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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
Commission file number 0-19292
BLUEGREEN CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 03-0300793
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5295 Town Center Road, Boca Raton, Florida 33486
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 361-2700
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $.01 par value New York Stock Exchange, Pacific Stock Exchange
8.25% Convertible Subordinated Debentures due 2012 New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No __
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained in the
definitive proxy statement incorporated by reference into Part III of this Form
10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant: $71,744,730 based upon the closing sale price of the
Company's Common Stock on the New York Stock Exchange on June 3, 1996 ($4.125
per share). The market value of voting stock held by non-affiliates excludes any
shares issuable upon conversion of any 8.25% Convertible Subordinated Debentures
which are convertible at $8.24 per share and includes 1,192,947 shares of Common
Stock held by Franklin Resources, Inc. or its wholly-owned subsidiaries
("Franklin"). Shares held by Franklin are based on the most recent Form 13G
filed with the Securities and Exchange Commission.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date: 20,541,089 shares of
Common Stock, $.01 par value, outstanding as of June 3, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
Specifically identified portions of the Company's 1996 Annual Report to
Shareholders are incorporated by reference into Part II hereof and specifically
identified portions of the Company's definitive proxy statement to be filed for
its Annual Meeting of Shareholders to be held on July 25, 1996 are incorporated
by reference into Part III hereof.
BLUEGREEN CORPORATION
INDEX TO ANNUAL REPORT ON FORM 10-K
PART I PAGE
Item 1. BUSINESS
Summary..................................................... 1
Acquisition of Inventory ................................... 3
Marketing and Sale of Inventory............................. 5
Customer Financing.......................................... 9
Loan Underwriting...........................................10
Collection Policies.........................................11
Sales of Receivables/Pledging of Receivables................12
Receivables Servicing.......................................13
Customer Service............................................13
Regulation..................................................13
Competition.................................................14
Personnel...................................................14
Executive Officers of the Company...........................14
Item 2. PROPERTIES............................................................16
Item 3. LEGAL PROCEEDINGS.....................................................16
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................16
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER........16
MATTERS
Item 6. SELECTED FINANCIAL DATA..............................................17
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS............................................18
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..........................18
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.............................................18
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..................18
Item 11. EXECUTIVE COMPENSATION
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT......18
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................19
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.....19
Signatures....................................................................21
Exhibit Index.................................................................22
PART I
Item 1. BUSINESS.
Summary
Bluegreen Corporation, together with its subsidiaries (the "Company"), is the
successor to a real estate business that was formed as a sole proprietorship in
1966 and incorporated in 1976. As approved at a special meeting of the Company's
shareholders held in February, 1996, the Company changed its name from Patten
Corporation to Bluegreen Corporation in March, 1996. The Company's real estate
operations are currently managed under three divisions. The Land Division
acquires large acreage tracts of real estate which are subdivided, improved and
sold, typically on a retail basis. The Resorts Division acquires and develops
timeshare property to be sold in vacation ownership intervals, whereby fixed
week intervals or undivided fee simple interests are sold in fully-furnished
vacation units. The Communities Division is engaged in the sale of manufactured
homes on residential land parcels at a North Carolina project as well as the
sale of residential lots primarily in three additional southeastern projects.
The Land Division is segregated into two broad property types offered for sale
to prospective customers: (i) land intended for near-term residential use and
(ii) land intended for general recreational use. Land intended for near-term
residential use is fully improved which generally includes the provision for
water, electricity and telephone as well as the construction of access roads
leading to the subdivided lots. About half of the Company's residential
properties are situated in locations that lend to their use as primary homesites
while the remaining properties are proposed as vacation or secondary homesite
subdivisions. General recreational property is typically used for hunting,
fishing and camping or as a potential homesite in the longer-term.
The Company's Resorts Division, introduced in 1994, is responsible for the
development, marketing and sale of three timeshare properties located in
Gatlinburg, Tennessee; Pigeon Forge, Tennessee; and Myrtle Beach, South
Carolina. These resorts are the first in an intended series of timeshare
properties to be located in regional family vacation destinations.
Under the Company's Communities Division, factory-built manufactured home and
lot packages are marketed in a North Carolina development. In addition,
residential lots from two other projects in North Carolina and a project in
Orlando, Florida are being developed and sold. The North Carolina land
inventories were acquired prior to the formation of the Investment Committee.
See below. Sales of the North Carolina inventories are expected to yield gross
margins lower than those historically experienced under the Land Division.
Furthermore, the Company does not intend to expand its Communities related
activities beyond the projects currently being marketed.
The Company's Land, Resorts and Communities divisions accounted for 75% ($84.9
million), 12% ($13.8 million) and 13% ($14.7 million), respectively, of
consolidated sales of real estate for fiscal 1996. See Management's Discussion
and Analysis of Financial Condition and Results of Operations which is
incorporated by reference into Item 7, Part II herein from the Company's 1996
Annual Report.
Since 1989, all inventory acquisitions have required the prior approval of the
Company's investment committee, which consists of certain executive officers of
the Company (the "Investment Committee"). The Company seeks to reduce its cash
outlay and risks by making small downpayments when contracting to acquire
properties and by completing as many preparations for resale as possible before
actually completing the purchase. The Company has historically acquired
substantially all of the inventory it has placed under contract. Its downpayment
and any preliminary development costs are the only amounts at risk if it fails
to complete a purchase. See "Acquisition of Inventory" for additional
information.
The Company seeks external sources of capital to fund its property acquisitions.
Such sources generally consist of seller, bank or similar financial institution
term financing. In addition, the Company has several secured lines-of-credit for
the acquisition and development of its inventories. See Management's Discussion
and Analysis of Financial Condition and Results of Operations which is
incorporated by reference into Item 7, Part II herein from the Company's 1996
Annual Report. The aggregate amount of inventory acquisition and development
funded through term financing and lines-of-credit during fiscal 1996, fiscal
1995 and fiscal 1994 totaled $12.4 million or 18%, $23.1 million or 32% and
$12.8 million or 33%, respectively.
The Company's continued growth depends upon obtaining outside sources of
capital to finance new property purchases, fund operations, satisfy debt
obligations and provide loans to purchasers of land parcels and timeshare
vacation ownership intervals. In the past, the Company has funded its activities
through various sources, including borrowings under secured and unsecured lines
of credit, sales of notes receivables and the sale of debt and equity
securities. These arrangements require the Company to comply with certain
covenants and retain certain contingent liabilities. As of March 31, 1996, the
Company had outstanding $34.7 million of 8.25% convertible subordinated
debentures, $19.7 million in receivable-backed notes payable and $17.3 million
in lines-of-credit and notes payable, with an aggregate weighted average
interest rate on all such indebtedness of 9.2%. The Company anticipates that it
will continue to require external sources of capital. See Management's
Discussion and Analysis of Financial Condition and Results of Operations which
is incorporated by reference into Item 7, Part II herein from the Company's 1996
Annual Report.
The Company begins to market parcels under its Land Division as soon as
practicable, with the sale of acquired properties typically being completed
within nine to 24 months from closing of the acquisition. The holding period may
be extended in areas where the subdivision approval process is more complex or
in certain larger projects. Land Division sales were $84.9 million, $72.6
million and $60.3 million for fiscal 1996, 1995 and 1994, respectively.
To minimize the risk associated with holding its timeshare inventory, the
Resorts Division sells vacation ownership intervals during construction. Resorts
Division sales were $13.8 million and $5.9 million for fiscal 1996 and 1995,
respectively. Marketing of the first timeshare resort commenced in fiscal 1995
and, accordingly, no sales occurred during fiscal 1994.
The Company seeks to minimize market exposure for inventory held by the
Communities Division by limiting the number of factory-built homes that are
purchased on a speculative basis. The Company attempts to obtain contracts for
sales of homes prior to development. Communities Division sales were $14.7
million, $13.4 million and $3.1 million for fiscal 1996, 1995 and 1994,
respectively.
For information on the Company's revenue recognition policy, see Note 1 to the
Consolidated Financial Statements which are incorporated by reference into Item
8, Part II herein from the Company's 1996 Annual Report to Shareholders.
The Company offers financing of up to 90% of the purchase price of land real
estate sold to all purchasers who qualify for such financing. The Company also
offers financing of up to 90% of the purchase price to timeshare purchasers.
Sales of factory-built manufactured homes under the Communities Division are
financed by third party lenders and, accordingly, the proceeds of such sales are
received entirely in cash. The Company structures its sales and financing
activities so that the purchase money mortgage arising from land sales and the
contracts for deed from timeshare sales loans (the "Receivables") may be pledged
or sold in separate financing transactions to provide liquidity for the Company.
This liquidity allows the Company to continue to provide financing to its
customers for the sale of land and vacation ownership intervals. During fiscal
1996, 1995 and 1994, the Company financed 26%, 24% and 34%, respectively, of its
aggregate sales of real estate which closed during the period and received cash
for the remaining amounts. See further discussion under "Customer Financing" and
Management's Discussion and Analysis of Financial Condition and Results of
Operations which is incorporated by reference into Item 7, Part II herein from
the Company's 1996 Annual Report.
The Receivables originated by the Company are typically pledged to financial
institutions or sold in private placement transactions. In recent years, private
placement Real Estate Mortgage Investment Conduit ("REMIC") financings have
provided substantial capital resources to the Company. In these transactions,
(i) the Company sells or otherwise absolutely transfers a pool of mortgage loans
to a newly-formed special purpose subsidiary, (ii) the subsidiary sells the
mortgage loans to a trust in exchange for certificates representing the entire
beneficial ownership in the trust and (iii) the subsidiary sells one or more
senior classes of the certificates to an institutional investor in a private
placement and retains the remaining certificates, which remaining certificates
are subordinated to the senior classes. See Management's Discussion and Analysis
of Financial Condition and Results of Operations which is incorporated by
reference into Item 7, Part II herein from the Company's 1996 Annual Report.
At March 31, 1996, the Company had 413 full-time and 36 part-time employees. The
Company's executive offices are located at 5295 Town Center Road, Boca Raton,
Florida 33486. Its telephone number at such address is (561) 361-2700.
The Company's common stock is listed on the New York Stock Exchange and on
the Pacific Stock Exchange under the symbol "BXG." The Company's 8.25%
convertible subordinated debentures due 2012 are also listed on the NYSE.
Acquisition of Inventory
In order to provide centralized and uniform controls on the type, location and
amount of inventory that the Company acquires, all inventory acquisitions have
required the approval of the Investment Committee since 1989. The Investment
Committee is comprised of George F. Donovan, President and Chief Executive
Officer, Alan L. Murray, Treasurer and Chief Financial Officer, Daniel C.
Koscher, Vice President, Director of Planning/Budgeting and Assistant Secretary
and Patrick E. Rondeau, Vice President, Director of Legal Affairs and
Clerk/Secretary (all of whom served as members of the Investment Committee
during fiscal 1995 and fiscal 1996). The Investment Committee reviews each
proposed acquisition to determine whether the property meets certain criteria.
The Investment Committee considers such established criteria as the economic
conditions in the area in which the parcel is located, environmental
sensitivity, availability of financing, whether the property is consistent with
the Company's general policies and the anticipated ability of that property to
produce acceptable profit margins and cash flow. Since May 1990, sales of
property approved by the Investment Committee have resulted in average gross
margins in excess of 55%. No assurances can be given that future sales of
property approved by the Investment Committee will yield comparable gross
margins. Prior to the formation of the Investment Committee, the determination
of whether to buy most properties was typically made by the Company's regional
managers, together with one or more members of the Company's senior management.
Land Division
- -------------
The Land Division, through the Company's regional offices, and subject to
Investment Committee review and approval, typically acquires inventory that (i)
is located within one to three hours of a major city, (ii) is suitable for
subdivision, (iii) maintains attractive topographical features and (iv) will
result in an acceptable profit margin and cash flow to the Company based upon
anticipated resale value. Properties are generally subdivided for resale into
parcels ranging in size from one to 35 acres. In fiscal 1996, the Company
acquired over 16,000 acres in 13 separate transactions for a total purchase
price of $14.9 million, or $929 per acre. These properties ranged in size from
46 to 6,200 acres. The 6,200 acres represented a property acquisition in
Arizona. Seller, bank or similar financial institution financing of $9.6
million, or 64% of the $14.9 million total purchase price, was obtained.
The Land Division has several specialists who assist regional management in
locating inventory for acquisition. The Company has established contacts with
numerous land owners and real estate brokers in many of its market areas, and
because of such contacts and its long history of acquiring properties, the
Company is generally in a favorable position to learn of available inventory.
The Company's objective is to develop strong relationships with major property
owners and brokers. Regional offices regularly contact property owners, such as
timber companies, financial institutions and real estate brokers, by a
combination of telephone, mail and personal visits. In addition, the Company
occasionally places advertisements in local and national newspapers indicating
an interest in acquiring land. To date, the Company's regional offices have been
able to locate and acquire adequate quantities of inventory which meet the
criteria established by the Investment Committee to support their operational
activities.
Once an appropriate property is located, the Company begins performing due
diligence procedures and enters into a purchase agreement with the seller. It is
generally the Company's policy to advance only a small downpayment of 1% - 3% of
the purchase price when signing a contract to acquire inventory and to limit the
liquidated damages associated with such contracts to the amount of its
downpayment and any preliminary development costs. In most cases, the Company is
not required to advance the full purchase price or enter into a note payable
obligation until regulatory approvals for the subdivision and sale of at least
the initial phase of the project have been obtained. While local approvals are
being sought, the Company will, in certain instances, engage in test marketing
of the subdivided parcels and, with the consent of the seller and the knowledge
of prospective purchasers, occasionally attempt to pre-sell parcels, subject to
closing its purchase of the property. When the necessary regulatory approvals
have been received, the closing on the property occurs and the Company obtains
title. The time between execution of a purchase agreement and closing on a
property has generally been six to 12 months. Although the Company generally
retains the right to cancel purchase agreements without any loss beyond
forfeiture of the downpayment and preliminary development costs, few purchase
agreements have been canceled.
By requiring, in most cases, that regulatory approvals be obtained prior to
closing and by making small downpayments upon signing purchase agreements, the
Company is typically able to place a number of properties under contract without
expending significant amounts of cash. This strategy enables the Company's Land
Division to reduce (i) the time during which it actually owns specific
properties, (ii) the market risk associated with holding real estate and (iii)
the risk of acquiring property that may not be suitable for sale. It also
provides a source of available properties to meet customer demand. In certain
instances, however, the Company has acquired properties and then held such
properties until their prime marketing seasons.
As of March 31, 1996, the Land Division had aggregate downpayments of $233,000
associated with nine properties under contract for purchase. Such properties
represent 7,982 acres with an aggregate purchase price of $8.9 million, or
$1,114 per acre.
Prior to closing on a purchase of inventory, the Company's policy is to complete
its own environmental assessment of the property. The purpose of the Company's
assessment is to evaluate the impact the proposed subdivision will have on such
items as flora and fauna, wetlands, endangered species, open space, scenic
vistas, recreation, transportation and community growth and character. To obtain
this information, the Company's acquisition specialists typically consult with
various groups and agencies including the appropriate county and state planning
agencies, environmental groups, state heritage programs, soil conservation
agencies and forestry groups. If the Company's environmental assessment
indicates that the proposed subdivision meets environmental criteria and
complies with zoning, building, health and other laws, the Company develops a
formal land use plan, which forms a basis for determining an appropriate
acquisition price. The Company attempts, where possible, to accommodate the
existing topographical features of the land, such as streams, hills, wooded
areas, stone walls, farm buildings and roads. Prior to closing on an
acquisition, the Company will typically have the property surveyed by a
professional surveyor and have soil analyses conducted to determine the
suitability of the site for septic systems. At closing, the Company obtains
title insurance on the property.
Resorts Division
- ----------------
The Company's Resorts Division employs due diligence procedures similar to those
used by the Land Division in locating property for future timeshare resorts. A
full property review, including an environmental assessment, is presented to the
Investment Committee for approval prior to purchase. During the review process,
acquisition specialists analyze market, tourism and demographic data as well as
the quality and diversity of the location's existing attractions to determine
the availability of a variety of recreational opportunities for prospective
purchasers. While the Company's Land Division inventory is expected to turn
frequently, the Company anticipates that each of its timeshare resorts will
generally have a sell-out term in excess of five years. During fiscal 1996, the
Company purchased land in Myrtle Beach, South Carolina for the development of a
timeshare resort. The total purchase price was $3.5 million. In each of fiscal
1994 and fiscal 1995, the Company acquired a property in eastern Tennessee for
development of timeshare resorts.
Communities Division
- --------------------
During fiscal 1996, the Company purchased one parcel for $507,000 located in
Orlando, Florida. To date, the lots from this project have been sold to a home
builder (versus sold on a retail basis which is typical to the Company's Land
Division). The balance of the land supporting the other residential subdivisions
managed under the Communities Division was acquired by the Company in the late
1980's and is primarily comprised of three properties in North Carolina. The
Company entered into the housing industry during fiscal 1994, primarily as a
means to accelerate lot sales of these older projects. The Company does not
intend to expand its communities related activities beyond the projects
currently being marketed.
The Company's net inventory as of March 31, 1996 and April 2, 1995 summarized by
division and classified by major geographic region is set forth in the tables to
follow.
March 31, 1996
------------------------------------------------------------------------
Geographic Region Land Resorts(1) Communities(2) Total
- ----------------- ---- ---------- --------------- -----
Southwest........... $15,118,191 $ --- $ 142,790 $15,260,981
Rocky Mountains ..... 9,299,344 --- 50,800 9,350,144
West ................ 5,923,972 --- --- 5,923,972
Midwest.............. 6,293,008 10,839,389 --- 17,132,397
Southeast............ 2,252,239 5,189,815 13,983,521 21,425,575
Northeast............ 1,982,895 --- --- 1,982,895
Mid-Atlantic......... 2,490,025 --- --- 2,490,025
Canada............... 29,025 --- --- 29,025
Totals............... $43,388,699 $16,029,204 $ 14,177,111 $73,595,014
April 2, 1995
------------------------------------------------------------------------
Geographic Region Land Resorts(1) Communities(2) Total
- ----------------- ---- ---------- --------------- -----
Southwest............ $16,643,459 $ --- $ 1,115,914 $17,759,373
Rocky Mountains ..... 9,308,069 --- 433,933 9,742,002
West ................ --- --- --- ---
Midwest.............. 7,671,471 5,240,911 --- 12,912,382
Southeast............ 2,755,756 --- 11,575,971 14,331,727
Northeast............ 3,044,966 --- --- 3,044,966
Mid-Atlantic......... 4,280,951 --- --- 4,280,951
Canada............... 273,349 --- --- 273,349
Totals............... $43,978,021 $5,240,911 $13,125,818 $62,344,750
(1) Resorts Division inventory as of March 31, 1996, includes land inventory of
$6.1 million and $9.9 million of unit construction-in-progress. Resorts Division
inventory as of April 2, 1995, includes land inventory of $2.3 million and $2.9
million of unit construction-in-progress.
(2) Communities Division inventory as of March 31, 1996, includes land inventory
of $10.5 million and $3.7 million of housing unit construction-in-progress.
Communities Division inventory as of April 2, 1995, includes land inventory of
$9.9 million and $3.2 million of housing unit construction-in-progress.
The increase in the Company's net inventory creates certain risks associated
with the holding of real estate. In the event that the market for real estate or
the economy in general experiences a downturn in the Company's markets of
operations, the Company's ability to sell inventory at current rates of sales
could be materially adversely affected. If inventory is not sold as planned, the
Company will incur additional carrying costs. For further information on the
Company's inventory holdings, see "Uses of Capital" under Management's
Discussion and Analysis of Financial Condition which is incorporated by
reference into Item 7, Part II herein from the Company's 1996 Annual Report.
Marketing and Sale of Inventory
Land Division
- -------------
In general, as soon as a property has been acquired and during the time period
that appropriate improvements are being completed, the Company establishes
selling prices for the individual parcels taking into account such matters as
regional economic conditions, quality as a building site, scenic views, road
frontage and natural features such as lakes, mountains, streams, ponds and
wooded areas. The Company also considers recent sales of comparable parcels in
the area. Initial decisions on pricing of parcels in a given area are made by
the Company's regional managers and, in all cases, are subject to approval by
the Investment Committee.
The most widely used marketing technique is advertising in major newspapers in
metropolitan areas located within a one to three hour drive from the property.
The Company also advertises its land properties in local newspapers. A sales
representative who is knowledgeable about the property answers each inquiry,
discusses the property with the prospective purchaser, attempts to ascertain the
purchaser's needs and determine whether the parcel would be suitable for that
person, and arranges an appointment for the purchaser to visit the property.
Substantially all prospective customers inspect a property before purchasing.
The Land Division also conducts direct mail campaigns to market property through
the use of brochures describing available parcels, as well as television and
radio advertising. During fiscal 1996, the Land Division incurred $6.0 million
in advertising expense, or 7% of its sales of real estate.
The success of the Company's marketing efforts depends heavily on the knowledge
and experience of its sales personnel (substantially all of whom are employees
of the Company). The Company requires that, prior to initiating the marketing
effort for a property, every sales representative walk the property and become
knowledgeable about each parcel and applicable zoning, subdivision and building
code requirements. Continued training programs are conducted, including training
with regional office sales managers, weekly sales meetings and frequent site
visits by an executive officer of the Company. Additionally, the sales staff is
evaluated against performance standards established by the executive officers of
the Company. Substantially all of a sales representative's compensation is
commission-based.
The Company requires its sales staff to provide each customer with a written
disclosure statement regarding the real estate to be sold prior to the time the
customer signs a purchase agreement. Either a U.S. Department of Housing and
Urban Development ("HUD") lot information statement, where required, or a
Company generated "Vital Information Statement" sets forth relevant information
with respect to, and risks associated with, the property and is signed by every
purchaser. The Company believes that each information statement contains all
material and relevant information a customer requires to make an informed
decision as to whether or not to purchase, such as availability and estimated
cost of utilities, restrictions regarding property usage, status of access roads
and information regarding rescission rights.
After deciding to purchase a parcel, the buyer enters into a contract and pays
the Company a deposit of at least 10% of the purchase price. It is the Company's
policy to give purchasers the right to cancel purchase agreements within
specified periods after execution in accordance with statutory requirements. The
closing of a land sale usually occurs two to eight weeks after payment of the
deposit. Upon closing of a land sale, the Company typically delivers a warranty
deed and a recent survey of the property to the buyer. Title insurance is
available at the purchaser's expense.
The table to follow sets forth certain information regarding sales of parcels by
the Land Division for the periods indicated.
Years Ended
------------------------------------------------
March 31, April 2, March 27,
1996 1995 1994
---- ---- ----
Number of parcels sold................................ 2,347 2,397 2,489
Average sales price per parcel........................ $34,856 $30,969 $25,511
Average sales price per parcel excluding a large
acreage bulk sale in each of the Rocky Mountains
and Southeast regions in the most recent year......... $33,628 $30,969 $25,511
Gross margin.......................................... 51% 57% 52%
Certain sales have been deferred under percentage of completion accounting. See
Contracts Receivable and Revenue Recognition under Note 1 to the Consolidated
Financial Statements which is incorporated by reference into Item 7, Part II
herein from the Company's 1996 Annual Report.
The table to follow sets forth the number of parcels sold and the average sales
price per parcel for the Company's Land Division by geographic region for the
fiscal years indicated.
Years Ended
------------------------------ -------------------------------- -------------------------------
March 31, 1996 April 2, 1995 March 27, 1994
-------------- - ------------- --------------
Average Average Average
Number of Sales Price Number of Sales Price Number of Sales Price
Geographic Region Parcels Sold Per Parcel Parcels Sold Per Parcel Parcels Sold Per Parcel
Southwest......... 1,117 $ 37,489 1,107 $ 34,999 940 $ 27,140
West.............. 19 $ 138,347 --- $ --- --- $ ---
Rocky Mountains. 297 $ 44,524 339 $ 32,033 242 $ 34,180
Midwest........... 334 $ 27,451 317 $ 28,740 437 $ 22,767
Southeast......... 223 $ 36,925 289 $ 28,311 376 $ 26,537
Northeast......... 106 $ 12,472 113 $ 19,382 115 $ 17,687
Mid-Atlantic...... 236 $ 21,951 215 $ 23,136 367 $ 20,700
Canada............ 15 $ 11,674 17 $ 10,160 12 $ 13,037
Totals............ 2,347 $ 34,856 2,397 $ 30,969 2,489 $ 25,511
For further information on sales attributable to the Company's Land Division,
see "Results of Operations" under Management's Discussion and Analysis of
Financial Condition and Results of Operations which is incorporated by reference
into Item 7, Part II herein from the Company's 1996 Annual Report.
Resorts Division
- ----------------
The Company requires its sales staff to provide each timeshare customer with a
written disclosure statement regarding the real estate to be sold prior to the
time the customer signs a purchase agreement. A public disclosure statement sets
forth relevant information with respect to vacation ownership at the resort and
is signed by every purchaser. The Company believes that the information
statement contains all material and relevant information a customer requires to
make an informed decision as to whether or not to purchase.
After deciding to purchase a vacation ownership interval, the buyer enters
into a contract and pays the Company a deposit of at least 10% of the purchase
price. It is the Company's policy to give all purchasers the right to cancel
purchase agreements within specified periods after execution in accordance with
statutory requirements. Substantially all timeshare purchasers visit the resort
prior to purchasing.
In the marketing and sale of timeshare intervals, the Company generally targets
family households in the middle income bracket who prefer outdoor recreational
activities at destination locations. The division employs various programs to
reach its target market. The primary means of marketing existing timeshare
property is through direct mail mini-vacation invitations. The division provides
hotel accommodations to prospective purchasers at reduced prices in exchange for
them touring the timeshare resort. Timeshare resorts are staffed with, among
others, sales representatives, sales managers and an on-site manager who
oversees the day-to-day operations, all of whom are employees of the Company.
Sales personnel are generally experienced in resort sales and undergo ongoing
Company sponsored training. During fiscal 1996, total advertising expense for
the Resorts Division was $3.4 million or 25% of the division's $13.8 million in
sales.
The following table sets forth certain information for sales of intervals
associated with the Company's Resorts Division for the periods indicated.
Certain sales have been deferred under percentage of completion accounting. See
Contracts Receivable and Revenue Recognition under Note 1 to the Consolidated
Financial Statements which is incorporated by reference into Item 7, Part II
herein from the Company's 1996 Annual Report.
Years Ended
----------------------------------------
March 31, April 2, March 27,
1996 1995 1994
---- ---- ----
Number of intervals sold................. 1,865 952 ---
Average sales price per interval
interval................................ $7,325 $7,119 $ ---
Gross margin............................ 67% 62% ---
The number of timeshare intervals sold increased to 1,865 during fiscal
1996 compared to 952 for fiscal 1995. During fiscal 1995, all interval sales
were generated from the Company's first resort in Gatlinburg, Tennessee.
During fiscal 1996, 1,374 intervals were sold from the Gatlinburg resort,
484 intervals were sold from the Company's second resort in neighboring
Pigeon Forge, Tennessee and seven intervals were sold from the Company's
resort in Myrtle Beach, South Carolina.
The Company's resort in Gatlinburg, Tennessee consists of a combination of
single-family detached chalet units and apartment-like villa units. The
Company's resort in Pigeon Forge, Tennessee is expected to include sixteen
buildings containing apartment-like villa units. The Myrtle Beach resort, which
is the newest of the Company's resorts, is expected to consist of three
buildings containing apartment-like villa units. The first building of the
Myrtle Beach resort is currently under construction. The oceanfront building is
planned to include 114 units. Each of the Company's three resorts is expected to
be marketed over at least the next four years.
Communities Division
- --------------------
The Company entered into the housing industry during fiscal 1994, primarily as a
means to accelerate lot sales of certain older projects in certain markets.
Marketing of home and lot packages is accomplished primarily through a
combination of print media, supplemented by television advertising. During
fiscal 1996, total advertising expense for the division was $532,000 or 4% of
the division's $14.7 million in sales. The Company works with its home
purchasers in obtaining conventional bank financing through local institutions,
and accordingly, all such sales are received in cash. The closing on a home sale
typically occurs two to six months after payment of the deposit. Upon closing of
a sale, the Company delivers a warranty deed and a recent survey of the property
to the buyer. Title insurance is available at the purchaser's expense.
The following table sets forth certain information for sales associated with the
Company's Communities Division for the periods indicated.
Years Ended
----------------------------------------
March 31, April 2, March 27,
1996 1995 1994
--------- -------- --------
Number of homes/lots sold............... 206 133 44
Average sales price..................... $71,546 $100,866 $70,044
Gross margin............................ 10% 12% 12%
The $14.7 million in fiscal 1996 sales was comprised of 114 manufactured homes
with an average sales price of $75,232, 20 site-built homes with an average
sales price of $198,592, 71 sales of lots-only at an average sales price of
$23,279 and one larger acreage Southwestern bulk lot sale for $530,320. The
$13.4 million in fiscal 1995 sales was comprised of 110 manufactured homes with
an average sales price of $77,243 and 23 site-built homes with an average sales
price of $213,640. Substantially all of the $3.1 million in fiscal 1994 sales
was comprised of manufactured homes. The Company does not intend to expand its
communities related activities beyond the projects currently being marketed.
Total Sales
- -----------
During fiscal 1996, sales attributable to the Company's Land, Resorts and
Communities divisions comprised $84.9 million or 75%, $13.8 million or 12% and
$14.7 million or 13%, respectively, of total consolidated revenues from sales of
real estate.
The tables to follow set forth sales by geographic region and division for the
years indicated.
Year Ended March 31, 1996
--------------------------------------------------------------------------------
Geographic Region Land Resorts Communities Total %
Southwest............ $43,457,483 $ --- $ 2,734,570 $ 46,192,053 40.7%
West................. 2,628,600 --- --- 2,628,600 2.3%
Rocky Mountains ..... 13,223,744 --- 409,817 13,633,561 12.0%
Midwest.............. 9,981,574 13,825,162 --- 23,806,736 21.0%
Southeast............ 8,569,869 --- 11,594,167 20,164,036 17.8%
Northeast............ 1,321,982 --- --- 1,321,982 1.2%
Mid-Atlantic......... 5,500,146 --- --- 5,500,146 4.8%
Canada............... 175,114 --- --- 175,114 .2%
Totals............... $84,858,512 $13,825,162 $14,738,554 $113,422,228 100.0%
=========== =========== =========== ============ ======
Year Ended April 2, 1995
--------------------------------------------------------------------------------
Geographic Region Land Resorts Communities Total %
Southwest............ $38,600,075 $ --- $ 2,012,112 $ 40,612,187 44.2%
Rocky Mountains ..... 10,859,280 --- 3,521,637 14,380,917 15.6%
Midwest.............. 8,297,375 5,886,427 --- 14,183,802 15.4%
Southeast............ 7,846,343 --- 7,881,426 15,727,769 17.1%
Northeast............ 2,190,110 --- --- 2,190,110 2.4%
Mid-Atlantic......... 4,654,483 --- --- 4,654,483 5.1%
Canada............... 172,722 --- --- 172,722 .2%
Totals............... $72,620,388 $5,886,427 $13,415,175 $ 91,921,990 100.0%
=========== ========== =========== ============ ======
Year Ended March 27, 1994
--------------------------------------------------------------------------------
Geographic Region Land Resorts Communities Total %
Southwest............ $23,855,291 $ --- $ 388,890 $24,244,181 38.2%
Rocky Mountains ..... 8,069,444 --- 362,356 8,431,800 13.3%
Midwest.............. 10,520,147 --- 125,716 10,645,863 16.8%
Southeast............ 8,196,901 --- 1,780,995 9,977,896 15.7%
Northeast............ 2,034,000 --- --- 2,034,000 3.2%
Mid-Atlantic......... 7,474,934 --- 424,000 7,898,934 12.5%
Canada............... 156,438 --- --- 156,438 .3%
Totals............... $60,307,155 $ --- $3,081,957 $63,389,112 100.0%
=========== ========== ========== =========== ======
Customer Financing
During fiscal 1996, 1995 and 1994, the Company financed 26%, 24% and 34%,
respectively, of the aggregate purchase price of its sales of real estate to
customers that closed during these periods and received cash for the remaining
amounts. The increase in the percentage of sales financed by the Company from
fiscal 1995 to fiscal 1996 is primarily attributable to an increase in timeshare
sales over the same period; approximately 85% of timeshare sales have
historically been internally financed by the Company as compared to 25% - 35% of
land sales. Timeshare sales accounted for 12% of consolidated sales of real
estate during fiscal 1996, compared to 6% of consolidated sales during fiscal
1995. The lower percentage of sales financed during fiscal 1995 compared to
fiscal 1994 was primarily attributable to (i) an increased willingness on the
part of certain local banks to extend more direct customer lot financing during
fiscal 1995 and (ii) an increased amount of home sales in the revenue mix during
fiscal 1995, the proceeds of which were received entirely in cash. Because of
the increased willingness on the part of certain local banks to extend more
direct customer lot financing since fiscal 1994, the Company recently introduced
a fixed interest rate program directed at obtaining more land sales which are
internally financed with the Company. The program has not materially increased
internally financed land sales to date.
The Company believes its financing is attractive to purchasers who find it
convenient to handle all facets of the purchase of land and vacation ownership
intervals through a single source and because downpayments required by the
Company are similar to those required by banks and mortgage companies which
offer this type of credit.
Land Division
- -------------
The Company offers financing of up to 90% of the purchase price to all
purchasers of its properties who qualify for such financing. The term of
repayment on the financing has historically ranged from five to 15 years
although the Company, by offering reduced interest rates, has been successful in
encouraging customers during recent years to finance their purchases over
shorter terms and provide increased downpayments. Management believes such
strategy has improved the quality of its notes receivable in recent years. A
typical note receivable currently underwritten by the Company has a term of ten
years, bears interest at a fixed interest rate or variable rate tied to the
prime lending rate and is secured by a first lien on the land. During fiscal
1996, 29% of land purchasers qualified for, and received, Company financing.
Such purchasers made an average downpayment of 22% of the purchase price.
Resorts Division
- ----------------
The Company also offers financing of up to 90% of the purchase price to its
timeshare purchasers. During fiscal 1996, almost all timeshare purchasers
elected to receive the Company's financing and provided an average downpayment
of 16%. The typical financing extended by the Company on a timeshare interval
provides for a term of seven years and a fixed interest rate. At the closing,
the Company and the purchaser execute a contract for deed agreement. After the
obligation is paid in full, the Company delivers a deed to the purchaser.
Total Loans
- -----------
The weighted average interest rate on notes receivable was 12.4% at each March
31, 1996 and April 2, 1995. The table below sets forth additional information
relating to the Company's notes receivable.
March 31, 1996 April 2, 1995
Notes receivable secured by land ...................... $ 26,243,222 $ 37,089,481
Notes receivable secured by timeshare intervals........ 11,667,049 4,311,362
-------------- --------------
Notes receivable, gross ............................... 37,910,271 41,400,843
Reserve for loan losses................................ ( 896,469) ( 1,089,652)
-------------- --------------
Notes receivable, net.................................. $ 37,013,802 $40,311,191
============ ==============
Approximately 55% of the Company's notes receivable secured by land bear
interest at variable rates, while approximately 45% bear interest at fixed
rates. The average interest rate charged on loans secured by land was 11.6% at
March 31, 1996. All of the Company's timeshare loans bear interest at fixed
rates. The average interest rate charged on loans secured by timeshare intervals
was 14.2% at March 31, 1996.
Loan Underwriting
Land Division
- -------------
The Company has established loan underwriting criteria and procedures designed
to reduce credit losses on its loan portfolio. The loan underwriting process
includes reviewing the applicant's credit history, verifying employment and
income as well as calculating certain debt-to-income ratios. The primary focus
of the Company's underwriting is to determine the applicant's ability to repay
the loan in accordance with its terms. This assessment is based on a number of
factors, including the relationship of the applicant's required monthly payment
to disposable income. The Company also examines the applicant's credit history
through various credit reporting agencies. In order to verify an applicant's
employment status, the Company generally contacts the applicant's employer. The
Company also obtains current pay stubs, recent tax returns and other tax forms
from the applicant. Loans by the Company are made solely to finance land sold by
the Company.
Customer financing on Land Division sales requires the submission of a completed
and signed credit application, purchase and sale agreement and pre-authorized
checking agreement accompanied by a voided check, if applicable, to the credit
department. All credit decisions are made at the Company's corporate
headquarters. Loan amounts under $50,000 are approved by designated personnel
located in the Company's corporate headquarters, while loan amounts of $50,000
or more require approval from a senior executive officer. In addition, rejected
applications and any material exceptions to the underwriting policy are also
reviewed by senior management. Customers are notified of the reasons for credit
denial by mail.
The Company encourages customers to increase their downpayment and reduce the
loan term through the structure of its loan programs. Customers receive a lower
rate of interest as their downpayment increases and the loan term shortens.
Additionally, the Company encourages its customers to make timely payments
through a pre-authorized payment arrangement. Customers who do not choose a
pre-authorized payment plan are charged interest at a rate which is one percent
greater than the prevailing rate. Approximately 90% of purchasers using the
Company's financing have historically participated in the pre-authorized payment
plan.
After the credit decision has been made, the credit department categorizes the
file as either approved, pending or declined. Upon receipt of a credit approval,
the regional office schedules the closing with the customer. Closings are
typically conducted at the office of the Company's local attorney or settlement
agent, although in some cases the closing may take place at the sales site or by
mail.
When the original closing documents are received from the closing agent, the
Company verifies that the loan closed under terms approved by the Company's
credit department. A quality control audit is performed to verify that required
documents have been received and that they have been prepared and executed
correctly. If any revisions are required, notification is sent to the regional
office.
A loan file typically includes a copy of the signed security instrument, the
mortgage note, a copy of the deed, Truth-in-Lending disclosure, purchase and
sale agreement, credit application, local counsel opinion, Vital Information
Statement or purchaser's acknowledgment of receipt of HUD lot information
statement, HUD settlement statement and a copy of the assignment of mortgage and
an original note endorsement from the Company's subsidiary originating the sale
and the loan to the Company (if applicable). After the initial closing documents
are received, the recorded mortgage and assignment and original title insurance
policy are obtained in order to complete the loan file.
Resorts Division
- ----------------
The Company also extends financing for timeshare sales. Timeshare financing is
not subject to the same loan underwriting criteria established for Land Division
loans. Customer financing on timeshare sales requires (i) receipt of a minimum
downpayment of 10% of the purchase price and (ii) a contract for deed and other
closing documents between the Company and the customer. The Company encourages
customers to make increased downpayments by offering a lower interest rate. In
addition, customers who do not elect to participate in the Company's
preauthorized payment plan are charged interest at a rate which is one
percent greater than the prevailing rate. See "Collection Policies" below.
Collection Policies
Land Division
- -------------
Collection efforts and delinquency information are managed at the Company's
corporate headquarters. Servicing of the Receivables is handled by a staff of
experienced collectors, assisted by an on-line mortgage collection computer
system. Unless circumstances otherwise dictate, collection efforts are generally
made by mail and telephone. Collection efforts begin when an account is ten days
past due, at which time the Company mails a reminder letter. Attempts are then
made to contact the borrower via telephone to determine the reason for the
delinquency and to bring the account current. The determination of how to work a
delinquent loan is based upon many factors, including the borrower's payment
history and the reason for the current inability to make timely payments. If no
agreement is made or the borrower does not abide by the agreement, collection
efforts continue until the account is either brought current or legal action is
commenced. If not accelerated sooner, the Company declares the loan in default
when the loan becomes 60 days delinquent. When the loan is 90 days past due, the
accrual of interest is stopped (unless the loan is considered an in-substance
foreclosure loan, in which case all accrued interest is reversed since the
Company's means of recovery is determined to be through resale of the underlying
collateral and not through collection on the note) and the Credit/Collection
Manager determines the action to be taken.
Resorts Division
- ----------------
Consistent with industry practice in the areas where the Company has operations,
timeshare Receivables are documented by contracts for deed and the Company
retains title to the unit until the obligation is paid in full. Accordingly, no
foreclosure process is required in the event of a default. In the event that a
contract for deed becomes delinquent 10 days, a reminder letter is mailed to the
customer. If the customer fails to bring the account current, a late notice is
mailed when the account is 15 days delinquent (and telephone contact commences).
After an account is 45 days delinquent, the Company typically sends a third
letter advising the customer that they have 15 days within which to bring the
account current. Under the terms of the contract for deed, the borrower is in
default when the account becomes 60 days delinquent. At this time a default
letter is sent advising the borrower that they have 30 days to bring the account
current or lose their contractual interest in the timeshare unit. When the
account becomes 90 days delinquent, the Company forwards a final letter
informing the purchaser that the contract for deed has been terminated. At such
time, the timeshare interval can be resold to a new purchaser.
Total Receivables
- -----------------
At March 31, 1996, approximately 7% or $2.8 million of the aggregate $39.2
million principal amount of Receivables which were held by the Company or by
third parties under financings for which the Company had a recourse liability,
were more than 30 days past due. At April 2, 1995, approximately 5% or $2.1
million of the aggregate $43.2 million principal amount of Receivables which
were held by the Company or by third parties under financings for which the
Company had a recourse liability, were more than 30 days past due. In cases of
default on lot sales, the Company may take title to the parcel in lieu of
foreclosure. If the Company is unable to obtain a deed in lieu of foreclosure,
the Company forecloses on the mortgage securing such note. As indicated above,
timeshare Receivables represent contracts for deed and, accordingly, no
foreclosure process is required. Following a default on a timeshare note, the
contract for deed can be terminated. The Company recorded loan loss provisions
of $345,000, $792,000 and $795,000 for fiscal 1996, 1995 and 1994, respectively.
In fiscal 1996, the Company charged $538,000 against its reserve for loan losses
to reflect the difference between the unpaid balance of non-performing
Receivables and the estimated net realizable value of the reacquired inventory,
compared to $672,000 charged in fiscal 1995 and $797,000 in fiscal 1994.
Sales of Receivables/Pledging of Receivables
Since 1986, the Company has sold or pledged substantially all of its Receivables
originations, generally retaining the right and obligation to service the
Receivables. Typically, the Company transfers the Receivables to its special
purpose finance subsidiaries, which in turn enter into institutional financing
transactions or securitizations. The Receivables are typically sold with limited
or no recourse. In the case of Receivables pledged, the Company generally must
maintain a debt to eligible collateral rate (based on outstanding principal
balance of the collateral) of 90%. The Company is obligated to pledge additional
eligible Receivables or make additional principal payments in order to maintain
this collateralization rate. Repurchases and additional principal payments have
not been material to date. At March 31, 1996, the Company was subject to limited
recourse requirements on approximately $1.3 million of Receivables sold. The
delinquency on such Receivables was immaterial at March 31, 1996. See "Sources
of Capital" under Management's Discussion and Analysis of Financial Condition
which is incorporated by reference into Item 7, Part II herein from the
Company's 1996 Annual Report.
As discussed above, private placement REMIC financings have provided substantial
capital resources to the Company. Under the terms of these transactions, the
Receivables are sold to a REMIC trust and the Company has no obligation to
repurchase the Receivables due to default by the borrowers. The Company does,
however, have the obligation to repurchase the Receivables in the event that
there is any material defect in the loan documentation and related
representations and warranties as of the time of sale. See Notes 8 and 14 to the
Consolidated Financial Statements which are incorporated by reference into Item
8, Part II herein from the Company's 1996 Annual Report to Shareholders.
Receivables Servicing
Receivables servicing includes collecting payments from borrowers and remitting
such funds to the owners, lenders or investors in such Receivables, accounting
for Receivables principal and interest, making advances when required,
contacting delinquent borrowers, foreclosing in the event that defaults are not
remedied and performing other administrative duties. The Company's obligation to
provide Receivables servicing and its rights to collect fees are set forth in a
servicing agreement. The Company has the obligation and right to service all of
the Receivables it originates and retains the obligation and right with respect
to substantially all of the Receivables it sells. The Company typically receives
an annual servicing fee of approximately .5% of the outstanding scheduled
principal balance, which is deducted from payments received on substantially all
of the Company's servicing portfolio. At March 31, 1996, the Receivables
servicing portfolio, representing Receivables originated and sold, totaled $70.9
million.
Customer Service
The Company emphasizes customer satisfaction and maintains two full-time
customer service representatives in its Boca Raton headquarters to respond to
customer inquiries. At closing, all purchasers are provided with a toll-free
customer service phone number to facilitate any additional information requests.
Customer service surveys are sent to each purchaser to measure customer
satisfaction and to alert the Company to problems, if any.
Regulation
The real estate industry is subject to extensive regulation. The Company is
subject to compliance with various federal, state and local environmental,
zoning and other statutes and regulations regarding the acquisition, subdivision
and sale of real estate and timeshare interests and various aspects of its
financing operations. The Company believes that it is in compliance in all
material respects with such regulations.
The Company's Land and Communities divisions are subject to the Interstate Land
Sales Full Disclosure Act which establishes strict guidelines with respect to
the marketing and sale of land in interstate commerce. HUD has enforcement
powers with respect to this statute. In some instances, the Company has been
exempt from HUD registration requirements because of the size or number of the
subdivided parcels and the limited nature of its offerings. The Company, at its
discretion, may formally request an exemption advisory opinion from HUD to
confirm the exempt status of any particular offering. Several such exemption
requests have been submitted to, and approved by, HUD. In those cases where the
Company and its legal counsel determine parcels must be registered to be sold,
the Company files registration materials disclosing financial information
concerning the property, evidence of title and a description of the intended
manner of offering and advertising such property. The Company bears the cost of
such registration, which includes legal and filing fees. Many states also have
statutes and regulations governing the sale of real estate. Consequently, the
Company regularly consults with counsel for assistance in complying with
federal, state and local law. The Company must obtain the approval of numerous
governmental authorities for its acquisition and marketing activities and
changes in local circumstances or applicable laws may necessitate the
application for, or the modification of, existing approvals.
The Company's Resorts Division sells vacation ownership interests to customers
through weekly intervals in fully furnished vacation units. Many state and local
authorities have imposed restrictions and additional regulations on developers
of vacation ownership properties. The Company's resorts in Gatlinburg,
Tennessee; Pigeon Forge, Tennessee; and Myrtle Beach, South Carolina are subject
to various regulatory requirements including state and local approvals. Although
these restrictions have generally increased the cost of selling vacation
ownership intervals, the Company has not experienced material difficulties in
complying with such regulations or operating within such restrictions. In
compliance with state laws, the Company provides its timeshare purchasers with a
public disclosure statement which contains, among other items, detailed
information about the surrounding vicinity, the resort and the purchaser's
rights and obligations as an interval owner.
The Company's customer financing activities are also subject to
extensive regulation, which may include, Truth-in-Lending-Reg. Z, Fair Debt
Collection Practices Act, Equal Credit Opportunity Act-Reg. B, Electronic
Funds Transfer Act-Reg. E, Home Mortgage Disclosure Act-Reg. C, Unfair or
Deceptive Acts or Practices-Reg. AA and Right to Financial Privacy Act. The
Company believes that it is in compliance in all material respects with such
regulations.
In fiscal 1988, the Company established regional operations in Ontario, Canada.
The Company's operations in Canada are subject to compliance with all applicable
Canadian federal and provincial environmental, zoning, financing and other
statutes regarding the acquisition, subdivision, financing and sale of real
estate. During fiscal 1996, 1995 and 1994, the Company's operations in Canada
accounted for .2%, .2% and .3%, respectively, of the Company's total sales
during those periods.
Management is not aware of any pending regulatory contingencies that are
expected to have a materially adverse impact on the Company.
Competition
The real estate industry is highly competitive. In each of its markets, the
Company competes against numerous developers and others in the real estate
business, some of which are larger and have greater financial resources than the
Company. Competition may be generally smaller with respect to the Company's lot
sales in the more rural markets in which it operates. The Company believes that
it can compete on the basis of its reputation and the price, location and
quality of the products it offers for sale, as well as on the basis of its
experience in land acquisition, development and sale. Although the Resorts
Division competes with various high profile and well-established operators, the
Company believes that it can compete on the basis of its general reputation and
the price, location and quality of its timeshare resorts. In its customer
financing activities, the Company competes with banks, mortgage companies, other
financial institutions and governmental agencies offering financing of real
estate. In recent years, the Company has experienced increased competition with
respect to the financing of land sales as evidenced by the reduction in the
percentage of land sales internally financed during fiscal 1995 and fiscal 1996.
The Company believes that, based on its interest rates and repayment schedules,
the financing packages it offers are convenient for customers and competitive
with those of other institutions which offer such financing.
Personnel
As of March 31, 1996, the Company had 413 full-time and 36 part-time employees.
Of the 449 employees, 80 are located at the Company's headquarters in Boca
Raton, Florida and 369 are located in regional offices throughout the United
States and Canada (the 369 field personnel include 6 divisional presidents, 9
regional and district managers, 206 sales personnel, 26 project managers, 9
acquisition specialists and 113 administrative and other support personnel).
None of the Company's employees are represented by a collective bargaining unit,
and the Company believes that relations with its employees generally are
excellent.
Executive Officers of the Company
The following table sets forth certain information regarding the executive
officers of the Company.
Name Age Position
George F. Donovan 57 President and Chief Executive Officer
Alan L. Murray 49 Treasurer and Chief Financial Officer
Daniel C. Koscher 38 Vice President, Director of Planning/Budgeting and Assistant Secretary
Patrick E. Rondeau 49 Vice President, Director of Corporate Legal Affairs and Clerk/Secretary
Allan J. Herz 36 Vice President and Director of Mortgage Operations
Joan A. McCormick 53 Vice President and Director of Management Information Systems and
Administration
Susan J. Milanese 37 Vice President and Director of Human Resources
Mary Jo Wiegand 32 Vice President, Director of Investor Relations and Controller
George F. Donovan joined the Company as a Director in 1991 and was
appointed President and Chief Operating Officer in October, 1993 and Chief
Executive Officer in December, 1993. Mr. Donovan was President of Leisure
Management International from 1991 to 1993. From 1989 to 1991, Mr. Donovan
served as President and Chief Executive Officer of Thousand Trails. Prior to
that time, Mr. Donovan served as an officer of a number of other recreational
real estate corporations. Mr. Donovan holds a B.S. in Electrical Engineering.
Alan L. Murray joined the Company in July, 1990 and was elected Treasurer in
September, 1990. Mr. Murray was elected Chief Financial Officer in May, 1991.
Prior to joining the Company, Mr. Murray had held the position of President of
Mount Holly, Inc. and Northeast Country Properties, Inc. Mr. Murray has also
practiced as a certified public accountant in southern Vermont and western
Massachusetts, held the position of corporate controller of Felters Company and
practiced as a certified public accountant in the audit department of Coopers &
Lybrand. Mr. Murray holds a B.A. in Economics and a M.S. in Accounting.
Daniel C. Koscher joined the Company in 1986. During his tenure, he has served
in various financial management positions including Divisional Controller,
Director of Accounting and Chief Accounting Officer. In June, 1990, Mr. Koscher
was elected Vice President and in August, 1995, he became Director of
Planning/Budgeting. Prior to his employment with the Company, Mr. Koscher was
employed by the William Carter Company, a manufacturing company located in
Needham, Massachusetts. He has also been employed by Cipher Data Products, Inc.,
a computer peripheral manufacturer located in San Diego, California as well as
the State of Nevada as an audit agent. Mr. Koscher holds a B.B.A. in Accounting
along with a M.B.A.
Patrick E. Rondeau joined the Company in July, 1990 and was elected Vice
President and Director of Corporate Legal Affairs in September, 1990 and
Clerk/Secretary in February, 1993. For more than five years prior to his
employment with the Company, Mr. Rondeau was a senior partner of Freedmen,
DeRosa & Rondeau, located in North Adams, Massachusetts, which firm serves as
legal counsel to the Company on various matters. Mr. Rondeau holds a B.A. in
Political Science along with a J.D.
Allan J. Herz joined the Company in April, 1992 as a senior financial
analyst and was named Director of Mortgage Operations in September, 1992. Mr.
Herz was elected Vice President in 1993. From 1982 to 1992, Mr. Herz worked for
AmeriFirst Federal Savings Bank based in Miami, Florida. During his 10 year
tenure with the bank, he held various lending positions, the most recent being
Division Vice President in Consumer Lending. Mr. Herz holds a B.B.A. and a
M.B.A.
Joan A. McCormick joined the Company in November, 1993 as its Director of
Management Information Systems and Administration and was elected Vice President
in February, 1995. Ms. McCormick has over 20 years of experience in information
systems management in the real estate, hotel, banking and manufacturing fields.
Prior to joining the Company, Ms. McCormick was Assistant Vice President MIS for
Atlantic Gulf Communities. She has also held management positions with
Arvida/JMB Partners Ltd., Southeast Banking Corporation and General Motors
Corporation. She holds a B.A. in Business Administration.
Susan J. Milanese joined the Company in January, 1988. During her tenure, she
has held various management positions in the Company including Assistant to the
Chief Financial Officer, Divisional Controller and Director of Accounting. In
April, 1995, she was elected Vice President and Director of Human Resources.
From 1983 to 1988, Ms. Milanese was employed by General Electric Company in
various financial management positions including the corporate audit staff. Ms.
Milanese holds her B.B.A in Accounting.
Mary Jo Wiegand joined the Company in August, 1988. During her tenure, she
has held various management positions within the accounting, finance and
treasury departments, including managing external financial reporting. In
February, 1995, she was elected Vice President and Director of Investor
Relations and in August, 1995 she was named Controller. From 1985 to 1988, Ms.
Wiegand was employed by Price Waterhouse. Ms. Wiegand holds a B.S. in
Accounting.
The Company's By-Laws provide that, except as otherwise provided by law or the
charter and by-laws of the Company, the President, Treasurer and the Clerk hold
office until the first meeting of the Board of Directors following the next
annual meeting of shareholders and until their respective successors are chosen
and qualified and that all other officers hold office for the same period unless
a shorter time is specified in the vote appointing such officer or officers.
Item 2. PROPERTIES.
The Company's principal executive office is located in Boca Raton, Florida in
approximately 14,000 square feet of leased space. On March 31, 1996, the Company
also maintained regional sales offices in the Northeastern, Mid-Atlantic,
Southeastern, Midwestern, Southwestern, Rocky Mountain and Western regions of
the United States as well as the Province of Ontario, Canada.
Item 3. LEGAL PROCEEDINGS.
In the ordinary course of its business, the Company from time to time becomes
subject to claims or proceedings relating to the purchase, subdivision, sale
and/or financing of real estate. Additionally, from time to time, the Company
becomes involved in disputes with existing and former employees. The Company
believes that substantially all of the above are incidental to its business. See
Note 10 to the Consolidated Financial Statements which is incorporated by
reference into Item 8, Part II herein from the Company's 1996 Annual Report to
Shareholders.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On February 15, 1996, the Company's shareholders approved an amendment to the
Company's restated articles of organization changing the name of the Company
from Patten Corporation to Bluegreen Corporation. The results of voting are set
forth below.
For.......................................... 15,101,509
Against...................................... 453,794
Abstain...................................... 179,089
Non-votes.................................... 3,807,080
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The Company's Common Stock is listed on the New York Stock Exchange and on the
Pacific Stock Exchange under the symbol "BXG." The Company's 8.25% Convertible
Subordinated Debentures due 2012 are also listed on the NYSE. The following
table sets forth, for the periods indicated, the high and low sales price per
share of Common Stock as reported on the NYSE.
Fiscal 1996 (1): High Low
----- ---
First Quarter.......................... 3 3/4 3 1/8
Second Quarter......................... 5 3/4 3 1/4
Third Quarter.......................... 5 4
Fourth Quarter......................... 5 3 7/8
Fiscal 1995 (1): High Low
----- ---
First Quarter.......................... 3 7/8 3
Second Quarter......................... 3 7/8 2 7/8
Third Quarter.......................... 3 5/8 3
Fourth Quarter......................... 3 3/4 2 7/8
(1) Because the Common Stock dividends declared in March, 1996 and March, 1995
were not material in terms of the number of shares or their impact on the
prevailing market price, the high and low sales prices have not been adjusted.
As of May 1, 1996, there were approximately 2,200 registered holders of record
of Common Stock and 5,000 holders of Common Stock in "street name." No cash
dividends have been declared on the Company's Common Stock since the third
quarter of fiscal 1990. The registrar and transfer agent for the Company's
Common Stock is Chemical Mellon Shareholders Services, Ridgefield Park, New
Jersey 07660.
Item 6. SELECTED FINANCIAL DATA.
The selected financial data set forth below was derived from the respective
year's audited financial statements and should be read in conjunction with the
Consolidated Financial Statements, including the notes thereto, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" which are incorporated by reference into Items 7 and 8, Part II
herein from the Company's 1996 Annual Report to Shareholders.
(Dollars in Thousands Except Average Sales Price Data and Per Share Data)
March 31, April 2, March 27, March 28, March 29,
1996 1995 1994 1993 1992
INCOME STATEMENT DATA
Sales of real estate..................... $113,422 $ 91,922 $ 63,389 $ 53,349 $ 45,100
Interest income and other (1)........... 7,388 7,264 7,952 10,191 16,515
-------- -------- -------- -------- --------
Total revenues......................... 120,810 99,186 71,341 63,540 61,615
Income from operations................... 10,794 10,029 6,778 3,604 1,089
Net income............................... 6,467 6,137 4,931 3,457 1,368
Net income per common share.............. .30 .29 .23 .16 .06
OPERATING DATA
Gross margin on sales of real estate (2). 47.6% 50.9% 51.5% 46.7% 36.3%
Average sales price of land parcels sold (3) $ 34,856 $ 30,296 $ 25,468 $ 20,839 $ 20,967
Number of land parcels sold (3).......... 2,347 2,397 2,489 2,560 2,151
Average sales price of timeshare intervals $ 7,325 $ 7,119 $ --- $ --- $ ---
sold (3).................................
Number of timeshare intervals sold (3)... 1,865 952 --- --- ---
Average sales price of homes/lots sold... $ 71,546 $100,866 $ 70,044 $ --- $ ---
Number of homes/lots sold................ 206 133 44 --- ---
Average yield earned on notes receivable at
period end............................ 12.4% 12.4% 10.9% 11.0% 12.1%
BALANCE SHEET DATA
- ------------------
Notes receivable, net (4)................ $ 37,014 $ 40,311 $ 44,203 $ 35,653 $118,836
Inventory, net (4)....................... 73,595 62,345 38,793 28,245 28,345
Total assets............................. 154,963 152,222 139,617 122,853 182,193
Short-term debt.......................... --- --- --- 6,500 ---
Current portion of lines-of-credit, notes
payable and receivable-backed notes 8,938 10,856 5,741 5,684 13,503
payable..................................
Long-term portion of lines-of-credit, notes
payable and receivable-backed notes 28,073 29,090 31,556 14,418 76,209
payable..................................
8.25% convertible subordinated debentures 34,739 34,739 34,739 34,739 34,739
Shareholders' equity..................... 64,698 58,040 51,854 46,868 43,378
Book value per common share.............. $ 3.15 $ 2.98 $ 2.91 $ 2.74 $ 2.54
Shares outstanding at end of year (000's) 20,533 19,471 17,796 17,083 17,061
(5)......................................
ASSET QUALITY RATIOS
Charge-offs, net of recoveries, to average
Receivables 1.4% 1.6% 3.6% 3.0% .7%
(4)......................................................
Reserve for loan losses to period end
Receivables 2.4% 2.6% 2.2% 4.3% 3.6%
(4).....................................................
1) Interest income for fiscal 1996, 1995, 1994 and 1993 includes a $1.1
million gain, a $411,000 loss, a $238,000 loss and a $695,000 gain,
respectively, from sales of notes receivable in connection with private
placement REMIC transactions.
2) Gross margin is computed as the difference between the sales price and
the related cost of inventory, including the cost of improvements and amenities,
divided by the sales price.
3) Average sales price and unit sales data exclude the effect of deferring
recognition of revenue under percentage of completion accounting.
4) The Company adopted Statement of Financial Accounting Standard No. 114,
"Accounting by Creditors for Impairment of a Loan" (FAS No. 114) on April 3,
1995. FAS No. 114 amends the guidance for insubstance foreclosures contained in
Financial Accounting Release No. 28. Under FAS No. 114, a collateral dependent
loan shall be reported as real estate only if the lender has taken possession of
the inventory. Accordingly, reclassifications have been made between notes
receivable, reserve for loan losses and inventory for fiscal 1992 through 1995
to conform to the current year presentation. Furthermore, asset quality ratios
have been restated for these same periods.
5) Fiscal 1994 shares outstanding reflect the payment of a 4% common stock
dividend. Fiscal 1995 shares outstanding reflect the payments of
two additional common stock dividends of 4% and 5%. Fiscal 1996 shares
outstanding reflect the payment of a fourth common stock dividend of 5%.
Earnings per share data have been restated for all periods presented to give
affect to all common stock dividends paid. Book value per share has not been
restated to give affect to cumulative dividends paid through March 31, 1996, and
rather, reflects the shares outstanding as of the respective fiscal period end.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information provided under the heading "Management's Discussion and Analysis
of Financial Condition and Results of Operations" on pages 18 - 27 of the
Company's 1996 Annual Report to Shareholders is incorporated herein by
reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Financial Statements of the Company and its subsidiaries and
the related Notes thereto and report of independent certified public accountants
on pages 28 - 40 of the Company's 1996 Annual Report to Shareholders are
incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
For information with respect to the Company's Directors, see the information
provided under the headings "Proposals 1 and 2 - Fixing of Number of Directors
at Six and Election of Named Directors" and "Certain Transactions and Other
Information" in the Company's definitive proxy statement to be filed for Annual
Meeting of Shareholders to be held on July 25, 1996 ("Proxy Statement"), which
sections are incorporated herein by reference. Information concerning the
executive officers of the Company appears in Part I of this Annual Report on
Form 10-K.
The present members of the Board of Directors of the Company are:
Joseph C. Abeles, Trustee, Abel Associates Trust
George F. Donovan, President and Chief Executive Officer, Bluegreen
Corporation
Ralph A. Foote, Esq., Senior Partner, Conley & Foote
Frederick M. Myers, Esq., Senior Partner, Cain, Hibbard, Myers & Cook
Stuart A. Shikiar, President, Shikiar Asset Management
Bradford T. Whitmore, General Partner, Grace Brothers, Ltd.
Section 16 Compliance
The information provided under the heading "Section 16 Compliance" in the
Company's Proxy Statement is incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION.
The information provided under the headings "Proposals 1 and 2 - Fixing of
Number of Directors at Six and Election of Named Directors," "Board of Directors
and its Committees," "Executive Compensation" and "Certain Transactions and
Other Information" in the Company's Proxy Statement is incorporated herein by
reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security ownership of certain beneficial owners: The information
provided under the heading "Proposals 1 and 2 - Fixing of Number of
Directors at Six and Election of Named Directors" in the Company's
Proxy Statement is incorporated herein by reference.
(b) Security ownership of management: The information concerning
beneficial ownership of the Company's common stock by its Directors and
executive officers provided under the heading "Proposals 1 and 2 -
Fixing of Number of Directors at Six and Election of Named Directors"
in the Company's Proxy Statement is incorporated herein by reference.
(c) Changes in control: None.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) Transactions with management and others: The information provided
under the headings "Proposals 1 and 2 - Fixing of Number of Directors
at Six and Election of Named Directors," "Executive Compensation" and
"Certain Transactions and Other Information" in the Company's Proxy
Statement is incorporated herein by reference.
(b) Certain business relationships: The information concerning
relationships regarding Directors, or nominees for Director, that exist
or have existed during the Company's fiscal year ended March 31, 1996
provided under the headings "Proposals 1 and 2 - Fixing of Number of
Directors at Six and Election of Named Directors" and "Certain
Transactions and Other Information" in the Company's Proxy Statement is
incorporated herein by reference.
(c) Indebtedness of management: The information provided under the
heading "Certain Transactions and Other Information" in the Company's
Proxy Statement is incorporated herein by reference.
(d) Transactions with promoters: None.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)(1) and (a)(2) List of Financial Statements and Schedules.
1. The following Consolidated Financial Statements and Notes thereof of the
Company and its subsidiaries and the report of independent certified public
accountants relating thereto, included in the Company's 1996 Annual Report
to Shareholders on pages 28 - 40 are incorporated by reference into Item 8
hereof.
Page
Report of Independent Certified Public Accountants 28
Consolidated Balance Sheets as of March 31, 1996 and April 2, 1995 29
Consolidated Statements of Income for each of the three years in the
period ended March 31, 1996 30
Consolidated Statements of Shareholders' Equity for each of the three
years in the period ended March 31, 1996 30
Consolidated Statements of Cash Flows for each of the three years in
the period ended March 31, 1996 31 - 32
Notes to Consolidated Financial Statements 33 - 40
2. All financial statement schedules are omitted because they are not
applicable or is not present in amounts sufficient to require submission of
the schedules or the required information is presented in the Consolidated
Financial Statements or related notes.
(a)(3) List of Exhibits.
The exhibits which are filed with this Annual Report on Form 10-K or which are
incorporated herein by reference are set forth in the Exhibit Index which
appears at pages 22 - 24 hereof, which Exhibit Index is incorporated herein by
reference.
(b) Reports on Form 8-K.
The Company filed a report on Form 8-K on March 8, 1996 under item 5 which
reported a change in the Company's name from Patten Corporation to Bluegreen
Corporation.
The Company also filed a report on Form 8-K on May 31, 1996 under item 5 which
reported a private placement sale transaction. See Note 14 to the Consolidated
Financial Statements which are incorporated by reference into Item 8, Part II
herein from the Company's 1996 Annual Report to Shareholders.
(c) Exhibits.
See (a)(3) above.
(d) Financial Statement Schedules.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BLUEGREEN CORPORATION
(Registrant)
Date: June 21, 1996 By: /s/ GEORGE F. DONOVAN
George F. Donovan, President and Chief Executive
Officer
Date: June 21, 1996 By: /s/ ALAN L. MURRAY
Alan L. Murray, Treasurer and Chief Financial
Officer
(Principal Financial Officer)
Date: June 21, 1996 By: /s/ MARY JO WIEGAND
Mary Jo Wiegand,
Vice President, Director of Investor Relations and
Controller
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on the 21st day of June, 1996.
Signature Title
/s/ GEORGE F. DONOVAN President, Chief Executive Officer and
George F. Donovan Director
/s/ ALAN L. MURRAY Treasurer and Chief Financial Officer
Alan L. Murray (Principal Financial Officer)
/s/ MARY JO WIEGAND Vice President, Director of Investor
Mary Jo Wiegand Relations and Controller
(Principal Accounting Officer)
/s/ JOSEPH C. ABELES Director
Joseph C. Abeles
/s/ RALPH A. FOOTE Director
Ralph A. Foote
/s/ FREDERICK M. MYERS Director
Frederick M. Myers
/s/ STUART A. SHIKIAR Director
Stuart A. Shikiar
/s/ BRADFORD T. WHITMORE Director
Bradford T. Whitmore
Number Description
3.1 Restated Articles of Organization, as amended.
3.2 Restated and amended By-laws of the Registrant(incorporated by
reference to exhibit 3.3 to Annual Report on Form 10-K for the
fiscal year ended April 2, 1995).
4.4 Specimen of Common Stock Certificate (incorporated by
reference to exhibit of same designation to Registration
Statement on Form S-1, File No. 33-13076).
4.6 Form of Indenture dated as of May 15, 1987 relating to the
Company's 8.25% Convertible Subordinated Debentures due 2012,
including Form of Debenture (incorporated by reference to
exhibit of same designation to Registration Statement on Form
S-1, File No. 33-13753).
10.24 Form of Agreement dated June 27, 1989 between the Registrant and
Peoples Heritage Savings Bank relating to sale of mortgage notes
receivable (incorporated by reference to exhibit of same
designation to Annual Report on Form 10-K for the fiscal year
ended April 2, 1989).
10.47 Amended and Restated Loan and Security Agreement entered into
as of January 9, 1990 by Patten Receivables Finance Corporation
VI, Finova Capital Corporation (fka Greyhound Real Estate Finance
Corporation) and the Registrant as guarantor (incorporated by
reference to exhibit of same designation to Annual Report on
Form 10-K for the fiscal year ended April 1, 1990).
10.53 Modification dated July 16, 1990 of Amended and Restated Loan and
Security Agreement entered into as of January 9, 1990, by Patten
Receivables Finance Corporation VI, Finova Capital Corporation
(fka Greyhound Real Estate Finance Corporation) and the
Registrant as Guarantor (incorporated by reference to exhibit of
same designation to Annual Report on Form 10-K for the fiscal
year ended April 1, 1990).
10.58 Amendment No. 2 dated March 23, 1991 to the Amended and Restated
Loan and Security Agreement entered into as of January 9, 1990,
by Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor (incorporated by reference to exhibit
of same designation to Annual Report on Form 10-K for the fiscal
year ended March 31, 1991).
10.77 Registrant's Amended 1988 Outside Directors Stock Option
Plan (incorporated by reference to exhibit of same designation
to Annual Report on Form 10-K for the fiscal year ended March 29,
1992).
10.79 Registrant's Retirement Savings Plan (incorporated by reference
to Registration Statement on Form S-8, File No. 33-48075).
10.82 Employment Agreement dated as of December 20, 1993 by and
between the Registrant and George F. Donovan (incorporated by
reference to exhibit of same designation to Quarterly Report on
Form 10-Q for the period ended December 26, 1993).
10.84 Pooling and Servicing Agreement dated as of April 15, 1994, among
Patten Receivables Finance Corporation IX, the Registrant, Patten
Corporation REMIC Trust, Series 1994-1 and First Trust National
Association, as Trustee (incorporated by reference to exhibit of
same designation to Annual Report on Form 10-K for the fiscal
year ended March 27, 1994).
10.85 Loan and Security Agreement by and between the Registrant
and Foothill Capital Corporation dated as of October 29, 1993
(incorporated by reference to exhibit of same designation to
Annual Report on Form 10-K for the fiscal year
ended March 27, 1994).
10.86 First Amendment dated December 23, 1993 to Loan and Security
Agreement entered into on October 29, 1993 by and between the
Registrant and Foothill Capital Corporation (incorporated by
reference to exhibit of same designation to Annual Report on Form
10-K for the fiscal year ended March 27, 1994).
10.88 Amendment No. 6 dated May 12, 1993 to Amended and Restated Loan
and Security Agreement entered into as of January 9, 1990 by
Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor (incorporated by reference to exhibit
of same designation to Annual Report on Form 10-K for the fiscal
year ended March 27, 1994).
10.89 Amendment No. 7 dated February 18, 1994 to Amended and Restated
Loan and Security Agreement entered into as of January 9, 1990 by
Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor (incorporated by reference to exhibit
of same designation to Annual Report on Form 10-K for the fiscal
year ended March 27, 1994).
10.90 Loan Agreement dated as of August 12, 1994 by and among
Patten Homes, Inc., the Registrant and Branch Banking and
Trust Company (incorporated by reference to exhibit of
same designation to Quarterly Report on Form 10-Q for
the period ended September 25, 1994).
10.91 Amendment No. 9 dated June 29, 1994 to Amended and Restated Loan
and Security Agreement entered into as of January 9, 1990 by
Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor (incorporated by reference to exhibit
of same designation to Quarterly Report on Form 10-Q for the
period ended September 25, 1994).
10.93 Stock Purchase Agreement dated as of November 22, 1994 by and
among Harry S. Patten and the Purchasers named therein
(incorporated by reference to exhibit of same designation to
Current Report on Form 8-K dated November 22, 1994).
10.94 Amendment No. 10 dated December 14, 1994 to Amended and Restated
Loan and Security Agreement entered into as of January 9, 1990 by
Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor (incorporated by reference to exhibit
of same designation to Annual Report on Form 10-K for the fiscal
year ended April 2, 1995).
10.95 Amended and Restated Loan and Security Agreement dated as of
December 14, 1994 by and between Finova Capital Corporation (fka
Greyhound Real Estate Finance Corporation) and the Registrant
(incorporated by reference to exhibit of same designation to
Annual Report on Form 10-K for the fiscal year ended April 2,
1995).
10.96 Registrant's 1995 Stock Incentive Plan (incorporated by
reference to exhibit to Registration Statement on Form S-1,
File No. 33-61687 ).
10.97 Registrant's 1988 Amended Outside Director's Stock Option Plan
(incorporated by reference to exhibit to Registration Statement
on Form S-1, File No. 33-61687 ).
10.98 Pooling and Servicing Agreement dated as of June 15, 1995, among
Patten Receivables Finance Corporation X, the Registrant, Patten
Corporation REMIC Trust, Series 1995-1 and First Trust National
Association, as Trustee (incorporated by reference to exhibit to
Current Report on Form 8-K dated July 12, 1995).
10.99 Pooling and Servicing Agreement dated as of April 15, 1996, among
Bluegreen Receivables Finance Corporation I, the Registrant,
Bluegreen Corporation REMIC Trust, Series 1996-1 and First Trust
National Association, as Trustee (incorporated by reference to
exhibit to Current Report on Form 8-K dated May 15, 1996).
10.100 Amendment No.3 dated November 21, 1991 to Amended and Restated
Loan and Security Agreement entered into as of January 9, 1990
by Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor.
10.101 Amendment No. 4 dated January 30, 1992 to Amended and Restated
Loan and Security Agreement entered into as of January 9, 1990
by Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor.
10.102 Amendment No. 5 dated October, 1992 to Amended and Restated Loan
and Security Agreement entered into as of January 9, 1990 by
Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor.
10.103 Amendment No. 8 dated March 25, 1994 to Amended and Restated Loan
and Security Agreement entered into as of January 9, 1990 by
Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor.
10.104 Amendment No. 11 dated October 31, 1995 to Amended and Restated
Loan and Security Agreement entered into as of January 9, 1990
by Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor.
10.105 Amendment No. 12 dated May 1, 1996 to Amended and Restated Loan
and Security Agreement entered into as of January 9, 1990 by
Patten Receivables Finance Corporation VI, Finova Capital
Corporation (fka Greyhound Real Estate Finance Corporation) and
the Registrant as Guarantor.
10.106 Construction Loan Agreement by and between the National Bank
of South Carolina and Bluegreen Resorts, Inc.(fka Patten Resorts,
Inc.) dated February 28, 1996.
10.107 Loan and Security Agreement by and between Heller Financial, Inc.
and Bluegreen Resorts, Inc.(fka Patten Resorts, Inc.) dated
February 28, 1996.
10.108 Acquisition, Construction and Receivables Loan and Security
Agreement by and between Finova Capital Corporation and the
Registrant dated June 9, 1995.
10.109 Amendment No. 1 dated April 12, 1995 to the Amended and Restated
Loan and Security Agreement entered into on December 14, 1994
between Finova Capital Corporation and the Registrant.
10.110 Amendment No. 2 dated November 21, 1995 to the Amended and
Restated Loan and Security Agreement entered into on December 14,
1994 between Finova Capital Corporation and the Registrant.
10.111 Amendment No. 2 dated February 16, 1995 to Amended Loan and
Security Agreement entered into on October 29, 1993 by and
between the Registrant and Foothill Capital Corporation.
10.112 Amendment No. 3 dated March 28, 1995 to Amended Loan and Security
Agreement entered into on October 29, 1993 by and between the
Registrant and Foothill Capital Corporation.
10.113 Amendment No. 4 dated June 15, 1995 to Amended Loan and Security
Agreement entered into on October 29, 1993 by and between the
Registrant and Foothill Capital Corporation.
10.114 Amendment No. 5 dated June 26, 1995 to Amended Loan and Security
Agreement entered into on October 29, 1993 by and between the
Registrant and Foothill Capital Corporation.
10.115 Amendment No. 6 dated March 8, 1996 to Amended Loan and Security
Agreement entered into on October 29, 1993 by and between the
Registrant and Foothill Capital Corporation.
11.1 Statement re: Computation of Earnings Per Share (such information
is incorporated by reference to the Statement of Income of the
Consolidated Financial Statements appearing on page 30 of the
Company's 1996 Annual Report to Shareholders, which is an
exhibit hereto).
13.1 1996 Annual Report to Shareholders (with the exception of the
information incorporated by reference included in Items 7 and 8,
the 1996 Annual Report to Shareholders is not deemed filed as
part of this Annual Report on Form 10-K).
23.1 Consent of Ernst & Young LLP.
27 Financial Data Schedule.