Cautionary Statement Regarding Forward-Looking Statements and Risk Factors

We desire to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and are making the following statements to do so. Certain statements in this Quarterly Report and our other filings with the SEC constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. You may identify these statements by forward-looking words such as "may," "intend," "expect," "anticipate," "believe", "will," "should," "project," "estimate," "plan" or other comparable terminology or by other statements that do not relate to historical facts. All statements, trend analyses and other information relative to the market for our products, remaining life-of-project sales, our expected future sales, gross margin, financial position, operating results, liquidity and capital resources, our business strategy, financial plan and expected capital requirements as well as trends in our operations, receivables performance or results are forward-looking statements. These forward-looking statements are subject to known and unknown risks and uncertainties, many of which are beyond our control, including changes in economic conditions, generally, in areas where we operate, or in the travel and tourism industry, availability of financing, increases in interest rates, changes in regulations and other factors discussed throughout our SEC filings, including the Risk Factor section of this Quarterly Report, all of which could cause our actual results, performance or achievements, or industry trends, to differ materially from any future results, performance, or achievements or trends expressed or implied herein. Given these uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements, and no assurance can be given that the plans, estimates and expectations reflected herein will be achieved. Factors that could adversely affect our future results can also be considered general risk factors with respect to our business, whether or not they relate to a forward-looking statement. We wish to caution you that the important factors set forth below and elsewhere in this Quarterly Report in some cases have affected, and in the future could affect our actual results and could cause our actual consolidated results to differ materially from those expressed in any forward-looking statements.

• The state of the economy, generally, interest rates and the availability of financing will affect our ability to market VOIs and residential homesites.

• We would incur substantial losses if the customers we finance default on their obligations, and new credit underwriting standards may not have the favorable impact on performance as anticipated.

• Our business plans historically have depended on our ability to sell or borrow against our notes receivable to support our liquidity and profitability.

• Historically, we depended on additional funding to finance our operations. The material deterioration in the credit markets has had and could continue to adversely affect our liquidity and earnings.

• While we have attempted to restructure our business to reduce our need for and reliance on financing for liquidity in the short term, our business and profitability will depend on such availability to achieve growth and long term profitability.

• We have approximately $122 million of indebtedness which becomes due in less than one year. If we are unable to renew, extend or refinance a significant portion of this debt our liquidity would be significantly, adversely impacted.

• Continued declines in the Company's common stock price will make it difficult to raise capital and may result in the delisting of our common stock from the New York Stock Exchange.

• Our results of operations and financial condition could be adversely impacted if our estimates concerning our notes receivable are incorrect.

• Our future success depends on our ability to market our products successfully and efficiently.

• We are subject to the risks of the real estate market and the risks associated with real estate development, including the declines in real estate values and the deterioration of the real estate sales.

• Claims for development-related defects could adversely affect our financial condition and operating results.

• The resale market for VOIs could adversely affect our business.

• We may be adversely affected by extensive federal, state and local laws and regulations and changes in applicable laws and regulations, including with respect to the imposition of additional taxes on operations.

• Environmental liabilities, including claims with respect to mold or hazardous or toxic substances, could have a material adverse impact on our business.

Executive Overview

The increase in net income recognized in the first quarter of 2009, as compared to the same period in 2008, reflects the impact of initiatives implemented at Bluegreen Resorts during 2008, more fully described under "Liquidity and Capital Resources".

During the first quarter of 2009 our Resorts Division operated 18 sales offices and completed 3,770 sales transactions. This compares to 28 sales offices and 9,376 transactions respectively, during the first quarter of 2008. Our Communities business continues to be impacted by the deterioration of the real estate market and generated lower sales in the first quarter of 2009 compared to 2008.

As a result, consolidated sales of real estate for the first quarter of 2009 were $45.9 million, down $65.4 million from $111.3 million in 2008. During the three months ended March 31, 2008 and 2009, sales of VOIs contributed $90.3 million (81%), and $43.5 million (95%) of our total consolidated sales of real estate, respectively. During the three months ended March 31, 2008 and 2009, Bluegreen Communities generated $20.9 million (19%), and $2.3 million (5%), of our total consolidated sales of real estate, respectively.

As we discuss further under "Liquidity and Capital Resources", our Resorts sales operations are materially dependent on the availability of liquidity in the credit markets. Historically, we have provided financing to a significant portion of our Bluegreen Resorts customers. Such financing typically involves the consumer making a minimum 10% cash down payment, and the balance financed over a ten-year period. As Bluegreen Resorts' selling, general and administrative expenses typically exceed the cash down payment, we have historically maintained credit facilities pursuant to which we pledged or sold our consumer note receivables. Furthermore, we also engaged in private placement term securitization transactions to periodically pay down all or a portion of our note receivable credit facilities.

There has been and continues to be an unprecedented disruption in the credit markets, which has made obtaining additional and replacement external sources of liquidity more difficult and, if available, more costly. The term securitization market has been severely limited, and, as a result, financial institutions are reluctant to enter into new credit facilities for the purpose of providing financing on consumer receivables. Several lenders to the timeshare industry have announced that they will either be exiting the finance business or will not be entering into new financing commitments for the foreseeable future, including certain of our lenders, such as Textron Financial Corporation, although such lenders have to date honored existing commitments. In addition, financing for real estate acquisition and development and the capital markets for corporate debt have been generally unavailable.

As evidenced by Bluegreen Resorts' results of operations during the first quarter of 2009, we believe that the market for our Resorts product remains relatively strong, but the uncertainties in the credit markets are requiring us, for the time being, to deemphasize our sales operations to conserve cash. To this end, during the fourth quarter of 2008, we implemented strategic initiatives that have materially reduced resort sales and will continue to maintain a reduced level of sales for the foreseeable future in an effort to conserve availability under our receivables credit facilities. Such initiatives included closing certain sales offices; greatly eliminating what we have identified as lower-efficiency marketing programs; emphasizing cash sales and higher cash down payments as well as our other cash-based services; reducing overhead, including eliminating a significant number of staff positions across a variety of areas at various locations; limiting sales to borrowers who meet newly applied underwriting standards; and increasing interest rates on new sales transactions for which we provide financing. Our goal was and continues to be, to reduce the number of sales, while increasing the ultimate profitability of those sales we do make. For more detailed information on our strategic initiatives, see "Liquidity and Capital Resources" below. We believe that we

We continue to actively pursue additional credit facility capacity, capital markets transactions, and alternative financing solutions and we hope that the steps we are taking will position us to maintain existing, strong credit relationships, as well as attract new sources of capital. Regardless of the state of the credit markets, however, we believe that our resorts management and finance operations will continue to represent recurring cash-generating sources of income which do not require material liquidity support from the credit markets.

We have historically experienced and expect to continue to experience seasonal fluctuations in our gross revenues and results of operations. This seasonality may result in fluctuations in our quarterly operating results, with the majority of our gross revenues and net earnings historically expected to occur in the quarters ending in September and December of each year. Although we expect to see more potential customers at our sales offices during the quarters ending in June and September, ultimate recognition of the resulting sales during these periods may be delayed due to complex down payment requirements for real estate sales under GAAP or due to the timing of development and the requirement that we use the percentage-of-completion method of accounting.

We believe that inflation and changing prices have materially impacted our revenues and results of operations, specifically due to periodic increases in the sales prices of our VOIs and increases in construction and development costs from time to time during the last three to five years. The increased construction and development costs in prior periods are expected to result in an increase in our cost of sales for the foreseeable future. There is no assurance that we will be able to increase or maintain the current level of our sales prices or that increased construction costs will not have a material adverse impact on our gross margin. In addition, to the extent that inflation in general or increased prices for our VOIs and homesites would adversely impact consumer demand, our results of operations could be adversely impacted. Also, to the extent inflationary trends, tightened credit markets or other factors affect interest rates, our debt service costs may increase.

Our Bluegreen Communities business has been, and continues to be, adversely impacted by deterioration in the real estate markets generally. Although to date we have not experienced a significant reduction in sale prices, we have experienced a material decrease in demand, particularly for higher priced premium homesites, and an overall decrease in sales volume.

We have historically financed a majority of Bluegreen Resorts sales of VOIs, and accordingly, are subject to the risk of defaults by customers. GAAP requires that we reduce sales of VOIs by our estimate of future uncollectible note balances on originated VOI receivables, excluding any benefit for the value of future recoveries.

The allowance for loan losses by segment as of December 31, 2008 and March 31, 2009 was as follows (in thousands):

                                               Bluegreen        Bluegreen
                                                Resorts        Communities        Total
                                              -----------     -------------     ---------
December 31, 2008:
Notes receivable                              $   388,014     $       4,659     $ 392,673
Allowance for loan losses                         (51,785 )            (244 )     (52,029 )
                                              --- -------     -- ----------     - -------
Notes receivable, net                         $   336,229     $       4,415     $ 340,644
                                              --- -------     -- ----------     - -------

Allowance as a % of gross notes receivable             13 %               5 %          13 %
                                              --- -------     -- ----------     - -------

March 31, 2009:
Notes receivable                              $   369,171     $       4,651     $ 373,822
Allowance for loan losses                         (48,912 )            (268 )     (49,180 )
                                              --- -------     -- ----------     - -------
Notes receivable, net                         $   320,259     $       4,383     $ 324,642
                                              --- -------     -- ----------     - -------
Allowance as a % of gross notes receivable             13 %               6 %          13 %
                                              --- -------     -- ----------     - -------

            Balance, December 31, 2008                      $  52,029
            Provision for loan losses (1)                       7,961

            Less: Write-offs of uncollectible receivables     (10,810 )
                                                            - -------
            Balance, March 31, 2009                         $  49,180
                                                            - -------

(1) Includes provision for loan losses on homesite notes receivable

The average annual default rates and delinquency rates (more than 30 days past due) on Bluegreen Resorts' and Bluegreen Communities' receivables owned or serviced by us were as follows:

                                                  12 Month Period
                 Average Annual Default Rates     Ended March 31,
                 ----------------------------   -------------------
                           Division             2008        2009
                 ----------------------------   -----    ----------
                 Bluegreen Resorts              7.9%         10.1 %
                 Bluegreen Communities          4.3%          7.3 %




                  Delinquency Rates*                As of
                 ---------------------   ---------------------------
                                          December 31,    March 31,
                       Division               2008           2009
                 ---------------------   --------------   ----------
                 Bluegreen Resorts              5.7 %          5.7 %
                 Bluegreen Communities         10.7 %         14.3 %

*The percentage of our serviced VOI notes receivable portfolio that was over 30 days past due as of the dates indicated.

We believe that unemployment in the United States and economic conditions in general will continue to adversely impact the performance of our notes receivable portfolio. However, we anticipate that our newly implemented credit underwriting standards on new loan originations and increasing customer equity in the existing loan portfolio will have a favorable impact on the performance of the portfolio over time.

Substantially all defaulted vacation ownership notes receivable result in the holder of the note receivable acquiring the related VOI that secured the note receivable, typically soon after default and at little or no cost. In cases where Bluegreen has retained ownership of the vacation ownership note receivable, the VOI is reacquired and resold in the normal course of business, partially mitigating the loss from the default typically, as these recoveries range from approximately 40% to 100% of the defaulted principal balance depending on the age of the receivable at default. We may, but are not obligated to, remarket the defaulted VOI on behalf of the note holder in exchange for a remarketing fee designed to approximate our sales and marketing costs. From time to time, Bluegreen will reacquire a defaulted note receivable from one of its off-balance sheet term securitizations transactions by substituting the defaulted receivable for a performing receivable. The related VOI that secured the defaulted note receivable is reacquired at a price equal to the defaulted principal amount, which typically is well in excess of Bluegreen's historical cost of product. The reacquisition of inventory in this manner has resulted in an increase in Bluegreen Resort's cost of sales.

In advance of possible new accounting rules, which could be effective as early as 2010, Bluegreen made a decision to structure any future sales of notes receivable so they are treated as on-balance sheet borrowings. This impacts the comparability to prior periods as transactions structured in this way do not result in gains on sale of notes receivable. A significant portion of our revenues historically has been comprised of gains on sales of notes receivable. The gains were recorded on our consolidated statement of operations as a component of sales of real estate and the related retained interests in the notes receivable sold have been recorded on our consolidated balance sheet at the time of sale. The Financial Accounting Standards Board ("FASB") is currently reviewing the accounting principles relative to the transfer of financial assets, including the sale of notes receivable.

During 2008 and through the first quarter of 2009, the deteriorating credit markets negatively impacted our financing activities. Fewer transactions were consummated in the market overall and those that were consummated were more difficult to effect and were priced at a higher cost than in prior periods. In addition, recent economic

Critical Accounting Policies and Estimates

Our discussion and analysis of results of operations and financial condition are based upon our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of commitments and contingencies. On an ongoing basis, management evaluates its estimates, including those that relate to the recognition of revenue, including revenue recognition under the percentage-of-completion method of accounting; our reserve for loan losses; the valuation of retained interests in notes receivable sold and the related gains on sales of notes receivable; the recovery of the carrying value of real estate inventories, golf courses, intangible assets and other assets; and the estimate of contingent liabilities related to litigation and other claims and assessments. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions and conditions. If actual results significantly differ from management's estimates, our results of operations and financial condition could be materially, adversely impacted. For a more detailed discussion of these critical accounting policies see "Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2008.

Accounting Pronouncements Not Yet Adopted

In April 2009, the FASB issued FASB Staff Position FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (FAS 107-1), which is effective for interim and annual periods ending after June 15, 2009. FAS 107-1 amends SFAS 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. It also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized information in interim reporting periods. The adoption of this pronouncement is not expected to affect our results of operations or financial condition.

In April 2009, the FASB issued FASB Staff Position FAS 115-2, FAS 124-2, and EITF 99-20-2, Recognition and Presentation of Other-Than-Temporary Impairments (FAS 115-2), which is effective for interim and annual periods ending after June 15, 2009. FAS 115-2 amends the other-than-temporary impairment guidance in U.S. GAAP for debt securities and retained interest in securities classified as available-for-sale investments to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on such securities in the financial statements. It does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. We are currently evaluating the effects that this pronouncement will have on our financial statements.

In April 2009, the FASB issued FASB Staff Position FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability has Significantly Decreased and Identifying Transactions that are Not Orderly (FAS 157-4), which is effective for interim and annual periods ending after June 15, 2009. FAS 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157 when the volume and level of activity for the asset or liability have significantly decreased. It also provides guidance on identifying circumstances that indicate a transaction is not orderly. It emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale), between market participations at the measurement date under current market conditions. We are currently evaluating the effects that this pronouncement will have on our financial statements.

Results of Operations

We review financial information, allocate resources and manage our business as two segments, Bluegreen Resorts and Bluegreen Communities. The information reviewed is based on internal reports and excludes an allocation of general and administrative expenses attributable to corporate overhead. The information provided is based on a management approach and is used by us for the purpose of tracking trends and changes in results. It does not reflect

                                          Bluegreen Resorts            Bluegreen Communities                Total
                                       -----------------------    -------------------------------     ------------------
                                                         % of                                                      % of
                                          Amount        Sales         Amount          % of Sales       Amount     Sales
                                       -------------    ------    ---------------     -----------     ---------   ------
Three Months Ended March 31, 2008

Gross sales of real estate             $      98,469              $        20,909                     $ 119,378
Estimated uncollectible VOI notes
receivable                                   (16,367 )                          -                       (16,367 )
Gain on sales of notes receivable              8,245                            -                         8,245
                                       -- ----------              -- ------------                     - -------
Sales of real estate                          90,347       100 %           20,909             100 %     111,256      100 %
Cost of real estate sales                    (20,714 )     (23 )          (10,244 )           (49 )     (30,958 )    (28 )
                                       -- ----------              -- ------------                     - -------
Gross profit                                  69,633        77             10,665              51        80,298       72
Other resort and communities
operations revenues                           13,962        15              3,908              19        17,870       16
Cost of other resort and communities
operations                                    (9,751 )     (11 )           (2,936 )           (14 )     (12,687 )    (11 )
Selling and marketing expenses               (60,669 )     (67 )           (5,135 )           (25 )     (65,804 )    (59 )
Field general and administrative
expenses(1)                                   (7,378 )      (8 )           (2,633 )           (13 )     (10,011 )     (9 )
                                       -- ----------              -- ------------                     - -------
Field operating profit                 $       5,797         6 %  $         3,869              18 %   $   9,666        9 %
                                       -- ----------              -- ------------                     - -------

Three Months Ended March 31, 2009

Gross sales of real estate             $      51,418              $         2,335                     $  53,753
Estimated uncollectible VOI notes
receivable                                    (7,898 )                          -                        (7,898 )
                                       -- ----------              -- ------------                     - -------
. . .