Exhibit 99.1
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 BLUEGREEN CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
 December 31,
    
    
    December 31,2009
    
    
    2010ASSETSUnrestricted cash and cash equivalents
    
    $
    70,491
    
    
    $
    72,085Restricted cash ($5,198 and $41,243 held by VIEs at December 31, 2009 and
December 31, 2010, respectively)
    
    
    23,908
    
    
    
    53,922Contracts receivable, net
    
    
    4,826
    
    
    
    1,843Notes receivable including gross securitized notes of $169,041 and $533,343
(net of allowance of $46,826 and $143,160 at December 31,
2009 and 2010, respectively)
    
    
    309,307
    
    
    
    568,985Prepaid expenses
    
    
    7,884
    
    
    
    4,882Other assets
    
    
    35,054
    
    
    
    54,947Inventory
    
    
    515,917
    
    
    
    419,877Retained interests in notes receivable sold
    
    
    78,313
    
    
    
    Property and equipment, net
    
    
    85,565
    
    
    
    79,391Total assets
    
    $
    1,131,265
    
    
    $
    1,255,932LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesAccounts payable
    
    $
    14,846
    
    
    $
    8,243Accrued liabilities and other
    
    
    51,083
    
    
    
    60,518Deferred income
    
    
    14,883
    
    
    
    17,550Deferred income taxes
    
    
    87,797
    
    
    
    25,605Receivable-backed notes payable  recourse ($0 and $22,759 held by VIEs at
December 31, 2009 and 2010, respectively)
    
    
    111,526
    
    
    
    135,660Receivable-backed notes payable  non-recourse (held by VIEs)
    
    
    131,302
    
    
    
    436,271Lines-of-credit and notes payable
    
    
    185,781
    
    
    
    142,120Junior subordinated debentures
    
    
    110,827
    
    
    
    110,827Total liabilities
    
    $
    708,045
    
    
    $
    936,794Commitments and contingencies (Note 12)Shareholders EquityPreferred stock, $.01 par value, 1,000 shares authorized; none issued
    
    
    
    
    
    
    Common stock, $.01 par value, 140,000 shares authorized; 34,099 and 34,083
shares issued at December 31, 2009 and 2010, respectively
    
    
    341
    
    
    
    341Additional paid-in capital
    
    
    187,006
    
    
    
    189,580Treasury stock, 2,756 common shares at both December 31, 2009 and 2010, at cost
    
    
    (12,885
    )
    
    
    (12,885
    )Accumulated other comprehensive loss, net of income taxes
    
    
    (608
    )
    
    
    Retained earnings
    
    
    212,376
    
    
    
    107,129Total Bluegreen Corporation shareholders equity
    
    
    386,230
    
    
    
    284,165Non-controlling interest
    
    
    36,990
    
    
    
    34,973Total shareholders equity
    
    
    423,220
    
    
    
    319,138Total liabilities and shareholders equity
    
    $
    1,131,265
    
    
    $
    1,255,932
 See accompanying notes to consolidated financial statements.




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##### 



BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 Year Ended December
    
    
    Year Ended December 31,
    
    
    Year Ended December 31,31, 2008
    
    
    2009
    
    
    2010Revenues:Gross sales of real estate
    
    $
    542,632
    
    
    $
    250,573
    
    
    $
    231,680Estimated uncollectible VOI notes receivable
    
    
    (75,847
    )
    
    
    (31,205
    )
    
    
    (94,164
    )Gains on sales of VOI notes receivable
    
    
    8,245
    
    
    
    
    
    
    
    Sales of real estate
    
    
    475,030
    
    
    
    219,368
    
    
    
    137,516Other resort and communities operations revenue
    
    
    62,170
    
    
    
    58,604
    
    
    
    68,732Fee-based sales commission revenue
    
    
    
    
    
    
    20,057
    
    
    
    52,966Interest income
    
    
    57,831
    
    
    
    69,337
    
    
    
    106,463595,031
    
    
    
    367,366
    
    
    
    365,677Costs and expenses:Cost of real estate sales
    
    
    130,267
    
    
    
    91,892
    
    
    
    93,079Cost of other resort and communities operations
    
    
    45,284
    
    
    
    43,469
    
    
    
    47,554Selling, general and administrative expenses
    
    
    365,503
    
    
    
    185,536
    
    
    
    214,509Interest expense
    
    
    20,888
    
    
    
    36,132
    
    
    
    65,795Other expense, net
    
    
    1,637
    
    
    
    1,810
    
    
    
    2,839Restructuring charges
    
    
    15,617
    
    
    
    
    
    
    
    Goodwill impairment charge
    
    
    8,502
    
    
    
    
    
    
    
    587,698
    
    
    
    358,839
    
    
    
    423,776Income (loss) before non-controlling interest, provision
(benefit) for income taxes and discontinued operations
    
    
    7,333
    
    
    
    8,527
    
    
    
    (58,099
    )Provision (benefit) for income taxes
    
    
    753
    
    
    
    (2,640
    )
    
    
    (22,227
    )Income (loss ) from continuing operations
    
    
    6,580
    
    
    
    11,167
    
    
    
    (35,872
    )Loss from discontinued operations
    
    
    (1
    )
    
    
    (7,267
    )
    
    
    Net income (loss)
    
    
    6,579
    
    
    
    3,900
    
    
    
    (35,872
    )Less: Net income attributable to non-controlling interest
    
    
    7,095
    
    
    
    7,472
    
    
    
    8,094Net loss attributable to Bluegreen Corporation
    
    $
    (516
    )
    
    $
    (3,572
    )
    
    $
    (43,966
    )Income (loss) from continuing operations attributable to Bluegreen Corporation per common share  Basic:(Loss) earnings per share from continuing operations
attributable to Bluegreen shareholders
    
    $
    (0.02
    )
    
    $
    0.12
    
    
    $
    (1.41
    )Loss per share for discontinued operations
    
    
    
    
    
    
    (0.23
    )
    
    
    Loss per share attributable to Bluegreen shareholders
    
    $
    (0.02
    )
    
    $
    (0.11
    )
    
    $
    (1.41
    )Income (loss) from continuing operations attributable to Bluegreen Corporation per common share  Diluted(Loss) earnings per share from continuing operations
attributable to Bluegreen shareholders
    
    $
    (0.02
    )
    
    $
    0.12
    
    
    $
    (1.41
    )Loss per share for discontinued operations
    
    
    
    
    
    
    (0.23
    )
    
    
    Loss per share attributable to Bluegreen shareholders
    
    $
    (0.02
    )
    
    $
    (0.11
    )
    
    $
    (1.41
    )Weighted average number of common shares:Basic
    
    
    31,241
    
    
    
    31,088
    
    
    
    31,165Diluted
    
    
    31,241
    
    
    
    31,100
    
    
    
    31,165
 See accompanying notes to consolidated financial statements.




---



##### 



BLUEGREEN CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(in thousands)
 Equity Attributable to Bluegreen ShareholdersAccumulatedOtherComprehensiveIncome (Loss), net
    
    
    Equity AttributableCommon
    
    
    Additional
    
    
    
    
    
    
    Treasury
    
    
    of Income
    
    
    to Non-ControllingCommon Shares Issued
    
    
    
    
    Total
    
    
    Stock
    
    
    Paid-in-Capital
    
    
    Retained Earnings
    
    
    Stock, at Cost
    
    
    Taxes
    
    
    Interests33,957
    
    
    Balance at December 31, 2007
    
    $
    407,531
    
    
    $
    339
    
    
    $
    178,144
    
    
    $
    209,702
    
    
    $
    (12,885
    )
    
    $
    9,808
    
    
    $
    22,423
    
    
    Net income (loss)
    
    
    6,579
    
    
    
    
    
    
    
    
    
    
    
    (516
    )
    
    
    
    
    
    
    
    
    
    
    7,095
    
    
    Other comprehensive loss
    
    
    (6,635
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,635
    )
    
    
    
    
    
    Stock compensation
    
    
    4,378
    
    
    
    
    
    
    
    4,378
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39
    
    
    Shares issued upon exercise of
stock options
    
    
    132
    
    
    
    
    
    
    
    132
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,996
    
    
    Balance at December 31, 2008
    
    
    411,985
    
    
    
    339
    
    
    
    182,654
    
    
    
    209,186
    
    
    
    (12,885
    )
    
    
    3,173
    
    
    
    29,518
    
    
    Net income (loss)
    
    
    3,900
    
    
    
    
    
    
    
    
    
    
    
    (3,572
    )
    
    
    
    
    
    
    
    
    
    
    7,472
    
    
    Other comprehensive income
    
    
    405
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    405
    
    
    
    
    
    
    Stock compensation
    
    
    4,404
    
    
    
    
    
    
    
    4,404
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103
    
    
    Vesting of restricted stock
    
    
    2
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock issuance costs
    
    
    (52
    )
    
    
    
    
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cummulative effect (See Note 5)
    
    
    2,576
    
    
    
    
    
    
    
    
    
    
    
    6,762
    
    
    
    
    
    
    
    (4,186
    )
    
    
    34,099
    
    
    Balance at December 31, 2009
    
    
    423,220
    
    
    
    341
    
    
    
    187,006
    
    
    
    212,376
    
    
    
    (12,885
    )
    
    
    (608
    )
    
    
    36,990
    
    
    Impact of adoption of ASU
2009-16 and 2009-17
    
    
    (60,673
    )
    
    
    
    
    
    
    
    
    
    
    (61,281
    )
    
    
    
    
    
    
    608
    
    
    
    34,099
    
    
    Balance at January 1, 2010
    
    
    362,547
    
    
    
    341
    
    
    
    187,006
    
    
    
    151,095
    
    
    
    (12,885
    )
    
    
    
    
    
    
    36,990
    
    
    Net income (loss)
    
    
    (35,872
    )
    
    
    
    
    
    
    
    
    
    
    (43,966
    )
    
    
    
    
    
    
    
    
    
    
    8,094
    
    
    Member distibution to
non-controlling interest
holder
    
    
    (10,111
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,111
    )(16
    )
    
    Stock compensation
    
    
    2,574
    
    
    
    
    
    
    
    2,574
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,083
    
    
    Balance at December 31, 2010
    
    $
    319,138
    
    
    $
    341
    
    
    $
    189,580
    
    
    $
    107,129
    
    
    $
    (12,885
    )
    
    $
    
    
    
    $
    34,973
 See accompanying notes to consolidated financial statements.




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##### 



BLUEGREEN CORPORATION CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
 Year Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010Operating activities:Net income (loss)
    
    $
    6,579
    
    
    $
    3,900
    
    
    $
    (35,872
    )Adjustments to reconcile net income (loss) to net cash (used in) provided
by operating activities:Non- cash communities inventory impairment
    
    
    5,204
    
    
    
    13,159
    
    
    
    54,564Other non-cash charges
    
    
    
    
    
    
    
    
    
    
    1,623Non-cash stock compensation expense
    
    
    4,378
    
    
    
    4,406
    
    
    
    2,574Depreciation and amortization
    
    
    15,084
    
    
    
    15,579
    
    
    
    14,910Gain on sales of notes receivable
    
    
    (8,245
    )
    
    
    
    
    
    
    Loss on disposal of property and equipment
    
    
    5,140
    
    
    
    173
    
    
    
    427Loss on sales of golf courses
    
    
    
    
    
    
    10,544
    
    
    
    Estimated uncollectible notes receivable
    
    
    76,079
    
    
    
    31,641
    
    
    
    94,554Benefit for deferred income taxes
    
    
    (2,804
    )
    
    
    (3,409
    )
    
    
    (27,238
    )Interest accretion on retained interests in notes receivable sold
    
    
    (17,729
    )
    
    
    (19,186
    )
    
    
    Proceeds from sales of notes receivable
    
    
    55,705
    
    
    
    
    
    
    
    Goodwill impairment
    
    
    8,502
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Contracts receivable
    
    
    13,080
    
    
    
    2,626
    
    
    
    2,983Notes receivable
    
    
    (313,661
    )
    
    
    (21,332
    )
    
    
    23,033Prepaid expenses and other assets
    
    
    3,898
    
    
    
    (5,080
    )
    
    
    (2,840
    )Changes in restricted cash
    
    
    (1,754
    )
    
    
    (2,694
    )
    
    
    6,504Inventory
    
    
    (53,470
    )
    
    
    6,178
    
    
    
    27,090Accounts payable, accrued liabilities and other
    
    
    (26,407
    )
    
    
    (21,930
    )
    
    
    1,628Net cash (used in) provided by operating activities
    
    
    (230,421
    )
    
    
    14,575
    
    
    
    163,940Investing activities:Cash received from retained interests in notes receivable sold
    
    
    44,884
    
    
    
    43,741
    
    
    
    Business acquisitions
    
    
    (6,105
    )
    
    
    
    
    
    
    (2,208
    )Purchases of property and equipment
    
    
    (22,883
    )
    
    
    (7,521
    )
    
    
    (3,702
    )Proceeds from sales of property and equipment
    
    
    58
    
    
    
    13
    
    
    
    Proceeds from sales of golf courses, net
    
    
    
    
    
    
    9,414
    
    
    
    Net cash provided by (used in) investing activities
    
    
    15,954
    
    
    
    45,647
    
    
    
    (5,910
    )Financing activities:Proceeds from borrowings collateralized by notes receivable
    
    
    287,478
    
    
    
    81,683
    
    
    
    196,985Payments on borrowings collateralized by notes receivable
    
    
    (94,964
    )
    
    
    (90,180
    )
    
    
    (279,383
    )Proceeds from borrowings under line-of-credit facilities and notes
payable
    
    
    105,832
    
    
    
    11,861
    
    
    
    Payments under line-of-credit facilities and notes payable
    
    
    (90,907
    )
    
    
    (48,944
    )
    
    
    (56,861
    )Payments on 10.50% senior secured notes
    
    
    (55,000
    )
    
    
    
    
    
    
    Payments of debt issuance costs
    
    
    (3,056
    )
    
    
    (4,660
    )
    
    
    (7,066
    )Stock issuance cost
    
    
    
    
    
    
    (52
    )
    
    
    Distributions to non-controlling interests
    
    
    
    
    
    
    
    
    
    
    (10,111
    )Proceeds from exercise of employee and director stock options
    
    
    132
    
    
    
    
    
    
    
    Net cash provided by (used in) financing activities
    
    
    149,515
    
    
    
    (50,292
    )
    
    
    (156,436
    )Net increase (decrease) in cash and cash equivalents
    
    
    (64,952
    )
    
    
    9,930
    
    
    
    1,594Unrestricted cash and cash equivalents at beginning of period
    
    
    125,513
    
    
    
    60,561
    
    
    
    70,491Unrestricted cash and cash equivalents at end of period
    
    $
    60,561
    
    
    $
    70,491
    
    
    $
    72,085
 See accompanying notes to consolidated financial statements.




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##### 



BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS(Continued)
(in thousands)
 Year Ended
    
    
    Year Ended December
    
    
    Year Ended DecemberDecember 31, 2008
    
    
    31, 2009
    
    
    31, 2010Supplemental schedule of non  cash operating, investing and financing activities:Inventory acquired through financing
    
    $
    10,132
    
    
    $
    
    
    
    $
    13,200Property and equipment acquired through financing
    
    $
    4,639
    
    
    $
    
    
    
    $
    Retained interests in notes receivable sold
    
    $
    9,624
    
    
    $
    (11,078
    )
    
    $
    Net change in unrealized gains and losses in retained interests in sold
notes receivable sold
    
    $
    (10,391
    )
    
    $
    369
    
    
    $
    Supplemental schedule of operating cash flow information:Interest paid, net of amounts capitalized
    
    $
    21,813
    
    
    $
    36,372
    
    
    $
    56,927Income taxes paid
    
    $
    5,390
    
    
    $
    2,475
    
    
    $
    1,666
 See accompanying notes to consolidated financial statements.




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##### 



BLUEGREEN CORPORATION
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Significant Accounting Policies
 Organization
 ®
   Principles of Consolidation and Basis of Presentation
 Consolidations (Topic 810)
 Transfers and
Servicing (ASC 860): Accounting for Transfers of Financial Assets Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises Involved
with Variable Interest Entities




---



##### 



Consolidated Statements of Operations
 Use of Estimates
  Cash and Cash Equivalents
   Revenue Recognition and Contracts Receivable
 Real Estate




---



##### 



Activity
    
    Revenue is recognized when:Fee-based sales commissions
    
    The sale transaction with the VOI purchaser is
consummated in accordance with the terms of the
agreement with the third-party developer and the
related consumer rescission period has passed.Resort management and service fees
    
    Management services are rendered (1).Resort title fees
    
    Escrow amounts are released and title documents are
completed.Rental and sampler program
    
    Guests complete stays at the resorts. Rental and
sampler program proceeds are classified as a
reduction to cost of other resort and communities
operations.Communities realty commissions
    
    Sales of third-party-owned real estate are completed.Golf course and ski hill daily fees
    
    Services are provided.
 
 (1)
    
    In connection with our management of the property owners associations,
among other things, we act as agent for the property owners association to operate the
resort as provided under the management agreements. In certain cases, the personnel at
the resorts are Bluegreen employees. The property owners association bears all of the
economic costs of such personnel and generally pays us in advance of, or simultaneously
to, the payment of payroll. In accordance with ASC 605-45, Overall Considerations of
Reporting Revenues Gross as a Principal versus Net as an Agent, reimbursements from the
property owners associations relating to direct pass-through costs are recorded net of
the related expenses.  Notes Receivable




---



##### 



Retained Interest in Notes Receivable Sold
   Inventory
  Property, Plant and
Equipment
  Deferred Financing Costs
 Consolidated Balance Sheets




---



##### 



Property and Equipment
  Impairment of Long-Lived Assets
  Goodwill
 Intangibles  Goodwill and Other .
 Treasury Stock
  Income Taxes
  Advertising Expense
 Consolidated Statements of Operations.
 Stock-Based Compensation




---



##### 



For the Year Ended December 31,2008
    
    
    2009Risk free investment rate
    
    
    3.1
    %
    
    
    2.4
    %Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %Volatility factor of expected market price
    
    
    49.4
    %
    
    
    84.2
    %Expected term
    
    5.5 years
    
    5.0 years
   Earnings (Loss) Per Common Share




---



##### 



Year Ended December 31,2008
    
    
    2009
    
    
    2010Basic and diluted earnings per common share 
numerator:Income (loss) from continuing operations
    
    $
    6,580
    
    
    $
    11,167
    
    
    $
    (35,872
    )Net income attributable to non-controlling interests
    
    
    7,095
    
    
    
    7,472
    
    
    
    8,094(Loss) income from continuing operations
attributable to
Bluegreen Corporation
    
    $
    (515
    )
    
    $
    3,695
    
    
    $
    (43,966
    )Denominator:Denominator for basic (loss) earnings per common share-
weighted-average shares
    
    
    31,241
    
    
    
    31,088
    
    
    
    31,165Effect of dilutive securities:Stock options and unvested restricted stock
    
    
    
    
    
    
    12
    
    
    
    Denominator for diluted earnings (loss) per common
share-
adjusted weighted-average shares and assumed
conversions
    
    
    31,241
    
    
    
    31,100
    
    
    
    31,165(Loss) income from continuing operations attributable
to
Bluegreen Corporation per common share  Basic:
    
    $
    (0.02
    )
    
    $
    0.12
    
    
    $
    (1.41
    )(Loss) income from continuing operations attributable
to
Bluegreen Corporation per common share  Diluted:
    
    $
    (0.02
    )
    
    $
    0.12
    
    
    $
    (1.41
    )
 Comprehensive Income (Loss)
  Business Combinations
   Business Acquisitions
 Recently Adopted Accounting Pronouncements
 Fair Value Measurements and Disclosures (Topic
820): Improving Disclosures about Fair Value Measurements




---



##### 



Disclosures about the Credit Quality of Financing
Receivables and the Allowance for Credit Losses (ASU 2010-20).
  2. Cumulative Effect of a Change in Accounting Principle
  Consolidated Statements of Operations
 Consolidated Statement of Cash Flows




---



##### 



3. Notes Receivable
  As of December 312009
    
    
    2010Notes receivable secured by VOIsNotes receivable  securitized
    
    $
    169,041
    
    
    $
    533,479Notes receivable  non-securitized
    
    
    182,191
    
    
    
    171,901Notes receivable secured by homesites
    
    
    4,901
    
    
    
    6,765Notes receivable, gross
    
    
    356,133
    
    
    
    712,145Allowance for loan losses
    
    
    (46,826
    )
    
    
    (143,160
    )Notes receivable, net
    
    $
    309,307
    
    
    $
    568,985
    2011
    
    $
    80,2842012
    
    
    82,1292013
    
    
    89,4862014
    
    
    95,9282015
    
    
    99,282Thereafter
    
    
    265,036Total
    
    $
    712,145
 Credit Quality for Financed Receivables and the Allowance for Credit Losses




---



##### 



Bluegreen
    
    
    BluegreenResorts
    
    
    Communities
    
    
    TotalDecember 31, 2009:Gross notes receivable
    
    $
    351,232
    
    
    $
    4,901
    
    
    $
    356,133Allowance for loan losses
    
    
    (46,302
    )
    
    
    (524
    )
    
    
    (46,826
    )Notes receivable, net
    
    
    304,930
    
    
    
    4,377
    
    
    
    309,307Allowance as a % of gross notes
receivable
    
    
    13
    %
    
    
    11
    %
    
    
    13
    %December 31, 2010:Gross notes receivable
    
    
    705,380
    
    
    
    6,765
    
    
    
    712,145Allowance for loan losses
    
    
    (142,468
    )
    
    
    (692
    )
    
    
    (143,160
    )Notes receivable, net
    
    $
    562,912
    
    
    $
    6,073
    
    
    $
    568,985Allowance as a % of gross notes
receivable
    
    
    20
    %
    
    
    10
    %
    
    
    20
    %
 ®
  Year EndedDecember 31,2008
    
    
    2009
    
    
    2010Balance, beginning of year
    
    $
    17,458
    
    
    $
    52,029
    
    
    $
    46,826One time impact of ASU 2009-16 and 2009-17 (1)
    
    
    
    
    
    
    
    
    
    
    86,252Provision for loan losses (2)
    
    
    76,079
    
    
    
    31,641
    
    
    
    94,554
    (3)Less: Allowance on sold receivables
    
    
    (10,964
    )
    
    
    
    
    
    
    Less: Write-offs of uncollectible receivables
    
    
    (30,544
    )
    
    
    (36,844
    )
    
    
    (84,472
    )Balance, end of year
    
    $
    52,029
    
    
    $
    46,826
    
    
    $
    143,160
 
 (1)
    
    On January 1, 2010, we adopted ASU 2009-16 and ASU 2009-17, which required us to
consolidate special purpose finance entities that were previously recorded
off-balance sheet. See Note 2 above.(2)
    
    Includes provision for loan losses on homesite notes receivable.(3)
    
    Includes charges totaling $69.7 million to increase the allowance for
uncollectible VOI notes receivable in connection with the lower FICO® score loans
generated prior to December 15, 2008, the date on which we implemented FICO®
score-based credit standards.  As of December 31,2009
    
    
    2010Current
    
    $
    326,218
    
    
    $
    655,30431-60 days
    
    
    6,633
    
    
    
    12,06361-90 days
    
    
    4,981
    
    
    
    10,228Over 91 days (1)
    
    
    13,400
    
    
    
    27,785Total
    
    $
    351,232
    
    
    $
    705,380
 
 (1)
    
    Includes $5.9 million and $16.9 million for 2009 and 2010, respectively, related to
VOI transactions that have been foreclosed but the related VOI note receivable balance
has not yet been charged off. These VOI notes receivable have been reflected in the
allowance for loan loss.




---



##### 



4. Sales of Notes Receivable
  Aggregate principal balance
of notes receivable
    
    $
    68.6Purchase price
    
    $
    60.0Gain recognized
    
    $
    8.2Initial fair value of retained interest
    
    $
    11.7
 Fair Value Measurements and
Disclosures
 Prepayment rates
    
    
    31%  17
    %Loss severity rate
    
    
    38
    %Default rates
    
    
    7.2%  1.0
    %Discount rate
    
    
    13.40
    %
   5. Retained Interests in Notes Receivable Sold
   GrossAmortized
    
    
    UnrealizedAs of December 31, 2009:
    
    Cost
    
    
    Gain (Loss)
    
    
    Fair Value2004 Term Securitization
    
    $
    7,731
    
    
    $
    391
    
    
    $
    8,1222004 GE Purchase Facility (1)
    
    
    3,864
    
    
    
    (598
    )
    
    
    3,2662005 Term Securitization
    
    
    11,852
    
    
    
    834
    
    
    
    12,6862006 GE Purchase Facility (2)
    
    
    15,408
    
    
    
    (2,328
    )
    
    
    13,0802006 Term Securitization
    
    
    10,107
    
    
    
    573
    
    
    
    10,6802007 Term Securitization (1)
    
    
    20,220
    
    
    
    (211
    )
    
    
    20,0092008 Term Securitization
    
    
    10,098
    
    
    
    372
    
    
    
    10,470Total
    
    $
    79,280
    
    
    $
    (967
    )
    
    $
    78,313
 
 (1)
    
    As of December 31, 2009, this security was in a continuous unrealized
loss position for less than 12 months.(2)
    
    As of December 31, 2009, this security was in a continuous unrealized
loss position for more than 12 months.




---



##### 



As ofDecember 31,2009Prepayment rates
    
    
    20%  3
    %Loss severity rates
    
    
    18%  38
    %Default rates
    
    
    7%  0
    %Discount rate
    
    
    24.5
    %
   Consolidated Statements of
Operations




---



##### 



Balance at April 1, 2009 of the amount related to credit losses for
which a portion of other-than-temporary impairment was recognized
in other comprehensive income
    
    $
    Additions for the amount related to the credit losses for which
other-than-temporary impairment was not previously recognized
    
    
    1,777Reductions for other-than-temporary impairment realized in
earnings, net of tax
    
    
    (311
    )Balance at December 31, 2009 of the amount related to credit losses
for which a portion of other-than-temporary impairment was
recognized in other comprehensive income
    
    $
    1,466
  For the Year Ended December 31,2008
    
    
    2009Proceeds from sales of notes receivable
    
    $
    55,705
    
    
    $
    Collections on previously sold notes receivable
    
    
    (175,551
    )
    
    
    (136,685
    )Servicing fees received
    
    
    9,436
    
    
    
    7,612Purchases of defaulted receivables
    
    
    (3,547
    )
    
    
    (920
    )Resales of foreclosed assets
    
    
    (50,314
    )
    
    
    (14,802
    )Remarketing fees received
    
    
    29,581
    
    
    
    8,187Cash received on retained interests in notes
receivable sold
    
    
    44,884
    
    
    
    43,741Cash paid to fund required reserve accounts
    
    
    (8,288
    )
    
    
    (1,148
    )Purchases of upgraded accounts
    
    $
    (47,045
    )
    
    $
    (516
    )




---



##### 



As of December 31, 2009Total
    
    
    PrincipalOutstanding
    
    
    Amount ofPrincipal
    
    
    Sold Loans 60
    
    
    BalanceAmount of
    
    
    or More Days
    
    
    Owed to NoteSold Loans
    
    
    Past Due
    
    
    Holders2004 Term Securitization
    
    $
    28,552
    
    
    $
    869
    
    
    $
    26,7652004 GE Purchase Facility
    
    
    13,870
    
    
    
    400
    
    
    
    12,0722005 Term Securitization
    
    
    81,261
    
    
    
    2,389
    
    
    
    74,8222006 GE Purchase Facility
    
    
    69,003
    
    
    
    2,353
    
    
    
    61,4332006 Term Securitization
    
    
    71,450
    
    
    
    2,502
    
    
    
    66,2062007 Term Securitization
    
    
    137,645
    
    
    
    4,251
    
    
    
    123,9352008 Term Securitization
    
    
    51,810
    
    
    
    1,530
    
    
    
    46,136Total
    
    $
    453,591
    
    
    
    
    
    
    $
    411,369
 6. Variable Interest Entities
    Consolidated Balance Sheet Consolidated Balance Sheet




---



##### 



7. Inventory
  As of December 31,2009
    
    
    2010Bluegreen Resorts
    
    $
    370,470
    
    
    $
    337,684Bluegreen Communities
    
    
    145,447
    
    
    
    82,193$
    515,917
    
    
    $
    419,877
  As of December 31,2009
    
    
    2010Completed VOI units
    
    $
    287,176
    
    
    $
    250,389Construction-in-progress
    
    
    8,243
    
    
    
    Real estate held for future development
    
    
    75,051
    
    
    
    87,295$
    370,470
    
    
    $
    337,684
    89




---



##### 



8. Property and Equipment
  As of December 31,Useful Life
    
    
    2009
    
    
    2010Office equipment, furniture and fixtures
    
    3-14 years
    
    $
    60,657
    
    
    $
    57,548Golf course land, land improvements, buildings and equipment
    
    5-39 years
    
    
    7,591
    
    
    
    7,537Land, buildings and building improvements
    
    3-30 years
    
    
    70,323
    
    
    
    70,063Leasehold improvements
    
    2-14 years
    
    
    11,952
    
    
    
    11,575Transportation and equipment
    
    3-5 years
    
    
    1,999
    
    
    
    2,045152,522
    
    
    
    148,768Accumulated depreciation and amortization of leasehold
improvements
    
    
    
    
    
    
    (66,957
    )
    
    
    (69,377
    )Total
    
    
    
    
    
    $
    85,565
    
    
    $
    79,391
 9. Debt
  Recourse
    
    
    Non-recourse
    
    
    JuniorLines-of-credit
    
    
    receivable-backed
    
    
    receivable-backed
    
    
    subordinatedand notes payable
    
    
    notes payable
    
    
    notes payable
    
    
    debendures2011
    
    $
    52,396
    
    
    $
    
    
    
    $
    
    
    
    $
    2012
    
    
    70,269
    
    
    
    
    
    
    
    
    
    
    
    2013
    
    
    4,253
    
    
    
    
    
    
    
    
    
    
    
    2014
    
    
    717
    
    
    
    67,514
    
    
    
    
    
    
    
    2015
    
    
    12,192
    
    
    
    3,159
    
    
    
    10,150
    
    
    
    Thereafter
    
    
    2,293
    
    
    
    64,987
    
    
    
    426,121
    
    
    
    110,827Total
    
    $
    142,120
    
    
    $
    135,660
    
    
    $
    436,271
    
    
    $
    110,827
 Lines-of-Credit and Notes Payable
  90




---



##### 



As ofDecember 31, 2009
    
    
    December 31, 2010Carrying
    
    
    
    
    
    
    
    
    
    
    CarryingAmount of
    
    
    
    
    
    
    
    
    
    
    Amount ofPledged
    
    
    
    
    
    
    
    
    
    
    PledgedBalance
    
    
    Interest Rate

    
    Assets
    
    
    Balance
    
    
    Interest Rate

    
    AssetsRFA AD&C Facility
    
    $
    87,415
    
    

    4.73%
    
    $
    145,031
    
    
    $
    52,264
    
    

    4.76%
    
    $
    127,460H4BG Communities Facility
    
    
    38,479
    
    

    10.00%
    
    
    117,872
    
    
    
    30,842
    
    

    8.00%
    
    
    66,925Wachovia Notes Payable
    
    
    24,497
    
    

    2.23 - 2.58%
    
    
    44,686
    
    
    
    
    
    

    

    
    
    Wells Fargo Term Loan
    
    
    
    
    

    

    
    
    
    
    
    
    30,776
    
    

    7.13%
    
    
    104,747Wachovia Line-of-Credit
    
    
    15,700
    
    

    1.98%
    
    
    
    
    
    
    
    
    

    

    
    
    Foundation Capital
    
    
    
    
    

    

    
    
    
    
    
    
    13,200
    
    

    8.00%
    
    
    17,574Textron AD&C Facility
    
    
    12,757
    
    

    4.50 - 4.75%
    
    
    27,582
    
    
    
    9,290
    
    

    4.50 - 4.75%
    
    
    26,579Fifth Third Bank NotePayable
    
    
    3,381
    
    

    3.23%
    
    
    4,841
    
    
    
    3,154
    
    

    3.26%
    
    
    4,680Other
    
    
    3,552
    
    

    4.25 - 12.50%
    
    
    3,851
    
    
    
    2,594
    
    

    5.00 - 11.03%
    
    
    2,293Total
    
    $
    185,781
    
    
    
    
    
    
    $
    343,863
    
    
    $
    142,120
    
    
    
    
    
    
    $
    350,258
 RFA AD&C Facility . TM
 H4BG Communities Facility.
  The Wachovia Notes Payable.
 The Wachovia Line-of-Credit
 91




---



##### 



Wells Fargo Term Loan.
 Textron AD&C Facility
    Fifth Third Bank Note Payable
 Receivable-Backed Notes Payable
  92




---



##### 



As ofDecember 31, 2009
    
    
    December 31, 2010Principal
    
    
    
    
    
    
    
    
    
    
    PrincipalBalance of
    
    
    
    
    
    
    
    
    
    
    Balance ofPledged/
    
    
    
    
    
    
    
    
    
    
    Pledged/Debt
    
    
    Interest
    
    
    Secured
    
    
    
    
    
    
    
    
    
    
    SecuredBalance
    
    
    Rate
    
    
    Receivables
    
    
    Debt Balance
    
    
    Interest Rate

    
    ReceivablesRecourse receivable-backed
notes payable:Liberty Bank Facility
    
    $
    59,055
    
    
    
    5.75%
    
    
    $
    68,175
    
    
    $
    67,514
    
    
    
    6.50%
    
    
    $
    77,377GE Bluegreen/Big CedarReceivables Facility
    
    
    32,834
    
    
    
    1.98%
    
    
    
    35,935
    
    
    
    23,877
    
    
    
    2.01%
    
    
    
    29,232Legacy Securitization (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,342
    
    
    
    12.00%
    
    
    
    34,232NBA Receivables Facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,351
    
    
    
    6.75%
    
    
    
    22,458Wells Fargo Facility
    
    
    14,409
    
    
    
    4.00%
    
    
    
    15,926
    
    
    
    
    
    
    
    
    
    
    
    RFA Receivables Facility
    
    
    5,228
    
    
    
    4.23%
    
    
    
    6,331
    
    
    
    3,159
    
    
    
    4.26%
    
    
    
    4,451Total before discount
    
    


    111,526
    
    
    
    
    
    
    
    126,367


    
    
    
    138,243

    

    
    
    

    
    
    
    167,750Less unamortized discount onLegacy Securitization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,583
    )
    
    
    
    
    
    
    Total recourse debt
    
    
    111,526
    
    
    
    
    
    
    
    126,367
    
    
    
    135,660
    
    
    
    
    
    
    
    167,750Non-recourse receivable-backed
notes payable(2):BB&T Purchase Facility
    
    
    131,302
    
    
    
    5.75%
    
    
    
    166,562
    
    
    
    
    
    
    
    
    
    
    
    GE 2004 Facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,150
    
    
    
    7.16%
    
    
    
    11,7092004 Term Securitization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,722
    
    
    
    4.45-7.18%
    
    
    
    20,5402005 Term Securitization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,888
    
    
    
    5.41-9.85%
    
    
    
    63,527GE 2006 Facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,596
    
    
    
    6.68-7.77%
    
    
    
    57,9882006 Term Securitization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52,716
    
    
    
    5.61-9.38%
    
    
    
    59,4152007 Term Securitization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,953
    
    
    
    5.83-11.15%
    
    
    
    117,3792008 Term Securitization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,624
    
    
    
    5.89-11.63%
    
    
    
    44,8892010 Term Securitization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    107,514
    
    
    
    5.10-7.50%
    
    
    
    123,662Big Cedar Quorum Federal Credit Union
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108
    
    
    
    8.00%
    
    
    
    136Total non-recourse debt
    
    
    131,302
    
    
    
    
    
    
    
    166,562
    
    
    
    436,271
    
    
    
    
    
    
    
    499,245Total receivable-backed debt
    
    $
    242,828
    
    
    
    
    
    
    $
    292,929
    
    
    $
    571,931
    
    
    
    
    
    
    $
    666,995
 
 (1)
    
    Legacy Securitization debt bears interest at a coupon rate of 12% and was issued at a
discount resulting in an effective yield of 18.5%.(2)
    
    As of December 31, 2009, with the exception of the BB&T Purchase Facility, all non-recourse
receivable-backed notes payable were not consolidated by us in accordance with the accounting
guidance then in effect. Liberty Bank Facility
  93




---



##### 



The GE Bluegreen/Big Cedar Receivables Facility.
 Legacy Securitization
   NBA Receivables Facility.
  94




---



##### 



The Wells Fargo Facility.
 BB&T Purchase Facility.
    2010 Term Securitization
    Quorum Facility.
 95




---



##### 



Receivable-Backed Notes Payable Previously Reported Off-Balance-Sheet
  Junior Subordinated Debentures
  96




---



##### 



Outstanding
    
    
    InitialAmount of
    
    
    Equity
    
    
    
    
    
    
    Fixed
    
    
    Variable
    
    
    BeginningJunior
    
    
    In
    
    
    
    
    
    
    Interest
    
    
    Interest
    
    
    OptionalSubordinated
    
    
    Trust
    
    
    Issue
    
    
    Rate
    
    
    Rate
    
    
    Redemption
    
    
    MaturityTrust
    
    Debentures
    
    
    (3)
    
    
    Date
    
    
    (1)
    
    
    (2)
    
    
    Date
    
    
    Date3-month LIBOR+ 4.90% (5.20%BST I
    
    $
    23,196
    
    
    $
    696
    
    
    
    3/15/05
    
    
    
    (4
    )
    
    as of 12/31/10)
    
    
    3/30/10
    
    
    
    3/30/353-month LIBOR+ 4.85% (5.15
    %BST II
    
    
    25,774
    
    
    
    774
    
    
    
    5/04/05
    
    
    
    (5
    )
    
    as of 12/31/10)
    
    
    7/30/10
    
    
    
    7/30/353-month LIBOR+ 4.85% (5.15
    %BST III
    
    
    10,310
    
    
    
    310
    
    
    
    5/10/05
    
    
    
    (5
    )
    
    as of 12/31/10)
    
    
    7/30/10
    
    
    
    7/30/353-month LIBORBST IV
    
    
    15,464
    
    
    
    464
    
    
    
    4/24/06
    
    
    
    10.130
    %
    
    
    + 4.85%
    
    
    
    6/30/11
    
    
    
    6/30/363-month LIBORBST V
    
    
    15,464
    
    
    
    464
    
    
    
    7/21/06
    
    
    
    10.280
    %
    
    
    + 4.85%
    
    
    
    9/30/11
    
    
    
    9/30/363-month LIBORBST VI
    
    
    20,619
    
    
    
    619
    
    
    
    2/26/07
    
    
    
    9.842
    %
    
    
    + 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.(4)
    
    On March 30, 2010, the interest rates on the securities issued by Bluegreen Statutory Trust
(BST) I contractually changed from a fixed-rate of 9.160% to a variable rate equal to the
3-month LIBOR + 4.90% (5.20% as of December 31, 2010).(5)
    
    On July 30, 2010, the interest rate on the securities issued by BST II and BST III
contractually changed from a fixed- rate of 9.158% and 9.193%, respectively, to a variable
rate equal to the 3-month LIBOR + 4.85% (5.15% as of December 31, 2010). 10. Fair Value of Financial Instruments
  Unrestricted cash and cash equivalents.
 Restricted cash.
 Contracts receivable.
 Notes receivable.
 97




---



##### 



Lines-of-credit, notes payable, and receivable-backed notes payable.
 Junior subordinated debentures.
  As of December 31, 2009
    
    
    As of December 31, 2010Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair ValueUnrestricted cash and cash equivalents
    
    $
    70,491
    
    
    $
    70,491
    
    
    $
    72,085
    
    
    $
    72,085Restricted cash
    
    
    23,908
    
    
    
    23,908
    
    
    
    53,922
    
    
    
    53,922Contracts receivable, net
    
    
    4,826
    
    
    
    4,826
    
    
    
    1,843
    
    
    
    1,843Notes receivable, net
    
    
    309,307
    
    
    
    279,208
    
    
    
    568,985
    
    
    
    619,000Retained interests in notes receivable sold
    
    
    78,313
    
    
    
    78,313
    
    
    
    
    
    
    
    Lines-of-credit, notes payable, and receivable-backed notes payable
    
    
    428,609
    
    
    
    428,609
    
    
    
    714,051
    
    
    
    702,274Junior subordinated debentures
    
    $
    110,827
    
    
    $
    60,522
    
    
    $
    110,827
    
    
    $
    68,100
 11. Common Stock and Stock Option Plans
 Bluegreen Corporation 2008 Stock Incentive Plan
  Share-Based Compensation
    98




---



##### 



Stock Option Awards
    
    
    Restricted Stock AwardsGrant Date
    
    
    
    
    
    
    Grant DateFor the Year Ended December 31, 2008
    
    Quantity
    
    
    Fair Value
    
    
    Quantity
    
    
    Fair ValueDirectors
    
    
    295
    
    
    $
    937
    
    
    
    184
    
    
    $
    1,246Employees
    
    
    777
    
    
    
    2,518
    
    
    
    1,184
    
    
    
    9,208Total
    
    
    1,072
    
    
    $
    3,455
    
    
    
    1,368
    
    
    $
    10,454
 Stock Option Awards
    
    
    Restricted Stock AwardsGrant Date
    
    
    
    
    
    
    Grant DateFor the Year Ended December 31, 2009
    
    Quantity
    
    
    Fair Value
    
    
    Quantity
    
    
    Fair ValueDirectors
    
    
    120
    
    
    $
    221
    
    
    
    92
    
    
    $
    255Employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    120
    
    
    $
    221
    
    
    
    92
    
    
    $
    255
   WeightedAverageRemaining
    
    
    UnrecognizedRecognition
    
    
    Compensation(in years)
    
    
    (000s)Stock Option Awards
    
    
    1.9
    
    
    $
    1,873Restricted Stock Awards
    
    
    2.2
    
    
    $
    4,687
  WeightedAverageExercise
    
    
    Number of
    
    
    AggregateOutstanding
    
    
    Price Per
    
    
    Shares
    
    
    IntrinsicOptions
    
    
    Share
    
    
    Exercisable
    
    
    Value(000s)
    
    
    
    
    
    
    (000s)Balance at December 31, 2008
    
    
    2,710
    
    
    $
    9.91
    
    
    
    871
    
    
    $
    32,100Granted
    
    
    120
    
    
    $
    2.75Forfeited
    
    
    (1
    )
    
    $
    3.48Expired
    
    
    (34
    )
    
    $
    7.35Exercised
    
    
    
    
    
    $
    Balance at December 31, 2009
    
    
    2,795
    
    
    $
    9.64
    
    
    
    956
    
    
    $
    7,250Granted
    
    
    
    
    
    $
    Forfeited
    
    
    (78
    )
    
    $
    12.88Expired
    
    
    
    
    
    $
    Exercised
    
    
    
    
    
    $
    Balance at December 31, 2010
    
    
    2,717
    
    
    $
    9.53
    
    
    
    1,310
    
    
    $
    91,396
 99




---



##### 



Weighted-
    
    
    
    
    
    
    Weigted-Average
    
    
    Weighted-
    
    
    AverageNumber of
    
    
    Remaining
    
    
    Average
    
    
    ExerciseNumber of
    
    
    Vested
    
    
    Contractual
    
    
    Exercise
    
    
    Price (VestedOptions
    
    
    Options
    
    
    Term
    
    
    Price
    
    
    Only)(In 000s)
    
    
    (In 000s)
    
    
    (In years)$2.11 - $3.00
    
    
    155
    
    
    
    155
    
    
    
    6.7
    
    
    $
    2.63
    
    
    $
    2.63$3.01 - $4.52
    
    
    378
    
    
    
    378
    
    
    
    1.8
    
    
    $
    3.46
    
    
    $
    3.46$4.53 - $6.79
    
    
    168
    
    
    
    168
    
    
    
    4.3
    
    
    $
    5.92
    
    
    $
    5.92$6.80 - $10.20
    
    
    937
    
    
    
    
    
    
    
    5.3
    
    
    $
    7.65
    
    
    $
    $10.21 - $15.31
    
    
    584
    
    
    
    114
    
    
    
    5.7
    
    
    $
    11.94
    
    
    $
    11.47$15.32 - $18.36
    
    
    495
    
    
    
    495
    
    
    
    4.6
    
    
    $
    18.27
    
    
    $
    18.272,717
    
    
    
    1,310
    
    
    
    4.8
    
    
    $
    9.53
    
    
    $
    9.98
  Weighted-AverageNumber of
    
    
    Grant-Date FairNon-vested Restricted Shares
    
    Shares
    
    
    Value per Share(In 000s)Unvested at January 1, 2009
    
    
    1,417
    
    
    $
    8.14Granted
    
    
    92
    
    
    $
    2.75Vested
    
    
    (63
    )
    
    $
    4.04Forfeited
    
    
    (20
    )
    
    $
    10.14Unvested at December 31, 2009
    
    
    1,426
    
    
    $
    7.94Granted
    
    
    
    
    
    $
    Vested
    
    
    (54
    )
    
    $
    2.75Forfeited
    
    
    (45
    )
    
    $
    8.28Unvested at December 31, 2010
    
    
    1,327
    
    
    $
    8.14
 Shareholders Rights Plan
  100




---



##### 



12. Commitments and Contingencies
    2011
    
    $
    9,3792012
    
    
    7,6692013
    
    
    5,3172014
    
    
    4,9552015
    
    
    4,864Thereafter
    
    
    26,206Total future minimum lease payments
    
    $
    58,390
     Bluegreen Resorts
  101




---



##### 



Joseph M. Scheyd, Jr., P.A. vs. Bluegreen Vacations
Unlimited, Inc.; Hubert A. Laird; and MSB of Destin, Inc.,
  Other Matters
  Bluegreen Communities
 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, L.P. et al. v. Betty Yvon Lesley et al.




---



##### 



William Marshall and Patricia
Marshall, et al. v Bluegreen Southwest One, L.P., Bluegreen Southwest Land, Inc., Bluegreen
Corporation, Stephen Davis, and Bluegreen Communities of Texas, L.P. Th
 Paul A. Schwarz and Barbara S.
Schwarz v. Bluegreen Communities of Georgia, LLC and Bluegreen Corporation
 Community Cable Service, LLC v.
Bluegreen Communities of Georgia, LLC and Sanctuary Cove at St. Andrews Sound Community
Association, Inc., a/k/a Sanctuary Cove Home Developers Association, Inc.,
 Other Matters
  13. Income Taxes




---



##### 



For the Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010Federal:Current
    
    $
    2,392
    
    
    $
    (3,335
    )
    
    $
    3,005Deferred
    
    
    (1,671
    )
    
    
    (474
    )
    
    
    (26,648
    )$
    721
    
    
    $
    (3,809
    )
    
    $
    (23,643
    )State and Other:Current
    
    $
    1,165
    
    
    $
    153
    
    
    $
    2,006Deferred
    
    
    (1,133
    )
    
    
    1,016
    
    
    
    (590
    )32
    
    
    
    1,169
    
    
    
    1,416Total
    
    $
    753
    
    
    $
    (2,640
    )
    
    $
    (22,227
    )
  For the Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2010Income tax expense at statutory rate
    
    $
    84
    
    
    $
    369
    
    
    $
    (23,166
    )Effect of state taxes, net of federal tax benefit
    
    
    9
    
    
    
    100
    
    
    
    1,304Effect of state rate changes on net deferred
liabilities
    
    
    (1,592
    )
    
    
    1,395
    
    
    
    59Change in valuation allowance
    
    
    1,251
    
    
    
    (379
    )
    
    
    (650
    )Non-deductible items
    
    
    1,016
    
    
    
    (4,122
    )
    
    
    229Other
    
    
    (15
    )
    
    
    (3
    )
    
    
    (3
    )Total
    
    $
    753
    
    
    $
    (2,640
    )
    
    $
    (22,227
    )




---



##### 



As ofDecember 31, 2009
    
    
    December 31, 2010Deferred federal and state tax liabilities
(assets):Installment sales treatment VOI of notes
receivable
    
    $
    224,941
    
    
    $
    213,154Deferred federal and state loss
carryforwards/AMT
credits (net of valuation allowance of
$3.2 million and $2.6
million as of December 31, 2009 and 2010
, respectively)
    
    
    (134,295
    )
    
    
    (107,106
    )Book over tax carrying value of retained interests in notes
    
    
    30,392
    
    
    
    0Book reserves for loan losses and inventory
    
    
    (23,502
    )
    
    
    (78,196
    )Tax over (under) book depreciation
    
    
    391
    
    
    
    (43
    )Unrealized losses on retained interests in notes receivable
sold (see Note 4)
    
    
    (358
    )
    
    
    0Deferral of VOI sales and costs under timeshare accounting
    
    
    4,618
    
    
    
    12,185Deferred rent
    
    
    (2,202
    )
    
    
    (2,719
    )Restructuring
    
    
    (665
    )
    
    
    (281
    )Accrued contingencies
    
    
    (2,996
    )
    
    
    (1,646
    )Goodwill
    
    
    (1,926
    )
    
    
    (1,757
    )Stock-based compensation
    
    
    (4,175
    )
    
    
    (5,112
    )Other
    
    
    (2,426
    )
    
    
    (2,874
    )Deferred income taxes
    
    $
    87,797
    
    
    $
    25,605Total deferred federal and state tax liabilities
    
    $
    260,342
    
    
    $
    225,339Total deferred federal and state tax assets
    
    
    (172,545
    )
    
    
    (199,734
    )Deferred income taxes
    
    $
    87,797
    
    
    $
    25,605
    Income Tax




---



##### 



Consolidated Statement of Operations
 14. Employee Retirement Savings Plan and Other Employee Matters
   15. Business Segments




---



##### 



Bluegreen
    
    
    BluegreenResorts
    
    
    Communities
    
    
    TotalsFor the year ended December 31, 2008:Sales of real estate
    
    $
    428,010
    (1)
    
    $
    47,020
    
    
    $
    475,030Other resort and communities operations revenue
    
    
    58,643
    
    
    
    3,527
    
    
    
    62,170Depreciation expense
    
    
    7,294
    
    
    
    579
    
    
    
    7,873Segment operating profit (loss)
    
    
    46,999
    (1)
    
    
    (3,574)
    (3)
    
    
    43,425For the year ended December 31, 2009:Sales of real estate
    
    $
    201,755
    (2)
    
    $
    17,613
    
    
    $
    219,368Other resort and communities operations revenue
    
    
    57,014
    
    
    
    1,590
    
    
    
    58,604Fee-based sales commission revenue
    
    
    20,057
    
    
    
    
    
    
    
    20,057Depreciation expense
    
    
    5,349
    
    
    
    589
    
    
    
    5,938Segment operating profit (loss)
    
    
    37,748
    
    
    
    (21,099)
    (3)
    
    
    16,649For the year ended December 31, 2010:Sales of real estate
    
    $
    125,765
    (4)
    
    $
    11,751
    
    
    $
    137,516Other resort and communities operations revenue
    
    
    67,036
    
    
    
    1,696
    
    
    
    68,732Fee-based sales commission revenue
    
    
    52,966
    
    
    
    
    
    
    
    52,966Depreciation expense
    
    
    5,486
    
    
    
    531
    
    
    
    6,017Segment operating profit (loss)
    
    
    15,706
    
    
    
    (67,086)
    (3)
    
    
    (51,380
    )
 
 (1)
    
    Sales of real estate for the year ended December 31, 2008 include approximately $8.2
million related to gains on the sales of VOI notes receivable through off-balance sheet
transactions. There was no such gain during the year ended December 31, 2009 or 2010.(2)
    
    Amount excludes $15.6 million related to the 2008 restructuring (discussed in Note 17
below) and $8.5 million related to the
impairment of goodwill (discussed in Note 1 above).(3)
    
    Amount includes charges of $5.2 million, $13.2 million and $54.6 million related to the
impairment of certain communities inventory
for the years ended December 31, 2008, 2009 and 2010, respectively (discussed in Note 7
above).(4)
    
    Amount includes charges of $69.7 million to increase the allowance for uncollectible
notes receivable on notes generated prior to
December 15, 2008, the date on which we implemented our FICO® score-based
underwriting standards.




---



##### 



Bluegreen
    
    
    BluegreenResorts
    
    
    Communities
    
    
    TotalsAs of
December 31, 2009Notes receivable, net
    
    $
    304,930
    
    
    $
    4,377
    
    
    $
    309,307Inventory
    
    
    370,470
    
    
    
    145,447
    
    
    
    515,917Property and equipment, net (1)
    
    
    70,036
    
    
    
    6,153
    
    
    
    76,189
 Bluegreen
    
    
    BluegreenResorts
    
    
    Communities
    
    
    TotalsAs of
December 31, 2010Notes receivable, net
    
    $
    562,912
    
    
    $
    6,073
    
    
    $
    568,985Inventory
    
    
    337,684
    
    
    
    82,193
    
    
    
    419,877Property and equipment, net (1)
    
    
    65,244
    
    
    
    5,576
    
    
    
    70,820
 
 (1)
    
    As of December 31, 2009 and 2010, $9.4 million and $8.6 million, respectively, of
property and equipment, net, related to corporate assets were not included in the
segment information. Reconciliations to Consolidated Amounts
  Year Ended December 31,2008
    
    
    2009
    
    
    2010Segment operating profit (loss) from continuing operations for reportable segments
    
    $
    43,425
    
    
    $
    16,649
    
    
    $
    (51,380
    )Interest income
    
    
    57,831
    
    
    
    69,337
    
    
    
    106,463
    (1)Other expense, net
    
    
    (1,637
    )
    
    
    (1,810
    )
    
    
    (2,839
    )Corporate general and administrative expenses
    
    
    (54,822
    )
    
    
    (45,106
    )
    
    
    (42,199
    )Mortgage servicing operations
    
    
    7,543
    
    
    
    5,589
    
    
    
    (2,349)
    (1)Interest expense
    
    
    (20,888
    )
    
    
    (36,132
    )
    
    
    (65,795)
    (1)Restructuring charges
    
    
    (15,617
    )
    
    
    
    
    
    
    Goodwill impairment
    
    
    (8,502
    )
    
    
    
    
    
    
    Consolidated income (loss) before non-controlling interests, provision (benefit) for
income taxes and discontinued operations
    
    $
    7,333
    
    
    $
    8,527
    
    
    $
    (58,099)
    (1)
 
 (1)
    
    Reflects the impact of the adoption of ASU 2009-16 and ASU 2009-17 on January 1,
2010.  Year Ended December 31,2008
    
    
    2009
    
    
    2010Depreciation expense  reportable segments
    
    $
    7,873
    
    
    $
    5,938
    
    
    $
    6,017Depreciation expense  corporate
    
    
    4,331
    
    
    
    4,846
    
    
    
    3,347Consolidated depreciation expense
    
    $
    12,204
    
    
    $
    10,784
    
    
    $
    9,364




---



##### 



As ofDecember 31, 2009
    
    
    December 31, 2010Notes receivable for reportable segments, net
    
    $
    309,307
    
    
    $
    568,985Inventory for reportable segments
    
    
    515,917
    
    
    
    419,877Property and equipment for reportable segments
    
    
    76,189
    
    
    
    70,820Assets not allocated to reportable segments
    
    
    229,852
    
    
    
    196,250Total assets
    
    $
    1,131,265
    
    
    $
    1,255,932
 Geographic Information
  Year Ended December 31,2008
    
    
    2009
    
    
    2010United States
    
    $
    467,500
    
    
    $
    213,907
    
    
    $
    133,140Aruba
    
    
    7,530
    
    
    
    5,461
    
    
    
    4,376Total
    
    $
    475,030
    
    
    $
    219,368
    
    
    $
    137,516
  As of December 31,2009
    
    
    2010United States
    
    $
    1,123,841
    
    
    $
    1,251,977Aruba
    
    
    7,424
    
    
    
    3,955Total assets
    
    $
    1,131,265
    
    
    $
    1,255,932
 16. Discontinued Operations
   December 31,2008
    
    
    2009Golf operations revenue
    
    $
    7,182
    
    
    $
    6,244Cost of operations
    
    
    7,170
    
    
    
    6,924Income (loss) from discontinued operations before
provision for income taxes
    
    
    12
    
    
    
    (680
    )Loss on the disposal of golf courses
    
    
    
    
    
    
    (10,544
    )Provision (benefit) for income taxes
    
    
    13
    
    
    
    (3,957
    )Loss from discontinued operations
    
    $
    (1
    )
    
    $
    (7,267
    )




---



##### 



17. 2008 Restructuring Charges
  Consolidated Statements of
Operations Consolidated Balance Sheets Exit or Disposal Cost Obligations
  Liability at
    
    
    Charges andDecember 31,
    
    
    Other
    
    
    Cash Payments
    
    
    Liability at2008
    
    
    Adjustments
    
    
    made during 2009
    
    
    December 31, 2009Severance and benefit-related
costs(1)
    
    $
    3,540
    
    
    $
    594
    
    
    $
    4,134
    
    
    $
    Lease termination obligations(2)(3)
    
    
    4,079
    
    
    
    (556
    )(4)
    
    
    1,803
    
    
    
    1,720Other
    
    
    349
    
    
    
    (134
    )
    
    
    215
    
    
    
    Total restructuring
    
    $
    7,968
    
    
    $
    (96
    )
    
    $
    6,152
    
    
    $
    1,720
 
 (1)
    
    Includes severance payments made to employees, payroll taxes and other
benefit-related costs in connection with the termination of approximately 2,200
employees.(2)
    
    Includes costs associated with non-cancelable property and equipment leases
that we ceased to use, as well as termination fees related to the cancellation of
certain contractual lease obligations. Included in this amount are future minimum lease
payments in excess of estimated sublease income, fees and expenses.(3)
    
    Continuing lease obligations will be paid monthly through November 2012.(4)
    
    During 2009, we successfully terminated certain of our lease obligations,
resulting in a reduction of liability of $0.7 million.  18. Related Party Transactions




---



##### 



19. Subsequent Events
  20. Quarterly Financial Information (Unaudited)
  For the Three Months EndedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2009
    
    
    2009
    
    
    2009
    
    
    2009Sales of real estate
    
    $
    45,855
    
    
    $
    56,555
    
    
    $
    71,266
    
    
    $
    45,692Gross profit
    
    
    33,750
    
    
    
    34,416
    
    
    
    42,745
    
    
    
    16,565
    (1)Income (loss) from continuing operations attributable to Bluegreen Corporation
    
    
    3,695
    
    
    
    6,582
    
    
    
    4,138
    
    
    
    (10,720
    ) (1)Discontinued operations
    
    
    (142
    )
    
    
    232
    
    
    
    (205
    )
    
    
    (7,152
    )Net income (loss)
    
    
    4,739
    
    
    
    8,364
    
    
    
    6,580
    
    
    
    (15,783
    ) (1)Net income (loss) attributable to Bluegreen Corporation
    
    $
    3,553
    
    
    $
    6,814
    
    
    $
    3,933
    
    
    $
    (17,872
    ) (1)Income (loss) from continuing operations attributable to Bluegreen corporation
per common share:Diluted earnings (loss) per share from continuing operations attributable to
Bluegreen shareholders
    
    $
    0.12
    
    
    $
    0.21
    
    
    $
    0.13
    
    
    $
    (0.34
    )Diluted (loss) income per share for discontinued operations
    
    
    (0.01
    )
    
    
    0.01
    
    
    
    
    
    
    
    (0.23
    )Diluted earnings (loss) per share attributable to Bluegreen shareholders
    
    $
    0.11
    
    
    $
    0.22
    
    
    $
    0.13
    
    
    $
    (0.57
    )
 For the Three Months EndedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2010
    
    
    2010
    
    
    2010
    
    
    2010Sales of real estate (2)
    
    $
    26,239
    
    
    $
    51,120
    
    
    $
    42,203
    
    
    $
    17,954Gross profit (loss) (2)(3)
    
    
    11,791
    
    
    
    35,774
    
    
    
    4,895
    
    
    
    (8,023
    )Net (loss) income (2)(3)
    
    
    (6,318
    )
    
    
    5,678
    
    
    
    (13,519
    )
    
    
    (21,713
    )Net (loss) income attributable to Bluegreen Corporation (2)(3)
    
    $
    (7,857
    )
    
    $
    4,309
    
    
    $
    (16,708
    )
    
    $
    (23,710
    )(Loss) income from continuing operations attributable to Bluegreen
Corporation
per common share:Diluted (loss) earnings per share attributable to Bluegreen shareholders
    
    $
    (0.25
    )
    
    $
    0.14
    
    
    $
    (0.54
    )
    
    $
    (0.76
    )
 
 (1)
    
    Amounts presented for the quarter ended December 31, 2009 reflect a charge of $10.9
million to adjust the carrying amount of inventory to fair value, less cost to sell, on
certain of our Bluegreen Communities real estate developments.(2)
    
    Sales of real estate for the quarters ended March 31, 2010, June 30, 2010, September
30, 2010 and December 31, 2010, reflect charges of $10.7 million, $2.5 million, $24.5
million and $32.0 million, respectively to increase our allowance for uncollectible notes
receivable on notes generated prior to December 15, 2008, the date on which we implemented
our FICO® score-based underwriting standards.(3)
    
    Amounts presented for the quarters ended March 31, 2010, June 30, 2010, September
30, 2010 and December 31, 2010 reflect charges of $5.3 million, $0.3 million, $20.8 million
and $28.2 million, respectively, to adjust the carrying amount of inventory to fair value,
less cost to sell, on certain of our Bluegreen Communities real estate developments.




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Report of Independent Registered Public Accounting Firm
 
      /s/ Ernst & Young LLPCertified Public Accountants