Sunday, September 19, 2021

USA theme park owners financial results for second quarter 2018

 

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[tab title=”Introduction”]

InPark presents the 2nd quarter financial results for the five largest publicly traded theme park operators based in the US. Each of the five is also included in the AECOM/TEA 2016 Theme Index’s list of the top 10 theme park groups worldwide. Click on the tabs for detailed financial information and a direct link to each company’s 10Q filing with the SEC. Results are for global theme park operations for each company and are for the approximate period April 1 – June 30, 2018.

NOTE: Disney’s fiscal year begins October 1. Results are for the company’s 3rd quarter, which runs Jan 1 – March 31.

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[tab title=”Disney”]

On August 7, The Walt Disney Company reported quarterly earnings for its third fiscal quarter ended June 30, 2018. Diluted earnings per share (EPS) for the quarter increased 29% to $1.95 from $1.51 in the prior-year quarter. Excluding certain items affecting comparability, EPS for the quarter increased 18% to $1.87 from $1.58 in the prior-year quarter. EPS for the nine months ended June 30, 2018 increased to $6.81 from $4.55 in the prior-year period. Excluding certain items affecting comparability, EPS for the nine months increased 21% to $5.60 from $4.63 in the prior-year period.

“We’re pleased with our results in the quarter, including a double-digit increase in earnings per share, and excited about the opportunities ahead for continued growth,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “Having earned the overwhelming support of shareholders, we are more enthusiastic about the 21st Century Fox acquisition than ever, and confident in our ability to fully leverage these assets along with our own incredible brands, franchises and businesses to drive significant value across the entire company.”

Parks and Resorts revenues for the quarter increased 6% to $5.2 billion and segment operating income increased 15% to $1.3 billion. Operating income growth for the quarter was due to increases across key operations. Results include an unfavorable impact due to the timing of the Easter holiday relative to our fiscal periods. One week of the Easter holiday fell in the third quarter of the current year whereas both holiday weeks fell in the third quarter of the prior year.

Higher operating income at our domestic parks and resorts was due to increased guest spending, partially offset by increased costs. Guest spending growth was due to increases in average ticket prices, food, beverage and merchandise spending and average daily hotel room rates. The increase in costs was due to labor and other cost inflation, partially offset by lower marketing costs. At our cruise line, growth was driven by higher passenger cruise days, which was primarily due to the Disney Fantasy dry-dock in the prior-year quarter.

The increased operating income at our international parks and resorts was due to growth at Shanghai Disney Resort and Hong Kong Disneyland Resort. Higher operating income at Shanghai Disney Resort was due to lower costs and attendance growth, partially offset by decreased guest spending. The decrease in guest spending was driven by lower average ticket prices, partially offset by higher food and beverage spending. At Hong Kong Disneyland Resort, the increase in operating income was primarily due to higher occupied room nights, average ticket prices and attendance.

Click here for Disney’s 10Q filing with the SEC

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[tab title=”Comcast”]

On July 26, Comcast Corporation reported results for the quarter ended June 30, 2018.

Brian L. Roberts , Chairman and Chief Executive Officer of Comcast Corporation , said, “We delivered fantastic results in the second quarter, including robust free cash flow of $4.3 billion. At Cable Communications , we added 182,000 customer relationships, largely driven by our addition of 260,000 broadband customers, which was the highest second quarter result in 10 years. These strong customer metrics were balanced with robust EBITDA growth, fueled by high-speed Internet and business services. NBCUniversal’s performance was highlighted by continued momentum in affiliate revenue at our cable networks business, and Telemundo presented its first ever FIFA World Cup TM which set multiple records for the network. Additionally, we are excited about the new attractions that we opened at each of our theme parks during the quarter, and pleased with the theatrical performance of Jurassic World: Fallen Kingdom . Overall, our successful results in the first half of 2018 underscore the strength we see across Comcast NBCUniversal.”

Consolidated Revenue for the second quarter of 2018 increased 2.1% to $21.7 billion . Consolidated Net Income Attributable to Comcast increased 27.6% to $3.2 billion . Consolidated Adjusted EBITDA increased 4.8% to $7.4 billion .

For the six months ended June 30, 2018, consolidated revenue increased 6.3% to $44.5 billioncompared to 2017. Consolidated net income attributable to Comcast increased 24.3% to $6.3 billion . Consolidated Adjusted EBITDA increased 4.1% to $14.7 billion .

Earnings per Share (EPS) for the second quarter of 2018 was $0.69 , an increase of 32.7% compared to the second quarter of 2017. On an adjusted basis, EPS increased 25.0% to $0.65.

For the six months ended June 30, 2018, EPS was $1.36 , a 28.3% increase compared to the prior year. On an adjusted basis, EPS increased 20.0% to $1.26.

Capital Expenditures decreased 3.3% to $2.3 billion in the second quarter of 2018. Cable Communications’ capital expenditures decreased 9.7% to $1.8 billion in the second quarter of 2018, reflecting lower spending on customer premise equipment and support capital, partially offset by increased investments in scalable infrastructure and line extensions. Cable capital expenditures represented 12.9% of Cable revenue in the second quarter of 2018 compared to 14.8% in last year’s second quarter. NBCUniversal’s capital expenditures of $461 million increased 36.3%, reflecting continued investment at Theme Parks.

For the six months ended June 30, 2018, capital expenditures decreased 4.1% to $4.2 billioncompared to 2017. Cable Communications’ capital expenditures decreased 7.6% to $3.5 billion and represented 12.7% of Cable revenue compared to 14.2% in 2017. NBCUniversal’scapital expenditures increased 17.1% to $730 million in 2018.

Net Cash Provided by Operating Activities was $7.1 billion in the second quarter of 2018. Free Cash Flow  was $4.3 billion.

For the six months ended June 30, 2018, net cash provided by operating activities was $12.5 billion . Free cash flow was $7.4 billion.

Dividends and Share Repurchases. During the second quarter of 2018, Comcast paid dividends totaling $878 million and repurchased 38.3 million of its common shares for $1.3 billion . In the first six months of 2018, Comcast repurchased 76.9 million of its common shares for $2.8 billion . As of June 30, 2018, Comcast had $4.25 billion available under its share repurchase authorization. Comcast expects to repurchase at least $5.0 billion of its Class A common stock during 2018, subject to market conditions.

Revenue for NBCUniversal remained flat at $8.3 billion in the second quarter of 2018. Adjusted EBITDA increased 4.2% to $2.2 billion , reflecting increases at Cable Networks and Theme Parks, partially offset by a decline at Filmed Entertainment .

For the six months ended June 30, 2018, NBCUniversal revenue increased 10.3% to $17.8 billion compared to 2017. Adjusted EBITDA increased 8.6% to $4.4 billion , reflecting increases at Cable Networks, Broadcast Television and Theme Parks, partially offset by a decline atFilmed Entertainment .

Theme Parks revenue increased 3.6% to $1.4 billion in the second quarter of 2018 reflecting higher per capita spending driven by the successful openings of several new attractions including Fast & Furious – Supercharged TM in Orlando , partially offset by the timing of spring holidays as compared to 2017. Adjusted EBITDA increased 3.4% to $569 million in the second quarter of 2018, reflecting higher revenue, partially offset by an increase in operating expenses, including costs to support new attractions.

For the six months ended June 30, 2018, revenue from the Theme Parks segment increased 8.6% to $2.6 billion compared to 2017, reflecting higher per capita spending. Adjusted EBITDA increased 12.3% to $1.1 billion compared to 2017, due to higher revenue, partially offset by an increase in operating expenses, including costs to support new attractions.

Click here for Comcast’s 10Q filing with the SEC

[/tab][tab title=”Six Flags”]

On July 25, Six Flags Entertainment Corporation announced that revenue for the second quarter of 2018 increased $23 million or 5 percent from the second quarter of 2017 to$445 million. The revenue growth resulted primarily from a 3 percent increase in attendance to 9.8 million guests, a 2 percent increase in guest spending per capita and a 9 percent increase in sponsorship, international licensing and accommodations revenue. Adjusting for the nearly 200,000 guest visits that occurred during the first quarter versus the second quarter due to the earlier timing of Easter in 2018 versus 2017, second quarter 2018 attendance grew 5 percent.

Net income for the quarter increased $22 million or 43 percent and diluted earnings per share increased 49 percent to $0.88, primarily due to a $37 million charge related to the early retirement of debt in April 2017 and the positive impact of tax reform, partially offset by an increase in stock-based compensation related to accounting for the company’s Project 600 award. Adjusted EBITDA in the second quarter 2018 increased $4 million or 3 percent to $170 million.

“I am very pleased with our continued strong momentum and execution in the quarter as we expanded our global footprint and successfully rolled-out our new, premium-tiered membership program,” said Jim Reid-Anderson, Chairman, President and CEO. “I am confident 2018 will be another record year for our shareholders as we continue to innovate and execute on our five-pillar strategy to drive our business to achieve our aspirational goal of $750 million of Modified EBITDA by 2020.”

Total guest spending per capita for the second quarter of 2018 was $42.63, which was an increase of $0.96 or 2 percent compared to the second quarter of 2017, as ticket price gains and premium membership sales more than offset both the higher mix of season pass holder and member attendance at all the company’s parks and lower per capita spending at the five new domestic parks, whose lease rights were acquired by the company in June 2018. Admissions per capita increased 5 percent to $24.61 and in-park spending per capita decreased 2 percent to $18.02.

For the first six months of 2018, revenue was $574 million, a 10 percent increase compared to the prior year period, driven primarily by a 7 percent increase in attendance, a 3 percent increase in guest spending per capita and a 12 percent increase in sponsorship, international licensing and accommodations revenue. The company had net income of $12 million and diluted earnings per share of $0.14 for the first six months of 2018 as compared to a diluted loss per share of $0.06 for the same period in 2017. Adjusted EBITDA was $151 millionfor the first six months of 2018, an increase of 16% versus the prior year period.

Attendance for the first six months of 2018 grew to 12.1 million guests or 7 percent as compared to the first six months of 2017. The increase in attendance was driven primarily by the five new domestic parks, the two new waterparks in Mexico and California, and the impact of 365-day operations at Six Flags Magic Mountain. Guest spending per capita increased 3 percent to $43.30 for the first six months of 2018, with admissions per capita increasing 5 percent and in-park spending per capita decreasing less than 1 percent to $25.30 and $18.00, respectively.

The company’s success in upselling guests from single day tickets to memberships and season passes resulted in an 8 percent year-over-year increase in its Active Pass Base, which represents the total number of guests who are enrolled in the company’s membership program or have a season pass. The mix of memberships in the Active Pass Base significantly increased as a result of the company’s roll-out of a new, premium-tiered membership program. Members are the company’s most loyal and valuable guests, with higher retention rates and higher revenue compared to traditional season passes. Deferred revenue of $227 million as of June 30, 2018, increased by $32 million or 16% percent over June 30, 2017, primarily due to the impact of the new North American parks, incremental sales of memberships, and higher sales of all-season dining products.

In the first half of 2018, the company invested $91 million in new capital projects and $23 million, less net working capital and other adjustments, to acquire the lease rights to five new parks; paid $131 million in dividends, or $0.78 per common share per quarter; and repurchased $81 million of its common stock. The authorized share repurchase amount available as of June 30, 2018, was $262 million. Net Debt as of June 30, 2018, calculated as total reported debt of $2,180 million less cash and cash equivalents of $69 million, was$2,112 million, representing a 3.9 times Adjusted EBITDA net leverage ratio.

Previous Announcements

On May 22, 2018, the company announced it had entered into a purchase agreement with affiliates of Premier Parks, LLC to acquire the lease rights to operate five parks owned by EPR Properties, expanding the company’s portfolio of North American parks to twenty-five.

On May 29, 2018, the company and its partner in China, the Riverside Group, announced a licensing agreement to develop a Six Flags Kids World, the fourth park in the Nanjing entertainment complex and the eleventh park in China. The Kids World property is scheduled to open in 2021 with the waterpark and adventure park. The theme park is scheduled to open in 2022.

Click here for Six Flag’s 10Q filing with the SEC

[/tab][tab title=”Cedar Fair”]

On August 1, Cedar Fair Entertainment Company announced results for the second quarter ended June 24, 2018, along with revenue trends for the month of July and the declaration of a quarterly cash distribution for unitholders.

Commenting on the Company’s second-quarter results and trends through July 29, 2018, Richard Zimmerman, Cedar Fair’s president and CEO, said, “The investments we have made in our parks over the past several years have significantly enhanced the guest experience and, combined with our current and future investments, will provide meaningful economic returns for many years to come.  As a result of our investments, the guest response to our new rides and attractions has been very positive, guests are increasing spending levels inside our parks, and the renewal rates of season passholders remain strong.  We believe disruptive weather patterns have contributed negatively to our year-to-date attendance, however, we have launched incremental research efforts to better understand market-specific results.”

“In response to the lower-than-anticipated first half results, we have implemented a number of initiatives designed to drive attendance and maximize profits over the balance of the season,” added Zimmerman.   “These initiatives, combined with our very popular Halloween events, WinterFest celebrations at five parks, including the recent addition of Kings Dominion, and the continued strength of long-lead demand indicators, such as group bookings and resort reservations, give us confidence that we are well positioned heading into the second half of 2018.”

Zimmerman continued by stating that despite some recent areas of strength in the business, the lack of meaningful momentum or attendance pickup in July could have results fall below the low end of the Company’s full-year guidance of net revenues between $1.34 billion and $1.38 billion and Adjusted EBITDAbetween $475 million and $495 million.  Because full-year results will be heavily influenced by the parks’ performance over the next month, the Company will update its guidance in early September.

“We remain confident in the resiliency of our business model, the experience of our management team, the strength of our balance sheet and the outlook for growth in the business long term.  As a result, we remain committed to delivering a steady 4% annual increase in the cash distribution to unitholders while continuing to invest in our business at a responsible level,” concluded Zimmerman.

Six-Month Results

Net revenues were $435 million for the six months ended June 24, 2018, a decrease of $6 million, or 1%, compared with the six-month period ended June 25, 2017.  The decrease was attributable to a 2%, or 211,000-visit, decrease in attendance to 8.7 million guests.  This was partially offset by a 1%, or $0.27, increase in average in-park per capita spending to $45.42, and a 2%, or $1 million, increase in out-of-park revenues to $56 million when compared with the prior-year period.

Short-term factors, such as inclement weather in the Mid-Atlantic region and a delayed ride opening at California’s Great America, combined with a decrease in the number of season passes sold at Kings Island, negatively impacted early-season attendance at the Company’s seasonal amusement parks.  This was somewhat offset by increased attendance at Knott’s Berry Farm, the Company’s only year-round park.  The increase in average in-park per capita spending through the first half of the year was driven by increased spending on food and beverage, merchandise and extra charge attractions.  These increases were partially offset by a small decrease in admissions revenue per capita attributable to a higher season pass mix, the introduction of a free pre-K season pass at three more parks in 2018 and the recognition of season pass revenue over a longer period of time at a fifth park that will be hosting a new WinterFest celebration in November and December this year.

The increase in out-of-park revenues is the result of higher occupancy rates and average daily room rates at the Company’s resort hotels, including the new 158-room tower at Cedar Point’s historic beachfront Hotel Breakers.

The operating loss for the six-month period was $7 million compared with operating income of $19 million for the six-month period in 2017.  The decline in operating income is the result of the 1% decrease in net revenues noted above, combined with a 4%, or $16 million, increase in operating costs and expenses, which totaled $380 million for the first half of 2018.  The increase in operating costs and expenses was in-line with the Company’s expectations and reflects higher labor costs due to market/minimum-wage rate increases, higher operating and maintenance supplies, and additional expenses as the Company continues to invest in technology and the overall guest experience.  Depreciation and amortization was up $2 million due to growth in capital improvements over the past several years.  Loss on impairment/retirement of fixed assets was up $3 million, reflecting the retirement of assets in the normal course of business at several of the Company’s properties.

Interest expense for the first six months of 2018 was comparable to the same period in the prior year.  We recognized a $1 million loss on early debt extinguishment during the first quarter of 2018 in connection with amending our 2017 Credit Agreement, as compared to a $23 million loss on early debt extinguishment related to our refinancing in the first half of 2017.  The net effect of our swaps resulted in a benefit to earnings of $5 million for the first six months of 2018 compared with a $5 million charge to earnings for the comparable period in 2017.  The difference reflects the change in fair market value movements in our swap portfolio offset by the amortization of amounts in OCI for our de-designated swaps.  During the current period, we also recognized a $25 million net charge to earnings for foreign currency gains and losses compared with a $6 million net benefit to earnings for the comparable period in 2017.  Both amounts primarily represent re-measurement of the U.S.-dollar denominated debt held at our Canadian property from the applicable currency to the legal entity’s functional currency.

A benefit for taxes of $5 million was recorded during the first half of 2018 to account for the tax attributes of the Company’s corporate subsidiaries and publicly traded partnership taxes, compared with a benefit of $10 million in the same period a year ago.

The net loss through June 24, 2018, totaled $64 million, or $1.14 per diluted LP unit.  This compares with a net loss of $33 million, or $0.60 per diluted LP unit, for the same period a year ago.  The increase in net loss is primarily a result of the 1% decrease in net revenues, combined with planned increases in operating costs and expenses.

Adjusted EBITDA, which management believes is a meaningful measure of the Company’s park-level operating results, for the six months ended June 24, 2018, was $62 million, down $23 million when compared with the six months ended June 25, 2017.  This is the result of the attendance shortfall through the first six months of 2018, combined with planned increases in operating costs and expenses.  See the attached table for a reconciliation of net income to Adjusted EBITDA.

July Operations

Based on preliminary July results, net revenues through the seven-month period ended July 29, 2018, were approximately $752 million, down $15 million, or 2%, when compared with the similar period last year.  The decrease in revenues is attributable to a 3%, or 480,000-visit, decrease in attendance to 14.6 million guests.  This was somewhat offset by a 1% increase in average in-park guest per capita spending and a 4%, or $3 million, increase in out-of-park revenues compared with the similar period last year.

Click her for Cedar Fair’s 10Q filing with the SEC

[/tab][tab title=”SeaWorld”]

On August 6, SeaWorld Entertainment, Inc. reported its financial results for the second quarter and first half of 2018.

Second Quarter 2018 Highlights

Total revenue increased by $18.2 million, or 4.9%, to $391.9 million from the second quarter of 2017.

Attendance increased by 0.3 million, or 4.8%, to 6.4 million guests from the second quarter of 2017.

Net income was $22.7 million, compared to a net loss of $175.9 million in the second quarter of 2017. Net income for the second quarter of 2018 includes approximately $8.7 million of certain pre-tax expenses as discussed further below. Net loss in the second quarter of 2017 includes approximately $280.4 million of certain pre-tax expenses, including a non-cash goodwill impairment charge, as discussed further below.

Adjusted EBITDA[1] was $117.6 million, an improvement of $13.4 million, or 12.9%, over the second quarter of 2017. Adjusted EBITDA does not reflect certain add-back adjustments due to limitations in the Company’s credit agreement (see accompanying tables at end of release).

First Half 2018 Highlights

Total revenue increased by $49.0 million, or 8.7%, to $609.1 million from the first half of 2017.

Attendance increased by 0.7 million, or 8.0%, to 9.6 million guests from the first half of 2017.

Net loss was $40.1 million, compared to a net loss of $237.0 million in the second quarter of 2017. Net loss for the first half of 2018 includes approximately $30.2 million of certain pre-tax expenses as discussed further below. Net loss in the first half of 2017 includes approximately $288.4 million of certain pre-tax expenses, including a non-cash goodwill impairment charge, as discussed further below.

Adjusted EBITDA was $117.5 million, an improvement of $43.6 million, or 59.1%, over the first half of 2017. Adjusted EBITDAdoes not reflect certain add-back adjustments due to limitations in the Company’s credit agreement (see accompanying tables at end of release).

“We are pleased with our strong second quarter financial results and the continued momentum we see in the business,” said John Reilly, Interim Chief Executive Officer of SeaWorld Entertainment, Inc. “The results were driven by our new strategic pricing strategies, new marketing and communications initiatives and the positive reception of our new rides, attractions and events. In addition, we continued to experience a double-digit increase in season pass sales revenue and an increase in total revenue per capita driven by a 6.5% increase in in-park per capita spending.  We are particularly pleased with our second quarter attendance growth, which more than offset the negative impacts from unfavorable weather across several of our markets in the quarter, and the earlier timing of the Easter holiday in 2018, which benefitted the first quarter at the expense of the second quarter.”

“As we enter the last few weeks of our peak summer season, we are encouraged that year-to-date results through July for attendance, season pass sales and total revenue have remained strong,” continued Reilly.  “We are seeing growth in attendance and revenue as a result of our new pricing strategies, enhanced communications activities and strong operational execution.  In addition, our keen focus on cost savings and efficiencies is improving our margins.  We are pleased with the positive guest reception of our new rides, attractions and events across our parks.  Currently, our award winning Electric Ocean event has been in full swing at each of our SeaWorld parks and our Summer Nights event is operating at each of our Busch Gardens parks.  Looking ahead, we have our popular Halloween and Christmas events that we are confident will continue to drive further attendance growth.”

“As you know, we have been very focused on reducing unnecessary costs and finding ways to operate our business more efficiently. We have realized the remainder of the $40 million in cost savings we expected to achieve in 2018, have identified and are executing on $50 million of additional cost reductions and are actively working to find other opportunities where possible.  These cost reductions are throughout the enterprise and represent our continuing effort to more efficiently operate our business. We fully recognize the opportunities we have to significantly improve our operating margins and we are committed to those efforts. While our first six months results demonstrate solid progress, we know we have significant opportunity for further improvement.”

[1] This earnings release includes Adjusted EBITDA and Free Cash Flow which are metrics that are not calculated in accordance with Generally Accepted Accounting Principles in the U.S. (“GAAP”). See “Statement Regarding Non-GAAP Financial Measures” section and the financial statement tables for the definitions of Adjusted EBITDA and Free Cash Flow and the reconciliation of these measures for historical periods to their respective most comparable financial measures calculated in accordance with GAAP. Also, see “2020 Goal for Adjusted EBITDA” section.

Second Quarter 2018 Results

In the second quarter of 2018, the Company hosted approximately 6.4 million guests, generated total revenues of $391.9 million, net income of $22.7 million and Adjusted EBITDA of $117.6 million. Net income includes approximately $8.7 million of pre-tax expenses associated with separation-related costs and a legal settlement accrual recorded in the second quarter of 2018. Net loss in the second quarter of 2017 includes approximately $280.4 million of pre-tax expenses associated with the following:  (i) $269.3 million related to a non-cash goodwill impairment charge, (ii) $8.4 million related to non-cash equity compensation expense with respect to performance awards which vested in the second quarter of 2017, (iii) $2.5 million related to a legal settlement accrual, and (iv) $0.1 million related to a loss on early extinguishment of debt and write-off of discounts and debt issuance costs.

The Company believes the improved attendance results from a combination of factors including the Company’s new pricing strategies, new marketing and communications initiatives and the anticipation and reception of new rides, attractions and events.  These factors were partially offset by the negative impacts from unfavorable weather in the quarter, and the earlier timing of the Easter holiday in 2018, which impacted the timing of spring break for a number of schools from the Company’s key markets.  Revenue was positively impacted by the strong increases in attendance and in-park per capita spending (defined as food, merchandise and other revenue divided by total attendance) partially offset by lower admission per capita (defined as admissions revenue divided by total attendance). The decline in admission per capita primarily results from the impact of new pricing strategies and visitation mix when compared to the second quarter of 2017. Adjusted EBITDA was positively impacted by increases in attendance, total revenue per capita and the impact of an increased focus on cost efficiencies and the realization of cost savings initiatives. The second quarter 2018 and 2017 Adjusted EBITDA calculations do not reflect certain add-back adjustments due to limitations in the Company’s credit agreement (see accompanying tables at end of release).

First Half 2018 Results

In the first half of 2018, the Company hosted approximately 9.6 million guests and generated total revenues of $609.1 million, net loss of $40.1 million and Adjusted EBITDA of $117.5 million. Net loss includes approximately $30.2 million of pre-tax expenses associated with separation-related costs and legal settlement accruals recorded in the first half of 2018. Net loss in the first half of 2017 includes approximately $288.4 million of pre-tax expenses associated with the following:  (i) $269.3 million related to a non-cash goodwill impairment charge, (ii) $8.4 million related to non-cash equity compensation expense with respect to performance awards which vested in the second quarter of 2017, (iii) $8.1 million related to a loss on early extinguishment of debt and write-off of discounts and debt issuance costs, and (iv) $2.5 million related to a legal settlement accrual.

The Company believes the improved attendance results from a combination of factors including the Company’s new pricing strategies, new marketing and communications initiatives and the anticipation and reception of new rides, attractions and events. These factors were partially offset by negative impacts from unfavorable weather in the first half of the year compared to the same period in 2017.  Revenue was positively impacted by the strong increases in attendance and in-park per capita spending partially offset by lower admission per capita. The decline in admission per capita primarily results from new pricing strategies and visitation mix when compared to the first half of 2017.  Adjusted EBITDA was positively impacted by increases in attendance, total revenue per capita and the impact of an increased focus on cost efficiencies and the realization of cost savings initiatives. The first half 2018 and 2017 Adjusted EBITDA calculations do not reflect certain add-back adjustments due to limitations in the Company’s credit agreement (see accompanying tables at end of release).

Debt and Liquidity

Net debt as calculated under the credit agreement governing the Company’s Senior Secured Credit Facilities was $1.50 billion as of June 30, 2018, which translates to a net leverage ratio of 4.4x Adjusted EBITDA for the twelve months ended June 30, 2018.

2020 Goal for Adjusted EBITDA

The Company has established a goal of achieving $475 million to $500 million in Adjusted EBITDA by the end of 2020.  “We believe through our intense focus on operational improvements, new strategic pricing strategies and marketing and communications initiatives along with the positive reception of our new rides, attractions and events, we can continue to drive incremental attendance, revenue and Adjusted EBITDA as demonstrated by the first two quarters of 2018,” said Marc Swanson, Chief Financial Officer of SeaWorld Entertainment, Inc. “That focus coupled with our continued pursuit of eliminating unnecessary costs and the opportunities we have identified to more efficiently operate our business strengthens our confidence that we can achieve this goal.”

The financial statement tables that accompany this press release include a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the applicable most comparable U.S. GAAP financial measure for the three and six-month periods ended June 30, 2018 and 2017. However, the Company has not reconciled the forward-looking Adjusted EBITDA long-term goal included in this press release to the most directly comparable GAAP financial measure because this cannot be done without unreasonable effort due to the seasonal nature of the Company’s business and the high variability, complexity and low visibility with respect to amounts for disposition of assets, income taxes and other expenses and adjusting items which are excluded from the calculation of Adjusted EBITDA. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a potentially significant impact on its future GAAP financial results.

Other

The Company has recently reached an agreement in principle with the Enforcement Staff (“Staff”) of the Securities and Exchange Commission (“SEC”) to settle, without admitting or denying, the potential charges against the Company arising out of the previously disclosed SEC investigation. The Company has recorded an estimated liability of $4.0 million related to this matter, which is included in selling, general and administrative expenses for the three and six months ended June 30, 2018 on the accompanying unaudited condensed consolidated financial statements. The Company and the Staff are working to document the proposed settlement, which is subject to approval by the SEC, and there is no assurance that the settlement will be finalized and/or approved by the SEC or that any final settlement will not have different or additional terms.

Click here for SeaWorld’s 10q filing with the SEC

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Joe Kleimanhttp://www.themedreality.com
Raised in San Diego on theme parks, zoos, and IMAX films, Joe Kleiman would expand his childhood loves into two decades as a projectionist and theater director within the giant screen industry. In addition to his work in commercial and museum operations, Joe has volunteered his time to animal husbandry at leading facilities in California and Texas and has played a leading management role for a number of performing arts companies. Joe has been News Editor and contributing author to InPark Magazine since 2011. HIs writing has also appeared in Sound & Communications, LF Examiner, Jim Hill Media, and MiceChat. His blog, ThemedReality.com takes an unconventional look at the attractions industry. Follow on twitter @themedreality Joe lives in Sacramento, California with his fiancé, two dogs, and a ghost.

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