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Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
     
þ   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarter Ended March 31, 2011
OR
     
o   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number
001-09071
BFC Financial Corporation
(Exact name of registrant as specified in its charter)
     
Florida   59-2022148
     
(State or other jurisdiction of
incorporation or organization)
  (IRS Employer Identification Number)
     
2100 West Cypress Creek Road    
Fort Lauderdale, Florida   33309
     
(Address of Principal executive office)   (Zip Code)
(954) 940-4900
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
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 þ      NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES o      NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o   Accelerated filer o   Non-accelerated filer o   Smaller reporting company þ
        (Do not check if a smaller reporting company)    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o      NO þ
The number of shares outstanding of each of the registrant’s classes of common stock as of May 10, 2011 is as follows:
Class A Common Stock of $.01 par value, 68,521,497 shares outstanding as of May 10, 2011.
Class B Common Stock of $.01 par value, 6,859,751 shares outstanding as of May 10, 2011.
 
 

 


 

BFC Financial Corporation
TABLE OF CONTENTS
         
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 EX-31.1
 EX-31.2
 EX-31.3
 EX-32.1
 EX-32.2
 EX-32.3

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PART I — FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
BFC Financial Corporation
Consolidated Statements of Financial Condition — Unaudited
(In thousands, except share data)
                 
    March 31,     December 31,  
    2011     2010  
ASSETS
               
Cash and cash equivalents
  $ 164,845       178,868  
Interest bearing deposits in other banks
    656,424       455,538  
Restricted cash (including held by variable interest entities (“VIE”) of $38,735 in 2011 and $41,243 in 2010)
    60,954       62,249  
Securities available for sale at fair value
    414,499       465,020  
Investment securities at cost or amortized cost (fair value: $1,833 in 2011 and $2,033 in 2010)
    1,833       2,033  
Tax certificates, net of allowance of $9,287 in 2011 and $8,811 in 2010
    77,837       89,789  
Federal Home Loan Bank (“FHLB”) stock, at cost which approximates fair value
    43,557       43,557  
Loans held for sale
    49,455       29,765  
Loans receivable, net of allowance for loan losses of $155,051 in 2011 and $162,139 in 2010
    2,813,530       3,009,721  
Notes receivable (including gross securitized notes of $505,459 in 2011 and $533,479 in 2010) net of allowance of $86,370 in 2011 and $93,398 in 2010
    556,452       574,969  
Accrued interest receivable
    20,601       22,010  
Real estate inventory
    337,188       343,497  
Real estate owned and other repossessed assets
    75,146       74,488  
Investments in unconsolidated affiliates
    12,869       12,455  
Properties and equipment, net
    213,788       218,665  
Goodwill and intangible assets, net
    89,834       91,159  
Assets held for sale
    36,909       37,334  
Prepaid Federal Deposit Insurance Corporation (“FDIC”) deposit insurance assessment
    18,823       22,008  
Other assets
    80,908       79,941  
 
           
Total assets
  $ 5,725,452       5,813,066  
 
           
 
               
LIABILITIES AND EQUITY
               
Liabilities:
               
Interest bearing deposits
  $ 2,735,701       2,758,032  
Non-interest bearing deposits
    878,873       792,012  
Deposits held for sale
    390,432       341,146  
 
           
Total deposits
    4,005,006       3,891,190  
Advances from FHLB
    45,000       170,000  
Securities sold under agreements to repurchase
    17,006       21,524  
Other short term borrowings
    1,367       1,240  
Receivable-backed notes payable, (including $430,329 held by VIE in 2011 and $459,030 in 2010)
    536,407       569,214  
Notes and mortgage notes payable and other borrowings
    228,867       239,571  
Junior subordinated debentures
    465,453       461,568  
Deferred income taxes
    30,457       28,663  
Deferred gain on settlement of investment in subsidiary
          11,305  
Other liabilities
    179,610       186,634  
 
           
Total liabilities
    5,509,173       5,580,909  
 
           
 
               
Commitments and contingencies
               
 
               
Preferred stock of $.01 par value; authorized - 10,000,000 shares:
               
Redeemable 5% Cumulative Preferred Stock — $.01 par value; authorized 15,000 shares issued and outstanding 15,000 shares with redemption value of $1,000 per share
    11,029       11,029  
 
           
 
               
Equity:
               
Class A common stock of $.01 par value, authorized 150,000,000 shares; issued and outstanding 68,521,497 in 2011 and 2010
    685       685  
Class B common stock of $.01 par value, authorized 20,000,000 shares; issued and outstanding 6,859,751 in 2011 and 2010
    69       69  
Additional paid-in capital
    231,522       230,748  
Accumulated deficit
    (91,652 )     (88,853 )
Accumulated other comprehensive (loss) income
    (228 )     223  
 
           
Total BFC Financial Corporation (“BFC”) shareholders’ equity
    140,396       142,872  
Noncontrolling interests
    64,854       78,256  
 
           
Total equity
    205,250       221,128  
 
           
Total liabilities and equity
  $ 5,725,452       5,813,066  
 
           
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statements of Operations — Unaudited
(In thousands, except per share data)
                 
    For the Three Months Ended  
    March 31,  
    2011     2010  
            (As Revised)  
Revenues
               
Real Estate and Other:
               
Sales of real estate
  $ 41,623       27,852  
Other resorts and communities operations revenue
    17,634       16,021  
Other revenues
    11,035       11,187  
Interest income
    22,433       24,214  
 
           
 
    92,725       79,274  
 
           
Financial Services:
               
Interest income
    40,064       48,087  
Service charges on deposits
    12,032       15,048  
Other service charges and fees
    7,191       7,378  
Securities activities, net
    (24 )     3,138  
Other non-interest income
    3,527       2,526  
 
           
 
    62,790       76,177  
 
           
Total revenues
    155,515       155,451  
 
           
 
               
Costs and Expenses
               
Real Estate and Other:
               
Cost of sales of real estate
    9,675       8,103  
Cost of sales of other resorts and communities operations
    13,967       12,690  
Interest expense, net of interest capitalized
    18,625       21,258  
Selling, general and administrative expenses
    51,798       54,104  
 
           
 
    94,065       96,155  
 
           
Financial Services:
               
Interest expense
    8,527       11,844  
Provision for loan losses
    27,812       30,755  
Employee compensation and benefits
    19,290       25,378  
Occupancy and equipment
    12,585       13,582  
Advertising and promotion
    1,695       1,944  
Check losses
    299       432  
Professional fees
    3,359       2,887  
Supplies and postage
    902       998  
Telecommunication
    575       534  
Provision for tax certificates
    779       733  
Lease termination costs
    (849 )      
Employee termination costs
    (154 )      
Impairment of loans held for sale
    628        
Impairment of real estate owned
    2,323       143  
FDIC deposit insurance assessment
    3,305       2,358  
Other expenses
    4,563       5,021  
 
           
 
    85,639       96,609  
 
           
Total costs and expenses
    179,704       192,764  
 
           
 
               
Gain on settlement of investment in subsidiary
    11,305        
Equity in earnings from unconsolidated affiliates
    1,777       193  
Other income
    574       438  
 
           
Loss from continuing operations before income taxes
    (10,533 )     (36,682 )
Less: Provision (benefit) for income taxes
    1,793       (3,831 )
 
           
Loss from continuing operations
    (12,326 )     (32,851 )
Loss from discontinued operations
          (249 )
 
           
Net loss
    (12,326 )     (33,100 )
Less: Net loss attributable to noncontrolling interests
    (9,715 )     (13,320 )
 
           
Net loss attributable to BFC
    (2,611 )     (19,780 )
Preferred stock dividends
    (188 )     (188 )
 
           
Net loss allocable to common stock
  $ (2,799 )     (19,968 )
 
           
(CONTINUED)
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statements of Operations — Unaudited
(In thousands, except per share data)
                 
    For the Three Months Ended  
    March 31,  
    2011     2010  
            (As Revised)  
Basic and Diluted (Loss) Earnings Per Common Share Attributable to BFC (Note 18):
               
Basic Loss Per Common Share
               
Loss per share from continuing operations
  $ (0.04 )     (0.26 )
Loss per share from discontinued operations
           
 
           
Net loss per common share
  $ (0.04 )     (0.26 )
 
           
 
               
Diluted Loss Per Common Share
               
Loss per share from continuing operations
  $ (0.04 )     (0.26 )
Loss per share from discontinued operations
           
 
           
Net loss per common share
  $ (0.04 )     (0.26 )
 
           
 
               
Basic weighted average number of common shares outstanding
    75,381       75,376  
 
           
 
               
Diluted weighted average number of common and common equivalent shares outstanding
    75,381       75,376  
 
           
 
               
Amounts attributable to BFC common shareholders:
               
Loss from continuing operations
  $ (2,799 )     (19,719 )
Loss from discontinued operations
          (249 )
 
           
Net loss
  $ (2,799 )     (19,968 )
 
           
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statements of Comprehensive Loss — Unaudited
(In thousands)
                 
    For the Three Months Ended  
    March 31,  
    2011     2010  
            (As Revised)  
Net loss
  $ (12,326 )     (33,100 )
 
               
Other comprehensive income, net of tax:
               
Unrealized (losses) gains on securities available for sale, net of tax of $0 in 2011 and $969 in 2010
    (864 )     2,470  
Realized gains reclassified into net loss
          (3,139 )
 
           
Other comprehensive income
    (864 )     (669 )
 
           
 
               
Comprehensive loss
    (13,190 )     (33,769 )
Less: Comprehensive loss attributable to noncontrolling interests
    (10,128 )     (14,712 )
 
           
Total comprehensive loss attributable to BFC
  $ (3,062 )     (19,057 )
 
           
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statement of Changes in Equity — Unaudited
For the Three Months Ended March 31, 2011

(In thousands)
                                                                                 
                                                    Accumulated            
                                                    Other            
                                                    Compre-   Total   Non-    
    Shares of Common   Class A   Class B   Additional           hensive   BFC   controlling    
    Stock Outstanding   Common   Common   Paid-in   Accumulated   Income   Shareholders’   Interest in   Total
    Class A   Class B   Stock   Stock   Capital   Deficit   (Loss)   Equity   Subsidiaries   Equity
     
Balance, December 31, 2010
    68,521       6,860     $ 685     $ 69     $ 230,748     $ (88,853 )   $ 223     $ 142,872     $ 78,256     $ 221,128  
Net loss
                                  (2,611 )             (2,611 )     (9,715 )     (12,326 )
Other comprehensive loss
                                        (451 )     (451 )     (413 )     (864 )
Net effect of subsidiaries’ capital transactions attributable to BFC
                            609                   609             609  
Noncontrolling interest net effect of subsidiaries’ capital transactions
                                                    (3,274 )     (3,274 )
Cash dividends on 5% Preferred Stock
                                  (188 )           (188 )           (188 )
Share-based compensation related to stock options
                            165                   165             165  
     
Balance, March 31, 2011
    68,521       6,860     $ 685     $ 69     $ 231,522     $ (91,652 )   $ (228 )   $ 140,396     $ 64,854     $ 205,250  
     
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statements of Cash Flows — Unaudited
(In thousands)
                 
    For the Three Months Ended  
    March 31,  
    2011     2010  
            (As Revised)  
Net cash provided by operating activities
  $ 48,887       29,102  
 
           
Investing activities:
               
Proceeds from redemption and maturity of investment securities and tax certificates
    20,767       34,866  
Purchase of investment securities and tax certificates
    (9,415 )     (21,953 )
Purchase of securities available for sale
    (8,149 )     (13,351 )
Proceeds from sales of securities available for sale
    1,194       68,963  
Proceeds from maturities of securities available for sale
    56,282       32,138  
Proceeds from the maturities of interest bearing deposits
    2,480        
Decrease in restricted cash
    1,295       6,707  
Distributions from unconsolidated affiliates
    139       140  
Net repayments of loans
    135,346       118,217  
Proceeds from the sales of loans transferred to held for sale
    3,100       26,421  
Improvements to real estate owned
          (779 )
Proceeds from sales of real estate owned
    3,245       3,269  
Proceeds from the sale of office property and equipment
    106       539  
Purchases of office property and equipment
    (980 )     (2,612 )
 
           
Net cash provided by investing activities
    205,410       252,565  
 
           
Financing activities:
               
Net increase in deposits
    113,815       93,871  
Net repayments from FHLB advances
    (125,010 )     (130,000 )
Net (decrease) increase in securities sold under agreements to repurchase
    (4,518 )     206  
Increase (decrease) in short term borrowings
    127       (175 )
Prepayment of bonds payable
          (661 )
Repayment of notes, mortgage notes and bonds payable
    (53,472 )     (51,576 )
Proceeds from notes, mortgage notes and bonds payable
    9,238       8,205  
Payments for debt issuance costs
    (742 )      
Preferred stock dividends paid
    (188 )     (188 )
Proceeds from issuance of BankAtlantic Bancorp Class A common stock to non-BFC shareholders
          65  
Non-controlling interest distributions
    (3,871 )     (134 )
 
           
Net cash used in financing activities
    (64,621 )     (80,387 )
 
           
Increase in cash and cash equivalents
    189,676       201,280  
Cash and cash equivalents at beginning of period
    588,846       316,080  
Cash and cash equivalents held for sale
    (333 )      
 
           
Cash and cash equivalents at end of period
  $ 778,189 (a)     517,360  
 
           
(CONTINUED)

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BFC Financial Corporation
Consolidated Statements of Cash Flows — Unaudited
(In thousands)
                 
    For the Three Months Ended
    March 31,
    2011   2010
            (As Revised)
Supplemental cash flow information:
               
Interest paid on borrowings and deposits
  $ 19,584       21,215  
Income taxes paid
    3,277       128  
Supplementary disclosure of non-cash investing and financing activities:
               
Loans and tax certificates transferred to real estate owned
    6,679       7,503  
Long-lived assets held-for-use transferred to assets held for sale
          1,919  
Long-lived assets held-for-sale transferred to assets held for use
          1,239  
Decrease in BFC accumulated other comprehensive income, net of taxes
    (451 )     723  
Net increase in BFC shareholders’ equity from the effect of subsidiaries’ capital transactions, net of taxes
    609       814  
Net decrease in equity resulting from cumulative effect of change in accounting principle
          (2,569 )
 
(a)   Includes interest bearing time deposits in other banks totaling $43.1 million as of March 31, 2011. These time deposits had original maturities of greater than 90 days and are not considered cash equivalents.
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Notes to Unaudited Consolidated Financial Statements
1. Presentation of Interim Financial Statements
          BFC Financial Corporation (“BFC” or, unless otherwise indicated or the context otherwise requires, “we”, “us”, “our” or the “Company”) is a diversified holding company whose principal holdings include a controlling interest in BankAtlantic Bancorp, Inc. and its subsidiaries, including BankAtlantic (“BankAtlantic Bancorp”), a controlling interest in Bluegreen Corporation and its subsidiaries (“Bluegreen”), and a non-controlling interest in Benihana Inc. (“Benihana”). BFC also holds interests in other investments and subsidiaries. As a result of its position as the controlling shareholder of BankAtlantic Bancorp, BFC is a “unitary savings bank holding company” regulated by the Office of Thrift Supervision (“OTS”).
          Generally accepted accounting principles (“GAAP”) require that BFC consolidate the financial results of the entities in which it has controlling interest. As a consequence, the assets and liabilities of all such entities are presented on a consolidated basis in BFC’s financial statements. However, except as otherwise noted, the debts and obligations of the consolidated entities, including BankAtlantic Bancorp, Bluegreen and Woodbridge Holdings, LLC, a wholly-owned subsidiary of BFC (“Woodbridge”), are not direct obligations of BFC and are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC absent a dividend or distribution from those entities. The recognition by BFC of income from controlled entities is determined based on the total percent of economic ownership in those entities. At March 31, 2011, we owned approximately 52% of Bluegreen’s common stock and had an approximately 45% ownership interest and 70% voting interest in BankAtlantic Bancorp.
          Our business activities currently consist of (i) Real Estate and Other and (ii) Financial Services. We currently report our results of operations through six reportable segments. Our Real Estate and Other business activities include the following four reportable segments: BFC Activities; Real Estate Operations; and Bluegreen Resorts and Bluegreen Communities, the segments through which Bluegreen’s results of operations are reported. The Company’s Financial Services business activities include BankAtlantic Bancorp’s results of operations and contain the other two reportable segments: BankAtlantic and BankAtlantic Bancorp Parent Company. See Note 15 for additional information about our segments.
          The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In management’s opinion, the accompanying unaudited consolidated financial statements contain all adjustments, which include normal recurring adjustments, as are necessary for a fair statement of the Company’s consolidated financial condition at March 31, 2011; the consolidated results of operations, comprehensive loss and cash flows for the three months ended March 31, 2011 and 2010; and the changes in consolidated equity for the three months ended March 31, 2011. Operating results for the three months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. These unaudited consolidated financial statements and related notes are presented as permitted by Form 10-Q and should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. All significant inter-company balances and transactions have been eliminated in consolidation. As used throughout this document, the term “fair value” reflects the Company’s estimate of fair value as discussed herein. Certain amounts for prior periods have been reclassified to conform to the current period’s presentation.
          Revisions to Consolidated Financial Statements
          On November 16, 2009, we purchased an additional 7.4 million shares of Bluegreen’s common stock. This share purchase increased our ownership interest in Bluegreen to approximately 16.9 million shares, or approximately 52%, of Bluegreen’s outstanding common stock. Accordingly, we are deemed to have a controlling interest in Bluegreen and, under GAAP, Bluegreen’s results are consolidated in our financial statements. The Company accounted for the acquisition of a controlling interest in Bluegreen in accordance with the accounting guidance for business combinations, pursuant to which management was required to evaluate the fair value of Bluegreen’s assets and liabilities as of the acquisition date. As previously disclosed, the allocation of the purchase price was based on preliminary estimates of the fair value of Bluegreen’s inventory and contracts, and was subject to change within the measurement period as valuations were finalized. Additionally, any offset relating to amortization/accretion was also retrospectively adjusted in the appropriate periods. As discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, during the fourth quarter of 2010, the

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Company finalized its valuations and adjusted the preliminary value assigned to the assets and liabilities of Bluegreen in order to reflect additional information obtained since the November 16, 2009 share acquisition date. These changes resulted in the following adjustments at December 31, 2009: a decrease of approximately $6.9 million to real estate inventory; an increase in other assets of approximately $3.5 million; an increase in other liabilities of approximately $4.1 million; and a decrease in deferred income taxes of approximately $7.1 million. Such adjustments resulted in a decrease to the “bargain purchase gain” related to the share acquisition for the year ended December 31, 2009 from $183.1 million to $182.8 million. The Company’s Consolidated Statement of Operations for the three months ended March 31, 2010 was revised to reflect the impact of the amortization/accretion associated with the above adjustments which resulted in a decrease to the net loss for the quarter of approximately $88,000 compared to the previously reported amount.
          Additionally, during the fourth quarter of 2010, management identified certain errors in its previously reported financial statements for 2010 and 2009. Because these errors were not material to the Company’s financial statements for 2010 or 2009, individually or in the aggregate, the Company revised its previously reported 2010 first, second and third quarter financial statements and its 2009 annual financial statements. These adjustments related to the following: the recognition of interest income associated with the acquired notes receivable in accordance with the accounting guidance Loans and Debt Securities with Deteriorated Credit Quality; an adjustment to the provision for loan losses for the acquired notes receivable; interest expense recognition for notes payable of certain defaulted debt at Woodbridge’s subsidiaries, Core Communities, LLC (“Core” or “Core Communities”) and Carolina Oak Homes, LLC (“Carolina Oak”), at the defaulted interest rate, where the stated interest rate was previously used; the recognition of income tax benefits associated with unrealized gains in accumulated other comprehensive income; and an adjustment to deferred taxes related to an impairment to real estate inventory which was reflected after November 16, 2009 and accounted for as a temporary difference, which should have been included in the determination of deferred taxes at the acquisition date, as part of the Bluegreen purchase price allocation.
          The Company’s financial statements for the three months ended March 31, 2010 contained herein reflect the adjustments and revisions described above. The Company will present the impact of these adjustments and revisions for the three and six months ended June 30, 2010 and for the three and nine months ended September 30, 2010 in future filings when it discloses them as comparable periods. The quarterly period adjustments and revisions were previously disclosed in Note 40 to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

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          The following table summarizes the quarterly results for the three months ended March 31, 2010 as it was previously reported and as revised (in thousands):
                         
            For the Three Months Ended
            March 31, 2010
                    (As Previously
            (As Revised)   Reported)
Revenues
    (1 )   $ 155,451       152,180  
Costs and expenses
    (2 )     192,764       192,780  
               
 
            (37,313 )     (40,600 )
Equity in earnings from unconsolidated affiliates
            193       4  
Other income
            438       754  
               
Loss from continuing operations before income taxes
            (36,682 )     (39,842 )
Less: Benefit for income taxes
    (3 )     (3,831 )     (4,591 )
               
Loss from continuing operations
            (32,851 )     (35,251 )
Discontinued operations, net of income tax
            (249 )     (249 )
               
Net loss
            (33,100 )     (35,500 )
Less: Net loss attributable to noncontrolling interests
    (4 )     (13,320 )     (14,665 )
               
Net loss attributable to BFC
            (19,780 )     (20,835 )
Preferred Stock dividends
            (188 )     (188 )
             
Net loss allocable to common stock
          $ (19,968 )     (21,023 )
               
 
                       
Basic Loss per Common Share
                       
Loss per share from continuing operations
          $ (0.26 )     (0.28 )
Loss per share from discontinued operations
                   
               
Net loss per common share
          $ (0.26 )     (0.28 )
               
 
                       
Diluted Loss per Common Share
                       
Loss per share from continuing operations
          $ (0.26 )     (0.28 )
Loss per share from discontinued operations
                   
               
Net loss per common share
          $ (0.26 )     (0.28 )
               
 
1)   Includes revisions related to the provision for loan losses and recognition of interest income in accordance with the accounting guidance for Loans and Debt Securities with Deteriorated Credit Quality for Bluegreen’s acquired notes receivable. The revisions increased revenues by approximately $4.4 million for the quarter ended March 31, 2010.
 
2)   Includes certain revisions related to the interest rates used in the calculation of interest expense on defaulted notes payable at Core Communities and Carolina Oak and revisions related to the subsequent amortization from the measurement period adjustments of real estate inventory and certain contracts in connection with the Bluegreen share purchase. These revisions resulted in an increase to costs and expenses by $1.3 million for the quarter ended March 31, 2010.
 
3)   Includes tax adjustments as they relate to the revisions noted above and the recognition of income tax benefits associated with unrealized gains in accumulated other comprehensive income at BankAtlantic Bancorp and BFC, which resulted in a net decrease of $760,000 in the tax benefit for the quarter ended March 31, 2010.
 
4)   As a result of the revisions noted above, the net loss attributable to noncontrolling interests decreased by $1.3 million for the quarter ended March 31, 2010.

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          The principal amount of BankAtlantic Bancorp loans set forth in the table in Note 10 to the Company’s financial statements in the Company’s Form 10-K for the year ended December 31, 2010 were incorrectly identified as reflecting loan-to-value ratios obtained as of the first quarter of 2010 when in fact the amounts instead reflected loan-to-value ratios at loan origination. The table below labeled “As Corrected” reflects loan-to-value ratios as of December 31, 2010 based on first quarter of 2010 valuations. The table below labeled “As Reported” reflects the table contained in the Form 10-K for the year ended December 31, 2010 which reflects loan-to-value ratios at origination.
                                 
    As Reported     As Corrected  
    As of December 31, 2010     As of December 31, 2010  
    Residential     Residential     Residential     Residential  
Loan-to-value ratios   Interest Only     Amortizing     Interest Only     Amortizing  
Ratios not available
  $       78,031       59,520       185,610  
=<60%
    107,063       144,744       47,605       145,075  
60.1% - 70%
    118,679       103,891       33,005       49,732  
70.1% - 80%
    290,840       309,925       37,808       48,586  
80.1% - 90%
    17,055       23,982       47,574       47,039  
>90.1%
    16,609       13,212       324,734       197,743  
 
                       
Total
  $ 550,246       673,785       550,246       673,785  
 
                       
2. Liquidity and Regulatory Considerations
BFC
          Liquidity Considerations
          Except as otherwise noted, the debts and obligations of BankAtlantic Bancorp, Bluegreen and Woodbridge are not direct obligations of BFC and generally are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC, absent a dividend or distribution from those entities. BFC’s principal sources of liquidity are its available cash, including tax refunds received as a result of tax law changes, short-term investments, and dividends from Benihana. We also expect to receive an additional $7.5 million tax refund, net of amounts payable under the settlement agreement related to the bankruptcy filing of Levitt and Sons LLC and substantially all of its subsidiaries, as discussed in Note 16 below.
          We intend to use our available funds to fund operations and meet our obligations. We may also use available funds to make additional investments in the companies within our consolidated group, including participations in BankAtlantic Bancorp’s recently announced rights offering, invest in equity securities and other investments, or repurchase shares of our common stock pursuant to our share repurchase program. On September 21, 2009, our Board of Directors approved a share repurchase program which authorizes the repurchase of up to 20,000,000 shares of Class A and Class B Common Stock at an aggregate cost of no more than $10 million. The share repurchase program replaced our $10 million repurchase program that our Board of Directors approved in October 2006 which placed a limitation on the number of shares which could be repurchased under the program at 1,750,000 shares of Class A Common Stock. The current program, like the prior program, authorizes management, at its discretion, to repurchase shares from time to time subject to market conditions and other factors. No shares were repurchased during the years ended December 31, 2010 or 2009, or during the three months ended March 31, 2011.
          During June and July 2010, BFC acquired an aggregate of 10,000,000 shares of BankAtlantic Bancorp’s Class A Common Stock in connection with the exercise of subscription rights granted to it in BankAtlantic Bancorp’s rights offering. The aggregate purchase price for those shares was $15.0 million. BFC exercised its basic subscription rights to purchase 5,986,865 shares, and the remaining 4,013,135 shares were acquired by BFC pursuant to its over-subscription request. The shares acquired in the rights offering increased BFC’s ownership interest in BankAtlantic Bancorp by approximately 8% to 45% and BFC’s voting interest in BankAtlantic Bancorp by approximately 5% to 71% as of July 2010. BankAtlantic Bancorp recently announced its intention to pursue a new rights offering to its shareholders of up to $30 million of its Class A Common Stock. We currently intend to support the rights offering and have indicated our willingness to participate; however, the amount of our investment in the rights offering has not yet been determined by our Board of Directors.
          Since March 2009, BFC has not received cash dividends from BankAtlantic Bancorp. BankAtlantic

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Bancorp is currently prohibited from paying dividends on its common stock without first receiving the written non-objection of the OTS. In addition, during February 2009, BankAtlantic Bancorp elected to exercise its right to defer payments of interest on its trust preferred junior subordinated debt. BankAtlantic Bancorp is permitted to defer quarterly interest payments for up to 20 consecutive quarters. During the deferral period, BankAtlantic Bancorp is prohibited from paying dividends to its shareholders, including BFC. While BankAtlantic Bancorp can end the deferral period at any time, BankAtlantic Bancorp has indicated that it anticipates that it may continue to defer such interest payments for the foreseeable future. Furthermore, BFC has not received cash dividends from Bluegreen and does not expect to receive cash dividends from Bluegreen in the foreseeable future. Certain of Bluegreen’s credit facilities contain terms which may limit the payment of cash dividends.
          We believe that our current financial condition and credit relationships, together with anticipated cash flows from operating activities and other sources of funds, including tax refunds and, if determined to be advisable, proceeds from the disposition of certain properties or investments, will allow us to meet our anticipated near-term liquidity needs at least through March 31, 2012. With respect to long-term liquidity requirements, we may also seek to raise funds, subject to compliance with our commitment to the OTS described below, through the incurrence of long-term secured or unsecured indebtedness, the issuance of equity and/or debt securities or through the sale of assets; however these alternatives may not be available to us on attractive terms, or at all.
          Regulatory Considerations
          BFC, on a parent company only basis, has committed that it will not, without the prior written non-objection of the OTS:
  (i)   incur, issue, renew or roll over any current lines of credit, guarantee the debt of any other entity or otherwise incur any additional debt, except as contemplated by BFC’s business plan or in connection with BankAtlantic’s compliance requirements applicable to it;
 
  (ii)   declare or make any dividends or other capital distributions other than dividends payable on BFC’s currently outstanding preferred stock of approximately $187,500 a quarter; or
 
  (iii)   enter into any new agreements, contracts or arrangements or materially modify any existing agreements, contracts or arrangements with BankAtlantic not consistent with past practices.
          As described below, BankAtlantic Bancorp and BankAtlantic each entered into Cease and Desist Orders with the OTS during February 2011. (See “BankAtlantic Bancorp and BankAtlantic — Regulatory Considerations” below for a discussion regarding the terms of the Cease and Desist Orders.) Based on its ownership interest in BankAtlantic Bancorp, BFC may in the future be required to enter into a Cease and Desist Order with the OTS addressing its ownership and oversight of those companies.
Woodbridge
          The development activities at Carolina Oak which is within Tradition Hilton Head, were suspended in the fourth quarter of 2008 as a result of, among other things, an overall softening of demand for new homes and a decline in the overall economy. In 2009, the housing industry continued to face significant challenges and Woodbridge made the decision to cease all activities at Carolina Oak. Woodbridge was the obligor under a $37.2 million loan that was collateralized by the Carolina Oak property. During November 2009, the lender filed an action against Woodbridge and Carolina Oak alleging default under a promissory note and breach of a guaranty related to the loan. During December 2009, the OTS closed the lender and appointed the Federal Deposit Insurance Corporation (the “FDIC”) as receiver. The FDIC subsequently sold the loan to an investor group. Effective April 26, 2011, Woodbridge and Carolina Oak entered into a settlement agreement with the investor group to resolve the disputes and litigation between them. Under the terms and conditions of the settlement agreement, (i) Woodbridge paid $2.5 million to the investor group, (ii) Carolina Oak conveyed to the investor group the real property securing the loan and (iii) the investor group agreed not to pursue certain remedies, including a deficiency judgment, and after the expiration of an agreed-upon time, to fully release Woodbridge and Carolina Oak, in each case subject to certain conditions. At March 31, 2011, the carrying amount of Carolina Oak’s inventory was approximately $10.8 million.
          On September 21, 2009, BFC consummated its merger with Woodbridge pursuant to which Woodbridge merged with and into a wholly-owned subsidiary of BFC. Under Florida law, holders of Woodbridge’s Class A Common Stock who did not vote to approve our merger with Woodbridge and who properly asserted and exercised

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their appraisal rights with respect to their shares (“Dissenting Holders”) are entitled to receive a cash payment in an amount equal to the fair value of their shares (as determined in accordance with the provisions of Florida law) in lieu of the shares of BFC’s Class A Common Stock which they would otherwise have been entitled to receive. Dissenting Holders, who owned in the aggregate approximately 4.6 million shares of Woodbridge’s Class A Common Stock, provided written notice to Woodbridge regarding their intent to exercise their appraisal rights. In accordance with Florida law, Woodbridge provided written notices and required forms to the Dissenting Holders setting forth, among other things, its determination that the fair value of Woodbridge’s Class A Common Stock immediately prior to the effectiveness of the merger was $1.10 per share. Dissenting Holders were required to return their appraisal forms by November 10, 2009 and indicate on their appraisal forms whether the Dissenting Holder chose to (i) accept Woodbridge’s offer of $1.10 per share or (ii) demand payment of the fair value estimate determined by the Dissenting Holder plus interest. One Dissenting Holder, which held approximately 400,000 shares of Woodbridge’s Class A Common Stock, has withdrawn its shares from the appraisal rights process, while the remaining Dissenting Holders, who collectively held approximately 4.2 million shares of Woodbridge’s Class A Common Stock, have rejected Woodbridge’s offer of $1.10 per share and requested payment for their shares based on their respective fair value estimates of Woodbridge’s Class A Common Stock. In December 2009, the Company recorded a $4.6 million liability with a corresponding reduction to additional paid-in capital representing, in the aggregate, Woodbridge’s offer to the Dissenting Holders. The appraisal rights litigation thereafter commenced and is currently ongoing. The outcome of the litigation is uncertain and there is no assurance as to the amount of cash that will be required to be paid to the Dissenting Holders, which amount may be greater than the $4.6 million that we have accrued.
Core Communities
          Historically, the activities of Core Communities focused on the development of a master-planned community in Port St. Lucie, Florida called Tradition, Florida and a community outside of Hardeeville, South Carolina called Tradition Hilton Head. Until 2009, Tradition, Florida was in active development as was Tradition Hilton Head, although in a much earlier stage.
          During 2010, demand for residential and commercial inventory showed no signs of recovery, particularly in the geographic regions where Core’s properties were located. In early 2010, Woodbridge made the decision to pursue an orderly liquidation of Core and worked cooperatively with the various lenders to achieve that objective. During November 2010, Core entered into a settlement agreement with one of its lenders, which had previously commenced actions seeking foreclosure of mortgage loans totaling approximately $113.9 million collateralized by property in Florida and South Carolina. Under the terms of the agreement, Core pledged additional collateral to the lender consisting of membership interests in five of Core’s subsidiaries and granted security interests in the acreage owned by such subsidiaries in Port St. Lucie, Florida, substantially all of which is undeveloped raw land. Core also agreed to an amendment of the complaint related to the Florida foreclosure action to include this additional collateral and an entry into consensual judgments of foreclosure in both the Florida and South Carolina foreclosure actions. In consideration therefore, the lender agreed not to enforce a deficiency judgment against Core and, in February 2011, released Core from any other claims arising from or relating to the loans. As of November 30, 2010, Core deconsolidated the five subsidiaries, the membership interests in which were transferred to the lender upon entry into the consensual judgments of foreclosure. In connection therewith, and in accordance with the accounting guidance for consolidation, the Company recorded a guarantee obligation “deferred gain on settlement of investment in subsidiary” of $11.3 million in the Company’s Consolidated Statement of Financial Condition as of December 31, 2010. Core received its general release of liability, and accordingly the deferred gain on settlement of investment in subsidiary was recognized into income, during the three months ended March 31, 2011.
          In December 2010, Core and one of its subsidiaries entered agreements, including without limitation, a Deed in Lieu of Foreclosure Agreement, with one of their lenders which resolved the foreclosure proceedings commenced by the lender related to property at Tradition Hilton Head which served as collateral for a $25 million loan. Pursuant to the agreements, Core’s subsidiary transferred to the lender all of its right, title and interest in and to the property which served as collateral for the loan as well as certain additional real and personal property. In consideration therefore, the lender released Core and its subsidiary from any claims arising from or relating to the loan. In accordance with applicable accounting guidance, this transaction was accounted for as a troubled debt restructuring and accordingly, a $13.0 million gain on debt extinguishment was recognized in December 2010.

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BankAtlantic Bancorp and BankAtlantic
Regulatory Considerations
          On February 23, 2011, the BankAtlantic Bancorp at its parent company level (“BankAtlantic Bancorp Parent Company”) and BankAtlantic, each entered into a Stipulation and Consent to Issuance of Order to Cease and Desist with the Office of Thrift Supervision (“OTS”), BankAtlantic Bancorp Parent Company’s and BankAtlantic’s primary regulator. The Order to Cease and Desist to which BankAtlantic Bancorp Parent Company is subject is referred to as the “Company Order,” the Order to Cease and Desist to which BankAtlantic is subject is referred to as the “Bank Order” and the Company Order and Bank Order are referred to collectively as the “Orders.” The OTS issued the Orders due to BankAtlantic Bancorp’s losses over the past three years, high levels of classified assets and inadequate levels of capital based on BankAtlantic’s risk profile as determined by the OTS’s recent examination. BankAtlantic Bancorp Parent Company submitted updated written plans to the OTS that address, among other things, how BankAtlantic Bancorp Parent Company intends to maintain and enhance its and BankAtlantic’s capital and set forth BankAtlantic Bancorp Parent Company’s business plan for the year ending December 31, 2011. In addition, under the terms of the Company Order, BankAtlantic Bancorp Parent Company is prohibited from taking certain actions without receiving the prior written non-objection of the OTS, including, without limitation, declaring or paying any dividends or other capital distributions and incurring certain indebtedness. BankAtlantic Bancorp Parent Company is also required to ensure BankAtlantic’s compliance with the terms of the Bank Order as well as all applicable laws, rules, regulations and agency guidance.
          Pursuant to the terms of the Bank Order, BankAtlantic is required to attain by June 30, 2011 and maintain a tier 1 (core) capital ratio equal to or greater than 8% and a total risk-based capital ratio equal to or greater than 14%. At March 31, 2011, BankAtlantic had a tier 1 (core) capital ratio of 5.97% and a total risk-based capital ratio of 11.77%. Under the terms of the Bank Order, BankAtlantic has revised certain of its plans, programs and policies and submitted to the OTS certain written plans, including a capital plan, a revised business plan and a plan to reduce BankAtlantic’s delinquent loans and non-performing assets. If BankAtlantic fails to comply with the capital plan and/or fails to attain and maintain the increased capital ratio requirements, or upon any written request from the OTS, BankAtlantic is required to submit a contingency plan, which must detail actions which BankAtlantic would, in its case, take to either merge with or be acquired by another banking institution. BankAtlantic will not be required to implement such contingency plan until such time as it receives written notification from the OTS to do so. In addition, the Bank Order requires BankAtlantic to limit its asset growth and restricts BankAtlantic from originating or purchasing new commercial real estate loans or entering into certain material agreements, in each case without receiving the prior written non-objection of the OTS. Separately, the OTS has confirmed that it has no objection to BankAtlantic originating loans to facilitate the sale of certain assets or the renewal, extension or modification of existing commercial real estate loans, subject in each case to compliance with applicable regulations and bank policies. The Bank Order prohibits the payment of dividends and other distributions without the prior written non-objection of the OTS. The Orders also include certain restrictions on compensation paid to the senior executive officers of BankAtlantic Bancorp Parent Company and BankAtlantic, and restrictions on agreements with affiliates.
          BankAtlantic Bancorp Parent Company and BankAtlantic will seek to meet the higher capital requirements of the Bank Order through the estimated financial impact upon consummation of the proposed sale to PNC Financial Services Group, Inc. of BankAtlantic’s Tampa branch network anticipated to close in June 2011, subject to customary closing conditions and regulatory requirements, and through other efforts that may include the issuance of BankAtlantic Bancorp’s Class A Common Stock through a public or private offering, and specifically through the rights offering to BankAtlantic Bancorp’s shareholders announced on May 2, 2011. BankAtlantic is also pursuing other initiatives to improve its regulatory capital position including: operating strategies to increase revenues and to reduce non-interest expenses, asset balances and non-performing loans. There can be no assurance that BankAtlantic Bancorp Parent Company or BankAtlantic will be able to execute these or other strategies in order to meet and maintain BankAtlantic’s new minimum regulatory capital levels by the required time frames.
          Each Order became effective on February 23, 2011 and will remain in effect until terminated, modified or suspended by the OTS. No fines or penalties were imposed in connection with either Order. While the Orders formalize steps that BankAtlantic Bancorp believes are already underway, if there is any material failure by BankAtlantic Bancorp Parent Company or BankAtlantic to comply with the terms of the Orders, or if unanticipated market factors emerge, and/or if BankAtlantic Bancorp is unable to raise required additional capital, successfully execute its plans, or comply with other regulatory requirements, then the OTS could take further action, which could

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include the imposition of fines and/or additional enforcement actions. Enforcement actions broadly available to regulators include the issuance of a capital directive, removal of officers and/or directors, institution of proceedings for receivership or conservatorship, and termination of deposit insurance. Any such action would have a material adverse effect on BankAtlantic Bancorp’s business, results of operations and financial position.
          Liquidity Considerations
          Both BankAtlantic Bancorp Parent Company and BankAtlantic actively manage liquidity and cash flow needs. BankAtlantic Bancorp Parent Company had cash of $13.1 million as of March 31, 2011. BankAtlantic Bancorp Parent Company does not have debt maturing until March 2032 and has the ability to defer interest payments on its junior subordinated debentures until December 2013; however, based on current interest rates, accrued and unpaid interest of approximately $73.1 million would be due in December 2013 if interest is deferred until that date. BankAtlantic Bancorp Parent Company’s operating expenses for the year ended December 31, 2010 were $6.4 million and $1.0 million during the three months ended March 31, 2011. BankAtlantic’s liquidity is dependent, in part, on its ability to maintain or increase deposit levels and the availability of its lines of credit borrowings with the Federal Home Loan Bank (“FHLB”), as well as the Treasury and Federal Reserve lending programs.
          As of March 31, 2011, BankAtlantic had $760 million of cash and short-term investments and approximately $920 million of available unused borrowings, consisting of $589 million of unused FHLB line of credit capacity, $297 million of unpledged securities, and $34 million of available borrowing capacity at the Federal Reserve. However, such available borrowings are subject to regular reviews and may be terminated, suspended or reduced at any time at the discretion of the issuing institution or based on the availability of qualifying collateral. Additionally, interest rate changes, additional collateral requirements, disruptions in the capital markets, adverse litigation or regulatory actions, or deterioration in BankAtlantic’s financial condition may reduce the amounts it is able to borrow, make borrowings unavailable or make terms of the borrowings and deposits less favorable. As a result, BankAtlantic’s cost of funds could increase and the availability of funding sources could decrease. Based on current and expected liquidity needs and sources, BankAtlantic Bancorp expects to be able to meet its obligations at least through March 31, 2012.
3. Bluegreen Share Acquisition
          As described above, on November 16, 2009, we purchased approximately 7.4 million shares of the common stock of Bluegreen for an aggregate purchase price of approximately $23 million, increasing our interest from 9.5 million shares, or 29%, of Bluegreen’s common stock to 16.9 million shares, or 52%, of Bluegreen’s common stock. As a result, we hold a controlling interest in Bluegreen and, under GAAP, consolidate Bluegreen and all of Bluegreen’s consolidated entities into our financial statements. The operating results of Bluegreen are included in the Company’s Bluegreen Resorts and Bluegreen Communities segments.
          See Revisions to Consolidated Financial Statements under Note 1 above for a discussion regarding adjustments made to our previously reported financial statements resulting from our finalization during the fourth quarter of 2010 of our valuation of Bluegreen’s assets and liabilities as of the November 16, 2009 share acquisition date.

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4. Discontinued Operations
          In December 2009, Core Communities reinitiated efforts to sell two of its commercial leasing projects (sometimes referred to herein as the “Projects”) and began soliciting bids from several potential buyers to purchase assets associated with the Projects. Accordingly, the results of operations for the Projects are included in the Company’s Consolidated Statement of Operations for the three months ended March 31, 2010 as discontinued operations. On June 10, 2010, Core sold the Projects to Inland Real Estate Acquisition, Inc. (“Inland”) for approximately $75.4 million. As a result of the sale, Core realized a gain on sale of discontinued operations of approximately $2.6 million in the second quarter of 2010. In connection with the sale, the outstanding balance of the loans related to the assets held for sale was reduced to approximately $800,000 as a result of negotiations with the lender. Core used the proceeds from the sale to repay these loans. As a result, Core was released from its obligations to the lender with respect to the loans.
          The following table summarizes the results of operations for the Projects during the three months ended March 31, 2010 (in thousands):
         
    March 31,  
    2010  
Revenue and other income
  $ 1,834  
Costs and expenses
    2,083  
 
     
Loss before income taxes
    (249 )
Benefit for income taxes
     
 
     
Loss from discontinued operations
  $ (249 )
 
     
5. Assets Held for Sale
          In August 2010, BankAtlantic announced that, due to the rapidly changing environment in Florida and the banking industry, it decided to focus on its core markets in South Florida and BankAtlantic began seeking a buyer for its 19 branches located in the Tampa, Florida area. In January 2011, BankAtlantic agreed to sell its 19 branches and 2 related facilities in the Tampa area and the associated deposits to an unrelated financial institution. The purchasing financial institution has agreed to pay i) a 10% premium for the deposits plus ii) the net book value of the acquired real estate and substantially all of the fixed assets associated with the branches and facilities. The purchasing financial institution and BankAtlantic have each received regulatory approval for the transaction. The transaction is anticipated to close during June 2011, subject to customary closing conditions and regulatory requirements.
          The assets and liabilities associated with the Tampa branches were as follows (in thousands):
                 
    March 31, 2011     December 31, 2010  
ASSETS
               
Cash and cash equivalents
  $ 6,184       5,850  
Office properties and equipment
    30,725       31,484  
 
           
Total assets held for sale
  $ 36,909       37,334  
 
           
LIABILITIES
               
Interest bearing deposits
  $ 294,746       255,630  
Non-interest bearing deposits
    95,686       85,516  
 
           
Total deposits
    390,432       341,146  
Accrued interest payable
    79       87  
 
           
Total liabilities held for sale
  $ 390,511       341,233  
 
           

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6. Fair Value Measurement
          The following tables present major categories of the Company’s assets measured at fair value on a recurring basis as of March 31, 2011 and December 31, 2010 (in thousands):
                                 
            Fair Value Measurements Using  
            Quoted prices in              
            Active Markets     Significant Other     Significant  
            for Identical     Observable     Unobservable  
    March 31,     Assets     Inputs     Inputs  
Description   2011     (Level 1)     (Level 2)     (Level 3)  
Mortgage-backed securities
  $ 103,790             103,790        
REMICS (1)
    59,254             59,254        
Agency bonds
    60,166             60,166        
Municipal bonds
    133,918             133,918        
Taxable securities
    17,620             17,620        
Benihana Convertible Preferred Stock
    20,951                   20,951  
Other equity securities
    18,800       18,800              
 
                       
Total
  $ 414,499       18,800       374,748       20,951  
 
                       
                                 
            Fair Value Measurements Using  
            Quoted prices in              
            Active Markets     Significant Other     Significant  
            for Identical     Observable     Unobservable  
    December 31,     Assets     Inputs     Inputs  
Description   2010     (Level 1)     (Level 2)     (Level 3)  
Mortgage-backed securities
  $ 112,042             112,042        
REMICS(1)
    68,841             68,841        
Agency bonds
    60,143             60,143        
Municipal bonds
    162,123             162,123        
Taxable securities
    19,922             19,922        
Foreign currency put options
    24       24              
Benihana Convertible Preferred Stock
    21,106                   21,106  
Other equity securities
    20,819       20,819              
 
                       
Total
  $ 465,020       20,843       423,071       21,106  
 
                       
 
(1)   Real estate mortgage investment conduits (REMICS) are pass-through entities that hold residential loans. Investors in these entities are issued ownership interests in the entities in the form of a bond. The securities were issued by government agencies.
          There were no liabilities measured at fair value on a recurring basis in the Company’s financial statements at March 31, 2011 or December 31, 2010.

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          The following table presents major categories of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2011 (in thousands):
         
    Benihana  
    Convertible  
    Preferred Stock  
Beginning Balance
  $ 21,106  
Total gains and losses (realized/unrealized)
       
Included in earnings (or changes in net assets)
     
Cumulative effect of change in accounting principle
     
Included in other comprehensive loss
    (155 )
Purchases, issuances, and settlements
     
Transfers in and/or out of Level 3
     
 
     
Balance at March 31, 2011
  $ 20,951  
 
     
          The following table presents major categories of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2010 (in thousands):
                                         
    Retained                    
    Interests in           Benihana        
    Notes           Convertible   Equity    
    Receivable Sold   Bonds   Preferred Stock   Securities   Total
     
Beginning Balance
  $ 26,340       250       17,766             44,356  
Total gains and losses (realized/unrealized)
                                       
Cumulative effect of change in accounting principle
    (26,340 )                       (26,340 )
Included in other comprehensive income
                2,481             2,481  
Purchases, issuances, and settlements
                             
Transfers in and/or out of Level 3
                             
     
Balance at March 31, 2010
  $       250       20,247             20,497  
             
          The valuation techniques and the inputs used in our financial statements to measure the fair value of our recurring financial instruments are described below.
          The fair values of agency bonds, municipal bonds, taxable bonds, mortgage-backed securities and REMICs are estimated using independent pricing sources and matrix pricing. Matrix pricing uses a market approach valuation technique and Level 2 valuation inputs as quoted market prices are not available for the specific securities that BankAtlantic Bancorp owns. The independent pricing sources value these securities using observable market inputs including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads and other reference data in the secondary institutional market which is the principal market for these types of assets. To validate fair values obtained from the pricing sources, BankAtlantic Bancorp reviews fair value estimates obtained from brokers, investment advisors and others to determine the reasonableness of the fair values obtained from independent pricing sources. BankAtlantic Bancorp reviews any price that it determines may not be reasonable and requires the pricing sources to explain the differences in fair value or reevaluate its fair value.
          Equity securities are generally fair valued using the market approach and quoted market prices (Level 1) or matrix pricing (Level 2 or Level 3) with inputs obtained from independent pricing sources, if available. Also non-binding broker quotes are obtained to validate fair values obtained from matrix pricing. However, certain equity and debt securities in which observable market inputs cannot be obtained are valued either using the income approach and pricing models that we have developed or based on observable market data that we adjust based on our judgment of the factors we believe a market participant would use to value the securities (Level 3).
          The fair value of foreign currency put options was obtained using the market approach and quoted market prices using Level 1 inputs as of December 31, 2010.

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          The estimated fair value of the Company’s investment in Benihana’s Convertible Preferred Stock was assessed using the income approach with Level 3 inputs by discounting future cash flows at a market discount rate combined with the fair value of the shares of Benihana’s Common Stock that BFC would receive upon conversion of its shares of Benihana Convertible Preferred Stock.
          The following tables present major categories of assets measured at fair value on a non-recurring basis as of March 31, 2011 and 2010 (in thousands):
                                         
    Fair Value Measurements Using    
            Quoted prices in                   Total
            Active Markets   Significant   Significant   Impairment (1)
    As of   for Identical   Other Observable   Unobservable   For the Three
    March 31,   Assets   Inputs   Inputs   Months Ended
Description   2011   (Level 1)   (Level 2)   (Level 3)   March 31, 2011
     
Loans measured for impairment using the fair value of the underlying collateral
  $ 238,540                   238,540       14,497  
Impairment of loans held for sale
    33,664                   33,664       4,479  
Impairment of real estate owned
    19,728                   19,728       2,323  
     
Total
  $ 291,932                   291,932       21,299  
             
                                         
            Fair Value Measurements Using    
            Quoted prices in                   Total
            Active Markets   Significant   Significant   Impairments(1)
    As of   for Identical   Other Observable   Unobservable   For the Three
    March 31,   Assets   Inputs   Inputs   Months Ended
Description   2010   (Level 1)   (Level 2)   (Level 3)   March 31, 2010
     
Loans measured for impairment using the fair value of the collateral
  $ 189,832                   189,832       21,581  
Impaired real estate owned
    665                   665       143  
     
Total
  $ 190,497                   190,497       21,724  
             
 
(1)   Total impairments represent the amount of loss recognized during the three months ended March 31, 2011 and 2010 on assets that were measured at fair value as of those dates.
          There were no liabilities measured at fair value on a non-recurring basis in the Company’s financial statements.
          Loans Receivable Measured For Impairment
          Impaired loans are generally valued based on the fair value of the underlying collateral. BankAtlantic Bancorp primarily uses third party appraisals to assist in measuring non-homogenous impaired loans. These appraisals generally use the market or income approach valuation technique and use market observable data to formulate an opinion of the fair value of the loan’s collateral. However, the appraiser uses professional judgment in determining the fair value of the collateral or properties, and we may also adjust these values for changes in market conditions subsequent to the appraisal date. When current appraisals are not available for certain loans, BankAtlantic Bancorp uses its judgment on market conditions to adjust the most current appraisal. The sales prices may reflect prices of sales contracts not closed, and the amount of time required to sell out the real estate project may be derived from current appraisals of similar projects. As a consequence, the calculation of the fair value of the collateral uses Level 3 inputs. BankAtlantic Bancorp generally uses third party broker price opinions or an automated valuation service to measure the fair value of the collateral for impaired homogenous loans in the establishment of specific reserves or charge-downs when these loans become 120 days delinquent. These third party valuations from real estate professionals also use Level 3 inputs in the determination of the fair values.

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          Loans Held for Sale
          Loans held for sale are valued using an income approach with Level 3 inputs as market quotes or sale transactions of similar loans are generally not available. The fair value is estimated by discounting forecasted cash flows using a discount rate that reflects the risks inherent in the loans held for sale portfolio. For non-performing loans held for sale the forecasted cash flows are based on the estimated fair value of the collateral less cost to sell adjusted for foreclosure expenses and other operating expenses of the underlying collateral until foreclosure and sale.
          Impaired Real Estate Owned
          Real estate is generally valued using third party appraisals or broker price opinions. These appraisals generally use the market approach valuation technique and use market observable data to formulate an opinion of the fair value of the properties. However, the appraisers or brokers use professional judgments in determining the fair value of the properties and we may also adjust these values for changes in market conditions subsequent to the valuation date. As a consequence of using appraisals, broker price opinions and adjustments to appraisals, the fair values of the properties are considered Level 3 inputs.
Financial Disclosures about Fair Value of Financial Instruments
          The following table presents information for financial instruments at March 31, 2011 and December 31, 2010 (in thousands):
                                 
    March 31, 2011   December 31, 2010
    Carrying   Fair   Carrying   Fair
    Amount   Value   Amount   Value
Financial assets:
                               
Cash and cash equivalents
  $ 164,845       164,845       178,868       178,868  
Interest bearing deposits in other banks
    656,424       656,424       455,538       455,538  
Restricted cash
    60,954       60,954       62,249       62,249  
Securities available for sale
    414,499       414,499       465,020       465,020  
Investment securities
    1,833       1,833       2,033       2,033  
Tax certificates
    77,837       78,523       89,789       90,738  
Federal home loan bank stock
    43,557       43,557       43,557       43,557  
Loans receivable including loans held for sale, net
    2,862,985       2,565,616       3,039,486       2,689,890  
Notes receivable
    556,452       591,000       574,969       623,000  
 
                               
Financial liabilities:
                               
Deposits
  $ 4,005,006       4,009,428       3,891,190       3,893,807  
Advances from FHLB
    45,000       44,994       170,000       170,038  
Securities sold under agreements to repurchase and other short term borrowings
    18,373       18,373       22,764       22,764  
Receivable-backed notes payable
    536,407       520,039       569,214       560,728  
Notes and mortgage notes payable and other borrowings
    228,867       227,865       239,571       224,866  
Junior subordinated debentures
    465,453       249,922       461,568       220,080  
          Management has made estimates of fair value that it believes to be reasonable. However, because there is no active market for many of these financial instruments and management has derived the fair value of the majority of these financial instruments using the income approach technique with Level 3 unobservable inputs, it is possible that the Company or its subsidiaries may not receive the estimated value upon sale or disposition of the asset or pay the estimated value upon disposition of the liability in advance of its scheduled maturity. Management estimates used in its net present value financial models rely on assumptions and judgments regarding issues where the outcome is unknown and actual results or values may differ significantly from these estimates. These fair value estimates do not consider the tax effect that would be associated with the disposition of the assets or liabilities at their fair value estimates.

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          Interest bearing deposits in other banks include $43.1 million of certificates of deposit guaranteed by the FDIC with maturities of less than one year. Due to the FDIC guarantee and the short-term maturity of these certificates of deposit, the fair value of these deposits approximates the carrying value.
          The fair value of tax certificates was calculated using the income approach with Level 3 inputs. The fair value is based on discounted expected cash flows using discount rates that take into account the risk of the cash flows of tax certificates relative to alternative investments.
          The fair value of FHLB stock is its carrying amount.
          Fair values are estimated for BankAtlantic Bancorp loan portfolios with similar financial characteristics. Loans are segregated by category, and each loan category is further segmented into fixed and adjustable rate interest terms and by performing and non-performing categories.
          The fair value of BankAtlantic Bancorp’s performing loans is calculated by using an income approach with Level 3 inputs. These fair values are estimated by discounting forecasted cash flows through the estimated maturity using estimated market discount rates that reflect the interest rate risk inherent in the loan portfolio. The estimate of average maturity is based on BankAtlantic’s historical experience with prepayments for each loan classification, modified as required by an estimate of the effect of current economic and lending conditions. Management of BankAtlantic Bancorp assigns a credit risk premium and an illiquidity adjustment to these loans based on risk grades and delinquency status.
          The estimated fair value of notes receivable is based on estimated future cash flows considering contractual payments and estimates of prepayments and defaults, discounted at a market rate (the rate at which similar loans with similar maturities would be made to borrowers with similar credit risk).
          As permitted by applicable accounting guidance, the fair value of deposits with no stated maturity, such as non-interest bearing demand deposits, savings and NOW accounts, and money market and checking accounts, is shown in the above table at book value. The fair value of certificates of deposit is based on an income approach with Level 3 inputs. The fair value is calculated by the discounted value of contractual cash flows with the discount rate estimated using current rates offered by BankAtlantic for similar remaining maturities.
          The fair value of short-term borrowings is calculated using the income approach with Level 2 inputs. Contractual cash flows are discounted based on current interest rates. The carrying value of these borrowings approximates fair value as maturities are generally less than thirty days.
          The fair value of FHLB advances was calculated using the income approach with Level 2 inputs. The fair value was based on discounted cash flows using rates offered for debt with comparable terms to maturity and issuer credit standing.
          The estimated fair values of notes and mortgage notes payable and other borrowings, including receivable-backed notes payable, were based upon current rates and spreads a party would pay to obtain similar borrowings.
          In determining the fair value of BankAtlantic Bancorp’s junior subordinated debentures, BankAtlantic Bancorp used NASDAQ price quotes available with respect to its $69.0 million of publicly traded trust preferred securities related to its junior subordinated debentures (“public debentures”). However, $257.0 million of the outstanding trust preferred securities related to its junior subordinated debentures are not traded, but are privately held in pools (“private debentures”) and with no trading markets, sales history, liquidity or readily determinable source for valuation. BankAtlantic Bancorp has deferred the payment of interest with respect to all of its junior subordinated debentures as permitted by the terms of these securities. Based on the deferral status and the lack of liquidity and ability of a holder to actively sell such private debentures, the fair value of these private debentures may be subject to a greater discount to par and have a lower fair value than indicated by the public debenture price quotes. However, due to their private nature and the lack of a trading market, fair value of the private debentures was not readily determinable at March 31, 2011 and December 31, 2010, and as a practical alternative, BankAtlantic Bancorp used the NASDAQ price quotes of the public debentures to value its remaining outstanding junior subordinated debentures whether privately held or publicly traded.
          The estimated fair value of Woodbridge’s and Bluegreen’s junior subordinated debentures in the aggregate amount of $133.6 million and $115.7 million as of March 31, 2011 and December 31, 2010, respectively, were

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based on the discounted value of contractual cash flows at a market discount rate or market price quotes from the over-the-counter bond market.
          Derivatives
          The carrying amount and fair values of BankAtlantic’s commitments to extend credit, standby letters of credit, financial guarantees and forward commitments are not considered significant. See Note 16 for the contractual amounts of BankAtlantic’s financial instrument commitments.
          During the second quarter of 2010, BankAtlantic expanded its cruise ship automated teller machine (“ATM”) operations and began dispensing foreign currency from certain ATMs on cruise ships. At March 31, 2011, BankAtlantic had $7.1 million of foreign currency in cruise ship ATMs and recognized $0.4 million of foreign currency unrealized exchange gains which were included in other income in the Company’s statement of operations for the three months ended March 31, 2011. BankAtlantic purchased foreign currency put options as an economic hedge for the foreign currency in its cruise ship ATMs. The terms of the put options and the fair value as of March 31, 2011 were as follows (in thousands, except strike price):
                                     
Contract     Expiration     Strike             Fair  
Amount     Date     Price     Premium     Value  
 
400     11-Apr   $ 1.34     $ 31      
 
                       
400                     $ 31      
 
                       
          Included in Financial Services — securities activities, net in the Company’s statement of operations were $24,000 of unrealized losses associated with the above put options for the three months ended March 31, 2011.
7. Securities Available for Sale
          The following tables summarize securities available for sale (in thousands):
                                 
    As of March 31, 2011  
            Gross     Gross        
    Amortized     Unrealized     Unrealized     Estimated  
    Cost     Gains     Losses     Fair Value  
Government agency securities:
                               
Mortgage-backed securities
  $ 97,370       6,420             103,790  
Agency bonds
    60,000       166             60,166  
REMICS
    56,957       2,297             59,254  
 
                       
Total
    214,327       8,883             223,210  
 
                       
Investment securities:
                               
Municipal bonds
    133,747       171             133,918  
Other bonds
    17,624       8       12       17,620  
Benihana Convertible Preferred Stock
    16,426       4,525             20,951  
Equity and other securities
    18,624       178       2       18,800  
 
                       
Total investment securities
    186,421       4,882       14       191,289  
 
                       
Total
  $ 400,748       13,765       14       414,499  
 
                       

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    As of December 31, 2010  
            Gross     Gross        
    Amortized     Unrealized     Unrealized     Estimated  
    Cost     Gains     Losses     Fair Value  
Government agency securities:
                               
Mortgage-backed securities
  $ 105,219       6,823             112,042  
Agency bonds
    60,000       143             60,143  
REMICS
    66,034       2,807             68,841  
 
                       
Total
    231,253       9,773             241,026  
 
                       
Investment securities:
                               
Municipal bonds
    162,113       33       23       162,123  
Other bonds
    19,936       8       22       19,922  
Benihana Convertible Preferred Stock
    16,426       4,680             21,106  
Equity and other securities
    20,634       188       3       20,819  
 
                       
Total investment securities
    219,109       4,909       48       223,970  
 
                       
Derivatives
    24                   24  
 
                       
Total
  $ 450,386       14,682       48       465,020  
 
                       
          The following tables show the gross unrealized losses and fair value of the Company’s securities available for sale with unrealized losses that are deemed temporary, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of March 31, 2011 and December 31, 2010 (in thousands):
                                                 
    As of March 31, 2011
    Less Than 12 Months   12 Months or Greater   Total
    Fair   Unrealized   Fair   Unrealized   Fair   Unrealized
    Value   Losses   Value   Losses   Value   Losses
             
Taxable Securities
  $ 12,767       12                   12,767       12  
Equity securities
                8       2       8       2  
             
Total available for sale securities:
  $ 12,767       12       8       2       12,775       14  
                   
                                                 
    As of December 31, 2010
    Less Than 12 Months   12 Months or Greater   Total
    Fair   Unrealized   Fair   Unrealized   Fair   Unrealized
    Value   Losses   Value   Losses   Value   Losses
             
Municipal bonds
  $ 90,413       (23 )                 90,413       (23 )
Taxable securities
    15,155       (22 )                 15,155       (22 )
Equity securities
                7       (3 )     7       (3 )
             
Total available for sale securities
  $ 105,568       (45 )     7       (3 )     105,575       (48 )
                   
          The unrealized losses on municipal bonds and taxable securities outstanding less than 12 months are primarily the result of interest rate changes. BankAtlantic Bancorp expects to receive cash proceeds for its entire investment upon maturity.
          The unrealized loss on equity securities at March 31, 2011 and December 31, 2010 were not significant. Accordingly, the Company did not consider these investments other-than-temporarily impaired at March 31, 2011 and December 31, 2010.

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          The scheduled maturities of debt securities available for sale were (in thousands):
                 
    Debt Securities  
    Available for Sale  
            Estimated  
    Amortized     Fair  
March 31, 2011 (1)   Cost     Value  
Due within one year
  $ 150,113       150,272  
Due after one year, but within five years
    61,347       61,524  
Due after five years, but within ten years
    19,775       20,500  
Due after ten years
    134,463       142,452  
 
           
Total
  $ 365,698       374,748  
 
           
 
(1)   Scheduled maturities in the above table are based on contractual maturities which may vary significantly from actual maturities due to prepayments.
     Included in Financial Services — securities activities, net were (in thousands):
                 
    For the Three Months  
    Ended March 31,  
    2011     2010  
Gross gains on securities sales
  $       3,138  
 
           
Gross losses on securities sales
    24        
 
           
Proceed from sales of securities
          46,907  
 
           
BFC — Benihana Investment
          During 2004, the Company purchased 800,000 shares of Benihana Series B Convertible Preferred Stock (“Convertible Preferred Stock”) for $25.00 per share. The Convertible Preferred Stock is convertible into an aggregate of 1,578,943 shares of Benihana’s Common Stock at a conversion price of $12.67 per share of Convertible Preferred Stock, subject to adjustment from time to time upon certain defined events. Based on the number of currently outstanding shares of Benihana’s capital stock, the Convertible Preferred Stock, if converted, would represent an approximately 19% voting interest and an approximately 9% economic interest in Benihana.
          Except as provided by Delaware law, the shares of the Convertible Preferred Stock have voting rights on an “as if converted” basis together with Benihana’s Common Stock on all matters put to a vote of the holders of Benihana’s Common Stock. The approval of a majority of the holders of the Convertible Preferred Stock then outstanding, voting as a single class, are required for certain events outside the ordinary course of business. Holders of the Convertible Preferred Stock are entitled to receive cumulative quarterly dividends at an annual rate equal to $1.25 per share, payable on the last day of each calendar quarter. The Convertible Preferred Stock is subject to mandatory redemption at the original issue price of $20 million plus accumulated dividends on July 2, 2014 unless the Company elects to extend the mandatory redemption date to a later date not to extend beyond July 2, 2024. At March 31, 2011, the closing price of Benihana’s Common Stock was $8.43 per share. The market value of the Convertible Preferred Stock if converted at March 31, 2011 would have been approximately $13.3 million. During July 2010, Benihana announced its intention to engage in a formal review of strategic alternatives, including a possible sale of the company. In the event that a sale transaction is consummated at a time when the Company continues to hold all 800,000 shares of the Convertible Preferred Stock, the Company would receive a minimum of $20 million in consideration for its shares of the Convertible Preferred Stock.
          At March 31, 2011, the Company’s estimated fair value of its investment in Benihana’s Convertible Preferred Stock was approximately $21.0 million. The estimated fair value of the Company’s investment in Benihana’s Convertible Preferred Stock was assessed using the income approach with Level 3 inputs by discounting future cash flows at a market discount rate combined with the fair value of the underlying shares of Benihana’s Common Stock that the Company would receive upon conversion of its shares of Benihana’s Convertible Preferred Stock.

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8. Loans Receivable
          The consolidated loan portfolio consisted of the following (in thousands):
                 
    March 31,     December 31,  
    2011     2010  
Commercial non-real estate
  $ 132,456       135,588  
Commercial real estate:
               
Residential
    115,775       133,155  
Land
    35,701       58,040  
Owner occupied
    104,704       111,097  
Other
    582,724       592,538  
Small Business:
           
Real estate
    200,394       203,479  
Non-real estate
    95,822       99,190  
Consumer:
           
Consumer — home equity
    590,771       604,228  
Consumer other
    15,633       16,068  
Deposit overdrafts
    3,717       3,091  
Residential:
           
Residential-interest only
    475,683       541,788  
Residential-amortizing
    613,167       671,948  
 
           
Total gross loans
    2,966,547       3,170,210  
 
           
Adjustments:
               
Premiums, discounts and net deferred fees
    2,034       1,650  
Allowance for loan losses
    (155,051 )     (162,139 )
 
           
Loans receivable — net
  $ 2,813,530       3,009,721  
 
           
Loans held for sale
  $ 49,455       29,765  
 
           
          BankAtlantic Bancorp’s loans held for sale as of March 31, 2011 consisted of $25.1 million of residential loans transferred from held-for-investment to held-for-sale classification during the three months ended March 31, 2011, $22.9 million of commercial loans and $1.5 million of residential loans originated for sale. BankAtlantic Bancorp’s loans held for sale as of December 31, 2010 consisted of $27.9 million of commercial real estate loans transferred from held-for-investment to held-for-sale classification during the fourth quarter of 2010 and $1.8 million of residential loans originated for sale. BankAtlantic Bancorp transfers loans to held-for-sale when, based on the current economic environment and related market conditions, it does not have the intent to hold those loans for the foreseeable future. BankAtlantic Bancorp recognized a $64,000 loss on the sale of loans held for sale for the three months ended March 31, 2011 and a $54,000 gain on the sale of loans held for sale during the three months ended March 31, 2010.
          The recorded investment (recorded investment represents unpaid principal balance less charge downs and deferred fees) of non-accrual loans receivable and loans held for sale was (in thousands):
                 
    March 31,     December 31,  
Loan Class   2011     2010  
Commercial non-real estate
  $ 17,384       17,659  
Commercial real estate:
               
Residential
    87,343       95,482  
Land
    20,157       27,260  
Owner occupied
    7,334       4,870  
Other
    134,788       128,658  
Small business:
               
Real estate
    9,841       8,928  
Non-real estate
    2,331       1,951  
Consumer
    13,231       14,120  
Residential:
               
Residential-interest only
    37,463       38,900  
Residential-amortizing
    44,092       47,639  
 
           
Total
  $ 373,964       385,467  
 
           
          An analysis of the age of the recorded investment in loans receivable and loans held for sale as of March 31, 2011 and December 31, 2010 that were past due were as follows (in thousands):

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    31-59 Days     60-89 Days     90 Days     Total             Loans  
March 31, 2011   Past Due     Past Due     or More     Past Due     Current     Receivable (1)  
Commercial non-real estate
  $ 21,779             13,373       35,152       97,304       132,456  
Commercial real estate:
                                               
Residential
    1,961             51,423       53,384       67,304       120,688  
Land
          303       16,413       16,716       28,072       44,788  
Owner occupied
    866             3,861       4,727       101,458       106,185  
Other
    9,417       2,451       53,197       65,065       527,112       592,177  
Small business:
                                               
Real estate
    1,932       1,632       6,618       10,182       190,212       200,394  
Non-real estate
    17       425             442       95,380       95,822  
Consumer
    6,645       5,332       13,234       25,211       584,910       610,121  
Residential:
                                               
Residential-interest only
    3,633       5,649       37,249       46,531       447,533       494,064  
Residential-amortizing
    6,899       4,669       43,702       55,270       573,970       629,240  
 
                                   
Total
  $ 53,149       20,461       239,070       312,680       2,713,256       3,025,935  
 
                                   
 
(1)   Total loans receivable exclude purchase accounting of $7.9 million in connection with BFC’s share acquisitions of BankAtlantic Bancorp in 2008. The 2008 share acquisitions were accounted for as step acquisitions under the purchase method of accounting then in effect.
                                                 
                                            Total
    31-59 Days   60-89 Days   90 Days   Total           Loans
December 31, 2010   Past Due   Past Due   or More (1)   Past Due   Current   Receivable (2)
     
Commercial non-real estate
  $             13,498       13,498       122,090       135,588  
Commercial real estate:
                                               
Residential
    4,700             53,791       58,491       84,325       142,816  
Land
                23,803       23,803       34,237       58,040  
Owner occupied
                3,862       3,862       107,235       111,097  
Other
          6,043       54,940       60,983       551,472       612,455  
Small business:
                                               
Real estate
    1,530       2,059       6,670       10,259       193,220       203,479  
Non-real estate
          67       25       92       99,098       99,190  
Consumer
    6,396       6,009       14,120       26,525       596,862       623,387  
Residential:
                                               
Interest only
    4,907       6,164       38,900       49,971       500,275       550,246  
Amortizing
    6,091       5,926       47,487       59,504       614,281       673,785  
     
Total
  $ 23,624       26,268       257,096       306,988       2,903,095       3,210,083  
               
 
(1)   BankAtlantic Bancorp had no loans greater than 90 days and accruing.
 
(2)   Total loans receivable exclude purchase accounting of $8.5 million in connection with BFC’s share acquisitions of BankAtlantic Bancorp in 2008. The 2008 share acquisitions were accounted for as step acquisitions under the purchase method of accounting then in effect.

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          The activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2011 was as follows (in thousands):
                                                 
            Commercial                
    Commercial   Real   Small            
    Non-Real Estate   Estate   Business   Consumer   Residential   Total
     
Allowance for Loan Losses:
                                               
Beginning balance
  $ 10,786       83,859       11,514       32,043       23,937       162,139  
Charge-offs:
    (464 )     (11,277 )     (2,611 )     (7,814 )     (8,011 )     (30,177 )
Recoveries :
    791       718       310       408       131       2,358  
Provision :
    (405 )     7,232       912       2,874       17,199       27,812  
Transfer to held for sale:
          (1,390 )                 (5,691 )     (7,081 )
     
Ending balance
  $ 10,708       79,142       10,125       27,511       27,565       155,051  
               
Ending balance individually evaluated for impairment
  $ 9,024       59,274       1,565       1,453       7,369       78,685  
Ending balance collectively evaluated for impairment
    1,684       19,868       8,560       26,058       20,196       76,366  
     
Total
  $ 10,708       79,142       10,125       27,511       27,565       155,051  
     
Loans receivable:
                                               
Ending balance individually evaluated for impairment
  $ 16,495       343,809       10,562       24,033       84,667       479,566  
Ending balance collectively evaluated for impairment
  $ 115,961       520,029       285,654       586,088       1,038,637       2,546,369  
     
Total (1)
  $ 132,456       863,838       296,216       610,121       1,123,304       3,025,935  
     
Purchases of loans
  $                         3,864       3,864  
     
Proceeds from loan sales
  $       3,100                   7,618       10,718  
     
Transfer to held for sale
  $       2,450                   25,072       27,522  
     
 
(1)   Total loans receivable exclude purchase accounting of $7.9 million in connection with BFC’s share acquisitions of BankAtlantic Bancorp in 2008. The 2008 share acquisitions were accounted for as step acquisitions under the purchase method of accounting then in effect.
          Activity in the allowance for loan losses for the three months ended March 31, 2010 was as follows (in thousands):
         
    For The Three  
    Months Ended  
    March 31, 2010  
Balance, beginning of period
  $ 187,218  
Loans charged-off
    (41,423 )
Recoveries of loans previously charged-off
    1,047  
 
     
Net charge-offs
    (40,376 )
Provision for loan losses
    30,755  
 
     
Balance, end of period
  $ 177,597  
 
     
Impaired Loans — Loans are considered impaired when, based on current information and events, the Company believes it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement. For a loan that has been restructured, the contractual terms of the loan agreement refer to the contractual terms specified by the original loan agreement, not the contractual terms specified by the restructured agreement. Impairment is evaluated based on past due status for consumer and residential loans. Impairment is evaluated based on BankAtlantic Bancorp’s on-going credit monitoring process for commercial and small business loans which results in the evaluation for impairment of all criticized loans. Factors considered in determining if a loan is impaired are past payment history, strength of the borrower or guarantors, and cash flow associated with the collateral or business. If a loan is impaired, a specific valuation allowance is allocated, if necessary, based on the

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present value of estimated future cash flows using the loan’s existing interest rate or at the fair value of collateral if the loan is collateral dependent. BankAtlantic generally measures loans for impairment using the fair value of collateral less cost to sell method. Interest payments on impaired loans for all loan classes are recognized on a cash basis, unless collectability of the principal and interest amount is probable, in which case interest is recognized on an accrual basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. Impaired loans held for sale are measured for impairment based on the estimated fair value of the collateral less cost to sell adjusted for foreclosure expenses and other operating expenses of the underlying collateral until foreclosure and sale.
          Impaired loans as of March 31, 2011 were as follows (in thousands):
                                         
            Unpaid           Average   Interest
    Recorded   Principal   Related   Recorded   Income
    Investment   Balance   Allowance   Investment   Recognized
     
With an allowance recorded:
                                       
Commercial non-real estate
  $ 15,106       15,106       9,024       15,958       16  
Commercial real estate:
                                       
Residential
    93,919       126,982       21,299       87,825       435  
Land
    5,428       5,428       1,652       10,319       42  
Owner occupied
    4,165       4,165       667       2,930        
Other
    114,736       118,006       35,657       105,215       404  
Small business:
                                       
Real estate
    7,982       7,982       269       5,292       14  
Non-real estate
    1,948       1,948       1,296       1,864       17  
Consumer
    17,248       18,286       1,453       10,489        
Residential:
                                       
Residential-interest only
    17,458       22,376       4,097       24,632        
Residential-amortizing
    15,802       19,177       3,272       20,211        
     
Total with allowance recorded
  $ 293,792       339,456       78,686       284,735       928  
     
With no related allowance recorded:
                                       
Commercial non-real estate
  $ 2,925       2,925             2,211       7  
Commercial real estate:
                                       
Residential
    24,416       58,741             34,626       91  
Land
    16,716       51,431             15,378        
Owner occupied
    3,916       3,916             3,919       36  
Other
    79,167       93,372             80,269       614  
Small business:
                                       
Real estate
    9,461       11,026             12,594       148  
Non-real estate
    805       971             489       14  
Consumer
    9,326       12,791             16,178       111  
Residential:
                                       
Residential-interest only
    20,339       32,282             13,883       4  
Residential-amortizing
    31,425       42,450             28,544       34  
     
Total with no allowance recorded
  $ 198,496       309,905             208,091       1,059  
     
Commercial non-real estate
  $ 18,031       18,031       9,024       18,169       23  
Commercial real estate
    342,463       462,041       59,275       340,481       1,622  
Small business
    20,196       21,927       1,565       20,239       193  
Consumer
    26,574       31,077       1,453       26,667       111  
Residential
    85,024       116,285       7,369       87,270       38  
     
Total
  $ 492,288       649,361       78,686       492,826       1,987  
     

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          Impaired loans as of December 31, 2010 were as follows (in thousands):
                                         
            Unpaid           Average   Interest
    Recorded   Principal   Related   Recorded   Income
    Investment   Balance   Allowance   Investment   Recognized
     
With a related allowance recorded :
                                       
Commercial non-real estate
  $ 16,809       16,809       9,850       14,850        
Commercial real estate:
                                       
Residential
    81,731       87,739       21,298       86,868       778  
Land
    15,209       15,209       8,156       21,010       18  
Owner occupied
    1,695       1,695       335       5,366        
Other
    95,693       96,873       33,197       96,800        
Small business:
                                       
Real estate
    2,602       2,602       1,733       2,838       21  
Non-real estate
    1,779       1,779       1,203       2,015        
Consumer
    3,729       5,029       1,791       4,665        
Residential:
                                       
Residential-interest only
    31,805       39,451       6,741       24,327       17  
Residential-amortizing
    24,619       28,712       5,293       16,525       34  
     
Total with a related allowance recorded
  $ 275,671       295,898       89,597       275,264       868  
     
With no related allowance recorded:
                                       
Commercial non-real estate
  $ 1,497       1,497             4,799       15  
Commercial real estate:
                                       
Residential
    44,835       116,092             42,295       267  
Land
    14,039       43,846             25,847       19  
Owner occupied
    3,922       3,922             3,878       56  
Other
    81,370       97,203             55,311       1,446  
Small business:
                                       
Real estate
    15,727       16,499             14,722       673  
Non-real estate
    172       197             358        
Consumer
    23,029       27,146             22,487       624  
Residential:
                                       
Residential-interest only
    7,427       10,078             16,694        
Residential-amortizing
    25,664       31,797             26,950       116  
     
Total with no related allowance recorded
  $ 217,682       348,277             213,341       3,216  
     
 
                                       
Commercial non-real estate
  $ 18,306       18,306       9,850       19,649       15  
Commercial real estate
    338,494       462,579       62,986       337,375       2,584  
Small business
    20,280       21,077       2,936       19,933       694  
Consumer
    26,758       32,175       1,791       27,152       624  
Residential
    89,515       110,038       12,034       84,496       167  
     
Total
  $ 493,353       644,175       89,597       488,605       4,084  
     
          Impaired loans without specific valuation allowances represent loans that were written-down to the fair value of the collateral less cost to sell, loans in which the collateral value less cost to sell was greater than the carrying value of the loan, loans in which the present value of the cash flows discounted at the loan’s effective interest rate was equal to or greater than the carrying value of the loan, or large groups of smaller-balance homogeneous loans that are collectively measured for impairment.
          BankAtlantic Bancorp monitors collateral dependent loans and performs an impairment analysis on these loans quarterly. Generally, a full appraisal is obtained when a real estate loan is evaluated for impairment and an updated full appraisal is obtained within one year from the prior appraisal date, or earlier if management deems it appropriate based on significant changes in market conditions. In instances where a property is in the process of foreclosure, an updated appraisal may be postponed beyond one year, as an appraisal is required on the date of foreclosure; however, such loans are subject to quarterly impairment analyses. Included in total impaired loans as of March 31, 2011 was $299.6 million of collateral dependent loans, of which $162.0 million were measured for impairment using current appraisals and $137.6 million were measured by adjusting appraisals greater than six months old, as appropriate, to reflect changes in market conditions subsequent to the last appraisal date. Appraised values were adjusted down by an aggregate amount of $18.3 million to reflect current market conditions with respect to 36 loans which did not have current appraisals due to estimated property value declines since the last appraisal dates.

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          As of March 31, 2011, impaired loans with specific valuation allowances had been previously written down by $47.8 million and impaired loans without specific valuation allowances had been previously written down by $92.7 million. BankAtlantic had commitments to lend $13.4 million of additional funds on impaired loans as of March 31, 2011.
          Credit Quality Information
          Management of BankAtlantic Bancorp monitors net charge-offs levels of classified loans, impaired loans and general economic conditions nationwide and in Florida in an effort to assess loan credit quality. BankAtlantic Bancorp uses a risk grading matrix to monitor credit quality for commercial and small business loans. Risk grades are assigned to each commercial and small business loan upon origination. The loan officers monitor the risk grades and these risk grades are reviewed periodically by a third party consultant. BankAtlantic Bancorp assigns risk grades on a scale of 1 to 13. A general description of the risk grades is as follows:
          Grades 1 to 7 — The loans in these risk grades are generally well protected by the current net worth and paying capacity of the borrower or guarantors or by the fair value, less cost to sell, of the underlying collateral.
          Grades 8 to 9 — Not used
          Grade 10 — These loans are considered to have potential weaknesses that deserve management’s close attention. While these loans do not expose BankAtlantic Bancorp to immediate risk of loss, if left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan.
          Grade 11 — These loans are considered to be inadequately protected by the current sound net worth and paying capacity of the borrower or guarantors or by the collateral pledged, if any. Loans in this grade have well-defined weaknesses that jeopardize the liquidation of the loan and there is a distinct possibility that BankAtlantic Bancorp may sustain some credit loss if the weaknesses are not corrected.
          Grade 12 — These loans are considered to have all the weaknesses of a Grade 11 with the added characteristic that the weaknesses make collection of BankAtlantic Bancorp’s investment in the loan highly questionable and improbable on the basis of currently known facts, conditions and fair values of the collateral.
          Grade 13 — These loans, or portions thereof, are considered uncollectible and of such little value that continuance on the BankAtlantic Bancorp’s books as an asset is not warranted without the establishment of a specific valuation allowance or a charge-off. Such loans are generally charged down or completely charged off.
          The following table presents risk grades for commercial and small business loans as of March 31, 2011 and December 31, 2010 (in thousands):
                                                         
    Commercial                   Owner Occupied   Other   Small   Small
    Non-   Commercial   Commercial   Commercial   Commercial   Business   Business
March 31, 2011   Real Estate   Residential   Land   Real Estate   Real Estate   Real Estate   Non-Real Estate
     
Grade:
                                                       
Grades 1 to 7
  $ 80,374       2,353       22,190       94,569       278,162       169,250       80,864  
Grade 10
    11,743       7,441             701       124,154       3,085       3,548  
Grade 11
    40,339       110,894       22,598       10,915       189,861       28,059       11,410  
     
Total
  $ 132,456       120,688       44,788       106,185       592,177       200,394       95,822  
     
                                                         
    Commercial                   Owner Occupied   Other   Small   Small
    Non   Commercial   Commercial   Commercial   Commercial   Business   Business
December 31, 2010   Real Estate   Residential   Land   Real Estate   Real Estate   Real Estate   Non-Real Estate
     
Risk Grade:
                                                       
Grades 1 to 7
  $ 81,789       16,250       27,387       101,855       314,402       169,979       84,584  
Grade 10
    12,827       7,572       956       704       119,508       3,098       3,665  
Grade 11
    40,972       118,994       29,697       8,538       178,545       30,402       10,941  
     
Total
  $ 135,588       142,816       58,040       111,097       612,455       203,479       99,190  
     
There were no loans risk graded 12 or 13 as of March 31, 2011 and December 31, 2010.

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          BankAtlantic Bancorp monitors the credit quality of residential loans through loan-to-value ratios of the underlying collateral. Elevated loan-to-value ratios indicate the likelihood of increased credit losses upon default which results in higher loan portfolio credit risk.
          The loan-to-value ratios of BankAtlantic Bancorp’s residential loans were as follows (in thousands):
                                 
                    As Corrected (3)  
    As of March 31, 2011     As of December 31, 2010  
    Residential     Residential     Residential     Residential  
Loan-to-value ratios (1)   Interest Only     Amortizing     Interest Only     Amortizing  
Ratios not available (2)
  $ 50,085       178,820       59,520       185,610  
=<60%
    41,122       127,192       47,605       145,075  
60.1% - 70%
    29,140       45,496       33,005       49,732  
70.1% - 80%
    33,881       42,833       37,808       48,586  
80.1% - 90%
    42,520       43,390       47,574       47,039  
>90.1%
    297,316       190,028       324,734       197,743  
 
                       
Total
  $ 494,064       627,759       550,246       673,785  
 
                       
 
(1)   Current loan-to-value ratios (“LTV”) for the majority of the portfolio were obtained as of the first quarter of 2010 based on automated valuation models.
 
(2)   Ratios not available consisted of property addresses not in the automated valuation database, and $77.3 million and $78.0 million as of March 31, 2011 and December 31, 2010, respectively, of loans originated under the community reinvestment act program that are not monitored based on loan-to-value.
 
(3)   The principal amount of BankAtlantic Bancorp’s residential loans set forth in the table in Note 10 to the Company’s financial statements in the Company’s Form 10-K for the year ended December 31, 2010 were incorrectly identified as reflecting loan-to-value ratios obtained as of the first quarter of 2010 when in fact the amounts instead reflected loan-to-value ratios as of the date of loan origination. The above table labeled “As Corrected” reflects loan-to-value ratios as of December 31, 2010 based on first quarter of 2010 valuations.
          BankAtlantic Bancorp monitors the credit quality of its portfolio of consumer loans secured by real estate utilizing loan-to-value ratios at origination. BankAtlantic Bancorp’s experience indicates that default rates are significantly lower with loans that have lower loan to value ratios at origination.
          The loan-to-value ratio at loan origination of consumer loans secured by real estate were as follows (in thousands):
                 
    March 31,     December 31,  
    2011     2010  
    Consumer     Consumer  
    Home     Home  
Loan-to-value ratios   Equity     Equity  
<70%
  $ 359,593       363,653  
70.1% - 80%
    103,181       106,180  
80.1% - 90%
    69,233       72,529  
90.1% -100%
    45,957       48,537  
>100%
    12,807       13,329  
 
           
Total
  $ 590,771       604,228  
 
           
          BankAtlantic Bancorp monitors the credit quality of its consumer non-real estate loans based on loan delinquencies.

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9. Notes Receivable
          The table below sets forth information relating to Bluegreen’s notes receivable (in thousands):
                 
    March 31,     December 31,  
    2011     2010  
Notes receivable, gross
  $ 681,960       712,145  
Purchase accounting adjustment
    (39,138 )     (43,778 )
 
           
Notes receivable, net of discount
    642,822       668,367  
Allowance for loan losses
    (86,370 )     (93,398 )
 
           
Notes receivable, net
  $ 556,452       574,969  
 
           
          Included in the table above are notes acquired through our November 2009 acquisition of approximately 7.4 million shares giving us a controlling interest in Bluegreen. In accordance with applicable accounting guidance “Loans and Debt Securities Acquired with Deteriorated Credit Quality”, the Company has elected to recognize interest income on these notes receivable using the expected cash flows method. The Company treated expected prepayments consistently in determining its cash flows which it anticipates to collect, such that the non-accretable difference is not affected and the difference between actual prepayments and expected prepayments shall not affect the non-accretable difference. The assumption for prepayment rates was derived from Bluegreen’s historical performance information for its off-balance sheet securitizations and ranges from 4% to 9%. As of March 31, 2011 and December 31, 2010, the outstanding contractual unpaid principal balance of the acquired notes was $234.9 million and $250.6 million, respectively. As of March 31, 2011 and December 31, 2010, the carrying amount of the acquired notes was $195.8 million and $206.9 million, respectively.
          The carrying amount of the acquired notes is included in the balance sheet amounts of notes receivable at March 31, 2011 and December 31, 2010. The following is a reconciliation of accretable yield as of March 31, 2011 and December 31, 2010:
          Accretable Yield
                 
    March 31,     December 31,  
    2011     2010  
Balance at beginning of period
  $ 85,906       102,665  
Accretion
    (11,076 )     (29,065 )
Reclassification from nonaccretable yield
    8,200       12,306  
 
           
Balance, at end of period
  $ 83,030       85,906  
 
           
          All of Bluegreen’s vacation ownership interests (“VOIs”) notes receivable, which comprise the majority of the notes receivable, bear interest at fixed rates. The weighted-average interest rate charged on loans secured by VOIs was 15.3% and 15.2% at March 31, 2011 and December 31, 2010, respectively. The majority of Bluegreen’s notes receivable secured by home sites bear interest at variable rates. The weighted-average interest rate charged on notes receivable secured by home sites was 7.8% at March 31, 2011 and December 31, 2010.
          Bluegreen’s VOI notes receivable are generally secured by properties located in Florida, Louisiana, Nevada, New Jersey, Michigan, Missouri, Pennsylvania, South Carolina, Tennessee, Virginia, Wisconsin, and Aruba. The majority of Bluegreen Communities notes receivables are secured by home sites in Georgia, Texas, and Virginia.
          Allowance for uncollectible notes receivable
          The table below sets forth the activity in the allowance for uncollectible notes receivable during the three months ended March 31, 2011 (in thousands):
         
Balance at December 31, 2010 (a)
  $ 93,398  
Provision for loan losses
    4,664  
Write-offs of uncollectible receivables
    (11,692 )
 
     
Balance at March 31, 2011
  $ 86,370  
 
     
 
(a)   Allowance for uncollectible notes receivable represents the amount attributable to new loan originations subsequent to the date of our acquisition of a controlling interest in Bluegreen (November 16, 2009).

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          Bluegreen holds large amounts of homogeneous VOI notes receivable and assesses uncollectibility based on pools of receivables. In estimating future credit losses, Bluegreen does not use a single primary indicator of credit quality but instead evaluates its VOI notes based upon a combination of factors including a static pool analysis, the aging of the respective receivables, current default trends, prepayment rates by origination year, and the FICO scores of the buyers.
          The following table shows the aging of Bluegreen’s VOI notes receivable as of March 31, 2011 and December 31, 2010 (dollars in thousands):
                 
    March 31,     December 31,  
    2011     2010  
Current
  $ 630,834       655,304  
31-60 days
    9,138       12,063  
61-90 days
    7,216       10,228  
Over 91 days
    28,403       27,785  
Purchase accounting adjustment
    (39,138 )     (43,778 )
 
           
Notes receivable, net of purchase accounting adjustment
    636,453       661,602  
Allowance for loan losses
    (86,370 )     (93,398 )
 
           
Notes receivable, net
  $ 550,083       568,204  
 
           
10. Variable Interest Entities — Bluegreen
          In accordance with the guidance for the consolidation of variable interest entities, Bluegreen analyzes its variable interests, including loans, guarantees, and equity investments, to determine if an entity in which it has a variable interest is a variable interest entity. Bluegreen’s analysis includes both quantitative and qualitative reviews. Bluegreen bases its quantitative analysis on the forecasted cash flows of the entity, and it bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability, and relevant financial agreements. Bluegreen also uses qualitative analyses to determine if it must consolidate a variable interest entity as the primary beneficiary.
          Bluegreen sells through special purpose finance entities, VOI notes receivable originated by Bluegreen Resorts. These transactions are generally structured as non-recourse to Bluegreen, with the exception of one securitization transaction entered into in 2010, which was guaranteed by Bluegreen. These transactions are generally designed to provide liquidity for Bluegreen and transfer the economic risks and certain of the benefits of the notes receivable to third parties. In a securitization, various classes of debt securities are issued by the special purpose finance entities that are generally collateralized by a single tranche of transferred assets, which consist of VOI notes receivable. Bluegreen services the notes receivable for a fee. With each securitization, Bluegreen generally retains a portion of the securities. In accordance with applicable accounting guidance currently in effect, we consolidate these entities into our financial statements as we are the primary beneficiary of the entities.
          During the quarter ended March 31, 2011, Bluegreen transferred $5.1 million of VOI notes receivable to the VIEs and received cash proceeds of $3.6 million. At March 31, 2011, the principal balance of VOI notes receivable included within the Company’s Consolidated Statement of Financial Condition that are restricted to satisfy obligations of the variable interest entities’ obligations totaled $505.5 million. In addition, approximately $38.7 million of restricted cash is held in accounts for the benefit of the variable interest entities. Further, at March 31, 2011, the carrying amount of the consolidated liabilities included within the Company’s Consolidated Statement of Financial Condition for these variable interest entities totaled $430.4 million, comprised of $409.6 million of non-recourse receivable-backed notes payable and $20.8 million of receivable-backed notes payable which is recourse to Bluegreen.
          Under the terms of certain of Bluegreen’s timeshare note sales, Bluegreen has the right at its option to repurchase or substitute for a limited amount of defaulted mortgage notes at the outstanding principal balance plus accrued interest or, in some facilities, at 24% of the original sale price associated with the VOI which collateralizes the defaulted mortgage note. Voluntary repurchases or substitutions by Bluegreen of defaulted notes during the three months ended March 31, 2011 and 2010 were $8.1 million and $14.1 million, respectively.

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11. Real Estate Inventory
          Real estate inventory consisted of the following (in thousands):
                 
    March 31,     December 31,  
    2011     2010  
Land and land development costs
  $ 107,574       107,161  
Bluegreen Resorts
    223,717       230,346  
Other costs
    461       554  
Land and facilities held for sale
    5,436       5,436  
 
           
Total
  $ 337,188       343,497  
 
           
          Inventory consisted of the combined real estate assets of Bluegreen Resorts, Bluegreen Communities, Carolina Oak, Core Communities, BankAtlantic’s residential construction development acquired in 2002, and BankAtlantic land and facilities held for sale for BankAtlantic’s store expansion program. During the fourth quarter of 2010, Core relinquished to its lenders title to substantially all of the land Core owned in both Florida and South Carolina and conveyed its ownership interests in several of its subsidiaries. During February 2011, Core was released from any other claims arising from or relating to the loans. See Note 2 for additional information. Land and land development costs include $19.4 million related to certain assets within Core’s South Carolina property which are subject to separate foreclosure proceedings that are not expected to begin until later in the first half of 2011.
          As a result of Bluegreen’s continued low volume of homesite sales, reduced prices, and the impact of depressed sales levels on the forecasted sell-out period of its Bluegreen Communities projects, the Company recorded non-cash charges to cost of real estate sales of approximately $3.0 million, net of purchase accounting adjustments, during the first quarter of 2010, to write-down the inventory balances of certain phases of Bluegreen’s Communities properties to their estimated fair value less costs to sell.
          Bluegreen’s estimates the fair value of the underlying properties based on either the prices of comparable properties or our analysis of their estimated future cash flows (Level 3 inputs), discounted at rates commensurate with the risk inherent in the property. Bluegreen estimates future cash flows based upon its expectations of performance given current and projected forecasts of the economy and real estate markets in general. Should adverse conditions in the real estate market continue longer than forecasted or deteriorate further or if Bluegreen’s performance does not meet the expectations on which its estimates were based, or if Bluegreen otherwise determines based on information available that the carrying value of the assets exceed their fair value, additional charges may be recorded in the future.
12. Debt
Woodbridge
          Effective April 26, 2011, Woodbridge and Carolina Oak entered into a settlement agreement with an investor group to resolve the disputes and litigation between them relating to an approximately $37.2 million loan which was collateralized by property owned by Carolina Oak. See Note 2 for additional information regarding the settlement agreement.
Core
          During November 2010, Core entered into a settlement agreement with one of its lenders, which had previously commenced actions seeking foreclosure of mortgage loans totaling approximately $113.9 million collateralized by property in Florida and South Carolina. In December 2010, Core and one of its subsidiaries entered agreements, including without limitation, a Deed in Lieu of Foreclosure Agreement, with one of their lenders which resolved the foreclosure proceedings commenced by the lender related to property at Tradition Hilton Head which served as collateral for a $25 million loan. See Note 2 for additional information regarding these settlement agreements.

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          Approximately $27.2 million of the $113.9 million of mortgage loans described in the first sentence of the previous paragraph is collateralized by property in South Carolina which had an estimated carrying value of approximately $19.4 million at March 31, 2011. This property is subject to separate foreclosure proceedings which are not expected to begin until later in the first half of 2011. While Core was released by the lender from any other claims relating to the loans, the applicable accounting guidance requires that the $27.2 million of debt and associated $19.4 million of collateral remain in Core’s financial statements until the foreclosure proceedings have been completed.
Bluegreen
          Bluegreen’s pledged assets under its facilities and notes payable as of March 31, 2011 and December 31, 2010 had a carrying amount before purchase accounting adjustments of approximately $131.5 million and $142.1 million, respectively.
Significant changes related to Bluegreen’s lines-of credit and notes payable since December 31, 2010 include:
RFA AD&C Facility. During the first quarter of 2011, Bluegreen repaid $4.6 million of the outstanding balance under this facility, including the repayment in full of a loan collateralized by Bluegreen’s Fountains Resort in Orlando, Florida.
H4BG Communities Facility. During the first quarter of 2011, Bluegreen repaid $1.7 million of the outstanding balance under this facility.
Wells Fargo Term Loan. During the first quarter of 2011, Bluegreen repaid $3.3 million of the outstanding balance under this facility.
Receivable-Backed Notes Payable
          Bluegreen’s pledged receivables under its receivable-backed notes payable as of March 31, 2011 and December 31, 2010 had a principal balance before purchase accounting adjustments of approximately $538.7 million and $571.9 million, respectively.
2011 Liberty Bank Facility. In February 2011, Bluegreen entered into a new revolving hypothecation facility with certain participants in our 2008 Liberty Bank Facility. This new $60.0 million facility (“2011 Liberty Bank Facility”) provides for an 85% advance on eligible receivables pledged under the facility during a two-year period ending in February 2013, subject to eligible collateral and terms and conditions Bluegreen believes to be customary for transactions of this type. Availability under the 2011 Liberty Bank Facility is reduced by amounts currently outstanding to certain syndicate participants under the 2008 Liberty Bank Facility ($45.4 million as of March 31, 2011), but as outstanding amounts on the 2008 Liberty Bank facility amortize over time, the 2011 Liberty Bank Facility will revolve up to $60.0 million. Principal and interest are repaid as cash is collected on the pledged receivables, with the remaining balance due in February 2016.
Indebtedness under the 2011 Liberty Bank Facility bears interest at the Prime Rate plus 2.25%, subject to a floor of 6.5%.
During the first quarter of 2011, Bluegreen pledged $6.6 million of VOI notes receivable to this facility and received cash proceeds of $5.6 million. Bluegreen also repaid $0.1 million on the facility.
NBA Receivables Facility. During the first quarter of 2011, Bluegreen repaid $1.6 million on this facility.
Bluegreen has received a term sheet related to a contemplated amendment to the facility which would allow Bluegreen to pledge additional timeshare receivables up to the $20 million borrowing limit, with the additional advances not to exceed $5.0 million. Bluegreen may not be successful in its efforts to enter into this amendment on the contemplated terms, or at all.
BB&T Purchase Facility. During the first quarter of 2011, Bluegreen pledged $3.7 million of VOI notes receivable to this facility and received cash proceeds of $2.5 million.

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Quorum Purchase Facility. During the first quarter of 2011, Bluegreen pledged $1.4 million of VOI notes receivable to this facility and received cash proceeds of $1.1 million.
Other Facilities. In addition to the payments on the above described facilities, during the first quarter of 2011 Bluegreen repaid $41.0 million on its other receivable-backed notes payable facilities.
Junior Subordinated Debentures
          As more fully disclosed under the caption Junior Subordinated Debentures in Note 23 “Debt” to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, some of the Company’s subsidiaries have formed statutory business trusts (collectively, the “Trusts”), each of which issued trust preferred securities and invested the proceeds thereof in its junior subordinated debentures. The Trusts are variable interest entities in which the Company’s subsidiaries are not the primary beneficiaries as defined by the accounting guidance for consolidation. Accordingly, the Company does not consolidate the operations of the Trusts; instead, the Trusts are accounted for under the equity method of accounting. Interest on the junior subordinated debentures and distributions on the trust preferred securities are payable quarterly in arrears at the same interest rate.
          On March 30, 2010, the interest rate on the securities issued by Levitt Capital Trust (“LCT”) I contractually changed from a fixed-rate of 8.11% to a variable rate equal to the 3-month LIBOR + 3.85% (4.15% as of March 31, 2011).
          On July 30, 2010, the interest rate on the securities issued by LCT II contractually changed from a fixed-rate of 8.09% to a variable rate equal to the 3-month LIBOR + 3.80% (4.10% as of March 31, 2011).
          On March 30, 2010, the interest rates on the securities issued by Bluegreen Statutory Trust (“BST”) I contractually changed from a fixed-rate of 9.160% to a variable rate equal to the 3-month LIBOR + 4.90% (5.20% as of March 31, 2011).
          On July 30, 2010, the interest rate on the securities issued by BST II and BST III contractually changed from a fixed- rate of 9.158% and 9.193%, respectively, to a variable rate equal to the 3-month LIBOR + 4.85% (5.15% as of March 31, 2011).
13. Interest Expense
          The following table is a summary of the Company’s consolidated interest expense and the amounts capitalized (in thousands):
                 
    For the Three Months Ended,  
    March 31,  
    2011     2010  
            As Revised  
Real Estate and Other:
               
Interest incurred on borrowings
  $ 18,690       21,329  
Interest capitalized
    (65 )     (71 )
 
           
 
    18,625       21,258  
 
           
Financial Services:
               
Interest on deposits
    4,398       7,087  
Interest on advances from FHLB
    115       958  
Interest on short term borrowings
    6       8  
Interest on debentures and bonds payable
    4,008       3,791  
 
           
 
    8,527       11,844  
 
           
Total interest expense
  $ 27,152       33,102  
 
           

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14. Noncontrolling Interests
          The following table summarizes the noncontrolling interests held by others in the Company’s subsidiaries at March 31, 2011 and December 31, 2010 (in thousands):
                 
    March 31,     December 31,  
    2011     2010  
BankAtlantic Bancorp
  $ (5,084 )     7,823  
Bluegreen
    46,176       44,362  
Joint ventures
    23,762       26,071  
 
           
 
  $ 64,854       78,256  
 
           
          The following table summarizes the noncontrolling interests (loss) earnings recognized by others with respect to the Company’s subsidiaries for the three months ended March 31, 2011 and 2010 (in thousands):
                 
    For the Three Months Ended  
    March 31,  
    2011     2010  
            (As Revised)  
Noncontrolling Interests — Continuing Operations
               
BankAtlantic Bancorp
  $ (12,694 )     (13,019 )
Bluegreen
    1,417       (1,493 )
Joint ventures
    1,562       1,192  
 
           
 
  $ (9,715 )     (13,320 )
 
           
15. Segment Reporting
          Operating segments are defined as components of an enterprise about which separate financial information is available that is regularly reviewed by the chief operating decision maker in assessing performance and deciding how to allocate resources. Reportable segments consist of one or more operating segments with similar economic characteristics, products and services, production processes, type of customer, distribution system or regulatory environment.
          The information provided for segment reporting is based on internal reports utilized by management of the Company and its subsidiaries. The presentation and allocation of assets and results of operations may not reflect the actual economic costs of the segments as standalone businesses. If a different basis of allocation were utilized, the relative contributions of the segments might differ but the relative trends in the segments’ operating results would, in management’s view, likely not be impacted.
          The Company’s business activities currently consist of (i) Real Estate and Other activities and (ii) Financial Services activities. These business activities are reported through six segments: BFC Activities, Real Estate Operations, Bluegreen Resorts, Bluegreen Communities, BankAtlantic and BankAtlantic Bancorp Parent Company.
          Bluegreen’s results of operations are reported through the Bluegreen Resorts and Bluegreen Communities segments. The Company’s Financial Services business activities include BankAtlantic Bancorp’s results of operations and are reported in two segments: BankAtlantic and BankAtlantic Bancorp Parent Company.
          The Company evaluates segment performance based on its segment net income (loss).
          The following summarizes the aggregation of the Company’s operating segments into reportable segments:
BFC Activities
          The BFC Activities segment consists of BFC operations, dividends from our investment in Benihana, and other operations of Woodbridge described below. BFC operations primarily consist of our corporate overhead and general and administrative expenses, including the expenses of Woodbridge, the financial results of a venture

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partnership that BFC controls and other equity investments, as well as income and expenses associated with BFC’s shared service operations which provides human resources, risk management, investor relations and executive office administration services to BankAtlantic Bancorp and Bluegreen. This segment also includes investments made by our wholly owned subsidiary, BFC/CCC, Inc. (“BFC/CCC”). Woodbridge’s other operations include the activities of Pizza Fusion Holdings, Inc., a restaurant operator and franchisor engaged in the quick service and organic food industries, and Snapper Creek Equity Management, LLC, as well as certain other investments.
Real Estate Operations
          The Company’s Real Estate Operations segment is comprised of the operations of Woodbridge and the subsidiaries through which Woodbridge historically conducted its real estate business activities. It currently includes the operations of Carolina Oak, which engaged in homebuilding activities in South Carolina prior to the suspension of those activities in the fourth quarter of 2008, and Cypress Creek Holdings, LLC (“Cypress Creek Holdings”), which engages in leasing activities. The Real Estate Operations segment also includes the business activities of Core, certain subsidiaries of which were deconsolidated from our financial statements during the fourth quarter of 2010.
Bluegreen Resorts
          Bluegreen Resorts markets, sells and manages real estate-based VOIs in resorts generally located in popular, high-volume, “drive-to” vacation destinations, which were developed or acquired by Bluegreen or developed by others. Bluegreen also earn fees from third-party resort developers and timeshare owners for providing services such as sales and marketing, mortgage servicing, construction management, title, and resort management.
Bluegreen Communities
          Bluegreen Communities acquires, develops and subdivides property and markets residential land homesites. The majority of these homesites are sold directly to retail customers who seek to build a home, in some cases on properties featuring a golf course and related amenities. On March 24, 2011, Bluegreen announced that it has engaged advisors to explore strategic alternatives for Bluegreen Communities, including a possible sale of the division. However, Bluegreen may not elect to pursue any of the strategic alternatives it may consider and any such alternatives, if pursued may not ultimately be consummated, or if consummated, may not result in improvements to its financial condition and operating results or otherwise achieve the benefits Bluegreen expects to realize from the transaction.
          Beginning in January 1, 2011, Bluegreen modified its measure of segment operating profit (loss) to include certain bank-related charges, which were previously reported as corporate general and administrative expenses. In connection with this modification, Bluegreen revised the prior period’s presentation to be comparable with the current period, which increased Bluegreen Resorts’ segment operating loss by $0.4 million for the three months ended March 31, 2010 from the amounts previously reported.
BankAtlantic
          The Company’s BankAtlantic segment consists of the banking operations of BankAtlantic. BankAtlantic activities consist of retail banking services delivered through a network of branches located in Florida.
BankAtlantic Bancorp Parent Company
          The BankAtlantic Bancorp Parent Company segment consists of the operations of BankAtlantic Bancorp Parent Company, including financing activities, capital management and costs of acquisitions.

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          The tables below set forth the Company’s segment information as of and for the three months ended March 31, 2011 and 2010 (in thousands):
                                                                 
                                            BankAtlantic     Unallocated        
                                            Bancorp     Amounts        
    BFC     Real estate     Bluegreen     Bluegreen             Parent     and     Segment  
2011   Activities     Operations     Resorts     Communities     BankAtlantic     Company     Eliminations     Total  
Revenues:
                                                               
Sales of real estate
  $             36,334       5,289                         41,623  
Other resorts and communities operations revenue
                17,200       434                         17,634  
Other revenues
    271       17       10,764                         (17 )     11,035  
Interest income
                            39,420       89       22,988       62,497  
Financial Services — non-interest income
                            22,913       209       (396 )     22,726  
 
                                               
Total revenues
    271       17       64,298       5,723       62,333       298       22,575       155,515  
 
                                               
Costs and Expenses:
                                                               
Cost of sale of real estate
                7,225       2,450                         9,675  
Cost of sale of other resorts and communities operations
                13,081       886                         13,967  
Interest expense
    1,361       1,402                   4,716       3,784       15,889       27,152  
Provision/(reversal of provision) for loan losses
                            27,832       (20 )           27,812  
Selling, general and administrative
    5,376       489       32,530       2,407                   10,996       51,798  
Other expenses
                            46,154       3,432       (286 )     49,300  
 
                                               
Total costs and expenses
    6,737       1,891       52,836       5,743       78,702       7,196       26,599       179,704  
 
                                               
Gain on settlement of investment in Woodbridge’s subsidiary
          11,305                                     11,305  
Equity in earnings from unconsolidated affiliates
    1,361                               381       35       1,777  
Other income
    1,318                                     (744 )     574  
 
                                               
(Loss) income from continuing operations before income taxes
    (3,787 )     9,431       11,462       (20 )     (16,369 )     (6,517 )     (4,733 )     (10,533 )
Less: Provision (benefit) for income taxes
    (144 )                       1             1,936       1,793  
 
                                               
(Loss) income from continuing operations
    (3,643 )     9,431       11,462       (20 )     (16,370 )     (6,517 )     (6,669 )     (12,326 )
 
                                               
Net (loss) income
  $ (3,643 )     9,431       11,462       (20 )     (16,370 )     (6,517 )     (6,669 )     (12,326 )
 
                                                   
Less: Net loss attributable to noncontrolling interests
                                                    (9,715 )     (9,715 )
 
                                                           
Net loss attributable to BFC
                                                  $ 3,046       (2,611 )
 
                                               
Total assets
  $ 90,352       36,539       839,564       89,836       4,424,566       317,860       (73,265 )     5,725,452  
 
                                               

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                                            BankAtlantic     Unallocated        
                                            Bancorp     Amounts        
    BFC     Real estate     Bluegreen     Bluegreen             Parent     and     Segment  
    Activities     Operations     Resorts     Communities     BankAtlantic     Company     Eliminations     Total  
2010   (As Revised)     (As Revised)     (As Revised)     (As Revised)                     (As Revised)     (As Revised)  
Revenues:
                                                               
Sales of real estate
  $             24,606       3,246                         27,852  
Other resorts and communities operations revenue
                15,670       351                         16,021  
Other real estate revenues
    387       637       10,180                         (17 )     11,187  
Interest income
                            47,715       78       24,508       72,301  
Financial Services — non-interest income
                            28,257       269       (436 )     28,090  
 
                                               
Total revenues
    387       637       50,456       3,597       75,972       347       24,055       155,451  
 
                                               
Costs and Expenses:
                                                               
Cost of sale of real estate
                2,735       5,368                         8,103  
Cost of sale of other revenues
                11,943       747                         12,690  
Interest expense
    1,838       3,310                   8,256       3,563       16,135       33,102  
Provision for loan losses
                            32,034       (1,279 )           30,755  
Selling, general and administrative
    6,487       2,659       29,432       2,624                   12,902       54,104  
Other expenses
                            52,721       1,644       (355 )     54,010  
 
                                               
Total costs and expenses
    8,325       5,969       44,110       8,739       93,011       3,928       28,682       192,764  
 
                                               
Earnings in earnings from unconsolidated affiliates
    (31 )                             189       35       193  
Other income
    1,394       53                                       (1,009 )     438  
 
                                               
Income (Loss) from continuing operations before income taxes
    (6,575 )     (5,279 )     6,346       (5,142 )     (17,039 )     (3,392 )     (5,601 )     (36,682 )
Less: Provision (benefit) for income taxes
    (1,167 )                       90             (2,754 )     (3,831 )
 
                                               
(Loss) income from continuing operations
    (5,408 )     (5,279 )     6,346       (5,142 )     (17,129 )     (3,392 )     (2,847 )     (32,851 )
Loss from discontinued operations
          (249 )                                   (249 )
 
                                               
Net (loss) income
  $ (5,408 )     (5,528 )     6,346       (5,142 )     (17,129 )     (3,392 )     (2,847 )     (33,100 )
 
                                                   
Less: Net loss attributable to noncontrolling interests
                                                    (13,320 )     (13,320 )
 
                                                           
Net loss attributable to BFC
                                                  $ 10,473       (19,780 )
 
                                               
Total assets
  $ 117,380       255,510       914,345       105,457       4,688,001       432,225       (162,352 )     6,350,566  
 
                                               

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16. Commitments and Contingencies
BFC
          At June 30, 2009, a wholly-owned subsidiary of BFC/CCC had a 10% interest in a limited partnership as a non-managing general partner. The partnership owns an office building located in Boca Raton, Florida. In connection with the purchase of the office building in March 2006, BFC/CCC guaranteed repayment of a portion of the non-recourse loan on the property on a joint and several basis with the managing general partner. BFC/CCC’s maximum exposure under this guarantee agreement was $2.0 million (which was shared on a joint and several basis with the managing general partner). In July 2009, BFC/CCC’s wholly-owned subsidiary withdrew as a partner of the limited partnership and transferred its 10% interest to an unaffiliated partner. In return, the partner to whom this interest was assigned agreed to use its reasonable best efforts to obtain the release of BFC/CCC from the guarantee. The partner was unable to secure such a release and that partner has agreed to indemnify BFC/CCC’s wholly-owned subsidiary for any losses that may arise under the guarantee after the date of the assignment. No amounts are recorded in our financial statements at March 31, 2011 or December 31, 2010 for this joint venture.
          A wholly-owned subsidiary of BFC/CCC had a 10% interest in a limited liability company that owned two commercial properties in Hillsborough County, Florida which served as collateral for an approximately $26.0 million loan to the limited liability company. In connection with the purchase of the commercial properties in November 2006, BFC and the unaffiliated member of the limited liability company each guaranteed the payment of up to a maximum of $5.0 million for certain environmental indemnities and specific obligations that were not related to the financial performance of the properties. BFC and the unaffiliated member also entered into a cross indemnification agreement which limited BFC’s obligations under the guarantee to acts of BFC and its affiliates. On March 25, 2011, the limited liability company reached a settlement with its lender, pursuant to which it has conveyed the commercial properties securing the loan via a deed in lieu of foreclosure. BFC and BFC/CCC’s wholly-owned subsidiary were released from all obligations and guarantees related to the two commercial properties. As of March 31, 2011, BFC recognized the negative basis of its investment of approximately $1.3 million which is included in earnings from unconsolidated affiliates.
          A wholly-owned subsidiary of BFC/CCC has a 50% limited partner interest in a limited partnership that has a 10% interest in a limited liability company that owns an office building in Tampa, Florida. At March 31, 2011 and December 31, 2010, the carrying amount of this investment was approximately $278,000 and $282,000, respectively, which is included in investments in unconsolidated affiliates in the Company’s Consolidated Statements of Financial Condition. In connection with the purchase of the office building by the limited liability company in June 2007, BFC guaranteed the payment of certain environmental indemnities and specific obligations that are not related to the financial performance of the asset up to a maximum of $15.0 million, or $25.0 million in the event of any petition or involuntary proceeding under the U.S. Bankruptcy Code or similar state insolvency laws or in the event of any transfer of interests not in accordance with the loan documents. BFC and the unaffiliated members also entered into a cross indemnification agreement which limits BFC’s obligations under the guarantee to acts of BFC and its affiliates. No amounts are recorded in the Company’s financial statements at March 31, 2011 or December 31, 2010 for the obligations associated with this guarantee based on the potential indemnification by unaffiliated members and the limit of the specific obligations to non-financial matters.
          Based on the current accounting guidance associated with the consolidation of variable interest entities implemented on January 1, 2010, we are not deemed the primary beneficiaries in connection with the above mentioned BFC/CCC investments and do not consolidate these entities into our financial statements. We do not have the power to direct the activities that can significantly impact the performance of these entities.
Woodbridge
          Levitt and Sons, Woodbridge’s former wholly-owned homebuilding subsidiary, had approximately $33.3 million of surety bonds related to its ongoing projects at November 9, 2007, the date on which Levitt and Sons and substantially all of its subsidiaries filed voluntary bankruptcy petitions (the “Chapter 11 Cases”). In the event that these obligations are drawn and paid by the surety, Woodbridge could be responsible for up to $7.6 million plus costs and expenses in accordance with the surety indemnity agreements executed by Woodbridge. At both March 31, 2011 and December 31, 2010, Woodbridge had $490,000 in surety bond accruals related to certain bonds where management believes it to be probable that Woodbridge will be required to reimburse the surety under applicable indemnity agreements. It is unclear whether and to what extent the remaining outstanding surety bonds of Levitt and Sons will be drawn and the extent to which Woodbridge may be responsible for additional amounts beyond the

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previous accrued amount. Woodbridge will not receive any repayment, assets or other consideration as recovery of any amounts it may be required to pay. In September 2008, a surety filed a lawsuit to require Woodbridge to post collateral against a portion of surety bond exposure in connection with demands made by a municipality. Based on claims by the municipality on the bonds, the surety requested that Woodbridge post a $4.0 million escrow deposit while the matter was being litigated with the municipality. While Woodbridge did not believe that the municipality had the right to demand payment under the bonds, Woodbridge complied with that request. In August 2010, a motion for summary judgment was entered in Woodbridge’s favor terminating any obligations under the bonds. The municipality has appealed the decision.
          On February 20, 2009, the Bankruptcy Court presiding over the Chapter 11 Cases entered an order confirming a plan of liquidation jointly proposed by Levitt and Sons and the Official Committee of Unsecured Creditors. That order also approved the settlement pursuant to the settlement agreement that was entered into with the Joint Committee of Unsecured Creditors (the “Settlement Agreement”). No appeal or rehearing of the Bankruptcy Court’s order was filed by any party, and the settlement was consummated on March 3, 2009, at which time payment was made in accordance with the terms and conditions of the settlement agreement as amended. Under cost method accounting, the cost of settlement and the related $52.9 million liability (less $500,000 which was determined as the settlement holdback and remained as an accrual pursuant to the settlement agreement) was recognized into income in the first quarter of 2009, resulting in a $40.4 million gain on settlement of investment in subsidiary. Pursuant to the settlement agreement, we agreed to share a percentage of any tax refund attributable to periods prior to the bankruptcy with the Debtors Estate. In the fourth quarter of 2009, we accrued approximately $10.7 million in connection with the portion of the tax refund which may be payable to the Debtors Estate pursuant to the settlement agreement. As a result, the gain on settlement of investment in subsidiary for the year ended December 31, 2009 was reduced to $29.7 million. Additionally, in the second quarter of 2010, we increased the $10.7 million accrual by approximately $1.0 million, representing a portion of an additional tax refund which we expect to receive due to a recent change in Internal Revenue Service (“IRS”) guidance that will likely be required to be paid to the Debtors Estate pursuant to the Settlement Agreement. We have placed into escrow approximately $8.4 million, which represents the portion of the tax refund received to date from the Internal Revenue Service that would be payable to the Debtors Estate under the Settlement Agreement.
          See also Note 2 above for a discussion of the pending appraisal rights litigation relating to the merger between BFC and Woodbridge and Note 20 below for a description of certain material developments relating to litigation and legal proceedings to which BFC and Woodbridge are currently subject.
Bluegreen
          In the ordinary course of its business, Bluegreen becomes subject to claims or proceedings from time to time relating to the purchase, subdivision, sale or financing of real estate (including VOIs). Additionally, from time to time, Bluegreen becomes involved in disputes with existing and former employees, vendors, taxing jurisdictions and various other parties. From time to time in the ordinary course of business, Bluegreen also received individual consumer complaints, as well as complaints received through regulatory and consumer agencies, including Offices of State Attorney Generals. We take these matters seriously and attempt to resolve any such issues as they arise. Unless otherwise described below, Bluegreen believes that these claims are routine litigation incidental to its business.
Destin, Florida Deposit Dispute Lawsuit
In Cause No. 2006-Ca-3374, styled Joseph M. Scheyd, Jr., P.A. vs. Bluegreen Vacations Unlimited, Inc.; Hubert A. Laird; and MSB of Destin, Inc., in the Circuit Court of the First Judicial Circuit in and for Okaloosa County, Florida, the Plaintiff as escrow agent brought an interpleader action seeking a determination as to whether Bluegreen, as purchaser, or Hubert A. Laird and MSB of Destin, Inc. as seller, were entitled to the $1.4 million escrow deposit being maintained with the escrow agent pursuant to a purchase and sale contract for real property located in Destin, Florida. Both Bluegreen and the seller brought cross-claims for breach of the underlying purchase and sale contract. The seller’s complaint, as amended, includes a fraud allegation, contends that Bluegreen failed to perform under the terms of the purchase and sale contract and claims entitlement to the full amount in escrow. Bluegreen maintains its decision not to close on the purchase of the property was proper under the terms of the purchase and sale contract and therefore is entitled to a return of the full escrow deposit. A trial date of May 31, 2011 has been set for this matter. Bluegreen believes the seller’s allegations are without merit and intends to vigorously defend this claim.

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Inquiry into Consumer Matters by the Office of the Florida Attorney General
          The Office of the Attorney General for the State of Florida (the “AGSF”) has advised Bluegreen that it has accumulated a number of consumer complaints since 2005 against Bluegreen and/or its affiliates related to Bluegreen’s timeshare sales and marketing, and has requested that Bluegreen respond on a collective basis as to how Bluegreen has or would resolve the complaints. The AGSF has also requested that Bluegreen enter into a written agreement in which to establish a process and timeframe for determining consumer eligibility for relief (including, where applicable, monetary restitution). Bluegreen has determined that many of these complaints were previously addressed and/or resolved by Bluegreen. Bluegreen does not believe this matter will have a material effect on its results of operations, financial condition or on its sales and marketing activities in Florida.
Mountain Lakes Mineral Rights
          Bluegreen Southwest One, L.P. (“Southwest”), a subsidiary of Bluegreen Corporation, is the developer of the Mountain Lakes subdivision in Texas. In Cause No. 28006, styled Betty Yvon Lesley et a1. v. Bluff Dale Development Corporation, Bluegreen Southwest One. L.P. et al., in the 266th Judicial District Court, Erath County, Texas, the plaintiffs filed a declaratory judgment action against Southwest seeking to develop their reserved mineral interests in, on and under the Mountain Lakes subdivision. The plaintiffs’ claims are based on property law, oil and gas law, contract and tort theories. The property owners association and some of the individual landowners have filed cross actions against Bluegreen, Southwest and individual directors of the property owners association related to the mineral rights and certain amenities in the subdivision as described below. On January 17, 2007, the court ruled that the restrictions placed on the development that prohibited oil and gas production and development were invalid and not enforceable as a matter of law, that such restrictions did not prohibit the development of the plaintiffs’ prior reserved mineral interests and that Southwest breached its duty to lease the minerals to third parties for development. The court further ruled that Southwest was the sole holder of the right to lease the minerals to third parties. The order granting the plaintiffs’ motion was severed into Cause No. 28769, styled Betty Yvon Lesley et a1. v. Bluff Dale Development Corporation, Bluegreen Southwest One. L.P. et al. in the 266th Judicial District Court, Erath County, Texas. Southwest appealed the trial court’s ruling. On January 22, 2009, in Bluegreen Southwest One, L.P. et al. v. Betty Yvon Lesley et al., in the 11th Court of Appeals, Eastland, Texas, the Appellate Court reversed the trial court’s decision and ruled in Southwest’s favor and determined that all executive rights were owned by Southwest and then transferred to the individual property owners in connection with the sales of land. All property owner claims were decided in favor of Southwest. It was also decided that Southwest did not breach a fiduciary duty to the plaintiffs as an executive rights holder. On May 14, 2009, the plaintiffs filed an appeal with the Texas Supreme Court asking the Court to reverse the Appellate Court’s decision in favor of Southwest. On September 15, 2010 the Court heard oral arguments on whether to reverse or affirm the Appellate Court’s decision. No information is available as to when the Texas Supreme Court will render a decision on the appeal.
Schawrz, et al. Lawsuit Regarding Community Amenities
          On September 18, 2008, in Cause No. 2008-5U-CV-1358-WI, styled Paul A. Schwarz and Barbara S. Schwarz v. Bluegreen Communities of Georgia, LLC and Bluegreen Corporation, in the United States District Court for the Southern District of Georgia, Brunswick Division, the plaintiffs brought suit alleging fraud and misrepresentation with regards to the construction of a marina at the Sanctuary Cove subdivision located in Camden County, Georgia. The plaintiff subsequently withdrew the fraud and misrepresentation counts and filed a count alleging violation of racketeering laws. On January 25, 2010, the plaintiffs filed a second complaint seeking approval to proceed with the lawsuit as a class action on behalf of more than 100 persons alleged to have been harmed by the alleged activities in a similar manner. No decision has yet been made by the Court as to whether a class will be certified. Bluegreen denies the allegations and intends to vigorously defend the lawsuit.

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Community Cable Service, LLC Lawsuit
          On June 3, 2010, in Cause No. 16-2009-CA-008028, styled Community Cable Service, LLC v. Bluegreen Communities of Georgia, LLC and Sanctuary Cove at St. Andrews Sound Community Association, Inc., a/k/a Sanctuary Cove Home Developers Association, Inc., in the Circuit Court of the Fourth Judicial Circuit in and for Duval County, Florida, the plaintiffs filed suit alleging breach by Bluegreen Communities of Georgia and the community association of a bulk cable TV services contract at Bluegreen’s Communities Sanctuary Cove single family residential community being developed in Waverly, Georgia. In its complaint, the plaintiffs alleged that unpaid bulk cable fees are due from the defendants, and that the non-payment of fees will continue to accrue on a monthly basis. Bluegreen and the community association have responded that the plaintiffs breached the parties’ contract. The case went to mediation on September 20, 2010, but no resolution was reached. Both parties have filed motions for summary judgment which have been set for hearing on August 11, 2011. A trial date, if necessary, will be set after the Court rules on the parties’ summary judgment motion.
BankAtlantic Bancorp
          Financial instruments with off-balance sheet risk were (in thousands):
                 
    March 31,   December 31,
    2011   2010
Commitments to sell fixed rate residential loans
  $ 5,580       14,408  
Commitments to originate loans held for sale
    4,098       12,571  
Commitments to originate loans held to maturity
    23,446       10,693  
Commitments to purchase residential loans
    12,987       2,590  
Commitments to extend credit, including the undisbursed portion of loans in process
    363,682       357,730  
Standby letters of credit
    8,592       9,804  
Commercial lines of credit
    87,479       77,144  
          Standby letters of credit are conditional commitments issued by BankAtlantic to guarantee the performance of a customer to a third party. BankAtlantic’s standby letters of credit are generally issued to customers in the construction industry guaranteeing project performance. These types of standby letters of credit had a maximum exposure of $7.1 million at March 31, 2011. BankAtlantic also issues standby letters of credit to commercial lending customers guaranteeing the payment of goods and services. These types of standby letters of credit had a maximum exposure of $1.5 million at March 31, 2011. These guarantees are primarily issued to support public and private borrowing arrangements and have maturities of one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. BankAtlantic may hold certificates of deposit and residential and commercial liens as collateral for such commitments. Included in other liabilities at March 31, 2011 and December 31, 2010 were $35,000 and $34,000, respectively, of unearned guarantee fees. There were no obligations associated with these guarantees recorded in the financial statements.
          BankAtlantic Bancorp and its subsidiaries are parties to lawsuits as plaintiff or defendant involving its bank operations, lending and tax certificates. Although BankAtlantic Bancorp believes it has meritorious defenses in all current legal actions, the outcome of litigation and regulatory matters and timing of ultimate resolution are inherently difficult to predict and uncertain.
          Reserves are accrued for matters in which it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. These accrual amounts as of March 31, 2011 are not material to the Company’s financial statements. The actual costs of resolving these legal claims may be substantially higher or lower than the amounts accrued for these claims.
          A range of reasonably possible losses is estimated for matters in which it is reasonably possible that a loss has been incurred or that a loss is probable but not reasonably estimable. Management of BankAtlantic Bancorp currently estimates the aggregate range of reasonably possible losses as $5.9 million to $16.6 million in excess of the accrued liability relating to these legal matters. This estimated range of reasonably possible losses represents the estimated possible losses over the life of such legal matters, which may span a currently indeterminable number of years, and is based on information currently available. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate. Those matters for which a reasonable estimate is not possible are not included within this estimated range and, therefore, this estimated range does not represent BankAtlantic Bancorp’s maximum loss exposure.

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          In certain matters BankAtlantic Bancorp is unable to estimate the loss or reasonable range of loss until additional developments in the case provide information sufficient to support an assessment of the loss or range of loss. Frequently in these matters the claims are broad and the plaintiffs have not quantified or factually supported the claim.
          BankAtlantic Bancorp believes that liabilities arising from litigation and regulatory matters, discussed below, in excess of the amounts currently accrued, if any, will not have a material impact to BankAtlantic Bancorp’s financial statements. However, due to the significant uncertainties involved in these legal matters, BankAtlantic Bancorp may incur losses in excess of accrued amounts and an adverse outcome in these matters could be material to BankAtlantic Bancorp’s financial statements.
          The following is a description of the ongoing litigation and regulatory matters:
Class action securities litigation
          In October 2007, BankAtlantic Bancorp and current or former officers of BankAtlantic Bancorp were named in a lawsuit which alleges that during the period of November 9, 2005 through October 25, 2007, BankAtlantic Bancorp and the named officers knowingly and/or recklessly made misrepresentations of material fact regarding BankAtlantic and specifically BankAtlantic’s loan portfolio and allowance for loan losses. The Complaint seeks to assert claims for violations of the Securities Exchange Act of 1934 and Rule 10b-5 and seeks unspecified damages. On November 18, 2010, a jury returned a verdict awarding $2.41 per share to shareholders who purchased shares of BankAtlantic Bancorp’s Class A Common Stock during the period of April 26, 2007 to October 26, 2007 who retained those shares until the end of the period. The jury rejected the plaintiffs’ claim for the six month period from October 19, 2006 to April 25, 2007. Prior to the beginning of the trial, the plaintiffs abandoned any claim for any prior period. On April 25, 2011, the Court granted defendants’ post-trial motion for judgment as a matter of law and vacated the jury verdict, resulting in a judgment in favor of all defendants on all claims. On May 5, 2011, defendants filed a motion for sanctions against plaintiffs and their counsel seeking reimbursement of their attorneys’ fees and costs incurred in connection with this lawsuit. The plaintiffs have indicated that they intend to appeal the Court’s order setting aside the jury verdict.
          In July 2008, BankAtlantic Bancorp, certain officers and Directors were named in a lawsuit which alleges that the individual defendants breached their fiduciary duties by engaging in certain lending practices with respect to BankAtlantic Bancorp’s Commercial Real Estate Loan Portfolio. The Complaint further alleges that BankAtlantic Bancorp’s public filings and statements did not fully disclose the risks associated with the Commercial Real Estate Loan Portfolio and seeks damages on behalf of BankAtlantic Bancorp. The case has been stayed pending final resolution of the class action securities litigation.
          On May 6, 2011, the Court instructed plaintiff’s counsel to narrow the claims and defendants in accord with the Court’s rulings in the class action securities litigation. The Court then invited defendants to move for summary judgment as to any remaining of such claims and defendants, and expressed considerable doubt as to the viability of any claims in light of the judgments entered in favor of defendants in the securities class action. Based on the Court’s instructions, BankAtlantic Bancorp believes this case will be resolved favorably to them and the individual defendants.
Class Action Overdraft Processing Litigation
          In November 2010, the two pending class action complaints against BankAtlantic associated with overdraft fees were consolidated. The Complaint, which asserts claims for breach of contract and breach of the duty of good faith and fair dealing, alleges that BankAtlantic improperly re-sequenced debit card transactions from largest to smallest, improperly assessed overdraft fees on positive balances, and improperly imposed sustained overdraft fees on customers. BankAtlantic has filed a motion to dismiss which is pending with the Court.
Office of Thrift Supervision Overdraft Processing Investigation
          On January 6, 2011, the Office of Thrift Supervision advised BankAtlantic that it had determined, subject to receipt of additional information from BankAtlantic that BankAtlantic had engaged in deceptive and unfair practices in violation of Section 5 of the Federal Trade Commission Act relating to certain of BankAtlantic’s deposit-related products. The OTS provided BankAtlantic the opportunity to respond with any additional or

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clarifying information, and BankAtlantic submitted a written response to the OTS on February 7, 2011 addressing the OTS’s position.
Securities and Exchange Commission Investigation
          BankAtlantic Bancorp has received a notice of investigation from the Securities and Exchange Commission, (“SEC”) Miami Regional Office and subpoenas for information. The subpoenas request a broad range of documents relating to, among other matters, recent and pending litigation to which BankAtlantic Bancorp is or was a party, certain of BankAtlantic Bancorp’s non-performing, non-accrual and charged-off loans, BankAtlantic Bancorp’s cost saving measures, loan classifications, BankAtlantic Bancorp’s asset workout subsidiary, and the recent Orders with the OTS entered into by BankAtlantic Bancorp Parent Company and BankAtlantic. Various current and former employees have also received subpoenas for documents and testimony. BankAtlantic Bancorp is fully cooperating with the SEC.
          BankAtlantic Bancorp has received a letter from the Miami regional office staff of the SEC indicating that the staff intends to recommend that the SEC bring a civil action against BankAtlantic Bancorp alleging that BankAtlantic Bancorp violated certain provisions of federal securities laws, including Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder. BankAtlantic Bancorp has also been informed that its chief executive officer received a similar letter. Although the letters do not state the grounds for such recommendations, in communications between BankAtlantic Bancorp’s counsel and the Miami regional office staff, BankAtlantic Bancorp has learned that the basis for the recommended actions were many of the same arguments brought in the private class action securities litigation recently concluded at the district court level in favor of BankAtlantic Bancorp and the individual defendants. In addition, the Miami regional office staff raised issues relating to the classification and valuation of certain loans included in BankAtlantic Bancorp’s financial information for the last quarter of 2007 and in its annual report on Form 10-K for the 2007 fiscal year. If litigation is brought, the SEC may seek remedies including an injunction against future violations of federal securities laws, civil money penalties and an officer and director bar. BankAtlantic Bancorp believes that it has fulfilled all of its obligations under securities laws and, if such actions are brought by the SEC against BankAtlantic Bancorp and/or any of its officers, such actions would be vigorously defended.
Concentration of Credit Risk
          BankAtlantic has a high concentration of its consumer home equity and commercial loans in the State of Florida. Real estate values and general economic conditions have significantly deteriorated since the origination dates of these loans. If market conditions in Florida do not improve or deteriorate further, BankAtlantic may be exposed to significant credit losses in these loan portfolios.
          BankAtlantic purchases residential loans located throughout the country. The majority of these residential loans are jumbo residential loans. A jumbo loan has a principal amount above the industry-standard definition of conventional conforming loan limits. These loans could potentially have outstanding loan balances significantly higher than related collateral values in distressed areas of the country as a result of the decline in real estate values in residential housing markets. Also included in this purchased residential loan portfolio are interest-only loans. The structure of these loans results in possible increases in a borrower’s loan payments when the contractually required repayments change due to interest rate movement and the required amortization of the principal amount. These payment increases could affect a borrower’s ability to meet the debt service on or repay the loan and lead to increased defaults and losses. At March 31, 2011, BankAtlantic’s residential loan portfolio included $494.1 million of interest-only loans, which represents 47.3% of the residential loan portfolio. Interest-only residential loans scheduled to become fully amortizing during the nine months ended December 31, 2011 and during the year ended December 31, 2012 are $32.6 million and $53.2 million, respectively. If market conditions in the areas where the collateral for BankAtlantic’s residential loans is located do not improve or deteriorate further, BankAtlantic may be exposed to additional losses in this portfolio.
17. Certain Relationships and Related Party Transactions
          BFC is the controlling shareholder of BankAtlantic Bancorp and Bluegreen. Woodbridge Holdings Corporation became a wholly owned subsidiary of BFC upon consummation of the merger between Woodbridge and BFC on September 21, 2009. Prior to the merger, BFC held an approximately 59% voting interest in Woodbridge. BFC also has a direct non-controlling interest in Benihana. Shares of BFC’s Class A and Class B Common Stock representing a majority of BFC’s total voting power are owned or controlled by the Company’s Chairman, President and Chief Executive Officer, Alan B. Levan, and by the Company’s Vice Chairman, John E.

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Abdo, both of whom are also directors of Bluegreen and Benihana, and executive officers and directors of BankAtlantic Bancorp and BankAtlantic. In addition, Jarett S. Levan, the son of Alan B. Levan, is a director and executive officer of the Company, BankAtlantic Bancorp and BankAtlantic.
          The following table presents related party transactions relating to the shared service arrangements between BFC, BankAtlantic Bancorp and Bluegreen for the three months ended March 31, 2011 and 2010. All amounts were eliminated in consolidation.
                                 
                    BankAtlantic    
            BFC   Bancorp   Bluegreen
            (in thousands)
For the Three Months Ended March 31, 2011
                               
Shared service income (expense)
    (a )   $ 381       (291 )     (90 )
Facilities cost and information technology
    (b )   $ (111 )     99       12  
For the Three Months Ended March 31, 2010
                               
Shared service income (expense)
    (a )   $ 594       (492 )     (102 )
Facilities cost and information technology
    (b )   $ (139 )     126       13  
 
(a)   Pursuant to the terms of shared service agreements, subsidiaries of BFC provide human resources, risk management, investor relations, executive office administration and other services to BankAtlantic Bancorp and Bluegreen. The costs of shared services are allocated based upon the usage of the respective services.
 
(b)   As part of the shared service arrangement, BFC pays BankAtlantic and Bluegreen for office facilities cost relating to BFC and its shared service operations. BFC also pays BankAtlantic for information technology related services pursuant to a separate agreement. For information technology related services, BFC paid BankAtlantic approximately $16,000 and $45,000 during the three month periods ended March 31, 2011 and 2010, respectively.
          As of March 31, 2011 and December 31, 2010, the Company had cash and cash equivalents accounts at BankAtlantic with balances of approximately $1.3 million and $1.8 million, respectively. These accounts were on the same general terms as deposits made by unaffiliated third parties. The Company recognized nominal interest income in connection with these funds held at BankAtlantic during the three month periods ended March 31, 2011 and 2010.
          In June 2010, BankAtlantic Bancorp and BankAtlantic entered into a real estate advisory service agreement with BFC for assistance relating to the work-out of loans and the sale of real estate owned. Under the terms of the agreement, BFC receives a monthly fee of $12,500 from each of BankAtlantic and BankAtlantic Bancorp and, if BFC’s efforts result in net recoveries of any non-performing loan or the sale of real estate owned, BFC will receive a fee equal to 1% of the net value recovered. During the three months ended March 31, 2011, BFC recognized an aggregate of approximately $0.1 million of real estate advisory service fees under this agreement.
          The Company leases office space to Pizza Fusion for approximately $68,000 annually pursuant to a month-to-month lease which commenced in September 2008. During the three months ended March 31, 2010, Pizza Fusion paid approximately $24,000 under the lease, while $17,000 of rent payments related to the lease were accrued at March 31, 2011.
          During the three months ended March 31, 2011 and 2010, Bluegreen reimbursed the Company approximately $99,000 and $385,000, respectively, for certain expenses incurred in assisting Bluegreen in its efforts to explore potential additional sources of liquidity. Additionally, during each of the three months ended March 31, 2011 and the three months ended March 31, 2010, Bluegreen paid Snapper Creek, a subsidiary of the Company, approximately $150,000 in consideration for its provision of a variety of management advisory services. We also have an agreement with Bluegreen relating to the maintenance of different independent registered public accounting firms and accordingly, at March 31, 2011, we accrued $0.5 million of fees related to certain procedures performed by PricewaterhouseCoopers LLP, our independent registered public accounting firm, at Bluegreen as part of its 2010 audit of our financial statements.
          In 2009, Bluegreen entered into a land lease with Benihana, which constructed and operates a restaurant at one of Bluegreen’s resort properties. During each of the first quarter of 2010 and the first quarter of 2011, Bluegreen received lease payments from Benihana of less than $0.1 million.
          BankAtlantic Bancorp in prior periods issued options to acquire shares of BankAtlantic Bancorp’s Class A

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     Common Stock to employees of BFC. Additionally, employees of BankAtlantic Bancorp have transferred to affiliate companies and BankAtlantic Bancorp has elected, in accordance with the terms of BankAtlantic Bancorp’s stock option plans, not to cancel the stock options held by those former employees. BankAtlantic Bancorp also issues options and restricted stock awards to BFC employees that perform services for BankAtlantic Bancorp. Expenses relating to all options and restricted stock awards granted by BankAtlantic Bancorp to BFC employees was approximately $16,000 and $12,000 for the three months ended March 31, 2011 and 2010, respectively.
          Outstanding options to purchase BankAtlantic Bancorp stock and non-vested restricted BankAtlantic Bancorp stock held by BFC employees consisted of the following as of March 31, 2011:
                 
    BankAtlantic Bancorp    
    Class A   Weighted
    Common   Average
    Stock   Price
Options outstanding
    47,761     $ 55.26  
Non-vested restricted stock
    56,250        
          Certain of the Company’s affiliates, including its executive officers, have independently made investments with their own funds in both public and private entities that the Company sponsored in 2001 and in which it holds investments.
          Florida Partners Corporation owns 1,270,294 shares of the Company’s Class A Common Stock and 133,314 shares of the Company’s Class B Common Stock. Alan B. Levan may be deemed to be the controlling shareholder of Florida Partners Corporation, and is also a member of its Board of Directors.
18. Loss Per Common Share
          The following table presents the computation of basic and diluted loss per common share attributable to the Company (in thousands, except per share data):
                 
    For the Three Months Ended  
    March 31,  
    2011     2010  
            (As Revised)  
Basic loss per common share
               
Numerator:
               
Loss from continuing operations
  $ (12,326 )     (32,851 )
Less: Noncontrolling interests loss from continuing operations
    (9,715 )     (13,320 )
 
           
Loss attributable to BFC
    (2,611 )     (19,531 )
Preferred stock dividends
    (188 )     (188 )
 
           
Loss allocable to common stock
    (2,799 )     (19,719 )
Discontinued operations attributable to BFC
          (249 )
 
           
Net loss allocable to common shareholders
  $ (2,799 )     (19,968 )
 
           
Denominator:
               
Basic weighted average number of common shares outstanding
    75,381       75,376  
 
               
Basic loss per common share:
               
Loss per share from continuing operations
  $ (0.04 )     (0.26 )
Loss per share from discontinued operations
           
 
           
Basic loss per share
  $ (0.04 )     (0.26 )
 
           
Diluted loss per common share:
               
Numerator:
               
Loss allocable to common stock after assumed dilution
    (2,799 )     (19,719 )
Discontinued operations allocable to common stock
          (249 )
 
           
Net loss allocable to common stock after assumed dilution
  $ (2,799 )     (19,968 )
 
           
Denominator
               
Diluted weighted average number of common shares outstanding
    75,381       75,376  
Diluted loss per share
               
Loss per share from continuing operations
  $ (0.04 )     (0.26 )
Loss per share from discontinued operations
           
 
           
Diluted loss per share
  $ (0.04 )     (0.26 )
 
           
          During the three months ended March 31, 2011 and 2010, 2,492,176 and 2,510,693, respectively, of options to acquire shares of Class A Common Stock were anti-dilutive.

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19. Parent Company Financial Information
          BFC’s parent company accounting policies are generally the same as those described in the summary of significant accounting policies appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The Company’s investments in BankAtlantic Bancorp, Bluegreen and other consolidated entities are presented in the parent company financial statements as if accounted for using the equity method of accounting.
          BFC’s parent company unaudited condensed statements of financial condition at March 31, 2011 and December 31, 2010, and unaudited condensed statements of operations and unaudited condensed statements of cash flows for the three months ended March 31, 2011 and 2010, are shown below:
Parent Company Condensed Statements of Financial Condition
(In thousands)
                 
    March 31,     December 31,  
    2011     2010  
ASSETS
               
Cash and cash equivalents
  $ 1,251       4,958  
Securities available for sale
    38,106       38,829  
Investment in Woodbridge Holdings, LLC
    123,834       115,999  
Investment in BankAtlantic Bancorp, Inc.
          2,377  
Investment in and advances in other subsidiaries
    1,613       113  
Notes receivable due from Woodbridge Holdings, LLC
    4,573       2,012  
Other assets
    1,412       1,444  
 
           
Total assets
  $ 170,789       165,732  
 
           
LIABILITIES AND EQUITY
               
Advances from wholly owned subsidiaries
  $ 569       942  
Investment deficit in BankAtlantic Bancorp, Inc.
    8,080        
Other liabilities
    10,715       10,889  
 
           
Total liabilities
    19,364       11,831  
 
           
Redeemable 5% Cumulative Preferred Stock
    11,029       11,029  
Shareholders’ equity
    140,396       142,872  
 
           
Total liabilities and Equity
  $ 170,789       165,732  
 
           
Parent Company Condensed Statements of Operations
(In thousands)
                 
    For the Three Months  
    Ended March 31,  
    2011     2010  
            (As Revised)  
Revenues
  $ 417       263  
Expenses
    1,580       1,914  
 
           
(Loss) before earnings (loss) from subsidiaries
    (1,163 )     (1,651 )
Equity in earnings (loss) in Woodbridge Holdings, LLC
    7,334       (10,580 )
Equity in loss in BankAtlantic Bancorp
    (10,328 )     (7,796 )
Equity in earnings (loss) in other subsidiaries
    1,546       (473 )
 
           
Loss before income taxes
    (2,611 )     (20,500 )
Benefit for income taxes
          (969 )
 
           
Loss from continuing operations
    (2,611 )     (19,531 )
Equity in subsidiaries’ discontinued operations
          (249 )
 
           
Net loss
    (2,611 )     (19,780 )
5% Preferred Stock dividends
    (188 )     (188 )
 
           
Net loss allocable to common stock
  $ (2,799 )     (19,968 )
 
           

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Parent Company Statements of Cash Flow
(In thousands)
                 
    For the Three Months  
    Ended March 31,  
    2011     2010  
            (As Revised)  
Operating Activities:
               
Net cash used in operating activities
  $ (4,194 )     (1,155 )
 
           
Investing Activities:
               
Proceeds from maturities of securities available for sale
    8,733       1,200  
Distribution from subsidiaries
    91       30,085  
Purchase of securities
    (8,149 )     (12,851 )
 
           
Net cash provided by investing activities
    675       18,434  
 
           
Financing Activities:
               
Preferred stock dividends paid
    (188 )     (188 )
 
           
Net cash used in financing activities
    (188 )     (188 )
 
           
(Decrease) increase in cash and cash equivalents
    (3,707 )     17,091  
Cash and cash equivalents at beginning of period
    4,958       1,308  
 
           
Cash and cash equivalents at end of period
  $ 1,251       18,399  
 
           
Supplementary disclosure of non-cash investing and financing activities
               
(Decrease) increase in accumulated other comprehensive income, net of income taxes
  $ (451 )     723  
Net increase in shareholders’ equity from the effect of subsidiaries’ capital transactions, net of income taxes
    609       814  
Net decrease in shareholders’ equity resulting from cumulative effect of change in accounting principle
          (1,496 )
          At March 31, 2011 and December 31, 2010, securities available for sale included approximately $17.1 million and $17.6 million, respectively, of readily marketable securities, as well as our investment in Benihana’s Convertible Preferred Stock, the fair value of which was $21.0 and $21.1 million, respectively.
          Approximately $4.7 million of the amounts set forth as other liabilities at March 31, 2011 and December 31, 2010 represent amounts due in connection with the settlement of a class action litigation that arose in connection with exchange transactions that BFC entered into in 1989 and 1991. BFC is required to repay this obligation as settlement holders submit their claims to BFC.
20. Litigation
          Except as set forth below, there have been no material changes in our legal proceedings from those previously disclosed in Note 37 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2010 (see also Note 16 in this report for information relating to BankAtlantic Bancorp’s and Bluegreen’s material claims or proceedings).
AmTrust Bank v. Woodbridge Holdings, LLC and Carolina Oak Homes, LLC, United States District Court for the Southern District of Florida
          During November 2009, AmTrust Bank (“AmTrust”) filed an action against Woodbridge and Carolina Oak alleging default under a promissory note and breach of a guaranty related to an approximately $37.2 million loan which was collateralized by property owned by Carolina Oak and as to which Woodbridge was the obligor. During December 2009, the OTS closed AmTrust and appointed the FDIC as receiver. The FDIC subsequently sold the loan to an investor group. Effective April 26, 2011, Woodbridge and Carolina Oak entered into a settlement agreement with the investor group to resolve the disputes and litigation between them. Under the terms and conditions of the settlement agreement, (i) Woodbridge paid $2.5 million to the investor group, (ii) Carolina Oak conveyed to the investor group the real property securing the loan and (iii) the investor group agreed not to pursue certain remedies, including a deficiency judgment, and after the expiration of an agreed-upon time period, to fully release Woodbridge and Carolina Oak, in each case subject to certain conditions.

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Class Action Litigation
          On January 25, 2008, plaintiff Robert D. Dance filed a purported class action complaint as a putative purchaser of securities against Woodbridge and certain of its officers and directors, asserting claims under the federal securities law and seeking damages. This action was filed in the United States District Court for the Southern District of Florida and is captioned Dance v. Levitt Corp. et al., No. 08-CV-60111-DLG. The securities litigation purports to be brought on behalf of all purchasers of Woodbridge’s securities beginning on January 31, 2007 and ending on August 14, 2007. The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder by issuing a series of false and/or misleading statements regarding financial results, prospects and condition. During April 2011, a preliminary agreement was reached to settle the matter, pursuant to which Woodbridge would pay to the plaintiffs a total of $1.95 million which amount is fully insured without participation by the Company. The agreement does not contain any admission of responsibility by Woodbridge or any other of the named defendants. The settlement remains subject to notice to the class and approval by the presiding court, and may not be consummated on the contemplated terms, or at all.
21. New Accounting Pronouncements
          In April 2011, the Financial Accounting Standards Board issued Accounting Standards Update No. 2011-02, A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring (“ASU 2011-02”), which amends guidance for evaluating whether the restructuring of a receivable by a creditor is a troubled debt restructuring (a “TDR”). ASU 2011-02 responds to concerns that creditors are inconsistently applying existing guidance for identifying TDRs. The main provision of ASU 2011-02 will require a creditor to separately conclude whether the restructuring constitutes a concession and whether the debtor is experiencing financial difficulties, in order to determine if a restructuring constitutes a TDR. Guidance is also provided to assist the creditor in evaluating these two criteria. ASU 2011-02 also clarifies that a creditor is precluded from using the effective interest rate test, as described in the debtors guidance on restructuring payables, when evaluating whether a restructuring constitutes a TDR. ASU 2011-02 will become effective beginning with the quarterly period ending September 30, 2011. Retrospective application is required for any restructurings occurring on or after January 1, 2011 for purposes of identifying and disclosing TDRs. However, an entity should apply prospectively changes in the method used to calculate impairment on receivables. At the same time that we adopt ASU 2011-02, we will be required to disclose any activity-based information about TDRs that was previously deferred by ASU No. 2011-01, Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings. Early adoption is permitted. The adoption of these Accounting Standards Updates is not expected to have a material impact on our financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
          BFC Financial Corporation (“BFC” or, unless otherwise indicated or the context otherwise requires, “we”, “us”, “our” or the “Company”) is a diversified holding company whose principal holdings include a controlling interest in BankAtlantic Bancorp, Inc. and its subsidiaries, including BankAtlantic (“BankAtlantic Bancorp”), a controlling interest in Bluegreen Corporation and its subsidiaries (“Bluegreen”), and a non-controlling interest in Benihana Inc. (“Benihana”). As a result of its position as the controlling shareholder of BankAtlantic Bancorp, BFC is a “unitary savings bank holding company” regulated by the Office of Thrift Supervision (“OTS”). As of March 31, 2011, we had total consolidated assets of approximately $5.7 billion and shareholders’ equity attributable to BFC of approximately $140.4 million.
          Historically, BFC’s business strategy has been to invest in and acquire businesses in diverse industries either directly or through controlled subsidiaries. However, BFC believes that, in the short term, the Company’s and its shareholders’ interests are best served by BFC providing strategic support to its existing investments. In furtherance of this strategy, the Company took several steps in 2009 and 2010, including those described below, which it believes will enhance the Company’s prospects:
    During the third quarter of 2009, BFC and Woodbridge Holdings Corporation consummated their merger pursuant to which Woodbridge became a wholly-owned subsidiary of BFC.
 
    In the fourth quarter of 2009, our ownership interest in Bluegreen increased to 52% as a result of the purchase of an additional 23% interest in Bluegreen.
 
    We have also increased our investment in BankAtlantic Bancorp through our participation in BankAtlantic Bancorp’s rights offerings to its shareholders during 2009 and 2010, which in the aggregate increased our economic interest in BankAtlantic Bancorp to 45% and our voting interest in BankAtlantic Bancorp to 71%.
 
    We exited the land development business operated by Core Communities and sold substantially all of the associated commercial assets. Through a combination of transactions with Core’s lenders, we realized a reduction in debt of approximately $186 million in 2010 with a further reduction of approximately $27 million anticipated to occur in the first half of 2011. The Company also eliminated substantially all of the ongoing expenses associated with Core.
 
    During April 2011, Woodbridge and its wholly owned subsidiary, Carolina Oak Homes, LLC (“Carolina Oak”), entered into a settlement agreement to resolve the disputes and litigation between them and a lender relating to an approximately $37.2 million loan which was collateralized by property owned by Carolina Oak. Under the terms of the settlement agreement, (i) Woodbridge paid $2.5 million to the note holder, (ii) Carolina Oak conveyed to the note holder the real property securing the loan and (iii) the note holder agreed not to pursue certain remedies, including a deficiency judgment, and after the expiration of an agreed-upon time period, to fully release Woodbridge and Carolina Oak, in each case subject to certain conditions.
          BankAtlantic Bancorp recently announced its intention to pursue a new rights offering to its shareholders of up to $30 million on its Class A Common Stock. We support the rights offering and have indicated our willingness to participate; however, the amount of our investment in the rights offering has not yet been determined by our Board of Directors.
          In the future, depending on market conditions and other factors considered by our Board of Directors, we may renew efforts to pursue strategic growth and consider other opportunities that could change our ownership in our affiliates or seek to make investments outside of our existing portfolio. We do not currently have pre-determined parameters as to the industry or structure of any future investment. In furtherance of our goals, we will continue to evaluate various financing transactions that may present themselves, including raising additional debt or equity as well as other alternative sources of new capital.
          During July 2010, Benihana announced its intention to engage in a formal review of strategic alternatives, including a possible sale of the company. During March 2011, Bluegreen announced its intention to evaluate strategic alternatives for its Bluegreen Communities division, including a possible sale of the division. Each company has engaged advisors to assist it in pursuing strategic alternatives. BFC is supportive of Benihana and Bluegreen in achieving their objectives.

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          Generally accepted accounting principles (“GAAP”) require that BFC consolidate the financial results of the entities in which it has controlling interest. As a consequence, the assets and liabilities of all such entities are presented on a consolidated basis in BFC’s financial statements. However, except as otherwise noted, the debts and obligations of the consolidated entities, including BankAtlantic Bancorp, Bluegreen and Woodbridge, are not direct obligations of BFC and are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC absent a dividend or distribution from those entities. The recognition by BFC of income from controlled entities is determined based on the total percent of economic ownership in those entities. At March 31, 2011, we owned approximately 52% of Bluegreen’s common stock and had an approximately 45% ownership interest and 70% voting interest in BankAtlantic Bancorp.
          The Company’s business activities currently consist of (i) Real Estate and Other Activities and (ii) Financial Services. We currently report our results of operations through six reportable segments: Our Real Estate and Other business activities include the following four reportable segments: BFC Activities; Real Estate Operations; and Bluegreen Resorts and Bluegreen Communities, the segments through which Bluegreen’s results of operations are reported. The Company’s Financial Services business activities include BankAtlantic Bancorp’s results of operations and contain the other two reportable segments: BankAtlantic and BankAtlantic Bancorp Parent Company. See Note 15 of the “Notes to Unaudited Consolidated Financial Statements” for additional information about our segments.
Forward Looking Statements
          Except for historical information contained herein, the matters discussed in this document contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. When used herein, the words “anticipate,” “believe,” “estimate,” “may,” “intend,” “expect” and similar expressions identify certain of such forward-looking statements. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on our expectations and are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. When considering those forward-looking statements, the reader should keep in mind the risks, uncertainties and other cautionary statements made in this report. The reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made. This document also contains information regarding the past performance of our investments and the reader should note that prior or current performance of investments is not a guarantee or indication of future performance.
          Some factors which may affect the accuracy of the forward-looking statements apply generally to the financial services, real estate, resort development and vacation ownership, and restaurant industries, while other factors apply more specifically to us. Risks and uncertainties associated with BFC, including its wholly-owned Woodbridge subsidiary, include, but are not limited to:
    risks associated with the Company’s current business strategy, including the risk that BFC will not be in a position to provide strategic support to its affiliated entities or that such support will not achieve the anticipated benefits;
 
    BFC has negative cash flow and limited sources of cash which may present certain risks to its ongoing operations;
 
    the impact of economic, competitive and other factors affecting the Company and its subsidiaries, and their operations, markets, products and services;
 
    the risk that creditors of the Company’s subsidiaries or other third parties may seek to recover distributions or dividends made by such subsidiaries or other amounts owed by such subsidiaries from their respective parent companies, including BFC;
 
    BFC’s shareholders’ interests may be diluted if additional shares of BFC’s common stock are issued, and BFC’s public company investments may be diluted if BankAtlantic Bancorp, Bluegreen or Benihana issue additional shares of its stock;
 
    adverse conditions in the stock market, the public debt market and other capital markets and the impact of such conditions on the activities of the Company and its subsidiaries;
 
    the impact of the recent economic downturn on the Company and the price and liquidity of its common stock and on BFC’s ability to obtain additional capital, including the risk that if BFC needs or otherwise

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      believes it is advisable to issue debt or equity securities to fund its operations, it may not be possible to issue any such securities on favorable terms, if at all;
 
    strategic alternatives being evaluated by entities in which the Company has investments may not ultimately be pursued or consummated or, if consummated, result in the benefits expected to be achieved;
 
    the performance of entities in which the Company has made investments may not be profitable or their results as anticipated;
 
    BFC is dependent upon dividends from its subsidiaries to fund its operations; BankAtlantic Bancorp is currently prohibited from paying dividends and may not be in a position to pay dividends in the future, whether as a result of such restrictions continuing in the future or otherwise; Bluegreen has historically not paid dividends on its common stock and its ability to pay dividends may be limited by the terms of certain of its indebtedness;
 
    the uncertainty regarding the amount of cash that will be required to be paid to Woodbridge shareholders who exercised appraisal rights in connection with Woodbridge’s merger with BFC;
 
    the risk that final releases relating to the resolution of certain Woodbridge indebtedness may not be obtained;
 
    risks associated with the securities we hold directly or indirectly, including the risk that we may be required to record impairment charges with respect to such securities;
 
    the preparation of financial statements in accordance with GAAP involves making estimates, judgments and assumptions, and any changes in estimates, judgments and assumptions used could have a material adverse impact on our financial condition and operating results;
 
    the risk that the amount of any tax refund that we may receive in the future may be less than expected, or received later than expected;
 
    uncertainties regarding enacted or currently proposed legislation regarding regulation of companies within the financial services industry, including bank holding companies, and the potential impact of such legislation on our operations and the operations of BankAtlantic Bancorp, as well as the risk that BFC will be required by the OTS to enter into a Cease and Desist Order with respect to its ownership and oversight of BankAtlantic Bancorp;
 
    the risks related to litigation and other legal proceedings against BFC and its subsidiaries, including the legal and other professional fees and other costs and expenses of such proceedings, as well as the impact of any finding of liability or damages on our financial condition and operating results; and
 
    the Company’s success at managing the risks involved in the foregoing.
          With respect to BankAtlantic Bancorp and BankAtlantic, the risks and uncertainties include, but are not limited to:
    the impact of economic, competitive and other factors affecting BankAtlantic Bancorp and its operations, markets, products and services, including the impact of the changing regulatory environment, a continued or deepening recession, continued decreases in real estate values, and increased unemployment or sustained high unemployment rates on its business generally, BankAtlantic’s regulatory capital ratios, the ability of its borrowers to service their obligations and its customers to maintain account balances and the value of collateral securing its loans;
 
    credit risks and loan losses, and the related sufficiency of the allowance for loan losses, including the impact on the credit quality of BankAtlantic Bancorp’s loans (including those held in the asset workout subsidiary of BankAtlantic Bancorp) of a sustained downturn in the economy and in the real estate market and other changes in the real estate markets in BankAtlantic Bancorp’s trade area and where its collateral is located;
 
    the risks of additional charge-offs, impairments and required increases in BankAtlantic Bancorp’s allowance for loan losses associated with the economy;
 
    the impact of regulatory proceedings and litigation regarding overdraft fees;
 
    the risks associated with maintaining compliance with the Cease and Desist Orders entered into by BankAtlantic Bancorp and BankAtlantic, including risks that compliance will adversely impact operations, risks associated with failing to comply with regulatory mandates and the risk of imposition of additional regulatory requirements and/or fines;
 
    the uncertain impact of legal proceedings on BankAtlantic Bancorp’s financial condition or operations including the risk that the securities class action litigation verdict may not be overturned on appeal;
 
    the risk that changes in interest rates and the effects of, and changes in, trade, monetary and fiscal policies and laws including their impact on BankAtlantic’s net interest margin;
 
    adverse conditions in the stock market, the public debt market and other financial and credit markets and the impact of such conditions on BankAtlantic Bancorp’s activities and ability to raise capital;

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    the sale of BankAtlantic’s Tampa branches may not be consummated pursuant to its terms, at the time anticipated or at all, and that the transaction may not have the positive financial impact currently anticipated;
 
    BankAtlantic Bancorp may raise additional capital and such capital may be highly dilutive to BankAtlantic Bancorp’s shareholders, including BFC, or may not be available;
 
    the risks associated with the impact of periodic valuation testing of goodwill, deferred tax assets and other assets; and
 
    BankAtlantic Bancorp’s success at managing the risks involved in the foregoing.
 
      With respect to Bluegreen, the risks and uncertainties include, but are not limited to:
 
    the overall state of the economy, interest rates and the availability of financing may affect Bluegreen’s ability to market vacation ownership interests (“VOIs”) and residential homesites;
 
    Bluegreen would incur substantial losses and its liquidity position could be adversely impacted if the customers it finances default on their obligations;
 
    while Bluegreen has attempted to restructure its business to reduce its need for and reliance on financing for liquidity in the short term, there is no assurance that such restructuring will be successful or that its business and profitability will not otherwise continue to depend on its ability to obtain financing, which may not be available on favorable terms, or at all;
 
    Bluegreen’s future success depends on its ability to market its products successfully and efficiently;
 
    Bluegreen is subject to the risks of the real estate market and the risks associated with real estate development, including the continued decline in real estate values and the deterioration of real estate sales;
 
    Bluegreen may not be successful in increasing or expanding its fee-based services relationships and its fee-based service activities may not be profitable, which may have an adverse impact on its results of operations and financial condition;
 
    Bluegreen’s results of operations and financial condition may be materially and adversely impacted if Bluegreen Resorts does not continue to participate in exchange networks or its customers are not satisfied with the networks in which it participates;
 
    Bluegreen’s exploration of strategic alternatives for its Bluegreen Communities involves a number of risks, including that it may divert management’s attention from its business activities, result in additional impairment charges and not ultimately lead to Bluegreen consummating a transaction or otherwise realizing improvements in its operating results and financial condition;
 
    claims for development-related defects could adversely affect Bluegreen’s financial condition and operating results;
 
    the resale market for VOIs could adversely affect Bluegreen’s business;
 
    Bluegreen may be adversely affected by extensive federal, state and local laws and regulations and changes in applicable laws and regulations, including the imposition of additional taxes on operations. In addition, results of audits of Bluegreen’s tax returns or those of its subsidiaries may have a material and adverse impact on its financial condition;
 
    environmental liabilities, including claims with respect to mold or hazardous or toxic substances, could have a material adverse impact on Bluegreen’s business;
 
    the ratings of third-party rating agencies could adversely impact Bluegreen’s ability to obtain, renew, or extend credit facilities, debt, or otherwise raise capital;
 
    inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance with GAAP. Any changes in estimates, judgments and assumptions used could have a material adverse impact on Bluegreen operating results and financial condition; and
 
    the loss of the services of Bluegreen’s key management and personnel could adversely affect its business.
     In addition to the risks and factors identified above, reference is also made to other risks and factors detailed in reports filed by the Company, BankAtlantic Bancorp and Bluegreen with the SEC including those disclosed in the “Risk Factors” section of such reports. The Company cautions that the foregoing factors are not exclusive.

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Critical Accounting Policies
          Management views critical accounting policies as accounting policies that are important to the understanding of our financial statements and also involve estimates and judgments about inherently uncertain matters. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated statements of financial condition and assumptions that affect the recognition of income and expenses on the consolidated statements of operations for the periods presented. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in subsequent periods relate to the determination of the allowance for loan losses, the valuation of real estate and its impairment reserves, evaluation of goodwill and other intangible assets for impairment, the valuation of securities, as well as the determination of other-than-temporary declines in value, the valuation of real estate acquired in connection with foreclosure or in satisfaction of loans, revenue and cost recognition on percent complete projects, estimated costs to complete construction, the valuation of the fair value of assets and liabilities in the application of the acquisition method of accounting, the amount of deferred tax asset valuation allowance, accounting for uncertain tax positions, accounting for contingencies, and assumptions used in the valuation of stock based compensation. The accounting policies that we have identified as critical accounting policies are: (i) allowance for loan losses and notes receivable; (ii) the valuation of retained interests in notes receivable sold and the related gains on sales of notes receivable; (iii) the valuation of Bluegreen’s notes receivable deemed to have been acquired by us; (iv) impairment of goodwill and long-lived assets; (v) the valuation of securities as well as the determination of other-than-temporary declines in value; (vi) accounting for business combinations; (vii) the valuation of real estate; (viii) revenue and cost recognition on percentage-of- completion projects; (ix) estimated cost to complete construction; (x) accounting for deferred tax asset valuation allowance; and (xi) accounting for contingencies. For a more detailed discussion of these critical accounting policies see “Critical Accounting Policies” appearing in our Annual Report on Form 10-K for the year ended December 31, 2010.
New Accounting Pronouncements
          See Note 21 of the “Notes to Unaudited Consolidated Financial Statements” included under Item 1 of this report for a discussion of new accounting pronouncements applicable to the Company and its subsidiaries.
Summary of Consolidated Results of Operations
The table below sets forth the Company’s summarized results of operations (in thousands):
                 
    For the Three Months Ended  
    March 31,  
    2011     2010  
            (As Revised)  
Real Estate and Other
  $ 10,561       (12,330 )
Financial Services
    (22,887 )     (20,521 )
 
           
Loss from continuing operations
    (12,326 )     (32,851 )
Loss from discontinued operations
          (249 )
 
           
Net loss
    (12,326 )     (33,100 )
Less: Net loss attributable to noncontrolling interests
    (9,715 )     (13,320 )
 
           
Net loss attributable to BFC
    (2,611 )     (19,780 )
5% Preferred stock dividends
    (188 )     (188 )
 
           
Net loss allocable to common stock
  $ (2,799 )     (19,968 )
 
           
          Consolidated net loss attributable to BFC for the three months ended March 31, 2011 was $2.6 million compared with a net loss of $19.8 million for the same period in 2010. The results of discontinued operations related to Core Communities’ commercial leasing projects, are discussed further in Note 4 of the “Notes to Unaudited Consolidated Financial Statements”.
          The 5% Preferred Stock dividend represents the dividends paid by the Company on its 5% Cumulative Preferred Stock.
          The results of our business segments and other information on each segment are discussed below in BFC Activities, Real Estate Operations, Bluegreen Resorts, Bluegreen Communities, BankAtlantic and BankAtlantic Bancorp Parent Company.

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          Revisions to Consolidated Financial Statements — On November 16, 2009, we purchased an additional 7.4 million shares of Bluegreen’s common stock. This share purchase increased our ownership interest in Bluegreen to approximately 16.9 million shares, or approximately 52%, of Bluegreen’s outstanding common stock. Accordingly, we are deemed to have a controlling interest in Bluegreen and, under GAAP, Bluegreen’s results are consolidated in our financial statements. The Company accounted for the acquisition of a controlling interest in Bluegreen in accordance with the accounting guidance for business combinations, pursuant to which management was required to evaluate the fair value of Bluegreen’s assets and liabilities as of the acquisition date. As previously disclosed, the allocation of the purchase price was based on preliminary estimates of the fair value of Bluegreen’s inventory and contracts, and was subject to change within the measurement period as valuations were finalized. Additionally, any offset relating to amortization/accretion was also retrospectively adjusted in the appropriate periods. As discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, during the fourth quarter of 2010, the Company finalized its valuations and adjusted the preliminary value assigned to the assets and liabilities of Bluegreen in order to reflect additional information obtained since the November 16, 2009 share acquisition date. These changes resulted in the following adjustments at December 31, 2009: a decrease of approximately $6.9 million to real estate inventory; an increase in other assets of approximately $3.5 million; an increase in other liabilities of approximately $4.1 million; and a decrease in deferred income taxes of approximately $7.1 million. Such adjustments resulted in a decrease to the “bargain purchase gain” related to the share acquisition for the year ended December 31, 2009 from $183.1 million to $182.8 million. The Company’s Consolidated Statement of Operations for the three months ended March 31, 2010 was revised to reflect the impact of the amortization/accretion associated with the above adjustments which resulted in a decrease to the net loss for the quarter of approximately $88,000 compared to the previously reported amount.
          Additionally, during the fourth quarter of 2010, management identified certain errors in its previously reported financial statements for 2010 and 2009. Because these errors were not material to the Company’s financial statements for 2010 or 2009, individually or in the aggregate, the Company revised its previously reported 2010 first, second and third quarter financial statements and its 2009 annual financial statements. These adjustments related to the following: the recognition of interest income associated with the acquired notes receivable in accordance with the accounting guidance Loans and Debt Securities with Deteriorated Credit Quality; an adjustment to the provision for loan losses for the acquired notes receivable; interest expense recognition for notes payable of certain defaulted debt at Woodbridge’s subsidiaries, Core Communities, LLC (“Core” or “Core Communities”) and Carolina Oak Homes, LLC (“Carolina Oak”), at the defaulted interest rate, where the stated interest rate was previously used; the recognition of income tax benefits associated with unrealized gains in accumulated other comprehensive income; and an adjustment to deferred taxes related to an impairment to real estate inventory which was reflected after November 16, 2009 and accounted for as a temporary difference, which should have been included in the determination of deferred taxes at the acquisition date, as part of the Bluegreen purchase price allocation.
          The Company’s financial statements for the three months ended March 31, 2010 contained herein reflect the adjustments and revisions described above. See Note 1 of the “Notes to Unaudited Consolidated Financial Statements” for additional information about these adjustments. The Company will present the impact of these adjustments and revisions for the three and six months ended June 30, 2010 and for the three and nine months ended September 30, 2010 in future filings when it discloses them as comparable periods. The quarterly period adjustments and revisions were previously disclosed in Note 40 to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

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Consolidated Financial Condition
Consolidated Assets and Liabilities
          Total assets at March 31, 2011 and December 31, 2010 were $5.7 billion and $5.8 billion, respectively. The primary changes in components of total assets are summarized below:
    an increase in BankAtlantic Bancorp’s interest-bearing deposits in other banks primarily reflecting $200 million of higher cash balances at the Federal Reserve Bank in anticipation of the Tampa branch sale;
 
    a decrease in securities available for sale reflecting BankAtlantic Bancorp’s receipts of repayments of short-term agency and municipal securities as well as mortgage-backed securities repayments;
 
    a decrease in BankAtlantic Bancorp’s tax certificate balances primarily relating to redemptions;
 
    an increase in BankAtlantic Bancorp’s loans held for sale associated with the transfer of $25.1 million of non-performing residential loans to held for sale;
 
    a decrease in BankAtlantic Bancorp’s loans receivable balances associated with $28 million of net-charge-offs, $6.7 million of loans transferred to real estate owned, $3.1 million of loan sales, and repayments of loans in the ordinary course of business; and
 
    a decrease in BankAtlantic Bancorp’s accrued interest receivables resulting primarily from lower loan and tax certificate balances partially offset by higher agency and municipal securities balances.
          Total liabilities at March 31, 2011 and December 31, 2010 were $5.5 billion and $5.6 billion, respectively. The primary changes in components of total liabilities are summarized below:
    a decrease in BankAtlantic’s interest bearing deposit account balances associated with lower interest bearing checking account and time deposit balances;
 
    an increase in BankAtlantic’s non-interest bearing deposits due primarily to higher average balances per customer account;
 
    lower FHLB advances and short term borrowings at BankAtlantic due to repayments using proceeds from deposit growth;
 
    the deferred gain on settlement of investment in subsidiary of approximately $11.3 million which was recognized into income upon Core receiving a general release of liability during the three months ended March 31, 2011 (see Note 2 of the “Notes to Unaudited Consolidated Financial Statements” for additional information); and
 
    an increase in BankAtlantic Bancorp’s junior subordinated debentures liability due to interest deferrals.

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BFC Activities
BFC Activities
          The BFC Activities segment consists of BFC operations, dividends from our investment in Benihana, and other operations of Woodbridge. BFC operations primarily consist of our corporate overhead and general and administrative expenses, including the expenses of Woodbridge, the financial results of a venture partnership that BFC controls and other equity investments, as well as income and expenses associated with BFC’s shared service operations which provides human resources, risk management, investor relations and executive office administration services to BankAtlantic Bancorp and Bluegreen. This segment also includes investments made by our wholly owned subsidiary, BFC/CCC, Inc (“BFC/CCC”). Woodbridge’s other operations include the activities of Pizza Fusion Holdings, Inc. (“Pizza Fusion”) and Snapper Creek Equity Management, LLC, as well as certain other investments.
          The discussion that follows reflects the operations and related matters of BFC Activities (in thousands).
                         
    For the Three Months Ended     Change  
    March 31,     2011 vs.  
    2011     2010     2010  
            (As Revised)          
Revenues
                       
Other revenues
  $ 271       387       (116 )
 
                 
 
    271       387       (116 )
 
                 
 
                       
Cost and Expenses
                       
Interest expense
    1,361       1,838       (477 )
Selling, general and administrative expenses
    5,376       6,487       (1,111 )
 
                 
 
    6,737       8,325       (1,588 )
 
                 
Equity in earnings from unconsolidated affiliates
    1,361       (31 )     1,392  
Other income
    1,318       1,394       (76 )
 
                 
Loss from continuing operations before income taxes
    (3,787 )     (6,575 )     2,788  
Less: Benefit for income taxes
    (144 )     (1,167 )     1,023  
 
                 
Net loss
  $ (3,643 )     (5,408 )     1,765  
 
                 
          Other revenues for the three months ended March 31, 2011 and 2010 related to franchise revenues generated by Pizza Fusion.
          Interest expense totaled $1.4 million and $1.8 million for the three months ended March 31, 2011 and 2010, respectively. The decrease in interest expense primarily resulted from lower rates. No interest was capitalized in the three months ended March 31, 2011 or 2010.
          General and administrative expenses decreased $1.1 million to $5.4 million for the three months ended March 31, 2011 from $6.5 million for the same period in 2010. The decrease was attributable to lower employee compensation due to a decrease in the number of employees, and lower bonuses, as well as lower franchise and contract fees due to Pizza Fusion store closures. This was offset in part by higher professional fees.
          A wholly-owned subsidiary of BFC/CCC had a 10% interest in a limited liability company that owned two commercial properties in Hillsborough County, Florida which served as collateral for an approximately $26.0 million loan to the limited liability company. In connection with the purchase of the commercial properties in November 2006, BFC and the unaffiliated member of the limited liability company each guaranteed the payment of up to a maximum of $5.0 million for certain environmental indemnities and specific obligations that were not related to the financial performance of the properties. BFC and the unaffiliated member also entered into a cross indemnification agreement which limited BFC’s obligations under the guarantee to acts of BFC and its affiliates. On March 25, 2011, the limited liability company reached a settlement with its lender, pursuant to which it has conveyed the commercial properties securing the loan via a deed in lieu of foreclosure. BFC and BFC/CCC’s wholly-owned subsidiary were released from all obligations and guarantees related to the two commercial properties. As of March 31, 2011, BFC recognized the negative basis of its investment of approximately $1.3 million which is included in earnings from unconsolidated affiliates.
2008 Step acquisitions — Purchase Accounting
          During 2008, BFC purchased an aggregate of 723,848 shares of BankAtlantic Bancorp’s Class A Common Stock on the open market. The shares purchased were accounted for as step acquisitions under the purchase method

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BFC Activities
of accounting then in effect. Accordingly, the assets and liabilities acquired were revalued to reflect market values at the date of acquisition. The discounts and premiums arising as a result of such revaluation are generally being accreted or amortized, net of tax, over the remaining life of the assets and liabilities. The net impact of such accretion, amortization and other effects of purchase accounting decreased our consolidated net loss for the three months ended March 31, 2011 by approximately $160,000 and increased our consolidated net loss for the three months ended March 31, 2010 by approximately $85,000.
BFC Activities- Liquidity and Capital Resources
          As of March 31, 2011 and December 31, 2010, we had cash, cash equivalents and short-term investments totaling approximately $22 million and $29 million, respectively. The decrease in cash, cash equivalents and short-term investments was due to BFC’s operating and general and administrative expenses of approximately $3.2 million, and junior subordinated debentures interest payments of approximately $1.3 million, as well as a $2.5 million payment to the note holder in connection with a settlement agreement, as discussed below.
          Except as otherwise noted, the debts and obligations of BankAtlantic Bancorp, Bluegreen and Woodbridge are not direct obligations of BFC and generally are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC, absent a dividend or distribution from those entities. BFC’s principal sources of liquidity are its available cash, including tax refunds, short-term investments, and dividends from Benihana. We expect to receive an additional $7.5 million tax refund, net of the amounts payable under the settlement agreement related to the bankruptcy filing of Levitt and Sons LLC and substantially all of its subsidiaries, as discussed in Note 16 of the “Notes to Unaudited Consolidated Financial Statements”.
          We expect to use our available funds to fund operations and meet our obligations. We may also use available funds to make additional investments in the companies within our consolidated group, including participation in BankAtlantic Bancorp’s recently announced rights offering, invest in equity securities and other investments, or repurchase shares of our common stock pursuant to our share repurchase program. On September 21, 2009, our Board of Directors approved a share repurchase program which authorizes the repurchase of up to 20,000,000 shares of Class A and Class B Common Stock at an aggregate cost of no more than $10 million. The share repurchase program replaced our $10 million repurchase program that our Board of Directors approved in October 2006 which placed a limitation on the number of shares which could be repurchased under the program at 1,750,000 shares of Class A Common Stock. The current program, like the prior program, authorizes management, at its discretion, to repurchase shares from time to time subject to market conditions and other factors. No shares were repurchased during the years ended December 31, 2010 or 2009, or during the three months ended March 31, 2011.
          During June and July 2010, BFC acquired an aggregate of 10,000,000 shares of BankAtlantic Bancorp’s Class A Common Stock in connection with the exercise of subscription rights granted to it in BankAtlantic Bancorp’s rights offering. The aggregate purchase price for those shares was $15.0 million. BFC exercised its basic subscription rights to purchase 5,986,865 shares, and the remaining 4,013,135 shares were acquired by BFC pursuant to its over-subscription request. The shares acquired in the rights offering increased BFC’s ownership interest in BankAtlantic Bancorp by approximately 8% to 45% and BFC’s voting interest in BankAtlantic Bancorp by approximately 5% to 71% as of July 2010. BankAtlantic Bancorp recently announced its intention to pursue a new rights offering to its shareholders of up to $30 million of its Class A Common Stock. We currently intend to support the rights offering and have indicated our willingness to participate; however, the amount of our investment in the rights offering has not yet been determined by our Board of Directors.
          Since March 2009, BFC has not received cash dividends from BankAtlantic Bancorp. BankAtlantic Bancorp is currently prohibited from paying dividends on its common stock without first receiving the written non-objection of the OTS. In addition, during February 2009, BankAtlantic Bancorp elected to exercise its right to defer payments of interest on its trust preferred junior subordinated debt. BankAtlantic Bancorp is permitted to defer quarterly interest payments for up to 20 consecutive quarters. During the deferral period, BankAtlantic Bancorp is prohibited from paying dividends to its shareholders, including BFC. While BankAtlantic Bancorp can end the deferral period at any time, BankAtlantic Bancorp has indicated that it anticipates that it may continue to defer such interest payments for the foreseeable future. Furthermore, BFC has not received cash dividends from Bluegreen and does not expect to receive cash dividends from Bluegreen in the foreseeable future. Certain of Bluegreen’s credit facilities contain terms which may limit the payment of cash dividends.
          We believe that our current financial condition and credit relationships, together with anticipated cash

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BFC Activities
flows from operating activities and other sources of funds, including tax refunds and, to the extent determined to be advisable, proceeds from the disposition of properties or investments, will allow us to meet our anticipated near-term liquidity needs. With respect to long-term liquidity requirements, in addition to the foregoing, we may seek to raise funds, through the incurrence of long-term secured or unsecured indebtedness, the issuance of equity and/or debt securities or through the sale of assets; however we may be limited in doing so by OTS restrictions or otherwise and these alternatives may not be available to us on attractive terms, or at all.
          BFC, on a parent company only basis, has committed that it will not, without the prior written non-objection of the OTS, (i) incur, issue, renew or roll over any current lines of credit, guarantee the debt of any other entity or otherwise incur any additional debt, except as contemplated by BFC’s business plan or in connection with BankAtlantic’s compliance requirements applicable to it; (ii) declare or make any dividends or other capital distributions other than dividends payable on BFC’s currently outstanding preferred stock of approximately $187,500 a quarter or (iii) enter into any new agreements, contracts or arrangements or materially modify any existing agreements, contracts or arrangements with BankAtlantic not consistent with past practices.
          On September 21, 2009, BFC and Woodbridge consummated their merger pursuant to which Woodbridge merged with BFC. In connection with the merger, Dissenting Holders who collectively held approximately 4.2 million shares of Woodbridge’s Class A Common Stock exercised their appraisal rights and are entitled to receive an amount equal to the fair value of their shares calculated in accordance with Florida law. The Dissenting Holders have rejected Woodbridge’s offer of $1.10 per share and requested payment for their shares based on their respective fair value estimates of Woodbridge’s Class A Common Stock. In December 2009, the Company recorded a $4.6 million liability with a corresponding reduction to additional paid-in capital representing, in the aggregate, Woodbridge’s offer to the Dissenting Holders. However, the appraisal rights litigation is currently ongoing and its outcome is uncertain. There is no assurance as to the amount of cash that will be required to be paid to the Dissenting Holders, which amount may be greater than the $4.6 million that we have accrued.
          The Company owns 800,000 shares of Benihana’s Convertible Preferred Stock, which it purchased during 2004 for $25.00 per share. The Convertible Preferred Stock is convertible into Benihana’s Common Stock. Based on the number of currently outstanding shares of Benihana’s capital stock, the Convertible Preferred Stock, if converted, would represent an approximate 19% voting interest and an approximate 9% economic interest in Benihana’s capital stock. The Company receives cumulative quarterly dividends on its shares of Benihana’s Convertible Preferred Stock at an annual rate equal to 5% or $1.25 per share, payable on the last day of each calendar quarter. The Convertible Preferred Stock is subject to mandatory redemption of $20 million plus accumulated dividends on July 2, 2014 unless we elect to extend the mandatory redemption date to a date not later than July 2, 2024. Benihana is currently considering strategic alternatives, including a possible sale of the company. In the event that a sale transaction is consummated at a time when we continue to hold all 800,000 shares of the Convertible Preferred Stock, we would receive a minimum of $20 million in consideration for our shares of the Convertible Preferred Stock.
          On June 21, 2004, the Company sold 15,000 shares of its 5% Preferred Stock to an investor group in a private offering. The Company’s 5% Preferred Stock has a stated value of $1,000 per share. The shares of 5% Preferred Stock may be redeemed at the option of the Company, from time to time, at redemption prices ranging from $1,025 per share for the year 2011 to $1,000 per share for the year 2015 and thereafter. The 5% Preferred Stock liquidation preference is equal to its stated value of $1,000 per share plus any accumulated and unpaid dividends or an amount equal to the applicable redemption price in a voluntary liquidation or winding up of the Company. Holders of the 5% Preferred Stock have no voting rights, except as provided by Florida law, and are entitled to receive, when and as declared by the Company’s Board of Directors, cumulative quarterly cash dividends on each such share at a rate per annum of 5% of the stated value from the date of issuance. Since June 2004, the Company has paid quarterly dividends on the 5% Preferred Stock of $187,500. On December 17, 2008, the Company amended certain of the previously designated relative rights, preferences and limitations of the Company’s 5% Preferred Stock. The amendment eliminated the right of the holders of the 5% Preferred Stock to convert their shares of Preferred Stock into shares of the Company’s Class A Common Stock. The amendment also requires the Company to redeem shares of the 5% Preferred Stock with the net proceeds it receives in the event (i) the Company sells any of its shares of Benihana’s Convertible Preferred Stock, (ii) the Company sells any shares of Benihana’s Common Stock received upon conversion of Benihana’s Convertible Preferred Stock or (iii) Benihana redeems any shares of its Convertible Preferred Stock owned by the Company. Additionally, in the event the Company defaults on its obligation to make dividend payments on its 5% Preferred Stock, the amendment entitles the holders of the 5% Preferred Stock, in place of the Company, to receive directly from Benihana certain payments on the shares of

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BFC Activities
Benihana’s Convertible Preferred Stock owned by the Company or on the shares of Benihana’s Common Stock received by the Company upon conversion of Benihana’s Convertible Preferred Stock.
          The development activities at Carolina Oak which is within Tradition Hilton Head, were suspended in the fourth quarter of 2008 as a result of, among other things, an overall softening of demand for new homes and a decline in the overall economy. In 2009, the housing industry continued to face significant challenges and Woodbridge made the decision to cease all activities at Carolina Oak. Woodbridge was the obligor under a $37.2 million loan that was collateralized by the Carolina Oak property. Effective April 26, 2011, Woodbridge and Carolina Oak entered into a settlement agreement with the holder of the $37.2 million secured note to resolve the disputes and litigation between them. Under the terms of the settlement agreement, (i) Woodbridge paid $2.5 million to the note holder, (ii) Carolina Oak conveyed to the note holder the real property securing the loan and (iii) the note holder agreed not to pursue certain remedies, including a deficiency judgment, and after the expiration of an agreed-upon time, agreed to fully release Woodbridge and Carolina Oak, in each case subject to certain conditions. At March 31, 2011, the carrying amount of Carolina Oak’s inventory was approximately $10.8 million.
          During June 2008, Woodbridge entered into a settlement agreement (the “Settlement Agreement”) with the Debtors and the Joint Committee of Unsecured Creditors appointed in the Chapter 11 Cases (the “Joint Committee”). Pursuant to the Settlement Agreement, as it was subsequently amended, Woodbridge agreed to (i) pay $8 million to the Debtors’ bankruptcy estates (sometimes referred to herein as the “Debtors’ Estate”), (ii) place $4.5 million in a release fund to be disbursed to third party creditors in exchange for a third party release and injunction, (iii) make a $300,000 payment to a deposit holders fund and (iv) share a percentage of any tax refund attributable to periods prior to the bankruptcy with the Debtors’ Estate. In addition, Woodbridge agreed to waive and release substantially all of the claims it had against the Debtors, including administrative expense claims through July 2008, and the Debtors (joined by the Joint Committee) agreed to waive and release any claims they had against Woodbridge and its affiliates. On February 20, 2009, the Bankruptcy Court entered an order confirming a plan of liquidation jointly proposed by Levitt and Sons and the Joint Committee. That order also approved the settlement pursuant to the Settlement Agreement, as amended. The Company’s liability related to the Settlement Agreement at each of March 31, 2011 and December 31, 2010 was approximately $11.7 million, representing the portion of tax refunds that will likely be required to be shared with the Debtors’ Estate pursuant to the Settlement Agreement. As of March 31, 2011 and December 31, 2010, $8.4 million of such $11.7 million portion of the tax refund to be paid to the Debtors’ Estate was received and placed in an escrow account. The $8.4 million amount is included as restricted cash in the Company’s Consolidated Statements of Financial Condition.
          At June 30, 2009, a wholly-owned subsidiary of BFC/CCC had a 10% interest in a limited partnership as a non-managing general partner. The partnership owns an office building located in Boca Raton, Florida. In connection with the purchase of the office building in March 2006, BFC/CCC guaranteed repayment of a portion of the non-recourse loan on the property on a joint and several basis with the managing general partner. BFC/CCC’s maximum exposure under this guarantee agreement was $2.0 million (which was shared on a joint and several basis with the managing general partner). In July 2009, BFC/CCC’s wholly-owned subsidiary withdrew as a partner of the limited partnership and transferred its 10% interest to an unaffiliated partner. In return, the partner to whom this interest was assigned agreed to use its reasonable best efforts to obtain the release of BFC/CCC from the guarantee. The partner was unable to secure such a release and that partner has agreed to indemnify BFC/CCC’s wholly-owned subsidiary for any losses that may arise under the guarantee after the date of the assignment. No amounts are recorded in our financial statements at March 31, 2011 or December 31, 2010 for this joint venture.
          As described above, a wholly-owned subsidiary of BFC/CCC had a 10% interest in a limited liability company that owned two commercial properties in Hillsborough County, Florida. On March 25, 2011, the limited liability company reached a settlement with its lender and conveyed the commercial properties securing the loan via a deed in lieu of foreclosure. BFC and BFC/CCC’s wholly-owned subsidiary were released from all obligations and guarantees related to the two commercial properties. As of March 31, 2011, BFC recognized the negative basis of its investment of approximately $1.3 million which is included in earnings from unconsolidated affiliates.
          A wholly-owned subsidiary of BFC/CCC has a 50% limited partner interest in a limited partnership that has a 10% interest in a limited liability company that owns an office building in Tampa, Florida. At March 31, 2011 and December 31, 2010, the carrying amount of this investment was approximately $278,000 and $282,000, respectively, which is included in investments in unconsolidated affiliates in the Company’s Consolidated Statements of Financial Condition. In connection with the purchase of the office building by the limited liability company in June 2007, BFC guaranteed the payment of certain environmental indemnities and specific obligations that are not related to the financial performance of the asset up to a maximum of $15.0 million, or $25.0 million in

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the event of any petition or involuntary proceeding under the U.S. Bankruptcy Code or similar state insolvency laws or in the event of any transfer of interests not in accordance with the loan documents. BFC and the unaffiliated members also entered into a cross indemnification agreement which limits BFC’s obligations under the guarantee to acts of BFC and its affiliates. No amounts are recorded in the Company’s financial statements at March 31, 2011 or December 31, 2010 for the obligations associated with this guarantee based on the potential indemnification by unaffiliated members and the limit of the specific obligations to non-financial matters.

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Real Estate Operations Segment
          The Real Estate Operations segment includes the subsidiaries through which Woodbridge historically conducted its real estate business activities. These activities were concentrated in Florida and South Carolina and included the development and sale of land, the construction and sale of single family homes and townhomes and the leasing of commercial properties through Core prior to its liquidation in 2010 and Carolina Oak, which was engaged in homebuilding activities in South Carolina prior to the suspension of those activities in the fourth quarter of 2008. The Real Estate Operations segment also includes the operations of Cypress Creek Holdings, which engages in leasing activities.
Real Estate Operations
                         
    For the Three Months Ended March 31,  
    2011     2010     Change  
            (As Revised)          
Revenues:
                       
Other revenues
  $ 17       637       (620 )
 
                 
 
    17       637       (620 )
 
                 
 
                       
Costs and expenses:
                       
Interest expense, net
    1,402       3,310       (1,908 )
Selling, general and administrative expenses
    489       2,659       (2,170 )
 
                 
Total costs and expenses
    1,891       5,969       (4,078 )
 
                 
 
                       
Gain on settlement of investment in subsidiary
    11,305             11,305  
Interest income and other income
          53       (53 )
 
                 
Income (loss) before income taxes
    9,431       (5,279 )     14,710  
(Provision) benefit for income taxes
                 
 
                 
Income (loss) from continuing operations, net of taxes
    9,431       (5,279 )     14,710  
Discontinued operations:
                       
Net loss from discontinued operations, net of taxes
          (249 )     249  
 
                 
Net income (loss)
  $ 9,431       (5,528 )     14,959  
 
                 
For the Three Months Ended March 31, 2011 Compared to the Same 2010 Period
          Other revenues decreased to $17,000 for the three months ended March 31, 2011 compared to $637,000 for the same period in 2010. Other revenues recognized for the three months ended March 31, 2010 primarily consisted of rental income from a tenant whose lease agreement expired in March 2010. Additionally for the same period, other revenues included irrigation revenue earned at one of the five subsidiaries whose membership interests were pledged as additional collateral in the debt settlement agreement with one of Core’s lenders.
          Interest expense decreased to $1.4 million in the three months ended March 31, 2011 compared to $3.3 million for the same period in 2010. The decrease was primarily due to the release of approximately $112.30 million of debt as part of Core’s settlement agreement with its lenders.
          Selling, general and administrative expenses decreased to $489,000 for the three months ended March 31, 2011 from $2.7 million for the same period in 2010. The decrease was primarily a result of the cessation of operations at Core and Carolina Oak.
          Gain on settlement of investment in subsidiary of $11.3 million is attributable to the deconsolidation of five of Core’s subsidiaries, the membership interests in which were transferred to the lender upon settlement of $86.7 million in debt.

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Real Estate Operations-Liquidity and Capital Resources
          At March 31, 2011 and December 31, 2010, Core had cash and cash equivalents of $245,000 and $1.0 million, respectively.
          During 2010, demand for residential and commercial inventory showed no signs of recovery, particularly in the geographic regions where Core’s properties were located. In early 2010, Woodbridge made the decision to pursue an orderly liquidation of Core and worked cooperatively with the various lenders to achieve that objective. During November 2010, Core entered into a settlement agreement with one of its lenders, which had previously commenced actions seeking foreclosure of mortgage loans totaling approximately $113.9 million collateralized by property in Florida and South Carolina. Under the terms of the agreement, Core pledged additional collateral to the lender consisting of membership interests in five of Core’s subsidiaries and granted security interests in the acreage owned by such subsidiaries in Port St. Lucie, Florida, substantially all of which is undeveloped raw land. Core also agreed to an amendment of the complaint related to the Florida foreclosure action to include this additional collateral and an entry into consensual judgments of foreclosure in both the Florida and South Carolina foreclosure actions. In consideration therefore, the lender agreed not to enforce a deficiency judgment against Core and, in February 2011, released Core from any other claims arising from or relating to the loans. As of November 30, 2010, Core deconsolidated the five subsidiaries, the membership interests in which were transferred to the lender upon entry into the consensual judgments of foreclosure. In connection therewith, and in accordance with the accounting guidance for consolidation, the Company recorded a guarantee obligation “deferred gain on settlement of investment in subsidiary” of $11.3 million in the Company’s Consolidated Statement of Financial Condition as of December 31, 2010. Core received its general release of liability, and accordingly the deferred gain on settlement of investment in subsidiary was recognized into income, during the three months ended March 31, 2011. Approximately $27.2 million of the $113.9 million of mortgage loans described above is collateralized by property in South Carolina which had an estimated carrying value of approximately $19.4 million at March 31, 2011. This property is subject to separate foreclosure proceedings which are not expected to begin until later in the first half of 2011. While Core was released by the lender from any other claims relating to the loans, the applicable accounting guidance requires that the $27.2 million of debt and associated $19.4 million of collateral remain in Core’s financial statements until the foreclosure proceedings have been completed.
          In December 2010, Core and one of its subsidiaries entered into agreements, including without limitation, a Deed in Lieu of Foreclosure Agreement, with one of their lenders which resolved the foreclosure proceedings commenced by the lender related to property at Tradition Hilton Head which served as collateral for a $25 million loan. Pursuant to the agreements, Core’s subsidiary transferred to the lender all of its right, title and interest in and to the property which served as collateral for the loan as well as certain additional real and personal property. In consideration therefore, the lender released Core and its subsidiary from any claims arising from or relating to the loan. In accordance with applicable accounting guidance, this transaction was accounted for as a troubled debt restructuring and accordingly, a $13.0 million gain on debt extinguishment was recognized in December 2010.
Off Balance Sheet Arrangements and Contractual Obligations
          The following table summarizes our Real Estate and Other contractual obligations (excluding Bluegreen) as of March 31, 2011 (in thousands):
                                         
        Less than 12   13-36   37-60   More than
Category (1)   Total   months   Months   Months   60 Months
Long Term Debt Obligations(2)
  $ 160,805       64,657       510       10,586       85,052  
Operating Lease Obligations
    159       68       72       19        
     
Total Obligations
  $ 160,964       64,725       582       10,605       85,052  
     
 
(1)   Long-term debt obligations consist of notes, mortgage notes and bonds payable and junior subordinated debentures. Operating lease obligations consist of lease commitments. The timing of contractual payments for debt obligations assumes the exercise of all extensions available at our sole discretion. Long-term debt obligations and long-term debt obligations include defaulted loans totaling approximately $64.4 million as of March 31, 2011 of which repayment of the outstanding debt was accelerated by the lender and is currently being shown as immediately due and payable in less than 12 months.
 
(2)   These amounts include scheduled principal payments.

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          In addition to the above contractual obligations, we have $2.4 million in unrecognized tax benefits in accordance with accounting guidance for uncertainty in income taxes, which provides guidance for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return.
          Levitt and Sons, Woodbridge’s former wholly-owned homebuilding subsidiary, had approximately $33.3 million of surety bonds related to its ongoing projects at November 9, 2007, the date on which Levitt and Sons and substantially all of its subsidiaries filed voluntary bankruptcy petitions (the “Chapter 11 Cases”). In the event that these obligations are drawn and paid by the surety, Woodbridge could be responsible for up to $7.6 million plus costs and expenses in accordance with the surety indemnity agreements executed by Woodbridge. At March 31, 2011 and December 31, 2010, Woodbridge had $490,000 in surety bond accruals related to certain bonds where management believes it to be probable that Woodbridge will be required to reimburse the surety under applicable indemnity agreements. It is unclear whether and to what extent the remaining outstanding surety bonds of Levitt and Sons will be drawn and the extent to which Woodbridge may be responsible for additional amounts beyond the previous accrued amount. Woodbridge will not receive any repayment, assets or other consideration as recovery of any amounts it may be required to pay. In September 2008, a surety filed a lawsuit to require Woodbridge to post collateral against a portion of surety bond exposure in connection with demands made by a municipality. Based on claims by the municipality on the bonds, the surety requested that Woodbridge post a $4.0 million escrow deposit while the matter was being litigated with the municipality and while Woodbridge did not believe that the municipality had the right to demand payment under the bonds, Woodbridge complied with that request. In August 2010, a motion for summary judgment was entered in Woodbridge’s favor terminating any obligations under the bonds. The municipality has appealed the decision.

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Bluegreen
The Company’s consolidated financial statements for the three months ended March 31, 2011 and 2010 include the results of operations of Bluegreen. Bluegreen’s results of operations are reported through two reportable segments, which are Bluegreen Resorts and Bluegreen Communities. Bluegreen is a separate public company, and the following discussion is derived from or includes disclosure prepared by Bluegreen’s management and included in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2011. Accordingly, unless noted to the contrary or the context otherwise requires, references to the “Company”, “we”, “us” or “our” in the following discussion are references to Bluegreen and its subsidiaries, and are not references to BFC.
          Bluegreen’s results for the first quarter of 2011 reflect its continued focus on fee-based service business and its efforts to achieve selling and marketing efficiencies in its Bluegreen Resorts segment.
During the three months ended March 31, 2011
    Bluegreen generated “free cash flow” (cash flow from operating and investing activities) of $34.0 million.
 
    VOI system-wide sales, which include sales of third-party developer inventory, totaled $58.5 million, reflecting a 6% increase over the three months ended March 31, 2010.
 
    Bluegreen’s sales and marketing fee-based service business sold $16.9 million of third-party developer inventory and earned sales and marketing commissions of $10.8 million. Including Bluegreen’s resort management, resort title, construction management and other operations, Bluegreen’s total resort fee-based services revenues were $28.0 million, a 7% increase over the three months ended March 31, 2010.
 
    Bluegreen Communities’ business continues to experience low consumer demand for its homesites. On March 24, 2011, Bluegreen announced that it had engaged advisors to explore strategic alternatives for Bluegreen Communities, including a possible sale of the division.
 
    Bluegreen entered into a new sales and marketing fee-based agreement with the Manhattan Club in New York City.
     Bluegreen believes its fee-based service business enables Bluegreen to leverage its management, sales and marketing, mortgage servicing, title and construction experience to generate recurring revenues from third parties. Bluegreen’s provision of these services requires significantly less capital investment than its traditional vacation ownership business. During the first quarters of 2011 and 2010, Bluegreen sold $16.9 million and $15.8 million, respectively, of third-party inventory and earned sales and marketing commissions of approximately $10.8 million and$10.2 million, respectively. Based on an allocation of its selling, marketing and segment general and administrative expenses to these sales, Bluegreen believes it generated approximately $1.1 million and $0.9 million pre-tax profits by providing these sales and marketing fee-based services during the three months ended March 31, 2011 and 2010, respectively. In addition to the sales and marketing of third-party VOIs, Bluegreen also generated fee-based income by providing resort and reservation management services, title services, construction consulting services (where Bluegreen manages the construction, design and development of vacation ownership resorts for third parties), and mortgage servicing of the VOI notes originated from the sales of certain of the third-party VOIs. Bluegreen’s goal is for fee-based services to become an increasing portion of its resorts business over time; however, its efforts to do so may not be successful.
     Additionally, consistent with Bluegreen’s initiatives to improve liquidity, during the first quarter of 2011, Bluegreen continued to focus on entering into VOI sales that are 100% cash and encouraging larger down payments on financed sales. Including down payments received on financed sales, 59% of Bluegreen’s sales were realized in cash within approximately 30 days from the contract date during the first quarter of 2011. Refer to Liquidity and Capital Resources section below for additional information.
          On March 24, 2011, Bluegreen announced that it had engaged advisors to explore strategic alternatives for Bluegreen Communities, including a possible sale of the division. However, Bluegreen may not elect to pursue any of the strategic alternatives it may consider, and any such alternatives, if pursued, may not ultimately be consummated, or, if consummated may not result in improvements to Bluegreen’s financial condition and operating results or otherwise achieve the benefits Bluegreen expects to realize from the transaction. In addition, it is possible that Bluegreen’s announcement regarding strategic alternatives may have a material adverse effect on Bluegreen Communities’ operations. In the event that adverse conditions in the real estate market continue or deteriorate further, the carrying value of Bluegreen Communities’ inventory would be reevaluated and could result in additional impairment charges. Impairment charges may also be required to the extent that additional market information obtained during the strategic review process indicates that the carrying value of Bluegreen Communities’ inventory exceeds its fair value. Any such impairment charges may be material.

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          Bluegreen has historically experienced and expects to continue to experience seasonal fluctuations in its gross revenues and results of operations. This seasonality may result in fluctuations in Bluegreen quarterly operating results. Although Bluegreen typically sees more potential customers at its sales offices during the quarters ending in June and September, ultimate recognition of the resulting sales during these periods may be delayed due to down payment requirements for recognition of real estate sales under GAAP or due to the timing of development and the requirement that Bluegreen uses the percentage-of-completion method of accounting.
Bluegreen Segments Financial Results
          The following tables include the financial results of Bluegreen’s segments for the three months ended March 31, 2011 and 2010.
Bluegreen Resorts
                                 
    For the Three Months Ended March 31,  
    2011     2010  
            Percentage             Percentage  
    Amount     of Sale     Amount     of Sale  
            (dollars in thousands) (as revised)          
System-wide sales (1)
  $ 58,474               47,628          
Changes in sales deferred under timeshare accounting rules
    (516 )             (2,497 )        
Estimated uncollectible VOI notes receivable
    (4,714 )             (4,310 )        
 
                       
 
                               
System-wide sales, net
    53,244       100 %     40,821       100 %
Less: Sales of third party VOIs
    (16,910 )     -32 %     (15,754 )     -39 %
Adjustment to allowance for loan losses
                (461 )     -1 %
 
                       
Sales of real estate
    36,334       68 %     24,606       60 %
Cost of real estate sales (2)
    (7,225 )     -20 %     (2,735 )     -11 %
 
                       
Gross profit
    29,109       80 %     21,871       89 %
Fee-based sales commission
    10,764       20 %     10,180       25 %
Other resort fee-based services revenue
    17,200       32 %     15,670       38 %
Cost of other resort fee-based services
    (13,081 )     -25 %     (11,943 )     -29 %
Selling and marketing expenses
    (28,529 )     -54 %     (27,383 )     -67 %
Segment general and administrative expenses (3)
    (4,001 )     -8 %     (2,049 )     -5 %
 
                       
Segment operating profit
  $ 11,462       22 %     6,346       16 %
 
                       

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Bluegreen Communities
                                 
    For the Three Months Ended March 31,  
    2011     2010  
            Percentage             Percentage  
    Amount     of Sale     Amount     of Sale  
            (dollars in thousands)          
Gross sales of real estate
  $ 4,049               3,382          
Changes in sales deferred under timeshare accounting rules
    1,240               (136 )        
 
                       
Sales of real estate
    5,289       100 %     3,246       100 %
Cost of real estate sales (2)
    (2,450 )     -46 %     (5,368 )     -165 %
 
                       
Gross profit
    2,839       54 %     (2,122 )     -65 %
Other operations revenues
    434       8 %     351       11 %
Cost of other operations
    (886 )     -17 %     (747 )     -23 %
Selling and marketing expenses
    (1,093 )     -21 %     (1,021 )     -31 %
Segment general and administrative expenses (3)
    (1,314 )     -25 %     (1,603 )     -49 %
 
                       
Segment operating loss
  $ (20 )     0 %     (5,142 )     -158 %
 
                       
 
(1)   Includes sales of VOI’s made on behalf of third parties, which are transacted through the same process as the sale of Bluegreen’s VOI inventory.
 
(2)   Percentages for cost of sales and gross profit are calculated as a percentage of sales of real estate.
 
(3)   General and administrative expenses attributable to corporate overhead have been excluded from the tables. Corporate general and administrative expenses (excluding mortgage operations) totaled $10.6 million and $12.9 million for the three months ended March 31, 2011 and 2010, respectively. (See “Corporate General and Administrative Expenses” below for further discussion.
Bluegreen Resorts
Bluegreen Resorts — Resort Sales and Marketing
          The following table sets forth certain information for sales of both Bluegreen VOIs and VOI sales made on behalf of third-party for a fee for the periods indicated. The information is provided before giving effect to the deferral of Bluegreen VOI sales in accordance with timeshare accounting rules:
                 
    For the Three Months
    Ended March 31,
    2011   2010
Number of sales offices at period end
    20       21  
Number of Bluegreen VOI sales transactions
    3,522       3,478  
Number of sales made on behalf of third-party developers for a fee
    1,366       1,317  
 
               
Total VOI sales transactions
    4,888       4,795  
Average sales price per transaction
  $ 12,106     $ 11,712  
Number of total prospects tours
    32,284       29,553  
Sale-to-tour conversion ratio— total prospects
    15.1 %     16.2 %
Number of new prospects tours
    17,800       15,408  
Sale-to-tour conversion ratio— new prospects
    11.4 %     12.1 %
Percentage of sales to owners
    59.3 %     61.9 %
Sales of Real Estate. Sales of real estate for Bluegreen Resorts were $29.1 and $21.9 million during the three months ended March 31, 2011 and 2010, respectively. Sales of real estate for Bluegreen Resorts represents sales of Bluegreen-owned VOI’s, as adjusted by changes in sales deferred under timeshare accounting rules, the impact of

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estimated uncollectible VOI notes receivable on new loan originations, and adjustments, if any, to allowance for loan losses of existing VOI loans, as further described below.
VOI revenue is reduced by our estimate of future uncollectible VOI notes receivable. Estimated losses for uncollectible VOI notes receivable vary with the amount of financed sales during the period and changes in its estimates of future note receivable performance for newly originated loans and the future performance of our existing loan portfolio. During the three months ended March 31, 2011 and 2010, we reduced revenue by $4.7 million and $4.3 million, respectively, for the estimated future uncollectibles on loans originated in these periods.
Cost of Real Estate Sales. Bluegreen Resorts’ cost of sales was $7.2 million and $2.7 million during the three months ended March 31, 2011 and 2010, respectively. Included in the cost of real estate sales in March 2010 is $2.9 million of cost of real estate sales related to recognition of deferred revenue. Cost of sales of real estate varies between periods based on the sales volumes, the relative costs of the specific VOIs sold in each respective period and the size of the point package of the VOIs sold.
Fee-Based Sales Commission Revenue. Bluegreen earns commissions for the sales of third-party inventory upon the closing of the respective sales transaction.
During the three months ended March 31, 2011 and 2010, we sold $16.9 million and $15.8 million, respectively, of third-party developer inventory and earned sales and marketing commissions of $10.8 million and $10.2 million, respectively. We anticipate that fee-based services will be a greater portion of our revenues in the future although our efforts in this respect may not be successful.
Selling and Marketing Expenses. Selling and marketing expenses for Bluegreen Resorts were $28.5 million and $27.4 million during the three months ended March 31, 2011 and 2010, respectively. Sales and marketing expenses as a percentage of sales fluctuate due to the mix of marketing programs and incentives, lower commission costs, as well as average sales price. During the three months ended March 31, 2011 and 2010, the average sales price was $12,106 and $11,712, respectively, and such increase also contributed to the decrease in Bluegreen’s selling and marketing expense as a percentage of sales.
General and Administrative Expenses. General and administrative expenses for Bluegreen Resorts were $4.0 million and $2.0 million during the three months ended March 31, 2011 and 2010, respectively.
Resort Management and Other Services
          The following table sets forth pre-tax profit generated by Bluegreen’s resort management and other services (in thousands):
                 
    For the Three Months  
    Ended March 31,  
    2011     2010  
Resort management operations
  $ 6,714       5,821  
Title operations
    1,626       1,471  
Other
    (79 )     (14 )
 
           
Total fee-based service profit
    8,261       7,278  
Net carrying cost of developer inventory
    (4,142 )     (3,551 )
 
           
Total profit
  $ 4,119       3,727  
 
           
Other Resort Fee-Based Services Revenue. Bluegreen’s other resort fee-based services revenue consists primarily of fees earned for providing management services and fees earned for providing title services in connection with VOI transactions. In exchange for fess, we provided management services to the Bluegreen Vacation Club and to a majority of the property owners’ associations of our resorts. In connection with our management services provided to the Bluegreen Vacation Club, we manage the club reservation system, and provide owner services as well as billing and collections services.
Revenues generated by other resort fee-based services were $17.2 million and $15.7 million during the three months ended March 31, 2011 and 2010, respectively. Revenues related to other resort fee-based services increased in 2011 as a result of additional fees earned by providing services to more VOI owners and from managing more timeshare resorts on behalf of property owners’ associations. As of March 31, 2011, we managed 42 timeshare resort properties and hotels compared to 40 as of March 31, 2010. Additionally, our revenues related to title services

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increased due to the increase in the number of system-wide VOI sales transactions.
Cost of Other Resort Fee-Based Services. Cost of other resort fee-based services was $13.1 million and $11.9 million during the three months ended March 31, 2011 and 2010, respectively. The increase in the cost during 2011 is due to the additional service volumes described above. The net carrying cost of our unsold inventory fluctuates with the number of VOIs we own and the number of resorts subject to developer subsidy arrangements, as well as proceeds from rental and sampler activity. During the first quarter of 2011 and 2010, the carrying cost of our inventory was $6.8 million and $5.8 million, respectively, and was offset by rental and sampler revenues, net of expenses, of $2.7 million and $2.2 million, respectively.
Bluegreen Communities
          On March 24, 2011, Bluegreen announced that it had engaged advisors to explore strategic alternatives for Bluegreen Communities, including a possible sale of the division. However, Bluegreen may elect not to pursue any of the strategic alternatives it may consider when expected or at all, and any such alternatives, if pursued and ultimately consummated, may not result in improvements to Bluegreen financial condition and operating results or otherwise achieve the benefits Bluegreen expects to realize from the transaction. In addition, it is possible that Bluegreen’s announcement regarding strategic alternatives may have a material adverse effect on its Bluegreen Communities operations. In the event that adverse conditions in the real estate market continue to deteriorate further, the carrying value of Bluegreen Communities inventory would be reevaluated and could result in additional impairment charges. Impairment charges may also be required to the extent that additional market information obtained during the strategic review process indicates that the carrying value of Bluegreen Communities inventory exceeds its fair value. Any such impairment charges may be material.
Sales of Real Estate. Sales of real estate for Bluegreen Communities were $5.3 million and $3.2 million during the three months ended March 31, 2011 and 2010, respectively. During the first quarter of 2011, we substantially completed development in one of the phases of our Vintage Oaks at the Vineyard community, located in New Braunfels, Texas, which resulted in the recognition of $1.2 million of revenue that was previously deferred in accordance with the percentage-of-completion method of accounting. During the first quarter of 2010, the impact of the percentage-of-completion method of accounting did not have a significant impact on revenue. Excluding the impact of the percentage-of-completion method of accounting from both periods, Bluegreen Communities sales decreased by $0.6 million or 19% during the first quarter of 2011 as compared to the first quarter of 2010. Sales at Bluegreen Communities continue to be adversely impacted by the weak residential real estate market.
The table below sets forth the number of homesites sold by Bluegreen Communities and the average sales price per homesite for the period indicated, before giving effect to the percentage-of-completion method of accounting, and excluding sales of bulk parcels:
                 
    For the Three Months Ended March 31,
    2011   2010
Number of homesites sold
    46       66  
Average sales price per homesite
  $ 67,095       58,191  
The average sales price per homesite increased by $8,904 or 15% during the first quarter of 2011, compared to the first quarter of 2010, reflecting a higher percentage of sales of higher-priced homesites at our Vintage Oaks at the Vineyard community.
Cost of Real Estate Sales. Bluegreen Communities’ cost of real estate sales was $2.4 million and $5.4 million during the three months ended March 31, 2011 and 2010, respectively. During the first quarter of 2010, we recorded non-cash charges to cost of real estate sales of $3.0 million to write-down the inventory balances of certain phases of our completed properties to their estimated net realizable value. Variations in cost structures and the market pricing of homesites available for sale as well as the opening of phases of projects, which include premium homesites (e.g., water, frontage, preferred views, larger acreage homesites, etc.), also impact the gross margin of Bluegreen Communities from period to period.
Other Operations Revenues and Cost. During the three months ended March 31, 2011 and 2010, Bluegreen Communities’ other operations revenues were $0.4 million in both periods and the associated cost of other revenues was $0.9 million and $0.7 million, respectively. Other operations of Bluegreen Communities business include the

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operation of two daily fee golf courses. Bluegreen’s golf courses have historically generated operating losses as they are still in their early years of operations and are located within relatively new communities while the associated operating expenses and maintenance costs are fixed.
Selling and Marketing Expenses. Bluegreen Communities’ total selling and marketing expenses during the first quarter of 2011 were substantially at the same level with the expenses incurred during the first quarter of 2010.
General and Administrative Expenses. General and administrative expenses for Bluegreen Communities were $1.3 million and $1.6 million during the three months ended March 31, 2011 and 2010, respectively.
Interest Income and Interest Expense
Notes Receivable Portfolio. As of March 31, 2011, Bluegreen’s net interest spread from its notes receivable portfolio included the interest earned $682.0 million of notes receivable, net of interest expense incurred on $538.7 million of related receivable-backed debt. The following table details the sources of income and related expenses associated with our notes receivable portfolio (in thousands):
                 
    For the Three Months Ended March 31,  
    2011     2010  
Interest income:
               
VOI notes receivable
  $ 22,371       24,169  
Other
    62       45  
 
           
Total interest income
    22,433       24,214  
 
           
 
               
Servicing fee income
               
Fee-based services
    93       13  
 
           
Total income
    22,526       24,227  
 
           
 
               
Interest expense:
               
Receivable-backed notes payable
    10,942       11,736  
Cost of mortgage servicing operations
    998       730  
 
           
Total expense
    11,940       12,466  
 
           
Net interest on notes receivable portfolio
  $ 10,586       11,761  
 
           
Interest Income. Interest income was $22.4 million and $24.2 million during the first quarters of 2011 and 2010, respectively. The decrease in interest income during the first quarter of 2011 compared to 2010 is a result of the continued decrease in our VOI notes receivable portfolio, a result of both the maturing of the portfolio as well as our efforts to increase cash sales and higher down payments on those VOI sales that we do finance. We expect that our notes receivable portfolio will continue to decrease in the near term as more VOI sales are realized as cash.
Interest Expense. Interest expense on receivable-backed notes payable was $10.9 million and $11.7 million for the first quarters of 2011 and 2010, respectively. Bluegreen’s other interest expense, which is primarily comprised of interest on lines of credit and notes payable and on its subordinated debentures, was $4.0 million and $3.6 million during the first quarters of 2011 and 2010 respectively. Bluegreen’s effective cost of borrowing was 7.65% and 7.25% during the first quarters of 2011 and 2010, respectively.
Mortgage Servicing Operations. Bluegreen’s mortgage servicing operations include processing payments, and collection of notes receivable owned by Bluegreen, as well as on notes receivable owned by third parties. In addition, Bluegreen’s mortgage servicing operations facilitate the monetization of its VOI notes receivable through its various credit facilities, as well as perform monthly reporting activities for Bluegreen’s lenders and receivable investors. The cost of Bluegreen’s servicing operations was $0.9 million and $1.0 million during the first quarters of 2011 and 2010, respectively.
The servicing fee income represents mortgage servicing fees earned for servicing the loan portfolio of a third-party developer in connection with one of Bluegreen’s fee-based services arrangements. As of March 31, 2011, the total amount of notes receivable serviced by Bluegreen under this arrangement was $25.2 million. In April 2011, Bluegreen began providing mortgage servicing to another third party developer for whom Bluegreen also provides fee-based selling and marketing services.
Corporate General and Administrative Expenses. Bluegreen’s corporate general and administrative expenses

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consist primarily of expenses associated with administering the various support functions at Bluegreen’s corporate headquarters, including accounting, human resources, information technology, treasury, and legal. Overall corporate and general administrative costs may fluctuate between periods for various reasons, including but not limited to the timing of professional services and litigation expenses. In addition, consistent with Bluegreen’s segment reporting treatment, changes in the accrued payroll between reporting periods for the entire company are recorded as corporate general and administrative expense.
Corporate general and administrative expenses were $10.6 million and $12.9 million for the first quarters of 2011 and 2010, respectively. The $2.3 million, or 18%, decrease during the first quarter of 2011 compared to the first quarter of 2010 primarily relates to lower litigation costs and lower costs incurred for management consulting services.
For a discussion of field selling, general and administrative expenses, see discussion above.
Non-controlling Interest in Income of Consolidated Subsidiary. We include the results of operations and financial position of Bluegreen/Big Cedar Vacations, LLC, our 51%-owned subsidiary, in our consolidated financial statements. The non-controlling interests in income of consolidated subsidiary is the portion of our consolidated pre-tax income that is attributable to Big Cedar, LLC, the unaffiliated 49% interest holder in Bluegreen/Big Cedar Vacations, LLC. Non-controlling interest in income of consolidated subsidiary was $1.7 million and $1.6 million for the first quarters of 2011 and 2010, respectively.
Provision (benefit) for Income Taxes. Bluegreen’s effective income tax rate was approximately 40% and 42% during the first quarters of 2011 and 2010, respectively. Bluegreen’s quarterly effective income tax rates are based upon Bluegreen’s current estimated annual rate. Bluegreen’s annual effective income tax rate varies based upon its taxable earnings as well as on its mix of taxable earnings in the various states in which Bluegreen operates.
Bluegreen’s Liquidity and Capital Resources
Bluegreen’s primary sources of funds from internal operations are: (i) cash sales, (ii) down payments on homesite and VOI sales which are financed, (iii) proceeds from the sale of, or borrowings collateralized by, notes receivable, including cash received from our residual interests in such transactions, (iv) cash from our finance operations, including mortgage servicing fees and principal and interest payments received on the purchase money mortgage loans arising from sales of VOIs and homesites, and (v) net cash generated from our sales and marketing fee-based services and other resort fee-based services, including our resorts management operations.
As a result of initiatives implemented in the fourth quarter of 2008, we have in recent years realized higher down payments and a higher percentage of cash sales in connection with VOI sales compared to prior years. During the quarter ended March 31, 2011, including down payments received on financed sales, 59% of our VOI sales were paid in cash within approximately 30 days from the contract date.
While the vacation ownership business has historically been capital intensive, our principal goals in the current environment has been to emphasize the generation of “free cash flow” (defined as cash flow from operating and investing activities) by i) incentivizing our sales associates to generate higher percentages of our sales in cash compared to historical levels; ii) maintaining sales volumes that allow us to focus on what we believe to be the most efficient marketing channels available to us; iii) minimizing capital and inventory expenditures; and iv) utilizing our sales and marketing, mortgage servicing, resort management services, title and construction expertise to pursue fee-based-service business relationships that require minimal up-front capital investment and have the potential to produce strong cash flows for us.
Historically, our business model has depended on the availability of credit in the commercial markets. VOI sales are generally dependent upon us providing financing to our buyers. Our ability to sell and/or borrow against our notes receivable from VOI buyers has been a critical factor in our continued liquidity. When we sell VOIs, a financed buyer is only required to pay a minimum of 10% to 20% of the purchase price in cash at the time of sale; however, selling, marketing, and administrative expenses attributable to the sale are primarily cash expenses that generally exceed the buyer’s minimum required down-payment. Accordingly, having financing facilities available for the hypothecation, sale, or transfer of these VOI receivables has been a critical factor in our ability to meet our short and long-term cash needs and we have attempted to diversify our sources of such financing facilities. Historically, we have relied on our ability to sell receivables in the term securitization market in order to generate liquidity and create capacity in our receivable facilities. In addition, maintaining adequate VOI inventory to sell and pursue growth into

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new markets has historically required us to incur debt for the acquisition, construction and development of new resorts. Although we believe that we currently have adequate completed VOIs in inventory to satisfy our needs for the next several years, and therefore, expect acquisition and development expenditures to remain at current levels in the near term, we may decide to acquire or develop more inventory in the future, which would increase our acquisition and development expenditures and may require us to incur additional debt.
The challenging credit markets have negatively impacted our financing activities in the past several years. While the credit markets appear to be recovering and we consummated term securitizations and entered into new financing facilities during 2010 and the first quarter of 2011, the number of banks and other finance companies willing to provide “warehouse” lines of credit for timeshare receivables has decreased. As a result, we may not be able to renew our existing receivable-backed lines of credit when their current advance periods expire or secure new future financing for our VOI notes receivable on acceptable terms, if at all. In addition, the securitization market has become unavailable for extended periods of time in the past and may become unavailable to us in the future.
Further, while we may seek to raise additional debt or equity financing in the future to fund operations or repay outstanding debt, such financing may not be available to us on favorable terms or at all. If our efforts are unsuccessful, our liquidity would be significantly adversely impacted. In light of the current trading price of our common stock, financing involving the issuance of our common stock or securities convertible into our common stock would be highly dilutive to our existing shareholders.
Our levels of debt and debt service requirements have several important effects on our operations, including the following: (i) our significant debt service cash requirements reduce the funds available for operations and future business opportunities and increases our vulnerability to adverse economic and industry conditions, as well as conditions in the credit markets, generally; (ii) our leverage position increases our vulnerability to economic and competitive pressures; (iii) the financial covenants and other restrictions contained in indentures, credit agreements and other agreements relating to our indebtedness require us to meet certain financial tests and restrict our ability to, among other things, borrow additional funds, dispose of assets, make investments, or pay cash dividends on or repurchase common stock; and (iv) our leverage position may limit funds available for working capital, capital expenditures, acquisitions and general corporate purposes. Certain of our financing arrangements materially limit our ability to pay cash dividends on our common stock or our ability to repurchase shares in the near term. Certain of our competitors operate on a less leveraged basis and have greater operating and financial flexibility than we do.
Credit Facilities
The following is a discussion of our material purchase and credit facilities, including those that were important sources of our liquidity as of March 31, 2011. These facilities do not constitute all of our outstanding indebtedness as of March 31, 2011. Our other indebtedness includes outstanding junior subordinated debentures, borrowings collateralized by real estate inventories that were not incurred pursuant to a significant credit facility, and capital leases.
Credit Facilities for Bluegreen Receivables with Future Availability
Bluegreen maintains various credit facilities with financial institutions that provide receivable financing for our operations. We had the following credit facilities with future availability as of March 31, 2011 (dollars in thousands):
                                         
            Outstanding                      
            Balance             Advance Period        
    Borrowing     as of March     Availability as of     Expiration;     Borrowing Rate; Rate  
    Limit     31, 2011     March 31, 2011     Borrowing Maturity     as of March 31, 2011  
BB&T Purchase Facility(1)
  $ 75,000     $ 2,503     $ 72,497     December 2011; September 2023   Prime Rate +2.00%(2);
5.25%
Quorum Purchase Facility
    20,000       1,192       18,808     December 2011; December 2030   8.00%
NBA Receivables Facility(3)
    20,000       16,714       3,286     June 2011;
June 2018
  30 day LIBOR+5.25%;
6.75%(5)
2011 Liberty Bank Facility(1)(4)
    60,000       5,472       9,126     February 2013; February 2016   Prime Rate +2.25%; 6.50%(6)
 
                                 
 
  $ 175,000     $ 25,881     $ 103,717                  
 
                                 

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(1)   Facility is revolving during the advance period, providing additional availability as the facility is paid down, subject to eligible collateral and applicable terms and conditions.
 
(2)   The borrowing rate is subject to tiered increases once the outstanding balance equals or exceeds $25.0 million, subject to a maximum interest rate of the Prime Rate plus 3.5%, once the outstanding balance under the facility equals or exceeds $50.0 million.
 
(3)   Bluegreen has received a term sheet to amend its existing National Bank of Arizona (“NBA”) facility which would allow Bluegreen to pledge additional timeshare receivables up to the borrowing limit, with the additional advances not to exceed $5.0 million. The amount shown as “Availability as of March 31, 2011” and the dates under “Advance Period Expiration: Borrowing Maturity” are pro-forma, as if the amendment had been closed as of March 31, 2011. Bluegreen may not be successful in its efforts to enter into this amendment or the contemplated terms, or at all.
 
(4)   In February 2011, Bluegreen entered into a new revolving hypothecation facility with certain existing participants in the Liberty-led syndicate. The availability under the 2011 Liberty Bank Facility is reduced by the amounts outstanding to the extending participants under the 2008 Liberty Bank Facility, as the aggregate amount outstanding to such participants under the 2008 Liberty Bank Facility and the 2011 Liberty Bank Facility at any point in time cannot exceed $60.0 million. The amount outstanding under the 2008 Liberty Bank Facility to the extending participants was $45.4 million as of March 31, 2011.
 
(5)   Interest charged on this facility is subject to a floor of 6.75%
 
(6)   Interest charged on this facility is subject to a floor of 6.50%
BB&T Purchase Facility. We have a $75.0 million timeshare notes receivable purchase facility with Branch Banking and Trust Company (“BB&T”) (the “BB&T Purchase Facility”). The BB&T Purchase Facility provides a revolving advance period through December 17, 2011. The interest rates on future advances under the facility are the Prime Rate plus 2.0%, subject to tiered increases once the outstanding balance equals or exceeds $25.0 million, with a maximum interest rate of the Prime Rate plus 3.5% once the outstanding balance equals or exceeds $50.0 million. We receive all of the excess cash flows generated by the timeshare receivables transferred to BB&T under the facility (excess meaning after customary payment of fees, interest and principal under the facility) subject to the compliance with covenants and terms of the BB&T Purchase Facility. The BB&T Purchase Facility provides for the financing of our timeshare receivables at an advance rate of 67.5%, subject to the terms of the facility.
While ownership of the receivables is transferred for legal purposes, the transfers of receivables under the facility are accounted for as secured borrowings. Accordingly, the receivables are reflected as assets and the associated obligations are reflected as liabilities on our balance sheet. The BB&T Purchase Facility is nonrecourse and is not guaranteed by us.
During the first quarter of 2011, we pledged $3.7 million of VOI notes receivable to this facility and received cash proceeds of $2.5 million.
In April 2011, we pledged $4.9 million of VOI notes receivable to this facility and received cash proceeds of $3.3 million. Subsequent to this borrowing, Bluegreen had $69.2 million in availability under this facility.
Quorum Purchase Facility. On December 22, 2010, Bluegreen entered into a timeshare receivables purchase facility (the “Quorum Purchase Facility”) with Quorum Federal Credit Union (“Quorum”). The Quorum Facility allows for the sale of timeshare notes receivable on a non-recourse basis, pursuant to the terms of the facility and subject to certain conditions precedent. Quorum has agreed to purchase eligible timeshare receivables from us or certain of our subsidiaries up to an aggregate $20.0 million purchase price through December 22, 2011. The terms of the Quorum Purchase Facility reflect an 80% advance rate and a program fee rate of 8% per annum through August 31, 2011, and terms to be agreed upon through December 22, 2011. Eligibility requirements for receivables sold include, among others, that the obligors under the timeshare notes receivable sold be members of Quorum at the time of the note sale. The Quorum Purchase Facility contemplates the ability of Quorum to purchase additional receivables subject to advance rates, fees and other terms to be agreed upon from time to time over and above the initial $20.0 million commitment, pursuant to the terms of the facility and subject to certain conditions precedent. Subject to performance of the collateral, Bluegreen will receive all of the excess cash flows generated by the receivables transferred to Quorum under the facility (excess meaning after customary payment of fees and return of amounts invested by Quorum under the facility on a pro-rata basis as borrowers make payments on their timeshare loans).
During the first quarter of 2011, we pledged $1.4 million of VOI notes receivable to this facility and received cash proceeds of $1.1 million.
In April 2011, Bluegreen pledged $0.8 million of VOI notes receivable to this facility and received cash proceeds of $0.6 million. Subsequent to this borrowing, and based on subsequent repayments, Bluegreen had $18.2 million in availability under this facility.
NBA Receivables Facility. In September 2010, Bluegreen/Big Cedar Joint Venture entered into a $20.0 million

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timeshare receivables hypothecation facility with NBA (“NBA Receivable Facility”). Bluegreen Corporation has guaranteed the full payment and performance of Bluegreen/Big Cedar Joint Venture in connection with this facility. The NBA Receivable Facility provides for an 85% advance on $23.5 million of eligible receivables, all of which were pledged under the facility at closing, subject to terms and conditions which Bluegreen believes to be customary for facilities of this type. All principal and interest payments received on pledged receivables are applied to principal and interest due under the facility, with the remaining balance due in September 2017. Indebtedness under this facility bears interest at the 30-day LIBOR plus 5.25%, subject to a floor of 6.75% (6.75% as of March 31, 2011). During the first quarter of 2011, we repaid $1.6 million on this facility.
Bluegreen has received a term sheet to amend its existing NBA Receivable Facility which would allow Bluegreen to pledge additional timeshare receivables up to the borrowing limit, with the additional advances not to exceed $5.0 million. Bluegreen may not be successful in its efforts to enter into this amendment or the contemplated terms, or at all.
2011 Liberty Bank Facility. In February 2011, we entered into a new revolving hypothecation facility with certain participants in our 2008 Liberty Bank Facility (see discussion of our 2008 Liberty Bank Facility below, under Other Outstanding Receivable-Backed Notes Payable). This new $60.0 million facility (“2011 Liberty Bank Facility”) provides for an 85% advance on eligible receivables pledged under the facility during a two-year period ending in February 2013, subject to eligible collateral and terms and conditions we believe to be customary for transactions of this type. Availability under the 2011 Liberty Bank Facility is reduced by amounts outstanding to certain syndicate participants under the 2008 Liberty Bank Facility ($45.4 million as of March 31, 2011), but as the outstanding amounts on the 2008 Liberty Bank Facility amortize over time, the 2011 Liberty Bank Facility will revolve up to $60.0 million. Principal and interest are repaid as cash is collected on the pledged receivables, with the remaining balance due in February 2016.
Indebtedness under the 2011 Liberty Bank Facility bears interest at the Prime Rate plus 2.25%, subject to a floor of 6.5% (6.5% as of March 31, 2011).
During the first quarter of 2011, Bluegreen pledged $6.6 million of VOI notes receivable to this facility and received cash proceeds of $5.6 million, of which Bluegreen repaid $0.1 million.
Other Outstanding Receivable-Backed Notes Payable
Bluegreen has outstanding obligations under various receivable-backed credit facilities that have no remaining future availability as the advance periods have expired. Bluegreen had the following outstanding balances under such credit facilities as of March 31, 2011 (dollars in thousands):
                         
                    Borrowing Rate;  
    Balance as of     Borrowing     Rate as of March 31,  
    March 31, 2011     Maturity     2011  
2008 Liberty Bank Facility
  $ 61,912     August 27, 2014   Prime + 2.25%; 6.50%(1)
GE Bluegreen/Big Cedar Facility
    21,574     August 16, 2016   30 day LIBOR+1.75%; 1.99%
Legacy Securitization(2)
    20,769     September 2, 2025   12.00%
RFA Receivables Facility
    2,649     February 15, 2015   30 day LIBOR+4.00%; 4.24%
Non-recourse Securitization Debt
    405,865     Varies   Varies
 
                     
 
  $ 512,769                  
 
                     
 
(1)   Interest charged on this facility is subject to a floor of 6.50%

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(2)   Legacy Securitization debt bears interest at a coupon rate of 12% and was issued at a discount resulting in an effective yield of 18.5%. The associated debt balance is presented net of the discount of $2.4 million.
2008 Liberty Bank Facility. Bluegreen has a $75.0 million revolving timeshare receivables hypothecation facility with a syndicate of lenders led by Liberty Bank and assembled by Wellington Financial (“2008 Liberty Bank Facility”). Amounts borrowed under the facility and incurred interest are repaid as cash is collected on the pledged receivables. The advance period under the 2008 Liberty Bank Facility has expired, and all outstanding borrowings are scheduled to mature no later than August 27, 2014. During the first quarter of 2011, Bluegreen repaid $5.6 million on this facility.
In February 2011, Bluegreen entered into the 2011 Liberty Bank Facility, a new revolving hypothecation facility with certain existing participants in the Liberty-led syndicate. See Credit Facilities for Bluegreen Receivables with Future Availability above for further information regarding the 2011 Liberty Bank 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 are scheduled to mature no later than April 16, 2016. 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 the first quarter of 2011, we repaid $2.3 million on this facility.
Legacy Securitization. In September 2010, we completed a securitization transaction of the lowest FICO®-score loans previously financed in the BB&T Purchase Facility. Substantially all of the timeshare receivables included in this transaction were generated prior to December 15, 2008, the date that we implemented our FICO® score-based credit underwriting program, and had FICO® scores below 600.
In this securitization, BXG Legacy 2010 LLC, a wholly-owned special purpose subsidiary of Bluegreen, issued $27.0 million of notes payable secured by a portfolio of timeshare receivables totaling $36.1 million. While the notes payable have a coupon rate of 12%, they were sold at a $2.7 million discount to yield an effective rate of 18.5%. The notes payable generated gross proceeds to us of $24.3 million (before fees and reserves and expenses we believe to be customary for transactions of this type), which were used to repay a portion of the outstanding balance under the BB&T Purchase Facility.
Bluegreen guaranteed the principal payments for defaulted vacation ownership loans in the Legacy Securitization at amounts equivalent to the then-current advance rate inherent in the notes, any shortfalls in monthly interest distributions to the Legacy Securitization investors and any shortfall in the ultimate principal payment on the notes upon their stated maturity in September 2025. During the first quarter of 2011, we repaid $2.2 million on this facility.
Credit Facilities for Bluegreen Inventories without Existing Future Availability
Bluegreen has outstanding obligations under various credit facilities and other notes payable collateralized by our Bluegreen Resorts or Bluegreen Communities inventories. As of March 31, 2011, these included the following significant items (dollars in thousands):

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    Balance as of              
    March 31,     Borrowing     Borrowing Rate; Rate as of  
    2011     Maturity(1)     March 31, 2011  
RFA AD&C Facility
  $ 47,694     Varies by loan (2)   30 day LIBOR+4.50%; 4.76%
H4BG Communities Facility
    29,122     December 31, 2012   Prime + 2.00%;
8.00% (3)
Textron AD&C Facility
    8,538     Varies by loan (2)   Prime + 1.25 – 1.50%; 4.50% – 4.75%
Wells Fargo Term Loan
    27,501     April 30, 2012   30 day LIBOR + 6.87%; 7.11%
 
                     
 
  $ 112,855                  
 
                     
 
(1)   Repayment of the outstanding amount is effected through release payments as the related collateral is sold, subject to periodic minimum required amortization between March 31, 2011 and maturity.
 
(2)   The maturity dates for this facility vary by loan as discussed below.
 
(3)   The interest rate on this facility is subject to the following floors: (1) 8.0% until the balance of the loan is less than or equal to $20 million, and (2) 6.0% thereafter.
RFA AD&C Facility. In September 2010, GMAC assigned all rights, title, and interest in this facility (previously known as GMAC AD&C Facility) to Resort Finance America, LLC (“RFA”). This assignment did not affect any of the material financial terms of the loan agreement. This facility was used to finance the acquisition and development of certain of our resorts and currently has one outstanding project loan. The maturity date for the project loan collateralized by our Bluegreen Club 36TM resort in Las Vegas, Nevada (the “Club 36 Loan”) is June 30, 2012. Approximately $47.7 million was outstanding on the Club 36 Loan as of March 31, 2011, $25.