##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-31931
 LEVITT CORPORATION
  Florida
    
    11-3675068(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)2100 W. Cypress Creek Road,Fort Lauderdale, FL
    
    33309(Address of principal executive offices)
    
    (Zip Code)
 (954) 958-1800
  
  þ o
  Large accelerated filer
o
    
    Accelerated filer
þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  Class
    
    Outstanding at May 5, 2008Class A common stock, $0.01 par value
    
    95,040,731Class B common stock, $0.01 par value
    
    1,219,031




---



##### 



PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Statements of Financial Condition as of March 31, 2008 and
December 31, 2007  Unaudited
    
    
    1Consolidated Statements of Operations for the three months ended
March 31, 2008 and 2007  Unaudited
    
    
    2Consolidated Statements of Comprehensive (Loss) Income for the three
months ended March 31, 2008 and 2007  Unaudited
    
    
    3Consolidated Statement of Shareholders Equity for the three months ended
March 31, 2008  Unaudited
    
    
    4Consolidated Statements of Cash Flows for the three months ended March
31, 2008 and 2007  Unaudited
    
    
    5Notes to Unaudited Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    28Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    45Item 4. Controls and Procedures
    
    
    46PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    47Item 1A. Risk Factors
    
    
    47Item 5. Other Information
    
    
    47Item 6. Exhibits
    
    
    47SIGNATURES
    
    
    48EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of Acting CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of Acting CFO




---



##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 Levitt Corporation
 
 Consolidated Statements of Financial Condition  Unaudited
(In thousands, except share data)
 March 31,
    
    
    December 31,2008
    
    
    2007AssetsCash and cash equivalents
    
    $
    131,183
    
    
    
    195,181Restricted cash
    
    
    1,869
    
    
    
    2,207Current income tax receivable
    
    
    27,407
    
    
    
    27,407Inventory of real estate
    
    
    234,223
    
    
    
    227,290Assets held for sale
    
    
    95,775
    
    
    
    96,214Investments:Bluegreen Corporation
    
    
    116,340
    
    
    
    116,014Other equity securities
    
    
    33,152
    
    
    
    Other
    
    
    2,565
    
    
    
    2,565Property and equipment, net
    
    
    33,826
    
    
    
    33,566Other assets
    
    
    12,354
    
    
    
    12,407Total assets
    
    $
    688,694
    
    
    
    712,851Liabilities and Shareholders EquityAccounts payable, accrued liabilities and other
    
    $
    40,249
    
    
    
    41,618Liabilities related to assets held for sale
    
    
    81,792
    
    
    
    80,093Notes and mortgage notes payable
    
    
    177,067
    
    
    
    189,768Junior subordinated debentures
    
    
    85,052
    
    
    
    85,052Loss in excess of investment in subsidiary
    
    
    55,214
    
    
    
    55,214Total liabilities
    
    
    439,374
    
    
    
    451,745Shareholders equity:Preferred stock, $0.01 par value
Authorized: 5,000,000 shares
Issued and outstanding: no shares
    
    
    
    
    
    
    Class A Common Stock, $0.01 par value
Authorized: 150,000,000 shares
Issued and outstanding: 95,040,731 shares
    
    
    950
    
    
    
    950Class B Common Stock, $0.01 par value
Authorized: 10,000,000 shares
Issued and outstanding: 1,219,031 shares
    
    
    12
    
    
    
    12Additional paid-in capital
    
    
    336,693
    
    
    
    336,795Accumulated deficit
    
    
    (88,968
    )
    
    
    (78,537
    )Accumulated other comprehensive income
    
    
    633
    
    
    
    1,886Total shareholders equity
    
    
    249,320
    
    
    
    261,106Total liabilities and shareholders equity
    
    $
    688,694
    
    
    
    712,851
  1




---



##### Table of Contents



Levitt Corporation
 
 Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 Three Months EndedMarch 31,2008
    
    
    2007Revenues:Sales of real estate
    
    $
    154
    
    
    
    141,298Other revenues
    
    
    746
    
    
    
    1,912Total revenues
    
    
    900
    
    
    
    143,210Costs and expenses:Cost of sales of real estate
    
    
    28
    
    
    
    112,908Selling, general and administrative expenses
    
    
    12,075
    
    
    
    32,314Interest expense
    
    
    2,719
    
    
    
    Other expenses
    
    
    
    
    
    
    482Total costs and expenses
    
    
    14,822
    
    
    
    145,704Earnings from Bluegreen Corporation
    
    
    526
    
    
    
    1,744Interest and other income
    
    
    1,599
    
    
    
    2,340(Loss) income from continuing operations
before income taxes
    
    
    (11,797
    )
    
    
    1,590Provision for income taxes
    
    
    
    
    
    
    (611
    )(Loss) income from continuing operations
    
    
    (11,797
    )
    
    
    979Discontinued operations:Income (loss) from discontinued operations
    
    
    1,366
    
    
    
    (3
    )Net (loss) income
    
    $
    (10,431
    )
    
    
    976Basic (loss) earnings per common share:Continuing operations
    
    $
    (0.12
    )
    
    
    0.05Discontinued operations
    
    
    0.01
    
    
    
    Total basic (loss) earnings per common share
    
    $
    (0.11
    )
    
    
    0.05Diluted (loss) earnings per common share:Continuing operations
    
    $
    (0.12
    )
    
    
    0.05Discontinued operations
    
    
    0.01
    
    
    
    Total diluted (loss) earnings per common share
    
    $
    (0.11
    )
    
    
    0.05Weighted average common shares outstanding:Basic
    
    
    96,257
    
    
    
    20,217Diluted
    
    
    96,257
    
    
    
    20,228Dividends declared per common share:Class A common stock
    
    $
    
    
    
    
    0.02Class B common stock
    
    $
    
    
    
    
    0.02
  2




---



##### Table of Contents



Levitt Corporation
 
 Consolidated Statements of Comprehensive (Loss) Income  Unaudited
(In thousands)
 Three Months EndedMarch 31,2008
    
    
    2007Net (loss) income
    
    $
    (10,431
    )
    
    
    976Other comprehensive loss:Pro-rata share of unrealized loss
recognized by Bluegreen Corporation on
retained
interests in notes receivable sold
    
    
    (427
    )
    
    
    (64
    )Unrealized loss on other equity securities
    
    
    (826
    )
    
    
    Benefit for income taxes
    
    
    
    
    
    
    25Total unrealized loss, net of taxes
    
    
    (1,253
    )
    
    
    (39
    )Total comprehensive (loss) income
    
    $
    (11,684
    )
    
    
    937
  3




---



##### Table of Contents



Levitt Corporation
 
 Consolidated Statement of Shareholders Equity  Unaudited
Three Months Ended March 31, 2008
(In thousands)
 AccumulatedCompre-Class A
    
    
    Class B
    
    
    Additional
    
    
    
    
    
    
    hensiveClass A
    
    
    Class B
    
    
    Common
    
    
    Common
    
    
    Paid-In
    
    
    Accumulated
    
    
    IncomeShares
    
    
    Shares
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    (Loss)
    
    
    TotalBalance at December 31, 2007
    
    
    95,041
    
    
    
    1,219
    
    
    $
    950
    
    
    
    12
    
    
    
    336,795
    
    
    
    (78,537
    )
    
    
    1,886
    
    
    
    261,106Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,431
    )
    
    
    
    
    
    
    (10,431
    )Pro-rata share of unrealized loss
recognized by Bluegreen on
sale of retained interests, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (427
    )
    
    
    (427
    )Issuance of Bluegreen common
stock, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    227
    
    
    
    
    
    
    
    
    
    
    
    227Unrealized loss on other equity
securities, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (826
    )
    
    
    (826
    )Share based compensation
related to stock options and
restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (329
    )
    
    
    
    
    
    
    
    
    
    
    (329
    )Balance at March 31, 2008
    
    
    95,041
    
    
    
    1,219
    
    
    $
    950
    
    
    
    12
    
    
    
    336,693
    
    
    
    (88,968
    )
    
    
    633
    
    
    
    249,320
  4




---



##### Table of Contents



Levitt Corporation
 
 Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 Three Months EndedMarch 31,2008
    
    
    2007Operating activities:Net (loss) income
    
    $
    (10,431
    )
    
    
    976Adjustments to reconcile net (loss) income to net cash
used in operating activities:Depreciation and amortization
    
    
    943
    
    
    
    906Change in deferred income taxes
    
    
    
    
    
    
    (945
    )Earnings from Bluegreen Corporation
    
    
    (526
    )
    
    
    (1,744
    )Earnings from unconsolidated trust
    
    
    (55
    )
    
    
    (55
    )Earnings from real estate joint ventures
    
    
    
    
    
    
    (3
    )Share-based compensation expense related to
stock options and restricted stock, net of reversal
of expense related to forfeited stock options
    
    
    (329
    )
    
    
    811Impairment of long lived assets
    
    
    
    
    
    
    282Changes in operating assets and liabilities:Restricted cash
    
    
    338
    
    
    
    1,085Inventory of real estate
    
    
    (6,742
    )
    
    
    (22,933
    )Notes receivable
    
    
    
    
    
    
    4,076Other assets
    
    
    585
    
    
    
    3,031Customer deposits
    
    
    86
    
    
    
    (10,338
    )Accounts payable, accrued expenses and other liabilities
    
    
    (1,700
    )
    
    
    (8,435
    )Net cash used in operating activities
    
    
    (17,831
    )
    
    
    (33,286
    )Investing activities:Investment in and advances to real estate joint ventures
    
    
    
    
    
    
    (144
    )Purchases of other equity securities
    
    
    (33,978
    )
    
    
    Distributions of capital from real estate joint ventures
    
    
    
    
    
    
    5Distributions from unconsolidated trusts
    
    
    55
    
    
    
    55Capital expenditures
    
    
    (804
    )
    
    
    (9,332
    )Net cash used in investing activities
    
    
    (34,727
    )
    
    
    (9,416
    )Financing activities:Proceeds from notes and mortgage notes payable
    
    
    4,667
    
    
    
    117,407Repayment of notes and mortgage notes payable
    
    
    (16,107
    )
    
    
    (61,346
    )Payments for debt offering costs
    
    
    
    
    
    
    (804
    )Cash dividends paid
    
    
    
    
    
    
    (396
    )Net cash (used in) provided by financing activities
    
    
    (11,440
    )
    
    
    54,861(Decrease) increase in cash and cash equivalents
    
    
    (63,998
    )
    
    
    12,159Cash and cash equivalents at the beginning of period
    
    
    195,181
    
    
    
    48,391Cash and cash equivalents at the end of period
    
    $
    131,183
    
    
    
    60,550
 5




---



##### Table of Contents



Levitt Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 The Three MonthsEnded March 31,2008
    
    2007Supplemental cash flow informationInterest paid on borrowings, net of amounts capitalized
    
    $
    2,849
    
    
    
    (254
    )Income taxes paid
    
    
    
    
    
    
    4,370Supplemental disclosure of non-cash operating,
investing and financing activities:Change in shareholders equity resulting from
unrealized loss recognized from equity
securities, net of tax
    
    $
    (1,253
    )
    
    
    (39
    )Change in shareholders equity resulting from the
issuance of Bluegreen common stock, net of tax
    
    $
    227
    
    
    
    (79
    )Decrease in inventory from reclassification to property
and equipment
    
    $
    
    
    
    
    93Increase in deferred tax liability due to cumulative
impact of change in accounting for uncertainties in
income taxes
    
    $
    
    
    
    
    260
  6




---



##### Table of Contents



Levitt Corporation
 
 Notes to Unaudited Consolidated Financial Statements
 1. Presentation of Interim Financial Statements
     7




---



##### Table of Contents



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




---



##### Table of Contents



March 31,
    
    
    December 31,2008
    
    
    2007Property and equipment, net
    
    $
    84,182
    
    
    
    84,677Other assets
    
    
    11,593
    
    
    
    11,537Assets held for sale
    
    $
    95,775
    
    
    
    96,214Accounts payable, accrued liabilities and other
    
    $
    1,413
    
    
    
    1,123Notes and mortgage payable
    
    
    80,379
    
    
    
    78,970Liabilities related to assets held for sale
    
    $
    81,792
    
    
    
    80,093
  March 31,
    
    
    March 31,2008
    
    
    2007Revenue
    
    $
    2,218
    
    
    
    585Costs and expenses
    
    
    857
    
    
    
    5921,361
    
    
    
    (7
    )Other income
    
    
    5
    
    
    
    2Income (loss) before income taxes
    
    
    1,366
    
    
    
    (5
    )Benefit for income taxes
    
    
    
    
    
    
    2Net income (loss)
    
    $
    1,366
    
    
    
    (3
    )
 3. Stock Based Compensation
   Share-Based
Payment
 9




---



##### Table of Contents



Number of
    
    
    WeightedStock
    
    
    Average ExerciseOptions
    
    
    PriceOptions outstanding at December 31, 2007
    
    
    1,862,390
    
    
    $
    17.33Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    358,475
    
    
    $
    16.57Options outstanding at March 31, 2008
    
    
    1,503,915
    
    
    $
    17.51Options exercisable at March 31, 2008
    
    
    167,090
    
    
    $
    15.34
     10




---



##### Table of Contents



4. Inventory of Real Estate
  March 31,
    
    
    December 31,2008
    
    
    2007Land and land development costs
    
    $
    199,582
    
    
    
    196,577Construction costs
    
    
    1,831
    
    
    
    1,062Capitalized interest
    
    
    32,172
    
    
    
    29,012Other costs
    
    
    638
    
    
    
    639$
    234,223
    
    
    
    227,290
   5. Interest
  Three Months EndedMarch 31,2008
    
    
    2007Interest incurred
    
    $
    5,039
    
    
    
    12,326Interest capitalized
    
    
    (2,320
    )
    
    
    (12,326
    )Interest expense, net
    
    $
    2,719
    
    
    
    Interest included in cost of sales
    
    $
    
    
    
    
    4,425
  11




---



##### Table of Contents



6. Fair Value Measurement
 Fair Value
Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities
      Ø
    
    Market approach, which uses prices and other relevant information generated by market
transactions involving identical or comparable assets or liabilities.
 12




---



##### Table of Contents



Ø
    
    Income approach,under which market participants expectations of future cash flows or
earnings are converted into a single discounted present amount.Ø
    
    Cost approach, which is based on the amount currently required for replacing the service
capacity of an asset or replacement cost adjusted for obsolescence.
  7. Investments
 Bluegreen Corporation
     Unaudited Condensed Consolidated Balance Sheets
 March 31,
    
    
    December 31,2008
    
    
    2007Total assets
    
    $
    1,015,881
    
    
    
    1,039,578Total liabilities
    
    $
    606,684
    
    
    
    632,047Minority interest
    
    
    23,261
    
    
    
    22,423Total shareholders equity
    
    
    385,936
    
    
    
    385,108Total liabilities and shareholders equity
    
    $
    1,015,881
    
    
    
    1,039,578
 13




---



##### Table of Contents



Unaudited Condensed Consolidated Statements of Income
 Three Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007Revenues and other income
    
    $
    139,352
    
    
    
    146,658Cost and other expenses
    
    
    136,263
    
    
    
    136,422Income before minority interest and
provision for income taxes
    
    
    3,089
    
    
    
    10,236Minority interest
    
    
    838
    
    
    
    1,634Income before provision for income taxes
    
    
    2,251
    
    
    
    8,602Provision for income taxes
    
    
    (855
    )
    
    
    (3,269
    )Net income
    
    $
    1,396
    
    
    
    5,333
  Other equity securities
   March 31,2008Total cost
    
    $
    33,978Gross unrealized losses
    
    
    (826
    )Total fair value
    
    $
    33,152
   8. Debt
  14




---



##### Table of Contents



9. Commitments and Contingencies
  Accounting for Uncertainty in Income Taxes  an interpretation of FASB No.
109
   Severance
    
    
    
    
    
    
    Independent
    
    
    SuretyRelated and
    
    
    
    
    
    
    Contractor
    
    
    BondBenefits
    
    
    Facilities
    
    
    Agreements
    
    
    Accrual
    
    
    TotalBalance at December 31, 2007
    
    $
    1,954
    
    
    
    1,010
    
    
    
    1,421
    
    
    
    1,826
    
    
    
    6,211Restructuring charges (credits)
    
    
    1,207
    
    
    
    
    
    
    
    (42
    )
    
    
    
    
    
    
    1,165Cash payments
    
    
    (1,527
    )
    
    
    (86
    )
    
    
    (206
    )
    
    
    (165
    )
    
    
    (1,984
    )Balance at March 31, 2008
    
    $
    1,634
    
    
    
    924
    
    
    
    1,173
    
    
    
    1,661
    
    
    
    5,392
  15




---



##### Table of Contents



Accounting for Costs Associated with
Exit or Disposal Activities
   10. Development Bonds Payable
   16




---



##### Table of Contents



Accounting for Contingencies
 Accounting for Special Assessments and Tax Increment
Financing
 11. (Loss) Earnings per Share
   Three Months EndedMarch 31,2008
    
    
    2007Numerator:Basic (loss) earnings per common share:(Loss) earnings from continuing operations
    
    $
    (11,797
    )
    
    
    979Income (loss) from discontinued operations
    
    
    1,366
    
    
    
    (3
    )Net (loss) income  basic
    
    $
    (10,431
    )
    
    
    976Diluted (loss) earnings per common share:Net (loss) income from continuing operations  basic
    
    $
    (11,797
    )
    
    
    979Pro rata share of the net effect of Bluegreen dilutive
securities
    
    
    (2
    )
    
    
    (12
    )
 17




---



##### Table of Contents



Three Months EndedMarch 31,2008
    
    
    2007(Loss) income from continuing operations
    
    $
    (11,799
    )
    
    
    967Income (loss) from discontinued operations
    
    
    1,366
    
    
    
    (3
    )Net (loss) income  diluted
    
    $
    (10,433
    )
    
    
    964Denominator:Basic average shares outstanding
    
    
    96,257
    
    
    
    19,826Bonus adjustment factor from registration rights offering
    
    
    
    
    
    
    1.0197Basic average shares outstanding
    
    
    96,257
    
    
    
    20,217Net effect of stock options assumed to be exercised
    
    
    
    
    
    
    11Diluted average shares outstanding
    
    
    96,257
    
    
    
    20,228Basic (loss) earnings per common share:Continuing operations
    
    $
    (0.12
    )
    
    
    0.05Discontinued operations
    
    $
    0.01
    
    
    
    Total basic (loss) earnings per share
    
    $
    (0.11
    )
    
    
    0.05Diluted (loss) earnings per common share:Continuing operations
    
    $
    (0.12
    )
    
    
    0.05Discontinued operations
    
    $
    0.01
    
    
    
    Total diluted (loss) earnings per share
    
    $
    (0.11
    )
    
    
    0.05
 12. Other Revenues
  Three Months EndedMarch 31,2008
    
    
    2007Other revenuesMortgage & title operations
    
    $
    
    
    
    
    722Lease/rental income
    
    
    282
    
    
    
    309Marketing fees
    
    
    93
    
    
    
    631Impact fees
    
    
    146
    
    
    
    Irrigation revenue
    
    
    225
    
    
    
    250$
    746
    
    
    
    1,912
  13. Income Taxes
   18




---



##### Table of Contents



14. Other Expenses and Interest and Other Income
  Three Months EndedMarch 31,2008
    
    
    2007Other expensesTitle and mortgage operations expenses
    
    $
    
    
    
    
    482Total other expenses
    
    $
    
    
    
    
    482Interest and other incomeInterest income
    
    $
    1,476
    
    
    
    717Forfeited deposits
    
    
    
    
    
    
    1,429Other income
    
    
    123
    
    
    
    194Total interest and other income
    
    $
    1,599
    
    
    
    2,340
  15. Segment Reporting
   19




---



##### Table of Contents



Three Months Ended
    
    
    
    
    
    OtherMarch 31, 2008
    
    Land
    
    Operations
    
    Eliminations
    
    TotalRevenues:Sales of real estate
    
    $
    154
    
    
    
    
    
    
    
    
    
    
    
    154Other revenues
    
    
    487
    
    
    
    259
    
    
    
    
    
    
    
    746Total revenues
    
    
    641
    
    
    
    259
    
    
    
    
    
    
    
    900Costs and expenses:Cost of sales of real estate
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    28Selling, general and administrative expenses
    
    
    4,979
    
    
    
    7,096
    
    
    
    
    
    
    
    12,075Interest expense
    
    
    688
    
    
    
    2,673
    
    
    
    (642
    )
    
    
    2,719Total costs and expenses
    
    
    5,695
    
    
    
    9,769
    
    
    
    (642
    )
    
    
    14,822Earnings from Bluegreen Corporation
    
    
    
    
    
    
    526
    
    
    
    
    
    
    
    526Interest and other income
    
    
    899
    
    
    
    1,342
    
    
    
    (642
    )
    
    
    1,599Loss from continuing operations before
income taxes
    
    
    (4,155
    )
    
    
    (7,642
    )
    
    
    
    
    
    
    (11,797
    )Benefit for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss from continuing operations
    
    
    (4,155
    )
    
    
    (7,642
    )
    
    
    
    
    
    
    (11,797
    )Discontinued operations:Income from discontinued operations
    
    
    1,366
    
    
    
    
    
    
    
    
    
    
    
    1,366Net loss
    
    $
    (2,789
    )
    
    
    (7,642
    )
    
    
    
    
    
    
    (10,431
    )Inventory of real estate
    
    $
    195,068
    
    
    
    46,441
    
    
    
    (7,286
    )
    
    
    234,223Total assets
    
    $
    328,255
    
    
    
    365,699
    
    
    
    (5,260
    )
    
    
    688,694Total debt
    
    $
    125,059
    
    
    
    137,060
    
    
    
    
    
    
    
    262,119Total liabilities
    
    $
    202,740
    
    
    
    225,239
    
    
    
    11,395
    
    
    
    439,374Total shareholders equity
    
    $
    125,515
    
    
    
    140,460
    
    
    
    (16,655
    )
    
    
    249,320
 20




---



##### Table of Contents



Three Months Ended
    
    Primary
    
    Tennessee
    
    
    
    
    
    OtherMarch 31, 2007
    
    Homebuilding
    
    Homebuilding
    
    Land
    
    Operations
    
    Eliminations
    
    TotalRevenues:Sales of real estate
    
    $
    112,512
    
    
    
    21,657
    
    
    
    777
    
    
    
    6,574
    
    
    
    (222
    )
    
    
    141,298Other revenues
    
    
    722
    
    
    
    
    
    
    
    917
    
    
    
    293
    
    
    
    (20
    )
    
    
    1,912Total revenues
    
    
    113,234
    
    
    
    21,657
    
    
    
    1,694
    
    
    
    6,867
    
    
    
    (242
    )
    
    
    143,210Costs and expenses:Cost of sales of real estate
    
    
    86,952
    
    
    
    20,651
    
    
    
    72
    
    
    
    5,501
    
    
    
    (268
    )
    
    
    112,908Selling, general and administrative expenses
    
    
    18,421
    
    
    
    1,884
    
    
    
    3,773
    
    
    
    8,236
    
    
    
    
    
    
    
    32,314Interest expense
    
    
    
    
    
    
    
    
    
    
    215
    
    
    
    
    
    
    
    (215
    )
    
    
    Other expenses
    
    
    482
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    482Total costs and expenses
    
    
    105,855
    
    
    
    22,535
    
    
    
    4,060
    
    
    
    13,737
    
    
    
    (483
    )
    
    
    145,704Earnings from Bluegreen Corporation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,744
    
    
    
    
    
    
    
    1,744Interest and other income
    
    
    1,641
    
    
    
    29
    
    
    
    945
    
    
    
    245
    
    
    
    (520
    )
    
    
    2,340Income (loss) from continuing operations
before income taxes
    
    
    9,020
    
    
    
    (849
    )
    
    
    (1,421
    )
    
    
    (4,881
    )
    
    
    (279
    )
    
    
    1,590(Provision) benefit for income taxes
    
    
    (3,539
    )
    
    
    328
    
    
    
    566
    
    
    
    1,864
    
    
    
    170
    
    
    
    (611
    )Income (loss) from continuing operations
    
    
    5,481
    
    
    
    (521
    )
    
    
    (855
    )
    
    
    (3,017
    )
    
    
    (109
    )
    
    
    979Discontinued operations:Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    (3
    )Net income (loss)
    
    $
    5,481
    
    
    
    (521
    )
    
    
    (858
    )
    
    
    (3,017
    )
    
    
    (109
    )
    
    
    976Inventory of real estate
    
    $
    623,612
    
    
    
    43,583
    
    
    
    195,394
    
    
    
    10,079
    
    
    
    (28,070
    )
    
    
    844,598Total assets
    
    $
    651,569
    
    
    
    46,850
    
    
    
    286,431
    
    
    
    173,657
    
    
    
    (29,020
    )
    
    
    1,129,487Total debt
    
    $
    399,165
    
    
    
    28,662
    
    
    
    112,357
    
    
    
    99,006
    
    
    
    
    
    
    
    639,190Total liabilities
    
    $
    530,790
    
    
    
    41,158
    
    
    
    149,134
    
    
    
    79,359
    
    
    
    (15,726
    )
    
    
    784,715Total shareholders equity
    
    $
    120,779
    
    
    
    5,692
    
    
    
    137,297
    
    
    
    94,298
    
    
    
    (13,294
    )
    
    
    344,772
  16. Parent Company Financial Statements
   21




---



##### Table of Contents



Condensed Statements of Financial Condition
 March 31,
    
    
    December 31,2008
    
    
    2007Total assets
    
    $
    414,498
    
    
    
    429,532Total liabilities
    
    $
    165,178
    
    
    
    168,426Total shareholders equity
    
    
    249,320
    
    
    
    261,106Total liabilities and shareholders equity
    
    $
    414,498
    
    
    
    429,532
 Condensed Statements of Operations
 Three MonthsEnded March 31,2008
    
    
    2007Earnings from Bluegreen Corporation
    
    $
    526
    
    
    
    1,744Other revenues
    
    
    1,339
    
    
    
    246Costs and expenses
    
    
    7,406
    
    
    
    8,265Loss before income taxes
    
    
    (5,541
    )
    
    
    (6,275
    )Benefit for income taxes
    
    
    
    
    
    
    2,347Net loss before undistributed
earnings from consolidated
subsidiaries
    
    
    (5,541
    )
    
    
    (3,928
    )(Loss) earnings from consolidated
subsidiaries, net of income taxes
    
    
    (4,890
    )
    
    
    4,904Net (loss) income
    
    $
    (10,431
    )
    
    
    976
  17. Certain Relationships and Related Party Transactions
  22




---



##### Table of Contents



18. New Accounting Pronouncements
    Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51
 23




---



##### Table of Contents



Business Combinations
 Disclosures about Derivative Instruments and
Hedging Activities an amendment of FASB Statement No. 133
 19. Litigation
 Class Action litigation
  General litigation
  20. Financial Information of Levitt and Sons
  24




---



##### Table of Contents



25




---



##### Table of Contents



Levitt and Sons
Condensed Consolidated Statements of Financial Condition  Unaudited
(In thousands)
 March 31,
    
    
    December 31,2008
    
    
    2007AssetsCash
    
    $
    5,516
    
    
    
    5,365Inventory
    
    
    207,090
    
    
    
    208,686Property and equipment
    
    
    55
    
    
    
    55Other assets
    
    
    22,215
    
    
    
    23,810Total assets
    
    $
    234,876
    
    
    
    237,916Liabilities and Shareholders EquityAccounts payable and other accrued liabilities
    
    $
    449
    
    
    
    469Due to Levitt Corporation
    
    
    1,900
    
    
    
    748Liabilities subject to compromise (A)
    
    
    353,347
    
    
    
    354,748Shareholders deficit
    
    $
    (120,820
    )
    
    
    (118,049
    )Total liabilities and shareholders equity
    
    $
    234,876
    
    
    
    237,916
 (A) Liabilities Subject to Compromise
   Accounts payable and other accrued liabilities
    
    $
    70,385Customer deposits
    
    
    16,427Due to Levitt Corporation
    
    
    87,182Deficiency claim associated with secured debt
    
    
    38,522Notes and mortgage payable
    
    
    140,831Total liabilities subject to compromise
    
    $
    353,347
  Levitt and Sons
Condensed Consolidated Statements of Operations  Unaudited
(In thousands)
 March 31,
    
    
    March 31,2008
    
    
    2007RevenuesSales of real estate
    
    $
    2,284
    
    
    
    134,169Other revenues
    
    
    2
    
    
    
    722Total revenues
    
    
    2,286
    
    
    
    134,891
 26




---



##### Table of Contents



March 31,
    
    
    March 31,2008
    
    
    2007Costs and expensesCost of sales of real estate
    
    
    1,925
    
    
    
    107,603Selling, general and administrative expenses
    
    
    1,933
    
    
    
    20,305Total costs and expenses
    
    
    3,858
    
    
    
    127,908Reorganization items, net
    
    
    (1,985
    )
    
    
    Other income, net of other expense
    
    
    786
    
    
    
    1,188(Loss) income before income taxes
    
    
    (2,771
    )
    
    
    8,171Provision for income taxes
    
    
    
    
    
    
    (3,211
    )Net (loss) income
    
    $
    (2,771
    )
    
    
    4,960
 27




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
     28




---



##### Table of Contents



Executive Overview
   29




---



##### Table of Contents



Financial and Non-Financial Metrics
  Other Operations Overview
   Land Division Overview
  30




---



##### Table of Contents



Critical Accounting Policies and Estimates
  Investments in Unconsolidated Subsidiaries  Cost Method
  31




---



##### Table of Contents



CONSOLIDATED RESULTS OF OPERATIONS
 Three MonthsEnded March 31,(In thousands)
    
    2008
    
    
    2007
    
    
    ChangeRevenues:Sales of real estate
    
    $
    154
    
    
    
    141,298
    
    
    
    (141,144
    )Other revenues
    
    
    746
    
    
    
    1,912
    
    
    
    (1,166
    )Total revenues
    
    
    900
    
    
    
    143,210
    
    
    
    (142,310
    )Costs and expenses:Cost of sales of real estate
    
    
    28
    
    
    
    112,908
    
    
    
    (112,880
    )Selling, general and administrative expenses
    
    
    12,075
    
    
    
    32,314
    
    
    
    (20,239
    )Interest expense
    
    
    2,719
    
    
    
    
    
    
    
    2,719Other expenses
    
    
    
    
    
    
    482
    
    
    
    (482
    )Total costs and expenses
    
    
    14,822
    
    
    
    145,704
    
    
    
    (130,882
    )Earnings from Bluegreen Corporation
    
    
    526
    
    
    
    1,744
    
    
    
    (1,218
    )Interest and other income
    
    
    1,599
    
    
    
    2,340
    
    
    
    (741
    )(Loss) income from continuing operations
before income taxes
    
    
    (11,797
    )
    
    
    1,590
    
    
    
    (13,387
    )Provision for income taxes
    
    
    
    
    
    
    (611
    )
    
    
    611(Loss) income from continuing operations
    
    
    (11,797
    )
    
    
    979
    
    
    
    (12,776
    )Discontinued operations:Income (loss) from discontinued operations
    
    
    1,366
    
    
    
    (3
    )
    
    
    1,369Net (loss) income
    
    $
    (10,431
    )
    
    
    976
    
    
    
    (11,407
    )
 For the Three Months Ended March 31, 2008 Compared to the Same 2007 Period:
  32




---



##### Table of Contents



33




---



##### Table of Contents



34




---



##### Table of Contents



LAND DIVISION RESULTS OF OPERATIONS
 Three MonthsEnded March 31,(Dollars in thousands)
    
    2008
    
    
    2007
    
    
    ChangeRevenues:Sales of real estate
    
    $
    154
    
    
    
    777
    
    
    
    (623
    )Other revenues
    
    
    487
    
    
    
    917
    
    
    
    (430
    )Total revenues
    
    
    641
    
    
    
    1,694
    
    
    
    (1,053
    )Costs and expenses:Cost of sales of real estate
    
    
    28
    
    
    
    72
    
    
    
    (44
    )Selling, general and administrative
expenses
    
    
    4,979
    
    
    
    3,773
    
    
    
    1,206Interest expense
    
    
    688
    
    
    
    215
    
    
    
    473Total costs and expenses
    
    
    5,695
    
    
    
    4,060
    
    
    
    1,635Interest and other income
    
    
    899
    
    
    
    945
    
    
    
    (46
    )Loss from continuing operations before
income taxes
    
    
    (4,155
    )
    
    
    (1,421
    )
    
    
    (2,734
    )Benefit for income taxes
    
    
    
    
    
    
    566
    
    
    
    (566
    )Loss from continuing operations
    
    
    (4,155
    )
    
    
    (855
    )
    
    
    (3,300
    )Discontinued operations:Income (loss) from discontinued operations
    
    
    1,366
    
    
    
    (3
    )
    
    
    1,369Net loss
    
    $
    (2,789
    )
    
    
    (858
    )
    
    
    (1,931
    )Acres sold
    
    
    
    
    
    
    
    
    
    
    Margin percentage (a)
    
    
    81.8
    %
    
    
    90.7
    %
    
    
    (8.9
    )%Unsold saleable acres
    
    
    6,679
    
    
    
    6,871
    
    
    
    (192
    )Acres subject to sales contracts  Third
parties
    
    
    260
    
    
    
    74
    
    
    
    186Aggregate sales price of acres subject to
sales contracts to third parties
    
    $
    78,488
    
    
    
    21,124
    
    
    
    57,364
 
 (a)
    
    Sales of real estate and margin percentage include revenues from look back
provisions and recognition of deferred revenue associated with sales in prior
periods. One lot was sold in the three months ended March 31, 2008 compared to no
lot sales in the same period in 2007.  35




---



##### Table of Contents



For the Three Months Ended March 31, 2008 Compared to the Same 2007 Period:
       36




---



##### Table of Contents



OTHER OPERATIONS RESULTS OF OPERATIONS
 Three MonthsEnded March 31,(In thousands)
    
    2008
    
    
    2007
    
    
    ChangeRevenues:Sales of real estate
    
    $
    
    
    
    
    6,574
    
    
    
    (6,574
    )Other revenues
    
    
    259
    
    
    
    293
    
    
    
    (34
    )Total revenues
    
    
    259
    
    
    
    6,867
    
    
    
    (6,608
    )Costs and expenses:Cost of sales of real estate
    
    
    
    
    
    
    5,501
    
    
    
    (5,501
    )Selling, general and administrative expenses
    
    
    7,096
    
    
    
    8,236
    
    
    
    (1,140
    )Interest expense
    
    
    2,673
    
    
    
    
    
    
    
    2,673Total costs and expenses
    
    
    9,769
    
    
    
    13,737
    
    
    
    (3,968
    )Earnings from Bluegreen Corporation
    
    
    526
    
    
    
    1,744
    
    
    
    (1,218
    )Interest and other income
    
    
    1,342
    
    
    
    245
    
    
    
    1,097Loss before income taxes
    
    
    (7,642
    )
    
    
    (4,881
    )
    
    
    (2,761
    )Benefit for income taxes
    
    
    
    
    
    
    1,864
    
    
    
    (1,864
    )Net loss
    
    $
    (7,642
    )
    
    
    (3,017
    )
    
    
    (4,625
    )
 For the Three Months Ended March 31, 2008 Compared to the Same 2007 Period:
    37




---



##### Table of Contents



38




---



##### Table of Contents



PRIMARY HOMEBUILDING SEGMENT RESULTS OF OPERATIONS
 Three MonthsEnded March 31,(Dollars in thousands)
    
    2008
    
    
    2007
    
    
    ChangeRevenuesSales of real estate
    
    $
    
    
    
    
    112,512
    
    
    
    (112,512
    )Other revenues
    
    
    
    
    
    
    722
    
    
    
    (722
    )Total revenues
    
    
    
    
    
    
    113,234
    
    
    
    (113,234
    )Costs and expensesCost of sales of real estate
    
    
    
    
    
    
    86,952
    
    
    
    (86,952
    )Selling, general and administrative expenses
    
    
    
    
    
    
    18,421
    
    
    
    (18,421
    )Other expenses
    
    
    
    
    
    
    482
    
    
    
    (482
    )Total costs and expenses
    
    
    
    
    
    
    105,855
    
    
    
    (105,855
    )Interest and other income
    
    
    
    
    
    
    1,641
    
    
    
    (1,641
    )Income before income taxes
    
    
    
    
    
    
    9,020
    
    
    
    (9,020
    )Provision for income taxes
    
    
    
    
    
    
    (3,539
    )
    
    
    3,539Net income
    
    $
    
    
    
    
    5,481
    
    
    
    (5,481
    )Homes delivered (units)
    
    
    
    
    
    
    315
    
    
    
    (315
    )Construction starts (units)
    
    
    
    
    
    
    202
    
    
    
    (202
    )Average selling price of homes delivered (a)
    
    $
    
    
    
    
    357,000
    
    
    
    (357,000
    )Margin percentage on homes delivered (a)
    
    
    
    
    
    
    22.7
    %
    
    
    (22.7
    )%Net orders (units)
    
    
    
    
    
    
    101
    
    
    
    (101
    )Net orders (value)
    
    $
    
    
    
    
    33,156
    
    
    
    (33,156
    )Backlog of homes (units)
    
    
    
    
    
    
    912
    
    
    
    (912
    )Backlog of homes (value)
    
    $
    
    
    
    
    332,196
    
    
    
    (332,196
    )
   39




---



##### Table of Contents



TENNESSEE HOMEBUILDING SEGMENT RESULTS OF OPERATIONS
 Three MonthsEnded March 31,(Dollars in thousands)
    
    2008
    
    
    2007
    
    
    ChangeRevenuesSales of real estate
    
    $
    
    
    
    
    21,657
    
    
    
    (21,657
    )Total revenues
    
    
    
    
    
    
    21,657
    
    
    
    (21,657
    )Costs and expensesCost of sales of real estate
    
    
    
    
    
    
    20,651
    
    
    
    (20,651
    )Selling, general and administrative expenses
    
    
    
    
    
    
    1,884
    
    
    
    (1,884
    )Total costs and expenses
    
    
    
    
    
    
    22,535
    
    
    
    (22,535
    )Interest and other income
    
    
    
    
    
    
    29
    
    
    
    (29
    )Loss before income taxes
    
    
    
    
    
    
    (849
    )
    
    
    849Benefit for income taxes
    
    
    
    
    
    
    328
    
    
    
    (328
    )Net loss
    
    $
    
    
    
    
    (521
    )
    
    
    521Homes delivered (units)
    
    
    
    
    
    
    47
    
    
    
    (47
    )Construction starts (units)
    
    
    
    
    
    
    52
    
    
    
    (52
    )Average selling price of homes delivered (a)
    
    $
    
    
    
    
    225,000
    
    
    
    (225,000
    )Margin percentage on homes delivered (a)
    
    
    
    
    
    
    9.5
    %
    
    
    (9.5
    )%Net orders (units)
    
    
    
    
    
    
    58
    
    
    
    (58
    )Net orders (value)
    
    $
    
    
    
    
    10,744
    
    
    
    (10,744
    )Backlog of homes (units)
    
    
    
    
    
    
    133
    
    
    
    (133
    )Backlog of homes (value)
    
    $
    
    
    
    
    26,833
    
    
    
    (26,833
    )
 
 (a)
    
    Calculation for the three months ended March 31, 2007 excludes an $11.1 million land sale, which generated no margin.  40




---



##### Table of Contents



FINANCIAL CONDITION
 March 31, 2008 compared to December 31, 2007
  
    
    a net decrease in cash and cash equivalents of $64.0 million, which resulted from
cash used in operations of $17.8 million, cash used in investing activities of $34.7
million and cash used in financing activities of $11.4 million. Cash used in investing
activities included $34.0 million used for the acquisition of Office Depot common
stock, which offset the decrease in cash by increasing the investment in other equity
securities; and
    
    The above decrease was partially offset by an increase in inventory of real estate
mainly due to the land development activities of the Land Division.
  
    
    a net decrease in notes and mortgage notes payable of $12.7 million, primarily due
to a curtailment payment made in connection with a development loan in Tradition Hilton
Head; and
    
    A decrease in accounts payable, accrued liabilities and other liabilities of
approximately $1.4 million attributable to decreased severance and construction related
accruals.
 LIQUIDITY AND CAPITAL RESOURCES
   Levitt Corporation (Parent Company level)
  41




---



##### Table of Contents



Core Communities
   42




---



##### Table of Contents



Off Balance Sheet Arrangements and Contractual Obligations
   43




---



##### Table of Contents



Accounting for Contingencies
 Accounting for Special
Assessments and Tax Increment Financing
  Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations (1) (2)
    
    $
    262,119
    
    
    
    29,938
    
    
    
    46,963
    
    
    
    78,279
    
    
    
    106,939Long-term debt obligations
associated with assets held for
sale
    
    
    80,379
    
    
    
    8,904
    
    
    
    5,902
    
    
    
    62,519
    
    
    
    3,054Operating lease obligations
    
    
    4,515
    
    
    
    1,278
    
    
    
    1,502
    
    
    
    508
    
    
    
    1,227Total Obligations
    
    $
    347,013
    
    
    
    40,120
    
    
    
    54,367
    
    
    
    141,306
    
    
    
    111,220
 
 (1)
    
    Amounts exclude interest because terms of repayment are based on construction activity
and sales volume. In addition, a large portion of our debt is based on variable rates.(2)
    
    These amounts represent scheduled principal payments and some of those borrowings require
the repayment of specified amounts upon a sale of portions of the property securing those
obligations, as well as curtailment repayments prior to scheduled maturity pursuant to
re-margining requirements. Accounting for Uncertainty in Income Taxes  an
interpretation of FASB No. 109
   44




---



##### Table of Contents



NEW ACCOUNTING PRONOUNCEMENTS.
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
    45




---



##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
     46




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 5. Other Information
  
 Item 6. Exhibits
  Exhibit 31.1*
    
    CEO Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.Exhibit 31.2*
    
    Acting CFO Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.Exhibit 32.1**
    
    CEO Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.Exhibit 32.2**
    
    Acting CFO Certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 *
    
    Exhibits filed with this Form 10-Q**
    
    Exhibits furnished with this Form 10-Q 47




---



##### Table of Contents



LEVITT CORPORATIONDate: May 12, 2008
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive OfficerDate: May 12, 2008
    By:
    /s/  Patrick M. WorshamPatrick M. Worsham, Acting Chief Financial Officer 48