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Bluegreen Vacations Holding • Bluegreen Vacations • Travel+Leisure • Ilg • Marriott Vacations WorldwideRisks
- Risks Related to Our Industry
- Macroeconomic and other factors beyond our control can adversely affect and reduce demand for our products and services.
- Contraction in the global economy or low levels of economic growth could adversely affect our revenues and profitability as well as limit or slow our future growth.
- We are subject to business, financial and operating risks inherent to the timeshare and hospitality industry, any of which could reduce our revenues and limit opportunities for growth.
- We operate in a highly competitive industry.
- Any pandemic, epidemic and related events may have a material adverse effect on our business, financial condition and results of operations.
- Risks Related to the Operation of Our Business
- We do not own the Hilton brands and our business will be materially harmed if we breach our license agreement with Hilton or it is terminated.
- We will rely on Hilton to consent to our use of its trademarks at new properties we manage in the future.
- Our business depends on the quality and reputation of the Hilton brands and affiliation with the Hilton Honors loyalty program.
- We rely on several critical marketing programs and activities to generate tour flow and contract sales and increase our revenues.
- We may experience financial and operational risks in connection with acquisitions and other opportunistic business ventures.
- Partnership or joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on partners’ or co-venturers’ financial condition, disputes between us and our partners or co-venturers and our obligation to guaranty certain obligations beyond the amount of our investments.
- Our dependence on development activities exposes us to project cost and completion risks.
- We manage a concentration of properties in particular geographic areas, which exposes our business to the effects of regional events and occurrences.
- Our current operations and future expansion outside of the United States make us susceptible to the risks of doing business internationally, which could lower our revenues, increase our costs, reduce our profits or disrupt our business.
- We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel, hire qualified personnel, or maintain our corporate culture, we may not be able to grow effectively.
- Third-party reservation channels may negatively affect our bookings for room rental revenues.
- Changes to estimates or projections used to assess the fair value of our assets, or operating results that are lower than our current estimates at certain locations, may cause us to incur impairment losses that could adversely affect our results of operations.
- Our insurance policies may not cover all potential losses.
- We have identified a material weakness in our internal control over financial reporting. If we are unable to remediate this material weakness, experience additional material weaknesses, or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately or timely report our financial results, in which case our business may be harmed, our stock price could be adversely affected, and we may otherwise experience other adverse consequences.
- Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures, including as a result of the material weakness identified by management.
- Risks Related to the Sale of VOIs
- A decline in developed or acquired VOI inventory or our failure to enter into and maintain fee-for-service agreements may have an adverse effect on our business or results of operations.
- Our ability to source VOI inventory and finance VOI sales may be impaired if we or the third-party developers with whom we do business are unable to access capital when necessary.
- The sale of VOIs in the secondary market by existing members could cause our sales revenues and profits to decline.
- If the default rates or other credit metrics underlying our timeshare financing receivables deteriorate, our timeshare financing receivable securitization program could be adversely affected.
- The expiration, termination or renegotiation of our management agreements could adversely affect our cash flows, revenues and profits.
- Increased activity by third-party exit companies' owners may adversely impact our business.
- Disagreements with VOI owners, HOAs and other third parties may result in litigation and/or loss of management contracts.
- Failure of HOA boards to levy sufficient fees, or the failure of members to pay those fees, could lead to inadequate funds to maintain or improve the properties we manage.
- If maintenance fees at our resorts are required to be increased, our product could become less attractive, and our business could be harmed.
- Risks Related to Technology and Cybersecurity
- A failure to keep pace with developments in technology could impair our operations, competitive position or reputation.
- Social media influences how consumers search for vacation information and make decisions to purchase vacation-related products and services. Lack of awareness or understanding of and the failure to effectively manage, and the costs associated with our management of social media content regarding our products and services could have a material adverse effect on VOI sales, revenues and our operating results.
- Our increasing reliance on information technology and other systems subjects us to risks associated with cybersecurity. Cyber-attacks or our failure to maintain the security and integrity of company, employee, associate, customer or third-party data could have a disruptive effect on our business and adversely affect our reputation and financial performance.
- Risks Related to Legal and Regulatory Requirements
- Our business is regulated under a wide variety of laws, regulations and policies in the United States and abroad, and failure to comply with these regulations could adversely affect our business.
- Changes in privacy law could adversely affect our ability to market our products effectively.
- United States or foreign environmental laws and regulations may cause us to incur substantial costs or subject us to potential liabilities.
- Changes in U.S. federal, state and local or foreign tax law, interpretations of existing tax law, or adverse determinations by tax authorities, could increase our tax burden or otherwise adversely affect our financial condition or results of operations.
- Failure to comply with laws and regulations applicable to our international operations may increase costs, reduce profits, limit growth or subject us to broader liability.
- Risks Related to Our Indebtedness
- Our substantial indebtedness and other contractual obligations could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and our ability to pay our debts, and could divert our cash flow from operations for debt payments.
- Certain of our debt agreements and instruments impose significant operating and financial restrictions on us, our restricted subsidiaries and the guarantors of our indebtedness, which may prevent us from capitalizing on business opportunities.
- Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase.
- Servicing our indebtedness requires a significant amount of cash. Our ability to generate sufficient cash depends on many factors, some of which are not within our control.
- Our failure to comply with the agreements relating to our outstanding indebtedness could result in an event of default that could materially and adversely affect our results of operations and our financial condition.
- Repayment of our debt is dependent on cash flow generated by our subsidiaries, which may be subject to limitations beyond our control.
- Despite our current level of indebtedness, we may be able to incur substantially more debt and enter into other transactions, which could further exacerbate the risks to our financial condition described above.
- We may not be able to integrate the acquired Diamond business successfully.
- We may be subject to complaints, litigation or reputational harm due to dissatisfaction with, or concerns related to, the Diamond Acquisition from our and former Diamond owners.
- We may be unable to realize anticipated cost savings, and we expect to incur substantial expenses related to the Bluegreen Acquisition, which could have a material adverse effect on our business, financial condition and results of operations.
- We may not be able to integrate successfully and many of the anticipated benefits of combining us and Bluegreen may not be realized.
- Our ability to integrate the Bluegreen business depends on our ability to obtain certain concessions from a third party to allow us to rebrand the Bluegreen properties and sales centers.
- Our ability to integrate the Bluegreen business depends on our compliance with the Hilton license agreement, including the separate operations provisions and certain prohibitions on doing business with competitors.
- We incurred substantial transaction costs in connection with the Bluegreen Acquisition.
- We and Bluegreen may be subject to complaints, litigation or reputational harm due to dissatisfaction with, or concerns related to, the acquisition from our current owners.
- Our future results will suffer if we do not effectively manage our expanded operations and integrate Bluegreen.
- We may not be able to retain our and/or Bluegreen personnel successfully.
- Bluegreen may have liabilities that exceed our estimates, and any such liabilities could adversely affect our financial results and condition.
- Interests in Bluegreen’s resorts are offered through a trust system, which is subject to a number of regulatory and other requirements.
- Risks Related to the Spin-Off
- We may be responsible for U.S. federal income tax liabilities that relate to the spin-off.
- The spin-off and related transactions may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal distribution requirements.
- We could be required to assume responsibility for obligations allocated to Hilton or Park under the Distribution Agreement.
- In connection with the spin-offs, we may be required to indemnify Hilton and Park, and the indemnities of Hilton and Park of us may not be sufficient to insure us against the full amount of the liabilities assumed by Hilton and Park, and Hilton and Park may be unable to satisfy their indemnification obligations to us in the future.
- Risks Related to Ownership of Our Common Stock
- Our board of directors may change significant corporate policies without stockholder approval.
- Consent requirements in our license agreement with Hilton and other requirements in certain of our other material agreements may have the effect of deterring a potential takeover transaction that otherwise could be in the best interests of our stockholders.
- The market price and trading volume of our common stock may fluctuate widely.
- Future issuances of common stock by us may cause the market price of our common stock to decline.
- We cannot guarantee that we will repurchase our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term shareholder value. Share repurchases could also increase the volatility of the price of our common stock and diminish our cash reserves.
- We have no current plans to pay cash dividends on our common stock, and our indebtedness could limit our ability to pay dividends in the future.
Management Discussion
- (1)Refer to Note 22: Business Segments in our consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for details on the intersegment eliminations.
- (1)NM - fluctuation in terms of percentage change is not meaningful.
- (2)For the years ended December 31, 2023, 2022 and 2021, this amount includes costs associated with restructuring, one-time charges, other non-cash items, and amortization of fair value premiums and discounts resulting from purchase accounting.