SEAWORLD ENTERTAINMENT, INC., 10-Q filed on 5/8/2019
Quarterly Report
v3.19.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2019
May 03, 2019
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2019  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q1  
Trading Symbol SEAS  
Entity Registrant Name SeaWorld Entertainment, Inc.  
Entity Central Index Key 0001564902  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Common Stock, Shares Outstanding   84,198,886
v3.19.1
Unaudited Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 51,860 $ 34,073
Accounts receivable, net 58,692 57,980
Inventories 42,724 35,814
Prepaid expenses and other current assets 19,567 18,700
Total current assets 172,843 146,567
Property and equipment, at cost 3,116,688 3,057,038
Accumulated depreciation (1,399,115) (1,365,006)
Property and equipment, net 1,717,573 1,692,032
Goodwill, net 66,278 66,278
Trade names/trademarks, net 157,975 158,343
Other intangible assets, net 120 14,120
Right of use assets-operating 145,807  
Deferred tax assets, net 30,177 23,527
Other assets, net 15,421 14,735
Total assets 2,306,194 2,115,602
Current liabilities:    
Accounts payable and accrued expenses 140,567 120,024
Current maturities of long-term debt 80,505 45,505
Operating lease obligations 4,118  
Accrued salaries, wages and benefits 19,228 20,966
Deferred revenue 151,253 101,110
Other accrued liabilities 29,065 23,066
Total current liabilities 424,736 310,671
Long-term debt, net of debt issuance costs of $6,206 and $6,641 as of March 31, 2019 and December 31, 2018, respectively 1,491,702 1,494,679
Long-term operating lease obligations 128,119  
Deferred tax liabilities, net   10,711
Other liabilities 35,217 34,347
Total liabilities 2,079,774 1,850,408
Commitments and contingencies (Note 11)
Stockholders’ Equity:    
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, no shares issued or outstanding at March 31, 2019 and December 31, 2018
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 93,748,617 and 93,400,929 shares issued at March 31, 2019 and December 31, 2018, respectively 937 934
Additional paid-in capital 664,141 663,834
Accumulated other comprehensive income 220 2,284
Accumulated deficit (185,975) (148,955)
Treasury stock, at cost (10,174,589 shares at March 31, 2019 and December 31, 2018) (252,903) (252,903)
Total stockholders’ equity 226,420 265,194
Total liabilities and stockholders’ equity $ 2,306,194 $ 2,115,602
v3.19.1
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Statement Of Financial Position [Abstract]    
Debt issuance costs $ 6,206 $ 6,641
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 100,000,000 100,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 1,000,000,000 1,000,000,000
Common stock, shares issued 93,748,617 93,400,929
Treasury stock, shares 10,174,589 10,174,589
v3.19.1
Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Net revenues:    
Total revenues $ 220,575 $ 217,166
Costs and expenses:    
Cost of food, merchandise and other revenues 17,213 17,051
Operating expenses (exclusive of depreciation and amortization shown separately below and includes equity compensation of $1,357 and $1,563 for the three months ended March 31, 2019 and 2018, respectively) 149,885 155,473
Selling, general and administrative expenses (includes equity compensation of $1,841 and $5,982 for the three months ended March 31, 2019 and 2018, respectively) 42,764 63,524
Restructuring and other separation costs 2,566 8,835
Depreciation and amortization 39,450 38,430
Total costs and expenses 251,878 283,313
Operating loss (31,303) (66,147)
Other expense, net 27 63
Interest expense 20,797 19,913
Loss before income taxes (52,127) (86,123)
Benefit from income taxes (15,107) (23,279)
Net loss (37,020) (62,844)
Other comprehensive loss:    
Unrealized (loss) income on derivatives, net of tax (2,064) 7,491
Comprehensive loss $ (39,084) $ (55,353)
Loss per share:    
Net loss per share, basic $ (0.44) $ (0.73)
Net loss per share, diluted $ (0.44) $ (0.73)
Weighted average common shares outstanding:    
Basic 83,354 86,209
Diluted 83,354 86,209
Admissions [Member]    
Net revenues:    
Total revenues $ 128,913 $ 130,003
Food, Merchandise and Other [Member]    
Net revenues:    
Total revenues $ 91,662 $ 87,163
v3.19.1
Unaudited Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Equity-based compensation expense $ 3,198 $ 7,545
Operating Expense [Member]    
Equity-based compensation expense 1,357 1,563
Selling, General and Administrative Expenses [Member]    
Equity-based compensation expense $ 1,841 $ 5,982
v3.19.1
Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Treasury Stock, at Cost [Member]
Beginning Balance at Dec. 31, 2017 $ 287,466 $ 926 $ 641,324 $ (194,837) $ (5,076) $ (154,871)
Beginning Balance, shares at Dec. 31, 2017   92,637,403        
Impact of adoption of ASU 2018-02       1,094 (1,094)  
Equity-based compensation 7,545   7,545      
Unrealized gain on derivatives, net of tax 7,491       7,491  
Vesting of restricted shares   $ 4 (4)      
Vesting of restricted shares, shares   360,092        
Shares withheld for tax withholdings (1,634) $ (1) (1,633)      
Shares withheld for tax withholdings, shares   (108,432)        
Exercise of stock options 7   7      
Exercise of stock options, shares   484        
Adjustments to previous dividend declarations 47   47      
Net loss (62,844)     (62,844)    
Ending Balance at Mar. 31, 2018 238,078 $ 929 647,286 (256,587) 1,321 (154,871)
Ending Balance, shares at Mar. 31, 2018   92,889,547        
Beginning Balance at Dec. 31, 2018 $ 265,194 $ 934 663,834 (148,955) 2,284 (252,903)
Beginning Balance, shares at Dec. 31, 2018 93,400,929 93,400,929        
Equity-based compensation $ 3,198   3,198      
Unrealized gain on derivatives, net of tax (2,064)       (2,064)  
Vesting of restricted shares   $ 4 (4)      
Vesting of restricted shares, shares   440,646        
Shares withheld for tax withholdings (3,606) $ (1) (3,605)      
Shares withheld for tax withholdings, shares   (132,886)        
Exercise of stock options $ 715   715      
Exercise of stock options, shares 39,928 39,928        
Adjustments to previous dividend declarations $ 3   3      
Net loss (37,020)     (37,020)    
Ending Balance at Mar. 31, 2019 $ 226,420 $ 937 $ 664,141 $ (185,975) $ 220 $ (252,903)
Ending Balance, shares at Mar. 31, 2019 93,748,617 93,748,617        
v3.19.1
Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss) [Member]    
Unrealized gain (loss) on derivatives, tax (benefit) expense $ (744) $ 2,774
v3.19.1
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Cash Flows From Operating Activities:    
Net loss $ (37,020) $ (62,844)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 39,450 38,430
Amortization of debt issuance costs and discounts 899 1,157
Loss on sale or disposal of assets, net 45 396
Deferred income tax benefit (16,606) (23,817)
Equity-based compensation 3,198 7,545
Changes in assets and liabilities:    
Accounts receivable (2,329) (21,218)
Inventories (6,964) (6,761)
Prepaid expenses and other current assets (628) (3,141)
Right of use assets-operating 1,189  
Accounts payable and accrued expenses 1,715 16,540
Accrued salaries, wages and benefits (1,737) 5,729
Deferred revenue 51,697 62,162
Other accrued liabilities 5,498 5,879
Operating lease obligations (1,061)  
Other assets and liabilities 342 260
Net cash provided by operating activities 37,688 20,317
Cash Flows From Investing Activities:    
Capital expenditures (47,937) (45,822)
Other investing activities 50  
Net cash used in investing activities (47,887) (45,822)
Cash Flows From Financing Activities:    
Repayments of long-term debt (3,877) (5,927)
Proceeds from draws on revolving credit facility 55,000 45,000
Repayments of revolving credit facility (20,000) (5,000)
Dividends paid to stockholders (58) (287)
Payment of tax withholdings on equity-based compensation through shares withheld (3,606) (1,634)
Exercise of stock options 715 7
Other financing activities (168)  
Net cash provided by financing activities 28,006 32,159
Change in Cash and Cash Equivalents, including Restricted Cash 17,807 6,654
Cash and Cash Equivalents, including Restricted Cash—Beginning of period 35,007 33,997
Cash and Cash Equivalents, including Restricted Cash—End of period 52,814 40,651
Supplemental Disclosures of Noncash Investing and Financing Activities    
Capital expenditures in accounts payable 49,620 32,744
Dividends declared, but unpaid $ 23 $ 136
v3.19.1
Description of the Business and Basis of Presentation
3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]  
Description of the Business and Basis of Presentation

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Description of the Business

SeaWorld Entertainment, Inc., through its wholly-owned subsidiary, SeaWorld Parks & Entertainment, Inc. (“SEA”) (collectively, the “Company”), owns and operates twelve 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).

Basis of Presentation

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 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 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 or any future period due to the seasonal nature of the Company’s operations.  Based upon historical results, the Company typically generates its highest revenues in the second and third quarters of each year and incurs a net loss in the first and fourth quarters, in part because seven of its theme parks are only open for a portion of the year.

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.

Use of Estimates

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.  Actual results could differ from those estimates.

Segment Reporting

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, as a basis for allocating resources. 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 one reportable segment.

Restricted Cash

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.

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Cash and cash equivalents

 

$

51,860

 

 

$

34,073

 

Restricted cash, included in other current assets

 

 

954

 

 

 

934

 

Total cash, cash equivalents and restricted cash

 

$

52,814

 

 

$

35,007

 

Revenue Recognition

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. The Company estimates a redemption rate using historical and forecasted growth rates and attendance trends by park for similar products.  Attendance trends factor in seasonality and are adjusted based on actual trends periodically. 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 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 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. At both March 31, 2019 and December 31, 2018, $10.0 million is included in other liabilities in the accompanying unaudited condensed consolidated balance sheets related to the Company’s international agreement, as discussed in the following section, which the Company expects to recognize 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 March 31, 2019 and December 31, 2018:   

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Deferred revenue, including long-term portion

 

$

161,253

 

 

$

111,181

 

Less: Deferred revenue, long-term portion, included in other liabilities

 

 

10,000

 

 

 

10,071

 

Deferred revenue, short-term portion

 

$

151,253

 

 

$

101,110

 

 

 

 

 

 

 

 

 

 

International Agreements

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 potential 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 $4.1 million and $3.8 million of costs incurred related to the Middle East Project are recorded in other assets in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2019 and December 31, 2018, 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 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 stages.

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”) 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, the Company terminated the ZHG Agreements for non-payment of undisputed amounts owed. For the three months ended March 31, 2019 and 2018, the Company recorded approximately $1.7 million and $1.3 million, respectively, in food, merchandise and other revenue in the accompanying unaudited condensed consolidated statements of comprehensive loss related to the ZHG Agreements. See Note 10–Related-Party Transactions for additional disclosures.

v3.19.1
Recent Accounting Pronouncements
3 Months Ended
Mar. 31, 2019
Accounting Changes And Error Corrections [Abstract]  
Recent Accounting Pronouncements

2. RECENT ACCOUNTING PRONOUNCEMENTS

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

Recently Implemented Accounting Standards

On January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) 842, Leases.  The new standard is intended to provide enhanced transparency and comparability by requiring lessees to record right of use assets and corresponding lease liabilities on the balance sheet. The new guidance requires the Company to continue to classify leases as either operating or financing, with classification affecting the pattern of expense recognition in the income statement. The Company is also required to disclose qualitative and quantitative information about leasing arrangements to enable financial statement users to assess the amount, timing and uncertainty of cash flows arising from leases. The Company adopted ASC 842 using a modified retrospective method that did not require the prior period information to be restated.  ASC 842 also provides a number of optional provisions, known as practical expedients, which companies may elect to adopt to facilitate implementation.  The Company elected a package of practical expedients which, among other items, precludes the Company from needing to reassess 1) whether any expired or existing contracts are or contain leases, 2) the lease classification of any expired or existing leases, and 3) initial direct costs for any existing leases. The Company elected not to implement the practical expedient related to hindsight to determine lease terms.  Due to the implementation of selected practical expedients, there was no cumulative effect adjustment to beginning retained earnings. See Note 7–Leases for additional disclosures.

On January 1, 2019, the Company also adopted the following Accounting Standards Updates (“ASUs”) which had no material impact on its unaudited condensed consolidated financial statements or disclosures:  

 

ASU 2018-09, Codification Improvements

 

ASU 2018-13, Fair Value Measurement (Topic 820)

 

ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract

 

ASU 2018-16, Derivatives and Hedging—Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes

During 2018, the Company adopted the following ASUs:

 

ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities - This ASU aims to improve reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and simplify the application of the hedge accounting guidance.  For cash flow and net investment hedges existing as of the adoption date, the guidance requires a cumulative-effect adjustment as of the beginning of the fiscal year that an entity adopts the amendments; however, the presentation and disclosure guidance should be applied prospectively. The impact of the adoption was not material to the Company’s unaudited condensed consolidated financial statements; as a result, no cumulative effect adjustment to beginning retained earnings was required. See Note 8Derivative Instruments and Hedging Activities for additional disclosure.  

 

ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income -  This ASU gives companies the option to reclassify to retained earnings any tax effects related to items in accumulated other comprehensive income or loss that are stranded due to the Tax Cuts and Jobs Act (the “Tax Act”). Companies are required to disclose whether or not they elected to reclassify the tax effects related to the Tax Act as well as their policy for releasing income tax effects from accumulated other comprehensive income or loss.  The Company elected to early adopt the ASU on January 1, 2018 and applied the amendments in the period of adoption. As a result, the Company reclassified $1.1 million of “stranded” tax effects of the Tax Act from accumulated other comprehensive income (loss) to accumulated deficit in the accompanying unaudited condensed consolidated balance sheet and the accompanying unaudited condensed consolidated statements of changes in stockholders’ equity.

v3.19.1
Loss per Share
3 Months Ended
Mar. 31, 2019
Earnings Per Share [Abstract]  
Loss per Share

3. LOSS PER SHARE

Loss per share is computed as follows:

 

 

 

For the Three Months Ended March 31,

 

 

 

 

2019

 

 

2018

 

 

 

 

Net Loss

 

 

Shares

 

 

Per

Share

Amount

 

 

Net Loss

 

 

Shares

 

 

Per

Share

Amount

 

 

 

 

(In thousands, except per share amounts)

 

 

Basic loss per share

 

$

(37,020

)

 

 

83,354

 

 

$

(0.44

)

 

$

(62,844

)

 

 

86,209

 

 

$

(0.73

)

 

Effect of dilutive incentive-based awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted loss per share

 

$

(37,020

)

 

 

83,354

 

 

$

(0.44

)

 

$

(62,844

)

 

 

86,209

 

 

$

(0.73

)

 

 

In accordance with the Earnings Per Share Topic of the ASC, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period (excluding treasury stock and unvested restricted stock). Shares of unvested restricted stock are eligible to receive dividends; if any, however, dividend rights will be forfeited if the award does not vest.  Accordingly, only vested shares of outstanding restricted stock are included in the calculation of basic 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 per share is determined using the treasury stock method based on the dilutive effect of unvested restricted stock and certain shares of common stock that are issuable upon exercise of stock options. There were approximately 1,893,000 and 4,495,000 potentially dilutive shares excluded from the computation of diluted loss per share during the three months ended March 31, 2019 and 2018, respectively, as their effect would have been anti-dilutive due to the Company’s net loss in those periods.  The Company’s outstanding performance-vesting restricted awards of approximately 2,295,000 and 2,730,000 as of March 31, 2019 and 2018, respectively, are considered contingently issuable shares and are excluded from the calculation of diluted loss per share until the performance measure criteria is met as of the end of the reporting period.  

v3.19.1
Income Taxes
3 Months Ended
Mar. 31, 2019
Income Tax Disclosure [Abstract]  
Income Taxes

4. INCOME TAXES

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 months ended March 31, 2019 and 2018 was 29.0% and 27.0%, respectively, and differs from the effective statutory federal income tax rate of 21.0% primarily due to state income taxes and other permanent items.

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.

v3.19.1
Other Accrued Liabilities
3 Months Ended
Mar. 31, 2019
Payables And Accruals [Abstract]  
Other Accrued Liabilities

5. OTHER ACCRUED LIABILITIES

Other accrued liabilities at March 31, 2019 and December 31, 2018, consisted of the following:

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Self-insurance reserve

 

$

6,895

 

 

$

6,895

 

Accrued property taxes

 

 

2,910

 

 

 

 

Accrued interest

 

 

1,095

 

 

 

490

 

Dividends

 

 

23

 

 

 

84

 

Other

 

 

18,142

 

 

 

15,597

 

Total other accrued liabilities

 

$

29,065

 

 

$

23,066

 

 

As of March 31, 2019 and December 31, 2018, other liabilities above include $11.5 million related to the EZPay plan legal settlement (see further discussion in Note 11–Commitments and Contingencies).  

v3.19.1
Long-Term Debt
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Long-Term Debt

6. LONG-TERM DEBT

Long-term debt, net, as of March 31, 2019 and December 31, 2018 consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Term B-5 Loans (effective interest rate of 5.50% and 5.52% at

   March 31, 2019 and December 31, 2018, respectively)

 

$

1,519,513

 

 

$

1,523,389

 

Revolving credit facility (effective interest rate of 5.16% and

   5.17% at March 31, 2019 and December 31, 2018, respectively)

 

 

65,000

 

 

 

30,000

 

Total long-term debt

 

 

1,584,513

 

 

 

1,553,389

 

Less discounts

 

 

(6,100

)

 

 

(6,564

)

Less debt issuance costs

 

 

(6,206

)

 

 

(6,641

)

Less current maturities

 

 

(80,505

)

 

 

(45,505

)

Total long-term debt, net

 

$

1,491,702

 

 

$

1,494,679

 

SEA is the borrower under the senior secured credit facilities as amended pursuant to a 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, SEA entered into a refinancing amendment, Amendment No. 9 (the “Amended Credit Agreement”).

Senior Secured Credit Facilities

As of March 31, 2019, the Senior Secured Credit Facilities consisted of $1.52 billion in Term B-5 Loans which will mature on March 31, 2024 and a $210.0 million revolving credit facility (the “Revolving Credit Facility”), of which $65.0 million was outstanding as of March 31, 2019. The outstanding balance on the Revolving Credit Facility was included in current maturities of long-term debt in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018, due to the Company’s intent to repay the borrowings within the following twelve month period.  Subsequent to March 31, 2019, SEA repaid a net of $40.0 million on the Revolving Credit Facility.

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, 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 March 31, 2019, SEA had approximately $21.3 million of outstanding letters of credit and $65.0 million outstanding on its Revolving Credit Facility leaving $123.7 million available for borrowing.

 

Restrictive Covenants

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 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.

As of March 31, 2019, SEA was in compliance with all covenants contained in the documents governing the Senior Secured Credit Facilities.

The Senior Secured Credit Facilities permit restricted payments in an aggregate amount per annum equal to the sum 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 March 31, 2019, the total net leverage ratio as calculated under the Senior Secured Credit Facilities was 3.51 to 1.00, which would result in the Company having approximately $185.0 million available capacity for restricted payments.  However, 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. 

Long-term debt at March 31, 2019 is repayable as follows, and does not include the impact of any future voluntary prepayments. The outstanding balance under the Revolving Credit Facility is included in current maturities of long-term debt in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2019.

Years Ending December 31,

 

(In thousands)

 

Remainder of 2019

 

$

76,629

 

2020

 

 

15,505

 

2021

 

 

15,505

 

2022

 

 

15,505

 

2023

 

 

15,505

 

Thereafter

 

 

1,445,864

 

Total

 

$

1,584,513

 

Interest Rate Swap Agreements

As of March 31, 2019, the Company has five interest rate swap agreements (the “Interest Rate Swap Agreements”) which effectively fix 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 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 March, June, September and December through maturity.

SEA designated the Interest Rate Swap Agreements above as qualifying cash flow hedge accounting relationships as further discussed in Note 8–Derivative Instruments and Hedging 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 $20.1 million and $24.0 million in the three months ended March 31, 2019 and 2018, respectively. Cash paid for interest in the three months ended March 31, 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.

v3.19.1
Leases
3 Months Ended
Mar. 31, 2019
Leases [Abstract]  
Leases

7. LEASES

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 to 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 loss 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 months ended March 31, 2019 were approximately $1.7 million. Upon adoption of ASC 842, the Company also reclassified a favorable lease asset net balance of $14.0 million related to the Premises from other intangible assets, net, to right of use assets-operating on the accompanying unaudited condensed consolidated balance sheet as of March 31, 2019.

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

 

 

 

 

March 31,

 

Leases

 

Classification

 

2019

 

Assets

 

 

 

(In thousands)

 

Operating leases

 

Right of use assets - operating

 

$

145,807

 

Financing leases

 

Other assets, net

 

 

3,990

 

Total lease assets

 

 

 

$

149,797

 

Liabilities

 

 

 

 

 

 

Current

 

 

 

 

 

 

Operating leases

 

Operating lease obligations

 

 

4,118

 

Financing leases

 

Other accrued liabilities

 

 

693

 

Noncurrent

 

 

 

 

 

 

Operating leases

 

Long-term operating lease obligations

 

 

128,119

 

Financing leases

 

Other liabilities

 

 

3,333

 

Total lease liabilities

 

 

 

$

136,263

 

 

 

 

 

 

December 31,

 

Leases

 

Classification

 

2018

 

Assets

 

 

 

(In thousands)

 

Favorable lease asset

 

Other intangible assets, net

 

$

13,961

 

Capital leases

 

Property and equipment, at cost

 

 

3,066

 

Capital leases, accumulated depreciation

 

Accumulated depreciation

 

 

(122

)

Total lease assets

 

 

 

 

16,905

 

Liabilities

 

 

 

 

 

 

Current

 

 

 

 

 

 

Capital leases

 

Other accrued liabilities

 

$

143

 

Noncurrent

 

 

 

 

 

 

Capital leases

 

Other liabilities

 

 

2,822

 

Total lease liabilities

 

 

 

$

2,965

 

The table below presents the lease costs and their classification on the accompanying unaudited condensed consolidated statements of comprehensive loss for the three months ended March 31, 2019:

Lease Cost

 

Classification

 

(In thousands)

 

Operating lease cost

 

Operating expenses

 

$

2,758

 

Operating lease cost

 

Selling, general and administrative expenses

 

 

137

 

Financing lease cost

 

 

 

 

 

 

Amortization of leased assets

 

Depreciation and amortization

 

 

184

 

Interest on lease liabilities

 

Interest expense

 

 

40

 

Net lease cost

 

 

 

$

3,119

 

In addition to the operating lease costs above, short term rent expense for the three months ended March 31, 2019 was approximately $0.8 million and is included in operating expenses and selling, general and administrative expenses on the accompanying unaudited condensed consolidated statements of comprehensive loss.

The table below presents the Company’s lease maturities as of March 31, 2019:

 

 

Operating leases

 

 

 

 

 

Years Ending December 31,

 

Land lease

 

 

Other operating leases

 

 

Total operating leases

 

 

Financing leases

 

 

 

(In thousands)

 

Remainder of 2019

 

$

7,801

 

 

$

3,109

 

 

$

10,910

 

 

$

622

 

2020

 

 

10,401

 

 

 

3,824

 

 

 

14,225

 

 

 

825

 

2021

 

 

10,401

 

 

 

3,478

 

 

 

13,879

 

 

 

332

 

2022

 

 

10,401

 

 

 

2,497

 

 

 

12,898

 

 

 

208

 

2023

 

 

10,401

 

 

 

1,954

 

 

 

12,355

 

 

 

204

 

2024

 

 

10,401

 

 

 

1,740

 

 

 

12,141

 

 

 

201

 

Thereafter

 

 

244,431

 

 

 

2,993

 

 

 

247,424

 

 

 

2,593

 

Total lease payments

 

 

304,237

 

 

 

19,595

 

 

 

323,832

 

 

 

4,985

 

Less: Imputed Interest

 

 

(188,224

)

 

 

(3,371

)

 

 

(191,595

)

 

 

(959

)

Present value of lease liabilities

 

$

116,013

 

 

$

16,224

 

 

$

132,237

 

 

$

4,026

 

Operating lease payments include approximately $8.2 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:

Years Ending December 31,

 

Operating leases

 

 

Financing leases

 

 

 

(In thousands)

 

2019

 

$

16,578

 

 

$

231

 

2020

 

 

14,179

 

 

 

226

 

2021

 

 

13,111

 

 

 

220

 

2022

 

 

11,416

 

 

 

208

 

2023

 

 

10,479

 

 

 

204

 

Thereafter

 

 

265,234

 

 

 

2,794

 

Total lease payments

 

$

330,997

 

 

 

3,883

 

Less: Interest

 

 

 

 

 

 

(918

)

Total principal payable on financing leases

 

 

 

 

 

$

2,965

 

The table below presents the weighted average remaining lease terms and applicable discount rates as of March 31, 2019:

Lease term and discount rate

 

 

 

 

Weighted average remaining lease term (years)

 

 

 

 

Operating leases

 

 

26.41

 

Financing leases

 

 

14.19

 

Weighted average discount rate

 

 

 

 

Operating leases

 

 

8.10

%

Financing leases

 

 

4.19

%

The table below presents the cash flows and supplemental information associated with the Company’s leasing activities for the three months ended March 31, 2019:

Other Information

 

(In thousands)

 

Operating cash flows from operating leases

 

$

2,764

 

Operating cash flows from financing leases

 

$

40

 

Financing cash flows from financing leases

 

$

168

 

Right of use assets obtained in exchange for financing lease obligations

 

$

1,230

 

Right of use assets obtained in exchange for operating lease obligations

 

$

133,297

 

 

All long-lived assets, including right to 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.

v3.19.1
Derivative Instruments and Hedging Activities
3 Months Ended
Mar. 31, 2019
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities

8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

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 the use of derivative financial instruments. Specifically, the Company enters 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 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.

As of March 31, 2019 and December 31, 2018, the Company did not have any derivatives outstanding that were not designated in hedge accounting relationships.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. During the three months ended March 31, 2019 and 2018, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.

As of March 31, 2019, the Company has five Interest Rate Swap Agreements that mature on May 14, 2020, which effectively fix the interest rate on LIBOR-indexed interest payments associated with $1.0 billion of SEA’s outstanding long-term debt.  

The interest rate swap agreements are 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 recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, the Company estimates that an additional $0.5 million will be reclassified as a reduction to interest expense.

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

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 as of March 31, 2019 and December 31, 2018:

 

 

  

 

Asset Derivatives

 

 

Asset Derivatives

 

 

 

As of March 31, 2019

 

 

As of December 31, 2018

 

 

 

Balance Sheet

Location

 

Fair Value

 

 

Balance Sheet

Location

 

Fair Value

 

Derivatives designated as hedging instruments:

 

(In thousands)

 

Interest rate swap agreements

 

Other assets

 

$

301

 

 

Other assets

 

$

3,109

 

Total derivatives designated as hedging instruments

 

 

 

$

301

 

 

 

 

$

3,109

 

 

Tabular Disclosure of the Effect of Derivative Instruments on the Statements of Comprehensive Loss

The table below presents the pretax effect of the Company’s derivative financial instruments in the unaudited condensed consolidated statements of comprehensive loss for the three months ended March 31, 2019 and 2018:

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

Derivatives in Cash Flow Hedging Relationships:

 

(In thousands)

 

(Loss) gain related to effective portion of derivatives recognized in accumulated other comprehensive loss

 

$

(1,953

)

 

$

12,116

 

Loss related to effective portion of derivatives reclassified from accumulated other comprehensive loss to interest expense

 

$

(855

)

 

$

(1,851

)

 

Credit Risk-Related Contingent Features

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.

Changes in Accumulated Other Comprehensive Income (Loss)

The following table reflects the changes in accumulated other comprehensive income (loss) for the three months ended March 31, 2019, net of tax: 

Accumulated other comprehensive income (loss) (In thousands):

 

 

 

 

 

Income (Losses) on

Cash Flow Hedges

 

Accumulated other comprehensive income at December 31, 2018

 

 

 

 

 

$

2,284

 

Other comprehensive loss before reclassifications

 

 

(1,435

)

 

 

 

 

Amounts reclassified from accumulated other comprehensive income to interest expense

 

 

(629

)

 

 

 

 

Unrealized loss on derivatives, net of tax

 

 

 

 

 

 

(2,064

)

Accumulated other comprehensive income at March 31, 2019

 

 

 

 

 

$

220

 

v3.19.1
Fair Value Measurements
3 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements

9. FAIR VALUE MEASUREMENTS

Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement is required to be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity.  The standard describes three levels of inputs that may be used to measure fair value:  

Level 1- Quoted prices for identical instruments in active markets.

Level 2- Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.  

Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company has determined that the majority of the inputs used to value its derivative financial instruments using the income approach fall within Level 2 of the fair value hierarchy. The Company uses 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 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 is not considered a significant input and the derivatives are 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 as of March 31, 2019 and December 31, 2018. The fair value of the term loans as of March 31, 2019 and December 31, 2018 approximate their carrying value, excluding unamortized debt issuance costs and discounts, due in part to the variable nature of the underlying interest rates and the frequent intervals at which such interest rates are reset.

There were no transfers between Levels 1, 2 or 3 during the three months ended March 31, 2019.  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 March 31, 2019:

 

Quoted Prices in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Markets

 

 

Significant

 

 

 

 

 

 

 

 

 

 

for Identical

 

 

Other

 

 

Significant

 

 

 

 

 

 

Assets and

 

 

Observable

 

 

Unobservable

 

 

Balance at

 

 

Liabilities

 

 

Inputs

 

 

Inputs

 

 

March 31,

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

2019

 

Assets:

(In thousands)

 

Derivative financial instruments (a)

$

 

 

$

301

 

 

$

 

 

$

301

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term obligations (b)

$

 

 

$

1,584,513

 

 

$

 

 

$

1,584,513

 

(a)

Reflected at fair value in the unaudited condensed consolidated balance sheet as other assets of $0.3 million as of March 31, 2019.

(b)

Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $80.5 million and long-term debt of $1.492 billion as of March 31, 2019.

There were no 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 liabilities measured on a recurring basis as of December 31, 2018:

 

Quoted Prices in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Markets

 

 

Significant

 

 

 

 

 

 

 

 

 

 

for Identical

 

 

Other

 

 

Significant

 

 

 

 

 

 

Assets and

 

 

Observable

 

 

Unobservable

 

 

Balance at

 

 

Liabilities

 

 

Inputs

 

 

Inputs

 

 

December 31,

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

2018

 

Assets:

(In thousands)

 

Derivative financial instruments (a)

$

 

 

$

3,109

 

 

$

 

 

$

3,109

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term obligations (b)

$

 

 

$

1,553,389

 

 

$

 

 

$

1,553,389

 

(a)

Reflected at fair value in the unaudited condensed consolidated balance sheet as other assets of $3.1 million as of December 31, 2018.

(b)

Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $45.5 million and long-term debt of $1.495 billion as of December 31, 2018.

 

v3.19.1
Related-Party Transactions
3 Months Ended
Mar. 31, 2019
Related Party Transactions [Abstract]  
Related-Party Transactions

10. RELATED-PARTY TRANSACTIONS

On March 24, 2017, the Company entered into the ZHG Agreements with Zhonghong Holding, an affiliate of Zhonghong Zhuoye Group Co., Ltd., who at the time owned approximately 21% of the outstanding shares of the Company.  See Note 1Description of Business and Basis of Presentation for further details.  In April 2019, the Company terminated the ZHG Agreements for non-payment of undisputed amounts owed. For the three months ended March 31, 2019 and 2018, the Company recorded approximately $1.7 million and $1.3 million, respectively, in food, merchandise and other revenue in the accompanying unaudited condensed consolidated statements of comprehensive loss related to the ZHG Agreements.  

In a Schedule 13D filed on May 8, 2017, Sun Wise (UK), Co., Ltd, a private limited company incorporated under the laws of England and Wales and an affiliate to the ZHG Group (“SunWise”), reported beneficial ownership of 19,452,063 shares (the “Pledged Shares”) of the Company’s common stock, as well as its pledge of such shares related to certain loan obligations of SunWise.  Subsequent to March 31, 2019, Lord Central Opportunity V Limited, as security agent (the “Security Agent”) for PA Eminent Opportunity VI Limited (a controlled affiliate of PAG (f/k/a Pacific Alliance Group) and China Huarong International Holdings Limited (together, the “Lenders”), advised the Company that the Lenders have notified SunWise of a default under its loan obligations, the Lenders have foreclosed on the Pledged Shares and, accordingly, the Pledged Shares have been transferred to the name of the Security Agent (the “Transfer”).

v3.19.1
Commitments and Contingencies
3 Months Ended
Mar. 31, 2019
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

11. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Securities Class Action Lawsuit

On September 9, 2014, 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 Company, the Chairman of the Company’s Board, certain of its executive officers and Blackstone.  On February 27, 2015, Court-appointed Lead Plaintiffs, Pensionskassen For Børne- Og Ungdomspædagoger 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”), filed an amended complaint against the Company, the Chairman of the Company’s Board, 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, the Company and the other defendants filed motions 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, which was denied on 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.  The trial is currently scheduled for September 10, 2019. The Company believes that the class action 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 el v. SeaWorld Entertainment, Inc. et el, 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 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.  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. 

Shareholder Derivative Lawsuit

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

On March 30, 2015, the plaintiff filed an amended complaint against the same set of defendants.  The amended complaint alleges, among other things, that the defendants breached their fiduciary duties, aided and abetted breaches of fiduciary duties, violated Florida Blue Sky laws and were unjustly enriched by (i) including materially false and misleading information in the prospectus and registration statements; and (ii) causing the Company to repurchase certain shares 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.

Consumer Lawsuit

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 not file a motion for class certification.  The case is no longer a class action.  All three named plaintiffs continue to have claims for individual restitution in a nominal amount and injunctive relief. Trial is currently scheduled for October 2019.  A court-mandated mediation is scheduled for May 17, 2019.  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 these lawsuits.

EZPay Plan Class Action Lawsuit

On December 3, 2014, a purported class action lawsuit was filed in the United States District Court for the Middle District of Florida, Tampa Division against SeaWorld Parks & Entertainment, Inc. The case, captioned Jason Herman, Joey Kratt, and Christina Lancaster, as individuals and on behalf 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, 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. On April 29, 2019, the Court entered an order approving the final settlement.  The Company has accrued $11.5 million related to this settlement in other accrued liabilities as of March 31, 2019 and December 31, 2018 on the accompanying unaudited condensed consolidated balance sheet.

Other Matters

The Company is a party to various other claims and legal proceedings arising in the normal course of business. In addition, from time to time the Company is subject to audits, inspections and investigations by, or receives requests for information from, various federal and state regulatory agencies, including, but not limited to, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (“APHIS”), the U.S. Department of Labor’s Occupational Safety and Health Administration (“OSHA”), the California Occupational Safety and Health Administration (“Cal-OSHA”), the Florida Fish & Wildlife Commission (“FWC”), the Equal Employment Opportunity Commission (“EEOC”), the Internal Revenue Service (“IRS”) the U.S. Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”).

Other than those matters discussed above, from time to time, various parties also bring other lawsuits against the Company. Matters where an unfavorable outcome to the Company is probable and which can be reasonably estimated are accrued. Such accruals, which are not material for any period presented, are based on information known about the matters, the Company’s estimate of the outcomes of such matters, and the Company’s experience in contesting, litigating and settling similar matters. Matters that are considered reasonably possible to result in a material loss are not accrued for, but an estimate of the possible loss or range of loss is disclosed, if such amount or range can be determined. At this time, management does not expect any such known claims, legal proceedings or regulatory matters to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

License Commitments

On May 16, 2017, SEA entered into a License Agreement (the “License Agreement”) with Sesame Workshop (“Sesame”), a New York not-for-profit corporation.  SEA’s principal commitments pursuant to the License Agreement include: (i) opening a new Sesame Place theme 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 minimum annual capital and marketing thresholds; and (iv) providing support for agreed upon sponsorship and charitable initiatives.  As of March 31, 2019, the Company estimates the combined remaining obligations for these commitments could be up to approximately $60.0 million over the remaining term of the agreement.  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, the Company opened a new Sesame Land in SeaWorld Orlando.

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.

v3.19.1
Equity-Based Compensation
3 Months Ended
Mar. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Equity-Based Compensation

12. EQUITY-BASED COMPENSATION

In accordance with ASC 718, Compensation-Stock Compensation, the Company measures the cost of employee services rendered in exchange for share-based compensation based upon the grant date fair market value.  The cost is recognized over the requisite service period, which is generally the vesting period unless service or performance conditions require otherwise.  The Company recognizes the impact of forfeitures as they occur.  The Company has granted stock options, time-vesting restricted shares and units and performance-vesting restricted shares and units.  

Total equity compensation expense was $3.2 million and $7.5 million for the three months ended March 31, 2019 and 2018, respectively.  Equity compensation expense for the three months ended March 31, 2018 includes approximately $4.5 million related to certain equity awards which were accelerated to vest in the first quarter of 2018 in connection with the departure of certain executives as required by their respective employment agreements.  See Note 14–Restructuring and Other Separation Costs for further details.  Equity compensation expense is included in selling, general and administrative expenses and in operating expenses in the accompanying unaudited condensed consolidated statements of comprehensive loss.  

The activity related to the Company’s time-vesting and performance-vesting awards during the three months ended March 31, 2019 is as follows:

 

 

 

 

 

 

 

 

 

 

Performance-Vesting Restricted shares/units

 

 

 

Time-Vesting

Restricted shares/units

 

 

Bonus Performance

Restricted units

 

 

Long-Term

Incentive

Performance

Restricted shares/units

 

 

 

Shares/Units

 

 

Weighted

Average

Grant Date

Fair

Value per

Share/Unit

 

 

Units

 

 

Weighted

Average

Grant Date

Fair

Value per

Unit

 

 

Shares/Units

 

 

Weighted

Average

Grant Date

Fair

Value per

Share/Unit

 

Outstanding at December 31, 2018

 

 

901,704

 

 

$

17.34

 

 

 

560,710

 

 

$

15.06

 

 

 

1,155,486

 

 

$

15.82

 

Granted

 

 

47,772

 

 

$

25.70

 

 

 

224,928

 

 

$

25.70

 

 

 

1,233,742

 

 

$

25.70

 

Vested

 

 

(87,079

)

 

$

17.12

 

 

 

(319,868

)

 

$

15.06

 

 

 

(27,877

)

 

$

15.24

 

Forfeited

 

 

(121,518

)

 

$

16.33

 

 

 

(246,678

)

 

$

15.32

 

 

 

(285,428

)

 

$

18.11

 

Outstanding at March 31, 2019

 

 

740,879

 

 

$

18.07

 

 

 

219,092

 

 

$

25.70

 

 

 

2,075,923

 

 

$

21.39

 

 

The activity related to the Company’s stock option awards during the three months ended March 31, 2019 is as follows:

 

 

 

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

 

 

430,390

 

 

$

25.70

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(55,379

)

 

$

19.36

 

 

 

 

 

 

 

 

 

Expired

 

 

(8,593

)

 

$

18.52

 

 

 

 

 

 

 

 

 

Exercised

 

 

(39,928

)

 

$

17.90

 

 

 

 

 

 

 

 

 

Outstanding at March 31, 2019

 

 

1,091,067

 

 

$

21.00

 

 

 

7.85

 

 

$

5,188

 

Exercisable at March 31, 2019

 

 

556,676

 

 

$

18.28

 

 

 

6.47

 

 

$

4,163

 

The weighted average grant date fair value of stock options granted during the three months ended March 31, 2019 was $8.45. Key weighted-average assumptions utilized in the Black-Scholes Option Pricing Model for stock options granted during the three months ended March 31, 2019 were:

Risk-free interest rate

 

 

2.48

%

Expected volatility (a)

 

 

28.50

%

Expected dividend yield

 

 

0.00

%

Expected life (years) (b)

 

 

6.00

 

(a)

Due to the Company’s limited history as a public company, the volatility for the Company’s stock at the date of each grant was estimated using the average volatility calculated for a peer group, which is based upon daily price observations over the estimated term of options granted.

(b)

The expected life was estimated using the simplified method, as the Company does not have sufficient historical exercise data due to the limited period of time its common stock has been publicly traded.

 

Omnibus Incentive Plan

The Company has reserved 15,000,000 shares of common stock for issuance under its Omnibus Incentive Plan (the “Omnibus Incentive Plan”), of which approximately 8,520,000 shares are available for future issuance as of March 31, 2019.

Bonus Performance Restricted Awards  

During the three months end March 31, 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 ended 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 (“Fiscal 2018”), under which certain employees were eligible to vest in Bonus Performance Restricted Units based upon the Company’s achievement of certain performance goals with respect to Fiscal 2018.  Based on the Company’s actual Fiscal 2018 results, a portion of these Bonus Performance Restricted Units vested in the three months ended March 31, 2019 and the remaining forfeited in accordance with their terms.

Long-Term Incentive Awards

During the three months ended March 31, 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 three months ended March 31, 2019.  The Company does not expect additional Long-Term Incentive Awards to be granted to these employees until the earlier of 2022 or in the year when the Company’s three-year performance goal is achieved, if sooner than fiscal year 2021.    

Long-Term Incentive Options

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.

Long-Term Incentive Performance Restricted Units

The Long-Term Incentive Performance Restricted Units are expected to vest following the end of the three-year performance period beginning on January 1, 2019 and ending on December 31, 2021 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.

Long-Term Incentive Time Restricted Units

During the three months ended March 31, 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.

Other

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 three months ended March 31, 2019, a portion of the previously granted long-term incentive performance restricted shares related to completed performance periods vested, with the remainder forfeiting in accordance with their terms.  The remaining outstanding long-term incentive performance restricted shares are eligible to vest based upon the Company’s achievement of pre-established performance goals for the respective performance period, as defined. 

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 considered probable of vesting as of March 31, 2019; therefore, equity compensation expense has been recorded 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 at such subsequent date.  

v3.19.1
Stockholders' Equity
3 Months Ended
Mar. 31, 2019
Equity [Abstract]  
Stockholders' Equity

13. STOCKHOLDERS’ EQUITY

As of March 31, 2019, 93,748,617 shares of common stock were issued in the accompanying unaudited condensed consolidated balance sheet, which excludes 627,989 unvested shares of common stock and 2,407,905 unvested restricted stock units held by certain participants in the Company’s equity compensation plans (see Note 12–Equity-Based Compensation) and includes 10,174,589 shares of treasury stock held by the Company.

Share Repurchase Program

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, which is the remaining authorization as of March 31, 2019.  There were no share repurchases under the Share Repurchase Program during the three months ended March 31, 2019 or 2018.

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.

v3.19.1
Restructuring and Other Separation Costs
3 Months Ended
Mar. 31, 2019
Restructuring And Related Activities [Abstract]  
Restructuring and Other Separation Costs

14. RESTRUCTURING AND OTHER SEPARATION COSTS

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 months ended March 31, 2019, the Company recorded approximately $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 and other separation costs in the accompanying unaudited condensed consolidated statements of comprehensive loss.  

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 year ended December 31, 2018, the Company recorded approximately $5.5 million in pre-tax restructuring charges primarily related to severance and other termination benefits, which is included in restructuring and other separation costs in the accompanying unaudited condensed consolidated statements of comprehensive loss. The Company will not incur any additional costs associated with the 2018 Restructuring Program as all continuing service obligations were completed as of December 31, 2018.

Related activity for the three months ended March 31, 2019 was as follows:

 

 

 

2019 Restructuring and other Separation Costs

 

 

2018 Restructuring Program

 

 

 

(In thousands)

 

Liability as of December 31, 2018

 

$

 

 

$

537

 

Costs incurred

 

 

2,566

 

 

 

 

Payments made

 

 

 

 

 

(159

)

Liability as of March 31, 2019

 

$

2,566

 

 

$

378

 

 

The remaining liability as of March 31, 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.

Other

For the three months ended March 31, 2018, restructuring 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 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 the first quarter of 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 loss for the three months ended March 31, 2018.

Additionally, during the three months ended March 31, 2018, certain unvested 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 non-cash equity compensation expense of approximately $4.5 million during the three months ended March 31, 2018, which is included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of comprehensive loss.  See Note 12–Equity-Based Compensation for further details.

v3.19.1
Description of the Business and Basis of Presentation (Policies)
3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]  
Description of the Business

Description of the Business

SeaWorld Entertainment, Inc., through its wholly-owned subsidiary, SeaWorld Parks & Entertainment, Inc. (“SEA”) (collectively, the “Company”), owns and operates twelve 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).

Basis of Presentation

Basis of Presentation

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 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 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 or any future period due to the seasonal nature of the Company’s operations.  Based upon historical results, the Company typically generates its highest revenues in the second and third quarters of each year and incurs a net loss in the first and fourth quarters, in part because seven of its theme parks are only open for a portion of the year.

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.

Use of Estimates

Use of Estimates

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.  Actual results could differ from those estimates.

Segment Reporting

Segment Reporting

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, as a basis for allocating resources. 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 one reportable segment.

Restricted Cash

Restricted Cash

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.

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Cash and cash equivalents

 

$

51,860

 

 

$

34,073

 

Restricted cash, included in other current assets

 

 

954

 

 

 

934

 

Total cash, cash equivalents and restricted cash

 

$

52,814

 

 

$

35,007

 

Revenue Recognition

Revenue Recognition

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. The Company estimates a redemption rate using historical and forecasted growth rates and attendance trends by park for similar products.  Attendance trends factor in seasonality and are adjusted based on actual trends periodically. 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 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 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. At both March 31, 2019 and December 31, 2018, $10.0 million is included in other liabilities in the accompanying unaudited condensed consolidated balance sheets related to the Company’s international agreement, as discussed in the following section, which the Company expects to recognize 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 March 31, 2019 and December 31, 2018:   

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Deferred revenue, including long-term portion

 

$

161,253

 

 

$

111,181

 

Less: Deferred revenue, long-term portion, included in other liabilities

 

 

10,000

 

 

 

10,071

 

Deferred revenue, short-term portion

 

$

151,253

 

 

$

101,110

 

 

 

 

 

 

 

 

 

 

International Agreements

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 potential 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 $4.1 million and $3.8 million of costs incurred related to the Middle East Project are recorded in other assets in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2019 and December 31, 2018, 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 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 stages.

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”) 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, the Company terminated the ZHG Agreements for non-payment of undisputed amounts owed. For the three months ended March 31, 2019 and 2018, the Company recorded approximately $1.7 million and $1.3 million, respectively, in food, merchandise and other revenue in the accompanying unaudited condensed consolidated statements of comprehensive loss related to the ZHG Agreements. See Note 10–Related-Party Transactions for additional disclosures.

Recently Issued Accounting Pronouncements

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

Recently Implemented Accounting Standards

On January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) 842, Leases.  The new standard is intended to provide enhanced transparency and comparability by requiring lessees to record right of use assets and corresponding lease liabilities on the balance sheet. The new guidance requires the Company to continue to classify leases as either operating or financing, with classification affecting the pattern of expense recognition in the income statement. The Company is also required to disclose qualitative and quantitative information about leasing arrangements to enable financial statement users to assess the amount, timing and uncertainty of cash flows arising from leases. The Company adopted ASC 842 using a modified retrospective method that did not require the prior period information to be restated.  ASC 842 also provides a number of optional provisions, known as practical expedients, which companies may elect to adopt to facilitate implementation.  The Company elected a package of practical expedients which, among other items, precludes the Company from needing to reassess 1) whether any expired or existing contracts are or contain leases, 2) the lease classification of any expired or existing leases, and 3) initial direct costs for any existing leases. The Company elected not to implement the practical expedient related to hindsight to determine lease terms.  Due to the implementation of selected practical expedients, there was no cumulative effect adjustment to beginning retained earnings. See Note 7–Leases for additional disclosures.

On January 1, 2019, the Company also adopted the following Accounting Standards Updates (“ASUs”) which had no material impact on its unaudited condensed consolidated financial statements or disclosures:  

 

ASU 2018-09, Codification Improvements

 

ASU 2018-13, Fair Value Measurement (Topic 820)

 

ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract

 

ASU 2018-16, Derivatives and Hedging—Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes

During 2018, the Company adopted the following ASUs:

 

ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities - This ASU aims to improve reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements and simplify the application of the hedge accounting guidance.  For cash flow and net investment hedges existing as of the adoption date, the guidance requires a cumulative-effect adjustment as of the beginning of the fiscal year that an entity adopts the amendments; however, the presentation and disclosure guidance should be applied prospectively. The impact of the adoption was not material to the Company’s unaudited condensed consolidated financial statements; as a result, no cumulative effect adjustment to beginning retained earnings was required. See Note 8Derivative Instruments and Hedging Activities for additional disclosure.  

 

ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income -  This ASU gives companies the option to reclassify to retained earnings any tax effects related to items in accumulated other comprehensive income or loss that are stranded due to the Tax Cuts and Jobs Act (the “Tax Act”). Companies are required to disclose whether or not they elected to reclassify the tax effects related to the Tax Act as well as their policy for releasing income tax effects from accumulated other comprehensive income or loss.  The Company elected to early adopt the ASU on January 1, 2018 and applied the amendments in the period of adoption. As a result, the Company reclassified $1.1 million of “stranded” tax effects of the Tax Act from accumulated other comprehensive income (loss) to accumulated deficit in the accompanying unaudited condensed consolidated balance sheet and the accompanying unaudited condensed consolidated statements of changes in stockholders’ equity.

Leases

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 to 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.

v3.19.1
Description of the Business and Basis of Presentation (Tables)
3 Months Ended
Mar. 31, 2019
Accounting Policies [Abstract]  
Schedule Of Cash Cash Equivalents And Restricted Cash

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.

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Cash and cash equivalents

 

$

51,860

 

 

$

34,073

 

Restricted cash, included in other current assets

 

 

954

 

 

 

934

 

Total cash, cash equivalents and restricted cash

 

$

52,814

 

 

$

35,007

 

Changes in Deferred Revenue The following table reflects the Company’s deferred revenue balance as of March 31, 2019 and December 31, 2018:

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Deferred revenue, including long-term portion

 

$

161,253

 

 

$

111,181

 

Less: Deferred revenue, long-term portion, included in other liabilities

 

 

10,000

 

 

 

10,071

 

Deferred revenue, short-term portion

 

$

151,253

 

 

$

101,110

 

 

 

 

 

 

 

 

 

 

v3.19.1
Loss per Share (Tables)
3 Months Ended
Mar. 31, 2019
Earnings Per Share [Abstract]  
Schedule of Loss per Share

Loss per share is computed as follows:

 

 

 

For the Three Months Ended March 31,

 

 

 

 

2019

 

 

2018

 

 

 

 

Net Loss

 

 

Shares

 

 

Per

Share

Amount

 

 

Net Loss

 

 

Shares

 

 

Per

Share

Amount

 

 

 

 

(In thousands, except per share amounts)

 

 

Basic loss per share

 

$

(37,020

)

 

 

83,354

 

 

$

(0.44

)

 

$

(62,844

)

 

 

86,209

 

 

$

(0.73

)

 

Effect of dilutive incentive-based awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted loss per share

 

$

(37,020

)

 

 

83,354

 

 

$

(0.44

)

 

$

(62,844

)

 

 

86,209

 

 

$

(0.73

)

 

v3.19.1
Other Accrued Liabilities (Tables)
3 Months Ended
Mar. 31, 2019
Payables And Accruals [Abstract]  
Schedule of Other Accrued Liabilities

Other accrued liabilities at March 31, 2019 and December 31, 2018, consisted of the following:

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Self-insurance reserve

 

$

6,895

 

 

$

6,895

 

Accrued property taxes

 

 

2,910

 

 

 

 

Accrued interest

 

 

1,095

 

 

 

490

 

Dividends

 

 

23

 

 

 

84

 

Other

 

 

18,142

 

 

 

15,597

 

Total other accrued liabilities

 

$

29,065

 

 

$

23,066

 

v3.19.1
Long-Term Debt (Tables)
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Summary of Long-Term Debt, Net

Long-term debt, net, as of March 31, 2019 and December 31, 2018 consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

(In thousands)

 

Term B-5 Loans (effective interest rate of 5.50% and 5.52% at

   March 31, 2019 and December 31, 2018, respectively)

 

$

1,519,513

 

 

$

1,523,389

 

Revolving credit facility (effective interest rate of 5.16% and

   5.17% at March 31, 2019 and December 31, 2018, respectively)

 

 

65,000

 

 

 

30,000

 

Total long-term debt

 

 

1,584,513

 

 

 

1,553,389

 

Less discounts

 

 

(6,100

)

 

 

(6,564

)

Less debt issuance costs

 

 

(6,206

)

 

 

(6,641

)

Less current maturities

 

 

(80,505

)

 

 

(45,505

)

Total long-term debt, net

 

$

1,491,702

 

 

$

1,494,679

 

Summary of Long-Term Debt Repayable

Long-term debt at March 31, 2019 is repayable as follows, and does not include the impact of any future voluntary prepayments. The outstanding balance under the Revolving Credit Facility is included in current maturities of long-term debt in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2019.

Years Ending December 31,

 

(In thousands)

 

Remainder of 2019

 

$

76,629

 

2020

 

 

15,505

 

2021

 

 

15,505

 

2022

 

 

15,505

 

2023

 

 

15,505

 

Thereafter

 

 

1,445,864

 

Total

 

$

1,584,513

 

v3.19.1
Leases (Tables)
3 Months Ended
Mar. 31, 2019
Leases [Abstract]  
Schedule of Lease Balances and Classification on Unaudited Condensed Consolidated Balance Sheet

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

 

 

 

 

March 31,

 

Leases

 

Classification

 

2019

 

Assets

 

 

 

(In thousands)

 

Operating leases

 

Right of use assets - operating

 

$

145,807

 

Financing leases

 

Other assets, net

 

 

3,990

 

Total lease assets

 

 

 

$

149,797

 

Liabilities

 

 

 

 

 

 

Current

 

 

 

 

 

 

Operating leases

 

Operating lease obligations

 

 

4,118

 

Financing leases

 

Other accrued liabilities

 

 

693

 

Noncurrent

 

 

 

 

 

 

Operating leases

 

Long-term operating lease obligations

 

 

128,119

 

Financing leases

 

Other liabilities

 

 

3,333

 

Total lease liabilities

 

 

 

$

136,263

 

 

 

 

 

 

December 31,

 

Leases

 

Classification

 

2018

 

Assets

 

 

 

(In thousands)

 

Favorable lease asset

 

Other intangible assets, net

 

$

13,961

 

Capital leases

 

Property and equipment, at cost

 

 

3,066

 

Capital leases, accumulated depreciation

 

Accumulated depreciation

 

 

(122

)

Total lease assets

 

 

 

 

16,905

 

Liabilities

 

 

 

 

 

 

Current

 

 

 

 

 

 

Capital leases

 

Other accrued liabilities

 

$

143

 

Noncurrent

 

 

 

 

 

 

Capital leases

 

Other liabilities

 

 

2,822

 

Total lease liabilities

 

 

 

$

2,965

 

Schedule of Lease Costs and Classification on Unaudited Condensed Consolidated Statements of Comprehensive Loss

The table below presents the lease costs and their classification on the accompanying unaudited condensed consolidated statements of comprehensive loss for the three months ended March 31, 2019:

Lease Cost

 

Classification

 

(In thousands)

 

Operating lease cost

 

Operating expenses

 

$

2,758

 

Operating lease cost

 

Selling, general and administrative expenses

 

 

137

 

Financing lease cost

 

 

 

 

 

 

Amortization of leased assets

 

Depreciation and amortization

 

 

184

 

Interest on lease liabilities

 

Interest expense

 

 

40

 

Net lease cost

 

 

 

$

3,119

 

Schedule of Lease Maturities

The table below presents the Company’s lease maturities as of March 31, 2019:

 

 

Operating leases

 

 

 

 

 

Years Ending December 31,

 

Land lease

 

 

Other operating leases

 

 

Total operating leases

 

 

Financing leases

 

 

 

(In thousands)

 

Remainder of 2019

 

$

7,801

 

 

$

3,109

 

 

$

10,910

 

 

$

622

 

2020

 

 

10,401

 

 

 

3,824

 

 

 

14,225

 

 

 

825

 

2021

 

 

10,401

 

 

 

3,478

 

 

 

13,879

 

 

 

332

 

2022

 

 

10,401

 

 

 

2,497

 

 

 

12,898

 

 

 

208

 

2023

 

 

10,401

 

 

 

1,954

 

 

 

12,355

 

 

 

204

 

2024

 

 

10,401

 

 

 

1,740

 

 

 

12,141

 

 

 

201

 

Thereafter

 

 

244,431

 

 

 

2,993

 

 

 

247,424

 

 

 

2,593

 

Total lease payments

 

 

304,237

 

 

 

19,595

 

 

 

323,832

 

 

 

4,985

 

Less: Imputed Interest

 

 

(188,224

)

 

 

(3,371

)

 

 

(191,595

)

 

 

(959

)

Present value of lease liabilities

 

$

116,013

 

 

$

16,224

 

 

$

132,237

 

 

$

4,026

 

Schedule of Future Minimum Lease Payments For Long-Term Non-Cancellable Operating and Financing Leases Under ASC 840

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:

Years Ending December 31,

 

Operating leases

 

 

Financing leases

 

 

 

(In thousands)

 

2019

 

$

16,578

 

 

$

231

 

2020

 

 

14,179

 

 

 

226

 

2021

 

 

13,111

 

 

 

220

 

2022

 

 

11,416

 

 

 

208

 

2023

 

 

10,479

 

 

 

204

 

Thereafter

 

 

265,234

 

 

 

2,794

 

Total lease payments

 

$

330,997

 

 

 

3,883

 

Less: Interest

 

 

 

 

 

 

(918

)

Total principal payable on financing leases

 

 

 

 

 

$

2,965

 

Schedule of Weighted Average Remaining Lease Terms and Applicable Discount Rates

The table below presents the weighted average remaining lease terms and applicable discount rates as of March 31, 2019:

Lease term and discount rate

 

 

 

 

Weighted average remaining lease term (years)

 

 

 

 

Operating leases

 

 

26.41

 

Financing leases

 

 

14.19

 

Weighted average discount rate

 

 

 

 

Operating leases

 

 

8.10

%

Financing leases

 

 

4.19

%

Schedule of Cash Flows and Supplemental Information Associated with Leasing Activities

The table below presents the cash flows and supplemental information associated with the Company’s leasing activities for the three months ended March 31, 2019:

Other Information

 

(In thousands)

 

Operating cash flows from operating leases

 

$

2,764

 

Operating cash flows from financing leases

 

$

40

 

Financing cash flows from financing leases

 

$

168

 

Right of use assets obtained in exchange for financing lease obligations

 

$

1,230

 

Right of use assets obtained in exchange for operating lease obligations

 

$

133,297

 

 

v3.19.1
Derivative Instruments and Hedging Activities (Tables)
3 Months Ended
Mar. 31, 2019
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Fair Value of Company's Derivative Financial Instruments Classification on Unaudited Condensed Consolidated Balance Sheets

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

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 as of March 31, 2019 and December 31, 2018:

 

 

  

 

Asset Derivatives

 

 

Asset Derivatives

 

 

 

As of March 31, 2019

 

 

As of December 31, 2018

 

 

 

Balance Sheet

Location

 

Fair Value

 

 

Balance Sheet

Location

 

Fair Value

 

Derivatives designated as hedging instruments:

 

(In thousands)

 

Interest rate swap agreements

 

Other assets

 

$

301

 

 

Other assets

 

$

3,109

 

Total derivatives designated as hedging instruments

 

 

 

$

301

 

 

 

 

$

3,109

 

Schedule of Pre-tax Effect of Derivative Financial Instruments in Unaudited Condensed Consolidated Statements of Comprehensive Loss

Tabular Disclosure of the Effect of Derivative Instruments on the Statements of Comprehensive Loss

The table below presents the pretax effect of the Company’s derivative financial instruments in the unaudited condensed consolidated statements of comprehensive loss for the three months ended March 31, 2019 and 2018:

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

Derivatives in Cash Flow Hedging Relationships:

 

(In thousands)

 

(Loss) gain related to effective portion of derivatives recognized in accumulated other comprehensive loss

 

$

(1,953

)

 

$

12,116

 

Loss related to effective portion of derivatives reclassified from accumulated other comprehensive loss to interest expense

 

$

(855

)

 

$

(1,851

)

Schedule of Changes in Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated Other Comprehensive Income (Loss)

The following table reflects the changes in accumulated other comprehensive income (loss) for the three months ended March 31, 2019, net of tax: 

Accumulated other comprehensive income (loss) (In thousands):

 

 

 

 

 

Income (Losses) on

Cash Flow Hedges

 

Accumulated other comprehensive income at December 31, 2018

 

 

 

 

 

$

2,284

 

Other comprehensive loss before reclassifications

 

 

(1,435

)

 

 

 

 

Amounts reclassified from accumulated other comprehensive income to interest expense

 

 

(629

)

 

 

 

 

Unrealized loss on derivatives, net of tax

 

 

 

 

 

 

(2,064

)

Accumulated other comprehensive income at March 31, 2019

 

 

 

 

 

$

220

 

v3.19.1
Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]  
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis 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 March 31, 2019:

 

Quoted Prices in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Markets

 

 

Significant

 

 

 

 

 

 

 

 

 

 

for Identical

 

 

Other

 

 

Significant

 

 

 

 

 

 

Assets and

 

 

Observable

 

 

Unobservable

 

 

Balance at

 

 

Liabilities

 

 

Inputs

 

 

Inputs

 

 

March 31,

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

2019

 

Assets:

(In thousands)

 

Derivative financial instruments (a)

$

 

 

$

301

 

 

$

 

 

$

301

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term obligations (b)

$

 

 

$

1,584,513

 

 

$

 

 

$

1,584,513

 

(a)

Reflected at fair value in the unaudited condensed consolidated balance sheet as other assets of $0.3 million as of March 31, 2019.

(b)

Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $80.5 million and long-term debt of $1.492 billion as of March 31, 2019.

There were no 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 liabilities measured on a recurring basis as of December 31, 2018:

 

Quoted Prices in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Markets

 

 

Significant

 

 

 

 

 

 

 

 

 

 

for Identical

 

 

Other

 

 

Significant

 

 

 

 

 

 

Assets and

 

 

Observable

 

 

Unobservable

 

 

Balance at

 

 

Liabilities

 

 

Inputs

 

 

Inputs

 

 

December 31,

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

2018

 

Assets:

(In thousands)

 

Derivative financial instruments (a)

$

 

 

$

3,109

 

 

$

 

 

$

3,109

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term obligations (b)

$

 

 

$

1,553,389

 

 

$

 

 

$

1,553,389

 

(a)

Reflected at fair value in the unaudited condensed consolidated balance sheet as other assets of $3.1 million as of December 31, 2018.

(b)

Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $45.5 million and long-term debt of $1.495 billion as of December 31, 2018.

v3.19.1
Equity-Based Compensation (Tables)
3 Months Ended
Mar. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Schedule of Time-Vesting and Performance Vesting Restricted Share Awards

The activity related to the Company’s time-vesting and performance-vesting awards during the three months ended March 31, 2019 is as follows:

 

 

 

 

 

 

 

 

 

 

Performance-Vesting Restricted shares/units

 

 

 

Time-Vesting

Restricted shares/units

 

 

Bonus Performance

Restricted units

 

 

Long-Term

Incentive

Performance

Restricted shares/units

 

 

 

Shares/Units

 

 

Weighted

Average

Grant Date

Fair

Value per

Share/Unit

 

 

Units

 

 

Weighted

Average

Grant Date

Fair

Value per

Unit

 

 

Shares/Units

 

 

Weighted

Average

Grant Date

Fair

Value per

Share/Unit

 

Outstanding at December 31, 2018

 

 

901,704

 

 

$

17.34

 

 

 

560,710

 

 

$

15.06

 

 

 

1,155,486

 

 

$

15.82

 

Granted

 

 

47,772

 

 

$

25.70

 

 

 

224,928

 

 

$

25.70

 

 

 

1,233,742

 

 

$

25.70

 

Vested

 

 

(87,079

)

 

$

17.12

 

 

 

(319,868

)

 

$

15.06

 

 

 

(27,877

)

 

$

15.24

 

Forfeited

 

 

(121,518

)

 

$

16.33

 

 

 

(246,678

)

 

$

15.32

 

 

 

(285,428

)

 

$

18.11

 

Outstanding at March 31, 2019

 

 

740,879

 

 

$

18.07

 

 

 

219,092

 

 

$

25.70

 

 

 

2,075,923

 

 

$

21.39

 

 

Schedule of Activity Related to Stock Option Awards

The activity related to the Company’s stock option awards during the three months ended March 31, 2019 is as follows:

 

 

 

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

 

 

430,390

 

 

$

25.70

 

 

 

 

 

 

 

 

 

Forfeited

 

 

(55,379

)

 

$

19.36

 

 

 

 

 

 

 

 

 

Expired

 

 

(8,593

)

 

$

18.52

 

 

 

 

 

 

 

 

 

Exercised

 

 

(39,928

)

 

$

17.90

 

 

 

 

 

 

 

 

 

Outstanding at March 31, 2019

 

 

1,091,067

 

 

$

21.00

 

 

 

7.85

 

 

$

5,188

 

Exercisable at March 31, 2019

 

 

556,676

 

 

$

18.28

 

 

 

6.47

 

 

$

4,163

 

Schedule of Stock Options Valuation Assumptions

The weighted average grant date fair value of stock options granted during the three months ended March 31, 2019 was $8.45. Key weighted-average assumptions utilized in the Black-Scholes Option Pricing Model for stock options granted during the three months ended March 31, 2019 were:

Risk-free interest rate

 

 

2.48

%

Expected volatility (a)

 

 

28.50

%

Expected dividend yield

 

 

0.00

%

Expected life (years) (b)

 

 

6.00

 

(a)

Due to the Company’s limited history as a public company, the volatility for the Company’s stock at the date of each grant was estimated using the average volatility calculated for a peer group, which is based upon daily price observations over the estimated term of options granted.

(b)

The expected life was estimated using the simplified method, as the Company does not have sufficient historical exercise data due to the limited period of time its common stock has been publicly traded.

 

v3.19.1
Restructuring and Other Separation Costs (Tables)
3 Months Ended
Mar. 31, 2019
Restructuring And Related Activities [Abstract]  
Schedule of Restructuring Related Activity

Related activity for the three months ended March 31, 2019 was as follows:

 

 

 

2019 Restructuring and other Separation Costs

 

 

2018 Restructuring Program

 

 

 

(In thousands)

 

Liability as of December 31, 2018

 

$

 

 

$

537

 

Costs incurred

 

 

2,566

 

 

 

 

Payments made

 

 

 

 

 

(159

)

Liability as of March 31, 2019

 

$

2,566

 

 

$

378

 

v3.19.1
Description of the Business and Basis of Presentation - Additional Information (Detail)
$ in Thousands
3 Months Ended
Mar. 31, 2019
USD ($)
Business
Segment
Mar. 31, 2018
USD ($)
Dec. 31, 2018
USD ($)
Business Description And Basis Of Presentation [Line Items]      
Number of theme parks owned and operated | Business 12    
Number of theme parks opened for a portion of the year | Business 7    
Number of reportable segment | Segment 1    
Long term deferred revenue $ 10,000   $ 10,071
Revenue $ 220,575 $ 217,166  
ZHG Stock Purchase Agreement [Member]      
Business Description And Basis Of Presentation [Line Items]      
Type of Revenue [Extensible List] seas:FoodMerchandiseAndOtherRevenueMember seas:FoodMerchandiseAndOtherRevenueMember  
Revenue $ 1,700 $ 1,300  
Middle East Project [Member]      
Business Description And Basis Of Presentation [Line Items]      
Long term deferred revenue 10,000   10,000
Deferred costs incurred under Middle East Project $ 4,100   $ 3,800
v3.19.1
Description of the Business and Basis of Presentation - Summary of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Mar. 31, 2018
Dec. 31, 2017
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract]        
Cash and cash equivalents $ 51,860 $ 34,073    
Restricted cash, included in other current assets $ 954 $ 934    
Restricted cash, current, asset, statement of financial position [extensible list] us-gaap:OtherAssetsCurrent us-gaap:OtherAssetsCurrent    
Total cash, cash equivalents and restricted cash $ 52,814 $ 35,007 $ 40,651 $ 33,997
v3.19.1
Description of the Business and Basis of Presentation - Changes in Deferred Revenue (Detail) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Deferred Revenue Disclosure [Abstract]    
Deferred revenue, including long-term portion $ 161,253 $ 111,181
Long term deferred revenue 10,000 10,071
Deferred revenue, short-term portion $ 151,253 $ 101,110
v3.19.1
Recent Accounting Pronouncements - Additional Information (Detail)
$ in Millions
3 Months Ended
Mar. 31, 2018
USD ($)
ASU 2018-02 [Member] | Gains (Losses) on Cash Flow Hedges [Member]  
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]  
Tax Cuts and Jobs Act of 2017, reclassification from accumulated other comprehensive income to accumulated deficit $ 1.1
v3.19.1
Loss per Share - Schedule of Loss per Share (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Earnings Per Share [Abstract]    
Basic loss per share, Net Loss $ (37,020) $ (62,844)
Diluted loss per share, Net Loss $ (37,020) $ (62,844)
Basic loss per share, Shares 83,354 86,209
Diluted loss per share, Shares 83,354 86,209
Basic loss per share, Per Share Amount $ (0.44) $ (0.73)
Diluted loss per share, Per Share Amount $ (0.44) $ (0.73)
v3.19.1
Loss per Share - Additional Information (Detail) - shares
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Earnings Per Share [Line Items]    
Anti-dilutive or potentially dilutive shares excluded from the computation of diluted loss per share 1,893,000 4,495,000
Performance-vesting Restricted Awards [Member]    
Earnings Per Share [Line Items]    
Contingently issuable shares excluded from the calculation of diluted loss per share 2,295,000 2,730,000
v3.19.1
Income Taxes - Additional Information (Detail)
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Income Tax Disclosure [Abstract]    
Effective tax rate 29.00% 27.00%
Income tax rate at federal statutory rates 21.00% 21.00%
v3.19.1
Other Accrued Liabilities - Schedule of Other Accrued Liabilities (Detail) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Payables And Accruals [Abstract]    
Self-insurance reserve $ 6,895 $ 6,895
Accrued property taxes 2,910  
Accrued interest 1,095 490
Dividends 23 84
Other 18,142 15,597
Total other accrued liabilities $ 29,065 $ 23,066
v3.19.1
Other Accrued Liabilities - Additional Information (Detail) - USD ($)
$ in Millions
Mar. 31, 2019
Dec. 31, 2018
EZPay Plan Class Action Lawsuit [Member]    
Other Accrued Liabilitiies [Line Items]    
Settlement of litigation accrued $ 11.5 $ 11.5
v3.19.1
Long-Term Debt - Summary of Long-Term Debt, Net (Detail) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Debt Instrument [Line Items]    
Long-term debt $ 1,584,513 $ 1,553,389
Less discounts (6,100) (6,564)
Less debt issuance costs (6,206) (6,641)
Less current maturities (80,505) (45,505)
Total long-term debt, net 1,491,702 1,494,679
Revolving Credit Facility [Member]    
Debt Instrument [Line Items]    
Long-term debt 65,000 30,000
Term B-5 Loans [Member]    
Debt Instrument [Line Items]    
Long-term debt $ 1,519,513 $ 1,523,389
v3.19.1
Long-Term Debt - Summary of Long-Term Debt, Net (Parenthetical) (Detail)
Mar. 31, 2019
Dec. 31, 2018
Revolving Credit Facility [Member]    
Debt Instrument [Line Items]    
Debt instrument interest rate effective percentage 5.16% 5.17%
Term B-5 Loans [Member]    
Debt Instrument [Line Items]    
Debt instrument interest rate effective percentage 5.50% 5.52%
v3.19.1
Long-Term Debt - Additional Information (Detail)
3 Months Ended
May 07, 2019
USD ($)
Oct. 31, 2018
Jan. 05, 2018
USD ($)
Mar. 31, 2019
USD ($)
Swap
Mar. 31, 2018
USD ($)
Dec. 31, 2018
USD ($)
Debt Instrument [Line Items]            
Long-term debt       $ 1,584,513,000   $ 1,553,389,000
Outstanding letters of credit       $ 21,300,000    
Interest Rate Swaps [Member]            
Debt Instrument [Line Items]            
Number of interest rate swaps held | Swap       5    
Notional amount of interest rate swap       $ 1,000,000,000    
Maturity of interest rate swap       May 14, 2020    
Weighted average fixed interest rate       2.45%    
Variable rate of interest       0.75%    
Variable rate of interest, description       variable rate of interest based upon the greater of 0.75% or the BBA LIBOR    
Senior Secured Credit Facilities [Member]            
Debt Instrument [Line Items]            
Cash paid for interest     $ 5,100,000 $ 20,100,000 $ 24,000,000  
Revolving Credit Facility [Member]            
Debt Instrument [Line Items]            
Long-term debt       65,000,000   30,000,000
Senior secured revolving       210,000,000    
Amount available for borrowing       $ 123,700,000    
Revolving Credit Facility [Member] | Subsequent Event [Member]            
Debt Instrument [Line Items]            
Net repayment of revolving credit facility $ 40,000,000          
Restrictive Covenants [Member] | Senior Secured Credit Facilities [Member]            
Debt Instrument [Line Items]            
First lien secured net leverage ratio   625.00%        
Restrictive covenants, description   The Revolving Credit Facility requires that 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   The Senior Secured Credit Facilities permit restricted payments in an aggregate amount per annum equal to the sum 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.    
Percentage of Market Capitalization on restricted payment       7.50%    
First lien secured net leverage ratio       350.00%    
Total net leverage ratio, as calculated       351.00%    
Restrictive covenants, restricted payments available       $ 185,000,000    
Restrictive Covenants [Member] | Senior Secured Credit Facilities [Member] | Maximum [Member]            
Debt Instrument [Line Items]            
Excludable letters of credit under maximum required first lien secured leverage ratio       30,000,000    
Restricted payment on Senior Secured Credit Facilities, base payment       25,000,000    
Restricted payment on Senior Secured Credit Facilities, first payment       95,000,000    
Restricted payment on Senior Secured Credit Facilities, second payment       95,000,000    
Restricted payment on Senior Secured Credit Facilities, third payment       $ 65,000,000    
Total leverage ratio, one       400.00%    
Total leverage ratio, two       450.00%    
Total leverage ratio, three       500.00%    
Restrictive Covenants [Member] | Senior Secured Credit Facilities [Member] | Minimum [Member]            
Debt Instrument [Line Items]            
Minimum percentage of funded loan and letters of credit for covenant to apply       35.00%    
Total leverage ratio, one       350.00%    
Total leverage ratio, two       400.00%    
Total leverage ratio, three       450.00%    
Term B-5 Loans [Member]            
Debt Instrument [Line Items]            
Long-term debt       $ 1,519,513,000   $ 1,523,389,000
Long-term debt, maturity date       Mar. 31, 2024    
Percent of original principal amount on effective date used to calculate aggregate annual amount which will amortize in equal quarterly installments       1.015%    
v3.19.1
Long-Term Debt - Summary of Long-Term Debt Repayable (Detail) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Maturities Of Long Term Debt [Abstract]    
Remainder of 2019 $ 76,629  
2020 15,505  
2021 15,505  
2022 15,505  
2023 15,505  
Thereafter 1,445,864  
Long-term debt $ 1,584,513 $ 1,553,389
v3.19.1
Leases - Additional Information (Detail)
$ in Millions
3 Months Ended
Mar. 31, 2019
USD ($)
a
Mile
Lessee Lease Description [Line Items]  
Number of area not to use within the radius of land lease | Mile 560
Estimated incremental borrowing rate 8.20%
Operating lease, lease payment, description 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.
Number of percentage of average accounting year rent adjusted on minimum yearly rent 80.00%
Rent expense $ 10.4
Operating lease payments related to options to extend lease terms 8.2
Operating Expenses and Selling, General and Administrative Expenses [Member]  
Lessee Lease Description [Line Items]  
Short term rent expense 0.8
ASU 2016-02 [Member]  
Lessee Lease Description [Line Items]  
Lease asset net balance reclassified $ 14.0
City of San Deigo [Member]  
Lessee Lease Description [Line Items]  
Number of land lease area | a 190
Mission Bay Park, California (Premises) [Member]  
Lessee Lease Description [Line Items]  
Number of land lease area | a 17
Current lease term 2048-06
Rent expense $ 1.7
Maximum [Member]  
Lessee Lease Description [Line Items]  
Term of lease 12 months
Lease renewal term 10 years
Minimum [Member]  
Lessee Lease Description [Line Items]  
Lease renewal term 1 year
v3.19.1
Leases - Schedule of Lease Balances and Classification on Unaudited Condensed Consolidated Balance Sheet (Detail) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Lessee Lease Description [Line Items]    
Operating leases $ 145,807  
Total lease assets 149,797 $ 16,905
Current    
Operating leases 4,118  
Noncurrent    
Operating leases 128,119  
Total lease liabilities 136,263 2,965
Other Intangible Assets, Net [Member]    
Lessee Lease Description [Line Items]    
Operating leases   13,961
Other Assets Net [Member]    
Lessee Lease Description [Line Items]    
Financing/Capital leases 3,990  
Property and Equipment, at Cost [Member]    
Lessee Lease Description [Line Items]    
Financing/Capital leases   3,066
Capital leases, accumulated depreciation   (122)
Other Accrued Liabilities [Member]    
Current    
Financing/Capital leases 693 143
Other Liabilities [Member]    
Noncurrent    
Financing/Capital leases $ 3,333 $ 2,822
v3.19.1
Leases - Schedule of Lease Costs and Classification on Unaudited Condensed Consolidated Statements of Comprehensive Loss (Detail)
$ in Thousands
3 Months Ended
Mar. 31, 2019
USD ($)
Lease Cost  
Net lease cost $ 3,119
Operating Expenses [Member]  
Lessee Lease Description [Line Items]  
Operating lease cost 2,758
Selling, General and Administrative Expenses [Member]  
Lessee Lease Description [Line Items]  
Operating lease cost 137
Depreciation and Amortization [Member]  
Financing lease cost  
Amortization of leased assets 184
Interest Expense [Member]  
Financing lease cost  
Interest on lease liabilities $ 40
v3.19.1
Leases - Schedule of Lease Maturities (Detail)
$ in Thousands
Mar. 31, 2019
USD ($)
Operating leases  
Remainder of 2019 $ 10,910
2020 14,225
2021 13,879
2022 12,898
2023 12,355
2024 12,141
Thereafter 247,424
Total lease payments 323,832
Less: Imputed Interest (191,595)
Present value of lease liabilities 132,237
Financing leases  
Remainder of 2019 622
2020 825
2021 332
2022 208
2023 204
2024 201
Thereafter 2,593
Total lease payments 4,985
Less: Imputed Interest (959)
Present value of lease liabilities 4,026
Land Lease [Member]  
Operating leases  
Remainder of 2019 7,801
2020 10,401
2021 10,401
2022 10,401
2023 10,401
2024 10,401
Thereafter 244,431
Total lease payments 304,237
Less: Imputed Interest (188,224)
Present value of lease liabilities 116,013
Other Operating Leases [Member]  
Operating leases  
Remainder of 2019 3,109
2020 3,824
2021 3,478
2022 2,497
2023 1,954
2024 1,740
Thereafter 2,993
Total lease payments 19,595
Less: Imputed Interest (3,371)
Present value of lease liabilities $ 16,224
v3.19.1
Leases - Schedule of Future Minimum Lease Payments For Long-Term Non-Cancellable Operating and Financing Leases Under ASC 840 (Detail)
$ in Thousands
Dec. 31, 2018
USD ($)
Operating leases  
2019 $ 16,578
2020 14,179
2021 13,111
2022 11,416
2023 10,479
Thereafter 265,234
Total lease payments 330,997
Financing leases  
2019 231
2020 226
2021 220
2022 208
2023 204
Thereafter 2,794
Total lease payments 3,883
Less: Interest (918)
Total principal payable on financing leases $ 2,965
v3.19.1
Leases - Schedule of Weighted Average Remaining Lease Terms and Applicable Discount Rates (Detail)
Mar. 31, 2019
Leases [Abstract]  
Operating lease, weighted average remaining lease term (years) 26 years 4 months 28 days
Finance lease, weighted average remaining lease term (years) 14 years 2 months 8 days
Operating lease, weighted average discount rate 8.10%
Finance lease, weighted average discount rate 4.19%
v3.19.1
Leases - Schedule of Cash Flows and Supplemental Information Associated with Leasing Activities (Detail)
$ in Thousands
3 Months Ended
Mar. 31, 2019
USD ($)
Leases [Abstract]  
Operating cash flows from operating leases $ 2,764
Operating cash flows from financing leases 40
Financing cash flows from financing leases 168
Right of use assets obtained in exchange for financing lease obligations 1,230
Right of use assets obtained in exchange for operating lease obligations $ 133,297
v3.19.1
Derivative Instruments and Hedging Activities - Additional Information (Detail)
Mar. 31, 2019
USD ($)
Swap
Dec. 31, 2018
USD ($)
Derivative Instruments, Gain (Loss) [Line Items]    
Reclassified as a reduction to interest expense, expected during the next 12 months $ 500,000  
Interest Rate Swaps [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Notional amount of interest rate swap $ 1,000,000,000  
Number of interest rate swaps held | Swap 5  
Not Designated as Hedge Accounting Relationships [Member]    
Derivative Instruments, Gain (Loss) [Line Items]    
Derivatives outstanding $ 0 $ 0
v3.19.1
Derivative Instruments and Hedging Activities - Fair Value of Company's Derivative Financial Instruments Classification on Unaudited Condensed Consolidated Balance Sheets (Detail) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Derivatives Fair Value [Line Items]    
Asset Derivatives Fair Value $ 301 $ 3,109
Other Assets [Member]    
Derivatives Fair Value [Line Items]    
Asset Derivatives Fair Value 300 3,100
Interest Rate Swaps [Member] | Other Assets [Member]    
Derivatives Fair Value [Line Items]    
Asset Derivatives Fair Value $ 301 $ 3,109
v3.19.1
Derivative Instruments and Hedging Activities - Schedule of Pre-tax Effect of Derivative Financial Instruments on Unaudited Condensed Consolidated Statements of Comprehensive Loss (Detail) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Derivatives in Cash Flow Hedging Relationships:    
(Loss) gain related to effective portion of derivatives recognized in accumulated other comprehensive loss $ (1,953) $ 12,116
Loss related to effective portion of derivatives reclassified from accumulated other comprehensive loss to interest expense $ (855) $ (1,851)
v3.19.1
Derivative Instruments and Hedging Activities - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) (Detail)
$ in Thousands
3 Months Ended
Mar. 31, 2019
USD ($)
Accumulated other comprehensive income (loss) (In thousands):  
Beginning Balance $ 265,194
Ending Balance 226,420
Accumulated Other Comprehensive Income [Member]  
Accumulated other comprehensive income (loss) (In thousands):  
Beginning Balance 2,284
Ending Balance 220
Income (Losses) on Cash Flow Hedges [Member]  
Accumulated other comprehensive income (loss) (In thousands):  
Other comprehensive loss before reclassifications (1,435)
Amounts reclassified from accumulated other comprehensive income to interest expense (629)
Unrealized loss on derivatives, net of tax $ (2,064)
v3.19.1
Fair Value Measurements - Additional Information (Detail) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2019
Dec. 31, 2018
Fair Value Disclosures [Abstract]    
Transfers between Levels $ 0 $ 0
v3.19.1
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Assets:    
Derivative financial instruments $ 301 $ 3,109
Fair Value, Measurements, Recurring [Member]    
Assets:    
Derivative financial instruments 301 3,109
Liabilities:    
Long-term obligations 1,584,513 1,553,389
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Assets:    
Derivative financial instruments 301 3,109
Liabilities:    
Long-term obligations $ 1,584,513 $ 1,553,389
v3.19.1
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Parenthetical) (Detail) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Asset Derivatives Fair Value $ 301 $ 3,109
Current maturities of long-term debt 80,505 45,505
Total long-term debt, net 1,491,702 1,494,679
Other Assets [Member]    
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]    
Asset Derivatives Fair Value $ 300 $ 3,100
v3.19.1
Related-Party Transactions - Additional Information (Detail) - USD ($)
$ in Thousands
3 Months Ended
May 08, 2017
Mar. 31, 2019
Mar. 31, 2018
Mar. 24, 2017
Related Party Transaction [Line Items]        
Revenue   $ 220,575 $ 217,166  
Zhonghong Zhuoye Group [Member]        
Related Party Transaction [Line Items]        
Percentage of common stock outstanding by partnership       21.00%
ZHG Stock Purchase Agreement [Member]        
Related Party Transaction [Line Items]        
Type of Revenue [Extensible List]   seas:FoodMerchandiseAndOtherRevenueMember seas:FoodMerchandiseAndOtherRevenueMember  
Revenue   $ 1,700 $ 1,300  
SunWise [Member]        
Related Party Transaction [Line Items]        
Beneficial ownership of common stock, shares 19,452,063      
v3.19.1
Commitments and Contingencies - Additional Information (Detail) - USD ($)
3 Months Ended
Mar. 31, 2019
Dec. 31, 2018
Apr. 30, 2018
Commitments And Contingencies [Line Items]      
License agreement term, description 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, the Company opened a new Sesame Land in SeaWorld Orlando.    
EZPay Plan Class Action Lawsuit [Member]      
Commitments And Contingencies [Line Items]      
Estimated liability for legal settlement     $ 11,500,000
Settlement of litigation accrued $ 11,500,000 $ 11,500,000  
Minimum [Member]      
Commitments And Contingencies [Line Items]      
Amount in controversy, not recorded 5,000,000    
Maximum [Member]      
Commitments And Contingencies [Line Items]      
Estimated combined remaining obligations for commitments $ 60,000,000    
v3.19.1
Equity-Based Compensation - Additional Information (Detail) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Equity-based compensation expense $ 3,198 $ 7,545
Recognized equity-based compensation expense   $ 4,500
Weighted average grant-date fair value of stock options $ 8.45  
Long-Term Incentive Options [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Vesting period 3 years  
Vesting percentage, per year 33.00%  
Long-Term Incentive Performance Restricted Units [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Award vesting terms 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.  
Long-Term Incentive Time Restricted Units [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Vesting period 3 years  
Vesting percentage, per year 33.00%  
Omnibus Incentive Plan [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Common stock reserved for future issuance, gross 15,000,000  
Shares available for future issuance 8,520,000  
2019 Bonus Plan [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Percentage of bonus payable by cash 50.00%  
2019 Bonus Plan [Member] | Bonus Performance Restricted Units [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Percentage of bonus payable by units 50.00%  
2019 Bonus Plan [Member] | Below Threshold Performance Bonus Restricted Units [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Vesting percentage, per year 0.00%  
2019 Bonus Plan [Member] | At or Above Maximum Performance Bonus Restricted Units [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Vesting percentage, per year 200.00%  
2019 Long-Term Incentive Plan [Member] | Long-Term Incentive Performance Restricted Units [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Performance period 3 years  
2019 Long-Term Incentive Plan Below Threshold Performance [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Vesting percentage, per year 0.00%  
2019 Long-Term Incentive Plan At or Above Maximum Performance [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Vesting percentage, per year 100.00%  
v3.19.1
Equity-Based Compensation - Schedule of Employee Stock Performance Activity (Detail)
3 Months Ended
Mar. 31, 2019
$ / shares
shares
Time-Vesting Restricted Shares/Units [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Shares/Units, Outstanding, Beginning Balance | shares 901,704
Shares/Units, Granted | shares 47,772
Shares/Units, Vested | shares (87,079)
Shares/Units, Forfeited | shares (121,518)
Shares/Units, Outstanding, Ending Balance | shares 740,879
Weighted Average Grant Date Fair Value per Shares/Units, Outstanding, Beginning Balance | $ / shares $ 17.34
Weighted Average Grant Date Fair Value per Shares/Units, Granted | $ / shares 25.70
Weighted Average Grant Date Fair Value per Shares/Units, Vested | $ / shares 17.12
Weighted Average Grant Date Fair Value per Shares/Units, Forfeited | $ / shares 16.33
Weighted Average Grant Date Fair Value per Shares/Units, Outstanding, Ending Balance | $ / shares $ 18.07
Bonus Performance Restricted Units [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Shares/Units, Outstanding, Beginning Balance | shares 560,710
Shares/Units, Granted | shares 224,928
Shares/Units, Vested | shares (319,868)
Shares/Units, Forfeited | shares (246,678)
Shares/Units, Outstanding, Ending Balance | shares 219,092
Weighted Average Grant Date Fair Value per Shares/Units, Outstanding, Beginning Balance | $ / shares $ 15.06
Weighted Average Grant Date Fair Value per Shares/Units, Granted | $ / shares 25.70
Weighted Average Grant Date Fair Value per Shares/Units, Vested | $ / shares 15.06
Weighted Average Grant Date Fair Value per Shares/Units, Forfeited | $ / shares 15.32
Weighted Average Grant Date Fair Value per Shares/Units, Outstanding, Ending Balance | $ / shares $ 25.70
Long-Term Incentive Performance Restricted Shares/Units [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Shares/Units, Outstanding, Beginning Balance | shares 1,155,486
Shares/Units, Granted | shares 1,233,742
Shares/Units, Vested | shares (27,877)
Shares/Units, Forfeited | shares (285,428)
Shares/Units, Outstanding, Ending Balance | shares 2,075,923
Weighted Average Grant Date Fair Value per Shares/Units, Outstanding, Beginning Balance | $ / shares $ 15.82
Weighted Average Grant Date Fair Value per Shares/Units, Granted | $ / shares 25.70
Weighted Average Grant Date Fair Value per Shares/Units, Vested | $ / shares 15.24
Weighted Average Grant Date Fair Value per Shares/Units, Forfeited | $ / shares 18.11
Weighted Average Grant Date Fair Value per Shares/Units, Outstanding, Ending Balance | $ / shares $ 21.39
v3.19.1
Equity-Based Compensation - Schedule of Activity Related to Stock Option Awards (Detail)
$ / shares in Units, $ in Thousands
3 Months Ended
Mar. 31, 2019
USD ($)
$ / shares
shares
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Options, Outstanding, Beginning Balance | shares 764,577
Options, Granted | shares 430,390
Options, Forfeited | shares (55,379)
Options, Expired | shares (8,593)
Options, Exercised | shares (39,928)
Options, Outstanding, Ending Balance | shares 1,091,067
Options, Exercisable at March 31, 2019 | shares 556,676
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ / shares $ 18.05
Weighted Average Exercise Price, Granted | $ / shares 25.70
Weighted Average Exercise Price, Forfeited | $ / shares 19.36
Weighted Average Exercise Price, Expired | $ / shares 18.52
Weighted Average Exercise Price, Exercised | $ / shares 17.90
Weighted Average Exercise Price, Outstanding, Ending Balance | $ / shares 21.00
Weighted Average Exercise Price, Exercisable at March 31, 2019 | $ / shares $ 18.28
Weighted Average Remaining Contractual Life, Outstanding at March 31, 2019 7 years 10 months 6 days
Weighted Average Remaining Contractual Life, Exercisable at March 31, 2019 6 years 5 months 19 days
Aggregate Intrinsic Value, Outstanding at March 31, 2019 | $ $ 5,188
Aggregate Intrinsic Value, Exercisable at March 31, 2019 | $ $ 4,163
v3.19.1
Equity-Based Compensation - Schedule of Stock Options Valuation Assumptions (Detail)
3 Months Ended
Mar. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Risk-free interest rate 2.48%
Expected volatility 28.50%
Expected dividend yield 0.00%
Expected life (years) 6 years
v3.19.1
Stockholders' Equity - Additional Information (Detail) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Feb. 21, 2019
Dec. 31, 2017
Stockholders Equity [Line Items]          
Common stock, shares issued 93,748,617   93,400,929    
Treasury stock, shares 10,174,589   10,174,589    
Share Repurchase Program [Member]          
Stockholders Equity [Line Items]          
Share Repurchase Program, authorized amount       $ 250,000,000  
Stock repurchases under Share Repurchase Program     $ 158,000,000    
Share Repurchase Program, remaining authorized repurchase amount $ 250,000,000        
Stock Repurchase Program, number of shares repurchased 0 0      
Common Stock [Member]          
Stockholders Equity [Line Items]          
Common stock, shares issued 93,748,617 92,889,547 93,400,929   92,637,403
Number of unvested shares 627,989        
Restricted Stock Units [Member]          
Stockholders Equity [Line Items]          
Number of unvested shares 2,407,905        
v3.19.1
Restructuring and Other Separation Costs - Additional Information (Detail)
$ in Thousands
3 Months Ended
Feb. 27, 2018
USD ($)
Mar. 31, 2019
USD ($)
Sep. 30, 2018
Position
Mar. 31, 2018
USD ($)
Dec. 31, 2018
USD ($)
Restructuring Cost And Reserve [Line Items]          
Restructuring and other related costs incurred to date   $ 2,600      
Severance related benefits $ 6,700        
Equity-based compensation expense   3,198   $ 7,545  
Selling, General and Administrative Expenses [Member]          
Restructuring Cost And Reserve [Line Items]          
Equity-based compensation expense   $ 1,841   5,982  
Selling, General and Administrative Expenses [Member] | Employment Agreements [Member]          
Restructuring Cost And Reserve [Line Items]          
Equity-based compensation expense       $ 4,500  
2018 Restructuring Program [Member]          
Restructuring Cost And Reserve [Line Items]          
Restructuring and other related costs incurred to date         $ 5,500
Restructuring costs, description   involved the elimination of approximately 125 positions during the third quarter of 2018 across the Company’s theme parks and its corporate headquarters.      
Number of positions eliminated | Position     125    
v3.19.1
Restructuring and Other Separation Costs - Schedule of Restructuring Related Activity (Detail) - Severance and Other Employment Expenses [Member]
$ in Thousands
3 Months Ended
Mar. 31, 2019
USD ($)
2019 Restructuring and Other Separation Costs [Member]  
Restructuring Cost And Reserve [Line Items]  
Costs incurred $ 2,566
Liability, ending balance 2,566
2018 Restructuring Program [Member]  
Restructuring Cost And Reserve [Line Items]  
Liability, beginning balance 537
Payments made (159)
Liability, ending balance $ 378