United Parks & Resorts Inc (PRKS) 2013 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to SeaWorld's first quarter 2013 earnings conference call. My name is Kelsey and I will be your conference operator today.

At this time all participants are in a listen-only mode. After the prepared remarks the Management from SeaWorld will conduct a question-and-answer session and then conference participants will be given instructions at that time. As a reminder, today's conference is being recorded.

And now I will turn the conference over to our host, Mr. Gene Ballesteros, the Company Treasurer and Head of Investor Relations. Please go ahead, sir.

Good afternoon, everyone, and welcome to our first quarter earnings conference call, which is being webcast. With me today are Jim Atchison, our President and Chief Executive Officer; and Jim Heaney, our Chief Financial Officer.

On this call we will review our first quarter 2013 results which we released today after the market closed. If you do not have a copy it is available on the Investor Relations portion of our website at SeaWorldEntertainment.com. Replay information for this call can also be found in the press release and will be available on our website.

Before we begin I'd first like to remind everyone that comments made during this call may contain forward-looking statements within the meaning of the federal securities laws. In addition, on the call we may also reference certain non-GAAP financial measures. More information regarding our forward-looking statements and reconciliations of non-GAAP financial measures to the most comparable GAAP measures are included in the earnings release and can also be found in our filings with the SEC.

With that, I'd like to turn the call over to Jim Atchison.

Thanks, Gene. And thank you to everyone on the call for your interest in SeaWorld Entertainment. We're excited to welcome all of you to our first earnings call as a public company, following the successful completion of our initial public offering in April.

As reported in the press release issued earlier today, net revenue for the first quarter of 2013 was $238.6 million, up 12% from the first quarter of 2012. The success of our pricing and yield management strategies drove the majority of this improvement, with total revenue per capita increasing by 10%. Attendance for the quarter was approximately 3.5 million guests, an increase of 2% over the first quarter of last year. We attribute most of the attendance increase to a shift in the timing of Easter and New Year's Eve, partially offset by the impact of our pricing and yield management strategies that reduced attendance but increased revenue and total revenue per capita. As a reminder, approximately two-thirds of our full-year attendance and revenues are typically generated in the second and third quarters of our fiscal year, and we historically incur a net loss in the first and fourth quarters due to the seasonal nature of our business.

We believe we are well-positioned for another strong year. Contributing to our expected revenue growth in 2013 will be a number of new offerings, the largest of which is Antarctica--Empire of the Penguin at SeaWorld Orlando, which opens on Friday, May 24. This new realm is SeaWorld Orlando's largest expansion never. The attraction will feature a new innovative ride component, a penguin habitat that will be home to more than 230 penguins, an underwater viewing gallery, and significant new culinary and retail offerings. The attraction also introduces a new animated SeaWorld character, a young Gentoo penguin named Puck. We're excited to share this new technology that will offer a one-of-a-kind experience for our guests. For the first time in any theme park, guests will ride in innovative trackless ride vehicle that will bring families into the penguins' world, an experience only SeaWorld can offer.

Turning to our other parks, we are pleased to report that we are on track to open our new Aquatica Park in San Diego on Saturday, June 1. As we previously reported, we acquired the water park in November of 2012 and have been making significant changes to transform and rebrand it as an Aquatica Park. Like its sister parks in Orlando and San Antonio, Aquatica San Diego will reflect the highest standard of quality in attractions, entertainment, and theming, while also featuring guests' experiences with a variety of animals. We plan to build upon our successful track record of operating companion parks near one another, allowing us to reduce overhead costs while creating revenue opportunities through multi-park tickets and other joint marketing initiatives.

I'd also like to mention that this past weekend Bush Gardens Tampa premiered Madagascar Alive--Operation Vacation, an original live musical show featuring the popular characters from the DreamWorks' Animation Madagascar franchise. SeaWorld San Diego will premiere the show at its park later in June. We are excited to introduce these characters to our guests and look forward to working with DreamWorks Animation on developing shows in more of our parks.

Turning to our education and conservation efforts, later in 2013 we will launch our third season of Sea Rescue. Sea Rescue is a top-rated Saturday morning television show on ABC that was introduced in 2012 and generated more than 27 million viewers in its first season. Sea Rescue has been the top show in its time slot in a number of major US markets since its debut. Our animal experts have helped more than 22,000 ill, injured, orphaned, and abandoned animals, with the goal of rehabilitating and returning them to the wild. And we are thrilled to have this opportunity through Sea Rescue to share some of these stories with our guests.

We are pleased with our start to 2013 and excited about the potential the rest of the year has to offer. We will continue to work towards driving meaningful revenue and adjusted EBITDA growth through 2013 and beyond, growing our globally recognized parks brands and intellectual property.

Before turning the call over to Jim I'd like to take a few minutes to thank our leadership team and all of our employees for their continued commitment to our Company, our animals, and our mission. With them we completed a successful IPO while still remaining focused on delivering interactive and educational experiences to all of our guests and driving solid revenue and adjusted EBITDA growth in the process. We're proud of our corporate identity and culture, and look forward to continuing to help our guests celebrate, connect, and care for the natural world we share.

With that I'd like to now turn the call over to Jim Heaney, our CFO, who will update you in more detail on our first quarter financial performance.

Thanks, Jim, and good afternoon, everyone.

We are pleased to report $238.6 million of revenue for the first quarter of 2013, which is an increase of $26.2 million or 12% over the first quarter of 2012. This improvement was driven by a 10% increase in total revenue per capita, from $62.15 to $68.19, and a 2% increase in attendance to 3.5 million guests. As mentioned earlier, the increase in attendance was primarily a result of a shift in the timing of Easter, offset by the impact of pricing and yield management strategies which reduced attendance but increased revenue and revenue per capita.

Admissions revenue increased by 14% from $133.3 million in 2012 to $152.4 million in 2013. Food, merchandise, and other revenues increased by 9% from $79.2 million in 2012 to $86.2 million in 2013. The cost of food, merchandise, and other revenues increased by 6% from $18.7 million in 2012 to $19.8 million in 2013. As a percent of revenue, these cost declined from 23.6% in 2012 to 23% in 2013.

Operating expenses increased by 6% from $163.4 million in 2012 to $173.3 million in 2013. This increase was driven by higher labor costs for merit and benefits expense, as well as additional labor and other costs incurred due to the impact of higher attendance and new attractions that opened after the first quarter of 2012. As a percentage of revenue these costs declined from 76.9% in 2012 to 72.6% in 2013.

SG&A expenses decreased by 6% from $42.7 million in 2012 to $40 million in 2013. This decrease was primarily a result of the timing of advertising and media, partially offset by planned increases in our corporate staff needed to support the Company's initial public offering and ongoing public company requirements. As a percent of revenue these costs declined from 20.1% in 2012 to 16.8% in 2013.

Adjusted EBITDA, a non-GAAP measure defined and reconciled in our earnings release, increased by $17.3 million, from a $6.2 million loss in 2012 to an $11.1 million profit in 2013. This improvement was driven by the increase in our revenues and positive operating leverage. For the quarter depreciation and amortization expense increased by 15% from $35.9 million in 2012 to $41.4 million in 2013. This increase is due primarily to asset additions we made after the first quarter of 2012.

Interest expense increased from $27.8 million in 2012 to $28.6 million in 2013. This increase was a result of the March 2012 refinancing, which increased the balance of our long-term debt by $500 million to fund the dividend payment to our shareholders. The impact from the increase in principal was partially offset by a 250 basis point reduction in the interest rate on our senior notes. Of the $28.6 million of interest expense in the quarter, $25.8 million was cash interest expense.

Income tax benefit in the quarter decreased by $5.8 million when compared to 2012, due to a $10.5 million reduction in our pretax loss, partially offset by a decrease in the effective tax rate from 39.8% in 2012 to 37.3% in 2013. Our effective tax rate decreased due to changes in our state taxes and other nonrecurring tax credits that benefit the current-year quarter.

Net loss for the quarter improved from a net loss of $45.1 million in 2012 to a $40.4 million net loss in 2013. Diluted earnings per share improved from a $0.55 loss in 2012 to a $0.49 loss in 2013.

We generated $24.2 million of cash flow from operations of the first quarter of 2013 compared to an $8.1 million use in the first quarter 2012. Capital expenditures were $32.3 million in the first quarter of 2013 compared to $57.1 million in 2012. The variance in capital expenditures in the quarter is timing-related, as we do not expect capital expenditures to be meaningfully different in 2013 than they were in 2012.

As part of the Company's IPO in April, the use of proceeds included redeeming $140 million of our 11% senior notes and a $37 million principal payment on our term loan B. The redemption on the senior notes included a $15.4 million redemption premium, which will be recognized as interest expense in the second quarter. The annual cash interest savings from the $177 million paydown is around $16.8 million on a go-forward basis. In addition the company made a $46.3 million payment to Blackstone to terminate our 2009 advisory fee agreement. This payment will be recognized as SG&A expense in the second quarter.

I'd also like to mention that in May we entered into Amendment Number 5 on a senior secured credit facility. The amendment refinances the existing term loan A and term loan B into new term loan B2 that extends the maturity date of our facility to 2020 and reduces the go-forward annual interest expense by approximately $12 million based on current rates. The rate on the new facility is LIBOR plus 225 with a 75 basis point floor.

This brings me to our guidance for the full year of 2013. The following estimates are based on current Management expectations. Please refer to the discussion of forward-looking statements in your earnings release and related SEC filings. For 2013 we are projecting revenue in the $1.46 billion to $1.49 billion range, and adjusted EBITDA in the $430 million to $440 million range. We plan to update these projections on our quarterly earnings calls and initiating guidance on future years in the first quarter of that year.

With that I'll turn the call back to Jim Atchison.

Thank you Jim. At this time we'll turn the call back to the operator and open up for questions.

(Operator Instructions)

Tim Conder with Wells Fargo Securities.

Gentlemen, congrats on coming out of the blocks fine here and the initial call. A couple here. Either one if you could in any way quantify the benefit to attendance in the first quarter that you saw from the shift with the New Year's Eve and Easter that you called out, and then any quantification there as to how that may pull forward a little bit on the attendance expectations from the second quarter on a year-over-year basis? And then secondly, Jim Heaney, if you could maybe quantify the nonrecurring portion of the tax benefit items?

Okay. Sure, Tim. Regarding Easter, as you know, Q1 benefited from Easter moving from April 8 last year to March 31 in 2013. Fortunately next year Easter is on April 18, which should be a plus. The Easter shift did cause movement of revenue and earnings out of Q2 into Q1. We believe Easter was more than just a shift; it was a net down, we think, for the year due to compression with spring break. We're not to go into specifics on attendance or revenue, but in regards to revenue growth, the second quarter will probably have a run rate below the year. But we expect quarters three and four to be higher than run rate and that's how we get to our guidance numbers.

And then anything, Jim, that you can give us as far as quantifying the nonrecurring portion? I know you said there were some changes in state taxes but unless those are going to change again, maybe we can leave that alone. But were there some one-time audit benefits or things like that that you mentioned in that nonrecurring tax benefit bucket?

Yes, I think the best way to model it out is model something similar to our Q1 rate for the rest of this year and then a more normal rate of 38% to 39% beginning in 2014.

[Azula] Hoi with Goldman Sachs.

Perhaps you could speak a little bit about the trade-off between the price increases and the attendance? Is there anything specific you would call out on the price increases that maybe would have deterred attendance a little bit and how are you thinking about that split in the revenue breakdown on a go-forward? And then maybe if you could give some examples. You mentioned the in-park spend benefited from some targeted price increases and increased offerings. Maybe you could give us an example of some of the things you did within the park to help that?

Sure, thanks, Azula. This is Jim Atchison. I'll address the first part of your question related to the yield management initiatives that we've been deploying. This is a strategy that we've put a considerable amount of thought and planning towards. We're pleased with the results we're seeing thus far. As you can see from the results we've announced, we are getting very strong per capita growth and strong revenue growth as well. Some of the initiatives really relate around our efforts on channel management and how our tickets are sold through the trade. And we've had a concerted effort to move more of our traffic to our own sites, our own e-commerce platform, which is about 30% of our overall admissions revenue is through that platform in 2012 for example.

We've also launched a mobile site that allows us to -- guests to buy their admissions products on smartphone and scan those products at our turnstiles to get in the park. So we have a number of initiatives around the channel management related to who's selling our tickets and their [life] saving commissions through the trade versus selling them on our own side. And then also we put a lot of sophistication around some of the specific products we are offering. We've eliminated some second day-free programs and some other type of programs that we weren't feeling -- we didn't feel were driving enough value for us and were perhaps complicating our product offering, our menu offering. We have a more streamlined, simple, straightforward pricing algorithm now and we're seeing good results from it.

And I think did [Vidal] also answer the question about within the park? Is that to do with the increased offerings that you gave within the park to also benefit the in-park spend?

Yes. Our in-park spend was up 9% and we're very pleased with that as well and that is a -- both a function of penetration of having new products, new offerings within the parks and also some work we've done around our pricing there. I'll add, too, that the more traffic we moved to our own site, be it our e-commerce platform or our mobile site where we're seeing a commensurate lift on our in-park spend as well because it's a more elegant upsell for us to offer it on our own sites and through our own vehicles. So we feel very good about that. And the 9% growth that we're seeing is again both from more penetration, more volume and also from pricing. We are pleased with that.

Moving onto Alexia Quadrani with JPMorgan.

Just a follow-up on the pricing question there. Could you give us a bit more color in terms of where the price, when we look at admissions revenue, where the price increase came from, if it was more pickup in the season past or maybe the one-time visitor gate prices. And then on that same point, the dampening effect we may see going forward from your recent acquisition of a water park in San Diego that is, I believe, at a lower price point, would it be fair to say that that's ahead of us because it wouldn't have been opened in this quarter and therefore we may see a bit of a wait or offset of pricing in the next quarter?

Yes. I'll answer your second question first. That is accurate. Although given the size of the park I don't think it's -- it will be large enough to move the needle materially on our overall forecast. So, yes, it's ahead of us but I don't think you'll notice it in our overall per cap numbers. It's just not big enough. And then in regards to the admission per cap growth in the quarter, we attack that on a lot of fronts. We eliminated discounts and a lot of free programs that we had in place in the prior year. We had a second day-free program in our Florida parks where tourists that bought a full-day admission to our parks got the second day free. We eliminated that program this year and we saw good per cap lift and I think revenue lift from that decision. We had a preschool pass program. That was another promotion that we eliminated. And then more broadly we looked at the discounting we're doing on our -- on the promotions we did run; reduced those and we eliminated some promotions altogether.

We also looked at our pass offering. We had started to introduce more blackout dates on our entry-level passes. We're doing that for two things -- two reasons. One is to control crowding on peak days at our park and then also to encourage people to upgrade to more premium passes. So we've attacked on the admissions side across a lot of fronts and we saw good results from that in the first quarter. Looking forward, I don't think you'll see quite as -- when you look at our revenue growth mix, we'll probably get a little bit more of that from admissions -- from attendance going forward and maybe a little bit less from per cap. I think we over-indexed a little bit on the per cap growth side in the first quarter, but we're very encouraged by what we saw the first quarter and -- but I think you'll see the mix change a little bit in the future quarters.

And then to follow up on the attendance trends in the quarter. Was there any notable change in terms of what you would've expected in terms of destination visitors from out of town versus the day trippers or maybe even international mix when you look at your Orlando park?

This is Jim Atchison. Our Orlando parks specifically -- we're not -- we don't detail our visitors by destination and also doing so I think in the first quarter would be a difficult number to grasp because it has such an impact of the spring break seasons and Easter seasons. So on a year-over-year basis it would be difficult to map that in a meaningful way. But what we are seeing and what we're pleased with is the response we've had from our local and nearby markets on our past products that we've offered and the pricing decisions we've made there. And then, as Jim mentioned earlier, the number of pricing decisions we've made on our more tourist-oriented products are also being received very, very well. So we're pleased with both the resident and the tourist mix that we're drawing right now.

Michael Nathan with [Samwith Numera].

I have a couple. Let me follow up. People have asked about the attendance benefit from the Easter and New Year shifts. If you listen to Disney, they talk a lot about how that week shift is actually really good for profitability and for pricing. So could you give us any sense of, aside from the pricing strategies you guys employed, how much of the benefit was from, do you think, just the timing of those holidays and can you quantify at all? Was there a -- therefore a drop-down benefit to profitability because of that?

As you know, our Company is a little bit different in that we're a mix of regional and destination parks. When you're in a tourist market and Easter shift has a certain effect and when you're in the local market it has a different effect. Again, without -- there is a lot of noise in the quarter and it's hard to isolate the impact of -- from Easter from park to park. Again, our expectation for the year is that you'll see a little bit below run rate growth in revenue and EBITDA in the second quarter and then above rate growth rate in Q3 and Q4 and that gets you to our annual guidance number.

Let me as a question on dividend policy. Given where stock has moved and how you did it and given now your public company, what is your feeling on dividend policy? Is there a stated goal that you would share with us on payout ratio or stated targets? How do you think about currently your dividend policy is going to be for the year?

Michael, this is Jim Atchison and that's a good question and obviously one we give a lot of thought to. In concert with the IPO, we had, with our Board, settled on a dividend policy of an $0.80 per share dividend. And that's a matter we intend to revisit over time. I can't say that we have any plans or prepared announcements at this point based on our early performance, but it is something we will revisit from time to time and decide what the appropriate policy is going to be moving forward. But we don't have any plans that are imminent.

(Operator Instructions)

Tim Nolan with Macquarie.

Couple things please; one should be a softball. The Antarctica opening I guess is this weekend. Any thoughts you could give us in terms of incremental demand for tickets to visit your SeaWorld Orlando park on the back of that? And then secondly you mentioned again Sea Rescue starting I think you said a third season this fall. Can you talk about any other media opportunities you may be looking at, whether it's other TV series or anything else, perhaps online or with games? I think you've spoken about that before.

Good questions, Tim. This is Jim Atchison. I'll take a stab at those. With respect to Antarctica opening, the attraction does open to the public on Friday, this coming Friday, in just a few days. We are very excited about this new realm for our flagship Orlando park. The space looks amazing. The animals look amazing. It's really such a unique, compelling, immersive environment and the ride vehicle we are using is just so compelling in its own of how it takes you through the life of this penguin and tells -- and enables us, through storytelling and special effects, tell you about this penguin, Puck, and then you exit inside our penguin habitat. It's really something just spectacular. In my many years in our Company I have probably never been more excited about an attraction opening than this one, so we feel very good about it. There's a lot of buzz going on in the media about it and as we follow closely what our guests use for planning trips and inquiries and so forth. I probably can't offer anything from a forward-looking view of demand for that particular attraction or that particular park. But I will say we're very excited and enthused about it and we expect it to be a big success. We are encouraged by that for sure.

Your second question related to Sea Rescue, I believe, and this is a show that we're delighted to have. We have had a rich history in our Company of attending to ill, orphaned and injured animals in need and it's something we've done for decades. And with over 22,000 animals we've responded to, there's just some amazing stories behind these animals and the brave men and women on our team who do the work to care for them. So when this opportunity -- when we began pursuing this opportunity we were delighted to be partnered with Litton Entertainment and with ABC to bring the show to fruition and we've been thrilled with the results thus far. And as we mentioned we will be launching our third season of it here soon and we really like what this does and our Company -- one of the things about our Company is that we have some terrific IP to share and this story really touches on so much of that, whether it's the animals or the employees or how we view this interesting work.

We are exploring other opportunities to look at other show concepts. We don't have anything we're prepared imminently to announce. But this is work that we do and we're actively engaged in our business development area of the Company looking at other show opportunities. Along with that we have really a lot of big work that we've done thus far in the world of consumer products licensing, be that Trainer Barbie or our Turtle Track app that we introduced, the game. We have more of that that we've been doing work on as well. We feel very good about how that's being received. And as we work on these initiatives we find just more and more demand for our brands and our concepts, so it's a matter of us going after the right ones. So we're very encouraged by this space, Tim, what this outside the park bit of work does for our brands and for our business overall. So we're very encouraged about it.

So fair to assume there might be more to come there, I suppose. One other follow-up, please, back to the first question. Your guidance range is really quite tight. I'm assuming you are factoring in things like some extra attendance for Antarctica, obviously new attendance for the San Diego water park. Any further comments you can give on that end? Just trying to understand how much incremental growth you expect from those new particular openings.

To be specific, our guidance does include some of the key drivers of our numbers going forward, which would be Antarctica, the opening of the new San Diego water park, and then we've also factored in the impact of the shift of Easter. We feel pretty good about our guidance. That's why we have a tighter range. But again, that's based on our current expectations and it does assume that no major weather event or some other similar type of event impacts our business. But based on what we're seeing today, that's what our guidance is.

I just want to make sure you were anticipating some extra attendance and sales because of those two parks. So that's clear.

Absolutely. Yes.

Brian Goldberg with Bank of America Merrill Lynch.

Just follow-up on Tim's question. With Antarctica, it's a big investment for you guys, a unique one. How are you approaching marketing this new investment? Are you doing anything differently with SeaWorld Orlando this year from a marketing perspective or even from -- for the adjacent parks, Discovery Cove and Aquatica?

Brian, this is Jim Atchison. That's a good question. We've really taken a clean slate on everything we do with respect to Antarctica, and that began with the design and the whole offering behind the concept of the attraction. And so everything about it is from scratch, so to speak, and we're proud and pleased with that. The marketing is no exception and we certainly have some of the traditional efforts we have behind digital advertising and print and radio and mainstream television and so forth, but we have done some things that are quite unique and different. We orchestrated a mobile tour of Antarctica that we conducted through this -- the very -- winter of this year, primarily in January and February, hitting a lot -- many of the northeastern markets, major trade shows and other things was a mobile marketing presentation of Antarctica and really telling that story. So that's one of the many things we've done. We've also done an awful lot around the social media space and how we build buzz and awareness around the new attractions. So it's been a really a very, very solid effort on behalf of our marketing team, and we've left no stone unturned in our efforts to get the word out and get communicated about this new offering. We've tried a number of new initiatives and we're pleased with the results we've seen from them.

I have a couple of housekeeping ones. With regards to your revenue guidance for the year, I know this is a detail, but does that include barter revenues? Secondly, CapEx quarterly waiting, I think you said for the full year your absolute level of CapEx would be relatively consistent with the prior year. How is the CapEx going to weigh throughout the year?

Regarding the first question, yes, our guidance numbers do -- does include barter revenue and expense. That's included. I would expect the CapEx spend pattern to be fairly heavy in the second quarter and then higher on the third quarter and then ramp down in the fourth quarter.

Jason Bazinet with Citi.

I have two questions. Regarding the -- going back to the long-term dividend policy question, because of your NOLs you have the luxury today of generating more cash flow than you would if you were a full cash taxpayer. As you and the Board contemplate your dividend payout strategy, are you thinking about that in a -- in the context of ultimately paying full cash taxes or thinking about it in the context of potentially pursuing other tax strategies like a REIT conversion which might allow you to pay out a higher portion of, if you will, your untaxed cash flow because there's other ways you can avoid taxes. That's my first question.

Okay. To answer your question, we do look at our dividend policy over the long-term pre- and post-NOLs. Based on our current expectations, the NOLs will last through around 2017. So we have some time to evaluate different tax structures. That being said, if we don't drastically change our structure and become a full taxpayer in 2017 we'll structure our dividend policy to give us plenty of headroom to maintain that policy beyond the point where we become a cash taxpayer.

Okay. And then regarding the Omnibus incentive plan, the 15 million shares that could be issued, how should investors think about that? Is that -- in other words are we likely to get any sizable incremental share issuance over the next year?

Jason, this is Jim Atchison. What I'll share is that that plan and the construct of it is emblematic of our exit out of a private equity setting where management was part of a profit interest plan in our private equity life. We had to translate that over into essentially a restricted stock plan in the new Company. The share reservation that was made is -- was at the direction of the Board and our compensation committee and I think in the fullness of time we'll evaluate the best ways to incentivize management, but obviously having the wherewithal to have management's objectives align with shareholders' is a powerful connection and motivator. So we don't have a lot of detail around that just yet, but that is a topic for our compensation committee as we now move on in a public life.

It's such a large number in the context of number of shares outstanding. What would you suggest the investment community do in terms of thinking about shares outstanding? Should we assume the lion's share of that ultimately increases your shares outstanding over the next year? Or is it a big umbrella that you'll never really approach that number? How --

I think it would be -- I understand that's a good question, Jason. It would probably be premature to give any clarity on that yet. It's really a Board -- for our Board to determine in time. And obviously I know it's a fair question but being only a month and a half or so past our IPO, it's something that I think we still need to take up as a Board to get more clarity.

Tim Conder.

Just some more of a housekeeping. Gentleman, can you give us the deferred revenue number and then in context of that remind I guess everyone how you think about season passes relative to managing the season pass which is more of a resident pass versus a multi-day pass versus your single visitor-type pass.

Tim, this is Jim Atchison. Maybe I can talk a little bit about the strategy of how we look at that and then Jim Heaney can comment on the deferred balances and so forth. We really separate our pricing strategies with respect to our -- each of our individual parks, on how we're going to attract and go after the resident market and then how were going to attract and go after a tourist market. And for the resident market our first priorities are to endeavor to sell annual pass products. And to the extent that we don't have -- that's not a right fit for somebody in a local market, we'll then look at promotional offers and other things. But it's really first and foremost targeted at annual pass products.

In our regional parks we have nearly 50% of our attendance is actually an annual pass product. In our destination markets that numbers is around 30%. So it's now shifting to the tourist marketing side. We're really -- in that respect we're really endeavoring to sell multi-day multi-park tickets and that's why an acquisition like our new Aquatica that will open up in San Diego is so important to us, because now for the tourist we can position two- and three- and five-day tickets for those two parks combined. So with respect to our annual pass [dates] what I'll say is we feel very good about the volume that we have. We're comfortable with the mix that we have and again in those regional parks being at nearly 50% or about 50% of our total attendance. So we have made some changes with respect to pricing and I'll let Jim talk a little bit about those and the results we've seen but we feel good about the volume that we've got.

Tim, the deferred revenue balance at the end of the quarter is $126.2 million. That's up about 50%, where it was at the end of the fourth quarter, but that's the normal seasonal growth you would see. If you compare it to same quarter last year, it's about flat. The reason for that, and I'm sure you're comparing it to some of the other regional park companies and the growth they saw, as Jim mentioned, our season pass mix is where we want it to be. We don't want to grow it any higher. So we're trying to manage and temper that demand through pricing. We took our annual pass prices up in Orlando and Tampa by about 24% going into the year, anticipation of Antarctica. So we feel pretty good about where our pass business is and, as far as growing deferred revenue, we don't see it changing a lot at this point. If you're looking at it as a forward indicator, if you look at the $126 million as a percentage of our revenue -- total revenue in the prior year, it was about 9%. And I think if you compare that to some of the other players in the industry, that's more or less where they are as well. But as far as business on the books we feel good about where we are. We didn't see the growth that some of the other companies did from the standpoint we already had our season pass business where we wanted it to be already.

Okay. Great. I wanted to make sure everybody understood the dynamics relative to Six Flags and Cedar Fair. Thank you.

Ladies and gentlemen, that is all the time we have for questions today. Mr. Atchison, I'll turn the conference back to you for closing or additional remarks.

Great. Thank you. We're very excited about the success of our IPO and the results of the first quarter of 2013. We believe the Company is well-positioned to grow shareholder value while continuing to deliver personal, interactive and educational experiences to our guests. And we thank you for joining us on our call today and for your interest in our Company.

Again, ladies and gentlemen, that does conclude our conference for today. We thank you all for your participation.