Bluegreen Vacations Holding Corporation (NYSE: BVH) (OTCQX: BVHBB) (the “Company" or “Bluegreen”) reported today its financial results for the quarter ended June 30, 2023.

Key Highlights as of and for the Quarter Ended June 30, 2023:

• Net income attributable to shareholders increased 23% to $21.9 million from $17.8 million in the prior year quarter.
• Diluted Earnings Per Share (“EPS”) increased 54% to $1.34 from $0.87 in the prior year quarter.
• Total revenue increased 11% to $260.6 million from $235.6 million in the prior year quarter.
• System-wide sales of vacation ownership interests (“VOIs”) increased 1% to $200.7 million from $198.5 million in the prior year quarter.⁽¹⁾
• Number of guest tours increased 1% to 66,916 from 66,376 in the prior year quarter.
• Vacation packages sold increased 17% to 47,114 compared to 40,395 in the prior year quarter.
• Vacation packages outstanding of 166,686 as of June 30, 2023, compared to 165,240 as of December 31, 2022 and 184,782 outstanding as of June 30, 2022.
• Adjusted EBITDA attributable to shareholders increased 17% to $40.7 million from $34.7 million in the prior year quarter. ⁽²⁾
• In April 2023, Bluegreen/Big Cedar Vacations LLC, a joint venture between the Company and Bass Pro Shops, acquired Branson Cedars Resort, an 80-acre property adjacent to the joint venture’s Wilderness Club at Big Cedar Resort.
• In May 2023, Bluegreen acquired an existing property in Nashville, Tennessee, to be converted into a 15-story timeshare resort.
• In June 2023, Bluegreen completed a private offering and sale of approximately $214.6 million of VOI receivable-backed notes.

Key Highlights as of and for the Six Months Ended June 30, 2023:

• Net income attributable to shareholders decreased 1% to $33.4 million from $33.8 million in the prior year period.
• Diluted Earnings Per Share (“EPS”) increased 26% to $2.05 from $1.63 in the prior year period.
• Total revenue increased 11% to $479.7 million from $430.6 million in the prior year period.
• System-wide sales of vacation ownership interests (“VOIs”) increased 5% to $367.7 million from $350.1 million in the prior year period.⁽¹⁾
• Number of guest tours increased 3% to 118,671 from 115,237 in the prior year period.
• Vacation packages sold increased 7% to 87,894 compared to 82,385 in the prior year period.
• Adjusted EBITDA attributable to shareholders increased 8% to $70.8 million from $65.7 million in the prior year period.⁽²⁾
• Free cash flow was an outflow of $58.5 million in the six months ended June 30, 2023, compared to an inflow of $61.1 million for the six months ended June 30, 2022, primarily as a result of the acquisition and development of real estate, an increase in VOI notes receivable originations and timing of changes in working capital.⁽³⁾

Alan B. Levan, Chairman and Chief Executive Officer of Bluegreen Vacations Holding Corporation, commented, “We continue to be excited by our overall performance, which drove a 17% increase in Adjusted EBITDA in the second quarter of 2023. We believe that the results in the second quarter reflect our dual focus on achieving growth while at the same time improving our profit margin. Not only did we achieve a second quarter record $200.7 million of system-wide sales, but we achieved this while also reducing our selling and marketing costs to 53% of system-wide sales in the second quarter of 2023 compared to 57% in the second quarter of 2022. Our focus on improving the efficiency of our vacation package marketing programs drove marketing costs down, while also producing a 17% increase in vacation package sales in the second quarter of 2023 compared to the second quarter of 2022. In addition, we realized lower sales commission expense as a percentage of system-wide sales during the 2023 quarter compared to the 2022 quarter.”

“Our system-wide sales were 1% higher in the second quarter of 2023 as compared to the second quarter of 2022. This increase reflected the impact of a 1% increase in guest tours over the prior year quarter, at a consistent sales volume per guest of approximately $3,013. Had it not been for the out of service units in certain Florida properties because of hurricanes in 2022, we believe we would have achieved greater efficiencies and sales of VOIs and we expect to continue to increase efficiency as more of these units are returned to our system in the coming months. We continue to improve our average sales price per transaction, which increased 4% to $21,456 during the 2023 quarter compared to the 2022 quarter.”

“Our sales of VOIs are driven by the success of our marketing programs, and Bluegreen’s marketing to new customers generally begins with the sale of a vacation package to a prospect. During the second quarter of 2023, we sold 47,114 vacation packages, a 17% increase from the 40,395 we sold in the second quarter of 2022. This increase was despite closing or going ‘virtual’ at 52 marketing locations on January 1, 2023. During the second quarter, we reopened four of these locations and are pleased with the early results.”

“We continue to see high demand for leisure travel and specifically for the Bluegreen Vacation Club, and we are pursuing a strategy to expand the offerings of vacation experiences for our owners in some of the most desirable locations in the country. In April 2023, Bluegreen/Big Cedar Vacations LLC, our joint venture with Bass Pro Shops, acquired the Branson Cedars Resort in Branson, Missouri, an 80-acre property with existing “tiny home” cottages, cabins, treehouses, and resort amenities, and with future development planned. In May 2023, we acquired a 15-story hotel in the historic Printers Alley district of Nashville, Tennessee. These acquisitions are the latest new properties added by Bluegreen in the last year, in addition to adding Presidential Suites and other units at certain of our existing resorts. While we expect that these expansion initiatives will in the future produce higher revenues and earnings, in the short-term the increased inventory carrying costs and start-up costs put pressure on our operating margin, as well as involve increased or higher acquisition and development expenditures which adversely impacted our free cash flow during 2023 to date.”

“Our strategy of increasing our note receivable portfolio from financed sales of VOIs is also contributing to Adjusted EBITDA. Net interest spread, which is the excess of interest income from VOI notes receivable over the interest expense from pledging and selling those VOI notes receivable in the capital markets, increased 11% to $21.5 million in the second quarter of 2023 from $19.3 million in the second quarter of 2022.”

“We were also pleased that our Adjusted EBITDA at Resort Management and Club Operations increased by 11% in the second quarter of 2023, to a record $23.1 million from $20.9 million in the second quarter of 2022. We believe that the results of this segment are important to our continued goal of generating recurring free cash flow and earnings.”

“We believe that, from a balance sheet perspective, we are well positioned to navigate uncertain economic conditions by virtue of our approximately $178.7 million of unrestricted cash on hand and $500.4 million of conditional availability under our lines of credit and receivable purchase facilities as of June 30, 2023. We also believe we have a level of protection from rising interest rates as 54% of our outstanding debt at June 30, 2023 bear interest rates that are currently fixed. We were pleased to complete a private offering and sale of $214.6 million of VOI receivable-backed notes in June 2023, which we believe evidences our continued ability to raise capital in the securitization markets. Our plan is to maintain what we believe to be a healthy balance sheet, while continuing our focus on growth and profitability over the long term.” Mr. Levan concluded.

Adjusted EBITDA Attributable to Shareholders was $40.7 million for the quarter ended June 30, 2023, including $41.4 million generated by the Sales of VOIs and Financing Segment and $23.1 million produced by the Resort Operations and Club Management segment, partially offset by $19.2 million of corporate overhead and other expenses and $4.6 million of Adjusted EBITDA attributable to a third-party non-controlling interest in Bluegreen/Big Cedar Vacations LLC. Please see the discussion of Segment Results below for further information.

Adjusted EBITDA Attributable to Shareholders was $70.8 million for the six months ended June 30, 2023, including $76.1 million generated by the Sales of VOIs and Financing Segment and $45.7 million produced by the Resort Operations and Club Management segment, partially offset by $42.4 million of corporate overhead and other expenses and $8.6 million of Adjusted EBITDA attributable to a third-party non-controlling interest in Bluegreen/Big Cedar Vacations LLC. Please see the discussion of Segment Results below for further information.

System-wide sales of VOIs increased 1% to $200.7 million during the three months ended June 30, 2023 from $198.5 million for the three months ended June 30, 2022. The number of guest tours was 1% higher in the 2023 second quarter compared to the 2022 second quarter, while sales volume per guest, or VPG, was relatively consistent between the quarters. The VPG performance in the second quarter of 2023 was driven by a 4% increase in average sales price per transaction, partially offset by a 70 basis-point decrease in the sale-to-tour conversion rate as we continued to focus on larger transaction sizes.

System-wide sales of VOIs increased 5% to $367.7 million during the six months ended June 30, 2023 from $350.1 million for the six months ended June 30, 2022. The number of guest tours was 3% higher, while VPG was relatively flat in the six months ended June 30, 2023, as compared to the six months ended June 30, 2022. The VPG performance in the six months ended June 30, 2023 was driven by a 6% increase in average sales price per transaction, partially offset by a 70 basis-point decrease in the sale-to-tour conversion rate.

Fee-based Sales Commission Revenue

VOI sales of third-party inventory, for which we earn a commission, represented 10% and 11% of System-wide Sales of VOIs during the three and six months ended June 30, 2023, respectively. Fee-based sales commission revenue on such sales was $13.9 million and $25.6 million during the three and six months ended June 30, 2023, respectively, which represented a commission rate of approximately 66% and 65% during those respective periods.

VOI sales of third-party inventory, for which we earn a commission, are expected to be between 9% and 12% of system-wide sales of VOIs for the remainder of 2023.

Provision for Loan Losses

The provision for loan losses as a percentage of gross sales of VOIs was approximately 16% during both the second quarter of 2023 and the second quarter of 2022. The provision for loan losses as a percentage of gross sales of VOIs was approximately 17% during the six months ended June 30, 2023, and 15% during the six months ended June 30, 2022. The increase in the provision for loan losses as a percentage of gross sales of VOIs during the first half of 2023 as compared to the comparable prior year period is primarily a result of a higher proportion of VOI sales that were financed by us, as we actively seek to grow our VOI notes receivable portfolio to generate additional interest income.

The provision for loan losses is expected to be between 16% and 18% of gross sales of VOIs during the remainder of 2023.

Cost of VOIs Sold

Cost of VOIs sold represented 12% and 13% of sales of VOIs in the second quarters of 2023 and 2022 and 12% of sales of VOIs during both six months ended June 30, 2023 and 2022, respectively.

Cost of VOIs sold is expected to be between 11% and 13% of sales of VOIs for the remainder of 2023.

Net Carrying Cost of Inventory

The net carrying cost of inventory increased 18% to $4.7 million in the second quarter of 2023 from $4.0 million in the second quarter of 2022. The net carrying cost of inventory increased 20% to $9.7 million for the six months ended June 30, 2023, from $8.1 million for the six months ended June 30, 2022. The increase in net carrying cost of inventory reflects lower rental and sampler revenue, partially offset by lower maintenance fees and developer subsidies based on the timing of acquisitions of VOI inventory. Recent and planned acquisitions of VOI inventory are expected to increase developer subsidies in the near future.

Selling and Marketing Expenses

Selling and marketing expenses decreased 5% to $106.6 million in the second quarter of 2023 compared to $112.6 million in the second quarter of 2022, despite the 1% increase in system-wide sales during the 2023 quarter compared to the 2022 quarter. As a percentage of system-wide sales, selling and marketing expenses decreased to 53% in the second quarter of 2023 compared to 57% in the second quarter of 2022. The decrease in selling and marketing expenses as a percentage of system-wide sales was driven by decreases in our marketing costs and sales commissions expense and a higher proportion of sales to existing owners, which are generally more profitable than sales to new customers. Sales to new owners increased to 55% of system-wide sales in the second quarter of 2023 from 54% in the second quarter of 2022.

Selling and marketing expenses increased 1% to $199.1 million for the six months ended June 30, 2023, compared to $196.5 million for the six months ended June 30, 2022, primarily driven by the 5% increase in system-wide sales during the 2023 period compared to the 2022 period. As a percentage of system-wide sales, selling and marketing expenses decreased to 54% for the six months ended June 30, 2023, compared to 56% for the six months ended June 30, 2022. The decrease in selling and marketing expenses as a percentage of system-wide sales was driven by decreases in our marketing cost and sales commissions expense, both as a percentage of system-wide sales. Sales to existing owners, which are generally more profitable than sales to new customers, increased to 58% of system-wide sales for the six months ended June 30, 2023, from 55% for the six months ended June 30, 2022.

Marketing expense decreased during the 2023 periods as a result of the previously disclosed transition of kiosks at certain Cabela’s stores to an unmanned, virtual format and exited certain kiosks at malls as of January 1, 2023. The operation of fewer locations lowered overall costs and allowed us to focus on higher producing locations. As a result, even with fewer locations, we increased the number of vacation packages sold in the second quarter and the first half of 2023 by 17% and 7%, respectively, over the prior periods. The active pipeline of vacation packages decreased to 166,686 at June 30, 2023 from 184,782 at June 30, 2022 based on vacation packages used or expired, net of new vacation package sales. During the second, third and fourth quarters of 2022, we reorganized our retail marketing operations temporarily reducing our package sales and pipeline of vacation packages. While there is no assurance that this will continue to be the case, historically, approximately 40%-42% of vacation packages resulted in guest tours at one of Bluegreen’s resorts with a sales center within twelve months of purchase. In addition to this active pipeline, Bluegreen also has a pipeline of approximately 16,400 vacation packages held by customers who already toured and purchased a VOI who have indicated they would tour again.

Selling and marketing expenses are expected to be between 53% and 55% as a percentage of system-wide sales during the remainder of 2023.

General & Administrative Expenses from Sales & Marketing Operations

General and administrative expenses representing expenses directly attributable to sales and marketing operations increased 7% to $15.0 million during the second quarter of 2023 from $14.0 million during the second quarter of 2022 and increased 11% to $26.5 million during the six months ended June 30, 2023 from $23.9 million during the six months ended June 30, 2022. As a percentage of system-wide sales of VOIs, general and administrative expenses attributable to sales and marketing operations were 7% during each such periods.

General and administrative expenses representing expenses directly attributable to sales and marketing operations as a percentage of sales are expected to be between 6% and 8% as a percentage of system-wide sales for the remainder of 2023.

Financing Revenue and Financing Expense

Interest income on VOI notes receivable increased 25% to $29.3 million in the second quarter of 2023 compared to $23.4 million in the second quarter of 2022. Interest income on VOI notes receivable increased 26% to $57.2 million for the six months ended June 30, 2023, compared to $45.5 million for the six months ended June 30, 2022. The increase in interest income on VOI notes receivable reflects a higher balance of VOI notes receivable due to continued VOI sales growth and our efforts to increase the amount of VOI sales that we finance.

Interest expense on receivable-backed notes payable increased 90% to $7.8 million in the second quarter of 2023 compared to $4.1 million in the second quarter of 2022. Interest expense on receivable-backed notes payable increased 95% to $14.6 million for the six months ended June 30, 2023, compared to $7.5 million for the six months ended June 30, 2022. The increase in interest expense on receivable-backed notes payable reflect higher outstanding receivable-backed notes payable and an increased weighted-average cost of borrowing, associated with increases in interest rates.

The increases in Resort operations and club management revenue and Adjusted EBITDA in the second quarter 2023 and the six months ended June 30, 2023 compared to the comparable prior year periods, primarily reflect an increase in management fees, higher reimbursed HOA resort operating costs and three additional resort management contracts, partially offset by higher labor costs of providing such services.

Corporate Overhead, Administrative Expenses, Interest Expense and Other

Corporate General and Administrative Expenses

Corporate general and administrative expenses increased 15% to $25.7 million during the second quarter of 2023 from $22.3 million during the second quarter of 2022. Corporate general and administrative expenses increased 10% to $52.4 million during the six months ended June 30, 2023, from $47.6 million during the six months ended June 30, 2022. The increases in expenses during the 2023 periods as compared to the 2022 periods were primarily associated with higher legal fees, insurance costs and information technology costs.

Interest Expense

Interest expense not related to receivable-backed debt was $10.0 million and $6.2 million during the second quarters of 2023 and 2022, respectively, and $19.6 million and $10.6 million during the six months ended June 30, 2023 and 2022, respectively. These increases were primarily due to an increase in outstanding debt and a higher weighted-average cost of borrowing due to increased interest rates in the 2023 periods.

Securitization of Vacation Ownership Receivables

In June 2023, Bluegreen completed a private offering and sale of approximately $214.6 million of VOI receivable-backed notes. The transaction consisted of the issuance of three tranches of notes (collectively, the “Notes”) with a weighted average coupon rate of approximately 6.32% and a maturity date in November 2038. The gross advance rate for the transaction was 85.5%. A portion of the proceeds from the Notes sale was used to pay down one of the Company’s receivable-backed debt facilities with the remainder of the proceeds expected to be used primarily for general corporate purposes.

Additional Information

For more complete and detailed information regarding the Company and its financial results, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 13, 2023, and its Quarterly Report on Form 10- Q for the three months ended June 30, 2023, which is expected to be filed with the SEC on or about August 2, 2023, and will be available on the SEC's website, https://www.sec.gov, and on the Company’s website, www.BVHCorp.com.

Non-GAAP Financial Measures

The Company refers to certain non-GAAP financial measures in this press release, including EBITDA, Adjusted EBITDA, System-wide Sales of VOIs, and Free Cash Flow. Please see the supplemental tables herein for how these terms are defined and for reconciliations of such measures to the most comparable GAAP financial measures.

About Bluegreen Vacations:

Bluegreen Vacations Holding Corporation (NYSE: BVH; OTCQX: BVHBB) is a leading vacation ownership company that markets and sells vacation ownership interests and manages resorts in popular leisure and urban destinations. The Bluegreen Vacation Club is a flexible, points-based, deeded vacation ownership plan with 71 Club and Club Associate Resorts and access to nearly 11,400 other hotels and resorts through partnerships and exchange networks.

For further information, please visit us at:

Bluegreen Vacations Holding Corporation: www.BVHCorp.com

Forward Looking Statements

Certain statements in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements are based on current expectations of management and can be identified by the use of words such as “believe”, “may”, “could”, “should”, “plans”, “anticipates”, “intends”, “estimates”, “expects”, and other words and phrases of similar import. Forward-looking statements involve risks, uncertainties, and other factors, many of which are beyond our control, that may cause actual results or performance to differ from those set forth or implied in the forward-looking statements. These risks and uncertainties include, without limitation, the risk that the Company is a holding company and, accordingly, will be largely dependent on dividends from Bluegreen to fund its expenses and obligations in future periods, and Bluegreen’s ability to pay dividends will depend on its results and may be limited by the terms of Bluegreen’s indebtedness; risks relating to Bluegreen’s business, operations, financial results, business strategy and prospects; risks related to general economic conditions, including increasing interest rates, inflationary trends, a potential recession and supply chain issues, and our ability to successfully navigate any adverse condition; competitive conditions; labor market conditions, including costs and shortages of labor, and its impact on Bluegreen’s operations and sales; risks related to changes made to our vacation package programs and their impact on sales, including that the goal of improving the efficiency of Bluegreen’s marketing expenditures may not result in the benefits anticipated; risks related to our investments in sales and marketing efforts and infrastructure, including their impact on our cash flow and the risk that they may not result in the benefits anticipated; risks related to resort acquisitions and our pursuit of acquisition and development opportunities, including that acquired resorts may not open when planned, the costs and risks of development and renovation activities, including potential construction delays and environmental issues may be greater than anticipated, that we may not be successful in identifying or consummating acquisition or development opportunities in the future, and that acquired or developed resorts may not be successfully operated or result in the benefits anticipated; risks relating to our liquidity and the availability of capital;, that the Company may not realize the benefits of its securitizations to the extent anticipated or at all, and that the Company’s receivable loan portfolio won’t perform as anticipated; the risk that our allowance for loan losses may not be adequate and, accordingly, may need to be increased in the future, the risk that Bluegreen’s default rates will increase and exceed expectations; risks related to Bluegreen’s efforts to address the actions of timeshare exit firms and the increase in default rates associated therewith are not successful, or otherwise; risks related to our indebtedness, including the potential for accelerated maturities and debt covenant violations; the impact of public health and general economic conditions, including inflation, on Bluegreen’s consumers, including their income and level of discretionary spending, and on consumer traffic at retail locations; the risk that our core strategy of primarily offering a ‘drive-to’ network of resorts will not continue to serve as a growth driver; the risk that resort operations and club management segment may not continue to produce recurring EBITDA and free cash flow; risks that Bluegreen’s current or future marketing alliances and arrangements, including its marketing arrangements with Bass Pro, NASCAR and the Choice Hotels program, may not be renewed and will expire pursuant to their terms and may not be profitable; the risk that vacation package sales, including those in the pipeline, may not convert to tours and/or VOI sales at anticipated or historical rates; the risk that efforts to reactivate older vacation packages which have not been used may not be successful; the risk that resort occupancies may not continue at current or historical levels or meet expectations; our ability to successfully implement strategic plans and initiatives, generate earnings and long-term growth may not result in increased sales, revenues or efficiencies, or otherwise be successful; risks that construction defects, structural failures or natural disasters at or in proximity to Bluegreen’s resort; risks related to expansion of the resort network in existing and to new locations, including that such expansion may not be successful and may increase the Company’s debt and decrease the Company’s free cash flow; risks related to the mix of sales to new customers and existing owners, including that the level of sales to new customers may not be maintained, or support net owner growth in the future; risks regarding the amount of shares, if any, which may be repurchased by the Company in the future, the benefits to the Company, if any, of repurchasing shares, the timing of any share repurchases, and the availability of funds for the repurchase of shares; the risk that quarterly dividend payments may not be declared at the current level in the future, on a regular basis as anticipated, or at all; and the additional risks and uncertainties described in the Company's filings with the SEC, including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (including the “Risk Factors” section thereof), which was filed on March 13, 2023, and the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2023, which is expected to be filed on August 2, 2023. The Company cautions that the foregoing factors are not exclusive. You should not place undue reliance on any forward-looking statement, which speaks only as of the date made. The Company does not undertake, and specifically disclaims any obligation, to update or supplement any forward-looking statements. In addition, past performance may not be indicative of future results.

The Company defines EBITDA as earnings, or net income, before taking into account income tax, interest income (excluding interest earned on VOI notes receivable), interest expense (excluding interest expense incurred on debt secured by VOI notes receivable), and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, adjusted to exclude amounts of loss (gain) on assets held for sale, share-based compensation expense, and items that the Company believes are not representative of ongoing operating results. Adjusted EBITDA Attributable to Shareholders is Adjusted EBITDA excluding amounts attributable to the non-controlling interest in Bluegreen/Big Cedar Vacations (in which Bluegreen owns a 51% interest). For purposes of the calculation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders, no adjustments were made for interest income earned on VOI notes receivable or the interest expense incurred on debt that is secured by such notes receivable because they are both considered to be part of the ordinary operations of the Company’s business.

The Company considers EBITDA, Adjusted EBITDA, and Adjusted EBITDA Attributable to Shareholders to be indicators of operating performance, and they are used by the Company to measure its ability to service debt, fund capital expenditures and expand its business. EBITDA and Adjusted EBITDA are also used by companies, lenders, investors and others because they exclude certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders are not recognized terms under GAAP and should not be considered as an alternative to net income or any other measure of financial performance or liquidity, including cash flow, derived in accordance with GAAP, or to any other method or analyzing results as reported under GAAP. The limitations of using EBITDA, Adjusted EBITDA or Adjusted EBITDA Attributable to Shareholders as an analytical tool include, without limitation, that EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders do not reflect (i) changes in, or cash requirements for, working capital needs; (ii) interest expense, or the cash requirements necessary to service interest or principal payments on indebtedness (other than as noted above); (iii) tax expense or the cash requirements to pay taxes; (iv) historical cash expenditures or future requirements for capital expenditures or contractual commitments; or (v) the effect on earnings or changes resulting from matters that the Company does not believe to be indicative of future operations or performance. Further, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often have to be replaced in the future, and EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders do not reflect any cash that may be required for such replacements. In addition, the Company’s definition of Adjusted EBITDA or Adjusted EBITDA Attributable to Shareholders may not be comparable to definitions of Adjusted EBITDA, Adjusted EBITDA Attributable to Shareholders or other similarly titled measures used by other companies.

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