Hilton Grand Vacations (HGV) risk factors, FY2024 10-K

Risks Related to Our Industry

1. 01Macroeconomic and other factors beyond our control can adversely affect and reduce demand for our products and services
2. 02Contraction 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
3. 03We are subject to business, financial and operating risks inherent to the timeshare and hospitality industry, any of which could reduce our revenues and limit opportunities for growth
4. 04We operate in a highly competitive industry
5. 05Any pandemic, epidemic and related events may have a material adverse effect on our business, financial condition and results of operations

Risks Related to the Operation of Our Business

1. 06We 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
2. 07We will rely on Hilton to consent to our use of its trademarks at new properties we manage in the future
3. 08Our business depends on the quality and reputation of the Hilton brands and affiliation with the Hilton Honors loyalty program
4. 09We rely on several critical marketing programs and activities to generate tour flow and contract sales and increase our revenues
5. 10We may experience financial and operational risks in connection with acquisitions and other opportunistic business ventures
6. 11Our dependence on development activities exposes us to project cost and completion risks
7. 12Our real estate investments subject us to numerous risks
8. 13Our 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
9. 14We 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
10. 15Third-party reservation channels may negatively affect our bookings for room rental revenues
11. 16Changes to estimates or projections used to assess the fair value of our assets, or operating results that are lower than our current estimates at certain locations, may cause us to incur impairment losses that could adversely affect our results of operations
12. 17Our insurance policies may not cover all potential losses
13. 18Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures, including as a result of the material weakness identified by management

Risks Related to the Sale of VOIs

1. 19A decline in developed or acquired VOI inventory or our failure to enter into and maintain fee-for-service agreements may have an adverse effect on our business or results of operations
2. 20Our ability to source VOI inventory and finance VOI sales may be impaired if we or the third-party developers with whom we do business are unable to access capital when necessary
3. 21terms and conditions and pricing of such bonding capacity are unacceptable to us, our business could be negatively affected
4. 22The sale of VOIs in the secondary market by existing members could cause our sales revenues and profits to decline
5. 23Development 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
6. 24If the default rates or other credit metrics underlying our timeshare financing receivables deteriorate, our timeshare financing receivable securitization program could be adversely affected
7. 25The expiration, termination or renegotiation of our management agreements could adversely affect our cash flows, revenues and profits
8. 26Fraudulent or illegal activity related to the sale and purchase of timeshares may deter consumers from purchasing our product
9. 27Increased activity by third-party exit companies' owners may adversely impact our business
10. 28Disagreements with VOI owners, HOAs and other third parties may result in litigation and/or loss of management contracts
11. 29Failure of HOA boards to levy sufficient fees, or the failure of members to pay those fees, could lead to inadequate funds to maintain or improve the properties we manage
12. 30If maintenance fees at our resorts are required to be increased, our product could become less attractive, and our business could be harmed

Risks Related to Technology and Cybersecurity

1. 31A failure to keep pace with developments in technology could impair our operations, competitive position or reputation

Risks Related to Legal and Regulatory Requirements

1. 32Our business is regulated under a wide variety of laws, regulations and policies in the United States and abroad, and failure to comply with these regulations could adversely affect our business
2. 33Finally, our resort management activities subject us to a number of laws and regulations, including those that relate to public lodging, food and beverage services, liquor licenses and labor and employment, among others
3. 34Changes in privacy law could adversely affect our ability to market our products effectively
4. 35United States or foreign environmental laws and regulations may cause us to incur substantial costs or subject us to potential liabilities
5. 36Changes in U.S. federal, state and local or foreign tax law, interpretations of existing tax law, or adverse determinations by tax authorities, could increase our tax burden or otherwise adversely affect our financial condition or results of operations
6. 37Failure to comply with laws and regulations applicable to our international operations may increase costs, reduce profits, limit growth or subject us to broader liability

Risks Related to Our Indebtedness

1. 38Certain of our debt agreements and instruments impose significant operating and financial restrictions on us, our restricted subsidiaries and the guarantors of our indebtedness, which may prevent us from capitalizing on business opportunities
2. 39In addition, our credit agreement related to our senior secured credit facilities contains affirmative covenants that will require us to be in compliance with certain leverage and financial ratios
3. 40Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase
4. 41Servicing our indebtedness requires a significant amount of cash. Our ability to generate sufficient cash depends on many factors, some of which are not within our control
5. 42Our failure to comply with the agreements relating to our outstanding indebtedness could result in an event of default that could materially and adversely affect our results of operations and our financial condition
6. 43Repayment of our debt is dependent on cash flow generated by our subsidiaries, which may be subject to limitations beyond our control
7. 44Despite our current level of indebtedness, we may be able to incur substantially more debt and enter into other transactions, which could further exacerbate the risks to our financial condition described above

Risks Related to the Integration of Diamond

1. 45We may not be able to integrate the acquired Diamond business successfully
2. 46Our ability to successfully integrate the Diamond business depends on our compliance with the license agreement and ability to meet certain targets under the rebrand plan
3. 47Our results will suffer if we do not effectively manage our expanded operations resulting from the Diamond Acquisition
4. 48We may be subject to complaints, litigation or reputational harm due to dissatisfaction with, or concerns related to, the Diamond Acquisition from our and former Diamond owners
5. 49Interests in the acquired Diamond resorts are offered through a trust system, which is subject to a number of regulatory and other requirements

Risks Related to the Integration of Bluegreen

1. 50We 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
2. 51Our 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
3. 52We incurred substantial transaction costs in connection with the Bluegreen Acquisition
4. 53We and Bluegreen may be subject to complaints, litigation or reputational harm due to dissatisfaction with, or concerns related to, the acquisition from our current owners
5. 54Our future results will suffer if we do not effectively manage our expanded operations and integrate Bluegreen
6. 55Bluegreen may have liabilities that exceed our estimates, and any such liabilities could adversely affect our financial results and condition
7. 56Interests in Bluegreen’s resorts are offered through a trust system, which is subject to a number of regulatory and other requirements

Risks Related to Ownership of Our Common Stock

1. 57Our board of directors may change significant corporate policies without stockholder approval
2. 58The interests of one of our stockholders, Apollo, may conflict with ours or yours in the future. 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
3. 59be 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
4. 60Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable
5. 61Consent 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
6. 62For many reasons, the market price of our common stock has been volatile in the past and may be influenced in the future by a number of factors, including the risks identified in this Annual Report on Form 10-K. These factors may result in short-term or long-term negative pressure on the value of our common stock
7. 63Future issuances of common stock by us may cause the market price of our common stock to decline
8. 64We cannot guarantee that we will repurchase our common stock pursuant to our share repurchase program or that our share repurchase program will enhance long-term shareholder value. Share repurchases could also increase the volatility of the price of our common stock and diminish our cash reserves
9. 65We 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

Risks Related to the Spin-Off

1. 66We may be responsible for U.S. federal income tax liabilities that relate to the spin-off
2. 67The spin-off and related transactions may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal distribution requirements
3. 68We could be required to assume responsibility for obligations allocated to Hilton or Park under the Distribution Agreement