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Good morning, my name is Kathy, and I will be your conference operator today. At this time, I'd like to welcome everyone to this year's Fair Entertainment Company 2020 third quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. Michael Russell, you may begin your conference.

Thank you, Kathy, and good morning. My name is Michael Russell, Corporate Director of Investor Relations for Cedar Fair. Welcome to our 2021 Third Quarter Earnings Conference Call. Earlier this morning, we distributed via wire service our earnings press release, a copy of which is available under the News tab of our investors' website at ir.cedarfair.com. On the call with me this morning are Richard Zimmerman, Cedar Fair's 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 from those described in such statements. For a more detailed discussion of these risks, you may refer to the company's filings 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 widely and unselectively disseminated, all content on this call will be considered fully disclosed. With that, I would like to introduce our CEO, Richard Zimmerman. Richard?

Thank you, Michael, and good morning, everyone. We appreciate all of you being with us today. Today's opening remarks will focus in three primary areas. First, a review of the third quarter results of our parks and resort properties, as well as more recent performance trends during the month of October. Second, an overview of how we successfully manage structural shifts in the labor market this season and how we plan to address this challenge in 2022. Finally, we will highlight how the organizational changes we have made and the strategic initiatives we've implemented enabled us to offset many of the effects of the pandemic, positioning Cedar Fair for continued growth, success, and value creation. Let me start by saying I am extremely pleased with our company's results since the reopening of our properties in May, and particularly over the last four months, which represents the most important stretch of the season for us. This outstanding performance would not have been possible without the unwavering determination of our leadership team, whom I believe is the strongest, most experienced, and uniquely talented collection of professionals in our industry. Of course, they are supported by the talented and committed teams operating our parks across North America. Collectively, we have demonstrated time and time again how to produce the best possible outcomes in highly challenging environments while also pushing the boundaries of success when momentum is on our side. Every day, the associates of Cedar Fair delight our guests with immersive family experiences, which is an essential element of our differentiated business model. The strong attendance and guest spending trends we reported through Labor Day weekend continued through last Sunday, tapping off in October, in which our parks entertained 3.2 million guests and generated record revenues of $219 million. Our outstanding performance was a result of providing our guests with exceptional experiences. First, we reported record third quarter revenues, which we achieved despite 47 fewer operating days compared with the third quarter of 2019, as well as continued capacity restrictions of several parts and a group sales channel that has yet to fully recover. Second, we set a new high for in-part per capita spending. Credit goes to our business intelligence group for its savvy use of analytics and dynamic pricing strategies to optimize pricing both at the gate and inside the parks as demand remains strong. At the same time, our commitment to elevating the quality of our offerings, particularly within food and beverage, has resonated well with our guests. Our team's relentless focus on enhancing the guest experience and the related investments have served as catalysts for strong growth in per capita spending across all revenue channels. Third, our out-of-park revenue channels continue to perform very well. They exceeded 2019 third quarter out-of-park revenues by 9%, despite fewer operating days and two of our signature resort properties at Cedar Point, Castaway Bay and Sawmill Creek, remaining closed all year for renovations. For our open resort properties, daily room rates were up an average of 6% across the system, with certain locations up as much as 25%. We are very encouraged by the strong rebound in demand for our resort properties, which remain a significant area of growth and a true differentiator for Cedar Fair within the industry. And finally, as I previously mentioned, the impressive and growing demand for our Halloween events produced a record October again this year, with net revenues for the five-week period ended Sunday, October 31st, up more than 40% from the comparable period in 2019. I also want to highlight the significant contribution of our advanced purchase programs to our rapid recovery and our consistent strength in attendance. Proceeds from season pass sales produce a reliable recurring revenue stream year after year, that underscores our confidence that our business model is a consistent generator of strong, resilient free cash flow. Season pass sales also prospectively inform our fiscal planning process and capital allocation strategy. The ongoing success we have captured from the growth of our annual season pass campaigns has served as a primary driver behind our strong top line results this year, as it has for many seasons. Since 2022 season passes and related all season products went on sale in early August, sales have outpaced the record sales volume during the comparable period in the fall of 2019, with the average season pass price trending up 5% year to date. Through the end of October this year, sales of 2022 season passes have topped more than 1 million units for only the second time ever. with all season product sales up in all categories. Historically, the momentum of early season pass sales has served as a very reliable leading indicator for next year's demand, which bodes very well for 2022. We believe the early and growing sales of our season passes and related programs validates our strategies and confirms the value guests place on our unique style of family entertainment. The desire to have fun next summer is widely held. We are uniquely able to monetize that, and we follow through by delivering amazing experiences that create value for both our guests and our unit holders. Based on these strong results, positive momentum, and a bright outlook going forward, we are well positioned to pay down debt in the very near term and resume our quarterly cash distributions longer term. Before I turn the call over to Brian to discuss our financial results in more detail, I'd like to shift gears for a moment to focus on the labor market and how it has changed since the pandemic began. Broadly speaking, business closures, lost jobs, and extended furloughs during a period of enhanced unemployment benefits gave workers an opportunity to reassess their employment options, many delaying their return or leaving the workforce altogether. In such a tight labor market, and with the J-1 visa program remaining in a state of flux, our ability to quickly attract and retain the thousands of associates we needed to open our parks for the 2021 season became our highest priority, resulting in our decision to move quickly and aggressively on wage rates. While a difficult decision to make at the time, as we noted in our last earnings call, These adjustments were critical to ensuring our parks were adequately staffed and able to deliver the high quality experience guests have come to expect at a Cedar Fair park. In response to the labor pressures, we raised hourly rates to market leading levels and included various bonuses to attract and retain associates. The combination of these efforts pushed hourly pay rates as high as $20 in some markets while the other parks used top wages to secure hard-to-fill positions such as security and culinary staff. While these new rates have pushed labor costs higher, I couldn't be prouder of the team's foresight and conviction as this decisive action was a significant contributing factor to the record per capita guest spending levels our parks were able to achieve this year. On the labor front, our attention now turns towards the 2022 season and ensuring we are doing everything we can to alleviate incremental labor cost pressures. This includes a more aggressive and proactive recruiting process and adjusting our pay rate model to provide more flexibility. We are building a labor model that allows us to adequately staff our parks to deliver a high-quality guest experience and continue to drive growth in guest spending levels, but at the same time, allow us to flex rates to match the supply of labor in the markets. The anticipated return of the J-1 visa program, combined with additional operating efficiencies identified by our new workforce management and business intelligence systems, should help alleviate some of the labor rate pressures. Brian will provide more detail on this shortly. I'll finish my opening remarks with these observations. We have historically had success adjusting to labor cost increases during periods of wage rate inflation and are confident that this will continue, particularly as consumer spending remains strong and attendance returns to pre-pandemic levels. I also believe in our team's ability to successfully manage the business through future periods of unanticipated change, an invaluable characteristic they applied brilliantly through the depths of the pandemic this year. As we displayed this season, We remain steadfast in our commitment to delivering the highest quality entertainment experiences. In fact, according to our most recent consumer research, most of our parks earn their highest guest satisfaction scores ever for both our daytime Halloween and nighttime haunt events. I want to acknowledge and congratulate our park teams for a job exceptionally well done. And with that, I will turn the call over to Brian for a review of our financial results. Brian?

Thanks Richard and good morning to everyone.

I'll begin by providing more detail behind our results for the third quarter before moving on to an update of our October performance trends. But first, I need to remind you that the pandemic had a material impact on park operations in both 2020 and 2021. Because we suspended park operations in mid-March last year and still had limited operations during the third quarter of 2020, results for the third quarter of the last two years are not directly comparable. For those reasons, I will provide more relevant comparisons to the third quarter of 2019. In 2021, operating days in the third quarter totaled 988 compared to 1,035 total operating days in the third quarter of 2019. As reported in our earnings release this morning, net revenues for the third quarter totaled a record $753 million, up 5% or $39 million compared to the third quarter of 2019. The increase in net revenues was the direct result of a 29% increase in in-park per capita spending and a 9% increase in out-of-park revenues during the period. Partially offsetting these gains was an 18% or 2 million visit decline in third quarter attendance compared to 2019, reflecting 47 fewer operating days in the period, the anticipated loss of pre-book group sales, and the impact of capacity limitations at certain parks, including one of our largest parks, Canada's Wonderland. For the quarter, attendance totaled 10.8 million guests, or approximately 82% of 2019 levels. driven by strength in both the general admissions and season pass attendance channels. Meanwhile, in-park per capita spending in the quarter totaled a record $64.26, which represented a $14.32 increase over the comparable 2019 spending levels, the result of improved guest spending across all revenue categories. Guest spending on food and beverage, merchandise, games, and extra charge attractions was up 37% on a combined basis in the quarter over comparable 2019 levels. As Richard noted, in addition to greater consumer demand, the revenue lift we are seeing from our guests' desire and willingness to spend more each visit is in large part the result of the commitment we've made over the past several years to improve the overall quality of our revenue centers and the products we offer. The investments we've made to add new facilities or remodel existing ones, particularly within the food and beverage area, are resulting in improved efficiencies and higher retail sales, while also meaningfully improving the overall guest experience. The improved per caps also reflect a combination of strategic price increases and higher transaction counts per attendee. Since reopening, we've increased prices and reduced discounts on tickets at all our parks. In addition, we continue to dynamically price into demand for single-day tickets and minimize our reliance on promotions to drive volume. For the quarter, the average admissions per cap on paid tickets was up 24% or $8.86 over comparable 2019 levels. Finally, out-of-park revenues for the quarter totaled $83 million, with the $7 million increase over 2019 levels being driven by higher online transaction fee revenue, as well as meaningful increases in average daily room rates at our resort properties, which helped offset the lost revenues at Sawmill Creek and Castaway Bay, the two resorts that have remained closed this year for renovations. On the cost side, operating costs and expenses in the quarter totaled $424 million, compared with $369 million for the third quarter of 2019. The $55 million increase reflects a $1 million increase in cost of goods sold, a $46 million increase in operating expenses, and an $8 million increase in SG&A expense. Of the $46 million increase in operating expenses, approximately one half was attributable to the increase in seasonal labor wages, offset in part by a reduction in seasonal labor hours as we try to better manage operating calendars to meet demand and match labor availability. The remaining increase in operating expenses, along with the $8 million increase in SG&A expense, was attributable to higher costs for operating and maintenance supplies, as well as higher full-time wages. Helping defray some of the increase in SG&A expense was lower advertising expense in the period. Meanwhile, adjusted EBITDA, which management believes is a meaningful measure of the company's park-level operating results, was $333 million for the third quarter of 2021, compared with $355 million in the third quarter of 2019. The decrease in adjusted EBITDA was largely due to the higher labor costs in the period, as well as the negative impact that operating restrictions, including mandated capacity limitations, had on attendants. As we prepare for 2022 we remain very optimistic about overall consumer demand, but it's clear that the operating environment remains challenging and dynamic from a cost perspective. The tight labor market and ongoing supply chain constraints are likely to continue in the next season. Our team has been proactively working to offset wage rate pressures through cost efficiencies and incremental revenue opportunities. Heading into 2022, we are working to maximize labor efficiencies and reduce seasonal labor hours across the portfolio through more automation, the expanded use of technologies, and process redesign where appropriate. To further offset some of the cost headwinds, our business intelligence team is also focused on optimizing yields through more dynamic pricing and creating additional revenue streams throughout the system, something we did very well this season. Turning our attention to operating trends in October, preliminary net revenues for the 10-month period and October 31st, 2021 totaled $1.2 billion. Over the same period, attendance totaled 17.3 million visits, in-park per capita spending was $62.73, and out-of-park revenues totaled 153 million. The outstanding performance trends from the third quarter continued to build through the month of October, as demand for our haunt and other Halloween-themed events continues to grow. For the five-week period that ended October 31, 2021, preliminary net revenues totaled a record $219 million, representing an increase of 42% or $65 million from the comparable five-week period in 2019. This increase was driven by an 8% increase in attendance to 3.2 million total visits, a 32% increase in in-park per capita spending to a record $64.86, and a 33% increase in out-of-park revenues to $19 million. As we approach the final month of the year, the ongoing strength we continue to drive in guest spending and out-of-park revenues, combined with the improving attendance trends, positions us very well heading into 2022. Shifting our focus for a moment to the balance sheet. Deferred revenues as of September 26, 2021 totaled $211 million, representing an increase of $62 million, or 42%, when compared to deferred revenues at September 29, 2019. Of the $211 million of total deferred revenue outstanding at the end of the quarter, approximately $100 million is projected to be recognized as revenue during the fourth quarter this year. The balance will be recognized as revenue in 2022 or later, including our 2022 season passes and all season pass products. Additionally, this will include the use privileges of 2021 season passes at Knott's Berry Farm and Canada's Wonderland that have been extended into next year due to the pandemic. As Richard noted, since being launched in August, early sales of next year season passes and all-season products are off to a very good start, pacing ahead of the record sales trends from the fall of 2019. Today, our balance sheet is healthy, with no outstanding borrowings under our revolving credit facility and no debt maturities before 2024. At the end of the third quarter, we had total liquidity of $922 million, including cash on hand of $563 million and $359 million available under our revolver. net of $16 million of letters of credit. This compares to $652 million of total liquidity at the end of the second quarter, reflecting $270 million of positive cash flow in the third quarter. Finally, our capital allocation priorities remain consistent with what we've previously indicated. First, continue to reinvest in the business. As we previously announced, our plans are to invest $175 to $200 million in new rides and attractions and other park improvements in 2022. Second, pay down debt until we reach our net debt target of $2 billion or less. As Richard indicated, based on current liquidity levels, we are confident that we are well positioned to begin paying down debt in the very near future as we look to further enhance the strength and financial flexibility of our balance sheet. And third, remain committed to reinstating the distribution to our unit holders. Based on our rapid recovery from the pandemic, our confidence in the business model going forward, and our outlook for a strengthening balance sheet, we believe we will be well positioned to reinstate a quarterly cash distribution to unit holders no later than the first quarter of 2023. With that, I'd like to turn the call back to Richard.

Thanks, Brian. At the outset of the pandemic, We made a pledge to our guests, unit holders, and employees that Cedar Fair would emerge from the COVID-19 disruption stronger than when it began. We are successfully advancing our strategic initiatives to achieve that goal. We anticipate the strong demand levels continuing for our Winterfest and Knott's Merry Farm events through year end, which will provide additional flexibility towards delivering on our primary goals of returning operations to pre-pandemic levels, reducing leverage, and reinstating unit holder distributions. As I noted in my opening remarks, the organizational changes we have made and the strategic initiatives we have implemented have allowed us to systematically attack and offset the lingering challenge from the pandemic's disruption. The new workforce management platform, the build-out of our new business intelligence group, and the hiring of our first CIO are all good examples of the steps we have taken to strengthen our company, operate efficiently, and capitalize on our strategic advantages. In a highly inflationary environment like this, it is critical that we smartly manage all aspects of the business, both on the cost side and the revenue side. We will remain diligent in managing cost while at the same time ensuring we don't sacrifice the quality of the guest experience. On the revenue front, we must remain creative in finding new and exciting ways for our guests to spend and we must continue leaning into dynamic pricing. Over the next couple of weeks, several of our parks begin transforming their midways into winter wonderlands, while other properties are winding down a very successful 2021 season. As we begin plans for the season ahead, I want to thank our guests for their continued loyalty through the pandemic and our incredible team of dedicated associates who continuously achieve amazing things. For our unit holders, Please know that we appreciate your trust and confidence as we continue to get stronger every day. I have never had more confidence in our business than I do right now, and I'm excited to see how much fun is in store for 2022. Kathy, at this point, would you open up the call for questions?

Thank you. And at this time, I would like to remind everyone, in order to ask a question, please press the star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. And your first question will come from James Hardiman of Wedbush.

Hey, good morning. Thanks for taking my call and congrats on a really strong, certainly month of October, but even the tail end of 3Q. I wanted to sort of ask, Obviously, we don't need to get too deep into sort of the month-by-month trend, but maybe characterize the so-called delta dip, if you had one, versus, you know, the last time we spoke, I think, you know, second quarter attendance was down 20, third quarter was down 18. Obviously, there were some puts and takes there. And so, you know, I don't want to just straight line that from where we were to where we are. Because it seems like maybe things got a little bit worse, and then they got better as sort of the delta impact subsided. So maybe walk us through the last few months.

Yeah, good morning, James. It's Brian. You know, at a high level, I would say we've been very pleased with the trend lines we've seen, you know, across the system, certainly at the very beginning of the season. You know, getting open was a little choppy with certainly not all our parks coming online at the same time and staffing, you know, challenges that, as Richard noted, the decisions we made helped remedy. And I think, you know, the results speak to the success that we had with those decisions and those changes we made around staffing. In terms of, you know, demand, And, you know, certainly throughout any season, as you know, having followed us as long as you have, um, there's, you know, ups and downs. I will say this year we found ourselves focused on some of those macro trends that we used to hate talking about and got away from, um, like weather. Um, but certainly that played into it. We really didn't see a demonstrative impact in any of our markets. Uh, you know, really on the, uh, from the Delta side of things, uh, you know, from a guest spending perspective, the trends have only continued to improve. You know, our per cap number in Q2 was just a hair inside of $56. You know, that improved over 64 in Q3 and then pushing 65 in October as we've disclosed. So I'd say, you know, the trends have only continued to improve in certain metrics and have remained very steady in others.

Got it. That's really encouraging. And then maybe if we could hone in on October a little bit. Attendance better than 2019, which seems like a watershed moment for you and the industry. I think that's the first time I've heard that since the pandemic. You did have 6% more operating days in October, or the last five weeks, I guess I should say. Is it as easy to just say that on a same-day basis, which is a metric you've given at times in the past, that attendance was up 2% on a comparable number of days. Math probably isn't that easy. But then also, are you still facing those same headwinds that you were in the third quarter, right? Capacity limitations or restrictions and the headwind from pre-booked sales. I guess, in other words, would that number have been even better were you not facing those things or did those things themselves subside to some degree?

Yeah, James, it's Richard. Good morning. Listen, I think the strength in October, irrespective of the number of days, was really encouraging, as I said in my remarks. You know, we did have a few more days just the way the calendar fell, but from my perspective, it was more a validation of the extremely strong demand we've seen, and I was very pleased. As Brian said, we were watching all the weather trends, not something we've done in a while, but I think overall, you know, I think it gets back to why we are so committed to our event strategy. Halloween's the perfect example, both daytime and nighttime, of why we think the event strategy drives urgency to a limited duration because of the limited duration event. So I think strategically what we saw was a validation of our view of the business. But again, I'm pleased with the way the team performed, really pleased at the high guest satisfaction. And to your point, just thinking about it, I think the other thing that I would point out is You know, we were up on what was a then record month of October by all respects. So I think it really does point to the underlying strength of the business model and the resiliency of it.

That's really helpful. Thanks, guys. Thanks, James.

Thanks, James. Our next question will come from Mike Swartz of Pris Securities.

Good morning, guys. Just maybe a quick follow up on James's first question. I think you said attendance, like for like was about 82% of 2019 levels in the third quarter. I didn't see and maybe I missed it. What did that look like without the capacity limitations at Canada's Wonderland and the, I guess, softer group sales dynamics?

Yeah, good morning, Mike. It's Brian. So yeah, the 82% number that we disclosed is a reported versus a reported. So certainly the less operating days, the 47 less operating days, you know, is impacting that. The capacity limitations, you know, and the softness in the group channel. You know, a little harder to isolate those latter two just based on their nature. Certainly, if we just look at a comparable operating day to operating day, much like we've seen in previous months, and as we talked about in Q2, we pick up several hundred basis points of comparative attendance year over year. And certainly the group, as we talked about in Q2, has put as much pressure as maybe nine, you know, eight to 10%, maybe let's say 9% on average um you know pressure against that number as well so you you know it's a little harder on can you know a park like canada to quantify the capacity limitations uh other than you know certainly knowing that august is one of that park's best performing months um you know and having those capacity limitations and it was very discernible to see you know when you were bumping your head on certain days okay that that's very helpful and then just switching over to the labor environment you provide a lot of

color in the call. And I think on the second quarter call, you had mentioned that labor costs were or hourly labor costs were up something like 40 percent versus 2020 or I guess 2019. Maybe provide us with an update there and maybe your comfort going into 2022 and maybe what type of inflation you're expecting for the following year.

Yeah, sure, Mike. As it relates to the hourly rate, given the changes that we made, as Richard alluded to, that, I think, righted the ship, if I could put it that way. And those changes were all largely embedded in those Q2 rates that we spoke about. So not much further creep around rates. in terms of its 2021 versus 2019 or 2021 expectations, budget, however you want to look at it. So those those comparatives, those percentages, I think are largely still in line with what we previously disclosed. As we look towards next year, I think our belief is that the adjustments we've taken this year while they were definitely taken out of necessity, given the short runway we had to get parks open, that we don't anticipate the need to take meaningful increases again next year. I think we're well positioned based on our current status. As Richard noted in our prepared remarks and commented on the runway that we have, more runway, more opportunity to plan, more opportunity to recruit, You know, I think we have opportunities to build more flexibility into that staffing model, that wage rate model for next year. And so that's going to be our focus. So, you know, certainly trying to find ways to minimize rate pressure through adjusting the model a little bit, as well as, as I mentioned, taking hours out, continuing to find efficiencies, whether that be through automation or the use of more technology, better planning. You know, it's going to have to, you know, some of the pressure is going to have to come off through both hours as well as driving more price. You know, we talked about that. We have to push price. We've been very successful doing that this year, and we think we're well-positioned to continue that.

Okay, great. Thank you.

And our next question will come from Eric Gold of B. Reilly Securities.

Thank you. Good morning. Just one more question on labor. Don't want that to be the only topic here, but I guess with your move to hire and pay aggressively to get the parks staffed, are you still experiencing any notable deficiencies in any parks or any regions of the country that maybe adversely impact the ability to operate rides or get attractions open that may have impacted attendance, or is that really in the past?

Yeah, Eric, good morning. It's Richard. We have not seen, everything we've seen has been broad-based, so we've not seen any pockets of either strength or deficiency, if I'll use your term. No, we've seen the similar trends across all the countries, and certainly North America, so nothing notable to call out there that would be a pocket. Again, we're pleased with the way we're able to both attract but retain the staff, and as Brian said, and as I said in my prepared remarks, just looking to do everything we can to optimize the labor that's available to us.

Okay. But nothing, nothing that, that impact the ability to get, to get attractions or rides open and apart. So these, those are all, every time I'm operating at full capacity, full ability.

No, we, we had, we had, we were able to put on the level of guest experience and product that we wanted. Had we seen those types of pockets, I think we would have seen that show up in our guest experience, in our guest satisfaction scores. And again, we achieved some of our highest scores ever at almost every park, both daytime and nighttime, and that's one of the things I'm most proud of.

Yeah, and Eric, I would just add to Richard's comments that the staffing levels are reflective, the adequacy of the staffing levels, as Richard just commented, are reflected in those per caps. Our ability to generate the per cap data numbers that we did in Q3 and in October would not have been possible had we had, you know, shortages of staffing, particularly in key retail channels.

Got it. And then final question, on the season pass front, any kind of underlying drivers in terms of, you know, the strength of renewals of prior pass holders versus, you know, first-time purchasers coming into the mix and any discernible shifts in kind of the demographic of, the season pass buyer that they're seeing in terms of age, family composition, distance from the park, anything that would call out a trend?

Eric, the season pass is, as I said, a critical program. We've got more information and we watch it very closely. We've got more information on season pass holders than we do on our single-day tickets, and we're catching up on that. But when I look at that, going into this, we knew we had to watch the renewals And what was happening, we've seen them start to trend strong depending part by part. You know, you've got the extension of the use benefits at Knott's Berry Farm and Canada's Wonderland at the next year. So we knew that would be a little bit of a headwind, but we're seeing in our data what we'd expect to see in a normal year. So it feels a little bit like normal. Again, renewals started out a little slower, been strengthening over the course of the the sales period. So we continue, even though fall is our second biggest period, the winter holiday period that we're going into is increasingly becoming important. So we're going to watch that closely as we work our way through that.

Perfect. Thank you both.

Thanks, Eric.

And again, as a reminder, that is star one on your telephone keypad if you'd like to ask a question. We will now go to Paul Coding of Mequire Capital.

Thanks so much. Congrats on a phenomenal quarter. I had a question on the $175 to $200 million in 2022 spend on new rides and attractions. I was wondering if you could give us any color on how the supply chain may or may not be impacting that, given the number seems to be holding about the same, but we've seen costs and actual material transport, et cetera, be impacted. And then I have a follow-up. Thanks.

Paul, good morning. It's Richard. We've seen some isolated challenges with supply chains. Certainly they're out there, but with planning ahead and getting our orders in earlier like we like to do, we've minimized that. So some of the projects on an isolated basis, we might have challenges getting to. But overall, I think we'll be able to debut what we need to and what we want to next season. So nothing that I think that we're seeing will impact our ability to get up and running with all of the things that we detailed in our last earnings call and released in terms of new product next year, but also those ancillary products. So working our way through that, nothing significant. It's there, certainly. We're monitoring it, but we're working our way through it.

That's great to hear. And then on guest experience, I was wondering if you could give any color on how some of the guest experience digitization or optimization products and initiatives have been trending, whether it's front of line or mobile ordering, anything that could be sort of a bellwether for how the uptake is driving experience or per cap quality there. Thanks.

You know, one of the notable things, Paul, in what we see this year is that we're across, as we said in our remarks, we're up across all revenue channels. So You know, we're still evaluating all the data to distill out what we think is really driving, but it's a huge lift on all fronts. Certainly, we think we benefited from the revenge spending that we've talked about, but more importantly, we think we're benefiting from, as Brian said, several years of initiatives really aimed at unlocking more transactions, listening to our guests, trying to take some of those friction points out. So, you know, we have seen good uptake and the things we've put out there, but improving our consumer technology is going to be a big part of our platform going forward. We anticipate, as we said in prior calls, that the business optimization, we'll get to that over and see the benefits of that over a two- to three-year timeframe, but more to come on that front as we get into upcoming calls and quarters.

Great. Thanks so much.

Thanks, Paul.

Our next question will come from Stephen Grambling of Goldman Sachs.

Hi, thanks for taking the questions. I may have missed some of this in the opening remarks, but I'm just curious if you could weigh in on how you're thinking about labor cost inflation over time as we look over the next couple of quarters and if you're seeing material differences by geography, both in terms of rate and just the shortages that we've heard about.

Yes, Stephen, it's Brian. Good morning. As it relates to the staffing challenges, certainly there's modest differences from park to park, but I would characterize it similar to Richard's earlier comment that that tight labor market is really a nationwide problem, something we're seeing across all our properties here in North America. So certainly the ones that are a little bit more of a distance from the bigger metropolitan areas, Um, may have some incremental challenges, um, while those that are closer, you know, staffing gets a little bit easier, at least the population base is a little bit deeper. Um, in terms of, you know, our outlook, um, this, the, as I mentioned, uh, on a, to answer to an earlier question, you know, the, the step functions that we took in rates this year, uh, to address the staffing challenges, I think those, those rates. are very relevant still for next year, not necessarily seeing a need for those to increase. In fact, as we noted in our comments, we're trying to build more flexibility with more runway to plan. We want more flexibility in the labor model going forward. There are certainly some tailwinds that can help us. You know, seeing the J-1 visa program come back, we had a modest amount of associates that came through that channel this year, a little later in the game, but seeing that continue to get back to its historical levels will definitely benefit us. And then, as I just mentioned, certainly more runway to plan our staffing models to recruit should benefit us as well as we look to offset some of the rate pressures we saw this year.

And then perhaps another follow-up to one of your comments earlier about attendance. I mean, can you just shed any light on what you're seeing in terms of group attendance, you know, where that is trending versus kind of normalized levels and anything that you're anticipating or seeing into next year?

Yes, Stephen, it's Richard. On the group channel, listen, as we've shared on earlier calls, back in 08-09, that's usually the first to get disrupted and the longest to come back. What we've been surprised by, frankly, is the phone's been ringing from our corporate clients. So we're starting to see a pickup in activity, not yet seeing that through the gate. So there is some interest, although the folks on the corporate side that we're talking to want to configure their – they're asking for a little more flexibility in terms of how people use the park. So we're thinking about how to evolve our offerings to match where we think the market's going on that front. Could be more limited operation on a Thursday night, things like that. How can we customize it for them? But one of the really important channels for us every year is youth sales. With schools returning and everybody back to in-person learning, we're monitoring where the school systems will be in terms of their ability or desire to go to some of our traditional days in the spring. So we've been encouraged by the conversations we've had and the discussions so far. But again, still a little too early to kind of forecast how quickly group comes back. I would stay with our historical view that, you know, first to be disrupted, last to come back. So we think there'll be some impact on 22, but feel better about it when we look at 23 and beyond.

And one last one, just on the business optimization program, the 50 million, you know, has anything changed in terms of your thinking about that number and the split between cost and revenues? And How does the strength in per caps maybe fit into that program, meaning could there be any difference in flow through from the strong per caps as a result of some of the things you're doing there? Thank you.

You know, from my perspective, we remain confident in our ability to achieve the $50 million that we've outlined. No significant update in terms of performance. The timing or the components, we're still working our way through, as we said in our prepared remarks, trying to be as efficient as possible and optimize on both the expense and revenue side. So no update for you. Other than that, we remain confident in our ability to hit the target.

Fair enough. Thanks so much.

And with that, it does appear that concludes our Q&A session. I'd like to turn things back to Richard Zimmerman for closing remarks.

Thanks, everyone, for your participation in today's call, and especially for your investment or continued interest in Cedar Fair. As the holiday season approaches, I know I speak for Brian, Michael, and our entire team at Cedar Fair, in which you must cheer and endless fun. We look forward to seeing you at an upcoming conference, either in person or via video. Michael?

Thanks again, everybody. If you have any additional questions, please contact our Investor Relations Department at 419. And we look forward to speaking with you again in February after releasing our 2021 year-end earnings report. Kathy, that ends our call for today.

Thank you. And again, ladies and gentlemen, that does conclude today's call. We'd like to thank you again for your participation. You may now disconnect.