PART I – FINANCIAL INFORMATION

Item 1. Financial Statements



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

					March 31,		December 31,
		September 30, 2019	December 31, 2018		2020		2019
ASSETS
Cash and cash equivalents	$	368,818	366,305		$	397,518		356,604
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
Restricted cash ($17,456 in 2020 and $22,534 in 2019 in variable interest entities ("VIEs"))						34,719		50,266
Notes receivable						585,159		589,198
Less: Allowance for loan losses						(155,166)		(140,630)
Notes receivable, net ($288,435 in 2020 and $292,590 in 2019 in VIEs)						429,993		448,568
Trade inventory		25,126	20,110			22,531		22,843
Vacation ownership interest ("VOI") inventory		346,821	334,149			347,293		346,937
Real estate ($12,074 in 2019 and $20,202 in 2018 held for sale)		59,574	54,956
Real estate ($11,348 in 2020 and $11,297 in 2019 held for sale)						63,098		65,818
Investments in unconsolidated real estate joint ventures		53,739	64,738			59,373		57,330
Property and equipment, net		131,422	139,628			129,536		129,686
Goodwill		37,248	37,248			14,864		37,248
Intangible assets, net		68,342	69,710			68,026		68,186
Operating lease assets		110,435	-			103,108		109,351
Other assets		121,610	124,217			106,437		98,134
Total assets	$	1,817,438	1,705,020		$	1,776,496		1,790,971

LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	29,206	29,537		$	27,821		25,957
Deferred income		20,323	16,522			15,343		18,074
Escrow deposits		25,149	22,255			12,900		22,711
Other liabilities		128,318	104,441			91,988		120,362
Receivable-backed notes payable - recourse		94,904	76,674			80,473		88,569
Receivable-backed notes payable - non-recourse (in VIEs)		341,856	382,257			339,224		334,246
Notes payable and other borrowings		161,420	200,887			265,689		188,731
Junior subordinated debentures		137,038	136,425			137,476		137,254
Operating lease liabilities		124,129	-			121,300		123,430
Deferred income taxes		90,695	86,363			81,492		87,558
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		9,730	9,472
Total liabilities		1,162,768	1,064,833			1,173,706		1,146,892
Commitments and contingencies (See Note 11)
Commitments and contingencies (See Note 12)
Redeemable noncontrolling interest		2,229	2,579			1,863		4,009
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 76,580,091 in 2019 and 78,379,530 in 2018		766	784
issued and outstanding 75,663,645 in 2020 and 75,530,331 in 2019						757		755
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
issued and outstanding 15,824,539 in 2020 and 15,957,853 in 2019						158		160
Additional paid-in capital		162,183	161,684			154,339		152,775
Accumulated earnings		392,167	385,789			365,690		394,551
Accumulated other comprehensive income		1,420	1,215			967		1,554
Total shareholders' equity		556,684	549,620			521,911		549,795
Noncontrolling interests		95,757	87,988			79,016		90,275
Total equity		652,441	637,608			600,927		640,070
Total liabilities and equity	$	1,817,438	1,705,020		$	1,776,496		1,790,971


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


BBX Capital Corporation
Condensed Consolidated Statements of Changes in Equity - Unaudited
For the Three Months Ended March 31, 2019 and 2020
(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, 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

Balance, December 31, 2019	75,530	15,958	$	755	160	152,775	394,551	1,554	549,795	90,275	640,070
Net loss excluding $2,743 of loss attributable to redeemable noncontrolling interest	—	—		—	—	—	(28,310)	—	(28,310)	238	(28,072)
Other comprehensive loss	—	—		—	—	—	—	(587)	(587)	—	(587)
Bluegreen purchase and retirement of its common stock	—	—		—	—	(1,167)	—	—	(1,167)	(10,574)	(11,741)
Distributions to noncontrolling interests	—	—		—	—	—	—	—	—	(923)	(923)
Accretion of redeemable noncontrolling interest	—	—		—	—	—	(551)	—	(551)	—	(551)
Conversion of common stock from Class B to Class A	133	(133)		2	(2)	—	—	—	—	—	—
Share-based compensation	—	—		—	—	2,731	—	—	2,731	—	2,731
Balance, March 31, 2020	75,663	15,825	$	757	158	154,339	365,690	967	521,911	79,016	600,927

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


	For the Three Months Ended March 31,
	2020		2019
Operating activities:
Net (loss) income	$	(30,815)		4,638
Adjustment to reconcile net income to net cash
used in operating activities:
Recoveries from loan losses, net		(3,512)		(961)
Provision for notes receivable allowances		30,353		11,145
Depreciation, amortization and accretion, net		6,902		6,875
Share-based compensation expense		2,731		3,049
Net losses (gains) on sales of real estate and property and equipment		3		(1,332)
Equity (earnings) losses of unconsolidated real estate joint ventures		(551)		17
Return on investment in unconsolidated real estate joint ventures		1,430		277
(Decrease) increase in deferred income tax		(6,052)		1,093
Impairment losses		28,283		618
Interest accretion on redeemable 5% cumulative preferred stock		—		209
Increase in notes receivable		(11,184)		(7,607)
Increase in VOI inventory		(356)		(8,237)
Decrease (increase) in trade inventory		312		(613)
Decrease in real estate inventory		1,241		2,192
Net change in operating lease asset and operating lease liability		294		—
Increase in other assets		(10,582)		(6,726)
Decrease in other liabilities		(38,491)		(11,203)
Net cash used in operating activities		(29,994)		(6,566)
Investing activities:
Return of investment in unconsolidated real estate joint ventures		—		2,068
Investments in unconsolidated real estate joint ventures		(2,922)		(4,920)
Proceeds from repayment of loans receivable		3,909		1,179
Proceeds from sales of real estate held-for-sale		100		1,936
Additions to real estate held-for-sale and held-for-investment		(51)		(289)
Purchases of property and equipment		(6,549)		(9,693)
Decrease in cash from other investing activities		—		(42)
Net cash used in investing activities		(5,513)		(9,761)
				(Continued)

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

For the Nine Months Ended
September 30,

2019

2018

Operating activities:

Net income
$
23,514

40,126

Adjustment to reconcile net income to net cash

provided by operating activities:

Recoveries from loan losses, net

(4,206)

(7,258)

Provision for notes receivable allowances

39,462

35,866

Depreciation, amortization and accretion, net

21,150

18,557

Share-based compensation expense

9,379

10,717

Net gains on sales of real estate

(11,395)

(4,798)

Equity earnings of unconsolidated real estate joint ventures

(37,276)

(1,165)

Return on investment in unconsolidated real estate joint ventures

38,020

5,233

Increase in deferred income tax

5,210

20,465

Impairment losses

6,786

549

Interest accretion on redeemable 5% cumulative preferred stock

633

854

Increase in notes receivable

(46,001)

(48,492)

Increase in VOI inventory

(12,672)

(23,405)

(Increase) decrease in trade inventory

(5,016)

2,286

(Increase) decrease in real estate inventory

(2,865)

9,990

Net change in operating lease asset and operating lease liability

1,134

-

Increase in other assets

(3,852)

(24,712)

Increase in other liabilities

38,389

8,774

Net cash provided by operating activities

60,394

43,587

Investing activities:

Return of investment in unconsolidated real estate joint ventures

30,331

6,586

Investments in unconsolidated real estate joint ventures

(20,076)

(1,755)

Proceeds from repayment of loans receivable

4,766

17,930

Proceeds from sales of real estate held-for-sale

20,374

17,121

Proceeds from sales of property and equipment

15,011

569

Additions to real estate held-for-sale and held-for-investment

(438)

(1,102)

Purchases of property and equipment

(26,286)

(33,316)

Decrease in cash from other investing activities

(73)

(5,072)

Net cash provided by investing activities

23,609

961

(Continued)


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


	For the Three Months Ended March 31,
	2020		2019
Financing activities:
Repayments of notes payable and other borrowings		(44,076)		(75,493)
Proceeds from notes payable and other borrowings		118,943		14,791
Payments for debt issuance costs		(185)		(115)
Payments of interest of redeemable 5% cumulative preferred stock		—		(125)
Purchase and retirement of subsidiary common stock		(11,741)		—
Dividends paid on common stock		(1,144)		(934)
Distributions to noncontrolling interests		(923)		(1,220)
Net cash provided by (used in) financing activities		60,874		(63,096)
Increase (decrease) in cash, cash equivalents and restricted cash		25,367		(79,423)
Cash, cash equivalents and restricted cash at beginning of period		406,870		421,097
Cash, cash equivalents and restricted cash at end of period	$	432,237		341,674

Supplemental cash flow information:
Interest paid on borrowings, net of amounts capitalized	$	9,095		9,745
Income taxes paid		217		862
Supplementary disclosure of non-cash investing and financing activities:
Construction funds receivable transferred to real estate		—		2,288
Operating lease assets recognized upon adoption of ASC 842		—		113,183
Operating lease liabilities recognized upon adoption of ASC 842		—		123,240
Operating lease assets obtained in exchange for new operating lease liabilities		3,139		5,864
Increase in other assets upon issuance of Community Development District Bonds		185		8,110
Assumption of Community Development District Bonds by builders		1,532		1,035
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents		397,518		296,317
Restricted cash		34,719		45,357
Total cash, cash equivalents, and restricted cash	$	432,237		341,674

See Notes to Condensed Consolidated Financial Statements - Unaudited

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

For the Nine Months Ended
September 30,

2019

2018

Financing activities:

Repayments of notes payable and other borrowings

(171,061)

(152,204)

Proceeds from notes payable and other borrowings

99,921

196,439

Payments for debt issuance costs

(351)

(1,131)

Payments of interest on redeemable 5% cumulative preferred stock

(375)

(438)

Purchase and retirement of Class A common stock

(8,898)

(60,141)

Purchase of noncontrolling interest

-

(258)

Proceeds from the exercise of stock options

-

245

Dividends paid on common stock

(3,257)

(2,822)

Distributions to noncontrolling interests

(3,664)

(8,263)

Net cash used in financing activities

(87,685)

(28,573)

(Decrease) increase in cash, cash equivalents and restricted cash

(3,682)

15,975

Cash, cash equivalents and restricted cash at beginning of period

421,097

409,247

Cash, cash equivalents and restricted cash at end of period
$
417,415

425,222

Supplemental cash flow information:

Interest paid on borrowings, net of amounts capitalized
$
30,252

27,807

Income taxes paid

10,873

3,103

Supplementary disclosure of non-cash investing and financing activities:

Construction funds receivable transferred to real estate

15,890

8,716

Acquisition of VOI inventory, property and equipment for notes payable

-

24,258

Loans receivable transferred to real estate

333

1,673

Reduction in note receivable from holder of redeemable 5% cumulative preferred stock

-

(5,000)

Reduction in redeemable 5% cumulative preferred stock

-

4,862

Increase in other assets upon issuance of Community Development District Bonds

8,110

-

Assumption of Community Development District Bonds by builders

1,035

4,573

Reconciliation of cash, cash equivalents and restricted cash:

Cash and cash equivalents

368,818

369,512

Restricted cash

48,597

55,710

Total cash, cash equivalents, and restricted cash
$
417,415

425,222

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%~~83% and ~~16%~~17%, respectively, at ~~September 30, 2019.~~March 31, 2020. 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.

Financial statements prepared in conformity with GAAP require the Company to make estimates based on assumptions about current and, for some estimates, future economic and market conditions which affect reported amounts and related disclosures in the Company’s financial statements. Due to, among other things, the impact and potential future impact of the ongoing novel coronavirus disease (“COVID-19”) pandemic, which is discussed in more detail throughout this report, actual conditions could differ from the Company’s expectations and estimates, which could materially affect the Company’s results of operations and financial condition. The severity, magnitude, and duration, as well as the economic consequences, of the COVID-19 pandemic, are uncertain, rapidly changing, and difficult to predict. As a result, the Company’s accounting estimates and assumptions may change over time in response to COVID-19. Such changes could result in, among other adjustments, future impairments of goodwill, intangibles, and long-lived assets, inventory reserves, and incremental changes in the Company’s allowance for loan losses.

In management’s opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments, which include normal recurring adjustments, that are necessary for a fair statement of the condensed consolidated financial condition of the Company at ~~September 30, 2019;~~March 31, 2020; the condensed consolidated results of operations and comprehensive income of the Company for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018;~~2019; the condensed consolidated changes in equity of the Company for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018;~~2019; and the condensed consolidated cash flows of the Company for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019. Operating results for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2019~~2020 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~~2019 (the ~~“2018~~“2019 Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on March ~~12, 2019.~~13, 2020.

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. The reclassification had no impact on the Company’s statements of operations and comprehensive income or statements of cash flows.

Principal Investments

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

Bluegreen

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,~~Charleston, among others. Through its points-based system, the approximately ~~219,000~~221,000 owners in Bluegreen’s Vacation Club have the flexibility to stay at units available at its resorts and have access to over 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 for 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.

During the three months ended March 31, 2020, Bluegreen repurchased and retired 1,878,400 shares of its common stock for $11.7 million. As of March 31, 2020, the Company owns approximately 93% of Bluegreen’s common stock.

BBX Capital Real Estate

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.~~ventures, including investments in multifamily apartment and townhome communities, single-family master-planned communities, and commercial properties located primarily in Florida. In addition, BBX Capital Real Estate owns a 50% equity interest in The Altman Companies, LLC (the “Altman Companies”), a developer and manager of multifamily apartment communities, and manages the legacy assets acquired in connection with the Company’s sale of BankAtlantic in 2012, including portfolios of loans receivable and real estate properties.

BBX Sweet Holdings

BBX Sweet Holdings is engaged in the ownership and management of operating businesses in the confectionery industry, including IT’SUGAR, Hoffman’s Chocolates, and Las Olas Confections and Snacks. IT’SUGAR is a specialty candy retailer which has approximately 100 retail locations, which include a mix of high-traffic resort and entertainment, lifestyle, mall/outlet, and urban locations in over 25 states and Washington D.C., and its products include bulk candy, candy in giant packaging, and novelty items. Hoffman’s Chocolates is a retailer of gourmet chocolates with retail locations in South Florida, and Las Olas Confections and Snacks is a manufacturer and wholesaler of chocolate and other confectionery products.

Renin

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.~~China and Vietnam.

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

In addition to its principal investments, the Company has investments in ~~various~~other operating businesses, including ~~companies~~a restaurant located in South Florida that was acquired through a loan foreclosure and an insurance agency. The Company previously operated as a franchisee of MOD Pizza restaurant locations in Florida and exited these operations in September 2019.

Impact of the COVID-19 Pandemic

The COVID-19 pandemic has been, and continues to be, an unprecedented disruption in the ~~confectionery industry.~~U.S. and global economies and the industries in which the Company operates due to, among other things, government ordered “shelter in place” and “stay at home” orders and advisories, travel restrictions, and restrictions on business operations, including required closures of resorts and retail locations. The disruptions arising from the pandemic and the reaction of the general public had a significant adverse impact on the Company's financial condition and operations during the three months ended March 31, 2020. The duration and severity of the pandemic and related disruptions, as well as the adverse impact on economic and market conditions, are uncertain; however, given the nature of these circumstances, the adverse impact of the pandemic on the Company’s consolidated results of operations, cash flows, and financial condition in 2020 has been, and is expected to continue to be, material. Furthermore, although the duration and severity of the effects of the pandemic are uncertain, it is expected that demand for many of the Company’s products and services may remain weak for a significant length of time, and the Company cannot predict if and when the industries in which the Company operates will return to pre-pandemic levels.

Although the impact of the COVID-19 pandemic on the Company’s principal investments, including management’s efforts to mitigate the effects of the pandemic, has varied, as described in further detail below, BBX Capital and its subsidiaries have taken steps to manage expenses through cost saving initiatives and reductions in employee head count and taken actions to increase liquidity and strengthen the Company’s financial position, including drawing cash from certain available lines of credit, reducing planned capital expenditures, and in the case of BBX Capital and Bluegreen, suspending the payment of quarterly dividends. As of March 31, 2020, the Company’s consolidated cash balances were $397.5 million, including $137.8 million held directly by BBX Capital.

The following summarizes the current impact of the COVID-19 pandemic on the Company’s principal investments:

Bluegreen

Bluegreen temporarily closed all of its VOI sales centers; its retail marketing operations at Bass Pro Shops, Cabela’s stores, and outlet malls; and the Choice Hotels call transfer program. In addition, some of Bluegreen’s Club and Club Associate Resorts were closed in accordance with government mandates and advisories. As a result of the effect of the pandemic, Bluegreen implemented several cost mitigating activities, including a reduction in workforce and the implementation of temporary furloughs and reduced work hours. In addition, as a precautionary measure designed to provide it with additional liquidity, Bluegreen reduced its new inventory acquisition and development expenditures, drew down $60.0 million under its credit facilities and various receivable backed facilities, and suspended its quarterly dividends. Bluegreen is continuing to monitor the course of the COVID-19 pandemic but is currently developing a plan to reopen these operations, including accepting guests at certain of its resorts as of May 16, 2020 and reopening VOI sales centers and marketing operations beginning in June 2020, in each case on a phased schedule, subject to the restrictions of applicable government orders and the safety of its owners, guests, and employees.

The Company expects that the impact of the COVID-19 pandemic will materially adversely affect Bluegreen’s operating results and financial condition for the year ended December 31, 2020, and a sustained adverse impact on Bluegreen’s revenues, net income, or other operating results due to the COVID-19 pandemic could result in failures to comply with various loan covenants in its outstanding indebtedness. While there is no assurance that it will be successful, Bluegreen will seek waivers from its lenders where necessary.

BBX Capital Real Estate

Construction activities remain ongoing at BBXRE’s existing projects; however, the effects of the COVID-19 pandemic, including “shelter in place” and “stay at home” orders and advisories and increased unemployment and economic uncertainty, have disrupted sales activities at BBXRE’s single-family home developments and rental activities at its multifamily apartment developments. In addition, the effects of the pandemic, including the impact on general economic conditions and real estate and credit markets, have increased uncertainty related to the expected timing and pricing of future sales of multifamily apartment developments, single-family homes, and developed lots at BBXRE’s Beacon Lake Community, as well as the commencement of new multifamily apartment developments. While the Company expects that the impact of the COVID-19 pandemic will adversely affect BBXRE’s operating results and financial condition for the year ended December 31, 2020, particularly with respect to the expected timing of sales, the Company determined that its existing real estate investments were not impaired as of March 31, 2020 as the impact of the pandemic on real estate values was uncertain at such time. BBXRE will continue to monitor economic and market conditions and may recognize impairment losses in future periods to the extent that the effects of the pandemic have a severe and sustained adverse impact on the real estate market.

BBX Sweet Holdings

As of March 31, 2020, IT’SUGAR had closed all of its retail locations and furloughed all store employees and the majority of its corporate employees. At the current time, IT’SUGAR is not generating any trade sales other than limited sales through its website and wholesale channels and has not made rent payments to the landlords of its retail locations. IT’SUGAR is currently in discussions with its landlords for rent abatements or deferrals and is hopeful that it will be in a position to commence a phased reopening of its retail locations starting in May 2020, subject to the implementation of revised store floor plans and increased sanitation protocols. However, as a result of the prolonged closure of its retail locations that commenced in March 2020, IT’SUGAR does not believe that it will have sufficient liquidity to continue its full operations if it is unable to obtain significant rent abatements or deferrals from its landlords and amended payment terms from its vendors and, if it is not successful with these negotiations, may decide to pursue a formal or informal restructuring. Further, even if IT’SUGAR is in a position to reopen its retail locations and continue its operations, the effects of the COVID-19 pandemic on demand and future sales levels, including a recessionary economic environment and the potential impact of the pandemic on consumer behavior, remain uncertain and could have a long-term and significant adverse impact on IT’SUGAR’s business, results of operations, and financial condition and its ability to continue its operations. As a result, the Company recognized $24.7 million of impairment losses related to IT’SUGAR’s goodwill and long-lived assets during the quarter ended March 31, 2020. See Note 8 for additional information with respect to the recognition of these impairment losses.

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”) relatedaddition to the ~~development~~material adverse impact of upthe COVID-19 pandemic on IT’SUGAR’s operations, BBX Sweet Holdings’ other operations have also been adversely impacted by the pandemic. In particular, Hoffman’s Chocolates has closed all of its retail locations to ~~approximately 60 MOD Pizza franchised restaurant locations throughout Florida. Through 2019, FFTRG had opened nine restaurant locations. As~~customer traffic and limited sales to curbside pickup (where allowable by government mandates) and online customers. In addition, Hoffman’s Chocolates is in discussions with its landlords for rent abatements and deferrals. While Las Olas Confections and Snacks has continued to operate its manufacturing facility and sell products to its wholesale customers, its sales activity has declined as a result of ~~FFTRG’s overall operating performance~~the effects of the pandemic. In response to the effects of the pandemic, both Hoffman’s Chocolates and ~~the Company’s goal~~Las Olas Confections and Snacks have implemented several cost mitigating activities, including a reduction of ~~streamlining its investment verticals, the Company entered into an agreement with MOD Pizza~~workforce and indefinite furlough of certain employees.

Renin

Renin is continuing to ~~terminate the area development and franchise agreements and transferred seven~~operate both of its ~~restaurant locations, including the related assets, operations,~~manufacturing and ~~lease obligations, to MOD Pizza during the third quarter of 2019. In addition, the Company closed the remaining two locations~~distribution facilities, source various products 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 propertyraw materials from China and ~~equipment, intangible assets,~~Vietnam, and ~~net lease liabilities, during~~sell its products through various channels. While its operating results for the three months ended ~~September 30, 2019.~~March 31, 2020 were not significantly impacted by the COVID-19 pandemic, Renin’s sales volumes have declined subsequent to March 31, 2020, which management believes is attributable to the effects of the pandemic, including a recessionary economic environment and rising unemployment. In addition, such effects could have a significant adverse impact on Renin’s results of operations and financial condition in future periods, particularly to the ~~impairment losses recognized during~~extent that an economic downturn is prolonged in nature or results in material disruptions in the ~~third quarter~~supply chains for its products and raw materials. Renin is continuing to monitor the potential effects of ~~2019,~~ the ~~Company previously recognized $2.7 million of impairment losses associated with property~~pandemic 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.is exploring various opportunities through which it could attempt to mitigate such effects, including increasing online sales and implementing cost reduction initiatives.

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 had not been adopted by the Company as of September 30, 2019:~~ 2020:

ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial 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. The standard also requires entities to record an allowance for credit losses for available for sale debt securities rather than reduce the carrying amount under the other-than temporary impairment model. 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 Company adopted this standard on January 1, 2020 using a modified retrospective method. The Company did not recognize a cumulative effect adjustment upon adoption of the standard as Bluegreen’s VOI notes receivable are recorded net of an allowance that is calculated in accordance with ASC 606, Revenue from Contracts, and which complies with the requirements of ASC 326. The Company also ~~allows entities~~elected the practical expedient to ~~irrevocably elect to~~not measure ~~certain financial~~an allowance for credit losses for accrued interest receivables, as the Company’s

interest income is suspended, and previously accrued but unpaid interest income is reversed, on all delinquent notes receivable when principal or interest payments are more than 90 days contractually past due and not resumed until such loans are less than 90 days past due. In addition, the application of the standard did not have a material impact on the Company’s remaining instruments that are within the scope of the ~~standard at fair value upon~~standard. As such, the adoption of the ~~standard.~~standard did not have a material impact on the Company’s consolidated financial statements.

ASU 2018-15, Intangibles (Topic 350-40): Goodwill and Other – Internal–Use Software. This standard ~~will be effective for~~requires a customer in a cloud computing arrangement that is a service contract (“CCA”) to follow the internal-use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. The standard also requires entities to present implementation costs related to a CCA in the same financial statement line items as the CCA service fees. The Company adopted this standard on January 1, ~~2020.~~2020 and is applying the transition guidance as of the date of adoption prospectively, under the current period adjustment method. Upon adoption of the standard, the Company reclassified $1.9 million of capitalized implementation costs related to a CCA that was in the implementation phase as of January 1, 2020 from property and equipment to prepaid expenses. The ~~Company is currently evaluating~~adoption of the standard did not have a material impact ~~that ASU 2016-13 may have~~ on ~~its~~the Company’s 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~~was effective for the Company on January 1, ~~2020. The Company believes that this~~2020, and the adoption of the standard ~~will~~did not have a material impact on ~~its~~the Company’s consolidated financial statements and disclosures.

Future Adoption of Recently Issued Accounting Pronouncements

The FASB has issued the following accounting pronouncements and guidance relevant to the Company’s operations which had not been adopted by the Company as of March 31, 2020:

ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard removes specific exceptions to the general principles in Topic 740 including exceptions related to (i) the incremental approach for intraperiod tax allocations, (ii) accounting for basis differences when there are ownership changes in foreign investments, and (iii) interim period income tax accounting for year-to-date losses that exceed anticipated losses. The statement is effective for the Company on January 1, 2021 and interim periods within that fiscal year. Early adoption is permitted. The Company is currently evaluating the impact that this standard may have on its consolidated financial statements.

ASU No. 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This standard provides relief for companies preparing for discontinuation of LIBOR in response to the Financial Conduct Authority (the regulatory authority over LIBOR) plan for a phase out of regulatory oversight of LIBOR interest rate indices after 2021 to allow for an orderly transition to an alternate reference rate. The Alternative Reference Rates Committee (“ARRC”) has proposed that the Secured Overnight Financing Rate (“SOFR”) is the rate that represents best practice as the alternative to LIBOR for promissory notes or other contracts that are currently indexed to LIBOR. The ARRC has proposed a market transition plan to SOFR from LIBOR, and organizations are currently working on transition plans as it relates to derivatives and cash markets exposed to LIBOR. The Company currently has $87.7 million of LIBOR indexed receivable-backed notes payable and lines of credit, $225.2 million of LIBOR indexed lines of credit and notes payable (which are not receivable-backed) that mature after 2021, and $177.1 million of LIBOR indexed junior subordinated debentures. Although companies can apply this standard immediately, the guidance will only be available for a limited time, generally through December 31, 2022. The Company is currently evaluating the potential impact that the eventual replacement of the LIBOR benchmark interest rate could have on its results of operations, liquidity and consolidated financial statements and the related impact that this standard may have on its consolidated financial statements.

FASB Staff Q&A Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic (Topic 842): The FASB issued guidance on lease concessions related to the effects of the COVID-19 pandemic allowing entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic as if the enforceable rights and obligationsfor those concessions existed in the lease contract (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the lease contract). Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance of Topic 842. The election only applies to concessions that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. The Company has elected to account

for lease concessions related to the effects of the COVID-19 pandemic as if the rights and obligations related to such concessions existed in the related lease agreements.

2. Consolidated Variable Interest Entities

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

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

the portfolio of receivables fails to satisfy specified performance criteria (as may occur due to, among other things, an increase in default rates or credit loss severity) or other trigger events occur, the funds received from obligors are required to be distributed on an accelerated basis to investors. Depending on the circumstances and the transaction, the application of the accelerated payment formula may be permanent or temporary until the trigger event is cured. As of ~~September 30, 2019,~~March 31, 2020, Bluegreen was in compliance with all material terms under its securitization transactions, and no trigger events had occurred. However, there is no assurance that compliance will be maintained in the future.

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 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 for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ were ~~$8.4~~$4.3 million and ~~$4.4~~$2.1 million, respectively. Bluegreen’s maximum exposure to loss relating to its non-recourse securitization entities is the difference between the outstanding VOI notes receivable and the notes payable, plus cash reserves and any additional residual interest in future cash flows from collateral.

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



		September 30,	December 31,	March 31,		December 31,
		2019	2018	2020		2019
Restricted cash	$	19,185	28,400	$	17,456		22,534
Securitized notes receivable, net		299,374	341,975		288,435		292,590
Receivable backed notes payable - non-recourse		341,856	382,257		339,224		334,246

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

The table below sets forth information 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 14.8% and 14.9% ~~and 15.1%~~ at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively. Bluegreen’s VOI notes receivable bear interest at fixed 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~~on VOI notes receivable ~~secured by homesites)~~ was as follows (in thousands):

The amortized cost basis of Bluegreen’s VOI notes receivable by year of origination and FICO score of the borrower at the time of origination were as follows as of March 31, 2020 (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:

Bluegreen’s notes receivable are carried at amortized cost less an allowance for loan losses. Interest income is suspended, and previously accrued but unpaid interest income is reversed, on all delinquent notes receivable when principal or interest payments are more than 90 days contractually past due and not resumed until such loans are less than 90 days past due. As of March 31, 2020 and December 31, 2019, $18.0 million and $19.3 million, respectively, of Bluegreen’s VOI notes receivable that were more than 90 days past due, and accordingly, consistent with Bluegreen’s policy, were not accruing interest income. After approximately 127 days, Bluegreen’s VOI notes receivable are generally written off against the allowance for loan loss. Accrued interest was $5.2 million and $5.3 million as of March 31, 2020 and December 31, 2019, respectively, and is included within other assets in the Company’s condensed statements of financial condition herein.

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 ~~September 30, 2019,~~March 31, 2020, 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 Altman Companies, a developer and manager of multifamily apartment communities.

Investments in unconsolidated real estate joint ventures are accounted for as unconsolidated VIEs. See Note 2 for information regarding the Company’s investments in consolidated VIEs.

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

See Note 109 to the Company’s consolidated financial statements included in the ~~2018~~2019 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,~~March 2020, the Altis at ~~Lakeline~~Wiregrass joint venture sold its ~~354~~392 unit multifamily apartment community ~~located~~ in ~~Cedar Park, Texas.~~Tampa, Florida. As a result of the sale, ~~the Company~~BBXRE recognized ~~$5.0~~$0.8 million of equity earnings ~~and received approximately $9.3 million of distributions from~~during the ~~venture for the nine~~three 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 earningsMarch 31, 2020 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 April 2020.

The activity in the balance of the Company’s goodwill was as follows (in thousands):

The Company tests goodwill associated with its reporting units for potential impairment on an annual basis as of December 31 or during interim periods if impairment indicators exist. The Company concluded that the effects of the COVID-19 pandemic, including the recessionary economic environment and the impact on certain of the Company’s operations, indicated that it was more likely than not that the fair values of certain of its reporting units with goodwill had declined below the respective carrying amounts of such reporting units as of March 31, 2020. As a result, the Company tested the goodwill associated with such reporting units for impairment by estimating the fair values of the respective reporting units as of March 31, 2020.

The Company generally applies an income approach utilizing a discounted cash flow methodology and a market approach utilizing a guideline public company and transaction methodology to estimate the fair value of its reporting units. The estimated fair values obtained from the income and market approaches are compared and reviewed for reasonableness to determine a best estimate of fair value. The Company’s discounted cash flow methodology establishes an estimate of fair value by estimating the present value of the projected future cash flows to be generated from a reporting unit. The discount rate applied to the projected future cash flows to arrive at the present value is intended to reflect all risks of ownership and the associated risks of realizing the stream of projected future cash flows. The Company generally uses a five to ten-year period in computing discounted cash flow values. The most significant assumptions used in the discounted cash flow methodology are generally the terminal value, the discount rate, and the forecast of future cash flows. The guideline public company methodology establishes an estimate of fair value based upon the trading prices of public traded companies that are similar to the applicable reporting unit, while the guideline transaction methodology establishes an estimate of fair value based on acquisitions of companies that are similar to the applicable reporting unit. Under these methods, the Company develops multiples of revenue and earnings before interest, taxes, depreciation and amortization (“EBITDA”) based upon the indicated enterprise value, revenues, and EBITDA of the guideline companies and makes adjustments to such multiples based on various considerations, including the financial condition, operating performance, and relative risk of the guideline companies. The adjusted multiples are then applied to the revenues and EBITDA of the reporting unit to develop an estimated fair value of the reporting unit. Depending on the facts and circumstances applicable to the reporting unit and the guideline companies, the Company may place greater emphasis on the income or market approach to determine its best estimate of fair value.

In ~~August~~connection with its impairment testing as of March 31, 2020, the Company estimated that the fair value of the IT’SUGAR reporting unit was $27.3 million as of March 31, 2020 and recognized a goodwill impairment loss of $20.3 million during the quarter ended March 31, 2020 based on the excess of the carrying amount of the IT’SUGAR reporting unit over its estimated fair value. The Company primarily utilized a discounted cash flow methodology to estimate the fair value of the IT’SUGAR reporting unit and used the relevant market approaches to support the reasonableness of its estimated fair value under the income approach. The decline in the fair value of the IT’SUGAR reporting unit from December 31, 2019 primarily resulted from the ~~Altis at Bonterra joint venture sold~~effects of the COVID-19 pandemic on IT’SUGAR. In particular, the Company’s estimated future cash flows incorporated the impact of the temporary closure of IT’SUGAR’s retail locations over the next several months and the liabilities incurred by IT’SUGAR during the shutdown. In addition, the Company’s estimates considered scenarios in which IT’SUGAR’s business would stabilize following a phased reopening of its ~~314 unit multifamily apartment community located~~retail locations. The Company’s estimated discount rate applicable to IT’SUGAR was also increased to reflect, among other things, changes in ~~Hialeah, Florida. As~~market conditions, the uncertainty of the duration and severity of the economic downturn, uncertainty related to the retail environment and consumer behavior, uncertainty related to IT’SUGAR’s ability to stabilize its operations and implement its long-term strategies for its business, and the deterioration in IT’SUGAR’s financial condition 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 profitseffects of the ~~venture.~~

~~In January 201~~9, the Company invested in L03/212 Partners, LLC, a joint venture formed to invest in the development of The Main Las Olas, a mixed-used project located in downtown Fort Lauderdale, Florida that is planned to be comprised of an office tower with approximately 365,000 square feet of leasable area, a residential tower with approximately 341 units, and approximately 45,000 square feet of ground floor retail. As of September 30, 2019, the Company had funded $1.9 million of its expected capital contribution of $4.0 million.COVID-19 pandemic.

In ~~April 2019,~~addition to the IT’SUGAR reporting unit, the Company ~~invested~~estimated the fair value of certain of its other reporting units with goodwill and recognized goodwill impairment losses of $2.1 million ~~in PGA Lender, LLC, a joint venture formed with~~during the ~~PGA Design Center joint venture~~three months ended March 31, 2020 related to ~~participate~~these reporting units. The decline in the ~~$4.6 million seller financing provided to~~fair value of these reporting units from December 31, 2019 primarily resulted from the ~~buyer~~effects of the ~~PGA Design Center joint venture’s commercial buildings, as described above. In connection~~COVID-19 pandemic on these businesses.

The Company’s long-lived assets include property and equipment, amortizable intangible assets, and right-of-use assets associated with its lease agreements. The Company tests its long-lived assets, or asset groups which include long-lived assets, for recoverability whenever events or changes in circumstances indicate that the ~~transaction,~~carrying amount of such assets or asset groups may not be recoverable. The carrying amount of an asset or asset group is not considered recoverable when the ~~Company contributed $2.1 million in~~carrying amount exceeds the sum of the undiscounted cash ~~in exchange for a 45.88% equity interest in the venture, while the PGA Design Center joint venture contributed the $4.6 million promissory note received~~flows expected to result from the ~~buyer in exchange for $2.1 million in~~use of the asset or asset group. To the extent that the carrying amount of an asset or asset group exceeds the sum of such undiscounted cash flows, an impairment loss is measured and ~~a 54.12% equity interest in~~recorded based on the ~~venture.~~

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

~~Summarized Financial Information of Certain Unconsolidated Real Estate Joint Ventures~~

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

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

asset or asset group exceeds its fair value. Impairment losses associated with an asset group

are allocated to long-lived assets within the asset group based on their relative carrying amounts; however, the carrying amount of individual long-lived assets within an asset group are not reduced below their individual fair values.

The Company concluded that the effects of the COVID-19 pandemic indicated that the carrying amount of certain of its long-lived assets may not be recoverable, including asset groups associated with certain of its retail locations which were temporarily closed as a result of the pandemic. In such circumstances, the Company compared its estimated undiscounted cash flows expected to result from the use of such assets or asset groups with their respective carrying amounts, and to the extent that such carrying amounts were in excess of the related undiscounted cash flows, the Company estimated the fair values of the applicable assets or asset groups and recognized impairment losses based on the excess of the carrying amounts of such assets or asset groups over their estimated fair values. In certain circumstances, the Company estimated the fair value of individual assets within its asset groups, including right-of-use assets associated with its retail locations, to determine the extent to which an impairment loss would be allocated to such assets.

The Company generally estimated the fair value of the relevant assets or asset groups utilizing a discounted cash flow methodology which estimated the present value of the projected future cash flows expected to be generated from such assets or asset groups. When estimating the fair value of asset groups related to a retail location, the Company’s estimated fair value considered the relevant market participants and the highest and best use for the location, including whether the value of the location would be maximized by operating the location in its current use or by permanently closing the location and subleasing it. In addition, to the extent applicable, the Company estimated the fair value of right-of-use assets associated with its retail locations using a discounted cash flow methodology which estimated the present value of market rental rates applicable to such right-of-use assets.

As a result of the Company’s testing of its long-lived assets for impairment as of March 31, 2020, the Company recognized impairment losses of $4.9 million during the quarter ended March 31, 2020 related primarily to leasehold improvements and right-of-use assets associated with certain of IT’SUGAR’s retail locations. The recognition of these impairment losses primarily resulted from the effects of the COVID-19 pandemic on the estimated cash flows expected to be generated by the relatedassets.

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

September 30, 2019

December 31, 2018

Carrying

Carrying

Amount of

Amount of

Debt

Interest

Pledged

Debt

Interest

Pledged

Balance

Rate

Assets

Balance

Rate

Assets
Bluegreen:

2013 Notes Payable
$
-

-
$
-
$
28,125

5.50%
$
22,878
Fifth Third Bank Note

3,649

5.11%

7,757

3,834

5.34%

7,892
NBA Éilan Loan

19,974

5.34%

32,821

25,603

5.60%

35,615
Fifth Third Syndicated

Line of Credit

75,000

4.88%

102,431

55,000

5.27%

92,415
Fifth Third Syndicated

Term Loan

21,094

5.08%

28,809

22,500

5.37%

27,724
Unamortized debt

issuance costs

(672)

(1,671)

Total Bluegreen
$
119,045

$
133,391

Other:

Community Development

District Obligations
$
29,432

4.25-6.00%
$
44,771
$
24,583

4.25-6.00%
$
35,155
TD Bank Term Loan and

Line of Credit

8,394

5.24%

(1)

8,117

5.47%

(1)
Iberia $50.0 million

Revolving Line of Credit

-

-

(2)

30,000

5.35%

(2)
Banc of America Leasing

& Capital Equipment Note

406

4.75%

(3)

555

4.75%

(3)
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

(837)

(666)

Total other
$
42,375

$
67,496

Total notes payable and

other borrowings
$
161,420

$
200,887



	March 31, 2020						December 31, 2019
					Carrying						Carrying
					Amount of						Amount of
	Debt		Interest		Pledged		Debt		Interest		Pledged
	Balance		Rate		Assets		Balance		Rate		Assets
Bluegreen:
NBA Éilan Loan	$	17,659		4.77%	$	28,625	$	18,820		4.95%	$	31,259
Fifth Third Syndicated Line of Credit		110,000		3.32%		119,848		30,000		3.85%		49,062
Fifth Third Syndicated Term Loan		97,500		3.61%		106,229		98,750		3.71%		161,497
Unamortized debt issuance costs		(1,374)						(1,410)
Total Bluegreen	$	223,785					$	146,160
Other:
Community Development District Obligations	$	26,365		4.25-6.00%	$	46,576	$	29,287		4.25-6.00%	$	49,352
TD Bank Term Loan and Line of Credit		10,504		4.72%		(1)		6,826		5.00%		(1)
Iberia $50.0 million Revolving Line of Credit		—		—		(2)		—		—		(2)
Banc of America Leasing & Capital Equipment Note		303		4.75%		(3)		355		4.75%		(3)
Bank of America Revolving Line of Credit		4,000		2.48%		—		2,000		3.24%		—
Unsecured Note (4)		—		—		—		3,400		6.00%		—
Centennial Bank Note (4)		1,459		5.25%		1,879		1,469		5.25%		1,892
Other		—		—		—		58		15.00%		—
Unamortized debt issuance costs		(727)						(824)
Total other	$	41,904					$	42,571
Total notes payable and other borrowings	$	265,689					$	188,731

See Note 13 to the Company’s consolidated financial statements included in the ~~2018~~2019 Annual Report for additional information regarding the above listed notes payable and other borrowings.

~~New~~Except as described below, there were no new debt issuances ~~and~~or significant changes related to the above listed notes payable and other borrowings ~~are detailed below.~~during the three months ended March 31, 2020.

Fifth Third Syndicated Line of Credit and Fifth Third Syndicated Term Loan.In ~~February 2019,~~March 2020, in an effort to ensure adequate liquidity for a prolonged period due to the ~~Meadow View at Twin Creeks Community Development District issued $8.1 million of community development bonds in order to fund the infrastructure improvements for Phase II~~effects of the ~~Company’s Beacon Lake Community development~~COVID-19 pandemic, Bluegreen drew down $60.0 million under its lines of credit to increase its cash position. As of March 31, 2020, outstanding borrowings under the facility totaled $207.5 million, including $97.5 million under the Fifth Third Syndicated Term Loan with an interest rate of 3.61% and ~~repay a portion~~$110.0 million under the Fifth Third Syndicated Line of ~~the bonds previously issued in 2016 in connection~~Credit with ~~Phase I~~an interest rate 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. 3.32%.

Banc of America Leasing & Capital Equipment Note and Bank of America Revolving Line of Credit. In ~~July 2019,~~April 2020, a wholly-owned subsidiary of BBX Capital Real Estate purchased the ~~Company modified the Iberia $50.0 million~~Bank of America revolving line of credit ~~to, among other things, extend~~and the ~~maturity~~Banc of America equipment note from the respective lenders for the outstanding principal balance 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 LIBORloans 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):



		September 30, 2019					December 31, 2018				March 31, 2020						December 31, 2019
					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	$	28,247	5.25%	$	34,545	$	17,654	5.25%	$	22,062	$	23,184		4.75%	$	28,663	$	25,860		4.75%	$	31,681
NBA Receivables Facility		35,809	4.79%		43,706		48,414	5.27%		57,805		29,033		3.74%		35,584		32,405		4.55%		39,787
Pacific Western Facility		30,848	4.92%		37,954		10,606	5.52%		13,730		28,256		3.87%		34,965		30,304		4.68%		37,809
Total	$	94,904		$	116,205	$	76,674		$	93,597	$	80,473			$	99,212	$	88,569			$	109,277

Receivable-backed notes
payable - non-recourse:
KeyBank/DZ Purchase Facility		19,035	4.84%		23,390		-	-		-		60,899		3.29%		75,346		31,708		3.99%		39,448
Quorum Purchase Facility		44,865	4.75-5.50%		50,337		40,074	4.75-5.50%		45,283		39,092		4.75-5.50%		45,280		44,525		4.75-5.50%		49,981
2012 Term Securitization		9,986	2.94%		11,558		15,212	2.94%		16,866		7,352		2.94%		8,237		8,638		2.94%		9,878
2013 Term Securitization		20,090	3.20%		21,995		27,573	3.20%		29,351		16,523		3.20%		17,896		18,219		3.20%		19,995
2015 Term Securitization		34,093	3.02%		36,676		44,230	3.02%		47,690		28,750		3.02%		30,809		31,188		3.02%		33,765
2016 Term Securitization		52,632	3.35%		58,817		63,982	3.35%		72,590		44,217		3.35%		49,286		48,529		3.35%		54,067
2017 Term Securitization		69,763	3.12%		79,551		83,513	3.12%		95,877		60,846		3.12%		69,703		65,333		3.12%		74,219
2018 Term Securitization		96,907	4.02%		109,599		114,480	4.02%		125,916		86,297		4.02%		98,550		91,231		4.02%		103,974
Unamortized debt issuance costs		(5,515)			-		(6,807)			-		(4,752)		—		—		(5,125)		—		—
Total	$	341,856		$	391,923	$	382,257		$	433,573	$	339,224			$	395,107	$	334,246			$	385,327
Total receivable-backed debt	$	436,760		$	508,128	$	458,931		$	527,170	$	419,697			$	494,319	$	422,815			$	494,604

~~There~~See Note 13 to the Company’s consolidated financial statements included in the 2019 Annual Report for additional information regarding the above listed receivable-backed notes payable facilities.

Except as described below, there were no new debt issuances or significant changes related to the above listed facilities during the ~~nine~~three months ended ~~September 30, 2019. See Note 13~~March 31, 2020.

Quorum Purchase Facility. Bluegreen/Big Cedar Vacations has a VOI notes receivable purchase facility (the “Quorum Purchase Facility”) with Quorum Federal Credit Union (“Quorum”), pursuant to which Quorum has agreed to purchase eligible VOI notes receivable in an amount of up to an aggregate $50.0 million purchase price, subject to certain conditions precedent and other terms of the facility. On March 17, 2020, the Quorum Purchase Facility was amended to extend the advance period to December 2020 from June 2020. The interest rate on each advance is set at the time of funding based on rates mutually agreed upon by all parties. The maturity of the Quorum Purchase Facility is December 2032. The Quorum Purchase Facility provides for an 85% advance rate on eligible receivables sold under the facility, however Quorum can modify this advance rate on future purchases subject to the ~~Company’s consolidated financial statements included in~~terms and conditions of the ~~2018 Annual Report for additional information regarding the above listed receivable-backed notes payable facilities.~~Quorum Purchase Facility.

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 does not consolidate the operations of these Trusts; instead, the beneficial interests in the Trusts are accounted for under the equity method of accounting. Included in other assets as of September 30, 2019 and December 31, 2018 was $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 ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019.

See Note 13 to the Company’s consolidated financial statements included in the ~~2018~~2019 Annual Report for additional information regarding the Company’s junior subordinated debentures.

As of ~~September 30, 2019,~~March 31, 2020, BBX Capital and its subsidiaries were in compliance with all financial debt covenants under their debt instruments, as amended.

Amounts available under credit facilities for BBX Capital and its subsidiaries as of ~~September 30, 2019~~March 31, 2020 were as follows (in thousands):

The amounts available under the Company’s credit facilities are subject to eligible collateral requirements and the terms of the facilities, as applicable.

The effects of the COVID-19 pandemic on the Company’s operations could impact its ability to remain in compliance with the financial covenants under its debt instruments and the extent of availability under its credit facilities in future periods. If the Company is unable to maintain compliance with its debt covenants or obtain waivers from its lenders if it is not in compliance with its covenants, the Company will no longer be able to access its revolving credit facilities or may have to repay all or a portion of its borrowings prior to their scheduled maturity dates or provide additional collateral for such borrowings, any of which would have a material adverse effect on the Company’s liquidity, financial position, and results of operations.

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.

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 or loss and the mix of taxable earnings or loss in the various states in which the Company operates. The Company’s effective tax rate was applied to income or loss 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%~~17% and ~~37%~~35% during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 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%. TheCompany’s effective income tax rate for the ~~nine~~three 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~~March 31, 2020 and ~~nine months ended September 30,~~ 2019 ~~and 2018 were higher~~was different than the expected federal income tax rate of 21% due to the impact of nondeductible executive compensation and state income taxes. The effective income tax rate for the 2020 period reflects a current estimated ordinary taxable loss for the year ended December 31, 2020 resulting primarily from the effects of the COVID-19 pandemic.

Certain of the Company’s state filings are under routine examination. While there is no assurance as to the results of these audits, the Company does not currently anticipate any material adjustments in connection with these examinations.

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 consumer complaints and complaints, 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. We may also become subject to litigation related to the COVID-19 pandemic, including with respect to any actions we take or may be required to take as a result thereof.

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 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 as of March 31, 2020 other than proceedings against ~~Bluegreen as of September 30, 2019.~~

Bluegreen, indirectly through Bluegreen Vacations Unlimited (“BVU”), its wholly-owned subsidiary, has an exclusive marketing agreement with Bass Pro, a nationally-recognized retailer of fishing, marine, hunting, camping and sports gear, that provides Bluegreen with the right to market and sell vacation packages at kiosks in each of Bass Pro’s retail locations and through other means. As previously disclosed, in March 2019, Bluegreen received a notice from Bass Pro stating that Bass Pro intended to cancel Bluegreen’s access to the Bass Pro marketing channels and advertising materials as of 30 days from the date of the notice unless Bluegreen cured the alleged breaches to Bass Pro’s satisfaction. While Bluegreen responded to Bass Pro with respect to each of the issues raised prior to the expiration of the cure period, on April 17, 2019, Bass Pro and its affiliates brought an action against BVU alleging that BVU failed to pay certain commissions due it under the parties’ marketing agreement, improperly charged a tour generation fee, and 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 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 litigation and reinstated and amended the marketing agreement. Pursuant to the terms of the settlement agreement, Bass Pro agreed to reinstate BVU’s access to Bass Pro’s marketing channels, including Bass Pro and Cabela’s retail stores. Additionally, with no admission of any wrongdoing, Bluegreen paid Bass Pro $20.0 million within 15 days after the execution of the settlement agreement; Bluegreen agreed to pay Bass Pro $4.0 million on each January 1 from 2020 through 2024; and Bluegreen agreed that Bass Pro would retain $1.5 million of an amount prepaid to them earlier in 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 litigation. Bluegreen accrued for the net present value of the above payments required by the settlement 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 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 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. 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 and dismissed all claims. Bluegreen has moved for reimbursement of its attorneys’ fees. Plaintiffs have appealed of the summary judgment order.

On February 28, 2018, Oscar Hernandez and Estella Michael filed a purported class action litigation in San Bernardino Superior Court against ~~BVU.~~Bluegreen Vacations Unlimited (“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 ~~sought~~seek to represent a class of approximately 660 hourly, non-exempt employees who worked in the state of California since March 1, 2014. In April 2019, the parties mediated and agreed to settle the matter for an immaterial amount. It is expected that the court will approve the settlement and 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~~Bluegreen 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 has moved to dismiss the case, and on November 27, 2019, the Court issued a ruling granting the motion in part. Bluegreen has answered the remaining claims. 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 (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~~Plaintiff seeks 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, 2020, the Eleventh Circuit issued a ruling consistent with BVU’s position, but the case currently remains stayed.

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. Bluegreen agreed to indemnify Bass Pro with respect to the claims brought against Bluegreen in this proceeding and filed a motion to dismiss. On April 6, 2020, the court granted Bluegreen’s motion to dismiss, and on April 29, 2020, the court entered final judgment in Bluegreen’s favor.

On July 18, 2019, Eddie Boyd, et al. filed an action alleging that BVU and co-defendants violated the Missouri Merchandise Practices Act for allegedly making false statements and misrepresentations with respect to the sale of VOIs. Plaintiffs further have filed a purported class action allegation that BVU’s charging of an administrative processing fee constitutes the unauthorized practice of law. Plaintiffs seek ~~rescission of their contracts,~~ monetary damages, ~~including statutory treble damages, or in~~attorneys’ fees and injunctive relief. Bluegreen has moved to dismiss the ~~alternative, punitive damages in an amount not less than $0.5 million.~~action. Bluegreen believes the lawsuit is without merit and intends to vigorously defend the action. ~~Bluegreen has agreed to indemnify Bass Pro with respect to the claims brought against it in this proceeding.~~

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

Commencing in 2015, it came to Bluegreen’s attention that its collection efforts with respect to its VOI notes receivable were being impacted by a then emerging, industry-wide trend involving the receipt of “cease and desist” letters from 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 ~~8.6%~~9.3% in ~~2019.~~2020. Bluegreen also estimates that approximately ~~15.0%~~10.0% of the total delinquencies on its VOI notes receivable as of ~~September 30, 2019~~March 31, 2020 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 filed a lawsuit against timeshare exit firm Totten Franqui and certain of its affiliates (“TPEs”). In the complaint, Bluegreen alleged that the TPEs, through various forms of deceptive advertising, as well as inappropriate direct contact with VOI owners, made false statements about Bluegreen and provided misleading information to the VOI owners. The TPEs have encouraged nonpayment by consumers and exacted fees for doing so. Bluegreen believes the consumers are paying fees to the TPEs in exchange for illusory services and has asserted claims against the TPEs under the Lanham Act, as well as tortious interference with contractual relations, civil conspiracy to commit tortious interference, and other claims. During the course of the litigation, the TPEs and Totten Franqui filed for bankruptcy, which resulted in the litigation being stayed. ~~The bankruptcy judge has appointed an independent trustee to handle the estate of the debtors, and~~ Bluegreen has ~~been in discussions~~reached settlements with the TPE principals and the bankruptcy trustee, ~~about~~and the paperwork is being finalized. The contemplated settlement includes findings of fact against the defendants regarding their business practices and a ~~possible settlement.~~permanent injunction prohibiting the principals of the TPE from working again in the VOI exit space.

On November 13, 2019, Bluegreen ~~intends to assert all~~filed a lawsuit against timeshare exit firm The Montgomery Law Firm and certain of its ~~legal rights~~affiliates (also included in “TPEs”). In the ~~bankruptcy case.~~complaint, Bluegreen alleged, as discussed above, that the TPEs, through various forms of deceptive advertising, as well as inappropriate direct contact with VOI owners, made false statements about Bluegreen, provided misleading information to the VOI owners, and encouraged nonpayment by consumers. Bluegreen believes the consumers are paying fees to the TPEs in exchange for illusory services. Bluegreen 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.

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

Bluegreen, indirectly through BVU, its wholly-owned subsidiary, has an exclusive marketing agreement with Bass Pro, a nationally-recognized retailer of fishing, marine, hunting, camping and sports gear, that provides Bluegreen with the right to market and sell vacation packages at kiosks in each of Bass Pro’s retail locations and through other means. Pursuant to a settlement agreement Bluegreen entered into with Bass Pro and its affiliates during June 2019, Bluegreen paid Bass Pro $20.0 million and agreed to, among other things, make five annual payments to Bass Pro of $4.0 million in January of each year commencing in 2020. In June 2019, Bluegreen accrued for the net present value of the settlement, plus attorney’s fees and costs, totaling approximately $39.1 million. The first $4.0 million annual payment was made during January 2020. As of March 31, 2020, $14.7 million was accrued for the remaining payments required by the settlement agreement, which are included in other liabilities in the Company’s condensed consolidated statement of financial condition as of March 31, 2020.

During most of the quarter ending March 31, 2020, Bluegreen was actively selling vacation packages in 68 of Bass Pro retail stores and 21 Cabela’s retail stores. During the three months ended March 31, 2020 and 2019, VOI sales to prospects and leads generated by the agreement with Bass Pro accounted for approximately 10% and 12%, respectively, of Bluegreen’s VOI sales volume. In March 2020, as a result of the COVID-19 pandemic, Bluegreen temporarily closed its retail marketing operations at Bass Pro Shops and Cabela’s stores. Bluegreen is currently developing a plan to reopen these operations.

In lieu of paying maintenance fees for unsold VOI inventory, Bluegreen may enter into subsidy agreements with certain HOAs. During the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ Bluegreen made payments related to such

subsidies of ~~$10.5 million and $2.2 million, respectively.~~$1.9 million. As of ~~September 30, 2019,~~March 31, 2020, Bluegreen had accrued ~~$8.0~~$3.3 million for such subsidies, which is included in other liabilities in the Company’s condensed consolidated statement of financial condition. As of December 31, ~~2018,~~2019, Bluegreen had no accrued liabilities for such subsidies.

In December 2019, Bluegreen’s President and Chief Executive Officer resigned. In connection with his resignation, Bluegreen agreed to make payments to him or on his behalf totaling $3.5 million over a period of 18 months, $2.9 million of which remained payable as of March 31, 2020. Additionally, during 2019, Bluegreen entered into certain agreements with other executives related to their separation from Bluegreen or change in position. Pursuant to the terms of these agreements, Bluegreen agreed to make payments totaling $2.5 million through November 2020. As of March 31, 2020, $1.0 million remained payable under these agreements.

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 included in cost of trade sales and selling, general, and administrative expenses in the Company’s condensed consolidated statements of operations (in thousands):

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

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

In 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,~~21, 2020, BBX Capital’s compensation committee of the board of directors granted awards of ~~1,923,975~~2,442,503 restricted shares of BBX Capital’s Class BA 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~~$10.2 million, and the shares vest ratably in annual installments of approximately ~~481,000~~611,000 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.2020.

During the three ~~and nine~~ months ended ~~September 30, 2019,~~March 31, 2020, approximately ~~3,039,265~~5,084,906 shares of unvested restricted stock awards were not included in the computation of diluted earnings per share as the shares were antidilutive due to a loss 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.~~period. During the three ~~and nine~~ months ended ~~September 30, 2018, there were~~March 31, 2019, no unvested restricted stock awards ~~that~~ were excluded from the computation of diluted earnings per share for ~~such periods.~~the period.

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

The redeemable noncontrolling interest included in the Company’s condensed consolidated statements of financial condition as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 of ~~$2.2~~$1.9 million and ~~$2.6~~$4.0 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 held by an executive officer of IT’SUGAR and may be redeemed for cash at the holder’s option upon a contingent event outside of the Company’s control.

During the three months ended March 31, 2020, Bluegreen repurchased and retired 1,878,400 shares of its common stock for $11.7 million.

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. 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 tables below set forth information regarding the Company’s consolidated financial instruments (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 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 values of Bluegreen’s fixed rate, receivable-backed notes payable 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.

The fair values of the Company’s other borrowings (other than Bluegreen’s notes payable and other borrowings and Community Development Bonds above) are 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 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 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.~~Directors, and effective January 1, 2020, Mr. Alan B. Levan also became Bluegreen’s President and Chief Executive Officer. 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. In addition, Raymond S. Lopez, the Company’s Executive Vice President and Chief Financial Officer, also serves as Bluegreen’s Chief Financial Officer and Chief Operating Officer.

Woodbridge is a wholly-owned subsidiary of ~~the Company~~BBX Capital and owned ~~90.3%~~approximately 93% of Bluegreen’s outstanding common stock as of ~~September 30, 2019.~~March 31, 2020.

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 each of the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~respectively, and $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 $34.3~~$8.7 million of dividends from Bluegreen during the three ~~and nine~~ months ended ~~September 30, 2019, respectively,~~March 31, 2020, and ~~$10.1 million and $30.3~~$11.4 million of dividends from Bluegreen during the three ~~and nine~~ months ended ~~September 30, 2018, respectively.~~March 31, 2019. In April 2020, Bluegreen suspended the payment of its quarterly dividend for the foreseeable future due to the COVID-19 pandemic.

In April 2015, pursuant to a Loan Agreement and Promissory Note, a wholly-owned subsidiary of Bluegreen provided an $80.0 million loan to BBX Capital. ~~Amounts outstanding on~~Effective April 17, 2020, Bluegreen and BBX Capital amended the loan ~~bear~~agreement to extend the maturity date of the loan from April 2020 to April 2021 and reduce the interest ~~at a~~ rate offrom 6% to 4% per annum. Payments of interest are required on a quarterly basis, and all outstanding amounts are now due and payable inon April ~~2020.~~17, 2021. BBX Capital is permitted to prepay the loan in whole or in part at any time, and prepayments may be required, to the extent necessary, in order for Bluegreen or its subsidiaries to remain in compliance with covenants under outstanding indebtedness. During each of the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 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 ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~BBX Capital received $13.0 million and $1.0 million of tax sharing payments from Bluegreen and Renin, respectively.~~ BBX Capital did not receive any tax sharing payments from Bluegreen and ~~Renin during the three months ended September 30, 2019. During the three and nine months ended September 30, 2018,~~Renin. In April 2019, Bluegreen paid BBX Capital ~~received $7.1~~$2.3 million ~~and $21.0 million, respectively,~~ of tax sharing ~~payments from Bluegreen.~~payments.

During each of the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 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 (“CODM”) in assessing performance and deciding how to allocate resources. Reportable segments consist of one or more operating segments with similar economic characteristics, products and services, production processes, type of customer, distribution system or regulatory environment.

The information provided for segment reporting is obtained from internal reports utilized by ~~management of~~ the ~~Company,~~Company’s CODM, 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,~~BBX Sweet Holdings, and ~~IT’SUGAR.~~Renin. See Note 1 for a description of ~~these~~the Company’s reportable segments.

In the segment information for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ amounts set forth in the column entitled “Other” include the Company’s investments in various operating businesses, including ~~its remaining operating businesses in the confectionery industry,~~ a controlling financial interest in a restaurant acquired in connection with a loan receivable ~~default, and its pizza restaurant operations as a franchisee of MOD Pizza. As described~~default. Also, amounts set forth in ~~Note 1,~~ the ~~Company exited its pizza restaurant~~column

entitled “Other” for the three months ended March 31, 2019 include the Company’s operations as a franchisee of MOD Pizza restaurant locations in Florida, which the Company exited in September 2019.

The amounts set forth in the column entitled “Reconciling Items and Eliminations” include corporate general and administrative expenses, interest expense associated with Woodbridge’s junior subordinated debentures and BBX Capital’s $50.0 million revolving line of credit, and elimination entries. In addition, this column includes information related to BBX Capital’s financial position, including cash and cash equivalents held directly by BBX Capital of $137.8 million.

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, 2020 (in thousands):



Revenues:	Bluegreen		BBX Capital Real Estate		BBX Sweet Holdings		Renin		Other		Reconciling Items and Eliminations		Segment Total
Sales of VOIs	$	45,128		—		—		—		—		—		45,128
Fee-based sales commissions		41,365		—		—		—		—		—		41,365
Other fee-based services		29,314		—		—		—		—		—		29,314
Cost reimbursements		19,120		—		—		—		—		—		19,120
Trade sales		—		—		21,329		17,446		2,110		(8)		40,877
Sales of real estate inventory		—		6,439		—		—		—		—		6,439
Interest income		21,866		104		14		—		-		(668)		21,316
Net losses on sales of real estate assets		—		(47)		—		—		—		—		(47)
Other revenue		—		460		119		—		249		(254)		574
Total revenues		156,793		6,956		21,462		17,446		2,359		(930)		204,086
Costs and expenses:
Cost of VOIs sold		4,099		—		—		—		—		—		4,099
Cost of other fee-based services		22,711		—		—		—		—		—		22,711
Cost reimbursements		19,120		—		—		—		—		—		19,120
Cost of trade sales		—		—		14,770		14,275		735		(8)		29,772
Cost of real estate inventory sold		—		4,632		—		—		—		—		4,632
Interest expense		8,818		—		61		114		3		837		9,833
Recoveries from loan losses, net		—		(3,512)		—		—		—		—		(3,512)
Impairment losses		—		—		24,708		—		3,575		—		28,283
Selling, general and administrative expenses		101,197		2,336		10,900		2,618		1,743		8,059		126,853
Total costs and expenses		155,945		3,456		50,439		17,007		6,056		8,888		241,791
Equity in net earnings of unconsolidated real estate joint ventures		—		551		—		—		—		—		551
Other income (expense)		133		—		39		(3)		—		62		231
Foreign exchange gain		—		—		—		278		—		—		278
Income (loss) before income taxes	$	981		4,051		(28,938)		714		(3,697)		(9,756)		(36,645)
Total assets	$	1,386,451		141,138		139,849		35,477		6,294		67,287		1,776,496
Expenditures for property and equipment	$	2,966		—		3,126		391		31		35		6,549
Depreciation and amortization	$	3,899		—		1,433		306		25		103		5,766
Debt accretion and amortization	$	894		95		55		37		-		55		1,136
Cash and cash equivalents	$	241,525		10,132		3,079		3,876		587		138,319		397,518
Equity method investments	$	—		59,373		—		—		—		—		59,373
Goodwill	$	—		—		14,864		—		—		—		14,864
Receivable-backed notes payable	$	419,697		—		—		—		—		—		419,697
Notes payable and other borrowings	$	223,785		25,651		5,749		10,504		—		—		265,689
Junior subordinated debentures	$	72,285		—		—		—		—		65,191		137,476

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



										Bluegreen	BBX Capital Real Estate	BBX Sweet Holdings	Renin	Other	Reconciling Items and Eliminations	Segment Total
Revenues:		Bluegreen	BBX Capital Real Estate	Renin	IT'SUGAR	Other	Reconciling Items and Eliminations	Segment Total
Sales of VOIs	$	66,318	-	-	-	-	-	66,318	$	51,731	—	—	—	—	—	51,731
Fee-based sales commissions		60,478	-	-	-	-	-	60,478		45,212	—	—	—	—	—	45,212
Other fee-based services		33,744	-	-	-	-	-	33,744		29,568	—	—	—	—	—	29,568
Cost reimbursements		21,111	-	-	-	-	-	21,111		17,044	—	—	—	—	—	17,044
Trade sales		-	-	16,442	24,678	6,541	(1)	47,660		—	—	22,131	19,343	4,519	(9)	45,984
Sales of real estate inventory		-	370	-	-	-	-	370		—	4,236	—	—	—	—	4,236
Interest income		22,081	166	-	-	45	(495)	21,797		22,008	202	15	—	24	(834)	21,415
Net gains on sales of real estate assets		-	399	-	-	-	-	399		—	1,332	—	—	—	—	1,332
Other revenue		2,146	197	-	15	1,053	(174)	3,237		—	684	14	—	451	(319)	830
Total revenues		205,878	1,132	16,442	24,693	7,639	(670)	255,114		165,563	6,454	22,160	19,343	4,994	(1,162)	217,352
Costs and expenses:
Cost of VOIs sold		3,121	-	-	-	-	-	3,121		3,848	—	—	—	—	—	3,848
Cost of other fee-based services		23,746	-	-	-	-	-	23,746		22,868	—	—	—	—	—	22,868
Cost reimbursements		21,111	-	-	-	-	-	21,111		17,044	—	—	—	—	—	17,044
Cost of trade sales		-	-	12,983	13,902	4,976	(1)	31,860		—	—	15,397	15,117	1,785	(9)	32,290
Cost of real estate inventory sold		-	-	-	-	-	-	-		—	2,643	—	—	—	—	2,643
Interest expense		10,388	-	131	24	29	1,298	11,870		9,506	—	44	140	1	1,457	11,148
Recoveries from loan losses, net		-	(1,821)	-	-	-	-	(1,821)		—	(961)	—	—	—	—	(961)
Impairment losses		-	37	-	-	3,993	-	4,030		—	—	—	—	618	—	618
Selling, general and administrative expenses		117,159	2,336	2,849	9,567	4,900	11,738	148,549		90,214	2,494	10,211	3,035	3,933	12,106	121,993
Total costs and expenses		175,525	552	15,963	23,493	13,898	13,035	242,466		143,480	4,176	25,652	18,292	6,337	13,554	211,491
Equity in net earnings of unconsolidated real estate joint ventures		-	28,534	-	-	-	-	28,534
Foreign exchange gain (loss)		-	-	-	-	-	-	-
Equity in net losses of unconsolidated real estate joint ventures										—	(17)	—	—	—	—	(17)
Other income										89	162	209	—	6	47	513
Foreign exchange gain										—	—	—	5	—	—	5
Income (loss) before income taxes	$	30,353	29,114	479	1,200	(6,259)	(13,705)	41,182	$	22,172	2,423	(3,283)	1,056	(1,337)	(14,669)	6,362

Total assets	$	1,360,829	147,712	32,103	150,841	32,135	93,818	1,817,438	$	1,347,093	175,195	155,022	34,856	31,631	16,879	1,760,676

Expenditures for property and equipment	$	3,986	1	79	3,752	224	-	8,042	$	7,507	3	1,266	115	776	26	9,693
Depreciation and amortization	$	3,585	-	303	1,181	714	101	5,884	$	3,365	93	1,359	298	286	112	5,513
Debt accretion and amortization	$	1,430	22	6	56	1	60	1,575	$	1,121	86	57	8	—	90	1,362
Cash and cash equivalents	$	183,207	21,781	-	2,412	7,745	153,673	368,818	$	189,875	18,846	4,911	—	7,327	75,358	296,317
Real estate equity method investments	$	-	53,739	-	-	-	-	53,739
Equity method investments									$	—	67,382	—	—	—	—	67,382
Goodwill	$	-	-	-	35,167	2,081	-	37,248	$	—	—	35,521	—	1,727	—	37,248
Receivable-backed notes payable	$	436,760	-	-	-	-	-	436,760	$	437,927	—	—	—	—	—	437,927
Notes payable and other borrowings	$	119,045	32,009	8,394	406	1,861	(295)	161,420	$	125,436	31,959	3,587	8,059	—	—	169,041
Junior subordinated debentures	$	71,883	-	-	-	-	65,155	137,038	$	71,504	—	—	—	—	65,119	136,623

~~The table below sets forth the Company’s segment information as of and for the three 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
$
70,698

-

-

-

-

-

70,698
Fee-based sales commissions

61,641

-

-

-

-

-

61,641
Other fee-based services

31,057

-

-

-

-

-

31,057
Cost reimbursements

16,900

-

-

-

-

-

16,900
Trade sales

-

-

15,330

22,663

5,815

(5)

43,803
Sales of real estate inventory

-

7,478

-

-

-

-

7,478
Interest income

21,531

229

-

-

10

(613)

21,157
Other revenue

378

572

-

99

840

(220)

1,669
Total revenues

202,205

8,279

15,330

22,762

6,665

(838)

254,403
Costs and expenses:

Cost of VOIs sold

11,237

-

-

-

-

-

11,237
Cost of other fee-based services

19,937

-

-

-

-

-

19,937
Cost reimbursements

16,900

-

-

-

-

-

16,900
Cost of trade sales

-

-

12,306

12,236

4,420

(5)

28,957
Cost of real estate inventory sold

-

4,655

-

-

-

-

4,655
Interest expense

9,208

-

157

-

53

1,712

11,130
Recoveries from loan losses, net

-

(443)

-

-

-

-

(443)
Impairment losses

-

193

-

-

-

-

193
Selling, general and administrative expenses

112,407

2,307

2,250

8,962

4,868

12,765

143,559
Total costs and expenses

169,689

6,712

14,713

21,198

9,341

14,472

236,125
Equity in net earnings of unconsolidated real estate joint ventures

-

373

-

-

-

-

373
Foreign exchange gain

-

-

76

-

-

-

76
Income (loss) before income taxes
$
32,516

1,940

693

1,564

(2,676)

(15,310)

18,727

Total assets
$
1,336,992

136,290

28,798

71,450

37,577

66,660

1,677,767

Expenditures for property and equipment
$
9,242

131

99

1,942

1,704

125

13,243
Depreciation and amortization
$
3,169

91

292

1,153

644

108

5,457
Debt accretion and amortization
$
1,086

-

4

(90)

143

91

1,234
Cash and cash equivalents
$
195,439

21,625

-

4,483

10,068

137,897

369,512
Real estate equity method investments
$
-

42,550

-

-

-

-

42,550
Goodwill
$
-

-

-

35,167

4,315

-

39,482
Receivable-backed notes payable
$
433,450

-

-

-

-

-

433,450
Notes payable and other borrowings
$
137,834

16,285

9,422

620

3,090

29,926

197,177
Junior subordinated debentures
$
71,147

-

-

-

-

65,084

136,231

~~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):~~

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 in the footnotes herein.

3229

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

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 the 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,” 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 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 and the accuracy of forward-looking statements may be affected by various risks and uncertainties, including the risk factors applicable to the Company which are described herein and in “Item 1. Business – Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (the ~~“2018~~“2019 Annual Report”), and the Company’s Current Report on Form 8-K filed with the SEC on March 31, 2020. These risks and uncertainties also include risks relating to public health issues, including, in particular, the COVID-19 pandemic, as ~~well~~it is not currently possible to accurately assess the expected duration and effects of the pandemic on our business. These include required closures of resorts and retail locations, travel and business restrictions, “shelter in place” and “stay at home” orders and advisories, volatility in the global and national economies and equity, credit, and commodities markets, worker absenteeism, quarantines, and other health-related restrictions; the duration and severity of the COVID-19 pandemic and the impact on demand for the Company’s products and services, levels of consumer confidence, and supply chains; actions governments, businesses, and individuals take in response to the pandemic and their impact on economic activity and consumer spending, which will impact the Company’s ability to successfully resume full business operations; the pace of recovery when the COVID-19 pandemic subsides; competitive conditions; the Company’s liquidity and the availability of capital; the effects and duration of steps the Company takes in response to the COVID-19 pandemic, including the risk of lease defaults and the inability to rehire or replace furloughed employees; risks that the Company’s current or future business and marketing alliances may not be available to it in the future; risks that default rates may increase and exceed the Company’s expectations; risks related to the Company’s indebtedness, including the potential for accelerated maturities and debt covenant violations; the risk of heightened litigation as a result of actions taken in response to the COVID-19 pandemic; the impact of the COVID-19 pandemic and other factors on the Company’s ability to pay dividends, including that 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~~future dividends may not be ~~as profitable as under the prior terms,~~paid at historical rates or at ~~all, or otherwise result in~~all; the ~~benefits anticipated,~~impact of the COVID-19 pandemic on consumers, including, but not limited to, their income, their level of discretionary spending both during and after the pandemic, and their views towards the travel, hospitality, vacation ownership and retail industries; and the risk that ~~Bluegreen~~certain of the Company’s operations, including Bluegreen’s resort management and finance operations, may not ~~open kiosks in Cabela’s stores in~~continue to generate recurring sources of cash during or following the ~~number~~pandemic to the extent anticipated or at ~~the times anticipated.~~ all.

The risk factors described in the ~~2018~~2019 Annual Report, as well as the other risks and factors detailed in this 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, and the Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report.

Critical Accounting Policies

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~~2019 Annual Report for a discussion of 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 Corporation (“Bluegreen Vacations” or “Bluegreen”), BBX Capital Real Estate LLC (“BBX Capital Real Estate”), BBX Sweet Holdings, LLC (“BBX Sweet Holdings”), and Renin Holdings, LLC (“Renin”)~~, and IT’SUGAR, LLC (“IT’SUGAR”)~~. ~~In addition to its principal investments, the Company has other investments in various operating businesses, including 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 the Company can be more easily analyzed and followed by the marketplace. The Company regularly reviews the performance of its investments and, based upon economic, market, and other relevant factors, considers transactions involving the sale or disposition of all or a portion of its assets, investments, or subsidiaries. These include, among other alternatives, a sale or spin-off of its assets, investments, or subsidiaries or transactions involving public or private issuances of debt or equity securities which decrease or dilute the Company’s ownership interest in such investments.

In 2016, Food for Thought Restaurant Group (“FFTRG”), a wholly-owned subsidiary of BBX Capital, entered into area development and franchise agreements with MOD Super Fast Pizza (“MOD Pizza”) related Further, the Company may from time 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~~time repurchase its outstanding securities 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~~outstanding securities of its ~~restaurant locations, including the related assets, operations,~~subsidiaries subject to market conditions and lease obligations, to MOD Pizza during the third quarter of 2019. In addition, the Company closed the remaining two locations and terminated the related lease agreements. The Company recognized $4.0 million and $6.7 million of impairment losses associated with its investment in MOD Pizza restaurant locations during the three and nine months ended September 30, 2019, respectively.other factors.

As of ~~September 30, 2019,~~March 31, 2020, the Company had total consolidated assets of approximately $1.8 billion and shareholders’ equity of approximately ~~$556.7~~$521.9 million.

Impact of the COVID-19 Pandemic

The COVID-19 pandemic has been, and continues to be, an unprecedented disruption in the U.S. and global economies and the industries in which the Company operates due to, among other things, government ordered “shelter in place” and “stay at home” orders and advisories, travel restrictions, and restrictions on business operations, including required closures of resorts and retail locations. The disruptions arising from the pandemic and the reaction of the general public had a significant adverse impact on the Company's financial condition and operations during the three months ended March 31, 2020. The duration and severity of the pandemic and related disruptions, as well as the adverse impact on economic and market conditions, are uncertain; however, given the nature of these circumstances, the adverse impact of the pandemic on the Company’s consolidated results of operations, cash flows, and financial condition in 2020 has been, and is expected to continue to be, material. Furthermore, although the duration and severity of the effects of the pandemic are uncertain, it is expected that demand for many of the Company’s products and services may remain weak for a significant length of time, and the Company cannot predict if and when the industries in which the Company operates will return to pre-pandemic levels.

from certain available lines of credit, reducing planned capital expenditures, and, in the case of BBX Capital and Bluegreen, suspending the payment of quarterly dividends. As of March 31, 2020, the Company’s consolidated cash balances were $397.5 million, including $137.8 million held directly by BBX Capital.

See below for additional discussion related to the current and estimated impacts of the COVID-19 pandemic on the Company’s principal investments.

Summary of Consolidated Results of Operations

Consolidated Results

The following summarizes key financial highlights for the three months ended ~~September 30, 2019~~March 31, 2020 compared to the same ~~2018~~2019 period:

Total consolidated revenues of ~~$255.1~~$204.1 million, a ~~0.3% increase~~6.1% decrease compared to the same period in ~~2018.~~2019.

~~Income~~Loss before income taxes of ~~$41.2~~$36.6 million ~~a 119.9% increase~~ compared to income before income taxes of $6.4 million for the same period in ~~2018.~~2019.

Net loss attributable to common shareholders of $28.3 million compared to net income attributable to common shareholders of ~~$22.4~~$1.5 million ~~a 262.3% increase compared to~~for the same period in ~~2018.~~2019.

Diluted loss per share of $0.31 per diluted share compared to diluted earnings per share of ~~$0.24 per diluted share, an $0.18 per share increase compared to~~$0.02 for the same ~~2018~~2019 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 of $12.2 million, a 48.6% decrease compared to the same period in 2018.~~

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

The Company’s consolidated results for the three months ended ~~September 30, 2019~~March 31, 2020 compared to the same ~~2018~~2019 period were ~~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 weresignificantly impacted by the following:

The recognition of ~~a charge~~impairment losses of ~~$39.1~~$28.3 million ~~in the 2019 period~~primarily related to goodwill and long-lived assets 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~~IT’SUGAR as a result of the ~~2019 period, including~~impact of 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 gross profits from VOI sales primarily attributable to lower system-wide sales of VOIs and an increase in the provision for loan losses, partially offset by a decrease in costs of VOIs sold.COVID-19 pandemic.

An increase in Bluegreen’s ~~net carrying cost of VOI inventory primarily due to Bluegreen’s acquisition~~allowance for loan losses as a result 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.~~estimated impact of the COVID-19 pandemic on customer defaults.

~~A decrease~~An increase in ~~BBX Capital Real Estate’s interest income~~Bluegreen’s selling and ~~recoveries from loan losses~~marketing expenses primarily ~~due~~attributable to higher costs per guest tour, higher fees to Bass Pro pursuant to Bluegreen’s amended marketing agreement with Bass Pro, and additional costs associated with Bluegreen’s marketing operations in 21 new Cabela’s stores.

The closing of Bluegreen’s sales offices and IT’SUGAR’s retail locations in March 2020 in response to the ~~continued decline in the balance of the Company’s legacy portfolio, as several significant nonaccrual commercial loans were repaid in 2018.~~COVID-19 pandemic.

Segment Results

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

Information regarding income before income taxes by reportable segment is set forth in the table below (in thousands):

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2019

2018

Change

2019

2018

Change
Bluegreen
$
30,353

32,516

(2,163)

42,516

102,679

(60,163)
BBX Capital Real Estate

29,114

1,940

27,174

50,641

15,627

35,014
Renin

479

693

(214)

1,550

704

846
IT'SUGAR

1,200

1,564

(364)

(580)

(477)

(103)
Other

(6,259)

(2,676)

(3,583)

(13,045)

(11,038)

(2,007)
Reconciling items and eliminations

(13,705)

(15,310)

1,605

(42,500)

(45,372)

2,872
Income before income taxes

41,182

18,727

22,455

38,582

62,123

(23,541)
Provision for income taxes

(14,682)

(6,742)

(7,940)

(15,068)

(21,997)

6,929
Net income

26,500

11,985

14,515

23,514

40,126

(16,612)
Less: Net income attributable to noncontrolling interests

4,112

5,806

(1,694)

11,275

16,324

(5,049)
Net income attributable to shareholders
$
22,388

6,179

16,209

12,239

23,802

(11,563)



	For the Three Months Ended March 31,
	2020		2019		Change
Bluegreen	$	981		22,172		(21,191)
BBX Capital Real Estate		4,051		2,423		1,628
BBX Sweet Holdings		(28,938)		(3,283)		(25,655)
Renin		714		1,056		(342)
Other		(3,697)		(1,337)		(2,360)
Reconciling items and eliminations		(9,756)		(14,669)		4,913
(Loss) income before income taxes		(36,645)		6,362		(43,007)
Benefit (provision) for income taxes		5,830		(1,724)		7,554
Net (loss) income		(30,815)		4,638		(35,453)
Less: Net (loss) income attributable to noncontrolling interests		(2,505)		3,139		(5,644)
Net (loss) income attributable to shareholders	$	(28,310)		1,499		(29,809)

Bluegreen Reportable Segment

Segment Description

Bluegreen is a leading vacation ownership company that markets and sells VOIs and manages resorts in popular leisure and urban destinations. Bluegreen’s resort network includes 45 Club Resorts (resorts in which owners in its Vacation Club have the right to use most of the units in connection with their VOI ownership) and 2423 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 ~~219,000~~221,000 owners in its Vacation Club have the flexibility to stay at units available at ~~any of~~ its resorts and have access to ~~approximately~~over 11,350 other hotels and resorts through partnerships and exchange networks. Bluegreen also has a ~~robust~~ sales and marketing platform supported by ~~exclusive~~ marketing relationships, ~~which drive~~such as with Bass Pro and Choice Hotels. These marketing relationships have historically generated sales within its core demographic.

The COVID-19 pandemic has been, and continues to be, an unprecedented disruption in the U.S. economy and the travel, hospitality and vacation ownership industries due to, among other things, government ordered travel restrictions and restrictions on business operations, including required resort closures. On March 23, 2020, Bluegreen temporarily closed all of its VOI sales centers; its retail marketing operations at Bass Pro Shops, Cabela’s stores and outlet malls; and the Choice Hotels call transfer program. In connection with these actions, Bluegreen canceled existing owner reservations through May 15, 2020 and new prospect guest tours through June 30, 2020. Further, some of Bluegreen’s Club and Club Associate Resorts were closed in accordance with government mandates and advisories. Bluegreen is currently developing a plan to reopen these operations including accepting guests as of May 16, 2020 and VOI sales centers and marketing operations beginning June 2020 on a phased schedule. Prior to the COVID-19 pandemic, Bluegreen started the year off with improved operating results, with system-wide sales of vacation ownership interests up 16.5% through February 29, 2020.

As a result of the effect of the pandemic, Bluegreen implemented several cost mitigating activities, including a reduction in workforce of over 970 positions and placed another 3,700 of its associates on temporary furlough and reduced work hours. As of March 31, 2020, as a result of the effect of the COVID-19 pandemic, Bluegreen incurred $2.5 million in severance and $0.8 million of payroll expenses relating to employees on temporary furlough or reduced work hours. These payments and expenses are included in selling, general and administrative expenses on the Company’s condensed consolidated statement of operations and comprehensive income for the three months ended March 31, 2020.

As a precautionary measure designed to provide Bluegreen with additional liquidity, Bluegreen drew down $60 million under its lines-of-credit and pledged or sold receivables under its various receivable backed facilities. Bluegreen also suspended its quarterly cash dividends on its common stock. Bluegreen continues to actively pursue additional credit facility capacity, capital market transactions, and other alternatives and hopes that the steps it is taking will provide Bluegreen with sufficient available cash for a sustained period of time. In addition, while there is no assurance this will be the case, Bluegreen expects that its resorts management and finance operations will continue to generate recurring cash sources of income. For more detailed information see “Liquidity and Capital Resources - Bluegreen” below.

Bluegreen has historically financed a majority of its sales of VOIs, and accordingly, is subject to the risk of defaults by its customers. GAAP requires that Bluegreen reduce sales of VOIs by an estimate of uncollectible VOI notes receivable. The COVID-19 pandemic has had a material adverse impact on unemployment in the United States and economic conditions in general and the impact may continue for some time. While the impact of the COVID-19 pandemic through March 31, 2020 was not yet reflected in Bluegreen’s default or delinquency rates, Bluegreen believes that the COVID-19 pandemic will have a significant impact on its VOI notes receivable. Accordingly, Bluegreen recorded an additional allowance for loan losses of $12 million as of March 31, 2020, which includes its estimate of customer defaults as a result of the COVID–19 pandemic based on Bluegreen’s historical experience, forbearance requests received from customers, and other factors, including but not limited to, the seasoning of the note receivable and FICO scores of the customers.

The Coronavirus Aid, Relief, and Economic Securities Act (“CARES Act”) was signed into law on March 27, 2020 in response to the COVID-19 pandemic in order to provide for economic support and stimulus. Bluegreen will continue to review the relevant provisions of the CARES Act and intends to take advantage of certain provisions,

including, but not limited to, the deferral of the employer portion of the tax withholding amounts and the employee retention tax credits.

See Item 7 to the Company’s ~~2018~~2019 Annual Report for additional information with respect to Bluegreen’s business and operations.

Key Business and Financial Metrics and Terms Used by Management

In addition to the principal components of revenues and expenses affecting Bluegreen’ results of operations, which are further described in Item 7 to the Company’s ~~2018~~2019 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 developed VOIs and those acquired through just-in-time (“JIT”) and secondary market arrangements, reduced by equity trade allowances and ~~a provision for loan losses.~~an estimate of uncollectible VOI notes receivable. 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~~guest tours by the number of ~~guest tours.~~VOI sales transactions.

Average Sales Volume Per Guest (“VPG”). Represents the sales attributable to ~~each guest tour~~tours 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~~severance charges and incremental costs associated with ~~the Bass Pro settlement in June 2019~~COVID-19 were excluded in the computation of Adjusted EBITDA for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020.

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.

3735

Results of Operations

Information regarding the results of operations for Bluegreen, including a reconciliation of net income to EBITDA and Adjusted EBITDA, is set forth below (dollars in thousands):

1


		For the Three Months Ended September 30,					For the Three Months Ended March 31,
		2019			2018		2020				2019
		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)	$	87,863	52%	$	90,596	52%	$	87,577		64%	$	68,153		53%
Secondary market sales		72,081	42%		54,300	31%		67,916		49%		59,153		45%
Fee-based sales		87,646	51%		88,155	51%		61,908		45%		66,794		52%
JIT sales		4,505	3%		13,591	8%		3,100		2%		2,234		2%
Less: Equity trade allowances (6)		(81,720)	-48%		(73,336)	-42%		(83,112)		-60%		(66,656)		-52%
System-wide sales of VOIs		170,375	100%		173,306	100%		137,389		100%		129,678		100%
Less: Fee-based sales		(87,646)	-51%		(88,155)	-51%		(61,908)		-45%		(66,794)		-52%
Gross sales of VOIs		82,729	49%		85,151	49%		75,481		55%		62,884		48%
Provision for loan losses (2)		(16,411)	-20%		(14,453)	-17%		(30,353)		-40%		(11,153)		-18%
Sales of VOIs		66,318	39%		70,698	41%		45,128		33%		51,731		40%
Cost of VOIs sold (3)		(3,121)	-5%		(11,237)	-16%		(4,099)		-9%		(3,848)		-7%
Gross profit (3)		63,197	95%		59,461	84%		41,029		91%		47,883		93%
Fee-based sales commissions (4)		60,478	69%		61,641	70%		41,365		67%		45,212		68%
Financing revenue, net of
financing expense		11,693	7%		12,323	7%		13,048		9%		12,502		10%
Other fee-based services		54,855	32%		47,957	28%		48,434		35%		46,612		36%
Cost of other fee-based services		(38,979)	-23%		(33,929)	-20%		(33,917)		-25%		(32,225)		-25%
Net carrying cost of VOI inventory		(5,878)	-3%		(2,908)	-2%		(7,914)		-6%		(7,687)		-6%
Selling and marketing expenses		(87,358)	-51%		(84,955)	-49%		(74,140)		-54%		(65,222)		-50%
General and administrative expenses		(29,801)	-17%		(27,452)	-16%		(27,057)		-20%		(24,992)		-19%
Operating profit		28,207	17%		32,138	19%		848		1%		22,083		17%
Other income		2,146			378			133				89
Provision for income taxes		(7,778)			(8,443)			(44)				(5,303)
Net income	$	22,575		$	24,073		$	937			$	16,869

Adjustments for EBITDA:
Provision for income taxes		7,778			8,443			44				5,303
Income before taxes		30,353			32,516			981				22,172
Depreciation and amortization		3,585			3,169			3,899				3,365
Franchise taxes		112			56			17				34
Interest expense (other than interest
incurred on debt that is secured by
VOI notes receivable)		5,326			4,207			4,154				4,244
Interest income (other than interest
earned on VOI notes receivable)		(1,799)			(1,407)			(1,718)				(1,846)
EBITDA		37,577			38,541			7,333				27,969
Adjustments for Adjusted EBITDA:
(Gain) loss on assets held for sale		(166)			18			(44)				9
EBITDA attributable to
noncontrolling interest in
Bluegreen/Big Cedar Vacations		(2,364)			(3,637)			(906)				(1,781)
Covid-19 incremental costs								106				—
Severance		1,924			-			4,496				—
Adjusted EBITDA	$	36,971		$	34,922		$	10,985			$	26,197

Sales of VOIs. Sales of VOIs were ~~$66.3~~$45.1 million and ~~$186.4~~$51.7 million during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 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~~were impacted by the factors described below in system-wide sales of VOIs. Gross sales of VOIs were reduced by ~~$16.4~~$30.4 million and ~~$39.5~~$11.2 million during the three ~~and nine~~ months ended ~~September 30, 2019, respectively,~~March 31, 2020 and ~~$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 ~~20%~~40% and ~~17%~~18% during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 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 was ~~approximately 40% and 42%~~43% during the three ~~and nine~~ months ended ~~September 30, 2019, respectively, compared to 39%~~March 31, 2020 and ~~41%~~44% during the three ~~and nine~~ months ended ~~September 30, 2018, respectively. The increases~~March 31, 2019.

While the impact of COVID-19 pandemic on Bluegreen’s borrowers had not yet been reflected in its default or delinquency rates as of March 31, 2020, Bluegreen believes that the COVID-19 pandemic will have a significant impact on its VOI notes receivable. Accordingly, as of March 31, 2020, Bluegreen recorded an additional allowance for loan losses of $12.0 million, which includes an estimate of customer defaults as a result of the COVID–19 pandemic based on Bluegreen’s historical experience, forbearance requests received from its customers, and other factors, including but not limited to, the seasoning of the notes receivable and FICO scores of the customers. In addition to the COVID-19 pandemic impact discussed above, the provision for loan losses ~~were primarily due to~~was impacted by an increase in the average annual default rates, which Bluegreen believes iswas due in large part to the receipt of letters from third parties and 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%~~2020 period increased 51.9% compared to the ~~third quarter of 2018 and up 26% compared to the second quarter~~same period 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 1112: Commitments and Contingencies to the Company’s condensed consolidated financial statements included in Item 1 of this report for additional information regarding such letters and actions Bluegreen has taken ~~by Bluegreen~~ in connection ~~therewith. While Bluegreen believes its notes receivable are adequately reserved at this time,~~with such letters. The impact of the COVID-19 pandemic is highly uncertain. As a result, actual defaults may differ from ~~the~~ estimates and the ~~reserve~~allowance for loan losses may not prove to 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 annual default rates and delinquency rates (more than 30 days past due) on Bluegreen’s VOI notes receivable were as follows:

System-wide sales of VOIs.System-wide sales of VOIs were ~~$170.4~~$137.4 million and ~~$463.6~~$129.7 million during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~respectively, and $173.3 million and $478.1 million~~respectively. System-wide sales of VOIs increased during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 compared to the comparable period in 2019 ~~respectively.~~due to an increase in the sale-to-tour conversion ratio and higher average sales volume per guest. Prior to the COVID-19 pandemic, Bluegreen ~~estimates that~~started the year off with improved operating results, with system-wide sales of vacation ownership interests up 16.5% through February 29, 2020. The closures of all marketing operations and VOI sales centers as a result of the COVID-19 pandemic is expected to significantly impact 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~~remainder of 2020, however the actual impact, including the extent and ~~nine months ended September 30, 2019 compared to same 2018 periods due to a decrease in VPG and~~duration of 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 due in part to disruptions in staffing and operationsimpact, cannot be predicted at certain of Bluegreen’s sales offices related to the issues with Bass Pro which were resolved when the parties entered into a settlement agreement in June 2019. See Note 11 to the Company’s condensed consolidated financial statements included in Item 1 of this ~~report for additional information regarding the Bass Pro settlement.~~time.

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~~its debt service requirements and default resale requirements under term securitizations and similar transactions. These factors and business initiatives contribute to fluctuations in the amount of sales by category from period to period. Fee-Based Sales comprised 45% and 52% of system-wide sales of VOIs during the three months ended March 31, 2020 and 2019, respectively. Bluegreen expects this rate to continue to decrease upon the reopening of VOI sales centers planned to begin in June 2020 as Bluegreen intends to focus on selling Bluegreen owned inventory, including developed VOI inventory. However, Bluegreen intends to remain flexible with respect to its sales of the different categories of its VOI inventory based on economic conditions, business initiatives and other considerations, and accordingly these trends may differ from current expectations.

The following table sets forth certain information related to Bluegreen’s system-wide sales of VOIs:

Cost of VOIs Sold.During the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ cost of VOIs sold was ~~$3.1~~$4.1 million and ~~$11.2 million, respectively, and represented 5% and 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~~$3.8 million, respectively, and represented 9% and ~~10%~~7%, 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 ~~in which~~where 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 2019 periods, Bluegreen acquired more Secondary Market VOI inventory compared to the 2018 periods due to~~Cost of VOIs sold as a ~~temporary suspension~~percentage 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,~~of VOIs increased during the ~~2019 periods, Bluegreen’s cost of sales benefited from sales of relatively lower cost VOIs~~three months ended March 31, 2020 as compared to March 31, 2019 period, primarily due the ~~2018 periods~~increase in ~~which relatively higher cost VOIs were sold.~~ the provision for loan losses as a result of the COVID-19 pandemic described above.

Fee-Based Sales Commission Revenue. During the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ Bluegreen sold ~~$87.6~~$61.9 million and ~~$88.2~~$66.8 million, respectively, of third-party VOI inventory under commission arrangements and earned sales and marketing commissions of ~~$60.5~~$41.4 million and ~~$61.6~~$45.2 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 decreases in sales of third-party developer inventory on a commission basis during the 2019 periods were due primarily to the factors described above relating to the decrease in system-wide sales of VOIs. Bluegreen earned an average sales and marketing commission of ~~69%~~67% and 68% during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020, and 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~~its fee-based service arrangements. The decrease in sales of third-party developer inventory on a commission basis during the 2020 period was due primarily to a decision to focus on sales of Bluegreen owned VOIs. The decrease in sales and marketing commissions as a percentage of fee-based sales for the ~~three months ended September 30, 2019~~2020 period as compared to the ~~three months ended September 30, 2018~~2019 period is primarily related to the mix of developer sales at higher commission rates in the ~~2018~~2019 period as well as higher reserves for early ~~tenured~~ defaults in the ~~2019~~2020 period, which Bluegreen refunds to the third-party developers in certain circumstances.

Financing Revenue, Net of Financing Expense. During the three ~~and nine months~~ ended ~~September 30,~~March 31, 2020 and 2019, financing revenue, net of financing expense was ~~$11.7~~$13.0 million and ~~$36.0~~$12.5 million, ~~respectively, compared to $12.3 million and $38.3 million during the respective comparable 2018 periods.~~respectively. The ~~decrease~~increase is primarily attributable to a higher weighted average cost of borrowing and higher outstanding debt balances during the 2019 periods as compared to the 2018 periods. Additionally, in September 2019, Bluegreen paid off its 2013 Notes Payable and, in connection with this repayment, wrote off unamortized debt issuance costs of $0.4 million which contributed to thean increase in ~~interest expense in~~ the ~~2019 periods.~~balance of the notes receivable portfolio and lower outstanding receivable backed debt outstanding balances.

Other Fee-Based Services. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, revenue from Bluegreen’s resort operations, club management, and title operations was ~~$54.9~~$48.4 million and ~~$152.7~~$46.6 million, ~~respectively, compared to $48.0 million and $136.6 million, respectively during the comparable 2018 periods.~~respectively. These other fee-based services revenues were partially offset by expenses directly related to these operations of ~~$39.0 million and $106.4 million, for the three and nine months ended September 30, 2019, respectively, and~~ $33.9 million and ~~$94.1~~$32.2 million, ~~for the comparable 2018 periods,~~ respectively.

Other fee-based services revenue increased ~~14% and 12%~~4% during the three ~~and nine~~ months ended ~~September 30, 2019, respectively, as~~March 31, 2020 compared to the same ~~periods~~period in ~~2018.~~ 2019. Cost reimbursement revenue, which primarily consists of payroll and payroll related ~~costs~~expenses for management of the HOAs and other services Bluegreen provides where ~~Bluegreen~~it is the employer, increased ~~25%~~5% during ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 as compared to the ~~comparable 2018 periods.~~three months ended March 31, 2019. Net of cost reimbursement revenue, resort operations and club management revenues ~~increased 7% and 5% for~~decreased 1% during the three ~~and nine~~ months ~~ended September 30, 2019~~March 31, 2020 as compared to ~~the comparable 2018 periods. Resort operations and club management revenues increased during the~~three months ended March 31, 2019 ~~periods compared to the 2018 periods~~ primarily as a result of ~~the receipt of management fees for the full periods in 2019 related to managed resorts added during 2018~~lower retail operations and ~~higher~~lower third-party rental ~~commissions.~~commission due to lower occupancy as a result of the COVID-19 pandemic. Bluegreen managed 49 resort properties as of both ~~September 30, 2019~~March 31, 2020 and ~~September 30, 2018.~~March 31, 2019.

Cost of other fee-based services ~~increased 15% and 13%~~decreased by 4% during the three ~~and nine~~ months ended ~~September 30, 2019, respectively, as~~March 31, 2020 compared to the same ~~periods~~period in ~~2018. This increase was primarily due to increased cost reimbursement expense and the timing of the new managed resorts described above.~~ 2019.

Net Carrying Cost of VOI Inventory. The carrying cost of Bluegreen’s ~~VOI~~ inventory was ~~$9.2~~$9.8 million and ~~$7.2~~$9.3 million during the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively, which was partially offset by rental and sampler revenues of ~~$3.3~~$1.9 million and $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$1.6 million, respectively. The increase in net carrying costs of VOI inventory was primarily related to ~~Bluegreen’s acquisition of the Éilan Hotel and Spa during April 2018,~~ increased maintenance fees and developer subsidies associated with ~~the~~Bluegreen’s increase in VOI inventory ~~decreased~~partially offset by increased rentals of developer inventory. In certain circumstances, Bluegreen offsets marketing costs by using inventory ~~and decreased net operating profits from Bluegreen’s sampler program.~~for marketing guest stays.

Selling and Marketing Expenses. Selling and marketing expenses were ~~$87.4~~$74.1 million and ~~$235.6~~$65.2 million during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 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 ~~51%~~54% during ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 from ~~49%~~50% during ~~both~~ the three ~~and six~~ months ended ~~September 30, 2018, respectively. The increase in selling and marketing expenses as a percentage of system-wide sales of VOIs is~~March 31, 2019, primarily attributable to higher costs per guest tour, higher fees to Bass Pro as well as a change in the timing of expense recognition under the settlement agreement with Bass Pro discussed below, additional costs related to Bluegreen’s marketing operations in 21 new Cabela’s stores and ~~lower VPG.~~additional costs associated with the COVID-19 pandemic.

As previously described, due to the COVID-19 pandemic, on March 23, 2020, Bluegreen temporarily closed all of its marketing operations and VOI sales centers. Further, Bluegreen implemented several cost mitigating activities including terminating certain marketing employees and placing a significant number of its sales, sales support and corporate associates on temporary furlough and reduced work hours. As of March 31, 2020, Bluegreen had incurred $1.9 million in severance and $0.7 million of payroll expenses relating to sales and marketing employees on temporary furlough or reduced work hours as a result of the impact of the COVID-19 pandemic.

Bluegreen’s agreement with Bass Pro previously provided for the payment of a variable commission upon the sale of a VOI to a marketing prospect obtained through the Bass Pro marketing ~~channels~~.channels. As previously discussed, ~~herein,~~ pursuant to the settlement agreement and amended marketing arrangement with Bass Pro, the settlement ~~payments~~payment 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~~costs as a percentage of sales from the program, based on ~~the increase~~increases in program 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~~cost of this marketing program would ~~be higher than expected, and~~adversely impact Bluegreen’s results of operations and cash ~~flows would be adversely impacted.~~flow.

General and Administrative Expenses. General and administrative expenses were ~~$29.8~~$27.1 million and ~~$119.5~~$25.0 million during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 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 ~~17%~~20% and ~~26%~~19% during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, and 16% and 17% for the three and nine months ended September 30, 2018, respectively. 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, Bluegreen accrued severance and transition expenses of $1.9 million pursuant to agreements entered into with certain executives and members of management during 2019.

respectively. The increase in the 2020 period was ~~$2.1~~primarily due to approximately $2.6 million ~~and $4.2~~in increased severance costs, of which $0.2 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 primarilywas due to severance related to ~~a land sale during June 2019, which resulted in a gain of $2.0 million, and~~cost mitigation efforts attributable to 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~~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.

Although BBXRE’s operating results for the three months ended March 31, 2020 were not significantly impacted by the COVID-19 pandemic, the effects of the pandemic are currently impacting certain of BBXRE’s operations. In particular, while construction activities remain ongoing at BBXRE’s existing projects, the effects of the COVID-19 pandemic, including “shelter in place” and ~~Developments~~“stay at home” orders and advisories and increased unemployment and economic uncertainty, have disrupted sales activities at BBXRE’s single-family home developments and rental activities at its multifamily apartment developments. In addition, the effects of the pandemic, including the impact on general economic conditions and real estate and credit markets, have increased uncertainty related to the expected timing and pricing of future sales of multifamily apartment developments, single-family homes, and developed lots at BBXRE’s Beacon Lake Community, as well as the commencement of new multifamily apartment developments. BBXRE determined that its existing real estate investments were not impaired as of March 31, 2020 as the impact of the pandemic on real estate values was uncertain at such time; however, BBXRE will continue to monitor economic and market conditions and may recognize impairment losses in future periods to the extent that the effects of the pandemic have a severe and sustained adverse impact on the real estate market.

BBXRE previously disclosed that it anticipated its operating profits would decline in 2020 as compared to recent prior periods and expects that the effects of the COVID-19 pandemic will result in a further decline in its results of operations for 2020. In addition, as BBXRE’s primary focus in 2020 was to source investments in new development opportunities with the goal of building a diversified portfolio of real estate investments that generate profits in future periods, the effects of the COVID-19 pandemic may impact BBXRE over a longer term to the extent that its ability to identify new development opportunities that meet its investment criteria or source debt or equity capital from unaffiliated third parties is impacted for a prolonged period of time. While BBXRE may be able to identify opportunistic investments in a recessionary environment that BBX Capital could fund with its available cash, there is no certainty that such opportunities will arise or that BBX Capital will determine that such investments meet its investment criteria.

As a result of the above factors, including the potential impact of the COVID-19 pandemic on sales of existing projects and investments in new development opportunities, BBXRE’s results of operations and financial condition may be materially adversely impacted by the effects of the pandemic in future periods.

During the three months ended March 31, 2020, the Altis at Wiregrass joint venture, which was sponsored by the Altman Companies, sold its 392 unit multifamily apartment community in Tampa, Florida. As a result of the sale, BBXRE recognized $0.8 million of equity earnings during the three months ended March 31, 2020 and received approximately $2.3 million of distributions from the venture in April 2020. In addition, BBXRE contributed $1.3 million of additional capital to the Altman Companies to fund operations and invested $1.0 million in existing real estate joint ventures sponsored by the Altman Companies, including the Altis Miramar West, Altis Miramar East, and Altis at Lake Willis joint ventures.

With respect to the impact of the COVID-19 pandemic, construction activities remain ongoing at the existing projects sponsored by the Altman Companies, and as a result, the Altman Companies continues to generate development and general contractor fees from such projects. However, the effects of the COVID-19 pandemic, including “shelter in place” and “stay at home” orders and advisories and a recessionary economic environment, have disrupted rental activities at its multifamily apartment developments. These effects are expected to impact occupancy levels and rental rates and, although the Altman Companies has collected a significant portion of April and May 2020 rents, may also result in an increase in tenant delinquencies and/or requests for rent abatements, particularly to the extent that there is a prolonged economic downturn and high unemployment. As a result, these effects may subsequently impact the amount of rental revenues generated from such developments, the extent of management fees earned by the Altman Companies, and the ability of the related joint ventures to stabilize and ultimately sell such developments. Furthermore, a decline in rental revenues at such developments could require the Altman Companies, as the developer and sponsor of such projects, to fund certain operating shortfalls in certain circumstances.

In addition, the impact of the COVID-19 pandemic on economic conditions in general, including the uncertainty regarding the severity and duration of such impact, has resulted in a decline in real estate sales activity and tightened credit markets and may also impact real estate market values. As a result of these factors, the joint ventures sponsored by the Altman Companies may be unable to sell their respective multifamily apartment developments within the time frames previously anticipated and/or for the previously forecasted sales prices. Furthermore, the Altman Companies may be unable to close on the equity and/or debt financing necessary to commence the construction of new projects, including the development of Altis at Lake Willis and Altis at Ludlam. To the extent that the Altis at Ludlam joint venture is able to close on development financing, BBXRE currently anticipates that it will invest approximately $8.5 million as a preferred equity investor in such venture.

During the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, BBXRE continued its development of the lots comprising Phase II of the Beacon Lake Community in St. Johns County, Florida, and sold to homebuilders the remaining 51 developed lots 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 an additional 79 lots for single-family homes as part of ~~a future phase~~Phase III of the project. In addition, BBXRE ~~anticipates that sales of Phase II lots~~sold to homebuilders ~~will commence during the first quarter of 2020.~~

~~The Altman Companies~~49 single family lots and ~~Related Investments~~38 townhome lots.

~~In 2018,~~ BBXRE ~~acquired a 50% membership interest~~has entered into purchase agreements with homebuilders to sell developed lots for an additional 373 single-family homes and 158 townhomes and has collected deposits related to these purchase agreements. However, the effects of the COVID-19 pandemic, including the recent decline in the ~~Altman Companies, a joint venture between~~volume of sales traffic and home sales at the ~~Company~~Beacon Lake Community, is expected to impact the timing of the purchase of developed lots by the homebuilders and ~~Joel Altman (“JA”) engaged~~could result in the ~~development, construction, and management~~homebuilders not performing under these contracts. In addition, a decline in home prices as a result of ~~multifamily apartment communities. As of September 30, 2019, BBXRE had investments~~economic impacts associated with the COVID-19 pandemic could result in ~~nine active developments sponsored by the Altman Companies, comprised of three developments that are stabilized or being leased and~~a decrease in contingent revenues expected to be ~~sold over the next two years, four developments that are under construction, and two projects that are currently~~earned by BBXRE in ~~predevelopment stages.~~

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

~~BBXRE also continued to 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 Palm Beach Gardens, Florida and provided seller financing to the buyer for a portion of the sales price. As a result of the sale, BBXRE recognized $2.8 million of equity earnings and received approximately $2.3 million of distributions from the venture.

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

During the nine 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 were~~homes by homebuilders on developed lots sold to ~~the buyer of the commercial buildings sold by the PGA Design Center joint venture, as described above, BBXRE reinvested $2.1 million of the proceeds~~them in ~~the PGA Lender joint venture, a joint venture formed with the PGA Design Center joint venture to invest in the seller financing provided to the buyer by the PGA Design Center joint venture.~~prior periods.

Information regarding the results of operations for BBXRE is set forth below (dollars in thousands):

BBX Capital Real Estate’s income before income taxes for the three months ended ~~September 30, 2019~~March 31, 2020 compared to the same ~~2018~~2019 period increased by ~~$27.2~~$1.6 million primarily due to the following:

BBX Sweet Holdings is engaged in the ownership and management of operating businesses in the confectionery industry, including IT’SUGAR, Hoffman’s Chocolates, and Las Olas Confections and Snacks. IT’SUGAR is a specialty candy retailer which has approximately 100 retail locations, which include a mix of high-traffic resort and entertainment, lifestyle, mall/outlet, and urban locations in over 25 states and Washington D.C., and its products include bulk candy, candy in giant packaging, and licensed and novelty items. Hoffman’s Chocolates is a retailer of gourmet chocolates with retail locations in South Florida, and Las Olas Confections and Snacks is a manufacturer and wholesaler of chocolate and other confectionery products.

Although BBX Sweet Holdings’ results from operations were improved for the first two months of 2020 as compared to 2019, which reflected, among other things, IT’SUGAR’s opening of a three story candy department store at American Dream in New Jersey in December 2019 and the opening of three other stores in 2019, BBX Sweet Holdings has been materially adversely impacted by the effects of the COVID-19 pandemic.

As March 31, 2020, as a result of various factors, including government-mandated closures and advisories, IT’SUGAR had closed all of its retail locations and furloughed all store employees and the majority of its corporate employees. At the current time, IT’SUGAR is not generating any trade sales other than limited sales through its website and wholesale channels and has not made rent payments to the landlords of its retail locations. IT’SUGAR is currently in discussions with its landlords for rent abatements or deferrals and is hopeful that it will be in a position to commence a phased reopening of certain of its retail locations starting in May 2020, subject to the implementation of revised store floor plans and increased sanitation protocols. However, as a result of the prolonged closure of its retail locations that commenced in March 2020, IT’SUGAR does not believe that it will have sufficient liquidity to continue its full operations if it is unable to obtain significant rent abatements or deferrals from its landlords and amended payment terms from its vendors and, if it is not successful with these negotiations, may decide to pursue a formal or informal restructuring. Further, even if IT’SUGAR is in a position to reopen its retail locations and continue its operations, the effects of the COVID-19 pandemic on demand and future sales levels, including a recessionary economic environment

and the potential impact of the pandemic on consumer behavior, remain uncertain and could have a long-term and material adverse impact on IT’SUGAR’s business, results of operations, and financial condition and its ability to continue its operations. As a result, BBX ~~Capital Real Estate’s income~~Sweet Holdings recognized $24.7 million of impairment losses related to IT’SUGAR’s goodwill and long-lived assets during the three months ended March 31, 2020. See Note 8 to the Company’s condensed consolidated financial statements included in Item 1 of this report for additional information with respect to the recognition of these impairment losses.

In addition to the significant impact of the COVID-19 pandemic on IT’SUGAR’s operations, BBX Sweet Holdings’ other operations have also been adversely impacted by the pandemic. In particular, Hoffman’s Chocolates has closed all of its retail locations to customer traffic and limited sales to curbside pickup (where allowable by government mandates) and online customers. In addition, Hoffman’s Chocolates is in discussions with its landlords for rent abatements and deferrals. While Las Olas Confections and Snacks has continued to operate its manufacturing facility and sell products to its wholesale customers, its sales activity has declined as a result of the effects of the pandemic. In response to the effects of the pandemic, both Hoffman’s Chocolates and Las Olas Confections and Snacks have implemented several cost mitigating activities, including a reduction of workforce and indefinite furlough of certain employees.

Information regarding the results of operations for BBX Sweet Holdings is set forth below (dollars in thousands):

BBX Sweet Holdings’ loss before income taxes for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 was $28.9 million compared to $3.3 million during the same ~~2018~~2019 period, ~~increased by $35.0 million primarily due to~~which reflects the following:

~~During~~Renin’s operating results for the three months ended March 31, 2020 were not significantly impacted by the COVID-19 pandemic. In particular, while Renin’s trade sales for the three months ended March 31, 2020 were down compared to the same 2019 period, its sales were consistent with expectations for the 2020 period, and the decrease was primarily attributable to sales programs to two retail customers in the 2019 period that were not expected to be repeated and did not repeat in the 2020 period.

Renin’s operations have not been directly impacted by certain effects of the COVID-19 pandemic, as it has been exempted from various “shelter in place” and “stay at home” orders and advisories, and Renin ~~continued~~is continuing to ~~experience~~operate both of its manufacturing and distribution facilities, source various products and raw materials from China and Vietnam, and sell its products through various channels. However, Renin’s sales volumes have declined subsequent to March 31, 2020, which management believes is largely attributable to other effects of the pandemic, including a ~~shift~~recessionary economic environment and rising unemployment. In addition, such effects could have a significant adverse impact on Renin’s results of operations and financial condition in future periods, particularly to the extent that an economic downturn is prolonged in nature or results in material disruptions in the supply chains for its products and raw materials. As Renin continues to source products and raw materials from China, disruptions in its ~~customer mix towards retail customers, including big box retailers, while its barn door products have continued to increase~~supply chain from China as a ~~percentage~~result of ~~its overall~~various factors, including increased tariffs or closures in the supply chain, could impact Renin’s cost of product ~~mix. In particular, during~~and ability to meet customer demand.

Renin is continuing to monitor the ~~nine months ended September 30, 2019, retail, commercial,~~effects of the pandemic and ~~direct installation trade~~is exploring various opportunities through which it could attempt to mitigate such effects, including increasing online sales ~~as a percentage of total gross trade sales were 64%, 26%,~~ and 10%, respectively, compared to 58%, 32% and 10% during the 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 door products as a percentage of total gross sales increased to 34% during the nine months ended September 30, 2019 from 29% during the same 2018 period.implementing cost reduction initiatives. However, there is no assurance that any such initiatives will be successful.

Information regarding the results of operations for Renin is set forth below (dollars in thousands):

Renin’s income before income taxes for the three months ended ~~September 30, 2019~~March 31, 2020 was ~~$0.5~~$0.7 million compared to ~~$0.7~~$1.1 million during the same ~~2018~~2019 period. The 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 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. In addition, IT’SUGAR expects to open a 21,000 square foot, three story flagship location at American Dream, a 3 million square foot shopping and entertainment complex in New Jersey, during the fourth quarter of 2019. IT’SUGAR is also continuing to evaluate the lease agreements for its current retail locations where sales volumes may give rise to early lease termination rights and the potential opportunity to renegotiate lease terms and occupancy costs.

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

~~Information regarding the results of operations for IT’SUGAR is set forth below (dollars in thousands):~~

~~IT’SUGAR’s income before income taxes for the three months ended September 30, 2019 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

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

~~During the nine months ended September 30, 2019~~foreclosure 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~~insurance agency, as well as its ~~area development and franchise agreements related to the development~~operations as a franchisee 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,~~which the Company ~~closed the remaining two locations and terminated the related lease agreements.~~ exited in September 2019.

~~The loss before income taxes from the Company’s other businesses in the confectionery industry for~~During the three ~~and nine~~ months ended September 30, 2019 was $1.3 million and $3.7 million, respectively, compared to $1.5 million and $8.1 million for the comparable 2018 periods, respectively. The decrease in losses generated by these operations reflects the impact of various strategic initiatives implemented byMarch 31, 2020, the Company ~~during 2018, which included the closure~~recognized $3.6 million of ~~a manufacturing facility and a reduction in corporate personnel and infrastructure.~~

Consistent with the Company’s goal of streamlining its investment verticals so the Company can be more easily analyzed and followed by the marketplace, the Company is evaluating strategic alternativesimpairment losses related to certain of ~~its businesses in~~these investments primarily resulting from the ~~confectionery industry, including, but not limited to,~~effects of the ~~possible sale, spin-off, or exit of these businesses. To~~COVID-19 pandemic on 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 September 30, 2019, the confectionery businesses currently under evaluation had a net bookestimated value of ~~approximately $5.0 million.~~

~~The loss before income taxes from~~ the Company’s MOD Pizza restaurant operations for the three and nine months ended September 30, 2019 was $4.8 million and $9.5 million, respectively, compared to $1.4 million and $3.2 million for the comparable 2018 periods, respectively. The increase in losses was primarily attributable to the recognition of impairment losses of $4.0 million and $6.7 million during the three and nine months ended September 30, 2019, respectively, primarily associated with the Company’s exit from its MOD Pizza restaurant operations during the third quarter of 2019.businesses.

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 ~~September 30,~~March 31, 2020 and 2019 were ~~$12.0~~$8.1 million and ~~$36.6~~$12.1 million, ~~respectively, compared to $13.0 million and $38.7 million, respectively, for the comparable 2018 periods.~~respectively. The decrease in corporate general and administrative expenses for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 compared to the same ~~2018 periods~~2019 period primarily reflects ~~lower share-based~~the allocation of compensation ~~expenses, reduced headcount,~~expense related to BBX Capital’s Chief Executive Officer and ~~lower professional fees~~Chief Financial Officer to Bluegreen as a result of their expanded roles at Bluegreen in the ~~2019 periods.~~ 2020 period, as well as an updated estimate of the allocation of annual executive bonus expenses expected to be paid in cash and stock.

Excluding its note payable to Bluegreen, BBX Capital’s interest expense for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 was ~~$1.3~~$0.8 million and ~~$4.2~~$1.5 million, ~~respectively, compared to $1.7 million and $4.8 million, respectively, for the comparable 2018 periods.~~respectively. The decrease in interest expense during the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 compared to the same ~~2018 periods~~2019 period primarily 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~~the repayment of its mandatorily redeemable trust preferred securities in December 2019, and lower interest expense on Woodbridge’s junior subordinated debentures associated with ~~higher~~lower rates on the variable rates of interest on such debt during the ~~2019 periods.~~2020 period.

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 ~~September 30, 2019~~March 31, 2020 and ~~2018, respectively.~~2019. 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 the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, the Company recognized ~~$0.8~~$0.5 million and ~~$1.9~~$0.4 million, respectively, of interest and investment income from BBX Capital’s interest-bearing cash accounts and other ~~investments compared to $0.6 million and $1.6 million, respectively, for the comparable 2018 periods.~~investments.

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

The Company’s effective income tax rate was approximately ~~38%~~17% and ~~37%~~35% during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 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.

respectively. The Company’s effective income tax rate for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ was ~~higher~~different than the expected federal income tax rate of 21% ~~primarily~~ due to the impact of nondeductible executive

compensation and state income taxes. The effective income tax rate for the 2020 period reflects a current estimated ordinary taxable loss for the year ended December 31, 2020 resulting primarily from the effects of the COVID-19 pandemic.

BBX 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 loss attributable to noncontrolling interests was $2.5 million during the three months ended March 31, 2020 compared to net income attributable to noncontrolling interests ~~was $4.1~~of $3.1 million ~~and $11.3 million during the three and nine months ended September 30, 2019, respectively, compared to $5.8 million and $16.3 million, respectively,~~ for the comparable ~~2018 periods.~~2019 period. The decrease in net income attributable to noncontrolling interests for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 compared to the same ~~2018 periods~~2019 period was primarily due to IT’SUGAR’s recognition of impairment losses related to its goodwill and long lived assets and a decrease in the net income of Bluegreen and Bluegreen/Big Cedar Vacations.

The Company’s cash used in operating ~~cash flows~~activities increased by ~~$16.8~~$23.4 million during the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 compared to the same ~~2018 period. The increase was~~2019 period primarily due to the $4.0 million payment made by Bluegreen to Bass Pro in January 2020 pursuant to the settlement agreement entered into in June 2019, an increase in ~~operating distributions~~the amount and changes in timing of certain incentive bonuses paid to certain associates during the 2020 period compared to the 2019 period, and decreases in escrow deposits from ~~real estate joint ventures and decreased~~Bluegreen’s customers reflecting the closure of VOI sales locations resulting from the COVID-19 pandemic, partially offset by a reduction in spending on the acquisition and development of VOI and real estate inventory ~~partially offset by~~during the ~~$20.0 million payment made to Bass Pro in June 2019 pursuant~~2020 period as compared 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.~~ 2019 period.

The Company’s cash used in investing ~~cash flows increased~~activities decreased by ~~$22.6~~$4.2 million during the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 compared to the same ~~2018 period. The increase reflects the impact of sales activity in BBX Capital Real Estate’s portfolio, which resulted in~~2019 period primarily due to decreased spending by Bluegreen for property and equipment, an increase in loan recoveries in the legacy asset portfolio, and a decrease in investments in unconsolidated real estate joint ventures, partially offset by a decrease in distributions from unconsolidated real estate joint ventures and ~~higher net~~lower proceeds from the sale of real estate held-for-sale, and decreased spending by Bluegreen on property and equipment, partially offset by a decline in loan collections in the legacy asset portfolio and an increase in investments in real estate joint ventures. estate.

The Company’s cash ~~used in~~provided by financing activities increased by ~~$59.1~~$124.0 million during the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 compared to the same ~~2018~~2019 period, which was primarily due to ana $104.2 million increase in ~~payments,~~ net of borrowings on the Company’s ~~debt,~~notes payable and other borrowings, which included additional borrowings by Bluegreen on its credit facilities and various receivable-backed facilities to increase its cash position in an effort to ensure adequate liquidity for a prolonged period as a result of the COVID-19 pandemic. In addition, repayments of notes payable and other borrowings declined by $31.4 million primarily due to BBX Capital’s repayment of the outstanding balance of $30.0 million on its credit facility with IberiaBank in the 2019 period. These increases in cash

provided by financing activities during the 2020 period compared to the 2019 period were partially offset by ~~a net decrease~~Bluegreen’s repurchase of ~~$51.2~~$11.7 million ~~in payments for the purchase and retirement of 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 Vacationsprivate transaction during the ~~2018~~2020 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 its quarterly operating results. Due to consumer travel patterns, Bluegreen typically ~~experiences an increase in~~has seen more tours and experiences higher VOI sales during the second and third ~~quarters~~quarters. However, due to the closures of all marketing operations and VOI sales centers as a result of the ~~calendar year.~~COVID-19 pandemic, Bluegreen anticipates significantly decreased sales of VOIs for the remainder of 2020 as compared to the same periods in prior years.

~~IT'SUGAR and certain of the Company’s other operating~~BBX Sweet Holdings’ businesses are subject to seasonal fluctuations in trade sales, which cause fluctuations in ~~the Company’s~~BBX Sweet Holdings’ 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.~~ December, when families are on vacation. BBX Sweet Holdings’ other operating businesses historically generated their strongest trade sales during the fourth quarter in connection with various holidays in the United States. Due primarily to the closures of IT’SUGAR’s retail locations as a result of COVID-19 pandemic, BBX Sweet Holdings anticipates significantly reduced sales during the coming months as compared to the same months in prior years.

The Company’s material commitments as of ~~September 30, 2019~~March 31, 2020 included the required payments due on ~~its~~ receivable-backed debt, notes payable and other borrowings, junior subordinated debentures, commitments to complete certain projects based on its sales contracts with customers, subsidy advances to certain HOAs, and commitments under non-cancelable operating leases.

The following table summarizes the contractual minimum principal and interest payments required on the Company’s outstanding debt, outstanding payments required under the Bass Pro settlement agreement, and payments required on the Company’s non-cancelable operating leases by period due date as of ~~September 30, 2019~~March 31, 2020 (in thousands):

In lieu of paying maintenance fees for unsold VOI inventory, Bluegreen may enter into subsidy agreements with certain HOAs. ~~During the nine months ended September 30, 2019 and 2018,~~ Bluegreen ~~made~~paid $1.9 million in subsidy payments in connection with these arrangements during each of ~~$10.5 million~~the three months ended March 31, 2020 and ~~$2.2 million, respectively.~~2019, which are included in cost of other fee-based services. As of ~~September 30, 2019,~~March 31, 2020, Bluegreen had $3.3 million accrued ~~$8.0 million~~ for such subsidies, which is ~~reflected~~included in other liabilities in the Company’s condensed consolidated statement of financial ~~condition.~~condition as of such date. As of December 31, ~~2018,~~2019, Bluegreen had no accrued liabilities for such subsidies.

~~The Company~~In December 2019, Bluegreen’s President and Chief Executive Officer resigned. In connection with his resignation, Bluegreen agreed to make payments to him totaling $3.5 million over a period of 18 months, $2.9 million of which

remained payable as of March 31, 2020. Additionally, during 2019, Bluegreen entered into certain agreements with other executives related to their separation from Bluegreen or change in position. Pursuant to the terms of these agreements, Bluegreen agreed to make payments totaling $2.5 million through November 2020. As of March 31, 2020, $1.0 million remained payable under these agreements.

At the current time, BBX Capital intends to use its cash in order to satisfy the payments required under its contractual obligations for the foreseeable future, while its subsidiaries will use, to the extent available, their respective cash on hand, cash flows from operations, and cash received from new borrowings under existing or future debt facilities in order to satisfy their respective obligations. However, as a result of the COVID-19 pandemic, there is no assurance that BBX Capital’s subsidiaries will have sufficient cash from such sources to satisfy their respective contractual obligations and maintain their respective operations.

While BBX Capital has available cash that it may use to contribute to or fund the obligations and commitments of its subsidiaries, BBX Capital intends to evaluate the facts and circumstances of the cash requirements of each of its subsidiaries, including their operating deficits, their liquidity requirements, and the sustainability of their operations as a result of the COVID-19 pandemic, and make a determination of whether and/or how much it will make available to each subsidiary.

Bluegreen intends to use cash on hand and cash flows from operations, including cash received from the sale/pledge of VOI notes receivable, as well as cash received from new borrowings under existing or future debt facilities, in order to satisfy the principal payments required on its contractual obligations. While there is no assurance that it will be successful, Bluegreen believes that it will be successful in renewing certain debt facilities and/or obtaining extensions of such facilities. Based on this and the actions implemented in an effort to mitigate the impact of the COVID-19 pandemic, Bluegreen believes that it will be in a position to meet required debt payments; however, there is no assurance that this will be the case.

Bluegreen also 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~~its ongoing business strategy, ~~and~~ the ongoing availability of ~~credit. The Company~~credit, and the success of the actions Bluegreen has taken in response to the COVID-19 pandemic. Bluegreen 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~~Bluegreen 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~~Bluegreen’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~~Bluegreen is

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

Bluegreen’s receivables purchase facilities, 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 its ability to raise funds, sell receivables, or satisfy or refinance its obligations, or otherwise adversely affect its financial condition and results of operations, as well as its ability to pay dividends. In April 2020, Bluegreen’s board of directors suspended quarterly cash dividends on its common stock due to the impact of the COVID-19 pandemic. In addition, 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 Bluegreen’s control.

Pursuant to the settlement agreement Bluegreen entered into with Bass Pro and its affiliates induring 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,~~Additionally, in lieu of the previous commission ~~payable~~arrangement, Bluegreen agreed to ~~Bass Pro as previously contemplated by its marketing agreement with Bass Pro, Bluegreen will now~~ pay Bass Pro a fixed annual fee of $70,000 for each Bass Pro and Cabela’s retail store that Bluegreen is accessing (excluding sales at retail stores which are designated to provide tours to Bluegreen/Big Cedar Vacations, or “Bluegreen/Big Cedar feeder stores”), plus $32.00 per net vacation package sold (less cancellations or refunds within 45 days of sale). Bluegreen also agreed to contribute to the Wonders of Wildlife Foundation $5.00 per net package sold (less certain cancellations and refunds within 45 days of sale), subject to an annual minimum of $700,000. ~~The fixed annual fee will be prorated for 2019.~~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, provided that~~2021. In January 2020, Bluegreen paid $5.2 million for this fixed fee, of which $4.1 million was prepaid and is included in other assets in the Company’s condensed consolidated statement of financial condition as of March 31, 2020. Bluegreen had marketing operations at 21 Cabela’s stores at March 31, 2020 and is required to begin marketing operations in at least 25 more stores by December 31, 2020. 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 ~~settlement~~ agreement, including as a result of a reduction of traffic in the stores in excess of 25% year-over-year. In March 2020, as a result of the COVID-19 pandemic, Bluegreen temporarily closed its retail marketing operations at Bass Pro Shops and Cabela’s stores. Bluegreen is currently developing a plan to reopen these operations.

BBX Capital guarantees certain obligations of its wholly-owned subsidiaries and unconsolidated real estate joint ventures as described in further detail in Note 1112 to 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~~March 31, 2020 and December 31, ~~2018,~~2019, the Company’s investments in these joint ventures totaled ~~$53.7~~$59.4 million and ~~$64.7~~$57.3 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 117 to the Company’s condensed consolidated financial statements included in Item 1 of this report, and the Company’s maximum exposure to losses from these joint ventures is its equity investment. The Company is typically not obligated to fund additional capital to its joint ventures; however, the Company’s interest in a joint venture may be diluted if the Company elects not to fund a joint venture capital call.

As of ~~September 30, 2019 and December~~March 31, ~~2018,~~2020, the Company, excluding Bluegreen, had cash, cash equivalents, and short-term investments of approximately ~~$185.6~~$156.0 million, ~~and $146.9~~including $137.8 million ~~respectively.~~held directly by BBX Capital. Management believes that ~~BBX Capital~~the Company has sufficient liquidity ~~from the sources described below~~ to fund operations, including ~~its~~ anticipated working capital, capital expenditure, and debt service requirements, and respond to the COVID-19 pandemic challenges for the foreseeable future, subject to mitigation and cost reduction efforts and management’s determination of whether and/or the ~~success~~extent to which it will fund the operations and commitments of its subsidiaries. The Company has taken various mitigating measures to manage through the current challenges resulting from the COVID-19 pandemic, as discussed in this report, including cost and capital expenditure reductions at its subsidiaries. However, management is continuing to evaluate the potential operating deficits and liquidity requirements of its subsidiaries as a result of the ~~Company’s ongoing business strategy~~impact of the COVID-19 pandemic and ~~the ongoing availability of credit.~~may determine not to provide additional funding or capital to subsidiaries whose operations they believe may not be sustainable.

BBX Capital’s principal sources of liquidity ~~are~~have historically been its available cash and short-term investments, 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.

However, as described below, the COVID-19 pandemic has impacted or otherwise resulted in uncertainty regarding many of these sources of liquidity, and BBX Capital believes that its ~~current financial condition~~primary source of liquidity for the foreseeable future will be its available cash, cash equivalents, and ~~credit relationships, together with anticipated cash flows from other sources of funds, including potential~~short-term investments.

Bluegreen has announced that it has suspended its regularly quarterly dividend, and accordingly, BBX Capital does not expect to receive quarterly dividends from Bluegreen ~~(which, as described below, are subject to certain limitations), and, to~~for 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.~~foreseeable future. For the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ BBX Capital received dividends from Bluegreen ~~dividends totaling~~ ~~$34.3~~of $8.7 million and ~~$30.3~~$11.4 million, respectively~~respectively. In addition,~~. The resumption of dividends payments by Bluegreen, ~~has indicated that it intends to pay regular quarterly dividends on its common stock subject to~~as well as the ~~declaration~~amount and timing of such dividends, ~~by its board of directors. The ultimate payment of such dividends~~ will be based upon factors that 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 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.facilities. 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~~resume receiving dividends from Bluegreen consistent with prior periods, in the time frames or amounts anticipated, or at all.

Although BBX Capital ~~may~~has a $50.0 million revolving line of credit with IberiaBank, subject to available collateral, the effects of the COVID-19 pandemic on the Company’s operations and the value of the collateral could impact its ability to remain in compliance with the financial covenants under the facility and limit the extent of availability under the facility in future periods. As of March 31, 2020, BBX Capital had availability of approximately $22.4 million under the facility as a result of a decline in the value of the collateral.

While BBXRE has historically provided liquidity to BBX Capital through various sources, including distributions from unconsolidated real estate joint ventures and proceeds from real estate sales, the effects of the pandemic, including the impact on general economic conditions and real estate and credit markets, have increased the uncertainty regarding the expected timing and pricing of future sales of multifamily apartment developments, single-family homes, and developed lots at BBXRE’s Beacon Lake Community. As a result, BBXRE is not expected to provide significant liquidity to BBX Capital for the foreseeable future.

BBX Capital has also ~~receive~~historically received funds from its subsidiaries, including Bluegreen, in connection with ~~its~~the parties’ tax sharing agreement to the extent that ~~the~~a subsidiary ~~utilizes~~utilized BBX Capital’s tax benefits in BBX Capital’s consolidated tax return. ~~During the nine months ended September 30, 2019 and 2018,~~However, BBX Capital ~~received $13.0 million and $21.0 million, respectively, of~~did not receive tax sharing payments from ~~Bluegreen.~~ its subsidiaries during the three months ended March 31, 2020 and does not expect to receive any significant payments for the remainder of 2020 primarily as a result of the impact of COVID-19 on the Company’s operations.

BBX Capital believes that its current financial condition will allow it to meet its anticipated near-term liquidity needs. BBX Capital may also seek additional liquidity from outside sources, including traditional bank financing, secured or unsecured indebtedness, or the issuance of equity and/or debt securities. However, these alternatives may not be

available to BBX Capital 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 to use~~has historically used 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~~its common stock, or to purchase shares of its common stock. While BBX Capital may continue to evaluate opportunistic investments, BBX Capital currently expects to use its available funds primarily for operations and general corporate purposes and to fund operating deficits resulting from the COVID-19 pandemic. However, as discussed above, BBX Capital’s management intends to evaluate the operating deficits and liquidity requirements of its subsidiaries as a result of the impact of the COVID-19 pandemic on operations and general economic conditions and may make a determination that it will not provide additional funding or capital to certain of its subsidiaries.

In November 2018, BBXRE acquired a 50% membership interest in the Altman Companies, a joint venture between the Company and JAJoel Altman (“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, BBXRE anticipates that it will invest approximately ~~$2.5~~$1.0 million to ~~$3.5~~$2.0 million in the Altman Companies and related joint ventures during the remainder of ~~2019 related~~2020 relating to planned predevelopment expenditures ~~investments in new joint ventures,~~ and ongoing operating costs. ~~In addition,~~Furthermore, although the COVID-19 pandemic has resulted in uncertainty in the ability of the Altman Companies to close on the capital necessary to commence the construction of new projects, BBXRE currently anticipates that it will invest approximately $8.5 million as a preferred equity investor in its Altis at Ludlam joint venture if the venture is able to close on development financing. In addition, if the Altman Companies closes on development financing for additional projects beyond Altis at Ludlam, BBXRE expects that it would be required to contribute an additional ~~$1.0 million to $2.0~~$1.25 million to ABBX Guaranty, LLC, a joint venture between BBXRE and JA that provides guarantees on the indebtedness and construction cost overruns of new real estate 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~~$3.4 million during the next twelve to ~~eighteen~~twenty-four months based on the current plans and estimates associated with the related development projects.

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

BBX Capital ~~has~~ previously indicated its intention to declare regular quarterly dividends on its Class A and Class B Common ~~Stock. In March, June,~~Stock 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~~$0.05 per share on its ~~Class A and Class B Common Stock, which is an increase from~~common stock, or $4.8 million in the ~~$0.01 per share~~aggregate, during the year ended December 31, 2019. However, in April 2020, BBX Capital suspended its regular quarterly dividend ~~paid by~~due to the ~~Company during 2018. However, future declarations~~impacts of the COVID-19 pandemic. Future declaration and ~~payments~~payment 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,~~the Company, its operating and capital needs, its debt covenants, and other factors deemed relevant by the board of directors.

OnIn June ~~13,~~ 2017, BBX Capital’s board of directors approved a share repurchase program which authorizes the 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 purchase shares from time to time subject to market conditions and other factors. ~~During the nine months ended September 30, 2019,~~As of March 31, 2020, BBX Capital had

purchased ~~1,799,539~~4,750,483 shares of its Class A Common Stock for approximately ~~$8.9 million. As of September 30, 2019, BBX Capital had purchased 3,321,132 shares of its Class A Common Stock for approximately $18.9~~$25.4 million pursuant to the June 2017 share 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~~all outstanding amounts are due and payable inat maturity. Effective April ~~2020. This debt currently accrues~~17, 2020, Bluegreen and BBX Capital amended the loan agreement to extend the maturity date of the loan from April 2020 to April 2021 and reduce the interest ~~at a~~rate from 6% to 4% per ~~annum rate of 6% with quarterly interest payments to Bluegreen of $1.2 million, and~~annum. 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 ~~September 30, 2019,~~March 31, 2020, 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.

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 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~~Woodbridge. The amount available for future borrowings under this facility was $22.4 million as of ~~not less than $100.0 million. Borrowings~~March 31, 2020. The 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 debt to EBITDA financial ratios. The Loan and Security Agreement also contains customary affirmative and negative covenants, including those that, among other things, limit the ability of BBX Capital and the other borrowers to incur additional indebtedness and to make certain loans and investments. As of ~~September 30, 2019,~~March 31, 2020, 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. During the first quarter of 2020, Renin received a waiver from TD Bank of its breach of the quarterly debt service coverage ratio under the facility, and the credit facility was amended to replace the existing debt service coverage ratio with an interest coverage ratio. In connection with the amendment to the credit facility, Renin repaid the outstanding balance of the term loan with borrowings from the revolving credit facility. As of ~~September 30, 2019,~~March 31, 2020, the outstanding amounts under the ~~term loan and~~ revolving credit facility ~~were $0.8~~was $10.5 million ~~and $7.5 million, respectively,~~ with an effective interest ~~rates~~rate of ~~5.92% and 5.30%, respectively.~~4.72%.

Banc of America Leasing & Capital Equipment Note and Bank of America Revolving Line of ~~Credit.~~Credit. In August 2018, IT’SUGAR entered into a revolving credit facility with Bank of ~~America. Under the terms~~America, 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 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 are payable monthly. As of September 30, 2019, there were no borrowings outstanding under the credit 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~~LLC. As of March 31, 2020, the ~~terms~~outstanding principal balance of the revolving credit facility 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. Each~~the equipment note ~~constitutes a separate, distinct~~was $4.0 million and ~~independent financing of equipment~~$0.3 million, respectively, and ~~is secured by a security interest in the purchased equipment and is an unconditional contractual obligation of IT’SUGAR. As of September 30, 2019,~~ there was ~~one~~no availability under the revolving credit facility. In April 2020, a wholly-owned subsidiary of BBX Capital Real Estate purchased the revolving credit facility and equipment note from the respective lenders for the outstanding ~~with a~~principal balance of ~~$0.4 million.~~ the loans plus accrued interest.

As of ~~September 30, 2019,~~March 31, 2020, BBX Capital and certain of its subsidiaries (other than Bluegreen) had availability of approximately ~~$57.7~~$25.1 million under the above revolving lines of credit, subject to eligible collateral and the terms of the facilities, as applicable. However, the effects of the COVID-19 pandemic on the Company’s operations could

impact its ability to remain in compliance with the financial covenants under these facilities and limit the extent of availability under the facilities in future periods.

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 requirementsand impacts associated with the COVID-19 pandemic challenges for the foreseeable future, subject to the success of its ongoing ~~business strategy~~ mitigating measures to manage through current challenges caused by the COVID-19 pandemic, as discussed in this report, including cost and capital expenditure reductions 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. Bluegreen considers free cash flow to be a measure of cash generated by operating activities that can be used for future investing and financing activities, however, there is no assurance that Bluegreen will generate free cash flow or that any generated will be used for such purposes.

The COVID-19 pandemic has been and continues to be an unprecedented disruption in the economy and the timeshare industry due to government ordered travel restrictions and restrictions on business operations. While Bluegreen is currently developing plans to reopen its VOI sales centers and marketing operations beginning June 2020, on March 23, 2020, Bluegreen temporarily closed all of its VOI sales centers; its retail marketing operations at Bass Pro Shops, Cabela’s stores and outlet malls; and the Choice Hotels call transfer program. In connection with these actions, Bluegreen canceled existing owner reservations through May 15, 2020 and new prospect guest tours through June 30, 2020. Bluegreen also implemented several mitigating activities in an attempt to better position its operations for the impact of the COVID-19 pandemic. Bluegreen anticipates that as a result of these and other initiatives, its sales of VOIs for 2020 will be materially less than its 2019 sales of VOIs. Bluegreen intends to continue to adjust its business to conditions as they change over the remainder of 2020. The ongoing goals of Bluegreen’s mitigating activities are ~~generally dependent upon providing financing~~designed to ~~buyers.~~ preserve cash and reduce expenses by:

While there can be no assurance that these goals will be achieved, initial actions taken to date include the following:

Bluegreen has $20.8 million of required contractual obligations coming due within one year, as well as certain facilities for which the advance period will expire in 2020. While there is no assurance that Bluegreen will be successful,

Bluegreen intends to seek renewal or extend its debt and believes that the implementation of its mitigating activities will best position Bluegreen to address these matters with its lenders.

The ability to sell and/or borrow against notes receivable from VOI buyers has been a critical ~~factor in~~to Bluegreen’s continued liquidity. A financed VOI buyer is generally only required to ~~provide~~pay 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 Bluegreen’s 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~~Bluegreen’s receivable facilities. ~~In addition, maintaining adequate VOI inventory to sell and pursue growth into new markets~~Bluegreen has historically ~~required~~financed a majority of its sales of VOIs, and accordingly, are subject to the risk of defaults by its customers. While the impact of the COVID-19 pandemic had not yet been reflected in Bluegreen’s default or delinquency rates as of March 31, 2020, Bluegreen believes that the COVID-19 pandemic will have a significant impact on its VOI notes receivable. Accordingly, Bluegreen recorded an additional allowance for loan losses of $12.0 million as of March 31, 2020, which includes an estimate of customer defaults as a result of the COVID-19 pandemic based on Bluegreen’s historical experience, forbearance requests received from Bluegreen’s customers, and other factors, including, but not limited to, ~~incur debt for~~ the ~~acquisition, construction,~~seasoning of the note receivable and ~~development~~FICO scores of ~~new resorts. Development expenditures during~~ the ~~remainder~~customers. The impact of ~~2019 are expected~~the COVID-19 pandemic is rapidly changing and highly uncertain. Accordingly, and due to other risks and uncertainties associated with assumptions and changing market conditions, Bluegreen’s allowance may not prove to be accurate and may be increased in future periods, which would adversely impact Bluegreen’s operating results for those periods.

Further, the COVID-19 pandemic has resulted in instability and volatility in the financial markets. Bluegreen’s ability to borrow against or sell its VOI notes receivable has historically been a ~~range~~critical factor in its liquidity. If Bluegreen is unable to renew credit facilities or obtain new credit facilities, its business, results of $10.0 million to $15.0 million, which primarily relate to development at one of the Bluegreen/Big Cedar Vacations’ resorts, refurbishments at Bluegreen’s Blue Ridge Village Resort in Banner Elk, North Carolina and refurbishments at certain other resorts. operations, liquidity, or financial condition may be materially, adversely impacted.

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.~~VOIs, although there is no assurance that these third party developers will be in a position to deliver that inventory in the future. 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~~2020 are expected to range from ~~$1.0~~$3.0 million to $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 $5.0 million and $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 ~~September 30, 2019,~~March 31, 2020, 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 89 under Item 1 included in this report and Note 13 to the Company’s consolidated financial statements included in the ~~2018~~2019 Annual Report for additional information with respect to Bluegreen’s receivable-backed notes payable facilities.

Fifth Third Syndicated ~~Line-of-Credit~~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 $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”~~Line-of-Credit”). ~~Amounts borrowed~~Borrowings 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.

As of ~~September 30, 2019,~~March 31, 2020, outstanding borrowings under the facility ~~(prior to the October 2019 amendment and repayment)~~ totaled ~~$96.1~~$207.5 million, including ~~$21.1~~$97.5 million under the Fifth Third Syndicated Term Loan with an interest rate of ~~5.08%,~~3.61% and ~~$75.0~~$110.0 million under the Fifth Third Syndicated Line of Credit with an interest rate of ~~4.88%~~3.32%. As of March 31, 2020, Bluegreen had availability of approximately $15.0 million under the Fifth Third Syndicated Line of Credit.

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, commodity price risk and equity price risk. The Company’s exposure to market risk has not materially changed from what was previously disclosed in our ~~2018~~2019 Annual Report.

As of the end of the period covered by this report, our management evaluated, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of ~~September 30, 2019~~March 31, 2020 to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~September 30, 2019~~March 31, 2020 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~~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, 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 September 22, 2017, Stephen Potje, Tamela Potje, Sharon Davis, Beafus Davis, Matthew Baldwin, Tammy Baldwin, Arnor Lee, Angela Lee, Gretchen Brown, Paul Brown, Jeremy Estrada, Emily Estrada, Michael Oliver, Carrie Oliver, Russell Walters, Elaine Walters, and Mike Ericson, individually and on behalf of all other similarly situated, filed a purported class action lawsuit against Bluegreen which asserted claims for alleged violations of the Florida Deceptive and Unfair Trade Practices Act and the Florida False Advertising Law. In the complaint, the plaintiffs alleged the making of false representations in connection with Bluegreen’s sales of VOIs. 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 Bluegreen’s summary judgment and dismissed all claims.

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

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

There have been no material changes in the risks and uncertainties that we face from those disclosed in the “Risk Factors” section of our ~~2018~~2019 Annual ~~Report.~~ Report except for the risk factor described below.

The COVID-19 pandemic has had, and the current and uncertain future outlook of the pandemic may continue to have, a significant adverse effect on our business, financial condition, liquidity and results of operations.

The COVID-19 pandemic has been, and continues to be, an unprecedented disruption in the U.S. and global economies and its rapid spread, as well as the escalating measures governments, private organizations and individuals have implemented in order to stem the spread of this pandemic, have had, and are expected to continue to have, a material adverse impact on our business, operating results and financial condition, including due to government ordered travel restrictions, restrictions on business operations, and stay at home orders and guidelines. Furthermore, while it is not currently possible to accurately assess the expected duration and severity of the pandemic on the Company’s operations, and additional restrictions or other events stemming from the pandemic could further lengthen or exacerbate these adverse effects, the Company expects that demand for many of the Company’s products and services may remain weak for a significant length of time, and the Company cannot predict if and when the industries in which the Company operates will return to pre-pandemic levels.

Steps we have implemented in an attempt to mitigate the effects of ~~Equity Securities~~the pandemic on our business and ~~Use~~to preserve liquidity may themselves have negative consequences with respect to our business and operations, including by reducing sales. In addition, the cost savings we are seeking to achieve from these measures will not be recognized immediately and will not completely offset the decrease in revenues and other adverse impacts of ~~Proceeds~~the pandemic. Further, the increase in Bluegreen’s debt position will, among other things, increase its vulnerability to adverse economic conditions and require Bluegreen to meet significant debt service obligations.

Our operations could also be negatively affected further if our employees are quarantined or sickened as a result of exposure to COVID-19, or if they are subject to governmental COVID-19 curfews or “shelter in place” health orders.

Measures restricting the ~~Company’s purchase~~ability of employees to come to work may cause a further deterioration in our service or operations, all of which could negatively affect our business.

We are unable to predict how long these conditions will persist, what additional measures may be introduced by governments or private parties or what effect any such additional measures may have on our business. Furthermore, not only is the duration of the pandemic and combative measures unknown, the overall situation is extremely fluid, and it is impossible to predict the timing of future changes in the situation and what their impact may be on our business. At this time we are also not able to predict whether the COVID-19 pandemic will result in permanent changes in our customers' behavior, which may include continued or permanent decreases in discretionary spending and reductions in demand for VOIs or travel or vacation ownership stays, retail store and confectionery products, home improvement products or real estate, each of which would have a material adverse impact on our business, operating results and financial condition. BBX Capital’s management is evaluating the potential operating deficits and liquidity requirements of its ~~Class A Common Stock under its June 2017 repurchase program is set forth in~~subsidiaries as a result of the ~~table below:~~impact of the pandemic and may determine not to provide additional funding or capital to subsidiaries whose operations they believe may not be sustainable.


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

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


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




BBX Capital Corporation TABLE OF CONTENTS

Part I.

Item 1.	Financial Statements

	Condensed Consolidated Statements of Financial Condition as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 - Unaudited	1

	Condensed Consolidated Statements of Operations and Comprehensive Income for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ - Unaudited	2

	Condensed Consolidated Statements of Changes in Equity for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ - Unaudited	3

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~ - Unaudited	5
		4
	Notes to Condensed Consolidated Financial Statements - Unaudited	7
		6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	33
		30
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	58
		56
Item 4.	Controls and Procedures	58 56

Part II.	OTHER INFORMATION

Item 1.	Legal Proceedings	58
		56
Item 1A.	Risk Factors	59

~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	59
		56
Item 6.	Exhibits	60
		58
	Signatures	61 59



		September 30,	December 31,	March 31,		December 31,
		2019	2018	2020		2019
Notes receivable:
VOI notes receivable - non-securitized	$	188,435	124,642	$	190,051		203,872
VOI notes receivable - securitized		391,922	447,850		395,108		385,326
Notes receivable secured by homesites (1)		694	898
Gross notes receivable		581,051	573,390		585,159		589,198
Allowance for loan losses - non-securitized		(42,728)	(28,258)		(48,493)		(47,894)
Allowance for loan losses - securitized		(92,548)	(105,875)		(106,673)		(92,736)
Allowance for loan losses - homesites (1)		(69)	(90)
Notes receivable, net	$	445,706	439,167	$	429,993		448,568
Allowance as a % of gross notes receivable		23%	23%		27%		24%



	2020		2019		2018		2017		2016		2015 and Prior		Total

701+	$	29,174	$	107,298	$	70,649	$	46,077	$	34,472	$	47,243	$	334,913
601-700		13,575		53,165		42,097		30,816		28,094		45,316		213,063
<601		1,124		5,300		3,747		2,482		2,934		5,258		20,845
Other (1)		—		1,161		3,603		3,289		2,831		5,454		16,338
Total by FICO score	$	43,873	$	166,924	$	120,096	$	82,664	$	68,331	$	103,271	$	585,159

Defaults	$	—	$	2,703	$	4,174	$	2,773	$	2,269	$	3,898	$	15,817
Allowance for loan loss	$	9,674	$	48,428	$	34,740	$	21,760	$	19,057	$	21,507	$	155,166

Delinquency status:
Current	$	43,810	$	162,227	$	113,764	$	77,586	$	64,054	$	95,334	$	556,775
31-60 days		63		1,196		1,190		1,073		708		1,192		5,422
61-90 days		—		1,333		1,319		852		541		905		4,950
Over 91 days (2)		—		2,168		3,823		3,153		3,028		5,840		18,012
Total	$	43,873	$	166,924	$	120,096	$	82,664	$	68,331	$	103,271	$	585,159


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

		For the Three Months Ended September 30,		For the Nine Months Ended September 30,
		2019	2018	2019	2018
Revenues:
Sales of VOIs	$	66,318	70,698	186,351	195,412
Fee-based sales commissions		60,478	61,641	161,033	167,581
Other fee-based services		33,744	31,057	94,015	89,472
Cost reimbursements		21,111	16,900	58,705	47,157
Trade sales		47,660	43,803	138,705	126,114
Sales of real estate inventory		370	7,478	5,030	17,138
Interest income		21,797	21,157	64,730	63,738
Net gains on sales of real estate assets		399	-	11,395	4,802
Other revenue		3,237	1,669	7,540	4,278
Total revenues		255,114	254,403	727,504	715,692
Costs and Expenses:
Cost of VOIs sold		3,121	11,237	17,541	19,838
Cost of other fee-based services		23,746	19,937	66,538	53,983
Cost reimbursements		21,111	16,900	58,705	47,157
Cost of trade sales		31,860	28,957	94,978	88,045
Cost of real estate inventory sold		-	4,655	2,643	11,283
Interest expense		11,870	11,130	34,679	30,869
Recoveries from loan losses, net		(1,821)	(443)	(4,206)	(7,258)
Impairment losses		4,030	193	6,786	549
Selling, general and administrative expenses		148,549	143,559	448,510	410,359
Total costs and expenses		242,466	236,125	726,174	654,825
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		41,182	18,727	38,582	62,123
Provision for income taxes		(14,682)	(6,742)	(15,068)	(21,997)
Net income		26,500	11,985	23,514	40,126
Less: Net income attributable to noncontrolling interests		4,112	5,806	11,275	16,324
Net income attributable to shareholders	$	22,388	6,179	12,239	23,802

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

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


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



		For the Nine Months Ended		For the Three Months Ended
		September 30,		March 31,
		2019	2018	2020		2019
Balance, beginning of period	$	134,222	123,791	$	140,630		134,133
Provision for loan losses		39,462	35,866		30,353		11,153
Write-offs of uncollectible receivables		(38,339)	(31,358)		(15,817)		(8,460)
Balance, end of period	$	135,345	128,299	$	155,166		136,826



	March 31, 2020				December 31, 2019
			Effective				Effective
	Carrying		Interest		Carrying		Interest
	Amounts		Rates (1)		Amounts		Rates (1)
Woodbridge - Levitt Capital Trusts I - IV	$	66,302		5.57 - 5.81%	$	66,302		5.74 - 5.95%
Bluegreen Statutory Trusts I - VI		110,827		6.22 - 6.62%		110,827		6.74 - 6.86%
Unamortized debt issuance costs		(1,111)				(1,129)
Unamortized purchase discount		(38,542)				(38,746)
Total junior subordinated debentures	$	137,476			$	137,254



BBX Capital	$	~~50,000~~22,383
Bluegreen	~~131,196~~	124,500
Renin	~~3,668~~
~~IT'SUGAR~~	~~4,000~~2,684
Total credit availability	$	~~188,864~~
	149,567



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



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



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


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
		September 30,	September 30,	Assets	Inputs	Inputs	March 31,		March 31,		Assets		Inputs		Inputs
		2019	2019	(Level 1)	(Level 2)	(Level 3)	2020		2020		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Cash and cash equivalents	$	368,818	368,818	368,818	-	-	$	397,518		397,518		397,518		—		—
Restricted cash		48,597	48,597	48,597	-	-		34,719		34,719		34,719		—		—
Notes receivable, net		445,706	587,000	-		587,000		429,993		535,513		—		—		535,513
Financial liabilities:
Receivable-backed notes payable	$	436,760	456,600	-		456,600	$	419,697		409,100		—		—		409,100
Notes payable and other borrowings		161,420	169,366	-		169,366		265,689		235,584		—		—		235,584
Junior subordinated debentures		137,038	149,500	-		149,500		137,476		53,000		—		—		53,000
Redeemable 5% cumulative preferred stock		9,730	9,538	-		9,538



	September 30,		December 31,		March 31,		December 31,
FICO Score	2019		2018		2020		2019
700+	59.00	%	57.00	%	59.00	%	59.00	%
600-699	38.00		39.00
<600	2.00		3.00
601-699						37.00		37.00
<601						3.00		3.00
No score (1)	1.00		1.00		1.00		1.00
Total	100.00	%	100.00	%	100.00	%	100.00	%



	For the Twelve Months Ended September 30,		For the Years Ended March 31,
	2019	2018	2020		2019
Average annual default rates	8.59%	8.41%		9.31%		8.18%

	As of September 30,			As of March 31,
	2019	2018		2020		2019
Delinquency rates	3.31%	2.79%		3.19%		2.89%



		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	$	-	14,503	94,163	333,609	(5,515)	436,760	$	—		34,943		106,430		283,076		(4,752)		419,697
Notes payable and other borrowings		14,273	111,863	7,591	29,202	(1,509)	161,420		21,114		31,157		191,019		24,500		(2,101)		265,689
Jr. subordinated debentures		-	-	-	177,129	(40,091)	137,038		—		—		—		177,129		(39,653)		137,476
Redeemable 5% cumulative preferred stock		5,000	5,000	-	-	(270)	9,730
Noncancelable operating leases		6,735	50,155	41,488	56,736	-	155,114
Non-cancelable operating leases									20,220		50,279		33,954		44,796		—		149,249
Bass Pro settlement agreement		4,000	8,000	8,000	-	-	20,000		4,000		8,000		4,000		—		—		16,000
Total contractual obligations		30,008	189,521	151,242	596,676	(47,385)	920,062		45,334		124,379		335,403		529,501		(46,506)		988,111

Interest Obligations (1)
Receivable-backed notes payable		17,683	35,109	29,603	93,671	-	176,066		15,706		29,977		26,787		76,254		—		148,724
Notes payable and other borrowings		7,736	10,577	3,400	21,643	-	43,356		9,739		17,604		12,997		20,187		—		60,527
Jr. subordinated debentures		11,977	23,954	23,954	136,694	-	196,579		10,915		21,829		21,829		119,108		—		173,681
Total contractual interest		37,396	69,640	56,957	252,008	-	416,001		36,360		69,410		61,613		215,549		—		382,932
Total contractual obligations	$	67,404	259,161	208,199	848,684	(47,385)	1,336,063	$	81,694		193,789		397,016		745,050		(46,506)		1,371,043



		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	Borrowing Limit as of March 31, 2020		Outstanding Balance as of March 31, 2020		Availability as of March 31, 2020		Advance Period Expiration; Borrowing Maturity as of March 31, 2020	Borrowing Rate; Rate as of March 31, 2020
Liberty Bank Facility	$	50,000	$	28,247	$		21,753	March 2020; March 2023	Prime Rate; floor of 4.00%; 5.25%	$	50,000	$	23,184	$	26,816	June 2020; March 2023	Prime Rate; floor of 4.00%; 4.75%
NBA Receivables Facility		70,000		35,809			34,191	September 2020; March 2025	30 day LIBOR + 2.75%; floor of 3.50%; 4.79%		70,000		29,033		40,967	September 2020; March 2025	30 day LIBOR+2.75%;floor of 3.50%;3.74%
Pacific Western Facility		40,000		30,848			9,152	September 2021; September 2024	30 day LIBOR+2.75% to 3.00%; 4.92%		40,000		28,256		11,744	September 2021; September 2024	30 day LIBOR+2.75% to 3.00%; 3.87%
KeyBank/DZ Purchase Facility		80,000		19,035			60,965	December 2019; December 2022	30 day LIBOR+2.75%; 4.84% (1)		80,000		60,899		19,101	December 2022; December 2024	30 day LIBOR or CP +2.25%; 3.29% (1)
Quorum Purchase Facility		50,000		44,865			5,135	June 2020; December 2032	(2)		50,000		39,092		10,908	June 2020; December 2032	(2)
	$	290,000	$	158,804	$		131,196			$	290,000	$	180,464	$	109,536



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)