Oct 20, 2015
Operator
Good morning, ladies and gentlemen. Welcome to the Six Flags Third Quarter 2015 Earnings Conference Call.
My name is Kayla and I will be your operator for today's call. During the presentation, all lines will be in a listen-only mode.
After the speakers' remarks, we will conduct a question-and-answer session. Thank you.
I would now like to turn the call over to Nancy Krejsa, Senior Vice President, Investor Relations and Corporate Communications for Six Flags.
Nancy A. Krejsa
Good morning and welcome to our third quarter 2015 earnings call. With me today are Jim Reid-Anderson, our Chairman, President and CEO of Six Flags; and John Duffey, our Chief Financial Officer.
We will start the call with prepared comments and then open the call to your questions. Our comments will include forward-looking statements within the meaning of the federal securities laws.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in such statements, and the company undertakes no obligation to update or revise these statements. In addition, on the call, we will discuss non-GAAP financial measures.
Investors can find both a detailed discussion of business risks and reconciliations of non-GAAP financial measures to GAAP financial measures in the company's annual reports, quarterly reports, or other forms filed or furnished with the SEC. This time, I'll turn the call over to Jim.
James W. P. Reid-Anderson
Thank you very much, Nancy, and good morning everyone. I'm really proud to share that we delivered yet another record quarter for our shareholders.
In fact, the third quarter was the best quarter in the company's 54 year history. Our LTM modified EBITDA now stands at $504 million, surpassing the $500 million aspirational target we set for 2015 back in 2011.
We have now achieved both aspirational projects that we set for ourselves. First, was Project 350, followed by Project 500.
This would not have been possible without the hard work and dedication of every single Six Flags' employee. We truly have a high-performance team at our company and our focus has already turned to our next target Project 600 to deliver $600 million of modified EBITDA by 2017.
I'm also really proud that our LTM modified EBITDA margin increased another 20 basis points, reaching a new industry high of 40.9%. And our LTM modified EBITDA less CapEx margin increased to 32.5%, also an industry high.
In addition, we grew our LTM cash EPS to $2.98, an increase of 19%. Our strong performance has been driven by several factors.
First, is the ever improving and high quality atmosphere our guests experience when they visit our parks. Our guest satisfaction ratings are superb.
And I'm proud to share that our value for the money rating is at an all-time high and has improved every year since 2009. Second, is our new rides and attractions, which are among the most unique and innovative in the industry.
In fact, Fright Fest at Six Flags Magic Mountain was just voted the Best Theme Park Halloween event in the country by readers of USA TODAY followed closely by Six Flags Great Adventure who came in second. It is an honor to be recognized by our guests and fans for the tremendous effort we have made over the last five years to make Fright Fest the biggest, best, and scariest Halloween event ever.
Third is the success of our pricing and season pass strategies. Implementing moderate price increases year-after-year, and up-selling guests through our highest price passes have been fundamental to our success over the last six years.
Throughout 2015, our active pass base has been the highest ever, evidence that our season pass holders and members understand the value of our offering. These guests are our most loyal and profitable guests, and the 25% growth in the active pass base is further evidence that our strategy is right on track.
Fourth, in-park revenue growth continues to be very strong. Year-to-date, we have generated more than double the revenue growth in absolute dollar terms than we registered for the whole 2014 season.
The growth primarily came from food and beverage sales, led by our All-Season Dining Pass, which has been extremely popular and continues to grow. Finally, we have the best team in the industry, and that team is delivering big time.
All of these areas will continue to be the foundation of our growth strategy going forward, guest service, innovation and improving value for the money so that we can create pricing and share of wallet opportunities for many years to come. In summary, we are very well-positioned to register another record-breaking year in 2015.
John is now going to share a few more details on our Q3 financial results. John?
John M. Duffey
Yeah. Thank you, Jim, and good morning to everyone on the call.
Before I get into the details of our performance, I wanted to start by saying I continue to be very pleased with our success in generating attendance, revenue and cash flow gains. Our third quarter and year-to-date performance clearly show that the strategy we have in place along with our focused execution have and will continue to drive shareholder value.
I'll start with the quarter's performance followed by a discussion of year-to-date results and finish with a review of our cash flow and capital structure. Total revenue in the quarter increased $33 million or 6% as a result of a 7% increase in admissions revenue and an 8% increase in in-park revenue, partially offset by a decrease in sponsorship, licensing and accommodations revenue.
Foreign exchange associated with our parks in Canada and Mexico continued to have a negative impact in the quarter when compared to prior year. If you adjust for foreign exchange, revenue grew $41 million or 8% with admissions revenue up 8% and in-park revenue up 9%.
Both the growth and admissions revenue and in-park revenue were driven by strong attendance, which grew 9%. The attendance gain was driven by strong season pass visitation with unique attendance continuing to grow nicely.
As we had anticipated, the higher attendance mix of season-pass guests put downward pressure on our per caps. Admission revenue per capita decreased $0.65 with foreign exchange accounting for $0.36 of the decline.
We continued focusing on driving in-park spending with creative products and marketing. In-park revenue per capita decreased $0.27 in the quarter.
The decline was almost entirely due to negative foreign exchange, which accounted for $0.26 of the decline. After adjusting for foreign exchange, in-park revenue per capita was flat as a result of the higher mix of season pass guests.
As we have stated since 2010, our strategy has been to maximize revenue and cash flow by increasing both pricing and attendance. And we have done that successfully over the last six years through a balanced approach of the two.
Given our guest satisfaction ratings and the fact that we remain well below our peak attendance levels, we believe we are only partway through our pricing and season pass penetration programs. Cash operating expenses increased $12 million in the quarter, or 6%, largely due to higher labor costs.
On a year-to-date basis, revenue was up $54 million, or 5%, driven by a 9% increase in attendance, partially offset by a 3% decrease in guest spending per capita. Strong season pass mix and negative foreign exchange negatively impacted guest spending per capita.
If you adjust for foreign exchange, revenue increased 7% and guest spending per capita decreased 2%. We continue to leverage our cost structure through programs that drive efficiencies in our operations wherever we can.
Year-to-date cash operating expenses were up 4%, mainly driven by higher labor costs associated with increases in wages. Year-to-date and LTM adjusted EBITDA were $419 million and $466 million, a growth of 7% and 9%, respectively.
As Jim mentioned earlier, we are proud to have surpassed our $500 million modified EBITDA target we had set for 2015 with LTM modified EBITDA of $504 million as of September 30. The combination of higher attendance and higher ticket pricing, along with cost leverage, improved our LTM modified EBITDA margin by 20 basis points.
LTM modified EBITDA margin now stands at an industry high 40.9%. With the continued success of our season pass and membership strategy, our active base as of September 30 grew 25% over the same period last year; and deferred revenue at September 30 was $115 million, up $24 million or 27% from September last year.
This increase represents the remaining revenue from the strong 2015 season pass sales and year-to-date sales of 2016 season passes and memberships. In the first nine months of the year, we generated $257 million of free cash flow, or $2.72 per share.
We repurchased $123 million of our stock through September 30, and paid $148 million in dividends. Year-to-date through Friday, October 16, we had repurchased $188 million, or 4.1 million shares, leaving 91.8 million shares outstanding.
And we anticipate repurchasing another $25 million to $40 million in the balance of the year. LTM cash earnings per share was a record high, $2.98.
Our net debt as of September 30 was $1.3 billion. And as a result of the improvement in EBITDA, our net leverage ratio declined to 2.8 times.
As we have mentioned before, we firmly believe that international licensing represents a very good growth opportunity for us and we continue to aggressively negotiate new deals in attractive markets. We wanted to provide a little more color and help investors quantify the magnitude of our international licensing opportunity.
For each park location we sign an agreement for, we anticipate earning approximately $5 million to $10 million of EBITDA annually before the park opens and approximately $10 million to $20 million of EBITDA annually after each park opens. The ranges reflect the differing sizes of the parks in the different markets.
In addition, prior to park opening, the amounts will vary by quarter since they are tied to certain deliverables in the design and development stage. I'm very comfortable with our current capital structure and continue to believe that our policy to return all excess cash flow to shareholders via dividends and share buybacks is prudent.
We have plenty of room to grow the dividend over time as our earnings continue to grow while maintaining a robust share buyback program in the near-term. Net-net I'm very pleased with our financial performance both in the quarter and year-to-date and all signs are pointing towards continuing momentum into 2016 and beyond.
Specifically, we have seen strong demand for 2016 season passes and memberships this fall and have the highest active pass base in the company's history. This should help us drive continued growth in attendance.
In addition, the strong pass sales have come on the back of solid price increases, which combined with our increasingly positive value for the money ratings gives us confidence that we will have the ability to continue to raise prices going forward. Finally, we continue to see tremendous opportunities in international over the long-term.
In summary, with our successful strategy, high-performing team and solid execution, we are well-positioned for the foreseeable future. Now I would like to turn the call back over to Jim.
James W. P. Reid-Anderson
Thank you very much, John. You can tell that John is excited and so am I.
It was another fantastic quarter, our best ever and we are poised to deliver another record-breaking year in 2015, our sixth in a row. As we ramp up Fright Fest and Holiday in the Park, during the balance of the year, we are also actively planning for 2016.
Construction of our new rides and attractions is well underway, our marketing and operational plans are ready to go, pricing plans have been executed and our active pass base is up 25%. Our planning and execution for 2016 remains aligned with our long-term target of delivering $600 million of modified EBITDA by 2017.
The key areas that have driven our growth and success over the last six years will also be the keys to our success in the future. They include, number one, continuing to implement a strategic approach to ticket pricing.
We operate in a healthy industry that is growing, has limited direct competition, and high barriers to entry. On top of that, Six Flags serves the top 10 DMAs in the U.S., which means we have 175 million people, who live within 100 miles of our parks and they have amongst the highest per capita household income in the U.S.
The economy is showing some signs of growth. Unemployment has been declining, gas prices are down and minimum wages are on the rise in certain states, providing more disposable income for consumers.
We continue to have the lowest ticket price per capita in the industry due to historical pricing and discounting practices, and we continue to see ticket pricing as our biggest growth opportunity going forward, especially since other theme park operators are also raising their pricing, creating a positive environment in the entire industry. Number two, we will grow attendance by further penetrating sales of season passes and membership.
We remain well below our peak attendance level for this portfolio of parks, which was just over 29 million guests in 2001. We have ample capacity to continue growing attendance and our goal is to do that by upselling guests to our highest priced ticket, which are season passes and memberships.
These are our most loyal and profitable guests, who visit our parks multiple times each year and we have grown our active pass base to its highest level ever, while also growing our unique visitor base. Our membership program continues to grow.
It is an extremely attractive program for the company and of great value to our guests. The program brings stability to our financial performance in terms of steady cash flow and higher retention of our guests year-to-year.
In fact, these are our most loyal and profitable guests since they pay a higher ticket price and visit multiple times per season, just like our season pass holders. In addition, the profile of our members exactly mirrors our season pass holders in terms of demographics.
They are about 50% teens and 50% families, identical to the company level guest profiles that we've seen for the last two decades, and their average household income remains significantly above the U.S. median household income.
The third area of strategic growth is our in-park revenue. While a large portion of this growth comes with higher attendance, we continue to have significant growth opportunities in penetration of sales within our parks, especially on items such as our All-Season Dining Pass.
The fourth and final key growth driver is international licensing. Our international strategy continues to progress forward with both our existing and potential partners.
In Dubai, our relationship remains strong and our partnership is progressing nicely. In China, a few weeks ago, several of our executives attended a press event where the Riverside Group, our Chinese partner and a provincial government of Zhejiang announced that Haiyan will be the location for the first Six Flags branded theme park in China.
Haiyan is located approximately 100 kilometers south of Shanghai and the area has a local population in excess of 150 million people within 300 kilometers of the park. This is another positive step forward in China, where you may recall Riverside intends to build multiple Six Flags branded parks.
We also continue to seek new partners for licensing our brand in other markets and those discussions are going well. As John outlined earlier, given the financial contribution these parks make, international is definitely a huge and unique growth opportunity for Six Flags and we believe that this is not yet captured in our share price.
Overall, we are extremely well-positioned for future growth. Our cash EPS growth and our dividend yield are double the S&P 500 and we just love that performance.
We will continue to use our cash flow to pay our dividends, which we anticipate growing year-by-year. The balance of our excess cash will go to share repurchases since we continue to believe our stock is a tremendous value.
We now have 20 record quarters under our belt since emerging from bankruptcy. And we look forward to our future and achieving our long-term target of $600 million of modified EBITDA by 2017.
This is a great industry and there is simply no better brand than Six Flags in the global regional theme park space. We are providing affordable family entertainment and quarter-by-quarter, year-by-year, we deliver guest excellence, innovative products and attractions and remarkable financial results consistently.
At this point, Kayla, could you please open the call up for any questions.
Operator
Yes, sir. Your first question is from the line of Ian Zaffino with Oppenheimer.
Ian A. Zaffino
(21:51) thank you very much. Good quarter, pretty happy with the performance.
Now you guys are talking about the price increases and I guess a lot of that sort of gets muddled because of mix. Is there any way you can maybe give us an apples-to-apples – maybe increase in the pricing that you're seeing or maybe the magnitude of pricing that you're getting?
Just to sort of help us adjust for the idea of season pass as being lower per caps.
James W. P. Reid-Anderson
Yeah, you're absolutely right. And there is confusion – there is definitely confusion out there Ian, with regard to the pricing scenario and we even see it even today with people saying pricing down, whereas I think what is intended is per cap is down.
And there is definitely an effect on our per cap, large part of it as we've seen both in the quarter and year-to-date is foreign exchange, but the fairly immense increase is that we've seen in our active base, which is made-up of season pass-holders and members clearly has an effect on per cap, which is not the same as pricing. So, to help clarify to you, we have taken pricing very much consistently and have done so again in advance of the 2016 season.
The price increases depends not only on whether folks are season pass-holders or whether they're single day visitors or groups, but on average we're taking a $1, $2, $3 literally per guest in each situation. So, prices are up across the board in every single category.
John, do you want to add to that?
John M. Duffey
No, I totally agree with that.
Ian A. Zaffino
Okay. And then, final question would just be on the leverage side or the cost leverage side, the operating leverage.
Revenue dollars increased more than EBITDA dollars did in the last quarter. Obviously, there was higher cost, but can you just give us a little detail or a little color behind that discrepancy?
John M. Duffey
Sure, Ian. And I think a lot of that had to do with just the timing of some of the operating expenses in terms of which quarter they fell into; that would be number one.
Number two, we did actually increase our spending in anticipation of Fright Fest. We've talked about Fright Fest being a big growth driver for us and we're continuing to invest in that area.
So, we did have some cost in the third quarter around Fright Fest. Now we'll see, obviously, the return on that in the fourth quarter.
But overall, if you look at our margins, both on a year-to-date and a LTM basis, we continue to improve our margins.
Ian A. Zaffino
Okay. So, I guess if we look at it on an annual basis, that would adjust for the timing of it, correct?
James W. P. Reid-Anderson
It will adjust for the timing a bit. And I think, as John said, Ian, not only LTM, but year-to-date we're up.
That's number one. And you can get swings between quarters, as you noted.
But I think, in addition, when you look at our margin, we've gone from having the lowest margins in the industry at under 24% to now having the leading margin in the industry. And I think you need to look on two levels.
You need to look at the overall margin, which is almost 41%, by far the highest in the industry. And then, I think you really need to look at EBITDA minus CapEx, because there is no company that has consistently generated increases in cash, true cash profit, in essence, and we're doing that, quarter-in, quarter-out, and by far the highest, both in terms of the regional theme park space and destination.
John M. Duffey
And the only....
Ian A. Zaffino
Okay great.
John M. Duffey
The only other thing that I would add in terms of margins, and we've mentioned this before, is that if you look at the growth drivers that we have outlined in terms of pricing, continuing to see upticks in attendance associated with season pass, all the things that we're doing around our in-park, we have very high margins in in-park, our All-Season Dining program, and then, lastly, international, all of that is very high margin growth. So, we anticipate that we'll continue to see our margins improve going forward.
Ian A. Zaffino
Okay. Thank you.
That's very helpful.
James W. P. Reid-Anderson
Thank you, Ian.
Operator
Your next question is from the line of Joel Simkins with Credit Suisse.
Unknown Speaker
Hi, it's actually Christy (26:45) on for Joel. My first question, I guess, is just given the 25% growth in the active pass space, the consumer is definitely realizing the value of the season pass membership program.
So as we think about the impact of FX in the season pass mix, is there any reason to believe that per caps will continue to trend down next year?
James W. P. Reid-Anderson
You know that we don't – Christy (27:07), we don't give guidance with regard to what will happen to per caps. The only number that we will talk about actively in the future is our modified EBITDA target of $600 million, but you've seen what can happen when you have very strong growth in season pass holders and members.
But we've always said, it does put pressure on per caps; so it's certainly possible that that could happen. But, we have to reinforce that we have taken pricing.
We're seeing no push back on pricing whatsoever. As John pointed out, value perception is up.
So, I think we feel very good. And Christy (27:50), it's not that we shouldn't focus on per caps; we should.
But the single most important thing we should focus on is how much profit is the company making, and then how much cash is it generating and how the shareholder is doing; and that's our number one focus. So, we drive for profitability and cash flow and increasing that per share.
So, per cap is important, but number one is making sure we're generating more cash.
Unknown Speaker
Definitely. Okay, great.
Thank you.
James W. P. Reid-Anderson
Thanks, Christy (28:22).
Operator
Your next question is from the line of Tim Conder with Wells Fargo Securities.
Karen Tan
Good morning. This is Karen calling in for Tim.
Just two questions from us. Hate to keep circling back on the pricing question, but if I recall, you guys have increased average price at mid-single digits this year after increasing mid-to-high-single digits since 2014 and I think....
James W. P. Reid-Anderson
Karen, we lost you there. We couldn't hear what you said.
We sort of lost you for a little while. Do you mind repeating the question?
Karen Tan
Yeah. Hello.
Can you hear me?
James W. P. Reid-Anderson
Yeah.
John M. Duffey
Yes.
Karen Tan
Okay, great. Just wanted to circle back on the pricing question.
I recall, earlier this year you guys had increased pricing in 2015 at mid-single digits after increasing perhaps in mid- to high-single digits in 2014. It sounds like you guys are, for your 2016 plans, perhaps reaccelerating, because you see opportunities for consumers to be able to take price.
Is it fair to say that you guys are reaccelerating average price, maybe back to the mid- to high-single digit level again for 2016?
James W. P. Reid-Anderson
I think I mentioned earlier 3% to 5%, Karen, and really it depends by category; so it could be 3% in one case, 5% another. We might go a little higher in some cases, but we've taken price in every single category.
So it is fair to say that we are pricing up. But I wouldn't say it's reaccelerating or anything.
We've been consistent in taking pricing up and we're trying to do it in a way that ensures that our guests don't feel like they're being gouged. So we're very confident about next year, I've talked about 2015 being a record year, but I have to say that I feel very good about the trend lines that we're seeing as we go into 2016 and pricing is just one element of that; a 25% increase in active base is another.
Karen Tan
Okay, great. Thanks for clarifying.
Second question from us is just a little more details on the membership plans as compared to the season pass. Are you seeing any incremental costs associated with the payment of membership plans?
And then, are you seeing any greater credit default losses from those plans than you had previously expected, just a point of clarification, there are some questions we were getting around that.
John M. Duffey
Yeah. Let me start by saying we continue to be very pleased with our membership program.
We continue to see that grow nicely. As it relates to cost, there hasn't really been any significant increased costs associated with the membership program, and defaults actually were – we continue to be pleased with what we're seeing on defaults.
It's pretty much in line with what we had anticipated. As a matter of fact, it's actually declined year-over-year.
Karen Tan
Okay. Thanks so much.
Congrats on the great quarter.
James W. P. Reid-Anderson
Thanks, Karen.
Operator
Your next question comes from the line of Barton Crockett with FBR Capital Markets.
Barton E. Crockett
Okay. Thanks for taking the question.
I wanted to ask a little bit more about the attendance trends in the quarter, which I think were remarkably strong, with the 9% growth that you reported, on par with what you did in the second quarter, even though it seemed like you had a tougher comparison, I mean, the year-ago second quarter was down in attendance, the third quarter was flat. Was there anything in the calendar that helped the attendance growth maintain that pace during the third quarter, the extension of Labor Day adding a week there, anything in the weather, seemed like it was less rainy this year, anything that kind of drove that ability to sustain the attendance trend?
James W. P. Reid-Anderson
I think with regard to weather, we've said consistently that by the time you get through a year, weather tends to equalize out. And we certainly feel like that's the case, John, do you want?
So no real effect one way or the other from a weather perspective. I think, John, do you want to talk about...
John M. Duffey
The Labor Day?
James W. P. Reid-Anderson
Yeah.
John M. Duffey
Yeah. And we did see a benefit associated with Labor Day falling later in September than it typically does.
But when you think about the benefit that's associated with really only those parts where the schools don't go back to school until after Labor Day. So unlike some of our – I think what you'll see from others in the industry, it was a relatively immaterial impact for us because there was only a couple parks on the East Coast where the schools go back after Labor Day.
So, if we – I was to quantify it, of the 1.1 million of attendance growth that we saw, the benefit associated with that Labor Day was less than 100,000.
James W. P. Reid-Anderson
I would then build on that, Barton, by saying that there were several reasons why we think the increase came through and suddenly the Labor Day benefit was minimal as John said. The biggest reason is that we have an active base of season pass holders and members, that is up, right now up 25%.
So that is a huge piece of it. I think the second piece is that we have, over the last few years, clearly turned these parks into a line-up that has never been seen before in terms of quality of products, rides, attractions.
And 2015's line-up was hugely successful. So people have wanted to come to the park and they've had the opportunity and they're doing so and they're returning over and over.
And then I think the other thing, as you know, as I pointed out before, we're at all-time highs on guest satisfaction, and I think word of mouth travels. So we're getting the benefit of all of that.
And we're very confident that we can continue to do that.
John M. Duffey
And just to add to that, I think as you know, we announced our new capital for 2016 in August. And as I mentioned earlier, we're seeing really nice growth in our 2016 pass sales to-date.
So I think people have reacted to our 2016 capital very well.
James W. P. Reid-Anderson
One last point, Martin, sorry to maybe answer your question a bit over the top. But there's one other thing that we want to add that we're extremely proud of and we think there is also misinformation out there about this.
Not only have we seen growth in our active base and in attendance, but our unique visitors are not only up this year, but they're up since 2009. So we're growing literally across the board very, very successfully.
Barton E. Crockett
Okay. That's tremendous, all that color.
Thank you for that. I wanted to follow up with one other question, again, diving into the variance this quarter versus the last quarter.
Last quarter, your – you had similar attendance growth, but your per caps were down 5% year-over-year, total revenue per cap. This quarter, the decline was about three percentage points less, and that drove the acceleration in revenues mathematically.
What drove the improvement in the per cap trend this quarter versus last quarter?
James W. P. Reid-Anderson
You want to take this, John?
John M. Duffey
Yeah. Well, I think, a lot of it is associated with, first of all, memberships.
We've talked about the fact that once the – a person, a member goes beyond the 12 months, we recognize the revenue on a monthly basis. And so, you'll have revenue in quarters where you may not have attendance or a smaller amount of attendance.
And so, what happens is the membership has and will continue to put downward pressure on per caps in the second quarter and the third quarter and actually be a positive impact somewhat in the fourth quarter and significantly in the first quarter. And so, I think we had – we saw more of an impact on that in the second quarter than the third quarter.
And then the last point is pricing. As we've talked about, we continue to take prices up and we did that throughout the year.
James W. P. Reid-Anderson
And of course there was the negative foreign exchange that continue to hurt us and hopefully, that will reverse, but we can never count on that.
Barton E. Crockett
Okay. All right.
That's very helpful. Thanks a lot, guys.
James W. P. Reid-Anderson
Thanks Barton.
Operator
Your next question is from the line of James Hardiman with Wedbush.
Sean Wagner
Hi, this is Sean Wagner on for James Hardiman. Kind of piggybacking on that last point you made about how the accounting of the membership revenues becomes a benefit in 4Q and 1Q.
Obviously, the membership base is still growing, so we'll continue to have a portion of that group still in their first 12 months and recognizing the revenue based on attendance. Does that – does that begin to taper off and normalize a bit next year or is that further down the road, where we'll start to get to kind of a normal environment for those revenues?
John M. Duffey
No, actually, actually we continue to see very nice sales of – of membership plan. So, that continues to increase.
So, actually we'll have more and more people that will go from that one – first year to – the 13 plus – 13-month plus. So, the more that continue to rotate off on to that 13 plus months and we recognize the revenue on a monthly basis, it actually is going to increase.
James W. P. Reid-Anderson
So just to reinforce Sean, membership is here to stay. It has been a homerun and it's growing.
It's usually profitable, and it's a great value for guests who have families and they want to be able to afford to come to the park, if they have bigger families and they also want not to have to worry about renewing every year. So, not only is it a huge win for us, but we're getting fantastic feedback from our guests about it.
So, it's going to continue and we will see this effect, we think, for a number of years going forward.
John M. Duffey
And we continue to be very, very pleased with our retention rates around membership. So, as Jim talked about, number one, the benefit you see is – is you see more people that are going from one day to a pass because of the membership program, but on top of it, we're seeing very nice retention.
And really, it's a benefit from an accounting standpoint because it really smooths out both the revenue and the cash flow once they get to that 13th month. The downside is that it does play a little bit of a havoc with per caps.
James W. P. Reid-Anderson
It kind of – it kind of does – it wreaks havoc with per caps. And for those that don't understand that, it can be confusing and a little bit alarming.
But I think if you look – all you have to do is look at our performance, 20 record quarters and cash EPS growing. And we're now sitting at cash EPS growth three times the S&P 500.
And a dividend yield that's up at – roughly 4.5%. I think that says it all.
Sean Wagner
Okay. Great.
That was actually my next question about the retention. But really quick, my last question, with you mentioning the unique visitors are up, is that largely driven by the calendar shift and beneficial weather year-over-year, or do you expect there to be some long-term growth going into next year and beyond in the unique (40:14)?
James W. P. Reid-Anderson
No effect from those seasonal factors; it's all to do with our offering. So, it's the complete package.
It's innovation in our parks and also in terms of what we're offering, season passes, memberships and people – more people are coming to the parks.
Sean Wagner
Okay. Thanks for all the color.
James W. P. Reid-Anderson
Thanks very much, Sean.
Operator
Thank you. Your next question comes from the line of Afua Ahwoi with Goldman Sachs.
Afua A. Ahwoi
Hello. Good morning, guys.
Just two questions from us. The first one is on the active pass metric and the attendance you've shown, which is very, very strong, I guess the one thing we're trying to understand is, in the past, you've seen bigger increases in the penetration of your active pass.
So maybe you've jumped from – maybe it's increased by 600 basis points or whatever, but we haven't seen this magnitude of increase in the actual attendance, whereas now that the penetration, while still increasing, the magnitude of the increases is not as high, we're seeing these big jumps in attendance. So does it mean there's something different about the way the season pass members are coming or are the members coming more than four times, as we've historically been told, or is there something that's different about the way they're showing up that is, I guess, increasing the actual attendance numbers we have?
And then after that, I have a second question on the international recovery...
James W. P. Reid-Anderson
Why don't you give us the second question as well...
Afua A. Ahwoi
Sure.
James W. P. Reid-Anderson
...and we'll go at both.
Afua A. Ahwoi
Sounds good. Okay.
So then, the second question, on the – thanks for the color on the $5 million to $10 million annually in EBITDA that you'd get. I guess it sounds quite high to us, especially because we've seen some other – some of the other contracts that some other companies that do these international ventures have.
And $5 million to $10 million annually, which, assuming the park takes three years to open, that's quite a bit of EBITDA to get just before the park opens. So I'm just curious – I mean, I know there's deliverables you have to meet and then you get paid, but what else – like how come it's so high, and what could be driving that and what sort of deliverables are they?
James W. P. Reid-Anderson
So, Afua, we'll repeat what we've said before with regard to international; and, John, do you mind describing the three categories?
John M. Duffey
Yeah. So, basically, the three categories are: prior to the park opening, we get a license fee associated with the brand; we also get a management fee for managing the process; and then, we get fees associated with the designing and development of the park.
And particularly, as it relates to the design and development of the park, those do fluctuate based upon the deliverables. But we are very pleased with the agreements that we've been able to sign to-date.
These are parks that will be in extremely attractive markets. I think both us and our partners believe that once these parks are up and running, they'll be very attractive, drive a lot of attendance.
And so, we continue to believe that what we're receiving for not only our brand, but the expertise that we offer, particularly as it relates to prior to the park opening, are actively reflected in our fees that we'll get.
James W. P. Reid-Anderson
Yeah. So, Afua, we're not going to break down more detail.
We've given more detail than we have ever before. You can tell from what we've reported internationally that we are generating these fees.
We think they're going to increase over time as we add more parks. And before the parks open, it's $5 million to $10 million a year per park; and then, after the park opens, $10 million to $20 million.
And so, it gives you a sense as to how much it will bring. So, you could work that out for yourselves.
If we have 10 parks that are open in a few years, let's say a decade or eight years, you'll be able to work out that will bring in $100 million to $200 million of EBITDA. But it's a very positive thing for the company and we are seeking strong long-term partners that we're working with.
With regard to your first question, which was, how is it that we're getting higher attendance, it's really difficult to say this is what drove this versus that. There are ups and downs.
Earlier in the year, with a higher increase in the base when you're starting out and we're adding members, you'll see a higher increase overall in active base. And as you go later in the year, that will decline a little bit because you're comparing to a much higher base in the prior year.
So, 25%, just trust me, is a huge number to increase the active base. And I think that what's happening here is that guests who are visiting are really enjoying coming and they're talking to their friends; they're talking to family.
I think the word is out on what we're doing. We're winning awards, whether it be the Fright Fest awards, or Best Rollercoaster or Best Park.
We're winning a series of awards and that word of mouth gets out. And these new rides and attractions that we're putting in are phenomenal.
The All-Season Dining Pass that we've added has been a huge hit and penetration is growing there even though it's still low overall. So I think all of these things add up.
And in an economy where people don't have a ton of money, the fact that they can come to our parks on a reasonable budget and spend the day, I think it's something that people are really attracted to.
John M. Duffey
Yeah. The only other thing that I would point out, Afua, is that in the past one we only had season passes, most of those season passes were bought in the spring, and really the sales tailed off in the June-July period of time.
With the membership program, we are selling passes all-year along. And so what happens is you may get passes that are sold later in the year with less attendance associated with that, right, because they may come fewer than the three to four times.
Afua A. Ahwoi
But have you seen, I guess, sorry, just as quick follow – actually two follow-ups, I remembered one. Have you seen – have you seen a change in the three to four, is it now four to five or that is still the same?
James W. P. Reid-Anderson
No, it's pretty much the same, Afua.
Afua A. Ahwoi
Okay. And then the second one, yesterday, this is back to the international side.
Yesterday, we saw some press articles about potentially Six Flags doing something in Mexico. We weren't sure if...
James W. P. Reid-Anderson
Sometimes people get carried away, Afua, and get excited and put out press releases when they shouldn't. But what I can tell you is that we're talking to various really interesting parties across the world.
The only place where you won't see us putting an investment in is in Europe. Coming from Europe, I just don't feel that it's really appropriate, but we're looking at other very exciting markets, Asia, Latin America, and there are some really good partners that we're talking to.
John M. Duffey
And I also want to add that our strategy around entering into these relationships with really no capital investment on our part, it still remains.
Afua A. Ahwoi
Okay. Perfect.
Thank you, guys.
James W. P. Reid-Anderson
Thanks Afua.
Operator
Thank you. Your last question is from the line of Sarkis Sherbetchyan with B.
Riley & Co.
Sarkis Sherbetchyan
Good morning. This is Sarkis Sherbetchyan dialing in for Ian Corydon.
Thanks for providing the per-park EBITDA metrics, that helped quantify the international licensing opportunities. So, first, is the Dubai project still on track to open sometime in late 2017?
And second, has there been a timeline set for parks in China that you can share with us?
James W. P. Reid-Anderson
We are not sharing any timelines right now. As you know, it takes a while to get approvals and go through the process.
Both parks are on track. My view would be that we're probably looking at 2018 for both at present, but that can change at any time.
Sarkis Sherbetchyan
Certainly. And as a follow-up, with international being a capital-light model, how do we think about the marginal costs in your P&L as that opportunity ramps?
Any color around those dynamics would certainly be helpful for us?
James W. P. Reid-Anderson
I think we could give you a high-level view. As John said, it's capital-light, Sarkis.
So, it's – we're not putting any capital in, but in terms of the overall structure, we do have a very small team that is working on the international side. And so, it does end up being very high margin over time as we scale up and we add more parks, we'll add more people.
But I always foresee this as being something that will be relatively high-margin. John, would you disagree?
John M. Duffey
No, I would totally agree. And I think what you've seen that to-date, both in last year's EBITDA and this year's EBITDA associated with the international.
Sarkis Sherbetchyan
Very good. And also, do the – do you get better pricing power with respect to the seasonal and monthly category versus the one day tickets?
James W. P. Reid-Anderson
When you say better pricing power, do you mean the ability to take price up?
Sarkis Sherbetchyan
Sure, since they visit multiple times, do you have more of a pricing opportunity there?
James W. P. Reid-Anderson
I think our opportunity is honestly across all categories. And we will go through – and every year will differ, but we have a pricing team that looks at this and recommends to us what we do, but it tends to be fairly similar in terms of price increases across these categories.
Sarkis Sherbetchyan
Okay. That's certainly helpful and good luck.
James W. P. Reid-Anderson
Thank you, Sarkis.
Operator
There no further questions at this time. Do you have any closing remarks?
James W. P. Reid-Anderson
I certainly do, Kayla. We really appreciate you all joining our call and for your continued support.
We remain focused on delivering shareholder value for the company by creating fun, thrilling memories for our guests. We really hope that you can come visit one of our parks soon, especially for the biggest and scariest fright fest ever, which lasts through the first weekend of November, or for our incredible Holiday in the Park – Winter Wonderland experience that begins in late November and lasts through early January.
Please remember, this year Holiday in the Park will be at seven parks, including Six Flags Great Adventure in New Jersey for the first time ever. With millions of holiday lights and some of the largest Christmas trees ever, Holiday in the Park is an event that you and your kids should not miss.
Thank you all very much and take care.
Operator
Ladies and gentlemen, that does conclude today's conference call. We thank you for your participation and ask that you please disconnect your lines.