Six Flags Entertainment Corp (SIX) 2018 Q4 法說會逐字稿

Good morning, ladies and gentlemen.

Welcome to the Six Flags Fourth Quarter and Full Year 2018 Earnings Conference Call.

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

(Operator Instructions)

I will now turn the call over to Steve Purtell, Senior Vice President, Investor Relations and Treasurer.

Good morning, and welcome to our fourth quarter and full year 2018 call.

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

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

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 undertake no obligation to update or revise these statements.

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

Investors can find both 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 call -- turn the call over to Jim.

Thank you, Steve, and welcome to our call.

We finished the year with a very strong operational performance, with record results for both Fright Fest and Holiday in the Park, growing fourth quarter revenue 5% and adjusted EBITDA by 9%, making 2018 our ninth consecutive record year.

By staying focused on operational efficiencies, leveraging our infrastructure and staying at the forefront of industry innovation, we once again generated the highest modified EBITDA-less CapEx margin in the theme Park industry by several hundred basis points.

Though we are disappointed we missed our Project 600 goal, the underlying trajectory of our company remains strong, with growth coming from all our strategic initiatives.

In 2018, we increased ticket pricing across all ticket types, driving per capita spending growth; sold over 30% more memberships at a 30% higher average selling price compared to 2017; improved in-park spending, primarily through higher culinary sales from our growing base of dining pass holders; increased revenue from our international agreements by 10%; and grew our domestic portfolio of parks by 5% as we expanded our footprint into new lucrative Cedar markets.

I could not be more proud of our outstanding team members who continue to lead the industry in innovation.

Last year, we further expanded and leveraged our Active Pass Base by creating the premier membership and loyalty program in the industry and introduced news in every park, including several record-breaking rides.

In addition, our overall guest satisfaction and value for the money ratings reached all-time highs for the ninth year in a row, which clearly reflects both the quality of our offerings and superb execution by our amazing team members.

Our international agreements continue to be a significant contributor to revenue growth as revenue approached $42 million in 2018.

It would have been approximately $15 million higher if not for our fourth quarter adjustment to reflect delays in some of the China parks' opening schedules caused by recent macroeconomic events that many companies are experiencing and from which our partner is not immune.

The delays result from 3 main areas: first, the economy in China is experiencing a general malaise due to global trade tensions and the lowest pace of GDP growth in almost 30 years; second, new policies and regulations have reduced the volume of real estate transactions, our partner's primary business and made it more difficult for private companies to obtain loans; third, recent turnover of government officials in Chongqing and Nanjing has caused development plans to be temporarily paused until the plans can be reviewed and reapproved by new leadership.

As a result of these conditions, we performed a comprehensive review of our project timelines jointly with our partner.

Although we have reasons to believe conditions could improve in China during the second quarter of -- second half of 2019, we now expect our high-end parks to begin opening in mid- to late 2020 versus 2019, our Chongqing parks to begin opening in mid to late 2021 versus 2020, and Nanjing to begin opening in late 2022.

Because we recognize revenue for each park ratably over the development period, park opening or funding delays require us to adjust our revenue recognition to the newly expected project timelines.

For this reason, we anticipate that quarterly revenue from our international agreements may be lumpy in 2019 and possibly 2020 as our China partner works through these macroeconomic issues.

Although the timing of the ensuing revenue adjustments is unfortunate, our partner in China remains fully committed to developing and opening these parks, and construction is continuing.

As it relates to Dubai, our project continues to be on hold.

As we stated on our last call, although they are current on all their financial obligations to us and while we continue to work with them on a path forward, there can be no assurances as to the outcome of the project.

I want to reinforce the strong positive and enduring impact that will come from our international agreements, a growth strategy that is unique to Six Flags.

In 2018, we announced 5 new international parks, all of which will contribute to our long-term growth.

We now have 5 locations across 3 countries, each with separate approvals and funding sources.

Even the 3 complexes in China should be considered independently as they have separate local government and financial sponsors.

As a result, the pace of development may differ for each location.

In addition, I also want to reinforce that we're having discussions with multiple potential partners regarding new locations outside of China.

We will never ever give up our pursuit of the best possible results for our shareholders and our guests.

Nevertheless, the required growth rate combined with the potential lumpiness of our international development assets over the next couple of years has led us to revisit our medium-term outlook and conclude that on-time achievement of our aspirational target of $750 million of modified EBITDA by 2020 is highly unlikely.

At a minimum, we are still striving for late achievement of the target in 2021, with modest growth likely in 2019 and accelerations thereafter.

Our strategy remains focused on being the premier global regional theme park operator, delighting our guests and ensuring that they have a fun, safe and thrilling experience every time they visit Six Flags.

We will continue to invest in our industry-leading innovative rides, attractions and seasonal special events, helping us to convert more 1-day ticket users and season pass holders to members, our most loyal and profitable guests.

Marshall is now going to share a few more details on our financial results.

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

We are very pleased with our attendance growth, guest spending revenue and profitability in the fourth quarter.

I'll start with a discussion of our fourth quarter performance and then provide details for full year 2018.

Attendance for the quarter grew 3% to 6.3 million guests.

When combined with a higher guest spending per capita, revenue increased a solid 5% to a record $270 million despite the $15 million charge to international agreements revenue that Jim mentioned.

Guest spending per capita increased $2.35 or 6% to $40.25.

As a result of our strong premium membership sales and strategic pricing initiatives, admissions per capita increased 8%.

In-park per capita increased 4% due to higher spending for members, new culinary and retail offerings for Holiday in the Park and our successful All-Season Dining program.

On the cost side, we effectively limited increases in cash and operating -- cash operating and SG&A expenses in the quarter to less than inflation despite more operating days, higher lease expense and increased investments in our Fright Fest and Holiday in the Park events, including Holiday in the Park at Six Flags Great America in Frontier City.

As a reminder, the incremental lease and operating expenses related to our 5 newly acquired domestic parks will continue through the second quarter of 2019 when we overlap the acquisition date.

Since most of these parks will not open until mid- to late Q2, the incremental costs will create a headwind-to-EBITDA growth in the first half of 2019.

As a result of higher guest spending per capita, higher attendance and cost controls, our modified EBITDA margin improved 140 basis points compared to prior year quarter.

Investments in our Fright Fest and Holiday in the Park events have driven an incremental $60 million of fourth quarter EBITDA over the past 5 years, equating to an annual growth rate of 22%.

Modified and adjusted EBITDA for the quarter were a record $95 million and $8 million or 9% increase over the prior year quarter.

Moving to full year performance.

Attendance grew to a 17-year high of 32 million guests, an increase of 5%.

Total revenue for the year increased $105 million or 8% compared to 2017, driven by attendance growth; higher ticket pricing; premium membership tiers; and a $4 million increase in international agreements revenue.

Admissions revenue was up $69 million or 9%, and in-park revenue was up $29 million or 6%.

We are increasing admissions pricing and encouraging our guests to spend more in our parks.

For the year, guest spending per caps increased $0.97 or 2%.

Cash operating and SG&A expenses were up 8% in 2018 due to the addition of the 5 new domestic parks in June, increased operating days at Six Flags Magic Mountain, which began 365-day operations in 2018, the full year operation of 2 water parks acquired in 2017 and wage inflation due to state-mandated minimum wage hikes and competitive labor markets.

Excluding the expenses associated with the 5 new domestic parks, our costs for the year were in line with inflation.

We were able to leverage our cost infrastructure to partially offset these additional expenses, and our 2018 modified EBITDA margin of 40.5% remains an industry high.

Full year diluted GAAP earnings per share grew to $3.23 from $3.09 in 2017 due to increased operating earnings and a reduction in stock-based compensation related to the non-attainment of Project 600.

This improvement was offset by an $85 million prior year restatement of deferred tax liabilities resulting from the Tax Cuts and Jobs Act signed into law in 2017.

Over the next year, we expect stock-based compensation expense to be approximately $4 million per quarter.

We delivered a record high of $554 million of adjusted EBITDA in 2018, an increase of $34 million or 7% over 2017.

Total capital spending for the year was $133 million net of insurance proceeds, equating to 9% of revenue.

Additionally, we spent $23 million, less networking capital and other customary adjustments, to acquire lease rights to 5 new domestic parks.

We are committed to maintaining capital spending at 9% of revenue.

The Active Pass Base, which represents the number -- the total number of guests to enroll in the company's membership program or have a season pass, was up 8% over prior year-end, reaching an all-time high.

The growth was driven by a 31% increase in our active member base.

Attendance from members and season pass holders remains 63% of total attendance in 2018, similar to 2017.

This percentage was dampened by the addition of our 5 new domestic parks, which have a much smaller proportion of season pass holders.

Deferred revenue was a year-end record high of $146 million, representing a $4 million or 3% increase over prior year.

This increase was driven by higher membership prices, net of defaults, offset by the increasing proportion of members who have been with us for more than 12 months and who no longer contribute to the deferred revenue balance.

Going forward, as the company is increasingly successful in retaining members past the initial 12-month compulsory period, we expect deferred revenue growth to be muted.

In addition, cash receipts will be delayed due to members making payments monthly versus the traditional season pass holders who pay for an entire season in advance.

In the fourth quarter, we increased our quarterly dividend by 5% to $0.82 a share, which is 17% higher than the fourth quarter 2017.

Our dividend yield is very attractive, and we remain committed to growing our dividend every year.

Reported net debt as of December 31 was $2.06 billion, and our net leverage ratio was 3.7x adjusted EBITDA.

In 2018, we repurchased a $111 million or 1.8 million shares of our common stock.

As of December 31, we had $232 million remaining under our board-authorized share repurchase program.

Since February of 2010, we have repurchased nearly $2.1 billion of our common stock at average price of $40.35.

We believe our stock continues to represent an excellent investment and anticipate continuing to use excess cash flow to repurchase shares.

In summary, we are very pleased with our fourth quarter and full year performance despite the short-term international setbacks.

As we look ahead, I want to highlight some changes to the 2019 operating calendar: first, we anticipate the later Easter holiday to shift approximately 200,000 of attendance from Q1 to Q2; second, as we are implementing year-round weekend operations at Six Flags Fiesta Texas in San Antonio and also adding operating days at Six Flags Mexico, primarily in Q1 and Q2; third, our 5 new parks will add more than 100 operating days prior to June 1, the day we acquired them in 2018; and finally, we'll operate our newest water park acquisition, Magic Waters, in Rockford, Illinois, for a full season beginning in late Q2.

And now I'll turn the call back over to Jim.

Thank you very much, Marshall.

We have just delivered an unprecedented ninth record year for this company, and we are poised to deliver our tenth consecutive record-breaking year in 2019.

I am very confident about our underlying strategy, long-term growth prospects and value of our company.

Our parks are in pristine condition, and our ride lineup for 2019 will be our best ever, with news in every one of our parks, including major coasters at Magic Mountain, Great America and Discovery Kingdom and a major water park expansion at Great Escape.

West Coast Racers will become the 20th roller coaster at Magic Mountain, which has more coasters than any other theme park in the world and will help us maximize our second year of 365-day operations.

And of course, we will continue to invest in and expand our incredible Fright Fest and Holiday in the Park franchises.

Our Active Pass Base as of December 31 was almost 8 million guests, including 2.2 million members.

And we are both taking up pricing and improving our yield by selling higher-priced membership tiers.

Our dining pass penetration continues to increase, and we now have 13 parks under our international agreements.

We will also have the full year benefit of our 5 domestic parks acquired in mid-2018 and a full season of Magic Waters.

Our 5 strategic growth areas provide a platform for growth for years to come, and we are not unduly dependent on any one of them.

At times, some may contribute more than others.

But clearly, we have demonstrated every year for 9 years the ability to grow in any circumstances.

The first area of growth is our increasing Active Pass Base and further penetration of memberships, which can deliver ever-increasing recurring revenue.

We just celebrated the first anniversary of our premium membership program, and I must say, it has been a tremendous success.

Together with our industry-leading loyalty program, this strategy has the ability to be transformative.

Members spend more, visit more and have higher guest satisfaction and retention rates.

Unlike season passes, memberships do not expire at the end of a season.

They will still be in our Active Pass Base in the first quarter, and these guests will not need to be resold a season pass before the next season begins.

The second area of growth is our strategic approach to ticket pricing.

We have pricing power in all of our markets and continue to take prices up 3% to 5%.

We can grow pricing in this range for years to come as we continuously improve guest satisfaction and our value for the money ratings.

For 2019, we will continue to improve our yield by driving higher penetration of the premium membership tiers at the current price points.

The third area of growth is in-park revenue, especially from our All-Season Dining program.

Memberships allow us to bundle in-park products and services to encourage guests to purchase items they might not otherwise even consider.

Members spend 4x as much on retail and are 50% more likely to buy a dining pass.

This has helped us to further increase dining pass penetration of our Active Pass Base.

And our upcoming introduction of mobile dining and more unique culinary offerings will take food sales to the next level.

The fourth area of growth is acquiring parks in the Cedar market of our existing theme parks.

We have expanded our addressable market by adding 8 new parks since announcing this strategy in 2017, and we will soon have 26 parks in our system.

We have the ability to double the profitability of these parks within a few years by leveraging our brand, our Active Pass Base and our cost efficiencies.

There remain dozens of potential opportunities.

The fifth area of growth comes from our international agreements.

This initiative is a differentiator for us, growing revenue every year and generating $133 million of revenue since the program began in 2014.

Because the parks require no direct investment from Six Flags, our exposure to political economic risk is limited.

There is very low penetration of high-quality theme parks in emerging markets.

And as the middle class in these markets rapidly expands, we expect demand for our unique brand of entertainment to increase.

Over the last 4 to 5 years, our international team has developed a very strong platform that can quickly be deployed to new markets.

Six Flags provides family entertainment that is affordable in any economic environment.

Our membership, All-Season Dining and other Pass programs, along with our multi-year international agreements and sponsorship partnerships, provides a significant and growing source of recurring revenue.

Considering our track record and growth prospects, I believe our stock price is fundamentally undervalued.

In February 2017, we reported adjusted EBITDA of about $500 million for 2016 and had a dividend yield of 4%.

At that price point, our share price was $60.

Fast-forward to today, we've just delivered [$564] million of adjusted EBITDA, have a dividend yield in excess of 5%, a much stronger recurring revenue base with an $8 million guest Active Pass Base, yet our share price is still around $60.

We have consistently delivered both quarterly and annual EBITDA records and returned all excess cash to shareholders, further building shareholder value.

We have a sustainable business model that ensures stable and consistent cash flow as well as protection against both bad weather and an economic downturn.

With a 5-year total shareholder return nearly double and a dividend yield nearly triple the S&P 500, we are a strong growth and yield stock.

We are well positioned for the 2019 season with our growing membership and dining pass bases, setting us up nicely for our tenth consecutive record year.

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

(Operator Instructions) Your first question comes from Ian Zaffino of Oppenheimer.

As far as the new projects, I just wanted to ask, is there going to be a new project that you think the board is going to come up with?

Or is there any discussion about that?

Or is it just -- how are you guys can be incentivized going forward?

Yes, I think it's a really good question, Ian.

And I would say right upfront that there is no new projects.

Project 750 is still out there.

And when you think about the projects and the success we've had with them, they have driven significant shareholder value over a period of time, and they really lead to complete alignment between employees and shareholders.

If you go back, and Ian, I know you've been with us right from the start as a big supporter, you'll remember that adjusted EBITDA in 2009 was less than $200 million, and now it's $554 million.

Our team never gives up.

We always strive for the best possible result, and late achievement of Project 750 is our -- is at a minimum our goal.

We'd like to try and achieve it in 2020.

It's just that much tougher to do so.

So at a minimum, we're looking for late achievement.

And I feel really good about the ability to do that.

I mean, I've talked about all of these items: ticket yields from the increased pricing and just these higher-priced membership tiers, penetration of both members and season passes, in-park revenue from All-Season Dining, the North American expansion strategy and international.

So when I look at Project 750, it's a 8% CAGR from the end of 2018 to create -- to achieve that goal.

That, I think, is achievable, given our history, which is if you go back to 2009, a much higher growth rate.

In 2018, we've just completed 7% growth rate.

And assuming we achieve that goal, we will create $2 billion of shareholder value.

So the board has agreed.

We keep the project in place.

We're striving for that.

We're not creating something new, and we're going to go after it very aggressively.

Okay.

And Marshall, you mentioned about the dividend, that you intend to grow it every year.

Is that different than prior statements of high single digits?

How do you think about growing the dividend vis-à-vis most of the NOL expiring next year?

So the -- obviously, a strong and sustainable cash dividend is an important part of our value proposition to shareholders.

Our goal is to grow the dividend every year as we've done successfully over the last 8 years.

We raised the annual dividend this past year, 2018, by 17%, partially driven by the tax act in last quarter of last year.

And I think we'll -- as we look through what to do next year, it's -- we have to ensure that the shareholders value the dividend.

And so with a dividend yield as high as it is, it does appear that there's not a lot of value.

So the board's going to look at the dividend every year as they've done in the past.

And if -- I mean, we're going to grow the dividend.

Whether it's low single digits or high single digits, I think we'll assess that each quarter.

So I would just add to that, Ian, by saying, as a board, as a company, as a management team, we're absolutely confident in our ability to fund all of the operations of the company, invest 9% of revenues on capital -- there's no change in that, we feel very good about that level of investment and continue to grow the dividend annually.

Okay.

And then just one final question.

Marshall, I know you talked about the operating days, and there's a talk about operating days here.

But it seems like from this past quarter, like an operating day is not an operating day.

So an operating day in December that you have a park open is not as valuable as something earlier or closer to the summer.

Is this the right way to think about the business from an operating day's perspective?

Or can you give us maybe a little bit more granularity into exactly kind of what you'll see into next year, at least the first half of the year?

Yes, Ian.

So I went through the operating days just in terms of what's going to happen in the first half.

All operating days are not created equal.

And when we go -- when we think about adding days, there's a criteria for us, which is we want to make sure that it's incrementally profitable.

And so for instance, when we say we're going to grow over 100 days in the new parks, those are good days for the new parks.

But in terms of how it relate to a day at Magic Mountain on a Saturday or New Jersey on a Saturday, it's, I'd say, much less.

So the way we look at it is we're trying to -- we know when we're open, we sell memberships, we sell season passes.

And we've seen it with the fourth quarter.

We've seen it with days in the first and second quarter.

And so that's sort of how we think about it.

But all days are not created equal.

And I would add, just to build on that, Ian.

We talked a lot about what the company has gone through, and we continue to operate this way.

We look at every single park.

We get the teams, work with the teams closely to come to the conclusion as to how we can reduce the breakeven point from an attendance perspective, not just on an annual basis but on a daily basis so that we're never opening parks and having them open with guest levels that cause us to lose money.

So we're really, really disciplined about that.

So when we open, when we are adding operating days, we're going through that discipline.

Every now and then, you might have a day that's rough.

But on the whole, we've seen consistently where we've added these days, they are profitable.

But they may not be at the level that you would see at a Saturday or a Sunday or a more popular day, clearly, so we get your point.

I will also add that we've been very happy with how things have gone at Magic, with 365-day operations.

We continue to look at whether other warm-weather water parks should -- we should move to a broader schedule.

In 2019, we've actually opened Fiesta Texas in San Antonio year-round on weekends, so they're open on the weekends and on school holidays.

And we've expanded our calendar as well in Mexico, adding some additional days.

And we feel very good about potential success there.

And then over a period of time, we'll look at whether we go to longer operating schedules as a result.

But everything we do, and it's really important that you understand this, we are not looking at attendance growth for the sake of attendance growth.

We're getting attendance growth.

We're very happy about it.

But what we drive is revenue growth and profitability and cash flow.

And just look at our results: 9 record years, look at the performance.

Whether you look at our core business, you look at our newly added parks, which are a tiny portion of our overall company, you look at international.

We've got growth in every single area, in every single area.

And so our core business is extremely healthy, our organic growth is great, and we're seeing growth in those other areas, too.

So I think we're really well positioned for the future.

Okay.

I just want to make sure that expectations are kind of in line where we see 20% incremental operating days because it doesn't necessarily translate into 20% more revenues or anything close to that.

I think that's a good assumption, Ian, mainly because those days tend to be smaller days.

Yes.

I mean, really, we have an asset that's sitting there.

And we know if we open it up and we can make money on it, we're leveraging the asset more.

So -- but yes, all days are definitely not created equal.

And your next question comes from Steve Wieczynski of Stifel.

So first question would be around your membership program.

And Jim, I think you talked about this a little bit.

But not sure if I'm asking this the right way because I'm almost thinking about your membership program almost like a casino loyalty program.

But what I'm getting at here is, have you seen customers actively move up that food chain inside your program?

Meaning that they started Gold, they progressed to Platinum, et cetera, as they understand the extra value they're getting as they kind of move up those tiers?

Not -- I mean, not sure if I asked that the right way, and I hope that...

No, I understood.

I understood, Steve.

No, it's a really good question and very clear.

So I'd start by saying we're 1 year into the new membership program, so we've got enough information.

But obviously, 2, 3 years down the road, we'll be in a much better position to answer this question even more clearly.

What I can tell you is we are really happy in terms of what we're seeing at the higher tiers.

Our expectations when we started out were that the Diamond, Diamond Elite proportion of folks signing up would be lower than we're actually seeing.

So whether it's Gold, Plus, Platinum, Diamond or Diamond Elite, we've got very strong performance in all 4 categories.

And not only are people coming to us and saying, "I want to be in the Diamond Elite," we're also actively selling that both online and in-park.

And we find that in-park, obviously, where we're directly in front of guests, we're able to sell that upgrade much more effectively.

So it's been a pleasant surprise for us.

And we're going to continue to push very aggressively.

But this positioning has worked in our favor, I would say.

And it's part of the reason that you see such a strong per cap, and I believe that, that's something that's going to work in our favor long term.

Yes, so that was going to be kind of my second question was, if I look at the higher per caps in the quarter, is that a reflection of guests spending more?

Or is that just more kind of a true-up on the season passes or the membership?

So actually, that's a good question as well.

The fourth quarter, I think, is more representative of the power of the membership program because if you think about the third quarter and even the second quarter, we had the new parks that had a much lower per cap.

So we're actually very pleased with the performance in the fourth quarter.

There's not really any kind of catch-up.

It really is just our members have a higher price and the per caps coming through...

So admissions per cap up 8%, right?

[Yes].

And when you look at the in-park per cap as well, it's up 4%.

Historically, you would have argued that as more and more season pass holders or members join, they spend less.

But in fact, we're seeing them spending more because we've got incredible offers on those higher-tiered products, and they want to participate.

And they'll see a 50% off, and they'll buy something they would never have bought.

And yet for us, it's still a very high-margin sale.

So our goal, very clearly, is to further increase per cap as we grow our membership base and an increase penetration as well as the dining programs, especially memberships because all of those will enhance per cap over a period of time.

Now there is one offset I'll give you, Steve, and you've just got to be aware of it.

Especially in Q1, Q2, we're at a point where -- Marshall mentioned earlier that the new parks that we added, they will add costs.

They're not open earlier in the year.

So you've got a situation where there'll be some costs there.

But in addition, as they come online earlier, there is some per cap compression because their per caps are lower because they're primarily water parks.

So that's an offset to what I've just described.

Okay, got you.

And then my last question, if I ask the 750 question maybe a little bit differently.

You obviously moved that out to 2021, and you're assuming kind of 8%-ish EBITDA growth per year.

I guess what I'm getting here is if I look back at the last couple of years, you've kind of grown EBITDA more, call it, 4% or 5%.

I know last year, you did a little over 6%.

I'm guessing some of that was kind of related to the acquisitions.

But I know you're not going to give guidance.

But if we look over the next couple of years, could you maybe help us think about how we should be thinking about that EBITDA growth?

I mean, is that going to be something where '19, I think you maybe -- you might have talked about this, is a little bit lower, and then 2021 really starts to ramp up a little bit more.

And I guess the last part of that is, you don't have any other acquisitions kind of baked into that number deal?

So let me answer that, Steve, by saying what I said earlier, which is that when we look at the outlook, we're going to strive for the highest possible number no matter what.

Don't ever misunderstand that if we're getting an outlook as we have this morning.

We're still going after the highest number as quickly as possible.

That's our goal, and that will never, never stop.

But we're also trying to put this into perspective for folks, just as you've asked, so they understand what might be realistic.

And we really think that the 2020 goal, getting there is possible.

It's basically a 12% CAGR.

But it's going to be tough.

It's hard to get there.

Whereas 8% is possible.

We grew 7% last year at the adjusted EBITDA.

So we've got to get to 8%.

We do think because China is in a tougher situation right now macro economically, the whole country, it may be tougher in 2019.

That's why I described that as lumpy.

And I think that we are likely to see more modest growth in 2019 and then the acceleration thereafter that you described, Steve.

So we're not going to give you an exact number, say this is what it's going to be because we're going to go after the highest possible number.

But China in itself could be more lumpy.

Your next question comes from Tyler Batory of Janney Capital Markets.

So I wanted to ask a few on the international side of things, maybe first on China.

Can you talk a little bit more about your partner over there?

How healthy are they right now?

Maybe talk about the financing behind some of these projects.

Are there any potential issues as far as having enough funds to continue to do construction?

Yes, I would jump in, and then, Marshall, you just fill in the blanks.

We really have a first-class partner in China with Riverside.

And they've so far successfully navigated the political and the regulatory environment there, which you know is challenging.

But the issues that they have faced are being experienced by every other private company in China.

But I will point out that each theme park location is independent of the other.

Each will provide great economic value to the municipality and were approved by prior government.

So where -- I've talked about new government coming in.

They go through a process of assessing this.

So we very much believe and our partner very much believes the situation is going to improve.

It's likely to be probably the second half of the year.

And then at that point, we'll be in a position, I think, where we can move forward.

Marshall, do you want to add to that at all?

Yes, just, I guess, to say that our partner is -- he has a lot of assets.

I think, from a real estate perspective that Jim talked about, it's the liquidity, I think, has been tougher for other companies.

But he's in great shape.

There's some gap...

He continues to pay.

He's continued to pay us, and that's important.

So we're excited about the fact that he's in pretty good shape, although in a tough environment.

And I'm excited about the mid- and long-term potential.

I think the other thing, Marshall, is that it's -- and I would add this, Tyler, so it's important you know.

We are continuing to build those parks, and they are still progressing.

And they're not just parks.

They are -- there's much more beyond that.

They're entertainment centers, housing developments all around the park.

So that is ongoing as we speak.

Okay, great.

And then with Dubai on hold here, what does that say about potential demands for theme parks in the Middle East?

And I ask that specifically just, given you guys also have the project in Saudi Arabia penciled in as well?

Sure, and you're right.

We talked about the Dubai Park being on hold.

Our partner, DXBE, has had well-publicized financial and operational challenges with the first phase of the complex and has been losing money.

And I think you know from the last call that midyear last year, their board mandated a strategic review of the future development plans for Phase 2, which includes our parks.

So the announcements more recently or the fact that it's on hold, it's really been ongoing for a while as we discussed.

And it's something that we will work through with them and come to a conclusion.

It's clear from Phase I that there is great disappointment within Dubai as to the attendance in Dubai.

Now with regard to Saudi, this is a pretty wealthy country with a lot going on.

And I think that when you think about what has been described as the future, this vision 2030, it really is a major effort to liberalize the country and bring people not only to Saudi Arabia but also the folks within Saudi Arabia to be able to visit parks and to be able to entertain, find other ways to entertain, bring men and women together.

There's so much going on there that is positive.

And there's a lot of money behind us that comes straight from the Royal family.

And so we feel very confident about the opening of the park in Riyadh -- in Saudi Arabia and our ability to continue to work with our partner there to not only build this park but potentially other parks.

It's a very young population, very wealthy, they're moving to the cities, they have a lot of money.

I think that this will be a long-term success.

Okay, that makes sense.

And then just last question for me on the M&A side of things.

Obviously, you guys have done a number of smaller deals, which are very accretive, very attractive from a ROI perspective.

But when you look across the theme park space or maybe even other verticals, is there anything out there large scale or completely transformational that can maybe make sense for you guys?

Or anything that you think that could completely alter the growth trajectory for the company in a positive direction?

We look at small, medium and large deals, Tyler, we'll never stop doing that, and we do it on an ongoing basis.

We talked about -- both Marsh and I have described these smaller deals that we do because they're so easy, I mean, you might call them tuck-ins, easy to do, very low cost.

In some cases, no investment at all, just depends.

And we're able to transform those businesses over a 2- to 3-year period, they have a very, very fast payback.

So we'll continue to do those where they make sense.

And in a rational way.

And we contemplated that as part of project -- the Project 750 when we pulled that together.

With regard to bigger deals, whether they're medium or large-scale, we look at those, and it's certainly feasible that there could be major deals out there which we'll assess, but as you know, with any M&A-type deals, it's almost impossible to predict whether something will or won't happen or to ensure that it will happen.

So we are part of that -- of the process of looking at anything that comes onto the market, and we will continue to do so.

And certainly, over a period of time, in my mind, consolidation does make sense.

So it's something that I think will happen.

It's just a function of when and with who.

Your next question comes from Barton Crockett of [DCS Stocks].

And I guess what I was interested in was really a couple of things.

One of them is the membership.

So the membership impact, particularly in the first quarter as you're anniversaring the introduction, and some people are moving to month-to-month payments.

I was wondering if you could give us a sense of what portion of your membership base is actually now on the month-to-month?

And what impact that might have on the seasonally small first quarter where getting revenues -- where you weren't getting them before, could become meaningful over time.

This year might be too early for that, but next year might be very meaningful.

So if you could give us a sense on that and what it does to seasonality, that would be great.

And then I was also curious about the weather.

This is a quarter where we're not really talking about the weather.

And we talked about it a lot earlier in the year.

So was weather an issue for you this quarter?

I know there was a lot of wildfires down around LA, smoke in the Northern California area.

So that type of stuff as well.

Did that impact the fourth quarter?

And when you look out to 2019, you're talking about kind of a lower rate of growth.

I mean, in your minds, would you think that you have an easy weather comp next year that can help you?

So we purposely -- we've spoken before, we do try to avoid talking about weather, Barton and only try and bring it up when it's really significant.

Clearly, as our other companies in this space have talked about as we have, 2018 was tough as it has been for a couple of years.

In the fourth quarter, you're right, there were issues with regards to wildfires in California and elsewhere.

But when we pull up and look at the quarter overall, it's pretty much very similar to prior year.

It wasn't any better or any worse in the quarter.

The year itself was definitely much more challenging, given what happened in -- primarily in the third quarter.

But overall, I would say that it didn't have much of an impact one way or the other.

I bring you back to the fact that -- and we tried to say this, although sometimes weather overwhelms it.

We have 5 growth initiatives.

They allow us to grow under pretty much any circumstance.

While 2018 did see that really rough weather, probably the worst since I joined the company back in 2010, that sort of geographically diverse portfolio of parks has really helped us.

And I think those 5 initiatives has really helped us.

And this membership strategy that -- I'm going to ask Marshall to address that first question you had around membership, but the membership strategy in the recurring revenue base is going to be a core part of protecting us long-term and hopefully allowing us not to talk about weather at all in the long term.

So I feel like it's not relevant to talk about weather where we see no real impact.

If it's much better or much worse, we would cover it.

Definitely impacted the year but not the quarter.

Marshall, how about memberships and the question that Barton had?

Yes.

So I'd like to add, actually, that 2018 was a tough year with weather.

And while we can't control the weather or the macroeconomic environment, we do control our multi-pronged strategy.

And really the strategy delivered in 2018, in a very tough year with a 7% growth in EBITDA.

So moving on to the membership, we have, as we've mentioned, Active Pass Base up 8%, about -- and 31% in memberships, we have over 2 million members right now, a little less than half of them are beyond their 12-month compulsory period.

And really, those people -- the big growth in 2018 membership, those start to roll into post compulsory, which is that 13 month and beyond where we recognize the revenue monthly, that starts really the end of February, early March.

So late Q1, Q2, we'll start to get a lot of those people rolling into the 13th month, and we'll record that revenue whether or not the attendance comes.

So I think the memberships are really, really good, and that they do provide a weather hedge, and they'll continue to provide more of a weather hedge as people roll into their 12th month and beyond.

So Barton, we're not going to get -- I know you were hoping for a percentage or a number, we're not going to give you that.

But I -- you can probably tell from our voices, we are very excited about membership and what it's doing for us.

Because it really -- it is transformational.

I'd also add, and I apologize for not having brought this up earlier, but the loyalty program that we've got is really going to help as well.

Because not only do we have the membership that has all these benefits, but people love the loyalty program, and members earn points towards food, souvenirs, park tickets, one-of-a-kind-type VIP experiences, and they earn those points really primarily by spending money in the parks, and they're rewarded, they're literally -- their behaviors are rewarded.

So we think about what we want them to do.

And then we give points for those behaviors.

So not only does it provide information about our members, but more importantly, it helps to direct spending in the way that we want it to go.

That will be a very powerful tool in continuing this conversion to membership.

Your next question comes from Chris Prykull of Goldman Sachs.

I just had a couple of follow-up questions to earlier questions.

Is the financing for each park in China entirely in place?

Or does that need to be secured?

Well, the financing comes from many sources, including the federal government and the local governments.

And the -- our partner.

And our partner as well.

So what I'd say is that the -- there's -- that Riverside is providing the funding for the development of the parks.

They have the -- also have the ability to source additional funding from other lenders and equity investors as well as the government.

So as these parks progress on from announcement going forward, their dollars will be -- will come as they're committed, and they'll come as the parks are being built.

So the financing is in place, and the financing then gets expanded as time goes on and parts are -- parks are added on.

Got it.

Helpful.

And then just a modeling question related to thinking about international going forward.

I know that you mentioned it will be lumpy on a quarterly basis, I fully get that.

But was the $15 million charge in the quarter, was that a reversal of prior period revenue?

Or was that sort of just the impact, sort of stepping it back down to where we should think about the annual run rate going forward?

So if you think about the way the accounting works, it's primarily a fixed fee over a number of years.

And so whenever there's a delay, you would basically adjust and do accumulative adjustment in the quarter based on whatever that delay is.

So as we delay these parks 1 year and 2 in one case, it basically said, all right, if it's now 4 years, where is that on a cumulative basis, what should we recognize and the adjustments made?

But looking at it another way, we've been right at about $16 million a quarter, we were at roughly $2 million this quarter.

So it's sort of -- it all hit in the period.

But that's just generally how the accounting works.

In other words, what you're doing is you're stretching the project timeline.

So it's mostly fixed revenue that would've been coming into the company, but because it's a longer period before the park opens, you have to stretch that.

And so it's primarily an impact in the quarter, but there's a little bit that might fall into earlier in the year.

Okay, that's helpful.

And then quickly on Dubai, will you be recognizing any revenue from that park going forward?

Yes, we will.

Right now, it's on hold.

But based on the timeline we have, we'll recognize revenue until there's a decision made as to whether it continues or it cancels.

Got it.

And then quickly on cash taxes, can you maybe just remind me how should we think about cash taxes in 2019 and beyond?

I think this year is sort of the last year where you will materially benefit from NOLs, I know you had some smaller benefits until 2023, just curious how we should think about that over the next couple of years?

And how you all are thinking about stock buyback as cash taxes move higher?

So the tax reform bill was extremely good news for us and our shareholders because we do return all of our excess cash to shareholders through dividends and stock buybacks.

In terms of federal taxes, we paid minimal federal taxes in '18, and we expect to pay the -- about the same rate in '19 and '20.

In the beginning of 2021, we expect cash taxes to ramp up through 2024, when we'll be a full taxpayer.

So I think in terms of share buybacks, while we're not going to give you a number, we're going to -- obviously, we're going to pay our dividend and then with whatever cash we have left after funding our capital, the rest of the cash from operations will go back to share buybacks.

And I think it's very important that we build on what Marshall had said earlier.

We -- and I had then come in, and I talked about the fact that we're going to generate as much cash as we can.

Generating that cash allows us not just to fund the operations of the business, to fund 9% investment incrementally in capital, it allows us to pay our growing dividends, which our investors do value, and we think we will continue to grow that successfully for the foreseeable future.

And then anything that's left, literally, anything that's left, will go, Chris, to buybacks.

And your next question comes from James Hardiman of Wedbush.

Sean Wagner on for James.

Understanding that a 4Q operating day isn't the same value as a summer day.

From a year-over-year perspective, the 3% attendance growth in conjunction with the incremental park days would seem to imply kind of some weakness, maybe attendance-wise, at your other parks, is that the case?

Or if there was any weakness at the legacy parks, can you give us an idea of what park?

I can assure you that there was no weakness at the parks, at any parks.

We had very strong growth pretty much consistently across all the parks.

Go ahead.

Yes.

I think if you look at -- we grew the fourth quarter attendance.

If you just look at the core parks, we grew revenue both for the quarter and full year, we also grew adjusted EBITDA in the quarter and in the full year.

So -- and we're really driven -- what we're looking for is revenue and profitability.

We like attendance, and we think -- attendance, certainly in the third quarter when we had weather, would have -- could have been better.

But ultimately, we grew revenue, we delivered 7% of EBITDA for the full year.

But even if you strip out all the new parks, we grew the business.

So the core business is strong.

It's growing.

And I'd say that 2019, we will continue to do that and continue to grow the business.

And, Sean, I would just add to this, it's really important that everybody understands this.

The Fright Fest and Holiday in the Park franchises are booming, and they will continue to boom.

And so smart moves by us to add days or target incremental revenue, it's the right thing to do.

It's part of our organic business to do that.

So whether you include it or not, we had a very strong fourth quarter across all categories across all parks.

Okay.

And then I guess is there any color you can give us on the admissions and in-park per capita growth for the quarter?

And why those outperformed the rest of the year?

Sure, we talked about it a little bit earlier, but why don't you hit this, Marshall?

Yes.

I think it's actually -- it's more representative to the strength of memberships and what memberships are doing both in ticket and in in-park.

In the previous parts of the year, really, the per caps were getting pulled down by the fact that we had all the new parks.

They do have a lower per cap, 3 of them are water parks.

So I think that really is what drove it.

It's -- if you look at in-park, it's the highest spending from members.

It's the new culinary and retail offerings for Holiday in the Park and our All-Season Dining program.

And we've had those all year, they've just been muted somewhat by noise from the other parks.

One other thing to add on, Marshall, that I think is really important is, like when we add on extra days, they sell memberships as well, right?

And they also help fuel per cap growth.

So we're going to continue to work this very, very actively, Sean.

We're smart about this.

We're looking for breakeven points per day, and then we're looking at driving revenue and profit and cash flow.

Okay, and just finally, I guess touching on that, taking a step back to the growth that you talked about for 2019, are you able to kind of size the drivers or give kind of a -- size the buckets of the revenue growth from an attendance admission per cap or in-park-per-cap perspective?

What kind of -- which of those do you expect to be the kind of the bigger drivers of that?

So I've already said that international is likely to be lumpy.

So I probably have that -- it's not that I'm trying to predict that this will be the case.

But that would probably be the lowest in terms of growth driver.

North American would probably then be next in terms of the list only because where we are going to add some more days that we weren't able to take this year for the 5 new parks.

But it is smaller days, and so it's going to be a positive, but there's also some headwinds there with cost as we described.

Then you move into what I would call the top 3. And I think that I would rank them, and Marshall may come back and say, "Jim, you're wrong, I'm going to disagree with you violently." But I think that the membership program is going to be our biggest driver.

It will drive not only our ability to succeed in terms of growing attendance, but it will drive our ticket yields as well.

So I think that membership move is big.

I will continue to increase our Active Pass Base and do that in a sort of relentless way.

Then I think the pricing -- pure pricing will be something that we'll continue to focus on.

We've tried to take price up 3% to 5% consistently, we've been successful with doing that.

We'll do that.

And then the final piece, which is my favorite of all, I would say, the whole in-park piece, growing that.

And especially with our dining pass penetration, pushing people to memberships there, that is having an effect not just on the culinary side, but it's having an effect on retail, [games] and our All-Season programs.

So if you made me rank them, I'd say membership/attendance first, followed by pricing, followed by in-park, primarily culinary, North American and then international.

Do you disagree?

No, I think that's right on.

I -- For me, it's -- I mean, the memberships are really driving the per cap growth.

They're going to be -- they spend more.

They -- the rate is higher on guest satisfaction.

Their in-park spending for -- on a gross profit level is higher, and it's higher as they move up the tiers.

So I think memberships drive a lot of what Jim talked about.

And so I'm very bullish on 2019.

Your next question comes from Brett Andress of KeyBanc Capital Markets.

I just -- I had a follow-up on the term lumpiness that's being used a lot on the international revenues in '19 that you talked about.

Can you just elaborate a little bit more on that for our models?

I mean, is it down in the first half?

Is it up in the second half?

And I guess before today, you were running about $15 million a quarter on that line item.

So what is the new kind of steady run rate, given where we're at now?

So I just -- before Marshall answers this question, I have to tell you, Brett.

I think you might remember this, but we have used that word lumpiness now for 5 years.

People do understand it, but it is an odd word, I would agree with you.

So Marshall, do you want to talk about how to think about this?

Yes, we're not going to give you guidance, we don't provide guidance -- near-term guidance.

But the way to think about it is over the next 6 months, there is -- I think there could be some lumpiness, to use the word again but while they get through this tougher period in China and then I think it could come back after that.

It's -- and I think we'll just have to, each quarter, give a little more clarity based on what we know at the time.

Okay, no, that's fair.

I just think lumpiness has a more pronounced meaning this time around.

But -- And then lastly, do you have any visibility into maybe when Dubai could make that decision to, I guess, kind of stop the contract?

And is the revenue that you're recognizing there lower than what you've recognized in the past on a go-forward basis?

So we have no way of knowing for sure when Dubai will make that -- any decision one way or the other.

And it's not that we're trying to avoid the question, Brett.

It's just that they are an dependent public company.

And I think the biggest shareholder is Meraas, so there's a fairly big group involvement there.

And in that situation, they are trying to determine what to do, not just with our park, our park is part of the Phase 2 broader investment and operation.

So the issues primarily relate back to their Phase I launch, which includes 3 other parks and disappointment there.

So it's a fairly major project they're working through that we have very little ability to impact one way or the other.

So I'm not going to try and predict dates or say it's going to be done by this point.

Our hope is that we can get the situation resolved quickly, but again, we promise that we will tell you once we know for sure one way or the other.

So you want to take the other part there?

Yes, so it is going to be a little -- first of all, remember it's our smallest theme park by far -- we did delay the project in the fourth quarter based on the fact that there's just not a lot of construction going on right now.

That does impact the revenues as I kind of discussed earlier, that we need to delay it 6 months.

You -- The revenues do go down per quarter a little bit, but it's minor.

And they're fully paid up, and we'll continue to record revenue until we come to an agreement with them.

And we'll be very cautious on that front.

We're not going to get ahead of ourselves in any way with Dubai.

We wouldn't do that, given the circumstance.

So again, we will work through this and get to the right result ultimately.

Brett, were there any other questions that you had?

Yes, actually, I'd like to squeeze one more in.

I just -- I think I wanted to better understand specifically what you and your partner in China think -- it sounds like you guys think things will get better in the second half of '19.

I guess, what specifically are you looking at?

Is it more China macro?

Is it more specific to the market where those parks are operating?

Just any more color why the second half [confidence].

So Brett, I've got to be completely transparent with you and say that if I was to say I know everything about China, then obviously I'd be lying.

I don't.

I've spent a lot of time working in China with the Chinese going back more than 30 years.

But I am certainly not in a position to predict exactly what's going to happen.

Our partner is in a much better position.

And in our discussions with them, including my discussions with them, it's been very clear that they feel that this is a timing issue.

Part of it is the bigger macro picture with China.

Part of it might be the trade issues that have been ongoing all the time over the last few months.

These have not helped.

But there has been a slowdown overall.

We saw it -- announcements from Apple, GM, you've seen it.

Our partner's view is that it will take 6 months or so to get through the process, and the process is impacted by multiple things.

It's as simple as the economy starts to improve, which we can't predict.

It's governments having time to review and reapprove plans, which they can predict, and they've got estimates on each of these projects and saying this is how long it's going to take to get there.

It's also -- once you get that reapproval, government funding kicks in.

So it simplifies the process there.

And then finally, they've been looking actively at lending restrictions and really being in a position to loosen those lending restrictions, which in itself will also help the real estate market.

So I can't say definitively this is the answer, it's going to be exactly 6 months or anything like that.

But there's a strong view that, that's what it's likely to be.

Your next question comes from Brennan Matthews of Berenberg.

I just wanted to ask about kind of the pricing.

I mean, clearly you guys have had great success ticking up pricing in recent years and said you feel comfortable with 3% to 5% pricing increase kind of in the next coming years.

I guess, maybe what gives you confidence that this is the right level, like for instance, it couldn't be either maybe a little bit higher, even a little bit lower?

Just maybe interested in a little color around that.

Sure.

Happy to provide some color again, both Marshall and I will talk.

But I would tell you, Brennan, that fundamental assessments of pricing are ongoing at the company at all times.

We have a really amazing research team that gets information daily from our guests on reactions to pricing.

And we register research on this front with regard to value perception.

And value perception has gone up literally 9 years in a row now, and that is a key indicator on pricing.

And so when I look at our approach to pricing at a 3% to 5% that I talked about earlier, the shift to membership, which indirectly gives you pricing.

These things are all working in our favor, and we see no reason to pull back.

Now if you were to say to me, "Jim, well, why don't you make it 10%, 12%?" You -- Because you haven't been involved right from the beginning.

I used to talk about this early on in our calls.

Prior management decided to try and take much more aggressive pricing increases, trying 15% -- 10%, 15%, 20%, which had a really negative effect on our guests where they felt they were being gouged, and we saw an impact on attendance.

So we will never do that.

We try very hard to take pricing where we can the right way, and we think we're successful.

We have a successful approach, and it's like a silver bullet, and we've just got to keep working it.

Yes.

Jim mentioned the research team.

Whenever we go and decide whether we're going to go up 3%, 5%, 7%, we test it.

And we're focused really on revenue and profitability.

And we'll do a lot of tests with thousands of real guests over a few days and see did $1 raise more revenue or $2 or $3?

So we don't just make decisions blindly and hope for the best, we actually test it.

Your final question comes from Ryan Sundby of William Blair.

I guess, given the hold in Dubai and the delay in China, has your conversations with other third-party partners kind of changed, and/or have you thought about -- do you need a structure that deals differently, maybe put more emphasis on completion of the park or something like that?

Just curious if there's kind of any change there on your part?

No, I have to tell you that there have been no changes in terms of the discussions.

Those discussions have continued.

And we're literally talking to various people and will only execute deals if we feel that all of the parameters are right and that they meet the financial expectations that we have and that they have.

I would reinforce that not only are those discussions ongoing.

I can't predict when we'd be able to announce anything.

But we will as soon as we know that we have a deal.

And I would add that this -- the international revenue that we've got has been growing.

It's still incremental to our core business.

And it's a strategic advantage to any other player in the industry.

We have not only a national plan, but we have this international growth plan that's been very, very successful.

Yes, I mean, it's a very strong, attractive long-term strategy so...

As you think of Project 750, I guess, is there a way to think about how much of that is international?

And does that include additional international deals?

Or do you get there with kind of your current, I guess, park portfolio?

We always assume that the 5 different imperatives that we listed have an impact on the 750 target.

And so there is an element that's related to the international growth.

We'd like to be in a position to pick up 1 to 2 parks per year, that's a goal that we would have.

But trying to actually predict exactly when parks will come is very hard to do.

So we look at the 5 imperatives and we say we want all 5 of those to grow at a much faster rate.

Because we know that 1 or 2 may falter, right?

You can't just assume everything is going to go perfectly right.

So we assume that 1 or 2 may go wrong.

And we try to make sure that the others grow.

So when we look at the side that I talked about, whether it's ticket yields, pricing membership, in-park revenue, the North American expansion strategy and international, I listed out earlier, when asked the question, what I thought the sort of -- the important, call it, 1 to 5, from top 1 down to the bottom 5 in terms of likelihood to contribute.

And you may remember, I think international will contribute.

But it's probably going to be the smallest contributor.

That would be my view right now.

Is that for 2019?

Or is that through 2021?

I am saying that when you look long term, we never counted on international being the strongest growth driver ever.

It was always a piece of 1 of 5. And we've pretty much always ranked them almost in the order that I gave you today: that #1 would be driving our attendance through season pass and membership; #2 was always pricing; #3 was always driving our in-park spending.

So the ranking has never really changed.

And I still believe that ranking to be the same.

There are no other questions in queue.

So thank you very much.

Six Flags is the best and most innovative operator in the regional theme park industry, with the highest margins among its peers, strong recurring revenue and cash flow and a seasoned and reliable management team.

Please visit one of our 26 parks in 2019 to experience them first-hand.

Better yet, please buy one of our amazing memberships.

Thank you very much for joining our call today and more importantly, for your continued support.

Take care everyone, and thank you, Shelby.

That closes our call.

Thank you for your participation.

This concludes today's conference call.

You may now disconnect.