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Cedar Fair LPÂ (FUN 0.60%)
Q2Â 2019 Earnings Call
Aug 7, 2019, 10:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good day and welcome to the Cedar Fair 2019 Second Quarter Conference Call.
[Operator Instructions] I would like to turn the conference over to Michael Russell, corporate director, Investor Relations. Please go ahead, sir.
Michael Russell -- Investor Relation Manager
Thank you, April. Good morning, and welcome to our second quarter earnings conference call. I'm Michael Russell, Corporate Director of Investor Relations for Cedar Fair. Earlier this morning, we issued our 2019 second quarter earnings release. A copy of that release is available on our Investor Relations website at ir.cedarfair.com, under the News tab or by contacting our Investor Relations offices at (419) 627-2233. On the call this morning are Richard Zimmerman, Cedar Fair President and CEO; and Brian Witherow, our Executive Vice President and CFO. Before we begin, I need to remind you that comments made during this call will include forward-looking statements within the meaning of the federal securities laws. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. For more detailed discussion of these risks, you can refer to filings made by the company with the SEC. In compliance with the SEC's 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 made widely and unselectively disseminated, all content of the call will be considered fully disclosed.
Now I'll turn the call over to Richard Zimmerman. Richard?
Richard A. Zimmerman -- President, Chief Executive Officer and Director
Thank you, Michael, and good morning, everyone. As we enter the final five months of the year, I'm pleased to report that results remain strong and our outlook for the full year remains positive. The strong results for the second quarter created momentum that is carried through this past Sunday, August 4, producing higher levels of attendance in net revenues when compared with the same seven-month period last year. In addition to the increased attendance levels, our results were driven by strong in-park guest spending and out-of-park revenues, which we attribute to the improvements we've made in our parks over the past several years, including immersive interactions and limited duration special events, expanded and enhanced food and beverage options and additional resort accommodations. At the same time, our park teams have done a very good job of actively managing operating cost, allowing us to drive margin expansion. Through July, we are in a much stronger position when compared to the first seven months of last year, putting us solidly on track to deliver record levels results for 2019.
As our parks were reaching full throttle operationally, the second quarter was a highly productive period for us strategically as well. So before I ask Brian to review our second quarter and year-to-date financial results in more detail, I want to recap the series of transactions we have undertaken since our last call. In late June, we completed a $500 million bond offering with proceeds being used to finance 3 strategic acquisitions. On June 28, we purchased 112 acres of land underneath California's Great America, our park in Santa Clara, California. On July 1, we completed the acquisition of 2 iconic Texas water parks from Schlitterbahn, including Schlitterbahn Waterpark and Resort, New Braunfels, and Schlitterbahn Waterpark Galveston. This transaction also gave us the right to purchase an additional property in Kansas City, Kansas, where a third Schlitterbahn Waterpark once operated. And finally, on July 3, we acquired Sawmill Creek Resort, a 236-room lakefront resort and conference center located within minutes of our flagship park, Cedar Point.
These transactions will have a lasting impact as they complement our organic growth and provide incremental revenues and free cash flow, expand the geographic and operational reach of our existing portfolio of properties, leverage the extensive industry expertise of our seasoned leadership team and continue to grow unitholder value over the long term. Regarding Schlitterbahn, we're very excited about adding these iconic Texas water parks to our portfolio. This acquisition, which felt like a perfect fit throughout the process, consistently met the criterion standard by which we evaluate the long-term potential of M&A opportunity. Specifically, the Schlitterbahn parks in New Braunfels and Galveston are well-regarded entertainment properties in their respective communities and offer a heritage rarely found in an acquisition candidate. Each park features high-quality assets operating under a highly recognized regional brand and in attractive geographic markets. In fact, Central Texas is currently one of the nation's fastest-growing economic regions where Cedar Fair had no existing operations.
We are eager to invest in these parks and resort accommodations in an effort to bring them up to their ideal operating condition, a process we expect to complete over the next two to three years at an estimated total investment of between $10 million and $15 million. While maintaining a business as usual approach for the balance of the 2019 season, our integration team is hard at work behind the scene. As the current season's calendar winds down for our Schlitterbahn parks, we will be introducing a number of strategies and initiatives aimed at activating cost and revenue synergies for many years to come, thereby producing the growth and efficiencies we expect to enjoy for the long term. In much the same way, Sawmill Creek represents an opportunity to take a unique regional asset and restore it to its original glory. The resort's hotel already books the second most room night accommodations locally for teams playing in tournament at the Cedar Point Sports Center's outdoor facility.
Year-round guest volume should grow substantially once our indoor center opens in January of next year. Moreover, a fully renovated Sawmill Creek Resort, conference center and Tom Fazio designed 18-hole golf course positioned on Lake Erie's waterfront will further strengthen Cedar Point's appeal as a unique vacation destination. Rounding out our series of acquisitions was the purchase of the 112 acres of land upon which California's Great America operates. When presented with the opportunity, we exercised our right of first refusal to purchase the land, thereby ending our lease with the City of Santa Clara. This investment represented a once-in-a-generation opportunity to purchase valuable property in the heart of Silicon Valley. In just a moment, I will conclude my prepared remarks.
But first, I'd like to turn the call over to Brian who will review our financial results in more detail. Brian?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Thanks, Richard, and good morning. Before I dive into the second quarter numbers, I want to caution you that it's always difficult to extrapolate partial season performance into full year results. As of this past Sunday, August 4, approximately 40% of our forecasted attendance, and some of our most profitable operating days are still to come. Also, as part of this year's fiscal calendar shift, our 2019 second quarter results are not directly comparable to the prior year as 64 operating days were moved from the third quarter into the second quarter when compared with the prior year respective quarters. Specifically, when comparing results, it's important to keep in mind that the 2019 second quarter ended on June 30, while the 2018 second quarter ended on June 24. Because material differences in our fiscal operating results are partly due to the additional operating days in the period, I'll also discuss operating results on a comparable operating calendar. I'll begin by briefly discussing our results for the second quarter before moving on to more current revenue and attendance trends.
As Richard mentioned at the beginning of the call and as detailed in our earnings release this morning, we delivered an outstanding quarter with meaningful increases across all key performance metrics. For the second quarter 2019, we reported net revenues of $436 million, up $56 million or 15% from $380 million a year ago, with a portion of the increase attributable to the 10% increase in operating days in the current quarter. On a comparable operating calendar basis, net revenues in the second quarter of 2019 were up $14 million or 3%, and a 4% increase in guest per capita spending, a 4% or $2 million increase in out-of-park revenues and a less than 1% decrease in total attendance. The largest increase in second quarter guest per caps was in our food and beverage category of 9% on a comparable operating calendar basis, followed by a 6% increase in spending on premium products and merchandise.
The strength in food and beverage was largely attributable to the meaningful investments we've made in expanding and enhancing the food and beverage locations and offerings at our parks, as well as the continued growth of our All-Season Dining and Beverage programs. Admissions per capita for the second quarter was up 2% on a comparable operating calendar basis, reflecting the integrity within our pricing structure and the successful efforts of our revenue and yield management initiatives. On to the cost front. Operating costs and expenses in the second quarter increased 8% or $21 million to $277 million, which was generally in line with our expectations and largely due to the effect of the fiscal calendar year shift. On a comparable operating calendar basis, operating costs and expenses in the period were up 3% or only $8 million. The 3% increase in cost was attributable to higher labor cost in the quarter due to wage rate increases as well as the need for incremental labor in operating supplies related to our new immersive events. Meanwhile, adjusted EBITDA, which we believe is a meaningful measure of park-level operating results, increased $36 million to $163 million for the second quarter of 2019 from $127 million a year ago.
On a comparable operating calendar basis, adjusted EBITDA for the period was up $7 million or 5%, and adjusted EBITDA margin improved by 50 basis points to 37.4%. The margin expansion and the increase in adjusted EBITDA were primarily attributable to the strong in-park per capita spending generated by our parks in the second quarter. Turning our attention to results for the first seven months of the year. The positive revenue and attendance trends have continued through July. Since our July 4th mid-season update, same-park attendance was up 7% or more than 330,000 visits. Over that same 4-week period, same-park revenues were up 8% or more than $20 million. Based on preliminary results through this past Sunday, August 4, year-to-date net revenues on a same-park basis totaled $850 million, up $31 million or 4% from the comparable seven-month period last year. Also on a same-park basis, attendance was up 1% or 213,000 visits, in-park guest per capita spending was up 3% and out-of-park revenues were up 4% or $4 million from the comparable seven-month period in 2018.
The growth in same-park attendance through the first seven months of the year is very encouraging, particularly given the slow start to the season. We continue to see great demand from the season pass channel, which is trending in line with prior year in terms of mix of total attendance. And today, we've also seen solid growth in the number of unique visitors. Including results from the 2 Schlitterbahn water parks we acquired on July 1, combined net revenues through August 4 totaled approximately $877 million, up 7%. Over this period, combined attendance totaled 16.5 million visits, up 4%; in-park guest per capita spending was $48.59, up 3%; and out-of-park revenues totaled $104 million, up 7%. Looking at long-lead indicators for a moment. Our advanced purchase commitments, including season pass sales, group event bookings, hotel reservations and the sale of all-season products such as All-Season Dining and All-Season Beverage are collectively up when compared with the same period last year. This positive momentum is reflected in our deferred revenues, which were up more than $15 million or more than 15% at the end of July when compared with the same period last year. Now let me shift focus to the balance sheets and free cash flow items.
At the end of the second quarter, our balance sheet remains healthy and in strong condition with $325 million of cash on hand and approximately $2.2 billion of debt, the majority of which is fixed through long-term notes or interest rate swaps. Of our debt outstanding, we have no significant maturities before 2024, with our nearest term maturity being our revolver in April of 2022. At the end of the second quarter, our total leverage ratio stood at 4.4x debt to adjusted EBITDA. And based on our current outlook, we anticipate our total leverage ratio will be in the same relative range at the end of the year. While we were comfortable levering up in the near term to complete the strategic acquisitions of the Schlitterbahn properties, the land in Santa Clara and the Sawmill Creek Resort, our priority is to reduce leverage back down inside 4x as quickly as possible. Regarding cash payments for interest and taxes for the full year, we expect to pay approximately $98 million in cash interest cost and $45 million in cash taxes. As I hope you can tell, we're very pleased with our operating results for the first seven months of the year, and we remain confident in our long-term strategy. We'll continue to take advantage of market conditions to maintain a strong balance sheet, while at the same time having a flexibility to invest in future strategic growth opportunities.
With that, I'd like to turn the call back over to Richard.
Richard A. Zimmerman -- President, Chief Executive Officer and Director
Thank you, Brian. As my opening remarks suggested, this year's first half was a very busy and productive period strategically for Cedar Fair. It's exciting when our team can share news of transactions that constitute new milestones in our company's history, and it's especially rewarding when we're confident those strategic actions present attractive opportunities to drive incremental long-term growth and profitability for our unitholders. As we take advantage of marketplace opportunities, it is imperative to maintain our nonstop focus on enhancing the strength and resiliency of our core operations. Doing so means continually improving all aspects of our business, none more important than offering unique immersive entertainment options our guests enjoy and will return to experience multiple times throughout each season.
With that objective in mind, our team built a long-range plan that included broadening the guest experience as a major strategic focus. Here are a couple of examples of how that strategy has already begun to take shape. When the gates opened this year for Cedar Point's 149th season, guests packed our new exhibit and staging areas for a chance to experience Monster Jam Thunder Alley. Through our partnership with Feld Entertainment, guests by the tens of thousands strolled through Thunder Alley's interactive display areas on their way to climb aboard authentic monster truck favorites, Grave Digger and Megalodon. Once safely strapped in, riders experienced an unforgettable thrill ride through a custom-designed action-packed obstacle course. While guests inside the park were drawn to the attraction by the Monster Trucks Wars, our marketing team was busy rolling out targeted advertising and social media campaign, urging unique visitors and park veterans alike to take advantage of this limited time immersive entertainment experience.
After earning excellent Net Promoter Scores at Cedar Point, the 6-week attraction rolled onto Kings Dominion for the summer and will wrap things up later this fall at Dorney Park. Grand Carnivale is another new immersive activity that has dazzled guests this year. First, the Kings Island and Kings Dominion, and then Worlds of Fun in Dorney Park. The pageantry surrounding the spectacle of color parades and street parties has energized crowds with Mardi Gras inspired floats, electrifying music, professional street performances and unique food offerings. Towards evening, the festivities rollout on our midways is a joyous internationally themed celebration offering something for everyone and creating larger-than-life memories for our guests. While Monster Jam and Grand Carnivale are great examples of how we're executing on our strategy to broaden the guest experience, we're also making great progress with our other major growth strategies within our long-range plan. For instance, we're market testing -- market testing of our season pass loyalty program is going well at 4 parks with the portfoliowide rollout of the program still planned for the 2020 season.
Our pursuit of adjacent development near our parks is also in full swing with our newly constructed SpringHill Suites Hotel scheduled to open near Carowinds in the next few months. I'm also pleased to report our plans to build a Hyatt-branded hotel near Canada's Wonderland, recently cleared a difficult design challenge with groundbreaking now within reach. And set to open in January 2020 near Cedar Point is our indoor sports center, which will create increased demand for hotel rooms at our Cedar Point resort property, including the newly acquired Sawmill Creek Resort. And finally, our targeted marketing initiative focused on improving penetration rates within underserved markets and sales channels kicked off early this year with an updated market sizing study across all of our parks. Our teams are working through analyzing the information obtained from that study and I anticipate that this initiative will meaningfully ramp up once we finalize that analysis and begin to build our marketing plans for the 2020 season. Before we take your questions, let me address guidance.
We will not be announcing updated guidance today nor at our Analyst Day event this week. Let me explain the reasoning behind our decision. Stepping back for a moment, we entered 2019 with renewed momentum, having finished 2018 with a very strong fourth quarter, resulting in a record year for both revenues and attendance. We achieved those new highs after experiencing a difficult and uncertain first seven months of the year. Our year-end rebound reinforced our confidence in the business model, and we followed that up with the company's best season ever in advance sales of season passes and all-season products. With that strong momentum, we set new long-term guidance with an adjusted EBITDA target of $575 million by 2023. That was less than six months ago. Now fast forward to today. While market concerns around an economic slowdown persist, we remain very pleased with how our business has performed to date and believe the company is in a strong position to achieve record results on a same-park basis.
As I mentioned a few minutes ago, we're also very excited about the additions of the 2 Schlitterbahn parks in Texas. We believe these properties will be meaningfully accretive to adjusted EBITDA in 2021 and beyond once post-acquisition synergies are realized and our planned capital investments over the next two to three years have a chance to positively affect the guest experience and drive growth. Having closed on our recent acquisitions less than 6 weeks ago and also watching the current macroeconomic environment closely, we're not yet ready to update our long-term guidance. However, we'll be in a better position to do so later this year or when we announce our 2019 full year results. As we work through the task of integrating our newly acquired properties as efficiently and seamlessly as possible, our priority is reducing our debt to adjusted EBITDA leverage ratio to inside 4x as quickly as possible. We're also committed to ensuring confidence in the sustainability of our distribution and our planning to moderate growth in the distribution in the near term.
This is a direct result of prioritizing deleveraging as we absorb the recent acquisition and believing that at the current yield, the market is discounting the quality of the distribution. As we have previously stated, we do not anticipate making a final decision on our 2020 distribution rate until after our important fall season is complete and our Board has better visibility on our 2019 full year results. From a capital allocation perspective, we're committed to reassessing the appropriate level of marketable and infrastructure capital necessary to produce the attendance and revenue growth we're targeting. Our team is currently evaluating the required level of capital investment in the core going forward. As evidenced by the level of capital we've invested in our property over the past several years, our parks have gone through major expansions and transformation, and I want to make sure that we extract full value from these investments. This critical review of capital expenditure combined with our move toward more capex slide initiatives such as events and experiential attraction should provide meaningful capital investment efficiencies going forward.
In turn, this will provide us with increased flexibility with respect to use of free cash flow and allow us to achieve our objectives around reducing leverage and ensuring confidence in the distribution. Before we wrap, I want to reiterate how pleased I am with the strength and resiliency our company has demonstrated over the past year. This resiliency of our business model has proven itself during challenging economic cycle such as 2009 as well as during challenging weather year such as last year. Coming out of 2018, I'm very proud of what our team has accomplished so far this year. Guest response has been extremely positive for our new rides and attraction, including the new coasters at Canada's Wonderland and Carowinds, and the new immersive attractions such as Grand Carnivale, Monster Jam and Forbidden Frontier.
In-park spending and out-of-park revenues are also on the rise, and our season passholder base is at a record level and continues to grow. Fundamentals such as these give us confidence that our strategies are working and that the financial health of our consumer remains solid. We remain dedicated to our mission to make people happy and look forward to ensuring that they have that opportunity through our busiest days ahead. During the fourth quarter, Halloween Weekend's produced some of our biggest days, and 7 of our parks will be open this year for wintertime festivity, including a first-time WinterFest at Canada's Wonderland. Everything is in place for a strong finish this year, and we look forward to keeping you apprised of our progress.
April, that concludes our remarks, and we're ready to answer questions.
Questions and Answers:
Operator
[Operator Instructions] And we'll take our first question from Brett Andress with KeyBanc Capital Markets. Please go ahead.
Brett Andress -- KeyBanc -- Analyst
Hey good morning Brett. MARTIN Brett. So really good strength that you guys are seeing or saw in July. I think bucking some of the trends that some of your other peers were seeing. But can you may be give us some more detail on what parks or regions drove that? It seems like July acceleration. Or was it more broad-based strength across the broader portfolio?
Richard A. Zimmerman -- President, Chief Executive Officer and Director
You know, Brett, one of the things that we saw last year as we went through the first difficult seven months is that the impact was widespread. I will tell you what we've seen this year is equally the rebound is very broad-based. So not only in good weather days, but as we go week through week, we've seen strength across all regions of our parks, not just in California, but on the East Coast as well. So it was very broad-based.
Brett Andress -- KeyBanc -- Analyst
And just to make sure, Brian, I'm thinking about the third quarter right. I'm assuming we just take the 64-day shift out, but can you remind us of any other things to consider as we kind of model 3Q and 4Q, again?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Yes, Brett. For the most part, I would say that's correct. Right now, we're forecasting roughly 60 less operating days in Q3, so essentially your analysis is pretty spot on. As we look over the balance of the year, Richard mentioned an additional WinterFest this year at Canada's Wonderland. Those have traditionally offered up an incremental 20 to 25 operating days. When we sort through everything by the end of the year, all the various changes in the calendar, operating seasons throughout the year and across the system, we'll end this year probably with something around 10 to 15 extra operating days net by the end of the year.
Brett Andress -- KeyBanc -- Analyst
Got it. And one last one, and may be I'm front-running something you're going to talk about on Friday. But if you think about improving the capital efficiency, are there any updated capital spend targets? Whether it's on a dollar or percent of sales basis? And then I guess, also, what time frame are you expecting to hit those targets?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Brett, as we've stated on previous calls, the planned investments within the core properties in terms of infrastructure and marketable new attractions for 2019 was roughly $140 million with an additional $30 million to $40 million this year related to the business development projects that Richard alluded to; Charlotte Hotel, indoor sports complex in Sandusky as well as some additional employee housing facilities at several parks that we're in the process of contesting. As we look forward to activating those efficiencies, the 2020 plan is fairly baked. So I would say, looking at it in a comparable way to '19, although we haven't given a specific number yet for 2020, I think that's the range that I contend. The real ability to impact those efficiencies begins in 2021, just based on the lead times around most of the big projects.
Brett Andress -- KeyBanc -- Analyst
Understood. Thank you thanks Fred.
Operator
We'll take our next question from James Hardiman with Wedbush Securities. Please go ahead.
James Hardiman -- Wedbush Securities -- Analyst
Good morning. Thanks for taking my call. Obviously, no matter how we cut this, the last month plus has been really nice for you guys. But maybe just some quick math, Brian. I know you don't love when I ask you to do the math, but I guess so about a 6% increase in revenues and maybe 2% increase in attendance over the last 4 weeks since your post July 4 release. I guess, a, is that math right? And b, is that math comparable just given all the moving parts?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Yes, James. Good morning. As it relates to -- as you said, the last -- since about the middle of June, the trend -- the macro trends definitely shifted in our favor and the attendance trends have followed. Over the last 4 weeks, so basically looking since our July 4 mid-season update, which I think actually took us through the Sunday, July 7. So if we look at July 8, basically through this past Sunday, August 4, attendance up about 7% or north of 330,000 visits and revenues up in the north of $20 million range or 8%.
James Hardiman -- Wedbush Securities -- Analyst
Okay. So I'm glad you asked me to do the math because, obviously, mine was a little bit light there. Okay. That is really encouraging. And then, I found the commentary around margins to be really helpful. Obviously, margins are way up year-to-date, but there is some calender effect there. I think you said 50 basis points of expansion on a comparable basis in the second quarter. I guess, do you have a comparable number for the year-to-date period? And then how should we think about the third quarter? I'm assuming given the negative calendar, should we assume that there's some deleverage and that margins will contract in the third quarter?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Yes, James, again. Good question. In terms of margins, that is, you heard us talk about in the past, key metric for us that we continue to focus on, but not necessarily the almighty last decision. Otherwise, we probably wouldn't be doing some of the incremental events that, as we said in our prepared remarks, are a little bit more OpEx heavy, a little bit more labor heavy than some other things that we've done. So the 50 bps increased in the quarter was on a comparable basis, as comparable as any two years can be. I mean, the macro factors of weather reports and things like that always playing a role. Again, as we talked about in the past, margin is in large part often driven, when we talk about it, on an average process system by the performance of the individual parks within the system. And so when we see our largest parks, 3 of which are concentrated here in the Great Lakes region between Cedar Point, Kings Island and Canada's Wonderland, doing well, that helps out a lot. And so the 50 basis points, as I said, up on a comparable basis. As we go forward, we talked about last year, right, results from August 1 on, the comparisons get a little bit more challenging, and so that will make some of the margin upside be a little bit more challenging. Doesn't mean that it can't be beat again, the mix of performance by parks will play into that. But there's no doubt that the margin lift at -- for the quarter was helped dramatically by the strong performance over the last part of June at those big parks.
James Hardiman -- Wedbush Securities -- Analyst
But just to clarify. Once we do our, sort of, top line adjustment toward the calendar in the third quarter, I'm assuming we should somehow figure out how to also adjust the leverage fees, right? In other words, that margins, as a result of the changing calendar, will also be under some pressure?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Yes. We're looking at things on a -- more on a fiscal comparative like what you'll see in the second queue and then try and script that out of Q3. That's exactly how you look at it. What we would intend to do is, when we get to third quarter results, much like we just didn't give any results updated through the end of July is provide results through -- on more of a comparable basis to try and normalize for those calendar -- those fiscal calendar shifts, but the way you're describing it is a fair approach.
James Hardiman -- Wedbush Securities -- Analyst
Okay. Great. And then just last quick question for me. We've seen really good per cap, I think, across the industry. Attendance has been, I think, more mixed. Is there something from a macro perspective that you think is driving that dynamic?
Richard A. Zimmerman -- President, Chief Executive Officer and Director
James, this is Richard. We look at the financial health of the consumer. We think it is -- that the consumer is feeling good. They're looking for places to come where they can spend time with family and friends. And we've seen -- as we've always said, and you've heard me say this before, with good weather, more people are coming, they're staying longer and they're spending more. So I think as we continue to do more research and focus on what the consumers are looking for, we can continue to program the things that really they're looking for. And one of the things that comes through, and Brian called it out in his remarks, food and beverage up 9%. Food and beverage and the quality and the ability to serve food and beverage in an immersive environment. We've made significant investments in our facilities. We've programmed and put in executive chefs and culinary talent at all of our parks. As we've continued to do that over the last few years, we're really now reaping the benefit of this whole new approach to something that the consumers tell us is critically important in their experience, but also critically important to their decision of whether or not to visit. So we think the food and beverage quality, the ability to do more transactions per hour, all those things fold into a really important piece of the in-park per capita spending.
James Hardiman -- Wedbush Securities -- Analyst
Great work guys. And good luck the rest of the way.
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Thanks James.
Operator
We'll take our next question from Tim Conder with Wells Fargo. Please go ahead.
Tim Conder -- Wells Fargo -- Analyst
Thank you gentlemen -- Brian, if you could, the question related to the advanced purchase commitments and deferred. Your answer -- I'm sorry, in your commentary there, is that ex-Schlitterbahn and Sawmill Creek?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
In terms of the advanced purchase commitments through the end of July, yes. The Sawmill really north sort of bound -- Schlitterbahn really moving that materially, up $15 million -- north of $15 million in cash and up north of 15%, is really an apples-to-apples comparison.
Tim Conder -- Wells Fargo -- Analyst
Okay. Great, great. And then in response to how things have gone in the last month here, again, just to make sure that's on a comparable basis, ex-acquisition in the last 4 weeks, the attendance jump and -- of 330,000 and so forth. Are you including Schlitterbahn in that also?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
They are in those numbers pushing those up a bit.
Tim Conder -- Wells Fargo -- Analyst
Okay. And I guess then that any color you can give us on Schlitterbahn? What you expect the contribution here in 2019 to be? Part of the seasons, off-season? But just any color you can give us as far as may be revenue or attendance or adjusted EBITDA related to Schlitterbahn to kind of help in the modeling?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Well, we're still watching how that develops. I'll say, as Richard said in the prepared remarks, we're pleased with the initial results we're seeing out of them over the first several weeks since the acquisition closed on July 1. So as we said at the time of the announcement, the Schlitterbahn properties did between $65 million to $70 million in revenue; little north of 1 million, almost 1.2 million in total attendance. We acquired them on July 1, so we've got on for 2 of the key months, about half of the year. So I don't think you'll be too far off if you think of things in terms of maybe a little bit better than half of those numbers just based on the fact that we have -- they'll be under our ownership for the 2 big summer months of July and August.
Tim Conder -- Wells Fargo -- Analyst
Okay. Okay. And then gentlemen, whether here on the call or the next couple of days here, can you talk about organic margins? And again, the 50 basis points is a nice down here, the incremental margins, but can you talk about how the progress or your plans for that and enhance that on a go-forward basis here? And any goals for this year or next year from that perspective? Is that, as you've alluded to earlier, that feeds into the deleveraging side of the focus also?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Yes, it does, Tim. I think, as I said earlier, a bit of that answer lies a little -- somewhat in the performance of the individual properties. We often find ourselves talking about things in sort of a monolith on these calls. But clearly, our discussions inside the walls here, when reviewing the performance, is much more at park level. There is no doubt that over the last couple of years, in addition to the pressure that we've seen on attendance because of macro factors like the weather, particularly in the first seven months of '18, put pressure on margins. As you know, the volume -- falloff in volume or shortfalls in volume definitely have a meaningful impact on margin, but certainly has the first couple of years of the investments we've made in the more experiential attraction. Adding WinterFest and Grand Carnivale and things of that nature put pressure on our operating margins, but we believe benefit us long-term significantly.
I think you're already -- we're already seeing that play out in the strength we're seeing in advanced purchase commitments, particularly in the season pass sales. I will say one of the things we've been most pleased with here in 2019 and we hadn't commented on it directly, but I'll say now is that the sale of season passes, while it typically wanes by about the end of June, we've continued to see strong demand even through the month of July for season pass sales for the '19 season because there is so much still to do at the parks in the fall and winter. And so those advanced, while little bit margin heavy early on, are going to benefit us significantly going forward. With that in mind, it is fair and we've seen it with events like Haunt and WinterFest that when you get into year two or three, those margins begin to improve because a lot of the ramp-up costs are now behind you and a lot of those start-up costs don't persist.
And so I think we'll start seeing a lot of benefits paying off relative to some of the pain that we've taken in '17 and '18. But ultimately, margin is no doubt driven by the performance of the individual parks and the big parks performing well goes a long way.
Tim Conder -- Wells Fargo -- Analyst
Okay. Thanks for the color gentlemen.
Operator
[Operator Instructions] We'll move on to our next question from Michael Swartz with SunTrust. Please go ahead.
Michael Swartz -- SunTrust -- Analyst
Hey good morning guys. Just maybe a little more expansion on Schlitterbahn. I think you gave some good color on how much that adds on an annualized basis. But maybe just in terms of the synergies, maybe talk about some of the things from a very high level, what you're doing there to kind of integrate that in the broader Cedar Fair portfolio? And then as it relates to those parks, from an attendance mix standpoint, how much of their attendance is on pass -- season pass? And how much of the visitation is more of a local guest versus a domestic traveling guest?
Richard A. Zimmerman -- President, Chief Executive Officer and Director
Good morning, Michael. It's Richard. I'll take the second part first, and then I'll let Brian talk about the synergies. When I looked at Schlitterbahn and got closer to it, I got more excited the closer we got to it. Cedar Fair is a house of brands and these brands are really well established. The Schlitterbahn brand is so iconic in Texas. We keep using that word, it's what it is. Maybe, I tell you, it's probably the park that we've looked at, that we didn't own, that most reminds me of Knott's, and the heritage we have out of Knott's Berry Farm. So when we look at that, and this sort of gets to your question, it penetrates throughout that whole Central Texas region really, really well. So -- and it does -- it has got a nice profile within the market. But also when we looked at it, and this gets to your synergy question, they were probably where we were in terms of evolution season pass program probably a decade or so ago.
We haven't had the -- and they haven't had the opportunity to roll out installment payments which, you know, has been a big driver behind our season pass program. So we got an ability to go in there, polish up a really strong brand, bring in our capabilities and competencies, particularly those we built over the last several years; our robust CRM platform, our e-commerce capability, our revenue management capability. Now, as Brian will tell you, when you put some systems in to get those things going and that's part of our plan, but we think there is meaningful and significant upside in the performance of these parks, both on the revenue side and then on the cost side. So with that, let me hand it over to Brian.
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Yes. Michael, as relates to the synergies, dovetailing off of Richards comments. The revenue synergies, because of that -- the time it's going to take to fully integrate the platforms and the systems, I think the revenue synergies build a little bit slower than the cost synergies, but it would be our intention to have those parks fully integrated onto our systems and platforms by the 2021 season. We will take the next 12 to 18 months to accomplish that. And that's when -- in the interim, I think we'll start minding some synergies on the revenue side. It just will take us a little bit longer to build up. The cost synergies that are really available are the ones that you'd typically think about and are a little bit more easily realized.
The ability to tuck them up underneath some of the corporate overhead functions that already exist here at Cedar Fair that wouldn't necessarily need to be duplicated down there. And so we should be able to mind most of those synergies by 2020. And so it's going to take a couple of years to fully realize the revenue synergies, but we're really excited, as we said in our prepared remarks, about where the opportunity goes. I think we've talked about publicly that there's 3 to 4, we believe there are several hundred, maybe 300 to 500, basis room in terms of margin expansion from where they've traditionally been. But we need to get in there and do some work in order to capture that upside.
Michael Swartz -- SunTrust -- Analyst
Okay. That's fantastic color. And then Brian, just quick follow-up. I think you said -- you gave some numbers for cash tax and cash interest expense this year. What do you see as far as annualized, I think that those are partial years with some of the new debt? And I don't really know the tax structure of some of the acquisitions.
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Yes. You should see the cash taxes. We've said publicly before that we think those are probably in that $45 million to $55 million range for the next several years, a little bit dependent on how the business grows and then where's the growth in the business, the C Corp-related properties versus the partnership properties. Interest cost -- cash payments on interest, I would imagine will be a little bit closer to that $100 million, $105 million range, at least for the next couple of years.
Michael Swartz -- SunTrust -- Analyst
Okay great to see you guys tomorrow.
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Thanks Michael.
Operator
We'll move on to our next question from Steven Wieczynski with Stifel. Please go ahead
Steven Wieczynski -- Stifel -- Analyst
Hey guys good morning. I might be thinking about just a little bit too much, but -- and it's probably a different type of customer, but when you look at Knott's Berry Farm, and I think you guys are, I don't, 10 miles away from Disneyland, have you seen any pressure on you guys there as Star Wars has been rolled out?
Richard A. Zimmerman -- President, Chief Executive Officer and Director
Steve, Knott's Berry Farm sits 5 miles away from Disneyland. And as we said earlier in the year, and I can reiterate now, through the first seven months, Knott's is off to its best start ever in spite of what was a really choppy January and February because of little bit of weather, but Knott's is performing extremely well. So best start ever.
Steven Wieczynski -- Stifel -- Analyst
Okay. Good to hear. And then second question would just be around your -- the indoor sports complex. And may be give us some kind of update in terms of how that's booking out so far?
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Yes. Steve, it's Brian. In terms of the indoor -- first let me say, we're extremely pleased with the booking trends on the outdoor. As we've said, this is year three and they've been pacing up each year over these first three years. And as we said, at the tail end of last year, we already sort of passed that year four, year five milestone in terms of the original pro forma in only the second year. The first big sets of tournaments starts in mid-January. The facility will have a soft opening late this year or early next year, and then the first big tournaments start in mid-January. We're pleased with the early bookings. Again, the indoor is going to be focused on AAU Basketball, JO Volleyball. And we're excited about what that offers and are seeing good early season trends on the booking curve there, but try not to get too excited because we haven't even opened the front doors yet.
Steven Wieczynski -- Stifel -- Analyst
Okay. Thanks guys appreciate it.
Operator
It appears there are no further questions at this time. Mr. Zimmerman, I'd like to turn the conference back to you for any additional or closing remarks.
Richard A. Zimmerman -- President, Chief Executive Officer and Director
Thank you, April. And thank you for your interest and ongoing support at Cedar Fair. I know many of you've had an opportunity to visit a Cedar Fair park. But those of you who haven't, I encourage you to take the time to visit us and experience what differentiates a Cedar Fair park from the pack. Michael?
Michael Russell -- Investor Relation Manager
Thanks, Richard. We look forward to speaking with many of you over the next few days at our Analyst Day event being held at our flagship park at Cedar Point. With that, April, that concludes our call. Thank you.
Operator
[Operator Closing Remarks]
Duration: 49 minutes
Call participants:
Michael Russell -- Investor Relation Manager
Richard A. Zimmerman -- President, Chief Executive Officer and Director
Brian C. Witherow -- Executive Vice President and Chief Financial Officer
Brett Andress -- KeyBanc -- Analyst
James Hardiman -- Wedbush Securities -- Analyst
Tim Conder -- Wells Fargo -- Analyst
Michael Swartz -- SunTrust -- Analyst
Steven Wieczynski -- Stifel -- Analyst
