Welcome to the Cedar Fair Third 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.

Thank you; and good morning, everyone. Welcome to our third quarter earnings conference call. I'm Stacy Frole, Cedar Fair's Vice President of Investor Relations. This morning we issued our 2016 third quarter earnings release. A copy of that release can be obtained on our corporate Investor Relations website at IR.CedarFair.com or by contacting our Investor Relations offices at 419-627-2233. On the call this morning are Matt Ouimet, our Chief Executive Officer and Brian Witherow, our Executive Vice President and Chief Financial Officer. Before we begin I need to caution 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. You may refer to filings by the Company with the SEC for a more detailed discussion of these risks. 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 will turn the call over to Matt Ouimet.

Thank you, Stacy and good morning, everyone. I'd like to start by saying how proud I am of our entire Cedar Fair team, with a special call-out to our operators, who continue to do the heavy lifting when it comes to delivering the best guest experience in the industry. Thanks to their dedication to our mission to become "THE place to be for FUN," we've achieved the best post-Labor Day performance in our Company's history. That in turn helped drive a strong third quarter, despite the record heat and we remain on track to deliver our seventh consecutive year of record results. It also supports our efforts to generate additional value for our unitholders, as reflected by the 4% increase we announced today in our quarterly distribution. Before Brian provides more detail on our financial performance through the third quarter, including the peak vacation months of July and August, I want to say a few words about our performance through the end of October. Consistent with prior years, our growth continues to be balanced with increases in attendance, guest spending and out-of-park revenues. Through this past weekend, attendance was up 2% for the year to date. In part, guest per-capita spending was up slightly more than 1% and out-of-park revenues were up 6% when compared with the same period last year. I'm particularly pleased with our ability to grow per-caps while at the same time continuing to see an increase in our season pass programs. It's also satisfying to see the investments we've made in our resorts and catering facilities are providing returns beyond our original projections. This broad-ranging success reflects not only the quality and diversity of our new rides and attractions, but also our ongoing strategic initiatives to expand the appeal of our entertainment offerings and enhance the…

Thanks, Matt and good morning, everyone. As Matt mentioned, we're very pleased with our strong operating performance through this past Sunday, October 30 which puts us on track for our seventh consecutive year of record results. Before I discuss the positive trends we experienced in October, I would first like to provide additional color on our third quarter results. As detailed in our earnings release for the third quarter of 2016, we reported a 1% increase in net revenues to a record $650 million. This was the direct result of a 1% increase in in-park guest per-capita spending to $48.01 and a 5% increase in out-of-park revenues, including resort accommodations. These increases were slightly offset by a less than 1% decrease in attendance. For modeling purposes, during the quarter we entertained 12.5 million guests and generated out-of-park revenues totaling $68 million. The increased guest spending in the third quarter when compared with the same period a year ago primarily came from increases in both admissions pricing and spending within our food and beverage category. Season pass holders have responded very positively to our all-season dining program which is in its second year of implementation; and our all-new all-season beverage program also contributed nicely. We're pleased with the solid per-caps we have generated across all of our parks, particularly given the year-over-year growth in season pass visits and the extreme heat that we experienced during our peak vacation months - both factors that tend to put pressure on guest spending metrics. The growth we generated in out-of-park revenues is largely related to increases in both occupancy rates and average daily room rates at our Cedar Point and Knott's Berry Farm resort properties. Demand for accommodations remains strong and our resort business provides a nice hedge against negative weather trends and extends…

Thank you, Brian. As we look at finishing another record-breaking year, we look forward to an expanded operating season at California's Great America with the introduction of WinterFest and the continued success of Knott's Merry Farm. In both cases, the parks are transformed into spectacular winter wonderlands with holiday shows and festivities for every member of the family. For example, guests at Great America will be able to ice skate in front of the park's iconic double-decker carousel, enjoy magnificent light displays, view spectacular live holiday shows and enjoy a wide variety of food and beverage offerings specifically tailored to the event. As I mentioned earlier, this is the first phase of a broader strategy to introduce winter holiday experiences at our other seasonal parks. Kings Island, Carowinds and Worlds of Fun are already planning their season-extending WinterFest holiday festivals for next year. As you can tell, we're excited about the potential WinterFest represents for extending our season and expanding the entertainment offerings to our guests. WinterFest is a great example of our capital investments that are focused on long term, sustainable revenue streams and incremental cash flow. We expect WinterFest to be successful in year one; but we also believe the larger opportunities for increases in both attendance and in-park guest per-capita spending will come in years two, three and four as awareness builds and demand for the product increases. This is similar to what we've seen with our springtime events such as the Boysenberry Festival and Taste of the Carolinas and most notably with our Halloween events that have been built up over time. Heading into in 2017, our new Cedar Point Sports Center will kick off its inaugural season in March. This state-of-the-art sports park will host more than 100,000 amateur athletes and their families from around…

[Operator Instructions]. And our first question comes from Ben Chaiken with Credit Suisse.

At the end there, did you say $500 million by 2017? I just want to confirm that.

Yes.

When we talk about cost in 4Q being lower, was that as a percentage of revenue or is that absolute value? How are you guys thinking about it there?

Ben, it's Brian. We're really just looking at costs in overall dollars. Just to give you a little bit of color, in the first and fourth quarters - what we often call the shoulder months of the season - is where we have some of the most discretionary spend opportunities. And in the first quarter of this year, we continued the momentum that we had coming out of the fourth quarter of 2015, with good winter weather, to lean into and get some of those discretionary projects done. As I said on the call, I don't anticipate activating those projects in 2016 to the same scale. What will be a little bit of an apples-to-an-orange comparison is the fact that we're introducing WinterFest, so those are going to be incremental dollars for Great America. So when we think of the overall dollars, I can't say that there won't be an increase; but at the parks where things are comparative, more of an apples-to-apples comparison, we would anticipate being able to keep those costs under control.

Then as we roll forward into 2017, how should we think about the increase in OpEx? I guess, does the minimum wage have that same step function as we saw this year? And what about some of the other initiatives that you mentioned, the Wi-Fi, the FunPix, etc.? Are those all - is that going to roll forward next year?

Yes, sure. We're still in the planning process for 2017. In the last few weeks we've really - as the season's been winding down we've been kicking into our specific planning around 2017. So we're still assessing and evaluating some of the initiatives coming out of 2016 to determine how much we want to lean into them as we go into 2017. Broadly speaking, what I would tell you from labor - and we alluded to this on the call - the lion's share of the cost increase this year, OpEx increase, has been labor cost. And it was - I think we were very upfront coming into 2016 that that was going to be a step function. As we look at the pressures on 2017, I don't envision the same kind of pressure for a step function. We do believe that minimum wage and seasonal labor will continue to see pressure there but not [indiscernible] 2016.

Ben, this is Matt. We're also very confident in some of the things we tested this year that will help reduce labor in various areas. What we call our labor optimization group has recently got their 2017 plan endorsed. And as you would expect we're going to continue to implement devices that help us reduce operating labor from a volume standpoint.

That's really helpful. Just remind me; did 2015 have that step function as well in minimum wage?

No, it did not.

And our next question comes from Tim Conder with Wells Fargo Securities.

A few questions here, one, Brian or Matt, whoever would want to take this, can you quantify a little bit what you're seeing in the year-over-year growth in season passes for 2017? And then any commentary that you would have on your season dining pass penetration in 2016 and maybe trajectory of where you see that going?

Tim, I'll start; and Brian, feel free to jump in here. We're not going to quantify the penetration level on season-pass dining. What we can tell you is that we continue to see that penetration go up, as you might expect, as the product becomes more well-known and certainly is treated as a great value by our consumers. So that's going to continue to grow. We've got every confidence in that. And, Tim, in the same regard, what I will say - and we always caveat that it's very early in terms of season-pass sales - but we're seeing a very nice increase in renewal rates for our season passes, as well as just overall volume increases across every one of our parks so far this year.

Yes, Tim, just to add a little color on the dining penetration, what I will tell you is that we're in the third year at several of our parks and even in the third year we continue to see penetration rates improving, as Matt indicated. So that was three of the 11 parks that are in the third year; the other eight were in their second year this year. So we're very confident as we go forward that that will continue to see improvement, those penetration rates, as Matt indicated, as the awareness of the product broadens and we continue to enhance our promotion of the product within the parks and prior to visiting the parks.

Okay. Gentlemen, again just maybe pushing here a little bit, are your season passes - you've got good renewal rates and new coming in. Would it be fair to say double-digit? Are you seeing as much as that? Again, granted it's very, very early here.

It is early, Tim. But I'll just say that we're very happy with what we're seeing.

Then the attendance shortfall that you saw due to the heat indices that we saw across the whole country - and yourselves and competitors saw the same issues. Was that focused more - is there a way to bucket it, that more in single day? Was it season-pass folks? Was it group or spread across those buckets?

Yes, Tim, what I would tell you there is if you think of our attendance in the three core channels of season pass, group and then just the retail channel, that general admission retail channel tends to be the one that's most impacted. Season-pass holders still have the opportunity to come and do the short three-, four-hour visits. As we said on the call, we tend to see a shift in the behavior of the guests more toward the water park side of the park. That's a lot of season pass holders just coming for a few hours to get out of the heat and enjoy the water park offerings at our parks. So I would say it was the general admission guest that was impacted. And the implications of that are a little bit - when we're talking about July and August, those single day visitors are some of your highest per-cap visitors for the visit and so that puts a little bit of pressure on not only per-caps but ultimately EBITDA because you just don't have as much money falling to the bottom line.

Okay, okay. Then, Matt, it sounds like you may, given Richard's well-deserved promotion, it sounds like freeing you up to, as you said, do a little bit more strategic and focus on other things for the Company. Any color you can give us on that? I would guess that would include maybe also, given your background for a while in the hotel industry, that would include maybe accelerating some of those hotel negotiations. And any potential timing where we could see some announcements with partners?

So I think on the - so, Tim, that is exactly one of the reasons we gave Richard his promotion, because we have a reasonably long list of opportunities that go on those 1,300 undeveloped acres. And as we said in the script, what's nice about that is it gives you direct, sustainable cash flow, but it also gives you strategic value in terms of additional admissions. So I would expect that by the time we got in - candidly into the first quarter of next year, we'd have some definitive news about some of the hotel expansions we're talking about in the two markets we've referenced previously. And then on the other initiatives, I think you'll hear about them as we go over - again as we go through the course of next year. The resort products are proving to be very good differentiators for us. They come with a really good guest demographic. They come with long lengths of stay. And they also provide that buffer against the weather. The hotel reservation process is something that people make a commitment to both personally and financially. And so I wouldn't be surprised to see us continue to roll out hotels where they make sense and also continue to expand our campground offerings. But those are two just smaller examples of what we hope to be able to find for those 1,300 acres.

And our next question comes from James Hardiman with Wedbush Securities.

I just wanted to go through the progression here the last few months. Obviously, Labor Day sales I think were up 2; through September we were up 3; and then through October we were up 4. Obviously, rounding has always been an issue and you guys don't like to give us specific numbers; but I think it's an important point here. Is it safe to say that we were seeing double-digit type revenue growth in September and October?

Yes, I'd say that's exactly the case, James.

Okay. Can you help us in terms of what was driving that turnaround? How much of that was attendance versus per-caps? How should we think about that?

Yes, sure. I mean, I think if you look at the numbers that we've disclosed now and do the math you can see that it's coming largely from attendance although we're, as we said on the call, pleased with what we continue to see out of per-cap. In spite of season-pass visitation representing close to 400 basis points more of the mix through the first 10 months of the year compared to last year, we're still getting per-cap growth. So per-cap growth would be pretty consistent with what we previously disclosed. We've been up in that 1% to 2% range on per-caps most of the year. Out-of-park revenues continue to do well. But without a doubt, the September and the October performance was fueled by strong growth in attendance.

James, the other thing I want to go on the record is, we've been a little more vocal than we'd like to be about lamenting the summer heat wave. But the reality is, as is always the case or proves to be almost always the case, once you average through September and October we feel like we're going to end up with a very - maybe three component parts, early strong; middle a little weak; and certainly strong in the last month. But the reality is, weather tends to normalize itself over nine to 12 months. And we're seeing that this year.

Great and then going along those same lines, I believe that you said that you still expect flat EBITDA margins for the year. Year-to-date it's down pretty meaningfully. So I guess the question is, Is it right to think about a pretty dramatic increase in fourth quarter EBITDA margins? And I guess by extension, even though EBITDA is flattish for the year, that would then seem to suggest that we're going to see - especially if we couple it with the nice October growth on the revenue side - pretty decent growth in terms of overall EBITDA still for this year despite just flat through three quarters?

Yes, I think the way to look at it, James and maybe - the year that I would tell you to go back and take a look at is 2014; was a similar year to this where we ended the third quarter probably in worse position than we have ended this third quarter, where were about flat in terms of EBITDA. We were down several million dollars in Q3 of 2014. And you can see what a strong October - and I would also throw in there December/November for Knott's Berry Farm - can mean for fourth quarter EBITDA. So when you look at fourth quarter EBITDA, the margins get a little wacky, right? It's hard to look at that from a margin play, because the lion's share of our parks are in operation. But what I will say is October of this year, that month we're going to see some really strong margins. We're running at some of our biggest days and we're nowhere near peak from a staffing perspective. So that works in favor from a margin perspective. And as long as we see Knott's and Great America's WinterFest deliver as anticipated, I think the planned cost initiatives that we have in place will get us back to that 37% level.

Then I guess just lastly and I guess where we finish EBITDA for 2016 is still somewhat of an unknown. Again, we're basically flat through three quarters, maybe a little bit better than flat to finish the year. But getting to that $500 million target for next year would assume pretty significant growth, at least somewhere in the 6% to 9% range at least to get to that for next year. Can you help us think about why you have confidence that that's still on the table? And maybe as I think about attendance, per-cap and margin, should I be weighting those evenly or are there one or two of those that you have even more confidence in as we look to 2017?

Yes, hey, James; it's Matt. I think you've got to take a step back and think about, again, where were going to end up 2016. I'm not sure I would agree with your math necessarily, given what happened in 2014. I really do guide you back to take a look at that. Then we've got - we've started to do our budgeting process. We know where we're headed. We've got three WinterFests next year which obviously expands the operating season. We've got a strong start to our season-pass sales. We've got great product going in at Knott's and Cedar Point and Kings Island. So I think when we put this component parts together and - we're still very confident that we can hit that number in 2017. Again, I don't know that your 6% to 9% growth is going to be required to get you there next year.

[Operator Instructions]. And our next question comes from Barton Crockett with FBR Capital Markets.

Let me see; one thing. I wanted to just get your updated thoughts on CapEx for this year or next year and also cash taxes. Just what are you seeing at this point?

Sure, Barton; it's Brian. For 2016 we're on pace to spend roughly $150 million to $160 million in CapEx which compares to about $175 million in 2015. So as we had indicated, we're seeing that come back in. On a more normalized basis, going forward what I would tell you is we believe the target spend to drive the core growth and achieve our long term strategic plan targets would be in that $120 million to $130 million range. But I'd caveat that by saying that investments above and beyond that, incremental investments, we would look to make those where we identify incremental opportunities with compelling returns. Matt referenced on the call two such projects that we have already activated, one for the 2017 season, the Breakers Express expansion and refurb; and the second, the 2018 project which is the addition of roughly 160 additional rooms to the Hotel Breakers at Cedar Point. So when I layer both of those projects back into 2017 and 2018, we probably get closer to that $150 million level again or $140 million to $150 million. But the normalized run rate I think for the core growth and achieving long term targets would be in the $120 million to $130 million range. As far as cash taxes, as we said coming out of 2015, we saw that number moving north as we had used up and exhausted our NOLs. I would anticipate this year to be roughly around a $50 million number. Long term, that range, if I'm looking to give you a range, you're probably in the $50 million to $60 million range over the next several years. But $50 million would be my estimate for modeling for this year.

Now, I understand you're not going to tell us the uptick in the season-pass presales for next year. But can you give us a sense of how much year-over-year attendance so far this year has been season pass versus day visitors?

Well, we've said before that it was north of 40%. We're not going to give a specific number anymore, but we also disclosed it's up 400 basis points from where it was last year. I will tell you I think what's interesting too, Barton, we're really seeing the leverage come out of our CRM organization. The way we're communicating with people, the type of products we're offering to people, the messages we're giving to people, I think all of that is playing in. And then I would encourage everyone to really focus on our special events strategy. There is - we talked about not only a season-pass visitation up this year but the average visit for each of our season-pass guests is up each year. And I think that's going to be a fundamental part of our platform going forward. It is just increasingly obvious to us that people are looking to come to the parks to have something special going on for a limited period of time. And maybe the best example of expanding that is WinterFest next year.

Yes. Now on the topic of seasonal, this double-digit growth in October. Last year's October was, I think, great weather; this year I think was great weather. So why is it up double digits? What's driving that?

Well, I think a couple things. One is you probably had some pent-up demand from earlier in the summer, people who had intended to come and didn't show up. But the reality I think is we're seeing - and I'm not sure it's unique to us. We'd love to take credit for it, but I think these Halloween celebrations just from a consumer appeal standpoint continue to be something that consumers expect and more and more often are taking advantage of. I also will tell you the investment we've made, the quality of our offerings in each of these parks - when you're able to have not only the extra entertainment of Halloween but also all the rides and attractions open, that's a pretty compelling opportunity. So in the end, I've got to give credit back to our operators and our creative people. I think the product is just damn good.

Yes. Then just one final on the seasonal stuff. What's bigger for you guys? Is a WinterFest bigger or a Halloween bigger, where you're doing both in a park?

Yes, I think winter - or Halloween will always be bigger. It generally has a few more days. But we'll find out. People have been around long enough, talk about the early days of Halloween when it wasn't very impressive; and obviously today it's one of our biggest offerings. The other thing - I probably should bounce back to the earlier question. We still believe and again we can't take credit for it, but this consumer who is looking for experiences over possessions, that absolute trend in the consumer purchase behavior is part of what's contributing to our growth overall. I mean this 2% attendance growth for this year is pretty damn impressive, I think.

And we have a question from Tim Conder with Wells Fargo Securities.

I wanted to circle back on Santa Clara. You've had the rezoning going through that process, getting it done. Maybe just give us a little bit of framework as to the dream you want to - where you are going there or the opportunities that you could do, given now that that rezoning is largely completed.

Yes. Tim, I'm not sure quite how to frame it on the call like this, but what you do know is we have a part that's about 120 acres. We have a long term ground lease that runs for multiple decades there. And what the zoning will allow us to do is make investments similar to those investments we've made in places like Carowinds, maybe as a reference point, in a marketplace that is very, very unique in terms of how dynamic and, quite honestly, just how healthy that economy is. What you would expect to hear from us probably in the latter part of next year, by some point, would be a cadence for investment in that park and a vision for where that park goes. I would - I was thinking about it as I was driving in this morning; I think one thing that we'll have to communicate more effectively by the time we get done is, It will be a traditional amusement park, but it probably will end up with elements that aren't at our other parks, particularly an emphasis on retail dining and entertainment for a marketplace that seems to be looking for something like that. But I will tell you, we'll have a better conversation probably late next year, Tim.

Okay, and then one last question here. Fast-passes or, I apologize, the equivalent thereof, what are you seeing maybe year-over-year in the attachment rate there? Both in general for the year and then if you just isolate what's going on here at the Halloween events.

Yes, we continue to see that penetration rate grow. We continue to see price elasticity there that allows us to lean into the big days with them in. And quite honestly, the addition of Valravn here at Cedar Point has a new lever associated with the value associated with it and the fact that we could offer more season passes and the fact that it's highly sought after in terms of demand to ride the new ride. So we continue to believe that program is an extremely important lever for us.

And the Halloween events, would that be a higher rate than throughout the remainder of the year, Matt?

It depends how you look at it, because Halloween events also have Fright Lane passes which are front of the line for the mazes and the Skeleton Key Rooms. So in total I would say the Halloween events have some of the highest revenue days associated with Fast Lane, but it's overall been a huge success for us. I think what Richard would tell you is that we've been - continue to be surprised and it's a positive surprise, that we haven't plateaued on that program yet. So we're going to continue to push it forward.

And that does conclude our question-and-answer session. I'd like to turn the call over to Matt Ouimet for closing remarks.

Thank you all for your questions this morning and particularly for your ongoing interest in our Company. I hope, as you can tell from our comments today, we're pleased with our accomplishments to date and we're confident in our ability to create value through our growth opportunities and continued execution of our long term strategy. We're also confident in the Indians tonight, just for the record. Stacy, back to you.

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

Once again, that does conclude today's call. We appreciate your participation.