Six Flags Entertainment Corporation (FUN) Earnings Call Transcript & Summary

[Presentation]

So good morning, everyone. My name is Michael Russell. I'm Corporate Director of Investor Relations. Welcome to the Six Flags Investor Relations Day 2025. Thank you for your interest in our company and for taking time today to learn more about the Six Flags story. For those of you joining us via webcast, our presentation is taking place at the historic Hotel Breakers at Cedar Point in Sandusky, Ohio. I would be remiss not to mention that Cedar Point was founded in 1870, is the second oldest operating amusement park in the United States and has been heralded as the roller coaster capital of the world. Hotel Breakers was constructed in 1905. When open, this beachfront property offered 600 rooms and together with Cedar Point, became a major leisure attraction and vacation get away on the Lake Erie shoreline, where it has hosted four U.S. presidents. Nostalgia aside, our goal today is to share broadly the excitement we have about our company's future. The highlight -- to highlight the potential, three members of our Six Flags executive team will deliver our presentation and answer your questions. They are Six Flags President and CEO, Richard Zimmerman; Chief Financial Officer, Brian Witherow; and Chief Commercial Officer, Christian Dieckmann. As you can see from today's agenda, Richard and Christian will kick things off, followed by our first Q&A session and a short break, after which you will hear from Brian, followed by a second Q&A. Richard will wrap things up with some final comments. Before we begin, let me remind you the comments made during today's presentation and Q&A sessions will include forward-looking statements within the meaning of the federal securities laws. These statements may involve risks and uncertainties that could cause actual results to differ from those described in such statements. For a detailed discussion of these risks, you may refer to the company's filings with the SEC. Finally, please note that all content included in today's discussions will be considered fully disclosed. With that, it is my great pleasure to introduce our President and CEO, Richard Zimmerman.

Good morning, everybody. Thanks for being with us. Great to see the friendly faces here in Sandusky, and I'm glad we got to spend time together, walking the midways, showing you a lot of what we're going to talk about today and then spent time last night reiterating some of our messages. When we talk about this merger, we've talked a lot over the last almost year with investors far and wide. As part of today's presentation, what we're going to touch on are many of the things that are on top of mind with investors, including how the integration is going and our outlook for the business through 2028. So I want to be clear. We've heard you loud and clear that things you're curious about and the things we need to articulate about our vision going forward. As we approach nearly 1 year in the merger, I keep getting the question why do you want to do this deal? We talked about it yesterday as we looked around, I will tell you, the more we got comfortable looking at the combined company, the more that what we saw was that there was great value it could create and that we could do things as a combined company that neither legacy company could do on their own. It's clear that the new Six Flags is stronger and more strategically positioned than either legacy company. This is a fundamentally different and fundamentally stronger company. We're making great progress integrating the two companies, and we're driving cost synergies. We're paving the way for a better guest experience. You saw a lot of that yesterday, and that will drive attendance growth. We have the best team in the business, and we're unleashing the next generation of leadership in the company. I'm really excited about that, and you got a chance to meet a bunch of them yesterday. And we've got a very clear path to reducing our leverage with ample room to keep reinvesting in the business. Our leverage is higher than certainly I would like, and we're going to get that down. Not only is this a different business, but in addition to executing a really powerful business model, we're going to deliver transformation. And as you look at this value creation flywheel, you can see that it starts with growing revenue at a faster pace than either legacy company, while generating 50% more cost savings than the merger target and resetting our cost base. We keep talking about the next 18 months being a reset, the great reset. It really is going to be that. We're going to get leaner and stronger. We're going to generate free cash flow that we can reinvest in the business but also pay down debt. That will let us reduce our leverage to below 4x by the end of 2026. Once we're below 4x, we'll have the capacity and flexibility to return cash to our shareholders and create value going forward. I know what many of you are wondering about, what does all this lead to? And what do we think success looks like? Let me tell you, by 2028, we're targeting 58 million in attendance, almost 60 million, 58 million attendance and $3.8 billion in revenue. I need to point out that in these numbers, we've already announced the closure of Six Flags America, so that attendance drops out. And per our lease payment on the Santa Clara park, we can only operate into '28 and beyond if we extend that, which we haven't done yet. So those numbers drop out. When you combine the attendance and the revenue growth with rigorous cost management, we can deliver $1.5 billion in adjusted EBITDA, and we can deliver a 40% margin. We think there's a very clear path to 40%. The next 2 years really resetting our cost base, focus on cost, drive the margin, expand it. You look at the third and fourth years, we're really driving revenue, and that's the momentum that takes you home from there. Brian will talk a lot about that in his remarks. I'm going to be talking about four topics today. The first is the strong foundation of the combined company. We are the leading regional amusement park operator, operating in North America with 42 parks, and we entertain almost 50 million guests. We are the unrivaled leader, and we've got almost 250 million people within reach of our parks, paving the way for future growth. We didn't become a market leader by accident. We know how to run parks better than anybody else. It's in our DNA. I've been doing this for almost 40 years. And it seems like not just for me, but for my team, all the things we've done up to this point in our careers have prepared us to be in this spot at this moment and deliver on the potential of this merger. It's really in our DNA. So let me talk about some of the proven strategies for success. We are committed to delivering a high-quality experience and investing in our parks to make sure that we get long-term growth. Products like memberships, season passes and all-season add-on secure advanced purchase commitments and make sure that it provides stability to our revenue base that people come even when the weather is iffy. We talk a lot about food and beverage, renovations of our existing food locations provide a really capital efficient way to improve capacity and drive incremental transactions. You saw a lot of that yesterday. And we talked a lot about transactions, do an incremental transaction but also higher average transaction values. And lastly, we're using technology to take friction out of the guest experience to make it easier to buy things, including upgrades. We'll roll out a new version of our mobile app during the month of July. Key element of our strategy, you saw it yesterday, many of you got a chance to ride the Top Thrill 2. You saw Siren's Curse here at Cedar Point, which opened in mid-June. Key point is investing in big thrill rides, especially exciting new ones, like we saw yesterday. Big thrill rides have a great big impact on our business. So let me give you a peek under the covers. As we look at average year 1 returns, you can see that when we put in a big thrill ride, we create double -- we generate double-digit growth in attendance, double-digit growth in revenue, much higher adjusted EBITDA and a 30% cash-on-cash return in year 1. For example, and I'll tell you things today that we normally don't share with you, but I think it's important that you know. In 2019, when we introduced Yukon Striker at Canada's Wonderland, we saw a nearly 30% lift in adjusted EBITDA at that park. Everybody in Toronto came out, everybody wanted to ride it, and everybody talked about it and told their friends to come. Second topic, I want to talk about is our unique positioning. Our parks, much like Cedar Point you got a chance to see yesterday, are beloved icons in their regional markets and offer the benefit of stable revenues with very steady growth. As Michael said, Cedar Point has been around for 150 years plus. That's the definition of stability, and it keeps growing. The last 2 years at Cedar Point have been record EBITDA years. So 150-plus, still growing, still providing that steady growth. The scale of what we do provides a strong barrier to entry. There hasn't been another new -- another successful regional amusement park built in this country since the 1980s. So these are irreplaceable assets. We still have a number of underpenetrated markets where we think there's significant growth, and we were in all of the top 10 major DMAs. And our footprint across North America provides diversification. The first advantage is the market we play in, a sector with long-term tailwinds. As you can see, the market value for our sector is projected to grow at almost a 4% CAGR over the next 5 years. So it's a valuable sector that's going to grow. Second, the resiliency of our business model, and we talk about this all the time, is built on a strong, steady and stable and recurring base of revenue. 70% of our attendance comes from season pass and from group sales. That's booked in advance, and they show up. Now I don't think we always get credit for that because I think everybody wants to know that Brian Witherow comes back year after year. We sold over 7 million season passes on the combined company last year, that will grow, and Brian may buy every other year, but Christian will buy every year. So we've got a great steady base of business. You come with your grandparents when you're young, you come with your friends when you're teenagers, you bring your date here when you're a young adult, and then when you have kids, everybody comes back. That's the lifetime customer that we enjoy. Combined with resort bookings, these advanced purchases really mean that everybody does show up. I'll give you a great example. Opening day here at Cedar Point, yesterday was a great day, weather wise, little chiller today, it was 47 degrees like it is out there today, but wind was whipping up and the rain was coming down sideways. We had almost 20,000 in the park that day. Hotels were full. We've seen great advanced bookings over the last few weeks, but they still came out to enjoy opening day, and it shows you the power of the regional icons we've got. One of the things we don't talk enough about is the value proposition we offer. You'll hear me talk about focusing on value versus price and continuing to drive value so we can take price. When you compare us to other major forms of entertainment, we compete for people's leisure time and their leisure dollars versus sporting events versus concerts. We're very attractively priced. That gives us both headroom to take price as we continue to get value, but it also protects us in the event that there's a downturn in the economy. If we're the more affordable, the close to home, more convenient alternative, that makes us very valuable. We are well positioned to face any near-term recessionary challenges. I know we've all talked about the health of the consumer. We get that question all the time. When you go back to '08, '09, we've had a very quick recovery. When you look at COVID and the pandemic, we came out very quickly. We have an ability to dial a lot of different levers. If things go down, we've got different cash levers within the business. We can reduce capital a little bit. We can thin out a little bit of our OpEx, compress the operating calendar. We got a lot of levers, which we use if there is a downturn. But I'll go back to '08, '09. The example I'd give you that we talk about all the time, we didn't pull back capital in two of our parks in '09, Cincinnati and Kansas City, both those parks put in new coasters and they had a record year in the midst of the '08, '09 melt down. It's really important to understand that if we give people a reason to come out and they're not going to Orlando, they're not going to cruises, they may not be taking vacation, we're where they're going to spend their summer. I touched on this earlier. You can see the footprint. We talk about how dominant we are in the top 10 metro areas and you can see that we're near every major area. I also like the white space in between all the blue space. That's the drive market I talked about, 250 million people within a day's drive of our park. Fourth, we've got a line of sight to grow in attendance by over 10 million over the next year. This is achievable. It's based on realistic park level assessments, not speculative market growth. Growing our large under-penetrated parks to half the level of the highest penetration locations gets us to 10 million, gets us back to 2019 levels. And there's growth beyond that on the penetration levels. The other thing, and this really talks about the business model. The fifth unique feature is how the merger has helped derisk our business model. No region makes up more than 30% of adjusted EBITDA, no park makes up more than 20%. This benefit to our investors should not be underestimated. When you look at the portfolios of each legacy company, each was very much concentrated. This footprint really gives us a lot more diversification. All right. Now let's turn to the integration. Everybody's always asked, how is it going? Well, in a word, it's going great. Are we on track? Absolutely. One year in, we took some time to really peel back the layers, and we put these two companies together, and we're making tremendous progress. We've really accelerated a lot of things. We're on track to significantly overdeliver against our initial cost estimates. We're seeing very positive early trends in guest satisfaction. We like the trends we're seeing in attendance and overall revenue, and we're making great progress on our portfolio optimization efforts, including real estate deals. We talk about portfolio optimization. This is something that is available to the combined company that wasn't available to either legacy company. It's hard to look at either legacy company and say we want to grow by shrinking. But we've isolated and identified some real estate that we think can be monetized. That process started last fall, particularly in Richmond. So we're well underway there. We announced the D.C. park transaction so that we could start that process. We think it will be about 12 to 18 months or longer, but we want to intersect between the value we get and the time it takes to get there. Entitlements are a very big part of that process. Important to note, we don't need to do portfolio optimization to get the leverage down. This is -- this would sit on top of anything we do. We think we can delever through the normal course of our business. Really, three objectives for the portfolio optimization, simplify the operation, concentrate the focus of management on the high-growth parks, and then lastly, make sure that in those high-growth parks, we're accelerating things as quickly as possible. When you think about the overall portfolio, the top 15 locations make up more than 80% of our tenants and our revenues. It's over 90% of the EBITDA. The remaining locations are valuable, great cash generators, strong, steady performance, but they're in smaller markets and don't have the same growth potential. So we're going to look at whether or not there's an ability based on market conditions and based upon the value we can get, an ability to monetize some additional parks. But right now, we're really comfortable saying we're going to operate all of our parks this season. Some of the smaller parks had some challenges last year. We think they'll perform really, really well. So if we are going to monetize anything, we want to make sure we get value for it off of a strong '25. Lastly, what's our strategy to drive sustained growth? There are five pillars for profitable growth, Brian and Christian will touch on. First, improve the guest experience, drive higher demand and drive higher attendance. It's all about attendance. Second, monetize that demand by leveraging pricing and leveraging and optimizing the revenue. We saw a lot of that examples of that yesterday. Third, focus on increasing in-park revenue by growing transactions and average spending levels. And lastly, Brian is going to provide more detail on how to -- how we're going to optimize the cost structure, get to that 40% margin, which we think is the right target and which we think is achievable and take advantage of the operating leverage to make sure that we generate significant free cash flow growth. So that's the big picture. The takeaway, we're a different and stronger company. We've got a very clear strategy. As I said, most of us have worked our careers to be in this spot at this moment, and we've got real momentum in the business. We like a lot of the early green shoots and the proof points we've got, and Brian and Christian are going to talk a lot about that. So with that, let me turn it over to Christian.

Thanks, Richard. Good morning, everyone. My name is Christian Dieckmann. I'm the Chief Commercial Officer at Six Flags. Really excited to talk to you all today about the path to revenue growth for the combined company. Enjoyed the conversations we had yesterday during the park tour and during dinner. I think you'll hear a lot of the same themes that we were talking about last night today. So today, I'm going to talk about the two main drivers of revenue growth in the years ahead. The first is going to be expanding attendance. The second is going to be growing in-park revenue. The strategies I'm going to walk through are going to deliver nearly $4 billion of revenue over the next several years. And this represents about a 6% organic revenue growth CAGR, which is north of what either company was able to do on a stand-alone basis in the core business. Brian is going to spend a little bit more time in his presentation talking about what all of these different tactics are worth, but I'm going to focus on what the core strategies are and some of the KPIs that we're monitoring and managing on a daily basis. So first, expanding attendance. A few items I'm going to talk about here, how big is the opportunity, how we're going to approach this, I want to talk about marketing and CRM. I'm going to talk about the regional passport. I know there's been a lot of investor interest around that. And then how do we use capital to drive the business. So as Richard talked about, we're going to regain 10 million guests that were lost during the pandemic period. We know that we have ample capacity in these parks and in these markets to do that. Of the 15 parks Richard mentioned that comprise 80% of attendance, only 4 of them are actually higher than their 2019 attendance levels, so we know we can get there. Why are we confident about regaining the attendance? This slide shows the market penetration rates at all of our large parks. So I think something that you might be surprised to see is the wide level of variance between the market penetration rate of these largest parks. And there are a mix of legacy Six and legacy Cedar Parks in both of those high penetration, low penetration categories. But if we can get the penetration rates at the highest opportunity parks just up to the second quartile average over the next several years, that's 10 million in attendance right there. If over the longer term, and we're not saying this will happen overnight, we can get them to approach more of that top quartile average. And we do believe that's the long-term opportunity here. That could be worth more than 30 million additional visits than what we're getting today. So needless to say, we're really excited about what that opportunity is. Let me bring a couple of tangible examples to mind here. We'll talk a little bit later about Magic Mountain. That park is doing half the attendance rate at Knott's. There's a few million of attendance opportunity if you compare what Six Flags Fiesta Texas is doing, which has got a great penetration in its market versus Six Flags Over Texas. And then the third one, I'd call out, would be Six Flags Over Georgia if we can get it up to Carowinds penetration rate. Those parks alone, that's -- that would be 7 million in incremental attendance just right there. So we are very confident about our ability to do that. So you might say next, that sounds fantastic. How are you actually going to close the gap? What this slide shows is the correlation between our guest satisfaction at a park, which we track on a weekly basis by park and the penetration rate. So let's pause here for a second. I want you to guess in your head, which park you think has got the highest penetration in the portfolio. I'll give you a hint. It's not Cedar Point, it's not Knott's Berry Farm. It was the highest penetration rate park in the legacy Cedar portfolio and also the highest penetration rate in the legacy Paramount parks portfolio. So if you guess Kings Island, you'd be correct. I don't know if anyone got that one, but McClure back there did. So basically, the goal is here as we move parks over to the right on the guest satisfaction front, it will push them up along that arrow. And so that's how we're going to drive the penetration. So what drives guest satisfaction? It's all about FUN right there, right? So part of it's the software of what's going on in the park. If we can get you on a few rides and we can serve you quality food that's readily accessible, we know you're going to have a good time. Of course, the weather has got to be sunny too, which as Richard just shared is one of my job responsibilities now. So I think I did a pretty good job yesterday on that one. The second one is about compelling capital. We like to have a rotating mix of family, thrill and water park rides, put in events, put in food and beverage like you saw yesterday, it's that consistent compelling capital over time to get the guests to come back more and more and helps broaden the audience, which is going to help us drive that penetration. And lastly, it's about our events, our Seasons of Fun strategy, which create an urgency driver but also give a reason for a season pass guest to visit multiple times, which enhances the value there. Really excited, for example, what we done last year with the Fright Fest. We've introduced horror film IP at the legacy Six Flags parks. It was a huge demand driver, created a great guest experiences. And I think you can expect us to do more things like that in the future. Really excited about that. So next, I want to talk about a case study on how we're able to drive a lot of attendance and EBITDA growth in a park over a short period of time and then continue to sustain that growth from there. Knott's Berry Farm saw a dramatic growth in the 2012 to 2016 period. We focused on the guest experience at that park and saw a dramatic improvement in all the key indicators. We invested very heavily in family attractions, including a major double-digit million expansion of Camp Snoopy in 2014, which you can see in the picture here. And since 2012, Knott's has tripled its EBITDA performance, and we've been able to have sustained growth over a decade. I think that's the opportunity we have at other parks. So now let's contrast that with Magic Mountain. Similar market, there's 16 million people within a 75-mile radius of Magic Mountain, huge opportunity to drive penetration there. Attendance has actually declined by a cumulative 15% since 2012, and we think we can double the penetration rate there and double the attendance to get to Knott's level over time. Already doing the first steps to -- on that journey, we've made a double-digit tens of millions going into Hurricane Harbor, the water park there. We've got thrill and family attractions planned out for future years, and we're really excited about what that potential is. But it's not just a Magic Mountain. There are other parks, Six Flags Over Texas, Six Flags Over Georgia, Chicago. There are many markets that -- New Jersey that we're really excited about the growth potential. So how do we know are we moving in the right direction here? What we've got here is that the guest satisfaction scores of the high penetration parks versus that of the smaller -- the lower penetration parks. And you can see there's a gap there, but we've already been able to start closing that since the merger occurred. So that's an encouraging green shoot for us. Next, I'd like to talk about our efforts to drive guest visits using our CRM capabilities. We really began building out our CRM capabilities over a decade ago. We're on our fourth generation CRM platform. So we've been doing this for a while. And by implementing different tactics at every stage of this marketing funnel, we can upsell guests from day tickets to season passes, we can get them to renew their passes and we can ultimately drive visits per pass with target offers to really get to that attendance potential. Also very excited about the CRM platform will be the underpinnings of the work we're doing around a loyalty program, which we hope to introduce more broadly next year, and we should have a really big impact in 2026 and beyond. So I know another thing that we've talked a lot about, I know there's been a lot of investor excitement about is what does the combined footprint do from a potential for multiple park visit system. So we've already seen some -- been able to offer an All Park Passport that gives guests access to all 42 locations that we've seen some nice uplift there. But what we're maybe more excited about is the opportunity around a regional pass. You can see all the clusters across the system where these parks are pretty readily drivable. So I'll take where I live in Charlotte, right? We've got Carowinds, I'm very often in Atlanta for kids sports tournaments or going up to D.C. to do something. So you can visit other parks like Over Georgia and Kings Dominion in a very close radius. We think that this regional pass model gives us a lot more pricing flexibility than we might have on the national pass, and we think we can get a much higher capture rate out of our guests with this product. And then lastly, for the expanding attendance section, I just want to touch on our capital program. We've got a really compelling lineup at 11 of our largest parks this year. You got to see -- and some of you got to ride TT2 yesterday. Siren's Curse will be opening soon. I think the level of technological innovation and how we're able to push the guest experience really helps drive that demand in these parks. So it's -- I think we're able to offer very innovative and exciting guest experiences. But what this lineup also shows, in addition to the coasters we've got going in, you can see us touching family product, the Carowinds. You can see us touching water at Six Flags Over Texas. And at Magic Mountain, really supports the season pass program at those parks. And beyond 2025, you can rest assured, we've got a lot of -- a very compelling plan in place for the next several years that will help us get to our revenue goals. Next, I want to talk about in-park revenue. Two things I'm going to talk about today. The first are our food and beverage capabilities, which you got to experience at Farmhouse firsthand yesterday and last night at Sawmill. And second, I'll talk about merch, games and extra-charge. About a decade ago, we embarked on a transformative project to really reinvigorate our food and beverage operations in the legacy Cedar Fair side. We invested in executive chefs at our parks. We invested in high-capacity cruise serve food locations like some of the ones you saw yesterday, we really pushed the envelope on innovation. And what we saw was a very steady 7% CAGR growth in the revenue -- in that revenue stream over that time period. We want to now apply those strategies to the combined portfolio, and we're confident we'll achieve similar results. Great example of that has been what we've done on the adult beverages side by expanding the availability of adult beverages and creating fun themed drinks. We've been able to double our penetration rate and double our revenue within the food and -- within the beverage category on the legacy Cedar Fair side. We also like to incorporate these into our seasonal events. You can see a picture there of some of the blood bags. We would sell 250,000 of those a year at $15 price point. 30% of those are actually mocktails that kids are drinking. So if you told me 5 years ago, we'd be selling $4 million worth of blood bags, I probably would just fall over. So we're looking for more opportunities like that. We hope to sell 300,000 this year. So again, looking at transactions per guests, we used to talk a lot about per cap. We talk even more about transactions per guests now. And so what you can see at the parks where we've optimized the food and beverage operations, we've been able to grow that transaction per guest rate, and we have a similar opportunity for the lower penetration parks. I want to give some tangible examples here. I'm going to talk about how renovations improve existing food locations. As Richard mentioned, it's a very capital-efficient way. It's easier to build those than construct a new location from scratch. You don't run into the same time lines on permitting, and it requires less bandwidth from the team. This year, we're putting in 11 new renovated locations, we're planning another 50 at the pace of about 10 a year over the next several years. You can see on the right-hand side, the renovation we're doing at JB's Barbecue at Six Flags Over Texas. And our top-performing renovations this year that have only been open for a couple of months are already doing twice the revenue as the location did last year. Similarly, I want to move on and talk a little bit about what we're doing to drive beverage penetration. By opening up Coca-Cola refresh stations and making that readily available throughout the park, not only are we able to give people easier access to get a beverage when they're thirsty, we're also able to pull people out of entree lines or other lines and to make those lines shorter, and we're seeing increased penetration in our entrees as well, as a result of these tactics. We're adding 22 refresh stations this year focused on the highest growth, highest opportunity parks. And you'll see us put a similar number in next year, at which point we'll be largely complete with where we want to be. So this is actually a relatively quick win over the course of 2 years, we'll get where we need to get. Next, I want to talk a little bit about merch, games and extra charge. So touching first on what we do in retail here. We're looking for creative ways to drive transactions per guest and average transaction value. For example, we're doing a lot with custom product, including colabs and partnerships with IP partners like Peanuts for things that you can only get in the park. And another thing we're doing is adding bundles that create value to the guests if they purchase more from us, give them things that they might need in the park, let's say, for like a water park, you can get a fan and a cooling mat and a cozy and also, obviously, it's going to help us drive our average transaction value. Lastly, premium products. These offerings actually are a fantastic fit with the expanding attendance pillar of our strategy because these products become more valuable as the parks get fuller, giving us pricing power and letting us drive revenue here. And this is generally very high margin revenue. For example, we keep on adding cabanas at our parks, and we haven't hit a ceiling yet. We're adding 100 cabanas across over 10 parks this year, and we anticipate that we'll be able to double the size of our cabana revenue, which is already north of $10 million over the next few years. So I just want to summarize, here's how we're going to win. We're going to activate centralized capabilities around things like marketing, CRM and business intelligence. We're going to regain the 10 million guests through guest satisfaction and higher market penetration, and we're going to capture more value from every guest visit through premium offerings around food and beverage, merch and extra-charge. So I want to thank you for your time today. Really enjoyed sharing our vision for the future with you.

Thank you, Christian. So we're ahead of schedule. That's good. We're going to move into our first question-and-answer session. [Operator Instructions] Brian will come back after this Q&A session and a break, and we can get into the financials more deeply. So who's going to ask. There's lots of questions out there. Yes. Chris, go ahead.

Okay. So the first question I had was kind of on -- I think it's Slide 20. This is the relative value proposition. And how do you guys -- I mean, I think these numbers make a lot of sense in terms of what they are today. How do you close that gap? How do you educate the customer they should be willing to pay more, right, because the industry -- it feels like you do have that pricing, maybe your most loyal customers, you actually have to ask them for even more money, even though they're probably already giving you the most amount of money. So how do you make that happen?

Chris, great question. Let me take that one. We think about communicating the value, we keep trying to reinforce when the guests come, what's the value proposition, come two times, buy -- come twice buy season pass. We like to think about and the slide references cost per hour. A lot of times, the consumers think in terms of big dollars, concert ticket. They don't think how many hours they're going to go to the concert, they think about seeing Taylor Swift. All the girls in my family went to see her. When they think about -- and I know what they paid. So we are great value. The essence of your question is how do we communicate that. And we saw it yesterday, when you come and you spend several hours with us, like we did yesterday, we spent 2 or 3 hours in the park. But on a Saturday, length of stay here could be 8, 9, 10 hours for some people. You start to get the value proposition. So part of what we've got to do is get people out to parks and sample. When you come in and experience it, then you realize the value.

Steve?

So I want to go back to the potential selling of assets. And I think you talked about your top 15 locations make up 90% of EBITDA. So that means you've got another 25 out there that are 10% or so. So obviously, you've kind of sold the one in D.C. But I guess maybe how you think about those other 25 down the road? And I said -- you kind of mentioned that it's something that you would look at. But are there other opportunities out there to just -- D.C. is kind of interesting because you can pick up a lot of that lost attendance in Kings Dominion and Pennsylvania and New Jersey. So as you kind of look around the rest of the country, are there other opportunities like the D.C. transaction?

So Chris, let me clarify -- Steve, rather, let me clarify. When you look at it, we have 42 parks in 31 locations. So when I say the top 15, I'm talking locations, not parks. Cedar Point is two parks because it's got the water park in here. So we've got another 16 locations that we can evaluate. We've gone through and looked at what's the highest and best use, out of that came the D.C. transaction that we're going to do because we think the highest and best use of that real estate is not as amusement park. These are irreplaceable assets. So when we look at these, these have great value. They can play a role in our portfolio, but are we going to focus on? What we know over time is there's a way to maintain the attendance and the demand levels. But if you're going to grow, and our focus is on growth, we've got to go get the growth out of the bigger parks. We've talked about the 10 million in attendance and a lot of you have asked, how do you go get that? Well, we've kind of touched on it here, but let's be clear, if we double the penetration at Magic Mountain, that's 3 million people. If Dallas does the same penetration as San Antonio, it's another 2 million people. If Atlanta does the same penetration as Charlotte, it's 2 million people. You start adding up the numbers really quick. It's clear where we need to concentrate our focus. So I want to make sure management is focused on where we can deliver the best growth. But these are also irreplaceable assets. So if we're going to conduct a transaction, we got to get value for it. That's why I referenced a better '25, but market conditions have to be right and we've got to be able to enact at something where we can really create value. Brian?

Yes, I think the only thing I would add, Steve, to that is connect to what Christian talked about in terms of that regional pass play. So as we think about these assets, right, and as Richard noted, you're talking about 16 parks that represent that next, call it, roughly a little inside of 10% of the park level EBITDA, two of those are already earmarked for sale, right? Great America out in Santa Clara, where we sold that underlying land back in 2022 and Six Flags America, which we just announced sunsetting at the end of the season. Of the remaining, we've got to look at what the economic opportunities are for each of those parks, but we also need to think about how they fit into that regional pass play. At the end of the day, I think some parks will fall into both buckets. Some will be still critical from a strategic perspective. And some will be parks that will be lower priority parks for us because they just don't represent as much upside to that attendance growth.

My question is on kind of the overall park appearance. So yesterday, the park was pristine. Honestly, it was beautiful. How quickly do you think that you can get some of the legacy Six parks to kind of look as good as the Cedar Point park? And how quickly do you think that, that will drive attendance?

Yes. When we think about the appearance of all our parks and when I walk with the managers of each park, everybody sees their own worth. Everybody wants to do what we need to do to improve it. I think the example that Christian gave you of Knott's Berry Farm, doubling the EBITDA in 5 years, there's a short-term impact. You start to see impact right away in years 1 or 2. When we go in and we put in a new ride, you'll see it, you saw it there with Top Thrill, you saw it with Siren's Curse. We touch the area around it. So we don't just put a ride in. We go in and make sure we're touching the food. And when people see new food locations renovated, that's also something that they give us credit for. So I call it the zone of impact. You know that when you put a new big attraction in a section of the park, that section is going to get a lot of traffic. You'll get more credit if you upgrade things in that area. So we'll concentrate our investment. Knott's is a great example. It took us 8 years. We doubled in 5. It took us 8 years to touch every section of the park and go through and touch food and beverage, touch the rides, upgrade the restrooms, moms -- remember, our target demo is moms with young kids. Mom really wants a clean restroom and she wants a restroom that looks really fresh.

Ian, down here.

I know you put out Magic Mountain in the slides. Can we just maybe talk about that a little bit. What drove the NPS decline? And I guess this is maybe similar to the last question, but how do you get that back? And why was it -- why was the decline so precipitous?

I think when you look at any of the parks that are not performing, on both sides of the portfolio, we've had that. Go back to Knott's, the reason we keep giving you Knott's example, we were -- we and I, at the time, the Chief Operating Officer, not really pleased with the performance, thought there was a far more potential. So you go and look at everything. We do a lot of market research. We ask our consumer those questions, what will you give us value for. Our emphasis on food and beverage started 10 years ago because in the consumer research, what we were seeing was that millennials and Gen Z were telling us that food and beverage was an important part of the experience and what they were saying was, it's not that I'll come ride the rides and not buy the food, I'm not going to come if you don't have good food. So I think part of this is emphasis on what the consumers are looking for. I think over time, the reason we talk about broader is better is when you constantly put in this -- so we talk about touching water park, important season pass, kids or family, important to moms with young kids and then thrill rides, more important to the teens, young adults. That balance leads to a broader appeal and gives you a bigger opportunity to drive attendance. Some of the legacy Six parks, the strategy from 2010 through 2019 was a little something new in every park, but it was all thrill based. It can't be thrill based, thrill based. If we do anything for a decade, and do the same thing, you're going to narrow your appeal over time. So we think about what is the opportunity? The opportunity is to broaden the experience and broaden the appeal because that gives you more guests to go after.

For Christian, on the in-park opportunity, food and bev renovation roadmap sounds pretty compelling. And I think you mentioned 11 restaurant improvements that you're about to launch for this season. The 10 a year over the next 5 years, what's the gating factor on rolling those out? And why is 10 a year the right pace? How should we think about that?

That's a great question. Listen, I think there -- would we like to go faster? Certainly. I think there are a few gating factors. Number one, building on what Richard was talking about, the guest wants to see that sustained ongoing investment in the park. So there -- to some degree, there's a pacing around that, that helps maximize our returns. When we've looked back at capital investments, we will see that there's kind of an add-on effect to capital in the subsequent year relative to that first year. So 1 plus 1 is kind of 3. So there's a pacing element. Also, although the renovations are more capital-efficient than, let's say, building a new location from the ground up, these are not minimal investments either. So we're trying to manage our overall capital budget. We need to touch infrastructure, we need to touch marketable capital that's going to get people into the door and we need to touch food and beverage. And we like to -- when we're going up and putting in new attractions, we like to try to clean up one whole area at a time. That way, it becomes very noticeable to the guest that something is different here. And then lastly, we want to make sure that we are getting the core elements right with our food and beverage teams, and we've got a team that is overseeing these renovations. And we want to make sure that we're hitting the right level of quality and the right level of food and the right level of operation. So there is a pacing to it. And listen, if we find a way to go a little bit faster, we'll certainly try to dial it up a little bit.

Yes, let me jump in here and say one of the gating factors, and I'll use your term, we work with all the local jurisdictions. They're very great partners, but they're stretched. Permitting is becoming more and more of a challenge. So building a new location, a lot more challenging than renovating, that's a little bit quicker, quick win. But we've got to acknowledge in different localities are really stretched. They've got less staff. The permitting process keeps getting longer, not just because of resources on the local government side but also the regulatory process keeps getting a little bit more complex and complicated. So we'd like to move faster on a lot of different things. We've got to have a plan. We've got to get that plan through the local authorities. They work with us really closely. So they've been great partners almost everywhere, but there's a reality to how quick we can move in today's environment where there's a lot of construction and things are happening all over the place.

[ Emily ], we had another question right there. Yes.

I guess it's just more on -- my question is more on EBITDA margins. Thinking about the 40% that is basically success by 2028. How does that account for the 10 million of recapture? And then how do we think about as you guys go beyond that 10 million to potentially 30 million based on the penetration targets? What would the incremental margin be on that extra attendance?

Brian?

Yes. So we'll get into some more specifics here in just a bit. But as we've consistently said that the path to EBITDA margin improvement, getting to that 40% is driven both by a more aggressive approach to the cost structure, resetting the cost base, as Richard said earlier. And from there, building on that 10 million gap in or clearing that 10 million gap in attendance. It's not necessarily linear, right? The path to that will accelerate. This is a leverage business. As we saw out yesterday, a park like Cedar Point which is already pretty well optimized from a cost structure, generates close to 4 million guests a year. There's a lot of leverage in that system. That doesn't exist right now across the board. And so as we get more parks to tap into that full penetration or closer to their full penetration, I think that's how we get there and get to the 40%. Beyond that, it really comes down to, I think we have to see. I mean is there some upside? I would tell you the 40% is an average across the board, right? So some of this is ultimately going to come back to tie back to Steve's question about the portfolio, where is the portfolio mix? We probably have a half dozen or so parks in the system right now that are generating EBITDA margins well in excess of 40%. So really, part of the answer is where we are at from a mix perspective. And then the guest acquisition costs beyond that, as you look to acquire that next rung of attendance beyond 10 million, what do those guest acquisition costs look like? It gets a little bit more expensive, the deeper you go, right, acquiring that next guest.

Lizzie, I guess. James, you'll be next.

Kind of a two-part question. You gave the 58 million attendance target for 2028. I think it was originally 55 million for 2027. So just curious has the kind of pacing of that CAGR changed in terms of the strategies you talked about being more front-end loaded or back-end loaded? And then second part of the question, I think you talk a lot about attendance recapture. I think back in the day on the legacy Six side, a lot of those -- a chunk of those tickets were heavily discounted coupons, BOGO type things. So how do you go about balancing recapturing that and not kind of, I guess, diluting the mix in that way?

Both good questions, Lizzie, thank you. When we think about the attendance and recapturing it, we've taken the last several months to peel back the layers, and as I said, we dove deep into the data, not just on the attendance side but on the transaction side, pulling all the past transaction data, we've dived into each market. What is it capable of giving us, not where we've been, but where can we go? So 58 million represents our view of the world as we sit here today, all the information that we've been able to get our hands on looking at where the growth is going to be. I talked about some of those specific markets, but there's growth all over the place. So 58 million really is the right target, and we feel more comfortable that it's where we should be able to get. It's achievable. Again, it's not based on market growth, although we are in a lot of fast and growing markets. So we like that a lot. Brian, anything you want to add?

I would just say, Lizzie, to your point, in terms of the 55 million, at the time that we disclosed that or communicated that, that was meant to more reflect. And if you recall, it was a 55 million or more. It was more of a baseline threshold. We had to get above 55 million in order to achieve the type of revenue growth we are looking for, the type of free cash flow generation we are ultimately looking to generate and get leverage back inside to a more comfortable range. As Richard said, the 58 million is the right target for the portfolio as we see it today. The discounting on the legacy Six side, historically, I think more ties back into Richard's earlier comments about value proposition, right? And if you provide a strong value, if there's compelling reason for guests to come, you don't need to discount. It gets back to what we're going to talk a little bit more about, I'll highlight. Christian hit on this. We've got to keep the parks crowded, comfortably crowded, not overrun, right? And that's where discounting can get a little away from you. We're not discounters. We've never been deep discounters. And I think the focus is getting that 58 million visitors back as fast as possible the right way.

James, go ahead.

So I just wanted to sort of dovetail off of Lizzie's question. And it -- I'm pretty sure I know the answer to this, but '27 targets are now, we're getting rid of those, right? Like this supersedes all of that because sort of the trajectory for you from '27 to '28 would be significant, right? This seems like more aggressive targets. I think the answer to that is, yes, that we should forget about...

Yes, it is. But they're the right targets and they're achievable.

So maybe take us behind the curtain a little bit as what's happened between whenever you gave us those and today, this feels a lot more aggressive, a lot more robust, and then sort of a related question. As I think about -- we've talked a lot about asset sales, but particularly the part where there's adjacent land to a number of your parks. I've been covering the story for a long time. I think I had hair when I first started covering you guys, it's been a minute. But that adjacent land story has been around a very long time, and there hasn't been a lot of movement on that. Richard, I think you mentioned that it's not -- we shouldn't necessarily be connecting the dots between asset sales and the deleverage story. But maybe speak to why now is different than the last, I don't know, 20 years, where that's been an opportunity. And is there sort of more urgency on that front? And is there more opportunity on that front?

So I'll go a few different places. Let me start with the last one first, which is when we look at the opportunity. And we think about, no, we don't need asset sales to delever. But I'll go back to what I said. What -- when I look at this merger, what is the combined company capable of that neither company could do? As a stand-alone company, Cedar Fair had 15 parks in 12 locations. Tough to sell 2 or 3 parks. Great America was a real struggle for us. We didn't want to leave a very attractive market, but we got compelling economic value, and it was the right decision. So when you look at the combined company, we can now think about portfolio optimization because 15 of our locations drive 90% of the EBITDA, that wasn't available in the same degree before. So I think when you think about what we're capable of and then to dovetail to my next part of your question, which is we've been able to now look at the data until 3 days before -- I keep saying this until 3 days before the transaction because of the DOJ review process, I couldn't see any of the data. So we had to dive and jump in. We got our hands on research. We did more research. Now what we've done instead of taking a couple of months we've taken several months to create a really robust plan. You will hear me talk all the time about what's the full profit potential of each location. Each park has a trajectory and has potential. What will it take to activate that and over how many years? We now have a real sense of where we can go get the growth, what the levers are in each market and what each market could give us if we properly invest in it. And as we said, we keep going back to the Knott's example. I will give you a different example. But the Knott's example, we've invested consistently year after year, touching a piece of the park. That was not significant outsized investment, but it was substantial investment consistently each year. And the market gave us credit for that. Different conversation, in the Charlotte park 2015, we built the Fury roller coaster, a new front gate. We relaunched that park. That was a significant investment, roughly 50% of the company's capital expenditure that year went into one location. That was a different trajectory. But over 5 years, we drove the attendance at Carowinds up over 1 million people, and we doubled the EBITDA there in 5 years. So each market can give you something different. And what we know now that we couldn't have known in full back then is what our view -- our informed view of what the full profit potential is of the park and what it'll take. Then we've got to put the portfolio together and make sure we're prioritizing, getting the highest ROI opportunities, even though every park has opportunity, are we driving the highest ROI.

Arpine, down here.

I wanted to go back to your target of 10 million incremental visitors. I was wondering if you were to bucket that, what are the building blocks? And I know you mentioned some sort of per park opportunity, which is very helpful. But how much of that is driven by just getting more frequency per pass holder? I'm particularly interested in what are you assuming for legacy Six Flags frequency per pass holder. Is it coming closer to that 5x per year that you see under Cedar? How much of that 10 million of incremental visitors would just be driven by increasing the frequency under legacy Six pass holder?

As we look at the next few years, we think there's a modest increase in the frequency, not a significant increase. We think a lot of it is in unit sales of season pass and driving the volume. And when we think about the 10 million, I'd say 8 million of the 10 million is season pass. So if you're going to get it, you got to go and get it in the season pass channel, and that's the ticket we want people to buy. It's the highest perceived value and gives us the ability to get the most visits. Christian, anything?

Yes. No, I think not much to add there, but it's -- again, I think it's mostly predicated upon moving people up the value channel from a group ticket to a day demand ticket to a season pass. As Brian will talk about in his presentation, kind of an annual value of a season pass holder far outweighs that of a demand ticket holder. So we're just trying to migrate people up the value chain.

And the other thing I'd add as we think about season pass, increase the renewal rate. So we want to keep increasing renewal rates and keeping people instead of every other year, get you to come back every year.

And it will be no surprise that some of the underpenetrated parks have much lower renewal rates than the high penetration parks.

When you guys highlighted the opportunity to get the attendance back up, one of examples you used is the California parks and the spread over the last number of years and how it's diverged. How should we think about the opportunity of kind divergence versus structural? And then you also highlighted the Texas opportunity but San Antonio versus Dallas are very different markets, I mean, Dallas has NBA, NFL, NHL, San Antonio doesn't. So can you just kind of walk me through your own thoughts there?

When we look at every market, what we look at is which demographics are growing, is the market growing, Midwest more stable, Texas fast and growing. L.A., Southern California, a tremendously vibrant economy and one that has 50 million tourists that come each year. So each market gives you something a little bit different. When we think about Dallas, and my daughter just moved there a few months ago, it's fast growing, like San Antonio and Austin. We like those locations as well. We've got two parks in San Antonio. We think there's great opportunity there. But the park in San Antonio, Fiesta Texas, is a broader park, meaning it was built differently, built a long time ago by the same company that owned Opryland. They built it to be more a music and show park. So it's got a higher penetration of families. So of all the parks in the legacy Six chain, it probably looks the closest to what we'd say the demographic profile is of a legacy Cedar park and not surprisingly, gets the highest penetration. That's back to broader is better. So Dallas has tremendous growth in all demos, tremendous income. It's a really attractive market, but we've got the same challenge in Dallas and other fast-growing markets that we've got in a market like Charlotte, where we think there's more penetration to be got. If you didn't grow up there, you didn't grow up going to the park. We got to get you out to the park to start that genetic vacation behavior and get you coming back each year. So a park like Cincinnati, very stable population, Kings Island has the highest penetration rate because you went with your grandparents, you came with your parents and now you bring your kids. So a more stable population base where you've gone to it is a different profile than a fast-growing where we've got to get sampling, get you in.

Other questions?

I'm looking at Slide 40 with the marketing funnel. And if you're going to go after these incremental 10 million attendees, obviously, getting that funnel right is really critical. Could you talk a little more about like what upgrades? Like how significant are the upgrades to your CRM systems to do that? And were there any parts of the marketing funnel in legacy Six or legacy Cedar that you think were -- maybe you were lacking and you can make some improvements to go after that attendance?

I'll let Christian jump in because this is his area of expertise, especially now because I look at him to be -- yes, it's quarterbacking, but let me just say, we need to get -- one of our tech stack focuses is to get everyone on the same ticketing system. So first, we've got to get all the data being dumped in to be the same. By the end of this year, we'll have everybody on the same ticketing system. That's step one. Then we can take a look and jump into the CRM. When we talk about CRM, then you've got all the levers and the mechanics within the CRM to go chase your guests. Christian?

Yes. So a couple of stages of this great question. But as Richard alluded to, we're going to improve our infrastructure around this over time. We've got a pretty robust approach to doing this on the legacy Cedar side. We're in the process of creating integrated customer data platform right now that's going to allow us to have a unified view of the guests where we have information. That will be the engine behind a lot of this. But there's already a lot we've been doing on the CRM side and targeted e-mail to people. So let's say you are a season pass guest from a prior year and you haven't renewed. We can target you with that. Let's say, you bought a season pass, but you haven't visited the park yet and it's already midway through the summer, we can give you an incentive or an offer. And so we're able to brute force our way through some of that on both sides of the portfolio, but that will get better and more automated over time. The other thing I alluded to during my presentation that we're really excited about is the opportunity to have a true loyalty program that elevates our ability to do all these things. Right now, we've got an ability to provide our Passport program to give some incentives to people and some -- it's like an offer, more of an offer platform. But with a true loyalty program, we can get much more targeted with what we deliver to the different individuals based on their unique characteristics and demographics and spending behavior. So I'd say we're still probably -- if this is a baseball match, we're probably kind of getting to the end of the third inning here on what's ultimately going to be possible.

So guys, thanks for all the questions. We're going to pause now. I think everybody is ready for a break. I see a few glazed eyes out there. So let's take a quick 10-minute break. We'll come back, give Brian to go through the more details of the financials. And then we'll have another Q&A, we can jump in there. Thanks, everybody.

Let's come back about 20 minutes after the hour. [Break]

All right. Well, welcome back from that break. Let's get into what everybody really wants to talk about, right, which is what's the economics of everything that we've talked about. Richard hit the high points of what our strategic objectives are. Christian touched on a lot of the initiatives that underscore those strategic objectives. What I'm excited to talk about is how does that translate into the top line revenue growth that we're so confident this business is capable of generating. And after that, we'll also spend some time touching on what I know you all want to talk about, which is what's our outlook around cost and how does a more disciplined approach to the cost structure translate into achieving the 40% EBITDA margin that Richard highlighted. But first, before we get into that, I do want to touch on a concept that Richard hit in his prepared remarks around the stability and the consistency of our business model. As demonstrated here on this slide, it shows the combined portfolio, the strength of the combined portfolio in generating steady, sustainable attendance growth through all types of economic cycles. It underscores the resiliency and the stickiness of the business model and the fact that our guests keep coming back year after year for the compelling offerings that our parks have. Growing attendance has translated into an even higher level of revenue growth. And if we went -- if we carved out of this, M&A, international licensing arrangements, the historical growth rate over this time frame would have been about 100 basis points less, but still pacing ahead of attendance, reflecting the fact that we're not discounting to drive that attendance growth. We're getting attendance growth. We're getting guest spending and driving both of those consistently, as I said, through various economic cycles. Again, all proving the reliable, highly resilient nature of the business model. So what are the strategic initiatives that Christian hit on related to driving attendance and guest spending mean for revenue growth going forward? Christian, he talked about the core drivers. What I want to get into is how those initiatives underscore the predictability of that revenue growth and give us confidence in the outlook for the business going forward. First, as Christian noted, it all starts with the #1 growth driver for us, that's attendance. As we've previously noted, the strategic plan is built around driving demand and growing attendance, getting the 10 million visits back. And why do we think this is a rational target? Well, something that we've done before, right? As Christian noted, these are attendance levels that our parks have achieved pre-pandemic. If you look at the two sides of the portfolio coming in -- or coming out of the merger, on the legacy Cedar side, we're trending at about 97%, 98% of pre-pandemic attendance levels. On the Six side, we're still below that. But those are attendance levels that we've achieved in the past and we can achieve again. And said another way, it's the performance our parks have shown the ability to drive and can do it again. More importantly, our strategies around attendance are focused on moving more of our guests into what we call our advanced purchase channels, season pass and group. It's important for a couple of reasons. One, predictability. These are long lead channels. The purchases are made well in advance, and they tend to be less susceptible to those macro events that disrupt visitation, weather, time, poverty. It's been a strategic focus for us on the Cedar side for a number of years, and it's going to be a focus going forward. But I want to turn to something that most people maybe don't realize. When we get asked about season pass, we're always asked how big can season pass get. And we'll often answer if we could turn every one of our single day visitors into a season pass holder, we would. Now that's not a practical situation. That's not everybody is going to become a season pass holder. This slide emphasizes or demonstrates the value that a season pass holder represents. We always talk about how season pass can pressure per caps. As a single-day visit, a season pass is a lower per cap than a single-day visitor. But that said, when you look at that season pass holder over the season, over the 4 or 5 visits, they represent a much more profitable unique guest, in some cases, representing as much as a 2 to 3 turn increase in terms of total guest spend depending on the park. Because of those economics and the predictable, stable nature of season pass and membership base, it won't come as a shock to you that our focus, and this gets to one of the questions that was asked earlier, our focus for growing attendance, getting those 10 million visitors back is highly concentrated on two things: one, expanding the season pass base; and two, increasing the average visitation for those season pass holders. More than 80% of the target attendance lift, as Richard noted, is expected to come from those two objectives. Now let's turn to how that growth in attendance can translate into increased revenue spend and ultimately higher margins. What does 10 million visit lift in attendance and the related impact on in-park guest spending ultimately mean? So between 2025 and 2028, we believe we're well positioned to generate $600 million or more of revenue growth. This slide breaks that down into sort of the four -- or the five core buckets as we see that revenue growth. As we previously noted, it's all about keeping the parks comfortably crowded. That extends length of stay. It increases demand for premium experiences like front-of-the-line Fast Lane or FLASH Pass. It increases food and beverage spend with that longer length of stay. It leads to better pricing power on a going-forward basis. Of the targeted revenue increases on in-park spend, so whether we're talking about food and beverage, we're talking about merch or Fast Lane, we're projecting approximately 90% will be derived from higher transaction counts and higher average transaction values. Roughly, only 10% is coming from pricing. Meanwhile, you look at the admission side, so selling more season passes, selling more single-day tickets, more group. That mix, roughly 75% is expected to come from volume, 25% from pricing. This -- again, this is a volume story, it's a volume strategy, and it translates all the way through the top line revenue side of the business. So let's take another moment to pause here and talk a little bit about cost, right? Everybody wants to know what's the cost outlook, what's the algorithm around cost. As we noted on our first quarter earnings call, big focus on resetting the cost base over the next 2 years. As Richard talked about, 2025, we've targeted a net reduction in our operating costs and expenses of 3%. That equates to about a $60 million net reduction in cost compared to the combined spend of the two companies in 2024. In 2025 -- or 2026, we're looking to generate another $60 million of gross cost savings. We believe those gross cost savings a lot of which will be the continuation of initiatives that we activate here in 2025, some labor related, some nonlabor-related, will offset the pressures from inflation and other growth in organic top line influence variable costs, which will keep our cost structure in '26 relatively flat to 2025. From there, we've reset the base. And as we think about costs going forward beyond 2026, more in line with inflationary growth rates longer term. So by flattening out the cost curve while still driving higher levels of demand, increasing and improving guest spending within the parks, that leads, as we said earlier, to that improved margin and overall, getting to that 40% long-term target. So then what does all this mean from a free cash flow perspective and a capital allocation standpoint? This is a simple algorithm of how we think about the business from the standpoint of generating more cash and achieving that long-term priority of meaningfully reducing net leverage. As we've talked about, it starts with the top line revenue growth, 6% CAGR in terms of attendance and revenue growth. It continues with that disciplined cost structure, one that supports a sub-inflationary growth rate over the next 4 years and ultimately leads to that step function in adjusted EBITDA and margin. From there, our capital allocation priorities are pretty clear, continue to reinvest in the business, as Richard noted, while paying down debt to get leverage back inside of a range that we're comfortable with, back inside of 4x. As Richard noted, further optimization of the portfolio is certainly a focus for us, but it's not a priority to get leverage back inside of 4x. It will only help accelerate the achievement of those goals. And on a modest level, when you look at the properties that are on our radar. So taking a closer look at the core use -- one of our core uses of cash for a second. Christian hit on this in terms of capital investments. Our philosophy is to invest it back in the business. We invest in the infrastructures and safety of our parks, we invest in our associates, but we invest in maintaining the attendance base and growing the attendance base of the parks. So that entails investing roughly 2/3 of our capital programs, our annual capital programs on new marketable products. So think the thrill rides that you saw yesterday, the food and beverage enhancements, the retail additions we make to our parks. The other 1/3 is on those infrastructure and IT-related technology investments. Over time, we think the average investment will be in the 12% to 13% of net revenues. But any investments in those marketable products, in those food and beverage locations, those retail centers have to deliver returns in excess of our cost of capital. So what does this all mean from a free cash flow generation standpoint? Based on the planned levels of CapEx spend, on the screen you see 2025 to 2028 and our estimated payments for taxes and interest, we're projecting growing annual free cash flow by more than $400 million over the next 4 years, a compelling growth rate of more than 40%. From an overall capital allocation standpoint, as I said, we remain focused on getting leverage down. So we're going to use all available free cash flow to improve the balance sheet and repay debt. Once we're below 4x, back in a more comfortable range, that will provide us with some more flexibility and optionality. After that, we'll be able to allocate our capital based on our forecasted returns, one of which will include taking a look at where is the stock trading at. We view acquiring our own stock as one of the core investment choices. And based on where the stock price is today, if we were inside of 4x, we would favor repurchasing shares at these levels. And I think that's something most of our investors would fully agree with. So the path to sustainable profits and higher shareholders, what does that look like? As Richard noted, just reiterating, by 2028, entertaining 58 million guests and generating $3.8 billion in revenues, representing a 6% growth rate in both. Combined with that disciplined cost management and the operating leverage that this business represents or can deliver, that will return $1.5 billion in adjusted EBITDA and margins of 40%. It will also achieve that goal of getting back inside of 4x leverage in less than 2 years -- or just a little more than 2 years, I'm sorry, following the closing of the merger. So if we pull it all together, what does a win look like? As Christian said, it's the successful execution of the strategy built around capturing significant cost savings in the near term. Over the near and long term, continuing to drive top line attendance and revenue growth. From there, it's about optimizing the use of free cash flow, reducing leverage and investing in the business to continue to fuel future growth in the business. That ultimately leads to higher shareholder value. We believe we've got the right team in place. We believe we have the right initiatives in place to achieve those goals. And I would say that this team has never been more excited about the future of this company. So with that, I'm going to stop and turn it back over to Michael.

So we're going to go right into our second Q&A. Arpine has a question, if we could get the microphones there.

So if I look at the -- about $600 million of incremental revenue that you're targeting by 2028 and $400 million of EBITDA, the flow-through on that is about 67%, which is pretty impressive, obviously, and you have $60 million of that just coming from sort of lower cost. But what else could you tell us to get us comfortable with those ambitious targets in terms of flow-through and how to think about that incremental revenue translating into EBITDA?

Yes, Arpine, it's a great question. I think when you look at it, I mean, this business for parks that have optimized their cost structure, as I mentioned before, high amount of leverage in the business, right? And so what we've historically seen for parks like Cedar Point, Knott's Berry Farm, Kings Island to name a few, those parts, the incremental revenue at that point can often flow through at somewhere between 55% to 65% responsibly. Now as we think about, as I mentioned before, that guest acquisition cost certainly gets a little bit more expensive, the deeper you try and go. But we would fully expect flow-through in that 55% to 65%. So whether you're looking at it net of those cost savings, which pushes that down to more in that 55% or you look at it inclusive of those cost savings, it's closer to that 65%. So that's consistent with the historical results of the business.

So the 4x leverage through next year, I guess, question one, is that sort of the end target for leverage? And maybe just walk us through sort of beyond '26, right, '27 and '28, you're going to be generating a lot of cash, you have some payments due for the partnership parks. But as we're sort of going through our models, should we be keeping that 4x leverage sort of fixed and then whether it's operating cash flow or asset sales, should we think about that then going towards the payoff of the partnership parks? And then whatever is left over, you talked about the potential buyback, which sounds pretty exciting. But maybe walk us through sort of once you've gotten to that leverage goal, what happens then?

Good question, James. We've always said we're comfortable between 3 and 4. We want to get down under 4. We've heard the concerns. And certainly, we don't want to be near to 5, given all the questions around the health of the consumer. Brian can comment on the specifics. But we are always going to feel really comfortable in the mid-3s, but we always look out and see what we think about the next year, '26, '27, '28, what the opportunities are. All of our plans factor in the bigger pieces that we know that we're committed to reinvesting in the park, but there'll be significant free cash flow left over. If the market is not getting us credit, once we get under 4, as Brian said, I'd favor a stock buyback all day long if we're really not getting credit from the market. Brian?

Yes, I think that's the key, right? In the moment, our focus is on investing in the parks and paying down debt to get from 5 down inside of 4x. We see a clear path to that. As we think about the partnership parks, the only notice that we've given is on Georgia to this point. That first payment isn't until the first of '27. So there's some time on that. We've talked about optimization of the portfolio, some of the asset sales that we have out there right now or in process, the land -- the excess land in Richmond, the park just outside of D.C., rough estimates at this point. When you think about the market rates for land in those two regions could be $200 million to $250 million or more of gross proceeds. I think a lot still to be figured out on that front, right, there's still entitlements to be gotten, which always makes it more valuable. And then we have to see in terms of end use depending on who we would ultimately send those to, how much usable land in both cases fit the end-use purpose. But that would help offset that as well. Mike?

Steve?

So I think in your entire presentation, there wasn't one mention of per caps which I love because I can't stand talking about it. Unfortunately, a lot of investors still kind of key in on that metric. So over the next couple of years, there's probably going to be a lot of noise around per caps just as you get attendance back. You drift a little bit more towards season passes, it sounds like. So how do you get investors comfortable that if you do see per caps declining a little bit, it's not anything to just totally panic about?

Let me jump in here. We've talked a couple of things that we've talked about today. We're generating on in-park spending, what the guest spends once they come inside the park, more transactions higher. 90% of our increase in per cap comes from driving transactions and the value of those transactions, only 10% from pricing. I think, Steve, there's a tendency for investors in the market to look at pricing and per caps and think they're the same thing. What we've tried to communicate is they're really not. There's a way to drive per cap. We take as much pricing as we can. We're dynamically priced on admission. We obviously are not street priced on what you spend in-park, that's always worked for us. But go back to the volume piece on the admission side of the per cap, 75% of what we're going to see in terms of driving attendance, driving revenue is going to come from that volume side. So it does put some pressure on the per cap, but it all drives huge increases in revenue. I'll go back to the slide that really, I think, frames it up well. We want the single-day visitor. It will give us $85. And those were very real numbers from a couple of our parks. But I want to sell tickets to every customer that will give me $275 each year, every year, all day long. Brian?

Yes. I think it's a great point. I mean we -- listen, we follow per cap neurotically as well as a management team, right? It's one of the core metrics. It gives us a little bit of comfort in terms of where the health of the consumer is. But it's an output, right? It's not a controllable. So I think to Richard's point, I think one of the things that we are going to have to provide a little bit more visibility into maybe pull the curtain back a bit more on is talking about those things like transaction counts, average transaction values. Because as the -- as Richard noted, that slide, looking at what a season pass holder means versus a single-day visitor, you can see it starkly there, right? I mean per cap, because of the way season pass plays into it is a bad visit from just that metric by itself. But in terms of that as a unique visitor and what it means to the business that if we could turn, as I'll say it again, every one of our visitors into a season pass holder, we definitely would do that.

And again, we built this model to achieve our goals, we don't have to drive per capita. If we can get the 10 million drive per capita, there's even more there. So we're not going to stop. We're trying to drive per caps.

Mike?

Yes. Maybe just to take a look at the CapEx expectation. I think if we look over the next 4 years, cumulatively, $1.2 billion, $1.3 billion in kind of ROI projects. You've also talked about the focus on a handful of parks namely in the legacy Six Flags portfolio as kind of the focus for a lot of this attendance growth. So is there a way of thinking about that $1.2 billion, $1.3 billion? Like how much of that is allocated towards this handful of parks over the next 4 years?

We talked a lot about CapEx first, and I'll say what we said before. We think this level of CapEx will drive the growth. We think 12% to 13% of revenues is a comfortable range. We don't see projects that are outsized who would take us beyond that at this point. If you go back to the examples we've given you, Knott's Berry Farm was a consistent investment each year. It wasn't $50 million in 1 year. It was $15 million to $20 million each year. So when we think about prioritizing those top 5 markets where we see opportunity, yes, they're going to get a significant share of it, but it's going to be the consistency of the investment that will have as much impact as the size of the investment. Brian?

Yes. And I mean just maybe tackling it from a slightly different angle in terms of how we're looking at the relative spend between the size of the portfolio. And coming into '25, a lot of the capital program was already sort of set on both sides. And so just to put it into some perspective, I'd say of that marketable product, about 60% was spent on Cedar Fair side of the portfolio, about 40% on the Six parks in our portfolio. As we think about the plan for '26, that gets inverted. We're going to -- as Christian noted, we're going to invest where the opportunities are the richest. You push those two things together, we're focused, as both Richard and Christian noted, the top 15 parks in the portfolio, 80% of the attendance. That's -- those parks are going to get the lion's share of the capital, especially the big marketable product. It doesn't mean that our other parks don't get something. They -- all the parks have capital needs, and so there will be capital projects at every one of the parks in the system, but the lion's share of the focus is on those bigger parks where the opportunities are the greatest.

Some down front here. Yes. We'll be back next [ Terry ] back there but first...

Just with respect to the CapEx targets, 12% to 13% of net revenues. If I look back at legacy Cedar Fair, I think it was more like 9% to 10% and Six Flags kind of averaged close to this level. I can appreciate the need for the investment today for the next few years. But as you get to a point where the Six Flags attractions catch up to the Cedar Fair, why couldn't we get back to something like 9% to 10% of revenues? Is there a structural change here that you see that you need to drive the business forward from a CapEx standpoint and keep that level at 12% to 13%? Or is there an opportunity to bring that down and bring cash flow conversion even higher?

Typically, we were not at 9% to 10% for Cedar Fair. We're actually with the resort spending closer to 13%, 14%. Over the last decade, we've gone and touched every one of our resorts. You've seen a couple of them. We're in Hotel Breakers here. We experienced Sawmill Creek last night. So there's always that resort infrastructure spending that's a little lumpier. So the core amusement park, we're going to invest according to what we can drive in terms of the attendance. So that 12% to 13% we think represents both what we need to do from an infrastructure, it gives us ample firepower to go after and drive the kind of growth that we've talked about, whether it's in the food and beverage, in the attractions. But we were always a little heavier. We were always heavier than 9% to 10%. A lot of it we ascribe to our resort spending.

Yes, I'd say historically, on the Cedar side, the resorts and some of the other ancillary capital-intensive sides of the business like the dormitories that we have in a number of the properties, pushed that up probably 100 or 200 basis points, probably closer to 200 basis points. The other thing that I'd note is that what maybe has changed a little bit structurally and this is a little bit of inside baseball. When you think about the cost of these capital projects today, one of the significant shifts post pandemic hasn't been so much in the cost of the product themselves. So a $10 million coaster is still -- with a little bit of inflation still close to a $10 million coaster. But what's really increased is the cost of constructing that ride. What used to be able to be constructed for $0.70, $0.75 on the dollar, so that $10 million coaster cost you $17 million to $18 million fully to get it put in place and operational. Those costs have now accelerated in some markets to as much as 125%, 150% of that cost of that. So that $17 million, $18 million coaster is now a $25 million, $27 million attraction. While the cost of the attraction itself has not -- or the cost of the coaster, the steel, the design, et cetera, has not gone up significantly. So that's played in. Now we have to be smart, right, with our capital allocation. We can't just let that creep come in. So it's caused us to have to narrow our focus. Maybe five big attractions is now four big attractions in today's world. But trying to stay disciplined on CapEx is critical to the cash flow -- or I'm sorry, the capital allocation strategy.

Terry...

Great. So you guys are trying to push up your NPS scores while also reducing headcount and other non-headcount cost saves. And presumably, at your biggest parks, there's a good amount of those costs that you're going to look to take out of those parks while you're also still trying to grow those parks. So I guess, what have you done regarding either groundwork or surveys or to just be confident that what you're taking away from the guest, if there is a decent amount of services that you're taking away from the guest that it won't affect the experience and it won't affect revenue?

When we look at what we're trying to do on the cost side, we're trying to reallocate our cost for impact, not take away from the guest. So one of the things we've done, and it's the bane of everybody's existence certainly from the model side is we've collapsed days. We've collapsed calendar, taken it out of the first and fourth quarter and put it into the second quarter. So we're getting higher impact out of the days we have. We've got all our food facility opened. We talked yesterday about when we walk through this park, give yourself an ability to build scalability into your facilities on a light day, open half, still the facility is open. So we're finding ways to deliver more for our guests and reallocate those dollars to have more impact. All the work we're doing on workforce management, we're trying to make sure we've got the right amount of labor at the right spot at the right time to get the most impact for our guests. So we over sample each week. We review OSATs and NPS scores every week. So we're monitoring very closely that we're improving, and we still are. But we also want to make sure we're getting the most benefit. The highest margin guest we can get is do another guest on top of the day we're already open. So we're going to build demand first before we add back operating days, and then we'll add operating days when we build demand. Brian?

Yes. I think just adding to what Richard said, those workforce management tools that we spent the last several years developing and are rolling out across the combined portfolio now give us the opportunity to, in real time, adjust those staffing levels quickly, not only as Richard noted on a day that maybe we were expecting 15,000 and it's overcast and slightly raining, we only have 7,000, getting that labor down quickly so that on the nicer days, that labor is available to you and you've not just wasted labor. I think it's also important during the day, these tools have allowed us to be more efficient with our labor hours. I'll give you an example, right? Morning rush at the park. You need labor at the front of the park. You need them in the toll booths, the ticketing booths, et cetera. You get to after 12:00, 1:00, you don't need those still fully staffed. I think in the old days, it used to be you worked at the ticketing booth, you worked at the ticketing booth. Now with those workforce management tools, we're moving our resources, our associates around the parks where, as Richard said, making those hours work harder for us. So I think the other piece is on the full-time side of things, we talk about those reorg effort that we're under right now, the goal being by the end of it, reducing our full-time staff by 10% or more. A lot of that happens in the field, right? 85% of our costs exist in the field at the park level. It's a flattening of the organization. It's a rethinking of how we make decisions within the organization. We can do that without disrupting the guest experience and deliver those cost savings.

But inherent in your question is what do the guests give us credit for? Why do they come? Ridership. Are your rides open? Are you giving as many rides as you can? Are both -- are all the coaster trains on the coaster? So your higher ridership, we monitor that all the time. As ridership goes up, as rides per guest go up, NPS goes up. Can you get into food and beverage and get a piece of pizza, get the chicken fingers when you want them. As our food line goes down and we have more volume and capacity to serve, our NPS goes up. So some of this is really simple and remembering what the guests will give us credit for. It's the basics of the business done really well and making sure that we're moving things. Our goal is to have 95% uptime on our attractions. If you come, we want everything running. We want you to get 8, 9, 10 rides a day. If we get to those types of levels, NPS goes through the roof. So we know what to monitor. It's our job to provide that experience on really lean, efficient structure.

Another question. Thomas down here.

Dovetailing that to the prior question, I think on the operating expense guidance for a 1% to 2% CAGR, given the guidance for a decline this year and flattish next, I think it does assume some reacceleration of that expense growth thereafter in '27, '28 back to above inflationary growth, which I think makes sense given your revenue growth and some of the variable costs in the system. But how much of the nonlabor piece of the cost savings that you've identified is customer or not customer-facing? And maybe can you dig into that piece in terms of how you think about unlocking that? And then just a quick clarification on the free cash flow guidance. I think it implies the cash tax rate declines. So any sense of what you're seeing there or if there's potentially some impact from bonus depreciation and things like that, that you might be potentially seeing as a benefit?

Yes. So maybe I'll tackle the last question first. So coming out of the merger, and we commented on this a couple of earnings calls ago, we continue to try and find ways to find more tax efficiencies in the structure, right? We pushed the two organization together almost a year ago. Still some more opportunity there, but that's what's been reducing the tax rate, eliminating some of the old legacy partnership entities that were in the system. As we think about bonus depreciation, listen, we're a capital-intensive business, right? We do benefit from accelerated depreciation currently. There are some bills, right, being proposed that would increase that bonus depreciation. We'll see how that plays out. We haven't assumed any of that just because who knows where that's going to land coming out of the process. But certainly, we'll take advantage of it. It's on our radar. It's something that we're monitoring. And as we get more clarity, we'll take advantage of that. I think in terms of the cost side of things, as we think about just some broad buckets for a second, our focus in 2025 of the net cost savings that we're looking to generate, I'd say it skews a little bit more heavily labor, about 2/3 labor, about 1/3 nonlabor. As we get into 2026, I think that balances out a little bit more. The expectation is it's about 50-50. More of our centralized procurement and purchasing efforts continue to bear more fruit. Certainly, as some of our contracts come up with our third-party vendors and partners, that allows us to renegotiate terms. That will be an ongoing effort. So in the near term, it's a little bit more labor intensive, and that's both behind the scenes, Thomas, but also at the park level. As I said, 85% plus of our cost structure exists at the park level. And so there's no way around tackling that side of the business heavily because that's where the opportunities are the richest. And it aligns with the calendar, like Richard said, shrinking our operating calendar or adjusting how we program parks is a big area of opportunity and focus. We've got to do it in a way though that doesn't disrupt the guest experience.

And one of the things we see right now, just 50% of our cost structure is labor. Right now, this is the best -- certainly on the seasonal side, labor market we've seen in almost a decade. So we're not seeing any wage pressure except in some very isolated categories. And that's a good place to be.

Going back to the kind of improving the guest experience, the NPS scores, you talked about improving ridership, F&B. Can you talk about how you're taking some of the friction out of the guest experience, making it easier on the guest side to get into those things? You've talked about kind of improving the capital, but is there anything you're doing on the tech side or on the labor side that will kind of direct guests to try your products more efficiently as well?

Well, as I mentioned, I'll let Christian because he's really spearheading a lot of this for us, really dive in a little deeper. But rolling out -- first thing, we're not satisfied with either one of our mobile apps. We're rolling out the new mobile app for the consolidated company, everybody on the same mobile app in July. Both companies are spending money trying to develop that. And then secondly, not just mobile app but take friction out, we're rolling out next-generation Wi-Fi at all of our parks. And so the ability to use your mobile device to get on quick access is important to us. Christian?

Yes, great. Well, building on what Richard said, we're going to be continuing to invest in the technology stack to take friction out of the guest experience. I think that's one of the real benefits of this merger is we've got an enhanced footprint and broader scale to be able to make these kind of investments in a way that's scalable across the entire organization. As Richard mentioned, we're going to be putting in a new unified suite of consumer-facing technology stack, that's the mobile app, that will be mobile web, that will be desktop. And where you're going to see us obsessed is how do we make that path to purchase easier through every channel that the guest has available to themselves. How am I going to make it easy for you to use your mobile app to pay, to upgrade, to take the friction out of those getting -- if you want to transact with us, let's make it easy for you. So we're going to get -- I think there's room for opportunity, but we've got a plan and a road map in place over the next several years that's going to go there. Also, again, very excited about what a loyalty program can do for us, and we're working with partners that have done this over and over again at different companies to build loyalty programs, and we're really thrilled about what that could mean for us.

Chris?

So this is going to be a little bit of a follow-up to Steve's earlier question. And really, I think, hopefully, investors, the market understands per caps will naturally go down if you get to your attendance goals. My question would be kind of what are you underwriting kind of in the revenue target you put out there for '28? Does that assume that the incremental 10 million behaves exactly the same way as your current season pass base in terms of in-park spend? Or do you assume that they're not all equal and that the last 1 million of additional guests maybe spend below what the top 9 million do, if that makes sense?

It does, Chris. Yes, I would say that right now, what we've assumed is that the incremental attendance is going to be similarly cast to what we've historically seen. It skews, as I noted, very much into the season pass channel. 80% of the targeted attendance lift is coming from expanding the season pass membership base or increasing the average visitation. Every one of our parks has slightly different characteristics in terms of guest spend and guest behavior. But when you look at it on the monolith level or on a consolidated level, we're assuming a similar kind of guest behavior with that incremental attendance.

Lizzie?

I just wanted to ask about the 40% margins. I'm curious, I'm assuming that doesn't include Six Flags America, I don't know if that moves the needle in terms of where that kind of fell on the kind of margin trajectory at the lower end or the higher end. And then to, I guess, expand on some questions from earlier, but tied it into this theme, but you're making different OpEx investments and CapEx investments at these parks, but you've got those, call it, 15 or so locations that could be evaluated of being noncore or core. And so how much time do you give that -- those parks to kind of move up the chain or not before you decide, okay, maybe we go the route of the Six Flags America?

Yes. So I'll start at the first part of your question. So the forecasted numbers or the targets that we've set, as Richard noted at the beginning, it does exclude Six Flags America, which we've announced we're sunsetting. It does exclude from the '28 targets, Great America in Santa Clara because that lease runs through mid-June. So in -- I'm sorry, June of 2028 midyear that year. So by -- unless we decide to extend and exercise, one of our options to extend that lease, that parks last year without that extension would be after the '27 season. Those are -- when you look at those two parks, to your point, Lizzie, those are two parks that are very low on the ranking of margins, so certainly help get to that 40%. But there are a number of other parks in the system that sort of fit that same bill. They're smaller parks, what we would call the mid-tier parts in the system that have been more impacted by some of the inflation that we've seen post pandemic, most notably around labor. As Richard noted, 50% of the cost structure is labor and the lion's share of that is seasonal labor. And in many of these cases, we have some of those parks that have seen their average wage rate go from to $10, $11 to $17, $18. That's a lot to absorb when you don't have 4 million or 5 million visitors a year to pass that through to. So as we think about the parks going forward, we're diligently working on driving improvement in margin in all those parks. We saw some nice improvement this past year when we reprogrammed parks like the mid-tier parks on the Cedar Fair side to mirror some of the best practices and the standards that we saw at some of our Six Flags parks, and that helped, but they are -- there's still a number of the parks that are -- and Christian noted, they're still well below pre-pandemic margin levels because of that inflation around seasonal labor.

So I know right after the deal closed, you talked a lot about the 10 million guest uplift, half coming from more season passes and then the other half coming from more frequent visitations. Now it seems like the mix has shifted, it's much more towards more unit sales as opposed to more visits per pass holder. Is there something you noticed in the parks that you acquired that maybe some of these parks don't warrant 4-plus visits per unit holder? Or is there something else going on that made you kind of think about the mix differently now?

Let me take that one, and then Christian, you can jump in here. What we see when we look at legacy Six parks versus legacy Cedar is very similar behavior and similar profile. It is just a little bit different mix. The behavior is the same. We think there's an ability to build more value. And part of the challenge when you can come to a park that's less crowded, you get to do everything a lot quicker. So you're in and out a lot quicker. So when we think about comfortably crowded, extending length of stay, you come more, there's more of an investment and there's more value in that visit, not just gives us an ability to drive price, but keep driving that incremental visit. Behind the scenes on legacy Six CRM, there wasn't a huge focus on driving that renewal or that repeat visitation. We've got a lot more tools because we're on fourth generation CRM to drive and engage our guests. We want an active and engaged guest, and you got to have pipelines to do that. So we've got a lot more capability to tap into consumer behavior. We think there's a wide opportunity in terms of the availability of selling more units. As I said, broader is better. Rotate the type of capital we put in and try and tap a broader audience. We think that's the real opportunity. That doesn't mean we don't see opportunity in driving the average visits, we do. But over time, that will sort itself out.

Yes. I mean, Richard, I think you've covered it. I guess I would just add as we mentioned, you look at that moving people up the value chain, right? The first step we want to move them from a demand ticket into a season pass ticket. So that's where the initial emphasis is going to be. And certainly, as part of that, we hope to get more visits per pass as the guest experience improves, as we introduce more entertainment into the parks to have more unique experience at different times of the year. But obviously, that visit per pass metric will be more skewed to drive those at specific parks. So when you look at the macro portfolio level, the impact will be a little bit more muted than that.

And I don't want to step over something that Christian said, we for years have had benefits attached to our season passes or memberships. We really do as a combined company want to jump into loyalty. And we've looked at all the other programs. We're deep in the design now. We want to roll out our first iteration of that as we head into '26. We think loyalty has tremendous opportunity to both drive sales, but also then drive that visitation, that engagement with our guest, and we'll have more for that in the future.

I'll take a few more questions if there are any. Yes, Arpine?

So it's very clear that your long-term targets are actually better than expectations out there. Could you talk a little bit about in the year -- for the year targets? I think you have previously implied something like maybe 3% to 4% attendance for this year. Is it fair to assume that, that assumption or that expectation is sort of unchanged as you see the world today versus sort of that 6% growth in attendance that you're targeting in the years out, which means that you're going to have to deliver obviously higher than 6% if you finish the year at 3%, 4% for 2025?

Yes. I'll maybe start and let Richard jump in. I think as we look at 2025, still very early in the season, right? We're only in mid-May and still more than half of our properties aren't even open yet this season. We're really excited about the capital program for this year. We've got great product in a number of core markets that we think can fuel top line growth, both attendance and in-park spend. This park in particular, you saw it yesterday with TT2 and Siren's Curse, which will be coming online, but there are a number of other parks in the portfolio. So still very early, but we're just as excited about 2025 as we were coming into the year. So I don't think our expectations have changed. We've always said that as we think about the long-term path, as I have mentioned earlier, not necessarily linear. There's an inflection point. We think the second half of this year has a great opportunity to continue to prove -- improve the guest experience at a number of the parks and fuel growth going forward at that faster than historical growth rate.

The only thing I'd add is, listen, I've always been very bullish on the back half of the year. I think there is a built-in urgency to the calendar. You get into July and August, kids are going back to school, you got to get your visit back in. There's a built-in urgency with Halloween, 6 weeks -- 6, 7 weekends of the year, you got to visit then. So there's always built-in urgency, drives you get deeper in. The other thing to remember is we talk about season pass as almost a monolith, we start selling season passes for the next season in early to mid-August. So you've got an opportunity to get two bites of the apple. The '25 program we're winding down by the middle of July, '26 is a whole new launch, a whole new -- and a different value equation in the fall because you'll be able to visit this year, but you also get all of next year. So I think as we keep making improvements, as NPS score keeps going up, I think there's more and more opportunity, the deeper you get in the calendar. And then lastly, I'll talk about the thing now nobody ever want to talk about, which is weather. July was not a great weather month last year. We think there's tremendous opportunity. That's no guarantee it's going to be perfect weather in July. But if it is, we're going to be really pleased with the results.

That's my job, right, Richard?

Yes.

Chris?

We got a non-park question for you. You guys have a handful of hotels, right, including a couple of bigger ones. And I think outside of SpringHill in Charlotte, they're not branded, right? Is there any thought to maybe talk to a hotel company about a soft brand? And then secondarily, are those kind of also potentially on the block for some kind of a sale and then management agreement? Or do you keep those separate from kind of your noncore parks and excess land?

We get that question a lot, Chris, and I understand what's behind the question. We view resorts as a core part of our portfolio. It deepens our relationship with our guests. These hotels, the ones we've been in here like today, this is seasonal. It's only open when the parks open. So there's a different level of opportunity, even to outside partners. We really like what we can drive in terms of the stickiness of the revenue and that really deeper relationship with our customer. When you look at that, SpringHill suites in Charlotte was a different kind of opportunity for us. We thought differently about it. If you look at the original plans of that, there was a sports center that was supposed to be right next to that. We couldn't come to agreement with the localities, and there's a couple of others in that area. So we ultimately didn't build that piece of it, that entertainment component next to it. But SpringHill Suites was an effort to both service the park but also tap into their res system to get people to stay, business travelers. And the hotel has done fine, but we think the better opportunity is to stay aligned with our brands, use it as we know how to use it. We've got folks -- the folks running these hotels came from Marriott and the other places. So they're deep in the hospitality experience. I think staying attached to the same customer for us represents a strategic view, and that's why I think of the hotels as core.

One more. Let's take one more in the back.

All right, James. You're a cleanup hitter.

So just maybe a point of clarification because a lot of us are going to go back and sort of screw with our models for a while. I just want to make sure we're getting this right. To this per cap question, everybody's favorite question, right? I think one of the takeaways is that since so much of the attendance growth is coming from season passes that per caps are going to need to be negative. I guess sort of is that the case? I mean, obviously, there's price increases. I mean, first on the ticket side, there's going to be price increases that offset some of that. And so question number one, are ticket per caps necessarily going to be down? And then if that is, in fact, the case, is the in-park -- sort of the benefits that you get in-park going to be enough to offset that such that maybe overall per caps can actually be flat to up as we think about this 4-year window? And then I had a follow-up to my follow-up.

We don't think they'll be meaningfully lower. We think we'll be able to pass along price increases, we see the growth, both in-park and admissions. But Brian, in terms of the specifics.

Yes. I mean I think you articulated it well, James, right? If you start breaking it apart, your admissions per cap would be under pressure from season pass. Now there's a lot of pricing opportunity at a number of our parks, right? When you look at the price -- the average price of the legacy Cedar season pass, it's in the $115-ish, $120 range. Legacy Six is closer to $75, maybe $80. So there's a lot of pricing power. How quickly can we get to that? There's a lot of puts and takes to that. It's hard to forecast that out specifically. But our objective is to get price on the Six side, which will offset some of that pressure. Season pass puts pressure as we showed on the screen. It puts pressure on the other in-park spend items as well, right? Our seasons pass holders buy all-season dining. That puts pressure on food and beverage. They don't spend as much on merchandise and games and some of the other things. So there is some natural pressure on per caps in this kind of scenario, but more crowded parks, more comfortably crowded parks, lead to longer length of stay and a higher spend, which tends to be an offset. So to Richard's point, if there's pressure on per caps, we believe when you wash through all those puts and takes, flat to maybe modestly down a little bit. We'll certainly provide more visibility into that as we get into '25 and into '26 and we start seeing how that develops. But the volume play is the right play to getting to that $1.5 billion of EBITDA and margins of 40%.

Got it. And totally agree. I mean, obviously, the revenue growth and ultimately, the EBITDA growth are what we should be focused on, but better to sort of understand for some of the nuances today versus down the road. And then sort of related question, and for the life of me, I can't remember if it was you or the legacy Six Flags guys. At one point, we were talking about sort of unique visitors. Is there any way to think about if 50 million visits, how many human beings that is today and ultimately, what that represents or what that looks like in 2028 because it doesn't seem like you need nearly as much growth in actual unique visitors given the season pass strategy?

I don't think we do, and I'll go to history as our guide. We've seen very modest low single digit growth in tickets sold, but back to Christian's funnel, we keep migrating people up that funnel so that more and more of them are buying the most expensive ticket and buying more. That's the game plan. We've -- when I go back over the 30-some years I've been doing this, again, we sell 1% to 2% more per year of tickets sold, just like -- the numbers I gave you on the last call in our e-commerce channel were up 1%. That feels about where we've always been, but more and more people migrate up the chain and give us more money and come more often.

Before we -- before I ask Richard to come up and close out with some remarks. Let's see if I can get the slide to move here. There you go. We're always interested in what you think and attending this event is no different. We would love to know your thoughts. There's a very short survey, may take you 3 or 4 minutes. There's a QR code there that you could do it with your phone. There's a URL that you can tap on your laptop, but we would love to know your feedback on your experience while here at Cedar Point this week. I'll come back in a little bit to give some instructions to the people in the room. For those on the webcast, I'm going to hand it over to Richard for closing remarks. We appreciate you joining us today. Richard?

Thank you, Michael. So guys, I want to thank you for your time. We know your time is valuable, certainly, and we appreciate your spending a couple of days with us here at our flagship park. We are excited about the future. We have -- I think we've got a compelling value creation story. We are doubling down on what's worked. We tried to show you a lot of those things as we walked the park yesterday. The concepts you saw here will work in other markets, scaled a little differently, but the concepts work everywhere. Are we different now? Yes, we're different now. We tried to hammer home this all through the -- this morning's session. There are things we can do now as a combined company that neither legacy company could do, and we think the future is very bright. So thanks for your time. We appreciate the opportunity. My team and I are confident and comfortable that we can both deliver but that there's a real bright future. So thanks for all your time. We'll see you soon.

So you guys are the lucky ones. If you can stick around, we'd appreciate you joining us at the Grand Pavilion for a fantastic lunch by Chef Major. He's prepared a menu of all the park food. So you can get all the park food in one spot. I think you'll enjoy it. If you enjoyed last night, you'll enjoy today just as much. If you want to grab your bags, got prepared to leave, let's say, gather here at 11:30, and we'll walk over as a group to the Grand Pavilion. So a little bit of time between now and then. So we'll see you back here at 11:30.