10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35883

SeaWorld Entertainment, Inc.

(Exact name of registrant as specified in its charter)

Delaware	27-1220297
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
6240 Sea Harbor Drive Orlando, Florida	32821
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (407) 226-5011

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	SEAS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had outstanding 63,886,889 shares of Common Stock, par value $0.01 per share as of May 4, 2023.

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS

		Page No.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		2
PART I.	FINANCIAL INFORMATION	5
Item 1.	Unaudited Condensed Consolidated Financial Statements	5
	Unaudited Condensed Consolidated Balance Sheets	5
	Unaudited Condensed Consolidated Statements of Operations	6
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit	7
	Unaudited Condensed Consolidated Statements of Cash Flows	8
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
	Signatures	33

1

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of the federal securities laws. All statements, other than statements of historical facts, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, our results of operations, financial position and our business outlook, business trends and other information, may be forward-looking statements. Words such as “might,” “will,” “may,” “should,” “estimates,” “expects,” “continues,” “contemplates,” “anticipates,” “projects,” “plans,” “potential,” “predicts,” “intends,” “believes,” “forecasts,” “future,” “targeted,” “goal” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ materially include, among others, the risks, uncertainties and factors set forth under “Part I, Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report on Form 10-K”), filed with the Securities and Exchange Commission (the “SEC”), and under “Part II, Item 1A., Risk Factors” in this Quarterly Report on Form 10-Q, as such risk factors may be updated from time to time in our periodic filings with the SEC, including this report, and are accessible on the SEC’s website at www.sec.gov, including the following:

•a decline in discretionary consumer spending or consumer confidence, including any unfavorable impacts from Federal Reserve interest rate actions and inflation which may influence discretionary spending, unemployment or the overall economy;

•various factors beyond our control adversely affecting attendance and guest spending at our theme parks, including, but not limited to, weather, natural disasters, labor shortages, inflationary pressures, supply chain delays or shortages, foreign exchange rates, consumer confidence, the potential spread of travel-related health concerns including pandemics and epidemics, travel related concerns, adverse general economic related factors including increasing interest rates, economic uncertainty, and recent geopolitical events outside of the United States, and governmental actions;

•failure to hire and/or retain employees;

•increased labor costs, including minimum wage increases, and employee health and welfare benefit costs;

•complex federal and state regulations governing the treatment of animals, which can change, and claims and lawsuits by activist groups before government regulators and in the courts;

•activist and other third-party groups and/or media can pressure governmental agencies, vendors, partners, guests and/or regulators, bring action in the courts or create negative publicity about us;

•incidents or adverse publicity concerning our theme parks, the theme park industry and/or zoological facilities;

•a significant portion of our revenues have historically been generated in the States of Florida, California and Virginia, and any risks affecting such markets, such as natural disasters, closures due to pandemics, severe weather and travel-related disruptions or incidents;

•technology interruptions or failures that impair access to our websites and/or information technology systems;

•cyber security risks to us or our third-party service providers, failure to maintain or protect the integrity of internal, employee or guest data, and/or failure to abide by the evolving cyber security regulatory environment;

•inability to compete effectively in the highly competitive theme park industry;

•interactions between animals and our employees and our guests at attractions at our theme parks;

•animal exposure to infectious disease;

•high fixed cost structure of theme park operations;

•seasonal fluctuations in operating results;

•changing consumer tastes and preferences;

•inability to remediate an identified material weakness on a timely basis;

•inability to grow our business or fund theme park capital expenditures;

•inability to realize the benefits of developments, restructurings, acquisitions or other strategic initiatives, and the impact of the costs associated with such activities;

2

•the effects of the global Coronavirus (“COVID-19”) pandemic, or any related mutations of the virus on our business and the economy in general;

•adverse litigation judgments or settlements;

•inability to protect our intellectual property or the infringement on intellectual property rights of others;

•the loss of licenses and permits required to exhibit animals or the violation of laws and regulations;

•unionization activities and/or labor disputes;

•inability to maintain certain commercial licenses;

•restrictions in our debt agreements limiting flexibility in operating our business;

•inability to retain our current credit ratings;

•our leverage and interest rate risk;

•the ability of Hill Path Capital LP and its affiliates to significantly influence our decisions and their interests may conflict with ours or yours in the future;

•inadequate insurance coverage;

•inability to purchase or contract with third party manufacturers for rides and attractions, construction delays or impacts of supply chain disruptions on existing or new rides and attractions;

•environmental regulations, expenditures and liabilities;

•suspension or termination of any of our business licenses, including by legislation at federal, state or local levels;

•delays, restrictions or inability to obtain or maintain permits;

•financial distress of strategic partners or other counterparties;

•tariffs or other trade restrictions;

•actions of activist stockholders;

•the policies of the U.S. President and his administration or any changes to tax laws;

•changes in the method for determining LIBOR and any future replacement of LIBOR may affect our cost of capital;

•changes or declines in our stock price, as well as the risk that securities analysts could downgrade our stock or our sector; and

•risks associated with our capital allocation plans and share repurchases, including the risk that our share repurchase program could increase volatility and fail to enhance stockholder value.

We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this Quarterly Report on Form 10-Q apply only as of the date of this Quarterly Report on Form 10-Q or as of the date they were made or as otherwise specified herein and, except as required by applicable law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise.

All references to “we,” “us,” “our,” “Company” or “SeaWorld” in this Quarterly Report on Form 10-Q mean SeaWorld Entertainment, Inc., its subsidiaries and affiliates.

Website and Social Media Disclosure

We use our websites (www.seaworldentertainment.com and www.seaworldinvestors.com) and our corporate Twitter account (@SeaWorld) as channels of distribution of Company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about SeaWorld when you enroll your e-mail address by visiting the “E-mail Alerts” section of our website at www.seaworldinvestors.com. The contents of our website and social media channels are not, however, a part of this Quarterly Report on Form 10-Q.

Trademarks, Service Marks and Trade Names

We own or have rights to use a number of registered and common law trademarks, service marks and trade names in connection with our business in the United States and in certain foreign jurisdictions, including SeaWorld Entertainment, SeaWorld Parks & Entertainment, SeaWorld®, Shamu®, Busch Gardens®, Aquatica®, Discovery Cove®, Sea Rescue® and other names and marks that identify our theme parks, characters, rides, attractions and other businesses. In addition, we have certain rights to use Sesame Street® marks, characters and related indicia through a license agreement with Sesame Workshop.

3

Solely for convenience, the trademarks, service marks, and trade names referred to hereafter in this Quarterly Report on Form 10-Q are without the ® and ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks, and trade names. This Quarterly Report on Form 10-Q may contain additional trademarks, service marks and trade names of others, which are the property of their respective owners. All trademarks, service marks and trade names appearing in this Quarterly Report on Form 10-Q are, to our knowledge, the property of their respective owners.

4

PART I — FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	March 31,			December 31,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	54,761		$	79,196
Accounts receivable, net		72,504			71,050
Inventories		59,060			55,190
Prepaid expenses and other current assets		35,492			28,260
Total current assets		221,817			233,696
Property and equipment, at cost		3,640,041			3,576,092
Accumulated depreciation		(1,899,152	)		(1,869,413	)
Property and equipment, net		1,740,889			1,706,679
Goodwill		66,278			66,278
Trade names/trademarks, net		157,000			157,000
Right of use assets-operating leases		129,415			130,479
Deferred tax assets, net		13,084			12,332
Other assets, net		25,397			19,323
Total assets	$	2,353,880		$	2,325,787
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	164,327		$	159,947
Current maturities of long-term debt		12,000			12,000
Operating lease liabilities		3,261			3,387
Accrued salaries, wages and benefits		22,800			17,423
Deferred revenue		212,799			169,535
Other accrued liabilities		45,835			46,914
Total current liabilities		461,022			409,206
Long-term debt, net		2,097,601			2,099,059
Long-term operating lease liabilities		114,563			115,396
Deferred tax liabilities, net		88,962			96,627
Other liabilities		46,385			43,163
Total liabilities		2,808,533			2,763,451
Commitments and contingencies (Note 8)
Stockholders’ Deficit:
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, no shares issued    or outstanding at March 31, 2023 and December 31, 2022		—			—
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 96,496,784 and 96,287,771 shares issued at March 31, 2023 and December 31, 2022, respectively		965			963
Additional paid-in capital		709,627			710,151
Retained earnings		159,436			175,903
Treasury stock, at cost (32,376,539 shares at March 31, 2023 and December 31, 2022)		(1,324,681	)		(1,324,681	)
Total stockholders’ deficit		(454,653	)		(437,664	)
Total liabilities and stockholders’ deficit	$	2,353,880		$	2,325,787

See accompanying notes to unaudited condensed consolidated financial statements.

5

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

(In thousands, except per share amounts)

	For the Three Months Ended March 31,
	2023			2022
Net revenues:
Admissions	$	163,863		$	150,862
Food, merchandise and other		129,483			119,831
Total revenues		293,346			270,693
Costs and expenses:
Cost of food, merchandise and other revenues		23,221			23,040
Operating expenses (exclusive of depreciation and amortization shown    separately below)		172,674			152,925
Selling, general and administrative expenses		48,281			46,059
Severance and other separation costs		4			30
Depreciation and amortization		37,394			38,612
Total costs and expenses		281,574			260,666
Operating income		11,772			10,027
Other expense (income), net		46			(12	)
Interest expense		36,401			25,370
Loss before income taxes		(24,675	)		(15,331	)
Benefit from income taxes		(8,208	)		(6,344	)
Net loss	$	(16,467	)	$	(8,987	)
Loss per share:
Net loss per share, basic	$	(0.26	)	$	(0.12	)
Net loss per share, diluted	$	(0.26	)	$	(0.12	)
Weighted average common shares outstanding:
Basic		63,978			75,624
Diluted		63,978			75,624

See accompanying notes to unaudited condensed consolidated financial statements.

6

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

CHANGES IN STOCKHOLDERS' DEFICIT

(In thousands, except share amounts)

	Shares of Common Stock			Common Stock			Additional Paid-In Capital			Retained Earnings			Treasury Stock, at Cost			Total Stockholders' Deficit
Balance at December 31, 2022		96,287,771		$	963		$	710,151		$	175,903		$	(1,324,681	)		(437,664	)
Equity-based compensation		—			—			4,482			—			—			4,482
Vesting of restricted shares		273,134			3			(3	)		—			—			—
Shares withheld for tax withholdings		(86,914	)		(1	)		(5,568	)		—			—			(5,569	)
Exercise of stock options		22,793			—			565			—			—			565
Net loss		—			—			—			(16,467	)		—			(16,467	)
Balance at March 31, 2023		96,496,784		$	965		$	709,627		$	159,436		$	(1,324,681	)	$	(454,653	)

	Shares of Common Stock			Common Stock			Additional Paid-In Capital			Accumulated Deficit			Treasury Stock, at Cost			Total Stockholders' Deficit
Balance at December 31, 2021		95,541,992		$	955		$	711,474		$	(115,287	)	$	(631,058	)	$	(33,916	)
Equity-based compensation		—			—			6,982			—			—			6,982
Vesting of restricted shares		361,403			4			(4	)		—			—			—
Shares withheld for tax withholdings		(111,865	)		(1	)		(7,737	)		—			—			(7,738	)
Exercise of stock options		46,503			—			1,127			—			—			1,127
Repurchase of 1,535,427 shares of treasury stock, at cost		—			—			—			—			(109,905	)		(109,905	)
Net loss		—			—			—			(8,987	)		—			(8,987	)
Balance at March 31, 2022		95,838,033		$	958		$	711,842		$	(124,274	)	$	(740,963	)	$	(152,437	)

See accompanying notes to unaudited condensed consolidated financial statements.

7

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Three Months Ended March 31,
	2023			2022
Cash Flows From Operating Activities:
Net loss	$	(16,467	)	$	(8,987	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		37,394			38,612
Amortization of debt issuance costs and discounts		1,542			1,532
Deferred income tax benefit		(8,417	)		(6,531	)
Equity-based compensation		4,482			6,982
Other, including loss on sale or disposal of assets, net		3,221			4,420
Changes in assets and liabilities:
Accounts receivable		(1,361	)		3,408
Inventories		(3,936	)		(15,601	)
Prepaid expenses and other current assets		(6,863	)		(7,653	)
Accounts payable and accrued expenses		(345	)		5,599
Accrued salaries, wages and benefits		5,377			(2,841	)
Deferred revenue		42,072			53,584
Other accrued liabilities		(1,276	)		(5,675	)
Right of use assets and operating lease liabilities		104			201
Other assets and liabilities		(5,231	)		3,744
Net cash provided by operating activities		50,296			70,794
Cash Flows From Investing Activities:
Capital expenditures		(69,758	)		(35,110	)
Net cash used in investing activities		(69,758	)		(35,110	)
Cash Flows From Financing Activities:
Repayments of long-term debt		(3,000	)		(3,000	)
Proceeds from draws on revolving credit facility		20,000			—
Repayments of revolving credit facility		(20,000	)		—
Purchase of treasury stock		—			(89,736	)
Payment of tax withholdings on equity-based compensation through shares withheld		(5,569	)		(7,738	)
Exercise of stock options		565			1,127
Other financing activities		(93	)		(211	)
Net cash used in financing activities		(8,097	)		(99,558	)
Change in Cash and Cash Equivalents, including Restricted Cash		(27,559	)		(63,874	)
Cash and Cash Equivalents, including Restricted Cash—Beginning of period		82,320			444,486
Cash and Cash Equivalents, including Restricted Cash—End of period	$	54,761		$	380,612
Supplemental Disclosure of Noncash Investing and Financing Activities
Capital expenditures in accounts payable	$	45,548		$	31,483
Treasury stock purchases not yet settled in other accrued liabilities	$	—		$	20,169

See accompanying notes to unaudited condensed consolidated financial statements.

8

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Description of the Business

SeaWorld Entertainment, Inc., through its wholly-owned subsidiary, SeaWorld Parks & Entertainment, Inc. (“SEA”) (collectively, the “Company”), owns and operates twelve theme parks within the United States. The Company operates SeaWorld theme parks in Orlando, Florida; San Antonio, Texas; and San Diego, California; and Busch Gardens theme parks in Tampa, Florida and Williamsburg, Virginia. The Company operates water park attractions in Orlando, Florida (Aquatica); San Antonio, Texas (Aquatica); Tampa, Florida (Adventure Island); and Williamsburg, Virginia (Water Country USA). The Company also operates a reservations-only theme park in Orlando, Florida (Discovery Cove) and Sesame Place theme parks in Langhorne, Pennsylvania and Chula Vista, California.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K.

In the opinion of management, such unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations for the year ending December 31, 2023 or any future period due in part to the seasonal nature of the Company’s operations. Based upon historical results, the Company typically generates its highest revenues in the second and third quarters of each year and incurs a net loss in the first quarter, in part because four of its theme parks were historically only open for a portion of the year. In the year ended December 31, 2022, we opened our Sesame Place San Diego park which has been, and is expected to continue to be, open more operating days than the Aquatica San Diego park it replaced, particularly in the first and fourth quarters of the year.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including SEA. All intercompany accounts have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions include, but are not limited to, the accounting for self-insurance, deferred tax assets and liabilities, deferred revenue, equity compensation, the valuation of goodwill and other indefinite-lived intangible assets and reviews for potential impairment of long-lived assets. Estimates are based on various factors including current and historical trends, as well as other pertinent company and industry data. The Company regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes. Actual results could differ from those estimates.

Segment Reporting

The Company maintains discrete financial information for each of its twelve theme parks, which is used by the Chief Operating Decision Maker (“CODM”), as a basis for allocating resources and assessing performance. Each theme park has been identified as an operating segment and meets the criteria for aggregation due to similar economic characteristics. In addition, all of the Company’s theme parks provide similar products and services and share similar processes for delivering services. The theme parks have a high degree of similarity in the workforces and target similar consumer groups. Accordingly, based on these economic and operational similarities and the way the CODM monitors and makes decisions affecting the operations, the Company has concluded that its operating segments may be aggregated and that it has one reportable segment.

Restricted Cash

Restricted cash is recorded in prepaid expenses and other current assets in the accompanying unaudited condensed consolidated balance sheets. Restricted cash as of December 31, 2022 consists primarily of advanced funds for which costs have yet to be incurred related to the Company’s international services agreements, as discussed in the “International Agreements” section which follows.

9

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	March 31,		December 31,
	2023		2022
	(In thousands)
Cash and cash equivalents	$	54,761	$	79,196
Restricted cash, included in prepaid expenses and other current assets		—		3,124
Total cash, cash equivalents and restricted cash	$	54,761	$	82,320

Share Repurchase Programs and Treasury Stock

From time to time, the Company’s Board of Directors (the “Board”) may authorize share repurchases of common stock. Shares repurchased under Board authorizations are currently held in treasury for general corporate purposes. The Company accounts for treasury stock on the trade date under the cost method. Treasury stock at March 31, 2023 and December 31, 2022 is reflected within stockholders’ deficit. See further discussion of the Company’s share repurchase programs in Note 10–Stockholders’ Deficit.

Revenue Recognition

Admissions revenue primarily consists of single-day tickets, annual or season passes or other multi-day or multi-park admission products. For single-day tickets, the Company recognizes revenue at a point in time, upon admission to the park. Annual passes, season passes, or other multi-day or multi-park passes allow guests access to specific parks over a specified time period. For these pass and multi-use products, revenue is deferred and recognized over the terms of the admission product based on estimated redemption rates for similar products and is adjusted periodically. The Company estimates redemption rates using historical and forecasted attendance trends by park for similar products. Attendance trends factor in seasonality and are adjusted based on actual trends periodically. These estimated redemption rates impact the timing of when revenue is recognized on these products. Actual results could materially differ from these estimates based on actual attendance patterns. Revenue is recognized on a pro-rata basis based on the estimated allocated selling price of the admission product. For pass products purchased on an installment plan that have met their initial commitment period and have transitioned to a month-to-month basis, monthly charges are recognized as revenue as payments are received each month. For certain multi-day admission products, revenue is allocated based on the number of visits included in the pass and recognized ratably based on each admission into the theme park.

Food, merchandise and other revenue primarily consists of food and beverage, retail, merchandise, parking, other in-park products and service fees, and other miscellaneous revenue, including online transaction fees and revenue from the Company’s international agreements, not necessarily generated in our parks, which is not significant in the periods presented. The Company recognizes revenue for food and beverage, merchandise and other in-park products when the related products or services are received by the guests.

Deferred revenue primarily includes revenue associated with pass products, admission or in-park products or services with a future intended use date and contract liability balances related to licensing and international agreements collected in advance of the Company satisfying its performance obligations and is expected to be recognized in future periods. At March 31, 2023 and December 31, 2022, the long-term portion of deferred revenue included in other liabilities in the accompanying unaudited condensed consolidated balance sheets primarily relates to the Company’s international agreements, as discussed in the following section.

The following table reflects the Company’s deferred revenue balance as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
Deferred revenue, including long-term portion	$	227,605	$	183,772
Less: Deferred revenue, long-term portion, included in other liabilities		14,806		14,237
Deferred revenue, short-term portion	$	212,799	$	169,535

The Company estimates approximately $75.4 million of the deferred revenue, short term portion, balance outstanding as of December 31, 2022 was recognized as revenue during the three months ended March 31, 2023. For certain admission products, the Company estimated timing of redemption using average historical redemption rates.

10

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

International Agreements

The Company has previously received $10.0 million in deferred revenue which is recorded in other liabilities related to a nonrefundable payment received from a partner in connection with a project in the Middle East to provide certain services pertaining to the planning and design of SeaWorld Abu Dhabi, a marine life theme park on Yas Island (the “Middle East Project”), with funding received expected to offset internal expenses. The Middle East Project is on track with the park scheduled to open in May 2023. The Company also receives additional funds from its partner related to agreed-upon services and reimbursements of costs incurred by the Company on behalf of the Middle East Project (the “Middle East Services Agreements”).

Revenue and expenses associated with the Middle East Project will begin to be recognized when substantially all the services have been performed which is anticipated to occur in 2023, when SeaWorld Abu Dhabi is expected to open. Revenue and expenses associated with the Middle East Services Agreements will be recognized upon completion of the respective performance obligations.

As a result of the Middle East Project, approximately $0.6 million and $0.5 million of costs incurred by the Company are recorded in prepaid expenses and other current assets as of March 31, 2023 and December 31, 2022, respectively, and approximately $11.7 million and $11.2 million of other related costs incurred are recorded in other assets in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively. Separately, deferred revenue of approximately $0.7 million and $0.6 million is recorded in deferred revenue as of March 31, 2023 and December 31, 2022, respectively, and approximately $14.5 million and $14.2 million of long-term deferred revenue is recorded in other liabilities in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively, related to the Middle East Project, which includes the $10.0 million nonrefundable payment previously discussed for each period.

As a result of the Middle East Services Agreements, approximately $2.0 million of costs incurred by the Company are recorded in prepaid expenses and other current assets in the accompanying unaudited condensed consolidated balance sheets as December 31, 2022. Separately, deferred revenue of approximately $0.9 million and $5.1 million is recorded in deferred revenue in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively.

2. RECENT ACCOUNTING PRONOUNCEMENTS

The Company reviews new accounting pronouncements as they are issued or proposed by the Financial Accounting Standards Board (“FASB”). There are no recent accounting pronouncements or recently implemented accounting standards that are expected to have a material impact on the Company’s unaudited condensed consolidated financial statements or disclosures.

3. LOSS PER SHARE

Loss per share is computed as follows:

	For the Three Months Ended March 31,
	2023								2022
	Net Loss			Shares		Per Share Amount			Net Loss			Shares		Per Share Amount
	(In thousands, except per share amounts)
Basic loss per share	$	(16,467	)		63,978	$	(0.26	)	$	(8,987	)		75,624	$	(0.12	)
Effect of dilutive incentive-based awards					—								—
Diluted loss per share	$	(16,467	)		63,978	$	(0.26	)	$	(8,987	)		75,624	$	(0.12	)

In accordance with the Earnings Per Share Topic of the Accounting Standards Codification (“ASC"), basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period (excluding treasury stock and unvested restricted stock awards). Unvested restricted stock awards are eligible to receive dividends, if any; however, dividend rights will be forfeited if the award does not vest. Accordingly, only vested shares of formerly restricted stock are included in the calculation of basic loss per share. The weighted average number of repurchased shares during the period, if any, which are held as treasury stock, are excluded from shares of common stock outstanding.

11

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Diluted loss per share is determined using the treasury stock method based on the dilutive effect of certain unvested restricted stock awards and certain shares of common stock that are issuable upon exercise of stock options. There were approximately 1,225,000 and 1,555,000 potentially dilutive shares excluded from the computation of diluted loss per share during the three months ended March 31, 2023 and 2022, respectively, as their effect would have been anti-dilutive due to the Company’s net loss in those periods. Approximately 610,000 and 1,057,000 of the Company’s outstanding performance-vesting restricted stock awards as of March 31, 2023 and 2022, respectively, are considered contingently issuable shares and are excluded from the calculation of diluted loss per share until the performance measure criteria is met as of the end of the reporting period.

4. INCOME TAXES

Income tax expense or benefit and the Company’s effective tax rate is based upon the tax rate expected for the full calendar year applied to the year-to-date pretax income or loss of the interim period, plus the tax effect of any year-to-date discrete tax items. The Company’s consolidated effective tax rate for the three months ended March 31, 2023 was 33.3% and differs from the effective statutory federal income tax rate of 21.0% primarily due to the tax benefit related to equity-based compensation which vested during the quarter. The Company’s consolidated effective tax rate for the three months ended March 31, 2022 was 41.4% and differs from the effective statutory federal income tax rate of 21.0% primarily due to the tax benefit related to equity-based compensation which vested during the quarter.

Due to the uncertainty of realizing the benefit from deferred tax assets, tax positions are reviewed at least quarterly by assessing future expected taxable income from all sources. Realization of deferred tax assets, primarily arising from net operating loss carryforwards and charitable contribution carryforwards, is dependent upon generating sufficient taxable income prior to expiration of the carryforwards. Based on its analysis, the Company believes that some of its deferred tax assets may not be realized. As of March 31, 2023 and December 31, 2022, the Company’s valuation allowance consisted of approximately $4.6 million, net of federal tax benefit, on the deferred tax assets related to state net operating loss carryforwards.

The Company has determined that there are no positions currently taken that would rise to a level requiring an amount to be recorded or disclosed as an unrecognized tax benefit. If such positions do arise, it is the Company’s intent that any interest or penalty amount related to such positions will be recorded as a component of the income tax provision (benefit) in the applicable period.

The Inflation Reduction Act (“IRA”) of 2022 was signed into law on August 16, 2022. This legislation includes a 15% corporate alternative minimum tax and a 1% excise tax on stock repurchases among its key tax provisions effective for years beginning after December 31, 2022. The Company does not anticipate a material impact for either of these provisions.

5. OTHER ACCRUED LIABILITIES

Other accrued liabilities at March 31, 2023 and December 31, 2022, consisted of the following:

	March 31,		December 31,
	2023		2022
	(In thousands)
Accrued interest	$	13,347	$	18,483
Accrued taxes		7,134		3,284
Self-insurance reserve		8,623		8,608
Other		16,731		16,539
Total other accrued liabilities	$	45,835	$	46,914

As of March 31, 2023 and December 31, 2022, other accrued liabilities above includes approximately $10.9 million related to certain contractual liabilities arising from the previously disclosed temporary COVID-19 park closures.

As of March 31, 2023 and December 31, 2022, accrued interest above primarily relates to interest associated with the Company’s first-priority senior secured notes issued in April 2020, for which interest is paid bi-annually in November and May and the senior notes issued in August 2021, for which interest is paid bi-annually in February and August. See further discussion in Note 6–Long-Term Debt.

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SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. LONG-TERM DEBT

Long-term debt, net, as of March 31, 2023 and December 31, 2022 consisted of the following:

	March 31,			December 31,
	2023			2022
	(In thousands)
Term B Loans (effective interest rate of 7.88% and 7.44% at March 31, 2023 and December 31, 2022 respectively)	$	1,182,000		$	1,185,000
Senior Notes due 2029 (interest rate of 5.25%)		725,000			725,000
First-Priority Senior Secured Notes due 2025 (interest rate of 8.75%)		227,500			227,500
Total long-term debt		2,134,500			2,137,500
Less: unamortized discounts and debt issuance costs		(24,899	)		(26,441	)
Less: current maturities		(12,000	)		(12,000	)
Total long-term debt, net	$	2,097,601		$	2,099,059

On August 25, 2021, SEA entered into a Restatement Agreement (the “Restatement Agreement”) pursuant to which SEA amended and restated its existing senior secured credit agreement dated as of December 1, 2009 (as amended, restated, supplemented or otherwise modified from time to time, and the senior secured credit facilities thereunder (the “Existing Secured Credit Facilities”), and, as amended and restated by the Restatement Agreement (the “Amended and Restated Credit Agreement”).

The Amended and Restated Credit Agreement provides for senior secured financing of up to $1,585.0 million, consisting of:

(i)a first lien term loan facility (the “Term Loan Facility” and the loans thereunder, the “Term B Loans”), in an aggregate principal amount of $1,200.0 million which was fully drawn on August 25, 2021. The Term Loan Facility will mature on August 25, 2028; and

(ii)a first lien revolving credit facility (the “Revolving Credit Facility” (and the loans thereunder, the “Revolving Loans”) and, together with the Term Loan Facility, the “Senior Secured Credit Facilities”), in an aggregate committed principal amount of $385.0 million, including both a letter of credit sub-facility and a swingline loan sub-facility. The Revolving Credit Facility will mature on August 25, 2026. On June 9, 2022, SEA entered into an incremental amendment to the Amended and Restated Credit Agreement to increase the revolving facility commitments under the Revolving Credit Facility by $5.0 million bringing the aggregate committed principal amount to $390.0 million as of such date.

Senior Secured Credit Facilities

Borrowings under the Term B Loans bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) a base rate equal to the higher of (a) the federal funds rate plus 1/2 of 1%, (b) the rate of interest quoted in the print edition of the Wall Street Journal Money Rates Section as the prime rate as in effect from time to time and (c) one-month Adjusted LIBOR plus 1% per annum (provided that in no event shall such ABR rate with respect to the Term B Loans be less than 1.50% per annum) (“ABR”), in each case, plus an applicable margin of 2.00% or (ii) a LIBOR rate for the applicable interest period (provided that in no event shall such LIBOR rate with respect to the Term B Loans be less than 0.50% per annum) (“LIBOR”) plus an applicable margin of 3.00%.

Borrowings under the Revolving Loans bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) ABR (provided that in no event shall such ABR rate with respect to the Revolving Loans be less than 1.00% per annum) plus an applicable margin equal to 1.75% or (ii) LIBOR (provided that in no event shall such LIBOR rate with respect to the Revolving Loans be less than 0.00%) plus an applicable margin of 2.75%. The applicable margin for borrowings of Revolving Loans are subject to one 25 basis point step-down upon achievement by the Company of certain corporate credit ratings.

In addition to paying interest on the outstanding principal under the Senior Secured Credit Facilities, the Company is required to pay a commitment fee equal to 0.50% per annum to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder. The Company will also be required to pay customary agency fees as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR rate borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee computed at a rate equal to 0.125% per annum on the daily stated amount of each letter of credit.

The Senior Secured Credit Facilities require scheduled amortization payments on the term loans in quarterly amounts equal to 0.25% of the original principal amount of the Term B Loans, payable quarterly, with the balance to be paid at maturity.

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SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In addition, the Senior Secured Credit Facilities require the Company to prepay outstanding term loan borrowings, subject to certain exceptions, with:

-50% (which percentage will be reduced to 25% and 0% if the Company satisfies certain net first lien senior secured leverage ratios) of annual excess cash flow, as defined under the Senior Secured Credit Facilities;

-100% of the net cash proceeds of all non-ordinary course asset sales or other non-ordinary course dispositions of property, in each case subject to certain exceptions and reinvestment rights;

-100% of the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Senior Secured Credit Facilities.

The Company may voluntarily repay outstanding loans under the Senior Secured Credit Facilities at any time, without prepayment premium or penalty, except in connection with a repricing event in respect of the term loans as described below, subject to customary “breakage” costs with respect to LIBOR rate loans.

All borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including the absence of a default or event of default and the accuracy of representations and warranties in all material respects.

All obligations under the Senior Secured Credit Facilities are unconditionally guaranteed by the Company on a limited-recourse basis and each of SEA’s existing and future direct and indirect wholly owned material domestic subsidiaries, subject to certain exceptions. The obligations are secured by a pledge of SEA’s capital stock directly held by the Company and substantially all of SEA’s assets and those of each guarantor (other than the Company), including a pledge of the capital stock of all entities directly held by SEA or the guarantors, in each case subject to exceptions. Such security interests consist of a first-priority lien with respect to the collateral.

As of March 31, 2023, SEA had approximately $18.4 million of outstanding letters of credit, leaving approximately $371.6 million available under the Revolving Credit Facility, which was not drawn upon as of March 31, 2023.

Senior Notes

On August 25, 2021, SEA completed a private offering of $725.0 million aggregate principal amount of 5.250% senior notes which mature on August 15, 2029 (the “Senior Notes”). Interest on the Senior Notes accrues at 5.250% per annum and is paid semi-annually, in arrears on February 15 and August 15 of each year.

On or after August 15, 2024, SEA may redeem the Senior Notes, in whole at any time or in part from time to time, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12-month period commencing on August 15 of the years as follows: (i) in 2024 at 102.625%; (ii) in 2025 at 101.313%; and (iii) in 2026 and thereafter at 100%. In addition, prior to August 15, 2024, SEA may redeem the Senior Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus the “Applicable Premium” and accrued and unpaid interest, if any, to, but excluding, the redemption date. Notwithstanding the foregoing, subject to the provisions set forth in the Indenture, at any time and from time to time on or prior to August 15, 2024, SEA may redeem in the aggregate up to 40% of the original aggregate principal amount of the Senior Notes (calculated after giving effect to any issuance of additional Senior Notes) in an aggregate amount equal to the net cash proceeds of one or more equity offerings at a redemption price equal to 105.250%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Additionally, upon the occurrence of specified change of control events, each holder will have the right to require SEA to repurchase all or any part of such holder’s notes at a purchase price in cash equal to 101%.

SEA’s obligations under the Senior Notes and related indenture are guaranteed, jointly and severally, on a senior secured basis, by the Guarantors, as defined, in accordance with the provisions of the indenture.

First-Priority Senior Secured Notes

The 8.750% first-priority senior secured notes (the “First-Priority Senior Secured Notes”) mature on May 1, 2025 and have interest payment dates of May 1 and November 1. SEA may redeem the First-Priority Senior Secured Notes at its option, in whole at any time or in part from time to time, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12-month period commencing on May 1 of the years as follows: (i) in 2022 at 104.375%; (ii) in 2023 at 102.188%; and (iii) in 2024 and thereafter at 100%. SEA may also redeem in the aggregate (at a redemption price expressed as a percentage of principal amount thereof): (i) 100% of the First-Priority Senior Secured Notes after certain events constituting a change of control at a redemption price of 101%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date and (ii) up to 40% of the original aggregate principal amount of the First-Priority Senior Secured Notes with amounts equal to the net cash proceeds of certain equity offerings at a redemption price of 108.750%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The First-Priority Senior Secured Notes are fully and unconditionally guaranteed by the Company, any subsidiary of the Company that directly or indirectly owns 100% of the issued and outstanding equity interests of SEA, and subject to certain exceptions, each of SEA’s subsidiaries that guarantees SEA’s existing senior secured credit facilities.

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SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Restrictive Covenants

The Amended and Restated Credit Agreement governing the Senior Secured Credit Facilities and the indentures governing the Senior Notes and First-Priority Senior Secured Notes (collectively, the “Debt Agreements”), contain covenants that limit the ability of the Company, SEA and its restricted subsidiaries to, among other things: (i) incur additional indebtedness or issue certain preferred shares; (ii) make dividend payments on or make other distributions in respect of their capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) create or permit to exist dividend and/or payment restrictions affecting their restricted subsidiaries; (vi) create liens on assets; (vii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; and (viii) enter into certain transactions with their affiliates. These covenants are subject to a number of important limitations and exceptions and are based, in part on the Company’s ability to satisfy certain tests and engage in certain transactions based on Covenant Adjusted EBITDA. Covenant Adjusted EBITDA differs from Adjusted EBITDA due to certain adjustments permitted under the relevant agreements, including but not limited to estimated cost savings, recruiting and retention costs, public company compliance costs, litigation and arbitration costs and other costs and adjustments as permitted under the Debt Agreements.

The Debt Agreements contain certain customary events of default, including relating to a change of control. If an event of default occurs, the lenders under the Debt Agreements will be entitled to take various actions, including the acceleration of amounts due under the Debt Agreements and all actions permitted to be taken by a secured creditor in respect of the collateral securing the Debt Agreements.

The Revolving Credit Facility requires that the Company, subject to a testing threshold, comply on a quarterly basis with a maximum net first lien senior secured leverage ratio of 6.25 to 1.00. The testing threshold will be satisfied (and therefore the covenant must be complied with at the end of such quarter) if the aggregate amount of funded loans and issued letters of credit (excluding up to $30.0 million of undrawn letters of credit under the Revolving Credit Facility and letters of credit that are cash collateralized) under the Revolving Credit Facility on such date exceeds an amount equal to 35% of the then-outstanding commitments under the Revolving Credit Facility.

The Debt Agreements permit an unlimited capacity for restricted payments if the net total leverage ratio on a pro forma basis does not exceed 4.25 to 1.00 after giving effect to the payment of any such restricted payment. As of March 31, 2023, the net total leverage ratio as calculated under the Debt Agreements was 2.71 to 1.00.

As of March 31, 2023, SEA was in compliance with all covenants contained in the documents governing the Debt Agreements.

Long-term debt at March 31, 2023 is repayable as follows and does not include the impact of any future voluntary prepayments:

Years Ending December 31,	(In thousands)
Remainder of 2023	$	9,000
2024		12,000
2025		239,500
2026		12,000
2027		12,000
Thereafter		1,850,000
Total	$	2,134,500

Cash paid for interest relating to the Senior Secured Credit Facilities and the Senior Notes, net of amounts capitalized, as applicable, was $40.0 million and $27.6 million in the three months ended March 31, 2023 and 2022, respectively.

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SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

7. FAIR VALUE MEASUREMENTS

Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement is required to be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Of the Company’s long-term obligations as of March 31, 2023 and December 31, 2022, the Term B Loans are classified in Level 2 of the fair value hierarchy and the First-Priority Senior Secured Notes and the Senior Notes are classified in Level 1 of the fair value hierarchy. The fair value of the Term B Loans approximates their carrying value, excluding unamortized debt issuance costs and discounts, due to the variable nature of the underlying interest rates and the frequent intervals at which such interest rates are reset. The fair value of the First-Priority Senior Secured Notes and Senior Notes was determined using quoted prices in active markets for identical instruments. See Note 6–Long-Term Debt for further details.

The Company did not have any assets measured on a recurring basis at fair value at March 31, 2023 and December 31, 2022. The Company maintains its long-term liabilities at carrying value, net of unamortized debt issuance costs and discounts in the unaudited condensed consolidated balance sheet.

The following table presents the Company’s estimated fair value measurements and related classifications for liabilities measured on a recurring basis as of March 31, 2023.

	Quoted Prices in
	Active Markets		Significant
	for Identical		Other		Significant
	Assets and		Observable		Unobservable		Balance at
	Liabilities		Inputs		Inputs		March 31,
	(Level 1)		(Level 2)		(Level 3)		2023
Liabilities:	(In thousands)
Long-term obligations (a)	$	866,425	$	1,182,000	$	—	$	2,048,425

(a) Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $12.0 million and long-term debt, net, of $2.098 billion as of March 31, 2023.

The following table presents the Company’s estimated fair value measurements and related classifications for liabilities measured on a recurring basis as of December 31, 2022:

	Quoted Prices in
	Active Markets		Significant
	for Identical		Other		Significant
	Assets and		Observable		Unobservable		Balance at
	Liabilities		Inputs		Inputs		December 31,
	(Level 1)		(Level 2)		(Level 3)		2022
Liabilities:	(In thousands)
Long-term obligations (a)	$	873,675	$	1,185,000	$	—	$	2,058,675

(a) Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $12.0 million and long-term debt, net, of $2.099 billion as of December 31, 2022.

16

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Sesame Workshop Arbitration

On February 4, 2022, Sesame Workshop delivered notice asserting that the Company failed to pay an additional royalty payment for 2021 under its licensing agreement with the Company (the “Licensing Agreement”). The Company had previously recorded the additional amount claimed but disputes the application and calculation of the additional payment. The amount accrued is the Company’s best estimate and, at this time, the Company does not anticipate any exposure to loss in excess of amounts accrued to be material. On June 27, 2022, Sesame Workshop initiated arbitration pursuant to the License Agreement. Oral arguments for the parties’ positions were held before the arbitration panel during the week of March 6, 2023, and the parties are currently awaiting a decision from the panel. The Company intends to vigorously defend its position.

Other Lawsuits

In October 2018, the Company received a demand letter from attorneys representing certain former employees who claim that the terms of their respective separation agreements entitle them to certain favorable modifications made to certain performance-vesting restricted shares (the “Tranche 3 Shares”) issued under the Company’s 2013 Omnibus Incentive Plan (the “Plan”).
 

In November 2020, the Company filed in the Court of Chancery of the State of Delaware an action for declaratory judgment seeking a determination that the threatened claims of the former employees are time-barred and without merit. In response, the defendant former employees filed a motion to dismiss or in the alternative to stay and compel arbitration. The parties agreed to arbitrate whether the former employees’ claims are subject to arbitration. On October 21, 2021, the arbitrator determined that disputes related to the former employees’ claims for the vesting of the Tranche 3 Shares are governed by the forum selection clauses of the equity award amendments rather than the Company’s dispute resolution process and notice of the arbitrator’s decision was filed with the Court of Chancery. On August 10, 2022, the defendant former employees filed answers, affirmative defenses and counterclaims. On October 10, 2022, the Company filed motions for judgment on the pleadings and to dismiss the counterclaims. The defendant former employees opposed the motions, on November 17, 2022, and the Company filed its reply brief on December 22, 2022. Oral arguments for the parties’ motions and counterclaims were held before the Court of Chancery, on March 29, 2023. In terms of potential exposure, the value of the total shares at issue for these certain former employees depends largely upon the Company’s current share price, which fluctuates daily. Approximately 300,000 shares are at issue. The Company believes that the former employees’ claims are without merit and intends to defend vigorously its positions. While there can be no assurance regarding the ultimate outcome of this matter, the Company believes that any potential loss would not be material.

On July 27, 2022, a purported class action was filed in the United States District Court for the Eastern District of Pennsylvania against the Company captioned Quinton Burns individually and Next Friend of K.B., a minor v. SeaWorld Parks & Entertainment, Inc. and SeaWorld Parks & Entertainment LLC, Civil Case No. 2:22-cv-09941. The complaint states the putative class consists of Quinton Burns and K.B. Burns and similarly situated Black people. Plaintiffs then filed an amended complaint adding an additional seven adult and seven minor class representative plaintiffs in which they allege the class consists of themselves and similarly situated minority persons and also disclosed an additional 89 families and 125 children represented by Plaintiffs’ counsel who are allegedly members of the purported class (the "First Amended Complaint"). The First Amended Complaint alleges the Company engaged in disparate treatment of Class members based on their race and in so doing violated the Civil Rights Act of 1866 and Pennsylvania common law. The First Amended Complaint seeks compensatory and punitive damages and attorneys’ fees and costs as well declarative and injunctive relief. The parties are engaged in discovery. The Company has filed a motion to dismiss all counts. The Company has also filed a motion to strike certification of the class. The Company believes that the lawsuit is without merit and intends to defend the lawsuit vigorously. While there can be no assurance regarding the ultimate outcome of the litigation, the Company believes a potential loss, if any, would not be material.

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SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Other Matters

The Company is a party to various other claims and legal proceedings arising in the normal course of business. In addition, from time to time the Company is subject to audits, inspections and investigations by, or receives requests for information from, various federal and state regulatory agencies, including, but not limited to, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (“APHIS”), the U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”), the California Occupational Safety and Health Administration (“Cal-OSHA”), the Florida Fish & Wildlife Commission (“FWC”), the Equal Employment Opportunity Commission (“EEOC”), the Internal Revenue Service (“IRS”) the U.S. Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”).

Other than those matters discussed above, from time to time, various parties also bring other lawsuits against the Company. Matters where an unfavorable outcome to the Company is probable and which can be reasonably estimated are accrued. Such accruals, which are not material for any period presented, are based on information known about the matters, the Company’s estimate of the outcomes of such matters, and the Company’s experience in contesting, litigating and settling similar matters. Matters that are considered reasonably possible to result in a material loss are not accrued for, but an estimate of the possible loss or range of loss is disclosed, if such amount or range can be determined. At this time, management does not expect any such known claims, legal proceedings or regulatory matters to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

License Commitments

Pursuant to the License Agreement with Sesame Workshop, the Company pays a specified annual license fee, as well as a specified royalty based on revenues earned in connection with sales of licensed products, all food and beverage items utilizing the licensed elements and any events utilizing such elements if a separate fee is paid for such event. The Company’s principal commitments pursuant to the License Agreement include, among other items, the opening of a second standalone park (“Standalone Park”) (the Company opened the Standalone Park in San Diego on March 26, 2022) and minimum annual capital and marketing thresholds. After the opening of the second Standalone Park (counting the existing Sesame Place Standalone Park in Langhorne, Pennsylvania), SEA has the option to build additional Standalone Parks in the Sesame Territory within agreed upon timelines. The License Agreement has an initial term through December 31, 2031, with an automatic additional 15-year extension plus a five-year option added to the term of the License Agreement from December 31st of the year of each new Standalone Park opening. As of March 31, 2023, the Company estimates the combined remaining liabilities and obligations for the License Agreement commitments could be up to approximately $25.0 million over the remaining term of the agreement. See further discussion concerning royalty payments for the year 2021 in the "Sesame Workshop Arbitration" section above.

Anheuser-Busch, Incorporated ("ABI") has granted the Company a perpetual, exclusive, worldwide, royalty-free license to use the Busch Gardens trademark and certain related domain names in connection with the operation, marketing, promotion and advertising of certain of the Company’s theme parks, as well as in connection with the production, use, distribution and sale of merchandise sold in connection with such theme parks. Under the license, the Company is required to indemnify ABI against losses related to the use of the marks.

9. EQUITY-BASED COMPENSATION

In accordance with ASC 718, Compensation-Stock Compensation, the Company measures the cost of employee services rendered in exchange for share-based compensation based upon the grant date fair market value. The cost is recognized over the requisite service period, which is generally the vesting period unless service or performance conditions require otherwise. The Company recognizes the impact of forfeitures as they occur.

Equity compensation expense is included in operating expenses and in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations as follows:

	For the Three Months Ended March 31,
	2023		2022
	(In thousands)
Equity compensation expense included in operating expenses	$	534	$	1,965
Equity compensation expense included in selling, general and administrative expenses		3,948		5,017
Total equity compensation expense	$	4,482	$	6,982

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SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Omnibus Incentive Plan

The Company has reserved 15.0 million shares of common stock for issuance under its Omnibus Incentive Plan (the “Omnibus Incentive Plan”), of which approximately 7.3 million shares are available for future issuance as of March 31, 2023.

Bonus Performance Restricted Units

The Company had an annual bonus plan for the fiscal year ended December 31, 2022 (“Fiscal 2022”), under which certain employees were eligible to vest in Bonus Performance Restricted Units based upon the Company’s achievement of certain performance goals with respect to Fiscal 2022. Based on the Company’s actual Fiscal 2022 results, a portion of these Bonus Performance Restricted Units vested and were converted into approximately 20,000 shares in the three months ended March 31, 2023 and the remaining unvested units forfeited in accordance with their terms.

Long-term Incentive Performance Restricted Awards

Subsequent to March 31, 2023, the Company approved long-term incentive plan awards for 2023 (the “2023 Long-Term Incentive Grant”) which will be granted later in the second quarter and will be comprised of nonqualified stock options (the “Long-Term Incentive Options”) and performance-vesting restricted units (the “Long-Term Incentive Performance Restricted Units”) (collectively, the “Long-Term Incentive Awards”).

Long-Term Incentive Options

The Long-Term Incentive Options will vest over three years, with one-third vesting on each anniversary of the date of grant, subject to continued employment through the applicable vesting date. Equity compensation expense for these options will be recognized for each tranche over the vesting period using the straight-line method. Upon stock option exercises, authorized but unissued shares will be issued by the Company.

Long-Term Incentive Performance Restricted Units

The Long-Term Incentive Performance Restricted Units are eligible to vest during the three-year performance period beginning on January 1, 2023 and ending on December 31, 2025 (or, extended through December 31, 2026, as applicable) (the “Performance Period”) based upon the Company’s achievement of specified performance goals during the Performance Period. The total number of Long-Term Incentive Performance Restricted Units eligible to vest will be based on the level of achievement of the performance goals and ranges from 0% (if below threshold performance) up to 150% (for maximum performance). Upon achievement of at least the threshold performance goals, 50% of the award for a given level of performance will vest, with the remaining 50% subject to a one-year performance test period. Performance for the test period must meet or exceed the prior year’s performance before up to the remaining 50% of the units can be earned.

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SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Other

During the three months ended March 31, 2023, a portion of the previously granted long-term incentive performance restricted units under the 2019 Long-Term Incentive Plan vested based on the Company’s actual Fiscal 2022 results. The remainder of the 2019 Long-Term Incentive Plan awards are eligible to vest in 2024.

The Company recognizes equity compensation expense for its performance-vesting restricted awards ratably over the related performance period, if the performance condition is probable of being achieved. If the probability of vesting changes for performance-vesting restricted awards in a subsequent period, all equity compensation expense related to those awards that would have been recorded, if any, over the requisite service period had the new percentage been applied from inception, will be recorded as a cumulative catch-up or reduction at such subsequent date.

10. STOCKHOLDERS’ DEFICIT

As of March 31, 2023, 96,496,784 shares of common stock were issued in the accompanying unaudited condensed consolidated balance sheet, which includes 32,376,539 shares of treasury stock held by the Company (see Share Repurchase Programs discussion which follows) but excludes 1,214,561 unvested restricted stock awards held by certain participants in the Company’s equity compensation plans or members of the Board (see Note 9–Equity-Based Compensation).

Share Repurchase Programs

The Board had previously authorized a share repurchase program of up to $250.0 million of the Company’s common stock (the “Former Share Repurchase Program”). On March 10, 2022, the Board approved a replenishment to the Former Share Repurchase Program of $228.2 million, bringing the total amount authorized for future share repurchases back up to $250.0 million. During the three months ended March 31, 2022, the Company repurchased 1,535,427 shares for an aggregate total of approximately $109.9 million. As of March 31, 2023, there is no amount remaining under the Former Share Repurchase Program.

In August 2022, the Board approved a new $250.0 million share repurchase program (the “Share Repurchase Program”) of which approximately $56.4 million remained available as of March 31, 2023. Subsequent to March 31, 2023, the Company repurchased 235,000 shares for an aggregate total of approximately $13.9 million, leaving approximately $42.4 million remaining under the Share Repurchase Program as of May 4, 2023.

Under the Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The Share Repurchase Program has no time limit and may be suspended or discontinued completely at any time. The number of shares to be purchased and the timing of purchases will be based on the Company’s trading windows and available liquidity, general business and market conditions, and other factors, including legal requirements, share ownership thresholds, debt covenant restrictions, future tax implications and alternative investment opportunities.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References to our “theme parks” or “parks” in the discussion that follows includes all of our separately gated parks. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including, but not limited to, those described in the “Risk Factors” section of our Annual Report on Form 10-K, as such risk factors may be updated from time to time in our periodic filings with the SEC. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q.

Introduction

The following discussion and analysis is intended to facilitate an understanding of our business and results of operations and should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. This discussion should also be read in conjunction with our consolidated financial statements and related notes thereto, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended December 31, 2022.

Business Overview

We are a leading theme park and entertainment company providing experiences that matter and inspiring guests to protect animals and the wild wonders of our world. We own or license a portfolio of recognized brands, including SeaWorld, Busch Gardens, Aquatica, Discovery Cove and Sesame Place. Over our more than 60-year history, we have developed a diversified portfolio of 12 differentiated theme parks that are grouped in key markets across the United States. Many of our theme parks showcase our one-of-a-kind zoological collection and feature a diverse array of both thrill and family-friendly rides, educational presentations, shows and/or other attractions with broad demographic appeal which deliver memorable experiences and a strong value proposition for our guests.

Recent Developments

Current Operating Environment

Our Board has formed a number of committees and held certain meetings and operational review sessions designed to provide further assistance from Board members with expertise in certain areas by providing enhanced oversight over the operations of the Company. As a result, in the current operating environment, certain members of our Board, including our Chairman of the Board, are actively involved in overseeing certain key operating activities and decisions.

The current condition of the overall labor market, including wage inflationary pressures and the challenging current operating environment has led to increased turnover throughout the company and challenges in meeting our staffing goals in certain parts of our operations. These staffing challenges have also led to wage pressures and less than optimal staffing levels, which have impacted and could continue to impact our ability to open some of our food and beverage and retail outlets, caused us to temporarily close some rides or attractions, and/or caused longer wait times in certain areas of our parks, which has and could continue to impact the guest experience. To address these items, we continue our efforts to recruit and retain talent, optimize staffing levels and focus on park operations from the guest perspective, among other initiatives. We have also been impacted by significant inflationary pressures (particularly relating to the costs for labor, goods, freight, services and capital projects), supply chain disruptions (which has, at times, impacted ride availability) and higher interest rates. We have heightened our focus on cost reduction and efficiency opportunities as well as incremental pricing and revenue opportunities to help offset cost pressures.

For further discussion relating to strategic measures we have taken to operate in the current environment, see the “Results of Operations” section which follows.

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Principal Factors and Trends Affecting Our Results of Operations

Revenues

Our revenues are driven primarily by attendance in our theme parks and the level of per capita spending for admission and per capita spending for food and beverage, merchandise and other in-park products. We define attendance as the number of guest visits. Attendance drives admissions revenue as well as total in-park spending. Admissions revenue primarily consists of single-day tickets, annual passes (which generally expire after a 12-month term), season passes (including our fun card products and, collectively with annual passes, referred to as “passes” or “season passes”) or other multi-day or multi-park admission products. Revenue from these admissions products are generally recognized based on attendance. Certain pass products are purchased through monthly installment arrangements which allow guests to pay over the product’s initial commitment period. Once the initial commitment period is reached, some of these products transition to a month-to-month basis providing these guests access to specific parks on a monthly basis with related revenue recognized monthly, while others can renew for a full commitment period.

Total revenue per capita, defined as total revenue divided by total attendance, consists of admission per capita and in-park per capita spending:

•Admission Per Capita. We calculate admission per capita as total admissions revenue divided by total attendance. Admission per capita is primarily driven by ticket pricing, the admissions product mix (including the impact of pass visitation rates), and the park attendance mix, among other factors. The admissions product mix, also referred to as the attendance or visitation mix, is defined as the mix of attendance by ticket category such as single day, multi-day, annual/season passes or complimentary tickets/passes and can be impacted by the mix of guests, as domestic and international guests generally purchase higher admission per capita ticket products than our local guests. A higher mix of attendance from complimentary tickets/passes will lower admissions per capita. Pass visitation rates are the number of visits per pass. A higher number of visits per pass, including complimentary passes, would yield a lower admissions per capita as the revenue is recognized over more visits. The park attendance mix is defined as the mix of theme parks visited and can impact admission per capita based on the theme park’s respective pricing which, on average, is lower for our water parks compared to our other theme parks.

•In-Park Per Capita Spending. We calculate in-park per capita spending as total food, merchandise and other revenue divided by total attendance. Food, merchandise and other revenue primarily consists of food and beverage, merchandise, retail, parking, other in-park products and service fees, and other miscellaneous revenue, including online transaction fees and revenue from our international agreements, not necessarily generated in our parks, which is not significant in the periods presented. In-park per capita spending is primarily driven by pricing, product offerings, the mix of guests (as domestic and international guests typically generate higher in-park per capita spending than local guests or pass holders), guest penetration levels (percentage of guests purchasing) and the mix of in-park spending, among other factors.

Total revenue per capita, admissions per capita and in-park per capita spending are key performance metrics that we use to assess the operating performance of our parks on a per attendee basis and to make strategic operating decisions. We believe the presentation of these performance metrics is useful and relevant for investors as it provides investors the ability to review operating performance in the same manner as our management and provides investors with a consistent methodology to analyze revenue between periods on a per attendee basis. In addition, investors, lenders, financial analysts and rating agencies have historically used similar per-capita related performance metrics to evaluate companies in the industry.

See further discussion in the “Results of Operations” section which follows and in Note 1–Description of the Business and Basis of Presentation to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. For other factors affecting our revenues, see the “Risk Factors” section of our Annual Report on Form 10-K, as such risk factors may be updated from time to time in our periodic filings with the SEC.

Attendance

The level of attendance in our theme parks is generally a function of many factors, including affordability, the opening of new attractions and shows, competitive offerings, weather, marketing and sales efforts, awareness and type of ticket and park offerings, travel patterns of both our domestic and international guests, fluctuations in foreign exchange rates and global and regional economic conditions, consumer confidence, the external perceptions of our brands and reputation, industry best practices and perceptions as to safety. The external perceptions of our brands and reputation have at times impacted relationships with some of our business partners, including certain ticket resellers that have terminated relationships with us and other zoological-themed attractions.

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Costs and Expenses

Historically, the principal costs of our operations are employee wages and benefits, driven partly by staffing levels, advertising, maintenance, animal care, utilities, property taxes and insurance. Factors that affect our costs and expenses include fixed operating costs, competitive wage pressures including minimum wage legislation, commodity prices, costs for construction, repairs and maintenance, park operating hours, new parks and/or incremental operating days, new and/or enhanced events, attendance levels, supply chain issues, and inflationary pressures, among other factors. The mix of products sold compared to the prior year period can also impact our costs as retail products generally have a higher cost of sales component than our food and beverage or other in-park offerings.

We have a dedicated team of employees and consultants focused on reducing costs and improving operating margins and streamlining our labor structure to better align with our strategic business objectives. We have spent significant time reviewing our operations and have identified meaningful cost savings opportunities, including technology initiatives, which we believe will further strengthen our business and, in some instances, improve guest experiences.

See the “Current Operating Environment” section for further details. For other factors affecting our costs and expenses, see the “Risk Factors” section of our Annual Report on Form 10-K, as such risk factors may be updated from time to time in our periodic filings with the SEC.

Seasonality

The theme park industry is seasonal in nature. Historically, we generate the highest revenues in the second and third quarters of each year, in part because four of our theme parks were historically only open for a portion of the year. As a result, approximately two-thirds of our attendance and revenues were historically generated in the second and third quarters of the year and we generally incurred a net loss in the first quarter. The percent mix of revenues by quarter is relatively constant each year, but revenues can shift between the first and second quarters due to the timing of Easter and spring break holidays and between the first and fourth quarters due to the timing of holiday breaks around Christmas and New Year. Even for our eight theme parks which have historically been open year-round, attendance patterns have significant seasonality, driven by holidays, school vacations and weather conditions. Changes in school calendars that impact traditional school vacation breaks could also impact attendance patterns.

Any changes to the operating schedule of a park such as increasing operating days for our historically seasonal parks, could change the impact of seasonality in the future. In the year ended December 31, 2022, we opened our Sesame Place San Diego park which has been, and is expected to continue to be, open more operating days than the Aquatica San Diego park it replaced, particularly in the first and fourth quarters of the year. Incremental operating days generally are expected to drive incremental attendance and revenue.

See “Risk Factors” section of our Annual Report on Form 10-K, as such risk factors may be updated from time to time in our periodic filings with the SEC.

Results of Operations

The following discussion provides an analysis of our operating results for the three months ended March 31, 2023 and 2022. The following data should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

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Comparison of the Three Months Ended March 31, 2023 to the Three Months Ended March 31, 2022

The following table presents key operating and financial information for the three months ended March 31, 2023 and 2022:

	For the Three Months Ended
	March 31,						Variance
	2023			2022			$			%
Summary Financial Data:	(In thousands, except per capita data and %)
Net revenues:
Admissions	$	163,863		$	150,862		$	13,001			8.6	%
Food, merchandise and other		129,483			119,831			9,652			8.1	%
Total revenues		293,346			270,693			22,653			8.4	%
Costs and expenses:
Cost of food, merchandise and other revenues		23,221			23,040			181			0.8	%
Operating expenses (exclusive of depreciation and amortization shown separately below)		172,674			152,925			19,749			12.9	%
Selling, general and administrative expenses		48,281			46,059			2,222			4.8	%
Severance and other separation costs		4			30			(26	)		(86.7	%)
Depreciation and amortization		37,394			38,612			(1,218	)		(3.2	%)
Total costs and expenses		281,574			260,666			20,908			8.0	%
Operating income		11,772			10,027			1,745			17.4	%
Other expense (income), net		46			(12	)		58		NM
Interest expense		36,401			25,370			11,031			43.5	%
Loss before income taxes		(24,675	)		(15,331	)		(9,344	)		(60.9	%)
Benefit from income taxes		(8,208	)		(6,344	)		(1,864	)		(29.4	%)
Net Loss	$	(16,467	)	$	(8,987	)	$	(7,480	)		(83.2	%)
Other data:
Attendance		3,378			3,403			(25	)		(0.7	%)
Total revenue per capita	$	86.84		$	79.54		$	7.30			9.2	%
Admission per capita	$	48.51		$	44.33		$	4.18			9.4	%
In-park per capita spending	$	38.33		$	35.21		$	3.12			8.9	%

NM-Not Meaningful.

Admissions revenue. Admissions revenue for the three months ended March 31, 2023 increased $13.0 million, or 8.6%, to $163.9 million as compared to $150.9 million for the three months ended March 31, 2022. The improvement was primarily a result of an increase in admissions per capita, partially offset by a decrease in attendance. Total attendance for the first quarter of 2023 decreased by approximately twenty-five thousand guests, or 0.7%, when compared to the prior year quarter. The decrease in attendance was primarily due to adverse weather across a number of our markets, particularly at our California parks, including during peak visitation periods. Attendance was also likely impacted unfavorably by the timing of new ride openings in 2023 compared with 2022. Admission per capita increased by 9.4% to $48.51 for the first quarter of 2023 compared to $44.33 in the prior year quarter, primarily due to the realization of higher prices in our admission products resulting from our strategic pricing efforts, along with the net impact of the admissions product mix when compared to the prior year quarter.

Food, merchandise and other revenue. Food, merchandise and other revenue for the three months ended March 31, 2023 increased $9.7 million, or 8.1%, to $129.5 million as compared to $119.8 million for the three months ended March 31, 2022, as a result of an increase in revenue related to our international services agreements and an increase in in-park per capita spending, partially offset by a decrease in attendance, as discussed above. In-park per capita spending increased by 8.9% to $38.33 in the first quarter of 2023 compared to $35.21 in the first quarter of 2022. In park per capita spending improved primarily due to an increase in revenue related to our international services agreements and pricing initiatives when compared to the first quarter of 2022. See Note 1–Description of the Business and Basis of Presentation in our notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information on our international services agreements.

Costs of food, merchandise and other revenues. Costs of food, merchandise and other revenues for the three months ended March 31, 2023 increased $0.2 million, or 0.8%, to $23.2 million as compared to $23.0 million for the three months ended March 31, 2022, primarily due to the increase in related revenue.

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Operating expenses. Operating expenses for the three months ended March 31, 2023 increased $19.7 million, or 12.9%, to $172.7 million as compared to $152.9 million for the three months ended March 31, 2022. The increase in operating expenses is primarily due to an increase in costs associated with our international services agreements, increased labor-related costs due to more optimal staffing, and an increase in legal costs, including approximately $3.5 million related to the previously disclosed temporary COVID-19 park closures, partially offset by structural cost savings initiatives when compared to the first quarter of 2022.

Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended March 31, 2023 increased $2.2 million, or 4.8%, to $48.3 million as compared to $46.1 million for the three months ended March 31, 2022. The increase in selling, general and administrative expenses is primarily due to a $3.6 million increase in third-party consulting costs, including approximately $1.7 million of non-recurring costs, partially offset by decreased marketing-related costs along with the impact of cost savings and efficiency initiatives.

Depreciation and amortization. Depreciation and amortization expense for the three months ended March 31, 2023 decreased $1.2 million, or 3.2%, to $37.4 million as compared to $38.6 million for the three months ended March 31, 2022. The decrease primarily relates to the impact of asset retirements and fully depreciated assets, partially offset by new asset additions.

Interest expense. Interest expense for the three months ended March 31, 2023 increased $11.0 million, or 43.5%, to $36.4 million as compared to $25.4 million for the three months ended March 31, 2022. The increase primarily relates to increased interest rates on variable rate debt.

Benefit from income taxes. Benefit from income taxes in the three months ended March 31, 2023 was $8.2 million compared to $6.3 million for the three months ended March 31, 2022. Our consolidated effective tax rate was 33.3% for the three months ended March 31, 2023 compared to 41.4% for the three months ended March 31, 2022. The effective tax rate in the three months ended March 31, 2023 was primarily impacted by a tax benefit related to equity-based compensation which vested during the quarter. The effective tax rate in the three months ended March 31, 2022 was primarily impacted by a tax benefit related to equity-based compensation which vested during the quarter.

Liquidity and Capital Resources

Overview

Generally, our principal sources of liquidity are cash generated from operations, funds from borrowings and existing cash on hand. Our principal uses of cash typically include the funding of working capital obligations, debt service, investments in theme parks (including capital projects), share repurchases and/or other return of capital to stockholders, when permitted. As of March 31, 2023, we had a working capital ratio (defined as current assets divided by current liabilities) of 0.5. We typically have operated with a working capital ratio of less than 1 due to a significant deferred revenue balance from revenues paid in advance for our theme park admissions products and high turnover of in-park products that result in limited inventory balances. Our cash flow from operations, along with our revolving credit facilities, have historically allowed us to meet our liquidity needs.

As market conditions warrant and subject to our contractual restrictions and liquidity position, we or our affiliates, may from time to time purchase our outstanding equity and/or debt securities, including our outstanding bank loans in privately negotiated or open market transactions, by tender offer or otherwise. Any such purchases may be funded by incurring new debt, including additional borrowings under our Senior Secured Credit Facilities. Any new debt may also be secured debt. We may also use available cash on our balance sheet. The amounts involved in any such transactions, individually or in the aggregate, may be material. Further, since some of our debt may trade at a discount to the face amount among current or future syndicate members, any such purchases may result in our acquiring and retiring a substantial amount of any particular series, with the attendant reduction in the trading liquidity of any such series. Depending on conditions in the credit and capital markets and other factors, we will, from time to time, consider other financing transactions, the proceeds of which could be used to refinance our indebtedness or for other purposes.

Share Repurchases

See Note 10–Stockholders’ Deficit in our notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further information on our share repurchase programs.

Other

We believe that existing cash and cash equivalents, cash flow from operations, and available borrowings under our revolving credit facility will be adequate to meet the capital expenditures, debt service obligations and working capital requirements of our operations for at least the next 12 months.

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The following table presents a summary of our cash flows provided by (used in) operating, investing, and financing activities for the periods indicated:

	For the Three Months Ended March 31,
	2023			2022
	(In thousands)
Net cash provided by operating activities	$	50,296		$	70,794
Net cash used in investing activities		(69,758	)		(35,110	)
Net cash used in financing activities		(8,097	)		(99,558	)
Net decrease in cash and cash equivalents, including restricted cash	$	(27,559	)	$	(63,874	)

Cash Flows from Operating Activities

Net cash provided by operating activities was $50.3 million during the three months ended March 31, 2023 as compared to $70.8 million during the three months ended March 31, 2022. The change in net cash provided by operating activities was primarily impacted by increased interest payments.

Cash Flows from Investing Activities

Investing activities consist principally of capital investments we make in our theme parks for future attractions and infrastructure. Net cash used in investing activities during the three months ended March 31, 2023 consisted of capital expenditures of $69.8 million largely related to future attractions. Net cash used in investing activities during the three months ended March 31, 2022 consisted of $35.1 million of capital expenditures.

The following table presents detail of our capital expenditures for the periods indicated:

	For the Three Months Ended March 31,
	2023		2022
Capital Expenditures:	(Unaudited, in thousands)
Core(a)	$	56,268	$	23,020
Expansion/ROI projects(b)		13,490		12,090
Capital expenditures, total	$	69,758	$	35,110

(a) Reflects capital expenditures for park rides, attractions and maintenance activities.

(b) Reflects capital expenditures for park expansion, new properties, and revenue and/or expense return on investment (“ROI”) projects.

The amount of our capital expenditures may be affected by general economic and financial conditions, among other things, including restrictions imposed by our borrowing arrangements. Historically, we generally expect to fund our capital expenditures through our operating cash flow.

Cash Flows from Financing Activities

Net cash used in financing activities during the three months ended March 31, 2023 results primarily from payment of tax withholdings on equity-based compensation through shares withheld of $5.6 million. Net cash used in financing activities during the three months ended March 31, 2022 results primarily from share repurchases of $89.7 million and payment of tax withholdings on equity-based compensation through shares withheld of $7.7 million. See Note 10–Stockholders’ Deficit in our notes to the unaudited condensed consolidated financial statements for further details.

Our Indebtedness

We are a holding company and conduct our operations through our subsidiaries, which have incurred or guaranteed indebtedness as described below. As of March 31, 2023, our indebtedness consisted of senior secured credit facilities, 8.75% first-priority senior secured notes (the “First-Priority Senior Secured Notes”) and 5.25% senior notes (the “Senior Notes”).

See discussion which follows and Note 6–Long-Term Debt in our notes to the unaudited condensed consolidated financial statements for further details related to our long-term debt.

Senior Secured Credit Facilities

SeaWorld Parks & Entertainment, Inc. (“SEA”) is the borrower under the senior secured credit facilities, as amended and restated pursuant to a credit agreement (the “Amended and Restated Credit Agreement”) dated August 25, 2021 (the “Senior Secured Credit Facilities”).

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As of March 31, 2023, our Senior Secured Credit Facilities consisted of $1.182 billion in Term B Loans which will mature in August 2028, along with a $390.0 million Revolving Credit Facility, which had no amounts outstanding as of March 31, 2023 and will mature in August 2026. As of March 31, 2023, SEA had approximately $18.4 million of outstanding letters of credit, leaving approximately $371.6 million available for borrowing under the Revolving Credit Facility.

Senior Notes and First-Priority Senior Secured Notes

As of March 31, 2023, SEA had outstanding $725.0 million in aggregate principal amount of Senior Notes due on August 15, 2029 and $227.5 million in aggregate principal amount of First-Priority Senior Secured Notes, due on May 1, 2025.

Covenant Compliance

As of March 31, 2023, we were in compliance with all covenants in the credit agreement governing the Senior Secured Credit Facilities and the indentures governing our Senior Notes and First-Priority Senior Secured Notes. See Note 6–Long-Term Debt to our unaudited condensed consolidated financial statements for further details relating to our restrictive covenants.

Adjusted EBITDA

We define Adjusted EBITDA as net (loss) income plus (i) income tax (benefit) provision, (ii) loss on extinguishment of debt, (iii) interest expense, consent fees and similar financing costs, (iv) depreciation and amortization, (v) equity-based compensation expense, (vi) certain non-cash charges/credits including those related to asset disposals and self-insurance reserve adjustments, (vii) certain business optimization, development and strategic initiative costs, (viii) merger, acquisition, integration and certain investment costs, and (ix) other nonrecurring costs including incremental costs associated with the COVID-19 pandemic or similar unusual events.

Under the credit agreement governing the Senior Secured Credit Facilities and the indentures governing our Senior Notes and First-Priority Senior Secured Notes (collectively, the “Debt Agreements”), our ability to engage in activities such as incurring additional indebtedness, making investments, refinancing certain indebtedness, paying dividends and entering into certain merger transactions is governed, in part, by our ability to satisfy tests based on Covenant Adjusted EBITDA as defined in the Debt Agreements (“Covenant Adjusted EBITDA”).

Covenant Adjusted EBITDA is defined as Adjusted EBITDA plus certain other items as defined in the Debt Agreements, including estimated cost savings among other adjustments. Cost savings represent annualized estimated savings expected to be realized over the following 24 month period related to certain specified actions including restructurings and cost savings initiatives, net of actual benefits realized during the last twelve months. Other adjustments include (i) recruiting and retention costs, (ii) public company compliance costs, (iii) litigation and arbitration costs, and (iv) other costs and adjustments as permitted by the Debt Agreements.

We believe that the presentation of Adjusted EBITDA is appropriate as it eliminates the effect of certain non-cash and other items not necessarily indicative of a company’s underlying operating performance. We use Adjusted EBITDA in connection with certain components of our executive compensation program. In addition, investors, lenders, financial analysts and rating agencies have historically used EBITDA related measures in our industry, along with other measures, to estimate the value of a company, to make informed investment decisions and to evaluate companies in the industry. In addition, we believe the presentation of Covenant Adjusted EBITDA for the last twelve months is appropriate as it provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Debt Agreements. See Note 6–Long-Term Debt to our unaudited condensed consolidated financial statements for further details relating to our restrictive covenants.

Adjusted EBITDA and Covenant Adjusted EBITDA are not recognized terms under accounting principles generally accepted in the United States of America (“GAAP”), should not be considered in isolation or as a substitute for a measure of our financial performance prepared in accordance with GAAP and are not indicative of income or loss from operations as determined under GAAP. Adjusted EBITDA, Covenant Adjusted EBITDA and other non-GAAP financial measures have limitations which should be considered before using these measures to evaluate our financial performance. Adjusted EBITDA and Covenant Adjusted EBITDA as presented by us, may not be comparable to similarly titled measures of other companies due to varying methods of calculation.

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The following table reconciles Adjusted EBITDA and Covenant Adjusted EBITDA to net (loss) income for the periods indicated:

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
	For the Three Months Ended March 31,						Last Twelve Months Ended March 31,
	2023			2022			2023
	(Unaudited, in thousands)
Net (loss) income	$	(16,467	)	$	(8,987	)	$	283,710
(Benefit from) provision for income taxes		(8,208	)		(6,344	)		97,019
Interest expense		36,401			25,370			128,532
Depreciation and amortization		37,394			38,612			151,402
Equity-based compensation expense (a)		5,205			7,877			17,085
Loss on impairment or disposal of assets and certain non-cash expenses (b)		3,667			4,604			13,281
Business optimization, development and strategic initiative costs (c)		9,425			3,604			25,667
Certain investment costs and other taxes		48			401			775
COVID-19 related incremental costs(d)		3,583			350			9,922
Other adjusting items		1,364			453			7,324
Adjusted EBITDA(e)	$	72,412		$	65,940		$	734,717
Items added back to Covenant Adjusted EBITDA, as defined in the Debt Agreements:
Estimated cost savings (f)								23,300
Other adjustments as defined in the Debt Agreements (g)								9,342
Covenant Adjusted EBITDA (h)							$	767,359

(a) Reflects non-cash equity compensation expenses and related payroll taxes associated with the grants of equity-based compensation. See Note 9–Equity-Based Compensation in our notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

(b) Includes approximately $2.3 million, $3.9 million and $4.9 million related to non-cash self-insurance reserve adjustments for the three months ended March 31, 2023 and 2022 and twelve months ended March 31, 2023, respectively. For the three months ended March 31, 2023 and 2022 and for the twelve months ended March 31, 2023, also includes non-cash expenses related to asset write-offs and costs related to certain rides and equipment which were removed from service.

(c) For the three and twelve months ended March 31, 2023, reflects business optimization, development and other strategic initiative costs primarily related to: (i) $6.6 million and $14.1 million, respectively of other business optimization costs and strategic initiative costs; and (ii) $2.8 million and $10.5 million, respectively of third-party consulting costs. For the three months ended March 31, 2022, reflects business optimization, development and other strategic initiative costs primarily related to $2.2 million of third-party consulting costs.

(d) For the three and twelve months ended March 31, 2023, primarily reflects costs associated with certain legal matters related to the previously disclosed temporary COVID-19 park closures. For the three months ended March 31, 2022, primarily relates to incremental non-recurring costs associated with the COVID-19 pandemic.

(e) Adjusted EBITDA is defined as net (loss) income before income tax expense, interest expense, depreciation and amortization, as further adjusted to exclude certain non-cash, and other items as described above.

(f) Our Debt Agreements permit the calculation of certain covenants to be based on Covenant Adjusted EBITDA, as defined above, for the last twelve-month period further adjusted for net annualized estimated savings we expect to realize over the following 24-month period related to certain specified actions, including restructurings and cost savings initiatives. These estimated savings are calculated net of the amount of actual benefits realized during such period. These estimated savings are a non-GAAP Adjusted EBITDA add-back item only as defined in the Debt Agreements and does not impact our reported GAAP net (loss) income.

(g) The Debt Agreements permit our calculation of certain covenants to be based on Covenant Adjusted EBITDA as defined above, for the last twelve-month period further adjusted for certain costs as permitted by the Debt Agreements including recruiting and retention expenses, public company compliance costs and litigation and arbitration costs, if any.

(h) Covenant Adjusted EBITDA is defined in the Debt Agreements as Adjusted EBITDA for the last twelve-month period further adjusted for net annualized estimated savings among other adjustments as described in footnotes (f) and (g) above.

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Contractual Obligations

There have been no material changes to our contractual obligations as March 31, 2023 from those previously disclosed in our Annual Report on Form 10-K.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, revenues and expenses, and disclosure of contingencies during the reporting period. Significant estimates and assumptions include the valuation and useful lives of long-lived assets, the accounting for income taxes, the accounting for self-insurance and revenue recognition. Actual results could differ from those estimates. The critical accounting estimates associated with these policies are described in our Annual Report on Form 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10-K, filed on March 1, 2023.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements as of March 31, 2023.

Recently Issued Financial Accounting Standards

Refer to Note 2–Recent Accounting Pronouncements in our notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Inflation

The impact of inflation has affected, and will continue to affect, our operations significantly. The costs of food, merchandise and other revenues are influenced by inflation and fluctuations in global commodity prices. In addition, other costs, such as the costs of fuel, construction, repairs and maintenance, labor, freight, utilities and insurance are all subject to inflationary pressures. For further discussion, see the “Risk Factors” section of our Annual Report on Form 10-K, as such risk factors may be updated from time to time in our periodic filings with the SEC.

Interest Rate Risk

We are exposed to market risks from fluctuations in interest rates, and to a lesser extent on currency exchange rates, from time to time, on imported rides and equipment. The objective of our financial risk management is to reduce the potential negative impact of interest rate and foreign currency exchange rate fluctuations to acceptable levels. We do not acquire market risk sensitive instruments for trading purposes.

Prior to 2021, we previously managed interest rate risk through the use of a combination of fixed-rate long-term debt and interest rate swaps that fixed a portion of our variable-rate long-term debt. We have no interest rate swap agreements outstanding as of March 31, 2023. We presently manage interest rate risk primarily by managing the amount, sources and duration of our debt funding. At March 31, 2023, approximately $1.2 billion of our outstanding long-term debt represents variable-rate debt. Assuming an average balance on our revolving credit borrowings of approximately $390.0 million, a hypothetical 100 bps increase in LIBOR would increase our annual interest expense by approximately $15.7 million. Assuming no revolving credit borrowings, a hypothetical 100 bps increase in LIBOR would increase our annual interest expense by approximately $11.8 million.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), require public companies, including us, to maintain “disclosure controls and procedures,” which are defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required or necessary disclosures.

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In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. The design of any controls and procedures also is based on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Additionally, in designing disclosure controls and procedures, our management was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2023. Based upon this evaluation, our management, including our principal executive officer and principal financial officer, have concluded that the Company’s disclosure controls and procedures were not effective as of the end of the period covered by this Quarterly Report on Form 10-Q due to a material weakness in our internal control over financial reporting which was initially disclosed as of September 30, 2021.

Notwithstanding the above, the control deficiency did not result in a material misstatement of any of the Company’s annual or interim consolidated financial statements. Further, management believes and has concluded that the consolidated financial statements for the prior periods and included in this report fairly present, in all material respects, the Company’s financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

Changes in Internal Control over Financial Reporting

Regulations under the Exchange Act require public companies, including our Company, to evaluate any change in our “internal control over financial reporting” as such term is defined in Rule 13a-15(f) and Rule 15d-15(f) of the Exchange Act. There have been no changes in our internal control over financial reporting that occurred during the most recent quarter ended March 31, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, other than those disclosed in the status update section.

Status Update

Management and our Board of Directors are committed to remediating the above noted material weakness to address the deficiency within the control environment which resulted from a lack of sufficient policies and procedures surrounding the frequency, manner and extent in which Board members engage with management, resulting, in part, from increased Board engagement with management, as disclosed in Part I, Item 2, “Current Operating Environment” included elsewhere in this Quarterly Report on Form 10-Q. As a result, management and the Board determined that it should establish and/or enhance additional policies and procedures relating to Board engagement and establish a process to evaluate adherence to these policies and procedures. Based upon a recommendation of the Audit Committee, the Board formed a committee (the “Committee”) and engaged independent consultants to advise the Committee and management as it relates to this deficiency to develop and execute on a remediation plan.

Management continues to perform ongoing risk assessments. As a result of these assessments, management and the Committee continue to identify actions to remediate the material weakness, including the following actions:

•Updated and further revising policies related to Board and management interactions and communications and the delegation of authority policy.

•Enhanced our evaluation of the control environment by increasing the frequency and further updating the scope of the fraud risk assessment.

•Named a lead director whose responsibilities, amongst others, include acting as a liaison and monitoring the frequency, manner and extent of Board and management engagement.

•Implemented additional regular sessions between senior management and the Board.

•Increased testing of certain transactional and entity level controls.

•Initiated and conducted training and education for members of the Board and certain members of senior management regarding the internal control framework and corporate policies related to Board and management engagement.

Management will continue to perform ongoing risk assessment procedures, including continued enhancement, design and implementation of relevant controls, and will assess and test the effectiveness of these remediation efforts. As we continue to evaluate the effectiveness of the above remediation efforts, management may determine to take additional measures or to modify the remediation plan described above, which may require additional implementation time. The material weakness cannot be considered remediated until remediation efforts have operated for a sufficient period of time and management has concluded, that the material weakness has been resolved. We will continue to assess the effectiveness of our remediation efforts in connection with our evaluations of internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

See Note 9–Commitments and Contingencies under the caption “Legal Proceedings” in our notes to the unaudited condensed consolidated financial statements for further details concerning our other legal proceedings.

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth in Item 1A.to Part I of our Annual Report on Form 10-K, as filed on March 1, 2023, except to the extent factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors, which is incorporated herein by reference.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of equity securities during the first quarter of 2023. The following table sets forth information with respect to shares of our common stock purchased by the Company during the periods indicated:

Period Beginning	Period Ended	Total Number of Shares Purchased(1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(2)
January 1, 2023	January 31, 2023		—		—		—	$	56,372,461
February 1, 2023	February 28, 2023		—		—		—		56,372,461
March 1, 2023	March 31, 2023		86,914	$	64.08		—		56,372,461
			86,914				—	$	56,372,461

(1)All other purchases were made pursuant to our Omnibus Incentive Plan, under which participants may satisfy tax withholding obligations incurred upon the vesting of restricted stock by requesting that we withhold shares with a value equal to the amount of the withholding obligation.

(2)In August 2022, our Board of Directors approved a $250.0 million share repurchase program (the “Share Repurchase Program”) of which approximately $56.4 million remained available as of March 31, 2023. Subsequent to March 31, 2023, the Company repurchased 235,000 shares for an aggregate total of approximately $13.9 million, leaving approximately $42.4 million remaining under the Share Repurchase Program as of May 4, 2023.

Under the Share Repurchase Program, we are authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. All of the common stock is held as treasury shares as of March 31, 2023. The number of shares to be purchased and the timing of purchases will be based on our trading windows and available liquidity, general business and market conditions and other factors, including legal requirements and alternative opportunities. See Note 10–Stockholders’ Deficit in the notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

The following is a list of all exhibits filed or furnished as part of this report:

Exhibit No.	Description
10.1*†	Offer Letter of Employment, Agreed and Accepted the 25th day of January 2023, between SeaWorld Entertainment, Inc. and Jim Forrester
10.2*	Fourth Amended & Restated Stock Ownership Guidelines, adopted February 22, 2023
31.1*	Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL

* Filed herewith

† Identifies exhibits that consist of a management contract or compensatory plan or arrangement

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SEAWORLD ENTERTAINMENT, INC.
	(Registrant)
Date: May 10, 2023	By: /s/ James W. Forrester, Jr.
	James W. Forrester, Jr.
	Interim Chief Financial Officer and Treasurer
	(Principal Financial Officer)
Date: May 10, 2023	By: /s/ Shekufeh Shirazi Boyle
	Shekufeh Shirazi Boyle
	Chief Accounting Officer
	(Principal Accounting Officer)

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EX-10

Exhibit 10.1

January 25, 2023

Jim Forrester

Dear Jim:

Congratulations on your new position!

We are pleased to offer you the position ofInterim Chief Financial Officer and Treasurer with a start date commencing on later of the date of your returning a signed acceptance of this offer letter or the Board approval of your compensation. You will be compensated at an annual rate of $285,000 payable semi-monthly.

You will be eligible to participate in the annual incentive bonus plan, as adopted by the Company from time to time (“Annual Bonus Plan”), with a target annual incentive bonus of 80% of your base salary, less applicable taxes, deductions and withholdings, payable in cash and/or stock in the Company’s sole discretion. The plan year is from January 1 - December 31 and awards are prorated based on date of hire for Ambassadors hired before October 1st. Target incentives do not constitute a promise of payment. Any actual bonus paid will be subject to the terms and conditions of the Annual Bonus Plan and contingent upon the level of achievement of Company performance objectives as established by the Compensation Committee for such fiscal year and, to the extent applicable, the assessment of your individual performance goals for such fiscal year. To qualify for an incentive bonus, you must remain continuously employed by the Company through the date that the incentive bonus is paid.

Subject to Compensation Committee approval, you will receive a one-time equity award. This award will consist of a number of Options equal to $200,000 (Option number determined by $200,000/stock price on date of grant). You will receive a grant of Restricted Share Units (“RSUs”) with a grant date value of $200,000. One fourth of the Options and Restricted Stock Units shall vest on each of the first four anniversaries of the date of the grant. You will also receive Performance Share Units (“PSUs”) with a grant date value of $200,000 pursuant to the vesting terms established under the Company’s long-term equity incentive plan. The actual number of Options, PSUs and RSUs that you will receive will be determined based upon the fair market value of the Company’s common stock on the grant date. This equity grant will be made within the Company's open trading window and the Company is not otherwise restricted from granting the shares. All equity grants contemplated herein will be made in accordance with the Company's Equity Award Grant Policy and with compensation committee approval. All vest events are contingent upon your continued employment with the Company through such vesting dates. The terms will be outlined in greater detail in your definitive binding grant agreements.

You are eligible to participate in the long-term equity incentive planas adopted by the Company from time to time. Your annual target opportunity under the long-term incentive plan is 150% of your base salary, subject to vesting and other terms and conditions of both the Company's standard stock award agreement and the Company's equity incentive plan (more detail to be provided to you). This equity grant is subject to Compensation Committee approval, so long as such date is within the Company's open trading window and the Company is not otherwise restricted from granting the shares. The Compensation Committee has regularly scheduled meetings during the year to review and approve equity awards associated with this plan.

During the course of your employment, it is likely that you will become knowledgeable about confidential and/or proprietary information related to the operations, products and services of the Company and its affiliates. Similarly, you may have confidential or proprietary information from prior employers that should not be used or disclosed to anyone at the Company. Therefore, you will be required to read, complete, and sign the Company’s standard Intellectual Property & Confidentiality Agreement. In addition, the Company insists that you comply with any existing and/or continuing contractual obligations that you may have with your former employers. By signing this offer letter, you represent that your employment with the Company shall not breach any agreement you have with any third party.

2

As a Company Ambassador, you must devote your full business efforts and time to the Company. This obligation, however, will not preclude your from engaging in appropriate civic, charitable or religious activities or, with the consent of the Company’s Board of Directors, from serving on the boards of directors of companies that are not competitors to the Company as long as the activities do not materially interfere or conflict with your responsibilities to or your ability to perform your duties of employment at the Company. Any outside activities must be in compliance with and approved if required by the Company’s Code of Business Conduct and Ethics or its Corporate Governance Guidelines.

You will be eligible to receive severance benefits comparable to other executives at your level under the Company’s Key Employee Severance Plan, as in effect from time to time (the “Plan”) (more detail to be provided to you). The Company reserves the right to terminate or amend the Plan at any time.

While it is our sincere hope and belief that our relationship will be mutually beneficial, your employment with SeaWorld Parks & Entertainment is "at-will", meaning that either you or SeaWorld Parks & Entertainment may terminate the employment relationship at any time, for any lawful reason or for no reason at all. Accordingly, there is no express or implied employment contract between you and SeaWorld Parks & Entertainment.

This offer letter and the referenced documents and agreements constitute the entire agreement between you and The Company with respect to the subject matter hereof and supersede any and all prior or contemporaneous oral or written representations, understandings, agreements, or communications between you and the Company concerning those matters.

We are confident that you will be able to make a significant contribution to our continued success, as an Ambassador of SeaWorld Parks & Entertainment. We look forward to having you on the team!

Sincerely,

/s/ Jim Hughes_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Jim Hughes

Chief Human Resources Officer

I accept this offer of employment as described in this letter:

/s/ Jim Forrester_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Jim Forrester

January 25, 2023 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Date

EX-10

Exhibit 10.2

SEAWORLD ENTERTAINMENT, INC.

FOURTH AMENDED & RESTATED STOCK OWNERSHIP GUIDELINES

Adopted February 22, 2023

I.General Statement

The Board of Directors of SeaWorld Entertainment, Inc., a Delaware corporation (the “Company”) has adopted these Stock Ownership Guidelines (these “Guidelines”) to further align the interests of the Company’s executives and non-employee members of the Company’s Board of Directors with the interests of the Company’s stockholders.

II.Stock Ownership Guidelines

These Guidelines provide that members of the Company’s senior management who are considered executive officers for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, other members of the Company’s Operations Committee and non-employee members of the Company’s Board of Directors, will be subject to stock ownership guidelines established as a multiple of annual base salary or annual cash retainer, as follows:

Leadership Position	Value of Shares
Chief Executive Officer	6x annual base salary
Non-employee directors	5x annual cash retainer
Chief Financial Officer Chief Operating Officer Chief Commercial Officer Chief Creative Officer Chief Marketing Officer Chief Human Resources Officer (“CHRO”) Chief Legal Officer (“CLO”) Chief Parks Operations Officer Chief Transformation Officer Chief Zoological Officer Executive Vice President or equivalent title*	3x annual base salary
Park Presidents Chief Accounting Officer Chief Product & Digital Officer Chief Information Officer Vice President Investor Relations Senior Vice President or equivalent title*	2x annual base salary

* As determined by the CHRO and CLO.

III.Stock Ownership Definition

Stock that counts toward satisfaction of these Guidelines include: (a) shares of the Company’s common stock owned directly by the individual or his or her immediate family members residing in the same household, whether held individually or jointly (including, without limitation, shares of restricted stock to the extent the restrictions applicable thereto have lapsed and shares received upon the settlement of restricted stock units); (b) shares of time-based restricted stock (to the extent the restrictions have not lapsed) or time-based restricted stock units (whether or not the restrictions have lapsed); (c) shares of the Company’s common stock held in a grantor trust for the benefit of the individual or his or her immediate family members residing in the same household; and (d) shares of the Company’s common stock owned by a partnership, limited liability company or other entity to the extent of the individual’s interest therein (or the interest therein of his or her immediate family members residing in the same household) but only if the individual has or shares power to vote or dispose of the shares. For avoidance of doubt, the following equity awards do not count toward satisfaction of these Guidelines: (1) outstanding stock options and (2) performance-based restricted stock (to the extent the restrictions have not lapsed) or performance based restricted stock units (whether or not the restrictions have lapsed).

IV.Compliance with Stock Ownership Guidelines

The determination of whether an individual meets the specified guideline level of ownership will be made (i) as of the last day of the fiscal year by using the average closing market price on the New York Stock Exchange (or such other national securities exchange on which the Company’s common stock is then principally listed) of a share of the Company’s common stock for the prior 60-day period or (ii) at the time of requested sale using the lesser of (a) the stock price determined in accordance with (i) or (b) the most recently available closing stock price.

V.Stock Retention Requirements

Until such time as an individual covered by these Guidelines has achieved compliance with these Guidelines, or becomes non-compliant due to a reduction in stock price, he or she will be required to retain at least fifty percent (50%) of the Net Shares that are acquired as a result of the exercise, vesting or payment of any Company equity awards granted to such individual until compliance is achieved or re-achieved. “Net Shares” are those shares that remain after shares are sold or withheld, as the case may be, to pay any applicable exercise price for the award and satisfy any tax obligations arising in connection with the exercise, vesting or payment of the award. Because an individual covered by these Guidelines must retain a percentage of Net Shares acquired from Company equity awards until such individual satisfies the specified guideline level of ownership, there is no minimum time period required to achieve the specified guideline level of ownership. The retention requirements of this Section V shall only apply to Net Shares realized after the date of the initial adoption of these Guidelines.

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VI.Hardships and Waivers

There may be instances in which these Guidelines would place a hardship on an individual covered by these Guidelines or prevent such individual from complying with a court order, such as a divorce settlement. In these instances, such individual must submit a request in writing to the Company’s Compensation Committee summarizing the circumstances and describing the extent to which an exemption is being requested. The Compensation Committee, in its sole discretion, shall make the final decision as to whether an exemption will be granted.

3

EX-31

Exhibit 31.1

CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Marc G. Swanson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 of SeaWorld Entertainment, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2023	Signature:	/s/ Marc G. Swanson
		Marc G. Swanson
		Chief Executive Officer
		(Principal Executive Officer)

EX-31

Exhibit 31.2

CERTIFICATION OF PERIODIC REPORT UNDER SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, James W. Forrester, Jr., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2023 of SeaWorld Entertainment, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2023	Signature:	/s/ James W. Forrester, Jr.
		James W. Forrester, Jr.
		Interim Chief Financial Officer and Treasurer
		(Principal Financial Officer)

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SeaWorld Entertainment, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2023 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marc G. Swanson, Chief Executive Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

•The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

•The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: May 10, 2023

/s/ Marc G. Swanson

Marc G. Swanson

Chief Executive Officer

(Principal Executive Officer)

EX-32

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of SeaWorld Entertainment, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2023 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James W. Forrester, Jr., Interim Chief Financial Officer and Treasurer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

•The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

•The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.

Date: May 10, 2023

/s/ James W. Forrester, Jr.

James W. Forrester, Jr.

Interim Chief Financial Officer and Treasurer

(Principal Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 04, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Trading Symbol	SEAS
Entity Registrant Name	SeaWorld Entertainment, Inc.
Entity Central Index Key	0001564902
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		63,886,889
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Security Exchange Name	NYSE
Entity File Number	001-35883
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-1220297
Entity Address, Address Line One	6240 Sea Harbor Drive
Entity Address, City or Town	Orlando
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32821
City Area Code	407
Local Phone Number	226-5011
Document Quarterly Report	true
Document Transition Report	false

XML

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 54,761	$ 79,196
Accounts receivable, net	72,504	71,050
Inventories	59,060	55,190
Prepaid expenses and other current assets	35,492	28,260
Total current assets	221,817	233,696
Property and equipment, at cost	3,640,041	3,576,092
Accumulated depreciation	(1,899,152)	(1,869,413)
Property and equipment, net	1,740,889	1,706,679
Goodwill	66,278	66,278
Trade names/trademarks, net	157,000	157,000
Right of use assets-operating leases	129,415	130,479
Deferred tax assets, net	13,084	12,332
Other assets, net	25,397	19,323
Total assets	2,353,880	2,325,787
Current liabilities:
Accounts payable and accrued expenses	164,327	159,947
Current maturities of long-term debt	12,000	12,000
Operating lease liabilities	3,261	3,387
Accrued salaries, wages and benefits	22,800	17,423
Deferred revenue	212,799	169,535
Other accrued liabilities	45,835	46,914
Total current liabilities	461,022	409,206
Long-term debt, net	2,097,601	2,099,059
Long-term operating lease liabilities	114,563	115,396
Deferred tax liabilities, net	88,962	96,627
Other liabilities	46,385	43,163
Total liabilities	2,808,533	2,763,451
Commitments and contingencies (Note 8)
Stockholders’ Deficit:
Preferred stock, $0.01 par value-authorized, 100,000,000 shares, no shares issued or outstanding at March 31, 2023 and December 31, 2022
Common stock, $0.01 par value--authorized, 1,000,000,000 shares: 96,496,784 and 96,287,771 shares issued at March 31, 2023 and December 31, 2022, respectively	965	963
Additional paid-in capital	709,627	710,151
Retained earnings	159,436	175,903
Treasury stock, at cost (32,376,539 shares at March 31, 2023 and December 31, 2022)	(1,324,681)	(1,324,681)
Total stockholders’ deficit	(454,653)	(437,664)
Total liabilities and stockholders’ deficit	$ 2,353,880	$ 2,325,787

XML

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	96,496,784	96,287,771
Treasury stock, shares	32,376,539	32,376,539

XML

Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Net revenues:
Total revenues	$ 293,346	$ 270,693
Costs and expenses:
Cost of food, merchandise and other revenues	23,221	23,040
Operating expenses (exclusive of depreciation and amortization shown separately below)	172,674	152,925
Selling, general and administrative expenses	48,281	46,059
Severance and other separation costs	4	30
Depreciation and amortization	37,394	38,612
Total costs and expenses	281,574	260,666
Operating income	11,772	10,027
Other expense (income), net	46	(12)
Interest expense	36,401	25,370
Loss before income taxes	(24,675)	(15,331)
Benefit from income taxes	(8,208)	(6,344)
Net loss	$ (16,467)	$ (8,987)
Loss per share:
Net loss per share, basic	$ (0.26)	$ (0.12)
Net loss per share, diluted	$ (0.26)	$ (0.12)
Weighted average common shares outstanding:
Basic	63,978	75,624
Diluted	63,978	75,624
Admissions [Member]
Net revenues:
Total revenues	$ 163,863	$ 150,862
Food, Merchandise and Other [Member]
Net revenues:
Total revenues	$ 129,483	$ 119,831

XML

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	(Accumulated Deficit) Retained Earnings [Member]	Treasury Stock, at Cost [Member]
Beginning Balance at Dec. 31, 2021	$ (33,916)	$ 955	$ 711,474	$ (115,287)	$ (631,058)
Beginning Balance, shares at Dec. 31, 2021		95,541,992
Equity-based compensation	6,982		6,982
Vesting of restricted shares		$ 4	(4)
Vesting of restricted shares, shares		361,403
Shares withheld for tax withholdings	(7,738)	$ (1)	(7,737)
Shares withheld for tax withholdings, shares		(111,865)
Exercise of stock options	1,127		1,127
Exercise of stock options, shares		46,503
Repurchase of treasury shares	(109,905)				(109,905)
Net loss	(8,987)			(8,987)
Ending Balance at Mar. 31, 2022	(152,437)	$ 958	711,842	(124,274)	(740,963)
Ending Balance, shares at Mar. 31, 2022		95,838,033
Beginning Balance at Dec. 31, 2022	$ (437,664)	$ 963	710,151	175,903	(1,324,681)
Beginning Balance, shares at Dec. 31, 2022	96,287,771	96,287,771
Equity-based compensation	$ 4,482		4,482
Vesting of restricted shares		$ 3	(3)
Vesting of restricted shares, shares		273,134
Shares withheld for tax withholdings	(5,569)	$ (1)	(5,568)
Shares withheld for tax withholdings, shares		(86,914)
Exercise of stock options	565		565
Exercise of stock options, shares		22,793
Net loss	(16,467)			(16,467)
Ending Balance at Mar. 31, 2023	$ (454,653)	$ 965	$ 709,627	$ 159,436	$ (1,324,681)
Ending Balance, shares at Mar. 31, 2023	96,496,784	96,496,784

XML

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit (Parenthetical)	3 Months Ended
	Mar. 31, 2022 shares
Statement of Stockholders' Equity [Abstract]
Repurchase of treasury shares, shares	1,535,427

XML

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash Flows From Operating Activities:
Net loss	$ (16,467)	$ (8,987)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	37,394	38,612
Amortization of debt issuance costs and discounts	1,542	1,532
Deferred income tax benefit	(8,417)	(6,531)
Equity-based compensation	4,482	6,982
Other, including loss on sale or disposal of assets, net	3,221	4,420
Changes in assets and liabilities:
Accounts receivable	(1,361)	3,408
Inventories	(3,936)	(15,601)
Prepaid expenses and other current assets	(6,863)	(7,653)
Accounts payable and accrued expenses	(345)	5,599
Accrued salaries, wages and benefits	5,377	(2,841)
Deferred revenue	42,072	53,584
Other accrued liabilities	(1,276)	(5,675)
Right of use assets and operating lease liabilities	104	201
Other assets and liabilities	(5,231)	3,744
Net cash provided by operating activities	50,296	70,794
Cash Flows From Investing Activities:
Capital expenditures	(69,758)	(35,110)
Net cash used in investing activities	(69,758)	(35,110)
Cash Flows From Financing Activities:
Repayments of long-term debt	(3,000)	(3,000)
Proceeds from draws on revolving credit facility	20,000
Repayments of revolving credit facility	(20,000)
Purchase of treasury stock		(89,736)
Payment of tax withholdings on equity-based compensation through shares withheld	(5,569)	(7,738)
Exercise of stock options	565	1,127
Other financing activities	(93)	(211)
Net cash used in financing activities	(8,097)	(99,558)
Change in Cash and Cash Equivalents, including Restricted Cash	(27,559)	(63,874)
Cash and Cash Equivalents, including Restricted Cash—Beginning of period	82,320	444,486
Cash and Cash Equivalents, including Restricted Cash—End of period	54,761	380,612
Supplemental Disclosure of Noncash Investing and Financing Activities
Capital expenditures in accounts payable	$ 45,548	31,483
Treasury stock purchases not yet settled in other accrued liabilities		$ 20,169

XML

Description of the Business and Basis of Presentation

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Description of the Business and Basis of Presentation

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Description of the Business

SeaWorld Entertainment, Inc., through its wholly-owned subsidiary, SeaWorld Parks & Entertainment, Inc. (“SEA”) (collectively, the “Company”), owns and operates twelve theme parks within the United States. The Company operates SeaWorld theme parks in Orlando, Florida; San Antonio, Texas; and San Diego, California; and Busch Gardens theme parks in Tampa, Florida and Williamsburg, Virginia. The Company operates water park attractions in Orlando, Florida (Aquatica); San Antonio, Texas (Aquatica); Tampa, Florida (Adventure Island); and Williamsburg, Virginia (Water Country USA). The Company also operates a reservations-only theme park in Orlando, Florida (Discovery Cove) and Sesame Place theme parks in Langhorne, Pennsylvania and Chula Vista, California.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K.

In the opinion of management, such unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations for the year ending December 31, 2023 or any future period due in part to the seasonal nature of the Company’s operations. Based upon historical results, the Company typically generates its highest revenues in the second and third quarters of each year and incurs a net loss in the first quarter, in part because four of its theme parks were historically only open for a portion of the year. In the year ended December 31, 2022, we opened our Sesame Place San Diego park which has been, and is expected to continue to be, open more operating days than the Aquatica San Diego park it replaced, particularly in the first and fourth quarters of the year.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including SEA. All intercompany accounts have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions include, but are not limited to, the accounting for self-insurance, deferred tax assets and liabilities, deferred revenue, equity compensation, the valuation of goodwill and other indefinite-lived intangible assets and reviews for potential impairment of long-lived assets. Estimates are based on various factors including current and historical trends, as well as other pertinent company and industry data. The Company regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes. Actual results could differ from those estimates.

Segment Reporting

The Company maintains discrete financial information for each of its twelve theme parks, which is used by the Chief Operating Decision Maker (“CODM”), as a basis for allocating resources and assessing performance. Each theme park has been identified as an operating segment and meets the criteria for aggregation due to similar economic characteristics. In addition, all of the Company’s theme parks provide similar products and services and share similar processes for delivering services. The theme parks have a high degree of similarity in the workforces and target similar consumer groups. Accordingly, based on these economic and operational similarities and the way the CODM monitors and makes decisions affecting the operations, the Company has concluded that its operating segments may be aggregated and that it has one reportable segment.

Restricted Cash

Restricted cash is recorded in prepaid expenses and other current assets in the accompanying unaudited condensed consolidated balance sheets. Restricted cash as of December 31, 2022 consists primarily of advanced funds for which costs have yet to be incurred related to the Company’s international services agreements, as discussed in the “International Agreements” section which follows.

	March 31,		December 31,
	2023		2022
	(In thousands)
Cash and cash equivalents	$	54,761	$	79,196
Restricted cash, included in prepaid expenses and other current assets		—		3,124
Total cash, cash equivalents and restricted cash	$	54,761	$	82,320

Share Repurchase Programs and Treasury Stock

From time to time, the Company’s Board of Directors (the “Board”) may authorize share repurchases of common stock. Shares repurchased under Board authorizations are currently held in treasury for general corporate purposes. The Company accounts for treasury stock on the trade date under the cost method. Treasury stock at March 31, 2023 and December 31, 2022 is reflected within stockholders’ deficit. See further discussion of the Company’s share repurchase programs in Note 10–Stockholders’ Deficit.

Revenue Recognition

Admissions revenue primarily consists of single-day tickets, annual or season passes or other multi-day or multi-park admission products. For single-day tickets, the Company recognizes revenue at a point in time, upon admission to the park. Annual passes, season passes, or other multi-day or multi-park passes allow guests access to specific parks over a specified time period. For these pass and multi-use products, revenue is deferred and recognized over the terms of the admission product based on estimated redemption rates for similar products and is adjusted periodically. The Company estimates redemption rates using historical and forecasted attendance trends by park for similar products. Attendance trends factor in seasonality and are adjusted based on actual trends periodically. These estimated redemption rates impact the timing of when revenue is recognized on these products. Actual results could materially differ from these estimates based on actual attendance patterns. Revenue is recognized on a pro-rata basis based on the estimated allocated selling price of the admission product. For pass products purchased on an installment plan that have met their initial commitment period and have transitioned to a month-to-month basis, monthly charges are recognized as revenue as payments are received each month. For certain multi-day admission products, revenue is allocated based on the number of visits included in the pass and recognized ratably based on each admission into the theme park.

Food, merchandise and other revenue primarily consists of food and beverage, retail, merchandise, parking, other in-park products and service fees, and other miscellaneous revenue, including online transaction fees and revenue from the Company’s international agreements, not necessarily generated in our parks, which is not significant in the periods presented. The Company recognizes revenue for food and beverage, merchandise and other in-park products when the related products or services are received by the guests.

Deferred revenue primarily includes revenue associated with pass products, admission or in-park products or services with a future intended use date and contract liability balances related to licensing and international agreements collected in advance of the Company satisfying its performance obligations and is expected to be recognized in future periods. At March 31, 2023 and December 31, 2022, the long-term portion of deferred revenue included in other liabilities in the accompanying unaudited condensed consolidated balance sheets primarily relates to the Company’s international agreements, as discussed in the following section.

The following table reflects the Company’s deferred revenue balance as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
Deferred revenue, including long-term portion	$	227,605	$	183,772
Less: Deferred revenue, long-term portion, included in other liabilities		14,806		14,237
Deferred revenue, short-term portion	$	212,799	$	169,535

The Company estimates approximately $75.4 million of the deferred revenue, short term portion, balance outstanding as of December 31, 2022 was recognized as revenue during the three months ended March 31, 2023. For certain admission products, the Company estimated timing of redemption using average historical redemption rates.

International Agreements

The Company has previously received $10.0 million in deferred revenue which is recorded in other liabilities related to a nonrefundable payment received from a partner in connection with a project in the Middle East to provide certain services pertaining to the planning and design of SeaWorld Abu Dhabi, a marine life theme park on Yas Island (the “Middle East Project”), with funding received expected to offset internal expenses. The Middle East Project is on track with the park scheduled to open in May 2023. The Company also receives additional funds from its partner related to agreed-upon services and reimbursements of costs incurred by the Company on behalf of the Middle East Project (the “Middle East Services Agreements”).

Revenue and expenses associated with the Middle East Project will begin to be recognized when substantially all the services have been performed which is anticipated to occur in 2023, when SeaWorld Abu Dhabi is expected to open. Revenue and expenses associated with the Middle East Services Agreements will be recognized upon completion of the respective performance obligations.

As a result of the Middle East Project, approximately $0.6 million and $0.5 million of costs incurred by the Company are recorded in prepaid expenses and other current assets as of March 31, 2023 and December 31, 2022, respectively, and approximately $11.7 million and $11.2 million of other related costs incurred are recorded in other assets in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively. Separately, deferred revenue of approximately $0.7 million and $0.6 million is recorded in deferred revenue as of March 31, 2023 and December 31, 2022, respectively, and approximately $14.5 million and $14.2 million of long-term deferred revenue is recorded in other liabilities in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively, related to the Middle East Project, which includes the $10.0 million nonrefundable payment previously discussed for each period.

As a result of the Middle East Services Agreements, approximately $2.0 million of costs incurred by the Company are recorded in prepaid expenses and other current assets in the accompanying unaudited condensed consolidated balance sheets as December 31, 2022. Separately, deferred revenue of approximately $0.9 million and $5.1 million is recorded in deferred revenue in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively.

XML

Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2023

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

2. RECENT ACCOUNTING PRONOUNCEMENTS

The Company reviews new accounting pronouncements as they are issued or proposed by the Financial Accounting Standards Board (“FASB”). There are no recent accounting pronouncements or recently implemented accounting standards that are expected to have a material impact on the Company’s unaudited condensed consolidated financial statements or disclosures.

XML

Loss per Share

3 Months Ended

Mar. 31, 2023

Loss Per Share [Abstract]

Loss per Share

3. LOSS PER SHARE

Loss per share is computed as follows:

	For the Three Months Ended March 31,
	2023								2022
	Net Loss			Shares		Per Share Amount			Net Loss			Shares		Per Share Amount
	(In thousands, except per share amounts)
Basic loss per share	$	(16,467	)		63,978	$	(0.26	)	$	(8,987	)		75,624	$	(0.12	)
Effect of dilutive incentive-based awards					—								—
Diluted loss per share	$	(16,467	)		63,978	$	(0.26	)	$	(8,987	)		75,624	$	(0.12	)

In accordance with the Earnings Per Share Topic of the Accounting Standards Codification (“ASC"), basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period (excluding treasury stock and unvested restricted stock awards). Unvested restricted stock awards are eligible to receive dividends, if any; however, dividend rights will be forfeited if the award does not vest. Accordingly, only vested shares of formerly restricted stock are included in the calculation of basic loss per share. The weighted average number of repurchased shares during the period, if any, which are held as treasury stock, are excluded from shares of common stock outstanding.

Diluted loss per share is determined using the treasury stock method based on the dilutive effect of certain unvested restricted stock awards and certain shares of common stock that are issuable upon exercise of stock options. There were approximately 1,225,000 and 1,555,000 potentially dilutive shares excluded from the computation of diluted loss per share during the three months ended March 31, 2023 and 2022, respectively, as their effect would have been anti-dilutive due to the Company’s net loss in those periods. Approximately 610,000 and 1,057,000 of the Company’s outstanding performance-vesting restricted stock awards as of March 31, 2023 and 2022, respectively, are considered contingently issuable shares and are excluded from the calculation of diluted loss per share until the performance measure criteria is met as of the end of the reporting period.

XML

Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

4. INCOME TAXES

Income tax expense or benefit and the Company’s effective tax rate is based upon the tax rate expected for the full calendar year applied to the year-to-date pretax income or loss of the interim period, plus the tax effect of any year-to-date discrete tax items. The Company’s consolidated effective tax rate for the three months ended March 31, 2023 was 33.3% and differs from the effective statutory federal income tax rate of 21.0% primarily due to the tax benefit related to equity-based compensation which vested during the quarter. The Company’s consolidated effective tax rate for the three months ended March 31, 2022 was 41.4% and differs from the effective statutory federal income tax rate of 21.0% primarily due to the tax benefit related to equity-based compensation which vested during the quarter.

Due to the uncertainty of realizing the benefit from deferred tax assets, tax positions are reviewed at least quarterly by assessing future expected taxable income from all sources. Realization of deferred tax assets, primarily arising from net operating loss carryforwards and charitable contribution carryforwards, is dependent upon generating sufficient taxable income prior to expiration of the carryforwards. Based on its analysis, the Company believes that some of its deferred tax assets may not be realized. As of March 31, 2023 and December 31, 2022, the Company’s valuation allowance consisted of approximately $4.6 million, net of federal tax benefit, on the deferred tax assets related to state net operating loss carryforwards.

The Company has determined that there are no positions currently taken that would rise to a level requiring an amount to be recorded or disclosed as an unrecognized tax benefit. If such positions do arise, it is the Company’s intent that any interest or penalty amount related to such positions will be recorded as a component of the income tax provision (benefit) in the applicable period.

The Inflation Reduction Act (“IRA”) of 2022 was signed into law on August 16, 2022. This legislation includes a 15% corporate alternative minimum tax and a 1% excise tax on stock repurchases among its key tax provisions effective for years beginning after December 31, 2022. The Company does not anticipate a material impact for either of these provisions.

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Other Accrued Liabilities

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Other Accrued Liabilities

5. OTHER ACCRUED LIABILITIES

Other accrued liabilities at March 31, 2023 and December 31, 2022, consisted of the following:

	March 31,		December 31,
	2023		2022
	(In thousands)
Accrued interest	$	13,347	$	18,483
Accrued taxes		7,134		3,284
Self-insurance reserve		8,623		8,608
Other		16,731		16,539
Total other accrued liabilities	$	45,835	$	46,914

As of March 31, 2023 and December 31, 2022, other accrued liabilities above includes approximately $10.9 million related to certain contractual liabilities arising from the previously disclosed temporary COVID-19 park closures.

As of March 31, 2023 and December 31, 2022, accrued interest above primarily relates to interest associated with the Company’s first-priority senior secured notes issued in April 2020, for which interest is paid bi-annually in November and May and the senior notes issued in August 2021, for which interest is paid bi-annually in February and August. See further discussion in Note 6–Long-Term Debt.

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Long-Term Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Long-Term Debt

6. LONG-TERM DEBT

Long-term debt, net, as of March 31, 2023 and December 31, 2022 consisted of the following:

	March 31,			December 31,
	2023			2022
	(In thousands)
Term B Loans (effective interest rate of 7.88% and 7.44% at March 31, 2023 and December 31, 2022 respectively)	$	1,182,000		$	1,185,000
Senior Notes due 2029 (interest rate of 5.25%)		725,000			725,000
First-Priority Senior Secured Notes due 2025 (interest rate of 8.75%)		227,500			227,500
Total long-term debt		2,134,500			2,137,500
Less: unamortized discounts and debt issuance costs		(24,899	)		(26,441	)
Less: current maturities		(12,000	)		(12,000	)
Total long-term debt, net	$	2,097,601		$	2,099,059

On August 25, 2021, SEA entered into a Restatement Agreement (the “Restatement Agreement”) pursuant to which SEA amended and restated its existing senior secured credit agreement dated as of December 1, 2009 (as amended, restated, supplemented or otherwise modified from time to time, and the senior secured credit facilities thereunder (the “Existing Secured Credit Facilities”), and, as amended and restated by the Restatement Agreement (the “Amended and Restated Credit Agreement”).

The Amended and Restated Credit Agreement provides for senior secured financing of up to $1,585.0 million, consisting of:

(i)a first lien term loan facility (the “Term Loan Facility” and the loans thereunder, the “Term B Loans”), in an aggregate principal amount of $1,200.0 million which was fully drawn on August 25, 2021. The Term Loan Facility will mature on August 25, 2028; and

(ii)a first lien revolving credit facility (the “Revolving Credit Facility” (and the loans thereunder, the “Revolving Loans”) and, together with the Term Loan Facility, the “Senior Secured Credit Facilities”), in an aggregate committed principal amount of $385.0 million, including both a letter of credit sub-facility and a swingline loan sub-facility. The Revolving Credit Facility will mature on August 25, 2026. On June 9, 2022, SEA entered into an incremental amendment to the Amended and Restated Credit Agreement to increase the revolving facility commitments under the Revolving Credit Facility by $5.0 million bringing the aggregate committed principal amount to $390.0 million as of such date.

Senior Secured Credit Facilities

Borrowings under the Term B Loans bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) a base rate equal to the higher of (a) the federal funds rate plus 1/2 of 1%, (b) the rate of interest quoted in the print edition of the Wall Street Journal Money Rates Section as the prime rate as in effect from time to time and (c) one-month Adjusted LIBOR plus 1% per annum (provided that in no event shall such ABR rate with respect to the Term B Loans be less than 1.50% per annum) (“ABR”), in each case, plus an applicable margin of 2.00% or (ii) a LIBOR rate for the applicable interest period (provided that in no event shall such LIBOR rate with respect to the Term B Loans be less than 0.50% per annum) (“LIBOR”) plus an applicable margin of 3.00%.

Borrowings under the Revolving Loans bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) ABR (provided that in no event shall such ABR rate with respect to the Revolving Loans be less than 1.00% per annum) plus an applicable margin equal to 1.75% or (ii) LIBOR (provided that in no event shall such LIBOR rate with respect to the Revolving Loans be less than 0.00%) plus an applicable margin of 2.75%. The applicable margin for borrowings of Revolving Loans are subject to one 25 basis point step-down upon achievement by the Company of certain corporate credit ratings.

In addition to paying interest on the outstanding principal under the Senior Secured Credit Facilities, the Company is required to pay a commitment fee equal to 0.50% per annum to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder. The Company will also be required to pay customary agency fees as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR rate borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee computed at a rate equal to 0.125% per annum on the daily stated amount of each letter of credit.

The Senior Secured Credit Facilities require scheduled amortization payments on the term loans in quarterly amounts equal to 0.25% of the original principal amount of the Term B Loans, payable quarterly, with the balance to be paid at maturity.

In addition, the Senior Secured Credit Facilities require the Company to prepay outstanding term loan borrowings, subject to certain exceptions, with:

-50% (which percentage will be reduced to 25% and 0% if the Company satisfies certain net first lien senior secured leverage ratios) of annual excess cash flow, as defined under the Senior Secured Credit Facilities;

-100% of the net cash proceeds of all non-ordinary course asset sales or other non-ordinary course dispositions of property, in each case subject to certain exceptions and reinvestment rights;

-100% of the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Senior Secured Credit Facilities.

The Company may voluntarily repay outstanding loans under the Senior Secured Credit Facilities at any time, without prepayment premium or penalty, except in connection with a repricing event in respect of the term loans as described below, subject to customary “breakage” costs with respect to LIBOR rate loans.

All borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including the absence of a default or event of default and the accuracy of representations and warranties in all material respects.

All obligations under the Senior Secured Credit Facilities are unconditionally guaranteed by the Company on a limited-recourse basis and each of SEA’s existing and future direct and indirect wholly owned material domestic subsidiaries, subject to certain exceptions. The obligations are secured by a pledge of SEA’s capital stock directly held by the Company and substantially all of SEA’s assets and those of each guarantor (other than the Company), including a pledge of the capital stock of all entities directly held by SEA or the guarantors, in each case subject to exceptions. Such security interests consist of a first-priority lien with respect to the collateral.

As of March 31, 2023, SEA had approximately $18.4 million of outstanding letters of credit, leaving approximately $371.6 million available under the Revolving Credit Facility, which was not drawn upon as of March 31, 2023.

Senior Notes

On August 25, 2021, SEA completed a private offering of $725.0 million aggregate principal amount of 5.250% senior notes which mature on August 15, 2029 (the “Senior Notes”). Interest on the Senior Notes accrues at 5.250% per annum and is paid semi-annually, in arrears on February 15 and August 15 of each year.

On or after August 15, 2024, SEA may redeem the Senior Notes, in whole at any time or in part from time to time, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12-month period commencing on August 15 of the years as follows: (i) in 2024 at 102.625%; (ii) in 2025 at 101.313%; and (iii) in 2026 and thereafter at 100%. In addition, prior to August 15, 2024, SEA may redeem the Senior Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus the “Applicable Premium” and accrued and unpaid interest, if any, to, but excluding, the redemption date. Notwithstanding the foregoing, subject to the provisions set forth in the Indenture, at any time and from time to time on or prior to August 15, 2024, SEA may redeem in the aggregate up to 40% of the original aggregate principal amount of the Senior Notes (calculated after giving effect to any issuance of additional Senior Notes) in an aggregate amount equal to the net cash proceeds of one or more equity offerings at a redemption price equal to 105.250%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Additionally, upon the occurrence of specified change of control events, each holder will have the right to require SEA to repurchase all or any part of such holder’s notes at a purchase price in cash equal to 101%.

SEA’s obligations under the Senior Notes and related indenture are guaranteed, jointly and severally, on a senior secured basis, by the Guarantors, as defined, in accordance with the provisions of the indenture.

First-Priority Senior Secured Notes

The 8.750% first-priority senior secured notes (the “First-Priority Senior Secured Notes”) mature on May 1, 2025 and have interest payment dates of May 1 and November 1. SEA may redeem the First-Priority Senior Secured Notes at its option, in whole at any time or in part from time to time, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12-month period commencing on May 1 of the years as follows: (i) in 2022 at 104.375%; (ii) in 2023 at 102.188%; and (iii) in 2024 and thereafter at 100%. SEA may also redeem in the aggregate (at a redemption price expressed as a percentage of principal amount thereof): (i) 100% of the First-Priority Senior Secured Notes after certain events constituting a change of control at a redemption price of 101%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date and (ii) up to 40% of the original aggregate principal amount of the First-Priority Senior Secured Notes with amounts equal to the net cash proceeds of certain equity offerings at a redemption price of 108.750%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The First-Priority Senior Secured Notes are fully and unconditionally guaranteed by the Company, any subsidiary of the Company that directly or indirectly owns 100% of the issued and outstanding equity interests of SEA, and subject to certain exceptions, each of SEA’s subsidiaries that guarantees SEA’s existing senior secured credit facilities.

Restrictive Covenants

The Amended and Restated Credit Agreement governing the Senior Secured Credit Facilities and the indentures governing the Senior Notes and First-Priority Senior Secured Notes (collectively, the “Debt Agreements”), contain covenants that limit the ability of the Company, SEA and its restricted subsidiaries to, among other things: (i) incur additional indebtedness or issue certain preferred shares; (ii) make dividend payments on or make other distributions in respect of their capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) create or permit to exist dividend and/or payment restrictions affecting their restricted subsidiaries; (vi) create liens on assets; (vii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; and (viii) enter into certain transactions with their affiliates. These covenants are subject to a number of important limitations and exceptions and are based, in part on the Company’s ability to satisfy certain tests and engage in certain transactions based on Covenant Adjusted EBITDA. Covenant Adjusted EBITDA differs from Adjusted EBITDA due to certain adjustments permitted under the relevant agreements, including but not limited to estimated cost savings, recruiting and retention costs, public company compliance costs, litigation and arbitration costs and other costs and adjustments as permitted under the Debt Agreements.

The Debt Agreements contain certain customary events of default, including relating to a change of control. If an event of default occurs, the lenders under the Debt Agreements will be entitled to take various actions, including the acceleration of amounts due under the Debt Agreements and all actions permitted to be taken by a secured creditor in respect of the collateral securing the Debt Agreements.

The Revolving Credit Facility requires that the Company, subject to a testing threshold, comply on a quarterly basis with a maximum net first lien senior secured leverage ratio of 6.25 to 1.00. The testing threshold will be satisfied (and therefore the covenant must be complied with at the end of such quarter) if the aggregate amount of funded loans and issued letters of credit (excluding up to $30.0 million of undrawn letters of credit under the Revolving Credit Facility and letters of credit that are cash collateralized) under the Revolving Credit Facility on such date exceeds an amount equal to 35% of the then-outstanding commitments under the Revolving Credit Facility.

The Debt Agreements permit an unlimited capacity for restricted payments if the net total leverage ratio on a pro forma basis does not exceed 4.25 to 1.00 after giving effect to the payment of any such restricted payment. As of March 31, 2023, the net total leverage ratio as calculated under the Debt Agreements was 2.71 to 1.00.

As of March 31, 2023, SEA was in compliance with all covenants contained in the documents governing the Debt Agreements.

Long-term debt at March 31, 2023 is repayable as follows and does not include the impact of any future voluntary prepayments:

Years Ending December 31,	(In thousands)
Remainder of 2023	$	9,000
2024		12,000
2025		239,500
2026		12,000
2027		12,000
Thereafter		1,850,000
Total	$	2,134,500

Cash paid for interest relating to the Senior Secured Credit Facilities and the Senior Notes, net of amounts capitalized, as applicable, was $40.0 million and $27.6 million in the three months ended March 31, 2023 and 2022, respectively.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

7. FAIR VALUE MEASUREMENTS

Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement is required to be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Of the Company’s long-term obligations as of March 31, 2023 and December 31, 2022, the Term B Loans are classified in Level 2 of the fair value hierarchy and the First-Priority Senior Secured Notes and the Senior Notes are classified in Level 1 of the fair value hierarchy. The fair value of the Term B Loans approximates their carrying value, excluding unamortized debt issuance costs and discounts, due to the variable nature of the underlying interest rates and the frequent intervals at which such interest rates are reset. The fair value of the First-Priority Senior Secured Notes and Senior Notes was determined using quoted prices in active markets for identical instruments. See Note 6–Long-Term Debt for further details.

The Company did not have any assets measured on a recurring basis at fair value at March 31, 2023 and December 31, 2022. The Company maintains its long-term liabilities at carrying value, net of unamortized debt issuance costs and discounts in the unaudited condensed consolidated balance sheet.

The following table presents the Company’s estimated fair value measurements and related classifications for liabilities measured on a recurring basis as of March 31, 2023.

	Quoted Prices in
	Active Markets		Significant
	for Identical		Other		Significant
	Assets and		Observable		Unobservable		Balance at
	Liabilities		Inputs		Inputs		March 31,
	(Level 1)		(Level 2)		(Level 3)		2023
Liabilities:	(In thousands)
Long-term obligations (a)	$	866,425	$	1,182,000	$	—	$	2,048,425

(a) Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $12.0 million and long-term debt, net, of $2.098 billion as of March 31, 2023.

The following table presents the Company’s estimated fair value measurements and related classifications for liabilities measured on a recurring basis as of December 31, 2022:

	Quoted Prices in
	Active Markets		Significant
	for Identical		Other		Significant
	Assets and		Observable		Unobservable		Balance at
	Liabilities		Inputs		Inputs		December 31,
	(Level 1)		(Level 2)		(Level 3)		2022
Liabilities:	(In thousands)
Long-term obligations (a)	$	873,675	$	1,185,000	$	—	$	2,058,675

(a) Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $12.0 million and long-term debt, net, of $2.099 billion as of December 31, 2022.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Sesame Workshop Arbitration

On February 4, 2022, Sesame Workshop delivered notice asserting that the Company failed to pay an additional royalty payment for 2021 under its licensing agreement with the Company (the “Licensing Agreement”). The Company had previously recorded the additional amount claimed but disputes the application and calculation of the additional payment. The amount accrued is the Company’s best estimate and, at this time, the Company does not anticipate any exposure to loss in excess of amounts accrued to be material. On June 27, 2022, Sesame Workshop initiated arbitration pursuant to the License Agreement. Oral arguments for the parties’ positions were held before the arbitration panel during the week of March 6, 2023, and the parties are currently awaiting a decision from the panel. The Company intends to vigorously defend its position.

Other Lawsuits

In October 2018, the Company received a demand letter from attorneys representing certain former employees who claim that the terms of their respective separation agreements entitle them to certain favorable modifications made to certain performance-vesting restricted shares (the “Tranche 3 Shares”) issued under the Company’s 2013 Omnibus Incentive Plan (the “Plan”).
 

In November 2020, the Company filed in the Court of Chancery of the State of Delaware an action for declaratory judgment seeking a determination that the threatened claims of the former employees are time-barred and without merit. In response, the defendant former employees filed a motion to dismiss or in the alternative to stay and compel arbitration. The parties agreed to arbitrate whether the former employees’ claims are subject to arbitration. On October 21, 2021, the arbitrator determined that disputes related to the former employees’ claims for the vesting of the Tranche 3 Shares are governed by the forum selection clauses of the equity award amendments rather than the Company’s dispute resolution process and notice of the arbitrator’s decision was filed with the Court of Chancery. On August 10, 2022, the defendant former employees filed answers, affirmative defenses and counterclaims. On October 10, 2022, the Company filed motions for judgment on the pleadings and to dismiss the counterclaims. The defendant former employees opposed the motions, on November 17, 2022, and the Company filed its reply brief on December 22, 2022. Oral arguments for the parties’ motions and counterclaims were held before the Court of Chancery, on March 29, 2023. In terms of potential exposure, the value of the total shares at issue for these certain former employees depends largely upon the Company’s current share price, which fluctuates daily. Approximately 300,000 shares are at issue. The Company believes that the former employees’ claims are without merit and intends to defend vigorously its positions. While there can be no assurance regarding the ultimate outcome of this matter, the Company believes that any potential loss would not be material.

On July 27, 2022, a purported class action was filed in the United States District Court for the Eastern District of Pennsylvania against the Company captioned Quinton Burns individually and Next Friend of K.B., a minor v. SeaWorld Parks & Entertainment, Inc. and SeaWorld Parks & Entertainment LLC, Civil Case No. 2:22-cv-09941. The complaint states the putative class consists of Quinton Burns and K.B. Burns and similarly situated Black people. Plaintiffs then filed an amended complaint adding an additional seven adult and seven minor class representative plaintiffs in which they allege the class consists of themselves and similarly situated minority persons and also disclosed an additional 89 families and 125 children represented by Plaintiffs’ counsel who are allegedly members of the purported class (the "First Amended Complaint"). The First Amended Complaint alleges the Company engaged in disparate treatment of Class members based on their race and in so doing violated the Civil Rights Act of 1866 and Pennsylvania common law. The First Amended Complaint seeks compensatory and punitive damages and attorneys’ fees and costs as well declarative and injunctive relief. The parties are engaged in discovery. The Company has filed a motion to dismiss all counts. The Company has also filed a motion to strike certification of the class. The Company believes that the lawsuit is without merit and intends to defend the lawsuit vigorously. While there can be no assurance regarding the ultimate outcome of the litigation, the Company believes a potential loss, if any, would not be material.

Other Matters

The Company is a party to various other claims and legal proceedings arising in the normal course of business. In addition, from time to time the Company is subject to audits, inspections and investigations by, or receives requests for information from, various federal and state regulatory agencies, including, but not limited to, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (“APHIS”), the U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”), the California Occupational Safety and Health Administration (“Cal-OSHA”), the Florida Fish & Wildlife Commission (“FWC”), the Equal Employment Opportunity Commission (“EEOC”), the Internal Revenue Service (“IRS”) the U.S. Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”).

Other than those matters discussed above, from time to time, various parties also bring other lawsuits against the Company. Matters where an unfavorable outcome to the Company is probable and which can be reasonably estimated are accrued. Such accruals, which are not material for any period presented, are based on information known about the matters, the Company’s estimate of the outcomes of such matters, and the Company’s experience in contesting, litigating and settling similar matters. Matters that are considered reasonably possible to result in a material loss are not accrued for, but an estimate of the possible loss or range of loss is disclosed, if such amount or range can be determined. At this time, management does not expect any such known claims, legal proceedings or regulatory matters to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

License Commitments

Pursuant to the License Agreement with Sesame Workshop, the Company pays a specified annual license fee, as well as a specified royalty based on revenues earned in connection with sales of licensed products, all food and beverage items utilizing the licensed elements and any events utilizing such elements if a separate fee is paid for such event. The Company’s principal commitments pursuant to the License Agreement include, among other items, the opening of a second standalone park (“Standalone Park”) (the Company opened the Standalone Park in San Diego on March 26, 2022) and minimum annual capital and marketing thresholds. After the opening of the second Standalone Park (counting the existing Sesame Place Standalone Park in Langhorne, Pennsylvania), SEA has the option to build additional Standalone Parks in the Sesame Territory within agreed upon timelines. The License Agreement has an initial term through December 31, 2031, with an automatic additional 15-year extension plus a five-year option added to the term of the License Agreement from December 31st of the year of each new Standalone Park opening. As of March 31, 2023, the Company estimates the combined remaining liabilities and obligations for the License Agreement commitments could be up to approximately $25.0 million over the remaining term of the agreement. See further discussion concerning royalty payments for the year 2021 in the "Sesame Workshop Arbitration" section above.

Anheuser-Busch, Incorporated ("ABI") has granted the Company a perpetual, exclusive, worldwide, royalty-free license to use the Busch Gardens trademark and certain related domain names in connection with the operation, marketing, promotion and advertising of certain of the Company’s theme parks, as well as in connection with the production, use, distribution and sale of merchandise sold in connection with such theme parks. Under the license, the Company is required to indemnify ABI against losses related to the use of the marks.

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Equity-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

9. EQUITY-BASED COMPENSATION

In accordance with ASC 718, Compensation-Stock Compensation, the Company measures the cost of employee services rendered in exchange for share-based compensation based upon the grant date fair market value. The cost is recognized over the requisite service period, which is generally the vesting period unless service or performance conditions require otherwise. The Company recognizes the impact of forfeitures as they occur.

Equity compensation expense is included in operating expenses and in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations as follows:

	For the Three Months Ended March 31,
	2023		2022
	(In thousands)
Equity compensation expense included in operating expenses	$	534	$	1,965
Equity compensation expense included in selling, general and administrative expenses		3,948		5,017
Total equity compensation expense	$	4,482	$	6,982

Omnibus Incentive Plan

The Company has reserved 15.0 million shares of common stock for issuance under its Omnibus Incentive Plan (the “Omnibus Incentive Plan”), of which approximately 7.3 million shares are available for future issuance as of March 31, 2023.

Bonus Performance Restricted Units

The Company had an annual bonus plan for the fiscal year ended December 31, 2022 (“Fiscal 2022”), under which certain employees were eligible to vest in Bonus Performance Restricted Units based upon the Company’s achievement of certain performance goals with respect to Fiscal 2022. Based on the Company’s actual Fiscal 2022 results, a portion of these Bonus Performance Restricted Units vested and were converted into approximately 20,000 shares in the three months ended March 31, 2023 and the remaining unvested units forfeited in accordance with their terms.

Long-term Incentive Performance Restricted Awards

Subsequent to March 31, 2023, the Company approved long-term incentive plan awards for 2023 (the “2023 Long-Term Incentive Grant”) which will be granted later in the second quarter and will be comprised of nonqualified stock options (the “Long-Term Incentive Options”) and performance-vesting restricted units (the “Long-Term Incentive Performance Restricted Units”) (collectively, the “Long-Term Incentive Awards”).

Long-Term Incentive Options

The Long-Term Incentive Options will vest over three years, with one-third vesting on each anniversary of the date of grant, subject to continued employment through the applicable vesting date. Equity compensation expense for these options will be recognized for each tranche over the vesting period using the straight-line method. Upon stock option exercises, authorized but unissued shares will be issued by the Company.

Long-Term Incentive Performance Restricted Units

The Long-Term Incentive Performance Restricted Units are eligible to vest during the three-year performance period beginning on January 1, 2023 and ending on December 31, 2025 (or, extended through December 31, 2026, as applicable) (the “Performance Period”) based upon the Company’s achievement of specified performance goals during the Performance Period. The total number of Long-Term Incentive Performance Restricted Units eligible to vest will be based on the level of achievement of the performance goals and ranges from 0% (if below threshold performance) up to 150% (for maximum performance). Upon achievement of at least the threshold performance goals, 50% of the award for a given level of performance will vest, with the remaining 50% subject to a one-year performance test period. Performance for the test period must meet or exceed the prior year’s performance before up to the remaining 50% of the units can be earned.

Other

During the three months ended March 31, 2023, a portion of the previously granted long-term incentive performance restricted units under the 2019 Long-Term Incentive Plan vested based on the Company’s actual Fiscal 2022 results. The remainder of the 2019 Long-Term Incentive Plan awards are eligible to vest in 2024.

The Company recognizes equity compensation expense for its performance-vesting restricted awards ratably over the related performance period, if the performance condition is probable of being achieved. If the probability of vesting changes for performance-vesting restricted awards in a subsequent period, all equity compensation expense related to those awards that would have been recorded, if any, over the requisite service period had the new percentage been applied from inception, will be recorded as a cumulative catch-up or reduction at such subsequent date.

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Stockholders' Deficit

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Stockholders' Deficit

10. STOCKHOLDERS’ DEFICIT

As of March 31, 2023, 96,496,784 shares of common stock were issued in the accompanying unaudited condensed consolidated balance sheet, which includes 32,376,539 shares of treasury stock held by the Company (see Share Repurchase Programs discussion which follows) but excludes 1,214,561 unvested restricted stock awards held by certain participants in the Company’s equity compensation plans or members of the Board (see Note 9–Equity-Based Compensation).

Share Repurchase Programs

The Board had previously authorized a share repurchase program of up to $250.0 million of the Company’s common stock (the “Former Share Repurchase Program”). On March 10, 2022, the Board approved a replenishment to the Former Share Repurchase Program of $228.2 million, bringing the total amount authorized for future share repurchases back up to $250.0 million. During the three months ended March 31, 2022, the Company repurchased 1,535,427 shares for an aggregate total of approximately $109.9 million. As of March 31, 2023, there is no amount remaining under the Former Share Repurchase Program.

In August 2022, the Board approved a new $250.0 million share repurchase program (the “Share Repurchase Program”) of which approximately $56.4 million remained available as of March 31, 2023. Subsequent to March 31, 2023, the Company repurchased 235,000 shares for an aggregate total of approximately $13.9 million, leaving approximately $42.4 million remaining under the Share Repurchase Program as of May 4, 2023.

Under the Share Repurchase Program, the Company is authorized to repurchase shares through open market purchases, privately-negotiated transactions or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The Share Repurchase Program has no time limit and may be suspended or discontinued completely at any time. The number of shares to be purchased and the timing of purchases will be based on the Company’s trading windows and available liquidity, general business and market conditions, and other factors, including legal requirements, share ownership thresholds, debt covenant restrictions, future tax implications and alternative investment opportunities.

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Description of the Business and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Description of the Business

Description of the Business

SeaWorld Entertainment, Inc., through its wholly-owned subsidiary, SeaWorld Parks & Entertainment, Inc. (“SEA”) (collectively, the “Company”), owns and operates twelve theme parks within the United States. The Company operates SeaWorld theme parks in Orlando, Florida; San Antonio, Texas; and San Diego, California; and Busch Gardens theme parks in Tampa, Florida and Williamsburg, Virginia. The Company operates water park attractions in Orlando, Florida (Aquatica); San Antonio, Texas (Aquatica); Tampa, Florida (Adventure Island); and Williamsburg, Virginia (Water Country USA). The Company also operates a reservations-only theme park in Orlando, Florida (Discovery Cove) and Sesame Place theme parks in Langhorne, Pennsylvania and Chula Vista, California.

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, 2022 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K.

In the opinion of management, such unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations for the year ending December 31, 2023 or any future period due in part to the seasonal nature of the Company’s operations. Based upon historical results, the Company typically generates its highest revenues in the second and third quarters of each year and incurs a net loss in the first quarter, in part because four of its theme parks were historically only open for a portion of the year. In the year ended December 31, 2022, we opened our Sesame Place San Diego park which has been, and is expected to continue to be, open more operating days than the Aquatica San Diego park it replaced, particularly in the first and fourth quarters of the year.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including SEA. All intercompany accounts have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions include, but are not limited to, the accounting for self-insurance, deferred tax assets and liabilities, deferred revenue, equity compensation, the valuation of goodwill and other indefinite-lived intangible assets and reviews for potential impairment of long-lived assets. Estimates are based on various factors including current and historical trends, as well as other pertinent company and industry data. The Company regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes. Actual results could differ from those estimates.

Segment Reporting

Segment Reporting

The Company maintains discrete financial information for each of its twelve theme parks, which is used by the Chief Operating Decision Maker (“CODM”), as a basis for allocating resources and assessing performance. Each theme park has been identified as an operating segment and meets the criteria for aggregation due to similar economic characteristics. In addition, all of the Company’s theme parks provide similar products and services and share similar processes for delivering services. The theme parks have a high degree of similarity in the workforces and target similar consumer groups. Accordingly, based on these economic and operational similarities and the way the CODM monitors and makes decisions affecting the operations, the Company has concluded that its operating segments may be aggregated and that it has one reportable segment.

Restricted Cash

Restricted Cash

Restricted cash is recorded in prepaid expenses and other current assets in the accompanying unaudited condensed consolidated balance sheets. Restricted cash as of December 31, 2022 consists primarily of advanced funds for which costs have yet to be incurred related to the Company’s international services agreements, as discussed in the “International Agreements” section which follows.

	March 31,		December 31,
	2023		2022
	(In thousands)
Cash and cash equivalents	$	54,761	$	79,196
Restricted cash, included in prepaid expenses and other current assets		—		3,124
Total cash, cash equivalents and restricted cash	$	54,761	$	82,320

Share Repurchase Programs and Treasury Stock

Share Repurchase Programs and Treasury Stock

From time to time, the Company’s Board of Directors (the “Board”) may authorize share repurchases of common stock. Shares repurchased under Board authorizations are currently held in treasury for general corporate purposes. The Company accounts for treasury stock on the trade date under the cost method. Treasury stock at March 31, 2023 and December 31, 2022 is reflected within stockholders’ deficit. See further discussion of the Company’s share repurchase programs in Note 10–Stockholders’ Deficit.

Revenue Recognition

Revenue Recognition

Admissions revenue primarily consists of single-day tickets, annual or season passes or other multi-day or multi-park admission products. For single-day tickets, the Company recognizes revenue at a point in time, upon admission to the park. Annual passes, season passes, or other multi-day or multi-park passes allow guests access to specific parks over a specified time period. For these pass and multi-use products, revenue is deferred and recognized over the terms of the admission product based on estimated redemption rates for similar products and is adjusted periodically. The Company estimates redemption rates using historical and forecasted attendance trends by park for similar products. Attendance trends factor in seasonality and are adjusted based on actual trends periodically. These estimated redemption rates impact the timing of when revenue is recognized on these products. Actual results could materially differ from these estimates based on actual attendance patterns. Revenue is recognized on a pro-rata basis based on the estimated allocated selling price of the admission product. For pass products purchased on an installment plan that have met their initial commitment period and have transitioned to a month-to-month basis, monthly charges are recognized as revenue as payments are received each month. For certain multi-day admission products, revenue is allocated based on the number of visits included in the pass and recognized ratably based on each admission into the theme park.

Food, merchandise and other revenue primarily consists of food and beverage, retail, merchandise, parking, other in-park products and service fees, and other miscellaneous revenue, including online transaction fees and revenue from the Company’s international agreements, not necessarily generated in our parks, which is not significant in the periods presented. The Company recognizes revenue for food and beverage, merchandise and other in-park products when the related products or services are received by the guests.

Deferred revenue primarily includes revenue associated with pass products, admission or in-park products or services with a future intended use date and contract liability balances related to licensing and international agreements collected in advance of the Company satisfying its performance obligations and is expected to be recognized in future periods. At March 31, 2023 and December 31, 2022, the long-term portion of deferred revenue included in other liabilities in the accompanying unaudited condensed consolidated balance sheets primarily relates to the Company’s international agreements, as discussed in the following section.

The following table reflects the Company’s deferred revenue balance as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
Deferred revenue, including long-term portion	$	227,605	$	183,772
Less: Deferred revenue, long-term portion, included in other liabilities		14,806		14,237
Deferred revenue, short-term portion	$	212,799	$	169,535

The Company estimates approximately $75.4 million of the deferred revenue, short term portion, balance outstanding as of December 31, 2022 was recognized as revenue during the three months ended March 31, 2023. For certain admission products, the Company estimated timing of redemption using average historical redemption rates.

International Agreements

The Company has previously received $10.0 million in deferred revenue which is recorded in other liabilities related to a nonrefundable payment received from a partner in connection with a project in the Middle East to provide certain services pertaining to the planning and design of SeaWorld Abu Dhabi, a marine life theme park on Yas Island (the “Middle East Project”), with funding received expected to offset internal expenses. The Middle East Project is on track with the park scheduled to open in May 2023. The Company also receives additional funds from its partner related to agreed-upon services and reimbursements of costs incurred by the Company on behalf of the Middle East Project (the “Middle East Services Agreements”).

Revenue and expenses associated with the Middle East Project will begin to be recognized when substantially all the services have been performed which is anticipated to occur in 2023, when SeaWorld Abu Dhabi is expected to open. Revenue and expenses associated with the Middle East Services Agreements will be recognized upon completion of the respective performance obligations.

As a result of the Middle East Project, approximately $0.6 million and $0.5 million of costs incurred by the Company are recorded in prepaid expenses and other current assets as of March 31, 2023 and December 31, 2022, respectively, and approximately $11.7 million and $11.2 million of other related costs incurred are recorded in other assets in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively. Separately, deferred revenue of approximately $0.7 million and $0.6 million is recorded in deferred revenue as of March 31, 2023 and December 31, 2022, respectively, and approximately $14.5 million and $14.2 million of long-term deferred revenue is recorded in other liabilities in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively, related to the Middle East Project, which includes the $10.0 million nonrefundable payment previously discussed for each period.

As a result of the Middle East Services Agreements, approximately $2.0 million of costs incurred by the Company are recorded in prepaid expenses and other current assets in the accompanying unaudited condensed consolidated balance sheets as December 31, 2022. Separately, deferred revenue of approximately $0.9 million and $5.1 million is recorded in deferred revenue in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively.

Recently Issued Accounting Pronouncements

The Company reviews new accounting pronouncements as they are issued or proposed by the Financial Accounting Standards Board (“FASB”). There are no recent accounting pronouncements or recently implemented accounting standards that are expected to have a material impact on the Company’s unaudited condensed consolidated financial statements or disclosures.

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Description of the Business and Basis of Presentation (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule Of Cash Cash Equivalents And Restricted Cash

Restricted cash is recorded in prepaid expenses and other current assets in the accompanying unaudited condensed consolidated balance sheets. Restricted cash as of December 31, 2022 consists primarily of advanced funds for which costs have yet to be incurred related to the Company’s international services agreements, as discussed in the “International Agreements” section which follows.

	March 31,		December 31,
	2023		2022
	(In thousands)
Cash and cash equivalents	$	54,761	$	79,196
Restricted cash, included in prepaid expenses and other current assets		—		3,124
Total cash, cash equivalents and restricted cash	$	54,761	$	82,320

Deferred Revenue Balances

The following table reflects the Company’s deferred revenue balance as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022
	(In thousands)
Deferred revenue, including long-term portion	$	227,605	$	183,772
Less: Deferred revenue, long-term portion, included in other liabilities		14,806		14,237
Deferred revenue, short-term portion	$	212,799	$	169,535

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Loss per Share (Tables)

3 Months Ended

Mar. 31, 2023

Loss Per Share [Abstract]

Schedule of Loss per Share

Loss per share is computed as follows:

	For the Three Months Ended March 31,
	2023								2022
	Net Loss			Shares		Per Share Amount			Net Loss			Shares		Per Share Amount
	(In thousands, except per share amounts)
Basic loss per share	$	(16,467	)		63,978	$	(0.26	)	$	(8,987	)		75,624	$	(0.12	)
Effect of dilutive incentive-based awards					—								—
Diluted loss per share	$	(16,467	)		63,978	$	(0.26	)	$	(8,987	)		75,624	$	(0.12	)

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Other Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Schedule of Other Accrued Liabilities

Other accrued liabilities at March 31, 2023 and December 31, 2022, consisted of the following:

	March 31,		December 31,
	2023		2022
	(In thousands)
Accrued interest	$	13,347	$	18,483
Accrued taxes		7,134		3,284
Self-insurance reserve		8,623		8,608
Other		16,731		16,539
Total other accrued liabilities	$	45,835	$	46,914

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Summary of Long-Term Debt, Net

Long-term debt, net, as of March 31, 2023 and December 31, 2022 consisted of the following:

	March 31,			December 31,
	2023			2022
	(In thousands)
Term B Loans (effective interest rate of 7.88% and 7.44% at March 31, 2023 and December 31, 2022 respectively)	$	1,182,000		$	1,185,000
Senior Notes due 2029 (interest rate of 5.25%)		725,000			725,000
First-Priority Senior Secured Notes due 2025 (interest rate of 8.75%)		227,500			227,500
Total long-term debt		2,134,500			2,137,500
Less: unamortized discounts and debt issuance costs		(24,899	)		(26,441	)
Less: current maturities		(12,000	)		(12,000	)
Total long-term debt, net	$	2,097,601		$	2,099,059

Summary of Long-Term Debt Repayable

Long-term debt at March 31, 2023 is repayable as follows and does not include the impact of any future voluntary prepayments:

Years Ending December 31,	(In thousands)
Remainder of 2023	$	9,000
2024		12,000
2025		239,500
2026		12,000
2027		12,000
Thereafter		1,850,000
Total	$	2,134,500

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of Estimated Fair Value Measurements and Related Classifications for Liabilities Measured on a Recurring Basis

The following table presents the Company’s estimated fair value measurements and related classifications for liabilities measured on a recurring basis as of March 31, 2023.

	Quoted Prices in
	Active Markets		Significant
	for Identical		Other		Significant
	Assets and		Observable		Unobservable		Balance at
	Liabilities		Inputs		Inputs		March 31,
	(Level 1)		(Level 2)		(Level 3)		2023
Liabilities:	(In thousands)
Long-term obligations (a)	$	866,425	$	1,182,000	$	—	$	2,048,425

(a) Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $12.0 million and long-term debt, net, of $2.098 billion as of March 31, 2023.

The following table presents the Company’s estimated fair value measurements and related classifications for liabilities measured on a recurring basis as of December 31, 2022:

	Quoted Prices in
	Active Markets		Significant
	for Identical		Other		Significant
	Assets and		Observable		Unobservable		Balance at
	Liabilities		Inputs		Inputs		December 31,
	(Level 1)		(Level 2)		(Level 3)		2022
Liabilities:	(In thousands)
Long-term obligations (a)	$	873,675	$	1,185,000	$	—	$	2,058,675

(a) Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $12.0 million and long-term debt, net, of $2.099 billion as of December 31, 2022.

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Equity-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Equity Compensation Expense

Equity compensation expense is included in operating expenses and in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations as follows:

	For the Three Months Ended March 31,
	2023		2022
	(In thousands)
Equity compensation expense included in operating expenses	$	534	$	1,965
Equity compensation expense included in selling, general and administrative expenses		3,948		5,017
Total equity compensation expense	$	4,482	$	6,982

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Description of the Business and Basis of Presentation - Additional Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($) Business Segment	Dec. 31, 2022 USD ($)
Business Description And Basis Of Presentation [Line Items]
Number of theme parks owned and operated | Business	12
Number of reportable segment | Segment	1
Deferred revenue recognized	$ 75,400
Long-term deferred revenue	14,806	$ 14,237
Middle East Project [Member]
Business Description And Basis Of Presentation [Line Items]
Deferred costs incurred under Middle East Project	11,700	11,200
Deferred revenue	700	600
Middle East Project [Member] | Middle East Services Agreements [Member]
Business Description And Basis Of Presentation [Line Items]
Deferred revenue	900	5,100
Middle East Project [Member] | Other Liabilities [Member]
Business Description And Basis Of Presentation [Line Items]
Long-term deferred revenue	10,000	10,000
Deferred revenue, long-term	14,500	14,200
Middle East Project [Member] | Prepaid Expenses and Other Current Assets [Member]
Business Description And Basis Of Presentation [Line Items]
Deferred costs incurred under Middle East Project	$ 600	500
Middle East Project [Member] | Prepaid Expenses and Other Current Assets [Member] | Middle East Services Agreements [Member]
Business Description And Basis Of Presentation [Line Items]
Deferred costs incurred under Middle East Project		$ 2,000

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Description of the Business and Basis of Presentation - Summary of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract]
Cash and cash equivalents	$ 54,761	$ 79,196
Restricted cash, included in prepaid expenses and other current assets		$ 3,124
Restricted cash, current, asset, statement of financial position [extensible list]		Prepaid expenses and other current assets
Total cash, cash equivalents and restricted cash	$ 54,761	$ 82,320	$ 380,612	$ 444,486

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Description of the Business and Basis of Presentation - Deferred Revenue Balances (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Deferred Revenue Disclosure [Abstract]
Deferred revenue, including long-term portion	$ 227,605	$ 183,772
Less: Deferred revenue, long-term portion, included in other liabilities	14,806	14,237
Deferred revenue, short-term portion	$ 212,799	$ 169,535

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Loss per Share - Schedule of Loss per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Basic loss per share	$ (16,467)	$ (8,987)
Diluted loss per share	$ (16,467)	$ (8,987)
Basic loss, shares	63,978	75,624
Diluted loss, shares	63,978	75,624
Loss per share, basic	$ (0.26)	$ (0.12)
Loss per share, diluted	$ (0.26)	$ (0.12)

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Loss per Share - Additional Information (Detail) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Loss Per Share [Line Items]
Potentially dilutive securities excluded from computation of loss per share	1,225,000	1,555,000
Performance-vesting Restricted Stock Awards [Member]
Loss Per Share [Line Items]
Contingently issuable shares excluded from the calculation of diluted loss per share	610,000	1,057,000

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Income Tax Disclosure [Line Items]
Effective tax rate	33.30%	41.40%
Income tax rate at federal statutory rates	21.00%	21.00%
Percentage of corporate alternative minimum tax	15.00%
Percentage of excise tax on stock repurchases	1.00%
State Tax Credit Carry Forwards [Member]
Income Tax Disclosure [Line Items]
Deferred tax assets, valuation allowance	$ 4.6		$ 4.6

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Other Accrued Liabilities - Schedule of Other Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued interest	$ 13,347	$ 18,483
Accrued taxes	7,134	3,284
Self-insurance reserve	8,623	8,608
Other	16,731	16,539
Total other accrued liabilities	$ 45,835	$ 46,914

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Other Accrued Liabilities - Additional Information (Detail) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Certain contractual obligations from temporary COVID-19 park closures	$ 10.9	$ 10.9

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Long-Term Debt - Summary of Long-Term Debt, Net (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Long-term debt	$ 2,134,500	$ 2,137,500
Less: unamortized discounts and debt issuance costs	(24,899)	(26,441)
Less: current maturities	(12,000)	(12,000)
Total long-term debt, net	2,097,601	2,099,059
Senior Notes [Member]
Debt Instrument [Line Items]
Long-term debt	725,000	725,000
Term B Loans [Member]
Debt Instrument [Line Items]
Long-term debt	1,182,000	1,185,000
First-Priority Senior Secured Notes [Member]
Debt Instrument [Line Items]
Long-term debt	$ 227,500	$ 227,500

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Long-Term Debt - Summary of Long-Term Debt, Net (Parenthetical) (Detail)	Mar. 31, 2023	Dec. 31, 2022	Aug. 25, 2021
Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument interest rate percentage	5.25%	5.25%	5.25%
Term B Loans [Member]
Debt Instrument [Line Items]
Debt instrument interest rate effective percentage	7.88%	7.44%
First-Priority Senior Secured Notes [Member]
Debt Instrument [Line Items]
Debt instrument interest rate percentage	8.75%	8.75%

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Long-Term Debt - Additional Information (Detail) - USD ($) $ in Millions				3 Months Ended
	Jun. 09, 2022	Aug. 25, 2021	Apr. 30, 2020	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Debt Instrument [Line Items]
Outstanding letters of credit				$ 18.4
Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Debt Instrument Redemption Description		In addition, the Senior Secured Credit Facilities require the Company to prepay outstanding term loan borrowings, subject to certain exceptions, with:-50% (which percentage will be reduced to 25% and 0% if the Company satisfies certain net first lien senior secured leverage ratios) of annual excess cash flow, as defined under the Senior Secured Credit Facilities;-100% of the net cash proceeds of all non-ordinary course asset sales or other non-ordinary course dispositions of property, in each case subject to certain exceptions and reinvestment rights;-100% of the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Senior Secured Credit Facilities.
Letter of credit participation fees				0.125%
Cash paid for interest				$ 40.0	$ 27.6
Senior Notes [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date		Aug. 15, 2029
Senior debt		$ 725.0
Debt instrument interest rate percentage		5.25%		5.25%		5.25%
Debt Instrument Redemption Description		On or after August 15, 2024, SEA may redeem the Senior Notes, in whole at any time or in part from time to time, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12-month period commencing on August 15 of the years as follows: (i) in 2024 at 102.625%; (ii) in 2025 at 101.313%; and (iii) in 2026 and thereafter at 100%. In addition, prior to August 15, 2024, SEA may redeem the Senior Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus the “Applicable Premium” and accrued and unpaid interest, if any, to, but excluding, the redemption date. Notwithstanding the foregoing, subject to the provisions set forth in the Indenture, at any time and from time to time on or prior to August 15, 2024, SEA may redeem in the aggregate up to 40% of the original aggregate principal amount of the Senior Notes (calculated after giving effect to any issuance of additional Senior Notes) in an aggregate amount equal to the net cash proceeds of one or more equity offerings at a redemption price equal to 105.250%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Additionally, upon the occurrence of specified change of control events, each holder will have the right to require SEA to repurchase all or any part of such holder’s notes at a purchase price in cash equal to 101%.
Interest accrue on senior notes		5.25%
Redemption percentage		100.00%
Initial aggregate principal amount, allowable redeemable percentage		40.00%
Equity offerings at redemption price		105.25%
Percentage Of notes redeemable after change of control		101.00%
Senior Notes [Member] | Debt Instrument Redemption Period One [Member]
Debt Instrument [Line Items]
Redemption percentage		102.625%
Senior Notes [Member] | Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Redemption percentage		101.313%
Senior Notes [Member] | Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Redemption percentage		100.00%
First-Priority Senior Secured Notes [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date			May 01, 2025
Debt instrument interest rate percentage			8.75%
Debt Instrument Redemption Description			SEA may redeem the First-Priority Senior Secured Notes at its option, in whole at any time or in part from time to time, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12-month period commencing on May 1 of the years as follows: (i) in 2022 at 104.375%; (ii) in 2023 at 102.188%; and (iii) in 2024 and thereafter at 100%. SEA may also redeem in the aggregate (at a redemption price expressed as a percentage of principal amount thereof): (i) 100% of the First-Priority Senior Secured Notes after certain events constituting a change of control at a redemption price of 101%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date and (ii) up to 40% of the original aggregate principal amount of the First-Priority Senior Secured Notes with amounts equal to the net cash proceeds of certain equity offerings at a redemption price of 108.750%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.
Percentage of interest in subsidiary			100.00%
First-Priority Senior Secured Notes [Member] | Debt Instrument Redemption Period One [Member]
Debt Instrument [Line Items]
Redemption percentage			104.375%
First-Priority Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Redemption percentage			102.188%
First-Priority Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Redemption percentage			100.00%
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Incremental amendment to revolving facility commitments	$ 5.0
Long term debt, outstanding amount				$ 371.6
Revolving Credit Facility [Member] | Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Debt instrument, maturity date		Aug. 25, 2026
Aggregate principal amount	$ 390.0	$ 385.0
Commitment fee payable by the company				0.50%
Restrictive Covenants [Member]
Debt Instrument [Line Items]
Total net leverage ratio not to be exceeded				425.00%
Restrictive Covenants [Member] | Debt Agreement [Member]
Debt Instrument [Line Items]
Total net leverage ratio, as calculated				271.00%
Maximum [Member] | Restrictive Covenants [Member] | Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Credit facility agreement maximum required first lien secured leverage ratio				625.00%
Excludable letters of credit under maximum required first lien secured leverage ratio				$ 30.0
Minimum [Member] | Restrictive Covenants [Member] | Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Credit facility agreement maximum required first lien secured leverage ratio				100.00%
Minimum percentage of funded loan and letters of credit for covenant to apply				35.00%
Restatement Agreement [Member] | Maximum [Member]
Debt Instrument [Line Items]
Senior secured financing		1,585.0
Term B Loans [Member]
Debt Instrument [Line Items]
Aggregate principal amount drawn		$ 1,200.0
Debt instrument, maturity date		Aug. 25, 2028
Term B Loans [Member] | Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Debt Instrument Redemption Description				Borrowings under the Term B Loans bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) a base rate equal to the higher of (a) the federal funds rate plus 1/2 of 1%, (b) the rate of interest quoted in the print edition of the Wall Street Journal Money Rates Section as the prime rate as in effect from time to time and (c) one-month Adjusted LIBOR plus 1% per annum (provided that in no event shall such ABR rate with respect to the Term B Loans be less than 1.50% per annum) (“ABR”), in each case, plus an applicable margin of 2.00% or (ii) a LIBOR rate for the applicable interest period (provided that in no event shall such LIBOR rate with respect to the Term B Loans be less than 0.50% per annum) (“LIBOR”) plus an applicable margin of 3.00%.
Amortization Payments of Term Loan		0.25%
Revolving Loans [Member] | Senior Secured Credit Facilities [Member]
Debt Instrument [Line Items]
Debt Instrument Redemption Description				Borrowings under the Revolving Loans bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) ABR (provided that in no event shall such ABR rate with respect to the Revolving Loans be less than 1.00% per annum) plus an applicable margin equal to 1.75% or (ii) LIBOR (provided that in no event shall such LIBOR rate with respect to the Revolving Loans be less than 0.00%) plus an applicable margin of 2.75%. The applicable margin for borrowings of Revolving Loans are subject to one 25 basis point step-down upon achievement by the Company of certain corporate credit ratings.
Redemption Price One [Member] | First-Priority Senior Secured Notes [Member]
Debt Instrument [Line Items]
Redemption percentage			101.00%
Redemption Price Two [Member] | First-Priority Senior Secured Notes [Member]
Debt Instrument [Line Items]
Redemption percentage			108.75%

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Long-Term Debt - Summary of Long-Term Debt Repayable (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Maturities of Long-Term Debt [Abstract]
Remainder of 2023	$ 9,000
2024	12,000
2025	239,500
2026	12,000
2027	12,000
Thereafter	1,850,000
Long-term debt	$ 2,134,500	$ 2,137,500

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Fair Value Measurements - Additional Information (Detail) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Assets measured at fair value	$ 0	$ 0

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Fair Value Measurements - Schedule of Estimated Fair Value Measurements and Related Classifications for Liabilities Measured on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Long-term obligations	$ 2,048,425	$ 2,058,675
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Long-term obligations	866,425	873,675
Significant Other Observable Inputs (Level 2) [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Long-term obligations	$ 1,182,000	$ 1,185,000

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Fair Value Measurements - Schedule of Estimated Fair Value Measurements and Related Classifications for Liabilities Measured on a Recurring Basis (Parenthetical) (Detail) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Current maturities of long-term debt	$ 12,000	$ 12,000
Total long-term debt, net	$ 2,097,601	$ 2,099,059

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($) SharesAtIssue
Loss Contingencies [Line Items]
Number of shares at issue in legal matter | SharesAtIssue	300,000
License agreement term, description	Pursuant to the License Agreement with Sesame Workshop, the Company pays a specified annual license fee, as well as a specified royalty based on revenues earned in connection with sales of licensed products, all food and beverage items utilizing the licensed elements and any events utilizing such elements if a separate fee is paid for such event. The Company’s principal commitments pursuant to the License Agreement include, among other items, the opening of a second standalone park (“Standalone Park”) (the Company opened the Standalone Park in San Diego on March 26, 2022) and minimum annual capital and marketing thresholds. After the opening of the second Standalone Park (counting the existing Sesame Place Standalone Park in Langhorne, Pennsylvania), SEA has the option to build additional Standalone Parks in the Sesame Territory within agreed upon timelines. The License Agreement has an initial term through December 31, 2031, with an automatic additional 15-year extension plus a five-year option added to the term of the License Agreement from December 31st of the year of each new Standalone Park opening. As of March 31, 2023, the Company estimates the combined remaining liabilities and obligations for the License Agreement commitments could be up to approximately $25.0 million over the remaining term of the agreement. See further discussion concerning royalty payments for the year 2021 in the "Sesame Workshop Arbitration" section above.
Maximum [Member]
Loss Contingencies [Line Items]
Combined remaining liabilities and obligations for License Agreement commitments | $	$ 25.0

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Equity-Based Compensation - Schedule of Equity Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total equity compensation expense	$ 4,482	$ 6,982
Operating Expense [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total equity compensation expense	534	1,965
Selling, General and Administrative Expenses [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total equity compensation expense	$ 3,948	$ 5,017

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Equity-Based Compensation - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2023 shares
Bonus Performance Restricted Units [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Performance restricted units vested	20,000
Long Term Incentive Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period	3 years
Award vesting terms	one-third vesting on each anniversary of the date of grant
Omnibus Incentive Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock reserved for future issuance	15,000,000.0
Shares available for future issuance	7,300,000
2023 Long-Term Incentive Plan Below Threshold Performance [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting percentage, per year	0.00%
Percentage of units earned	50.00%
2023 Long-Term Incentive Plan Maximum Performance [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting percentage, per year	150.00%

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Stockholders' Deficit - Additional Information (Detail) - USD ($)		3 Months Ended
	May 04, 2023	Mar. 31, 2022	Mar. 31, 2023	Dec. 31, 2022	Aug. 31, 2022	Mar. 10, 2022	Dec. 31, 2021
Stockholders Equity [Line Items]
Common stock, shares issued			96,496,784	96,287,771
Treasury stock, shares			32,376,539	32,376,539
Share Repurchase Program [Member]
Stockholders Equity [Line Items]
Share Repurchase Programs, authorized amount					$ 250,000,000.0
Share Repurchase Program, remaining authorized repurchase amount			$ 56,400,000
Share Repurchase Program [Member] | Subsequent Event [Member]
Stockholders Equity [Line Items]
Stock Repurchase Program, number of shares repurchased	235,000
Stock repurchases under Share Repurchase Program	$ 13,900,000
Share Repurchase Program, remaining authorized repurchase amount	$ 42,400,000
Former Share Repurchase Program [Member]
Stockholders Equity [Line Items]
Share Repurchase Programs, authorized amount		$ 250,000,000.0				$ 250,000,000.0
Share Repurchase Programs, replenishment of authorized amount						$ 228,200,000
Stock Repurchase Program, number of shares repurchased		1,535,427
Stock repurchases under Share Repurchase Program		$ 109,900,000
Share Repurchase Program, remaining authorized repurchase amount			$ 0
Common Stock [Member]
Stockholders Equity [Line Items]
Common stock, shares issued		95,838,033	96,496,784	96,287,771			95,541,992
Restricted Stock Units [Member]
Stockholders Equity [Line Items]
Number of unvested shares			1,214,561