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• Material harm to our business if we breach our license agreement with Hilton and Hilton exercises any of its remedies thereunder, which may include the loss of certain rights (such as exclusivity in the timeshare business) that we have or the termination of the license agreement;
−Removed: • Our ability to use the Hilton brands and trademarks and rebrand the acquired Diamond and Bluegreen business and properties, and any potential consequences under the license agreement if we fail to do so;
+Added: • Our ability to use the Hilton brands and trademarks and rebrand the Diamond and Bluegreen businesses and properties, and any potential consequences under the license agreement if we fail to do so;
• The quality and reputation of the Hilton brands and affiliation with the Hilton Honors loyalty program;
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• Our dependence on development activities and risks related to our real estate investments;
−Removed: • The geographic concentration of properties we manage;
• Our current operations and future expansion outside of the United States;
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• Our ability, or the ability of our subsidiaries, to generate sufficient cash to meet our needs and service our indebtedness;
−Removed: • Potential liabilities related to our spin-off from Hilton, including U.S.
−Removed: federal income tax liabilities, liabilities arising out of state and federal fraudulent conveyance laws and the possible assumption of responsibilities for obligations allocated to Hilton or Park;
−Removed: • The sufficiency of any indemnity Hilton or Park is required to provide us and the amount of any indemnity we may be required to provide Hilton or Park related to the period prior to the spin-off;
• The ability of our board of directors to change corporate policies without stockholder approval;
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• Our ability to effectively manage our expanded operations resulting from both the Diamond Acquisition and the Bluegreen Acquisition, including the respective trust systems associated with such businesses;
+Added: • Potential liabilities related to our spin-off from Hilton, including U.S.
+Added: federal income tax liabilities, liabilities arising out of state and federal fraudulent conveyance laws and the possible assumption of responsibilities for obligations allocated to Hilton or Park;
+Added: • The sufficiency of any indemnity Hilton or Park is required to provide us and the amount of any indemnity we may be required to provide Hilton or Park related to the period prior to the spin-off.
The foregoing is only a summary of our risks.
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These factors include, but are not limited to:
−Removed: • changes in general economic conditions, including low consumer confidence, high unemployment levels and depressed real estate prices resulting from the severity and duration of any downturn in the U.S.
+Added: • changes in general economic conditions, including low consumer confidence, high unemployment levels, inflation, rising interest rates, and depressed real estate prices resulting from the severity and duration of any downturn in the U.S.
or global economy;
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• statements, actions or interventions by governmental officials related to travel and the resulting negative public perception of such travel;
−Removed: • conditions that negatively shape public perception of travel, including travel-related accidents and outbreaks of pandemic or contagious diseases, such as COVID-19, Ebola, avian flu, severe acute respiratory syndrome (SARS), H1N1 (swine flu) and the Zika virus;
+Added: • conditions that negatively shape public perception of travel, including travel-related accidents and outbreaks of pandemic or contagious diseases, such as coronavirus, Ebola, avian flu, severe acute respiratory syndrome (SARS), H1N1 (swine flu) and the Zika virus;
• cyber-attacks;
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• organized labor activities, which could cause a diversion of business from resorts involved in labor negotiations and loss of business generally for the resorts we manage as a result of certain labor tactics.
−Removed: Any one or more of these factors can adversely affect, and from time to time have adversely affected, individual resorts, particular regions and our business, financial condition and results of operations.
+Added: Any one or more of these factors can adversely affect, and from time to time have adversely affected, individual resorts and particular regions.
+Added: With some of our properties being concentrated in certain geographic areas including Arizona, California, Florida, Hawaii, Nevada, South Carolina, and Virginia in the United States and in Europe, we are, therefore, particularly susceptible to adverse developments in those areas.
+Added: All of the foregoing factors could have an adverse effect on our business, financial condition and results of operations.
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.
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Decreased global or regional demand for products and services provided by the timeshare industry can be especially pronounced during periods of economic contraction or low levels of economic growth, and the recovery period in our industry may lag overall economic improvement.
+Added: For example, inflation could have an indirect adverse impact on our business by making travel more expensive for consumers and reducing consumer discretionary income.
Declines in demand for our products and services due to general economic conditions could negatively affect our business by decreasing the revenues we are able to generate from our VOI sales, financing activities and Club and resort operations.
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We also compete with other timeshare developers for sales of VOIs based principally on location, quality of accommodations, price, service levels and amenities, financing terms, quality of service, terms of property use, reservation systems, flexibility for VOI owners to exchange into time at other timeshare properties, or other travel rewards, including access to hotel loyalty programs, as well as brand name recognition and reputation.
−Removed: A number of our competitors are significantly larger than we are and have potentially greater access to capital resources and broader marketing, sales and distribution capabilities.
−Removed: We also compete with numerous other smaller owners and operators of timeshare resorts, as well as home and apartment sharing services that market available privately owned residential properties that can be rented on a nightly, weekly or monthly basis.
−Removed: In addition, we are in competition with national and independent timeshare resale companies and members reselling existing VOIs on the secondary market, which could reduce demand or prices for sales of new VOIs.
+Added: Our competitors include numerous other smaller owners and operators of timeshare resorts, as well as home and apartment sharing services that market available privately owned residential properties that can be rented on a nightly, weekly or monthly basis.
+Added: In addition, we are in competition with national and independent timeshare resale companies and members reselling existing VOIs on the
+Added: secondary market, which could reduce demand or prices for sales of new VOIs.
We also compete with other timeshare management companies in the management of resorts on behalf of owners on the basis of quality, cost, types of services offered and relationship.
We compete with other timeshare companies for off-site sales centers, through which we market our products to potential members, including in locations like high-traffic shopping centers and tourist attractions in leisure destinations.
−Removed: We compete for property acquisitions and partnerships with entities that have similar investment objectives as we do.
+Added: Finally, we also compete for property acquisitions (either for development or existing VOI inventory) and partnerships with entities that have similar investment objectives as we do.
This competition could limit the number of, or negatively affect the cost of, suitable investment opportunities available to us.
−Removed: Recent and potential future consolidation in the highly fragmented timeshare industry may increase competition.
−Removed: Consolidation may create competitors that enjoy significant advantages resulting from, among other things, a lower cost of, and greater access to, capital and enhanced operating efficiencies.
Our ability to remain competitive and to attract and retain members depends on our success in distinguishing the quality and value of our products and services from those offered by others.
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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.
−Removed: Following the spin-off, Hilton retained ownership of the Hilton-branded trademarks, tradenames and certain related intellectual property used in the operation of our business.
−Removed: We entered into a license agreement with Hilton granting us the right to use the Hilton-branded trademarks, trade names and related intellectual property in our business for the term of the agreement.
−Removed: The license agreement was amended and restated in connection with the Diamond Acquisition and the Bluegreen Acquisition to facilitate our integration of the Diamond and Bluegreen businesses and create a license fee structure related to the integrations.
−Removed: If we breach our obligations under the license agreement, Hilton may be entitled to terminate the license agreement or terminate our rights to use the Hilton brands and other Hilton intellectual property at properties that do not meet applicable standards and policies, or to exercise other remedies.
+Added: We are party to a license agreement with Hilton granting us the right to use the Hilton-branded trademarks, trade names and related intellectual property in our business for the term of the license agreement.
+Added: The license agreement was amended and restated in connection with the Diamond Acquisition and the Bluegreen Acquisition to facilitate our integration of the Diamond and Bluegreen businesses and create a license fee structure for the integrations.
+Added: If we breach our obligations under the license agreement, Hilton may be entitled to terminate the license agreement, terminate our rights to use the Hilton brands and other Hilton intellectual property at properties that do not meet applicable standards and policies, terminate the noncompetition that generally prohibits Hilton from using its mark to engage in the timeshare business, or to exercise other remedies.
Pursuant to the license agreement, Hilton would be the sole owner of certain licensed marks related to any new brands associated with the Diamond portfolio that we developed or may develop.
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For example, if we are not able to rely on the strength of the Hilton brands to attract prospective members and guests in the marketplace, our revenue and profits would decline, and our marketing and sales expenses would increase.
−Removed: If we are not able to use Hilton’s marketing databases and corporate-level advertising channels to reach potential members and guests, including Hilton’s internet address as a channel through which to market available inventory, our member growth would be
−Removed: adversely affected and our revenue would materially decline, and it is unlikely that we would be able to replace the revenue associated with those channels.
+Added: If we are not able to use Hilton’s marketing databases and corporate-level advertising channels to reach potential members and guests, including Hilton’s internet address as a channel through which to market available inventory, our member growth would be adversely affected and our revenue would materially decline, and it is unlikely that we would be able to replace the revenue associated with those channels.
Even if the license agreement remains in effect, the termination or restriction of our rights to use any branded trademarks, trade names and related intellectual property licensed to us by Hilton at properties that fail to meet applicable standards and policies, or any deterioration of quality or reputation of the Hilton brands (even deterioration not leading to termination of our rights under the license agreement or not caused by us), could also harm our reputation and impair our ability to market and sell our products, which could materially harm our business.
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This would adversely affect our ability to sell our products, offer the flexibility associated with our Club membership and sustain our collection performance on our timeshare financing receivables portfolio.
−Removed: Finally, the license agreement imposes a number of restrictions or prohibitions on our business and operations, and our ability to engage in a number of transactions, including, without limitations, acquiring or being acquired by another entity, and engaging in any lodging business or otherwise competing with Hilton, in each case without Hilton’s consent.
+Added: Finally, the license agreement imposes a number of restrictions or prohibitions on our business and operations, and our ability to engage in a number of transactions, including, without limitations, acquiring or being acquired by another entity, engaging in any lodging business or otherwise competing with Hilton, and entering into or amending in any manner certain types of marketing agreements, including with Hilton’s competitors (such as Choice), in each case without Hilton’s consent.
Any noncompliance with any of these provisions may result in the termination of the license agreement, either automatically or at Hilton’s election.
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We rely on several critical marketing programs and activities to generate tour flow and contract sales and increase our revenues.
−Removed: We rely on several critical marketing activities to engage with potential VOI purchasers for generating tour flow, contract sales and financing fees, resort management and other revenues.
−Removed: These include targeted direct marketing, transfers of calls by Hilton of its customers to us pursuant to an agreement, and the successful implementation of our digital and technology-based marketing strategy.
−Removed: Any significant changes to one or more factors that adversely affect such marketing activities, such as changes in consumer behavior and preference for vacations or a decrease in the number of calls being transferred from Hilton due to increasing consumer reliance on digital tools, will adversely impact our revenue.
+Added: We rely on several critical marketing activities and arrangements to engage with potential VOI purchasers for generating tour flow, contract sales and financing fees, resort management and other revenues.
+Added: These include targeted direct marketing, transfers of calls by Hilton of its customers to us pursuant to Marketing Services Agreement, our marketing and joint venture agreements with Bass Pro, our strategic and related agreements with Choice, the successful implementation of our digital and technology-based marketing strategy and the integration of the marketing technologies of Bluegreen and Diamond with our strategy.
+Added: Any significant changes to one or more factors that adversely affect such marketing activities and arrangements will adversely impact our revenue and growth strategy.
We may experience financial and operational risks in connection with acquisitions and other opportunistic business ventures.
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We have co-invested with third parties and we may in the future co-invest with other third parties through partnerships, joint ventures or other entities, acquiring non-controlling interests in, or sharing responsibility for managing the affairs, of a timeshare property, partnership, joint venture or other entity.
−Removed: These include our Elara joint venture with
−Removed: Blackstone and the Bluegreen-Bass Pro joint venture that we assumed as part of the Bluegreen Acquisition.
+Added: These include our Elara joint venture with Blackstone and our joint venture with Bass Pro that we assumed as part of the Bluegreen Acquisition.
Consequently, with respect to any such third-party arrangements, we would not be in a position to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity, and may, under certain circumstances, be exposed to risks not present if a third party were not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their share of required capital contribution.
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Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers from focusing their time and effort on our business.
−Removed: Consequently, actions by or disputes with partners or co-
−Removed: venturers might result in subjecting assets owned by the partnership or joint venture, and to the extent of any guarantee our assets, to additional risk.
+Added: Consequently, actions by or disputes with partners or co-venturers might result in subjecting assets owned by the partnership or joint venture, and to the extent of any guarantee our assets, to additional risk.
In addition, we may, in certain circumstances, be liable for the actions of our third-party partners or co-venturers.
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However, when interest rates increase the cost of acquiring, developing, expanding or renovating real property increases, and real property values may decrease as the number of potential buyers decrease.
−Removed: Similarly, as financing becomes less available, it becomes more difficult both to acquire and develop real property.
Many costs of real estate investments, such as real estate taxes, insurance premiums, maintenance costs and certain operating costs, are generally more fixed than variable, and as a result are not reduced even when a property is not fully sold or occupied.
If any of these risks were realized, they could have a material adverse effect on our results of operations or financial condition.
−Removed: We manage a concentration of properties in particular geographic areas, which exposes our business to the effects of regional events and occurrences.
−Removed: Our properties are concentrated in certain geographic areas including Florida, Europe, Hawaii, California, Arizona, Nevada, and Virginia and are, therefore, particularly susceptible to adverse developments in those areas.
−Removed: These economic developments include regional economic downturns, significant increases in the number of our competitors’ products in these markets, and potentially higher labor, real estate, tax or other costs in the geographic markets in which we are concentrated.
−Removed: In addition, our properties are subject to the effects of adverse acts of natural or man-made disasters, including earthquakes, windstorms, tornadoes, hurricanes, typhoons, tsunamis, volcanic eruptions, floods, drought, climate changes, fires, oil spills and nuclear incidents.
−Removed: Extreme weather events and adverse weather conditions, including hurricanes, flooding and forest fires, that impact the areas in which our properties are concentrated may increase in
−Removed: frequency and severity as a result of climate change.
−Removed: Depending on the severity of these disasters, the damage could require closure of all or substantially all of these properties in one or more markets for a period of time while the necessary repairs and renovations, as applicable, are undertaken.
−Removed: In addition, we cannot guarantee that the amount of insurance maintained for these properties from time to time would entirely cover damages caused by any such event.
−Removed: Further, actual or threatened war, political conditions or civil unrest, violence or terrorist activities or threats and heightened travel security measures instituted in response to these events, could also interrupt or deter vacation plans to our key markets.
−Removed: As a result of this geographic concentration of properties, we face a greater risk of a negative effect on our revenues in the event these areas are more severely and more frequently affected by adverse economic and competitive conditions, extreme weather, man-made disasters, and political and civil unrest.
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.
−Removed: We currently have timeshare properties located in the United States, Europe, Mexico, the Caribbean, Canada and Asia.
+Added: We currently have timeshare properties located internationally in Europe, Mexico, the Caribbean, Canada and Asia.
We also market our products and services in the Asia Pacific region, primarily in Japan and South Korea.
−Removed: In addition, as part of our business strategy, we intend to continue the expansion of our operations in Japan, including by developing property there and selling VOIs at properties located in Japan, as well as explore further expansion opportunities in other countries located in the Asia Pacific region, Mexico, Europe and the Caribbean.
+Added: In addition, as part of our business strategy, we intend to continue the expansion of our operations in Japan, including by continuing to market and sell VOIs at Sesoko and Odawara resorts and continuing to opportunistically develop additional property or acquire additional inventory, as well as explore further expansion opportunities in other countries located in the Asia Pacific region, Mexico, Europe and the Caribbean.
Such activities may not be limited only to marketing efforts for existing international and U.S.
properties and products in other countries, but may also include acquiring, developing, managing, marketing, offering and/or financing timeshare properties and VOI related products and services in such countries.
−Removed: Current and future international operations expose us to a number of additional challenges and risks that may not be inherent in operating solely in the U.S., including, for example, the following:
−Removed: • rapid changes in governmental, economic, legislative or political policy;
−Removed: • political or civil unrest, acts of terrorism or the threat of international boycotts or U.S.
−Removed: anti-boycott legislation;
−Removed: • negative impact on governmental relationships between those countries in which we currently operate or have future expansion plans, on one hand, and the U.S., on the other hand, which may result in undesirable trade, travel or similar regulations, thereby negatively affecting the tourism industry generally, and the timeshare and leisure industry specifically;
−Removed: • increases in anti-American sentiment and the identification of the Hilton brands as American brands;
−Removed: • recessionary trends or economic instability in international markets;
−Removed: • changes in foreign currency exchange rates or currency restructurings and hyperinflation or deflation in the countries in which we operate;
−Removed: • the effect of disruptions caused by severe weather, natural disasters, outbreaks of disease or other events that make travel to a particular region less attractive or more difficult;
−Removed: • the presence and acceptance of varying levels of business corruption in international markets and the effect of various anti-corruption and other laws;
−Removed: • the imposition of restrictions on currency conversion or the transfer of funds;
−Removed: • the ability to comply with or effect of complying with complex and changing laws, regulations and policies of foreign governments that may affect investments or operations, including foreign ownership restrictions, import and export controls, tariffs, embargoes, increases in taxes paid and other changes in applicable tax laws;
−Removed: • uncertain, unfamiliar and/or unpredictable regulatory environment that may adversely affect the acquisition, development, management, marketing, sales, financings, and related activities that affect the lodging, real estate, and travel industries, and, more specifically, to the timeshare industry, such as zoning laws, real estate development regulations, and consumer privacy;
−Removed: • exposure to litigation in foreign jurisdictions, including the expense and time necessary to litigate and the potential of adverse outcomes;
−Removed: • uncertainties as to local laws regarding, and enforcement of, contract and intellectual property rights;
−Removed: • forced nationalization of resort properties by local, state or national governments;
−Removed: • different social or cultural norms and practices that are not customary in the U.S.;
−Removed: • the difficulties involved in managing an organization doing business in different countries.
−Removed: These and other factors may materially adversely affect our business generally, future expansion plans, revenues from international operations, and costs and profits, as well as our financial condition.
−Removed: Our acquisition of Diamond has expanded our operations to a number of jurisdictions in which we had not previously operated and subjected us to a number of additional legal considerations.
+Added: Current and future international operations expose us to a number of additional challenges and risks are inherent in operating in countries other than the United States, such as:
+Added: • compliance with laws of both United States and non-U.S.
+Added: jurisdictions, including foreign ownership restrictions, import and export controls, tariffs, embargoes and changes in applicable tax law, and other laws affecting our acquisition, development, management, marketing, sales, financings, and related activities;
+Added: • political or civil unrest, acts of terrorism, the threat of international boycotts or anti-U.S.
+Added: legislation or sentiment and the identification of the Hilton brands as U.S.
+Added: • the negative impact of relationships between governments in those countries and the United States, which may result in or from undesirable trade, tariff, travel or other policies and regulations (including pursuant to policies of the new U.S.
+Added: administration);
+Added: • local economic risks in such countries including, but not limited to foreign currency exchange risks and the imposition of restrictions on currency conversion or the transfer of funds;
+Added: • employee matters, including laws and regulations related to employment;
+Added: • exposure to litigation in foreign jurisdictions and uncertainties as to local laws regarding, and enforcement of, contract and intellectual property rights;
+Added: • other difficulties involved in managing an organization doing business internationally.
Expansion of our international operations into other countries and territories may result in greater inefficiencies in navigating the risks of operating internationally and could result in greater effects on our business than would be experienced by a company with greater international experience.
−Removed: Similarly, we market our U.S.
−Removed: and international properties in Japan, have begun developing products and services in Japan, and intend to continue the expansion of our operations in Japan.
−Removed: The Japanese economy has in recent years experienced periods of fiscal and economic volatility, and we may be unable to properly predict the effect of such volatility, including the actions that may be taken by the Japanese government, in a way that fully mitigates the impact of such volatility on our marketing activities and businesses in Japan.
−Removed: In Mexico, the developer of certain acquired Diamond resorts has agreed to requirements that would consider themselves Mexican nationals with respect to certain properties.
−Removed: The developer also agreed to not invoke the protection of the government in matters relating to the property.
−Removed: Generally, rules in Mexico limit ownership of land near Mexico’s borders and beaches to Mexican citizens and companies, unless granted the right by the Mexican government.
−Removed: If the developer of the resorts in Mexico fails to comply with the agreement with the Mexican government, it would forfeit the land back to Mexico.
+Added: These and other factors may materially adversely affect our business generally, future expansion plans, revenues from international operations, and costs and profits, as well as our financial condition.
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.
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We believe that our corporate culture fosters innovation, creativity, and teamwork.
−Removed: As our organization grows, and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the beneficial aspects of our corporate culture and attract and retain employees.
+Added: As our organization continues to grow, including as a result of any recent acquisitions and any future strategic acquisitions, and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the beneficial aspects of our corporate culture and attract and retain employees.
This could negatively affect our future success.
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Further, we could remain obligated under guarantees or other financial obligations related to the property despite the loss of product inventory, and our members could be required to contribute toward deductibles to help cover losses.
−Removed: We have identified a material weakness in our internal control over financial reporting.
−Removed: 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.
−Removed: As previously disclosed, in connection with our year-end assessment of internal control over financial reporting, our management determined that, as of December 31, 2022, we had not maintained effective internal control over financial reporting due to a material weakness in internal control over financial reporting related to Diamond, which we acquired in August 2021.
+Added: We previously identified a material weakness in our internal control over financial reporting related to the prior two fiscal years.
+Added: If we 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.
+Added: As previously disclosed, in connection with our year-end assessment of internal control over financial reporting for each of fiscal year 2023 and 2022, our management determined that, as of December 31, 2023 and as of December 31, 2022, respectively, we had not maintained effective internal control over financial reporting due to a material weakness in internal control over financial reporting (a) arising out of ineffectively designed general information technology controls over user access for an IT application used to initiate revenue and inventory transactions, in the case of 2023, and (b) related to Diamond, in the case of 2022.
A material weakness is a deficiency, or a combination of deficiencies, in our internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: While such material weakness has been fully remediated, as discussed in Part II, Item 9A of this Annual Report on Form 10-K, in connection with our 2023 year-end assessment of internal control over financial reporting, our management determined that, as of December 31, 2023, we did not maintain effective internal control over financial reporting due to a material weakness in internal control over financial reporting arising out of ineffectively designed general information technology controls over user access for an IT application used to initiate revenue and inventory transactions.
−Removed: As a result, process-level automated controls and manual controls that are dependent on the completeness and accuracy of information derived from the affected IT application were also ineffective.
−Removed: We have commenced taking, and will continue to take, steps to enhance the risk assessment process and design and implementation of internal controls over financial reporting with respect to the user access matter, including enhancing and revising the design of our existing financial reporting and information technology controls and procedures, and incorporating additional controls and processes.
−Removed: However, the material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these
−Removed: controls are operating effectively.
−Removed: There can be no assurances that such remediation steps will be complete in our anticipated timeframe or if they will successfully remediate the material weakness identified on a timely basis.
−Removed: As a result, we may not be successful in making the improvements necessary to remediate such material weakness, be able to do so in a timely manner, or be able to identify and remediate additional control deficiencies, including material weaknesses, in the future.
−Removed: Furthermore, information technology and other controls and procedures can be extensive and numerous, and there can be no assurance that our management may not uncover other deficiencies in the future that could lead to additional material weaknesses.
+Added: While both material weaknesses have been fully remediated, there can be no assurances that other deficiencies may come to our management’s attention in the future that could lead to additional material weaknesses, particularly as we continue to integrate both the Diamond Acquisition and the Bluegreen Acquisition.
Any one or more of these outcomes could cause us to fail to meet our financial reporting obligations or result in material misstatements in our financial statements, which could adversely affect our business generally and lead to other adverse consequences, including, without limitation, the loss of investor confidence in us, reduction of our stock price, and exposure to litigation or government investigations and/or sanctions.
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Any future deterioration in the financial markets could preclude, limit, delay or increase the cost to us of future securitizations.
−Removed: Instability in the financial markets could also affect the timing and volume of any
−Removed: securitizations we undertake, as well as the financial terms of such securitizations.
+Added: Instability in the financial markets could also affect the timing and volume of any securitizations we undertake, as well as the financial terms of such securitizations.
Any indebtedness we incur, including indebtedness under these facilities, may adversely affect our ability to obtain any additional financing necessary to develop or acquire additional VOI inventory, to make other investments in our business, or to repurchase VOIs on the secondary market.
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The availability, terms and conditions and pricing of our bonding capacity is dependent on, among other things, continued financial strength and stability of the insurance company affiliates providing the bonding capacity, general availability of such capacity, and our corporate credit rating.
−Removed: If bonding capacity is unavailable, or alternatively, if the terms and conditions and pricing of such bonding capacity are unacceptable to us, our business could be negatively affected.
+Added: If bonding capacity is unavailable, or alternatively, if the
+Added: terms and conditions and pricing of such bonding capacity are unacceptable to us, our business could be negatively affected.
We have and will continue to enter into fee-for-service agreements with third-party developers to source inventory.
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In addition, if the secondary market for VOIs becomes more organized or financing for such resales becomes more available, our ability to sell VOIs could be adversely affected and/or the resulting availability of VOIs (particularly where the VOIs are available for sale at lower prices than the prices at which we would sell them) could adversely affect our sales revenues.
−Removed: Further, unlawful, fraudulent or deceptive third-party VOI resale or vacation package sales schemes could damage the reputation of the industry, our reputation and brand value, or affect our ability to collect management fees, which may adversely affect our revenues and results of operations.
+Added: Further, existing members have been, and we anticipate will continue to be, increasingly targeted in deceptive sales or resale schemes, including social engineering campaigns attempting to defraud existing members (for example, offering alluring “exit program” opportunities) which also could adversely affect our ability to sell VOIs and ultimately our sales revenues.
Development of a strong secondary market may also cause a decline in the volume of VOI inventory that we are able to repurchase, which could adversely affect our development margin, as we utilize this low-cost inventory source to supplement our inventory needs and help manage our cost of vacation ownership products.
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Asset-backed securities issued in our timeshare financing receivable securitization program could be downgraded by credit agencies in the future.
−Removed: If a downgrade occurs, our ability to complete other securitization transactions on acceptable terms or at all could be jeopardized, and we could be forced to rely on other potentially more expensive and less attractive funding sources, to the extent available.
+Added: If a downgrade occurs, our ability to complete other securitization transactions on acceptable terms or at all could be jeopardized, and we could be
+Added: forced to rely on other potentially more expensive and less attractive funding sources, to the extent available.
Similarly, if other operators of vacation ownership products were to experience significant financial difficulties, or if the timeshare industry as a whole were to contract, we could experience difficulty in securing funding on acceptable terms.
8 unchanged sentences
If a management agreement is terminated or not renewed on favorable terms, our cash flows, revenues and profits could be adversely affected.
+Added: Fraudulent or illegal activity related to the sale and purchase of timeshares may deter consumers from purchasing our product.
+Added: Unlawful, fraudulent or deceptive third-party VOI resale or vacation package sales schemes could damage the reputation of the timeshare industry, our reputation and brand value, or affect our ability to collect management fees.
+Added: For example, in June 2024 the FBI warned against illegal scams targeting timeshare owners, primarily older Americans, that resulted in the owners losing substantial amounts of money in some cases.
+Added: Such illegal activity could deter consumers from purchasing our timeshare products, which may adversely affect our revenues and results of operations.
Increased activity by third-party exit companies' owners may adversely impact our business.
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Owners of our VOIs and those we sell on behalf of third-party developers must pay maintenance fees levied by HOA boards, which include reserve amounts for capital replacements and refurbishments.
−Removed: These maintenance fees are used to maintain and refurbish the timeshare properties and to keep the properties in compliance with applicable Hilton standards and policies.
+Added: These maintenance fees are used to maintain and refurbish the timeshare properties and to keep the properties in compliance with applicable Hilton
+Added: standards and policies.
If HOA boards do not levy sufficient maintenance fees, including capital reserves required by applicable law, or fail to manage their reserves appropriately, or if members do not pay their maintenance fees, the timeshare properties could fall into disrepair and fail to comply with applicable standards and policies, and/or state regulators could impose requirements, obligations and penalties.
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Vacation decisions are influenced by both negative customer reviews, and by the lack of positive reviews.
+Added: The increase in social media based communities and platforms that criticize the timeshare industry has negatively impacted consumer perception of our products.
The proliferation and global reach of social media continue to expand rapidly and could cause us to suffer reputational harm.
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and we cannot guarantee that we will timely or adequately redress such instances.
+Added: In addition, it may be difficult for consumers to distinguish between content that is generated by customers with knowledge of our products and those who do not.
The failure to appreciate the importance of content on social media or failing to take action that generates positive content, minimizes negative content, and addresses areas of nonexistent content, could have a material adverse effect on VOI sales, revenues and our operating results.
4 unchanged sentences
There has been an increase in the number and sophistication of criminal cybersecurity attacks against companies where customer and other sensitive information has been compromised.
−Removed: Our information systems and records, including those we maintain with our service providers, have been, and likely will continue to be, subject to such cyber-attacks, which include efforts to hack or breach security measures in order to obtain or misuse information, phishing attempts, viruses or other malicious codes, “ransomware” or other malware.
+Added: Our information systems and records, including those we maintain with our service providers and vendors, have been, and likely will continue to be, subject to such cyber-attacks and technology disruptions, which include efforts to hack or breach security measures in order to obtain or misuse information or cause business disruption, including through, for example, phishing attempts, brute force attacks, denial of service attacks, exploiting software vulnerabilities (including “zero-day attacks”), viruses or other malicious code, “ransomware” or other malware, and supply chain attacks.
+Added: In addition, social engineering attacks, including through phishing, are becoming increasingly sophisticated due to a variety of factors, including threat actors’ use of artificial intelligence tools.
+Added: Third parties with whom we do business and to whom we may provide customer data have been the subject of cyber-attacks.
In addition, increasingly complex systems and software are subject to failure, operator error or malfeasance, or inadvertent releases of data that may materially impact our information systems and records.
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A significant theft, loss, loss of access to, or fraudulent use of customer, employee, or company data could adversely impact our reputation, and could result in significant remedial and other expenses, fines, and/or litigation.
−Removed: Breaches in the security of our information systems or those of our service providers or other disruptions in data services could lead to an interruption in the operation of our systems or require us to consider changes to our customer data or payment systems, resulting in operational inefficiencies, additional expense and a loss of profits.
+Added: Breaches in the security of our information systems or those of our service providers or vendors or other disruptions in data services could lead to an interruption in the operation of our systems or require us to consider changes to our customer data or payment systems, resulting in operational inefficiencies, additional expense and a loss of profits.
Our collection and use of customer information are governed by extensive and evolving privacy laws and regulations that are constantly evolving and may differ significantly depending on jurisdiction.
3 unchanged sentences
Any security incident, whether actual or perceived, could harm our reputation, erode customer confidence in the effectiveness of our data security measures, negatively impact our ability to attract or retain customers, or subject us to third-party lawsuits, regulatory fines or other action or liability, which could materially and adversely affect our business and operating results.
−Removed: Further, the SEC has recently enacted rules requiring public companies to disclose material cybersecurity incidents that they experience on a Current Report on Form 8-K within four business days of determining that a material cybersecurity incident has occurred and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy and governance.
−Removed: These new reporting requirements were effective for us as of December 18, 2023.
−Removed: If we fail to comply with these new requirements we could incur regulatory fines in addition to other adverse consequences to our reputation, business, financial condition and results of operations.
+Added: Further, effective December 18, 2023, the SEC requires public companies to disclose material cybersecurity incidents that they experience on a Current Report on Form 8-K within four business days of determining that a material cybersecurity incident has occurred and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy and governance.
+Added: If we fail to comply with these requirements we could incur regulatory fines in addition to other adverse consequences to our reputation, business, financial condition and results of operations.
Our business could be subject to stricter obligations and greater fines and private causes of action under the enactment of data privacy laws, including but not limited to, the European Union General Data Protection Regulation and the California Consumer Privacy Act.
3 unchanged sentences
We may be required to expend significant additional resources in the future to modify and enhance our protective measures.
−Removed: Although we carry cyber/privacy liability insurance that is designed to protect us against certain losses related to
−Removed: cybersecurity risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise in connection with cyber-attacks, security breaches, and other related breaches.
+Added: Although we carry cyber/privacy liability insurance that is designed to protect us against certain losses related to cybersecurity risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise in connection with cyber-attacks, security breaches, and other related breaches.
In addition, the third party service providers and partners on which we rely (including those that may be in possession of our sensitive information) face cybersecurity risks, some of which may be different than the risks we face, and we do not directly control any of such service providers’ information security operations, including the efforts that they may take to mitigate risks or the level of cyber/privacy liability insurance that they may carry.
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Failure to comply with current or future applicable laws, regulations and policies could have a material adverse effect on our business.
−Removed: For example, if we do not comply with applicable laws, regulations and policies, governmental authorities in the jurisdictions where the violations occurred may revoke or refuse to renew licenses or registrations necessary to operate our business.
+Added: For example, if we do not comply with applicable laws, regulations and policies, governmental authorities in the jurisdictions where the violations occurred may revoke or refuse to renew licenses or registrations
+Added: necessary to operate our business.
Failure to comply with applicable laws, regulations and policies could also render sales contracts for our products void or voidable, subject us to fines or other sanctions, and increase our exposure to litigation.
1 unchanged sentence
We rely on a variety of direct marketing techniques, including telemarketing, email and social media marketing and postal mailings, and we are subject to various laws and regulations in the United States and internationally that govern marketing and advertising practices.
−Removed: Adoption of new state or federal laws regulating marketing and solicitation, or international data protection laws that govern these activities, or changes to existing laws, such as the Telemarketing Sales Rule, the Telephone Consumer Protection Act, and the CAN-SPAM Act of 2003, could adversely affect current or planned marketing activities and cause us to change our marketing strategy.
+Added: Adoption of new state or federal and international laws regulating marketing and solicitation, or data protection laws that govern these activities (such as an increasing number of state laws that grant individuals certain rights such as the right to delete or restrict sharing of their personal information), or changes to existing laws, could adversely affect current or planned marketing activities and cause us to change our marketing strategy.
If this occurs, we may not be able to develop adequate alternative marketing strategies, which could affect the amount and timing of our VOI sales.
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We significantly increased our level of indebtedness in connection with financing the Diamond Acquisition and the Bluegreen Acquisition.
−Removed: We issued $850 million in aggregate principal amount of 5.000% senior notes due 2029 and $500 million in aggregate principal amount of 4.875% senior notes due 2031, and we borrowed term loans in an initial aggregate principal amount of $1.3 billion under a new senior secured term loan credit facility due
−Removed: to repay certain indebtedness of HGV and Diamond, as part of the Diamond Acquisition.
+Added: We issued $850 million in aggregate principal amount of 5.000% senior notes due 2029 and $500 million in aggregate principal amount of 4.875% senior notes due 2031, and we borrowed term loans in an initial aggregate principal amount of $1.3 billion under a new senior secured term loan credit facility due 2028 to repay certain indebtedness of HGV and Diamond, as part of the Diamond Acquisition.
Similarly, in connection with the Bluegreen Acquisition, we issued $900 million in aggregate principal amount of 6.625% senior notes due 2032 and borrowed term loans in an initial aggregate principal amount of $900 million due 2031.
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We primarily use interest rate swaps as part of our interest rate risk management strategy for our variable-rate debt.
−Removed: For more information on derivatives refer to Note 15:
+Added: For more information on derivatives see Note 15:
Debt & Non-recourse Debt of the financial statements.
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Each subsidiary is a distinct legal entity, and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries.
−Removed: While limitations on our subsidiaries restrict their ability to pay dividends or make other intercompany payments to us, these
−Removed: limitations are subject to certain qualifications and exceptions.
+Added: While limitations on our subsidiaries restrict their ability to pay dividends or make other intercompany payments to us, these limitations are subject to certain qualifications and exceptions.
In addition, certain of our subsidiaries are party to debt agreements that contain restrictions on their ability to pay dividends or make other intercompany payments to us and may in the future enter into agreements that include additional contractual restrictions on their ability to make any such payments to us.
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We may not be able to integrate the acquired Diamond business successfully.
−Removed: We continue to integrate the Diamond business from the August 2021 closing of the Diamond Acquisition.
−Removed: Despite our efforts, it is possible that the integration process could take longer than anticipated and/or could be more difficult than anticipated due to a number of reasons, including the lack of complementary products and resort offerings, delays or other challenges in converting the Diamond resorts into resorts that are suitable for HGV as part of our overall strategy and our rebranding plan, loss of valuable employees, disruption of each company’s ongoing businesses, processes and systems, inconsistencies in standards, controls, procedures, practices, policies and compensation arrangements between the two businesses, and differences in corporate cultures and philosophies, and other challenges that are inherent in such a complex integration of businesses.
+Added: We continue to integrate the Diamond business following the completion of the Diamond Acquisition in August 2021.
+Added: The completion of the integration process could ultimately take longer than anticipated and/or could be more difficult than anticipated due to a number of reasons, including the lack of complementary products and resort offerings, delays or other challenges in converting the Diamond resorts into resorts that are suitable for HGV as part of our overall strategy and our rebranding plan, loss of valuable employees, disruption of each company’s ongoing businesses, processes and systems, inconsistencies in standards, controls, procedures, practices, policies and compensation arrangements between the two businesses, and differences in corporate cultures and philosophies, and other challenges that are inherent in such a complex integration of businesses.
There also may be issues attributable to Diamond’s operations that were inherent to the business or are based on events or actions that occurred prior to the closing of the Diamond Acquisition that may make the integration even more challenging.
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Despite our retention and recruiting efforts, key employees may be unwilling to continue their employment with us, and we may be unable to timely find suitable replacements.
−Removed: Ultimately, the integration process is subject to a number of uncertainties, and no assurance can be given that our integration efforts will be successful.
+Added: Ultimately, the completion of the integration process is subject to a number of uncertainties, and no assurance can be given that our integration efforts will be successful.
Any one or more of the foregoing factors may adversely affect or hinder any successful integration of the Diamond acquisition and may materially adversely impact the execution of our strategy post-acquisition, business, operations, and, ultimately, our results of operations.
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Although we believe that achieving cost synergies, benefits, and other efficiencies of the Diamond Acquisition should offset such costs, fees and expenses over time, such net benefit may not be achieved in the near term, or at all.
−Removed: Moreover, there may be significant potential liabilities associated with the Legacy-Diamond business that may have been unknown to us at or prior to the closing of the Diamond Acquisition, we may uncover after the closing during the integration period, or may be more significant than we believed at such time.
−Removed: For example, an appeal for judgment was rendered in favor of the plaintiffs in November 2023 (with the California Supreme Court rejecting further appeals in February 2024) related to a personal injury lawsuit, O’Malley et al.
−Removed: Diamond Resorts Management, Inc.
−Removed: , filed against Diamond in 2015 for which we have accrued liabilities of approximately $102 million as of December 31, 2023.
−Removed: While we believe existing insurance policies will cover a significant, if not substantially all, of any such liability, and we accrued liabilities related to this lawsuit (together with related insurance coverage), our insurance policies may still not cover a significant portion of the total amount.
−Removed: In addition, there is no assurance that our insurance policies will, in fact, cover most of this liability or that we won’t be exposed to similar or other liabilities from the Legacy-Diamond business prior to our acquisition.
−Removed: Any similarly significant but individually immaterial liabilities in the aggregate, and/or any material liability that was unknown or not estimable by us at the time of the acquisition, may have a material adverse effect on our financial condition and operating results.
−Removed: See Part II — Item 8.
−Removed: Financial Statements and Supplementary Data — Note 23:
−Removed: Commitments and Contingencies to our consolidated financial statements included in this Annual Report on Form 10-K.
+Added: Moreover, there may be significant potential liabilities associated with the Legacy-Diamond business that may have been unknown to us at or prior to the closing of the Diamond Acquisition, or that may be more significant than we initially believed at or prior to the closing.
+Added: There is no assurance that our insurance policies will cover all of any such liabilities.
+Added: Any significant but individually immaterial liabilities in the aggregate, and/or any material liability that was unknown or not estimable by us at the time of the acquisition, may have a material adverse effect on our financial condition and operating results.
Our results will suffer if we do not effectively manage our expanded operations resulting from the Diamond Acquisition.
1 unchanged sentence
Our future success depends, in part, upon our ability to manage this expanded business, including in non-US jurisdictions where we did not have operations prior to the Diamond Acquisition, including challenges related to the management and monitoring of expanded operations and associated increased costs and complexity.
−Removed: We may also need to obtain approvals of developers or HOAs in various instances to include additional resorts in the multi-resort trusts marketed, sold and managed by the acquired Diamond business (the “Diamond Collections”) or increase maintenance fees or impose additional requirements in order to meet our brand and operating standards.
+Added: We may also need to obtain approvals of developers or HOAs in various instances to include additional resorts in the multi-resort trusts marketed, sold and managed by the acquired Diamond business (the “Diamond Collections”) or increase maintenance fees or impose additional requirements
+Added: in order to meet our brand and operating standards.
There can be no assurances that we will be successful or that we will realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the transaction.
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Risks Related to the Integration of Bluegreen
−Removed: 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.
−Removed: While we anticipate certain cost savings from the consummation of the Bluegreen Acquisition, our ability to achieve such estimated cost savings in the timeframe described, or at all, is subject to various assumptions by our management, which may or may not be realized, as well as the incurrence of other costs in our operations that offset all or a portion of such cost savings.
−Removed: As a consequence, we may not be able to realize cost savings within the timeframe expected or at all.
−Removed: In addition, we may incur additional and/or unexpected costs in order to realize these cost savings.
−Removed: These may include increased licensing fees, as we convert the existing Bluegreen properties and sales centers to branded properties and sales centers using the Hilton marks.
−Removed: Failure to achieve the expected cost savings could significantly reduce the expected benefits associated with the Bluegreen Acquisition and adversely affect us.
−Removed: In addition, we have incurred, and will continue to incur, substantial expenses in connection with the Bluegreen Acquisition.
−Removed: We expect to continue to incur non-recurring costs associated with combining the operations of the two companies and achieving the desired cost savings.
−Removed: These fees and costs have been, and will continue to be, substantial.
−Removed: The substantial majority of non-recurring expenses have consisted of transaction costs related to the Bluegreen Acquisition and include, among others, fees paid to financial, legal and accounting advisors, employee benefit costs and filing fees.
−Removed: These costs described above, as well as other unanticipated costs and expenses, could have a material adverse effect on our financial condition and operating results following the consummation of the Bluegreen Acquisition.
−Removed: We may not be able to integrate successfully and many of the anticipated benefits of combining us and Bluegreen may not be realized.
+Added: We may not be able to successfully and timely complete the integration of Bluegreen and many of the anticipated benefits of combining us and Bluegreen may not be realized.
We completed the Bluegreen Acquisition with the expectation that it will result in various benefits, including, among other things, operating efficiencies, potential revenue synergies, cost savings, and certain key strategic and marketing partnerships and alliances.
1 unchanged sentence
Achieving the anticipated benefits of the Bluegreen Acquisition is subject to a number of risks and uncertainties, including whether our and Bluegreen’s businesses can be integrated in an efficient and effective manner, and whether such integration and achievement of cost savings could come at the expense of other aspects of our operations, including degradation of products and services.
+Added: In addition, we may incur additional and/or unexpected costs in order to realize these cost savings.
Similarly, increased license fees and related costs associated with the integration of the two brands and any necessary modifications to the license agreement may result in increased costs and could hinder such integration.
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In particular, Bluegreen historically generated a significant portion of its new sales prospects and leads through marketing arrangements with various third parties, including Bass Pro Shops and Choice.
−Removed: We have inherited and extended the exclusive marketing agreement with Bass Pro for a period of ten years to provide us with the right to market and sell vacation packages at kiosks in each of Bass Pro’s retail locations and through other means.
−Removed: VOI sales to prospects and leads generated by Bluegreen marketing arrangement with Bass Pro accounted for approximately 16%, 17% and 19% of Bluegreen’s VOI sales volume during the years ended December 31, 2023, 2022 and 2021, respectively.
+Added: We inherited and extended the exclusive marketing agreement with Bass Pro for a period of ten years to provide us with the right to market and sell vacation packages at kiosks in each of Bass Pro’s retail locations and through other means, which arrangement have contributed significantly to Bluegreen’s historical standalone annual VOI sales volume during recent years prior to our acquisition.
+Added: We believe that the Bass Pro marketing arrangement will continue to be an important contributor to our overall VOI sales volume.
Bluegreen also had an exclusive strategic relationship with Choice, which we assumed, that involves several areas of its business, including a sales and marketing alliance that enabled Bluegreen to leverage Choice’ brands, customer relationships and marketing channels to sell vacation packages.
−Removed: We anticipate continuing Bluegreen’s strategic relationship with Choice;
−Removed: however, we have also agreed with Hilton that we would obtain certain amendments to the current agreements with Choice as part of our integration plan.
−Removed: If we are not able to satisfy the license agreement requirement to rebrand the Bluegreen properties and its sales centers, it may materially affect our integration plans and Hilton may exercise certain rights that could be detrimental to us and our business.
−Removed: See “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” and “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.”
−Removed: If we are unable to realize the benefits from Bluegreen’s marketing arrangements, including because Bluegreen’s significant marketing arrangements do not generate a sufficient number of prospects and leads, are terminated or not renewed, or are limited or changed in a manner adversely affecting our combined operations, we may not be able to market and sell our products and services to new owners at anticipated sales levels or at levels required in order to offset the costs associated with such marketing efforts.
+Added: We have agreed with Choice to continue the Choice strategic relationship, subject to any limitations or requirements sent for in the Hilton license agreement, to grow our business.
+Added: If Bluegreen’s marketing arrangements that we assumed, including those described above, do not generate a sufficient number of prospects and leads, are terminated or not renewed, or are limited or changed in a manner adversely affecting us, or we otherwise are unable to realize the benefits from such marketing arrangements, our anticipated revenue growth may not occur, our the costs associated with such arrangements may exceed related revenues, and otherwise may adversely affect the anticipated benefits of the Bluegreen Acquisition.
Our results of operations could also be adversely affected by any issues attributable to Bluegreen’s operations that arise or are based on events or actions that occurred before the closing of the Bluegreen Acquisition.
2 unchanged sentences
Failure to achieve these and other anticipated benefits (including operating efficiencies) could result in increased costs or decreases in the amount of expected net income and could adversely affect our future business, financial condition, operating results and prospects.
−Removed: 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.
−Removed: In connection with the closing of the Bluegreen Acquisition, we agreed with Hilton that we would obtain certain amendments to the Choice agreements by December 31, 2024 to allow us to rebrand most of the Bluegreen properties and all of its sales centers in accordance with a rebranding schedule that we have agreed to with Hilton, and we agreed to pay Hilton certain minimum license fees related to the Bluegreen properties and sales of VOIs for years 2024 and 2025.
−Removed: After 2025, assuming we have obtained the amendments referenced above, the license fees related to the Bluegreen properties and sales would revert back to a gradual ramp up that we had agreed to with Hilton.
−Removed: “ Business—Key Agreements with Hilton Worldwide Holdings—Amended and Restated License Agreement.
−Removed: ” If we are not able to obtain such amendments within the specified timeframe, we would be obligated to pay certain minimum license fees for years 2026 to 2029.
−Removed: In addition, Hilton could exercise certain rights under the license agreement that are detrimental to us,
−Removed: including, without limitation, revoking our exclusive rights to use the licensed marks and to engage in vacation ownership under any Hilton marks.
−Removed: Any of these consequences and/or other consequences related to the Hilton license agreement described below under “ 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 ” could adversely affect our operating results and our business generally.
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.
2 unchanged sentences
Under the terms of the Hilton license agreement, we must obtain Hilton’s approval to use the Hilton brand names and trademarks in connection with the rebranding of the Bluegreen properties to branded properties using the Hilton marks, as well as for the branding of timeshare properties that we acquire or develop in the future.
−Removed: We have agreed with Hilton to operate the Bluegreen business as a separate operation, subject to a rebranding schedule that we have agreed to with Hilton, which schedule may be modified from time to time.
−Removed: In addition, we have agreed with Hilton that we would obtain certain amendment to the Choice agreements to allow us to implement the rebranding plan.
+Added: We have agreed with Hilton to operate the Bluegreen business as a separate operation, subject to a rebranding schedule.
In addition, we may require additional amendments to the license agreement with Hilton to further modify various provisions of the Hilton license agreement to provide for any related approvals or relief from certain restrictions in connection with the integration of Bluegreen so as to allow us to achieve greater operating efficiency and synergy than currently provided for, and any failure to do so could adversely impact such operating efficiency and synergy.
24 unchanged sentences
There can be no assurances that we will be successful in implementing and/or managing any of these or other steps.
−Removed: We may not be able to retain our and/or Bluegreen personnel successfully.
−Removed: The success of the Bluegreen Acquisition and related integration will depend in part on our ability to retain the talents and dedication of key employees currently employed by us (including those employees whom we retained from the Diamond acquisition) and Bluegreen.
−Removed: It is possible that these employees may decide not to remain with us or Bluegreen, as applicable.
−Removed: If key employees terminate their employment, if an insufficient number of employees are retained, or if key employees’ performance standards materially decrease, our business may be adversely affected and management’s attention may be diverted from successfully integrating Bluegreen to hiring suitable replacements, all of which may cause our business to suffer.
−Removed: In addition, we may not be able to locate suitable replacements for any key employees who leave, or offer employment to potential replacements on reasonable terms.
Bluegreen may have liabilities that exceed our estimates, and any such liabilities could adversely affect our financial results and condition.
Upon consummation of the Bluegreen Acquisition, we assumed all of Bluegreen’s liabilities, whether known or not.
−Removed: Bluegreen may have various potential liabilities relating to the conduct of its business prior to the Bluegreen Acquisition, including, but not limited to, existing and potential legal claims pertaining to various areas of the Bluegreen business, tax audits, regulatory violations (including environmental violations and claims), and other liabilities that are greater than we had anticipated, were not known to us, and/or were not disclosed to us.
−Removed: It is possible that these liabilities, whether currently known or unknown to us, may result in substantial losses, thereby adversely affecting our operating results and financial condition.
+Added: Bluegreen may have various potential liabilities relating to the conduct of its business prior to the Bluegreen Acquisition, including, but not limited to, existing and potential legal claims or contractual disputes pertaining to various areas of the Bluegreen business, tax audits, regulatory violations (including environmental violations and claims), and other liabilities that are, individually or in the aggregate, greater than we had anticipated, more likely than we estimated were not known to us, and/or were not disclosed to us.
+Added: For example, we are currently involved in a dispute regarding an alleged breach of a purchase and sale agreement related to The Manhattan Club property that we acquired in connection with the Bluegreen Acquisition, which dispute we believed at the time of the acquisition was likely to be resolved in our favor.
+Added: Since the acquisition was completed, in July 2024, an arbitration panel entered an interim award against Bluegreen and which provided us an opportunity to propose a cure for its breach prior to any decision on damages.
+Added: We are now in the process of curing the alleged breach.
+Added: It is possible that these liabilities, including any other liabilities that are currently unknown to us but may come to our attention, may result in substantial costs or losses, thereby adversely affecting our operating results and financial condition.
+Added: See Part II – Item 8.
+Added: Financial Statements and Supplementary Data – Note 23:
+Added: Commitments and Contingencies for more information.
Interests in Bluegreen’s resorts are offered through a trust system, which is subject to a number of regulatory and other requirements.
Bluegreen’s resorts are alternatives to traditional deeded timeshare ownership, inasmuch as they create a network of available resort accommodations at multiple locations (“the Bluegreen Club”).
−Removed: Title to the units available through the Bluegreen Club is held in a trust or similar arrangement that is administered by an independent trustee (the “Independent Trustee”).
+Added: Title to the units available through the
+Added: Bluegreen Club is held in a trust or similar arrangement that is administered by an independent trustee (the “Independent Trustee”).
A purchaser of a timeshare interest in the Bluegreen Club generally does not receive a deeded interest in any specific resort or resort accommodation, but acquires a membership in the timeshare plan which is denominated by an annual or biennial allotment of points.
4 unchanged sentences
Registration under a respective timeshare act (or other applicable law) is not a guarantee or assurance of compliance with applicable law nor an assurance or guarantee of how any judicial body may interpret Bluegreen’s compliance therewith.
−Removed: addition, various disclosures are required in connection with marketing and sale of timeshare interests or plans, which are required to be continually updated and current.
+Added: In addition, various disclosures are required in connection with marketing and sale of timeshare interests or plans, which are required to be continually updated and current.
A determination that specific provisions or operations of the Bluegreen Club do not comply with relevant timeshare acts or applicable law may have a material adverse effect on the developer, the Independent Trustee and the related non-profit members association for each of the Bluegreen component sites or resorts.
Furthermore, any material omissions, inaccuracies or misstatements in disclosure documents may result in adverse consequences, including fines, penalties, rescission or similar rights for the purchasers, or other liabilities.
−Removed: Risks Related to the Spin-Off
−Removed: We may be responsible for U.S.
−Removed: federal income tax liabilities that relate to the spin-off.
−Removed: The completion of the spin-off was conditioned upon the absence of any withdrawal, invalidation or modification of the ruling (“IRS Ruling”) Hilton received from the IRS regarding certain U.S.
−Removed: federal income tax aspects of the spin-off in an adverse manner prior to the effective time of the spin-off.
−Removed: Although the IRS Ruling generally is binding on the IRS, the continued validity of the IRS Ruling is based upon and subject to the accuracy of factual statements and representations made to the IRS by Hilton.
−Removed: In addition, the spin-off was conditioned on the receipt of an opinion of counsel to the effect that the distributions of our and Park common stock would qualify as tax-free distributions under Section 355 of the Code.
−Removed: An opinion of counsel is not binding on the IRS.
−Removed: Accordingly, the IRS may reach conclusions with respect to the spin-off that are different from the conclusions reached in the opinion.
−Removed: If all or a portion of the spin-off does not qualify as a tax-free transaction for any reason, Hilton may recognize a substantial gain attributable to the timeshare business for U.S.
−Removed: federal income tax purposes.
−Removed: In such case, under U.S.
−Removed: Treasury regulations, each member of the Hilton consolidated group at the time of the spin-off (including us and our subsidiaries) would be jointly and severally liable for the resulting entire amount of any U.S.
−Removed: federal income tax liability.
−Removed: Additionally, if the distribution of our common stock and/or the distribution of Park common stock do not qualify as tax-free under Section 355 of the Code, Hilton stockholders will be treated as having received a taxable dividend to the extent of Hilton’s current and accumulated earnings and profits, would have a tax-free basis recovery up to the amount of their tax basis in their shares, and would have taxable gain from the sale or exchange of the shares to the extent of any excess.
−Removed: 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.
−Removed: The spin-off could be challenged under various state and federal fraudulent conveyance laws.
−Removed: An unpaid creditor or an entity vested with the power of such creditor (such as a trustee or debtor-in-possession in a bankruptcy) could claim that Hilton did not receive fair consideration or reasonably equivalent value in the spin-off, and that the spin-off left Hilton insolvent or with unreasonably small capital or that Hilton intended or believed it would incur debts beyond its ability to pay such debts as they mature.
−Removed: If a court were to agree with such a plaintiff, then such court could void the spin-off as a fraudulent transfer and could impose a number of different remedies, including without limitation, returning our assets or your shares in our company to Hilton or providing Hilton with a claim for money damages against us in an amount equal to the difference between the consideration received by Hilton and the fair market value of our company at the time of the spin-off.
−Removed: The measure of insolvency for purposes of the fraudulent conveyance laws may vary depending on which jurisdiction’s law is applied.
−Removed: Generally, however, an entity would be considered insolvent if the fair salable value of its assets is less than the amount of its liabilities (including the probable amount of contingent liabilities), and such entity would be considered to have unreasonably small capital if it lacked adequate capital to conduct its business in the ordinary course and pay its liabilities as they become due.
−Removed: No assurance can be given as to what standard a court would apply to determine insolvency or that a court would determine that Hilton were solvent at the time of or after giving effect to the spin-off, including the distribution of our common stock.
−Removed: We could be required to assume responsibility for obligations allocated to Hilton or Park under the Distribution Agreement.
−Removed: We entered into the Distribution Agreement with Hilton and Park prior to the distribution of our shares of common stock to Hilton stockholders.
−Removed: Under the Distribution Agreement and related ancillary agreements, each of us, Hilton and Park are generally responsible for the debts, liabilities and other obligations related to the business or businesses that they own and operate following the spin-off.
−Removed: Although we do not expect to be liable for any obligations that were not allocated to us under the Distribution Agreement, a court could disregard the allocation agreed to among the parties, and require that we assume responsibility for obligations allocated to Hilton or Park (for example, tax and/or environmental liabilities), particularly if Hilton or Park were to refuse or were unable to pay or perform the allocated obligations.
−Removed: In addition, losses in respect of certain Shared Contingent Liabilities, which generally are not specifically attributable to any of the timeshare business, the Park business or the retained business of Hilton, were determined on or prior to the date on which the Distribution Agreement was entered.
−Removed: The percentage of Shared Contingent Liabilities for which we are responsible has been fixed in a manner that is intended to approximate our estimated enterprise value on the distribution date relative to the estimated enterprise values of Park and Hilton.
−Removed: Subject to certain limitations and exceptions, Hilton is generally vested with the exclusive management and control of all matters pertaining to any such Shared Contingent Liabilities, including the prosecution of any claim and the conduct of any defense.
−Removed: 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.
−Removed: Pursuant to the Distribution Agreement entered into in connection with the spin-offs and certain other agreements among Hilton and Park and us, we agreed to indemnify each of Hilton and Park from certain liabilities.
−Removed: Indemnities that we may be required to provide Hilton and/or Park may be significant and could negatively affect our business.
−Removed: In addition, each of Hilton and Park agreed to indemnify us with respect to such parties assumed or retained liabilities pursuant to the Distribution Agreement and breaches of the Distribution Agreement or other agreements related to the spin-offs.
−Removed: There can be no assurance that the indemnities from each of Hilton and Park will be sufficient to protect us against the full amount of these and other liabilities.
−Removed: Third parties also could seek to hold us responsible for any of the liabilities that Hilton and Park have agreed to assume.
−Removed: Even if we ultimately succeed in recovering from Hilton or Park any amounts for which we are held liable, we may be temporarily required to bear those losses ourselves.
−Removed: Each of these risks could negatively affect our business, financial condition, results of operations and cash flows.
−Removed: Pursuant to the Distribution Agreement and certain other agreements, including the Tax Matters Agreement, entered into in connection with the spin-offs among Hilton and Park and us, we agreed to indemnify each of Hilton and Park from certain liabilities (including tax liabilities).
−Removed: In addition to the Shared Contingent Liabilities pursuant to the Distribution Agreement, the Tax Matters Agreement governs the respective obligations of Hilton, Park and us after the spin-off with respect to tax liabilities and benefits, tax attributes, tax contests, liability resulting from tax audits and other tax sharing regarding U.S.
−Removed: federal, state, local and foreign income taxes, other tax matters and related tax returns.
−Removed: Under the Tax Matters Agreement, we have agreed to indemnify Hilton and Park against certain tax liabilities.
−Removed: The Tax Matters Agreement also provides special rules for allocating tax liabilities in the event that the spin-off is not tax-free.
−Removed: In general, under the Tax Matters Agreement, each party is responsible for any taxes imposed on Hilton that arise from the failure of the spin-off and certain related transactions to qualify as a tax-free transaction for U.S.
−Removed: federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code, as applicable, and certain other relevant provisions of the Code, to the extent that the failure to qualify is attributable to actions taken by such party (or with respect to such party’s stock).
−Removed: In addition, the parties share responsibility, in accordance with sharing percentages of 65% for Hilton, 26% for Park, and 9% for us, for any such taxes imposed on Hilton that are not attributable to actions taken by a party.
−Removed: Finally, pursuant to the Tax Matters Agreement, to the extent that any taxes that may be imposed on the Hilton consolidated group for the taxable periods prior to the spin-offs relates to the timeshare business, we would in most cases be liable for the full amount attributable to the timeshare business.
−Removed: Indemnities that we may be required to provide Hilton and/or Park, or any liabilities for which we may be responsible proportionately or wholly, pursuant to these agreements may be significant and could negatively affect our business.
Risks Related to Ownership of Our Common Stock
4 unchanged sentences
A change in these policies could have an adverse effect on our financial condition, our results of operations, our cash flow, the per share trading price of our common stock and our ability to satisfy our debt service obligations and to pay dividends to our stockholders.
−Removed: The interests of certain of our stockholders may conflict with ours or yours in the future .
+Added: The interests of one of our stockholders, Apollo, may conflict with ours or yours in the future .
+Added: In addition, Apollo, which owns a significant number of shares of our common stock, may sell some, most or all of our shares that it owns, which would cause our stock price to decline.
We have entered into a stockholder's agreement with Apollo that, among other things, provides Apollo the right, under certain circumstances, to designate a certain number of directors to our board of directors.
Pursuant to the stockholder's agreement, two members of our board of directors are Apollo designees, and for so long as Apollo and its affiliates continue to own specified percentages of our common stock, Apollo will be able to maintain representation on our board of directors.
−Removed: Accordingly, during that period of time, Apollo may have influence with respect to our management,
−Removed: business plans and policies, including the appointment and removal of our officers.
+Added: Accordingly, during that period of time, Apollo may have influence with respect to our management, business plans and policies, including the appointment and removal of our officers.
For example, for so long as Apollo continues to own a significant percentage of our stock, Apollo may be able to influence whether or not a change of control of our company or a change in the composition of our board of directors occurs.
4 unchanged sentences
Our amended and restated certificate of incorporation provides no director who is not employed by us (including any nonemployee director who serves as one of our officers in both his or her director and officer capacities) or his or her affiliates will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate.
−Removed: Apollo also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may be unavailable to us.
+Added: Apollo also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may
+Added: be unavailable to us.
In addition, Apollo may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investments, even though such transactions might involve risks to you.
+Added: In addition, as of December 31, 2024, Apollo owned 26,295,825 shares of our common stock.
+Added: During the fourth quarter 2024, Apollo sold an aggregate of 4,000,000 shares of our common stock pursuant to Rule 144 of the Securities Act.
+Added: Apollo may continue to sell, in one or more transactions, including Rule 144, underwritten offering and other transactions, some, most, or all of our shares that it owns at any time in compliance with the terms of the stockholders agreement.
+Added: Any such sale or sales are likely to cause the market price of our common stock to decline significantly.
Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable .
Our amended and restated certificate of incorporation and bylaws contain provisions that may make the merger or acquisition of our company more difficult without the approval of our board of directors.
−Removed: Among other things:
−Removed: • these provisions allow us to authorize the issuance of undesignated preferred stock in connection with a stockholder rights plan or otherwise, the terms of which may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;
−Removed: • these provisions prohibit stockholder action by written consent unless such action is recommended by all directors then in office;
−Removed: • these provisions provide that our board of directors is expressly authorized to make, alter or repeal our bylaws and that our stockholders may only amend our bylaws with the approval of 80% or more of all the outstanding shares of our capital stock entitled to vote;
−Removed: • these provisions establish advance notice requirements for nominations for elections to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings.
−Removed: In addition, as a Delaware corporation, we are also subject to provisions of Delaware law, which may impair a takeover attempt that our stockholders may find beneficial.
+Added: For example, among other things, our organization documents prohibit stockholder action by written consent unless such action is recommended by all directors then in office and establish advance notice requirements for nominations for elections to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings.
+Added: In addition, as a Delaware corporation, we are also subject to provisions of Delaware law, which continue to evolve and may impair a takeover attempt that our stockholders may find beneficial.
These anti-takeover and other applicable Delaware law provisions and measures could discourage, delay or prevent a transaction involving a change in control of our company, including actions that our stockholders may deem advantageous, or negatively affect the trading price of our common stock.
1 unchanged sentence
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.
−Removed: Our license agreement with Hilton requires us to obtain Hilton’s consent prior to taking certain significant corporate actions, including engaging in a takeover transaction.
+Added: Our license agreement with Hilton requires us to obtain Hilton’s consent prior to taking certain significant corporate actions, including change of control of our company.
There can be no assurance that any consent from Hilton to a change of control of our company could be obtained on a basis satisfactory to us or any potential acquirer.
19 unchanged sentences
Future issuances of common stock by us may cause the market price of our common stock to decline.
−Removed: None of the shares outstanding upon consummation of the spin-off were “restricted securities” within the meaning of Rule 144 under the Securities Act, and substantially all of the outstanding shares of our common stock are freely tradable and available for resale in the public market, subject to certain restrictions in the case of control shares held by persons deemed to be our affiliates.
−Removed: Accordingly, the market price of our common stock could drop significantly if holders of a substantial number of shares of our common stock sell them in the public market, or if the market perceives that such sales could occur.
−Removed: We adopted an Omnibus Incentive Plan under which an aggregate of 10,000,000 shares of HGV common stock are issuable.
−Removed: As of December 31, 2023, an aggregate of 4,339,887 shares have been issued, and an additional 4,122,738 shares were underlying outstanding awards pursuant to the Omnibus Incentive Plan.
−Removed: We also adopted a Non-Employee Director Stock Plan under which 325,000 shares of our common stock are issuable, and an Employee Stock Purchase Plan under which 2,500,000 shares of our common stock are available for issuance.
−Removed: Under the Non-Employee Director Stock Plan, 157,530 shares had been issued, and there were an additional 26,052 shares underlying outstanding awards granted as of December 31, 2023.
−Removed: Under the Employee Stock Purchase Plan, a total of 566,972 shares were issued as of December 31, 2023.
+Added: Under our 2023 Omnibus Incentive Plan, as of December 31, 2024, an aggregate of 34,663 shares have been issued, and an additional 1,515,320 shares were underlying outstanding awards, leaving 3,923,043 shares available for future issuances.
+Added: Under the Employee Stock Purchase Plan, an aggregate of 2,500,000 shares were available for future issuance as of December 31, 2024.
+Added: In addition, while we have not in the past, we may issue additional shares of our common stock to meeting liquidation and access to capital needs from time to time.
Any further issuances could result in the dilution of our current stockholders causing the market price of shares of our common stock to decline.
4 unchanged sentences
We are not obligated to repurchase any specific number or amount of shares of common stock pursuant to the Repurchase Program, and we may modify, suspend or terminate the Repurchase Program at any time without prior notice.
−Removed: Repurchases of our common stock pursuant to the Repurchase Program could impact our stock price and increase its volatility.
−Removed: The existence of the Repurchase Program could cause our stock price to be higher than it would be in the absence of such a program.
−Removed: Additionally, the Repurchase Program could diminish our cash reserves, which may impact our
−Removed: ability to finance future growth and to pursue possible future strategic opportunities.
+Added: The existence of the Repurchase Program and related repurchases of our common stock could impact our stock price and increase its volatility.
+Added: Additionally, the Repurchase Program could diminish our cash reserves, which may impact our access to capital and liquidity for general operations and implementation of our business strategy.
There can be no assurance that any share repurchases will enhance long-term stockholder value, and the market price of our common stock may decline below the levels at which we repurchased shares of stock.
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.
−Removed: Although we may return capital to stockholders through dividends or otherwise in the future, we have no current plans to pay any cash dividends.
−Removed: The declaration, amount and payment of any future dividends on shares of common stock will be at the sole discretion of our board of directors.
−Removed: Our board of directors may take into account general and economic conditions, our financial condition and results of operations, our available cash, current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions on the payment of dividends by us to our stockholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant.
−Removed: In addition, our ability to pay dividends is limited by our credit agreement related to our senior secured credit facilities.
−Removed: Our ability to pay dividends may also be limited by covenants of other indebtedness that we or our subsidiaries incur in the future.
+Added: We have no current plans to pay any cash dividends.
+Added: Any decision by our board of directors, which has the sole discretion whether or not to pay dividends, must take into account a number of factors, including, without limitation:
+Added: our available cash;
+Added: current and anticipated cash needs;
+Added: capital requirements;
+Added: and contractual, legal, tax and regulatory restrictions on the payment of dividends by us to our stockholders or by our subsidiaries to us.
+Added: In addition, our ability to pay dividends is limited by our credit agreement related to our senior secured credit facilities and may further be limited by covenants of other indebtedness that we or our subsidiaries incur in the future.
+Added: Risks Related to the Spin-Off
+Added: We may be responsible for U.S.
+Added: federal income tax liabilities that relate to the spin-off.
+Added: The completion of the spin-off was conditioned upon the absence of any withdrawal, invalidation or modification of the ruling (“IRS Ruling”) Hilton received from the IRS regarding certain U.S.
+Added: federal income tax aspects of the spin-off in an adverse manner prior to the effective time of the spin-off.
+Added: Although the IRS Ruling generally is binding on the IRS, the continued validity of the IRS Ruling is based upon and subject to the accuracy of factual statements and representations made to the IRS by Hilton.
+Added: In addition, the spin-off was conditioned on the receipt of an opinion of counsel to the effect that the distributions of our and Park common stock would qualify as tax-free distributions under Section 355 of the Code.
+Added: An opinion of counsel is not binding on the IRS.
+Added: Accordingly, the IRS may reach conclusions with respect to the spin-off that are different from the conclusions reached in the opinion.
+Added: If all or a portion of the spin-off does not qualify as a tax-free transaction for any reason, Hilton may recognize a substantial gain attributable to the timeshare business for U.S.
+Added: federal income tax purposes.
+Added: In such case, under U.S.
+Added: Treasury regulations, each member of the Hilton consolidated group at the time of the spin-off (including us and our subsidiaries) would be jointly and severally liable for the resulting entire amount of any U.S.
+Added: federal income tax liability.
+Added: Additionally, if the distribution of our common stock and/or the distribution of Park common stock do not qualify as tax-free under Section 355 of the Code, Hilton stockholders will be treated as having received a taxable dividend to the extent of Hilton’s current and accumulated earnings and profits, would have a tax-free basis recovery up to the amount of their tax basis in their shares, and would have taxable gain from the sale or exchange of the shares to the extent of any excess.
+Added: 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.
+Added: The spin-off could be challenged under various state and federal fraudulent conveyance laws.
+Added: An unpaid creditor or an entity vested with the power of such creditor (such as a trustee or debtor-in-possession in a bankruptcy) could claim that Hilton did not receive fair consideration or reasonably equivalent value in the spin-off, and that the spin-off left Hilton insolvent or with unreasonably small capital or that Hilton intended or believed it would incur debts beyond its ability to pay such debts as they mature.
+Added: If a court were to agree with such a plaintiff, then such court could void the spin-off as a fraudulent transfer and could impose a number of different remedies, including without limitation, returning our assets or your shares in our company to Hilton or providing Hilton with a claim for money damages against us in an amount equal to the difference between the consideration received by Hilton and the fair market value of our company at the time of the spin-off.
+Added: The measure of insolvency for purposes of the fraudulent conveyance laws may vary depending on which jurisdiction’s law is applied.
+Added: Generally, however, an entity would be considered insolvent if the fair salable value of its assets is less than the amount of its liabilities (including the probable amount of contingent liabilities), and such entity would be considered to have unreasonably small capital if it lacked adequate capital to conduct its business in the ordinary course and pay its liabilities as they become due.
+Added: No assurance can be given as to what standard a court would apply to determine insolvency or that a court would determine that Hilton were solvent at the time of or after giving effect to the spin-off, including the distribution of our common stock.
+Added: We could be required to assume responsibility for obligations allocated to Hilton or Park under the Distribution Agreement.
+Added: We entered into the Distribution Agreement with Hilton and Park prior to the distribution of our shares of common stock to Hilton stockholders.
+Added: Under the Distribution Agreement and related ancillary agreements, each of us, Hilton and Park are generally responsible for the debts, liabilities and other obligations related to the business or businesses that they own and operate following the spin-off.
+Added: Although we do not expect to be liable for any obligations that were not allocated to us under the Distribution Agreement, a court could disregard the allocation agreed to among the parties, and require that we assume responsibility for obligations allocated to Hilton or Park (for example, tax and/or environmental liabilities), particularly if Hilton or Park were to refuse or were unable to pay or perform the allocated obligations.
+Added: In addition, losses in respect of certain Shared Contingent Liabilities, which generally are not specifically attributable to any of the timeshare business, the Park business or the retained business of Hilton, were determined on or prior to the date on which the Distribution Agreement was entered.
+Added: The percentage of Shared Contingent Liabilities for which we are responsible has been fixed in a manner that is intended to approximate our estimated enterprise value on the distribution date relative to the estimated enterprise values of Park and Hilton.
+Added: Subject to certain limitations and exceptions, Hilton is generally vested with the exclusive management and control of all matters pertaining to any such Shared Contingent Liabilities, including the prosecution of any claim and the conduct of any defense.
+Added: 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.
+Added: Pursuant to the Distribution Agreement entered into in connection with the spin-offs and certain other agreements among Hilton and Park and us, we agreed to indemnify each of Hilton and Park from certain liabilities.
+Added: Indemnities that we may be required to provide Hilton and/or Park may be significant and could negatively affect our business.
+Added: In addition, each of Hilton and Park agreed to indemnify us with respect to such parties assumed or retained liabilities pursuant to the Distribution Agreement and breaches of the Distribution Agreement or other agreements related to the spin-offs.
+Added: There can be no assurance that the indemnities from each of Hilton and Park will be sufficient to protect us against the full amount of these and other liabilities.
+Added: Third parties also could seek to hold us responsible for any of the liabilities that Hilton and Park have agreed to assume.
+Added: Even if we ultimately succeed in recovering from Hilton or Park any amounts for which we are held liable, we may be temporarily required to bear those losses ourselves.
+Added: Each of these risks could negatively affect our business, financial condition, results of operations and cash flows.
+Added: Pursuant to the Distribution Agreement and certain other agreements, including the Tax Matters Agreement, entered into in connection with the spin-offs among Hilton and Park and us, we agreed to indemnify each of Hilton and Park from certain liabilities (including tax liabilities).
+Added: In addition to the Shared Contingent Liabilities pursuant to the Distribution Agreement, the Tax Matters Agreement governs the respective obligations of Hilton, Park and us after the spin-off with respect to tax liabilities and benefits, tax attributes, tax contests, liability resulting from tax audits and other tax sharing regarding U.S.
+Added: federal, state, local and foreign income taxes, other tax matters and related tax returns.
+Added: Under the Tax Matters Agreement, we have agreed to indemnify Hilton and Park against certain tax liabilities.
+Added: The Tax Matters
+Added: Agreement also provides special rules for allocating tax liabilities in the event that the spin-off is not tax-free.
+Added: In general, under the Tax Matters Agreement, each party is responsible for any taxes imposed on Hilton that arise from the failure of the spin-off and certain related transactions to qualify as a tax-free transaction for U.S.
+Added: federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code, as applicable, and certain other relevant provisions of the Code, to the extent that the failure to qualify is attributable to actions taken by such party (or with respect to such party’s stock).
+Added: In addition, the parties share responsibility, in accordance with sharing percentages of 65% for Hilton, 26% for Park, and 9% for us, for any such taxes imposed on Hilton that are not attributable to actions taken by a party.
+Added: Finally, pursuant to the Tax Matters Agreement, to the extent that any taxes that may be imposed on the Hilton consolidated group for the taxable periods prior to the spin-offs relates to the timeshare business, we would in most cases be liable for the full amount attributable to the timeshare business.
+Added: Indemnities that we may be required to provide Hilton and/or Park, or any liabilities for which we may be responsible proportionately or wholly, pursuant to these agreements may be significant and could negatively affect our business.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.