10-Q 1 seas-10q_20220630.htm 10-Q seas-10q_20220630.htm
false 2022 Q2 0001564902 --12-31 http://fasb.org/us-gaap/2022#OtherAssetsCurrent http://fasb.org/us-gaap/2022#OtherAssetsCurrent 0001564902 2022-01-01 2022-06-30 xbrli:shares 0001564902 2022-07-29 iso4217:USD 0001564902 2022-06-30 0001564902 2021-12-31 iso4217:USD xbrli:shares 0001564902 us-gaap:AdmissionMember 2022-04-01 2022-06-30 0001564902 us-gaap:AdmissionMember 2021-04-01 2021-06-30 0001564902 us-gaap:AdmissionMember 2022-01-01 2022-06-30 0001564902 us-gaap:AdmissionMember 2021-01-01 2021-06-30 0001564902 seas:FoodMerchandiseAndOtherRevenueMember 2022-04-01 2022-06-30 0001564902 seas:FoodMerchandiseAndOtherRevenueMember 2021-04-01 2021-06-30 0001564902 seas:FoodMerchandiseAndOtherRevenueMember 2022-01-01 2022-06-30 0001564902 seas:FoodMerchandiseAndOtherRevenueMember 2021-01-01 2021-06-30 0001564902 2022-04-01 2022-06-30 0001564902 2021-04-01 2021-06-30 0001564902 2021-01-01 2021-06-30 0001564902 us-gaap:CommonStockMember 2021-12-31 0001564902 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001564902 us-gaap:RetainedEarningsMember 2021-12-31 0001564902 us-gaap:TreasuryStockMember 2021-12-31 0001564902 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0001564902 2022-01-01 2022-03-31 0001564902 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0001564902 us-gaap:TreasuryStockMember 2022-01-01 2022-03-31 0001564902 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0001564902 us-gaap:CommonStockMember 2022-03-31 0001564902 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0001564902 us-gaap:RetainedEarningsMember 2022-03-31 0001564902 us-gaap:TreasuryStockMember 2022-03-31 0001564902 2022-03-31 0001564902 us-gaap:AdditionalPaidInCapitalMember 2022-04-01 2022-06-30 0001564902 us-gaap:CommonStockMember 2022-04-01 2022-06-30 0001564902 us-gaap:TreasuryStockMember 2022-04-01 2022-06-30 0001564902 us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0001564902 us-gaap:CommonStockMember 2022-06-30 0001564902 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001564902 us-gaap:RetainedEarningsMember 2022-06-30 0001564902 us-gaap:TreasuryStockMember 2022-06-30 0001564902 us-gaap:CommonStockMember 2020-12-31 0001564902 us-gaap:AdditionalPaidInCapitalMember 2020-12-31 0001564902 us-gaap:RetainedEarningsMember 2020-12-31 0001564902 us-gaap:TreasuryStockMember 2020-12-31 0001564902 2020-12-31 0001564902 us-gaap:AdditionalPaidInCapitalMember 2021-01-01 2021-03-31 0001564902 2021-01-01 2021-03-31 0001564902 us-gaap:CommonStockMember 2021-01-01 2021-03-31 0001564902 us-gaap:RetainedEarningsMember 2021-01-01 2021-03-31 0001564902 us-gaap:CommonStockMember 2021-03-31 0001564902 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001564902 us-gaap:RetainedEarningsMember 2021-03-31 0001564902 us-gaap:TreasuryStockMember 2021-03-31 0001564902 2021-03-31 0001564902 us-gaap:AdditionalPaidInCapitalMember 2021-04-01 2021-06-30 0001564902 us-gaap:CommonStockMember 2021-04-01 2021-06-30 0001564902 us-gaap:RetainedEarningsMember 2021-04-01 2021-06-30 0001564902 us-gaap:CommonStockMember 2021-06-30 0001564902 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001564902 us-gaap:RetainedEarningsMember 2021-06-30 0001564902 us-gaap:TreasuryStockMember 2021-06-30 0001564902 2021-06-30 seas:Business seas:Segment 0001564902 seas:MiddleEastProjectMember seas:DeferredRevenueMember 2022-06-30 0001564902 seas:MiddleEastProjectMember us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember 2022-06-30 0001564902 seas:MiddleEastProjectMember us-gaap:OtherAssetsMember 2022-06-30 0001564902 seas:MiddleEastProjectMember us-gaap:OtherAssetsMember 2021-12-31 0001564902 seas:MiddleEastProjectMember us-gaap:OtherLiabilitiesMember 2022-06-30 0001564902 seas:MiddleEastProjectMember 2022-01-01 2022-06-30 0001564902 seas:MiddleEastProjectMember us-gaap:OtherLiabilitiesMember 2021-12-31 0001564902 seas:PerformanceVestingRestrictedAwardsMember 2021-01-01 2021-06-30 0001564902 seas:PerformanceVestingRestrictedAwardsMember 2022-01-01 2022-06-30 xbrli:pure 0001564902 seas:StateTaxCreditCarryForwardsMember 2022-06-30 0001564902 seas:StateTaxCreditCarryForwardsMember 2021-12-31 0001564902 seas:TermBLoansMember 2022-06-30 0001564902 seas:TermBLoansMember 2021-12-31 0001564902 us-gaap:SeniorNotesMember 2022-06-30 0001564902 us-gaap:SeniorNotesMember 2021-12-31 0001564902 seas:FirstPrioritySeniorSecuredNotesMember 2022-06-30 0001564902 seas:FirstPrioritySeniorSecuredNotesMember 2021-12-31 0001564902 seas:RestatementAgreementMember srt:MaximumMember 2021-08-25 2021-08-25 0001564902 seas:TermBLoansMember 2021-08-25 2021-08-25 0001564902 seas:SeniorSecuredCreditFacilitiesMember us-gaap:RevolvingCreditFacilityMember 2021-08-25 0001564902 seas:SeniorSecuredCreditFacilitiesMember us-gaap:RevolvingCreditFacilityMember 2022-06-09 0001564902 seas:SeniorSecuredCreditFacilitiesMember us-gaap:RevolvingCreditFacilityMember 2021-08-25 2021-08-25 0001564902 us-gaap:RevolvingCreditFacilityMember 2022-06-09 2022-06-09 0001564902 2021-08-25 0001564902 2021-08-25 2021-08-25 0001564902 seas:SeniorSecuredCreditFacilitiesMember seas:TermBLoansMember 2022-01-01 2022-06-30 0001564902 seas:SeniorSecuredCreditFacilitiesMember seas:RevolvingLoansMember 2022-01-01 2022-06-30 0001564902 seas:SeniorSecuredCreditFacilitiesMember us-gaap:RevolvingCreditFacilityMember 2022-06-30 0001564902 seas:SeniorSecuredCreditFacilitiesMember 2022-06-30 0001564902 seas:SeniorSecuredCreditFacilitiesMember seas:TermBLoansMember 2022-06-30 0001564902 seas:SeniorSecuredCreditFacilitiesMember 2021-08-25 2021-08-25 0001564902 us-gaap:RevolvingCreditFacilityMember 2022-06-30 0001564902 us-gaap:SeniorNotesMember 2021-08-25 2021-08-25 0001564902 us-gaap:SeniorNotesMember 2021-08-25 0001564902 us-gaap:SeniorNotesMember us-gaap:DebtInstrumentRedemptionPeriodOneMember 2021-08-25 2021-08-25 0001564902 us-gaap:SeniorNotesMember us-gaap:DebtInstrumentRedemptionPeriodTwoMember 2021-08-25 2021-08-25 0001564902 us-gaap:SeniorNotesMember us-gaap:DebtInstrumentRedemptionPeriodThreeMember 2021-08-25 2021-08-25 0001564902 seas:FirstPrioritySeniorSecuredNotesMember 2020-04-30 0001564902 seas:FirstPrioritySeniorSecuredNotesMember 2020-04-29 2020-04-30 0001564902 seas:FirstPrioritySeniorSecuredNotesMember us-gaap:DebtInstrumentRedemptionPeriodOneMember 2020-04-29 2020-04-30 0001564902 seas:FirstPrioritySeniorSecuredNotesMember us-gaap:DebtInstrumentRedemptionPeriodTwoMember 2020-04-29 2020-04-30 0001564902 seas:FirstPrioritySeniorSecuredNotesMember us-gaap:DebtInstrumentRedemptionPeriodThreeMember 2020-04-29 2020-04-30 0001564902 seas:FirstPrioritySeniorSecuredNotesMember seas:DebtInstrumentRedemptionPriceOneMember 2020-04-29 2020-04-30 0001564902 seas:FirstPrioritySeniorSecuredNotesMember seas:DebtInstrumentRedemptionPriceTwoMember 2020-04-29 2020-04-30 0001564902 seas:SecondPrioritySeniorSecuredNotesMember 2022-01-01 2022-06-30 0001564902 seas:SeniorSecuredCreditFacilitiesMember seas:RestrictiveCovenantsMember srt:MaximumMember 2022-01-01 2022-06-30 0001564902 seas:SeniorSecuredCreditFacilitiesMember seas:RestrictiveCovenantsMember srt:MinimumMember 2022-01-01 2022-06-30 0001564902 seas:SeniorSecuredCreditFacilitiesMember seas:RestrictiveCovenantsMember srt:MaximumMember 2022-06-30 0001564902 seas:RestrictiveCovenantsMember 2022-01-01 2022-06-30 0001564902 seas:RestrictiveCovenantsMember seas:DebtAgreementMember 2022-01-01 2022-06-30 0001564902 seas:SeniorSecuredCreditFacilitiesMember 2022-01-01 2022-06-30 0001564902 seas:SeniorSecuredCreditFacilitiesMember 2021-01-01 2021-06-30 0001564902 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2022-06-30 0001564902 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2022-06-30 0001564902 us-gaap:FairValueMeasurementsRecurringMember 2022-06-30 0001564902 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0001564902 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0001564902 us-gaap:FairValueMeasurementsRecurringMember 2021-12-31 0001564902 srt:MaximumMember 2022-06-30 0001564902 us-gaap:OperatingExpenseMember 2022-04-01 2022-06-30 0001564902 us-gaap:OperatingExpenseMember 2021-04-01 2021-06-30 0001564902 us-gaap:OperatingExpenseMember 2022-01-01 2022-06-30 0001564902 us-gaap:OperatingExpenseMember 2021-01-01 2021-06-30 0001564902 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2022-04-01 2022-06-30 0001564902 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2021-04-01 2021-06-30 0001564902 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2022-01-01 2022-06-30 0001564902 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2021-01-01 2021-06-30 0001564902 seas:OmnibusIncentivePlanMember 2022-06-30 0001564902 seas:BonusPerformanceRestrictedSharesMember seas:TwoThousandTwentyTwoBonusPlanMember 2022-01-01 2022-06-30 0001564902 seas:TwoThousandTwentyTwoBonusPlanMember 2022-01-01 2022-06-30 0001564902 seas:BelowThresholdPerformanceBonusRestrictedSharesMember seas:TwoThousandTwentyTwoBonusPlanMember 2022-01-01 2022-06-30 0001564902 seas:TargetPerformanceBonusRestrictedSharesMember seas:TwoThousandTwentyTwoBonusPlanMember 2022-01-01 2022-06-30 0001564902 seas:BonusPerformanceRestrictedSharesMember 2022-01-01 2022-06-30 0001564902 seas:NonqualifiedStockOptionsGrantedMember 2022-01-01 2022-06-30 0001564902 seas:LongTermIncentivePerformanceRestrictedUnitsMember 2022-01-01 2022-06-30 0001564902 seas:LongtermIncentiveOptionsMember 2022-01-01 2022-06-30 0001564902 seas:TwoThousandTwentyTwoLongTermIncentivePlanBelowThresholdPerformanceMember 2022-01-01 2022-06-30 0001564902 seas:TwoThousandTwentyTwoLongTermIncentivePlanMaximumPerformanceMember 2022-01-01 2022-06-30 0001564902 us-gaap:RestrictedStockUnitsRSUMember 2022-06-30 0001564902 seas:FormerShareRepurchaseProgramMember 2022-06-30 0001564902 seas:FormerShareRepurchaseProgramMember 2022-03-10 0001564902 seas:FormerShareRepurchaseProgramMember 2022-01-01 2022-06-30 0001564902 seas:FormerShareRepurchaseProgramMember 2022-04-29 0001564902 seas:MayShareRepurchaseProgramMember 2022-05-11 0001564902 seas:MayShareRepurchaseProgramMember 2022-01-01 2022-06-30 0001564902 seas:MayShareRepurchaseProgramMember us-gaap:SubsequentEventMember 2022-07-28 2022-07-29 0001564902 seas:MayShareRepurchaseProgramMember 2022-06-30 0001564902 seas:MayShareRepurchaseProgramMember us-gaap:SubsequentEventMember 2022-07-29 0001564902 seas:ShareRepurchaseProgramMember us-gaap:SubsequentEventMember 2022-08-04

  

 

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 June 30, 2022

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 67,617,527 shares of Common Stock, par value $0.01 per share as of July 29, 2022.

 


 

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS

 

 

 

Page No.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

1

 

 

 

 

 

PART I.

 

FINANCIAL INFORMATION

 

4

 

 

 

 

 

Item 1.

 

Unaudited Condensed Consolidated Financial Statements

 

4

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Balance Sheets

 

4

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations

 

5

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit

 

6

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows

 

7

 

 

 

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

21

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

34

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

34

 

 

 

 

 

PART II.

 

OTHER INFORMATION

 

36

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

36

 

 

 

 

 

Item 1A.

 

Risk Factors

 

36

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

36

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

37

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

37

 

 

 

 

 

Item 5.

 

Other Information

 

37

 

 

 

 

 

Item 6.

 

Exhibits

 

38

 

 

 

 

 

 

 

Signatures

 

39

 

 

 


 

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 “Item 1A.  Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (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:

 

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

 

failure to hire and/or retain employees;

 

a decline in discretionary consumer spending or consumer confidence;

 

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 (such as the recent declaration by the World Health Organization of Monkeypox as a global health emergency), 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;

 

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, 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;

 

environmental, social and corporate governance (“ESG”) matters or related incidents, including inclusion and diversity matters, our reporting of such matters, or sustainability ratings could negatively impact our business and results of operations;

 

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;

 

seasonal fluctuations in operating results;

 

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;

 

changing consumer tastes and preferences;

 

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;

 

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

 

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

 

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;

1


 

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

 

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;

 

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 ability of Hill Path Capital LP and its affiliates to significantly influence our decisions;

 

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

 

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

 

mandates related to COVID-19 vaccinations for employees;

 

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 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.

2


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.

3


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)

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

160,830

 

 

$

443,707

 

Accounts receivable, net

 

 

84,001

 

 

 

76,948

 

Inventories

 

 

56,641

 

 

 

29,478

 

Prepaid expenses and other current assets

 

 

28,682

 

 

 

17,263

 

Total current assets

 

 

330,154

 

 

 

567,396

 

Property and equipment, at cost

 

 

3,479,343

 

 

 

3,385,308

 

Accumulated depreciation

 

 

(1,809,262

)

 

 

(1,740,144

)

Property and equipment, net

 

 

1,670,081

 

 

 

1,645,164

 

Goodwill

 

 

66,278

 

 

 

66,278

 

Trade names/trademarks, net

 

 

157,000

 

 

 

157,000

 

Right of use assets-operating leases

 

 

133,191

 

 

 

132,217

 

Deferred tax assets, net

 

 

22,528

 

 

 

23,995

 

Other assets, net

 

 

17,378

 

 

 

18,266

 

Total assets

 

$

2,396,610

 

 

$

2,610,316

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

172,263

 

 

$

134,311

 

Current maturities of long-term debt

 

 

12,000

 

 

 

12,000

 

Operating lease liabilities

 

 

3,088

 

 

 

2,895

 

Accrued salaries, wages and benefits

 

 

16,419

 

 

 

22,156

 

Deferred revenue

 

 

235,542

 

 

 

154,793

 

Other accrued liabilities

 

 

59,124

 

 

 

45,811

 

Total current liabilities

 

 

498,436

 

 

 

371,966

 

Long-term debt, net

 

 

2,101,955

 

 

 

2,104,835

 

Long-term operating lease liabilities

 

 

118,180

 

 

 

117,046

 

Deferred tax liabilities, net

 

 

38,053

 

 

 

12,803

 

Other liabilities

 

 

41,437

 

 

 

37,582

 

Total liabilities

 

 

2,798,061

 

 

 

2,644,232

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

 

 

Stockholders’ Deficit:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value—authorized, 100,000,000 shares, no shares issued or outstanding at June 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 96,212,193 and 95,541,992 shares issued at June 30, 2022 and December 31, 2021, respectively

 

 

962

 

 

 

955

 

Additional paid-in capital

 

 

700,866

 

 

 

711,474

 

Accumulated deficit

 

 

(7,664

)

 

 

(115,287

)

Treasury stock, at cost (27,830,224 and 19,953,042 shares at June 30, 2022

   and December 31, 2021, respectively)

 

 

(1,095,615

)

 

 

(631,058

)

Total stockholders’ deficit

 

 

(401,451

)

 

 

(33,916

)

Total liabilities and stockholders’ deficit

 

$

2,396,610

 

 

$

2,610,316

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

4


SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

(In thousands, except per share amounts)

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Admissions

 

$

275,505

 

 

$

243,225

 

 

$

426,367

 

 

$

339,005

 

Food, merchandise and other

 

 

229,312

 

 

 

196,559

 

 

 

349,143

 

 

 

272,699

 

Total revenues

 

 

504,817

 

 

 

439,784

 

 

 

775,510

 

 

 

611,704

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of food, merchandise and other revenues

 

 

41,518

 

 

 

34,173

 

 

 

64,558

 

 

 

49,115

 

Operating expenses (exclusive of depreciation and amortization shown separately below)

 

 

190,496

 

 

 

157,307

 

 

 

343,421

 

 

 

265,079

 

Selling, general and administrative expenses

 

 

56,158

 

 

 

43,190

 

 

 

102,217

 

 

 

74,654

 

Severance and other separation costs

 

 

83

 

 

 

1,496

 

 

 

113

 

 

 

1,582

 

Depreciation and amortization

 

 

38,551

 

 

 

36,247

 

 

 

77,163

 

 

 

72,805

 

Total costs and expenses

 

 

326,806

 

 

 

272,413

 

 

 

587,472

 

 

 

463,235

 

Operating income

 

 

178,011

 

 

 

167,371

 

 

 

188,038

 

 

 

148,469

 

Other (income) expense, net

 

 

(32

)

 

 

21

 

 

 

(44

)

 

 

195

 

Interest expense

 

 

26,810

 

 

 

31,127

 

 

 

52,180

 

 

 

62,083

 

Income before income taxes

 

 

151,233

 

 

 

136,223

 

 

 

135,902

 

 

 

86,191

 

Provision for income taxes

 

 

34,623

 

 

 

8,461

 

 

 

28,279

 

 

 

3,313

 

Net income

 

$

116,610

 

 

$

127,762

 

 

$

107,623

 

 

$

82,878

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share, basic

 

$

1.63

 

 

$

1.62

 

 

$

1.46

 

 

$

1.05

 

Earnings per share, diluted

 

$

1.62

 

 

$

1.59

 

 

$

1.45

 

 

$

1.03

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

71,686

 

 

 

78,986

 

 

 

73,623

 

 

 

78,724

 

Diluted

 

 

72,168

 

 

 

80,177

 

 

 

74,449

 

 

 

80,123

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

5


 

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF

CHANGES IN STOCKHOLDERS’ DEFICIT

(In thousands, except share amounts)

 

 

 

Shares of

Common

Stock Issued

 

 

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

)

Equity-based compensation

 

 

 

 

 

 

 

 

2,549

 

 

 

 

 

 

 

 

 

2,549

 

Vesting of restricted shares

 

 

545,819

 

 

 

6

 

 

 

(6

)

 

 

 

 

 

 

 

 

 

Shares withheld for tax withholdings

 

 

(201,442

)

 

 

(2

)

 

 

(14,327

)

 

 

 

 

 

 

 

 

(14,329

)

Exercise of stock options

 

 

29,783

 

 

 

 

 

 

808

 

 

 

 

 

 

 

 

 

808

 

Repurchase of 6,341,755 shares of treasury stock, at cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(354,652

)

 

 

(354,652

)

Net income

 

 

 

 

 

 

 

 

 

 

 

116,610

 

 

 

 

 

 

116,610

 

Balance at June 30, 2022

 

 

96,212,193

 

 

$

962

 

 

$

700,866

 

 

$

(7,664

)

 

$

(1,095,615

)

 

$

(401,451

)

 

 

 

Shares of

Common

Stock

Issued

 

 

Common

Stock

 

 

Additional

Paid-In

Capital

 

 

Accumulated Deficit

 

 

Treasury

Stock,

at Cost

 

 

Total

Stockholders'

Deficit

 

Balance at December 31, 2020

 

 

94,652,248

 

 

$

946

 

 

$

680,360

 

 

$

(371,800

)

 

$

(415,309

)

 

$

(105,803

)

Equity-based compensation

 

 

 

 

 

 

 

 

4,473

 

 

 

 

 

 

 

 

 

4,473

 

Vesting of restricted shares

 

 

130,834

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Shares withheld for tax withholdings

 

 

(41,271

)

 

 

 

 

 

(1,971

)

 

 

 

 

 

 

 

 

(1,971

)

Exercise of stock options

 

 

116,634

 

 

 

1

 

 

 

2,392

 

 

 

 

 

 

 

 

 

2,393

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(44,884

)

 

 

 

 

 

(44,884

)

Balance at March 31, 2021

 

 

94,858,445

 

 

 

948

 

 

 

685,253

 

 

 

(416,684

)

 

 

(415,309

)

 

 

(145,792

)

Equity-based compensation

 

 

 

 

 

 

 

 

5,634

 

 

 

 

 

 

 

 

 

5,634

 

Vesting of restricted shares

 

 

653,146

 

 

 

7

 

 

 

(7

)

 

 

 

 

 

 

 

 

 

Shares withheld for tax withholdings

 

 

(213,601

)

 

 

(3

)

 

 

(10,554

)

 

 

 

 

 

 

 

 

(10,557

)

Exercise of stock options

 

 

82,491

 

 

 

1

 

 

 

1,638

 

 

 

 

 

 

 

 

 

1,639

 

Net income

 

 

 

 

 

 

 

 

 

 

 

127,762

 

 

 

 

 

 

127,762

 

Balance at June 30, 2021

 

 

95,380,481

 

 

$

953

 

 

$

681,964

 

 

$

(288,922

)

 

$

(415,309

)

 

$

(21,314

)

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 

6


 

SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

For the Six Months Ended June 30,

 

 

 

 

2022

 

 

2021

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

 

 

Net income

 

$

107,623

 

 

$

82,878

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

77,163

 

 

 

72,805

 

Amortization of debt issuance costs and discounts

 

 

3,130

 

 

 

3,323

 

Deferred income tax provision

 

 

26,530

 

 

 

682

 

Equity-based compensation

 

 

9,531

 

 

 

10,107

 

Other, including loss on sale or disposal of assets, net

 

 

8,539

 

 

 

2,112

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(9,690

)

 

 

(75,345

)

Inventories

 

 

(27,126

)

 

 

5,647

 

Prepaid expenses and other current assets

 

 

(10,101

)

 

 

(3,896

)

Accounts payable and accrued expenses

 

 

34,902

 

 

 

20,361

 

Accrued salaries, wages and benefits

 

 

(5,737

)

 

 

8,464

 

Deferred revenue

 

 

80,778

 

 

 

121,815

 

Other accrued liabilities

 

 

4,699

 

 

 

845

 

Right-of-use assets and operating lease liabilities

 

 

354

 

 

 

224

 

Other assets and liabilities

 

 

(961

)

 

 

(1,944

)

Net cash provided by operating activities

 

 

299,634

 

 

 

248,078

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(101,048

)

 

 

(44,981

)

Net cash used in investing activities

 

 

(101,048

)

 

 

(44,981

)

Cash Flows From Financing Activities:

 

 

 

 

 

 

 

 

Repayments of long-term debt

 

 

(6,000

)

 

 

(7,752

)

Purchase of treasury stock

 

 

(454,801

)

 

 

 

Payment of tax withholdings on equity-based compensation through shares withheld

 

 

(22,067

)

 

 

(12,528

)

Exercise of stock options

 

 

1,935

 

 

 

4,032

 

Debt issuance costs

 

 

(