##### 



ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 BLUEGREEN CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
 December 31,
    
    
    December 31,2006
    
    
    2007ASSETSCash and cash equivalents (including restricted cash of $21,476
and $19,460 at December 31, 2006 and 2007, respectively)
    
    $
    71,148
    
    
    $
    144,973Contracts receivable, net
    
    
    23,856
    
    
    
    20,532Notes receivable (net of allowance of $13,499 and $17,458 at
December 31, 2006 and 2007, respectively)
    
    
    144,251
    
    
    
    160,665Prepaid expenses
    
    
    10,800
    
    
    
    14,824Other assets
    
    
    27,465
    
    
    
    23,405Inventory, net
    
    
    349,333
    
    
    
    434,968Retained interests in notes receivable sold
    
    
    130,623
    
    
    
    141,499Property and equipment, net
    
    
    92,445
    
    
    
    94,421Goodwill
    
    
    4,291
    
    
    
    4,291Total assets
    
    $
    854,212
    
    
    $
    1,039,578LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesAccounts payable
    
    $
    18,465
    
    
    $
    38,901Accrued liabilities and other
    
    
    49,458
    
    
    
    60,421Deferred income
    
    
    40,270
    
    
    
    36,559Deferred income taxes
    
    
    87,624
    
    
    
    98,362Receivable-backed notes payable
    
    
    21,050
    
    
    
    54,999Lines-of-credit and notes payable
    
    
    124,412
    
    
    
    176,97810.50% senior secured notes payable
    
    
    55,000
    
    
    
    55,000Junior subordinated debentures
    
    
    90,208
    
    
    
    110,827Total liabilities
    
    
    486,487
    
    
    
    632,047Minority interest
    
    
    14,702
    
    
    
    22,423Commitments and contingenciesShareholders EquityPreferred stock, $.01 par value, 1,000 shares authorized; none issued
    
    
    
    
    
    
    Common stock, $.01 par value, 90,000 shares authorized; 33,603 and
33,957 shares issued at December 31, 2006 and 2007, respectively
    
    
    336
    
    
    
    339Additional paid-in capital
    
    
    175,164
    
    
    
    178,144Treasury stock, 2,756 common shares at both December 31, 2006 and 2007,
at cost
    
    
    (12,885
    )
    
    
    (12,885
    )Accumulated other comprehensive income, net of income taxes
    
    
    12,632
    
    
    
    9,808Retained earnings
    
    
    177,776
    
    
    
    209,702Total shareholders equity
    
    
    353,023
    
    
    
    385,108Total liabilities and shareholders equity
    
    $
    854,212
    
    
    $
    1,039,578
 See accompanying notes to consolidated financial statements.
 1




---



##### 



BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
 Year Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2007Revenues:Gross sales of real estate
    
    $
    550,335
    
    
    $
    583,795
    
    
    $
    605,250Estimated uncollectible VOI notes receivable
    
    
    
    
    
    
    (59,497
    )
    
    
    (65,242
    )Gains on sales of VOI notes receivable (Resort sales portion)
    
    
    
    
    
    
    38,848
    
    
    
    42,750Sales of real estate
    
    
    550,335
    
    
    
    563,146
    
    
    
    582,758Other resort and communities operations revenue
    
    
    73,797
    
    
    
    63,610
    
    
    
    67,411Interest income
    
    
    34,798
    
    
    
    40,765
    
    
    
    44,703Sales of notes receivable
    
    
    25,226
    
    
    
    5,852
    
    
    
    (3,378
    )684,156
    
    
    
    673,373
    
    
    
    691,494Costs and expenses:Cost of real estate sales
    
    
    177,800
    
    
    
    179,054
    
    
    
    178,731Cost of other resort and communities operations
    
    
    77,317
    
    
    
    53,193
    
    
    
    49,982Selling, general and administrative expenses
    
    
    300,239
    
    
    
    356,989
    
    
    
    377,551Interest expense
    
    
    14,474
    
    
    
    18,785
    
    
    
    24,272Other expense, net
    
    
    6,207
    
    
    
    2,861
    
    
    
    1,743Provision for loan losses
    
    
    27,587
    
    
    
    
    
    
    
    603,624
    
    
    
    610,882
    
    
    
    632,279Income before minority interest and provision for income taxes
    
    
    80,532
    
    
    
    62,491
    
    
    
    59,215Minority interest in income of consolidated subsidiary
    
    
    4,839
    
    
    
    7,319
    
    
    
    7,721Income before provision for income taxes and cumulative effect of
change in accounting principles
    
    
    75,693
    
    
    
    55,172
    
    
    
    51,494Provision for income taxes
    
    
    29,142
    
    
    
    20,861
    
    
    
    19,568Income before cumulative effect of change in accounting principle
    
    
    46,551
    
    
    
    34,311
    
    
    
    31,926Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    (5,678
    )
    
    
    Minority interest in cumulative effect of change in accounting
principle
    
    
    
    
    
    
    1,184
    
    
    
    Net income
    
    $
    46,551
    
    
    $
    29,817
    
    
    $
    31,926Income before cumulative effect of change in accounting principle
per common share:Basic
    
    $
    1.53
    
    
    $
    1.12
    
    
    $
    1.03Diluted
    
    $
    1.49
    
    
    $
    1.10
    
    
    $
    1.02Cumulative effect of change in accounting principle, net of tax and
net of minority interest in income of cumulative effect of change in
accounting principle per common share:Basic
    
    $
    
    
    
    $
    (0.15
    )
    
    $
    Diluted
    
    $
    
    
    
    $
    (0.14
    )
    
    $
    Net income per common share:Basic
    
    $
    1.53
    
    
    $
    0.98
    
    
    $
    1.03Diluted
    
    $
    1.49
    
    
    $
    0.96
    
    
    $
    1.02Weighted average number of common and common equivalent shares:Basic
    
    
    30,381
    
    
    
    30,557
    
    
    
    30,975Diluted
    
    
    31,245
    
    
    
    31,097
    
    
    
    31,292
 See accompanying notes to consolidated financial statements.
 2




---



##### 



BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(in thousands)
 AccumulatedOtherCommon
    
    
    
    
    
    
    Additional
    
    
    Treasury
    
    
    ComprehensiveShares
    
    
    Common
    
    
    Paid-in
    
    
    Stock at
    
    
    Income, Net of
    
    
    RetainedIssued
    
    
    Stock
    
    
    Capital
    
    
    Cost
    
    
    Income Taxes
    
    
    Earnings
    
    
    TotalBalance at December 31, 2004
    
    
    32,990
    
    
    $
    330
    
    
    $
    167,408
    
    
    $
    (12,885
    )
    
    $
    4,805
    
    
    $
    101,408
    
    
    $
    261,066Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,551
    
    
    
    46,551Net unrealized gains on retained
interests in
notes receivable sold, net of income
taxes
and reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,770
    
    
    
    
    
    
    
    3,770Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,321Shares issued upon exercise of stock
options
    
    
    271
    
    
    
    3
    
    
    
    1,403
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,406Modification of equity awards and
vesting of restricted stock
    
    
    6
    
    
    
    
    
    
    
    327
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    327Income tax benefit from stock options
exercised
    
    
    
    
    
    
    
    
    
    
    541
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    541Shares issued in connection with
conversion of 8.25% convertible
subordinated debentures
    
    
    1
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Balance at December 31, 2005
    
    
    33,268
    
    
    
    333
    
    
    
    169,684
    
    
    
    (12,885
    )
    
    
    8,575
    
    
    
    147,959
    
    
    
    313,666Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,817
    
    
    
    29,817Net unrealized gains on retained
interests in
notes receivable sold, net of income
taxes
and reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,057
    
    
    
    
    
    
    
    4,057Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,874Shares issued upon exercise of stock
options
    
    
    312
    
    
    
    3
    
    
    
    2,642
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,645Stock option expense
    
    
    
    
    
    
    
    
    
    
    2,103
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,103Modification of equity awards and
vesting of restricted stock
    
    
    23
    
    
    
    
    
    
    
    735
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    735Balance at December 31, 2006
    
    
    33,603
    
    
    
    336
    
    
    
    175,164
    
    
    
    (12,885
    )
    
    
    12,632
    
    
    
    177,776
    
    
    
    353,023Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,926
    
    
    
    31,926Net unrealized losses on retained
interests
in notes receivable sold, net of income
taxes and reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,824
    )
    
    
    
    
    
    
    (2,824
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,102Shares issued upon exercise of stock
options
    
    
    140
    
    
    
    1
    
    
    
    558
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    559Stock option expense
    
    
    
    
    
    
    
    
    
    
    2,052
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,052Vesting of restricted stock
    
    
    214
    
    
    
    2
    
    
    
    370
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    372Balance at December 31, 2007
    
    
    33,957
    
    
    $
    339
    
    
    $
    178,144
    
    
    $
    (12,885
    )
    
    $
    9,808
    
    
    $
    209,702
    
    
    $
    385,108
 See accompanying notes to consolidated financial statements.
 3




---



##### 



BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 Year Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2007Operating activities:Net income
    
    $
    46,551
    
    
    $
    29,817
    
    
    $
    31,926Adjustments to reconcile net income to net cash provided
(used) by operating activities:Cumulative effect of change in accounting principle, net
    
    
    
    
    
    
    5,678
    
    
    
    Non-cash stock compensation expense
    
    
    327
    
    
    
    2,848
    
    
    
    2,422Minority interest in income of consolidated subsidiary
    
    
    4,839
    
    
    
    6,135
    
    
    
    7,721Depreciation
    
    
    12,332
    
    
    
    14,376
    
    
    
    14,489Amortization
    
    
    5,807
    
    
    
    2,793
    
    
    
    3,180Gain on sales of notes receivable
    
    
    (25,226
    )
    
    
    (44,700
    )
    
    
    (39,372
    )Loss on disposal of property and equipment
    
    
    94
    
    
    
    2,096
    
    
    
    688Provision for loan losses
    
    
    27,587
    
    
    
    59,489
    
    
    
    65,419Provision for deferred income taxes
    
    
    16,979
    
    
    
    12,835
    
    
    
    12,468Interest accretion on retained interests in notes
receivable sold
    
    
    (9,310
    )
    
    
    (14,569
    )
    
    
    (15,157
    )Proceeds from sales of notes receivable
    
    
    198,260
    
    
    
    218,455
    
    
    
    229,067Changes in operating assets and liabilities:Contracts receivable
    
    
    612
    
    
    
    3,854
    
    
    
    3,324Notes receivable
    
    
    (220,491
    )
    
    
    (283,305
    )
    
    
    (305,972
    )Prepaid expenses and other assets
    
    
    2,120
    
    
    
    (12,009
    )
    
    
    (473
    )Inventory
    
    
    29,022
    
    
    
    (8,273
    )
    
    
    (59,322
    )Accounts payable, accrued liabilities and other
    
    
    6,022
    
    
    
    12,906
    
    
    
    28,471Net cash provided (used) by operating activities
    
    
    95,525
    
    
    
    8,426
    
    
    
    (21,121
    )Investing activities:Cash received from retained interests in notes receivable
sold
    
    
    11,016
    
    
    
    30,032
    
    
    
    35,949Business acquisition
    
    
    (675
    )
    
    
    
    
    
    
    Investments in statutory business trusts
    
    
    (1,780
    )
    
    
    (928
    )
    
    
    (619
    )Purchases of property and equipment
    
    
    (16,724
    )
    
    
    (24,736
    )
    
    
    (15,855
    )Proceeds from sales of property and equipment
    
    
    22
    
    
    
    93
    
    
    
    2Net cash (used) provided by investing activities
    
    
    (8,141
    )
    
    
    4,461
    
    
    
    19,477Financing activities:Proceeds from borrowings collateralized by notes
receivable
    
    
    24,772
    
    
    
    68,393
    
    
    
    151,973Payments on borrowings collateralized by notes receivable.
    
    
    (64,714
    )
    
    
    (85,114
    )
    
    
    (120,145
    )Proceeds from borrowings under line-of-credit facilities
and
notes payable
    
    
    26,382
    
    
    
    56,670
    
    
    
    147,835Payments under line-of-credit facilities and notes payable
    
    
    (92,071
    )
    
    
    (94,586
    )
    
    
    (123,320
    )Payments on 10.50% senior secured notes
    
    
    (55,000
    )
    
    
    
    
    
    
    Proceeds from issuance of junior subordinated debentures
    
    
    59,280
    
    
    
    30,928
    
    
    
    20,619Payments of debt issuance costs
    
    
    (3,300
    )
    
    
    (4,438
    )
    
    
    (2,052
    )Proceeds from exercise of employee and director stock
options
    
    
    1,406
    
    
    
    2,645
    
    
    
    559Distributions to minority interest
    
    
    
    
    
    
    (941
    )
    
    
    Net cash (used) provided by financing activities
    
    
    (103,245
    )
    
    
    (26,443
    )
    
    
    75,469Net (decrease) increase in cash and cash equivalents
    
    
    (15,861
    )
    
    
    (13,556
    )
    
    
    73,825Cash and cash equivalents at beginning of period
    
    
    100,565
    
    
    
    84,704
    
    
    
    71,148Cash and cash equivalents at end of period
    
    
    84,704
    
    
    
    71,148
    
    
    
    144,973Restricted cash and cash equivalents at end of period
    
    
    (18,321
    )
    
    
    (21,476
    )
    
    
    (19,460
    )Unrestricted cash and cash equivalents at end of period
    
    $
    66,383
    
    
    $
    49,672
    
    
    $
    125,513
 See
accompanying notes to consolidated financial statements.
 4




---



##### 



BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS(Continued)
(in thousands)
 Year Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2007Supplemental schedule of non-cash operating,
investing and financing activities:Inventory acquired through foreclosure or
deedback in lieu of foreclosure
    
    $
    10,585
    
    
    $
    
    
    
    $
    Inventory acquired through financing
    
    $
    54,054
    
    
    $
    95,698
    
    
    $
    26,425Property and equipment acquired through financing
    
    $
    1,114
    
    
    $
    4,640
    
    
    $
    1,188Offset of Joint Venture distribution of
operating proceeds to minority interest against
the Prepayment (see Note 4)
    
    $
    1,340
    
    
    $
    
    
    
    $
    Retained interests in notes receivable sold
    
    $
    38,913
    
    
    $
    33,967
    
    
    $
    36,222Change in unrealized gains on retained interests
in notes receivable sold
    
    $
    6,130
    
    
    $
    6,423
    
    
    $
    (4,554
    )Income tax benefit from stock options exercised
    
    $
    541
    
    
    $
    
    
    
    $
    Supplemental schedule of operating cash flow
information:Interest paid, net of amounts capitalized
    
    $
    15,955
    
    
    $
    17,171
    
    
    $
    24,407Income taxes paid
    
    $
    6,646
    
    
    $
    10,064
    
    
    $
    9,823
 See accompanying notes to consolidated financial statements.
 5




---



##### 



BLUEGREEN CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Significant Accounting Policies
 Organization
 ®
 Principles of Consolidation
  Use of Estimates
  Cash and Cash Equivalents
   6




---



##### 



Revenue Recognition and Contracts Receivable
 Accounting for Sales of Real Estate, Accounting for Real Estate
Time-Sharing Transactions
    Activity
    
    Revenue is recognized as:Vacation ownership tour sales
    
    Vacation ownership tour sales commissions are earned
per contract terms with third parties.Resort title fees
    
    Escrow amounts are released and title documents are
completed.Management fees
    
    Management services are rendered.Rental commissions
    
    Rental services are provided.Rental income
    
    Guests complete stays at the resorts. Effective
January 1, 2006, rental income is classified as a
reduction to Cost of other resort and communities
operations.Realty commissions
    
    Sales of third-party-owned real estate are completed.Golf course and ski hill daily fees
    
    Services are provided.Mini-vacation package sales to third parties
    
    Mini-vacation packages are fulfilled (i.e., guests
use mini- vacation packages to stay at a hotel, take
a cruise, etc.). During 2006, we transitioned our
mini-vacation business so that substantially all
mini-vacation tours are used internally at a
Bluegreen sales office. Mini-vacation packages used
for internal purposes are deferred and recognized as
a credit to marketing expense.
 7




---



##### 



Notes Receivable
  Accounting for
Contingencies, Selected Loan Loss Allowance
Methodology and Documentation Issues,
 Retained Interest in Notes Receivable Sold
 Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities
  Accounting for Certain
Investments in Debt and Equity Securities
  Inventory
  8




---



##### 



Accounting for the
Impairment or Disposal of Long-Lived Assets
 Property and Equipment
  Goodwill
 Goodwill and
Other Intangible Assets.
 Treasury Stock
  Advertising Expense
  Stock-Based Compensation
 Share-Based
Payment (revised 2004)
   9




---



##### 



During the year ended December 31,2005
    
    
    2006
    
    
    2007Risk free investment rate
    
    
    3.9
    %
    
    
    5.0
    %
    
    
    4.9
    %Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Volatility factor of expected market price
    
    
    61.0
    %
    
    
    53.0
    %
    
    
    45.8
    %Life of option
    
    5.5 years
    
    5.8 years
    
    5.0 years
    Weighted-AverageNumber
    
    
    Grant-DateNon-vested Restricted Shares
    
    of Shares
    
    
    Fair Value(in 000's)Non-vested at January 1, 2007
    
    
    14,482
    
    
    $
    12.91Granted
    
    
    213,546
    
    
    
    11.98Vested
    
    
    (17,097
    )
    
    
    11.70Forfeited
    
    
    Non-vested at December 31, 2007
    
    
    210,931
    
    
    $
    12.07
  10




---



##### 



Year EndedDecember 31,2005Net income, as reported
    
    $
    46,551Add: Total stock-based compensation
expense included in the determination of
reported net income, net of related tax
effects
    
    
    207Deduct: Total stock-based compensation
expense determined under the fair
value-based method for all awards, net of
related tax effects
    
    
    (1,493
    )Pro forma net income
    
    $
    45,265Earnings per share, as reported:Basic
    
    $
    1.53Diluted
    
    $
    1.49Pro forma earnings per share:Basic
    
    $
    1.49Diluted
    
    $
    1.45
 Earnings Per Common Share
   Year Ended December 31,2005
    
    
    2006
    
    
    2007Basic and diluted earnings per common share  numerator:Net income
    
    $
    46,551
    
    
    $
    29,817
    
    
    $
    31,926Denominator:Denominator for basic earnings per common
share-weighted-average shares
    
    
    30,381
    
    
    
    30,557
    
    
    
    30,975Effect of dilutive securities:Stock options and unvested restricted stock
    
    
    864
    
    
    
    540
    
    
    
    317Denominator for diluted earnings per common
share-adjusted weighted-average shares and assumed
conversions
    
    
    31,245
    
    
    
    31,097
    
    
    
    31,292Basic earnings per common share:
    
    $
    1.53
    
    
    $
    0.98
    
    
    $
    1.03Diluted earnings per common share:
    
    $
    1.49
    
    
    $
    0.96
    
    
    $
    1.02
 Comprehensive Income
 Reporting Comprehensive Income
 Recent Accounting Pronouncements Not Yet Adopted
 Fair Value Measurements
 11




---



##### 



The Fair Value Option for Financial Assets and
Financial Liabilities Including an Amendment of FASB Statement No. 115
 Business Combinations
 Non-controlling Interests in Consolidated
Financial Statements-an Amendment of Accounting Research Bulletin (ARB) No. 51
 2. Cumulative Effect of Change in Accounting Principle
 Accounting for Real Estate Time-Sharing
Transactions Accounting for Sales of Real
Estate Accounting for Costs and Initial Rental Operations of Real Estate
Projects Accounting for Real Estate Time-Sharing Transactions
  12




---



##### 



3. Joint Venture
    Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity
 13




---



##### 



4. Marketing Agreement
     14




---



##### 



5. Notes Receivable
  As of December 31,2006
    
    
    2007Notes receivable secured by VOIs
    
    $
    150,649
    
    
    $
    172,787Notes receivable secured by homesites
    
    
    6,915
    
    
    
    5,336Other notes receivable
    
    
    186
    
    
    
    Notes receivable, gross
    
    
    157,750
    
    
    
    178,123Allowance for loan losses
    
    
    (13,499
    )
    
    
    (17,458
    )Notes receivable, net
    
    $
    144,251
    
    
    $
    160,665
    Year EndedDecember 31,2006
    
    
    2007Balance, beginning of year
    
    $
    10,869
    
    
    $
    13,499Adjustment for cumulative effect of change in
accounting principle
    
    
    1,164
    
    
    
    Provision for loan losses
    
    
    59,489
    
    
    
    65,419Less: Allowance on sold receivables
    
    
    (38,848
    )
    
    
    (42,750
    )Less: Write-offs of uncollectible receivables
    
    
    (19,175
    )
    
    
    (18,710
    )Balance, end of year
    
    $
    13,499
    
    
    $
    17,458
  2006
    
    
    2007Due in 1 year
    
    $
    28,912
    
    
    $
    39,838Due in 2 years
    
    
    10,280
    
    
    
    10,761Due in 3 years
    
    
    11,008
    
    
    
    11,953Due in 4 years
    
    
    12,079
    
    
    
    13,662Due in 5 years
    
    
    13,693
    
    
    
    15,412Thereafter
    
    
    81,778
    
    
    
    86,497Total
    
    $
    157,750
    
    
    $
    178,123
 15




---



##### 



Bluegreen
    
    
    BluegreenResorts
    
    
    Communities
    
    
    Other
    
    
    TotalDecember 31, 2006:Notes receivable
    
    $
    150,649
    
    
    $
    6,915
    
    
    $
    186
    
    
    $
    157,750Allowance for loan losses
    
    
    (13,140
    )
    
    
    (173
    )
    
    
    (186
    )
    
    
    (13,499
    )Notes receivable, net
    
    $
    137,509
    
    
    $
    6,742
    
    
    $
    
    
    
    $
    144,251Allowance as a % of gross notes
receivable
    
    
    9
    %
    
    
    3
    %
    
    
    1100
    %
    
    
    9
    %December 31, 2007:Notes receivable
    
    $
    172,787
    
    
    $
    5,336
    
    
    $
    
    
    
    $
    178,123Allowance for loan losses
    
    
    (17,196
    )
    
    
    (262
    )
    
    
    
    
    
    
    (17,458
    )Notes receivable, net
    
    $
    155,591
    
    
    $
    5,074
    
    
    $
    
    
    
    $
    160,665Allowance as a % of gross notes
receivable
    
    
    10
    %
    
    
    5
    %
    
    
    0
    %
    
    
    10
    %
 6. Sales of Notes Receivable
  Year EndedDecember 31, 2005:Aggregate Principal
    
    
    
    
    
    
    
    
    
    
    Initial Fair ValueBalance of Notes
    
    
    Purchase
    
    
    Gain
    
    
    of RetainedFacility
    
    Receivable Sold
    
    
    Price
    
    
    Recognized
    
    
    Interest2004 BB&T Purchase
Facility
    
    $
    211.9
    
    
    $
    180.1
    
    
    $
    25.0
    
    
    $
    42.42005 Term Securitization
    
    
    16.7
    
    
    
    15.1
    
    
    
    0.2
    
    
    
    3.0Total
    
    $
    228.6
    
    
    $
    195.2
    
    
    $
    25.2
    
    
    $
    45.4
 Year EndedDecember 31, 2006:Aggregate Principal
    
    
    
    
    
    
    
    
    
    
    Initial Fair ValueBalance of Notes
    
    
    Purchase
    
    
    Gain
    
    
    of RetainedFacility
    
    Receivable Sold
    
    
    Price
    
    
    Recognized
    
    
    Interest2005 Term Securitization
    
    $
    18.6
    
    
    $
    16.7
    
    
    $
    4.6
    
    
    $
    3.82006-A GE Purchase
Facility
    
    
    72.0
    
    
    
    64.8
    
    
    
    11.1
    
    
    
    8.52006 Term Securitization
    
    
    153.0
    
    
    
    137.0
    
    
    
    29.0
    
    
    
    29.6Total
    
    $
    243.6
    
    
    $
    218.5
    
    
    $
    44.7
    
    
    $
    41.9
 16




---



##### 



Year EndedDecember 31, 2007:Aggregate Principal
    
    
    
    
    
    
    
    
    
    
    Initial Fair ValueBalance of Notes
    
    
    Purchase
    
    
    Gain
    
    
    of RetainedFacility
    
    Receivable Sold
    
    
    Price
    
    
    Recognized
    
    
    Interest2006-A GE Purchase Facility
    
    $
    66.9
    
    
    $
    60.2
    
    
    $
    10.6
    
    
    $
    8.32007 Term Securitization
    
    
    200.0
    
    
    
    168.9
    
    
    
    28.8
    
    
    
    36.3Total
    
    $
    266.9
    
    
    $
    229.1
    
    
    $
    39.4
    
    
    $
    44.6
   For the year ended December 31,2005
    
    2006
    
    2007Prepayment rates
    
    17% - 9%
    
    17% - 9%
    
    29% - 11%Loss severity rates
    
    35% - 45%
    
    35% - 71%
    
    38% - 72%Default rates
    
    10% - 1%
    
    11% - 1%
    
    12% - 1%Discount rates
    
    9% - 12%
    
    9%
    
    9% - 12.6%
  2004 BB&T Purchase Facility
  2005 Term Securitization
  17




---



##### 



2006 GE Purchase Facility
   2006 Term Securitization
 2006 BB&T Purchase Facility
 2007 Term Securitization
  18




---



##### 



7. Retained Interests in Notes Receivable Sold
  GrossAmortized
    
    
    UnrealizedAs of December 31, 2006:
    
    Cost
    
    
    Gain
    
    
    Fair Value2002 Term Securitization
    
    $
    12,643
    
    
    $
    472
    
    
    $
    13,1152004 Term Securitization (see Note 6)
    
    
    17,784
    
    
    
    2,785
    
    
    
    20,5692004 GE Purchase Facility (see Note 6)
    
    
    6,695
    
    
    
    56
    
    
    
    6,7512005 Term Securitization (see Note 6)
    
    
    42,469
    
    
    
    8,291
    
    
    
    50,7602006 GE Purchase Facility (see Note 6)
    
    
    7,405
    
    
    
    1,264
    
    
    
    8,6692006 Term Securitization (see Note 6)
    
    
    23,253
    
    
    
    7,506
    
    
    
    30,759Total
    
    $
    110,249
    
    
    $
    20,374
    
    
    $
    130,623
 GrossAmortized
    
    
    UnrealizedAs of December 31, 2007:
    
    Cost
    
    
    Gain (Loss)
    
    
    Fair Value2002 Term Securitization
    
    $
    8,842
    
    
    $
    
    
    
    $
    8,8422004 Term Securitization (see Note 6)
    
    
    11,934
    
    
    
    2,797
    
    
    
    14,7312004 GE Purchase Facility (see Note 6)
    
    
    5,633
    
    
    
    (609
    )
    
    
    5,0242005 Term Securitization (see Note 6)
    
    
    29,268
    
    
    
    2,230
    
    
    
    31,4982006 GE Purchase Facility (see Note 6)
    
    
    15,481
    
    
    
    953
    
    
    
    16,4342006 Term Securitization (see Note 6)
    
    
    24,522
    
    
    
    1,529
    
    
    
    26,0512007 Term Securitization (see Note 6)
    
    
    30,000
    
    
    
    8,919
    
    
    
    38,919Total
    
    $
    125,680
    
    
    $
    15,819
    
    
    $
    141,499
  AmortizedCost
    
    
    Fair ValueAfter one year but within five
    
    $
    8,842
    
    
    $
    8,842After five years but within ten
    
    
    116,838
    
    
    
    132,657Total
    
    $
    125,680
    
    
    $
    141,499
  As of December 31,2006
    
    2007Prepayment rates
    
    27% - 6%
    
    33% - 6%Loss severity rates
    
    30% - 71%
    
    18% - 72%Default rates
    
    11% - 1%
    
    12% - 0%Discount rates
    
    8% - 9%
    
    12.6%
 19




---



##### 



Hypothetical Fair Value at December 31, 2007Adverse
    
    
    
    
    
    
    
    
    
    
    2004 GE
    
    
    
    
    
    
    2006 GEChange
    
    
    2002 Term
    
    
    2004 Term
    
    
    Purchase
    
    
    2005 Term
    
    
    Purchase
    
    
    2006 Term
    
    
    2007 TermPercentage
    
    
    Securitization
    
    
    Securitization
    
    
    Facility
    
    
    Securitization
    
    
    Facility
    
    
    Securitization
    
    
    SecuritizationPrepayment
rate:
    
    
    10
    %
    
    $
    8,776
    
    
    $
    14,433
    
    
    $
    5,006
    
    
    $
    31,005
    
    
    $
    16,286
    
    
    $
    25,601
    
    
    $
    38,42420
    %
    
    
    8,712
    
    
    
    14,146
    
    
    
    4,988
    
    
    
    30,537
    
    
    
    16,146
    
    
    
    25,180
    
    
    
    37,963Loss severity rate:
    
    
    10
    %
    
    
    8,775
    
    
    
    14,635
    
    
    
    4,857
    
    
    
    30,760
    
    
    
    15,467
    
    
    
    25,460
    
    
    
    37,94020
    %
    
    
    8,709
    
    
    
    14,538
    
    
    
    4,689
    
    
    
    30,022
    
    
    
    14,502
    
    
    
    24,868
    
    
    
    36,961Default rate:
    
    
    10
    %
    
    
    8,762
    
    
    
    14,587
    
    
    
    4,822
    
    
    
    30,724
    
    
    
    15,295
    
    
    
    25,382
    
    
    
    37,66220
    %
    
    
    8,683
    
    
    
    14,444
    
    
    
    4,624
    
    
    
    29,961
    
    
    
    14,186
    
    
    
    24,723
    
    
    
    36,430Discount rate:
    
    
    10
    %
    
    
    8,386
    
    
    
    14,405
    
    
    
    4,869
    
    
    
    30,857
    
    
    
    15,804
    
    
    
    25,541
    
    
    
    37,89320
    %
    
    
    7,954
    
    
    
    14,093
    
    
    
    4,722
    
    
    
    30,246
    
    
    
    15,211
    
    
    
    25,054
    
    
    
    36,916
  For the Year Ended December 31,2005
    
    
    2006
    
    
    2007Proceeds from new sales of receivables
    
    $
    198,260
    
    
    $
    218,455
    
    
    $
    229,067Collections on previously sold receivables
    
    
    (104,863
    )
    
    
    (145,096
    )
    
    
    (173,448
    )Servicing fees received
    
    
    4,969
    
    
    
    6,955
    
    
    
    8,697Purchases of defaulted receivables
    
    
    (631
    )
    
    
    (1,122
    )
    
    
    (3,420
    )Resales of foreclosed assets
    
    
    (30,573
    )
    
    
    (40,566
    )
    
    
    (44,786
    )Remarketing fees received
    
    
    16,793
    
    
    
    23,163
    
    
    
    25,858Cash received on retained interests in
notes receivable sold
    
    
    11,016
    
    
    
    30,032
    
    
    
    35,949Cash paid to fund required reserve accounts
    
    
    (6,445
    )
    
    
    (13,495
    )
    
    
    (10,044
    )Purchases of upgraded accounts
    
    
    (2,443
    )
    
    
    (17,447
    )
    
    
    (28,251
    )
  As of
    
    
    Year EndedDecember 31, 2007
    
    
    December 31, 2007PrincipalTotal
    
    
    AmountPrincipal
    
    
    of Loans
    
    
    CreditAmount of
    
    
    60 or More
    
    
    Losses, NetLoans
    
    
    Days Past Due
    
    
    of Recoveries2002 Term Securitization
    
    $
    29,638
    
    
    $
    767
    
    
    $
    5842004 Term Securitization
    
    
    55,880
    
    
    
    1,409
    
    
    
    2,4632004 GE Purchase Facility
    
    
    20,941
    
    
    
    708
    
    
    
    7062005 Term Securitization
    
    
    131,711
    
    
    
    3,826
    
    
    
    6,1132006 GE Purchase Facility
    
    
    105,680
    
    
    
    2,679
    
    
    
    2006 Term Securitization
    
    
    112,700
    
    
    
    3,771
    
    
    
    3,5572007 Term Securitization
    
    
    188,185
    
    
    
    3,865
    
    
    
    
   20




---



##### 



8. Inventory
  As of December 31,2006
    
    
    2007Bluegreen Resorts
    
    $
    233,290
    
    
    $
    288,969Bluegreen Communities
    
    
    116,043
    
    
    
    145,999$
    349,333
    
    
    $
    434,968
   9. Property and Equipment
  December 31,Useful Life
    
    
    2006
    
    
    2007Office equipment, furniture and fixtures
    
    3-14 years
    
    $
    58,795
    
    
    $
    67,894Golf course land, land improvements, buildings and
    
    5-39 years
    
    
    33,684
    
    
    
    32,462equipment
Land, buildings and building improvements
    
    3-31 years
    
    
    35,254
    
    
    
    42,694Leasehold improvements
    
    2-14 years
    
    
    16,846
    
    
    
    15,663Transportation and equipment
    
    3-5 years
    
    
    2,459
    
    
    
    2,435147,038
    
    
    
    161,148Accumulated depreciation and amortization of leasehold
improvements
    
    
    
    
    
    
    (54,593
    )
    
    
    (66,727
    )Total
    
    
    
    
    
    $
    92,445
    
    
    $
    94,421
 10. Receivable-Backed Notes Payable
  December 31,2006
    
    
    20072006 BB&T Purchase Facility
    
    $
    
    
    
    $
    16,967GMAC Receivable Facility
    
    
    16,870
    
    
    
    11,400GE Bluegreen/Big Cedar Receivables Facility
    
    
    
    
    
    
    24,100Textron Facility
    
    
    2,180
    
    
    
    1,482Foothill Facility
    
    
    1,983
    
    
    
    1,050Other
    
    
    17
    
    
    
    Total
    
    $
    21,050
    
    
    $
    54,999
 The 2006 BB&T Purchase Facility.
 21




---



##### 



The GMAC Receivables Facility
 GE Bluegreen/Big Cedar Receivables Facility
 The Textron Facility.
 22




---



##### 



The Foothill Facility.
 11. Lines-of-Credit and Notes Payable
  December 31,
    
    
    December 31,2006
    
    
    2007Lines-of-credit secured by inventory and
golf courses with a carrying value of $251
million at December 31, 2007. Interest
rates range from 9.25% to 9.83% at December
31, 2006 and 8.25% to 9.10% at December 31,
2007. Maturities range from September 2009
to November 2011
    
    $
    90,974
    
    
    $
    148,080Notes and mortgage notes secured by certain
inventory, property, equipment and
investments with an aggregate carrying
value of $51 million at December 31, 2007.
Interest rates ranged from 4.75% to 9.50%
at December 31, 2006 to 6.05% to 8.50% at
December 31, 2007. Maturities range from
February 2008 to May 2026
    
    
    32,736
    
    
    
    28,501Lease obligations secured by the underlying
assets with an aggregate carrying value of
$0.4 million at December 31, 2007. Imputed
interest rates ranging from 3.29% to 14.20%
at December 31, 2006 and from 3.29% to
9.92% at December 31, 2007. Maturities
range from February 2008 to November 2011
    
    
    702
    
    
    
    397Total
    
    $
    124,412
    
    
    $
    176,978
  2008
    
    $
    7,4422009
    
    
    121,1412010
    
    
    28,8512011
    
    
    16,0242012
    
    
    307Thereafter
    
    
    3,213Total
    
    $
    176,978
  The GMAC AD&C Facility.
 23




---



##### 



The GMAC Communities Facility.
 The Wachovia Line-of-Credit
 12. Senior Secured Notes Payable
  pari passu pari passu
 24




---



##### 



CONDENSED CONSOLIDATING BALANCE SHEETS
(dollars in thousands)
 December 31, 2006Combined
    
    
    CombinedBluegreen
    
    
    Non-Guarantor
    
    
    SubsidiaryCorporation
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCash and cash equivalents
    
    $
    36,316
    
    
    $
    17,002
    
    
    $
    17,830
    
    
    $
    
    
    
    $
    71,148Contracts receivable, net
    
    
    
    
    
    
    1,222
    
    
    
    22,634
    
    
    
    
    
    
    
    23,856Intercompany receivable
    
    
    165,997
    
    
    
    
    
    
    
    
    
    
    
    (165,997
    )
    
    
    Notes receivable, net
    
    
    
    
    
    
    57,845
    
    
    
    86,406
    
    
    
    
    
    
    
    144,251Inventory, net
    
    
    
    
    
    
    17,967
    
    
    
    331,366
    
    
    
    
    
    
    
    349,333Retained interests in notes receivable sold
    
    
    
    
    
    
    130,623
    
    
    
    
    
    
    
    
    
    
    
    130,623Property and equipment, net
    
    
    16,110
    
    
    
    933
    
    
    
    75,402
    
    
    
    
    
    
    
    92,445Investments in subsidiaries
    
    
    290,084
    
    
    
    
    
    
    
    3,230
    
    
    
    (293,314
    )
    
    
    Other assets
    
    
    7,860
    
    
    
    4,582
    
    
    
    30,114
    
    
    
    
    
    
    
    42,556Total assets
    
    $
    516,367
    
    
    $
    230,174
    
    
    $
    566,982
    
    
    $
    (459,311
    )
    
    $
    854,212LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Accounts payable, accrued liabilities and
other
    
    $
    33,303
    
    
    $
    20,717
    
    
    $
    54,173
    
    
    $
    
    
    
    $
    108,193Intercompany payable
    
    
    
    
    
    
    8,967
    
    
    
    157,030
    
    
    
    (165,997
    )
    
    
    Deferred income taxes
    
    
    (19,813
    )
    
    
    47,864
    
    
    
    59,573
    
    
    
    
    
    
    
    87,624Lines-of-credit and notes payable
    
    
    4,646
    
    
    
    18,914
    
    
    
    121,902
    
    
    
    
    
    
    
    145,46210.50% senior secured notes payable
    
    
    55,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,000Junior subordinated debentures
    
    
    90,208
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,208Total liabilities
    
    
    163,344
    
    
    
    96,462
    
    
    
    392,678
    
    
    
    (165,997
    )
    
    
    486,487Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,702
    
    
    
    14,702Total shareholders equity
    
    
    353,023
    
    
    
    133,712
    
    
    
    174,304
    
    
    
    (308,016
    )
    
    
    353,023Total liabilities and shareholders
equity
    
    $
    516,367
    
    
    $
    230,174
    
    
    $
    566,982
    
    
    $
    (459,311
    )
    
    $
    854,212
 25




---



##### 



December 31, 2007Combined
    
    
    CombinedBluegreen
    
    
    Non-Guarantor
    
    
    SubsidiaryCorporation
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCash and cash equivalents
    
    $
    104,793
    
    
    $
    24,581
    
    
    $
    15,599
    
    
    $
    
    
    
    $
    144,973Contracts receivable, net
    
    
    
    
    
    
    893
    
    
    
    19,639
    
    
    
    
    
    
    
    20,532Intercompany receivable
    
    
    112,312
    
    
    
    13,138
    
    
    
    
    
    
    
    (125,450
    )
    
    
    Notes receivable, net
    
    
    
    
    
    
    77,414
    
    
    
    83,251
    
    
    
    
    
    
    
    160,665Inventory, net
    
    
    
    
    
    
    29,117
    
    
    
    405,851
    
    
    
    
    
    
    
    434,968Retained interests in notes receivable sold
    
    
    
    
    
    
    141,499
    
    
    
    
    
    
    
    
    
    
    
    141,499Property and equipment, net
    
    
    13,471
    
    
    
    562
    
    
    
    80,388
    
    
    
    
    
    
    
    94,421Investments in subsidiaries
    
    
    312,446
    
    
    
    
    
    
    
    3,230
    
    
    
    (315,676
    )
    
    
    Other assets
    
    
    9,072
    
    
    
    2,821
    
    
    
    30,627
    
    
    
    
    
    
    
    42,520Total assets
    
    $
    552,094
    
    
    $
    290,025
    
    
    $
    638,585
    
    
    $
    (441,126
    )
    
    $
    1,039,578LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Accounts payable, accrued liabilities and
other
    
    $
    21,620
    
    
    $
    17,961
    
    
    $
    96,300
    
    
    $
    
    
    
    $
    135,881Intercompany payable
    
    
    
    
    
    
    
    
    
    
    125,450
    
    
    
    (125,450
    )
    
    
    Deferred income taxes
    
    
    (20,534
    )
    
    
    57,337
    
    
    
    61,559
    
    
    
    
    
    
    
    98,362Lines-of-credit and notes payable
    
    
    73
    
    
    
    65,666
    
    
    
    166,238
    
    
    
    
    
    
    
    231,97710.50% senior secured notes payable
    
    
    55,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,000Junior subordinated debentures
    
    
    110,827
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110,827Total liabilities
    
    
    166,986
    
    
    
    140,964
    
    
    
    449,547
    
    
    
    (125,450
    )
    
    
    632,047Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,423
    
    
    
    22,423Total shareholders equity
    
    
    385,108
    
    
    
    149,061
    
    
    
    189,038
    
    
    
    (338,099
    )
    
    
    385,108Total liabilities and shareholders equity
    
    $
    552,094
    
    
    $
    290,025
    
    
    $
    638,585
    
    
    $
    (441,126
    )
    
    $
    1,039,578
 26




---



##### 



CONDENSED CONSOLIDATING STATEMENTS OF INCOME
(dollars in thousands)
 Year Ended December 31, 2005Combined
    
    
    CombinedBluegreen
    
    
    Non-Guarantor
    
    
    SubsidiaryCorporation
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedREVENUESSales of real estate
    
    $
    
    
    
    $
    55,007
    
    
    $
    495,328
    
    
    $
    
    
    
    $
    550,335Other resort and communities operations
revenue
    
    
    
    
    
    
    13,236
    
    
    
    60,561
    
    
    
    
    
    
    
    73,797Management fees
    
    
    58,360
    
    
    
    
    
    
    
    
    
    
    
    (58,360
    )
    
    
    Equity income from subsidiaries
    
    
    52,045
    
    
    
    
    
    
    
    
    
    
    
    (52,045
    )
    
    
    Interest income
    
    
    1,379
    
    
    
    17,294
    
    
    
    16,125
    
    
    
    
    
    
    
    34,798Gain on sales of notes receivable
    
    
    
    
    
    
    25,226
    
    
    
    
    
    
    
    
    
    
    
    25,226111,784
    
    
    
    110,763
    
    
    
    572,014
    
    
    
    (110,405
    )
    
    
    684,156COSTS AND EXPENSESCost of real estate sales
    
    
    
    
    
    
    15,955
    
    
    
    161,845
    
    
    
    
    
    
    
    177,800Cost of other resort and communities
operations
    
    
    
    
    
    
    5,056
    
    
    
    72,261
    
    
    
    
    
    
    
    77,317Management fees
    
    
    
    
    
    
    1,158
    
    
    
    57,202
    
    
    
    (58,360
    )
    
    
    Selling, general and administrative expenses
    
    
    61,934
    
    
    
    27,297
    
    
    
    211,008
    
    
    
    
    
    
    
    300,239Interest expense
    
    
    4,446
    
    
    
    2,875
    
    
    
    7,153
    
    
    
    
    
    
    
    14,474Provision for loan losses
    
    
    
    
    
    
    1,416
    
    
    
    26,171
    
    
    
    
    
    
    
    27,587Other expense, net
    
    
    1,967
    
    
    
    3,117
    
    
    
    1,123
    
    
    
    
    
    
    
    6,20768,347
    
    
    
    56,874
    
    
    
    536,763
    
    
    
    (58,360
    )
    
    
    603,624Income before minority interest and
provision
for income taxes
    
    
    43,437
    
    
    
    53,889
    
    
    
    35,251
    
    
    
    (52,045
    )
    
    
    80,532Minority interest in income of consolidated
subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,839
    
    
    
    44,839Income before provision for income taxes
    
    
    43,437
    
    
    
    53,889
    
    
    
    35,251
    
    
    
    (56,884
    )
    
    
    75,693(Benefit) provision for income taxes
    
    
    (3,114
    )
    
    
    19,502
    
    
    
    12,754
    
    
    
    
    
    
    
    29,142Net income
    
    $
    46,551
    
    
    $
    34,387
    
    
    $
    22,497
    
    
    $
    (56,884
    )
    
    $
    46,551
 27




---



##### 



Year Ended December 31, 2006Combined
    
    
    CombinedBluegreen
    
    
    Non-Guarantor
    
    
    SubsidiaryCorporation
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedREVENUESSales of real estate
    
    $
    
    
    
    $
    58,568
    
    
    $
    504,578
    
    
    $
    
    
    
    $
    563,146Other resort and communities operations
revenue
    
    
    
    
    
    
    14,198
    
    
    
    49,412
    
    
    
    
    
    
    
    63,610Management fees
    
    
    57,667
    
    
    
    
    
    
    
    
    
    
    
    (57,667
    )
    
    
    Equity income from subsidiaries
    
    
    26,572
    
    
    
    
    
    
    
    
    
    
    
    (26,572
    )
    
    
    Interest income
    
    
    1,768
    
    
    
    24,753
    
    
    
    14,244
    
    
    
    
    
    
    
    40,765Gain on sales of notes receivable
    
    
    
    
    
    
    5,852
    
    
    
    
    
    
    
    
    
    
    
    5,85286,007
    
    
    
    103,371
    
    
    
    568,234
    
    
    
    (84,239
    )
    
    
    673,373COSTS AND EXPENSESCost of real estate sales
    
    
    
    
    
    
    16,134
    
    
    
    162,920
    
    
    
    
    
    
    
    179,054Cost of other resort and communities
operations
    
    
    
    
    
    
    4,913
    
    
    
    48,280
    
    
    
    
    
    
    
    53,193Management fees
    
    
    
    
    
    
    844
    
    
    
    56,823
    
    
    
    (57,667
    )
    
    
    Selling, general and administrative expenses
    
    
    48,158
    
    
    
    29,953
    
    
    
    278,878
    
    
    
    
    
    
    
    356,989Interest expense
    
    
    4,853
    
    
    
    4,106
    
    
    
    9,826
    
    
    
    
    
    
    
    18,785Other expense, net
    
    
    1,194
    
    
    
    1,193
    
    
    
    474
    
    
    
    
    
    
    
    2,86154,205
    
    
    
    57,143
    
    
    
    557,201
    
    
    
    (57,667
    )
    
    
    610,882Income before minority interest and
provision
for income taxes
    
    
    31,802
    
    
    
    46,228
    
    
    
    11,033
    
    
    
    (26,572
    )
    
    
    62,491Minority interest in income of consolidated
subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,319
    
    
    
    47,319Income before provision for income
taxes
    
    
    31,802
    
    
    
    46,228
    
    
    
    11,033
    
    
    
    (33,891
    )
    
    
    55,172Provision for income taxes
    
    
    1,985
    
    
    
    14,681
    
    
    
    4,195
    
    
    
    
    
    
    
    20,861Income before cumulative effect of change
in accounting principle
    
    
    29,817
    
    
    
    31,547
    
    
    
    6,838
    
    
    
    (33,891
    )
    
    
    34,311Cumulative effect of change in accounting
principle, net of tax
    
    
    
    
    
    
    (1,942
    )
    
    
    (3,736
    )
    
    
    
    
    
    
    (5,678
    )Minority interest in income of cumulative
effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,184
    
    
    
    1,184Net income
    
    $
    29,817
    
    
    $
    29,605
    
    
    $
    3,102
    
    
    $
    (32,707
    )
    
    $
    29,817
 28




---



##### 



Year Ended December 31, 2007Combined
    
    
    CombinedBluegreen
    
    
    Non-Guarantor
    
    
    SubsidiaryCorporation
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedREVENUESSales of real estate
    
    $
    
    
    
    $
    56,354
    
    
    $
    526,404
    
    
    $
    
    
    
    $
    582,758Other resort
and communities operations
revenue
    
    
    
    
    
    
    13,268
    
    
    
    54,143
    
    
    
    
    
    
    
    67,411Management fees
    
    
    69,182
    
    
    
    
    
    
    
    
    
    
    
    (69,182
    )
    
    
    Equity income from subsidiaries
    
    
    25,381
    
    
    
    
    
    
    
    
    
    
    
    (25,381
    )
    
    
    Interest income
    
    
    3,054
    
    
    
    28,201
    
    
    
    13,448
    
    
    
    
    
    
    
    44,703Sales of notes receivable
    
    
    
    
    
    
    (3,378
    )
    
    
    
    
    
    
    
    
    
    
    (3,378
    )97,617
    
    
    
    94,445
    
    
    
    593,995
    
    
    
    (94,563
    )
    
    
    691,494COSTS AND EXPENSESCost of real estate sales
    
    
    
    
    
    
    12,965
    
    
    
    165,766
    
    
    
    
    
    
    
    178,731Cost of other resort and
communities operations
    
    
    
    
    
    
    4,507
    
    
    
    45,475
    
    
    
    
    
    
    
    49,982Management fees
    
    
    
    
    
    
    9,782
    
    
    
    59,400
    
    
    
    (69,182
    )
    
    
    Selling, general and
administrative expenses
    
    
    47,118
    
    
    
    32,481
    
    
    
    297,952
    
    
    
    
    
    
    
    377,551Interest expense
    
    
    18,912
    
    
    
    5,360
    
    
    
    
    
    
    
    
    
    
    
    24,272Other expense (income), net
    
    
    382
    
    
    
    (133
    )
    
    
    1,494
    
    
    
    
    
    
    
    1,74366,412
    
    
    
    64,962
    
    
    
    570,087
    
    
    
    (69,182
    )
    
    
    632,279Income before minority interest and
provision for income taxes
    
    
    31,205
    
    
    
    29,483
    
    
    
    23,908
    
    
    
    (25,381
    )
    
    
    59,215Minority interest in income of
consolidated subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,721
    
    
    
    47,721Income before provision for income
taxes
    
    
    31,205
    
    
    
    29,483
    
    
    
    23,908
    
    
    
    (33,102
    )
    
    
    51,494(Benefit) provision for income taxes
    
    
    (721
    )
    
    
    11,203
    
    
    
    9,086
    
    
    
    
    
    
    
    19,568Net income
    
    $
    31,926
    
    
    $
    18,280
    
    
    $
    14,822
    
    
    $
    (33,102
    )
    
    $
    31,926
 29




---



##### 



CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(dollars in thousands)
 Year Ended December 31, 2005Combined
    
    
    CombinedBluegreen
    
    
    Non-Guarantor
    
    
    SubsidiaryCorporation
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    ConsolidatedOperating activities:Net cash (used) provided by operating activities
    
    $
    (10,409
    )
    
    $
    12,777
    
    
    $
    93,157
    
    
    $
    95,525Investing activities:Cash received from retained interests in notes receivable
sold
    
    
    
    
    
    
    11,016
    
    
    
    
    
    
    
    11,016Investment in statutory business trust
    
    
    (1,780
    )
    
    
    
    
    
    
    
    
    
    
    (1,780
    )Installment payments on business acquisition
    
    
    
    
    
    
    
    
    
    
    (675
    )
    
    
    (675
    )Purchases of property and equipment
    
    
    (5,112
    )
    
    
    (216
    )
    
    
    (11,396
    )
    
    
    (16,724
    )Proceeds from sales of property and equipment
    
    
    
    
    
    
    
    
    
    
    22
    
    
    
    22Net cash (used) provided by investing activities
    
    
    (6,892
    )
    
    
    10,800
    
    
    
    (12,049
    )
    
    
    (8,141
    )Financing activities:Proceeds from borrowings collateralized by notes
receivable
    
    
    
    
    
    
    11,966
    
    
    
    12,806
    
    
    
    24,772Payments on borrowings collateralized by notes receivable
    
    
    
    
    
    
    (37,743
    )
    
    
    (26,971
    )
    
    
    (64,714
    )Proceeds from borrowings under line-of-credit facilities
and
notes payable
    
    
    
    
    
    
    
    
    
    
    26,382
    
    
    
    26,382Payments under line-of-credit facilities and notes payable
    
    
    (1,071
    )
    
    
    (1,113
    )
    
    
    (89,887
    )
    
    
    (92,071
    )Payments on 10.50% senior secured notes payable
    
    
    (55,000
    )
    
    
    
    
    
    
    
    
    
    
    (55,000
    )Proceeds from issuance of junior subordinated debentures
    
    
    59,280
    
    
    
    
    
    
    
    
    
    
    
    59,280Payment of debt issuance costs
    
    
    (1,862
    )
    
    
    (37
    )
    
    
    (1,401
    )
    
    
    (3,300
    )Proceeds from exercise of employee and director stock
options
    
    
    1,406
    
    
    
    
    
    
    
    
    
    
    
    1,406Net cash provided (used) by financing activities
    
    
    2,753
    
    
    
    (26,927
    )
    
    
    (79,071
    )
    
    
    (103,245
    )Net (decrease) increase in cash and cash equivalents
    
    
    (14,548
    )
    
    
    (3,350
    )
    
    
    2,037
    
    
    
    (15,861
    )Cash and cash equivalents at beginning of period
    
    
    70,256
    
    
    
    18,793
    
    
    
    11,516
    
    
    
    100,565Cash and cash equivalents at end of period
    
    
    55,708
    
    
    
    15,443
    
    
    
    13,553
    
    
    
    84,704Restricted cash and cash equivalents at end of period
    
    
    (173
    )
    
    
    (6,709
    )
    
    
    (11,439
    )
    
    
    (18,321
    )Unrestricted cash and cash equivalents at end of period
    
    $
    55,535
    
    
    $
    8,734
    
    
    $
    2,114
    
    
    $
    66,383
 30




---



##### 



Year Ended December 31, 2006Combined
    
    
    CombinedBluegreen
    
    
    Non-Guarantor
    
    
    SubsidiaryCorporation
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    ConsolidatedOperating activities:Net cash (used) provided by operating activities
    
    $
    (41,538
    )
    
    $
    (13,051
    )
    
    $
    63,015
    
    
    $
    8,426Investing activities:Cash received from retained interests in notes receivable
sold
    
    
    
    
    
    
    30,032
    
    
    
    
    
    
    
    30,032Investments in statutory business trusts
    
    
    (928
    )
    
    
    
    
    
    
    
    
    
    
    (928
    )Purchases of property and equipment
    
    
    (7,180
    )
    
    
    (68
    )
    
    
    (17,488
    )
    
    
    (24,736
    )Proceeds from sales of property and equipment
    
    
    
    
    
    
    
    
    
    
    93
    
    
    
    93Net cash (used) provided by investing activities
    
    
    (8,108
    )
    
    
    29,964
    
    
    
    (17,395
    )
    
    
    4,461Financing activities:Proceeds from borrowings collateralized by notes
receivable
    
    
    
    
    
    
    68,393
    
    
    
    
    
    
    
    68,393Payments on borrowings collateralized by notes receivable
    
    
    
    
    
    
    (81,303
    )
    
    
    (3,811
    )
    
    
    (85,114
    )Proceeds from borrowings under line-of-credit facilities
and notes payable
    
    
    6,500
    
    
    
    
    
    
    
    50,170
    
    
    
    56,670Payments under line-of-credit facilities and notes payable
    
    
    (7,824
    )
    
    
    (193
    )
    
    
    (86,569
    )
    
    
    (94,586
    )Proceeds from issuance of junior subordinated debentures
    
    
    30,928
    
    
    
    
    
    
    
    
    
    
    
    30,928Payment of debt issuance costs
    
    
    (1,054
    )
    
    
    (2,251
    )
    
    
    (1,133
    )
    
    
    (4,438
    )Proceeds from exercise of employee and director stock
options
    
    
    2,645
    
    
    
    
    
    
    
    
    
    
    
    2,645Distributions to minority interest
    
    
    (941
    )
    
    
    
    
    
    
    
    
    
    
    (941
    )Net cash provided (used) by financing activities
    
    
    30,254
    
    
    
    (15,354
    )
    
    
    (41,343
    )
    
    
    (26,443
    )Net (decrease) increase in cash and cash equivalents
    
    
    (19,392
    )
    
    
    1,559
    
    
    
    4,277
    
    
    
    (13,556
    )Cash and cash equivalents at beginning of period
    
    
    55,708
    
    
    
    15,443
    
    
    
    13,553
    
    
    
    84,704Cash and cash equivalents at end of period
    
    
    36,316
    
    
    
    17,002
    
    
    
    17,830
    
    
    
    71,148Restricted cash and cash equivalents at end of period
    
    
    (173
    )
    
    
    (8,478
    )
    
    
    (12,825
    )
    
    
    (21,476
    )Unrestricted cash and cash equivalents at end of period
    
    $
    36,143
    
    
    $
    8,524
    
    
    $
    5,005
    
    
    $
    49,672
 31




---



##### 



Year Ended December 31, 2007Combined
    
    
    CombinedBluegreen
    
    
    Non-Guarantor
    
    
    SubsidiaryCorporation
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    ConsolidatedOperating activities:Net cash (used) provided by operating activities
    
    $
    44,015
    
    
    $
    (62,687
    )
    
    $
    (2,449
    )
    
    $
    (21,121
    )Investing activities:Cash received from retained interests in notes receivable
sold
    
    
    
    
    
    
    35,949
    
    
    
    
    
    
    
    35,949Investments in statutory business trusts
    
    
    (619
    )
    
    
    
    
    
    
    
    
    
    
    (619
    )Purchases of property and equipment
    
    
    (4,868
    )
    
    
    (58
    )
    
    
    (10,929
    )
    
    
    (15,855
    )Proceeds from sales of property and equipment
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2Net cash (used) provided by investing activities
    
    
    (5,487
    )
    
    
    35,891
    
    
    
    (10,927
    )
    
    
    19,477Financing activities:Proceeds from borrowings collateralized by notes
receivable
    
    
    
    
    
    
    151,973
    
    
    
    
    
    
    
    151,973Payments on borrowings collateralized by notes receivable
    
    
    
    
    
    
    (117,749
    )
    
    
    (2,396
    )
    
    
    (120,145
    )Proceeds from borrowings under line-of-credit facilities
and notes payable
    
    
    
    
    
    
    
    
    
    
    147,835
    
    
    
    147,835Payments under line-of-credit facilities and notes payable
    
    
    (2,541
    )
    
    
    (89
    )
    
    
    (120,690
    )
    
    
    (123,320
    )Proceeds from issuance of junior subordinated debentures
    
    
    20,619
    
    
    
    
    
    
    
    
    
    
    
    20,619Payment of debt issuance costs
    
    
    (711
    )
    
    
    (628
    )
    
    
    (713
    )
    
    
    (2,052
    )Proceeds from exercise of employee and director stock
options
    
    
    559
    
    
    
    
    
    
    
    
    
    
    
    559Net cash provided by financing activities
    
    
    17,926
    
    
    
    33,507
    
    
    
    24,036
    
    
    
    75,469Net increase in cash and cash equivalents
    
    
    56,454
    
    
    
    6,711
    
    
    
    10,660
    
    
    
    73,825Cash and cash equivalents at beginning of period
    
    
    36,316
    
    
    
    17,002
    
    
    
    17,830
    
    
    
    71,148Cash and cash equivalents at end of period
    
    
    92,770
    
    
    
    23,713
    
    
    
    28,490
    
    
    
    144,973Restricted cash and cash equivalents at end of period
    
    
    (475
    )
    
    
    (7,810
    )
    
    
    (11,175
    )
    
    
    19,460
    )Unrestricted cash and cash equivalents at end of period
    
    $
    92,295
    
    
    $
    15,903
    
    
    $
    17,315
    
    
    $
    125,513
 32




---



##### 



13. Junior Subordinated Debentures
 Trust Preferred Securities Offerings
   Outstanding
    
    InitialAmount of
    
    Equity
    
    
    
    Fixed
    
    Variable
    
    BeginningJunior
    
    To
    
    
    
    Interest
    
    Interest
    
    OptionalSubordinated
    
    Trust
    
    Issue
    
    Rate
    
    Rate
    
    Redemption
    
    MaturityTrust
    
    Debentures
    
    (3)
    
    Date
    
    (1)
    
    (2)
    
    Date
    
    DateBluegreen Statutory 
Trust I
    
    $
    23,196
    
    
    $
    696
    
    
    3/15/05
    
    
    9.160
    %
    
    3-month LIBOR
+ 4.90%
    
    3/30/10
    
    3/30/35Bluegreen Statutory 
Trust II
    
    
    25,774
    
    
    
    774
    
    
    5/04/05
    
    
    9.158
    %
    
    3-month LIBOR
+ 4.85%
    
    7/30/10
    
    7/30/35Bluegreen Statutory 
Trust III
    
    
    10,310
    
    
    
    310
    
    
    5/10/05
    
    
    9.193
    %
    
    3-month LIBOR
+ 4.85%
    
    7/30/10
    
    7/30/35Bluegreen Statutory 
Trust IV
    
    
    15,464
    
    
    
    464
    
    
    4/24/06
    
    
    10.130
    %
    
    3-month LIBOR
+ 4.85%
    
    6/30/11
    
    6/30/36Bluegreen Statutory 
Trust V
    
    
    15,464
    
    
    
    464
    
    
    7/21/06
    
    
    10.280
    %
    
    3-month LIBOR
+ 4.85%
    
    9/30/11
    
    9/30/36Bluegreen Statutory 
Trust VI
    
    
    20,619
    
    
    
    619
    
    
    2/26/07
    
    
    9.842
    %
    
    3-month LIBOR
+ 4.80%
    
    4/30/12
    
    4/30/37$
    110,827
    
    
    $
    3,327
 
 (1)
    
    Both the trust preferred securities and junior subordinated debentures bear interest at a
fixed interest rate from the issue date through the beginning optional redemption date.(2)
    
    Both the trust preferred securities and junior subordinated debentures bear interest at a
variable interest rate from the beginning optional redemption date through the maturity date.(3)
    
    Initial equity in trust is recorded as part of other assets in our consolidated balance
sheets. 14. Fair Value of Financial Instruments
  Cash and cash equivalents:
 33




---



##### 



Contracts receivable:
 Notes receivable:
 Retained interests in notes receivable sold:
 Lines-of-credit, notes payable, receivable-backed notes payable and junior subordinated debentures:
 10.50% senior secured notes payable and junior subordinated debentures:
 December 31, 2006
    
    
    December 31, 2007Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair ValueCash and cash equivalents
    
    $
    71,148
    
    
    $
    71,148
    
    
    $
    144,973
    
    
    $
    144,973Contracts receivable, net
    
    
    23,856
    
    
    
    23,856
    
    
    
    20,532
    
    
    
    20,532Notes receivable, net
    
    
    144,251
    
    
    
    144,251
    
    
    
    160,665
    
    
    
    160,665Retained interests in notes receivable sold
    
    
    130,623
    
    
    
    130,623
    
    
    
    141,499
    
    
    
    141,499Lines-of-credit, notes payable, and receivable-
backed notes payable
    
    
    145,462
    
    
    
    145,462
    
    
    
    231,977
    
    
    
    231,97710.50% senior secured notes payable
    
    
    55,000
    
    
    
    55,275
    
    
    
    55,000
    
    
    
    54,725Junior subordinated debentures
    
    
    90,208
    
    
    
    82,141
    
    
    
    110,827
    
    
    
    103,351
 15. Common Stock and Stock Option Plans
 Shareholders Rights Plan
   34




---



##### 



Stock Option Plans
    Stock Option Awards
    
    
    Restricted Stock AwardsWeightedaverage grant dateEmployees
    
    
    Directors
    
    
    fair value
    
    
    Employees
    
    
    Directors2005
    
    
    668,000
    
    
    
    141,346
    
    
    $
    10.81
    
    
    
    
    
    
    
    5,3742006
    
    
    440,000
    
    
    
    142,785
    
    
    $
    6.58
    
    
    
    
    
    
    
    17,4972007
    
    
    
    
    
    
    136,494
    
    
    $
    5.58
    
    
    
    196,850
    
    
    
    16,696Total
    
    
    1,108,000
    
    
    
    420,625
    
    
    
    
    
    
    
    196,850
    
    
    
    39,567
  Number
    
    
    
    
    
    
    Weightedof
    
    
    
    
    
    
    Average
    
    
    Number ofShares
    
    
    Outstanding
    
    
    Exercise Price
    
    
    SharesReserved
    
    
    Options
    
    
    Per Share
    
    
    ExercisableBalance at December 31, 2005
    
    
    3,201
    
    
    
    2,010
    
    
    $
    10.65
    
    
    
    665Granted
    
    
    
    
    
    
    583
    
    
    $
    12.02Forfeited
    
    
    (86
    )
    
    
    (217
    )
    
    $
    11.20Exercised
    
    
    (312
    )
    
    
    (312
    )
    
    $
    8.48Balance at December 31, 2006
    
    
    2,803
    
    
    
    2,064
    
    
    $
    11.31
    
    
    
    481Granted
    
    
    
    
    
    
    137
    
    
    $
    11.98Forfeited
    
    
    
    
    
    
    (123
    )
    
    $
    17.05Exercised
    
    
    (140
    )
    
    
    (140
    )
    
    $
    3.99Balance at December 31, 2007
    
    
    2,663
    
    
    
    1,938
    
    
    $
    11.51
    
    
    
    579
  35




---



##### 



Weighted-
    
    
    
    
    
    
    Weighted-Average
    
    
    Weighted-
    
    
    AverageNumber
    
    
    Number of
    
    
    Remaining
    
    
    Average
    
    
    Exercise Priceof Options
    
    
    Vested Options
    
    
    Contractual Term
    
    
    Exercise Price
    
    
    (Vested Only)(In 000s)
    
    
    (In 000s)
    
    
    (In years)$2.11 - $3.00
    
    
    35
    
    
    
    35
    
    
    
    3.5
    
    
    $
    2.21
    
    
    $
    2.21$3.01 - $4.52
    
    
    423
    
    
    
    220
    
    
    
    4.8
    
    
    $
    3.47
    
    
    $
    3.45$4.53 - $6.79
    
    
    130
    
    
    
    30
    
    
    
    5.3
    
    
    $
    5.86
    
    
    $
    5.92$6.80 - $10.20
    
    
    39
    
    
    
    39
    
    
    
    1.0
    
    
    $
    8.82
    
    
    $
    8.82$10.21 - $15.31
    
    
    684
    
    
    
    114
    
    
    
    9.4
    
    
    $
    11.96
    
    
    $
    11.47$15.32 - $18.36
    
    
    627
    
    
    
    141
    
    
    
    7.6
    
    
    $
    18.29
    
    
    $
    18.041,938
    
    
    
    579
    
    
    
    7.2
    
    
    $
    11.51
    
    
    $
    9.00
 Common Stock Reserved For Future Issuance
  Upon exercise of stock options under our
employee stock option plan (1)
    
    
    2,598Upon exercise of outside director stock options
under our director stock option plan
    
    
    652,663
 
 (1)
    
    Stock options were granted to non-employee directors under our Employee Stock Option
Plan during 2005, 2006 and 2007. 16. Commitments and Contingencies
     2008
    
    $
    9,1302009
    
    
    8,1002010
    
    
    6,9372011
    
    
    4,3882012
    
    
    3,467Thereafter
    
    
    22,081Total future minimum lease payments
    
    $
    54,103
  Accounting for Contingencies
 36




---



##### 



Bluegreen Resorts
 Tennessee Tax Audit
  Shore Crest Claim
 Shore Crest Vacation Villas
II Owners Association, Inc., Bluegreen Corporation vs. Welbro Constructors, S.C., Inc. et al. Case
No.: 04-CP-26-500 Shore Crest Vacation Villas Owners Association, Inc., Bluegreen
Vacations Unlimited, Inc., as successor to Patten Resorts, Inc. and as successor to Bluegreen
Resorts, Inc. vs. Welbro Constructors Inc. et al. Case No. 04-CP-26-499
 LeisurePath Vacation Club
 Michelle Alamo, Ernest Alamo, Toniann Quinn and Terrance Quinn v. Vacation Station, LLC,
LeisurePath Vacation Club, LeisurePath, Inc., Bluegreen Corporation, Superior Court of New Jersey,
Bergen County, Docket No. L-6716-05
 37




---



##### 



Accounting for Contingencies
 Bluegreen Communities
 Mountain Lakes Mineral Rights
 Betty Yvon
Lesley et a1 v. Bluff Dale Development Corporation, Bluegreen Southwest One. L.P.et al. Betty Yvon Lesley et a1 v. Bluff Dale Development Corporation, Bluegreen
Southwest One. L.P.et al. Bluegreen Southwest One, LP et al.
v. Betty Yvon Lesley et al. Lesley Property Owners Association of Mountain Lakes Ranch, Inc.
v. Bluegreen Southwest One, L. P., et al. th
 17. Income Taxes
  Year Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2007Federal:Current
    
    $
    9,418
    
    
    $
    7,397
    
    
    $
    5,124Deferred
    
    
    15,600
    
    
    
    11,913
    
    
    
    12,74925,018
    
    
    
    19,310
    
    
    
    17,873State and other:Current
    
    
    2,745
    
    
    
    629
    
    
    
    1,976Deferred
    
    
    1,379
    
    
    
    922
    
    
    
    (281
    )4,124
    
    
    
    1,551
    
    
    
    1,695Total
    
    $
    29,142
    
    
    $
    20,861
    
    
    $
    19,568
 38




---



##### 



December 31,
    
    
    December 31,
    
    
    December 31,2005
    
    
    2006
    
    
    2007Income tax expense at statutory rate
    
    $
    25,018
    
    
    $
    19,310
    
    
    $
    18,024Effect of state taxes, net of federal tax
    
    
    
    
    
    
    1,551
    
    
    
    1,004benefit
    
    
    4,124Other
    
    
    
    
    
    
    
    
    
    
    540$
    29,142
    
    
    $
    20,861
    
    
    $
    19,568
  December 31,
    
    
    December 31,2006
    
    
    2007Deferred federal and state tax liabilities (assets):Installment sales treatment of notes
    
    $
    196,687
    
    
    $
    234,528Deferred federal and state loss carryforwards/AMT credits
    
    
    (120,609
    )
    
    
    (146,889
    )Book over tax carrying value of retained interests in notes
receivable sold
    
    
    15,565
    
    
    
    17,648Book reserves for loan losses and inventory
    
    
    (7,758
    )
    
    
    (9,070
    )Tax over book depreciation
    
    
    5,780
    
    
    
    4,862Unrealized gains on retained interests in notes receivable
sold (see Note 6)
    
    
    7,742
    
    
    
    5,739Deferral of VOI sales under SFAS No. 152
    
    
    (4,365
    )
    
    
    (5,016
    )Other
    
    
    (5,418
    )
    
    
    (3,440
    )Deferred income taxes
    
    $
    87,624
    
    
    $
    98,362Total deferred federal and state tax liabilities
    
    $
    229,085
    
    
    $
    266,590Total deferred federal and state tax assets
    
    
    (141,461
    )
    
    
    (168,228
    )Deferred income taxes
    
    $
    87,624
    
    
    $
    98,362
     Accounting for Uncertainty in Income Taxes-an
Interpretation of FASB Statement No. 109
 39




---



##### 



18. Employee Retirement Savings Plan and Other Employee Matters
   19. Business Segments
    40




---



##### 



Bluegreen
    
    
    BluegreenResorts
    
    
    Communities
    
    
    TotalsAs of and for the year ended December 31, 2005:Sales of real estate
    
    $
    358,240
    
    
    $
    192,095
    
    
    $
    550,335Other resort and communities operations revenue
    
    
    64,276
    
    
    
    9,521
    
    
    
    73,797Depreciation expense
    
    
    7,161
    
    
    
    1,684
    
    
    
    8,845Field operating profit
    
    
    59,578
    
    
    
    47,227
    
    
    
    106,805Inventory, net
    
    
    173,338
    
    
    
    67,631
    
    
    
    240,969Notes Receivable, net
    
    
    120,592
    
    
    
    7,191
    
    
    
    127,783Goodwill
    
    
    4,291
    
    
    
    
    
    
    
    4,291As of and for the year ended December 31, 2006:Sales of real estate
    
    $
    399,105
    
    
    $
    164,041
    
    
    $
    563,146Other resort and communities operations revenue
    
    
    51,688
    
    
    
    11,922
    
    
    
    63,610Depreciation expense
    
    
    8,322
    
    
    
    1,641
    
    
    
    9,963Field operating profit
    
    
    53,937
    
    
    
    35,824
    
    
    
    89,761Inventory, net
    
    
    233,290
    
    
    
    116,043
    
    
    
    349,333Notes Receivable, net
    
    
    137,509
    
    
    
    6,742
    
    
    
    144,251Goodwill
    
    
    4,291
    
    
    
    
    
    
    
    4,291As of and for the year ended December 31, 2007:Sales of real estate
    
    $
    453,541
    
    
    $
    129,217
    
    
    $
    582,758Other resort and communities operations revenue
    
    
    53,624
    
    
    
    13,787
    
    
    
    67,411Depreciation expense
    
    
    8,356
    
    
    
    1,715
    
    
    
    10,071Field operating profit
    
    
    69,909
    
    
    
    23,633
    
    
    
    93,542Inventory, net
    
    
    288,969
    
    
    
    145,999
    
    
    
    434,968Notes Receivable, net
    
    
    155,591
    
    
    
    5,074
    
    
    
    160,665Goodwill
    
    
    4,291
    
    
    
    
    
    
    
    4,291
 Reconciliations to Consolidated Amounts
  Year Ended December 31,2005
    
    
    2006
    
    
    2007Field operating profit for reportable segments
    
    $
    106,805
    
    
    $
    89,761
    
    
    $
    93,542Interest income
    
    
    34,798
    
    
    
    40,765
    
    
    
    44,703Sales of notes receivable
    
    
    25,226
    
    
    
    5,852
    
    
    
    (3,378
    )Other expense, net
    
    
    (6,207
    )
    
    
    (2,861
    )
    
    
    (1,743
    )Corporate general and administrative expenses
    
    
    (38,029
    )
    
    
    (52,241
    )
    
    
    (49,637
    )Interest expense
    
    
    (14,474
    )
    
    
    (18,785
    )
    
    
    (24,272
    )Provision for loan losses
    
    
    (27,587
    )
    
    
    
    
    
    
    Consolidated income before minority interest and
provision for income taxes
    
    $
    80,532
    
    
    $
    62,491
    
    
    $
    59,215
  Year Ended December 31,2005
    
    
    2006
    
    
    2007Depreciation expense for reportable segments
    
    $
    8,845
    
    
    $
    9,963
    
    
    $
    10,071Depreciation expense for corporate fixed assets
    
    
    3,487
    
    
    
    4,413
    
    
    
    4,418Consolidated depreciation expense
    
    $
    12,332
    
    
    $
    14,376
    
    
    $
    14,489
 41




---



##### 



December 31,2006
    
    
    2007Notes receivable for reportable segments
    
    
    144,251
    
    
    
    160,665Inventory for reportable segments
    
    
    349,333
    
    
    
    434,968Goodwill
    
    
    4,291
    
    
    
    4,291Assets not allocated to reportable segments
    
    
    356,337
    
    
    
    439,654Total assets
    
    $
    854,212
    
    
    $
    1,039,578
 Geographic Information
  Year Ended December 31,2005
    
    
    2006
    
    
    2007United States
    
    $
    539,131
    
    
    $
    554,904
    
    
    $
    575,309Aruba
    
    
    11,204
    
    
    
    8,242
    
    
    
    7,449Consolidated totals
    
    $
    550,335
    
    
    $
    563,146
    
    
    $
    582,758
  December 31,2006
    
    
    2007United States
    
    $
    344,817
    
    
    $
    431,160Aruba
    
    
    4,516
    
    
    
    3,808Consolidated totals
    
    $
    349,333
    
    
    $
    434,968
 20. Quarterly Financial Information (Unaudited)
  For the Three Months EndedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2006
    
    
    2006
    
    
    2006
    
    
    2006Sales of real estate
    
    $
    121,760
    
    
    $
    141,947
    
    
    $
    172,549
    
    
    $
    126,890Gross profit
    
    
    76,538
    
    
    
    92,925
    
    
    
    125,822
    
    
    
    88,807Income before cumulative effect of
change in accounting principle
    
    
    4,031
    
    
    
    6,580
    
    
    
    21,907
    
    
    
    1,793Cumulative effect of change in
accounting principle, net of tax
and minority interest
    
    
    (4,494
    )
    
    
    
    
    
    
    
    
    
    
    Net (loss) income
    
    $
    (463
    )
    
    $
    6,580
    
    
    $
    21,907
    
    
    $
    1,793Income before cumulative effect of
change in accounting principle per
common share:Basic
    
    $
    0.13
    
    
    $
    0.22
    
    
    $
    0.72
    
    
    $
    0.06Diluted
    
    $
    0.13
    
    
    $
    0.21
    
    
    $
    0.71
    
    
    $
    0.06Net (loss) income per common share:Basic
    
    $
    (0.02
    )
    
    $
    0.22
    
    
    $
    0.72
    
    
    $
    0.06Diluted
    
    $
    (0.01
    )
    
    $
    0.21
    
    
    $
    0.71
    
    
    $
    0.06
 42




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##### 



For the Three Months EndedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2007
    
    
    2007
    
    
    2007
    
    
    2007Sales of real estate
    
    $
    122,022
    
    
    $
    143,274
    
    
    $
    180,870
    
    
    $
    136,592Gross profit
    
    
    85,290
    
    
    
    96,969
    
    
    
    125,310
    
    
    
    96,458Net income
    
    
    5,333
    
    
    
    4,092
    
    
    
    13,953
    
    
    
    8,548Net income per common share:Basic
    
    $
    0.17
    
    
    $
    0.13
    
    
    $
    0.45
    
    
    $
    0.28Diluted
    
    $
    0.17
    
    
    $
    0.13
    
    
    $
    0.45
    
    
    $
    0.27
 21. Subsequent Events
    43




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##### 



Report of Independent Registered Public Accounting Firm
 
    Share-Based Payment Accounting for Real Estate
Time-Sharing Transactions
  /s/ Ernst & Young  LLPCertified Public Accountants 
 44