SeaWorld(SEAS) - 2022 Q4 - Annual Report

Revenue Generation - Revenue is primarily generated from theme park admissions and purchases of food and merchandise within the parks[23] - The company generates most of its revenue from admission ticket sales to theme parks, utilizing travel agents, ticket resellers, and direct sales through websites and social media[75] - In-park offerings, including food, beverage, and merchandise, contribute significantly to revenue, with a focus on high-quality, diverse culinary experiences and sustainable sourcing[78][79] Impact of COVID-19 - The COVID-19 pandemic significantly impacted attendance, with international and group-related attendance declining from historical levels[25] - All 12 theme parks were reopened by the end of Q2 2021, operating without COVID-19 related capacity limitations[26] - The company faced increased turnover and staffing challenges due to the labor market and COVID-19, impacting guest experience and operational efficiency[29] - The theme park industry is recovering from COVID-19 impacts, with improved attendance levels and a strong consumer value proposition compared to other entertainment options[97] New Attractions and Developments - In March 2022, Sesame Place San Diego park opened, expected to operate more days than the park it replaced[32] - In 2022, SeaWorld Orlando opened Ice Breaker, a quadruple launch coaster, while SeaWorld San Antonio introduced Tidal Surge, the world's tallest and fastest Screaming Swing[7] - Busch Gardens Tampa Bay opened Iron Gwazi in 2022, recognized as the tallest hybrid coaster in North America and the world's fastest and steepest hybrid coaster[7] - Aquatica Orlando, ranked 4 most attended water park in North America, opened Reef Plunge in 2022, a body slide that passes through an underwater habitat[7] - The company continues to expand its portfolio with new attractions and parks, enhancing guest experiences and driving attendance growth[7] - In 2022, the company opened numerous new rides and attractions, including 5 of the top 10 Best New Amusement Park Attractions, led by Ice Breaker at SeaWorld Orlando, which ranked 1[47] - The company plans to introduce new rides, attractions, events, and upgrades in every park for 2023, indicating a strong line-up of offerings[47] Animal Care and Conservation - The company is committed to animal rescue and conservation, having helped over 40,000 wild animals[36] - The Sesame Place park in Pennsylvania is the first theme park globally to achieve Certified Autism Center designation[38] - Discovery Cove, an all-inclusive marine life theme park, offers intimate experiences with marine animals and was also designated a Certified Autism Center in 2019[8] - The company is committed to animal care, with a team of board-certified veterinarians and onsite animal hospitals at each park[55] - The company has helped over 40,000 animals across various species through its rescue operations[59] - The manatee rescue facility at SeaWorld Orlando is set to double in size to accommodate the growing number of manatees in crisis[59] - The company is accredited by the Association of Zoos and Aquariums (AZA) and the Alliance of Marine Mammal Parks and Aquariums (AMMPA) for its zoological programs[54] Sustainability Initiatives - The company has invested in renewable energy projects, including a solar carport system at Sesame Place San Diego that generates up to 90% of the park's annual energy needs[66] - The company has removed all expanded polystyrene products and plastic straws from its parks as part of its waste management initiatives[68] - The company has added a sustainable, plant-based burger to its menus at all parks in 2019 to meet growing guest demand[69] Workforce and Management - The company employs approximately 3,200 full-time employees and around 11,900 part-time and seasonal employees as of December 31, 2022[70] - The management team consists of approximately 48% female and 34% from minority ethnicities, with the overall workforce being 51% women and 56% from minority ethnicities[71] Financial Performance and Risks - The company generated significant operating cash flow in 2021 and 2022, recovering from the impacts of the pandemic[38] - The company has substantially reduced or deferred capital expenditures since March 2020 due to COVID-19, focusing on essential investments[47] - As of December 31, 2022, approximately $1.2 billion of the company's outstanding long-term debt represents variable-rate debt[337] - A hypothetical 100 bps increase in LIBOR would increase the company's annual interest expense by approximately $15.8 million, assuming an average balance on revolving credit borrowings of approximately $390.0 million[337] - The company's financial risk management aims to reduce the potential negative impact of interest rate and foreign currency exchange rate fluctuations[336] Regulatory Compliance and Industry Competition - Regulatory compliance is critical, with operations subject to various federal, state, and local laws, including the Animal Welfare Act and the Endangered Species Act[101] - The company has submitted comments on proposed regulations affecting animal welfare, indicating active engagement in regulatory discussions[103] - The theme park market is highly competitive, with major competitors including The Walt Disney Company and Universal Parks and Resorts, among others[98] Brand and Marketing Strategies - The company has expanded its brand through licensing agreements, including partnerships with Sesame Workshop and Anheuser-Busch, enhancing brand visibility and consumer loyalty[80][92] - Corporate sponsorships and strategic alliances are sought to enhance brand value and drive mutual business gains, contributing to conservation efforts[84]