Schedule I-Registrant’s Condensed Financial Statements

SEAWORLD ENTERTAINMENT, INC.

PARENT COMPANY ONLY

CONDENSED BALANCE SHEETS

(In thousands, except share and per share amounts)


	December 31,
	2014			2013
Assets
Current Assets:
Cash	$	5,858		$	172
Due from wholly owned subsidiary		—			17,767

Total current assets		5,858			17,939
Investment in wholly owned subsidiary		580,018			648,016

Total assets	$	585,876		$	665,955

Liabilities and Stockholders’ Equity
Current Liabilities:
Dividends payable	$	172		$	17,939
Other accrued expenses		5,686			—

Total current liabilities		5,858			17,939

Total liabilities		5,858			17,939

Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, no shares issued or outstanding at December 31, 2014 and 2013		—			—
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 90,191,100 shares issued at December 31, 2014 and 89,900,453 shares issued at December 31, 2013		902			899
Additional paid-in capital		655,471			689,394
Retained earnings		33,516			1,886
Treasury stock, at cost (4,105,970 shares at December 31, 2014 and 1,500,000 shares at December 31, 2013)		(109,871	)		(44,163	)

Total stockholders’ equity		580,018			648,016

Total liabilities and stockholders’ equity	$	585,876		$	665,955

See accompanying notes to condensed financial statements.

SEAWORLD ENTERTAINMENT, INC.

PARENT COMPANY ONLY

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012

(In thousands)


	Year Ended December 31,
	2014		2013		2012
Equity in net income of subsidiary	$	49,919	$	51,920	$	74,221

Net income	$	49,919	$	51,920	$	74,221

Other comprehensive income		—		—		—

Comprehensive income	$	49,919	$	51,920	$	74,221

See accompanying notes to condensed financial statements.

SEAWORLD ENTERTAINMENT, INC.

PARENT COMPANY ONLY

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012

(In thousands)


	For the Year Ended December 31,
	2014			2013			2012
Cash Flows From Operating Activities:
Net income	$	49,919		$	51,920		$	74,221
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net income of subsidiary		(49,919	)		(51,920	)		(74,221	)
Dividend received from subsidiary-return on capital		36,056			18,072			—

Net cash provided by operating activities		36,056			18,072			—

Cash Flows From Investing Activities:
Capital contributed to subsidiary		—			(249,106	)		—
Restricted payment from subsidiary		65,708			44,163			—
Dividend received from subsidiary-return of capital		36,056			18,072			500,000

Net cash provided by (used in) investing activities		101,764			(186,871	)		500,000

Cash Flows From Financing Activities:
Proceeds from issuance of common stock, net of underwriter commissions		—			253,800			—
Purchase of treasury stock		(60,058	)		(44,163	)		—
Dividend paid to common stockholders		(72,113	)		(36,175	)		(502,977	)
Offering costs		—			(4,694	)		—
Payment of tax withholdings on equity-based compensation		37			—			—

Net cash (used in) provided by financing activities		(132,134	)		168,768			(502,977	)

Change in Cash and Cash Equivalents		5,686			(31	)		(2,977	)
Cash and Cash Equivalents — Beginning of year		172			203			3,180

Cash and Cash Equivalents — End of year	$	5,858		$	172		$	203

Supplemental Disclosures of Noncash Financing Activities
Dividends declared, but unpaid	$	172		$	17,939		$	203

Treasury stock purchases settled in January 2015	$	5,650		$	—		$	—

See accompanying notes to condensed financial statements.

SEAWORLD ENTERTAINMENT, INC.

NOTES TO CONDENSED PARENT COMPANY ONLY FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

1. DESCRIPTION OF SEAWORLD ENTERTAINMENT, INC.

SeaWorld Entertainment, Inc. (the “Parent”) was incorporated in Delaware on October 2, 2009. At that time, the Parent was owned by ten limited partnerships (the “Partnerships” or the “selling stockholders”), ultimately owned by affiliates of The Blackstone Group L.P. (“Blackstone”) and certain co-investors. The Parent has no operations or significant assets or liabilities other than its investment in SeaWorld Parks & Entertainment, Inc. (“SEA”), which owns and operates eleven theme parks within the United States. Accordingly, the Parent is dependent upon distributions from SEA to fund its obligations. However, under the terms of SEA’s various debt agreements, SEA’s ability to pay dividends or lend to the Parent is restricted, except that SEA may pay specified amounts to the Parent to fund the payment of the Parent’s tax obligations.

2. BASIS OF PRESENTATION

The accompanying condensed financial statements (the “parent company only financial statements”) include the accounts of the Parent and its investment in SEA accounted for in accordance with the equity method, and do not present the financial statements of the Parent and its subsidiary on a consolidated basis. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted since this information is included with the SeaWorld Entertainment, Inc. consolidated financial statements included elsewhere in this Annual Report on Form 10-K (the “consolidated financial statements”). These parent company only financial statements should be read in conjunction with the consolidated financial statements.

Certain prior year amounts have been revised to correct the effect of immaterial errors on certain debt transactions in 2011, 2012 and 2013 incurred by SEA. See further discussion in the Revision of Previously Issued Financial Statements section of Note 11–Long-Term Debt of the accompanying consolidated financial statements.

3. GUARANTEES

On December 1, 2009, SEA entered into senior secured credit facilities (the “Senior Secured Credit Facilities”) and issued senior notes (the “Senior Notes”). The Senior Secured Credit Facilities were amended effective on February 17, 2011, April 15, 2011, March 30, 2012, April 24, 2013, May 14, 2013 and August 9, 2013. See further discussion in Note 11–Long-Term Debt of the accompanying consolidated financial statements.

Under the terms of the Senior Secured Credit Facilities, the obligations of SEA are fully, unconditionally and irrevocably guaranteed by Parent, any subsidiary of Parent that directly or indirectly owns 100% of the issued and outstanding equity interest of SEA, and subject to certain exceptions, each of SEA’s existing and future material domestic wholly-owned subsidiaries (collectively, the “Guarantors”).

The obligations under the Senior Notes are guaranteed by the same Guarantors as under the Senior Secured Credit Facilities. In the event of a default under the Senior Notes, the principal and accrued interest would become immediately due and payable (subject to, in some cases, grace periods).

4. DIVIDENDS FROM SUBSIDIARIES

In June 2013, SEA’s Board of Directors (the “Board”) adopted a policy to pay a regular quarterly cash dividend to the Parent (defined as a restricted payment in the Senior Secured Credit Facilities). As a result, SEA paid a cash dividend to the Parent of $17,766, $18,290 and $18,290 on April 1, July 1 and October 6, 2014 related to 2014 declarations and SEA paid a cash dividend to the Parent of $18,072, $18,072 and $17,767 on July 1, 2013, October 1, 2013 and January 3, 2014, respectively, related to 2013 declarations. As SEA had an accumulated deficit at the time the April 1, 2014, July 1, 2014 and July 1, 2013 dividends were declared to the Parent, these dividends were accounted for as a return of capital by the Parent. The remaining dividends from SEA have been reflected as a return on capital in the accompanying condensed financial statements.

Also in June 2013, the Parent’s Board adopted a policy to pay a regular quarterly dividend (defined as a restricted payment in the Senior Secured Credit Facilities). The payment of cash dividends is within the discretion of the Board and depends on many factors, including, but not limited to, SEA’s results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in its debt agreements and in any preferred stock, business prospects and other factors that the Board may deem relevant.

During the years ended December 31, 2014 and 2013, the Parent’s Board declared or paid quarterly cash dividends to all common stockholders of record as follows:


Record Date	Payment Date	Cash Dividend per Common Share
June 20, 2013	July 1, 2013	$	0.20
September 20, 2013	October 1, 2013	$	0.20
December 20, 2013	January 3, 2014	$	0.20
March 20, 2014	April 1, 2014	$	0.20
June 20, 2014	July 1, 2014	$	0.21
September 29, 2014	October 6, 2014	$	0.21

As of December 31, 2014, the Parent had $172 of cash dividends payable included in dividends payable in the accompanying condensed balance sheet. See Note 19–Stockholders’ Equity of the accompanying consolidated financial statements for further discussion.

On January 5, 2015, SEA’s Board declared a cash dividend of up to $18,112 to the Parent, which was paid on January 22, 2015. Additionally, the Parent’s Board declared a cash dividend of $0.21 per share to all common stockholders of record at the close of business on January 13, 2015, which was paid on January 22, 2015.

The Parent received dividends in the amount of $500,000 from SEA on March 30, 2012 which have been reflected as a return of capital in the accompanying condensed financial statements. On that same date, the Parent declared dividends (defined as a restricted payment in the Senior Secured Credit Facilities) of $500,000 to the Partnerships. This dividend has also been reflected as a return of capital in the accompanying condensed financial statements.

5. STOCKHOLDERS’ EQUITY

Stock Split and Authorized Shares

On April 7, 2013, the Parent’s Board authorized an eight-for-one split of the Parent’s common stock which was effective on April 8, 2013. The Parent retained the current par value of $0.01 per share for all shares of common stock after the stock split, and accordingly, stockholders’ equity on the accompanying condensed balance sheet reflects the stock split. The Parent’s historical share information has been retroactively adjusted to give effect to this stock split.

Contemporaneously with the stock split, on April 8, 2013, the Parent’s Board approved an increase in the number of authorized shares of common stock to 1 billion shares. Additionally, upon the consummation of the initial public offering, the Parent’s Board authorized 100,000,000 shares of preferred stock at a par value of $0.01 per share.

Omnibus Incentive Plan

The Parent reserved 15,000,000 shares of common stock for future issuance under the 2013 Omnibus Incentive Plan (“Omnibus Incentive Plan”). The Omnibus Incentive Plan is administered by the compensation committee of the Parent’s Board, and provides that the Parent may grant equity incentive awards to eligible employees, directors, consultants or advisors of the Parent or its subsidiary, SEA, in the form of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based and performance compensation awards. If an award under the Omnibus Incentive Plan terminates, lapses, or is settled without the payment of the full number of shares subject to the award, the undelivered shares may be granted again under the Omnibus Incentive Plan. See further discussion in Note 18–Equity-Based Compensation of the accompanying consolidated financial statements.

Initial Public Offering and Use of Proceeds

On April 24, 2013, the Parent completed an initial public offering of its common stock in which it offered and sold 10,000,000 shares of common stock and the selling stockholders of the Parent offered and sold 19,900,000 shares of common stock including, 3,900,000 shares of common stock pursuant to the exercise in full of the underwriters’ over-allotment option. The shares offered and sold in the offering were registered under the Securities Act pursuant to the Parent’s Registration Statement on Form S-1, which was declared effective by the Securities and Exchange Commission on April 18, 2013. The common stock is listed on the New York Stock Exchange under the symbol “SEAS”.

The Parent’s shares of common stock were sold at an initial public offering price of $27.00 per share, which generated net proceeds of approximately $245,400 to the Parent after deducting underwriting discounts and commissions, expenses and transaction costs. Subsequent to the initial public offering, the Parent transferred the net proceeds to SEA as a capital contribution and increased its investment in SEA. The Parent did not receive any proceeds from shares sold by the selling stockholders.

Secondary Offerings and Concurrent Share Repurchases

On December 17, 2013, the selling stockholders completed an underwritten secondary offering of 18,000,000 shares of common stock. The selling stockholders received all of the net proceeds from the offering and no shares were sold by the Parent.

On April 9, 2014, the selling stockholders completed an underwritten secondary offering of 17,250,000 shares of common stock, including 2,250,000 shares pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The selling stockholders received all of the net proceeds from the offering and no shares were sold by the Parent.

Concurrently with the closing of the secondary offering in December 2013 and April 2014, the Parent repurchased 1,500,000 and 1,750,000 shares, respectively, of its common stock directly from the selling stockholders in private, non-underwritten transactions at a price per share equal to the price per share paid to the selling stockholders by the underwriters in the respective secondary offerings.

Share Repurchase Program

On August 12, 2014, the Parent’s Board authorized the repurchase of up to $250,000 of the Company’s common stock beginning on January 1, 2015 (the “Share Repurchase Program”). On December 16, 2014, the Board approved an amendment to the Share Repurchase Program to change the start date of such program from January 1, 2015 to December 17, 2014 and to authorize the repurchase of up to $15,000 of the Company’s common stock during the remainder of calendar year 2014. The other features of the Share Repurchase Program remained unchanged including the total amount authorized and available under the program of $250,000. Under the Share Repurchase Program, the Parent 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 level of the Company’s cash balances, general business and market conditions, and other factors, including legal requirements, debt covenant restrictions and alternative investment opportunities.

As a result of the Share Repurchase Program, during the fourth quarter of 2014, the Parent entered into a written trading plan under Rule 10b5-1 of the Exchange Act and repurchased a total of 855,970 shares of common stock at an average price of $17.50 per share and a total cost of approximately $15,000, leaving $235,000 available for future repurchases under the Share Repurchase Program. As of December 31, 2014, $5,650 related to certain shares of common stock repurchased in 2014 is included in other accrued expenses on the accompanying parent company only condensed balance sheet and was paid in January 2015.

All of the repurchased shares from the Share Repurchase Program and the shares repurchased directly from the selling stockholders during December 2013 and April 2014 were recorded as treasury stock at a total cost of $109,871 and $44,163 as of December 31, 2014 and 2013, respectively, and are reflected as a reduction to stockholders’ equity on the accompanying condensed balance sheets. SEA transferred $65,708 and $44,163 during the years ended December 31, 2014 and 2013, respectively, as restricted payments to the Parent for the payment of the repurchased shares.