−Removed: There have been no material changes from the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 other than as discussed below.
−Removed: The risk factors below update the additional risk factors previously disclosed on our Form 8-K filed on May 6, 2020.
−Removed: The COVID-19 pandemic is severely and adversely affecting our sales and our operations, and will have serious adverse effects on our business, financial condition and results of operations for an unknown period of time.
+Added: There have been no material changes from the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the “2019 Annual Report”), other than in our Current Report on Form 8-K filed on May 6, 2020, our Quarterly Report on Form 10-Q filed on May 22, 2020, and the risk factor below.
+Added: The COVID-19 pandemic has heightened, and in some cases, manifested, certain of the risks we normally face in our business, including those disclosed in the 2019 Annual Report, as updated by the risk factors disclosed on our Current Report on Form 8-K filed on May 6, 2020 and on our Quarterly Report on Form 10-Q filed on May 22, 2020.
+Added: The COVID-19 pandemic has severely and adversely affected our sales and our operations and will continue to have serious adverse effects on our business, financial condition and results of operations for an unknown period of time.
In March 2020, the World Health Organization declared the coronavirus (“COVID-19 pandemic”) outbreak a pandemic.
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As a result, since March 16, 2020, we have seen marked declines in occupancy, rentals, and contract sales because of the temporary closure of substantially all of our sales centers internationally, the temporary closure of many of our resorts, the temporary closure of our resorts for rental guests with stays at our branded North America vacation ownership resorts, and the reduction in operations and amenities at all of our resorts based on various government mandates and advisories.
−Removed: We have implemented furloughs and reduced work hours for our associates and have instituted “work from home” measures for many of our associates.
−Removed: In addition, to minimize the risk of the COVID-19 pandemic to our employees and customers and to prevent the continued spread of the virus, we are implementing social distancing and enhanced hygiene protocols at our resorts, sales centers, and corporate offices in accordance with the guidelines from national, federal, state, and local authorities.
−Removed: These measures, while intended to protect human life, may result in additional costs, operational
−Removed: inefficiencies, and fewer revenue opportunities.
−Removed: While it is not possible at this time to estimate the impact that any protocols adopted to combat the COVID-19 pandemic could have on our business, measures such as canceling in-person sales tours and customized presentations could result in lesser effectiveness of customer-associate interaction and diminished customer satisfaction, which could adversely impact our financial condition.
−Removed: We are monitoring the situation and intend to reopen our sales centers and resorts and increase operations and amenities as conditions permit;
−Removed: however, extended or further closures may be required nationally, regionally, or in specific locations.
−Removed: In addition, we cannot predict any limitations national, federal, state and local governments may impose on our operations when we are able to reopen our resorts, which may include, for example, limitations on access to swimming pools, gyms and other sports facilities, mask protection, as well as other protections that may limit the use of amenities at our resorts to enforce social distancing measures.
+Added: We have implemented furloughs, reduced work hours and reduced salaries for our associates, and have instituted “work from home” measures for many of our associates.
+Added: In addition, to minimize the risk of the COVID-19 pandemic to our associates and customers and to prevent the continued spread of the virus, we have implemented social distancing and enhanced hygiene protocols at our resorts, sales centers, and corporate offices in accordance with the guidelines from national, federal, state, and local authorities.
+Added: These measures, while intended to protect human life, have resulted in additional costs, operational inefficiencies, and fewer revenue opportunities.
+Added: The impact of these protocols adopted to combat the COVID-19 pandemic, such as canceling, or implementing alternatives to, in-person sales tours and customized presentations, could result in lesser
+Added: effectiveness of customer-associate interaction and diminished customer satisfaction, which could adversely impact our financial condition.
+Added: We have begun to reopen our sales centers and resorts and increase operations and amenities;
+Added: however, extended or further closures may be required nationally, regionally, or in specific locations in the event of a resurgence of the virus.
This situation is unprecedented and rapidly changing and has unknown duration and severity.
−Removed: The COVID-19 pandemic has had a material adverse impact, and is expected to continue to have a material adverse impact, on global economies and financial markets, which has resulted in an economic downturn that has reduced demand for our products.
+Added: The COVID-19 pandemic has had a material adverse impact, and is expected to continue to have a material adverse impact, on global economies and financial markets, which has resulted in an economic downturn that has reduced demand for our products and services.
The success of our business and our profitability depend, in substantial part, upon the health of the travel industry, which has been adversely affected by the COVID-19 pandemic.
A substantial amount of our sales activity occurs at our resorts, and the number of prospective and current owners who visit our resorts has an impact on sales volume.
−Removed: Fear of exposure to the COVID-19 pandemic has caused travelers to cancel travel plans to our resorts.
−Removed: These changes in vacation and travel patterns due to the COVID-19 pandemic have begun to adversely affect our cash flows, revenues and profits.
−Removed: Moreover, even once travel advisories and restrictions are lifted, travel demand may remain weak for a significant length of time, and we cannot predict if or when demand for our resorts will return to pre-COVID-19 pandemic levels.
+Added: Fear of exposure to the COVID-19 pandemic, as well as government restrictions, has caused travelers to cancel or delay travel plans to our resorts.
+Added: These changes in vacation and travel patterns due to the COVID-19 pandemic have adversely affected our cash flows, revenues and profits.
+Added: Moreover, as travel advisories and restrictions have been lifted, there has been a resurgence of the virus, and, as a result, travel demand has remained weak, and could remain so for a significant length of time.
+Added: We cannot predict if or when demand for our resorts will return to pre-COVID-19 pandemic levels.
Adverse changes in the perceived or actual economic climate, including higher unemployment rates, declines in income levels and loss of personal wealth resulting from the impact of the COVID-19 pandemic are expected to negatively affect travel demand for a prolonged period of time.
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In addition, the transactions in which we have securitized vacation ownership notes receivable contain certain portfolio performance requirements related to default and delinquency rates, which, if not met, would result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the requirements.
−Removed: The duration and extent of the impact of the COVID-19 pandemic on our business and financial results will largely depend on future developments, including the duration and spread of the pandemic, the extent and severity of any resurgences of the pandemic in the future, the response by all levels of government in their efforts to contain the pandemic and to mitigate the economic disruptions, the related impact on consumer confidence and spending, and how quickly economies and demand for our products recover after the pandemic subsides, all of which are highly uncertain, rapidly changing and cannot be predicted.
+Added: The duration and extent of the impact of the COVID-19 pandemic on our business and financial results will largely depend on future developments, including the duration and spread of the pandemic, the extent and severity of any resurgences of the pandemic in the future, the response by all levels of government in their efforts to contain the pandemic and to mitigate the economic disruptions, the related impact on consumer confidence and spending, and how quickly economies and demand for our products and services recover after the pandemic subsides, all of which are highly uncertain, rapidly changing and cannot be predicted.
Such impacts are expected to adversely affect our profitability, cash flows, financial results, and capital resources for a significant period of time.
−Removed: The COVID-19 pandemic and the volatile regional and global economic conditions stemming from the pandemic could also precipitate or aggravate the other risk factors that we identify in our Annual Report on Form 10-K for the year ended December 31, 2019, which could materially adversely affect our business, financial condition, results of operations (including revenue, profitability and cash flow) and/or stock price.
Further, the COVID-19 pandemic may also adversely affect our operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our operations.
−Removed: The economic disruption caused by the COVID-19 pandemic is adversely affecting our ability to generate cash to support our continuing operations, implement our growth plans, pay quarterly dividends, resume our stock repurchase program, and make interest and other payments with respect to our indebtedness and other obligations.
−Removed: We depend upon our operations to generate strong cash flows to support our operating activities, supply capital to finance our operations and growth, make capital expenditures and acquisitions, manage our debt levels, and return value to our shareholders through dividends and stock repurchases.
−Removed: The economic disruption caused by the COVID-19 pandemic is adversely affecting our ability to generate sufficient cash flows from operations to support these activities and could adversely affect our ability to make interest and other payments with respect to our indebtedness and other obligations.
−Removed: We have taken steps to reduce operating costs and improve efficiency, including furloughing most of our associates and significantly reducing work weeks for most of the remaining associates.
−Removed: Such steps, and further changes we may make in the future to reduce costs, may negatively impact owner and guest satisfaction and our ability to attract and retain associates.
−Removed: For example, if furloughed personnel do not return to work with us when the COVID-19 pandemic subsides, including because
−Removed: they found new jobs during the furlough, we may experience operational challenges that impact owner satisfaction and demand for our products, which could limit our ability to grow and expand our business and could reduce our profits.
−Removed: We have also taken steps to reduce or defer planned inventory and corporate capital expenditures, which may negatively impact owner satisfaction and may make our products less attractive to prospective purchasers.
−Removed: We have temporarily suspended our stock repurchase program and the declaration and payment of quarterly cash dividends for the foreseeable future.
−Removed: The failure to repurchase stock and failure to pay dividends may negatively impact our reputation and investor confidence in us, which may negatively affect our stock price.
−Removed: In addition, we may not be able to generate sufficient cash from operations to service our indebtedness and other obligations.
−Removed: If we cannot make scheduled payments under any of the agreements governing our debt, we would be in default under such agreements, and the lenders under our Corporate Credit Facility could terminate their commitments to loan money.
−Removed: In the case of secured debt, such lenders and other creditors could foreclose on the assets securing such debt and apply the amounts realized from such foreclosures to repay amounts owed to them.
−Removed: Any of these actions would likely trigger cross-default or cross-acceleration provisions in our other debt instruments, which would allow the creditors under such instruments to exercise similar rights.
−Removed: If any of these actions were taken, we could be forced into restructuring, bankruptcy or liquidation.
−Removed: Our Corporate Credit Facility and our indentures contain various restrictive covenants.
−Removed: The failure to comply with such covenants could have an adverse effect on us.
−Removed: We may not be able to raise additional financing.
−Removed: The credit agreement that governs the Corporate Credit Facility and the indentures that govern our senior notes impose significant operating and financial restrictions on us, which, among other things, limit our ability and the ability of certain of our subsidiaries to incur debt, pay dividends and make other restricted payments, make loans and investments, incur liens, sell assets, enter into affiliate transactions, enter into agreements restricting subsidiaries’ ability to pay dividends and consolidate, merge or sell all or substantially all of their assets.
−Removed: All of these covenants and restrictions limit how we conduct our business.
−Removed: In addition, we are required to maintain a specified leverage ratio under the terms of the Corporate Credit Facility.
−Removed: Any failure to comply with the restrictions contained in the Corporate Credit Facility or the indentures governing our senior notes, including any failure to comply with financial maintenance covenants in the Corporate Credit Facility due to the negative effects of the COVID-19 pandemic on our revenue and results of operations or any failure to comply with the reporting covenants in the Corporate Credit Facility or the indentures governing our senior notes, may result in an event of default under our Corporate Credit Facility or the indentures governing our senior notes.
−Removed: If an event of default occurs and is not cured or waived, our obligations under the Corporate Credit Facility or the indentures could be accelerated.
−Removed: We may not have sufficient cash to repay any such debt.
−Removed: We may be required to raise additional capital to refinance our obligations under the Corporate Credit Facility or the indentures or support our operations.
−Removed: Our access to and cost of financing will depend on, among other things, global economic conditions, conditions in the global financing markets, the availability of sufficient amounts of financing, our prospects and our credit ratings, and the outlook for our industry as a whole.
−Removed: The terms of future debt agreements could include more restrictive covenants or require incremental collateral, which may further restrict our business operations or cause future financing to be unavailable due to our covenant restrictions then in effect.
−Removed: There is no guarantee that debt or equity financings will be available in the future on terms favorable to us or at all.
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.