Stacy Frole - VP of IR Matt Ouimet - CEO Brian Witherow - EVP & CFO Richard Zimmerman - President & COO.

Tim Conder - Wells Fargo Christopher Prykull - Goldman Sachs Steve Wieczynski - Stifel James Hardiman - Wedbush Securities Barton Crockett - FBR Capital Markets Michael Swartz - SunTrust Matthew Brooks - Macquarie Tyler Batory - Janney Capital Markets.

Good day and welcome to the Cedar Fair Second Quarter Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Stacy Frole. Please go ahead ma'am..

Thank you. Good morning and welcome to our second quarter earnings conference call. I'm Stacy Frole, Cedar Fair's Vice President of Investor Relations. Earlier today, we issued our 2017 second quarter earnings release.

A copy of that release can be obtained on our website at www.cedarfair.com under the Investor's tab or by contacting our Investor Relations offices at 419-627-2233.

On the call this morning are Matt Ouimet, our Chief Executive Officer; Richard Zimmerman, our President and Chief Operating Officer; and Brian Witherow, our Executive Vice President and Chief Financial Officer.

Before we begin, I need to remind you that comments made during this call 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 materially from those described in such statements.

For a more detailed discussion of these risks, you can refer to filings made by the company with the SEC. In addition, in accordance with Regulation G, non-GAAP financial measures used on the conference call today are required to be reconciled to the most directly comparable GAAP measures.

During today's call, we will make reference to adjusted EBITDA as defined in our earnings release. The required reconciliation of adjusted EBITDA is in the earnings release and is also available to investors on our website via the conference call access page.

In compliance with SEC regulation FD, this webcast is being made available to the media and the general public as well as analysts and investors. Because the webcast is open to all constituents and prior notification has been widely and unselectively disseminated, all content of the call will be considered fully disclosed.

Now, I would like to turn the call over to Matt Ouimet..

Thank you, Stacy, and good morning everyone. On today's call Richard, Brian and I will provide context for our results today, as well as provide some perspective on our expectation for the balance of the year. As we stated in this morning's release, we expect 2017 to be another record year.

Although results through the first half of the year were softer than we would have preferred, there are several factors which support our forecast of an 8th record year. First, our July results were solid. In fact this is one of the best July's in the company's history.

Second, record sales of season passes and season past related products produced a $20 million increase in deferred revenue as of the end of the second quarter. Obviously, all of this will ultimately be recognized over the balance of the year. Third, group booking for the balance of 2017 are trending meaningfully ahead of the prior-year.

This validates the recent upgrading of our catering facilities and the expansion of our sales teams. We have roughly 40% of our anticipated attendance still in front of us including our Halloween programming which produced some of our biggest days of the year.

And new this year we are expanding WinterFest to three more parks which will add roughly 70 more operating days in 2017 and will serve as a strong incentive for 2018 season pass sales. I know our investors have always valued our commitment to transparent communication including snapshot updates beyond the quarter end.

In return I would appreciate that our investors understand it is difficult to extrapolate short term trends to full-year results.

With that caveat, I want to be clear that while we expect this to be another record year, our cash to achieving our long-term adjusted EBITDA target of 500 million a year earlier than originally planned has got more difficult.

It will be important for us to maintain the strong attendance of revenue trends from July into the busy month of August, and for our parks to deliver under multi week Halloween and WinterFest events.

While demand support for 2017 forecast are on a more qualitative basis, the experience we are delivering to our guests is the ultimate underpinning to our success in both the near and long-term.

Richard can do a better job than me of helping you understand how the decisions we make drive a very real difference in the quality of the guest experience and in return our financial performance.

Richard?.

Thank you, Matt, and good morning everyone. As you know, continuing to invest in new rides and attractions is an important lever in our business model. Over the past several years we've created a disciplined internal process that supports our capital investment decisions.

Through this process, we are transforming our parks into the place to be for fun or guest of all ages. Our investments are booked on a balanced mix of thrill and family-friendly offerings at each of our parks to sustain our valuable family team audience mix. Our three largest capital investments in 2017 are exceeding our expectations.

Kings Island is forecasted to deliver the best year at history driven by Mystic Timbers, its new world class wooden roller coaster, as well as the anticipation of the return of the parks WinterFest event this year.

Our other two major investments, the water park transformations at Cedar Point and Knott's Berry Farm have not only delivered a great guest experience, but they also enhanced the water park business model by improving the quality and capacity of our food and beverage offerings and increasing the length of stay of our guest at these two parks.

It is also clear that our ongoing investment in high-quality group catering facilities has differentiated Cedar Fair from other group entertainment options. Modernizing our catering facilities and our group business model has been a multiyear effort that continues to produce results both in the year of investment and over the long-term.

We continue to view this advanced purchased channel as a key area of growth at our parks going forward. Finally the expansion of our children's area at Kings Dominion combined with the introduction of a new Pre-K season pass program, have that park on pace for its best attendance year and more than a decade.

With success of the Pre-K program here and the two other parks this year have us working on plans to roll the program out to additional parks in the near future.

As many of you know, over the last several years we placed an additional focus on multi week special events that leverage our unique regional brands and in some cases extend our operating season. These events offer a complete immersive experience at a quality and scale, no other regional amusement or entertainment venue can match.

We would recommend our already mentioned our award-winning Halloween events in October when some of our busiest and most profitable days take place. This year for Halloween, our parks will offer more than 120 haunted attractions, more than 40 hair-raising shows, and will have more than 5,000 monsters roaming our midways.

We plan to carry the success into the months of November and December with the introduction of WinterFest at Kings Island, Carowinds and Worlds of Fun. This event not only extends the productivity of our parks establish asset basis but also enhances the feel of our season pass programs.

For WinterFest, these three parts combined are projected to entertain an incremental 500,000 guest or 2% of our overall attendance during the last two months of the year.

I can assure you that our part general managers and their teams are very much aware this expectation and are prepared to light of the parts and deliver an immersive experience in a way our guests have never seen before.

The success of our investments so far this year has been somewhat muted by unfavorable early-season weather, and the related softness in attendance at several of our parts including our largest amusement Park Cedar Point.

However, with more than 40% of our full-year attendance still to come over the next several months, we believe we still have an opportunity to recoup those early-season shortfalls. When weather and more importantly forecast have been good, attendance at our parks has been strong and more importantly guest are staying longer and spending more.

We continue with our long-held belief that inconsistencies and weather will average out over the course of a full operating season.

This belief combined with a solid outlooks for our Halloween and WinterFest events at our parks gives us confidence 2017 will again be a record year for Cedar Fair., Now I will turn the call over to Brian to discuss second quarter financial and results to this past weekend in more detail.

Brian?.

Thanks Richard and good morning. As Matt noted at the beginning of this call, it is always difficult to extrapolate partial season performance into full year results. As of this past Sunday, July 30 more than 40% of our forecasted attendance and some of our most profitable operating days are still to come.

First, I’d like to briefly discuss our results for the second quarter before moving on to more current revenue and attendance trends. As detailed in our earnings release this morning, net revenues for the second quarter ended June 25, 2017 were $393 million which is up $5 million or 1% when compared with the second quarter of 2016.

In the quarter attendance increased 2% or 134,000 visits to 8.1 million guests. Other park revenues increased 3% or $1 million to $42 million and average in average in-park guest per capita spending was comparable with the same period last year.

Excluding the closure of a non-core stand-alone water park in September 2016, attendance on a same park basis was up 3% or 203,000 visits.

Our attendance growth during the quarter was the result of our strong capital program in 2017, the success of our early-season multi-week special events and the later Easter holiday which fell into the second quarter this year versus the first quarter last year.

This was somewhat offset by an anticipated shift in attendance into the peak vacation months of July and August due to the significant investment and our two separately gated outdoor water parks this year combined with higher than average rainfall in the Great Lakes region in the last two weeks of June.

In regards to average in-park guest per capita spending we saw pure in park guest spending increase by 1% in the quarter primarily within our food and beverage category which was driven by the continued growth of our all season dining and beverage programs.

This increase was offset by a 1% decrease in admissions revenue per capita which we attribute to a higher season pass attendance mix and the recognition of season pass revenue over a greater number of park visits at three of our parks that will now be opened in November and December.

To take out the accounting noise from our season pass program and the recognition of revenue on incremental visits over a longer period of time, admissions per cap on a non-seasoned pass base increased 3% during the second quarter.

Sales from season passes and the related all season products for 2017 have increased almost 10% when compared with the record sales from last year. The growth in season pass sales is the direct results of increases in both the number of passes sold, as well as the average price paid per pass.

Through this past weekend, we've now sold a record number of season passes and the average visitation per pass is also up year-over-year. At the end of the second quarter, our differed revenue balance totaled $193 million representing an increase of $20 million from the second quarter of 2016.

The 12% year-over-year increase in deferred revenues is largely attributable to the increased sales of season passes and all season products and to a lesser extent the recognition of this revenue on the incremental visits at three of our parks over a longer period of time due to the addition of WinterFest.

All of this deferred revenue will be fully recognized in the second half of this year. Moving on to the cost fund. Operating costs and expenses for the second quarter of the year totaled 246 million representing a modest increase of 1% or $3 million from the second quarter 2016.

The increase in operating expenses was attributable to normal merit wage increases and the timing of operating supply expenses related to several large capital projects that opened in the second quarter.

I want to assure you that as a team we remained highly focused on managing operating cost as we pursue our long-term strategy to maintain our historically high adjusted EBITDA margins, while continuing to invest in a guest experience.

A disciplined approach to expand and capital investment management remains a core initiative to the long-term success of the business. Meanwhile adjusted EBITDA as we believe is a meaningful measure of park level operating results totaled $150 million for the second quarter of 2017 up 2% when compared with the same period year ago.

Turning our attention to results through this past Sunday, July 30. Based on preliminary results, same park net revenues during the first five weeks of the third quarter were up 1% or approximately $4 million compared with the same period a year ago. This increase was largely due to a 2% or 106,000 visit increase in attendance.

During the same period, average in-park guest per capita spending and out of park revenues were comparable with the same five week period a year ago. When factoring in these preliminary July results year-to-date, net revenues on a same park basis through this past Sunday were up 1 million to 767 million.

This increase in preliminary topline revenue was driven by a 62,000 visit increase in attendance to 15.1 million guests through the first seven months of the year and a $1 million increase in out of park revenues to $87 million.

Over that same period, average in-park guest per capita spending was down less than 1% to $46.57 due largely to the meaningful shift in attendance mix towards season passes. The strength of our July performance gives us confidence in 2017 plans. Our long-term strategy is working and the fundamentals of our business model remains strong.

Given where we are in the operating season, it will be challenging to fully recover some of the shortfalls we experienced during the first half of the year however not impossible.

Especially when we take into consideration, the addition of three new WinterFest holiday celebrations in November and December and the second year benefit of WinterFest at Great America. We do believe weather will leverage itself out this year and our long-term strategic plan is not dependent on any one quarter.

We will continue to monitor trends and make adjustments where we deem appropriate but as we said in the past, if it rains on any given Saturday, you don't change your strategy on Monday. Now let me shift focus to our balance sheet for just a moment. We ended the second quarter in strong position in terms of liquidity and financial flexibility.

Our receivables and inventories are at normal seasonal levels and we have credit facilities in place to fund current liabilities, capital expenditures and operating expenses as needed.

At the end of the second quarter, we had $101 million in cash on hand and $739 million in variable rate term debt before giving considerations to fixed rate interest swaps. We also had 937 million of fixed rate bonds and no borrowings under our revolving credit facilities.

Our total term dent only $8 million is scheduled to mature within the next 12 months. Based on our current adjusted EBITDA expectations, we anticipate our total leverage ratio at the end of 2017 will be approximately 3.4 times debt to adjusted EBITDA which is well within our comfort level.

Finally, we're pleased to report that our Board of Directors declared an $85.5 per limited partnering unit distribution to be paid on September 15. This is consistent with our previously announced annualized rate of $3.42 for limited party unit which represents an attractive 5% yield at today's prices.

And with that, I’d like to pass the call back over to Matt.

Matt?.

Thank you, Brian. Before we turn the call over to questions, I just want to say how proud I am of our team for their hard work and dedication to successfully bolster our talent and competencies in a number of new areas.

We are much better positioned today to optimize each and every interacts with our guests and not only does this drive profitability, it delivers the better guest experience as well. We have high expectations for the remainder of 2017 and we have even higher expectations for 2018.

On August 16 our parks will be announcing our capital plans for the 2018 season and we have a very strong line up of new rising attractions including four new roller coasters and an additional 158 room tower at the Hotel Breakers located at Cedar Point's mile-long beach.

As always we will continue to work for generating greater excitement for our guests, as well as long-term value for our unitholders. Now we will open up the call for questions..

[Operator Instructions] Our first question comes from Tim Conder with Wells Fargo. Your line is open..

Just a few questions here gentlemen relating to weather. Can you talk about the - you talked about how there was some impact in late June, July any impact there that you didn’t call out given the comparables of last year.

And then also discuss how your August weather was last year and just I guess the set up here for this key month?.

Look I think July weather we would tell you was a little bit inconsistent but not anything that we would say at normal in one direction or the other. In August if you recall last year had a couple weeks where the weather was extremely warm but most importantly and I think this is what's really important for this call particularly.

We’re expecting the balance of the year to be average and if we just get our average weather that we've had in the last several years we should be in good shape?.

And then couple of things on your programs here, the Pre-K program that you called out, maybe you could expand on that a little bit.

And then just give us an update on a year-to-date basis how your unique visitors are trending on the season pass, your daily walk of visitor and then your group of visitor?.

I am going to ask Richard to do Pre-K, let me take unique first. So we would be down in unique visitors so far year-to-date.

So I'm going to add as obviously reflected in the attendance mix that we talked about that had a greater season pass mix but the reality is the largest portion of our unique visitors happened in this July, August and Halloween timeframes.

And so as quietly somewhere else reminds me every year it’s tough to measure uniques in the middle of the year but given our attendance trends we would obviously go down so far this year but would expect it particular with WinterFest and the year of how is the situation. Rick Pre-K..

With regard to Pre-K Tim, good morning - important program for us as we looked at ways of generating incremental audience and looked at the potential barriers of visitation. When we look at the youngest member of the family, we found that was often one of the decision factor.

So we rolled out our Pre-K program which targets someone in early age, gives them a free season pass to come going to register by certain time in late spring.

So mechanics work for us we’re very pleased with the penetration rates and the response we got in all three markets but particular at Kings Dominion marrying it up with the children's product we put in there in Planet Snoopy issue really the message resonated. So we’re pleased with its performance and I think it’s got potential in rollout next year..

So the Pre-K ticket if they register by a certain point appeared up with obviously a parent or a caretakers season pass and that's a Kings Dominion and what are the two parts Richard?.

This year, Worlds of Fun and Valleyfair..

Okay..

Tim I want to just add the reason that we are so confidence that program is because our CRM system and because of our revenue management system.

We really been able to measure the increment healthy there and so it gives us greater confidence that you know on balance we picked up a significant number of people who we wouldn't have seen before and so that's why Richard I think is leaning into it..

Our next question comes from Christopher Prykull with Goldman Sachs. Your line is open..

So just trying to get a better sense for when you look at the first-half our results through July beyond weather it just seemed like industry-wide trends have been a little bit soft there.

Are you seeing anything in consumer behavior either before the customer gets to the park or once they are actually there that concerning as we headed into back half or into next year.

And then has there been any notable resistance to price increases year-to-date?.

I am not surprised you asked the question, so the way we think about is there are three things that you got to reflect on one is consumer behaviors have changed, a systemic change in consumer behavior.

With 11 parks we have the opportunity to look across a wide spectrum and if this was a systemic issue you would see it across at least the majority of the part and that is not the case as Richard referenced I think Brian as well several of our parks are having outstanding years. So we don't see a systemic change in consumer behavior.

The second thing you have to look at is your step how do we feel about the quality of investments we put in place, did they open on time those type of thing. And we feel really good about our strategy particularly water parks have helped us this year the two largest of our park.

And then the third is execution and you have to ask yourself, did we get sloppy, did we lose urgency and that clearly is not the case for us. So I don't think there was anything as it is in the first year of that year that I could tell you we would have done differently. But obviously we’re paying close attention.

And then as I mentioned earlier, we’re going to lean into the product that we now have for '18 and quite honestly four roller coasters across some of our biggest park should make an impact in '18..

As far as pricing is concerned with the bifurcated economy there is always going to be pressure on certain channels when it comes to pricing.

With that said we continue to lean into periods where demand is high so if you can imagine, weekends, Saturdays during the core season and then as we get on hot those are high demand period then we lean into pricing but at the same time we've got programs that are geared towards the value only in consumer.

So as I said on the call in the prepared remarks, if we sort out the noise of season passing in some of the accounting related to those deferred revenues getting spread over a longer period of time with visitation from season pass definitely when we look at just the non season pass tickets we’re driving a 3% admission per cap increase year-to-date which we feel really good about in this economy.

And then we look at how guest are spending in the park, our in-park spend on pure in-park items foods and beverage primarily both usually the big leader, merchandise et cetera that's up year-to-date.

So I think as we think of pricing if again if that geared towards both the bifurcated economy that has or has not so the benefit organic folks and the value on your folks but we feel really good about where we’re out right now..

And then I guess just on the $500 million target given the results through July obviously implies an acceleration in growth in the back half.

Just trying to gauge your confidence in that target and can you maybe help frame the puts and takes that would get you there versus what would happen for you to come in slightly below?.

We don't try to be very caution on these calls, it’s just going to be a little bit of a challenge for us to get to the $500 million a year earlier than we had originally forecasted in our long-term plan. That being said, if the July trends continue we would expect that would drive us to the point it was 2% up in attendance in July that continued.

We feel pretty good about $500 million and then I will tell you and we're not as good as salespeople may be others are, I have real high optimism around the WinterFest activities.

These are compelling we’re investing pretty heavily to the probably the WinterFest and if that meets or exceeds our expectation that would be the trigger to get us to over the $500 million..

And just one last one, can you provide any further color or details on the Cedar Point’s sports complex year-to-date in terms of performance.

Is there an update on new facilities at other parks I believe you announced a new indoor facility at Cedar Point anything interesting to share there and then sort of how has the visitation related to sports translated to park spend in attendance or length of stays or hotels?.

So I’m going to give you a little abbreviated answer here Chris There are still negotiations going on in indoors and Sandusky and in another location but the macro give you - the sports complex has booked and is delivering more than twice our expectation of tournaments in the first year. And so we feel really good about that.

We are working closely with those to translate those into ticket and admission in the park but we’re not going to quantify that separately. So I would say the amateur sport initiative remains very health with us. It also obviously drives not only incremental admissions but certainly incremental hotel rooms.

And that season of sports complex even the outdoor is expanding beyond the period of time when the parks open so it will help our hotels and generally they are empty. So we’re very positive so far but still and it seems appropriate to say early innings..

Our next question comes from Steve Wieczynski with Stifel. Your line is open..

So I want to get back to the $500 million target I am probably beating a dead horse a little bit here, but and I’m probably actual reading into this too much. But if I go back and we look at your July 6 release language around the $500 million target.

To me it sound a little bit more pronounced that you guys felt more comfortable four weeks ago versus what you put in the release today. So I guess what I'm getting at here is, am I reading too much into that or were you guys maybe expecting a little bit more out of July..

We did not read too much into. I think if you are sitting on our table, you would have heard those same conversations and I think we were hoping for a little more out of July.

The building block is to get there as we started to talk about, including the $20 million of deferred revenue that’s sitting in the balance sheet, is one reason that we still feel confident in our ability to post that number. I never want to get out of our skews when we talk to our investors.

And so, it’s going to be a challenge, but we still feel like, we’re going to get there..

And then second question on pass sales. It sounds obviously like pass sales continue to move along pretty nicely at this point. Is there any way you can break down where you're seeing an uptick in pass sales. What I'm getting at here is, the parks where you've invested more or adding additional days.

Have you seen those regions seen a pretty nice uptick in pass sales?.

The vast example we’ve got is Kings Island, which has always been one of our largest season pass days, is to start with but the announcement of WinterFest which is there for small number of years as really served the catalyst for more season pass out there. And they are not the only example this year.

But quite honestly, our CRM system, which is now been in place for four or five years has allowed us to not only renew at higher rates across the board. But prospects for new season pass.

And then Richard mentioned a very successful program, which was our Pre-K program so, I think you’re going to continue to see season pass units grow and we didn’t touch on it much. But the season pass related products such as dining and beverage and photo and even FastLane, season pass FastLane all continue to increase in penetration rates..

Our next question comes from James Hardiman with Wedbush Securities..

I guess if street beat the dead horse on the $500 million, am going to pretty much bury the things at this point. But I was hoping we could run through – hoping we could run through some numbers. So basically, revenues are down a percent in the first half, EBITDA is down 8%. It needs to grow 4% to get to that 500 million.

So, you're talking about pretty significant growth in the second half by my math about 7% EBITDA growth. So I guess hopefully, I got that math right. But my two questions would be, I guess one, what are revenues need to grow for you to get to that 500 million. I guess in other way of asking that is, what's the sort of margin benefit.

And secondly to the point about July relative to the rest of the quarter, July revenues being up 1%.

Is 3Q growth of 1% and revenues going to be enough to get you to that 500 million because it would imply a pretty massive increase in the fourth quarter just given how small it is relative to the rest of the year? Now, I know you have WinterFest going on.

So, just want to make sure that I generally got the phasing correct, as I think about modeling the back half?.

I won’t get into necessarily all the specifics. But I will tell you that, your general math is pretty much spot on. 1% continuation from July, which is a little north of why it fits, maybe little closer to 1.5, that isn’t going to be enough. We need to see more lift in August.

As Matt said, knowing that we’re sitting on $20 million worth of deferred revenue again in Q2, that’s sitting there knowing what we know in terms of our bookings on not only resorts but groups the rest of the year. Some of those initiatives gives us confidence that there is a path.

But you’re exactly right, it’s not necessarily the easiest, which is hopefully what came through in our prepared remarks. 500 is not off the table, but it’s going to be really hard..

And just as a follow-up to that. The deferred revenue in 2Q, the reason for some of that, I was assuming that you get a lot more of that in 4Q. But how should I think about realizing those – those deferred revenue in the back half.

Do you get a significant amount of that, that in the third quarter as well?.

No, doubt. So, we’ve actually sequentially five parks that are going to have operations in Q4. Right. The three new WinterFest parks, a second here at Great America’s WinterFest and then not very far.

So, the balance of the properties, that deferred revenue that their portions is going to all be coming through and essentially the big chunk in Q3, of course it’s not as big from other parts of that will happen in October as well. But there is definitely pent up demand. I think we saw that in July, right.

I mean the pent up demand from Q2, started to come through in that attendance lift that we talked about for the month of July. We would fully expect more of that to happen in August. And if we’re going to get the 500 year earlier than originally planned, we’re going to need that pent up demand to happen in August and September as well..

And then lastly for me, I think we all agree that, maybe the first half wasn’t quite where we expected it to be. But one of your comments Brian, made it seem like maybe what you guys were expecting was exactly in phase with what the Street was expecting, in part due to the accounting noise that you spoke to.

Can you just walk us one more time through, how we should think about the longer operating season for the year and how that impacted, whether you want to second quarter or the first half. How that impacted, attendance per cap EBITDA.

How we should think about all that?.

So, as we think about, one of the things that you have to keep in mind and we keep reminding ourselves this as well, is that, this is the first time, through this for all this to go parks as far as WinterFest is concerned.

And so, as I said in the call, we are spreading revenues related season passes and multi visit ticket as well as the off season products like dining and beverage over a longer period of time or maybe there was more property to say as over more visits. So, we’ve assumed certain visitation at each one of the parks.

As Matt mentioned at park that can by with WinterFest. It’s one of our largest season pass days park. So we think a big chunk of that visitation for that is now will season pass related.

So, it probably has a bigger effect on spreading their revenue out little bit more than, maybe say park like Worlds of Fun, which we will have season pass days, it’s not nearly as big. We would anticipate their mix visitation maybe there to be a little bit more skewed towards single day visit.

So, we think there is definitely a spreading out of revenues related to those all seasonal multi visit types of products. But we’re going to learn into the first year. And so, I can tell you one thing for sure, we’ll be smarter after how the visitation happens this year.

For the most part, we’ve assumed about little more than one visit on average per pass related to the WinterFest at those parks. So, that’s having a meaningful affect, when you look at the second quarter. When you look at the year-to-date numbers that definitely as an impact on the drop and the early season revenues..

Our next question comes from Barton Crockett with FBR Capital Markets. Your line is open..

I wanted to ask about, I guess bonuses and incentive compensation, given that it’s become something of an issue for the group with your peers accruing - compensation.

Can you hear me, right?.

We are promised based upon and adjusted EBITDA target established by the board and then we have a long-term incentive, it’s a three year cumulative adjusted EBITDA..

So, my specific question was. If you guys don’t hit the 500 forward target a year early this year.

Is there any impact in terms of accruals for bonuses or incentive that would be meaningful?.

So, the way our program works is, there is two primary components for incentive comp. A big difference than maybe some others in the industry but there is the FDI, the short-term incentive which is based upon an adjusted EBITDA target that the Board establishes annually, with a significant, the cap committee determines and the Board approves.

And then there is a cumulative, at that time, they establish a cumulative three year adjusted EBITDA target which is our LTI target.

That is the three year cumulative effect, so if we miss this year both FDI in the current year and the LTI over time through it’s part of this year’s role in three years, programs would result in a reduction in the compensation for management.

There is also a cliff associated with that and it’s a 90%, If we miss our target of the 90% at least on the FDI, I don’t remember the LTI at the top of my head, then it would be zero..

Can you give us some sense of the magnitude of that competition that we’re talking about?.

Probably not appropriate for this call. It's all disclosed if you will. If you want to look in the proxy, it’s - the thing I want to go on the record is saying, this management team is kind of doing its absolute best independent of the competition program. It’s just the way we’re wired.

And obviously, it’s to our economic advantage to deliver better result. And history would say we’ve done that. But it’s not to keep the pressure on us, but it’s not the primary driver..

One other thing I’d just, bigger picture wondering if you could address. One of the fundamental investment theses for the group has been that there’s not really construction of meaningful new theme parks happening, hasn’t been happening for a long time. No sense of that’s changing right now.

I think there’s been some discussion from other quarters arguing that that's so much of baloney in fact, there’s meaningful new construction to pointing some Legoland development, some parks coming back to Houston, shopping malls in New Jersey.

I was just wondering if you could give us a supply and issue in this group, is it an advantage relative to others? How would you describe the supply to dynamics and theme park industry at this point?.

It’s a fair question, Barton, and I’d like to turn baloney, I’m not sure what to do with it. But it doesn’t mean the industry as long as anybody in the regional music park industry, and I do know that the barriers to entry are real. I think you could see a couple of difference.

Lego is probably the most likely to occur assuming that it can get through the zoning but it’s also evidence of how difficult it is to get something done. There’s been the rumor mill about, I think it’s called Green Land in New Jersey, at the Middle Land park. That’s been out there for a long time.

I can’t tell you the probability of those at this point in time, but history would tell you not only is it difficult to get one up, it's difficult to make one successful. So I don’t really, at least for our portfolio, I don’t worry about those elements.

Candidly, one of our most successful parks is the second most competitive park in the country which is not very far, it’s Southern California. But I would not be sorting a stock simply because they’re talking about Greenland at New Jersey..

Our next question comes from Michael Swartz with SunTrust. Your line is open..

Just wanted to kind of drill into the impact of the closure of Wildwater Kingdom last fall and the impact in second quarter was about - looks like 69,000 visits.

Maybe quantify what the impact was to per caps revenue and then maybe how to think about a similar impact as we sit here in third quarter?.

So as it relates to Wildwater Kingdom, let me say, part of the motivation for closing that park after '16 was that if you look at it on a full-year basis, it wasn’t a meaningful contributor at the revenue or EBITDA level, particular at the EBITDA level.

Last year for full year, it would have generated attendance probably a little more of 200,000 visits. Now as we look at results through the end of July, you’re probably looking at maybe three quarters or so of that is the impact through those July results.

So, as we think of balance of the year, there’ll be a little bit more impact to attendance but not a meaningful mover in terms of EBITDA contribution..

And then just I think on your July update, you had indicated that currency had an impact on some of the per caps revenue. But it doesn’t seem like you’ve outlined that here.

What was the overall impact of currency in the quarter? And then just where the Canadian dollar has gone since, call it, June-July, how to think about that in the third quarter?.

So I’d tell you year-to-date, the impact of currency, Mike, has been comparable or in line with where it was last year, not materially different. No doubt, within the last several weeks, we’ve seen Canadian dollar strengthen. And so as we look going forward, that’s encouraging. But that’s something that is so far beyond our control.

That’s one of those macro factors like whether that we’re not necessarily doing anything to hedge it. And so it will be what it’ll be, but we definitely like the momentum that we’ve seen over the last several weeks..

[Operator Instructions] Our next question comes from Matthew Brooks with Macquarie. Your line is open..

First, a follow up on the Sports park one, was it a tailwind at all for the second quarter result, or is it still too early given it's just opened. I know you referred to double the expectation in terms of….

It was not part of the tailwind. I guess maybe I’m not interpreting your question. It’s been a net positive versus what we anticipated..

And more generally on sort of the acquisition landscape for the industry, I just wonder if you can sort of review what kinds of assets do you think would sort of fit into your portfolio? And maybe as well how your MLP structure would actually give you an advantage perhaps in terms of --?.

I think history kind of describes why we make a good acquirer, for two reasons. One is I think we’re very good at integrating these into our overall systems and structure. And so we bought, I can name both a handful of family parks we bought using current, in each case, we used our MLP structure and used the unit based currency.

And then in the Paramount acquisition, we obviously raised debt and paid some cash. So we’re a good acquirer. We can tuck things in under the MLP if, in fact, the seller is motivated to do that, which most of the individual owners would be. So we’re an acquirer if the right assets come to market.

There’s only a handful of assets out there that would probably fit well in our portfolio but we’re an acquirer if that would happen..

And if you were looking to add something, is there sort of like a critical mass or size of a park that where you’d stop and look at it? Like maybe have to have a million visits or something like that..

There are some that would drop below the radar. I don’t know that it’s an absolute filter of a million, but there are some that would drop below the radar because it probably would not get prioritized from a capital allocation standpoint. But, again, the ones that are out there that are running and are running successfully are all public knowledge..

On capital spending, can you tell us, first, like how much you've spend in this last quarter? And just remind us like what do you expect the spend for the full year? And I know you’re going to make an announcement soon but maybe how much the budget you think is in total for next year..

Sure. As we think about going forward, we said in recent conversations in call is that the capital program, the drive and kind of growth that we’re looking for in topline revenue and EBITDA probably is going to be in that $130 million to $140 million range for the core.

As we think about those projects that’s still outside of that, Matt alluded to earlier on the call, the Sports complex, we've talked in previous calls about outstanding our accommodations portfolio, those amounts or those projects would sit on top of that investment.

I think what you’re going to expect us to do in the next long term plan is to begin to articulate our capital program at least from a core in terms of a percent of revenue, again. I think we liked the discipline internally that that drives. And I would expect that that will sort some place probably into that 9.5% to 10% type of range going forward.

As far as current year is concerned, we've - I know the number isn’t out there, but what you’ll see on the cash flow statement in the Q is something close to about $125 million in CapEx through the first half of the year..

Our next question comes from Tyler Batory with Janney Capital Markets. Your line is open..

Just two quick ones for me.

Can you talk a little bit more about results of the Waterpark expansions and how those compared against your expectations? And then also when you look at the new events here, WinterFest, can you talk about your expectations for how those could end up driving past sales in 2018?.

Let me take that one Tyler, it's Richard. Good morning. When we think about the WinterFest impact, I’ll take that one first, I referenced in my remarks that it could be as much as 500,000 expectation, in terms of total attendance, 2% of our total. We saw last year in our first year at Greater America was substantial and significant interest.

So we anticipate that it will be very meaningful in terms of its impact on 2018 sales which typically would go on sale on late August. So we would expect to see this year, what we saw the last year and the first year at Great America, we were pleased a little with that.

In terms of two water parks, in spite of some weather issues that we referenced in the upper mid-west, I would tell you that from a portfolio perspective the investments in the Waterparks have performed really, really well. Couple of things we did. We brought both of the water parks up to what I call a water park standard.

We have been investing in all water parks for several years. We think it’s an important key component in driving value to the season pass. But the other thing we also did and this is I think part of our longer term strategy, we invested in high end food engines and really upgraded our food and beverage capacity within the water park setting.

So part of the challenge we always have in the water park is they - our guest don’t always have their wallets with them but what we’ve seen is a tremendous increase in all season products.

And from a season pass perspective, particularly the all season dining and beverage, and our season pass was we use them not only in the hard ride parks, but also in water parks. So as you continue to see our emphasis on season pass, we think water park plays a meaningful role..

I just punctuate a couple of things he said. One is, water parks play a very meaningful role in these fields and season pass program. And both Cedar Point and Knott's Berry Farm expect to have record attendance at their water parks this year.

The second is, we’ve improved the economic engine of the water park by finally giving guest enough food, absence and capacity so that they can comfortably buy something, sit in shade, and stay longer in the water park. So I think not only is it a better experience, it’s a better economic model..

That concludes the question-and-answer portion for today's call. I will now turn the call to Matt Ouimet for closing remarks..

So, I’m going to go off-script a little bit which will make Stacy nervous. But, look, I thought the quality of questions today were spot on. So I appreciate the diligence and the investment everybody makes in following and supporting Cedar Fair. I know many of you on the call have had the opportunity to visit a Cedar Fair park this summer.

For those of you that haven't, I encourage you to take time to visit one or more of our parks to truly experience what differentiates Cedar Fair from others. Back to you Stacy..

Thank you everyone for joining us on the call today. Should you have any follow-up question, please feel free to contact our Investor Relations department at 419-627-2233, and we look forward to speaking with you again in about three months to discuss our third quarter results..

That concludes today's call. Thank you for your participation. You may now disconnect..