Title

Presentation

United Parks & Resorts Inc. misses on earnings expectations. Reported EPS is $-0.29 EPS, expectations were $-0.23.

Operator: Good day, and welcome to the United Parks & Resorts First Quarter 2025 Earnings Conference Call. All participants will be in the listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Matthew Stroud from Investor Relations. Please go ahead.

Matthew Stroud: Thank you, and good morning, everyone. Welcome to United Parks & Resorts first quarter earnings conference call. Today’s call is being webcast and recorded. A press release was issued this morning and is available on our Investor Relations website at www.unitedparksinvestors.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 Marc Swanson, Chief Executive Officer; and James Mikolaichik, Chief Financial Officer and Treasurer. This morning, we will review our first quarter financial results, and then we will open the call to your questions. Before we begin, I’d like to remind everyone that our comments today will contain forward-looking statements within the meaning of the federal securities laws.

These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the Risk Factors section of our annual report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our website. We undertake no obligation to update any forward-looking statements. In addition, on the call, we may reference non-GAAP financial measures and other financial metrics, such as adjusted EBITDA and free cash flow. More information regarding our forward-looking statements and reconciliations of non-GAAP measures to the most comparable GAAP measure is included in our earnings release available on our website and can also be found in our filings with the SEC.

Now I’d like to turn the call over to our Chief Executive Officer, Marc Swanson. Marc?

Marc Swanson: Thank you, Matthew. Good morning, everyone, and thank you for joining us. We are pleased to report another quarter of strong financial results. Results in the first quarter were negatively impacted by the timing of Easter and spring break holidays moving into the second quarter this year compared to being in the first quarter last year. The shift of Easter and spring break from the first quarter to the second quarter also impacted admissions per capita and in-park per capita as peak operating days that usually come with higher relative pricing and guest spending also shifted from the first quarter to the second quarter this year as compared to prior year. Despite the negative calendar shift, impact per capita spending increased 1.1% during the first quarter to a record level and has now grown from 19 of the last 20 quarters.

First quarter results were also impacted by certain timing-related impacts that resulted in over $5 million more of certain expenses being recorded in the first quarter of 2025, compared to the first quarter of 2024. We are also pleased to report that April 2025 attendance was up 8.1%, compared to April of 2024. As we look ahead to the remainder of the year, we are excited about the significant investments we have made across our parks and business, including the incredible lineup of new, one-of-a-kind rides and attractions, popular events, improved in-park venues and other offerings across our parks. We are also encouraged by the 2025 bookings for our Discovery Cove property, our 2025 group bookings and our 2025 international ticket sales, all of which are running ahead of 2024.

With approximately 75% of our historical attendance and revenue opportunity still ahead of us as of April 30, 2025, we continue to expect new records in revenue and adjusted EBITDA in 2025. We strongly believe we have a clear opportunity to drive substantially more attendance and total per capita spending and have high confidence in our ability to continue to deliver operational and financial improvements that we expect will lead to meaningful increases in shareholder value. Finally, I want to thank our ambassadors for their ongoing efforts as we prepare for what we anticipate will be another busy summer season. For 2025, we have an exciting lineup of new rides, attractions, events and new and improved in-park venues and offerings with something new and exciting across our parks.

Our new rides and attractions include the following: SeaWorld San Diego debuted Jewels of the Sea in March, an immersive new aquarium experience featuring multiple galleries, including one of the largest jelly cylinders in the country and an engaging multimedia component. The park also announced the reinvention of Journey to Atlanta, San Diego’s first coaster, which will honor the beloved original while introducing new storytelling and thrill elements. SeaWorld San Antonio launched Rescue Jr. in March and all new kid-friendly realm celebrating Animal rescue. The area features themed rides, interactive play zones, and a water play area designed for young adventurers. Sesame Place Philadelphia kicked off its 45th birthday celebration in April, offering guests birthday-themed fun, all spring and summer.

Fan favorite entertainment has been refreshed with celebratory twist, including the return of the popular Sesame Street Birthday Parade. SeaWorld Orlando opened Expedition Odyssey on May 9, a groundbreaking family-friendly attraction that blends somatic storytelling with ride technology to transport guests on an untargetable journey from the top of the world to the ocean’s depth. The remaining new attractions include the following: Bush Gardens Williamsburg will open The Big Bad Wolf: The Wolf’s Revenge, the longest family inverted coaster in North America will take riders through over 2,500 feet a track at speeds up to 40 miles per hour. Water Country USA will open High Tide Harbor, an all-new multilevel water play structure designed for families to explore together.

This exciting area features over 100 interactive water elements including cannons, sprayers and tipping fountains, ensuring endless fun for kids of all ages. With vibrant and dynamic water activities, High Tide Harbor, promises to be the ultimate family-friendly destination for staying cool. Busch Gardens Tampa Bay will open Wild Oasis in all new realm featuring the sites and sounds of the rain forest, a newly reimagined drop tower featuring digital and sound effects, an interactive water play Wonderland, a multilevel climbing canopy and an all-new multi-species animal habitat for up-close encounters. Now let me give a brief update on just some of our strategic initiatives. First, on hotels, our work and discussions continue. We have nothing new to report today, but continue to work through various options and with various potential partners.

We are excited about the prospect of integrating branded hotels into our parks and the expected positive benefits. Second, on real estate as we have discussed, we own over 2,000 acres in valuable real estate and desirable locations, including approximately 400 acres of undeveloped land adjacent to our parks, including significant development land in Orlando. We continue to have discussions with various potential partners as we explore ways to unlock the value of this very valuable real estate. We do not believe that the public markets have or are appropriately giving credit to these attractive and valuable 100% owned real estate assets. Third, on sponsorships, we have been actively working over the past several months on various sponsorship opportunities that leverage our valuable assets and customer database.

As a reminder, we have over 21 million annual visitors across our park portfolio and the average length of stay is over six hours. In recent years, we have not pursued nor had meaningful sponsorship partnerships. Clearly, we have been missing this opportunity. Starting late last year, we formalized a partnership with a third-party group and dedicated internal resources to pursuing this opportunity. Since then, we have had meaningful discussions with several potential sponsors and expect to have exciting announcements in the coming months. The reception from potential sponsors has been good, given our annual visitation, the demographic we attract and related opportunities to target these guests through our CRM database and other methods. We expect these opportunities will exceed $20 million over time in high margin revenue, of which we expect to realize mid- to high single digits in 2025.

Fourth, on international, we continue discussions with multiple partners on this front in various geographies and look forward to sharing more with you in the near future. Fifth, on IP partnerships, we continue our active discussions with various partners to bring their globally recognized IP to our parks, via new rides, attractions and/or other exciting activations. Finally, on our other initiatives, including park enhancements, technology investments, CRM and mobile app, among other things, all are moving forward, and we expect will help drive growth and financial improvements over the coming quarters and years. Very excited about the significant investments we are making and the many initiatives we have underway across our business, that we expect will improve the guest experience, allow us to generate more revenue and make us a more efficient and more profitable enterprise.

We are building an even stronger and more resilient business that we are confident and expect will deliver improved operational and financial results and meaningful increases in shareholder value. Let me briefly comment on our balance sheet, which continues to be strong. On March 31, 2025, net total leverage ratio is 3.1 times, and we had approximately $764 million of total available liquidity, including approximately $76 million of cash on the balance sheet in advance of us starting our summer season where we generate a majority of our cash flow. The strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders. During the first quarter, we repurchased 100,000 shares for an aggregate total of approximately $4.6 million.

We know buybacks are on the mind of many of our investors, and while we don’t have anything specific to announce today, I can tell you that our Board strongly believes our shares are materially undervalued and that purchasing our shares at or near current levels is an extraordinary opportunity. I can also tell you that the Board is working through various governance and other considerations and should have something to announce in the coming weeks. I would add from the Management team, we have significant confidence in our business and our prospects. And along with the Board, believe strongly that our shares are materially undervalued. Finally, while we recognize there has been economic uncertainty in recent weeks, and while this may or may not continue going forward, I want to remind you all that we have a proven and time-tested resilient business model, and offer a great value proposition to our guests.

As a reminder, approximately 90% of our guests come from the United States, and the majority are within driving distance to our parks. Based on the seasonal nature of our business, we have approximately 75% of our attendance and revenue opportunities still ahead of us as of April 30, 2025, which along with the coming opening of more of a ride attraction and about lineup and all the initiatives that we have underway give us continued confidence in our ability to achieve new records in revenue and adjusted EBITDA for 2025. With that, Jim will now discuss our financial results in more detail. Jim?

James Mikolaichik: Thank you, Marc, and good morning, everyone. During the first quarter, we generated total revenue of $286.9 million, a decrease of $10.5 million or 3.5% when compared to the first quarter of 2024. The decrease in total revenue was primarily a result of decreases in admissions per capita and attendance, partially offset by an increase in in-park capital spending. Attendance was negatively impacted by an unfavorable calendar shift with the later timing of Easter and spring break holidays when compared to the prior year. Attendance for the first quarter of 2025 decreased by approximately 59,000 guests or 1.7% when compared to the prior year quarter. The decrease in attendance was primarily due to Easter shifting into the second quarter compared to the prior year.

The Easter shift impact was approximately 140,000 guests, which adjusting for this impact, attendance would have increased by approximately 2%. If we look at the year-to-date attendance through April, we are seeing approximately 1.3% growth on a fiscal basis and greater than that on a day-for-day basis, indicating a healthy start to the year. In the first quarter of 2025, total revenue per capita decreased 1.8%, Admission per capita decreased 4.2% and in part per capita spending increased 1.1%. Admission per capita decreased primarily due to the impact of the admissions product mix and lower realized pricing on certain emissions products due in part to the shift of peak visitation days from the first quarter to the second quarter. In-park per capita spending increased primarily due to the impact of increased volume for certain in-park offerings when compared to the first quarter of 2024.

Operating expenses decreased $3.6 million or 2.2% when compared to the first quarter of 2024. The decrease in operating expenses is primarily due to a $4.6 million decrease in certain noncash adjustments when compared to the prior year quarter. Selling, general and administrative expenses decreased $3.7 million or 7.8% compared to the first quarter of 2024. The decrease in selling, general and administrative expenses primarily due to a $3 million decrease in third-party consulting costs, including approximately $2.1 million of nonrecurring costs for strategic initiatives when compared to the prior year quarter. We reported a net loss of $16.1 million for the first quarter, compared to a net loss of $11.2 million in the first quarter of 2024.

And we generated adjusted EBITDA of $67.4 million, a decrease of $11.7 million when compared to the first quarter of 2024. Adjusted EBITDA declined due to a decrease in revenues from the calendar shifts previously mentioned, the timing of certain expenses and decreases in add back expenses used to calculate adjusted EBITDA relative to prior year — to the prior year quarter. More specifically, first quarter results were negatively impacted by certain timing-related impacts that resulted in over $5 million of expenses being recorded in the first quarter of 2025 as compared to the first quarter of 2024. These expenses related to approximately $3 million of cost that impacted the first quarter this year that generally impacted future periods in the prior year and approximately $2 million of expense increased this year versus prior year due to credits in prior years that were not repeated this year.

Now turning to our balance sheet. Our March 31, 2025 net total leverage ratio is 3.1 times, and we had approximately $764 million in total available liquidity, including approximately $76 million of cash on the balance sheet. This strong balance sheet gives us flexibility to continue to invest in and grow our business and opportunistically allocate capital with the goal to maximize long-term value for shareholders. During the first quarter, we repurchased 100,000 shares for an aggregate total of approximately $4.6 million. As Marc said, and I will reiterate, we believe our shares are undervalued, and attractively priced at current levels and beyond. Our deferred revenue balance as of the end of March was $195.9 million, Deferred revenue decreased approximately 6.7% when compared to March of 2024.

As a reminder, our deferred revenue balance contains a number of products, including ticketing, vacation packages, annual and season passes and ancillary products. In March 2025, our pass base, including all pass products was down approximately 2% compared to March 2024. Although we are pleased that we are seeing realized price increases on our premium pass products compared to the prior year. We believe we have our best pass benefits program ever, which we expect will drive additional increases in pass sales and a strong pass base for this year, especially now that we are in the peak advertising and selling season. We spent $56.9 million on CapEx in the first quarter of 2025, of which approximately $49.9 million was on core CapEx and approximately $7.1 million on expansion and/or ROI projects.

For 2025, we expect to spend approximately $175 million to $200 million on core CapEx and approximately $50 million of CapEx on growth in ROI projects. Now let me turn the call back over to Marc, who will share some final thoughts. Marc?

Marc Swanson: Yes. Thanks, Jim. Before we open the call to your questions, I have some closing comments. In the first quarter of 2025, we came to the aid of 205 animals in need. Over our history, we have helped over 42,000 animals, including bottlenose dolphins, manatees, sea lion, seals, sea turtles, sharks, birds and more. I’m really proud of the team’s hard work and their continued dedication to these important rescue efforts. We are certainly excited about 2025 with the exciting lineup of new rides, attractions and events, some of which have already opened with the remainder scheduled to open before the summer. I want to thank our ambassadors for their dedication and commitment as we prepare for what we believe will be an exciting and busy summer season.

We continue to believe there are significant additional opportunities to improve our execution, take advantage of clear growth opportunities and continue to drive meaningful long-term growth in both revenue and adjusted EBITDA. We continue to have high confidence in our long-term strategy and our ability to deliver significantly improved operating and financial results, which we expect will lead to meaningfully increase value for stakeholders. Now let’s take your questions.

Operator: We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Steve Wieczynski with Stifel. Please go ahead.

Steve Wieczynski : Hi, guys. Good morning. So Marc, I want to ask about how you guys are thinking about the rest of the year. You obviously mentioned you’re kind of still expecting that record in terms of revenues and EBITDA. But if we think about the first quarter EBITDA loss being probably a little bit more than expected, some of that’s due to cost timing, I understand. But can you help us think about bridging, getting from that first quarter loss to over, let’s call it, $725 million, $730 million in EBITDA or whatever number you want to think about. And look, I understand you noted advanced bookings remain strong, but you’ve got Epic opening in the next couple of days, uncertainty around the consumer. So just wondering maybe give a little bit more color on what gives you guys so much confidence in kind of getting into those records — into that record territory? Thanks.

Marc Swanson : Sure, Steve. I can take that question. I think the first thing I would point to is the performance in April, and that was strong. And you heard Jim mention tenants was up over 8% on a fiscal basis, it was actually up more than that on a day-to-day basis, which on day-to-day kind of lines up like days. So if you look year-to-date at the end of April, on a day-to-day basis, our attendance is up over 3%. That’s kind of how we gauge the attendance. We look at it, line up to like days at the end of April year-to-date, up over 3%. If you kind of carry that 3% forward the rest of the year, if we are able to do that, you can kind of do the resulting math if we were to grow [attendance 3%] (ph) for the full year, you can do the math on what that drives.

So I think that’s certainly one thing I would point to. And this is ahead of the new rides and attractions that are largely and some of our parts still to come, some have opened, obviously, and we’ve seen — I think we’ve been pleased with what we’ve seen. But we still have new things to come, new rides and attractions. We have some other new elements coming in other parts of our parks as well, whether it’s new entertainment, more Aquaflow events, for example, that type of thing. We also — without getting into specifics, I think we — we saw a little bit better performance on the admissions per cap in April than what the quarter showed. And there are some strategies in place to hopefully get that to a better spot, right? So we don’t like being down where we were in Q1.

We know that was influenced, obviously, in part by the timing of Easter and spring break and things like that. But we certainly recognize there is opportunity to do better there, and we have some plans to do that. We still have our peak pass selling season ahead of us or we’re kind of just starting that now as Jim mentioned. And then finally, just really the opportunity that we believe having Epic in town is going to bring more people to Orlando. And we’ve talked about this, and we like the idea of a compelling and good assets coming to the area, which we think is going to drive more people here. So we need to take advantage of that. We view that as an opportunity and something we’ve been working on for some time to do that. Obviously, we have our own strategies.

And if you look at like the ride we just opened here in Orlando, it is Expedition Odyssey. It’s a very cool experience. It has an animal component to it. That is, again, differentiated from what you would see at Universal, and that’s something that we’ll continue to point out to people. We have some other things coming as well. Last, I guess, just a couple of things I hit on. The sponsorship opportunity I talked about in my prepared remarks, we’ve been pleased with the reception we’ve received from people that we’ve been talking to. We think, again, that’s mid- to high single digits here in 2025. And then the cost work that I’m sure Jim will talk about more on some of these questions. But if you look at our cost performance in Q1, especially when you look at the cost we used to calculate adjusted EBITDA, I think we’ve done a good job of managing of those costs, and that’s something that we’ll continue to do.

So a very long way of seen. I think if you kind of put all those numbers together, that gets you to those records. Obviously, 75% of the year to go, so still a long way to go, and we’ll update you in August to see if we’re still on pace to do that. But that’s kind of how we are thinking about it.

Steve Wieczynski : Okay. Marc, that’s really good color. I really appreciate that. And then if we could dig into April, maybe a little bit more. So you talked about the 8% increase in attendance. Obviously, the first quarter had the negative impact from Easter and spring breaks. So just wondering if you kind of break down maybe how much April benefited from that? And also just trying to understand if through April through May, in terms of customer spend once they’re inside their parks, have you guys seen any material change in terms of folks pulling back or spending less? And then I assume you haven’t had to use any kind of discounting tactics to get people into the parks because I think, Marc, you said April, your attendance per caps were actually up. So I just want to make sure I have all that stuff kind of right.

Marc Swanson : Yes. Let me help you a little bit, Steve. So first, just I think what I said on the admissions per caps is that they were better in April. I wasn’t — I wouldn’t imply that they were positive, but they weren’t down what they were in the quarter. But we got to — when we report Q2, we will have a lot more on that because per caps can move around a little bit within the quarter, given some of the timing of certain adjustments related to like deferred revenue and things like that. But really, I think probably the simplest way to explain this maybe is the April performance that we saw on kind of a day-to-day — on a day-to-day basis was, I think, more than what the Easter benefit was, right? So we not only got the Easter benefit, but I think we got more attendance on top of that as well.

And that gives us some optimism that not only did we benefit as we expected from the timing of Easter, but we had some additional attendants on top of that. So hopefully, that helps you there. Okay. Hopefully, I got it all, Steve. If not, we’ll catch up.

Operator: Our next question comes from James Hardiman with Citi Group. Please go ahead.

Sean Wagner: This is Sean Wagner on for James Hardiman. I guess just one really quick follow-up on all of that. I guess what did April revenue, you’ve kind of given us what admissions per caps looked like in April did in park percaps, were they similar to 1Q? Or I guess, how does the year-to-date or April revenue look like compared to last year?

Marc Swanson : Yes. I mean, again, and these are preliminary revenue numbers because kind of as I was pointing out on the prior question, we do tend to look at these things more on a quarterly basis, especially with admissions revenue given some of the shifting that can go on. But I think what I can tell you is on in-park per cap — in-park per cap was positive for April. And maybe part of Steve’s question that I didn’t get to that I should have was have we seen any pullback in the per cap in April. And so in-park per cap was up in April.

Sean Wagner: Okay. And are there any other calendar related comparisons we should be thinking about for the rest of the year? Or operating days expected to be relatively flat this year? Or do you get some back because of adverse weather last year?

James Mikolaichik : I think full year is roughly flat. I think we’ve got a couple of trades still between some of the quarters. But when you look at the full year, it relatively flattens out.

Marc Swanson : Yes. And well — to your point, we’ll pick up, like you said, some weather days later in the year because we had some pretty meaningful closures last year around Hurricane Milton in Q4.

Operator: Our next question comes from Arpine Kocharyan with UBS. Please go ahead.

Arpine Kocharyan: Hi, good morning. Thank you so much for taking my question. Some competitors in the market have talked about a little bit weaker international sales in Q1 and going into Q2. And it sounded like you’re not seeing that — you’re seeing that up year-over-year, which is great. Could you maybe talk a little bit about the dynamic you’re seeing? Did you see any change in behavior kind of as you progress through the quarter, given kind of some of the macro developments. I think you had cited previously international sales growth being up mid-single digits. Today’s release mentions up year-over-year. It doesn’t say mid-single digit. Just an update to that number if you have it? And then on group bookings, you were also, I think, running ahead of last year. I think up double digit, if I’m not mistaken. If you — it seems like you’re still up year-over-year, but just how much if you could update that, that would be great. Thanks.

Marc Swanson : Yes. Let me comment a little bit on international. So the ticket sales international are up, I’d say, low single digits. So — and just keep in mind, while that’s good, don’t get me wrong. We don’t rely as much on international attendance as maybe people think we do. Last year, I think it was right around 6% or 7% of our total attendance. If you go back to pre-COVID, it was about 10% of our total attendance. So as that market perhaps softens like you said, like a lot of people have been saying not ideal, but I don’t think, it has as big of an impact for us given that we generally don’t have international as much of our attendance. And candidly, we weren’t probably optimizing that attendance to begin with and for a variety of reasons.

And I think we’ve made some changes there to hopefully do a better job of servicing and getting more international visitation. So we’ll keep monitoring that going forward. On the group business, we feel good about the group category, and I think there continues to be opportunities with the team working on that to continue to grow that.

Arpine Kocharyan: Great. Great. And just one quick housekeeping, if I may. Just a follow-up on the $5 million of expenses that moved into Q1. Could you just clarify which quarter they moved out of into Q1? I think you said future quarters. Just trying to understand from a modeling perspective how to think about Q2 to Q4? Thank you.

James Mikolaichik: Yes. The largest portion was some annual maintenance that we do. We typically have been doing that in Q4. We chose to move some of that maintenance into Q1, just given that seasonally, January and February are slower periods. So I’d expect some of the maintenance that we typically do towards the end of the year we pulled that forward and got it done at the beginning of the year. And then the rest are really just odds and ends and some marketing shifts and changes, that some marketing that moved from late last year into the beginning of this year, really around our preparation and production that we are doing on the marketing side getting ready for the summer season. So we’re excited about the marketing that we have on some of it on the prepaid side and some expenses that we’ve already incurred ahead of the marketing that we’re doing for the busy season in the summer.

Operator: Our next question comes from Brandt Montour with Barclays. Please go ahead.

Brandt Montour: Good morning everybody. Thank you for talking my question. So just maybe thinking about weather, you guys cited some pretty strong solid April trend. Was that against the normal weather backdrop in April? And then when you look at the rest of the year, outside of the hurricanes, remind us what assumptions you’re making about weather that underpin the commentary about record revenue and EBITDA?

Marc Swanson : Yes. I think for April, — we had slight weather negative. We can call it out because it wasn’t a huge number, but there was a slight negative weather impact, mainly at our park in Lansberg. And then look, for the rest of the year, I think the way to think about it is we had Hurricane Milton last year. We talked a lot about that. We had some other hurricanes as well. Our thought is, hopefully, we don’t have something like Milton again or the others. And certainly not having those, you can do the math — you can do the math on those. So we are expecting kind of more normalized weather, and that’s how we take our projections and we try to look at kind of more normal weather patterns. So that would be our assumption that we’re not going to have quite the things that we had last year. So we’ll have to wait and see. Obviously, a long way to go to hurricane season is just starting here shortly, but we’ll keep you posted.

Brandt Montour: Okay. That’s helpful. And then a follow-up would be about Epic. I know you guys are probably monitoring closely what they’re doing over at Epic with regards to tickets and marketing. I think there was a thought that they were going to not have it as open to locals in year one. They opened the local not too — well, a bit of a while back earlier this year. At this point, do you think that there’s still a chance that the way that they structure the Epic tickets in this first year could be somewhat of a benefit? Or is that maybe not so much the case anymore?

Marc Swanson : I mean, I think what I would — I mean we are focused on our park, right. And I think the benefit is really more people coming to the market. So to the extent they bring more people to the market, we have our strategies and our methods for bringing those people to our parks. And that’s the opportunity that we keep talking about. And so having the Expedition Odyssey opening in Orlando recently is exciting. It’s differentiated, like I said, having some other things that we haven’t announced yet coming in Orlando as well are exciting also when we’re able to talk a little bit more about them. But we’ll focus on our value proposition, our compelling product. I’m sure they have lots of different strategies on who knows if they’ll adjust them throughout the year, but we’re going to focus on doing the things that have worked for us over a 50-year history here in Orlando. So we have a number of ways we can target people and adjust them as necessary.

Operator: The next question comes from Chris Woronka with Deutsche Bank. Please go ahead.

Chris Woronka : Hi, guys. Good morning, thanks for taking the question. Marc, I was hoping maybe we could talk a little bit about kind of mix of customer. And I know you mentioned that your — I think you mentioned your pass base down at the end of the quarter. So I mean, does that imply that you guys are seeing a higher mix of kind of first timers. And is that a reasonable expectation going through the year maybe compared to prior years? Is there any way to kind of think about that, especially relative to admissions per cap?

Marc Swanson : Yes. What I would say, I think in kind of the first three, four months here, we’ve been probably seeing more people from markets that are driving in versus local, and that would kind of make sense with having a pass base that’s slightly down. I will say the pass holders we do have, though, which is still a lot, obviously, they’re visiting more times, right? So that, in and of itself, as you guys know, just puts downward pressure on the per cap because they’re coming more. We like that revenue trade, right? We want people to come as many times as they can because hopefully, they are spending when they come. So that will be a dynamic that will monitor throughout the year. But I think we also did some things in the first quarter to attract, like you said, maybe some more single day or multiday type tickets, probably left some money on the table there, to be honest, and learn from that.

So I think we have some opportunities to — and have adjusted some of that pricing kind of going forward or ways that we do that.

Chris Woronka : Okay. And as a follow-up, just kind of circle back to the hotel. I know you said there is not really any news to report, but — is there something bigger that you guys are waiting on is there any kind of like a deadline? I mean I’m just trying to get a sense as to whether you would characterize this as like an extended bake-off or whether there’s a lot going on, and you guys are waiting something more specific with one party or another?

Marc Swanson: Well, I think the simplest maybe way I can think about it is we have quite a bit of land, right, as I mentioned, and it is in locations that are attractive to people, and there’s a lot of ways you could use that land, right? So one of the ways would be hotels, one of the ways could be housing, rides, attractions, all sorts of things. And then there is a lot of different ways to structure even just the value of that land, the underlying value of that land like leasebacks and things like that. So when you start talking hotel and you start talking land, we used to using that land, we just want to make sure that we get into the best structure that is best for our shareholders, and best for the company. And I think those discussions have taken some time.

And I think there is also different ways to think about that and different people proposing different things. You’re obviously familiar with the makeup of our board being almost 50% owned by private equity. And I can tell you that they get a number of inbounds on this exact topic of land valuation and how to think about that, whether it’s hotels or other uses of that land or other ways to monetize that land.

Operator: The next question comes from Thomas Yeh with Morgan Stanley. Please go ahead.

Thomas Yeh: Thank you so much. Just one more on EPIC. Is there any early signs or tea leaves on seeing incremental traffic into the market? And are you expecting to run promos or tweak your selling strategy in any way to try to capture that opportunity, maybe just if you are kind of assuming it helps or hurt at the margin in terms of what’s embedded in your expectations would be helpful.

Marc Swanson : Thomas, I don’t know that I’ve seen anything specific. I can tell you that we expect more people to come. I certainly — again, that’s what the opportunity is a good one because we — it’s a good part. [indiscernible] strong new attraction in the market that should bring more people and give us the opportunity to pick-off visitation like we’ve talked about quite a bit. And again without getting into anything too competitive, look, we have a lot of different ways we can attract people and no different than other years where we test and optimize different things we do, different offers, different ticket packages, whatever it may be. So I think that will always be something we do, and it can be market by market, part by part, depending on what we’re seeing.

Thomas Yeh: Okay. Understood. And then just as a follow-up, some pretty helpful color on the sponsorship revenue ramp. I believe your in-park revs currently do include some small licensing revenues, I think like for Abu Dhabi, for example. Has that been a net tailwind year-over-year? Just any update on how that’s contributing to your in-park per cap number would be helpful. Thank you.

Marc Swanson : Yes. I can help you on that. What I probably should have said is at the moment, that sponsorship revenue, the large majority of that would still be ahead of us. So that is not in the Q1 numbers. Abu Dhabi is largely, I think, in-line or a little bit higher than prior years, but I wouldn’t say that’s a material increase or anything like that. But maybe over time, it will continue to build. But I think for now, it is not a material increase.

Operator: Our next question comes from Lizzie Dove with Goldman Sachs. Please go ahead.

Elizabeth Dove : I just wanted to ask, I guess, about the kind of cost impact around Epic. Have you seen any kind of pressure in terms of labor, I think the wages are a little higher than your any wage pressure that you’ve seen or anticipation for kind of higher marketing spend or more events that you’re putting on in Orlando that might pressure cost a little bit?

James Mikolaichik : Yes. We — so we had planned for some labor increases for minimum wage across several different markets, not just Epic. We’ve also seen some pricing in the marketplace specific in Orlando in relation to the question that you are asking. However, we’ve been very good at managing that from an hourly standpoint. And I think we’ve been very good at matching the forecasting on our attendance against the — what we need to do on the labor side to ensure that we’ve got the right guest experience. So through Q1, I think how we manage that labor and the cost there I think, has been extremely solid. We’ve chewed through most of the increase in cost from any marginal rate increases and anything that we’ve seen from competitive forces.

So I’d say that’s gone pretty well. On the marketing side, we had a plan to increase some expense on marketing. I mentioned it earlier, and both, I think, Marc and myself mentioned it in our comments that we have — we plan to keep marketing relatively flat, but we’ve just redeployed it strategically across several different markets to make sure that it was impactful in the places that we wanted at the right times for when we wanted it and that’s why you saw some spending that I mentioned coming out of last year in the first quarter and some prepaids that we put on the balance sheet with respect to some production that we have planned to put against some media spots that we have coming into our bigger selling season. So the two questions you got, I think labor and marketing are on track, and we’ve been very strategic about how we’re using it in the right spot.

Elizabeth Dove : Got it. And then just one follow-up on the buyback. I know you said it sounds like there is an announcement coming, but the pace is a little bit slower than might have expected in the first quarter with the market performance. But just curious how level, how you think about comfortability with leverage, whether you’d be willing to kind of tick up a little bit from where you are here? Or just how you think about capital allocation and buybacks?

Marc Swanson : Sure. No, you can refer to my comments like you said, that I made earlier on that. And look, I think, as always, we work very closely with the Board on use of cash and what’s the most highest return to shareholders, and we’ll continue to do that. So I don’t have any specific comments on what that means for leverage or anything like that. I mean, we are comfortable where our leverage ratio is now, not to say, we’re going to be comfortable at a different level, higher or lower, right? So it really just comes down to what is the best way we can return cash to shareholders. I would also point out we’re going to be entering kind of our peak cash earnings season here in Q2 and Q3. So that will obviously be a benefit to cash building throughout the year. So more to come on that, as I said, hopefully in the coming weeks.

James Mikolaichik : Yes. I don’t — just a reminder, too, it doesn’t necessarily need to be a leverage thing given what Marc said, from a free cash flow standpoint, but that is obviously something given our balance sheet that we could entertain. And I think it’s important also to remember as you look back at sort of the last year, we — our share count is down 9 million shares from this time last year. So when you think about the earnings power across that share base with 14% less shares. We are pretty — we’re happy with what we’re doing from a performance standpoint and where we’re headed and what Marc has laid out sort of as a projection for the remainder of the year. And if you think about it in the context of potentially even more downward pressure on that share count, that earnings power spread across an even lower balance is pretty attractive.

Elizabeth Dove: Thank you.

Operator: This concludes our question-and-answer session. I would now like to turn the conference back over to Marc Swanson for any closing remarks.

Marc Swanson : Yes. Thank you, Doran. On behalf of Jim and the rest of the management team at United Parks & Resorts, want to thank you for joining us this morning. As you heard today, we are confident in our long-term strategy, which we believe will drive improved operating and financial results and long-term value for stakeholders. Thank you, and we look forward to speaking with you next quarter.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.