UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number 0-19292
BLUEGREEN CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 03-0300793
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4960 Conference Way North, Suite 100, Boca Raton, Florida 33431
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 912-8000
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Common Stock, $.01 par value New York Stock Exchange, Archipelago Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes |_| No |X|
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes |_| No |X|
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in the definitive proxy statement incorporated
by reference into Part III of this Form 10-K. |_|
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer (as defined in Rule
12b-2 of the Act).
Large Accelerated filer |_| Accelerated filer |X| Non-Accelerated filer |_|
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act). Yes |_| No |X|
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates of the registrant: $360,956,342 based upon the
closing sale price of the Company's Common Stock on the New York Stock Exchange
on June 30, 2005 ($17.41 per share). For this purpose, "affiliates" include
members of the Board of Directors of the Company, members of executive
management and all persons known to be the beneficial owners of more than 5% of
the Company's outstanding common stock.
As of March 14, 2006, there were 30,512,651 shares of the registrant's
common stock, $.01 par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Specifically identified portions of the Company's definitive proxy
statement to be filed for its 2006 Annual Meeting of Shareholders (the "Proxy
Statement") are incorporated by reference into Part III hereof.
EXPLANATORY NOTE
We are filing this Amendment No. 1 to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2005, as filed with the U.S. Securities and
Exchange Commission (SEC) on March 16, 2006 to amend the disclosure in Item 9A
related to "Changes in Internal Control Over Financial Reporting" for fiscal
year ending December 31, 2005.
Other than the amendment of Item 9A, all other information included in the above
described Form 10-K as previously filed, remains unchanged. In connection with
the filing of this Form 10-K/A and pursuant to Rules 12b-15, 13a-14(a) and
13a-14(b) under the Exchange Act, we are including currently dated
certifications.
This Form 10-K/A does not reflect events occurring after the filing of our
Annual Report on Form 10-K on March 16, 2006 or include, or otherwise modify or
update the disclosure contained therein in any way other than to reflect the
amendment of Item 9A.
Item 9A. CONTROLS AND PROCEDURES.
Management, including the Chief Executive Officer and Chief Financial Officer,
does not expect that our disclosure controls and procedures and internal
controls will prevent all errors and all improper conduct. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that we have detected all control
issues and instances of improper conduct, if any. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the control.
Further, the design of any system of controls also is based in part upon
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we conducted an
evaluation of the design and operation of our "disclosure controls and
procedures", as such term is defined under Rule 13a-15(e) promulgated under the
Exchange Act as of December 31, 2005. Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were effective as of December 31, 2005.
Changes in Internal Control Over Financial Reporting
During the fourth quarter of 2005, in anticipation of the sale of certain of our
vacation ownership notes receivable, we implemented additional internal controls
relating to (1) the review and evaluation of sales of vacation ownership notes
receivable to determine if the proposed structures would allow for off-balance
sheet treatment under SFAS No. 140 and (2) the evaluation of the appropriate
initial and continuing accounting for such transactions. As the fourth quarter
securitization included a component of a previous purchase facility, a review
was performed to determine if the purchase facility was appropriately treated as
a sale as originally reported. Based on our review, we determined that, among
other things, the relevant provisions of the previous purchase facility were
arguably ambiguous and could be construed to allow the Company to substitute new
notes receivable for previously sold receivables for any reason. As such, we
concluded that the existence of the ambiguous provisions should have precluded
notes receivable sales under the purchase facility from being accounted for as
off-balance sheet sales transactions. As a result, the Company felt it was
prudent to reassess all prior securitizations and vacation ownership receivables
purchase facilities to determine if GAAP was applied appropriately. As a result
of this review, we identified that we had originally misapplied GAAP in various
purchase facilities during certain periods prior to the fourth quarter of 2005
and that there were material weaknesses in internal control over these types of
transactions. As a result, we determined that we would restate our consolidated
financial statements for the first three quarters of fiscal 2005 and the fiscal
years ended December 31, 2003 and 2004 (see Note 2 to the Consolidated Financial
Statements) to reflect the impact of treating such transactions as on-balance
sheet financings and to correct the initial gain computations and continuing
accounting on those transactions that were properly treated as off-balance sheet
transactions. We believe that, as of December 31, 2005, we had fully remediated
the control deficiencies relating to the sale of vacation ownership notes
receivable that led to the restatement of the periods prior to fourth quarter of
2005.