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Bluegreen Corp. (BXG)

Q4 2007 Earnings Call

February 29, 2008 11:00 am ET

Executives

Devin Sullivan - SVP of The Equity Group

John Maloney - President and CEO

Tony Puleo - SVP and CFO

Alan Levan - Chairman of the Board of Directors

Analysts

Michael Millman - Soleil Securities

Robert Jordan - Warden Glen

John Ziegelman - CD Capital Management

Presentation

Operator

Good day, ladies and gentlemen, and welcome to the fourth quarter 2007 Bluegreen Earnings Call. My name is Latasha, and I will be your coordinator for today. (Operator Instructions)

I would now like to turn the call over to Mr. Devin Sullivan, Senior Vice President of The Equity Group. Please proceed, sir.

Devin Sullivan

Thank you, and good morning, everyone. Thank you for joining us today. Our speakers on the call will be John Maloney, President and Chief Executive Officer of Bluegreen and Tony Puleo, Bluegreen's Senior Vice President and Chief Financial Officer. Also joining us on today's call is Alan Levan, Chairman of the Board of Directors of Bluegreen.

Before we get started, I would like to remind everyone that statements made during today's call may constitute forward-looking statements and are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based largely on expectations and are subject to a number of risks and uncertainties including but not limited to the risks and uncertainties associated with economic, competitive and other factors affecting the company and its operations, markets, products and services, as well as the risk that growth and profitability will not occur as anticipated.

Business strategies pursued may not be successful; the company may be unable to sell notes receivable on satisfactory terms, if at all, adversely impacting the company's liquidity and profitability; the performance of the company's vacation ownership notes receivables may deteriorate in the future; the company may not be in a position to draw down on its existing credit lines or may be unable to renew or replace such lines of credit.

Real estate inventories, notes receivable, retained interests in notes receivable sold or other assets will be determined to be impaired in the future; risks relating to pending or future litigation, claims and assessments; that the company will not be able to acquire land or identify new projects, as anticipated.

Sales and marketing strategies related to new Resorts and Communities properties will not be as successful as anticipated. New Resort and Communities properties will not open when expected, will cost more to develop or may not be as successful as anticipated. Retail prices and homesite yields for Communities properties will be below the company's estimates. Cost of sales will not be as expected.

Resort sales to existing owners and growth generally will not continue at current levels; deferred sales will not be recognized to the extent or at the time anticipated. And the risks and other factors detailed in the company's SEC filings, including its most recent Annual Report on Form 10-K filed on March 16, 2007, its Form 10-K/A filed on July 3, 2007 and its most recent Form 10-Q filed on November 9, 2007.

In addition, matters discussed concerning the company's rights offering contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties, including but not limited to the risk that a registration statement relating to the Bluegreen's rights offering may not be filed or declared effective by the Securities and Exchange Commission, that because of business, economic or market conditions Bluegreen may decide not to pursue the rights offering and that the rights offering may not be consummated in the amounts contemplated, if at all.

In addition to the risks and uncertainties identified above, reference is also made to other risks and uncertainties detailed in reports filed by Bluegreen with the Securities and Exchange Commission.

The company cautions that the foregoing factors are not exclusive. The discussions regarding the rights offering shall not constitute an offer to sell or the solicitation of an offer to buy any securities. Securities may not be sold nor may offers to buy be accepted prior to the effectiveness of a registration statement nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state.

I would now like to turn the call over to John Maloney, President and Chief Executive Officer of Bluegreen. Please go ahead, John.

John Maloney

Thank you, Devin. Good morning and thank you for joining us today. After Tony, Alan and I deliver our prepared remarks, we will open the floor to questions.

We ended the solid 2007 with strong fourth quarter results, most notably in our Bluegreen Resort segment, which posted its 25th consecutive quarter of comparable quarterly sales growth and generated field operating profit of approximately $22.6 million in the fourth quarter of 2007.

Higher sales during the fourth quarter were due to significant increase in sales to existing owners of the Bluegreen Vacation Club, which we view as perhaps the ultimate validation of the quality and value of our vacation ownership product and higher same-resort sales of several of our properties and our newest sales office in Las Vegas.

We also benefited from a systemwide price increase that went into effect last year and appears to have been well accepted by customers. At December 31, 2007 we had approximately 185,000 owners, up from approximately 184,000 owners on September 30, 2007. We are very excited that our newest resort properties in Las Vegas and Williamsburg, Virginia will begin welcoming guests this summer. And we also expect to open permanent sales offices in Williamsburg and Las Vegas at about that same time.

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