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

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

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.

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 ~~63,971,380~~62,490,845 shares of Common Stock, par value $0.01 per share as of ~~August~~May 3, ~~2023.~~2024.

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~~2023 (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:

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”~~“Company” in this Quarterly Report on Form 10-Q mean ~~SeaWorld Entertainment,~~United Parks & Resorts Inc., its subsidiaries and affiliates.

We use our websites (~~www.seaworldentertainment.com~~www.unitedparks.com and ~~www.seaworldinvestors.com~~www.unitedparksinvestors.com) and at times our ~~corporate Twitter account~~ ~~(@SeaWorld)~~ aspark and brand specific social media 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~~the Company when you enroll your e-mail address by visiting the “E-mail Alerts” section of our website at ~~www.seaworldinvestors.com~~www.unitedparksinvestors.com. The contents of our website and social media channels are not, however, a part of this Quarterly Report on Form 10-Q.

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 United Parks & Resorts, 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.

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.

See accompanying notes to unaudited condensed consolidated financial statements.

Diluted ~~earnings~~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. ~~During the three and six months ended June 30, 2023, there~~There were approximately ~~452,000~~1,325,000 and ~~390,000~~1,225,000 ~~anti-dilutive~~potentially dilutive shares excluded from the computation of diluted ~~earnings~~loss per share ~~respectively. During~~during the three ~~and six~~ months ended ~~June 30, 2022, there were approximately~~March 31, 2024 and 2023, respectively, as their effect would have been anti-dilutive due to the Company’s net loss in those periods. Approximately ~~269,000~~385,000 and ~~204,000~~610,000 ~~anti-dilutive shares excluded from~~of the ~~computation of diluted earnings per share, respectively. The~~ Company’s outstanding performance-vesting restricted stock awards ~~of approximately~~ ~~816,000~~ ~~and~~ ~~994,000~~ as of ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively, are considered contingently issuable shares and are excluded from the calculation of diluted ~~earnings~~loss per share until the performance measure criteria is met as of the end of the reporting period.

6. LONG-TERM DEBT

Long-term debt, net, as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023 consisted of the following:


	June 30,			December 31,			March 31,			December 31,
	2023			2022			2024			2023
	(In thousands)						(In thousands)
Term B Loans (effective interest rate of 8.25% and 7.44% at June 30, 2023 and December 31, 2022, respectively)	$	1,179,000		$	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
Term B-2 Loans (effective interest rate of 7.83% at March 31, 2024)							$	1,170,068		$	—
Term B Loans (effective interest rate of 8.47% at December 31, 2023)								—			1,173,000
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		2,131,500			2,137,500			2,122,568			2,125,500
Less: unamortized discounts and debt issuance costs		(23,363	)		(26,441	)		(18,467	)		(20,310	)
Less: current maturities		(12,000	)		(12,000	)		(11,730	)		(12,000	)
Total long-term debt, net	$	2,096,137		$	2,099,059		$	2,092,371		$	2,093,190

Refinancing Transactions

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 and certain amendments (the “Amended and Restated Credit Agreement”).

On June 12, 2023, ~~the Company~~SEA amended the Amended and Restated Credit Agreement to replace the LIBOR-based benchmark rates with Term SOFR-based benchmark rates plus credit spread adjustments of 0.11448%, 0.26161% and 0.42826% for interest periods of one, three and six months, respectively, due to reference rate reform (“Adjusted Term ~~SOFR~~”SOFR”). The Term SOFR-based benchmark rate ~~will become~~became effective as of July 1, 2023. There were no changes to any material terms of the Amended and Restated Credit Agreement that were unrelated to the replacement of the LIBOR-based benchmark rates.

~~The~~

On January 22, 2024, SEA further amended the Amended and Restated Credit Agreement ~~provides for senior secured financing~~to incur an aggregate principal amount of ~~up to~~approximately $~~1,585.0~~1,173 million ~~consisting of:~~

~~(i)~~

aof Term B-2 Loans under the Amended and Restated Credit Agreement (the “Term B-2 Loans”) to refinance the first lien term loan facility (the “Term Loan Facility” and the loans thereunder, the “Term B Loans”). Borrowings under the Term B-2 Loans bear interest at a fluctuating rate per annum equal to, at SEA’s option, (i) ABR (provided that in no event shall such ABR rate with respect to the Term B-2 Loans be less than 1.50% per annum) plus an applicable margin equal to 1.50% or (ii) Adjusted Term SOFR (provided that in no event shall such Adjusted Term SOFR rate with respect to the Term B-2 Loans be less than 0.50%) plus an applicable margin equal to 2.50%.

On May 2, 2024, the SEA further amended the Amended and Restated Credit Agreement to incur an aggregate principal amount of $380.0 million of Incremental Term B-2 Loans under the Credit Agreement (the “Incremental Term B-2 Loans”) to finance the redemption of the First-Priority Senior Secured Notes (as defined below) and for general corporate purposes. The Incremental Term B-2 Loans will be subject to the same affirmative and negative covenants and events of default as the existing Term B-2 Loans. The Amendment requires scheduled amortization payments on the term loans in quarterly amounts equal to 0.25062656641604% of the original principal amount of the existing Term B-2 Loans and the Incremental Term B-2 Loans, payable quarterly, with the balance to be paid at maturity on August 25, 2028. Also on May 2, 2024, SEA completed the redemption for all of the $227.5 million aggregate principal amount of the First-Priority Senior Secured Notes.

As of March 31, 2024, the Amended and Restated Credit Agreement provides for senior secured financing of up to $1,563.0 million, consisting of:

(i)

the “Term B-2 Loans”, in an aggregate principal amount of $~~1,200.0~~1,173.0 million which was fully drawn on August 25, 2021. The Term ~~Loan Facility~~B-2 Loans 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 BB-2 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 Term SOFR plus 1% per annum (provided that in no event shall such ABR rate with respect to the Term BB-2 Loans be less than 1.50% per annum) (“ABR”), in each case, plus an applicable margin of ~~2.00%~~1.50% or (ii) an Adjusted Term SOFR rate for the applicable interest period (provided that in no event shall such Adjusted Term SOFR rate with respect to the Term BB-2 Loans be less than 0.50% per annum) plus an applicable margin of ~~3.00%~~2.50%.

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) Adjusted Term SOFR (provided that in no event shall such Adjusted Term SOFR 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.

~~SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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 Adjusted Term SOFR 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 BB-2 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 leverage ratios) of annual excess cash flow, as defined under the Senior Secured Credit Facilities;

100% (which percentage will be reduced to 50% and 0% if the Company satisfies certain net first lien leverage ~~ratios)~~ratios 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, subject to customary “breakage” costs with respect to Adjusted Term SOFR 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 ~~June 30, 2023,~~March 31, 2024, SEA had approximately $~~18.4~~17.5 million of outstanding letters of credit, leaving approximately $~~371.6~~372.5 million available under the Revolving Credit Facility, which was not drawn upon as of ~~June 30, 2023.~~March 31, 2024.

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”). The Senior Notes will mature on August 15, 2029. 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.

~~SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

First-Priority Senior Secured Notes

~~The~~On April 30, 2020, SEA completed a private offering of $227.5 million aggregate principal amount of 8.750% first-priority senior secured notes (the “First-Priority Senior Secured Notes”). The First-Priority Senior Secured Notes were scheduled to mature on May 1, 2025 and ~~have~~had interest payment dates of May 1 and November 1. ~~SEA may redeem~~See additional discussion regarding 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~~full 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.

~~Subsequent Events~~

On August 1, 2023, the Company launched an opportunistic repricing amendment for its existing first lien term loan facility (the “Term Loan Facility”) under that certain Amended and Restated Credit Agreement, dated as of August 25, 2021 (and as amended on June 9, 2022 and June 12, 2023), among the Company, SeaWorld Parks & Entertainment, Inc., the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, to, among other things, reprice the existing Term Loan Facility thereunder. The Company subsequently canceled the opportunistic repricing due to unfavorable market conditions unrelated to the Company.

~~On August 1, 2023, SEA issued a conditional notice of redemption (the “Redemption Notice”) for all of the $227.5~~ million aggregate principal amount of the First-Priority Senior Secured Notes, that remain outstanding as of the date thereof. The Redemption Notice states that, upon satisfaction of certain conditions as set forth therein, $~~227.5~~ ~~million aggregate principal amount of the First-Priority Senior Secured Notes will be redeemed on August 31, 2023 (the “Redemption Date”) at a price equal to the sum of (i)~~ ~~102.188~~% of the principal amount of the First-Priority Senior Secured Notes to be redeemed, plus (ii) accrued and unpaid interest, if any, to, but excluding, the Redemption Date. The redemption pursuant to the Redemption Notice is conditioned on the completion of a financing, which may be in the form of notes, loans or other securities, or a combination thereof, on or prior to the Redemption Date, by the Company and/or SEA on terms satisfactory to the Company and/or SEA, as applicable, and in an aggregate principal amount satisfactory to the Company and/or SEA as the case may be.preceding Refinancing Transactions section.

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 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 ~~June 30, 2023,~~March 31, 2024, the net total leverage ratio as calculated under the Debt Agreements was ~~2.61~~2.57 to 1.00.

~~SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

Long-term debt at ~~June 30, 2023~~March 31, 2024 is repayable as follows and does not include the impact of any future voluntary prepayments:


Years Ending December 31:	(In thousands)
Remainder of 2023	$	6,000
2024		12,000
Years Ending December 31,			(In thousands)
Remainder of 2024			$	8,798
2025		239,500		239,230
2026		12,000		11,730
2027		12,000		11,730
Thereafter		1,850,000
2028				1,126,080
2029				725,000
Total	$	2,131,500	$	2,122,568

Cash paid for interest relating to the Senior Secured Credit Facilities ~~the Senior Notes,~~ and the ~~First-Priority~~ Senior ~~Secured~~ Notes, net of amounts capitalized, as applicable, was $~~71.6~~41.5 million and $~~48.6~~40.0 million in the ~~six~~three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively.

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 ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Term B-2 Loans and 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-2 Loans and 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 ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023. 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 ~~June 30, 2023.~~March 31, 2024.

Quoted Prices in

Active Markets

Significant

for Identical

Other

Significant

Assets and

Observable

Unobservable

Balance at

Liabilities

Inputs

Inputs

June 30,

(Level 1)

(Level 2)

(Level 3)

2023

(In thousands)

Long-term obligations (a)
$
880,356

$
1,179,000

$
—

$
2,059,356

Quoted Prices in

Active Markets

Significant

for Identical

Other

Significant

Assets and

Observable

Unobservable

Balance at

Liabilities

Inputs

March 31,

(Level 1)

(Level 2)

(Level 3)

2024

Liabilities:

(In thousands)

Long-term obligations (a)

904,200

1,170,068

—

2,074,268

(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~~11.7 million and long-term debt, net, of $~~2.096~~2.092 billion as of ~~June 30, 2023.~~March 31, 2024.

~~SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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:~~2023:

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

(In thousands)

Long-term obligations (a)
$
873,675

$
1,185,000

$
—

$
2,058,675

Quoted Prices in

Active Markets

Significant

for Identical

Other

Significant

Assets and

Observable

Unobservable

Balance at

Liabilities

Inputs

December 31,

(Level 1)

(Level 2)

(Level 3)

2023

Liabilities:

(In thousands)

Long-term obligations (a)

904,025

1,173,000

—

2,077,025

(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~~2.093 billion as of December 31, ~~2022.~~2023.

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 accrued for the additional amount claimed in other accrued liabilities in the accompanying ~~unaudited condensed~~ consolidated balance sheet as of December 31, 2022. On June 27, 2022, pursuant to the License Agreement, Sesame Workshop initiated arbitration seeking a finding that its calculation of the amount of the 2021 royalty payment was correct. Sesame Workshop did not seek any modification or termination of the Licensing Agreement in the arbitration. The arbitration panel made an award on May 22, 2023 to Sesame Workshop for royalties, interest on the award, arbitration fees and expenses, which amounts are accrued for in other accrued liabilities in the accompanying ~~unaudited condensed~~ consolidated balance sheet as of ~~June~~September 30, ~~2023. The~~2023, however, the Company is ~~weighing legal options~~challenging the decision of the arbitration panel. On August 7, 2023, Sesame Workshop filed a Petition to Confirm Arbitration Award, and ~~may appeal~~in response, the ~~ruling.~~Company filed a Cross Motion to Vacate. At this time, the Company does not anticipate any exposure to loss in excess of amounts accrued to be material.

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. After an arbitration process agreed to by the parties determined that the claims were not subject to arbitration. 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 and oral arguments for the parties’ motions and counterclaims were held before the Court of Chancery, on March 29, 2023. On May 26, 2023, the Court of Chancery granted the Company’s motion for judgment on the pleadings and dismissed with prejudice the defendant former employees’ counterclaims. The defendant former employees filed a notice of appeal before the Delaware Supreme Court, on June 21, 2023. ~~In terms of potential exposure,~~Oral arguments were held on February 14, 2024. On February 15, 2024, the ~~value of~~Delaware Supreme Court affirmed the ~~total shares at issue for these certain former employees depends largely upon~~Chancery Court’s judgment that granted the Company’s ~~current share price, which fluctuates daily. Approximately~~ motion for judgment on the pleadings and its motion to dismiss counterclaims. On March 5, 2024, the Delaware Supreme Court issued a mandate to the clerk of court to close the file. This claim will be removed from the next quarterly report on Form 10-Q.~~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.

~~SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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’~~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 Company filed a motion to dismiss all counts and a motion to strike certification of the class. The Court granted the motion to dismiss with prejudice as to the negligent training and hiring claims, without prejudice as to the negligent supervising claim, and denied the motion as to the 42 USC 1981 and negligence per se claims. ~~Regarding~~The plaintiffs sought certification of their class and to amend the operative complaint to reassert the negligent supervising claim. The Company filed a motion to strike class certification and a motion for summary judgment as to all claims. The court denied plaintiffs’ motion for class certification and granted the Company’s motion for summary judgment in part. In particular, while the court allowed the plaintiffs to reassert their negligent supervising claims, the court granted summary judgment with regard to all eight individual plaintiffs as to those claims. As to the alleged violations of the Civil Rights Act of 1866, the court has granted summary judgment against two of the eight plaintiffs, leaving six individual plaintiffs with such claims. A jury trial of these cases commenced on May 6, 2024. On May 8, 2024, counsel for the Plaintiffs made the Court ~~denied~~aware of certain questionable conduct by one of the ~~motion on~~plaintiffs. The Court informed counsel for the ~~grounds it is premature.~~Company of such conduct and, as a result, the Company moved for a mistrial which the Court granted and reset the case for trial in September. The Company intends to ~~refile the motion to strike class certification if and when the Plaintiffs file a motion to certify the class. The Company believes that the lawsuit is without merit and intends to~~ defend itthese cases vigorously. While there can be no assurance regarding the ultimate outcome of the ~~litigation,~~trial, 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”).

~~In addition to the~~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~~ a license agreement (“License ~~Agreement~~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 ~~June 30, 2023,~~March 31, 2024, the Company estimates the combined remaining liabilities and obligations for the License Agreement commitments could be up to approximately $~~25.0~~20.0 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.

~~SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

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 June 30,				For the Six Months Ended June 30,				For the Three Months Ended March 31,
	2023		2022		2023		2022		2024		2023
	(In thousands)								(In thousands)
Equity compensation expense included in operating expenses	$	10	$	689	$	544	$	2,654	$	243	$	534
Equity compensation expense included in selling, general and administrative expenses		3,715		1,860		7,663		6,877		3,277		3,948
Total equity compensation expense	$	3,725	$	2,549	$	8,207	$	9,531	$	3,520	$	4,482

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 ~~6.9~~6.7 million shares are available for future issuance as of ~~June 30, 2023.~~March 31, 2024.

~~Bonus Performance Restricted Units~~

Subsequent to June 30, 2023, the Company approved performance-vesting restricted units (the “Bonus Performance Restricted Units”) in accordance with its annual bonus plan for 2023 (the “2023 Bonus Plan”), which the Company anticipates will be granted later in the third quarter. The 2023 Bonus Plan provides for bonus awards payable 50~~% in cash and~~ 50% in performance-vesting restricted units (the “Bonus Performance Restricted Units”) and is based upon the Company’s achievement of specified performance goals, as defined by the 2023 Bonus Plan, with respect to the year ended December 31, 2023 (“Fiscal 2023”). The total number of units eligible to vest into shares of stock is based on the level of achievement of the targets for Fiscal 2023 which ranges from 0~~% (if below threshold performance), to~~ ~~100% (if at target performance) with opportunities to earn above 100% when achievement is above the target performance for certain metrics.~~

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 six months ended June 30, 2023 and the remaining unvested units forfeited in accordance with their terms.~~

~~Long-term Incentive Performance Restricted Awards~~

~~During the six months ended June 30, 2023, the Company granted long-term incentive plan awards for 2023 (the “2023 Long-Term Incentive Grant”) which were comprised of approximately~~ ~~65,000~~ ~~nonqualified stock options (the “Long-Term Incentive Options”) and approximately~~ ~~240,000~~ ~~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 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 is 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.

~~SEAWORLD ENTERTAINMENT, INC. AND SUBSIDIARIES~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~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 ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, a portion of the previously granted long-term incentive performance restricted units under the 2019 Long-Term Incentive Plan and 2021 Long-Term Incentive Plan vested based on the Company’s actual Fiscal ~~2022~~2023 results. The remainder of the ~~2019~~2021 Long-Term Incentive Plan awards ~~are eligible to vest~~were forfeited in ~~2024.~~accordance with their terms.

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 ~~June 30, 2023,~~March 31, 2024, ~~96,582,649~~96,961,736 shares of common stock were issued in the accompanying unaudited condensed consolidated balance sheet, which includes ~~32,611,539~~33,065,289 shares of treasury stock held by the Company (see Share Repurchase Programs discussion which follows) but excludes ~~1,422,593~~1,165,459 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”). In March 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 at that time. Under the Former Share Repurchase Program, during the six months ended June 30, 2022, the Company repurchased~~ ~~3,563,086~~ ~~shares for an aggregate total of approximately $250.0~~ ~~million, leaving~~ no ~~amount remaining under the Former Share Repurchase Program as of April 29, 2022.~~

~~In May 2022, the Board approved a $250.0~~ ~~million share repurchase program (the “May Share Repurchase Program”). Under the May Share Repurchase Program, during the six months ended June 30, 2022, the Company repurchased~~ ~~4,314,096~~ ~~shares for an aggregate total of approximately $214.6~~ ~~million, leaving approximately $35.4~~ ~~million available as of June 30, 2022. Subsequent to June 30, 2022, the Company repurchased~~ ~~771,656~~ ~~shares for an aggregate total of approximately $35.4~~ ~~million, leaving~~ no ~~amount remaining under the May Share Repurchase Program as of July 29, 2022.~~

In August 2022, the Board approved a new $250.0 million share repurchase program (the ~~“Share~~“Former Share Repurchase Program”)~~. Under the Share Repurchase Program, during the year ended~~ of which approximately $38.5 million remained available as of December 31, ~~2022,~~2023. During the three months ended March 31, 2024, the Company repurchased ~~3,774,659~~375,000 shares for an aggregate total of approximately $~~193.6~~20.2 ~~million. During~~million, leaving approximately $18.3 million remaining under the ~~six months ended June 30, 2023,~~Former Share Repurchase Program as of March 31, 2024.

In March 2024, the Company announced that its Stockholders and Board of Directors approved a new $500.0 million share repurchase program (the "Share Repurchase Program"). Subsequent to March 31, 2024 through May 6, 2024, the Company repurchased ~~235,000~~1,523,095 shares for an aggregate total of approximately $~~13.9~~80.6 million, leaving approximately $~~42.4~~419.4 million ~~available~~remaining under the Share Repurchase Program as of ~~June 30, 2023.~~May 6, 2024.

Under the Former Share Repurchase Program and 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 Former Share Repurchase Program and 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.

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.~~2023.

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 1213 differentiated theme parks that are grouped in key markets across the United ~~States.~~States and in the United Arab Emirates. 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~~holds certain meetings and operational review sessions on a frequent basis 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.

~~We are seeing a return~~While conditions have improved in some markets and for various positions, the current condition of the overall labor market and the challenging current operating environment have led to ~~more normalized staffing levels, but wage pressures~~turnover and ~~labor availability~~hiring challenges ~~remain~~ for some positions and/or markets which could impact operations and the guest experience. ~~We remain committed to our efforts to recruit and retain strong talent as a key to our success.~~ We have also been impacted by higher interest rates and supply chain disruptions (which has, at times, impacted ride and/or in-park facility availability). ~~We have heightened our focus~~

Stockholders Agreement and Share Repurchase Program

On March 25, 2024, the Company held a Special Meeting of Stockholders to: (1) approve the amendment, entered into on ~~cost reduction~~February 27, 2024, to the Stockholders Agreement, dated May 27, 2019, by and ~~efficiency opportunities, including optimized labor deployment,~~between Hill Path Capital LP ("Hill Path") and the Company (the “Amendment Proposal”); and (2) if the Amendment Proposal was approved, to approve and authorize a new $500.0 million share repurchase program of the Company's common stock, subject to the qualification that the Company will not repurchase additional shares if Hill Path's common stock ownership interest percentage would, as ~~well~~a result of any such repurchase, equal or exceed 50% (the “Share Repurchase Proposal”). Each of the Amendment Proposal and the Share Repurchase Proposal required approval by the holders of a majority of the shares of the Company's common stock outstanding and entitled to vote as ~~incremental pricing~~of the record date other than shares beneficially owned by Hill Path and ~~revenue opportunities.~~its affiliates (collectively, the “Disinterested Stockholders”). A majority of the Disinterested Stockholders approved both proposals.

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

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.

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 and/or start dates 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 ~~June 30, 2023~~March 31, 2024 and ~~2022.~~2023. 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.

Comparison of the Three Months Ended ~~June 30, 2023~~March 31, 2024 to the Three Months Ended ~~June 30, 2022~~March 31, 2023

The following table presents key operating and financial information for the three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022:~~2023:

For the Three Months Ended

June 30,

Variance

2023

2022

#

%

Summary Financial Data:

(In thousands, except per capita data)

Net revenues:

Admissions

$
269,894

$
275,505

$
(5,611
)

(2.0
%)
Food, merchandise and other

226,135

229,312

(3,177
)

(1.4
%)
Total revenues

496,029

504,817

(8,788
)

(1.7
%)
Costs and expenses:

Cost of food, merchandise and other revenues

38,210

41,518

(3,308
)

(8.0
%)
Operating expenses (exclusive of depreciation and amortization shown separately below)

195,728

190,496

5,232

2.7
%
Selling, general and administrative expenses

68,166

56,158

12,008

21.4
%
Severance and other separation costs

656

83

573

NM

Depreciation and amortization

37,831

38,551

(720
)

(1.9
%)
Total costs and expenses

340,591

326,806

13,785

4.2
%
Operating income

155,438

178,011

(22,573
)

(12.7
%)
Other income, net

(5
)

(32
)

27

84.4
%
Interest expense

36,954

26,810

10,144

37.8
%
Income before income taxes

118,489

151,233

(32,744
)

(21.7
%)
Provision for income taxes

31,434

34,623

(3,189
)

(9.2
%)
Net income

$
87,055

$
116,610

$
(29,555
)

(25.3
%)
Other data:

Attendance

6,139

6,264

(125
)

(2.0
%)
Total revenue per capita

$
80.80

$
80.59

$
0.21

0.3
%
Admission per capita

$
43.96

$
43.98

$
(0.02
)

(0.0
%)
In-park per capita spending

$
36.84

$
36.61

$
0.23

0.6
%


	For the Three Months Ended
	March 31,						Variance
	2024			2023			$			%
Summary Financial Data:	(In thousands, except per capita data and %)
Net revenues:
Admissions	$	165,809		$	163,863		$	1,946			1.2	%
Food, merchandise and other		131,614			129,483			2,131			1.6	%
Total revenues		297,423			293,346			4,077			1.4	%
Costs and expenses:
Cost of food, merchandise and other revenues		23,047			23,221			(174	)		(0.7	%)
Operating expenses (exclusive of depreciation and amortization shown separately below)		164,883			172,674			(7,791	)		(4.5	%)
Selling, general and administrative expenses		47,877			48,281			(404	)		(0.8	%)
Severance and other separation costs		293			4			289		NM
Depreciation and amortization		39,182			37,394			1,788			4.8	%
Total costs and expenses		275,282			281,574			(6,292	)		(2.2	%)
Operating income		22,141			11,772			10,369			88.1	%
Other expense, net		180			46			134		NM
Interest expense		38,777			36,401			2,376			6.5	%
Loss before income taxes		(16,816	)		(24,675	)		7,859			31.9	%
Benefit from income taxes		(5,615	)		(8,208	)		2,593			31.6	%
Net Loss	$	(11,201	)	$	(16,467	)	$	5,266			32.0	%
Other data:
Attendance		3,450			3,378			72			2.1	%
Total revenue per capita	$	86.21		$	86.84		$	(0.63	)		(0.7	%)
Admission per capita	$	48.06		$	48.51		$	(0.45	)		(0.9	%)
In-park per capita spending	$	38.15		$	38.33		$	(0.18	)		(0.5	%)

NM-Not Meaningful.

Admissions revenue. Admissions revenue for the three months ended ~~June 30, 2023 decreased $5.6~~March 31, 2024 increased $1.9 million, or ~~2.0%~~1.2%, to ~~$269.9~~$165.8 million as compared to ~~$275.5~~$163.9 million for the three months ended ~~June 30, 2022.~~March 31, 2023. The ~~decline~~improvement was ~~largely~~primarily a result of an increase in attendance, partially offset by a decrease in ~~attendance.~~admissions per capita. Total attendance for the ~~second~~first quarter of ~~2023 decreased~~2024 increased by approximately ~~125~~seventy-two thousand guests, or ~~2.0%~~2.1%, when compared to the prior year quarter. ~~The decrease in attendance~~Attendance was ~~primarily due to significantly~~positively impacted by a favorable calendar shift including the earlier timing of Easter and certain school spring breaks and was negatively impacted by adverse weather ~~including some combination of unusually hot and cold weather, rain and / or the fall-out from Canadian wildfires,~~ across most of our markets, particularly at our Florida parks, including during peak visitation periods. Admission per capita decreased by ~~$0.02~~0.9% to ~~$43.96~~$48.06 for the ~~second~~first quarter of ~~2023~~2024 compared to ~~$43.98~~$48.51 in the prior year quarter, primarily due to the net impact of the admissions product mix ~~partially offset by the realization of higher prices in our admission products resulting from our strategic pricing efforts~~ when compared to the prior year quarter.

Food, merchandise and other revenue. Food, merchandise and other revenue for the three months ended ~~June 30, 2023 decreased $3.2~~March 31, 2024 increased $2.1 million, or ~~1.4%~~1.6%, to ~~$226.1~~$131.6 million as compared to ~~$229.3~~$129.5 million for the three months ended ~~June 30, 2022,~~March 31, 2023, as a result of ~~a decrease~~an increase in attendance, as discussed above, partially offset by ~~an increase~~decreased in ~~in-park~~park per capita spending. In-park per capita spending ~~increased~~decreased by ~~0.6%~~0.5% to ~~$36.84~~$38.15 in the ~~second~~first quarter of ~~2023~~2024 compared to ~~$36.61~~$38.33 in the ~~second~~first quarter of ~~2022.~~2023. In park per capita spending improved primarily due to pricing initiatives when compared to the second quarter of 2022. In-park per capita spending was impacted negatively by factors including weather, closures and disruption related to construction delays at certain in park locations.

~~Costs of food, merchandise and other revenues.~~ ~~Costs of food, merchandise and other revenues for the three months ended June 30, 2023~~ decreased ~~$3.3 million, or 8.0%, to $38.2 million as compared to $41.5 million for the three months ended June 30, 2022,~~ primarily due to a decrease in ~~related revenue along with decreased freight costs.~~

~~Operating expenses.~~ Operating expenses for the three months ended June 30, 2023 increased $5.2 million, or 2.7%, to $195.7 million as compared to $190.5 million for the three months ended June 30, 2022. The increase in operating expenses is primarily due to non-cash increases in self-insurance reserve adjustments and an increase in nonrecurring contractual liabilities and legal costs resulting from the previously disclosed temporary COVID-19 park closures, partially offset by the impact of implemented structural cost savings initiatives when compared to the second quarter of 2022.

~~Selling, general and administrative expenses~~. Selling, general and administrative expenses for the three months ended June 30, 2023 increased $12.0 million, or 21.4%, to $68.2 million as compared to $56.2 million for the three months ended June 30, 2022. The increase in selling, general and administrative expenses is primarily due to a $7.1 million increase in non-recurring third-party consulting costs for strategic initiatives along with an increase in marketing costs, partially offset by the impact of implemented cost savings and efficiency initiatives when compared to the second quarter of 2022.

~~Depreciation and amortization.~~ Depreciation and amortization expense for the three months ended June 30, 2023 decreased $0.7 million, or 1.9%, to $37.8 million as compared to $38.6 million for the three months ended June 30, 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 June 30, 2023 increased $10.1 million, or 37.8%, to $37.0 million as compared to $26.8 million for the three months ended June 30, 2022. The increase primarily relates to increased interest rates on variable rate debt.

~~Provision for income taxes.~~ Provision for income taxes in the three months ended June 30, 2023 was $31.4 million compared to $34.6 million for the three months ended June 30, 2022. Our consolidated effective tax rate was 26.5% for the three months ended June 30, 2023 compared to 22.9% for the three months ended June 30, 2022. The effective tax rate for the three months ended June 30, 2023 and 2022 was primarily impacted due to state income taxes and other compensation related items, partially offset by a tax benefit related to equity-based compensation which vested during the period.

~~Comparison of the Six Months Ended June 30, 2023 and 2022~~

~~The following table presents key operating and financial information for the six months ended June 30, 2023 and 2022:~~

For the Six Months Ended

June 30,

Variance

2023

2022

#

%

Summary Financial Data:

(In thousands, except per capita data)

Net revenues:

Admissions

$
433,757

$
426,367

$
7,390

1.7
%
Food, merchandise and other

355,618

349,143

6,475

1.9
%
Total revenues

789,375

775,510

13,865

1.8
%
Costs and expenses:

Cost of food, merchandise and other revenues

61,431

64,558

(3,127
)

(4.8
%)
Operating expenses (exclusive of depreciation and amortization shown separately below)

368,402

343,421

24,981

7.3
%
Selling, general and administrative expenses

116,447

102,217

14,230

13.9
%
Severance and other separation costs

660

113

547

NM

Depreciation and amortization

75,225

77,163

(1,938
)

(2.5
%)
Total costs and expenses

622,165

587,472

34,693

5.9
%
Operating income

167,210

188,038

(20,828
)

(11.1
%)
Other expense (income), net

41

(44
)

85

NM

Interest expense

73,355

52,180

21,175

40.6
%
Income before income taxes

93,814

135,902

(42,088
)

(31.0
%)
Provision for income taxes

23,226

28,279

(5,053
)

(17.9
%)
Net income

$
70,588

$
107,623

$
(37,035
)

(34.4
%)
Other data:

Attendance

9,517

9,666

(149
)

(1.5
%)
Total revenue per capita

$
82.94

$
80.23

$
2.71

3.4
%
Admission per capita

$
45.57

$
44.11

$
1.46

3.3
%
In-park per capita spending

$
37.37

$
36.12

$
1.25

3.5
%

~~NM-Not Meaningful.~~

~~Admissions revenue~~. Admissions revenue for the six months ended June 30, 2023 increased $7.4 million, or 1.7%, to $433.8 million as compared to $426.4 million for the six months ended June 30, 2022. The improvement was a result of an increase in admissions per capita, partially offset by a decrease in attendance. Total attendance for the first six months of 2023 decreased by approximately 149 thousand guests, or 1.5%, when compared to the first six months of 2022. The decrease in attendance was primarily due to significantly adverse weather, including some combination of unusually hot and cold weather, rain and / or the fall-out from Canadian wildfires, across most of our markets, including during peak visitation periods. Admission per capita increased by 3.3% to $45.57 for the six months ended June 30, 2023 compared to $44.11 for the six months ended June 30, 2022, primarily due to the realization of higher prices in our admission products resulting from our strategic pricing efforts, which was partially offset by the impact of the admissions product mix when compared to the prior year period.

~~Food, merchandise and other revenue.~~ Food, merchandise and other revenue for the six months ended June 30, 2023 increased $6.5 million, or 1.9%, to $355.6 million as compared to $349.1 million for the six months ended June 30, 2022 as a result of an increase inone-time 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 3.5% to $37.37 for~~ the ~~six months ended June 30, 2023~~impact of pricing initiatives when compared to ~~$36.12 for~~ the ~~six months ended June 30, 2022. In park per capita spending improved primarily due to pricing initiatives and an increase in~~first quarter of 2023. Excluding one-time revenue related to our international services agreements, ~~when compared to the first six months of 2022 partially offset~~in-park per capita spending increased by ~~factors including weather, closures and disruption related to construction delays at certain in park locations.~~4.0%. 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 ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 decreased ~~$3.1~~$0.2 million, or ~~4.8%~~0.7%, to ~~$61.4~~$23.0 million as compared to ~~$64.6~~$23.2 million for the ~~six~~three months ended ~~June 30, 2022, primarily due to decreased freight costs.~~March 31, 2023.

2524

Operating expenses.Operating expenses for the ~~six~~three months ended ~~June 30, 2023 increased by $25.0~~March 31, 2024 decreased $7.8 million, or ~~7.3%~~4.5%, to ~~$368.4~~$164.9 million as compared to ~~$343.4~~$172.7 million for the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. The ~~increase~~decrease in operating expenses is primarily due to an increase in nonrecurring legal costs and contractual liabilities resulting from the previously disclosed temporary COVID-19 park closures, increased labor-related costs primarily due to more normalized staffing levels and an increasea decrease in costs associated with our international services agreements ~~partially offset by~~and a decrease in legal costs, including approximately $3.1 million related to the ~~impact of implemented structural cost savings initiatives~~previously disclosed temporary COVID-19 park closures when compared to the first ~~six months~~quarter of ~~2022.~~2023. 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.

Selling, general and administrative expenses. Selling, general and administrative expenses for the ~~six~~three months ended ~~June 30, 2023 increased $14.2~~March 31, 2024 decreased $0.4 million, or ~~13.9%~~0.8%, to ~~$116.4~~$47.9 million as compared to ~~$102.2~~$48.3 million for the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. The ~~increase~~decrease in selling, general and administrative expenses is primarily due to a ~~$10.7 million increase~~decrease in labor-related costs and third-party consulting costs, ~~including approximately $8.8 million of nonrecurring costs for strategic initiatives,~~ partially offset by ~~the impact of implemented cost savings and efficiency initiatives when compared to the first six months of 2022.~~increased marketing-related costs.

Depreciation and amortization. Depreciation and amortization expense for the ~~six~~three months ended ~~June 30, 2023 decreased $1.9~~March 31, 2024 increased $1.8 million, or ~~2.5%~~4.8%, to ~~$75.2~~$39.2 million as compared to ~~$77.2~~$37.4 million for the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. The ~~decrease~~increase primarily relates to the impact of new asset additions, partially offset by asset retirements and fully depreciated ~~assets, partially offset by new asset additions.~~assets.

Interest expense. Interest expense for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 increased ~~$21.2~~$2.4 million, or ~~40.6%~~6.5%, to ~~$73.4~~$38.8 million as compared to ~~$52.2~~$36.4 million for the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. The increase primarily relates to ~~increased interest rates on variable rate debt.~~a write-off of discounts and debt issuance costs resulting from the Refinancing Transactions during the three months ended March 31, 2024. See Note 6–Long-Term Debt to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further details.

~~Provision for~~Benefit from income taxes. ~~Provision for~~Benefit from income taxes ~~for~~in the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 was ~~$23.2~~$5.6 million compared to ~~$28.3~~$8.2 million for the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. Our consolidated effective tax rate was ~~24.8%~~33.4% for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 compared to ~~20.8%~~33.3% for the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. The effective tax rate in the ~~six~~three months ended ~~June 30,~~March 31, 2024 and 2023 was primarily impacted by state income taxes and other compensation related items, partially offset by a tax benefit related to equity-based compensation which vested during the period. The effective tax rate in the six months ended June 30, 2022 was primarily impacted by a tax benefit related to equity-based compensation which vested during the period, partially offset by state income taxes and other compensation related items. See Note 4–Income Taxes in our notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

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 ~~June 30, 2023,~~March 31, 2024, we had a working capital ratio (defined as current assets divided by current liabilities) of ~~0.7.~~0.8. We typically have operated with a working capital ratio of ~~less than 1~~near 1.0 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.

2625

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 Six Months Ended June 30,						For the Three Months Ended March 31,
	2023			2022			2024			2023
	(Unaudited, in thousands)						(In thousands)
Net cash provided by operating activities	$	234,901		$	299,634		$	71,446		$	50,296
Net cash used in investing activities		(145,587	)		(101,048	)		(87,360	)		(69,758	)
Net cash used in financing activities		(24,888	)		(481,773	)		(27,296	)		(8,097	)
Net increase (decrease) in cash and cash equivalents, including restricted cash	$	64,426		$	(283,187	)
Net decrease in cash and cash equivalents, including restricted cash							$	(43,210	)	$	(27,559	)

Cash Flows from Operating Activities

Net cash provided by operating activities was ~~$234.9~~$71.4 million during the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 as compared to ~~$299.6~~$50.3 million during the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. The change in net cash provided by operating activities was ~~significantly~~primarily impacted by ~~a $23.0 million increase~~improved operating performance and changes in ~~cash interest payments.~~working capital.

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 ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 consisted primarily of capital expenditures of ~~$145.6~~$87.3 million largely related to future attractions. Net cash used in investing activities during the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 consisted of ~~$101.0~~$69.8 million of capital expenditures.

The following table presents detail of our capital expenditures for the periods ~~indicated:~~indicated. Certain amounts relating to prior period results were reclassified to conform to current period presentation. These reclassifications have not changed the results of operations of the prior period.


	For the Six Months Ended June 30,				For the Three Months Ended March 31,
	2023		2022		2024		2023
Capital Expenditures:	(Unaudited, in thousands)				(Unaudited, in thousands)
Core(a)	$	105,479	$	67,606	$	56,319	$	50,515
Expansion/ROI projects(b)		40,108		33,442		30,967		19,243
Capital expenditures, total	$	145,587	$	101,048	$	87,286	$	69,758

(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 ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 results primarily from ~~share repurchases of $13.9~~$16.9 million used to repurchase shares and from payment of tax withholdings on equity-based compensation through shares withheld of ~~$6.3~~$7.5 million. Net cash used in financing activities during the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 results primarily from ~~share repurchases of $454.8 million and~~ payment of tax withholdings on equity-based compensation through shares withheld of ~~$22.1~~$5.6 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 ~~June 30, 2023,~~March 31, 2024, 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”).

As of ~~June 30, 2023,~~March 31, 2024, our Senior Secured Credit Facilities consisted of ~~$1.179~~$1.170 billion in Term BB-2 Loans which will mature in August 2028, along with a $390.0 million Revolving Credit Facility, which had no amounts outstanding as of ~~June 30, 2023~~March 31, 2024 and will mature in August 2026. As of ~~June 30, 2023,~~March 31, 2024, SEA had approximately ~~$18.4~~$17.5 million of outstanding letters of credit, leaving approximately ~~$371.6~~$372.5 million available for borrowing under the Revolving Credit Facility.

On May 2, 2024, SEA further amended the Amended and Restated Credit Agreement to incur an aggregate principal amount of $380.0 million of Incremental Term B-2 Loans under the Credit Agreement (the “Incremental Term B-2 Loans”) to finance the redemption of the First-Priority Senior Secured Notes and for general corporate purposes.

Senior Notes and First-Priority Senior Secured Notes

As of ~~June 30, 2023,~~March 31, 2024, 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.

On May 2, 2024, SEA completed the redemption for all of the $227.5 million aggregate principal amount of the First-Priority Senior Secured Notes with proceeds received from the Incremental Term B-2 Loans.

Covenant Compliance

As of ~~June 30, 2023,~~March 31, 2024, 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 ~~(loss)~~ 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 U.S. generally accepted accounting principles (“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.

2827

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

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Last Twelve Months Ended
June 30,

2023

2022

2023

2022

2023

(Unaudited, in thousands)

Net income

$
87,055

$
116,610

$
70,588

$
107,623

$
254,155

Provision for income taxes

31,434

34,623

23,226

28,279

93,830

Interest expense

36,954

26,810

73,355

52,180

138,676

Depreciation and amortization

37,831

38,551

75,225

77,163

150,682

Equity-based compensation expense (a)

3,866

3,205

9,071

11,082

17,746

Loss on impairment or disposal of assets and certain non-cash expenses(b)

10,595

4,411

14,262

9,015

19,465

Business optimization, development and strategic initiative costs (c)

12,104

5,790

21,529

9,394

31,981

Certain investment costs and other taxes

114

599

162

1,000

290

COVID-19 related incremental costs (d)

4,085

623

7,668

973

13,384

Other adjusting items (e)

209

3,224

1,573

3,677

4,309

Adjusted EBITDA (f)

$
224,247

$
234,446

$
296,659

$
300,386

$
724,518

Items added back to Covenant Adjusted EBITDA as defined in the Debt Agreements:

Estimated cost savings (g)

27,800

Other adjustments as defined in the Debt Agreements (h)

7,799

Covenant Adjusted EBITDA (i)

$
760,117


UNITED PARKS & RESORTS INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

	For the Three Months Ended March 31,						Last Twelve Months Ended March 31,
	2024			2023			2024
	(Unaudited, in thousands)
Net (loss) income	$	(11,201	)	$	(16,467	)	$	239,462
(Benefit from) provision for income taxes		(5,615	)		(8,208	)		81,504
Interest expense		38,777			36,401			149,042
Depreciation and amortization		39,182			37,394			155,996
Equity-based compensation expense (a)		4,291			5,205			17,047
Loss on impairment or disposal of assets and certain non-cash expenses (b)		5,604			3,667			33,573
Business optimization, development and strategic initiative costs (c)		3,534			9,425			28,012
Certain investment costs and other taxes		3,120			48			4,783
COVID-19 related incremental costs(d)		506			3,583			5,999
Other adjusting items		956			1,364			4,815
Adjusted EBITDA(e)	$	79,154		$	72,412		$	720,233
Items added back to Covenant Adjusted EBITDA, as defined in the Debt Agreements:
Estimated cost savings (f)								19,200
Other adjustments as defined in the Debt Agreements (g)								7,377
Covenant Adjusted EBITDA (h)							$	746,810

(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) ~~Reflects primarily~~Includes approximately $4.6 million, $2.3 million and $14.0 million related to non-cash self-insurance reserve adjustments for the three months ended March 31, 2024 and 2023 and twelve months ended March 31, 2024, respectively. For the three months ended March 31, 2024 and 2023 and for the twelve months ended March 31, 2024, also includes non-cash expenses related to ~~miscellaneous fixed asset disposals including~~ asset write-offs and costs related to certain rides and equipment which were removed from service. ~~Includes non-cash self-insurance reserve adjustments of approximately $4.7 million, $7.0 million and $9.6 million for~~

(c) For the three ~~six,~~ and twelve months ended ~~June 30, 2023, respectively, and approximately $3.9 million for the six months ended June 30, 2022.~~

(c) Reflects business optimization, development and other strategic initiative costs primarily related to: (i) $11.2 million, $14.0 million, and $18.7 million of third-party consulting costs for the three, six, and twelve months ended June 30, 2023, respectively, and (ii) $6.2 million and $11.2 million of other business optimization costs and strategic initiative costs for the six and twelve months ended June 30, 2023, respectively.~~For the three and six months ended June 30, 2022,~~March 31, 2024, reflects business optimization, development and other strategic initiative costs primarily related to: (i) ~~$2.9~~$1.8 million and ~~$5.1 million, respectively of third-party consulting costs and (ii) $2.5 million and $3.9~~$10.4 million, respectively of other business optimization costs and strategic initiative costs; and (ii) $1.5 million and $15.5 million, respectively of third-party consulting costs. For the three months ended March 31, 2023, reflects business optimization, development and other strategic initiative costs primarily related to: (i) $6.6 million of other business optimization costs and strategic initiative costs; and (ii) $2.8 million of third-party consulting costs.

(d) For the three ~~six,~~ and twelve months ended ~~June 30, 2023,~~March 31, 2024, primarily reflects costs associated with ~~certain legal matters and~~ nonrecurring contractual liabilities and respective assessments related to the previously disclosed temporary COVID-19 park closures. For the three ~~and six~~ months ended ~~June 30, 2022,~~March 31, 2023, primarily relates to ~~incremental non-recurring~~ costs associated with certain legal matters related to the previously disclosed temporary COVID-19 ~~pandemic, primarily associated with incremental labor-related costs to prepare, staff, and operate the parks with enhanced safety measures and costs associated with COVID-19 related legal matters.~~park closures.

(e) Reflects the impact of expenses, net of insurance recoveries and adjustments, incurred primarily related to certain matters, which we are permitted to exclude under the credit agreement governing our Senior Secured Credit Facilities due to the unusual nature of the items. For the three and six months ended June 30, 2022, includes $3.6 million related to a legal settlement.

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

~~(g)~~(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 ~~income~~ (loss). income.

~~(h)~~(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.

~~(i)~~28

(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 ~~(g)~~(f) and ~~(h)~~(g) above.

Contractual Obligations

There have been no material changes to our contractual obligations as ~~June 30, 2023~~of March 31, 2024 from those previously disclosed in our Annual Report on Form ~~10-K.~~10-K other than the debt and interest obligations pursuant to the Refinancing Transactions (see Note 6–Long-Term Debt to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details). As a result, our total long-term debt obligations as of March 31, 2024, not including any possible prepayments, are as follows for the remainder of 2024, 2025-2026, 2027-2028, and thereafter, respectively (in thousands): $8,798; $250,960; $1,137,810; and $725,000. Our estimated future interest payments based on interest rates in effect at March 31, 2024 are as follows for the remainder of 2024, 2025-2026, 2027-2028, and thereafter, respectively (in thousands): $115,184; $271,627; $225,976; and $25,375. Includes amounts attributable to the Senior Secured Credit Facilities, Senior Notes and First-Priority Senior Notes calculated as of March 31, 2024 using certain assumptions and excluding any possible principal prepayments.

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~~February 29, 2024.

Off-Balance Sheet Arrangements

We had no material off-balance sheet arrangements as of ~~June 30, 2023.~~March 31, 2024.

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 ~~June 30, 2023.~~March 31, 2024. We presently manage interest rate risk primarily by managing the amount, sources and duration of our debt funding. At ~~June 30, 2023,~~March 31, 2024, 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 Adjusted Term SOFR would increase our annual interest expense by approximately ~~$15.7~~$15.6 million. Assuming no revolving credit borrowings, a hypothetical 100 bps increase in Adjusted Term SOFR would increase our annual interest expense by approximately ~~$11.8~~$11.7 million.

3029

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~~forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that ~~such~~ information required to be disclosed in our reports filed under the Exchange Act 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.

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 necessarily 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 June 30, 2023. ~~Based upon this evaluation, our management, including our~~ principal executive officer and principal financial officer have concluded, ~~that~~based on the ~~Company’s~~evaluation of the effectiveness of the disclosure controls and procedures ~~were not effective~~by our management as of the end of the ~~period~~fiscal quarter covered by this Quarterly Report, ~~on Form 10-Q due~~that our disclosure controls and procedures were effective to accomplish their objectives at 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 U.S. generally accepted accounting principles.reasonable assurance level.

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 ~~June 30, 2023~~March 31, 2024 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.

3230

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

See Note 8–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,~~2024, 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 ~~second~~first quarter of ~~2023.~~2024. 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)(2)

Average
Price Paid
per Share

Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs(2)

Maximum Number
(or Approximate
Dollar Value) of
Shares that May
Yet Be Purchased
Under the Plans
or Programs(2)

April 1, 2023

April 30, 2023

235,023

$
59.35

235,000

$
42,424,727

May 1, 2023

May 31, 2023

10,120

$
58.73

—

42,424,727

June 1, 2023

June 30, 2023

2,975

$
58.60

—

42,424,727

248,118

235,000

$
42,424,727


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, 2024	January 31, 2024		—		—		—	$	38,510,748
February 1, 2024	February 29, 2024		—		—		—		38,510,748
March 1, 2024	March 31, 2024		517,136	$	53.41		375,000		18,348,991
			517,136				375,000	$	18,348,991

(1)

Except for the ~~235,000~~375,000 shares of our common stock repurchased as described in footnote (2), 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)

~~Our~~In August 2022, our Board ~~had previously authorized~~of Directors approved a $250.0 million share repurchase program ~~of up to $250.0 million of our common stock~~ (the “Former Share Repurchase Program”)~~. In~~ of which approximately $38.5 million remained available as of December 31, 2023. During the three months ended March ~~2022,~~31, 2024, 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 at that time. Pursuant to the Former Share Repurchase Program, during the quarter ended June 30, 2022, weCompany repurchased ~~2,027,659~~375,000 shares for an aggregate total of approximately ~~$140.1~~$20.2 million, leaving ~~no amount~~approximately $18.3 million remaining under the Former Share Repurchase Program as of ~~April 29, 2022.~~March 31, 2024.

In ~~May 2022,~~March 2024, we announced that our Stockholders and Board of Directors approved a ~~$250.0~~new $500.0 million share repurchase program (the ~~“May Share~~"Share Repurchase ~~Program”~~Program"). ~~Pursuant~~Subsequent to ~~the~~March 31, 2024 through May ~~Share Repurchase Program, during the quarter ended June 30, 2022,~~6, 2024, we repurchased ~~4,314,096~~1,523,095 shares for an aggregate total of approximately ~~$214.6~~$80.6 million, leaving approximately ~~$35.4~~$419.4 million ~~available~~remaining under the ~~May~~ Share Repurchase Program as of ~~June 30, 2022. Subsequent to June 30, 2022, we repurchased 771,656 shares for an aggregate total of approximately $35.4 million, leaving no amount remaining under~~May 6, 2024.

Under the ~~May~~Former Share Repurchase Program ~~as of July 29, 2022.~~

In August 2022, we announced that our Board approved a new $250.0 million share repurchase program (the “Share Repurchase Program”). Under the Share Repurchase Program, during the year ended December 31, 2022, we repurchased 3,774,659 shares for an aggregate total of approximately $193.6 million. During the quarter ended June 30, 2023, we repurchased 235,000 shares for an aggregate total of approximately $13.9 million, leaving approximately $42.4 million available as of June 30, 2023.

~~Under the~~and 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 ~~June 30, 2023.~~March 31, 2024. 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

~~Rule 10b5-1 Trading Plans~~

OnNone of the Company's directors or officers ~~June 12, 2023~~adopted, ~~Kyle R. Miller~~modified, ~~the Company's~~or ~~Chief Park Operations Officer~~terminated ~~– Florida Parks entered into~~ a Rule 10b5-1 trading ~~plan intended to satisfy~~arrangement or a non-Rule 10b5-1 trading arrangement (within the ~~affirmative defense conditions~~meaning of ~~Rule~~ ~~10b5-1(c) under the Exchange Act (a "10b5-1 Plan"). Mr. Miller's 10b5-1 Plan provides for the potential sale~~Item 408 of ~~up to~~ ~~12,000~~ ~~shares of~~Regulation S-K) during the Company’s ~~common stock over the term of the plan, which runs between July 14, 2023 and July 12,~~fiscal quarter ended March 31, 2024. ~~Potential sales under Mr. Miller’s 10b5-1 Plan are subject to a stock price condition, which provides that sales will only occur if the Company’s stock price meets a certain minimum price~~.

Item 6. Exhibits

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


Exhibit No.		Description

10.1*3.1		Certificate of Amendment ~~No. 1, dated as~~ of ~~June 12, 2023, by~~Amended and ~~between J.P. Morgan Chase Bank, N.A., as administrative agent and as collateral agent, and SeaWorld~~Restated Certificate of Incorporation of United Parks & ~~Entertainment,~~Resorts Inc., effective February 12, 2024 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on February 13, 2024 (File No. 001-35883))

~~10.2*†~~3.2		Amended and Restated Bylaws of United Parks & Resorts Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form ~~of Option Grant Notice and Option Agreement (2023 Long-Term Incentive Plan Awards)~~8-K filed on February 13, 2024 (File No. 001-35883))

~~10.3*†~~10.1		Amendment No. 2, dated as January 22, 2024, to the Amended and Restated Credit Agreement, dated as of August 25, 2021, by and among SeaWorld Parks & Entertainment, Inc., United Parks & Resorts Inc., the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and as Collateral Agent (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 26, 2024 (File No. 001-35883))

10.2		Amendment No. 3, dated as of ~~Performance Stock Unit Grant Notice~~May 2, 2024, to the Amended and ~~Restricted Stock Unit~~Restated Credit Agreement, ~~(2023 Long-Term Incentive Plan Awards)~~dated as of August 25, 2021, by and among SeaWorld Parks & Entertainment, Inc., United Parks & Resorts Inc., the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and as Collateral Agent. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 2, 2024 (File No. 001-35883))

10.3		First Amendment, dated February 27, 2024, to the Stockholders Agreement, dated as of May 27, 2019 by and between Hill Path Capital LP and United Parks & Resorts Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on February 28, 2024 (File No. 001-35883))

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 ~~June 30, 2023,~~March 31, 2024, 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.

3432

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,~~UNITED PARKS & RESORTS INC.
		(Registrant)
Date: ~~August~~May 9, ~~2023~~2024		By: /s/ James W. Forrester, Jr.
		James W. Forrester, Jr.
		Interim Chief Financial Officer and Treasurer
		(Principal Financial Officer)

Date: ~~August~~May 9, ~~2023~~2024		By: /s/ Shekufeh Shirazi Boyle
		Shekufeh Shirazi Boyle
		Chief Accounting Officer
		(Principal Accounting Officer)

3533


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)


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


	June 30,			December 31,			March 31,			December 31,
	2023			2022			2024			2023
Assets
Current assets:
Cash and cash equivalents	$	146,746		$	79,196		$	203,712		$	246,922
Accounts receivable, net		87,526			71,050			80,429			73,845
Inventories		60,079			55,190			51,043			49,236
Prepaid expenses and other current assets		34,569			28,260			41,707			20,179
Total current assets		328,920			233,696			376,891			390,182
Property and equipment, at cost		3,703,144			3,576,092			3,870,671			3,814,799
Accumulated depreciation		(1,922,198	)		(1,869,413	)		(1,976,668	)		(1,972,861	)
Property and equipment, net		1,780,946			1,706,679			1,894,003			1,841,938
Goodwill		66,278			66,278			66,278			66,278
Trade names/trademarks, net		157,000			157,000			157,845			157,771
Right of use assets-operating leases		128,638			130,479			129,589			127,379
Deferred tax assets, net		15,458			12,332			8,617			8,019
Other assets, net		27,989			19,323			35,932			33,479
Total assets	$	2,505,229		$	2,325,787		$	2,669,155		$	2,625,046
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses	$	186,048		$	159,947		$	181,078		$	160,611
Current maturities of long-term debt		12,000			12,000			11,730			12,000
Operating lease liabilities		3,379			3,387			3,644			3,380
Accrued salaries, wages and benefits		19,798			17,423			24,762			21,204
Deferred revenue		222,654			169,535			209,933			155,614
Other accrued liabilities		61,964			46,914			58,743			58,106
Total current liabilities		505,843			409,206			489,890			410,915
Long-term debt, net		2,096,137			2,099,059			2,092,371			2,093,190
Long-term operating lease liabilities		113,760			115,396			114,791			112,724
Deferred tax liabilities, net		117,149			96,627			159,708			164,949
Other liabilities		49,852			43,163			55,459			51,484
Total liabilities		2,882,741			2,763,451			2,912,219			2,833,262
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, 2023 and December 31, 2022		—			—
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 96,582,649 and 96,287,771 shares issued at June 30, 2023 and December 31, 2022, respectively		966			963
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, no shares issued or outstanding at March 31, 2024 and December 31, 2023								—			—
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 96,961,736 and 96,660,357 shares issued at March 31, 2024 and December 31, 2023, respectively								970			967
Additional paid-in capital		713,659			710,151			719,772			723,260
Retained earnings		246,491			175,903			398,898			410,099
Treasury stock, at cost (32,611,539 and 32,376,539 shares at June 30, 2023 and December 31, 2022, respectively)		(1,338,628	)		(1,324,681	)
Treasury stock, at cost (33,065,289 and 32,690,289 shares at March 31, 2024 and December 31, 2023)								(1,362,704	)		(1,342,542	)
Total stockholders’ deficit		(377,512	)		(437,664	)		(243,064	)		(208,216	)
Total liabilities and stockholders’ deficit	$	2,505,229		$	2,325,787		$	2,669,155		$	2,625,046


	Shares of Common Stock Issued			Common Stock			Additional Paid-In Capital			Accumulated Deficit			Treasury Stock, at Cost			Total Stockholders' Deficit			Shares of Common Stock			Common Stock			Additional Paid-In Capital			Retained Earnings			Treasury Stock, at Cost			Total Stockholders' Deficit
Balance at December 31, 2021		95,541,992		$	955		$	711,474		$	(115,287	)	$	(631,058	)	$	(33,916	)
Balance at December 31, 2022																				96,287,771		$	963		$	710,151		$	175,903		$	(1,324,681	)	$	(437,664	)
Equity-based compensation		—			—			6,982			—			—			6,982			—			—			4,482			—			—			4,482
Vesting of restricted shares		361,403			4			(4	)		—			—			—			273,134			3			(3	)		—			—			—
Shares withheld for tax withholdings		(111,865	)		(1	)		(7,737	)		—			—			(7,738	)		(86,914	)		(1	)		(5,568	)		—			—			(5,569	)
Exercise of stock options		46,503			—			1,127			—			—			1,127			22,793			—			565			—			—			565
Repurchase of 1,535,427 shares of treasury stock, at cost		—			—			—			—			(109,905	)		(109,905	)
Net loss		—			—			—			(8,987	)		—			(8,987	)		—			—			—			(16,467	)		—			(16,467	)
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	)
Balance at March 31, 2023																				96,496,784		$	965		$	709,627		$	159,436		$	(1,324,681	)	$	(454,653	)


	For the Six Months Ended June 30,						For the Three Months Ended March 31,
		2023		2022			2024			2023
Cash Flows From Operating Activities:
Net income	$	70,588		$	107,623
Adjustments to reconcile net income to net cash provided by operating activities:
Net loss							$	(11,201	)	$	(16,467	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		75,225			77,163			39,182			37,394
Amortization of debt issuance costs and discounts		3,078			3,130			1,481			1,542
Deferred income tax provision		17,397			26,530
Loss on early extinguishment and modification of debt								542			—
Deferred income tax benefit								(5,840	)		(8,417	)
Equity-based compensation		8,207			9,531			3,520			4,482
Other, including loss on sale or disposal of assets, net		13,425			8,539			5,594			3,221
Changes in assets and liabilities:
Accounts receivable		(22,415	)		(9,690	)		(8,453	)		(1,361	)
Inventories		(4,881	)		(27,126	)		(1,844	)		(3,936	)
Prepaid expenses and other current assets		(5,372	)		(10,101	)		(21,320	)		(6,863	)
Accounts payable and accrued expenses		13,925			34,902			13,473			(345	)
Accrued salaries, wages and benefits		2,375			(5,737	)		3,558			5,377
Deferred revenue		58,256			80,778			55,913			42,072
Other accrued liabilities		12,562			4,699			(2,641	)		(1,276	)
Right-of-use assets and operating lease liabilities		197			354
Right of use assets and operating lease liabilities								121			104
Other assets and liabilities		(7,666	)		(961	)		(639	)		(5,231	)
Net cash provided by operating activities		234,901			299,634			71,446			50,296
Cash Flows From Investing Activities:
Capital expenditures		(145,587	)		(101,048	)		(87,286	)		(69,758	)
Other investing activities								(74	)		—
Net cash used in investing activities		(145,587	)		(101,048	)		(87,360	)		(69,758	)
Cash Flows From Financing Activities:
Repayments of long-term debt		(6,000	)		(6,000	)		(2,933	)		(3,000	)
Proceeds from draws on revolving credit facility		20,000			—			—			20,000
Repayments of revolving credit facility		(20,000	)		—			—			(20,000	)
Purchase of treasury stock		(13,947	)		(454,801	)		(16,898	)		—
Payment of tax withholdings on equity-based compensation through shares withheld		(6,340	)		(22,067	)		(7,460	)		(5,569	)
Exercise of stock options		1,644			1,935			455			565
Debt issuance costs		—			(469	)		(179	)		—
Other financing activities		(245	)		(371	)		(281	)		(93	)
Net cash used in financing activities		(24,888	)		(481,773	)		(27,296	)		(8,097	)
Change in Cash and Cash Equivalents, including Restricted Cash		64,426			(283,187	)		(43,210	)		(27,559	)
Cash and Cash Equivalents, including Restricted Cash—Beginning of period		82,320			444,486			246,922			82,320
Cash and Cash Equivalents, including Restricted Cash—End of period	$	146,746		$	161,299		$	203,712		$	54,761
Supplemental Disclosure of Noncash Investing and Financing Activities:
Supplemental Disclosure of Noncash Investing and Financing Activities
Capital expenditures in accounts payable	$	53,080		$	25,599		$	57,556		$	45,548
Right-of-use assets obtained in exchange for financing lease obligations	$	1,770		$	—
Treasury stock purchases not yet settled in other accrued liabilities	$	—		$	9,756		$	3,264		$	—


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


		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	3029

Item 4.	Controls and Procedures	3130

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	3331

Item 1A.	Risk Factors	3331

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3331

Item 3.	Defaults Upon Senior Securities	3431

Item 4.	Mine Safety Disclosures	3431

Item 5.	Other Information	3432

Item 6.	Exhibits	3432
	Signatures	3533


	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,					For the Three Months Ended March 31,
	2023			2022			2023		2022			2024			2023
Net revenues:
Admissions	$	269,894		$	275,505		$	433,757	$	426,367		$	165,809		$	163,863
Food, merchandise and other		226,135			229,312			355,618		349,143			131,614			129,483
Total revenues		496,029			504,817			789,375		775,510			297,423			293,346
Costs and expenses:
Cost of food, merchandise and other revenues		38,210			41,518			61,431		64,558			23,047			23,221
Operating expenses (exclusive of depreciation and amortization shown separately below)		195,728			190,496			368,402		343,421			164,883			172,674
Selling, general and administrative expenses		68,166			56,158			116,447		102,217			47,877			48,281
Severance and other separation costs		656			83			660		113			293			4
Depreciation and amortization		37,831			38,551			75,225		77,163			39,182			37,394
Total costs and expenses		340,591			326,806			622,165		587,472			275,282			281,574
Operating income		155,438			178,011			167,210		188,038			22,141			11,772
Other (income) expense, net		(5	)		(32	)		41		(44	)
Other expense, net													180			46
Interest expense		36,954			26,810			73,355		52,180			38,777			36,401
Income before income taxes		118,489			151,233			93,814		135,902
Provision for income taxes		31,434			34,623			23,226		28,279
Net income	$	87,055		$	116,610		$	70,588	$	107,623
Earnings per share:
Earnings per share, basic	$	1.36		$	1.63		$	1.10	$	1.46
Earnings per share, diluted	$	1.35		$	1.62		$	1.09	$	1.45
Loss before income taxes													(16,816	)		(24,675	)
Benefit from income taxes													(5,615	)		(8,208	)
Net loss												$	(11,201	)	$	(16,467	)
Loss per share:
Net loss per share, basic												$	(0.17	)	$	(0.26	)
Net loss per share, diluted												$	(0.17	)	$	(0.26	)
Weighted average common shares outstanding:
Basic		63,932			71,686			63,955		73,623			64,016			63,978
Diluted		64,352			72,168			64,479		74,449			64,016			63,978


	For the Three Months Ended June 30,				For the Six Months Ended June 30,				Last Twelve Months Ended June 30,
	2023		2022		2023		2022		2023
	(Unaudited, in thousands)
Net income	$	87,055	$	116,610	$	70,588	$	107,623	$	254,155
Provision for income taxes		31,434		34,623		23,226		28,279		93,830
Interest expense		36,954		26,810		73,355		52,180		138,676
Depreciation and amortization		37,831		38,551		75,225		77,163		150,682
Equity-based compensation expense (a)		3,866		3,205		9,071		11,082		17,746
Loss on impairment or disposal of assets and certain non-cash expenses(b)		10,595		4,411		14,262		9,015		19,465
Business optimization, development and strategic initiative costs (c)		12,104		5,790		21,529		9,394		31,981
Certain investment costs and other taxes		114		599		162		1,000		290
COVID-19 related incremental costs (d)		4,085		623		7,668		973		13,384
Other adjusting items (e)		209		3,224		1,573		3,677		4,309
Adjusted EBITDA (f)	$	224,247	$	234,446	$	296,659	$	300,386	$	724,518
Items added back to Covenant Adjusted EBITDA as defined in the Debt Agreements:
Estimated cost savings (g)										27,800
Other adjustments as defined in the Debt Agreements (h)										7,799
Covenant Adjusted EBITDA (i)									$	760,117


Period Beginning	Period Ended	Total Number of Shares Purchased(1)(2)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)		Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(2)
April 1, 2023	April 30, 2023		235,023	$	59.35		235,000	$	42,424,727
May 1, 2023	May 31, 2023		10,120	$	58.73		—		42,424,727
June 1, 2023	June 30, 2023		2,975	$	58.60		—		42,424,727
			248,118				235,000	$	42,424,727