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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549
 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 2005 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number
001-31931 Levitt Corporation  Florida
(State or other jurisdiction of
incorporation or organization)
    
    11-3675068
(I.R.S. Employer
Identification No.)1750 East Sunrise Boulevard
Ft. Lauderdale, Florida
(Address of principal executive offices)
    
    33304
(Zip Code)
 (954) 760-5200
(Registrants telephone number, including area code)   Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes   x   No   
o Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act). Yes   x   No   
o Indicate the number of shares outstanding for each of the Registrants classes of common stock, as
of May 6, 2005: Class of Common Stock
    
    Shares OutstandingClass A common stock, $0.01 par value
    
    
    18,597,166Class B common stock, $0.01 par value
    
    
    1,219,031




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Levitt Corporation and Subsidiaries
Index to Unaudited Consolidated Financial Statements PagePART I.
    
    FINANCIAL INFORMATION
    
    
    3Item 1.
    
    Financial Statements:
    
    
    3Consolidated Statements of Financial Condition as of March 31, 2005 and December 31, 2004  Unaudited
    
    
    3Consolidated Statements of Income for the three months ended March 31, 2005 and 2004  Unaudited
    
    
    4Consolidated Statements of Comprehensive Income for the three months ended March 31, 2005 and 2004  Unaudited
    
    
    5Consolidated Statement of Shareholders Equity for the three months ended March 31, 2005  Unaudited
    
    
    6Consolidated Statements of Cash Flows for the three months ended March 31, 2005 and 2004  Unaudited
    
    
    7Notes to Unaudited Consolidated Financial Statements for the three months ended March 31, 2005 and 2004
    
    
    9Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    30Item 4.
    
    Controls and Procedures
    
    
    31PART II.
    
    OTHER INFORMATION
    
    
    32Item 6.
    
    Exhibits
    
    
    32SIGNATURES
    
    
    
    
    33Junior Subordinated IndentureAmended & Restated Trust AgreementRevolving Loan AgreementUnlimited GuarantyAmended & Restated Trust AgreementJunior Subordinated IndentureSection 302 Chief Executive Officer CertificationSection 302 Chief Financial Officer CertificationSection 906 Chief Executive Officer CertificationSection 906 Chief Financial Officer Certification
 2




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PART I. FINANCIAL INFORMATION 
 Item 1. Financial Statements: Levitt Corporation 
 Consolidated Statements of Financial Condition  Unaudited
 (In thousands except share data)
 March 31,
    
    
    December 31,2005
    
    
    2004AssetsCash and cash equivalents
    
    $
    134,784
    
    
    
    125,522Restricted cash
    
    
    1,041
    
    
    
    2,017Notes receivable
    
    
    4,284
    
    
    
    4,484Inventory of real estate
    
    
    401,818
    
    
    
    413,471Investments in real estate joint ventures
    
    
    475
    
    
    
    608Investment in unconsolidated trust
    
    
    699
    
    
    
    Investment in Bluegreen Corporation
    
    
    82,761
    
    
    
    80,572Property and equipment, net
    
    
    34,832
    
    
    
    31,137Other assets
    
    
    22,849
    
    
    
    20,656Total assets
    
    $
    683,543
    
    
    
    678,467Liabilities and Shareholders EquityAccounts
payable and accrued liabilities
    
    $
    66,255
    
    
    
    66,271Customer deposits
    
    
    41,524
    
    
    
    43,022Current income tax payable
    
    
    18,822
    
    
    
    4,314Notes and mortgage notes payable
    
    
    184,294
    
    
    
    221,605Notes and mortgage notes payable to affiliates
    
    
    23,605
    
    
    
    46,621Junior subordinated debentures
    
    
    23,196
    
    
    
    Deferred tax liability, net
    
    
    1,605
    
    
    
    1,845Total liabilities
    
    
    359,301
    
    
    
    383,678Shareholders equity:Preferred stock, $0.01 par valueAuthorized: 5,000,000 sharesIssued and outstanding: no shares
    
    
    
    
    
    
    Class A Common Stock, $0.01 par valueAuthorized: 50,000,000 sharesIssued and outstanding: 18,597,166 shares
    
    
    186
    
    
    
    186Class B Common Stock, $0.01 par valueAuthorized: 10,000,000 sharesIssued and outstanding: 1,219,031 shares
    
    
    12
    
    
    
    12Additional paid-in capital
    
    
    180,734
    
    
    
    180,790Retained earnings
    
    
    143,065
    
    
    
    113,643Accumulated other comprehensive income
    
    
    245
    
    
    
    158Total shareholders equity
    
    
    324,242
    
    
    
    294,789Total liabilities and shareholders equity
    
    $
    683,543
    
    
    
    678,467
 See accompanying notes to unaudited consolidated financial statements. 3




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Levitt Corporation 
 Consolidated Statements of Income  Unaudited
 (In thousands, except per share data)
 Three Months EndedMarch 31,2005
    
    
    2004Revenues:Sales of real estate
    
    $
    198,866
    
    
    
    98,523Title and mortgage operations
    
    
    948
    
    
    
    970Total revenues
    
    
    199,814
    
    
    
    99,493Costs and expenses:Cost of sales of real estate
    
    
    130,589
    
    
    
    69,665Selling, general and administrative expenses
    
    
    23,146
    
    
    
    14,047Interest expense, net
    
    
    
    
    
    
    58Other expenses
    
    
    1,316
    
    
    
    616Minority interest
    
    
    
    
    
    
    25Total costs and expenses
    
    
    155,051
    
    
    
    84,411Earnings from Bluegreen Corporation
    
    
    2,138
    
    
    
    2,086Earnings from real estate joint ventures
    
    
    90
    
    
    
    3,607Interest and other income
    
    
    1,322
    
    
    
    478Income before income taxes
    
    
    48,313
    
    
    
    21,253Provision for income taxes
    
    
    18,495
    
    
    
    8,198Net income
    
    $
    29,818
    
    
    
    13,055Earnings per share:Basic earnings per share
    
    $
    1.50
    
    
    
    0.88Fully diluted earnings per share
    
    $
    1.49
    
    
    
    0.87Weighted average common shares outstanding:Basic average number of shares outstanding
    
    
    19,816
    
    
    
    14,816Diluted average number of shares outstanding
    
    
    19,965
    
    
    
    14,852Dividends declared per common share:Class A common stock
    
    $
    0.02
    
    
    
    Class B common stock
    
    $
    0.02
    
    
    
    
 See accompanying notes to unaudited consolidated financial statements. 4




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Levitt Corporation 
 Consolidated Statements of Comprehensive Income  Unaudited
 (In thousands)
 Three MonthsEnded March 31,2005
    
    
    2004Net income
    
    $
    29,818
    
    
    
    13,055Other comprehensive income:Pro-rata share of unrealized gain (loss)recognized by Bluegreen on retainedinterests in notes receivable sold, net of tax
    
    
    87
    
    
    
    (92
    )Comprehensive income
    
    $
    29,905
    
    
    
    12,963
 See accompanying notes to unaudited consolidated financial statements. 5




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Levitt Corporation 
 Consolidated Statement of Shareholders Equity  Unaudited
 Three Months Ended March 31, 2005
(In thousands)
 AccumulatedCompre-Class A
    
    
    Class B
    
    
    Additional
    
    
    
    
    
    
    hensiveCommon
    
    
    Common
    
    
    Paid-In
    
    
    Retained
    
    
    IncomeStock
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    (Loss)
    
    
    TotalBalance at December 31, 2004
    
    $
    186
    
    
    
    12
    
    
    
    180,790
    
    
    
    113,643
    
    
    
    158
    
    
    
    294,789Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,818
    
    
    
    
    
    
    
    29,818Pro-rata share of unrealized gainrecognized by Bluegreen on saleof retained interests, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    87
    
    
    
    87Issuance of Bluegreen commonstock, net of tax
    
    
    
    
    
    
    
    
    
    
    (56
    )
    
    
    
    
    
    
    
    
    
    
    (56
    )Cash dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (396
    )
    
    
    
    
    
    
    (396
    )Balance at March 31, 2005
    
    $
    186
    
    
    
    12
    
    
    
    180,734
    
    
    
    143,065
    
    
    
    245
    
    
    
    324,242
 See accompanying notes to unaudited consolidated financial statements. 6




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Levitt Corporation 
 Consolidated Statements of Cash Flows  Unaudited
 (In thousands)
 Three Months EndedMarch 31,2005
    
    
    2004Operating activities:Net income
    
    $
    29,818
    
    
    
    13,055Adjustments to reconcile net income to net cashprovided by operating activities:Depreciation and amortization
    
    
    362
    
    
    
    252Change in deferred income taxes
    
    
    (260
    )
    
    
    901Earnings from Bluegreen Corporation
    
    
    (2,138
    )
    
    
    (2,086
    )Earnings from unconsolidated trust
    
    
    (3
    )
    
    
    Earnings from real estate joint ventures
    
    
    (90
    )
    
    
    (3,607
    )Write-off of debt offering costs
    
    
    
    
    
    
    117Changes in operating assets and liabilities:Restricted cash
    
    
    976
    
    
    
    (216
    )Inventory of real estate
    
    
    11,653
    
    
    
    (10,205
    )Notes receivable
    
    
    200
    
    
    
    175Other assets
    
    
    (1,272
    )
    
    
    (2,199
    )Accounts payable, accrued expenses and other liabilities
    
    
    12,994
    
    
    
    16,980Net cash provided by operating activities
    
    
    52,240
    
    
    
    13,167Investing activities:Investment in real estate joint ventures
    
    
    
    
    
    
    (35
    )Distributions from real estate joint ventures
    
    
    223
    
    
    
    1,473Investment in unconsolidated trust
    
    
    (696
    )
    
    
    Additions to property and equipment
    
    
    (4,052
    )
    
    
    (3,415
    )Net cash used in investing activities
    
    
    (4,525
    )
    
    
    (1,977
    )Financing activities:Proceeds from notes and mortgage notes payable
    
    
    74,984
    
    
    
    35,525Proceeds from notes and mortgage notes payable to affiliates
    
    
    5,148
    
    
    
    10,167Proceeds from junior subordinated debentures
    
    
    23,196
    
    
    
    Repayment of notes and mortgage notes payable
    
    
    (112,295
    )
    
    
    (35,638
    )Repayment of notes and mortgage notes payable to affiliates
    
    
    (28,164
    )
    
    
    (11,155
    )Payments for debt offering costs
    
    
    (926
    )
    
    
    (117
    )Repayment of development bonds payable
    
    
    
    
    
    
    (86
    )Cash dividends paid
    
    
    (396
    )
    
    
    Net cash used in financing activities
    
    
    (38,453
    )
    
    
    (1,304
    )Increase in cash and cash equivalents
    
    
    9,262
    
    
    
    9,886Cash and cash equivalents at the beginning of period
    
    
    125,522
    
    
    
    35,965Cash and cash equivalents at end of period
    
    $
    134,784
    
    
    
    45,851
 7




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Levitt Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands) For the Three MonthsEnded March 31,2005
    
    
    2004Supplemental cash flow informationInterest paid on borrowings, net of amounts capitalized
    
    $
    (247
    )
    
    
    60Income taxes paid
    
    
    4,200
    
    
    
    300Supplemental disclosure of non-cash operating,investing and financing activities:Change in shareholders equity resulting from pro-ratashare of unrealized gain recognized by Bluegreen on saleof retained interests, net of tax
    
    
    87
    
    
    
    (92
    )Change in shareholders equity resulting from theIssuance of Bluegreen common stock, net of tax
    
    
    (56
    )
    
    
    (177
    )
 See accompanying notes to unaudited consolidated financial statements. 8




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Levitt Corporation 
 Notes to Unaudited Consolidated Financial Statements
 1. Presentation of Interim Financial Statements Levitt Corporation (including its subsidiaries, the Company) engages in real estate
activities through its Homebuilding and Land Divisions and Other Operations. The Homebuilding
Division operates through Levitt and Sons, LLC (Levitt and Sons) and Bowden Building Corporation
(Bowden), developers of single family home, townhome and condominium communities. The Land
Division consists of the operations of Core Communities, LLC, a land and master-planned community
developer (Core Communities). Other Operations includes Levitt Commercial, LLC, a developer of
industrial and residential properties (Levitt Commercial); investments in real estate and real
estate joint ventures; and an equity investment in Bluegreen Corporation, a New York Stock
Exchange-listed company engaged in the acquisition, development, marketing and sale of vacation
ownership interests in primarily drive-to resorts, as well as residential homesites located
around golf courses and other amenities (Bluegreen). The accompanying unaudited consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant inter-segment transactions have been
eliminated in consolidation. The financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for interim financial
information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and disclosures required by accounting
principles generally accepted in the United States of America for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the three month period
ended March 31, 2005 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2005. Certain items in prior period financial statements have been
reclassified to conform to the current presentation. These financial statements should be read in
conjunction with the Companys consolidated financial statements and footnotes thereto included in
the Companys annual report on Form 10-K for the year ended December 31, 2004. 2. Stock Based Compensation The
Company currently accounts for stock option grants under the recognition and measurement principles
of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and
related Interpretations. No compensation expense is recognized because all stock options granted
have exercise prices not less than the market value of the Companys stock on the date of grant. 9




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The following table illustrates the effect on net income and earnings per share if the Company
had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based
Compensation, as amended by SFAS 148, Accounting for Stock-Based Compensation  Transition and
Disclosure, to stock-based employee compensation (in thousands, except per share data): Three Months EndedMarch 31,2005
    
    
    2004Pro forma net incomeNet income, as reported
    
    $
    29,818
    
    
    
    13,055Deduct: Total stock-based employee compensationexpense determined under fair value basedmethod for all awards, net of related income tax effect
    
    
    (152
    )
    
    
    (462
    )Pro forma net income
    
    $
    29,666
    
    
    
    12,593Basic earnings per share:As reported
    
    $
    1.50
    
    
    
    0.88Pro forma
    
    $
    1.50
    
    
    
    0.85Diluted earnings per share:As reported
    
    $
    1.49
    
    
    
    0.87Pro forma
    
    $
    1.48
    
    
    
    0.84
 The fair values of options granted were estimated on the date of their grant using the
Black-Scholes option pricing model based on the following assumptions: Expected volatility
    
    
    43.08% - 50.35
    %Expected dividend yield
    
    
    0.00% - 0.32
    %Risk-free interest rate
    
    
    4.13% - 4.40
    %Expected life
    
    7 - 10 years
 3. Inventory of Real Estate Inventory of real estate is summarized as follows (in thousands): March 31,
    
    
    December 31,2005
    
    
    2004Land and land development costs
    
    $
    295,265
    
    
    
    291,414Construction costs
    
    
    82,534
    
    
    
    100,129Capitalized interest
    
    
    11,980
    
    
    
    11,110Other costs
    
    
    12,039
    
    
    
    10,818$
    401,818
    
    
    
    413,471
 10




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4. Interest Interest incurred relating to land under development and construction is capitalized to real
estate inventory during the active development period. Interest is capitalized as a component of
inventory at the effective rates paid on borrowings during the pre-construction and planning stages
and the periods that projects are under development. Capitalization of interest is discontinued if
development ceases at a project. Capitalized interest is expensed as a component of cost of sales
as related homes, land and units are sold. The following table is a summary of interest incurred
and the amounts capitalized (in thousands): Three Months EndedMarch 31,2005
    
    
    2004Interest incurred to non-affiliates
    
    $
    2,881
    
    
    
    1,360Interest incurred to affiliates
    
    
    613
    
    
    
    634Interest capitalized
    
    
    (3,494
    )
    
    
    (1,936
    )Interest expense, net
    
    $
    
    
    
    
    58Interest expensed in cost of sales
    
    $
    2,624
    
    
    
    1,800
 5. Other Expenses and Interest and Other Income Other expenses and interest and other income are summarized as follows (in thousands): Three Months EndedMarch 31,2005
    
    
    2004Other expensesTitle and mortgage operations expenses
    
    $
    639
    
    
    
    616Penalty on debt prepayment
    
    
    677
    
    
    
    Total other expenses
    
    $
    1,316
    
    
    
    616Interest and other incomeInterest income
    
    $
    518
    
    
    
    166Other income
    
    
    804
    
    
    
    312Total interest and other income
    
    $
    1,322
    
    
    
    478
 6. Investment in Bluegreen Corporation The Company accounts for its investment in Bluegreen under the equity method. At March 31,
2005, the Company owned approximately 9.5 million shares, or approximately 31%, of Bluegreens
outstanding common stock. 11




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Bluegreens unaudited condensed consolidated balance sheets and unaudited condensed
consolidated statements of income are as follows (in thousands): Unaudited Condensed Consolidated Balance Sheets March 31,
    
    
    December 31,2005
    
    
    2004Total assets
    
    $
    671,266
    
    
    
    634,809Total liabilities
    
    $
    392,052
    
    
    
    363,933Minority interest
    
    
    6,782
    
    
    
    6,009Total shareholders equity
    
    
    272,432
    
    
    
    264,867Total liabilities and shareholders equity
    
    $
    671,266
    
    
    
    634,809
 Unaudited Condensed Consolidated Statements of Income Three Months EndedMarch 31,
    
    
    March 31,2005
    
    
    2004Revenues and other income
    
    $
    130,048
    
    
    
    107,144Cost and other expenses
    
    
    118,776
    
    
    
    98,672Income before minority interest andprovision for income taxes
    
    
    11,272
    
    
    
    8,472Minority interest
    
    
    773
    
    
    
    829Income before provision for income taxes
    
    
    10,499
    
    
    
    7,643Provision for income taxes
    
    
    4,042
    
    
    
    2,943Net income
    
    $
    6,457
    
    
    
    4,700
 7. Debt In March 2005, the Company formed a statutory business trust, Levitt Capital Trust I, (the
Trust) for the purpose of issuing trust preferred securities and investing the proceeds thereof
in junior subordinated debentures of the Company (the Debentures). On March 15, 2005, the Trust
issued $22.5 million of trust preferred securities. The Trust used the proceeds from issuing the
trust preferred securities to purchase an identical amount of Debentures from the Company.
Interest on the Debentures and distributions on the trust preferred securities will be payable
quarterly in arrears at a fixed rate of 8.11% through March 30, 2010 and thereafter at a floating
rate of 3.85% over 3-month London Interbank Offered Rate (LIBOR) until the scheduled maturity
date of March 30, 2035. Distributions on the trust preferred securities will be cumulative and
based upon the liquidation value of the trust preferred security. The trust preferred securities
will be subject to mandatory redemption, in whole or in part, upon repayment of the Debentures at
maturity or their earlier redemption. The Debentures are redeemable five years from the issue date
or sooner following certain specified events. In addition, the Company contributed $696,000 to the
Trust in exchange for the Trusts common securities, all of which are owned by the Company, and
those proceeds were also used to purchase an identical amount of Debentures from the Company. The
terms of the Trusts common securities are 12




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nearly identical to the trust preferred securities. The issuance of trust preferred securities
was part of a larger pooled trust securities offering which was not registered under the Securities
Act of 1933. Proceeds were used to repay approximately $22.0 million of indebtedness to
affiliates. 8. Commitments and Contingencies At March 31, 2005, the Company had approximately $211.7 million of commitments to purchase
properties for development. Approximately $37.3 million of these commitments are subject to due
diligence and satisfaction of certain requirements and conditions, including financing
contingencies. The following table summarizes certain information relating to outstanding purchase
and option contracts, including those contracts subject to the completion of due diligence. Purchase
    
    
    Units/
    
    
    ExpectedPrice
    
    
    Acres
    
    
    ClosingHomebuilding Division
    
    $174.4 million
    
    5,339 Units
    
    
    2005-2006Land Division
    
    33.8 million
    
    3,300 Acres
    
    
    2005-2006Other Operations
    
    3.5 million
    
    90 Units
    
    
    2005-2006
 At March 31, 2005, cash deposits of approximately $3.8 million secured the Companys
commitments under these contracts. At March 31, 2005 the Company had outstanding surety bonds and letters of credit of
approximately $69.4 million related primarily to its obligations to various governmental entities
to construct improvements in the Companys various communities. The Company estimates that
approximately $50.3 million of work remains to complete these improvements. The Company does not
believe that any outstanding bonds or letters of credit will likely be drawn upon. 9. Segment Reporting Operating segments are components of an enterprise about which separate financial information
is available that is regularly reviewed by the chief operating decision maker in deciding how to
allocate resources and in assessing performance. The Company has three reportable business
segments: Homebuilding, Land and Other Operations. The Company evaluates segment performance
primarily based on net income. The information provided for segment reporting is based on
managements internal reports. The accounting policies of the segments are generally the same as
those described in the summary of significant accounting policies in the Companys Annual Report on
Form 10-K for the year ended December 31, 2004. Eliminations consist primarily of the elimination
of sales and profits on real estate transactions between the Land and Homebuilding Divisions, which
were recorded based upon terms that management believes would be attained in an arms-length
transaction. The presentation and allocation of assets, liabilities and results of operations may
not reflect the actual economic costs of the segments as stand-alone businesses. If a different
basis of allocation were utilized, the relative contributions of the segments might differ, but
management believes that the relative trends in segments would likely not be impacted. The Companys Homebuilding segment consists of the operations of Levitt and Sons and Bowden
while the Land segment consists of the operations of Core Communities. The Other Operations
segment consists of the activities of Levitt Commercial, the Companys parent company operations,
earnings from investments in Bluegreen and other real estate investments and joint ventures. 13




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The following tables present unaudited segment information as of and for the three months
ended March 31, 2005 and 2004 (in thousands). Three Months Ended
    
    
    
    
    
    
    
    
    
    OtherMarch 31, 2005
    
    Homebuilding
    
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenuesSales of real estate
    
    $
    117,987
    
    
    
    66,551
    
    
    
    14,709
    
    
    
    (381
    )
    
    
    198,866Title and mortgage operations
    
    
    948
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    948Total revenues
    
    
    118,935
    
    
    
    66,551
    
    
    
    14,709
    
    
    
    (381
    )
    
    
    199,814Costs and expensesCost of sales of real estate
    
    
    93,579
    
    
    
    27,090
    
    
    
    11,326
    
    
    
    (1,406
    )
    
    
    130,589Selling, general and
administrative expenses
    
    
    14,608
    
    
    
    4,446
    
    
    
    4,092
    
    
    
    
    
    
    
    23,146Other expenses
    
    
    639
    
    
    
    677
    
    
    
    
    
    
    
    
    
    
    
    1,316Total costs and expenses
    
    
    108,826
    
    
    
    32,213
    
    
    
    15,418
    
    
    
    (1,406
    )
    
    
    155,051Earnings from Bluegreen Corporation
    
    
    
    
    
    
    
    
    
    
    2,138
    
    
    
    
    
    
    
    2,138Earnings from joint ventures
    
    
    104
    
    
    
    
    
    
    
    (14
    )
    
    
    
    
    
    
    90Interest and other income
    
    
    214
    
    
    
    421
    
    
    
    687
    
    
    
    
    
    
    
    1,322Income before income taxes
    
    
    10,427
    
    
    
    34,759
    
    
    
    2,102
    
    
    
    1,025
    
    
    
    48,313Provision for income taxes
    
    
    3,901
    
    
    
    13,436
    
    
    
    763
    
    
    
    395
    
    
    
    18,495Net income
    
    $
    6,526
    
    
    
    21,323
    
    
    
    1,339
    
    
    
    630
    
    
    
    29,818Inventory of real estate
    
    $
    307,988
    
    
    
    106,645
    
    
    
    4,776
    
    
    
    (17,591
    )
    
    
    401,818Total assets
    
    $
    353,412
    
    
    
    197,144
    
    
    
    150,578
    
    
    
    (17,591
    )
    
    
    683,543Total debt
    
    $
    151,430
    
    
    
    23,464
    
    
    
    56,201
    
    
    
    
    
    
    
    231,095
 Three Months Ended
    
    
    
    
    
    
    
    
    
    OtherMarch 31, 2004
    
    Homebuilding
    
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenuesSales of real estate
    
    $
    78,664
    
    
    
    19,321
    
    
    
    538
    
    
    
    
    
    
    
    98,523Title and mortgage operations
    
    
    970
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    970Total revenues
    
    
    79,634
    
    
    
    19,321
    
    
    
    538
    
    
    
    
    
    
    
    99,493Costs and expensesCost of sales of real estate
    
    
    61,475
    
    
    
    7,968
    
    
    
    727
    
    
    
    505
    )
    
    
    69,665Selling, general and
administrative expenses
    
    
    9,292
    
    
    
    2,588
    
    
    
    2,167
    
    
    
    
    
    
    
    14,047Interest expense, net
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    
    
    
    
    58Other expenses
    
    
    617
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    616Minority interest
    
    
    
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    25Total costs and expenses
    
    
    71,384
    
    
    
    10,614
    
    
    
    2,918
    
    
    
    (505
    )
    
    
    84,411Earnings from Bluegreen Corporation
    
    
    
    
    
    
    
    
    
    
    2,086
    
    
    
    
    
    
    
    2,086Loss from joint ventures
    
    
    1,509
    
    
    
    
    
    
    
    2,098
    
    
    
    
    
    
    
    3,607Interest and other income
    
    
    43
    
    
    
    405
    
    
    
    30
    
    
    
    
    
    
    
    478Income before income taxes
    
    
    9,802
    
    
    
    9,112
    
    
    
    1,834
    
    
    
    505
    
    
    
    21,253Provision for income taxes
    
    
    3,781
    
    
    
    3,515
    
    
    
    707
    
    
    
    195
    
    
    
    8,198Net income
    
    $
    6,021
    
    
    
    5,597
    
    
    
    1,127
    
    
    
    310
    
    
    
    13,055Inventory of real estate
    
    $
    221,189
    
    
    
    43,594
    
    
    
    8,638
    
    
    
    (5,011
    )
    
    
    268,410Total assets
    
    $
    246,338
    
    
    
    89,149
    
    
    
    88,253
    
    
    
    (5,011
    )
    
    
    418,729Total debt
    
    $
    100,248
    
    
    
    15,022
    
    
    
    57,636
    
    
    
    
    
    
    
    172,906
 14




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##### Table of Contents



10. Parent Company Financial Statements The parent company unaudited condensed statements of financial condition at March 31, 2005 and
December 31, 2004, and unaudited condensed statements of income for the three months ended March
31, 2005 and 2004 are shown below (in thousands): Condensed Statements of Financial Condition March 31,
    
    
    December 31,2005
    
    
    2004Total assets
    
    $
    383,621
    
    
    
    370,781Total liabilities
    
    $
    59,379
    
    
    
    75,992Total shareholders equity
    
    
    324,242
    
    
    
    294,789Total liabilities and shareholders equity
    
    $
    383,621
    
    
    
    370,781
 Condensed Statements of Income Three MonthsEnded March 31,2005
    
    
    2004Earnings from Bluegreen Corporation
    
    $
    2,138
    
    
    
    2,086(Loss) earnings from real estate joint ventures
    
    
    (14
    )
    
    
    2,099Other revenues
    
    
    177
    
    
    
    12Costs and expenses
    
    
    3,389
    
    
    
    2,157(Loss) income before income taxes
    
    
    (1,088
    )
    
    
    2,040(Benefit) provision for income taxes
    
    
    (469
    )
    
    
    787Net (loss) income before undistributed earnings fromconsolidated subsidiaries
    
    
    (619
    )
    
    
    1,253Earnings from consolidated subsidiaries, net of income taxes
    
    
    30,437
    
    
    
    11,802Net income
    
    $
    29,818
    
    
    
    13,055
 Cash dividends received from subsidiaries for the three months ended March 31, 2005 and
2004 were $4.7 million and $914,000, respectively. Some subsidiaries borrowings contain covenants
that, among other things, may have the effect of limiting dividends that can be paid to Levitt
Corporation. 11. Earnings per Share Basic earnings per common share is computed by dividing earnings attributable to common
shareholders by the weighted average number of common shares outstanding for the period. Diluted
earnings per common share is computed in the same manner as basic earnings per share, but it also
gives consideration to dilutive stock options using the treasury stock method and the pro rata
impact of Bluegreens dilutive securities (stock options and convertible securities) on the amount
of Bluegreens earnings that the Company recognizes. 15




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##### Table of Contents



The following table presents the computation of basic and diluted earnings per common share
(in thousands, except for per share data): Three Months EndedMarch 31,2005
    
    
    2004Numerator:Basic earnings per common share:Net income  basic
    
    $
    29,818
    
    
    
    13,055Diluted earnings per common share:Net income  basic
    
    $
    29,818
    
    
    
    13,055Pro rata share of the net effect of Bluegreen dilutive securities
    
    
    (39
    )
    
    
    (130
    )Net income  diluted
    
    $
    29,779
    
    
    
    12,925Denominator:Basic average shares outstanding
    
    
    19,816
    
    
    
    14,816Net effect of stock options assumed to be exercised
    
    
    149
    
    
    
    36Diluted average shares outstanding
    
    
    19,965
    
    
    
    14,852Earnings per common share:Basic
    
    $
    1.50
    
    
    
    0.88Diluted
    
    $
    1.49
    
    
    
    0.87
 12. Dividends On January 24, 2005, the Companys Board of Directors declared a cash dividend of $0.02 per
share on its Class A common stock and Class B common stock. The dividend was paid on February 15,
2005 to all shareholders of record on February 8, 2005. On April 25, 2005, the Companys Board of Directors declared a cash dividend of $0.02 per
share on its Class A common stock and Class B common stock. The dividend is payable on May 16,
2005 to all shareholders of record on May 9, 2005. The Company has not adopted a policy of regular dividend payments. The payment of dividends
in the future is subject to approval by the Board of Directors and will depend upon, among other
factors, the Companys results of operations and financial condition. 13. New Accounting Pronouncements In December 2004, FASB issued Statement No. 152 (Accounting for Real Estate Time-Sharing
Transactionsan amendment of FASB Statements No. 66 and 67.) This Statement is effective for
financial statements for fiscal years beginning after June 15, 2005. Bluegreen has indicated in
its periodic reports filed with the SEC that this pronouncement is not expected to have a material
effect on Bluegreens financial statements. Accordingly, management does not believe that this
Statement will have a material effect on the Companys consolidated financial statements. In December 2004, FASB issued Statement No. 123 (revision) (Share-based payments). This
Statement is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation and
supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related
implementation guidance. The Statement eliminated the accounting for share-based transactions
under APB No. 25 and its related interpretations instead requiring that all share based payments be
accounted 16




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##### Table of Contents



for using a fair value method. For public companies the Statement will be effective in the
first fiscal year that begins after June 15, 2005. Management expects to adopt the Statement on
January 1, 2006. 14. Subsequent Events In
April 2005, Core Communities entered into a $40.0 million line of credit with an
unaffiliated financial institution to provide future funding for land acquisition and development
activities. Borrowings under the line of credit bear interest at
either (i) the prime rate less
twenty-five basis points or (ii) LIBOR plus two hundred fifty basis points. Accrued interest is due
and payable monthly in arrears, and all outstanding principal and accrued interest is due and
payable in April 2007. Core Communities may, at its option, extend the line of credit for one
additional year to April 2008. In May 2005, the Company formed a new statutory business trust, Levitt Capital Trust II (the
Trust), for the purpose of issuing trust preferred securities and investing the proceeds thereof
in junior subordinated debentures of the Company (the May Debentures). On May 4, 2005, the Trust
issued $30.0 million of trust preferred securities and used the proceeds therefrom to purchase and
identical amount of May Debentures from the Company. Interest on the
May Debentures and distributions on
the trust preferred securities will be payable quarterly in arrears at a fixed rate of 8.09%
through June 30, 2010 and thereafter at a floating rate of 3.80% over 3-month LIBOR until the
scheduled maturity date of June 30, 2035. Distributions on the trust preferred securities will be
cumulative and based upon the liquidation value of the trust preferred security. The trust
preferred securities will be subject to mandatory redemption, in whole or in part, upon repayment
of the May Debentures at maturity or their earlier redemption. The
May Debentures are redeemable five
years from the issue date or sooner following certain specified events. In addition, the Company
contributed $928,000 to the Trust in exchange for the Trusts common securities, all of which are
owned by the Company, and those proceeds were also used to purchase an identical amount of
May Debentures from the Company. The terms of the Trusts common securities are nearly identical to
the trust preferred securities. The trust preferred securities were issued in a private
transaction. The Company used the proceeds from this transaction to
repay approximately $16.0 million of indebtedness to affiliates
and intends to use the balance for general corporate purposes. 17




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##### Table of Contents



Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The objective of the following discussion is to provide an understanding of the financial
condition and results of operations of Levitt Corporation and its wholly owned subsidiaries
(Levitt, or the Company) as of and for the three months ended March 31, 2005 and 2004. The
Company may also be referred to as we, us, or our. We engage in homebuilding, land
development and other real estate activities through Levitt and Sons, LLC (Levitt and Sons),
Bowden Building Corporation (Bowden), Core Communities, LLC (Core Communities) and other
operations, which include Levitt Commercial, LLC (Levitt Commercial), an investment in Bluegreen
Corporation (Bluegreen) and investments in real estate projects through subsidiaries and joint
ventures. Acquired in December 1999, Levitt and Sons is a developer of single-family home and
townhome communities and condominium and rental apartment complexes. Acquired in April 2004,
Bowden is a builder of single family homes based in Memphis, Tennessee. Core Communities is
currently developing Tradition, its second master-planned community, which is located in St. Lucie
County, Florida. Tradition is planned to ultimately include more than 8,000 total acres, including
approximately five miles of frontage on Interstate 95. Levitt Commercial specializes in the
development of industrial and residential properties. Bluegreen is a New York Stock
Exchange-listed company engaged in the acquisition, development, marketing and sale of ownership
interests in primarily drive-to vacation resorts, and the development and sale of golf
communities and residential land. Except for historical information contained herein, the matters discussed in this report
contain forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934,
as amended (the Exchange Act), that involve substantial risks and uncertainties. Some of the
forward-looking statements can be identified by the use of words such as anticipate, believe,
estimate, may, intend, expect, will, should, seeks or other similar expressions.
Forward-looking statements are based largely on managements expectations and involve inherent
risks and uncertainties including certain risks described in this report. When considering those
forward-looking statements, you should keep in mind the risks, uncertainties and other cautionary
statements made in this report. You should not place undue reliance on any forward-looking
statement, which speaks only as of the date made. In addition to the risks identified below, you
should refer to our periodic and current reports filed with the United States Securities and
Exchange Commission (the SEC) for specific risks which could cause actual results to be
significantly different from those expressed or implied by those forward-looking statements. Some
factors which may affect the accuracy of the forward-looking statements apply generally to the
real estate industry, while other factors apply directly to us. Any number of important factors
which could cause actual results to differ materially from those in the forward-looking statements
include: the impact of economic, competitive and other factors affecting the Company and its
operations, including the impact of hurricanes and tropical storms in the areas in which we
operate; the market for real estate generally and in the areas where the Company has developments,
including the impact of market conditions on the Companys margins; unanticipated delays in
opening planned new communities; the availability and price of land suitable for development;
shortages and increased costs of construction materials and labor; the effects of increases in
interest rates; environmental factors, the impact of governmental regulations and requirements;
the Companys ability to timely deliver homes from backlog and successfully manage growth; and the
Companys success at managing the risks involved in the foregoing. Many of these factors are
beyond our control. The Company cautions that the foregoing factors are not exclusive. 18




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##### Table of Contents



Executive Overview Management evaluates the performance and prospects of the Company and its subsidiaries using a
variety of financial and non-financial measures. The key financial measures utilized to evaluate
historical operating performance include revenues from sales of real estate, cost of sales of real
estate, margin (which we measure as revenues from sales of real estate minus cost of sales of real
estate), margin percentage (which we measure as margin divided by revenues from sales of real
estate), income before taxes and net income. Non-financial measures used to evaluate historical
performance include the number and value of new orders executed, the number of housing starts and
the number of homes delivered. In evaluating the Companys future prospects, management considers
non-financial information such as the number of homes and acres in backlog (which we measure as
homes or land subject to an executed sales contract) and the aggregate value of those contracts.
Additionally, we monitor the number of properties remaining in inventory and under contract to be
purchased relative to our sales and construction trends. The Companys ratio of debt to
shareholders equity and cash requirements are also considered when evaluating the Companys future
prospects, as are general economic factors and interest rate trends. Each of the above measures is
discussed in the following sections as it relates to our operating results, financial position and
liquidity. The list of measures above is not an exhaustive list, and management may from time to
time utilize additional financial and non-financial information or may not use the measures listed
above. Impact of 2004 Hurricanes The majority of our business operations are located in the State of Florida, which is subject
to hurricanes and other tropical weather systems. In the months of August and September 2004,
three hurricanes made landfall in areas where we have significant homebuilding operations (Ft.
Myers, Orlando, Sarasota and Port St. Lucie). These hurricanes caused property damage in several
of our communities in Central Florida, and the Company has expended considerable resources on homes
under construction and previously delivered homes repairing stucco, replacing insulation and dry
wall as well as other materials damaged in the storms. The Company has also expended funds to
mitigate other hurricane-related damage, including replacing landscaping, fences, repairing lake
beds and replacing building materials. Our consolidated statement of income for the three months
ended March 31, 2005 includes insurance proceeds of $1.2 million which were offset by hurricane
related expenses. Impact of Increasing Costs, Interest Rates and Local Government Regulation Our business operations are impacted by competition for labor  direct and subcontracted  raw
materials, supply and delivery issues. Ongoing strength in homebuilding and other construction
activities has resulted in higher prices of most building materials, including lumber, steel,
concrete and asphalt. We compete with other real estate developersregionally, nationally and
globallyfor raw materials and labor. In addition, local materials suppliers periodically limit
the allocation of their product to their customers which slows our production process and forces us
to obtain those materials from other suppliers, typically at higher prices. In particular, supplies
of cement block remain tight in the Florida market and we are currently subject to allocations of
deliveries in some of our Florida developments. Although these allocations have not materially
disrupted our operations to date, continued allocations could adversely impact our future
operations or restrict our ability to expand in certain markets. Without corresponding increases
in the sales prices of our real estate inventories (both land and finished homes), increasing
materials and labor costs associated with land development and home building will negatively affect
our future results of operations. 19




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##### Table of Contents



Critical Accounting Policies and Estimates Critical accounting policies are those that are important to the understanding of
our financial statements and also involve estimates and judgments about inherently uncertain
matters. In preparing our financial statements, management makes estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes. These estimates
require the exercise of judgment, as future events cannot be determined with certainty.
Accordingly, actual results could differ significantly from those estimates. Material estimates
that are particularly susceptible to significant change in subsequent periods relate to the
valuation of (i) real estate, including the estimation of costs required to complete development of
a property, (ii) investments in real estate joint ventures and unconsolidated subsidiaries
(including Bluegreen), and (iii) the fair market value of assets and liabilities in the application
of the purchase method of accounting. The accounting policies that we have identified as critical
to the portrayal of our financial condition and results of operations are: (a) real estate
inventories; (b) investments in real estate joint ventures and other equity investments; (c)
revenue recognition; (d) capitalized interest; and (e) income taxes. For a more detailed
discussion of these critical accounting policies see Critical Accounting Policies appearing in
our Annual Report on Form 10-K for the year ended December 31, 2004. CONSOLIDATED RESULTS OF OPERATIONS Three MonthsEnded March 31,2005
    
    
    2004
    
    
    Change(In thousands)RevenuesSales of real estate
    
    $
    198,866
    
    
    
    98,523
    
    
    
    100,343Title and mortgage operations
    
    
    948
    
    
    
    970
    
    
    
    (22
    )Total revenues
    
    
    199,814
    
    
    
    99,493
    
    
    
    100,321Costs and expensesCost of sales of real estate
    
    
    130,589
    
    
    
    69,665
    
    
    
    60,924Selling, general and administrative expenses
    
    
    23,146
    
    
    
    14,047
    
    
    
    9,099Interest expense, net
    
    
    
    
    
    
    58
    
    
    
    (58
    )Other expenses
    
    
    1,316
    
    
    
    616
    
    
    
    700Minority interest
    
    
    
    
    
    
    25
    
    
    
    (25
    )Total costs and expenses
    
    
    155,051
    
    
    
    84,411
    
    
    
    70,640Earnings from Bluegreen Corporation
    
    
    2,138
    
    
    
    2,086
    
    
    
    52Earnings from joint ventures
    
    
    90
    
    
    
    3,607
    
    
    
    (3,517
    )Interest and other income
    
    
    1,322
    
    
    
    478
    
    
    
    844Income before income taxes
    
    
    48,313
    
    
    
    21,253
    
    
    
    27,060Provision for income taxes
    
    
    18,495
    
    
    
    8,198
    
    
    
    10,297Net income
    
    $
    29,818
    
    
    
    13,055
    
    
    
    16,763
 For the Three Months Ended March 31, 2005 Compared to the Same 2004 Period: Consolidated net income increased $16.8 million, or 128%, for the three months ended March 31,
2005 as compared to the same period in 2004. The increase in net income primarily resulted from the
bulk sale of five non-contiguous parcels of land adjacent to Tradition consisting of a
total of 1,294 acres for $64.7 million. Also contributing to the increase in net income were
increases in sales of real estate by our Homebuilding Division and Other Operations. These
increases were offset, in part, by 20




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##### Table of Contents



lower earnings from joint ventures, lower margins in homebuilding and higher selling, general and
administrative expenses. Our revenues from sales of real estate increased 102% to $198.9 million for the quarter ended
March 31, 2005 from $98.5 million for the same 2004 period. This increase was attributable
primarily to the bulk land sale discussed above, as well as from an increase in home deliveries.
In the quarter ended March 31, 2005, 501 homes were delivered compared to 341 homes delivered in
the first quarter of 2004. Revenues also reflect increased sales of flex warehouse properties as
Levitt Commercial closed out deliveries at two warehouse developments. Profits recognized by the
Land Division from sales to the Homebuilding division are deferred until the Homebuilding Division
delivers homes on those properties to third parties, at which time the deferred profit is applied
against consolidated cost of sales. Previously deferred profits of $1.0 million related to land
sales by our Land Division to our Homebuilding Division were recognized as income during the
quarter ended March 31, 2005, compared to $505,000 for the same 2004 period. Selling, general and administrative expenses increased during the first quarter of 2005
compared to the same 2004 period primarily as a result of higher employee compensation and benefits
including sales commissions and accrued bonus compensation. Bonus compensation, which is tied to
our profitability, increased during the first quarter of 2005 commensurate with higher earnings
during the period. The increase in compensation expense is also associated with increased
headcount in our new development projects in Central and South Florida, the expansion of
homebuilding activities into North Florida and Georgia, and the addition of Bowden (which was
acquired in April 2004), as well as an increase in our home deliveries. The number of our full
time employees increased to 551 at March 31, 2005 from 386 at March 31, 2004, offset in part by a
decrease in the number of part time employees from 38 at March 31, 2004 to 26 at March 31, 2005. As
a percentage of total revenues, selling, general and administrative expenses declined to 12% in the
first quarter of 2005 from 14% in the first quarter of 2004. Interest incurred on notes and development bonds payable totaled $3.5 million for the 2005
period and $2.0 million for the 2004 period. Interest incurred was higher due to higher
outstanding balances of notes and mortgage notes payable, as well as to an increase in the average
interest rate on our variable-rate debt. Most of our variable-rate debt is indexed to the Prime
Rate, which increased from 4.00% at March 31, 2004 to 5.75% at March 31, 2005. Interest capitalized
was $3.5 million for the 2005 period and $1.9 million for the 2004 period. At the time of home
closings and land sales, the capitalized interest allocated to such inventory is charged to cost of
sales. Cost of sales of real estate for the three months ended March 31, 2005 and 2004 included
previously capitalized interest of approximately $2.6 million and $1.8 million, respectively. The increase in other expenses was primarily attributable to a $677,000 penalty on debt
prepayment incurred during the first quarter of 2005 at our Land Division. The penalty arose from
the repayment of indebtedness under a line of credit using the proceeds of the bulk land sale
described above. Bluegreens reported net income for the three months ended March 31, 2005 was $6.5 million, as
compared to $4.7 million for the same period in 2004. Our interest in Bluegreens earnings, net of
purchase accounting adjustments, was $2.1 million in each of those periods. Purchase accounting
adjustments increased our interest in Bluegreens earnings by $110,000 for the first quarter of
2005, whereas purchase accounting and other adjustments increased our interest in Bluegreens
earnings by $294,000 for the first quarter of 2004. For the three months ended March 31, 2005 and
2004, the 9.5 million shares of Bluegreen that we own represented approximately 31% and 37%,
respectively, of the outstanding shares of Bluegreen. Our ownership percentage was diluted in the
2005 period as a result 21




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##### Table of Contents



of Bluegreens issuance
of common stock in 2004 in connection with the conversion by holders of $34.1
million of its 8.25% Convertible Subordinated Debentures and the exercise of stock options. The increase in interest and other income is primarily related to an increase in rental income
and higher balances of interest-earning deposits at various financial institutions, including our
affiliate, BankAtlantic. At March 31, 2005, we had cash and cash equivalents of $134.8 million, as
compared with $45.9 million at March 31, 2004. Earnings from real estate joint ventures in the first quarter of 2004 included earnings
generated by the sale of an apartment complex and deliveries of homes and condominium units
developed by joint ventures. There were no earnings generated by these joint ventures in the first
quarter of 2005, as they were winding down their operations. HOMEBUILDING DIVISION RESULTS OF OPERATIONS Three MonthsEnded March 31,2005
    
    
    2004
    
    
    Change(Dollars in thousands)RevenuesSales of real estate
    
    $
    117,987
    
    
    
    78,664
    
    
    
    39,323Title and mortgage operations
    
    
    948
    
    
    
    970
    
    
    
    (22
    )Total revenues
    
    
    118,935
    
    
    
    79,634
    
    
    
    39,301Costs and expensesCost of sales of real estate
    
    
    93,579
    
    
    
    61,475
    
    
    
    32,104Selling, general and administrative expenses
    
    
    14,608
    
    
    
    9,292
    
    
    
    5,316Other expenses
    
    
    639
    
    
    
    617
    
    
    
    22Total costs and expenses
    
    
    108,826
    
    
    
    71,384
    
    
    
    37,442Earnings from joint ventures
    
    
    104
    
    
    
    1,509
    
    
    
    (1,405
    )Interest and other income
    
    
    214
    
    
    
    43
    
    
    
    171Income before income taxes
    
    
    10,427
    
    
    
    9,802
    
    
    
    625Provision for income taxes
    
    
    3,901
    
    
    
    3,781
    
    
    
    120Net income
    
    $
    6,526
    
    
    
    6,021
    
    
    
    505Homes delivered (units)
    
    
    501
    
    
    
    341
    
    
    
    160Construction starts (units)
    
    
    347
    
    
    
    701
    
    
    
    (354
    )Average selling price of homes delivered
    
    $
    236
    
    
    
    231
    
    
    
    5Margin percentage on homes delivered
    
    
    20.7
    %
    
    
    21.9
    %
    
    
    -1.2
    %New orders (units)
    
    
    605
    
    
    
    474
    
    
    
    131New orders (value)
    
    $
    165,281
    
    
    
    130,124
    
    
    
    35,157Backlog of homes (units)
    
    
    1,918
    
    
    
    2,186
    
    
    
    (268
    )Backlog of homes (value)
    
    $
    496,006
    
    
    
    510,231
    
    
    
    (14,225
    )
 For the Three Months Ended March 31, 2005 Compared to the Same 2004 Period: The value of new orders increased to $165.3 million for the three months ended March 31, 2005,
from $130.1 million in the three months ended March 31,
2004. This increase was primarily a result of the
addition of Bowden, which was acquired in April 2004, and growth at Levitt and Sons, which had 22




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##### Table of Contents



slightly lower unit orders but higher average selling prices. The average sales price of the
homes in backlog at March 31, 2005 is approximately 11% higher than the average sales price of the
homes in backlog at March 31, 2004. We are actively managing the release of new inventory and
acceptance of new home orders in Florida to help assure high levels of customer satisfaction by
meeting delivery schedules acceptable to our customers. This impacted Florida homebuilding
operations in the first quarter of 2005 as new orders were slightly lower compared to the first
quarter of 2004, but reflect an improvement over the previous two quarters as our inventory
availability has improved. Construction starts in our Florida operations are also being actively
managed to reduce build cycles to optimal levels. We will continue to moderate the release of new
inventory in an attempt to maintain pricing flexibility and to protect against rising costs. We believe that our
inventory of homes available for sale, new orders and construction starts should improve over time
as we successfully implement our inventory management strategy. Revenues from home sales increased 50% to $118.0 million during the three months ended March
31, 2005, as compared to the same 2004 period. Approximately half of the increase related to the
inclusion of home deliveries by Bowden. During the three months ended March 31, 2005, 501 homes
were delivered as compared to 341 homes delivered during the three months ended March 31, 2004. The
modest increase in the average selling price of our homes was due primarily to a change in our
product mix resulting from the inclusion of Bowden in 2005. The average selling price of homes in
our Florida operations in the first quarter of 2005 increased by $20,000 over the first quarter of
2004 to $251,000, while the average selling price of Bowdens homes in the 2005 period was
$184,000. Margin percentage (which we define as sales of real estate minus cost of sales of real estate,
divided by sales of real estate) declined in the first quarter of 2005 compared with the first
quarter of 2004. The decline was primarily attributable to a change in mix of community types and
markets served by the homebuilding division. Margins in the active adult communities have
historically been higher than those in primary communities, and margins in the Florida markets
served by Levitt and Sons have historically been higher than those in the Tennessee market served
by Bowden, which historically served only the primary market. We anticipate continued pressure on
margins in 2005 due to rising costs in Florida and the greater proportion of home deliveries in
primary communities as compared to 2004. Cost of sales increased 52% to $93.6 million during the three months ended March 31, 2005, as
compared to the same 2004 period. The increase in cost of sales was primarily due to the increase
in home deliveries, but was also impacted by increased construction
costs. The costs of labor and building materials continue to rise. While we may be
able to increase our selling prices in future sales to absorb these increased costs, the sales
prices of homes in our backlog cannot be increased and the margins on the delivery of homes in
backlog may be adversely affected by this trend. Included in cost of sales for the three months
ended March 31, 2005 are approximately $21,000 of purchase accounting adjustments relating to the
Bowden acquisition. Selling, general and administrative expenses increased 57% to $14.6 million during the three
months ended March 31, 2005, as compared to the same 2004 period. The growth in selling, general
and administrative expenses primarily resulted from higher compensation expense from increased
headcount, higher sales commissions associated with more home deliveries and a higher average commission
cost, and the addition of Bowden. As a percentage of total revenues, selling, general and
administrative expense was approximately 12% in both the 2005 and 2004 periods. As we expand our
homebuilding activities to the Jacksonville, Florida, Atlanta, Georgia and Nashville, Tennessee
markets, we expect to continue to incur administrative start-up costs well in advance of revenue
recognition, which will adversely affect our operating results. We are also in the process of
realigning our homebuilding operations as a single operating division by incorporating Bowdens
operations into Levitt and Sons. We believe that this new structure, combined with additional
investments in 23




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technological and human resources, will enable us to realize further operational synergies and
strengthen our infrastructure for future growth. Interest incurred totaled $2.1 million and $1.2 million for the three months ended March 31,
2005 and 2004, respectively. The increase in the amount of interest incurred in the period related
primarily to the assumption of debt related to the acquisition of Bowden and increases in interest
rates indexed to the Prime Rate. Interest capitalized for the quarters ended March 31, 2005 and
2004 totaled $2.1 million and $1.2 million, respectively. Cost of sales of real estate for the
three months ended March 31, 2005 and 2004 included previously capitalized interest of
approximately $1.7 million and $1.4 million, respectively. Earnings from real estate joint ventures in the first quarter of 2004 included income from the
delivery of 88 residential condominium units by a joint venture that developed a condominium
complex in Boca Raton, Florida. There were no residential units delivered or remaining to be
delivered from that joint venture property at March 31, 2005. LAND DIVISION RESULTS OF OPERATIONS Three MonthsEnded March 31,2005
    
    
    2004
    
    
    Change(Dollars in thousands)RevenuesSales of real estate
    
    $
    66,551
    
    
    
    19,321
    
    
    
    47,230Total revenues
    
    
    66,551
    
    
    
    19,321
    
    
    
    47,230Costs and expensesCost of sales of real estate
    
    
    27,090
    
    
    
    7,968
    
    
    
    19,122Selling, general and administrative expenses
    
    
    4,446
    
    
    
    2,588
    
    
    
    1,858Interest expense, net
    
    
    
    
    
    
    58
    
    
    
    (58
    )Other expense
    
    
    677
    
    
    
    
    
    
    
    677Total costs and expenses
    
    
    32,213
    
    
    
    10,614
    
    
    
    21,599Interest and other income
    
    
    421
    
    
    
    405
    
    
    
    16Income before income taxes
    
    
    34,759
    
    
    
    9,112
    
    
    
    25,647Provision for income taxes
    
    
    13,436
    
    
    
    3,515
    
    
    
    9,921Net income
    
    $
    21,323
    
    
    
    5,597
    
    
    
    15,726Acres sold
    
    
    1,304
    
    
    
    294
    
    
    
    1,010Margin percentage
    
    
    59.3
    %
    
    
    58.8
    %
    
    
    0.5
    %Unsold acres
    
    
    7,045
    
    
    
    4,822
    
    
    
    2,223Acres subject to firm sales contracts
    
    
    543
    
    
    
    1,268
    
    
    
    (725
    )Acres subject to firm sales contracts (value)
    
    $
    59,624
    
    
    
    97,482
    
    
    
    (37,858
    )
 Land Division revenues have historically been generated primarily from two master-planned
communities located in St. Lucie County, Florida  St. Lucie West and Tradition. Development
activity in St. Lucie West is winding down, with 29 acres of inventory remaining at March 31, 2005,
of which 24 acres were subject to firm sales contracts as of that date. With the acquisition of
approximately 3,150 acres during the second quarter of 2004, the Tradition master-planned community
now encompasses more than 8,200 total acres, including approximately 5,900 net saleable acres.
Approximately 1,750 acres had been sold or were subject to firm sales contracts with various
homebuilders as of March 31, 2005. Notwithstanding the current sustained interest and activity at 24




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Tradition, a significant reduction of future demand in the residential real estate market
could negatively impact our land development operations. We calculate margin as sales of real estate minus cost of sales of real estate, and margin
percentage as the ratio of margin to sales of real estate. We have historically realized between
40% and 60% margin percentage on Land Division sales. Margins fluctuate based upon changing sales
prices and costs attributable to the land sold. The sales price of land sold varies depending
upon: the location; the parcel size; whether the parcel is sold as raw land, partially developed
land or individually developed lots; the degree to which the land is entitled; and whether the
ultimate use of land is residential or commercial. The cost of sales of real estate is dependent
upon the original cost of the land acquired, the timing of the acquisition of the land, and the
amount of development and carrying costs capitalized to the particular land parcel. Future
margins will continue to vary in response to these and other market factors. For the Three Months Ended March 31, 2005 Compared to the Same 2004 Period: Revenues increased 244% to $66.6 million during the three months ended March 31, 2005, as
compared to $19.3 million during the same 2004 period. The margin percentage on land sales in both
the 2005 and 2004 periods was approximately 59%. In January 2005, we consummated the bulk sale of
five non-continuous parcels of land adjacent to Tradition consisting of a total of 1,294 acres for
$64.7 million, or $50,000 per acre. These parcels, which were acquired in May 2004 for $20,000 per
acre, were sold after we determined that their specific locations and the timeline for obtaining
land use approvals were not compatible with the master strategic plan for Tradition. The funds
generated by the sale were used to reduce indebtedness and to provide additional liquidity for the
Land Division operations and investments. Selling, general and administrative expenses increased 72% to $4.4 million during the three
months ended March 31, 2005 as compared to $2.6 million for the same 2004 period, primarily as a
result of higher incentive compensation associated with the increase in profitability. As a
percentage of total revenues, selling, general and administrative expenses declined to 7% in the
first quarter of 2005 from 13% in the first quarter of 2004. Interest incurred for the three months ended March 31, 2005 and 2004 was $456,000 and
$164,000, respectively. Interest capitalized for the quarters ended March 31, 2005 and 2004
totaled $456,000 and $106,000, respectively. Cost of sales of real estate for the three months
ended March 31, 2005 included previously capitalized interest of approximately $65,000, as compared
to $16,000 for the three months ended March 31, 2004. The increase in other expenses was attributable to a $677,000 penalty on debt prepayment
incurred during the 2005 period arising from the repayment of indebtedness under a line of credit
using the proceeds of the bulk land sale described above. 25




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##### Table of Contents



OTHER OPERATIONS RESULTS OF OPERATIONS Three MonthsEnded March 31,2005
    
    
    2004
    
    
    Change(In thousands)RevenuesSales of real estate
    
    $
    14,709
    
    
    
    538
    
    
    
    14,171Total revenues
    
    
    14,709
    
    
    
    538
    
    
    
    14,171Costs and expensesCost of sales of real estate
    
    
    11,326
    
    
    
    727
    
    
    
    10,599Selling, general and administrative expenses
    
    
    4,092
    
    
    
    2,167
    
    
    
    1,925Other expenses
    
    
    
    
    
    
    (1
    )
    
    
    1Minority interest
    
    
    
    
    
    
    25
    
    
    
    (25
    )Total costs and expenses
    
    
    15,418
    
    
    
    2,918
    
    
    
    12,500Earnings from Bluegreen Corporation
    
    
    2,138
    
    
    
    2,086
    
    
    
    52(Loss) earnings from real estate joint ventures
    
    
    (14
    )
    
    
    2,098
    
    
    
    (2,112
    )Interest and other income
    
    
    687
    
    
    
    30
    
    
    
    657Income before income taxes
    
    
    2,102
    
    
    
    1,834
    
    
    
    268Provision for income taxes
    
    
    763
    
    
    
    707
    
    
    
    56Net income
    
    $
    1,339
    
    
    
    1,127
    
    
    
    212
 Other Operations include all other Company operations, including Levitt Commercial,
Levitt Corporation general and administrative expenses, earnings from our investment in Bluegreen
and earnings from investments in various real estate projects and trusts. We currently own
approximately 9.5 million shares of the common stock of Bluegreen, which represented approximately
31% of Bluegreens outstanding shares as of March 31, 2005. Under equity method accounting, we
recognize our pro-rata share of Bluegreens net income or loss (net of purchase accounting
adjustments) as pre-tax earnings. Bluegreen has not paid dividends to its shareholders; therefore,
our earnings represent only our claim to the future distributions of Bluegreens earnings.
Accordingly, we record a tax liability on our portion of Bluegreens net income. Should Bluegreens
financial performance deteriorate, our earnings in Bluegreen would decrease concurrently and our
results of operations would be adversely affected. Furthermore, a significant reduction in
Bluegreens financial position could result in an impairment charge against our future results of
operations. For the Three Months Ended March 31, 2005 Compared to the Same 2004 Period: During the three months ended March 31, 2005, Levitt Commercial delivered the 44 remaining
flex warehouse units at two of its development projects, generating revenues of $14.7 million.
Levitt Commercial delivered one flex warehouse unit during the three months ended March 31, 2004.
Deliveries of individual flex warehouse units by Levitt Commercial generally occur in rapid
succession upon the completion of a warehouse building. Accordingly, revenues from Levitt
Commercials development in any one quarter are not expected to be representative of the following
quarters or the full year. Levitt Commercial has two flex warehouse projects currently in
development that are expected to be completed at the end of 2005 or the first half of 2006, at
which time additional revenues are expected to be generated. Cost of sales of real estate in Other Operations includes the expensing of interest previously
capitalized in this business segment, which totaled $837,000 and $329,000 for the three months
ended March 31, 2005 and 2004, respectively. Bluegreens reported net income for the three months
ended 26




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##### Table of Contents



March 31, 2005 was $6.5 million as compared to $4.7 million for the same period of 2004. Our
ownership interest in Bluegreens earnings during the three month periods ended March 31, 2005 and
2004 was approximately $2.1 million in each period, net of purchase accounting adjustments.
Purchase accounting adjustments increased our interest in Bluegreens earnings by $110,000 for the
first quarter of 2005, whereas purchase accounting and other adjustments increased our interest in
Bluegreens earnings by $294,000 for the first quarter of 2004. Selling, general and administrative and other expenses increased to $4.1 million during the
three months ended March 31, 2005 as compared to $2.2 million during the three months ended March
31, 2004. This increase was primarily associated with increases in employee compensation and
benefits (including commissions on flex warehouse deliveries), fees paid by the Company for
administrative and other services provided pursuant to an agreement with BankAtlantic Bancorp, and
audit and other expenses related to complying with the requirements of the Sarbanes-Oxley Act of
2002 for the year ended December 31, 2004, which were incurred
in connection with the 2004 audit in the first
quarter of 2005. Our real estate joint ventures incurred losses of $14,000 in the first quarter of 2005 as
compared to earnings of $2.1 million in the first quarter of 2004. The earnings in the first
quarter of 2004 were primarily related to the gain recognized by a joint venture on the sale of a
rental apartment property in Vero Beach, Florida. As of March 31, 2005, the joint ventures in
which this operating segment participates had essentially completed their operations and were
winding down. Interest incurred in Other Operations was approximately $891,000 and $637,000 for the three
months ended March 31, 2005 and 2004, respectively. The increase in interest incurred was primarily
associated with an increase in mortgage notes payable associated with Levitt Commercials
development activities. Interest capitalized for this business segment totaled $891,000 and
$637,000 for the three months ended March 31, 2005 and 2004, respectively. Those amounts include
adjustments to reconcile the amount of interest eligible for capitalization on a consolidated basis
with the amounts capitalized in the Companys other business segments. The increase in interest and other income was primarily attributable to the income generated
by the rental of an office building in Fort Lauderdale, Florida which was acquired in October 2004,
as well as an increase in interest income related to higher balances of interest-bearing deposits. FINANCIAL CONDITION March 31, 2005 compared to December 31, 2004 Our total assets at March 31, 2005 and December 31, 2004 were $683.5 million and $678.5
million, respectively. The increase in total assets primarily resulted from:  
    a net increase in cash and cash equivalents of $9.3 million, which resulted
primarily from the bulk sale of 1,294 acres of land adjacent to Tradition million and
$21.8 million of net proceeds from the issuance of the trust preferred securities
described below, offset in part by cash used in operations and the reduction of the
outstanding balances of certain indebtedness;
    a net decrease in inventory of real estate of approximately $11.7 million resulting
from the bulk land sale discussed above, as well as sales of homes and other land.
These decreases were offset in part by land acquisitions by our Homebuilding Division
and increases in land development and construction costs; 27




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##### Table of Contents




    an increase of approximately $2.2 million in our investment in Bluegreen Corporation
associated primarily with our equity in earnings and unrealized gains associated with
Bluegreens other comprehensive income;
    an increase of $3.7 million in property and equipment primarily related to the
construction of an irrigation facility in Tradition; and
    an increase of $2.2 million in other assets resulting primarily from a $1.2 million
increase in insurance recovery receivables, which have subsequently been collected, as
well as a $926,000 increase in deferred loan costs. Total liabilities at March 31, 2005 and December 31, 2004 were $359.3 million and $383.7
million, respectively. The decrease in total liabilities primarily resulted from:  
    a net decrease in notes and mortgage notes payable of $37.1 million, primarily
related to the reduction of borrowings by our Land Division with the proceeds of the
bulk land sale discussed above;
    a decrease in notes payable to affiliates of $23.0 million, offset by the issuance
of $23.2 of junior subordinated debentures as described below; and
    an increase in the current tax liability of approximately $14.5 million relating
primarily to the increase in our taxable income and the timing of quarterly estimated
tax payments. LIQUIDITY AND CAPITAL RESOURCES Management assesses the Companys liquidity in terms of its ability to generate cash to fund
its operating and investment activities. For the three months ended March 31, 2005, our primary
sources of funds were the proceeds from the sale of real estate inventory, the issuance of trust
preferred securities described below and borrowings from financial institutions. These funds were
utilized primarily for the acquisition, development and construction of our real estate, to service
and repay borrowings and to pay operating expenses. We formed a statutory business trust (the Trust) for the purpose of issuing trust preferred
securities and investing the proceeds thereof in junior subordinated debentures of the Company (the
Debentures). On March 15, 2005, the Trust issued $22.5 million of trust preferred securities.
The Trust used the proceeds from issuing trust preferred securities to purchase an identical amount
of Debentures from the Company. Interest on the Debentures and distributions on the trust
preferred securities are payable quarterly in arrears at a fixed rate of 8.11% through March 30,
2010 and thereafter at a floating rate of 3.85% over 3-month London Interbank Offered Rate
(LIBOR) until the scheduled maturity date of March 30, 2035. Distributions on the trust
preferred securities will be cumulative and based upon the liquidation value of the trust preferred
security. The trust preferred securities will be subject to mandatory redemption, in whole or in
part, upon repayment of the Debentures at maturity or their earlier redemption. The Debentures are
redeemable five years from the issue date or sooner following certain specified events. In
addition, we contributed $696,000 to the Trust in exchange for the Trusts common securities, all
of which are owned by us, and those proceeds were also used to purchase an identical amount of
Debentures from the Company. The terms of the Trusts common securities are nearly identical to
the trust preferred securities. The issuance of trust preferred securities was part of a larger
pooled trust securities offering which was not registered under the Securities Act of 1933. We
used the proceeds to repay approximately $22.0 million of indebtedness to affiliates. 28




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We formed a second statutory business trust (the Second Trust), which on May 4, 2005 issued
$30.0 million of trust preferred securities in a private offering. The structure of this trust
preferred securities transaction was substantially the same as the transaction described in the
preceding paragraph. Interest on the junior subordinated debentures issued by the Company in
connection with this transaction and distributions on the trust preferred securities will be
payable quarterly in arrears at a fixed rate of 8.09% through June 30, 2010 and thereafter at a
floating rate of 3.80% over 3-month LIBOR until the scheduled maturity date of June 30, 2035. We
contributed $928,000 to the Second Trust in exchange for the Second Trusts common securities,
which amount was likewise used by the Second Trust to purchase an identical amount of junior
subordinated debentures from the Company. We intend to use the proceeds for general corporate
purposes, including to repay approximately $16.0 of indebtedness to affiliates. We also expect to
create similar trusts and participate in other pooled trust preferred securities transactions in
the future as a source of additional financing for the Company. In
April 2005, Core Communities entered into a $40.0 million line of credit with an
unaffiliated financial institution to provide future funding for land acquisition and development
activities. Borrowings under the line of credit bear interest at
either (i) the prime rate less
twenty-five basis points or (ii) LIBOR plus two hundred fifty basis points. Accrued interest is due
and payable monthly in arrears, and all outstanding principal and accrued interest is due and
payable in April 2007. We may, at our option, extend the line of credit for one additional year to
April 2008. In addition to the liquidity provided by the trust preferred securities, we expect to continue
to fund our short-term liquidity requirements through net cash provided by operating and financing
activities and our cash on hand. We expect to meet our long-term liquidity requirements for items
such as acquisitions and debt service and repayment obligations primarily with net cash provided by
operations and long-term secured and unsecured indebtedness. As of March 31, 2005 and December 31,
2004, we had cash and cash equivalents of $134.8 million and $125.5 million, respectively. At March 31, 2005, our consolidated debt was approximately $231.1 million. Our principal
payment obligations with respect to our debt for the 12 months beginning March 31, 2005 are
anticipated to total approximately $41.7 million. Some of our borrowing agreements contain
provisions that, among other things, require us to maintain certain financial ratios and a minimum
net worth. These requirements may limit the amount of debt that we can incur in the future and
restrict the payment of dividends to us by our subsidiaries. At March 31, 2005, we were in
compliance with all loan agreement financial requirements and covenants. On January 24, 2005 our Board of Directors declared a cash dividend of $0.02 per share on our
Class A common stock and Class B common stock which was paid on February 15, 2005 to all
shareholders of record on February 8, 2005. On April 25, 2005 the Board of Directors declared a
cash dividend of $0.02 per share on our Class A and Class B common stock. The Board set the
payment date for May 16, 2005, to all shareholders of record on May 9, 2005. The Board has not
adopted a policy of regular dividend payments. The payment of dividends in the future is subject
to approval by our Board of Directors and will depend upon, among other factors, our results of
operation and financial condition. Off Balance Sheet Arrangements and Contractual Obligations In connection with the development of certain of our communities, we establish community
development districts to access bond financing for the funding of infrastructure development and
other projects within the community. If we were not able to establish community development
districts, we would need to fund community infrastructure development out of operating income or
through other sources of financing or capital. The bonds issued are obligations of the community
development 29




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##### Table of Contents



district and are repaid through assessments on property within the district. To the extent
that we own property within a district when assessments are levied, we will be obligated to pay
such assessments when they are due. As of March 31, 2005, development districts in Tradition had
$62.8 million of community development district bonds outstanding for which no assessments had been
levied. As of March 31, 2005, we owned approximately 66% of the property in the districts. We have entered into an indemnity agreement with a joint venture partner relating to that
partners guarantee of the joint ventures indebtedness. Our maximum exposure under the indemnity
agreement is estimated to be approximately $500,000. Based on the joint venture assets securing
the indebtedness, we do not believe it is reasonably likely that any payment will be required under
the indemnity agreement. The following table summarizes our contractual obligations as of March 31, 2005 (in
thousands): Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations
    
    $
    231,095
    
    
    
    41,680
    
    
    
    60,613
    
    
    
    77,774
    
    
    
    51,028Operating lease obligations
    
    
    3,419
    
    
    
    711
    
    
    
    1,208
    
    
    
    1,484
    
    
    
    16Purchase obligations
    
    
    174,360
    
    
    
    166,844
    
    
    
    7,516
    
    
    
    
    
    
    
    Total Obligations
    
    $
    408,874
    
    
    
    209,235
    
    
    
    69,337
    
    
    
    79,258
    
    
    
    51,044
 Long-term debt obligations consist of notes, mortgage notes and bonds payable. Operating
lease obligations consist of rent commitments. Purchase obligations consist of contracts to acquire
real estate properties for development and sale for which due diligence has been completed and our
deposit is committed; however our liability for not completing the purchase of any such property is
generally limited to the deposit we made under the relevant contract. 
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Market risk is defined as the risk of loss arising from adverse changes in market valuations
that arise from interest rate risk, foreign currency exchange rate risk, commodity price risk and
equity price risk. We have a risk of loss associated with our borrowings as we are subject to
interest rate risk on our long-term debt. At March 31, 2005, we had $189.8 million in borrowings
with adjustable rates tied to the prime rate and/or LIBOR rates and $41.3 million in borrowings
with fixed or initially-fixed rates. Consequently, the impact on our variable rate debt from
changes in interest rates may affect our earnings and cash flows but would generally not impact the
fair value of such debt. With respect to fixed rate debt, changes in interest rates generally
affect the fair market value of the debt but not our earnings or cash flow. Assuming the variable rate debt balance of $189.8 million outstanding at March 31, 2005 (which
does not include the Debentures, which are initially fixed-rate obligations) were to remain
constant, each one percentage point increase in interest rates would increase the interest incurred
by us by approximately $1.9 million per year. 30




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NEW ACCOUNTING PRONOUNCEMENTS In December 2004, FASB issued Statement No. 152 (Accounting for Real Estate Time-Sharing
Transactionsan amendment of FASB Statements No. 66 and 67.) This Statement is effective for
financial statements for fiscal years beginning after June 15, 2005. Bluegreen has indicated in
its periodic reports filed with the SEC that this pronouncement is not expected to have a material
effect on Bluegreens financial statements. Accordingly, we do not believe that this Statement
will have a material effect on the Companys consolidated financial statements. In December 2004, FASB issued Statement No. 123 (revision) (Share-based payments.) This
Statement is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation and
supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and its related
implementation guidance. The Statement eliminated the accounting for share-based transactions
under APB No. 25 and its related interpretations instead requiring all share based payment be
accounted for using a fair value method. For public companies the Statement will be effective in
the first fiscal year that begins after June 15, 2005. We expect to adopt the Statement on January
1, 2006. 
 Item 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this report, we carried out an evaluation of the
effectiveness of the design and operation of our disclosure controls and procedures under the
supervision and with the participation of our principal executive officer and principal financial
officer. Based on the results of this evaluation, our principal executive officer and principal
financial officer concluded that our disclosure controls and procedures are effective in timely
alerting them to material information required to be included in our periodic SEC reports. Changes in Internal Control over Financial Reporting In addition, we reviewed our internal control over financial reporting, and there has been no
change in our internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting. 31




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PART II  OTHER INFORMATION 
 Item 6. Exhibits Index to Exhibits Exhibit 10.1
    
    Junior Subordinated Indenture between Levitt Corporation and JPMorgan
Chase Bank, National Association dated as of March 15, 2005Exhibit 10.2
    
    Amended and Restated Trust Agreement among Levitt Corporation, JPMorgan
Chase Bank, National Association, Chase Bank USA, National Association,
and the Administrative Trustees named therein, dated as of March 15,
2005 establishing Levitt Capital Trust IExhibit 10.3
    
    Revolving loan agreement, revolving promissory note and mortgage,
assignment of rents and security agreement among Core Communities, LLC
and subsidiaries and Wachovia Bank, National Association dated April 8,
2005Exhibit 10.4
    
    Unlimited guaranty among Core Communities, LLC and subsidiaries and
Wachovia Bank, National Association dated April 8, 2005Exhibit 10.5
    
    Amended and Restated Trust Agreement among Levitt Corporation,
Wilmington Trust Company and the Administrative Trustees named therein,
dated as of May 4, 2005 establishing Levitt Capital Trust IIExhibit 10.6
    
    Junior Subordinated Indenture between Levitt Corporation and Wilmington
Trust Company dated as of May 4, 2005Exhibit 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 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.
 32




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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized. LEVITT CORPORATIONDate: May 9, 2005
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive Officer Date: May 9, 2005
    By:
    /s/  George P. ScanlonGeorge P. Scanlon, Executive Vice President,Chief Financial Officer 33