14. Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is regularly reviewed by the chief operating decision maker in assessing performance and deciding how to allocate resources. Reportable segments consist of one or more operating segments with similar economic characteristics, products and services, production processes, type of customer, distribution system or regulatory environment.

The information provided for segment reporting is based on internal reports utilized by management of the Company and its subsidiaries. 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 impacted.

The Company currently reports its results of operations through two reportable segments: Bluegreen and BBX Capital. Included in “Other” are BFC’s corporate overhead, selling, general and administrative expenses and the expenses of Woodbridge unrelated to Bluegreen, including Woodbridge’s selling, general and administrative expenses and interest expense associated with Woodbridge’s junior subordinated debentures.

The Company evaluates segment performance based on segment net income (loss).

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

Bluegreen

Bluegreen markets, sells and manages real estate-based VOIs in resorts generally located in popular, high-volume, “drive-to” vacation destinations, which were developed or acquired by Bluegreen or are owned by others in which case Bluegreen earns fees for providing these services. Bluegreen also earns fees by providing club and property owners’ association management services, mortgage servicing, VOI title services, reservation services, and construction design and development services. In addition, Bluegreen provides financing to credit-qualified individual purchasers of VOIs, which provides significant interest income.

BBX Capital

BBX Capital is involved in the acquisition, ownership and management of investments in real estate and real estate development projects, as well as investments in operating businesses. The BBX Capital reportable segment consists of the activities associated with managing the commercial loan portfolio, real estate properties and portfolio of charged off loans retained by BBX Capital as part of its sale of BankAtlantic to BB&T, as well as the activities of Renin and BBX Sweet Holdings. BBX Capital also holds a 46% equity interest in Woodbridge, which owns 100% of Bluegreen. BBX Capital’s earnings attributable to its interest in Woodbridge are eliminated in consolidation.

The table below sets forth the Company’s segment information as of and for the three months ended June 30, 2016 (in thousands):



		Reportable Segments
			BBX			Segment
		Bluegreen	Capital	Other (1)	Eliminations	Total
Revenues:
Sales of VOIs	$	68,542	-	-	-	68,542
Fee-based sales commission revenue		54,188	-	-	-	54,188
Other fee-based services revenue		26,056	-	-	-	26,056
Trade sales		-	21,250	-	-	21,250
Interest income		22,237	913	-	(2,000)	21,150
Other revenue		-	1,876	-	(97)	1,779
Total revenues		171,023	24,039	-	(2,097)	192,965

Costs and Expenses:
Cost of sales of VOIs		9,666	-	-	-	9,666
Cost of other fee-based services		16,577	-	-	-	16,577
Cost of trade sales		-	18,959	-	-	18,959
Interest expense		8,378	27	3,333	(2,000)	9,738
Recoveries from loan losses		-	(6,287)	-	-	(6,287)
Asset impairments		-	1,759	-	-	1,759
Selling, general and administrative expenses		115,359	18,479	8,639	(273)	142,204
Total costs and expenses		149,980	32,937	11,972	(2,273)	192,616

Equity in earnings of Woodbridge Holdings, LLC		-	5,059	-	(5,059)	-
Equity in net earnings of unconsolidated real
estate joint ventures		-	1,655	154	(154)	1,655
Foreign exchange gain		-	110	-	-	110
Other (loss) income		(48)	-	398	(161)	189
Income (loss) before income taxes		20,995	(2,074)	(11,420)	(5,198)	2,303
(Provision) benefit for income taxes		(7,030)	-	771	6,627	368
Net income (loss)		13,965	(2,074)	(10,649)	1,429	2,671
Less: Net income attributable to
noncontrolling interests		2,866	112	-	(551)	2,427
Net income (loss) attributable to BFC	$	11,099	(2,186)	(10,649)	1,980	244

Total assets	$	1,121,633	390,465	394,568	(521,824)	1,384,842

(1)

Includes interest expense associated with Woodbridge’s trust preferred securities (“TruPs”), corporate overhead of BFC and Woodbridge, and BFC’s other income.

The table below sets forth the Company’s segment information as of and for the three months ended June 30, 2015 (in thousands):



		Reportable Segments
			BBX				Segment
		Bluegreen	Capital		Other (1)	Eliminations	Total
Revenues:
Sales of VOIs	$	59,732	-		-	-	59,732
Fee-based sales commission		47,974	-		-	-	47,974
Other fee-based services revenue		24,948	-		-	-	24,948
Trade sales		-	19,583		-	-	19,583
Interest income		21,420	2,090		-	(1,622)	21,888
Other revenue		-	16,942		-	(96)	16,846
Total revenues		154,074	38,615		-	(1,718)	190,971

Costs and Expenses:
Cost of sales of VOIs		7,381	-		-	-	7,381
Cost of other fee-based services		16,748	-		-	-	16,748
Cost of trade sales		-	14,195		-	-	14,195
Interest expense		8,829	31		2,812	(1,769)	9,903
Recoveries from loan losses		-	(6,608)		-	-	(6,608)
Recoveries on assets		-	(810)		-	-	(810)
Litigation settlement		-	-		36,500	-	36,500
Selling, general and administrative		94,270	15,320		4,957	(251)	114,296
Total costs and expenses		127,228	22,128		44,269	(2,020)	191,605

Equity in losses of Woodbridge Holdings, LLC		-	(10,168)		-	10,168	-
Equity in net losses of unconsolidated
real estate joint ventures		-	(291)		(125)	125	(291)
Foreign exchange gain		-	70		-	-	70
Other income		948	-		626	(460)	1,114

Income (loss) before income taxes		27,794	6,098		(43,768)	10,135	259
(Provision) benefit for income taxes		(9,921)	222		75,471	24,581	90,353
Net income		17,873	6,320		31,703	34,716	90,612
Less: Net income attributable to
noncontrolling interests		2,825	2,182		-	1,310	6,317
Net income attributable to BFC	$	15,048	4,138	$	31,703	33,406	84,295

Total assets	$	1,079,828	388,625		372,544	(486,494)	1,354,503

(1)

Includes interest expense associated with Woodbridge’s TruPs, corporate overhead of BFC and Woodbridge, and BFC’s other income.

The table below sets forth the Company’s segment information for the six months ended June 30, 2016 (in thousands):



		Reportable Segments
			BBX			Segment
		Bluegreen	Capital	Other (1)	Eliminations	Total
Revenues:
Sales of VOIs	$	124,912	-	-	-	124,912
Fee-based sales commission revenue		94,335	-	-	-	94,335
Other fee-based services revenue		51,611	-	-	-	51,611
Trade sales		-	42,212	-	-	42,212
Interest income		44,233	1,980	-	(4,000)	42,213
Other revenue		-	3,519	-	(198)	3,321
Total revenues		315,091	47,711	-	(4,198)	358,604

Costs and Expenses:
Cost of sales of VOIs		13,582	-	-	-	13,582
Cost of other fee-based services		31,587	-	-	-	31,587
Cost of trade sales		-	34,006	-	-	34,006
Interest expense		16,052	128	6,625	(4,000)	18,805
Recoveries from loan losses		-	(8,035)	-	-	(8,035)
Asset impairments		-	1,722	-	-	1,722
Selling, general and administrative expenses		205,534	35,701	13,521	(497)	254,259
Total costs and expenses		266,755	63,522	20,146	(4,497)	345,926

Equity in earnings of Woodbridge Holdings, LLC		-	11,794	-	(11,794)	-
Equity in net earnings of unconsolidated real
estate joint ventures		-	1,313	154	(154)	1,313
Foreign exchange gain		-	320	-	-	320
Other income		86	-	665	(299)	452
Income (loss) before income taxes		48,422	(2,384)	(19,327)	(11,948)	14,763
(Provision) benefit for income taxes		(16,875)	-	771	11,365	(4,739)
Net income (loss)		31,547	(2,384)	(18,556)	(583)	10,024
Less: Net income attributable to
noncontrolling interests		4,803	115	-	(620)	4,298
Net income (loss) attributable to BFC	$	26,744	(2,499)	(18,556)	37	5,726

(1)

Includes interest expense associated with Woodbridge’s trust preferred securities (“TruPs”), corporate overhead of BFC and Woodbridge, and BFC’s other income.

The table below sets forth the Company’s segment information for the six months ended June 30, 2015 (in thousands):



		Reportable Segments
			BBX				Segment
		Bluegreen	Capital		Other (1)	Eliminations	Total
Revenues:
Sales of VOIs	$	112,914	-		-	-	112,914
Fee-based sales commission		80,574	-		-	-	80,574
Other fee-based services revenue		48,701	-		-	-	48,701
Trade sales		-	39,118		-	-	39,118
Interest income		40,315	2,908		-	(1,622)	41,601
Other revenue		-	18,298		-	(195)	18,103
Total revenues		282,504	60,324		-	(1,817)	341,011

Costs and Expenses:
Cost of sales of VOIs		12,247	-		-	-	12,247
Cost of other fee-based services		31,549	-		-	-	31,549
Cost of trade sales		-	28,030		-	-	28,030
Interest expense		18,269	188		3,982	(1,916)	20,523
Recoveries from loan losses		-	(10,429)		-	-	(10,429)
Recoveries on assets		-	(1,873)		-	-	(1,873)
Litigation settlement		-	-		36,500	-	36,500
Selling, general and administrative		169,828	32,071		10,256	(510)	211,645
Total costs and expenses		231,893	47,987		50,738	(2,426)	328,192

Equity in losses of Woodbridge Holdings, LLC		-	(4,365)		-	4,365	-
Equity in net losses of unconsolidated
real estate joint ventures		-	(595)		(125)	125	(595)
Foreign exchange loss		-	(399)		-	-	(399)
Other income		1,839	-		986	(610)	2,215

Income (loss) before income taxes		52,450	6,978		(49,877)	4,489	14,040
(Provision) benefit for income taxes		(18,527)	219		75,471	24,581	81,744
Net income		33,923	7,197		25,594	29,070	95,784
Less: Net income attributable to
noncontrolling interests		5,611	2,025		-	1,967	9,603
Net income attributable to BFC	$	28,312	5,172	$	25,594	27,103	86,181

(1)

Includes interest expense associated with Woodbridge’s trust preferred securities (“TruPs”), corporate overhead of BFC and Woodbridge, and BFC’s other income.