Good morning ladies and gentlemen and thank you for standing by. Welcome to SeaWorld Entertainment’s third quarter 2014 financial results conference call. My name is Manny and I will be your conference operator today. At this time, all participants are in a listen-only mode. After conducting their prepared remarks, the management from SeaWorld will conduct a question and answer session and conference participants will be given instructions at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Mr. Gene Ballesteros, Senior Director of Investor Relations and Corporate Treasurer. Please go ahead, sir.

Thank you. Good morning and welcome to our third quarter 2014 earnings conference call. Today’s call is being recorded and webcast live. Our third quarter earnings release was issued this morning and is available on the Investor Relations portion of our website at SeaWorldEntertainment.com. Replay information for this call can be found in the press release and will be available on our website following the call. Joining me this morning are Jim Atchison, our Chief Executive Officer and President, and Jim Heaney, our Chief Financial Officer. They will discuss important factors impacting the business and review our financial results. Before we begin, I’d like to remind everyone that our comments today may contain forward-looking statements within the meaning of federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different. We undertake no obligation to update these statements. In addition, on the call we may reference certain non-GAAP financial measures. More information regarding our forward-looking statements and reconciliations of non-GAAP financial measures to the most comparable GAAP measures are included in the earnings release and can be also found in our filings with the SEC. Now I would like to introduce Jim Atchison. Jim?

Thank you Gene. Good morning and thank you to everyone for joining us today. During our call, I will first provide comments on strategic developments impacting the business and then Jim Heaney will provide details surrounding our third quarter performance and provide an update on our 2014 guidance. Clearly 2014 has failed to meet our expectations. Consistent with the update we provided in August, the attendance trends the company experienced in the latter part of the second quarter continued into the third quarter. The market’s reaction following our last earnings call and the stock’s underperformance over the last few months is not something we take lightly. I want to reassure the investment community and all of our stakeholders that we firmly believe that our brands remain strong and are resilient to the challenges we are facing. Over these last few months, our senior management team has worked diligently to identify the recent issues affecting our company as well as to define opportunities, initiatives and actions that will move us forward. As we work to improve our results, it is clear that a more aggressive and scalable cost structure must be part of that equation. As we discussed last quarter, we engaged external advisors to help us evaluate our existing addressable cost base. Based on the work to date, we plan to deliver $50 million of annual cost savings by the end of 2015. A portion of these savings will be recognized on a pro forma basis in 2014 with the remainder being realized in 2015 as we implement all aspects of our plan. Among other expense reductions, our cost initiatives focus on the centralization of certain administrative and support functions and the further optimization of our park operations. This plan is being developed with a keen focus on the guest…

Thanks Jim. Good morning everyone. For the third quarter of 2014, the company generated revenue of $495.8 million, a decrease of 8% over the third quarter of 2013. The decrease in revenue was driven by a 5.2% decline in attendance and a 2.9% decrease in total revenue per capita from $60.74 in the third quarter of 2013 to $58.99 in the third quarter of 2014. The decrease in total revenue per capita was primarily the result of an unfavorable change in the park attendance mixture in the quarter and an increase in promotional offerings. Attendance for the quarter declined versus 2013 and the attendance trends we experienced at our destination parks in the latter part of the second quarter continued into the third quarter. We believe the decline resulted from a combination of factors, including negative media attention in California along with the challenging competitive environment, particularly in Florida. Part of the challenges in Florida relate to significant new attractions at competitor destination parks and a delay in the scheduled opening of Falcon’s Fury at our Busch Gardens Tampa park. In addition, the prior year also includes the benefit from the opening of Antarctica, which helped drive record revenue in the third quarter of last year. I am pleased to say that Falcon’s Fury opened over the Labor Day weekend and has been a home run new attraction for the park with a 93% excellent guest rating. The cost of food, merchandise and other revenues decreased by 5% from $40.4 million in 2013 to $38.2 million in 2014. As a percent of total revenue, these costs increased slightly from 7.5% in 2013 to 7.7% in 2014. Operating expenses in the quarter decreased by 1% from $202.6 million in 2013 to $200.9 million in 2014. This decrease in operating expenses was…

[Operator instructions] Our first question is from Tim Conder of Wells Fargo. Please go ahead. Q – Tim Conder – Wells Fargo: Thank you. Gentlemen, if you could give a little bit more color – and I apologize if I missed part of this – on the trajectory of attendance trends, and in particular southern California and Orlando throughout the quarter and then here into the fourth quarter. Then Jim, just a clarification on your statement there, will cost on a net basis, you’re saying to be down slightly, resulting in EBITDA to be up slightly at this point for 2015. A – James Heaney: Good morning, Tim. I’ll take the second question first. Our guidance on expenses for 2015, as Jim mentioned, there’s a $50 million total cost reduction. Based on our EBITDA definition, we’re able to take $10 million of that early in 2014 with the remainder impacting 2015. Net of our anticipated cost increases outside of the cost reductions merits, we’re also looking increasing our marketing spend. On a net basis, we expect 2015 expenses to be flat to down slightly versus 2014. A – Jim Atchison: Good morning, Tim. This is Jim Atchison. I’ll take your first question. With respect to the attendance trends in those two parks, we’re seeing a continuation of what we had reported and signaled in Q2, so we’re not surprised by that. Not that we’re happy with it or accepting of it, but we’re seeing similar trends through those two parks as has been reported previously in our Q2 numbers. Q – Tim Conder – Wells Fargo: I think on the Q2 call, you mentioned that those attendance trends were still down in the early part of the third quarter but had apparently tried to stabilize. Can you just give us,…

Thank you. The next question is from Alexia Quadrini of JP Morgan. Please go ahead. Q – Alexia Quadrini – JP Morgan : Hi, thank you. Two questions. The first one, just on your full-year guide, which you’ve maintained despite a bit of a shortfall in adjusted EBITDA this quarter. The benefit in Q4 EBITDA, is it largely the $10 million in the cost savings it implied, or is there some other more positive trends underlying our Q4 to Q4 expectations? A – James Heaney: Well as you mentioned, the $10 million benefit for adjusted EBITDA will impact the fourth quarter, and it’s around $10 million. Our reaffirming guidance is based on the trends to date through the fourth quarter. We have October behind us and a portion of November behind us, so it’s really a factor of what we see in the business so far in the quarter and then the $10 million benefit of the cost reductions. Q – Alexia Quadrini – JP Morgan: And then sort of a bigger picture question, when you’re looking at the competitive environment, my understanding is Disney has a fair amount of new attractions sort of popping up the next few years. But I guess more specifically Universal, where you have experience with the initial launch of Harry Potter two years ago and now you have this addition, do you have any sense of, I guess, how long the initial challenge to you guys lasts? Should we be through the worst of it now that it’s opened, or will it—I guess any color on how long you think that more intense competitive environment from the Universal side will go on for. A – Jim Atchison: Sure. This is Jim Atchison. I’ll answer that. I think the overall investments in this market over…

Thank you. The next question is from Felicia Hendrix of Barclays. Please go ahead. Q – Felicia Hendrix – Barclays: Hi, good morning. Jim Heaney, I was wondering if you could just give us some color. You talked a lot about why expenses are going up, and you talked about marketing programs. I was just wondering if you could help us understand what those marketing programs are and how those are—you know, strategically how you’re thinking about those to offset some of the competitive pressures you’re seeing. A – James Heaney: Sure. Yeah, to give you a little bit more color of the add-backs in 2015, there’s really three large categories. One is labor cost – we have impacts around minimum wage legislation in California. We do annual increases with our hourly labor in the parks, the Affordable Care Act costs are impacting us slightly. We’ve largely managed against that, but there are some cost pressures from that. The incremental marketing spend, I’ll ask Jim to talk about the strategy behind it, but from an order of magnitude standpoint it’s about $10 million that we’re adding or increasing our marketing spend by. Lastly, if you look at our non-labor costs, our other expenses, we have a long track record of being able to hold those down to around 1% year-over-year, an inflationary cost increase impact, and that’s baked into that number as well. So it’s really those three categories. A – Jim Atchison: To add more color on the marketing spend, what we’re doing is we’re effectively redeploying some of our cost savings into increased marketing. That will be most prominently featured in probably more advertising, some television, some digital, and some other efforts most squarely targeted at our destination markets more so than our regional portfolio. Q – Felicia…

Thank you. The next question is from Tim Nollen of Macquarie. Please go ahead. Q – Tim Nollen- Macquarie: Hi, thanks. My question actually follows directly on the last, which was about the cost savings and the investment profile. So $50 million, I think was perhaps a slightly higher number than we expected, but it sounds like you’re going to be channeling really all of that into increased marketing really in Q4 and going into next year. I thought the cost savings was going to be directed into the capex investment, although that sounds like that is really more starting in 2016. So if I could just check my logic and make sure I still understand it, the opex will be transferred into capex, only that next year your cost savings are going to be used more for marketing purposes. And then if you could also explain please where the cost savings are coming from? I understand it’s kind of central office costs, but if there’s anything more you could explain on that. Thanks. A – James Heaney: Sure. When we were initiating this effort, the cost reduction effort, a big part of our motivation was to offset a significant portion of the incremental capex, or all of it for that matter, and that at $50 million we get there. When you look at the year-over-year rollover of how those cost reductions will impact our P&L, there are ongoing cost increases that offset a portion of that, so if you think about the $50 million, we’ll get $10 million of it in ’14 and then another $40 million in 2015, so cumulatively we’ll be up to $50 million. Our cost base is around a billion dollars, so we have directionally 3 to 4% of increases from labor costs, the incremental…

Thank you. The next question is from Afua Ahwoi of Goldman Sachs. Please go ahead. Q – Afua Ahwoi – Goldman Sachs: Thank you. Just two for me. First on the—I know in the past, you’ve said, I think, your capex would be 70% return projects and then maybe 30% other. As the number has not moved much higher, is that still a fair split to think about whether expenses are going towards return projects so 70/30? And then the other one was on the international expansion. I guess the 2020 timeline is a little further than we all thought was possible. Can you maybe talk about some of the steps between now and the next six years that makes this opening a little later, especially versus some of what your peers are announcing? Thanks. A – Jim Atchison: Sure. I’ll talk a little bit about the international expansion and I’ll let Jim comment on our capex mix of ROI projects versus infrastructure projects. So with respect to the international development and the timing we’ve signalled around 2020, that is a project we’re very excited about. We’re working with a terrific partner and we have a terrific development in mind, and as we said, that’s kind of the first piece of it would have that targeted opening date. That date aligns with a number of things, not the least of which is our partners’ development ambitions and schedules and other things that are kind of in play in that particular market. So I think when we get this MOU—when we get this project fully completed and prepared to announce, I think it will probably make a lot more sense, Afua. But that timing has a number of components to it, not just the deal but also what else is happening in that region. A – James Heaney: Afua, on the capex, the incremental spending is largely on attractions, but if you do the math on it, that would shift our mix from 70/30 to 80/20. Again, all the incremental spend is on new attractions, Blue World and also adding some attractions at our destination parks. Q – Afua Ahwoi – Goldman Sachs: Okay, thank you.

Thank you. The next question is from Joel Simkins of Credit Suisse. Please go ahead. Q – Joel Simkins – Credit Suisse: Hey, good morning. A lot of my questions have been answered. As you think about the capex going into San Diego around Blue World, how much room is there for disruption as that project gets ramped up, and are you designing ways to minimize that on the rest of the park? A – Jim Atchison: Maybe you could clarify a bit what do you mean, from the construction impact in the park? Q – Joel Simkins – Credit Suisse: Exactly. A – Jim Atchison: Yeah. That’s something we’ve given a lot of thought to, and we’re used to building attractions and major attractions, even, in our parks. We have three of our parks, big format parks run year-round, so we’re used to dealing with that. This particular development and the location that we’ve conceived for it, we think we have a pretty good plan to minimize the impact thereof, so I don’t think it’s going to be a major impact from a guest experience or just from the logistics of the layout of the park. We have a very good plan in place for how to mitigate that. Q – Joel Simkins – Credit Suisse: Just a follow-up, on the dividend, obviously you guys might be delaying that until the first quarter. I think when you came public, SeaWorld was not designed to be a yield story per se, so given that you’ve got a lot of capital commitments coming up over the next couple years, you’ve got to sort of re-think the business a bit, how should we be thinking about your absolute payout levels going forward, or at least in the near to intermediate term? A…

Thank you. As a reminder ladies and gentlemen, it is star, one if you’d like to ask a question. The next question is from Barton Crockett of FBR Capital Markets. Please go ahead. Q – Barton Crockett – FBR Capital Markets: Okay, great. Thanks for taking the question. On the competitive environment in Orlando, you didn’t really have any new attractions this year at SeaWorld. Are you planning to really step up the pace of new attractions next year, so that might be a favorable comp? Also on the topic of comps, how would you have described the weather impact this year, particularly in the Orlando market which I think might have been a bit rainy? A – Jim Atchison: Sure. Barton, I’ll comment on the attraction schedule first. We really have a number of levers to drive volume at our parks. It’s not just the attractions that we’re launching but it also has to do with pricing, it also has to do with our advertising spend and marketing spend overall. So to focus on that for just a moment, as we signalled, we’re going to step up our investment in marketing by $10 million of new investment, and that will be targeted at our destination markets, which obviously would include our Orlando park. So we feel that that’s a meaningful investment and we expect to have the desired outcome of attractive returns on that investment relative to helping to position the park in this very competitive environment. With respect to new attractions, we have—the line up that we share around our parks, we also have smaller attractions that will be quite meaningful to the local nearby markets, our pass holder bases, things like that that will also be part of our attraction lineups throughout our parks. But for major…

Thank you. The next question is from Robert Fishman of MoffettNathanson. Please go ahead. Q – Robert Fishman – MoffettNathanson: Hi, good morning. Can you share with us anything you’ve learned about your brand specifically in San Diego and Orlando since the summer, and have you seen any general sentiment improvement with any of your new social media campaigns or from the announcement of expanding the orca tanks? A – Jim Atchison: Yeah, I’ll provide some general commentary on that, but that will probably be as much as we’re able to provide at this point. We have conducted a considerable amount of research around our brand and perceptions thereof, both from the SeaWorld brand broadly and our California park more specifically to your question. We’re kind of modifying our advertising campaigns, our messaging and kind of how we position the park to reflect the inputs that we’ve learned through that process. What we’ve learned and seen is that we have beloved brands that are 50 years old and have great experience and a great positioning in kind of the American vacation and theme park landscape. The attacks that we’ve had on our brand, although we disagree with the nature and premise of them and unfounded nature of them from the animal rights community, we don’t see as kind of lingering and lasting. We were pleased that some of our guests reflected that same sentiment. So we’re pleased with the research we gained. We have tweaked our messaging and advertising plans accordingly, and we’ll continue to work through that. With respect to the social media efforts, we were very pleased with the performance of those campaigns, those efforts to better tell our story and build our brand, if you will, so we’ll have more of that to come. We’ll have more efforts along those lines and in other ways that are designed to continue to work on a brand rebuilding campaign that we feel is well underway. Q – Robert Fishman – MoffettNathanson: Okay, thank you. Can you discuss the possibility of starting to recognize any international licensing fees ahead of these parks opening? A – Jim Atchison: Well, we can’t just yet. That’s still an important piece of our ongoing negotiations to finalize these deals, but hopefully we’ll be able to circle back on that soon. Q – Robert Fishman – MoffettNathanson: Okay, thank you.

Thank you. The next question is from James Hardiman of Longbow Research. Please go ahead. Q – James Hardiman – Longbow Research: Good morning. Thanks for taking my call. Most of my questions have been answered, but I did have a couple. So you maintained your full-year guidance; that said, third quarter was beneath at least the Street expectations. Can you sort of talk about how trends have gone versus your own internal assumptions over the past three or four months? Has this basically progressed as you thought it would and it’s us that sort of got the timing wrong, or have things been a little bit worse and you were able to get maybe some incremental cost out of the business versus how you thought about it? And then I apologize if you’ve spoken to this, but can you just speak specifically to the post-3Q trends that you’ve seen in October and early here in November? Are things still trending sort of similar to where they were late 3Q, or have we seen any improvement? A – Jim Atchison: Yes James, this is Jim Atchison. I’ll talk about the attendance trends and maybe Jim can address your first question. So if you look at kind of Q4 for us, the biggest portion of the month is—the biggest portion of the quarter is December. We have robust Christmas programs in all of our parks, and that tends to drive that month. The other piece really relates to our Halloween season, again where we have kind of strong programs throughout our parks. So in terms of our Q4 trending, it’s consistent with the guidance we’ve provided, obviously, because that’s the only quarter left in our year, so we feel that it’s kind of built into that. But what I’ll say is…

Thank you. We have no further questions in the queue at this time. I would like to turn the floor back over to management for any closing remarks. [end of Q&A]:

Great, thank you. Well, thanks everyone for your questions and your continued interest in our company. Before I close the call, in honor of Veterans Day yesterday, on behalf of our entire team I’d like to pay tribute to all the veterans working here at SeaWorld Entertainment and to any veterans who joined us on our call today. I also wanted to express my gratitude to all of our team members for their ongoing dedication and commitment to our mission and values during this busy summer season. Rest assured that I and the entire SeaWorld team are focused on overcoming the challenges facing our company. We are resolute in our belief that our brands, parks, attractions and mission remain compelling and that we will emerge from this period stronger than ever. That concludes our call, and thank you again for your time.

Thank you. Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time and thank you for your participation.