PRKS 10-K & 10-Q changes, risk factors and insider trading

DuringIn 2024,recent 2023 and 2022,years, in part due to the overall labor market, including inflationary pressures on wages and the challenging current operating environment, we have faced increased turnover throughout the company and challenges in meeting our staffing goals. These staffing challenges have also led to wage pressures and less than optimal staffing levels, which have impacted and could continue to impact our ability to open some of our food and beverage and retail outlets, caused us to temporarily close some rides or attractions, and/or caused longer wait times in certain areas of our parks, which has and could continue to impact the guest experience. Despite the staffing challenges we have encountered, which at times have included maintenance, security and/or animal care personnel, we have not and will not compromise the safety of our guests, ambassadors or animals. That said, if we are unable to attract and retain adequate numbers of employees to staff our parks especially during peak periods, this could materially adversely affect our business and negatively impact our results of operations and the guest experience as it could impact the number of venues, rides and/or attractions we can open. See also, “Increased labor costs and employee health and welfare benefits may negatively impact our operations.”

Our success depends to a significant extent on discretionary consumer spending. Some of the factors that may influence consumer spending on entertainment and recreational activities include general economic conditions, the availability of discretionary income, consumer confidence, high interest rates, domestic and global supply chain issues, high levels of unemployment, pandemics, higher consumer debt levels, reductions in net worth based on market declines and uncertainty, the housing market, fluctuating foreign currency exchange rates and credit availability, government measures, inflationary pressure, tax rates and general uncertainty regarding the overall future economic environment, including recessionary concerns. From 2022 through 2024, the Federal Reserve raised interest rates eleven times in response to concerns about inflation. While the Federal Reserve began decreasingdecreased interest rates three times each in 2024 and has2025 indicated that itand may further decrease interest rates in 2025,2026, interest rates continue to remain highelevated and there is no guarantee that the Federal Reserve will take such action. Elevated interest rates and volatility in financial markets may increase economic uncertainty and negatively affect consumer spending.

In 2019, Hill Path Capital LP and certain of its affiliates (“Hill Path”) purchased, in the aggregate, 13,214,000 shares of our common stock (the “HP Purchase”). In connection with the HP Purchase, the Company and Hill Path entered into a Stockholders Agreement (as amended February 27, 2024), a Registration Rights Agreement and an Undertaking Agreement as described more fully in our Form 8-K dated May 27, 2019 (collectively, the “HP Agreements”). On July 7, 2020, Hill Path filed with the SEC a Schedule 13D/A (the “Schedule 13D/A”) reporting that such persons had accumulated a total of 27,205,306 shares of our common stock, which represents approximately 49.4%53.2% of our total outstanding shares of common stock as of December 31, 2024.2025. Also, certain funds affiliated with Hill Path have other economic interests in the Company. Please refer to their most recent Schedule 13D/A filed on NovemberJuly 13,2, 2024.2025. In addition, the Hill Path Schedule 13D filed on May 1, 2017, as amended, states, among other things, that Hill Path may suggest changes in our business, operations, capital structure, capital allocation, corporate governance, and other strategic matters.

Under the HP Agreements, we agreed to appoint up to three Hill Path director designees (“Hill Path Designees”) to our Board of Directors of which two directors may be affiliated with Hill Path and, subject to the independence standards of the New York Stock Exchange, there must be one Hill Path Designee on each committee of the Board, as determined by Hill Path and subject to the approval of the Nominating and Corporate Governance Committee. However, in light of the benefits that the Nominating and Corporate Governance Committee of the Board and the full Board (including all of the non-Hill Path Designees) believe that Aayushi Dalal contributes to the Company as a member of the Board, all of the current directors who are not affiliated with Hill Path, as well as the full Board, determined to grant a one-time waiver of the limitation in the Stockholders Agreement that no more than two Hill Path Designees be affiliated with Hill Path solely to permit Aayushi Dalal to join the Board. Scott Ross, founder of Hill Path, and James Chambers, a Partner at Hill Path, and Aayushi Dalal, a Managing Director at Hill Path are the Hill Path Designees. Mr. Ross currently serves as Chairman of the Board and Chairman of the Compensation Committee and also serves on the Nominating and Corporate Governance Committee and the Revenue Committee. Mr. Chambers serves as Chairman of the Nominating and Corporate Governance Committee and also serves on the Compensation Committee and the Revenue Committee.

Under legislation passed by the City of San Diego,Diego specifically for employees working in the hospitality industry which includes theme parks, beginning on JanuaryJuly 1, 2023,2026, San Diego’s minimum wage wasfor basedtheme park employees will increase to $19.00 per hour with further increases of $1.50 per hour each year on theJuly consumer1 priceuntil indexreaching and increased to $16.30$25.00 per hour, whichhour effective JanuaryJuly 1, 2024,2030. wasFrom increasedthat furtherpoint toforward, $16.85future perminimum hour.wage increases will be adjusted annually for inflation starting July 1, 2031. Under current Virginia law, its state minimum wage is $12.00 an hour adjusted annually beginning January 1, 2025 based on changes in the consumer price index, which for 2025 resulted in a minimum wage of $12.41.$12.41 and increased to $12.77 in 2026. In November 2020, Florida passed a ballot initiative providing for its minimum wage to increase by $1.00 per hour on September 30 of each year until the minimum wage reaches $15.00 per hour on September 30, 2026. From that point forward, future minimum wage increases will be adjusted annually for inflation starting September 30, 2027. In addition, a number of companies with whom we compete for talent have announced wage and benefit increases to attract and retain employees in a tight labor market which has driven-up labor costs. Increases to the minimum wage in locations where we do business, increases to wages of companies with whom we compete for talent and/or increased benefit costs will negatively impact our operating expenses. See also “If we fail to hire and/or retain employees, our business may be adversely affected”.

Although none of our employees are currently covered under collective bargaining agreements, we have experienced union organizing activities in certain units in the Company. For example, in recent years, we experienced increased union organizing activities and most of these activities were resolved favorably. In 2025, two groups of employees, impacting approximately 115 employees in aggregate, voted in favor of unionization. We cannot guarantee that certain of our employees will not elect to be represented by labor unions in the future. For example, in the recent past, we have experienced union organizing activities and these activities were resolved favorably. If some or all of our employees were to become unionized and collective bargaining agreement terms wereare significantly different from our current compensation arrangements, however, it could adversely affect our business, financial condition or results of operations. In addition, a labor dispute involving some or all of our employees may disrupt our operations and reduce our revenues, and resolution of labor and employment-related disputes may increase our costs.

As of December 31, 2024,2025, our total indebtedness was approximately $2.263$2.248 billion. Our high degree of leverage could have important consequences, including the following: (i) a substantial portion of our cash flow from operations is dedicated to the payment of principal and interest on indebtedness, thereby reducing the funds available for operations, capital expenditures, future business opportunities and/or share repurchases of our common stock; (ii) our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate purposes in the future may be limited; (iii) certain of the borrowings are at variable rates of interest, which will increase our vulnerability to increases in interest rates; (iv) we are at a competitive disadvantage to less leveraged competitors; (v) we may be unable to adjust rapidly to changing market conditions; (vi) the debt service requirements of our other indebtedness could make it more difficult for us to satisfy our financial obligations; and (vii) we may be vulnerable in a downturn in general economic conditions or in our business and we may be unable to carry out activities that are important to our growth. During 2021, 2022 and parts of 2023, the United States experienced elevated levels of inflation. Increased inflation is likely to cause interest rates (including SOFR) to remain high. From 2022 through 2024, the Federal Reserve raised interest rates eleven times in response to concerns about inflation. While the Federal Reserve began decreasingdecreased interest rates three times each in 2024 and has2025 indicated that itand may further decrease interest rates in 2025,2026, interest rates continue to remain highelevated and there is no guarantee that the Federal Reserve will take such action. Any further increase in interest rates could increase our borrowing costs on variable debt and adversely affect our business. We do not currently have any of our debt hedged. A hypothetical increase in Term SOFR of 100 bps would increase our annual interest expense by approximately $15.4$15.2 million. Increased debt service costs would adversely affect our cash flow and net income. There can be no assurance that if we intend to enter into a hedge, that we will be able to enter into hedging arrangements on favorable terms or at all.

We purchase some of our merchandise for resale and other products used in our business from entities which are located in foreign countries. Additionally, some of our ride manufacturers may be located in foreign countries or utilize components manufactured or sourced from foreign countries. These relationships expose us to risks associated with doing business globally, including changes in tariffs, quotas and other restrictions on imports (collectively “Trade Restrictions”) as well as escalating global trade tensions and the potential for international supply chain disruptions due to geopolitical events. The United States has imposed, and the new presidential administration has indicated may further impose, tariffs on certain imports from China and other countries. Such Trade Restrictions have resulted in, and any further restrictions may further result in, increased costs and could result in lower gross margin on impacted products and/or will likely result in increases in the cost of capital projects, unless we are able to successfully take any one or more of the following mitigating actions: increase our prices, move production to countries with no or lower tariffs or away from domestic vendors who source from China or other tariff impacted countries, or alter or cease offering certain products. Any increase in pricing, alteration of products or reduced product offering could reduce the competitiveness of our products. Furthermore, any retaliatory counter-measures imposed by countries subject to such tariffs could increase our, or our vendors’, import expenses. Additionally, even if the products we import are not directly impacted by tariffs, the imposition and maintenance of such tariffs on goods imported into the United States could cause increased prices for consumer goods, in general, which could have a negative impact on consumer spending for discretionary items reducing attendance or spending at our parks. These direct and indirect impacts of increased tariffs or Trade Restrictions implemented by the United States, both individually and cumulatively, could have a material adverse effect on our business, financial condition and results of future operations.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. The Company identified and implemented a number of actions that effectively remediated the previously-disclosed material weakness and concluded that as of December 31, 2024 its internal control over financial reporting wasis effective. However, the Company cannot provide assurances that the remediated material weakness will not reoccur in the future, or that a new material weakness will occur. The existence of any material weakness could require management to devote significant time and incur significant expense to remediate any such material weakness and management may not be able to remediate any such material weakness in a timely manner. If such material weakness is not remediated effectively or in a sufficient amount time, the Company could be impacted by a material misstatement of our annual or interim financial statements that was not prevented or detected in a timely basis, which could have a negative effect on our results of operations and/or the trading price of our securities.

return of capital to our shareholders, including through repurchases of our common stock;

Our goal is to invest capital to maximize our overall long-term returns. This includes spending on capital projects and expenses, managing debt levels, and periodically returning capital to our stockholders through share repurchases and/or dividends. There can be no assurance that our capital allocation decisions will enhance stockholder value. Our Board has previously authorized a share repurchase program of up to $250.0$500.0 million of our common stock (the “Former2025 Share Repurchase Program”), of which approximately $18.3$347.6 million remained available under the Former2025 Share Repurchase Program as of December 31, 2024 and2025, a share repurchase program of up to $500.0 million of our common stock (the “2024 Share Repurchase Program”), of which approximately $37.2$32.6 million remained available under the 2024 Share Repurchase Program as of December 31, 2024.2025 and a share repurchase program of up to $250.0 million of our common stock (the “2022 Share Repurchase Program”), of which approximately $18.3 million remained available under the 2022 Share Repurchase Program as of December 31, 2025. The number of shares to be purchased and the timing of purchases will be based on our trading windows and available liquidity, general business and market conditions and other factors, including legal requirements and alternative opportunities.

During 2024,2025, we completed share repurchases of 9,365,0004,180,798 shares for an aggregate total of approximately $482.9$157.0 million. Repurchases of our common stock pursuant to the 20222025 FormerShare Repurchase Program, 2024 Share Repurchase Program and 2022 Share Repurchase Program could affect our stock price and increase its volatility. The existence of the 2025 Share Repurchase Program could cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock. There can be no assurance that any share repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased shares of stock. Although the 2025 Share Repurchase Program is intended to enhance long-term stockholder value, there is no assurance that it will do so and short-term stock price fluctuations could reduce such program’s effectiveness. See Note 18–Stockholders’ Deficit in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Admission Per Capita. We calculate admission per capita as total admissions revenue divided by total attendance. Admission per capita is primarily driven by ticket pricing, the admissions product mix (including the impact of pass visitation rates), and the park attendance mix, among other factors. The admissions product mix, also referred to as the attendance or visitation mix, is defined as the mix of attendance by ticket category such as single day, multi-day, annual/season passes or complimentary tickets/passes and can be impacted by the mix of guests, as domestic and international guests generally purchase higher admission per capita ticket products than local guests. A higher mix of attendance from complimentary tickets/passes will lower admissions per capita. Pass visitation rates are the number of visits per pass. A higher number of visits per pass, including complimentary tickets/passes, would yield a lower admissions per capita as the revenue is recognized over more visits. The park attendance mix is defined as the mix of theme parks visited and can impact admission per capita based on the theme park’s respective pricing which, on average, is lower for our water parks compared to our other theme parks.

The level of attendance in our theme parks is generally a function of many factors, including affordability, the opening of new attractions and shows, competitive offerings, weather, marketing and sales efforts, awareness and type of ticket and park offerings, travel patterns of both our domestic and international guests, fluctuations in foreign exchange rates and global and regional economic conditions, consumer confidence, the external perceptions of our brands and reputation, industry best practices and perceptions as to safety. The external perceptions of our brands and reputation have at times impacted relationships with some of our business partners, including certain ticket resellers that have terminated relationships with us and other zoological-themed attractions. As a result of the COVID-19 pandemic and the related impacts, travel from international and/or domestic markets were impacted in 2022 and parts of 2023. We continuously monitor factors impacting our attendance, making strategic operations, marketing and sales adjustments as necessary.

The theme park industry is seasonal in nature. Historically, we generate the highest revenues in the second and third quarters of each year, in part because four of our theme parks were historically only open for a portion of the year. As a result, approximately two-thirds of our attendance and revenues were historically generated in the second and third quarters of the year and we generally incurred a net loss in the first quarter. The percent mix of revenues by quarter is relatively constant each year, but revenues can shift between the first and second quarters due to the timing of Easter and spring break holidays and between the first and fourth quarters due to the timing of holiday breaks around Christmas and New Year. Even for our eightseven theme parks which have historically been open year-round, attendance patterns have significant seasonality, driven by holidays, school vacations and weather conditions. Changes in school calendars that impact traditional school vacation breaks and/or start dates could also impact attendance patterns.

Any changes to the operating schedule of a park such as increasing operating days for our historically seasonal parks, could change the impact of seasonality in the future. In the year ended December 31, 2022, we opened our Sesame Place San Diego park which has been, and is expected to continue to be, open more operating days than the Aquatica San Diego park it replaced, particularly in the first and fourth quarters of the year. Incremental operating days generally are expected to drive incremental attendance and revenue.

Admissions revenue. Admissions revenue for the year ended December 31, 20242025 decreased $14.5$56.2 million, or 1.5%,6.0%, to $939.6$883.4 million as compared to $954.1$939.6 million for the year ended December 31, 2023.2024. The decline was a result of a decrease in admission per capita and a decrease in attendance of 0.10.4 million guests, or 0.3%.1.8%. The decrease in attendance was primarily due to thea impactcombination of significantlyfactors worseincluding weathera decline in visitation from international markets and hurricanes,reseller particularlytickets atalong ourwith Floridachanges parks,in includingoperating duringschedules peakacross visitationparks periods.and less than optimal execution. Admission per capita decreased by 1.2%4.3% to $41.73 in 2025 compared to $43.61 in 2024 compared to $44.16 in 2023.2024. Admission per capita decreased primarilythe dueimpact to lower pricing on certainof promotional admissionactivities productsand visitation mix and when compared to 2023.2024.

Food, merchandise and other revenue. Food, merchandise and other revenue for the year ended December 31, 20242025 increaseddecreased $13.2$6.5 million, or 1.7%0.8% to $785.7$779.2 million as compared to $772.5$785.7 million for the year ended December 31, 2023.2024. The increasedecrease results from improved in-park per capita spending, partially offset by the decrease in attendance discussed above.above, partially offset by improved in-park per capita spending. In-park per capita spending increased by 2.0%,1.0%, to $36.81 in 2025 from $36.46 in 2024 from $35.75 in 2023.2024. In park per capita spending improved primarily due to pricing and operating initiatives when compared to 2023.2024.

Costs of food, merchandise and other revenues. Costs of food, merchandise and other revenues for the year ended December 31, 20242025 decreased $0.3$3.8 million, or 0.2%,2.9%, to $131.4$127.6 million as compared to $131.7$131.4 million for the year ended December 31, 2023.2024, primarily due to a decrease in inventory write-offs.

Operating expenses. Operating expenses for the year ended December 31, 20242025 decreasedincreased by $9.2$16.2 million, or 1.2%2.2% to $749.7$765.9 million as compared to $758.9$749.7 million for the year ended December 31, 2023.2024. The decreaseincrease in operating expenses is primarily due to a decrease in nonrecurring contractual liabilities and legal costs resulting from the previously disclosed temporary COVID-19 park closures, a decrease in non-cash fixed asset write-offs and the impact of implemented structural cost savings initiatives, partially offset by an increase in certainlabor-related non-cash adjustmentscosts when compared to 2023.2024.

Selling, general and administrative expenses. Selling, general and administrative expenses for the year ended December 31, 20242025 decreasedincreased by $4.3$10.9 million, or 2.0%5.0% to $216.9$227.7 million as compared to $221.2$216.9 million for the year ended December 31, 2023.2024. The decreaseincrease in selling, general and administrative expenses is primarily due to a $16.0 million decrease in third-party consulting costs, including approximately $15.3 million of nonrecurring costs for strategic initiatives, a decrease in labor-related costs and the impact of implemented cost savings and efficiency initiatives, partially offset by an increase in marketing relatedmarketing-related costs when compared to 2023.2024.

Depreciation and amortization. Depreciation and amortization expense for the year ended December 31, 20242025 increased by $9.2$11.0 million, or 6.0%6.8% to $163.4$174.5 million as compared to $154.2$163.4 million for the year ended December 31, 2023.2024. The increase primarily relates to new asset additionsadditions, partially offset by the impact of asset retirements and fully depreciated assets.

InterestOther expense.expense, Interestnet. expenseOther expense, net for the year ended December 31, 2024 increased $21.1 million, or 14.4% to $167.8 million as compared to $146.7 million for the year ended December 31, 2023. The increase2025 primarily relates to thean netapproximately impact$8.6 ofmillion theone-time Refinancingnon-cash Transactions which included write-offswrite-off of certain discountsaccounts andreceivable debt issuance costs and a higher average outstanding balance on our variable debt,balances, partially offset by interest expected to be received related to a lowerproperty averagetax outstanding balance on our fixed debt.refund. See Note 112–Long-TermSummary Debtof Significant Accounting Policies in our notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.

Provision for income taxes. Provision for income taxes was $64.0$58.2 million compared to $78.9$64.0 million in the years ended December 31, 20242025 and 2023,2024, respectively. Our consolidated effective tax rate was 22.0%25.7% for 20242025 compared to 25.2%22.0% for 2023.2024. The effective tax ratesrate indiffers from the yearsstatutory federal income tax rate of 21.0% for the year ended December 31, 2025 primarily due to state income taxes and a deferred revaluation due to state filing changes as of January 1, 2025. The effective tax rate differs from the statutory federal income tax rate of 21% for the year ended December 31, 2024 and 2023 were primarily impacteddue byto state income taxes and limits on certain compensation deductibility, partially offset by a tax benefit related to equity-based compensation which vested during the period and a deferred adjustment related to fixed assets in 2024.assets. See Note 12–Income Taxes in our notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.

Investing activities consist principally of capital investments we make in our theme parks for future attractions and infrastructure. Net cash used in investing activities during the year ended December 31, 20242025 consisted primarily of capital expenditures of $248.4$217.5 million largely related to future attractions (see further breakdown of capital expenditures in the table below). Net cash used in investing activities during the years ended December 31, 20232024 and 20222023 consisted primarily of capital expenditures of $304.8$248.4 million and $200.7$304.8 million, respectively.

The amount of our capital expenditures may be affected by general economic and financial conditions, among other things, including restrictions imposed by our borrowing arrangements. We generally expect to fund our capital expenditures through our operating cash flow. Due to the COVID-19 pandemic, which materially impacted our operating cash flow in 2020, we took proactive measures starting in March 2020 relating to our capital expenditures including delaying the opening of certain new rides to 2022 which were originally scheduled to open in 2020.

As of December 31, 2024,2025, our Senior Secured Credit Facilities consisted of $1.538$1.523 billion in Term B-3 Loans, which will mature on December 4, 2031, along with a $700.0 million Revolving Credit Facility, which had no amounts outstanding as of December 31, 20242025 and will mature on August 23, 2029. As of December 31, 2024,2025, SEA had approximately $17.5$10.9 million of outstanding letters of credit, leaving approximately $682.5$689.1 million available for borrowing under the Revolving Credit Facility. Subsequent to December 31, 2025, SEA borrowed $80.0 million on the Revolving Credit Facility for general working capital purposes.

For the year ended December 31, 2025, primarily relates to expenses associated with a share repurchase proposal. For the year ended December 31, 2024, primarily relates to expenses associated with a stockholders' agreement amendment proposal and a share repurchase proposal.

For the year ended December 31, 2022, primarily reflects costs associated with certain legal matters related to the temporary COVID-19 park closures (g) Reflects the impact of expenses, net of insurance recoveries and adjustments, incurred primarily related to certain matters, which we are permitted to exclude under the credit agreement governing our Senior Secured Credit Facilities due to the unusual nature of the items. For the year ended December 31, 2022, includes approximately $3.6 million related to a legal settlement.

Represents commitments under long-term operating and finance leases requiring annual minimum lease payments, primarily consisting of the lease for the land of our SeaWorld theme park in San Diego, California. Included in the less than 1 year column is approximately $9.6 million in deferred rent payments and certain fees related to the land lease, which is accrued as of December 31, 2024. See Note 13–Leases to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details.

As of December 31, 20242025 and 2023,2024, we have a valuation allowance of approximately $4.8 million and $5.0 million, net of federal tax benefit, respectively, on our deferred tax assets related to state net operating loss carryforwards, which we believed did not meet the “more likely than not” criteria and would expire before being realized in future periods.

There have been no material changes to the risk factors set forth in Item 1A. to Part I.I of our Annual Report on Form 10-K, as filed on March 3, 2026.2026, to the extent factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors.

We have a dedicated team of employees and consultantsconsultants, along with a board committee, focused on reducing costs and improving operating margins and streamlining our labor structure to better align with our strategic business objectives. We have spent significant time reviewing our operations and have identified meaningful cost savings opportunities, including technology initiatives, which we believe will further strengthen our business and, in some instances, improve guest experiences.

The following discussion provides an analysis of our operating results for the three and six months ended MarchJune 31,30, 2026 and 2025. The following data should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

Comparison of the Three Months Ended MarchJune 31,30, 2026 to the Three Months Ended MarchJune 31,30, 2025

The following table presents key operating and financial information for the three months ended MarchJune 31,30, 2026 and 2025:

Admissions revenue. Admissions revenue for the three months ended MarchJune 31,30, 2026 decreased $8.6$11.7 million, or 5.5%,4.6%, to $147.5$244.1 million as compared to $156.1$255.7 million for the three months ended MarchJune 31,30, 2025. The decline was primarily a result of decreasesa decrease in attendance.attendance and admission per capita. Total attendance for the firstsecond quarter of 2026 decreased by approximately one hundred and seventy179 thousand guests, or 5.0%, when2.9%, compared to the same prior year quarter. AttendanceThe decrease in attendance was negativelyprimarily impacteddue byto an unfavorable weathercalendar conditionsshift acrossincluding mostthe timing of ourthe marketsEaster holiday and a declinedecrease in visitation from international marketsvisitation compared withto the prior-yearsame prior year quarter. Admission per capita decreased by 0.5%$0.72 to $45.81$40.31 for the firstsecond quarter of 2026 compared to $46.04$41.03 in the prior year quarter, primarily due to the net impact of the admissions product mix when compared to the same prior year quarter.

Food, merchandise and other revenue. Food, merchandise and other revenue for the three months ended MarchJune 31,30, 2026 remainedincreased flat$4.8 atmillion, $130.8or 2.0%, to $239.2 million as compared to $234.5 million for the three months ended MarchJune 31,30, 2025, as lowera attendance,result asof discussedan above,increase wasin in-park per capita spending, partially offset by increaseda decrease in park per capita spending.attendance. In-park per capita spending increased by 5.3%5.1% to $40.62$39.51 in the firstsecond quarter of 2026 compared to $38.58$37.61 in the firstsecond quarter of 2025. In park per capita spending improvedincreased primarily due to anhigher increasepenetration inand demandthe acrossimpact manyof in-parkpricing offerings wheninitiatives compared to the firstsame quarterprior ofyear 2025.quarter.

Costs of food, merchandise and other revenues. Costs of food, merchandise and other revenues for the three months ended MarchJune 31,30, 2026 decreasedincreased $1.3$0.9 million, or 5.7%,2.4%, to $38.1 million as compared to $37.2 million for the three months ended MarchJune 31,30, 2025.

Operating expenses. Operating expenses for the three months ended MarchJune 31,30, 2026 increased $10.0$10.9 million, or 6.2%,5.3%, to $171.2$215.7 million as compared to $161.3$204.8 million for the three months ended MarchJune 31,30, 2025. The increase in operating expenses iswas primarily due to ana approximately $3.7 million increase in non-cash self-insurance adjustments, and an approximately $2.8$4.1 million increase in non-recurring third-party labor and consulting costs whenprimarily comparedrelated to thedamages firstfrom quartera ofhistoric 2025.winter freeze in our Florida parks.

Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended MarchJune 31,30, 2026 increased $3.9$2.2 million, or 8.9%,3.4%, to $48.1$66.6 million as compared to $44.1$64.4 million for the three months ended MarchJune 31,30, 2025. The increase in selling, general and administrative expenses iswas primarily due to a non-cash $3.1$1.8 million increase in information technology costs primarily related to the amortization of implementation costs of a new enterprise resource planning system when compared to the firstsame quarterprior ofyear 2025.quarter.

Depreciation and amortization. Depreciation and amortization expense for the three months ended MarchJune 31,30, 2026 increased $3.4$2.8 million, or 8.1%,6.5%, to $45.1$45.8 million as compared to $41.7$43.0 million for the three months ended MarchJune 31,30, 2025. The increase primarily relatesrelated to the impact of new asset additions, partially offset by the impact of asset retirements and fully depreciated assets.

Interest expense. Interest expense for the three months ended MarchJune 31,30, 2026 decreased $2.4$1.6 million, or 7.0%,4.6%, to $31.7$32.4 million as compared to $34.1$34.0 million for the three months ended MarchJune 31,30, 2025. The decrease primarily relates to the impact of a lower average interest rate on our variable debt. See Note 6–Long-Term Debt to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q for further details.

BenefitProvision fromfor income taxes. BenefitProvision fromfor income taxes in the three months ended MarchJune 31,30, 2026 was $5.9$21.4 million compared to $1.1$26.2 million for the three months ended MarchJune 31,30, 2025. Our consolidated effective tax rate was 14.8%25.3% for the three months ended MarchJune 31,30, 2026 compared to 6.2%24.6% for the three months ended MarchJune 31,30, 2025. The effective tax rate infor the three months ended MarchJune 31,30, 2026 and 2025 was primarily impacted bydue to state income taxes and deferredlimits revaluationon duecertain tocompensation state filing changes as of January 1, 2026. The effective tax rate in the three months ended March 31, 2025 was primarily impacted by state income taxes and deferred revaluation due to state filing changes as of January 1, 2025deductibility.

Generally, our principal sources of liquidity are cash generated from operations, funds from borrowings and existing cash on hand. Our principal uses of cash typically include the funding of working capital obligations, debt service, investments in theme parks (including capital projects), share repurchases and/or other return of capital to stockholders, when permitted. As of MarchJune 31,30, 2026, we had a working capital ratio (defined as current assets divided by current liabilities) of 0.5. We typically have operated with a working capital ratio of near 1.0 due to a significant deferred revenue balance from revenues paid in advance for our theme park admissions products and high turnover of in-park products that result in limited inventory balances. We believe our cash flow from operations, along with our revolving credit facility, will allow us to meet our liquidity needs.

As market conditions warrant and subject to our contractual restrictions and liquidity position, we or our affiliates, may from time to time purchase our outstanding equity and/or debt securities, including our outstanding bank loans in privately negotiated or open market transactions, by tender offer or otherwise. Any such purchases may be funded by incurring new debt, including additional borrowings under our Senior Secured Credit Facilities. Any new debt may also be secured debt. We may also use available cash on our balance sheet. The amounts involved in any such transactions, individually or in the aggregate, may be material. Further, since some of our debt may trade at a discount to the face amount among current or future syndicate members, any such purchases may result in our acquiring and retiring a substantial amount of any particular series, with the attendant reduction in the trading liquidity of any such series. Depending on conditions in the credit and capital markets and other factors, we will, from time to time, consider other financing transactions, the proceeds of which could be used to refinance our indebtedness or for other purposes. We believe that existing cash and cash equivalents, cash flow from operations, and available borrowings under our revolving credit facility will be adequate to meet the capital expenditures, debt service obligations and working capital requirements of our operations for at least the next 12 months.

Cash Flows from Operating Activities

Net cash provided by operating activities was $66.8$236.8 million during the threesix months ended MarchJune 31,30, 2026 as compared to $25.7$206.9 million during the threesix months ended MarchJune 31,30, 2025. The change in net cash provided by operating activities was primarily impacted by changes in working capital.

Cash Flows from Investing Activities

Investing activities consist principally of capital investments we make in our theme parks for future attractions and infrastructure. Net cash used in investing activities during the threesix months ended MarchJune 31,30, 2026 consisted of capital expenditures of $69.6$138.2 million largely related to future attractions. Net cash used in investing activities during the threesix months ended MarchJune 31,30, 2025 consisted primarily of $56.9$110.5 million of capital expenditures.

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

Cash Flows from Financing Activities

Net cash used in financing activities during the threesix months ended MarchJune 31,30, 2026 resultsprimarily primarilyresulted from $93.8$220.3 million used to repurchase shares and payment of related excise tax and repayments of $3.9$7.7 million on our long-term debt, partially offset by $30.0 million in net proceeds of $50 million drawn from activity on ourthe revolving credit facility. Net cash used in financing activities during the threesix months ended MarchJune 31,30, 2025 resultsprimarily primarilyresulted from $4.6$9.2 million used to repurchase shares and repayments of $3.9$7.7 million on our long-term debt. See Note 10–Stockholders’ Deficit in our notes to the unaudited condensed consolidated financial statements for further details.

We are a holding company and conduct our operations through our subsidiaries, which have incurred or guaranteed indebtedness as described below. As of MarchJune 31,30, 2026, our indebtedness consisted of senior secured credit facilities and 5.25% senior notes (the “Senior Notes”).

As of MarchJune 31,30, 2026, our Senior Secured Credit Facilities consisted of $1.519$1.515 billion in Term B-3 Loans which will mature on December 4, 2031, along with a $700.0 million Revolving Credit Facility, of which $30.0$50.0 million was drawn upon as of MarchJune 31,30, 2026 and will mature on August 23, 2029. Additionally, as of MarchJune 31,30, 2026, SEA had approximately $10.9 million of outstanding letters of credit, leaving approximately $659.1$639.1 million available for borrowing under the Revolving Credit Facility.

As of MarchJune 31,30, 2026, SEA had outstanding $725.0 million in aggregate principal amount of Senior Notes due on August 15, 2029.

As of MarchJune 31,30, 2026, we were in compliance with all covenants in the credit agreement governing the Senior Secured Credit Facilities and the indentures governing our Senior Notes. See Note 6–Long-Term Debt to our unaudited condensed consolidated financial statements for further details related to our long-term debt and restrictive covenants.

We define Adjusted EBITDA as net (loss) income plus (i) income tax (benefit) provision, (ii) loss on extinguishment of debt, (iii) interest expense, consent fees and similar financing costs, (iv) depreciation and amortization, (v) equity-based compensation expense, (vi) certain non-cash charges/credits including those related to asset disposals and self-insurance reserve adjustments, (vii) certain business optimization, development and strategic initiative costs, (viii) merger, acquisition, integration and certain investment costs, and (ix) other nonrecurring costs including incremental costs associated with the COVID-19 pandemic or similar unusual events.

Under the credit agreement governing the Senior Secured Credit Facilities and the indentures governing our Senior Notes and First-Priority Senior Secured Notes (collectively, the “Debt Agreements”), our ability to engage in activities such as incurring additional indebtedness, making investments, refinancing certain indebtedness, paying dividends and entering into certain merger transactions is governed, in part, by our ability to satisfy tests based on Covenant Adjusted EBITDA as defined in the Debt Agreements (“Covenant Adjusted EBITDA”).

The following table reconciles Adjusted EBITDA and Covenant Adjusted EBITDA to net (loss) income for the periods indicated. Certain amounts relating to prior period results were reclassified to conform to current period presentation. These reclassifications have not changed the results of operations of the prior period.

(c) For the threethree, six, and twelve months ended MarchJune 31,30, 2026, reflects business optimization, development and other strategic initiative costs primarily related to: (i) $3.5$8.8 millionmillion, related$14.4 tomillion, theand implementation$23.0 ofmillion, a new enterprise resource planning system; (ii) $2.1 millionrespectively, of other business optimization costs and strategic initiative costs and (iiiii) $0.8$1.3 millionmillion, $1.6 million, and $2.5 million, respectively, of severancethird-party and other separation costs.. For the three months ended March 31, 2025, reflects business optimization, development and other strategic initiative costs primarily related to $1.2 million of other business optimization costs and strategic initiativeconsulting costs. For the twelve months ended March 31, 2026, reflectsReflects business optimization, development and other strategic initiative costs primarily related to: (i) $10.3$0.4 million, $0.4 million, and $8.2 million relatedof tothird-party consulting costs for the implementationthree, ofsix, aand newtwelve enterprisemonths resourceended planningJune system;30, 2025, respectively, and (ii) $6.2$2.2 million, $3.5 million, and $6.5 million of other business optimization costs and strategic initiative costs; (iii)for $2.5the millionthree, of severancesix, and othertwelve separationmonths costsended andJune (iv)30, $1.62025, million of third-party consulting costs.respectively.

(d) Reflects the impact of expenses, net of insurance recoveries and adjustments, incurred primarily related to certain matters, which we are permitted to exclude under the credit agreement governing our Senior Secured Credit Facilities due to the unusual nature of the items. Certain amounts relating to prior period results were reclassified to conform to current period presentation. These reclassifications have not changed the results of operations of the prior period.

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

(f) Our Debt Agreements permit the calculation of certain covenants to be based on Covenant Adjusted EBITDA, as defined above, for the last twelve-month period further adjusted for net annualized estimated savings we expect to realize over the following 24-month period related to certain specified actions, including restructurings and cost savings initiatives. These estimated savings are calculated net of the amount of actual benefits realized during such period. These estimated savings are a non-GAAP Adjusted EBITDA add-back item only as defined in the Debt Agreements and does not impact our reported GAAP net (loss) income.

Material Cash RequirementRequirements from Known Contractual and Other Obligations and Commitments

There have been no material changes to our contractual obligations as Marchof 31,June 30, 2026 from those previously disclosed in our Annual Report on Form 10-K.