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.

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 ~~78,723,283~~78,268,527 shares of Common Stock, par value $0.01 per share as of ~~November 1, 2019.~~August 4, 2020.

In addition to historical information, this Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of the federal securities laws. All statements, other than statements of historical facts, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, our results of operations, financial position and our business outlook, business trends and other information, may be forward-looking statements. Words such as “might,” “will,” “may,” “should,” “estimates,” “expects,” “continues,” “contemplates,” “anticipates,” “projects,” “plans,” “potential,” “predicts,” “intends,” “believes,” “forecasts,” “future,” “targeted,” “goal” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ materially include, among others, the risks, uncertainties and factors set forth under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (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” in this Quarterly Report on Form 10-Q mean SeaWorld Entertainment, Inc., its subsidiaries and affiliates.

We use our websites (www.seaworldentertainment.com and www.seaworldinvestors.com) and our corporate Twitter account (@SeaWorld) as channels of distribution of Company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about SeaWorld when you enroll your e-mail address by visiting the “E-mail Alerts” section of our website at www.seaworldinvestors.com. The contents of our website and social media channels are not, however, a part of this Quarterly Report on Form 10-Q.

We own or have rights to use a number of registered and common law trademarks, service marks and trade names in connection with our business in the United States and in certain foreign jurisdictions, including SeaWorld Entertainment, SeaWorld Parks & Entertainment, SeaWorld^®, Shamu^®, Busch Gardens^®, Aquatica^®, Discovery Cove^®, Sea Rescue^® and other names and marks that identify our theme parks, characters, rides, attractions and other businesses. In addition, we have certain rights to use Sesame Street^® marks, characters and related indicia through our 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.

	September 30,			December 31,			June 30,			December 31,
	2019			2018			2020			2019
Assets
Current assets:
Cash and cash equivalents	$	50,917		$	34,073		$	375,683		$	39,946
Accounts receivable, net		50,751			57,980			28,615			49,728
Inventories		34,785			35,814			35,824			33,163
Prepaid expenses and other current assets		14,588			18,700			19,206			46,312
Total current assets		151,041			146,567			459,328			169,149
Property and equipment, at cost		3,171,402			3,057,038			3,267,133			3,209,521
Accumulated depreciation		(1,453,186	)		(1,365,006	)		(1,546,800	)		(1,476,059	)
Property and equipment, net		1,718,216			1,692,032			1,720,333			1,733,462
Goodwill, net		66,278			66,278			66,278			66,278
Trade names/trademarks, net		157,244			158,343			157,000			157,000
Right of use assets-operating leases		142,538			—			138,905			141,438
Other intangible assets, net		526			14,120
Deferred tax assets, net		21,161			23,527			20,450			19,013
Other assets, net		13,806			14,735			15,104			14,178
Total assets	$	2,270,810		$	2,115,602		$	2,577,398		$	2,300,518
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	119,267		$	120,024		$	174,517		$	131,503
Current maturities of long-term debt, including revolving credit facility of $50,000 and $30,000 as of September 30, 2019 and December 31, 2018, respectively		65,505			45,505
Current maturities of long-term debt, including revolving credit facility of $50,000 as of December 31, 2019								15,505			65,505
Operating lease obligations		3,914			—			3,818			3,896
Accrued salaries, wages and benefits		16,461			20,966			7,570			15,499
Deferred revenue		114,536			101,110			133,838			104,416
Other accrued liabilities		23,912			23,066			31,690			81,841
Total current liabilities		343,595			310,671			366,938			402,660
Long-term debt, net of debt issuance costs of $5,369 and $6,641 as of September 30, 2019 and December 31, 2018, respectively		1,485,672			1,494,679
Long-term debt, net, including revolving credit facility of $311,000 as of June 30, 2020								2,006,582			1,482,619
Long-term operating lease obligations		125,290			—			122,109			124,339
Deferred tax liabilities, net		46,377			10,711			31,893			42,773
Other liabilities		38,173			34,347			40,755			37,235
Total liabilities		2,039,107			1,850,408			2,568,277			2,089,626
Commitments and contingencies (Note 11)
Commitments and contingencies (Note 10)
Stockholders’ Equity:
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, 0 shares issued or outstanding at September 30, 2019 and December 31, 2018		—			—
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 94,012,743 and 93,400,929 shares issued at September 30, 2019 and December 31, 2018, respectively		940			934
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, 0 shares issued or outstanding at June 30, 2020 and December 31, 2019								—			—
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 94,408,378 and 94,044,203 shares issued at June 30, 2020 and December 31, 2019, respectively								944			940
Additional paid-in capital		671,234			663,834			670,513			673,893
Accumulated other comprehensive (loss) income		(2,272	)		2,284
Accumulated other comprehensive loss								—			(1,559	)
Accumulated deficit		(35,296	)		(148,955	)		(247,027	)		(59,479	)
Treasury stock, at cost (15,790,463 and 10,174,589 shares at September 30, 2019 and December 31, 2018, respectively)		(402,903	)		(252,903	)
Treasury stock, at cost (16,260,248 and 15,790,463 shares at June 30, 2020 and December 31, 2019, respectively)								(415,309	)		(402,903	)
Total stockholders’ equity		231,703			265,194			9,121			210,892
Total liabilities and stockholders’ equity	$	2,270,810		$	2,115,602		$	2,577,398		$	2,300,518

See accompanying notes to unaudited condensed consolidated financial statements.

	For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended						For the Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2019			2018			2019			2018			2020			2019			2020			2019
Net revenues:
Admissions	$	268,048		$	279,873		$	624,789		$	635,682		$	9,775		$	227,828		$	100,281		$	356,741
Food, merchandise and other		205,618			203,302			475,444			456,580			8,251			178,164			71,306			269,826
Total revenues		473,666			483,175			1,100,233			1,092,262			18,026			405,992			171,587			626,567
Costs and expenses:
Cost of food, merchandise and other revenues		37,843			36,062			87,062			85,012			1,153			32,006			14,257			49,219
Operating expenses (exclusive of depreciation and amortization shown separately below)		175,634			198,781			495,917			544,354			59,049			170,398			192,048			320,283
Selling, general and administrative expenses		64,632			51,549			174,601			186,076			21,104			67,205			48,058			109,969
Restructuring and other separation costs		1,207			3,866			3,839			16,392
Severance and other separation costs														9			66			74			2,632
Depreciation and amortization		40,822			41,187			120,325			119,635			37,941			40,053			75,954			79,503
Total costs and expenses		320,138			331,445			881,744			951,469			119,256			309,728			330,391			561,606
Operating income		153,528			151,730			218,489			140,793
Operating (loss) income														(101,230	)		96,264			(158,804	)		64,961
Other income, net		(86	)		(59	)		(138	)		(38	)		(1	)		(79	)		(13	)		(52	)
Interest expense		21,463			19,500			64,063			59,974			21,908			21,803			41,061			42,600
Income before income taxes		132,151			132,289			154,564			80,857
Provision for income taxes		34,123			36,301			40,905			25,016
Net income	$	98,028		$	95,988		$	113,659		$	55,841
Other comprehensive income:
(Loss) income before income taxes														(123,137	)		74,540			(199,852	)		22,413
Provision for (benefit from) income taxes														7,892			21,889			(12,304	)		6,782
Net (loss) income													$	(131,029	)	$	52,651		$	(187,548	)	$	15,631
Other comprehensive (loss) income:
Unrealized gain (loss) on derivatives, net of tax		374			1,149			(4,556	)		11,116			855			(2,866	)		1,559			(4,930	)
Comprehensive income	$	98,402		$	97,137		$	109,103		$	66,957
Earnings per share:
Earnings per share, basic	$	1.25		$	1.11		$	1.40		$	0.65
Earnings per share, diluted	$	1.24		$	1.10		$	1.39		$	0.64
Comprehensive (loss) income													$	(130,174	)	$	49,785		$	(185,989	)	$	10,701
(Loss) earnings per share:
(Loss) earnings per share, basic													$	(1.68	)	$	0.65		$	(2.40	)	$	0.19
(Loss) earnings per share, diluted													$	(1.68	)	$	0.64		$	(2.40	)	$	0.19
Weighted average common shares outstanding:
Basic		78,164			86,616			81,003			86,410			78,093			81,520			78,153			82,432
Diluted		78,804			87,542			81,738			87,029			78,093			82,167			78,153			83,216

See accompanying notes to unaudited condensed consolidated financial statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Shares of Common Stock Issued			Common Stock			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Treasury Stock, at Cost			Total Stockholders' Equity			Shares of Common Stock Issued			Common Stock			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Treasury Stock, at Cost			Total Stockholders' Equity
Balance at December 31, 2018		93,400,929		$	934		$	663,834		$	(148,955	)	$	2,284		$	(252,903	)	$	265,194
Balance at December 31, 2019																							94,044,203		$	940		$	673,893		$	(59,479	)	$	(1,559	)	$	(402,903	)	$	210,892
Equity-based compensation		—			—			3,198			—			—			—			3,198			—			—			(3,601	)		—			—			—			(3,601	)
Unrealized loss on derivatives, net of tax benefit of $744		—			—			—			—			(2,064	)		—			(2,064	)
Unrealized gain on derivatives, net of tax expense of $254																							—			—			—			—			704			—			704
Vesting of restricted shares		440,646			4			(4	)		—			—			—			—			410,807			4			(4	)		—			—			—			—
Shares withheld for tax withholdings		(132,886	)		(1	)		(3,605	)		—			—			—			(3,606	)		(121,089	)		(1	)		(3,159	)		—			—			—			(3,160	)
Exercise of stock options		39,928			—			715			—			—			—			715			11,096			—			203			—			—			—			203
Adjustments to previous dividend declarations		—			—			3			—			—			—			3			—			—			1			—			—			—			1
Repurchase of 469,785 shares of treasury stock, at cost																							—			—			—			—			—			(12,406	)		(12,406	)
Net loss		—			—			—			(37,020	)		—			—			(37,020	)		—			—			—			(56,519	)		—			—			(56,519	)
Balance at March 31, 2019		93,748,617		$	937		$	664,141		$	(185,975	)	$	220		$	(252,903	)	$	226,420
Balance at March 31, 2020																							94,345,017		$	943		$	667,333		$	(115,998	)	$	(855	)	$	(415,309	)	$	136,114
Equity-based compensation		—			—			4,084			—			—			—			4,084			—			—			3,320			—			—			—			3,320
Unrealized loss on derivatives, net of tax benefit of $1,055		—			—			—			—			(2,866	)		—			(2,866	)
Unrealized gain on derivatives, net of tax expense of $318																							—			—			—			—			855			—			855
Vesting of restricted shares		57,642			1			(1	)		—			—			—			—			71,530			1			(1	)		—			—			—			—
Shares withheld for tax withholdings		(12,536	)		—			(362	)		—			—			—			(362	)		(8,987	)		—			(154	)		—			—			—			(154	)
Exercise of stock options		91,248			1			1,619			—			—			—			1,620			818			—			15			—			—			—			15
Adjustments to previous dividend declarations		—			—			1			—			—			—			1
Repurchase of 5,615,874 treasury shares		—			—			—			—			—			(150,000	)		(150,000	)
Net income		—			—			—			52,651			—			—			52,651
Balance at June 30, 2019		93,884,971		$	939		$	669,482		$	(133,324	)	$	(2,646	)	$	(402,903	)	$	131,548
Equity-based compensation		—			—			1,162			—			—			—			1,162
Unrealized gain on derivatives, net of tax expense of $137		—			—			—			—			374			—			374
Vesting of restricted shares		83,697			1			(1	)		—			—			—			—
Shares withheld for tax withholdings		(23,186	)		(1	)		(652	)		—			—			—			(653	)
Exercise of stock options		67,261			1			1,242			—			—			—			1,243
Adjustments to previous dividend declarations		—			—			1			—			—			—			1
Net income		—			—			—			98,028			—			—			98,028
Balance at September 30, 2019		94,012,743		$	940		$	671,234		$	(35,296	)	$	(2,272	)	$	(402,903	)	$	231,703
Net loss																							—			—			—			(131,029	)		—			—			(131,029	)
Balance at June 30, 2020																							94,408,378		$	944		$	670,513		$	(247,027	)	$	—		$	(415,309	)	$	9,121

See accompanying notes to unaudited condensed consolidated financial statements.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Shares of Common Stock Issued			Common Stock			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Treasury Stock, at Cost			Total Stockholders' Equity			Shares of Common Stock Issued			Common Stock			Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Treasury Stock, at Cost			Total Stockholders' Equity
Balance at December 31, 2017		92,637,403		$	926		$	641,324		$	(194,837	)	$	(5,076	)	$	(154,871	)	$	287,466
Impact of adoption of ASU 2018-02		—			—			—			1,094			(1,094	)		—			—
Balance at December 31, 2018																							93,400,929		$	934		$	663,834		$	(148,955	)	$	2,284		$	(252,903	)	$	265,194
Equity-based compensation		—			—			7,545			—			—			—			7,545			—			—			3,198			—			—			—			3,198
Unrealized gain on derivatives, net of tax expense of $2,774		—			—			—			—			7,491			—			7,491
Unrealized loss on derivatives, net of tax benefit of $744																							—			—			—			—			(2,064	)		—			(2,064	)
Vesting of restricted shares		360,092			4			(4	)		—			—			—			—			440,646			4			(4	)		—			—			—			—
Shares withheld for tax withholdings		(108,432	)		(1	)		(1,633	)		—			—			—			(1,634	)		(132,886	)		(1	)		(3,605	)		—			—			—			(3,606	)
Exercise of stock options		484			—			7			—			—			—			7			39,928			—			715			—			—			—			715
Adjustments to previous dividend declarations		—			—			47			—			—			—			47			—			—			3			—			—			—			3
Net loss		—			—			—			(62,844	)		—			—			(62,844	)		—			—			—			(37,020	)		—			—			(37,020	)
Balance at March 31, 2018		92,889,547		$	929		$	647,286		$	(256,587	)	$	1,321		$	(154,871	)	$	238,078
Balance at March 31, 2019																							93,748,617		$	937		$	664,141		$	(185,975	)	$	220		$	(252,903	)	$	226,420
Equity-based compensation		—			—			5,892			—			—			—			5,892			—			—			4,084			—			—			—			4,084
Unrealized gain on derivatives, net of tax expense of $918		—			—			—			—			2,476			—			2,476
Unrealized loss on derivatives, net of tax benefit of $1,055																							—			—			—			—			(2,866	)		—			(2,866	)
Vesting of restricted shares		135,114			1			(1	)		—			—			—			—			57,642			1			(1	)		—			—			—			—
Shares withheld for tax withholdings		(28,592	)		—			(635	)		—			—			—			(635	)		(12,536	)		—			(362	)		—			—			—			(362	)
Exercise of stock options		64,106			1			1,177			—			—			—			1,178			91,248			1			1,619			—			—			—			1,620
Adjustments to previous dividend declarations		—			—			(5	)		—			—			—			(5	)		—			—			1			—			—			—			1
Repurchase of 5,615,874 shares of treasury stock, at cost																							—			—			—			—			—			(150,000	)		(150,000	)
Net income		—			—			—			22,697			—			—			22,697			—			—			—			52,651			—			—			52,651
Balance at June 30, 2018		93,060,175		$	931		$	653,714		$	(233,890	)	$	3,797		$	(154,871	)	$	269,681
Equity-based compensation		—			—			5,183			—			—			—			5,183
Unrealized gain on derivatives, net of tax expense of $425		—			—			—			—			1,149			—			1,149
Vesting of restricted shares		86,922			1			(1	)		—						—			—
Shares withheld for tax withholdings		(23,758	)		(1	)		(672	)		—			—			—			(673	)
Exercise of stock options		111,532			1			2,005			—			—			—			2,006
Adjustments to previous dividend declarations		—			—			2			—			—			—			2
Net income		—			—			—			95,988			—			—			95,988
Balance at September 30, 2018		93,234,871		$	932		$	660,231		$	(137,902	)	$	4,946		$	(154,871	)	$	373,336
Balance at June 30, 2019																							93,884,971		$	939		$	669,482		$	(133,324	)	$	(2,646	)	$	(402,903	)	$	131,548

See accompanying notes to unaudited condensed consolidated financial statements.

	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
		2019		2018				2020		2019
Cash Flows From Operating Activities:
Net income	$	113,659		$	55,841
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							$	(187,548	)	$	15,631
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		120,325			119,635			75,954			79,503
Amortization of debt issuance costs and discounts		2,622			3,460			1,876			1,773
Loss on impairment or disposal of assets, net		3,770			12,477
Deferred income tax provision		39,705			24,478
Deferred income tax (benefit) provision								(12,913	)		5,463
Equity-based compensation		8,444			18,620			(281	)		7,282
Other, including loss on sale or disposal of assets, net								322			550
Changes in assets and liabilities:
Accounts receivable		5,817			(36,806	)		26,349			(7,033	)
Inventories		(919	)		(3,374	)		(2,655	)		(7,399	)
Prepaid expenses and other current assets		5,058			2,866			(5,294	)		976
Accounts payable and accrued expenses		3,775			8,649			24,624			15,167
Accrued salaries, wages and benefits		(4,505	)		10,225			(7,929	)		(6,216	)
Deferred revenue		15,483			36,586			36,234			64,052
Other accrued liabilities		109			14,902			(17,616	)		(2,989	)
Right-of-use assets and operating lease obligations		370			—			253			263
Other assets and liabilities		(30	)		(101	)		298			363
Net cash provided by operating activities		313,683			267,458
Net cash (used in) provided by operating activities								(68,326	)		167,386
Cash Flows From Investing Activities:
Capital expenditures		(152,880	)		(140,878	)		(53,699	)		(112,738	)
Other investing activities, net		24			(349	)		—			(52	)
Net cash used in investing activities		(152,856	)		(141,227	)		(53,699	)		(112,790	)
Cash Flows From Financing Activities:
Proceeds from issuance of senior secured notes, net								222,335			—
Repayments of long-term debt		(11,629	)		(17,780	)		(7,752	)		(7,753	)
Proceeds from draws on revolving credit facility		269,000			55,000			272,500			219,000
Repayments of revolving credit facility		(249,000	)		(70,000	)		(11,500	)		(104,000	)
Purchase of treasury stock		(150,000	)		—			(12,406	)		(150,000	)
Payment of tax withholdings on equity-based compensation through shares withheld		(4,621	)		(2,942	)		(3,314	)		(3,968	)
Exercise of stock options		3,578			3,191			218			2,335
Debt issuance costs								(1,089	)		—
Other financing activities		(572	)		(325	)		(719	)		(398	)
Net cash used in financing activities		(143,244	)		(32,856	)
Net cash provided by (used in) financing activities								458,273			(44,784	)
Change in Cash and Cash Equivalents, including Restricted Cash		17,583			93,375			336,248			9,812
Cash and Cash Equivalents, including Restricted Cash—Beginning of period		35,007			33,997			40,925			35,007
Cash and Cash Equivalents, including Restricted Cash—End of period	$	52,590		$	127,372		$	377,173		$	44,819
Supplemental Disclosure of Noncash Investing Activities:
Supplemental Disclosure of Noncash Investing and Financing Activities:
Capital expenditures in accounts payable	$	26,260		$	23,125		$	48,550		$	28,553
Right-of-use assets obtained in exchange for financing lease obligations							$	208		$	1,230
Other financing arrangements							$	2,837		$	—

See accompanying notes to unaudited condensed consolidated financial statements.

SeaWorld Entertainment, Inc., through its wholly-owned subsidiary, SeaWorld Parks & Entertainment, Inc. (“SEA”) (collectively, the “Company”), owns and operates 12 theme parks within the United States. The Company operates SeaWorld theme parks in Orlando, Florida; San Antonio, Texas; and San Diego, California; and Busch Gardens theme parks in Tampa, Florida; and Williamsburg, Virginia. The Company operates water park attractions in Orlando, Florida (Aquatica); San Antonio, Texas (Aquatica); San Diego, California (Aquatica); Tampa, Florida (Adventure Island); and Williamsburg, Virginia (Water Country USA). The Company also operates a reservations-only theme park in Orlando, Florida (Discovery Cove) and a seasonal park in Langhorne, Pennsylvania (Sesame Place).

In response to the global COVID-19 pandemic, and in compliance with government restrictions, the Company temporarily closed all of its theme parks, effective March 16, 2020. Beginning in June 2020, the Company began the phased reopening of some of its parks with capacity limitations, reduced hours and/or reduced operating days. In particular, on June 6, the Company’s Aquatica park in Texas reopened; on June 11, all five of the Company’s Florida parks reopened; on June 19, its SeaWorld park in Texas reopened; on July 24, its Sesame Place park in Pennsylvania reopened and on August 6, its Busch Gardens park in Virginia reopened. The Company continues to monitor guidance from federal, state and local authorities to determine when it can reopen in California. The Company does not currently plan to open its Aquatica water park in San Diego or its Water Country USA water park in Williamsburg for the 2020 operating season.

Since the global COVID-19 pandemic has begun, the Company has taken proactive measures for the safety of its guests, employees and animals, to appropriately manage costs and expenditures, and to maximize liquidity in response to the temporary park closures and limited reopenings related to COVID-19. Some of these measures included, but are not limited to, (i) increased its revolving credit commitments on March 10th and subsequently borrowed the remaining available amount; (ii) issued first-priority senior secured notes and second-priority senior secured notes to raise additional capital and further enhance available liquidity; (iii) entered into amendments to its existing senior secured credit facilities to amend its financial covenants (see Note 6–Long-Term Debt for details); (iv) furloughed approximately 95% of its employees upon closing all of its parks; (v) obtained payroll tax credit and deferred social security payroll taxes under the CARES act; (vi) reduced executive officers’ base salary by 20% until the theme parks substantially resume normal operations; (vii) eliminated and/or deferred all non-essential operating expenses at all of the parks and the corporate headquarters; (viii) eliminated substantially all advertising and marketing spend; (ix) substantially reduced or deferred all capital expenditures starting in March 2020 (other than minimal essential capital expenditures) and postponed to 2021 the opening of rides that were still under construction and scheduled to open in 2020; (x) worked with certain of its vendors and other business partners to manage, defer, and/or abate certain costs and; (xi) implemented a formal review and approval process for payments and cash disbursements. Concurrent with the reopening of some of its parks, the Company has begun to bring some employees back from furlough. The Company will continue to monitor the impact of the COVID-19 pandemic and may adjust its plans accordingly.

The COVID-19 pandemic, resulting park closures and limited park reopenings have had, and are likely to continue to have, a material impact on the Company’s financial statements. Federal, state and local governments have taken unprecedented measures to prevent the spread of COVID-19 in the population, including placing severe restrictions on social gatherings, which remain in place in all of the Company’s park locations.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, ~~2018~~2019 included in the Company’s Annual Report on Form 10-K filed with the SEC. The unaudited condensed consolidated balance sheet as of December 31, ~~2018~~2019 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K.

In the opinion of management, such unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations for the year ending December 31, ~~2019~~2020 or any future period due to the seasonal nature of the Company’s operations. ~~Based upon historical results,~~Prior to the COVID-19 pandemic, the Company ~~typically generates~~historically generated its highest revenues in the second and third quarters of each year and ~~incurs~~typically incurred a net loss in the first and fourth quarters, in part because 7 of its theme parks are typically only open for a portion of the year. The results of operations for the three and six months ended June 30, 2020 were materially impacted by the global COVID-19 pandemic which ultimately led to temporary park closures effective on March 16, 2020. The timing of these park closures fell during historically high volume spring break and summer weeks. For the vast majority of the quarter, all of the Company’s parks were closed with phased, reduced capacity reopenings beginning in June for seven of its parks. Attendance since the parks reopened in June has been impacted by capacity limitations, fewer operating days per week versus the prior year, limited marketing spend and a limited events line-up.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including SEA. All intercompany accounts have been eliminated in consolidation.

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions include, but are not limited to, the accounting for self-insurance, deferred tax assets and liabilities, deferred revenue, equity compensation, ~~and~~ the valuation of goodwill and other indefinite-lived intangible assets as well as reviews for potential impairment of assets, including other long-lived assets. Estimates are based on various factors including current and historical trends, as well as other pertinent industry data. The Company regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes. Actual results could differ from those estimates. Based on the uncertainty relating to the COVID-19 pandemic, including but not limited to the extent, duration and impact of park closures and limited park reopenings, public sentiment on social gatherings, travel and attendance patterns, potential supply chain disruptions and additional actions which could be taken by government authorities to manage the pandemic, the Company is not certain of the ultimate impact the COVID-19 pandemic could have on its estimates, business or results of operations for the year ending December 31, 2020.

The Company maintains discrete financial information for each of its twelve theme parks, which is used by the Chief Operating Decision Maker (“CODM”), identified as the Chief Executive Officer, or equivalent role, as a basis for allocating ~~resources.~~resources and assessing performance. Each theme park has been identified as an operating segment and meets the criteria for aggregation due to similar economic characteristics. In addition, all of the theme parks provide similar products and services and share similar processes for delivering services. The theme parks have a high degree of similarity in the workforces and target similar consumer groups. Accordingly, based on these economic and operational similarities and the way the CODM monitors and makes decisions affecting the operations, the Company has concluded that its operating segments may be aggregated and that it has 1 reportable segment.

Restricted cash is recorded in other current assets in the accompanying unaudited condensed consolidated balance sheets. Restricted cash consists primarily of funds received from strategic partners for use in approved marketing and promotional activities.

	September 30,		December 31,		June 30,		December 31,
	2019		2018		2020		2019
	(In thousands)				(In thousands)
Cash and cash equivalents	$	50,917	$	34,073	$	375,683	$	39,946
Restricted cash, included in other current assets		1,673		934		1,490		979
Total cash, cash equivalents and restricted cash	$	52,590	$	35,007	$	377,173	$	40,925

During the three and nine months ended September 30, 2019, the Company recorded approximately $1.3 million and $1.9 million, respectively, in fixed asset write-offs. During the three and nine months ended September 30, 2018, the Company recorded approximately $4.2 million and $11.9 million, respectively, in fixed asset write-offs primarily associated with certain rides and equipment.

Admissions revenue primarily consists of single-day tickets, annual or season passes or other multi-day or multi-park admission products. For single-day tickets, the Company recognizes revenue at a point in time, upon admission to the park. Annual passes, season passes, or other multi-day or multi-park passes allow guests access to specific parks over a specified time period. For these pass and multi-use products, revenue is deferred and recognized over the terms of the admission product based on estimated redemption rates for similar products and is adjusted periodically. For pass products purchased on an installment plan that have met their initial commitment period and have transitioned to a month to month basis, monthly charges are recognized as revenue as payments are received each month, with the exception of payments received during the temporary park closures (see further discussion which follows).

As a result of the temporary park closures due to the global COVID-19 pandemic, the Company upgraded some of its pass products and extended pass expiration dates for at least the equivalent period the related parks were closed. As a result, the Company adjusted its estimated redemption and recognition patterns to reflect the fact that there was no attendance during the park closures and accordingly the Company did not recognize revenue from these admission products while the parks were closed. For passes under installment plans that have transitioned to a month to month basis, payments received during the closure period were recorded as deferred revenue and will be recognized as revenue once the parks reopen, which may not necessarily reflect attendance patterns for these guests. Accordingly, for these passes, once the related parks reopen, the Company will temporarily pause monthly charges for the equivalent period the parks were closed.

The Company estimates a redemption rate using historical and forecasted growth rates and attendance trends by park for similar products. For the parks that remain closed, the Company is evaluating the estimates and assumptions used in its future estimated redemption rates for these products based on attendance patterns as parks reopen. Attendance trends factor in seasonality and are adjusted based on actual trends ~~periodically.~~periodically, including to reflect recent trends. Revenue is recognized on a pro-rata basis based on the estimated allocated selling price of the admission product. For multi-day admission products, revenue is allocated based on the number of visits included in the pass and recognized ratably based on each admission into the theme park.

Food, merchandise and other revenue primarily consists of culinary, merchandise and other in-park products and also includes other miscellaneous revenue which is not significant in the periods presented, including revenue related to the Company’s international agreements in the prior year period as discussed below. The Company recognizes revenue for food, merchandise and other in-park products when the related products or services are received by the guests. Certain admission products may also include bundled products at the time of purchase, such as culinary or merchandise items. The Company conducts an analysis of bundled products to identify separate distinct performance obligations that are material in the context of the contract. For those products that are determined to be distinct performance obligations and material in the context of the contract, the Company allocates a portion of the transaction price to each distinct performance obligation using each performance obligation’s standalone price. If the bundled product is related to a pass product and offered over time, revenue will be recognized over time accordingly.

Deferred revenue primarily includes revenue associated with pass products, admission or in-park products or services with a future intended use date and contract liability balances related to licensing and international agreements collected in advance of the Company’s performance and expected to be recognized in future periods. As a result of the temporary park closures, the Company extended some product expiration dates and as a result, estimated a long-term portion of deferred revenue related to these products of approximately $4.2 million, which is reflected in the chart which follows. The Company’s estimate of the long-term portion of deferred revenue related to such products factors in certain judgements and assumptions by park and product type, including, but not limited to, the reopening schedules and expected timing of attendance by mix of guests.

At ~~both September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, $10.3 million and $10.0 million, isrespectively, related to the long-term portion of deferred revenue included in other liabilities in the accompanying unaudited condensed consolidated balance sheets ~~related~~relates to the Company’s international agreement, as discussed in the following ~~section, which the~~section. The Company expects to recognize revenue related to its international agreement over the term of the respective license agreement beginning when substantially all of the services have been performed, which is expected to be upon opening.

The following table reflects the Company’s deferred revenue balance as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018:~~2019:

	September 30,		December 31,		June 30,		December 31,
	2019		2018		2020		2019
	(In thousands)				(In thousands)
Deferred revenue, including long-term portion	$	125,209	$	111,181	$	148,343	$	114,416
Less: Deferred revenue, long-term portion, included in other liabilities		10,673		10,071		14,505		10,000
Deferred revenue, short-term portion	$	114,536	$	101,110	$	133,838	$	104,416

The Company has received $10.0 million in deferred revenue recorded in other liabilities related to a nonrefundable payment received from a partner in connection with a project in the Middle East (the “Middle East Project”) to provide certain services pertaining to the planning and design of the Middle East Project, with funding received expected to offset internal expenses. Approximately ~~$4.6~~$5.5 million and ~~$3.8~~$5.0 million of costs incurred related to the Middle East Project are recorded in other assets in the accompanying unaudited condensed consolidated balance sheets as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. The Company has recognized an asset for the costs incurred to fulfill the contract as the costs are specifically identifiable, enhance resources that will be used to satisfy performance obligations in the future and are expected to be recovered. The related deferred revenue and expense will begin to be recognized when substantially all of the services have been performed. The Company continually monitors performance on the contract and will make adjustments, if necessary. The Middle East Project is ~~subject~~currently in construction and is scheduled to ~~various conditions, including, but not limited to, the parties completing the design development and there~~be completed in 2022. There is no assurance that the Middle East Project will be completed or ~~advance~~open to the ~~next stages.~~public.

In March 2017, the Company entered into ~~a Park Exclusivity and Concept Design Agreement and a Center Concept and Preliminary Design Support Agreement (collectively, the “ZHG Agreements”)~~certain agreements with ~~Zhonghong Holding, Co. Ltd. (“Zhonghong Holding”),~~ an affiliate of ~~Zhonghong Zhuoye~~ZHG Group, ~~Co., Ltd. (“ZHG Group”),~~ to provide design, support and advisory services for various potential projects and grant certain exclusive rights ~~in China, Taiwan, Hong Kong and Macau through December 2019.~~(collectively, the “ZHG Agreements”). In April 2019, the Company terminated the ZHG Agreements for non-payment of undisputed amounts owed. For the six months ended June 30, 2019, the Company recorded approximately $1.7 million which is included in food, merchandise and other revenue in the accompanying unaudited condensed consolidated statements of comprehensive (loss) income related to the ZHG Agreements. There were 0 amounts recorded as revenue related to the ZHG Agreements in the three months ended ~~September~~June 30, 2019. ~~For the nine months ended~~ See Note 9–Related-Party Transactions for additional disclosures.~~September~~

As of June 30, ~~2019,~~2020, the Company ~~recorded approximately $1.7 million, and~~determined that due to the temporary park closures effective March 16, 2020 resulting from the global COVID-19 pandemic, a triggering event had occurred that required an interim impairment review for ~~the three and nine months ended~~ ~~September~~ ~~30, 2018, the Company recorded approximately $1.3 million and $3.8 million, respectively, in food, merchandise~~goodwill and other ~~revenue in the accompanying unaudited condensed consolidated statements of comprehensive income~~indefinite-lived intangible assets. The Company performed a qualitative impairment analysis which included certain judgements and assumptions related to the ~~ZHG Agreements. See Note 10–Related-Party Transactions~~impact of the park closures, reopening time frames and expected attendance levels upon reopening and determined that, based on the significant excess fair values over carrying values that previously existed, there was 0 impairment of goodwill and other indefinite-lived intangible assets as of June 30, 2020. Additionally, using similar assumptions, the Company evaluated certain other long-lived assets, including its right of use assets for ~~further details.~~impairment and determined that, based on the significant excess estimated undiscounted cash flows over carrying values, there was 0 impairment of other long-lived assets as of June 30, 2020.

If the Company’s current assumptions, including those around the impact of the global COVID-19 pandemic and its projections of future cash flows and financial performance, as well as the economic outlook are not achieved, the Company may be required to record impairment charges in future periods, whether in connection with the Company’s next annual impairment testing, or on an interim basis, if any such change constitutes a triggering event outside of the quarter when the Company regularly performs its annual impairment test. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material.

The Company reviews new accounting pronouncements as they are issued or proposed by the Financial Accounting Standards Board (“FASB”).

On January 1, 2020, the Company adopted the following Accounting Standards Updates (“ASUs”) which had no material impact on its unaudited condensed consolidated financial statements or disclosures:

During 2019, the Company adopted ~~Accounting Standards Codification (“ASC”) 842,~~ ~~Leases.~~ ~~The new standard~~the following ASU:

During 2019, the Company also adopted the following ~~Accounting Standards Updates (“ASUs”)~~ASUs which had no material impact on its unaudited condensed consolidated financial statements or disclosures:

The Company is currently evaluating the impact of the following recently issued ASUs:

In accordance with the Earnings Per Share Topic of the ASC, basic (loss) earnings per share is computed by dividing net (loss) income by the weighted average number of shares of common stock outstanding during the period (excluding treasury stock and unvested restricted stock awards). Unvested restricted stock awards are eligible to receive dividends, if any; however, dividend rights will be forfeited if the award does not vest. Accordingly, only vested shares of formerly restricted stock are included in the calculation of basic (loss) earnings per share. The weighted average number of repurchased shares during the period, if any, which are held as treasury stock, are excluded from shares of common stock outstanding.

Diluted (loss) earnings 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.~~ options. There were approximately 2,345,000 and 2,023,000 potentially dilutive shares excluded from the computation of diluted loss per share during the three and six months ended June 30, 2020, respectively, as their effect would have been anti-dilutive due to the Company’s net loss in those periods. During the three and ~~nine~~six months ended ~~September~~June 30, 2019, there were approximately ~~394,000~~407,000 and ~~300,000~~253,000 anti-dilutive shares of common stock excluded from the computation of diluted earnings per share, respectively. There were 0 anti-dilutive shares of common stock excluded from the computation of diluted earnings per share during the three months ended September 30, 2018 and for the nine months ended September 30, 2018, there were approximately 1,736,000 anti-dilutive shares of common stock excluded from the computation of diluted earnings per share. The Company’s outstanding performance-vesting restricted awards of approximately ~~2,085,000~~1,487,000 and ~~1,941,000~~2,148,000 as of ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, respectively, are considered contingently issuable shares and are excluded from the calculation of diluted (loss) earnings per share until the performance measure criteria is met as of the end of the reporting period.

Income tax expense or benefit is recognized based on the Company’s estimated annual effective tax rate which is based upon the tax rate expected for the full calendar year applied to the pretax income or loss of the interim period. The Company’s consolidated effective tax rate for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 was ~~25.8%~~-6.4% and ~~26.5%~~6.2%, respectively, and differs from the statutory federal income tax rate of 21% primarily due to valuation allowance adjustments on federal and state net operating loss carryforwards, a valuation adjustment on certain federal tax credits and charitable contributions, changes in state tax rates, and other permanent items including equity-based compensation. The Company’s consolidated effective tax rate for the three and six months ended June 30, 2019 was 29.4% and 30.3%, respectively, and differs from the statutory federal income tax rate of 21% primarily due to state income taxes, a valuation allowance adjustment on state net operating loss carryforwards and other permanent items including equity-based compensation.

Due to the uncertainty of realizing the benefit from ~~the~~ deferred tax ~~asset recorded for certain state net operating loss carryforwards, the~~assets, tax positions are reviewed at least quarterly by assessing future expected taxable income from all sources. The Company has recorded a valuation allowance of approximately ~~$5.3~~$7.0 million for federal tax credits and approximately $1.0 million for charitable contributions as of June 30, 2020. Separately, the Company has recorded a valuation allowance for certain state net operating loss carryforwards of approximately $7.8 million and ~~$2.8~~$5.2 million, net of federal tax benefit, on the deferred tax assets related to those state net operating losses as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

~~The Company’s consolidated effective tax rate for the three and nine months ended September 30, 2018 was 27.4% and 30.9%, respectively, and differs from the statutory federal income tax rate of 21%~~ ~~primarily due to state income taxes and other permanent items, including a nondeductible legal settlement and equity-based compensation.~~ 13

The Company has determined that there are no positions currently taken that would rise to a level requiring an amount to be recorded or disclosed as an unrecognized tax benefit. If such positions do arise, it is the Company’s intent that any interest or penalty amount related to such positions will be recorded as a component of the income tax provision (benefit) in the applicable period.

The computation of the estimated annual effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the forecasted pre-tax income or loss for the year, projections of the proportion of income and/or loss earned and taxed in respective jurisdictions, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. The volatile global economic conditions resulting from the COVID-19 pandemic, the impacts of which are difficult to predict, may cause fluctuations in the Company’s forecasted pre-tax income or loss for the year, which could create volatility in its estimated annual effective tax rate. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or as the Company’s tax environment changes. To the extent that the estimated annual effective tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs.

Other accrued liabilities at ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, consisted of the following:

	September 30,		December 31,		June 30,		December 31,
	2019		2018		2020		2019
	(In thousands)				(In thousands)
Self-insurance reserve					$	7,673	$	7,488
Accrued property taxes	$	10,623	$	—		7,143		1,189
Self-insurance reserve		7,203		6,895
Accrued interest		620		490		4,093		573
Accrued legal settlement						—		65,000
Other		5,466		15,681		12,781		7,591
Total other accrued liabilities	$	23,912	$	23,066	$	31,690	$	81,841

As of December 31, ~~2018, other liabilities~~2019, accrued legal settlement above ~~included $11.5 million~~is related to ~~the EZPay plan lawsuit~~a previously disclosed legal settlement which was ~~funded~~paid, net of insurance proceeds, during the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. See further ~~details~~discussion in Note ~~11–~~10–Commitments and Contingencies.

Long-term debt as of ~~September~~June 30, ~~2019~~2020 and December 31, ~~2018~~2019 consisted of the following:

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

On ~~October 31, 2018,~~March 10, 2020, SEA entered into ~~a refinancing~~an amendment, Amendment No. 910 (the ~~“Amended~~“Amendment No. 10”) to its Amended Credit ~~Agreement”~~Agreement. Pursuant to Amendment No. 10, SEA increased the revolving credit commitments available under the Amended Credit Agreement from $210.0 million to an aggregate of $332.5 million. On April 19, 2020, SEA entered into another amendment, Amendment No. 11, (the “Amendment No. 11”). to its Amended Credit Agreement to amend certain provisions therein. On July 29, 2020, SEA entered into another amendment, Amendment No. 12, (the “Amendment No. 12”) to its Amended Credit Agreement to further amend certain provisions therein. See further discussion in the Restrictive Covenants section which follows.

As of ~~September~~June 30, ~~2019,~~2020, the Senior Secured Credit Facilities consisted of ~~$1.512~~$1.5 billion in Term B-5 Loans which will mature on March 31, 2024 and a ~~$210.0~~$332.5 million revolving credit facility (the “Revolving Credit Facility”), of which ~~$50.0 million was outstanding as of September 30, 2019.~~will mature on October 31, 2023. The

outstanding balance on the Revolving Credit Facility as of June 30, 2020 was included in long-term debt, net, and as of December 31,

2019 was included in current maturities of long-term debt, in the accompanying unaudited condensed consolidated balance sheets ~~as of September 30, 2019 and December 31, 2018~~ due to the Company’s intent at that time to repay the ~~borrowings within the following twelve month period.~~borrowings.

The Term B-5 Loans amortize in equal quarterly installments in an aggregate annual amount equal to 1.015% of the original principal amount of the Term B-5 Loans outstanding on the ~~Effective Date,~~effective date of October 31, 2018, with the balance payable on the final maturity date. SEA may voluntarily repay amounts outstanding under the Senior Secured Credit Facilities at any time without premium or penalty, other than customary “breakage” costs with respect to LIBOR loans. SEA is also required to prepay the outstanding Term B-5 Loans, subject to certain exceptions, under certain circumstances, as defined in the Senior Secured Credit Facilities.

As of ~~September~~June 30, ~~2019,~~2020, SEA had approximately ~~$20.4~~$21.2 million of outstanding letters of credit and ~~$50.0~~$311.0 million outstanding on its Revolving Credit Facility leaving ~~approximately $139.6 million~~0 remaining amount available for ~~borrowing. Subsequent to September 30, 2019, SEA repaid $10.0 million on~~borrowing under the Revolving Credit Facility.

On April 30, 2020, SEA closed on a private offering of $227.5 million aggregate principal amount of 8.750% first-priority senior secured notes due 2025 (the “Senior Notes”). Net of expenses related to the offering of the Senior Notes and the Amendment No. 11 to the Credit Agreement, the Company expects to use the proceeds from the issuance of the Senior Notes for working capital and other general corporate purposes.

In connection with the issuance of the Senior Notes and as a result of Amendment No. 10 and Amendment No. 11, SEA recorded a discount and fees of $7.5 million and $7.8 million during the three and six months ended June 30, 2020, respectively.

The Senior Notes mature on May 1, 2025 and have interest payment dates of May 1 and November 1 with the first interest payment due on November 1, 2020. On or after May 1, 2022, SEA may redeem the Senior 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 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 Senior 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 Senior Notes with amounts equal to the net cash proceeds of certain equity offerings at a redemption price of 108.375%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The Senior 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 the SEA, and subject to certain exceptions, each of SEA’s subsidiaries that guarantees the SEA’s existing senior secured credit facilities.

On August 5, 2020, SEA closed on a private offering of $500.0 million aggregate principal amount of 9.500% second-priority senior secured notes due 2025 (the “Second-Priority Senior Notes”). Net of expenses related to the offering of the Second-Priority Senior Notes and Amendment No. 12 to the Credit Agreement, the Company intends to use the proceeds from the issuance of the Second-Priority Senior Notes to repay outstanding borrowings under the Revolving Credit Facility and for working capital and other general corporate purposes.

The Second-Priority Senior Notes mature on August 1, 2025 and have interest payment dates of February 1 and August 1 with the first interest payment due on February 1, 2021. On or after February 1, 2022, SEA may redeem the Second-Priority Senior 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 redemption date, if redeemed during the 12-month period commencing on February 1 of the years as follows: (i) in 2022 at 104.75%; (ii) in 2023 at 102.375%; 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 Second-Priority Senior 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 Second-Priority Senior Notes with amounts equal to the net cash proceeds of certain equity offerings at a redemption price of 109.50%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

At any time prior to February 1, 2022, SEA may, (i) during the twelve month period commencing on the issue date and (ii) during the period subsequent to such twelve month period and prior to February 1, 2022, redeem in each period up to 10.0% of the initial aggregate principal amount of the Second-Priority Senior Notes at a redemption price equal to 103% of the aggregate principal amount of the Second-Priority Senior Notes to be redeemed plus accrued and unpaid interest, if any, to but excluding the redemption date; provided, that if SEA does not redeem 10.0% of the initial aggregate principal amount of Second-Priority Senior Notes during the twelve month period commencing on the issue date, SEA may, in the subsequent period prior to February 1, 2022, redeem the Second-Priority Senior Notes in an amount that does not exceed 10.0% of the initial aggregate principal amount plus the difference between (x) 10.0% of the initial aggregate principal amount and (y) the aggregate principal amount of Second-Priority Senior Notes that were redeemed in such twelve month period.

The Second-Priority Senior 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 the SEA, and subject to certain exceptions, each of SEA’s subsidiaries that guarantees the SEA’s existing senior secured credit facilities.

The Senior Secured Credit Facilities contain a number of customary negative covenants. Such covenants, among other things, restrict, subject to certain exceptions, the ability of SEA and its restricted subsidiaries to incur additional indebtedness; make guarantees; create liens on assets; enter into sale and leaseback transactions; engage in mergers or consolidations; sell assets; make fundamental changes; pay dividends and distributions or repurchase SEA’s capital stock; make investments, loans and advances, including acquisitions; engage in certain transactions with affiliates; make changes in the nature of the business; and make prepayments of junior debt. All of the net assets of SEA and its consolidated subsidiaries are restricted and there are no unconsolidated subsidiaries of SEA.

The ~~Amended Credit Agreement removed all previous financial covenants on the Term B-5 Loans. The~~ Revolving Credit Facility requires that ~~SEA~~the Company comply with a springing maximum first lien secured leverage ratio of 6.25x to be tested as of the last day of any fiscal quarter, solely to the extent that on such date the aggregate amount of funded loans and letters of credit (excluding undrawn letters of credit in an amount not to exceed $30.0 million and cash collateralized letters of credit) under the Revolving Credit Facility exceeds an amount equal to 35% of the then outstanding commitments under the Revolving Credit Facility.

AsPursuant to Amendment No. 12, among other terms, SEA will be exempt from complying with its first lien secured leverage ratio covenant through the end of 2021, after which SEA will be required to comply with such covenant starting in the first quarter of 2022. For purposes of calculating compliance with such covenant, unless a Triggering Event occurs (as defined in Amendment No. 12), beginning with the first quarter of 2022, to the extent trailing Adjusted EBITDA (as defined in Amendment No. 12) for the second, third or fourth quarters of 2021 would have otherwise been included in the calculation of such covenant, in lieu of using actual Adjusted EBITDA for such periods, Adjusted EBITDA for such applicable periods will be deemed to be actual Adjusted EBITDA (as defined in Amendment No. 12) for the corresponding quarter of 2019. In addition, SEA will be required to comply with a quarterly minimum liquidity test (defined as unrestricted cash and cash equivalents and available commitments under the Revolving Credit Facility) of not less than $75.0 million until the earlier of September 30, ~~2019,~~2022 or the date on which the Company elects to use the actual Adjusted EBITDA for purposes of calculating its financial maintenance covenant. SEA ~~was in compliance with all covenants contained in the documents governing the Senior Secured Credit Facilities.~~

~~The Senior Secured Credit Facilities permit~~will also be restricted from paying certain dividends or making other restricted payments ~~in an aggregate amount per annum equal to~~through the ~~sum~~third quarter of (A) $25.0 million plus (B) an amount, if any, equal to (1) if the total net leverage ratio on a pro forma basis after giving effect to the payment of any such restricted payment, is no greater than 3.50 to 1.00, an unlimited amount, (2) if the total net leverage ratio on a pro forma basis after giving effect to the payment of any such restricted payment is no greater than 4.00 to 1.00 and greater than 3.50 to 1.00, the greater of (a) $95.0 million and (b) 7.50% of Market Capitalization (as defined in the Senior Secured Credit Facilities), (3) if the total net leverage ratio on a pro forma basis after giving effect to the payment of any such restricted payment is no greater than 4.50 to 1.00 and greater than 4.00 to 1.00, $95.0 million and (4) if the total net leverage ratio on a pro forma basis after giving effect to the payment of any such restricted payment is no greater than 5.00 to 1.00 and greater than 4.50 to 1.00, $65.0 million.

~~As of September 30, 2019, the total net leverage ratio as calculated under the Senior Secured Credit Facilities was~~ ~~3.34~~ to 1.00. The available capacity for restricted payments is recalculated at the beginning of each quarter, or upon declaration of a restricted payment as set forth in the credit agreement. During the nine months ended September 30, 2019, the Company used approximately $150.0 million of its available restricted payments capacity for a share repurchase (see Note 10–Related-Party Transactions and Note 13–Stockholders’ Equity for further details).2022 unless certain conditions are met.

Long-term debt at ~~September~~June 30, ~~2019~~2020 is repayable as follows and does not include the impact of any future voluntary ~~prepayments. The outstanding balance under~~prepayments or the ~~Revolving Credit Facility is included below based on~~impact of the ~~Company’s intent to repay the borrowings.~~Second-Priority Senior Notes:

Years Ending December 31:	(In thousands)		(In thousands)
Remainder of 2019	$	13,878
2020		55,505
Remainder of 2020			$	7,753
2021		15,505		15,505
2022		15,505		15,505
2023		15,505		326,505
2024				1,445,863
Thereafter		1,445,862		227,500
Total	$	1,561,760	$	2,038,631

~~As of September 30, 2019, the~~The Company ~~has~~previously had 5 interest rate swap agreements (the “Interest Rate Swap Agreements”) which effectively ~~fix~~fixed the interest rate on the LIBOR-indexed interest payments associated with $1.0 billion of SEA’s outstanding long-term debt. The Interest Rate Swap Agreements ~~became effective on September 30, 2016; have a total notional amount of $1.0 billion; mature~~expired on May 14, 2020; require the Company to pay a weighted-average fixed rate of 2.45% per annum; provide that the Company receives a variable rate of interest based upon the greater of 0.75% or the BBA LIBOR; and have interest settlement dates occurring on the last day of September, December, March and June through maturity.2020.

SEA designated the Interest Rate Swap Agreements above as qualifying cash flow hedge accounting relationships as further discussed in Note 8–7–Derivative Instruments and Hedging ~~Activities.~~Activities which follows.

Cash paid for interest relating to the Senior Secured Credit Facilities and the Interest Rate Swap Agreements, net of amounts capitalized, as applicable, was ~~$61.2~~$36.5 million and ~~$61.8~~$39.8 million in the ~~nine~~six months ended ~~September~~June 30, 2020 and 2019, ~~and 2018,~~ respectively. Cash paid for interest in the nine months ended September 30, 2018 includes $5.1 million relating to the Company’s fourth quarter 2017 interest payable on its Senior Secured Credit Facilities which was paid on January 5, 2018.

~~The Company adopted ASC 842,~~ ~~Leases~~, as of January 1, 2019 using the modified retrospective approach and elected the “Comparatives Under 840 Option” allowing the Company to not recast comparative periods in the period of adoption but present those periods under historical requirements of ASC 840. The Company has land, warehouse and office space, and equipment leases which are classified as either operating or financing obligations.

~~Under the provisions of ASC 842, right of use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.~~ ~~Lease terms may include options to renew when it is reasonably certain that the Company will exercise that option.~~ ~~Lease expense for lease payments is recognized on a straight-line basis over the term of the operating lease.~~

The present value of future minimum lease payments is calculated using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate, which reflects the rate of interest the Company would pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. As most of the Company’s leases do not provide an implicit rate, the Company uses incremental borrowing rates based on the information available at commencement date in determining the present value of the lease payments. In calculating the incremental borrowing rates, the Company considered recent ratings from credit agencies, recent trading prices on the Company’s debt, and current lease demographic information. The Company used the incremental borrowing rates on December 31, 2018 for newly recognized operating leases that commenced prior to that date. The Company applies the incremental borrowing rates at a portfolio level based on lease terms.

The Company has elected not to recognize on the balance sheet leases with an initial and expected term of 12 months or less, instead lease expense is recognized for these short-term leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed upon adoption of ASC 842, the Company has elected to combine lease and non-lease components for each class of underlying asset based on a practical expedient permitted under ASC 842.

Some of the Company’s leases include one or more options to renew, with renewal terms that can extend the lease term from one to 10 years or more. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or a purchase option reasonably certain of exercise.

Certain of the Company’s lease agreements include rental payments based on a percentage of sales over contractual levels and others include rental payments adjusted periodically for inflation. These variable lease payments are typically recognized when the underlying event occurs and are included in operating expenses in the ~~Company’s~~ unaudited condensed consolidated statements of comprehensive income in the same line item as the expense arising from fixed lease payments. The Company’s lease agreements do not contain any material residual value guarantees, material restrictive covenants or material variable lease costs other than those described below related to the Company’s land lease.

The Company has a land lease which consists of a long-term lease with the City of San Diego covering approximately 190 acres, including approximately 17 acres of water in Mission Bay Park, California (the “Premises”). Under the terms of the lease, the Premises must be used as a marine park facility and related uses. In addition, the Company may not operate another marine park facility within a radius of 560 miles from the City of San Diego. The annual rent under the lease is variable and calculated on the basis of a specified percentage of the Company’s gross income from the Premises, or the minimum yearly rent, whichever is greater. The current lease term for the Premises ends in June 2048 with a corresponding lease liability being amortized using an estimated incremental borrowing rate of 8.2%. The minimum yearly rent is adjusted every three years to an amount equal to 80% of the average accounting year rent actually paid for the three previous years. The current minimum yearly rent is approximately $10.4 million, which is subject to adjustment on January 1, 2020. Actual payments may vary from the annual straight-line minimum base rent based on shift of seasonal performance results. Rent payments related to the Premises for the three and nine months ended September 30, 2019 were approximately $3.9 million and $8.6 million, respectively. Upon adoption of ASC 842, the Company also reclassified a favorable lease asset net balance of approximately $14.0 million related to the Premises from other intangible assets, net, to right of use assets-operating in the accompanying unaudited condensed consolidated balance sheet as of September 30, 2019.

~~The tables below present the lease balances and their classification in the accompanying unaudited condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018:~~

The table below presents the lease costs and their classification in the accompanying unaudited condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2019:

In addition to the operating lease costs above, short term rent expense for the three and nine months ended September 30, 2019 was approximately $1.1 million and $3.0 million, respectively, and is included in operating expenses and selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of comprehensive income.

~~The table below presents the Company’s lease maturities as of September 30, 2019:~~

~~Operating lease payments include approximately $7.2 million related to options to extend lease terms that are reasonably certain of being exercised.~~

~~The table below presents the future minimum lease payments for long-term non-cancellable operating and financing leases under ASC 840 as of December 31, 2018:~~

~~The table below presents the weighted average remaining lease terms and applicable discount rates as of September 30, 2019:~~

~~The table below presents the cash flows and supplemental information associated with the Company’s leasing activities for the nine months ended September 30, 2019:~~

All long-lived assets, including right of use assets associated with leases, are reviewed for impairment upon the occurrence of events or changes in circumstances that would indicate that the carrying value of the assets may not be recoverable. The measurement of an impairment loss to be recognized is based upon the difference between the estimated fair value and the carrying amounts of the assets. Fair value is generally determined based upon a discounted cash flow analysis.

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk primarily by managing the amount, sources and duration of its debt funding and at times through the use of derivative financial instruments. Specifically, the Company ~~enters~~has previously entered into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments ~~are~~were used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings. The Company does not speculate using derivative instruments.

During the three months ended June 30, 2020, the Company’s Interest Rate Swap Agreements expired, as such, the Company did 0t have any derivative instruments outstanding as of June 30, 2020. As of ~~September 30, 2019 and~~ December 31, ~~2018,~~2019, the Company did 0t have any derivatives outstanding that were not designated in hedge accounting relationships.

The Company’s objectives in using interest rate derivatives ~~are~~were to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily ~~uses~~used interest rate swaps at times as part of its interest rate risk management strategy. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018,~~2019, such derivatives were used to hedge a portion of the variable cash flows associated with existing variable-rate debt.

The Interest Rate Swap Agreements ~~are~~were designated as cash flow hedges of interest rate risk. The changes in the fair value of derivatives designated and that qualify as cash flow hedges ~~are~~were recorded in accumulated other comprehensive (loss) income and ~~are~~were subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive (loss) income related to derivatives ~~will be~~were reclassified to interest expense as interest payments ~~are~~were made on the Company’s variable-rate debt. ~~During the next 12 months, the Company estimates that an additional $3.1 million will be reclassified as an increase to interest expense.~~

Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet

The Company did not have any derivative financial instruments outstanding as of June 30, 2020. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the unaudited condensed consolidated balance ~~sheets~~sheet as of ~~September 30, 2019 and~~ December 31, ~~2018:~~2019:

Liability Derivatives

Asset Derivatives

Liability Derivatives

As of September 30, 2019

As of December 31, 2018

As of December 31, 2019

Balance Sheet

Location

Fair Value

Balance Sheet

Location

Fair Value

Balance Sheet

Location

Fair Value

Derivatives designated as hedging instruments:

(In thousands)

Interest rate swap agreements

Other liabilities

3,109

Other assets

3,109

Other liabilities

2,156

Tabular Disclosure of the Effect of Derivative Instruments on the Statements of Comprehensive (Loss) Income

The table below presents the pretax effect of the Company’s derivative financial instruments on the unaudited condensed consolidated statements of comprehensive (loss) income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018:~~2019:

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. As of September 30, 2019, the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $3.2 million. As of September 30, 2019, the Company has posted 0 collateral related to these agreements. If the Company had breached any of these provisions at September 30, 2019, it could have been required to settle its obligations under the agreements at their termination value of $3.2 million.

The following table reflects the changes in accumulated other comprehensive (loss) income, net of tax for the ~~nine~~six months ended ~~September~~June 30, ~~2019:~~2020:

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 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, the Term B-5 Loans are classified in Level 2 of the fair value hierarchy as of June 30, 2020 and December 31, 2019 and the Senior Secured Notes are classified in Level 1 of the fair value hierarchy as of June 30, 2020. The fair value of the Term B-5 Loans approximate 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 Senior Secured Notes was determined using quoted prices in active markets for identical instruments.

As of December 31, 2019, the Company ~~has~~ determined that the majority of the inputs used to value its derivative financial instruments using the income approach ~~fall~~fell within Level 2 of the fair value hierarchy. The Company ~~uses~~used readily available market data to value its derivatives, such as interest rate curves and discount factors. ASC 820, Fair Value Measurement, also requires consideration of credit risk in the valuation. The Company ~~uses~~used a potential future exposure model to estimate this credit valuation adjustment (“CVA”). The inputs to the CVA are largely based on observable market data, with the exception of certain assumptions regarding credit worthiness which make the CVA a Level 3 input. Based on the magnitude of the CVA, it iswas not considered a significant input and the derivatives ~~are~~were classified as Level 2. ~~Of the Company’s long-term obligations, the Term B-5 Loans are classified in Level 2 of the fair value hierarchy~~The Company did 0t have any derivative financial instruments outstanding as of ~~September~~June 30, 2019 and December 31, 2018. The fair value of the term loans as of September 30, 2019 and December 31, 2018 approximate 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.2020.

~~There were 0 transfers between Levels 1, 2 or 3 during the three and nine months ended September 30, 2019.~~ The Company did 0t have any assets measured on a recurring basis at fair value as of ~~September~~June 30, 2020. 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, 2020:

The Company did 0t have any assets measured on a recurring basis at fair value as of December 31, 2019. The following table presents the Company’s estimated fair value measurements and related classifications for liabilities measured on a recurring basis as of ~~September 30,~~December 31, 2019:

	Quoted Prices in								Quoted Prices in
	Active Markets		Significant						Active Markets		Significant
	for Identical		Other		Significant				for Identical		Other		Significant
	Assets and		Observable		Unobservable		Balance at		Assets and		Observable		Unobservable		Balance at
	Liabilities		Inputs		Inputs		September 30,		Liabilities		Inputs		Inputs		December 31,
	(Level 1)		(Level 2)		(Level 3)		2019		(Level 1)		(Level 2)		(Level 3)		2019
Liabilities:	(In thousands)								(In thousands)
Derivative financial instruments ^(a)	$	—	$	3,109	$	—	$	3,109	$	—	$	2,156	$	—	$	2,156
Long-term obligations ^(b)	$	—	$	1,561,760	$	—	$	1,561,760	$	—	$	1,557,883	$	—	$	1,557,883

There were 0 transfers between Levels 1, 2 or 3 during the year ended December 31, 2018. The following table presents the Company’s estimated fair value measurements and related classifications for assets and liabilities measured on a recurring basis as of December 31, 2018:

OnIn March ~~24,~~ 2017, the Company entered into the ZHG Agreements with Zhonghong Holding, an affiliate of ~~ZHG~~Zhonghong Zhuoye Group Co., Ltd., who at the time owned approximately 21% of the outstanding shares of the Company. In April 2019, the Company terminated the ZHG Agreements for non-payment of undisputed amounts owed. See Note 1–Description of Business and Basis of Presentation for further details including amounts recorded as revenue in the six months ended June 30, 2019 related to the ZHG Agreements.

As previously disclosed, Sun Wise (UK), Co., Ltd, an affiliate to the ZHG Group (“Sun Wise”), previously held beneficial ownership of 19,452,063 shares (the “Pledged Shares”) of the Company’s common ~~stock.~~stock, which Sun Wise had pledged ~~such shares~~ in connection with certain loan obligations of Sun Wise. Sun Wise subsequently defaulted on such loan obligations and, as a result, ~~PA Eminent Opportunity VI Limited (a controlled affiliate~~certain of ~~PAG (f/k/a Pacific Alliance Group)) and China Huarong International Holdings Limited~~its lenders (together, the “Lenders”) foreclosed on the Pledged ~~Shares and, accordingly, the~~Shares. The Pledged Shares were transferred to ~~Lord Central Opportunity V Limited, (the “Security Agent”), as~~a security agent for the Lenders (the “Security Agent”), on May 3, 2019.

On May 27, 2019, the Security Agent entered into a share repurchase agreement with the Company pursuant to which the Security Agent agreed to sell and the Company agreed to purchase 5,615,874 of the Pledged Shares held by the Security Agent at a price per share equal to $26.71 (the “SEAS Repurchase”) for a total cost of approximately $150.0 million. The SEAS Repurchase closed on May 30, 2019.

On Also on May 27, 2019, the Security Agent ~~also~~ entered into a stock purchase agreement with Hill Path Capital LP (“Hill Path”) and certain of its affiliates pursuant to which the Security Agent agreed to sell and certain affiliates of Hill Path agreed to purchase, in the aggregate, 13,214,000 of the Pledged Shares held by the Security Agent at a price per share equal to $26.71 (the “HP Purchase”). The ~~purchase~~HP Purchase closed on May 30, 2019, at which time, Hill Path’s ownership percentage increased to 34.6%.

Also on May 27, 2019, in connection with the HP Purchase, the Company concurrently entered into a stockholders agreement, a registration rights agreement and an undertaking agreement with Hill Path (the “HP Agreements”). Under the HP Agreements, the Company agreed to appoint up to 3 Hill Path director designees to its Board of Directors and Hill Path agreed to certain customary standstill obligations, restrictions regarding the manner of sale of shares, and equal treatment for any change in control transaction. In addition, Hill Path agreed that shares held in excess of 24.9% generally would be voted consistent with the Board’s recommendations or consistent with the shares voted by the Company’s other stockholders. The Company also agreed to reimburse Hill Path for up to $250,000 of their expenses in connection with the HP Agreements. During the ~~nine~~three months ended ~~September~~June 30, 2019, the Company reimbursed Hill Path for $250,000 in expenses incurred.

~~On September 9, 2014,~~The Company has received final court approval of settlement of a purported stockholder class action lawsuit consisting of purchasers of the Company’s common stock during the periods between April 18, 2013 to August 13, 2014, captioned Baker v. SeaWorld Entertainment, Inc., et al., Case No. 14-CV-02129-MMA (KSC)~~, was filed in the U.S. District Court for the Southern District of California against~~. The settlement required the Company ~~the Chairman~~to pay $65.0 million for claims alleging violations of Sections 10(b) and 20(a) of the ~~Company’s Board, certain~~Securities Exchange Act of ~~its executive officers~~1934, as well as the costs of administration and ~~Blackstone. On February 27, 2015, Court-appointed Lead Plaintiffs, Pensionskassen For Børne- Og Ungdomspædagoger~~legal fees and Arkansas Public Employees Retirement System, together with additional plaintiffs, Oklahoma City Employee Retirement System and Pembroke Pines Firefighters and Police Officers Pension Fund (collectively, “Plaintiffs”), filedexpenses. The settlement does not include or constitute an ~~amended complaint against~~admission, concession, or finding of any fault, liability, or wrongdoing by the Company or any defendant. During the Chairman of the Company’s Board, certain of its directors, certain of its executive officers, Blackstone, and underwriters of the initial public offering and secondary public offerings. The amended complaint alleges, among other things, that the prospectus and registration statements filed contained materially false and misleading information in violation of the federal securities laws and seeks unspecified compensatory damages and other relief. Plaintiffs contend that defendants knew or were reckless in not knowing that Blackfish was impacting SeaWorld’s business at the time of each public statement. On May 29, 2015,year ended December 31, 2019, the Company ~~and the other defendants filed motions~~recorded $32.1 million of legal settlement charges, net of insurance recoveries, related to dismiss the amended complaint. On March 31, 2016, the Court granted the motions to dismiss the amended complaint, in its entirety, without prejudice. On May 31, 2016, Plaintiffs filed a second amended consolidated class action complaint (“Second Amended Complaint”), which, among other things, no longer names the Company’s Board or underwriters as defendants and no longer brings claims based on the prospectuses and registration statements. On September 30, 2016, the Court denied the renewed motion to dismiss the Second Amended Complaint.

On May 19, 2017, Plaintiffs filed a motion for class certification, which the Court granted on November 29, 2017. On December 13, 2017, Defendants filed a petition for permission to appeal the Court’s class certification order with the United States Court of Appeals for the Ninth Circuit,this case, which was ~~denied on~~paid during the six months ended June 28, 2018. Discovery is now complete and, on April 15, 2019, Defendants filed a motion for summary judgment. Also on April 15, 2019, Defendants filed motions to exclude each of Plaintiffs’ three expert witnesses and Plaintiffs filed motions to exclude two of Defendants’ expert witnesses. On November 6, 2019 the Court issued a ruling on the Defendant’s motion for summary judgment and the parties’ motions to exclude, denying most of the motions, including that for summary judgment. The trial has been scheduled to begin on February 18,30, 2020. ~~The Company believes that the lawsuit is without merit and intends to defend the lawsuit vigorously; however, there can be no assurance regarding the ultimate outcome of this lawsuit.~~

On June 14, 2018, a lawsuit captioned Highfields Capital I LP et al v. SeaWorld Entertainment, Inc. et al, Case No. 3:18-cv-01276-L-BLM, was filed in the United States District Court in the Southern District of California against the Company and certain of the Company’s former and present executive officers (collectively, the “Defendants”). The plaintiffs, which are investment funds managed by a common adviser (collectively, the “Plaintiffs”) allege, among other things, that the Defendants made false and misleading statements in violation of the federal securities laws and Florida common law, regarding the impact of the ~~documentary~~ film Blackfish on SeaWorld’s business. The complaint further alleges that such statements were made to induce Plaintiffs to purchase common stock of the Company at artificially-inflated prices and that Plaintiffs suffered investment losses as a result. The Plaintiffs are seeking unspecified compensatory damages and other relief. On October 19, 2018, Defendants moved for partial dismissal of the complaint. On February 7, 2019, the Court granted Defendants’ motion and dismissed Plaintiffs’ Florida state law claims as well as federal securities law claims based on the Company’s second quarter 2013 earnings statements. On May 1, 2019, Defendants filed their answer to Plaintiffs’ complaint. On July 1, 2019, the parties filed a joint motion for a stay of all proceedings in the case pending the resolution of the motion for summary judgment filed by Defendants in the related securities class action captioned Baker v. SeaWorld Entertainment, Inc., et al. described above. The Company believes that the lawsuit is without merit and intends to defend the lawsuit vigorously; however, there can be no assurance regarding the ultimate outcome of this lawsuit. While there can be no assurance regarding the ultimate outcome of this lawsuit, the Company believes that any potential loss would not be material.

~~On December 8, 2014,~~The Company has received final court approval of a settlement of a putative derivative lawsuit captioned Kistenmacher v. Atchison, et al., Civil Action No. 10437 that was filed in the Court of Chancery of the State of Delaware against, among others, the then Chairman of the Company’s Board, certain of the Company’s executive officers, directors and shareholders, and Blackstone. The Company iswas a “Nominal Defendant” in the lawsuit.

~~On March~~ Pursuant to the settlement, the Company received $12.5 million of insurance proceeds from its insurers and will adopt certain corporate governance modifications. During the six months ended June 30, ~~2015,~~2020, the ~~plaintiff filed an amended complaint against the same set~~Company recorded a legal settlement gain of ~~defendants. The amended complaint alleges, among other things, that the defendants breached their fiduciary duties, aided~~$12.5 million related to insurance proceeds received in selling, general and ~~abetted breaches of fiduciary duties, violated Florida Blue Sky laws and were unjustly enriched by (i) including materially false and misleading information~~administrative expenses in the ~~prospectus and registration statements; and (ii) causing the Company to repurchase certain shares~~accompanying unaudited condensed consolidated statements of its common stock from certain shareholders at an alleged artificially inflated price. The Company does not maintain any direct exposure to loss in connection with this shareholder derivative lawsuit as the lawsuit does not assert any claims against the Company. The Company’s status as a “Nominal Defendant” in the action reflects the fact that the lawsuit is maintained by the named plaintiff on behalf of the Company and that the plaintiff seeks damages on the Company’s behalf. The case is currently stayed in favor of the securities class action captioned Baker v. SeaWorld Entertainment, Inc., et al. described above.comprehensive loss.

On April 13, 2015, a purported class action was filed in the Superior Court of the State of California for the City and County of San Francisco against SeaWorld Parks & Entertainment, Inc., captioned Marc Anderson, et. al., v. SeaWorld Parks & Entertainment, Inc. Civil Case No. 15-cv-02172-JSW, (the “Anderson Matter”). The putative class consisted of all consumers within California who, within the past four years, purchased tickets to SeaWorld San Diego. The complaint (as amended) alleges causes of action under the California False Advertising Law, California Unfair Competition Law and California CLRA. Plaintiffs’ claims are based on their allegations that the Company misrepresented the physical living conditions and care and treatment of its orcas, resulting in confusion or misunderstanding among ticket and orca plush purchasers with intent to deceive and mislead the plaintiffs and purported class members. The complaint seeks restitution, equitable relief, attorneys’ fees and costs. Based on plaintiffs’ definition of the class, the amount in controversy could have exceeded $5.0 million assuming the class became certified. The liability exposure is speculative though. On May 14, 2015, the Company removed the case to the United States District Court for the Northern District of California.

~~The Company filed a motion for summary judgment on October 30, 2017 which the Court granted in part and denied in part.~~ On May 23, 2018, the plaintiffs represented to the Court that they ~~will~~would not ~~file~~be filing a motion for class certification. The case is no longer a class action. ~~All three named~~It continues to be prosecuted by certain plaintiffs ~~continue to have claims~~ for individual restitution in a nominal amount and injunctive relief. The Court bifurcated the trial of the case into two phases: the Plaintiffs’ standing to sue and the merits of their claims. The standing trial is scheduled for March 9, 2020, after which the Court will determine if there needs to be a trial on the merits which currently is scheduled for April 27, 2020.

Pre-trial motions and mediation proceedings are continuing. The Company believes that the lawsuit is without merit and intends to defend the lawsuit vigorously; however, there can be no assurance regarding the ultimate outcome of this lawsuit.

~~On December 3, 2014, a purported class action lawsuit was filed~~The Court bifurcated the trial of the case into two phases: the plaintiffs’ standing to sue and the merits of their claims. Before the first phase of the trial, plaintiff Anderson dismissed all claims against the Company. The standing trial with regard to the remaining plaintiffs took place in March of 2020. The Court took the ~~United States District~~matter under advisement and has not yet ruled. The Court has vacated the dates for the ~~Middle District~~trial on the merits which was previously scheduled for April 27, 2020. If the Court rules that the remaining plaintiffs have no standing to sue, judgment will be entered in favor of ~~Florida, Tampa Division against SeaWorld Parks & Entertainment, Inc.~~ the Company. If the Court rules they have standing, the case will proceed with the second phase of the trial.

The ~~case, captioned Jason Herman, Joey Kratt,~~Company believes that the lawsuit is without merit and ~~Christina Lancaster, as individuals and on behalf~~intends to defend the lawsuit vigorously. While there can be no assurance regarding the ultimate outcome of all others similarly situated, v. SeaWorld Parks & Entertainment, Inc. Case No. 8:14-cv-03028-MSS-JSS, was certified as a class action in 2018. The Court certified a class action on two claims for relief -- breach of contract and violation of federal Electronic Funds Transfer Act, 15 U.S.C. section 1693 et seq. on behalf of three individual plaintiffs and two classes: (i) individuals in the states of Florida, Texas, Virginia and California who paid for an annual pass through EZ pay in “less than twelve months,” had their passes automatically renewed and did not use the renewed passes after the first year or were not issued a full refund of payments made after the twelfth payment; and (ii) all of these same individuals who used debit cards.

~~In April 2018,~~this lawsuit, the Company reached a preliminary agreement in principle to settle this matter for a payment of $11.5 million into a common fund, plus certain administrative costs and expenses associated with the proposed settlement. At a fairness hearing held April 18, 2019, the Court approved the settlement. On April 29, 2019, the Court entered an order approving the final settlement. The Company has funded the $11.5 million settlement and is working with a class action administrator to facilitate the settlement in accordance with the terms of the settlement agreement.believes any such potential loss would not be material.

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”).

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.~~flows

~~On May 16, 2017, SEA entered into~~Pursuant to a license agreement (“License ~~Agreement (the “License~~ Agreement”) with Sesame Workshop, ~~(“Sesame”),~~the Company pays a ~~New York not-for-profit corporation. SEA’s~~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: (i)~~include, among other items, the opening of a ~~new Sesame Place theme~~second standalone park (“Standalone Park”) no later than mid-2021 ~~in a location to be determined; (ii) building a new Sesame Land in SeaWorld Orlando by fall 2022; (iii) investing in~~and minimum annual capital and marketing thresholds; and (iv) providing support for agreed upon sponsorship and charitable initiatives. As of September 30, 2019, the Company estimates the combined remaining obligations for these commitments could be up to approximately $55.0 million over the remaining term of the agreement.thresholds. After the opening of the second Standalone Park (counting the existing Sesame Place Standalone Park in Langhorne, Pennsylvania), SEA will have 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. ~~On March 27, 2019,~~As of June 30, 2020, the Company ~~opened a new Sesame Land in SeaWorld Orlando. On~~estimates the combined remaining obligations for these commitments could be up to approximately $45.0 million over the remaining term of the agreement. In October ~~21,~~ 2019, the Company announced that it will ~~open~~convert Aquatica San Diego into its second Sesame Place Standalone Park in ~~San Diego in~~the spring ~~2021. Sesame Place San Diego will be located on the site~~ of ~~the current Aquatica San Diego.~~2021. While construction ~~will begin~~began in the fall of 2019, it was temporarily paused due to the COVID-19 pandemic. The Company is currently evaluating when this park will open. Separately, due to the extended park closures in California, the Company has determined it will not ~~expected to impact~~reopen its Aquatica San ~~Diego’s operating schedule~~Diego park in 2020.

Pursuant to the License 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.

Anheuser-Busch, Incorporated 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.

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. ~~The Company has granted stock options, time-vesting restricted shares and units and performance-vesting restricted shares and units.~~

Equity compensation expense is included in operating expenses and in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of comprehensive (loss) income as follows:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2019		2018		2019		2018		2020		2019		2020			2019
	(In thousands)								(In thousands)
Equity compensation expense included in operating expenses	$	654	$	2,119	$	2,687	$	6,350	$	674	$	676	$	(1,077	)	$	2,033
Equity compensation expense included in selling, general and administrative expenses		508		3,064		5,757		12,270		2,646		3,408		796			5,249
Total equity compensation expense	$	1,162	$	5,183	$	8,444	$	18,620	$	3,320	$	4,084	$	(281	)	$	7,282

~~Equity~~The credit in equity compensation expense ~~included in selling, general and administrative expenses~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2020 primarily relates to certain performance vesting restricted units which are no longer considered probable of vesting and also includes ~~approximately $5.5 million~~the reversal of expense related to ~~certain~~outstanding unvested equity awards previously held by the Company’s former chief executive officer which were ~~accelerated to vest~~forfeited in connection with ~~the departure of certain executives as required by their respective employment agreements (see Note 14–Restructuring and Other Separation Costs~~his departure. See Long-term Incentive Performance Restricted Awards section which follows for further ~~details).~~

~~The activity related to the Company’s time-vesting and performance-vesting awards during the nine months ended September 30, 2019 is as follows:~~

~~The activity related to the Company’s stock option awards during the nine months ended September 30, 2019 is as follows:~~

The weighted average grant date fair value of stock options granted during the nine months ended September 30, 2019 was $8.62. Key weighted-average assumptions utilized in the Black-Scholes Option Pricing Model for stock options granted during the nine months ended September 30, 2019 were:

The Company has reserved ~~15,000,000~~15.0 million shares of common stock for issuance under ~~the~~its Omnibus Incentive Plan (the “Omnibus Incentive Plan”), of which approximately ~~8,750,000~~7.8 million shares are available for future issuance as of ~~September~~June 30, ~~2019.~~2020. The Company has outstanding time restricted awards, performance restricted awards and incentive stock options.

During the three months ended June 30, 2020, in connection with a review of compensation matters, the Compensation Committee of the Board of Directors (the “Board”), approved grants of approximately 1.2 million restricted stock units designed to recognize certain employees for their contributions and continued expected contributions to the Company and its long term goals during the global COVID-19 pandemic. The weighted-average grant date fair value of the restricted stock units was $11.07 per share. The restricted stock units will vest 50% on each of the first two anniversaries of the grant date, subject to the recipient’s continued employment on each such vesting date.

During the nine months ended September 30, 2019, the Company granted performance-vesting restricted units (the “Bonus Performance Restricted Units”) in accordance with its annual bonus plan for 2019 (the “2019 Bonus Plan”). The 2019 Bonus Plan provides for bonus awards payable 50% in cash and 50% in Bonus Performance Restricted Units and is based upon the Company’s achievement of specified performance goals, as defined by the 2019 Bonus Plan, with respect to the year ending December 31, 2019 (the “Fiscal 2019”). The total number of units eligible to vest into shares of stock is based on the level of achievement of the targets for Fiscal 2019 which ranges from 0% (if below threshold performance) up to 200% (at or above maximum performance).

The Company ~~also~~ had an annual bonus plan for the fiscal year ended December 31, ~~2018~~2019 (“Fiscal ~~2018”~~2019”), under which certain employees were eligible to vest in ~~Bonus~~performance vesting restricted units (the “Bonus Performance Restricted ~~Units~~Units”) based upon the Company’s achievement of certain performance goals with respect to Fiscal ~~2018.~~2019. Separately, certain equity awards granted in October 2019 (the “Supplemental Grant”) were also eligible to vest based on achievement of specific performance goals with respect to Fiscal 2019. Based on the Company’s actual Fiscal ~~2018~~2019 results, a portion of these Bonus Performance Restricted Units and the Supplemental Grant vested in the ~~nine~~six months ended ~~September~~June 30, ~~2019 and the remaining forfeited~~2020 in accordance with their terms.

During the ~~nine~~six months ended ~~September~~June 30, ~~2019, the Company granted long-term incentive plan awards for 2019 (the “2019 Long-Term Incentive Grant”) which were comprised of~~ nonqualified stock options (the “Long-Term Incentive Options”) and performance-vesting restricted units (the “Long-Term Incentive Performance Restricted Units”) (collectively, the “Long-Term Incentive Awards”). Long-Term Incentive Awards for 2019, 2020, ~~and 2021 combined were granted to certain employees during the nine months ended September 30, 2019.~~

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 using the straight line method.

The Long-Term Incentive Performance Restricted Units have a three-year performance period beginning on January 1, 2019 and ending on December 31, 2021 and vest based upon the Company’s achievement of specified performance goals for Fiscal 2021, as defined by the 2019 Long-Term Incentive Grant. 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 100% (for target or above performance). Upon achievement of the performance goals, only 50% of the award for a given level of performance will vest, with the remaining 50% subject to a one-year performance test period. The goal achieved must be met again or exceeded the next fiscal year before the remaining units are earned.

During the nine months ended September 30, 2019, the Company also granted time-restricted units which vest over three years to certain employees, with one-third vesting on each anniversary of the date of grant, subject to continued employment through the applicable vesting date. Equity compensation expense is recognized using the straight line method.

The Company also has outstanding long-term incentive time restricted shares, long-term incentive performance restricted shares and long-term incentive options granted under previous long-term incentive plan grants. During the nine months ended September 30, 2019, a portion of ~~the~~ previously granted long-term incentive performance restricted ~~shares~~awards related to completed performance periods ~~vested, with the remainder forfeiting in accordance with their terms.~~vested. The remaining outstanding long-term incentive performance restricted ~~shares~~awards related to future performance periods are eligible to vest based upon the Company’s achievement of pre-established performance goals for the respective performance period, as defined.

On February 25, 2020, the Board approved a modification (the “Modification”) to certain long-term incentive plan awards granted in 2019 (the “2019 LTIP Performance Awards”) in order to better align its terms with certain awards granted by the Company to its then CEO in November 2019 (the “CEO Performance Awards”). The Compensation Committee of the Board determined that it was preferable to align the 2019 LTIP Performance Awards with the CEO Performance Awards to put everyone on the same performance cycle with the same performance goals. Pursuant to the Modification, the threshold and target performance goals were revised to align with the CEO Performance Awards threshold and target performance goals and the performance period was extended through calendar year 2022 (or, the end of the 2023 calendar year, as applicable) consistent with the CEO Performance Awards. Equity compensation expense has not yet been recorded related to these awards. The Company will use the respective modification date fair value to record equity compensation expense related to the Modification awards when and if they become probable of vesting in a future period, in accordance with the guidance in ASC 718, Compensation-Stock Compensation.

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. Based on the Company’s progress towards its respective performance goals, a portion of its performance-vesting restricted awards ~~are~~were no longer considered probable of vesting as of ~~September~~June 30, ~~2019;~~2020; therefore, equity compensation expense ~~has been recorded~~was adjusted accordingly. If the probability of vesting related to these awards changes in a subsequent period, all equity compensation expense related to those awards that would have been recorded over the requisite service period had the awards been considered probable at the new percentage from inception, will be recorded as a cumulative catch-up ~~or adjustment~~ at such subsequent date.

On October 3, 2019, in connection with its regular review of compensation matters, the Compensation Committee of the Board of Directors, approved certain equity awards designed to recognize employees for their contribution and continued expected contribution to the Company and its goals. A portion of the awards were in the form of time-vesting restricted stock units that will vest 50% on each of the first two anniversaries of the grant date, subject to the recipient’s continued employment on each such vesting date. Performance-vesting restricted units were also granted which will be earned based on achievement of specific financial metrics.

As of ~~September~~June 30, ~~2019, 94,012,743~~2020, 94,408,378 shares of common stock were issued in the accompanying unaudited condensed consolidated balance sheet, which excludes ~~503,598~~119,985 unvested shares of common stock and ~~2,193,303~~3,095,459 unvested restricted stock units held by certain participants in the Company’s equity compensation plans (see Note ~~12–~~11–Equity-Based Compensation) and includes ~~15,790,463~~16,260,248 shares of treasury stock held by the Company.

The Board had previously authorized a share repurchase program of up to $250.0 million of the Company’s common stock (the “Share Repurchase Program”). Under the 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. Through December 31, 2018, the Company had repurchased an aggregate of $158.0 million under the Share Repurchase Program. On February 22, 2019, the Board approved a replenishment to the Share Repurchase Program bringing the total amount available for future purchases back up to $250.0 million.

During the ~~nine~~three months ended ~~September~~June 30, 2019, the Company completed a share repurchase of 5,615,874 shares (see discussion relating to the SEAS Repurchase in Note ~~10–~~9–Related Party Transactions for further details). On August 2, 2019, the Board approved a replenishment to the Share Repurchase Program of $150.0 million, bringing the total amount authorized for future share repurchases back up to $250.0 million. ~~There were 0~~

During the six months ended June 30, 2020, prior to the COVID-19 temporary park closures, the Company completed a share ~~repurchases~~repurchase of 469,785 shares for an aggregate total of approximately $12.4 million, leaving approximately $237.6 million available under the Share Repurchase Program ~~during~~as of June 30, 2020.In connection with Amendment No. 12 to the ~~three months ended September 30, 2019~~Company’s Amended Credit Agreement, the Company is restricted from paying any dividends or making restricted payments, including share repurchases, through the ~~three and nine months ended September 30, 2018.~~third quarter of 2022 unless certain conditions are met (see Note 6–Long-Term Debt).

The Share Repurchase Program has no time limit and may be suspended or discontinued completely at any time. The number of shares to be purchased and the timing of purchases will be based on the Company’s trading windows and available liquidity, general business and market conditions, and other factors, including legal requirements, debt covenant restrictions and alternative investment opportunities.

The Company is committed to continuous improvement and regularly evaluates operations to ensure it is properly organized for performance and efficiency. As a result, during the three and nine months ended September 30, 2019, the Company recorded approximately $1.2 million and $3.8 million, respectively, in pre-tax charges primarily consisting of severance and other termination benefits related to positions eliminated in 2019, which is included in restructuring and other separation costs in the accompanying unaudited condensed consolidated statements of comprehensive income.

In August 2018, the Company announced a restructuring program (the “2018 Restructuring Program”) focused on reducing costs, improving operating margins and streamlining its management structure to create efficiencies and better align with its strategic business objectives. The 2018 Restructuring Program involved the elimination of approximately 125 positions during the third quarter of 2018 across the Company’s theme parks and its corporate headquarters. As a result, during the nine months ended September 30, 2018, the Company recorded approximately $5.5 million in pre-tax restructuring charges primarily related to severance and other termination benefits, of which, $3.8 million was incurred during the three months ended September 30, 2018, which is included in restructuring and other separation costs in the accompanying unaudited condensed consolidated statements of comprehensive income. The Company will not incur any additional costs associated with the 2018 Restructuring Program in 2019 as all continuing service obligations were completed as of December 31, 2018.

~~Related activity for the nine months ended September 30, 2019 was as follows:~~

The remaining liability as of September 30, 2019 relates to restructuring and other related costs to be paid as contractually obligated by December 31, 2019 and is included in accrued salaries, wages and benefits in the accompanying unaudited condensed consolidated balance sheet.

~~For the nine months ended September 30, 2018, r~~estructuring and other separation costs also includes severance and other employment expenses for certain executives who separated from the Company during 2018. In particular, on February 27, 2018, the Company announced that its then President and Chief Executive Officer (the “Former CEO”) had stepped down from his position and resigned as a member of the Board. In connection with his departure, the Former CEO received a lump sum cash payment of approximately $6.7 million in severance-related benefits, in accordance with his employment agreement. Certain other executives who separated from the Company during 2018 also received severance-related benefits in accordance with the terms of their respective employment agreements or relevant company plan, as applicable. These severance expenses are included in restructuring and other separation costs in the accompanying unaudited condensed consolidated statements of comprehensive income for the three and nine months ended September 30, 2018.

Additionally, during the nine months ended September 30, 2018, certain equity awards were accelerated to vest in connection with the departure of specific executives as required by their respective employment agreements. As a result, the Company recorded incremental non-cash equity compensation expense during the nine months ended September 30, 2018 related to these awards, which is included in selling, general and administrative expenses ~~in the accompanying unaudited condensed consolidated statements of comprehensive income. See~~ ~~Note 12–Equity-Based Compensation for further details.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion contains management’s discussion and analysis of our financial condition and results of operations and should be read together with the 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, ~~2018.~~2019. 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, 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. Actual results may differ materially from those contained in any forward-looking statements. You should carefully read “Special Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q.

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 and Sea Rescue.~~Place. Over our more than ~~55-year~~60-year history, we have developed a diversified portfolio of 12 ~~highly~~ differentiated theme ~~parks and water~~ parks that are grouped in key markets across the United States. Many of our theme parks showcase our one-of-a-kind zoological collection and feature a diverse array of both thrill and ~~family~~family-friendly rides, ~~shows,~~ educational ~~demonstrations~~presentations, shows and/or other attractions with broad demographic appeal which deliver memorable experiences and a strong value proposition for our guests.

Since the global COVID-19 pandemic began we have taken proactive measures for the safety of our guests, employees and animals, to appropriately manage costs and expenditures, and to provide liquidity in response to COVID-19. See further discussion concerning the proactive measures we have taken 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.

In response to the global COVID-19 pandemic, and in compliance with government restrictions, we temporarily closed all of our theme parks, effective March 16, 2020. Beginning in June 2020, we began the phased reopening of some of our parks with capacity limitations, reduced hours of operation and/or reduced operating days. In particular, on June 6, our Aquatica park in Texas reopened; on June 11, all five of our Florida parks reopened; on June 19, our SeaWorld park in Texas reopened; on July 24, our Sesame Place park in Pennsylvania reopened; and on August 6, our Busch Gardens park in Virginia reopened. We continue to monitor guidance from, and engage with, federal, state and local authorities to determine when we can reopen in California. We do not currently plan to open our Aquatica water park in San Diego or our Water Country USA water park in Williamsburg this year.

We have implemented enhanced health and safety protocols for our open parks including capacity limitations, increased cleaning and sanitizing, physical distancing practices, face covering requirements and temperature screening of both guests and employees. Additionally, we have introduced an online reservation system to help manage capacity and we are managing the number of operating days by park to optimize cash flow. We also continue our focus on cost reduction initiatives and have identified and executed on additional cost efficiencies during the closure period which we are implementing as the parks reopen including optimizing labor through more efficient staffing.

Attendance since the parks reopened has been impacted by capacity limitations, fewer operating days per week versus the prior year, limited marketing spend and a limited events line-up. Despite the limitations, total attendance at reopened parks that have been opened for at least 30 days has increased 15% on a same park basis from the week ended June 28 (the first full week these parks were open) to the week ended August 2, 2020. We believe attendance trends compared to the prior year will strengthen as we begin to re-introduce special events, interactive experiences and other in-park offerings which were temporarily suspended. Additionally, we have significantly curtailed marketing spend during the initial reopening phase and we expect a measured ramp-up in marketing spend will also support further attendance growth.

For other factors concerning the global COVID-19 pandemic, see the “Risk Factors” section of our Annual Report on Form 10-K, 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.

Effective April 4, 2020, Sergio D. Rivera resigned from his position of Chief Executive Officer and as a member of our Board. As a result, the Board appointed Marc G. Swanson, our Chief Financial Officer and Treasurer, to serve as Interim Chief Executive Officer and Elizabeth C. Gulacsy, our Chief Accounting Officer, to serve as Interim Chief Financial Officer and Treasurer in addition to her role of Chief Accounting Officer. Also on April 4, 2020, the Board appointed Walter Bogumil to serve as Chief Operating Officer.Mr. Rivera was not entitled to any severance benefits in connection with his departure and forfeited his outstanding equity awards.

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 culinary, 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 orpasses (which generally expire after a 12 month term), season passes ~~(collectively~~(including our fun card products and, collectively with annual passes, referred to as ~~season passes)~~“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, 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 when the parks are open. During the period each park was temporarily closed due to the COVID-19 pandemic, which started on March 16, 2020, we did not recognize revenue from the closed park's admission products.

Total revenue per capita, defined as total revenue divided by total attendance, consists of admission per capita and in-park per capita spending:

See further discussion in the “Results of Operations” section which ~~follows.~~follows or 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 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.

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, ~~fluctuations in foreign exchange rates and global and regional economic conditions, travel patterns of both our domestic and international guests,~~ 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, ~~and~~the external perceptions of our brands and reputation, ~~among~~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. As a result of the COVID-19 pandemic, we believe the level of attendance in our theme parks could also be impacted by public concerns over the COVID-19 pandemic, the number of reported local cases of COVID-19, travel restrictions, federal, state and local regulations related to public places, limits on social gatherings and overall public safety sentiment. We continuously monitor factors ~~beyond~~impacting our ~~control.~~ attendance, making strategic marketing and sales adjustments as necessary.

Attendance patterns on a quarterly basis have historically had significant seasonality, driven by the timing of holidays, school vacations, calendar shifts in the number of weekend days in a quarter and weather conditions; in addition, seven of our theme parks are seasonal and only open for part of the year.

We believe attendance in recent years was impacted by a variety of factors at some of our parks, including the external perceptions of our brands and reputation, which have also impacted relationships with some of our business partners, including certain ticket resellers that have terminated relationships with us and other zoological-themed attractions. Given current results, we do not believe these factors have had a significant impact on our performance; however, we continuously monitor our external perceptions, making strategic marketing and sales adjustments, as necessary, to address these or any other items that could impact attendance.

~~For other factors affecting our attendance, see the “Risk Factors” section of our Annual Report on Form 10-K, 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.~~

~~The~~Historically, the principal costs of our operations are employee wages and benefits, advertising, maintenance, animal care, utilities 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, other inflationary pressures and attendance levels, among other factors.

~~We continue~~During the six months ended June 30, 2020, in connection with a previously disclosed legal settlement, we recorded a gain of $12.5 million which is included as a reduction to ~~focus~~selling, general and administrative expenses in the accompanying consolidated statements of comprehensive loss included elsewhere in this Quarterly Report on ~~reducing costs, improving operating margins~~Form 10-Q. See Note 10–Commitments and ~~streamlining~~Contingencies to our ~~management structure to create efficiencies to better align with our strategic business objectives.~~ unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

We remain committed to continuous improvement and regularly evaluate operations to ~~ensure~~evaluate that we are properly organized for performance and efficiency. As part of these ongoing efforts, during the ~~nine~~six months ended ~~September~~June 30, 2019, we recorded approximately ~~$3.8~~$2.6 million in pre-tax charges primarily consisting of severance and other termination benefits related to positions eliminated in 2019, which is included in ~~restructuring~~severance and other separation costs in the accompanying unaudited condensed consolidated statements of comprehensive (loss) incomeincluded elsewhere in this Quarterly Report on Form 10-Q. ~~For~~

As a result of the ~~nine~~park closures related to the COVID-19 pandemic, costs and expenses for the three and six months ended ~~September~~June 30, ~~2018, restructuring~~2020, are not necessarily indicative of costs and ~~other separation costs of $16.4 million also includes severance and other employment~~ expenses for ~~certain executives who separated from~~ the ~~Company during 2018.~~year ending December 31, 2020 or any future period. See ~~Note 14–Restructuring and Other Separation Costs to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q~~the “Impact of Global COVID-19 Pandemic” 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, 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.

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 seven of our theme parks are only open for a portion of the year. Approximately two-thirds of our attendance and revenues are typically generated in the second and third quarters of the year and we ~~typically~~generally incur a net loss in the first and fourth quarters. The percent mix of revenues by quarter ishas been 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 five theme parks which have historically been open year-round, attendance patterns have significant seasonality, driven by holidays, school vacations and weather conditions.

~~On October 21, 2019, we announced~~ Changes in school calendars that weimpact traditional summer vacation months could also impact attendance patterns. The COVID-19 pandemic has impacted the seasonality of our business for the first half of 2020 and it is difficult to estimate how the COVID-19 pandemic will ~~open our second Sesame Place standalone park in San Diego in spring 2021. Sesame Place San Diego will be located on~~impact seasonality for the ~~site~~rest of the current Aquatica San Diego. While construction will begin in the fall of 2019, it is not expected to impact Aquatica San Diego’s operating schedule in 2020. For more details, refer to Note 11–Commitments and Contingencies to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

In May 2019, we entered into a share repurchase agreement to purchase approximately 5.6 million of our common stock at a price per share equal to $26.71 (the “SEAS Repurchase”). Also on May 27, 2019, Hill Path Capital LP (“Hill Path”) and certain of its affiliates entered into a stock purchase agreement to purchase, in the aggregate, approximately 13.2 million shares of our common stock (the “HP Purchase”). The purchase closed on May 30, 2019, at which time, Hill Path’s ownership percentage increased to 34.6%.

For further details on these transactions, refer to Note 10–Related Party Transactions and Note 13–Stockholders’ Equity to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, and “~~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. Also see our Current Reports on Form 8-K, filed with the SEC on May 6, 2019, May 28, 2019 and May 30, 2019.

On November 7, 2019, we announced that our Board of Directors (the “Board”) appointed Sergio D. Rivera to serve as our Chief Executive Officer (“CEO”). In addition, the Board increased the size of the Board from seven to nine directors and elected Mr. Rivera and Neha Jogani Narang to serve as directors of the Company. Mr. Rivera will assume his CEO role and director role and Ms. Narang will assume her director role effective November 11, 2019 (the “Effective Date”). In connection with the appointment of Mr. Rivera as CEO, Marc G. Swanson, who has been serving as our Interim Chief Executive Officer, will resume his previous role of Chief Financial Officer and Treasurer and Elizabeth C. Gulacsy, who has been serving as our Interim Chief Financial Officer and Treasurer in addition to her role as our Chief Accounting Officer, will cease to serve as our Interim Chief Financial Officer and Treasurer, in each case effective on the Effective Date. Ms. Gulacsy will continue to serve as our Chief Accounting Officer.

~~In February 2019, our Board appointed Gustavo (“Gus”) Antorcha to serve as our Chief Executive Officer and John T. Reilly to serve as our Chief Operating Officer.~~ ~~Effective on March 31, 2019, Mr. Reilly resigned from his position of Chief Operating Officer.~~In September 2019, Mr. Antorcha resigned from his position of Chief Executive Officer and resigned as a member of our Board. As a result, the Board appointed Marc G. Swanson, our Chief Financial Officer and Treasurer, to serve as Interim Chief Executive Officer and Elizabeth C. Gulacsy, our Chief Accounting Officer, to serve as Interim Chief Financial Officer and Treasurer in addition to her role of Chief Accounting Officer. Mr. Antorcha was not entitled to any severance benefits in connection with his departure and forfeited his outstanding equity awards.

On February 26, 2018, Joel K. Manby (the “Former CEO”) stepped down from his position as our President and Chief Executive Officer and resigned as a member of our Board. In connection with his departure, the Former CEO received severance-related benefits in accordance with his employment agreement dated March 16, 2015. Certain other executives who separated during 2018 also received severance-related benefits in accordance with the terms of their respective employment agreements or relevant company plan, as applicable. These expenses are included in restructuring and other separation costs for nine months ended September 30, 2018 in the accompanying unaudited condensed consolidated statements of comprehensive income included elsewhere in this Quarterly Report on Form 10-Q.

Additionally, certain equity awards were accelerated to vest in 2018 in connection with the departure of specific executives as required by their respective employment agreements. As a result, we recorded incremental non-cash equity compensation expense related to these awards, which is included in selling, general and administrative expenses for the nine months ended September 30, 2018 in the accompanying unaudited condensed consolidated statements of comprehensive income.year. See Note 14–Restructuring and Other Separation Costs and Note 12–Equity-Based Compensation in our notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

We believe that in addition to the growth potential that exists domestically, our brands can also have significant appeal in certain international markets. We continue to make progress in our partnership with Miral Asset Management LLC to develop SeaWorld Abu Dhabi, a first-of-its-kind marine life themed park on Yas Island (the “Middle East Project”). As part of this partnership, we are providing certain services pertaining to the planning and design of the Middle East Project, with funding received from our partner in the Middle East expected to offset our internal expenses. Construction has begun and SeaWorld Abu Dhabi is expected to be completed in 2022. The Middle East Project is subject to various conditions, including, but not limited to, the parties completing the design development and there is no assurance that the Middle East Project will be completed or advance to the next stage.

As previously disclosed, in March 2017, we entered into a Park Exclusivity and Concept Design Agreement and a Center Concept and Preliminary Design Support Agreement (collectively, the “ZHG Agreements”) with Zhonghong Holding, Co. Ltd. (“Zhonghong Holding”), an affiliate of ZHG Group, to provide design, support and advisory services for various potential projects and grant exclusive rights in China, Taiwan, Hong Kong and Macau through December 2019. In April 2019, we terminated the ZHG Agreements for non-payment of undisputed amounts owed. There were no amounts recorded as revenue related to the ZHG Agreements in the three months ended September 30, 2019. For the ~~nine months ended September~~ ~~30, 2019, we recorded approximately $1.7 million, and for the three and~~ ~~nine months ended September~~ 30, 2018, we recorded approximately $1.3 million and $3.8 million, respectively, in food, merchandise and other revenue in the accompanying unaudited condensed consolidated statements of comprehensive income related to the ZHG Agreements. S~~ee further details in Note 1–Description of the Business and Basis of Presentation and Note 10–Related Party Transactions~~ ~~in our notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.~~

~~For a discussion of certain risks associated with our international development strategy, see the~~ “Risk Factors” ~~section~~for further discussion of the adverse impacts of the COVID-19 pandemic on our ~~Annual Report on Form 10-K,~~business 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.~~financial performance.

The following discussion provides an analysis of our operating results for the three ~~and nine~~ months ended ~~September~~June 30, ~~2019~~2020 and ~~2018. This~~2019. The COVID-19 pandemic has materially impacted our revenue and results of operations for the three and six months ended June 30, 2020. See “Attendance” and “Risk Factors” for further discussion of the adverse impacts of the COVID-19 pandemic on our business. 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 ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019

The following table presents key operating and financial information for the three months ended ~~September~~June 30, ~~2019~~2020 and ~~2018:~~2019:

	For the Three Months Ended												For the Three Months Ended
	September 30,						Variance						June 30,						Variance
	2019			2018			$			%			2020			2019			$			%
Summary Financial Data:	(In thousands, except per capita data)												(In thousands, except per capita data)
Net revenues:
Admissions	$	268,048		$	279,873		$	(11,825	)		(4.2	%)	$	9,775		$	227,828		$	(218,053	)		(95.7	%)
Food, merchandise and other		205,618			203,302			2,316			1.1	%		8,251			178,164			(169,913	)		(95.4	%)
Total revenues		473,666			483,175			(9,509	)		(2.0	%)		18,026			405,992			(387,966	)		(95.6	%)
Costs and expenses:
Cost of food, merchandise and other revenues		37,843			36,062			1,781			4.9	%		1,153			32,006			(30,853	)		(96.4	%)
Operating expenses (exclusive of depreciation and amortization shown separately below)		175,634			198,781			(23,147	)		(11.6	%)		59,049			170,398			(111,349	)		(65.3	%)
Selling, general and administrative expenses		64,632			51,549			13,083			25.4	%		21,104			67,205			(46,101	)		(68.6	%)
Restructuring and other separation costs		1,207			3,866			(2,659	)		(68.8	%)
Severance and other separation costs														9			66			(57	)		(86.4	%)
Depreciation and amortization		40,822			41,187			(365	)		(0.9	%)		37,941			40,053			(2,112	)		(5.3	%)
Total costs and expenses		320,138			331,445			(11,307	)		(3.4	%)		119,256			309,728			(190,472	)		(61.5	%)
Operating income		153,528			151,730			1,798			1.2	%
Operating (loss) income														(101,230	)		96,264			(197,494	)	NM
Other income, net		(86	)		(59	)		(27	)		(45.8	%)		(1	)		(79	)		78			98.7	%
Interest expense		21,463			19,500			1,963			10.1	%		21,908			21,803			105			0.5	%
Income before income taxes		132,151			132,289			(138	)		(0.1	%)
(Loss) income before income taxes														(123,137	)		74,540			(197,677	)	NM
Provision for income taxes		34,123			36,301			(2,178	)		(6.0	%)		7,892			21,889			(13,997	)		(63.9	%)
Net income	$	98,028		$	95,988		$	2,040			2.1	%
Net (loss) income													$	(131,029	)	$	52,651		$	(183,680	)	NM
Other data:
Attendance		8,123			8,344			(221	)		(2.6	%)		272			6,463			(6,191	)		(95.8	%)
Total revenue per capita	$	58.31		$	57.91		$	0.40			0.7	%	$	66.27		$	62.82		$	3.45			5.5	%
Admission per capita	$	33.00		$	33.54		$	(0.54	)		(1.6	%)	$	35.94		$	35.25		$	0.69			2.0	%
In-park per capita spending	$	25.31		$	24.37		$	0.94			3.9	%	$	30.33		$	27.57		$	2.76			10.0	%

Admissions revenue. Admissions revenue for the three months ended ~~September~~June 30, ~~2019~~2020 decreased ~~$11.8~~$218.1 million, or ~~4.2%~~95.7%, to ~~$268.0~~$9.8 million as compared to ~~$279.9~~$227.8 million for the three months ended ~~September~~June 30, ~~2018.~~2019. The decline in admissions revenue was primarily a result of a decrease in attendance of approximately ~~221,000~~6.2 million guests, or ~~2.6%~~95.8%, ~~along with a decrease~~slightly offset by an increase in admission per capita. ~~We believe the decrease in attendance during the quarter~~Attendance declined largely ~~results from~~ unfavorable weather, which included the impacts from rain and Hurricane Dorian, and a calendar shift related to one less peak summer weekend day when compared to the prior year quarter. We estimate the combined impact from adverse weather and the calendar shift was a decline of approximately 330,000 guests, of which we estimate over 90,000 relates to the impact of Hurricane Dorian. Attendance at our Florida parks over Labor Day weekend was impacted by Hurricane Dorian, due to ~~its related impact on travel and visitation plans and park operating hours.~~ fact that all of our parks were closed for the vast majority of the quarter. Admission per capita ~~decreased~~increased by ~~1.6%~~2.0% to ~~$33.00~~$35.94 for the three months ended ~~September~~June 30, ~~2019~~2020 compared to ~~$33.54~~$35.25 in the comparable prior year quarter. Admission per capita ~~decreased~~increased primarily due to the ~~continued implementation~~realization of ~~our targeted promotions and pricing strategies,~~higher prices across admission products, partially offset by ~~price increases on certain products.~~the net impact of attendance mix related to higher pass attendance when compared to the prior year period.

Food, merchandise and other revenue. Food, merchandise and other revenue for the three months ended ~~September~~June 30, ~~2019 increased $2.3~~2020 decreased $169.9 million, or ~~1.1%~~95.4%, to ~~$205.6~~$8.3 million as compared to ~~$203.3~~$178.2 million for the three months ended ~~September~~June 30, ~~2018.~~2019. The ~~increase~~decrease results primarily from the decline in attendance discussed above, slightly offset by an ~~improvement~~increase in in-park per capita ~~spending which was largely offset by the decrease in attendance.~~ spending. ��In-park per capita spending increased by ~~3.9%~~10.0% to ~~$25.31~~$30.33 in the ~~third~~second quarter of ~~2019~~2020 compared to ~~$24.37~~$27.57 in the ~~third~~second quarter of ~~2018.~~2019. In-park per capita spending improved primarily due to ~~pricing initiatives and~~ increased sales of certain in-park ~~products.~~products and higher realized prices and fees, partially offset by reduced in-park offerings during the quarter.

Costs of food, merchandise and other revenues. Costs of food, merchandise and other revenues for the three months ended ~~September~~June 30, ~~2019 increased~~2020 decreased by ~~$1.8~~$30.9 million, or ~~4.9%~~96.4%, to ~~$37.8~~$1.2 million as compared to ~~$36.1~~$32.0 million for the three months ended ~~September~~June 30, ~~2018.~~2019. These costs represent ~~18.4%~~14.0% and ~~17.7%~~18.0% of the related revenue earned for the three months ended ~~September~~June 30, 2020 and 2019, respectively, and ~~2018, respectively.~~were impacted by the decline in attendance and related park closures.

Operating expenses. Operating expenses for the three months ended ~~September~~June 30, ~~2019~~2020 decreased by ~~$23.1~~$111.3 million, or ~~11.6%~~65.3%, to ~~$175.6~~$59.0 million as compared to ~~$198.8~~$170.4 million for the three months ended ~~September~~June 30, ~~2018.~~2019. The ~~decline~~decrease largely results from a reduction in ~~operating~~labor-related costs due primarily to furloughs resulting from the COVID-19 temporary park closures. Operating expenses ~~primarily relates~~also declined due to a reduction in ~~labor~~nonessential operating costs ~~primarily~~which were deferred or eliminated due to the park closures as ~~a result of our focus on~~well as other cost efficiencies, and a decrease in non-cash asset write-offs. Operating expenses were 37.1% of total revenues for the three months ended September 30, 2019 compared to 41.1% for the three months ended September 30, 2018.savings initiatives.

Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended ~~September~~June 30, ~~2019 increased $13.1~~2020 decreased $46.1 million, or ~~25.4%~~68.6%, to ~~$64.6~~$21.1 million as compared to ~~$51.5~~$67.2 million for the three months ended ~~September~~June 30, ~~2018 largely due to approximately $9.5 million in marketing overspend and the timing of certain expenses.~~ 2019. The overspend in marketing was due to less disciplined management of certain marketing related costs during the quarter. As a percentage of total revenue, selling, general and administrative expenses were 13.6% for the three months ended September 30, 2019 compared to 10.7% for the three months ended September 30, 2018.

~~Restructuring and other separation costs.~~ ~~Restructuring and other separation costs for the three months ended September 30, 2019~~decrease primarily relates to ~~severance~~the following: (i) a reduction in marketing and ~~other expenses for positions which were eliminated in 2019. Restructuring and other separation~~media related costs ~~for the three months ended September 30, 2018 primarily relates to severance and other employment expenses related~~due to the ~~2018 Restructuring Program. See Note 14–Restructuring~~COVID-19 temporary park closures; (ii) a decline in third-party consulting costs; (iii) a decrease in legal costs and ~~Other Separation Costs in our notes to~~(iv) the ~~unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.~~impact of cost savings initiatives.

Depreciation and amortization. Depreciation and amortization expense for the three months ended ~~September~~June 30, ~~2019 was relatively flat at $40.8~~2020 declined by $2.1 million, or 5.3%, to $37.9 million as compared to ~~$41.2~~$40.1 million for the three months ended ~~September~~June 30, ~~2018.~~2019. The decrease 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 ~~September~~June 30, ~~2019~~2020 increased ~~$2.0~~$0.1 million, or ~~10.1%~~0.5%, to ~~$21.5~~$21.9 million as compared to ~~$19.5~~$21.8 million for the three months ended ~~September~~June 30, ~~2018.~~2019. The increase primarily relates to ~~the impact of Amendment No. 9~~additional interest related to ~~our~~the Senior Secured ~~Credit Facilities entered into on October 31, 2018 and increased LIBOR rates as well as~~Notes issued in April 2020, a higher outstanding balance on our Revolving Credit Facility during the three months ended ~~September~~June 30, ~~2019.~~2020 and the impact of interest rate swap agreements, which expired in May 2020, partially offset by the impact of decreased LIBOR rates. See Note 6–Long-Term Debt in our notes to the unaudited condensed consolidated financial statements and the “Our Indebtedness” section which follows for further details on our long-term debt.

Provision for income taxes. The provision for income taxes in the three months ended ~~September~~June 30, ~~2019~~2020 was ~~$34.1~~$7.9 million compared to ~~$36.3~~$21.9 million for the three months ended ~~September~~June 30, ~~2018.~~2019. Our consolidated effective tax rate was ~~25.8%~~-6.4% for the three months ended ~~September~~June 30, ~~2019~~2020 compared to ~~27.4%~~29.4% for the three months ended ~~September~~June 30, ~~2018.~~2019. The effective tax rate decreased primarily due to a non-cash valuation allowance adjustment on federal and state net operating loss carryforwards, a valuation allowance adjustment on federal tax credits and charitable contributions, changes in state tax rates, and other permanent items ~~related to a nondeductible legal settlement and~~including equity-based compensation.

Comparison of the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020 and ~~2018~~2019

The following table presents key operating and financial information for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 and ~~2018:~~2019:

	For the Nine Months Ended												For the Six Months Ended
	September 30,						Variance						June 30,						Variance
	2019			2018			$			%			2020			2019			$			%
Summary Financial Data:	(In thousands, except per capita data)												(In thousands, except per capita data)
Net revenues:
Admissions	$	624,789		$	635,682		$	(10,893	)		(1.7	%)	$	100,281		$	356,741		$	(256,460	)		(71.9	%)
Food, merchandise and other		475,444			456,580			18,864			4.1	%		71,306			269,826			(198,520	)		(73.6	%)
Total revenues		1,100,233			1,092,262			7,971			0.7	%		171,587			626,567			(454,980	)		(72.6	%)
Costs and expenses:
Cost of food, merchandise and other revenues		87,062			85,012			2,050			2.4	%		14,257			49,219			(34,962	)		(71.0	%)
Operating expenses (exclusive of depreciation and amortization shown separately below)		495,917			544,354			(48,437	)		(8.9	%)		192,048			320,283			(128,235	)		(40.0	%)
Selling, general and administrative expenses		174,601			186,076			(11,475	)		(6.2	%)		48,058			109,969			(61,911	)		(56.3	%)
Restructuring and other separation costs		3,839			16,392			(12,553	)		(76.6	%)
Severance and other separation costs														74			2,632			(2,558	)		(97.2	%)
Depreciation and amortization		120,325			119,635			690			0.6	%		75,954			79,503			(3,549	)		(4.5	%)
Total costs and expenses		881,744			951,469			(69,725	)		(7.3	%)		330,391			561,606			(231,215	)		(41.2	%)
Operating income		218,489			140,793			77,696			55.2	%		(158,804	)		64,961			(223,765	)	NM
Other income, net		(138	)		(38	)		(100	)	NM				(13	)		(52	)		39			75.0	%
Interest expense		64,063			59,974			4,089			6.8	%		41,061			42,600			(1,539	)		(3.6	%)
Income before income taxes		154,564			80,857			73,707			91.2	%
Provision for income taxes		40,905			25,016			15,889			63.5	%
Net income	$	113,659		$	55,841		$	57,818			103.5	%
(Loss) income before income taxes														(199,852	)		22,413			(222,265	)	NM
(Benefit from) provision for income taxes														(12,304	)		6,782			(19,086	)	NM
Net (loss) income													$	(187,548	)	$	15,631		$	(203,179	)	NM
Other data:
Attendance		17,925			17,982			(57	)		(0.3	%)		2,591			9,802			(7,211	)		(73.6	%)
Total revenue per capita	$	61.38		$	60.74		$	0.64			1.1	%	$	66.22		$	63.92		$	2.30			3.6	%
Admission per capita	$	34.86		$	35.35		$	(0.49	)		(1.4	%)	$	38.70		$	36.39		$	2.31			6.3	%
In-park per capita spending	$	26.52		$	25.39		$	1.13			4.5	%	$	27.52		$	27.53		$	(0.01	)		(0.0	%)

Admissions revenue. Admissions revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 decreased ~~$10.9~~$256.5 million, or ~~1.7%~~71.9%, to ~~$624.8~~$100.3 million as compared to ~~$635.7~~$356.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The decline in admissions revenue was primarily a result of a decrease in ~~admission per capita when compared to the first nine months of 2018 and was also impacted by a decrease in~~ attendance of approximately ~~57,000~~7.2 million guests, or 0.3%. We estimate that Hurricane Dorian over Labor Day weekend negatively impacted attendance by more than 90,000 guests. Admission per capita decreased by 1.4% to $34.86 for the nine months ended September 30, 2019 compared to $35.35 for the nine months ended September 30, 2018. This decrease was more than73.6%, partially offset by an increase in ~~in-park~~admission per ~~capita spending as discussed below.~~capita. Attendance declined due to the temporary park closures, beginning on March 16, 2020, resulting from the global COVID-19 pandemic. Admission per capita ~~decreased~~increased by 6.3% to $38.70 for the six months ended June 30, 2020 compared to $36.39 for the six months ended June 30, 2019. Admission per capita increased primarily due to the ~~continued implementation~~realization of ~~targeted promotions and pricing strategies,~~higher prices in admission products, partially offset by ~~price increases on certain products in~~ the ~~first nine months~~net impact of ~~2019~~attendance mix related to higher pass attendance when compared to the prior year period. ~~We believe the decline in attendance was primarily related to unfavorable weather, particularly in the third quarter and in June, partially offset by a~~ ~~combination of factors including~~ ~~the positive reception of our new rides and compelling attractions and events and enhanced overall marketing and communication initiatives.~~

Food, merchandise and other revenue. Food, merchandise and other revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2019 increased $18.9~~2020 decreased $198.5 million, or ~~4.1%~~73.6%, to ~~$475.4~~$71.3 million as compared to ~~$456.6~~$269.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The ~~increase~~decrease largely results from ~~an increase in in-park per capita spending partially offset by~~ the decline in ~~attendance.~~attendance discussed above. In-park per capita spending ~~increased by 4.5% to $26.52~~was relatively flat at $27.52 for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 compared to ~~$25.39~~$27.53 for the ~~nine~~six months ended ~~September~~June 30, ~~2018. In-park per capita spending improved primarily due to pricing initiatives and increased sales of in-park products.~~2019.

Costs of food, merchandise and other revenues. Costs of food, merchandise and other revenues for the ~~nine~~six months ended ~~September~~June 30, ~~2019 increased $2.1~~2020 decreased $35.0 million, or ~~2.4%~~71.0%, to ~~$87.1~~$14.3 million as compared to ~~$85.0~~$49.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. These costs represent ~~18.3%~~20.0% and ~~18.6%~~18.2% of the related revenue earned for the ~~nine~~six months ended ~~September~~June 30, 2020 and 2019, respectively, and ~~2018, respectively.~~were impacted by the decline in attendance and related park closures.

Operating expenses. Operating expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 decreased by ~~$48.4~~$128.2 million, or ~~8.9%~~40.0%, to ~~$495.9~~$192.0 million as compared to ~~$544.4~~$320.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The ~~decline in operating expenses primarily relates to~~decrease largely results from the following: (i) a reduction in ~~labor~~labor-related costs due primarily asto the COVID-19 temporary park closures; (ii) a ~~result of our focus on cost efficiencies and~~reduction in other nonessential operating costs which were deferred or eliminated due to the park closures; (iii) a decrease in non-cash ~~asset write-offs. Operating expenses~~equity compensation expense related primarily to the reversal of certain performance vesting restricted units which were ~~45.1%~~no longer considered probable of ~~total revenues~~vesting; and (iv) the impact of other cost savings initiatives. See Note 11–Equity-Based Compensation in our notes to the unaudited condensed consolidated financial statements for ~~the nine months ended September 30, 2019 compared to 49.8% for the nine months ended September 30, 2018.~~further details.

Selling, general and administrative expenses. Selling, general and administrative expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 decreased ~~$11.5~~$61.9 million, or ~~6.2%~~56.3%, to ~~$174.6~~$48.1 million as compared to ~~$186.1~~$110.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The decrease ~~in selling, general and administrative expenses~~ primarily relates to the following: (i) a reduction in marketing and media related costs due to the COVID-19 temporary park closures; (ii) a decrease in legal costs ~~largely~~due to a previously disclosed legal settlement gain of $12.5 million related to ~~a legal settlement accrual of $8.1 million recorded~~insurance proceeds received in the first quarter of ~~2018 and~~2020; (iii) a ~~settlement of $4.0 million recorded~~decline in ~~the second quarter of 2018; (ii)~~third-party consulting costs (iv) a decrease ~~of $6.5 million~~ in non-cash equity compensation expense, primarily related to the reversal of equity compensation, as mentioned above, and also includes the reversal of equity compensation expense related to outstanding unvested equity awards ~~which were accelerated to vest in~~previously held by the ~~first quarter~~Company’s former chief executive officer; and (v) the impact of ~~2018 in connection with the departure of certain executives; and (iii) a decline in salary and other related costs due in part to~~ cost savings ~~initiatives (see~~initiatives. See Note ~~11–~~10–Commitments and Contingencies and Note ~~12–~~11–Equity-Based Compensation in our notes to ~~our~~the unaudited condensed consolidated financial statements ~~included elsewhere in this Quarterly Report on Form 10-Q~~ for further details). These factors were partially offset by an increase in marketing costs, particularly in the third quarter as well as other expenses associated with the previously disclosed transfer of shares and HP Agreements (see Note 10–Related Party Transactions and Note 13–Stockholders’ Equity in our notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details). As a percentage of total revenue, selling, general and administrative expenses were 15.9% for the nine months ended September 30, 2019 compared to 17.0% for the nine months ended September 30, 2018.details.

~~Restructuring~~Severance and other separation costs. ~~Restructuring~~Severance and other separation costs for the ~~nine~~six months ended ~~September~~June 30, 2019 primarily relates to severance and other expenses for positions which were eliminated in 2019. Restructuring and other separation costs for the nine months ended September 30, 2018 also includes severance and other employment expenses for our Former CEO and includes severance and other employment expenses for other employees whose employment terminated during 2018, including costs associated with the 2018 Restructuring Program. See Note 14–Restructuring and Other Separation Costs in our notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Depreciation and amortization. Depreciation and amortization expense for the ~~nine~~six months ended ~~September~~June 30, ~~2019 increased $0.7~~2020 decreased $3.5 million, or ~~0.6%~~4.5%, to ~~$120.3~~$76.0 million as compared to ~~$119.6~~$79.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The decrease relates to the impact of asset retirements and fully depreciated assets, partially offset by new asset additions.

Interest expense. Interest expense for the ~~nine~~six months ended ~~September~~June 30, ~~2019 increased $4.1~~2020 decreased $1.5 million, or ~~6.8%~~3.6%, to ~~$64.1~~$41.1 million as compared to ~~$60.0~~$42.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~ 2019. The ~~increase~~decrease primarily relates to ~~the impact of Amendment No. 9 to our Senior Secured Credit Facilities entered into on October 31, 2018 and increased~~decreased LIBOR rates, ~~as well as~~partially offset by a higher outstanding balance on our Revolving Credit Facility during the ~~nine~~six months ended ~~September~~June 30, ~~2019, partially offset by~~2020, the impact of interest rate swap ~~agreements.~~ agreements, which expired in May 2020 and additional interest related to the Senior Secured Notes issued in April 2020. See Note 6–Long-Term Debt in our notes to the unaudited condensed consolidated financial statements and the “Our Indebtedness” section which follows for further details.

~~Provision~~(Benefit from) provision for income taxes. The benefit from income taxes for the six months ended June 30, 2020 was $12.3 million compared to a provision for income taxes ~~for the nine months ended September 30, 2019 was $40.9 million compared to $25.0~~of $6.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. Our consolidated effective tax rate was ~~26.5%~~6.2% for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 compared to ~~30.9%~~30.3% for the ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019. The effective tax rate decreased primarily due to ~~permanent items related to~~ a ~~nondeductible legal settlement and equity-based compensation, partially offset by changes to the~~non-cash valuation allowance adjustment on federal and state net operating loss carryforwards, a valuation allowance adjustment on federal tax credits and charitable contributions, changes in state tax rates, and other permanent items including equity-based compensation. .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.

~~Our~~On August 5, 2020, we closed on a private offering of $500.0 million aggregate principal amount of 9.500% second-priority senior secured notes due 2025 (the “Second-Priority Senior Notes”). We intend to use the proceeds from the issuance of the Second-Priority Senior Notes to repay outstanding borrowings under our Revolving Credit Facility and for working capital and other general corporate purposes.

Generally, our principal sources of liquidity are cash generated from operations, funds from borrowings and existing cash on hand. Our principal uses of cash include the funding of working capital obligations, debt service, investments in theme parks (including capital projects), and share ~~repurchases.~~repurchases, when permitted. As of ~~September~~June 30, ~~2019,~~2020, we had a working capital ratio (defined as current assets divided by current liabilities) of ~~0.4,~~1.3, due in part to our outstanding cash balance at June 30, 2020. Historically, we typically operate with a working capital ratio less than 1 due to significant deferred revenue balance from revenues paid in advance for our theme park admissions products and high turnover of in-park products that ~~results~~result in a limited inventory ~~balance. We typically operate with a working capital ratio less than 1 and we expect that we will continue to do so in the future.~~balances. Our cash flow from operations, along with our revolving credit facilities, have historically allowed us to meet our liquidity needs.

Due to the adverse impact of the COVID-19 temporary park closures, which started on March 16, 2020, and the limited reopening with reduced operating days and capacity of our Florida and Texas parks in June, we generated negative cash flows from operating activities for the six months ended June 30, 2020. See the “Impact of Global COVID-19 Pandemic” section and the “Our Indebtedness” section for further details concerning the proactive measures we have taken to address liquidity in response to the COVID-19 pandemic. For other factors concerning the global COVID-19 pandemic, see the “Risk Factors” section in this Quarterly Report on Form 10-Q.

As market conditions warrant and subject to our contractual restrictions and liquidity position, we, our affiliates and/or our stockholders, 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 the 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.

Our Board had previously authorized a share repurchase program of up to $250.0 million of our common stock (the “Share Repurchase Program”). Under the 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. The Share Repurchase Program has no time limit and may be suspended or discontinued completely at any time.

~~Through December 31, 2018, we had repurchased an aggregate of $158.0 million under~~During the ~~Share Repurchase Program. On February 22, 2019, our Board authorized a replenishment~~six months ended June 30, 2020, prior to the ~~Share Repurchase Program bringing the total amount authorized for future share repurchases back up to $250.0 million. During the nine months ended September 30, 2019,~~COVID-19 temporary park closures, we completed a share repurchase of ~~5,615,874~~469,785 shares for an aggregate total of ~~$150.0 million. On August 2, 2019, our Board approved a replenishment to the Share Repurchase Program of $150.0~~approximately $12.4 million, ~~bringing the total amount authorized for future share repurchases back up to $250.0 million. There were no share repurchases~~leaving approximately $237.6 million available under the Share Repurchase Program ~~during~~as of June 30, 2020. In connection with Amendment No. 12 to the ~~three months ended September 30, 2019~~Amended Credit Agreement, we are restricted from paying any dividends or ~~the three and nine months ended September 30, 2018.~~

~~Our Senior Secured Credit Facilities contain negative covenants that, among~~making other ~~things, restrict our ability for future share repurchases. The available capacity for~~ restricted payments, ~~is recalculated at~~including share repurchases, through the ~~beginning~~third quarter of ~~each quarter, or upon declaration of a restricted payment as set forth in the credit agreement. See Note~~ ~~6–Long-Term Debtto our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q~~ ~~for further details.~~2022 unless certain conditions are met. The number of shares to be purchased and the timing of purchases will be based on our trading windows ~~or as set forth in an adopted 10b5-1 plan, if any,~~ and available liquidity, general business and market conditions and other factors, including legal requirements and alternative opportunities.

See Note ~~10–Related Party Transactions~~6–Long-Term Debt and Note ~~13–~~12–Stockholders’ Equity in our notes to ~~our~~the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

As of September 30, 2019, we have five interest rate swap agreements (the “Interest Rate Swap Agreements”) which effectively fix the interest rate on LIBOR-indexed interest payments associated with $1.0 billion of outstanding long-term debt. The Interest Rate Swap Agreements have a total notional amount of $1.0 billion and mature on May 14, 2020. See Note 6–Long-Term Debt and Note 8–Derivative Instruments and Hedging Activities to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

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 and working capital requirements of our operations for at least the next 12 months.

The following table presents a summary of our cash flows (used in) provided by ~~(used in)~~ operating, investing, and financing activities for the periods indicated:

	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	2019			2018			2020			2019
	(Unaudited, in thousands)						(Unaudited, in thousands)
Net cash provided by operating activities	$	313,683		$	267,458
Net cash (used in) provided by operating activities							$	(68,326	)	$	167,386
Net cash used in investing activities		(152,856	)		(141,227	)		(53,699	)		(112,790	)
Net cash used in financing activities		(143,244	)		(32,856	)
Net cash provided by (used in) financing activities								458,273			(44,784	)
Net increase in cash and cash equivalents, including restricted cash	$	17,583		$	93,375		$	336,248		$	9,812

Net cash used in operating activities was $68.3 million during the six months ended June 30, 2020 as compared to net cash provided by operating activities ~~was $313.7~~of $167.4 million during the ~~nine~~six months ended ~~September~~June 30, ~~2019 as compared to $267.5 million during the nine months ended September 30, 2018. The increase in net~~2019. Net cash (used in) provided by operating activities was primarily impacted by ~~improved operating performance and changes~~the decline in ~~working capital.~~revenue due to the temporary park closures.

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 ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 consisted primarily of capital expenditures of ~~$152.9~~$53.7 million largely related to future attractions. Net cash used in investing activities during the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 consisted primarily of ~~$140.9~~$112.7 million of capital expenditures largely related ~~to attractions that opened in 2018.~~future attractions.

The following table presents detail of our capital expenditures for the periods indicated:

	For the Nine Months Ended September 30,				For the Six Months Ended June 30,
	2019		2018		2020		2019
Capital Expenditures:	(Unaudited, in thousands)				(Unaudited, in thousands)
Core^(a)	$	137,053	$	139,247	$	45,840	$	100,271
Expansion/ROI projects^(b)		15,827		1,631		7,859		12,467
Capital expenditures, total	$	152,880	$	140,878	$	53,699	$	112,738

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. We generally expect to fund our capital expenditures through our operating cash flow. See the “Impact of Global COVID-19 Pandemic” section for further details regarding proactive measures we have taken starting in March 2020 relating to our capital expenditures including delaying the opening of certain new rides to 2021.

Net cash provided by financing activities during the six months ended June 30, 2020 results primarily from net draws on our revolving credit facility of $261.0 million and net proceeds from our Senior Notes offering of $222.3 million, partially offset by $12.4 million used to repurchase shares and repayments of $7.8 million on our long-term debt. Net cash used in financing activities during the ~~nine~~six months ended ~~September~~June 30, 2019 results primarily from $150.0 million used to repurchase shares and repayments of ~~$11.6~~$7.8 million on our long-term debt, partially offset by a net draw on our revolving credit facility of ~~$20.0 million. Net cash~~$115.0 million which was primarily used ~~in financing activities during~~for the ~~nine months ended September 30, 2018 results primarily from net repayments of $15.0 million on our revolving credit facility and $17.8 million on our long-term debt.~~share repurchase. See Note 6–Long-term Debt ~~Note 10–Related Party Transactions and Note 13–Stockholders’ Equity~~ in our notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

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, 2020, our indebtedness consisted of senior secured credit facilities and senior secured notes (“Senior Notes”).

SeaWorld Parks & Entertainment, Inc. (“SEA”) is the borrower under ~~our~~the senior secured credit facilities, ~~(the “Senior Secured Credit Facilities”)~~as amended pursuant to a credit agreement (the “Amended Credit Agreement”) dated as of December 1, 2009, ~~by and among SEA, as borrower, Bank of America, N.A., as administrative agent, collateral agent, letter of credit issuer and swing line lender and the other agents and lenders party thereto,~~ as the same may be amended, restated, supplemented or modified from time to ~~time.~~time (the “Senior Secured Credit Facilities”). On ~~October 31, 2018,~~March 10, 2020, SEA entered into ~~a refinancing~~an amendment, Amendment No. ~~9 with~~10 (the “Amendment No. 10”) to its Amended Credit Agreement. Pursuant to Amendment No. 10, SEA asincreased the ~~borrower, JPMorgan Chase Bank, N.A., as successor administrative agent, successor collateral~~ ~~agent, L/C issuer and swing line lender and~~revolving credit commitments available under the ~~other agents and lenders~~Amended Credit Agreement from ~~time~~$210.0 million to ~~time~~an aggregate of $332.5 million. On April 19, 2020, SEA entered into another amendment, Amendment No. 11, (the ~~“Amended Credit Agreement”~~“Amendment No. 11”), to the ~~existing~~credit agreement governing the Senior Secured Credit ~~Facilities.~~ Facilities to amend certain covenant provisions therein. On July 29, 2020, SEA entered into another amendment, Amendment No. 12, (the “Amendment No. 12”) to its Amended Credit Agreement to further amend certain provisions therein. See “Covenant Compliance” discussion which follows.

As of ~~September~~June 30, ~~2019,~~2020, our Senior Secured Credit Facilities consisted of ~~$1.512~~$1.5 billion in Term B-5 Loans which will mature on March 31, 2024, along with a ~~$210.0~~$332.5 million Revolving Credit Facility, of which ~~$50.0~~$311.0 million was drawn upon as of ~~September~~June 30, ~~2019.~~2020. Additionally, as of ~~September~~June 30, ~~2019,~~2020, SEA had approximately ~~$20.4~~$21.2 million of outstanding letters of credit, leaving ~~approximately $139.6 million~~no remaining amount available for borrowing under the Revolving Credit Facility. ~~Subsequent~~

On April 30, 2020, SEA closed on a private offering of $227.5 million aggregate principal amount of 8.750% first-priority senior secured notes due 2025 (the “Senior Notes”). Net of expenses related to ~~September 30, 2019,~~the offering of the Senior Notes and Amendment No. 11 to the Amended Credit Agreement, we expect to use the proceeds from the issuance of the Senior Notes for working capital and other general corporate purposes.

See Note 6–Long-Term Debt in our notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details concerning our long-term debt.

On August 5, 2020, SEA ~~repaid $10.0~~closed on a private offering of $500.0 million onaggregate principal amount of 9.500% second-priority senior secured notes due 2025 (the “Second-Priority Senior Notes”). Net of expenses related to the offering of the Second-Priority Senior Notes and Amendment No. 12 to the Credit Agreement, we intend to use the proceeds from the issuance of the Second-Priority Senior Notes to repay outstanding borrowings under the Revolving Credit ~~Facility.~~Facility and for working capital and other general corporate purposes.

~~The Amended~~As of June 30, 2020, we were in compliance with all covenants in the credit agreement governing the Senior Secured Credit ~~Agreement removed all previous financial covenants on the Term B-5 Loans.~~ Facilities.

The Revolving Credit Facility requires that ~~SEA~~the Company comply with a springing maximum first lien secured leverage ratio of 6.25x to be tested as of the last day of any fiscal quarter, solely to the extent that on such date the aggregate amount of funded loans and letters of credit (excluding undrawn letters of credit in an amount not to exceed $30.0 million and cash collateralized letters of credit) under the Revolving Credit Facility exceeds an amount equal to 35% of the then outstanding commitments under the Revolving Credit Facility. AsPursuant to Amendment No. 12, among other terms, SEA will be exempt from complying with its first lien secured leverage ratio covenant through the end of 2021, after which SEA will be required to comply with such covenants starting at the first quarter of 2022.For purposes of calculating compliance with such covenant, unless a Triggering Event occurs (as defined in Amendment No. 12), beginning with the first quarter of 2022, to the extent trailing Adjusted EBITDA (as defined in Amendment No. 12) for the second, third or fourth quarters of 2021 would have otherwise been included in the calculation of such covenant, in lieu of using actual Adjusted EBITDA for such periods, Adjusted EBITDA for such applicable periods will be deemed to be Adjusted EBITDA (as defined in Amendment No. 12) for the corresponding quarter of 2019.

See Note 6–Long-Term Debt to the unaudited condensed consolidated financial statements for further details relating to the calculation beginning in the first quarter of 2022. In addition, SEA will be required to comply with a quarterly minimum liquidity test (defined as unrestricted cash and cash equivalents and available commitments under the Revolving Credit Facility) of not less than $75.0 million until the earlier of September 30, ~~2019, SEA was in compliance with all covenants contained in~~2022 or the ~~documents governing~~date on which the ~~Senior Secured Credit Facilities.~~

~~Additionally, the definition of~~Company elects to use actual Adjusted EBITDA ~~was amended to include the following items which had previously been added back on a limited basis: (i) add-backs~~for purposes of certain unusual items on a pre-tax basis which were previously added back on an after-tax basis only and (ii) unlimited add-backs primarily related to business optimization, development and strategic initiative costs which were previously limited to $15.0 million in any fiscal year. The Amended Credit Agreement also replaced the previous $10.0 million limitation on estimated cost savings with a limitation of 25% of the latest twelve months Adjusted EBITDA, calculated before estimated cost savings and increased the realization limit for estimated cost savings, operating expense reductions and synergies to 18 months. calculating its financial maintenance covenant.

~~As of September 30, 2019, the total leverage ratio as calculated under our Senior Secured Credit Facilities was~~ ~~3.34~~ to 1.00. Our total leverage ratio is calculated by dividing total net debt by the last twelve months Adjusted EBITDA plus $14.9 million in estimated cost savings which have been identified based on certain specified actions we have taken, including restructurings and cost savings initiatives.

See Note 6–Long-Term Debt to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Under the credit agreement governing the Senior Secured Credit Facilities, 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 “Adjusted EBITDA”. The Senior Secured Credit Facilities defines “Adjusted EBITDA” as net income before interest expense, income tax expense, depreciation and amortization, as further adjusted to exclude certain unusual, non-cash, and other items permitted in calculating covenant compliance under the Senior Secured Credit ~~Facilities.~~Facilities, subject to certain limitations. Adjusted EBITDA as defined in the Senior Secured Credit Facilities is consistent with our reported Adjusted EBITDA. 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. The presentation of Adjusted EBITDA provides additional information to investors about the calculation of, and compliance with, certain financial covenants and other relevant metrics in the credit agreement governing the Senior Secured Credit Facilities. Adjusted EBITDA is a material component of these covenants. 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, the presentation of Adjusted EBITDA for the last twelve months provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Senior Secured Credit Facilities. Adjusted EBITDA is a material component of these covenants. See the “Our Indebtedness-Covenant Compliance” section for further details.

Adjusted EBITDA is not a recognized term under accounting principles generally accepted in the United States of America (“GAAP”), should not be considered in isolation or as a substitute for a measure of our financial performance prepared in accordance with GAAP and is not indicative of income from operations as determined under GAAP. 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, as presented by us, may not be comparable to similarly titled measures of other companies due to varying methods of calculation.

The following table reconciles Adjusted EBITDA, as defined in the Amended Credit Agreement, to net (loss) income for the periods indicated:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Last Twelve Months Ended
September 30,

2019

2018

2019

2018

2019

(Unaudited, in thousands)

Net income

$
98,028

$
95,988

$
113,659

$
55,841

$
102,606

Provision for income taxes

34,123

36,301

40,905

25,016

33,804

Loss on early extinguishment of debt and write-off of discounts and debt issuance costs ^(a)

—

—

—

—

8,150

Interest expense

21,463

19,500

64,063

59,974

85,003

Depreciation and amortization

40,822

41,187

120,325

119,635

161,645

Equity-based compensation expense ^(b)

1,162

5,183

8,444

18,620

11,976

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

1,425

4,222

2,217

11,873

9,206

Business optimization, development and strategic initiative costs ^(d)

9,270

7,670

18,262

26,604

21,118

Certain transaction and investment costs and other taxes ^(e)

468

2,890

4,930

3,305

4,978

Other adjusting items ^(f)

136

(544
)

182

15,808

(896
)

Adjusted EBITDA ^(g)

$
206,897

$
212,397

$
372,987

$
336,676

$
437,590

Items added back to Adjusted EBITDA, after cost savings, as defined in the Amended Credit Agreement:

Estimated cost savings ^(h)

14,900

Adjusted EBITDA, after cost savings ⁽ⁱ⁾

$
452,490

	For the Three Months Ended June 30,					For the Six Months Ended June 30,					Last Twelve Months Ended June 30,
	2020			2019		2020			2019		2020
	(Unaudited, in thousands)
Net (loss) income	$	(131,029	)	$	52,651	$	(187,548	)	$	15,631	$	(113,703	)
Provision for (benefit from) income taxes		7,892			21,889		(12,304	)		6,782		20,442
Interest expense		21,908			21,803		41,061			42,600		82,639
Depreciation and amortization		37,941			40,053		75,954			79,503		157,008
Equity-based compensation expense ^(a)		3,320			4,084		(281	)		7,282		3,543
Loss on impairment or disposal of assets and certain non-cash expenses^(b)		1,035			683		1,420			792		3,826
Business optimization, development and strategic initiative costs ^(c)		264			3,884		2,299			8,992		21,176
Certain investment costs and other taxes ^(d)		560			4,412		662			4,462		1,256
Other adjusting items^(e)		4,271			215		(5,954	)		46		29,954
Adjusted EBITDA ^(f)	$	(53,838	)	$	149,674	$	(84,691	)	$	166,090	$	206,141
Items added back to Adjusted EBITDA, after cost savings, as defined in the Amended Credit Agreement:
Estimated cost savings^(g)												4,500
Adjusted EBITDA, after cost savings ^(h)											$	210,641

Prior to the Amended Credit Agreement, the credit agreement governing our Senior Secured Credit Facilities limited the amount of certain add-backs as described in footnotes (d) and (f) below. The Adjusted EBITDA for all periods above reflects the current definitions in the Amended Credit Agreement. The following table reconciles the Adjusted EBITDA calculation as previously defined prior to the Amended Credit Agreement to the Adjusted EBITDA calculation as defined in the Amended Credit Agreement. This table is presented as supplemental information only:

For the three and nine months ended September 30, 2018, reflects business optimization, development and other strategic initiative costs primarily related to: (i) $3.9 million and $16.4 million, respectively, of severance and other employment costs which, for the three months ended September 30, 2018 primarily relates to the 2018 Restructuring Program and for the nine months ended September 30, 2018 primarily relates to costs associated with the departure of certain executives during 2018; (ii) $3.6 million and $8.9 million, respectively, of third party consulting costs; and (iii) $0.2 million and $1.3 million, respectively, of product and intellectual property development costs.

For the twelve months ended September 30, 2019, reflects business optimization, development and other strategic initiative costs primarily related to: (i) $14.3 million of third party consulting costs and (ii) $4.8 million of severance and other employment costs primarily associated with positions eliminated.

See Note 14–Restructuring and Other Separation Costs in our notes to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Prior to the Amended Credit Agreement, due to limitations under the credit agreement governing our Senior Secured Credit Facilities, the amount which we were able to add back to Adjusted EBITDA for these costs, was limited to $15.0 million in any fiscal year.

~~Prior to the Amended Credit Agreement, these items were excluded on an after-tax basis only.~~

~~Other than net borrowings under our Revolving Credit Facility, there~~There have been no material changes ~~outside of the ordinary course of business in~~to our contractual obligations from those previously disclosed in our Annual Report on Form 10-K. other than long-term debt and interest obligations pursuant to our Senior Notes offering which closed on April 30, 2020 and Amendment No. 10 to our Amended Credit Agreement. As a result, our total long-term debt obligations as of June 30, 2020, not including any possible prepayments, are as follows for the remainder of 2020, 2021-2022, 2023-2024 and 2025, respectively (in thousands): $7,753; $31,010; $1,772,368; and $227,500. Our estimated future interest payments based on interest rates in effect at June 30, 2020 are as follows for the remainder of 2020, 2021-2022, 2023-2024 and 2025, respectively (in thousands): $44,687; $177,170; $120,796; and $9,844. Interest obligations also include letter of credit and commitment fees for the used and unused portions of our Revolving Credit Facility assuming payoff at maturity and excluding any possible principal prepayments.

Subsequent to June 30, 2020, we entered into Amendment No. 12 to the Amended Credit Agreement and we issued $500.0 million in second-priority senior secured notes. 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.

See the “Impact of Global COVID-19 Pandemic” section for further details regarding proactive measures we have taken starting in March 2020 relating to our capital expenditures including delaying the opening of certain new rides to 2021.

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 tangible and intangible assets, the valuation of goodwill and other indefinite-lived intangible 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.”These critical accounting policies include impairment of long-lived assets, goodwill and other indefinite-lived intangible assets, accounting for income taxes, self-insurance reserves, and revenue recognition. 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, 2019~~February 27, 2020, except as noted below.

As of June 30, 2020, we determined that due to the temporary park closures effective March 16, 2020 resulting from the global COVID-19 pandemic, a triggering event had occurred that required an interim impairment assessment for goodwill and other indefinite-lived intangible assets. We performed a qualitative impairment analysis which included certain judgements and assumptions related to the impact of the park closures, reopening time frames and expected attendance levels upon reopening and determined that, based on the significant excess fair values over carrying values that previously existed, there was no impairment as of June 30, 2020 related to these assets. Additionally, using similar assumptions, we evaluated certain other long-lived assets, including our right of use assets for impairment as of June 30, 2020. We compared the estimated undiscounted net cash flows of our long-lived and right of use assets to their respective carrying values. Based on the results of the analysis and our intent and ability to retain value and use for a period of time sufficient to allow for any anticipated recovery in market conditions, we concluded that the estimated undiscounted net cash flows for these assets exceeded its carrying value and therefore, no impairment of other long-lived assets had occurred as of June 30, 2020.

Given the current macroeconomic environment related to the global COVID-19 pandemic and the uncertainties regarding the related impact on financial performance, there can be no assurance that the estimates and assumptions made for purposes of the interim impairment assessments will prove to be accurate predictions of the future. If our assumptions, as well as the economic outlook are not achieved, we may be required to record impairment charges in future periods, whether in connection with the our next annual impairment testing, or on an interim basis, if any such change constitutes a triggering event outside of the quarter when we regularly performs our annual impairment test. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material.

We had no material off-balance sheet arrangements as of ~~September~~June 30, ~~2019.~~2020.

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.

The impact of inflation has affected, and will continue to affect, our operations significantly. Our costs of food, merchandise and other revenues are influenced by inflation and fluctuations in global commodity prices. In addition, costs for construction, repairs and maintenance are all subject to inflationary pressures.

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.

We ~~manage~~previously managed interest rate risk through the use of a combination of fixed-rate long-term debt and interest rate swaps that ~~fix~~fixed a portion of our variable-rate long-term debt.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive (loss) income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive (loss) income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the ~~next 12~~three months ended June 30, 2020, our ~~estimate is that an additional $3.1 million will be reclassified as an increase to interest expense.~~

~~After considering the impact of~~ interest rate swap agreements ~~at September~~expired, as such, we did not have any derivative instruments outstanding as of June 30, ~~2019,~~2020. We presently manage interest rate risk primarily by managing the amount, sources and duration of our debt funding. At June 30, 2020, approximately ~~$1.0~~$1.8 billion of our outstanding long-term debt ~~represents fixed-rate debt and approximately $511.8 million~~ represents variable-rate debt. Assuming an average balance on our revolving credit borrowings of approximately ~~$40.0~~$311.0 million, a hypothetical 100 bps increase in ~~one month~~ LIBOR would increase our annual interest expense by approximately $9.3 million. Assuming no revolving credit borrowings, a hypothetical 100 bps increase in LIBOR would increase our annual interest expense by approximately $6.2 million.

See “Risk Factors” for further discussion of the adverse impacts of the COVID-19 pandemic on our ~~variable-rate debt would lead to an increase of approximately $5.5 million in annual cash interest costs due to the impact of our fixed-rate swap agreements.~~business and financial performance.

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. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that 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. 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 principal executive officer and principal financial officer have concluded, based on the evaluation of the effectiveness of the disclosure controls and procedures by our management as of the end of the fiscal quarter covered by this Quarterly Report, that our disclosure controls and procedures were effective to accomplish their objectives at a reasonable assurance level.

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. ~~Effective on January 1, 2019, we adopted Accounting Standards Codification (“ASC”) 842,~~ ~~Leases,~~ ~~which resulted in recording lease liabilities and right-of-use assets on our unaudited condensed consolidated balance sheet. As a result of this adoption, we implemented changes~~We have not experienced any material impact to our internal ~~control activities and processes related to our lease commitments. These changes included implementing a new lease management software, establishing certain~~ controls over financial reporting ~~relating to leases and revising existing lease accounting policies and procedures. See Note 2–Recent Accounting Pronouncements and Note 7–Leases in~~despite the fact that most of our ~~notes~~employees are working remotely due to the ~~unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report~~COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on ~~Form 10-Q.~~our internal controls to minimize the impact on their design and operating effectiveness. There have been no ~~other~~ changes in our internal control over financial reporting during the fiscal quarter covered by this Quarterly Report that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

In August 2019, the San Diego County Department of Environmental Health’s Hazardous Material Division (the “Division”) notified us that one of SeaWorld’s underground storage tanks was allegedly operating in violation of various California laws and regulations regarding leak detection and secondary containment systems. We hired environmental consultants, engineers and attorneys to assist in investigating the allegations and addressing our obligations. The subject tank has been removed and soil samples revealed no evidence of contamination. We continue to work with the Division in resolving and closing the matter and do not expect the resolution including any penalties or offsetting projects to have a material impact on the business or operations.

See Note ~~11–~~10–Commitments and Contingencies under the caption “Legal Proceedings” in our notes to the unaudited condensed consolidated financial statements ~~included elsewhere in this Quarterly Report on Form 10-Q~~ for further details concerning our other legal proceedings.

There have been no material changes to the risk factors set forth in Item ~~1A. to~~1A.to Part I of our Annual Report on Form 10-K, as filed on ~~March 1, 2019,~~February 27, 2020, except as noted below ~~and except~~or to the extent factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors.

~~Technology interruptions or failures that impair access to our websites or information technology systems~~ ~~could adversely affect~~The global COVID-19 pandemic has disrupted our business ~~or operations.~~

~~The satisfactory performance, reliability~~ and availability of our web sites and our infrastructure are critical to the conduct of our business. Any system interruptions that result in the unavailability or slowness of our websites could impact our ability to market or sell admissions or other products which couldwill adversely affect our results of operations ~~and/or result in~~and various other factors beyond our control could materially adversely affect our financial condition and results of operations.

In response to the global COVID-19 pandemic, quarantines, significant travel warnings and restrictions, social distancing rules, curfews and shelter-in-place have been implemented and may be re-implemented pursuant to federal, state and local orders and mandates. Effective March 16, 2020, we temporarily closed all of our theme parks and therefore, did not generate revenue from our parks during the closure period. Although some of our parks have been permitted to re-open with limited capacity, the extent and duration of any negative ~~publicity. We have in~~impacts over the ~~past experienced, or may in~~longer term remain uncertain and dependent on future developments that cannot be accurately predicted at this time. It is also impossible to predict the ~~future experience, temporary system interruptions for a variety~~severity and transmission rate of ~~reasons,~~COVID-19, the extent and effectiveness of containment actions taken, including ~~security incidents, viruses, telecommunication~~mobility restrictions, and the impact of these and other ~~network failures, power failures, programming errors, undetected bugs, design faults, data corruption, denial-of-service attacks, legacy systems, poor scalability~~factors on travel and consumer behavior. It is possible that the spread of the COVID-19, the resulting economic and societal impact, social distancing or ~~network overload~~other safety requirements existing today or that may be implemented will reduce our guests’ interest or ability to visit our theme parks. The COVID-19 pandemic and the actions taken in response, pose the risk that we or our employees, contractors, suppliers, and other business partners may be prevented from conducting business activities for an ~~overwhelming number~~unknown period of ~~traffic trying~~time. Restrictions on travel, quarantines and other measures imposed in response to ~~reach our websites at~~ the ~~same time. Even~~COVID-19 pandemic, as well as ongoing concern regarding the virus’ potential impact, have had and will likely continue to have a ~~disruption as brief as a few minutes~~negative effect on economies and financial markets, including supply chain shortages and additional business disruptions. Any such impacts could have a material adverse effect on our business.

In response to our park closures, we took steps to minimize our cash outflows. Some of these measures included, but are not limited to (i) deferring all capital projects other than a minimal amount of essential projects and maintenance; (ii) eliminating or deferring non-essential operating expenses while the parks were closed; (iii) eliminating substantially all advertising and marketing spend for closed parks; (iv) temporarily reducing Executive Officer base pay by 20%; (v) working with certain vendors and other business partners to manage, defer, and/or abate certain costs during the closure period; and (vi) initially furloughing approximately 95% of our employees upon closing all of our parks. It is unclear if any of these actions could have a lasting negative impact on our online activities and could result in a loss of revenue. For example, our websites recently experienced slow performance and unavailability for some guests. Although these issues were short-lived and did not have a material impactrelationships with vendors, current and/or future business partners or ambassadors or if the parks are forced to our results of operations, prolonged or repeat system interruptions and network failures could adversely impact our operations as a significant portion of our admissions revenues are from ticket purchases made online.

Additionally, damage, failures or interruptions to our information technology systems may require a significant investment to update, remediate or replace with alternate systems, and we may suffer interruptions in our operations as a result. In addition, costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems could also disrupt or reduce the efficiency of our operations and/or result in negative publicity. Any material interruptions or failures in our systems, including those that may result from our failure to adequately develop, implement and maintain a robust disaster recovery plan and backup systems could severely affect our ability to conduct normal business operations and, as a result, could adversely affect our business operations and financial performance.

~~We may not realize the benefits of developments, restructurings, acquisitions or other strategic initiatives.~~

Our business strategy may include selective expansion, both domestically and internationally, through acquisitions of assets or other strategic initiatives, such as joint ventures, that allow us to profitably expand our business and leverage our brands. For example, in 2016 we announced our partnership with Miral Asset Management LLC to develop SeaWorld Abu Dhabi, a first-of-its-kind marine life themed park on Yas Island. In addition, on March 24, 2017, we entered into a Park Exclusivity and Concept Design Agreement and a Center Concept & Preliminary Design Support Agreement with an affiliate of ZHG Group to provide design, support and advisory services for various potential projects and granting exclusive rights in China, Taiwan, Hong Kong and Macau. These agreements were terminated in April 2019 as a result of the contract party’s defaulting on the payment of required amounts under these agreements. There is no assurance that the Miral partnership or our other strategic initiatives will be successful.

Any international transactions and partnerships are subject to additional risks, including foreign and U.S. regulations on the import and export of animals, the impact of economic fluctuations in economies outside of the United States, difficulties and costs of staffing and managing foreign operations due to distance, language and cultural differences, as well as political instability and lesser degree of legal protection in certain jurisdictions, currency exchange fluctuations and potentially adverse tax consequences of overseas operations. In addition, the success of any acquisition depends on effective integration of acquired businesses and assets into our operations, which is subject to risks and uncertainties, including realization of anticipated synergies and cost savings, the ability to retain and attract personnel, the diversion of management’s attention from other business concerns, and undisclosed or potential legal liabilities of acquired businesses or assets.

We are executing on a strategic plan to grow revenue and Adjusted EBITDA and, from time to time, identify and execute on cost reduction opportunities and take other actions designed to achieve operational efficiencies and process improvements. For example, we are in the process of evaluating and streamlining our organizational structure. There is no assurance thatclose again whether we will be able to achieve similar cost savings. We have been sued and may face additional lawsuits or damage to our reputation related to actions taken or not taken as a result of COVID-19 from current and/or ~~sustain the cost savings, grow our business, realize~~ future vendors, customers and/or ~~sustain operational efficiencies or achieve other benefits that we may initially expect. In addition, such actions may result in various one-time costs and temporary operational inefficiencies and~~ambassadors. The lawsuits could negatively impact our cash flows and results of operations. Also, another prolonged closure of our parks could materially impact our results, operations and financial condition. Additionally, due to the uncertainties created by the COVID-19 pandemic and the related impact on our business, we have made or may make future employment or restructuring decisions which may subject us to increased risks related to employment matters, including increased litigation and/or claims for severance or other benefits.

In March 2020, we increased borrowings under our revolving credit facility as a precautionary measure to increase our cash position and ~~employment relationships during transitional periods. See~~in April 2020 we issued $227.5 million aggregate principal amount of 8.750% first-priority senior secured notes due 2025 to raise capital and provide additional liquidity for a sustained period and to preserve financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic. Additionally on April 19, 2020, we entered into an amendment to our Amended Credit Agreement to amend certain provisions therein (“Amendment No. 11”). As of June 30, 2020, total unrestricted cash and cash equivalents was approximately $375.7 million. On July 29, 2020, we entered into another amendment to our Amended Credit Agreement to further ~~discussion~~amend certain provisions therein (“Amendment No. 12”). Pursuant to Amendment No. 12, we will be exempt from complying with our first lien secured leverage ratio covenant through the end of 2021 and will be required to comply with a quarterly minimum liquidity coverage test (defined as unrestricted cash and cash equivalents and available commitments under the ~~caption~~

~~“Management’s Discussion and Analysis~~Revolving Credit Facility) of ~~Financial Condition and Results~~not less than $75.0 million until the earlier of ~~Operations”~~ ~~included elsewhere in this Quarterly report on Form 10-Q.~~

~~Affiliates~~September 30, 2022 or the date we elect to use actual Adjusted EBITDA for purposes of ~~Hill Path Capital LP~~calculating our financial maintenance covenant. There is no certainty we will be able to ~~significantly influence~~meet this test and failure to meet this test could result in events of default under our ~~decisions and their interests may conflict with ours or yours in the future.~~

~~On May 27, 2019, Hill Path Capital LP and certain of its affiliates (“Hill Path”) agreed to purchase in the aggregate, 13,214,000 shares~~debt agreements, acceleration of our ~~common stock (the “HP Purchase”). As described more fully in~~outstanding debt and materially affect our ~~Form 8-K dated May 27, 2019,~~financial condition and results of operations. On August 5, 2020, we ~~concurrently entered into~~closed on a second-priority senior secured notes offering of $500.0 million 9.500% second-priority senior secured notes due 2025 which provided us with net proceeds of approximately $489.7 million.

We cannot be certain that we will continue to have access to sufficient liquidity to meet our obligations for the ~~Stockholders Agreement,~~time required to allow our cash generating operations to normalize. The effect of COVID-19 on the ~~Registration Rights Agreement~~capital markets could significantly impact our cost of borrowing and the ~~Undertaking Agreement (collectively,~~availability of capital to us. COVID-19 also makes it more challenging for management to estimate the “HP Agreements”) with Hill Path in connection with the HP Purchase. On May 29, 2019, Hill Path filed with the SEC a Schedule 13D/A (the “Schedule 13D/A”) reporting that such persons had accumulated a total of 27,205,306 sharesfuture performance of our ~~common stock, which represents approximately 34.6%~~business or our liquidity needs, particularly over the near to medium term. We may not be able to obtain additional liquidity and any relief provided by lenders, governmental agencies, and business partners may not be adequate and may include onerous terms. If we are unable to generate revenues from our parks due to a prolonged period of closure or experience significant declines in business volumes upon reopening, our results, operations and financial condition may be negatively impacted.

We had never previously experienced a complete cessation of our ~~total outstanding shares~~operations, and as a consequence, our ability to be predictive regarding the impact of ~~common stock as of July 31, 2019.~~such a cessation on our operations and future prospects is uncertain. In addition, the ~~Hill Path Schedule 13D filed~~magnitude, duration and speed of the global pandemic is uncertain. As a consequence, we cannot estimate the impact on ~~May 1, 2017,~~our business, financial condition or near or longer-term financial or operational results with certainty. As we continue to make progress in the reopening of our theme parks, we may face additional costs and obstacles in complying with any new federal, state or local regulations or industry best practices established in response to the COVID-19 pandemic, re-integrating our furloughed employees and attracting guests who may not wish to travel or visit our theme parks for a prolonged period. In addition, any measures we take or may be required to take such as ~~amended states, among other things, that Hill Path~~limiting capacity in our theme parks, enforcing social distancing requirements and / or requiring masks, may ~~suggest~~negatively impact attendance at our theme parks. It is not possible to predict what steps, if any, we may be required to take if the COVID-19 pandemic worsens. It is possible we could be forced to close some or all of our parks again. Any of these factors could have a material adverse effect on our revenue and results of operations. A single case of COVID-19 in a theme park could result in additional costs and further closures. If we do not respond appropriately to the pandemic, or if customers do not perceive our response to be adequate, we could suffer damage to our reputation, which could significantly adversely affect our business. Furthermore, the effects of the pandemic on our business could be long-lasting and could continue to have adverse effects, some of which may be significant, and which may indefinitely impact our ability to operate our business in the traditional, pre-pandemic manner.

Our business also could be significantly affected should the disruptions caused by COVID-19 lead to systemic changes in consumer behavior. The outbreak of COVID-19 has significantly increased economic uncertainty. It is possible that the current outbreak or continued spread of COVID-19 could cause a global recession, which could further adversely affect our business, ~~operations, capital structure, capital allocation, corporate governance~~ and ~~other strategic matters.~~

~~Under the HP Agreements, we agreed to appoint up to three Hill Path director designees (“Hill Path Designees”) to our Board of Directors of which two directors~~such adverse effects may be ~~affiliated with Hill Path and,~~material.

Our properties are subject to the ~~independence standards~~risk that operations could be halted for a temporary or extended period of time. If there is a prolonged disruption at any of our properties, our business, financial condition, results of operations and prospects will likely be materially adversely affected. Additionally, if a prolonged downturn of general economic or other conditions in the areas in which our properties are located or from which we draw our guests or prevents guests from easily coming to our properties, our business, financial condition, results of operations and prospects will be materially adversely affected.

Various other factors beyond our control could adversely affect attendance and guest spending patterns at our theme parks. These factors could also affect our suppliers, vendors, insurance carriers and other contractual counterparties. Such factors include but are not limited to:

Any one or more of these factors could adversely affect attendance, revenue and per capita spending at our theme parks, which could materially adversely affect our business, financial condition and results of operations. Fluctuations in foreign currency exchange rates impact our business. A strong dollar increases the cost for international tourists and could impact their spending. In addition, demand for our parks is highly dependent on the general environment for travel and tourism, which can be significantly adversely affected by quarantine requirements, availability of flights, closures of borders and/or extreme weather events. Any of these such events could have a material adverse effect on our business, financial condition, or results of operations. Additionally, because many of the ~~New York Stock Exchange, there shall be one Hill Path Designee on each committee~~attractions at our parks are outdoors, attendance at our parks is adversely affected by bad or extreme weather conditions and forecasts of bad or mixed weather conditions, which negatively affects our revenues and results of operations. For example, attendance at our parks in 2019 was negatively impacted by Hurricane Dorian over Labor Day weekend. Separately, in 2017 we also experienced negative impacts from weather events, particularly hurricanes, which caused park closures in Tampa and Orlando and park closures and other weather impacts in Texas and Virginia.

The COVID-19 pandemic (including governmental responses, broad economic impacts and market disruptions) has heightened the ~~Board, as determined by Hill Path and subject~~risks related to the approval of the Nominating and Corporate Governance Committee. Scott Ross, founder of Hill Path, James Chambers, a Partner at Hill Path, and Charles Koppelman, who is independent, are the Hill Path Designees. Scott Ross currently serves as Chairman of the Board and Chairman of the Compensation Committee and also servesother risk factors described in our 2019 Annual Report on the Nominating and Corporate Governance Committee and the Revenue Committee. James Chambers serves as Chairman of the Nominating and Corporate Governance Committee and also serves on the Compensation Committee and the Revenue Committee.Form 10-K.

For so long as Hill Path Designees remain on our Board, Hill Path will have influence with respect to our management, business plans and policies, including the appointment and removal of our officers, and nominees for director. In addition, for so long as Hill Path continues to own a significant percentage of our stock, Hill Path will be able to influence the composition of our Board of Directors and the approval of actions requiring stockholder approval. For example, for so long as Hill Path continues to own a significant percentage of our stock, Hill Path may be able to influence whether or not a change of control of our Company or a change in the composition of our Board of Directors occurs. The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of common stock as part of a sale of our Company and ultimately might affect the market price of our common stock.

The Company had no unregistered sales of equity securities during the ~~third~~second quarter of ~~2019.~~2020. The following table sets forth information with respect to shares of our common stock purchased by the Company during the periods indicated:

Our policy governing transactions in our securities by our directors, officers and employees permits such persons to adopt stock trading plans pursuant to Rule 10b5-1 promulgated by the SEC under the Exchange Act. Our directors, officers and employees have in the past and may from time to time establish such stock trading plans. We do not undertake any obligation to disclose, or to update or revise any disclosure regarding, any such plans and specifically do not undertake to disclose the adoption, amendment, termination or expiration of any such plans.

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

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.

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.

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)

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

Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

		Page No.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		1

PART I.	FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements

	Unaudited Condensed Consolidated Balance Sheets	3

	Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income	4

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity	5

	Unaudited Condensed Consolidated Statements of Cash Flows	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2824

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4035

Item 4.	Controls and Procedures	4136

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	4237

Item 1A.	Risk Factors	4237

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4439

Item 3.	Defaults Upon Senior Securities	4439

Item 4.	Mine Safety Disclosures	4439

Item 5.	Other Information	4440

Item 6.	Exhibits	4541

	Signatures	4643

	September 30,			December 31,
	2019			2018
	(In thousands)
Term B-5 Loans (effective interest rate of 5.04% and 5.52% at September 30, 2019 and December 31, 2018, respectively)	$	1,511,760		$	1,523,389
Revolving credit facility (effective interest rate of 4.68% and 5.17% at September 30, 2019 and December 31, 2018, respectively)		50,000			30,000
Total long-term debt		1,561,760			1,553,389
Less: discounts		(5,214	)		(6,564	)
Less: debt issuance costs		(5,369	)		(6,641	)
Less: current maturities, including revolving credit facility		(65,505	)		(45,505	)
Total long-term debt, net	$	1,485,672		$	1,494,679

		September 30,
	Classification	2019
Assets:		(In thousands)
Operating leases	Right of use assets - operating	$	142,538
Financing leases	Other assets, net		3,622
Total lease assets		$	146,160
Liabilities:
Current
Operating leases	Operating lease obligations	$	3,914
Financing leases	Other accrued liabilities		710
Noncurrent
Operating leases	Long-term operating lease obligations		125,290
Financing leases	Other liabilities		2,974
Total lease liabilities		$	132,888


☒	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


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

	Classification	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
		(In thousands)
Operating lease cost	Operating expenses	$	4,890	$	11,671
Operating lease cost	Selling, general and administrative expenses		122		395
Financing lease cost
Amortization of leased assets	Depreciation and amortization		184		552
Interest on lease liabilities	Interest expense		35		112
Net lease cost		$	5,231	$	12,730

	Operating leases
Years Ending December 31,	Land lease			Other operating leases			Total operating leases			Financing leases
	(In thousands)
Remainder of 2019	$	2,600		$	932		$	3,532		$	207
2020		10,401			3,619			14,020			825
2021		10,401			3,270			13,671			332
2022		10,401			2,273			12,674			208
2023		10,401			1,729			12,130			204
2024		10,401			1,572			11,973			201
Thereafter		244,431			2,993			247,424			2,593
Total lease payments		299,036			16,388			315,424			4,570
Less: Imputed interest		(183,512	)		(2,708	)		(186,220	)		(886	)
Present value of lease liabilities	$	115,524		$	13,680		$	129,204		$	3,684


~~Weighted average remaining lease term (years):~~
~~Operating leases~~	~~26.32~~
~~Financing leases~~	~~14.55~~
~~Weighted average discount rate:~~
~~Operating leases~~	~~8.11~~	%
~~Financing leases~~	~~3.60~~	%


Cash paid for amounts included in the measurement of lease liabilities:	(In thousands)
Operating cash flows from operating leases	$	11,738
Operating cash flows from financing leases	$	112
Financing cash flows from financing leases	$	511
Right of use assets obtained in exchange for lease obligations:
Financing leases	$	1,230
Operating leases	$	133,297

	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018			2019			2018
Derivatives in Cash Flow Hedging Relationships:	(In thousands)
Gain (loss) recognized in accumulated other comprehensive (loss) income	$	187	$	1,875		$	(5,338	)	$	17,768
Gain (loss) reclassified from accumulated other comprehensive (loss) income to interest expense	$	324	$	(301	)	$	(880	)	$	(2,535	)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Derivatives in Cash Flow Hedging Relationships:	(In thousands)
Loss recognized in accumulated other comprehensive (loss) income	$	(26	)	$	(3,572	)	$	(370	)	$	(5,525	)
Amounts reclassified from accumulated other comprehensive (loss) income to interest expense	$	1,199		$	(349	)	$	2,501		$	(1,204	)

	~~Losses on Cash Flow Hedges~~
~~Accumulated other comprehensive (loss) income:~~	~~(In thousands)~~
~~Accumulated other comprehensive income at December 31, 2018~~				$	~~2,284~~
~~Other comprehensive loss before reclassifications~~		~~(3,911~~	)
~~Amounts reclassified from accumulated other comprehensive (loss) income to interest expense~~		~~(645~~	)
~~Unrealized loss on derivatives, net of tax~~					~~(4,556~~	)
~~Accumulated other comprehensive loss at September 30, 2019~~				$	~~(2,272~~	)

	(Losses) Gains on Cash Flow Hedges
Accumulated other comprehensive (loss) income:	(In thousands)
Accumulated other comprehensive loss at December 31, 2019				$	(1,559	)
Other comprehensive loss before reclassifications		(271	)
Amounts reclassified from accumulated other comprehensive loss to interest expense		1,830
Change in other comprehensive (loss) income, net of tax					1,559
Accumulated other comprehensive (loss) income at June 30, 2020				$	—

						Performance-Vesting Restricted Awards
	Time-Vesting Restricted Awards					Bonus Performance Restricted Awards					Long-Term Incentive Performance Restricted Awards
	Shares/Units			Weighted Average Grant Date Fair Value per Award		Units			Weighted Average Grant Date Fair Value per Award		Shares/Units			Weighted Average Grant Date Fair Value per Award
Outstanding at December 31, 2018		901,704		$	17.34		560,710		$	15.06		1,155,486		$	15.82
Granted		84,179		$	27.68		229,180		$	25.81		1,281,234		$	25.92
Vested		(201,122	)	$	17.41		(327,004	)	$	15.06		(53,859	)	$	15.64
Forfeited		(172,585	)	$	15.41		(265,638	)	$	16.34		(495,384	)	$	19.33
Outstanding at September 30, 2019		612,176		$	19.28		197,248		$	25.83		1,887,477		$	21.76

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2018		764,577		$	18.05
Granted		449,326		$	25.95
Forfeited		(109,251	)	$	21.38
Expired		(8,593	)	$	18.52
Exercised		(198,437	)	$	18.03
Outstanding at September 30, 2019		897,622		$	21.60		7.55	$	4,336
Exercisable at September 30, 2019		411,309		$	18.27		5.97	$	3,309

~~Risk-free interest rate~~	~~1.52~~	%
~~Expected volatility~~ ^(a)	~~38.82~~	%
~~Expected dividend yield~~	~~0.00~~	%
~~Expected life (years)~~ ^(b)	~~6.00~~

	2019 Restructuring and other Separation Costs			2018 Restructuring Program
	(In thousands)
Liability as of December 31, 2018	$	—		$	537
Costs incurred		3,839			—
Payments made		(2,669	)		(537	)
Liability as of September 30, 2019	$	1,170		$	—

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,				Last Twelve Months Ended September 30,
	2019		2018			2019		2018		2019
	(Unaudited, in thousands)
Net income	$	98,028	$	95,988		$	113,659	$	55,841	$	102,606
Provision for income taxes		34,123		36,301			40,905		25,016		33,804
Loss on early extinguishment of debt and write-off of discounts and debt issuance costs ^(a)		—		—			—		—		8,150
Interest expense		21,463		19,500			64,063		59,974		85,003
Depreciation and amortization		40,822		41,187			120,325		119,635		161,645
Equity-based compensation expense ^(b)		1,162		5,183			8,444		18,620		11,976
Loss on impairment or disposal of assets and certain non-cash expenses^(c)		1,425		4,222			2,217		11,873		9,206
Business optimization, development and strategic initiative costs ^(d)		9,270		7,670			18,262		26,604		21,118
Certain transaction and investment costs and other taxes ^(e)		468		2,890			4,930		3,305		4,978
Other adjusting items ^(f)		136		(544	)		182		15,808		(896	)
Adjusted EBITDA ^(g)	$	206,897	$	212,397		$	372,987	$	336,676	$	437,590
Items added back to Adjusted EBITDA, after cost savings, as defined in the Amended Credit Agreement:
Estimated cost savings ^(h)											14,900
Adjusted EBITDA, after cost savings ⁽ⁱ⁾										$	452,490

	For the Three Months Ended September 30, 2018			For the Nine Months Ended September 30, 2018
	(Unaudited, in thousands)
Adjusted EBITDA (as previously defined)	$	204,852		$	322,354
Certain expenses over previous credit agreement limit ^(d)		7,670			11,604
Taxes related to other adjusting items not previously added back^(f)		(125	)		2,718
Adjusted EBITDA (as defined in the Amended Credit Agreement)	$	212,397		$	336,676

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⁾
July 1, 2019	July 30, 2019		3,024	$	29.07		—	$	100,000,000
August 1, 2019	August 31, 2019		19,097	$	27.98		—		250,000,000
September 1, 2019	September 30, 2019		1,065	$	27.49		—		250,000,000
			23,186				—	$	250,000,000

Exhibit No.		Description

~~10.1~~†*4.1		Indenture, dated as of August 5, 2020, among SeaWorld Parks & Entertainment, Inc., SeaWorld Entertainment, Inc., the other guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee and collateral agent. (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on August 5, 2020 (File No. 001-35883))
10.1*		Amendment No. 12, dated as of ~~Restricted Stock Unit Grant Notice~~July 29, 2020, to the Credit Agreement, dated as of December 1, 2009, among SeaWorld Parks & Entertainment, Inc., the several banks and ~~Restricted Stock Unit Agreement (2019 Time-Based Restricted Stock Units)~~other financial institutions or entities from time to time parties thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, JPMorgan Chase Bank, N.A., as L/C issuer and swing line lender and the other parties thereto.

~~10.2~~†10.2*		~~Employment~~Intercreditor Agreement, dated ~~November 6, 2019, between SeaWorld Entertainment, Inc.~~as of August 5, 2020, among JPMORGAN CHASE BANK, N.A., as Credit Agreement Agent, WILMINGTON TRUST, NATIONAL ASSOCIATION, as First Priority Notes Collateral Agent, each Other First Priority Lien Obligations Agent from time to time party hereto, each in its capacity as First Lien Agent, WILMINGTON TRUST, NATIONAL ASSOCIATION, solely in its capacity as Trustee and ~~Sergio Rivera (incorporated by reference~~Second Priority Collateral Agent and each collateral agent for any Future Second Lien Indebtedness from time to ~~Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on November 7, 2019 (File No. 001-35883))~~time party hereto, each in its capacity as Second Priority Agent.

10.3*		Second Lien Security Agreement, dated as of August 5, 2020, among the Grantors and Wilmington Trust, National Association, as Collateral Agent for the Secured Parties.

10.4*		Second Lien Pledge Agreement, dated as of August 5, 2020, among SeaWorld Entertainment, Inc. and Wilmington Trust, National Association, as collateral agent.

10.5*		Copyright Security Agreement, dated as of August 5, 2020, by SeaWorld Parks & Entertainment, Inc., Sea World LLC and SeaWorld Parks & Entertainment LLC, in favor of Wilmington Trust, National Association, as collateral agent.

10.6*		Patent Security Agreement, dated as of August 5, 2020, by SeaWorld Parks & Entertainment, Inc., in favor of Wilmington Trust, National Association, as collateral agent.

10.7*		Trademark Security Agreement, dated as of August 5, 2020, by SeaWorld Entertainment, Inc., Sea World LLC and SeaWorld Parks & Entertainment LLC, and in favor of Wilmington Trust, National Association, as collateral agent.
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*		Inline 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 September 30, 2019 has been formatted in Inline XBRL.

†		Identifies exhibits that consist of a management contract or compensatory plan or arrangement.
*		Filed herewith.

		SEAWORLD ENTERTAINMENT, INC.
		(Registrant)


Date: ~~November 7, 2019~~August 10, 2020		By: /s/ Elizabeth C. Gulacsy
		Elizabeth C. Gulacsy
		Chief Accounting Officer and Interim Chief Financial Officer and Treasurer
		(Principal Accounting Officer and Principal Financial Officer)