Six Flags Entertainment Corp (SIX) 2014 Q3 法說會逐字稿

Good afternoon, ladies and gentlemen.

Welcome to the Six Flags third-quarter 2014 earnings conference call.

My name is Rhonda, and I will be your operator for today's call.

(Operator Instructions)

Thank you.

I would now like to turn the call over to Nancy Krejsa, Senior Vice President, Investor Relations and Corporate Communications for Six Flags.

Please go ahead.

Hello, and welcome to our earnings call this afternoon.

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

Our call will begin with prepared comments from both Jim and John, and then we will open the call for your questions.

On the call, our comments will 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.

In addition on the call, we will discuss non-GAAP financial measures.

Investors can find a detailed discussion of business risks and reconciliations of non-GAAP financial measures to GAAP financial measures in the Company's annual reports, quarterly reports, or other forms filed or furnished with the SEC.

At this time, I will turn the call over to Jim for his prepared remarks.

Thank you, Nancy, and good afternoon, everyone.

Today, I am very excited to let you know that we have delivered yet another record financial performance.

The Company is firing on all cylinders, both strategically and operationally, and we are headed for a fifth record year in a row.

As a result, the Board and management of Six Flags have considered this strong momentum and taken the decision to set a new long-term financial goal for the Organization: $600 million of modified EBITDA by 2017.

I am really proud of our Six Flags team.

Q3 was, in fact, the highest quarterly revenue and EBITDA ever reported by the Company.

We also set another new industry record for profitability, with a modified EBITDA margin of 40.7%.

And in addition, our guest satisfaction scores continue to reach new highs.

Our 7% revenue growth and 8% EBITDA growth were achieved by ongoing execution of our business strategy, which includes delighting our guests, innovating guest-focused products and services, improving the efficiency of our operations, building a high-performance team culture, and, of course, building shareholder value year by year.

Our revenue growth was primarily driven by consistent implementation of our pricing strategy, which has been, and will continue to be, the largest contributor to our long-term growth.

Let me briefly remind you that for many years prior to the current strategy, Six Flags underpriced its unique offerings, and resorted to heavy discounts to attract guests.

For the past four years, we have steadily chipped away at these discounts, while simultaneously raising the quality of the park experience.

The 2014 season has been no different.

We continue to implement the two main elements of our pricing strategy.

First, we implemented mid- to high-single-digit price increases.

Second, we continued to fence in numerous discounts.

For example, in several parks, we shifted to more bring-a-friend for $9.99 on certain dates, in lieu of traditional bring-a-friend-free offers.

These types of programs are effective in achieving our goal of maximizing revenue, profit and cash flow, and we continue to have a multi-year opportunity to raise prices, tweak our approach to discounting, and grow attendance.

We have seen great success with our membership in season pass programs, as evidenced by the 10% growth in the Active Pass Base over prior year.

Our membership program is in its infancy stage, given that we introduced it in 2013.

We believe we have further opportunity for higher adoption rates, which should help grow attendance over time, and enhance our recurring revenue base.

Inside the park, among other items, our food and beverage offering, and in particular, our All Season Dining Pass, continued to be an excellent growth driver for us in terms of both revenue and profit.

The 2014 season was the second full year of All Season Dining Pass, and we see great opportunity for further penetration of this offering for multiple years to come.

It is a tremendous value for our guests, and it's an excellent tool to grow revenue and enhance profitability.

We have also made excellent progress with our international partners in developing Six Flags-branded theme parks in those markets, and we continue discussions with potential partners in other countries.

We firmly believe this will be a sustainable, valuable, and significant long-term growth opportunity for the Company.

Based on our continued success and the probable achievement of Project 500, we have established a new long-term aspirational target of achieving $600 million of modified EBITDA by the year 2017.

As a reference point, our September trailing 12-month modified EBITDA number was $467 million.

We believe it is important for both investors and our employees to keep our eyes set on long-term stretch goals, while delivering strong returns on an interim basis.

We work very hard to be prudent stewards of our shareholders' money.

We intend to continue investing 9% of revenue into capital projects, then return excess cash flow to shareholders in the form of dividends and share repurchases.

We are extremely proud to be able to increase our quarterly dividends by 11% to $0.52 per share, beginning with the fourth-quarter 2014 dividend, our fifth consecutive year of dividend increases.

At about a 6% yield today, our stock has one of the most attractive yields in the market.

Put it into perspective: This is nearly triple that of the S&P 500.

And we are committed to a stable and growing dividend, year after year.

Our cash earnings per share on a trailing 12-month basis was $2.51, up 14% over the last 12 months.

It has grown at a 14% annual rate over the last three years, twice the growth rate of the S&P 500.

In addition, our new Project 600 target implies cash EPS of nearly $3.75, a 13% annual growth rate through 2017.

At this time, I am going to ask John to share a few more details on our third-quarter financials.

John?

Thank you, Jim, and good afternoon to everyone on the call.

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

I will start with the third-quarter performance, followed by year-to-date results, and finish with a review of cash flow and capital structure.

So, let's dissect the numbers a bit.

Total revenue in the quarter increased $37 million, or 7.4%, as a result of an 8% increase in admissions revenue, a 4% increase in in-park revenue, a 3% increase in sponsorship and accommodations revenue, and $5 million of international revenue.

Admission revenue per capita increased 8% to $25.87, as a result of our solid pricing gains, partially offset by a stronger mix of Season Pass attendance.

In-park revenue per capita increased $0.61 in the quarter to $17.92, as our focus on new product offerings, as well as the continued penetration of our All Season Dining Passes, continues to deliver volume increases.

Attendance increased nicely by 50,000 to 11.8 million guests.

Adjusted EBITDA for the quarter grew $23 million, or 8.4%, to $291 million, as a result of the strong revenue growth.

So, let's move on to discuss the year-to-date and LTM performance.

Year-to-date revenue is up $36 million, or 3.8%, driven by increases in guest spending per capita, and $10 million of international revenue.

We continue to be very pleased with the increase in guest-per-capita spending, which grew 8%, or $3.23, to $43.77, with strong increases in both admissions and in-park spending.

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

Year to date, cash operating expenses increased a modest 2.5%.

The combination of strong revenue gains and cost leverage improved year-to-date adjusted EBITDA to $393 million, an increase of $25 million, or 6.7%.

LTM adjusted EBITDA now stands at $429 million, with a modified EBITDA margin at a Company and industry record of 40.7%, up 82 basis points from a year ago.

In the first nine months of the year, we generated $234 million of operating cash flow, after capital investments.

We repurchased $119 million, or 3.1 million shares, of our stock.

We paid $136 million in dividends, and paid down $5 million of debt related to required amortization.

Net debt as of September 30 was $1.232 billion, representing a 2.9 times net leverage ratio.

The strong 2014 Season Pass sales, plus the strong unit sales of 2015 Season Passes generated this fall, along with the continued growth in memberships, has increased our Active Pass Base as of September 30, 2014, by 10% versus the same date last year.

Over the course of a season, Season Pass holders and members spend more at our parks than a single-day visitor, and so they are our most valuable customers.

Members behave very similarly to Season Pass holders in terms of visitation frequency and in-park spending, and the program provides the added benefit of higher retention and, therefore, higher stability in our revenue stream.

With our LTM modified EBITDA now at $467 million, we have determined that the likelihood of achieving Project 500 by 2015 is probable.

As such, we are required to begin and expensing the stock-based compensation expense associated with that plan, and accordingly, recorded a $73-million non-cash charge in the quarter.

We will continue to accrue charges in future quarters, although at a lower level than the third-quarter charge, until Project 500 is achieved.

Before I turn the call over to Jim, I would like to briefly comment on our capital structure and capital allocation.

The Company is in a great position.

Our net leverage of 2.9 times adjusted EBITDA is about half since re-listing, and we have a relatively low cost of debt at 4.6%, of which 73% is at a fixed rate.

And 97% of our debt is not due until the end of 2018, or later.

Our recurring revenue base, tight cost management, and disciplined approach to capital spending provides 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 11% to $0.52 a share per quarter, beginning in Q4 2014, leaving ample room for future annual increases.

Now I would like to turn the call back over to Jim.

Thanks so much, John.

I am very proud of our record-setting performance in the third quarter.

As I take a step back, it is clear to me that our ability to consistently deliver record-setting performance is really due to three factors:

First and foremost, our employees.

I have said it before, and I will say it again.

Our employees truly represent our greatest assets.

Through their relentless focus and execution, they have transformed Six Flags into the most profitable and most consistently performing regional theme park company in the world.

Second, our parks.

We truly have the best theme parks, located in some of the most populated and prosperous markets in North America.

As evidence of this, a recent survey by USA Today readers named Six Flags Magic Mountain in LA as the number-one theme park in America.

Six Flags Great Adventure in New Jersey came in a close second.

The final reason why we are able to perform so consistently is that we are exclusively focused on regional theme parks, which, in my opinion, is the most attractive sub-sector of the theme park industry.

With only a few months left in our 2014 season, we are now intent on delivering our last few weekends of thrills by day and frights by night, as part of our highly successful and growing Halloween event, Fright Fest.

We have invested incrementally into this superb franchise over the last four years, and it is paying back in big dividends, with lots of room for additional long-term growth.

Beginning in late November and through the balance of the 2014 season, we will turn our focus to Holiday in the Park, where we decorate our parks with millions of lights, and celebrate the cheer of the winter holidays.

This year, we will introduce Holiday in the Park in two parks for the first time ever: Magic Mountain in LA and Six Flags Over Georgia in Atlanta, bringing the total to six parks.

And we are confident our guests in those markets will truly enjoy celebrating their holidays at our parks, and create the beginnings of a new family tradition.

In most of our parks, we have already begun preparations for the 2015 season.

Our Season Pass sales are off to a great start, and much of the planning and construction for the new capsule is well under way.

In typical Six Flags fashion, several of these will be world-record-breaking rides.

In closing, I am confident that we are very well positioned for the future.

I am extremely proud of our Six Flags team, and all they do to consistently deliver record-breaking results, and we are solidly on track to deliver our fifth record year in a row.

Indeed, our future at Six Flags is very bright.

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

(Operator Instructions)

Joel Simkins, Credit Suisse.

Good afternoon, and congratulations on the quarter.

Jim, I guess, as we think about Project 600, can you just talk about how much of that is organic, and just, I assume it's going to remain on the steady state portfolio?

And also, how are you thinking about the incorporation of the international asset light opportunities into that metric?

Joel, great question.

As you know, we don't ever break out any future-related projections, but what I would say is this: First and foremost, I consider it all to be organic.

There is no M&A.

In other words, we are not going out to buy anything, but it will be driven by our own North American business, and by this relatively new international licensing business that we have developed.

So those will be the two major drivers.

And obviously within those, there are subsets of each.

I think I mentioned on the -- in the comments earlier that the single greatest driver we believe, will be pricing.

Okay.

And I guess following up on that question, again, I doubt you will tip your hand here, but in terms of how we should think about 2015, in terms of the mix of attendance versus pricing, I guess, it sounds like you are going to continue to push price as opposed to attendance?

Or should we think about a little bit more of an attendance story next year, given the ride package?

I think that is a fair question.

I think I want to outline, I think John has said it before, and I would reinforce it for the group.

Our goal is to drive revenue, profitability and growth in cash flow.

That is the number-one priority.

We like to get attendance, but everything we do will be driven to try to get our profitability and cash flow up.

Now, we do think we are going to get attendance growth.

As we mentioned, our Active Pass Base is up about 10% at the end of the quarter, and we have seen very nice Season Pass growth.

So we think that in 2015, we should see nice attendance gains, but we will not commit to that.

Our goal will always be to optimize for profitability and cash flow.

Thank you.

Tim Conder, Wells Fargo.

Thank you.

Also, let me offer the congratulations.

Jim, on that similar type of question, again, your Active Pass Base, as John mentioned, up 10%.

You were up 9% at the end of June.

Can you break that down?

Are you seeing that 10% year-over-year unit growth, are you seeing that being driven by memberships or traditional Season Passes, or are traditional Season Passes flat, down?

Just any directional piece on that?

And then, I guess, also following on the attendance question, can you talk about, I guess, the restrain in attendance?

You mentioned it, the delay in the school year, and that definitely hurt the industry in the second quarter.

Third quarter, just anything that you are seeing there?

Was it regional weather, or what exactly, if there was any factor in that, on the attendance portion in particular?

I will take part one and maybe, John, you could talk about part two.

I think with regard to the breakdown, we don't give the breakdown, Tim.

But I can tell you at a very high level, that we saw growth in both traditional and membership passes.

So, very solid growth in both, and very encouraging.

So, as we look forward, as I mentioned earlier, the outlook for membership to us is very positive, because that has continued to grow.

Now, with regard to the second part, John, do you want to talk to that?

Yes.

Tim, with regard to the attendance, first, I think we were very pleased with our attendance in the quarter.

I would say that as it relates to weather, it was a fairly normal weather quarter.

So, I wouldn't say that there was any major differences between this quarter and the last.

Probably similar to last year.

Similar to last year or similar to the last several years, as it relates to the third quarter.

Okay.

Okay.

And then, I know again you have only been out there a little over a year with your memberships.

But are you seeing at this point any significant differential from those with memberships, versus traditional Season Passes, as it relates to in-park spending?

I think a goal of the memberships is to maybe broaden out your demographic reach of your overall Active Pass Base?

Yes, Tim.

We are clearly definitely broadening the reach and utilizing the programs.

We have an amazing marketing group.

And utilizing the programs we have.

We are getting to guests who maybe have had a Season Pass before, might not renew.

Our guests who may not be able to afford paying the full Season Pass.

We are able to give them a value opportunity, and they are taking it up in growing numbers.

What is interesting to us is that there really isn't much differentiation in terms of what they spend in-park.

They spend the money.

Hence, when you look at our in-park spending, it is up very nicely.

Up 6%.

Lastly, along that line, can you discuss the average premium you are getting with a membership versus a traditional Season Pass?

Yes, Tim.

What we said before, typically our memberships sell on average for about $12 more than a Season Pass.

Okay.

In percentage terms, John?

It ranges, but that is probably anywhere from 15% to 20%.

Okay.

Great.

Thank you, gentlemen.

Ian Zaffino, Oppenheimer.

Thank you very much.

The question, this being more for John, as far as saying that Project 500 is probable, is that actually the 500, or is that when your partial awards hit?

Also that is by 2015?

Is that correct?

That is correct.

So the guidelines for determining when you start to expense a stock base compensation plan is when it becomes probable.

So we have determined, based upon where we sit today and our belief for next year is that we think achieving that 500 in 2015 is probable.

I wasn't sure if it was the 500 or risk when partial awards started kicking in.

Let's put it into perspective, Ian.

We are now at the point where we are within 7% of that $500 million goal.

And so the momentum, the trends that we have would suggest that it is probable, and therefore it is prudent to take this approach.

Okay.

And this is more, I guess another question for John.

As you look at raising the dividend, how do you think about raising the dividend with -- you have the NOL right now.

Talk about when you expect that NOL to be exhausted.

But then also, as you think about bringing the dividend right now, could you have maybe raised it more if there was some type of tax break, due to offset taxes after 2018, or whenever that NOL expires?

Or how do you actually think about the dividend, where to take it to, and where it can go?

Because knowing that your tax situation today is going to be different than your tax situation in five years from now.

Ian, it is a great question.

Let me start by saying that our belief is a strong sustainable cash dividend is an important part of our value proposition to shareholders.

As we look at our increases to our dividends, it is always based on making sure that dividend, and with future growth, is sustainable.

We have sizable net operating loss carry-forwards for tax purposes.

That will take us through at least 2018, so it would be 2019 before we would become a federal taxpayer.

Then, John, we would obviously look at another program, right?

We would continue to look at other programs to either take that NOL out further or maybe some things that would be more of a longer-term tax planning opportunity.

Okay.

Perfect.

Thank you very much.

Have a good quarter.

James Hardiman, Longbow Research.

Good evening.

Thanks for taking my call.

Year-to-date, revenue's up about 4%, which is pretty good.

I think it may be a hair short of where expectations were heading into the year, but obviously, the route has been somewhat unconventional getting there.

Attendance down quite a bit, pricing up quite a bit.

How much of that did you expect coming into the year, and how much have you been audibling over the course of the year?

Obviously, your stock has taken a beating.

We have talked before about how the Street is probably too focused on attendance.

But is the sell-off in your stock more a function of just how you thought the season would play out, was different than how the Street and investors thought it would play out?

Or have things been meaningfully different than how you thought they would be, heading into the year?

James, I think first and foremost, we try very, very hard to focus on the long term.

I know it sounds like mother and apple pie, but we really do.

And we set this $500 million goal.

We never set an interim goal.

We never said this is what it's going to be in 2014.

We don't break down quarters.

So, we did not communicate anything with regard to how attendance would look, or pricing in any one year or quarter.

Our view was we would always get to this long range number, and we are right on track with that.

And if you look at our growth rates this quarter, the biggest quarter that we have in the year, they are phenomenal, both in terms of the revenue and in terms of profitability, the single best quarter in the Company's history, including when we had many more parks.

So I think that the reality of any business though is, you may have a plan.

You may think it is going to go a certain way.

But you have to be able to course correct as you go along.

There is no doubt that the horrendous winter that we faced -- and by the way, not only that we faced, but you heard many of our competitors talk about exactly the same thing.

That did make it more difficult, because a number of schools in the spring and then also as summer began, just extended their school year, and that made it harder.

So we then had to do was to make sure that we course corrected, as I described, and delivered a year that our shareholders would be proud of.

I am pretty much certain that we are going to do that.

It will be a record year this year.

The team has done an amazing job, but there is no doubt, as you go along, you have to tweak things a little bit, and we have done that.

That is really helpful.

Let me maybe ask it in a slightly different way.

So obviously everybody gets that weather was really bad, coming into this year.

Talk a little bit, maybe, about the health of your consumer.

Do you think that has played a role at all in the overall attendance trends that we are seeing, and talk a little about the price elasticity of your ticket prices.

Obviously you have raised your prices quite a bit.

Do you think there has been some pushback on that, or is the entirety of the issue here was that weather was just bad this year, and excluding that, things are about as expected?

I would have to say that when we think about this year, weather was horrible over the winter, which is what really caused the problems with the school year.

And I think part of the issue is that those visits were definitely not made up in the third quarter.

Those lost visits were not made up.

In terms of the health of our consumer, I would argue that the health of the consumer is very good and they know a value offering when they see it.

And they come to the parks, hence the revenue numbers that we have seen.

In fact, on average, per capita spending is up pretty dramatically.

John, do you want to add anything to that?

Well, I would just add what we said on our second-quarter call, which is we do not believe that pricing was the driver of the attendance shortfall in the first half of the year.

We believe it was weather-related.

The best evidence of that is our Active Pass Base, which was up nicely.

So, people were buying the passes.

Unfortunately, because of circumstances beyond our control, they weren't visiting the park.

So, we feel very good about our pricing strategy, and the ability to continue to deliver on that.

John, let me add to this and hit both points again, James, because I know you want a specific answer, and there are some details that we can't or won't give you, but I want to reinforce what I said to an earlier question.

I think it may have been Joel who asked, but our number-one focus is on growing cash earnings per share in a consistent, sustainable manner.

You saw what happened.

I mean, it is up 14% in 12 months, and over three years, very similar, 14%, 15%.

Second, attendance is just one of a handful of variable that is drive our cash earnings.

While it is important, it is not our sole focus, it is not our top priority.

Our critical priority is making sure that we drive that profitability, that revenue, and the cash earnings, so that we can do what we need to fund the business, and then get everything else back to our shareholders.

We also look really closely at pricing.

I will talk about pricing in a minute, so you get a better sense on this.

But pricing, guest satisfaction, operating cost management, capital deployment, and while I believe those are all more important than attendance, I think attendance can grow.

But we are focused on optimizing all of these items.

Now, you asked about, is there some sort of elasticity, and I have to tell you, I do not believe we are seeing any price elasticity issue.

We are committed to our long-term strategy of increasing both prices and reducing dividends, in other words, yield.

Our overall goal is to increase pricing in 2015 over 2014, and we will do the same in 2016 over 2015, and the same in 2017.

We use special pricing in various areas, to try to drive incremental guests in.

And I think when you look at the performance, it really enforces that this approach, and our ability to do what we need to do for our guests is definitely paying off.

So, I feel as good -- I have said it before, I feel as good as I have ever felt, about where we are.

Sorry, I know it is a long answer, James.

No, It is a great answer.

I really appreciate the color.

Thanks for that.

And a last housekeeping question.

I think in your prepared remarks, you were kind enough to break out the international piece at about $5 million.

Obviously, you are not going to give us those numbers going forward.

Can you give us the number for the second quarter?

Was it a comparable $5 million number?

It was a comparable number, very similar.

Got it.

Great.

Thanks, and good luck.

Barton Crockett, FBR Capital Markets.

Okay.

Great, thanks for taking the question.

On the stock comp and the stock accrual, can you remind us how many shares are going to be distributed, and when do those go into the share count?

The number of shares will be for Project 500?

Yes.

Will between 2.6 million and 2.8 million shares, plus the shares associated with the dividend equivalent rights on those shares.

Those will get added to the outstanding share base, when they are actually granted.

So, I it depends -- just to be clear, Barton, on when we achieve that target.

So, we can't answer that question, say this is the specific answer.

But high level, the baseline number is 2.6 million shares.

As you have seen for Project 600, we are looking at 2.4 million shares.

Okay.

All right.

So, the share repurchasing, I mean, you really stepped it up this quarter, basically buying back more than the shares you would be issuing here for hitting your target.

What drove that step-up, and how should we think about the pace of that going forward?

I will let John talk to specifics, but I want to give you a real high-level view, Barton.

We believe in the Company.

We believe in the long term value.

We think, not only we're going to hit 500, we think we're going to hit 600.

Assuming we achieve those goals, the share price is going to go up.

We also believe in the approach that we have taken in terms of dividends and stock repurchases.

And with the price at these recent low levels, it seems to me and to the rest of the team, and to our Board, who are very active in all the discussions we have, it seems like an opportunity too good to pass up.

John, do you want to answer that?

I think the only thing I would add is, as Jim indicated earlier, all of our cash flow will be returned to shareholders in the form of dividends and share buybacks.

What controls how much we spend in the quarter is really our debt covenants.

As of right now, because our bond indenture is a builder's basket that started when we issued the bonds, and it is a quarterly calculation, that is really the restrictor of how much we can spend per quarter.

Now, at some point in time in the future, that will change, where the bank agreement will be the controller of how much we spend, but for right now, we maximize every single dollar that we can, under the credit agreements.

Okay.

Then one final thing here.

I hate to ask it, because it is not obviously the important human issue, but I mean, you did have an accident last year in your park.

Did that create any type of a comparison issue that is something that we should factor into, when we think about the normalized attendance growth in this quarter?

I don't think so, Barton.

It is a fair question, and you should ask the tough questions.

We obviously continue to feel horrible about what happened last year, but it is a very rare occurrence, as you know.

We continue to work on the legal side there, but in terms of a comparison, we mentioned that we generally see a short to medium-term impact.

It doesn't tend to be a major impact.

It hasn't been a major impact, and that park is doing extremely well.

Six Flags over Texas, great team and they are doing extremely well.

So, I don't look at it and say okay, there is some sort of adjustment that needs to take place there.

None of our parks really represent a major piece of our overall profitability.

We have got this incredible diversification, which is one of our strengths.

In very simple terms, no one park represents, let's say, more than 15% or 16% of our overall EBITDA, and that, I think, is a very good place to be.

So, you have the ability to diversify and protect yourself.

Great.

I will leave it there.

Thank you.

Afua Ahwoi, Goldman Sachs.

So, two questions for me.

First, on the Season Pass.

Given that the weather had an impact on attendance for this year, and maybe some of them may not have shown up, although they bought the season pass, how does that affect your go-to-market strategy for 2015, as you think about getting those customers to re-sign onto the Season Pass again?

Do you have to market more aggressively, less aggressively, the same?

And separately also on the international park, I know you have never given it before, but maybe if you can help us think about how maybe some of the incentive structures are set up?

Is it similarly to maybe what you would see in a typical hotel revenue share structure, maybe you see the percent of profit beyond a certain point, or revenue?

Just so we can maybe think about the lumpiness of those, potentially, as they continue to roll out.

Thank you.

Thanks, Afua.

Two good questions there and the first one on the SP front, the Season Pass front, or the active base.

Just from that active base number, you have to know that the actual number of Season Pass holders between members and traditional Season Pass holders is up very nicely.

We don't stop there, though.

We are actively targeting and marketing to all of our guests.

Not just folks who are current Season Pass holders, the folks who are last Season Pass holders, people who are not Season Pass holders, who we can get to.

We do that on an active basis, and we use targeted pricing methodology to get those folks to come, because we find once they come, we can lock them in.

Membership is beautiful in there, because once you have got them, you hit the 12 month point, and by month 13, it is just automatically renewing.

We have seen very little falloff in our membership base.

So, we had thought perhaps some of these people might go away after they have done a year.

That is not happening, certainly at any material level.

And in terms of -- So, they are staying with us.

We really don't need to do a lot of direct marketing to retain them, although we do obviously communicate with them.

The more active approach is on our traditional Season Pass holders, and that is where we take a very targeted communication strategy to get to them and sign them up as quickly as we can, which we are doing successfully.

Nancy or John, Nancy, maybe you take international.

You look bored there, so we've got to make sure you work hard here.

On the international side, there are three primary revenue streams we earn.

The first would be the design and development of the park.

That revenue stream is earned, really, from the time we sign the agreement until the park opens.

And we shared on our call in Q2, that revenue stream is going to be lumpy quarter-to-quarter, because it is really tied to deliverables that the Company executes.

The other two revenue streams come from licensing and management services.

And some of that will begin before the park opens, but the vast majority is after the park opens, and that is primarily tied to revenue.

I know you would love to have this.

We actually would love to give all of you the details, but you have to understand, the reason we do this is for our investors.

We don't give details because once you have given the details out, it restricts your ability to negotiate with other parties.

So, we will never release this information, in order to insure that we have maximum flexibility, when we are talking to the people that we are.

And we are talking to a number of people right now.

Thank you.

At this time, there are no further questions.

Okay.

Well, I really appreciate the fact that everyone has joined us today for this call.

And I do -- I kind of said this earlier, but I want to reinforce that it is really important to me that you know, I have never felt better about Six Flags and where we are as a Company, than I feel today.

With our innovative attractions and programs, pricing and yield opportunities, Season Pass, dining initiatives, the membership program, and then what Nancy just talked about, the international expansion potential, there really has never been a better time to be a part of this Company, and I really, sincerely, believe that the best is yet to come.

Thanks so much for being with us today.

You can rest assured that our team is focused on delighting our guests and creating incremental shareholder value in the years ahead.

Take care, everyone.

Thanks, Rhonda.

We are done, I think.

Thank you, ladies and gentlemen.

That does conclude the conference call for today.

You may now disconnect your lines.