SEAWORLD ENTERTAINMENT, INC.
PARENT COMPANY ONLY
CONDENSED BALANCE SHEETS
(In thousands, except share and per share amounts)
	December 31,
	2019			2018
Assets
Current Assets:
Cash	$	169		$	136
Total current assets		169			136
Investment in wholly-owned subsidiary		210,892			265,194
Total assets	$	211,061		$	265,330
Liabilities and Stockholders’ Equity
Current Liabilities:
Dividends payable	$	17		$	84
Other accrued liabilities		152			52
Total current liabilities		169			136
Total liabilities		169			136
Commitments and contingencies
Stockholders’ Equity:
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, no shares issued or outstanding at December 31, 2019 and 2018		—			—
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 94,044,203 and 93,400,929 shares issued at December 31, 2019 and 2018, respectively		940			934
Additional paid-in capital		673,893			663,834
Accumulated other comprehensive (loss) income		(1,559	)		2,284
Accumulated deficit		(59,479	)		(148,955	)
Treasury stock, at cost (15,790,463 and 10,174,589 shares at December 31, 2019 and 2018, respectively)		(402,903	)		(252,903	)
Total stockholders’ equity		210,892			265,194
Total Liabilities and Stockholders’ Equity	$	211,061		$	265,330

SEAWORLD ENTERTAINMENT, INC.
PARENT COMPANY ONLY
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)

	For the Year Ended December 31,
	2019			2018		2017
Equity in net income (loss) of subsidiary	$	89,476		$	44,788	$	(202,386	)
Net income (loss)	$	89,476		$	44,788	$	(202,386	)
Equity in other comprehensive (loss) income of subsidiary		(3,843	)		8,454		8,618
Comprehensive income (loss)	$	85,633		$	53,242	$	(193,768	)

SEAWORLD ENTERTAINMENT, INC.
PARENT COMPANY ONLY
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
	For the Year Ended December 31,
	2019			2018			2017
Cash Flows From Operating Activities:
Net income (loss)	$	89,476		$	44,788		$	(202,386	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in net (income) loss of subsidiary		(89,476	)		(44,788	)		202,386
Dividends forfeited from subsidiary-return on capital, net of forfeitures		—			—			(31	)
Net cash used in operating activities		—			—			(31	)
Cash Flows From Investing Activities:
Dividends (forfeited) received from subsidiary- return of capital, net of forfeitures		(5	)		(61	)		1,137
Capital contributed to subsidiary from exercises of stock options		(3,696	)		(4,230	)		—
Net cash (used in) provided by investing activities		(3,701	)		(4,291	)		1,137
Cash Flows From Financing Activities:
Exercise of stock options		3,795			4,282			—
Dividends paid to common stockholders		(61	)		(325	)		(1,544	)
Net cash provided by (used in) financing activities		3,734			3,957			(1,544	)
Change in Cash and Cash Equivalents		33			(334	)		(438	)
Cash and Cash Equivalents - Beginning of year		136			470			908
Cash and Cash Equivalents - End of year	$	169		$	136		$	470

Supplemental Disclosures of Noncash Financing Activities
Dividends from subsidiary- return of capital, for purchase of treasury stock	$	150,000			98,032		$	—
Dividends declared, but unpaid	$	17		$	84		$	470

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. Parent completed an initial public offering in April 2013. See further discussion relating to subsequent ownership changes in Note 17–Related-Party Transactions in the accompanying consolidated financial statements.

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 October 31, 2018, SEA entered into a 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 “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 “Revolving Credit Facility”).

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 then outstanding Term B-3 loans and a portion of then outstanding principal of the Term B-2 loans. 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”).

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. In September 2016, 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.

During the years ended December 31, 2019 and 2018, SEA paid dividends to the Parent of approximately $150.0 million and $98.0 million, respectively. 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, 2019, 2018 and 2017, Parent paid accumulated dividends, net of forfeitures, related to shares that carried dividend rights which vested during the respective year. See further discussion in Note 20–Stockholders’ Equity of the accompanying consolidated financial statements.

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 8,480,000 are available for future issuance as of December 31, 2019.

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 years ended December 31, 2019 and 2018, respectively, Parent transferred approximately $3.7 million and $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, 2019, the Parent repurchased a total of 5,615,874 shares of common stock at a total cost of $150.0 million. On August 2, 2019 the Parent’s Board approved a replenishment to the Share Repurchase Program of $150.0 million, bringing the total amount authorized for future share repurchases back up to $250.0 million as of December 31, 2019.

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. 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. There were no share repurchases during the year ended December 31, 2017.

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 $402.9 million and $252.9 million as of the years ended December 31, 2019 and 2018, respectively, and are reflected as a reduction to stockholders’ equity in the accompanying condensed balance sheets. See further discussion in Note 20–Stockholders’ Equity of the accompanying consolidated financial statements.