SEAWORLD ENTERTAINMENT, INC.
PARENT COMPANY ONLY
CONDENSED BALANCE SHEETS
(In thousands, except share and per share amounts)
	December 31,
	2018			2017
Assets
Current Assets:
Cash	$	136		$	470
Total current assets		136			470
Investment in wholly owned subsidiary		265,194			287,466
Total assets	$	265,330		$	287,936
Liabilities and Stockholders' Equity
Current Liabilities:
Dividends payable	$	84		$	470
Other accrued liabilities		52			—
Total current liabilities		136			470
Total liabilities		136			470
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, no shares issued or outstanding at December 31, 2018 and 2017		—			—
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 93,400,929 and 92,637,403 shares issued at December 31, 2018 and 2017, respectively		934			926
Additional paid-in capital		663,834			641,324
Accumulated other comprehensive gain (loss)		2,284			(5,076	)
Accumulated deficit		(148,955	)		(194,837	)
Treasury stock, at cost (10,174,589 and 6,519,773 shares at December 31, 2018 and 2017, respectively)		(252,903	)		(154,871	)
Total stockholders' equity		265,194			287,466
Total liabilities and stockholders' equity	$	265,330		$	287,936

SEAWORLD ENTERTAINMENT, INC.
PARENT COMPANY ONLY
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016
(In thousands)

	Year Ended December 31,
	2018		2017			2016
Equity in net income (loss) of subsidiary	$	44,788	$	(202,386	)	$	(12,531	)
Net income (loss)	$	44,788	$	(202,386	)	$	(12,531	)
Equity in other comprehensive income (loss) of subsidiary		8,454		8,618			(557	)
Comprehensive income (loss)	$	53,242	$	(193,768	)	$	(13,088	)

SEAWORLD ENTERTAINMENT, INC.
PARENT COMPANY ONLY
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016
(In thousands)
	For the Year Ended December 31,
	2018			2017			2016
Cash Flows From Operating Activities:
Net income (loss)	$	44,788		$	(202,386	)	$	(12,531	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in net (income) loss of subsidiary		(44,788	)		202,386			12,531
Dividends (forfeited) received from subsidiary-return on capital, net of forfeitures		—			(31	)		26,412
Net cash (used in) provided by operating activities		—			(31	)		26,412
Cash Flows From Investing Activities:
Dividends (forfeited) received from subsidiary- return of capital, net of forfeitures		(61	)		1,137			39,372
Capital contributed to subsidiary from exercises of stock options		(4,230	)		—			—
Net cash (used in) provided by investing activities		(4,291	)		1,137			39,372
Cash Flows From Financing Activities:
Exercise of stock options		4,282			—			—
Dividends paid to common stockholders		(325	)		(1,544	)		(65,306	)
Net cash provided by (used in) financing activities		3,957			(1,544	)		(65,306	)
Change in Cash and Cash Equivalents		(334	)		(438	)		478
Cash and Cash Equivalents - Beginning of year		470			908			430
Cash and Cash Equivalents - End of year	$	136		$	470		$	908

Supplemental Disclosures of Noncash Financing Activities
Dividends from subsidiary- return of capital, for purchase of treasury stock	$	98,032		$	—		$	—
Dividends declared, but unpaid	$	84		$	470		$	908

SeaWorld Entertainment, Inc. (the “Parent”) was incorporated in Delaware on October 2, 2009. At that time, the Parent was owned by ten limited partnerships, ultimately owned by affiliates of The Blackstone Group L.P. (“Blackstone”) and certain co-investors. On May 8, 2017 an affiliate of Zhonghong Zhuoye Group Co., Ltd. (“ZHG Group”), Sun Wise (UK) Co., LTD (“ZHG”) acquired approximately 21% of the then outstanding shares of common stock of the Parent (the “ZHG Transaction”) from Blackstone. Subsequent to the ZHG Transaction, Blackstone did not own any remaining shares of the Company.

The Parent has no operations or significant assets or liabilities other than its investment in SeaWorld Parks & Entertainment, Inc. (“SEA”), which owns and operates twelve 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.

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.

SEA is the borrower under the senior secured credit facilities, (the “Senior Secured Credit Facilities”) under a credit agreement (the “Existing Credit Agreement”) dated as of December 1, 2009, as the same may be amended, restated, supplemented or modified from time to time.

On March 31, 2017, SEA entered into a refinancing amendment, Amendment No. 8 (the “Amendment No. 8”) to its existing credit agreement and borrowed additional term loans of which the proceeds, along with cash on hand, were used to redeem all of the Term B-3 loans and a portion of the outstanding principal of the Term B-2 loans. Additionally, on October 31, 2018, SEA entered into another refinancing amendment, Amendment No. 9 (the “Amended Credit Agreement”), to its Existing Credit Agreement. In connection with the Amended Credit Agreement, SEA borrowed additional term loans (the “Additional Term B-5 Loans”) of which the proceeds, along with cash on hand, were used to redeem all of the then outstanding principal of the Term B-2 Loans. Additionally, pursuant to the Amended Credit Agreement, SEA terminated the existing revolving credit commitments and replaced them with a new tranche of revolving credit commitments (the “New Revolving Credit Facility”). See further discussion in Note 12–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”).

In 2016, SEA’s Board of Directors (the “Board”) had a policy to pay, subject to legally available funds, regular quarterly cash dividends to the Parent (defined as a restricted payment in the Senior Secured Credit Facilities) and the Parent’s Board had a policy to pay regular quarterly cash dividends to its stockholders. Subsequent to the September 19, 2016 dividend declaration, both SEA’s Board and the Parent’s Board suspended the quarterly dividend policy to allow greater flexibility to deploy capital, when possible, to opportunities that offer the greatest long term returns to shareholders, such as, but not limited to, investments in new attractions, debt repayments or share repurchases. SEA paid a cash dividend to the Parent during the year ended December 31, 2016 related to dividend declarations as follows:

During the year ended December 31, 2016, the Parent’s Board declared or paid quarterly cash dividends to all common stockholders of record as follows:

As of December 31, 2018 and 2017, the Parent had $0.1 million and $0.5 million of cash dividends payable included in dividends payable in the accompanying condensed balance sheet, which relates to accumulated dividend on unvested restricted shares in SEA’s equity compensation plan. These shares, which were granted prior to the dividend suspension, carry dividend rights and therefore dividends accumulate and will be paid as the shares vest in accordance with the underlying equity compensation grants. These dividend rights will be forfeited if the shares do not vest. See Note 20–Stockholders’ Equity of the accompanying consolidated financial statements for further discussion.

During the year ended December 31, 2018, SEA paid dividends to the Parent of approximately $98.0 million. The dividends were in the form of payments that SEA made for share repurchases at the Parent level (see Note 5–Stockholders’ Equity which follows).

During the years ended December 31, 2018 and 2017, Parent paid accumulated dividends, net of forfeitures, related to shares that carried dividend rights which vested during the respective year. For the year ended December 31, 2016, dividends paid to stockholders were $65.3 million and primarily related to dividend declarations declared prior to the dividend suspension.

The Parent has reserved 15,000,000 shares of common stock for future issuance under the Omnibus Incentive Plan (the “Omnibus Incentive Plan”), of which approximately 9,770,000 are available for future issuance as of December 31, 2018.

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 expires or is canceled, forfeited, or terminated, without issuance to the participant, the unissued shares may be granted again under the Omnibus Incentive Plan. See further discussion in Note 19–Equity-Based Compensation of the accompanying consolidated financial statements.

During the year ended December 31, 2018, Parent transferred approximately $4.2 million in proceeds received from the exercise of stock options to SEA as a capital contribution and increased its investment in SEA.

The Parent’s Board previously authorized the repurchase of up to $250.0 million of the Company’s common stock (the “Share Repurchase Program”). 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.

During the year ended December 31, 2018, the Parent repurchased a total of 3,654,816 shares of common stock at a total cost of approximately $98.0 million, leaving $92.0 million available under the Share Repurchase Program as of December 31, 2018. On February 22, 2019, the Parent’s Board authorized a replenishment to its Share Repurchase Program of $158.0 million, bringing the total amount authorized for future share repurchases to $250.0 million. The number of shares to be purchased and the timing of purchases will be based on the Parent’s trading windows and available liquidity, general business and market conditions and other factors, including legal requirements and alternative opportunities. There were no share repurchases during the years ended December 31, 2017 and 2016.

All shares repurchased pursuant to the Share Repurchase Program, along with shares repurchased directly from selling stockholders concurrently with previous secondary offerings, are recorded as treasury stock at a total cost of $252.9 million and $154.9 million as of the years ended December 31, 2018 and 2017, respectively, and are reflected as a reduction to stockholders’ equity in the accompanying condensed balance sheets.