Annual Report 2003 2002
CORPORATE PROFILE Annual Report
COLORFUL Founded more than 30 years ago,
Bluegreen Corporation (NYSE: BXG)
is one of the leading providers of
vacation ownership resorts and
residential communities in the
United States. Bluegreen’s Resort
Division develops, markets and
operates vacation ownership resorts PLACES in seven states and Aruba. These
vacation ownership opportunities are
offered primarily through the Bluegreen
Vacation Club,® a points-based system
that provides its 80,000+ members
with the flexibility they desire to
enjoy resort vacations, cruises and
TO LIVE other travel benefits. Bluegreen
Communities develops and markets
planned residential communities
predominately in the Southeastern
and Southwestern United States.
Headquartered in Boca Raton, Florida,
Bluegreen Corporation employs
more than 2,600 people. AND PLAY LETTER TO THE SHAREHOLDERS
Dear Fellow Shareholder:
Bluegreen’s results for the nine-month creative sales and marketing strategies,
period that comprised Fiscal 2002 quality products and a sound fiscal
were among the best in our history, foundation, allowed Bluegreen
highlighted by increased sales in to prosper despite the economic and
Bluegreen Resorts and Bluegreen global uncertainties that marked
Communities. We arranged more Fiscal 2002. The results of this
than 100,000 vacations, a record approach are also illustrated in the
SOLARA SURFSIDE, SURFSIDE FLORIDA for any year, but especially meaningful testimonials contained in this Report, Grand Opening January 2003 in light of a weak economy. At the each of which is a matter of much
same time, we decreased our cost corporate and personal pride.
of doing business.
We recognize that owning a home and
Our success was no accident. Every enjoying time away with friends and
day, we draw upon a rich tradition of loved ones are part of the American
providing superior customer experiences fabric; these threads have been woven
that are rooted in a 30-year history of even tighter over the last couple of
® “We had high expectations for our honeymoon, and Bluegreen developing Bluegreen Communities years. We believe that the Colorful exceeded them. The staff at Solara SurfsideTM went out of their and has been honed by nearly a decade Places to Live and Play® offered by way to make sure that everything was perfect. Because of them, of owning and managing timeshare Bluegreen Communities and Bluegreen and everyone we dealt with at Bluegreen, we’ll always have properties across the country and in Resorts provide a quality experience to special memories of our honeymoon. It was a great way to start the Caribbean. Our deep respect for the consumer because it is an experience our new life together.” the consumer, combined with that is tailored to fit their lifestyle.
Kedra & Greg Bodnar • Avon Lake, Ohio SOLARA SURFSIDE
The 32 properties within the Bluegreen During Fiscal 2002, our resorts and
Vacation Club® and Aruba are located communities businesses produced in some of the most beautiful and an increased rate of repeat purchases exciting vacation destinations. Except and new business generated via for Aruba, each is within driving referral from existing owners. We distance of most major U.S. population believe that this speaks to the high centers. The points-based Bluegreen quality experience that Bluegreen
Vacation Club provides the flexibility provides to its customers. It also had a necessary for our customers to take positive impact on marketing costs. several getaways at different resorts throughout the year or to enjoy an We consistently invest in new and extended vacation at one resort. innovative technologies that allow
Bluegreen Communities offer diverse us to better understand our markets and rewarding lifestyles for families and ensure the high standards of of all ages. Customers can settle quality and customer service that help down in planned communities that define who we are as a company. blend with the area’s natural beauty Life and leisure preferences must be or live a country club lifestyle in a catered to, and even anticipated, in a VACATIONS Bluegreen Golf Community and live time when there is no shortage of MAKE just steps away from award-winning options for the consumer. Offering MEMORIES FOR A golf courses and other amenities. high-quality products and service LIFETIME is not enough; understanding the needs
of our customers – and then using
that understanding as the basis for
how we conduct our business – has
become as important as the products
and services we provide. Golf at Top of the Rock
The Bluegreen Vacation Club’s points-based system allows owners to create unique vacation experiences, tailored to their WHAT IS YOUR IDEA OF A GREAT VACATION? WHAT IS YOUR IDEA OF A GREAT VACATION? WHAT IS YOUR IDEA OF A GREAT VACATION? own needs. And this flexibility is In October we acquired substantially all The importance of technology has
TM Fishing on Table Rock Lake one of the key components to the of the assets of TakeMeOnVacation, LLC not overshadowed our belief that continued growth and success and affiliates, which generates qualified relationships are key to attracting and of the Bluegreen Vacation Club. sales leads for our resorts business. retaining customers. This is one reason This acquisition marks the beginning why we believe that our 10-year
of an aggressive implementation of agreement to market the Bluegreen
permission marketing strategies, Vacation Club in Bass Pro Shops®
where potential customers agree in locations across the country, as well
advance to be contacted by a as to its catalog subscribers, produced
Bluegreen representative. We believe such encouraging results in Fiscal 2002.
that the proprietary software we Through our association, we hope to
acquired as part of this acquisition will engender the same type of brand and WHAT IS YOUR IDEA OF A GREAT VACATION? WHAT IS YOUR IDEA OF A GREAT VACATION? WHAT IS YOUR IDEA OF A GREAT VACATION? improve the way we target prospective customer loyalty for our resorts that
resort buyers and improve operating have made Bass Pro Shops such a Dogwood Canyon Nature Park efficiencies. We also upgraded our successful and enduring enterprise.
interactive capabilities so that consumers We look forward to continuing to
can better customize their vacation expand our presence in existing and
and lifestyle experiences, and expect to future Bass Pro Shops locations.
make additional upgrades in 2003. EXPANSION, ACQUISITION AND DEVELOPMENT
In Fiscal 2002 we strengthened our
presence in the Midwest by introducing
the Bluegreen Vacation Club® to Locating and developing Resorts Boyne Mountain, Michigan. Boyne and Communities to broaden our Mountain is part of Boyne USA portfolio and provide exciting new Resorts, one of the largest privately-held experiences for our customers is a resort companies in North America. primary part of our growth strategy. We also expanded westward with
the acquisition of unsold timeshare
intervals from existing inventory at
Big Sky, Montana. Each of these
properties carries strong regional brand
recognition. We also opened Solara
SurfsideTM near Miami Beach, Florida
to meet our need for non-seasonal,
upscale beachfront property that can
be easily integrated into the Bluegreen
Vacation Club. These new locations
are consistent with Bluegreen’s overall
expansion strategy, as each is rich in
amenities and is within easy driving
distance from major metropolitan areas. BLUEGREEN COMMUNITIES
THE GOLF CLUB AT BRICKSHIRE • New Kent, Virginia BRICKSHIRETM New Kent, Virginia BLUEGREEN COMMUNITIES BLUEGREEN COMMUNITIES BLUEGREEN COMMUNITIES BLUEGREEN COMMUNITIES
“The staff at Brickshire bend over backwards to make you feel welcome. It has been an exceptionally pleasant experience, and we can’t wait to move in.”
Dr. Moorad Mooradian Springfield, Virginia
MYSTIC SHORES • Canyon Lake, Texas
BLUEGREEN COMMUNITIES BLUEGREEN COMMUNITIES BLUEGREEN COMMUNITIES BLUEGREEN COMMUNITIES
Bluegreen Communties is also developing Silver Lakes RanchTM expands Bluegreen’s
new properties in areas of the country presence in the state of Texas, joining
where we have achieved success. existing Bluegreen Communities like
Catawba Falls PreserveTM will join two Mystic Shores,TM WaterStone,TM
other successful Bluegreen Communities Lake Ridge,TM Mountain Lakes Ranch,TM
currently operating in the state of Ridge Lake Shores,TM Riverwood ForestTM
North Carolina – The Preserve at Jordan and Fairway Crossing.TM In 2003,
LakeTM and Winding River Plantation,TM we also expect to acquire and develop
both of which are substantially sold out. The Traditions of Braselton,TM a
LAKE RIDGE • Cedar Hill, Texas Sales at Catawba Falls Preserve are Bluegreen Golf Community near
expected to commence in 2003. Atlanta, Georgia. FISCAL 2002 FINANCIAL HIGHLIGHTS
BRUSHY CREEK POINT, OWNER’S LOUNGE Big Cedar Wilderness Club • Ridgedale, Missouri
Outstanding customer experiences •Bluegreen Resorts sales rose 30% •Selling, general & administrative do far more than burnish corporate to $144.0 million; (“S, G &A”) expenses declined as
image. We believe that it had a a percentage of total operating significant effect on our operating •Bluegreen Communities sales revenues, despite $1.8 million in results in Fiscal 2002. As previously were up 6% to $78.6 million from higher S, G &A expenses incurred
announced, Bluegreen changed its last year. With the exception of during the period as a result of a
fiscal year during 2002. Therefore, one new project, no new projects change in accounting principle;
our discussion of results for Fiscal 2002 were introduced during the year, will refer to the period beginning meaning that the sales increase •Net income was $9.8 million, April 1st and ending December 31st; and profitability achieved by this or $.39 per share, versus net
the discussion of results for Fiscal 2001 segment of our business was almost income of $10.7 million, or
will refer to the comparable prior entirely “same-store” driven; $.41 per share, last year. Results for
year period. Fiscal 2002 were impacted by a •Total operating revenues cumulative effect of a change in increased 24% to $272.0 million. accounting principle that reduced
This included a 41% increase in net income by $5.9 million (net of
other resort and golf operations tax), or $.19 per share;
revenue and a 138% rise in gain on sale of notes receivable; •Income before cumulative effect of change in accounting principle •Total cost of sales remained increased 44% to $15.4 million, stable at 35%, despite a 21% or $.58 per share, versus income
increase in total sales; of $10.7 million, or $.41 per share,
last year.
“We’ve had wonderful vacations at Big Cedar® that we’ve shared with our whole family. Our grandchildren love the clubhouse so much, we never even have to leave the resort. And after experiencing the same level of service during our visit to Christmas Mountain, we can’t wait to stay at the other resorts in the Club.”
Bill Fry, Kansas City, Missouri BIG CEDAR WILDERNESS CLUBTM Owner, Big Cedar Wilderness Club
Brushy Creek Clubhouse • Indoor Pool Bluegreen’s financial position improved development and construction and training programs, such as the
significantly during Fiscal 2002. revolving credit facility with Residential Bluegreen Institute; and enhancing the
The Company’s balance sheet at Funding Corporation (GMAC-RFC value of our shareholders’ investment in
December 31, 2002 was highlighted by Resort Finance). We believe that the Company. Each of these initiatives
a book value of $6.44 per share and a the capital structure we now have in will be driven by, and supportive of,
debt-to-equity ratio of 1.16:1. place is sufficient to fund our growth enhancing the vacation and lifestyle
plans for 2003. experiences of our customers.
During Fiscal 2002, we strengthened
our balance sheet through the As previously reported, BankAtlantic On behalf of the Company, its Board
repayment of all $6.0 million of Bancorp, Inc. (NYSE: BBX) and of Directors, officers and employees,
Bluegreen’s 8% convertible subordinated its subsidiary, Levitt Companies, LLC, I thank you for your continued support.
THE PRESERVE AT JORDAN LAKE THE PRESERVE AT JORDAN LAKE notes, signed a $50 million acquisition & now own approximately 40% of
development revolving credit facility Bluegreen’s outstanding stock. Sincerely,
with Residential Funding Corporation This relationship remains strong
(dba GMAC Residential Construction), and we appreciate their confidence
which we expect will be utilized by and support. George F. Donovan Bluegreen Communities, and completed President & Chief Executive Officer
a $170.2 million private offering of Our objectives for 2003 include:
timeshare loan-backed securities with increasing sales at Bluegreen Resorts MOUNTAINLOFT ING Financial Markets, representing and Bluegreen Communities; capturing
the largest such offering in the potential owners as effectively and
Company’s history. In February 2003, efficiently as possible by utilizing
we signed a $50 million revolving technology to its fullest extent and
timeshare receivables credit facility and broadening our sales and marketing
a $15 million timeshare acquisition, programs; promoting internal education BOARD OF DIRECTORS CORPORATE OFFICERS CORPORATE DATA
Alan B. Levan, Chairman George F. Donovan Legal Counsel President and Chief Executive Officer President and Chief Executive Officer Stearns, Weaver, Miller, Weissler, BankAtlantic Bancorp, Inc. Alhadeff & Sitterson, P.A. John F. Chiste Miami, Florida John E. Abdo, Vice Chairman Senior Vice President, Treasurer and Vice Chairman Chief Financial Officer Independent Certified BankAtlantic Bancorp, Inc. Public Accountants Daniel C. Koscher Ernst & Young, LLP Norman H. Becker Senior Vice President, West Palm Beach, Florida Certified Public Accountant President, Bluegreen Communities Registrar and Transfer Agent George F. Donovan John M. Maloney, Jr. Mellon Investor Services President and Chief Executive Officer Senior Vice President, P.O. Box 3315 Bluegreen Corporation President, Bluegreen Resorts So. Hackensack, New Jersey 07606 800.522.6645 John Laguardia Mark T. Ryall www.melloninvestor.com President and Chief Operating Officer Senior Vice President and ALH II, Inc. Chief Information Officer Investor Relations The Equity Group, Inc. J. Larry Rutherford Allan J. Herz New York, New York President and Chief Executive Officer Vice President and 212.371.8660 South Star Development Partners, Inc. Director of Mortgage Operations Request for Corporate Information Arnold Sevell Susan J. Milanese The Company’s annual and President Vice President and Director of quarterly reports filed with the Sevell Realty Partners, Inc. Human Resources and Administration Securities and Exchange Commission along with other corporate information Anthony M. Puleo will be furnished upon written Vice President and request to Investor Relations at the DIRECTOR EMERITUS Chief Accounting Officer Corporate Headquarters.
Joseph C. Abeles Randi S. Tompkins Corporate Headquarters Private Investor Vice President, and Director of 4960 Conference Way North, Ste. 100 Corporate Legal Affairs and Clerk Boca Raton, Florida 33431 Telephone: 561.912.8000 Fax: 561.912.8100 www.bluegreenonline.com
Annual Meeting The Annual Meeting of Shareholders will begin at 3 p.m., May 29, 2003 at the Boca Raton Marriott Royal Palm Parlors 1 & 2 5150 Town Center Circle Boca Raton, Florida 33431
© 2003 Bluegreen Corporation. All rights reserved.