best day experience for our guests is not only rewarding for all of us, it also generates rewards for our investors.

That concludes our prepared remarks.

At this time, we would like to open the call up to your questions.

(Operator Instructions) And we will take our first question of day from Brett Andress with KeyBanc Capital Markets.

Going back to your past comments, early-season sales for the advanced commitments were up in all categories.

I think you said deferred revenues were plus 7% and group bookings were plus double digits.

But can you provide some more insight into what kind of the blended price increases you're seeing in some of those buckets?

I mean, if I recall, it was pretty strong coming out of the last quarter?

Yes, Brett, it's Brian.

What we said on -- in the prepared remarks is that for a park like Knott's, we specifically mentioned that we're seeing both unit and price increase around season pass.

Early on, with only one park meaningful operations, that being Knott's Berry Farm, we're not going to get into specifics, I will tell you going into '18, our approach to pricing both in the season pass channel as well as the other ticketing channels is going to be very similar to where we've been in the last couple of years.

And what we -- what you've heard us say in the past is, I think the last few years, we've been able to push those mid-single-digit increases and average season pass price, and then the admissions per cap on all other ticket types is sort of averaged in that 3% to 4%.

So depending on where the growth comes from this year, clearly we're more confident in pricing behind a big new capital.

So parks like Cedar Point, Knott's Berry Farm, Kings Dominion, to name a few, that have big coasters.

We're a little bit more confident leaning in on pricing at those parks.

And so that will play into the overall number in the end, but I would say our approach to 2018 from our pricing is very similar to what we've been in the last couple of years.

And, Brett, it's Richard.

I'll just add on to that.

As we look at, as I said in my prepared remarks, the guest experience, we truly believe the quality of our guest experience continues to improve the price-value proposition and gives us pricing power.

It does vary by market, as Brian said.

But we feel pretty good about what we're seeing.

Got it.

Got it.

And I think Stacy would probably yell at me if I don't allude to the fact that I did ride Steel Vengeance, I thought it was great, probably one of the best coasters you guys have had in a while.

And I guess, what I'm getting at is, now that you've seen some of the buzz around that, can you share anymore insight into how maybe that alters your thinking around Cedar Point this year in terms of your expectations for growth for that park?

And I'm really kind of going back to the previous question.

I mean, are there any park-specific anecdotes around booking to pass sales or price, I think, that you alluded to that Vengeance is driving in that park?

Brett, Cedar Point is just a fabulous park, and Jason McClure and his team did a great job.

I did hear that you enjoyed Steel Vengeance.

And I have to tell you, when I rode it, I instantly put it in my top 3. I think it's a tremendous coaster and I can't wait to see all the guests riding on it every day.

But one of the great things about Cedar Point is not just the park but the hotels, the resort accommodations, the sports complex nearby.

There is a deeper share of wallet when we talk about Cedar Point.

And there is lots of different ways for us to extend both length of stay and increase guest spending.

So Cedar Point having a strong year, certainly, helps Cedar Fair overall.

And we're very excited about what we see for 2018.

Got it.

And then just last one for, I guess, modeling purposes, is there any way you can quantify attendance and quantify per caps, just so we have it right on a go-forward basis in the quarter?

Yes, Brett, we're not going to give out specific attendance, and typically don't for Q1 just because it's such a small portion of the overall year at 5% and, basically, it's entirely -- for competitive reasons, we'll be giving out Knott's results.

So you'll be able to get it -- back into it, essentially, I think when we have second quarter numbers out there, but we're not going to give that detail this time.

And next is Steve Wieczynski with Stifel.

This is actually Brad in for Steve.

First question I have for you guys is just more of a big-picture sort of industry question.

Some of your peers out there in the regional space have talked a little bit more constructively, of late, about some M&A opportunities that they see out there in the hard-ride parks, just curious your perspective on that, if you've seen any increase in stuff that's been shopped and/or actively marketed?

Or if M&A is something that's on your radar at this point?

Brad, thanks for the question.

What I would say is what we've always said publicly, that if something comes on the market, we'll certainly take a look and be interested.

Our focus right now is on producing the best results we can in 2018, where we think we're shaped up.

Certainly, we'll pay attention to all that stuff and, as I said, would be interested if something came on the market.

Okay.

That's great.

And then secondarily, just on the out-of-park development side, kind of a 2-part question here, first of all, more of a technical question on the Carowinds hotel, just curious is that going to be on balance sheet?

Or is there a third-party partner involved there?

And then, updated thoughts around the California Great America project.

We haven't really heard a ton there since Matt left, so just curious kind of thoughts there?

Thanks, Brad.

First on Carowinds, we just broke ground on our SpringHill Suites down there.

And we're excited about that project, which should come online in late 2019.

We are going to own that, and we are going to operate that.

So that will be our operation, so that's the Carowinds question.

As it relates to Great America, we continue to push along with our master plan for redeveloping that property, Brad.

We're very pleased with the -- about a year ago to have gotten the rezoning that gave us a little bit more runway to plan out farther than just a singular year.

So a lot of the effort that you see in the investments that we made in 2018 are really about getting that park ready for future expansion.

So a lot of infrastructure, enhancements around F&B.

There is a new coaster going in for 2018, which we're excited about.

And expect a good reaction from the market.

So we are pushing forward with that.

I think you're going to expect to hear more as a multiyear plan continues to develop, and we continue to lean into that market.

One additional thing to that, Brad, as we look at the build-out of Great America and Northern California, we look back at the success we've had at Carowinds.

And we've said this before.

We got -- took a lot of learnings from the build-out of Carowinds, and we're embedding those lessons that we've learned into our approach at Great America.

And next is Tim Conder with Wells Fargo.

This is Karen calling in for Tim Conder.

I'm going to take a stab at this and see if you could perhaps provide us with any color or commentary on trends through April?

I believe first quarter of last year you guys have provided that just because there was a shift in Easter and there was another meaningful shift this year.

So I just want to see if you could maybe comment as to what those like-for-like trends through April could be?

Yes.

Karen, it's Brian.

You're correct.

Last year, the timing of the calendar definitely impacted first quarter results.

And because of that lack of comparability, we did provide a little bit more color.

I would tell you this year, first quarter '18 is comparable to first quarter '17.

And so that same comparability issue doesn't present itself.

The Easter shift and related spring break timings really play out more so during the month of April.

And so there was a lot of comparability issues in the month of April.

We're not going to give out specific attendance or per capita numbers through April.

I can tell you from a high-level color perspective that the trends that we saw in Q1 around advanced purchase commitments, season pass sales, group bookings, et cetera, those continued into April, and we're very pleased with where we sit at this point in time going into the core of the season.

But again, like we said on the call, important to keep in mind, it's still just a very small sample size of the full year.

So it's important that we maintain and build off this momentum and not rest on it.

Okay.

Perfect.

Second question is just around kind of season pass dining and beverage packages.

You had commented in the past that in the second, third or fourth year and so forth, those programs tend to gain a little bit better traction.

So I wanted to see if you can comment as to how those are trending so far, so early, but any read on the 7% deferred revenues, on kind of how those programs are trending?

Yes.

Karen, this is Richard.

We're really pleased with what we are seeing this year.

We're seeing increased penetration levels across all our sites.

So we continue to see, as we thought we would, increased interest and, in particular, what we see that we really like is those season pass holders who've purchased all-season dining and the beverage package tend to renew at a higher rate.

So it really reinforces one of the reasons we continue to drive our average visitation, which we think is a key indicator for renewals.

So the other thing -- go ahead.

Oh, no, I'm sorry, continue.

That's fine, Karen, next.

And then last question, I suppose, is just a quick stab to see if you could provide or quantify the costs related to WinterFest in the first quarter that was called out this quarter?

Yes, Karen, it's interesting, if this would have been the second or third quarter, I would tell you, we probably wouldn't even have called it out because it would have been fairly immaterial.

But given it is Q1 and it's a very small quarter with a natural EBITDA loss, we thought it was important to at least give mention to it.

It's the -- overall, it's between $1 million and $2 million, the takedown costs associated with disassembling those attractions and decorations.

And so not a meaningful number in the grand scheme of things for the full year, but definitely a little bit more impactful when you are looking at the Q1 results by themselves.

And we'll go to Barton Crockett with B. Riley FBR.

I guess, on the costs, you guys had also called out minimum wage, and I was just kind of curious what that meant for the quarter?

And how you see minimum wage impacting the balance of the year?

Barton, we do see increased labor pressure, wage pressure.

Labor is about 40% of our overall operating expense.

But as we look backwards, the kind of pressure we're seeing now is what we planned for.

And I will tell you, it's similar to what we saw in 2017.

Okay.

I mean, is that single-digit millions over the year that you think for minimum wage?

Or can you give us a sense of how much the wage pressure should look like for the year?

Yes, Barton, this is Brian.

I mean, when you look back on the impact that the labor rates had on seasonal labor in 2016 and '17, while our overall costs might have been trending up in that -- around that 3.5% to 4.5% range, labor was probably another couple 100 basis points ahead of that, sort of in that 5% to 6% range.

I think, right now, going into the year, based on what we know, I would say that you could expect, as Richard said, something similar to what we saw last year in terms of the pressure, and that's the combination both of the mandated minimum wage increases and markets like the 2 California parks or Toronto as well as more of the market adjustments that we need to make in other markets because of availability of workforce.

Barton, one more thing on the labor pressures.

One of the things we've seen historically, and we believe we are seeing now, is typically as wages go up for our seasonal associates, but also those in the areas around us, it really provides us a little bit more pricing power.

So over the longer term, as we look back at it, I think it does reinforce our belief that we continue to see an ability to take price.

Okay.

And then just stepping back a little bit bigger picture.

I mean, we've just gone through big tax cuts, right, federal tax cuts, and you guys are a business that would seem to be something that people might spend more on if they have more money in their pocket.

Do we have any sense that, that's happening that this is stimulating more spending from what you can see from your consumer reservation or activity?

Barton, I'll reinforce Brian's earlier comment, it's really early.

We've got a lot of the year left.

The most meaningful insight I can give you in terms of your question really relates specifically to Knott's and maybe a couple of the early-season weekends at some of our seasonal parks, but as it relates to Knott's, we've got little more visibility.

We've been very pleased day by day with the results both from admissions and what we're driving in park spending at Knott's, which really is off to a really strong start.

So, I would say what we've seen has been positive.

Okay.

And then just one final thing.

Just because it is -- your description of Easter is very different than your peer, Six Flags, which reported a little bit earlier.

They were calling out a basic -- nearly a 10 percentage point impact, 1/3 of a 27% lift in attendance was tied to Easter.

You guys are saying there's really no meaningful Easter impact.

How could that be so different between the two of you.

Any thoughts about that?

Barton, when we look at the spring break calendar, that's very different state by state.

So when we look at the regions we operate, we may look at it a little bit differently.

But when we looked over the number of operating days and the operating calendars, we didn't see anything meaningful to our overall operation.

Again, I got to take you back to the fact that Knott's is such a significant contributor in the first quarter.

Brian?

I think the other thing, Barton, to call out is there may be some differences being created by the -- our fiscal quarter versus a calendar quarter-end along with the fact that if we had more parks in operation, seasonal parks with weekend-only operations, that may be a factor as well.

Knott's being open daily, we really didn't see a meaningful shift in terms of the impact, benefit or otherwise to Knott's Berry Farm based on the timing of Easter and spring break this year.

We'll now go to Chris Prykull with Goldman Sachs.

Just one on incremental margins as we head into the summer.

I know margins aren't your #1 priority, but how should we think about the flow-through to EBITDA during 2Q and 3Q if you were to achieve say mid-single-digit revenue growth?

Do you expect to see margin expansion given last year's contraction?

Or do wages or other costs mute that rebound year-over-year?

Chris, great question.

We've said that we want to be in that historical 36% to 38% margin range.

When we look at any individual year, it's -- the most telling part of where we end up is usually which parks are seeing the growth.

So what we feel good about in 2018 is with Cedar Point and Knott's, our 2 largest parks, getting really outstanding product.

We think they'll be significant contributors, and typically, when that happens, we see nice flow-through.

So, Brian?

Yes, I mean, Chris, you hit on -- I mean, there is definitely going to be some pressure with labor rates, much like we saw in '17 and '16 that puts a little bit of pressure on margin, but I think, as Richard said, the mixed performance will play a large part into where the final results come out in terms of full year margin.

Clearly, with the kind of programs we have in place and our expectations for some of our largest parks, that should benefit us and drive a better margin than what we saw in '17.

And I -- lastly, I guess I would say is don't read too much into the lack of flow-through in Q1.

We've only one park in operation, Knott's Berry Farm, the other 10 parks and the off-season costs associated with those parks tends to pull down Knott's benefit in Q1.

I would tell you just looking at Knott's by itself, the flow-through and the margin that we saw in that park, I'm not going to give specifics, but qualitatively, I'll tell you we were very pleased with the flow-through and the margin that we saw at Knott's Berry Farm in year 1 -- I'm sorry, in Q1, and expect to see the same kind of thing out of the other parks going forward.

Got it.

That's really helpful.

And then, on the PEANUTS Celebration specifically, does the success at Knott's fuel interest in expanding that event to other parks?

Which parks would be potential candidates for that?

And how do you think about the attendance as well as the expenses associated with that type of event versus, say, a WinterFest?

Is it similar?

Or is it sort of lower cost, but you still get a nice meaningful attendance bump?

Really good question.

And as I said in our prepared remarks, we're rolling that out to Kings Island this year.

Knott's really put it -- the PEANUT Celebration was held mostly during January and early February at Knott's.

And what we saw was it was a great way to kick off the year.

So when we think about PEANUTS Celebration, it's not to the level of a WinterFest, either from a capital perspective or an operating expense perspective, but really drove some nice interest early on.

So we think about it a little more broadly, as we think about our Seasons of FUN.

It seems like it feels really good as a springtime anchor at some of our events.

So we're evaluating right now where throughout the portfolio that really could resonate and have some meaningful impact.

So we'll have more of that as we start thinking about 2019, but we do really like the PEANUTS Celebration and, again, really think the -- our long-term arrangement with PEANUTS allows us to really invest behind larger-scale, more immersive events like this.

That's helpful.

And then just one last one, if I could squeeze it in, just on the hotel development front.

Can you maybe provide an update on potential hotel partnership in Canada?

And then, secondarily, how should we think about the cadence of CapEx from the hotel in Charlotte?

Yes, sure, Chris.

So as Richard said earlier on the call, the hotel in Charlotte is -- we've broken ground on and is pushing along with an initial outlook for a late-2019 opening.

So I would imagine that the cost of that project is going to probably be spread evenly between '18 and '19, maybe a little bit more heavily in '19, as we think through some of the costs.

But whether it's 50-50, 60-40 or 40-60, I should say, '18 and '19, that should be the spread on that.

The Toronto hotel continues to move along really well.

I'll be completely honest with you, I was hoping that we'd have been able to announce the flag associated with that by now.

But as we've learned, that sometimes just working through those, those legal channels and those negotiations can take a little bit longer than desired.

That hasn't slowed us down in terms of the architectural work and the other planning behind the scenes.

So we'll be hitting the ground pretty quickly on that, and I would estimate a debut that's maybe just a little bit behind Charlotte, but, hopefully, not too much.

So still feel very good about both those markets.

And then, like we did in the last call, I'd be remiss not to mention the excitement that we've got for the Sandusky market.

This weekend will be the debut of the new 158-room addition to the Breakers hotel here.

And we're very excited about that.

The early bookings at all the resort properties here at Cedar Point are very strong heading into '18, reflect -- I think reflecting the value of Steel Vengeance as well as the second-year lift we continue to see at its sports complex.

And we continue to look at Sandusky as a market where there is more opportunity to add more accommodations and more rooms into our inventory.

So we'll continue to aggressively look at that market and are excited about the other 2 markets.

(Operator Instructions) We will now go to James Hardiman with Wedbush Securities.

This is Matt on for James.

I'm wondering if you could comment on weather, if it's impacting any park openings over the past few weeks or if you expect it to coming up?

Matt, as we've always said, over the course of the year, we expect that weather will average out.

What I will say is that as we moved through April, there were some less-than-ideal conditions, but we're pleased with the long-lead indicators.

We're pleased with the reaction in the market to our new product, which seems to cut through the noise and gives -- drives some urgency to get to our seasonal parks earlier.

And it looks like we got the momentum we want to see to put in a strong 2018.

Great.

And then just wondering on SpringHill, on the suites, if you kind of quantify maybe some of the build-out costs, and ultimately kind of the benefits you expect to see from the new hotel going forward?

Yes, sure, Matt, we haven't given out a specific cost of that hotel and don't intend to at this point in time.

I think, as we think about the benefit to the park, it's really twofold, right?

Richard alluded to earlier the ability to reach out a little bit further into markets beyond what would be the traditional core market.

And at the same time, extend stay.

So, we see value both in the advanced purchase commitment and our ability to extend our core market out a little bit farther.

And then, quite honestly for that park, it's also going to provide a little bit more revenue in the -- in what we would call the off-season, when the park is not in operation.

One of the core reasons why we plugged into the Marriott's system is for the loyalty program and the Rev's system and see the SpringHill Suites brand as an ideal fit for us in that market.

And we'll now go to Michael Swartz with SunTrust.

Just wanted to ask a question in terms of some of the new attractions this year, it obviously is more skewed towards coasters.

And as I recall, last year, you had some big water-park openings.

So I'm just -- I guess the question is given the focus on coasters this year, I mean, how does that influence or maybe change the shape of foot traffic in parks this year?

Should we expect more of a 2Q benefit from some of that stuff relative to last year, which I think it was a little bit more late 2Q, early 3Q benefit from the water parks?

Michael, great question.

What I would say, we always feel large-scale attractions such as coasters driver urgency.

So when we get out there, and we see tremendous awareness and tremendous interest in all of our new attractions, including not just the coasters but our Camp Snoopy expansion in Charlotte, we tend to see reactions in the market a little bit earlier, and clearly, something like Steel Vengeance, HangTime, RailBlazer are about to debut down at Great America, that cuts through the clutter.

And we do see a little bit earlier reaction from the market, and we plan on that.

Yes, Michael, just to add to Richard's comments, I think from a modeling purpose, as we looked at how we model out the potential impact of these things, different than a water park, which without a doubt, tends to skew heavily into Q3.

And the season tends to be a lot shorter, right?

For the most part, the water park calendar is Memorial to Labor Day, the coaster attractions.

And I wouldn't shortcut the expansion of, like, a Camp Snoopy and the family attraction at Carowinds.

Those kinds of attractions can drive and push attendance throughout the course of the season.

The other thing that I'd call out is that the coasters, one of the added benefits that we get out of a coaster is the value that it can bring to in-park spend and such things as Fast Lane.

That's something that's not a real drive -- or family attractions, I guess, I should say aren't really a driver of that, but clearly the coasters are.

So we should be very well positioned when it comes to our extra charge or attraction revenue stream this year with the Fast Lane benefit that the 4 new coasters should drive.

Okay.

That's great color.

And then just 2 more quick questions.

Did you, I may have missed it, but did you quantify what season pass sales were up at the end of the quarter?

We did not provide a specific number on season pass by itself.

Embedded in the deferred revenue numbers that I spoke to being up 7% or $8 million, season pass is a big piece of that as are the season pass dining and season pass beverage programs.

And then the group business, we can't ignore the strength that we've seen in that and our sales teams at the parks are doing an outstanding job of continuing to push growth in that channel as well.

So we did not provide a specific number on season pass, though.

Okay.

Great.

And then just on the out-of-park revenue in the first quarter, I think you said last year you had a kind of one-time insurance -- was it an insurance claim benefit?

And if it's that the case, can you maybe quantify that for us?

You are right, Michael, that's what it was.

Cedar Point collected on a business-interruption claim that benefited us in the first quarter of 2017, low single digits, in the $1 million to $2 million kind of range.

Not a meaningful number in the grand scheme of things.

But clearly in Q1, it plays a little bit of a bigger role.

And that does conclude our question-and-answer session.

I'd like to turn it back to Stacy Frole for any additional or closing remarks.

Thank you all for your interest and ongoing support at Cedar Fair.

Even after decades in this industry, we still very much look forward to this time of year.

There is nothing better than walking the midways and hearing the screams from people on our coasters and seeing the smiles of our guests and our associates.

We truly enjoy what we do, and I know our guests appreciate our commitment to giving them an amazing experience.

As I hope you can tell, our strategy is working.

We have great confidence in the quality of our business model and our ability to execute on our long-term plans.

We will continue to do our best to serve our guests and, in turn, serve our unitholders.

And with that, I encourage all of you to visit our parks this summer and experience firsthand what differentiates Cedar Fair parks from other entertainment offerings, Stacy?

Thank you, everyone, for joining us on the call today.

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

We look forward to speaking with you again in about 3 months to discuss our second quarter results.

Thank you very much.

That does conclude our conference for today.

I'd like to thank everyone for your participation.

And you may now disconnect.