United Parks & Resorts Inc. Income Taxes Disclosure

12. INCOME TAXES

The deferred income tax provision represents the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The Company files federal, state and provincial income tax returns in various jurisdictions with varying statute of limitation expiration dates. Under the tax statute of limitations applicable to the Internal Revenue Code of 1986, as amended (the “Code”), the Company is no longer subject to U.S. federal income tax examinations by the Internal Revenue Service for years before 2022. However, because the Company is carrying forward income tax attributes, such as net operating losses and tax credits from 2009 and subsequent years, these attributes can still be audited when utilized on returns filed in the future. The Company has determined that there are no positions currently taken that would rise to a level requiring an amount to be recorded or disclosed as an unrecognized tax benefit. If such positions do arise, it is the Company’s intent that any interest or penalty amount related to such positions will be recorded as a component of the income tax provision in the applicable period.

The Company has federal tax net operating loss carryforwards of approximately $191.2 million as of December 31, 2025 and state net operating loss carryforwards spread across various jurisdictions with a combined total of approximately $317.0 million as of December 31, 2025. The federal net operating loss carryforwards have an indefinite life, and the state net operating loss carryforwards, if not used to reduce taxable income in future periods, will begin to expire in 2029.

Realization of the deferred income tax assets, primarily arising from these net operating loss carryforwards and tax credit carryforwards, is dependent upon generating sufficient taxable income prior to expiration of the carryforwards, which may include the reversal of deferred tax liability components.

As of December 31, 2025 and 2024, the Company has a valuation allowance of approximately $4.8 million and $5.0 million, net of federal tax benefit, respectively, on the deferred tax assets related to state net operating loss carryforwards, which, the Company believed did not meet the “more likely than not” criteria and would expire before being realized in future periods. The Company’s valuation allowances, in part, rely on estimates and assumptions related to future financial performance. Due to the uncertain nature of the macroeconomic environment in general, and the related impact changes in it would have on the Company’s financial performance, the Company’s valuation allowances may need to be adjusted in the future.

As a result of the Inflation Reduction Act of 2022, as of December 31, 2025 and 2024, respectively, the Company accrued approximately $1.5 and $4.6 million for an expected excise tax related to shares repurchases made which is included in accounts payable and accrued expenses and treasury stock, at cost in the accompanying consolidated balance sheets. During the year ended December 31, 2025, the Company paid $4.6 million in excise tax related shares repurchases during the year ended December 31, 2024.

On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted and signed into law. The Company evaluated the impact of the Act and any impact has been considered and reflected during the quarter ended December 31, 2025.