##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 JUNE 30, 2007
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 001-31931
 LEVITT CORPORATION
  FLORIDA
    
    11-3675068(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 2200 W. Cypress Creek Road,Fort Lauderdale, FL
    
    33309(Address of principal executive offices)
    
    (Zip Code)
 (954) 958-1800
  x o
  o x o
  o x
  Class
    
    Outstanding at July 31, 2007Class A Common stock, $0.01 par value
    
    18,616,665Class B Common stock, $0.01 par value
    
    1,219,031




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##### Table of Contents



PART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Consolidated Statements of Financial Condition as of June 30, 2007 and December 31, 2006  Unaudited
    
    
    1Consolidated Statements of Operations for the three and six months ended June 30, 2007 and 2006  Unaudited
    
    
    2Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2007 and 2006  Unaudited
    
    
    3Consolidated Statement of Shareholders Equity for the six months ended June 30, 2007  Unaudited
    
    
    4Consolidated Statements of Cash Flows for the six months ended June 30, 2007 and 2006  Unaudited
    
    
    5Notes to Unaudited Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    50Item 4.
    
    Controls and Procedures
    
    
    50PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    51Item 1A.
    
    Risk Factors
    
    
    51Item 6.
    
    Exhibits
    
    
    51SIGNATURES
    
    
    52Ex-31.1 Section 302 Certification of CEOEx-31.2 Section 302 Certification of CFOEx-31.3 Section 302 Certification of CAOEx-32.1 Section 906 Certification of CEOEx-32.2 Section 906 Certification of CFOEx-32.3 Section 906 Certification of CAO




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements:
 
 Levitt Corporation
Consolidated Statements of Financial Condition  Unaudited
(In thousands, except share data)
 June 30,
    
    
    December 31,2007
    
    
    2006AssetsCash and cash equivalents
    
    $
    61,618
    
    
    
    48,391Restricted cash
    
    
    545
    
    
    
    1,397Inventory of real estate
    
    
    776,211
    
    
    
    822,040Assets held for sale
    
    
    71,380
    
    
    
    48,022Investment in Bluegreen Corporation
    
    
    109,658
    
    
    
    107,063Property and equipment, net
    
    
    36,351
    
    
    
    32,377Other assets
    
    
    40,822
    
    
    
    31,376Total assets
    
    $
    1,096,585
    
    
    
    1,090,666Liabilities and Shareholders EquityAccounts payable, accrued liabilities and other
    
    $
    80,092
    
    
    
    84,324Customer deposits
    
    
    26,296
    
    
    
    42,571Current income tax payable
    
    
    
    
    
    
    3,905Liabilities related to assets held for sale
    
    
    48,763
    
    
    
    27,965Notes and mortgage notes payable
    
    
    569,041
    
    
    
    503,610Junior subordinated debentures
    
    
    85,052
    
    
    
    85,052Total liabilities
    
    
    809,244
    
    
    
    747,427Shareholders equity:Preferred
stock, $0.01 par value
Authorized: 5,000,000 shares
Issued and outstanding: no shares
    
    
    
    
    
    
    Class A Common Stock, $0.01 par valueAuthorized: 50,000,000 shares
Issued and outstanding: 18,616,665 and 18,609,024 shares,
respectively
    
    
    186
    
    
    
    186Class B Common Stock, $0.01 par valueAuthorized: 10,000,000 shares
Issued and outstanding: 1,219,031 and 1,219,031 shares, respectively
    
    
    12
    
    
    
    12Additional paid-in capital
    
    
    186,081
    
    
    
    184,401Retained earnings
    
    
    98,972
    
    
    
    156,219Accumulated other comprehensive income
    
    
    2,090
    
    
    
    2,421Total shareholders equity
    
    
    287,341
    
    
    
    343,239Total liabilities and shareholders equity
    
    $
    1,096,585
    
    
    
    1,090,666
  1




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##### Table of Contents



Levitt Corporation
Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:Sales of real estate
    
    $
    125,364
    
    
    
    130,658
    
    
    
    266,662
    
    
    
    256,201Other revenues
    
    
    2,476
    
    
    
    2,556
    
    
    
    4,973
    
    
    
    4,507Total revenues
    
    
    127,840
    
    
    
    133,214
    
    
    
    271,635
    
    
    
    260,708Costs and expenses:Cost of sales of real estate
    
    
    171,594
    
    
    
    105,652
    
    
    
    284,502
    
    
    
    207,707Selling, general and administrative expenses
    
    
    33,609
    
    
    
    31,012
    
    
    
    66,515
    
    
    
    57,767Other expenses
    
    
    413
    
    
    
    1,923
    
    
    
    895
    
    
    
    2,549Total costs and expenses
    
    
    205,616
    
    
    
    138,587
    
    
    
    351,912
    
    
    
    268,023Earnings from Bluegreen Corporation
    
    
    1,357
    
    
    
    2,152
    
    
    
    3,101
    
    
    
    2,103Interest and other income
    
    
    3,299
    
    
    
    2,129
    
    
    
    5,641
    
    
    
    3,018Loss before income taxes
    
    
    (73,120
    )
    
    
    (1,092
    )
    
    
    (71,535
    )
    
    
    (2,194
    )Benefit for income taxes
    
    
    15,033
    
    
    
    355
    
    
    
    14,424
    
    
    
    797Net loss
    
    $
    (58,087
    )
    
    
    (737
    )
    
    
    (57,111
    )
    
    
    (1,397
    )Loss per common share:Basic
    
    $
    (2.93
    )
    
    
    (0.04
    )
    
    
    (2.88
    )
    
    
    (0.07
    )Diluted
    
    $
    (2.93
    )
    
    
    (0.04
    )
    
    
    (2.88
    )
    
    
    (0.07
    )Weighted average common shares outstanding:Basic
    
    
    19,828
    
    
    
    19,823
    
    
    
    19,827
    
    
    
    19,822Diluted
    
    
    19,828
    
    
    
    19,823
    
    
    
    19,827
    
    
    
    19,822Dividends declared per common share:Class A common stock
    
    $
    
    
    
    
    0.02
    
    
    
    0.02
    
    
    
    0.04Class B common stock
    
    $
    
    
    
    
    0.02
    
    
    
    0.02
    
    
    
    0.04
  2




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Levitt Corporation
Consolidated Statements of Comprehensive Loss  Unaudited
(In thousands)
 Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net loss
    
    $
    (58,087
    )
    
    
    (737
    )
    
    
    (57,111
    )
    
    
    (1,397
    )Other comprehensive loss:Pro-rata share of unrealized loss
recognized by Bluegreen
Corporation on
retained interests in notes
receivable sold
    
    
    (475
    )
    
    
    (642
    )
    
    
    (539
    )
    
    
    (375
    )Benefit for income taxes
    
    
    183
    
    
    
    248
    
    
    
    208
    
    
    
    145Pro-rata share of unrealized loss
recognized by Bluegreen
Corporation on
retained interests in notes
receivable sold (net of
tax)
    
    
    (292
    )
    
    
    (394
    )
    
    
    (331
    )
    
    
    (230
    )Comprehensive loss
    
    $
    (58,379
    )
    
    
    (1,131
    )
    
    
    (57,442
    )
    
    
    (1,627
    )
  3




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Levitt Corporation
Consolidated Statement of Shareholders Equity  Unaudited
Six Months Ended June 30, 2007
(In thousands)
 AccumulatedCompre-Class A
    
    
    Class B
    
    
    Additional
    
    
    
    
    
    
    hensiveClass A
    
    
    Class B
    
    
    Common
    
    
    Common
    
    
    Paid-In
    
    
    Retained
    
    
    IncomeShares
    
    
    Shares
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    (Loss)
    
    
    TotalBalance at December
31, 2006
    
    
    18,609
    
    
    
    1,219
    
    
    $
    186
    
    
    
    12
    
    
    
    184,401
    
    
    
    156,219
    
    
    
    2,421
    
    
    
    343,239Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,111
    )
    
    
    
    
    
    
    (57,111
    )Pro-rata share of
unrealized loss
recognized by Bluegreen
on sale of retained
interests, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (331
    )
    
    
    (331
    )Effect of Bluegreen
equity transactions,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    20Cash dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (396
    )
    
    
    
    
    
    
    (396
    )Share based
compensation
related to stock
options and
restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,660
    
    
    
    
    
    
    
    
    
    
    
    1,660Issuance of restricted
common stock
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cumulative impact of
change in accounting
for uncertainties in
income taxes (FIN 48
See Note 13)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    260
    
    
    
    
    
    
    
    260Balance at June 30, 2007
    
    
    18,617
    
    
    
    1,219
    
    
    $
    186
    
    
    
    12
    
    
    
    186,081
    
    
    
    98,972
    
    
    
    2,090
    
    
    
    287,341
  4




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Levitt Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 Six Months EndedJune 30,2007
    
    
    2006Operating activities:Net loss
    
    $
    (57,111
    )
    
    
    (1,397
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    2,803
    
    
    
    964Change in deferred income taxes
    
    
    (15,244
    )
    
    
    (2,240
    )Earnings from Bluegreen Corporation
    
    
    (3,101
    )
    
    
    (2,103
    )Earnings from unconsolidated trusts
    
    
    (109
    )
    
    
    (79
    )Loss from real estate joint ventures
    
    
    48
    
    
    
    77Share-based compensation expense related to
stock options and restricted stock
    
    
    1,660
    
    
    
    1,373Gain on sale of property and equipment
    
    
    (12
    )
    
    
    (1,329
    )Impairment of inventory and long lived assets
    
    
    63,270
    
    
    
    6,049Changes in operating assets and liabilities:Restricted cash
    
    
    852
    
    
    
    1,068Inventory of real estate
    
    
    (18,589
    )
    
    
    (157,291
    )Notes receivable
    
    
    4,076
    
    
    
    185Other assets
    
    
    2,642
    
    
    
    769Accounts payable, accrued liabilities and other
    
    
    (7,927
    )
    
    
    5,383Customer deposits
    
    
    (16,255
    )
    
    
    5,110Net cash used in operating activities
    
    
    (42,997
    )
    
    
    (143,461
    )Investing activities:Investment in real estate joint ventures
    
    
    (199
    )
    
    
    (445
    )Distributions from real estate joint ventures
    
    
    37
    
    
    
    138Investment in unconsolidated trusts
    
    
    
    
    
    
    (464
    )Distributions from unconsolidated trusts
    
    
    74
    
    
    
    79Proceeds from sales of property and equipment
    
    
    12
    
    
    
    1,943Capital expenditures
    
    
    (27,973
    )
    
    
    (12,360
    )Net cash used in investing activities
    
    
    (28,049
    )
    
    
    (11,109
    )Financing activities:Proceeds from notes and mortgage notes payable
    
    
    166,212
    
    
    
    212,240Proceeds from junior subordinated debentures
    
    
    
    
    
    
    15,464Repayment of notes and mortgage notes payable
    
    
    (80,214
    )
    
    
    (111,797
    )Repayment of notes and mortgage notes payable to affiliates
    
    
    
    
    
    
    (223
    )Payments for debt issuance costs
    
    
    (1,329
    )
    
    
    (576
    )Cash dividends paid
    
    
    (396
    )
    
    
    (794
    )Net cash provided by financing activities
    
    
    84,273
    
    
    
    114,314Increase (decrease) in cash and cash equivalents
    
    
    13,227
    
    
    
    (40,256
    )Cash and cash equivalents at the beginning of period
    
    
    48,391
    
    
    
    113,562Cash and cash equivalents at the end of period
    
    $
    61,618
    
    
    
    73,306
 5




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Levitt Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 For the Six MonthsEnded June 30,2007
    
    
    2006Supplemental cash flow informationInterest paid on borrowings, net of amounts
capitalized
    
    $
    (1,343
    )
    
    
    (890
    )Income taxes paid
    
    
    4,556
    
    
    
    15,700Supplemental disclosure of non-cash operating,
investing and financing activities:Change in shareholders equity resulting from
pro-rata share of unrealized loss recognized by
Bluegreen on sale of retained interests, net of tax
    
    $
    (331
    )
    
    
    (230
    )Change in shareholders equity resulting from the
Bluegreen equity transactions, net of tax
    
    $
    20
    
    
    
    (1
    )Decrease in inventory from reclassification to
property and equipment
    
    $
    1,148
    
    
    
    7,987Increase in deferred tax liability due to
cumulative impact of change in accounting for
uncertainties in income taxes (FIN 48- see Note
13)
    
    $
    260
    
    
    
    
  6




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Levitt Corporation
Notes to Unaudited Consolidated Financial Statements
 1. Presentation of Interim Financial Statements
   2. Stock Based Compensation
    7




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Three months ended June 30,
    
    
    Six months ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Expected volatility
    
    
    43.218
    %
    
    
    37.5203% - 37.5037
    %
    
    
    40.05% - 43.218
    %
    
    
    37.5203% - 37.5037
    %Expected dividend yield
    
    
    0.00%
    
    
    
    .39% - .54%
    
    
    
    0.00% - .83%
    
    
    
    .39% - .54%Risk-free interest rate
    
    
    5.14%
    
    
    
    5.02% - 5.13%
    
    
    
    4.58% - 5.14%
    
    
    
    5.02% - 5.13%Expected life
    
    7.5 years
    
    7.5 years
    
    7.5 years
    
    7.5 yearsForfeiture rate  executives
    
    
    5.0%
    
    
    
    5.0%
    
    
    
    5.0%
    
    
    
    5.0%Forfeiture rate 
non-executives
    
    
    10.0%
    
    
    
    10.0%
    
    
    
    10.0%
    
    
    
    10.0%
    3. Impairment of Goodwill
  8




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4. Inventory of Real Estate
  June 30,
    
    
    December 31,2007
    
    
    2006Land and land development costs
    
    $
    526,958
    
    
    
    566,459Construction costs
    
    
    149,104
    
    
    
    172,682Capitalized interest
    
    
    63,432
    
    
    
    47,752Other costs
    
    
    36,717
    
    
    
    35,147$
    776,211
    
    
    
    822,040
    
    
    historical project performance, including traffic trends and conversions rates, sales,
selling prices including incentive and discount programs, and cancellation trends,
    
    competitors presence and their competitive actions,
    
    project specific attributes such as location desirability, market segment (active adult
vs. family) and product type (single family detached vs. town home), and
    
    current local market economic and demographic conditions, including interest rates,
in-migration trends and job growth, and related trends and forecasts.
   9




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
    
    estimated average future sales prices were based on current sales prices with
significant discounts and incentives continuing through 2009 followed by average sales price
increases ranging from nominal to 4% in 2010 and beyond. Discounting activity is assumed to
gradually diminish beginning in the second half of 2009;
    
    estimated future construction and land development costs were kept relatively
consistent throughout the entire project;
    
    estimates of average (unweighted) gross margin percentages ranging between 8% and 11%
in the early years and 14% and higher in 2011 and beyond;
    
    estimated future sales rates were projected to decline in 2007 and 2008, with more
than 50% of projects projected to average less than 80 units per year. Sales rates were
projected to improve in 2009, with only 25% of projects selling less than 80 units per
year, and then stabilizing beginning in 2010.
   5. Assets Held for Sale
  10




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6. Interest
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest incurred to
non-affiliates
    
    $
    13,765
    
    
    
    9,533
    
    
    
    26,771
    
    
    
    17,562Interest capitalized
to property and
equipment
    
    
    (654
    )
    
    
    
    
    
    
    (1,104
    )
    
    
    Interest capitalized
to inventory
    
    
    (13,111
    )
    
    
    (9,533
    )
    
    
    (25,667
    )
    
    
    (17,562
    )Interest expense, net
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    Interest included in
cost of sales
    
    $
    5,562
    
    
    
    3,091
    
    
    
    9,987
    
    
    
    5,685
  7. Investment in Bluegreen Corporation
   Unaudited Condensed Consolidated Balance Sheets
 June 30,
    
    
    December 31,2007
    
    
    2006Total assets
    
    $
    978,867
    
    
    
    854,212Total liabilities
    
    $
    598,501
    
    
    
    486,487Minority interest
    
    
    17,968
    
    
    
    14,702Total shareholders equity
    
    
    362,398
    
    
    
    353,023Total liabilities and shareholders equity
    
    $
    978,867
    
    
    
    854,212
 11




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Unaudited Condensed Consolidated Statements of Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues and other income
    
    $
    170,972
    
    
    
    165,950
    
    
    
    317,854
    
    
    
    312,908Cost and other expenses
    
    
    162,739
    
    
    
    153,574
    
    
    
    299,385
    
    
    
    292,955Income before minority interest and
provision for income taxes
    
    
    8,233
    
    
    
    12,376
    
    
    
    18,469
    
    
    
    19,953Minority interest
    
    
    1,633
    
    
    
    1,677
    
    
    
    3,267
    
    
    
    2,699Income before provision for income
taxes
    
    
    6,600
    
    
    
    10,699
    
    
    
    15,202
    
    
    
    17,254Provision for income taxes
    
    
    (2,508
    )
    
    
    (4,119
    )
    
    
    (5,777
    )
    
    
    (6,643
    )Income before cumulative effect of
change in accounting principle
    
    
    4,092
    
    
    
    6,580
    
    
    
    9,425
    
    
    
    10,611Cumulative effect of change in
accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,678
    )Minority interest in cumulative
effect of
change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,184Net income
    
    $
    4,092
    
    
    
    6,580
    
    
    
    9,425
    
    
    
    6,117
  8. Debt
    12




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9. Commitments and Contingencies
   10. Loss per Share
   13




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Numerator:Basic loss per common share:Net loss  basic
    
    $
    (58,087
    )
    
    
    (737
    )
    
    
    (57,111
    )
    
    
    (1,397
    )Diluted loss per common share:Net loss  basic
    
    $
    (58,087
    )
    
    
    (737
    )
    
    
    (57,111
    )
    
    
    (1,397
    )Pro rata share of the net effect
of Bluegreen dilutive securities
    
    
    (7
    )
    
    
    (22
    )
    
    
    (21
    )
    
    
    (23
    )Net loss  diluted
    
    $
    (58,094
    )
    
    
    (759
    )
    
    
    (57,132
    )
    
    
    (1,420
    )Denominator:Basic average shares outstanding
    
    
    19,828
    
    
    
    19,823
    
    
    
    19,827
    
    
    
    19,822Diluted average shares outstanding
    
    
    19,828
    
    
    
    19,823
    
    
    
    19,827
    
    
    
    19,822Loss per common share:Basic
    
    $
    (2.93
    )
    
    
    (.04
    )
    
    
    (2.88
    )
    
    
    (.07
    )Diluted
    
    $
    (2.93
    )
    
    
    (.04
    )
    
    
    (2.88
    )
    
    
    (.07
    )
 11. Dividends
  12. Other Revenues
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Mortgage & title operations
    
    $
    877
    
    
    
    1,018
    
    
    
    1,599
    
    
    
    2,026Lease/rental income
    
    
    945
    
    
    
    952
    
    
    
    1,839
    
    
    
    1,570Marketing fees
    
    
    464
    
    
    
    419
    
    
    
    1,095
    
    
    
    599Irrigation revenue
    
    
    190
    
    
    
    167
    
    
    
    440
    
    
    
    312Total other revenues
    
    $
    2,476
    
    
    
    2,556
    
    
    
    4,973
    
    
    
    4,507
 13. Income Taxes
  14




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##### Table of Contents



14. Other Expenses and Interest and Other Income
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Other expensesTitle and mortgage operations expenses
    
    $
    413
    
    
    
    616
    
    
    
    895
    
    
    
    1,242Goodwill impairment
    
    
    
    
    
    
    1,307
    
    
    
    
    
    
    
    1,307Total other expenses
    
    $
    413
    
    
    
    1,923
    
    
    
    895
    
    
    
    2,549Interest and other incomeInterest income
    
    $
    697
    
    
    
    727
    
    
    
    1,416
    
    
    
    1,512Gain on sale of fixed assets
    
    
    12
    
    
    
    1,329
    
    
    
    12
    
    
    
    1,329Forfeited deposits
    
    
    2,469
    
    
    
    70
    
    
    
    3,898
    
    
    
    92Other income
    
    
    121
    
    
    
    3
    
    
    
    315
    
    
    
    85Total interest and other income
    
    $
    3,299
    
    
    
    2,129
    
    
    
    5,641
    
    
    
    3,018
  15




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##### Table of Contents



15. Segment Reporting
   16




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##### Table of Contents



Three Months Ended
    
    Primary
    
    
    Tennessee
    
    
    
    
    
    
    OtherJune 30, 2007
    
    Homebuilding
    
    
    Homebuilding
    
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenuesSales of real estate
    
    $
    114,805
    
    
    
    8,848
    
    
    
    1,917
    
    
    
    
    
    
    
    (206
    )
    
    
    125,364Other revenues
    
    
    877
    
    
    
    
    
    
    
    1,640
    
    
    
    142
    
    
    
    (183
    )
    
    
    2,476Total revenues
    
    
    115,682
    
    
    
    8,848
    
    
    
    3,557
    
    
    
    142
    
    
    
    (389
    )
    
    
    127,840Costs and
expenses
Cost of sales of real estate
    
    
    162,323
    
    
    
    8,683
    
    
    
    483
    
    
    
    1,018
    
    
    
    (913
    )
    
    
    171,594Selling, general and administrative
expenses
    
    
    20,675
    
    
    
    1,980
    
    
    
    4,088
    
    
    
    6,928
    
    
    
    (62
    )
    
    
    33,609Interest expense
    
    
    
    
    
    
    
    
    
    
    807
    
    
    
    
    
    
    
    (807
    )
    
    
    Other expenses
    
    
    413
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    413Total costs and expenses
    
    
    183,411
    
    
    
    10,663
    
    
    
    5,378
    
    
    
    7,946
    
    
    
    (1,782
    )
    
    
    205,616Earnings from Bluegreen
Corporation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,357
    
    
    
    
    
    
    
    1,357Interest and other income
    
    
    2,560
    
    
    
    23
    
    
    
    1,119
    
    
    
    403
    
    
    
    (806
    )
    
    
    3,299(Loss) income before
income taxes
    
    
    (65,169
    )
    
    
    (1,792
    )
    
    
    (702
    )
    
    
    (6,044
    )
    
    
    587
    
    
    
    (73,120
    )Benefit (provision) for
income taxes
    
    
    13,353
    
    
    
    596
    
    
    
    328
    
    
    
    1,042
    
    
    
    (286
    )
    
    
    15,033Net (loss) income
    
    $
    (51,816
    )
    
    
    (1,196
    )
    
    
    (374
    )
    
    
    (5,002
    )
    
    
    301
    
    
    
    (58,087
    )Inventory of real estate
    
    $
    543,697
    
    
    
    43,166
    
    
    
    204,611
    
    
    
    11,894
    
    
    
    (27,157
    )
    
    
    776,211Total assets
    
    $
    592,918
    
    
    
    48,049
    
    
    
    313,126
    
    
    
    161,906
    
    
    
    (19,414
    )
    
    
    1,096,585Total debt
    
    $
    402,670
    
    
    
    27,955
    
    
    
    124,535
    
    
    
    98,933
    
    
    
    
    
    
    
    654,093
 17




---



##### Table of Contents



Three Months Ended
    
    Primary
    
    
    Tennessee
    
    
    
    
    
    
    OtherJune 30, 2006
    
    Homebuilding
    
    
    Homebuilding
    
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenuesSales of real estate
    
    $
    102,287
    
    
    
    14,287
    
    
    
    14,086
    
    
    
    
    
    
    
    (2
    )
    
    
    130,658Other revenues
    
    
    1,018
    
    
    
    
    
    
    
    1,101
    
    
    
    459
    
    
    
    (22
    )
    
    
    2,556Total revenues
    
    
    103,305
    
    
    
    14,287
    
    
    
    15,187
    
    
    
    459
    
    
    
    (24
    )
    
    
    133,214Costs and expensesCost of sales of real estate
    
    
    80,076
    
    
    
    17,285
    
    
    
    7,718
    
    
    
    656
    
    
    
    (83
    )
    
    
    105,652Selling, general and
administrative
expenses
    
    
    17,217
    
    
    
    3,351
    
    
    
    3,580
    
    
    
    6,863
    
    
    
    1
    
    
    
    31,012Other expenses
    
    
    616
    
    
    
    1,307
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,923Total costs and expenses
    
    
    97,909
    
    
    
    21,943
    
    
    
    11,298
    
    
    
    7,519
    
    
    
    (82
    )
    
    
    138,587Earnings from Bluegreen
Corporation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,152
    
    
    
    
    
    
    
    2,152Interest and other income
    
    
    226
    
    
    
    22
    
    
    
    1,556
    
    
    
    323
    
    
    
    2
    
    
    
    2,129Income (loss) before income taxes
    
    
    5,622
    
    
    
    (7,634
    )
    
    
    5,445
    
    
    
    (4,585
    )
    
    
    60
    
    
    
    (1,092
    )(Provision) benefit for income
taxes
    
    
    (2,253
    )
    
    
    2,338
    
    
    
    (2,068
    )
    
    
    2,371
    
    
    
    (33
    )
    
    
    355Net income (loss)
    
    $
    3,369
    
    
    
    (5,296
    )
    
    
    3,377
    
    
    
    (2,214
    )
    
    
    27
    
    
    
    (737
    )Inventory of real estate
    
    $
    540,709
    
    
    
    61,390
    
    
    
    152,470
    
    
    
    17,499
    
    
    
    (17,413
    )
    
    
    754,655Total assets
    
    $
    549,803
    
    
    
    65,120
    
    
    
    226,799
    
    
    
    187,589
    
    
    
    (10,895
    )
    
    
    1,018,416Total debt
    
    $
    345,302
    
    
    
    19,716
    
    
    
    51,023
    
    
    
    90,744
    
    
    
    
    
    
    
    506,785
 18




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##### Table of Contents



Six Months Ended
    
    Primary
    
    
    Tennessee
    
    
    
    
    
    
    OtherJune 30, 2007
    
    Homebuilding
    
    
    Homebuilding
    
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenuesSales of real estate
    
    $
    227,317
    
    
    
    30,505
    
    
    
    2,694
    
    
    
    6,574
    
    
    
    (428
    )
    
    
    266,662Other revenues
    
    
    1,599
    
    
    
    
    
    
    
    3,142
    
    
    
    435
    
    
    
    (203
    )
    
    
    4,973Total revenues
    
    
    228,916
    
    
    
    30,505
    
    
    
    5,836
    
    
    
    7,009
    
    
    
    (631
    )
    
    
    271,635Costs and expensesCost of sales of real estate
    
    
    249,275
    
    
    
    29,334
    
    
    
    555
    
    
    
    6,519
    
    
    
    (1,181
    )
    
    
    284,502Selling, general and
administrative
expenses
    
    
    39,096
    
    
    
    3,864
    
    
    
    8,453
    
    
    
    15,164
    
    
    
    (62
    )
    
    
    66,515Interest expense
    
    
    
    
    
    
    
    
    
    
    1,022
    
    
    
    
    
    
    
    (1,022
    )
    
    
    Other expenses
    
    
    895
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    895Total costs and expenses
    
    
    289,266
    
    
    
    33,198
    
    
    
    10,030
    
    
    
    21,683
    
    
    
    (2,265
    )
    
    
    351,912Earnings from Bluegreen
Corporation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,101
    
    
    
    
    
    
    
    3,101Interest and other income
    
    
    4,201
    
    
    
    52
    
    
    
    2,067
    
    
    
    648
    
    
    
    (1,327
    )
    
    
    5,641(Loss) income before income
taxes
    
    
    (56,149
    )
    
    
    (2,641
    )
    
    
    (2,127
    )
    
    
    (10,925
    )
    
    
    307
    
    
    
    (71,535
    )Benefit (provision) for
income taxes
    
    
    9,814
    
    
    
    924
    
    
    
    896
    
    
    
    2,906
    
    
    
    (116
    )
    
    
    14,424Net (loss) income
    
    $
    (46,335
    )
    
    
    (1,717
    )
    
    
    (1,231
    )
    
    
    (8,019
    )
    
    
    191
    
    
    
    (57,111
    )Inventory of real estate
    
    $
    543,697
    
    
    
    43,166
    
    
    
    204,611
    
    
    
    11,894
    
    
    
    (27,157
    )
    
    
    776,211Total assets
    
    $
    592,918
    
    
    
    48,049
    
    
    
    313,126
    
    
    
    161,906
    
    
    
    (19,414
    )
    
    
    1,096,585Total debt
    
    $
    402,670
    
    
    
    27,955
    
    
    
    124,535
    
    
    
    98,933
    
    
    
    
    
    
    
    654,093
 19




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##### Table of Contents



Six Months Ended
    
    Primary
    
    
    Tennessee
    
    
    
    
    
    
    OtherJune 30, 2006
    
    Homebuilding
    
    
    Homebuilding
    
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenuesSales of real estate
    
    $
    193,132
    
    
    
    41,717
    
    
    
    21,358
    
    
    
    
    
    
    
    (6
    )
    
    
    256,201Other revenues
    
    
    2,026
    
    
    
    
    
    
    
    1,721
    
    
    
    796
    
    
    
    (36
    )
    
    
    4,507Total revenues
    
    
    195,158
    
    
    
    41,717
    
    
    
    23,079
    
    
    
    796
    
    
    
    (42
    )
    
    
    260,708Costs and expenses
Cost of sales of real estate
    
    
    152,368
    
    
    
    41,490
    
    
    
    12,737
    
    
    
    1,298
    
    
    
    (186
    )
    
    
    207,707Selling, general and
administrative
expenses
    
    
    31,206
    
    
    
    6,934
    
    
    
    6,366
    
    
    
    13,260
    
    
    
    1
    
    
    
    57,767Other expenses
    
    
    1,242
    
    
    
    1,307
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,549Total costs and expenses
    
    
    184,816
    
    
    
    49,731
    
    
    
    19,103
    
    
    
    14,558
    
    
    
    (185
    )
    
    
    268,023Earnings from Bluegreen
Corporation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,103
    
    
    
    
    
    
    
    2,103Interest and other income
    
    
    367
    
    
    
    58
    
    
    
    1,924
    
    
    
    668
    
    
    
    1
    
    
    
    3,018Income (loss) before income taxes
    
    
    10,709
    
    
    
    (7,956
    )
    
    
    5,900
    
    
    
    (10,991
    )
    
    
    144
    
    
    
    (2,194
    )(Provision) benefit for income
taxes
    
    
    (4,131
    )
    
    
    2,462
    
    
    
    (2,205
    )
    
    
    4,735
    
    
    
    (64
    )
    
    
    797Net income (loss)
    
    $
    6,578
    
    
    
    (5,494
    )
    
    
    3,695
    
    
    
    (6,256
    )
    
    
    80
    
    
    
    (1,397
    )Inventory of real estate
    
    $
    540,709
    
    
    
    61,390
    
    
    
    152,470
    
    
    
    17,499
    
    
    
    (17,413
    )
    
    
    754,655Total assets
    
    $
    549,803
    
    
    
    65,120
    
    
    
    226,799
    
    
    
    187,589
    
    
    
    (10,895
    )
    
    
    1,018,416Total debt
    
    $
    345,302
    
    
    
    19,716
    
    
    
    51,023
    
    
    
    90,744
    
    
    
    
    
    
    
    506,785
  16. Parent Company Financial Statement
    20




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##### Table of Contents



Condensed Statements of Financial Condition
 June 30,
    
    
    December 31,2007
    
    
    2006Total assets
    
    $
    401,508
    
    
    
    454,074Total liabilities
    
    $
    114,167
    
    
    
    110,835Total shareholders equity
    
    
    287,341
    
    
    
    343,239Total liabilities and shareholders equity
    
    $
    401,508
    
    
    
    454,074
 Condensed Statements of Operations
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Earnings from Bluegreen Corporation
    
    $
    1,357
    
    
    
    2,152
    
    
    
    3,101
    
    
    
    2,103Other revenues
    
    
    398
    
    
    
    382
    
    
    
    644
    
    
    
    713Costs and expenses
    
    
    7,483
    
    
    
    7,151
    
    
    
    15,748
    
    
    
    13,400Loss before income taxes
    
    
    (5,728
    )
    
    
    (4,617
    )
    
    
    (12,003
    )
    
    
    (10,584
    )Benefit for income taxes
    
    
    927
    
    
    
    2,402
    
    
    
    3,274
    
    
    
    4,579Net loss before undistributed
earnings from consolidated
subsidiaries
    
    
    (4,801
    )
    
    
    (2,215
    )
    
    
    (8,729
    )
    
    
    (6,005
    )(Loss) earnings from consolidated
subsidiaries, net of income taxes
    
    
    (53,286
    )
    
    
    1,478
    
    
    
    (48,382
    )
    
    
    4,608Net loss
    
    $
    (58,087
    )
    
    
    (737
    )
    
    
    (57,111
    )
    
    
    (1,397
    )
   17. Certain Relationships and Related Party Transactions
  21




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18. New Accounting Pronouncements
 Applicability of
the Assessment of a Buyers Continuing Investment under FASB Statement No. 66, Accounting for Sales
of Real Estate , for Sales of Condominiums
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Fair Value Measurements
 19. Litigation
 th Samuel Flamholz, on
behalf of himself and all others similarly situated, v.
James Blosser, Darwin Dornbush, Alan B. Levan, William Scherer, S. Lawrence Kahn, III, Joel
Levy, John E. Abdo, William Nicholson, Alan J. Levy, Levitt Corporation, and BFC Financial Corp. Elaine Mount, on behalf of herself and all others similarly situated, v. James Blosser,
Darwin Dornbush, Alan B. Levan, William Scherer, S. Lawrence Kahn, III, Joel Levy, John E. Abdo,
William Nicholson, Alan J. Levy, Levitt Corporation, and BFC Financial Corp.
 22




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##### Table of Contents



Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  .
 Executive Overview
  23




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##### Table of Contents



Financial and Non-Financial Metrics
  24




---



##### Table of Contents



Homebuilding Overview
      Land Development Overview
   25




---



##### Table of Contents



Accounting for the Impairment or Disposal of Long-Lived Assets
 26




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##### Table of Contents



Critical Accounting Policies and Estimates
  Inventory of real estate
 Accounting for the
Impairment or Disposal of Long-Lived Assets
  
    
    historical project performance, including traffic trends and conversions rates, sales,
selling prices including incentive and discount programs, and cancellation trends,
    
    competitors presence and their competitive actions,
    
    project specific attributes such as location desirability, market segment (active adult
vs. family) and product type (single family detached vs. town home), and
    
    current local market economic and demographic conditions, including interest rates,
in-migration trends and job growth, and related trends and forecasts.
   27




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##### Table of Contents




    
    estimated average future sales prices were based on current sales prices with
significant discounts and incentives continuing through 2009 followed by average sales price
increases ranging from nominal to 4% in 2010 and beyond. Discounting activity is assumed to
gradually diminish beginning in the second half of 2009;
    
    estimated future construction and land development costs were kept relatively
consistent throughout the entire project;
    
    estimates of average (unweighted) gross margin percentages ranging between 8% and 11%
in the early years and 14% and higher in 2011 and beyond;
    
    estimated future sales rates were projected to decline in 2007 and 2008, with more
than 50% of projects projected to average less than 80 units per year. Sales rates were
projected to improve in 2009, with only 25% of projects selling less than 80 units per
year, and then stabilizing beginning in 2010.
   28




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##### Table of Contents



CONSOLIDATED RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands)
    
    (Unaudited)
    
    (Unaudited)RevenuesSales of real estate
    
    $
    125,364
    
    
    
    130,658
    
    
    
    (5,294
    )
    
    
    266,662
    
    
    
    256,201
    
    
    
    10,461Other revenues
    
    
    2,476
    
    
    
    2,556
    
    
    
    (80
    )
    
    
    4,973
    
    
    
    4,507
    
    
    
    466Total revenues
    
    
    127,840
    
    
    
    133,214
    
    
    
    (5,374
    )
    
    
    271,635
    
    
    
    260,708
    
    
    
    10,927Costs and expensesCost of sales of real estate
    
    
    171,594
    
    
    
    105,652
    
    
    
    65,942
    
    
    
    284,502
    
    
    
    207,707
    
    
    
    76,795Selling, general and administrative expenses
    
    
    33,609
    
    
    
    31,012
    
    
    
    2,597
    
    
    
    66,515
    
    
    
    57,767
    
    
    
    8,748Other expenses
    
    
    413
    
    
    
    1,923
    
    
    
    (1,510
    )
    
    
    895
    
    
    
    2,549
    
    
    
    (1,654
    )Total costs and expenses
    
    
    205,616
    
    
    
    138,587
    
    
    
    67,029
    
    
    
    351,912
    
    
    
    268,023
    
    
    
    83,889Earnings from Bluegreen Corporation
    
    
    1,357
    
    
    
    2,152
    
    
    
    (795
    )
    
    
    3,101
    
    
    
    2,103
    
    
    
    998Interest and other income
    
    
    3,299
    
    
    
    2,129
    
    
    
    1,170
    
    
    
    5,641
    
    
    
    3,018
    
    
    
    2,623Loss before income taxes
    
    
    (73,120
    )
    
    
    (1,092
    )
    
    
    (72,028
    )
    
    
    (71,535
    )
    
    
    (2,194
    )
    
    
    (69,341
    )Benefit for income taxes
    
    
    15,033
    
    
    
    355
    
    
    
    14,678
    
    
    
    14,424
    
    
    
    797
    
    
    
    13,627Net loss
    
    $
    (58,087
    )
    
    
    (737
    )
    
    
    (57,350
    )
    
    
    (57,111
    )
    
    
    (1,397
    )
    
    
    (55,714
    )
 For the Three Months Ended June 30, 2007 Compared to the Same 2006 Period:
    29




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30




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##### Table of Contents



For the Six Months Ended June 30, 2007 Compared to the Same 2006 Period:
    31




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##### Table of Contents



32




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##### Table of Contents



Accounting for Real Estate Time-Sharing
Transactions
   33




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##### Table of Contents



PRIMARY HOMEBUILDING RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands, except unit information)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    114,805
    
    
    
    102,287
    
    
    
    12,518
    
    
    
    227,317
    
    
    
    193,132
    
    
    
    34,185Other revenues
    
    
    877
    
    
    
    1,018
    
    
    
    (141
    )
    
    
    1,599
    
    
    
    2,026
    
    
    
    (427
    )Total revenues
    
    
    115,682
    
    
    
    103,305
    
    
    
    12,377
    
    
    
    228,916
    
    
    
    195,158
    
    
    
    33,758Costs and expensesCost of sales of real estate
    
    
    162,323
    
    
    
    80,076
    
    
    
    82,247
    
    
    
    249,275
    
    
    
    152,368
    
    
    
    96,907Selling, general and administrative expenses
    
    
    20,675
    
    
    
    17,217
    
    
    
    3,458
    
    
    
    39,096
    
    
    
    31,206
    
    
    
    7,890Other expenses
    
    
    413
    
    
    
    616
    
    
    
    (203
    )
    
    
    895
    
    
    
    1,242
    
    
    
    (347
    )Total costs and expenses
    
    
    183,411
    
    
    
    97,909
    
    
    
    85,502
    
    
    
    289,266
    
    
    
    184,816
    
    
    
    104,450Interest and other income
    
    
    2,560
    
    
    
    226
    
    
    
    2,334
    
    
    
    4,201
    
    
    
    367
    
    
    
    3,834(Loss) income before income taxes
    
    
    (65,169
    )
    
    
    5,622
    
    
    
    (70,791
    )
    
    
    (56,149
    )
    
    
    10,709
    
    
    
    (66,858
    )Benefit (provision) for income taxes
    
    
    13,353
    
    
    
    (2,253
    )
    
    
    15,606
    
    
    
    9,814
    
    
    
    (4,131
    )
    
    
    13,945Net (loss) income
    
    $
    (51,816
    )
    
    
    3,369
    
    
    
    (55,185
    )
    
    
    (46,335
    )
    
    
    6,578
    
    
    
    (52,913
    )Homes delivered (units)
    
    
    335
    
    
    
    326
    
    
    
    9
    
    
    
    650
    
    
    
    634
    
    
    
    16Construction starts (units)
    
    
    175
    
    
    
    447
    
    
    
    (272
    )
    
    
    377
    
    
    
    786
    
    
    
    (409
    )Average selling price of homes
delivered
    
    $
    343
    
    
    
    314
    
    
    
    29
    
    
    
    350
    
    
    
    305
    
    
    
    45Margin percentage
    
    
    (41.4
    %)
    
    
    21.7
    %
    
    
    (63.1
    %)
    
    
    (9.7
    %)
    
    
    21.1
    %
    
    
    (30.8
    %)Gross orders (units)
    
    
    399
    
    
    
    302
    
    
    
    97
    
    
    
    594
    
    
    
    754
    
    
    
    (160
    )Gross orders (value)
    
    $
    106,134
    
    
    
    94,570
    
    
    
    11,564
    
    
    
    172,650
    
    
    
    243,527
    
    
    
    (70,877
    )Cancellations (units)
    
    
    156
    
    
    
    52
    
    
    
    104
    
    
    
    250
    
    
    
    85
    
    
    
    165Net orders (units)
    
    
    243
    
    
    
    250
    
    
    
    (7
    )
    
    
    344
    
    
    
    669
    
    
    
    (325
    )Backlog of homes (units)
    
    
    820
    
    
    
    1,634
    
    
    
    (814
    )
    
    
    820
    
    
    
    1,634
    
    
    
    (814
    )Backlog of homes (value)
    
    $
    270,907
    
    
    
    571,109
    
    
    
    (300,202
    )
    
    
    270,907
    
    
    
    571,109
    
    
    
    (300,202
    )
 For the Three Months Ended June 30, 2007 Compared to the Same 2006 Period:
  34




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35




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##### Table of Contents



For the Six Months Ended June 30, 2007 Compared to the Same 2006 Period:
        36




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##### Table of Contents



TENNESSEE HOMEBUILDING RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands, except unit information)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    8,848
    
    
    
    14,287
    
    
    
    (5,439
    )
    
    
    30,505
    
    
    
    41,717
    
    
    
    (11,212
    )Total revenues
    
    
    8,848
    
    
    
    14,287
    
    
    
    (5,439
    )
    
    
    30,505
    
    
    
    41,717
    
    
    
    (11,212
    )Costs and expensesCost of sales of real estate
    
    
    8,683
    
    
    
    17,285
    
    
    
    (8,602
    )
    
    
    29,334
    
    
    
    41,490
    
    
    
    (12,156
    )Selling, general and administrative expenses
    
    
    1,980
    
    
    
    3,351
    
    
    
    (1,371
    )
    
    
    3,864
    
    
    
    6,934
    
    
    
    (3,070
    )Other expenses
    
    
    
    
    
    
    1,307
    
    
    
    (1,307
    )
    
    
    
    
    
    
    1,307
    
    
    
    (1,307
    )Total costs and expenses
    
    
    10,663
    
    
    
    21,943
    
    
    
    (11,280
    )
    
    
    33,198
    
    
    
    49,731
    
    
    
    (16,533
    )Interest and other income
    
    
    23
    
    
    
    22
    
    
    
    1
    
    
    
    52
    
    
    
    58
    
    
    
    (6
    )Loss before income taxes
    
    
    (1,792
    )
    
    
    (7,634
    )
    
    
    5,842
    
    
    
    (2,641
    )
    
    
    (7,956
    )
    
    
    5,315Benefit for income taxes
    
    
    596
    
    
    
    2,338
    
    
    
    (1,742
    )
    
    
    924
    
    
    
    2,462
    
    
    
    (1,538
    )Net loss
    
    $
    (1,196
    )
    
    
    (5,296
    )
    
    
    4,100
    
    
    
    (1,717
    )
    
    
    (5,494
    )
    
    
    3,777Homes delivered (units)
    
    
    44
    
    
    
    66
    
    
    
    (22
    )
    
    
    91
    
    
    
    197
    
    
    
    (106
    )Construction starts (units)
    
    
    60
    
    
    
    85
    
    
    
    (25
    )
    
    
    112
    
    
    
    136
    
    
    
    (24
    )Average selling price of
homes delivered (a)
    
    $
    201
    
    
    
    216
    
    
    
    (15
    )
    
    
    214
    
    
    
    212
    
    
    
    2Margin percentage (a)
    
    
    1.9
    %
    
    
    (21.0
    )%
    
    
    22.9
    %
    
    
    6.0
    %
    
    
    0.5
    %
    
    
    5.5
    %Gross orders (units)
    
    
    79
    
    
    
    121
    
    
    
    (42
    )
    
    
    169
    
    
    
    254
    
    
    
    (85
    )Gross orders (value)
    
    $
    16,291
    
    
    
    25,041
    
    
    
    (8,750
    )
    
    
    36,634
    
    
    
    51,357
    
    
    
    (14,723
    )Cancellations (units)
    
    
    31
    
    
    
    39
    
    
    
    (8
    )
    
    
    63
    
    
    
    85
    
    
    
    (22
    )Net orders (units)
    
    
    48
    
    
    
    82
    
    
    
    (34
    )
    
    
    106
    
    
    
    169
    
    
    
    (63
    )Backlog of homes (units)
    
    
    137
    
    
    
    165
    
    
    
    (28
    )
    
    
    137
    
    
    
    165
    
    
    
    (28
    )Backlog of homes (value)
    
    $
    26,925
    
    
    
    38,058
    
    
    
    (11,133
    )
    
    
    26,925
    
    
    
    38,058
    
    
    
    (11,133
    )
 (a)
    
    Calculation for the six months ended June 30, 2007 excludes $11.1 million land sale,
which generated no margin. No comparable land sales occurred in the six months ended June
30, 2006.
 For the Three Months Ended June 30, 2007 Compared to the Same 2006 Period:
  37




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For the Six Months Ended June 30, 2007 Compared to the Same 2006 Period:
  38




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39




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##### Table of Contents



LAND DIVISION RESULTS OF OPERATIONS
 Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands, except acres information)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    1,917
    
    
    
    14,086
    
    
    
    (12,169
    )
    
    
    2,694
    
    
    
    21,358
    
    
    
    (18,664
    )Other revenues
    
    
    1,640
    
    
    
    1,101
    
    
    
    539
    
    
    
    3,142
    
    
    
    1,721
    
    
    
    1,421Total revenues
    
    
    3,557
    
    
    
    15,187
    
    
    
    (11,630
    )
    
    
    5,836
    
    
    
    23,079
    
    
    
    (17,243
    )Costs and expensesCost of sales of real estate
    
    
    483
    
    
    
    7,718
    
    
    
    (7,235
    )
    
    
    555
    
    
    
    12,737
    
    
    
    (12,182
    )Selling, general and administrative
expenses
    
    
    4,088
    
    
    
    3,580
    
    
    
    508
    
    
    
    8,453
    
    
    
    6,366
    
    
    
    2,087Interest expense
    
    
    807
    
    
    
    
    
    
    
    807
    
    
    
    1,022
    
    
    
    
    
    
    
    1,022Total costs and expenses
    
    
    5,378
    
    
    
    11,298
    
    
    
    (5,920
    )
    
    
    10,030
    
    
    
    19,103
    
    
    
    (9,073
    )Interest and other income
    
    
    1,119
    
    
    
    1,556
    
    
    
    (437
    )
    
    
    2,067
    
    
    
    1,924
    
    
    
    143(Loss) income before income taxes
    
    
    (702
    )
    
    
    5,445
    
    
    
    (6,147
    )
    
    
    (2,127
    )
    
    
    5,900
    
    
    
    (8,027
    )Benefit (provision) for income taxes
    
    
    328
    
    
    
    (2,068
    )
    
    
    2,396
    
    
    
    896
    
    
    
    (2,205
    )
    
    
    3,101Net (loss) income
    
    $
    (374
    )
    
    
    3,377
    
    
    
    (3,751
    )
    
    
    (1,231
    )
    
    
    3,695
    
    
    
    (4,926
    )Acres sold
    
    
    1
    
    
    
    48.5
    
    
    
    (47.5
    )
    
    
    1
    
    
    
    105
    
    
    
    (104
    )Margin percentage
    
    
    74.8
    %
    
    
    45.2
    %
    
    
    29.6
    %
    
    
    79.4
    %
    
    
    40.4
    %
    
    
    39.0
    %Unsold saleable acres (a)
    
    
    6,870
    
    
    
    7,138
    
    
    
    (268
    )
    
    
    6,870
    
    
    
    7,138
    
    
    
    (268
    )Acres subject to sales contracts 
third parties
    
    
    98
    
    
    
    84
    
    
    
    14
    
    
    
    98
    
    
    
    84
    
    
    
    14Aggregate sales price of acres
subject to sales contracts to
third parties
    
    $
    29,013
    
    
    
    15,387
    
    
    
    13,626
    
    
    
    29,013
    
    
    
    15,387
    
    
    
    13,626
 
 (a)
    
    Includes approximately 51 acres related to assets held for sale as of June 30, 2007. For the Three Months Ended June 30, 2007 Compared to the Same 2006 Period:
   40




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For the Six Months Ended June 30, 2007 Compared to the Same 2006 Period:
   41




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##### Table of Contents



42




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##### Table of Contents



OTHER OPERATIONS RESULTS OF OPERATIONS
 Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    6,574
    
    
    
    
    
    
    
    6,574Other revenues
    
    
    142
    
    
    
    459
    
    
    
    (317
    )
    
    
    435
    
    
    
    796
    
    
    
    (361
    )Total revenues
    
    
    142
    
    
    
    459
    
    
    
    (317
    )
    
    
    7,009
    
    
    
    796
    
    
    
    6,213Costs and expensesCost of sales of real estate
    
    
    1,018
    
    
    
    656
    
    
    
    362
    
    
    
    6,519
    
    
    
    1,298
    
    
    
    5,221Selling, general and administrative expenses
    
    
    6,928
    
    
    
    6,863
    
    
    
    65
    
    
    
    15,164
    
    
    
    13,260
    
    
    
    1,904Total costs and expenses
    
    
    7,946
    
    
    
    7,519
    
    
    
    427
    
    
    
    21,683
    
    
    
    14,558
    
    
    
    7,125Earnings from Bluegreen Corporation
    
    
    1,357
    
    
    
    2,152
    
    
    
    (795
    )
    
    
    3,101
    
    
    
    2,103
    
    
    
    998Interest and other income
    
    
    403
    
    
    
    323
    
    
    
    80
    
    
    
    648
    
    
    
    668
    
    
    
    (20
    )Loss before income taxes
    
    
    (6,044
    )
    
    
    (4,585
    )
    
    
    (1,459
    )
    
    
    (10,925
    )
    
    
    (10,991
    )
    
    
    66Benefit for income taxes
    
    
    1,042
    
    
    
    2,371
    
    
    
    (1,329
    )
    
    
    2,906
    
    
    
    4,735
    
    
    
    (1,829
    )Net loss
    
    $
    (5,002
    )
    
    
    (2,214
    )
    
    
    (2,788
    )
    
    
    (8,019
    )
    
    
    (6,256
    )
    
    
    (1,763
    )
  For the Three Months Ended June 30, 2007 Compared to the Same 2006 Period:
    43




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##### Table of Contents



For the Six Months Ended June 30, 2007 Compared to the Same 2006 Period:
    Accounting for Real Estate Time-Sharing
Transactions
  44




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##### Table of Contents



45




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##### Table of Contents



FINANCIAL CONDITION
 June 30, 2007 compared to December 31, 2006
  
    
    a net increase in cash and cash equivalents of $13.2 million, which resulted from
cash provided by financing activities, offset in part by cash used in operations and
investing activities;
    
    a net decrease in inventory of real estate of approximately $45.8 million which
primarily reflected non-cash inventory related impairment charges of $63.3 million
recorded by our Homebuilding Division;
    
    an increase of $4.0 million in property and equipment associated with increased
investment in commercial properties under construction at Core Communities, and support
for infrastructure in our master planned communities; and
    
    an increase of $23.4 million in assets held for sale related to the development of
two commercial projects currently held for sale.
   
    
    a net increase in notes and mortgage notes payable of $65.4 million, primarily
related to project debt associated with development activities;
    
    a decrease of $16.3 million in customer deposits reflecting fewer orders for new
homes;
    
    a net decrease in other accrued liabilities of approximately $4.2 million
attributable to decreased incentive compensation accruals, decreased construction
related accruals, and decreased professional services accruals related to the
consultants retained in 2006 for our technology upgrade; and
    
    an increase of $20.8 million in liabilities related to assets held for sale.
 LIQUIDITY AND CAPITAL RESOURCES
   46




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Operating Activities
  Investing Activities.
 47




---



##### Table of Contents



Financing Activities.
      48




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##### Table of Contents



Off Balance Sheet Arrangements and Contractual Obligations
   Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations (1) (2)
    
    $
    654,093
    
    
    
    17,816
    
    
    
    413,774
    
    
    
    112,566
    
    
    
    109,937Operating lease obligations
    
    
    8,030
    
    
    
    2,565
    
    
    
    3,079
    
    
    
    1,025
    
    
    
    1,361Purchase obligations
    
    
    14,220
    
    
    
    14,220
    
    
    
    
    
    
    
    
    
    
    
    Total Obligations
    
    $
    676,343
    
    
    
    34,601
    
    
    
    416,853
    
    
    
    113,591
    
    
    
    111,298
 
 (1)
    
    Amounts exclude interest because terms of repayment are based on construction activity and
sales volume. In addition, a large portion of our debt is based on variable rates.(2)
    
    These amounts represent scheduled principal payments and some of those borrowings require the
repayment of specified amounts upon a sale of portions of the property securing those
obligations.   49




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##### Table of Contents



Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
   NEW ACCOUNTING PRONOUNCEMENTS.
  
 Item 4. CONTROLS AND PROCEDURES
     50




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
 th Samuel Flamholz, on
behalf of himself and all others similarly situated, v. James Blosser, Darwin Dornbush, Alan B.
Levan, William Scherer, S. Lawrence Kahn, III, Joel Levy, John E. Abdo, William Nicholson, Alan J.
Levy, Levitt Corporation, and BFC Financial Corp. Elaine Mount, on behalf of herself and
all others similarly situated, v. James Blosser, Darwin Dornbush, Alan B. Levan, William Scherer,
S. Lawrence Kahn, III, Joel Levy, John E. Abdo, William Nicholson, Alan J. Levy, Levitt
Corporation, and BFC Financial Corp.
 
 Item 1A. Risk Factors
  
 Item 6. Exhibits
  Exhibit 31.1*
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31.2*
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31.3*
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 32.1**
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.Exhibit 32.2**
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.Exhibit 32.3**
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Exhibits filed with this Form 10-Q**
    
    Exhibits furnished with this Form 10-Q 51




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##### Table of Contents



LEVITT CORPORATIONDate: August 9, 2007
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive OfficerDate: August 9, 2007
    By:
    /s/  George P. ScanlonGeorge P. Scanlon, Executive Vice President,Chief Financial OfficerDate: August 9, 2007
    By:
    /s/  Jeanne T. PraytherJeanne T. Prayther, Chief Accounting Officer 52