Cedar Fair, L.P. (NYSE:FUN) Q4 2023 Earnings Call Transcript

Cedar Fair, L.P. (NYSE:FUN) Q4 2023 Earnings Call Transcript February 15, 2024

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Operator: Thank you for standing by. My name is Danica, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cedar Fair Entertainment Company 2023 Fourth Quarter Earnings Call. [Operator Instructions] Thank you. I would now like to turn the call over to Michael Russell. Please go ahead.

Michael Russell: Thanks, Danica. Good morning to everyone. Welcome to today’s earnings call to review our 2023 fourth quarter and full year results for the period ended December 31. 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 Cedar Fair’s CEO, Richard Zimmerman; and Brian Witherow, our Chief Financial Officer. 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 those 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. Before I begin, I want to reiterate that the purpose of today’s call is to discuss 2023 fourth quarter and full year results and answer related questions. During Q&A today, management will not be taking questions about the proposed merger with Six Flags. With that, I’d like to introduce our CEO, Richard Zimmerman. Richard?

Richard Zimmerman: Thank you, Michael. Good morning, and thanks to everyone for joining us today. We’re excited to be here today to discuss another very solid performance by Cedar Fair in 2023, including a record performance over the second half of the year. But before we review our results, let me briefly bring everyone up to speed regarding where we stand in terms of the proposed merger with Six Flags. I am pleased to say that we passed a key milestone at the end of January when the S-4 was declared effective and the related definitive documents were subsequently filed, including the Six Flags proxy statement and prospectus. Meanwhile, we continue to work through the antitrust approval process after receiving a second request from the Department of Justice on January 22.

This was an anticipated part of the process that our respective teams have prepared for. And we continue to expect the transaction to close within the first half of the year as originally contemplated. Since announcing the proposed merger in early November, we have engaged in many conversations with Cedar Fair unitholders as well as the broader investment community. And we are encouraged by the strong support we’ve heard from many investors. We look forward to closing the transaction in the coming months and unlocking the compelling value creation opportunities ahead for our combined company, which we are confident are greater than either company could have achieved independently. Naturally, as this process moves forward, we will keep the market apprised of other material events.

Now let’s move on to 2023 results and our outlook for the year ahead. I am pleased to report that Cedar Fair capped off an outstanding second half of the year with a record fourth quarter performance, including new fourth quarter highs in attendance, net revenues and adjusted EBITDA. As we have seen before, the 2023 operating season was a tale of two halves. By mid-season, the effects created by anomalous macro factors, namely unprecedented rainfall in California and uncontrolled wildfires in Canada, resulted in shortfalls in early season attendance and spring season pass sales, which posed a challenge to our potential full year results. Consequently, we modestly adjusted ticket pricing at several key parts while also investing more in our advertising and promotional campaigns.

Along with return to more normal weather conditions, these mid-season adjustments were successful in generating incremental demand and led to a 3% increase in attendance over the balance of the season, recouping a meaningful portion of our early season deficit. In an effort to drive greater flow-through from the revenues we generated, we also remain laser-focused on identifying new cost efficiencies. While there is still more work to be done in this area, we were pleased that we achieved our goal of reducing second half operating costs and expenses from 2022 levels and improving adjusted EBITDA margins over the last six months of the year. As we have previously stated, our best opportunity to streamline cost and drive margin expansion resides in each year’s second half, when operating costs are the most variable and attendance and revenues are at their peak.

Before I ask Brian to review our financial results in more detail, I want to take just a few minutes to elaborate on the value of several intangibles of our business model that are often overlooked yet extremely important to our ongoing success. First is resiliency. Our historical track record of quickly recovering from macro disruptions is a testament to the resiliency of our business model. Cedar Fair’s resiliency is grounded in our ability to dynamically manage resources, market our unique brand of entertainment and deliver a diversity of engaging experiences that drive demand through market cycles. This has allowed us to navigate downturns in our industry as evidenced by our recoveries from the Great Recession and the recent pandemic. This past season is just the most recent example of how our resiliency played a key role in driving record second half performance after macro factors weighed on first half results and our plans to produce another record year.

Second is our ability to sustain performance. For more than a century and a half, Cedar Fair and its iconic collection of parks have delivered sustained performance. This resides in the irresistible consumer appeal created by our unique outdoor attractions that draw millions of guests to our parks each year as they have for decades. We leverage our expertise and the economic value produced by the resilient demand for our parks to generate exceptional amounts of free cash flow, much of which is invested back into our properties to drive future growth. Executed well, this time-tested approach is at the heart of Cedar Fair’s sustained durability. The appeal of our parks and all they have to offer has withstood the test of time. Since the founding of our flagship park, Cedar Point, in 1870, our company has built upon a rich history of delivering happiness and excitement to multiple generations of families.

Our parks are woven into the fabric of their local communities, providing tens of thousands of good-paying jobs as well as economic prosperity for neighboring businesses and local governments. Therefore, we take seriously our role as custodians of a unique collection of historic parks and our obligation to preserve their integrity for the generations to come. And third is stability. Our culture is rooted in stability, supported by the most experienced senior leadership team among the regional amusement park players. Industry experience also runs deep among our regional VPs and general managers, responsible for overseeing and managing the day-to-day operations at our park. Fundamentally, we also have a healthy, stable business. Our balance sheet is solid.

We can fund the company’s capital needs. And if we see attractive opportunities, we have the capacity and financial flexibility to pursue them. Helping to drive that economic stability is the growth of our recurring, predictable revenue streams, the existence of which instills confidence in our long-term strategic plan and capital allocation strategies. With that, I’ll turn the call over to Brian, after which I’ll return with a few closing thoughts around our outlook for the business. Brian?

Brian Witherow: Thanks, Richard, and good morning. I’ll start off with a review of our record fourth quarter performance before providing a more detailed recap of our full year results. During the quarter, our parks had 377 total operating days with one additional day compared with the fourth quarter of 2022. During the period, we generated record net revenues of $371 million, up $5 million or 1% compared to the fourth quarter of 2022. Our improved performance was driven by a 9% increase in attendance to 5.8 million guest visits and a 7% increase in out-of-park revenues. The increase in out-of-park revenues was the result of the continued strong performance of our resort properties, incremental sponsorship business and higher revenues at the Knott’s Marketplace.

The increase in attendance reflects the robust demand for our extremely popular events, including Haunts and WinterFest as well as increased season pass visitation tied to the strong early sales of 2024 passes. Partially offsetting the growth in attendance and out-of-park revenues was a 7% decrease in, in-park per capita spending during the quarter. The decline in per capita spending was attributable to a decrease in admission spending, reflecting the mid-year pricing adjustments we made as well as the recovery of lower-priced attendance channels in the quarter and a shift in attendance mix. Moving to the fourth quarter cost front. Operating costs and expenses in the period totaled $307 million, up $21 million compared to the fourth quarter of 2022.

The period-over-period increase was primarily attributable to $17 million of transaction costs related to the proposed merger with Six Flags. These costs have been classified as SG&A expenses. Excluding the merger-related costs, total operating costs and expenses for the quarter increased $4 million or 1% due entirely to higher SG&A expense. The increase in SG&A expense reflects higher full-time wages as well as higher planned spending on advertising during the period. Adjusted EBITDA, which management believes is a meaningful measure of the company’s park-level operating results, increased $1 million to a record $89 million in the fourth quarter while fourth quarter margin remained essentially flat to prior year at 24%. Shifting our focus to full year results.

Operating days in 2023 totaled 2,365 compared with 2,302 operating days in 2022. The 63 incremental days were the result of 80 net planned days added to our park operating calendars in 2023, largely in the first half of the year. These planned incremental days were partially offset by 17 operating days that were canceled during the year due to inclement weather. For the full year, net revenues totaled $1.8 billion on attendance of 26.7 million guests compared with net revenues of $1.82 billion on attendance of 26.9 million guests in 2022. The decrease in net revenues reflects the impact of a 1% or 247,000 visit decline in attendance and a 1% or $0.60 decrease in, in-park per capita spending. These declines in attendance and per capita spending were offset in part by a 5% or $10 million increase in out-of-park revenues.

The year-over-year decline in attendance reflects the impact of a decrease in season pass sales and lower demand during the first half of the year due to the extreme weather, particularly at our California parks. The decline in per capita spending was largely attributable to the previously discussed decrease in admission spending, which was partially offset by higher levels of guest spending on food and beverage. The improvement in guest spending on F&B was driven by increases in both the number of transactions per guests and the average transaction value, reflecting the impact of continued investments in our food and beverage offerings. Moving on to the cost front for the full year. In 2023, operating costs and expenses totaled $1.32 billion compared with $1.29 billion in 2022.

The year-over-year increase was primarily attributable to $22 million of transaction costs related to the proposed merger with Six Flags. Excluding these merger-related costs, total operating costs and expenses for the year increased $5 million, up less than 1%. This year-over-year increase was the result of a $14 million increase in SG&A expense, which was partially offset by a $4 million decrease in cost of goods sold and a $4 million decrease in operating expenses. The decrease in operating expenses was primarily driven by cost savings initiatives that led to reductions in seasonal labor hours and in-park entertainment costs. These cost savings were somewhat offset by six incremental months of land lease expense at California’s Great America, higher early season maintenance costs at several parks and increased insurance-related costs.

The increase in SG&A expense was primarily attributable to higher planned advertising during 2023. Looking a little more deeply at operating costs for a moment. As Richard mentioned, we remain focused on reducing operating costs and improving margins. This past year, these efforts including taking variable costs out of the system when attendance levels were below expectations as well as setting the stage for reimagining how we program and staff our parks in order to capture more permanent savings. Over the second half of the year, these efforts led to a $22 million year-over-year reduction in operating expenses. We made these adjustments while still entertaining nearly 600,000 more guests during that time. Our cost-saving efforts, combined with record revenues, led to a 210 basis point expansion in adjusted EBITDA margin over the second half of the year.

The reduction in second half operating cost was primarily driven by efficiencies in operating supplies and entertainment costs as well as reductions in both seasonal and full-time labor. Over the second half of the year, our park teams reduced total seasonal labor hours by more than 550,000 hours while our average seasonal labor rate was up a modest 1%. The changes we have made to our seasonal pay structure continued to help flatten the growth curve around labor rates, which is particularly important given that seasonal labor rates — our seasonal labor represents our single-largest operating cost. For the full year, our average 2023 seasonal labor rate was up 2% from last year, in line with expectations coming into the year. The recent success of our cost-saving measures gives us confidence going forward that we have the right strategies in place to drive incremental operating efficiencies and expand margins while still delivering a park experience that meets the demands and expectations of our guests.

On the adjusted EBITDA front, for the full year, adjusted EBITDA totaled $528 million compared to $552 million in 2022. The $24 million decrease was primarily attributable to the year-over-year decreases in attendance and net revenues and, to a lesser extent, by the higher advertising, land lease and insurance-related costs in 2023. Now turning to the balance sheet. We ended the year with $65 million in cash on hand, no outstanding borrowings under our revolving credit facility and total net leverage just above our stated goal of 4x. Including our cash on hand and the available capacity under our revolver, we ended 2023 with total liquidity of $345 million, an adequate level to cover near-term cash needs. I want to look at long lead business indicators for just a moment.

As Richard previously mentioned, the early trends in sales of season pass products have been strong while group bookings and reservations at our resort properties are pacing in line with expectations. Our total deferred revenue balance at the end of the year was $192 million, representing an increase of $19 million compared to deferred revenues at the end of 2022. Through the end of January, sales of 2024 season passes were up approximately $16 million, driven by a 20% increase in unit sales. The increase in unit sales was somewhat offset by a decline in the average pass price, which reflects our pricing strategy aimed at building unit volume in the early months of the program as well as a shift in the mix of passes sold. With more than half of our season pass sales cycle remaining, including the spring window that accounts for close to 50% of total sales, we remain focused on maintaining the strong demand trends we’ve established to date.

Regarding our CapEx program, this past year, we spent $220 million on CapEx, including investments in new rides and attractions, upgraded and expanded food and beverage facilities and renovations to the Knott’s Hotel. By comparison, we project investing between $210 million and $220 million on capital projects in calendar year 2024. Additionally, for modeling purposes, we are projecting full year 2024 cash interest payments of $140 million to $150 million and full year cash taxes of $50 million to $60 million. Finally, I want to provide an update on our planned operating days for 2024. After carefully evaluating demand levels and our performance this past year, we’ve made the strategic decision to condense our operating calendars at several parks as we look to concentrate attendance over fewer days and drive better operating efficiency.

The changes that are being implemented will primarily reduce operating days in the first two quarters, most notably at our small to mid-tier parks. In total, we are currently planning for 2,253 operating days in 2024 or 112 fewer days than in 2023. For additional modeling purposes, the breakdown of planned operating days by quarter, which will be impacted by natural shifts in the timing of holidays as well as by shifts in the timing of our fiscal quarter ends, are as follows: 119 days in the first quarter, 803 days in the second quarter, 998 days in the third quarter and 333 days in the fourth quarter. Despite the fewer operating days in 2024, we are confident we have the plans and initiatives in place to build on the momentum we established over the second half of 2023, pushing attendance at our parks back closer to 2019 pre pandemic levels.

With that, I’d like to turn the call back over to Richard.

Richard Zimmerman: Thanks, Brian. While somewhat disappointed by the way 2023 began, as I hope you can tell from our comments this morning, we are extremely pleased with our performance over the second half of the year and even more excited about the opportunities we believe can build on that momentum in 2024. Our positive outlook continues to be shaped by several factors. First, Consumer demand for amusement park entertainment remains strong and is pacing to soon surpass pre-pandemic attendance levels, an observation supported by our consumer research as well as our record second half performance in 2023 and the strong early trends in our long lead indicators, like 2024 season pass sales. Second, in 2024, we are set to unveil one of our most compelling and broadest-reaching capital programs ever.

We are especially excited about the debut of Cedar Point’s Top Thrill 2, a project several years in the making and one that is certain to be one of the industry’s most unique and anticipated new rides of the year. Our investments in world-class assets like TT2 place Cedar Fair on the amusement industry’s leading edge of roller coaster technology and continue to build on our heritage of delivering thrills unlike any other. Although TT2’s massive presence at our flagship park will most certainly steal this year’s headlines, we are also introducing an incredible lineup of new attractions, dining and resort options across our entire portfolio of properties. Third, with each new season, we leverage more business intelligence and data analytics to inform our decision-making processes.

As evidenced this past year by our agility, these expanded capabilities help set strategies that drive revenue growth and uncover operating efficiencies that reduce cost and increase profitability. And lastly, I would emphasize few reporting periods have been impacted by macro factors as much as the first half of 2023. Under normalized operating conditions, this should translate into a comparative tailwind and a stronger first half in 2024. With Mother Nature hopefully on our side, we are excited about our prospects for delivering a solid start to the year, coupled with an outstanding game plan for the peak season and the proven strength of our all-important second half. We are fortunate to have a business model that has demonstrated resiliency and strength in varying economic and market conditions.

I am encouraged with how effectively our mid-season strategic decisions drove performance over the second half of the year. While we continue to work to get demand back to pre-pandemic levels and, at the same time, operate our parks more efficiently, we believe we are well positioned to deliver another outstanding year in 2024 and remain laser-focused on delivering solid returns for our investors. As a reminder, we have no further updates on the merger beyond what I shared at the beginning of the call today. We ask that you keep your questions focused on our performance and our results. Danica, that’s the end of our prepared remarks. Please open up the call for questions.

Operator: [Operator Instructions] Your first question comes from the line of James Hardiman with Citi. Please go ahead.

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Q&A Session

James Hardiman: Hi. Good morning. So my question was going to be, do you think you’ve turned the corner in terms of attendance following the fourth quarter? But Richard, you said — it sounds like the answer is yes based on one of the — your final comments there that you thought that demand is soon going to outpace 2019. I’m assuming by demand, we mean attendance. I guess, if I look at the numbers, you were down about 5% versus 2019 in 2023. Do you think — so it would take 5% attendance growth to get back there. Do you think that’s in the cards, I guess, weather permitting?

Richard Zimmerman: I would say – James, good morning. Good to talk with you. Thanks for the question. When you look at what we did over the second half of the year and the strong demand, the ability to generate significant revenue in what is already our biggest period of the year and in particular, in the fourth quarter, we always talk about the strength of Halloween and we always talk about the strength we saw in WinterFest. And that showed through this year. The fact that we really were able to push through 2019’s level, the highest attendance in the fourth quarter, this year in 2023 says I think we have turned the corner. And I think while there’s always been a great deal of focus from the sell-side community on the strength of the consumer, we’re seeing really strong demand across all of our regions.

We saw the recovery in Southern California, particularly in the second half of the year. We had an extremely strong year, which we commented on, in the Ohio Valley. And we commented on that throughout the last couple of calls. So we do think where there is no extraneous factor like weather, we’re seeing really strong demand.

James Hardiman: Got it. So you’re — it sounds like we’re taking a wait and see, but you feel pretty good, fair?

Richard Zimmerman: We are confident in the demand that we’re seeing. And it’s supported both — as I said in my remarks, both by our research and what we’re seeing in our leading indicators.

James Hardiman: Got it. And then Brian, I’m trying to figure out a smart way to ask this question. But I can’t remember if it was the second quarter or the third quarter, when you initially talked about sort of getting that base layer of season pass sales on the books and then you would lean into price after that. And it seems like in a lot of ways, that played out here in the second half, particularly the fourth quarter. I guess, as we think about what we saw, which was a really nice increase in attendance, offset by a pretty meaningful decline in per caps, how much of that is a precursor to what we’ll see in 2024? I guess, specifically, as we sit here today, the lower season pass sales — season pass prices, I should say, how much does that impact per caps in 2024?

And as we sit here today, is pricing back to being, I don’t know, flat on a year-over-year basis on the season passes with the potential to grow that? Or are we continuing to sort of see lower season pass pricing into the new year?

Brian Witherow: Yes, James. So I think first, it’s important to note that as we talk about that strategy of building a strong base for season pass and leaning into volume early, we did adjust pricing but only at a handful of parks. I think unfortunately are just the realities of our operating calendar in the parks that are open, a couple of those parks, most notably Knott’s Berry Farm, are a big — a large portion of the fourth quarter operations, right? Not all of our parks have as much meaningful fourth quarter operations as others. So I think some of those pricing adjustments weigh a little bit more maybe on fourth quarter than they necessarily will as we roll into ’24 as you’re back to sort of the full-throated portfolio of parks operating.

That said, even at the parts where we did take prices back to adjust to sort of how the market around us in those few markets had moved, we have started to take price back up as we always do in our season pass program, right? On a market-by-market basis, we adjust our pricing. The playbook around season pass is the fall is the least expensive, then it bumps up a little for the winter sales cycle and then the spring and summer are the highest. So we’ll continue to roll through that and get a read market-by-market. But as we think about going into next year, where the consumer is at, where per caps are going to come out, we always have to sort of separate and isolated admissions versus the in-park. We continue to be pleased with what we see on guest spending inside the park, particularly around food and beverage.

I think there’s some more work that we have in store for a few of those other in-park channels, like merchandising gains in 2024. And then we certainly believe that a channel like guest spending on extra charge, most notably Fast Lane, will be lifted and benefited by those higher attendance numbers that we are expecting going into next year.

James Hardiman: Got it. And so should I interpret all of that, I mean, if the positivity on attendance plays out in 2024, based on some of Richard’s commentary, should we not assume that there’s a significant giveback on the per cap front like we saw in the fourth quarter?

Brian Witherow: I think, ultimately, the answer to that, James, is going to depend a little bit on mix of channel, which channels does the majority of that lift come from? I mean, as you know, season pass and group are smaller admissions per cap or a less expensive ticket on a per cap basis than single day, and so depending on where that mix or if that mix shakes out in the incremental attendance as well as which parks, right? I mean, the higher per cap parks, if that’s where more of the growth comes from, that could change that. But it’s fair to say that as attendance gets back to those 2019 pre-pandemic levels and each of those channels recover, there’s naturally some mathematical pressure on the admissions per cap. But there’s a lot more revenue, and that’s a type A problem we’d like to have.

James Hardiman: Got it. Makes sense. Appreciate it, guys, and good luck.

Brian Witherow: Thanks, James

Operator: We will go to our next question from Steve Wieczynski with Stifel. Please go ahead.

Steve Wieczynski: Hi, guys. Good morning. So Richard, look, I understand you don’t give annual guidance here. But if we’re sitting here this time next year, would you be disappointed if you didn’t exceed — I would say not so much the EBITDA threshold from 2023, given obviously the easy weather comparisons you guys are going to have in the first half of this year, but probably a better comparison would be to look back at 2022, which I think was around $550 million of EBITDA. So if you didn’t exceed that level this year, what are some of the factors that we need to be watching or thinking about?

Richard Zimmerman: Steve, it’s a great question. And the backdrop would be whether it’s ’24 or any year that we create a plan for. We look at our portfolio and go where the opportunity is. We start to factor in and have factored in that we invest continuously over time in our parks, the capital projects, and particularly the bigger projects, drive demand in select markets. So we try and time that appropriately. But we can’t control the weather. We always talk about that. We look closely at the economies around our parks. And it’s market-by-market. So we constantly look for what we think the potential is for each park each year and how do we unlock that. And certain parks will have the bigger products. And we expect more growth out of those.

Certain parks will be in markets that potentially are really doing well, meaning the consumer is feeling really good. In certain markets, the consumer may be stressed. So I think we always talk, and we always get asked on this call, about the health of the consumer. I’ve said that in my first thing. So we monitor that as closely as we can. But what we never really get the credit, and we’ve talked about this, from, I think, the broader market for the recurring nature of our revenue streams. So I don’t think each year about disappointment. We’re always disappointed when something we can’t control gets in the way. But that’s — we’re in an outdoor business. So weather and other things like that are just part of who we are. But when I think about building a plan and what I will evaluate at the end of the year, how close did we get to the potential that each park had that year, factoring all the things that we do control and how we program our parks, what days we’re open.

I think you see us reacting to where we think the opportunities are. But the other thing that I’ll underscore that we’re going to continue to look at, at the end of each year and as we go through each season. We’re committed to dynamic pricing. We’re committed to using our business intelligence capabilities and data analytics to drive our decision-making both now — but we plan on a continual basis. We’re talking about ’24. And that’s important. And that’s right in front of us. But we’re already working on ’25 and ’26 and ’27 because we believe in the long-term health of this business. We’ve got to deliver in the short term. And that’s what we’re focused on. But we’re also planning for the longer term so that we can sustain our performance over a period of time.

Steve Wieczynski: Okay, got you. Thanks for that Richard. And then if I go back to — I think James kind of asked this question. I’m going to ask it maybe a little bit of a different way. But you noted you obviously adjusted ticket pricing and your marketing spend in the second half of 2023 in order to get some of that lost attendance back. And it seemed like that clearly worked. I guess, the question is do you think you took too much price action? And I know, again this is — Brian mentioned, it’s a small component. It’s a small part of your parks. But I mean, meaning do you think trying to get that price action back now is going to be a little bit more difficult? And I hope that all makes sense.

Richard Zimmerman: Yes. No, I think I understand the question. I go back to our broad thoughts on dynamic price and then I’ll ask Brian to weigh in. We’re looking to optimize volume and price. And you never get it quite right. You get as much as you can and then you evaluate where you are on the continuum and you continue to adjust. I think we did what we needed to do. And I would term our pricing adjustments modest. I’d also say as we look to the strength coming out of the fall season pass sales, we took our biggest price increases to the now winter price at those parks where we saw the strongest demand. So it’s constantly watching the market and how our consumers are reacting and making sure we’re trying to optimize that revenue stream. Brian?

Brian Witherow: Yes. I think, Steve, I would just add, as we go through any year, there’s always going to be points in times, various ticket channels in various markets, where we might bump our head. And that’s a lot easier to navigate on a day-by-day or week-by-week basis than things like single-day tickets. I think what we saw the most pressure in the past year was, as we said earlier, was in season pass in several markets. And you have to remember, those — that pricing strategy and those sales strategy around season pass are set in the summer leading to that late August launch of each year’s or park’s program. And so you put in place a pricing strategy that it’s harder to adjust downward on season pass. And certainly, there were several markets in our portfolio that by the time we got to the first quarter of ’23, the economies or maybe the consumer had changed a little bit from where they were back in July, August, when we were setting those prices.