Six Flags Entertainment (SIX) Q3 2017 Earnings Conference Call Transcript

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Six Flags Entertainment (NYSE: SIX)
Q3 2017 Earnings Conference Call
Oct. 25, 2017, 9:00 a.m. ET

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Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen. Welcome to the Six Flags third quarter 2017 earnings conference call. My name is Phyllis, and I will be your operator for today's call. During the presentation, all lines will be in a listen-only mode. After the speaker's remarks, we will conduct a question and answer session. If you have a question at that time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I will now turn the call over to Steve Purtell, Senior Vice President, Investor Relations, and Treasurer.

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Stephen R. Purtell -- Senior Vice President, Investor Relations, and Treasurer

Good morning, and welcome to our third quarter call. With me are Jim Reid-Anderson, Chairman, President, and CEO of Six Flags, and Marshall Barber, our Chief Financial Officer. We will begin the call with prepared comments, and then open the call to your questions. Our comments will include forward-looking statements within the meaning of the federal securities laws. These statements are subject to risk 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 measure to GAAP financial measures in the company's annual reports, earlier reports, or other forms filed or furnished with the SEC. At this time, I'll turn the call over to Jim.

Jim Reid-Anderson -- Chairman, President, and CEO

Thank you, Steve. Good morning, everybody, and welcome to our call. I want to apologize in advance, as I have strep throat at the moment, and as of last night, I've actually lost my voice. I will do my very best today, but for sure, you may wonder at times if this is in fact a frog attempting to speak. Our year-to-date revenue and EBITDA are at record levels as the company drives toward its eighth consecutive record year. I'm very proud of our team's performance, given the unprecedented natural events we experienced in the third quarter and beyond, especially after what had already been a very challenging weather period in the second quarter.

On the second quarter call, we mentioned that weather trends continued to be difficult into July. And I can say that we have never before seen a quarter with four hurricanes and three earthquakes. Hurricane Harvey negatively impacted attendance at several parks the weeks before and after Labor Day, with resulting gas shortages across Texas negatively affecting our parks in that state. And then, remnants of the storm impacted our Northeast parks over the Labor Day weekend. Hurricane Irma also negatively impacted attendance at our Atlanta and East Coast parks. In Mexico, our theme parks sustained minimal damage from the September earthquakes, but many homes, commercial buildings, and transportation routes were destroyed in the surrounding area. Leisure activities, including visiting a theme park, have not been top of mind for many residents, and it is still taking time to recover normal attendance.

Our new waterpark did sustain damage, and likely will not reopen until near the end of 2017. Most recently, the massive wildfires in Northern California resulted in widespread evacuation and poor air quality that negatively impacted attendance at our two parks near San Francisco in October. As a result of these attendance impacts, partial achievement of our Project 600 goal in 2017 is no longer deemed probable. However, you can rest assured that the entire team is focused on driving performance, and we are laser-focused and energized to achieve the best possible results this year and next. We feel confident about our ability to deliver a strong fourth quarter and 2018 financial performance.

At a high level, our confidence is derived from our own historical experience with severe weather events. If you study our financial performance after extraordinary events such as Hurricane Irene in 2011 and Hurricane Sandy in 2012, you'll observe that in subsequent quarters, we recouped the lost attendance and resumed our growth trajectory. Specific weather events have not historically disrupted our fundamental progress, which depends much more on our own specific initiative to drive growth. At a more granular level, our confidence stems from several encouraging data points. First, we had by far the most successful Labor Day sale in the company's history, pre-selling a record high number of season passes for the 2018 season, and increasing our active pass base as of September 30th by 13%, an acceleration from being up 12% in the second quarter, even as we increased prices by between $2.00 and $3.00. These passes are good from the date purchased through the end of the calendar year 2018 and will spur additional visits in the fourth quarter this year, especially as we capitalize on pent-up demand caused by the recent extraordinary natural events.

Second, even as this pass base has grown, we have nicely increased the penetration of our all-season dining pass program. As a result of the successful sales on both these products, deferred revenue was up $31 million, or 21%, at the end of the quarter, resulting in our highest Q3 balance ever. Third, we have successfully grown our revenue and profit in the fourth quarter every year for the last seven years by investing in Fright Fest and Holiday in the Park. We're introducing Holiday in the Park at our 11th property this winter, Six Flags New England. Several other parks are entering their second and third years of this very popular event, and we will benefit as it becomes a time-honored tradition at these newer parks.

Fourth, our membership program has grown consistently and is now spreading our revenue more evenly across the quarters, boosting fourth-quarter revenue and increasing the size and stability of our recurring revenue model. Finally, growth in our international licensing business is very strong. You may recall that we recognized very little licensing revenue in the fourth quarter last year, so we have an easier year over year comparison as we head into the fourth quarter. Our consistent fundamental progress is encouraging, and we feel very good about our near-term growth prospects. We are also excited about the longer-term outlook and remain laser-focused on achieving our aspirational goal of 750 million modified EBITDA by 2020. I will talk more about our long-term growth drivers at the end of the call. But first, I will ask Marshall to share some details of our third quarter and year-to-date international results. Marshall?

Marshall Barber -- Chief Financial Officer

Thank you, Jim. It is true that thus far, Mother Nature has dealt us a challenging year. However, the sheer size and continued growth of our active pass base and all-season dining program, along with focus on managing our cost base, has helped us keep our business stable and growing. During normal weather days, park attendance continued to meet or exceed our growth expectations. And as our membership, dining, and international licensing programs continue to grow, a larger portion of our revenue base is spread more evenly throughout the calendar year on a recurring basis.

In the third quarter, year over year total revenue was up $23 million, or 4%, as a result of the 3% increase in attendance, a two million dollar or 23% growth in international licensing revenue, and a two million dollar benefit from foreign currency translation. On a guest spending per capita basis for the quarter, we were up $0.71, or 2% to prior year. Admissions per capita spending was up $0.91, or 4%, while in-park spending was down $0.20, or 1% to prior year, due to the higher mix of season pass and waterpark attendance. On a year-to-date basis, revenue is up $22 million, or 2%, driven primarily by a 2% increase in attendance and a 31% increase in international licensing revenue. Guest spending per capita was roughly flat to prior year, as a stronger mix of season pass and waterpark attendance offset ticket price increases.

Year over year cash operating costs were up 8% in the quarter, primarily driven by the following areas: investments and operating costs related to our two new waterparks; investments to support continued growth in our high margin international licensing business; higher cost of goods from an increased volume of culinary sales, due to our growing and highly profitable all-season dining program; an increase in minimum wages, particularly at our California parks; some timing shifts between quarters versus prior year; and finally, costs related to our work as compensation program, which we did not anticipate to be recurring. Importantly, year-to-date cash operating costs were up a modest 3% over 2016 levels. In the first nine months, we generated $229 million of adjusted free cash flow and paid $168 million in dividends. During the third quarter, we also paid off the remaining 29 million dollar balance on the 6.72% term loan associated with our hotel waterpark in Queensbury, New York.

Net debt as of September 30th was $1.9 billion, and our net leverage was 3.8 times adjusted EBITDA with no borrowings under our revolver. During the quarter, we repurchased $128 million of our shares, bringing the year-to-date total to $499 million. This is the second highest share repurchase year in our company's history. And so far this year, we've reduced our net outstanding share account by more than seven million shares. Since emerging as a public company, we have reduced our share count from 110 million to 84 million shares and increased our cash EPS from $0.08 to more than $3.00. Given the high recurring nature of our revenue, strong cash flow, and significant growth opportunities, we have plenty of room to grow our dividend by high single digits for the foreseeable future. Our LTM modified EBITDA margin remains the best in the industry at 40.7%, while our modified EBITDA less CapEx margin of 30% is several hundred basis points higher than any of our competitors.

We're confident that we can continue to improve our modified EBITDA margin over the long-term. As Jim mentioned, partial achievement of our long-term Project 600 goal in 2017 will be challenging, but we are focused on striving toward partial achievement, [inaudible] it is no longer deemed probable from a GAAP viewpoint. As such, we reduced our crude stock-based compensation expense by $45 million in third quarter, to reflect 50% of the target payout, or 1.3 million shares being awarded in February of 2019. This is based on the expectation that the company exceeds $601 million of modified EBITDA in 2018. As we've said in the past, we continuously assess our tax strategy and available options to minimize our tax payments. Based on our latest estimates, we do not expect to become a full taxpayer until 2024. We now expect to pay minimal federal taxes in both 2018 and 2019, with the ramp-up beginning in 2020.

In summary, although we have faced unprecedented challenges this year, our team remains highly motivated. We're working hard to deliver another record year in 2017 for our shareholders, and are very encouraged by our early indicators for 2018 and beyond. Now I'll turn the call back over to Jim. Jim?

Jim Reid-Anderson -- Chairman, President, and CEO

Thank you, Marshall. We are well-positioned for growth in 2018. We have taken prices up 3 to 5%, and our active pass base and all-season dining pass penetration are at record highs. And although I cannot share specific details, there are a number of potential partners that could contribute to both our international licensing and waterpark strategies. On top of that, we will have more operating days in 2018, with both our new waterparks open for the full season and with Magic Mountain beginning year-round operations, enabling us to grow revenue and EBITDA with no additional capital.

Opening Magic Mountain every day will allow us to more fully access the 48 million tourists that visit Southern California every year. The park has seen significant growth and expanded its calendar over the last seven years. And this will put its calendar on par with the other theme parks in the region. An important part of our growth strategy has been to open something new in every park every year. Next year, we will showcase the most impressive lineup of new rides and attractions in the company's history, including no less than five world firsts and record breakers. Several of the rides and attractions will be themed after the most famous superheroes and supervillains in the world. At Fiesta, Texas, we are introducing Wonder Woman Golden Lasso Coaster, the world's first single-rail coaster. At Great Adventure, Cyborg Cyber Spin, the ride with a unique futuristic triple box design, is the first of its kind in North America. At Discovery Kingdom, the new Harley Quinn coaster is the first of its kind, looping coaster, featuring multiple inversions along a vertical figure 8 track. At Great America, the tallest looping coaster in the world. And not to be outdone, at Magic Mountain, which is, as you all know, the thrill capital of the world, we are introducing CraZanity, the world's tallest pendulum ride.

Looking longer-term, the opportunities in front of Six Flags are greater than ever before. Our Project 750 goal represents a cumulative annual growth rate of more than 10%. This, in my opinion, is an appropriate stretch goal for an aggressive organization. Our long-term financial goals and related projects provide complete alignment between our employees and shareholders and have driven more than $5 billion in shareholder value since 2010. We believe achieving Project 750 would generate an additional $2.5 billion of shareholder value. Most companies are happy to have one or two major growth areas. We have five. And this is where I have spent all my energy since returning as CEO. These five key growth areas, to help us achieve this goal, are all still in early stages, and will drive revenue and margin growth for the foreseeable future.

The first area is increasing ticket yields. I have to tell you, I have never been more confident in our ability to raise prices. We have been taking pricing up on every ticket type, and we have seen no pushback from our guests. In fact, our value for money ratings have improved every year for the past seven years, and are currently at all-time highs. In addition, we are seeing our overall guest satisfaction scores increase very nicely over 2016.

The second area of strategic growth is increasing sales of season passes and memberships. We have grown both our active pass base and our unique visitors over the past year and over the past seven years since beginning our current strategy. Our revenue per unique guest is at all-time highs, as the season pass-holders and members are our most valuable guests. Yet these guests still only represent about one-third of our unique visitation. Our goal is to convert the remaining two-thirds of our guests, as we have ample capacity in our parks to do so.

The third area of growth is in park sales, especially culinary revenue. Our all-season dining pass program has been a huge success and is being copied in the industry. It is a tremendous value for our guests and a high-margin recurring revenue stream for us. If you add a dining pass, that pass-holder generates three to four times the revenue of a single-day guest over the course of a season. We have achieved record penetration and are very pleased with our renewal levels. But we still have plenty of room to increase penetration for many years to come.

The fourth key growth driver is international licensing. This attractive, long-term strategy allows us to monetize our globally known brand and expertise with no capital investment. We are only beginning to realize its potential. We have already announced five parks, and the licensing revenue through September grew 31%. We have a great deal of -- a great pipeline of deals, and they provide a hedge against any single deal. And our partners are well funded, with full backing from their respective governments.

The fifth growth driver is our strategy to acquire parks nearby our existing theme parks. This strategy allows us to expand our addressable market and grow our active pass base even faster in our feeder markets. The opportunity is both compelling and large-scale, as there can be multiple parks in each market. The strategy has proven itself in Mexico, where season pass sales are up significantly this year after adding a nearby waterpark to our season pass offering, and in Concord, California, where our waterpark has had its ten biggest days in history since we acquired the park.

Six Flags is the foremost brand in the global regional theme park space, a segment benefiting from a growing trend of consumers favoring experiences over possessions. We provide family entertainment that is affordable in any economic environment, and we consistently deliver guests excellence, innovative products, and attractions, and the highest industry growth rates in attendance, revenue, EBITDA, and EBITDA less CapEx. Our season pass membership, all-season dining, and other in pass park programs, along with our multi-year international licensing and sponsorship deals provide a significant and growing source of recurring revenue. Finally, we return all excess cash flow to shareholders through a balanced approach of dividends and share repurchases. Our dividend yield is double the S&P 500, and we have grown our dividend every year for the last seven years, making us the ultimate growth and yield stock.

At this time, Phyllis, could you please open the call up for any questions?

Questions and Answers:

Operator

At this time, if you would like to ask a question, please press star, then the number one on the telephone keypad. That was star, then the number one. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Barton Crockett with FBR Capital.

Barton Crockett -- FBR Capital -- Analyst

Thanks for taking the question, and congratulations on being able to grow despite kind of biblical natural headwinds.

Jim Reid-Anderson -- Chairman, President, and CEO

Thank you, Barton.

Barton Crockett -- FBR Capital -- Analyst

I want -- yes. And I was curious about the -- first, on the operating expenses. So, you're up 3% kind of year-to-date, I think you quoted, on cash out backs. There's a lot of noise in there with the waterparks, natural events, closings of parks, people eating a lot more kind of all-season dining pass food. How should we think about the normalized trend in expenses as we go into 2018?

Marshall Barber -- Chief Financial Officer

Well, Barton, you are correct. On a year-to-date basis, we have done a very good job managing costs. If you exclude the growth associated with the two new waterparks and the international licensing business, our cost growth is actually less than 2% year-to-date. I think if you look at the year-to-date and LTM rates of increase, that's probably more in line with what we're gonna end up with for the year. And then we won't comment on 2018. But you can rest assured we'll continue to manage costs like we have in the past.

Marshall Barber -- Chief Financial Officer

Okay. And then one of the things we were also wondering about is insurance proceeds from any of these events, particularly the earthquake in Mexico. Just update us on what we're seeing there, and what the potential is for something to come in.

Jim Reid-Anderson -- Chairman, President, and CEO

So, Barton, Steve's gonna take this one.

Stephen R. Purtell -- Senior Vice President, Investor Relations, and Treasurer

Yes, Barton. So, as we have commented, the theme park itself was only closed for a short period of time, so it had no damage. So, there's no insurance proceeds required for that.

Jim Reid-Anderson -- Chairman, President, and CEO

We obviously lost a little bit of revenue in that process, but there's no insurance coverage there.

Stephen R. Purtell -- Senior Vice President, Investor Relations, and Treasurer

Correct. The revenue loss was from the general area around the park, not from something that happened to the park. On the other hand, the water park, like all of our parks, carries insurance for business interruption and for property damage. And we'll be reimbursed for all the property damage and for business interruption during the period until the park is open. And so, we expect to have minimal loss in the long run from the park.

Jim Reid-Anderson -- Chairman, President, and CEO

Right. We're not gonna disclose how much, because obviously, we're still in the process of working that with the insurance company, Barton. But in essence, think of it as covering any losses that we have.

Marshall Barber -- Chief Financial Officer

Okay. And then just kind of one final thing here about the environment here in the fourth quarter, which has, as you pointed out, historically been a strong frame for you guys. Clearly, a lot of noise with fires in California, Northern California. You didn't talk about Southern California, but there has been some fires there. I wonder if it's impacting you. But overall, does the environment feel like one where you feel good about the growth trend of past years, having a setup to be able to persist this quarter, or is there so much kind of noise that maybe we should be a little bit more cautious about that at this point?

Jim Reid-Anderson -- Chairman, President, and CEO

You know, Barton, we don't generally comment on quarters, but it's very clear that the fires did have an effect early on in the quarter. I would tell you that, aside from that, we feel very confident about the quarter for many of the reasons that I articulated. And on normal days, we're seeing just incredible performance. And just this past Saturday -- I'll tell you something that I would never normally disclose, but we had the highest attendance and revenue day in the company's history. And it shows you that in the right environment, you see very strong turnout from guests and spending at a very good level. So, while the first two weeks where it was clearly impacted, we feel that we're seeing a very strong response.

Fright Fest is the best Fright Fest offering we have ever had. And if you haven't gone, Barton, I strongly recommend that you go this season. Holiday in the Park will have more parks that -- we're viewing them coming online -- that have the Holiday in the Park offering. And we'll have a lot -- Magic Mountain, as we've told you, has new product coming. We're moving to 365 days. A lot of positive news laying ahead of us, and we feel confident about the quarter.

Marshall Barber -- Chief Financial Officer

Okay, great, and thank you.

Operator

Thank you. Your next question comes from the line of Tim Condor with Wells Fargo Securities.

Tim Conder -- Wells Fargo Securities -- Analyst

Thank you. Jim or Marshall, whoever wants to take these -- Jim, just to preserve your voice, or ... On the season passes that clearly went very well, in spite of you continuing to be able to raise prices, which is great, were there any changes in your early to buy incentives on a year over year basis related to this?

Jim Reid-Anderson -- Chairman, President, and CEO

Actually, you know what, Tim, we really spent a lot of time -- we have a crack marketing and research team. And every year, we refine the process to make it as effective as possible. And I can tell you, it's the best process we've ever had. So, I am so happy with the result. I mean, you've seen the active pass base growth, 13%, to the highest level in our history. And we were talking about huge increases in pass-holders, exactly the strategy that we've been articulating. All of this while increasing pricing by $2.00 to $3.00, and closer to the $3.00 level. So, it's very hard to be able to do that, as you can guess, increase the number of people buying at a much higher price point. So, we have cut -- in essence, cut the level of discounts. But what we've done is really enhance the way that we communicate with our guests. So, you look at a 70% off price point, which really attracts people. But that price point is $2.00 to $3.00 higher than it was a year ago.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay. So, I guess maybe potentially analogous to what we've seen in the cruise industry the last few years. As you referred to in some of your preamble, this is about yield management offers somebody some incentive, but net-net, you put it all together, at the end of the day, we're continuing to drive those collective ASPs higher. Fair?

Jim Reid-Anderson -- Chairman, President, and CEO

That is exactly right. And in addition, what we've done has now much more effectively linked in all of the other items that we sell in the park. As an example, as you're buying a season pass, we immediately prompt you for an all-season dining pass and many other in-park offerings. And that, we saw huge success with.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay. Great segue into my next question. Can you comment, given it's been very successful and remains a very critical early stage part of your further development, can you give us some type of reference as to, Jim the penetration of the all-season dining or beverage passes? Or maybe another way to ask it, can you give us a comparison here, the growth rate in those passes year over year relative maybe to what we're seeing on the active pass base growth rate?

Jim Reid-Anderson -- Chairman, President, and CEO

The growth rate on our all-season dining passes is far higher than the active pass base. We're seeing really strong growth. And yet, the penetration is still really low, Tim. So, the way that I would think about it so you can put it into perspective -- and I'm not gonna give you a percentage or say this is the number -- but this will help you understand how far along we are in the all-season dining pass. I would think in terms of second or third innings.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay. Well, I'll push here a little bit. Can we say that we're still maybe below 25% penetration, given that kind of third inning?

Jim Reid-Anderson -- Chairman, President, and CEO

I think that's probably a fair assumption for right now.

Tim Conder -- Wells Fargo Securities -- Analyst

Great, great. That helps. Thank you. On the international front, it sounds like you're alluding to some additional park developments. Obviously not over the goal line yet, but getting close. Just anything else you can offer -- Saudi Arabia, some rumors you may be close to a third park in China. And then any update on the situation in Vietnam?

Jim Reid-Anderson -- Chairman, President, and CEO

So, I think you asked about Vietnam, China, and Saudi. Saudi is one that has been publicly revealed that we are in discussions. We continue those discussions. And as soon as we have something that is concrete with contract signed, we would announce that. So, I'm not in a position to say any more than that, Tim. Vietnam, we continue to work with other partners, and we're very hopeful that at some point, we can announce something. But again, it's a matter of getting the right deal with the right partner and the right location, and we'll never compromise what we're looking for in terms of a deal in order to get something announced quickly for the public. That's just not gonna happen.

China, I think, continues to show very strong growth, and there was a leak of an announcement that took place in China. But yet again, we only announce things once they're final and formalized. So, just with those three things, you can see, as there's public information leaking out there, there is a lot of work going on, not only there, but in other places. And once we're at the point where we have contracts that we as a company are satisfied for and that do what we need to create shareholder value, then we will announce them, Tim. But you should rest assured there's a lot going on not only on that front but also with regard to waterparks and other opportunities for us with regard to expansion along those lines.

Tim Conder -- Wells Fargo Securities -- Analyst

Okay. And then one housekeeping and one last question. You said acquiring nearby parks in your preamble also. Did that mean more than waterparks, I guess is one. And then on the housekeeping, Marshall, you said that some workers compo or some one-time costs. Can you quantify that?

Marshall Barber -- Chief Financial Officer

So, in terms of your first question, yes, it could be more than one park in the market. It could be a waterpark, a small theme park. What we're looking to do is we're looking to leverage our season pass base, which is huge in these markets and be able to take and buy right or operate without buying these properties, and then leverage it up with our season pass and create tremendous shareholder value for every little investment or no investment.

On the other question, I've spent a lot of time bridging out the expenses in the third quarter, and I don't want to quantify any of those, so I think we'll leave it with what we have in the prepared comments.

Jim Reid-Anderson -- Chairman, President, and CEO

I think it's fair to say that Marshall would not have listed those workers comp as one of the key items if it wasn't material. It's certainly a material amount, Tim, but we don't break out these amounts. The really important fact is what you refer to, if you look at our year-to-date numbers, we're at around 3%. And if you exclude the new waterparks, which are generating revenue for us, it's more like 2. But I think in terms of 3, in that range.

Tim Conder -- Wells Fargo Securities -- Analyst

Great. Thank you, gentlemen.

Marshall Barber -- Chief Financial Officer

Thank you.

Jim Reid-Anderson -- Chairman, President, and CEO

Thank you, Tim.

Operator

Your next question comes from the line of Tyler Batory with Janney Capital Market.

Tyler Batory -- Janney Capital Market -- Analyst

Thanks. Good morning. So --

Jim Reid-Anderson -- Chairman, President, and CEO

Hi, Tyler.

Tyler Batory -- Janney Capital Market -- Analyst

Hi. I'm wondering if you could talk a little bit more about the incremental operating days at Magic Mountain in the first quarter here. Are you able to disclose how many extra days you're gonna get there? And then any more details you can share, just to help us think about the potential impact to attendance or EBITDA from having that park open full-time in the quarter?

Jim Reid-Anderson -- Chairman, President, and CEO

We're not gonna quantify the incremental EBITDA, but you can rest assured, Tyler, that we wouldn't have moved to a 365-day operation if we didn't believe that it would generate incremental EBITDA. We won't break down the quarter, but I can tell you that for the full year, it will add about a hundred days.

Tyler Batory -- Janney Capital Market -- Analyst

Okay, that's great. And then, question here on Holiday in the Park. I mean, you're adding it to New England. You have another couple other parks that are in kind of years two and three with this event. How do you see the ramp here at some of these parks that have had it only for a couple years? How much growth do you think you have, and when does it really get to a point where it's mature? Is there any chance that Holiday in the Park becomes as significant as Fright Fest at some of your parks?

Jim Reid-Anderson -- Chairman, President, and CEO

That's a really, really good question. And what we've found, Tyler, is that if -- year one is not the peak year. It's probably year three, four, or five. Probably really four or five that you start seeing it hitting a point where you're really getting full understanding from our guests as to how great this even really is. And we've learned this by studying the other parks that have been open for longer. They have consistently ramped up as we've gone forward. And we have multiple parks that are sitting in their second or third year that are gonna get that sort of -- and even fourth year, that are gonna get that sort of ramp up, we believe. So, we're quite excited about adding New England. And we continue to assess the other parks that are not in Holiday in the Park with a view to potentially opening them up as we assess how the new parks, such as New England, do.

Tyler Batory -- Janney Capital Market -- Analyst

Okay, that's great. And then, just last question from me. There's a lot of talk I hear about the all-seasons dining pass and the penetration opportunity there. But what do you think about the pricing opportunity? Is there a chance to increase the prices there, or are you maybe more focused on increasing the penetration before you start getting a little bit more aggressive on pricing that product?

Jim Reid-Anderson -- Chairman, President, and CEO

On all-season dining specifically?

Tyler Batory -- Janney Capital Market -- Analyst

Yes.

Jim Reid-Anderson -- Chairman, President, and CEO

Right. So, we have taken pricing up on all-season dining, but we've also created two layers of all-season dining pass. So, there's one layer at a lower price point with more -- with fewer options. In other words, one meal versus two. And then we have a higher premium-priced product that, by the way, most of our guests go for at the higher price point, with more -- two meals and a snack. And no matter which price point you look at, the lower price point or the higher price point, the premium product versus the regular, they are accretive to our margins, substantially accretive. So, not only are we gaining revenue, but obviously, the margin improvement comes with it.

Tyler Batory -- Janney Capital Market -- Analyst

Great. That's all for me. Thank you.

Jim Reid-Anderson -- Chairman, President, and CEO

Thank you very much, Tyler.

Operator

Your next question comes from the line of [inaudible].

Sorry, who was that, Phyllis? Could you repeat that?

Operator

Steve Wieczynski.

Jim Reid-Anderson -- Chairman, President, and CEO

Okay, got it. Thank you.

Steve Wieczynski -- Stifel, Nicolaus & Company -- Analyst

Thank you. Good morning, guys. How are you? I'm surprised how strong some of your revenue lines were in the quarter, given the magnitude of weather events that you guys did kind of live through. So, I don't know if you'll answer this or you want to answer this, but is there any way you can quantify what you think the weather impact was, either in maybe the lost visits or EBITDA?

Jim Reid-Anderson -- Chairman, President, and CEO

Steve, obviously we have a very good handle on that internally, but we're not gonna disclose what that was. It was substantial, though. I mean, literally, if you go park by park, Mexico, you can imagine the impact of people just not showing up. Mexico has grown to be one of our biggest parks, incredibly popular, and very, very profitable. So, for a period of time, we definitely lost momentum, and it's a substantial amount of EBITDA and revenue that was lost.

Steve Wieczynski -- Stifel, Nicolaus & Company -- Analyst

Okay, gotcha. I didn't think you would answer it, but I thought I'd ask anyway. Second question, I guess, can you just talk about the general health of your typical customer? Sounds like as you've raised prices, there has been little pushback, which is great, but I guess there's this fear out there that the consumer might be getting softer or rolling over. So, can you maybe just address that concern?

Jim Reid-Anderson -- Chairman, President, and CEO

It's a very valid question, and I spend a lot of my own personal time trying to think through -- reading about the consumer, visiting with the consumer, trying to understand people are feeling, and I always go with the assumption that things are not good, because I think it's better to be cautious and not assume that our guests have a lot of money to spend. And so, what I would say to you is that while I assume that, and we approach it that way and try to ensure that we're always delivering a value offering, we see no evidence yet of any pushback from consumers, whether it comes from pricing, or dining, or spending in the park. When they're in the park, they spend money, and they spend money very nicely. And you've heard me describe last Saturday at our parks, where we had a record of all time of the company in terms of the revenue, and that included incredible in-park spending. So, I will commit to you, Steve, that we will continue to be cautious. We'll assume the worst and plan on that basis. But the truth is that we've not seen any evidence of pullback.

Steve Wieczynski -- Stifel, Nicolaus & Company -- Analyst

Okay, great. That sounds good. And then last question, simple question. The Project 600 target for this year, when you say at this point, it's not likely, is that due more to weather events, or higher costs, or just a flat-out combination of both those items?

Marshall Barber -- Chief Financial Officer

So, when we say it's not probable, it's really driven by all the things that Jim mentioned in his prepared comments. Whether the third quarter, the four hurricanes, the earthquake impact, and then now the fires in October, it just makes it much more challenging to get there. And so, that's really what it is.

Steve Wieczynski -- Stifel, Nicolaus & Company -- Analyst

So, asking in a different way, if you didn't have the weather events, you would still feel comfortable with that 600 hundred million dollar target?

Jim Reid-Anderson -- Chairman, President, and CEO

I think we talked on the last call, Steve, about the fact that we were going for the entry point, which was 567 million, as being much more likely, much more probable. And since then, the weather effect has taken us below that. So, I would say it slightly different from the way you said it, which is I would say that those called biblical-like events that we've survived definitely caused us to miss that entry point.

Steve Wieczynski -- Stifel, Nicolaus & Company -- Analyst

Okay, great. Great color. Thanks, guys.

Jim Reid-Anderson -- Chairman, President, and CEO

In terms of how we look at it. Now, I would tell you that we are still trying very hard. We will maximize profitability this year. We'll get the highest possible level. There is a very small chance we could make it. That's why it's no longer probable. But we wanted to make sure that our investors understood the impact and that it was much less likely.

Steve Wieczynski -- Stifel, Nicolaus & Company -- Analyst

Okay, great. Thanks a lot. Appreciate it.

Jim Reid-Anderson -- Chairman, President, and CEO

Thank you, Steve.

Operator

Your next question comes from the line of James Hardiman with Wedbush.

James Hardiman -- Wedbush -- Analyst

Good morning, guys.

Jim Reid-Anderson -- Chairman, President, and CEO

Hi, James.

James Hardiman -- Wedbush -- Analyst

How you doing? So, to Steve's last question there, I just want to make sure I understand the equity comp situation. The reversal in the second quarter was because the 600 million dollar target was no longer probable. This reversal is -- at the $567 million is no longer probable? Is that how to think about it?

Marshall Barber -- Chief Financial Officer

That's correct. That's correct. Because the credit this year or this quarter assumes now we'll be accruing based on something that will exceed $601 million in 2018, which is the late achievement of the award.

James Hardiman -- Wedbush -- Analyst

Got it. I was hoping you could help us tease out maybe the organic piece from the nonorganic. Obviously, you had the benefit of the new waterpark in Mexico, although that was obviously cut short. But then you had the waterpark in Concord. Any way to think about sort of your business excluding those two sort of noncomparable benefits?

Jim Reid-Anderson -- Chairman, President, and CEO

Yeah, I think in attendance terms, there's a lot of assumptions out there as to what's impacted attendance. The truth is, we got a benefit from the new waterparks, at least Mexico for a period of time. But the reality is that we saw both organic growth and growth from new waterparks. It's both.

James Hardiman -- Wedbush -- Analyst

Okay. And then secondly, how do I think about pent-up demand? Obviously, you had a lot of visitors that weren't able to go to your parks during the third quarter, some of these natural disasters. I would imagine that the answer is somewhat different depending on whether you're a pass-holder or not a pass-holder. But I guess, A, from a visitation perspective, when do you think those visitors tend to return? Is it still potentially this year or into next year? And I guess from an accounting perspective, people that have already paid, if you're a pass-holder, are you gonna get an extra amount of revenues that show up in the fourth quarter sort of independent of visitation?

Marshall Barber -- Chief Financial Officer

Well, so, the attendance really -- on the season pass, one of the benefits of having this large season pass base is that people will get their visits over the course of a year. So, if they don't get it in one quarter, then they will ultimately get their visits by and large. So, we adjust -- from an accounting perspective, we adjust it really every month, and so there's not a big, huge amount of money that's left over for the fourth quarter, assuming -- because it is adjusted every quarter. But yeah, there are -- for our season pass-holders, they will get their visits. And I think Jim talked about last Saturday being a record attendance and revenue day for us. And a lot of that is our people with pent-up demand, as well as our Fright Fest product, which is terrific this year.

Jim Reid-Anderson -- Chairman, President, and CEO

So, James, another way to think about it is -- and I did say this in my prepared comments -- but we definitely see, over a period of a number of quarters, people coming back. It may not come back immediately in the quarter, but I would say to you that given that we have such a long runway in this quarter, we're feeling confident about the ability to get most of those people to visit. Will it make up for all of the loss? I suspect not, but we're continuing to see nice growth and attendance.

James Hardiman -- Wedbush -- Analyst

Okay, that's very helpful. And then lastly for me, I was hoping you could expand on tax commentary that you had prepared remarks on. I feel like some that's new. I guess, A, sort of the notion of that ramp from, I guess, 2020 to 2044. And then, B, I think you were talking about 2018 being the last year. Now it seems like 2019 is the last year. Maybe I didn't get the most recent update there. But can you sort of walk us through what's changed on the tax front? I think it's basically $15 to $20 million of taxes per year. But then how do you expect that tax rate to ramp, I guess, once we get past 2019?

Marshall Barber -- Chief Financial Officer

Okay, so we actually don't anticipate becoming a full taxpayer until 2024. As I mentioned in the prepared comments, we anticipate a low level of federal income taxes in 2018 and 2019. In terms of the amount, it'll be $25 to $50 million per year. From 20 to 23, we still have significant NOLs subject to an annual usage limit, which can shield about $30 million of taxable income per year. So, if you look at the cash flow we'll generate from the attainment of Project 750 in 2020, we have plenty of free cash flow to continue to grow our dividends in the highest single level. And even if we have much more modest growth, we will be able to continue to grow our dividend year in and year out for the foreseeable future.

James Hardiman -- Wedbush -- Analyst

And I guess what gave you that incremental shield that I don't feel like you were talking about previously? And what is the full tax rate? Assuming that there's no tax reform, what's the ultimate number that we're working our way toward, I guess, in 2024?

Marshall Barber -- Chief Financial Officer

Ultimately, for cash taxes, it'll be about 30 percent. Uh, and we -- as we always have done quarter in and quarter out, we work with our tax advisors to, like all companies -- to find ways to shield our tax exposure. And as you get closer to the years that we're talking about, you get much more visibility and clarity. So, rather than get into a lot of detail, that's basically what it is.

Jim Reid-Anderson -- Chairman, President, and CEO

And James, we've always said that. If you look back on our transcripts going back seven years, we've said we're working closely with tax advisors. And we continue to do that, and we will continue to do that going forward. So, I think it's good news overall for the company and for our investors, and we'll continue to work hard on this front.

James Hardiman -- Wedbush -- Analyst

Definitely agree. Thanks, guys.

Jim Reid-Anderson -- Chairman, President, and CEO

Thank you.

Operator

Your next question from the line of Ian Zaffino with Oppenheimer.

Ian Zaffino -- Oppenheimer -- Analyst

Hi, guys. Thank you very much.

Jim Reid-Anderson -- Chairman, President, and CEO

Hi, Ian.

Marshall Barber -- Chief Financial Officer

Good morning.

Ian Zaffino -- Oppenheimer -- Analyst

How are you?

Jim Reid-Anderson -- Chairman, President, and CEO

Good.

Ian Zaffino -- Oppenheimer -- Analyst

Question with the -- Jim, I know you mentioned 750, that is was an aggressive target for an aggressive organization. And I guess you pointed to the growth rate that you would need to achieve that. So, does that mean, given the performance this past quarter, that the target has become more aggressive, or do you view kind of this quarter or the last, second quarter as kind of one-time events, and so in your head, the goal of 750 is just as aggressive or equally as aggressive as it was when you first kind of retook over the role?

Jim Reid-Anderson -- Chairman, President, and CEO

I think, Ian, again, that's a really good question. And there is no doubt that what has happened in the last two quarters has made the goal of Project 750 that much tougher, right? We were on a track where we're seeing stronger EBITDA growth. That has slowed over the last two quarters. So, we definitely have more work to do to get to Project 750 by 2020. But the team is absolutely laser-focused on it. I think I've described all of the opportunities that we have that we're working on to get there. We know that this is really a very unusual year from a weather and natural disaster perspective, so that goes away, and we'll pick up some benefit from that. But in addition, a 10% growth rate fro the company, while aggressive, I think is a very good thing to have, and it's very good for our investors.

And we're gonna work really hard on innovation, on ticket pricing, and season pass, and membership penetration, in park revenue and pricing; special events like Fright Fest, Holiday in the Park, Mardi Gras; international licensing, the waterpark rollout strategy -- all of these things represent big opportunities for a company like ours, an aggressive company that's looking for growth. And we will have -- probably have other things that get in our way over the next three years as we work toward that goal, but this team is laser-focused and knows how to get there.

Ian Zaffino -- Oppenheimer -- Analyst

All right, great. Thank you very much.

Jim Reid-Anderson -- Chairman, President, and CEO

Thank you, Ian.

Marshall Barber -- Chief Financial Officer

Thank you.

Operator

Your next question comes from the line of Michael Swartz with SunTrust.

Jim Reid-Anderson -- Chairman, President, and CEO

Hi, Michael! Michael, you may be on mute.

Michael Swartz -- SunTrust -- Analyst

Hey, good morning. Sorry about that.

Jim Reid-Anderson -- Chairman, President, and CEO

Hi, yeah.

Marshall Barber -- Chief Financial Officer

Morning.

Michael Swartz -- SunTrust -- Analyst

Hey. I understand you're not gonna give us the granularity of what weather or how weather impacted the quarter from an admissions or EBITDA standpoint, but could you give us a sense of how many operating days you had in the third quarter this year versus last year on a like for like basis?

Jim Reid-Anderson -- Chairman, President, and CEO

We're not going to give that. But I can assure you that with the weather and the disasters, we're looking at a much greater effect, especially at weekends, which are the key -- really the key times.

Michael Swartz -- SunTrust -- Analyst

Okay. And next question, just on the admissions per cap was much stronger than I would have anticipated, particularly with what happened with weather. How much of that is just having the easier comp versus last year? I think we had -- last year was the heat wave and had a lot more active pass in the mix versus pricing or other factors this year.

Jim Reid-Anderson -- Chairman, President, and CEO

You're saying, is that an effect of having a lower season pass membership somehow affecting this? Is that what you meant?

Michael Swartz -- SunTrust -- Analyst

Well, just referring back to last year when we had a heavier active mix, which depressed admissions per caps. I'm trying to understand why they were up 4% in the third quarter.

Jim Reid-Anderson -- Chairman, President, and CEO

The most important factor on per cap has been the pricing that we've been taking without any doubt, Michael. We've taken pricing at every opportunity across every category. There hasn't been a single category of ticket that we haven't taken pricing up on.

Marshall Barber -- Chief Financial Officer

And our mix actually is up to prior year.

Jim Reid-Anderson -- Chairman, President, and CEO

In other words, there are more season pass-holders.

Marshall Barber -- Chief Financial Officer

Yeah.

Jim Reid-Anderson -- Chairman, President, and CEO

So, which would have a negative effect theoretically, which does on per cap.

Michael Swartz -- SunTrust -- Analyst

Right. Okay, that's all for me. Thanks.

Jim Reid-Anderson -- Chairman, President, and CEO

Thanks, Michael.

Operator

Your next question comes from the line of Chris Verecchio with Goldman Sachs.

Chris Verecchio -- Goldman Sachs -- Analyst

Good morning, guys. Thanks for taking the questions.

Jim Reid-Anderson -- Chairman, President, and CEO

Hi, Chris.

Chris Verecchio -- Goldman Sachs -- Analyst

Just one quick follow-up. I just want to make sure I understand some of the op ex commentary in terms of what you all consider one time versus recurring. So, the worker's comp would be one-time. Are the investments to support the international growth, is that sort of a one-time investment, or is that recurring? And then as all-season dining penetration continues to rise, I would expect that the op ex related to that program would as well? Am I thinking about those two correctly?

Marshall Barber -- Chief Financial Officer

Yeah. So, the worker's comp would be the one-time cost and nonrecurring in nature. The international, we've been investing in international and increasing our investment slowly. It still has a margin of 80%. So, these investments are really to support the revenue growth that we're getting. And then from an all-season dining, we built out our locations. We always continually build them out. But they really are such a high margin revenue business that they're accretive as we spend those costs. But I'd say that really, that's more -- those costs are really baked in because they're part of the restaurants and locations that we have. So, that's just normal spending. But yeah, we will do -- as that program continues to grow and we serve more meals, there will be more labor.

Chris Verecchio -- Goldman Sachs -- Analyst

Great, that's helpful. And then just on -- I understand the minimum wages, but what are you seeing in the wage environment more broadly outside of just federal or state minimum wage increases?

Marshall Barber -- Chief Financial Officer

We have a couple parks where we've raised wages slightly. It's actually been -- the labor pool is pretty good, really. I don't think we've had any real staffing shortages to speak of.

Jim Reid-Anderson -- Chairman, President, and CEO

There's no doubt, I think, though, to your question, Chris. It is getting hard. There's no doubt across many parks to source people, we have been able to successfully do that, but it is harder. And minimum wage and wage pressures definitely exist. And that's part of what we've been seeing. So, I would tell you, though, that we've been seeing it for the last four to five years, and we've been managing it and offsetting it. But there's no doubt as we grow and as we need more people, that's something that is an added pressure point that we manage.

Chris Verecchio -- Goldman Sachs -- Analyst

Great. And then I just had a couple of quick questions on Magic Mountain. I guess first, what drove the decision to expand the operating season now? Was there something holding you back before? And then any interest either in partnering or building a hotel in the area? And then could you give us any sense for what percentage of Magic Mountain visitors are tourists versus local, and do you have a sense for what percentage of your customers overlap with the other parks in the area?

Jim Reid-Anderson -- Chairman, President, and CEO

So, that is again a great question. And let me take pieces of that and work it through. So, your question about the -- who the visitors are. And about 48 million visitors are tourists, and about 24 million are Southern Californians. So, it's a really big pool of people that can visit. And in essence, we've been locked out of being able to really target the 48 million tourists, because if you think about it, when we're dealing with groups, especially international groups, they want to know that they can come on any day they choose, and we've not been able to offer that for them. So, I think we've been losing out, and that's really what drove the opportunity. Our team at Magic Mountain has done an incredible job over the last few years growing attendance, revenue, and profitability and cash at unprecedented rates.

And that's what really drove this decision, the ability to capitalize on that growth and success in a booming market has led us to say, do this now, because we've got the thrill capital of the world right there. We've got a record-breaking 19 rollercoasters, which no one else can match. And this calendar then puts us on par with all of the other theme parks in Southern California. So, we're really the only company that didn't do it. We've been planning and looking at it for a while, but this is the year to do it.

Chris Verecchio -- Goldman Sachs -- Analyst

Great, that's really helpful. That's all for me.

Jim Reid-Anderson -- Chairman, President, and CEO

Thank you, Chris.

Operator

Your next question comes from the line of Ryan Sundby with William Blair.

Ryan Sundby -- William Blair -- Analyst

Hey, guys, thanks for taking my question.

Jim Reid-Anderson -- Chairman, President, and CEO

Hi, Ryan.

Ryan Sundby -- William Blair -- Analyst

Hey. I just have a quick follow-up to Chris's question on Magic Mountain. Is there an education process required to kind of inform people that this now open year-round, so it maybe takes a couple years to build into that?

Jim Reid-Anderson -- Chairman, President, and CEO

I think that's actually true, Ryan. I think it'll take a little while. It won't be an immediate huge bump, although that would be nice if it happens. I think it's more likely to be a build, which I think is very exciting for the park. And the education process will come from how we communicate with our guests. So, we obviously have already begun the process of communicating to our existing guests that the park is open. But now, we've got a fairly major campaign ongoing, both at the grassroots level and also through media that we'll build over time to ensure that people know that we are there and there 365 days a year. And especially when we come to digital, where we have a tremendous team working on getting our digital messaging through. We think we can go international with that at relatively low cost compared to where traditionally, you would have had to have spent a lot of money. So, feeling pretty good about the ability to do that, but you're right, Ryan, it will build over time.

Ryan Sundby -- William Blair -- Analyst

Great, got it. And then the waterpark in California, I think you mentioned, had the ten largest days in history. Can you maybe talk about the flip side of that? And I think last call, you talked about the season pass in Mexico City was up almost 40%. Are you seeing a season pass benefit there for your theme park in California as well?

Marshall Barber -- Chief Financial Officer

We are. For 2017, we really -- we didn't take over the park until May, and so, a lot of the benefit that we're seeing now as we sell 2018, so yes, we've had significant pickup in theme park and waterpark in that market. And it really played out like we expected in terms of buy-in or getting a waterpark in the market, leveraging the season pass -- that is, giving additional value and charging more money for the pass.

Jim Reid-Anderson -- Chairman, President, and CEO

There's no doubt that it's reinforced -- the benefit of going one park at a time with these is that we can test to make sure that the strategy in fact works. And it does work, so we are continuing down this path, and we're looking to add other parks over the coming quarters.

Ryan Sundby -- William Blair -- Analyst

Got it. And then just one last one. Double-digit season pass growth is certainly impressive, given the challenges in the quarter. Can you just remind us how weather impacts season pass sales? Is it kind of similar to attendance, where maybe bad weather pushes off buying a season pass to the backburner? And then kind of with that, could you maybe remind us which -- I guess a cadence around season pass sales, which months are kind of most important in terms of the season pass going into the season?

Marshall Barber -- Chief Financial Officer

So, in terms of when people buy a season pass, traditionally, it's the same time -- it works the same way as one-day tickets. They buy a pass when they're coming out to visit. So, if you look at Labor Day, we did have Hurricane Harvey coming into Texas and then going up through the Northeast during Labor Day, and that invariably had some impact on the sales. We were still able to grow double digits. In terms of cadence --

Jim Reid-Anderson -- Chairman, President, and CEO

But to that point, though, Marshall, before you keep going on the other one, it is fair to say, though, right, that while we saw an unprecedented level of online sales, on days when there's bad weather, you don't get the same in park sales of the season pass that you would, right? So, there's definitely a difference in terms of whether the people are still buying at accelerated levels online, right?

Marshall Barber -- Chief Financial Officer

Right.

Jim Reid-Anderson -- Chairman, President, and CEO

That's just one little tweak on your question there.

Marshall Barber -- Chief Financial Officer

Yeah. And then in terms of cadence, the September sale is becoming more and more important. And then really, the bulk of our passes are still in the second quarter as the parks open up.

Jim Reid-Anderson -- Chairman, President, and CEO

I would also say that we have continued -- you asked about the importance of passes. And we have premium passes that continue to do very well. Most of our guests will spend the extra money to get the top pass. But we're also seeing growth in our membership passes, which we love, for many -- we've described before why this is such a good thing, because you've got this base of recurring revenue that has been growing for the last several quarters, and we anticipate will continue to grow as we go forward. So, we love our premium pass, season passes, and memberships especially.

Ryan Sundby -- William Blair -- Analyst

Got it. Thanks so much, guys.

Marshall Barber -- Chief Financial Officer

Thank you.

Operator

Your next question comes from the line of James Hardiman with Wedbush.

Jim Reid-Anderson -- Chairman, President, and CEO

James, you're back!

James Hardiman -- Wedbush -- Analyst

Hi, just -- I'm back. Just a couple of follow-ups, clarifications about some things you said. On the international front, it kind of sounds like you're moving beyond your initial partner there. And then on China, it doesn't sound like you're refuting the leak with respect to some of that news coming out. To your comment --

Jim Reid-Anderson -- Chairman, President, and CEO

Your first question didn't clarify -- you mean Vietnam?

James Hardiman -- Wedbush -- Analyst

I'm sorry, Vietnam. Yes. It seemed like you're moving past --

Jim Reid-Anderson -- Chairman, President, and CEO

On that front, we have multiple people that we're talking to right now, and it does include the existing partner. But we're looking at other parties too. And then with regard to China, we're not refuting that. But we will only announce it officially when we have a contract that we're satisfied.

James Hardiman -- Wedbush -- Analyst

Okay. And then earlier, there was a conversation about insurance proceeds. I guess two things on that. There's business interruption insurance, but does that only kick in if there's damage to the park? I mean, obviously, you had some parks that were closed in both Mexico and Texas, but it seems like you only spoke to business interruption insurance at the Mexico waterpark. And in terms of insurance proceeds, would that -- you talked about that making the Mexico waterpark essentially whole. Would that benefit EBITDA, adjusted EBITDA in future periods, or is that something that would be outside of that?

Jim Reid-Anderson -- Chairman, President, and CEO

Steve is our insurance [inaudible], and he's here, so he's gonna answer it and save my voice.

Stephen R. Purtell -- Senior Vice President, Investor Relations, and Treasurer

James, yeah. The business interruption, as you mentioned, we carry full insurance for all of our parks. And in the case of business interruption, it's tied to a lot within the park. So, when there's a loss in the general area to the roads, or because people are not visiting parks as much, then you really don't have a claim, and that part of the loss would not be recovered. But in the waterpark, on the days it's closed, we do recover our lost business.

Jim Reid-Anderson -- Chairman, President, and CEO

And I'd build on what Steve's saying with two examples, James, that can help you understand why you don't recover everything for this year. In the case of Texas, I talked about gas shortages. And it was quite remarkable to see that in certain cases, for a three-week period, people were not going out because they were worried about being able to get gas. So, there is no insurance claim on that. In the case of Mexico, people have lost their homes. Schools are shut down. Roads have big holes in them. People can't get anywhere, so they are not coming to movie theaters or parks. And so, that is something you cannot claim on, because you're open, but you've got a lower level of attendance than you would have the prior year, and you can't claim it.

But what I would tell you is that in all cases, both in the case of Texas and in the case of Mexico, we always recover from that. We already have in Texas for sure. And in the case of Mexico, we're very close to being fully recovered there in terms of the folks returning to the park. And we feel that that's gonna be behind us shortly.

James Hardiman -- Wedbush -- Analyst

Really helpful. And then I guess lastly for me, I was hoping you could comment on a couple theories that are out there in terms of what might be impacting the amusement park space. I guess first, I think we all think about the incremental events that you guys put on, particularly in the fourth quarter, as incremental to the overall business. Are you seeing any evidence that maybe as people see those as really attractive events, that they may be -- they might forego a visit during peak season? And so, net, you're still flat up, but maybe it's not as incremental as you once thought? And then I guess secondly, there have been some other consumer-focused companies pointing out some weakness in the Latin American consumer under a Trump presidency. Less so the Mexican consumers, but more so those Latin Americans within the United States. Are you seeing any evidence of that particular consumer, or any other consumer, for that matter, flowing down in terms of spending and overall demand? Thanks.

Jim Reid-Anderson -- Chairman, President, and CEO

I think with question two, James, we've not seen any slowdown in terms of spending, either in Mexico, aside from the earthquake, or in the U.S. with the Latino visitors, it has not been something that has affected us or that we've seen any evidence of. With regard to incremental events, do you want to take this, Marshall?

Marshall Barber -- Chief Financial Officer

Sure. Yeah. The reason we put in these incremental events and the reason we continue to invest is because it does sell season passes. And as you know, season passes and membership penetration is a core tenet of our growth strategy. So, as we invest in Fright Fest and as we invest in Holiday in the Park, it really creates news, much like a rollercoaster. And so, we are getting additional sales. It increases, for parks that used to be closed from October to April, we've now increased the operating calendar, so it increases our -- for memberships, it increases the return rates. And so -- and our attrition is less. So, really, I'd say these investments have paid off and continue to pay off. And --

Jim Reid-Anderson -- Chairman, President, and CEO

We've seen no notice of that. We definitely have not seen a change in visitation at all, where somehow they go away and then come back at the end of the year. They definitely come to these events, and they're coming at other times during the year. And they are much more committed to us. And our guest satisfaction scores are improving again this year, with one of the biggest increases is in value, value perception. They love the fact that they can come throughout the year, and it drives season pass sales, which is our greatest driver of growth over the last few years.

James Hardiman -- Wedbush -- Analyst

Excellent. Wonderful.

Jim Reid-Anderson -- Chairman, President, and CEO

And of course, I talked earlier about membership, and I don't want to not reinforce that. I think there's a bit of a story that's missing with regard to Six Flags that we're gonna build on over time, James, and that is the one related to recurring revenue and stability. And I think you've seen it this quarter. Look at the effect that we had and still generated really strong growth in attendance, really strong growth in revenue and in profitability. It's a record quarter for the company. And I look at that, and I say that's a stable, recurring revenue model. And as we build the membership story even further, international licensing, you're gonna see that continue to build.

James Hardiman -- Wedbush -- Analyst

Great. Thanks, guys.

Operator

Your next question comes from the line of Tim Conder with Wells Fargo Securities.

Tim Conder -- Wells Fargo Securities -- Analyst

Thank you, gentlemen.

Jim Reid-Anderson -- Chairman, President, and CEO

Hi, Tim.

Tim Conder -- Wells Fargo Securities -- Analyst

Now, as sort of a continuation of that, as it relates to -- you commented earlier that you're continuing to grow your unique visitors in, it sounds like, every bucket -- the traditional season pass, the membership, the day visitor. Can you talk about any of the churn? Are your retention rates continuing to come higher? It sounded like that may be the case, but just wanted to confirm that. And then secondly, Jim, similar to the way I asked the earlier question on the dining penetration, any color context you can give us on the membership mix or penetration relative to the overall active pass base?

Jim Reid-Anderson -- Chairman, President, and CEO

So, with retention rates, they have been very similar. We are increasing them, as we have over time. And we'll give an update perhaps at year end on full-year retention. But as you know, we have been very solid on retention. With regard to membership, I'm really happy because the percentage of the active base with regard to membership has been increasing, and that's what we've been trying to do. And they pay a higher price point for membership. And remember, that's once they've signed up and they're with us a minimum of 12 months, and then they extend automatically beyond that, hence the recurring revenue. So, that percent -- I'm not gonna give you the percentage, but I can tell you that it has been increasing, and we're looking to increase it further, and there's plenty of room for growth there, Tim.

Tim Conder -- Wells Fargo Securities -- Analyst

Back to your baseball analogy, given the World Series, the timeframe here, what inning, Jim, or would you say the mix? Are we still less than 25% there, just to use that benchmark that we referenced earlier?

Jim Reid-Anderson -- Chairman, President, and CEO

I would say -- I'd say we're in the third inning on membership.

Tim Conder -- Wells Fargo Securities -- Analyst

And sort of the broad percentage bucket, less than, greater than 25%?

Jim Reid-Anderson -- Chairman, President, and CEO

Oh my goodness, you are tough. You really are. I'm not gonna give that number. But it's not far off, your 25%.

Tim Conder -- Wells Fargo Securities -- Analyst

Great. Thank you, sir.

Jim Reid-Anderson -- Chairman, President, and CEO

Thanks very much.

Marshall Barber -- Chief Financial Officer

Thank you, Tim.

Operator

Now I'd like to turn it back over to Jim for closing remarks.

Jim Reid-Anderson -- Chairman, President, and CEO

Phyllis, thank you very much. And thank you all for joining the call today. We do hope that you can find the time to visit one of our parks soon so you can experience one of our amazing seasonal events. Fright Fest, I think you've probably gathered from my comments, is my absolute favorite time of the year. And Six Flags has brewed up the biggest and scariest Halloween event on the planet, with more ghouls, haunted mazes, and scares than ever before. I was at Great Adventure on Sunday. I just had the most fantastic experience. And if you go there, which you must do, go see the show Unleashed. It's incredible.

Now, three of our parks made the Top Ten of USA Today's Ten Best Readers Poll for best theme park Halloween event in 2017, including Magic Mountain, which finished in the top spot for the second year in a row. And their Halloween event is truly remarkable. Our feel-good Holiday in the Park event kicks off in mid-November and runs through the first week of January at 11 of our properties, including Six Flags New England for the first time ever. Set against a backdrop of millions of twinkling lights, our parks will ring in the holidays with sights and sounds of the season, along with yummy treats and all of the rides and attractions our guests love.

Understand that our team is deeply committed to our long-term strategy of building lasting memories for our guests and value for our shareholders. With our Amazon-proof business, strong recurring revenue, high margins, solid growth opportunities, and attractive growing dividends, I know of no better place to invest. Take care, everyone. Phyllis, that completes the call.

Operator

This does conclude today's conference call. You may now disconnect.

Duration: 75 minutes

Call participants:

Stephen R. Purtell -- Senior Vice President, Investor Relations, and Treasurer

Jim Reid-Anderson -- Chairman, President, and CEO

Marshall Barber -- Chief Financial Officer

Barton Crockett -- FBR Capital -- Analyst

Tim Conder -- Wells Fargo Securities -- Analyst

Tyler Batory -- Janney Capital Market -- Analyst

Steve Wieczynski -- Stifel, Nicolaus & Company -- Analyst

James Hardiman -- Wedbush -- Analyst

Ian Zaffino -- Oppenheimer -- Analyst

Michael Swartz -- SunTrust -- Analyst

Chris Verecchio -- Goldman Sachs -- Analyst

Ryan Sundby -- William Blair -- Analyst

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