BBXIB 10-K & 10-Q changes, risk factors and insider trading

Current inflationaryeconomic and economicmarket trends,conditions, includingincluding, increasesbut innot limited to, elevated interest rates, new and expanded tariffs, a decline in consumer confidence and spending, inflationary conditions that have significantly increased the costs of operating our businesses (including raw materials, products, labor, freight, shipping and materials andfreight), widespread supply chain disruptions, and the potential for increased unemployment as a result of the restructuring of the federal government, has and could continue to adversely impact gross marginsmargins, operating margins, and the results of the Company’s operating businesses.

TheCurrent Federaleconomic Reserveand hasmarket soughtconditions toare addresshighly inflationuncertain throughand monetaryvolatile policy,as a result of various factors, including elevated interest rates, new and expanded tariffs, a decline in consumer confidence and spending, inflationary conditions that have significantly increased the wind-downcosts of quantitativeoperating easingour businesses, the threat of government shut downs, the termination of government workers in connection with the restructuring of the federal government, and supply chain disruptions, which have been exacerbated by increasing the Federal Funds rate. The Russian invasion of Ukraine andUkraine, the related embargoes against Russia have worsened supply chain issues with the potential for the conflictfighting in the Middle EastEast, furtheras exacerbatingwell inflationaryas trendspiracy andin increasingshipping lanes. We believe these factors have created economic uncertainty regardingwhich supply chain disruptions. The 525 basis point increase in the federal funds rate since March 2022 and the wind-down of quantitative easing during 2023 may result in the United States experiencing a recession of an uncertain magnitude and duration. These conditions canhave negatively affectaffected our operating results by resulting in,by, among other things: (i) higherincreasing interest expense on variable rate debt and any new debt, (ii) lowerdecreasing gross margins due to increased costs of manufactured or purchased inventory and shipping, (iii) a decline inreducing the availability of debt and equity capital for new real estate investments and the number of real estate development projects meeting the Company’s investment criteria, (iv) higherincreasing overall operating expenses due to increases in labor and service costs, (v) a reduction indecreasing customer discretionary spending and demand for our products, (vi) a shift inshifting customer behavior as higherconsumers prices affect customer retention andexperience higher consumer borrowing costs, including mortgage borrowings, affect customer demand, and (vii) increasedincreasing the risk of impairments as a result of declining valuations. Recent changes in interest rates have not to date resulted in material reductions in borrowing costs and market volatility, and the announcement of new and higher tariffs and government layoffs has increased market uncertainty.

BBXREThe Company and Altman in particular has experienced a significant increaseincreases in commodity prices,and labor prices and insurance costs, which has resulted in higher development and constructionsuch costs,increases andmay disruptionsbe infurther impacted by the supplypotential chain for certain commodities and equipment have resulted in ongoing supply shortagesimplementation of additional tariffs on building materials,materials equipment,sourced andfrom appliances.international These factors have impacted the timing of certain projects currently under construction and the commencement of construction of new projects.markets. Furthermore, homebuilders have seen a general softening of demand, and the increase in mortgage rates has had an adverse impact on residential home sales. In addition, risinghigher interest rates have increased the cost of the Company’s outstanding indebtedness and the costs of financing for new development projects. IncreasedHigher rates hashave also had an adverse impact on financingthe availability of financing, and the anticipated profitability of development projects, as (i) a majority of development costs are financed with third party debt and (ii) capitalization rates related to multifamily apartment communities and warehouse facilities are generally impacted by interest rates. BBXREAltman has also recently observed a decline in the number of potential investors interested in providing equity or debt financing for the development of new multifamily apartment developments andor the acquisition of stabilizedacquiring multifamily apartment communities. SuchThe recent decreases in short-term interest rates have not to date resulted in a material reduction in borrowing costs or market volatility. These factors have begunadversely toimpacted impact BBXRE’sAltman’s results of operations, cash flow, and wefinancial expectcondition thatand they could continue tomay have ana continued adverse impact on its operating resultsAltman in future periods.periods, particularly if higher development and construction costs continue and debt and equity financing is not available for new projects or is only available on less attractive terms.

Similarly, as a result of inflationary pressures and ongoing disruptions in global supply chains,chains IT’SUGARhave had and are expected to continue to have an adverse impact on IT’SUGAR, which has experienced decreased consumer demand, lower traffic in its retail locations, and significant increases in the cost of inventory and freight, as well as delays in its supply chainfreight that weremay impactingbe itsfurther abilityexacerbated toby maintainthe historicalpotential implementation of additional tariffs on products sourced from international markets. While IT’SUGAR previously increased the inventory levels at its retail locations.locations in an effort to ensure that it could meet consumer demand, IT’SUGAR has begun to adjust the pace at which it is replenishing inventory in light of the slowdown in store sales and general economic uncertainty. While IT’SUGAR washas previously ableattempted to partially mitigate the impact of increased costs through increases in the prices of its products, IT’SUGAR has been requiredhad to slow the pace of increases in the prices of its products due to the recent decline in consumer demand,demand whichand hassignificant resulteddecline in declinesIT’SUGAR’s insales its selling margins.volumes. Further, as a result of issues relating to maintaining appropriate inventory levels, IT’SUGAR increased the inventory levels at its retail locations in an effort to ensure that it can meet consumer demand. However, in light of current economic conditions, including a slowdown in consumer demand, increased inventory levels have increased the risk that IT’SUGAR may be unable to sell the products timely and the risk of inventory writedowns. IT’SUGAR has alsoexperienced experiencedand expects to continue to have an increase in payroll costs as a result of shortages in available labor at certain of its retail locations.

Global supply chain disruptions and increases in commodity prices have also contributed and are expected to continue to contribute to a significant increase in Renin’s costs related to shipping and raw materials,materials as well as delays in its supply chains,chains. whichThese havewill: (i) negatively impactedimpact Renin’s product costs and gross margin, (ii) increasedincrease the risk that Renin will be unable to fulfill customer orders, and (iii) negatively impactedimpact Renin’s working capital and cash flow due to increased inventory in transit, a prolonged period between when it is required to pay its suppliers and when it is paid by its customers, and an overall decline in its gross margin. While Renin has increased the price of many of its products, Renin’s gross margin has nonetheless been negatively impacted by these cost pressures.pressures, Additionally,and such pressures may be further exacerbated by the negotiationpotential implementation of increasedadditional pricestariffs withon customersproducts increasesand thecommodities risksourced thatfrom customersinternational will pursue alternative sources for Renin’s products, which may result in Renin losing customers or require it to lower prices in an effort to retain customers.markets. Increases in interest rates arehave alsohad and will continue to adversely impactingimpact Renin’s results. InFurther, addition,Renin ashas observed a resultdecline ofin issuescustomer relatingdemand, to maintaining appropriate inventory levels,which Renin increased its inventory levels in an effort to ensure that it can meet customer demand. However, current economic conditions, including a slowdown in consumer demand, have increased the risk that Reninbelieves may be unableattributable to timely sell such products and the risk of inventory writedowns. In addition,(i) the impact of theseprice factorsincreases haveand negativelyoverall impactedinflationary Renin’spressures abilityon consumer behavior. (ii) a post pandemic shift in consumer spending away from home improvements. Although BBX Capital made a $0.5 million capital contribution to complyRenin in September 2024 in order for Renin to remain in compliance with the financial covenants under its credit facility with TD Bank, andBBX basedCapital onhas itsno operatingobligation results,to make additional contributions. If Renin wasis not inable to maintain compliance with certain of theits financial covenants under theits credit facility until an amendment of the facility (included an asset backed revolving line of credit and term loan) was entered into on March 13, 2024. BBX Capital contributed $1.25 million to Renin in 2023 and an additional $3.3 million in 2024. If Renin is unable to stay in compliance with theTD terms of the amended facility,Bank, Renin could lose availability under its revolving line of credit, be required to provide additional collateral, or be required to repay all or a portion of its borrowings with TD Bank, any of which would have a material adverse effect on the Company’s liquidity, financial position, and results of operations.

Renin is currently in discussions with TD Bank to update or waive certain of the loan covenants under the credit facility. As a result of its noncompliance, Labor is one of the primary components of our expenses. A number of factors may adversely affect the labor force available to us or increase our labor costs, including labor shortages, and increased competition for qualified employees.employees, and laws and regulations related to minimum wages, including the potential implementation of increases in the statutory minimum salary requirements for employees who are not required to be paid overtime compensation. A sustained labor shortage or increased turnover rates, whether caused by wage inflation or as a result of general economic conditions, natural disasters or other factors, could lead to increased costs, increased overtime pay to meet demand and increased costs to attract and retain employees, which could in turn negatively affect our operations or adversely impact our business and results. Further, any mitigation measures we take in response to a decrease in labor availability or an increase in labor costs may be unsuccessful and could have negative effects.

While we have taken steps, where possible, to increase prices to our customers; such increases may not be accepted by our customers, may not adequately offset the increases in our costs, and/or could negatively impact customer retention and our gross margin. Any downturn in the economic environment may also have a significant adverse impact on the gross margins of the Company’s operating businesses, particularly if an economic downturn is prolonged in nature and impacts consumer demand, materially disrupts the supply chain for the Company’s operating businesses’ products and raw materials, delays the production and shipment of products and raw materials from foreign suppliers or increases shipping costs.

The reduced availability of financing or the increase in the cost of financingborrowing could have an adverse impact on ourAltman's business.

RisingHigher interest rates have an adverse impact on (i) homebuyers and home sales, (ii) the availability of financing,financing (iii)for residential multifamily developments and logistic facilities, the affordability of residential mortgages, (iv) the profitability of development projects as a majority of development costs are financed with third party debt, and (v) the value of multifamily apartment communities and logistics facilities, as rising medium and long-term interest rates often correlate to an increase in capitalization rates applied to sales transactions. Further, these factors could result in impairments of our existing investments in real estate projects, and the number of economically viable projects available, which would adversely affect our future results of operations.

BBX Capital relies on its cash and cash equivalents, and dividends from its subsidiaries in order to fund its operations and investments. During the year ended December 31, 20232024 and December 31, 20222023 cash (used in)/generated from operations was ($11.2)$34.0 million and $36.3$11.2 million, respectively. Further, selling,Selling, general and administrative expenses increasedwere from $116.2$135.4 million for the year ended December 31, 20222024. to $136.1 million for the same period in 2023, andFurther as a result of the sale of BVH to HGV, certain of the Company's costs and expenses previously shared by BVH willduring be2023 are now borne by BBX Capital. During the year ended December 31, 2024, BBX Capital received $6.0 million of dividends from Altman; however, there is no assurance that BBX Capital will receive dividends from any of its subsidiaries in subsequentfuture periods.

BBX Capital’s subsidiaries are currently operating at a loss and may not generate sufficient cash flow or maintain liquidity to fund their respective operations and investments or to maintain compliance with the terms of their outstanding debt in which case the subsidiaries may seek funds from BBX Capital.debt. If BBX Capital determines not to provide such funding, then such subsidiaries might be required to liquidate all or some of their respective investments or fund their respective operations with the proceeds of additional equity or debt financing. Such financing may not be available on commercially reasonable terms, if at all,all. andFurther, if any sucha subsidiary choosesis required to liquidate all or some of its investments, itsuch sales may be forced to do so at depressedprices prices.that are less than the carrying value of the assets.

BBX Capital has made investments in and acquisitions of operating companies, including its more recent acquisition of theAltman Living and its funding of Altman Companies, and the acquisition of Colonial Elegance by Renin. BBX Capital may also seek to make opportunistic investments outside of its existing portfolio. Some of these investments and acquisitions may be material.Logistics. While BBX Capital seeks to make investments and acquisitions in companies that provide opportunities for growth, its investments or acquisitionsthey may not prove to be successful or, even if successful, may not initially generate income, or may generate income on an irregular basis or over a long time period. Accordingly, our results of operations may vary significantly on a quarterly basis and from year to year as a result of acquisitions and investments. Acquisitions orand investments expose BBX Capital to the risks of the businesses acquired or invested in. Acquisitions and investments entail numerous risks, including: risks associated with achieving profitability, difficulties in integrating and assimilating acquired management and operations, losses and unforeseen expenses or liabilities, risks associated with entering new markets in which we have no or limit prior experience, risks associated with increased indebtedness incurred to finance acquisitions or fund operations.

BBX Capital may not be able to integrate or profitably manage the businesses it acquired businesses,or funded, including theAltman Living and Altman CompaniesLogistics, or any future growth without substantial costs, delays, or other operational or financial difficulties, including difficulties in integrating information systems and personnel and establishing control environment processes across acquired businesses. Further, BBX Capital may not be able to adequately monitor the day to day activities of its investments in joint ventures, and failure to do so could have a material adverse effect on its business, financial condition and results of operations. In addition, to the extent that operating businesses are acquired outside the United States there will beare additional risks related to compliance with foreign regulations and laws including tax laws, labor laws, currency fluctuations and geographic economic conditions.

BBX Capital’sCapital and its subsidiaries may not have appropriate short and long term hiring, retention, employee development and succession planning strategies.challenges.

Due to current market conditions and other variables such as increased employee turnover,turnover and cost cutting measures, there may be inadequate personnel (both in general numbers and in specific roles) to support operations, business goals and strategies at BBX Capital’sCapital and its subsidiaries. Failure to overcomemaintain theseappropriate variablesstaffing couldwould adversely impact BBX Capital’s subsidiaries'the ability of BBX Capital and its subsidiaries to successfullyprofitably executeachieve on their respectiveits business plansgoals and strategies.

BBX Capital from time to time may pursue transactions involving the sale of its subsidiaries or investments, the issuance and sale of equity interests in its subsidiariessubsidiaries, or other transactions which would result in a decrease in BBX Capital’s ownership interest in its subsidiaries. There is no assurance that any such transactions, if pursued and consummated, will generate a profit.

BBX Capital may in the future also seek to raise funds through the issuance of debt or equity securities.securities to third parties or affiliates. There is generally no restriction on BBX Capital’s ability to issue debt or equity securities which are pari passu or have a preference over its Class A Common Stock and Class B Common Stock. Authorized but unissued shares of BBX Capital’s capital stock are available for issuance from time to time at the discretion of BBX Capital’s board of directors, and any such issuances may be dilutive to BBX Capital’s shareholders and could cause the market price of BBX Capital’s common stock to decline.

BBX Capital's Class A Common Stock and Class B Common Stock trade in the over-the-counter ('OTC"OTC") marketsmarkets, which have less liquidity than exchange-listed stocks.stocks, and BBX Capital is considering deregistering its securities and suspending its reporting obligations under the Exchange Act.

OTC markets are those which participants trade directly between two parties without the use of a central exchange or other third parties. OTC markets do not have physical locations or market makers and sometimes securities being traded on OTC markets lack buyers and sellers. As a result of BBX Capital's Class A Common Stock and Class B Common Stock trading on the OTCOTC, sellers could experience a lack of liquidity when seeking to sell shares, which could result in the value of its Class A and Class B Commons Stock varying widely, and buyers that acquire a significant position in the Company's stock may find it difficult to sell their shares in the future. Further, the repurchase of shares by BBX Capital through its share repurchase program and any future tender offers may exacerbate the lack of liquidity for the Class A Common Stock and Class B Common Stock. BBX Capital currently has 182 shareholders of record of its Class A Common Stock and 77 shareholders of record of its Class B Common Stock. As such, the Company is considering deregistering its securities and suspending its continuing reporting obligations under the Exchange Act as part of its efforts to reduce its expenses. If the Company deregisters its securities and suspends its reporting obligations under the Exchange Act, the Company expects that it would file an application for its Class A Common Stock to be quoted on the OTC Pink Market instead of the OTCQX, which would likely result in holders of BBX Capital’s Class A Common Stock experiencing reduced liquidity when seeking to sell their shares.

Alan B. Levan, the Chairman of BBX Capital, John E. Abdo, the Vice Chairman of BBX Capital, Jarett S. Levan, the son of Mr. Alan Levan and the Chief Executive Officer and President and a director of BBX Capital, and Seth M. Wise, Executive Vice President and a director of BBX Capital, currently collectively beneficially own shares of BBX Capital’s Class A Common Stock and Class B Common Stock representing approximately 84% of the total voting power of BBX Capital’s Class A Common Stock and Class B Common Stock. Accordingly, and because holders of BBX Capital’s Class A Common Stock and Class B Common Stock vote as a single class on most matters, including the election of directors, as described below, Mr. Alan Levan, Mr. Abdo, Mr. Jarett Levan and Mr. Wise, without the vote or consent of any other shareholder of BBX Capital, have the voting power to elect BBX Capital’s directors and to control the outcome of any other vote of BBX Capital’s shareholders, except in limited circumstances where Florida law mandates that the holders of BBX Capital’s Class A Common Stock vote as a separate class. ThisFurther, they may seek to acquire additional shares. Their control position may have an adverse effect on the market price of BBX Capital’s Class A Common Stock and Class B Common Stock. In addition, their interests may conflict with the interests of BBX Capital’s other shareholders.

Risks Related to The Altman Companies (formerly BBX Capital Real Estate) ("Altman")

Investments by BBX Capital Real EstateAltman in real estate developments directly or through joint ventures expose it to market and economic risks inherent in the real estate construction and development industry.

The real estate construction and development industry is highly competitive and subject to numerous risks which inmay many cases arebe beyond management’s control. The success of BBX Capital Real Estate’sAltman’s investments in real estate developments is dependent on many factors, including:

A significant portion of BBX Capital Real Estate’s loans andAltman’s real estate assets are located in Florida, and conditions in the Florida real estate market could adversely affect our earnings and financial condition.

Real estate held for sale, real estate held for investment, real estate developments owned or managed by BBX Capital Real Estate,Altman, and the real estate being developed by BBX Capital Real EstateAltman or joint ventures in which BBX Capital Real EstateAltman has invested are primarily concentrated in Florida, and adverse changes to the Florida economy or the real estate market may negatively impact our earnings and financial condition. As a result, BBX Capital Real EstateAltman is exposed to geographic risks of high unemployment rates, declines in the housing industry and declines in the real estate market in Florida. Adverse changes in laws and regulations in Florida, including moratoriums on evictions would have a negative impact on our revenues, financial condition and business. Further, theAltman's Stateassets of Florida isare subject to the risks of natural disasters, such as tropical storms and hurricanes,hurricanes particularly in Florida, which may disrupt operations, and adversely impact the value of BBX Capital Real Estate’sAltman’s portfolio of real estate, or otherwise have an adverse effect on ourits results of operations. The severity and impact of tropical storms, hurricanes and other weather related events are unpredictable.

BBX Capital Real Estate’sAltman’s inability to finance its real estate developments through Community Development District Bonds or obtain performance bonds or letters of credit could adversely affect its results of operations and liquidity.

BBX Capital Real EstateAltman is often required to provide performance bonds and letters of credit under construction contracts or development agreements. BBX Capital Real EstateAltman also obtained financing for the construction of infrastructure improvements for its Beacon Lake development in St. Johns County, Florida from the issuance of Community Development Bonds and theAltman Living and Altman CompaniesLogistics secures land and construction loans for its sponsored joint ventures. BBX Capital Real Estate’sAltman’s ability to obtain performance bonds, letters of credit, additional issuances of Community Development Bonds or to secure land and construction loans is dependent on BBX Capital Real Estate’sAltman’s credit rating, financial condition, appraised value of the joint venture projects and historical performance. If BBX Capital Real EstateAltman is unable to obtain these bonds or letters of credit or cause the issuance of Community Development Bonds or secure construction and loan financing when required or desirable, our results of operations and liquidity could be adversely affected.

Some of BBX Capital Real Estate’sAltman’s investments are through unconsolidated joint ventures with others, and some are guaranteed by us or entities that we control and we may be adversely impacted by a joint venture partner’s failure to fulfill its obligations.

From time to time BBX Capital Real EstateAltman has entered into joint ventures which reduces the amount BBX Capital Real EstateAltman is required to invest in the development of the real estate properties. However, joint venture partners may become financially unable or unwilling to fulfill their obligations under the joint venture agreements. Most joint ventures borrow money to help finance their activities, and although recourse on the loans is generally limited to the managing members, joint ventures and their properties, BBX Capital Real EstateAltman has in some cases and may in the future provide ongoing financial support or guarantees. If joint venture partners do not meet their obligations to the joint venture, BBX Capital Real EstateAltman may be required to make significant expenditures, which may have an adverse effect on our operating results or financial condition. BBX Capital Real EstateAltman has in the past and may in the future hold investments in a number of different joint ventures with the same or related developers, which could increase the adverse effects of any failures by such developer to fulfill its obligations. BBX Capital Real EstateAltman has numerous investments in Altis multifamily apartment joint ventures developed and managed by the Altman CompaniesLiving and Joel Altman. Further, while BBX Capital increased its ownership in the Altman Companies from 50% to 100% in January 2023, Joel Altman retained his membership interests and decision making rights in the managing member of all development joint ventures originated by the Altman CompaniesLiving prior to BBX Capital's acquisition of the remaining equity interest in the Altman Companies.Living. Additionally, BBX Capital Real EstateAltman has contributed $5.0 million to a joint venture with Joel Altman that guarantees the indebtedness and construction cost overruns of real estate joint ventures established by the Altman Companies,Living, which increases BBX Capital Real Estate’sAltman’s risk of loss in connection with its real estate joint venture investments managed by theAltman Living. Altman Companies.Logistics, BBX Capital Real Estate through its subsidiary, BBX Logistics Properties,which invests in the development of warehouse and logistics facilities, BBX Logistics Properties formed onefive joint venture to develop logistic facilities during the year ended December 31, 20232024 and 2023, and anticipates making additional investments in logistic facilities through the formation of joint ventures in future projects. BBX Capital Real EstateAltman formed a wholly-owned subsidiary to guarantee the indebtedness and construction cost overruns of logistics joint ventures which increases the risk and amount of loss associated with these joint venture investments.

The effects of the COVID-19 pandemic on demand, sales levels, and consumer behavior, as well as the current inflationary economic environmentenvironment, decline in consumer demand and challengingdiscretionary employmentspending environment,and ongoing disruptions in global supply chains have had and could continue to have a material adverse effect on BBX Sweet HoldingsBBXSH’s business, results of operations, and financial condition.

BBX Capital, Inc. (referred to together with its subsidiaries as the “Company,” “we,” “us,” or “our,” and without its subsidiaries as “BBX Capital”) is a Florida-based diversified holding company whose principal holdings are BBXThe CapitalAltman Real EstateCompanies, LLC (“BBX Capital Real Estate” or “BBXREAltman”), BBX Sweet Holdings, LLC (“BBX Sweet Holdings” or “BBXSH”), and Renin Holdings, LLC (“Renin”).

As of December 31, 2023,2024, the Company had total consolidated assets of approximately $674.2$603.0 million and shareholders’ equity of approximately $311.5$245.6 million. Net (loss) income attributable to shareholders for the years ended December 31, 20232024 and 20222023 was approximately $(20.863.9) million and $28.0$(20.8) million, respectively.

CurrentThese inflationaryeconomic conditions have had a material adverse impact on the Company's financial condition and economicresults trendsof haveoperations and may continue to adverselydo so for the foreseeable future. In particular, as a result of inflationary pressures, consumers have appeared to continue to shift purchases away from discretionary spending and focused their spending on essential products and services, which we believe has had a material adverse impact on the Company's resultsrevenues of operations.IT’SUGAR Theand Renin. Further, while the rate of inflation has slowed, costs remain at historically high levels, limiting our ability to lower prices to stimulate consumer demand without negatively impacting our gross margin and profitability. In addition, while the Federal Reserve has soughtbegan to addresslower inflationthe throughbenchmark monetaryinterest policy,rate in September 2024 after raising it 525 basis points since March 2022, interest rates, including the wind-down10-year treasury rate and home mortgage rates, continue to remain elevated. Further, after several years of quantitativesignificant easingrental andgrowth by increasingin the Federalmarkets Fundsin rate,which andAltman operates, which previously offset the impact of theother 525negative basisfactors pointimpacting increaseAltman’s operations, Altman has observed slowing rental growth and even declines in thecertain Federalmarkets. FundsThe ratecombination sinceof Marchelevated 2022interest rates and slowing rental growth has negatively impacted the wind-downeconomic prospects for current projects and limited the ability of quantitativeAltman easingto duringsource 2023new hasdevelopment createdprojects. In general, these economic uncertainty. The Russian invasion of Ukraine and the related embargoes against Russiaconditions have worsened supply chain issues with the conflict in the Middle East further exacerbating inflationary trends, and supply chain disruptions. These conditions negatively affectaffected our operating results by resulting in, among other things: (i) higher interest expense on variable rate debt and any new debt, (ii) lower gross margins due to increased costs of manufactured or purchased inventory and shipping, (iii) a decline in the availability of debt and equity capital for new real estate investments and the number of real estate development projects meeting the Company’s investment criteria, (iv) higher overall operating expenses due to increases in labor and service costs, (v) a reduction in customer demand for our products, (vi) a shift in customer behavior as higher prices affect customer retention and higher consumer borrowing costs, including mortgage borrowings, affect customer demand, and (vii) increased risk of impairments as a result of declining valuations.valuations, and (viii) further supply chain disruptions as a result of tariffs, labor strikes, international conflicts, or other factors.

BBX Capital reports the results of its business activities through the following reportable segments: BBX Capital Real Estate,Altman, BBX Sweet Holdings, and Renin.

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

BBX Capital Real EstateAltman Reportable Segment

BBX Capital Real EstateAltman is primarily engaged in the acquisition, development, construction, ownership, financing, and managementsale of real estate and investments in real estate joint ventures, including investments in multifamily rental apartment communities, single-family master-planned for sale housing communities, warehouse and logistics facilities, and commercialsingle-family propertiesmaster-planned housing communities primarily located primarily in Florida. As part of its real estate development activities, Altman invests in developments primarily through joint ventures in which it serves as the managing member, and Altman also generates fees from various services related to these developments, including acquisition, development management, general contractor, and property management services. Since November 2018, BBX Capital Real EstateAltman has owned a 50% equity interest in the Altman Companies,Living, a developer and manager of multifamily rental apartment communities, and in January 2023, BBX Capital Real EstateAltman acquired the remaining equity interests in theAltman Living. In 2021, Altman Companies. BBX Capital Real Estate has also established BBXAltman Logistics Properties,for LLCthe ("BBX Logistics"), a developerpurpose of developing warehouse and logistics facilities.

Although BBXRE’s operations in 2021 and 2022 benefited from (i) an increase in demand for single-family and multifamily apartment housing in many of the markets in Florida in which BBXRE operates, (ii) the availability of debt and equity capital for financing new multifamily apartment developments, and (iii) investor demand for the acquisition of stabilized multifamily apartment communities, economicEconomic and market conditions have deteriorated duringand 2023have had and are negativelycontinuing impactingto BBXRE’shave a significant adverse impact on Altman's operations. In particular, risingelevated interest rates have (i) increased the cost of the Company’s outstanding indebtedness and new financingsfinancings, and(ii) haveadversely also had an adverse impact onimpacted the availability of financing for development projectsprojects, and applications for mortgage financing for home sales. Further, higher interest rates are also(iii) adversely impactingimpacted the anticipated profitability of existing and prospective development projects, as (i) a majority of development costs are financed with third party debt and (ii) capitalization rates related to rental properties, including multifamily apartment communities, are generally impacted by interest rates. BBXREFurther, isAltman has also experiencingobserved a decline in the number of potentialfewer investors interested in acquiring stabilized rental properties or pursuing equity or debt financing for new development projects and the acquisition of stabilized rental properties, including multifamily apartment communities,community whichdevelopment BBXREprojects. Altman believes this is also athe result of (i) risingelevated interest rates, (ii) an overall decline incurrent economic and market conditions, including high construction costs and slowing or declining rental rates, and (iii) the related impact of these factors on financial institutions, including banks, that have historically provided debt financing for these developments. In addition, thereAltman has alsoexperienced beenhigher development and construction costs as a result of (i) significantcontinued increasesvolatility in commodity and labor prices, (ii) the failure of various suppliers and subcontractors to meet their contractual obligations to the Company, which has resulted in higheradditional developmentcosts to supplement such suppliers in order to complete construction of its projects, and construction costs, (iiiii) disruptions in supply chains for certain commodities and equipment, which has resulted in ongoing supply shortages of building materials, equipment, and appliances and delays in the completion of projects,projects. andIn (iii)addition, Altman has continued to experience an increase in the operating costs relatedassociated towith rental properties, including significantly higher property insurance costs,costs. whichThe increasesincrease in operating costs has increased costs incurred by the development joint ventures while thea property is owned by the joint venture and may also have a significant impact on the values at which these communities couldcan be sold upon stabilization. Further, while the impact of these inflationary factors on BBXRE’sAltman’s multifamily apartment developments were previously being mitigated by significant growth in rental rates, BBXREAltman has observedseen a deceleration in the growth of rental ratesrates, andas inwell as a contraction in rental rates and a significant deceleration of the volume of new lease activity in certain markets,markets. Altman believes this is attributable to (i) economic conditions, including significant inflation in recent years, which may also be furtherhas impacted overthe affordability of rental housing and (ii) the next several years by the expected completion of the development of a number of various new multifamily apartment communities in many of the markets in which BBXREAltman operates.

The above factors have negatively impacted (i) the timing and expected profitability of projects currently under development, with the significant increase in interest rates and insurance costs and deceleration in the growth of rental rates more recently having an additional negative impact on the expected profitability of BBXRE’s current projects,development. (ii) the commencement of new development opportunities and the anticipated profitability of such developments, and (iii) the sales values of multifamily apartment communities, which are also being adversely impacted by an increase in capitalization rates, a decline in the number of potential purchasers, and a deterioration in net operating income as a result of inflationary pressures and deceleratinga decline in rental growth.rates. These factors are adversely impacting BBXRE’sAltman’s results of operations, cash flows, and financial condition and may have a material adverse impact on BBXREAltman in future periods, particularly if debt and equity financing is not available for new projects or are only available on less attractive terms. Further, although there was some decline in 10-year treasury yields and indications of a decline in capitalization rates during 2024, in late 2024 and into 2025, there was an increase in 10-year treasury yields, which often correlates with capitalization rates and may result in continued volatility in the estimated sales values of multifamily apartment communities, in spite of a decrease in short-term interest rates. Altman believes that this recent resurgence of elevated 10-year treasury yields as compared to the lower levels observed in recent years, along with ongoing volatility in such yields, may have a further adverse impact on Altman Living’s ability to identify new potential projects which satisfy its investment criteria and to source debt and equity capital to fund such development projects.

BBXREIn light of the above factors, Altman currently expectscontinues ato significantexpect declineto inincur an operating loss during 2025 and experience continued deterioration of its operating results in 2024 and over the next several years as compared to recent2021 yearsand 2022 based on its current pipeline of investments, which reflects, among other things, (i) the accelerated monetization of certain investments from future years into 2021 and 2022 as a result of favorable market conditions, (ii) the temporary delay of the commencement of new development projects in 2020 due to the COVID-19 pandemic,pandemic which hastogether with (i) above resulted in a relativesignificant decline in expected monetization of investments in 2023 and 2024, (iii) a decrease in the number of potential development opportunities which meet its investment criteria,criteria which is expected towill result in a decline in fee income recognized by the Altman CompaniesLiving from fewer new development projects, and (iv) increased operating losses from the Altman CompaniesLiving as a result of higher costs related to the completion of Altman Living’s existing projects and the decision by Altman Living to maintain its overhead, structure and staffing in order to identify future developments for its pipeline in spite of lower fees and profits from development projects. Further, while the Altman CompaniesLiving expectsis to completein the constructionprocess of variouscompleting and leasing several multifamily apartment communities in 2024 and such projectsthat would typically be expected to be stabilized and sold between 2025 and 2026, thethere timingis andsignificant profitsuncertainty related to the saletiming and amount of cash flows expected from the potential monetization of these communitiesdevelopments mayas bea adverselyresult impactedof byvarious factors, including market conditions impacting the aforementionedvalue factors.of stabilized rental properties and the ability of certain of Altman Living’s joint venture partners to control or significantly influence the process of monetizing completed developments pursuant to the terms of the related operating agreements.

The Altman CompaniesLiving and Related Investments

BBXRE’sAltman’s Ownership in the Altman CompaniesLiving and Acquisition of Additional Equity Interests in 2023

From November 2018 through January 2023, Altman and Mr. Joel Altman each owned a 50% equity interest in Altman Living. On January 31, 2023 (the “Acquisition Date”), BBXREAltman closed on the acquisition of an additional 50% equity interest in the Altman CompaniesLiving from Mr. Altman for cash consideration of $9.4 million, subject to certain adjustments (including reimbursements for predevelopment expenditures incurred at the time of the acquisition), and a deferred cash payment of $2.4 million. In connection with the acquisition, the parties agreed that Mr. Altman would remain employed by the Altman CompaniesLiving and that an agreed-upon $2.4 million cash payment of the purchase price would be deferred and payable until the earlier of (i) the termination of Mr. Altman’s employment from the Altman CompaniesLiving and (ii) November 30, 2028 (the “Final Payment Date”). In addition, the parties agreed to the following terms pursuant to which Mr. Altman may invest in new development projects commencing subsequent to the Acquisition Date. In particular, with respect to projects that commence prior to the Final Payment Date: (other than certain development projects in predevelopment stages as of the Acquisition Date), Mr. Altman will be required to invest in the managing member of any joint venture formed to invest in such projects as if he still held a 10% ownership interest in Altman Living. However, in such case, his investment in the ventures will be entitled to profits similar to those earned by non-managing members rather than the profits to which Altman will be entitled as the managing member. If Mr. Altman does not invest in the managing member of additional joint ventures, Altman will be entitled to offset Mr. Altman's required capital contribution against the deferred $2.4 million payable to Mr. Altman.

As a result of the transaction, BBXREAltman is entitled to nominate all members of the executive committee responsible for the management of the Altman CompaniesLiving (although BBXREAltman has to date continued to nominate Mr. Altman as a member of the committee) and is deemed to have acquired control and decision-making authority for all significant operating and financing decisions related to the Altman Companies.Living. Further, BBXREAltman is entitled to have decision-making authority for all significant operating and financing decisions for the managing member of any development joint venture that is sponsored and formed by the Altman CompaniesLiving subsequent to the Acquisition Date. However, Mr. Altman has retained his membership interests, including his decision-making rights, in the managing member of the development joint ventures that were originated prior to the Acquisition Date.

Accounting for BBXRE’sAltman’s Investment in the Altman CompaniesLiving

AsThrough the Acquisition Date, the Company accounted for its investment in Altman Living under the equity method of accounting, as Altman and Mr. Altman jointly managed Altman Living and shared decision-making authority for all significant operating and financing decisions through such date. However, as a result of BBXRE’sAltman’s acquisition of control and decision-making authority over the Altman Companies,Living, the Company consolidated the Altman CompaniesLiving in its consolidated financial statements as of the Acquisition Date using the acquisition method of accounting, which requires that the assets acquired and liabilities assumed associated with an acquiree be recognized at their fair values at the acquisition date. As a result, the Company was required to remeasure the carrying value of its existing 50% equity interest in the Altman CompaniesLiving at fair value as of the Acquisition Date, with the resulting remeasurement adjustment recognized in the Company’s consolidated statement of operations and comprehensive (loss) income during the year ended December 31, 2023. Further, the Company recognized goodwill based on the difference between (i) the fair values of the Altman Companies’Living’s identifiable assets and liabilities at the Acquisition Date and (ii) the aggregate of the consideration transferred (measured in accordance with the acquisition method of accounting) and the fair values of the Company’s existing equity interest and any noncontrolling interests in the Altman CompaniesLiving at the Acquisition Date.

See Note 3 to the Company's consolidated financial statements included in Item 8 of this Annual Report for further detail related to the acquisition of the Altman CompaniesLiving and the Company’s accounting for the transaction, including the Company’s determination that it should also consolidate Altman Builders, which was a then partially-owned subsidiary of the Altman Companies,Living, as of the Acquisition Date.

Accounting for Real Estate Joint Ventures Related to the Altman CompaniesLiving

Prior to the Acquisition Date, BBXREAltman invested with Mr. Altman in the managing member of real estate joint ventures sponsored by the Altman Companies.Living. Pursuant to the operating agreements of the managing member entities, BBXREAltman and Mr. Altman share decision-making authority for all significant operating and financing decisions related to the managing member entities, and as a result, the Company previously accounted for its investments in the managing member of the real estate joint ventures sponsored by the Altman CompaniesLiving using the equity method of accounting. While the governance structures related to these existing real estate joint ventures were not amended in connection with BBXRE’sAltman’s acquisition of the remaining 50% equity interests in theAltman Living, Altman Companies, BBXRE evaluated these existing joint ventures under the applicable accounting guidance for variable interest entities (“VIEs”) and determined that, as a result of the Company’s acquisition of control of the Altman CompaniesLiving and the resulting nature of the ongoing relationship between BBXREAltman and Mr. Altman, the Company was required to consolidate the managing members of the existing real estate joint ventures sponsored by the Altman CompaniesLiving as of the Acquisition Date.

Further, due to the consolidation of the managing members of the real estate joint ventures sponsored by theAltman Living, Altman Companies, BBXRE evaluated the managing members' investments in each respective real estate joint venture under the applicable accounting guidance for VIEs. Based on the Company’s analysis of the structure of these ventures, including the respective operating agreements governing these entities and any relevant financial agreements, such as financing arrangements, the Company determined that, while the Company will consolidate the managing member entities, the managing member entities must account for its investments in the underlying real estate joint ventures, other than the AltraAltis Grand Kendall joint venture, under the equity method of accounting. With respect to the AltraAltis Grand Kendall joint venture, the Company has determined that the managing member entity must consolidate the AltraAltis Grand Kendall joint venture as of the Acquisition Date.

See Note 3 to the Company's consolidated financial statements included in Item 8 of this Annual Report for further detail related to the consolidation of the existing managing members of real estate joint ventures sponsored by the Altman Companies.Living.

Organizational Changes at the Altman Companies in 2023Living

Historically, the Altman CompaniesLiving has operated through the following companies: (i) Altman Development Company (“ADC”), which supervises the development and construction of multifamily apartment communities, (ii) Altman Management Company (“AMC”), which provides property management services to the owners of multifamily apartment communities, including affiliates of the Altman CompaniesLiving and unrelated third parties, and (iii) Altman Builders, which serves as the general contractor for the construction of multifamily apartment communities.

Altman Management ("AMC") has historically provided property management services to the owners of multifamily apartment communities pursuant to property management agreements, including real estate joint ventures sponsored by Altman Living, affiliates of Altman Living (including joint ventures in which Mr. Altman is an investor), and unrelated third parties, and was previously a wholly-owned subsidiary of Altman Living. In March 2023, the Altman CompaniesLiving amended and restated the operating agreement of AMC to admit RAM Partners, LLC (“"RAM”") as a joint venture partner and renamed the entitypartner. Altman Management,Living LLC.previously The Altman Companies continues to serveserved as the managing member of AMC,AMC withfollowing anythe formation of the joint venture, although major decisions requiringrequired the approval of both parties. However, onceduring the partiesyear haveended resolvedDecember certain31, ongoing matters related to the formation of the joint venture,2024, RAM will serve asbecame the managing member of AMC, withalthough anyall major decisions continuingcontinue to require the approval of both parties. Under the terms of the operating agreement, the parties will each be entitled to receive distributions of available cash of the joint venture based on a proscribed formula within the operating agreement, with the parties generally each receiving 50% of distributable cash after (i) RAM has received an amount equal to its initial contribution to AMC and (ii) each of the parties havehas thereafter received a return of any additional capital contributions subsequent to the formation of the joint venture. Further, pursuant to the terms of the agreement, each party has the right to terminate the joint venture arrangement at any time,time which would result in RAM transferring its ownership interests in AMC back to the Altman CompaniesLiving and result in the Altman CompaniesLiving once again being the sole owner of AMC. However, if the Altman Companies exercises this right prior to the first anniversary of the formation of the joint venture, the Altman Companies will be required to pay a penalty up to $0.2 million. The Company evaluated the operating agreement of AMC and determined that AMC is a VIE due to its lack of sufficient equity to fund its operations. Further, the Company has also determined that the Altman CompaniesLiving is the primary beneficiary of AMC, as the Altman Companies is currently the managing member and, once RAM succeeds to the position of managing member of the joint venture, the Altman CompaniesLiving has substantive kick-out rights related to RAM as the managing member due to its ability to remove RAM as a member from AMC without cause and without any significant barrier to exercising that right. As such, the Company continues to include AMC in its consolidated financial statements as a consolidated VIE and recognizerecognizes a noncontrolling interest related to RAM’s equity interest in AMC.

As of the Acquisition Date, the Altman CompaniesLiving owned 60% of the equity interests in Altman Builders, which was at the time named Altman-Glenewenkel Construction. Pursuant to the prior operating agreement of Altman Builders, the Altman CompaniesLiving had the right to acquire the 40% equity interests in Altman Builders that were not owned by the Altman CompaniesLiving for a purchase price based on formulas set forth in the operating agreement. As of the Acquisition Date, certain of these formulas provided the Altman CompaniesLiving with the right to acquire such interests for a purchase price that was significantly below the estimated fair value of such equity interests. As a result of BBXRE’sAltman’s acquisition of control over the Altman CompaniesLiving on the Acquisition Date and the presence of such rights within the operating agreement of Altman Builders, in April 2023, the Altman CompaniesLiving acquired the remaining 40% equity interest in Altman Builders in exchange for a purchase price of $1,000 paid at closing. In addition, the Altman CompaniesLiving agreed to pay a contingent purchase price in 2026 that will be calculated based upon a percentage of Altman Builders’ working capital as of December 31, 2025.

Developments Monetized in 2023

During the year ended December 31, 2023, a joint venture sponsored by the Altman CompaniesLiving sold Altis Ludlam Trail, a 312-unit multifamily apartment community located in Miami, Florida. In connection with the sale, the managing member entity, which is owned by BBXRE,Altman, Mr. Altman, and affiliates of the Altman CompaniesLiving and is consolidated by the Company, received an aggregate cash distribution of $9.0 million and recognized approximately $1.3 million of equity earnings related to its investment in the joint venture. In addition, BBXREAltman received a cash distribution of $12.3 million related to its investment in the preferred equity of the joint venture that had been accounted for as a loan to the joint venture.

New Developments Joint Ventures

During the year ended December 31, 2023, a joint venture sponsored by the Altman CompaniesLiving closed on development financing and commenced the development of Altis Grand Twin Lakes, a planned 346-unit multifamily apartment community in Orlando, Florida. As of December 31, 2023,2024, the managing member entity, which is owned by BBXRE,Altman, Mr. Altman, and affiliates of the Altman CompaniesLiving, and is consolidated by the Company, had invested $4.0$6.6 million in the Altis Grand Twin Lakes joint venture and currently expects to contribute an additional $2.4 million to the venture based on its share of the estimated total development costs.venture.

With respect to its existing communities under development, while the Altman Companies’ development budgets for these projects contemplated increases in commodity and labor prices, the Altman CompaniesLiving has continued to experience significant volatility in development costs, including (i) higher than anticipated interest costs related to debt financing, (ii) unanticipated increases in commodities costs, and (iii) delays in the timing of the completion of projects. Further, Altman Builders has been impacted by the failure of certain subcontractors to perform pursuant to their construction contracts with Altman Builders, which has resulted in unforeseen costs related to the completion of certain projects and a significant decline in the expected general contractor profits related to certainsuch projects,projects. including theThe recognition of losses on various construction contracts that have had a significant negative impact on Altman Builders’Living’s results of operations during the yearyears ended December 31, 2024 and 2023. While the Altman CompaniesLiving previously anticipated that the impact of higher development costs on the profits expected to be earned from the Company’s investment in the managing member for these developments would be offset to some extent by demand for multifamily housing and higher rental rates resulting from inflationary factors, thethese Altmanexpectations Companieshave hasbeen moderated its expectations in light of (i) higherelevated interest rates, (ii) potential decreases in investor demand and increasesvolatility in capitalization ratesrates, which may negatively impact the values at which these communities could be sold upon stabilization and the timing of such sales, (iii) the deceleration in the growth of rental rates at its developments, as well as a decline in rental rates and new leasing volume in certain markets, and (iv) continued inflationary pressures (including significant increases in costs such as property insurance, that are outpacing current growth in rental rates) negatively impacting both the operating results of these communities and the estimated values at which these communities could be sold. Further, the current deceleration in the growth of rental ratesrates, andas well as the contraction of rental rates and significant deceleration of new leasing volume in certain marketsmarkets, has been, and may alsocontinue to be further impacted over the next several years by the expected completion of the development of new multifamily apartment communities by others in many of the markets in which the Altman CompaniesLiving operates.

As previously disclosed, during the year ended December 31, 2022, the Altman CompaniesLiving made a decision not to move forward with several prospective development opportunities and recognized losses related to predevelopment expenditures for those developments based on the determination that such developments no longer met the Altman Companies’Living’s investment criteria. The decision not to move forward with these projects, along with the limited pipeline of new potential projects that has had,been andgenerated willover continuethe topast have,two years, has had an adverse impact on the Altman Companies’Living’s operating results, as thesesuch developmentsprojects were previously anticipated to generate development management and general contractor fees related to such projects in 2023 and the next several years.2024. In addition, in order to restore its pipeline of prospective development opportunities, the Altman CompaniesLiving has had to incurincurred additional predevelopment expenditures related to new development projects, and such expenditures may result in the recognition of further losses in future periods if the Altman CompaniesLiving is unable or chooses not to successfully commence such projects.

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 2023 (the “2023 Annual Report”). Risks and uncertainties include risks relating to general competitive, economic, industry, market, geopolitical, and public health issues, including the impact of inflation on our costs and the ability to pass price increases on to our customers, a decline in customer spending or deterioration in consumers’ financial position or confidence, labor shortages or disruptions, increased interest rates, and current inflationary trends. The current inflationary environment has had a negative impact on our margins, including as a result of increased energy and raw material costs. increased insurance costs and increasing wages in the labor markets in which we compete. We expect that inflation will continue to pressure our margins in future periods. The U.S. Federal Reserve recently began reducing its benchmark interest rate. In addition, in response to the concerns over inflation risk and the broader U.S. economy, the U.S. Federal Reserve raised interest rates throughout 2022 and 2023.2023 Adversein response to concerns over inflation and the broader U.S. economy. Further adverse economic conditionsconditions, resultinghigher frominterest inflationaryrates, pressures,the increasedpace and magnitude of U.S. Federal Reserve efforts to lower interest rates and geopolitical issues are difficult to predict, and it is not possible to assess the expected duration and effects of the uncertain economic and geopolitical environment which create a number of risks that could adversely impact our businesses. These include (i) sustained higher interest expense on variable rate debt and any new debt, (ii) lower gross margins due to increased costs of manufactured or purchased inventory and shipping, (iii) a decline in the availability of debt and equity capital for new real estate investments and the number of real estate development projects meeting the Company’s investment criteria, (iv) higher overall operating expenses due to increases in labor, insurance and service costs, (v) a reduction in customer demand for our products, (vi) a shift in customer behavior as higher prices affect customer retention and higher consumer borrowing costs, including mortgage borrowings, affect customer demand,borrowings and (vii) increased risk of impairments as a result of declining valuations. In light of these conditions,While we have taken steps to increase prices; however,prices, such increases may not be accepted by our customers, may not adequately offset the increases in our costs, and/or could negatively impact customer retention and our gross margin.

BBX Capital is a Florida-based diversified holding company whose principal holdings are BBX Capital Real Estate,Altman, BBX Sweet Holdings, and Renin. As of JuneSeptember 30, 2024, the Company had total consolidated assets of $645.7$642.1 million and shareholders’ equity of $286.2$278.1 million.

Headline inflation haswas 2.4% in September 2024, which remained elevated overabove the Federal Reserve's targeted inflation rate of 2.0%2.0%. for an extended period of time and was 3.0% in June 2024. While inflation showed signs of easing during 2023, the inflation rate during the first six months of 2024 was above the Federal Reserve's expectations. The conflictsConflicts in the Middle East and Ukraine may furtherresult increasein increased energy prices and worsen supply chain issues with the potential of exacerbating inflationary trends.issues. While the U.S. economy has grown in the face ofdespite inflationary pressures and higher interest rates, it is possible that the United States and/or the global economy generally will experience a downturn of an uncertain magnitudedownturn, and duration. Thesethese conditions can negatively affect our operating results by resulting in, among other things: (i) additional interest expense on variable rate debt and any new debt, (ii) lower gross margins due to increased costs of manufactured or purchased inventory and shipping, (iii) a decline in the availability of debt and equity capital for new real estate investments and the number of real estate development projects meeting the Company’s investment criteria, (iv) higher overall operating expenses due to increases in labor and service costs, (v) a reduction in customer demand for our products, (vi) a shift in customer behavior as higher prices affect customer retention and higher consumer borrowing costs, including mortgage borrowings, affect customer demand, and (vii) increased risk of impairments as a result of declining valuations.valuations, and (viii) further supply chain disruptions as a result of labor strikes or other factors.

BBXREAltman has experienced a significant increaseincreases in commodity and labor prices and insurance costscosts, which has resulted in higher development and construction costs.costs, and such increases may be further impacted by the potential implementation of additional tariffs on building materials sourced from international markets. Furthermore, homebuilders have seen some softening of demand, and the increase in mortgage rates has had an adverse impact on residential home sales. In addition, higher interest rates have increased the cost of the Company’s outstanding indebtedness and anythe financing for new development projects. IncreasedHigher rates have also had an adverse impact on the availability of financing, and the anticipated profitability of development projects, as (i) a majority of development costs are financed with third party debt and (ii) capitalization rates related to multifamily apartment communities are generally impacted by interest rates. BBXREAltman has also observed a decline in the number of potential investors interested in providing equity or debt financing for the development of new multifamily apartment developments or the acquisition of stabilizedacquiring multifamily apartment communities. These factors have adversely impacted BBXRE’sAltman’s results of operations, cash flows,flow, and financial condition and may have a more significantcontinued adverse impact on BBXREAltman in future periods, particularly if higher development and construction costs continue and debt and equity financing is not available for new projects or is only available on less attractive terms.

Similarly, as a result of inflationary pressures and ongoing disruptions in global supply chains,chains IT’SUGARhave adversely impacted IT’SUGAR, which has experienced significant increases in the cost of inventory and freight, as well as delays in its supply chainfreight that previouslymay impactedbe itsfurther abilityexacerbated toby maintainthe inventorypotential levelsimplementation atof itsadditional retailtariffs locations.on products sourced from international markets. While IT’SUGAR haspreviously increased the inventory levels at its retail locations in an effort to ensure that it could meet consumer demand, theseIT’SUGAR higherhas begun to adjust the pace at which it is replenishing inventory levelsin havelight increasedof the riskslowdown thatin IT’SUGARstore will be unable to sell the productssales and thegeneral riskeconomic of inventory writedowns.uncertainty. While IT’SUGAR mitigatedattempted to mitigate the impact of increased costs through increases in the prices of its products, IT’SUGAR has had to slow the pace of increases in the prices of its products due to a recent decline in consumer demand, whichand hasa resultedsignificant decline in declinesIT’SUGAR’s insales its selling margins.volumes. Further, IT’SUGAR has also experienced an increase in payroll costs as a result of shortages in available labor at its retail locations.

Global supply chain disruptions and increases in commodity prices have also contributed to a significant increase in Renin’s costs related to shipping and raw materials as well as delays in its supply chains, which have: (i) negatively impacted Renin’s product costs and gross margin, (ii) increased the risk that Renin will be unable to fulfill customer orders, and (iii) negatively impacted Renin’s working capital and cash flowsflow due to increased inventory in transit, a prolonged period between when it is required to pay its suppliers and when it is paid by its customers, and an overall decline in its gross margin. While Renin has been successful in raising prices of certain of its products, Renin’s gross margin has nonetheless been negatively impacted by cost pressures.pressures, and such pressures may be further exacerbated by the potential implementation of additional tariffs on products and commodities sourced from international markets. Increases in interest rates have had and will continue to adversely impact Renin’s results. Further, Renin has observed a decline in customer demand, which Renin believes may be attributable to (i) the impact of price increases and overall inflationary pressures on consumer behavior and (ii) a post pandemic shift in consumer spending away from home improvements. Renin has implemented cost reduction initiatives which resulted in improved gross margins and amended its credit facility with TD Bank which reduced its interest expense; however, there is no assurance that these efforts will result in further cost savings and these efforts may result in unanticipated impacts on Renin including lower sales. In March 2024, Renin amended its credit facility with TD Bank in part to address Renin's noncompliance with certain financial covenantscovenants, and Renin is currently in compliance with its financial covenants under the terms of the amended and restated credit facility. Although BBX Capital made a $0.5 million capital contribution to Renin in September 2024 in order for Renin to remain in compliance with the operating results financial covenants, If BBX Capital has no obligation to make additional contributions, Renin is not able to maintain compliance with its financial covenants under its credit facility with TD Bank, Renin could lose availability under its revolving line of credit, be required to provide additional collateral, or be required to repay all or a portion of its borrowings with TD Bank, any of which would have a material adverse effect on the Company’s liquidity, financial position, and results of operations.

Labor is one of the primary components of our expenses. A number of factors may adversely affect the labor force available to us or increase our labor costs, including labor shortages, and increased competition for qualified employees.employees, and laws and regulations related to minimum wages (including a possible increase in the minimum salary requirements for employees who are not required to be paid overtime compensation, that is currently expected to go into effect in 2025). A sustained labor shortage or increased turnover rates, whether caused by wage inflation or as a result of general economic conditions, natural disasters or other factors, could lead to increased costs, increased overtime pay to meet demand and increased costs to attract and retain employees, which could in turn negatively affect our operations or adversely impact our business and results. Further, any mitigation measures we take in response to a decrease in labor availability or an increase in labor costs may be unsuccessful and could have negative effects.

The following summarizes key financial highlights for the three months ended JuneSeptember 30, 2024 compared to the same 2023 period:

The following summarizes key financial highlights for the sixnine months ended JuneSeptember 30, 2024 compared to the same 2023 period:

The Company’s consolidated results of operations for the three months ended JuneSeptember 30, 2024 compared to the same 2023 period were significantly impacted by the following:

BBX Capital reports the results of its business activities through the following reportable segments: BBX Capital Real Estate,Altman, BBX Sweet Holdings, and Renin.

BBX Capital Real EstateAltman Reportable Segment

BBX Capital Real EstateAltman is primarily engaged in the acquisition, development, and sale of multifamily rental apartment communities, warehouse and logistics facilities, and single-family master-planned housing communities primarily located primarily in Florida. As part of its real estate development activities, BBX Capital Real EstateAltman invests in developments primarily through joint ventures in which it serves as the managing member, and BBX Capital Real EstateAltman also generates fees from various services related to these developments, including acquisition, development management, general contractor, and property management services. Since November 2018, BBX Capital Real EstateAltman has owned a 50% equity interest in The Altman Companies, LLC (the “Altman Companies”),Living, a developmentdeveloper and manager of multifamily apartment communities, and in January 2023, BBX Capital Real EstateAltman acquired the remaining equity interests in the Altman Companies.Living. In 2021, BBX Capital Real EstateAltman also established BBXAltman Logistics Properties, LLC ("BBX Logistics"),Logistics, a developer of warehouse and logistics facilities.

As previously described in the Company's 2023 Annual Report, economic and market conditions have had and are continuing to have a significant adverse impact on BBXRE’sAltman’s operations, particularly itsin with respect to operations through theof Altman Companies.Living. In particular, higher interest rates have (i) increased the cost of the Company’s outstanding indebtedness and new financings, (ii) adversely impacted the availability of financing for development projects, and (iii) adversely impacted the anticipated profitability of existing and prospective development projects, as a majority of development costs are financed with third party debt and capitalization rates related to rental properties, including multifamily apartment communities, are generally impacted by interest rates. Further, BBXREAltman ishas also continuingobserved to observe a relatively limited number of potentialfewer investors interested in acquiring stabilized rental properties or pursuing equity or debt financing for new development projects and the acquisition of stabilized rental properties, including multifamily apartment communities,community whichdevelopment BBXREprojects. Altman believes this is also athe result of (i) higher interest rates, (ii) an overall decline incurrent economic and market conditions, including high construction costs and slowing or declining rental rates, and (iii) the related impact of these factors on financial institutions, including banks, that have historically provided debt financing for these developments. In addition, BBXREAltman has continued to experienceexperienced higher development and construction costs as a result of various factors, including (i) continued volatility in commodity and labor prices, (ii) the failure of various suppliers and subcontractors to perform according tomeet their agreementscontractual withobligations to the Company, which has resulted in additional costs to supplement such suppliers and complete construction of its projects, and (iii) disruptions in supply chains for certain commodities and equipment, which has resulted in ongoing supply shortages of building materials, equipment, and appliances and delays in the completion of projects. In addition, BBXREAltman has continued to experience an increase in the operating costs relatedassociated towith rental properties, including significantly higher property insurance costs,costs. whichThe increasesincrease in operating costs has increased costs incurred by the development joint ventures while a property is owned by athe joint venture and may also have a significant impact on the values at which these communities couldcan be sold upon stabilization. Further, while the impact of these factors on BBXRE’sAltman’s multifamily apartment developments were previously being mitigated by significant growth in rental rates, BBXREAltman has observed a deceleration in the growth of rental ratesrates, andas well as a contraction in rental rates and significant deceleration of the volume of new lease activity in certain markets, which mayAltman alsobelieves beis furtherattributable impactedto over(i) the nextimpact severalof yearseconomic byconditions, including significant inflation in recent years, on the expectedaffordability of rental housing and (ii) the completion of the development of various new multifamily apartment communities in many of the markets in which BBXREAltman operates.

AsAltman previously disclosed, BBXRELiving continues to expect a significant decline in its operating results in 2024 and over the next several years as compared to recent2021 yearsand 2022 based on its current pipeline of investments, which reflects, among other things, (i) the accelerated monetization of certain investments into 2021 and 2022 as a result of favorable market conditions, (ii) the temporary delay of the commencement of new development projects in 2020 due to the COVID-19 pandemic which resulted in a relative decline in expected monetization of investments in 2024, (iii) a decrease in the number of potential development opportunities which meet its investment criteria which will result in a decline in fee income recognized by the Altman CompaniesLiving from new development projects, and (iv) increased operating losses from the Altman CompaniesLiving as a result of lower fees from development projects and higher costs related to the completion of Altman Living’s existing projects and the decision by Altman Living to maintain its existingoverhead expenses in order to identify future developments for its pipeline in spite of lower fees and profits from development projects. Further, while the Altman CompaniesLiving expects to complete the construction of several multifamily apartment communities in 2024 and such projectsthat would typically be expected to be stabilized and sold between 2025 and 2026, the timing and profits related to the saleprofitability of these communities is uncertain.

While there is no assurance that it will be successful in doing so, BBXREAltman remains focused on the sourcing and deployment of capital in investments in new development opportunities where supported by market conditions, including (i) continuing to pursue certain investment opportunities in multifamily rental apartment communities through the Altman Companies in spite of a limited pipeline of investments which meet its investment criteriaLiving and (ii) investing in the development of warehouse and logistics facilities through BBXAltman Logistics. However, duebased toon the expected life cycle of these developments, which generally involve the monetization of an investment approximately three to four years following the commencement of the development, BBXREAltman does not expect that its operating results will significantly benefit from these efforts in the near term. Further, as described above, higher than previously anticipated interest rates and capitalization rates, increases in development costs, and any declinedeclines in economic and market conditions may (i) adversely impact the costs and availability of debt and equity capital and(ii) reduce the number of development projects meeting BBXRE'sAltman's investment criteria, and (iii) adversely impact BBXRE'sAltman's plans to deploy capital in investments in new development opportunities, particularly investments in the development of multifamily apartment communities. In addition, while BBXAltman Logistics has recently been more successful in identifying potential development opportunities which BBXREAltman believes meet its investment criteria, there are material risks relatedrelating to theseAltman typesLogistics, including (i) that it real estate developments are a new real estate asset type for Altman and (ii) that its expansion of developments,its particularlydevelopment inactivities lightare to regions outside of theFlorida. factFurther, thatwhile BBXREAltman ishas pursuingemployed various professionals with experience in the development of logistics facilities, Altman Logistics, as a new assetdivision types.of Altman, has yet to fully execute on the construction, leasing, and sale of a completed development, and at the current time, no lease agreements have been executed related to Altman Logistics’ current developments.

The Altman CompaniesLiving and Related Investments

As previously disclosed, economic and market conditions have negatively impacted the Altman Companies'Living’s operations. In particular, the Altman CompaniesLiving has observed a deceleration in the growth of rental rates at its developments, as well as a contraction in rental rates and significant deceleration of new leasing volume in certain markets, and a relative slowdown in investor demand for multifamily apartment communities, both of which have a negative impact on the estimated sale values of multifamily apartment communities. Further, the Altman CompaniesLiving has observed a decline in the availability of debt and equity capital for new multifamily apartment developments and a decrease in the number of potential development projects which meet its investment criteria. The Altman CompaniesLiving believes that these conditions are primarily a result of higher interest rates, a decline incurrent economic and market conditions, and increases in development costs. Although the Altman CompaniesLiving had previously observed indications of a potential increase in capitalization rates as compared to its underwriting estimates for various projects as a result of high interest rates, it has more recently seen indications of a reversal of the previously observed increase based on sales transactions in the market and a more recent decline in long-termshort-term interest rates.

With respect to its existing communities under development, while the Altman Companies’Living’s development budgets for these projects contemplated increases in commodity and labor prices, the Altman CompaniesLiving has continued to experience significant volatility in development costs, including (i) higher than anticipated interest costs related to debt financing, (ii) unanticipated increases in commodities costs, and (iii) delays in the timing of the completion of projects. Further, Altman Builders has been impacted by the failure of certain subcontractors to perform pursuant to their construction contracts with Altman Builders, which has resulted in unforeseen costs related to the completion of certain projects and a significant decline in the expected general contractor profits related to such projects. The recognition of losses on various construction contracts have had a significant negative impact on Altman Builders’ results of operations during the sixnine months ended JuneSeptember 30, 2024. While the Altman CompaniesLiving previously anticipated that the impact of higher development costs on the profits expected to be earned from the Company’s investment in the managing member for these developments would be offset to some extent by demand for multifamily housing and higher rental rates resulting from inflationary factors, these expectations werehave been moderated in light of (i) higher interest rates, (ii) potential decreases in investor demand and volatility in capitalization rates, which may negatively impact the values at which these communities could be sold upon stabilization and the timing of such sales, (iii) the deceleration in the growth of rental rates at its developments, as well as a decline in rental rates and new leasing volume in certain markets, and (iv) continued inflationary pressures (including significant increases in costs such as property insurance, that are outpacing current growth in rental rates) negatively impacting both the operating results of these communities and the estimated values at which these communities could be sold. Further, the current deceleration in the growth of rental ratesrates, andas well as the contraction of rental rates and significant deceleration of new leasing volume in certain marketsmarkets, has been, and may also be further impacted over the next several yearsyears, by the expected completion of the development of new multifamily apartment communities by others in many of the markets in which the Altman CompaniesLiving operates.

AWith respect to potential development projects, a decline in the availability, as well as increases in the cost of, debt and equity capital for new development opportunities,opportunities and uncertainty in the overall economy and compression in the profits expected to be earned from new developments has increased the risk that thelimited Altman CompaniesLiving’s will not be ableability to identify equity and/or debt financing on acceptable terms, or at all, even ifwhen potential development opportunities that meet its investment criteria are identified.identified, and there is risk that these factors could continue to negatively impact Altman Living’s ability to identify equity and/or debt financing in the future.

As previously discussed, economic and market conditions are highly uncertain as a result of various factors, including inflationary pressures and sustained higher interest rates.rates that remain elevated above rates observed over the past decade. An economic recession resulting from these factors could ultimately have a significant impact on rental rates, occupancy levels, and rental receipts, including an increase in tenant delinquencies and/or requests for rent abatements. These effects would impact the amount of rental revenues generated from the multifamily apartment communities managed by the Altman CompaniesLiving through a joint venture, the extent of management fees earned by the Altman Companies,Living, and the ability of the related joint ventures to stabilize and successfully sell such communities. Furthermore, a decline in rental revenues at developments sponsored by the Altman CompaniesLiving could require it, as the sponsor and managing member, to fund operating shortfalls in certain circumstances. In addition, as discussed above, the increases in costs of developing and operating multifamily apartment communities, including, but not limited to, increases in commodity prices, labor prices, and property insurance costs, could also have an adverse impact on market values and the Altman Companies’Living operating results. If there is a significant adverse impact on real estate values as a result of higher interest rates, lower rental revenues, higher capitalization rates, or otherwise, the joint ventures sponsored by the Altman CompaniesLiving may be unable to sell their respective multifamily apartment developments within the time frames previously anticipated and/or for the previously forecasted sales prices, if at all, which may adversely impact (i) the profits expected to be earned by BBXREAltman from its investment in the managing member of such projects and (ii) the ability of the joint ventures to repay or refinance construction loans on such projects and could also result in the recognition of impairment losses related to BBXRE’sAltman’s investment in such projects. All of these factors could result in increased operating losses at the Altman Companies,Living, the recognition of impairment losses by BBXREAltman and/or the Altman CompaniesLiving related to their current investments, and the recognition of impairment losses related to BBXRE’sAltman’s investment in the Altman Companies,Living, including the goodwill recognized by the Company in connection with the consolidation of the Altman Companies.Living.

Active Developments Sponsored by the Altman CompaniesLiving

As of JuneSeptember 30, 2024, BBXREAltman had investments in seven active developments sponsored by the Altman CompaniesLiving that are accounted for under the equity method of accounting, which are summarized as follows (dollars in thousands):

As a result of the Company consolidating the managing members of development joint ventures sponsored by the Altman Companies,Living, the carrying value of the Company’s investments in real estate joint ventures included in the table above includes investments that are owned by BBXREAltman and noncontrolling interests in the respective joint ventures, including those owned by Mr. Altman.

In addition to the above unconsolidated developments, BBXREAltman consolidates the Altis Grand Kendall joint venture (previously referred to as the Altra Kendall joint venture), which is developing a planned 342-unit multifamily apartment community in Kendall, Florida. Construction of the community has commenced and is expected to be substantially completed in 2025.2025, although delivered units are currently being leased. As of JuneSeptember 30, 2024, the2024,the Company’s statement of financial condition includes $88.9$97.1 million of construction costs incurred that are included in real estate, a $48.7$60.0 million balance on a construction loan facility with TD Bank, and $35.7$35.0 million of noncontrolling interests related to the development.

In January 2024, BBXREAltman and the Altman CompaniesLiving formed the Altis Grand Bay joint venture to obtain entitlements, fund predevelopment costs, and seek development financing for a potential 336-unit multifamily apartment community in Miami, Florida. In connection with the formation of the joint venture, the Company initially invested $0.7 million in the joint venture in exchange for a 50% membership interest and assigned a purchase and sale agreement for the acquisition of land related to the development to the joint venture. Upon obtaining entitlements and sourcing development financing, including equity and debt financing, the joint venture currently expects to form a separate joint venture with third party investors to acquire and develop the land. However, there is no assurance that the venture will close on the land or be able to obtain entitlements or development financing for the development on acceptable terms, or at all, and the joint venture may be required to recognize losses related to predevelopment expenditures incurred if it does not proceed with the development.

BBXAltman Logistics

Development Joint Ventures Sponsored by BBXAltman Logistics

As of JuneSeptember 30, 2024, BBXREAltman had investments in three joint ventures sponsored by BBXAltman Logistics that are accounted for under the equity method of accounting, which are summarized as follows (dollars in thousands):

In September 2023, BBXAltman Logistics formed The Park at Delray joint venture, a joint venture with affiliates of PCCP, LLC. The joint venture acquired approximately 40 acres of land for the purpose of developing The Park at Delray, a logistics facility expected to be comprised of three buildings with a total of approximately 593,000 square feet of leasable area.

In April 2024, the joint venture closed on debt financing for site development and the construction of the first buildingphase of the facility, and the venture commenced constructionsite development in the second quarter of 2024.

In January 2024, BBXAltman Logistics formed The Park at Lakeland joint venture, a joint venture with affiliates of FRP Holdings, Inc. ("FRP"), for the purpose of developing a logistics facility and assigned a contract to acquire approximately 22.5 acres of land in Lakeland, Florida to the joint venture. In connection with the formation of the joint venture, the Company initially invested $0.2 million in the administrative managing member of the joint venture, and the administrative managing member invested those proceeds in the joint venture in exchange for a 50% membership interest in the venture. In March 2024, the joint venture acquired the land expected to be developed into The Park at Lakeland. The joint venture currently expects to obtainobtained site plan approval and currently expects to obtain debt financing for a portion of the expected total development costs and commence vertical construction later in 20242025 depending on the receipt of required approvals.approvals, BBXand Altman Logistics currentlyhas expects to continuecontinued to contribute capital to the joint venture for predevelopment expenditures and land acquisition costs based on its current 50% membership interest in the venture and expects to have an investment of approximately $1.3 million of capital in the administrative managing member for investment in The Park at Lakeland joint venture. PursuantHowever, pursuant to the terms of the operating agreement for the joint venture, upon the origination of debt financing for the development and the commencementsatisfaction of verticalother conditions related to the ability to proceed with construction of the logistics facility, BBXAltman Logistics and FRP will recapitalize the joint venture, which will result in the Company owning a 10% membership interest in the venture and FRP owning the remaining 90% of the joint venture.venture, and at such time, the Company currently expects to have an investment of $1.3 million of capital in the administrative managing member that will be invested in The Park at Lakeland joint venture based on the administrative managing member’s 10% share of the currently estimated total development costs expected to be incurred by the joint venture and projected construction loan proceeds. Thereafter, BBXAltman Logistics, as the administrative managing member, will be entitled to receive 10% of the joint venture distributions until the administrative managing member and FRP receive their aggregate capital contributions. Subsequently, the administrative managing member will be entitled to receive an increasing percentage of the joint venture distributions based upon FRP realizing a specified return on its contributed capital. However, there is no assurance that the venture will be successful in obtaining debt financing for the development on acceptable terms, or at allall, and if such debt financing is not put in place, the Company may be required to contribute additional equity to the joint venture in order to fund development costs.

In March 2024, BBXAltman Logistics formed The Park at Davie joint venture, a joint venture with affiliates of FRPFRP, for the purpose of developing a logistics facility and assigned a contract to acquire approximately 11.3 acres of land in Davie, Florida to the joint venture. In connection with the formation of the joint venture, the Company initially invested $0.5 million in the administrative managing member of the joint venture, and the administrative managing member invested those proceeds in the joint venture in exchange for a 50% membership interest in the venture. In July 2024, the joint venture acquired the land expected to be developed into The Park at Davie, and in connection with the acquisition, the Company invested an additional $11.9 million in the joint venture, increasing its investment in the joint venture to $12.8 million. The joint venture currently expects to obtain site plan approval and debt financing for a portion of the expected total development costs and commence vertical construction later in 20242025, orand early 2025 depending on the receipt of required approvals. BBXAltman Logistics currentlyhas expects to continuecontinued to contribute capital to the joint venture for predevelopment expenditures and land acquisition costs based on its current 50% membership interest in the venture. PursuantHowever, pursuant to the terms of the operating agreement for the joint venture, upon the origination of debt financing for the development and satisfaction of other conditions related to the ability to proceed with the commencement of vertical construction of the logistics facility, BBXAltman Logistics and FRP will recapitalize the joint venture, which will result in the Company owning a 20% membership interest in the venture and FRP owning the remaining 80% of the joint venture. Following the commencement of vertical constructionventure, and theat recapitalizationsuch of the joint venture,time, the Company currently expects to have an investment of $5.1 million of capital in the administrative managing member that will be invested in The Park at Davie joint venture based on the administrative managing member’s 20% share of the currently estimated total development costs expected to be incurred by the joint venture and projected construction loan proceeds. Thereafter, BBXAltman Logistics, as the administrative managing member, will be entitled to receive 20% of the joint venture distributions until the administrative managing member and FRP receive their aggregate capital contributions. Subsequently, the administrative managing member will be entitled to receive an increasing percentage of the joint venture distributions based upon FRP realizing a specified return on its contributed capital. However, there is no assurance that the venture will be successful in obtaining debt financing for the development on acceptable terms, or at all, and if such debt financing is not put in place, the Company may be required to contribute additional equity to the joint venture in order to fund development costs. Further, if the joint venture does not obtain site plan approval related to its proposed development plans, the Company may be required retain its increased investment in the venture for longer than anticipated, and the joint venture may not yield the anticipated economic benefits related to the development of the land, which may also result in the recognition of impairment losses related to the investment.

BBXREAltman is the master developer of the Beacon Lake Community, a master planned community located in St. Johns County, Florida that is being developed in four phases and is expected to be comprised of 1,476 single-family homes and townhomes. As the master developer, BBXREAltman developed the land and common areas and sold finished lots to third-party homebuilders who are constructing single-family homes and townhomes. Other than in the case of the lots comprising Phase 4, which were sold to a homebuilder as undeveloped lots in 2021, the agreements pursuant to which BBXREAltman sold finished lots to homebuilders generally provided for a base purchase price that is paid to BBXREAltman upon the sale of the developed lots to the homebuilders and a contingent purchase price that is calculated as a percentage of the proceeds that the homebuilders receive from the sale of the completed homes. While an estimated amount of the contingent purchase price was recognized in BBXRE’sAltman’s revenues upon the sale of the lots to the homebuilders, the contingent purchase price is paid to BBXREAltman upon the closing of home sales by the homebuilders.

As of JuneSeptember 30, 2024, BBXREAltman had substantially completed its primary activities as the master developer of the Beacon Lake Community, including the development and sale of the 1,177 lots comprising Phases 1 through 3 of the community and the sale of the 299 undeveloped lots comprising Phase 4 in a bulk lot sale to a single homebuilder.

However, as discussed above, while BBXREAltman previously recognized revenues related to the contingent purchase price expected to be collected on lots sold to homebuilders in connection with the sale of such lots, BBXREAltman expects to continue to collect contingent purchase price from homebuilders upon the sale of homes by the homebuilders, and as of JuneSeptember 30, 2024, BBXREAltman had recognized contingent purchase price receivables totaling $4.1$2.0 million related to the sale of lots in the Beacon Lake Community. The following table summarizes the status of the sale of homes by homebuilders on lots in Phases 1 through 3 previously sold by BBXREAltman to such homebuilders as of JuneSeptember 30, 2024:

In February 2021, BBXREAltman invested $4.9 million in the Sky Cove South joint venture, which was formed to develop Sky Cove South at Westlake, a residential community expected to be comprised of 197 single-family homes in Loxahatchee, Florida. During the sixnine months ended JuneSeptember 30, 2024 and 2023, BBXREAltman recognized $0.6 million and $1.4 million, respectively, in equity earnings from the joint venture. As of JuneSeptember 30, 2024, the joint venture had executed contracts to sell and closed onsold all of the 197 homes in the community.

As of December 31, 2023, BBXREAltman had invested $3.8 million as one of a number of investors in 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 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. Construction was completed during 2022, and as of December 31, 2023, the office tower, residential tower, and retail space were substantially leased.

In April 2024, the joint venture sold its ownership interests in the residential tower and a portion of the ground floor retail. As a result of that sale, during the three and sixnine months ended JuneSeptember 30, 2024, BBXREAltman received a distribution of $2.1 million from the joint venture and recognized $1.6 million of equity earnings from the joint venture.

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

BBXREAltman recognized a loss before income taxes of $(0.43.0) million during the three months ended JuneSeptember 30, 2024 compared to income before income taxes of $4.3$3.1 million during the same 2023 period. The decrease of $(4.76.1) million is primarily due to the following:

BBXREAltman recognized a loss before income taxes of $(4.87.9) million during the sixnine months ended JuneSeptember 30, 2024 compared to income before income taxes of $22.2$25.2 million during the same 2023 period. The decrease of $(27.033.1) million is primarily due to the following:

As of JuneSeptember 30, 2024, IT’SUGAR had over 100 retail locations across the United States and one retail location in Canada.

As previously disclosed, IT’SUGAR iscontinues focusedto focus on expanding and improving the quality of its store portfolio by:

Over the next 2 to 4several years, the initial terms of a significant number of IT’SUGAR’s lease agreements for its retail locations are scheduled to expire, including lease agreements for certain large format “pop-up” retail locations in Chicago, Illinois, Manhattan, New York, and Boston, Massachusetts. Although IT’SUGAR has the right to extend certain leases that are scheduled to expire, IT’SUGAR is seeking to reduce the impact of upcoming lease expirations by, among other things, (i) negotiating with the landlords to extend the term of the leases, (ii) evaluating alternative retail locations within the same markets, and (iii) evaluating new locations where rental rates and landlord contributions to fund construction costs are generally more favorable. Although IT’SUGAR more recently opened two new “candy department storesstores,” in 2024, IT’SUGAR is currently focused on identifying smaller format locations where landlords will agree to provide allowances to IT’SUGAR to fund a significant portion of IT’SUGAR’s costs to open the locations and where the initial net capital investments are less than the investments required for IT’SUGAR’s traditional retail locations and “candy department stores.”

During the three and sixnine months ended JuneSeptember 30, 2024, IT’SUGAR’s trade sales were $29.5$31.8 million and $56.8$88.6 million, respectively, a decrease of $(2.3$5,000) million and $(2.6) million,million overas compared to, the respective comparable periods in 2023. The decrease in trade sales reflects lower comparable store sales, partially offset by the impact of sales generated in IT’SUGAR’s new and expanded store locations. During the three and sixnine months ended JuneSeptember 30, 2024, IT’SUGAR’s comparable store sales, which represent IT’SUGAR’s sales at its retail locations excluding both the impact of e-commerce sales and changes in its store portfolio, decreased by approximately 14.2%8.4% and 13.5%11.7% as compared to the respective comparable periodperiods in 2023. IT’SUGAR believes the decline in comparable store sales is attributable to the impact of current economic conditions on consumer demand, as it observed a drasticsignificant decline in consumer demand commence in the second quarter of 2023 that has continued through the current time,time. Although the pace of the decline in comparable store sales has slowed, the magnitude and the duration of suchany continued decline remainsis uncertain due to uncertainty related to economic conditions, including whether a deceleration in inflationary conditions and lower interest rates will improve consumer demand for discretionary products. In response to these conditions,uncertain. IT’SUGAR is implementing various measures intended to mitigate the impact of lower consumer demand, including (i) expanding operating hours, (ii) focusing on the sale of higher margin products, (iii) offering selective promotional discounts on products in an effort to appeal to increasingly cost conscious consumers, and (iv) increasing its average dollars per sales transaction through promotions and small dollar items intended to be added toat thecheck-out. existing consumer basket, althoughHowever, there is no assurance that such efforts will be successful.successful in mitigating the impact of lower consumer demand on its sales.

As a result of inflationary trends and disruptions in global supply chains, IT’SUGAR experienced significant increases in the cost of inventory and freight, and over the past several years, IT’SUGAR implemented significant increases in the prices of its products in an effort to maintain its selling margins. However, commencing in 2023, IT’SUGAR experienced compression in its selling margins as the pace of increases in the prices of its products was not possible based on athe decline in consumer demand. IT’SUGAR has more recently observed a decline in the cost of inventory and freight related to certain of its products and is focusing on shiftingseeking to shift its product and sales mix towards its higher margin products, both of whichproducts. IT’SUGAR believes shouldthese efforts will result in improved selling margins in future periods and partially offset the impact of a decline in consumer demand. However, in light of the general volatility in costs over the past several years, as well as the potential implementation of additional tariffs on products and materials sourced from international markets, there is no assurance that (i) the current decline in costs will be sustained.sustained Further,or (ii) its efforts to shift its product and sales mix toward higher margin products will not have a negative impact on its overall sales volumes. IT’SUGAR believes that customers appear to be more sensitive to the price increases that were implemented in recent years, which may be contributing to the decline in demand. Accordingly, in addition to product discounts already implemented, IT'SUGAR believes it may be necessary to strategically decreaseimplement thefurther price of certain productsreductions in order to increase consumer demand, which would negatively impact IT’SUGAR’s selling margins. In addition, while IT’SUGAR has begun to adjust the pace at which it is replenishing inventory in light of the slowdown in store sales and general economic uncertainty, although it mustwill be required to closely manage thesuch extent to which it adjusts its replenishment in an effortadjustments to ensure that lower inventory levels do not have a negativeadversely impact on store sales.

IT’SUGAR has also continued to be impacted by staffing issues and has experienced an increase in payroll costs associated with hiring and maintaining staffing at both its retail locations and its corporate offices. Further, like the Company’s other reportable segments, IT’SUGAR has experienced a significant increase in insurance costs, including in the cost of property insurance upon the renewal of its policies, and these increases are expected to continue.

During the three and sixnine months ended JuneSeptember 30, 2024 and 2023 Las Olas Confections and Snacks’ revenues increased (decreased) by 0.9%(22.4%) and (17.8%19.4%) as compared to the same 2023 respective periodsperiods. which reflects the impact of aA product recall in the 2023 period which lowered net sales during suchthe 2023 period andas lowerwell as demand from various customers in the 2024 period as compared to the 2023 period. However,In addition, during the sixnine months ended JuneSeptember 30, 2024, Las Olas Confections and Snacks sold one of its product lines to a third partyparty. andWhile the Company recognized a net gain on sale of $0.5 million whichupon isthe sale, included in other income in the table below.below, the sale has also ultimately resulted in lower sales volumes in the 2024 period as compared to the 2023 period.

BBX Sweet Holdings’ loss before income taxes for the three months ended JuneSeptember 30, 2024 was $(4.81.8) million compared to $(2.52.4) million during the same 2023 period. The increasedecrease in the loss before income taxes was primarily due to a decrease in the following:operating loss incurred by Las Olas Confections and Snacks in the 2024 period as compared to the 2023 period.