Financial Performance and Challenges - Katmandu Park DR was closed in March 2024 due to financial, operational, and infrastructure challenges, leading to losses in the Sierra Parima segment in 2023[29]. - The fair value of long-lived fixed assets in the Sierra Parima segment was determined to be less than carrying value as of December 31, 2023, resulting in a fixed asset impairment[29]. - Sierra Parima segment recorded a fixed asset impairment of $46.7 million, resulting in a fair value of the investment being determined as zero[64]. Strategic Partnerships and Agreements - Falcon's Beyond Brands (FBB) entered into a licensing agreement with The Hershey Company in January 2024 to develop Hershey-branded location-based experiences[30]. - The Consultancy Services Agreement with QIC has a total contract value of up to approximately $83.1 million if all opportunities are won[80]. - The company has entered into licensing agreements with PBS Kids and Hershey to develop themed experiences[76]. Growth and Development Initiatives - Qiddiya Investment Company (QIC) invested approximately $30 million in Falcon's Creative Group (FCG), with $17.5 million received initially and the remaining $12 million released in April 2024[41]. - FCG has experienced rapid growth due to increased demand and project scope, necessitating additional resources and talent allocation[40]. - The planned Qiddiya water theme park will span over 252,000 square meters and feature 23 rides, including seven world-first attractions[43]. - The first-ever Dragon Ball theme park will cover over 500,000 square meters and include seven themed lands based on the original series[45]. - FCG has been engaged in the design of 26 different entertainment assets for Qiddiya, a planned tourism destination in Saudi Arabia, since 2018[94]. Operational Strategies - Falcon's is deploying an asset-efficient strategy in its Falcon's Beyond Destinations (FBD) business to enter new markets more quickly and reduce operational risks[48]. - The new strategy for FBD emphasizes building strategic relationships with commercial developers and brands, focusing on high-traffic properties[83]. - FBB launched a new brand name, Falcon's Attraction Systems & Technologies, to focus on sales of rides and attractions[84]. Client Relationships and Revenue - 58% of first-time clients have contracted for additional services, with returning clients averaging 60 times the scope of the initial project[81]. - FCG's largest customer, QIC, accounted for approximately 81% of FCG's revenue for the year ended December 31, 2023[93]. - As of April 26, 2024, FCG has 11 active agreements with QIC, each of which can be terminated at will with a notice period of 14 days[95]. Workforce and Employment - The company had 116 full-time employees as of December 31, 2023, with 102 based in Orlando and 14 in the Philippines[103]. - The joint ventures with Meliá had approximately 297 year-round, full-time employees as of December 31, 2023, with 161 in Spain and 136 in the Dominican Republic[107]. - A pre-agreement for a 5.0% wage increase in 2023 and 3.3% in 2024 was announced for employees in Spain covered by collective bargaining agreements[108]. - The company was awarded the Top Workplaces Orlando regional award for the second consecutive year in 2023[104]. Regulatory and Compliance Issues - FCG is subject to various government regulations, including those related to data privacy and environmental laws, which may incur substantial compliance costs[96][98]. - The company maintains insurance coverage for various liabilities, but there is no assurance that it will be adequate to cover all claims[111]. - FCG's operations are influenced by complex regulations that may change over time, impacting costs and operational risks[96]. Research and Development - The Falcon's X-Lab facility is being relocated to the new headquarters to enhance research and development capabilities[86]. - As of December 31, 2023, the company holds 9 issued utility patents in the US and 1 in China, covering various innovative technologies[87]. - The company aims to leverage in-depth data and insights to optimize character and storyline development for greater audience impact[67]. Performance Comparison - The Katmandu Park in Mallorca outperforms surrounding non-Katmandu Meliá hotels, achieving higher occupancy and average room rates[59].
Falcon's Beyond (FBYD) - 2023 Q4 - Annual Report