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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 30, 1997
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: $60,962,843 based upon the closing sale price of the
Company's Common Stock on the New York Stock Exchange on June 13, 1997 ($3.625
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 a current conversion price of $8.24 per share.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date: 20,601,871 shares of
Common Stock, $.01 par value, outstanding as of June 13, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
Specifically identified portions of the Company's 1997 Annual Report to
Shareholders (the "Annual Report") are incorporated by reference into Part II
and IV 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 30, 1997 (the "Proxy Statement") 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.......................... 6
Customer Financing....................................... 10
Loan Underwriting........................................ 11
Collection Policies...................................... 12
Sales of Receivables/Pledging of Receivables............. 13
Receivables Servicing.................................... 14
Customer Service......................................... 14
Regulation............................................... 14
Competition.............................................. 15
Personnel................................................ 15
Executive Officers of the Company........................ 15
Item 2. PROPERTIES......................................................... 16
Item 3. LEGAL PROCEEDINGS.................................................. 16
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................ 17
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS ...................................... 17
Item 6. SELECTED FINANCIAL DATA........................................... 17
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS......................................... 17
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....................... 17
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.......................................... 17
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............... 17
Item 11.
EXECUTIVE COMPENSATION..................................................... 18
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT... 18
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................... 18
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.. 18
Signatures................................................................. 20
Exhibit Index.............................................................. 21
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 residential use and (ii) land
intended for general recreational use. Land intended for residential use is
fully improved and generally includes provisions for water, electricity and
telephone as well as the construction of access roads leading to the subdivided
lots. 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 and operation of timeshare properties which are located in
popular, regional family vacation destinations. The Division is also
responsible for the marketing and sale of timeshare interests in its resorts,
generally through one week vacation ownership intervals.
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.
(defined below). Sales of the North Carolina inventories are expected to yield
gross margins lower than those historically experienced under the Land Division.
The Company is liquidating its current communities inventories through a
combination of bulk sales and retail sales and the Company does not intend to
expand its communities related activities beyond the projects currently being
marketed.
The Company recorded provisions for the write-down of certain inventories
totaling $8.2 million during the first quarter of fiscal 1997. 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 1997 Annual Report.
The Company's Land, Resorts and Communities divisions accounted for 66% ($72.6
million), 25% ($27.4 million) and 9% ($9.7 million), respectively, of
consolidated sales of real estate for fiscal 1997. 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 1997
Annual Report.
All inventory acquisitions require 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, in the case of the Land Division, 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. The downpayment and any preliminary development costs are
the only amounts at risk if the Company fails to complete a purchase. See
"Acquisition of Inventory".
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 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 1997 Annual
Report. The aggregate amount of inventory acquisition and development funded
through term financing and lines-of-credit during fiscal 1997, 1996 and 1995
totaled $26.9 million or 29%, $12.4 million or 18% and $23.1 million or 32%,
respectively.
The Company's continued growth depends upon obtaining outside sources of capital
to finance new property purchases and development, 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 30, 1997, the
Company had outstanding $34.7 million of 8.25% convertible subordinated
debentures, $21.1 million in receivable-backed notes payable and $35.9 million
in lines-of-credit and notes payable, with an aggregate weighted average
interest rate on all such indebtedness of 9.0% at March 30, 1997. 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 1997 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 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 $72.6 million, $84.9 million
and $72.6 million for fiscal 1997, fiscal 1996 and 1995, respectively.
To minimize the risk associated with holding its timeshare inventory, the
Resorts Division sells vacation ownership intervals during construction. Resorts
Division sales were $27.4 million, $13.8 million and $5.9 million for fiscal
1997 1996 and 1995, respectively.
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 $9.7
million, $14.7 million and $13.4 million for fiscal 1997, 1996 and 1995,
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 1997 Annual Report.
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 mortgages 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
1997, 1996 and 1995, the Company financed 30%, 26% and 24%, respectively, of its
aggregate sales of real estate which closed during the applicable period and
received cash for the remaining amounts. See "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 1997 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. To date, REMIC
transactions have included land receivables. 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 1997 Annual Report.
At March 30, 1997, the Company had 453 full-time and 45 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; Daniel C. Koscher, Senior Vice President, Land Division; L. Nicholas
Gray, Senior Vice President, Resorts Division and Patrick E. Rondeau, Vice
President, Director of Legal Affairs and Clerk. 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 the establishment of the
Investment Committee, sales of property approved by it have generally resulted
in average gross margins of at least 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 1997, the Company
acquired 19,254 acres in 23 separate transactions for a total purchase price of
$29.7 million, or $1,541 per acre. These properties ranged in size from seven to
4,454 acres. Seller, bank or similar financial institution financing of $15.0
million, or 51% of the $29.7 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 generally
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 historically.
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.
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 obtains information with respect to resort acquisition opportunities
through interaction by the Company's management team with resort operators,
lodging companies or financial institutions with which the Company has
established business relationships. To date, all resorts have been purpose-built
for timesharing use. The Company's Resorts Division employs due diligence
procedures similar to those used by the Land Division in acquiring property for
future 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. Specifically, the Company evaluates
the following factors, among others, to determine the viability of a potential
new timeshare resort: (i) supply versus demand ratios for vacation intervals in
the particular market, (ii) alternative lodging establishments in the relevent
market, (iii) barriers to entry that would limit competition and (iv) the
market's growth as a vacation destination. 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 of about seven years.
During the year ended March 30, 1997, the Company acquired 8 acres located in
Gatlinburg, Tennessee in two separate transactions for an aggregate purchase
price of $100,000. The acreage purchased is contiguous with the Company's
Mountainloft project and will be used for additional unit development.
Communities Division
The land supporting the subdivisions managed under the Communities Division was
acquired by the Company primarily in the late 1980's and comprises three
properties in North Carolina and one property in Florida. 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 30, 1997 and March 31, 1996 summarized
by division and classified by major geographic region is set forth in the tables
to follow.
March 30, 1997
------------------------------------------------------------------------
Geographic Region Land Resorts(1) Communities(2) Total
Southeast............ $ 7,997,611 $15,028,592 $ 5,685,074 $28,711,277
Midwest.............. 8,050,969 12,495,034 --- 20,546,003
Southwest............ 19,959,473 --- --- 19,959,473
Rocky Mountains ..... 7,533,939 --- --- 7,533,939
West ................ 5,511,879 --- --- 5,511,879
Mid-Atlantic......... 4,015,647 --- --- 4,015,647
Northeast............ 382,341 --- --- 382,341
Totals............... $53,451,859 $27,523,626 $ 5,685,074 $86,660,559
March 31, 1996
------------------------------------------------------------------------
Geographic Region Land Resorts(1) Communities(2) Total
Southeast............ $ 2,252,239 $ 5,189,815 $ 13,983,521 $21,425,575
Midwest.............. 6,293,008 10,839,389 --- 17,132,397
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
Mid-Atlantic......... 2,490,025 --- --- 2,490,025
Northeast............ 1,982,895 --- --- 1,982,895
Canada............... 29,025 --- --- 29,025
Totals............... $43,388,699 $16,029,204 $ 14,177,111 $73,595,014
(1) Resorts Division inventory as of March 30, 1997, consists of land inventory
of $5.4 million and $22.1 million of unit construction-in-progress. Resorts
Division inventory as of March 31, 1996, consists of land inventory of $6.1
million and $9.9 million of unit construction-in-progress.
(2) Communities Division inventory as of March 30, 1997, consists of land
inventory of $1.5 million and $4.2 million of housing unit
construction-in-progress. Communities Division inventory as of March 31,
1996, consists of land inventory of $10.5 million and $3.7 million of
housing unit construction-in-progress.
The Company attempts to maintain inventory at a level adequate to support
anticipated sales of real estate in its various operating regions. In addition,
in its Land Division, the Company has (since 1996) committed more resources to
fewer projects in locations where the Company has historically achieved strong
operating results such as Texas (Southwest), North Carolina and South Carolina
(Southeast), Tennessee (Midwest), Virginia (Mid-Atlantic) and Arizona (West).
The following table sets forth additional data with respect to each of the
properties managed under the Resorts Division.
Mountainloft Laurel Crest Shore Crest Harbour Lights The Falls Village
Location Galinburg, TN Pigeon Forge, TN Myrtle Beach, SC Myrtle Beach, SC Branson, MO
Date acquired 11/93 2/95 9/95 3/97 4/97
Number of units
completed or
under
construction (1) 76 28 114 --- 12
Number of
additional units
planned (1)(2) 100 160 86 240 200
Average interval
selling price
through
March 30, 1997 $7,800 $8,000 $10,000 --- ---
Number of
intervals sold
through
March 30, 1997 3,777 1,460 775 --- ---
(1) The number of units completed, under construction or planned are intended
to be sold in 52 weekly intervals.
(2) There can be no assurance that the Company will have the resources to
complete all such planned units or that such units will be sold at
favorable prices. 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 1997 Annual Report.
There are inherent risks associated with carrying increased levels of inventory.
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 1997 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 1997, the Land Division incurred $6.3 million
in advertising expense, or 9% of the division's $72.6 million in sales.
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 30, March 31, April 2,
1997 1996 1995
Number of parcels sold................... 2,057 2,347 2,397
Average sales price per parcel........... $38,572 $34,856 $30,969
Gross margin (1)......................... 45% 51% 57%
1) Gross margin is computed as the difference between the sales price and the
related cost of inventory (including the cost of improvements, amenities
and in certain cases capitalized interest), divided by the sales price. A
charge of $3.4 million was recorded during 1997 for the write-down of
certain inventories. See Note 4 to the Consolidated Financial Statements
which is incorporated by reference into Item 7, Part II herein from the
1997 Annual Report.
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 1997 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 30, 1997 March 31, 1996 April 2, 1995
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......... 1,131 $ 39,719 1,117 $ 37,489 1,107 $ 34,999
Southeast......... 291 $ 35,736 223 $ 36,925 289 $ 28,311
Rocky Mountains. 218 $ 40,499 297 $ 44,524 317 $ 28,740
West.............. 34 $ 147,816 19 $ 138,347 --- $ ---
Mid-Atlantic...... 152 $ 31,605 236 $ 21,951 215 $ 23,136
Northeast......... 53 $ 20,982 106 $ 12,472 113 $ 19,382
Canada............ 3 $ 10,545 15 $ 11,674 17 $ 10,160
Totals............ 2,057 $ 38,572 2,347 $ 34,856 2,397 $ 30,969
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 1997 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 Company's primary means of
selling vacation ownership intervals is through an on-site sales presentation.
The division employs various programs to reach its target market and generate
prospects for these sales presentations including targeted mailings and direct
mail mini-vacation invitations. The division provides hotel accommodations to
prospective purchasers at reduced prices in exchange for their touring the
timeshare resort. In addition, cross-marketing to current owners and referral
sales are becoming more significant. 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 1997, total advertising expense for
the Resorts Division was $7.6 million or 28% of the division's $27.4million in
sales.
The attractiveness of vacation interval ownership has been enhanced
significantly by the availability of exhange networks that allow interval owners
to exchange the occupancy right in their vacation interval for a particular
year, for an interval at another participating network resort at either the same
or different time. The Company's resorts at March 30, 1997 qualify for exchange
with Interval International, one of the largest exchange organizations.
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 1997 Annual Report.
Years Ended
----------------------------------------
March 30, March 31, April 2,
1997 1996 1995
Number of intervals sold........... 3,195 1,865 952
Average sales price per interval... $8,362 $7,325 $7,119
Gross margin (1)................... 71% 67% 62%
1) Gross margin is computed as the difference between the sales price and the
related cost of inventory (including the cost of improvements, amenities
and in certain cases capitalized interest), divided by the sales price.
For further information on sales attributable to the Company's Resorts 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 1997 Annual Report.
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 1997, total advertising expense for the division was $278,000 or 3% of
the division's $9.7 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 30, March 31, April 2,
1997 1996 1995
Number of homes/lots sold....... 146 206 133
Average sales price............. $66,422 $71,546 $100,866
Gross margin (1)................ 3% 10% 12%
1) Gross margin is computed as the difference between the sales price and the
related cost of inventory (including the cost of improvements) divided by
the sales price. A charge of $4.8 million was recorded during 1997 for the
write-down of certain inventories managed under the Communities Division.
See Note 4 to the Consolidated Financial Statements which is incorporated
by reference into Item 7, Part II herein from the 1997 Annual Report.
For further information on sales attributable to the Company's Communities
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 1997 Annual Report.
Total Sales
During fiscal 1997, sales attributable to the Company's Land, Resorts and
Communities divisions was $72.6 million or 66%, $27.4 million or 25% and $9.7
million or 9%, 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 30, 1997
--------------------------------------------------------------------------------
Geographic Region Land Resorts Communities Total %
Southwest............ $41,586,115 $ --- $ 157,000 $ 41,743,115 38.1%
Southeast............ 8,299,410 7,682,005 9,363,246 25,344,661 23.1%
Midwest.............. 3,970,953 19,743,566 --- 23,714,519 21.6%
Rocky Mountains ..... 8,828,680 --- 154,750 8,983,430 8.2%
West................. 4,875,073 --- --- 4,875,073 4.4%
Mid-Atlantic......... 3,917,096 --- --- 3,917,096 3.6%
Northeast............ 1,112,033 --- --- 1,112,033 1.0%
Canada............... 31,634 --- --- 31,634 .0%
Totals............... $72,620,994 $27,425,571 $ 9,674,996 $109,721,561 100.0%
Year Ended March 31, 1996
--------------------------------------------------------------------------------
Geographic Region Land Resorts Communities Total %
Southwest............ $43,457,483 $ --- $ 2,734,570 $ 46,192,053 40.7%
Southeast............ 8,569,869 --- 11,594,167 20,164,036 17.8%
Midwest.............. 9,981,574 13,825,162 --- 23,806,736 21.0%
Rocky Mountains ..... 13,223,744 --- 409,817 13,633,561 12.0%
West................. 2,628,600 --- --- 2,628,600 2.3%
Mid-Atlantic......... 5,500,146 --- --- 5,500,146 4.8%
Northeast............ 1,321,982 --- --- 1,321,982 1.2%
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%
Southeast............ 7,846,343 --- 7,881,426 15,727,769 17.1%
Midwest.............. 8,297,375 5,886,427 --- 14,183,802 15.4%
Rocky Mountains ..... 10,859,280 --- 3,521,637 14,380,917 15.6%
Mid-Atlantic......... 4,654,483 --- --- 4,654,483 5.1%
Northeast............ 2,190,110 --- --- 2,190,110 2.4%
Canada............... 172,722 --- --- 172,722 .2%
Totals............... $72,620,388 $5,886,427 $13,415,175 $ 91,921,990 100.0%
Customer Financing
During fiscal 1997, 1996 and 1995, the Company financed 30%, 26% and 24%,
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
1995 to 1997 is primarily attributable to an increase in timeshare sales over
the same period. Timeshare sales accounted for 25% of consolidated sales of real
estate during 1997, compared to 12% of consolidated sales during 1996 and 6% of
sales during 1995. Almost all timeshare buyers finance with the Company
(compared to 14% of land buyers in fiscal 1997).
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.
An average note receivable underwritten by the Company during fiscal 1996 and
1997 has a term of ten years. Most notes receivable bear interest at a fixed
interest rate or variable rate tied to the prime lending rate and are secured by
a first lien on the land. During fiscal 1997, 14% 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 1997, 94% of timeshare purchasers elected to
receive the Company's financing and provided an average downpayment of 15%. The
average financing extended by the Company on a timeshare interval during fiscal
1996 and 1997 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 13.3% and 12.4% at
March 30, 1997 and March 31, 1996, respectively. The table below sets forth
additional information relating to the Company's notes receivable.
March 30, 1997 March 31, 1996
Notes receivable secured by land ............... $ 12,334,283 $ 26,243,222
Notes receivable secured by timeshare intervals. 23,501,163 11,667,049
Notes receivable, gross ........................ 35,835,446 37,910,271
Reserve for loan losses......................... ( 1,216,121) ( 896,469)
Notes receivable, net........................... $ 34,619,325 $ 37,013,802
Approximately 69% of the Company's notes receivable secured by land bear
interest at variable rates, while approximately 31% bear interest at fixed
rates. The average interest rate charged on loans secured by land was 12.0% at
March 30, 1997. All of the Company's timeshare loans bear interest at fixed
rates. The average interest rate charged on loans secured by timeshare intervals
was 15.7% at March 30, 1997.
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
pre-authorized 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 such customer has 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
he/she has 30 days to bring the account current or lose his/her 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 30, 1997, approximately 6% or $2.1 million of the aggregate $36.7
million principal amount of loans which were held by the Company or by third
parties under sales transactions where the Company had a recourse liability,
were more than 30 days past due. Of the $36.7 million principal amount of loans,
$35.8 million were held by the Company, while approximately $840,000 were
associated with programs under which the Company has a limited recourse
liability. In most cases of limited recourse liability, the recourse to the
Company terminates when the principal balance of the loan becomes 70% or less of
the original selling price of the property underlying the loan. At March 31,
1996, approximately 7% or $2.8 million of the aggregate $39.2 million principal
amount of loans which were held by the Company or by third parties under sales
transactions where the Company had a recourse liability, were more than 30 days
past due.
Reserve for loan losses as a percentage of period end notes receivable was 3.4%
and 2.4% at March 30, 1997 and March 31, 1996, respectively. The adequacy of the
Company's reserve for loan losses is determined by management and reviewed on a
regular basis considering, among other factors, historical frequency of default,
loss experience, present and expected economic conditions as well as the quality
of Receivables. The increase in the reserve for loan losses as a percent of
period end loans is primarily the result of the portfolio consisting of more
timeshare receivables where historical default rates exceed those on land
receivables.
The table below sets forth activity in the reserve for estimated loan losses.
Reserve for loan losses, April 2, 1995................. $1,089,652
Provision for losses................................... 344,718
Charge-offs............................................ (537,901)
Reserve for loan losses, March 31, 1996................ 896,469
Provision for losses................................... 1,008,271
Charge-offs............................................ (688,619)
Reserve for loan losses, March 30, 1997................ $1,216,121
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. In the case of land receivables, the Company typically
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 pledged loans) 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 30, 1997, the Company was subject to limited recourse requirements on
approximately $840,000 of Receivables sold. The delinquency on such Receivables
was immaterial at March 30, 1997. 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 1997 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 Note 8 to the
Consolidated Financial Statements which are incorporated by reference into Item
8, Part II herein from the 1997 Annual Report.
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 (through
REMICs). 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 30, 1997, the Receivables servicing portfolio, representing Receivables
originated and sold, approximated $71.5 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.
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 low percentage of
land sales internally financed during fiscal 1995 through fiscal 1997. 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 30, 1997, the Company had 453 full-time and 45 part-time employees.
Of the 498 employees, 82 were located at the Company's headquarters in Boca
Raton, Florida and 416 were located in regional offices throughout the United
States and Canada (the field personnel include 239 field employees supporting
the Company's Land Division as follows: 4 land divisional presidents, 7 land
regional and district managers, 123 land sales personnel, 14 land project
managers, 10 land acquisition specialists and 81 land administrative and other
support personnel. In addition, the Company employed 177 field employees
supporting the Company's Resorts Division as follows: 4 timeshare divisional
Presidents/regional directors, 100 timeshare sales personnel, 1 director of
development and 72 timeshare 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 58 President and Chief Executive Officer
Daniel C. Koscher 39 Senior Vice President - Land Division
L. Nicholas Gray 50 Senior Vice President - Resorts Division
Patrick E. Rondeau 50 Senior Vice President, Director of Corporate Legal Affairs and Clerk
Allan J. Herz 37 Vice President and Director of Mortgage Operations
Joan A. McCormick 54 Vice President and Director of Management Information Systems
Susan J. Milanese 38 Vice President and Director of Human Resources
Mary Jo Wiegand 33 Vice President, Director of Investor Relations, Controller and Treasurer
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.
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 1990, Mr. Koscher was
elected Vice President and in 1995 he became Director of Planning/Budgeting. In
1997, he became Senior Vice President, Land Division. 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.
L. Nicholas Gray joined the Company in 1995 to oversee the Company's timeshare
resorts operation and was named Senior Vice President in 1997. Mr. Gray has over
25 years of experience in the hospitality, timeshare and related resort
industries. Mr. Gray served as Director of Development for Resort Condominium
International, a timeshare exchange organization, from 1993 to 1994. Prior to
that time, Mr. Gray was Executive Vice President and General Manager for resort
developments of Thousand Trails from 1989 to 1991 and Fairfield Communities from
1979 to 1989.
Patrick E. Rondeau joined the Company in 1990 and was elected Vice President and
Director of Corporate Legal Affairs. He became Clerk in 1993 and Senior Vice
President in 1997. 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 1992 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 1993 as its Director of Management
Information Systems 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 Corporation. 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 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 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 1988. During her tenure, she has held
various management positions within the accounting, finance and treasury
departments, including managing external financial reporting. In 1995, she was
elected Vice President, Director of Investor Relations and Controller. In 1997,
she was named acting Treasurer. From 1985 to 1988, Ms. Wiegand was employed by
Price Waterhouse. Ms. Wiegand holds a B.S. in Accounting.
John F. Chiste will be joining the Company in July, 1997 as Treasurer and Chief
Financial Officer. From January, 1997 to June, 1997, Mr. Chistee was employed by
Compscript, Inc. From December, 1992 to January, 1997, he served as the Chief
Financial Officer, Secretary and Treasurer of Computer Integration Corporation,
a publicly held distribution company which provides information products and
services to corporations nation wide. From 1983 through 1992, Mr. Chiste
practiced as a Certified Public Accountant with Ernst & Young, LLP.
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 17,000 square feet of leased space. On March 30, 1997, 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 are incorporated by
reference into Item 8, Part II herein from the 1997 Annual Report.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The information provided on page 15 of the 1997 Annual Report is
incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA.
The information provided on page 17 of the 1997 Annual Report is
incorporated herein by reference.
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 - 33 of
the 1997 Annual Report 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 35 - 48 of the 1997 Annual Report 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 Seven and Election of Named Directors" and "Certain Transactions
and Other Information" in the 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, Private Investor
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
J. Larry Rutherford, President and Chief Executive Officer, Atlantic Gulf
Communities Corporation
Stuart A. Shikiar, President, Shikiar Asset Management Inc.
Bradford T. Whitmore, General Partner, Grace Brothers, Ltd.
Section 16 Compliance
The information provided under the heading "Section 16(a) Beneficial Ownership
Reporting Compliance" in the 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 Seven and Election of Named Directors," "Board of
Directors and its Committees," "Compensation Committee Report on Executive
Compensation", "Compensation of Chief Executive Officer", "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) The information provided under the heading "Proposals 1 and 2 -
Fixing of Number of Directors at Seven and Election of Named
Directors" in the Proxy Statement is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) The information provided under the headings "Proposals 1 and 2 -
Fixing of Number of Directors at Seven and Election of Named
Directors," "Executive Compensation" and "Certain Transactions and
Other Information" in the Company's Proxy Statement is incorporated
herein by reference.
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 thereto of
the Company and its subsidiaries and the report of independent
certified public accountants relating thereto, included in the 1997
Annual Report on pages 35 - 48 are incorporated by reference into Item
8 hereof:
Page
Consolidated Balance Sheets as of March 30, 1997 and March 31, 1996 35
Consolidated Statements of Operations for each of the three years in the period
ended March 30, 1997 36
Consolidated Statements of Shareholders' Equity for each of the three years
in the period ended March 30, 1997 37
Consolidated Statements of Cash Flows for each of the three years in the period
ended March 30, 1997 38 - 39
Notes to Consolidated Financial Statements 40 - 47
Report of Independent Certified Public Accountants 48
2. All financial statement schedules are omitted because they are not
applicable, are 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 21 - 24 hereof.
(b) Reports on Form 8-K.
None.
(c) Exhibits.
See (a)(3) above.
(d) Financial Statement Schedules.
All financial statement schedules are omitted because they are not applicable,
are 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.
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 25, 1997 By: /s/ GEORGE F. DONOVAN
George F. Donovan, President and Chief Executive
Officer
Date: June 25, 1997 By: /s/ MARY JO WIEGAND
Mary Jo Wiegand,
Vice President, Director of Investor Relations,
Treasurer 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 25th day of June, 1997.
Signature Title
/s/ GEORGE F. DONOVAN President, Chief Executive Officer and Director
George F. Donovan
/s/ MARY JO WIEGAND Vice President, Director of Investor Relations,
Mary Jo Wiegand Treasurer 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/ J. LARRY RUTHERFORD Director
J. Larry Rutherford
/s/ STUART A. SHIKIAR Director
Stuart A. Shikiar
/s/ BRADFORD T. WHITMORE Director
Bradford T. Whitmore
Number Description Page
3.1 Restated Articles of Organization, as amended (incorporated by reference to
exhibit of same designation to Annual Report on Form 10-K for the year
ended March 31, 1996).
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).
10.24Form 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).
10.47Amended 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).
10.53Modification 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).
10.58Amendment 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).
10.59Amendment 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 (incorporated
by reference to exhibit 10.100 to Annual Report on Form 10-K for the year
ended March 31, 1996).
10.60Amendment 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 (incorporated
by reference to exhibit 10.101 to Annual Report on Form 10-K for the year
ended March 31, 1996).
10.61Amendment 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 (incorporated
by reference to exhibit 10.102 to Annual Report on Form 10-K for the year
ended March 31, 1996).
10.62Amendment 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 10.88 to Annual Report on Form 10-K for the fiscal
year ended March 27, 1994).
10.63Amendment 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 10.89 to Annual Report on Form 10-K for the fiscal
year ended March 27, 1994).
10.64Amendment 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 (incorporated
by reference to exhibit 10.103 to Annual Report on Form 10-K for the year
ended March 31, 1996).
10.65Amendment 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 10.91 to Quarterly Report on Form 10-Q for the
period ended September 25, 1994).
10.66Amendment 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 10.94 to Annual Report on Form 10-K for the fiscal
year ended April 2, 1995).
10.67Amendment 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 (incorporated
by reference to exhibit 10.104 to Annual Report on Form 10-K for the year
ended March 31, 1996).
10.68Amendment 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 (incorporated
by reference to exhibit 10.105 to Annual Report on Form 10-K for the year
ended March 31, 1996).
10.77Registrant'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).
10.78Registrant'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 ).
10.79Registrant's 1995 Stock Incentive Plan (incorporated by reference to
exhibit to Registration Statement on Form S-1, File No. 33-61687 ).
10.80Registrant's Retirement Savings Plan (incorporated by reference to
Registration Statement on Form S-8, File No. 33-48075).
10.85Loan 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).
10.86First 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).
10.87Amendment 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 (incorporated by reference to exhibit
10.111 to Annual Report on Form 10-K for the year ended March 31, 1996).
10.88Amendment 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 (incorporated by reference to exhibit
10.112 to Annual Report on Form 10-K for the year ended March 31, 1996).
10.89Amendment 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 (incorporated by reference to exhibit 10.113 to Annual
Report on Form 10-K for the year ended March 31, 1996).
10.90Amendment 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 (incorporated by reference to exhibit 10.114 to Annual
Report on Form 10-K for the year ended March 31, 1996).
10.91Amendment 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 (incorporated by reference to exhibit 10.115 to Annual
Report on Form 10-K for the year ended March 31, 1996).
10.92Amendment No. 7 dated March 24, 1997 to Amended Loan and Security
Agreement entered into on October 29, 1993 by and between the Registrant
and Foothill Capital Corporation.
10.93Stock 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).
10.97Pooling 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 10.84 to Annual Report on Form 10-K
for the fiscal year ended March 27, 1994).
10.98Pooling 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).
10.99Pooling 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 Pooling and Servicing Agreement dated as of November 15, 1996, among
Bluegreen Receivables Finance Corporation II, the Registrant, Bluegreen
Corporation REMIC Trust, Series 1996-2 and First Trust National
Association, as Trustee (incorporated by reference to exhibit to Current
Report on Form 8-K dated Decenber 11, 1996).
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 (incorporated by reference to exhibit of same designation
to Annual Report on Form 10-K for the year ended March 31, 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
(incorporated by reference to exhibit of same designation to Annual Report
on Form 10-K for the year ended March 31, 1996).
10.108 First Amendment dated February 27, 1997 to Loan and Security Agreement by
and between Heller Financial, Inc. and Bluegreen Resorts, Inc. (fka Patten
Resorts, Inc.) dated February 28, 1996 (incorporated by reference to
exhibit of same designation to Annual Report on Form 10-K for the year
ended March 31, 1996).
10.115 Acquisition, Construction and Receivables Loan and Security Agreement by
and between Finova Capital Corporation and the Registrant dated June 9,
1995 (incorporated by reference to exhibit 10.108 to Annual Report on Form
10-K for the year ended March 31, 1996).
10.116 Amendment No. 1 dated March 8, 1996 to Acquisition, Construction and
Receivables Loan and Security Agreement by and between Finova Capital
Corporation and the Registrant dated June 9, 1995
10.120 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 10.95 to Annual Report on Form 10-K for the fiscal year ended April
2, 1995).
10.121 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 (incorporated by reference to exhibit 10.109
to Annual Report on Form 10-K for the year ended March 31, 1996).
10.122 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 (incorporated by reference to
exhibit 10.110 to Annual Report on Form 10-K for the year ended March 31,
1996).
11.1 Statement re: Computation of Earnings Per Share (such information is
incorporated by reference to the Statement of Operations of the
Consolidated Financial Statements appearing on page 36 of the Company's
1997 Annual Report to Shareholders, which is an exhibit hereto).
13.1 Portions of the 1997 Annual Report incorporated by reference in Items 7 and
8.
23 Consent of Ernst & Young LLP.
27 Financial Data Schedule.