##### 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
 MARCH 31, 2007
  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
  001-31931
 LEVITT CORPORATION
  FLORIDA
    
    11-3675068(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 2200 W. Cypress Creek Road,Fort Lauderdale, FL
    
    33309(Address of principal executive offices)
    
    (Zip Code)
 (954) 958-1800
  x o
  o x o
  o x
  Class
    
    Outstanding at May 5, 2007Class A common stock, $0.01 par value
    
    18,612,042Class B common stock, $0.01 par value
    
    1,219,031




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##### Table of Contents



PART I.
    
    FINANCIAL INFORMATION
    
    
    1Item 1.
    
    Financial Statements:
    
    
    1Consolidated Statements of Financial Condition as of March 31, 2007 and December 31, 2006  Unaudited
    
    
    1Consolidated Statements of Operations for the three months ended March 31, 2007 and 2006  Unaudited
    
    
    2Consolidated Statements of Comprehensive Income (loss) for the three months ended March 31, 2007 and 2006  Unaudited
    
    
    3Consolidated Statement of Shareholders Equity for the three months ended March 31, 2007  Unaudited
    
    
    4Consolidated Statements of Cash Flows for the three months ended March 31, 2007 and 2006  Unaudited
    
    
    5Notes to Unaudited Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    20Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    36Item 4.
    
    Controls and Procedures
    
    
    36PART II.
    
    OTHER INFORMATION
    
    
    37Item 1.
    
    Legal Proceedings
    
    
    37Item 1A.
    
    Risk Factors
    
    
    37Item 6.
    
    Exhibits
    
    
    37SIGNATURES
    
    
    38EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-31.3 Section 302 Certification of CAOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFOEX-32.3 Section 906 Certification of CAO




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 Levitt Corporation
Consolidated Statements of Financial Condition  Unaudited
(In thousands, except share data)
 March 31,
    
    
    December 31,2007
    
    
    2006AssetsCash and cash equivalents
    
    $
    60,550
    
    
    
    48,391Restricted cash
    
    
    312
    
    
    
    1,397Inventory of real estate
    
    
    836,303
    
    
    
    822,040Investment in Bluegreen Corporation
    
    
    108,615
    
    
    
    107,063Property and equipment, net
    
    
    87,444
    
    
    
    78,675Other assets
    
    
    27,968
    
    
    
    33,100Total assets
    
    $
    1,121,192
    
    
    
    1,090,666Liabilities and Shareholders EquityAccounts payable, accrued liabilities and other
    
    $
    71,039
    
    
    
    85,123Customer deposits
    
    
    32,358
    
    
    
    42,696Current income tax payable
    
    
    985
    
    
    
    3,905Notes and mortgage notes payable
    
    
    586,712
    
    
    
    530,651Junior subordinated debentures
    
    
    85,052
    
    
    
    85,052Total liabilities
    
    
    776,146
    
    
    
    747,427Shareholders 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: 18,612,042 and 18,609,024 shares, respectively
    
    
    186
    
    
    
    186Class B Common Stock, $0.01 par valueAuthorized: 10,000,000 sharesIssued and outstanding: 1,219,031 shares
    
    
    12
    
    
    
    12Additional paid-in capital
    
    
    185,133
    
    
    
    184,401Retained earnings
    
    
    157,333
    
    
    
    156,219Accumulated other comprehensive income
    
    
    2,382
    
    
    
    2,421Total shareholders equity
    
    
    345,046
    
    
    
    343,239Total liabilities and shareholders equity
    
    $
    1,121,192
    
    
    
    1,090,666
  1




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Levitt Corporation
Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 Three Months EndedMarch 31,2007
    
    
    2006Revenues:Sales of real estate
    
    $
    141,742
    
    
    
    125,543Other revenues
    
    
    2,497
    
    
    
    1,951Total revenues
    
    
    144,239
    
    
    
    127,494Costs and expenses:Cost of sales of real estate
    
    
    112,908
    
    
    
    102,055Selling, general and administrative expenses
    
    
    32,906
    
    
    
    26,755Other expenses
    
    
    482
    
    
    
    626Total costs and expenses
    
    
    146,296
    
    
    
    129,436Earnings (loss) from Bluegreen Corporation
    
    
    1,744
    
    
    
    (49
    )Earnings from real estate joint ventures
    
    
    3
    
    
    
    Interest and other income
    
    
    2,339
    
    
    
    889Income (loss) before income taxes
    
    
    2,029
    
    
    
    (1,102
    )(Provision) benefit for income taxes
    
    
    (779
    )
    
    
    442Net income (loss)
    
    $
    1,250
    
    
    
    (660
    )Earnings (loss) per share:Basic
    
    $
    0.06
    
    
    
    (0.03
    )Diluted
    
    $
    0.06
    
    
    
    (0.03
    )Weighted average common shares outstanding:Basic
    
    
    19,826
    
    
    
    19,821Diluted
    
    
    19,837
    
    
    
    19,821Dividends declared per common share:Class A common stock
    
    $
    0.02
    
    
    
    0.02Class B common stock
    
    $
    0.02
    
    
    
    0.02
  2




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Levitt Corporation
Consolidated Statements of Comprehensive Income (loss)  Unaudited
(In thousands)
 Three MonthsEnded March 31,2007
    
    
    2006Net income (loss)
    
    $
    1,250
    
    
    
    (660
    )Other comprehensive income:Pro-rata share of unrealized (loss) gain
recognized by Bluegreen Corporation on retained
interests in notes receivable sold
    
    
    (64
    )
    
    
    267Benefit (provision) for income taxes
    
    
    25
    
    
    
    (103
    )Pro-rata share of unrealized (loss) gain
recognized by Bluegreen Corporation on retained
interests in notes receivable sold (net of tax)
    
    
    (39
    )
    
    
    164Comprehensive income (loss)
    
    $
    1,211
    
    
    
    (496
    )
  3




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Levitt Corporation
Consolidated Statement of Shareholders Equity  Unaudited
Three Months Ended March 31, 2007
(In thousands)
 AccumulatedCompre-Class A
    
    
    Class B
    
    
    Additional
    
    
    
    
    
    
    hensiveClass A
    
    
    Class B
    
    
    Common
    
    
    Common
    
    
    Paid-In
    
    
    Retained
    
    
    IncomeShares
    
    
    Shares
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    (Loss)
    
    
    TotalBalance at December 31, 2006
    
    
    18,609
    
    
    
    1,219
    
    
    $
    186
    
    
    
    12
    
    
    
    184,401
    
    
    
    156,219
    
    
    
    2,421
    
    
    
    343,239Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,250
    
    
    
    
    
    
    
    1,250Pro-rata share of unrealized loss
recognized by Bluegreen on
sale of retained interests, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39
    )
    
    
    (39
    )Issuance of Bluegreen common
stock, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (79
    )
    
    
    
    
    
    
    
    
    
    
    (79
    )Cash
dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (396
    )
    
    
    
    
    
    
    (396
    )Share based compensation
related to stock options and
restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    811
    
    
    
    
    
    
    
    
    
    
    
    811Issuance of restricted common
stock
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cumulative impact of change
in accounting for
uncertainties in income
taxes (FIN 48 - See Note 11)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    260
    
    
    
    
    
    
    
    260Balance at March 31, 2007
    
    
    18,612
    
    
    
    1,219
    
    
    $
    186
    
    
    
    12
    
    
    
    185,133
    
    
    
    157,333
    
    
    
    2,382
    
    
    
    345,046
 4




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Levitt Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 Three Months EndedMarch 31,2007
    
    
    2006Operating activities:Net income (loss)
    
    $
    1,250
    
    
    
    (660
    )Adjustments to reconcile net income (loss) to net cash
used in operating activities:Depreciation and amortization
    
    
    906
    
    
    
    550Change in deferred income taxes
    
    
    (945
    )
    
    
    (236
    )(Earnings) loss from Bluegreen Corporation
    
    
    (1,744
    )
    
    
    49Earnings from unconsolidated trust
    
    
    (55
    )
    
    
    (33
    )Earnings from real estate joint ventures
    
    
    (3
    )
    
    
    Share-based compensation expense related to
stock options and restricted stock
    
    
    811
    
    
    
    706Impairment of long lived assets
    
    
    282
    
    
    
    Changes in operating assets and liabilities:Restricted cash
    
    
    1,085
    
    
    
    661Inventory of real estate
    
    
    (14,638
    )
    
    
    (94,105
    )Notes receivable
    
    
    4,076
    
    
    
    178Other assets
    
    
    3,031
    
    
    
    1,056Customer deposits
    
    
    (10,338
    )
    
    
    5,395Accounts payable, accrued expenses and other liabilities
    
    
    (17,004
    )
    
    
    (15,951
    )Net cash used in operating activities
    
    
    (33,286
    )
    
    
    (102,390
    )Investing activities:Investment in and advances to real estate joint ventures
    
    
    (144
    )
    
    
    (402
    )Distributions of capital from real estate joint ventures
    
    
    5
    
    
    
    138Distributions from consolidated trusts
    
    
    55
    
    
    
    33Capital expenditures
    
    
    (9,332
    )
    
    
    (2,640
    )Net cash used in investing activities
    
    
    (9,416
    )
    
    
    (2,871
    )Financing activities:Proceeds from notes and mortgage notes payable
    
    
    117,407
    
    
    
    136,660Repayment of notes and mortgage notes payable
    
    
    (61,346
    )
    
    
    (68,568
    )Repayment of notes and mortgage notes payable to affiliates
    
    
    
    
    
    
    (223
    )Payments for debt offering costs
    
    
    (804
    )
    
    
    Cash dividends paid
    
    
    (396
    )
    
    
    (398
    )Net cash provided by financing activities
    
    
    54,861
    
    
    
    67,471Increase (decrease) in cash and cash equivalents
    
    
    12,159
    
    
    
    (37,790
    )Cash and cash equivalents at the beginning of period
    
    
    48,391
    
    
    
    113,562Cash and cash equivalents at the end of period
    
    $
    60,550
    
    
    
    75,772
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Levitt Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 For the Three MonthsEnded March 31,2007
    
    
    2006Supplemental cash flow informationInterest paid on borrowings, net of amounts capitalized
    
    $
    (254
    )
    
    
    (500
    )Income taxes paid
    
    
    4,370
    
    
    
    12,200Supplemental disclosure of non-cash operating,
investing and financing activities:Change in shareholders equity resulting from pro-rata
share of unrealized (loss) gain recognized by
Bluegreen
on sale of retained interests, net of tax
    
    $
    (39
    )
    
    
    164Change in shareholders equity resulting from the
issuance of Bluegreen common stock, net of tax
    
    $
    (79
    )
    
    
    (60
    )Decrease in inventory from reclassification to property
and equipment
    
    $
    93
    
    
    
    6,554Increase in deferred tax liability due to cumulative
impact of change in accounting for uncertainties in
income taxes (FIN 48  see Note 11)
    
    $
    260
    
    
    
    
  6




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




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Expected volatility
    
    40.05%-42.58%Expected dividend yield
    
    .58%-.73%Risk-free interest rate
    
    4.58%-4.88%Expected life
    
    7.5 yearsForfeiture rate  executives
    
    5%Forfeiture rate  non- executives
    
    10%
   3. Inventory of Real Estate
  March 31,
    
    
    December 31,2007
    
    
    2006Land and land development costs
    
    $
    578,010
    
    
    
    566,459Construction costs
    
    
    166,464
    
    
    
    172,682Capitalized interest
    
    
    55,883
    
    
    
    47,752Other costs
    
    
    35,946
    
    
    
    35,147$
    836,303
    
    
    
    822,040
  8




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4. Interest
  Three Months EndedMarch 31,2007
    
    
    2006Interest incurred
    
    $
    13,006
    
    
    
    8,029Interest capitalized to property and equipment
    
    
    (450
    )
    
    
    Interest capitalized to inventory
    
    
    (12,556
    )
    
    
    (8,029
    )Interest expense, net
    
    $
    
    
    
    
    Interest included in cost of sales
    
    $
    4,425
    
    
    
    2,594
  5. Investment in Bluegreen Corporation
  9




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Unaudited Condensed Consolidated Balance Sheets
 March 31,
    
    
    December 31,2007
    
    
    2006Total assets
    
    $
    887,382
    
    
    
    854,212Total liabilities
    
    $
    511,739
    
    
    
    486,487Minority interest
    
    
    16,336
    
    
    
    14,702Total shareholders equity
    
    
    359,307
    
    
    
    353,023Total liabilities and shareholders equity
    
    $
    887,382
    
    
    
    854,212
 Unaudited Condensed Consolidated Statements of Income
 Three Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006Revenues and other income
    
    $
    146,882
    
    
    
    147,105Cost and other expenses
    
    
    136,646
    
    
    
    139,528Income before minority interest and
provision for income taxes
    
    
    10,236
    
    
    
    7,577Minority interest
    
    
    1,634
    
    
    
    1,022Income before provision for income taxes
    
    
    8,602
    
    
    
    6,555Provision for income taxes
    
    
    (3,269
    )
    
    
    (2,524
    )Income before cumulative effect of
change in accounting principle
    
    
    5,333
    
    
    
    4,031Cumulative effect of
change in accounting principle, net of tax
    
    
    
    
    
    
    (4,494
    )Net income (loss)
    
    $
    5,333
    
    
    
    (463
    )
 10




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6. Debt
    11




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##### Table of Contents



7. Commitments and Contingencies
  Purchase
    
    
    
    
    
    
    ExpectedPrice
    
    
    Units
    
    
    ClosingHomebuilding Division
    
    $14.2 million
    
    690 Units
    
    
    2008
  8. Earnings (loss) per Share
  12




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Three Months EndedMarch 31,2007
    
    
    2006Numerator:Basic earnings (loss) per common share:Net income (loss)  basic
    
    $
    1,250
    
    
    
    (660
    )Diluted earnings (loss) per common share:Net income (loss)  basic
    
    $
    1,250
    
    
    
    (660
    )Pro rata share of the net effect of Bluegreen
dilutive securities
    
    
    (12
    )
    
    
    Net income (loss)  diluted
    
    $
    1,238
    
    
    
    (660
    )Denominator:Basic average shares outstanding
    
    
    19,826
    
    
    
    19,821Net effect of stock options assumed to be exercised
    
    
    11
    
    
    
    Diluted average shares outstanding
    
    
    19,837
    
    
    
    19,821Earnings (loss) per common share:Basic
    
    $
    0.06
    
    
    
    (0.03
    )Diluted
    
    $
    0.06
    
    
    
    (0.03
    )
 9. Dividends
  10. Other Revenues
  13




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Three Months EndedMarch 31,2007
    
    
    2006Other revenuesMortgage & title operations
    
    $
    722
    
    
    
    1,008Lease/rental income
    
    
    894
    
    
    
    618Marketing fees
    
    
    631
    
    
    
    180Irrigation revenue
    
    
    250
    
    
    
    145$
    2,497
    
    
    
    1,951
 11. Income Taxes
    14




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12.      Other Expenses and Interest and Other Income
  Three Months EndedMarch 31,2007
    
    
    2006Other expensesTitle and mortgage operations expenses
    
    $
    482
    
    
    
    626Interest and other incomeInterest income
    
    $
    719
    
    
    
    785Forfeited deposits
    
    
    1,429
    
    
    
    22Other income
    
    
    191
    
    
    
    82Total interest and other income
    
    $
    2,339
    
    
    
    889
  13. Segment Reporting
   15




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##### Table of Contents



Three Months Ended
    
    
    
    
    
    
    
    
    
    OtherMarch 31, 2007
    
    Homebuilding
    
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenuesSales of real estate
    
    $
    134,169
    
    
    
    777
    
    
    
    6,574
    
    
    
    222
    
    
    
    141,742Other revenues
    
    
    722
    
    
    
    1,502
    
    
    
    293
    
    
    
    (20
    )
    
    
    2,497Total revenues
    
    
    134,891
    
    
    
    2,279
    
    
    
    6,867
    
    
    
    202
    
    
    
    144,239Costs and expensesCost of sales of real estate
    
    
    107,603
    
    
    
    72
    
    
    
    5,501
    
    
    
    (268
    )
    
    
    112,908Selling, general and administrative
expenses
    
    
    20,305
    
    
    
    4,365
    
    
    
    8,236
    
    
    
    
    
    
    
    32,906Interest expense
    
    
    
    
    
    
    215
    
    
    
    
    
    
    
    (215
    )
    
    
    Other expenses
    
    
    482
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    482Total costs and expenses
    
    
    128,390
    
    
    
    4,652
    
    
    
    13,737
    
    
    
    (483
    )
    
    
    146,296Earnings from Bluegreen Corporation
    
    
    
    
    
    
    
    
    
    
    1,744
    
    
    
    
    
    
    
    1,744Earnings (loss) from joint ventures
    
    
    16
    
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    3Interest and other income
    
    
    1,654
    
    
    
    947
    
    
    
    258
    
    
    
    (520
    )
    
    
    2,339Income (loss) before income taxes
    
    
    8,171
    
    
    
    (1,426
    )
    
    
    (4,881
    )
    
    
    165
    
    
    
    2,029(Provision) benefit for income taxes
    
    
    (3,211
    )
    
    
    568
    
    
    
    1,864
    
    
    
    
    
    
    
    (779
    )Net income (loss)
    
    $
    4,960
    
    
    
    (858
    )
    
    
    (3,017
    )
    
    
    165
    
    
    
    1,250Inventory of real estate
    
    $
    667,195
    
    
    
    195,394
    
    
    
    10,079
    
    
    
    (36,365
    )
    
    
    836,303Total assets
    
    $
    698,419
    
    
    
    286,431
    
    
    
    173,657
    
    
    
    (37,315
    )
    
    
    1,121,192Total debt
    
    $
    427,827
    
    
    
    144,931
    
    
    
    99,006
    
    
    
    
    
    
    
    671,764
 Three Months Ended
    
    
    
    
    
    
    
    
    
    OtherMarch 31, 2006
    
    Homebuilding
    
    
    Land
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenuesSales of real estate
    
    $
    118,275
    
    
    
    7,272
    
    
    
    
    
    
    
    (4
    )
    
    
    125,543Other revenues
    
    
    1,008
    
    
    
    620
    
    
    
    337
    
    
    
    (14
    )
    
    
    1,951Total revenues
    
    
    119,283
    
    
    
    7,892
    
    
    
    337
    
    
    
    (18
    )
    
    
    127,494Costs and expensesCost of sales of real estate
    
    
    96,497
    
    
    
    5,019
    
    
    
    642
    
    
    
    (103
    )
    
    
    102,055Selling, general and administrative
expenses
    
    
    17,572
    
    
    
    2,786
    
    
    
    6,397
    
    
    
    
    
    
    
    26,755Other expenses
    
    
    626
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    626Total costs and expenses
    
    
    114,695
    
    
    
    7,805
    
    
    
    7,039
    
    
    
    (103
    )
    
    
    129,436Loss from Bluegreen Corporation
    
    
    
    
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    (49
    )Interest and other income
    
    
    177
    
    
    
    368
    
    
    
    345
    
    
    
    (1
    )
    
    
    889Income (loss) before income taxes
    
    
    4,765
    
    
    
    455
    
    
    
    (6,406
    )
    
    
    84
    
    
    
    (1,102
    )(Provision) benefit for income taxes
    
    
    (1,754
    )
    
    
    (137
    )
    
    
    2,364
    
    
    
    (31
    )
    
    
    442Net income (loss)
    
    $
    3,011
    
    
    
    318
    
    
    
    (4,042
    )
    
    
    53
    
    
    
    (660
    )Inventory of real estate
    
    $
    553,905
    
    
    
    147,910
    
    
    
    14,492
    
    
    
    (17,496
    )
    
    
    698,811Total assets
    
    $
    583,589
    
    
    
    213,109
    
    
    
    173,396
    
    
    
    (17,527
    )
    
    
    952,567Total debt
    
    $
    338,347
    
    
    
    64,350
    
    
    
    73,142
    
    
    
    
    
    
    
    475,839
 16




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14. Parent Company Financial Statements
     Condensed Statements of Financial Condition
 March 31,
    
    
    December 31,2007
    
    
    2006Total assets
    
    $
    452,936
    
    
    
    454,074Total liabilities
    
    $
    107,890
    
    
    
    110,835Total shareholders equity
    
    
    345,046
    
    
    
    343,239Total liabilities and shareholders equity
    
    $
    452,936
    
    
    
    454,074
 17




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Condensed Statements of Operations
 Three MonthsEnded March 31,2007
    
    
    2006Earnings (loss) from Bluegreen Corporation
    
    $
    1,744
    
    
    
    (49
    )Other revenues
    
    
    246
    
    
    
    331Costs and expenses
    
    
    8,265
    
    
    
    6,249Loss before income taxes
    
    
    (6,275
    )
    
    
    (5,967
    )Benefit for income taxes
    
    
    2,347
    
    
    
    2,177Net loss before undistributed earnings from consolidated
subsidiaries
    
    
    (3,927
    )
    
    
    (3,790
    )Earnings from consolidated subsidiaries, net of income taxes
    
    
    5,178
    
    
    
    3,130Net income (loss)
    
    $
    1,250
    
    
    
    (660
    )
  15. Certain Relationships and Related Party Transactions
    18




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




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Item 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   20




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Executive Overview
   Financial and Non-Financial Metrics
  21




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Homebuilding Overview
   Land Division Overview
   22




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Critical Accounting Policies and Estimates
  CONSOLIDATED RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2007
    
    
    2006
    
    
    Change(In thousands)RevenuesSales of real estate
    
    $
    141,742
    
    
    
    125,543
    
    
    
    16,199Other revenues
    
    
    2,497
    
    
    
    1,951
    
    
    
    546Total revenues
    
    
    144,239
    
    
    
    127,494
    
    
    
    16,745Costs and expensesCost of sales of real estate
    
    
    112,908
    
    
    
    102,055
    
    
    
    10,853Selling, general and administrative expenses
    
    
    32,906
    
    
    
    26,755
    
    
    
    6,151Other expenses
    
    
    482
    
    
    
    626
    
    
    
    (144
    )Total costs and expenses
    
    
    146,296
    
    
    
    129,436
    
    
    
    16,860Earnings (loss) from Bluegreen Corporation
    
    
    1,744
    
    
    
    (49
    )
    
    
    1,793Earnings from joint ventures
    
    
    3
    
    
    
    
    
    
    
    3Interest and other income
    
    
    2,339
    
    
    
    889
    
    
    
    1,450Income (loss) before income taxes
    
    
    2,029
    
    
    
    (1,102
    )
    
    
    3,131(Provision) benefit for income taxes
    
    
    (779
    )
    
    
    442
    
    
    
    (1,221
    )Net income (loss)
    
    $
    1,250
    
    
    
    (660
    )
    
    
    1,910
 For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:
  23




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24




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25




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HOMEBUILDING DIVISION RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2007
    
    
    2006
    
    
    Change(Dollars in thousands)RevenuesSales of real estate
    
    $
    134,169
    
    
    
    118,275
    
    
    
    15,894Other revenues
    
    
    722
    
    
    
    1,008
    
    
    
    (286
    )Total revenues
    
    
    134,891
    
    
    
    119,283
    
    
    
    15,608Costs and expensesCost of sales of real estate
    
    
    107,603
    
    
    
    96,497
    
    
    
    11,106Selling, general and administrative expenses
    
    
    20,305
    
    
    
    17,572
    
    
    
    2,733Other expenses
    
    
    482
    
    
    
    626
    
    
    
    (144
    )Total costs and expenses
    
    
    128,390
    
    
    
    114,695
    
    
    
    13,695Earnings from joint ventures
    
    
    16
    
    
    
    
    
    
    
    16Interest and other income
    
    
    1,654
    
    
    
    177
    
    
    
    1,477Income before income taxes
    
    
    8,171
    
    
    
    4,765
    
    
    
    3,406Provision for income taxes
    
    
    (3,211
    )
    
    
    (1,754
    )
    
    
    (1,457
    )Net income
    
    $
    4,960
    
    
    
    3,011
    
    
    
    1,949Homes delivered (units)
    
    
    362
    
    
    
    439
    
    
    
    (77
    )Construction starts (units)
    
    
    254
    
    
    
    390
    
    
    
    (136
    )Average selling price of homes delivered (a)
    
    $
    340
    
    
    
    269
    
    
    
    71Margin percentage on homes delivered (a)
    
    
    21.6
    %
    
    
    18.4
    %
    
    
    3.2
    %Net orders (units)
    
    
    159
    
    
    
    506
    
    
    
    (347
    )Net orders (value)
    
    $
    43,900
    
    
    
    169,387
    
    
    
    (125,487
    )Backlog of homes (units)
    
    
    1,045
    
    
    
    1,859
    
    
    
    (814
    )Backlog of homes (value)
    
    $
    359,029
    
    
    
    608,437
    
    
    
    (249,408
    )
 
 (a)
    
    Calculation for the three months ended March 31, 2007 excludes $11.1 million land sale,
which generated no margin. No comparable land sales occurred in the three months ended
March 31, 2006. For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:
   26




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LAND DIVISION RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2007
    
    
    2006
    
    
    Change(Dollars in thousands)RevenuesSales of real estate (a)
    
    $
    777
    
    
    
    7,272
    
    
    
    (6,495
    )Other revenues
    
    
    1,502
    
    
    
    620
    
    
    
    882Total revenues
    
    
    2,279
    
    
    
    7,892
    
    
    
    (5,613
    )Costs and expensesCost of sales of real estate
    
    
    72
    
    
    
    5,019
    
    
    
    (4,947
    )Selling, general and administrative
expenses
    
    
    4,365
    
    
    
    2,786
    
    
    
    1,579Interest expense
    
    
    215
    
    
    
    
    
    
    
    215Total costs and expenses
    
    
    4,652
    
    
    
    7,805
    
    
    
    (3,153
    )Interest and other income
    
    
    947
    
    
    
    368
    
    
    
    579(Loss) income before income taxes
    
    
    (1,426
    )
    
    
    455
    
    
    
    (1,881
    )Benefit (provision) for income taxes
    
    
    568
    
    
    
    (137
    )
    
    
    705Net (loss) income
    
    $
    (858
    )
    
    
    318
    
    
    
    (1,176
    )Acres sold
    
    
    
    
    
    
    56
    
    
    
    (56
    )Margin percentage (a)
    
    
    90.7
    %
    
    
    31.0
    %
    
    
    59.7Unsold saleable acres
    
    
    6,871
    
    
    
    7,231
    
    
    
    (360
    )Acres subject to sales contracts 
Third parties
    
    
    74
    
    
    
    195
    
    
    
    (121
    )Aggregate sales price of acres
subject to sales contracts to third
parties
    
    $
    21,124
    
    
    
    33,717
    
    
    
    (12,593
    )
 
 (a)
    
    For the three months ended March 31, 2007, there were no land sales
recorded. Sales of real estate and margin percentage relate to revenues from look
back provisions and recognition of deferred revenue associated with sales in prior periods.   28




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For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:
      29




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OTHER OPERATIONS RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2007
    
    
    2006
    
    
    Change(In thousands)RevenuesSales of real estate
    
    $
    6,574
    
    
    
    
    
    
    
    6,574Other revenues
    
    
    293
    
    
    
    337
    
    
    
    (44
    )Total revenues
    
    
    6,867
    
    
    
    337
    
    
    
    6,530Costs and expensesCost of sales of real estate
    
    
    5,501
    
    
    
    642
    
    
    
    4,859Selling, general and administrative expenses
    
    
    8,236
    
    
    
    6,397
    
    
    
    1,839Total costs and expenses
    
    
    13,737
    
    
    
    7,039
    
    
    
    6,698Earnings (loss) from Bluegreen Corporation
    
    
    1,744
    
    
    
    (49
    )
    
    
    1,793Loss from real estate joint ventures
    
    
    (13
    )
    
    
    
    
    
    
    (13
    )Interest and other income
    
    
    258
    
    
    
    345
    
    
    
    (87
    )Loss before income taxes
    
    
    (4,881
    )
    
    
    (6,406
    )
    
    
    1,525Benefit for income taxes
    
    
    1,864
    
    
    
    2,364
    
    
    
    (500
    )Net loss
    
    $
    (3,017
    )
    
    
    (4,042
    )
    
    
    1,025
  30




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For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:
       31




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FINANCIAL CONDITION
 March 31, 2007 compared to December 31, 2006
  
    
    a net increase in cash and cash equivalents of $12.2 million, which resulted from
cash provided by financing activities, offset by cash used in operations and investing
activities;
    
    a net increase in inventory of real estate of approximately $14.3 million resulting
from increases in land development and construction costs by our Homebuilding and
Land Divisions;
    
    a decrease in notes receivable of $4.1 million due to the repayment of a note
associated with a Land Division sale; and
    
    an increase of $8.8 million in property and equipment associated with increased
investment in commercial properties under construction by our Land Division, and
support for infrastructure in our master planned communities.
   
    
    a net increase in notes and mortgage notes payable of $56.1 million, primarily
related to project debt associated with development activities;
    
    a decrease of $10.3 million in customer deposits reflecting fewer orders for new
homes;
    
    a decrease in the current tax liability of approximately $2.9 million relating to
the payment of 2006 annual taxes offset in part by our current provision for income
tax; and
    
    a net decrease in other accrued liabilities of approximately $14.1 million
attributable to decreased incentive compensation accruals, decreased construction
related accruals, and decreased professional services accruals related to the
consultants retained in 2006 for our technology updgrade.
 LIQUIDITY AND CAPITAL RESOURCES
  32




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Operating Activities.
  Investing Activities.
 Financing Activities.
 33




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34




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Off Balance Sheet Arrangements and Contractual Obligations
   Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory (2)
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations (1)
    
    $
    671,764
    
    
    
    22,851
    
    
    
    406,102
    
    
    
    228,976
    
    
    
    13,835Operating lease obligations
    
    
    7,661
    
    
    
    2,358
    
    
    
    2,916
    
    
    
    979
    
    
    
    1,408Purchase obligations
    
    
    14,220
    
    
    
    14,220
    
    
    
    
    
    
    
    
    
    
    
    Total Obligations
    
    $
    693,645
    
    
    
    39,429
    
    
    
    409,018
    
    
    
    229,955
    
    
    
    15,243
 
 (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.   35




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##### Table of Contents



Item 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
   NEW ACCOUNTING PRONOUNCEMENTS
  
 Item 4.
    
    CONTROLS AND PROCEDURES
     36




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PART II  OTHER INFORMATION
 
 Item 1.
    
    LEGAL PROCEEDINGS
  
 Item 1A.
    
    RISK FACTORS
  
 Item 6.
    
    EXHIBITS
  Exhibit 31.1*
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31.2*
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31.3*
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 32.1*
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.Exhibit 32.2*
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.Exhibit 32.3*
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Exhibits filed with this Form 10-Q 37




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LEVITT CORPORATIONDate: May 10, 2007
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive OfficerDate: May 10, 2007
    By:
    /s/  George P. ScanlonGeorge P. Scanlon, Executive Vice President,Chief Financial OfficerDate: May 10, 2007
    By:
    /s/  Jeanne T. PraytherJeanne T. Prayther, Chief Accounting Officer 38