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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
For the fiscal year ended April 2, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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.)
4960 BLUE LAKE DRIVE, BOCA RATON, FLORIDA 33431
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 912-8000
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,
to the best of registrant's knowledge, 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: $43,182,201 based upon the closing sale price
of the Company's Common Stock on the New York Stock Exchange on June 27, 2000
($2.875 per share). For this purpose, "affiliates" include members of the Board
of Directors of the Company, members of executive management and all persons
known to be the beneficial owners of more than 5% of the Company's outstanding
Common Stock. 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 and approximate number of
holders of each of the registrant's classes of Common Stock, as of the latest
practicable date: 24,311,136 shares of Common Stock, $.01 par value outstanding
and approximately 7,000 record holders as of June 27, 2000.
DOCUMENTS INCORPORATED BY REFERENCE
Specifically identified portions of the Company's 2000 Annual Report to
Shareholders (the "2000 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 August 2, 2000 (the "Proxy Statement") are incorporated by reference
into Part III hereof.
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BLUEGREEN CORPORATION
INDEX TO ANNUAL REPORT ON FORM 10-K
PAGE
PART I
Item 1. BUSINESS....................................................................................... 1
Item 2. PROPERTIES..................................................................................... 17
Item 3. LEGAL PROCEEDINGS.............................................................................. 18
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................ 18
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.................................................................................... 18
Item 6. SELECTED FINANCIAL DATA........................................................................ 19
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION................................................................... 19
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..................................... 19
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................................................... 19
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE....................................................................... 19
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.............................................. 19
Item 11. EXECUTIVE COMPENSATION.......................................................................... 19
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.................................. 20
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................. 20
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K................................. 20
Signatures................................................................................................ 21
Exhibit Index............................................................................................. 22
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PART I
ITEM 1. BUSINESS.
SUMMARY
Bluegreen Corporation (the "Company") is a leading marketer of vacation
and residential lifestyle choices through its resorts and residential land and
golf businesses. The Company's resorts business (the "Resorts Division")
acquires, develops and markets timeshare interests in resorts generally located
in popular high-volume, "drive-to" vacation destinations. "Timeshare Interests"
are of two types: one which entitles the fixed-week buyer to a fully-furnished
vacation residence for an annual one-week period in perpetuity and the second
which entitles the buyer of the Company's points-based Vacation Club product to
an annual allotment of "points" in perpetuity (supported by an underlying deeded
fixed timeshare week being held in trust for the buyer). "Points" may be
exchanged by the buyer in various increments for lodging for varying lengths of
time in fully-furnished vacation residences at the Company's participating
resorts. A Timeshare Interest also entitles the buyer to access to over 1,800
resorts worldwide through the Company's participation in timeshare exchange
networks. The Company currently develops, markets and sells Timeshare Interests
in ten resorts located in the United States and the Caribbean. The Company also
markets and sells Timeshare Interests at four off-site sales locations. Prior to
investing in new timeshare projects, the Company performs market research and
testing and, prior to completion of development, seeks to pre-sell a significant
portion of its Timeshare Interests inventory. The Company's residential land and
golf business (the "Residential Land and Golf Division") acquires, develops and
subdivides property and markets the subdivided residential lots to retail
customers seeking to build a home in a high quality residential setting, in some
cases on properties featuring a golf course and related amenities. The
Residential Land and Golf Division's strategy is to locate its projects near
major metropolitan centers outside the perimeter of intense subdivision
development or in popular retirement areas. The Company has focused the
Residential Land and Golf Division's activities in certain core markets in which
the Company has developed substantial marketing expertise and has a strong track
record of success. Prior to acquiring Residential Land and Golf Division
properties, the Company typically utilizes market research, conducts due
diligence and, in the case of new project locations, engages in pre-marketing
techniques to evaluate market response and price acceptance. Once a parcel of
property is acquired, the Company seeks to pre-sell a significant portion of its
planned residential lots on such property prior to extensive capital investment
as a result of the Company's ability to bond its projects to completion. The
Company also generates significant interest income through its financing of
individual purchasers of Timeshare Interests and, to a nominal extent, land sold
by the Residential Land and Golf Division.
For the purposes of this discussion, "estimated remaining
life-of-project sales" assumes sales of the existing, currently under
construction or development, and planned Timeshare Interests or residential
lots, as the case may be, at current retail prices. No assurances can be given
that actual sales will meet expectations.
Market and industry data used throughout this Form 10-K were obtained
from internal company surveys, industry publications, unpublished industry data
and estimates, discussions with industry sources and currently available
information. The sources for this data include, without limitation, the American
Resort Development Association ("ARDA"), a non-profit industry organization.
Industry publications generally state that the information contained therein has
been obtained from sources believed to be reliable, but there can be no
assurance as the accuracy and completeness of such information. The Company has
not independently verified such market data. Similarly, internal Company
surveys, while believed by the Company to be reliable, have not been verified by
any independent sources. Accordingly, no assurance can be given that any such
data are accurate.
The Resorts Division. The Company's Resorts Division was founded in
1994 to capitalize on the growth of the timeshare industry. According to ARDA
and other industry sources, timeshare industry sales and the number of Timeshare
Interest owners grew at compound annual rates of approximately 16% and 22%,
respectively, from 1980 to 1997. No assurances can be given that these industry
growth rates will continue. The Company currently markets and sells Timeshare
Interests in ten resorts located in the Smoky Mountains of Tennessee; Myrtle
Beach and Charleston, South Carolina; Orlando, Florida; Branson, Missouri;
Gordonsville, Virginia; Wisconsin Dells, Wisconsin and Aruba. In addition, the
Company also markets and sells Timeshare Interests at four off-site sales
offices. Through April 2, 2000, the Company has sold approximately 36,221
Timeshare Interests at its resorts. As of April 2, 2000, the Company had 66,560
completed Timeshare Interests at its resorts, 416 Timeshare Interests under
construction or development and plans to develop approximately 53,964 additional
Timeshare Interests at existing resorts. Based on the foregoing, the Resorts
Division's estimated remaining life-of-project sales were approximately $804
million as of April 2, 2000, based on retail prices at that date. The Company
also manages 20 timeshare resorts (including nine of its own resorts) with an
aggregate of approximately 73,000 members.
The Resorts Division uses a variety of techniques to attract
prospective purchasers of Timeshare Interests, including targeted mailings,
direct mail mini-vacations, kiosks in retail locations, telemarketing, marketing
to current
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owners of Timeshare Interests and referrals. The majority of the Company's
Timeshare Interests have been sold through on-site sales presentations. To
support its marketing and sales efforts, the Company has developed and continues
to enhance its database to track its timeshare marketing and sales programs.
Management believes that, as the Company's timeshare operations grow, this
database will become an increasingly significant asset, enabling it to take
advantage of, among other things, less costly marketing and referral
opportunities.
According to ARDA, the primary reason cited by consumers for purchasing
a Timeshare Interest is the ability to exchange a Timeshare Interest for
accommodations at other resorts through worldwide exchange networks. Each of the
Company's timeshare resorts is affiliated with either Resort Condominium
International, Inc. ("RCI") or Interval International ("II"), the two largest
worldwide timeshare exchange companies. Participation in an exchange network
entitles owners to exchange their annual Timeshare Interests for occupancy at
over 3,300 participating RCI resorts or over 1,800 participating II resorts
worldwide. To further enhance the ability of its Timeshare Interest owners to
customize their vacation experience, the Company has also implemented a
points-based Vacation Club system which permits its Timeshare Interest owners to
purchase an annual allotment of points which can be redeemed for occupancy
rights at most Company-owned and certain participating managed resorts. At April
2, 2000, the Company's approximately 26,000 Vacation Club members could choose
to use their points at 27 resorts in the Bluegreen system. The Company also has
a Vacation Club Sampler program, which allows Sampler package purchasers to
enjoy substantially the same amenities, activities and service offered to the
Company's regular Vacation Club members for a one-year trial period. The Company
benefits from the Sampler program by recapturing some of the costs incurred in
initially marketing to prospective customers through the price of the Sampler
package and having the opportunity to remarket the Company's products to the
Sampler customers when they use their trial memberships at the Company's
resorts.
Prior to acquiring property for resorts, the Resorts Division
undertakes a full property review, including an environmental assessment, which
is presented for approval to the Company's Investment Committee, which was
established in 1990 and consists of certain key members of senior management.
During the review process, acquisition specialists analyze market, tourism and
demographic data as well as the quality and diversity of the location's existing
amenities and attractions to determine the potential strength of the timeshare
market in such area and the availability of a variety of recreational
opportunities for prospective Timeshare Interest purchasers.
The Company has historically provided financing to approximately 95% of
its timeshare customers, who are required to make a downpayment of at least 10%
of the Timeshare Interest sales price and who typically finance the balance of
the sales price over a period of seven to ten years. As of April 2, 2000, the
Company had a timeshare receivables portfolio totaling approximately $61.5
million in principal amount, with a weighted-average contractual yield of
approximately 15.7% per annum. During fiscal 2000, the Company maintained a
timeshare receivables warehouse facility and a separate timeshare receivables
purchase facility to accelerate cash flows from the Company's timeshare
receivables. The timeshare purchase facility expired at the end of June 2000,
and the Company is currently negotiating a new timeshare purchase facility. No
assurances can be given that such negotiation will be successful or that the
Company will obtain a new facility on attractive terms if at all. The warehouse
facility has been extended through August 2000. See "Management's Discussion and
Analysis of Results of Operations and Financial Condition"("MD&A").
The Residential Land and Golf Division. The Residential Land and Golf
Division is focused primarily on land and golf community projects located in
states in which the Company has developed marketing expertise and has a track
record of success, such as Texas, North Carolina and Virginia. The aggregate
carrying amount of Residential Land and Golf Division inventory at April 2, 2000
was $87.0 million. The Residential Land and Golf Division's estimated remaining
life-of-project sales were approximately $416.3 million at April 2, 2000. The
Company believes no other company in the United States of comparable size or
financial resources markets and sells residential land directly to retail
customers.
The Residential Land and Golf Division targets families seeking a
quality lifestyle improvement which is generally unavailable in traditional
suburban developments. Based on the Company's experience in marketing and
selling residential lots to its target customers, the Company has been able to
develop a marketing and sales program that generates a significant number of
on-site sales presentations to potential prospects through low-cost, high-yield
newspaper advertising. In addition, SIMS, STARS (expected to be implemented by
the Company in fiscal 2001) and the other Residential Land and Golf Division
databases enable the Company to compile, process and maintain information
concerning future sales prospects within each of its operating regions. Through
the Company's targeted sales and marketing program, the Company believes that it
has been able to achieve an attractive conversion ratio of sales to prospects
receiving on-site sales presentations.
The Residential Land and Golf Division acquires and develops land in
two markets: (i) near major metropolitan centers but outside the perimeter of
intense subdivision development; and (ii) popular retirement areas.
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Prior to acquiring undeveloped land, the Company researches market depth and
forecasts market absorption. In new market areas, the Company typically
supplements its research with a structured classified ad test marketing system
that evaluates market response and price acceptance. The Company's sales and
marketing efforts begin as soon as practicable after the Company enters into an
agreement to acquire a parcel of land. The Company's ability to bond projects to
completion generally allows it to sell a significant portion of its residential
land inventory on a pre-development basis, thereby reducing the amount of
external capital needed to complete improvements. As is the case with the
Resorts Division, all acquisitions of Residential Land and Golf Division
properties are subject to Investment Committee approval.
In fiscal 1997, the Company began construction of its first daily-fee
golf course as part of its long-term plan to participate in the growing
daily-fee golf market. The Company believes that daily-fee golf courses are an
attractive amenity that will increase the marketability of the Company's
adjacent residential lots in certain projects. The Company's first golf course,
the Carolina National Golf Club ("Carolina National"), is located near
Southport, North Carolina, just 30 miles north of Myrtle Beach, South Carolina,
one of the nation's most popular golf destinations, and was designed by Masters
Champion Fred Couples. The Company opened the first 18 holes of Carolina
National for play in July 1998. In fiscal 2000, the Company opened another nine
holes at Carolina National along with a new clubhouse, featuring food and
beverage operations and an expanded pro shop. In fiscal 2000, the Company began
construction at Brickshire, a new residential land and golf course community in
New Kent County, Virginia. The Company intends to expand its golf course
community residential land offerings into markets with attractive demographics
for such properties. There can be no assurances that the Company's strategy for
this expansion will be successful.
The Company's business involves certain risks and uncertainties (This
Annual Report contains certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1999. See "MD&A").
The Company's executive offices are located at 4960 Blue Lake Drive,
Boca Raton, Florida 33431. The Company's telephone number at such address is
(561) 912-8000.
See also MD&A Note 17 of Notes to Consolidated Financial Statements for
additional financial information on the Company's business segments.
INDUSTRY OVERVIEWS
Resorts Division
The Market. The resort component of the leisure industry is serviced
primarily by two separate alternatives for overnight accommodations: commercial
lodging establishments and timeshare resorts. Commercial lodging consists
principally of hotels and motels in which a room is rented on a nightly, weekly
or monthly basis for the duration of the visit or rentals of privately-owned
condominium units or homes. For many vacationers, particularly those with
families, a lengthy stay at a quality commercial lodging establishment can be
expensive, and the space provided to such vacationers by these establishments
relative to the cost is often not economical. In addition, room rates at
commercial lodging establishments are subject to change periodically and
availability is often uncertain. The Company believes that Timeshare Interest
ownership presents an attractive vacation alternative to commercial lodging.
First introduced in Europe in the mid-1960's, Timeshare Interest
ownership has been one of the fastest growing segments of the hospitality
industry over the past two decades. According to ARDA, timeshare industry sales
and the number of Timeshare Interest owners have grown at compound annual rates
of approximately 16% and 22%, respectively, from 1980 to 1997. No assurances can
be given that such industry growth rates will continue.
The Company believes that, based on ARDA reports and other industry
data, the following factors have contributed to the increased acceptance of the
timeshare concept among the general public and the substantial growth of the
timeshare industry:
- Consumer awareness of the value and benefits of Timeshare
Interest ownership, including the cost savings relative to
other lodging alternatives;
- Flexibility of Timeshare Interest ownership due to the growth
of international exchange organizations such as II and RCI and
points-based vacation club systems;
- The quality of the timeshare resorts and their management;
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- Consumer confidence resulting from consumer protection
regulation of the timeshare industry and an influx of brand
name national lodging companies to the timeshare industry; and
- Availability of consumer financing for purchasers of Timeshare
Interests.
The timeshare industry traditionally has been highly fragmented and
dominated by a large number of local and regional resort developers and
operators, each with small resort portfolios generally of differing quality. The
Company believes that one of the most significant factors contributing to the
current success of the timeshare industry is the entry into the market of some
of the world's major lodging, hospitality and entertainment companies, such as
Marriott, Disney, Hilton, Hyatt, Four Seasons, Starwood, Carlson and Bass
Hotels. Although timeshare operations currently comprise only a small portion of
these companies' overall operations, the Company believes that their involvement
in the timeshare industry, together with other publicly-traded timeshare
companies, has enhanced the industry's image with the general public.
The Consumer. According to information compiled by ARDA, customers in
the 40-55 year age range represented approximately 45.1% of all Timeshare
Interest owners in 1997. Historically, the median age of a Timeshare Interest
buyer at the time of purchase was 48. The median annual household income of
Timeshare Interest owners in the United States in 1997 was approximately
$71,000, with approximately 24% of all Timeshare Interest owners having annual
household incomes greater than $100,000 and approximately 12% of such owners
having annual household incomes greater than $125,000. The Company believes
that, despite the industry's growth, Timeshare Interest ownership has achieved
only an approximate 5% market penetration among United States households with
incomes above $50,000 per year.
Timeshare Interest Ownership. The purchase of a Timeshare Interest
typically entitles the buyer to use a fully-furnished vacation residence,
generally for a one-week period each year in perpetuity. Typically, the buyer
acquires an ownership interest in the vacation residence, which is often held as
tenant-in-common with other buyers of interests in the property. Under a
points-based vacation club system, members purchase an annual allotment of
points which can be redeemed for occupancy rights at participating resorts.
Compared to other vacation ownership arrangements, the points-based system
offers members greater flexibility in planning their vacations. The number of
points that are required for a stay at any one resort varies, depending on a
variety of factors, including the resort location, the size of a unit, the
vacation season and the days of the week used. Under this system, members can
select vacations according to their schedules, space needs and available points.
Subject to certain restrictions, members are typically allowed to carry over for
one year any unused points and to "borrow" points from the forthcoming year. In
addition, members are required to pay annual fees for certain maintenance and
management costs associated with the operation of the resorts based on the
number of points to which they are entitled. As of April 2, 2000, all of the
Company's sales offices, with the exception of its La Cabana Beach and Racquet
Club sales office in Aruba, were selling Timeshare Interests within the
Company's Vacation Club system.
The owners of Timeshare Interests manage the property through a
nonprofit homeowners' association, which is governed by a board of directors or
trustees consisting of representatives of the developer and owners of Timeshare
Interests at the resort. The board hires a management company to which it
delegates many of the rights and responsibilities of the homeowners'
association, including grounds landscaping, security, housekeeping and operating
supplies, garbage collection, utilities, insurance, laundry and repairs and
maintenance. As of April 2, 2000, the Company's resort property management
division managed 20 resorts (including 9 of the Company's resorts) and served an
owner base of approximately 73,000.
Each Timeshare Interest owner is required to pay the homeowners'
association a share of all costs of maintaining the property. These charges can
consist of an annual maintenance fee plus applicable real estate taxes and
special assessments, assessed on an as-needed basis. If the Timeshare Interest
owner does not pay such charges, such owner's use rights may be suspended and
the homeowners' association may foreclose on the owner's Timeshare Interest.
Participation in Timeshare Interest Exchange Networks. The Company
believes that its Timeshare Interests are made more attractive by the Company's
affiliation with Timeshare Interest exchange networks operated by RCI and II,
the two largest timeshare exchange companies worldwide. Nine of the Company's
timeshare resorts are affiliated with RCI and have been awarded RCI's highest
designation (Gold Crown), while the La Cabana Beach and Racquet Club resort in
Aruba (the "Aruba Resort") is affiliated with II. A Timeshare Interest owner's
participation in the RCI or II exchange network (the fee for which is paid by
the Company in the first year of such owner's participation) allows such owner
to exchange his annual Timeshare Interest for occupancy at over 3,300
participating resorts in the case of RCI and over 1,800 participating resorts in
the case of II, based upon availability and the payment of a variable exchange
fee. A member may exchange his Timeshare Interest for an occupancy right in
another participating resort by listing his Timeshare Interest as available with
the exchange organization and by requesting occupancy at another participating
resort, indicating the particular resort or geographic area to which the member
desires to travel, the size of
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the unit desired and the period during which occupancy is desired. The exchange
network assigns ratings to each listed Timeshare Interest, based upon a number
of factors, including the location and size of the unit, the quality of the
resort and the period during which the Timeshare Interest is available, and
attempts to satisfy the exchange request by providing an occupancy right in
another Timeshare Interest with a similar rating. If the exchange network is
unable to meet the member's initial request, it suggests alternative resorts
based on availability. The failure of the Company or any of its resorts to
participate in qualified exchange networks or the failure of such networks to
operate effectively could have a material adverse effect on the Company.
Residential Land and Golf Division
The Residential Land and Golf Division operates within a specialized
niche of the real estate industry which focuses on the sale of residential land
to retail customers who intend to build a home on such land at some point in the
future. The participants in this market are generally individual landowners who
are selling specific parcels of property and small developers who focus
primarily on projects in their region. Although no specific data is available
regarding this market niche, the Company believes that no other company in the
United States of comparable size or financial resources currently markets and
sells residential land directly to retail customers.
Unlike commercial homebuilders who focus on vertical development, the
Residential Land and Golf Division focuses primarily on horizontal development
activities, such as grading, roads and utilities. As a result, the projects
undertaken by the Company are significantly less capital intensive than those
undertaken by the commercial homebuilders, which reduces the Company's risk of
holding a large inventory of property. See "MD&A" for a discussion of these
risks. The Company believes that its market is also the beneficiary of a number
of trends, including the large number of people entering into the 40-55 year age
bracket and the economic and population growth in certain of its primary
markets.
The Residential Land and Golf Division is also focused on the
development of golf courses and related amenities as the center-pieces of
certain of the Company's residential land properties. As of April 2, 2000, the
Company was marketing residential land lots in five projects that include golf
courses developed either by the Company or a third party. The Company intends to
acquire and develop additional golf communities, as management believes that the
demographics and marketability of such properties are consistent with the
Company's overall residential land strategy. Golf communities typically are
larger, multi-phase properties which require a greater capital commitment than
the Company's single-phase residential land projects. There can be no assurances
that the Company will be able to successfully implement its golf community
strategy.
COMPANY PRODUCTS
Timeshare Resorts
Set forth below is a description of each of the Company's timeshare
resorts. All units at most of the properties have certain standard amenities,
including a full kitchen, at least two televisions, a VCR player and a CD
player. Some units have additional amenities, such as larger televisions and
game systems. Most properties offer guests a clubhouse (with an indoor and/or
outdoor pool, a game room, exercise facilities and a lounge) and a hotel-type
staff. The Company manages all of its resorts with the exception of the Aruba
Resort.
MountainLoft Resort--Gatlinburg, Tennessee. The MountainLoft Resort in
Gatlinburg, Tennessee is located near the Great Smoky Mountains National Park
and is minutes from the family attractions of Pigeon Forge, Tennessee. Units are
located in individual chalets or mid-rise villa buildings. Each unit is fully
furnished with a whirlpool bath and private balconies, and certain units include
gas fireplaces.
Laurel Crest--Pigeon Forge, Tennessee. Laurel Crest is located in
proximity to the Great Smoky Mountains National Park and the Dollywood theme
park. In addition, visitors to Pigeon Forge can enjoy over 200 factory outlet
stores and music shows featuring renowned country music stars as well as partake
in a variety of outdoor activities, such as horseback riding, trout fishing,
boating, golfing and white water rafting.
Shore Crest Vacation Villas--Myrtle Beach, South Carolina. Shore Crest
Vacation Villas is located on the beach in the Windy Hill section of North
Myrtle Beach a mile from the famous Barefoot Landing, with its restaurants,
theaters, shops and outlet stores.
Harbour Lights--Myrtle Beach, South Carolina. Harbour Lights is located
in the Fantasy Harbour Complex in the center of Myrtle Beach. Nearby are Theater
Row, shopping, golf and restaurants. The resort's Activities Center overlooks
the Intracoastal Waterway.
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The Falls Village--Branson, Missouri. The Falls Village is located in
the Ozark Mountains. Fishing, boating and swimming are available at nearby Table
Rock Lake and Lake Taneycomo, and area theaters feature shows by country music
stars. Most resort customers come from areas within an eight to ten hour drive
of Branson.
Christmas Mountain Village--Wisconsin Dells, Wisconsin. The Company
acquired the Christmas Mountain Village resort as part of the RDI Acquisition.
Christmas Mountain Village offers an 27-hole golf course and seven ski trails
served by two chair lifts. Other on-site amenities include horseback riding,
tennis courts, a five-acre lake with paddleboats and rowboats and four outdoor
swimming pools. Christmas Mountain Village attracts customers primarily from the
greater Chicago area and other locations within an eight to ten hour drive of
Wisconsin Dells.
Orlando's Sunshine--Orlando, Florida. Orlando's Sunshine Resort was
also acquired as part of the RDI Acquisition. The resort is located on
International Drive, near Wet'n'Wild water park and Universal Studios. During
fiscal 2000, the Company commenced construction on Phase II of the Orlando's
Sunshine Resort, which includes 60 units, an outdoor swimming pool, hot tub and
tennis courts.
La Cabana Beach Resort & Racquet Club--Aruba. Bluegreen Properties
N.V., a 50%-owned subsidiary of the Company, acquired the unsold Timeshare
Interest inventory of the Aruba Resort (approximately 8,000 Timeshare Interests)
in December 1997 and additional Timeshare Interests from time to time
thereafter. Established in 1989, the Aruba Resort is a 449-suite ocean front
property which offers one-, two- and three-bedroom suites, garden suites and
penthouse accommodations. On-site amenities include tennis, racquetball, squash,
a casino, two pools and private beach cabanas, none of which are owned or
managed by the Company.
Shenandoah Crossing--Gordonsville, Virginia. Shenandoah Crossing
features an 18-hole golf course, indoor and outdoor pools, tennis courts,
horseback riding trails and a lake for swimming, fishing and boating.
The Lodge Alley Inn--Charleston, South Carolina. Located in
Charleston's historic district, the Lodge Alley Inn includes one- and
two-bedroom suites, many furnished with an equipped kitchen, living room with
fireplace, dining room, jacuzzi, pine wood floors, and 18th century-style
furniture reproductions. The resort, which features the on-site High Cotton
restaurant, is within walking distance of many of Charleston's historical sites,
open air markets and art galleries.
The following table sets forth additional data with respect to each of
the Company's resorts:
LAUREL SHORE HARBOUR THE CHRISTMAS LA CABANA SHENANDOAH THE
CREST CREST LIGHTS FALLS MOUNTAIN ORLANDO'S BEACH & CROSSING LODGE
MOUNTAINLOFT PIGEON MYRTLE MYRTLE VILLAGE VILLAGE SUNSHINE RACQUET FARM & CLUB ALLEY INN
GATLINBURG, FORGE, BEACH, BEACH, BRANSON, WISCONSIN ORLANDO, CLUB(1), GORDONSVILLE CHARLESTON,
LOCATION TN TN SC SC MO DELLS, WI FL ARUBA VA SC
- -------- ----------- --------- ------- ------- -------- --------- --------- --------- ------------ -----------
Date sales commenced 7/94 8/95 4/96 6/97 7/97 9/97 12/98 1/98 4/98 2/99
Number of Timeshare
Interests completed as
of April 2, 2000(2) 13,520 12,064 12,480 4,992 3,979 2,688 3,120 8,205 832 4,680
Number of Timeshare
Interests under construction
as of April 2, 2000(2) 416 -- -- -- -- -- -- -- -- --
Number of additional
Timeshare Interests
Planned(2)(3) 4,680 8,840 -- 8,736 9,256 12,884 -- -- 9,568 --
Average Timeshare
Interests selling price -
Year ended April 2, 2000 $ 9,624 $ 8,911 $ 8,625 $8,106 $9,671 $11,515 $8,964 $8,265 $8,716 $12,311
Number of Timeshare
Interests sold through
April 2, 2000(4) 6,788 6,219 6,602 3,404 2,492 2,886 3,351 3,417 669 393
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(1) Bluegreen Properties N.V., in which the Company owns a 50% interest,
acquired approximately 8,000 unsold Timeshare Interests at this resort in
December 1997 and additional Timeshare Interests from time to time
thereafter.
(2) The number of Timeshare Interests completed, under construction or planned
are intended to be sold in 52 weekly intervals per vacation home for the
Company's Shore Crest, Harbour Lights, Orlando's Sunshine, La Cabana, and
Lodge Alley Inn Resorts . The amounts for the remaining resorts include
some vacation homes which can be subdivided and sold as two smaller
vacation homes ("lock-out units"), each of which consists of 104 weekly
intervals per vacation home.
(3) There can be no assurances that the Company will have the resources to
complete all such planned Timeshare Interests or that such Timeshare
Interests will be sold at favorable prices.
(4) Includes sales of Timeshare Interests that were sold on a biennial basis
(i.e., sale of one-week periods every other year in perpetuity) as one
Timeshare Interest sold. Therefore, the number of Timeshare Interests sold
may exceed the total number of Timeshare Interests completed, under
construction, and planned.
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Certain Residential Land and Golf Division Projects
Set forth below is a description of the five largest projects currently
marketed by the Residential Land and Golf Division, which are representative of
the types of projects that the Company has been focusing on since 1993. These
properties represented approximately 81.4% of the Residential Land and Golf
Division's estimated remaining life-of-project sales at April 2, 2000.
Winding River Plantation -- Southport, North Carolina. The Company
acquired approximately 1,300 acres located near Southport, North Carolina
(between Myrtle Beach, South Carolina and Wilmington, North Carolina) for $3.4
million in fiscal 1997. The property has frontage along the Lockwood Folly
River, a navigable waterway that leads to the Intracoastal Waterway and the
Atlantic Ocean. The project will include river amenities, a beach club and
tennis courts. In addition, the project is the site of the Company's first
daily-fee golf course, the Carolina National Golf Club, which was developed by
Master Champion Fred Couples. The first 18 holes of the course opened for play
in July 1998, with the final 9 holes opening in fiscal 2000. The Company
anticipates that the project will consist of a total of approximately 1,000
lots, which average approximately one acre. The Company began selling lots in
February 1997, and aggregate sales through April 2, 2000 were $43.4 million.
Aggregate development costs (net of costs capitalized separately in the golf
course) through April 2, 2000 were $20.1 million and the Company anticipates
that the aggregate capital expenditures to complete development at the project
will be $2.9 million. The Company anticipates that the remaining lots will be
sold-out over the next two years. Estimated remaining life-of-project sales for
this project were approximately $33.0 million as of April 2, 2000, based on
retail selling prices as of that date.
Lake Ridge at Joe Pool Lake -- Cedar Hill, Texas. The Company acquired
1,400 acres located approximately 19 miles outside of Dallas, Texas and 30 miles
outside of Fort Worth, Texas in April 1994 for $6.1 million. In fiscal 2000, the
Company acquired an additional 1,766 acres for $14.9 million. The property is
located at Joe Pool Lake and is atop the highest elevation within 100 miles. The
lake has in excess of 7,500 acres of water for boating, fishing, windsurfing and
other water activities. Adjacent amenities (not owned or managed by the Company)
include a 154 acre park with baseball, football and soccer fields, a fishing
pool with a pier, camping areas and an 18-hole golf course. The existing acreage
will yield approximately 1,600 lots based on preliminary phase development, with
most lots ranging in size from 1/4 to five acres. The Company began selling lots
in April 1994 and aggregate sales through April 2, 2000 were $68.7 million.
Aggregate development costs through April 2, 2000 were $24.3 million and the
Company anticipates that the remaining capital expenditures to complete
development at the project will be $29.9 million. The Company anticipates that
unsold lots will be sold-out over the next six years. Estimated remaining
life-of-project sales for this project were approximately $106.3 million as of
April 2, 2000, based on retail selling prices as of that date.
Mountain Lakes Ranch -- Bluffdale, Texas. The Company acquired 4,100
acres located approximately 45 miles from Fort Worth, Texas in October 1998 for
$3.1 million. The property features rolling terrain with hilltop views, tree
coverage and ample area to create private lakes. The Company anticipates that
the property will yield approximately 1,390 lots ranging in size from one to
five acres, including both lakefront and waterview parcels. The Company began
selling lots in March 2000, with aggregate sales of $370,000 through April 2,
2000. Aggregate development costs through April 2, 2000 were $2.0 million and
the Company anticipates that future capital expenditures to complete development
at the project will be $10.4 million. Estimated life-of-project sales for
Mountain Lakes Ranch were $34.5 million as of April 2, 2000, based on retail
prices at that date, with a projected sell-out period of six years.
Mystic Shores --Canyon Lake, Texas. The Company acquired 6,966 acres
located 25 miles north of San Antonio, Texas in October 1999 for $14.9 million.
The project includes an estimated 2,700 homesites, ranging in size from one to
three acres. Mystic Shores is situated on Canyon Lake and is in close proximity
to the Guadeloupe River, which is well-known for fishing, rafting and water
sports. The property will also feature a junior Olympic swimming pool,
bathhouse, open-air pavillion, picnic area and boat ramps. Aggregate development
costs through April 2, 2000 were $1.2 million, with projected remaining
expenditures to complete development at the project of $29.5 million. The
Company began selling lots in March 2000, with aggregate sales of $2.7 million
through April 2, 2000. Estimated remaining life-of-project sales were
approximately $106.6 million as of April 2, 2000, based on retail selling prices
as of that date.
Brickshire -- New Kent, Virginia. The Company acquired 1,135 acres
located 20 miles from Williamsburg and Richmond, Virginia, in September 1999 for
$4.4 million. The property will consist of approximately 900 residential parcels
and will feature an 18-hole golf course to be designed by U.S. Open champion
Curtis Strange. The property will also offer residents a community club and
pool, tennis courts and scenic walking trails. Aggregate development costs
through April 2, 2000 were $2.0 million, with projected remaining expenditures
of $24.0 million. The Company began selling lots in December 1999, with
aggregate sales of $1.1 million through
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April 2, 2000. Estimated remaining life-of-project sales were approximately
$58.3 million as of April 2, 2000, based on retail selling prices as of that
date.
ACQUISITION OF TIMESHARE AND RESIDENTIAL LAND AND GOLF INVENTORY
In order to provide centralized and uniform controls on the type,
location and amount of timeshare and residential land and golf inventory that
the Company acquires, all such inventory acquisitions have required the approval
of the Investment Committee since 1990. The Investment Committee currently
consists of George F. Donovan, President and Chief Executive Officer; John F.
Chiste, Senior Vice President, Treasurer and Chief Financial Officer; Patrick E.
Rondeau, Senior Vice President, Director of Legal Affairs; L. Nicolas Gray,
Senior Vice President--Resorts Division; Daniel C. Koscher, Senior Vice
President--Residential Land and Golf Division; and David D. Philp, Chief
Investment Officer. The Investment Committee reviews each proposed inventory
acquisition to determine whether the property meets certain criteria, including
estimated cash flows and gross profit margins.
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 and financial institutions with which the Company
has established business relationships. Prior to acquiring property for future
resorts, the Resorts Division undertakes a full property review, including an
environmental assessment, which is presented to the Investment Committee for
approval. During the review process, acquisition specialists analyze market,
tourism and demographic data as well as the quality and diversity of the
location's existing amenities and attractions to determine the potential
strength of the timeshare market in such area and the availability of a variety
of recreational opportunities for prospective Timeshare Interest purchasers.
Specifically, the Company evaluates the following factors, among others, to
determine the viability of a potential new timeshare resort: (i) anticipated
supply/demand ratio for Timeshare Interests in the relevant market, (ii) the
market's potential growth as a vacation destination, (iii) competitive
accommodation alternatives in the market, (iv) uniqueness of location and (v)
barriers to entry that would limit competition. The Company anticipates that its
timeshare resorts will generally have a sell-out term of approximately seven
years.
The Company intends to continue to pursue growth by expanding or
supplementing the Company's existing resorts operations through acquisitions in
destinations that will complement such existing operations. Because the
timeshare industry is highly fragmented, the Company believes that significant
opportunities exist to make selected acquisitions at attractive valuations.
Acquisitions the Company may consider include acquiring additional Timeshare
Interest inventory, operating companies, management contracts, Timeshare
Interest mortgage portfolios and properties or other timeshare-related assets
which may be integrated into the Company's operations. In addition, the Company
intends to continue to pursue timeshare resort locations in areas outside the
United States, particularly in the Caribbean, as well as Central and South
America. No assurances can be given that the Company will be successful in its
acquisition strategy.
Residential Land and Golf Division
The Residential Land and Golf Division, through the Company's regional
offices, and subject to Investment Committee review and approval, typically
acquires inventory that (i) is located near a major population center outside
the perimeter of intense subdivision development or in popular retirement areas,
(ii) is suitable for subdivision, (iii) has attractive topographical features,
(iv) for certain projects, could accommodate a golf course and related amenities
and (v) the Company believes will result in an acceptable profit margin and cash
flow to the Company based upon anticipated retail value. Properties are
generally subdivided for resale into parcels typically ranging in size from two
to five acres. During fiscal 1999, the Company acquired 8,293 acres in eight
separate transactions for a total purchase price of $12.0 million, or $1,444 per
acre and during fiscal 2000, the Company acquired 11,340 acres in seven separate
transactions for a total purchase price of approximately $40.1 million or $3,537
per acre.
In connection with its review of potential residential land and golf
inventory, 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. As part of its long-term
strategy for the Residential Land and Golf Division, the Company in recent years
has focused on fewer, more capital-intensive projects. The Company intends to
continue to focus the Residential Land and Golf Division on those regions where
the Company believes the market for its products is strongest, such as the
Southeast and Southwest regions of the United States and to replenish its
residential land inventory in such regions as existing projects are sold-out.
The Residential Land and Golf 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
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many of its market areas, and because of such contacts and its long history of
acquiring properties, the Company believes that it is generally in a favorable
position to learn of available properties, often before the availability of such
properties is publicly known. In order to ensure such access, the Company
attempts to develop and maintain 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, prior to acquiring property in
new areas, the Company will conduct test marketing for a prospective project
prior to entering into an acquisition agreement to determine whether sufficient
customer demand exists for the project. 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. In certain cases, however, the Company has experienced
short-term shortages of ready-for-sale inventory due to either difficulties in
acquiring property or delays in the approval and/or development process.
Shortfalls in ready-for-sale inventory may materially adversely affect the
Company's business, operating results and financial condition and adversely
impacted the Company's results in fiscal 2000. See "MD&A".
Once a desirable property is identified, the Company completes its
initial due diligence procedures and enters into a purchase agreement with the
seller to acquire the property. It is generally the Company's policy to advance
only a small downpayment of 1%-3% of the purchase price upon signing the
purchase agreement and to limit the liquidated damages associated with such
purchase agreement 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
typically engages in pre-marketing techniques 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 to the property. 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 Residential Land and Golf Division to reduce (i) the time during which it
actually owns specific properties, (ii) the market risk associated with holding
such properties and (iii) the risk of acquiring properties that may not be
suitable for sale. It also provides the Residential Land and Golf Division an
additional source of available properties to meet customer demand. In certain
circumstances, however, the Company has acquired properties and then
strategically held such properties until their prime marketing seasons.
Prior to closing on a purchase of residential land, 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 also obtains
title insurance on the property.
MARKETING AND SALE OF INVENTORY
Resorts Division
The Resorts Division utilizes a variety of techniques to attract
prospective purchasers of Timeshare Interests, including targeted mailings,
direct mail mini-vacation invitations, kiosks in retail locations,
telemarketing, marketing to current owners and referrals. The Resorts Division
provides hotel accommodations to prospective purchasers at reduced prices in
exchange for their touring the timeshare resort. To support its marketing and
sales efforts, the Company has developed and continues to enhance its database
to track its timeshare marketing and sales programs. Management believes that,
as the Resort Division's timeshare operations grow, this database will become an
increasingly significant asset, enabling the Company to focus its marketing and
sales efforts to take advantage of, among other things, less
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costly marketing and referral opportunities. In June 2000, the Company entered
into an exclusive marketing agreement with Big Cedar Lodge and Bass Pro Shops of
Springfield, Missouri. Under the terms of the 10-year agreement, Bluegreen will
market its Vacation Club product to Bass Pro Shops' estimated 30 million annual
retail customers and 34 million catalog subscribers. Bluegreen intends to market
its Vacation Club at each of Bass Pro Shops' national retail locations, using,
among other means, interactive kiosks, affinity card programs and other retail
promotions. Bluegreen will also have an exclusive timeshare marketing presence
on Bass Pro Shops' web site -- www.basspro.com -- that will be linked to the
Company web site -- www.bluegreenonline.com. The Company believes that this new
marketing agreement will result in more effective and cost-efficient marketing
for the Resorts Division although there can be no assurances that such
effectiveness and efficiency will be achieved.
Timeshare resorts are staffed with 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 1999,
total advertising expense for the Resorts Division was $28.1 million or
approximately 27% of such division's $103.1 million in sales. During fiscal
2000, total advertising expense for the Resorts Division was $37.2 million or
31.8% of the division's $117.2 million in sales. See MD&A for a discussion of
the Company's sales, general and administrative expenses.
The Company requires its sales staff to provide each timeshare customer
with a written disclosure statement regarding the Timeshare Interest to be sold
prior to the time the customer signs a purchase agreement. This disclosure
statement sets forth relevant information regarding timeshare ownership at the
resort and must be signed by every purchaser. The Company believes that this
information statement contains all material and relevant information a customer
requires to make an informed decision as to whether or not to purchase a
Timeshare Interest at one of its resorts.
After deciding to purchase a Timeshare Interest, a purchaser enters
into a purchase agreement and is required to pay the Company a deposit of at
least 10% of the purchase price. Purchasers are entitled to cancel purchase
agreements within specified rescission periods after execution in accordance
with statutory requirements. Substantially all timeshare purchasers visit one of
the Company's resorts or one of the Company's off-site sales offices prior to
purchasing.
In addition to sales offices located at its resorts, the Company also
operates four off-site sales offices serving the Indianapolis, Indiana;
Louisville, Kentucky; Cleveland, Ohio; and Detroit, Michigan markets. These
off-site sales offices market and sell Timeshare Interests in the Company's
points-based Vacation Club, and allow the Company to bring its products to
markets with favorable demographics and low competition for prospective buyers.
All of the off-sites except Indianapolis sell Timeshare Interests using the
Company's "Bluegreen Air" virtual-reality jet airline experience as part of the
sales presentation. During fiscal 2000, the "Bluegreen Air" offices generated
$17.5 million and $1.7 million or 14.9% and 22.6% of the Resorts Division's
sales and field operating profit, respectively. The Company intends to open
additional "Bluegreen Air" off-site sales offices during fiscal 2001, although
there can be no assurances that such additional offices will be opened or prove
to be profitable.
The Company believes that the attractiveness of Timeshare Interest
ownership has been enhanced significantly by the Company's Vacation Club program
and the availability of exchange networks that allow Timeshare Interest owners
to exchange the occupancy right in their Timeshare Interests in a particular
year, for an occupancy right at another participating network resort at either
the same or a different time. The Aruba Resort is affiliated with the timeshare
exchange network operated by II, while the Company's nine other resorts are
affiliated with RCI's timeshare exchange network. If the Company's resorts cease
to qualify for the exchange networks or such networks cease to operate
effectively, the Company's sales of Timeshare Interests and the performance of
its timeshare receivables could be materially adversely affected.
For further information on sales and other financial information
(including industry segment information) attributable to the Resorts Division,
see "MD&A" and the Company's consolidated financial statements and the related
Notes.
Residential Land and Golf Division
In general, as soon as practicable after agreeing to acquire a property
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, golf course views (if applicable) 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.
Once such selling prices are established the Company commences its marketing
efforts.
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The most widely used marketing technique by the Residential Land
Division is advertising in major newspapers in metropolitan areas located within
a one to three hour drive from the property and local newspapers. In addition,
the Company uses its proprietary database and inventory management system, which
enables the Company to quickly compile information on the previously identified
prospects most likely to be interested in a particular project. The Residential
Land and Golf Division also conducts direct mail campaigns to market property
through the use of brochures describing available parcels, as well as television
and radio advertising. Through this sales and marketing program, the Company
believes that it has been able to achieve a high conversion ratio of sales to
prospects receiving on-site sales presentations. The Company estimates that the
conversion ratio of sales to prospects receiving on-site sales presentations has
historically been approximately 20%. A sales representative who is knowledgeable
about the property answers each inquiry generated by the Company's marketing
efforts, discusses the property with the prospective purchaser, attempts to
ascertain the purchaser's needs and determines whether the parcel would be
suitable for that person, and arranges an appointment for the purchaser to visit
the property. Substantially all prospective purchasers inspect a property before
purchasing. During fiscal 1999, the Residential Land and Golf Division incurred
$9.1 million in advertising expense, or approximately 7.4% of such division's
$122.7 million in sales. During fiscal 2000, the Residential Land and Golf
Division incurred $7.1 million in advertising expense, or 7.3% of such
division's $97.2 million in sales.
The success of the Company's marketing efforts depends heavily on the
knowledge and experience of its sales personnel. The Company requires that,
prior to initiating the marketing effort for a property, all sales
representatives 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. The Company enhances its sales and marketing organization
through the Bluegreen Institute, a mandatory training program, which is designed
to instill the Company's marketing and customer service philosophy in middle and
lower-level management. 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 prospective
purchaser with a written disclosure statement regarding the property to be sold
prior to the time such purchaser signs a purchase agreement. This information
statement, which is either in the form of 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 must be signed by each
purchaser. The Company believes that these information statements contain all
material and relevant information necessary for a prospective purchaser to make
an informed decision as to whether or not to purchase such property, including
the 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, a purchaser enters into a purchase
agreement and is required to pay the Company a deposit of at least 10% of the
purchase price. Purchasers are entitled to cancel purchase agreements within
specified periods after execution in accordance with statutory requirements. The
closing of a residential land sale usually occurs two to eight weeks after
payment of the deposit. Upon closing of a residential land sale, the Company
typically delivers a warranty deed and a recent survey of the property to the
purchaser. Title insurance is available at the purchaser's expense.
For further information on sales and other financial information
(including industry segment information) attributable to the Residential Land
and Golf Division, see "MD&A" and the Company's consolidated financial
statements and the related Notes.
CUSTOMER FINANCING
General
During fiscal 1998, 1999 and 2000, the Company financed 33%, 40% and
52%, respectively, of the aggregate purchase price of its sales of Timeshare
Interests and residential land to customers that closed during these periods and
received cash for the remaining balance of the purchase price. The increase in
the percentage of sales financed by the Company since 1998 is primarily
attributable to an increase in the sales of Timeshare Interests over the same
period. Sales of Timeshare Interests accounted for 35%, 46% and 55% of
consolidated sales during fiscal 1998, 1999 and 2000, respectively.
Approximately 95% of all purchasers of Timeshare Interests finance with the
Company (compared to approximately 1% of residential land purchasers in fiscal
2000). In recent years, the percentage of residential land customers who
utilized the Company's financing has declined materially due to, among other
things, an increased willingness on the part of local banks to extend direct lot
financing to purchasers.
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The Company believes that its financing is attractive to purchasers who
find it convenient to handle all facets of the purchase of residential land and
Timeshare Interests through a single source and because the downpayments
required by the Company are similar to those required by banks and mortgage
companies which offer this type of credit.
The Company offers financing of up to 90% of the purchase price of its
Timeshare Interests. The typical financing extended by the Company on a
Timeshare Interest during fiscal 1998, 1999 and 2000, provides for a term of
seven years and a fixed interest rate. Historically, at the closing, the Company
and the purchaser executed a contract for deed agreement. After the obligation
is paid in full, the Company delivers a deed to the purchaser. In connection
with the Company's Timeshare Interest sales within its Vacation Club system, the
Company delivers the deed on behalf of the purchasers to the trustee of the
Vacation Club and secures repayment of the purchaser's obligation by obtaining a
mortgage on the purchaser's Timeshare Interest. The Company does not believe
that the transfer to a note and mortgage system will have a material adverse
effect on its servicing operations or financial results, although no assurances
can be given.
The Company also offers financing of up to 90% of the purchase price of
all parcels sold under the Residential Land and Golf Division to all purchasers
who qualify for such financing. The term of repayment on such 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 with increased
downpayments. Management believes such strategy has improved the quality of the
notes receivable generated by its Residential Land and Golf Division in recent
years. An average note receivable underwritten by the Company during fiscal
1998, 1999 and 2000 has a term of ten years. Most notes receivable bear interest
at a fixed interest rate and are secured by a first lien on the land.
The weighted-average interest rate on the Company's notes receivable
was 14.9%, 15.0% and 15.1% at March 29, 1998, March 28, 1999 and April 2, 2000,
respectively.
Loan Underwriting
Resorts Division. Consistent with industry practice, Timeshare Interest
financing is not subject to extensive loan underwriting criteria. Customer
financing on sales of Timeshare Interests requires (i) receipt of a minimum
downpayment of 10% of the purchase price and (ii) a contract for deed or note
and mortgage, as applicable, and other closing documents between the Company and
the purchaser. The Company encourages purchasers to make increased downpayments
by offering a lower interest rate. In addition, purchasers 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 otherwise prevailing rate.
Historically, timeshare receivables have had a higher default rate than
residential land receivables.
Residential Land and Golf Division. The Company has established loan
underwriting criteria and procedures designed to reduce credit losses on its
residential land loan portfolio. The loan underwriting process undertaken by the
Company's credit department 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 review 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, as
applicable.
In order to obtain financing from the Residential Land and Golf
Division, a prospective purchaser must submit a completed and signed credit
application, purchase and sale agreement and pre-authorized checking agreement
accompanied by a voided check, if applicable, to the Company's 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.
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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.
Collection Policies
Resorts Division. The Company's timeshare receivables have been
historically documented by contracts for deed, which allows the Company to
retain title to the Timeshare Interest until the obligation is paid in full,
thereby eliminating the need to foreclose in the event of a default. Collection
efforts and delinquency information concerning the Resorts Division are managed
at the Company's corporate headquarters. Servicing of the division's 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. If a contract for deed becomes
delinquent for ten 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 30 days delinquent, the Company typically sends a third letter
advising the customer that such customer has 30 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 customer that he or she has 30 days to bring the
account current or lose his or her contractual interest in the timeshare unit.
When the account becomes 90 days delinquent, the Company forwards a final letter
informing the customer that the contract for deed has been terminated. At such
time, the Timeshare Interest can be resold to a new purchaser. In connection
with the implementation of its points-based Vacation Club system, the Company
has converted to a note and mortgage system. In addition to the 10, 15 and 30
day collection correspondence outlined above, at 60 days delinquent, a lock-out
letter is sent to the Vacation Club customer prohibiting such customer from
making a reservation for lodging at a resort property. If the default continues,
at 90 days delinquent, a Notice of Intent to Cancel Membership is mailed. This
informs the customer that unless the default is cured within 30 days, membership
in the Vacation Club will be terminated. If the default is not cured, a
Termination Letter is sent, typically at 120 days. At such time, the Timeshare
Interest can be resold to a new purchaser.
Residential Land and Golf Division. Collection efforts and delinquency
information concerning the Residential Land and Golf Division are also managed
at the Company's corporate headquarters. Servicing of the division's 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 customer via telephone to
determine the reason for the delinquency and to bring the account current. The
determination of how to handle a delinquent loan is based upon many factors,
including the customer's payment history and the reason for the current
inability to make timely payments. If no agreement is made or the customer 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 through the resale of the underlying collateral and not
through collection on the note) and the Credit/Collection Manager determines the
action to be taken.
Loan Loss Reserves. The reserve for loan losses as a percentage of
period end notes receivable was 2.5%, 3.5% and 4.1% at March 29, 1998, March 28,
1999 and April 2, 2000, 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, estimated value of the underlying collateral, present and expected
economic conditions as well as the quality of the receivables. (See "MD&A" for
further discussion of the Company's provision for loan losses.)
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SALES OF RECEIVABLES/PLEDGING OF RECEIVABLES
Since 1986, the Company has sold or pledged a significant amount of its
receivables, generally retaining the right and obligation to service such
receivables. In the case of residential land and golf receivables, the Company
historically transferred the receivables to a special purpose finance
subsidiary, which in turn enters into a receivables securitization. The
receivables were typically sold by such subsidiary with limited or no recourse.
In the case of receivables pledged to a financial institution, 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.
Private placement REMIC financings have provided substantial capital
resources to the Company, although the Company has not completed a REMIC
financing since December 1996, due to the decrease in land sales financed by 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.
On June 26, 1998, the Company executed a two-year timeshare receivables
purchase facility with a financial institution. Under the purchase facility (the
"Purchase Facility"), a special purpose finance subsidiary of the Company sold
$103.1 million aggregate principal amount of timeshare receivables to the
financial institution in securitization transactions. Receivables were sold
without recourse to the Company or its special purpose finance subsidiary except
for breaches of representations and warranties made at the time of sale. The
Company acts as servicer under the Purchase Facility for a fee, and is required
to make advances to the financial institution to the extent it believes such
advances will be recoverable. Although the Purchase Facility has expired, the
Company is currently negotiating a new $90.0 million timeshare receivables
purchase facility with the same financial institution and another financial
institution. There can be no assurances that the Company's negotiations will
result in the Company obtaining such a facility on acceptable terms to the
Company, if at all. In connection with the Purchase Facility, the Company also
entered into a two-year warehouse facility with the same institution, pursuant
to which the Company had the ability to borrow against receivables prior to
their sale under the Purchase Facility. The Company is also currently
negotiating a new warehouse facility. There can be no assurances that such
negotiations will be successful. See further discussion of the terms of the
Purchase Facility and the warehouse facility under "MD&A" -- Credit Facilities
for Timeshare Receivables and Inventories".
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, or terminating a
contract for deed or membership in the Vacation Club 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 and all of the receivables sold under the Purchase Facility. The Company
typically receives an annual servicing fee ranging from approximately .5% to
2.0% of the principal balance.
REGULATION
The timeshare and real estate industries are subject to extensive and
complex 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. On a federal level,
the Federal Trade Commission has taken an active regulatory role through the
Federal Trade Commission Act, which prohibits unfair or deceptive acts or
competition in interstate commerce. In addition to the laws applicable to the
Company's customer financing and other operations discussed below, the Company
is or may be subject to the Fair Housing Act and various other federal statutes
and regulations. The Company is also subject to various foreign laws with
respect to the Aruba Resort. In addition, there can be no assurance that in the
future, Timeshare Interests will not be deemed to be securities subject to
regulation as such, which could have a material adverse effect on the Company.
The Company believes that it is in compliance in all material respects with
applicable regulations. However, no assurance can be given that the cost of
complying with applicable laws and regulations will not be significant or that
the Company is in fact in compliance with applicable law. Any failure to comply
with applicable laws or regulations could have a material adverse effect on the
Company.
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The Company's sales and marketing of residential land are subject to
various consumer protection laws and 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 timeshare resorts are subject to various regulatory
requirements including state and local approvals. The laws of most states
require the Company to file with a designated state authority for its approval a
detailed offering statement describing the Company and all material aspects of
the project and sale of Timeshare Interests. Laws in each state where the
Company sells Timeshare Interests generally grant the purchaser of a Timeshare
Interest the right to cancel a contract of purchase at any time within a
specified period following the earlier of the date the contract was signed or
the date the purchaser has received the last of the documents required to be
provided by the Company. Most states have other laws which regulate the
Company's activities, such as real estate licensure; seller's of travel
licensure; anti-fraud laws; telemarketing laws; prize, gift and sweepstakes
laws; and labor laws. In addition, certain state and local laws may impose
liability on property developers with respect to construction defects discovered
or repairs made by future owners of such property. Pursuant to such laws, future
owners may recover from the Company amounts in connection with the repairs made
to the developed property. As required by 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 a Timeshare Interests owner.
Under various federal, state and local laws, ordinances and
regulations, the owner of real property generally is liable for the costs of
removal or remediation of certain hazardous or toxic substances located on or
in, or emanating from, such property, as well as related costs of investigation
and property damage. Such laws often impose such liability without regard to
whether the owner knew of, or was responsible for, the presence of such
hazardous or toxic substances. The presence of such substances, or the failure
to properly remediate such substances, may adversely affect the owner's ability
to sell or lease a property or to borrow using such real property as collateral.
Other federal and state laws require the removal or encapsulation of
asbestos-containing material when such material is in poor condition or in the
event of construction, demolition, remodeling or renovation. Other statutes may
require the removal of underground storage tanks. Noncompliance with these and
other environmental, health or safety requirements may result in the need to
cease or alter operations at a property.
The Company's customer financing activities are also subject to
extensive regulation, which may include, the Truth-in-Lending Act and Regulation
Z, the Fair Housing Act, the Fair Debt Collection Practices Act, the Equal
Credit Opportunity Act and Regulation B, the Electronic Funds Transfer Act and
Regulation E, the Home Mortgage Disclosure Act and Regulation C, Unfair or
Deceptive Acts or Practices and Regulation AA and the Right to Financial Privacy
Act.
Management is not aware of any pending regulatory contingencies that
are expected to have a material 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. The Resorts Division competes with various high profile and
well-established operators. Many of the world's most recognized lodging,
hospitality and entertainment companies have begun to develop and sell Timeshare
Interests in resort properties. Major companies that now operate or are
developing or planning to develop timeshare resorts include Marriott, Disney,
Hilton, Hyatt, Four Seasons, Starwood, Carlson and Bass Hotels. The Company also
competes with other publicly traded timeshare companies, including Sunterra,
Fairfield, Silverleaf and numerous other owners and operators of timeshare
resorts. The Residential Land and Golf Division competes with builders,
developers and others for the acquisition of property and with local, regional
and national developers, housebuilders and others with respect to the sale of
residential lots. Competition may be generally
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smaller with respect to the Company's residential 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, as noted above, 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. The development and operation of
additional timeshare resorts in the Company's markets could have a material
adverse impact on the demand for the Company's Timeshare Interests and its
results of operations. In its customer financing activities, the Company
competes with banks, mortgage companies, other financial institutions and
government agencies offering financing of real estate. In recent years, the
Company has experienced increased competition with respect to the financing of
Residential Land and Golf Division sales as evidenced by the low percentage of
residential land sales internally financed since 1995. 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 April 2, 2000, the Company had 2,181 employees. Of the 2,181
employees, 170 were located at the Company's headquarters in Boca Raton,
Florida, and 2,011 in regional field offices throughout the United States and
Canada (the field personnel include 242 field employees supporting the Company's
Residential Land and Golf Division and 1,769 field employees supporting the
Company's Resorts Division). Only the Company's employees in Aruba 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 as of June 22, 2000.
Name Age Position
---- --- --------
George F. Donovan 61 President and Chief Executive Officer
John F. Chiste 44 Senior Vice President, Chief Financial Officer and Treasurer
L. Nicolas Gray 53 Senior Vice President - Resorts Division
Daniel C. Koscher 42 Senior Vice President - Land Division
David D. Philp 38 Chief Investment Officer
Patrick E. Rondeau 53 Senior Vice President, Director of Corporate Legal Affairs and Clerk
Allan J. Herz 40 Vice President and Director of Mortgage Operations
Joan A. McCormick 57 Vice President and Chief Information Officer
Susan J. Milanese 41 Vice President and Director of Human Resources
Anthony M. Puleo 32 Vice President and Chief Accounting Officer
GEORGE F. DONOVAN joined the Company as a Director in 1991 and was appointed
President and Chief Operating Officer in October 1993. He became Chief Executive
Officer in December 1993. Mr. Donovan has served as an officer of a number of
other recreational real estate corporations, including Leisure Management
International, of which he was President from 1991 to 1993, and Fairfield
Communities, Inc., of which he was President from April 1979 to December 1985.
Mr. Donovan holds a B.S. in Electrical Engineering and is a Registered Resort
Professional.
JOHN F. CHISTE joined the Company in July 1997 as Treasurer and Chief Financial
Officer. In 1998, Mr. Chiste was also named Senior Vice President. From January
1997 to June 1997, Mr. Chiste was the Chief Financial Officer of Compscript,
Inc., an entity which provides institutional pharmacy services to long-term
health care facilities. 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 nationwide. From 1983 through 1992, Mr.
Chiste held various positions with Ernst & Young LLP, most recently serving as a
Senior Manager. Mr. Chiste holds a B.B.A. in Accounting and is a Certified
Public Accountant.
L. NICOLAS 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 1995. Prior to
that time, Mr. Gray was Executive Vice President and General Manager for the
resort developments of Thousand Trails from 1989 to 1991 and Fairfield
Communities from 1979 to 1989. Mr. Gray is a Registered Resort Professional.
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DANIEL C. KOSCHER joined the Company in 1986. During his tenure, he has served
in various financial management positions including Chief Accounting Officer,
Vice President and Director of Planning/Budgeting. In 1997, he became Senior
Vice President, Residential Land and Golf 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 an M.B.A. along with a B.B.A. in Accounting and is a
Registered Resort Professional.
DAVID D. PHILP joined the Company in August 1999 as Chief Investment Officer.
From February 1996 to August 1999, Mr. Philp was a Vice President and Corporate
Officer directly responsible for new property acquisitions with Sunterra
Corporation, a publicly-held timeshare resort developer. From September 1995 to
January 1996, he served as a co-owner of E & O Development, an entity involved
in the development of new restaurant concepts in California. From September 1994
to August 1995, Mr. Philp was a Regional Director of Development with
responsibility for property acquisitions and hotel management contract
negotiations for Doubletree Hotels Corporation, a national hotel chain. Mr.
Philp holds a B.S. in Hotel Administration.
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 Freedman, 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 also 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 also elected Vice President in February 1995. In
1998, Ms. McCormick was named Chief Information Officer. 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 of 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 a
B.B.A in Accounting.
ANTHONY M. PULEO joined the Company in October 1997 as Chief Accounting Officer.
In 1998, Mr. Puleo was also elected Vice President. From December 1990 through
October 1997, Mr. Puleo held various positions with Ernst & Young LLP, most
recently serving as a Senior Manager in the Assurance and Advisory Business
Services group. Mr. Puleo holds a B.B.A. in Accounting and is a Certified Public
Accountant.
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 65,000 square feet of leased space. On April 2, 2000,
the Company also maintained regional sales offices in the Northeastern,
Mid-Atlantic, Southeastern, Midwestern, Southwestern and Western regions of the
United States as well as the Province of Ontario, Canada and the island of
Aruba. See further description of the Company's resort and land properties under
"Item 1--Company Products".
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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.
In addition to its other ordinary course litigation, the Company became
a defendant in two proceedings during fiscal 1999. First, an action was filed in
Colorado state court against the Company on December 15, 1998 (the Company has
removed the action to the Federal District Court in Denver). The plaintiff has
asserted that the Company is in breach of its obligations under, and has made
certain misrepresentations in connection with, a contract under which the
Company acted as marketing agent for the sale of undeveloped property owned by
the plaintiff. The plaintiff also alleges fraud, negligence and violation by the
Company of an alleged fiduciary duty owed to plaintiff. Among other things, the
plaintiff alleges that the Company failed to meet certain minimum sales
requirements under the marketing contract and failed to commit sufficient
resources to the sale of the property. The complaint seeks damages in excess of
$18 million and certain other remedies, including punitive damages.
Second, an action (the "Action") was filed on July 10, 1998 in the
District Court for the State of Texas in the County of Montgomery against two
subsidiaries of the Company and various other defendants. The Company itself is
not named as a defendant. The Company's subsidiaries acquired certain real
property (the "Property"). The Property was acquired subject to certain alleged
oil and gas leasehold interests and rights (the "Interests") held by the
plaintiffs in the Action (the "Plaintiffs"). The Company's subsidiaries
developed the Property and have resold parcels to numerous customers. The
Plaintiffs allege, among other things, breach of contract, slander of title and
that the Company's subsidiaries and their purchasers have unlawfully trespassed
on easements and otherwise violated and prevented the Plaintiffs from exploiting
the Interests. The Plaintiffs claim damages in excess of $40 million, as well as
punitive or exemplary damages in an amount of at least $50 million and certain
other remedies.
The Company is continuing to evaluate these actions and their potential
impact, if any, on the Company and accordingly cannot predict the outcomes with
any degree of certainty. However, based upon all of the facts presently under
consideration of management, the Company believes that it has substantial
defenses to the allegations in each of the actions and intends to defend each of
these matters vigorously. The Company does not believe that any likely outcome
of either case will have a material adverse effect on the Company's financial
condition or results of operations.
On September 17, 1999, the Company received a Notice of Proposed Audit
Report (the "Notice") from the State of Wisconsin Department of Revenue (the
"DOR") alleging that, subject to possible changes to be made in a final Notice
of Field Audit Action, two subsidiaries now owned by the Company failed to pay
sales and use taxes to the State of Wisconsin during the period from January 1,
1994 through September 30, 1997. The DOR contends that these taxes could
approximate $2.5 million. The majority of the proposed assessment is based on
the failure of the subsidiaries to charge sales tax to purchasers of Timeshare
Interests at the Company's Christmas Mountain Village resort. In addition to the
proposed assessment, the Notice indicated that interest would be charged, but no
penalties would be assessed. These subsidiaries were acquired by the Company in
connection with the acquisition of RDI Group, Inc. on September 30, 1997. Under
the RDI purchase agreement, the Company has the right to set off payments owed
by the Company to RDI's former stockholders under a note payable with a current
outstanding balance of $1 million (see Note 9 of Notes to Consolidated Financial
Statements) and to make a claim against such stockholders for certain amounts
previously paid to them for any breach of representations and warranties up to a
maximum of $500,000. The Company has notified the former stockholders that it
intends to exercise these rights to mitigate any settlement with the DOR in this
matter. If a Notice of Field Audit Action is issued by the DOR in this matter,
the Company intends to vigorously appeal any assessment of sales tax on
Timeshare Interest sales.
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 32 of the 2000 Annual Report is
incorporated herein by reference.
The Company did not pay any cash or stock dividends during fiscal 1999
or fiscal 2000. The Company does not anticipate paying any dividends in the
foreseeable future, as it currently anticipates that it will retain any future
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earnings for use in its business. Restrictions contained in the Indenture
related to the Company's $110 million 10 1/2% Senior Secured Notes due 2008
issued in April 1998, and certain of the Company's credit facilities may, in
certain instances, limit the payment of cash dividends on its Common Stock.
On August 14, 1998, the Company entered into a Securities Purchase
Agreement (the "Stock Agreement") with Morgan Stanley Real Estate Investors III,
L.P., Morgan Stanley Real Estate Fund III, L.P., MSP Real Estate Fund, L.P., and
Morgan Stanley Real Estate Fund III Special Fund, L.P. (collectively, the
"Funds") pursuant to which the Funds purchased 4.1 million and 1.8 million
shares of the Company's Common Stock for an aggregate of $35 million and $15
million during fiscal 1999 and 2000, respectively. Aggregate legal and other
stock issuance costs totaled approximately $774,000. Subject to certain
exceptions, the Funds have agreed not to offer, sell, transfer, assign, pledge
or hypothecate any shares of common stock issued to them prior to August 14,
2000.
Shares of Common Stock sold to the Funds were exempt from registration
under the Securities Act of 1933, by virtue of Section 4(2) and Rule 506 of
Regulation D and issued thereunder.
ITEM 6. SELECTED FINANCIAL DATA.
The information provided on page 17 of the 2000 Annual Report is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
The information provided under the heading "Management's Discussion and
Analysis of Results of Operations and Financial Condition" on pages 18 through
31 of the 2000 Annual Report is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information provided on pages 31 through 32 of the 2000 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 33 through 59 of the 2000 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 "Proposal 1 - Election of Nominees for
Director" and "Certain Relationships and Other Transactions" in the Proxy
Statement, which sections are incorporated herein by reference. Information
concerning the executive officers of the Company appears in Item 1 of Part I of
this Annual Report on Form 10-K.
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 "Proposal 1 - Election of
Nominees for Director," "Board of Directors and its Committees," "Compensation
Committee Report on Executive Compensation", "Compensation of Chief Executive
Officer", "Executive Compensation" and "Certain Relationships and Other
Transactions" in the Company's Proxy Statement is incorporated herein by
reference.
19
22
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information provided under the heading "Proposal 1 - Election of
Nominees for Director" in the Proxy Statement is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information provided under the headings "Proposal 1 - Election of
Nominees for Director," "Executive Compensation" and "Certain Relationships and
Other Transactions" in the 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 2000
Annual Report on pages 33 through 59 are incorporated by reference into
Item 8 hereof:
Page
----
Consolidated Balance Sheets as of March 28, 1999 and April 2, 2000 33
Consolidated Statements of Income for each of the three years in the period
ended April 2, 2000 34
Consolidated Statements of Shareholders' Equity for each of the three years
in the period ended April 2, 2000 35
Consolidated Statements of Cash Flows for each of the three years in the period
ended April 2, 2000 36
Notes to Consolidated Financial Statements 38
Report of Independent Certified Public Accountants 59
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 22 through 24 hereof and are incorporated
herein by reference.
(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.
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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 27, 2000 By: /S/ GEORGE F. DONOVAN
----------------------------------------------------
George F. Donovan,
President and Chief Executive Officer
Date: June 27, 2000 By: /S/ JOHN F. CHISTE
----------------------------------------------------
John F. Chiste,
Senior Vice President, Treasurer and Chief Financial Officer
(Principal Financial Officer)
Date: June 27, 2000 By: /S/ ANTHONY M. PULEO
----------------------------------------------------
Anthony M. Puleo,
Vice President and Chief Accounting Officer
(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 27th day of June, 2000.
Signature Title
--------- -----
/S/ GEORGE F. DONOVAN President, Chief Executive Officer and Director
- --------------------------------------
George F. Donovan
/S/ JOHN F. CHISTE Senior Vice President, Treasurer and Chief Financial Officer
- -------------------------------------- (Principal Financial Officer)
John F. Chiste
/S/ ANTHONY M. PULEO Vice President and Chief Accounting Officer
- -------------------------------------- (Principal Accounting Officer)
Anthony M. Puleo
/S/ JOSEPH C. ABELES Director
- --------------------------------------
Joseph C. Abeles
/S/ RALPH A. FOOTE Director
- --------------------------------------
Ralph A. Foote
/S/ MICHAEL J. FRANCO Director
- --------------------------------------
Michael J. Franco
/S/ FREDERICK M. MYERS Director and Chairman of the Board
- --------------------------------------
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
/S/ JOSEPH M. ZUBER Director
- --------------------------------------
Joseph M. Zuber
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EXHIBIT INDEX
NUMBER DESCRIPTION
- ------ -----------
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 Current Report on Form
8-K dated August 14, 1998).
4.4 - Specimen of Common Stock Certificate.
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).
4.7 - Indenture dated as of April 1, 1998 by and among the Registrant, certain subsidiaries of the Registrant, and
SunTrust Bank, Central Florida, National Association, as trustee, for the 10 1/2% Senior Secured Notes due 2008.
(incorporated by reference to exhibit of same designation to Registration Statement on Form S-4, File No.
333-50717)
4.8 - First Supplemental Indenture dated as of March 15, 1999 by and among the Registrant, certain subsidiaries of the
Registrant, and SunTrust Bank, Central Florida, National Association, as trustee, for the 10 1/2% Senior Secured
Notes due 2008 (incorporated by reference to exhibit of same designation to Annual Report on Form 10-K for the
fiscal year ended March 28, 1999).
10.24 - Form of Agreement dated June 27, 1989 between the Registrant and Peoples Heritage Savings Bank relating to sale of
mortgage notes receivable (incorporated by reference to exhibit of same designation to Annual Report on Form 10-K
for the fiscal year ended April 2, 1989).
10.77 - Registrant's Amended 1988 Outside Directors Stock Option Plan (incorporated by reference to exhibit of same
designation to Annual Report on Form 10-K for the fiscal year ended March 29, 1992).
10.78 - Registrant's 1988 Amended Outside Director's Stock Option Plan (incorporated by reference to exhibit to
Registration Statement on Form S-8, File No. 33-61687).
10.79 - Registrant's 1998 Non-Employee Director Stock Option Plan (incorporated by reference to exhibit 10.131 to Annual
report on Form 10-K for the year ended March 29, 1998).
10.80 - Registrant's 1995 Stock Incentive Plan, as amended (incorporated by reference to exhibit 10.79 to Annual Report on
Form 10-K for the fiscal year ended March 29, 1998).
10.81 - Registrant's Retirement Savings Plan (incorporated by reference to Registration Statement on Form S-8, File No.
33-48075).
10.85 - Loan and Security Agreement by and between the Registrant and Foothill Capital Corporation dated as of October 29,
1993 (incorporated by reference to exhibit of same designation to Annual Report on Form 10-K for the fiscal year
ended March 27, 1994).
10.93 - Stock Purchase Agreement dated as of November 22, 1994 by and among Harry S. Patten and the Purchasers named
therein (incorporated by reference to exhibit of same designation to Current Report on Form 8-K dated November 22,
1994).
10.98 - Pooling and Servicing Agreement dated as of June 15, 1995, among Patten Receivables Finance Corporation X, the
Registrant, Patten Corporation REMIC Trust, Series 1995-1 and First Trust National Association, as Trustee
(incorporated by reference to exhibit to Current Report on Form 8-K dated July 12, 1995).
10.99 - Pooling and Servicing Agreement dated as of April 15, 1996, among Bluegreen Receivables Finance Corporation I, the
Registrant, Bluegreen Corporation REMIC Trust, Series 1996-1 and First Trust National Association, as Trustee
(incorporated by reference to exhibit to Current Report on Form 8-K dated May 15, 1996).
10.100 - 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 December 11, 1996).
10.102 - Amended and Restated Sale and Contribution Agreement dated as of October 1, 1999 by and among Bluegreen
Corporation Receivables Finance Corporation III and BRFC III Deed Corporation (incorporated by reference to
exhibit 10.103 to Quarterly Report on Form 10-Q dated January 2, 2000).
22
25
10.104 - Amended and Restated Asset Purchase Agreement dated as of October 1, 1999 by and among Bluegreen Corporation,
Bluegreen Receivables Finance Corporation III, BRFC III Deed Corporation, Heller Financial Inc., Vacation Trust,
Inc. and U.S. Bank National Association, as cash administrator, including Definitions Annex (incorporated by
reference to exhibit of same designation to Quarterly Report on Form 10-Q dated January 2, 2000).
10.123 - Exchange and Registration Rights Agreement dated April 1, 1998, by and among the Registrant and the persons named
therein, relating to the 10 1/2% Senior Secured Notes due 2008 (incorporated by reference to exhibit of same
designation to Registration Statement on Form S-4, File No. 333-50717).
10.124 - Employment Agreement between George F. Donovan and the Company dated March, 1998 (incorporated by reference to
exhibit of same designation to Registration Statement on Form S-4, File No. 333-50717).
10.125 - Employment Agreement between John F. Chiste and the Company dated March, 1998 (incorporated by reference to
exhibit of same designation to Registration Statement on Form S-4, File No. 333-50717).
10.126 - Employment Agreement between L. Nicolas Gray and the Company dated March, 1998 (incorporated by reference to
exhibit of same designation to Registration Statement on Form S-4, File No. 333-50717).
10.127 - Employment Agreement between Daniel C. Koscher and the Company dated March, 1998 (incorporated by reference to
exhibit of same designation to Registration Statement on Form S-4, File No. 333-50717).
10.128 - Employment Agreement between Patrick E. Rondeau and the Company dated March, 1998 (incorporated by reference to
exhibit of same designation to Registration Statement on Form S-4, File No. 333-50717).
10.129 - Employment Agreement between David D. Philp and the Company dated August 30, 1999 (incorporated by reference to
exhibit of same designation to Quarterly Report on Form 10-Q dated October 3, 1999).
10.130 - Amended and Restated Credit Facility Agreement entered into as of April 16, 1998 between Finova Capital
Corporation and the Registrant (incorporated by reference to exhibit 10.129 to Registration Statement on Form S-4,
File No. 333-50717).
10.131 - Second Amended and Restated Credit Facility Agreement entered into as of September 14, 1999, between Finova
Capital Corporation and the Registrant (incorporated by reference to exhibit 10.130 to Quarterly Report on Form
10-Q dated October 3, 1999).
10.132 - Amended and Restated Loan and Security Agreement dated as of September 23, 1997 between Foothill Capital
Corporation and the Registrant (incorporated by reference to exhibit 10.130 to Registration Statement on Form S-4,
File No. 333-50717).
10.133 - Loan and Security Agreement dated October 20, 1998, by the Registrant and Bluegreen Resorts, Inc. as Borrowers and
Heller Financial, Inc. as Lender (incorporated by reference to exhibit of same designation to Quarterly Report on
Form 10-Q dated December 27, 1998).
10.134 - Master Bluegreen Resort Loan Facility dated October 20, 1998, by and between the Registrant and Heller Financial,
Inc. (incorporated by reference to exhibit of same designation to Quarterly Report on Form 10-Q dated December 27,
1998).
10.135 - Acquisition Cost Reimbursement Loan Agreement dated as of September 14, 1999, by and between Bluegreen Vacations
Unlimited, Inc. and Heller Financial, Inc. (incorporated by reference to exhibit of same designation to Quarterly
Report on Form 10-Q dated October 3, 1999).
10.136 - Acquisition and Construction Cost Reimbursement Loan Agreement dated as of December 1, 1999, by and between
Bluegreen Vacations Unlimited, Inc. and Heller Financial, Inc. (incorporated by reference to exhibit of same
designation to Quarterly Report on Form 10-Q dated January 2, 2000).
10.137 - Letter dated December 1, 1999, amending the Master Bluegreen Resort Facility, dated as of October 20, 1998,
between Bluegreen Corporation and Heller Financial, Inc. (incorporated by reference to exhibit of same designation
to Quarterly Report on Form 10-Q dated January 2, 2000).
10.140 - Loan Agreement dated as of September 24, 1999, between Bluegreen Properties of Virginia, Inc. and Branch Banking
and Trust Company (incorporated by reference to exhibit of same designation to Quarterly Report on Form 10-Q dated
October 3, 1999).
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26
10.145 - Purchase Agreement dated as of August 14, 1998 by and among Bluegreen Corporation, Morgan Stanley Real Estate
Investors III, L.P., Morgan Stanley Real Estate Fund III, L.P., MSP Real Estate Fund, L.P. and MSREF III Special
Fund, L.P. (incorporated by reference to exhibit 10.131 to Current Report on Form 8-K dated August 14, 1998).
10.146 - Registration Rights Agreement, dated as of August 14, 1998, among Morgan Stanley Real Estate Investors III, L.P.,
Morgan Stanley Real Estate Fund III, L.P., MSP Real Estate Fund, L.P and MSREF III Special Fund, L.P. and
Bluegreen Corporation (incorporated by reference to exhibit 10.132 to Current Report on Form 8-K dated August 14,
1998).
10.147 - Voting and Cooperation Agreement, dated as of August 14, 1998, among Morgan Stanley Real Estate Investors III,
L.P., Morgan Stanley Real Estate Fund III, L.P., MSP Real Estate Fund, L.P., MSREF III Special Fund, L.P. and
certain shareholders of Bluegreen Corporation (incorporated by reference to exhibit 10.133 to Current Report on
Form 8-K dated August 14, 1998).
10.150 - Loan Agreement and Promissory Note dated September 23, 1998, by and among the Registration, certain subsidiaries
of the Registrant and First Union National Bank, for the $5 million, unsecured revolving line-of-credit due July
31, 1999 (incorporated by reference to exhibit 10.132 to Quarterly Report on Form 10-Q dates September 27, 1998).
10.151 - Modification No. 1 to the Loan Agreement and Renewal Promissory Note dated August 1, 1999 by and among the
Registrant, certain subsidiaries of the Registrant and First Union National Bank, for the $5 million, unsecured
revolving line-of-credit due December 31, 2000 (incorporated by reference to exhibit of same designation to
Quarterly Report on Form 10-Q dated July 4, 1999).
10.152 - Modification No. 2 to the Loan Agreement dated November 3, 1999 by and among the Registrant, certain subsidiaries
of the Registrant and First Union National Bank, for the $10 million, unsecured revolving line-of-credit due
December 31, 2000 (incorporated by reference to exhibit of same designation to Quarterly Report on Form 10-Q dated
October 3, 1999).
13.1 - Portions of the 2000 Annual Report.
21.1 - List of Subsidiaries.
23.1 - Consent of Ernst & Young LLP.
27.1 - Financial Data Schedule. (for SEC use only)
24