##### 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, 2008
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 001-31931
 WOODBRIDGE HOLDINGS CORPORATION
  Florida
    
    11-3675068(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 2100 W. Cypress Creek Road,Fort Lauderdale, FL
    
    33309(Address of principal executive offices)
    
    (Zip Code)
 (954) 940-4950
 
  x o
   Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o x
  Class
    
    Outstanding at August 5, 2008Class A common stock, $0.01 par value
    
    95,197,445Class B common stock, $0.01 par value
    
    1,219,031




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##### 



PART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated
Statements of Financial Condition as of June 30, 2008 and December 31, 2007  Unaudited
    
    
    1Consolidated Statements of Operations for the three and six months ended June 30, 2008 and 2007  Unaudited
    
    
    2Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2008 and 2007  Unaudited
    
    
    3Consolidated Statement of Shareholders Equity for the six months ended June 30, 2008  Unaudited
    
    
    4Consolidated Statements of Cash Flows for the six months ended June 30, 2008 and 2007  Unaudited
    
    
    5Notes to Unaudited Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    31Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    53Item 4.
    
    Controls and Procedures
    
    
    54PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    55Item 1A.
    
    Risk Factors
    
    
    55Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    55Item 5.
    
    Other Information
    
    
    56Item 6.
    
    Exhibits
    
    
    56SIGNATURES
    
    
    57EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 Woodbridge Holdings Corporation
Consolidated Statements of Financial Condition  Unaudited
(In thousands, except share data)
 June 30,
    
    
    December 31,2008
    
    
    2007AssetsCash and cash equivalents
    
    $
    125,307
    
    
    
    195,181Restricted cash
    
    
    729
    
    
    
    2,207Current income tax receivable
    
    
    27,375
    
    
    
    27,407Inventory of real estate
    
    
    242,185
    
    
    
    227,290Assets held for sale
    
    
    95,827
    
    
    
    96,214Investments:Bluegreen Corporation
    
    
    117,365
    
    
    
    116,014Other equity securities
    
    
    15,699
    
    
    
    Other
    
    
    2,564
    
    
    
    2,565Property and equipment, net
    
    
    33,005
    
    
    
    33,566Other assets
    
    
    13,655
    
    
    
    12,407Total assets
    
    $
    673,711
    
    
    
    712,851Liabilities and Shareholders EquityAccounts payable, accrued liabilities and other
    
    $
    37,454
    
    
    
    41,618Liabilities related to assets held for sale
    
    
    82,311
    
    
    
    80,093Notes and mortgage notes payable
    
    
    172,820
    
    
    
    189,768Junior subordinated debentures
    
    
    85,052
    
    
    
    85,052Loss in excess of investment in subsidiary
    
    
    55,214
    
    
    
    55,214Total liabilities
    
    
    432,851
    
    
    
    451,745Shareholders equity:Preferred stock, $0.01 par valueAuthorized: 5,000,000 sharesIssued and outstanding: no shares
    
    
    
    
    
    
    Class A Common Stock, $0.01 par valueAuthorized: 150,000,000 sharesIssued and outstanding: 95,197,445 and 95,040,731 shares, respectively
    
    
    952
    
    
    
    950Class B Common Stock, $0.01 par valueAuthorized: 10,000,000 sharesIssued and outstanding: 1,219,031 shares
    
    
    12
    
    
    
    12Additional paid-in capital
    
    
    337,358
    
    
    
    336,795Accumulated deficit
    
    
    (97,910
    )
    
    
    (78,537
    )Accumulated other comprehensive income
    
    
    448
    
    
    
    1,886Total shareholders equity
    
    
    240,860
    
    
    
    261,106Total liabilities and shareholders equity
    
    $
    673,711
    
    
    
    712,851
  1




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##### Table of Contents



Woodbridge Holdings Corporation
Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues:Sales of real estate
    
    $
    2,395
    
    
    
    125,364
    
    
    
    2,549
    
    
    
    266,662Other revenues
    
    
    810
    
    
    
    1,702
    
    
    
    1,556
    
    
    
    3,614Total revenues
    
    
    3,205
    
    
    
    127,066
    
    
    
    4,105
    
    
    
    270,276Costs and expenses:Cost of sales of real estate
    
    
    1,758
    
    
    
    171,594
    
    
    
    1,786
    
    
    
    284,502Selling, general and administrative expenses
    
    
    12,439
    
    
    
    33,017
    
    
    
    24,514
    
    
    
    65,331Interest expense
    
    
    2,146
    
    
    
    
    
    
    
    4,865
    
    
    
    Other expenses
    
    
    
    
    
    
    413
    
    
    
    
    
    
    
    895Total costs and expenses
    
    
    16,343
    
    
    
    205,024
    
    
    
    31,165
    
    
    
    350,728Earnings from Bluegreen Corporation
    
    
    1,211
    
    
    
    1,357
    
    
    
    1,737
    
    
    
    3,101Interest and other income
    
    
    1,946
    
    
    
    3,294
    
    
    
    3,545
    
    
    
    5,634Loss from continuing operations before
income taxes
    
    
    (9,981
    )
    
    
    (73,307
    )
    
    
    (21,778
    )
    
    
    (71,717
    )Benefit for income taxes
    
    
    
    
    
    
    15,112
    
    
    
    
    
    
    
    14,501Loss from continuing operations
    
    
    (9,981
    )
    
    
    (58,195
    )
    
    
    (21,778
    )
    
    
    (57,216
    )Discontinued operations:Income from discontinued operations, net of
tax
    
    
    1,039
    
    
    
    108
    
    
    
    2,405
    
    
    
    105Net loss
    
    $
    (8,942
    )
    
    
    (58,087
    )
    
    
    (19,373
    )
    
    
    (57,111
    )Basic loss per common share:Continuing operations
    
    $
    (0.10
    )
    
    
    (2.88
    )
    
    
    (0.23
    )
    
    
    (2.83
    )Discontinued operations
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.03
    
    
    
    0.01Total basic loss per common share
    
    $
    (0.09
    )
    
    
    (2.87
    )
    
    
    (0.20
    )
    
    
    (2.82
    )Diluted loss per common share:Continuing operations
    
    $
    (0.10
    )
    
    
    (2.88
    )
    
    
    (0.23
    )
    
    
    (2.83
    )Discontinued operations
    
    
    0.01
    
    
    
    0.01
    
    
    
    0.03
    
    
    
    0.01Total diluted loss per common share
    
    $
    (0.09
    )
    
    
    (2.87
    )
    
    
    (0.20
    )
    
    
    (2.82
    )Weighted average common shares outstanding:Basic
    
    
    96,264
    
    
    
    20,218
    
    
    
    96,261
    
    
    
    20,217Diluted
    
    
    96,264
    
    
    
    20,218
    
    
    
    96,261
    
    
    
    20,217Dividends declared per common share:Class A common stock
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    0.02Class B common stock
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    0.02
  2




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Woodbridge Holdings Corporation
Consolidated Statements of Comprehensive Loss  Unaudited
(In thousands)
 Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net loss
    
    $
    (8,942
    )
    
    
    (58,087
    )
    
    
    (19,373
    )
    
    
    (57,111
    )Other comprehensive loss:Pro-rata share of unrealized loss
recognized by Bluegreen Corporation on
retained interests in notes receivable sold
    
    
    (458
    )
    
    
    (475
    )
    
    
    (885
    )
    
    
    (539
    )Unrealized
gain (loss) on other equity securities, net of reclassification adjustment (See Note 6)
    
    
    273
    
    
    
    
    
    
    
    (553
    )
    
    
    Benefit for income taxes
    
    
    
    
    
    
    183
    
    
    
    
    
    
    
    208Total unrealized loss, net of taxes
    
    
    (185
    )
    
    
    (292
    )
    
    
    (1,438
    )
    
    
    (331
    )Total comprehensive loss
    
    $
    (9,127
    )
    
    
    (58,379
    )
    
    
    (20,811
    )
    
    
    (57,442
    )
  3




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Woodbridge Holdings Corporation
Consolidated Statement of Shareholders Equity - Unaudited
Six Months Ended June 30, 2008
(In thousands)
 AccumulatedClass A
    
    
    Class B
    
    
    Additional
    
    
    
    
    
    
    Compre-Class A
    
    
    Class B
    
    
    Common
    
    
    Common
    
    
    Paid-In
    
    
    Accumulated
    
    
    hensiveShares
    
    
    Shares
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    Income
    
    
    TotalBalance at December 31, 2007
    
    
    95,041
    
    
    
    1,219
    
    
    $
    950
    
    
    
    12
    
    
    
    336,795
    
    
    
    (78,537
    )
    
    
    1,886
    
    
    
    261,106Issuance of restricted common
stock
    
    
    156
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,373
    )
    
    
    
    
    
    
    (19,373
    )Pro-rata share of unrealized
loss
recognized by Bluegreen on
sale of retained interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (885
    )
    
    
    (885
    )Issuance of Bluegreen common
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    497
    
    
    
    
    
    
    
    
    
    
    
    497Unrealized loss on other equity
securities, net of
reclassification adjustment
(See Note 6)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (553
    )
    
    
    (553
    )Share based compensation
related to stock options and
restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66
    
    
    
    
    
    
    
    
    
    
    
    66Balance at June 30, 2008
    
    
    95,197
    
    
    
    1,219
    
    
    $
    952
    
    
    
    12
    
    
    
    337,358
    
    
    
    (97,910
    )
    
    
    448
    
    
    
    240,860
  4




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Woodbridge Holdings Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 Six Months EndedJune 30,2008
    
    
    2007Operating activities:Net loss
    
    $
    (19,373
    )
    
    
    (57,111
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    1,939
    
    
    
    2,803Change in deferred income taxes
    
    
    
    
    
    
    (15,244
    )Earnings from Bluegreen Corporation
    
    
    (1,737
    )
    
    
    (3,101
    )Gain on sale of other equity securities
    
    
    (1,178
    )
    
    
    Earnings from unconsolidated trust
    
    
    (109
    )
    
    
    (109
    )Loss from real estate joint ventures
    
    
    
    
    
    
    48Share-based compensation expense related to
stock options and restricted stock, net of reversal
of expense related to forfeited stock options
    
    
    66
    
    
    
    1,660Impairment of inventory and long lived assets
    
    
    114
    
    
    
    63,258Changes in operating assets and liabilities:Inventory of real estate
    
    
    (14,704
    )
    
    
    (18,589
    )Notes receivable
    
    
    
    
    
    
    4,076Other assets
    
    
    (958
    )
    
    
    2,642Customer deposits
    
    
    173
    
    
    
    (16,255
    )Accounts payable, accrued expenses and other liabilities
    
    
    (4,001
    )
    
    
    (7,927
    )Net cash used in operating activities
    
    
    (39,768
    )
    
    
    (43,849
    )Investing activities:Investment in and advances to real estate joint ventures
    
    
    
    
    
    
    (199
    )Purchases of other equity securities
    
    
    (33,978
    )
    
    
    Proceeds from sale of other equity securities
    
    
    18,904
    
    
    
    Decrease in restricted cash
    
    
    1,478
    
    
    
    852Distributions of capital from real estate joint ventures
    
    
    
    
    
    
    37Distributions from unconsolidated trusts
    
    
    110
    
    
    
    74Proceeds from sales of property and equipment
    
    
    
    
    
    
    12Capital expenditures
    
    
    (1,123
    )
    
    
    (27,973
    )Net cash used in investing activities
    
    
    (14,609
    )
    
    
    (27,197
    )Financing activities:Proceeds from notes and mortgage notes payable
    
    
    7,283
    
    
    
    166,212Repayment of notes and mortgage notes payable
    
    
    (22,656
    )
    
    
    (80,214
    )Payments for debt issuance costs
    
    
    (124
    )
    
    
    (1,329
    )Cash dividends paid
    
    
    
    
    
    
    (396
    )Net cash (used in) provided by financing activities
    
    
    (15,497
    )
    
    
    84,273(Decrease) increase in cash and cash equivalents
    
    
    (69,874
    )
    
    
    13,227Cash and cash equivalents at the beginning of period
    
    
    195,181
    
    
    
    48,391Cash and cash equivalents at the end of period
    
    $
    125,307
    
    
    
    61,618
 5




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Woodbridge Holdings Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 Six MonthsEnded June 30,2008
    
    
    2007Supplemental cash flow informationInterest paid on borrowings, net of amounts capitalized
    
    $
    5,793
    
    
    
    (1,343
    )Income taxes paid
    
    
    
    
    
    
    4,556Supplemental disclosure of non-cash operating,
investing and financing activities:Change in shareholders equity resulting from
unrealized loss recognized from equity
securities, net of tax
    
    $
    (1,438
    )
    
    
    (331
    )Change in shareholders equity resulting from the
issuance of Bluegreen common stock, net of tax
    
    $
    497
    
    
    
    20Decrease in inventory from reclassification to property
and equipment
    
    $
    
    
    
    
    1,148Increase in deferred tax liability due to cumulative
impact
of change in accounting for uncertainties in income
taxes
    
    $
    
    
    
    
    260
  6




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Woodbridge Holdings Corporation
Notes to Unaudited Consolidated Financial Statements


1.
    
    Presentation of Interim Financial Statements


7




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##### Table of Contents



Investments
   2.
    
    Sale of Two Core Communities Commercial Leasing Projects  Discontinued Operations
 Accounting for the Impairment or Disposal of Long-Lived Assets
  8




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##### Table of Contents



June 30,
    
    
    December 31,2008
    
    
    2007Property and equipment, net
    
    $
    83,504
    
    
    
    84,677Other assets
    
    
    12,323
    
    
    
    11,537Assets held for sale
    
    $
    95,827
    
    
    
    96,214Accounts payable, accrued liabilities and other
    
    $
    1,618
    
    
    
    1,123Notes and mortgage payable
    
    
    80,693
    
    
    
    78,970Liabilities related to assets held for sale
    
    $
    82,311
    
    
    
    80,093
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenue
    
    $
    1,934
    
    
    
    774
    
    
    
    4,152
    
    
    
    1,359Costs and expenses
    
    
    899
    
    
    
    592
    
    
    
    1,756
    
    
    
    1,1841,035
    
    
    
    182
    
    
    
    2,396
    
    
    
    175Other income
    
    
    4
    
    
    
    5
    
    
    
    9
    
    
    
    7Income before income taxes
    
    
    1,039
    
    
    
    187
    
    
    
    2,405
    
    
    
    182Provision for income taxes
    
    
    
    
    
    
    (79
    )
    
    
    
    
    
    
    (77
    )Net income
    
    $
    1,039
    
    
    
    108
    
    
    
    2,405
    
    
    
    105
 3.
    
    Stock Based Compensation
 Share-Based Payment
  9




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##### Table of Contents



Number of
    
    
    WeightedStock
    
    
    Average ExerciseOptions
    
    
    PriceOptions outstanding at December 31, 2007
    
    
    1,862,390
    
    
    $
    17.33Granted
    
    
    181,985
    
    
    $
    1.34Exercised
    
    
    
    
    
    
    Forfeited
    
    
    440,725
    
    
    $
    16.27Options outstanding at June 30, 2008
    
    
    1,603,650
    
    
    $
    15.81Options exercisable at June 30, 2008
    
    
    349,075
    
    
    $
    8.04
     10




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##### Table of Contents



4.
    
    Inventory of Real Estate
  June 30,
    
    
    December 31,2008
    
    
    2007Land and land development costs
    
    $
    203,930
    
    
    
    196,577Construction costs
    
    
    2,447
    
    
    
    1,062Capitalized interest
    
    
    35,170
    
    
    
    29,012Other costs
    
    
    638
    
    
    
    639$
    242,185
    
    
    
    227,290
   5.
    
    Interest
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Interest incurred
    
    $
    4,606
    
    
    
    12,893
    
    
    
    9,645
    
    
    
    25,219Interest capitalized
    
    
    (2,460
    )
    
    
    (12,893
    )
    
    
    (4,780
    )
    
    
    (25,219
    )Interest expense
    
    $
    2,146
    
    
    
    
    
    
    
    4,865
    
    
    
    Interest expensed in
cost of sales
    
    $
    44
    
    
    
    5,562
    
    
    
    44
    
    
    
    9,987
  11




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##### Table of Contents



6.
    
    Investments
 Bluegreen Corporation
  Fair Value Measurements
    Unaudited Condensed Consolidated Balance Sheets
 June 30,
    
    
    December 31,2008
    
    
    2007Total assets
    
    $
    1,128,644
    
    
    
    1,039,578Total liabilities
    
    $
    715,195
    
    
    
    632,047Minority interest
    
    
    24,581
    
    
    
    22,423Total shareholders equity
    
    
    388,868
    
    
    
    385,108Total liabilities and shareholders equity
    
    $
    1,128,644
    
    
    
    1,039,578
 12




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Unaudited Condensed Consolidated Statements of Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues and other income
    
    $
    151,603
    
    
    
    170,972
    
    
    
    290,955
    
    
    
    317,630Cost and other expenses
    
    
    144,726
    
    
    
    162,739
    
    
    
    280,989
    
    
    
    299,161Income before minority interest and
provision for income taxes
    
    
    6,877
    
    
    
    8,233
    
    
    
    9,966
    
    
    
    18,469Minority interest
    
    
    1,320
    
    
    
    1,633
    
    
    
    2,158
    
    
    
    3,267Income before provision for income
taxes
    
    
    5,557
    
    
    
    6,600
    
    
    
    7,808
    
    
    
    15,202Provision for income taxes
    
    
    (2,112
    )
    
    
    (2,508
    )
    
    
    (2,967
    )
    
    
    (5,777
    )Net income
    
    $
    3,445
    
    
    
    4,092
    
    
    
    4,841
    
    
    
    9,425
 Other equity securities
   June 30,2008Total cost
    
    $
    33,978Sale of other equity securities (Office Depot)
    
    
    (17,726
    )Gross unrealized losses
    
    
    (553
    )Total fair value
    
    $
    15,699
   Three Months
    
    
    Six MonthsEnded
    
    
    EndedJune 30, 2008
    
    
    June 30, 2008Unrealized holding gains arising during
the period
    
    $
    1,451
    
    
    
    625Less: Reclassification adjustment for
gains included in net loss
    
    
    (1,178
    )
    
    
    (1,178
    )Net unrealized gain (loss) on securities
    
    $
    273
    
    
    
    (553
    )
  13




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##### Table of Contents



7.
    
    Debt
    8.
    
    Commitments and Contingencies
   14




---



##### Table of Contents



Severance
    
    
    
    
    
    
    Independent
    
    
    SuretyRelated and
    
    
    
    
    
    
    Contractor
    
    
    BondBenefits
    
    
    Facilities
    
    
    Agreements
    
    
    Accrual
    
    
    TotalBalance at December 31, 2007
    
    $
    1,954
    
    
    
    1,010
    
    
    
    1,421
    
    
    
    1,826
    
    
    
    6,211Restructuring charges (credits)
    
    
    2,023
    
    
    
    140
    
    
    
    (25
    )
    
    
    (150
    )
    
    
    1,988Cash payments
    
    
    (2,681
    )
    
    
    (259
    )
    
    
    (412
    )
    
    
    (532
    )
    
    
    (3,884
    )Balance at June 30, 2008
    
    $
    1,296
    
    
    
    891
    
    
    
    984
    
    
    
    1,144
    
    
    
    4,315
  Accounting for Costs Associated with Exit or Disposal Activities
   Accounting for Uncertainty in
Income Taxes  an interpretation of FASB No. 109
 15




---



##### Table of Contents



9.
    
    Development Bonds Payable
  Accounting for Contingencies
 Accounting for Special Assessments and Tax Increment
Financing
 10.
    
    Loss per Share
  16




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator:Basic loss per common share:Loss from continuing operations
    
    $
    (9,981
    )
    
    
    (58,195
    )
    
    
    (21,778
    )
    
    
    (57,216
    )Income from discontinued operations
    
    
    1,039
    
    
    
    108
    
    
    
    2,405
    
    
    
    105Net loss  basic
    
    $
    (8,942
    )
    
    
    (58,087
    )
    
    
    (19,373
    )
    
    
    (57,111
    )Diluted loss per common share:Net loss from continuing operations  basic
    
    $
    (9,981
    )
    
    
    (58,195
    )
    
    
    (21,778
    )
    
    
    (57,216
    )Pro rata share of the net effect of Bluegreen
dilutive securities
    
    
    (5
    )
    
    
    (7
    )
    
    
    (7
    )
    
    
    (21
    )Loss from continuing operations
    
    $
    (9,986
    )
    
    
    (58,202
    )
    
    
    (21,785
    )
    
    
    (57,237
    )Income from discontinued operations
    
    
    1,039
    
    
    
    108
    
    
    
    2,405
    
    
    
    105Net loss  diluted
    
    $
    (8,947
    )
    
    
    (58,094
    )
    
    
    (19,380
    )
    
    
    (57,132
    )Denominator:Basic average shares outstanding
    
    
    96,264
    
    
    
    19,828
    
    
    
    96,261
    
    
    
    19,827Bonus adjustment factor from registration rights
offering
    
    
    
    
    
    
    1.0197
    
    
    
    
    
    
    
    1.0197Basic average shares outstanding
    
    
    96,264
    
    
    
    20,218
    
    
    
    96,261
    
    
    
    20,217Net effect of stock options assumed to be exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted average shares outstanding
    
    
    96,264
    
    
    
    20,218
    
    
    
    96,261
    
    
    
    20,217Basic loss per common share:Continuing operations
    
    $
    (0.10
    )
    
    
    (2.88
    )
    
    
    (0.23
    )
    
    
    (2.83
    )Discontinued operations
    
    $
    0.01
    
    
    
    0.01
    
    
    
    0.03
    
    
    
    0.01Total basic loss per share
    
    $
    (0.09
    )
    
    
    (2.87
    )
    
    
    (0.20
    )
    
    
    (2.82
    )Diluted loss per common shareContinuing operations
    
    $
    (0.10
    )
    
    
    (2.88
    )
    
    
    (0.23
    )
    
    
    (2.83
    )Discontinued operations
    
    $
    0.01
    
    
    
    0.01
    
    
    
    0.03
    
    
    
    0.01Total diluted loss per share
    
    $
    (0.09
    )
    
    
    (2.87
    )
    
    
    (0.20
    )
    
    
    (2.82
    )
 17




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##### Table of Contents



11.
    
    Other Revenues
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Mortgage & title operations
    
    $
    
    
    
    
    877
    
    
    
    
    
    
    
    1,599Lease/rental income
    
    
    285
    
    
    
    171
    
    
    
    567
    
    
    
    480Marketing fees
    
    
    246
    
    
    
    464
    
    
    
    339
    
    
    
    1,095Impact fees
    
    
    32
    
    
    
    
    
    
    
    178
    
    
    
    Irrigation revenue
    
    
    247
    
    
    
    190
    
    
    
    472
    
    
    
    440Total other revenues
    
    $
    810
    
    
    
    1,702
    
    
    
    1,556
    
    
    
    3,614
  12.
    
    Income Taxes
    13.
    
    Other Expenses and Interest and Other Income
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Other expensesTitle and mortgage operations
    
    $
    
    
    
    
    413
    
    
    
    
    
    
    
    895Total other expenses
    
    $
    
    
    
    
    413
    
    
    
    
    
    
    
    895Interest and other incomeInterest income
    
    $
    625
    
    
    
    694
    
    
    
    2,101
    
    
    
    1,411Gain on sale
of other equity securities
    
    
    1,178
    
    
    
    
    
    
    
    1,178
    
    
    
    Gain on sale of fixed assets
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    12Forfeited deposits
    
    
    
    
    
    
    2,469
    
    
    
    
    
    
    
    3,898Other income
    
    
    143
    
    
    
    119
    
    
    
    266
    
    
    
    313Total interest and other income
    
    $
    1,946
    
    
    
    3,294
    
    
    
    3,545
    
    
    
    5,634
 18




---



##### Table of Contents



14.
    
    Segment Reporting
   19




---



##### Table of Contents



Three Months Ended
    
    
    
    
    
    OtherJune 30, 2008
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    1,711
    
    
    
    635
    
    
    
    49
    
    
    
    2,395Other revenues
    
    
    559
    
    
    
    251
    
    
    
    
    
    
    
    810Total revenues
    
    
    2,270
    
    
    
    886
    
    
    
    49
    
    
    
    3,205Costs and expenses:Cost of sales of real estate
    
    
    1,145
    
    
    
    587
    
    
    
    26
    
    
    
    1,758Selling, general and administrative expenses
    
    
    4,807
    
    
    
    7,651
    
    
    
    (19
    )
    
    
    12,439Interest expense
    
    
    485
    
    
    
    2,104
    
    
    
    (443
    )
    
    
    2,146Total costs and expenses
    
    
    6,437
    
    
    
    10,342
    
    
    
    (436
    )
    
    
    16,343Earnings from Bluegreen Corporation
    
    
    
    
    
    
    1,211
    
    
    
    
    
    
    
    1,211Interest and other income
    
    
    657
    
    
    
    1,732
    
    
    
    (443
    )
    
    
    1,946(Loss) income from continuing operations
before income taxes
    
    
    (3,510
    )
    
    
    (6,513
    )
    
    
    42
    
    
    
    (9,981
    )Benefit for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss) income from continuing operations
    
    
    (3,510
    )
    
    
    (6,513
    )
    
    
    42
    
    
    
    (9,981
    )Discontinued operations:Income from discontinued operations
    
    
    1,039
    
    
    
    
    
    
    
    
    
    
    
    1,039Net (loss) income
    
    $
    (2,471
    )
    
    
    (6,513
    )
    
    
    42
    
    
    
    (8,942
    )Inventory of real estate
    
    $
    200,976
    
    
    
    48,620
    
    
    
    (7,411
    )
    
    
    242,185Total assets
    
    $
    362,709
    
    
    
    316,389
    
    
    
    (5,387
    )
    
    
    673,711Total debt
    
    $
    121,472
    
    
    
    136,400
    
    
    
    
    
    
    
    257,872Total liabilities
    
    $
    239,666
    
    
    
    181,958
    
    
    
    11,227
    
    
    
    432,851Total shareholders equity
    
    $
    123,043
    
    
    
    134,431
    
    
    
    (16,614
    )
    
    
    240,860
 20




---



##### Table of Contents



Three Months Ended
    
    Primary
    
    
    Tennessee
    
    
    
    
    
    
    OtherJune 30, 2007
    
    Homebuilding
    
    
    Homebuilding
    
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    114,805
    
    
    
    8,848
    
    
    
    1,917
    
    
    
    
    
    
    
    (206
    )
    
    
    125,364Other revenues
    
    
    877
    
    
    
    
    
    
    
    866
    
    
    
    142
    
    
    
    (183
    )
    
    
    1,702Total revenues
    
    
    115,682
    
    
    
    8,848
    
    
    
    2,783
    
    
    
    142
    
    
    
    (389
    )
    
    
    127,066Costs 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
    
    
    
    3,496
    
    
    
    6,928
    
    
    
    (62
    )
    
    
    33,017Interest expense
    
    
    
    
    
    
    
    
    
    
    807
    
    
    
    
    
    
    
    (807
    )
    
    
    Other expenses
    
    
    413
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    413Total costs and expenses
    
    
    183,411
    
    
    
    10,663
    
    
    
    4,786
    
    
    
    7,946
    
    
    
    (1,782
    )
    
    
    205,024Earnings from Bluegreen Corporation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,357
    
    
    
    
    
    
    
    1,357Interest and other income
    
    
    2,560
    
    
    
    23
    
    
    
    1,115
    
    
    
    403
    
    
    
    (807
    )
    
    
    3,294(Loss) income from
continuing operations
before income taxes
    
    
    (65,169
    )
    
    
    (1,792
    )
    
    
    (888
    )
    
    
    (6,044
    )
    
    
    586
    
    
    
    (73,307
    )Benefit (provision) for
income taxes
    
    
    13,353
    
    
    
    596
    
    
    
    407
    
    
    
    1,042
    
    
    
    (286
    )
    
    
    15,112(Loss) income from
continuing operations
    
    
    (51,816
    )
    
    
    (1,196
    )
    
    
    (481
    )
    
    
    (5,002
    )
    
    
    300
    
    
    
    (58,195
    )Discontinued operations:Income from discontinued
operations
    
    
    
    
    
    
    
    
    
    
    108
    
    
    
    
    
    
    
    
    
    
    
    108Net (loss) income
    
    $
    (51,816
    )
    
    
    (1,196
    )
    
    
    (373
    )
    
    
    (5,002
    )
    
    
    300
    
    
    
    (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
    
    
    
    
    
    
    
    654,093Total liabilities
    
    $
    523,358
    
    
    
    44,149
    
    
    
    179,631
    
    
    
    68,526
    
    
    
    (6,420
    )
    
    
    809,244Total shareholders equity
    
    $
    69,560
    
    
    
    3,900
    
    
    
    133,495
    
    
    
    93,380
    
    
    
    (12,994
    )
    
    
    287,341
 21




---



##### Table of Contents



Six Months Ended
    
    
    
    
    
    OtherJune 30, 2008
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    1,865
    
    
    
    635
    
    
    
    49
    
    
    
    2,549Other revenues
    
    
    1,046
    
    
    
    510
    
    
    
    
    
    
    
    1,556Total revenues
    
    
    2,911
    
    
    
    1,145
    
    
    
    49
    
    
    
    4,105Costs and expenses:Cost of sales of real estate
    
    
    1,173
    
    
    
    587
    
    
    
    26
    
    
    
    1,786Selling, general and administrative expenses
    
    
    9,786
    
    
    
    14,747
    
    
    
    (19
    )
    
    
    24,514Interest expense
    
    
    1,173
    
    
    
    4,777
    
    
    
    (1,085
    )
    
    
    4,865Total costs and expenses
    
    
    12,132
    
    
    
    20,111
    
    
    
    (1,078
    )
    
    
    31,165Earnings from Bluegreen Corporation
    
    
    
    
    
    
    1,737
    
    
    
    
    
    
    
    1,737Interest and other income
    
    
    1,556
    
    
    
    3,074
    
    
    
    (1,085
    )
    
    
    3,545(Loss) income from continuing operations
before income taxes
    
    
    (7,665
    )
    
    
    (14,155
    )
    
    
    42
    
    
    
    (21,778
    )Benefit for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss) income from continuing operations
    
    
    (7,665
    )
    
    
    (14,155
    )
    
    
    42
    
    
    
    (21,778
    )Discontinued operations:Income from discontinued operations
    
    
    2,405
    
    
    
    
    
    
    
    
    
    
    
    2,405Net (loss) income
    
    $
    (5,260
    )
    
    
    (14,155
    )
    
    
    42
    
    
    
    (19,373
    )Inventory of real estate
    
    $
    200,976
    
    
    
    48,620
    
    
    
    (7,411
    )
    
    
    242,185Total assets
    
    $
    362,709
    
    
    
    316,389
    
    
    
    (5,387
    )
    
    
    673,711Total debt
    
    $
    121,472
    
    
    
    136,400
    
    
    
    
    
    
    
    257,872Total liabilities
    
    $
    239,666
    
    
    
    181,958
    
    
    
    11,227
    
    
    
    432,851Total shareholders equity
    
    $
    123,043
    
    
    
    134,431
    
    
    
    (16,614
    )
    
    
    240,860
 22




---



##### Table of Contents



Six Months Ended
    
    Primary
    
    
    Tennessee
    
    
    
    
    
    
    OtherJune 30, 2007
    
    Homebuilding
    
    
    Homebuilding
    
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    227,317
    
    
    
    30,505
    
    
    
    2,694
    
    
    
    6,574
    
    
    
    (428
    )
    
    
    266,662Other revenues
    
    
    1,599
    
    
    
    
    
    
    
    1,783
    
    
    
    435
    
    
    
    (203
    )
    
    
    3,614Total revenues
    
    
    228,916
    
    
    
    30,505
    
    
    
    4,477
    
    
    
    7,009
    
    
    
    (631
    )
    
    
    270,276Costs and expenses:Cost of sales of real estate
    
    
    249,275
    
    
    
    29,334
    
    
    
    555
    
    
    
    6,519
    
    
    
    (1,181
    )
    
    
    284,502Selling, general and
administrative expenses
    
    
    39,096
    
    
    
    3,864
    
    
    
    7,269
    
    
    
    15,164
    
    
    
    (62
    )
    
    
    65,331Interest expense
    
    
    
    
    
    
    
    
    
    
    1,022
    
    
    
    
    
    
    
    (1,022
    )
    
    
    Other expenses
    
    
    895
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    895Total costs and expenses
    
    
    289,266
    
    
    
    33,198
    
    
    
    8,846
    
    
    
    21,683
    
    
    
    (2,265
    )
    
    
    350,728Earnings from Bluegreen Corporation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,101
    
    
    
    
    
    
    
    3,101Interest and other income
    
    
    4,201
    
    
    
    52
    
    
    
    2,060
    
    
    
    648
    
    
    
    (1,327
    )
    
    
    5,634(Loss) income from
continuing operations
before income taxes
    
    
    (56,149
    )
    
    
    (2,641
    )
    
    
    (2,309
    )
    
    
    (10,925
    )
    
    
    307
    
    
    
    (71,717
    )Benefit (provision) for income taxes
    
    
    9,814
    
    
    
    924
    
    
    
    973
    
    
    
    2,906
    
    
    
    (116
    )
    
    
    14,501(Loss) income from
continuing operations
    
    
    (46,335
    )
    
    
    (1,717
    )
    
    
    (1,336
    )
    
    
    (8,019
    )
    
    
    191
    
    
    
    (57,216
    )Discontinued operations:Income from discontinued
operations
    
    
    
    
    
    
    
    
    
    
    105
    
    
    
    
    
    
    
    
    
    
    
    105Net (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
    
    
    
    
    
    
    
    654,093Total liabilities
    
    $
    523,358
    
    
    
    44,149
    
    
    
    179,631
    
    
    
    68,526
    
    
    
    (6,420
    )
    
    
    809,244Total shareholders equity
    
    $
    69,560
    
    
    
    3,900
    
    
    
    133,495
    
    
    
    93,380
    
    
    
    (12,994
    )
    
    
    287,341
  15.
    
    Parent Company Financial Statements
  23




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##### Table of Contents



Unaudited Condensed Statements of Financial Condition
 June 30,
    
    
    December 31,2008
    
    
    2007Total assets
    
    $
    371,955
    
    
    
    429,532Total liabilities
    
    $
    131,095
    
    
    
    168,426Total shareholders equity
    
    
    240,860
    
    
    
    261,106Total liabilities and shareholders equity
    
    $
    371,955
    
    
    
    429,532
 Unaudited Condensed Statements of Operations
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Earnings from Bluegreen Corporation
    
    $
    1,211
    
    
    
    1,357
    
    
    
    1,737
    
    
    
    3,101Other revenues
    
    
    544
    
    
    
    398
    
    
    
    1,883
    
    
    
    644Costs and expenses
    
    
    7,318
    
    
    
    7,483
    
    
    
    14,724
    
    
    
    15,748Loss before income taxes
    
    
    (5,563
    )
    
    
    (5,728
    )
    
    
    (11,104
    )
    
    
    (12,003
    )Benefit for income taxes
    
    
    
    
    
    
    927
    
    
    
    
    
    
    
    3,274Net loss before undistributed
loss from consolidated
subsidiaries
    
    
    (5,563
    )
    
    
    (4,801
    )
    
    
    (11,104
    )
    
    
    (8,729
    )Deficit from consolidated
subsidiaries, net of income taxes
    
    
    (3,379
    )
    
    
    (53,286
    )
    
    
    (8,269
    )
    
    
    (48,382
    )Net loss
    
    $
    (8,942
    )
    
    
    (58,087
    )
    
    
    (19,373
    )
    
    
    (57,111
    )
  24




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##### Table of Contents



16.
    
    Certain Relationships and Related Party Transactions
      17.
    
    New Accounting Pronouncements
  25




---



##### Table of Contents



The Fair Value Option for Financial Assets and
Financial Liabilities
 Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51
 Business Combinations
 Disclosures about Derivative Instruments and
Hedging Activities  an amendment of FASB Statement No. 133
 Determination of the Useful Life of
Intangible Assets
 26




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##### Table of Contents



The Hierarchy of Generally Accepted Accounting
Principles
 18.
    
    Litigation
 Class Action litigation
  General litigation
  19.
    
    Financial Information of Levitt and Sons
  27




---



##### Table of Contents



28




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##### Table of Contents



Levitt and Sons
Condensed Consolidated Statements of Financial Condition  Unaudited
(In thousands)
 June 30,
    
    
    December 31,2008
    
    
    2007AssetsCash
    
    $
    6,558
    
    
    
    5,365Inventory
    
    
    168,051
    
    
    
    208,686Property and equipment
    
    
    50
    
    
    
    55Other assets
    
    
    21,758
    
    
    
    23,810Total assets
    
    $
    196,417
    
    
    
    237,916Liabilities and Shareholders EquityAccounts payable and other accrued liabilities
    
    $
    1,116
    
    
    
    469Due to Woodbridge
    
    
    2,858
    
    
    
    748Liabilities subject to compromise (A)
    
    
    327,944
    
    
    
    354,748Shareholders deficit
    
    $
    (135,501
    )
    
    
    (118,049
    )Total liabilities and shareholders equity
    
    $
    196,417
    
    
    
    237,916
 (A) Liabilities Subject to Compromise
  29




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##### Table of Contents



Accounts payable and other accrued liabilities
    
    $
    57,884Customer deposits
    
    
    15,825Due to Woodbridge
    
    
    87,182Deficiency claim associated with secured debt
    
    
    36,800Notes and mortgage payable
    
    
    130,253Total liabilities subject to compromise
    
    $
    327,944
  Levitt and Sons
Condensed Consolidated Statements of Operations  Unaudited
(In thousands)
 Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007RevenuesSales of real estate
    
    $
    28,991
    
    
    
    123,653
    
    
    
    31,275
    
    
    
    257,822Other revenues
    
    
    
    
    
    
    877
    
    
    
    2
    
    
    
    1,599Total revenues
    
    
    28,991
    
    
    
    124,530
    
    
    
    31,277
    
    
    
    259,421Costs and expensesCost of sales of real estate
    
    
    39,048
    
    
    
    171,006
    
    
    
    40,973
    
    
    
    278,609Selling, general and
administrative expenses
    
    
    2,089
    
    
    
    22,655
    
    
    
    4,022
    
    
    
    42,960Total costs and expenses
    
    
    41,137
    
    
    
    193,661
    
    
    
    44,995
    
    
    
    321,569Reorganization items, net
    
    
    (2,875
    )
    
    
    
    
    
    
    (4,860
    )
    
    
    Other income, net of other expense
    
    
    340
    
    
    
    2,170
    
    
    
    1,126
    
    
    
    3,358Loss before income taxes
    
    
    (14,681
    )
    
    
    (66,961
    )
    
    
    (17,452
    )
    
    
    (58,790
    )Benefit for income taxes
    
    
    
    
    
    
    13,949
    
    
    
    
    
    
    
    10,738Net loss
    
    $
    (14,681
    )
    
    
    (53,012
    )
    
    
    (17,452
    )
    
    
    (48,052
    )
 20. Subsequent Event
  30




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
     31




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##### Table of Contents



Executive Overview
    32




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##### Table of Contents



Financial and Non-Financial Metrics
  Land Division Overview
    33




---



##### Table of Contents



Other Operations Overview
     34




---



##### Table of Contents



Critical Accounting Policies and Estimates
  Investments in Unconsolidated Subsidiaries  Cost Method
  35




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##### Table of Contents



CONSOLIDATED RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    Change(In thousands)
    
    ( U n a u d i t e d )
    
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    2,395
    
    
    
    125,364
    
    
    
    (122,969
    )
    
    
    2,549
    
    
    
    266,662
    
    
    
    (264,113
    )Other revenues
    
    
    810
    
    
    
    1,702
    
    
    
    (892
    )
    
    
    1,556
    
    
    
    3,614
    
    
    
    (2,058
    )Total revenues
    
    
    3,205
    
    
    
    127,066
    
    
    
    (123,861
    )
    
    
    4,105
    
    
    
    270,276
    
    
    
    (266,171
    )Costs and expensesCost of sales of real estate
    
    
    1,758
    
    
    
    171,594
    
    
    
    (169,836
    )
    
    
    1,786
    
    
    
    284,502
    
    
    
    (282,716
    )Selling, general and
administrative expenses
    
    
    12,439
    
    
    
    33,017
    
    
    
    (20,578
    )
    
    
    24,514
    
    
    
    65,331
    
    
    
    (40,817
    )Interest expense
    
    
    2,146
    
    
    
    
    
    
    
    2,146
    
    
    
    4,865
    
    
    
    
    
    
    
    4,865Other expenses
    
    
    
    
    
    
    413
    
    
    
    (413
    )
    
    
    
    
    
    
    895
    
    
    
    (895
    )Total costs and expenses
    
    
    16,343
    
    
    
    205,024
    
    
    
    (188,681
    )
    
    
    31,165
    
    
    
    350,728
    
    
    
    (319,563
    )Earnings from Bluegreen Corporation
    
    
    1,211
    
    
    
    1,357
    
    
    
    (146
    )
    
    
    1,737
    
    
    
    3,101
    
    
    
    (1,364
    )Interest and other income
    
    
    1,946
    
    
    
    3,294
    
    
    
    (1,348
    )
    
    
    3,545
    
    
    
    5,634
    
    
    
    (2,089
    )Loss from continuing
operations before income taxes
    
    
    (9,981
    )
    
    
    (73,307
    )
    
    
    63,326
    
    
    
    (21,778
    )
    
    
    (71,717
    )
    
    
    49,939Benefit for income taxes
    
    
    
    
    
    
    15,112
    
    
    
    (15,112
    )
    
    
    
    
    
    
    14,501
    
    
    
    (14,501
    )Loss from continuing operations
    
    
    (9,981
    )
    
    
    (58,195
    )
    
    
    48,214
    
    
    
    (21,778
    )
    
    
    (57,216
    )
    
    
    35,438Discontinued operations:Income from discontinued
operations, net of tax
    
    
    1,039
    
    
    
    108
    
    
    
    931
    
    
    
    2,405
    
    
    
    105
    
    
    
    2,300Net loss
    
    $
    (8,942
    )
    
    
    (58,087
    )
    
    
    49,145
    
    
    
    (19,373
    )
    
    
    (57,111
    )
    
    
    37,738
 For the Three Months Ended June 30, 2008 Compared to the Same 2007 Period:
   36




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37




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##### Table of Contents



For the Six Months Ended June 30, 2008 Compared to the Same 2007 Period:
     38




---



##### Table of Contents



39




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##### Table of Contents



LAND DIVISION RESULTS OF OPERATIONS
 Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    Change(Dollars in thousands)
    
    ( U n a u d i t e d )
    
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    1,711
    
    
    
    1,917
    
    
    
    (206
    )
    
    
    1,865
    
    
    
    2,694
    
    
    
    (829
    )Other revenues
    
    
    559
    
    
    
    866
    
    
    
    (307
    )
    
    
    1,046
    
    
    
    1,783
    
    
    
    (737
    )Total revenues
    
    
    2,270
    
    
    
    2,783
    
    
    
    (513
    )
    
    
    2,911
    
    
    
    4,477
    
    
    
    (1,566
    )Costs and expensesCost of sales of real estate
    
    
    1,145
    
    
    
    483
    
    
    
    662
    
    
    
    1,173
    
    
    
    555
    
    
    
    618Selling, general and
administrative expenses
    
    
    4,807
    
    
    
    3,496
    
    
    
    1,311
    
    
    
    9,786
    
    
    
    7,269
    
    
    
    2,517Interest expense
    
    
    485
    
    
    
    807
    
    
    
    (322
    )
    
    
    1,173
    
    
    
    1,022
    
    
    
    151Total costs and expenses
    
    
    6,437
    
    
    
    4,786
    
    
    
    1,651
    
    
    
    12,132
    
    
    
    8,846
    
    
    
    3,286Interest and other income
    
    
    657
    
    
    
    1,115
    
    
    
    (458
    )
    
    
    1,556
    
    
    
    2,060
    
    
    
    (504
    )Loss from continuing
operations before income
taxes
    
    
    (3,510
    )
    
    
    (888
    )
    
    
    (2,622
    )
    
    
    (7,665
    )
    
    
    (2,309
    )
    
    
    (5,356
    )Benefit for income taxes
    
    
    
    
    
    
    407
    
    
    
    (407
    )
    
    
    
    
    
    
    973
    
    
    
    (973
    )Loss from continuing operations
    
    
    (3,510
    )
    
    
    (481
    )
    
    
    (3,029
    )
    
    
    (7,665
    )
    
    
    (1,336
    )
    
    
    (6,329
    )Discontinued operations:Income from discontinued
operations, net of tax
    
    
    1,039
    
    
    
    108
    
    
    
    931
    
    
    
    2,405
    
    
    
    105
    
    
    
    2,300Net loss
    
    $
    (2,471
    )
    
    
    (373
    )
    
    
    (2,098
    )
    
    
    (5,260
    )
    
    
    (1,231
    )
    
    
    (4,029
    )Acres sold
    
    
    3
    
    
    
    1
    
    
    
    2
    
    
    
    3
    
    
    
    1
    
    
    
    2Margin percentage (a)
    
    
    33.1
    %
    
    
    74.8
    %
    
    
    (41.7
    )%
    
    
    37.1
    %
    
    
    79.4
    %
    
    
    (42.3
    )%Unsold saleable acres (b)
    
    
    6,676
    
    
    
    6,870
    
    
    
    (194
    )
    
    
    6,676
    
    
    
    6,870
    
    
    
    (194
    )Acres subject to sales
contracts  third parties
    
    
    326
    
    
    
    98
    
    
    
    228
    
    
    
    326
    
    
    
    98
    
    
    
    228Aggregate sales price of acres
subject to sales contracts to
third parties
    
    $
    96,164
    
    
    
    29,013
    
    
    
    67,151
    
    
    
    96,164
    
    
    
    29,013
    
    
    
    67,151
 
 (a)
    
    Sales of real estate and margin percentage include lot sales, revenues from look back provisions and recognition of deferred revenue associated with sales in prior
periods.(b)
    
    Includes approximately 56 acres related to assets held for sale as of June 30, 2008.  40




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For the Three Months Ended June 30, 2008 Compared to the Same 2007 Period:
      41




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##### Table of Contents



For the Six Months Ended June 30, 2008 Compared to the Same 2007 Period:
      42




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##### Table of Contents



OTHER OPERATIONS RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    Change(In thousands)
    
    ( U n a u d i t e d )
    
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    635
    
    
    
    
    
    
    
    635
    
    
    
    635
    
    
    
    6,574
    
    
    
    (5,939
    )Other revenues
    
    
    251
    
    
    
    142
    
    
    
    109
    
    
    
    510
    
    
    
    435
    
    
    
    75Total revenues
    
    
    886
    
    
    
    142
    
    
    
    744
    
    
    
    1,145
    
    
    
    7,009
    
    
    
    (5,864
    )Costs and expensesCost of sales of real estate
    
    
    587
    
    
    
    1,018
    
    
    
    (431
    )
    
    
    587
    
    
    
    6,519
    
    
    
    (5,932
    )Selling, general and
administrative expenses
    
    
    7,651
    
    
    
    6,928
    
    
    
    723
    
    
    
    14,747
    
    
    
    15,164
    
    
    
    (417
    )Interest expense
    
    
    2,104
    
    
    
    
    
    
    
    2,104
    
    
    
    4,777
    
    
    
    
    
    
    
    4,777Total costs and expenses
    
    
    10,342
    
    
    
    7,946
    
    
    
    2,396
    
    
    
    20,111
    
    
    
    21,683
    
    
    
    (1,572
    )Earnings from Bluegreen Corporation
    
    
    1,211
    
    
    
    1,357
    
    
    
    (146
    )
    
    
    1,737
    
    
    
    3,101
    
    
    
    (1,364
    )Interest and other income
    
    
    1,732
    
    
    
    403
    
    
    
    1,329
    
    
    
    3,074
    
    
    
    648
    
    
    
    2,426Loss before income taxes
    
    
    (6,513
    )
    
    
    (6,044
    )
    
    
    (469
    )
    
    
    (14,155
    )
    
    
    (10,925
    )
    
    
    (3,230
    )Benefit for income taxes
    
    
    
    
    
    
    1,042
    
    
    
    (1,042
    )
    
    
    
    
    
    
    2,906
    
    
    
    (2,906
    )Net loss
    
    $
    (6,513
    )
    
    
    (5,002
    )
    
    
    (1,511
    )
    
    
    (14,155
    )
    
    
    (8,019
    )
    
    
    (6,136
    )
  43




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For the Three Months Ended June 30, 2008 Compared to the Same 2007 Period:
       44




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##### Table of Contents



For the Six Months Ended June 30, 2008 Compared to the Same 2007 Period:
       45




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##### Table of Contents



PRIMARY HOMEBUILDING SEGMENT RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    Change(Dollars in thousands)
    
    ( U n a u d i t e d )
    
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    
    
    
    
    114,805
    
    
    
    (114,805
    )
    
    
    
    
    
    
    227,317
    
    
    
    (227,317
    )Other revenues
    
    
    
    
    
    
    877
    
    
    
    (877
    )
    
    
    
    
    
    
    1,599
    
    
    
    (1,599
    )Total revenues
    
    
    
    
    
    
    115,682
    
    
    
    (115,682
    )
    
    
    
    
    
    
    228,916
    
    
    
    (228,916
    )Costs and expensesCost of sales of real estate
    
    
    
    
    
    
    162,323
    
    
    
    (162,323
    )
    
    
    
    
    
    
    249,275
    
    
    
    (249,275
    )Selling, general and
administrative expenses
    
    
    
    
    
    
    20,675
    
    
    
    (20,675
    )
    
    
    
    
    
    
    39,096
    
    
    
    (39,096
    )Other expenses
    
    
    
    
    
    
    413
    
    
    
    (413
    )
    
    
    
    
    
    
    895
    
    
    
    (895
    )Total costs and expenses
    
    
    
    
    
    
    183,411
    
    
    
    (183,411
    )
    
    
    
    
    
    
    289,266
    
    
    
    (289,266
    )Interest and other income
    
    
    
    
    
    
    2,560
    
    
    
    (2,560
    )
    
    
    
    
    
    
    4,201
    
    
    
    (4,201
    )Loss before income taxes
    
    
    
    
    
    
    (65,169
    )
    
    
    65,169
    
    
    
    
    
    
    
    (56,149
    )
    
    
    56,149Benefit for income taxes
    
    
    
    
    
    
    13,353
    
    
    
    (13,353
    )
    
    
    
    
    
    
    9,814
    
    
    
    (9,814
    )Net loss
    
    $
    
    
    
    
    (51,816
    )
    
    
    51,816
    
    
    
    
    
    
    
    (46,335
    )
    
    
    46,335Homes delivered (units)
    
    
    
    
    
    
    335
    
    
    
    (335
    )
    
    
    
    
    
    
    650
    
    
    
    (650
    )Construction starts (units)
    
    
    
    
    
    
    175
    
    
    
    (175
    )
    
    
    
    
    
    
    377
    
    
    
    (377
    )Average selling price of
homes delivered
    
    $
    
    
    
    
    343
    
    
    
    (343
    )
    
    
    
    
    
    
    350
    
    
    
    (350
    )Margin percentage
    
    
    
    
    
    
    (41.4
    )%
    
    
    41.4
    %
    
    
    
    
    
    
    (9.7
    )%
    
    
    9.7
    %Gross orders (units)
    
    
    
    
    
    
    399
    
    
    
    (399
    )
    
    
    
    
    
    
    594
    
    
    
    (594
    )Gross orders (value)
    
    $
    
    
    
    
    106,134
    
    
    
    (106,134
    )
    
    
    
    
    
    
    172,650
    
    
    
    (172,650
    )Cancellations (units)
    
    
    
    
    
    
    156
    
    
    
    (156
    )
    
    
    
    
    
    
    250
    
    
    
    (250
    )Net orders (units)
    
    
    
    
    
    
    243
    
    
    
    (243
    )
    
    
    
    
    
    
    344
    
    
    
    (344
    )Backlog of homes (units)
    
    
    
    
    
    
    820
    
    
    
    (820
    )
    
    
    
    
    
    
    820
    
    
    
    (820
    )Backlog of homes (value)
    
    $
    
    
    
    
    270,907
    
    
    
    (270,907
    )
    
    
    
    
    
    
    270,907
    
    
    
    (270,907
    )
   46




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TENNESSEE HOMEBUILDING SEGMENT RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    Change(Dollars in thousands)
    
    ( U n a u d i t e d )
    
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    
    
    
    
    8,848
    
    
    
    (8,848
    )
    
    
    
    
    
    
    30,505
    
    
    
    (30,505
    )Total revenues
    
    
    
    
    
    
    8,848
    
    
    
    (8,848
    )
    
    
    
    
    
    
    30,505
    
    
    
    (30,505
    )Costs and expensesCost of sales of real estate
    
    
    
    
    
    
    8,683
    
    
    
    (8,683
    )
    
    
    
    
    
    
    29,334
    
    
    
    (29,334
    )Selling, general and
administrative expenses
    
    
    
    
    
    
    1,980
    
    
    
    (1,980
    )
    
    
    
    
    
    
    3,864
    
    
    
    (3,864
    )Total costs and expenses
    
    
    
    
    
    
    10,663
    
    
    
    (10,663
    )
    
    
    
    
    
    
    33,198
    
    
    
    (33,198
    )Interest and other income
    
    
    
    
    
    
    23
    
    
    
    (23
    )
    
    
    
    
    
    
    52
    
    
    
    (52
    )Loss before income taxes
    
    
    
    
    
    
    (1,792
    )
    
    
    1,792
    
    
    
    
    
    
    
    (2,641
    )
    
    
    2,641Benefit for income taxes
    
    
    
    
    
    
    596
    
    
    
    (596
    )
    
    
    
    
    
    
    924
    
    
    
    (924
    )Net loss
    
    $
    
    
    
    
    (1,196
    )
    
    
    1,196
    
    
    
    
    
    
    
    (1,717
    )
    
    
    1,717Homes delivered (units)
    
    
    
    
    
    
    44
    
    
    
    (44
    )
    
    
    
    
    
    
    91
    
    
    
    (91
    )Construction starts (units)
    
    
    
    
    
    
    60
    
    
    
    (60
    )
    
    
    
    
    
    
    112
    
    
    
    (112
    )Average selling price of
homes delivered
    
    $
    
    
    
    
    201
    
    
    
    (201
    )
    
    
    
    
    
    
    214
    
    
    
    (214
    )Margin percentage
    
    
    
    
    
    
    1.9
    %
    
    
    (1.9
    )%
    
    
    
    
    
    
    6.0
    %
    
    
    (6.0
    )%Gross orders (units)
    
    
    
    
    
    
    79
    
    
    
    (79
    )
    
    
    
    
    
    
    169
    
    
    
    (169
    )Gross orders (value)
    
    $
    
    
    
    
    16,291
    
    
    
    (16,291
    )
    
    
    
    
    
    
    36,634
    
    
    
    (36,634
    )Cancellations (units)
    
    
    
    
    
    
    31
    
    
    
    (31
    )
    
    
    
    
    
    
    63
    
    
    
    (63
    )Net orders (units)
    
    
    
    
    
    
    48
    
    
    
    (48
    )
    
    
    
    
    
    
    106
    
    
    
    (106
    )Backlog of homes (units)
    
    
    
    
    
    
    137
    
    
    
    (137
    )
    
    
    
    
    
    
    137
    
    
    
    (137
    )Backlog of homes (value)
    
    $
    
    
    
    
    26,925
    
    
    
    (26,925
    )
    
    
    
    
    
    
    26,925
    
    
    
    (26,925
    )
  47




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FINANCIAL CONDITION
 June 30, 2008 compared to December 31, 2007
  
    
    a net decrease in cash and cash equivalents of $69.9 million, which resulted from
cash used in operations of $39.8 million, cash used in investing activities of $14.6
million and cash used in financing activities of $15.5 million;
    
    a net increase of the investment in other equity securities of $15.7 million as a
result of the acquisition (net of shares sold) of shares of equity securities; and
    
    a net increase in inventory of real estate of $14.9 million mainly due to the land
development activities of the Land Division.
  
    
    a net decrease in notes and mortgage notes payable of $16.9 million, primarily due
to curtailment payments made in connection with a development loan collateralized by
land in Tradition Hilton Head; and
    
    a net decrease in accounts payable and other accrued liabilities of approximately
$4.2 million mainly attributable to decreased severance and construction related
accruals.
 LIQUIDITY AND CAPITAL RESOURCES
    48




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##### Table of Contents



Woodbridge (Parent Company level)
      49




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##### Table of Contents



Core Communities
      50




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##### Table of Contents



Off Balance Sheet Arrangements and Contractual Obligations
  Accounting for Contingencies
 Accounting for Special
Assessments and Tax Increment Financing
 51




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##### Table of Contents



Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations (1) (2)
    
    $
    257,872
    
    
    
    26,806
    
    
    
    117,967
    
    
    
    3,848
    
    
    
    109,251Long-term debt obligations
associated with assets held for
sale
    
    
    80,693
    
    
    
    8,886
    
    
    
    68,645
    
    
    
    112
    
    
    
    3,050Operating lease obligations
    
    
    4,094
    
    
    
    1,245
    
    
    
    1,257
    
    
    
    424
    
    
    
    1,168Total obligations
    
    $
    342,659
    
    
    
    36,937
    
    
    
    187,869
    
    
    
    4,384
    
    
    
    113,469
 
 (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 collateralizing those
obligations, as well as curtailment repayments prior to scheduled maturity pursuant to
re-margining requirements. Accounting for Uncertainty in Income Taxes  an interpretation of FASB No. 109
   52




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NEW ACCOUNTING PRONOUNCEMENTS.
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
    53




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ITEM 4. CONTROLS AND PROCEDURES
     54




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PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
 Election of Directors
  Nominee
    
    For
    
    WithheldJohn E. Abdo
    
    
    117,409,509
    
    
    
    6,485,516William Nicholson
    
    
    117,664,868
    
    
    
    6,230,157Alan J. Levy
    
    
    117,657,857
    
    
    
    6,237,163
  Approval of the Amendment to the Companys Amended and Restated Articles of Incorporation
  For
    
    Against
    
    Abstain96,812,611
    
    
    0
    
    
    
    0
 55




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##### Table of Contents



Item 5.
    
    Other Information.
  
 Item 6.
    
    Exhibits
  Exhibit 31.1*
    
    CEO Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.Exhibit 31.2*
    
    CFO Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.Exhibit 32.1**
    
    CEO 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**
    
    CFO 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 56




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##### Table of Contents



WOODBRIDGE HOLDINGS CORPORATIONDate: August 11, 2008
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive OfficerDate: August 11, 2008
    By:
    /s/  John K. GrelleJohn K. Grelle, Chief Financial Officer 57