Bluegreen Vacations Holding Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

Segment Reporting

9 Months Ended

Sep. 30, 2020

13. Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is regularly reviewed by the chief operating decision maker (“CODM”) in assessing performance and deciding how to allocate resources. Reportable segments consist of one or more operating segments with similar economic characteristics, products and services, production processes, type of customer, distribution system or regulatory environment.

Prior to BVH’s spin-off of BBX Capital on September 30, 2020, BVH’s reportable segments were its then principal holdings: Bluegreen, BBX Capital Real Estate, BBX Sweet Holdings, and Renin. However, as a result of the spin-off of BBX Capital, BVH is a holding company whose operations primarily reflect its 93% ownership interest in Bluegreen. As a result, BVH’s CODM, who is also Bluegreen’s CODM, has determined that he will manage BVH’s operations in a manner consistent with how he manages Bluegreen’s operations. As a result, the Company’s results of operations are reported through two reportable segments: (i) Sales of VOIs and financing; and (ii) Resort operations and club management.

The sales of VOIs and financing segment includes Bluegreen’s marketing and sales activities related to the VOIs that it owns, Bluegreen’s VOIs they acquire under just-in-time and secondary market inventory arrangements, Bluegreen’s sales of VOIs through fee-for-service arrangements with third-party developers, Bluegreen’s consumer financing activities in connection with sales of VOIs that Bluegreen owns, and Bluegreen’s title services operations through a wholly-owned subsidiary.

The Resort operations and club management segment includes Bluegreen’s provision of management services activities for Bluegreen’s Vacation Club and for a majority of the HOAs of the resorts within Bluegreen’s Vacation Club. In connection with those services, Bluegreen also provides club reservation services, services to owners and billing and collections services to the Bluegreen Vacation Club and certain HOAs. Additionally, this segment includes revenue from Bluegreen’s Traveler Plus program, food and beverage and other retail operations, its rental services activities, and management of construction activities for certain of their fee-based developer clients.

The information provided for segment reporting is obtained from internal reports utilized by the Company’s CODM, and the presentation and allocation results of operations may not reflect the actual economic costs of the segments as standalone businesses. Due to the nature of our business, assets are not allocated to a particular segment, and therefore management does not evaluate the balance sheet by segment. If a different basis of allocation were utilized, the relative contributions of the segments might differ but the relative trends in the segments’ operating results would, in management’s view, likely not be materially impacted.

The amount set forth in the column “Bluegreen Corporate and Other” and in the column entitled “BVH Corporate” are general and administrative expenses that consist primarily of costs associated with administering the various support functions at its corporate headquarters, including executive compensation, legal, accounting, human resources, investor relations, and executive offices including corporate overhead for discontinued operations. Included in BVH Corporate selling and general administrative expenses are spin-off related costs associated with the acceleration of the vesting of unvested restricted stock awards and payments to settle BVH’s long-term incentive program for 2020 which in the aggregate resulted in $31.3 million of compensation expense for the three and nine months ended September 30, 2020.

The Company evaluates segment performance based on Adjusted EBITDA. See Management’s Discussion and Analysis of Financial Condition and Results of Operations for information regarding Adjusted EBITDA, including how we define Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income.

The table below sets forth the Company’s segment information for the three months ended September 30, 2020 (in thousands):



Revenue:	Sales of ‎VOIs and ‎financing		Resort ‎operations ‎and club ‎management		Bluegreen Corporate ‎and other		BVH Corporate	Elimination		‎Total

Sales of VOIs	$	59,265	$	—	$	—	—	$	—	$	59,265
Fee-based sales commission revenue		22,119		—		—	—		—		22,119
Other fee-based services revenue		1,281		26,550		—	—		—		27,831
Cost reimbursements		—		15,684		—	—		—		15,684
Mortgage servicing revenue		1,403		—		—	—		(1,403)		—
Interest income		19,049		—		623	127		(453)		19,346
Other revenue		—		—		—	—		—		—
Total revenue		103,117		42,234		623	127		(1,856)		144,245

Costs and expenses:

Cost of VOIs sold		3,597		—		—	—		—		3,597
Net carrying cost of VOI inventory		8,580		—		—	—		(8,580)		—
Cost of other fee-based services		800		11,481		—	—		8,580		20,861
Cost reimbursements		—		15,684		—	—		—		15,684
Selling, general and administrative expenses		59,502		—		20,254	41,583		(406)		120,933
Mortgage servicing expense		997		—		—	—		(997)		—
Interest expense		3,910		—		3,409	1,102		(453)		7,968
Total costs and expenses		77,386		27,165		23,663	42,685		(1,856)		169,043
Other (expense) income		—		—		(365)	26		—		(339)
Income (loss) before non-controlling interest and (benefit) provision for income taxes	$	25,731	$	15,069	$	(23,405)	(42,532)	$	—	$	(25,137)

Add: Depreciation and amortization		1,405		208
Add: Severance		208		114
Segment Adjusted EBITDA	$	27,344	$	15,391

‎

The table below sets forth the Company’s segment information as of and for the three months ended September 30, 2019 (in thousands):



Revenue:	Sales of ‎VOIs and ‎financing		Resort ‎operations ‎and club ‎management		Bluegreen Corporate ‎and other			BVH Corporate	Elimination		‎Total

Sales of VOIs	$	66,318	$	—	$	—	$	—	$	—	$	66,318
Fee-based sales commission revenue		60,478		—		—		—		—		60,478
Other fee-based services revenue		4,289		29,455		—		—		—		33,744
Cost reimbursements		—		17,883		—		—		—		17,883
Mortgage servicing revenue		1,588		—		—		—		(1,588)		—
Interest income		20,043		—		2,038		705		(1,200)		21,586
Other income, net		—		—		—		(45)		73		28
Total revenue		152,716		47,338		2,038		660		(2,715)		200,037

Costs and expenses:

Cost of VOIs sold		3,121		—		—		—		—		3,121
Net carrying cost of VOI inventory		5,878		—		—		—		(5,878)		—
Cost of other fee-based services		2,442		14,552		—		—		5,878		22,872
Cost reimbursements		—		17,883		—		—		—		17,883
Selling, general and administrative expenses		95,672		—		22,388		11,926		46		130,032
Mortgage servicing expense		1,561		—		—		—		(1,561)		—
Interest expense		5,062		—		5,326		2,566		(1,200)		11,754
Total costs and expenses		113,736		32,435		27,714		14,492		(2,715)		185,662
Other income		537		—		1,609		58		—		2,204
Income (loss) before non-controlling interest and (benefit) provision for income taxes	$	39,517	$	14,903	$	(24,067)	$	(13,774)	$	—	$	16,579

Add: Depreciation and amortization		1,507		321
Add: Bass Pro Settlement		594		238
Segment Adjusted EBITDA	$	41,618	$	15,462

‎

The table below sets forth the Company’s segment information as of and for the nine months ended September 30, 2020 (in thousands):


Revenue:	Sales of ‎VOIs and ‎financing		Resort ‎operations ‎and club ‎management		Bluegreen Corporate ‎and other			BVH Corporate	Elimination		‎Total

Sales of VOIs	$	113,447	$	—	$	—	$	—	$	—	$	113,447
Fee-based sales commission revenue		64,619		—		—		—		—		64,619
Other fee-based services revenue		5,353		78,205		—		—		—		83,558
Cost reimbursements		—		46,654		—		—		—		46,654
Mortgage servicing revenue		4,508		—		—		—		(4,508)		—
Interest income		58,258		—		3,388		841		(2,524)		59,963
Other revenue		—		—		—		—		—		—
Total revenue		246,185		124,859		3,388		841		(7,032)		368,241

Costs and expenses:

Cost of VOIs sold		8,734		—		—		—		—		8,734
Net carrying cost of VOI inventory		27,407		—		—		—		(27,407)		—
Cost of other fee-based services		2,989		30,711		—		—		27,407		61,107
Cost reimbursements		—		46,654		—		—		—		46,654
Selling, general and administrative expenses		174,969		—		48,603		58,810		(1,145)		281,237
Mortgage servicing expense		3,363		—		—		—		(3,363)		—
Interest expense		12,745		—		11,932		5,515		(2,524)		27,668
Total costs and expenses		230,207		77,365		60,535		64,325		(7,032)		425,400
Other income, net		—		—		41		145		—		186
Income (loss) before non-controlling interest and (benefit) provision for income taxes	$	15,978	$	47,494	$	(57,106)	$	(63,339)	$	—	$	(56,973)

Add: Depreciation and amortization		4,447		588
Add: Severance		3,977		1,347
Segment Adjusted EBITDA	$	24,402	$	49,429

‎

The table below sets forth the Company’s segment information as of and for the nine months ended September 30, 2019 (in thousands):


Revenue:	Sales of ‎VOIs and ‎financing		Resort ‎operations ‎and club ‎management		Bluegreen Corporate and other		BVH Corporate	Elimination		‎Total

Sales of VOIs	$	186,351	$	—	$	—	—	$	—	$	186,351
Fee-based sales commission revenue		161,033		—		—	—		—		161,033
Other fee-based services revenue		10,092		83,923		—	—		—		94,015
Cost reimbursements		—		48,933		—	—		—		48,933
Mortgage servicing revenue		4,621		—		—	—		(4,621)		—
Interest income		59,985		—		5,979	1,605		(3,600)		63,969
Other income, net		—		—		—	(127)		197		70
Total revenue		422,082