SEAWORLD ENTERTAINMENT, INC., 10-Q filed on 5/6/2022
Quarterly Report
v3.22.1
Document and Entity Information - shares
 3 Months Ended
Mar. 31, 2022
Apr. 29, 2022
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2022  
Document Fiscal Year Focus 2022  
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   72,654,199
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Shell Company false  
Title of 12(b) Security Common Stock, par value $0.01 per share  
Security Exchange Name NYSE  
Entity File Number 001-35883  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 27-1220297  
Entity Address, Address Line One 6240 Sea Harbor Drive  
Entity Address, City or Town Orlando  
Entity Address, State or Province FL  
Entity Address, Postal Zip Code 32821  
City Area Code 407  
Local Phone Number 226-5011  
Document Quarterly Report true  
Document Transition Report false  
v3.22.1
Unaudited Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2022
Dec. 31, 2021
Current assets:    
Cash and cash equivalents $ 380,008 $ 443,707
Accounts receivable, net 74,581 76,948
Inventories 45,114 29,478
Prepaid expenses and other current assets 24,961 17,263
Total current assets 524,664 567,396
Property and equipment, at cost 3,426,714 3,385,308
Accumulated depreciation (1,774,203) (1,740,144)
Property and equipment, net 1,652,511 1,645,164
Goodwill 66,278 66,278
Trade names/trademarks, net 157,000 157,000
Right of use assets-operating leases 134,123 132,217
Deferred tax assets, net 24,798 23,995
Other assets, net 18,590 18,266
Total assets 2,577,964 2,610,316
Current liabilities:    
Accounts payable and accrued expenses 152,164 134,311
Current maturities of long-term debt 12,000 12,000
Operating lease liabilities 3,158 2,895
Accrued salaries, wages and benefits 19,315 22,156
Deferred revenue 208,046 154,793
Other accrued liabilities 64,052 45,811
Total current liabilities 458,735 371,966
Long-term debt, net 2,103,367 2,104,835
Long-term operating lease liabilities 118,890 117,046
Deferred tax liabilities, net 7,076 12,803
Other liabilities 42,333 37,582
Total liabilities 2,730,401 2,644,232
Commitments and contingencies (Note 8)
Stockholders’ Deficit:    
Preferred stock, $0.01 par value—authorized, 100,000,000 shares, no shares issued or outstanding at March 31, 2022 and December 31, 2021
Common stock, $0.01 par value—authorized, 1,000,000,000 shares; 95,838,033 and 95,541,992 shares issued at March 31, 2022 and December 31, 2021, respectively 958 955
Additional paid-in capital 711,842 711,474
Accumulated deficit (124,274) (115,287)
Treasury stock, at cost (21,488,469 and 19,953,042 shares at March 31, 2022 and December 31, 2021, respectively) (740,963) (631,058)
Total stockholders’ deficit (152,437) (33,916)
Total liabilities and stockholders’ deficit $ 2,577,964 $ 2,610,316
v3.22.1
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
Mar. 31, 2022
Dec. 31, 2021
Statement Of Financial Position [Abstract]    
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 95,838,033 95,541,992
Treasury stock, shares 21,488,469 19,953,042
v3.22.1
Unaudited Condensed Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Net revenues:    
Total revenues $ 270,693 $ 171,920
Costs and expenses:    
Cost of food, merchandise and other revenues 23,040 14,942
Operating expenses (exclusive of depreciation and amortization shown separately below) 152,925 107,772
Selling, general and administrative expenses 46,059 31,464
Severance and other separation costs 30 86
Depreciation and amortization 38,612 36,558
Total costs and expenses 260,666 190,822
Operating income (loss) 10,027 (18,902)
Other (income) expense, net (12) 174
Interest expense 25,370 30,956
Loss before income taxes (15,331) (50,032)
Benefit from income taxes (6,344) (5,148)
Net loss $ (8,987) $ (44,884)
Loss per share:    
Net loss per share, basic $ (0.12) $ (0.57)
Net loss per share, diluted $ (0.12) $ (0.57)
Weighted average common shares outstanding:    
Basic 75,624 78,458
Diluted 75,624 78,458
Admissions [Member]    
Net revenues:    
Total revenues $ 150,862 $ 95,780
Food, Merchandise and Other [Member]    
Net revenues:    
Total revenues $ 119,831 $ 76,140
v3.22.1
Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit - USD ($)
$ in Thousands
Total
Common Stock [Member]
Additional Paid-In Capital [Member]
Accumulated Deficit [Member]
Treasury Stock, at Cost [Member]
Beginning Balance at Dec. 31, 2020 $ (105,803) $ 946 $ 680,360 $ (371,800) $ (415,309)
Beginning Balance, shares at Dec. 31, 2020   94,652,248      
Equity-based compensation 4,473   4,473    
Vesting of restricted shares   $ 1 (1)    
Vesting of restricted shares, shares   130,834      
Shares withheld for tax withholdings (1,971)   (1,971)    
Shares withheld for tax withholdings, shares   (41,271)      
Exercise of stock options 2,393 $ 1 2,392    
Exercise of stock options, shares   116,634      
Net loss (44,884)     (44,884)  
Ending Balance at Mar. 31, 2021 (145,792) $ 948 685,253 (416,684) (415,309)
Ending Balance, shares at Mar. 31, 2021   94,858,445      
Beginning Balance at Dec. 31, 2021 $ (33,916) $ 955 711,474 (115,287) (631,058)
Beginning Balance, shares at Dec. 31, 2021 95,541,992 95,541,992      
Equity-based compensation $ 6,982   6,982    
Vesting of restricted shares   $ 4 (4)    
Vesting of restricted shares, shares   361,403      
Shares withheld for tax withholdings (7,738) $ (1) (7,737)    
Shares withheld for tax withholdings, shares   (111,865)      
Exercise of stock options 1,127   1,127    
Exercise of stock options, shares   46,503      
Repurchase of treasury shares (109,905)       (109,905)
Net loss (8,987)     (8,987)  
Ending Balance at Mar. 31, 2022 $ (152,437) $ 958 $ 711,842 $ (124,274) $ (740,963)
Ending Balance, shares at Mar. 31, 2022 95,838,033 95,838,033      
v3.22.1
Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit (Parenthetical)
 3 Months Ended
Mar. 31, 2022
shares
Statement Of Stockholders Equity [Abstract]  
Repurchase of treasury shares, shares 1,535,427
v3.22.1
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Cash Flows From Operating Activities:    
Net loss $ (8,987) $ (44,884)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization 38,612 36,558
Amortization of debt issuance costs and discounts 1,532 1,717
Deferred income tax benefit (6,531) (5,773)
Equity-based compensation 6,982 4,473
Other, including loss on sale or disposal of assets, net 4,420 487
Changes in assets and liabilities:    
Accounts receivable 3,408 (28,548)
Inventories (15,601) 1,854
Prepaid expenses and other current assets (7,653) (2,533)
Accounts payable and accrued expenses 5,599 (2,226)
Accrued salaries, wages and benefits (2,841) 4,246
Deferred revenue 53,584 66,386
Other accrued liabilities (5,675) (11,887)
Right of use assets and operating lease liabilities 201 115
Other assets and liabilities 3,744 (1,592)
Net cash provided by operating activities 70,794 18,393
Cash Flows From Investing Activities:    
Capital expenditures (35,110) (15,298)
Net cash used in investing activities (35,110) (15,298)
Cash Flows From Financing Activities:    
Repayments of long-term debt (3,000) (3,876)
Purchase of treasury stock (89,736)  
Payment of tax withholdings on equity-based compensation through shares withheld (7,738) (1,971)
Exercise of stock options 1,127 2,393
Other financing activities (211) (2,158)
Net cash used in financing activities (99,558) (5,612)
Change in Cash and Cash Equivalents, including Restricted Cash (63,874) (2,517)
Cash and Cash Equivalents, including Restricted Cash—Beginning of period 444,486 435,225
Cash and Cash Equivalents, including Restricted Cash—End of period 380,612 432,708
Supplemental Disclosure of Noncash Investing and Financing Activities    
Capital expenditures in accounts payable 31,483 15,763
Treasury stock purchases not yet settled in other accrued liabilities $ 20,169  
Other financing arrangements   $ 4,239
v3.22.1
Description of the Business and Basis of Presentation
 3 Months Ended
Mar. 31, 2022
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); 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 Sesame Place theme parks in Langhorne, Pennsylvania and San Diego, California.

Impact of Global COVID-19 Pandemic

The Company’s results of operations for the three months ended March 31, 2022 and 2021 continue to be impacted by the global COVID-19 pandemic due in part to a decline in both international and group-related attendance in both periods.  Additionally, results of operations for the three months ended March 31, 2021 were also significantly impacted by the following factors: (i) capacity limitations, modified/limited operations and/or temporary park closures; (ii) decreased demand due to public concerns associated with the pandemic; and (iii) restrictions on international travel.  In particular, the Company’s SeaWorld park in California was closed at the beginning of 2021 due to State of California guidance.  The Company was able to reopen this park on February 6, 2021 on a limited basis, following California guidance for reopening zoos. Subsequently, on April 12, 2021, in accordance with California guidance, this park resumed operations as a theme park with restricted capacity. Separately, during the first quarter of 2021, the Company’s Busch Gardens park in Virginia was also significantly impacted by state restrictions.  For example, at the beginning of 2021, the State of Virginia had a state mandated capacity restriction of approximately 4,000 guests at a time for this park. On February 1, 2021, in consultation with the State of Virginia, the Company further increased capacity to approximately 6,000 guests.  The Company was able to further increase capacity for this park on April 1, 2021 to approximately 13,000 guests. By the end of the second quarter of 2021, all of the Company’s 12 parks were open and operating without COVID-19 related capacity limitations. The Company continuously monitors guidance from federal, state and local authorities and engages with governmental authorities as well as medical/scientific consultants. The Company may adjust its plans accordingly as laws change and new information and guidance becomes available.  The COVID-19 pandemic has had, and may continue to have, a material impact on the Company’s financial results.  

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, 2021 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, 2021 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, 2022 or any future period due in part 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 were historically only open for a portion of the year.  However, during 2021, the Company added additional operating days for three of these parks.  In particular, the Company began year-round operations at its SeaWorld park in Texas and began to operate on select days on a year round basis at its Busch Gardens park in Virginia and its Sesame Place park in Pennsylvania.   

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, the valuation of goodwill and other indefinite-lived intangible assets and reviews for potential impairment of long-lived assets. Estimates are based on various factors including current and historical trends, as well as other pertinent company and industry data.  The Company regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes.  Actual results could differ from those estimates. Based on the uncertainty relating to the COVID-19 pandemic, including but not limited to the impact or timing of government restrictions, any future capacity limitations due to social distancing guidelines, public sentiment on social gatherings, travel and attendance patterns, travel restrictions, effectiveness and adoption of vaccines, the impact of new variants, potential supply chain disruptions and additional actions which could be taken by government authorities to manage the pandemic, the Company is not certain of the ultimate impact the COVID-19 pandemic could have on its estimates, business or results of operations.

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”), as a basis for allocating resources and assessing performance. Each theme park has been identified as an operating segment and meets the criteria for aggregation due to similar economic characteristics. In addition, all of the Company’s 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 prepaid expenses and 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,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Cash and cash equivalents

 

$

380,008

 

 

$

443,707

 

Restricted cash, included in prepaid expenses and other current assets

 

 

604

 

 

 

779

 

Total cash, cash equivalents and restricted cash

 

$

380,612

 

 

$

444,486

 

Share Repurchase Program and Treasury Stock

From time to time, the Company’s Board of Directors (the “Board”) may authorize share repurchases of common stock.  Shares repurchased under Board authorizations are currently held in treasury for general corporate purposes.  The Company accounts for treasury stock on the trade date under the cost method.  Treasury stock at March 31, 2022 and December 31, 2021 is reflected as a reduction within stockholders’ deficit.  See further discussion of the Company’s share repurchase program in Note 10–Stockholders’ Deficit.

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 redemption rates using historical and forecasted attendance trends by park for similar products. Attendance trends factor in seasonality and are adjusted based on actual trends periodically. These estimated redemption rates impact the timing of when revenue is recognized on these products. Actual results could materially differ from these estimates based on actual attendance patterns. Revenue is recognized on a pro-rata basis based on the estimated allocated selling price of the admission product. For pass products purchased on an installment plan that have met their initial commitment period and have transitioned to a month-to-month basis, monthly charges are recognized as revenue as payments are received each month. 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 food and beverage, merchandise, parking and other in-park products and also includes other miscellaneous revenue which is not significant in the periods presented.  The Company recognizes revenue for food and beverage, merchandise and other in-park products when the related products or services are received by the guests.  

Deferred revenue primarily includes revenue associated with pass products, admission or in-park products or services with a future intended use date and contract liability balances related to licensing and international agreements collected in advance of the Company satisfying its performance obligations and is expected to be recognized in future periods. At March 31, 2022 and December 31, 2021, the long-term portion of deferred revenue included in other liabilities in the accompanying unaudited condensed consolidated balance sheets primarily relates to the Company’s international agreement, as discussed in the following section.

The following table reflects the Company’s deferred revenue balance as of March 31, 2022 and December 31, 2021:   

  

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Deferred revenue, including long-term portion

 

$

223,514

 

 

$

169,333

 

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

 

 

15,468

 

 

 

14,540

 

Deferred revenue, short-term portion

 

$

208,046

 

 

$

154,793

 

 

 

 

 

 

 

 

 

 

International Agreements

The Company has previously received $10.0 million in deferred revenue recorded in other liabilities related to a nonrefundable payment received from a partner in connection with a project in the Middle East to provide certain services pertaining to the planning and design of SeaWorld Abu Dhabi, a marine life theme park on Yas Island (“the Middle East Project”), with funding received expected to offset internal expenses. The Company also receives additional funds from its partner related to agreed-upon services and reimbursements of costs incurred by the Company on behalf of the Middle East Project, including approximately $5.0 million and $4.5 million of additional deferred revenue recorded in other liabilities in the accompanying consolidated balance sheets at March 31, 2022 and December 31, 2021, respectively. Separately, the Company recognizes an asset for the costs incurred to fulfill the contract if the costs are specifically identifiable, enhance resources that will be used to satisfy performance obligations in the future and are expected to be recovered. As a result, approximately $10.6 million and $9.6 million of costs incurred related to the Middle East Project are recorded in other assets in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively.  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. Construction for the Middle East Project is on track and scheduled to be completed by the end of 2022.
v3.22.1
Recent Accounting Pronouncements
 3 Months Ended
Mar. 31, 2022
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”). There are no recent accounting pronouncements or recently implemented accounting standards that are expected to have a material impact on the Company’s unaudited condensed consolidated financial statements or disclosures.

 
v3.22.1
Loss per Share
 3 Months Ended
Mar. 31, 2022
Loss Per Share [Abstract]  
Loss per Share

3. LOSS PER SHARE

Loss per share is computed as follows:

 

 

 

For the Three Months Ended March 31,

 

 

 

 

2022

 

 

2021

 

 

 

 

Net Loss

 

 

Shares

 

 

Per

Share

Amount

 

 

Net Loss

 

 

Shares

 

 

Per

Share

Amount

 

 

 

 

(In thousands, except per share amounts)

 

 

Basic loss per share

 

$

(8,987

)

 

 

75,624

 

 

$

(0.12

)

 

$

(44,884

)

 

 

78,458

 

 

$

(0.57

)

 

Effect of dilutive incentive-based awards

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

Diluted loss per share

 

$

(8,987

)

 

 

75,624

 

 

$

(0.12

)

 

$

(44,884

)

 

 

78,458

 

 

$

(0.57

)

 

 

 

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 awards). Unvested restricted stock awards are eligible to receive dividends; if any, however, dividend rights will be forfeited if the award does not vest.  Accordingly, only vested shares of formerly restricted stock are included in the calculation of basic loss 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 certain unvested restricted stock awards and certain shares of common stock that are issuable upon exercise of stock options. There were approximately 1,555,000 and 2,366,000 potentially dilutive shares excluded from the computation of diluted loss per share during the three months ended March 31, 2022 and 2021, respectively, as their effect would have been anti-dilutive due to the Company’s net loss in those periods. Approximately 1,057,000 and 1,240,000 of the Company’s outstanding performance-vesting restricted stock awards as of March 31, 2022 and 2021, 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.  
v3.22.1
Income Taxes
 3 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

4. INCOME TAXES

Income tax expense or benefit and the Company’s effective tax rate is based upon the tax rate expected for the full calendar year applied to the year-to-date pretax income or loss of the interim period, plus the tax effect of any year-to-date discrete tax items. The Company’s consolidated effective tax rate for the three months ended March 31, 2022 was 41.4% and differs from the effective statutory federal income tax rate of 21.0% primarily due to the tax benefit related to equity-based compensation which vested during the quarter. The Company’s consolidated effective tax rate for the three months ended March 31, 2021 was 10.3% and differs from the effective statutory federal income tax rate of 21.0% primarily due to valuation allowance adjustments on federal and state net operating loss carryforwards during the three months ended March 31, 2021.

Due to the uncertainty of realizing the benefit from deferred tax assets, tax positions are reviewed at least quarterly by assessing future expected taxable income from all sources.  Realization of deferred tax assets, primarily arising from net operating loss carryforwards and charitable contribution carryforwards, is dependent upon generating sufficient taxable income prior to expiration of the carryforwards.  Based on its analysis, the Company believes that some of its deferred tax assets may not be realized. As of March 31, 2022 and December 31, 2021, the Company’s valuation allowance consisted of approximately $4.8 million, net of federal tax benefit, on the deferred tax assets related to state net operating loss carryforwards.

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

The computation of the estimated annual effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the forecasted pre-tax income or loss for the year, projections of the proportion of income and/or loss earned and taxed in respective jurisdictions, permanent and temporary differences, and the likelihood of the realizability of deferred tax assets generated in the current year. The volatile global economic conditions resulting from the COVID-19 pandemic, the impacts of which are difficult to predict, may cause fluctuations in the Company’s forecasted pre-tax income or loss for the year, which could create volatility in its estimated annual effective tax rate. The estimates used to compute the provision or benefit for income taxes may change as new events occur, additional information is obtained or as the Company’s tax environment changes. To the extent that the estimated annual effective tax rate changes, the effect of the change on prior interim periods is included in the income tax provision in the period in which the change in estimate occurs. The Company’s valuation allowances, in part, also rely on estimates and assumptions related to future financial performance. Given the macroeconomic environment related to the COVID-19 pandemic and the uncertainties regarding the related impact on financial performance, the Company’s valuation allowances may need to be further adjusted in the future.
v3.22.1
Other Accrued Liabilities
 3 Months Ended
Mar. 31, 2022
Payables And Accruals [Abstract]  
Other Accrued Liabilities

5. OTHER ACCRUED LIABILITIES

Other accrued liabilities at March 31, 2022 and December 31, 2021, consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Accrued interest

 

$

13,553

 

 

$

17,372

 

Accrued taxes

 

 

4,908

 

 

 

784

 

Self-insurance reserve

 

 

8,210

 

 

 

8,210

 

Other

 

 

37,381

 

 

 

19,445

 

Total other accrued liabilities

 

$

64,052

 

 

$

45,811

 

 

As of March 31, 2022 and December 31, 2021, other accrued liabilities above includes approximately $10.9 million related to certain contractual liabilities arising from the temporary COVID-19 park closures. As of March 31, 2022, other accrued liabilities above also includes approximately $20.2 million related to share repurchases not yet settled. See further discussion of the Company’s share repurchase program in Note 10–Stockholders’ Deficit.
v3.22.1
Long-Term Debt
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Long-Term Debt

6. LONG-TERM DEBT

Long-term debt, net, as of March 31, 2022 and December 31, 2021 consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Term B Loans (effective interest rate of 3.50% at March 31, 2022 and December 31, 2021)

 

$

1,194,000

 

 

$

1,197,000

 

Senior Notes due 2029 (interest rate of 5.25%)

 

 

725,000

 

 

 

725,000

 

First-Priority Senior Secured Notes due 2025 (interest rate of 8.75%)

 

 

227,500

 

 

 

227,500

 

Total long-term debt

 

 

2,146,500

 

 

 

2,149,500

 

    Less: discounts and debt issuance costs

 

 

(31,133

)

 

 

(32,665

)

    Less: current maturities

 

 

(12,000

)

 

 

(12,000

)

Total long-term debt, net

 

$

2,103,367

 

 

$

2,104,835

 

 

Refinancing Transactions

On August 25, 2021 (the “Closing Date”), SEA entered into a Restatement Agreement (the “Restatement Agreement”) pursuant to which SEA amended and restated its existing senior secured credit agreement dated as of December 1, 2009 (as amended, restated, supplemented or otherwise modified from time to time, and the senior secured credit facilities thereunder (the “Existing Secured Credit Facilities”), and, as amended and restated by the Restatement Agreement (the “Amended and Restated Credit Agreement”).

The Amended and Restated Credit Agreement provides for senior secured financing of up to $1,585.0 million, consisting of:

 

(i)

a first lien term loan facility (the “Term Loan Facility” and the loans thereunder, the “Term B Loans”), in an aggregate principal amount of $1,200.0 million which was fully drawn on the Closing Date. The Term Loan Facility will mature on August 25, 2028; and

 

(ii)

a first lien revolving credit facility (the “Revolving Credit Facility” (and the loans thereunder, the “Revolving Loans”) and, together with the Term Loan Facility, the “Senior Secured Credit Facilities”), in an aggregate committed principal amount of $385.0 million, including both a letter of credit sub-facility and a swingline loan sub-facility.  The Revolving Credit Facility will mature on August 25, 2026.

 

Also on August 25, 2021, SEA completed a private offering of $725.0 million aggregate principal amount of 5.250% senior notes due 2029 (the “Senior Notes”). See Senior Notes section which follows for more details.

The Company used proceeds of the Term B Loans drawn on the Closing Date, together with the proceeds from the offering of the Senior Notes and cash on hand, to redeem SEA’s then outstanding 9.500% second-priority senior secured notes due 2025 (the “Second-Priority Senior Secured Notes”), to refinance the SEA’s Existing Secured Credit Facilities, and to pay related expenses of the offering and refinancing (collectively, the “Refinancing Transactions”). As a result of the Refinancing Transactions, on August 25, 2021, SEA terminated its Existing Secured Credit Facilities and associated Term B-5 Loans and repaid all of its related outstanding obligations in respect of principal, interest and fees.

Senior Secured Credit Facilities

Borrowings under the Term B Loans bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) a base rate equal to the higher of (a) the federal funds rate plus 1/2 of 1%, (b) the rate of interest quoted in the print edition of the Wall Street Journal, Money Rates Section as the prime rate as in effect from time to time and (c) one-month Adjusted LIBOR plus 1% per annum (provided that in no event shall such ABR rate with respect to the Term B Loans be less than 1.50% per annum) (“ABR”), in each case, plus an applicable margin of 2.00% or (ii) a LIBOR rate for the applicable interest period (provided that in no event shall such LIBOR rate with respect to the Term B Loans be less than 0.50% per annum) (“LIBOR”) plus an applicable margin of 3.00%.

Borrowings under the Revolving Loans bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) ABR (provided that in no event shall such ABR rate with respect to the Revolving Loans be less than 1.00% per annum) plus an applicable margin equal to 1.75% or (ii) LIBOR (provided that in no event shall such LIBOR rate with respect to the Revolving Loans be less than 0.00%) plus an applicable margin of 2.75%. The applicable margin for borrowings of Revolving Loans are subject to one 25 basis point step-down upon achievement by the Company of certain corporate credit ratings.

In addition to paying interest on the outstanding principal under the Senior Secured Credit Facilities, the Company is required to pay a commitment fee equal to 0.50% per annum to the lenders under the Revolving Credit Facility in respect of the unutilized commitments thereunder. The Company will also be required to pay customary agency fees as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR rate borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee computed at a rate equal to 0.125% per annum on the daily stated amount of each letter of credit.

The Senior Secured Credit Facilities require scheduled amortization payments on the term loans in quarterly amounts equal to 0.25% of the original principal amount of the Term B Loans, payable quarterly, with the balance to be paid at maturity.

In addition, the Senior Secured Credit Facilities require the Company to prepay outstanding term loan borrowings, subject to certain exceptions, with:

 

-

beginning with the fiscal year ending on December 31, 2022, 50% (which percentage will be reduced to 25% and 0% if the Company satisfies certain net first lien senior secured leverage ratios) of annual excess cash flow, as defined under the Senior Secured Credit Facilities;

 

-

100% of the net cash proceeds of all non-ordinary course asset sales or other non-ordinary course dispositions of property, in each case subject to certain exceptions and reinvestment rights;

 

-

100% of the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Senior Secured Credit Facilities.

The Company may voluntarily repay outstanding loans under the Senior Secured Credit Facilities at any time, without prepayment premium or penalty, except in connection with a repricing event in respect of the term loans as described below, subject to customary “breakage” costs with respect to LIBOR rate loans.

All borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including the absence of a default or event of default and the accuracy of representations and warranties in all material respects.

All obligations under the Senior Secured Credit Facilities are unconditionally guaranteed by the Company on a limited-recourse basis and each of SEA’s existing and future direct and indirect wholly owned material domestic subsidiaries, subject to certain exceptions. The obligations are secured by a pledge of SEA’s capital stock directly held by the Company and substantially all of SEA’s assets and those of each guarantor (other than the Company), including a pledge of the capital stock of all entities directly held by SEA or the guarantors, in each case subject to exceptions. Such security interests consist of a first-priority lien with respect to the collateral.

As of March 31, 2022, SEA had approximately $19.7 million of outstanding letters of credit, leaving approximately $365.3 million available under the Revolving Credit Facility, which was not drawn upon as of March 31, 2022.

Senior Notes

The Senior Notes will mature on August 15, 2029. Interest on the Senior Notes will accrue at 5.250% per annum and will be paid semi-annually, in arrears on February 15 and August 15 of each year, with the first interest payment paid on February 15, 2022.

On or after August 15, 2024, SEA may redeem the Senior Notes, in whole at any time or in part from time to time, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12-month period commencing on August 15 of the years as follows: (i) in 2024 at 102.625%; (ii) in 2025 at 101.313%; and (iii) in 2026 and thereafter at 100%. In addition, prior to August 15, 2024, SEA may redeem the Senior Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus the “Applicable Premium” and accrued and unpaid interest, if any, to, but excluding, the redemption date. Notwithstanding the foregoing, subject to the provisions set forth in the Indenture, at any time and from time to time on or prior to August 15, 2024, SEA may redeem in the aggregate up to 40% of the original aggregate principal amount of the Senior Notes (calculated after giving effect to any issuance of additional Senior Notes) in an aggregate amount equal to the net cash proceeds of one or more equity offerings at a redemption price equal to 105.250%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Additionally, upon the occurrence of specified change of control events, each holder will have the right to require SEA to repurchase all or any part of such holder’s notes at a purchase price in cash equal to 101%.

SEA’s obligations under the Senior Notes and related indenture are guaranteed, jointly and severally, on a senior secured basis, by the Guarantors, as defined, in accordance with the provisions of the indenture.

First-Priority Senior Secured Notes

The 8.750% first-priority senior secured notes (the “First-Priority Senior Secured Notes”) mature on May 1, 2025 and have interest payment dates of May 1 and November 1.  On or after May 1, 2022, SEA may redeem the First-Priority Senior Secured Notes at its option, in whole at any time or in part from time to time, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12-month period commencing on May 1 of the years as follows: (i) in 2022 at 104.375%; (ii) in 2023 at 102.188%; and (iii) in 2024 and thereafter at 100%. SEA may also redeem in the aggregate (at a redemption price expressed as a percentage of principal amount thereof): (i) 100% of the First-Priority Senior Secured Notes after certain events constituting a change of control at a redemption price of 101%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date and (ii) up to 40% of the original aggregate principal amount of the First-Priority Senior Secured Notes with amounts equal to the net cash proceeds of certain equity offerings at a redemption price  of 108.750%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The First-Priority Senior Secured Notes are fully and unconditionally guaranteed by the Company, any subsidiary of the Company that directly or indirectly owns 100% of the issued and outstanding equity interests of SEA, and subject to certain exceptions, each of SEA’s subsidiaries that guarantees SEA’s existing senior secured credit facilities.

Second-Priority Senior Secured Notes

The Second-Priority Senior Secured Notes were scheduled to mature on August 1, 2025 and had interest payment dates of February 1 and August 1 with the first interest payment paid on February 1, 2021. See additional discussion in the preceding Refinancing Transactions section regarding the full redemption of the Second-Priority Senior Secured Notes in 2021.

Restrictive Covenants

The Amended and Restated Credit Agreement governing the Senior Secured Credit Facilities and the indentures governing the Senior Notes and First-Priority Senior Secured Notes (collectively, the “Debt Agreements”), contain covenants that limit the ability of the Company, SEA and its restricted subsidiaries to, among other things: (i) incur additional indebtedness or issue certain preferred shares; (ii) make dividend payments on or make other distributions in respect of their capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) create or permit to exist dividend and/or payment restrictions affecting their restricted subsidiaries; (vi) create liens on assets; (vii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; and (viii) enter into certain transactions with their affiliates. These covenants are subject to a number of important limitations and exceptions and are based, in part on the Company’s ability to satisfy certain tests and engage in certain transactions based on Covenant Adjusted EBITDA.  Covenant Adjusted EBITDA differs from Adjusted EBITDA due to certain adjustments permitted under the relevant agreements, including but not limited to estimated cost savings, recruiting and retention costs, public company compliance costs, litigation and arbitration costs and other costs and adjustments as permitted under the Debt Agreements.  

The Debt Agreements contain certain customary events of default, including relating to a change of control. If an event of default occurs, the lenders under the Debt Agreements will be entitled to take various actions, including the acceleration of amounts due under the Debt Agreements and all actions permitted to be taken by a secured creditor in respect of the collateral securing the Debt Agreements.

The Revolving Credit Facility requires that the Company, commencing as of the last day of the first full fiscal quarter after the Closing Date and subject to a testing threshold, comply on a quarterly basis with a maximum net first lien senior secured leverage ratio of 6.25 to 1.00. The testing threshold will be satisfied (and therefore the covenant must be complied with at the end of such quarter) if the aggregate amount of funded loans and issued letters of credit (excluding up to $30.0 million of undrawn letters of credit under the Revolving Credit Facility and letters of credit that are cash collateralized) under the Revolving Credit Facility on such date exceeds an amount equal to 35% of the then-outstanding commitments under the Revolving Credit Facility.

The Debt Agreements permit an unlimited capacity for restricted payments if the net total leverage ratio on a pro forma basis does not exceed 4.25 to 1.00 after giving effect to the payment of any such restricted payment. As of March 31, 2022, the net total leverage ratio as calculated under the Debt Agreements was 2.42 to 1.00.

As of March 31, 2022, SEA was in compliance with all covenants contained in the documents governing the Debt Agreements.

Long-term debt at March 31, 2022 is repayable as follows and does not include the impact of any future voluntary prepayments:

 

Years Ending December 31,

 

(In thousands)

 

Remainder of 2022

 

$

9,000

 

2023

 

 

12,000

 

2024

 

 

12,000

 

2025

 

 

239,500

 

2026

 

 

12,000

 

Thereafter

 

 

1,862,000

 

Total

 

$

2,146,500

 

 

Cash paid for interest relating to the Senior Notes, the Senior Secured Credit Facilities, and the Second-Priority Senior Secured Notes, net of amounts capitalized, as applicable, was $27.6 million and $35.8 million in the three months ended March 31, 2022 and 2021, respectively.
v3.22.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements

7. FAIR VALUE MEASUREMENTS

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

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

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

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

Of the Company’s long-term obligations as of March 31, 2022 and December 31, 2021, the Term B Loans are classified in Level 2 of the fair value hierarchy and the First-Priority Senior Secured Notes and the Senior Notes are classified in Level 1 of the fair value hierarchy. The fair value of the Term B Loans approximates their carrying value, excluding unamortized debt issuance costs and discounts, due to the variable nature of the underlying interest rates and the frequent intervals at which such interest rates are reset. The fair value of the First-Priority Senior Secured Notes and Senior Notes was determined using quoted prices in active markets for identical instruments. See Note 6–Long-Term Debt for further details.

The Company did not have any assets measured on a recurring basis at fair value at March 31, 2022 and December 31, 2021. The Company maintains its long-term liabilities at carrying value, net of unamortized debt issuance costs and discounts in the unaudited condensed consolidated balance sheet

The following table presents the Company’s estimated fair value measurements and related classifications for liabilities measured on a recurring basis as of March 31, 2022.  

 

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)

 

 

2022

 

Liabilities:

(In thousands)

 

Long-term obligations (a)

$

919,575

 

 

$

1,194,000

 

 

$

—

 

 

$

2,113,575

 

 

(a)

Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $12.0 million and long-term debt, net, of $2.103 billion as of March 31, 2022.

 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, 2021:

 

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)

 

 

2021

 

Liabilities:

(In thousands)

 

Long-term obligations (a)

$

977,594

 

 

$

1,197,000

 

 

$

—

 

 

$

2,174,594

 

 

(a)

Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $12.0 million and long-term debt, net, of $2.105 billion as of December 31, 2021.
v3.22.1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2022
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

8. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Securities Class Action Lawsuit

On June 14, 2018, a lawsuit captioned Highfields Capital I LP et al v. SeaWorld Entertainment, Inc. et al, 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. 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 film Blackfish on SeaWorld’s business. The complaint further alleges that such statements were made to induce plaintiffs to purchase common stock of the Company at artificially-inflated prices and that plaintiffs suffered investment losses as a result.  The plaintiffs have indicated to the Company they believe the damages are in the range of $26 million to $35 million before considering interest.  In 2018, defendants moved for partial dismissal of the complaint.  In 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. Discovery is complete and on April 19, 2022 the Court granted in part and denied in part the parties’ summary judgment and Daubert motions. Trial is set to begin September 20, 2022. The Company believes that the lawsuit is without merit and intends to defend the lawsuit vigorously. While there can be no assurance regarding the ultimate outcome of this lawsuit, the Company believes that any potential loss would not be material.

Other lawsuits

In October 2018, the Company received a demand letter from attorneys representing certain former employees who claim that the terms of their respective separation agreements entitle them to certain favorable modifications made to certain performance vesting restricted shares (the “Tranche 3 Shares”) issued under the Company’s 2013 Omnibus Incentive Plan (the “Plan”).

In November 2020, the Company filed in the Court of Chancery of the State of Delaware an action for declaratory judgment seeking a determination that the threatened claims of the former employees are time-barred and without merit. In response, the defendant former employees filed a motion to dismiss or in the alternative to stay and compel arbitration. The parties agreed to arbitrate whether the former employees’ claims are subject to arbitration. On October 21, 2021, the arbitrator determined that disputes related to the former employees’ claims for the vesting of the Tranche 3 Shares are governed by the forum selection clauses of the equity award amendments rather than the Company’s dispute resolution process. In terms of potential exposure, the value of the total shares at issue for these certain former employees depends largely upon the Company’s current share price, which fluctuates daily. Approximately 300,000 shares are at issue. The Company believes that the former employees’ claims are without merit and intends to defend vigorously its positions. While there can be no assurance regarding the ultimate outcome of this matter, the Company believes that any potential loss would not be material.

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

Pursuant to a license agreement (“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.  The Company’s principal commitments pursuant to the License Agreement include, among other items, the opening of a second standalone park (“Standalone Park”) (the Company opened the Standalone Park in San Diego on March 26, 2022) and minimum annual capital and marketing thresholds. After the opening of the second Standalone Park (counting the existing Sesame Place Standalone Park in Langhorne, Pennsylvania), SEA has the option to build additional Standalone Parks in the Sesame Territory within agreed upon timelines.  The License Agreement has an initial term through December 31, 2031, with an automatic additional 15-year extension plus a five-year option added to the term of the License Agreement from December 31st of the year of each new Standalone Park opening. As of March 31, 2022, the Company estimates the combined remaining liabilities and obligations for the License Agreement commitments could be up to approximately $25.0 million over the remaining term of the agreement.

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.
v3.22.1
Equity-Based Compensation
 3 Months Ended
Mar. 31, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Equity-Based Compensation

9. EQUITY-BASED COMPENSATION

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

Equity compensation expense is included in operating expenses and in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations as follows:

 

 

For the Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Equity compensation expense included in operating expenses

 

$

1,965

 

 

$

938

 

Equity compensation expense included in selling, general and administrative expenses

 

 

5,017

 

 

 

3,535

 

Total equity compensation expense

 

$

6,982

 

 

$

4,473

 

Omnibus Incentive Plan

The Company has reserved 15.0 million shares of common stock for issuance under its Omnibus Incentive Plan (the “Omnibus Incentive Plan”), of which approximately 7.5 million shares are available for future issuance as of March 31, 2022.

Bonus Performance Restricted Units  

During the three months ended March 31, 2022, the Company granted approximately 105,000 performance-vesting restricted units (the “Bonus Performance Restricted Units”) in accordance with its annual bonus plan for 2022 (the “2022 Bonus Plan”).  The 2022 Bonus Plan provides for bonus awards payable 50% in cash and 50% in performance-vesting restricted units (the “Bonus Performance Restricted Units”) and is based upon the Company’s achievement of specified performance goals, as defined by the 2022 Bonus Plan, with respect to the year ended December 31, 2022 (the “Fiscal 2022”).  The total number of units eligible to vest into shares of stock is based on the level of achievement of the targets for Fiscal 2022 which ranges from 0% (if below threshold performance), to 100% (if at target performance) with opportunities to earn above 100% when achievement is above the target performance for certain metrics.  

The Company also had an annual bonus plan for the fiscal year ended December 31, 2021 (“Fiscal 2021”), 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 2021.  Based on the Company’s actual Fiscal 2021 results, a portion of these Bonus Performance Restricted Units vested and were converted into approximately 120,000 shares in the three months ended March 31, 2022 and the remaining unvested units forfeited in accordance with their terms.

Long-term Incentive Performance Restricted Awards

During the three months ended March 31, 2022, the Company granted long-term incentive plan awards for 2022 (the “2022 Long-Term Incentive Grant”) which were comprised of approximately 50,000 nonqualified stock options (the “Long-Term Incentive Options”) and approximately 145,000 performance-vesting restricted units (the “Long-Term Incentive Performance Restricted Units”) (collectively, the “Long-Term Incentive Awards”).

Long-Term Incentive Options

The Long-Term Incentive Options vest over three years, with one-third vesting on each anniversary of the date of grant, subject to continued employment through the applicable vesting date. Equity compensation expense for these options is recognized for each tranche over the vesting period using the straight-line method. Upon stock option exercises, authorized but unissued shares are issued by the Company.

Long-Term Incentive Performance Restricted Units

The Long-Term Incentive Performance Restricted Units are eligible to vest during the three-year performance period beginning on January 1, 2022 and ending on December 31, 2024 (or, extended through December 31, 2025, as applicable) (the “Performance Period”) based upon the Company’s achievement of specified performance goals during the Performance Period.  The total number of Long-Term Incentive Performance Restricted Units eligible to vest will be based on the level of achievement of the performance goals and ranges from 0% (if below threshold performance) up to 150% (for maximum performance). Upon achievement of at least the threshold performance goals, 50% of the award for a given level of performance will vest, with the remaining 50% subject to a one-year performance test period. Performance for the test period must meet or exceed the prior year’s performance before up to the remaining 50% of the units can be earned.

Other

During the three months ended March 31, 2022, a portion of the previously granted long-term incentive performance restricted units under the 2019 Long-Term Incentive Plan vested based on the Company’s actual Fiscal 2021 results. The remainder of the 2019 Long-Term Incentive Plan awards are eligible to vest in 2023 and/or 2024.

The Company recognizes equity compensation expense for its performance-vesting restricted awards ratably over the related performance period, if the performance condition is probable of being achieved. If the probability of vesting related to awards that were previously considered not probable of vesting 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.  
v3.22.1
Stockholders' Deficit
 3 Months Ended
Mar. 31, 2021
Equity [Abstract]  
Stockholders' Deficit

10. STOCKHOLDERS’ DEFICIT

As of March 31, 2022, 95,838,033 shares of common stock were issued in the accompanying unaudited condensed consolidated balance sheet, which includes 21,488,469 shares of treasury stock held by the Company (see Share Repurchase Program discussion which follows) but excludes 7,214 unvested shares of common stock and 1,927,838 unvested restricted stock units or deferred stock units held by certain participants in the Company’s equity compensation plans or members of the Board (see Note 9–Equity-Based Compensation).

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.

On March 10, 2022, the Board approved a replenishment to the Share Repurchase Program of $228.2 million, bringing the total amount authorized for future share repurchases back up to $250.0 million. During the three months ended March 31, 2022, the Company repurchased 1,535,427 shares for an aggregate total of approximately $109.9 million. As of March 31, 2022, the Company had approximately $140.1 million available under the Share Repurchase Program. Subsequent to March 31, 2022, the Company repurchased 2,027,659 shares for an aggregate total of approximately $140.1 million, leaving no amount remaining under the Share Repurchase Program as of April 29, 2022.

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.
v3.22.1
Description of the Business and Basis of Presentation (Policies)
 3 Months Ended
Mar. 31, 2022
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); 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 Sesame Place theme parks in Langhorne, Pennsylvania and San Diego, California.

Impact of Global COVID-19 Pandemic

Impact of Global COVID-19 Pandemic

The Company’s results of operations for the three months ended March 31, 2022 and 2021 continue to be impacted by the global COVID-19 pandemic due in part to a decline in both international and group-related attendance in both periods.  Additionally, results of operations for the three months ended March 31, 2021 were also significantly impacted by the following factors: (i) capacity limitations, modified/limited operations and/or temporary park closures; (ii) decreased demand due to public concerns associated with the pandemic; and (iii) restrictions on international travel.  In particular, the Company’s SeaWorld park in California was closed at the beginning of 2021 due to State of California guidance.  The Company was able to reopen this park on February 6, 2021 on a limited basis, following California guidance for reopening zoos. Subsequently, on April 12, 2021, in accordance with California guidance, this park resumed operations as a theme park with restricted capacity. Separately, during the first quarter of 2021, the Company’s Busch Gardens park in Virginia was also significantly impacted by state restrictions.  For example, at the beginning of 2021, the State of Virginia had a state mandated capacity restriction of approximately 4,000 guests at a time for this park. On February 1, 2021, in consultation with the State of Virginia, the Company further increased capacity to approximately 6,000 guests.  The Company was able to further increase capacity for this park on April 1, 2021 to approximately 13,000 guests. By the end of the second quarter of 2021, all of the Company’s 12 parks were open and operating without COVID-19 related capacity limitations. The Company continuously monitors guidance from federal, state and local authorities and engages with governmental authorities as well as medical/scientific consultants. The Company may adjust its plans accordingly as laws change and new information and guidance becomes available.  The COVID-19 pandemic has had, and may continue to have, a material impact on the Company’s financial results.  
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, 2021 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, 2021 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, 2022 or any future period due in part 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 were historically only open for a portion of the year.  However, during 2021, the Company added additional operating days for three of these parks.  In particular, the Company began year-round operations at its SeaWorld park in Texas and began to operate on select days on a year round basis at its Busch Gardens park in Virginia and its Sesame Place park in Pennsylvania.   

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, the valuation of goodwill and other indefinite-lived intangible assets and reviews for potential impairment of long-lived assets. Estimates are based on various factors including current and historical trends, as well as other pertinent company and industry data.  The Company regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes.  Actual results could differ from those estimates. Based on the uncertainty relating to the COVID-19 pandemic, including but not limited to the impact or timing of government restrictions, any future capacity limitations due to social distancing guidelines, public sentiment on social gatherings, travel and attendance patterns, travel restrictions, effectiveness and adoption of vaccines, the impact of new variants, potential supply chain disruptions and additional actions which could be taken by government authorities to manage the pandemic, the Company is not certain of the ultimate impact the COVID-19 pandemic could have on its estimates, business or results of operations.
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”), as a basis for allocating resources and assessing performance. Each theme park has been identified as an operating segment and meets the criteria for aggregation due to similar economic characteristics. In addition, all of the Company’s 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 prepaid expenses and 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,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Cash and cash equivalents

 

$

380,008

 

 

$

443,707

 

Restricted cash, included in prepaid expenses and other current assets

 

 

604

 

 

 

779

 

Total cash, cash equivalents and restricted cash

 

$

380,612

 

 

$

444,486

 
Share Repurchase Program and Treasury Stock

Share Repurchase Program and Treasury Stock

From time to time, the Company’s Board of Directors (the “Board”) may authorize share repurchases of common stock.  Shares repurchased under Board authorizations are currently held in treasury for general corporate purposes.  The Company accounts for treasury stock on the trade date under the cost method.  Treasury stock at March 31, 2022 and December 31, 2021 is reflected as a reduction within stockholders’ deficit.  See further discussion of the Company’s share repurchase program in Note 10–Stockholders’ Deficit.
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 redemption rates using historical and forecasted attendance trends by park for similar products. Attendance trends factor in seasonality and are adjusted based on actual trends periodically. These estimated redemption rates impact the timing of when revenue is recognized on these products. Actual results could materially differ from these estimates based on actual attendance patterns. Revenue is recognized on a pro-rata basis based on the estimated allocated selling price of the admission product. For pass products purchased on an installment plan that have met their initial commitment period and have transitioned to a month-to-month basis, monthly charges are recognized as revenue as payments are received each month. 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 food and beverage, merchandise, parking and other in-park products and also includes other miscellaneous revenue which is not significant in the periods presented.  The Company recognizes revenue for food and beverage, merchandise and other in-park products when the related products or services are received by the guests.  

Deferred revenue primarily includes revenue associated with pass products, admission or in-park products or services with a future intended use date and contract liability balances related to licensing and international agreements collected in advance of the Company satisfying its performance obligations and is expected to be recognized in future periods. At March 31, 2022 and December 31, 2021, the long-term portion of deferred revenue included in other liabilities in the accompanying unaudited condensed consolidated balance sheets primarily relates to the Company’s international agreement, as discussed in the following section.

The following table reflects the Company’s deferred revenue balance as of March 31, 2022 and December 31, 2021:   

  

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Deferred revenue, including long-term portion

 

$

223,514

 

 

$

169,333

 

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

 

 

15,468

 

 

 

14,540

 

Deferred revenue, short-term portion

 

$

208,046

 

 

$

154,793

 

 

 

 

 

 

 

 

 

 

International Agreements

The Company has previously received $10.0 million in deferred revenue recorded in other liabilities related to a nonrefundable payment received from a partner in connection with a project in the Middle East to provide certain services pertaining to the planning and design of SeaWorld Abu Dhabi, a marine life theme park on Yas Island (“the Middle East Project”), with funding received expected to offset internal expenses. The Company also receives additional funds from its partner related to agreed-upon services and reimbursements of costs incurred by the Company on behalf of the Middle East Project, including approximately $5.0 million and $4.5 million of additional deferred revenue recorded in other liabilities in the accompanying consolidated balance sheets at March 31, 2022 and December 31, 2021, respectively. Separately, the Company recognizes an asset for the costs incurred to fulfill the contract if the costs are specifically identifiable, enhance resources that will be used to satisfy performance obligations in the future and are expected to be recovered. As a result, approximately $10.6 million and $9.6 million of costs incurred related to the Middle East Project are recorded in other assets in the accompanying unaudited condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively.  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. Construction for the Middle East Project is on track and scheduled to be completed by the end of 2022.
Recently Issued Accounting Pronouncements

The Company reviews new accounting pronouncements as they are issued or proposed by the Financial Accounting Standards Board (“FASB”). There are no recent accounting pronouncements or recently implemented accounting standards that are expected to have a material impact on the Company’s unaudited condensed consolidated financial statements or disclosures.

 
v3.22.1
Description of the Business and Basis of Presentation (Tables)
 3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Schedule Of Cash Cash Equivalents And Restricted Cash

Restricted cash is recorded in prepaid expenses and 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,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Cash and cash equivalents

 

$

380,008

 

 

$

443,707

 

Restricted cash, included in prepaid expenses and other current assets

 

 

604

 

 

 

779

 

Total cash, cash equivalents and restricted cash

 

$

380,612

 

 

$

444,486

 
Deferred Revenue Balances The following table reflects the Company’s deferred revenue balance as of March 31, 2022 and December 31, 2021:

  

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Deferred revenue, including long-term portion

 

$

223,514

 

 

$

169,333

 

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

 

 

15,468

 

 

 

14,540

 

Deferred revenue, short-term portion

 

$

208,046

 

 

$

154,793

 

 

 

 

 

 

 

 

 

 
v3.22.1
Loss per Share (Tables)
 3 Months Ended
Mar. 31, 2022
Loss Per Share [Abstract]  
Schedule of Loss per Share

Loss per share is computed as follows:

 

 

 

For the Three Months Ended March 31,

 

 

 

 

2022

 

 

2021

 

 

 

 

Net Loss

 

 

Shares

 

 

Per

Share

Amount

 

 

Net Loss

 

 

Shares

 

 

Per

Share

Amount

 

 

 

 

(In thousands, except per share amounts)

 

 

Basic loss per share

 

$

(8,987

)

 

 

75,624

 

 

$

(0.12

)

 

$

(44,884

)

 

 

78,458

 

 

$

(0.57

)

 

Effect of dilutive incentive-based awards

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

Diluted loss per share

 

$

(8,987

)

 

 

75,624

 

 

$

(0.12

)

 

$

(44,884

)

 

 

78,458

 

 

$

(0.57

)

 
v3.22.1
Other Accrued Liabilities (Tables)
 3 Months Ended
Mar. 31, 2022
Payables And Accruals [Abstract]  
Schedule of Other Accrued Liabilities

Other accrued liabilities at March 31, 2022 and December 31, 2021, consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Accrued interest

 

$

13,553

 

 

$

17,372

 

Accrued taxes

 

 

4,908

 

 

 

784

 

Self-insurance reserve

 

 

8,210

 

 

 

8,210

 

Other

 

 

37,381

 

 

 

19,445

 

Total other accrued liabilities

 

$

64,052

 

 

$

45,811

 

 
v3.22.1
Long-Term Debt (Tables)
 3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Summary of Long-Term Debt, Net

Long-term debt, net, as of March 31, 2022 and December 31, 2021 consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Term B Loans (effective interest rate of 3.50% at March 31, 2022 and December 31, 2021)

 

$

1,194,000

 

 

$

1,197,000

 

Senior Notes due 2029 (interest rate of 5.25%)

 

 

725,000

 

 

 

725,000

 

First-Priority Senior Secured Notes due 2025 (interest rate of 8.75%)

 

 

227,500

 

 

 

227,500

 

Total long-term debt

 

 

2,146,500

 

 

 

2,149,500

 

    Less: discounts and debt issuance costs

 

 

(31,133

)

 

 

(32,665

)

    Less: current maturities

 

 

(12,000

)

 

 

(12,000

)

Total long-term debt, net

 

$

2,103,367

 

 

$

2,104,835

 

 
Summary of Long-Term Debt Repayable

Long-term debt at March 31, 2022 is repayable as follows and does not include the impact of any future voluntary prepayments:

 

Years Ending December 31,

 

(In thousands)

 

Remainder of 2022

 

$

9,000

 

2023

 

 

12,000

 

2024

 

 

12,000

 

2025

 

 

239,500

 

2026

 

 

12,000

 

Thereafter

 

 

1,862,000

 

Total

 

$

2,146,500

 
v3.22.1
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
Schedule of Estimated Fair Value Measurements and Related Classifications for Liabilities Measured on a Recurring Basis The following table presents the Company’s estimated fair value measurements and related classifications for liabilities measured on a recurring basis as of March 31, 2022

 

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)

 

 

2022

 

Liabilities:

(In thousands)

 

Long-term obligations (a)

$

919,575

 

 

$

1,194,000

 

 

$

—

 

 

$

2,113,575

 

 

(a)

Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $12.0 million and long-term debt, net, of $2.103 billion as of March 31, 2022.

 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, 2021:

 

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)

 

 

2021

 

Liabilities:

(In thousands)

 

Long-term obligations (a)

$

977,594

 

 

$

1,197,000

 

 

$

—

 

 

$

2,174,594

 

 

(a)

Reflected at carrying value, net of unamortized debt issuance costs and discounts, in the unaudited condensed consolidated balance sheet as current maturities of long-term debt of $12.0 million and long-term debt, net, of $2.105 billion as of December 31, 2021.
v3.22.1
Equity-Based Compensation (Tables)
 3 Months Ended
Mar. 31, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Schedule of Equity Compensation Expense

Equity compensation expense is included in operating expenses and in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations as follows:

 

 

For the Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Equity compensation expense included in operating expenses

 

$

1,965

 

 

$

938

 

Equity compensation expense included in selling, general and administrative expenses

 

 

5,017

 

 

 

3,535

 

Total equity compensation expense

 

$

6,982

 

 

$

4,473

 
v3.22.1
Description of the Business and Basis of Presentation - Additional Information (Detail)
$ in Thousands
 3 Months Ended
Mar. 31, 2022
USD ($)
Business
Segment
Dec. 31, 2021
USD ($)
Jun. 30, 2021
Business
Business Description And Basis Of Presentation [Line Items]      
Number of theme parks owned and operated | Business 12    
Number of theme parks reopened | Business     12
Number of reportable segment | Segment 1    
Long-term deferred revenue $ 15,468 $ 14,540  
Middle East Project [Member]      
Business Description And Basis Of Presentation [Line Items]      
Deferred costs incurred under Middle East Project $ 10,600 9,600  
Scheduled completion year of the project 2022    
Middle East Project [Member] | Other Liabilities [Member]      
Business Description And Basis Of Presentation [Line Items]      
Long-term deferred revenue $ 10,000    
Deferred revenue $ 5,000 $ 4,500  
v3.22.1
Description of the Business and Basis of Presentation - Summary of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($)
$ in Thousands
Mar. 31, 2022
Dec. 31, 2021
Mar. 31, 2021
Dec. 31, 2020
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract]        
Cash and cash equivalents $ 380,008 $ 443,707    
Restricted cash, included in prepaid expenses and other current assets $ 604 $ 779    
Restricted cash, current, asset, statement of financial position [extensible list] us-gaap:OtherAssetsCurrent us-gaap:OtherAssetsCurrent    
Total cash, cash equivalents and restricted cash $ 380,612 $ 444,486 $ 432,708 $ 435,225
v3.22.1
Description of the Business and Basis of Presentation - Deferred Revenue Balances (Detail) - USD ($)
$ in Thousands
Mar. 31, 2022
Dec. 31, 2021
Deferred Revenue Disclosure [Abstract]    
Deferred revenue, including long-term portion $ 223,514 $ 169,333
Less: Deferred revenue, long-term portion, included in other liabilities 15,468 14,540
Deferred revenue, short-term portion $ 208,046 $ 154,793
v3.22.1
Loss per Share - Schedule of Loss per Share (Detail) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Loss Per Share [Abstract]    
Basic loss per share $ (8,987) $ (44,884)
Diluted loss per share $ (8,987) $ (44,884)
Basic loss per share 75,624 78,458
Diluted loss per share 75,624 78,458
Basic loss per share $ (0.12) $ (0.57)
Diluted loss per share $ (0.12) $ (0.57)
v3.22.1
Loss per Share - Additional Information (Detail) - shares
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Loss Per Share [Line Items]    
Potentially dilutive securities excluded from computation of loss per share 1,555,000 2,366,000
Performance-vesting Restricted Awards [Member]    
Loss Per Share [Line Items]    
Contingently issuable shares excluded from the calculation of diluted loss per share 1,057,000 1,240,000
v3.22.1
Income Taxes - Additional Information (Detail) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Dec. 31, 2021
Income Tax Disclosure [Line Items]      
Effective tax rate 41.40% 10.30%  
Income tax rate at federal statutory rates 21.00% 21.00%  
State Tax Credit Carry Forwards [Member]      
Income Tax Disclosure [Line Items]      
Deferred tax assets, valuation allowance $ 4.8   $ 4.8
v3.22.1
Other Accrued Liabilities - Schedule of Other Accrued Liabilities (Detail) - USD ($)
$ in Thousands
Mar. 31, 2022
Dec. 31, 2021
Payables And Accruals [Abstract]    
Accrued interest $ 13,553 $ 17,372
Accrued taxes 4,908 784
Self-insurance reserve 8,210 8,210
Other 37,381 19,445
Total other accrued liabilities $ 64,052 $ 45,811
v3.22.1
Other Accrued Liabilities - Additional Information (Detail) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Payables And Accruals [Abstract]    
Nonrecurring contractual obligations from temporary COVID-19 park closures $ 10.9 $ 10.9
Liabilities related to share repurchases not yet settled $ 20.2  
v3.22.1
Long-Term Debt - Summary of Long-Term Debt, Net (Detail) - USD ($)
$ in Thousands
Mar. 31, 2022
Dec. 31, 2021
Debt Instrument [Line Items]    
Long-term debt $ 2,146,500 $ 2,149,500
Less: discounts and debt issuance costs (31,133) (32,665)
Less: current maturities (12,000) (12,000)
Total long-term debt, net 2,103,367 2,104,835
Senior Notes [Member]    
Debt Instrument [Line Items]    
Long-term debt 725,000 725,000
Term B Loans [Member]    
Debt Instrument [Line Items]    
Long-term debt 1,194,000 1,197,000
First-Priority Senior Secured Notes [Member]    
Debt Instrument [Line Items]    
Long-term debt $ 227,500 $ 227,500
v3.22.1
Long-Term Debt - Summary of Long-Term Debt, Net (Parenthetical) (Detail)
Mar. 31, 2022
Dec. 31, 2021
Aug. 25, 2021
Debt Instrument [Line Items]      
Debt instrument interest rate percentage     5.25%
Senior Notes [Member]      
Debt Instrument [Line Items]      
Debt instrument interest rate percentage 5.25% 5.25%  
Term B Loans [Member]      
Debt Instrument [Line Items]      
Debt instrument interest rate effective percentage 3.50% 3.50%  
First-Priority Senior Secured Notes [Member]      
Debt Instrument [Line Items]      
Debt instrument interest rate percentage 8.75% 8.75%  
v3.22.1
Long-Term Debt - Additional Information (Detail) - USD ($)
$ in Millions
 3 Months Ended
Aug. 25, 2021
Apr. 30, 2020
Mar. 31, 2022
Mar. 31, 2021
Dec. 31, 2021
Debt Instrument [Line Items]          
Senior debt $ 725.0        
Debt instrument interest rate percentage 5.25%        
Percentage of notes redeemed 9.50%        
Outstanding letters of credit     $ 19.7    
Senior Secured Credit Facilities [Member]          
Debt Instrument [Line Items]          
Debt Instrument Redemption Description In addition, the Senior Secured Credit Facilities require the Company to prepay outstanding term loan borrowings, subject to certain exceptions, with:   - beginning with the fiscal year ending on December 31, 2022, 50% (which percentage will be reduced to 25% and 0% if the Company satisfies certain net first lien senior secured leverage ratios) of annual excess cash flow, as defined under the Senior Secured Credit Facilities;   - 100% of the net cash proceeds of all non-ordinary course asset sales or other non-ordinary course dispositions of property, in each case subject to certain exceptions and reinvestment rights;   - 100% of the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Senior Secured Credit Facilities.        
Letter of credit participation fees     0.125%    
Cash paid for interest     $ 27.6 $ 35.8  
Senior Notes [Member]          
Debt Instrument [Line Items]          
Debt instrument, maturity date Aug. 15, 2029        
Debt instrument interest rate percentage     5.25%   5.25%
Debt Instrument Redemption Description On or after August 15, 2024, SEA may redeem the Senior Notes, in whole at any time or in part from time to time, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12-month period commencing on August 15 of the years as follows: (i) in 2024 at 102.625%; (ii) in 2025 at 101.313%; and (iii) in 2026 and thereafter at 100%. In addition, prior to August 15, 2024, SEA may redeem the Senior Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus the “Applicable Premium” and accrued and unpaid interest, if any, to, but excluding, the redemption date. Notwithstanding the foregoing, subject to the provisions set forth in the Indenture, at any time and from time to time on or prior to August 15, 2024, SEA may redeem in the aggregate up to 40% of the original aggregate principal amount of the Senior Notes (calculated after giving effect to any issuance of additional Senior Notes) in an aggregate amount equal to the net cash proceeds of one or more equity offerings at a redemption price equal to 105.250%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Additionally, upon the occurrence of specified change of control events, each holder will have the right to require SEA to repurchase all or any part of such holder’s notes at a purchase price in cash equal to 101%.        
Interest accrue on senior notes 5.25%        
Date of first required payment Feb. 15, 2022        
Redemption percentage 100.00%        
Initial aggregate principal amount, allowable redeemable percentage 40.00%        
Equity offerings at redemption price 105.25%        
Percentage Of notes redeemable after change of control 101.00%        
Senior Notes [Member] | Debt Instrument Redemption Period One [Member]          
Debt Instrument [Line Items]          
Redemption percentage 102.625%        
Senior Notes [Member] | Debt Instrument, Redemption, Period Two          
Debt Instrument [Line Items]          
Redemption percentage 101.313%        
Senior Notes [Member] | Debt Instrument, Redemption, Period Three          
Debt Instrument [Line Items]          
Redemption percentage 100.00%        
First-Priority Senior Secured Notes [Member]          
Debt Instrument [Line Items]          
Debt instrument, maturity date   May 01, 2025      
Debt instrument interest rate percentage   8.75%      
Debt Instrument Redemption Description   On or after May 1, 2022, SEA may redeem the First-Priority Senior Secured Notes at its option, in whole at any time or in part from time to time, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, if redeemed during the 12-month period commencing on May 1 of the years as follows: (i) in 2022 at 104.375%; (ii) in 2023 at 102.188%; and (iii) in 2024 and thereafter at 100%. SEA may also redeem in the aggregate (at a redemption price expressed as a percentage of principal amount thereof): (i) 100% of the First-Priority Senior Secured Notes after certain events constituting a change of control at a redemption price of 101%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date and (ii) up to 40% of the original aggregate principal amount of the First-Priority Senior Secured Notes with amounts equal to the net cash proceeds of certain equity offerings at a redemption price  of 108.750%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.      
Percentage of interest in subsidiary   100.00%      
First-Priority Senior Secured Notes [Member] | Debt Instrument Redemption Period One [Member]          
Debt Instrument [Line Items]          
Redemption percentage   104.375%      
First-Priority Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Two          
Debt Instrument [Line Items]          
Redemption percentage   102.188%      
First-Priority Senior Secured Notes [Member] | Debt Instrument, Redemption, Period Three          
Debt Instrument [Line Items]          
Redemption percentage   100.00%      
Second-Priority Senior Secured Notes [Member]          
Debt Instrument [Line Items]          
Debt instrument, maturity date     Aug. 01, 2025    
Date of first required payment     Feb. 01, 2021    
Revolving Credit Facility [Member]          
Debt Instrument [Line Items]          
Long term debt, outstanding amount     $ 365.3    
Revolving Credit Facility [Member] | Senior Secured Credit Facilities [Member]          
Debt Instrument [Line Items]          
Commitment fee payable by the company     0.50%    
Restrictive Covenants [Member]          
Debt Instrument [Line Items]          
Total net leverage ratio not to be exceeded     425.00%    
Restrictive Covenants [Member] | Debt Agreement [Member]          
Debt Instrument [Line Items]          
Total net leverage ratio, as calculated     242.00%    
Maximum | Restrictive Covenants [Member] | Senior Secured Credit Facilities [Member]          
Debt Instrument [Line Items]          
Credit facility agreement maximum required first lien secured leverage ratio     625.00%    
Excludable letters of credit under maximum required first lien secured leverage ratio     $ 30.0    
Minimum [Member] | Restrictive Covenants [Member] | Senior Secured Credit Facilities [Member]          
Debt Instrument [Line Items]          
Credit facility agreement maximum required first lien secured leverage ratio     100.00%    
Minimum percentage of funded loan and letters of credit for covenant to apply     35.00%    
Restatement Agreement | Maximum          
Debt Instrument [Line Items]          
Senior secured financing $ 1,585.0        
Term B Loans [Member]          
Debt Instrument [Line Items]          
Aggregate principal amount drawn $ 1,200.0        
Debt instrument, maturity date Aug. 25, 2028        
Term B Loans [Member] | Senior Secured Credit Facilities [Member]          
Debt Instrument [Line Items]          
Debt Instrument Redemption Description Borrowings under the Term B Loans bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) a base rate equal to the higher of (a) the federal funds rate plus 1/2 of 1%, (b) the rate of interest quoted in the print edition of the Wall Street Journal, Money Rates Section as the prime rate as in effect from time to time and (c) one-month Adjusted LIBOR plus 1% per annum (provided that in no event shall such ABR rate with respect to the Term B Loans be less than 1.50% per annum) (“ABR”), in each case, plus an applicable margin of 2.00% or (ii) a LIBOR rate for the applicable interest period (provided that in no event shall such LIBOR rate with respect to the Term B Loans be less than 0.50% per annum) (“LIBOR”) plus an applicable margin of 3.00%.        
Amortization Payments Of Term Loan 0.25%        
Senior Secured Credit Facilities [Member] | Revolving Credit Facility [Member]          
Debt Instrument [Line Items]          
Debt instrument, maturity date Aug. 25, 2026        
Aggregate principal amount $ 385.0        
Revolving Loans [Member] | Senior Secured Credit Facilities [Member]          
Debt Instrument [Line Items]          
Debt Instrument Redemption Description Borrowings under the Revolving Loans bear interest at a fluctuating rate per annum equal to, at the Company’s option, (i) ABR (provided that in no event shall such ABR rate with respect to the Revolving Loans be less than 1.00% per annum) plus an applicable margin equal to 1.75% or (ii) LIBOR (provided that in no event shall such LIBOR rate with respect to the Revolving Loans be less than 0.00%) plus an applicable margin of 2.75%. The applicable margin for borrowings of Revolving Loans are subject to one 25 basis point step-down upon achievement by the Company of certain corporate credit ratings.        
Redemption Price One [Member] | First-Priority Senior Secured Notes [Member]          
Debt Instrument [Line Items]          
Redemption percentage   101.00%      
Redemption Price Two [Member] | First-Priority Senior Secured Notes [Member]          
Debt Instrument [Line Items]          
Redemption percentage   108.75%      
v3.22.1
Long-Term Debt - Summary of Long-Term Debt Repayable (Detail) - USD ($)
$ in Thousands
Mar. 31, 2022
Dec. 31, 2021
Maturities Of Long Term Debt [Abstract]    
Remainder of 2022 $ 9,000  
2023 12,000  
2024 12,000  
2025 239,500  
2026 12,000  
Thereafter 1,862,000  
Long-term debt $ 2,146,500 $ 2,149,500
v3.22.1
Fair Value Measurements - Additional Information (Detail) - USD ($)
Mar. 31, 2022
Dec. 31, 2021
Fair Value Disclosures [Abstract]    
Assets measured at fair value $ 0 $ 0
v3.22.1
Fair Value Measurements - Schedule of Estimated Fair Value Measurements and Related Classifications for Liabilities Measured on a Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($)
$ in Thousands
Mar. 31, 2022
Dec. 31, 2021
Liabilities:    
Long-term obligations $ 2,113,575 $ 2,174,594
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)    
Liabilities:    
Long-term obligations 919,575 977,594
Significant Other Observable Inputs (Level 2) [Member]    
Liabilities:    
Long-term obligations $ 1,194,000 $ 1,197,000
v3.22.1
Fair Value Measurements - Schedule of Estimated Fair Value Measurements and Related Classifications for Liabilities Measured on a Recurring Basis (Parenthetical) (Detail) - USD ($)
$ in Thousands
Mar. 31, 2022
Dec. 31, 2021
Fair Value Disclosures [Abstract]    
Current maturities of long-term debt $ 12,000 $ 12,000
Total long-term debt, net $ 2,103,367 $ 2,104,835
v3.22.1
Commitments and Contingencies - Additional Information (Detail)
$ in Millions
 3 Months Ended
Mar. 31, 2022
USD ($)
shares
Loss Contingencies [Line Items]  
Number of shares at issue in legal matter | shares 300,000
License agreement term, description Pursuant to a license agreement (“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.  The Company’s principal commitments pursuant to the License Agreement include, among other items, the opening of a second standalone park (“Standalone Park”) (the Company opened the Standalone Park in San Diego on March 26, 2022) and minimum annual capital and marketing thresholds. After the opening of the second Standalone Park (counting the existing Sesame Place Standalone Park in Langhorne, Pennsylvania), SEA has the option to build additional Standalone Parks in the Sesame Territory within agreed upon timelines.  The License Agreement has an initial term through December 31, 2031, with an automatic additional 15-year extension plus a five-year option added to the term of the License Agreement from December 31st of the year of each new Standalone Park opening. As of March 31, 2022, the Company estimates the combined remaining liabilities and obligations for the License Agreement commitments could be up to approximately $25.0 million over the remaining term of the agreement.
Maximum  
Loss Contingencies [Line Items]  
Contingent value $ 35.0
Estimated combined remaining liabilities and obligations for license agreement commitments 25.0
Minimum [Member]  
Loss Contingencies [Line Items]  
Contingent value $ 26.0
v3.22.1
Equity-Based Compensation - Schedule of Equity Compensation Expense (Detail) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Total equity compensation expense $ 6,982 $ 4,473
Operating Expense [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Total equity compensation expense 1,965 938
Selling, General and Administrative Expenses [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Total equity compensation expense $ 5,017 $ 3,535
v3.22.1
Equity-Based Compensation - Additional Information (Detail)
 3 Months Ended
Mar. 31, 2022
shares
Bonus Performance Restricted Units [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Performance restricted units vested 120,000
Nonqualified Stock Options Granted [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Performance-vesting restricted units granted 50,000
Long-Term Incentive Performance Restricted Units [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Performance-vesting restricted units granted 145,000
Long Term Incentive Options [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Vesting period 3 years
Vesting rights one-third vesting on each anniversary of the date of grant
Omnibus Incentive Plan [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Common stock reserved for future issuance 15,000,000.0
Shares available for future issuance 7,500,000
2022 Bonus Plan [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Percentage of bonus payable by units 50.00%
2022 Bonus Plan [Member] | Bonus Performance Restricted Units [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Performance-vesting restricted units granted 105,000
Percentage of bonus payable by units 50.00%
2022 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%
2022 Bonus Plan [Member] | Target Performance Bonus Restricted Units [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Vesting percentage, per year 100.00%
2022 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%
Percentage of units earned 50.00%
2022 Long-Term Incentive Plan Maximum Performance [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Vesting percentage, per year 150.00%
v3.22.1
Stockholders' Deficit - Additional Information (Detail) - USD ($)
 1 Months Ended 3 Months Ended
Apr. 29, 2022
Mar. 31, 2022
Mar. 10, 2022
Dec. 31, 2021
Mar. 31, 2021
Dec. 31, 2020
Stockholders Equity [Line Items]            
Common stock, shares issued   95,838,033   95,541,992    
Treasury stock, shares   21,488,469   19,953,042    
Share Repurchase Program [Member]            
Stockholders Equity [Line Items]            
Share Repurchase Program, authorized amount   $ 250,000,000.0 $ 250,000,000.0      
Share Repurchase Program, replenishment of authorized amount     $ 228,200,000      
Stock Repurchase Program, number of shares repurchased   1,535,427        
Stock repurchases under Share Repurchase Program   $ 109,900,000        
Share Repurchase Program, remaining authorized repurchase amount   $ 140,100,000        
Share Repurchase Program [Member] | Subsequent Event [Member]            
Stockholders Equity [Line Items]            
Stock Repurchase Program, number of shares repurchased 2,027,659          
Stock repurchases under Share Repurchase Program $ 140,100,000          
Share Repurchase Program, remaining authorized repurchase amount $ 0          
Common Stock [Member]            
Stockholders Equity [Line Items]            
Common stock, shares issued   95,838,033   95,541,992 94,858,445 94,652,248
Number of unvested shares   7,214        
Restricted Stock Units [Member]            
Stockholders Equity [Line Items]            
Number of unvested shares   1,927,838