##### Table of Contents



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, 2004 [  ] 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 [  ] Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X] Indicate the number of shares outstanding for each of the Registrants classes
of common stock, as of May 12, 2004: 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
 1




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Levitt Corporation and Subsidiaries
Index to Consolidated Financial Statements  
 PART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Consolidated Statements of Financial Condition as of March 31, 2004 and December 31, 2003  UnauditedConsolidated Statements of Operations for the three month periods ended March 31, 2004 and 2003  UnauditedConsolidated Statements of Comprehensive Income for the three month periods ended March 31, 2004 and 2003  UnauditedConsolidated Statements of Shareholders Equity for the three month period ended March 31, 2004  UnauditedConsolidated Statements of Cash Flows for the three month periods ended March 31, 2004 and 2003  UnauditedNotes to Unaudited Consolidated Financial StatementsItem 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3.
    
    Quantitative and Qualitative Disclosures about Market RiskItem 4.
    
    Controls and ProceduresPART II.
    
    OTHER INFORMATIONItem 6.
    
    Exhibits and Reports on Form 8-KSIGNATURESSec 302 Chief Executive Officer CertificationSec 302 Chief Financial Officer CertificationSec 906 Chief Executive Officer CertificationSec 906 Chief Financial Officer Certification
  2




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Levitt Corporation 
 Consolidated Statements of Financial Condition  Unaudited
 (In thousands except share data)
 March 31,
    
    December 31,2004
    
    2003AssetsCash and cash equivalents
    
    $
    45,851
    
    
    
    35,965Restricted cash
    
    
    3,600
    
    
    
    3,384Notes receivable
    
    
    4,988
    
    
    
    5,163Inventory of real estate
    
    
    268,410
    
    
    
    257,556Investments in real estate joint ventures
    
    
    6,275
    
    
    
    4,106Investment in Bluegreen Corporation
    
    
    72,496
    
    
    
    70,852Other assets
    
    
    17,109
    
    
    
    15,034Deferred tax asset, net
    
    
    
    
    
    
    654Total assets
    
    $
    418,729
    
    
    
    392,714Liabilities and Shareholders EquityAccounts payable and accrued liabilities
    
    $
    40,637
    
    
    
    39,987Customer deposits
    
    
    58,797
    
    
    
    52,134Current income tax payable
    
    
    8,018
    
    
    
    1,024Notes and mortgage notes payable
    
    
    111,512
    
    
    
    111,625Notes and mortgage notes payable
to affiliates
    
    
    60,630
    
    
    
    61,618Development bonds payable
    
    
    764
    
    
    
    850Deferred tax liability, net
    
    
    74
    
    
    
    Total liabilities
    
    
    280,432
    
    
    
    267,238Minority interest in consolidated real estate joint ventures
    
    
    59
    
    
    
    24Shareholders 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: 13,597,166 and 13,597,166 shares, respectively
    
    
    136
    
    
    
    136Class B Common Stock, $0.01 par valueAuthorized: 10,000,000 sharesIssued and outstanding: 1,219,031 and 1,219,031 shares, respectively
    
    
    12
    
    
    
    12Additional paid-in capital
    
    
    67,678
    
    
    
    67,855Retained earnings
    
    
    70,075
    
    
    
    57,020Accumulated other comprehensive income
    
    
    337
    
    
    
    429Total shareholders equity
    
    
    138,238
    
    
    
    125,452Total liabilities and shareholders equity
    
    $
    418,729
    
    
    
    392,714
 See accompanying notes to unaudited consolidated financial statements. 3




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Levitt Corporation 
 Consolidated Statements of Operations  Unaudited
 For the Three Months Ended March 31, 2004 and 2003
 (In thousands, except per share data)
 Three MonthsEnded March 31,2004
    
    2003Revenues:Sales of real estate
    
    $
    98,523
    
    
    
    52,964Title and mortgage operations
    
    
    970
    
    
    
    404Total revenues
    
    
    99,493
    
    
    
    53,368Costs and expenses:Cost of sales of real estate
    
    
    69,665
    
    
    
    39,524Selling, general and administrative expenses
    
    
    14,047
    
    
    
    8,020Interest expense, net
    
    
    58
    
    
    
    241Other expenses
    
    
    616
    
    
    
    292Minority interest
    
    
    25
    
    
    
    121Total costs and expenses
    
    
    84,411
    
    
    
    48,19815,082
    
    
    
    5,170Earnings (loss) from Bluegreen Corporation
    
    
    2,086
    
    
    
    (134
    )Earnings (loss) from real estate joint ventures
    
    
    3,607
    
    
    
    (313
    )Interest and other income
    
    
    478
    
    
    
    646Income before income taxes
    
    
    21,253
    
    
    
    5,369Provision for income taxes
    
    
    8,198
    
    
    
    2,075Net income
    
    $
    13,055
    
    
    
    3,294Earnings per common share:Basic
    
    $
    0.88
    
    
    
    0.22Diluted
    
    $
    0.87
    
    
    
    0.22Weighted average common shares outstanding:Basic
    
    
    14,816
    
    
    
    14,816Diluted
    
    
    14,852
    
    
    
    14,816
 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 31,2004
    
    2003Net income
    
    $
    13,055
    
    
    
    3,294Other comprehensive income:Pro-rata share of unrealized (loss) gain
recognized by Bluegreen on retained
interests in notes receivable sold, net of tax
    
    
    (92
    )
    
    
    406Comprehensive income
    
    $
    12,963
    
    
    
    3,700
 See accompanying notes to unaudited consolidated financial statements. 5




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Levitt Corporation 
 Consolidated Statements of Shareholders Equity  Unaudited
 For the Three Months Ended March 31, 2004
 (In thousands)
 AccumulatedCompre-Class A
    
    Class B
    
    Additional
    
    
    
    
    
    hensiveCommon
    
    Common
    
    Paid-In
    
    Retained
    
    IncomeStock
    
    Stock
    
    Capital
    
    Earnings
    
    (Loss)
    
    TotalBalance at December 31, 2003
    
    $
    136
    
    
    
    12
    
    
    
    67,855
    
    
    
    57,020
    
    
    
    429
    
    
    
    125,452Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,055
    
    
    
    
    
    
    
    13,055Other comprehensive income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (92
    )
    
    
    (92
    )Issuance of Bluegreen common
stock, net of tax
    
    
    
    
    
    
    
    
    
    
    (177
    )
    
    
    
    
    
    
    
    
    
    
    (177
    )Balance at March 31, 2004
    
    $
    136
    
    
    
    12
    
    
    
    67,678
    
    
    
    70,075
    
    
    
    337
    
    
    
    138,238
 See accompanying notes to unaudited consolidated financial statements. 6




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Levitt Corporation 
 Consolidated Statements of Cash Flows  Unaudited
 (In thousands)
 Three MonthsEnded March 31,2004
    
    2003Operating activities:Net income
    
    $
    13,055
    
    
    
    3,294Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    252
    
    
    
    102Minority interest expense
    
    
    25
    
    
    
    121Increase in deferred income taxes
    
    
    901
    
    
    
    502(Earnings) loss from Bluegreen Corporation
    
    
    (2,086
    )
    
    
    134(Earnings) loss from real estate joint ventures
    
    
    (3,607
    )
    
    
    313Write-off of debt offering costs
    
    
    117
    
    
    
    Changes in operating assets and liabilities:Increase in restricted cash
    
    
    (216
    )
    
    
    (43
    )Increase in inventory of real estate
    
    
    (10,854
    )
    
    
    (16,143
    )Decrease (increase) in notes receivable
    
    
    175
    
    
    
    (123
    )Increase in other assets
    
    
    (2,134
    )
    
    
    (1,089
    )Increase in accounts payable,
accrued expenses and other liabilities
    
    
    14,307
    
    
    
    7,538Net cash provided by (used in) operating activities
    
    
    9,935
    
    
    
    (5,394
    )Investing activities:Investment in real estate joint ventures
    
    
    (35
    )
    
    
    (536
    )Distributions from real estate joint ventures
    
    
    1,473
    
    
    
    391Other
    
    
    (193
    )
    
    
    (133
    )Net cash provided by (used in) investing activities
    
    
    1,245
    
    
    
    (278
    )Financing activities:Proceeds from notes and mortgage notes payable
    
    
    35,525
    
    
    
    42,916Proceeds from notes and mortgage notes payable to affiliates
    
    
    10,167
    
    
    
    7,732Repayment of notes and mortgage notes payable
    
    
    (35,638
    )
    
    
    (24,041
    )Repayment of notes and mortgage notes payable to affiliates
    
    
    (11,155
    )
    
    
    (9,014
    )Repayment of development bonds payable
    
    
    (86
    )
    
    
    (3,095
    )Debt issue costs
    
    
    (117
    )
    
    
    Change in minority interest in consolidated real estate joint ventures
    
    
    10
    
    
    
    75Net cash (used in) provided by financing activities
    
    
    (1,294
    )
    
    
    14,573Increase in cash and cash equivalents
    
    
    9,886
    
    
    
    8,901Cash and cash equivalents at the beginning of period
    
    
    35,965
    
    
    
    16,014Cash and cash equivalents at end of period
    
    $
    45,851
    
    
    
    24,915
 (Continued) 7




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Levitt Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands) Three MonthsEnded March 31,2004
    
    2003Supplemental cash flow informationInterest paid on borrowings
    
    $
    1,767
    
    
    
    2,261Income taxes paid
    
    $
    300
    
    
    
    1,286Supplemental disclosure of non-cash operating,
investing and financing activities:Change in shareholders equity resulting from the change
in other comprehensive (loss) gain, net of taxes
    
    $
    (92
    )
    
    
    406Change in shareholders equity from the net effect
of Bluegreens capital transactions, net of taxes
    
    $
    (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 (the Company) is the parent company to other entities
operating in the real estate development and homebuilding industries. The
Company engages in real estate activities through Levitt and Sons, LLC, a
developer of single family home communities and condominiums (Levitt and
Sons); Core Communities, LLC, a land and master-planned community developer
(Core Communities); an equity investment in Bluegreen Corporation, 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
(Bluegreen); and other operations which include Levitt Commercial, LLC, a
developer of commercial properties (Levitt Commercial), and investments in
real estate joint ventures. The accompanying unaudited consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. 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, 2004 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2004. 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, 2003. 2. Stock Based Compensation The Company 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 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 earnings per share if
the Company had applied the fair value recognition provisions of SFAS No. 123,
Accounting for Stock-Based Compensation, as amended SFAS 148, Accounting for
Stock-Based compensation  Transition and Disclosure, to stock-based employee
compensation (in thousands, except per share data): For the Three MonthsEnded March 31,2004
    
    2003Pro forma net incomeNet income, as reported
    
    $
    13,055
    
    
    
    3,294Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related income tax
effects and minority interest
    
    
    (407
    )
    
    
    Pro forma net income
    
    $
    12,648
    
    
    
    3,294Basic earnings per share:As reported
    
    $
    0.88
    
    
    
    0.22Pro forma
    
    $
    0.85
    
    
    
    0.22Diluted earnings per share:As reported
    
    $
    0.87
    
    
    
    0.22Pro forma
    
    $
    0.84
    
    
    
    0.22
 3. Inventory of Real Estate Inventory of real estate is summarized as follows (in thousands): March 31,
    
    December 31,2004
    
    2003Land and land development costs
    
    $
    164,536
    
    
    
    174,142Construction cost
    
    
    89,382
    
    
    
    67,895Other costs
    
    
    14,492
    
    
    
    15,519$
    268,410
    
    
    
    257,556
 10




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4. Interest Interest incurred relating to land under development and construction is
capitalized to real estate inventories 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 stage and the periods
that projects are under development. Capitalization of interest is
discontinued if development ceases at a project. Interest is amortized to cost
of sales as related homes, land and units are sold. The following table is a
summary of interest incurred on notes and mortgage notes payable and the
amounts capitalized (in thousands): Three Months EndedMarch 31,2004
    
    2003Interest incurred to non-affiliates
    
    $
    1,360
    
    
    
    1,556Interest incurred to affiliates
    
    
    634
    
    
    
    600Interest capitalized
    
    
    (1,936
    )
    
    
    (1,915
    )Interest expense, net
    
    $
    58
    
    
    
    241Interest included in cost of sales
    
    $
    1,800
    
    
    
    1,202
 5. Investment in Bluegreen Corporation During April 2002, the Company acquired approximately 8.3 million shares
of the outstanding common stock of Bluegreen for an aggregate purchase price of
approximately $53.8 million. In December 2003, the Company acquired an
additional 1.2 million shares of Bluegreen from BankAtlantic Bancorp in
exchange for a $5.5 million one year note (which was subsequently repaid in
April 2004) and additional shares of the Companys common stock. The Company
accounts for its investment in Bluegreen under the equity method. The cost of
this investment is adjusted to recognize the Companys interest in the earnings
or losses of Bluegreen subsequent to the acquisition. As of March 31, 2004,
the Companys investment represented approximately 37% of the outstanding
common stock of Bluegreen. Bluegreens condensed balance sheets and condensed statements of income
are as follows (in thousands): Condensed Consolidated Balance Sheet March 31,
    
    December 31,2004
    
    2003Total assets
    
    $
    577,934
    
    
    
    570,406Total liabilities
    
    
    375,512
    
    
    
    378,878Minority interest
    
    
    5,465
    
    
    
    4,648Total shareholders equity
    
    
    196,957
    
    
    
    186,880Total liabilities and shareholders equity
    
    $
    577,934
    
    
    $
    570,406
 11




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Condensed Consolidated Statements of Income Three Months EndedMarch 31,
    
    March 31,2004
    
    2003Revenues
    
    $
    107,217
    
    
    
    80,882Cost and expenses
    
    
    98,745
    
    
    
    76,967Income before minority interest and
provision for income taxes
    
    
    8,472
    
    
    
    3,915Minority interest
    
    
    829
    
    
    
    457Income before provision for income taxes
    
    
    7,643
    
    
    
    3,458Provision for income taxes
    
    
    2,943
    
    
    
    1,331Net income
    
    $
    4,700
    
    
    $
    2,127
 6. Notes and Mortgage Notes Payable On September 30, 2003 the SEC declared effective the Companys
Registration Statement on Form S-1 for the public offering of up to $100
million of unsecured subordinated investment notes. The investment notes are
unsecured obligations of the Company and are subordinated to substantially all
other liabilities. In late 2003, the Company ceased advertising the offering,
and in March 2004, the unsold notes were deregistered. Approximately $3.2
million of investment notes were outstanding as of March 31, 2004. 7. Commitments and Contingencies At March 31, 2004, the Company had $156.4 million of commitments to
purchase properties for development, approximately $12.5 million of which is
subject to due diligence and satisfaction of certain requirements and
conditions, including financing contingencies. The following table summarizes
certain information relating to outstanding purchase contracts. Purchase
    
    Units/
    
    ExpectedPrice
    
    Acres
    
    ClosingLevitt and Sons
    
    $
    75.0
    million
    
    4,520 units
    
    
    2004Core Communities
    
    $
    80.6
    million
    
    4,456 acres
    
    
    2004Levitt Commercial
    
    $
    836,000
    
    
    22 units
    
    
    2004
 At March 31, 2004, cash deposits of approximately $4.3 million secured the
Companys commitments under these contracts. Included in the table above are
$23.5 million of commitments by Levitt and Sons to purchase properties from
Core Communities in arms-length transactions. 12




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8. Litigation On December 29, 2000, Smith & Company, Inc. (Smith) filed an action
against Levitt-Ansca Towne Partnership, a Florida limited partnership
(Partnership), Bellaggio by Levitt Homes, Inc., a Florida corporation and a
wholly owned subsidiary of Levitt and Sons, LLC which holds a 50% interest in
the Partnership (BLHI, now known as Bellaggio by Levitt and Sons, LLC, a
Florida limited liability company), Bellaggio by Ansca, Inc., a/k/a Bellaggio
by Ansca Homes, Inc., and Liberty Mutual Insurance Company (collectively, the
foregoing parties are Defendants). The suit arose out of an August 2000
contract between Smith and the Partnership. The Complaint alleged, among other
things, wrongful termination, breach and failure to pay for extra work
performed outside the scope of the contract. The Partnership denied the
claims, asserted defenses and asserted a number of counterclaims. The case was
tried before a jury, and on March 7, 2002, the jury returned a verdict against
the Partnership. The court entered a judgment of $3.68 million against the
Defendants of which BLHIs share of potential liability is estimated at $2.6
million. The Partnership appealed the verdict, and on April 14, 2004 the
District Court of Appeal in the Fourth District in the State of Florida
reversed the judgment with respect to damages and remanded the case back to the
trial court for a re-trial on damages only. At March 31, 2004, the Companys
financial statements included a $2.6 million accrual in other liabilities
associated with this suit and $3.6 million in restricted cash to secure the
appeal bond previously posted. 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 four reportable business segments: Levitt and
Sons, Core Communities, Investment in Bluegreen, and Other Operations. The
Company evaluates segment performance primarily based on net income after tax.
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. The
elimination entries consist primarily of inter-company sales of real estate
between Core Communities and Levitt and Sons and the cost of sales associated
with those transactions, recorded in each case 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. 13




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The tables below present unaudited segment information as of and for the
three months ended March 31, 2004 and 2003 (in thousands). Levitt and
    
    Core
    
    Investment
    
    Other2004
    
    Sons
    
    Communities
    
    in Bluegreen
    
    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
    
    
    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
    )
    
    
    84,4118,250
    
    
    
    8,707
    
    
    
    
    
    
    
    (2,380
    )
    
    
    505
    
    
    
    15,082Earnings from Bluegreen Corporation
    
    
    
    
    
    
    
    
    
    
    2,086
    
    
    
    
    
    
    
    
    
    
    
    2,086Earnings from real estate joint ventures
    
    
    1,509
    
    
    
    
    
    
    
    
    
    
    
    2,098
    
    
    
    
    
    
    
    3,607Interest and other income
    
    
    43
    
    
    
    405
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    478Income (loss) before income taxes
    
    
    9,802
    
    
    
    9,112
    
    
    
    2,086
    
    
    
    (252
    )
    
    
    505
    
    
    
    21,253Provision (benefit) for income taxes
    
    
    3,781
    
    
    
    3,515
    
    
    
    805
    
    
    
    (98
    )
    
    
    195
    
    
    
    8,198Net income (loss)
    
    $
    6,021
    
    
    
    5,597
    
    
    
    1,281
    
    
    
    (154
    )
    
    
    310
    
    
    
    13,055Inventory of real estate
    
    $
    221,189
    
    
    
    43,594
    
    
    
    
    
    
    
    8,638
    
    
    
    (5,011
    )
    
    
    268,410Total assets
    
    $
    246,338
    
    
    
    89,149
    
    
    
    72,496
    
    
    
    15,757
    
    
    
    (5,011
    )
    
    
    418,729Notes, mortgage notes and bonds payable
    
    $
    100,248
    
    
    
    15,022
    
    
    
    
    
    
    
    57,637
    
    
    
    
    
    
    
    172,906
 Levitt and
    
    Core
    
    Investment
    
    Other2003
    
    Sons
    
    Communities
    
    in Bluegreen
    
    Operations
    
    Eliminations
    
    TotalRevenues:Sales of real estate
    
    $
    37,633
    
    
    
    11,909
    
    
    
    
    
    
    
    3,422
    
    
    
    
    
    
    
    52,964Title and mortgage operations
    
    
    404
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    404Total revenues
    
    
    38,037
    
    
    
    11,909
    
    
    
    
    
    
    
    3,422
    
    
    
    
    
    
    
    53,368Costs and expenses:Cost of sales of real estate
    
    $
    29,153
    
    
    
    7,226
    
    
    
    
    
    
    
    3,145
    
    
    
    
    
    
    
    39,524Selling, general and administrative
    
    
    5,937
    
    
    
    1,252
    
    
    
    
    
    
    
    831
    
    
    
    
    
    
    
    8,020Interest expense, net
    
    
    
    
    
    
    233
    
    
    
    
    
    
    
    8
    
    
    
    
    
    
    
    241Other expenses
    
    
    292
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    292Minority Interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121
    
    
    
    
    
    
    
    121Total costs and expenses
    
    
    35,382
    
    
    
    8,711
    
    
    
    
    
    
    
    4,105
    
    
    
    
    
    
    
    48,1982,655
    
    
    
    3,198
    
    
    
    
    
    
    
    (683
    )
    
    
    
    
    
    
    5,170Loss from Bluegreen Corporation
    
    
    
    
    
    
    
    
    
    
    (134
    )
    
    
    
    
    
    
    
    
    
    
    (134
    )Loss from real estate joint ventures
    
    
    (141
    )
    
    
    
    
    
    
    
    
    
    
    (172
    )
    
    
    
    
    
    
    (313
    )Interest and other income
    
    
    118
    
    
    
    431
    
    
    
    
    
    
    
    97
    
    
    
    
    
    
    
    646Income (loss) before income taxes
    
    
    2,632
    
    
    
    3,629
    
    
    
    (134
    )
    
    
    (758
    )
    
    
    
    
    
    
    5,369Provision (benefit) for income taxes
    
    
    1,019
    
    
    
    1,400
    
    
    
    (52
    )
    
    
    (292
    )
    
    
    
    
    
    
    2,075Net income (loss)
    
    $
    1,613
    
    
    
    2,229
    
    
    
    (82
    )
    
    
    (466
    )
    
    
    
    
    
    
    3,294Inventory of real estate
    
    $
    162,837
    
    
    
    53,140
    
    
    
    
    
    
    
    4,833
    
    
    
    (6,541
    )
    
    
    214,269Total assets
    
    $
    182,809
    
    
    
    79,872
    
    
    
    57,866
    
    
    
    6,509
    
    
    
    (5,635
    )
    
    
    321,421Notes, mortgage notes and bonds payable
    
    $
    104,982
    
    
    
    14,876
    
    
    
    
    
    
    
    42,112
    
    
    
    
    
    
    
    161,970
 14




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10. Parent Company Financial Statements Condensed Statements of Financial Condition at March 31, 2004 and December
31, 2003, and Condensed Statements of Operations for the three months ended
March 31, 2004 and 2003 are shown below (in thousands): Condensed Statements of Financial Condition March 31,
    
    December 31,2004
    
    2003Total assets
    
    $
    195,678
    
    
    
    181,808Total liabilities
    
    
    57,440
    
    
    
    56,356Total shareholders equity
    
    
    138,238
    
    
    
    125,452Total liabilities and shareholders equity
    
    $
    195,678
    
    
    
    181,808
 Condensed Statements of Operations Three MonthsEnded March 31,2004
    
    2003Revenues
    
    $
    12
    
    
    
    9Costs and expenses
    
    
    2,157
    
    
    
    895Loss before income taxes
    
    
    (2,145
    )
    
    
    (886
    )Benefit for income taxes
    
    
    (827
    )
    
    
    (342
    )Loss before equity from income in
wholly owned subsidiaries, net of tax
    
    
    (1,317
    )
    
    
    (544
    )Earnings from wholly owned subsidiaries,
net of tax
    
    
    11,802
    
    
    
    4,026Earnings (loss) from Bluegreen, net of tax
    
    
    1,281
    
    
    
    (82
    )Earnings (loss) from real estate joint ventures, net of tax
    
    
    1,289
    
    
    
    (106
    )Net income
    
    $
    13,055
    
    
    
    3,294
 Cash dividends received from subsidiaries for the three months ended March
31, 2004 and 2003 were $914,000 and $1.4 million, respectively. Some
subsidiaries borrowings contain covenants that, among other things, have the
effect of limiting dividends that can be paid. 15




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##### Table of Contents



11. New Accounting Pronouncements In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, Consolidation of Variable Interest Entities (FIN
46). In December 2003, the FASB issued Interpretation No. 46 (revised
December 2003), Consolidation of Variable Interest Entities (FIN 46R),
which replaces FIN 46. FIN 46R addresses how a business enterprise should
evaluate whether it has a controlling interest in an entity through means other
than voting rights. This interpretation requires a variable interest entity to
be consolidated by a company if that company is subject to a majority of the
risk of loss from the variable interest entitys activities or is entitled to
receive a majority of the entitys residual returns or both. The
interpretation also requires disclosures about variable interest entities for
which consolidation is not required but in which a company has a significant
variable interest. The Company has adopted FIN 46R and concluded that there
are no variable interest entities for which consolidation or additional
disclosure is required. 12. Subsequent Events In April 2004 the Company sold 5,000,000 shares of its Class A common
stock pursuant to a registered underwritten offering at $24.50 per share. Net
proceeds from the sale totaled approximately $115.0 million, after underwriting
discounts, commissions and offering expenses. Approximately $12.0 million of
the net proceeds of the offering were used to repay indebtedness, $7.3 million
were used to fund the Bowden acquisition described below, and $67.0 million
were transferred to the Companys operating subsidiaries. The Companys
management expects to use the balance of the proceeds to fund the Companys
operations and growth and for general corporate purposes. On April 28, 2004 the Company acquired all of the capital stock of Bowden
Building Corporation, a homebuilder located in Memphis, Tennessee (Bowden)
for approximately $7.3 million in cash. The acquisition of Bowden will be
accounted for as a purchase. The allocation of the fair value of the assets
acquired and liabilities assumed in connection with the purchase of Bowden had
not been completed as of the date of these financial statements. 16




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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) for the three months
ended March 31, 2004 and 2003, respectively. (As used herein, the Company may
also be referred to as we, us, or our.) We engage in real estate
activities through Levitt and Sons, Core Communities, an investment in
Bluegreen and other operations, which other operations include Levitt
Commercial and investments in real estate projects through subsidiaries and
joint ventures. Levitt and Sons is a developer of single-family home
communities and condominium and rental apartment complexes. Levitt and Sons and
its predecessors have built more than 200,000 homes since 1929. Core
Communities developed the 4,600-acre master-planned community known as St.
Lucie West in St. Lucie County, Florida, and is currently developing Tradition,
its second master-planned community. Tradition is planned to include more than
9,000 acres, including approximately five miles of frontage on Interstate 95,
and is in the initial development stage in St. Lucie County, Florida.
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. Levitt Commercial specializes in the
development and management of industrial, commercial and retail properties. In
April 2004 we acquired Bowden Building Corporation, a homebuilder located in
Memphis, Tennessee (Bowden). 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: general economic and market
conditions, including interest rate levels; our ability to service our
substantial indebtedness; inherent risks in investment in real estate;
fluctuations in operating results; our anticipated growth strategies;
shortages and increased costs of labor and building materials; competition in
the real estate development industry; availability and cost of land in
desirable areas; natural disasters; our ability to raise debt and equity
capital and grow our operations on a profitable basis; our ability to
successfully integrate Bowden; and our continuing relationship with
affiliates. Many of these factors are beyond our control. In addition to the
risks and factors identified above, reference is also made to other risks and
factors detailed in reports filed by the Company with the SEC. The Company
cautions that the foregoing factors are not exclusive. 17




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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 of homes delivered, number and value of sales contracts executed, and
the number of housing starts. 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 a pending 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 by
management when evaluating the Companys future prospects, as are general
economic factors and interest rate trends which may have an impact on the
Companys prospects. 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. In April 2004 we completed the underwritten public offering of a total of
5,000,000 shares of Class A common stock at a public offering price of $24.50
per share. Net proceeds from the offering totaled approximately $115.0
million, after underwriting discounts, commissions and offering expenses.
Approximately $12.0 million of the net proceeds of the offering were used to
repay indebtedness, $7.3 million were used to fund the Bowden acquisition and
$67.0 million were transferred to our operating subsidiaries to provide funds
for their growth. The balance of the funds will be used to fund our operations
and growth and for general corporate purposes. On April 28, 2004, Levitt acquired all of the capital stock of Bowden.
Founded in 1971, Bowden is believed to have been the largest homebuilder in the
metropolitan Memphis area for the last six consecutive years, and delivered 420
new homes in 2003. Impact of Inflation and Rising Interest Rates Our businesses are impacted by cyclical pressures associated with economic
expansion, including rising inflation, rising commodity prices and rising
interest rates. Inflationary pressures, including further increases in
commodity prices, could negatively affect our results of operations by
increasing land, land development and construction costs. In recent months,
the costs of lumber, steel, concrete, asphalt and other building materials have
risen significantly. Historically, we have managed our costs, in part, through
use of short-term fixed price contracts with our subcontractors and our
material suppliers, but this may not be possible going forward. Further, we enter into fixed-price sales contracts for homes before we
start construction; accordingly, rising construction costs may negatively
affect our margins in the future. Owing to strong demand for our housing
products and the overall robust condition of the real estate markets in Florida
where we build, we have historically been able to offset the increases in
construction costs and land prices through periodic increases in the selling
prices of our homes and our home sites. If we are unable to increase our home
prices over the long term to offset increased costs, our operating results
would be adversely affected. 18




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##### Table of Contents



Rising interest rates affect our costs, as we rely on third party
financing to purchase and develop land. Additionally, rising interest rates
increase the mortgage costs of our customers who finance their purchases, and
rising interest rates have historically had an adverse impact on housing
demand. If housing demand is adversely affected, land may remain in our
inventory longer, thereby raising our borrowing costs. Also, demand for
housing may be adversely affected by rising home prices. Although we are not
currently experiencing any adverse effects from higher interest rates, higher
interest rates may adversely affect our results of operations. Critical Accounting Policies and Estimates Management views critical accounting policies as accounting policies that
are important to the understanding of our financial statements and also involve
estimates and judgments about inherently uncertain matters. In preparing the
financial statements, management is required to make 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
determination of the valuation of real estate, the valuation of carrying values
of investments in real estate joint ventures, the valuation of the fair market
value of assets and liabilities in the application of the purchase method of
accounting and the amount of the deferred tax asset valuation allowance. The
accounting policies that we have identified as critical to the portrayal of our
financial condition and results of operations are: (i) real estate inventories;
(ii) investments in real estate joint ventures and other equity investments;
(iii) revenue recognition; (iv) capitalized interest; and (v) income taxes.
For a more detailed discussion of these critical accounting policies see
Critical Accounting Policies appearing in our Annual Report of Form 10-K for
the year ended December 31, 2003. CONSOLIDATED RESULTS OF OPERATIONS Three MonthsEnded March 31,2004
    
    2003
    
    Change(In thousands)
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    98,523
    
    
    
    52,964
    
    
    
    45,559Title and mortgage operations
    
    
    970
    
    
    
    404
    
    
    
    566Total revenues
    
    
    99,493
    
    
    
    53,368
    
    
    
    46,125Costs and expensesCost of sales of real estate
    
    
    69,665
    
    
    
    39,524
    
    
    
    30,141Selling, general and administrative expenses
    
    
    14,047
    
    
    
    8,020
    
    
    
    6,027Interest expense, net
    
    
    58
    
    
    
    241
    
    
    
    (183
    )Other expenses
    
    
    616
    
    
    
    292
    
    
    
    324Minority interest
    
    
    25
    
    
    
    121
    
    
    
    (96
    )Total costs and expenses
    
    
    84,411
    
    
    
    48,198
    
    
    
    36,21315,082
    
    
    
    5,170
    
    
    
    9,912Earnings (loss) from Bluegreen Corporation
    
    
    2,086
    
    
    
    (134
    )
    
    
    2,220Earnings (loss) from real estate joint ventures
    
    
    3,607
    
    
    
    (313
    )
    
    
    3,920Interest and other income
    
    
    478
    
    
    
    646
    
    
    
    (168
    )Income before income taxes
    
    
    21,253
    
    
    
    5,369
    
    
    
    15,884Provision for income taxes
    
    
    8,198
    
    
    
    2,075
    
    
    
    6,123
 19




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##### Table of Contents



Three MonthsEnded March 31,2004
    
    2003
    
    Change(In thousands)
    
    ( U n a u d i t e d )Net income
    
    $
    13,055
    
    
    
    3,294
    
    
    
    9,761Basic earnings per share
    
    $
    0.88
    
    
    $
    0.22
    
    
    $
    0.66Diluted earnings per share
    
    $
    0.87
    
    
    $
    0.22
    
    
    $
    0.65Weighted average shares outstanding
    
    
    14,816
    
    
    
    14,816
    
    
    
    Diluted shares outstanding
    
    
    14,852
    
    
    
    14,816
    
    
    
    36
 For the Three Months Ended March 31, 2004 Compared to the Same 2003 Period: Consolidated net income increased $9.8 million, or 296% for the three
months ended March 31, 2004 as compared to the same period in 2003. The
increase in net income primarily resulted from an increase in sales of real
estate by our homebuilding and land development operations, from higher
earnings from Bluegreen Corporation and from an increase in our earnings from
our real estate joint venture activities. Our revenues from sales of real estate increased 86% to $98.5 million for
the quarter ended March 31, 2004 from $53.0 million for the same 2003 period.
This increase is attributable primarily to an increase in home deliveries from
162 homes delivered in the first quarter of 2003 to 341 homes delivered in the
first quarter of 2004. During the three months ended March 31, 2004, land sales
revenue also increased 62% to $19.3 million for the first quarter of 2004 from
$11.9 million for the first quarter of 2003. This increase reflects the
commencement of deliveries of land parcels in Tradition, our newest
master-planned community. Profits on inter-company transactions are deferred
until the properties are delivered to unaffiliated parties, at which time the
deferred profit is applied against consolidated cost of sales. Consolidated
cost of sales was reduced by approximately $505,000 in the first three months
of 2004 reflecting the recognition of previously deferred profits which arose
from sales of land by Core Communities to Levitt and Sons. No previously
deferred profits were recognized during the first three months of 2003. Selling, general and administrative expenses increased during the first
quarter of 2004 compared to the same 2003 period primarily as a result of
higher employee compensation and benefits (including sales commissions), and
increased advertising expenses. The increase in employee compensation and
benefits and advertising expenses was directly related to our new development
projects in central and southeast Florida, as well as to the increase in our
home deliveries. The number of our full time employees increased to 386 at
March 31, 2004 from 250 at March 31, 2003, and the number of part time
employees increased to 38 at March 31, 2004 from 30 at March 31, 2003. As a
percentage of total revenues, selling, general and administrative expenses
declined from 15.0% in the first three months of 2003 to 14.1% in the first
three months of 2004. Interest incurred on notes and development bonds payable totaled $2.0
million and $2.2 million for the 2004 period and 2003 period, respectively.
Interest incurred was lower due to decreases in the average interest rates
paid, although the positive effect of lower rates was partially offset by
higher outstanding balances of notes and mortgage notes payable. Interest
capitalized was $1.9 million for each of the 2004 and 2003 periods. At the time
of home closings and land sales, the capitalized interest allocated to such
property is charged to cost of sales. Cost of sales of real estate for the
three months ended March 31, 2004 and 2003 included previously capitalized
interest of approximately $1.8 million and $1.2 million, respectively. Bluegreens reported net income for the three months ended March 31, 2004
was $4.7 million, as compared to $2.1 million for the same period in 2003. Our
interest in Bluegreens earnings, net of 20




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##### Table of Contents



purchase accounting adjustments, was $2.1 million for the first three
months of 2004 versus a loss of $134,000 for the first three months of 2003.
For the three months ended March 31, 2004 and 2003, we owned 9.5 million shares
and 8.3 million shares, which represented approximately 37% and 34%,
respectively, of the weighted average outstanding shares of Bluegreen. Earnings from real estate joint ventures were $3.6 million during the
first quarter of 2004 as compared to a loss of $313,000 during the 2003 period.
This increase in earnings in our real estate joint venture activities primarily
resulted from gains recognized upon the sale of a joint ventures property in
Vero Beach, Florida, earnings associated with the delivery of condominium units
by a joint venture project in Boca Raton, Florida and earnings associated with
the delivery of homes by a joint venture project in West Palm Beach, Florida.
We do not believe that the level of earnings from real estate joint ventures
recognized in the first three months of 2004 is indicative of the results
expected for the entire year because the Vero Beach and West Palm Beach joint
venture projects are sold out and their operations are essentially completed. 21




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LEVITT AND SONS RESULTS OF OPERATIONS Three MonthsEnded March 31,2004
    
    2003
    
    Change(Dollars in thousands)
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    78,664
    
    
    
    37,633
    
    
    
    41,031Title and mortgage operations
    
    
    970
    
    
    
    404
    
    
    
    566Total revenues
    
    
    79,634
    
    
    
    38,037
    
    
    
    41,597Costs and expensesCost of sales of real estate
    
    
    61,475
    
    
    
    29,153
    
    
    
    32,322Selling, general and administrative expenses
    
    
    9,292
    
    
    
    5,937
    
    
    
    3,355Other expenses
    
    
    617
    
    
    
    292
    
    
    
    325Minority interest
    
    
    
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    71,384
    
    
    
    35,382
    
    
    
    36,0028,250
    
    
    
    2,655
    
    
    
    5,595Earnings (loss) from real estate joint ventures
    
    
    1,509
    
    
    
    (141
    )
    
    
    1,650Interest and other income
    
    
    43
    
    
    
    118
    
    
    
    (75
    )Income before income taxes
    
    
    9,802
    
    
    
    2,632
    
    
    
    7,170Provision for income taxes
    
    
    3,781
    
    
    
    1,019
    
    
    
    2,762Net income
    
    $
    6,021
    
    
    
    1,613
    
    
    
    4,408Levitt and Sons:Homes delivered
    
    
    341
    
    
    
    162
    
    
    
    179Construction starts
    
    
    701
    
    
    
    244
    
    
    
    457Average selling price of homes delivered
    
    $
    231
    
    
    
    232
    
    
    
    (1
    )Margin percentage on homes delivered
    
    
    21.9
    %
    
    
    22.5
    %
    
    
    -0.7
    %New sales contracts (units)
    
    
    474
    
    
    
    467
    
    
    
    7New sales contracts (value)
    
    $
    130,124
    
    
    
    101,361
    
    
    
    28,763Backlog of homes (units)
    
    
    2,186
    
    
    
    1,129
    
    
    
    1,057Backlog of homes (value)
    
    $
    510,231
    
    
    
    231,320
    
    
    
    278,911Levitt and Sons Joint Ventures:Homes delivered
    
    
    88
    
    
    
    
    
    
    
    88Construction starts
    
    
    
    
    
    
    43
    
    
    
    (43
    )New sales contracts (units)
    
    
    31
    
    
    
    26
    
    
    
    5New sales contracts (value)
    
    $
    10,133
    
    
    
    5,270
    
    
    
    4,863Backlog of homes (units)
    
    
    47
    
    
    
    87
    
    
    
    (40
    )Backlog of homes (value)
    
    $
    14,444
    
    
    
    21,297
    
    
    
    (6,853
    )
 At March 31, 2004, Levitt and Sons had a delivery backlog of 2,186 homes
representing $510.2 million of future sales. The number of homes in backlog is
at a five-year high and is higher than the number of units delivered in 2001
and 2002 combined. The number of homes in backlog is 6% higher than at year-end
2003, and the average sales price of the homes under contract is approximately
4% higher than the year-end 2003 backlog. While the strong backlog is
encouraging for our 2004 results, potential economic trends and developments
could impact our home sales operations. In recent months, the costs of lumber,
steel, concrete and other building materials have risen significantly. While
we may be able to increase our selling prices to absorb these increased costs
in future sales, the sales prices of homes in our backlog cannot be increased.
Accordingly, we expect that the margins on the delivery of homes in backlog may
be adversely affected by this trend. 22




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Levitt and Sons is currently expanding its operations to the Jacksonville,
Florida and Atlanta, Georgia markets. Levitt and Sons has not previously
operated in these markets and may not recognize any revenues from these
operations during the next twelve months or longer. As a result, any costs
associated with this expansion that are incurred prior to revenue recognition
may adversely affect our operating results. For the Three Months Ended March 31, 2004 Compared to the Same 2003 Period: Levitt and Sons revenues from home sales increased 109% to $78.7 million
during the three months ended March 31, 2004, as compared to the same 2003
period. This was primarily due to an increase in home deliveries associated
with the introduction of new projects. During the three months ended March 31,
2004, 341 homes were delivered as compared to 162 homes delivered during the
three months ended March 31, 2003. Cost of sales increased 111% to $61.5 million during the three months
ended March 31, 2004, as compared to the same 2003 period. The increase in
cost of sales was primarily due to the increase in home deliveries. Cost of
sales as a percentage of related revenue was 78% and 77% for the three months
ended March 31, 2004 and 2003, respectively. Selling, general and administrative expenses increased 57% to $9.3 million
during the three months ended March 31, 2004, as compared to the same 2003
period. The increase in selling, general and administrative expenses primarily
resulted from the increase in home deliveries, as well as an increase in
compensation and benefits resulting from the continued expansion of Levitt and
Sons operations. As a percentage of total revenues, selling, general and
administrative expenses declined from 15.6% in the first three months of 2003
to 11.7% in the first three months of 2004. The improvement in selling,
general and administrative expenses as a percentage of revenues reflects
economies of scale realized as a result of increased revenue levels. Interest incurred totaled $1.2 million and $1.1 million for the three
months ended March 31, 2004 and 2003, respectively. The increase in interest
incurred was primarily due to an increase in borrowings associated with several
new development projects, but was partially offset by a decline in average
interest rates on these borrowings. Interest capitalized for the quarters
ended March 31, 2004 and 2003 totaled $1.2 million and $1.1 million,
respectively. In both 2004 and 2003, the value of real estate inventory under
active development was greater than the interest-bearing debt related to that
inventory. Therefore, all interest incurred during the 2004 and 2003 periods
was capitalized. When a housing unit is delivered, the capitalized interest
related to that unit is charged to cost of sales. Cost of sales of real
estate for the three months ended March 31, 2004 and 2003 included previously
capitalized interest of approximately $1.4 million and $811,000, respectively. The increase in earnings from real estate joint ventures was the result of
the delivery of 88 units by a joint venture that is developing a condominium
complex. No units were delivered by that joint venture in the first three
months of 2003. 23




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##### Table of Contents



CORE COMMUNITIES RESULTS OF OPERATIONS Three MonthsEnded March 31,2004
    
    2003
    
    Change(In thousands)
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    19,321
    
    
    
    11,909
    
    
    
    7,412Total revenues
    
    
    19,321
    
    
    
    11,909
    
    
    
    7,412Costs and expensesCost of sales of real estate
    
    
    7,968
    
    
    
    7,226
    
    
    
    742Selling, general and administrative expenses
    
    
    2,588
    
    
    
    1,252
    
    
    
    1,336Interest expense, net
    
    
    58
    
    
    
    233
    
    
    
    (175
    )Total costs and expenses
    
    
    10,614
    
    
    
    8,711
    
    
    
    1,9038,707
    
    
    
    3,198
    
    
    
    5,509Interest and other income
    
    
    405
    
    
    
    431
    
    
    
    (26
    )Income before income taxes
    
    
    9,112
    
    
    
    3,629
    
    
    
    5,483Provision for income taxes
    
    
    3,515
    
    
    
    1,400
    
    
    
    2,115Net income
    
    $
    5,597
    
    
    
    2,229
    
    
    
    3,368Acres sold
    
    
    294
    
    
    
    136
    
    
    
    158Margin percentage on land sales
    
    
    58.8
    %
    
    
    39.3
    %
    
    
    19.4
    %Unsold acres
    
    
    4,574
    
    
    
    4,363
    
    
    
    219Acres subject to sales contracts
    
    
    1,268
    
    
    
    1,723
    
    
    
    (455
    )Acres subject to sales contracts (value)
    
    $
    97,482
    
    
    
    62,872
    
    
    
    34,610
 Operations at Core Communities remain strong. Development activity in St.
Lucie West entered its final stages, with 144 acres of inventory remaining
available at March 31, 2004, of which 92 acres were subject to sales contracts
as of that date. Building on the success of St. Lucie West, land development
has commenced in Tradition, Core Communities newest master planned community
project in St. Lucie County, Florida. Currently, Tradition includes more than
4,800 acres, of which 1,594 had already been sold or were subject to sales
contracts with homebuilders as of March 31, 2004. Additionally, Core
Communities has contracts to acquire approximately 4,500 additional acres
adjacent to Tradition. Notwithstanding the sustained interest and activity at
both St. Lucie West and Tradition, a significant reduction of demand in the
residential real estate market could negatively impact Core Communities
operations. For the Three Months Ended March 31, 2004 Compared to the Same 2003 Period: Core Communities revenue from land sales increased 62% to $19.3 million
during the three months ended March 31, 2004, as compared to $11.9 million
during the same 2003 period. During the first quarter of 2004, 294 acres were
sold with an average margin of 59%, as compared to 136 acres sold with an
average margin of 39% in the same 2003 period. The primary reason for the
improvement in margin percentage was the sale of undeveloped residential and
commercial land in the first quarter of 2004 as compared to developed
residential lot sales in the first quarter of 2003, as undeveloped land sales
generally provide a higher margin than developed residential lot sales. Selling, general and administrative expenses increased 107% to $2.6
million during the three months ended March 31, 2004 as compared to $1.3
million for the same 2003 period. As percentage of total revenues, selling,
general and administrative expenses increased from 10.5% in the first three 24




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##### Table of Contents



months of 2003 to 13.4% in the first three months of 2004. This increase
in selling, general and administrative expense on both a dollar and percentage
of revenue basis was primarily associated with an increase in advertising and
compensation expenses related to the launch of Tradition, which expenses were
not incurred in the first quarter of 2003. Interest incurred for the three months ended March 31, 2004 and 2003 was
$164,000 and $619,000, respectively. Cost of sales of real estate for the
three months ended March 31, 2004 and 2003 included previously capitalized
interest of approximately $16,000 and $75,000, respectively. INVESTMENT IN BLUEGREEN RESULTS OF OPERATIONS Three MonthsEnded March 31,2004
    
    2003
    
    Change(In thousands)
    
    ( U n a u d i t e d )Earnings from Bluegreen Corporation
    
    $
    2,086
    
    
    
    (134
    )
    
    
    2,220Income before income taxes
    
    
    2,086
    
    
    
    (134
    )
    
    
    2,220Provision for income taxes
    
    
    805
    
    
    
    (52
    )
    
    
    857Net income
    
    $
    1,281
    
    
    
    (82
    )
    
    
    1,363
 We currently own approximately 9.5 million shares of the common stock of
Bluegreen, which represented approximately 37% of Bluegreens outstanding
shares as of March 31, 2004. 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 deteriorate
concurrently and our results of operations would be adversely affected.
Furthermore, a significant reduction in Bluegreens financial position might
require that we test our investment in Bluegreen for impairment, which testing
could result in charges against our results of operations. For the Three Months Ended March 31, 2004 Compared to the Same 2003 Period: Bluegreens reported net income for the three months ended March 31, 2004
was $4.7 million and, for the same period of 2003, net income was $2.1 million.
Our ownership interests in Bluegreens earnings during the three month periods
ended March 31, 2004 and 2003 were approximately $2.1 million and a loss of
$134,000, respectively, net of adjustments. Purchase accounting adjustments
increased our interest in Bluegreens earnings by $62,000 for the first quarter
of 2004, whereas purchase accounting adjustments reduced our interest in
Bluegreens earnings by $880,000 for the first quarter of 2003. The purchase
accounting adjustments for 2003 primarily related to Bluegreens sale of notes
receivable which existed as of the date on which we acquired our shares of
Blugreens common stock. As of that acquisition date, the notes receivable
were adjusted to reflect unrealized gain in our carrying amount of the asset.
When that same gain was recorded by Bluegreen, we recognized no gain. 25




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##### Table of Contents



OTHER OPERATIONS RESULTS OF OPERATIONS Three MonthsEnded March 31,2004
    
    2003
    
    Change(In thousands)
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    538
    
    
    
    3,422
    
    
    
    (2,884
    )Title and mortgage operations
    
    
    
    
    
    
    
    
    
    
    Total revenues
    
    
    538
    
    
    
    3,422
    
    
    
    (2,884
    )Costs and expensesCost of sales of real estate
    
    
    727
    
    
    
    3,145
    
    
    
    (2,418
    )Selling, general and administrative expenses
    
    
    2,167
    
    
    
    831
    
    
    
    1,336Interest expense, net
    
    
    
    
    
    
    8
    
    
    
    (8
    )Other expenses
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Minority interest
    
    
    25
    
    
    
    121
    
    
    
    (96
    )Total costs and expenses
    
    
    2,918
    
    
    
    4,105
    
    
    
    (1,187
    )(2,380
    )
    
    
    (683
    )
    
    
    (1,697
    )Earnings (loss) from real estate joint ventures
    
    
    2,098
    
    
    
    (172
    )
    
    
    2,270Interest and other income
    
    
    30
    
    
    
    97
    
    
    
    (67
    )Income before income taxes
    
    
    (252
    )
    
    
    (758
    )
    
    
    506Provision for income taxes
    
    
    (98
    )
    
    
    (292
    )
    
    
    194Net income
    
    $
    (154
    )
    
    
    (466
    )
    
    
    312
 Other Operations include all other Company operations, including Levitt
Commercial, parent company general and administrative expenses and investments
in real estate projects. For the Three Months Ended March 31, 2004 Compared to the Same 2003 Period: During the three months ended March 31, 2004, Levitt Commercial delivered
one of its flex warehouse units as compared to the eight units delivered during
the three months ended March 31, 2003. Cost of sales of real estate includes
amortization of interest previously capitalized in this business segment. The
amount of previously capitalized interest amortized in cost of sales for the
three months ended March 31, 2004 and 2003 was $329,000 and $317,000,
respectively. Selling, general and administrative and other expenses increased to $2.2
million during the three months ended March 31, 2004 as compared to $832,000
during the three months ended March 31, 2003. This increase was primarily
associated with increases in employee compensation and benefits, fees paid by
the Company for administrative and other services provided pursuant to an
agreement with BankAtlantic Bancorp, and other expenses related to being a
public company. Earnings from real estate joint ventures in the first quarter of 2004 were
$2.1 million as compared to a loss of $172,000 in the first quarter of 2003.
The increase in earnings was due primarily to the gain recognized by a joint
venture on the sale of a rental apartment project in Vero Beach, Florida. Interest incurred in Other Operations was approximately $637,000 and
$460,000 for the three months ended March 31, 2004 and 2003, respectively. The
increase in interest incurred was primarily associated with an increase in
notes payable. Interest capitalized for this business segment totaled $637,000
and $451,000 for the three months ended March 31, 2004 and 2003, respectively.
Those 26




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##### Table of Contents



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. FINANCIAL CONDITION March 31, 2004 compared to December 31, 2003 Our total assets at March 31, 2004 and December 31, 2003 were $418.7
million and $392.7 million, respectively. The increase in total assets
primarily resulted from:  
    
    a net increase in cash and cash equivalents of $9.9 million,
which resulted from funds provided by operations and proceeds from
borrowings;
    
    a net increase in inventory of real estate of approximately
$10.9 million resulting from land acquisitions in central Florida by
Levitt and Sons, as well as increases in land development and
construction costs. These increases in inventory of real estate were
partially offset by the sale of homes and land sales;
    
    an increase of approximately $1.6 million in our investment
in Bluegreen Corporation associated primarily with our equity in
earnings and unrealized gains associated with Bluegreens other
comprehensive income; and
    
    a $2.1 million increase in other assets primarily associated
with prepayment of commissions and insurance. The above increases in total assets were partially offset by a reduction
in the deferred tax asset of approximately $728,000 which primarily resulted
from an increase in our deferred tax liability relating to our earnings from
Bluegreen. Total liabilities at March 31, 2004 and December 31, 2002 were $280.4
million and $267.2 million, respectively. The increase in total liabilities primarily resulted from:  
    
    a $7.0 million increase in current income taxes payable
related primarily to the timing of quarterly estimated tax payments
and increases in our taxable income; and
    
    a net increase in customer deposits of $6.6 million, of which
$6.5 million relates to units under contract at Levitt and Sons. The above increases in total liabilities were partially offset by a
reduction in notes and mortgage notes payable of $1.1 million. 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, 2004 and each of the years in the two year period ended
December 31, 2003, our primary sources of funds were proceeds from the sale of
real estate inventory, distributions from real estate joint ventures,
borrowings, proceeds from development bonds payable and, in 2002, capital
contributions from BankAtlantic Bancorp. These funds were utilized primarily
for development, construction and acquisition of our real estate, to repay
borrowings, to pay general and administrative expenses, to invest in real
estate joint ventures, and, in 2002, to invest in Bluegreen. 27




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##### Table of Contents



In April 2004 we completed the underwritten public offering of a total of
5,000,000 shares of Class A common stock at a public offering price of $24.50
per share. Net proceeds from the offering totaled approximately $115.0
million, after underwriting discounts, commissions and offering expenses.
Approximately $12.0 million of the net proceeds of the offering were used to
repay indebtedness, $7.3 million were used to fund the Bowden acquisition and
$67.0 million were transferred to our operating subsidiaries to provide funds
for their growth. The balance of the funds will be used to fund our operations
and growth and for general corporate purposes. Notwithstanding the liquidity provided by the equity offering, we expect
to continue funding our short-term liquidity requirements generally through net
cash provided by operations. We expect to meet our long-term liquidity
requirements for items such as acquisitions and debt service obligations
primarily with net cash provided by operations, long-term secured and unsecured
indebtedness and the remaining proceeds of the equity offering. As of March 31,
2004 and December 31, 2003 we had cash and cash equivalents of $45.8 million
and $36.0 million, respectively. At March 31, 2004, our consolidated debt was approximately $172.9 million,
including the $12.0 million of indebtedness that was repaid in April 2004 with
the proceeds of the equity sale described above. Our debt principal payment
obligations for the 12 months beginning March 31, 2004 are anticipated to total
approximately $11.3 million ($5.0 million after giving effect to the repayment
of debt with the proceeds of the equity offering). We have entered into various loan agreements which provide financing for
acquisition and site improvements and construction of residential units. As of
March 31, 2004, these loan agreements provided, in the aggregate, for advances
on a revolving basis of up to $195.8 million (subject to available collateral),
of which $118.6 million was outstanding. The loans are secured by mortgages on
properties, including improvements. Principal payments under these mortgages
are required as sales of the underlying collateral securing such loans are
consummated. In connection with the purchase of Levitt and Sons the Company entered
into a loan agreement with an unaffiliated financial institution. The loan was
secured by the Companys membership interest in Levitt and Sons. At March 31,
2004, $7.9 million was outstanding under this loan, which we repaid in full in
April 2004 with the proceeds of the equity sale described above. On December 31, 2003, BankAtlantic Bancorp completed the spin-off of the
Company. In connection with the spin-off, BankAtlantic Bancorp transferred its
1.2 million shares in Bluegreen to the Company in exchange for a one-year $5.5
million note and additional shares of our common stock (which additional shares
were subsequently distributed in the spin-off). We repaid this loan in full in
April 2004 out of the equity sale proceeds. Approximately $3.2 million of unsecured subordinated investment notes were
outstanding as of March 31, 2004. The investment notes are unsecured
obligations of Levitt Corporation and are subordinated to substantially all of
our other liabilities. The investment notes are not guaranteed by any of our
subsidiaries or any other entity. The sale of the investment notes were
registered under a registration statement filed with the SEC. In late 2003, we
ceased advertising the offering of the investment notes, and in March 2004, the
unsold notes under the registration statement were deregistered. However, we
currently anticipate that during the next twelve months we may issue up to $100
million of debt securities which may consist of investment notes, subordinated
debt, senior debt or other similar securities. At March 31, 2004 and December 31, 2003, our total borrowings from
BankAtlantic, 28




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##### Table of Contents



excluding real estate joint ventures, were approximately $18.5 million and
$18.1 million, respectively. Our real estate joint ventures total borrowings
from BankAtlantic were $639,000 and $22.7 million at March 31, 2004 and
December 31, 2003, respectively. We are an affiliate of BankAtlantic;
accordingly, the amounts that BankAtlantic is permitted to lend to us are
restricted by applicable Office of Thrift Supervision regulations. Additional
financing may only be available to us from unaffiliated third party lenders. 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 have the effect of limiting the amount of debt
that we can incur in the future and restricting the payment of dividends by us
and our subsidiaries. At March 31, 2004, we were in compliance with all loan
agreement financial requirements and covenants. In connection with the development of certain of our communities,
community development or improvement districts have been established to access
bond financing for the funding of infrastructure development and other projects
with the communities. We pay a portion of the revenues, fees, and assessments
levied by the districts on the properties we own that are benefited by the
improvements. In accordance with Emerging Issues Task Force Issue 91-10 (EITF
91-10), Accounting for Special Assessments and Tax Increment Financing, we
record a liability, net of cash held by the districts available to offset the
particular bond obligation, for the estimated developer obligations that are
fixed and determinable and user fees that are required to be paid or
transferred at the time the parcel or unit is sold to an end user. A
development district for the Tradition master-planned community currently has
$62.8 million of long-term assessment bonds outstanding, for which no
assessments have been levied. At March 31, 2004, we owned approximately 80% of
the property in the district. We believe that the assessments will be levied
beginning in 2005. In accordance with EITF 91-10, we will recognize an expense
for our pro rata portion of assessments, based upon our ownership of benefited
property as of the date of the assessment. At March 31, 2004, the Company had $156.4 million of commitments to
purchase properties for development, approximately $12.5 million of which is
subject to due diligence and satisfaction of certain requirements and
conditions, including financing contingencies. The following table summarizes
certain information relating to outstanding purchase contracts. Purchase
    
    Units/
    
    ExpectedPrice
    
    Acres
    
    ClosingLevitt and Sons
    
    $75.0 million
    
    4,520 units
    
    
    2004Core Communities
    
    $80.6 million
    
    4,456 acres
    
    
    2004Levitt Commercial
    
    $
    836,000
    
    
    22 units
    
    
    2004
 At March 31, 2004, cash deposits of approximately $4.3 million secured our
commitments under these contracts. Included in the table above are $23.5
million of commitments by Levitt and Sons to purchase properties from Core
Communities at prices we believe to be attainable in arms-length transactions. At March 31, 2004, our backlog of 2,186 homes and 1,268 acres under
contract had estimated sales values of approximately $510.2 million and $97.5
million, respectively. Our backlog is measured as homes subject to pending
sales contracts, some of which are subject to financing contingencies in favor
of the buyer. 29




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##### Table of Contents



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.
No liability is recorded for the repayment of principal and interest on the
bonds until the related assessments levied on the properties we own within the
district become fixed and determinable. As of March 31, 2004, a development
district in Tradition had $62.8 million of community development district bonds
outstanding for which no assessments had been levied. As of March 31, 2004, we
owned approximately 80% of the property in the district. See Liquidity and
Capital Resources We have provided guarantees on approximately $1.4 million of indebtedness
for certain of our real estate joint ventures. Based on the loans collateral
we believe that it is not reasonably likely that any payments will be required
under these guarantees. The following table summarizes our contractual obligations as of March 31,
2004 (in thousands): Payments due by periodLess than
    
    2 - 3
    
    4 - 5
    
    More thanCategory
    
    Total
    
    1 year
    
    Years
    
    Years
    
    5 yearsLong-term debt obligations
    
    $
    172,906
    
    
    
    11,268
    
    
    
    69,590
    
    
    
    90,350
    
    
    
    1,698Operating lease obligations
    
    
    3,146
    
    
    
    877
    
    
    
    1,309
    
    
    
    960
    
    
    
    Purchase obligations
    
    
    156,428
    
    
    
    156,428
    
    
    
    
    
    
    
    
    
    
    
    Total Obligations
    
    $
    332,480
    
    
    
    168,573
    
    
    
    70,899
    
    
    
    91,310
    
    
    
    1,698
 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; 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 are subject to
interest rate risk on our long-term debt. At March 31, 2004, we had $167.6
million in borrowings with adjustable rates tied to the prime rate and/or LIBOR
rates and $5.3 million in borrowings with fixed rates. Consequently, with
respect to debt tied to an indexed rate, 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. Based upon the amount of variable rate debt outstanding at March 31, 2004
and holding the variable rate debt balance constant, each one percentage point
increase in interest rates would increase the interest incurred by us by
approximately $1.7 million per year. 30




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##### Table of Contents



NEW ACCOUNTING PRONOUNCEMENTS In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, Consolidation of Variable Interest Entities (FIN
46). In December 2003, the FASB issued Interpretation No. 46 (revised
December 2003), Consolidation of Variable Interest Entities (FIN 46R),
which replaces FIN 46. FIN 46R addresses how a business enterprise should
evaluate whether it has a controlling interest in an entity through means other
than voting rights. This interpretation requires a variable interest entity to
be consolidated by a company if that company is subject to a majority of the
risk of loss from the variable interest entitys activities or is entitled to
receive a majority of the entitys residual returns or both. The
interpretation also requires disclosures about variable interest entities that
we are not required to consolidate but in which we have a significant variable
interest. We have adopted FIN 46R and concluded that there are no variable
interest entities for which consolidation or additional disclosure are
required. 31




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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, under the supervision and with the participation of our principal
executive officer and principal financial officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on 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 Controls In addition, we reviewed our internal control over financial reporting,
and there have been no significant changes in our internal control over
financial reporting or in other factors that could significantly affect those
controls subsequent to the date of the last evaluation. Limitations on the Effectiveness of Controls Our management, including our principal executive officer and principal
financial officer, does not expect that our disclosure controls and procedures
and internal controls over financial reporting will prevent all errors and all
improper conduct. A control system, no matter how well conceived and operated,
can provide only reasonable, not absolute, assurance that the objectives of the
control system are met. Further, the design of a control system must reflect
the fact that there are resource constraints, and the benefits of controls must
be considered relative to their costs. Due to the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of improper conduct, if any, within the
Company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty, and that breakdowns can occur
because of simple error or mistake. Additionally, controls can be circumvented
by the individual acts of some persons, by collusion of two or more people, or
by management override of the control. Further, the design of any system of controls also is based in part upon
assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions. Over time, controls may become inadequate because
of changes in conditions, or the degree of compliance with the policies or
procedures may deteriorate. Due to the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur
and not be detected. CEO and CFO Certifications Appearing as Exhibits 31.1 and 31.2 to this quarterly report are
Certifications of the principal executive officer and the principal financial
officer. The Certifications are required in accordance with Section 302 of the
Sarbanes-Oxley Act of 2002. This Item of this report, which you are currently
reading, is the information concerning the evaluation referred to in the
Section 302 Certifications and this information should be read in conjunction
with the Section 302 Certifications for a more complete understanding of the
topics presented. 32




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PART II  OTHER INFORMATION 
 Item 6.  Exhibits and Reports on Form 8-K  a)
    
    Index to 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 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.
  b)
    
    Reports on Form 8-K: Form 8-K filed on March 31, 2004 to file Bluegreen Corporations 2003
financial statements. 33




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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 14, 2004
    
    By:
    
    /s/ Alan B. LevanAlan B. Levan, Chief Executive OfficerDate: May 14, 2004
    
    By:
    
    /s/ Glen R. GilbertGlen R. Gilbert, Executive Vice President,Chief Accounting Officer andChief Financial Officer
 34