Six Flags Entertainment Corp (SIX) 2012 Q3 法說會逐字稿

Good morning, ladies and gentlemen, welcome to the Six Flags third-quarter 2012 earnings conference call.

My name is Fran and I'll be your operator for today's call.

(Operator Instructions)

Today's conference is being recorded.

If you have any objections, you may disconnect.

Now I'll turn the meeting over to Nancy Kresja, Senior Vice President, Investor Relations and Corporate Communications with Six Flags.

Ma'am, you may begin.

Good morning and welcome to our third-quarter call.

With me today are Jim Reid-Anderson, Chairman, President, and CEO of Six Flags, and John Duffey, our Chief Financial Officer.

We will begin a call with prepared comments and then open the call to your questions.

Our comments include forward-looking statements within the meaning of the federal securities laws.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in such statements, and the Company undertakes no obligation to update or revise these statements.

Also during the call we will share and discuss non-GAAP financial measures.

You may find the reconciliations of non-GAAP to GAAP financial measures, along with a detailed discussion of business risks, within the Company's annual report, quarterly report or other forms filed or furnished to the SEC.

At this time I'll turn the call over to Jim.

Thank you very much, Nancy, and good morning to everyone on the call.

I'm really pleased to share that in Q3 we achieved our tenth straight quarter of record financial performance.

The level of cash flow that our business generates continued to grow nicely, as we delivered $4.13 of cash EPS during the last 12 months, an increase of $0.84, or 26%.

Year to date our revenue was up $51 million, or 6%, and adjusted EBITDA was up $37 million, or 12%.

This management team has now run Six Flags for three seasons.

Over this period, we have grown guest satisfaction to all-time high and significantly improved employee morale and reduced turnover.

We have grown cash EPS from zero pre-bankruptcy to less than $1 upon emergence in early 2010 to over $4 today.

The foundation of our success has been excellent execution of our strategy, which includes delighting our guests, innovative news in every park every year, improving the efficiency of our operations, delivering on our financial goals, building a high-performance organization, and integrating safety and quality in all that we do.

As a result of our successful execution, we have grown earnings and cash flow and also set the standard for financial performance in the regional theme park industry.

This quarter our LTM modified EBITDA margin reached yet another new Company and industry high of 39.1%.

Over the last three years, we have shown that this business can generate high recurring revenues with significant and sustainable cash flow.

I am proud to say that our laser focus on becoming the best regional theme park operator in the world is literally paying dividends to shareholders.

I feel very good that we remain solidly on track to deliver our aspirational goal of $500 million of modified EBITDA, or almost $6 of cash EPS by 2015.

This growth will come from the same drivers; season pass-driven attendance growth, ticket yield management and tight cost controls.

These are the same drivers that have enabled our growth in the past few years, and it's the same strategy.

Delivering innovation or news in every park is an understated goal, and we will continue to invest 9% of revenue on capital, ensuring we bring news every park every year.

You may have noticed that much of our energy is already focused on our 2013 season.

Over the past few years, we have significantly improved our communication with guests, allowing us to tailor new attractions to specific guest feedback in each park.

I am extremely excited about the new rides and attractions that we will introduce next spring.

One of our larger initiatives is Full Throttle at Six Flags Magic Mountain, already the thrill capital of the world with more coasters than anywhere else on the planet.

Magic Mountain is introducing yet another record-breaking coaster.

It will be the world's tallest and fastest looping coaster, with speeds of more than 70 miles an hour and a record 160-foot loop, racing both inside and a first ever over the outside loop.

It truly is going to be unbelievable.

Guests at Six Flags Discovery Kingdom near San Francisco are also in for a real treat with Cirque Dream Splashtastic.

This production will feature our bottlenose dolphins, along with aerialists, acrobats and great music.

It will be a top-notch show.

Fiesta Texas is introducing the new Iron Rattler, another example of Six Flags innovation at its best; a wooden structure with steel rails.

We pioneered this innovative technology in 2011 with the Texas Giant at Six Flags Over Texas, and we're are doing it again all over in San Antonio with the Iron Rattler, which will feature four over bank turns and a completely inverted barrel roll.

Faster and taller than ever before, this coaster is going to be a beast that I can't wait to ride.

I think you know that people in the Lone Star State love to go big.

The new Texas Sky Screamer at Six Flags Over Texas will be the tallest swing ride in the world at an amazing 400 feet.

Think about that, that's twice as tall as the Statue of Liberty.

We're also excited to introduce Boomerang at Six Flags St.

Louis.

This is a fun roller coaster that pulls guests backwards to the top of a 125-foot lift hill then drops the train through loops and corkscrews and then repeats it all over again.

Near Chicago, on the heels of the phenomenal success of X Flight, a huge wing coaster, we are bringing a world-class night time show called Ignite, The Grand Finale, to Six Flags Great America next year.

This amazing laser and light production features state-of-the-art technology, fireworks, lasers, live dancers, and singers.

It will be a major production unlike anything we've ever produced at Six Flags and the perfect way to cap off a great visit.

At our Six Flags Atlanta properties we're debuting Sky Screamer, a 24-story tower swing ride, and Typhoon Twister, a giant thrill slide that shoots riders into a 67-foot bowl.

La Ronde, our park in Montréal, is adding a new multi-million dollar interactive water ride called Aquatwist, while our hurricane Harbor water parks at Six Flags, New England and Six Flags America are adding Banzai Pipeline, which features six individual waterslides and daring drop capsules that our guests simply love.

At Six Flags Great Adventure we're making massive changes by uniting the 160-acre theme park with a 350-acre Wild Safari to create the world's largest theme park and offer a one-of-a-kind attraction called Safari Off-Road Adventure.

This is really going to be an amazing experience for our guests, who can ride in rugged open-air vehicles off-road and up close to magnificent animals from six different continents.

Guests will really feel like they're on a true African safari.

Also at Great Adventure get ready for Big Wave Racer at Hurricane Harbor, another massive water slide with multiple lanes.

We're introducing the Joker, a spinning coaster in Six Flags, Mexico.

In addition, we took one of our most recognizable brands and biggest event, Fright Fest, or [Festival del Terror] in this situation, and introduced it this month for the first time ever at Six Flags Mexico.

Similarly, we'll introduce another fan favorite, Holiday in the Park, with its millions of lights and holiday spirit in December 2012.

Can you just imagine snow in Mexico City?

In conjunction with these announcement of these new attractions, we've initiated our 2013 marketing program and the initial reactions from our guests is very positive.

We're building on our award-winning Go Big Go Six Flags marketing campaign.

Our season pass penetration strategy is also extremely successful, and we will continue to implement this important initiative over the next several years.

2013 season passes went on sale at the end of August, and we're really pleased to have season pass sales trending a double-digit growth rates over prior year.

We know that over the course of a season a season-pass holder generates more revenue, more profit, and more cash for the Company than a single-day visitor, and we believe the largest contributors to our future revenue, profit and cash flow growth will come from improved ticket yield and further penetration of season-pass sales.

We also recognize that another important element of building shareholder value is an appropriate allocation of capital.

In the first nine months of 2012 the Company demonstrated its alignment with shareholders by returning nearly $200 million of free cash flow via dividends and share buybacks.

In early October, we received $70 million in cash from the sale of DCP and used the funds to repurchase 1.1 million shares.

To date, the Company has repurchased $168 million of shares in 2012, including the $70 million from the DCP proceeds, and has $82 million remaining under the currently-approved share buyback program.

Given our consistent performance over the past three seasons, and our industry-low net leverage of only 1.7 times, the Board felt it was appropriate to further increase the Company's quarterly dividend by 50% to $0.90 per share.

This represents an approximate 6% yield on the current stock price.

I believe that our consistent return of cash to shareholders, combined with a strong growth implied by achieving our aspirational target of $500 million of modified EBITDA by 2015, represents a fantastic total return opportunity for our loyal shareholders.

In summary, it has been an excellent nine months for Six Flags.

For a touch more flavor on the financials for the quarter I'm now going to hand you over to John Duffey.

John?

Thanks, Jim, and good morning to everyone on the call.

I am extremely pleased with our continued success in generating attendance, revenue, profit and cash flow gains year over year.

So let's dissect the numbers a bit.

Total revenue in the quarter increased $10 million, or 2%, as a result of a 3% increase in admissions revenue and a 1% increase in in-park revenue, offset by a 1% decline in sponsorship and accommodations revenue.

Admission revenue per capita increased slightly to $23.51, as our solid pricing gains were offset by the strong season pass attendance mix.

In-park revenue per capita decreased $0.30 in the quarter to $17.05, also due to a higher mix of season-pass guests.

Season-pass customers typically spend less per visit than single-day visitors, but as Jim mentioned earlier, they do spend more over the course of a season.

Attendance grew 3% in the quarter.

While we did not have the effect of hurricane Irene this year as we did last year, any benefit was fully offset by the calendar shift I spoke about on the second-quarter call.

We estimate that this calendar shift negatively impacted the third quarter by approximately 150,000 guests.

In addition, we saw a negative impact due to the timing of the July 4th holiday, which fell on a Wednesday.

As you can see, financial and operating comparisons in individual quarters are sensitive to weekend days, holidays and weather.

We, therefore, believe that the best way to assess underlying trends in the business is over an entire season, or on an LTM basis.

So let's move on to discuss some year to date and LTM performance.

Year-to-date revenue is up $51 million, or 6%, driven by a 6%, or a 1.3 million increase in attendance.

As Jim discussed, the relatively flat per caps are as a result of a deliberate and successful strategy to grow season-pass attendance.

We talked before about our intense focus on leveraging our cost structure.

Year to date cash operating expenses increased a modest 2.3%.

That strong performance continued in the third quarter, with cash operating expenses increasing only 1.1%, despite the cost benefit we recognize last year when several of our parks were closed for hurricane Irene.

The combination of attendance and pricing gains, as well as cost leverage, improved to modify EBITDA margin by 46-basis points and 182-basis points in the quarter and year to date respectively.

LTM-modified EBITDA margin now stands at a record 39.1%, up 230-basis points from a year ago.

The sale of our interest in DCP closed on September 28th, although the funding did not occur until October 1st.

We received $70 million from the sale and recognized a gain of $67 million in our GAAP financials.

However, please note that the gain is not included in either modified or adjusted EBITDA.

We will be able to utilize our tax net operating losses to almost fully shelter of the gain from taxes and the proceeds from the sale were used to repurchase 1.1 million shares.

In addition to the $70 million of cash proceeds already received, there is cash held in escrow related to the sale of DCP that will potentially be released sometime in the next two years.

Our maximum future cash benefit from this is $10 million.

With the sale of DCP, we will no longer recognize the EBITDA contributions from that investment.

DCP contributed in excess of $10 million of annual adjusted EBITDA for the last two years and $5.5 million in 2012 through the data of sale.

While this will negatively impact our adjusted EBITDA going forward, it will have no impact on modified EBITDA.

So as you think about quarterly impacts, we recognized $5.4 million in Q4 2011 from DCP earnings that will not recur in the fourth quarter of this year.

In 2012, we recognized $1.9 million in Q1, $3.3 million in Q2, and only $0.3 million in Q3 2012 that will not recur in 2013.

It should be noted that Q3 2012 EBITDA for DCP was $0.4 million below Q3 2011, as the Company incurred costs related to the sale process.

In the first nine months of the year, we generated $264 million of operating cash flow after capital investments, repurchased $98 million of our stock, paid $97 million in dividends, and paid down $3 million of debt related to required amortization.

Net debt as of September 30 was $674 million.

Deferred revenue at September 30 was $60 million, up $11 million, or 22% from September last year.

This increase represents the remaining revenue from the strong 2012 season-pass sales, as well as an excellent increase in 2013 season-pass sales that we saw in September.

I would also like to remind everyone that the calendar shift I mentioned in our second-quarter call is expected to reduce fourth-quarter attendance by approximately 150,000 guests.

In addition, as you plan for 2013, please keep in mind the $3 million insurance benefit for hurricane Irene we received in Q1 2012.

I'd like to briefly comment on our capital structure.

The Company is in a great position because of our industry-low leverage of 1.7 times adjusted EBITDA, and also because 85% of our debt is not due until 2018.

Our recurring revenue base and tight cost management provide a consistent and growing cash flow stream.

The strong cash generation, combined with our low financial leverage, makes me very comfortable with our decision to increase the dividend.

Finally, there has been a significant amount of press recently regarding companies changing their structure to take advantage of favorable tax rules.

With more than $1 billion of tax loss carry forwards we are in a unique position to pay a minimal amount of tax for several years going forward.

Nonetheless, we will continue to evaluate options to ensure we retain as much flexibility as possible regarding our tax structure.

So now I'd like to turn the call back over to Jim.

Thanks very much, John.

We are nearly through Frightfest, our largest event of the year, after which many of our parks close for the season.

Four of our parks will host Holiday in the Park to wrap up our calendar year.

I'm really pleased with our progress to date in 2012 and our sights are now primarily focused on delivering a successful 2013 and achieving our 2015 aspirational goal of $500 million of modified EBITDA, which equates to nearly $6 in cash EPS.

Laser focus and successful execution will ensure we continue to strive strong financial performance, fund all appropriate business investments, and return excess cash to our shareholders by a dividend and share buyback.

Our goal is to continuously delight both our guests and our shareholders.

Fran, at this point, could you please open the call up for any questions?

Of course, and thank you.

(Operator Instructions)

Our first request is from Ian Corydon, B Riley & Co.

Your line is open, sir.

Thank you.

John, do you have an estimate for how much the Fourth of July shift hurt the attendance?

You know what, Ian, we are not disclosing that number.

But clearly, it falling on a Wednesday, as you know, if it's closer to the weekend there tends to be a nice pop in attendance over the weekend, either before or after.

And clearly, I think having it on a Wednesday did impact people adjusting their holiday schedules.

I think in addition, Ian, if you look at various comments that have come out from not just our industry but ledger industry in general, I think that the commentary that suggests this occurred in other areas, as well.

Okay.

And regarding the debt covenant and the restrictions on free cash flow to be paid out to shareholders, are you comfortable with where those stand for the next year or two?

Yes, I think we are comfortable with where those stand over the next year or two.

Okay.

Last question is just on Holiday in the Park.

Is that in the same number of parks, same number of days as it was last year and if you have -- if you can elaborate anymore in your plans for this year versus what you did last year.

I think the single biggest change is that we've added both Frightfest and Holiday in the Park in Mexico, so we are increasing the number of parks that have exposure to Holiday in the Park and the single biggest change comes in Mexico.

We're very excited, not only about Frightfest, but also about the Holiday in the Park impact as we build that franchise for the future.

Great, thank you.

Our next request now, Ian Zaffino, Oppenheimer.

Your line is open.

Hello, thanks.

On this attendance, just look at the industry.

What would you expect of industry to grow?

You've always talked about a 2% to 3% industry growth rate and even if you adjust for the 150,000 missed guests you're just growing barely in line with the industry.

What kind of value are you basically adding here and how should we think about this going forward, particularly that you had significantly easier comps this year, again even if you ignore the 150,000 guests?

Just help us understand what the business should be doing going forward and how we should think about both volumes and pricing?

Ian, I think you know very well that we've never provided any guidance on attendance growth.

I think when you think about the way that we assess this, we feel fantastic about where we are.

If you look over the last 12 months, our attendance overall has grown almost 8%.

So what I would say to you, it's very difficult to take a look at any one quarter and say from that, okay, there's a trend coming now because this quarter is 3% and that quarter is 5%.

I think look at what we've done year to date and over 12 months and I think 8% growth in attendance is pretty amazing.

And I think you also noted early on in the various comments that you had made that the Company has been registering 24 million in attendance, dropped below that, and now on a LTM basis we're at 25.6 million people and headed north.

So I would say rather than focusing in on any one quarter, look at the trends in attendance, in revenue and in profitability, and when you look at that you will see amazing increases across the board, not just year to date but on the LTM and on a two-, three-year basis.

All right.

Thank you.

Our next request now, Scott Hamann, KeyBanc Capital Markets.

Your line is open, sir.

Good morning, everyone.

Jim, first I just want to say that I absolutely love your video on the new rides and I think you set a new standard for the industry in terms of introducing new capital.

Thank you, Scott, I appreciate it.

So just a couple questions here.

In terms of season passes, can you give us any additional color on maybe the percentage of Season Passes as a percentage of your total attendance this year?

I think you know, Scott, we don't do that.

We tend to do the breakdown on an annual basis, so we'll do it on the fourth quarter call.

But what I can tell you just so that you do have a little more flavor, because I know you're looking for that, is that we had a fantastic year last year with Season Pass sales growth increased.

This year we spoke about the fact that our Season Pass growth was exceptional.

As we launched the new 2013 Season Pass sales we've seen extraordinary interest and growth in the double-digits level.

So we are seeing no letup in terms of not just interest in the park but actual purchases of Season Passes.

Okay.

And then just in terms of what you're doing for 2013.

Are you doing any additional promotions, or are you -- I know you have played around with some installment stuff last year, what's driving -- outside of the new rides -- potentially some of this interest in 2013 passes?

I think there are several things that we're doing.

Obviously, the new rides, shows, attractions in every single park are key, but you recognize that.

So in terms of incremental value-adding efforts, I think there are several things.

First of all, we've introduced a gold pass, which allows people to in essence upgrade and in certain cases get parking in the price.

We've also worked on the payment process so that we're offering more flexibility, including 12-month payment processes.

I think if you think about a really difficult economy, which it continues to be, offering people the opportunity to be able to pay monthly at a much lower rate is really supercharging our sales.

So those are just sort of things we're doing.

Okay.

Just in terms of deferred revenue that you have at quarter end, some of it's 2012, some of it's 2013, any color on what percentage is going to be recognized before the end of the year versus what's for 13?

No, we don't break that out.

We're not going to provide any guidance on that.

What I can tell you is 2012 was great and 2013 is excellent, as well.

Okay.

And then just --

Double-digit growth for 2013.

Got it.

Maybe just one final question.

On the Project 500 plan you talked about your comfort level in getting there.

Getting another year under your belt, has anything evolved with your thinking around the components of how you're going to get there?

Attendance seemed to be a bit better this year.

I'm not sure what you were thinking in terms of pricing, but it seemed to me maybe last year that you had kind of talked about not having more modest attendance with then getting to that number and a little more on the pricing side and I'm just curious if anything's changed now maybe a year later?

Scott, I would say that nothing has changed.

I know it sounds strange, but I really feel like, first, the strategy itself is working.

Second, we really do believe there continues to be a pricing opportunity, which we have been taking and will continue to take.

We've not seen any pushback.

In fact, I've mentioned before, it just completed and when Frightfest is done we'll have the full effect.

But we're seeing the value perception from our guests being at an all-time high.

So, as we take pricing and our offerings improve we're not seeing any pushback at all.

So I would say that the single biggest drivers are really going to be pricing, Season Pass sales -- which I just mentioned we're seeing double-digit gains -- and obviously, a strong focus on making sure that we keep costs under control.

That's what we've done and that's what we'll continue to do.

All right, great.

Thanks a lot, guys.

Thanks, Scott.

Your next question from Todd Miranowski, Silver Point Capital.

Your line is open.

Hello, there.

You guys said in your release that you bought back 1.1 million shares with $70 million of proceeds from dick clark and it's provided --

Correct.

Is that right?

That's correct.

Okay.

And it is [dividing] that through that, that implies you've been paying $63.65 roughly per share buyback.

I'm just trying to -- I'm just kind of scratching my head because dick clark closed on the 28th of September and looking at the stock chart to get to $63.65 per share, it looks like you would have to buy back almost all the shares in the past week or two, is that right?

We don't disclose how and when we buy back shares, but we have bought back exactly what we described in the press release.

Got it.

It just seems strange that you're rushing out to buy shares coming into a soft quarter.

We would not describe it as a soft quarter, Todd.

I think it's a very strong quarter maintaining a very strong year.

As we look at the Company and the potential for the future we continue to believe that buying back shares on behalf of our shareholders is a fantastic use of the Company's assets.

Fair enough.

Do your nine-month EBITDA numbers still include dick clark's results?

That's correct, they do.

Should there be pro forma add at this point or --?

Basically when I was talking earlier, I mentioned specifically -- and it's included in the press release as well -- specifically what Dick Clark contributed in the first nine months by quarter.

So, as you think about next year you should adjust that out.

Right.

So, Todd, if you look at the press release you can -- and the script John described the exact detail, so you can actually deduct that.

Got it.

Okay, thank you.

And then last question is -- and this is a random one -- but part of the recent deal that ended the Chicago teachers strike included an increase in the school year by 10 days and I think your park outside of Chicago is one of your most profitable.

What impact do you think 10 lost days of Chicago school kids would have on your results?

I don't think it's going to have very much impact at all, although you never know until you actually get there.

We have had school calendars moving every single year in every single district and, in general, we've seen continued very strong performance.

In fact, this year we had changes in the calendar and we're registering, as I said earlier, 8% LTM gains in attendance.

Okay, that's it.

Thank you very much.

Thank you.

(Operator Instructions)

My last at time is from Jerrod Solomon of Silver Point and your line is open.

Hey, guys.

Just out of curiosity, what's going to happen to your dividend when you run out of the NOLs in 2015?

Do you think you could keep the same level as you just announced?

Yes.

I think we have enough cushion between our cash flow that we're generating today and our dividend amount.

As you think about -- as we talk about Project 500, that cash flow -- we expect that cash flow to improve significantly over the next several years.

I think we'll have plenty of cushion to maintain that dividend going forward, even when we run out of NOLs.

But I just -- (multiple speakers).

You're also speculating that somehow you run out in 2015, which I think is completely incorrect.

As John said in his discussion, we're sitting on over $1 billion right now and we're almost at the end of 2012.

So really I think what you're assuming, if you were to suggest that we would use all of those NOLs up, is that we have really much greater improvements in profitability than even the $500 million level that I've described as aspirational, and I think we'd all celebrate levels of profitability higher than that.

Great.

And how many of those NOLs of that number you give are federal?

That's all federal.

All federal.

Okay, thank you.

Thanks very much.

But I will tell you in addition to that we do have state NOLs, but that $1.1 billion is all federal.

All right, thank you.

And I do have one more request; Michael Needleman, Preservation Assets.

Your line is open, sir.

Good morning, gentlemen.

I came on very late, so pardon me.

If I can, was that attendance that was reported in the quarter, was that where you thought the attendance could come in?

It was up 3% and you faced difficult comps and I give you kudos for the overall attendance, but was it the number that you thought it would be?

What I would say, Mike, is that we're very happy with the attendance growth, but we don't ever provide guidance.

So, I'm not going to say this was exactly where we thought it would be.

We are very happy, and as I said, LTM we're looking at 8% attendance growth over the last 12 months.

So it's very strong overall and I think we're very well positioned for not just 2013 but going forward, as well.

And I appreciate that.

Let me ask it just a different way, because I did hear your answer on the Fourth of July.

If the Fourth of July -- and it is all ifs -- does the Fourth of July on the weekend -- and I thought I heard you say if it's close to a weekend, it does drive additional attendance.

Is that correct, did I hear you say that?

Yes, that's correct.

Okay.

All right, and one last question.

Just in terms of what you're seeing on spend -- on price -- and I didn't catch this, so pardon me -- how much of it was price -- or ticket price versus just overall attendance growth?

Mike, we don't break out price versus attendance, but you can see from the numbers we've got -- in essence, we've got both.

Because we've actually taken pricing up, and we've increased attendance, and we've increased Season Pass-based attendance.

So really the mix that we've seen is very, very strong overall and it's put us in a position where we've increased not just the attendance, but also our revenue and our profitability.

Okay.

So as we look at attendance and per caps, particularly admission per caps, we are seeing very strong increase in admissions per caps in our one-day tickets, our pre bookings, so it really is a mix that's bringing that per cap -- overall per cap down.

Thank you.

Our next request now is from Tim Conder of Wells Fargo.

Your line is open.

Thank you.

It is the strategy of focusing on an overall yield versus attendance has clearly been successful for you and the industry.

But, Jim, just maybe on the question of attendance and maybe what could have been.

Clearly, July and very early August you've had very, very warm weather, especially in the eastern two-thirds of the country, and then you had some of the easier comps, as you've already talked about, from the storms that hit the East Coast last year.

So is there anyway that you think you can quantify or talk about in your view subjectively how much was impacted from the heat in the eastern two-thirds of the country this year and maybe does that set you up for somewhat of an easier comparison looking to 2013?

Tim, I'm not going to do that, because as I think you said and others have said, trying to speculate what would have been, it's just not wise.

I think that the right way to look at this is, the way we've described it before, that you will get weather that impacts one month, one quarter.

But on average by the time you get to the end of the year, it's all averaged out and I think that's the way we assess it.

So if you look at our year-to-date performance, or you look at our LTM performance, which is probably an even better measure, you're looking at 7.7% LTM attendance growth, which is very, very strong, much stronger than the overall industry growth.

And we feel very good as we look forward as to the potential, not just for attendance but also for revenue and profit growth.

So we're looking at it from a total yield, as you described, perspective, and with the Season Pass interest and double-digit growth that we're seeing, we don't see any reason why we can't continue to see good success going forward.

Okay, great.

Thank you.

Thank you.

Our next request now, Scott Craven, LCN Asset Management.

Your line is open.

Hello, guys.

You alluded in your commentary that you would look at all options for shareholders, is a REIT structure something that you guys would ever consider?

It is something that we have looked at and we'll continue to evaluate that and see if it makes sense.

But as I mentioned, in terms of the timing with the size of the NOLs that we have we're years away from, I think, entertaining any type of option like that.

Thank you.

And my last request at this time, Jerrod Solomon, Silver Point.

Hello, guys.

Just a quick question.

I think I missed it, but which quarter did you say there is the impact from hurricane?

That was in the third quarter of last year.

Okay.

So as you compare this quarter to last year, right.

And on the insurance?

Oh, I'm sorry, on the insurance.

The insurance amount that was collected on Hurricane Irene was in the first quarter in 2012.

So I raise that, just as you think about next year and doing your miles for next year, just make sure you consider that there was $3 million in the first quarter of 2012.

Right, and is that in the adjusted EBITDA number?

That is in the adjusted EBITDA number, that's correct.

All right, so we would back that out, as well.

Okay, thank you.

Thank you very much for your questions.

As I have no further in queue I would like to turn it back to Management for any closing remarks.

Thank you very much, Fran, I appreciate it.

I really do appreciate you joining our call today and for your ongoing support of our Management team and the Company.

Clearly, we all have a strong belief in the future of the Company, and we hope you do too.

Don't forget to get one of our -- to go to one of our parks to check out Frightfest and Holiday in the Park in the coming months.

Take care.

The conference is now concluded.

Again, thank you for your participation.

All lines may please disconnect.