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Risk factors

You should carefully consider the risks described below, together with the other information contained in this prospectus, before you make a decision to exchange any original notes for exchange notes. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially affect our business operations. In addition, our business is subject to uncertainties as a result of the transactions described under “ Summary—Recent developments ” and those transactions and their impact on us are outside of our control. If any of the events described in the risk factors below actually occurs, our business, financial condition, operating results and prospects could be materially adversely affected, which in turn could adversely affect our ability to repay the notes. In such case, you may lose all or part of your original investment.

Risks related to our business

Recent instability in general economic conditions throughout the world could reduce consumer discretionary spending which could impact our profitability and liquidity while increasing our exposure to counterparty risk.

Unfavorable general economic conditions, such as higher unemployment rates, a constrained credit market, housing-related pressures, and higher prices for consumer goods can reduce spending for leisure travel and family entertainment. Unfavorable economic conditions can also impact our ability to raise theme park ticket prices to counteract increased energy, labor, and other costs. Therefore, a continued economic recessionary environment would likely continue to negatively impact our results of operations. We continue to be cautious of current economic conditions domestically and in our key international markets, as recessionary fears have continued to proliferate. Factors such as continued unfavorable economic conditions, a significant decline in demand for family entertainment, or continued instability of the credit and capital markets could adversely impact our results, which in turn, could trigger a downgrade in our credit rating. These factors could also negatively impact our ability to obtain financing, our profitability and our liquidity generally. These conditions could also hinder the ability of those with which we do business, including vendors, customers and tenants, to satisfy their obligations to us. Our exposure to credit losses will depend on the financial condition of our vendors, customers and tenants and other factors beyond our control, such as deteriorating conditions in the world economy or in the theme park industry. The unprecedented levels of disruption and volatility in the credit and financial markets have increased our possible exposure to vendor, customer and tenant credit risk because it has made it harder for them to access sufficient capital to meet their liquidity needs. This market turmoil coupled with a reduction of business activity generally increases our risks related to our status as an unsecured creditor of most of our vendors, customers and tenants. Credit losses, if significant, would have a material adverse effect on our business, financial condition and results of operations. Moreover, these issues could also increase the counterparty risk inherent in our business, including with our suppliers, vendors and financial institutions with which we enter into hedging agreements and long-term debt agreements such as our renewed senior secured credit agreement. The soundness of these counterparties could adversely affect us. In this difficult economic environment, our credit evaluations may be inaccurate and we cannot assure you that credit performance will not be materially worse than anticipated, and, as a result, materially and adversely affect our business, financial position and results of operations.

Changes in regulations or new regulations applicable to our business could increase our operating costs.

We are subject to various federal, state and local regulations of our business. These regulations include those relating to environmental protection, privacy and data protection laws and regulations, and the regulation of the safety of consumer products, ride safety and theme park operations. We are also subject to regulation by state and local authorities relating to health, sanitation, safety and fire standards and liquor licenses and federal and state laws governing our relationships with employees, federal and state laws which prohibit discrimination and other laws regulating the design and operation of facilities such as the Americans With Disabilities Act of 1990.

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Failure to comply with the laws and regulatory requirements applicable to our business could result in revocation of required licenses, administrative enforcement actions, fines and civil and criminal liability. Changes in any of these regulatory areas may increase our costs and adversely affect the profitability of our business.

Attendance at our theme parks is influenced by general economic and other conditions.

Attendance at our theme parks is heavily dependent upon consumer spending on travel and other leisure activities. Because consumer spending on travel and other leisure activities is discretionary, this is usually the first type of spending to be curtailed by consumers during economic downturns such as the current one. As a result, we have historically experienced weaker attendance during economic downturns and during other events affecting travel and leisure activities. In addition, during economic downturns, if people travel to our theme parks, they generally spend less on merchandise, food and beverage while at the park. Any further deterioration in the already weakened general economic conditions, increases in the cost of travel (including the cost of fuel), additional outbreaks or escalation of war, or terrorist or political events that diminish consumer spending and confidence could reduce attendance and in-park spending at our theme parks.

Our business is largely dependent on air travel.

We estimate that approximately half of the visitors to our theme parks travel to Orlando by air. An increase in the price of jet fuel may serve to increase the price of air travel and reduce demand. In addition, the recent economic difficulties facing the airline industry may result in a reduction in scheduled flights to Orlando and an increase in the price of air travel which in turn may have a negative effect on the number of visitors to Orlando. In addition, another terrorist attack in the United States or in one of our major international attendance markets or the mere threat of a terrorist attack is likely to result in a decline in air travel. A significant decline in visitors traveling to Orlando by air would negatively affect attendance at our theme parks, possibly dramatically.

We are subject to the risks inherent in deriving substantially all of our revenue from one location.

Substantially all of our revenue is derived from the operation of our two theme parks and CityWalk in Orlando, Florida. This subjects us to a number of risks. Our business is and will continue to be influenced by local economic, financial and other conditions affecting the Orlando area. This may include prolonged or severe inclement weather in the Orlando area, a catastrophic event such as a hurricane or tornado, or the occurrence or threat of a terrorist attack in the Orlando area, any of which could significantly reduce attendance at our theme parks. In addition, the partial or total destruction of our theme parks requiring either of them to be closed for an extended period of time would have a material adverse effect on our ability to generate revenue.

Armed conflicts, acts of terrorism and other world events affecting the safety and security of travel could adversely impact the demand for family entertainment or leisure travel which could affect our future sales and profitability.

Our business has been impacted in the past by geopolitical events such as the terrorist attacks in the U.S. on September 11, 2001 and the wars in Iraq and Afghanistan. Occurrences such as these have historically had an impact on the demand for family entertainment and leisure travel. Decreases in the demand for our products and services could lead to price discounting which could reduce our profitability.

The United States is currently engaged in military operations in the Middle East, which could drive up the price of gas and air travel and increase the chance of another terrorist attack in the United States or key international markets, each of which would have a negative impact on attendance at our theme parks.

The United States and certain of its allies are currently engaged in military operations in the Middle East. This military action could exacerbate the risks identified above and have a number of other consequences, many of which would likely have a negative impact on attendance at our theme parks and, as a result, our prospects.

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The military operations in Iraq and Afghanistan could further increase the price of crude oil, which in turn would increase the price of gasoline and jet fuel. According to the Energy Information Administration of the U.S. Department of Energy, the price of gas increased to as much as $4.06 per gallon in Florida in 2008. If gas prices return to these high levels or increase substantially, it may cause significant numbers of domestic consumers to forego taking a vacation, which could negatively affect our attendance, as approximately 25% of our visitors drive more than 200 miles to our theme parks and approximately half of our visitors travel by air to our theme parks. The current military operations in Iraq and Afghanistan may increase the likelihood of another major terrorist attack in the United States or one or more of our key international markets. The threat or occurrence of a terrorist attack could serve to discourage many consumers from travel or otherwise participating in leisure activities.

Risks related to our insurance.

Most of our insurance is arranged by GE through global programs for its businesses via licensed insurers issuing enforceable insurance policies, for which we are allocated charges for premium payments, which we believe are generally less expensive than what we could otherwise obtain on a standalone basis. See “ Summary—Recent developments .” The insurance includes multi-layered property coverage that presently provides for coverage for replacement costs per occurrence (subject to sub-limits such as wind-storm and terrorism). Our deductible varies from year to year based upon a financial analysis of then-current premiums, market conditions and cost of capital. The multi-layered property coverage insures our real and personal properties (other than land) against physical damage resulting from a variety of hazards including terrorism and business interruption. The insurance program also includes workers’ compensation, public/general and automobile liability, accident and other forms of insurance. For many of our insurance policies we are subject to high deductibles.

Loss of key distribution channels for ticket sales or the loss of key ticket products may reduce our revenues.

Approximately 42% of our annual theme park ticket sales are generated by third party distribution channels, the majority of which are concentrated among 40 third party customers. As an example, approximately 10% of our annual theme park ticket sales are derived from time-share operators, which are dominated by a few major operators in the Orlando area. Due to the recent upheaval in the credit markets in conjunction with the timeshare industry’s reliance on access to credit, certain timeshare operators have experienced a significant downturn in their business. Continuation of these circumstances could adversely impact this important distribution channel. Other significant distribution channels include key domestic and international travel operators. In addition, we also have key ticket products such as the Orlando FlexTicket ^™ which entitles a guest to visit both of our theme parks as well as Wet ’n Wild ^® , SeaWorld ^® , Aquatica ^™  and Busch Gardens ^® Tampa Bay. A loss of any key distribution channel or ticket product could have a negative effect on our ticket sales.

The theme park industry competes with numerous vacation and entertainment alternatives; the Orlando theme park market is extremely competitive.

Our theme parks compete with other theme, water and amusement parks in Orlando and around the country and with other types of recreational facilities and forms of entertainment, including cruise ships, other vacation travel, major sports attractions and other major entertainment activities. Our business is also subject to factors that affect the recreation, vacation and leisure industries generally, such as general economic conditions, consumer confidence and changes in consumer spending habits. The Orlando theme park market is extremely competitive. There are currently seven major theme parks in the Orlando area including our competitors: Walt Disney World’s Magic Kingdom ^® , Epcot ^® , Disney’s Hollywood Studios, Disney’s Animal Kingdom ^® and Blackstone’s SeaWorld ^® . Additionally, on March 1, 2008, Anheuser-Busch InBev opened its Aquatica ^™ water park, which along with SeaWorld ^® was subsequently acquired by Blackstone on December 1, 2009. Affiliates of the Blackstone Group L.P. own a 50% interest in UCDP, UCDP Finance, Holding I, Holding II, UCFH I Finance and UCFH II Finance. See “ Summary—The Blackstone Group L.P. ” Blackstone’s interests in SeaWorld ^® and the Aquatica ^™ water park might conflict with Blackstone’s interest in us. See “ —Risks related to our partners—Blackstone and Vivendi Universal Entertainment control us and may have conflicts of interest with us or you in

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the future. ” All of these theme parks are located within a 10-mile radius of our theme parks. Some of these theme parks, particularly those affiliated with The Walt Disney Company, enjoy better name recognition than our theme parks do. This puts us at a disadvantage in our attempts to attract guests to our theme parks over those of our competitors. Additionally, because our sponsorship relationships change over time, the sponsorship relationships that we may have in the future may not benefit our business to the extent they do currently by providing marketing exposure for us.

The close proximity to us of so many of our direct competitors has various other adverse consequences on our business. For example, we offer significant commissions to travel agents and wholesalers in order to provide them with an incentive to encourage their customers to purchase tickets to our theme parks rather than those of our competitors in the Orlando area. Also, it has the effect of increasing competition for market share among the major competitors.

There is the risk of accidents or other incidents occurring at theme parks, including those owned by other theme park operators, which may create negative publicity which may reduce attendance and thereby negatively impact our results of operations.

Our theme parks feature “thrill rides.” There are inherent risks involved with these sorts of rides and attractions. An accident or an injury at our theme parks or at another theme park may result in negative publicity which could reduce attendance and thereby negatively impact our results of operations. We purchase insurance to protect us in the event of an accident or certain other losses, however we are subject to high deductibles and our insurance may not cover all types of incidents. Additionally, we cannot be assured that negative events unrelated to attractions, such as the outbreak of infectious disease or other health concerns, will not occur at our theme parks or at another theme park.

If we are unable to adequately protect the right to use the intellectual property of the themed elements of our rides and attractions, we may be required to re-theme certain rides and attractions, which will be expensive and time consuming. In addition, if there is an uncured event of default under certain of our intellectual property agreements and such agreements are terminated, we may suffer negative consequences such as acceleration of payments due thereunder.

The use of themed elements in our rides and attractions is dependent upon our obtaining and maintaining intellectual property licenses granting us the rights to use those elements. Failure to protect our existing intellectual property rights may result in the loss of those rights or require us to make significant additional payments to third parties for infringing their intellectual property rights. The loss of the right to use a particular themed element means that we would be unable to operate the rides or attractions that utilize the relevant element. This may require us to re-theme those rides or attractions which may involve taking the relevant ride or attraction out of service and may require significant capital expenditures. Any of those actions could negatively impact our results of operations, name recognition and growth prospects. In addition, if there was an event of default that we failed to cure under one of our intellectual property agreements and such agreement was terminated, we may become subject to accelerated payments. For example, the License Agreement (the “WB Agreement”) between Warner Bros. Consumer Products Inc. (“WB”) and UCDP, pursuant to which UCDP licenses certain rights to the characters and other intellectual property contained in the Harry Potter ^™ books and motion pictures, is terminable, subject to applicable cure periods, if we fail to maintain quality standards, fail to invest minimum required capital, fail to use the properties in accordance with the license, or upon other customary events of default. In addition, if we sell Universal’s Islands of Adventure, or if 50% of UCDP is not owned by Vivendi Universal Entertainment or its affiliates, the agreement is terminable unless the buyer of Universal’s Islands of Adventure or of the interests in UCDP meets certain financial and reputation tests. In addition, Universal’s Islands of Adventure must either continue to be managed by NBCU or continue to be operated under a license from NBCU that enables NBCU to maintain the quality and reputation of Universal’s Islands of Adventure (the “NBCU License Agreement”). Our partnership agreement has been amended to provide that NBCU will execute the NBCU License Agreement with us, on the same financial terms as set forth

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in our existing partnership agreement and the Universal License Agreement, if, following a sale or change in control, we will no longer be managed by NBCU. In the event that, following a sale or change in control, in accordance with the WB Agreement, the name of the Universal’s Islands of Adventure theme park no longer contains the word “Universal” or “Universal’s”, then The Wizarding World of Harry Potter ^™ , Jurassic Park ^® , Seuss Landing ^™ and Marvel Super Hero Island ^® and other themed areas of Universal’s Islands of Adventure need to be operated under the NBCU License Agreement, or the name of the theme park and resort must include the name of another major recognized theme park operator, major established motion picture and television studio or another name approved by WB. In the event of termination by WB due to our default, a sale of Universal’s Islands of Adventure or a change of control of UCDP for which the foregoing requirements are not satisfied, payments due with respect to the remaining term of the agreement will be accelerated and due immediately. In addition, we license various elements based on The Simpsons ^™ , including certain characters under the License Agreement ( the “Fox Agreement”) among UCDP, Universal City Studios LLLP and Twentieth Century Fox Licensing & Merchandising (“Fox”). The Fox Agreement would be terminable in the event of our breach, or in certain cases following a change of control to which Fox did not consent. If Fox were to terminate the Fox Agreement, payments due with respect to the remaining term of the Fox Agreement will continue to be due and payable as and when they would have become due and payable, except that if the breach is a result of a change of control, then 50% of such remaining payments allocated to us shall be due and payable as and when they would have become due and payable. See “ Business—Intellectual property .”

The use of, and ability to create derivative works from, copyrighted material is important in our business. If an author claims a right to terminate a copyright for a work from which we have created derivative works for use in our business, our ability to create new derivative works from any such work in the future could be compromised or the costs we incur to preserve our rights to continue to create derivative works from any such work could increase.

Copyright is the right to prevent others from copying protected expression in a work of authorship. Under the U.S. Copyright Act, the owner of a copyright enjoys a number of rights, including the right to prepare derivative works based upon the copyrighted work. Bona fide individual authors and their heirs have a statutory right to terminate their earlier assignments and licenses in certain copyrighted works by sending notice within a statutorily-defined window of time. The timing requirements with respect to such notice period mean that notice is required years in advance of the statutory termination date. For example, we license our rights to the Incredible Hulk™ (“Hulk”) from Marvel and we are aware that the estate of Jack Kirby (the “Kirby Estate”) has claimed a right to terminate rights that allegedly were granted by Jack Kirby to Marvel Entertainment, Inc. or its predecessor (“Marvel”) for the Hulk. Certain Marvel-related entities subsequently filed suit against the Kirby Estate, seeking a declaratory judgment that the aforementioned termination of rights is invalid and of no legal force or effect. If the Kirby Estate is successful in its claim of termination, such termination would only be effective after 2018.

The loss of key personnel could hurt our operations.

Our success depends upon the continuing contributions of our executive officers and other key operating personnel. The complete or partial loss of their services could adversely affect our business. Our Chief Executive Officer and other executives are employees of, and have employment agreements with, Vivendi Universal Entertainment. We cannot be certain that we will be able to retain their services or to find adequate replacements for them in the event we were to lose their services. If Vivendi Universal Entertainment were to cease acting as our manager, we could lose the services of those executives.

Our business is seasonal and bad weather can adversely impact attendance at our theme parks.

Our business is seasonal. Attendance at our theme parks follows a seasonal pattern which coincides closely with holiday and school schedules. Some of our attractions and other facilities may close periodically for maintenance, re-theming, or to adjust to varying attendance levels. Because many of the attractions at our theme

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parks are outdoors, attendance at our theme parks is adversely affected by bad weather. Prolonged bad or mixed weather conditions during our seasonal peak attendance periods may reduce attendance, causing a more severe decline in revenues than if those conditions occurred during a low attendance period. In addition, temporary but severe weather conditions, such as a hurricane, can adversely impact attendance at our theme parks.

We rely heavily on information technology in our operations, and any material failure, inadequacy, interruption or breach of security of that technology could harm our ability to effectively operate our business and subject us to financial liability, potentially resulting in our reputation being harmed.

We rely heavily on information systems across our operations. Our ability to effectively manage our business depends significantly on the reliability and capacity of these systems. Despite our considerable efforts and technology to secure our computer network, security could be compromised, confidential information, such as customer credit card numbers, could be misappropriated, or system disruptions could occur. This could lead to adverse publicity, loss of sales and profits, or cause us to incur significant costs to reimburse third parties for damages, which could impact profits.

Risks related to our partners

Risks related to the right of first refusal agreement between our partners.

Pursuant to a right of first refusal provision in the partners’ agreement between Blackstone and Vivendi Universal Entertainment, as amended, (the “partners’ agreement”), if either Blackstone or Vivendi Universal Entertainment desires to sell its ownership interest in Holding I and Holding II, it shall, subject to certain conditions, make a binding offer, specifying the proposed sale price, to sell to the other its entire interest in each of Holding I and Holding II. The non-offering partner will then have 90 days after receipt of an offer to accept the offer to sell. If Blackstone exercises its rights under this provision by accepting a binding offer, it may result in 100% control and ownership of us being acquired by Blackstone, which could pose a number of risks to our business. This event could impact our continued use of the “Universal” name and certain intellectual property as discussed below in “ Risks related to use of the “Universal” name and certain intellectual property .” These same risks would be present if a third party unaffiliated with Vivendi Universal Entertainment were to acquire control of us. In addition, we face risks related to a change of control under certain of our business agreements.

Risks related to our reliance on our strategic partners and their affiliates, including our use of the “Universal” name and certain intellectual property.

Our continued use of the “Universal” name and our future access to new intellectual property from Universal Studios, Inc., Universal City Studios LLLP, an indirect, wholly owned subsidiary of Vivendi Universal Entertainment, Universal CPM and USI Asset Transfer LLC, a direct, wholly owned subsidiary of Vivendi Universal Entertainment (collectively referred to as the “Universal License Parties”), is dependent on there not being a change of control as described in UCDP’s partnership agreement and as confirmed by the License Agreement dated as of March 28, 2002, as amended May 25, 2007 and on January 15, 2010 (the “Universal License Agreement”) among UCDP and the Universal License Parties. In addition, a change of control could have other negative consequences for us, including potential termination of the WB Agreement, acceleration of payments due under certain of our license agreements and the loss of significant benefits we enjoy from our relationship with certain of our affiliates. Accordingly, a change of control under our license agreements could impair our name recognition and growth prospects and negatively impact our results of operations.

We license the right to use the “Universal” name and a substantial number of intellectual properties as street entertainment characters and as themed elements in rides and attractions from the Universal License Parties. See “ Business—Intellectual property .” Our right to use the “Universal” name in connection with Universal Orlando continues indefinitely at no cost to us until the latest of (i) 30 months after the occurrence of certain change of

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control events (as described in UCDP’s partnership agreement), (ii) 30 months after any termination of the WB Agreement prior to its scheduled expiration, or (iii) the expiration of the WB Agreement in accordance with its terms. Under UCDP’s partnership agreement, a change of control occurs when (a) Universal CPM is no longer a wholly owned subsidiary of USI, Vivendi Universal Entertainment, or any of their respective affiliates, or (b) the Universal License Parties do not own any interest in us. A change of control under our WB Agreement, such as Blackstone or a third party unaffiliated with the Universal License Parties acquiring all of the partnership interests in us, would cause us to lose our right to use the “Universal” name on the earlier of the expiration of the WB Agreement and 30 months after the date of termination of the WB Agreement, and could cause us to lose such right even earlier if NBCU does not enter into a new license agreement upon such change of control granting us the right to continue to use the “Universal” name in accordance with NBCU’s obligations under our partnership agreement. See “ Business—Intellectual Property—Harry Potter. ” A change of control under our license agreements, such as Blackstone or a third party unaffiliated with the Universal License Parties acquiring all of the partnership interests in us, would not necessarily constitute a change of control under the indentures governing the notes. If we are unable to use the “Universal” name, and if we are unable to partner with another similar, recognizable brand, the name recognition of our theme parks could be impaired.

Our right to use the creative and proprietary elements controlled by the Universal License Parties continues at no cost to us, subject to third party contractual limitations, until the later of the expiration or termination of the WB Agreement in accordance with its terms or, if sooner, the date that neither we nor a permitted successor or assign is a party to the WB Agreement, or the date such intellectual property rights would otherwise cease to be licensed to us. The Universal License Parties are required to continue to license those intellectual properties that are currently licensed to us for as long as we or our permitted successor or assign remains a party to the WB Agreement and such WB Agreement remains in effect, and we continue to operate our theme parks at a substantially similar standard, even if the Universal License Parties no longer have an ownership interest in us. However, in a situation where Blackstone or a third party unaffiliated with the Universal License Parties acquires all of the partnership interests in us, the Universal License Parties are not required to grant us a license to any new intellectual property rights that they may acquire or develop in the future that may be or become useful or necessary for the operation of our theme parks. See “ Business—Intellectual Property .” Our inability to acquire proprietary and creative elements for possible new attractions could impair the growth prospects of our theme parks. The Universal License Parties could also claim that our theme parks were not being operated to a sufficiently high standard after Blackstone or a third party unaffiliated with the Universal License Parties acquired all of the partnership interests in us, and revoke the license completely. If this were to occur, we may be unable to operate our theme parks for an extended period of time, and may not be able to continue operating our theme parks at all. In addition, the WB Agreement is terminable if the Universal License Parties fail to remain involved either as a 50% owner or through certain license arrangements, unless WB consents to the assignment or the entity to which Universal’s Islands of Adventure or our partnership interests are transferred meets other tests designed to ensure the financial capability of the buyer and to maintain the reputation of our theme parks. In the event of termination by WB due to our default or a sale of Universal’s Islands of Adventure or a change of control of us for which the foregoing requirements are not satisfied, payments due with respect to the remaining term of the WB Agreement will be accelerated and due immediately.

We also rely on Vivendi Universal Entertainment and its affiliates for management oversight, advisory and other services. In its capacity as our manager, Vivendi Universal Entertainment or its direct wholly owned subsidiary Universal CPM provides creative services in relation to development of our rides and attractions and the UPR merchandise team provides merchandising services. In addition, certain of our senior executives are NBCU employees. Most of our insurance is arranged by GE through global programs for its businesses via licensed insurers issuing enforceable policies. These and the numerous other arrangements with affiliates of Vivendi Universal Entertainment and, indirectly, NBCU and GE, such as savings we derive from access to favorable purchasing agreements and volume purchasing and other corporate programs, provide us with significant benefits that may be reduced or lost completely if Blackstone or a third party unaffiliated with Vivendi Universal Entertainment gains control of us pursuant to the right of first refusal or otherwise. For a description of these arrangements and the right of first refusal, see “ Certain relationships and related transactions, and director independence ” and “ Description of the UCDP partnership agreement—Right of first refusal .”

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If the equity holders of Holding I and Holding II that are controlled by Blackstone default on certain indebtedness, Blackstone’s equity interests in Holding I and Holding II will be subject to foreclosure.

On November 6, 2009, the equity holders of Holding I and Holding II that are controlled by Blackstone entered into a credit agreement with JPMorgan Chase Bank, N.A., Bank of America, N.A. and the other lenders party thereto with respect to a senior secured term loan (the “Margin Loan”) in the amount of $305 million, the proceeds of which were used to refinance term loans made to the equity holders of Holding I and Holding II that are controlled by Blackstone by JPMorgan Chase Bank, N.A. and Bank of America, N.A. concurrently with the consummation of the amendment of our 2004 senior secured credit agreement, to pre-fund interest and amortization reserves with respect to the term loans thereunder and to pay related fees and expenses. The obligations of the borrowers under the Margin Loan are secured by their equity interests in Holding I and Holding II and are guaranteed by NBC Universal on a deficiency basis, subject to the terms of the guarantee. The Margin Loan has a five-year maturity. It is anticipated that the only assets of the borrowers will be their equity interests in Holding I and Holding II. If the borrowers default on, or are unable to refinance the Margin Loan, the borrowers’ equity interests in Holding I and Holding II will be subject to foreclosure by the lenders. Any such foreclosure will not constitute a change in control for purposes of our renewed senior secured credit facilities or the notes.

Potential deadlock between the partners of our general partner could prevent us from executing certain aspects of our business strategy.

Major decisions by Holding II regarding our business generally require the consent of representatives of both Blackstone and Vivendi Universal Entertainment. This creates a potential for deadlocks. Any deadlock could delay us from taking certain actions in the future which would be beneficial to the business and may prevent or delay us from executing certain aspects of its business strategy.

Blackstone and Vivendi Universal Entertainment control us and may have conflicts of interest with us or you in the future.

Their conflicts of interest may make unavailable to us certain sponsorship relationships that would provide us with significant marketing exposure. Blackstone and Vivendi Universal Entertainment, together, beneficially own 100% of our equity interests.

As a result, Blackstone and Vivendi Universal Entertainment have control over our decisions to enter into any corporate transaction and will have the ability to prevent any transaction that requires the approval of equity holders, regardless of whether or not noteholders believe that any such transactions are in their own best interests. For example, Blackstone and Vivendi Universal Entertainment could cause us to distribute our cash resources to them or make distributions to service the loan to the Blackstone entities guaranteed by NBC Universal rather than invest such resources in our business. In addition, Blackstone and Vivendi Universal Entertainment may have interests adverse to parties with which we would like to enter into sponsorship relationships, and thus certain sponsorship relationships may be unavailable to us. Additionally, our Partners, their subsidiaries or their affiliates may from time to time, depending upon market conditions, seek to purchase debt securities issued by us in open market or privately negotiated transactions or by other means.

Furthermore, on December 1, 2009 an affiliate of Blackstone closed its acquisitions of SeaWorld ^® and certain other parks from Anheuser-Busch InBev. As noted previously, we have key ticket products, which allow guests to visit SeaWorld ^® and other parks owned by affiliates of Blackstone. Our ability to offer these products, such as the Orlando Flex Ticket ^™ which we offer under an agreement that will be subject to renewal in December 2011, could be impacted by these recent events. See “— Risks related to our business—The theme park industry competes with numerous vacation and entertainment alternatives; the Orlando theme park market is extremely competitive .”

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The pending joint venture among Comcast, GE and NBC Universal may constrain our operations until it is consummated , may affect how our business is managed if it is ultimately consummated, and may affect our relationships with GE and other vendors, customers and strategic partners and trigger a change of control under certain agreements.

On December 3, 2009, Comcast, GE, NBC Universal and NewCo entered into a Master Agreement pursuant to which they will form a joint venture and GE entered into a Stock Purchase Agreement with Vivendi pursuant to which, at or prior to the closing of the joint venture, GE will acquire Vivendi’s 20% interest in NBC Universal. See “ Summary—Recent developments. ” Upon consummation of the transactions contemplated by the Master Agreement and the Stock Purchase Agreement as currently contemplated, we would continue to be owned 50% by VUE, a wholly-owned subsidiary of NBC Universal. However, certain aspects of the transaction structuring are still being negotiated and finalized. Accordingly, our ownership could change. If VUE ceases to own its interest in us, directly or indirectly, it could trigger a change of control under certain agreements which could negatively affect our revenues, earnings and cash flows and adversely affect our prospects, which could be detrimental to our debt holders.

We cannot predict what changes, if any, Comcast will implement in our business and operations if the pending transactions are consummated. In addition, uncertainty around the transactions (and the impact upon us) could adversely impact our business. Moreover, GE will have veto rights with respect to any material expansion of the joint venture’s scope of business or purpose, certain acquisitions, issuances or repurchases of equity, debt incurrences or loans made outside of the ordinary course of business and tax-related actions, which could adversely affect our business’ growth prospects.

In addition, in connection with the pending transactions, some of our vendors, customers and strategic partners may delay or defer decisions relating to their ongoing and future relationships with us, which could negatively affect our revenues, earnings and cash flows and adversely affect our prospects, which could be detrimental to our debtholders.

We have a number of ongoing relationships with GE. See “ Certain relationships and related transactions, and director independence ” for more information. GE and Comcast are still evaluating the extent, if any, to which GE’s relationships with us will continue after the transactions are consummated. To the extent those relationships do not continue, in some cases, such as with respect to our insurance, we will be required to find a replacement (which may require us to incur additional expense, including in advance of the transactions being consummated) or, in some cases, we may lose the benefits of the GE relationships, such as our sponsorship agreement with GE Money. See “ Business—Corporate sponsorships—GE Money Bank. ”

Even if the transactions contemplated by the Master Agreement are ultimately consummated, there could be a long time between their announcement and consummation, which could be as late as June 2011. The Master Agreement requires that until the closing of the transactions the parties must conduct the businesses that will be transferred to NewCo (including our business) in the ordinary course consistent with past practice and use commercially reasonable efforts to preserve those businesses and to keep available certain senior management and key employees.

Certain material transactions outside of the ordinary course of business are prohibited prior to the closing of the transaction without the consent of the other party, such as material mergers, acquisitions and dispositions, certain new material contracts, material increases in the compensation of certain employees and related party transactions. These covenants may impact our ability to operate our business during the pendency of the transactions contemplated by the Master Agreement.

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Risks related to the exchange notes and our indebtedness

If you fail to exchange your original notes, they will continue to be restricted securities and may become less liquid.

Original notes which you do not tender or we do not accept will, following the exchange offer, continue to be restricted securities, and you may not offer to sell them except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities law. We will issue exchange notes in exchange for the original notes pursuant to the exchange offer only following the satisfaction of the procedures and conditions set forth in “ The exchange offer—Procedures for Tendering .” These procedures and conditions include timely receipt by the exchange agent of the original notes and of a properly completed and duly executed letter of transmittal.

Because we anticipate that most holders of original notes will elect to exchange their original notes, we expect that the liquidity of the market for any original notes remaining after the completion of the exchange offer will be substantially limited. Any original notes tendered and exchanged in the exchange offer will reduce the aggregate principal amount at maturity of the original notes outstanding. Following the exchange offer, if you do not tender your original notes you generally will not have any further registration rights, and your original notes will continue to be subject to certain transfer restrictions. Accordingly, the liquidity of the market for the original notes could be adversely affected.

There is no public market for the exchange notes, and we cannot assure you that a market for the exchange notes will develop or that you will be able to sell your exchange notes.

The exchange notes are new issues of securities for which there is no established public market. We do not intend to have the exchange notes listed on a national securities exchange. The initial purchasers of the original notes have advised us that they currently intend to make a market in the exchange notes, as permitted by applicable laws and regulations. However, such initial purchasers are not obligated to make a market in the exchange notes, and they may discontinue their market-making activities at any time without notice. Therefore, we cannot assure you that an active market for the exchange notes will develop or, if developed, that it will continue. In addition, subsequent to their initial issuance, the exchange notes may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar notes, our performance and other factors.

Our ability to generate sufficient cash to service all of our indebtedness depends on many factors, some of which are beyond our control.

Our ability to generate cash depends on many factors, some of which are beyond our control. Our cash debt service for 2009, based on the amount of indebtedness that would have been outstanding at September 27, 2009 after giving pro forma effect to the Transactions, was approximately $127.4 million based on the interest rates on our renewed senior secured credit facilities and the notes, of which $60.0 million represents debt service on fixed-rate obligations (including variable rate debt subject to interest rate swap agreements). Accordingly, we will have to generate significant cash flows from operations to meet our debt service requirements. Our ability to make scheduled payments or to refinance our indebtedness, including the notes and the renewed senior secured credit facilities, depends on our ability to generate cash from operations in the future. This is subject, in part, to general economic, financial, competitive, legislative, regulatory, social, political and other factors. In addition, Blackstone and Vivendi Universal Entertainment may have interests adverse to parties with which we would like to enter into sponsorship relationships, and thus certain sponsorship relationships may be unavailable to us. Additionally, because our sponsorship relationships change over time, the sponsorship relationships that we may have in the future may not benefit our business to the extent they do currently by providing marketing exposure for us.

We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our renewed senior secured credit agreement, or otherwise, in an amount

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sufficient to enable us to fund planned capital expenditures, pay our indebtedness, including the notes, or to fund our other liquidity needs. If we cannot pay our indebtedness, we may need to refinance our indebtedness. The Consultant Agreement caps UCDP’s ability to incur secured borrowings to an amount equal to the greater of $975 million and 3.75x UCDP’s EBITDA (as defined in the renewed senior secured credit facilities). This cap may make it more difficult to refinance our indebtedness, including the notes.

Federal and state statutes allow courts, under specific circumstances, to void the notes and guarantees, subordinate claims in respect of the notes and guarantees and require note holders to return payments received.

Certain of the existing domestic subsidiaries of the issuers guarantee the original notes and will guarantee the exchange notes and certain of their future domestic subsidiaries may guarantee the notes. The issuance of the exchange notes and the incurrence of the guarantees may be subject to review under state and federal laws if a bankruptcy, liquidation or reorganization case or a lawsuit, including in circumstances in which bankruptcy is not involved, were commenced at some future date by, or on behalf of, our unpaid creditors. Under the federal bankruptcy laws and comparable provisions of state fraudulent transfer laws, a court may void or otherwise decline to enforce the notes or guarantees or subordinate the notes or guarantees to our existing and future indebtedness. While the relevant laws may vary from state to state, a court might do so if it found that when we issued the notes and incurred the guarantees or, in some states, when payments became due under the notes or guarantees, we received less than reasonably equivalent value or fair consideration and either:

The court might also void the notes or guarantees, without regard to the above factors, if the court found that we issued the notes or incurred the guarantees with actual intent to hinder, delay or defraud our creditors. In addition, any payment by us pursuant to the notes or guarantees could be voided and required to be returned to us or to a fund for the benefit of our creditors.

A court would likely find that we did not receive reasonably equivalent value or fair consideration for the notes or guarantees if we did not substantially benefit directly or indirectly from the issuance of the notes. If a court were to void the notes or guarantees, you would no longer have a claim against us. Sufficient funds to repay the notes may not be available from other sources. In addition, the court might direct you to repay any amounts that you already received from us.

The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, an issuer or guarantor would be considered insolvent if:

Each guarantee will contain a provision intended to limit the guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent transfer.

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This provision may not be effective to protect the guarantees from being voided under fraudulent transfer law, or may eliminate the guarantor’s obligations or reduce the guarantor’s obligations to an amount that effectively makes the guarantee worthless. In a 2009 Florida bankruptcy case, this kind of provision was found to be ineffective to protect the guarantees. To the extent a court voids the notes as fraudulent transfers or holds the notes unenforceable for any other reason, holders of notes would cease to have any direct claim against us. If a court were to take this action, our assets would be applied first to satisfy our liabilities, if any, before any portion of our assets could be applied to the payment of notes.

Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the notes. In addition, we are highly leveraged and have substantial debt service obligations.

As of September 27, 2009, after giving pro forma effect to the Transactions, the notes would have been effectively subordinated to $900.0 million of secured indebtedness under our renewed senior secured credit facilities. As of September 27, 2009, after giving pro forma effect to the Transactions, the aggregate amount of our outstanding indebtedness would have been $1,554.7 million, including the renewed senior secured credit facilities and the notes. An additional $75.0 million is available for future borrowings under the revolving portion of the renewed senior secured credit facilities and, in addition, we may borrow, subject to certain conditions (including limitations in the Consultant Agreement), up to $150.0 million of uncommitted incremental term loans under the renewed senior secured credit facilities from time to time, all of which would be secured and effectively senior to our noteholders. Furthermore, the Consultant (as defined in “ Management’s discussion and analysis of financial condition and results of operations ”) has a lien on certain of our assets to secure his interests under our agreement with him (the “Consultant Agreement”), including a mortgage on our real property up to $400.0 million, and the notes are effectively subordinated to his interests to the extent of the value of those assets. As a result of the foregoing, although we do not classify our obligations to the Consultant as indebtedness, we are highly leveraged. This level of indebtedness and our other obligation could have important consequences to you, including the following:

Our substantial obligations could have other important consequences to you. For example, our failure to comply with the restrictive covenants in the renewed senior secured credit agreement, which limit our ability to incur debt and sell assets, could result in an event of default that, if not cured or waived, could harm our business or prospects and could result in our bankruptcy.

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Despite our substantial indebtedness, we may still incur significantly more debt. Moreover, we may incur a significant amount of additional secured indebtedness. This could exacerbate the risks described above.

The terms of the indentures governing the notes and the renewed senior secured credit agreement permit us to incur significant additional indebtedness in the future. We have $75.0 million available for borrowing under the revolving credit portion of the renewed senior secured credit facilities and are permitted to borrow, subject to certain conditions (including limitations in the Consultant Agreement), up to $150.0 million of uncommitted incremental term loans under the renewed senior secured credit facilities from time to time. All of those borrowings would be effectively senior to the notes (to the extent of the value of the collateral securing such borrowings in the case of the senior notes). In addition, the Consultant has a lien on certain of our assets to secure his interests under the Consulting Agreement, including a mortgage on our real property up to $400.0 million, and the notes are effectively subordinated to his interests to the extent of the value of those assets. If new debt is added to our current debt levels, this would increase the risks described above. Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the notes.

The right of noteholders to receive payments on the notes will be effectively subordinated to the rights of our existing and future secured creditors.

Holders of our secured obligations, including indebtedness outstanding under our renewed senior secured credit agreement and our obligations in respect of the Consultant Agreement, will have claims that are prior to your claims as holders of the notes to the extent of the value of the assets securing those other obligations. Notably, our renewed senior secured credit agreement is secured by liens on substantially all of our assets and the assets of our existing and future domestic subsidiaries. In addition, the Consultant has a lien on certain of our assets to secure his interests under the Consultant Agreement and the notes are effectively subordinated to his interests to the extent of the value of those assets. The notes are effectively subordinated to all such secured indebtedness to the extent of the value of the collateral. In the event of any distribution or payment of our assets in any foreclosure, dissolution, winding-up, liquidation, reorganization or other bankruptcy proceeding, holders of secured indebtedness and other secured claims, such as the Consultant’s, will have a prior claim to the assets that constitute their collateral. Holders of the notes will participate ratably with all holders of our unsecured indebtedness that is deemed to be of the same class as the notes, and potentially with all of our other general creditors, based upon the respective amounts owed to each holder or creditor, in our remaining assets. In any of the foregoing events, we cannot assure you that there will be sufficient assets to pay amounts due on the notes. As a result, holders of notes may receive less, ratably, than holders of our secured obligations.

As of September 27, 2009, after giving pro forma effect to the Transactions, the aggregate amount of our secured indebtedness would have been approximately $934.6 million, and $75.0 million would have been available for additional secured borrowings under the revolving portion of our renewed senior secured credit facilities. In addition, we are permitted to borrow, subject to certain conditions (including limitations in the Consultant Agreement), up to $150.0 million of uncommitted incremental term loans under our renewed senior secured credit facilities from time to time. We are permitted to borrow significant additional indebtedness, including secured indebtedness, in the future under the terms of the indentures governing the notes and our renewed senior secured credit agreement. See “ Description of other debt ,” “ Description of the senior notes—Certain covenants ” and “ Description of the senior subordinated notes—Certain covenants .”

Claims of creditors of our non-guarantor subsidiaries will have priority with respect to the assets and earnings of such subsidiaries over you.

None of our subsidiaries other than Universal Parks & Resorts Vacations and Universal Orlando Online Merchandise Store will initially guarantee the notes. Claims of creditors of our subsidiaries, including trade creditors, secured creditors and creditors holding indebtedness and guarantees issued by such subsidiaries, will generally have priority with respect to the assets and earnings of such subsidiaries over our claims or those of our creditors, including you, even if the obligations of those subsidiaries do not constitute senior indebtedness.

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The right of noteholders to receive payments on the senior subordinated notes will be subordinated to the rights of the lenders under our renewed senior secured credit facilities, the holders of the senior notes and the Consultant, and to all of our other senior indebtedness, including any of our future senior debt.

The senior subordinated notes and the guarantees thereof will rank junior in right of payment to all of our existing senior indebtedness, including borrowings under our renewed senior secured credit facilities and the senior notes, and will rank junior in right of payment to all of our future borrowings, except for any future indebtedness that expressly provides that it ranks equal or junior in right of payment to the senior subordinated notes and the guarantees thereof. See “ Description of the senior subordinated notes—Subordination .”

As of September 27, 2009, on a pro forma basis after giving effect to the Transactions, we would have had approximately $1,334.6 million of senior indebtedness outstanding on a consolidated basis, and $75.0 million would have been available for additional secured borrowings under the revolving portion of our renewed senior secured credit facilities. In addition, we are permitted to borrow, subject to certain conditions (including limitations in the Consultant Agreement), up to $150.0 million of uncommitted incremental term loans under our renewed senior secured credit facilities from time to time. We are permitted to borrow significant additional indebtedness, including senior indebtedness, in the future under the terms of the indentures governing the notes and our renewed senior secured credit agreement. See “ Description of other debt ,” “ Description of the senior notes—Certain covenants ” and “ Description of the senior subordinated notes—Certain covenants .”

We may not be permitted to pay principal, premium, if any, interest or other amounts on account of the senior subordinated notes or the guarantees thereof in the event of a payment default or certain other defaults in respect of certain of our senior indebtedness, including debt under our renewed senior secured credit facilities and the senior notes, unless such senior indebtedness has been paid in full or the default has been cured or waived. In addition, in the event of certain other defaults with respect to such senior indebtedness, we may not be permitted to pay any amount on account of the senior subordinated notes or the guarantees thereof for a designated period of time. See “ Description of the senior subordinated notes—Ranking .”

Because of the subordination provisions in the senior subordinated notes and the guarantees thereof, in the event of a bankruptcy, liquidation, reorganization or similar proceeding relating to us, our assets will not be available to pay obligations under the senior subordinated notes or the guarantees until we have made all payments in cash on our senior indebtedness. Sufficient assets may not remain after all these payments of principal or interest when due. In addition, in the event of a bankruptcy, liquidation or reorganization or similar proceeding relating to us, holders of the senior subordinated notes will participate with trade creditors and all other holders of our senior subordinated indebtedness, as the case may be, in the assets (if any) remaining after we have paid all of the senior indebtedness. However, because the indenture governing the senior subordinated notes requires that amounts otherwise payable to holders of the senior subordinated notes in a bankruptcy or similar proceeding be paid to holders of senior indebtedness instead, holders of senior subordinated notes may receive less, ratably, than holders of trade payables or other unsecured, unsubordinated creditors in any such proceeding. In any of these cases, we may not have sufficient funds to pay all creditors, and holders of the senior subordinated notes may receive less, ratably, than the holders of senior indebtedness. See “ Description of the senior subordinated notes—Ranking .”

Our ability to refinance our debt obligations, including the notes, could be adversely impacted by the Consultant’s right, starting in June 2017, to terminate the periodic payments under the Consultant Agreement and receive instead one payment equal to the fair market value of the Consultant’s interest in the Orlando parks and any comparable projects or, under certain circumstances, an alternative one-time payment.

We have a Consultant Agreement with a Consultant under which we pay a fee for consulting services and exclusivity equal to a percentage of our gross revenues from the attractions and certain other facilities owned or operated, in whole or in part, by us. The Consultant Agreement also provides that the Consultant is entitled to a

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fee based on a percentage of gross revenues of comparable projects, which are gated motion picture and television themed attractions owned or operated, in whole or in part, by us, or any of our partners or any of their affiliates, other than in Universal City, California. At present, the only operating theme park that is a comparable project is Universal Studios Japan in Osaka, Japan, which is not owned by us. The amount of fees paid by Universal Studios Japan to the Consultant have historically been between 70% and 80% of the fees paid to the Consultant by us. Fees with respect to Universal Studios Japan are paid by an affiliate of Vivendi Universal Entertainment and are not paid by UCDP. In addition to the existing comparable park, there are four contemplated comparable parks which are vested immediately for purposes of the consulting fee payments and it is possible that other comparable projects will be created in the future that would fall under the Consultant Agreement. In fiscal years 2008, 2007 and 2006, the fees paid by us to the Consultant under the Consultant Agreement were approximately $19.6 million, $19.6 million and $18.1 million, respectively. The Consultant has a lien on certain of our assets to secure his interests under the Consultant Agreement, including a mortgage on our real property up to $400.0 million, and the notes are effectively subordinated to his interests to the extent of the value of those assets. The lien securing the Consultant’s interest is junior to the lien securing our renewed senior secured credit facilities. Under the terms of the notes and our renewed senior secured credit agreement, the lien securing our obligations under the Consultant Agreement is a permitted lien. The Consultant Agreement does not have an expiration date, but starting in June 2017, the Consultant has the right upon 90 days’ notice to terminate the periodic payments under the Consultant Agreement and receive instead one cash payment equal to the fair market value of the Consultant’s interest in the ongoing revenue streams or, under certain circumstances, an alternative one-time payment, in each case with respect to the Orlando parks and any comparable projects that have been opened at that time for at least one year, which amounts could be significant. The amount of such cash payment would be determined in a manner that includes fees paid with respect to Universal Studios Japan and any other comparable parks that may open. Because this could increase the size of such cash payment even if a portion of such cash payment is not our responsibility in the first instance, it could make the financing of any such payment more difficult. In addition, the Consultant Agreement limits the amount of secured debt we may incur to the greater of $975.0 million and 3.75 times our EBITDA (as defined in our renewed senior secured credit agreement). Accordingly, we may not be able to refinance our existing debt on a secured basis or make the payment to the Consultant. This could make any financing in the future more difficult. We cannot predict whether the Consultant will exercise his payment option or the timing of any such decision. Due to uncertainties in the amount and timing of such cash payment and our ability to make such a cash payment and the limits on our ability to incur additional senior secured debt, our ability to refinance our renewed senior secured credit agreement and the notes, and our ability to incur future indebtedness, is likely to be adversely impacted by this right of the Consultant. For more information about the Consultant Agreement, see “ Certain relationships and related transactions, and director independence—Consultant agreement. ”

We may not have the ability to raise the funds necessary to finance any change of control offer required by the indentures governing the notes.

Pursuant to the indentures governing the notes, we may need to refinance large amounts of our debt, including the notes and borrowings under our renewed senior secured credit agreement, upon the incurrence of specific kinds of change of control events. The indentures define a change of control as either (1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of our assets and the assets of our subsidiaries, taken as a whole (other than to Blackstone, Vivendi Universal Entertainment or an entity with more than 50% of its capital stock owned collectively by Blackstone or Vivendi Universal Entertainment, each of which is referred to as a “Permitted Holder”), or (2) when the issuers of the notes become aware of an acquisition of more than 50% of the total voting power or economic interests in us by someone other than a Permitted Holder. If a change of control occurs, we must offer to purchase all of the notes then outstanding for a price equal to 101% of the principal amount of the notes, plus any accrued and unpaid interest. We cannot assure you that there will be sufficient funds available for us to make any required repurchases of the notes upon a change of control. In addition, our renewed senior secured credit agreement may prohibit us from repurchasing the notes until we first repay outstanding indebtedness under our renewed senior secured credit agreement in full. If we fail to repurchase the notes in that circumstance, we will go into default under the indentures governing the notes and

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under our renewed senior secured credit agreement. Any future debt that we incur may also contain restrictions on repayment upon a change of control. If any change of control occurs, we cannot assure you that we will have sufficient funds to satisfy all of our debt obligations.

Our debt agreements and the Consultant Agreement contain restrictions that limit our flexibility in operating the business.

Our renewed senior secured credit agreement and the indentures governing the notes contain a number of significant covenants that, among other things, restrict our ability to:

These restrictive covenants may not allow us the flexibility we need to operate the business in an effective and efficient manner and may prevent us from taking advantage of strategic opportunities that would benefit our business or addressing the effects of the global recession and liquidity crisis in the financial markets.

In addition, we will be required under our renewed senior secured credit agreement to satisfy specified financial ratios and tests. Our ability to comply with those financial ratios and tests may be affected by events beyond our control, including the current recessionary economic environment, and we may not be able to meet those ratios and tests. A breach of any of those covenants could result in a default under our renewed senior secured credit agreement and the lenders could elect to declare all amounts borrowed under our renewed senior secured credit agreement, together with accrued interest, to be immediately due and payable and could proceed against the collateral securing that indebtedness. Substantially all of our assets are pledged as collateral pursuant to the terms of our renewed senior secured credit agreement, and certain of our assets are subject to the Consultant’s second-priority lien. If any of our indebtedness were to be accelerated, our consolidated assets may not be sufficient to repay in full that indebtedness. In addition, as described above, the terms of the Consultant Agreement limit our ability to incur existing or subsequent senior secured debt. See “ Certain relationships and related transactions, and director independence—Consultant agreement. ” In light of the current global economic recession and liquidity crisis in the financial markets, we would have difficulty finding alternative financing.

Current turmoil in the credit and capital markets could impede our ability to refinance our long-term debt or prevent us from obtaining additional funds required to effectively operate our business, including funds from our renewed revolving credit facility.

Throughout 2008 and 2009, U.S. and global credit markets experienced significant disruption, making it increasingly difficult for many businesses to obtain financing on acceptable or previously customary terms. Additionally, the volatility in equity markets due to rapid and wide fluctuations in value has resulted in a reduction of public offerings of equity securities. If these conditions persist or worsen, our borrowing costs may increase, and it may be more difficult to secure funding for our operations, including capital expenditures for theme park attractions. These risks could also impact our long-term debt ratings which would likely increase our cost of borrowing and/or make it more difficult for us to obtain funding. These factors are particularly important given our substantial long-term debt balance as of September 27, 2009 of $1,525.0 million, on a pro forma basis after giving effect to the Transactions (based on gross maturities). Additionally, we can not assure you that we will be able to draw upon our renewed revolving credit facility if needed.

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Use of proceeds

The exchange offer is intended to satisfy our obligations under the Senior Registration Rights Agreement to use our reasonable best efforts to exchange the senior original notes for the senior exchange notes in a transaction registered with the Securities and Exchange Commission, and our obligations under the Senior Subordinated Registration Rights Agreement to use our reasonable best efforts to exchange the senior subordinated original notes for the senior subordinated exchange notes in a transaction registered with the Securities and Exchange Commission. We will not receive any cash proceeds from the issuance of the exchange notes or the exchange offer.

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