PART I – FINANCIAL INFORMATION

Item 1. Financial Statements


BBX Capital Corporation	BBX Capital Corporation			BBX Capital Corporation
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)


		March 31, 2019	December 31, 2018			September 30, 2019	December 31, 2018
ASSETS
Cash and cash equivalents	$	296,317	366,305		$	368,818	366,305
Restricted cash ($20,714 in 2019 and $28,400 in 2018 in variable
interest entities ("VIEs"))		45,357	54,792
Notes receivable, net ($318,111 in 2019 and $341,975 in 2018 in VIEs)		435,629	439,167
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		20,723	20,110			25,126	20,110
Vacation ownership interest ("VOI") inventory		342,386	334,149			346,821	334,149
Real estate ($19,766 in 2019 and $20,202 in 2018 held for sale)		53,616	54,956
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		67,382	64,738			53,739	64,738
Property and equipment, net		143,391	139,628			131,422	139,628
Goodwill		37,248	37,248			37,248	37,248
Intangible assets, net		69,182	69,710			68,342	69,710
Operating lease assets		113,536	-			110,435	-
Other assets		135,909	124,217			121,610	124,217
Total assets	$	1,760,676	1,705,020		$	1,817,438	1,705,020

LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	24,808	29,537		$	29,206	29,537
Deferred income		17,051	16,522			20,323	16,522
Escrow deposits		20,395	22,255			25,149	22,255
Other liabilities		91,159	104,441			128,318	104,441
Receivable-backed notes payable - recourse		74,744	76,674			94,904	76,674
Receivable-backed notes payable - non-recourse (in VIEs)		363,183	382,257			341,856	382,257
Notes payable and other borrowings		169,041	200,887			161,420	200,887
Junior subordinated debentures		136,623	136,425			137,038	136,425
Operating lease liabilities		124,472	-			124,129	-
Deferred income taxes		86,576	86,363			90,695	86,363
Redeemable 5% cumulative preferred stock of $.01 par value; authorized 15,000 shares;
issued and outstanding 10,000 shares in 2019 and 2018 with a stated value of $1,000 per share		9,556	9,472			9,730	9,472
Total liabilities		1,117,608	1,064,833			1,162,768	1,064,833
Commitments and contingencies (See Note 11)
Redeemable noncontrolling interest		2,077	2,579			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 78,379,630 in 2019 and 78,379,530 in 2018		784	784
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 14,840,534 in 2019 and 14,840,634 in 2018		148	148			148	148
Additional paid-in capital		164,733	161,684			162,183	161,684
Accumulated earnings		383,855	385,789			392,167	385,789
Accumulated other comprehensive income		1,344	1,215			1,420	1,215
Total shareholders' equity		550,864	549,620			556,684	549,620
Noncontrolling interests		90,127	87,988			95,757	87,988
Total equity		640,991	637,608			652,441	637,608
Total liabilities and equity	$	1,760,676	1,705,020		$	1,817,438	1,705,020


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


BBX Capital Corporation	BBX Capital Corporation			BBX Capital Corporation
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 March 31,			For the Three Months Ended September 30,		For the Nine Months Ended September 30,
		2019	2018		2019	2018	2019	2018
Revenues:
Sales of VOIs	$	51,731	56,141	$	66,318	70,698	186,351	195,412
Fee-based sales commissions		45,212	45,854		60,478	61,641	161,033	167,581
Other fee-based services		29,568	28,024		33,744	31,057	94,015	89,472
Cost reimbursements		20,236	16,200		21,111	16,900	58,705	47,157
Trade sales		45,984	38,400		47,660	43,803	138,705	126,114
Sales of real estate inventory		4,236	6,409		370	7,478	5,030	17,138
Interest income		21,415	21,917		21,797	21,157	64,730	63,738
Net gains on sales of real estate assets		1,332	4,070		399	-	11,395	4,802
Other revenue		1,343	1,049		3,237	1,669	7,540	4,278
Total revenues		221,057	218,064		255,114	254,403	727,504	715,692
Costs and Expenses:
Cost of VOIs sold		3,848	1,812		3,121	11,237	17,541	19,838
Cost of other fee-based services		22,868	17,411		23,746	19,937	66,538	53,983
Cost reimbursements		20,236	16,200		21,111	16,900	58,705	47,157
Cost of trade sales		32,290	27,916		31,860	28,957	94,978	88,045
Cost of real estate inventory sold		2,643	4,247		-	4,655	2,643	11,283
Interest expense		11,148	9,191		11,870	11,130	34,679	30,869
Recoveries from loan losses, net		(961)	(4,813)		(1,821)	(443)	(4,206)	(7,258)
Impairment losses		618	232		4,030	193	6,786	549
Selling, general and administrative expenses		121,993	124,898		148,549	143,559	448,510	410,359
Total costs and expenses		214,683	197,094		242,466	236,125	726,174	654,825
Equity in net (losses) earnings of unconsolidated
real estate joint ventures		(17)	1,280
Foreign exchange gain		5	52
Equity in net earnings of unconsolidated real estate joint ventures					28,534	373	37,276	1,165
Foreign exchange gain (loss)					-	76	(24)	91
Income before income taxes		6,362	22,302		41,182	18,727	38,582	62,123
Provision for income taxes		(1,724)	(6,600)		(14,682)	(6,742)	(15,068)	(21,997)
Net income		4,638	15,702		26,500	11,985	23,514	40,126
Less: Net income attributable to noncontrolling interests		3,139	4,560		4,112	5,806	11,275	16,324
Net income attributable to shareholders	$	1,499	11,142	$	22,388	6,179	12,239	23,802

Basic earnings per share	$	0.02	0.11	$	0.24	0.07	0.13	0.25
Diluted earnings per share	$	0.02	0.11	$	0.24	0.06	0.13	0.24
Basic weighted average number of common shares outstanding		93,220	99,652		92,587	93,193	93,002	95,722
Diluted weighted average number of common and
common equivalent shares outstanding		94,487	102,628
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	$	0.0125	0.010	$	0.0125	0.010	0.0375	0.030
Cash dividends declared per Class B common share	$	0.0125	0.010	$	0.0125	0.010	0.0375	0.030

Net income	$	4,638	15,702	$	26,500	11,985	23,514	40,126
Other comprehensive income (loss), net of tax:
Unrealized gain on securities available for sale		28	-
Other comprehensive income, net of tax:
Unrealized gain (loss) on securities available for sale					16	(11)	54	(11)
Foreign currency translation adjustments		101	(28)		(75)	66	151	62
Other comprehensive income (loss), net		129	(28)
Other comprehensive (loss) income, net					(59)	55	205	51
Comprehensive income, net of tax		4,767	15,674		26,441	12,040	23,719	40,177
Less: Comprehensive income attributable
to noncontrolling interests		3,139	4,560
Less: Comprehensive income attributable to noncontrolling interests					4,112	5,806	11,275	16,324
Comprehensive income attributable to shareholders	$	1,628	11,114	$	22,329	6,234	12,444	23,853


See Notes to 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 Changes in Equity - Unaudited
For the Three Months Ended March 31, 2018 and 2019
(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 $221 of loss attributable to redeemable noncontrolling interest
-
-

-
-
-
11,142
-
11,142 4,781 15,923
Other comprehensive income
-
-

-
-
-
-
(28) (28)
-
(28)
Distributions to noncontrolling interests
-
-

-
-
-
-
-
-
(1,121) (1,121)
Increase in noncontrolling interest from loan foreclosure
-
-

-
-
-
-
-
-
704 704
Class A Common Stock cash dividends declared
-
-

-
-
-
(857)
-
(857)
-
(857)
Class B Common Stock cash dividends declared
-
-

-
-
-
(197)
-
(197)
-
(197)
Conversion of common stock from Class B to Class A
20 (20)

-
-
-
-
-
-
-
-
Share-based compensation
-
-

-
-
3,452
-
-
3,452
-
3,452
Balance, March 31, 2018
85,709 13,943
$
857 140 231,783 364,772 1,428 598,980 86,418 685,398

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 $220 of loss attributable to redeemable noncontrolling interest
-
-

-
-
-
1,499
-
1,499 3,359 4,858
Other comprehensive income
-
-

-
-
-
-
129 129
-
129
Distributions to noncontrolling interests
-
-

-
-
-
-
-
-
(1,220) (1,220)
Class A Common Stock cash dividends declared
-
-

-
-
-
(989)
-
(989)
-
(989)
Class B Common Stock cash dividends declared
-
-

-
-
-
(242)
-
(242)
-
(242)
Share-based compensation
-
-

-
-
3,049
-
-
3,049
-
3,049
Balance, March 31, 2019
78,379 14,841
$
784 148 164,733 383,855 1,344 550,864 90,127 640,991

See Notes to Condensed Consolidated Financial Statements - Unaudited



BBX Capital Corporation
Condensed Consolidated Statements of Changes in Equity - Unaudited
For the Three 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, June 30, 2018	79,257	13,936	$	793	139	175,002	370,262	1,452	547,648	91,629	639,277
Net income excluding $208 of income attributable to redeemable noncontrolling interest	-	-		-	-	-	6,179	-	6,179	5,598	11,777
Other comprehensive income	-	-		-	-	-	-	55	55	-	55
Distributions to noncontrolling interests	-	-		-	-	-	-	-	-	(6,021)	(6,021)
Class A common stock cash dividends declared	-	-		-	-	-	(809)	-	(809)	-	(809)
Class B common stock cash dividends declared	-	-		-	-	-	(179)	-	(179)	-	(179)
Purchase and retirement of common stock	-	-		-	-	(17)	-	-	(17)	-	(17)
Purchase and retirement of common stock from vesting of restricted stock awards	(375)	(137)		(4)	(1)	(3,777)	-	-	(3,782)	-	(3,782)
Issuance of common stock from vesting of restricted stock awards	535	-		5	-	(5)	-	-	-	-	-
Share-based compensation	-	-		-	-	3,645	-	-	3,645	-	3,645
Balance, September 30, 2018	79,417	13,799	$	794	138	174,848	375,453	1,507	552,740	91,206	643,946

Balance, June 30, 2019	77,978	14,841	$	780	148	166,015	370,983	1,479	539,405	92,948	632,353
Net income excluding $82 of income attributable to redeemable noncontrolling interest	-	-		-	-	-	22,388	-	22,388	4,030	26,418
Purchase and retirement of common stock	(1,398)	-		(14)	-	(7,001)	-	-	(7,015)	-	(7,015)
Other comprehensive loss	-	-		-	-	-	-	(59)	(59)	-	(59)
Distributions to noncontrolling interests	-	-		-	-	-	-	-	-	(1,221)	(1,221)
Class A common stock cash dividends declared	-	-		-	-	-	(962)	-	(962)	-	(962)
Class B common stock cash dividends declared	-	-		-	-	-	(242)	-	(242)	-	(242)
Share-based compensation	-	-		-	-	3,169	-	-	3,169	-	3,169
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
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
Consolidated Statements of Cash Flows - Unaudited
(In thousands)

For the Three Months Ended March 31,

2019

2018

Financing activities:

Repayments of notes payable and other borrowings

(75,493)

(53,906)

Proceeds from notes payable and other borrowings

14,791

26,866

Payments for debt issuance costs

(115)

(663)

Payments of interest on redeemable 5% cumulative preferred stock

(125)

(188)

Dividends paid on Common Stock

(934)

(779)

Distributions to noncontrolling interests

(1,220)

(1,121)

Net cash used in financing activities

(63,096)

(29,791)

Decrease in cash, cash equivalents and restricted cash

(79,423)

(10,916)

Cash, cash equivalents and restricted cash at beginning of period

421,097

409,247

Cash, cash equivalents and restricted cash at end of period
$
341,674

398,331

Supplemental cash flow information:

Interest paid on borrowings
$
9,745

8,059

Income taxes paid

862

283

Supplementary disclosure of non-cash investing and financing activities:

Construction funds receivable transferred to real estate

2,288

3,704

Operating lease assets recognized upon adoption of ASC 842

113,183

-

Operating lease liability recognized upon adoption of ASU 842

123,240

-

Operating lease assets obtained in exchange for new operating lease liabilities

5,864

-

Reduction in redeemable 5% cumulative preferred stock

-

(4,862)

Reduction in note receivable from holder of

redeemable 5% cumulative preferred stock

-

(5,000)

Increase in other assets upon issuance of Community

Development District Bonds

8,110

-

Assumption of Community Development District Bonds by developer

1,035

1,792

Reconciliation of cash, cash equivalents and restricted cash:

Cash and cash equivalents

296,317

349,945

Restricted cash

45,357

48,386

Total cash, cash equivalents, and restricted cash
$
341,674

398,331

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 ~~March 31,~~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 ~~March 31,~~September 30, 2019; the condensed consolidated results of operations and comprehensive income of the Company for the three and nine months ended ~~March 31,~~September 30, 2019 and 2018; the condensed consolidated changes in equity of the Company for the three and nine months ended ~~March 31,~~September 30, 2019 and 2018; and the condensed consolidated cash flows of the Company for the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and 2018. Operating results for the three and nine months ended ~~March 31,~~September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 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, 2018 (the “2018 Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on March 12, 2019.

The condensed consolidated financial statements include the accounts 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.

Principal Investments

The Company’s principal investments include Bluegreen Vacations Corporation (“Bluegreen” or “Bluegreen Vacations”), BBX Capital Real Estate LLC (“BBX Capital Real Estate”), Renin Holdings, LLC (“Renin”), and IT’SUGAR, LLC (“IT’SUGAR”).

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 the Bluegreen Vacation Club (“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 Bluegreen’s Vacation Club have the right to use a limited

number of units in connection with their VOI ownership). Bluegreen markets, sells, and manages VOIs in resorts, which are generally located in popular, high-volume, “drive-to” vacation destinations, including Orlando, Las Vegas, Myrtle Beach, Charleston, and New Orleans, among others. Through its points-based system, the approximately ~~217,000~~219,000 owners in Bluegreen’s Vacation Club have the flexibility to stay at units available at its resorts and have access to over ~~11,000~~11,350 other hotels and resorts through partnerships and exchange networks. 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 services to third party developers. Bluegreen also earns fees byfor providing management services to the Vacation Club and homeowners’ associations (“HOAs”), mortgage servicing, VOI title services, reservation services, and construction design and development services. In addition, Bluegreen provides financing to qualified VOI purchasers, which generates significant interest income.

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 ~~also~~ 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. During the three months ended March 31, 2019 and 2018, Renin’s revenues include $12.1 million and $8.6 million, respectively, of trade sales to two major customers and their affiliates and $4.4 million and $4.6 million, respectively, of revenues generated outside the United States. As of March 31, 2019 and 2018, Renin’s properties and equipment located outside the United States totaled $2.2 million.

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 ~~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 across the United States.

In addition to its principal investments, the Company has ~~other~~ investments in various operating businesses, including ~~restaurant locations throughout Florida and~~ companies in the confectionery industry.

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. In connection with the transfer of the seven restaurant locations to MOD Pizza, the Company recognized an aggregate impairment loss of $4.0 million related to the disposal group, which included property and equipment, intangible assets, and net lease liabilities, during the three months ended September 30, 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 three restaurant locations. Accordingly, the Company recognized $6.7 million of impairment losses associated with its investment in MOD Pizza restaurant locations during the 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, 2019:

ASU No. 2016-02 – Leases (Topic 842). This standard, as subsequently amended and clarified by various ASUs, requires lessees to recognize assets and liabilities for the rights and obligations created by leases of assets. For income statement purposes, the standard retains a dual model which requires 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 standard, intended to provide greater insight into the amount, timing, and uncertainty of cash flows arising from leases.

The Company adopted the standard on January 1, 2019 and applied the transition guidance as of the date of adoption under the current-period adjustment method. As a result, the Company recognized right-of-use assets and lease liabilities associated with its leases on January 1, 2019, with a cumulative-effect adjustment to the opening balance of accumulated earnings, while the 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 as a single lease component for lease classification, recognition, and measurement purposes.

Upon adoption of the standard on January 1, 2019, the Company recognized a lease liability of $123.2 million and a right-of-use asset of $113.2 million. The difference between the lease liability and right-of-use asset primarily reflects the reclassification of 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 statement of operations and comprehensive income or statement of cash flows. See Note 12 for additional information regarding the Company’s 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 ~~March 31,~~September 30, 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 expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating its allowance for credit losses. In addition, the standard 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. The Company is currently evaluating the impact that 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 will be effective for the Company 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. 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 ~~March 31,~~September 30, 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 ~~three~~nine months ended ~~March 31,~~September 30, 2019 and 2018 were ~~$2.1~~$8.4 million and ~~$1.7~~$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):



		March 31,	December 31,		September 30,	December 31,
		2019	2018		2019	2018
Restricted cash	$	20,714	28,400	$	19,185	28,400
Securitized notes receivable, net		318,111	341,975		299,374	341,975
Receivable backed notes payable - non-recourse		363,183	382,257		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 ~~provides~~sets forth information 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 14.9% and 15.1% at ~~both March 31,~~September 30, 2019 and December 31, ~~2018. All of~~2018, respectively. Bluegreen’s VOI notes receivable bear interest at fixed ~~rates. Bluegreen’s VOI notes receivable~~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 significant concentrations of credit risk with any individual counterparty or groups of counterparties. In estimating 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 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 the time of ~~origination was as follows:~~

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

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 ~~March 31,~~September 30, 2019, the Company had equity interests in unconsolidated real estate joint ventures involved in the development of multifamily apartment and townhome communities, as well as single-family master planned communities. In addition, the Company owns a 50% equity interest in ~~The~~the Altman Companies, ~~LLC,~~ 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 2 for information regarding the Company’s investments in consolidated ~~variable interest entities.~~VIEs.

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

~~During~~See Note 10 to the Company’s consolidated financial statements included in the 2018 Annual Report for the Company’s accounting policies relating to its investments in unconsolidated real estate joint 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,~~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 ~~community~~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 ~~March 31,~~September 30, 2019, the Company had funded ~~$1.5~~$1.9 million of its expected capital contribution of $4.0 million.

~~See Note 10~~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 ~~Company’s consolidated financial statements included~~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 ~~2018 Annual Report~~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 ~~Company’s accounting policies relating to its investments~~development of a potential multifamily apartment community in ~~real estate joint ventures.~~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):



		March 31, 2019					December 31, 2018					September 30, 2019					December 31, 2018
					Carrying					Carrying					Carrying					Carrying
					Amount of					Amount of					Amount of					Amount of
		Debt	Interest		Pledged		Debt	Interest		Pledged		Debt	Interest		Pledged		Debt	Interest		Pledged
		Balance	Rate		Assets		Balance	Rate		Assets		Balance	Rate		Assets		Balance	Rate		Assets
Bluegreen:
2013 Notes Payable	$	22,500	5.50%	$	22,963	$	28,125	5.50%	$	22,878	$	-	-	$	-	$	28,125	5.50%	$	22,878
Fifth Third Bank Note		3,772	5.49%		7,847		3,834	5.34%		7,892		3,649	5.11%		7,757		3,834	5.34%		7,892
NBA Éilan Loan		23,591	5.74%		35,267		25,603	5.60%		35,615		19,974	5.34%		32,821		25,603	5.60%		35,615
Fifth Third Syndicated
Line of Credit		55,000	5.24%		94,774		55,000	5.27%		92,415		75,000	4.88%		102,431		55,000	5.27%		92,415
Fifth Third Syndicated
Term Loan		22,031	5.25%		29,811		22,500	5.37%		27,724		21,094	5.08%		28,809		22,500	5.37%		27,724
Unamortized debt
issuance costs		(1,458)					(1,671)					(672)					(1,671)
Total Bluegreen	$	125,436				$	133,391				$	119,045				$	133,391

Other:
Community Development
District Obligations	$	29,432	4.25-6.00%	$	39,727	$	24,583	4.25-6.00%	$	35,155	$	29,432	4.25-6.00%	$	44,771	$	24,583	4.25-6.00%	$	35,155
TD Bank Term Loan and
Line of Credit		8,059	5.54%		(1)		8,117	5.47%		(1)		8,394	5.24%		(1)		8,117	5.47%		(1)
Iberia $50.0 million
Revolving Line of Credit		-	-		(2)		30,000	5.35%		(2)		-	-		(2)		30,000	5.35%		(2)
Banc of America Leasing
& Capital Equipment Note		506	4.75%		(3)		555	4.75%		(3)		406	4.75%		(3)		555	4.75%		(3)
Banc of America Revolving
Line of Credit		1,600	4.00%		(1)		-	-		-
Unsecured Note		3,400	6.00%		(4)		3,400	6.00%		(4)
Other		1,497	5.25%		1,930		1,507	5.25%		1,968
Unsecured Note (4)												3,400	6.00%		-		3,400	6.00%
Other (4)												1,580	5.89%		1,905		1,507	5.25%		1,968
Unamortized debt
issuance costs		(889)					(666)					(837)					(666)
Total other	$	43,605				$	67,496				$	42,375				$	67,496

Total notes payable and
other borrowings	$	169,041				$	200,887				$	161,420				$	200,887

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

~~There were no new~~New debt issuances orand significant changes related to the above listed notes payable ~~except for the~~and other borrowings are detailed below.

In February 2019, ~~issuance of~~the Meadow View at Twin Creeks Community Development District issued $8.1 million of community development bonds ~~by the Meadow View at Twin Creeks CDD~~ in order to fund the infrastructure improvements for Phase II of the Company’s Beacon Lake Community development and repay a portion of the bonds previously issued in 2016 in connection with Phase I of the development. The bonds issued in February 2019 have fixed interest rates ranging from 5.20% to 5.80% and 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 time that it sells developed lots in the 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 2019, Bluegreen repaid in full its 2013 Notes Payable. Accordingly, the related unamortized debt issuance costs associated with the notes of $0.4 million were written off in the third quarter of 2019.

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 “Fifth Third Syndicated Line of Credit”). Amounts borrowed under the amended facility generally bear interest at LIBOR plus 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 certain term securitizations, and will mature in 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.

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



		March 31, 2019					December 31, 2018					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	$	19,766	5.50%	$	24,730	$	17,654	5.25%	$	22,062	$	28,247	5.25%	$	34,545	$	17,654	5.25%	$	22,062
NBA Receivables Facility		43,255	5.25%		53,130		48,414	5.27%		57,805		35,809	4.79%		43,706		48,414	5.27%		57,805
Pacific Western Facility		11,723	5.50%		15,185		10,606	5.52%		13,730		30,848	4.92%		37,954		10,606	5.52%		13,730
Total	$	74,744		$	93,045	$	76,674		$	93,597	$	94,904		$	116,205	$	76,674		$	93,597

Receivable-backed notes
payable - non-recourse:
KeyBank/DZ Purchase Facility		7,297	5.23%		8,754		-	-		-		19,035	4.84%		23,390		-	-		-
Quorum Purchase Facility		36,824	4.75-5.50%		41,867		40,074	4.75-5.50%		45,283		44,865	4.75-5.50%		50,337		40,074	4.75-5.50%		45,283
2012 Term Securitization		13,059	2.94%		15,237		15,212	2.94%		16,866		9,986	2.94%		11,558		15,212	2.94%		16,866
2013 Term Securitization		24,633	3.20%		27,411		27,573	3.20%		29,351		20,090	3.20%		21,995		27,573	3.20%		29,351
2015 Term Securitization		40,262	3.02%		44,697		44,230	3.02%		47,690		34,093	3.02%		36,676		44,230	3.02%		47,690
2016 Term Securitization		60,460	3.35%		69,442		63,982	3.35%		72,590		52,632	3.35%		58,817		63,982	3.35%		72,590
2017 Term Securitization		78,718	3.12%		91,712		83,513	3.12%		95,877		69,763	3.12%		79,551		83,513	3.12%		95,877
2018 Term Securitization		108,259	4.02%		122,187		114,480	4.02%		125,916		96,907	4.02%		109,599		114,480	4.02%		125,916
Unamortized debt issuance costs		(6,329)			-		(6,807)			-		(5,515)			-		(6,807)			-
Total	$	363,183		$	421,307	$	382,257		$	433,573	$	341,856		$	391,923	$	382,257		$	433,573
Total receivable-backed debt	$	437,927		$	514,352	$	458,931		$	527,170	$	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 ~~three~~nine months ended ~~March 31,~~September 30, 2019. See Note 13 to the Company’s consolidated financial statements included in the 2018 Annual Report for additional information regarding the above listed receivable-backed notes payable facilities.

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 ~~March 31,~~September 30, 2019 and December 31, 2018 was ~~$0.4~~$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.

All of the junior subordinated debentures were eligible for redemption by Woodbridge and Bluegreen, as applicable, as of ~~March 31,~~September 30, 2019 and December 31, 2018.

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

As of ~~March 31,~~September 30, 2019, BBX Capital and its subsidiaries were in compliance with all financial debt covenants under ~~its~~their debt ~~instruments.~~instruments, as amended.

Amounts available under credit facilities for BBX Capital and its ~~principal investments~~subsidiaries as of ~~March 31,~~September 30, 2019 were as follows (in thousands):

The amounts available under the Company’s credit facilities are 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.

~~The Company’s effective income tax rate was approximately 35% and 33% during the three months ended March 31, 2019 and 2018, respectively.~~

The Company’s effective income tax rate for the three months ended March 31, 2019 and 2018 was higher than the expected federal income tax rate of 21% due to nondeductible executive compensation and state income taxes.

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 and 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 also receives ~~individual~~ consumer complaints and complaints, ~~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.

There were no material pending legal proceedings against BBX Capital or its subsidiaries other than proceedings against Bluegreen as of ~~March 31,~~September 30, 2019.

~~On August 24, 2016, Whitney Paxton and Jeff Reeser filed a lawsuit against~~indirectly through Bluegreen Vacations Unlimited ~~Inc.~~ (“BVU”), aits 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 right to market and ~~certain~~sell vacation packages at kiosks in each of ~~its employees (collectively,~~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 ~~“Defendants”), seeking to establish a class action~~Bass Pro marketing channels and advertising materials as of ~~former and current employees of BVU and alleging violations of plaintiffs’ rights under~~30 days from the ~~Fair Labor Standards Act of 1938 (the “FLSA”) and breach of contract. The lawsuit also sought damages in the amount~~date of the ~~unpaid compensation owed~~notice unless Bluegreen cured the alleged breaches to ~~the plaintiffs. The court granted preliminary approval of class action in September 2017~~Bass Pro’s satisfaction. While Bluegreen responded to ~~conditionally certify collective action and facilitate notice to potential class members be granted~~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 ~~employees~~commissions due it under the parties’ marketing agreement, improperly charged a tour generation fee, and ~~denied as~~that its conduct in the 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 ~~others. In February~~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 resolved the ~~parties~~litigation and reinstated and amended the marketing agreement. Pursuant to the terms of the settlement agreement, Bass Pro agreed to ~~settle~~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 ~~matter for an immaterial amount. It is expected that the court will approve~~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 2019 under the marketing agreement. Additionally, in lieu of the previous commission arrangement, Bluegreen agreed to pay Bass Pro a fixed annual fee of $70,000 for each Bass Pro and 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 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 ~~lawsuit after~~litigation. Bluegreen accrued for the net present value of the above payments required by the settlement ~~documents~~agreement, plus attorneys’ fees and costs, 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, 2019. As of September 30, 2019, $17.6 million was accrued for the remaining payments required by the settlement agreement, which are ~~executed.~~ reflected in other liabilities in the Company’s condensed consolidated statement of financial condition.

As of September 30, 2019, Bluegreen sold vacation packages in 68 of Bass Pro retail stores and 7 Cabela’s retail stores. During the nine months ended September 30, 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 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 ~~asserts~~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 the ability to use points for stays or other experiences with other vacation providers, 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.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 Court entered an order granting summary judgment in favor of Bluegreen ~~intends to vigorously defend the action.~~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 complaint, as amended during June 2018, include alleged

failures to pay overtime and wages at termination and to provide meal and rest periods, as well as claims relating to non-compliant wage statements and unreimbursed business expenses; and a claim under the Private Attorney’s General Act. Plaintiffs ~~seek~~sought to represent a class of approximately 660 hourly, non-exempt employees who worked in the state of California since March 1, 2014. ~~An initial case management conference was held,~~In April 2019, the parties mediated and ~~discovery was stayed pending completion of mediation. BVU intends~~agreed to ~~file a motion enforcing pre-dispute arbitration agreements, should~~settle the matter ~~not settle,~~for an immaterial amount. It is expected that the court will approve the settlement and ~~to challenge class certification.~~the dismissal of the lawsuit after the settlement 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 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 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 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.~~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, ~~money~~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. ~~This matter was removed~~

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 ~~federal court,~~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 ~~plaintiffs~~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 ~~seeking to remand~~cured. The Purchase and Sale Agreement provides that, in the ~~matter to state court. Bluegreen has opposed their motion to remand~~event of a breach, the nonbreaching party may either waive the breach or terminate the Purchase and ~~filed a motion to dismiss on behalf of both defendants.~~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 exit firms and 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 exit 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 ~~8.2%~~8.6% in 2019. Bluegreen also estimates that approximately ~~15.8%~~15.0% of the total delinquencies on its VOI notes receivable as of ~~March 31,~~September 30, 2019 related to VOI notes receivable subject to 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 ~~and BVU~~ filed a lawsuit against timeshare exit firm Totten Franqui and certain of its affiliates (“TPEs”). In the complaint, Bluegreen ~~argues~~alleged that the TPEs, through various forms of deceptive advertising, as well as inappropriate direct contact with VOI owners, ~~the TPEs~~ made false statements about Bluegreen and provided misleading information to the VOI owners. ~~Bluegreen also believes that the~~The TPEs ~~induced Bluegreen’s VOI owners to breach their contracts~~have encouraged nonpayment by consumers and ~~stop making payments to Bluegreen, which typically results in a default on the VOI note and termination of the VOI. Thereafter, the TPEs, despite often times~~exacted fees for doing ~~no more than encouraging non-payment, claim that they “helped” the consumer “exit” their timeshare contract.~~so. Bluegreen believes ~~that this has resulted in~~ the ~~consumer~~consumers are paying fees to the TPEs in exchange for illusory ~~services. Bluegreen~~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:

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 ~~three~~nine months ended ~~March 31,~~September 30, 2019 and 2018, Bluegreen made payments related to such subsidies of ~~$1.9 million. Bluegreen did not make any subsidy payments in connection with these arrangements during the three months ended March 31, 2018.~~$10.5 million and $2.2 million, respectively. As of ~~March 31,~~September 30, 2019, Bluegreen had ~~$4.2~~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, 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 March 31, 2019, the Company had a $0.5 million liability remaining under this arrangement, which is included in other liabilities in the Company’s condensed consolidated statement of financial condition.

~~In December 2018,~~ Bluegreen entered into an agreement with an executive in connection with his retirement. Pursuant to the terms of the agreement, Bluegreen agreed to make payments totaling approximately $2.0 million through December 2019. As of March 31, 2019, Bluegreen had a $1.4 million liability remaining under this agreement, 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 other means. As of March 31, 2019, Bluegreen sold 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 although Bluegreen/Big Cedar Vacations pays an affiliate of Bass Pro brand licensing and marketing fees on certain of those sales. During the three months ended March 31, 2019 and 2018, VOI sales to prospects and leads generated by the agreement with Bass Pro accounted for approximately 12% of Bluegreen’s VOI sales volume.

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.

The alleged breaches cited in the notice included those previously disclosed by Bluegreen, and specifically Bass Pro’s belief that the amounts paid to it as VOI sales commissions should not have been adjusted for certain purchaser defaults, breaches regarding the calculation of commissions and other amounts payable under the marketing agreement and other related agreements, including reimbursements paid to Bluegreen, as well as matters regarding the operations at Bluegreen/Big Cedar Vacations. In addition, the notice referenced a breach Bass Pro alleged in 2014 regarding customer service. Bluegreen sent a response to Bass Pro with respect to each of these issues prior to the expiration of the cure period.

~~On April 17, 2019, Bass Pro, LLC and Big Cedar, LLC brought an action against BVU, a wholly-owned subsidiary of Bluegreen,~~ alleging that BVU failed to pay certain commissions due it under the parties’ marketing agreement, improperly charged a tour generation fee and that its conduct in the Bass Pro stores breached its contractual commitments. Bass Pro seeks damages in an amount in excess of $10.0 million plus interest and attorneys’ fees, and such additional relief as the court determines. BVU believes that this lawsuit is without merit and intends to vigorously defend the action. The parties are continuing to attempt to resolve the outstanding issues, and to date, Bass Pro has not cancelled Bluegreen’s access to Bass Pro Marketing channels. However, if the issues with Bass Pro are not resolved, Bluegreen’s results will be adversely impacted, and Bluegreen intends, in that case, to pursue all remedies available to it, including pursuing recovery of damages suffered as a result of Bass Pro’s actions.

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

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 ~~reflected~~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 ~~$21.4~~$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 ~~three~~nine months ended ~~March 31,~~September 30, 2019 was ~~$6.7~~$20.8 million of cash paid for amounts included in the measurement of lease liabilities. During the ~~three~~nine months ended ~~March 31,~~September 30, 2019, the Company obtained ~~$5.9~~$21.7 million of right-of-use assets in exchange for ~~new~~ operating lease liabilities.

In June 2017, BBX Capital’s board of directors approved a share repurchase program authorizing the purchase of up to 5,000,000 shares of BBX Capital’s Class A Common Stock and 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 compensation committee of the board of directors granted awards of 1,923,975 restricted shares of BBX Capital’s Class B Common 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.

In October 2019, 566,322 shares of restricted Class A common stock awards and 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 222,848 shares of Class A common stock and 748,357 shares of Class B common stock to the Company to satisfy the $4.5 million tax withholding obligation associated with the vesting of these 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 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 ~~statement~~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 March 31, 2019 and December 31, 2018~~ (in thousands):

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 values of Bluegreen’s notes receivable 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 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 owned 90.3% of ~~Bluegreen~~Bluegreen’s outstanding common stock as of ~~March 31,~~September 30, 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 ~~both of~~ the three and nine months ended ~~March 31,~~September 30, 2019, respectively, and ~~2018.~~$0.6 million and $1.2 million during the three and nine months ended September 30, 2018, respectively.

The Company received $11.4 million and ~~$10.1~~$34.3 million of dividends from Bluegreen during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, and ~~March 31,~~$10.1 million and $30.3 million of dividends from Bluegreen during the three and nine months ended September 30, 2018, respectively.

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 bear interest at a rate of 6% per annum. Payments of interest are required on a quarterly basis, and 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 ~~March 31,~~September 30, 2019 and 2018, BBX Capital recognized $1.2 million and $3.6 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, 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 ~~three~~nine months ended ~~March 31, 2018,~~September 30, 2019, BBX Capital received ~~$4.0~~$13.0 million and $1.0 million of tax sharing payments from Bluegreen and ~~on April 1, 2019,~~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, BBX Capital received ~~$2.3~~$7.1 million and $21.0 million, respectively, of tax sharing payments from ~~Bluegreen~~.Bluegreen.

During each of the three and nine months ended ~~March 31,~~September 30, 2019 and 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 segment information for the three and nine months ended ~~March 31,~~September 30, 2019 and 2018, amounts set forth in the column entitled “Other” include the Company’s investments in various operating businesses, including its ~~pizza restaurant operations as a franchisee of MOD Pizza, the~~ remaining operating businesses in the confectionery industry, ~~and~~ a controlling financial interest in a restaurant acquired in connection with a loan receivable ~~default.~~default, and its pizza restaurant operations as a franchisee of MOD Pizza. As described in Note 1, the Company exited its pizza restaurant operations as a franchisee of MOD Pizza in September 2019. The amounts set forth in the column entitled “Reconciling Items and Eliminations” include corporate ~~selling,~~ general and administrative expenses, interest expense associated with Woodbridge’s junior subordinated debentures and BBX Capital’s $50.0 million revolving line of credit, and elimination entries.

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

The table below sets forth the Company’s segment information as of and for the three months ended ~~March 31,~~September 30, 2019 (in thousands):



Revenues:		Bluegreen	BBX Capital Real Estate	Renin	IT'SUGAR	Other	Reconciling Items and Eliminations	Segment Total		Bluegreen	BBX Capital Real Estate	Renin	IT'SUGAR	Other	Reconciling Items and Eliminations	Segment Total
Sales of VOIs	$	51,731	-	-	-	-	-	51,731	$	66,318	-	-	-	-	-	66,318
Fee-based sales commissions		45,212	-	-	-	-	-	45,212		60,478	-	-	-	-	-	60,478
Other fee-based services		29,568	-	-	-	-	-	29,568		33,744	-	-	-	-	-	33,744
Cost reimbursements		20,236	-	-	-	-	-	20,236		21,111	-	-	-	-	-	21,111
Trade sales		-	-	19,343	17,215	9,435	(9)	45,984		-	-	16,442	24,678	6,541	(1)	47,660
Sales of real estate inventory		-	4,236	-	-	-	-	4,236		-	370	-	-	-	-	370
Interest income		22,008	202	-	-	39	(834)	21,415		22,081	166	-	-	45	(495)	21,797
Net gains on sales of real estate assets		-	1,332	-	-	-	-	1,332		-	399	-	-	-	-	399
Other revenue		89	846	-	210	470	(272)	1,343		2,146	197	-	15	1,053	(174)	3,237
Total revenues		168,844	6,616	19,343	17,425	9,944	(1,115)	221,057		205,878	1,132	16,442	24,693	7,639	(670)	255,114
Costs and expenses:
Cost of VOIs sold		3,848	-	-	-	-	-	3,848		3,121	-	-	-	-	-	3,121
Cost of other fee-based services		22,868	-	-	-	-	-	22,868		23,746	-	-	-	-	-	23,746
Cost reimbursements		20,236	-	-	-	-	-	20,236		21,111	-	-	-	-	-	21,111
Cost of trade sales		-	-	15,117	11,220	5,962	(9)	32,290		-	-	12,983	13,902	4,976	(1)	31,860
Cost of real estate inventory sold		-	2,643	-	-	-	-	2,643		-	-	-	-	-	-	-
Interest expense		9,506	-	140	22	22	1,458	11,148		10,388	-	131	24	29	1,298	11,870
Recoveries from loan losses, net		-	(961)	-	-	-	-	(961)		-	(1,821)	-	-	-	-	(1,821)
Impairment losses		-	-	-	-	618	-	618		-	37	-	-	3,993	-	4,030
Selling, general and administrative expenses		90,214	2,494	3,035	8,106	6,041	12,103	121,993		117,159	2,336	2,849	9,567	4,900	11,738	148,549
Total costs and expenses		146,672	4,176	18,292	19,348	12,643	13,552	214,683		175,525	552	15,963	23,493	13,898	13,035	242,466
Equity in net losses of unconsolidated real estate joint ventures		-	(17)	-	-	-	-	(17)
Foreign exchange gain		-	-	5	-	-	-	5
Equity in net earnings of unconsolidated real estate joint ventures										-	28,534	-	-	-	-	28,534
Foreign exchange gain (loss)										-	-	-	-	-	-	-
Income (loss) before income taxes		22,172	2,423	1,056	(1,923)	(2,699)	(14,667)	6,362	$	30,353	29,114	479	1,200	(6,259)	(13,705)	41,182

Total assets	$	1,347,093	175,195	34,856	140,565	46,088	16,879	1,760,676	$	1,360,829	147,712	32,103	150,841	32,135	93,818	1,817,438

Expenditures for property and equipment	$	7,507	3	115	1,220	822	26	9,693	$	3,986	1	79	3,752	224	-	8,042
Depreciation and amortization	$	3,365	93	298	1,060	585	112	5,513	$	3,585	-	303	1,181	714	101	5,884
Debt accretion and amortization	$	1,121	86	8	56	1	90	1,362	$	1,430	22	6	56	1	60	1,575
Cash and cash equivalents	$	189,875	18,846	-	3,943	8,295	75,358	296,317	$	183,207	21,781	-	2,412	7,745	153,673	368,818
Equity method investments	$	-	67,382	-	-	-	-	67,382
Real estate equity method investments									$	-	53,739	-	-	-	-	53,739
Goodwill	$	-	-	-	35,167	2,081	-	37,248	$	-	-	-	35,167	2,081	-	37,248
Receivable-backed notes payable	$	437,927	-	-	-	-	-	437,927	$	436,760	-	-	-	-	-	436,760
Notes payable and other borrowings	$	125,436	31,959	8,059	2,106	1,481	-	169,041	$	119,045	32,009	8,394	406	1,861	(295)	161,420
Junior subordinated debentures	$	71,504	-	-	-	-	65,119	136,623	$	71,883	-	-	-	-	65,155	137,038

The table below sets forth the Company’s segment information as of and for the three months ended ~~March 31,~~September 30, 2018 (in thousands):



		Bluegreen	BBX Capital Real Estate	Renin	IT'SUGAR	Other	Reconciling Items and Eliminations	Segment Total		Bluegreen	BBX Capital Real Estate	Renin	IT'SUGAR	Other	Reconciling Items and Eliminations	Segment Total
Revenues:
Sales of VOIs	$	56,141	-	-	-	-	-	56,141	$	70,698	-	-	-	-	-	70,698
Fee-based sales commissions		45,854	-	-	-	-	-	45,854		61,641	-	-	-	-	-	61,641
Other fee-based services		28,024	-	-	-	-	-	28,024		31,057	-	-	-	-	-	31,057
Cost reimbursements		16,200	-	-	-	-	-	16,200		16,900	-	-	-	-	-	16,900
Trade sales		-	-	14,985	16,681	6,736	(2)	38,400		-	-	15,330	22,663	5,815	(5)	43,803
Sales of real estate inventory		-	6,409	-	-	-	-	6,409		-	7,478	-	-	-	-	7,478
Interest income		21,122	1,534	-	1	31	(771)	21,917		21,531	229	-	-	10	(613)	21,157
Net gains on sales of real estate assets		-	4,069	1	-	-	-	4,070
Other revenue		181	739	-	18	304	(193)	1,049		378	572	-	99	840	(220)	1,669
Total revenues		167,522	12,751	14,986	16,700	7,071	(966)	218,064		202,205	8,279	15,330	22,762	6,665	(838)	254,403
Costs and expenses:
Cost of VOIs sold		1,812	-	-	-	-	-	1,812		11,237	-	-	-	-	-	11,237
Cost of other fee-based services		17,411	-	-	-	-	-	17,411		19,937	-	-	-	-	-	19,937
Cost reimbursements		16,200	-	-	-	-	-	16,200		16,900	-	-	-	-	-	16,900
Cost of trade sales		-	-	12,150	10,559	5,209	(2)	27,916		-	-	12,306	12,236	4,420	(5)	28,957
Cost of real estate inventory sold		-	4,247	-	-	-	-	4,247		-	4,655	-	-	-	-	4,655
Interest expense		7,767	-	158	-	89	1,177	9,191		9,208	-	157	-	53	1,712	11,130
Recoveries from loan losses, net		-	(4,813)	-	-	-	-	(4,813)		-	(443)	-	-	-	-	(443)
Impairment losses		-	45	-	-	187	-	232		-	193	-	-	-	-	193
Selling, general and administrative expenses		93,549	2,485	2,760	8,075	5,081	12,948	124,898		112,407	2,307	2,250	8,962	4,868	12,765	143,559
Total costs and expenses		136,739	1,964	15,068	18,634	10,566	14,123	197,094		169,689	6,712	14,713	21,198	9,341	14,472	236,125
Equity in net earnings of unconsolidated real estate joint ventures		-	1,280	-	-	-	-	1,280		-	373	-	-	-	-	373
Foreign exchange loss		-	-	52	-	-	-	52
Foreign exchange gain										-	-	76	-	-	-	76
Income (loss) before income taxes	$	30,783	12,067	(30)	(1,934)	(3,495)	(15,089)	22,302	$	32,516	1,940	693	1,564	(2,676)	(15,310)	18,727


Total assets	$	1,217,976	138,345	35,330	70,238	33,724	86,601	1,582,214	$	1,336,992	136,290	28,798	71,450	37,577	66,660	1,677,767

Expenditures for property and equipment		5,462	23	107	1,089	1,392	2	8,075	$	9,242	131	99	1,942	1,704	125	13,243
Depreciation and amortization		2,927	101	285	1,094	375	142	4,924	$	3,169	91	292	1,153	644	108	5,457
Debt accretion and amortization		1,019	-	4	45	25	-	1,093	$	1,086	-	4	(90)	143	91	1,234
Cash and cash equivalents		167,845	6,421	-	4,903	8,954	161,822	349,945	$	195,439	21,625	-	4,483	10,068	137,897	369,512
Equity method investments		-	48,841	-	-	_-	-	48,841
Real estate equity method investments									$	-	42,550	-	-	-	-	42,550
Goodwill		-	-	-	35,167	4,315	-	39,482	$	-	-	-	35,167	4,315	-	39,482
Receivable-backed notes payable		413,334	-	-	-	-	-	413,334	$	433,450	-	-	-	-	-	433,450
Notes payable and other borrowings		83,764	20,858	13,689	-	7,013	-	125,324	$	137,834	16,285	9,422	620	3,090	29,926	197,177
Junior subordinated debentures		70,677	-	-	-	-	65,048	135,725	$	71,147	-	-	-	-	65,084	136,231

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



		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):


		Bluegreen	BBX Capital Real Estate	Renin	IT'SUGAR	Other	Reconciling Items and Eliminations	Segment 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	58,967	19,954	(12)	126,114
Sales of real estate inventory		-	17,138	-	-	-	-	17,138
Interest income		63,771	2,064	-	1	105	(2,203)	63,738
Net gains on sales of real estate assets		-	4,802	-	-	-	-	4,802
Other revenue		1,269	2,020	-	134	1,455	(600)	4,278
Total revenues		564,662	26,024	47,205	59,102	21,514	(2,815)	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	34,020	15,583	(12)	88,045
Cost of real estate inventory sold		-	11,283	-	-	-	-	11,283
Interest expense		25,470	-	497	-	241	4,661	30,869
Recoveries from loan losses, net		-	(7,258)	-	-	-	-	(7,258)
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		461,983	11,562	46,592	59,579	32,552	42,557	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	15,627	704	(477)	(11,038)	(45,372)	62,123

Expenditures for property and equipment	$	24,347	298	447	4,169	3,841	214	33,316
Depreciation and amortization	$	9,087	283	869	3,327	1,445	387	15,398
Debt accretion and amortization	$	2,765	2	12	-	159	221	3,159

Subsequent events have been evaluated through the date the financial statements were available to be issued. As of such date, there were no subsequent events identified that required recognition or disclosure other than as disclosed ~~below or~~ in the footnotes herein.

In April 2019, the Altis at Lakeline joint venture sold its 354 unit multifamily apartment community located in Cedar Park, Texas. In connection with the sale, the Company received approximately $9.0 million of distributions from the venture.

In April 2019, the PGA Design Center joint venture sold its remaining commercial buildings located in Palm Beach Gardens, Florida and provided seller financing to the buyer for a portion of the sales price. In connection with the sale, the Company received approximately $2.3 million of distributions from the venture. In addition, BBX Capital Real Estate sold its remaining land parcels at PGA Station in Palm Beach Gardens, Florida, which had a carrying amount of $6.8 million as of March 31, 2019, to the buyer of the commercial buildings sold by the PGA Design Center joint venture. In connection with the sale, BBX Capital Real Estate received proceeds of $8.5 million and reinvested $2.1 million of the proceeds in a joint venture with the PGA Design Center joint venture to provide seller financing to the buyer.

In May 2019, BBX Capital Real Estate sold RoboVault, a self-storage facility in Fort Lauderdale, Florida, which had a carrying amount of $6.9 million as of March 31, 2019. In connection with the sale, BBX Capital Real Estate received net sales proceeds of approximately $11.8 million.

2832

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

~~Cautionary Note Regarding~~ 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 and its subsidiaries (the “Company” or, unless otherwise indicated or~~ the ~~context otherwise requires, “we”, “us”, or “our”; and BBX Capital Corporation as a standalone entity, “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. The reader should note that prior or current performance is not a guarantee or indication of future performance. Comparisons of results 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 historical data. ~~Future results could differ materially as a result of a variety of risks and uncertainties.~~

~~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 Vacations” or “Bluegreen”) operates, the real estate development and construction industry in which BBX Capital Real Estate LLC (“BBX Capital Real Estate” or “BBXRE”) operates, the home improvement industry in which Renin Holdings, LLC (“Renin”) operates, and the confectionery industry in which IT’SUGAR, LLC (“IT’SUGAR”) and the Company’s other confectionery businesses operate.

~~These~~may be affected by various risks and uncertainties, ~~include, but are not limited to:~~

BBX Capital has limited sources of cash 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 BBX Capital’s 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 and due April 2020, 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 or at maturity;

Risks associated with BBX Capital’s current business strategy, including the risk that BBX Capital will not be successful in simplifying its business structure or in pursuing the sale or disposal of businesses or investments, that it will not be in a position to provide strategic support to or make additional investments in its subsidiaries or joint ventures, or that it may not achieve or maintain in the future the benefits anticipated to be realized from such support or additional investments;

~~BBX Capital’s shareholders’ interests will be diluted to the extent 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;~~

Risks associated with BBX Capital’s previously announced plan to take Bluegreen private pursuant to a statutory short-form merger under Florida law, including that BBX Capital previously announced that it has advised Bluegreen that BBX Capital is re-evaluating whether or not it will proceed with such merger transaction;

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 BBX Capital’s ability to obtain additional capital, including the risk that if BBX Capital needs or otherwise believes it is advisable to issue debt or equity securities or to incur indebtedness in order to fund the Company’s 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 risk that creditors of BBX Capital’s subsidiaries or other third parties may seek to recover distributions or dividends made by such subsidiaries to BBX Capital or other amounts owed by such subsidiaries to such creditors or third parties;

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

Risks related to potential business expansion that the Company may pursue, including that the Company 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;

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;~~

~~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;~~

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

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

~~The Company’s ability to compete effectively in the highly competitive industries in which it operates;~~

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

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

~~Audits of the Company’s payroll, federal or state income 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 the Company’s financial condition and operating results;~~

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 adopted on January 1, 2019;

~~Risks that the impact of hurricanes and other natural disasters may adversely impact the Company’s financial condition and operating results; 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, the risks and uncertainties also 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, expirations or terminations of, or interruptions in, business and strategic relationships, management contracts, exchange networks or other strategic marketing alliances (including Bluegreen’s ability to resolve the issues with Bass Pro, the potential termination of Bluegreen’s access to Bass Pro stores

~~and advertising materials, the impact of any termination on Bluegreen’s business and results, and its ability to recover damages it suffers);~~

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 inventory of vacation ownership interests (“VOIs”) for sale;~~

~~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;~~

~~The availability of financing and Bluegreen’s ability to sell, securitize, or borrow against its VOI notes receivable;~~

~~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;~~

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

~~The loss of the services of Bluegreen’s key management and personnel could adversely affect its business;~~

~~Bluegreen’s ability to comply with regulations applicable to the vacation ownership industry and the costs of compliance efforts or a failure to comply;~~

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

~~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;~~

Changes in Bluegreen’s business model and marketing efforts, plans, or strategies, which may cause marketing expenses to increase or adversely impact its revenue, operating results, and financial condition and such expenses as well as investments in new and expanded sales offices may not achieve the desired results;

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

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

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

~~With respect to BBX Capital Real Estate, the risks and uncertainties also 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;

Risks that the recent investment in The Altman Companies, LLC (the “Altman Companies”) may not produce the anticipated benefits or be profitable and that it will increase the Company’s exposure to risks associated with the multifamily real estate development and construction industry;

~~The risk of additional impairments of real estate assets;~~

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

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

exposure to risks associated with real estate development activities, including severe weather conditions increasing costs, delaying construction, causing uninsured losses or reducing demand for homes;

~~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 associated with increasing interest rates, as the majority of the development costs and sales of residential communities is financed;~~

~~risks associated with not finding tenants for multifamily apartments or buyers for single-family homes and townhomes;~~

~~risk associated with identifying equity partners, securing financing, and selling newly built multifamily apartments;~~

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

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

~~With respect to IT’SUGAR and Renin, the risks and uncertainties also include, but are not limited to:~~

~~Risks that the Company’s investments will not achieve the returns anticipated;~~

~~Risks that their business plans, including IT’SUGAR’s plans for opening new stores in high profile locations, will not be successful;~~

~~Risks that market demand for their products could decline;~~

~~Risks associated with increased commodity costs or a limited availability of commodities;~~

~~Risks associated with product recalls or product liability claims;~~

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

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

~~Risks associated with the performance of vendors, commodity price volatility, and the impact of tariffs on goods imported from Canada and Asia, particularly with respect to Renin;~~

~~For Renin, risks associated with exposure to foreign currency exchange risk of the U.S. dollar compared to the Canadian dollar;~~

~~The amount and terms of indebtedness associated with the operations and capital expenditures may impact their financial condition and results of operations and limit their activities;~~

~~Requirements for operating and capital expenditures may require BBX Capital to make additional capital contributions or advances; and~~

~~The risk that a decline in IT’SUGAR’s profitability or cash flows may result in impairment losses associated with IT’SUGAR’s intangible and long-lived assets.~~

~~With respect~~ 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 ~~other investments~~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 be as profitable as under the prior terms, or at all, or otherwise result in ~~operating businesses,~~the benefits anticipated, and that Bluegreen may not open kiosks in ~~addition to~~Cabela’s stores in the ~~above risks relevant to these businesses,~~number or at the ~~risks and uncertainties include, but are not limited to:~~

~~Risks that~~times anticipated. The risk factors described in the 2018 Annual Report, as well as the Company’s reorganization of the confectionery businesses and operations may not achieve anticipated operating efficiencies and reduction in operating losses and that the implementation of strategic alternatives, including the sale, spin-off, or exit of these businesses, will result in additional losses;

Continued operating losses and the failure of these businesses to meet financial metrics may necessitate BBX Capital 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 these operating businesses or the Company’s inability to recover its investments; and~~

Risks associated with the Company’s ongoing compliance with its franchise agreements or area development agreements, including the impact of noncompliance with the development schedule to open MOD Pizza restaurant locations.

~~These and~~ other risks and ~~uncertainties disclosed~~factors detailed in this ~~Quarterly Report on Form 10-Q~~report and the other reports filed by the Company with the SEC, are not necessarily all of the important factors that could cause the Company’s actual results to differ materially from those expressed in any of 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.~~

~~In addition to the risks and factors identified above, reference is also made to the other risks and factors detailed in this report~~10-Q, and the ~~other reports filed by~~Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the ~~Company with the SEC, including those disclosed in the “Risk Factors” section~~date of ~~the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Annual Report”). The Company cautions that the foregoing factors are not exclusive.~~this report.

Critical Accounting Policies

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 ~~on Form 10-K~~ for a discussion onof the Company’s critical accounting policies.

New Accounting Pronouncements

See Note 1 to the Company’s condensed consolidated financial statements included 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 whose principal investments are Bluegreen Vacations, BBX Capital Real Estate LLC (“BBX Capital Real Estate”), Renin Holdings, LLC (“Renin”), and ~~IT’SUGAR.~~IT’SUGAR, LLC (“IT’SUGAR”). In addition to its principal investments, the Company has other investments in various operating businesses, including ~~restaurant locations throughout Florida and~~ companies in the confectionery industry.

The Company’s 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, 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 itthe 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.

As of ~~March 31,~~September 30, 2019, the Company had total consolidated assets of approximately $1.8 billion and shareholders’ equity of approximately ~~$550.9~~$556.7 million. ~~Net income attributable to shareholders for the three months ended March 31, 2019 and 2018 was approximately $1.5 million and $11.1 million, respectively.~~

Summary of Consolidated Results of Operations

Consolidated Results

The following summarizes key financial highlights for the three months ended ~~March 31,~~September 30, 2019 compared to the same 2018 period:

Total consolidated revenues ~~were $221.1~~of $255.1 million, a ~~1.4%~~0.3% increase compared to the same period in 2018.

Income before income taxes ~~was $6.4~~of $41.2 million, a ~~71.5%~~119.9% increase compared to the same period in 2018.

Net income attributable to common shareholders of $22.4 million, a 262.3% increase compared to the same period in 2018.

Diluted earnings per share of $0.24 per diluted share, an $0.18 per share increase compared to the same 2018 period.

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

Total consolidated revenues of $727.5 million, a 1.7% increase compared to the same period in 2018.

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

Net income attributable to common shareholders ~~was $1.5~~of $12.2 million, ~~an 86.6%~~a 48.6% decrease compared to the same period in 2018.

Diluted earnings per share ~~were $0.02~~of $0.13 per diluted share, ~~a $0.09~~an $0.11 per share decrease compared to the same ~~period in 2018.~~2018 period.

The Company’s consolidated results for the three months ended ~~March 31,~~September 30, 2019 compared to the same 2018 period were ~~primarily~~ impacted by the following:

The Altis at Bonterra joint venture’s sale of its multifamily apartment community located in Hialeah, Florida, which resulted in the recognition of $29.1 million of equity earnings from the joint venture for the three months ended September 30, 2019.

The Company’s exit from its MOD Pizza restaurant operations, which resulted in the recognition of $4.0 million of impairment losses during the three months ended September 30, 2019, as described above.

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 acquisition of secondary market VOI inventory and the 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 charge of $39.1 million in the 2019 period associated with Bluegreen’s settlement agreement with Bass Pro in June 2019.

A net increase in sale activity in BBX Capital Real Estate’s portfolio in the 2019 period, including the Company’s sale of RoboVault and its remaining land parcels located at PGA Station in Palm Beach Gardens, Florida, the Altis at Lakeline joint venture’s sale of its multifamily apartment community located in Cedar Park, Texas, and the PGA Design Center joint venture’s sale of its remaining commercial buildings located in Palm Beach Gardens, Florida.

A net decrease in Bluegreen’s ~~revenues~~gross profits from VOI sales primarily attributable to lower system-wide sales of VOIs ~~which reflects a decline in marketing tours,~~ and an increase in the provision for loan ~~losses.~~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 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’s interest income and recoveries from loan losses primarily due to the continued decline in the balance of the Company’s legacy portfolio, as several significant nonaccrual commercial ~~nonaccrual~~ loans were repaid in 2018.

A decrease in sale activity in BBX Capital Real Estate’s portfolio in the 2019 period, as results for the 2018 period included the Company’s sale of a student housing complex, the PGA Design Center joint venture’s sale of a retail building, and higher sales of developed lots to homebuilders at the Beacon Lake Community development in St. Johns County, Florida.

3335

Segment Results

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

Information regarding income ~~(loss)~~ before income taxes by reportable segment ~~for the three months ended March 31, 2019 and 2018~~ is set forth in the table below (in thousands):


		For the Three Months Ended March 31,				For the Three Months Ended September 30,			For the Nine Months Ended September 30,
		2019	2018	Change		2019	2018	Change	2019	2018	Change
Bluegreen	$	22,172	30,783	(8,611)	$	30,353	32,516	(2,163)	42,516	102,679	(60,163)
BBX Capital Real Estate		2,423	12,067	(9,644)		29,114	1,940	27,174	50,641	15,627	35,014
Renin		1,056	(30)	1,086		479	693	(214)	1,550	704	846
IT'SUGAR		(1,923)	(1,934)	11		1,200	1,564	(364)	(580)	(477)	(103)
Other		(2,699)	(3,495)	796		(6,259)	(2,676)	(3,583)	(13,045)	(11,038)	(2,007)
Reconciling items and eliminations		(14,667)	(15,089)	422		(13,705)	(15,310)	1,605	(42,500)	(45,372)	2,872
Income before income taxes		6,362	22,302	(15,940)		41,182	18,727	22,455	38,582	62,123	(23,541)
Provision for income taxes		(1,724)	(6,600)	4,876		(14,682)	(6,742)	(7,940)	(15,068)	(21,997)	6,929
Net income		4,638	15,702	(11,064)		26,500	11,985	14,515	23,514	40,126	(16,612)
Less: Net income attributable to noncontrolling interests		3,139	4,560	(1,421)		4,112	5,806	(1,694)	11,275	16,324	(5,049)
Net income attributable to shareholders	$	1,499	11,142	(9,643)	$	22,388	6,179	16,209	12,239	23,802	(11,563)

Bluegreen is a leading vacation ownership company that markets and sells VOIs and manages resorts in ~~top~~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 ~~217,000~~219,000 owners in its Vacation Club have the flexibility to stay at units available at any of its resorts and have access to ~~over 11,000~~approximately 11,350 other hotels and resorts through partnerships and exchange networks. Bluegreen has a robust sales and marketing platform supported by exclusive marketing relationships which drive sales within its core demographic.

Bluegreen’s primary business is the marketing and selling 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 11,000 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 do not require an initial investment or involve 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 13% to 17% per annum. As of March 31, 2019, the weighted-average interest rate on its VOI notes receivable was 15.1%. In addition, Bluegreen earns fees for various other services, including title and escrow services in connection with the closing of VOI sales, and Bluegreen generates fees for mortgage servicing.

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 217,000 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. 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.

~~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 VOI sales and VOIs purchased by Bluegreen for sale as part of its 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.

~~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 there is additional inventory that can be obtained 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.

~~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.

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 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.

Information regarding the results of operations for Bluegreen, ~~for the three months ended March 31, 2019 and 2018,~~ including a reconciliation of net income to EBITDA and Adjusted EBITDA, is set forth below (dollars in thousands):


1

		For the Three Months Ended March 31,						For the Three Months Ended September 30,
		2019			2018			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)	$	68,153	53%	$	47,531	36%	$	87,863	52%	$	90,596	52%
Secondary market sales		59,153	45%		76,289	57%		72,081	42%		54,300	31%
Fee-based sales		66,794	52%		68,684	52%		87,646	51%		88,155	51%
JIT sales		2,234	2%		3,369	3%		4,505	3%		13,591	8%
Less: Equity trade allowances (6)		(66,656)	-52%		(63,029)	-48%		(81,720)	-48%		(73,336)	-42%
System-wide sales of VOIs		129,678	100%		132,844	100%		170,375	100%		173,306	100%
Less: Fee-based sales		(66,794)	-52%		(68,684)	-52%		(87,646)	-51%		(88,155)	-51%
Gross sales of VOIs		62,884	48%		64,160	48%		82,729	49%		85,151	49%
Provision for loan losses (2)		(11,153)	-18%		(8,019)	-12%		(16,411)	-20%		(14,453)	-17%
Sales of VOIs		51,731	40%		56,141	42%		66,318	39%		70,698	41%
Cost of VOIs sold (3)		(3,848)	-7%		(1,812)	-3%		(3,121)	-5%		(11,237)	-16%
Gross profit (3)		47,883	93%		54,329	97%		63,197	95%		59,461	84%
Fee-based sales commissions (4)		45,212	68%		45,854	67%		60,478	69%		61,641	70%
Financing revenue, net of
financing expense		12,502	10%		13,355	10%		11,693	7%		12,323	7%
Other fee-based services		49,804	38%		44,224	33%		54,855	32%		47,957	28%
Cost of other fee-based services		(35,417)	-27%		(31,094)	-23%		(38,979)	-23%		(33,929)	-20%
Net carrying cost of VOI inventory		(7,687)	-6%		(2,517)	-2%		(5,878)	-3%		(2,908)	-2%
Selling and marketing expenses		(65,222)	-50%		(65,683)	-49%		(87,358)	-51%		(84,955)	-49%
General and administrative expenses		(24,992)	-19%		(27,866)	-21%		(29,801)	-17%		(27,452)	-16%
Operating profit		22,083	17%		30,602	23%		28,207	17%		32,138	19%
Other income		89			181			2,146			378
Provision for income taxes		(5,303)			(7,201)			(7,778)			(8,443)
Net income	$	16,869		$	23,582		$	22,575		$	24,073

Adjustments for EBITDA:
Provision for income taxes		5,303			7,201			7,778			8,443
Income before taxes		22,172			30,783			30,353			32,516
Depreciation and amortization		3,365			2,927			3,585			3,169
Franchise taxes		34			81			112			56
Interest expense (other than interest
incurred on debt that is secured by
VOI notes receivable)		4,244			3,056			5,326			4,207
Interest income (other than interest
earned on VOI notes receivable)		(1,846)			(1,434)			(1,799)			(1,407)
EBITDA		27,969			35,413			37,577			38,541
Adjustments for Adjusted EBITDA:
Corporate realignment costs		-			476
Loss (gain) on assets held for sale		9			(20)
(Gain) loss on assets held for sale								(166)			18
EBITDA attributable to
noncontrolling interest in
Bluegreen/Big Cedar Vacations		(1,781)			(2,612)			(2,364)			(3,637)
Severance								1,924			-
Adjusted EBITDA	$	26,197		$	33,257		$	36,971		$	34,922



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

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

Sales of ~~VOIs~~VOIs. . Sales of VOIs were ~~$51.7~~$66.3 million and ~~$56.1~~$186.4 million during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, and $70.7 million and $195.4 million during the three and nine months ended September 30, 2018, respectively. Sales of VOIs are impacted by the factors described below in system-wide sales of VOIs. Gross sales of VOIs were reduced by ~~$11.2~~$16.4 million and ~~$8.0~~$39.5 million during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, and ~~2018,~~$14.5 million and $35.9 million during the three and nine months ended September 30, 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 estimates of future notes receivable performance for existing ~~and newly originated~~ loans. Bluegreen’s provision for loan losses as a percentage of gross sales of VOIs was ~~18%~~20% and ~~12%~~17% during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, and 17% and 16% for the three and nine months ended September 30, 2018, respectively. The percentage of ~~Bluegreen’s~~ sales which were realized in cash within 30 days from sale ~~increased to 44%~~was approximately 40% and 42% during the three and nine months ended ~~March 31,~~September 30, 2019, ~~from 43%~~respectively, compared to 39% and 41% during the three and nine months ended ~~March 31, 2018.~~September 30, 2018, respectively. The ~~increase~~increases in the provision for loan losses iswere primarily due to a low provision in the first quarter of 2018 resulting from the impact of prepayments (including equity trades) on prior years’ originations in excess of previous estimates. Although Bluegreen has seen a stabilization in its default rates currently, in recent years Bluegreen has experienced an increase in average annual default ~~rates.~~rates, which Bluegreen believes ~~that a significant portion of the default increase in recent years~~ is due in large part to the receipt of letters from attorneys 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 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 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 ~~$129.7~~$170.4 million and ~~$132.8~~$463.6 million during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, and $173.3 million and $478.1 million during the three and nine months ended September 30, 2019, respectively. Bluegreen estimates that system-wide sales of VOIs were adversely impacted by approximately $6.0 million and $5.8 million as a result of named hurricanes in September 2019 and 2018, respectively. System-wide VOI sales decreased during the three and nine months ended September 30, 2019 compared to same 2018 periods due to a decrease in VPG and the number of guest tours. In addition, Bluegreen believes that the decrease in system-wide VOI sales for the nine months ended September 30, 2019 was ~~primarily~~ due in part to ~~reduced marketing tours resulting from~~disruptions in staffing and operations at certain of Bluegreen’s sales offices related to the ~~impact~~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 lower marketing vacation package sales last year and packages deemed unqualified through its “yield management” program. The impact on system-wide sales from lower tours was partially offset by an increase inthis report for additional information regarding the ~~average sales volume per guest.~~Bass Pro settlement.

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 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 months ended March 31, 2019 and 2018 (dollars in thousands):~~VOIs:

Cost of VOIs Sold. During the three months ended ~~March 31,~~September 30, 2019 and 2018, cost of VOIs sold was ~~$3.8~~$3.1 million and ~~$1.8~~$11.2 million, respectively, and represented 7%5% and 3%16%, respectively, of sales of VOIs. During the nine months ended September 30, 2019 and 2018, cost of VOIs sold was $17.5 million and $19.8 million, respectively, and represented 9% and 10%, respectively, of sales of VOIs. 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 anticipated and the resulting change in estimate is recognized. During the ~~first quarter~~2019 periods, Bluegreen acquired more Secondary Market VOI inventory compared to the 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 and inventory process. In addition, during the 2019 periods, Bluegreen’s cost of sales benefited ~~as a result~~from sales of ~~the fact that approximately 36% of its VOI sales related to a resort that it acquired in 2017 that had a~~ relatively lower cost ~~than its other VOIs.~~VOIs as compared to the 2018 periods in which relatively higher cost VOIs were sold.

Fee-Based Sales Commission Revenue. During the three months ended ~~March 31,~~September 30, 2019 and 2018, Bluegreen sold ~~$66.8~~$87.6 million and ~~$68.7~~$88.2 million, respectively, of third-party VOI inventory under commission arrangements and earned sales and marketing commissions of ~~$45.2~~$60.5 million and ~~$45.9~~$61.6 million, respectively, in connection with those sales. During the nine months ended September 30, 2019 and 2018, Bluegreen sold $237.8 million and $246.8 million, respectively, of third-party VOI inventory under commission arrangements and earned sales and marketing commissions of $161.0 million and $167.6 million, respectively, in connection with those sales. The ~~decrease~~decreases in sales of third-party developer inventory on a commission basis during the 2019 ~~period was~~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 ~~68%~~69% and ~~67%~~68% during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, and 70% and 68% during the three and nine months ended September 30, 2018, respectively, which is net of a reserve for commission refunds in connection with early defaults and cancellations, pursuant to the terms of certain of Bluegreen’s fee-based service arrangements. The ~~increase~~decrease in sales and marketing commissions as a percentage of fee-based sales ~~was~~for the three 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 2018 period as well as higher reserves for early tenured defaults in the 2019 ~~period.~~period, which Bluegreen refunds to third-party developers in certain circumstances.

Financing Revenue, Net of Financing Expense.During the three and nine months ended ~~March 31,~~September 30, 2019, ~~and 2018,~~ financing revenue, net of financing expense was ~~$12.5~~$11.7 million and ~~$13.4~~$36.0 million, ~~respectively.~~respectively, compared to $12.3 million and $38.3 million during the respective comparable 2018 periods. The decrease is primarily attributable to ~~an increase in financing expense as a result of~~ a higher ~~weighted-average~~weighted average cost of borrowing and higher outstanding debt balances during the 2019 periods as ~~well as higher balances on Bluegreen’s notes payable~~compared to the 2018 periods. Additionally, in September 2019, Bluegreen paid off its 2013 Notes Payable and, ~~other borrowings.~~in connection with this repayment, wrote off unamortized debt issuance costs of $0.4 million which contributed to the increase in interest expense in the 2019 periods.

Other Fee-Based Services. During the three and nine months ended ~~March 31,~~September 30, 2019, ~~and 2018,~~ revenue from Bluegreen’s resort operations, club management, and title operations was ~~$49.8~~$54.9 million and ~~$44.2~~$152.7 million, respectively, ~~which was~~compared to $48.0 million and $136.6 million, respectively during the comparable 2018 periods. These other fee-based services revenues were partially offset by expenses directly related to these operations of ~~$35.4~~$39.0 million and ~~$31.1~~$106.4 million, for the three and nine months ended September 30, 2019, respectively, and $33.9 million and $94.1 million for the comparable 2018 periods, respectively.

Other fee-based services revenue increased ~~12.6%~~14% and 12% during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, as compared to the same periods in 2018. Cost reimbursement revenue, which primarily consists of payroll and payroll related costs for management of the HOAs and other services Bluegreen provides where Bluegreen is the employer, increased 25% during both the three and nine months ended September 30, 2019 as compared to the ~~same period in 2018.~~ ~~Bluegreen provides management services to the Vacation Club and to a majority~~comparable 2018 periods. Net of the HOAs of the resorts within the Vacation Club. In connection with its management services, Bluegreen also manages the Vacation Club reservation system, provides services to owners, and performs billing and collection services to the Vacation Club and certain HOAs. Additionally, Bluegreen generates revenues from its Traveler Plus program, food and beverage operations at the resorts, 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 number of resort properties Bluegreen manages increased from 47 as of March 31, 2018 to 49 as of March 31, 2019 due to new resorts under management in New Orleans, Louisiana and San Antonio, Texas resulting in increasedcost reimbursement revenue, resort operations and club management revenues increased 7% and 5% for the three and nine months ended September 30, 2019 as compared to the comparable 2018 periods. Resort operations and club management revenues increased during the 2019 ~~period~~periods compared to the 2018 ~~period. Bluegreen’s other fee-based services from title operations were $2.7 million for each~~periods primarily as a result of the ~~three months ended March 31,~~receipt of management fees for the full periods in 2019 related to managed resorts added during 2018 and higher third-party rental commissions. Bluegreen managed 49 resort properties as of both September 30, 2019 and September 30, 2018.

Cost of other fee-based services increased ~~13.9%~~15% and 13% during the three and nine months ended ~~March~~September 30, 2019, respectively, as compared to the same ~~period~~periods in 2018. This increase iswas primarily due to ~~the higher costs associated with programs provided to VOI owners~~increased cost reimbursement expense and the ~~increased costs of providing management services as a result~~timing of the ~~increase in the number of~~new managed ~~resorts. Bluegreen’s costs directly related to title operations were $1.2 million for each of the three months ended March 31, 2019 and 2018.~~resorts described above.

Net Carrying Cost of VOI Inventory. The carrying cost of Bluegreen’s VOI inventory was ~~$9.3~~$9.2 million and ~~$5.7~~$7.2 million during the three months ended ~~March 31,~~September 30, 2019 and 2018, respectively, which was ~~partly~~partially offset by rental and sampler revenues of ~~$1.6~~$3.3 million and ~~$3.2~~$4.3 million, respectively. The carrying cost of Bluegreen’s inventory was $26.7 million and $20.1 million during the nine months ended September 30, 2019 and 2018, respectively, which was partially offset by rental and sampler revenues of $7.8 million and $13.0 million, respectively. The increase in net carrying costs of VOI inventory was primarily ~~due~~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 ~~$65.2~~$87.4 million and ~~$65.7~~$235.6 million during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, and $85.0 million and $234.0 million during the three and nine months ended September 30, 2018, respectively. As a percentage of system-wide sales of VOIs, selling and marketing expenses increased to ~~50%~~51% during both the three and nine months ended September 30, 2019 from 49% during both the three and six months ended ~~March 31, 2019 and~~September 30, 2018, ~~respectively, primarily due to an~~respectively. The increase in selling and marketing expenses 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 ~~costs.~~ 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 the program based on the increase in fixed costs associated with the program and anticipated VOI sales volumes from this marketing channel. Should Bluegreen’s VOI sales volumes be below expectations, the increase in the costs of this marketing program would be higher than expected, and Bluegreen’s results of operations and cash flows would be adversely impacted.

General and Administrative Expenses. General and administrative expenses were ~~$25.0~~$29.8 million and ~~$27.9~~$119.5 million during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, and $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 ~~19%~~17% and ~~21%~~26% during the three and nine months ended ~~March 31,~~September 30, 2019 and 16% and 17% for the three and nine months ended September 30, 2018, respectively. ~~The decrease~~General and administrative expenses for the nine months ended September 30, 2019 include a charge of $39.1 million related to the 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, ~~period~~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 $2.1 million and $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 other income, net were primarily ~~due~~related to ~~lower self-insured health care costs, legal expenses,~~a land sale during June 2019, which resulted in a gain of $2.0 million, and ~~executive leadership compensation and severance expenses.~~ the receipt of $1.7 million in business interruption insurance proceeds in July 2019 related to a named hurricane in 2017.

BBX Capital Real Estate (or BBXRE) is engaged in the acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint 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 2012, including portfolios of loans receivable and real estate properties.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2019, BBXRE continued its development of the Beacon Lake Community in St. Johns County, Florida and sold to homebuilders the remaining 51 developed lots ~~to homebuilders as part of~~in Phase I of the project, which is comprised of 302 lots. In addition, BBXRE is currently developing the 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 ~~March 31,~~September 30, 2019, BBXRE had investments in nine active developments sponsored by the Altman Companies, ~~including five~~comprised of three developments that are stabilized or being leased and expected to be sold over the next two years, ~~three~~four developments that are under construction, and ~~a project~~two projects that isare currently in predevelopment stages.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2019, aBBXRE monetized certain of its investments in real estate joint ~~venture~~ventures that were sponsored by the Altman Companies, ~~closed on its permanent development financing and commenced construction of Altis at Suncoast,~~including the following:

BBXRE also continued to invest in new real estate joint ventures sponsored by the 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 ~~Tampa, Florida. The Altman Companies is providing development, general contractor,~~Palm Beach Gardens, Florida and ~~management services~~provided seller financing to the ~~venture in exchange~~buyer for ~~ongoing fee revenue, and BBXRE and JA have invested in the managing member~~a portion of the ~~venture.~~

~~In April 2019, the Altis at Lakeline joint venture, in which the Company held an investment which had~~sales price. As a ~~carrying amount~~result of ~~$4.2 million as of March 31, 2019, sold its 354 unit multifamily apartment community located in Cedar Park, Texas. In connection with~~ the sale, ~~the Company~~BBXRE recognized $2.8 million of equity earnings and received approximately ~~$9.0~~$2.3 million of distributions from the venture.

~~During the three months ended March 31, 2019,~~In addition, BBXRE invested in atwo new real estate joint ventures, including The Main Las Olas joint venture, which was formed to invest in the development of The Main Las Olas, a mixed-used ~~community located~~project in downtown Fort Lauderdale, Florida that ~~will~~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.~~retail, and the Sky Cove joint venture, which was formed to develop, construct, and sell 204 single-family homes in Westlake Florida. BBXRE ~~initially~~has invested ~~$1.5~~$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 ~~$2.5~~$2.1 million in The Main Las Olas joint venture as the development progresses.

In April 2019, the PGA Design Center joint venture, in which the Company held an investment which had a carrying amount of $0.7 million as of March 31, 2019, sold the remaining commercial buildings owned by the venture and provided seller financing to the buyer for a portion of the sales price. In connection with the sale, the Company received approximately $2.3 million of distributions from the venture.Other Real Estate Activity

~~In April~~During the nine 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 its remaining land parcels at PGA Station, which ~~had a carrying amount of $6.8 million as of March 31, 2019,~~were sold to the buyer of the commercial buildings sold by the PGA Design Center joint venture, as described ~~in the immediately preceding paragraph. In connection with the sale,~~above, BBXRE ~~received proceeds of $8.5 million and~~ reinvested $2.1 million of the proceeds in the PGA Lender joint venture, a joint venture formed with the PGA Design Center joint venture to ~~provide~~invest in the seller financing provided to the ~~buyer.~~

~~In May 2019, BBXRE sold RoboVault, a self-storage facility in Fort Lauderdale, Florida, which had a carrying amount of $6.9 million as of March 31, 2019. In connection with~~buyer by the ~~sale, BBXRE received net sales proceeds of approximately $11.8 million.~~

~~The transactions described above that occurred subsequent to March 31, 2019 are not reflected in BBXRE’s results of operations for the three months ended March 31, 2019.~~PGA Design Center joint venture.

Information regarding the results of operations for BBXRE ~~for the three months ended March 31, 2019 and 2018~~ is set forth below (dollars in thousands):

BBX Capital Real Estate’s income before income taxes for the three months ended ~~March 31,~~September 30, 2019 compared to the same 2018 period ~~decreased~~increased by ~~$9.6~~$27.2 million ~~or 79.9%,~~ 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:

During 2019, Renin continued to experience a shift in its customer mix ~~toward~~towards retail customers, including big box retailers, while its barn door ~~product has~~products have continued to increase as a percentage of its overall product mix. In particular, during the ~~three~~nine months ended ~~March 31,~~September 30, 2019, retail, commercial, and direct installation trade sales as a percentage of total gross trade sales were ~~72%~~64%, ~~20%~~26%, and 8%10%, respectively, as compared to 58%, ~~33%,~~32% and 9%10% during the ~~same~~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 sales. As a result, Renin’s sales of barn ~~doors and barn~~ door ~~hardware~~products as a percentage of total gross sales increased to ~~44%~~34% during the ~~three~~nine months ended ~~March 31,~~September 30, 2019 from ~~28%~~29% during the same 2018 period.

Information regarding the results of operations for Renin ~~for the three months ended March 31, 2019 and 2018~~ is set forth below (dollars in thousands):

Renin’s income before income taxes for the three months ended ~~March 31,~~September 30, 2019 was ~~$1.1~~$0.5 million compared to ~~a loss before income taxes of $30,000~~$0.7 million during the same 2018 period. The ~~increase~~decrease was primarily due to the following:

Renin’s income before income taxes for the nine months ended September 30, 2019 was $1.6 million compared to $0.7 million during the same 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 factors described above related to the three months ended September 30, 2019 and 2018.

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 ~~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 across the United States.

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 and a flagship location in Las Vegas that is expected to open during the second quarter of~~ 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 incurred a loss before income taxes for~~IT’SUGAR’s results of operations are subject to seasonal fluctuations, and the ~~three months ended March 31, 2019, which management~~

~~believes reflects the seasonal nature of~~third quarter has historically been its ~~trade sales.~~most profitable quarter. It is ~~also~~ 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 ~~three~~nine months ended ~~March 31,~~September 30, 2019 and is expected to continue to do so for the ~~balance~~remainder of 2019.

Information regarding the results of operations for IT’SUGAR ~~for the three months ended March 31, 2019 and 2018~~ is set forth below (dollars in thousands):

IT’SUGAR’s ~~loss~~income before income taxes ~~was $1.9 million~~ for ~~each of~~ the three months ended ~~March 31,~~September 30, 2019 ~~and~~was $1.2 million compared to $1.6 million during the same 2018 period, which reflects the following:

IT’SUGAR’s loss before income taxes for the nine months ended September 30, 2019 compared to the same 2018 period increased by $103,000 primarily due to the 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 the Company’s wholly-owned subsidiary, Food for Thought Restaurant Group, LLC (“FFTRG”), has entered into area development and franchise agreements pursuant to which the FFTRG has the opportunity to develop up to approximately 60 MOD Super Fast Pizza (“MOD Pizza”) franchised restaurant locations throughout Florida over the next several years. FFTRG currently operates nine MOD Pizza restaurant locations, including two that were opened during the three months ended March 31, 2019. FFTRG is evaluating the performance of its MOD Pizza restaurant locations to determine the number, if any, of new restaurant locations that it will open in the future. 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 ~~March 31,~~September 30, 2019 ~~and 2018~~ was ~~$1.1~~$1.3 million and ~~$2.5~~$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 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 ~~to streamline~~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 the Company pursues one or more of these strategic alternatives, the Company may recognize impairment charges and incur additional costs in future periods. As of ~~March 31,~~September 30, 2019, ~~the net book value of~~ the confectionery businesses currently under evaluation ~~was $4.7~~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 ~~March 31,~~September 30, 2019 ~~and 2018~~ was ~~$1.7~~$4.8 million and ~~$0.8~~$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 an impairment ~~loss~~losses of ~~$0.6~~$4.0 million ~~associated with property~~ and ~~equipment at a location that is performing below expectations, as well as costs incurred in connection with the opening of two new restaurant locations~~$6.7 million during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, primarily associated with the Company’s exit from its MOD Pizza restaurant operations during the third quarter of 2019.

Reconciling items and eliminations in the Company’s segment information includes the following:

BBX Capital’s corporate general and administrative expenses consist primarily of costs associated with administering the various support functions at its corporate headquarters, including executive compensation, legal, accounting, human resources, investor relations, and executive offices. BBX Capital’s corporate general and administrative expenses for the three and nine months ended ~~March 31,~~September 30, 2019 ~~and 2018~~ were ~~$12.3~~$12.0 million and ~~$13.1~~$36.6 million, ~~respectively.~~respectively, compared to $13.0 million and $38.7 million, respectively, for the comparable 2018 periods. The decrease in corporate general and administrative expenses for the three and nine months ended ~~March 31,~~September 30, 2019 compared to the same 2018 ~~period~~periods primarily reflects lower share-based compensation ~~costs~~expenses, reduced headcount, and ~~reduced headcount~~lower professional fees in the 2019 ~~period.~~periods.

Excluding its note payable to Bluegreen, BBX Capital’s interest expense for the three and nine months ended ~~March 31,~~September 30, 2019 ~~and 2018~~ was ~~$1.5~~$1.3 million and ~~$1.2~~$4.2 million, ~~respectively.~~respectively, compared to $1.7 million and $4.8 million, respectively, for the comparable 2018 periods. The ~~increase~~decrease in interest expense during the three and nine months ended ~~March 31,~~September 30, 2019 as compared to the same 2018 ~~period~~periods primarily ~~reflects~~resulted from the repayment of the outstanding balance of $30.0 million on BBX Capital’s $50.0 million revolving line of credit in January 2019, partially

offset by higher interest expense on Woodbridge’s junior subordinated debentures associated with ~~the impact of rising interest~~higher rates on the variable rates of interest on such debt ~~as well as interest expense and facility fees relating to BBX Capital’s $50.0 million revolving line of credit.~~during the 2019 periods.

BBX Capital’s interest expense on the $80.0 million note payable to Bluegreen was $1.2 million and $3.6 million for each of the three and nine months ended ~~March 31,~~September 30, 2019 and ~~2018.~~2018, respectively. The interest expense on this note and the related interest income recognized by Bluegreen are eliminated in the Company’s consolidated statements of operations.

During ~~each of~~ the three and nine months ended ~~March 31,~~September 30, 2019, ~~and 2018,~~ the Company recognized ~~$0.4~~$0.8 million and $1.9 million, respectively, of interest and investment income from BBX Capital’s interest-bearing cash ~~accounts.~~accounts and other investments compared to $0.6 million and $1.6 million, respectively, for the comparable 2018 periods.

The Company’s 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 ~~was 35% during the three months ended March 31, 2019 compared~~ to 33% during the same period in 2018. The Company’s effective tax rate was higher than the expected federal income tax rate of 21% due to nondeductible executive compensation and state income taxes. The Company’s effective tax rate was applied toits 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% 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 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 rate for the three and nine months ended September 30, 2019 and 2018 was higher than the expected federal income tax rate of 21% primarily due to nondeductible executive compensation and state income taxes.

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 ~~$3.1~~$4.1 million and ~~$4.6~~$11.3 million during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, compared to $5.8 million and $16.3 million, respectively, for the comparable 2018 ~~respectively.~~ periods. The decrease in net income attributable to noncontrolling interests for the three and nine months ended ~~March 31,~~September 30, 2019 compared to the same 2018 ~~period~~periods was primarily due to a decrease in ~~Bluegreen’s~~the net ~~income.~~ income of Bluegreen and Bluegreen/Big Cedar Vacations.

The Company’s operating cash flows ~~decreased $4.9~~increased by $16.8 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2019 compared to the same 2018 period. The ~~decrease~~increase was primarily due to an increase in operating distributions from real estate joint ventures and decreased ~~operating cash flows from BBX Capital Real Estate, including~~spending on the acquisition and development of VOI inventory, partially offset by the $20.0 million payment made to Bass Pro in June 2019 pursuant to the settlement agreement described above, an increase in payments for federal income taxes, and a decrease in proceeds from the sale of developed lots at the Beacon Lake Community ~~development, operating distributions from joint ventures, and interest payments from loan collections in the legacy asset portfolio.~~development.

The Company’s investing cash flows ~~decreased~~increased by ~~$30.3~~$22.6 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2019 compared to the same 2018 period. The ~~decrease~~increase reflects ~~a decline~~the impact of sales activity in ~~cash flows from investing activities from~~ BBX Capital Real ~~Estate, including~~Estate’s portfolio, which resulted in an increase in distributions from real estate joint ventures and higher net proceeds from the sale of real estate held-for-sale, and decreased spending by Bluegreen on property and equipment, partially offset by a ~~reduction~~decline in loan collections in the legacy asset portfolio and ~~proceeds from the sales of real estate assets, as well as~~ an increase in investments in real estate joint ventures. ~~In addition, the decrease reflects increased purchases of property and equipment at Bluegreen.~~

The Company’s cash used in financing activities increased by ~~$33.3~~$59.1 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2019 compared to the same 2018 period, which was primarily due to an increase in payments, net of borrowings, on the Company’s repayment of the outstanding balance of $30.0 million on BBX Capital’s revolving line of credit during the three months ended March 31, 2019 and lower proceeds from borrowings collateralized by Bluegreen’s notes receivable of $12.3 million,debt, partially offset by ~~lower repayments on Bluegreen’s credit facilities~~a net decrease of $51.2 million in payments for the purchase and ~~notes payable~~retirement of ~~$8.3 million.~~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 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. ~~Although more potential customers~~Due to consumer travel patterns, Bluegreen typically ~~visit Bluegreen’s~~experiences an increase in tours and VOI sales ~~offices~~ during the ~~quarters ending in June~~second and ~~September, recognition~~third quarters of the ~~resulting sales during these periods may be delayed due to applicable revenue recognition rules.~~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 ~~March 31,~~September 30, 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, ~~inventory purchase commitments under JIT arrangements,~~ 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 ~~March 31,~~September 30, 2019 (in thousands):



		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	$	-	6,488	49,674	388,094	(6,329)	437,927	$	-	14,503	94,163	333,609	(5,515)	436,760
Notes payable and other borrowings		36,338	93,323	12,504	29,223	(2,347)	169,041		14,273	111,863	7,591	29,202	(1,509)	161,420
Jr. subordinated debentures		-	-	-	177,129	(40,506)	136,623		-	-	-	177,129	(40,091)	137,038
Redeemable 5% cumulative preferred stock									5,000	5,000	-	-	(270)	9,730
Noncancelable operating leases		20,384	48,517	39,463	46,537	-	154,901		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		56,722	148,328	101,641	640,983	(49,182)	898,492		30,008	189,521	151,242	596,676	(47,385)	920,062

Interest Obligations (1)
Receivable-backed notes payable		17,433	34,695	31,241	107,853	-	191,222		17,683	35,109	29,603	93,671	-	176,066
Notes payable and other borrowings		7,746	12,611	2,800	14,626	-	37,783		7,736	10,577	3,400	21,643	-	43,356
Jr. subordinated debentures		12,619	25,237	25,237	150,371	-	213,464		11,977	23,954	23,954	136,694	-	196,579
Total contractual interest		37,798	72,543	59,278	272,850	-	442,469		37,396	69,640	56,957	252,008	-	416,001
Total contractual obligations	$	94,520	220,871	160,919	913,833	(49,182)	1,340,961	$	67,404	259,161	208,199	848,684	(47,385)	1,336,063

In lieu of paying maintenance fees for unsold VOI inventory, Bluegreen may enter into subsidy agreements with certain HOAs. During the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and 2018, Bluegreen made subsidy payments in connection with these arrangements of ~~$1.9 million. Bluegreen did not make any subsidy payments in connection with these arrangements during the three months ended March 31, 2018.~~$10.5 million and $2.2 million, respectively. As of September 30, 2019, Bluegreen had ~~$4.2~~accrued $8.0 million ~~accrued~~ for such subsidies, ~~included~~which is reflected in other liabilities in the Company’s condensed consolidated statement of financial ~~condition as of March 31, 2019.~~condition. As of December 31, 2018, Bluegreen had no accrued liabilities for such subsidies.

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.

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 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.

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 other means. As of March 31, 2019, Bluegreen sold 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~~a fixed annual fee of $70,000 for each Bass Pro ~~under the agreement on~~and Cabela’s retail store that Bluegreen is accessing (excluding sales ~~made~~ at ~~Bluegreen/Big Cedar Vacations’ resorts although~~retail stores which are designated to provide tours to Bluegreen/Big Cedar Vacations, ~~pays~~or “Bluegreen/Big Cedar feeder stores”), plus $32.00 per net vacation package sold (less cancellations or refunds within 45 days of sale). Bluegreen 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 ~~affiliate~~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 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, provided that the minimum number of Bass Pro ~~brand licensing~~ and ~~marketing fees on certain of these sales. During the three months ended March 31, 2019 and 2018, VOI sales to prospects and leads generated by the agreement with Bass Pro accounted~~Cabela’s retail stores for ~~approximately 12% of Bluegreen’s VOI sales volume.~~

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 datepurposes of the ~~notice unless Bluegreen cured~~fixed annual fee may be reduced under certain ~~alleged breaches to Bass Pro’s satisfaction.~~

~~The alleged breaches cited~~circumstances set forth in the notice included those previously disclosed by Bluegreen, and specifically Bass Pro’s belief that the amounts paid to it as VOI sales commissions should not have been adjusted for certain purchaser defaults, breaches regarding the calculation of commissions and other amounts payable under the marketingsettlement agreement, ~~and other related agreements,~~ including reimbursements paid to Bluegreen, as well as matters regarding the operations at Bluegreen/Big Cedar Vacations. In addition, the notice referenced a breach Bass Pro alleged in 2014 regarding customer service. Bluegreen sent a response to Bass Pro with respect to each of these issues prior to the expiration of the cure period.

~~On April 17, 2019, Bass Pro, LLC and Big Cedar, LLC brought an action against~~ ~~Bluegreen Vacations Unlimited, Inc. (“BVU”), a wholly-owned subsidiary of Bluegreen.~~ See Note 10: Commitments and Contingencies for additional information regarding this matter. The parties are continuing to attempt to resolve the outstanding issues and to date Bass Pro has not cancelled Bluegreen’s access to Bass Pro Marketing channels and advertising materials. However, if the issues with Bass Pro are not resolved, Bluegreen’s results will be adversely impacted, and Bluegreen intends, in that case, to pursue all remedies available to it, including pursuing recovery of damages suffered as a result of ~~Bass Pro’s actions.~~ a reduction of traffic in the stores in 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 ofto the Company’s condensed consolidated financial statements included in Item 1 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 ~~March 31,~~September 30, 2019 and December 31, 2018, the Company, excluding Bluegreen, had cash, cash equivalents and short-term investments of approximately ~~$106.4~~$185.6 million and $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, proceeds received from 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, 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 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 ~~three~~nine months ended ~~March 31,~~September 30, 2019 and 2018, BBX Capital received from Bluegreen dividends totaling $~~11.4~~34.3 million and ~~$10.1~~$30.3 million, respectively. In addition, Bluegreen has indicated that it intends to pay regular quarterly dividends on its common stock subject to the 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~~nine months ended ~~March 31,~~September 30, 2019 and 2018, BBX Capital received ~~$4.0~~$13.0 million ~~of tax sharing payments from Bluegreen,~~ and ~~on April 1, 2019, BBX Capital received $2.3~~$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, 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.~~

In March 2019, BBX Capital announced its intention to take Bluegreen private through a statutory short-form merger under Florida law pursuant to which BBX Capital would acquire all of the outstanding shares of Bluegreen’s common stock not currently owned by BBX Capital. If the proposed merger is completed, Bluegreen would become a wholly-owned subsidiary of BBX Capital, and each share of Bluegreen’s common stock outstanding at the effective time of the merger, other than shares beneficially owned by BBX Capital and shareholders who duly exercise and perfect appraisal rights in accordance with Florida law, would be converted into the right to receive $16.00 per share in cash (an aggregate of $115.0 million). On March 25, 2019, BBX Capital announced that it is re-evaluating whether to proceed with the merger in light of the notice from Bass Pro, Inc. that it intends to cancel Bluegreen’s access to the Bass Pro marketing channels and advertising materials if certain alleged breaches are not cured to Bass Pro’s satisfaction. The merger may be terminated in the discretion of BBX Capital’s board of directors at any time before it becomes effective, and there is no assurance that the transaction will be consummated on the proposed terms, or at all.stock.

In November 2018, BBXRE acquired a 50% membership interest in the Altman Companies, a joint venture between the Company and JA engaged in the development, construction, and 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 the development projects that it originates, it is expected to generate profits for BBXRE and JA primarily through the equity distributions that BBXRE and JA receive through their investment in the managing member of 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, ~~while BBXRE expects that it will monetize its investment in various existing joint ventures during 2019, including the Altis at Bonterra joint venture,~~ BBXRE anticipates that it will invest approximately ~~$3.0~~$2.5 million to ~~$4.0~~$3.5 million in the Altman Companies and related joint ventures during the remainder of 2019 related to planned predevelopment expenditures, ~~and~~ investments in new joint ~~ventures.~~ventures, and ongoing operating costs. In addition, BBXRE currently anticipates that it will contribute an additional ~~$2.0~~$1.0 million to ~~$3.0~~$2.0 million to ABBX Guaranty, LLC, a ~~newly formed~~ joint venture ~~established to provide~~between BBXRE and JA that provides guarantees on the indebtedness and construction cost overruns of new real estate joint ventures formed by the Altman Companies.

Pursuant to the operating agreement of the Altman Companies, BBXRE will also acquire an additional 40% equity interest in the Altman Companies from JA for a purchase price of $9.4 million in January 2023, while JA can also, at his option or in other predefined circumstances, require BBXRE to purchase his remaining 10% equity interest in the Altman Companies for $2.4 million. 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 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 Company expects to contribute additional capital of approximately $9.0 million to $10.0 million during the next twelve to eighteen months based on the current plans and estimates associated with the related development projects.

IT’SUGAR opened ~~one~~two retail ~~store~~stores during the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and currently expects to open ~~an additional two to three stores~~a flagship location at American Dream in New Jersey in November 2019 and to renovate certain existing stores during the remainder of 2019. In connection with the anticipated store ~~openings~~opening and renovation of these existing stores, IT’SUGAR expects to incur approximately $4$3.0 million to $5$4.0 million of capital expenditures, net of tenant allowance reimbursements, ~~during~~for the ~~year ended December 31,~~remainder of 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 March 31, 2019, nine locations had been opened. The Company is currently evaluating the number of additional stores, if any, it will open in the future. ~~On average, the Company incurred approximately $0.8 million in capital expenditures, net of tenant improvement allowances, and approximately $0.1 million in store opening costs to open a location.~~

BBX Capital has previously indicated its intention to declare regular quarterly dividends on its Class A and Class B Common 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 $0.0125 per quarter per share on its Class A and Class B Common Stock, which is an increase from the $0.01 per share regular quarterly dividend ~~previously~~ paid by the ~~Company.~~Company during 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 operations, ~~of the Company,~~ 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’s Class A Common Stock and Class B Common Stock at an aggregate cost of no more than $35.0 million. This program authorizes management, at its discretion, to ~~repurchase~~purchase shares from time to time subject to market conditions and other factors. ~~There were no share repurchases during~~During the ~~three~~nine months ended ~~March 31, 2019.~~

September 30, 2019, BBX Capital purchased 1,799,539 shares of its Class A Common Stock for approximately $8.9 million. As of ~~March 31,~~September 30, 2019, ~~the Company~~BBX Capital had ~~outstanding 10,000~~purchased 3,321,132 shares of ~~5% Cumulative Preferred~~its Class A Common Stock ~~with a stated value of $1,000 per~~for approximately $18.9 million pursuant to the June 2017 share ~~of which 5,000 shares are required to be redeemed on December 31, 2019 and the remaining 5,000 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 it more vulnerable to downturns in the economy and may subject the Company to covenants or restrictions on its operations and activities.

As of ~~March 31,~~September 30, 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 and 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 ~~March 31,~~September 30, 2019, there were no borrowings outstanding under the credit facility.

Toronto-Dominion Commercial Bank. In May 2017, Renin entered into a credit facility with TD 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 ~~March 31,~~September 30, 2019, the outstanding amounts under the term loan and revolving credit facility were ~~$1.1~~$0.8 million and ~~$7.0~~$7.5 million, respectively, with effective interest rates of 5.92% and ~~were bearing interest at an effective rate of 5.94% and 5.48%~~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. As of ~~March 31,~~September 30, 2019, there were no borrowings outstanding under the ~~revolving~~ credit ~~facility had an outstanding balance of $1.6 million.~~ 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 ~~March 31,~~September 30, 2019, there was one equipment note outstanding with a balance of ~~$0.5~~$0.4 million.

As of ~~March 31,~~September 30, 2019, BBX Capital and its subsidiaries (other than Bluegreen) had availability of approximately ~~$59.0~~$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 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.

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 critical 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. Development expenditures during the remainder of 2019 are expected to be in a range of ~~$25.0~~$10.0 million to ~~$30.0~~$15.0 million, which primarily relate to ~~developments~~development at one of the Bluegreen/Big Cedar Vacations’ ~~resort, development~~resorts, refurbishments at ~~the Fountains resort~~Bluegreen’s Blue Ridge Village Resort in ~~Orlando, Florida,~~Banner Elk, North Carolina and refurbishments at 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. Acquisitions of JIT and secondary market inventory during the remainder of 2019 isare expected to range from ~~$13.0~~$1.0 million to ~~$18.0~~$5.0 million.

In addition, capital expenditures in connection with sales and marketing facilities as well as for information technology capital expenditures are expected to be between ~~$15.0~~$5.0 million and ~~$20.0~~$10.0 million 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.

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.

Bluegreen maintains various credit facilities with financial institutions which allow Bluegreen to borrow against or sell its VOI notes receivable. As of ~~March 31,~~September 30, 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 ~~March 31,~~September 30, 2019, outstanding borrowings under the facility (prior to the October 2019 amendment and repayment) totaled ~~$77.0~~$96.1 million, including ~~$22.0~~$21.1 million under the Fifth Third Syndicated Term Loan with an interest rate of ~~5.25%~~5.08%, and ~~$55.0~~$75.0 million under the Fifth Third Syndicated Line of Credit with an interest rate of ~~5.24%.~~

~~NBA Éilan Loan~~4.88%. 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 with NBA (the “NBA Éilan Loan”), which provides for advances of up to $27.5 million, $24.3 million of which was used to fund the acquisition of the resort and $1.7 million of which was used to fund certain improvement costs with approximately $0.4 million drawn upon through April 2019 to fund certain other improvement costs. The ability to borrow under the NBA Éilan Loan expired in April 2019. Principal payments are effected through release payments from sales of VOIs at 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 Loan accrue interest at an annual rate equal to one-month LIBOR plus 3.25%, subject to a floor of 4.75%. As of March 31, 2019, there was $23.6 million outstanding on the NBA Éilan Loan.

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

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 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 ~~March 31,~~September 30, 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.

~~Except for the addition of certain controls in connection with the adoption of Financial Accounting Standard Board Accounting Standards Codification Topic 842,~~ ~~Leases, there~~There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~March 31,~~September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except for 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, ~~2018.~~2018, as updated in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019.

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 Mike Ericson v. Bluegreen Corporation, Case No.: 2018CA004782, 15 Judicial Circuit Court, Palm Beach County, Florida

On ~~February 28, 2018, Oscar Hernandez~~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 ~~Estella Michael~~Mike Ericson, individually and on behalf of all other similarly situated, filed a purported class action ~~litigation~~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 ~~San Bernardino Superior~~connection with Bluegreen’s sales of 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 Court ~~against~~entered an order granting Bluegreen’s summary judgment and dismissed all claims.

On March 15, 2018, Bluegreen Vacations Unlimited ~~Inc.~~ (“BVU”), aBluegreen’s wholly-owned subsidiary, entered into an Agreement for Purchase and Sale of Bluegreen. The central claims in the complaint, as amended during June 2018, include alleged failures to pay overtime and wages at termination and to provide meal and rest periods; as well as claims relating to non-compliant wage statements and unreimbursed business expenses; and a claim under the Private Attorney’s General Act. Plaintiffs seek to represent a class of approximately 660 hourly, non-exempt employees who worked in the state of California since March 1, 2014. An initial case management conference was held and discovery was stayed pending completion of mediation. BVU intends to file a motion enforcing pre-dispute arbitration agreements, should the matter not settle, and to challenge class certification.

~~On April 17, 2019, Bass Pro,~~Assets with T. Park Central, LLC, O. Park Central, LLC, and ~~Big Cedar,~~New York Urban Ownership Management, LLC ~~brought an action~~(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 ~~failed~~is a member) is obligated to pay ~~certain commissions due it~~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’ ~~marketing agreement, improperly charged a tour generation fee~~Purchase and ~~that its conduct~~Sale Agreement. New York Urban is also seeking damages in the ~~Bass Pro stores breached its contractual commitments. Bass Pro seeks damages in an amount~~arbitration proceedings in excess of ~~$10~~$10.0 million ~~plus interest~~for promissory estoppel and ~~attorneys’ fees,~~tortious interference. BVU has denied New York Urban’s claims and ~~such additional relief~~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 ~~the court determines. BVU believes that this lawsuit is without merit~~its sole and ~~intends to vigorously defend the action.~~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 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)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $.01 par value (including associated Preferred Share Purchase Rights)	BBX	New York Stock Exchange
~~Class B Common Stock, $.01 par value (including associated Preferred Share Purchase Rights)~~	~~BBXT~~	~~OTCQX Best Market~~


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 ~~March 31,~~September 30, 2019 and December 31, 2018 - Unaudited	1

	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended ~~March 31,~~September 30, 2019 and 2018 - Unaudited	2

	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended ~~March 31,~~September 30, 2019 and 2018 - Unaudited	3

	Condensed Consolidated Statements of Cash Flows for the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2019 and 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	2933

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	5558

Item 4.	Controls and Procedures	5558

Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings	5658

Item 1A.	Risk Factors	5659

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

Item 6.	Exhibits	5660

	Signatures	5761



BBX Capital Corporation
Condensed Consolidated Statements of Changes in Equity - Unaudited
For the Three Months Ended March 31, 2018 and 2019
(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 $221 of loss attributable to redeemable noncontrolling interest	-	-		-	-	-	11,142	-	11,142	4,781	15,923
Other comprehensive income	-	-		-	-	-	-	(28)	(28)	-	(28)
Distributions to noncontrolling interests	-	-		-	-	-	-	-	-	(1,121)	(1,121)
Increase in noncontrolling interest from loan foreclosure	-	-		-	-	-	-	-	-	704	704
Class A Common Stock cash dividends declared	-	-		-	-	-	(857)	-	(857)	-	(857)
Class B Common Stock cash dividends declared	-	-		-	-	-	(197)	-	(197)	-	(197)
Conversion of common stock from Class B to Class A	20	(20)		-	-	-	-	-	-	-	-
Share-based compensation	-	-		-	-	3,452	-	-	3,452	-	3,452
Balance, March 31, 2018	85,709	13,943	$	857	140	231,783	364,772	1,428	598,980	86,418	685,398

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 $220 of loss attributable to redeemable noncontrolling interest	-	-		-	-	-	1,499	-	1,499	3,359	4,858
Other comprehensive income	-	-		-	-	-	-	129	129	-	129
Distributions to noncontrolling interests	-	-		-	-	-	-	-	-	(1,220)	(1,220)
Class A Common Stock cash dividends declared	-	-		-	-	-	(989)	-	(989)	-	(989)
Class B Common Stock cash dividends declared	-	-		-	-	-	(242)	-	(242)	-	(242)
Share-based compensation	-	-		-	-	3,049	-	-	3,049	-	3,049
Balance, March 31, 2019	78,379	14,841	$	784	148	164,733	383,855	1,344	550,864	90,127	640,991

See Notes to Condensed Consolidated Financial Statements - Unaudited



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


		For the Three Months Ended March 31,
		2019	2018
Operating activities:
Net income	$	4,638	15,702
Adjustment to reconcile net income to net cash
provided by operating activities:
Recoveries from loan losses, net		(961)	(4,813)
Provision for notes receivable allowances		11,145	8,006
Depreciation, amortization and accretion, net		6,875	6,017
Share-based compensation expense		3,049	3,452
Net gains on sales of real estate assets		(1,332)	(4,070)
Equity in losses (earnings) of unconsolidated real estate joint ventures		17	(1,280)
Return on investment in unconsolidated real estate joint ventures		277	2,058
Increase in deferred income tax		1,093	6,612
Impairment losses		618	232
Interest accretion on redeemable 5% cumulative preferred stock		209	446
Increase in notes receivable		(7,607)	(5,264)
Increase in VOI inventory		(8,237)	(9,673)
Increase in trade inventory		(613)	(685)
Decrease in real estate inventory		2,192	5,690
Increase in other assets		(6,726)	(6,353)
Decrease in other liabilities		(11,203)	(17,759)
Net cash used in operating activities		(6,566)	(1,682)
Investing activities:
Return of investment in unconsolidated real estate joint ventures		2,068	1,672
Investments in unconsolidated real estate joint ventures		(4,920)	(57)
Repayment of loans receivable		1,179	15,170
Proceeds from sales of real estate held-for-sale		1,936	11,943
Additions to real estate held-for-sale and held-for-investment		(289)	(193)
Purchases of property and equipment		(9,693)	(8,075)
Proceeds from the sale of property and equipment		-	280
Decrease in cash from other investing activities		(42)	(183)
Net cash (used in) provided by investing activities		(9,761)	20,557
			(Continued)



		For the Three Months Ended			For the Nine Months Ended
		March 31,			September 30,
		2019	2018		2019	2018
Balance, beginning of period	$	134,223	123,791	$	134,222	123,791
Provision for loan losses		11,145	8,006		39,462	35,866
Write-offs of uncollectible receivables		(8,462)	(9,100)		(38,339)	(31,358)
Balance, end of period	$	136,906	122,697	$	135,345	128,299



BBX Capital	$	50,000
Bluegreen		~~191,100~~131,196
Renin		~~6,600~~3,668
IT'SUGAR		~~2,400~~4,000
Total credit availability	$	~~250,100~~188,864



		As of
		~~March 31,~~September 30, 2019
Operating lease assets	$	~~113,536~~110,435
Operating lease liabilities	$	~~124,472~~124,129
Weighted average remaining lease term (years)		~~6.37~~6.5
Weighted average discount rate (1)		~~5.37~~5.33	%



		~~For the Three~~
		~~Months Ended~~
		~~March 31, 2019~~
~~Fixed lease costs~~	$	~~7,321~~
~~Short-term lease costs~~		~~1,170~~
~~Variable lease costs~~		~~2,227~~
~~Total operating lease costs~~	$	~~10,718~~



		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	$	20,384	$	6,735
2020		25,047		25,671
2021		23,470		24,484
2022		21,437		22,343
2023		18,026		19,145
After 2023		46,537		56,736
Total lease payments		154,901		155,114
Less: interest		30,429		30,985
Present value of lease liabilities	$	124,472	$	124,129



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



				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
		March 31,	March 31,	Assets	Inputs	Inputs		September 30,	September 30,	Assets	Inputs	Inputs
		2019	2019	(Level 1)	(Level 2)	(Level 3)		2019	2019	(Level 1)	(Level 2)	(Level 3)
Financial assets:
Cash and cash equivalents	$	296,317	296,317	296,317	-	-	$	368,818	368,818	368,818	-	-
Restricted cash		45,357	45,357	45,357	-	-		48,597	48,597	48,597	-	-
Notes receivable, net		435,629	556,000	-		556,000		445,706	587,000	-		587,000
Financial liabilities:
Receivable-backed notes payable	$	437,927	452,300	-		452,300	$	436,760	456,600	-		456,600
Notes payable and other borrowings		169,041	175,591	-		175,591		161,420	169,366	-		169,366
Junior subordinated debentures		136,623	126,800	-		126,800		137,038	149,500	-		149,500
Redeemable 5% cumulative preferred stock		9,556	9,538	-		9,538		9,730	9,538	-		9,538



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



		March 31,	December 31,		September 30,	December 31,
		2019	2018		2019	2018
Current	$	538,368	541,783	$	547,425	541,783
31-60 days		5,328	5,783		6,797	5,783
61-90 days		4,511	4,516		5,271	4,516
> 90 days (1)		23,523	20,410
> 91 days (1)					20,864	20,410
Total	$	571,730	572,492	$	580,357	572,492



	For the Twelve Months Ended March 31,		For the Twelve Months Ended September 30,
	2019	2018	2019	2018
Average annual default rates	8.18%	8.35%	8.59%	8.41%

	As of March 31,		As of September 30,
	2019	2018	2019	2018
Delinquency rates	2.89%	2.75%	3.31%	2.79%



		Borrowing Limit as of March 31, 2019		Outstanding Balance as of March 31, 2019		Availability as of March 31, 2019		Advance Period Expiration; Borrowing Maturity as of March 31, 2019	Borrowing Rate; Rate as of March 31, 2019		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	$	19,766	$		30,234	March 2020; March 2023	Prime Rate; floor of 4.00%; 5.50%	$	50,000	$	28,247	$		21,753	March 2020; March 2023	Prime Rate; floor of 4.00%; 5.25%
NBA Receivables Facility		70,000		43,255			26,745	September 2020; March 2025	30 day LIBOR + 2.75%; floor of 3.50%; 5.25%		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		11,723			28,277	September 2021; September 2024	30 day LIBOR+2.75% to 3.00%; 5.50%		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		7,297			72,703	December 2019; December 2022	30 day LIBOR+2.75%; 5.23% (1)		80,000		19,035			60,965	December 2019; December 2022	30 day LIBOR+2.75%; 4.84% (1)
Quorum Purchase Facility		50,000		36,824			13,176	June 2020; December 2032	(2)		50,000		44,865			5,135	June 2020; December 2032	(2)
	$	290,000	$	118,865	$		171,135			$	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