UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2006
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _________________ to _________________
Commission File Number: 0-19292
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
BLUEGREEN CORPORATION RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
BLUEGREEN CORPORATION
4960 Conference Way North, Suite 100
Boca Raton, Florida 33431
BLUEGREEN CORPORATION RETIREMENT SAVINGS PLAN
INDEX TO ANNUAL REPORT ON FORM 11-K
PART I
PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM .................. 3
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS .......................... 4
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS ................ 5
NOTES TO FINANCIAL STATEMENTS ............................................ 6
SUPPLEMENTAL SCHEDULE
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS (HELD AT END OF YEAR) ........... 12
SIGNATURES ............................................................... 13
EXHIBIT 23 - CONSENT OF ERNST & YOUNG LLP ................................ 14
Report of Independent Registered Public Accounting Firm
The Participants and Plan Administrator
Bluegreen Corporation Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Bluegreen Corporation Retirement Savings Plan as of December 31, 2006 and
2005, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2006. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2006 and 2005, and the changes in its net assets available for
benefits for the year ended December 31, 2006, in conformity with U.S. generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2006 is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
Certified Public Accountants
West Palm Beach, Florida
June 25, 2007
3
Bluegreen Corporation Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31
2006 2005
-----------------------------
Assets
Investments, at fair value $ 28,114,236 $ 22,735,720
Participant contribution receivable -- 11,523
Employer contributions receivable 722,364 619,814
-----------------------------
Total assets 28,836,600 23,367,057
Liabilities
Excess contributions refundable 484,198 365,571
-----------------------------
Net assets available for benefits, fair value 28,352,402 23,001,486
Adjustment from fair value to contract value for
investment in the collective trust fund 61,684 60,224
-----------------------------
Net assets available for benefits $ 28,414,086 $ 23,061,710
=============================
See accompanying notes.
4
Bluegreen Corporation Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 2006
Additions
Interest and dividend income $ 85,312
Contributions:
Participant 6,089,130
Employer 722,364
Other (rollovers) 27,656
Net appreciation in fair value of investments 2,268,220
------------
Total additions 9,192,682
Deductions
Benefits paid to participants 3,774,598
Administrative expenses 65,708
------------
Total deductions 3,840,306
------------
Net increase 5,352,376
Net assets available for benefits at beginning of year 23,061,710
------------
Net assets available for benefits at end of year $ 28,414,086
============
See accompanying notes.
5
Bluegreen Corporation Retirement Savings Plan
Notes to Financial Statements
December 31, 2006
1. Description of the Plan
General
The following description of the Bluegreen Corporation Retirement Savings Plan
(the Plan) provides only general information. Participants should refer to the
Plan document and Summary Plan Description for a more complete description of
the Plan's provisions. Copies of these documents are available from Bluegreen
Corporation (the Company). The Plan document, which became effective March 31,
1992, is a defined contribution plan covering all employees, as defined by the
Plan document, of the Company who have completed one year of service and are age
21 or older. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Contributions and Vesting
Participant contributions cannot exceed 18% of a participant's compensation or
Internal Revenue Code (the Code) limitations. Effective January 1, 2001, the
Company amended the Plan to provide a fixed-rate matching contribution equal to
50% of the first 3% of a participant's contribution with an annual limit of
$1,000. The Company can also make a discretionary non-elective contribution.
Participants vest in Company contributions at a rate of 25% each year upon
completion of two years of service, resulting in 100% vesting after five years
of continuous service. Participant, employer and rollover contributions of
$6,089,130, $722,364 and $27,656, respectively, are included in the Plan
contributions in the accompanying statement of changes in net assets available
for benefits.
Participant Accounts
Each participant's account is credited with the participant's contributions,
Company contributions and an allocation of Plan investment results and
forfeitures of non-vested amounts. Company discretionary non-elective
contributions are allocated based on a participant's eligible compensation
relative to total participant eligible compensation. The match is allocated
based on a participant's contributions. Plan earnings are allocated based upon
the individual account balance proportionate to the total fund balance.
Forfeitures are allocated in a manner consistent with the allocation of the
match or discretionary non-elective contribution, depending on what the
forfeiture relates to. The benefit to which a participant is entitled is the
benefit that can be provided by the participant's vested account balance.
As of December 31, 2006 and 2005, approximately $38,246 and $35,166,
respectively, of the Plan's assets related to forfeitures had not yet been
allocated.
6
Loans to Participants
The Plan allows participants to borrow against their vested account balances.
Each loan will bear a reasonable interest rate determined by the Company in
accordance with the Plan provisions, as defined. The maximum amount available
for loans is the lesser of $50,000 or 50% of the participant's vested account
balance. Loan repayment periods are for a maximum of five years unless the loan
is for the purchase of a primary residence, in which case the repayment period
is for a maximum of 15 years. Loans and interest are repaid through payroll
deductions.
As of December 31, 2006 and 2005, the Plan had loans to participants of
$1,411,534 and $1,060,169, respectively, with interest rates ranging from 5.0%
to 10.5%.
Benefits
Upon attainment of retirement age, disability, death or termination of
employment, a distribution of the vested account balance is made to the
participant or named beneficiary in a lump sum.
Hardship withdrawals, as defined in the Code, are permitted only from
participant elective deferrals.
Excess Contributions Refundable
In the event that participant contributions exceed contribution limitations of
the Plan, corrective distributions may be required according to the terms of the
Plan document.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants would become 100% vested in their accounts.
2. Significant Accounting Policies
Basis of Presentation
The Plan's financial statements have been prepared on the accrual basis of
accounting in accordance with U.S. generally accepted accounting principles.
New Accounting Pronouncement
In December 2005, the Financial Accounting Standards Board (FASB) issued FASB
Staff Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive
Investment Contracts Held by Certain Investment Companies Subject to the AICPA
Investment Company Guide and Defined-Contribution Health and Welfare and Pension
Plans (the FSP). The FSP defines the circumstances in which an investment
contract is considered fully benefit responsive
7
and provides certain reporting and disclosure requirements for fully benefit
responsive investment contracts in defined contribution health and welfare and
pension plans. The financial statement presentation and disclosure provisions of
the FSP are effective for financial statements issued for annual periods ending
after December 15, 2006 and are required to be applied retroactively to all
prior periods presented for comparative purposes. The Plan has adopted the
provisions of the FSP at December 31, 2006.
As required by the FSP, investments in the accompanying Statements of Net Assets
Available for Benefits include fully benefit responsive investment contracts
recognized at fair value. AICPA Statement of Position 94-4-1, Reporting of
Investment Contracts Held by Health and Welfare Benefit Plans and Defined
Contribution Pension Plans, as amended, requires fully benefit responsive
investment contracts to be reported at fair value in the Plan's Statement of Net
Assets Available for Benefits with a corresponding adjustment to reflect these
investments at contract value. The requirements of the FSP have been applied
retroactively to the Statement of Net Assets Available for Benefits as of
December 31, 2005 presented for comparative purposes. Adoption of the FSP had no
effect on the Statement of Changes in Net Assets Available for Benefits for any
period presented.
Valuation of Investments
The Plan's investments are stated at fair value, which equals the quoted market
price on the last business day of the Plan year. The shares of registered
investment companies and common stock are valued at quoted active market prices,
which represent the net asset values of shares held by the Plan at year-end. The
contract value of participation units owned in the collective trust fund are
based on quoted redemption values, as determined by the Trustee, on the last
business day of the Plan year. The fair value of the underlying assets of the
collective trust fund is based upon the Trustee's valuation. The participant
notes receivable are valued at their outstanding balances, which approximate
fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Administrative Expenses
Administrative expenses, comprised primarily of trustee and accounting fees, are
paid directly by the Plan, which pays expenses related to the management of the
Plan's investments.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates that affect
the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Reclassification
Certain prior year amounts have been reclassified to conform to the current year
presentation.
8
3. Investments
SunTrust Bank (the Trustee) holds the Plan's investment assets and executes the
transactions therein.
The fair value of individual investments that represent 5% or more of the Plan's
net assets as of December 31, 2006 and 2005 are as follows:
2006 2005
--------------------------
SunTrust Stable Asset Fund $7,220,782* $5,996,380*
American Century Income & Growth Advisor -- 1,589,341
Franklin Small-Mid Cap Growth Fund 1,650,840 1,530,417
Putnam International Growth Fund 2,322,047 1,596,292
Vanguard 500 Index Fund 2,718,468 2,221,236
Bluegreen Corporation Common Stock 1,695,697 1,798,388
T. Rowe Price Mid-Cap Growth Fund - R 2,932,806 2,453,861
STI Classic Large Cap Relative Value I 1,928,994 **
* SunTrust Stable Asset Fund is shown at fair value. The contract value is
$7,282,466 for December 31, 2006 and $6,056,604 for December 31, 2005.
** Investment is less than 5% of the Plan's net assets.
During 2006, the Plan's investments (including gains and losses on investments
bought, sold, and held during the year) appreciated (depreciated) in value by a
net amount of $2,268,220, as follows:
Net Appreciation
(Depreciation) in Fair Value at
Fair Value December 31,
During the Year 2006
--------------------------------
Fair value determined by quoted market prices:
Mutual funds $ 2,335,828 $ 17,746,864
Common stock (332,270) 1,695,697
Fair value estimated by Trustee:
Collective trusts 264,662 7,220,782
--------------------------------
$ 2,268,220 $ 26,663,343
================================
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated January 8, 2004, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code and, therefore, the related trust is exempt from
taxation. Subsequent to this determination by the Internal Revenue Service, the
Plan was amended. Once qualified, the Plan is required to operate in conformity
with the Code to maintain its qualification. The Plan administrator believes the
9
Plan is being operated in compliance with the applicable requirements of the
Code and, therefore, believes the Plan, as amended, is qualified and the related
trust is tax exempt.
5. Parties-in-Interest
The Plan invests in the Company stock of Bluegreen Corporation, the Plan
sponsor. The Plan held 132,166 and 113,822 shares in the stock as of December
31, 2006 and 2005, respectively.
6. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the statements of net
assets available for benefits.
10
Supplemental Schedule
11
Bluegreen Corporation Retirement Savings Plan
Schedule H, Line 4i - Schedule of Assets
(Held at End of Year)
EIN #03-0300793 Plan #001
December 31, 2006
Identity of Description of Investments, Including
Borrower, Lessor, Maturity Date, Rate of Interest, Current
or Similar Party Collateral, Par, or Maturity Value (a) Value
--------------------------------------------------------------------------------------
SunTrust (b) Stable Asset Fund $ 7,220,782
STI Classic (b): Investment Grade Bond 830,202
Life Vision Moderate Growth 345,179
Life Vision Growth & Income 545,447
Life Vision Aggressive Growth 1,003,186
Small Cap Value Equity Fund 1,293,049
Large Cap Relative Value I 1,928,994
Golman Sachs Structured US Equity A 1,149,853
Franklin Small-Mid Cap Growth Fund 1,650,840
Putnam International Growth Fund 2,322,047
Vanguard 500 Index Fund 2,718,468
Bluegreen Corporation (b) Common Stock 1,695,697
MFS Massachusetts Investors Growth Fund 329,917
T. Rowe Price Mid-Cap Growth Fund - R 2,932,806
Growth Stock Fund - R 165,178
Oppenheimer International Bond Fund A 185,374
Federated Capital Appreciation Fund - A 346,324
Participant loans Interest rates ranging from 5.0% to 10.5%,
remaining maturity dates ranging from
one to fifteen years 1,411,534
Cash and cash equivalents 39,359
------------
$ 28,114,236
============
(a) - Indications the column which provides cost information, which has not
been included because all investments are participant directed.
(b) - Indicates a party-in-interest.
12
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Bluegreen Corporation Retirement Savings Plan
(Name of Plan)
Date: June 29, 2007 By: /s/ ANTHONY M. PULEO
--------------------
Anthony M. Puleo,
Senior Vice President, Chief
Financial Officer and Treasurer
13