
BBX Capital Corporation	BBX Capital Corporation					BBX Capital Corporation
Condensed Consolidated Statements of Operations and Comprehensive Income - Unaudited	Condensed Consolidated Statements of Operations and Comprehensive Income - Unaudited					Condensed Consolidated Statements of Operations and Comprehensive Income - Unaudited
(In thousands, except per share data)	(In thousands, except per share data)					(In thousands, except per share data)

		For the Three Months Ended		For the Nine Months Ended
		September 30,		September 30,			For the Three Months Ended September 30,		For the Nine Months Ended September 30,
		2018	2017 *As Adjusted	2018	2017 *As Adjusted		2019	2018	2019	2018
Revenues:
Sales of VOIs	$	70,698	62,453	195,412	176,094	$	66,318	70,698	186,351	195,412
Fee-based sales commissions		61,641	69,977	167,581	179,046		60,478	61,641	161,033	167,581
Other fee-based services		31,057	27,386	89,472	83,442		33,744	31,057	94,015	89,472
Cost reimbursements		16,900	14,097	47,157	40,660		21,111	16,900	58,705	47,157
Trade sales		43,803	44,718	126,114	96,369		47,660	43,803	138,705	126,114
Sales of real estate inventory		7,478	-	17,138	-		370	7,478	5,030	17,138
Interest income		21,157	21,035	63,738	63,065		21,797	21,157	64,730	63,738
Net (losses) gains on sales of real estate assets		(4)	(18)	4,798	1,668
Net gains on sales of real estate assets							399	-	11,395	4,802
Other revenue		1,673	1,248	4,282	3,652		3,237	1,669	7,540	4,278
Total revenues		254,403	240,896	715,692	643,996		255,114	254,403	727,504	715,692
Costs and Expenses:
Cost of VOIs sold		11,237	6,444	19,838	11,352		3,121	11,237	17,541	19,838
Cost of other fee-based services		19,937	17,182	53,983	48,663		23,746	19,937	66,538	53,983
Cost reimbursements		16,900	14,097	47,157	40,660		21,111	16,900	58,705	47,157
Cost of trade sales		28,960	31,810	88,051	73,773		31,860	28,957	94,978	88,045
Cost of real estate inventory sold		4,655	-	11,283	-		-	4,655	2,643	11,283
Interest expense		11,130	9,483	30,732	27,580		11,870	11,130	34,679	30,869
Recoveries from loan losses, net		(443)	(2,005)	(7,236)	(6,098)		(1,821)	(443)	(4,206)	(7,258)
Asset impairments, net		191	1,506	527	1,551
Net gains on cancellation of junior
subordinated debentures		-	-	-	(6,929)
Reimbursements of litigation costs and penalty		-	(2,113)	-	(11,719)
Impairment losses							4,030	193	6,786	549
Selling, general and administrative expenses		143,558	146,842	410,490	395,489		148,549	143,559	448,510	410,359
Total costs and expenses		236,125	223,246	654,825	574,322		242,466	236,125	726,174	654,825
Equity in net earnings of unconsolidated
real estate joint ventures		373	2,105	1,165	8,428
Equity in net earnings of unconsolidated real estate joint ventures							28,534	373	37,276	1,165
Foreign exchange gain (loss)		76	(105)	91	(312)		-	76	(24)	91
Income before income taxes		18,727	19,650	62,123	77,790		41,182	18,727	38,582	62,123
Provision for income taxes		(6,742)	(8,126)	(21,997)	(30,021)		(14,682)	(6,742)	(15,068)	(21,997)
Net income		11,985	11,524	40,126	47,769		26,500	11,985	23,514	40,126
Less: Net income attributable to noncontrolling interests		5,806	3,398	16,324	9,488		4,112	5,806	11,275	16,324
Net income attributable to shareholders	$	6,179	8,126	23,802	38,281	$	22,388	6,179	12,239	23,802

Basic earnings per share	$	0.07	0.08	0.25	0.39	$	0.24	0.07	0.13	0.25
Diluted earnings per share	$	0.06	0.08	0.24	0.36	$	0.24	0.06	0.13	0.24
Basic weighted average number of common
shares outstanding		93,193	98,073	95,722	98,408
Diluted weighted average number of common and
common equivalent shares outstanding		96,576	106,021	98,971	105,802
Basic weighted average number of common shares outstanding							92,587	93,193	93,002	95,722
Diluted weighted average number of common and common equivalent shares outstanding							94,059	96,576	94,306	98,971
Cash dividends declared per Class A common share	$	0.010	0.0075	0.030	0.0225	$	0.0125	0.010	0.0375	0.030
Cash dividends declared per Class B common share	$	0.010	0.0075	0.030	0.0225	$	0.0125	0.010	0.0375	0.030

Net income	$	11,985	11,524	40,126	47,769	$	26,500	11,985	23,514	40,126
Other comprehensive income, net of tax:
Unrealized (losses) gains on securities available for sale		(11)	16	(11)	62
Unrealized gain (loss) on securities available for sale							16	(11)	54	(11)
Foreign currency translation adjustments		65	418	62	301		(75)	66	151	62
Other comprehensive income, net		54	434	51	363
Other comprehensive (loss) income, net							(59)	55	205	51
Comprehensive income, net of tax		12,039	11,958	40,177	48,132		26,441	12,040	23,719	40,177
Less: Comprehensive income attributable
to noncontrolling interests		5,806	3,398	16,324	9,488
Less: Comprehensive income attributable to noncontrolling interests							4,112	5,806	11,275	16,324
Comprehensive income attributable to shareholders	$	6,233	8,560	23,853	38,644	$	22,329	6,234	12,444	23,853

* See Note 1 for a summary of adjustments.

See Notes to Condensed Consolidated Financial Statements - Unaudited	See Notes to Condensed Consolidated Financial Statements - Unaudited					See Notes to Condensed Consolidated Financial Statements - Unaudited

BBX Capital Corporation
Condensed Consolidated Statements of Cash Flows - Unaudited
(In thousands)

For the Nine Months Ended

September 30,

2018

2017
Operating activities:

Net income
$
40,126

47,769
Adjustment to reconcile net income to net cash

provided by operating activities:

Recoveries from loan losses and asset impairments, net

(6,709)

(4,547)
Provision for notes receivable allowances

35,866

32,066
Depreciation, amortization and accretion, net

18,550

15,066
Share-based compensation expense

10,717

10,119
Net gains on sales of real estate held-for-sale

(4,798)

(1,668)
Equity in earnings of unconsolidated real estate joint ventures

(1,165)

(8,428)
Return on investment in unconsolidated real estate joint ventures

5,233

11,465
Increase in deferred income tax

20,465

30,279
Net gains on cancellation of junior subordinated debentures

-

(6,929)
Interest accretion on redeemable 5% cumulative preferred stock

854

901
Increase in notes receivable

(48,492)

(29,526)
Increase in VOI inventory

(23,405)

(30,707)
Decrease (increase) in trade inventory

2,286

(5,613)
Decrease (increase) in real estate inventory

9,990

(7,733)
Increase in other assets

(24,705)

(12,657)
Increase in other liabilities

8,774

13,323
Net cash provided by operating activities

43,587

53,180
Investing activities:

Return of investment in unconsolidated real estate joint ventures

6,586

888
Investments in unconsolidated real estate joint ventures

(1,755)

(2,645)
Repayment of loans receivable

17,930

9,522
Proceeds from sales of real estate held-for-sale

17,121

10,601
Additions to real estate held-for-sale and held-for-investment

(1,102)

(933)
Purchases of property and equipment

(33,316)

(14,158)
Proceeds from the sale of property and equipment

569

-
Cash paid for acquisition, net of cash received

-

(58,418)
Decrease in cash from other investing activities

(5,072)

(373)
Net cash provided by (used in) investing activities

961

(55,516)
Financing activities:

Repayments of notes payable and other borrowings

(152,204)

(197,581)
Proceeds from notes payable and other borrowings

196,439

206,884
Redemption of junior subordinated debentures

-

(11,438)
Payments for debt issuance costs

(1,131)

(3,217)
Payments of interest on redeemable 5% cumulative preferred stock

(438)

(563)
Repurchase and retirement of Class A common stock

(60,141)

(6,213)
Purchase of noncontrolling interest

(258)

-
Proceeds from the exercise of stock options

245

62
Dividends paid on common stock

(2,822)

(2,136)
Distributions to noncontrolling interest

(8,263)

(3,920)
Net cash used in financing activities

(28,573)

(18,122)
Increase (decrease) in cash, cash equivalents and restricted cash

15,975

(20,458)
Cash, cash equivalents and restricted cash at beginning of period

409,247

346,317
Cash, cash equivalents and restricted cash at end of period
$
425,222

325,859



BBX Capital Corporation
Condensed Consolidated Statements of Changes in Equity - Unaudited
For the Nine Months Ended September 30, 2019 and 2018
(In thousands)

	Shares of							Accumulated
	Common Stock			Common				Other
	Outstanding			Stock		Additional		Comprehen-	Total	Non-
	Class			Class		Paid-in	Accumulated	sive	Shareholders'	controlling	Total
	A	B		A	B	Capital	Earnings	Income	Equity	Interests	Equity
Balance, December 31, 2017	85,689	13,963	$	857	140	228,331	354,432	1,708	585,468	82,054	667,522
Cumulative effect from the adoption of ASU 2016-01	-	-		-	-	-	252	(252)	-	-	-
Net income excluding $58 of loss attributable to redeemable noncontrolling interest	-	-		-	-	-	23,802	-	23,802	16,382	40,184
Other comprehensive income	-	-		-	-	-	-	51	51	-	51
Distributions to noncontrolling interests	-	-		-	-	-	-	-	-	(8,263)	(8,263)
Increase in noncontrolling interest from loan foreclosure	-	-		-	-	-	-	-	-	704	704
Purchase of noncontrolling interest	-	-		-	-	(587)	-	-	(587)	329	(258)
Class A common stock cash dividends declared	-	-		-	-	-	(2,492)	-	(2,492)	-	(2,492)
Class B common stock cash dividends declared	-	-		-	-	-	(541)	-	(541)	-	(541)
Purchase and retirement of common stock	(6,486)	-		(65)	-	(60,076)	-	-	(60,141)	-	(60,141)
Purchase and retirement of common stock from vesting of restricted stock awards	(375)	(137)		(4)	(1)	(3,777)	-	-	(3,782)	-	(3,782)
Conversion of common stock from Class B to Class A	27	(27)		1	(1)	-	-	-	-	-	-
Issuance of common stock from vesting of restricted stock awards	535	-		5	-	(5)	-	-	-	-	-
Issuance of common stock from exercise of options	27	-		-	-	245	-	-	245	-	245
Share-based compensation	-	-		-	-	10,717	-	-	10,717	-	10,717
Balance, September 30, 2018	79,417	13,799	$	794	138	174,848	375,453	1,507	552,740	91,206	643,946

Balance, December 31, 2018	78,379	14,841	$	784	148	161,684	385,789	1,215	549,620	87,988	637,608
Cumulative effect from the adoption of ASU 2016-02, net of income taxes and redeemable noncontrolling interest	-	-		-	-	-	(2,202)	-	(2,202)	-	(2,202)
Net income excluding $158 of loss attributable to redeemable noncontrolling interest	-	-		-	-	-	12,239	-	12,239	11,433	23,672
Purchase and retirement of common stock	(1,799)	-		(18)	-	(8,880)	-	-	(8,898)	-	(8,898)
Other comprehensive income	-	-		-	-	-	-	205	205	-	205
Distributions to noncontrolling interests	-	-		-	-	-	-	-	-	(3,664)	(3,664)
Class A common stock cash dividends declared	-	-		-	-	-	(2,933)	-	(2,933)	-	(2,933)
Class B common stock cash dividends declared	-	-		-	-	-	(726)	-	(726)	-	(726)
Share-based compensation	-	-		-	-	9,379	-	-	9,379	-	9,379
Balance, September 30, 2019	76,580	14,841	$	766	148	162,183	392,167	1,420	556,684	95,757	652,441

See Notes to Condensed Consolidated Financial Statements - Unaudited

BBX Capital Corporation

Notes to Condensed Consolidated Financial Statements - Unaudited

1. Organization and Basis of Financial Statement Presentation

Organization

BBX Capital Corporation and its subsidiaries (the “Company” or, unless otherwise indicated or the context otherwise requires, “we,” “us,” or “our”) is a Florida-based diversified holding company. BBX Capital Corporation as a standalone entity without its subsidiaries is referred to as “BBX Capital.”

BBX Capital has two classes of common stock. Holders of the Class A common stock are entitled to one vote per share, which in the aggregate represents 22% of the combined voting power of the Class A common stock and the Class B common stock. Class B common stock represents the remaining 78% of the combined vote. The percentage of total common equity represented by Class A and Class B common stock was 84% and 16%, respectively, at September 30, 2019. Class B common stock is convertible into Class A common stock on a share for share basis at any time at the option of the holder.

Basis of Financial Statement Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, these financial statements do not include all of the information and disclosures required by GAAP for complete financial statements.

In management’s opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, which include normal recurring adjustments, that are necessary for a fair statement of the condensed consolidated financial condition of the Company at September 30, ~~2018;~~2019; the condensed consolidated results of operations and comprehensive income of the Company for the three and nine months ended September 30, ~~2018~~2019 and ~~2017;~~2018; the condensed consolidated changes in equity of the Company for the three and nine months ended September 30, 2019 and 2018; and the condensed consolidated cash flows of the Company for the nine months ended September 30, ~~2018~~2019 and ~~2017.~~2018. Operating results for the three and nine months ended September 30, ~~2018~~2019 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2018~~2019 or any other future period.

These unaudited condensed consolidated financial statements and related notes are presented as permitted by Form 10-Q and should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018 (the ~~“2017~~“2018 Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on March ~~9, 2018.~~12, 2019.

The condensed consolidated financial statements include the accounts ~~of all~~ of BBX Capital’s wholly-owned subsidiaries, other entities in which BBX Capital or its subsidiaries hold controlling financial interests, and any VIEs in which BBX Capital or one of its consolidated subsidiaries is deemed the primary beneficiary of the VIE. All significant inter-company accounts and transactions have been eliminated in consolidation.

Certain amounts for prior periods have been reclassified to conform to the presentation for the current period’s presentation. The Company’s adoption of the new revenue recognition accounting standard on a full retrospective basis required the Company to restate certain previously reported results. For further details regarding the impact of adopting new accounting pronouncements, see “Recently Adopted Accounting Pronouncements” section below. In addition, the Company also reclassified $19.5 million of loans receivable to other assets in its condensed consolidated statement of financial condition as of December 31, 2017.period.

Principal Investments

The Company’s principal investments include Bluegreen Vacations Corporation (“Bluegreen” or “Bluegreen Vacations”), ~~real estate~~BBX Capital Real Estate LLC (“BBX Capital Real Estate”), Renin Holdings, LLC (“Renin”), and ~~real estate joint ventures, and middle market operating businesses.~~ IT’SUGAR, LLC (“IT’SUGAR”).

number of units in connection with their VOI ownership). ~~Bluegreen’s Club Resorts~~Bluegreen markets, sells, and ~~Club Associate Resorts~~manages VOIs in resorts, which are ~~primarily~~generally located in popular, high-volume, “drive-to” vacation ~~locations,~~destinations, including Orlando, Las Vegas, Myrtle Beach, Charleston, and ~~Charleston,~~New Orleans, among others. Through ~~Bluegreen’s~~its points-based system, the approximately ~~216,000~~219,000 owners in Bluegreen’s Vacation Club have the flexibility to stay at units available at ~~any of~~ its resorts and have access to ~~approximately 11,100~~over 11,350 other hotels and resorts through partnerships and exchange networks. ~~Bluegreen’s~~The resorts in which Bluegreen markets, sells, or manages VOIs were either developed or acquired by Bluegreen or were developed and are owned by third parties. Bluegreen earns fees for providing sales and marketing ~~platform is supported by exclusive marketing relationships with nationally-recognized consumer brands, such as Bass Pro~~services to third party developers. Bluegreen also earns fees for providing management services to the Vacation Club and ~~Choice Hotels. These marketing relationships drive sales within Bluegreen’s core demographic.~~

~~Prior to 2009, Bluegreen’s vacation ownership business consisted solely of the sale of VOIs in resorts that it developed or acquired. While it continues to conduct such sales~~homeowners’ associations (“HOAs”), mortgage servicing, VOI title services, reservation services, and construction design and development ~~activities, Bluegreen now also derives a~~

significant portion of its revenue from its capital-light business model, which utilizes Bluegreen’s expertise and infrastructure to generate both VOI sales and recurring revenue from third parties without the significant capital investment generally associated with the development and acquisition of resorts. Bluegreen’s capital-light business activities include sales of VOIs owned by third-party developers pursuant to which Bluegreen is paid a commission (“fee-based sales”) and sales of VOIs that it purchases under just-in-time (“JIT”) arrangements with third-party developers or from secondary market sources.services. In addition, Bluegreen provides ~~resorts and resort developers with other fee-based services, including resort management, mortgage servicing, title services and construction management. Bluegreen also offers~~ financing to qualified VOI purchasers, which generates significant interest income.

~~Prior~~BBX Capital Real Estate is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ventures. In addition, BBX Capital Real Estate owns a 50% equity interest in The Altman Companies, LLC (the “Altman Companies”), a developer and manager of multifamily apartment communities, and manages the legacy assets acquired in connection with the Company’s sale of BankAtlantic in 2012, including portfolios of loans receivable and real estate properties.

Renin is engaged in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home décor products and operates through its headquarters in Canada and two manufacturing and distribution facilities in the United States and Canada. In addition to its own manufacturing, Renin also sources various products and raw materials from China.

IT’SUGAR is a specialty candy retailer which operates approximately 100 retail locations in over 25 states and Washington D.C. Its products include bulk candy, candy in giant packaging, and novelty items that are sold at its retail locations, which include a mix of high-traffic resort and entertainment, lifestyle, mall/outlet, and urban locations across the ~~fourth quarter of 2017, Woodbridge Holdings, LLC~~United States.

In addition to its principal investments, the Company has investments in various operating businesses, including companies in the confectionery industry.

In 2016, Food for Thought Restaurant Group (“~~Woodbridge”~~FFTRG”), a wholly-owned subsidiary of BBX Capital, ~~owned 100% of Bluegreen’s common stock. During the fourth quarter of 2017, Bluegreen completed an initial public offering~~entered into area development and franchise agreements with MOD Super Fast Pizza (“~~IPO”~~MOD Pizza”) ~~of its common stock in which Bluegreen sold~~related to the ~~public 3,736,723 shares~~development of ~~its common stock and Woodbridge, as a selling shareholder, sold~~up to ~~the public 3,736,722 shares of Bluegreen’s common stock.~~approximately 60 MOD Pizza franchised restaurant locations throughout Florida. Through 2019, FFTRG had opened nine restaurant locations. As a result of ~~Bluegreen’s IPO, BBX Capital currently owns 90% of Bluegreen’s common stock through Woodbridge.~~

~~The Company’s real estate investments include real estate joint ventures~~FFTRG’s overall operating performance and the ~~acquisition,~~Company’s goal of streamlining its investment verticals, the Company entered into an agreement with MOD Pizza to terminate the area development ~~ownership, financing,~~ and ~~management~~franchise agreements and transferred seven of ~~real estate. The Company’s investments in middle market operating businesses include Renin Holdings, LLC (“Renin”), a company that manufactures products for~~its restaurant locations, including the ~~home improvement industry,~~related assets, operations, and investments in confectionery businesses through its wholly-owned subsidiary, BBX Sweet Holdings, LLC (“BBX Sweet Holdings”). The Company’s investments in confectionery businesses include IT’SUGAR, LLC (“IT’SUGAR”), a specialty candy retailerlease obligations, to MOD Pizza during the third quarter of 2019. In addition, the Company closed the remaining two locations and terminated the related lease agreements. In connection with ~~over 90 retail locations in 26 states and Washington, D.C. that was acquired by BBX Sweet Holdings in June 2017.~~

~~BBX Capital has two classes of common stock. Holders~~the transfer of the ~~Class A common stock are entitled~~seven restaurant locations to ~~one vote per share,~~MOD Pizza, the Company recognized an aggregate impairment loss of $4.0 million related to the disposal group, which inincluded property and equipment, intangible assets, and net lease liabilities, during the aggregate represents 22% of the combined voting power of the Class A common stock and the Class B common stock. Class B common stock represents the remaining 78% of the combined vote. The percentage of total common equity represented by Class A and Class B common stock was 85% and 15%, respectively, atthree months ended September 30, ~~2018. Class B common stock is convertible into Class A common stock on a share for share basis~~2019. In addition to the impairment losses recognized during the third quarter of 2019, the Company previously recognized $2.7 million of impairment losses associated with property and equipment at ~~any time at~~three restaurant locations. Accordingly, the ~~option~~Company recognized $6.7 million of impairment losses associated with its investment in MOD Pizza restaurant locations during the ~~holder.~~nine months ended September 30, 2019.

Recently Adopted Accounting Pronouncements

The Financial Accounting Standards Board (“FASB”) has issued the following Accounting Standards Updates (“ASU”) and guidance relevant to the Company’s operations which were adopted as of January 1, ~~2018:~~2019:

ASU No. ~~2014-09~~ 2016-02 – Leases (Topic 842)– .~~Revenue Recognition (Topic 606):~~ ~~In May 2014, the FASB issued a new~~This standard, ~~related to revenue recognition (as~~as subsequently ~~clarified~~amended and ~~amended~~clarified by various ~~ASUs). Under~~ASUs, requires lessees to recognize assets and liabilities for the ~~new standard, revenue is recognized when an entity satisfies a performance obligation~~rights and obligations created by transferring to a customer control over promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition,leases of assets. For income statement purposes, the standard retains a dual model which requires ~~disclosure of~~leases to be classified as either operating or finance based on criteria that are largely similar to those applied under prior lease accounting but without explicit bright lines. The standard also requires extensive quantitative and qualitative disclosures, including significant judgments and assumptions made by management in applying the ~~nature,~~standard, intended to provide greater insight into the amount, timing, and uncertainty of ~~revenue and~~ cash flows arising from ~~contracts with customers.~~leases.

~~The Company adopted the standard on January 1, 2018 under the full retrospective method, and accordingly, results for prior periods have been adjusted to apply the new standard as shown below.~~

The adoption of the standard affected Bluegreen in the following areas: (i) gross versus net presentation for payroll and insurance premium reimbursements related to resorts managed by Bluegreen and on behalf of third parties and (ii) the timing of the recognition of VOI revenue related to the removal of certain bright line tests regarding the determination of the adequacy of the buyer’s commitment under prior industry-specific guidance. Bluegreen concluded that the recognition of fee-based sales commissions, ancillary revenues, and rental revenues remained materially unchanged.

~~The adoption of the standard on the Company’s real estate activities results in recognizingrevenue sooner for contingent consideration on sales of real estate inventory.~~

The adoption of the standard did not materially affect revenue recognition associated with the Company’s trade sales. Retail trade sales performance obligations are generally satisfied at the time of the sales transaction as customers of the retail business typically pay in cash at the time of transfer of the promised goods, while wholesale trade sales performance obligations are generally satisfied when the promised goods are shipped by the Company or received by the customer. However, the Company has historically recognized shipping and handling costs in selling, general and

~~administration expenses, and upon the adoption of the standard, the Company began accounting for such costs as a fulfillment cost in cost of trade sales.~~

~~The Company has elected to use the following practical expedients in connection with the adoption of ASU 2014-09:~~

~~We utilize the transaction price upon completion of the contract for certain contracts with customers;~~

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less or unsatisfied performance obligations or unsatisfied promises to transfer a distinct good or service that forms a part of a single performance obligation recognized over time. See Note 2 for a further description of variable consideration identified in contracts with customers;

~~We expense all marketing and sales costs as incurred;~~

We exclude from the transaction price all taxes assessed by a governmental authority that are imposed on a specified transaction concurrent with the closing thereof and are collected by the Company from a customer;

~~We do not disclose remaining performance obligations for variable consideration when the variable consideration is allocated entirely to a wholly unsatisfied performance obligation;~~

~~We do not disclose remaining performance obligations when revenue is recognized based on the Company’s right to invoice;~~

~~We account for shipping and handling activities that occur after the control of the goods is transferred to a customer as fulfillment activities instead of a separate performance obligation;~~

~~We recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset is one year or less; and~~

We do not adjust the transaction price for the effects of a significant financial component if we expect, at the contract inception, that the performance obligations will be satisfied within one year or less.

~~ASU No. 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20).~~ This standard provides guidance on the recognition of gains and losses from the transfer of nonfinancial assets to non-customers and requires that an entity must identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a non-customer or counterparty and derecognize each asset when the counterparty obtains control of the asset.

This standard significantly changed the guidance on the transfer of real estate to unconsolidated joint ventures. Under prior guidance, the transfer of real estate to an unconsolidated joint venture was accounted for as a partial sale, resulting in the recognition of a partial gain, and the noncontrolling interest retained was measured at historical cost, resulting in a basis adjustment to the seller’s investment in the joint venture. In addition, the partial gain could be deferred if the sale did not satisfy certain criteria for gain recognition. As a result, the Company previously accounted for the transfer of land to certain unconsolidated real estate joint ventures for initial capital contributions as partial sales, resulting in deferred gains and joint venture basis adjustments. However, under the new standard, the full gain is recognized upon the transfer of control of real estate to an unconsolidated joint venture, and any noncontrolling interest retained is measured at fair value.

The Company adopted the standard on January 1, ~~2018~~2019 and applied the transition guidance as of the date of adoption under the ~~full retrospective method and, accordingly, prior years’ results have been adjusted to apply the new standard as shown below.~~

The following represents the impact of the adoption of ASU 2014-09 and ASU 2017-05 on our consolidated statements of financial condition as of December 31, 2017 and December 31, 2016 and consolidated statements of operations for the three and nine months ended September 30, 2017 and the years ended December 31, 2017 and 2016 (in thousands, except per share data):

For the Three Months Ended September 30, 2017

Prior to Adoption

ASU 2014-09 Adjustments

ASU 2017-05 Adjustments

As Adjusted
Statement of Operations:

Sales of VOIs
$
61,687

766

-

62,453
Cost reimbursements

-

14,097

-

14,097
Cost reimbursements

-

14,097

-

14,097
Cost of VOIs sold

6,284

160

-

6,444
Trade sales

44,877

(159)

-

44,718
Net loss on sales of real estate assets

(18)

-

-

(18)
Cost of trade sales

29,494

2,316

-

31,810
Selling, general and administrative expenses

149,021

(2,179)

-

146,842
Equity in earnings of unconsolidated

real estate joint ventures

2,451

-

(346)

2,105
Income before income taxes

19,686

310

(346)

19,650
Provision for income taxes

(8,195)

(64)

133

(8,126)
Net income

11,491

246

(213)

11,524
Less: Net income attributable to

noncontrolling interests

3,256

142

-

3,398
Net income attributable to shareholders
$
8,235

104

(213)

8,126
Basic earnings per share
$
0.08

0.08
Diluted earnings per share
$
0.08

0.08

For the Nine Months Ended September 30, 2017

Prior to Adoption

ASU 2014-09 Adjustments

ASU 2017-05 Adjustments

As Adjusted
Statement of Operations:

Sales of VOIs
$
172,839

3,255

-

176,094
Cost reimbursements

-

40,660

-

40,660
Cost reimbursements

-

40,660

-

40,660
Cost of VOIs sold

10,737

615

-

11,352
Trade sales

96,831

(462)

-

96,369
Net gains on sales of real estate assets

2,161

-

(493)

1,668
Cost of trade sales

68,027

5,746

-

73,773
Selling, general and administrative expenses

400,845

(5,356)

-

395,489
Equity in earnings of unconsolidated

real estate joint ventures

9,620

-

(1,192)

8,428
Income before income taxes

77,687

1,788

(1,685)

77,790
Provision for income taxes

(30,028)

(643)

650

(30,021)
Net income

47,659

1,145

(1,035)

47,769
Less: Net income attributable to

noncontrolling interests

9,467

21

-

9,488
Net income attributable to shareholders
$
38,192

1,124

(1,035)

38,281
Basic earnings per share
$
0.39

0.39
Diluted earnings per share
$
0.36

0.36

As of and for the Year Ended December 31, 2017

As Previously Reported

ASU 2014-09 Adjustments

ASU 2017-05 Adjustments

As Adjusted
Statement of Financial Condition:

Notes receivable, net
$
431,801

(4,943)

-

426,858
Investment in unconsolidated

real estate joint ventures

47,275

-

3,959

51,234
Property and equipment, net

112,858

(929)

-

111,929
Other assets

121,824

929

-

122,753
Other liabilities

103,926

-

(462)

103,464
Deferred income

36,311

(19,418)

-

16,893
Deferred income taxes

43,093

3,755

1,120

47,968
Total equity
$
653,501

10,720

3,301

667,522

Statement of Operations:

Sales of VOIs
$
239,662

2,355

-

242,017
Cost reimbursements

-

52,639

-

52,639
Cost reimbursements

-

52,639

-

52,639
Cost of VOIs sold

17,439

240

-

17,679
Trade sales

142,798

(713)

-

142,085
Net gains on sales of assets

2,442

-

(493)

1,949
Cost of trade sales

97,755

8,163

-

105,918
Selling, general and administrative expenses

538,125

(8,423)

-

529,702
Equity in earnings of unconsolidated

real estate joint ventures

14,483

-

(1,942)

12,541
Income before income taxes

93,374

1,662

(2,435)

92,601
Benefit for income taxes

7,223

954

1,525

9,702
Net income

100,597

2,616

(910)

102,303
Less: Net income attributable to

noncontrolling interests

18,402

(24)

-

18,378
Net income attributable to shareholders
$
82,195

2,640

(910)

83,925
Basic earnings per share
$
0.83

0.85
Diluted earnings per share
$
0.79

0.81

As of and for the Year Ended December 31, 2016

As Previously Reported

ASU 2014-09 Adjustments

ASU 2017-05 Adjustments

As Adjusted
Statement of Financial Condition:

Notes receivable, net
$
430,480

(4,680)

-

425,800
Investment in unconsolidated

real estate joint ventures

43,491

-

5,901

49,392
Property and equipment, net

95,998

(590)

-

95,408
Other assets

130,333

590

-

130,923
Other liabilities

95,611

-

(956)

94,655
Deferred income

37,015

(17,493)

-

19,522
Deferred income taxes

44,318

4,711

2,645

51,674
Total equity
$
495,454

8,102

4,212

507,768

Statement of Operations:

Sales of VOIs
$
266,142

7,732

-

273,874
Cost reimbursements

-

49,557

-

49,557
Cost reimbursements

-

49,557

-

49,557
Cost of VOIs sold

27,346

1,483

-

28,829
Trade sales

95,996

(157)

-

95,839
Net gains on sales of assets

6,076

-

(2,274)

3,802
Cost of trade sales

74,341

6,022

-

80,363
Selling, general and administrative expenses

516,757

(4,606)

-

512,151
Equity in earnings of unconsolidated

real estate joint ventures

13,630

-

(1,452)

12,178
Income before income taxes

78,036

4,676

(3,726)

78,986
Provision for income taxes

(36,379)

(1,448)

1,437

(36,390)
Net income

41,657

3,228

(2,289)

42,596
Less: Net income attributable to

noncontrolling interests

13,295

300

(429)

13,166
Net income attributable to shareholders
$
28,362

2,928

(1,860)

29,430
Basic earnings per share
$
0.33

0.34
Diluted earnings per share
$
0.32

0.34

~~On March 9, 2018,~~current-period adjustment method. As a result, the Company ~~filed~~recognized right-of-use assets and lease liabilities associated with its ~~2017 Annual Report which included in Item 8 – Note 2~~leases on January 1, 2019, with a cumulative-effect adjustment to the ~~consolidated financial statements~~opening balance of accumulated earnings, while the ~~expected impacts to reported results of the retrospective adjustments to~~comparable prior periods in the Company’s financial statements have been and will continue to be reported in accordance with Topic 840, including the disclosures of Topic 840.

The standard includes a number of optional practical expedients under the transition guidance. The Company elected the package of practical expedients which allowed the Company to not reassess prior conclusions about lease identification, lease classification, and initial direct costs. The Company also made accounting policy elections by class of underlying asset to not apply the recognition requirements of the standard to leases with terms of 12 months or less and to not separate non-lease components from lease components. Consequently, each separate lease component and the non-lease components associated with that lease component is accounted for ~~the years ended December 31, 2017~~as a single lease component for lease classification, recognition, and ~~2016 due to the~~measurement purposes.

Upon adoption of ~~ASU 2014-09 and ASU 2017-05. Subsequent to~~ the March 9, 2018 filing date, the Company revised its calculation of the expected impact of the full retrospective adoption of both standards, and the amounts included in the above tables reflect these revisions. The adoption of the new standards had no impact on our consolidated statements of cash flows.

~~ASU No. 2017-09, Compensation – Stock Compensation (Topic 718).~~ This update was issued to provide guidance on determining which changes to the terms and conditions of share-based compensation awards require an entity to apply modification accounting under Topic 718. Under this guidance, an entity must apply modification accounting to changes to terms or conditions of a share-based compensation award unless there is no change in the fair value, vesting or classification of the modified award as compared to the original award. The standard is effective for annual periods beginning after December 15, 2017 and for interim periods within those annual periods. The Company adopted this standard on January 1, ~~2018.~~ 2019, the Company recognized a lease liability of $123.2 million and a right-of-use asset of $113.2 million. The ~~adoption~~difference between the lease liability and right-of-use asset primarily reflects the reclassification of ~~this~~accrued straight-line rent and unamortized tenant allowances from other liabilities in the Company’s statement of financial condition to a reduction of the right-of-use asset. In addition, the Company recognized an impairment loss of $3.4 million in connection with the recognition of right-of-use assets for certain IT’SUGAR retail locations as a cumulative-effect adjustment to the opening balance of accumulated earnings. The implementation of the standard did not have a material impact on the Company’s ~~consolidated financial statements.~~

~~ASU No. 2017-01, Business Combinations - Clarifying the Definition~~statement of ~~a Business.~~This update was issued to clarify the determination of whether an entity has acquired or sold a business. The definition of a business affects many areas of accounting, including acquisitions, disposals, goodwilloperations and ~~consolidations, and the standard is intended to assist entities in the determination of whether transactions should be accounted for as acquisitions or disposals of assets or~~

businesses. The standard is expected to result in more acquisitions being accounted for as asset purchases instead of business combinations. The guidance is effective for fiscal years beginning after December 15, 2017. The Company adopted this standard on January 1, 2018 using the prospective transition method. The adoption of this standard resulted in the Company accounting for Bluegreen’s acquisition of the Éilan Hotel & Spa in April 2018 as an asset acquisition, and consequently, all transaction costs were capitalized as part of the assets acquired.

~~ASU No.2016-01 –– Financial Instruments – Overall (Topic 825) – Recognition and Measurement of Financial Assets and Financial Liabilities.~~This update requires all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) to generally be measured at fair value through earnings and eliminates the available-for-sale classification for equity securities with readily determinable fair values and the cost method for equity investments without readily determinable fair values. However, the update allows entities to elect to record equity investments without readily determinable fair values at cost, less impairments. This update also simplifies the impairment assessment for equity investments and requires the use of an exit price when measuring the fair value of financial instruments for disclosure purposes. The amendments in this standard are effective for fiscal years beginning after December 15, 2017. The Company adopted this standard on January 1, 2018 and recognized a cumulative effect adjustment of $0.3 million, net of tax, to accumulated earnings as of January 1, 2018 for equity securities with readily determinable fair values. The standard was adopted prospectively for $2.4 million of equity securities without readily determinable fair values. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

~~ASU No. 2018-02 –– Income Statement – Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.This update provides an entity with an option to reclassify to accumulated earnings the stranded tax effects within accumulated other~~ comprehensive income ~~associated with the reduction in the corporate income tax rate from the enactment~~or statement of the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”). The Company elected to adopt this update as of January 1, 2018 and reclassified the stranded income tax effects from the Tax Reform Act into accumulated earnings as of the adoption date. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

~~ASU No. 2018-05 –– Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.~~This update formally amended Topic 740 for the guidance previously provided by SEC Staff Accounting Bulletin No. 118 (“SAB 118”) related to the application of Topic 740 in the reporting period in which the Tax Reform Act was signed into law. The Company adopted SAB 118 in the fourth quarter of 2017, and therefore, the Company’s subsequent adoption of ASU 2018-05 in the first quarter of 2018 had no impact on its accounting for income taxes in the first quarter of 2018.cash flows. See Note 1012 for additional information regarding the Company’s ~~accounting for income taxes and the Tax Reform Act.~~lease agreements.

Future Adoption of Recently Issued Accounting Pronouncements

The FASB has issued the following accounting pronouncements and guidance relevant to the Company’s operations which ~~have~~had not been adopted by the Company as of September 30, ~~2018:~~

~~ASU No. 2016-02 – Leases (Topic 842), as subsequently amended by ASU 2018-01 and ASU 2018-11.~~This standard will require assets and liabilities to be recognized on the balance sheet of a lessee for the rights and obligations created by leases of assets with terms of more than 12 months. For income statement purposes, the standard retained a dual model which requires leases to be classified as either operating or finance based on criteria that are largely similar to those applied in current lease accounting, but without explicit bright lines. This standard also requires extensive quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases.

This standard, which will be effective for the Company on January 1, 2019, permits two methods of adoption: a modified retrospective transition method or an optional transition method. The modified retrospective transition method applies the standard’s transition guidance as of the beginning of the earliest comparable period presented in an entity’s financial statements, which results in financial statements for the current periods that are comparable to the financial statements for the prior periods presented. The optional transition method applies the transition guidance on the date of adoption with a cumulative-effect adjustment to the opening balance of retained earnings. Under this transition method, comparable prior periods in an entity’s financial statements in the year of adoption would continue to be reported in accordance with Topic 840, including the disclosures of Topic 840.

The Company expects that the implementation of this new standard will have a material impact on its consolidated financial statements and related disclosures as the Company had aggregate future minimum lease payments of $147.5

million at September 30, 2018 under its current non-cancelable lease agreements with various expiration dates between 2018 and 2030. The Company anticipates the recognition of additional assets and corresponding liabilities related to these leases on its consolidated statement of financial condition.

The Company anticipates adopting the standard on January 1, 2019 under the optional transition method, and accordingly, will not apply the new guidance in comparable prior periods presented in its financial statements in the year of adoption. The Company anticipates electing certain practical expedients available under the transition guidance within the standard, including the package of practical expedients which would allow the Company to not have to reassess under the new standard prior conclusions about lease identification, classification, and initial direct costs. The Company also expects to make accounting policy elections by class of underlying asset to not apply the recognition requirements of this standard to leases with a term of twelve months or less and to not separate non-lease components from lease components. If the election is made to not separate non-lease components from lease components, each separate lease component and the non-lease components associated with that lease component will instead be accounted for as a single lease component for lease classification, recognition, and measurement purposes.

The Company is currently in the process of evaluating its existing lease portfolio, including accumulating all of the necessary information required to properly account for leases under this standard. Other significant implementation matters include assessing the impact on the Company’s internal control over financial reporting and documenting and implementing new processes for accounting for its lease agreements.2019:

ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial ~~Instruments.~~Instruments (as subsequently amended and clarified by various ASUs). This standard introduces an approach of estimating credit losses on certain types of financial instruments based on expected losses and ~~will expand~~expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating its allowance for credit losses. In addition, the standard ~~will require~~requires entities to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination (i.e., by vintage year). The standard also allows entities to irrevocably elect to measure certain financial instruments within the scope of the standard at fair value upon the adoption of the standard. This standard will be effective for the Company on January 1, 2020. ~~Early adoption is permitted beginning on January 1, 2019.~~ The Company is currently evaluating the impact that ~~adopting~~ ASU 2016-13 may have on its consolidated financial statements.

ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. This standard modifies the disclosure requirements in Topic 820 related to the valuation techniques and inputs used in fair value measurements, uncertainty in measurement, and changes in measurements applied. This standard iswill be effective for the Company ~~in annual periods beginning after December 15, 2019 and for interim periods within those annual periods. Early adoption is permitted.~~on January 1, 2020. The Company ~~is currently evaluating the~~believes that this standard will not have a material impact ~~that ASU 2018-13 may have~~ on its consolidated financial ~~statement footnote~~statements and disclosures.

~~2. Revenue Recognition~~

~~Sales of VOIs -~~ Revenue is recognized for sales of VOIs after control of the VOI is deemed transferred to the customer, which is when the legal rescission period has expired on a binding executed VOI sales agreement and the collectability of the note receivable from the buyer, if any, is reasonably assured. Transfer of control of the VOI to the buyer is deemed to occur when the legal rescission period expires as the risk and rewards associated with VOI ownership are transferred to the buyer at that time. The Company records Bluegreen’s customer deposits from contracts within the legal rescission period in restricted cash and escrow deposits in the Company’s condensed consolidated statements of financial condition, as such amounts are refundable until the legal rescission period has expired. In cases where construction and development of Bluegreen’s developed resorts has not been substantially completed, Bluegreen defers all of the revenues and associated expenses for the sales of VOIs until construction is substantially complete and the resort may be occupied.

Bluegreen generally offers qualified purchasers financing for up to 90% of the purchase price of VOIs. The typical financing provides for a term of ten years and a fixed interest rate, is fully amortizing in equal installments and may be prepaid without penalty. For sales of VOIs for which Bluegreen provides financing, Bluegreen reduces the transaction price for expected loan losses, which it considers to be variable consideration. To the extent Bluegreen determines that it is probable that a significant reversal of cumulative revenue recognized may occur, it records an estimate of variable consideration as a reduction to the transaction price of the sales of VOIs until the uncertainty associated with the variable consideration is resolved. Bluegreen’s estimates of credit losses are based on the results of its static pool analysis, which relies on historical payment data for similar VOI notes receivable and tracks uncollectibles for each period’s sales over the entire life of the notes. Bluegreen also considers whether historical economic conditions are comparable to then current economic conditions, as well as variations in underwriting

~~standards. Bluegreen reviews its estimate of variable consideration on at least a quarterly basis. VOI sales where no financing was provided do not have any material significant payment terms.~~

Rental operations, including accommodations provided through the use of Bluegreen’s sampler program, are accounted for as incidental operations whereby incremental carrying costs in excess of incremental revenues are expensed as incurred. During each of the periods presented, Bluegreen’s aggregate rental revenue and sampler revenue was less than the aggregate carrying cost of its VOI inventory. Accordingly, Bluegreen recorded such revenue as a reduction to the carrying cost of VOI inventory, which is included in cost of other fee-based services in the Company’s condensed consolidated statements of operations and comprehensive income for each period.

~~Fee-based sales commissions -~~ ~~Fee-based sales commission r~~evenue is recognized when a sales transaction with a VOI purchaser is consummated in accordance with the terms of the fee-based sales agreement with the third-party developer, it is probable that a significant reversal of such revenue will not occur, and the related consumer rescission period has expired.

~~Other fee-based services and cost reimbursements -~~ ~~Revenue associated with Bluegreen’s other fee-based services (which are described below) is recognized as follows:~~

Resort and club management revenue and related cost reimbursements are recognized as services are rendered. These services provided to the resort homeowner associations (“HOAs”) are comprised of day-to-day services to operate the resort, including management services and certain accounting and administrative functions. Management services provided to the Vacation Club include managing the reservation system and providing owner, billing and collection services. Bluegreen’s management contracts are typically structured as cost-plus, with an initial term of three years and automatic one-year renewals. Bluegreen believes these services to be a series of distinct goods and services to be accounted for as a single performance obligation over time and recognizes revenue as the customer receives the benefits of its services. Bluegreen allocates variable consideration to the distinct good or service within the series, such that revenue from management fees and cost reimbursements is recognized in each period as the uncertainty with respect to such variable consideration is resolved.

~~Resort title fee revenue is recognized when escrow amounts are released and title documents are completed.~~

Rental revenues are recognized on a daily basis, which is consistent with the period for which the customer benefits from such service. Revenue from the sampler program is typically recognized within a year from sale as guests complete stays at the resorts.

~~Mortgage servicing revenue is recognized over time as services are rendered.~~

~~Bluegreen’s cost of other fee-based services consists of the costs associated with the various activities described above, as well as developer subsidies and maintenance fees on its unsold VOIs.~~

~~Trade sales –~~ ~~Revenue is recognized on trade sales as follows:~~

Revenue is recognized on wholesale trade sales when control of the products is transferred to customers, which generally occurs when the products are shipped or the customers accept delivery. Wholesale trade sales typically have payment terms between 10 and 90 days. Certain customer trade sale contracts have provisions for right of return, volume rebates, and price concessions. These types of discounts are accounted for as variable consideration, and the Company uses the expected value method with constraints to calculate the estimated reduction in the trade sales revenue. The inputs used in the expected value method include historical experience with the customer, sales forecasts, and outstanding purchase orders.

~~Revenue is recognized on retail trade sales at the point of sale, which occurs when products are sold at the Company’s retail locations.~~

~~Sales of real estate inventory -~~ Revenue is generally recognized on sales of real estate inventory to customers when the sales are closed and title passes to the buyer. The Company generally receives payment from the sale of real estate inventory at the date of closing. In addition, certain real estate sales contracts provide for a contingent purchase price which is accounted for as variable consideration. The Company estimates the amount of variable consideration that may be recognized upon the closing of the real estate transaction based on an expected value methodology. The estimate of variable consideration is recognized as revenue to the extent that it is not probable that a significant revenue reversal in the amount of cumulative revenue recognized will occur when the uncertainty associated with the variable consideration is subsequently resolved. The inputs used in the expected value model include current sales prices (net of incentives), historical contingent purchase price receipts, and sales contracts on similar properties.

~~Interest income -~~ Bluegreen provides financing for a significant portion of sales of its owned VOIs. Bluegreen recognizes interest income from financing VOI sales on the accrual method as earned based on the outstanding principal balance, interest rate, and terms stated in each individual financing agreement. Bluegreen’s VOI notes receivable are carried at amortized cost, less an allowance for loan losses. In addition, loan origination costs are deferred and recognized over the life of the related notes receivable. Interest income is suspended, and previously accrued but unpaid interest income is reversed, on all delinquent notes receivable when principal or interest payments are more than 90 days contractually past due and is not resumed until such loans are less than 90 days past due. As of September 30, 2018 and December 31, 2017, $17.0 million and $12.9 million, respectively, of Bluegreen’s VOI notes receivable were more than 90 days past due, and accordingly, were not accruing interest income. After 120 days, Bluegreen’s VOI notes receivable are generally written off against the allowance for loan losses.

Interest income from other loans receivable originated by the Company is recognized on accruing loans when management determines that it is probable that all of the principal and interest will be collected in accordance with the loan’s contractual terms. Interest income is recognized on non-accrual loans on a cash basis. Loans receivable are included in other assets in the Company’s statement of financial condition.

~~Net gains on sales of real estate assets –~~ Net gains on sales of real estate assets represents sales of assets to non-customers. Gains (or losses) are recognized from sales to non-customers when the control of the asset has been transferred to the buyer, which generally occurs when title passes to the buyer.

~~Other revenue –~~ Other revenue is primarily comprised of rental income from properties under operating leases. Rental income is recognized as rents become due, and rental payments received in advance are deferred until earned.

~~Disaggregated revenue –~~ ~~The table below sets forth the Company’s revenue disaggregated by category (in thousands):~~

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2018

2017

2018

2017
Sales of VOIs
$
70,698

62,453

195,412

176,094
Fee-based sales commissions

61,641

69,977

167,581

179,046
Other fee-based services

25,744

23,170

75,257

67,857
Cost reimbursements

16,900

14,097

47,157

40,660
Title fees

3,491

2,373

9,355

10,927
Other customer revenue

1,822

1,843

4,860

4,658
Trade sales - wholesale

17,671

21,388

56,024

65,963
Trade sales - retail

26,132

23,330

70,090

30,406
Sales of real estate inventory

7,478

-

17,138

-
Revenue from customers

231,577

218,631

642,874

575,611
Interest income

21,157

21,035

63,738

63,065
Net (losses) gains on sales of real estate assets

(4)

(18)

4,798

1,668
Other revenue

1,673

1,248

4,282

3,652
Total revenues
$
254,403

240,896

715,692

643,996

3.2. Consolidated Variable Interest Entities

Bluegreen sells VOI notes receivable through special purpose finance entities. These transactions are generally structured as non-recourse to Bluegreen and are designed to provide liquidity for Bluegreen and to transfer the economic risks and benefits of the notes receivable to third parties. In a securitization, various classes of debt securities are issued by the special purpose finance entities that are generally collateralized by a single tranche of transferred assets, which consist of VOI notes receivable. Bluegreen services the securitized notes receivable for a fee pursuant to servicing agreements negotiated with third parties generally based on market conditions at the time of the securitization.

In these securitizations, Bluegreen generally retains a portion of the securities and continues to service the securitized notes receivable. Under these arrangements, the cash payments received from obligors on the receivables sold are generally applied monthly to pay fees to service providers, make interest and principal payments to investors, and fund required reserves, if any, with the remaining balance of such cash retained by Bluegreen; however, to the extent

the portfolio of receivables fails to satisfy specified performance criteria (as may occur due to, among other things, an increase in default rates or credit loss severity) or other trigger events occur, the funds received from obligors are required to be distributed on an accelerated basis to investors. Depending on the circumstances and the transaction, the application of the accelerated payment formula may be permanent or temporary until the trigger event is cured. As of September 30, ~~2018,~~2019, Bluegreen was in compliance with all material terms under its securitization transactions, and no trigger events had occurred.

In accordance with the applicable accounting guidance for the consolidation of VIEs, Bluegreen analyzes its variable interests, which may consist of loans, servicing rights, guarantees, and equity investments, to determine if an entity in which Bluegreen has a variable interest is a VIE. The analysis includes a review of both quantitative and qualitative factors. Bluegreen bases its quantitative analysis on the forecasted cash flows of the ~~entity. Bluegreen bases~~entity and its qualitative analysis on the structure of the entity, including its decision-making ability and authority with respect to the entity, and relevant financial agreements. Bluegreen also uses qualitative analysis to determine if Bluegreen must consolidate a VIE as the primary beneficiary. In accordance with the applicable accounting guidance, Bluegreen has determined these securitization entities to be VIEs of which Bluegreen is the primary beneficiary and, therefore, Bluegreen consolidates the entities into its financial statements.

Under the terms of certain VOI note sales, Bluegreen has the right to repurchase or substitute a limited amount of defaulted notes for new notes at the outstanding principal balance plus accrued interest. Bluegreen’s voluntary repurchases and substitutions of defaulted notes ~~during~~for the nine months ended September 30, 2019 and 2018 ~~and 2017~~ were ~~$4.4~~$8.4 million and ~~$7.4~~$4.4 million, respectively. Bluegreen’s maximum exposure to loss relating to its non-recourse securitization entities is the difference between the outstanding VOI notes receivable and the notes payable, plus cash reserves and any additional residual interest in future cash flows from collateral.

The table below sets forth information regarding the assets and liabilities of Bluegreen’s consolidated VIEs included in the Company’s condensed consolidated statements of financial condition (in thousands):



		September 30,	December 31,		September 30,	December 31,
		2018	2017		2019	2018
Restricted cash	$	17,081	19,488	$	19,185	28,400
Securitized notes receivable, net		308,221	279,188		299,374	341,975
Receivable backed notes payable - non-recourse		335,680	336,421		341,856	382,257

The restricted cash and the securitized notes receivable balances disclosed in the table above are restricted to satisfy obligations of the VIEs.

The table below sets forth information ~~regarding~~relating to Bluegreen’s notes receivable and related allowance for loan losses (in thousands):

The weighted-average interest rate charged on Bluegreen’s notes receivable was ~~15.1%~~14.9% and ~~15.3%~~15.1% at September 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively. Bluegreen’s VOI notes receivable bear interest at fixed ~~rates.~~rates and are generally secured by property located in Florida, Missouri, Nevada, South Carolina, Tennessee, and Wisconsin.

Bluegreen monitors the credit quality of its receivables on an ongoing basis. Bluegreen holds large amounts of homogeneous VOI notes receivable and assesses uncollectibility based on pools of receivables as Bluegreen does not believe that there are no significant concentrations of credit risk with any individual counterparty or groups of counterparties. In estimating ~~future credit~~loan losses, Bluegreen does not use a single primary indicator of credit quality but instead evaluates its VOI notes receivable based upon a static pool analysis that incorporates the ~~age~~aging of the respective receivables, default trends, and prepayment rates by origination year, as well as the FICO scores of the borrowers.

The activity in Bluegreen’s allowance for loan losses (including notes receivable secured by homesites) was as follows (in thousands):

The table below sets forth information regarding the percentage of gross notes receivable outstanding by FICO score of the borrower at ~~origination, was as follows:~~

The table below sets forth information regarding the delinquency status of Bluegreen’s VOI notes receivable (in thousands):

~~Trade~~The Company’s trade inventory consisted of the following (in thousands):

Trade inventory is measured at the lower of cost or market. Cost includes all costs of conversions, including materials, direct labor, production overhead, depreciation of equipment, and shipping costs. Raw materials are stated at the lower of approximate cost, on a first-in, first-out or average cost basis, and market is determined by reference to replacement cost. Raw materials are not written down unless the goods in which they are incorporated are expected to be sold for less than cost, in which case, they are written down by reference to replacement cost of the raw materials. Finished goods and work in progress are stated at the lower of cost or market determined on a first-in, first-out or average cost basis. Shipping and handling fees billed to customers are recorded as trade sales, and shipping and handling fees paid by the Company are recorded as cost of goods sold.

In April 2019, the Company sold its remaining land parcels located at PGA Station in Palm Beach Gardens, Florida for net proceeds of $8.3 million and recognized a gain on sale of real estate of $1.8 million during the nine months ended September 30, 2019. In connection with the sale, the Company invested $2.1 million of the proceeds in the PGA Lender, LLC joint venture as described in Note 7 below.

In May 2019, the Company transferred RoboVault, a self-storage facility located in Fort Lauderdale, Florida, from property and equipment to real estate held-for-sale following a buyer’s completion of due diligence on the property and subsequently sold it to the buyer for net proceeds of $11.8 million. As a result of the sale, the Company recognized a gain on sale of real estate of $4.8 million during the nine months ended September 30, 2019.

In June 2019, the Company sold a land parcel located in St. Cloud, Florida that was previously held for investment for net proceeds of $8.7 million and recognized a gain on sale of real estate of $3.0 million during the nine months ended September 30, 2019.

As of September 30, ~~2018,~~2019, the Company had equity interests in 18 unconsolidated real estate joint ventures ~~primarily~~ involved in the development of ~~single-family master planned communities and,~~ multifamily apartment and townhome communities, as well as single-family master planned communities. In addition, the Company owns a 50% equity interest in the Altman Companies, a developer and manager of multifamily apartment communities.

Investments in unconsolidated real estate joint ventures are accounted for as unconsolidated ~~variable interest entities.~~VIEs. See Note 32 for information regarding the Company’s investments in consolidated ~~variable interest entities.~~VIEs.

~~Investments~~The Company’s investments in unconsolidated real estate joint ventures consisted of the following (in thousands):

During May 2018, the Company invested in a joint venture, Altis Ludlam – Miami Investor, LLC, to acquire land and obtain entitlements for a potential multifamily apartment development project located in Miami, Florida.

During August 2018, the Company invested in a joint venture, Altis Preserve, LLC, to acquire land and obtain entitlements for a potential multifamily apartment development project located in Odessa, Florida.

See Note 10 to the Company’s consolidated financial statements included in the ~~2017~~2018 Annual Report for the Company’s accounting policies ~~for analyzing~~relating to its investments in unconsolidated real estate joint ~~ventures.~~ventures, including the Company’s analysis and determination that such entities are VIEs in which the Company is not the primary beneficiary.

In April 2019, the Altis at Lakeline joint venture sold its 354 unit multifamily apartment community located in Cedar Park, Texas. As a result of the sale, the Company recognized $5.0 million of equity earnings and received approximately $9.3 million of distributions from the venture for the nine months ended September 30, 2019.

In April 2019, the PGA Design Center joint venture sold its remaining commercial buildings located in Palm Beach Gardens, Florida for $9.2 million and provided seller financing to the buyer for $4.6 million. As a result of the sale, the Company recognized $2.8 million of equity earnings and received approximately $2.3 million of distributions from the venture for the nine months ended September 30, 2019. As described below, the joint venture contributed the promissory note received from the buyer to a newly formed joint venture between the PGA Design Center joint venture and the Company.

In August 2019, the Altis at Bonterra joint venture sold its 314 unit multifamily apartment community located in Hialeah, Florida. As a result of the sale, the Company recognized $29.1 million of equity earnings and received approximately $46.0 million of distributions from the venture for the three and nine months ended September 30, 2019. In addition, prior to the sale, the Company received approximately $4.3 million of distributions from the venture during the nine months ended September 30, 2019 related to the operating profits of the venture.

In January 2019, the Company invested in L03/212 Partners, LLC, a joint venture formed to invest in the development of The Main Las Olas, a mixed-used project located in downtown Fort Lauderdale, Florida that is planned to be comprised of an office tower with approximately 365,000 square feet of leasable area, a residential tower with approximately 341 units, and approximately 45,000 square feet of ground floor retail. As of September 30, 2019, the Company had funded $1.9 million of its expected capital contribution of $4.0 million.

In April 2019, the Company invested $2.1 million in PGA Lender, LLC, a joint venture formed with the PGA Design Center joint venture to participate in the $4.6 million seller financing provided to the buyer of the PGA Design Center joint venture’s commercial buildings, as described above. In connection with the transaction, the Company contributed $2.1 million in cash in exchange for a 45.88% equity interest in the venture, while the PGA Design Center joint venture contributed the $4.6 million promissory note received from the buyer in exchange for $2.1 million in cash and a 54.12% equity interest in the venture.

In June 2019, the Company invested $4.2 million in Sky Cove, LLC, a joint venture formed to develop, construct, and sell 204 single family homes in Westlake, Florida.

In August 2019, the Company invested $4.5 million in Altis Vineland Pointe Manager, LLC, a joint venture formed to acquire land, obtain entitlements, and fund predevelopment costs for the development of a potential multifamily apartment community in Orlando, Florida.

Summarized Financial Information of Certain Unconsolidated Real Estate Joint Ventures

The condensed statements of operations for Altis at Bonterra – Hialeah, LLC were as follows (in thousands):

The condensed statements of financial condition for Altis at Bonterra – Hialeah, LLC were as follows (in thousands):

The table below sets forth information regarding the Company’s notes payable and other borrowings (dollars in thousands):

See Note 13 to the Company’s consolidated financial statements included in the ~~2017~~2018 Annual Report for additional information regarding the above listed notes payable and other borrowings.

New debt issuances and significant changes related to the above listed notes payable and other borrowings ~~during the nine months ended September 30, 2018~~ are detailed below.

~~Pacific Western Term Loan. - Bluegreen had~~In February 2019, the Meadow View at Twin Creeks Community Development District issued $8.1 million of community development bonds in order to fund the infrastructure improvements for Phase II of the Company’s Beacon Lake Community development and repay a ~~non-revolving term loan (the “Pacific Western Term Loan”)~~portion of the bonds previously issued in 2016 in connection with ~~Pacific Western Bank secured by unsold inventory~~Phase I of the development. The bonds issued in February 2019 have fixed interest rates ranging from 5.20% to 5.80% and ~~undeveloped land~~mature at various times during the years 2030 through 2049. The Company at its option has the ability to repay a specified portion of the bonds at the ~~Bluegreen Odyssey Dells Resort. During~~time that it sells developed lots in the ~~quarter ended~~Beacon Lakes Community.

In July 2019, the Company modified the Iberia $50.0 million revolving line of credit to, among other things, extend the maturity of the line of credit from March 6, 2020 to June 30, 2021 and remove a financial covenant regarding fixed charge coverage. Under the terms of the modified line of credit, the Company has the option to extend the maturity of the line of credit for a twelve-month period, subject to the satisfaction of certain conditions.

In September ~~30, 2018,~~2019, Bluegreen repaid in full its 2013 Notes Payable. Accordingly, the ~~then outstanding balance~~related unamortized debt issuance costs associated with the notes of $0.4 million were written off in the ~~Pacific Western Term Loan.~~ third quarter of 2019.

~~NBA Line of Credit.~~ ~~- Bluegreen/Big Cedar Vacations had~~In December 2016, Bluegreen entered into a $100.0 million syndicated credit facility with Fifth Third Bank, as administrative agent and lead arranger, and certain other bank participants as lenders. In October 2019, Bluegreen amended and restated the facility and increased the facility to $225.0 million. The amended facility includes a $100.0 million term loan (the “Fifth Third Syndicated Term Loan”) with quarterly amortization requirements and a $125.0 million revolving line of credit (the ~~“NBA~~“Fifth Third Syndicated Line of Credit”) with the National Bank of Arizona (“NBA”) with a borrowing limit of $20.0 million. The NBA Line of Credit provided for a revolving advance period expiring in September 2020 and maturity in March 2025 and was secured by unsold inventory and a building under construction at Bluegreen/Big Cedar Vacations’ The Cliffs at Long Creek Resort. During the quarter ended September 30, 2018, Bluegreen repaid in full the then outstanding balance of the NBA Line of Credit. In connection with such repayment, availability. Amounts borrowed under the ~~NBA Receivables Facility described below was increased by $20.0 million and there is no further availability under this line.~~

~~NBA Éilan Loan~~ – In April 2018, Bluegreen purchased the Éilan Hotel & Spa in San Antonio, Texas for approximately $34.3 million. In connection with the acquisition, Bluegreen entered into a non-revolving acquisition loan (the “NBA Éilan Loan”) with NBA. The NBA Éilan Loan provides for advances of up to $27.5 million, $24.3 million of which was used to fund the acquisition of the resort and up to an additional $3.2 million which may be drawn upon to fund certain future improvement costs over a 12-month advance period. Principal payments will be effected through release payments from sales of VOIs at the Éilan Hotel & Spa that serve as collateral for the NBA Éilan Loan, subject to a minimum amortization schedule, with the remaining balance due at maturity in April 2023. Borrowings under the NBA Éilan Loanamended facility generally bear interest at ~~an annual rate equal to one-month~~ LIBOR plus ~~3.25%, subject~~2.00% - 2.50% depending on Bluegreen’s leverage ratio, are collateralized by certain of Bluegreen’s VOI inventory, sales center buildings, management fees, short-term receivables, and cash flows from residual interests relating to ~~a floor of 4.75%. As of September 30, 2018, there was $24.3~~certain term securitizations, and will mature in October 2024. At closing, Bluegreen borrowed the entire $100.0 million ~~outstanding on the NBA Éilan Loan.~~

~~Toronto-Dominion Commercial Bank (“TD Bank”) Term Loan~~term loan and ~~Line of Credit -~~ ~~Renin has maintained a credit facility with TD Bank. Under the terms and conditions of the credit facility, TD Bank provides term loans for up to $1.7~~$30.0 million and loans under a revolving credit facility for up to approximately $16.3 million based on available collateral as defined in the facility and subject to Renin’s compliance with the terms and conditions of the facility, including certain specific financial covenants. In September 2018, the maturity date of the revolving credit portion of the facility was amended to extend the maturity date to September 2019. The maturity dates of the term loans under the ~~facility remain unchanged and are scheduled to mature between 2020 and 2022.~~

~~Iberia $50.0 million Revolving Line of Credit~~ - In March 2018, BBX Capital, BBX Sweet Holdings, Food for Thought Restaurant Group-Florida, LLC, the former BBX Capital Corporation, (“BCC”), and Woodbridge, entered into a Loan and Security Agreement and related agreements with IberiaBank (“Iberia”), as administrative agent and lender, and City National Bank of Florida, as lender, which provide for a $50.0 million revolving line of credit. ~~Amounts borrowed under~~Proceeds were used to repay the outstanding balance on the existing syndicated credit facility, ~~accrue interest at a floating rate of 30-day LIBOR plus a margin of 3.0%~~repay $3.6 million on the existing Fifth Third Bank Note Payable, and pay expenses and fees associated with the amendment, with the remainder to 3.75% or the Prime Rate plus a margin of 1.50% to 2.25%. The applicable margin is based on BBX Capital’s debt to EBITDA ratio. Payments of interest only are payable monthly. The facility matures, and all outstanding principal and interest will be payable, on March 6, 2020, with twelve-month renewal options at BBX Capital’s request, subject to satisfaction of certain conditions. The facility is secured by a pledge of a percentage of BBX Capital’s membership interests in Woodbridge having a value of not less than $100.0 million. Borrowings under the facility may be used for ~~business acquisitions, real estate investments, stock repurchases, letters of credit and~~ general corporate purposes.

~~other borrowers to incur additional indebtedness and to make certain loans and investments. As of September 30, 2018, there was $30.0 million outstanding on the line of credit.~~

~~Iberia $5.0 million Revolving Line of Credit~~ – BBX Sweet Holdings had a revolving line of credit with Iberia that was secured by the assets of BBX Sweet Holdings and its subsidiaries and guaranteed by the Company. During the quarter ended September 30, 2018, the Company repaid in full the then outstanding balance of the line of credit.

~~Banc of America Leasing & Capital Equipment Note –~~ In September 2018, IT’SUGAR entered into a Master Loan and Security Agreement with Banc of America Leasing & Capital, LLC which sets forth the terms and conditions pursuant to which IT’SUGAR may borrow funds to purchase equipment under one or more equipment security notes. The Agreement contains customary representations and covenants, including the submission of quarterly and annual financial statements to the lender. Each equipment note constitutes a separate, distinct and independent financing of equipment and is secured by a security interest in the purchased equipment and is an unconditional contractual obligation of IT’SUGAR. As of September 30, 2018, there was one equipment note outstanding with a balance of $0.6 million. The equipment note bears interest at a fixed rate of 4.75% per annum and is payable in 36 consecutive monthly principal and interest installments of $18,516 with a maturity date of September 2021. The equipment note is subject to a prepayment charge equal to one percent of the amount prepaid multiplied by the number of years or fraction thereof for the then remaining equipment note term.

~~Bank of America Revolving Line of Credit -~~ In August 2018, IT’SUGAR entered into a revolving credit facility with Bank of America. Under the terms and conditions of the credit facility, Bank of America has agreed to provide a revolving line of credit to IT’SUGAR for up to $4.0 million based on available collateral as defined by the credit facility and subject to IT’SUGAR’s compliance with the terms and conditions of the credit facility including certain specific financial covenants. The revolving credit facility is available through August 2021 and amounts outstanding bear interest at a LIBOR daily floating rate plus 1.50% or a monthly LIBOR rate subject to the terms and conditions of the credit facility. Payments of interest only will be payable monthly. There were no borrowings outstanding under the credit facility as of September 30, 2018.

Under the terms and conditions of this revolving line of credit, IT’SUGAR is required to comply with certain financial covenants, including quarterly and annual debt service coverage ratios. The facility also contains various covenants, including those that, among other things, limit the ability of IT’SUGAR to incur liens, make certain investments, or engage in certain asset acquisitions or dispositions.

The table below sets forth information regarding Bluegreen’s receivable-backed notes payable facilities (dollars in thousands):



		September 30, 2018					December 31, 2017					September 30, 2019					December 31, 2018
					Principal					Principal					Principal					Principal
					Balance of					Balance of					Balance of					Balance of
					Pledged/					Pledged/					Pledged/					Pledged/
		Debt	Interest		Secured		Debt	Interest		Secured		Debt	Interest		Secured		Debt	Interest		Secured
		Balance	Rate		Receivables		Balance	Rate		Receivables		Balance	Rate		Receivables		Balance	Rate		Receivables
Receivable-backed notes
payable - recourse:
Liberty Bank Facility	$	40,392	5.00%	$	48,589	$	24,990	5.00%	$	30,472	$	28,247	5.25%	$	34,545	$	17,654	5.25%	$	22,062
NBA Receivables Facility		40,297	4.83%		53,695		44,414	4.10%		53,730		35,809	4.79%		43,706		48,414	5.27%		57,805
Pacific Western Facility		17,081	5.84%		21,586		15,293	6.00%		19,516		30,848	4.92%		37,954		10,606	5.52%		13,730
Total	$	97,770		$	123,870	$	84,697		$	103,718	$	94,904		$	116,205	$	76,674		$	93,597

Receivable-backed notes
payable - non-recourse:
KeyBank/DZ Purchase Facility	$	49,733	5.01%	$	62,164	$	16,144	4.31%	$	19,866		19,035	4.84%		23,390		-	-		-
Quorum Purchase Facility		39,739	4.75-5.50%		44,907		16,771	4.75-6.90%		18,659		44,865	4.75-5.50%		50,337		40,074	4.75-5.50%		45,283
2012 Term Securitization		16,978	2.94%		19,593		23,227	2.94%		25,986		9,986	2.94%		11,558		15,212	2.94%		16,866
2013 Term Securitization		29,814	3.20%		32,288		37,163	3.20%		39,510		20,090	3.20%		21,995		27,573	3.20%		29,351
2015 Term Securitization		47,624	3.02%		51,430		58,498	3.02%		61,705		34,093	3.02%		36,676		44,230	3.02%		47,690
2016 Term Securitization		68,155	3.35%		76,206		83,142	3.35%		91,348		52,632	3.35%		58,817		63,982	3.35%		72,590
2017 Term Securitization		88,632	3.12%		100,847		107,624	3.12%		119,582		69,763	3.12%		79,551		83,513	3.12%		95,877
2018 Term Securitization												96,907	4.02%		109,599		114,480	4.02%		125,916
Unamortized debt issuance costs		(4,995)			-		(6,148)			-		(5,515)			-		(6,807)			-
Total	$	335,680		$	387,435	$	336,421		$	376,656	$	341,856		$	391,923	$	382,257		$	433,573

Total receivable-backed debt	$	433,450		$	511,305	$	421,118		$	480,374	$	436,760		$	508,128	$	458,931		$	527,170

There were no new debt issuances or significant changes related to the above listed facilities during the nine months ended September 30, 2019. See Note 13 to the Company’s consolidated financial statements included in the ~~2017~~2018 Annual Report for additional information regarding the above listed receivable-backed notes payable facilities.

~~New debt issuances and significant changes related to receivable-backed notes payable during the nine months ended September 30, 2018 are detailed below.~~

~~Liberty Bank Facility -~~ Bluegreen has maintained a revolving VOI notes receivable hypothecation facility (the “Liberty Bank Facility”) with Liberty Bank which provides for advances on eligible receivables pledged under the Liberty Bank Facility, subject to specified terms and conditions, during a revolving credit period. On March 12, 2018, the Liberty Bank Facility was amended and restated to extend the revolving credit period from March 2018 to March 2020, extend the maturity date from November 2020 until March 2023, and amend the interest rate on borrowings as described below. Subject to its terms and conditions, the Liberty Bank Facility provides for advances of (i) 85% of the unpaid principal balance of Qualified Timeshare Loans assigned to agent, and (ii) 60% of the unpaid principal balance of Non-Conforming Timeshare Loans assigned to agent, during the revolving credit period of the facility. Maximum permitted outstanding borrowings under the Liberty Bank Facility are $50.0 million, subject to the terms of the facility. Through March 31, 2018, borrowings under the Liberty Bank Facility bore interest at the Wall Street Journal (“WSJ”) Prime Rate plus 0.50% per annum, subject to a 4.00% floor. Pursuant to the March 2018 amendment to the Liberty Bank Facility, effective April 1, 2018, all borrowings outstanding under the facility bear interest at an annual rate equal to the WSJ Prime Rate, subject to a 4.00% floor. Principal repayments and interest on borrowings under the Liberty Bank Facility are paid as cash is collected on the pledged receivables, with the remaining balance being due by maturity, subject to the terms of the facility.

~~NBA Receivables Facility~~ - Bluegreen/Big Cedar Vacations has a revolving VOI hypothecation facility (the “NBA Receivables Facility”) with NBA. The NBA Receivables Facility provides for advances at a rate of 85% on eligible receivables pledged under the facility, subject to eligible collateral and specified terms and conditions, during a

revolving credit period expiring in September 2020 and allows for maximum borrowings of up to $70.0 million (inclusive of the $20.0 million increase in availability described above). The maturity date for the facility is March 2025. The interest rate applicable to future borrowings under the NBA Receivables Facility is equal to the 30-day LIBOR plus 2.75% (with an interest rate floor of 3.50%). All principal and interest payments received on pledged receivables are applied to principal and interest due under the facility, with the remaining balance being due by maturity, subject to the terms of the facility.

~~Pacific Western Facility –~~ Bluegreen has a revolving VOI notes receivable hypothecation facility (the “Pacific Western Facility”) with Pacific Western Bank, which provides for advances on eligible VOI notes receivable pledged under the facility, subject to specified terms and conditions, during a revolving credit period. Maximum outstanding borrowings under the Pacific Western Facility are $40.0 million, subject to eligible collateral and customary terms and conditions. On August 15, 2018, the Pacific Western Facility was amended to extend the revolving advance period from September 2018 to September 2021, extend the maturity date from September 2021 until September 2024 (in each case, subject to an additional 12-month extension at the option of Pacific Western Bank) and amend the interest rate on borrowings as described below. Eligible “A” VOI notes receivable that meet certain eligibility and FICO score requirements, which Bluegreen believes are typically consistent with loans originated under its current credit underwriting standards, are subject to an 85% advance rate. The Pacific Western Facility also allows for certain eligible “B” VOI notes receivable (which have less stringent FICO score requirements) to be funded at a 53% advance rate. Through September 21, 2018, borrowings under the Pacific Western Facility bore interest at the then prevailing interest rates under the facility, which ranged from 30-day LIBOR plus 3.50% to 4.50%. Pursuant to the amendment to the Pacific Western Facility, effective September 21, 2018, all borrowings outstanding under the facility bear interest at an annual rate equal to 30-day LIBOR plus 3.00%; provided, however, that a portion of the borrowings, to the extent such borrowings are in excess of established debt minimums, will bear interest at 30-day LIBOR plus 2.75%. Principal repayments and interest on borrowings under the Pacific Western Facility are paid as cash is collected on the pledged VOI notes receivable, subject to future required decreases in the advance rates after the end of the revolving advance period, with the remaining balance being due by maturity, subject to the terms of the facility.

~~Quorum Purchase Facility -~~ Bluegreen and Bluegreen/Big Cedar Vacations have a VOI notes receivable purchase facility (the “Quorum Purchase Facility”) with Quorum Federal Credit Union (“Quorum”), pursuant to which Quorum has agreed to purchase eligible VOI notes receivable in an amount of up to an aggregate $50.0 million purchase price, subject to certain conditions precedent and other terms of the facility. On April 6, 2018, the Quorum Purchase Facility was amended to extend the revolving purchase period from June 30, 2018 to June 30, 2020, and provided for a fixed interest rate of 4.95% per annum on advances made through September 30, 2018. The interest rate on advances made after September 30, 2018 will be set at the time of funding based on rates mutually agreed upon by all parties. The amendment also reduced the loan purchase fee applicable to advances from 0.50% to 0.25% and extended the maturity of the Quorum Purchase Facility from December 2030 to December 2032. Of the amounts outstanding under the Quorum Purchase Facility at September 30, 2018, $5.0 million accrues interest at a rate per annum of 4.75%, $29.9 million accrues interest at a rate per annum of 4.95%, $2.7 million accrues interest at a rate per annum of 5.0%, and $2.1 million accrues interest at a rate per annum of 5.5%. The Quorum Purchase Facility provides for an 85% advance rate on eligible receivables sold under the facility; however, Quorum can modify this advance rate on future purchases subject to the terms and conditions of the Quorum Purchase Facility. Eligibility requirements for VOI notes receivable sold include, among others, that the obligors under the VOI notes receivable sold be members of Quorum at the time of the note sale. Subject to the performance of the collateral, Bluegreen or Bluegreen/Big Cedar Vacations, as applicable, will receive any excess cash flows generated by the VOI notes receivable transferred to Quorum under the facility (excess meaning after payment of customary fees, interest and principal under the facility) on a pro-rata basis as borrowers make payments on their VOI notes receivable. While ownership of the VOI notes receivable included in the Quorum Purchase Facility is transferred and sold for legal purposes, the transfer of these VOI notes receivable is accounted for as a secured borrowing for financial reporting purposes. The facility is nonrecourse.

The table below sets forth information regarding the Company’s junior subordinated debentures (dollars in thousands):

Woodbridge and Bluegreen have each formed statutory business trusts (collectively, the “Trusts”), each of which issued trust preferred securities and invested the proceeds thereof in junior subordinated debentures of Woodbridge and Bluegreen, respectively. The Trusts are VIEs in which Woodbridge and Bluegreen, as applicable, are not the primary beneficiaries. Accordingly, the Company ~~and its subsidiaries do~~does not consolidate the operations of these Trusts; instead, the beneficial interests in the Trusts are accounted for under the equity method of accounting. Included in other assets as of September 30, ~~2018~~2019 and December 31, ~~2017~~2018 was ~~$5.9~~$2.1 million of equity in the Trusts. Interest on the junior subordinated debentures and distributions on the trust preferred securities are payable quarterly in arrears at the same interest rate.

~~During January 2017, Woodbridge purchased approximately $11.1 million~~All of Levitt Capital Trust II (“LCTII”) trust preferred securities for $6.7 million and purchased approximately $7.7 million of Levitt Capital Trust III (“LCTIII”) trust preferred securities for $4.7 million, and in February 2017, Woodbridge delivered the ~~purchased securities to the respective trusts in exchange for the cancellation of $11.1 million of Woodbridge’s~~ junior subordinated debentures ~~held~~were eligible for redemption by ~~LCTII~~Woodbridge and ~~$7.7 million~~Bluegreen, as applicable, as of Woodbridge’s junior subordinated debentures held by LCTIII. As a result, in February 2017, Woodbridge recognized a $6.9 million gain associated with the cancellation of the notes, which is included in “Net gains on cancellation of junior subordinated debentures” in the Company’s condensed consolidated statement of operations for the nine months ended September 30, ~~2017.~~2019 and December 31, 2018.

See Note 13 to the Company’s consolidated financial statements included in the ~~2017~~2018 Annual Report for additional information regarding the Company’s junior subordinated debentures.

As of September 30, ~~2018,~~2019, BBX Capital and its subsidiaries were in compliance with all financial debt covenants under their debt instruments, as amended.

Amounts available under credit facilities for BBX Capital and its ~~debt instruments. As~~subsidiaries as of September 30, ~~2018, Bluegreen had availability of approximately $122.8 million~~2019 were as follows (in thousands):

The amounts available under ~~its receivable-backed purchase and~~the Company’s credit facilities ~~inventory lines of credit and corporate credit line,~~are subject to eligible collateral and the terms of the facilities, as applicable. As of September 30, 2018, BBX Capital and its other subsidiaries had availability of approximately $27.9 million under revolving lines of credit, subject to eligible collateral and the terms of the facilities, as applicable.

The table below sets forth the Company’s revenue disaggregated by category (in thousands):

BBX Capital and its subsidiaries file a consolidated U.S. federal income tax return and income tax returns in various state and foreign jurisdictions.

On December 22, 2017, the Tax Reform Act was signed into law. In addition to changes or limitations to certain tax deductions, including limitations on the deductibility of interest payable to related and unrelated lenders and further limiting deductible executive compensation, the Tax Reform Act permanently lowers the federal corporate tax rate to 21% from the previous maximum rate of 35%, effective for tax years commencing January 1, 2018. As a result of the Tax Reform Act, SAB 118 and ASU 2018-05 were issued to address the application of ASC 740 in situations in which

an entity does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. Under this guidance, an entity may record provisional amounts for the impact of the Tax Reform Act which may be revised during a one year “measurement period.” In accordance with this guidance, the Company remeasured its net deferred tax liabilities in the fourth quarter of 2017 due to the reduction of the corporate tax rate to 21% and recorded a provisional tax benefit of $45.3 million in its statement of operations for the year ended December 31, 2017. During the nine months ended September 30, 2018, the Company reduced the provisional tax benefit recognized for the year ended December 31, 2017 by $2.8 million as a result of its analysis of the impact of the Tax Reform Act on the deductibility of certain compensation to covered employees. The Company continues to analyze the impact of the Tax Reform Act, which may differ, possibly materially, from the provisional amounts recorded by the Company due to, among other things, additional analysis, changes in interpretations and assumptions made by the Company, and additional regulatory guidance that may be issued. Therefore, the Company may recognize additional revisions during the one year measurement period in accordance with the guidance in SAB 118 and ASU 2018-05 and expects to complete its analysis prior to the end of 2018.

The Company’s effective income tax rate was approximately 36% during the nine months ended September 30, 2018, excluding the discrete income tax expense of $2.8 million related to the provisional adjustment described above, as compared to 44% during the nine months ended September 30, 2017. The Company’s effective income tax rate for the nine months ended September 30, 2018, excluding the impact of the provisional adjustment described above, was favorably impacted by the reduction in the federal corporate tax rate from 35% to 21% commencing on January 1, 2018, partially offset by limitations in the deductibility of compensation to covered employees.

Effective income tax rates for interim periods are based upon the Company’s current estimated annual rate, which varies based upon the Company’s estimate of taxable earnings and the mix of taxable earnings in the various states in which the Company operates. The Company’s effective tax rate was applied to income before income taxes reduced by net income attributable to noncontrolling interests in joint ventures taxed as partnerships. In addition, the Company recognizes taxes related to unusual or infrequent items or resulting from a change in judgment regarding a position taken in a prior period as discrete items in the interim period in which the event occurs.

The Company’s effective income tax rate was approximately 38% and 37% during the three and nine months ended September 30, 2019, respectively, compared to an effective income tax rate of 44% and 36% for the three and nine months ended September 30, 2018, respectively. The effective tax rate for the nine months ended September 30, 2019 excludes the tax benefit associated with the $39.1 million Bass Pro litigation settlement described in Note 11 below, which the Company accounted for as a discrete item at the statutory income tax rate of 26%. The effective income tax rate for the nine months ended September 30, 2018 excludes a discrete income tax expense of $2.8 million related to the recognition of a provisional adjustment associated with the December 2017 Tax Reform Act.

The Company’s effective income tax rates for the three and nine months ended September 30, 2019 and 2018 were higher than the expected federal income tax rate of 21% due to nondeductible executive compensation and state income taxes.

In the ordinary course of business, BBX Capital and its subsidiaries are parties to lawsuits as plaintiff or defendant involving its operations and activities. Bluegreen is subject to claims or proceedings from time to time relating to the purchase, sale, marketing, or financing of VOIs orand other business activities. Additionally, from time to time in the ordinary course of business, the Company is involved in disputes with existing and former employees, vendors, taxing jurisdictions, and various other parties and ~~Bluegreen~~ also receives ~~individual~~ consumer complaints ~~as well as~~and complaints, ~~received through regulatory~~inquiries, and orders requiring compliance from governmental and consumer agencies, including Offices of State Attorneys General. The Company takes these matters seriously and attempts to resolve any such issues as they arise.

Reserves are accrued for matters in which management believes it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. Management does not believe that the aggregate liability relating to known contingencies in excess of the aggregate amounts accrued will have a material impact on the Company’s results of operations or financial condition. However, litigation is inherently uncertain, and the actual costs of resolving legal claims, including awards of damages, may be substantially higher than the amounts accrued for these claims and may have a material adverse impact on the Company’s results of operations or financial condition.

Adverse ~~judgements~~judgments and the costs of defending or resolving legal claims may be substantial and may have a material adverse impact on the Company’s financial statements. Management is not at this time able to estimate a range of reasonably possible losses with respect to matters in which it is reasonably possible that a loss will occur. In certain matters, management is unable to estimate the loss or reasonable range of loss until additional developments provide information sufficient to support an assessment of the loss or reasonable range of loss. Frequently in these matters, the claims are broad, and the plaintiffs have not quantified or factually supported their claim.

~~Securities and Exchange Commission Complaint~~There were no material pending legal proceedings against BBX Capital or its subsidiaries other than proceedings against Bluegreen as of September 30, 2019.

In 2012, the SEC brought an action in the United States District Court for the Southern District of Florida against BCC and Alan B. Levan, BCC’s Chairman and Chief Executive Officer. Following an initial trial in 2014 and the reversal on appeal of certain judgments of the district court by the Eleventh Circuit Court of Appeals, a second trial

~~was held in 2017,~~Bluegreen / Bass Pro Litigation and ~~on May 8, 2017, the jury rendered a verdict in favor of BCC and Mr. Levan and against the SEC on all counts.~~Settlement

~~In connection~~Bluegreen, indirectly through Bluegreen Vacations Unlimited (“BVU”), its wholly-owned subsidiary, has an exclusive marketing agreement with Bass Pro, a nationally-recognized retailer of fishing, marine, hunting, camping and sports gear, that provides Bluegreen with the ~~Eleventh Circuit Court~~right to market and sell vacation packages at kiosks in each of ~~Appeals’ reversal~~Bass Pro’s retail locations and through other means. As previously disclosed, in March 2019, Bluegreen received a notice from Bass Pro stating that Bass Pro intended to cancel Bluegreen’s access to the Bass Pro marketing channels and advertising materials as of 30 days from the date of the notice unless Bluegreen cured the alleged breaches to Bass Pro’s satisfaction. While Bluegreen responded to Bass Pro with respect to each of the issues raised prior to the expiration of the cure period, on April 17, 2019, Bass Pro and its affiliates brought an action against BVU alleging that BVU failed to pay certain ~~judgments~~commissions due it under the parties’ marketing agreement, improperly charged a tour generation fee, and that its conduct in the ~~first trial,~~Bass Pro retail stores breached its contractual commitments. On May 24, 2019, Bluegreen received notice from Bass Pro and its affiliates that it was terminating the marketing agreement based on the failure to cure the alleged breaches, and Bluegreen was removed from all Bass Pro retail stores. BVU subsequently filed a counter claim against Bass Pro and Big Cedar LLC.

On June 13, 2019, Bluegreen entered into a settlement agreement which ~~became final on January 31, 2017,~~resolved the litigation and reinstated and amended the ~~resolution~~marketing agreement. Pursuant to the terms of the ~~matter~~settlement agreement, Bass Pro agreed to reinstate BVU’s access to Bass Pro’s marketing channels, including Bass Pro and Cabela’s retail stores. Additionally, with no admission of any wrongdoing, Bluegreen paid Bass Pro $20.0 million within 15 days after the execution of the settlement agreement; Bluegreen agreed to pay Bass Pro $4.0 million on each January 1 from 2020 through 2024; and Bluegreen agreed that Bass Pro would retain $1.5 million of an amount prepaid to them earlier in ~~favor~~2019 under the marketing agreement. Additionally, in lieu of ~~BCC~~the previous commission arrangement, Bluegreen agreed to pay Bass Pro a fixed annual fee of $70,000 for each Bass Pro and ~~Mr. Levan~~Cabela’s retail store that BVU accesses (excluding retail stores which are designated to provide tours to Bluegreen/Big Cedar Vacations, or “Bluegreen/Big Cedar Feeder Stores”) plus $32 per net vacation package sold (less cancellations and refunds within 45 days of sale), excluding sales at Bluegreen/Big Cedar Feeder Stores. Bluegreen also agreed to contribute to the Wonders of Wildlife Foundation $5.00 per net package sold (less cancellations and refunds within 45 days of sale), subject to an annual minimum of $700,000. The fixed annual fee was prorated for 2019. Subject to the terms and conditions of the settlement agreement, Bluegreen will generally be required to pay the fixed annual fee with respect to at least 59 Bass Pro retail stores and a minimum number of Cabela’s retail stores that increases over time to a total of at least 60 Cabela’s retail stores by the end of 2021. Notwithstanding the foregoing, the minimum number of Bass Pro and Cabela’s retail stores for purposes of the fixed annual fee may be reduced under certain circumstances set forth in the ~~second trial, BBX Capital received legal~~parties’ agreement, including as a result of a reduction of traffic in the stores in excess of 25% year-over-year. The parties also executed mutual waivers and releases and agreed to the dismissal of the litigation. Bluegreen accrued for the net present value of the above payments required by the settlement agreement, plus attorneys’ fees and costs, ~~reimbursements from its insurance carrier~~totaling approximately $39.1 million, which is reflected in selling, general, and administrative expenses in the Company’s condensed consolidated statements of operations for the nine months ended September 30, ~~2017~~2019. As of ~~approximately $7.1~~September 30, 2019, $17.6 million ~~as well as~~was accrued for the ~~release of a $4.6 million penalty assessed against BCC~~remaining payments required by the settlement agreement, which are reflected in ~~the first trial. The legal fees and costs reimbursements and the release of the penalty are reflected~~other liabilities in the Company’s condensed consolidated statement of ~~operations~~financial condition.

As of September 30, 2019, Bluegreen sold vacation packages in ~~“Reimbursements~~68 of ~~litigation costs~~Bass Pro retail stores and ~~penalty” for~~7 Cabela’s retail stores. During the nine months ended September 30, ~~2017.~~2019 and 2018, VOI sales to prospects and leads generated by the agreement with Bass Pro accounted for approximately 13% and 14%, respectively, of Bluegreen’s VOI sales volume.

On August 10, 2016, Shiva Stein filed a lawsuit against the Company, BBX Merger Sub, LLC, BCC, and the members of BCC’s board of directors, which seeks to establish a class of BCC’s shareholders and challenges the Merger. The plaintiff asserts that the Merger consideration undervalues BCC and is unfair to BCC’s public shareholders, that the sales process was unfair and that BCC’s directors breached their fiduciary duties of care, loyalty and candor owed to the public shareholders of BCC because, among other reasons, they failed to take steps to maximize the value of BCC to its public shareholders and instead diverted consideration to themselves. The lawsuit also alleges that BBX Capital, as the controlling shareholder of BCC, breached its fiduciary duties of care, loyalty and candor owed to the public shareholders of BCC by utilizing confidential, non-public information to formulate the Merger consideration and not acting in the best interests of BCC’s public shareholders. In addition, the lawsuit includes a cause of action against BCC, the Company, and Merger Sub for aiding and abetting the alleged breaches of fiduciary duties. The lawsuit requested that the court grant an injunction blocking the proposed Merger or, if the proposed Merger is completed, rescind the transaction or award damages as determined by the court. On September 15, 2016, Defendants filed a Motion to Dismiss the amended complaint. On November 21, 2016, the Court issued an order granting the Motion to Dismiss with prejudice. Plaintiff appealed the Court’s order dismissing the amended complaint to the Fourth District Court of Appeals, and on March 21, 2018, the Fourth District Court of Appeals issued an opinion affirming the dismissal of the action. The time period for plaintiff to appeal the Fourth District Court of Appeals ruling has lapsed.

On August 24, 2016, Whitney Paxton and Jeff Reeser filed a lawsuit against Bluegreen Vacations Unlimited, Inc. (“BVU”), a wholly-owned subsidiary of Bluegreen, and certain of its employees, seeking to establish a class action of former and current employees of BVU and alleging violations of plaintiffs’ rights under the Fair Labor Standards Act of 1938 (the “FLSA”) and breach of contract. The lawsuit also claims that the defendants terminated plaintiff Whitney Paxton as retaliation for her complaints about alleged violations of the FLSA. The lawsuit seeks damages in the amount of the unpaid compensation owed to the plaintiffs. During July 2017, a magistrate judge entered a report and recommendation that the plaintiffs’ motion to conditionally certify collective action and facilitate notice to potential class members be granted with respect to certain employees and denied as to others. During September 2017, the judge accepted the recommendation and granted preliminary approval of class certification. Based on that conditional class certification, all potential class members were provided Consent Forms to opt-in to the lawsuit, which opt-in period has since expired, and a set number of opt-ins has been determined (approximately 80). Class-wide discovery was subsequently served and plaintiffs filed a Motion for Protective Order which is pending. Bluegreen intends to seek to compel 59 of the currently named opt-in plaintiffs to submit their respective claims to arbitration on an individual basis. Bluegreen believes that the lawsuit is without merit and intends to vigorously defend the action.

On September 22, 2017, Stephen Potje, Tamela Potje, Sharon Davis, Beafus Davis, Matthew Baldwin, Tammy Baldwin, Arnor Lee, Angela Lee, Gretchen Brown, Paul Brown, Jeremy Estrada, Emily Estrada, Michael Oliver, Carrie Oliver, Russell Walters, Elaine Walters, and Mike Ericson, individually and on behalf of all other similarly situated, filed a purported class action lawsuit against Bluegreen which asserted claims for alleged violations of the Florida Deceptive and Unfair Trade Practices Act and the Florida False Advertising Law. In the complaint, the plaintiffs alleged the making of false representations in connection with Bluegreen’s sales of ~~VOIs, including representations regarding~~VOIs. The purported class action lawsuit was dismissed without prejudice after mediation. However, on or about April 24, 2018, plaintiffs re-filed their individual claims in Palm Beach County Circuit Court. Subsequently, on October 15, 2019, the ~~ability to use points for stays or other experiences with other vacation providers,~~Court entered an order granting summary judgment in favor of Bluegreen and dismissed all claims.

On February 28, 2018, Oscar Hernandez and Estella Michael filed a purported class action litigation in San Bernardino Superior Court against BVU. The central claims in the ~~ability to cancel VOI purchases and receive a refund of the purchase price and the ability to roll over unused points and that annual maintenance fees would not increase. The~~ complaint, sought to establish a class of consumers who, since the beginning of the applicable statute of limitations, purchased VOIs from Bluegreen, had their annual maintenance fees relating to Bluegreen VOIs increased, or were unable to roll over their unused points to the nextas amended during June 2018, include alleged

~~calendar year. The plaintiffs sought damages in the amount alleged~~failures to ~~have been improperly obtained by Bluegreen,~~pay overtime and wages at termination and to provide meal and rest periods, as well as any statutory enhanced damages, attorneys’ fees and costs, and equitable and injunctive relief. On November 20, 2017, Bluegreen moved to dismiss the complaint and, in response, the plaintiffs filed an amended complaint dropping the claims relating to non-compliant wage statements and unreimbursed business expenses; and a claim under the ~~Florida Deceptive and Unfair Trade Practices Act and adding claims for fraud~~Private Attorney’s General Act. Plaintiffs sought to represent a class of approximately 660 hourly, non-exempt employees who worked in the ~~inducement~~state of California since March 1, 2014. In April 2019, the parties mediated and ~~violation of~~agreed to settle the ~~Florida Vacation Plan and Timesharing Act. On March 20, 2018, the plaintiffs withdrew their motion~~matter for ~~class action certification and on March 23, 2018,~~an immaterial amount. It is expected that the court ~~ordered~~will approve the settlement and the dismissal of the ~~suit. On April 24, 2018,~~lawsuit after the plaintiffs filed a new lawsuit against BVU, for substantially the same claims, but only on behalf of the 18 named individuals and not as a class action. Bluegreen believes that the lawsuit is without merit and intends to vigorously defend the action.

On January 4, 2018, Gordon Siu, individually and on behalf of all others similarly situated, filed a lawsuit against BVU and others, Choice Hotels International, Inc. which asserted claims for alleged violations of California law that relates to the recording of telephone conversations with consumers. Plaintiff alleges that after staying at a Choice Hotels resort, defendants placed a telemarketing call to plaintiff to sell the Choice Hotels customer loyalty program and a vacation package at a Choice hotel via the Bluegreen Getaways vacation package program. Plaintiff alleges that he was not timely informed that the phone conversation was being recorded and is seeking certification of a class comprised of other persons recorded on calls without their consent within one year before the filing of the original complaint. After BVU moved to dismiss the complaint, plaintiff amended his complaint to dismiss one of the two causes of action in the original complaint on the basis that that particular statute only concerns land line phones. Plaintiff and Choice agreed to a confidential settlement ~~and Choice has been dismissed from this lawsuit. Plaintiff seeks money damages and injunctive relief. Bluegreen believes the lawsuit is without merit and intends to vigorously defend the action.~~

On May 3, 2018, Katja Anderson and George Galloway, individually and on behalf of all other persons similarly situated, filed a lawsuit against Bluegreen which asserted violations of the Telephone Consumer Practices Act. The plaintiffs claimed that they received multiple telemarketing calls in the spring of 2015 despite their requests not to be called. Plaintiffs sought certification of a class of individuals in the United States who received more than one telephone call made by Bluegreen or on its behalf within a 12-month period; to a telephone number that was registered with the National Do Not Call Registry for at least 30 days. Plaintiffs sought money damages, attorneys’ fees and a court order requiring Bluegreen to cease all unsolicited telephone calling activities. Bluegreen moved to dismiss the lawsuit and, on August 13, 2018, this case was dismissed without prejudice.documents are executed.

On June 28, 2018, Melissa S. Landon, Edward P. Landon, Shane Auxier and Mu Hpare, individually and on behalf of all others similarly situated, filed a purported class action lawsuit against ~~Bluegreen~~the Company and BVU asserting claims for alleged violations of the Wisconsin Timeshare Act, Wisconsin law prohibiting illegal referral selling, and Wisconsin law prohibiting illegal attorney’s fee provisions. Plaintiffs allegations include that Bluegreen failed to disclose the identity of the seller of real property at the beginning of ~~its~~Bluegreen’s initial contact with the purchaser; that Bluegreen misrepresented who the seller of the real property was; that Bluegreen misrepresented the buyer’s right to cancel; that Bluegreen included an illegal attorney’s fee provision in the sales document(s); that Bluegreen offered an illegal “today only” incentive to purchase; and that Bluegreen utilizes an illegal referral selling program to induce the sale of VOIs. Plaintiffs seek certification of a class consisting of all persons who, in Wisconsin, purchased from Bluegreen one or more VOIs within six years prior to the filing of this lawsuit. Plaintiffs seek statutory damages, attorneys’ fees and injunctive relief. Bluegreen believes the lawsuit is without merit and ~~intend~~intends to vigorously defend the action.

On January 7, 2019, Shehan Wijesinha filed a purported class action lawsuit alleging violations of the Telephone Consumer Protection Act (the “TCPA”). It is alleged that BVU called plaintiff’s cell phone for telemarketing purposes using an automated dialing system and that plaintiff did not give BVU his express written consent to do so. Plaintiffs seek certification of a class comprised of other persons in the United States who, within the four years prior to the filing of the complaint, received similar calls from or on behalf of BVU without the person’s consent. Plaintiff seeks monetary damages, attorneys’ fees, and injunctive relief. Bluegreen believes the lawsuit is without merit and intends to vigorously defend the action. On July 15, 2019, the court entered an order staying this case pending a ruling from the Federal Communications Commission clarifying the definition of an automatic telephone dialing system under the TCPA and the decision of the Eleventh Circuit in a separate action brought against a VOI company by a plaintiff alleging violations of the TCPA.

On January 7, 2019, Debbie Adair and thirty-four other timeshare purchasers filed a lawsuit against BVU and Bass Pro alleging violations of the Tennessee Consumer Protection Act, the Tennessee Time-share Act, the California Time-Share Act, fraudulent misrepresentation for failure to make certain required disclosures, fraudulent inducement for inducing purchasers to remain under contract past rescission, unauthorized practice of law, civil conspiracy, unjust enrichment, and breach of contract. Plaintiffs seek rescission of their contracts, monetary damages, including statutory treble damages, or in the alternative, punitive damages in an amount not less than $0.5 million. Bluegreen believes the lawsuit is without merit and intends to vigorously defend the action. Bluegreen has agreed to indemnify Bass Pro with respect to the claims brought against it in this proceeding.

On March 15, 2018, BVU entered into an Agreement for Purchase and Sale of Assets with T. Park Central, LLC, O. Park Central, LLC, and New York Urban Ownership Management, LLC (collectively “New York Urban”) (the “Purchase and Sale Agreement”), which provides for the purchase of The Manhattan Club inventory over a number of years and the assumption of the management contract with The Manhattan Club HOAanticipated to occur in 2021. On October 7, 2019, New York Urban initiated arbitration proceedings against BVU alleging that The Manhattan Club HOA (of which BVU is a member) is obligated to pay an increased management fee to a New York Urban affiliate and that this higher amount would be the benchmark for BVU’s purchase of the management contract under the parties’ Purchase and Sale Agreement. New York Urban is also seeking damages in the arbitration proceedings in excess of $10.0 million for promissory estoppel and tortious interference. BVU has denied New York Urban’s claims and has declared New York Urban in default under the Purchase and Sale Agreement for, among other things, initiating arbitration in violation of the Purchase and Sale Agreement. BVU has informed New York Urban that it would not proceed with its inventory purchases until New York Urban’s defaults are cured. The Purchase and Sale Agreement provides that, in the event of a breach, the nonbreaching party may either waive the breach or terminate the Purchase and Sale Agreement as its sole and exclusive remedy.

Commencing in 2015, it came to Bluegreen’s attention that its collection efforts with respect to its VOI notes receivable were being impacted by a then emerging, industry-wide trend involving the receipt of “cease and desist” letters from ~~attorneys~~exit firms and ~~timeshare exit companies~~attorneys purporting to represent certain VOI owners. Following receipt of these letters, Bluegreen is unable to contact the owners unless allowed by law. Bluegreen believes these ~~attorneys and timeshare~~ exit ~~companies~~firms have encouraged ~~such~~ owners to become delinquent and ultimately default on their obligations and that such actions and Bluegreen’s inability to contact the owners are a primary contributor to the increase in its annual default rates. Bluegreen’s average annual

default rates have increased from 6.9% in 2015 to ~~8.4%~~8.6% in ~~2018.~~2019. Bluegreen also estimates that approximately ~~16.8%~~15.0% of the total delinquencies on its VOI notes receivable as of September 30, ~~2018~~2019 related to VOI notes receivable subject to ~~these letters.~~this issue. Bluegreen has in a number of cases pursued, and may in the future pursue, legal action against the VOI owners, and as described below, against the exit firms.

On December 21, 2018, Bluegreen filed a lawsuit against timeshare exit firm Totten Franqui and certain of its affiliates (“TPEs”). In the complaint, Bluegreen alleged that the TPEs, through various forms of deceptive advertising, as well as inappropriate direct contact with VOI owners, made false statements about Bluegreen and provided misleading information to the VOI owners. The TPEs have encouraged nonpayment by consumers and exacted fees for doing so. Bluegreen believes the consumers are paying fees to the TPEs in exchange for illusory services and has asserted claims against the TPEs under the Lanham Act, as well as tortious interference with contractual relations, civil conspiracy to commit tortious interference, and other claims. During the course of the litigation, the TPEs and Totten Franqui filed for bankruptcy, which resulted in the litigation being stayed. The bankruptcy judge has appointed an independent trustee to handle the estate of the debtors, and Bluegreen has been in discussions with the bankruptcy trustee about a possible settlement. Bluegreen intends to assert all of its legal rights in the bankruptcy case.

The following is a description of certain commitments, contingencies, and guarantees:

subsidies of ~~$2.2~~$10.5 million and ~~$1.7~~$2.2 million, respectively. As of September 30, ~~2018,~~2019, Bluegreen ~~was providing subsidies to ten HOAs and~~ had ~~$6.2~~accrued $8.0 million ~~accrued~~ for such subsidies, which is included in other liabilities in the Company’s condensed consolidated statement of financial condition. As of December 31, ~~2017,~~2018, Bluegreen had no accrued liabilities for such subsidies.

In August 2016, BBX Capital entered into a severance arrangement with a former executive pursuant to which the executive is entitled to receive $3.7 million in cash payments over a three-year period ending in August 2019. As of September 30, 2018, the Company had a $0.9 million liability remaining under this arrangement, which is included in other liabilities in the Company’s condensed consolidated statement of financial condition.

In September 2017, Bluegreen entered into an agreement with a former executive in connection with his retirement. Pursuant to the terms of the agreement, Bluegreen agreed to make payments totaling approximately $2.9 million through March 2019. As of September 30, 2018, $1.2 million remained payable under this arrangement. Also, during the second half of 2017, Bluegreen commenced an initiative designed to streamline its operations in certain areas to facilitate future growth. Such initiative resulted in $5.8 million of severance accrued as of December 31, 2017 and $0.4 million accrued as of September 30, 2018. Such outstanding amounts are included in other liabilities in the Company’s condensed consolidated statements of financial condition.

In March 2018, Bluegreen’s compensation committee approved in principle the material terms of an Executive Leadership Incentive Plan (the “ELIP”), which provides for the grant of cash-settled performance units (“Performance Units”) and cash-settled stock appreciation rights (“SARs”) to participants in the ELIP. It is contemplated that each participant will be granted award opportunities representing a percentage of his or her base salary (the “Target LTI”). In the case of certain of Bluegreen’s executive officers, the award will be divided 30% to SARs and 70% to Performance Units. For other participants, including certain Bluegreen senior vice presidents, certain vice presidents and certain other employees, the award will be 100% in Performance Units. Performance Units will represent the right of the recipient to receive a cash payment based on the achievement of levels of EBITDA and return on invested capital (“ROIC”) during a two-year period. SARs granted under the ELIP, upon exercise after vesting, will entitle the holder to a cash payment in an amount equal to the excess of the market price of Bluegreen’s common stock on the date of exercise over the exercise price of the SAR. The SARs will vest in equal annual installments on the first, second and third anniversary of the date of grant and have a five-year term. In March 2018, Bluegreen’s compensation committee approved grants of 639,643 SARs at an exercise price of $19.72 per share to certain of Bluegreen’s officers, as well as Performance Units to receive up to approximately $7.4 million in 2020, depending on actual results from the two years ending December 31, 2019. As of September 30, 2018, Bluegreen had $3.7 million accrued for the ELIP, which is included in other liabilities in the Company’s condensed consolidated statement of financial condition.

Bluegreen has an exclusive marketing agreement with Bass Pro, a nationally-recognized retailer of fishing, marine, hunting, camping and sports gear, that provides Bluegreen with the right to market and sell vacation packages at kiosks in each of Bass Pro’s retail locations and through certain other means. As of September 30, 2018, Bluegreen was selling vacation packages in 69 of Bass Pro’s stores. Bluegreen compensates Bass Pro based on VOI sales generated through the program. No compensation is paid to Bass Pro under the agreement on sales made at Bluegreen/Big Cedar Vacations’ resorts. During the nine months ended September 30, 2018 and 2017, VOI sales to prospects and leads generated by the agreement with Bass Pro accounted for approximately 14% and 15%, respectively, of Bluegreen’s VOI sales volume. On October 9, 2017, Bass Pro advised Bluegreen that it believed the amounts paid to it as VOI sales commissions should not have been adjusted for certain purchaser defaults. Bluegreen previously had informed Bass Pro that the aggregate amount of such adjustments for defaults charged back to Bass Pro between January 2008 and June 2017 totaled approximately $4.8 million. While Bluegreen believed and continues to believe that these adjustments were appropriate and consistent with both the terms and the intent of the agreements with Bass Pro, in October 2017, in order to demonstrate its good faith, Bluegreen paid the amount at issue to Bass Pro pending future resolution of the matter. Bluegreen has continued to make payments to Bass Pro as it believes appropriate and consistent with the agreements, which continue to be adjusted for defaults, and Bass Pro has accepted these payments as historically calculated. Subsequently and again more recently, Bass Pro has raised issues regarding adjustments for defaults and requested additional information regarding the calculation of commissions payable to Bass Pro and other amounts payable under the agreements, including reimbursements paid to Bluegreen, as well as regarding the operations at Bluegreen/Big Cedar Vacations. Bluegreen does not believe that the issues raised by Bass Pro have impacted current operations under the marketing agreement or relative to Bluegreen/Big Cedar Vacations. Bluegreen has formally responded to Bass Pro with its view on these matters and intends to provide Bass Pro with all appropriately requested information. Bluegreen’s agreements with Bass Pro provide that in the event of any dispute the CEOs of the companies will meet to work toward a resolution of the issues or disagreements between the parties. Accordingly, it is anticipated that such process will be followed in good faith and that the parties will appropriately resolve any issues. While Bluegreen does not believe that any material additional amounts are due to Bass Pro as a

result of these matters, the Company’s future results may be impacted by any change in the calculations utilized in connection with payments or reimbursements required under the agreements or if Bluegreen is unable to resolve the issue.

The Company guarantees certain obligations of its wholly-owned subsidiaries and unconsolidated real estate joint ventures, ~~as follows:~~including the following:

~~Cash Tender Offer~~BBX Capital and its subsidiaries are lessees under various operating leases for retail stores, sales offices, call centers, office space, equipment, and vehicles. Many of the Company’s lease agreements include one or more options to renew, with renewal terms that can extend the lease term from one to seven years, and the exercise of such renewal options is generally at the Company’s discretion. Certain of the Company’s lease agreements include rental payments based on a percentage of sales generated at the leased location over contractually specified levels, and others include rental payments adjusted periodically for inflation. The Company’s lease agreements do not contain material residual value guarantees or material restrictive covenants.

The Company recognizes right-of-use assets and lease liabilities associated with lease agreements with an initial term of greater than 12 months, while lease agreements with an initial term of 12 months or less are not recorded in the Company’s statement of financial condition. The Company generally does not include lease payments associated with renewal options that are exercisable at its discretion in the measurement of its right-of-use assets and lease liabilities as it is not reasonably certain that such options will be exercised. The table below sets forth information regarding the Company’s lease agreements which had an initial term of greater than 12 months (dollars in thousands):

The Company generally recognizes lease costs associated with its operating leases on a straight-line basis over the lease term, while variable lease payments that do not depend on an index or rate are recognized as variable lease costs in the period in which the obligation for those payments is incurred. The table below sets forth information regarding the Company’s lease costs which are included in cost of trade sales and selling, general, and administrative expenses in the Company’s condensed consolidated statements of operations (in thousands):

The table below sets forth information regarding the maturity of the Company’s operating lease liabilities as of September 30, 2019 (in thousands):

The above operating lease payments exclude $9.9 million of legally binding minimum lease payments for lease agreements executed but not yet commenced, as the Company has not received possession of the leased property. Included in the Company’s statement of cash flows under operating activities for the nine months ended September 30, 2019 was $20.8 million of cash paid for amounts included in the measurement of lease liabilities. During the nine months ended September 30, 2019, the Company obtained $21.7 million of right-of-use assets in exchange for operating lease liabilities.

In ~~April 2018,~~June 2017, BBX ~~Capital completed~~Capital’s board of directors approved a ~~cash tender offer pursuant~~share repurchase program authorizing the purchase of up to which it purchased and retired 6,486,486 shares of its Class A Common Stock at a purchase price of $9.25 per share for an aggregate purchase price of approximately $60.1 million, inclusive of acquisition costs. As of April 19, 2018, the shares purchased in the tender offer represented approximately 7.6% of the total number of outstanding5,000,000 shares of BBX Capital’s Class A Common Stock and ~~6.3%~~Class B Common Stock at an aggregate cost of up to $35.0 million. During the three and nine months ended September 30, 2019, BBX Capital purchased 1,398,361 and 1,799,539 shares of its Class A Common Stock, respectively, for approximately $7.0 million and $8.9 million, respectively. As of September 30, 2019, BBX Capital had purchased 3,321,132 shares of its Class A Common Stock for approximately $18.9 million pursuant to the June 2017 share repurchase program.

On January 8, 2019, BBX Capital’s ~~total issued and outstanding equity (which includes~~compensation committee of the ~~issued and outstanding~~board of directors granted awards of 1,923,975 restricted shares of BBX Capital’s Class B Common ~~Stock).~~ Stock to its executive officers under the BBX Capital Corporation 2014 Incentive Plan. The aggregate grant date fair value of the awards was $11.8 million, and the shares vest ratably in annual installments of approximately 481,000 shares over four periods beginning on October 1, 2019.

As of December 31, 2017, the Company had outstanding 15,000 shares of 5% Cumulative Preferred Stock with a stated value of $1,000 per share. During December 2013, the Company made a $5.0 million loan to the holders of the 5% Cumulative Preferred Stock. The loan was secured by 5,000 shares of the 5% Cumulative Preferred Stock, had a term of five years, accrued interest at a rate of 5% per annum, and provided for payments of interest on a quarterly basis during the term of the loan, with all outstanding amounts being due and payable at maturity in December 2018.

~~On March 31, 2018, the Company redeemed 5,000 shares of the 5% Cumulative Preferred Stock in exchange for the cancellation of the $5.0 million loan to the holders of the 5% Cumulative Preferred Stock.~~

~~As of September 30, 2018, the Company had outstanding 10,000 shares of 5% Cumulative Preferred Stock.~~

~~On September 30, 2018, 534,696~~In October 2019, 566,322 shares of restricted Class A common stock awards and ~~773,202~~1,901,793 shares of restricted Class B common stock awards previously granted to certain of the Company’s officers vested. The officers surrendered a total of ~~374,895~~222,848 shares of Class A common stock and ~~137,064 shares of Class B common stock to the~~

~~Company to satisfy the $3.8 million tax withholding obligation associated with the vesting of these awards on September 30, 2018. The Company retired the surrendered shares.~~

~~The following is a summary of the Company’s restricted Class A and Class B common stock activity for the nine months ended September 30, 2018:~~

The fair value of shares of the Company’s restricted stock awards which vested in September 2018 and 2017 was $9.6 million during each period. The Company recognized restricted stock compensation expense of approximately $10.7 million and $10.1 million during the nine months ended September 30, 2018 and 2017, respectively.

Between October 1, 2018 and October 5, 2018, 566,322 shares of restricted Class A common stock awards and 1,420,800 shares of restricted Class B common stock awards previously granted to certain of the Company’s officers vested. The officers surrendered a total of 414,834 shares of Class A common stock and 368,084748,357 shares of Class B common stock to the Company to satisfy the ~~$5.7~~$4.5 million tax withholding obligation associated with the vesting of these ~~shares.~~awards. The Company retired the surrendered shares.

During the three and nine months ended September 30, 2019, approximately 3,039,265 shares of unvested restricted stock awards were not included in ~~October~~the computation of diluted earnings per share for such periods because such awards were assumed to be fully repurchased under the treasury stock method based on the unrecognized compensation cost associated with such awards. During the three and nine months ended September 30, 2018,. there were no unvested restricted stock awards that were excluded from the computation of diluted earnings per share for such periods.

Noncontrolling interests in the Company’s consolidated subsidiaries consisted of the following (in thousands):

The redeemable noncontrolling interest included in the Company’s condensed consolidated statements of financial condition as of September 30, 2019 and December 31, 2018 of $2.2 million and $2.6 million, respectively, is comprised of a redeemable noncontrolling interest associated with IT’SUGAR. The Company owns 90.4% of IT’SUGAR’s Class B Units, while the remaining 9.6% of such units are held by a noncontrolling interest and may be redeemed for cash at the holder’s option upon a contingent event outside of the Company’s control.

Income (loss) attributable to noncontrolling interests, including redeemable noncontrolling interests, consisted of the following (in thousands):

Fair value is defined as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ~~The accounting literature defines~~Accounting standards define an input fair value hierarchy that has three broad levels and gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The ~~following~~ tables ~~present~~below set forth information ~~for~~regarding the Company’s consolidated financial instruments ~~at September 30, 2018 and December 31, 2017~~ (in thousands):

~~(1)Included in other assets in the Company’s condensed consolidated statements of financial condition as of September 30, 2018 and December 31, 2017.~~

~~(2)Included in other assets in the Company’s condensed consolidated statements of financial condition as of December 31, 2017.~~

Management has made estimates of fair value that it believes to be reasonable. However, because there is no active market for many of these financial instruments, the fair value of these financial instruments has been derived using the income approach technique with Level 3 unobservable inputs. Estimates used in net present value financial models rely on assumptions and judgments regarding issues where the outcome is unknown, and actual results or values may differ significantly from these estimates. These fair value estimates do not consider the tax effect that would be associated with the disposition of the assets or liabilities at their fair value estimates. As such, the estimated value upon sale or disposition of the asset may not be received, and the estimated value upon disposition of the liability in advance of its scheduled maturity may not be paid.

The amounts reported in the consolidated statements of financial condition for cash and cash equivalents and restricted cash approximate fair value.

The fair value of the Company’s accruing loans is calculated using an income approach with Level 3 inputs by discounting forecasted cash flows using estimated market discount rates. The fair value of non-accruing collateral dependent loans is estimated using an income approach with Level 3 inputs utilizing the fair value of the collateral adjusted for operating and selling expenses and discounted over the estimated holding period based on the market risk inherent in the property.

~~The fair~~ values of Bluegreen’s notes receivable ~~and note receivable from preferred shareholders~~ are estimated using Level 3 inputs and are based on estimated future cash flows considering contractual payments and estimates of prepayments and defaults, discounted at a market rate.

The fair value of the 5% Cumulative Preferred Stock, which is subject to mandatory redemption, is calculated using the income approach with Level 3 inputs by discounting the estimated cash flows at a market discount rate.

The amounts reported in the consolidated statements of financial condition relating to Bluegreen’s notes payable and other borrowings, as well as variable rate receivable-backed notes payable, approximate fair value for indebtedness that provides for variable interest rates. The fair ~~value~~values of Bluegreen’s fixed rate, receivable-backed notes payable ~~was determined~~are estimated using Level 3 inputs by discounting the net cash outflows estimated to be used to repay the debt. These obligations are to be satisfied using the proceeds from the consumer loans that secure the obligations.

The fair value of the Company’s Community Development Bonds, which are included in notes payable and other borrowings above, is measured using the market approach with Level 3 inputs obtained based on estimated market prices of similar financial instruments. ~~Community Development Bonds are included in notes payable and other borrowings in the above table.~~

The fair ~~value~~values of the Company’s other borrowings (other than Bluegreen’s notes payable and other borrowings and Community Development Bonds above) isare measured using the income approach with Level 3 inputs obtained by discounting the forecasted cash flows based on estimated market rates.

The fair value of the Company’s junior subordinated debentures is estimated using Level 3 inputs based on the contractual cash flows discounted at a market rate or based on market price quotes from the over-the-counter bond market.

The Company may be deemed to be controlled by Alan B. Levan, the Company’s Chairman and Chief Executive Officer, and John E. Abdo, the Company’s Vice Chairman. Together, Mr. Alan B. Levan and Mr. Abdo may be deemed to beneficially own shares of the Company’s Class A Common Stock and Class B Common Stock representing approximately ~~77%~~78% of the Company’s total voting power. Mr. Alan B. Levan and Mr. Abdo also serve as Chairman and Vice Chairman, respectively, of Bluegreen’s Board of Directors. Jarett S. Levan, the Company’s President and son of Alan B. Levan, and Seth M. Wise, the Company’s Executive Vice President, also serve as directors of the Company and Bluegreen.

Woodbridge is a wholly-owned subsidiary of the Company and ~~owns 90%~~owned 90.3% of ~~Bluegreen~~Bluegreen’s outstanding common stock as of September 30, ~~2018.~~2019.

Bluegreen paid or reimbursed the Company for management advisory, risk management, administrative and other services in the amounts of $0.4 million and $1.3 million during the three and nine months ended September 30, 2019, respectively, and $0.6 million and $1.2 million during the three and nine months ended September 30, 2018, ~~respectively, and $0.3~~respectively.

The Company received $11.4 million and ~~$1.2~~$34.3 million of dividends from Bluegreen during the three and nine months ended September 30, ~~2017, respectively.~~

~~The Company received~~2019, respectively, and $10.1 million and $30.3 million of dividends from Bluegreen during the three and nine months ended September 30, 2018, respectively. ~~The Company received $20.0 million and $40.0 million of dividends during the three and nine months ended September 30, 2017, respectively.~~

During the nine months ended September 30, 2018, Bluegreen paid $0.6 million for the acquisition of VOI inventory from a company whose President is the son of David L. Pontius, Bluegreen’s Executive Vice President and Chief Operating Officer.

In April 2015, pursuant to a Loan Agreement and Promissory Note, a ~~wholly owned~~wholly-owned subsidiary of Bluegreen provided an $80.0 million loan to BBX Capital. Amounts outstanding on the loan ~~bore~~bear interest at a rate of ~~10% per annum until July 2017 when the interest rate was reduced to~~ 6% per annum. Payments of interest are required on a quarterly basis, ~~with the entire $80.0 million principal balance~~ and ~~accrued interest being~~all outstanding amounts are due and payable in April 2020. BBX Capital is permitted to prepay the loan in whole or in part at any time, and prepayments ~~will~~may be required, to the extent necessary, in order for Bluegreen or its subsidiaries to remain in compliance with covenants under outstanding indebtedness. During each of the three and nine months ended September 30, 2019 and 2018, BBX Capital recognized $1.2 million and $3.6 ~~million, respectively, of interest expense on the loan to Bluegreen. During the three and nine months ended September 30, 2017, BBX Capital recognized $1.2 million and $5.2~~ million, respectively, of interest expense on the loan to Bluegreen. The interest expense was eliminated in consolidation in the Company’s condensed consolidated financial statements.

In May 2015, the Company, ~~BCC,~~ Woodbridge, Bluegreen, Renin, and their respective subsidiaries entered into an Agreement to Allocate Consolidated Income Tax Liability and Benefits pursuant to which, among other customary terms and conditions, the parties agreed to file consolidated federal tax returns. Under the agreement, the parties calculate their respective income tax liabilities and attributes as if each of them were a separate filer. If any tax attributes of one party to the agreement are used by another party to the agreement to offset such other party’s tax liability, the party providing the benefit will receive an amount for the tax benefits realized. During the nine months ended September 30, 2019, BBX Capital received $13.0 million and $1.0 million of tax sharing payments from Bluegreen and Renin, respectively. BBX Capital did not receive any tax sharing payments from Bluegreen and Renin during the three months ended September 30, 2019. During the three and nine months ended September 30, 2018, ~~Bluegreen paid the Company~~BBX Capital received $7.1 million and $21.0 million, respectively, ~~pursuant to this agreement. During the three and nine months ended September 30, 2017, Bluegreen paid the Company $13.9 million and $39.3 million, respectively, pursuant to this agreement.~~of tax sharing payments from Bluegreen.

During each of the three and nine months ended September 30, ~~2018~~2019 and ~~2017,~~2018, the Company paid Abdo Companies, Inc. approximately $77,000 and $230,000, respectively, in exchange for certain management services. John E. Abdo, the Company’s Vice Chairman, is the principal shareholder and Chief Executive Officer of Abdo Companies, Inc.

Certain of the Company’s affiliates, including its executive officers, have independently made investments with their own funds in investments that the Company has sponsored or in which the Company holds investments.

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 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.

The information provided for segment reporting is obtained from internal reports utilized by management of the Company, and the presentation and allocation of assets and results of operations may not reflect the actual economic costs of the segments as standalone businesses. 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 Company’s reportable segments are its principal investments: Bluegreen, BBX Capital Real Estate, Renin, and IT’SUGAR. See Note 1 for a description of these segments.

In the ~~table~~segment information for the three and nine months ended September 30, ~~2018~~2019 and ~~2017,~~2018, amounts set forth in the column entitled ~~“Corporate Expenses & Other”~~“Other” include ~~interest expense associated with Woodbridge’s trust preferred securities, corporate overhead,~~ the Company’s ~~pizza restaurant operations as a franchisee of MOD Pizza, and~~investments in various operating businesses, including its remaining operating businesses in the confectionery industry, a controlling financial interest in a restaurant acquired in connection with a loan receivable ~~default. The~~default, and its pizza restaurant operations as a franchisee of MOD Pizza. As described in Note 1, the Company ~~opened two~~exited its pizza restaurant operations as a franchisee of MOD Pizza ~~restaurant locations during~~in September 2019. The amounts set forth in the ~~fourth quarter~~column entitled “Reconciling Items and Eliminations” include corporate general and administrative expenses, interest expense associated with Woodbridge’s junior subordinated debentures and BBX Capital’s $50.0 million revolving line of ~~2017~~credit, and three locations during the nine months ended September 30, 2018. As of September 30, 2018, management determined that the restaurant operations did not warrant separate presentation as a reportable segment.elimination entries.

The Company evaluates segment performance based on segment income before income taxes.

~~Set forth below is summary information regarding the Company’s reportable segments:~~

Bluegreen markets, sells and manages real estate-based VOIs in resorts generally located in popular, high-volume, “drive-to” vacation destinations, which were developed or acquired by Bluegreen or are owned by others, in which

case Bluegreen earns fees for providing these services. Bluegreen also earns fees by providing VOI title services, club and homeowners’ association management services, mortgage servicing, reservation services, services related to the Traveler-Plus program, food and beverage and other retail operations, and construction design and development services. In addition, Bluegreen provides financing to qualified individual purchasers of VOIs, which provides significant interest income.

BBX Capital Real Estate’s activities include the acquisition, development, ownership, and management of real estate, real estate development projects, and investments in real estate joint ventures. BBX Capital Real Estate also manages the legacy assets acquired in connection withThe table below sets forth the Company’s ~~sale~~segment information as of ~~BankAtlantic in July 2012. The legacy assets include portfolios of loans receivable, real estate properties,~~ and ~~loans previously charged off by BankAtlantic.~~

Renin is engaged in the design, manufacture, and distribution of specialty doors, door systems and hardware, and home décor products in the United States and Canada and operates through its headquarters in Canada and two manufacturing, assembly and distribution facilities in Canada and the United States. In addition to its own manufacturing, Renin also sources various products and raw materials from China. Duringfor the three months ended September 30, 2018 and 2017, total revenues for the Renin reportable segment include $9.6 million and $6.8 million, respectively, of trade sales to two major customers and their affiliates. During the three months ended September 30, 2018 and 2017, Renin’s revenues generated outside the United States totaled $7.0 million and $5.0 million, respectively. During the nine months ended September 30, 2018 and 2017, total revenues for the Renin reportable segment include $26.4 million and $23.4 million, respectively, of trade sales to two major customers and their affiliates. During the nine months ended September 30, 2018 and 2017, Renin’s revenues generated outside the United States totaled $16.9 million and $15.8 million, respectively. As of September 30, 2018 and 2017, Renin’s properties and equipment located outside the United States totaled $2.1 million and $2.3 million, respectively.2019 (in thousands):

BBX Sweet Holdings consists of IT’SUGAR, Hoffman’s Chocolates, and manufacturing facilities in the chocolate and confection industries which serve customers such as boutique retailers, big box chains, department stores, national resort properties, corporate customers, and private label brands. IT’SUGAR, which was acquired by BBX Sweet Holdings in June 2017, is a specialty candy retailer which currently has over 90 retail locations in 26 states and Washington, D.C. Hoffman’s Chocolates is a manufacturer and retailer of gourmet chocolates with retail locations in South Florida.

The table below sets forth the Company’s segment information as of and for the three months ended September 30, 2018 (in thousands):



		Reportable Segments
			BBX			Corporate
			Capital		BBX	Expenses
			Real		Sweet	&		Segment
		Bluegreen	Estate	Renin	Holdings	Other	Eliminations	Total		Bluegreen	BBX Capital Real Estate	Renin	IT'SUGAR	Other	Reconciling Items and Eliminations	Segment Total
Revenues:
Sales of VOIs	$	70,698	-	-	-	-	-	70,698	$	70,698	-	-	-	-	-	70,698
Fee-based sales commissions		61,641	-	-	-	-	-	61,641		61,641	-	-	-	-	-	61,641
Other fee-based services		31,057	-	-	-	-	-	31,057		31,057	-	-	-	-	-	31,057
Cost reimbursements		16,900	-	-	-	-	-	16,900		16,900	-	-	-	-	-	16,900
Trade sales		-	-	15,330	26,181	2,297	(5)	43,803		-	-	15,330	22,663	5,815	(5)	43,803
Sales of real estate inventory		-	7,478	-	-	-	-	7,478		-	7,478	-	-	-	-	7,478
Interest income		21,531	229	-	15	582	(1,200)	21,157		21,531	229	-	-	10	(613)	21,157
Net losses on sales of
real estate assets		-	(4)	-	-	-	-	(4)
Other revenue		378	576	-	101	776	(158)	1,673		378	572	-	99	840	(220)	1,669
Total revenues		202,205	8,279	15,330	26,297	3,655	(1,363)	254,403		202,205	8,279	15,330	22,762	6,665	(838)	254,403
Costs and expenses:
Cost of VOIs sold		11,237	-	-	-	-	-	11,237		11,237	-	-	-	-	-	11,237
Cost of other fee-based services		19,937	-	-	-	-	-	19,937		19,937	-	-	-	-	-	19,937
Cost reimbursements		16,900	-	-	-	-	-	16,900		16,900	-	-	-	-	-	16,900
Cost of trade sales		-	-	12,306	15,542	1,117	(5)	28,960		-	-	12,306	12,236	4,420	(5)	28,957
Cost of real estate inventory sold		-	4,655	-	-	-	-	4,655		-	4,655	-	-	-	-	4,655
Interest expense		9,208	-	157	50	2,915	(1,200)	11,130		9,208	-	157	-	53	1,712	11,130
Recoveries from loan losses, net		-	(443)	-	-	-	-	(443)		-	(443)	-	-	-	-	(443)
Asset impairments, net		-	191	-	-	-	-	191
Selling, general and
administrative expenses		112,407	2,304	2,250	10,666	16,089	(158)	143,558
Impairment losses										-	193	-	-	-	-	193
Selling, general and administrative expenses										112,407	2,307	2,250	8,962	4,868	12,765	143,559
Total costs and expenses		169,689	6,707	14,713	26,258	20,121	(1,363)	236,125		169,689	6,712	14,713	21,198	9,341	14,472	236,125
Equity in net earnings of
unconsolidated real
estate joint ventures		-	373	-	-	-	-	373
Equity in net earnings of unconsolidated real estate joint ventures										-	373	-	-	-	-	373
Foreign exchange gain		-	-	76	-	-	-	76		-	-	76	-	-	-	76
Income (loss) before
income taxes	$	32,516	1,945	693	39	(16,466)	-	18,727
Income (loss) before income taxes									$	32,516	1,940	693	1,564	(2,676)	(15,310)	18,727


Total assets	$	1,336,992	135,929	28,798	89,968	168,396	(82,316)	1,677,767	$	1,336,992	136,290	28,798	71,450	37,577	66,660	1,677,767

Expenditures for property
and equipment	$	9,242	131	99	2,042	1,729	-	13,243
Expenditures for property and equipment									$	9,242	131	99	1,942	1,704	125	13,243
Depreciation and amortization	$	3,169	91	284	1,610	293	-	5,447	$	3,169	91	292	1,153	644	108	5,457
Debt accretion and amortization	$	1,086	-	4	53	91	-	1,234	$	1,086	-	4	(90)	143	91	1,234
Cash and cash equivalents	$	195,439	21,625	-	6,485	145,963	-	369,512	$	195,439	21,625	-	4,483	10,068	137,897	369,512
Equity method investments	$	-	42,550	-	-	-	-	42,550
Real estate equity method investments									$	-	42,550	-	-	-	-	42,550
Goodwill	$	-	-	-	39,482	-	-	39,482	$	-	-	-	35,167	4,315	-	39,482
Receivable-backed notes payable	$	433,450	-	-	-	-	-	433,450	$	433,450	-	-	-	-	-	433,450
Notes payable and other
borrowings	$	137,834	16,285	9,422	3,610	110,026	(80,000)	197,177
Notes payable and other borrowings									$	137,834	16,285	9,422	620	3,090	29,926	197,177
Junior subordinated debentures	$	71,147	-	-	-	65,084	-	136,231	$	71,147	-	-	-	-	65,084	136,231

The table below sets forth the Company’s segment information as of and for the ~~three~~nine months ended September 30, ~~2017~~2019 (in thousands):

Reportable Segments

BBX

Corporate

Segment

Capital

BBX

Expenses

Total

Real

Sweet

&

*As

Bluegreen

Estate

Renin

Holdings

Other

Eliminations

Adjusted
Revenues:

Sales of VOIs
$
62,453

-

-

-

-

-

62,453
Fee-based sales commissions

69,977

-

-

-

-

-

69,977
Other fee-based services

27,386

-

-

-

-

-

27,386
Cost reimbursements

14,097

-

-

-

-

-

14,097
Trade sales

-

-

16,463

28,255

-

-

44,718
Interest income

21,296

697

-

1

241

(1,200)

21,035
Net losses on sales of

real estate assets

-

(18)

-

-

-

-

(18)
Other revenue

(119)

964

-

14

507

(118)

1,248
Total revenues

195,090

1,643

16,463

28,270

748

(1,318)

240,896
Costs and expenses:

Cost of VOIs sold

6,444

-

-

-

-

-

6,444
Cost of other fee-based services

17,182

-

-

-

-

-

17,182
Cost reimbursements

14,097

-

-

-

-

-

14,097
Cost of trade sales

-

-

13,509

18,301

-

-

31,810
Interest expense

8,058

-

161

85

2,379

(1,200)

9,483
Recoveries from loan losses, net

-

(2,005)

-

-

-

-

(2,005)
Asset impairments, net

-

1,233

-

273

-

-

1,506
Reimbursement of litigation

costs and penalty

-

-

-

-

(2,113)

-

(2,113)
Selling, general and

administrative expenses

114,934

3,099

2,598

10,879

15,450

(118)

146,842
Total costs and expenses

160,715

2,327

16,268

29,538

15,716

(1,318)

223,246
Equity in net earnings of

unconsolidated real

estate joint ventures

-

2,105

-

-

-

-

2,105
Foreign exchange loss

-

-

(105)

-

-

-

(105)
Income (loss) before

income taxes
$
34,375

1,421

90

(1,268)

(14,968)

-

19,650

Total assets
$
1,166,247

171,270

38,286

98,538

131,406

(81,891)

1,523,856

Expenditures for property

and equipment
$
3,973

58

615

522

612

-

5,780
Depreciation and amortization
$
2,420

161

323

1,327

176

-

4,407
Debt accretion and amortization
$
1,123

-

-

-

180

-

1,303
Cash and cash equivalents
$
124,002

13,246

-

9,304

117,828

-

264,380
Equity method investments
$
-

47,995

-

-

-

-

47,995
Goodwill
$
-

-

-

41,016

-

-

41,016
Receivable-backed notes payable
$
419,335

-

-

-

-

-

419,335
Notes payable and other

borrowings
$
95,594

20,907

16,113

5,169

80,000

(80,000)

137,783
Junior subordinated debentures
$
70,100

-

-

-

65,012

-

135,112



		Bluegreen	BBX Capital Real Estate	Renin	IT'SUGAR	Other	Reconciling Items and Eliminations	Segment Total
Revenues:
Sales of VOIs	$	186,351	-	-	-	-	-	186,351
Fee-based sales commissions		161,033	-	-	-	-	-	161,033
Other fee-based services		94,015	-	-	-	-	-	94,015
Cost reimbursements		58,705	-	-	-	-	-	58,705
Trade sales		-	-	51,124	63,347	24,250	(16)	138,705
Sales of real estate inventory		-	5,030	-	-	-	-	5,030
Interest income		65,964	631	-	-	130	(1,995)	64,730
Net gains on sales of real estate assets		-	11,395	-	-	-	-	11,395
Other revenue		4,228	1,492	152	241	2,020	(593)	7,540
Total revenues		570,296	18,548	51,276	63,588	26,400	(2,604)	727,504
Costs and expenses:
Cost of VOIs sold		17,541	-	-	-	-	-	17,541
Cost of other fee-based services		66,538	-	-	-	-	-	66,538
Cost reimbursements		58,705	-	-	-	-	-	58,705
Cost of trade sales		-	-	40,989	37,442	16,563	(16)	94,978
Cost of real estate inventory sold		-	2,643	-	-	-	-	2,643
Interest expense		29,955	-	387	81	72	4,184	34,679
Recoveries from loan losses, net		-	(4,206)	-	-	-	-	(4,206)
Impairment losses		-	37	-	-	6,749	-	6,786
Selling, general and administrative expenses		355,041	6,709	8,326	26,645	16,061	35,728	448,510
Total costs and expenses		527,780	5,183	49,702	64,168	39,445	39,896	726,174
Equity in net earnings of unconsolidated real estate joint ventures		-	37,276	-	-	-	-	37,276
Foreign exchange loss		-	-	(24)	-	-	-	(24)
Income (loss) before income taxes	$	42,516	50,641	1,550	(580)	(13,045)	(42,500)	38,582

Expenditures for property and equipment	$	18,502	4	284	6,233	1,245	18	26,286
Depreciation and amortization	$	10,453	93	897	3,313	1,889	320	16,965
Debt accretion and amortization	$	3,616	133	23	168	2	243	4,185

The table below sets forth the Company’s segment information as of and for the nine months ended September 30, 2018 (in thousands):

Reportable Segments

BBX

Corporate

Capital

BBX

Expenses

Real

Sweet

&

Segment

Bluegreen

Estate

Renin

Holdings

Other

Eliminations

Total
Revenues:

Sales of VOIs
$
195,412

-

-

-

-

-

195,412
Fee-based sales commissions

167,581

-

-

-

-

-

167,581
Other fee-based services

89,472

-

-

-

-

-

89,472
Cost reimbursements

47,157

-

-

-

-

-

47,157
Trade sales

-

-

47,205

72,442

6,479

(12)

126,114
Sales of real estate inventory

-

17,138

-

-

-

-

17,138
Interest income

63,771

2,064

-

46

1,457

(3,600)

63,738
Net gains on sales of

real estate assets

-

4,798

-

-

-

-

4,798
Other revenue

1,269

2,024

-

155

1,296

(462)

4,282
Total revenues

564,662

26,024

47,205

72,643

9,232

(4,074)

715,692
Costs and expenses:

Cost of VOIs sold

19,838

-

-

-

-

-

19,838
Cost of other fee-based services

53,983

-

-

-

-

-

53,983
Cost reimbursements

47,157

-

-

-

-

-

47,157
Cost of trade sales

-

-

38,454

46,707

2,902

(12)

88,051
Cost of real estate inventory sold

-

11,283

-

-

-

-

11,283
Interest expense

25,470

-

497

238

8,127

(3,600)

30,732
Recoveries from loan losses, net

-

(7,236)

-

-

-

-

(7,236)
Asset impairments, net

-

340

-

187

-

-

527
Selling, general and

administrative expenses

315,535

7,165

7,641

34,099

46,512

(462)

410,490
Total costs and expenses

461,983

11,552

46,592

81,231

57,541

(4,074)

654,825
Equity in net earnings of

unconsolidated real

estate joint ventures

-

1,165

-

-

-

-

1,165
Foreign exchange gain

-

-

91

-

-

-

91
Income (loss) before

income taxes
$
102,679

15,637

704

(8,588)

(48,309)

-

62,123

Expenditures for property

and equipment
$
24,347

298

447

4,330

3,894

-

33,316
Depreciation and amortization
$
9,087

283

869

4,346

806

-

15,391
Debt accretion and amortization
$
2,765

2

12

159

221

-

3,159

~~The table below sets forth the Company’s segment information for the nine months ended September 30, 2017 (in thousands):~~



		Reportable Segments
			BBX			Corporate		Segment
			Capital		BBX	Expenses		Total
			Real		Sweet	&		*As
		Bluegreen	Estate	Renin	Holdings	Other	Eliminations	Adjusted		Bluegreen	BBX Capital Real Estate	Renin	IT'SUGAR	Other	Reconciling Items and Eliminations	Segment Total
Revenues:
Sales of VOIs	$	176,094	-	-	-	-	-	176,094	$	195,412	-	-	-	-	-	195,412
Fee-based sales commissions		179,046	-	-	-	-	-	179,046		167,581	-	-	-	-	-	167,581
Other fee-based services		83,442	-	-	-	-	-	83,442		89,472	-	-	-	-	-	89,472
Cost reimbursements		40,660	-	-	-	-	-	40,660		47,157	-	-	-	-	-	47,157
Trade sales		-	-	51,447	44,922	-	-	96,369		-	-	47,205	58,967	19,954	(12)	126,114
Sales of real estate inventory										-	17,138	-	-	-	-	17,138
Interest income		65,673	1,915	-	3	674	(5,200)	63,065		63,771	2,064	-	1	105	(2,203)	63,738
Net gains on sales of
real estate assets		-	1,668	-	-	-	-	1,668
Net gains on sales of real estate assets										-	4,802	-	-	-	-	4,802
Other revenue		(120)	3,023	-	27	1,079	(357)	3,652		1,269	2,020	-	134	1,455	(600)	4,278
Total revenues		544,795	6,606	51,447	44,952	1,753	(5,557)	643,996		564,662	26,024	47,205	59,102	21,514	(2,815)	715,692
Costs and expenses:
Cost of VOIs sold		11,352	-	-	-	-	-	11,352		19,838	-	-	-	-	-	19,838
Cost of other fee-based services		48,663	-	-	-	-	-	48,663		53,983	-	-	-	-	-	53,983
Cost reimbursements		40,660	-	-	-	-	-	40,660		47,157	-	-	-	-	-	47,157
Cost of trade sales		-	-	41,332	32,441	-	-	73,773		-	-	38,454	34,020	15,583	(12)	88,045
Cost of real estate inventory sold										-	11,283	-	-	-	-	11,283
Interest expense		23,779	-	343	255	8,403	(5,200)	27,580		25,470	-	497	-	241	4,661	30,869
Recoveries from loan losses, net		-	(6,098)	-	-	-	-	(6,098)		-	(7,258)	-	-	-	-	(7,258)
Asset impairments, net		-	1,278	-	273	-	-	1,551
Net gains on cancellation of
junior subordinated debentures		-	-	-	-	(6,929)	-	(6,929)
Reimbursement of litigation
costs and penalty		-	-	-	-	(11,719)	-	(11,719)
Selling, general and
administrative expenses		312,257	8,002	8,404	20,638	46,545	(357)	395,489
Impairment losses										-	362	-	-	187	-	549
Selling, general and administrative expenses										315,535	7,175	7,641	25,559	16,541	37,908	410,359
Total costs and expenses		436,711	3,182	50,079	53,607	36,300	(5,557)	574,322		461,983	11,562	46,592	59,579	32,552	42,557	654,825
Equity in net earnings of
unconsolidated real
estate joint ventures		-	8,428	-	-	-	-	8,428
Foreign exchange loss		-	-	(312)	-	-	-	(312)
Income (loss) before
income taxes	$	108,084	11,852	1,056	(8,655)	(34,547)	-	77,790
Equity in net earnings of unconsolidated real estate joint ventures										-	1,165	-	-	-	-	1,165
Foreign exchange gain										-	-	91	-	-	-	91
Income (loss) before income taxes									$	102,679	15,627	704	(477)	(11,038)	(45,372)	62,123

Expenditures for segment
fixed assets	$	9,380	257	2,454	1,144	923	-	14,158
Expenditures for property and equipment									$	24,347	298	447	4,169	3,841	214	33,316
Depreciation and amortization	$	7,089	480	712	2,509	544	-	11,334	$	9,087	283	869	3,327	1,445	387	15,398
Debt accretion and amortization	$	3,470	-	18	30	214	-	3,732	$	2,765	2	12	-	159	221	3,159

~~In October 2018, Bluegreen completed~~Subsequent events have been evaluated through the 2018-A Term Securitization, a private offering and sale of approximately $117.7 million of investment-grade, VOI receivable-backed notes (the "Notes"), including approximately $49.8 million of Class A Notes, approximately $33.1 million of Class B Notes and approximately $34.8 million of Class C Notes with interest rates of 3.77%, 3.95% and 4.44%, respectively, which blends to an overall weighted average interest rate of approximately 4.02%. The gross advance rate for this transaction was 87.2%. The Notes mature in February 2034. KeyBanc Capital Markets Inc. (“KeyCM”) and Barclays Capital Inc. acted as joint bookrunners and co-lead managers anddate the financial statements were ~~the initial purchasers of the Notes. KeyCM also acted as structuring agent for the transaction.~~

~~The amount of the VOI notes receivables sold or~~available to be sold to BXG Receivables Note Trust 2018-A (the “Trust”) is approximately $135.0 million, approximately $109.0 million of which was sold to the Trust at closing and approximately $26.0 million of which is expected to be sold to the Trust prior to February 25, 2019. The gross proceedsissued. As of such sales to the Trust are anticipated to be approximately $117.7 million. A portion of the proceeds received at the closing was used to: repay KeyBank National Association (“KeyBank”) and DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main (“DZ Bank”) approximately $49.2 million, representing all amounts outstanding (including accrued interest) under Bluegreen’s existing purchase facility with KeyBank and DZ Bank (the "KeyBank/DZ Purchase Facility"); repay Liberty Bank approximately $20.4 million under Bluegreen’s existing Liberty Bank Facility; repay Pacific Western Bank approximately $7.1 million under Bluegreen’s existing Pacific Western Bank Facility; capitalize a reserve fund; and pay fees and expenses associated with the transaction. The remainder of the proceeds from the 2018-A Term Securitization are expected to be used by Bluegreen for general corporate purposes. As a result of the facility repayments described above, following the closing of the 2018-A Term Securitization, (i)date, there were no amounts outstanding under the KeyBank/DZ Purchase Facility, which allows for maximum outstanding receivable-backed borrowings of $80.0 million on a revolving basis through December 31, 2019, (ii) there was approximately $19.1 million outstanding under the Liberty Bank Facility, which permits maximum outstanding receivable-backed borrowings of $50.0 million on a revolving basis through March 12, 2020, and (iii) there was approximately $9.6 million outstanding under the Pacific Western Bank Facility, which permits maximum outstanding receivable-backed borrowings of $40.0 million on a revolving basis through September 20, 2021, in each case, subject to eligible collateral and thesubsequent events identified that required recognition or disclosure other ~~terms and conditions of each facility, respectively. Thus, subject to the foregoing, approximately $76.7 million~~than as disclosed in the ~~aggregate was available under the KeyBank/DZ Purchase Facility, Liberty Bank Facility and Pacific Western Facility as a result of the repayments.~~

Further, subject to performance of the collateral, Bluegreen will receive any excess cash flows generated by the receivables transferred under the 2018-A Term Securitization (meaning excess cash after payments of customary fees, interest, and principal under the 2018-A Term Securitization) on a pro-rata basis as borrowers make payments on their VOI loans.

While ownership of the VOI receivables included in the 2018-A Term Securitization is transferred and sold for legal purposes, the transfer of these VOI notes receivables is accounted for as a secured borrowing for financial accounting purposes. Accordingly, no gain or loss was recognized as a result of the transaction.

In October 2018, the Company entered into an agreement pursuant to which it has agreed, subject to the satisfaction or waiver of the conditions to closing, to acquire a fifty percent (50%) membership interest in The Altman Companies, LLC (“Altman Companies”), a real estate development company which operates a fully integrated multifamily platform covering all aspects of the development process and includes membership interests in Altman Development Company, Altman-Glenewinkel Construction, and Altman Management Company, for a purchase price of $11.8 million. Simultaneously with this investment, the Company has agreed to acquire interests in the managing member of eight multifamily real estate developments affiliated with Altman Companies (the “Developments”) for an aggregate purchase price of $10.9 million, subject to adjustment based on the terms of the agreement.

The Company has also agreed, subject to various terms and conditions, to acquire an additional forty percent (40%) of the membership interests in Altman Companies for a purchase price of $9.4 million in approximately four years after the closing of the initial purchase. The seller, Joel Altman, can also, at his option, or in other predefined circumstances, require the Company to acquire the remaining ten percent (10%) interest in Altman Companies for $2.4 million.

Closing of the investment in Altman Companies and the Developments is subject to the satisfaction or waiver of certain conditions, including obtaining consents from lenders and investors in the Developments.

In October 2018, The Addison on Millenia Investment, LLC, a joint venture in which the Company holds a noncontrolling equity interest which had a carrying amount of $5.2 million as of September 30, 2018, sold its 292 unit multifamily apartment facility located in Orlando, Florida. In connection with the sale, the Company received $14.4 million of distributions from the joint venture.

4232

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Forward -Looking~~Except as otherwise noted or where the context otherwise requires, the terms “the Company,” “we,” “us,” or “our” refers to BBX Capital Corporation and its consolidated subsidiaries, and the term “BBX Capital” refers to BBX Capital Corporation as a standalone entity.

Forward-Looking Statements

This document contains forward-looking statements based largely on current expectations of ~~BBX Capital Corporation (referred to together with its subsidiaries as~~ the ~~“Company,” “we,” “us,” or “our,” and without its subsidiaries as “BBX Capital”)~~Company that involve a number of risks and uncertainties. All opinions, forecasts, projections, future plans, or other statements, other than statements of historical fact, are forward-looking statements and can be identified by the use of words or phrases such as “plans,” “believes,” “will,” “expects,” “anticipates,” “intends,” “estimates,” “our view,” “we see,” ~~“would”~~“would,” and words and phrases of similar import. The forward-looking statements in this document are also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve substantial risks and uncertainties. We can give no assurance that such expectations will prove to be correct. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained herein. Forward-looking statements are based largely on our expectations and are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. When considering forward-looking statements, the reader should keep in mind the risks, uncertainties, and other cautionary statements made in this ~~report.~~report and in the Company’s other reports filed with the SEC. The reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made. This document also contains information regarding the past performance of the Company and its respective investments and ~~operations, and the~~operations. The reader should note that prior or current performance is not a guarantee or indication of future performance. ~~Future~~Comparisons of results ~~could differ materially~~for current and any prior periods are not intended to express any future trends or indications of future performance, and all such information should only be viewed as ~~a result of a variety of risks and uncertainties.~~historical data.

~~Some factors which may affect~~Future results and the accuracy of ~~the~~ forward-looking statements apply generally to the industries in which the Company operates, including the resort development and vacation ownership industries in which Bluegreen Vacations Corporation (“Bluegreen”) operates, the real estate development and construction industry in which BBX Capital Real Estate operates, the home improvement industry in which Renin Holdings, LLC (“Renin”) operates, and the confectionery industry in which BBX Sweet Holdings, LLC (“BBX Sweet Holdings”) operates.

~~These~~may be affected by various risks and uncertainties, ~~include, but~~including the risk factors applicable to the Company which are described in “Item 1. Business – Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Annual Report”), as well as the risk that Bluegreen Vacations Corporation’s (“Bluegreen” or “Bluegreen Vacations”) relationship with Bass Pro under the revised terms of its marketing agreement with Bass Pro may not ~~limited to:~~

~~BBX Capital has limited sources of cash~~be as profitable as under the prior terms, or at all, or otherwise result in the benefits anticipated, and is dependent upon dividends from Bluegreen to fund its operations; Bluegreen may not be in a position to pay dividends or its board of directors may determine not to pay dividends; and dividend payments may be subject to restrictions, including restrictions contained in debt instruments;

~~Risks associated with the Company’s indebtedness, including~~ that the Company will be required to utilize cash flow to service its indebtedness, that indebtedness may make the Company more vulnerable to economic downturns, that indebtedness subjects the Company to covenants and restrictions on its operations and activities and on its ability to pay dividends, and, with respect to the $80.0 million loan that BBX Capital received from a subsidiary of Bluegreen during April 2015, that BBX Capital may be required to prepay the loan to the extent necessary for Bluegreen or its subsidiaries to remain in compliance with covenants under their outstanding indebtedness;

Risks associated with the Company’s current business strategy, including the risk that the Company will not be in a position to provide strategic support to or make additional investments in its subsidiaries or in joint ventures, or that the Company may not achieve or maintain in the future the benefits anticipated to be realized from such support or additional investments, and the risk that the Company will not be in a position to make new investments or that any investments made will not be advantageous;

The risks and uncertainties affecting the Company and its results, operations, markets, products, services and business strategies, and the risks and uncertainties associated with its ability to successfully implement its currently anticipated plans, and its ability to generate earnings under the current business strategy;

~~Risks associated with acquisitions, asset or subsidiary dispositions, or debt or equity financings which the Company may consider or pursue from time to time;~~

The risk that creditors of the Company’s subsidiaries or other third-parties may seek to recover distributions or dividends made by such subsidiaries to the Company or other amounts owed by such subsidiaries to such creditors or third-parties;

~~Adverse conditions in the stock market, the public debt market, and other capital markets and the impact of such conditions on the activities of the Company;~~

~~BBX Capital’s shareholders’ interests will be diluted if additional shares of its common stock are issued;~~

~~The risk that BBX Capital may not pay dividends on its Class A Common Stock or Class B Common Stock in the amount anticipated, when anticipated, or at all;~~

The impact of economic conditions on the Company, the price and liquidity of BBX Capital’s Class A Common Stock and Class B Common Stock, and the Company’s ability to obtain additional capital, including the risk that if the Company needs or otherwise believes it is advisable to issue debt or equity securities or to incur indebtedness in order to fund its operations or investments, it may not be possible to issue any such securities or obtain such indebtedness on favorable terms, or at all;

The impact on liquidity of BBX Capital’s Class A Common Stock of not maintaining compliance with the listing requirements of the NYSE, which includes, among other things, a minimum average closing price, share volume and market capitalization;

~~The performance of entities in which the Company has made investments may not be profitable or achieve anticipated results;~~

~~Uncertainty associated with the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) and the impact it may have on the Company’s future results;~~

~~Risks of cybersecurity threats, including the potential misappropriation of assets or confidential information, corruption of data or operational disruptions;~~

The impact on the Company’s consolidated financial statements and internal control over financial reporting of the adoption of new accounting standards, including the new standard for accounting for leases which the Company expects to adopt on January 1, 2019; and

The preparation of financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) involves making estimates, judgments and assumptions, and any changes in estimates, judgments and assumptions used could have a material adverse impact on the financial condition and operating results of the Company or its subsidiaries.

~~With respect to~~ Bluegreen may not open kiosks in Cabela’s stores in the ~~risks and uncertainties include, but are not limited to:~~

~~Adverse trends or disruptions in economic conditions generally or in the vacation ownership, vacation rental and travel industries;~~

Adverse changes to, or interruptions in, business relationships, including the expiration or termination of, or disputes in connection with, Bluegreen’s management contracts, exchange networks or other strategic alliances;

The risks of the real estate market and the risks associated with real estate development, including a decline in real estate values and a deterioration of other conditions relating to the real estate market and real estate development;

~~Bluegreen’s ability to maintain an optimal level of inventory of vacation ownership interests (“VOIs”) for sale;~~

~~The availability of financing and Bluegreen’s ability to sell, securitize or borrow against its consumer loans;~~

~~Decreased demand from prospective purchasers of VOIs;~~

~~Adverse events or trends in vacation destinations and regions where the resorts in Bluegreen’s network are located, including weather related events;~~

Bluegreen’s indebtedness may impact the Company’s financial condition and results of operations, and the terms of Bluegreen’s indebtedness may limit, among other things, its activities and ability to pay dividends, and Bluegreen may not comply with the terms of its indebtedness;

~~Changes in Bluegreen’s senior management;~~

~~Ability to comply with regulations applicable to the vacation ownership industry;~~

~~Bluegreen’s ability to successfully implement its growth strategy or maintain or expand its capital light business relationships or activities;~~

~~Bluegreen’s ability to compete effectively in the highly competitive vacation ownership industry and against hotel and other hospitality and lodging alternatives;~~

~~Risks associated with, and the impact of, regulatory examinations or audits of Bluegreen’s operations, and the costs associated with regulatory compliance;~~

~~Bluegreen’s customers’ compliance with their payment obligations under financing provided by Bluegreen, and the impact of defaults on Bluegreen’s operating results and liquidity position;~~

~~The ratings of third-party rating agencies, including the impact of any downgrade on Bluegreen’s ability to obtain, renew or extend credit facilities, or otherwise raise funds;~~

Changes in Bluegreen’s business model and marketing efforts, plans or strategies, which may cause marketing expenses to increase or adversely impact Bluegreen’s revenue, operating results and financial

~~condition and such expenses~~number or at the times anticipated. The risk factors described in the 2018 Annual Report, as well as ~~Bluegreen’s investments in new and expanded sales offices may not achieve the desired benefits;~~

~~The impact of the resale market for VOIs on Bluegreen’s business, operating results and financial condition;~~

Risks associated with Bluegreen’s relationships with third-party developers, including that third-party developers who provide VOIs to be sold by Bluegreen pursuant to fee-based services or just-in-time (“JIT”) arrangements may not provide VOIs when planned and that third-party developers may not fulfill their obligations to Bluegreen or to the homeowner associations (“HOAs”) that maintain the resorts they developed;

Risks associated with legal and other regulatory proceedings, including claims of noncompliance with applicable regulations or for development related defects, and the impact they may have on the Company’s financial condition and operating results;

~~Audits of Bluegreen’s or its subsidiaries’ tax returns, including that they may result in the imposition of additional taxes;~~

~~Environmental liabilities, including claims with respect to mold or hazardous or toxic substances, and their impact on our financial condition and operating results;~~

~~Bluegreen’s ability to maintain the integrity of internal or customer data, the failure of which could result in damage to our reputation and/or subject us to costs, fines or lawsuits;~~

~~Risks associated with the management of Bluegreen’s resorts;~~

Risks related to potential business expansion that Bluegreen may pursue, including that Bluegreen may not pursue such expansion when or to the extent anticipated or at all, and any such expansion may involve significant costs and the incurrence of significant indebtedness and may not be successful;

The updating of, and developments with respect to, technology, including the cost involved in updating Bluegreen’s technology and the impact that any failure to keep pace with developments in technology could have on Bluegreen’s operations or competitive position and Bluegreen’s information technology expenditures may not result in the expected benefits;

~~The calculation of payments and reimbursements due under Bluegreen’s marketing agreement with Bass Pro and the parties’ ability to resolve the issue; and~~

~~The risk that the impact of the hurricanes may be materially different than estimated and we may not have achieved the assumed sales.~~

~~With respect to BBX Capital Real Estate, the risks and uncertainties include, but are not limited to:~~

The impact of economic, competitive and other factors affecting BBX Capital Real Estate and its assets, including the impact of a decline in real estate values on BBX Capital Real Estate’s business and the value of its assets;

~~The risks associated with investments in real estate developments and joint ventures include:~~

~~exposure to downturns in the real estate and housing markets;~~

exposure to risks associated with real estate development activities, including increasing land and construction costs, construction delays, reduced demand for homes, and severe weather conditions which can exacerbate these risks and also cause uninsured losses;

~~risks associated with obtaining necessary zoning and entitlements;~~

~~risks that joint venture partners may not fulfill their obligations and concentration risks associated with entering into numerous joint ventures with the same joint venture partner;~~

~~risks relating to reliance on third-party developers or joint venture partners to complete real estate projects;~~

~~risk that the projects will not be developed as anticipated or be profitable; and~~

~~risk associated with customers not performing on their contractual obligations.~~

~~With respect to the Company’s investment activities in middle market operating businesses, the risks and uncertainties include, but are not limited to:~~

Risks that investments in operating businesses and franchises may not achieve the returns anticipated or may not be profitable, including the risks associated with the operations and activities of Renin, BBX Sweet Holdings, and the Company’s pizza restaurant operations as a franchisee of MOD Super-Fast Pizza, LLC (“MOD Pizza”);

Risks that the integration of IT’SUGAR, LLC (“IT’SUGAR”), which was acquired by BBX Sweet Holdings in June 2017, may not be completed on a timely basis or as anticipated, that the acquisition may not be advantageous, and that the Company may not realize the anticipated benefits of the acquisition;

Risks that the reorganization of certain BBX Sweet Holdings’ business entities and operations may not achieve anticipated operating efficiencies and that the implementation of strategic alternatives, including the sale or disposal of certain subsidiaries, will result in additional losses;

~~The amount and terms of indebtedness associated with acquisitions and operations may impact the Company’s financial condition and results of operations and limit the Company’s activities;~~

Continued operating losses and the failure of the Company’s businesses to meet financial metrics may result in the Company making further capital contributions or advances to the businesses or a decision not to support underperforming businesses;

~~The risk of impairment losses associated with declines in the value of the Company’s investments in operating businesses or the Company’s inability to recover its investments;~~

~~The risk of losses associated with excess and obsolete inventory and the risks of additional required reserves for lower of cost or market value losses in inventory;~~

~~The risk of trade receivable losses and the risks of charge-offs and required increases in the allowance for bad debts;~~

~~Risks associated with commodity price volatility and the impact of tariffs on goods imported from Canada and Asia; and~~

~~Renin’s operations expose the Company to foreign currency exchange risk of the U.S. dollar compared to the Canadian dollar.~~

~~In addition to the risks and factors identified above, reference is also made to~~ the other risks and factors detailed in this report and the other reports filed by the Company with the SEC, ~~including those disclosed in the “Risk Factors” section~~are not necessarily all of the important factors that could cause the Company’s ~~Annual Report on Form 10-K for~~actual results to differ materially from those expressed in any of the ~~year ended December 31, 2017 (the “2017 Annual Report”). The~~forward-looking statements. Other unknown or unpredictable factors could cause the Company’s actual results to differ materially from those expressed in any of the forward-looking statements. As a result, the Company cautions that the foregoing factors are not exclusive.

Given these uncertainties, you are cautioned not to place undue reliance on forward-looking statements, and you should read this Quarterly Report on Form 10-Q with the understanding that actual future results, levels of activity, performance, and events and circumstances may be materially different from prior results or what the Company expects. The Company qualifies all forward-looking statements by these cautionary statements.

Forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q, and the Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report.

Critical Accounting Policies

~~For~~See Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the section “Critical Accounting Policies” to the Company’s 2018 Annual Report for a discussion of the Company’s critical accounting ~~policies, see Note 2 to the Company’s condensed consolidated financial statements included in Item 1 of this report and “Critical Accounting Policies” in the Company’s 2017 Annual Report.~~policies.

New Accounting Pronouncements

See Note 1 to the Company’s condensed consolidated financial statements included ~~under~~in Item 1 of this report for a discussion of new accounting pronouncements applicable to the Company.

Overview

BBX Capital is a Florida-based diversified holding company ~~with~~whose principal investments are Bluegreen Vacations, BBX Capital Real Estate LLC (“BBX Capital Real Estate”), Renin Holdings, LLC (“Renin”), and IT’SUGAR, LLC (“IT’SUGAR”). In addition to its principal investments, the Company has other investments in Bluegreen, real estate and real estate joint ventures, and middle market operating businesses. Bluegreen is a sales, marketing and management company focused on the vacation ownership industry. The Company’s real estate investments include real estate joint ventures and the acquisition, development, ownership, financing, and management of real estate. The Company’s investments in middle marketvarious operating businesses, ~~include Renin, a company that manufactures products for~~including companies in the ~~home improvement industry, investments in~~ confectionery ~~businesses through its wholly-owned subsidiary, BBX Sweet Holdings, and more recently, its activities as a franchisee of MOD Pizza.~~industry.

The Company’s ~~strategy~~goal is to build long-term shareholder value. Since many of the Company’s assets do not generate income on a regular or predictable basis, ~~our~~the Company’s objective continues to be long-term growth as measured by increases in book value and intrinsic value over time. In addition, the Company’s goal is to streamline its investment verticals so that the Company can be more easily analyzed and followed by the marketplace. The Company regularly reviews the performance of its investments and, based upon economic, market, and other relevant factors, considers transactions involving the sale or disposition of all or a portion of its assets, investments, or subsidiaries. These include, among other alternatives, a sale or spin-off of its assets, investments, or subsidiaries or transactions involving public or private issuances of debt or equity securities which decrease or dilute the Company’s ownership interest in such investments.

In 2016, Food for Thought Restaurant Group (“FFTRG”), a wholly-owned subsidiary of BBX Capital, entered into area development and franchise agreements with MOD Super Fast Pizza (“MOD Pizza”) related to the development of up to approximately 60 MOD Pizza franchised restaurant locations throughout Florida. Through 2019, FFTRG had opened nine restaurant locations. As a result of FFTRG’s overall operating performance and the Company’s goal of streamlining its investment verticals, the Company entered into an agreement with MOD Pizza to terminate the area development and franchise agreements and transferred seven of its restaurant locations, including the related assets, operations, and lease obligations, to MOD Pizza during the third quarter of 2019. In addition, the Company closed the remaining two locations and terminated the related lease agreements. The Company recognized $4.0 million and $6.7 million of impairment losses associated with its investment in MOD Pizza restaurant locations during the three and nine months ended September 30, 2019, respectively.

As of September 30, ~~2018,~~2019, the Company had total consolidated assets of approximately ~~$1.7~~$1.8 billion and shareholders’ equity of approximately ~~$552.7~~$556.7 million. Net income attributable to shareholders for the three and nine months ended September 30, 2018 was approximately $6.2 million and $23.8 million, respectively. Net income attributable to shareholders for the three and nine months ended September 30, 2017 was approximately $8.1 million and $38.3 million, respectively.

Summary of Consolidated Results of Operations

Consolidated Results

The following summarizes key financial highlights for the three months ended September 30, ~~2018~~2019 compared to the same ~~2017~~2018 period:

Total consolidated revenues ~~were $254.4~~of $255.1 million, a ~~5.6%~~0.3% increase compared to the same period in ~~2017.~~2018.

Income before income taxes ~~was $18.7~~of $41.2 million, a ~~4.7% decrease~~119.9% increase compared to the same period in ~~2017.~~2018.

Net income attributable to common shareholders ~~was $6.2~~of $22.4 million, a ~~24.0% decrease~~262.3% increase compared to the same period in ~~2017.~~2018.

Diluted earnings per share ~~were $0.06~~of $0.24 per diluted share, ~~a $0.02~~an $0.18 per share ~~decrease~~increase compared to the same ~~period in 2017.~~2018 period.

The following summarizes key financial highlights for the nine months ended September 30, ~~2018~~2019 compared to the same ~~2017~~2018 period:

Total consolidated revenues ~~were $715.7~~of $727.5 million, ~~an 11.1%~~a 1.7% increase compared to the same period in ~~2017.~~2018.

Income before income taxes ~~was $62.1~~of $38.6 million, a ~~20.1%~~37.9% decrease compared to the same period in ~~2017.~~2018.

Net income attributable to common shareholders ~~was $23.8~~of $12.2 million, a ~~37.8%~~48.6% decrease compared to the same period in ~~2017.~~2018.

Diluted earnings per share ~~were $0.24~~of $0.13 per diluted share, ~~a $0.12~~an $0.11 per share decrease compared to the same ~~period in 2017.~~2018 period.

The Company’s consolidated results for the three ~~and nine~~ months ended September 30, 2019 compared to the same 2018 period were ~~significantly~~ impacted by the ~~following events:~~following:

~~In June 2017, BBX Sweet Holdings acquired IT’SUGAR, a specialty candy retailer with over 90 retail locations~~The Altis at Bonterra joint venture’s sale of its multifamily apartment community located in ~~26 states and Washington, DC,~~Hialeah, Florida, which resulted in the recognition of $29.1 million of equity earnings from the joint venture for ~~a purchase price of $58.4 million, net of cash acquired. During~~ the three ~~and nine~~ months ended September 30, 2018, IT’SUGAR contributed revenues of $22.8 million and $59.1 million, respectively, and income (loss) before taxes of $1.6 million and ($0.5 million), respectively, with the net loss for the nine months ended September 30, 2018 reflecting the seasonal nature of IT’SUGAR’s trade sales during the first half of the year.

During the fourth quarter of 2017, Bluegreen completed an initial public offering (“IPO”) of its common stock, which resulted in a decrease in BBX Capital’s ownership in Bluegreen’s common stock from 100% to 90%. As a result, 10% of Bluegreen’s net income is attributed to noncontrolling interests.

As a result of its analysis of the impact of the Tax Reform Act on the deductibility of certain compensation to covered employees, the Company recognized a provisional adjustment which increased the provision for income taxes by $2.8 million for the nine months ended September 30, 2018.

During the three and nine months ended September 30, 2018, BBX Capital Real Estate recognized $0.4 million and $12.0 million, respectively, in net gains on sales of real estate assets and recoveries from loan losses associated with its legacy assets and $2.8 million and $5.9 million, respectively, in pre-tax profits from the sale of developed lots at its Beacon Lake Community development in St. Johns County, Florida.2019.

The ~~reduction in the U.S. corporate income tax rate~~Company’s exit from ~~35% to 21% associated with the enactment of the Tax Reform Act effective January 1, 2018.~~

~~The Company’s consolidated results for the three and nine months ended September 30, 2017 were significantly impacted by the following events:~~

~~During the nine months ended September 30, 2017, Woodbridge purchased and cancelled $18.8 million of~~ its ~~junior subordinated debentures,~~MOD Pizza restaurant operations, which resulted in the recognition of ~~a $6.9~~$4.0 million ~~net gain on cancellation~~ of ~~debt.~~impairment losses during the three months ended September 30, 2019, as described above.

~~During~~A net increase in Bluegreen’s gross profits from VOI sales primarily attributable to a decrease in costs of VOIs sold, which reflects an increase in the ~~three and nine months ended September 30, 2017, BBX Capital received reimbursements~~acquisition of ~~legal fees and costs from its insurance carrier~~secondary market VOI inventory and the ~~release~~sale of relatively lower cost VOIs in 2019, partially offset by a decrease in system-wide sales of VOIs primarily due to a decline in VPG and guest tours, an increase in the provision for loan losses, which reflects higher loan defaults in 2019, and an increase in net carrying cost of VOI inventory.

In addition to the items discussed above for the three months ended September 30, 2019, the Company’s consolidated results for the nine months ended September 30, 2019 compared to the same 2018 period were impacted by the following:

The recognition of a ~~penalty held~~charge of $39.1 million in ~~escrow~~the 2019 period associated with ~~the resolution of the Securities and Exchange Commission civil litigation, which resulted~~Bluegreen’s settlement agreement with Bass Pro in ~~a $2.1 million and $11.7 million reduction to total costs and expenses for the respective periods.~~June 2019.

~~During~~A net increase in sale activity in BBX Capital Real Estate’s portfolio in the ~~three~~2019 period, including the Company’s sale of RoboVault and ~~nine months ended September 30, 2017, IT’SUGAR contributed revenues~~its remaining land parcels located at PGA Station in Palm Beach Gardens, Florida, the Altis at Lakeline joint venture’s sale of ~~$22.6 million~~its multifamily apartment community located in Cedar Park, Texas, and ~~$26.9 million, respectively, and net income before taxes~~the PGA Design Center joint venture’s sale of ~~$2.3 million and $3.0 million, respectively.~~its remaining commercial buildings located in Palm Beach Gardens, Florida.

~~During~~A net decrease in Bluegreen’s gross profits from VOI sales primarily attributable to lower system-wide sales of VOIs and an increase in the ~~three~~provision for loan losses, partially offset by a decrease in costs of VOIs sold.

An increase in Bluegreen’s net carrying cost of VOI inventory primarily due to Bluegreen’s acquisition of the Éilan Hotel and ~~nine months ended September 30, 2017,~~Spa during April 2018, an increase in maintenance fees and developer subsidies, and a decline in rental and sampler revenues.

A decrease in BBX Capital Real ~~Estate recognized $2.0 million and $7.8 million, respectively, in net gains on the sales of real estate assets~~Estate’s interest income and recoveries from loan losses ~~associated with its~~primarily due to the continued decline in the balance of the Company’s legacy ~~assets and $1.7 million and $7.9 million, respectively,~~portfolio, as several significant nonaccrual commercial loans were repaid in ~~equity earnings from the CC Homes Bonterra joint venture, which completed sales in its 394 single-family home community development in 2017.~~2018.

4735

Segment Results

We currently report the results of our business activities through the following reportable segments: Bluegreen, BBX Capital Real Estate, Renin, and ~~BBX Sweet Holdings.~~IT’SUGAR.

Information regarding income ~~(loss)~~ before income taxes by reportable segment ~~for the three and nine months ended September 30, 2018 and 2017~~ is set forth in the table below (in thousands):

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2018

2017

Change

2018

2017

Change
Bluegreen
$
32,516

34,375

(1,859)

102,679

108,084

(5,405)
BBX Capital Real Estate

1,945

1,421

524

15,637

11,852

3,785
Renin

693

90

603

704

1,056

(352)
BBX Sweet Holdings

39

(1,268)

1,307

(8,588)

(8,655)

67
Corporate Expenses & Other

(16,466)

(14,968)

(1,498)

(48,309)

(34,547)

(13,762)
Income before income taxes

18,727

19,650

(923)

62,123

77,790

(15,667)
Provision for income taxes

(6,742)

(8,126)

1,384

(21,997)

(30,021)

8,024
Net income

11,985

11,524

461

40,126

47,769

(7,643)
Less: Net income attributable to

noncontrolling interests

5,806

3,398

2,408

16,324

9,488

6,836
Net income attributable to shareholders
$
6,179

8,126

(1,947)

23,802

38,281

(14,479)


		For the Three Months Ended September 30,			For the Nine Months Ended September 30,
		2019	2018	Change	2019	2018	Change
Bluegreen	$	30,353	32,516	(2,163)	42,516	102,679	(60,163)
BBX Capital Real Estate		29,114	1,940	27,174	50,641	15,627	35,014
Renin		479	693	(214)	1,550	704	846
IT'SUGAR		1,200	1,564	(364)	(580)	(477)	(103)
Other		(6,259)	(2,676)	(3,583)	(13,045)	(11,038)	(2,007)
Reconciling items and eliminations		(13,705)	(15,310)	1,605	(42,500)	(45,372)	2,872
Income before income taxes		41,182	18,727	22,455	38,582	62,123	(23,541)
Provision for income taxes		(14,682)	(6,742)	(7,940)	(15,068)	(21,997)	6,929
Net income		26,500	11,985	14,515	23,514	40,126	(16,612)
Less: Net income attributable to noncontrolling interests		4,112	5,806	(1,694)	11,275	16,324	(5,049)
Net income attributable to shareholders	$	22,388	6,179	16,209	12,239	23,802	(11,563)

Bluegreen Reportable Segment

Segment Description

Bluegreen is a leading vacation ownership company that markets and sells VOIs and manages resorts in popular leisure and urban destinations. Bluegreen’s resort network includes 45 Club Resorts (resorts in which owners in its Vacation Club have the right to use most of the units in connection with their VOI ownership) and 24 Club Associate Resorts (resorts in which owners in its Vacation Club have the right to use a limited number of units in connection with their VOI ownership). Bluegreen’s Club Resorts and Club Associate Resorts are primarily located in popular, high-volume, “drive-to” vacation locations, including Orlando, Las Vegas, Myrtle Beach and Charleston, among others. Through its points-based system, the approximately ~~216,000~~219,000 owners in its Vacation Club have the flexibility to stay at units available at any of its resorts and have access to approximately ~~11,100~~11,350 other hotels and resorts through partnerships and exchange networks. Bluegreen has a robust sales and marketing platform supported by exclusive marketing relationships ~~with nationally-recognized consumer brands, Bass Pro and Choice Hotels. These marketing relationships~~which drive sales within its core demographic.

~~VOI Sales and Financing~~

Bluegreen’s primary business is the marketing and sale of deeded VOIs, developed either by Bluegreen or third parties. Customers who purchase these VOIs receive an annual allotment of points, which can be redeemed for stays at one of its resorts or at approximately 11,100 other hotels and resorts available through partnerships and exchange networks. Historically, VOI companies have funded the majority of the capital investment in connection with resort development with internal resources and acquisition and development financing. In 2009, Bluegreen began selling VOIs on behalf of third-party developers and has successfully diversified from a business focused on capital-intensive resort development to a more flexible model with a balanced mix of developed and capital-light inventory. Bluegreen’s relationships with third-party developers enable it to generate fees from the sales and marketing of their VOIs without incurring the significant upfront capital investment generally associated with resort acquisition or development. While sales of acquired or developed inventory typically result in greater income before income taxes and Adjusted EBITDA contribution, fee-based sales typically require no initial investment or development financing risk. Both acquired or developed VOI sales and fee-based VOI sales drive recurring, incremental and long-term fee streams by adding owners to Bluegreen’s Vacation Club and new resort management contracts. In conjunction with

sales of VOIs owned by Bluegreen, Bluegreen also generates interest income by originating loans to qualified purchasers. Collateralized by the underlying VOIs, Bluegreen’s loans are generally structured as 10-year, fully-amortizing loans with a fixed interest rate ranging from approximately 12% to 18% per annum. As of September 30, 2018, the weighted-average interest rate on its VOI notes receivable was 15.2%. In addition, Bluegreen earns fees for various other services, including title and escrow services in connection with the closing of VOI sales, and for mortgage servicing.

~~Resort Operations and Club Management~~

Bluegreen enters into management agreements with the HOAs that maintain most of the resorts in its Vacation Club and earns fees for providing management services to those HOAs and Bluegreen’s approximately 216,000 Vacation Club owners. These resort management services include oversight of housekeeping services, maintenance, and certain accounting and administration functions. Bluegreen’s management contracts yield highly predictable, recurring cash flows and do not have the traditional risks associated with hotel management contracts that are linked to daily rate or occupancy. Bluegreen’s management contracts are typically structured as “cost-plus,” with an initial term of three years and automatic one-year renewals. In connection with the management services providedSee Item 7 to the ~~Vacation Club, Bluegreen manages the reservation system and provides owner, billing and collection services. Bluegreen has not lost any of the 45 Club Resort management contracts. In addition~~Company’s 2018 Annual Report for additional information with respect to resort and club management services, Bluegreen earns fees for various other services that produce recurring, predictable and long term-revenue, including construction management services for third-party developers.

~~Principal Components Affecting Bluegreen’s Results of Operations~~

~~Principal Components of Revenues~~

~~Fee-Based Sales.~~ ~~Represent sales of third-party VOIs where Bluegreen is paid a commission.~~

~~JIT Sales.~~ ~~Represent sales of VOIs acquired from third parties in close proximity to when Bluegreen intends to sell such VOIs.~~

~~Secondary Market Sales.~~ Represent sales of VOIs acquired from HOAs or other owners, typically in connection with maintenance fee defaults. This inventory is generally purchased at a greater discount to retail price compared to developed VOIs and VOIs purchased by Bluegreen for sale as part of Bluegreen JIT sales activities.

~~Developed VOI Sales.~~ ~~Represent sales of VOIs in resorts that Bluegreen has developed or acquired (not including inventory acquired through JIT and secondary market arrangements).~~

~~Financing Revenue.~~ Represents revenue from the financing of VOI sales, which includes interest income and loan servicing fees. Bluegreen also earns fees from providing mortgage servicing to certain third-party developers relating to VOIs sold by them.

~~Other Fee-Based Services.~~ Represents resort operation and club management fees from managing the Vacation Club and transaction fees for certain resort amenities and certain member exchanges. Bluegreen also earns recurring management fees under its management agreements with HOAs for day-to-day management services, including oversight of housekeeping services, maintenance, and certain accounting and administrative functions. Bluegreen also includes in other fee-based services revenue earned from various other services that produce recurring, predictable and long-term revenue, such as title services.

~~Principal Components of Costs and Expenses~~

~~Cost of VOIs Sold~~. Represents the cost at which Bluegreen’s owned VOIs sold during the period were relieved from inventory. In addition to inventory from its developed VOI business, Bluegreen’s owned VOIs also include those that were acquired by Bluegreen under JIT and secondary market arrangements. Compared to the cost of Bluegreen’s developed VOI inventory, VOIs acquired in connection with JIT arrangements typically have a relatively higher associated cost of sales as a percentage of sales, while those acquired in connection with secondary market arrangements typically have a lower cost of sales as a percentage of sales, as secondary market inventory is generally obtained from HOAs at a significant discount to retail price. Cost of VOIs sold as a percentage of sales of VOIs varies between periods based on the relative costs of the specific VOIs sold in each period and the size of the point packages of the VOIs sold (primarily due to offered volume discounts, and taking into account consideration of cumulative sales to existing owners). Additionally, the effect of changes in estimates under the relative sales value method,

including estimates of projected sales, future defaults, upgrades and incremental revenue from the resale of repossessed VOI inventory, are reflected on a retrospective basis in the period the change occurs. Cost of sales will typically be favorably impacted in periods where a significant amount of secondary market VOI inventory is acquired or actual defaults and equity trades are higher and the resulting change in estimate is recognized. While Bluegreen believes that additional inventory will be available through the secondary market at favorable prices in the future, there can be no assurance that such inventory will be available as expected.

~~Net Carrying Cost of VOI Inventory.~~ Represents the maintenance fees and developer subsidies for unsold VOI inventory paid or accrued to the HOAs that maintain the resorts. Bluegreen attempts to offset this expense, to the extent possible, by generating revenue from renting its VOIs and through utilizing them in its sampler programs. Bluegreen nets such revenue from this expense item.

~~Selling and Marketing Expense~~. Represents costs incurred to sell and market VOIs, including costs relating to marketing and incentive programs, tours, and related wages and sales commissions. Revenues from vacation package sales are netted against selling and marketing expenses.

~~Financing Expense.~~ Represents financing interest expense related to Bluegreen’s receivable-backed debt, amortization of the related debt issuance costs, and expenses incurred in providing financing and servicing loans, including administrative costs associated with mortgage servicing activities for Bluegreen’s loans and the loans of certain third-party developers. Mortgage servicing activities include, among other things, payment processing, reporting and collections services.

~~Cost of Other Fee-Based Services.~~ ~~Represents costs incurred to manage resorts and the Vacation Club, including payroll and related costs and other administrative costs to the extent not reimbursed by the Vacation Club or HOAs.~~

~~General and Administrative Expense.~~ ~~Primarily represents compensation expense for personnel supporting~~ Bluegreen’s business and ~~operations, professional fees (including consulting, audit and legal fees), and administrative and related expenses.~~operations.

Key Business and Financial Metrics and Terms Used by Management

In addition to the principal components of revenues and expenses affecting Bluegreen’ results of operations, which are further described in Item 7 to the Company’s 2018 Annual Report, Bluegreen’s management uses certain key business and financial metrics and terms to discuss its results of operations, including certain terms which are not recognized by GAAP, which are described below.

Sales of VOIs. Represent sales of Bluegreen’s owned VOIs, including ~~sales of~~ developed VOIs and those acquired through ~~JIT~~just-in-time (“JIT”) and secondary market arrangements, reduced by equity trade allowances and a provision for loan losses. In addition to the factors impacting system-wide sales of VOIs (as described below), sales of VOIs are impacted by the proportion of system-wide sales of VOIs sold on behalf of ~~third-parties~~third parties on a commission basis, which are not included in sales of VOIs.

System-wide Sales of VOIs. Represents all sales of VOIs, whether owned by Bluegreen or a third party immediately prior to the sale. Sales of VOIs owned by third parties are transacted as sales of VOIs in Bluegreen’s Vacation Club through the same selling and marketing process used to sell Bluegreen’s VOI inventory. Bluegreen considers system-wide sales of VOIs to be an important operating measure because it reflects all sales of VOIs by Bluegreen’s sales

and marketing operations without regard to whether Bluegreen or a third party owned such VOI inventory at the time of sale. System-wide sales of VOIs is not a recognized term under GAAP and should not be considered as an alternative to sales of VOIs or any other measure of financial performance derived in accordance with GAAP or to any other method of analyzing Bluegreen’s results as reported under GAAP.

Guest Tours. Represents the number of sales presentations given at Bluegreen’s sales centers during the period.

Sale to Tour Conversion Ratio. Represents the rate at which guest tours are converted to sales of VOIs and is calculated by dividing the number of sales transactions by the number of guest tours.

Average Sales Volume Per Guest (“VPG”). Represents the sales attributable to ~~tours~~each guest tour at Bluegreen’s sales locations and is calculated by dividing ~~VOI~~ sales of VOIs by guest tours. Bluegreen considers VPG to be an important operating measure because it measures the effectiveness of Bluegreen’s sales process, combining the average transaction price with the sale-to-tour conversion ratio.

EBITDA. Bluegreen defines EBITDA as earnings, or net income (loss), before taking into account interest income (excluding interest earned on VOI notes receivable), interest expense (excluding interest expense incurred on debt secured by VOI notes receivable), income and franchise taxes, and depreciation and amortization. For the purposes of the EBITDA calculation, no adjustments are 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 operations of Bluegreen’s business.

Adjusted EBITDA. Bluegreen defines Adjusted EBITDA as EBITDA adjusted for EBITDA attributable to the noncontrolling interest in Bluegreen/Big Cedar Vacations (in which Bluegreen owns a 51% interest) and items that Bluegreen believes are not representative of ongoing operating results. Accordingly, amounts paid, accrued, or incurred in connection with the Bass Pro settlement in June 2019 were excluded in the computation of Adjusted EBITDA for the nine months ended September 30, 2019.

Bluegreen considers EBITDA and Adjusted EBITDA to be an indicator of its operating performance, and they are used by Bluegreen to measure its ability to service debt, fund capital expenditures, and expand its business. EBITDA is also used by companies, lenders, investors and others because it excludes 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 also excludes 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.

Bluegreen considers Adjusted EBITDA to be a useful supplemental measure of Bluegreen’s operating performance that facilitates the comparability of historical financial periods.

EBITDA and Adjusted EBITDA are not recognized terms under GAAP and should not be considered as an alternative to net income (loss) or any other measure of financial performance or liquidity, including cash flow, derived in accordance with GAAP, or to any other method of analyzing Bluegreen’s results as reported under GAAP. The limitations of using EBITDA or Adjusted EBITDA as an analytical tool include, without limitation, that EBITDA or Adjusted EBITDA does 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 Bluegreen considers not to be indicative of its future operations or performance. Further, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. In addition, Bluegreen’s definition of Adjusted EBITDA may not be comparable to definitions of Adjusted EBITDA or other similarly titled measures used by other companies.

5137

Results of Operations

Information regarding the results of operations for Bluegreen, ~~for the three and nine months ended September 30, 2018 and 2017,~~ including a reconciliation of net income to EBITDA and Adjusted EBITDA, is set forth below (dollars in thousands):


1

		For the Three Months Ended September 30,						For the Three Months Ended September 30,
		2018			2017			2019			2018
		Amount	% of System-wide sales of VOIs (5)		Amount	% of System-wide sales of VOIs (5)		Amount	% of System-wide sales of VOIs (5)		Amount	% of System-wide sales of VOIs (5)
Developed VOI sales (1)	$	90,596	52%	$	77,907	45%	$	87,863	52%	$	90,596	52%
Secondary market sales		54,300	31%		38,732	24%		72,081	42%		54,300	31%
Fee-based sales		88,155	51%		97,963	57%		87,646	51%		88,155	51%
JIT sales		13,591	8%		14,306	8%		4,505	3%		13,591	8%
Less: Equity trade allowances (6)		(73,336)	-42%		(57,543)	-34%		(81,720)	-48%		(73,336)	-42%
System-wide sales of VOIs		173,306	100%		171,365	100%		170,375	100%		173,306	100%
Less: Fee-based sales		(88,155)	-51%		(97,963)	-57%		(87,646)	-51%		(88,155)	-51%
Gross sales of VOIs		85,151	49%		73,402	43%		82,729	49%		85,151	49%
Provision for loan losses (2)		(14,453)	-17%		(10,949)	-15%		(16,411)	-20%		(14,453)	-17%
Sales of VOIs		70,698	41%		62,453	36%		66,318	39%		70,698	41%
Cost of VOIs sold (3)		(11,237)	-16%		(6,444)	-10%		(3,121)	-5%		(11,237)	-16%
Gross profit (3)		59,461	84%		56,009	90%		63,197	95%		59,461	84%
Fee-based sales commissions (4)		61,641	70%		69,977	71%		60,478	69%		61,641	70%
Financing revenue, net of
financing expense		12,323	7%		13,238	8%		11,693	7%		12,323	7%
Other fee-based services		47,957	28%		41,483	24%		54,855	32%		47,957	28%
Cost of other fee-based services		(33,929)	-20%		(30,442)	-18%		(38,979)	-23%		(33,929)	-20%
Net carrying cost of VOI inventory		(2,908)	-2%		(837)	0%		(5,878)	-3%		(2,908)	-2%
Selling and marketing expenses		(84,955)	-49%		(88,116)	-51%		(87,358)	-51%		(84,955)	-49%
General and administrative expenses		(27,452)	-16%		(26,818)	-16%		(29,801)	-17%		(27,452)	-16%
Operating profit		32,138	19%		34,494	20%		28,207	17%		32,138	19%
Other income		378			(119)			2,146			378
Provision for income taxes		(8,443)			(12,584)			(7,778)			(8,443)
Net income	$	24,073		$	21,791		$	22,575		$	24,073

Adjustments for EBITDA:
Provision for income taxes		8,443			12,584			7,778			8,443
Income before taxes		32,516			34,375			30,353			32,516
Depreciation and amortization		3,169			2,420			3,585			3,169
Franchise taxes		56			72			112			56
Interest expense (other than interest
incurred on debt that is secured by
VOI notes receivable)		4,207			3,544			5,326			4,207
Interest income (other than interest
earned on VOI notes receivable)		(1,407)			(1,292)			(1,799)			(1,407)
EBITDA		38,541			39,119			37,577			38,541
Adjustments for Adjusted EBITDA:
Corporate realignment costs		-			3,216
Loss on assets held for sale		18			4
(Gain) loss on assets held for sale								(166)			18
EBITDA attributable to
noncontrolling interest in
Bluegreen/Big Cedar Vacations		(3,637)			(3,209)			(2,364)			(3,637)
Severance								1,924			-
Adjusted EBITDA	$	34,922		$	39,130		$	36,971		$	34,922



		For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
		2018			2017			2019			2018
		Amount	% of System-wide sales of VOIs (5)		Amount	% of System-wide sales of VOIs (5)		Amount	% of System-wide sales of VOIs (5)		Amount	% of System-wide sales of VOIs (5)
Developed VOI sales (1)	$	218,842	46%	$	216,451	46%	$	255,288	55%	$	218,842	46%
Secondary market sales		185,847	38%		117,711	26%		184,571	40%		185,847	38%
Fee-based sales		246,773	52%		257,756	55%		237,793	51%		246,773	52%
JIT sales		32,274	7%		37,374	8%		9,157	2%		32,274	7%
Less: Equity trade allowances (6)		(205,625)	-43%		(161,951)	-35%
Less: Equity trade allowances (6)								(223,182)	-48%		(205,625)	-43%
System-wide sales of VOIs		478,111	100%		467,341	100%		463,627	100%		478,111	100%
Less: Fee-based sales		(246,773)	-52%		(257,756)	-55%		(237,793)	-51%		(246,773)	-52%
Gross sales of VOIs		231,338	48%		209,585	45%		225,834	49%		231,338	48%
Provision for loan losses (2)		(35,926)	-16%		(33,491)	-16%		(39,483)	-17%		(35,926)	-16%
Sales of VOIs		195,412	41%		176,094	38%		186,351	40%		195,412	41%
Cost of VOIs sold (3)		(19,838)	-10%		(11,352)	-6%		(17,541)	-9%		(19,838)	-10%
Gross profit (3)		175,574	90%		164,742	94%		168,810	91%		175,574	90%
Fee-based sales commissions (4)		167,581	68%		179,046	69%		161,033	68%		167,581	68%
Financing revenue, net of
financing expense		38,301	8%		41,894	9%		36,009	8%		38,301	8%
Other fee-based services		136,629	29%		124,102	27%		152,720	33%		136,629	29%
Cost of other fee-based services		(94,065)	-20%		(86,104)	-18%		(106,390)	-23%		(94,065)	-20%
Net carrying cost of VOI inventory		(7,075)	-1%		(3,219)	-1%		(18,853)	-4%		(7,075)	-1%
Selling and marketing expenses		(233,961)	-49%		(242,040)	-52%		(235,580)	-51%		(233,961)	-49%
General and administrative expenses		(81,574)	-17%		(70,217)	-15%		(119,461)	-26%		(81,574)	-17%
Operating profit		101,410	21%		108,204	23%		38,288	8%		101,410	21%
Other income		1,269			(120)			4,228			1,269
Provision for income taxes		(24,997)			(38,487)			(9,124)			(24,997)
Net income	$	77,682		$	69,597		$	33,392		$	77,682

Adjustments for EBITDA:
Provision for income taxes		24,997			38,487			9,124			24,997
Income before taxes		102,679			108,084			42,516			102,679
Depreciation and amortization		9,087			7,089			10,453			9,087
Franchise taxes		180			127			171			180
Interest expense (other than interest
incurred on debt that is secured by
VOI notes receivable)		11,136			10,415			14,564			11,136
Interest income (other than interest
earned on VOI notes receivable)		(4,222)			(5,487)			(5,437)			(4,222)
EBITDA		118,860			120,228			62,267			118,860
Adjustments for Adjusted EBITDA:
Corporate realignment costs		751			3,679
(Gain) loss on assets held for sale		9			44			(2,146)			9
EBITDA attributable to
noncontrolling interest in
Bluegreen/Big Cedar Vacations		(9,521)			(9,183)			(9,339)			(9,521)
Severance								1,924			751
Bass Pro Settlement								39,121			-
Adjusted EBITDA	$	110,099		$	114,768		$	91,827		$	110,099

Sales of ~~VOIs~~VOIs. . Sales of VOIs were $66.3 million and $186.4 million during the three and nine months ended September 30, 2019, respectively, and $70.7 million and $195.4 million during the three and nine months ended September 30, 2018, ~~respectively, and $62.5 million and $176.1 million during the three and nine months ended September 30, 2017,~~ respectively. Sales of VOIs are impacted by the factors described below in system-wide sales of VOIs. Gross sales of VOIs were reduced by $16.4 million and $39.5 million during the three and nine months ended September 30, 2019, respectively, and $14.5 million and $35.9 million during the three and nine months ended September 30, ~~2018, respectively, and $10.9 million and $33.5 million during the three and nine months ended September 30, 2017,~~2019, respectively, for the provision for loan losses. The provision for loan losses varies based on the amount of financed, non-fee based sales during the period and changes in ~~Bluegreen’s~~ estimates of future notes receivable performance for existing loans. Bluegreen’s provision for loan losses as a percentage of gross sales of VOIs was ~~17%~~20% and ~~16%~~17% during the three and nine months ended September 30, ~~2018,~~2019, respectively, and ~~15%~~17% and 16% for the three and nine months ended September 30, ~~2017,~~2018, respectively. The percentage of ~~Bluegreen’s~~ sales which were realized in cash within 30 days from sale ~~decreased~~was approximately 40% and 42% during the three and nine months ended September 30, 2019, respectively, compared to 39% and 41% during the three and nine months ended September 30, 2018, ~~from 41% during the three months ended September 30, 2017 and decreased to 41% during the nine month ended September 30, 2018 from 43% during the nine months ended September 30, 2017.~~respectively. The ~~increase~~increases in the provision for loan ~~loss for the three months ended September 30, 2018 is~~losses were primarily due to ~~lower cash sales and the impact of additional reserves on prior years’ originations offset by the impact of~~ an increase in ~~Bluegreen’s weighted-average FICO score in 2018 compared to prior years. Bluegreen has in recent years experienced an increase in its~~average annual default ~~rates.~~rates, which Bluegreen believes ~~that a significant portion of the increase~~is due in ~~default rates in recent years is due~~large part to the receipt of letters from attorneys ~~and timeshare exit companies~~ who purport to represent certain VOI owners and ~~who~~ have encouraged such owners to become delinquent and ultimately default on their obligations. Defaults associated with such letters in the third quarter of 2019 were up 61% compared to the third quarter of 2018 and up 26% compared to the second quarter of 2019. The increase in such defaults were primarily driven by higher attorney default activity for Bluegreen’s resorts and owners located in Missouri, where Bluegreen believes certain attorneys are currently targeting its customers. See Note 11 ~~– Commitments and Contingencies~~ to the Company’s condensed consolidated financial statements included in Item 1 of this report for additional information regarding such letters and actions taken by Bluegreen in connection ~~with these letters.~~therewith. While Bluegreen believes its notes receivable are adequately reserved at this time, actual defaults may differ from the estimates, and the reserve may not be adequate. In addition to the factors described below impacting system-wide sales of VOIs, sales of VOIs are impacted by the proportion of system-wide sales of VOIs sold on behalf of third parties on a commission basis, which are not included in sales of VOIs.

The average default rates and delinquency rates (more than 30 days past due) on Bluegreen’s VOI notes receivable were as follows:

System-wide sales of VOIs. System-wide sales of VOIs were $170.4 million and $463.6 million during the three and nine months ended September 30, 2019, respectively, and $173.3 million and $478.1 million during the three and nine months ended September 30, ~~2018, respectively, and $171.4 million and $467.3 million during the three and nine months ended September 30, 2017,~~2019, respectively. Bluegreen estimates that system-wide sales of VOIs were adversely impacted by approximately ~~$5.8~~$6.0 million and ~~$6.2~~$5.8 million as a result of named hurricanes in September ~~2018~~2019 and ~~2017,~~2018, respectively. System-wide VOI sales ~~increased~~decreased during the three and nine months ended September 30, ~~2018~~2019 compared to ~~the comparable~~same 2018 periods ~~in 2017~~ due to ~~an increase in the VPG, partially offset by~~ a decrease in VPG and the number of guest tours. ~~During 2017, Bluegreen began several initiatives to screen the credit qualifications of potential marketing guests, resulting in a higher VPG and a lower number of tours.~~In addition, Bluegreen believes ~~its screening~~that the decrease in system-wide VOI sales for the nine months ended September 30, 2019 was due in part to disruptions in staffing and operations at certain of ~~marketing guests~~Bluegreen’s sales offices related to the issues with Bass Pro which were resolved when the parties entered into a settlement agreement in June 2019. See Note 11 to the Company’s condensed consolidated financial statements included in Item 1 of this report for additional information regarding the Bass Pro settlement.

~~has resulted in improved efficiencies in its sales process; however, there is no assurance that such efficiencies will continue.~~

Included in system-wide sales are Fee-Based Sales, JIT Sales, Secondary Market Sales, and developed VOI sales. Sales by category are tracked based on which deeded VOI is conveyed in each transaction. Bluegreen manages which VOIs are sold based on several factors, including the needs of fee-based clients, Bluegreen’s debt service requirements, and default resale requirements under term ~~securitization~~securitizations and similar transactions. These factors contribute to fluctuations in the amount of sales by category from period to period.

The following table sets forth certain information ~~for~~related to Bluegreen’s system-wide sales of ~~VOIs for the three and nine months ended September 30, 2018 and 2017:~~VOIs:

Cost of VOIs Sold. During the three months ended September 30, ~~2018~~2019 and ~~2017,~~2018, cost of VOIs sold was ~~$11.2~~$3.1 million and ~~$6.4~~$11.2 million, respectively, and represented ~~16%~~5% and ~~10%~~16%, respectively, of sales of VOIs. During the nine months ended September 30, ~~2018~~2019 and ~~2017,~~2018, cost of VOIs sold was ~~$19.8~~$17.5 million and ~~$11.4~~$19.8 million, respectively, and represented ~~10%~~9% and 6%10%, respectively, of sales of VOIs. During the three months ended September 30, 2018, Bluegreen’s VOI sales were of comparatively higher cost product, and Bluegreen acquired less secondary market VOI inventory as compared to the three months ended September 30, 2017. Secondary market purchases were temporarily suspended in September 2018, in connection with a computer system conversion involving its sales and inventory process. Cost of VOIs sold as a percentage of sales of VOIs varies between periods based on the relative costs of the specific VOIs sold in each period and the size of the point packages of the VOIs sold or acquired (due to offered volume discounts, including consideration of cumulative sales to existing owners). Additionally, the effect of changes in estimates under the relative sales value method, including estimates of project sales, future defaults, upgrades, and incremental revenue from the resale of repossessed VOI inventory, are reflected on a retrospective basis in the period the change occurs. Therefore, cost of sales will typically be favorably impacted in periods ~~where~~in which a significant amount of Secondary Market VOI inventory is acquired or actual defaults and equity trades are higher than ~~originally estimated~~anticipated and the resulting change in estimate is recognized. During the ~~second quarter of 2017,~~2019 periods, Bluegreen implemented a revised VOI pricing matrix. These changes increased the average selling price of VOIs by approximately 4%. As a result of this pricing change, Bluegreen also increased its estimate of total gross margin that will be generated on the sale of itsacquired more Secondary Market VOI inventory ~~under~~compared to the ~~relative~~2018 periods due to a temporary suspension of Secondary Market VOI inventory purchases in September 2018 in connection with a computer system conversion involving Bluegreen’s sales ~~value method. Accordingly,~~and inventory process. In addition, during the ~~second quarter of 2017, Bluegreen recognized a benefit to cost of VOI sold of $5.1 million with no comparable price increase and~~2019 periods, Bluegreen’s cost of sales ~~benefit~~benefited from sales of relatively lower cost VOIs as compared to the 2018 periods in ~~2018.~~which relatively higher cost VOIs were sold.

Fee-Based Sales ~~Commissions.~~Commission Revenue. During the three months ended September 30, ~~2018~~2019 and ~~2017,~~2018, Bluegreen sold ~~$88.2~~$87.6 million and ~~$98.0~~$88.2 million, respectively, of third-party VOI inventory under commission arrangements and earned sales and marketing commissions of ~~$61.6~~$60.5 million and ~~$70.0~~$61.6 million, respectively, in connection with those sales. During the nine months ended September 30, ~~2018~~2019 and ~~2017,~~2018, Bluegreen sold ~~$246.8~~$237.8 million and ~~$257.8~~$246.8 million, respectively, of third-party VOI inventory under commission arrangements and earned sales and marketing commissions of ~~$167.6~~$161.0 million and ~~$179.0~~$167.6 million, respectively, in connection with those sales. The decreases in sales of third-party developer inventory on a commission basis during the 2019 periods were due primarily to the factors described above relating to the decrease in system-wide sales of VOIs. Bluegreen earned an average sales and marketing commission of 69% and 68% during the three and nine months ended September 30, 2019, respectively, and 70% and 68% during the three and nine months ended September 30, 2018, ~~respectively, compared to 71% and 69% during the three and nine months ended September 30, 2017,~~

respectively, which is net of a reserve for commission refunds in connection with early defaults and cancellations, pursuant to the terms of certain of ~~its~~Bluegreen’s fee-based service arrangements. The decrease in sales and marketing commissions as a percentage of fee-based sales for the three ~~and nine~~months ended September 30, 2019 as compared to the three months ended September 30, 2018 is primarily related to the mix of developer sales at higher commission rates in the ~~2017 periods,~~2018 period as well as higher ~~commission~~reserves for early tenured defaults in the 2019 period, which Bluegreen refunds ~~associated with defaults and cancellations.~~to third-party developers in certain circumstances.

Financing Revenue, Net of Financing Expense. During the three and nine months ended September 30, ~~2018 and 2017,~~2019, financing revenue, net of financing expense was $11.7 million and $36.0 million, respectively, compared to $12.3 million and ~~$13.2~~$38.3 million ~~respectively, and~~ during the ~~nine months ended September 30,~~respective comparable 2018 ~~and 2017, was $38.3 million and $41.9 million, respectively.~~periods. The decrease ~~in finance revenue, net of finance expense~~ is primarily attributable to a ~~result of Bluegreen’s~~ higher weighted average cost of borrowing and ~~lower weighted average interest rates on VOI notes receivable,~~higher outstanding debt balances during the 2019 periods as compared to the 2018 periods. Additionally, in September 2019, Bluegreen paid off its 2013 Notes Payable and, in connection with ~~the introduction~~this repayment, wrote off unamortized debt issuance costs of ~~“risk-based pricing” pursuant~~$0.4 million which contributed to ~~which buyer’s interest rates are determined based on their FICO score at~~ the ~~point of sale, partially offset by an~~ increase in ~~Bluegreen’s VOI notes receivable portfolio.~~ interest expense in the 2019 periods.

Other Fee-Based Services. During the three and nine months ended September 30, ~~2018 and 2017,~~2019, revenue from Bluegreen’s resort operations, club management, and title operations was $54.9 million and $152.7 million, respectively, compared to $48.0 million and ~~$41.5~~$136.6 million, respectively ~~which was~~during the comparable 2018 periods. These other fee-based services revenues were partially offset by expenses directly related to these operations of ~~$33.9~~$39.0 million and ~~$30.4~~$106.4 million, ~~respectively. During~~for the three and nine months ended September 30, ~~2018~~2019, respectively, and ~~2017, revenue from Bluegreen’s resort operations, club management and title operations was $136.6~~$33.9 million and ~~$124.1 million, respectively, which was partially offset by expenses directly related to these operations of~~ $94.1 million ~~and $86.1 million,~~for the comparable 2018 periods, respectively.

Other fee-based services revenue increased ~~15.6%~~14% and ~~10.1%~~12% during the three and nine months ended September 30, ~~2018~~2019, respectively, as compared to the same periods in ~~2017.~~2018. ~~Bluegreen provides~~Cost reimbursement revenue, which primarily consists of payroll and payroll related costs for management ~~services to the Vacation Club and to a majority~~ of the HOAs ~~of the resorts within the Vacation Club. In connection with its management~~and other services Bluegreen ~~also manages~~provides where Bluegreen is the ~~Vacation Club reservation system, provides services to owners~~employer, increased 25% during both the three and ~~performs billing and collection services~~nine months ended September 30, 2019 as compared to the ~~Vacation Club~~comparable 2018 periods. Net of cost reimbursement revenue, resort operations and ~~certain HOAs. Additionally, Bluegreen generates~~club management revenues ~~from its Traveler Plus program, food~~increased 7% and ~~beverage operations at~~5% for the ~~resorts,~~three and other retail operations. Bluegreen also earns commissions from providing rental services to third parties and fees from managing the construction activities of certain of its fee based third-party developer clients. The resort properties Bluegreen manages increased from 48 as ofnine months ended September 30, ~~2017~~2019 as compared to ~~49 as of September 30,~~the comparable 2018 ~~due to a new resort under management in New Orleans, Louisiana.~~periods. Resort operations and club management revenues increased during the ~~2018~~2019 periods compared to the ~~2017~~2018 periods primarily as a result of ~~such increase~~the receipt of management fees for the full periods in ~~the number of~~2019 related to managed resorts added during 2018 and ~~the food~~higher third-party rental commissions. Bluegreen managed 49 resort properties as of both September 30, 2019 and ~~beverage and other operations at the~~ ~~Éilan~~ ~~Hotel & Spa, which Bluegreen acquired in April~~September 30, 2018.

~~During~~Cost of other fee-based services increased 15% and 13% during the three and nine months ended September 30, ~~2018, cost of other fee-based services increased 11.5% and 9.3%~~2019, respectively, as compared to the ~~three and nine months ended September 30, 2017.~~same periods in 2018. This increase iswas primarily due to increased cost reimbursement expense and the ~~higher costs associated with programs provided to VOI owners, the increased costs of providing management services as a result~~timing of the ~~increase in the number of~~new managed resorts ~~and the operating costs of the~~ ~~Éilan~~ ~~Hotel & Spa.~~described above.

Net Carrying Cost of VOI Inventory.The carrying cost of Bluegreen’s VOI inventory was ~~$7.2~~$9.2 million and ~~$4.1~~$7.2 million during the three months ended September 30, ~~2018~~2019 and ~~2017,~~2018, respectively, which was ~~partly~~partially offset by rental and sampler revenues of ~~$4.3~~$3.3 million and ~~$3.3~~$4.3 million, respectively. The carrying cost of Bluegreen’s inventory was ~~$20.1~~$26.7 million and ~~$12.5~~$20.1 million during the nine months ended September 30, ~~2018~~2019 and ~~2017,~~2018, respectively, which was ~~partly~~partially offset by rental and sampler revenues of ~~$13.0~~$7.8 million and ~~$9.3~~$13.0 million, respectively. The increase in net carrying costs of VOI inventory was primarily related to Bluegreen’s acquisition of the Éilan Hotel and Spa during April 2018, increased maintenance fees and developer subsidies associated with the increase in VOI inventory, decreased rentals of developer inventory, and decreased net operating profits from Bluegreen’s sampler program.

Selling and Marketing Expenses. Selling and marketing expenses were $87.4 million and $235.6 million during the three and nine months ended September 30, ~~2018 is primarily due to Bluegreen’s acquisition of the Éilan Hotel & Spa during April 2018, which added $1.6 million~~2019, respectively, and ~~$2.9 million, respectively, to the carrying costs of Bluegreen’s VOI inventory, and increased maintenance fees and developer subsidies associated with its increase in VOI inventory.~~

~~Selling and Marketing Expenses.~~ ~~Selling and marketing expenses were~~ $85.0 million and ~~$88.1~~$234.0 million during the three ~~months ended September 30, 2018~~ and ~~2017, respectively, and $234.0 million and $242.0 million during the~~ nine months ended September 30, 2018, ~~and 2017,~~ respectively. As a percentage of system-wide sales of VOIs, selling and marketing expenses ~~decreased~~increased to ~~49%~~51% during both the three and nine months ended September 30, ~~2018~~2019 from ~~51% and 52%~~49% during both the three and ~~nine~~six months ended September 30, ~~2017,~~2018, respectively. ~~Selling~~The increase in selling and marketing expenses ~~vary~~as a percentage of system-wide sales of VOIs is primarily attributable to higher costs per guest tour and lower VPG.

Bluegreen’s agreement with Bass Pro previously provided for the payment of a variable commission upon the sale of a VOI to a marketing prospect obtained through the Bass Pro marketing channels. As discussed herein, pursuant to the settlement agreement and amended marketing arrangement with Bass Pro, the settlement payments and a portion of the ongoing annual marketing fees are fixed costs and/or are subject to annual minimums regardless of the volume of VOI sales produced from the resulting marketing prospects generated from the amended agreement. If Bluegreen’s amended agreement with Bass Pro does not generate a sufficient number of prospects and leads or is terminated or limited, Bluegreen may not be able to successfully market and sell its products and services at current sales levels, at anticipated levels, or at levels required in order to offset the costs associated with its marketing efforts. In addition, the amended arrangement with Bass Pro is expected to result in an annual 9% increase in Bluegreen’s marketing expenses as a percentage of sales from ~~period to period~~the program based ~~in part~~ on the ~~relative proportion of~~increase in fixed costs associated with the program and anticipated VOI sales volumes from this marketing ~~methods utilized during such periods, most notably~~channel. Should Bluegreen’s VOI sales volumes be below expectations, the percentage of sales to Bluegreen’s existing owners, which has a relatively lower cost compared to other methods. Existing owner sales increased to 51% of system-wide sales during both the three and nine months ended September 30, 2018 from 48% during the three months ended September 30, 2017 and 49% during the nine months ended September 30, 2017. In addition, Bluegreen’s corporate realignment initiative commenced during the fourth quarter of 2017, as described in further detailincrease in the ~~Company’s 2017 Annual~~costs of this marketing program would be higher than expected, and Bluegreen’s results of operations and cash flows would be adversely impacted.

~~Report, reduced certain selling and marketing expenses. See also “Commitments” below for additional information regarding Bluegreen’s corporate realignment initiative.~~

General and Administrative Expenses. General and administrative expenses were ~~$27.5~~$29.8 million and ~~$26.8~~$119.5 million during the three ~~months ended September 30, 2018~~ and ~~2017, respectively, and $81.6 million and $70.2 million during the~~ nine months ended September 30, ~~2018~~2019, respectively, and ~~2017,~~$27.5 million and $81.6 million during the three and nine months ended September 30, 2018, respectively. As a percentage of system-wide sales of VOIs, general and administrative expenses were ~~16%~~17% and 26% during ~~both~~ the three ~~months ended September 30, 2018~~ and ~~2017, respectively, and 17% and 15% during the~~ nine months ended September 30, ~~2018~~2019 and ~~2017, respectively. The increase in~~16% and 17% for the three and nine months ended September 30, 2018, ~~as compared~~respectively. General and administrative expenses for the nine months ended September 30, 2019 include a charge of $39.1 million related to the ~~comparable prior year periods~~settlement of the dispute with Bass Pro in June 2019. See Note 11 to the Company’s condensed consolidated financial statements included in Item 1 of this report for additional information regarding the Bass Pro settlement. In addition, during the three and nine months ended September 30, 2019, Bluegreen accrued severance and transition expenses of $1.9 million pursuant to agreements entered into with certain executives and members of management during 2019.

Other Income. Other income was ~~primarily due to higher executive leadership~~$2.1 million and ~~long-term incentive compensation expense, higher outside legal expenses~~$4.2 million during the three and nine months ended September 30, 2019, respectively, and $0.4 million and $1.3 million during the three and nine months ended September 30, 2018, respectively. These increases in ~~connection with a new focus on defending litigation which Bluegreen believes to be frivolous, higher self-insured health care costs, depreciation expense, executive severance expense, including those~~other income, net were primarily related to ~~corporate realignment activities commencing~~a land sale during June 2019, which resulted in ~~December 2017,~~a gain of $2.0 million, and ~~expenses~~the receipt of $1.7 million in business interruption insurance proceeds in July 2019 related to ~~investor and public relations associated with being~~ a ~~public company.~~named hurricane in 2017.

BBX Capital Real ~~Estate’s primary activities include~~Estate (or BBXRE) is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ~~ventures. BBX Capital Real Estate~~ventures, including investments in multifamily apartment and townhome communities, single-family master-planned communities, and commercial properties located primarily in Florida. In addition, BBXRE owns a 50% equity interest in the Altman Companies, a developer and manager of multifamily apartment communities.

BBXRE also manages the legacy assets acquired in connection with the Company’s sale of BankAtlantic in ~~July 2012. The legacy assets include~~2012, including portfolios of loans receivable and real estate ~~properties, and loans previously charged-off by BankAtlantic.~~properties.

During the nine months ended September 30, ~~2018, BBX Capital Real Estate invested in two real estate joint ventures to potentially develop multifamily apartment communities in Miami and Odessa, Florida and~~2019, BBXRE continued its development of the Beacon Lake Community in St. Johns County, Florida ~~with~~and sold to homebuilders the ~~closing of 205~~remaining 51 developed lots ~~to homebuilders.~~in Phase I of the project, which is comprised of 302 lots. In addition, BBXRE is currently developing the ~~projects associated with its unconsolidated~~lots comprising Phase II of the project, which is expected to include approximately 400 single-family homes and 196 townhomes, and 79 lots for single-family homes as part of a future phase of the project. BBXRE anticipates that sales of Phase II lots to homebuilders will commence during the first quarter of 2020.

In 2018, BBXRE acquired a 50% membership interest in the Altman Companies, a joint venture between the Company and Joel Altman (“JA”) engaged in the development, construction, and management of multifamily apartment communities. As of September 30, 2019, BBXRE had investments in nine active developments sponsored by the Altman Companies, comprised of three developments that are stabilized or being leased and expected to be sold over the next two years, four developments that are under construction, and two projects that are currently in predevelopment stages.

During the nine months ended September 30, 2019, BBXRE monetized certain of its investments in real estate joint ventures that were sponsored by the Altman Companies, including the following:

BBXRE also continued to ~~progress, including~~invest in new real estate joint ventures sponsored by the ~~sale of commercial buildings~~Altman Companies, which are summarized below:

During the nine months ended September 30, 2019, the PGA Design Center joint venture sold its remaining commercial buildings located in Palm Beach Gardens, Florida and ~~BBX/S Millenia Blvd~~provided seller financing to the buyer for a portion of the sales price. As a result of the sale, BBXRE recognized $2.8 million of equity earnings and received approximately $2.3 million of distributions from the venture.

In addition, BBXRE invested in two new real estate joint ventures, ~~during~~including The Main Las Olas joint venture, which was formed to invest in the development of The Main Las Olas, a mixed-used project in downtown Fort Lauderdale, Florida that is planned to be comprised of an office tower with approximately 365,000 square feet of leasable area, a residential tower with approximately 341 units, and approximately 45,000 square feet of ground floor retail, and the Sky Cove joint venture, which was formed to develop, construct, and sell 204 single-family homes in Westlake Florida. BBXRE has invested $1.9 million in The Main Las Olas joint venture and $4.2 million in the Sky Cove joint venture and expects to invest an additional $2.1 million in The Main Las Olas joint venture as the development progresses.

During the nine ~~month period~~months ended September 30, 2019, BBXRE sold other various real estate assets within its portfolio, including RoboVault, a self-storage facility located in Fort Lauderdale, Florida, its remaining land parcels located at PGA Station in Palm Beach Gardens, Florida, and land parcels located in St. Cloud, Florida and Leesburg, Florida. As a result of these sales, BBXRE recognized total net gains on sales of real estate of $11.4 million and received aggregate net proceeds of $32.1 million. In connection with the sale of ~~a multifamily apartment complex~~its remaining land parcels at PGA Station, which were sold to the buyer of the commercial buildings sold by the ~~Addison on Millenia~~PGA Design Center joint venture, as described above, BBXRE reinvested $2.1 million of the proceeds in ~~October 2018.~~ the PGA Lender joint venture, a joint venture formed with the PGA Design Center joint venture to invest in the seller financing provided to the buyer by the PGA Design Center joint venture.

While revenues and recoveries from loan losses associated with the legacy asset portfolio have generally been decreasing as a result of an overall decline in the outstanding balance of the portfolio, BBX Capital Real Estate generated significant activity in the portfolio during the first half of 2018, including the repayment and settlement of commercial nonaccrual loans and the sale of a student housing complex previously acquired through foreclosure.

In October 2018, BBX Capital Real Estate entered into an agreement pursuant to which it has agreed, subject to the satisfaction or waiver of the conditions to closing, to acquire a fifty percent (50%) membership interest in The Altman Companies, LLC (“Altman Companies”), a real estate development company which operates a fully integrated multifamily platform covering all aspects of the development process and includes membership interests in Altman Development Company, Altman-Glenewinkel Construction, and Altman Management Company, for a purchase price of $11.8 million. Simultaneously with this investment, BBX Capital Real Estate has agreed to acquire interests in the managing member of eight multifamily real estate developments affiliated with Altman Companies (the “Developments”) for an aggregate purchase price of $10.9 million, subject to adjustment based on the terms of the agreement. BBX Capital Real Estate has also agreed, subject to various terms and conditions, to acquire an additional forty percent (40%) of the membership interests in Altman Companies for a purchase price of $9.4 million in approximately four years after the closing of the initial purchase. The seller, Joel Altman, can also, at his option, or in other predefined circumstances, require BBX Capital Real Estate to acquire the remaining ten percent (10%) interest in Altman Companies for $2.4 million.

BBX Capital Real Estate expects that Altman Companies will continue to operate primarily as a real estate developer with Joel Altman serving as its Chief Executive Officer. It is anticipated that, if the transaction is consummated, BBX

~~Capital Real Estate and Joel Altman will invest in future projects based on their relative ownership percentages in Altman Companies going forward.~~

~~BBX Capital Real Estate remains focused on identifying additional investment opportunities and expanding its development pipeline.~~

Information regarding the results of operations for ~~BBX Capital Real Estate for the three and nine months ended September 30, 2018 and 2017~~BBXRE is set forth below (dollars in thousands):

BBX Capital Real Estate’s income before income taxes for the three months ended September 30, ~~2018~~2019 compared to the same ~~2017~~2018 period increased by ~~$0.5~~$27.2 million primarily due to the following:

BBX Capital Real Estate’s income before income taxes for the nine months ended September 30, 2019 compared to the same 2018 period increased by $35.0 million primarily due to the following:

~~BBX Capital Real Estate’s income before taxes for the nine months ended September 30, 2018 compared to the same 2017 period increased by $3.8 million primarily due to the following:~~

Renin is engaged in the design, manufacture, and distribution of ~~specialty~~sliding doors, door systems and hardware, and home décor products ~~in the United States and Canada~~ and operates through its headquarters in Canada and two manufacturing and distribution facilities in the United States and Canada. In addition to its own manufacturing, Renin also sources various products and raw materials from China. Renin’s products are sold through three channels in North America: retail, commercial, and direct installation in the greater Toronto area.

During ~~2018,~~2019, Renin ~~has~~ continued to experience a shift in its customer mix ~~toward~~towards retail customers, including big box retailers, while its barn door ~~product has increased~~products have continued to increase as a percentage of its overall product mix. In particular, during the nine months ended September 30, ~~2018,~~2019, retail, commercial, and direct installation trade sales as a percentage of total gross trade sales were ~~57%~~64%, ~~32%~~26%, and ~~11%~~10%, respectively, as compared to ~~49%~~58%, ~~37%,~~32% and ~~14%~~10% during the ~~same 2017 period, which primarily~~comparable 2018 period. This shift reflects the addition of Costco as a retail customer of barn doors, the expansion of Renin’s sales program with Lowe’s to include additional stores, and a decrease in commercial ~~and direct installation trade~~sales. As a result, Renin’s sales ~~and an increase in sales to e-commerce retail customers. During the nine months ended September 30, 2018, Renin’s~~of barn door ~~sales~~products as a percentage of total gross sales increased to ~~30% from 19%~~34% during the same 2017 period, which reflects an overall increase in barn door sales and a decrease in sales across various other product types, including closet doors and hardware and direct installation sales.

~~Although they did not have a significant impact on Renin’s results of operations for~~ the nine months ended September 30, 2019 from 29% during the same 2018 ~~tariffs on goods imported from Canada and China could have a material impact on Renin’s operations. However, the ultimate impact of such tariffs is uncertain at this time.~~period.

Information regarding the results of operations for Renin ~~for the three and nine months ended September 30, 2018 and 2017~~ is set forth below (dollars in thousands):

Renin’s income before income taxes for the three months ended September 30, ~~2018~~2019 was $0.5 million compared to $0.7 million during the same ~~2017 period increased by $0.6 million~~2018 period. The decrease was primarily due to the following:

Renin’s income before income taxes for the nine months ended September 30, ~~2018~~2019 was $1.6 million compared to $0.7 million during the same ~~2017 period decreased by $0.4 million~~2018 period. The increase was primarily due to an increase in trade sales and gross margin, partially offset by an increase in selling, general and administrative expenses, primarily related to the ~~following:~~factors described above related to the three months ended September 30, 2019 and 2018.

~~BBX Sweet Holdings~~IT’SUGAR is ~~engaged in the acquisition and management of businesses in the confectionery industry, including manufacturers, wholesalers, and retailers of chocolate, hard candy, and confectionery products.~~

~~In June 2017, BBX Sweet Holdings acquired IT’SUGAR,~~ a specialty candy retailer which ~~currently has over 90~~operates approximately 100 retail locations in 26over 25 states and Washington, ~~DC. IT’SUGAR’s~~D.C. Its products include bulk candy, candy in giant ~~candy~~ packaging, and novelty items that are sold at its retail locations, which include a mix of high-traffic resort and entertainment, lifestyle, mall/outlet, and urban ~~locations. During 2018, IT’SUGAR opened three new retail stores and plans to open a fourth by~~locations across the ~~end of 2018.~~United States.

During 2018, BBX Sweet Holdings exited its manufacturing facility in Utah and reduced the headcount at its corporate office, which resulted in the recognition of various costs, including severance costs for certain employees, lease obligations, and impairments of property and equipment.

In addition, the Company is continuing to evaluate the remaining operations of BBX Sweet Holdings’ wholesale business. To the extent that the Company decides to divest of or otherwise exit these wholesale operations, BBX Sweet Holdings may recognize additional impairment charges and incur additional costs in 2018 or in future periods. As of September 30, 2018, the net book value of the operations under evaluation was $8.6 million, and the total estimated future minimum rental payments for operating leases was $0.6 million.

During 2019, IT’SUGAR continued to invest capital in several new retail locations, including Grand Bazaar, a 6,000 square foot flagship location in Las Vegas, Nevada that was opened in June 2019, and a new retail location in Orlando, Florida that was opened in March 2019. In addition, IT’SUGAR expects to open a 21,000 square foot, three story flagship location at American Dream, a 3 million square foot shopping and entertainment complex in New Jersey, during the fourth quarter of 2019. IT’SUGAR is also continuing to evaluate the lease agreements for its current retail locations where sales volumes may give rise to early lease termination rights and the potential opportunity to renegotiate lease terms and occupancy costs.

IT’SUGAR’s results of operations are subject to seasonal fluctuations, and the third quarter has historically been its most profitable quarter. It is anticipated that IT’SUGAR will incur a loss before income taxes for the year ended December 31, 2019 due primarily to the expected costs of opening new stores and the related depreciation expense. However, IT’SUGAR generated positive cash flows from operations during the nine months ended September 30, 2019 and is expected to continue to do so for the remainder of 2019.

Information regarding the results of operations for ~~BBX Sweet Holdings for the three and nine months ended September 30, 2018 and 2017~~IT’SUGAR is set forth below (dollars in thousands):

~~BBX Sweet Holdings’~~IT’SUGAR’s income ~~(loss)~~ before income taxes for the three months ended September 30, ~~2018~~2019 was $1.2 million compared to $1.6 million during the same ~~2017~~2018 period, ~~improved by $1.3 million primarily due to~~which reflects the following:

~~BBX Sweet Holdings’~~IT’SUGAR’s loss before income taxes for the nine months ended September 30, ~~2018~~2019 compared to the same ~~2017~~2018 period ~~declined~~increased by ~~$0.1 million~~$103,000 primarily due to the ~~following:~~factors described above related to the three months ended September 30, 2019 and 2018.

Other in the Company’s segment information includes its investments in other operating businesses that are in various stages of development and currently generate operating losses. These investments include various companies in the confectionery industry, including Hoffman’s Chocolates, a manufacturer and retailer of gourmet chocolates with retail locations in South Florida, and other manufacturers/wholesalers of confectionery products. In addition to the above investments, the Company also holds various other investments, including a restaurant located in South Florida that was acquired through a loan foreclosure.

During the nine months ended September 30, 2019 and 2018, Other also included the operating results of MOD Pizza restaurant locations located throughout Florida. As described in the “Overview” section above, during the third quarter of 2019, the Company entered into an agreement with MOD Pizza to terminate its area development and franchise agreements related to the development of MOD Pizza restaurant locations in Florida and transferred seven of its restaurant locations, including the related assets, operations, and lease obligations, to MOD Pizza. In addition, the Company closed the remaining two locations and terminated the related lease agreements.

The loss before income taxes from the Company’s other businesses in the confectionery industry for the three and nine months ended September 30, 2019 was $1.3 million and $3.7 million, respectively, compared to $1.5 million and $8.1 million for the comparable 2018 periods, respectively. The decrease in losses generated by these operations reflects the impact of ~~IT’SUGAR~~various strategic initiatives implemented by the Company during 2018, which included the closure of a manufacturing facility and a reduction in corporate personnel and infrastructure.

Consistent with the Company’s goal of streamlining its investment verticals so the Company can be more easily analyzed and followed by the marketplace, the Company is evaluating strategic alternatives related to certain of its businesses in the confectionery industry, including, but not limited to, the possible sale, spin-off, or exit of these businesses. To the extent that ~~are included~~the Company pursues one or more of these strategic alternatives, the Company may recognize impairment charges and incur additional costs in ~~BBX’s Sweet Holdings’ results~~future periods. As of September 30, 2019, the confectionery businesses currently under evaluation had a net book value of approximately $5.0 million.

The loss before income taxes from the Company’s MOD Pizza restaurant operations for the three and nine months ended September 30, 2019 was $4.8 million and $9.5 million, respectively, compared to $1.4 million and $3.2 million for the comparable 2018 periods, respectively. The increase in losses was primarily attributable to the recognition of impairment losses of $4.0 million and ~~2017 is set forth below (dollars in thousands):~~

~~We anticipate that BBX Sweet Holdings will continue to generate losses~~$6.7 million during the fourth quarter of 2018. Additionally, if BBX Sweet Holdings’ operations do not meet expectations, the Company decides to exit certain of its operations, or there is a downturn in the confectionery industry, BBX Sweet Holdings may recognize additional costs, including goodwill and other intangible assets impairment charges, in future periods.

~~Information regarding Corporate Expense & Other for~~ the three and nine months ended September 30, ~~2018 and 2017 is set forth below (dollars in thousands):~~2019, respectively, primarily associated with the Company’s exit from its MOD Pizza restaurant operations during the third quarter of 2019.

~~Corporate Expenses & Other~~Reconciling items and eliminations in the Company’s segment information ~~consists of~~includes the following:

Corporate Expenses & Other for the nine months ended September 30, 2017 also included $6.9 million of net gains on the cancellation of Woodbridge’s junior subordinated debentures, $7.1 million of insurance carrier reimbursements

~~from litigation costs, and the reimbursement of a $4.6 million fine previously paid in connection with the SEC civil litigation against BCC.~~

BBX Capital’s corporate ~~selling,~~ general and administrative expenses consist primarily of ~~expenses~~costs associated with administering the various support functions at its corporate headquarters, including executive compensation, legal, accounting, ~~legal,~~ human resources, ~~risk management,~~ investor relations, and executive ~~offices, as well as operating and start-up expenses for the Company’s MOD Pizza franchise restaurants and the expenses associated with a restaurant acquired in connection with a loan default.~~

offices. BBX Capital’s corporate ~~selling,~~ general and administrative expenses for the three and nine months ended September 30, ~~2018~~2019 were $12.0 million and $36.6 million, respectively, compared to $13.0 million and $38.7 million, respectively, for the ~~same period~~comparable 2018 periods. The decrease in ~~2017 increased by $0.6 million primarily due to higher costs associated with the Company’s MOD Pizza franchise operations. BBX Capital’s~~ corporate ~~selling,~~ general and administrative expenses for the three and nine months ended September 30, ~~2018~~2019 compared to the same ~~period~~2018 periods primarily reflects lower share-based compensation expenses, reduced headcount, and lower professional fees in ~~2017 remained relatively unchanged; however, significant changes in certain components included~~ the ~~following:~~2019 periods.

~~Woodbridge’s~~Excluding its note payable to Bluegreen, BBX Capital’s interest expense ~~on its junior subordinated debentures~~for the three and nine months ended September 30, 2019 was ~~$1.1~~$1.3 million and ~~$3.0~~$4.2 million, respectively, compared to $1.7 million and $4.8 million, respectively, for the comparable 2018 periods. The decrease in interest expense during the three and nine months ended September 30, ~~2018, respectively,~~2019 compared to ~~$0.9~~the same 2018 periods primarily resulted from the repayment of the outstanding balance of $30.0 million ~~and $2.4~~on BBX Capital’s $50.0 million ~~respectively,~~revolving line of credit in January 2019, partially

offset by higher interest expense on Woodbridge’s junior subordinated debentures associated with higher rates on the variable rates of interest on such debt during the same periods in 2017, as higher LIBOR interest rates during 2018 were partially offset by the impact of lower average outstanding principal balances resulting from the cancellation of $18.8 million of the debentures in February 2017. 2019 periods.

BBX Capital’s interest expense on the $80.0 million note payable to Bluegreen ~~which is eliminated in the Company’s condensed consolidated statements of operations,~~ was $1.2 million ~~for both the three months ended September 30, 2018 and 2017~~ and $3.6 million ~~and $5.2 million~~ for the nine months ended September 30, 2018 and 2017, respectively. The decrease in interest expense for the nine months ended September 30, 2018 compared to the same 2017 period was due to the reduction in the interest rate on the note payable from 10% per annum to 6% per annum on July 1, 2017.

~~BBX Capital’s interest expense on the Iberia $50.0 million revolving line~~each of ~~credit issued in March 2018 was $0.5 million and $0.9 million for~~ the three and nine months ended September 30, ~~2018. Interest~~2019 and 2018, respectively. The interest expense ~~associated with~~on this note and the related interest income recognized by Bluegreen are eliminated in the Company’s redeemable 5% cumulative preferred stock was $0.2 million and $0.3 million for the three months ended September 30, 2018 and 2017, respectively, and $0.7 million and $0.9 million for the nine months ended September 30, 2018 and 2017, respectively.consolidated statements of operations.

Other income, net consists of investment interest income, other fee revenue, and the gross profits earned on restaurant operations, which includes total revenues and costs of trade sales associated with the Company’s MOD Pizza franchise operations and a restaurant acquired in connection with a loan receivable default and excludes selling, general and administrative expenses associated with such operations. For the three and nine months ended September 30, 2018, gross profits from restaurant operations were $1.2 million and $3.6 million, respectively.

In 2016, the Company entered into area development agreements with MOD Pizza with an opportunity to develop up to approximately 60 MOD Pizza franchised restaurant locations throughout Florida over the next several years. Through November 5, 2018, six locations have been opened, and the Company expects to open two additional stores during the remainder of 2018. The Company is currently evaluating the rate at which it is opening new stores and may adjust the rate of growth in the future.

The Company’s MOD Pizza franchise operations generated net losses before taxes of $1.4 million and $0.7 million during the three months ended September 30, 2018 and 2017, respectively, and $3.2 million and $1.6 million during the nine months ended September 30, 2018 and 2017, respectively. The higher net losses in the 2018 periods were primarily attributable to selling, general, and administrative expenses, including compensation costs associated with store employees and operations, human resource, marketing, and finance personnel that were hired to establish initial restaurant operations, as well as costs associated with store openings and the review of potential restaurant sites. During the three and nine months ended September 30, ~~2018, the selling, general and administrative expenses were partially offset by sales generated from the five restaurant locations that were opened as of September 30, 2018. On average, for each of the five restaurant locations opened,~~2019, the Company ~~incurred approximately~~recognized $0.8 million ~~in capital expenditures, net~~and $1.9 million, respectively, of ~~anticipated tenant improvement allowances,~~interest and ~~approximately $0.2~~investment income from BBX Capital’s interest-bearing cash accounts and other investments compared to $0.6 million ~~in store opening costs.~~

Asand $1.6 million, respectively, for the ~~Company develops the portfolio of MOD Pizza restaurant locations over the next several years, it~~ ~~expects to continue to incur net losses and capital expenditures due to the expected costs of opening new locations.~~

The Company estimates its effective annual income tax rate on a quarterly basis based on current and forecasted operating results for the annual period and applies the estimated effective income tax rate to its income before income taxes reduced by net income attributable to noncontrolling interests in joint ventures taxed as partnerships.

The Company’s effective income tax rate was approximately 38% and 37% during the three and nine months ended September 30, 2019, respectively, compared to an effective income tax rate of 44% and 36% ~~during~~for the comparable 2018 periods. The effective tax rate for the nine months ended September 30, 2019 excludes the tax benefit associated with the $39.1 million Bass Pro litigation settlement, which the Company accounted for as a discrete item at the statutory income tax rate of 26%. The effective income tax rate for the nine months ended September 30, 2018 ~~excluding~~excludes a discrete income tax expense of $2.8 million related to anthe recognition of a provisional adjustment ~~to the provisional tax benefit recognized during the year ended December 31, 2017~~ associated with the December 2017 Tax Reform ~~Act, as compared to 44% during~~Act.

The Company’s effective income tax rate for the three and nine months ended September 30, ~~2017, which reflects the favorable impact of the reduction in the federal corporate tax rate from 35% to 21% commencing on January 1, 2018. The Company’s effective tax rates for the~~2019 and 2018 ~~and 2017 periods were~~was higher than the ~~applicable~~expected federal income tax ~~rates~~rate of 21% ~~and 35%, respectively,~~primarily due to nondeductible executive compensation ~~to covered employees~~ and state income ~~taxes~~

See Note 10 – Income Taxes under Item 1 included in this report for additional information with respect to the Company’s effective income tax rate and the provisional tax benefit recognized during the year ended December 31, 2017 in connection with the enactment of the Tax Reform Act in December 2017.

BBX ~~Capital includes in its~~Capital’s consolidated financial statements include the results of operations and financial position of various partially-owned subsidiaries in which it holds a controlling financial interest, including Bluegreen, Bluegreen/Big Cedar Vacations, and IT’SUGAR. As a result, the Company is required to attribute net income to the noncontrolling interests in these subsidiaries.

Net income attributable to noncontrolling interests was ~~$5.8~~$4.1 million and ~~$3.4~~$11.3 million during the three ~~months ended September 30, 2018~~ and ~~2017, respectively, and $16.3 million and $9.5 million during the~~ nine months ended September 30, 2019, respectively, compared to $5.8 million and $16.3 million, respectively, for the comparable 2018 ~~and 2017, respectively.~~ periods. The ~~increase~~decrease in net income attributable to noncontrolling interests for the three and nine months ended September 30, ~~2018~~2019 compared to the same ~~2017~~2018 periods was primarily due to ~~Bluegreen’s IPO, which resulted in~~ a decrease in the net income of ~~BBX Capital’s ownership in Bluegreen’s common stock from 100% to 90%.~~Bluegreen and Bluegreen/Big Cedar Vacations.

~~Total assets at September 30, 2018 and December 31, 2017 were $1.7 billion and $1.6 billion, respectively. The primary changes in the components of total assets are summarized below:~~

~~Total liabilities at September 30, 2018 and December 31, 2017 were $1.0 billion and $935.4 million, respectively. The primary changes in components of total liabilities are summarized below:~~

The Company’s operating cash flows ~~decreased $9.6~~increased by $16.8 million during the nine months ended September 30, ~~2018~~2019 compared to the same ~~2017~~2018 period. The ~~decrease~~increase was primarily due to ~~increased~~an increase in operating distributions from real estate joint ventures and decreased spending on the acquisition and development of VOI inventory, partially offset by ~~Bluegreen~~the $20.0 million payment made to Bass Pro in June 2019 pursuant to the ~~2018 period~~settlement agreement described above, an increase in payments for federal income taxes, and ~~lower operating distributions~~a decrease in proceeds from ~~unconsolidated real estate joint ventures primarily as a result~~the sale of developed lots at the ~~CC Homes Bonterra joint venture's completion of sales in its 394 single-family home community development during late 2017.~~Beacon Lake Community development.

The Company’s investing cash flows increased by ~~$56.5~~$22.6 million during the nine months ended September 30, ~~2018~~2019 compared to the same ~~period in 2017.~~2018 period. The increase reflects the ~~$58.4 million~~impact of ~~cash paid for the acquisition of IT’SUGAR~~sales activity in ~~June 2017 as well as~~BBX Capital Real Estate’s portfolio, which resulted in an increase in ~~cash~~ distributions from ~~unconsolidated~~ real estate joint ventures and higher net proceeds ~~received~~ from the sale of real estate held-for-sale, and ~~the repayment~~decreased spending by Bluegreen on property and ~~settlement of loans receivable in 2018,~~equipment, partially offset by ~~increased capital expenditures at Bluegreen, including expenditures related to sales office~~

~~expansions~~a decline in loan collections in the legacy asset portfolio and ~~information technology, and purchases of leasehold improvements and equipment for MOD Pizza restaurant locations~~an increase in ~~2018.~~investments in real estate joint ventures.

The Company’s cash used in financing ~~cash flows decreased~~activities increased by ~~$10.5~~$59.1 million during the nine months ended September 30, ~~2018~~2019 compared to the same 2018 period, ~~in 2017. The decrease~~which was primarily ~~the result of $60.1 million paid for the purchase of~~ ~~6,486,486 shares of BBX Capital’s Class A Common Stock~~ ~~partially offset by $30.0 million~~due to an increase in payments, net of borrowings, on the Company’s ~~Iberia’s $50.0~~debt, partially offset by a net decrease of $51.2 million ~~line of credit and other borrowings~~in payments for the purchase and retirement of ~~VOI inventory~~the Company’s common stock during 2019 as compared to 2018, as the Company purchased 6.5 million shares of its common stock for $60.1 million in a tender offer in April 2018, and ~~property and equipment~~.a decrease in distributions to noncontrolling interest, which was primarily attributable to distributions to the noncontrolling interest in Bluegreen/Big Cedar Vacations during the 2018 period.

Bluegreen has historically experienced, and expects to continue to experience, seasonal fluctuations in its revenues and results of operations. This seasonality has resulted, and may continue to result, in fluctuations in quarterly operating results. Due to consumer travel patterns, Bluegreen typically experiences an increase in tours and VOI sales during the second and third quarters of the calendar year.

IT'SUGAR and certain of the Company’s other operating businesses are subject to seasonal fluctuations in trade sales, which cause fluctuations in the Company’s quarterly results of operations. Historically, IT’SUGAR has generated its strongest retail trade sales during the months from June through August, as well as during the month of December.

The Company’s material commitments as of September 30, ~~2018~~2019 included the required payments due on its receivable-backed debt, notes payable and other borrowings, junior subordinated debentures, commitments to complete certain projects based on its sales contracts with customers, subsidy advances to certain HOAs, and commitments under non-cancelable operating leases.

The following table summarizes the contractual minimum principal and interest payments required on ~~all of~~ the Company’s outstanding debt, outstanding payments required under the Bass Pro settlement agreement, and payments required on the Company’s non-cancelable operating leases by period due date as of September 30, ~~2018~~2019 (in thousands):

In lieu of paying maintenance fees for unsold VOI inventory, Bluegreen ~~provides subsidies to~~may enter into subsidy agreements with certain ~~HOAs to provide funds to operate and maintain vacation ownership properties in excess of assessments collected from owners of the VOIs.~~HOAs. During the nine months ended September 30, 2019 and 2018, Bluegreen made subsidy payments ~~related to such subsidies~~in connection with these arrangements of $10.5 million and $2.2 ~~million.~~million, respectively. As of September 30, ~~2018,~~2019, Bluegreen ~~was providing subsidies to ten HOAs and~~ had ~~$6.2~~accrued $8.0 million ~~accrued~~ for such subsidies, which is ~~included~~reflected in other liabilities in the Company’s condensed consolidated statement of financial condition. As of ~~September 30,~~December 31, 2018, Bluegreen had no ~~commitments to purchase VOI inventory.~~

In September 2017, Bluegreen entered into an agreement with a former executive in connection with his retirement. Pursuant to the terms of the agreement, Bluegreen agreed to make payments totaling approximately $2.9 million through March 2019. As of September 30, 2018, $1.2 million remained payable under this agreement. In addition, during the second half of 2017, Bluegreen implemented an initiative designed to streamline its operations in certain areas to facilitate future growth. Such initiative resulted in $5.8 million of severance accrued ~~as of December 31, 2017~~

~~and $0.4 million accrued as of September 30, 2018 which amounts are included in other~~ liabilities ~~in the Company condensed consolidated statement of financial condition as of such dates.~~

During 2016, the Company entered into a severance arrangement with an executive. Under the terms of the arrangement, the executive will receive $3.7 million over a three year period ending in August 2019. As of September 30, 2018, $0.9 million remained to be paid under this agreement.

~~A wholly-owned subsidiary of BBX Capital has opened, and may continue to open, MOD Pizza restaurant locations, which involves entering into lease agreements~~ for such ~~locations. BBX Capital has guaranteed performance on certain lease agreements for these locations and may be required to guarantee performance on additional lease agreements for new locations.~~ subsidies.

The Company believes that its existing cash, anticipated cash to be generated from operations, anticipated future permitted borrowings under existing or future credit facilities, and anticipated future sales of notes receivable under existing, future, or replacement purchase facilities will be sufficient to meet its anticipated working capital, capital expenditures and debt service requirements, including the contractual payment of the obligations set forth above, for the foreseeable future, subject to the success of the Company’s ongoing business strategy and the ongoing availability of credit. The Company will continue its efforts to renew, extend, or replace any credit and receivables purchase facilities that have expired or that will expire in the near term. The Company may, in the future, also obtain additional credit facilities and may issue corporate debt or equity securities. Any debt incurred or issued may be secured or unsecured, bear interest at fixed or variable rates, and may be subject to such terms as the lender may require. In addition, the Company’s efforts to renew or replace credit facilities or receivables purchase facilities which have expired or which are scheduled to expire in the near term may not be successful, and sufficient funds may not be available from operations or under existing, proposed, or future revolving credit or other borrowing arrangements or receivables purchase facilities to meet cash needs, including debt service ~~and other contractual~~ obligations. To the extent the Company is

unable to sell notes receivable or borrow under such facilities or generate sufficient cash from operations, the Company’s ability to satisfy its obligations would be materially adversely ~~affected.~~affected.

Bluegreen’s receivables purchase facilities, ~~and its~~ credit facilities, indentures, and other outstanding debt instruments include what Bluegreen believes to be customary conditions to funding, eligibility requirements for collateral, cross-default and other acceleration provisions, and certain financial and other affirmative and negative covenants, including, among others, limits on the incurrence of indebtedness, payment of dividends, investments in joint ventures and other restricted payments, the incurrence of liens and transactions with affiliates, as well as covenants concerning net worth, fixed charge coverage requirements, debt-to-equity ratios, portfolio performance requirements and cash balances, and events of default or termination. In July 2019, Bluegreen amended the Fifth Third Bank Note Payable, Syndicated Line of Credit, and Term Loan, effective June 28, 2019, to exclude the $39.1 million Bass Pro settlement expense recognized during the nine months ended September 30, 2019 from the calculation of certain financial covenants in the credit facilities enabling it to maintain compliance with such covenants. In the future, Bluegreen may be required to seek waivers of such covenants but may not be successful in obtaining waivers, and such covenants may limit ~~Bluegreen’s~~its ability to ~~pay dividends,~~ raise funds, sell receivables or satisfy or refinance its obligations, or otherwise adversely affect ~~the Company’s~~its financial condition and results of ~~operations.~~operations, as well as its ability to pay dividends. In addition, ~~the Company’s~~Bluegreen’s future operating performance and ability to meet its financial obligations will be subject to future economic conditions and to financial, business, and other factors, many of which may be beyond ~~the Company’s~~Bluegreen’s control.

As previously described, pursuant to the settlement agreement Bluegreen ~~has an exclusive~~entered into with Bass Pro and its affiliates in June 2019, Bluegreen paid Bass Pro $20.0 million and agreed to make five annual payments to Bass Pro of $4.0 million each January 1st commencing in 2020. In addition, in lieu of the commission payable to Bass Pro as previously contemplated by its marketing agreement with Bass Pro, ~~a nationally-recognized retailer of fishing, marine, hunting, camping and sports gear, that provides~~ Bluegreen with the right to market and sell vacation packages at kiosks in each of Bass Pro’s retail locations and through certain other means. As of September 30, 2018, Bluegreen was selling vacation packages in 69 of Bass Pro’s stores. Bluegreen compensateswill now pay Bass Pro based on VOI sales generated through the program. No compensation is paid to Bass Pro under the agreement on sales made at Bluegreen/Big Cedar Vacations’ resorts. During the nine months ended September 30, 2018 and 2017, VOI sales to prospects and leads generated by the agreement with Bass Pro accounteda fixed annual fee of $70,000 for approximately 14% and 15%, respectively, of Bluegreen’s VOI sales volume. On October 9, 2017, Bass Pro advised Bluegreen that it believed the amounts paid to it as VOI sales commissions should not have been adjusted for certain purchaser defaults. Bluegreen previously had informed Bass Pro that the aggregate amount of such adjustments for defaults charged back to Bass Pro between January 2008 and June 2017 totaled approximately $4.8 million. While Bluegreen believed and continues to believe that these adjustments were appropriate and consistent with both the terms and the intent of the agreements with Bass Pro, in October 2017, in order to demonstrate its good faith, Bluegreen paid the amount at issue to Bass Pro pending future resolution of the matter. Bluegreen has continued to make payments to Bass Pro as it believes appropriate and consistent with the agreements, which continue to be adjusted for defaults, and Bass Pro has accepted these payments as historically calculated. Subsequently and again more recently, Bass Pro has raised issues regarding adjustments for defaults and requested additional information regarding the calculation of commissions payable toeach Bass Pro and ~~other amounts payable under the agreements, including reimbursements paid~~Cabela’s retail store that Bluegreen is accessing (excluding sales at retail stores which are designated to ~~Bluegreen, as well as regarding the operations of Bluegreen/Big Cedar Vacations. The issues raised by Bass Pro have not impacted current operations under the marketing agreement or relative~~provide tours to Bluegreen/Big Cedar ~~Vacations.~~Vacations, or “Bluegreen/Big Cedar feeder stores”), plus $32.00 per net vacation package sold (less cancellations or refunds within 45 days of sale). Bluegreen ~~has formally responded~~also agreed to

contribute to the Wonders of Wildlife Foundation $5.00 per net package sold (less certain cancellations and refunds within 45 days of sale), subject to an annual minimum of $700,000. The fixed annual fee will be prorated for 2019. Bluegreen will generally be required to pay the fixed annual fee with respect to at least 59 Bass Pro ~~with its view on these matters~~retail stores and ~~intends~~a minimum number of Cabela’s retail stores that increases over time to ~~provide~~a total of at least 60 Cabela’s retail stores by the end of 2021, provided that the minimum number of Bass Pro ~~with all appropriately requested information. Bluegreen’s agreements with Bass Pro provide that,~~and Cabela’s retail stores for purposes of the fixed annual fee may be reduced under certain circumstances set forth in the event of any dispute or disagreement between the parties, either party may give notice and thereafter the CEOs of the parties are required to communicate promptly with each other with a view to resolving the dispute or disagreement. Accordingly, it is anticipated that such process will be followed in good faith and that the parties will appropriately resolve any issues. While Bluegreen does not believe that any material additional amounts are due to Bass Prosettlement agreement, including as a result of ~~these matters, its future results could be impacted by any change~~a reduction of traffic in the ~~calculations utilized~~stores in ~~connection with payments or reimbursements required under the agreements or if Bluegreen is unable to resolve the issue.~~excess of 25% year-over-year.

BBX Capital guarantees certain obligations of its wholly-owned subsidiaries and unconsolidated real estate joint ventures ~~which are not included in the contractual obligations table above, and also guarantees certain of the obligations in the above table~~ as described in further detail in Note 11 to the Company’s condensed consolidated financial statements included in Item 1 ~~– Note 11~~ of this report.

The Company has investments in joint ventures involved in the development of multifamily apartment and townhome communities, as well as single-family master planned communities. The Company’s investments in these joint ventures are accounted for under the equity method of accounting, and as a result, the Company does not recognize the assets and liabilities of these joint ventures in its financial statements. As of September 30, 2019 and December 31, 2018, the Company’s investments in these joint ventures totaled $53.7 million and $64.7 million, respectively. These unconsolidated real estate joint ventures generally finance their activities with a combination of debt financing and equity. The Company generally does not directly guarantee the financing of these joint ventures, other than as described above and in Note 11 to the Company’s condensed consolidated financial statements included in Item 1 of this report, and the Company’s maximum exposure to losses from these joint ventures is its equity investment. The Company is typically not obligated to fund additional capital to its joint ventures; however, the Company’s interest in a joint venture may be diluted if the Company elects not to fund a joint venture capital call.

As of September 30, ~~2018~~2019 and December 31, ~~2017,~~2018, the Company, excluding Bluegreen, had cash, cash equivalents and short-term investments of approximately ~~$174.1~~$185.6 million and ~~$165.2~~$146.9 million, respectively. Management believes that BBX Capital has sufficient liquidity from the sources described below to fund operations, including its anticipated working capital, capital expenditure, and debt service requirements, for the foreseeable future, subject to the success of the Company’s ongoing business strategy and the ongoing availability of credit.

BBX Capital’s principal sources of liquidity are its available cash and short-term investments, ~~distributions~~dividends received from Bluegreen, borrowings from its $50.0 million IberiaBank revolving line of credit, distributions from unconsolidated real estate joint ventures, ~~funds obtained~~proceeds received from ~~loan recoveries~~lot sales at the Beacon Lake Community development, and sales of ~~real estate, and income from income producing~~ real estate.

BBX Capital believes that its current financial condition and credit relationships, together with anticipated cash flows from other sources of funds, including potential dividends from Bluegreen (which, as described below, are subject to certain limitations), and, to the extent determined to be advisable, proceeds from the disposition of properties or investments, ~~including its investments in middle market operating companies,~~ will allow it to meet its anticipated near-term liquidity needs. BBX Capital may also seek additional liquidity from outside sources, including traditional bank financing, secured or unsecured indebtedness, or the issuance of equity and/or debt securities. However, these alternatives may not be available to ~~BBX Capital~~us on attractive terms, or at all. The inability to raise funds through the sources discussed above would have a material adverse effect on the Company’s business, results of operations, and financial condition.

BBX Capital expects that it will receive dividends from time to time from Bluegreen. For the nine months ended September 30, 2019 and 2018, BBX Capital received from Bluegreen dividends ~~totalling $10.1~~totaling $34.3 million and $30.3 million, ~~during the three and nine months ended September 30, 2018,~~ respectively. ~~On October 17, 2018, Bluegreen declared a quarterly cash dividend payable in the fourth quarter of 2018 of $0.15 per share on its common stock.~~In addition, Bluegreen has indicated that it intends to pay regular quarterly dividends on its common stock subject to the ~~discretion~~declaration of such dividends by its board of directors. The ultimate payment of such dividends will be based upon factors that ~~the Bluegreen~~Bluegreen’s board of directors deems to be appropriate, including Bluegreen’s operating results, financial condition, cash position, and operating and capital needs. Dividends from Bluegreen are also dependent on restrictions contained in Bluegreen’s debt ~~facilities.~~facilities and may not continue at current or previous levels. On October 30, 2019, Bluegreen’s board of directors declared a quarterly cash dividend of $0.13 per share on its common stock, which represents a $0.04 per share reduction in Bluegreen’s quarterly cash dividend per share as compared to its quarterly dividends declared during the first, second, and third quarters of 2019. Except as otherwise noted, the debts and obligations of Bluegreen are not direct obligations of BBX Capital and generally are non-recourse to BBX Capital. Similarly, the assets of Bluegreen are not available to BBX Capital, absent a dividend or distribution. Furthermore, certain of Bluegreen’s credit facilities contain terms which could limit the payment of cash dividends without the lender’s consent or waiver, and Bluegreen may only pay dividends subject to such restrictions as well as the declaration of dividends by its board of directors. As a consequence, BBX Capital may not receive dividends from Bluegreen consistent with prior periods, in the time frames or amounts anticipated, or at all.

BBX Capital may also receive funds from its subsidiaries, including Bluegreen, in connection with its tax sharing agreement to the extent that the subsidiary utilizes BBX Capital’s tax benefits in BBX Capital’s consolidated tax

return. During the ~~three and~~ nine months ended September 30, 2019 and 2018, BBX Capital received ~~$7.1~~$13.0 million and $21.0 million, respectively, of tax sharing payments from Bluegreen.

BBX Capital expects to use its available funds for operations and general corporate purposes (including working capital, capital expenditures, and debt service requirements and the Company’s other commitments described above), to make additional investments in real estate opportunities, ~~middle market~~ operating businesses, or other opportunities, to declare and pay cash dividends on the Company’s common stock, or to ~~repurchase~~purchase shares of its common ~~stock pursuant to its share repurchase program.~~

During the first nine months of 2018, IT’SUGAR has opened three retail stores and expects to open an additional store in November 2018. Additionally, during 2019, IT’SUGAR currently anticipates renovating certain existing stores and opening four to six new stores. In connection with the anticipated store opening in November 2018, as well as the renovation of various existing stores and expected store openings during 2019, IT’SUGAR expects to incur approximately $6.0 million to $6.5 million of capital expenditures, net of tenant allowance reimbursements, during the remainder of 2018 and 2019.

The Company previously disclosed its plans to open a total of up to 60 MOD Pizza restaurant locations throughout Florida over the next several years. Through November 5, 2018, six locations have been opened, and the Company expects to open two additional stores during the remainder of 2018. The Company is currently evaluating the rate at which it is opening new stores and may adjust the rate of growth in the future. The Company expects to incur an aggregate of $2.0 million to $3.0 million of capital expenditures, net of tenant allowance reimbursements, to open locations during the remainder of 2018.stock.

In ~~October~~November 2018, ~~the Company entered into an agreement pursuant to which it has agreed, subject to the satisfaction or waiver of the conditions to closing, to acquire~~BBXRE acquired a ~~fifty percent (50%)~~50% membership interest in the Altman Companies, a ~~real estate development company which operates a fully integrated multifamily platform covering all aspects of~~joint venture between the Company and JA engaged in the development, ~~process~~construction, and ~~which includes membership interests~~management of multifamily apartment communities. Although the Altman Companies generates revenues from the performance of development, general contractor, leasing, and property management services to the joint ventures that are formed to invest in ~~Altman Development Company, Altman-Glenewinkel Construction,~~the development projects that it originates, it is expected to generate profits for BBXRE and ~~Altman Management Company, for a purchase price of $11.8 million. Simultaneously with this~~JA primarily through the equity distributions that BBXRE and JA receive through their investment ~~the Company has agreed to acquire interests~~ in the managing member of ~~eight multifamily~~such joint

ventures. Therefore, as the timing of such distributions to BBXRE and JA is generally contingent upon the sale or refinancing of a completed development project, it is anticipated that BBXRE and JA will be required to contribute capital to the Altman Companies for its ongoing operating costs and predevelopment expenditures, as well as to the managing member of newly formed joint ventures. At the current time, BBXRE anticipates that it will invest approximately $2.5 million to $3.5 million in the Altman Companies and related joint ventures during the remainder of 2019 related to planned predevelopment expenditures, investments in new joint ventures, and ongoing operating costs. In addition, BBXRE currently anticipates that it will contribute an additional $1.0 million to $2.0 million to ABBX Guaranty, LLC, a joint venture between BBXRE and JA that provides guarantees on the indebtedness and construction cost overruns of new real estate ~~developments affiliated with~~joint ventures formed by the Altman Companies.

Pursuant to the operating agreement of the Altman Companies, ~~(the “Developments”) for an aggregate purchase price of $10.9 million, subject to adjustment based on the terms of the agreement. The Company has~~BBXRE will also ~~agreed, subject to various terms and conditions, to~~ acquire an additional ~~forty percent (40%) of~~40% equity interest in the ~~membership interests in~~ Altman Companies from JA for a purchase price of $9.4 million in ~~approximately four years after the closing of the initial purchase. The seller, Joel Altman,~~January 2023, while JA can also, at his option or in other predefined circumstances, require ~~the Company~~BBXRE to ~~acquire the~~purchase his remaining ~~ten percent (10%)~~10% equity interest in the Altman Companies for $2.4 million. ~~Closing~~In addition, in certain circumstances, BBXRE may acquire the 40% membership interests in Altman-Glenewinkel Construction that are not owned by the Altman Companies for a purchase price based on prescribed formulas in the operating agreement of Altman-Glenewinkel Construction.

In addition to BBXRE’s anticipated investments in the ~~investment in~~ Altman Companies and related joint ventures, BBXRE has entered into two real estate joint ventures, CCB Miramar, LLC and L03/212 Partners, LLC, in which the ~~Developments is subject~~Company expects to contribute additional capital of approximately $9.0 million to $10.0 million during the ~~satisfaction or waiver~~next twelve to eighteen months based on the current plans and estimates associated with the related development projects.

IT’SUGAR opened two retail stores during the nine months ended September 30, 2019 and currently expects to open a flagship location at American Dream in New Jersey in November 2019 and renovate certain existing stores during the remainder of ~~certain conditions, including obtaining consents from lenders~~2019. In connection with the anticipated store opening and ~~investors in~~renovation of these existing stores, IT’SUGAR expects to incur approximately $3.0 million to $4.0 million of capital expenditures, net of tenant allowance reimbursements, for the ~~Developments.~~remainder of 2019.

BBX Capital has previously indicated its intention to declare regular quarterly dividends on its Class A and Class B Common ~~Stock~~Stock. In March, June, and September of 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.0125 per share, and the Company indicated that it intends to continue to declare regular quarterly dividends of ~~$0.03~~$0.0125 per quarter per share on its ~~common stock, or $3.0 million in~~Class A and Class B Common Stock, which is an increase from the ~~aggregate,~~$0.01 per share regular quarterly dividend paid by the Company during ~~the nine months ended September 30,~~ 2018. However, future ~~declaration~~declarations and ~~payment~~payments of cash dividends with respect to the Company’s common stock, if any, will be determined in light of the Company’s then-current financial condition and results of ~~the Company,~~operations, its operating and capital needs, and other factors deemed relevant by the board of directors.

On June 13, 2017, BBX Capital’s board of directors approved a share repurchase program which authorizes the ~~repurchase~~purchase of a total of up to 5,000,000 shares of the ~~Company’~~Company’s Class A Common Stock and Class B Common Stock at an aggregate cost of no more than $35.0 million. This program ~~replaces the Company’s prior repurchase program and~~ authorizes management, at its discretion, to ~~repurchase~~purchase shares from time to time subject to market conditions and other factors. During the nine months ended September 30, ~~2018, the Company has not repurchased any shares under the program. However, in April 2018,~~2019, BBX Capital ~~completed a cash tender offer pursuant to which it~~ purchased ~~6,486,486~~1,799,539 shares of its Class A Common Stock ~~at a purchase price~~for approximately $8.9 million. As of ~~$9.25 per share for an aggregate purchase price~~September 30, 2019, BBX Capital had purchased 3,321,132 shares of approximately $60.1 million. The shares purchased in the tender offer, which was not conducted under the Company’s share repurchase program, represented approximately 7.6% of the total number of outstanding shares of

~~BBX Capital’s~~its Class A Common Stock ~~and 6.3% of BBX Capital’s total issued and outstanding equity (which includes~~for approximately $18.9 million pursuant to the ~~issued and outstanding shares of BBX Capital’s Class B Common Stock) as of April 19, 2018.~~

~~As of September 30, 2018, the Company had outstanding 10,000 shares of 5% Cumulative Preferred Stock with a stated value of $1,000 per~~June 2017 share ~~which are subject to mandatory redemption, of which 5,000 shares are required to be redeemed on December 31, 2019 and the remaining shares are required to be redeemed on December 31, 2020.~~repurchase program.

In April 2015, BBX Capital borrowed $80.0 million from a wholly-owned subsidiary of Bluegreen. Payments of interest are required on a quarterly basis, with the entire $80.0 million principal balance and accrued interest being due and payable in April 2020. This debt currently accrues interest at a per annum rate of 6% with quarterly interest payments to Bluegreen of $1.2 million, and BBX Capital may be required to repay all or a portion of the $80.0 million borrowed from Bluegreen if Bluegreen is not in compliance with debt covenants under its debt instruments.

In addition to the note payable to Bluegreen, the Company has other indebtedness which is summarized in Commitments above. The Company’s indebtedness, including any future debt incurred by the Company, may make usit more vulnerable to downturns in the economy and may subject the Company to covenants or restrictions on its operations and activities.

As of September 30, ~~2018,~~2019, BBX Capital and certain of its subsidiaries had the following credit facilities with future availability, subject to eligible collateral and the terms of the facilities, as applicable.

~~Iberia~~IberiaBank $50.0 million Revolving Line of Credit. In March 2018, BBX Capital ~~BBX Sweet Holdings, Food for Thought Restaurant Group-Florida, LLC, BCC~~ and ~~Woodbridge,~~certain of its wholly-owned subsidiaries entered into a Loan and Security Agreement and related agreements with IberiaBank (“Iberia”), as administrative agent and lender, and City National Bank of Florida, as lender, which provide for a $50.0 million revolving line of credit. Amounts borrowed under the facility accrue interest at a floating rate of 30-day LIBOR plus a margin of 3.0% to 3.75% or the Prime Rate plus a margin of 1.50% to 2.25%. The applicable margin is based on BBX Capital’s debt to EBITDA ratio. Payments of interest only are payable monthly. The facility matures, and all outstanding principal and interest will be payable, on ~~March 6, 2020,~~June 30, 2021, with twelve-month renewal options at BBX Capital’s request, subject to satisfaction of certain conditions. The facility is secured by a pledge of a percentage of BBX Capital’s membership interests in Woodbridge having a value of not less than $100.0 million. Borrowings under the facility may be used for business acquisitions, real estate investments, stock repurchases, letters of credit, and general corporate purposes.

Under the terms and conditions of the Loan and Security Agreement, BBX Capital is required to comply with certain financial covenants, including maintaining minimum unencumbered liquidity and complying with ~~financial ratios related to fixed charge coverage and~~ debt to ~~EBITDA.~~EBITDA financial ratios. The Loan and Security Agreement also contains customary affirmative and negative covenants, including those that, among other things, limit the ability of BBX Capital and the other borrowers to incur additional indebtedness and to make certain loans and investments. As of September 30, ~~2018,~~2019, there ~~was $30.0 million~~were no borrowings outstanding onunder the ~~line of credit.~~credit facility.

Toronto-Dominion Commercial Bank. In May 2017, Renin entered into a credit facility with TD ~~Bank.~~Bank that was subsequently renewed in September 2019 and 2018. Under the terms and conditions of the credit facility, TD Bank agreed to provide term loans for up to $1.7 million and loans under a revolving credit facility for up to approximately $16.3 million subject to certain terms and conditions. As of September 30, ~~2018,~~2019, the outstanding amounts under the term loan and revolving credit facility were ~~$1.3~~$0.8 million and ~~$8.1~~$7.5 million, respectively, with effective interest rates of 5.92% and ~~were bearing interest at an effective rate of 5.01% and 5.95%~~5.30%, respectively.

Bank of America Revolving Line of Credit. In August 2018, IT’SUGAR entered into a revolving credit facility with Bank of America. Under the terms and conditions of the credit facility, Bank of America has agreed to provide a revolving line of credit to IT’SUGAR for up to $4.0 million based on available collateral as defined by the credit facility and subject to IT’SUGAR’s compliance with the terms and conditions of the credit facility, including certain specific financial covenants. The revolving credit facility ~~is available through~~matures in August 2021, and amounts outstanding bear interest at a LIBOR daily floating rate plus 1.50% or a monthly LIBOR rate subject to the terms and conditions of the credit facility. Payments of interest only ~~will be~~are payable monthly. ~~There~~As of September 30, 2019, there were no borrowings outstanding under the credit ~~facility as of September 30, 2018.~~facility.

Banc of America Leasing & Capital Equipment Note. In September 2018, IT’SUGAR entered into a Master Loan and Security Agreement with Banc of America Leasing & Capital, LLC which sets forth the terms and conditions pursuant to which IT’SUGAR may borrow funds to purchase equipment under one or more equipment security notes. The

Agreement contains customary representations and ~~covenants, including the submission of quarterly and annual financial statements to the lender.~~covenants. Each equipment note constitutes a separate, distinct and independent financing of equipment and is secured by a security interest in the purchased equipment and is an unconditional contractual obligation of IT’SUGAR. As of September 30, ~~2018,~~2019, there was one equipment note outstanding with a balance of ~~$0.6~~$0.4 million.

As of September 30, 2019, BBX Capital and its subsidiaries (other than Bluegreen) had availability of approximately $57.7 million under the above revolving lines of credit, subject to eligible collateral and the terms of the facilities, as applicable.

Bluegreen believes that it has sufficient liquidity from the sources described below to fund operations, including its anticipated working capital, capital expenditure, and debt service requirements, for the foreseeable future, subject to the success of its ongoing business strategy and the ongoing availability of credit.

Bluegreen’s primary sources of funds from internal operations are: (i) cash sales, (ii) down payments on VOI sales which are financed; (iii) proceeds from the sale of, or borrowings collateralized by, notes receivable, (iv) cash from finance operations, including mortgage servicing fees and principal and interest payments received on the purchase money mortgage loans arising from sales of VOIs, and (v) net cash generated from sales and marketing fee-based services and other fee-based services, including resort management operations.

While the vacation ownership business has historically been capital intensive and Bluegreen may from time to time pursue transactions or activities which may require significant capital investment and adversely impact near term cash flows, Bluegreen has generally sought to focus on the generation of “free cash flow” (defined as cash flow from operating activities, less capital expenditures) by: (i) incentivizing sales associates and creating programs with third-party credit card companies to generate a higher percentage of sales in cash; (ii) maintaining sales volumes that focus on efficient marketing channels; (iii) limiting capital and inventory expenditures; (iv) utilizing sales and marketing, mortgage servicing, resort management services, title and construction expertise to pursue fee-based-service business relationships that generally require ~~minimal~~less up-front capital investment and have the potential to produce incremental cash flows; and (v) more recently, by selling VOIs obtained through secondary market or JIT arrangements. In 2018, Bluegreen has invested more of its free-cash flow in additional sales offices and sales office expansions, as well as information technology expenditures, which Bluegreen expects to drive and support growth in future years. In addition, during April 2018, Bluegreen acquired the Éilan Hotel & Spa in San Antonio, Texas for $34.3 million, and borrowed $24.3 million to help fund the acquisition.

VOI sales are generally dependent upon providing financing to buyers. The ability to sell and/or borrow against notes receivable from VOI buyers has been a critical factor in Bluegreen’s continued liquidity. A financed VOI buyer is generally only required to ~~pay~~provide a minimum of 10% to 20% of the purchase price in cash or equity at the time of sale; however, selling, marketing and administrative expenses attributable to the sale are primarily cash expenses that generally exceed a buyer’s minimum required down payment. Accordingly, having financing facilities available for the hypothecation, sale or transfer of VOI notes receivable has been a critical ~~factor in~~to Bluegreen’s ability to meet its short and long-term cash needs. Bluegreen has attempted to maintain a number of diverse financing facilities. Historically, Bluegreen has relied on its ability to sell receivables in the term securitization market in order to generate liquidity and create capacity in its receivable facilities. In addition, maintaining adequate VOI inventory to sell and pursue growth into new markets has historically required Bluegreen to incur debt for the acquisition, construction, and development of new resorts. ~~The remaining development~~Development expenditures during ~~2018~~the remainder of 2019 are expected to be in a range of ~~$5.0~~$10.0 million to ~~$10.0~~$15.0 million, which primarily relate to development at one of the Bluegreen/Big Cedar Vacations’ resorts, refurbishments at Bluegreen’s Blue Ridge Village Resort in Banner Elk, North Carolina and ~~development~~refurbishments at ~~the Fountains resort in Orlando, Florida.~~

Bluegreen expects to seek to acquire or develop additional VOI inventory, which may increase acquisition and development expenditures as compared to prior periods and may involve or require the incurrence of additional debt.certain other resorts.

In connection with its capital-light business activities, Bluegreen has entered into agreements with third-party developers that allow Bluegreen to buy VOI inventory, typically on a non-committed basis, prior to when Bluegreen intends to sell such VOIs. Bluegreen’s capital-light business strategy also includes secondary market sales, pursuant to which Bluegreen enters into secondary market arrangements with certain HOAs and others on a non-committed basis, which allows Bluegreen to acquire VOIs generally at a significant discount, as such VOIs are typically obtained by the HOAs through foreclosure in connection with maintenance fee defaults. ~~Remaining acquisitions~~Acquisitions of JIT and secondary market inventory ~~in 2018~~during the remainder of 2019 are expected to range from ~~$2.0~~$1.0 million to $5.0 million.

In addition, ~~remaining~~ capital expenditures in connection with sales and marketing facilities as well as for information technology capital expenditures are expected to be ~~in a range of~~between $5.0 million and $10.0 million ~~to $15.0 million in 2018.~~during the remainder of 2019.

Available funds may also be used to acquire other businesses or assets, invest in other real estate based opportunities, pay dividends to its shareholders, or to fund loans to affiliates or others.

In October 2018, Bluegreen completed the 2018-A Term Securitization, a private offering and sale of approximately $117.7 million of investment-grade, VOI receivable-backed notes (the "Notes"), including approximately $49.8 million of Class A Notes, approximately $33.1 million of Class B Notes and approximately $34.8 million of Class C Notes with interest rates of 3.77%, 3.95% and 4.44%, respectively, which blends to an overall weighted average interest rate of approximately 4.02%. The gross advance rate for this transaction was 87.2%. The Notes mature in February 2034. KeyBanc Capital Markets Inc. (“KeyCM”) and Barclays Capital Inc. acted as joint bookrunners and co-lead managers and were the initial purchasers of the Notes. KeyCM also acted as structuring agent for the transaction.

The amount of the VOI notes receivables sold or to be sold to BXG Receivables Note Trust 2018-A (the “Trust”) is approximately $135.0 million, approximately $109.0 million of which was sold to the Trust at closing and approximately $26.0 million of which is expected to be sold to the Trust prior to February 25, 2019. The gross proceeds of such sales to the Trust are anticipated to be approximately $117.7 million. A portion of the proceeds received at the closing was used to: repay KeyBank National Association (“KeyBank”) and DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main (“DZ Bank”) approximately $49.2 million, representing all amounts outstanding (including accrued interest) under Bluegreen’s existing purchase facility with KeyBank and DZ Bank (the "KeyBank/DZ Purchase Facility"); repay Liberty Bank approximately $20.4 million under Bluegreen’s existing Liberty Bank Facility; repay Pacific Western Bank approximately $7.1 million under Bluegreen’s existing Pacific Western Bank Facility; capitalize a reserve fund; and pay fees and expenses associated with the transaction. The remainder of the proceeds from the 2018-A Term Securitization are expected to be used by Bluegreen for general corporate purposes. As a result of the facility repayments described above, following the closing of the 2018-A Term Securitization, (i) there were no amounts outstanding under the KeyBank/DZ Purchase Facility, which allows for maximum outstanding receivable-backed borrowings of $80.0 million on a revolving basis through December 31, 2019, (ii) there was approximately $19.1 million outstanding under the Liberty Bank Facility, which permits maximum outstanding receivable-backed borrowings of $50.0 million on a revolving basis through March 12, 2020, and (iii) there was approximately $9.6 million outstanding under the Pacific Western Bank Facility, which permits maximum outstanding receivable-backed borrowings of $40.0 million on a revolving basis through September 20, 2021, in each case, subject to eligible collateral and the other terms and conditions of each facility, respectively. Thus, subject to the foregoing, approximately $76.7 million in the aggregate was available under the KeyBank/DZ Purchase Facility, Liberty Bank Facility and Pacific Western Facility as a result of the repayments.

Bluegreen’s level of debt and debt service requirements have several important effects on Bluegreen’s operations, including the following: (i) significant debt service cash requirements reduce the funds available for operations and future business opportunities and increase Bluegreen’s vulnerability to adverse economic and industry conditions, as well as conditions in the credit markets, generally; (ii) Bluegreen’s leverage position increases its vulnerability to economic and competitive pressures; (iii) the financial covenants and other restrictions contained in indentures, credit agreements and other agreements relating to Bluegreen’s indebtedness require Bluegreen to meet certain financial tests and may restrict Bluegreen’s ability to, among other things, pay dividends, borrow additional funds, dispose of assets or make investments; and (iv) Bluegreen’s leverage position may limit funds available for acquisitions, working capital, capital expenditures, dividends, and other general corporate purposes. Certain of Bluegreen’s competitors operate on a less leveraged basis and have greater operating and financial flexibility than Bluegreen does.

~~See Note 9 – Debt under Item 1 included in this report for additional information with respect to Bluegreen’s receivable-backed notes payable facilities.~~

Bluegreen maintains various credit facilities with financial institutions which allow Bluegreen to borrow against or sell its VOI notes receivable. As of September 30, ~~2018,~~2019, Bluegreen had the following credit facilities with future availability, all of which are subject to revolving availability terms during the advance period and therefore provide for additional availability as the facility is paid down, subject in each case to compliance with covenants, eligible collateral and applicable terms and conditions during the advance period (dollars in thousands):

See Note 8 under Item 1 included in this report and Note 13 to the Company’s consolidated financial statements included in the 2018 Annual Report for additional information with respect to Bluegreen’s receivable-backed notes payable facilities.

Fifth Third Syndicated Line-of-Credit and Fifth Third Syndicated Term Loan. In December 2016, Bluegreen entered into a $100.0 million syndicated credit facility with Fifth Third Bank, as administrative agent and lead arranger, and certain other bank participants as lenders. In October 2019, Bluegreen amended and restated the facility and increased the facility to $225.0 million. The amended facility includes a ~~$25.0~~$100.0 million term loan (the “Fifth Third Syndicated Term Loan”) with quarterly amortization requirements and a ~~$75.0~~$125.0 million revolving line of credit (the “Fifth Third Syndicated ~~Line-of-Credit”~~Line of Credit”). Amounts borrowed under the amended facility generally bear interest at LIBOR plus ~~2.75%~~2.00% - ~~3.75%~~2.50% depending on Bluegreen’s leverage ratio, are collateralized by certain of Bluegreen’s VOI inventory, sales center buildings, management fees, ~~and~~ short-term receivables, and cash flows from residual interests relating to certain term securitizations, and will mature in ~~December 2021.~~ October 2024. At closing, Bluegreen borrowed the entire $100.0 million term loan and $30.0 million under the revolving line of credit. Proceeds were used to repay the outstanding balance on the existing syndicated credit facility, repay $3.6 million on the existing Fifth Third Bank Note Payable, and pay expenses and fees associated with the amendment, with the remainder to be used for general corporate purposes.

As of September 30, ~~2018,~~2019, outstanding borrowings under the facility (prior to the October 2019 amendment and repayment) totaled ~~$77.8~~$96.1 million, including ~~$22.8~~$21.1 million under the Fifth Third Syndicated Term Loan with an interest rate of ~~5.04%~~5.08%, and ~~$55.0~~$75.0 million under the Fifth Third Syndicated Line of Credit with an interest rate of ~~4.99%~~4.88%.

Bluegreen also has outstanding obligations under various credit facilities and securitizations that have no remaining future availability as the advance periods have expired.

See Note ~~9 – Debt~~8 under Item 1 included in this report and Note 13 to the Company’s consolidated financial statements included in the 2018 Annual Report for additional information with respect to Bluegreen’s other credit facilities ~~terms~~ and ~~covenants.~~

The Company is exposed to market risks in the ordinary course of our business. These risks primarily include interest rate risk and equity price risk. The Company’s exposure to market risk has not materially changed from what was previously disclosed in our ~~2017~~2018 Annual Report.

As of the end of the period covered by this report, our management evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, ~~2018~~2019 to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, ~~2018~~2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except asfor the litigation with respect to Bluegreen described below, there have been no material changes in our material legal proceedings from those disclosed in the “Legal Proceedings” section of our Annual Report on Form 10-K for the year ended December 31, ~~2017 and the Company’s~~2018, as updated in our Quarterly Reports on Form 10-Q for the quarters ended March 31, ~~2018~~2019 and June 30, ~~2018.~~2019.

~~Katja Anderson~~Stephen Potje, Tamela Potje, Sharon Davis, Beafus Davis, Matthew Baldwin, Tammy Baldwin, Arnor Lee, Angela Lee, Gretchen Brown, Paul Brown, Jeremey Estrada, Emily Estrada, Michael Oliver, Carrie Oliver, Russel Walters, elaine Walters, and ~~George Galloway,~~Mike Ericson v. Bluegreen Corporation, Case No.: 2018CA004782, 15 Judicial Circuit Court, Palm Beach County, Florida

~~On May 3, 2018, Katja Anderson and George Galloway, individually and on behalf of all other persons~~ similarly situated, filed a purported class action lawsuit against Bluegreen which asserted claims for alleged violations of the ~~Telephone Consumer~~Florida Deceptive and Unfair Trade Practices ~~Act.~~Act and the Florida False Advertising Law. In the complaint, the plaintiffs alleged the making of false representations in connection with Bluegreen’s sales of VOIs. The ~~plaintiffs claimed that they received multiple telemarketing calls in the spring of 2015 despite their requests not to be called. Plaintiffs sought certification of a~~purported class of individuals in the United States who received more than one telephone call made by us or on our behalf within a 12-month period to a telephone number that was registered with the National Do Not Call Registry for at least 30 days. Plaintiffs sought money damages, attorneys’ fees and a court order requiring Bluegreen to cease all unsolicited telephone calling activities. Bluegreen moved to dismiss theaction lawsuit ~~and on August 13, 2018, this case~~ was dismissed without ~~prejudice.~~prejudice after mediation. However, on or about April 24, 2018, plaintiffs re-filed their individual claims in Palm Beach County Circuit Court. Subsequently, on October 15, 2019, the Court entered an order granting Bluegreen’s summary judgment and dismissed all claims.

On March 15, 2018, Bluegreen Vacations Unlimited (“BVU”), Bluegreen’s wholly-owned subsidiary, entered into an Agreement for Purchase and Sale of Assets with T. Park Central, LLC, O. Park Central, LLC, and New York Urban Ownership Management, LLC (collectively “New York Urban”) (the “Purchase and Sale Agreement”), which

provides for the purchase of The Manhattan Club inventory over a number of years and the assumption of the management contract with The Manhattan Club HOAanticipated to occur in 2021. On October 7, 2019, New York Urban initiated arbitration proceedings against BVU alleging that the The Manhattan Club HOA (of which BVU is a member) is obligated to pay an increased management fee to a New York Urban affiliate and that this higher amount would be the benchmark for BVU’s purchase of the management contract under the parties’ Purchase and Sale Agreement. New York Urban is also seeking damages in the arbitration proceedings in excess of $10.0 million for promissory estoppel and tortious interference. BVU has denied New York Urban’s claims and has declared New York Urban in default under the Purchase and Sale Agreement for, among other things, initiating arbitration in violation of the Purchase and Sale Agreement. BVU has informed New York Urban that it would not proceed with its inventory purchases until New York Urban’s defaults are cured. The Purchase and Sale Agreement provides that, in the event of a breach, the nonbreaching party may either waive the breach or terminate the Purchase and Sale Agreement as its sole and exclusive remedy.

There have been no material changes in the risks and uncertainties that we face from those disclosed in the “Risk Factors” section of our ~~2017~~2018 Annual Report.

Information regarding the Company’s purchase of its Class A Common Stock under its June 2017 repurchase program is set forth in the table below:

Exhibit 31.1Principal Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2Principal Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1*Principal Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2*Principal Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


Florida		59‑2022148
(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification No.)


401 East Las Olas Boulevard, Suite 800
Fort Lauderdale, Florida		33301
(Address of principal executive office)		(Zip Code)


Large accelerated filer [ ]	Accelerated filer[X]	Non-accelerated filer [ ]	Smaller reporting company [ ]
Emerging growth company [ ]




BBX Capital Corporation TABLE OF CONTENTS

Part I.

Item 1.	Financial Statements

	Condensed Consolidated Statements of Financial Condition as of September 30, ~~2018~~2019 and December 31, ~~2017~~2018 - Unaudited	1

	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018 - Unaudited	2

	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2019 and 2018 - Unaudited	3

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2018~~2019 and ~~2017~~2018 - Unaudited	45

	Notes to Condensed Consolidated Financial Statements - Unaudited	67

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	4333

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	7458

Item 4.	Controls and Procedures	7458

Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings	7558

Item 1A.	Risk Factors	7559

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59

Item 6.	Exhibits	7560

	Signatures	7661


BBX Capital Corporation	BBX Capital Corporation			BBX Capital Corporation
Condensed Consolidated Statements of Financial Condition - Unaudited	Condensed Consolidated Statements of Financial Condition - Unaudited			Condensed Consolidated Statements of Financial Condition - Unaudited
(In thousands, except share data)	(In thousands, except share data)			(In thousands, except share data)

			December 31,
		September 30, 2018	2017 *As Adjusted		September 30, 2019	December 31, 2018
ASSETS
Cash and cash equivalents	$	369,512	362,526	$	368,818	366,305
Restricted cash ($17,081 in 2018 and $19,488 in 2017 in variable
interest entities ("VIEs"))		55,710	46,721
Notes receivable, net ($308,221 in 2018 and $279,188 in 2017 in VIEs)		439,484	426,858
Restricted cash ($19,185 in 2019 and $28,400 in 2018 in variable interest entities ("VIEs"))					48,597	54,792
Notes receivable, net ($299,374 in 2019 and $341,975 in 2018 in VIEs)					445,706	439,167
Trade inventory		21,706	23,902		25,126	20,110
Vacation ownership interest ("VOI") inventory		325,532	281,291		346,821	334,149
Real estate ($20,684 in 2018 and $27,828 in 2017 held for sale)		52,579	68,536
Real estate ($12,074 in 2019 and $20,202 in 2018 held for sale)					59,574	54,956
Investments in unconsolidated real estate joint ventures		42,550	51,234		53,739	64,738
Property and equipment, net		133,267	111,929		131,422	139,628
Goodwill		39,482	39,482		37,248	37,248
Intangible assets, net		71,609	70,449		68,342	69,710
Operating lease assets					110,435	-
Other assets		126,336	122,753		121,610	124,217
Total assets	$	1,677,767	1,605,681	$	1,817,438	1,705,020

LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	26,677	31,370	$	29,206	29,537
Deferred income		15,509	16,893		20,323	16,522
Escrow deposits		31,957	21,079		25,149	22,255
Other liabilities		112,133	103,464		128,318	104,441
Receivable-backed notes payable - recourse		97,770	84,697		94,904	76,674
Receivable-backed notes payable - non-recourse (in VIEs)		335,680	336,421		341,856	382,257
Notes payable and other borrowings		197,177	144,114		161,420	200,887
Junior subordinated debentures		136,231	135,414		137,038	136,425
Operating lease liabilities					124,129	-
Deferred income taxes		68,453	47,968		90,695	86,363
Redeemable 5% cumulative preferred stock of $.01 par value; authorized 15,000 shares;
issued and outstanding 10,000 shares in 2018 and 15,000 shares in 2017 with a stated value of $1,000 per share		9,390	13,974
issued and outstanding 10,000 shares in 2019 and 2018 with a stated value of $1,000 per share					9,730	9,472
Total liabilities		1,030,977	935,394		1,162,768	1,064,833
Commitments and contingencies (See Note 11)
Redeemable noncontrolling interest		2,844	2,765		2,229	2,579
Equity:
Preferred stock of $.01 par value; authorized 10,000,000 shares		-	-		-	-
Class A Common Stock of $.01 par value; authorized 150,000,000 shares;
issued and outstanding 79,417,242 in 2018 and 85,689,163 in 2017		794	857
issued and outstanding 76,580,091 in 2019 and 78,379,530 in 2018					766	784
Class B Common Stock of $.01 par value; authorized 20,000,000 shares;
issued and outstanding 13,798,718 in 2018 and 13,963,200 in 2017		138	140
issued and outstanding 14,840,534 in 2019 and 14,840,634 in 2018					148	148
Additional paid-in capital		175,896	229,379		162,183	161,684
Accumulated earnings		374,405	353,384		392,167	385,789
Accumulated other comprehensive income		1,507	1,708		1,420	1,215
Total shareholders' equity		552,740	585,468		556,684	549,620
Noncontrolling interests		91,206	82,054		95,757	87,988
Total equity		643,946	667,522		652,441	637,608
Total liabilities and equity	$	1,677,767	1,605,681	$	1,817,438	1,705,020

* See Note 1 for a summary of adjustments.

See Notes to Condensed Consolidated Financial Statements - Unaudited	See Notes to Condensed Consolidated Financial Statements - Unaudited			See Notes to Condensed Consolidated Financial Statements - Unaudited


BBX Capital Corporation
Condensed Consolidated Statement of Changes in Equity - Unaudited
For the Nine Months Ended September 30, 2018
(In thousands)

	Shares of
	Common Stock			Common Stock				Accumulated
	Outstanding			Amount		Additional		Other	Total	Non-
	Class			Class		Paid-in	Accumulated	Comprehensive	Shareholders'	controlling	Total
	A	B		A	B	Capital	Earnings	Income	Equity	Interests	Equity
As adjusted balance, December 31, 2017 *	85,689	13,963	$	857	140	229,379	353,384	1,708	585,468	82,054	667,522
Cumulative effect from the adoption of ASU 2016-01	-	-		-	-	-	252	(252)	-	-	-
Net income excluding $58 of loss attributable to redeemable noncontrolling interest	-	-		-	-	-	23,802	-	23,802	16,382	40,184
Other comprehensive income	-	-		-	-	-	-	51	51	-	51
Distributions to noncontrolling interests	-	-		-	-	-	-	-	-	(8,263)	(8,263)
Increase in noncontrolling interest from loan foreclosure	-	-		-	-	-	-	-	-	704	704
Purchase of noncontrolling interest	-	-		-	-	(587)	-	-	(587)	329	(258)
Class A Common Stock cash dividends declared	-	-		-	-	-	(2,492)	-	(2,492)	-	(2,492)
Class B Common Stock cash dividends declared	-	-		-	-	-	(541)	-	(541)	-	(541)
Repurchase and retirement of Common Stock from tender offer	(6,486)	-		(65)	-	(60,076)	-	-	(60,141)	-	(60,141)
Repurchase and retirement of Common Stock from vesting of restricted awards	(375)	(137)		(4)	(1)	(3,777)	-	-	(3,782)	-	(3,782)
Conversion of Common Stock from Class B to Class A	27	(27)		1	(1)	-	-	-	-	-	-
Issuance of Common Stock from vesting of restricted stock awards	535	-		5	-	(5)	-	-	-	-	-
Issuance of Common Stock from exercise of options	27	-		-	-	245	-	-	245	-	245
Share-based compensation	-	-		-	-	10,717	-	-	10,717	-	10,717
Balance, September 30, 2018	79,417	13,799	$	794	138	175,896	374,405	1,507	552,740	91,206	643,946
*See Note 1 for a summary of adjustments.
See Notes to Condensed Consolidated Financial Statements - Unaudited




		For the Three Months Ended September 30, 2017
		Prior to Adoption	ASU 2014-09 Adjustments	ASU 2017-05 Adjustments	As Adjusted
Statement of Operations:
Sales of VOIs	$	61,687	766	-	62,453
Cost reimbursements		-	14,097	-	14,097
Cost reimbursements		-	14,097	-	14,097
Cost of VOIs sold		6,284	160	-	6,444
Trade sales		44,877	(159)	-	44,718
Net loss on sales of real estate assets		(18)	-	-	(18)
Cost of trade sales		29,494	2,316	-	31,810
Selling, general and administrative expenses		149,021	(2,179)	-	146,842
Equity in earnings of unconsolidated
real estate joint ventures		2,451	-	(346)	2,105
Income before income taxes		19,686	310	(346)	19,650
Provision for income taxes		(8,195)	(64)	133	(8,126)
Net income		11,491	246	(213)	11,524
Less: Net income attributable to
noncontrolling interests		3,256	142	-	3,398
Net income attributable to shareholders	$	8,235	104	(213)	8,126
Basic earnings per share	$	0.08			0.08
Diluted earnings per share	$	0.08			0.08



		As of and for the Year Ended December 31, 2017
		As Previously Reported	ASU 2014-09 Adjustments	ASU 2017-05 Adjustments	As Adjusted
Statement of Financial Condition:
Notes receivable, net	$	431,801	(4,943)	-	426,858
Investment in unconsolidated
real estate joint ventures		47,275	-	3,959	51,234
Property and equipment, net		112,858	(929)	-	111,929
Other assets		121,824	929	-	122,753
Other liabilities		103,926	-	(462)	103,464
Deferred income		36,311	(19,418)	-	16,893
Deferred income taxes		43,093	3,755	1,120	47,968
Total equity	$	653,501	10,720	3,301	667,522

Statement of Operations:
Sales of VOIs	$	239,662	2,355	-	242,017
Cost reimbursements		-	52,639	-	52,639
Cost reimbursements		-	52,639	-	52,639
Cost of VOIs sold		17,439	240	-	17,679
Trade sales		142,798	(713)	-	142,085
Net gains on sales of assets		2,442	-	(493)	1,949
Cost of trade sales		97,755	8,163	-	105,918
Selling, general and administrative expenses		538,125	(8,423)	-	529,702
Equity in earnings of unconsolidated
real estate joint ventures		14,483	-	(1,942)	12,541
Income before income taxes		93,374	1,662	(2,435)	92,601
Benefit for income taxes		7,223	954	1,525	9,702
Net income		100,597	2,616	(910)	102,303
Less: Net income attributable to
noncontrolling interests		18,402	(24)	-	18,378
Net income attributable to shareholders	$	82,195	2,640	(910)	83,925
Basic earnings per share	$	0.83			0.85
Diluted earnings per share	$	0.79			0.81



		September 30, 2018					December 31, 2017
					Carrying					Carrying
					Amount of					Amount of
		Debt	Interest		Pledged		Debt	Interest		Pledged
		Balance	Rate		Assets		Balance	Rate		Assets
Bluegreen:
2013 Notes Payable	$	33,750	5.50%	$	33,662	$	46,500	5.50%	$	29,403
Pacific Western Term Loan		-	-		-		2,715	6.72%		9,884
Fifth Third Bank Note		3,895	5.08%		7,937		4,080	4.36%		8,071
NBA Line of Credit		-	-		-		5,089	4.75%		15,260
NBA Éilan Loan		24,258	5.35%		34,539		-	-		-
Fifth Third Syndicated
Line of Credit		55,000	4.99%		87,785		20,000	4.27%		75,662
Fifth Third Syndicated
Term Loan		22,813	5.04%		26,702		23,750	4.32%		23,960
Unamortized debt
issuance costs		(1,882)					(1,940)
Total Bluegreen	$	137,834				$	100,194

Other:
Community Development
District Obligations	$	13,263	4.50-6.00%	$	20,956	$	21,435	4.50-6.00%	$	26,803
TD Bank Term Loan and
Line of Credit		9,422	5.13%		(1)		12,890	4.02%		(1)
Anastasia Seller's Note (2)		1,491	5.00%		(1)		1,471	5.00%		(1)
Iberia $50.0 million
Revolving Line of Credit		30,000	5.10%		(3)		-	-		-
Iberia $5.0 million Revolving
Line of Credit		-	-		-		3,820	4.12%		(1)
Banc of America Leasing
& Capital Equipment Note		620	4.75%		(4)		-	-		-
Unsecured Note		3,400	6.00%		(5)		3,400	6.00%		(5)
Other		1,542	5.41%		1,955		1,544	5.25%		1,993
Unamortized debt
issuance costs		(395)					(640)
Total other	$	59,343				$	43,920

Total notes payable and
other borrowings	$	197,177				$	144,114



BBX Capital	$	50,000
Bluegreen		131,196
Renin		3,668
IT'SUGAR		4,000
Total credit availability	$	188,864



		As of
		September 30, 2019
Operating lease assets	$	110,435
Operating lease liabilities	$	124,129
Weighted average remaining lease term (years)		6.5
Weighted average discount rate (1)		5.33	%



		For the Three	For the Nine
		Months Ended	Months Ended
		September 30, 2019	September 30, 2019
Fixed lease costs	$	7,300	21,677
Short-term lease costs		1,377	3,718
Variable lease costs		2,237	6,717
Total operating lease costs	$	10,914	32,112



Period Ending December 31,
2019	$	6,735
2020		25,671
2021		24,484
2022		22,343
2023		19,145
After 2023		56,736
Total lease payments		155,114
Less: interest		30,985
Present value of lease liabilities	$	124,129

	1

			Weighted
	Unvested		Average
	Restricted		Grant Date
	Stock		Fair Value
Unvested balance outstanding, beginning of period	4,994,515	$	3.39
Granted	1,487,051		8.70
Vested	(1,307,898)		3.36
Forfeited	-		-
Unvested balance outstanding, end of period	5,173,668	$	4.92



Level 1:	Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2:	Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

Level 3:	Unobservable inputs for the asset or liability



	September 30,		December 31,
	2018		2017		September 30,		December 31,
FICO Score					2019		2018
700+	56.00	%	54.00	%	59.00	%	57.00	%
600-699	40.00		41.00		38.00		39.00
<699	3.00		3.00
<600					2.00		3.00
No score (1)	1.00		2.00		1.00		1.00
Total	100.00	%	100.00	%	100.00	%	100.00	%



				Fair Value Measurements Using						Fair Value Measurements Using
				Quoted prices						Quoted prices
		Carrying		in Active	Significant			Carrying		in Active	Significant
		Amount	Fair Value	Markets	Other	Significant		Amount	Fair Value	Markets	Other	Significant
		As of	As of	for Identical	Observable	Unobservable		As of	As of	for Identical	Observable	Unobservable
		September 30,	September 30,	Assets	Inputs	Inputs		September 30,	September 30,	Assets	Inputs	Inputs
		2018	2018	(Level 1)	(Level 2)	(Level 3)		2019	2019	(Level 1)	(Level 2)	(Level 3)
Financial assets:
Cash and cash equivalents	$	369,512	369,512	369,512	-	-	$	368,818	368,818	368,818	-	-
Restricted cash		55,710	55,710	55,710	-	-		48,597	48,597	48,597	-	-
Loans receivable (1)		6,292	7,437	-		7,437
Notes receivable, net		439,484	542,000	-		542,000		445,706	587,000	-		587,000
Financial liabilities:
Receivable-backed notes payable	$	433,450	431,964	-		431,964	$	436,760	456,600	-		456,600
Notes payable and other borrowings		197,177	201,460	-		201,460		161,420	169,366	-		169,366
Junior subordinated debentures		136,231	142,000	-		142,000		137,038	149,500	-		149,500
Redeemable 5% cumulative preferred stock		9,390	9,053	-		9,053		9,730	9,538	-		9,538



	For the Twelve Months Ended September 30,		For the Twelve Months Ended September 30,
	2018	2017	2019	2018
Average annual default rates	8.41%	8.07%	8.59%	8.41%

	As of September 30,		As of September 30,
	2018	2017	2019	2018
Delinquency rates	2.79%	3.06%	3.31%	2.79%



		Payments Due by Period							Payments Due by Period
						Unamortized							Unamortized
						Debt							Debt
		Less than	1 — 3	4 — 5	After 5	Issuance			Less than	1 — 3	4 — 5	After 5	Issuance
Contractual Obligations		1 year	Years	Years	Years	Costs	Total		1 year	Years	Years	Years	Costs	Total

Receivable-backed notes payable	$	-	6,045	111,190	321,209	(4,994)	433,450	$	-	14,503	94,163	333,609	(5,515)	436,760
Notes payable and other
borrowings		66,821	31,315	87,304	14,014	(2,277)	197,177
Notes payable and other borrowings									14,273	111,863	7,591	29,202	(1,509)	161,420
Jr. subordinated debentures		-	-	-	177,129	(40,898)	136,231		-	-	-	177,129	(40,091)	137,038
Redeemable 5% cumulative preferred stock									5,000	5,000	-	-	(270)	9,730
Noncancelable operating leases		26,678	45,835	37,215	37,760	-	147,488		6,735	50,155	41,488	56,736	-	155,114
Bass Pro settlement agreement									4,000	8,000	8,000	-	-	20,000
Total contractual obligations		93,499	83,195	235,709	550,112	(48,169)	914,346		30,008	189,521	151,242	596,676	(47,385)	920,062

Interest Obligations (1)
Receivable-backed notes payable		17,258	34,369	29,941	79,103	-	160,671		17,683	35,109	29,603	93,671	-	176,066
Notes payable and other
borrowings		8,989	12,493	3,523	5,283	-	30,288
Notes payable and other borrowings									7,736	10,577	3,400	21,643	-	43,356
Jr. subordinated debentures		12,043	24,084	24,084	149,538	-	209,749		11,977	23,954	23,954	136,694	-	196,579
Total contractual interest		38,290	70,946	57,548	233,924	-	400,708		37,396	69,640	56,957	252,008	-	416,001
Total contractual obligations	$	131,789	154,141	293,257	784,036	(48,169)	1,315,054	$	67,404	259,161	208,199	848,684	(47,385)	1,336,063



		Borrowing Limit as of September 30, 2018		Outstanding Balance as of September 30, 2018		Availability as of September 30, 2018		Advance Period Expiration; Borrowing Maturity as of September 30, 2018	Borrowing Rate; Rate as of September 30, 2018		Borrowing Limit as of September 30, 2019		Outstanding Balance as of September 30, 2019		Availability as of September 30, 2019		Advance Period Expiration; Borrowing Maturity as of September 30, 2019	Borrowing Rate; Rate as of September 30, 2019
Liberty Bank Facility	$	50,000	$	40,392	$		9,608	March 2020; March 2023	Prime Rate; floor of 4.00%; 5.00%	$	50,000	$	28,247	$		21,753	March 2020; March 2023	Prime Rate; floor of 4.00%; 5.25%
NBA Receivables Facility		70,000		40,297			29,703	September 2020; March 2025	30 day LIBOR + 2.75%; floor of 3.50%; 4.83%		70,000		35,809			34,191	September 2020; March 2025	30 day LIBOR + 2.75%; floor of 3.50%; 4.79%
Pacific Western Facility		40,000		17,081			22,919	September 2021; September 2024	30 day LIBOR+2.75% to 3.00%; 5.84%		40,000		30,848			9,152	September 2021; September 2024	30 day LIBOR+2.75% to 3.00%; 4.92%
KeyBank/DZ Purchase Facility		80,000		49,733			30,267	December 2019; December 2022	30 day LIBOR+2.75%; 5.01%(1)		80,000		19,035			60,965	December 2019; December 2022	30 day LIBOR+2.75%; 4.84% (1)
Quorum Purchase Facility		50,000		39,739			10,261	June 2020; December 2032	(2)		50,000		44,865			5,135	June 2020; December 2032	(2)
	$	290,000	$	187,242	$		102,758			$	290,000	$	158,804	$		131,196



Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (1)
July 1 – July 31, 2019	-	-	-	3,077,229 shares (or approximately $23,147,000)
August 1 – August 31, 2019	-	-	-	3,077,229 shares (or approximately $23,147,000)
September 1 - September 30, 2019	1,398,361	$5.00	1,398,361	1,678,868 shares (or approximately $16,143,000)

Total	1,398,361	$5.00	1,398,361	1,678,868 shares (or approximately $16,143,000)


101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document