Q Investor Presentation

Transcription

1 Q Investor Presentation As of March 31, 2015 Some slides updated June 1, 2015

2 Cautionary Statements Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of U.S. federal securities laws. All statements contained in this presentation other than statements of historical facts are forward-looking statements. Words such as might, will, may, should, estimates, expects, continues, contemplates, anticipates, projects, plans, potential, predicts, intends, believes, forecasts, future and variations of such words or similar expressions are intended to identify forward-looking statements. Forward-looking statements are not historical facts, and are based upon management s current expectations, beliefs, estimates and projections, and various assumptions, many of which are inherently uncertain and beyond our control. Such expectations, beliefs, estimates and projections are expressed in good faith and management believes there is a reasonable basis for them. However, there can be no assurance that management s expectations, beliefs, estimates and projections will be achieved and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements, including risks detailed in SeaWorld Entertainment, Inc. s ( SeaWorld or the Company ) 2014 Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission (the SEC ), as such risk factors may be updated from time to time in our periodic filings with the SEC. Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances or other changes affecting forward-looking information except to the extent required by applicable securities laws. Statement Regarding Non-GAAP Financial Measures This presentation includes several metrics which are not calculated in accordance with the generally accepted accounting principles in the United States ( GAAP ), including Adjusted EBITDA, Free Cash Flow and Adjusted Free Cash Flow. These metrics have important limitations and should not be considered in isolation or as a substitute for measures of the Company s financial performance or liquidity prepared in accordance with GAAP. In addition, these metrics, as presented by the Company, may not be comparable to similarly titled measures of other companies due to varying methods of calculations. Adjusted EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, as further adjusted to exclude certain unusual, non-cash and other items permitted in calculating covenant compliance under the credit agreement governing the Company s senior secured credit facilities. The Company believes that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about the calculation of, and compliance with, certain financial covenants in the credit agreement. Adjusted EBITDA is a material component of these covenants. The Company also uses Adjusted EBITDA in connection with certain components of its executive compensation program. In addition, investors, lenders, financial analysts and rating agencies have historically used EBITDA-related measures in the Company s theme park and entertainment industry, along with other measures to evaluate the Company s ability to meet its debt service requirement, to estimate the value of a company and to make informed investment decisions. Free Cash Flow is defined as net cash provided by operating activities reduced by capital expenditures. Adjusted Free Cash Flow is defined as Free Cash Flow reduced by the one-time cash payment of the 2009 Advisory Agreement termination fee. For a reconciliation of Adjusted EBITDA to net income (loss) and Free Cash Flow and Adjusted Free Cash Flow to cash flow from operating activities, please refer to the Appendix in this presentation or our Quarterly Earnings Release, which can be found at our website Statement Regarding Use of Registered Trademarks The Company owns or has rights to use a number of registered and common law trademarks, service marks and trade names in connection with its business in the United States and in certain foreign jurisdictions, including SeaWorld Entertainment, SeaWorld Parks & Entertainment, SeaWorld, Shamu, Busch Gardens, Aquatica, Discovery Cove, Sea Rescue, and other names and marks that identify our theme parks, characters, rides, attractions and other businesses. In addition, the Company has certain rights to use Sesame Street marks, characters and related indicia through certain license agreements with Sesame Workshop (f/k/a Children s Television Workshop). Solely for convenience, trademarks, service marks and trade names referred to in this presentation may be without the and symbols, but such references are not intended to indicate, in any way, that the Company will not assert, to the fullest extent under applicable law, its rights or the rights of the applicable licensors to these trademarks, service marks, and trade names. 2

3 Company Overview & Investment Highlights 3

4 A Leading Theme Park and Entertainment Company We inspire people, through the power of entertainment, to celebrate, connect with and care for the natural world we share. 4 4

5 More than 50 Years of Operations Busch Gardens Tampa opens as an extension of the Tampa brewery tour SeaWorld Orlando opens Sesame Place opens Anheuser-Busch acquires SeaWorld parks Aquatica Orlando opens Sea Rescue premieres; Acquisition of Knott s Soak City in Chula Vista, Calif SeaWorld San Diego opens Busch Gardens Williamsburg opens SeaWorld San Antonio opens Discovery Cove opens Acquisition by The Blackstone Group SEAS begins trading on NYSE; Aquatica San Diego opens; The Wildlife Docs premieres 5

6 SeaWorld Entertainment, Inc. At a Glance 11 parks in 5 states Operations 4 of top 20 theme parks by attendance in North America 1 Over 50 year operating history Approximately 89,000 animals 2 Over 600 rides and attractions 2 Approximately 2,000 acres of owned land, with nearly 400 acres available for future development LTM Results 4 SeaWorld s Differentiation 22.6 million in Attendance $1.4 billion of Revenue $381 million of Adjusted EBITDA $138 million of Free Cash Flow Large scale parks Located in key markets: warm weather, sizable local populations, tourist destinations Park clusters in 5 of 6 markets Distinct zoological collection Strong brands and intellectual property 1 Source: Theme Index: The Global Attractions Attendance Report TEA / AECOM, As of the year ended December 31, Developable land defined as unimproved acreage outside park perimeter, including unpaved guest parking lots but excluding paved parking lots LTM results represent latest twelve months through March 31,

7 Investment Highlights Globally Recognized Parks, Brands and Intellectual Property Well-Capitalized Parks Positioned for Sustained Growth Diversified Revenue Base Strong Free Cash Flow Generation Continued Growth Opportunities Experienced and Execution Focused Management Team 7

8 Globally Recognized Parks, Brands and Intellectual Property Differentiated brands and intellectual property (IP) Drives attendance Enhances guest experience Creates monetizable value in and out of parks Demonstrated ability to create new IP Opportunity to leverage owned brands and IP across multiple platforms Brands that transcend cultures Library of IP includes more than 1 : 200 brands & marks 700 active U.S. trademarks Strong Brands and Intellectual Property Drive Value 400 foreign trademark registrations in more than 60 countries 1 As of the year ended December 31,

9 Among the World s Largest Zoological Collections Inspiring Guests to Care for the Natural World through Up-Close Animal Experiences One-of-a-kind zoological collection of approximately 89,000 marine and terrestrial animals 1 More than 80% of our marine mammals were born in human care 1 Successful and innovative breeding programs that have produced 32 killer whales, 165 dolphins and 148 sea lions, among other species 1 Our marine animal populations are characterized by their substantial genetic diversity One of the world s largest penguin populations 1 As of the year ended December 31,

10 Care for Our Community and the Natural World We Share A Global Leader in Animal Husbandry, Veterinary Care, Enrichment and Animal Behavior More than 1,500 employees dedicated to the welfare, enrichment, husbandry and veterinary care of our animals 1 In collaboration with the government and other accredited stranding networks, we operate one of the world s most respected programs to rescue ill and injured marine animals, with the goal to rehabilitate and return them back to the wild Our animal experts have helped more than 25,000 ill, injured, orphaned and abandoned animals for more than four decades 2 We contribute to wildlife research, habitat protection, animal rescue and conservation education through the SeaWorld & Busch Gardens Conservation Fund and other environmental organizations 1 As of the year ended December 31, As of March 31,

11 Investment Highlights Globally Recognized Parks, Brands and Intellectual Property Well-Capitalized Parks Positioned for Sustained Growth Diversified Revenue Base Strong Free Cash Flow Generation Continued Growth Opportunities Experienced and Execution Focused Management Team 11

12 Well-Capitalized Parks Positioned for Sustained Growth Well-Maintained and Industry Recognized Theme Parks and Attractions In 2014, TripAdvisor ranked 9 of our 11 theme parks among the best 25 attractions in North America, including Discovery Cove, which was voted the Number 1 amusement park in the world for the second consecutive year 1 Busch Gardens Williamsburg has been named the most beautiful amusement park in the world for 24 consecutive years by the National Amusement Park Historical Association 2 Winner of the top three spots in Amusement Today s Golden Ticket Award for Best Marine Life Park since Busch Gardens Williamsburg has been recognized with the Golden Ticket Award for Best Landscaping each year since the award s inception in Discovery Cove Busch Gardens Williamsburg SeaWorld Orlando 1 TripAdvisor Traveler s Choice Awards, National Amusement Park Historical Association, Amusement Today, Inc. Golden Ticket Awards,

13 2015 New Attractions & Consumer Events 1 Dolphin Cove SeaWorld Orlando Pacific Point Preserve SeaWorld San Antonio Tempesto Busch Gardens Williamsburg Clyde & Seamore s Sea Lion High SeaWorld Orlando & San Antonio Colossal Curl Adventure Island Tampa 1 Not an all-inclusive listing. For full representation of 2015 attractions and events, please visit 13

14 2016 New Attraction: Mako Opening at SeaWorld Orlando in summer 2016 Will be the tallest, longest and fastest coaster in any of Orlando s many theme parks Hypercoaster manufactured by leading roller coaster builder Bolliger & Mabillard Mako will be the centerpiece of a newly themed shark realm, which includes walkthrough attraction, Shark Encounter and signature dining experience, Sharks Underwater Grill 14

15 2016 New Attraction: Cobra s Curse Opening at Busch Gardens Tampa in 2016 Family-friendly spin coaster located in the Egypt area of the park Cobra s Curse ride elements include an elevator-like vertical lift and an 80-foot cobra icon 15

16 Blue World Project 1 Blue World Project The first realm expected to open at SeaWorld San Diego in 2018 Expands existing facilities, with a maximum depth of 50 feet and surface area of nearly 1.5 acres Transforms how our guests experience killer whales through upclose and personal encounters Also announced $10 million in matching funds for research focused on identifying threats to killer whales in the wild and a multi-million dollar partnership on ocean health Visit to learn more 1 As of May 7,

17 Investment Highlights Globally Recognized Parks, Brands and Intellectual Property Well-Capitalized Parks Positioned for Sustained Growth Diversified Revenue Base Strong Free Cash Flow Generation Continued Growth Opportunities Experienced and Execution Focused Management Team 17

18 Diversified Revenue Base Revenue by State 2014 Revenue by Line of Business Other 12% VA 13% CA 19% FL 56% All Other 38% Admissions 62% Our parks are near large metro areas, with over 50 million people located within 150 miles 2014 Attendance by Guest Origin Our parks operate more than 100 culinary outlets and nearly 300 specialty retail shops 2014 Attendance by Family Demographic International 16% Domestic 84% Adult Only 46% Family 54% Our diversified guest base is comprised of local visitors, non-local domestic visitors and international tourists Our parks have broad demographic appeal, with an average party size of 3.9 people 1 As of the year ended December 31,

19 Investment Highlights Globally Recognized Parks, Brands and Intellectual Property Well-Capitalized Parks Positioned for Sustained Growth Diversified Revenue Base Strong Free Cash Flow Generation Continued Growth Opportunities Experienced and Execution Focused Management Team 19

20 Strong Free Cash Flow Generation Strong Free Cash Flow Generation with Growth Opportunities in the Future ($ in millions) $381 $ LTM Adjusted EBITDA 1 Cash paid for Interest $0 $12 Cash paid for Taxes Restructuring & other related charges $10 Estimated cost savings $2 Working Capital and Other 2 $286 Cash Flow from Operations $148 Capital Expenditures $ LTM Free Cash Flow 1 Deleveraging over time and refinancing opportunities ~$650M in Federal NOLs Reduce duplication to increase efficiencies Estimated cost savings Minimal working capital needs Disciplined and flexible capital spending LTM results represent latest twelve months through March 31, Excludes other non-cash items. 20

21 Investment Highlights Globally Recognized Parks, Brands and Intellectual Property Well-Capitalized Parks Positioned for Sustained Growth Diversified Revenue Base Strong Free Cash Flow Generation Continued Growth Opportunities Experienced and Execution Focused Management Team 21

22 Continued Growth Opportunities Increasing Admissions Revenue and In-Park Spending 1 Expand application of variable pricing to additional markets Optimize pricing and benefits for tiered pass products Promote in-park product offerings and special events Quick Queue, PhotoKey and All-Day Dining Deal Cashless Wristband Program Refresh restaurant concepts to market style, away from traditional cafeteria style service Create premium in-park experiences utilizing mobile technology to drive higher in-park spending Expedition Café (market style) SeaWorld Orlando Multi-year Focus on Digital Innovation Discovery Guide mobile apps put the parks into guests pockets In-app purchasing, mobile ticketing and ability to redeem special offers Guests can use the app to pre-order meals or for table delivery at some dining locations 1 In-Park Spending represents total food, merchandise and other revenue. 22

23 Expansion Opportunities Opportunities Self-Funded New Parks (2000: Discovery Cove) Ability to replicate proven park formats and attractions Significant owned and available land for development Variety of park formats and sizes expands opportunity set Opportunistic Acquisitions (2012: Aquatica San Diego) Opportunistic acquisition and expansion opportunities, particularly for smaller park formats Ability to rebrand acquired parks with Company brands New Businesses Extend Company-branded entertainment outside of parks Possible opportunities may include lodging, cruise and entertainment districts International Expansion Capital-light joint ventures leverage Company s brands and expertise while generating royalties and management fees Memorandum of Understanding to build a multi-park development in the Middle East; first phase projected to open in 2020 Letter of Intent with Village Roadshow Theme Parks to co-develop parks in Pan-Asia, India and Russia 23

24 More than 330 Million Viewers have Watched these Two Television Series 1 Sea Rescue focuses on the rescue, rehab, and return of sea life back into their natural habitat Nominated for a 2014 Daytime Emmy Award for Outstanding Children's Series Premiered in April 2012 and began its fourth season on October 4, 2014; renewed for its fifth season Top-rated Saturday morning show in most major U.S. markets The Wildlife Docs gives a behind the scenes look at Busch Gardens Tampa s elite zoological team Much of the show takes place in the park's Animal Care Center, an innovative medical center that brings park guests into the animal care experience Nominated for a 2015 Daytime Emmy Award for Outstanding Children's Series Premiered in October 2013 and began its second season on October 4, 2014; renewed for its third season 1 Total cumulative viewership data from April 7, 2012 through March 29, 2015; not a discrete value. 24

25 Investment Highlights Globally Recognized Parks, Brands and Intellectual Property Well-Capitalized Parks Positioned for Sustained Growth Diversified Revenue Base Strong Free Cash Flow Generation Continued Growth Opportunities Experienced and Execution-Focused Management Team 25

26 Experienced and Execution-Focused Management Team Name Title Years with SEAS 1 Years in Industry 1 Joel Manby Chief Executive Officer, President & Director <1 16 Marc Swanson Chief Accounting Officer and Interim Chief Financial Officer Dan Brown Chief Parks Operations Officer Scott Helmstedter Chief Creative Officer 4 29 Dave Hammer Chief Human Resources Officer Brad Andrews Chief Zoological Officer Tony Taylor Chief Legal & Corporate Affairs Officer, General Counsel & Corporate Secretary As of June 1,

27 Financial Summary 27

28 Financial Performance (In millions except per capita data) CAGR 2015 LTM 1 Attendance % 22.6 Total Revenue per Capita 2 $53.32 $56.31 $58.37 $62.43 $ % $61.15 Revenue $1,196 $1,331 $1,424 $1,460 $1, % $1,380 Adjusted EBITDA $343 $382 $415 $439 $ % $381 Capital Expenditures $120 $225 $192 $166 $ % $148 Adjusted Free Cash Flow 3 $82 $39 $108 $167 4 $ % $ LTM results represent latest twelve months through March 31, Calculated as total revenue divided by attendance. 3 Certain prior year amounts included in this presentation have been revised. Refer to the Company s 2014 Annual Report on Form 10K for additional information. 4 Excludes a one-time fee of $46.3 million paid to an affiliate of Blackstone in connection with the termination of the 2009 Advisory Agreement in Q

29 Disciplined Capital Spending Pursue Disciplined Investment and Expansion Opportunities (In $ millions) Expected full-year 2015 capital expenditures will be in the range of $180 million to $190 million 1 Capital re-investment program will bring new attractions to destination parks Blue World Project brings new, first-of-its-kind killer whale environments to all three SeaWorld parks, the first to open at SeaWorld San Diego in 2018 Capital Spending $120 $225 $192 $166 $155 $180 to $ Guidance 1 1 Management guidance on 2015 capital spending is as of May 7,

30 Efficient Capital Structure (In $ millions) Key Highlights At March 31, 2015, the Company had three outstanding interest rate swaps that hedge interest rate risk of $1 billion of the Term B-2 Loans, effectively converting over 70% of variable rate debt to fixed rate through September 2016 On April 7, 2015 the Company closed on a transaction to refinance the existing unsecured Senior Notes, which became callable in December 2014 In April 2015 the Company executed a new interest rate swap agreement to effectively fix the interest rate on $250 million of the new Term B-3 Loans Tranche (as of 3/31/2015) Amount Total cash & cash equivalents 1 $43 Coupon (bps) Maturity $192.5M revolver $30 L+225 4/24/2018 Term B-2 Loans $1,349 L+225 / 0.75% 5/14/2020 Total secured debt $1,379 Senior Notes $ % 12/1/2016 Total long-term debt, includes current maturities 2 $1,639 x EBITDA Net debt 2 $1, x 3 1 Excludes Parent Company only cash balance. 2 Excludes unamortized debt discount. 3 Represents 2015 LTM net debt divided by 2015 LTM Adjusted EBITDA. 30

31 Returning Value to Shareholders Over $230 Million in Net Value Returned to Shareholders since April 2013 (In millions except per share amounts) Q Q Q Q Q Q Q Total Dividends Paid Share Buybacks per share $ value total shares net $ value $0.20 $0.20 $0.20 $0.20 $0.21 $0.21 $0.21 $1.43 $18 $18 $18 $18 $18 $18 $18 $ $44 -- $51 -- $15 -- $110 Capital Allocation Priorities 1. Grow the Company through opportunistic acquisitions and brand extensions What we did: Acquired eleventh theme park in 2012; expansion into media, digital and licensing 2. Provide a stable dividend that grows over time What we did: Began dividend program in 2013; increased dividend by $0.01 per share in Opportunistically buy back our own stock What we did: Authorized to repurchase up to $250 million of common stock, with $235 million available for future repurchases 1 4. Proactively manage long-term debt What we did: April 2015 refinanced unsecured Senior Notes into new Term B-3 Loans Total Value $236 1 As of March 31,

32 Investment Summary Globally Recognized Parks, Brands and Intellectual Property Well-Capitalized Parks Positioned for Sustained Growth Diversified Revenue Base Strong Free Cash Flow Generation Continued Growth Opportunities Experienced and Execution-Focused Management Team 32

33 Appendix 33

34 Reconciliation of Adjusted EBITDA to Net (Loss) Income 1 (In $ millions) LTM 2 Net (loss) income ($45) $15 $74 $52 $50 56 (Benefit from) provision for income taxes (29) Loss on early extinguishment of debt Interest expense Depreciation & amortization Restructuring & other related costs Secondary offering costs Termination of advisory agreement Advisory fees Equity-based compensation expense Debt refinancing costs Other adjusting items Other non-cash expenses Carve-out costs Estimated cost savings Deferred revenue write-down Adjusted EBITDA 3 $343 $382 $415 $439 $370 $381 1 Certain prior year amounts included in this presentation have been revised. Refer to the Company s 2014 Annual Report on Form 10K for more information LTM results represent latest twelve months through March 31, Column may not foot due to rounding. 34

35 Reconciliation of Adjusted Free Cash Flow to Cash Flow from Operating Activities 1 (In $ millions) LTM 2 Net cash provided by operating activities $202 $264 $299 $286 $262 $286 Capital expenditures Free Cash Flow Advisory termination fee cash payment Adjusted Free Cash Flow 3 $82 $39 $108 $167 $107 $138 1 Certain prior year amounts included in this presentation have been revised. Refer to the Company s 2014 Annual Report on Form 10K for more information LTM results represent latest twelve months through March 31, Column may not foot due to rounding. 35

36 Q Investor Presentation As of March 31, 2015 Some slides updated June 1, 2015