Q2 2014 Investor Presentation...Q2 2014 Investor Presentation as of June 30, 2014 Cautionary...

Q2 2014 Investor Presentation

as of June 30, 2014

Cautionary Statements

2

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. You can identify forward-looking statements by the use of words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “project,” “predict,” “intend,” “future,” “potential,” “continue,” and other similar expressions. 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”) Quarterly Report Form 10-Q for the quarter ended June 30, 2014 as filed with the U.S. Securities and Exchange Commission. 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 indenture governing the Company’s existing senior notes and 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 indenture and 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 less 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 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 www.seaworldentertainment.com.

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, Inc.SM, SeaWorld Parks & Entertainment®, SeaWorld®, Shamu®, Busch Gardens®, Aquatica SeaWorld’s Waterpark™, 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, the 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.

http://www.seaworldentertainment.com/

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Company Overview & Investment Highlights

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A Leading Theme Park and Entertainment Company

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We inspire people, through the power of entertainment, to celebrate, connect with and care for the natural world we share.

SeaWorld Entertainment, Inc. At a Glance…

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• $1.4 billion of Revenue • $412 million of Adjusted EBITDA • $153 million of Free Cash Flow

• 11 parks in 5 states • 4 of top 20 theme parks by attendance in

North America1

• Over 50 year operating history • Approximately 86,000 animals2

• Over 600 rides and attractions2

• Approximately 2,000 acres of owned land

2014 LTM3 Results

Operations

• Large scale parks • Located in key markets: warm weather, sizable

local populations, tourist destinations • Park clusters in 5 of 6 markets • Distinct animal collection • Strong brands and intellectual property

SeaWorld’s Differentiation

1 Source: Theme Index: The Global Attractions Attendance Report TEA / AECOM, 2014. 2 As of December 31, 2013. 3 2014 LTM results represent latest twelve months through June 30, 2014.

Investment Highlights

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Diversified Revenue Base

Globally Recognized Parks, Brands and Intellectual Property

Well-Capitalized Parks Positioned for Sustained Growth

Ongoing Margin Expansion Opportunities

Strong Free Cash Flow Generation

Continued Growth Opportunities

Execution–Focused Management Team


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• 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 over1: – 200 brands & marks – 700 active U.S. trademarks – 400 foreign trademarks registrations in over 60

countries

Strong Brands and Intellectual Property Drive Value

1 As of December 31, 2013.

Among the World’s Largest Zoological Collections

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• One-of-a-kind collection of approximately 86,000 marine and terrestrial animals1

• More than 80% of our marine mammals were born in human care1

• Successful and innovative breeding programs that have produced 31 killer whales, 159 dolphins and 135 sea lions, among other species1

• Our marine animal populations are characterized by their substantial genetic diversity

• One of the world’s largest penguin collections

Inspiring Guests to Care for the Natural World through Up-Close Animal Experiences


Care for Our Community and the Natural World

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• More than 1,500 employees dedicated to the welfare, enrichment, husbandry and veterinary care of our animals1

• Our animal experts have helped animals in need – ill, injured, orphaned or abandoned – for more than four decades

– We have assisted more than 23,000 animals, with the goal of rehabilitating and returning these animals to the wild1

– In 2013, we rescued nearly 1,500 animals, and returned more than 600 animals to their natural habitats1

• We contribute to wildlife research, habitat protection, animal rescue and conservation education through the SeaWorld & Busch Gardens Conservation Fund and other environmental organizations

A Global Leader in Animal Husbandry, Veterinary Care, Enrichment and Animal Behavior



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New Parks and Attractions Opened in 2013

Well-Maintained Parks

Busch Gardens Williamsburg

• Antarctica: Empire of the Penguin at SeaWorld Orlando

• Aquatica San Diego • Food & Wine Festival at Busch Gardens

Williamsburg • Madagascar LIVE! Operation: Vacation

at Busch Gardens Tampa & SeaWorld San Diego

• Pets Ahoy at SeaWorld San Antonio

• Over 600 rides and attractions that appeal to guests of all ages1

• Busch Gardens Williamsburg named the most beautiful theme park in the world for 23 consecutive years2

• 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 year3

Antarctica: Empire of the Penguin Aquatica San Diego

1 As of December 31, 2013. 2 Source: National Amusement Park Historical Association, 2013. 3 TripAdvisor Traveler’s Choice Awards, 2014.

New Attractions Opening in 9 of Our 11 Parks in 2014

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Ihu’s Breakaway Falls Aquatica Orlando

Explorer’s Reef SeaWorld San Diego

Falcon’s Fury & Pantopia Busch Gardens Tampa

Roa’s Aviary Aquatica San Antonio

Colossal Curl Water Country USA

Taumata Racer Aquatica San Diego

50th Anniversary Celebration SeaWorld Parks

London Rocks show Busch Gardens Williamsburg

Cookie’s Monster Land Sesame Place

Blue World Project

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• In August 2014, the Company announced new, first-of-its-kind killer whale environments are to open at all three SeaWorld parks – The first realm will open at SeaWorld San Diego in 2018 – Nearly doubles the volume of water in existing facilities, with a

maximum depth of 50 feet and surface area of nearly 1.5 acres – Transforms how guests experience killer whales through up-

close and personal encounters

• The Company also announced it is committing $10 million in matching funds for killer whale research and $1.5 million for a new partnership on ocean health


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Diversified Revenue Base1

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FL

CA

VA

Other

2013 Revenue by State

2013 Attendance by Guest Origin

• Our parks are near large metro areas, with over 60 million people located within 150 miles

Domestic

International

• Our diversified guest base is comprised of local visitors, non-local domestic visitors and international tourists

• Our parks operate more than 100 culinary outlets and over 200 specialty retail shops

• Our parks have broad demographic appeal with an average party size of 3.8 people

Family Adult Only

2013 Revenue by Line of Business

2013 Attendance by Family Demographic


Admissions

All Other


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Adj. EBITDA Growth Opportunities

• High flow-through margin revenue

• Fixed cost as revenue grows, semi-variable as volume decreases

• Park clustering to leverage efficiencies

• Continued cost and labor management

– In August 2014 announced the Company is undergoing a detailed review of its cost structure, with the intent to drive cash cost savings in 2014 and 2015

• Management of operating calendars and operating hours

• Addition of higher margin businesses

• Strategic sourcing / cooperative buying

($ in millions)

1 2014 LTM results represent latest twelve months through June 30, 2014. 2 Revenue includes add-back of $17M for deferred revenue write-downs in 2010.

Adj. EBITDA Margin 28.3%2 28.7% 29.2% 30.1% 28.9%

$343 $382

$415 $439 $412

2010 2011 2012 2013 2014 LTM1


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($ in millions)

Strong Free Cash Flow Generation with Substantial Visible Growth in the Future

$412

$325

$153

$172

$83

Cash Taxes

Working Capital and

Other2

Deleveraging over time and

refinancing opportunities

Revenue growth and

margin expansion

~$660M in Federal

NOLs

Minimal working capital needs

Capital Expenditures

Disciplined and flexible

capital spending

Cash flow available for discretionary investment

LTM Adjusted EBITDA1

Interest Expense

Adjusted Cash Flow

from Operations 2014 LTM

Free Cash Flow1

1 2014 LTM results represent latest twelve months through June 30, 2014. 2 Excludes other non-cash items.


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Increasing Admissions Revenue and In-Park Spending1

1 In-Park Spending represents total food, merchandise and other revenue.

Admissions Revenue • Drive up-sells and add-ons

through web and mobile commerce sites – In-app purchasing and mobile

ticketing • Expand application of dynamic

pricing model • Strategic discounting • Tailor specific product offerings

for tourist and local markets • Optimize pricing and benefits for

tiered pass products

In-Park Spending

• Newly expanded product offerings – Quick Queue – All-Day Dining – Cashless wristband – Special events and concerts

• Create premium in-park experiences

• Increase spending inside the park – Improve penetration rates and

revenue per transaction • Newly enhanced mobile app which

allows in-park purchases on mobile devices

Expansion Opportunities

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• JVs and partnerships leverage the Company’s brands and expertise while generating royalties and management fees – Memorandum of Understanding in May 2014 to build a

multi-park development in the Middle East – Letter of Intent in August 2014 with Village Roadshow

Theme Parks to co-develop parks in Pan-Asia, India and Russia

• 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 acquisition and expansion opportunities, particularly for smaller park formats

• Ability to rebrand acquired parks with Company brands

Partner to Build Parks

New Businesses

Self-Funded New Parks

(2000: Discovery Cove)

• Extend Company branded entertainment outside of parks • Possible opportunities may include lodging, cruise and

entertainment districts

Opportunities

Opportunistic Acquisitions

(2012: Aquatica San Diego)

Owned Content & IP

• Sold in and out of parks • Allows guests to take

park experience home • High margin licensing

opportunities

• Enhances and extends in-park experiences and can generate revenue

• Parks provide platform to create and showcase IP

• Builds awareness of the Company’s brands and parks

• Creates new IP & content • Room for future growth

Brand Extensions Provide Additional Awareness

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• 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 just completed its third season – Top-rated Saturday morning show in most major U.S.

markets – Total viewership has surpassed 160 million

• The Wildlife Docs™ gives a behind the scenes look at Busch Gardens Tampa’s elite zoological team as they care for more than 12,000 animals – 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

– More than 57 million viewers have tuned in since its debut in October 2013

1 Viewership data from April 7, 2012 through July 20, 2014.

More than 218 Million Viewers have Watched our Two Television Series1


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Experienced and Focused Management Team

Experienced and Focused Management Team

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Name Jim Atchison

Jim Heaney

Dan Brown

Donnie Mills

Scott Helmstedter

Dave Hammer

Brad Andrews

Tony Taylor

Marc Swanson

Industry Experience 26 24 39 39 28 34 42 14 13

Title

Chief Executive Officer & President

Chief Financial Officer

Chief Operating

Officer, SeaWorld & Discovery

Cove

Chief Operating

Officer, Busch

Gardens & Sesame

Place

Chief Creative Officer

Chief Human

Resources Officer

Chief Zoological

Officer

Chief Legal & Corporate

Affairs Officer, General

Counsel & Corporate Secretary

Chief Accounting

Officer

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Financial Summary

Financial Performance

28 1 2014 LTM results represent latest twelve months through June 30, 2014. 2 Calculated as total revenue divided by attendance. 3 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 Q2 2013.

(In millions except per capita data)

2010 2011 2012 2013 2010 – 2013 CAGR 2014 LTM1

Attendance 22.4 23.6 24.4 23.4 1.5% 23.0

Total Revenue per Capita2 $53.32 $56.31 $58.37 $62.43 5.4% $62.19

Revenue $1,196 $1,331 $1,424 $1,460 6.9% $1,428

Adjusted EBITDA $343 $382 $415 $439 8.6% $412

Adjusted Free Cash Flow $82 $43 $112 $1703 27.5% $153

Disciplined Capital Spending

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• In August 2014, the Company announced a capital re-investment program that will bring new attractions to its destination parks

• The 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

Pursue Disciplined Investment and Expansion Opportunities

Capex as a Percent of Revenue

10.0% 16.9%

13.5% 11.4% 12.1% ~10%

~3%

2010 2011 2012 2013 Expected capitalspending

Announced re-investment at destination parks and

Blue World Project

1 2014 LTM results represent latest twelve months through June 30, 2014.

2014 LTM1

Base

Incremental

Efficient Capital Structure

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• March 2014 swaps: increased interest rate swap position on term loan to $1B – Effectively converts over 70% of variable rate debt to fixed rate through September 2016

• Ability to call Senior Notes in December 2014 at a reduced premium

Key Highlights

1 Excludes unamortized debt discount. 2 Represents June 30, 2014 net debt divided by 2014 LTM Adjusted EBITDA.

(In $ millions)

Tranche (as of 6/30/2014) Amount Coupon (bps) Maturity x EBITDA

Total cash & equivalents $63

$192.5M revolver L+225 4/24/2018

Term Loan B2 $1,391 L+225 / 0.75% 5/14/2020

Total secured debt $1,391

Senior Notes $260 11.00% 12/1/2016

Total debt1 $1,651

Net debt1 $1,588 3.86x2

Returning Value to Shareholders

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• Since becoming a public company in April 2013, we have returned over $180 million in value to our shareholders

• In August 2014 our Board of Directors authorized a share repurchase program of up to $250 million, effective January 1, 2015

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Total

Dividends Declared

$0.20 $0.20 $0.20 $0.20 $0.21 3.0% Yield1

$18.1 $18.1 $17.8 $17.8 $18.3 $90.1

Share Buybacks

-- -- 1.5M -- 1.75M 3.25M

-- -- $43.3 -- $50.5 $93.8

(In millions except per share amounts)

Over $183 Million in Value Returned to Shareholders

$183.9

per share

value

total shares

value

1 Calculated as current annualized dividend payout divided by stock price per share at close of business on August 11, 2014.

Investment Summary

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Appendix

as of June 30, 2014

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2010 2011 2012 2013 2014 LTM1

Net (loss) income ($45) $19 $77 $50 $95 (Benefit from) provision for income taxes (29) 13 39 25 50

Loss on early extinguishment of debt -- -- -- 32 --

Interest expense 134 110 111 94 83

Depreciation & amortization 207 214 167 166 169

Secondary offering costs -- -- -- 1 2

Termination of advisory agreement fee -- -- -- 50 --

Advisory fee 5 6 6 3 --

Equity based compensation expense -- 1 2 6 5

Debt refinancing costs -- -- 1 1 --

Other adjusting items -- -- 1 1 2

Other non-cash expenses 9 12 10 10 6

Carve-out costs 45 6 -- -- --

Deferred revenue write-down 17 -- -- -- --

Adjusted EBITDA2 $343 $382 $415 $439 $412 1 2014 LTM results represent latest twelve months through June 30, 2014. 2 Column may not foot due to rounding.

(In $ millions)

Reconciliation of Adjusted EBITDA to Net (Loss) Income

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2010 2011 2012 2013 2014 LTM1

Net cash provided by operating activities $202 $268 $304 $290 $325 Capital expenditures 120 225 192 166 172

Free Cash Flow 82 43 112 124 153

Advisory termination fee cash payment -- -- -- 46 --

Adjusted Free Cash Flow $82 $43 $112 $170 $153

(In $ millions)

1 2014 LTM results represent latest twelve months through June 30, 2014.

Reconciliation of Adjusted Free Cash Flow to Cash Flow from Operating Activities

Q2 2014 Investor Presentation

as of June 30, 2014

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