Exhibit 99.1

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

BLUEGREEN CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

		December 31,				December 31,
		2008				2009
ASSETS
Cash and cash equivalents (including restricted cash of $21,214 and $23,908 at December 31, 2008 and 2009, respectively)		$	81,775			$	94,399
Contracts receivable, net			7,452				4,826
Notes receivable (net of allowance of $52,029 and $46,826 at December 31, 2008 and 2009, respectively)			340,644				309,307
Prepaid expenses			9,801				7,884
Other assets			27,488				35,054
Inventory			503,269				515,917
Retained interests in notes receivable sold			113,577				78,313
Property and equipment, net			109,501				85,565
Total assets		$	1,193,507			$	1,131,265
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Accounts payable		$	24,900			$	14,846
Accrued liabilities and other			52,283				51,083
Deferred income			29,854				14,883
Deferred income taxes			91,802				87,797
Receivable-backed notes payable			249,117				242,828
Lines-of-credit and notes payable			222,739				185,781
Junior subordinated debentures			110,827				110,827
Total liabilities			781,522				708,045
Commitments and contingencies (Note 12)
Shareholders’ Equity
Preferred stock, $.01 par value, 1,000 shares authorized; none issued			—				—
Common stock, $.01 par value, 90,000 and 140,000 shares authorized; 33,996 and 34,099 shares issued at December 31, 2008 and 2009, respectively			339				341
Additional paid-in capital			182,654				187,006
Treasury stock, 2,756 common shares at both December 31, 2008 and 2009, at cost			(12,885	)			(12,885	)
Accumulated other comprehensive income (loss), net of income taxes			3,173				(608	)
Retained earnings			209,186				212,376
Total Bluegreen Corporation shareholders’ equity			382,467				386,230
Non-controlling interest			29,518				36,990
Total shareholders’ equity			411,985				423,220
Total liabilities and shareholders’ equity		$	1,193,507			$	1,131,265

See accompanying notes to consolidated financial statements.

BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

		Year Ended				Year Ended				Year Ended
		December 31,				December 31,				December 31,
		2007				2008				2009
Revenues:
Gross sales of real estate		$	605,250			$	542,632			$	250,573
Estimated uncollectible VOI notes receivable			(65,242	)			(75,847	)			(31,205	)
Gains on sales of VOI notes receivable			39,372				8,245				—
Sales of real estate			579,380				475,030				219,368
Other resort and communities operations revenue			59,707				62,000				57,199
Fee-based sales commission revenue			—				—				20,057
Interest income			44,703				57,831				69,337
			683,790				594,861				365,961
Costs and expenses:
Cost of real estate sales			178,731				130,267				91,892
Cost of other resort and communities operations			42,459				40,917				37,970
Selling, general and administrative expenses			377,552				369,700				189,630
Interest expense			24,272				20,888				36,132
Other expense, net			1,743				1,637				1,810
Restructuring charges			—				15,617				—
Goodwill impairment charge			—				8,502				—
			624,757				587,528				357,434
Income before non-controlling interest, provision (benefit) for income taxes and discontinued operations			59,033				7,333				8,527
Provision (benefit) for income taxes			19,177				753				(2,640	)
Income from continuing operations			39,856				6,580				11,167
Discontinued operations:
Operations of sold properties, net of tax			(209	)			(1	)			(440	)
Loss on disposal of properties, net of tax			—				—				(6,827	)
Loss from discontinued operations			(209	)			(1	)			(7,267	)
Net income			39,647				6,579				3,900
Less: Net income attributable to non-controlling interest			7,721				7,095				7,472
Net income (loss) attributable to Bluegreen Corporation		$	31,926			$	(516	)		$	(3,572	)
Income (loss) from continuing operations attributable to Bluegreen Corporation per common share — Basic:
Earnings (loss) per share from continuing operations attributable to Bluegreen shareholders		$	1.04			$	(0.02	)		$	0.12
Loss per share for discontinued operations			(0.01	)			—				(0.23	)
Earnings (loss) per share attributable to Bluegreen shareholders		$	1.03			$	(0.02	)		$	(0.11	)
Income (loss) from continuing operations attributable to Bluegreen Corporation per common share —Diluted:
Earnings (loss) per share from continuing operations attributable to Bluegreen shareholders		$	1.03			$	(0.02	)		$	0.12
Loss per share for discontinued operations			(0.01	)			—				(0.23	)
Earnings (loss) per share attributable to Bluegreen shareholders		$	1.02			$	(0.02	)		$	(0.11	)
Weighted average number of common shares:
Basic			30,975				31,241				31,088
Diluted			31,292				31,241				31,100

See accompanying notes to consolidated financial statements.

BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands)

										Equity Attributable to Bluegreen Shareholders
																										Accumulated
Common																						Treasury				Other Comprehensive				Equity Attributable
Shares										Common				Additional				Retained				Stock, at				Income (Loss), net				to Non-Controlling
Outstanding						Total				Stock				Paid-in-Capital				Earnings				Cost				of Income Taxes				Interests
	33,603			Balance at Dec. 31, 2006		$	367,725			$	336			$	175,164			$	177,776			$	(12,885	)		$	12,632				14,702
	—			Net income			39,647				—				—				31,926				—				—				7,721
	—			Other comprehensive loss			(2,824	)			—				—				—				—				(2,824	)			—
	—			Stock compensation			2,052				—				2,052				—				—				—				—
	140			Shares issued upon exercise of stock options			559				1				558				—				—				—				—
	214			Vesting of restricted stock			372				2				370				—				—				—				—
	33,957			Balance at Dec. 31, 2007			407,531				339				178,144				209,702			$	(12,885	)			9,808				22,423
	—			Net income (loss)			6,579				—				—				(516	)			—				—				7,095
	—			Other comprehensive loss			(6,635	)			—				—				—				—				(6,635	)			—
	—			Stock compensation			4,378				—				4,378				—				—				—				—
	39			Shares issued upon exercise of stock options			132				—				132				—				—				—				—
	33,996			Balance at Dec. 31, 2008			411,985				339				182,654				209,186				(12,885	)			3,173				29,518
	—			Net income (loss)			3,900				—				—				(3,572	)			—				—				7,472
	—			Other comprehensive income			405				—				—				—				—				405				—
	—			Stock compensation			4,404				—				4,404				—				—				—				—
	103			Vesting of restricted stock			2				2				—				—				—				—				—
	—			Stock issuance costs			(52	)			—				(52	)			—				—				—				—
	—			Cumulative effect — (See Note 4)			2,576				—				—				6,762				—				(4,186	)			—
	34,099			Balance at Dec. 31, 2009		$	423,220			$	341			$	187,006			$	212,376			$	(12,885	)		$	(608	)		$	36,990

See accompanying notes to consolidated financial statements.

BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

		Year Ended				Year Ended				Year Ended
		December 31,				December 31,				December 31,
		2007				2008				2009
Operating activities:
Net income		$	39,647			$	6,579			$	3,900
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Communities inventory impairment			—				5,204				13,159
Non-cash stock compensation expense			2,422				4,378				4,406
Depreciation and amortization			17,669				15,084				15,579
Gain on sales of notes receivable			(39,372	)			(8,245	)			—
Loss on disposal of property and equipment			688				5,140				173
Loss on sales of golf courses			—				—				10,544
Provision for loan losses			65,419				76,079				31,641
Provision (benefit) for deferred income taxes			12,468				(2,804	)			(3,409	)
Interest accretion on retained interests in notes receivable sold			(15,157	)			(17,729	)			(19,186	)
Proceeds from sales of notes receivable			229,067				55,705				—
Goodwill impairment			—				8,502				—
Changes in operating assets and liabilities:
Contracts receivable			3,324				13,080				2,626
Notes receivable			(305,972	)			(313,661	)			(21,332	)
Prepaid expenses and other assets			(473	)			3,898				(5,080	)
Inventory			(59,322	)			(53,470	)			6,178
Accounts payable, accrued liabilities and other			28,471				(26,407	)			(21,930	)
Net cash (used in) provided by operating activities			(21,121	)			(228,667	)			17,269
Investing activities:
Cash received from retained interests in notes receivable sold			35,949				44,884				43,741
Business acquisitions			—				(6,105	)			—
Investments in statutory business trusts			(619	)			—				—
Purchases of property and equipment			(15,855	)			(22,883	)			(7,521	)
Proceeds from sales of property and equipment			2				58				13
Proceeds from sales of golf courses, net			—				—				9,414
Net cash provided by investing activities			19,477				15,954				45,647
Financing activities:
Proceeds from borrowings collateralized by notes receivable			151,973				287,478				81,683
Payments on borrowings collateralized by notes receivable			(120,145	)			(94,964	)			(90,180	)
Proceeds from borrowings under line-of-credit facilities and notes payable			147,835				105,832				11,861
Payments under line-of-credit facilities and notes payable			(123,320	)			(90,907	)			(48,944	)
Payments on 10.50% senior secured notes			—				(55,000	)			—
Proceeds from issuance of junior subordinated debentures			20,619				—				—
Payments of debt issuance costs			(2,052	)			(3,056	)			(4,660	)
Stock issuance cost			—				—				(52	)
Proceeds from exercise of employee and director stock options			559				132				—
Net cash provided (used in) by financing activities			75,469				149,515				(50,292	)
Net increase (decrease) in cash and cash equivalents			73,825				(63,198	)			12,624
Cash and cash equivalents at beginning of period			71,148				144,973				81,775
Cash and cash equivalents at end of period			144,973				81,775				94,399
Restricted cash and cash equivalents at end of period			(19,460	)			(21,214	)			(23,908	)
Unrestricted cash and cash equivalents at end of period		$	125,513			$	60,561			$	70,491

See accompanying notes to consolidated financial statements

BLUEGREEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS—(Continued)
(in thousands)

		Year Ended				Year Ended				Year Ended
		December 31,				December 31,				December 31,
		2007				2008				2009
Supplemental schedule of non-cash operating, investing and financing activities:
Inventory acquired through financing		$	26,425			$	10,132			$	—
Property and equipment acquired through financing		$	1,188			$	4,639			$	—
Retained interests in notes receivable sold		$	36,222			$	9,624			$	(11,078	)
Net change in unrealized gains and losses in retained interests in notes receivable sold		$	(4,554	)		$	(10,391	)		$	369
Supplemental schedule of operating cash flow information:
Interest paid, net of amounts capitalized		$	24,407			$	21,813			$	36,372
Income taxes paid		$	9,823			$	5,390			$	2,475

See accompanying notes to consolidated financial statements.

BLUEGREEN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Significant Accounting Policies

Organization

We provide Colorful Places to Live and Play^® through our resorts and residential communities businesses. Our resorts business (“Bluegreen Resorts”) markets, sells and manages real estate-based vacation ownership interests (“VOIs”) in resorts, which are generally located in popular, high-volume, “drive-to” vacation destinations, and were either developed or acquired by us or developed by others, in which case we earn fees for providing these services. VOIs in our resorts and those sold by us on behalf of others typically entitle the buyer to use resort accommodations through an annual or biennial allotment of “points” which represent their ownership and beneficial use rights in perpetuity in the Bluegreen Vacation Club (supported by an underlying deeded VOI held in trust for the buyer). Members in the Bluegreen Vacation Club may stay in any of the 54 participating resorts or take advantage of an exchange program offered by a third-party world-wide vacation ownership exchange network of over 4,000 resorts and other vacation experiences such as cruises and hotel stays.

Our residential communities business (“Bluegreen Communities”) acquires, develops and subdivides property and markets residential homesites, the majority of which are sold directly to retail customers who seek to build a home generally in the future, in some cases on properties featuring a golf course and other related amenities.

Our other resort and communities operations revenues consist primarily of resort property and homeowners’ association management services, resort title services, resort amenity operations, non-cash sales incentives provided to buyers of VOIs, realty operations and daily-fee golf course operations. We also generate significant interest income by providing financing to individual purchasers of VOIs.

Principles of Consolidation

Our consolidated financial statements include the accounts of all of our wholly-owned subsidiaries and entities in which we hold a controlling financial interest. The only non-wholly owned subsidiary that we consolidate is Bluegreen/Big Cedar Vacations, LLC (the “Bluegreen/Big Cedar Joint Venture”), as we hold a 51% equity interest in the Bluegreen/Big Cedar Joint Venture, have an active role as the day-to-day manager of the Bluegreen/Big Cedar Joint Venture’s activities, and have majority voting control of the Bluegreen/Big Cedar Joint Venture’s management committee. We do not consolidate our statutory business trusts formed to issue trust preferred securities as these entities are each variable interest entities in which we are not the primary beneficiary as defined by Financial Accounting Standards Board (“FASB”) ASC 810-10. The statutory business trusts are accounted for under the equity method of accounting. We have eliminated all significant intercompany balances and transactions.

Basis of Presentation

On December 30, 2009, we sold four of our golf courses located in North Carolina and Virginia for an aggregate purchase price of approximately $9.4 million. The related golf operations and the 2009 pre-tax loss of $10.5 million recognized upon disposal have been presented as discontinued operations in the Consolidated Statements of Operations for the years ended December 31, 2007, 2008, and 2009.

Use of Estimates

United States generally accepted accounting principles (“GAAP”) require us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

We invest cash in excess of our immediate operating requirements in short-term time deposits and money market instruments generally with original maturities at the date of purchase of three months or less. We maintain cash and

cash equivalents with various financial institutions. These financial institutions are located throughout the United States, Canada and Aruba. Our policy is designed to limit exposure to any one institution. However, a significant portion of our unrestricted cash is maintained with a single bank and, accordingly, we are subject to credit risk. Periodic evaluations of the relative credit standing of financial institutions maintaining our deposits are performed to evaluate and mitigate, if necessary, credit risk.

Restricted cash consists primarily of customer deposits held in escrow accounts.

Revenue Recognition and Contracts Receivable

In accordance with the requirements of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) ASC 970 (for homesite sales) and under the timeshare accounting rules, we recognize revenue on VOI and homesite sales when a minimum of 10% of the sales price has been received in cash (demonstrating the buyer’s commitment), the legal rescission period has expired, collectibility of the receivable representing the remainder of the sales price is reasonably assured and we have completed substantially all of our obligations with respect to any development related to the real estate sold. We believe that we use a reasonably reliable methodology to estimate the collectibility of the receivables representing the remainder of the sales price of real estate sold. See further discussion of our policies regarding the estimation of credit losses on our notes receivable below. Should our estimates regarding the collectibility of our receivables change adversely, we may have to defer the recognition of sales and our results of operations could be negatively impacted. Under the provisions of timeshare accounting rules, the calculation of the adequacy of a buyer’s commitment for the sale of VOIs requires that cash received towards the purchase of our VOIs be reduced by the value of certain incentives provided to the buyer at the time of sale. If after considering the value of the incentive the 10% requirement is not met, the VOI sale, and the related cost and direct selling expenses, are deferred until such time that sufficient cash is received from the customer, generally through receipt of mortgage payments. Changes to the quantity, type, or value of sales incentives that we provide to buyers of our VOIs may result in additional VOI sales being deferred, in which case our results of operations may be materially adversely impacted.

In cases where all development has not been completed, we recognize revenue in accordance with the percentage-of-completion method of accounting. Should our estimates of the total anticipated cost of completing one of our Bluegreen Resorts’ or Bluegreen Communities’ projects increase, we may be required to defer a greater amount of revenue or may be required to defer revenue for a longer period of time, which may materially and adversely impact our results of operations.

Contracts receivable consists of: (1) amounts receivable from customers on recent sales of VOIs pending recording of the customers’ notes receivable in our loan servicing system; (2) receivables related to unclosed homesite sales; and (3) receivables from third-party escrow agents on recently closed homesite sales. Contracts receivable are stated net of a reserve for loan losses of $0.2 million and $0.6 million at December 31, 2008 and 2009, respectively.

Under timeshare accounting rules, rental operations, including accommodations provided through the use of our Sampler program, are accounted for as incidental operations whereby incremental carrying costs in excess of incremental revenue are charged to expense as incurred. Conversely, incremental revenue in excess of incremental carrying costs is recorded as a reduction to VOI inventory. Incremental carrying costs include costs that have been incurred by us during the holding period of the unsold VOIs, such as developer subsidies and maintenance fees. During the years ended December 31, 2009 and 2008, all of our rental revenue and Sampler revenue earned was recorded as an off-set to cost of other resort and communities operations as such amounts were less than the incremental carrying cost.

In addition to sales of real estate, we also generate revenue from the activities listed below. The table provides a brief description of the applicable revenue recognition policy:

Activity		Revenue is recognized as:
Resort title fees		Escrow amounts are released and title documents are completed.
Resort Management and service fees		Management services are rendered.

Activity		Revenue is recognized as:
Fee-based sales commissions		Sales of third party VOIs are completed.
Rental and Sampler program		Guests complete stays at the resorts. Rental and Sampler program proceeds are classified as a reduction to “Cost of other resort and communities operations”.
Realty commissions		Sales of third-party-owned real estate are completed.
Golf course and ski hill daily fees		Services are provided.

Our cost of other resort and communities operations consists of the costs associated with the various revenues described above as well as developer subsidies and maintenance fees on our unsold VOIs.

Notes Receivable

Our notes receivable are carried at amortized cost less an allowance for bad debts. Interest income is suspended and previously accrued but unpaid interest income is reversed on all delinquent notes receivable when principal or interest payments are more than three months contractually past due and not resumed until such loans are less than three months past due. As of December 31, 2008 and 2009, $5.8 million and $15.5 million, respectively, of our notes receivable were more than three months contractually past due and, hence, were not accruing interest income. Our notes receivable are generally charged off as uncollectible when they have become approximately 120 days past due.

We estimate uncollectibles for VOI notes receivable in accordance with timeshare accounting rules. Under these rules, the estimate of uncollectibles is based on historical uncollectibles for similar VOI notes receivable over the applicable historical period. We use a static pool analysis, which tracks uncollectibles for each year’s sales over the entire life of the notes. We also consider whether the historical economic conditions are comparable to current economic conditions, as well as variations in underwriting standards. Additionally, under timeshare accounting rules, no consideration is given for future recoveries of defaulted inventory in the estimate of uncollectible VOI notes receivable. We review our reserve for loan losses on at least a quarterly basis. We estimate credit losses on our notes receivable portfolios generated in connection with the sale of homesites in accordance with the accounting rules for contingencies, as our notes receivable portfolios consist of large groups of smaller-balance, homogeneous loans. Under these accounting rules, the amount of loss is reduced by the estimated value of the defaulted inventory to be recovered.

Retained Interest in Notes Receivable Sold

When we sell our notes receivable either pursuant to our vacation ownership receivables purchase facilities (more fully described in Note 3) or through term securitizations, we evaluate whether or not such transfers should be accounted for as a sale pursuant to the accounting rules under ASC 860 for the transfers and servicing of financial assets and extinguishments of liabilities. The evaluation of sale treatment under ASC 860 involves legal assessments of the transactions, which include determining whether the transferred assets have been isolated from us (i.e., put presumptively beyond our reach and the reach of our creditors, even in bankruptcy or other receivership), determining whether each transferee has the right to pledge or exchange the assets it received, and ensuring that we do not maintain effective control over the transferred assets through an agreement that either: (1) entitles and obligates us to repurchase or redeem the assets before their maturity; or (2) provides us with the ability to unilaterally cause the holder to return the assets (other than through a cleanup call).

In connection with such transactions, we retain subordinated tranches and rights to excess interest spread which are retained interests in the notes receivable sold. We also continue to service the notes for a fee. Historically, we have structured the majority of such transactions to be accounted for as “off-balance sheet” sales. Gain or loss on the sale of the receivables depends in part on the allocation of the previous carrying amount of the financial assets involved in the transfer between the assets sold and the retained interests based on their relative fair value at the date of transfer.

We consider our retained interests in notes receivable sold as available-for-sale investments and, accordingly, carry them at fair value. Unrealized gains or losses on our retained interests in notes receivable sold are included in our

shareholders’ equity as accumulated other comprehensive income, net of income taxes. The portion of other-than-temporary declines in fair value that represent credit losses are charged to operations.

We measure the fair value of the retained interests in the notes receivable sold initially and on a quarterly basis based on the present value of estimated future expected cash flows using our best estimates of the key assumptions — prepayment rates, loss severity rates, default rates and discount rates commensurate with the risks involved. Interest on the retained interests in notes receivable sold is accreted using the effective yield method.

Inventory

Our inventory consists of completed VOIs, VOIs under construction, land held for future vacation ownership development and residential land acquired or developed for sale. We carry our completed inventory at the lower of i) cost, including costs of improvements and amenities incurred subsequent to acquisition, capitalized interest, real estate taxes plus other costs incurred during construction, or ii) estimated fair value, less cost to dispose. VOI inventory and cost of sales is accounted for under the provisions of timeshare accounting rules, which defines a specific method of the relative sales value method for relieving VOI inventory and recording cost of sales. Under the relative sales value method required by timeshare accounting rules, cost of sales is calculated as a percentage of net sales using a cost-of-sales percentage—the ratio of total estimated development cost to total estimated VOI revenue, including the estimated incremental revenue from the resale of VOI inventory repossessed, generally as a result of the default of the related receivable. Also, pursuant to timeshare accounting rules, we do not relieve inventory for VOI cost of sales related to anticipated credit losses (accordingly, no adjustment is made when inventory is reacquired upon default of the related receivable). For Communities real estate projects, costs are allocated to individual homesites in the Communities projects based on the relative estimated sales value of each homesite in accordance with ASC 970, which defines the accounting for costs of real estate projects. Under this method, the allocated cost of a unit is relieved from inventory and recognized as cost of sales upon recognition of the related sale. Homesites reacquired upon default of the related receivable are considered held for sale and are recorded at fair value less costs to sell.

During 2008 and 2009, we recorded charges totaling $5.2 million and $13.2 million, respectively, to reduce our carrying value of certain completed inventory in our residential communities’ property (see Note 5 for further discussion). We also periodically evaluate the recovery of the carrying amount of our incomplete or undeveloped resort and residential communities’ properties under the guidelines of ASC 360, which provides guidance relating to the accounting for the impairment or disposal of long-lived assets.

Deferred Financing Costs

Deferred financing costs are comprised of costs incurred in connection with securing financing from third-party lenders and are capitalized and amortized to interest expense over the terms of the related financing arrangements. We recognized amortization of deferred financing costs for the years ended December 31, 2007, 2008, and 2009 of approximately $3.2 million, $1.8 million, and $3.9 million, respectively.

Property and Equipment

Our property and equipment acquired is recorded at cost. We record depreciation and amortization in a manner that recognizes the cost of our depreciable assets in operations over their estimated useful lives using the straight-line method. Leasehold improvements are amortized over the shorter of the terms of the underlying leases or the estimated useful lives of the improvements. Depreciation expense includes the amortization of assets recorded under capital leases.

Impairment of Long-Lived Assets

We evaluate the recovery of the carrying amounts of our long-lived assets under the guidelines of ASC 360. We review the carrying amounts of our long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If estimated cash flows are insufficient to recover the investment, an impairment loss is recognized equal to the estimated fair value of the asset less its carrying value and any costs of disposition.

Goodwill

Our goodwill related to various business acquisitions made by the Resort Division during and prior to 2008. We account for our goodwill under the provisions of ASC 350. This statement requires that goodwill deemed to have indefinite lives not be amortized, but rather be tested for impairment on an annual basis. In 2008, we recorded $4.2 million of goodwill related to business acquisitions for Bluegreen Resorts, increasing total goodwill to $8.5 million. During the year ended December 31, 2008, we completed the required annual impairment testing of the goodwill recorded in our Bluegreen Resorts reporting unit. As a result of our annual impairment testing of goodwill as of December 31, 2008, we determined that the fair value of our Bluegreen Resorts reporting unit, based on our overall market capitalization, could not support the book value of goodwill. Accordingly, we wrote-off the balance of our goodwill and recorded a charge of $8.5 million for the year ended December 31, 2008.

Treasury Stock

We account for repurchases of our common stock, if any, using the cost method with common stock in treasury classified in our consolidated balance sheets as a reduction of shareholders’ equity.

Income Taxes

Income tax expense is recognized at applicable U.S. or international tax rates. Certain revenue and expense items may be recognized in one period for financial statement purposes and in a different period’s income tax return. The tax effects of such differences are reported as deferred income taxes. Valuation allowances are recorded for periods in which realization of deferred tax assets does not meet a more likely than not standard. See Note 13 for additional information on income taxes.

Advertising Expense

We expense advertising costs, which include marketing costs, as incurred. Advertising expense for the years ended December 31, 2007, 2008, and 2009, was $130.5 million, $126.6 million and $39.0 million, respectively. Advertising expense is included in selling, general and administrative expenses in our consolidated statements of operations.

Stock-Based Compensation

We account for stock-based compensation using the fair value method of expense recognition. We utilize the Black-Scholes option pricing model for calculating the fair value of each option granted. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, this model requires the input of subjective assumptions, including the expected price volatility of the underlying stock. Projected data related to the expected volatility and expected life of stock options is based upon historical and other information. Changes in these subjective assumptions can materially affect the fair value of the estimate, and therefore, the existing valuation models do not provide a precise measure of the fair value of our employee stock options.

The fair value for these options was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

		During the year ended December 31,
		2007				2008				2009
Risk free investment rate			4.9	%			3.1	%			2.4	%
Dividend yield			0.0	%			0.0	%			0.0	%
Volatility factor of expected market price			45.8	%			49.4	%			84.2	%
Expected term		5.0 years				5.5 years				5.0 years

The Company uses historical data to estimate option exercise behavior and employee termination. The risk-free investment rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company uses the historical volatility of its common stock to estimate the volatility factor of expected market price.

We recognize stock-based compensation expense on a straight-line basis over the service or vesting period of the instrument. Total compensation costs related to stock-based compensation charged against income during the year ended December 31, 2009 was $4.4 million. Total stock-based compensation recorded in 2009 consists of $2.2

million related to stock options and $2.2 million related to restricted stock. Total stock-based compensation recorded in 2008 of $4.4 million consists of $2.5 million related to stock options and $1.9 million related to restricted stock. Total compensation costs related to stock-based compensation charged against income during the year ended December 31, 2007 was $2.4 million, which consists of $2.0 million related to the expense of existing and newly granted stock options and $0.4 million related to existing and newly granted restricted stock. At the grant date, the Company estimates the number of shares expected to vest and subsequently adjusts compensation costs for the estimated rate of forfeitures at the option grant date and on an annual basis. The Company uses historical data to estimate option exercise behavior and employee termination in determining the estimated forfeiture rate.

Earnings (Loss) Per Common Share

We compute basic earnings per common share by dividing net income by the weighted-average number of common shares outstanding. Diluted earnings per common share is computed in the same manner as basic earnings per common share, but also gives effect to all dilutive stock options and unvested restricted stock using the treasury stock method.

During the years ended December 31, 2007 and 2008, a total of 140,313 and 38,500, respectively, common shares were issued as a result of stock option exercises. No stock options were exercised in 2009. There were approximately 1.3 million, 2.7 million, and 2.7 million stock options not included in diluted earnings per common share during the years ended December 31, 2007, 2008, and 2009, respectively, as the effect would be anti-dilutive.

The following table sets forth our computation of basic and diluted earnings (loss) per common share (in thousands, except per share data):

		Year Ended December 31,
		2007				2008				2009
Basic and diluted earnings per common share — numerator:
Income from continuing operations		$	39,856			$	6,580			$	11,167
Net income attributable to non-controlling interests			7,721				7,095				7,472
Income (loss) from continuing operations attributable to Bluegreen Corporation		$	32,135			$	(515	)		$	3,695
Denominator:
Denominator for basic earnings per common share-weighted-average shares			30,975				31,241				31,088
Effect of dilutive securities:
Stock options and unvested restricted stock			317				—				12
Denominator for diluted earnings (loss) per common share-adjusted weighted-average shares and assumed conversions			31,292				31,241				31,100
Income (loss) from continuing operations attributable to Bluegreen Corporation per common share — Basic:		$	1.04			$	(0.02	)		$	0.12
Income (loss) from continuing operations attributable to Bluegreen Corporation per common share — Diluted:		$	1.03			$	(0.02	)		$	0.12

Comprehensive Income (Loss)

Comprehensive income (loss) represents the change in shareholders’ equity from transactions and other events and circumstances arising from non-shareholder sources. Our comprehensive income (loss) includes net income (loss) and the change in net unrealized gains or losses on our retained interests in notes receivable sold, which are held as available-for-sale investments. Comprehensive income (loss) is shown as a subtotal within our consolidated statements of shareholders’ equity for each period presented.

Business Combinations

During 2008, we purchased real estate and operations at two resorts, The Royal Suites at Atlantic Palace in Atlantic City, New Jersey, and Club La Pension in New Orleans, Louisiana. Each of these acquisitions constituted the purchase of a business under ASC 805, which contains the accounting rules for business combinations. The combined purchase price of these acquisitions was $21.8 million, which was allocated as follows: VOI inventory of $9.9 million, property and equipment of $7.7 million, and goodwill of $4.2 million. These acquisitions, individually and in the aggregate, were immaterial to our operations. The goodwill generated from these acquisitions was subsequently charged to operations as impairment in 2008.

Recently Adopted Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements-an Amendment of Accounting Research Bulletin (“ARB”) No. 51 (“SFAS No. 160”). This statement, which we adopted on January 1, 2009, establishes new accounting and reporting standards for noncontrolling interests, previously known as minority interests, in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement requires the recognition of noncontrolling interests as equity in the consolidated financial statements separate from the parent’s equity. The amount of net income or loss attributable to the noncontrolling interests is included in consolidated net income on the face of the income statement. This statement clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or loss in net income attributable to Bluegreen Corporation when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. This topic also includes expanded disclosure requirements regarding the interests of the parent and its noncontrolling interests. This topic is applied prospectively for fiscal years and interim periods within those fiscal years, beginning with the current fiscal year, except for the presentation and disclosure requirements, which are applied retrospectively for all periods presented. The adoption of this topic did not have a material impact on our financial statements.

In April 2009, we adopted FASB Staff Position FAS 107-1 and Accounting Principles Board (“APB”) 28-1, Interim Disclosures about Fair Value of Financial Instruments (“FAS 107-1”). The related guidance under the new Accounting Standards Codification for this recently adopted accounting pronouncement is ASC 825. ASC 825 requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. It also required those disclosures in summarized information in interim reporting periods.

In April 2009, we adopted FASB Staff Position FAS 115-2, FAS 124-2, and Emerging Issue Task Force (“EITF”) 99-20-2, Recognition and Presentation of Other-Than-Temporary Impairments (“FAS 115-2”). The related guidance under the new Accounting Standards Codification for this recently adopted accounting pronouncement is ASC 325. ASC 325 amends the other-than-temporary impairment guidance in U.S. GAAP for certain securities, including retained interest in securities classified as available-for-sale investments, and also expands the required disclosure of other-than-temporary impairments on such securities in the financial statements and notes thereto. It does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. The impact of this new standard is disclosed in Note 4 below.

In April 2009, we adopted FASB Staff Position FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability has Significantly Decreased and Identifying Transactions that are Not Orderly (“FAS 157-4”). The related guidance under the new Accounting Standards Codification for this recently adopted accounting pronouncement is ASC 320. ASC 320 provides additional guidance for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the asset or liability have significantly decreased. It also provides guidance on identifying circumstances that indicate a transaction is not orderly. It emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. The adoption of this pronouncement did not have a material impact on our financial statements.

During the second quarter of 2009, we adopted SFAS No. 165, Subsequent Events (“SFAS No. 165”). The relative guidance under the new Accounting Standards Codification for this recently adopted accounting pronouncement is ASC 855, as amended by ASU 2010-09. ASC 855 provides general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued.

The statement sets forth the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements. This statement also identifies the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The adoption of this pronouncement did not affect our results of operations or financial condition, but did require additional disclosure in our financial statements.

Accounting Pronouncements Not Yet Adopted

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140 (which has subsequently been renamed ASC 860), which became effective for us on January 1, 2010. FASB ASC 860 requires the disclosure of more information about transfers of financial assets, including securitization transactions and transactions where companies have continuing exposure to the risks related to the transferred financial assets. It also eliminates the concept of a qualifying special-purpose entity (“QSPE”), changes the requirements for derecognizing financial assets, and requires additional disclosures. See discussion of SFAS No. 167, below, for the anticipated impact on Bluegreen of the adoption of SFAS No. 166.

In June 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (which has subsequently been renamed ASC 810), which became effective for us on January 1, 2010. ASC 810 addresses the effects of eliminating the qualified special purpose entity (“QSPE”) concept and responds to concerns about the application of certain key provisions of previous accounting rules, including concerns over the transparency of an enterprise’s involvement with variable interest entities (“VIEs”). As a result of the adoption of this pronouncement on January 1, 2010, we expect that we will in the future be required to consolidate our QSPEs described in Note 4 to our consolidated financial statements. Accordingly, we expect to record a one-time non-cash after-tax adjustment to shareholders’ equity in the first quarter of 2010 of approximately $35.0 million to $55.0 million as a cumulative effect of a change in accounting principle. The cumulative effect will consist primarily of the reversal of previously recognized sales of notes receivable, the recognition of the related non-recourse receivable-backed notes payable, the elimination of retained interest in notes receivable sold, and adjustments to inventory and deferred income taxes payable as a result of these changes. We anticipate that our adoption of these standards will have the following impacts on our balance sheet: (1) assets will increase by approximately $335.0 million to $345.0 million; (2) liabilities will increase by approximately $380.0 million to $390.0 million; and (3) shareholders’ equity will decrease by approximately $35.0 million to $55.0 million.

2. Notes Receivable

The table below sets forth additional information relative to our notes receivable (in thousands).

		As of December 31,
		2008				2009
Notes receivable secured by VOIs		$	388,014			$	351,232
Notes receivable secured by homesites			4,659				4,901
Notes receivable, gross			392,673				356,133
Allowance for loan losses			(52,029	)			(46,826	)
Notes receivable, net		$	340,644			$	309,307

The weighted-average interest rate on our notes receivable was 13.8%, 14.4%, and 14.8% at December 31, 2007, 2008, and 2009, respectively. All of our VOI loans bear interest at fixed rates. The weighted-average interest rate charged on loans secured by VOIs was 13.9%, 14.4%, and 14.9% at December 31, 2007, 2008, and 2009, respectively. Approximately 84% of our notes receivable secured by homesites bear interest at variable rates, while the balance bears interest at fixed rates. The weighted-average interest rate charged on loans secured by homesites was 12.1%, 10.1%, and 8.8% at December 31, 2007, 2008, and 2009, respectively.

Our VOI loans are generally secured by property located in Florida, Louisiana, Nevada, New Jersey, Michigan, Missouri, Nevada, Pennsylvania, South Carolina, Tennessee, Virginia, Wisconsin, and Aruba. The majority of Bluegreen Communities notes receivable are secured by homesites in Georgia, Texas, and Virginia.

The table below sets forth the activity in our allowance for uncollectible notes receivable for 2008 and 2009 (in thousands):

     

		Year Ended
		December 31,
		2008				2009
Balance, beginning of year		$	17,458			$	52,029
Provision for loan losses			76,079				31,641
Less: Allowance on sold receivables			(10,964	)			—
Less: Write-offs of uncollectible receivables			(30,544	)			(36,844	)
Balance, end of year		$	52,029			$	46,826

Installments due on our notes receivable during each of the five years subsequent to December 31, 2008 and 2009, and thereafter are set forth below (in thousands):

		2008				2009
Due in 1 year		$	58,989			$	44,969
Due in 2 years			23,988				26,793
Due in 3 years			27,537				30,447
Due in 4 years			31,473				34,416
Due in 5 years			35,712				38,374
Thereafter			214,974				181,134
Total		$	392,673			$	356,133

The following table summarizes our allowance for loan losses by division as of December 31, 2008 and 2009 (dollars in thousands):

		Bluegreen				Bluegreen
		Resorts				Communities				Total
December 31, 2008:
Notes receivable		$	388,014			$	4,659			$	392,673
Allowance for loan losses			(51,785	)			(244	)			(52,029	)
Notes receivable, net		$	336,229			$	4,415			$	340,644
Allowance as a % of gross notes receivable			13	%			5	%			13	%
December 31, 2009:
Notes receivable		$	351,232			$	4,901			$	356,133
Allowance for loan losses			(46,302	)			(524	)			(46,826	)
Notes receivable, net		$	304,930			$	4,377			$	309,307
Allowance as a % of gross notes receivable			13	%			11	%			13	%

3. Sales of Notes Receivable

Sales of VOI notes receivable through qualified special purpose finance entities during the years ended December 31, 2007 and 2008, were as follows (in millions):

Year Ended December 31, 2007

		Aggregate
		Principal												Initial Fair
		Balance of												Value of
		Notes				Purchase				Gain				Retained
Facility		Receivable				Price				Recognized				Interest
2006-A GE Purchase Facility		$	66.9			$	60.2			$	10.6			$	8.3
2007 Term Securitization			200.0				168.9				28.8				36.3
Total		$	266.9			$	229.1			$	39.4			$	44.6

Year Ended December 31, 2008

Aggregate

Principal

Initial Fair

Balance of

Value of

Notes

Purchase

Gain

Retained

Facility

Receivable

Price

Recognized

Interest

2008 Term Securitization

$

68.6

$

60.0

$

8.2

$

11.7

In connection with these transactions, we retained subordinated tranches and rights to excess interest spread and account for these assets and interest as retained interests. The following assumptions were used to measure the initial fair value of our retained interest in notes receivable sold for each of the periods listed above:

		For the year ended
		December 31,
		2007				2008
Prepayment rates			29% - 11	%			31% - 17	%
Loss severity rates			38% - 72	%			38	%
Default rates			12% - 1	%			7.2% - 1.0	%
Discount rates			9% - 12.6	%			13.4	%

The assumptions take into account our intended actions relating to our right to either acquire or substitute for defaulted loans, pursuant to the terms of each transaction.

We did not sell any of our notes receivable in 2009.

See Note 4 “Retained Interest in Notes Receivable Sold” below for further discussion of our retained interest.

4. Retained Interests in Notes Receivable Sold

Our retained interests in notes receivable sold, which are classified as available-for-sale investments, and their associated unrealized gain (loss) are set forth below (in thousands):

						Gross
		Amortized				Unrealized
As of December 31, 2008:		Cost				Gain (Loss)				Fair Value
2002 Term Securitization		$	7,505			$	—			$	7,505
2004 Term Securitization			8,508				1,037				9,545
2004 GE Purchase Facility			3,380				78				3,458
2005 Term Securitization			16,267				—				16,267
2006 GE Purchase Facility			16,177				(1,687	)			14,490
2006 Term Securitization			13,730				670				14,400
2007 Term Securitization			31,145				5,029				36,174
2008 Term Securitization			11,437				301				11,738
Total		$	108,149			$	5,428			$	113,577

						Gross
		Amortized				Unrealized
As of December 31, 2009:		Cost				Gain (Loss)				Fair Value
2004 Term Securitization		$	7,731			$	391			$	8,122
2004 GE Purchase Facility (1)			3,864				(598	)			3,266
2005 Term Securitization			11,852				834				12,686
2006 GE Purchase Facility (2)			15,408				(2,328	)			13,080
2006 Term Securitization			10,107				573				10,680
2007 Term Securitization (1)			20,220				(211	)			20,009
2008 Term Securitization			10,098				372				10,470
Total		$	79,280			$	(967	)		$	78,313

The following assumptions (which are classified as Level 3 inputs under ASC 820) were used to measure the fair value of the above retained interests as of December 31, 2008 and 2009:

		As of December 31,
		2008				2009
Prepayment rates			23% - 4	%			20% - 3	%
Loss severity rates			3% - 38	%			18% - 38	%
Default rates			12% - 0	%			7% - 0	%
Discount rates			19.5	%			24.5	%

These assumptions take into account our intended actions, which can change from time to time, relating to our right to either repurchase or substitute for defaulted loans, pursuant to the terms of each transaction.

The net unrealized gain (loss) on our retained interests in notes receivable sold, which is presented as a separate component of our shareholders’ equity net of income taxes, was a gain of approximately $3.2 million and a loss of approximately $0.6 million as of December 31, 2008 and 2009, respectively. Our maximum exposure to loss as a result of our involvement with our qualified special purpose finance subsidiaries described below is the value of our retained interest.

During the years ended December 31, 2007, 2008, and 2009, we recorded charges for other-than-temporary decreases in the fair value of certain of our retained interest in notes receivable sold totaling approximately $2.4

million, $5.0 million, and $1.1 million, respectively. The decrease in the fair value of our retained interest in notes receivable sold, primarily resulted from an increase in the discount rates applied to estimated future cash flows on our retained interests to reflect current interest rates in the securitization market and unfavorable changes in the amount and timing of estimated future cash flows. These charges have been netted against interest income on our consolidated statements of operations.

In May 2009, we, in our capacity as servicer of the 2002 Term Securitization, exercised our servicer option, which caused the full redemption of all classes of notes issued under the 2002 Term Securitization. As a result of this exercise and the ultimate redemption, we exchanged cash of approximately $4.2 million and the retained interest in the 2002 Term Securitization for notes receivable and VOI inventory with an estimated fair value totaling approximately $17.9 million.

On April 1, 2009, we adopted the provisions of FASB ASC 325-40 (previously FAS 115-2), which amended existing requirements for measuring and disclosing other-than-temporary impairment of debt securities and retained interests in securities classified as available-for-sale investments. Among other changes, if a holder has the positive intent and ability to hold a security to maturity, the other-than-temporary impairment recognized in earnings should be equal to the amount representing credit loss, with any remaining loss being unrealized and included as a component of equity. Since we have the positive intent and ability to hold all of our retained interests in notes receivable sold through maturity, upon the adoption of FASB ASC 325-40, we recorded additional unrealized losses of $6.8 million in accumulated other comprehensive income related to other-than-temporary impairments previously recognized in earnings through a cumulative-effect adjustment to our retained earnings.

We measure credit loss based upon the performance indicators of the underlying assets of the retained interest in notes receivable sold. As of December 31, 2009, the aggregate amount of unrealized losses in accumulated other comprehensive loss was $3.1 million.

The following table is a rollforward for the year ended December 31, 2009 of the amount of other comprehensive loss on our retained interest in notes receivable sold related to credit losses for which a portion of such losses was recognized in earnings (in thousands):

Balance at April 1, 2009 of the amount related to credit losses for which a portion of an other-than-temporary impairment was recognized in other comprehensive income		$	—
Additions for the amount related to the credit losses for which an other-than-temporary impairment was not previously recognized			1,777
Reductions for other-than-temporary impairment realized in earnings, net of tax			(311	)
Balance at December 31, 2009 of the amount related to credit losses for which a portion of an other-than-temporary impairment was recognized in other comprehensive income		$	1,466

The contractual maturities of our retained interest in notes receivable sold as of December 31, 2009, based on the final maturity dates of the underlying notes receivable, are as follows:

		Amortized
		Cost				Fair Value
After one year but within five		$	7,731			$	8,122
After five years but within ten			71,549				70,191
Total		$	79,280			$	78,313

The following table shows the hypothetical fair value of our retained interests in notes receivable sold based on a 10% and a 20% adverse change in each of the assumptions used to measure the fair value of those retained interests (dollars in thousands):

Hypothetical Fair Value at December 31, 2009
		Prepayment Rate								Loss Severity Rate								Default Rate								Discount Rate
Adverse Change Percentage		10%				20%				10%				20%				10%				20%				10%				20%
2004 Term Securitization		$	8,086			$	8,050			$	8,074			$	8,025			$	8,098			$	8,073			$	7,851			$	7,596
2004 GE Purchase Facility			3,249				3,233				3,259				3,252				3,258				3,250				3,130				3,005
2005 Term Securitization			12,661				12,637				12,347				12,009				12,107				11,535				12,080				11,522
2006 GE Purchase Facility			13,041				13,002				12,862				12,644				12,794				12,512				12,499				11,968
2006 Term Securitization			10,642				10,605				10,404				10,129				10,192				9,712				10,167				9,700
2007 Term Securitization			20,008				20,008				19,498				18,987				19,103				18,211				19,026				18,132
2008 Term Securitization			10,465				10,461				10,302				10,135				10,250				10,034				10,137				9,833

The table below summarizes certain cash flows received from and (paid to) our qualifying special purpose finance subsidiaries (in thousands):

		For the Year Ended December 31,
		2007				2008				2009
Proceeds from sales of notes receivables		$	229,067			$	55,705			$	—
Collections on previously sold notes receivables			(173,448	)			(175,551	)			(136,685	)
Servicing fees received			8,697				9,436				7,612
Purchases of defaulted receivables			(3,420	)			(3,547	)			(920	)
Resales of foreclosed assets			(44,786	)			(50,314	)			(14,802	)
Remarketing fees received			25,858				29,581				8,187
Cash received on retained interests in notes receivable sold			35,949				44,884				43,741
Cash paid to fund required reserve accounts			(10,044	)			(8,288	)			(1,148	)
Purchases of upgraded accounts			(28,251	)			(47,045	)			(516	)

In addition to the cash paid for the purchase of defaulted receivables included in the above table, we also acquire defaulted receivables from our qualifying special purpose finance subsidiaries in exchange for unencumbered receivables (a process known as substitution). During the years ended December 31, 2008 and 2009, we acquired notes receivable totaling $32.2 million and $66.5 million, respectively, through substitutions. Although we are not obligated to repurchase or substitute for defaulted notes receivable from our qualifying special purpose finance subsidiaries, we may do so from time to time. The VOIs securing the defaulted receivables received by us in this manner are typically recovered and put back in VOI inventory and resold in the normal course of business.

Quantitative information about the portfolios of VOI notes receivable previously sold without recourse in which we hold the above retained interests is as follows (in thousands):

		As of December 31, 2009
		Total				Principal
		Outstanding				Amount
		Principal				of Sold Loans				Balance Owed
		Amount of				60 or More				to Note
		Sold Loans				Days Past Due				Holders
2004 Term Securitization		$	28,552			$	869			$	26,765
2004 GE Purchase Facility			13,870				400				12,072
2005 Term Securitization			81,261				2,389				74,822
2006 GE Purchase Facility			69,003				2,353				61,433
2006 Term Securitization			71,450				2,502				66,206
2007 Term Securitization			137,645				4,251				123,935
2008 Term Securitization			51,810				1,530				46,136
Total		$	453,591							$	411,369

5. Inventory

Our inventory holdings, summarized by division, are set forth below (in thousands):

		As of December 31,
		2008				2009
Bluegreen Resorts		$	342,779			$	370,470
Bluegreen Communities			160,490				145,447
		$	503,269			$	515,917

Bluegreen Resorts inventory as of December 31, 2008 consisted of $42.3 million of real estate for future development, $87.9 million of construction-in-progress and $212.6 million of completed VOI units. Bluegreen Resorts inventory as of December 31, 2009 consisted of $91.9 million of real estate for future development, $8.2 million of construction-in-progress and $270.4 million of completed VOI units.

As a result of our decreased sales volume and its impact of extending the anticipated sell-out period of certain of our projects, we recorded a charge to cost of real estate sales of approximately $5.2 million and $13.2 million during the years ended December 31, 2008 and 2009, respectively, to write-down the inventory balances of certain of our completed Communities properties to their estimated fair value. We calculated the estimated fair value of these impaired properties based on our analysis of their estimated future cash flows (Level 3 input), discounted at rates commensurate with the risk inherent in the property.

Interest capitalized to inventory during the years ended December 31, 2007, 2008, and 2009 totaled $15.5 million, $12.8 million and $1.6 million, respectively. The interest expense reflected in our consolidated statements of operations is net of capitalized interest.

6. Property and Equipment

     Our property and equipment consisted of (dollars in thousands):

						As of December 31,
		Useful Life				2008				2009
Office equipment, furniture and fixtures		3-14 years				$	62,572			$	60,657
Golf course land, land improvements, buildings and equipment		5-39 years					33,346				7,591
Land, buildings and building improvements		3-31 years					67,359				70,323
Leasehold improvements		2-14 years					12,650				11,952
Transportation and equipment		3-5 years					2,334				1,999
							178,261				152,522
Accumulated depreciation and amortization of leasehold improvements							(68,760	)			(66,957	)
Total						$	109,501			$	85,565

7. Receivable-Backed Notes Payable

     The table below sets forth the balances of our receivable-backed notes payable facilities (in thousands):

		As of
		December 31, 2008												December 31, 2009
										Balance of												Balance of
										Pledged/												Pledged/
		Debt				Interest				Secured				Debt				Interest				Secured
		Balance				Rate				Receivables				Balance				Rate				Receivables
BB&T Purchase Facility (nonrecourse)		$	139,057				2.19	%		$	167,538			$	131,302				5.75	%		$	166,562
Liberty Bank Facility			43,505				5.75	%			48,603				59,055				5.75	%			68,175
GE Bluegreen/Big Cedar Receivables Facility			33,725				2.19	%			39,681				32,834				1.98	%			35,935
The Wells Fargo Facility			24,096				4.00	%			26,117				14,409				4.00	%			15,926
GMAC Receivables Facility			7,698				4.44	%			8,737				5,228				4.23	%			6,331
Textron Facility			1,036				6.00	%			1,194				—				—				—
		$	249,117							$	291,870			$	242,828							$	292,929

BB&T Purchase Facility. On June 30, 2009, we amended and restated an existing timeshare notes receivable purchase facility with Branch Banking and Trust Company (“BB&T”) (the “BB&T Purchase Facility”), extending the revolving advance period under the facility to June 29, 2010. Should a “takeout financing” (as defined in the applicable facility agreements) occur prior to June 29, 2010, the facility limit will either remain at the current facility limit of $150.0 million or decrease to $100.0 million, under certain circumstances. The BB&T Purchase Facility provides for the sale of our timeshare receivables at an advance rate of 67.5% of the principal balance up to a cumulative purchase price of $150.0 million on a revolving basis, subject to the terms of the facility, eligible collateral and customary terms and conditions. While ownership of the receivables is transferred for legal purposes, the transfers of receivables under the facility are accounted for as a financing transaction for financial accounting purposes. Accordingly, the receivables will continue to be reflected as assets and the associated obligations will be reflected as liabilities on our balance sheet. The BB&T Purchase Facility is nonrecourse and was not guaranteed by us.

The existing outstanding balance as of June 30, 2009 initially remained at its then current advance rate of 82.4%; however, we will equally share with BB&T in the excess cash flows generated by the receivables sold (excess meaning after customary payments of fees, interest and principal under the facility) until the advance rate on the existing receivables reduces to 67.5% as the outstanding balance amortizes. As of December 31, 2009, the outstanding balance of the BB&T Purchase Facility reflected an advance of 80.7% on the receivables transferred to BB&T under the facility. The interest rate on the BB&T Purchase Facility is the prime rate plus 2.5%.

During 2009, we pledged $31.9 million of VOI notes receivable to this facility and received cash proceeds of $24.5 million. We also made repayments of $32.2 million on the facility during 2009.

Liberty Bank Facility. During August 2008, we entered into a $75.0 million revolving timeshare receivables hypothecation facility with a syndicate of lenders led by Liberty Bank and assembled by Wellington Financial. The facility provides for a 90% advance on eligible receivables pledged under the facility during a two-year period ending on August 27, 2010, subject to customary terms and conditions. Amounts borrowed under the facility and interest incurred will be repaid as cash is collected on the pledged receivables, with the remaining balance, if any, due on August 27, 2014. The facility bears interest at a rate equal to the one-month LIBOR plus 2.5%, subject to a floor of 5.75%. As the Liberty Bank facility is revolving, availability under the facility increases up to the $75.0 million facility limit as cash is received on the VOI notes receivable collateralized under the facility and Liberty Bank is repaid through the expiration of the advance period, pursuant to the terms of the facility.

During 2009, we pledged $33.5 million of VOI notes receivable to this facility and received cash proceeds of $30.9 million. We also made repayments of $15.3 million under the facility during 2009.

In 2010, we pledged $6.8 million of VOI notes receivable to Liberty and received cash proceeds of $6.1 million. Subsequent to this borrowing, and based on subsequent repayments, we had $13.8 million in availability under this facility.

The GE Bluegreen/Big Cedar Receivables Facility. In April 2007, the Bluegreen/Big Cedar Joint Venture entered into a $45.0 million revolving VOI receivables credit facility with GE (the “GE Bluegreen/Big Cedar Receivables Facility”). Bluegreen Corporation has guaranteed the full payment and performance of the Bluegreen/Big Cedar Joint Venture in connection with the GE Bluegreen/Big Cedar Receivables Facility. The advance period under this facility expired on April 16, 2009, and all outstanding borrowings mature no later than April 16, 2016. The facility has detailed requirements with respect to the eligibility of receivables for inclusion and other conditions to funding. The facility includes affirmative, negative and financial covenants and events of default. All principal and interest payments received on pledged receivables are applied to principal and interest due under the facility. Indebtedness under the facility bears interest adjusted monthly at a rate equal to the 30 day LIBOR rate plus 1.75%.

During 2009, we pledged $6.0 million of VOI notes receivable as collateral for this facility and received cash proceeds of $5.8 million. In addition, during the first quarter of 2009, we received approximately $4.7 million which represented an additional borrowing to up to the 97% borrowing base, without pledging any additional VOI receivables. During 2009, we repaid $11.4 million on this facility.

The Wells Fargo Facility. We have a credit facility with Wells Fargo Foothill, LLC (“Wells Fargo”). Historically, we have primarily used this facility for borrowings collateralized by the pledge of certain VOI receivables which typically have been our one-year term receivables. The borrowing period for advances on eligible receivables expired on December 31, 2009, and the maturity date of all borrowings is December 31, 2010. The advance rate ranges from 85% to 90% of certain VOI receivables. Borrowings under this facility are subject to eligible collateral and customary terms and conditions. The interest rate charged on outstanding receivable borrowings under the facility, as amended, is the prime lending rate plus 0.25% when the average monthly outstanding loan balance under certain sub-lines is greater than or equal to $15.0 million. If the average monthly outstanding loan balance under certain sub-lines is less than $15.0 million, the interest rate is the greater of 4.00% or the prime lending rate plus 0.50%. All principal and interest payments received on pledged receivables are applied to principal and interest due under the facility.

During 2009, we pledged $18.5 million of notes receivable to this facility and received cash proceeds of $16.6 million. We also made repayments of $27.4 million during 2009.

8. Lines-of-Credit and Notes Payable

We have outstanding borrowings with various financial institutions and other lenders, which have been used to finance the acquisition and development of our inventory and to fund operations. Financial data related to our borrowing facilities is set forth below (dollars in thousands):

		As of
		December 31, 2008										December 31, 2009
								Carrying										Carrying
								Amount of										Amount of
						Interest		Pledged								Interest		Pledged
		Balance				Rate		Assets				Balance				Rate		Assets
The GMAC AD&C Facility		$	99,776			4.94%		$	149,814			$	87,415			4.73%		$	145,031
The GMAC Communities Facility			59,372			4.25%			126,293				38,479			10.00%			117,872
Wachovia Notes Payable			30,347			2.44 — 2.79%			46,542				24,497			2.23 — 2.58%			44,686
Wachovia Line-of-Credit			9,949			2.19%			—				15,700			1.98%			—
Textron AD&C Facility			15,456			4.50 — 4.75%			24,887				12,757			4.50 — 4.75%			27,582
Fifth Third Bank Note Payable			3,400			3.44%			4,841				3,381			3.23%			4,841
Other			4,439			5.86 — 11.03%			5,249				3,552			4.25 — 12.50%			3,851
Total		$	222,739					$	357,626			$	185,781					$	343,863