Q2 2009 Overview

– Net income rose to $6.8 million, or $0.22 per share, from $3.4 million, or $0.11 per share, in Q2 2008 — Q2 2009 net income included a one-time income tax benefit of $4.6 million, or $0.15 per share

– Pre-tax income was $5.7 million in Q2 2009 as compared to $6.9 million in Q2 2008

– Resorts sales of $52.0 million in Q2 2009 as compared to $107.1 million in Q2 2008 — Reflects the deliberate reduction of Bluegreen-financed Resort sales in light of the challenging commercial credit markets

– Despite lower sales, Resorts Field Operating Profit (1) increased to $6.0 million in Q2 2009 as compared to $5.4 million in Q2 2008

– Bluegreen Communities sales decline to $4.6 million in Q2 2009 compared to $13.0 million in Q2 2008

– Rollout of fee-for-service business model progressing

– Unrestricted cash and equivalents of $66.3 million at June 30, 2009

– Book value of $12.80 per share

Bluegreen Corporation (NYSE: BXG), a leading provider of Colorful Places to Live and Play(R), today announced financial results for the second quarter ended June 30, 2009.

John M. Maloney Jr., President and Chief Executive Officer of Bluegreen, commented, “We believe that our strong second quarter results both validate and reflect the success of our previously announced corporate strategic initiatives, which were implemented to mitigate the effects of significantly contracted commercial credit markets and weak general economic conditions. Although Resorts sales were lower, reflecting the deliberate downsizing of our sales and marketing operations, expenses declined, sales efficiencies improved, and we maintained pre-tax and after-tax profitability. Our Resorts owner base increased, sales to existing owners rose, and prospect conversion rates improved compared to the same period in 2008. We continue to focus on generating and preserving cash in light of the current credit environment. As previously announced, we reached separate agreements with lenders that extended the maturities of existing credit facilities with an aggregate of approximately $130.1 million outstanding, and also extended the revolving advance period under an existing $150 million revolving timeshare receivables purchase facility. We continue to work with current and potential lenders to extend the maturities of our debt and to secure additional financing. We are also continuing to explore various potential alternative avenues to obtain new sources of liquidity. Cash sales at Resorts — either at closing or within thirty days — represented 42% of our Resorts sales during the second quarter of 2009, up significantly from the same period last year and further improved compared to the 40% generated in the first quarter of 2009. We also benefited from decreased cash requirements as a result of lower sales and marketing expenses, and reduced our capital spending for inventory and fixed assets without compromising the customer experience.

(1) Field operating profit (loss) is defined as operating profit (loss) prior to the allocation of corporate overhead, interest income, sales of notes receivable, other income (expense) net, interest expense, non-controlling interest, restructuring charges, goodwill impairment charges and income taxes.

“Our plan to increase revenues from fee-based businesses is also beginning to gain traction. As announced in July, we signed contracts with four third-party resort developers to provide a broad range of timeshare services and product offerings, leveraging our expertise in sales and marketing, resort management and administration.”

Lower Resorts sales during the second quarter of 2009 reflected the deliberate downsizing of the Company’s sales and marketing operations in connection with strategic initiatives implemented in the fourth quarter of 2008 to better position Bluegreen in the current credit and economic environment. During the second quarter of 2009, Bluegreen operated 18 sales offices as compared to 28 sales offices in the second quarter of 2008.

Gross profits from other resort services in the second quarter of 2009 was $6.3 million, or 46.8% of the related revenues, as compared to $6.5 million, or 43.1% of the related revenues, in the same period last year. As referenced above, Bluegreen is continuing to focus on growing its resorts management services business, which is cash-based and therefore has historically not been dependent on the credit markets.

Field Operating Profit rose to $6.0 million, or 10% of contract sales, from $5.4 million, or 4% of contract sales, in the second quarter of 2008.

Bluegreen’s owner base increased to 213,000 at June 30, 2009 from 209,300 at March 31, 2009. As expected, VOI (Vacation Ownership Interest) sales transactions and tour flow declined reflecting the impact of the strategic initiatives; however, total prospect conversion rates and new prospect conversion rates increased compared to the prior year period. Bluegreen believes this is a reflection of the quality of its products and services, the professionalism of its sales associates and its focus on what it believes to be its most efficient and effective marketing channels.

Selling and marketing expenses in the second quarter of 2009 declined to 47% of gross sales of real estate from 62% in the second quarter of 2008. Total field operating expenses also declined to 56% of gross sales of real estate from 67% in the same period one year ago. Bluegreen believes that these efficiencies primarily resulted from the implementation of the strategic initiatives, as well as from a higher percentage of sales to existing owners during the second quarter of 2009 (53%) as compared to the second quarter of 2008 (44%), which generally require lower associated marketing costs compared to new prospects.

Delinquencies over 30 days on the total serviced timeshare receivables portfolio at June 30, 2009 were 4.9% of a serviced portfolio of approximately $846 million in receivables, compared to 5.7% of a serviced portfolio of approximately $879 million at March 31, 2009. The average annual default rate rose to 11.6% for the 12 months ended June 30, 2009 from 8.2% for the 12 months ended June 30, 2008. Although Bluegreen believes that the increase in the default rate is primarily a function of the growing unemployment rate in the United States, the Company expects that the performance of loans originated in 2009 will reflect our newly-implemented initiatives, which included new underwriting standards and a focus on obtaining increased down payments at the time of sale.

(2) It is expected that these amounts will be recognized in future periods ratably with the development of Communities projects.

Sales at Bluegreen Communities continue to be adversely impacted by the deterioration of the general economy and the real estate markets, in particular. There has been a decline in demand for the Company’s homesites, especially for higher priced premium homesites. Traditional media-based advertising channels have proven to be less effective in the current market environment, and therefore Bluegreen Communities has transitioned its marketing focus primarily to regional, Internet-based programs. During the second quarter of 2009, the Company experimented with various promotions, including price reductions on completed homesites at certain communities. While these promotions generated sales volume during the quarter, it was the primary reason why cost of sales of real estate increased as a percentage of sales. Bluegreen Communities continues to focus its efforts on reducing its costs in response to declining sales volumes.

SELECTED OTHER FINANCIAL INFORMATION
Net interest spread (interest income minus interest expense) was $9.6 million for the second quarter of 2009 compared to $11.5 million in the same period last year, reflecting higher interest expense due to a higher average aggregate balance of debt, primarily related to the Company’s accounting for all receivable financing transactions as “on-balance sheet” since March 2008. Higher interest expense was partially offset by higher interest income earned on notes receivable, both as a result of having more notes receivable on Bluegreen’s balance sheet and due to an interest rate increase on loans originated after November 1, 2008.

ABOUT BLUEGREEN CORPORATION
Founded in 1966 and headquartered in Boca Raton, FL, Bluegreen Corporation (NYSE:BXG) is the leader in providing Colorful Places to Live and Play(R) through its vacation ownership resort and residential real estate business segments. Our more than 3,100 employees are passionate about delivering extraordinary experiences for our owners, travelers and business partners. Since 1994, Bluegreen has managed, marketed and sold a flexible, real estate-based vacation ownership plan, currently with more than 213,000 owners, 50 resorts, and access to more than 3,700 resorts worldwide. Since 1985, Bluegreen Communities has developed master-planned residential and golf communities primarily in the southern and southeastern U.S., and has sold over 55,000 homesites. We also offer a portfolio of comprehensive, turnkey, fee-for-service resort management, financial services, customer generation and sales solutions to third-party developers and lenders. For more information, visit www.bluegreencorp.com.

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Tags: Bluegreen Corporation, John Maloney, real estate, Vacation Ownership