##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarter Ended September 30, 2008
  o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 BFC Financial Corporation
  Florida
    
    59-2022148(State or other jurisdiction of 
incorporation or organization)
    
    (IRS Employer Identification Number)
 2100 West Cypress Creek RoadFort Lauderdale, Florida
    
    33309(Address of Principal executive office)
    
    (Zip Code)
 (Registrants telephone number, including area code)
 Not Applicable
  x o
  Large accelerated filer o
    
    Accelerated filer xNon-accelerated filer o (Do not check if a smaller reporting company)
    
    Smaller reporting company x
  o x




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##### 



PagePART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Consolidated Statements of Financial Condition as of September 30, 2008 and December 31, 2007  Unaudited
    
    
    5Consolidated Statements of Operations for the Three and Nine Month Periods Ended September 30, 2008 and 2007  Unaudited
    
    
    6Consolidated Statements of Comprehensive Loss for the Three and Nine Month Periods Ended September 30, 2008 and 2007  Unaudited
    
    
    8Consolidated Statement of Shareholders Equity as of September 30, 2008  Unaudited
    
    
    9Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2008 and 2007  Unaudited
    
    
    10Notes to Unaudited Consolidated Financial Statements
    
    
    12Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    44Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    93Item 4.
    
    Controls and Procedures
    
    
    94PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    95Item 1A.
    
    Risk Factors
    
    
    96Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    99Item 6.
    
    Exhibits
    
    
    99SIGNATURES
    
    
    100EX-31.1EX-31.2EX-31.3EX-32.1EX-32.2EX-32.3
  3




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PART I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 BFC Financial Corporation
Consolidated Statements of Financial Condition  Unaudited
(In thousands, except share data)
 September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCash and cash equivalents
    
    $
    388,041
    
    
    
    332,155Securities available for sale and other financial instruments (at fair value)
    
    
    743,527
    
    
    
    936,968Investment securities at cost or amortized costs (approximate fair value:$26,260 and $65,244)
    
    
    25,484
    
    
    
    60,173Tax certificates, net of allowance of $5,515 in 2008 and $3,289 in 2007
    
    
    294,029
    
    
    
    188,401Federal Home Loan Bank stock, at cost which approximates fair value
    
    
    77,152
    
    
    
    74,003Residential loans held for sale at lower of cost or fair value
    
    
    4,264
    
    
    
    4,087Loans receivable, net of allowance for loan losses
of $114,137 in 2008 and $94,020 in 2007
    
    
    4,402,264
    
    
    
    4,524,451Accrued interest receivable
    
    
    44,564
    
    
    
    46,271Real estate held for development and sale
    
    
    271,759
    
    
    
    270,229Real estate owned
    
    
    20,054
    
    
    
    17,216Investments in unconsolidated affiliates
    
    
    80,135
    
    
    
    128,321Properties and equipment, net
    
    
    242,412
    
    
    
    276,078Goodwill and other intangibles
    
    
    72,200
    
    
    
    75,886Deferred tax asset, net
    
    
    67,528
    
    
    
    16,330Assets held for sale
    
    
    92,808
    
    
    
    96,348Other assets
    
    
    25,660
    
    
    
    67,516Total assets
    
    $
    6,851,881
    
    
    
    7,114,433LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Interest bearing
    
    $
    3,094,756
    
    
    
    3,129,194Non-interest bearing
    
    
    756,717
    
    
    
    824,211Total deposits
    
    
    3,851,473
    
    
    
    3,953,405Advances from FHLB
    
    
    1,468,120
    
    
    
    1,397,044Short term borrowings
    
    
    96,112
    
    
    
    159,905Subordinated debentures, mortgage notes payable and mortgage-backed bonds
    
    
    197,491
    
    
    
    216,451Junior subordinated debentures
    
    
    380,208
    
    
    
    379,223Loss in excess of investment in Woodbridges subsidiary
    
    
    55,214
    
    
    
    55,214Other liabilities
    
    
    118,346
    
    
    
    130,111Liabilities related to assets held for sale
    
    
    76,957
    
    
    
    80,093Total liabilities
    
    
    6,243,921
    
    
    
    6,371,446Noncontrolling interest
    
    
    433,188
    
    
    
    558,950Commitments and contingenciesShareholders equity:Preferred stock of $.01 par value; authorized 10,000,000 shares;
5% Cumulative Convertible Preferred Stock (5% Preferred Stock)
issued and outstanding 15,000 shares in 2008 and 2007
    
    
    
    
    
    
    Class A common stock of $.01 par value, authorized 70,000,000 shares;
issued and outstanding 38,265,836 in 2008 and 38,232,932 in 2007
    
    
    382
    
    
    
    382Class B common stock of $.01 par value, authorized 20,000,000 shares;
issued and outstanding 6,875,104 in 2008 and 6,876,081 in 2007
    
    
    69
    
    
    
    69Additional paid-in capital
    
    
    132,031
    
    
    
    131,189Retained earnings
    
    
    44,660
    
    
    
    50,801Total shareholders equity before
accumulated other comprehensive (loss) income
    
    
    177,142
    
    
    
    182,441Accumulated other comprehensive (loss) income
    
    
    (2,370
    )
    
    
    1,596Total shareholders equity
    
    
    174,772
    
    
    
    184,037Total liabilities and shareholders equity
    
    $
    6,851,881
    
    
    
    7,114,433
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007RevenuesBFC Activities:Interest and dividend income
    
    $
    326
    
    
    
    855
    
    
    
    1,081
    
    
    
    1,838Securities activities, net
    
    
    795
    
    
    
    
    
    
    
    898
    
    
    
    1,295Other income
    
    
    188
    
    
    
    146
    
    
    
    1,834
    
    
    
    2,0801,309
    
    
    
    1,001
    
    
    
    3,813
    
    
    
    5,213Financial Services:Interest and dividend income
    
    
    81,184
    
    
    
    94,896
    
    
    
    243,403
    
    
    
    282,211Service charges on deposits
    
    
    23,924
    
    
    
    25,894
    
    
    
    72,404
    
    
    
    76,297Other service charges and fees
    
    
    7,309
    
    
    
    7,222
    
    
    
    21,863
    
    
    
    21,779Securities activities, net
    
    
    1,132
    
    
    
    1,207
    
    
    
    5,359
    
    
    
    11,575Other income
    
    
    2,436
    
    
    
    1,909
    
    
    
    7,969
    
    
    
    6,918115,985
    
    
    
    131,128
    
    
    
    350,998
    
    
    
    398,780Real Estate Development:Sales of real estate
    
    
    10,522
    
    
    
    122,824
    
    
    
    13,071
    
    
    
    389,486Interest and dividend income
    
    
    751
    
    
    
    674
    
    
    
    2,822
    
    
    
    2,014Securities activities, net
    
    
    
    
    
    
    
    
    
    
    1,178
    
    
    
    Other income
    
    
    1,229
    
    
    
    3,877
    
    
    
    3,049
    
    
    
    11,71312,502
    
    
    
    127,375
    
    
    
    20,120
    
    
    
    403,213Total revenues
    
    
    129,796
    
    
    
    259,504
    
    
    
    374,931
    
    
    
    807,206Costs and ExpensesBFC Activities:Employee compensation and benefits
    
    
    1,986
    
    
    
    2,633
    
    
    
    7,490
    
    
    
    8,127Other expenses
    
    
    645
    
    
    
    1,461
    
    
    
    2,423
    
    
    
    3,0052,631
    
    
    
    4,094
    
    
    
    9,913
    
    
    
    11,132Financial Services:Interest expense, net of amounts capitalized
    
    
    34,737
    
    
    
    51,095
    
    
    
    108,687
    
    
    
    145,121Provision for loan losses
    
    
    31,214
    
    
    
    48,949
    
    
    
    121,349
    
    
    
    61,327Employee compensation and benefits
    
    
    31,679
    
    
    
    34,258
    
    
    
    100,015
    
    
    
    113,256Occupancy and equipment
    
    
    15,996
    
    
    
    16,954
    
    
    
    48,554
    
    
    
    48,825Advertising and business promotion
    
    
    3,430
    
    
    
    4,276
    
    
    
    11,987
    
    
    
    14,343Provision for tax certificates
    
    
    2,839
    
    
    
    75
    
    
    
    3,646
    
    
    
    225Impairment, restructuring and exit activities
    
    
    522
    
    
    
    11,005
    
    
    
    6,409
    
    
    
    14,680Other expenses
    
    
    13,779
    
    
    
    14,796
    
    
    
    40,711
    
    
    
    41,954134,196
    
    
    
    181,408
    
    
    
    441,358
    
    
    
    439,731Real Estate Development:Cost of sales of real estate
    
    
    7,063
    
    
    
    275,340
    
    
    
    8,911
    
    
    
    559,842Interest expense, net of amounts capitalized
    
    
    1,731
    
    
    
    
    
    
    
    6,429
    
    
    
    Selling, general and administrative expenses
    
    
    11,022
    
    
    
    31,228
    
    
    
    34,938
    
    
    
    96,066Other expenses
    
    
    
    
    
    
    1,112
    
    
    
    
    
    
    
    2,00719,816
    
    
    
    307,680
    
    
    
    50,278
    
    
    
    657,915Total costs and expenses
    
    
    156,643
    
    
    
    493,182
    
    
    
    501,549
    
    
    
    1,108,778Equity in earnings from unconsolidated affiliates
    
    
    2,478
    
    
    
    4,713
    
    
    
    5,724
    
    
    
    9,632Impairment of investment in unconsolidated affiliate
    
    
    (48,883
    )
    
    
    
    
    
    
    (48,883
    )
    
    
    Loss from continuing operations before income taxes
and noncontrolling interest
    
    
    (73,252
    )
    
    
    (228,965
    )
    
    
    (169,777
    )
    
    
    (291,940
    )Benefit for income taxes
    
    
    (12,642
    )
    
    
    (39,247
    )
    
    
    (47,113
    )
    
    
    (57,377
    )Noncontrolling interest
    
    
    (54,853
    )
    
    
    (164,388
    )
    
    
    (105,652
    )
    
    
    (204,698
    )Loss from continuing operations
    
    
    (5,757
    )
    
    
    (25,330
    )
    
    
    (17,012
    )
    
    
    (29,865
    )Discontinued operations, less noncontrolling interest and income tax
tax provision (benefit) of $2,788 and $491 for the three months
ended September 30, 2008 and 2007 and $3,685 and $(2,896) for the
nine months ended September 30, 2008 and 2007
    
    
    1,821
    
    
    
    83
    
    
    
    2,288
    
    
    
    1,131Extraordinary gain
    
    
    9,145
    
    
    
    
    
    
    
    9,145
    
    
    
    Net income (loss)
    
    
    5,209
    
    
    
    (25,247
    )
    
    
    (5,579
    )
    
    
    (28,734
    )5% Preferred Stock dividends
    
    
    (187
    )
    
    
    (187
    )
    
    
    (562
    )
    
    
    (562
    )Net income (loss) allocable to common stock
    
    $
    5,022
    
    
    
    (25,434
    )
    
    
    (6,141
    )
    
    
    (29,296
    )
 (Continued)
 See accompanying notes to unaudited consolidated financial statements.






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BFC Financial Corporation
Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Earnings
(loss) per common share:Basic loss per share from continuing operations
    
    $
    (0.13
    )
    
    
    (0.59
    )
    
    
    (0.39
    )
    
    
    (0.83
    )Basic earnings per share from discontinued operations
    
    
    0.04
    
    
    
    
    
    
    
    0.05
    
    
    
    0.03Basic earnings per share from extraordinary gain
    
    
    0.20
    
    
    
    
    
    
    
    0.20
    
    
    
    Basic earnings (loss) per share
    
    $
    0.11
    
    
    
    (0.59
    )
    
    
    (0.14
    )
    
    
    (0.80
    )Diluted loss per share from continuing operations
    
    $
    (0.13
    )
    
    
    (0.59
    )
    
    
    (0.39
    )
    
    
    (0.83
    )Diluted earnings per share from discontinued operations
    
    
    0.04
    
    
    
    
    
    
    
    0.05
    
    
    
    0.03Diluted earnings per share from extraordinary gain
    
    
    0.20
    
    
    
    
    
    
    
    0.20
    
    
    
    Diluted earnings (loss) per share
    
    $
    0.11
    
    
    
    (0.59
    )
    
    
    (0.14
    )
    
    
    (0.80
    )Basic weighted average number of common shares outstanding
    
    
    45,102
    
    
    
    42,942
    
    
    
    45,106
    
    
    
    36,649Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    45,102
    
    
    
    42,942
    
    
    
    45,106
    
    
    
    36,649
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Comprehensive Income (Loss)  Unaudited
(In thousands)
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income (loss)
    
    $
    5,209
    
    
    
    (25,247
    )
    
    
    (5,579
    )
    
    
    (28,734
    )Other comprehensive income (loss), net of tax:Unrealized (loss) gains on securities available for sale
    
    
    (1,870
    )
    
    
    1,647
    
    
    
    (3,705
    )
    
    
    3,399Provision (benefit) for income taxes
    
    
    (317
    )
    
    
    635
    
    
    
    (1,025
    )
    
    
    1,311Unrealized (loss) gains on securities available for sale, net of tax
    
    
    (1,553
    )
    
    
    1,012
    
    
    
    (2,680
    )
    
    
    2,088Unrealized loss associated with investment in
unconsolidated affiliates
    
    
    (127
    )
    
    
    (51
    )
    
    
    (310
    )
    
    
    (106
    )Benefit for income taxes
    
    
    (49
    )
    
    
    (20
    )
    
    
    (120
    )
    
    
    (41
    )Unrealized loss associated with investment in
unconsolidated affiliates, net of tax
    
    
    (78
    )
    
    
    (31
    )
    
    
    (190
    )
    
    
    (65
    )Reclassification adjustments of net realized gains included in net income (loss)
    
    
    (825
    )
    
    
    (15
    )
    
    
    (1,496
    )
    
    
    (2,150
    )Less: (Provision) benefit for income taxes
    
    
    (141
    )
    
    
    9
    
    
    
    (400
    )
    
    
    (815
    )Net realized gains reclassified into net income (loss), net of tax
    
    
    (684
    )
    
    
    (24
    )
    
    
    (1,096
    )
    
    
    (1,335
    )Total other comprehensive (loss) income
    
    
    (2,315
    )
    
    
    957
    
    
    
    (3,966
    )
    
    
    688Comprehensive income (loss)
    
    $
    2,894
    
    
    
    (24,290
    )
    
    
    (9,545
    )
    
    
    (28,046
    )
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Shareholders Equity  Unaudited
For the Nine Months Ended September 30, 2008
(In thousands)
 AccumulatedOtherCompre-Shares of Common
    
    
    Class A
    
    
    Class B
    
    
    Additional
    
    
    
    
    
    
    hensiveStock Outstanding
    
    
    Common
    
    
    Common
    
    
    Paid-in
    
    
    Retained
    
    
    IncomeClass A
    
    
    Class B
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    (Loss)
    
    
    TotalBalance, December 31, 2007
    
    
    38,233
    
    
    
    6,876
    
    
    $
    382
    
    
    $
    69
    
    
    $
    131,189
    
    
    $
    50,801
    
    
    $
    1,596
    
    
    $
    184,037Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,579
    )
    
    
    
    
    
    
    (5,579
    )Other comprehensive loss,
net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,966
    )
    
    
    (3,966
    )Issuance of restricted Class A
Common Stock
    
    
    121
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Transfer of shares of Common Stock
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase and retirement of
of Class A Common Stock
    
    
    (89
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48
    )
    
    
    
    
    
    
    
    
    
    
    (48
    )Net effect of subsidiaries capital
transactions, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    69Cash dividends on
5% Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (562
    )
    
    
    
    
    
    
    (562
    )Share-based compensation
related to stock options
and restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    821
    
    
    
    
    
    
    
    
    
    
    
    821Balance, September 30, 2008
    
    
    38,266
    
    
    
    6,875
    
    
    $
    382
    
    
    $
    69
    
    
    $
    132,031
    
    
    $
    44,660
    
    
    $
    (2,370
    )
    
    $
    174,772
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 For the Nine MonthsEnded September 30,2008
    
    
    2007Net cash provided by (used in) operating activities
    
    $
    41,473
    
    
    $
    (9,246
    )Investing activities:Proceeds from redemption and maturities of investment securities
    
    
    14,365
    
    
    
    3,978Proceeds from redemption and maturities of tax certificates
    
    
    252,946
    
    
    
    157,354Purchase of investment securities
    
    
    (2,792
    )
    
    
    (11,998
    )Purchase of tax certificates
    
    
    (363,013
    )
    
    
    (166,934
    )Purchase of securities available for sale
    
    
    (291,241
    )
    
    
    (238,549
    )Proceeds from sales and maturities of securities available for sale
    
    
    497,110
    
    
    
    243,564Decrease in restricted cash
    
    
    1,393
    
    
    
    1,231Purchases of FHLB stock
    
    
    (45,810
    )
    
    
    (10,575
    )Redemption of FHLB stock
    
    
    42,661
    
    
    
    15,889Investments in unconsolidated subsidiaries
    
    
    (66
    )
    
    
    (6,188
    )Distributions from unconsolidated subsidiaries
    
    
    2,589
    
    
    
    8,094Net increase in loans
    
    
    (16,552
    )
    
    
    (54,802
    )Proceeds from the sale of loans receivable
    
    
    10,100
    
    
    
    Improvements to real estate owned
    
    
    (19
    )
    
    
    (1,963
    )Proceeds from sales of real estate owned
    
    
    2,533
    
    
    
    1,253Net additions to office properties and equipment
    
    
    (2,237
    )
    
    
    (82,465
    )Net cash outflows from the sale of Central Florida stores
    
    
    (4,491
    )
    
    
    Deposit on Woodbridges rights offering
    
    
    
    
    
    
    (33,205
    )Net proceeds from the sale of Ryan Beck Holdings, Inc.
    
    
    
    
    
    
    2,628Net cash provided by (used in) investing activities
    
    
    97,476
    
    
    
    (172,688
    )Financing activities:Net (decrease) increase in deposits
    
    
    (65,214
    )
    
    
    100,941Net proceeds (repayments) of FHLB advances
    
    
    71,000
    
    
    
    (100,000
    )Decrease in securities sold under agreements to repurchase
    
    
    (4,818
    )
    
    
    (34,470
    )(Decrease) increase in federal funds purchased
    
    
    (58,975
    )
    
    
    142,974Repayments of secured borrowings
    
    
    
    
    
    
    Repayment of notes and bonds payable
    
    
    (31,307
    )
    
    
    (156,845
    )Proceeds from notes and bonds payable
    
    
    8,382
    
    
    
    214,057Proceeds from issuance of junior subordinated debentures
    
    
    
    
    
    
    30,929Payments for debt issuance costs
    
    
    (577
    )
    
    
    (1,656
    )Proceeds from exercise of BFC stock options
    
    
    
    
    
    
    187Excess tax benefits from share-based compensation
    
    
    
    
    
    
    1,2645% Preferred Stock dividends paid
    
    
    (562
    )
    
    
    (562
    )Purchase and retirement of BFC Class A Common Stock
    
    
    (48
    )
    
    
    Proceeds from issuance of BFC Class A Common Stock,
net of issuance cost
    
    
    
    
    
    
    36,121Proceeds from issuance of BankAtlantic Bancorp
Class A Common Stock to non-BFC shareholders
    
    
    103
    
    
    
    2,369Purchase and retirement of BankAtlantic Bancorp Class A Common Stock
    
    
    
    
    
    
    (53,769
    )Cash dividends paid by BankAtlantic Bancorp to non-BFC shareholders
    
    
    (637
    )
    
    
    (5,534
    )Cash dividends paid by Woodbridge to non-BFC shareholders
    
    
    
    
    
    
    (330
    )Venture partnership distribution paid to non-BFC interest holders
    
    
    (410
    )
    
    
    Net cash (used in) provided by financing activities
    
    
    (83,063
    )
    
    
    175,676Increase (decrease) in cash and cash equivalents
    
    
    55,886
    
    
    
    (6,258
    )Cash and cash equivalents in discontinued operations
assets held for sale at beginning of period
    
    
    
    
    
    
    3,285Cash and cash equivalents in discontinued operations
assets held for sale at disposal date
    
    
    
    
    
    
    (6,294
    )Cash and cash equivalents at the beginning of period
    
    
    332,155
    
    
    
    201,123Cash and cash equivalents at end of period
    
    $
    388,041
    
    
    $
    191,856
 (Continued)
 See accompanying notes to unaudited consolidated financial statements.
 10




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##### Table of Contents



BFC Financial Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 For the Nine MonthsEnded September 30,2008
    
    
    2007Supplemental cash flow information:Interest on borrowings and deposits, net of amounts capitalized
    
    $
    118,649
    
    
    $
    142,420Income taxes (refunded) paid
    
    
    (29,711
    )
    
    
    4,556Supplementary disclosure of non-cash investing and financing activities:Loans transferred to real estate owned
    
    
    6,066
    
    
    
    114Tax certificates transferred to real estate owned
    
    
    793
    
    
    
    1,503Transfers of office properties and equipment to
real estate held for development and sale
    
    
    
    
    
    
    1,239Increase in investments of unconsolidated subsidiaries associated
with the issuance of trust preferred securities
    
    
    
    
    
    
    774Decrease in accumulated other comprehensive income,
net of taxes
    
    
    (3,966
    )
    
    
    688Net decrease in shareholders equity from
the effect of subsidiaries
capital transactions, net of income taxes
    
    
    69
    
    
    
    183Securities purchased pending settlement
    
    
    
    
    
    
    (23,896
    )Effect of FASB Interpretation No. 48
    
    
    
    
    
    
    121Real estate held for development and sale transferred to property and
equipment
    
    
    
    
    
    
    1,148Stifel common stock received pursuant to Stifel merger agreement
    
    
    11,309
    
    
    
    
 See accompanying notes to unaudited consolidated financial statements.
 11




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##### Table of Contents



BFC Financial Corporation
Notes to Unaudited Consolidated Financial Statements
 1. Presentation of Interim Financial Statements
    PercentageShares
    
    
    Percentage of
    
    
    ofOwned
    
    
    Ownership
    
    
    VoteBankAtlantic BancorpClass A Common Stock (1)
    
    
    2,065,847
    
    
    
    20.15
    %
    
    
    10.68
    %Class B Common Stock
    
    
    975,225
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,041,072
    
    
    
    27.08
    %
    
    
    57.68
    %WoodbridgeClass A Common Stock (2)
    
    
    3,735,391
    
    
    
    19.62
    %
    
    
    6.98
    %Class B Common Stock
    
    
    243,807
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,979,198
    
    
    
    20.64
    %
    
    
    53.98
    %
 
 (1)
    
    In August 2008, BFC purchased an aggregate of 400,000 shares of BankAtlantic Bancorps
Class A common stock on the open market for an aggregate purchase price of $2.8 million.
BFCs acquisition of the 400,000 shares of BankAtlantic Bancorps Class A common stock
increased BFCs ownership interest in BankAtlantic Bancorp by approximately 3.55% and
increased BFCs voting interest by approximately 2.06%. The acquisitions of additional
shares of BankAtlantic Bancorp have been accounted for as a step acquisition under the
purchase method of accounting. See Note 10 for further information.(2)
    
    BFCs percentage of ownership includes, but BFCs percentage of vote excludes,
1,229,117 shares of Woodbridges Class A Common Stock which BFC has agreed not to vote,
subject to certain limited exceptions.   12




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##### Table of Contents



2. Fair Value Measurement
    13




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##### Table of Contents



Fair Value Measurements at September 30, 2008 Using:Quoted prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableSeptember
    
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Securities Available for Sale:Mortgage-backed securities
    
    $
    557,188
    
    
    
    
    
    
    
    557,188
    
    
    
    REMICS
    
    
    173,045
    
    
    
    
    
    
    
    173,045
    
    
    
    Bonds
    
    
    282
    
    
    
    
    
    
    
    
    
    
    
    282Other equity securities
    
    
    13,012
    
    
    
    9,320
    
    
    
    
    
    
    
    3,692Total securities available for sale
at fair value
    
    $
    743,527
    
    
    
    9,320
    
    
    
    730,233
    
    
    
    3,974
  14




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##### Table of Contents



Stifel
    
    
    EquityBonds
    
    
    Warrants
    
    
    Securities
    
    
    TotalBeginning Balance
    
    $
    482
    
    
    
    13,257
    
    
    
    3,372
    
    
    
    17,111Total gains and losses (realized/unrealized)Included in earnings (or changes in net assets)
    
    
    
    
    
    
    1,108
    
    
    
    
    
    
    
    1,108Included in other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    320
    
    
    
    320Purchases, issuances, and settlements
    
    
    (200
    )
    
    
    (14,365
    )
    
    
    
    
    
    
    (14,565
    )Transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    282
    
    
    
    
    
    
    
    3,692
    
    
    
    3,974
   Stifel
    
    
    EquityBonds
    
    
    Warrants
    
    
    Securities
    
    
    TotalBeginning Balance
    
    $
    681
    
    
    
    10,661
    
    
    
    5,133
    
    
    
    16,475Total gains and losses (realized/unrealized)Included in earnings (or changes in net assets)
    
    
    
    
    
    
    3,704
    
    
    
    
    
    
    
    3,704Included in other comprehensive loss
    
    
    1
    
    
    
    
    
    
    
    (1,441
    )
    
    
    (1,440
    )Purchases, issuances, and settlements
    
    
    (400
    )
    
    
    (14,365
    )
    
    
    
    
    
    
    (14,765
    )Transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    282
    
    
    
    
    
    
    
    3,692
    
    
    
    3,974
   Mortgage-Backed Securities and REMICs
  15




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##### Table of Contents



Bonds and Other Equity Securities
   Fair Value Measurements at September 30, 2008 usingQuoted prices inActive Markets
    
    
    Significant
    
    
    Significantfor Identical
    
    
    Other Observable
    
    
    UnobservableSeptember 30,
    
    
    Assets
    
    
    Inputs
    
    
    Inputs
    
    
    Total2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    ImpairmentsDescriptionLoans measured for impairment
using the fair value of the collateral
    
    $
    120,945
    
    
    
    
    
    
    
    
    
    
    
    120,945
    
    
    
    78,609Private equity investment
    
    
    536
    
    
    
    
    
    
    
    
    
    
    
    536
    
    
    
    1,148Total
    
    $
    121,481
    
    
    
    
    
    
    
    
    
    
    
    121,481
    
    
    
    79,757
  Loans Measured for Impairment
  Private Equity Investment
  3. Segment Reporting
  16




---



##### Table of Contents



BFC Activities
  Financial Services
  Primary Homebuilding
  Tennessee Homebuilding
  Land Division
  Woodbridge Other Operations
  17




---



##### Table of Contents



Woodbridge
    
    
    AdjustmentsBFC
    
    
    Financial
    
    
    Land
    
    
    Other
    
    
    andActivities
    
    
    Services
    
    
    Division
    
    
    Operations
    
    
    Eliminations
    
    
    Total2008Revenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    8,450
    
    
    
    1,847
    
    
    
    225
    
    
    
    10,522Interest and dividend income
    
    
    327
    
    
    
    81,184
    
    
    
    1,461
    
    
    
    418
    
    
    
    (1,129
    )
    
    
    82,261Other income
    
    
    1,745
    
    
    
    34,931
    
    
    
    (14
    )
    
    
    328
    
    
    
    23
    
    
    
    37,0132,072
    
    
    
    116,115
    
    
    
    9,897
    
    
    
    2,593
    
    
    
    (881
    )
    
    
    129,796Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    5,077
    
    
    
    1,906
    
    
    
    80
    
    
    
    7,063Interest expense, net
    
    
    
    
    
    
    34,767
    
    
    
    40
    
    
    
    1,691
    
    
    
    (30
    )
    
    
    36,468Provision for loan losses
    
    
    
    
    
    
    31,214
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,214Other expenses
    
    
    2,730
    
    
    
    68,650
    
    
    
    5,078
    
    
    
    6,483
    
    
    
    (1,043
    )
    
    
    81,8982,730
    
    
    
    134,631
    
    
    
    10,195
    
    
    
    10,080
    
    
    
    (993
    )
    
    
    156,643Equity in (loss) earnings
from
unconsolidated
affiliates
    
    
    (28
    )
    
    
    265
    
    
    
    
    
    
    
    2,241
    
    
    
    
    
    
    
    2,478Impairment of investment in

unconsolidated affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,883
    )
    
    
    
    
    
    
    (48,883
    )(Loss) income from
continuing
operations
before income taxes
and
noncontrolling interest
    
    
    (686
    )
    
    
    (18,251
    )
    
    
    (298
    )
    
    
    (54,129
    )
    
    
    112
    
    
    
    (73,252
    )Benefit for income taxes
    
    
    (5,373
    )
    
    
    (7,269
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,642
    )Noncontrolling interest
    
    
    (9
    )
    
    
    (7,999
    )
    
    
    (605
    )
    
    
    (46,338
    )
    
    
    98
    
    
    
    (54,853
    )Income (loss) from
continuing operations
    
    $
    4,696
    
    
    
    (2,983
    )
    
    
    307
    
    
    
    (7,791
    )
    
    
    14
    
    
    
    (5,757
    )At September 30, 2008Total assets
    
    $
    95,571
    
    
    
    6,157,692
    
    
    
    361,583
    
    
    
    252,262
    
    
    
    (15,227
    )
    
    
    6,851,881
 Woodbridge
    
    
    AdjustmentsBFC
    
    
    Financial
    
    
    Homebuilding
    
    
    Land
    
    
    Other
    
    
    andActivities
    
    
    Services
    
    
    Primary
    
    
    Tennessee
    
    
    Division
    
    
    Operations
    
    
    Eliminations
    
    
    Total2007Revenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    112,885
    
    
    
    9,339
    
    
    
    757
    
    
    
    
    
    
    
    (157
    )
    
    
    122,824Interest and
dividend income
    
    
    864
    
    
    
    94,896
    
    
    
    276
    
    
    
    9
    
    
    
    1,019
    
    
    
    232
    
    
    
    (871
    )
    
    
    96,425Other income
    
    
    809
    
    
    
    36,274
    
    
    
    2,622
    
    
    
    16
    
    
    
    1,049
    
    
    
    324
    
    
    
    (839
    )
    
    
    40,2551,673
    
    
    
    131,170
    
    
    
    115,783
    
    
    
    9,364
    
    
    
    2,825
    
    
    
    556
    
    
    
    (1,867
    )
    
    
    259,504Costs and Expenses:Cost of sale of real
estate
    
    
    
    
    
    
    
    
    
    
    247,388
    
    
    
    19,822
    
    
    
    256
    
    
    
    10,259
    
    
    
    (2,385
    )
    
    
    275,340Interest expense, net
    
    
    
    
    
    
    51,137
    
    
    
    
    
    
    
    
    
    
    
    829
    
    
    
    
    
    
    
    (871
    )
    
    
    51,095Provision for loan
losses
    
    
    
    
    
    
    48,949
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,949Other expenses
    
    
    4,156
    
    
    
    81,679
    
    
    
    19,827
    
    
    
    1,552
    
    
    
    4,152
    
    
    
    7,312
    
    
    
    (880
    )
    
    
    117,7984,156
    
    
    
    181,765
    
    
    
    267,215
    
    
    
    21,374
    
    
    
    5,237
    
    
    
    17,571
    
    
    
    (4,136
    )
    
    
    493,182Equity in (loss)
earnings from
unconsolidated
affiliates
    
    
    (27
    )
    
    
    348
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    4,402
    
    
    
    
    
    
    
    4,713(Loss) income from
continuing
operations before
income taxes and
noncontrolling
interest
    
    
    (2,510
    )
    
    
    (50,247
    )
    
    
    (151,442
    )
    
    
    (12,010
    )
    
    
    (2,412
    )
    
    
    (12,613
    )
    
    
    2,269
    
    
    
    (228,965
    )(Benefit) provision
for income taxes
    
    
    (12,382
    )
    
    
    (20,637
    )
    
    
    (1,866
    )
    
    
    100
    
    
    
    (728
    )
    
    
    (4,594
    )
    
    
    860
    
    
    
    (39,247
    )Noncontrolling
interest
    
    
    (5
    )
    
    
    (22,624
    )
    
    
    (124,737
    )
    
    
    (10,099
    )
    
    
    (1,410
    )
    
    
    (6,687
    )
    
    
    1,174
    
    
    
    (164,388
    )Income (loss) from
continuing
operations
    
    $
    9,877
    
    
    
    (6,986
    )
    
    
    (24,839
    )
    
    
    (2,011
    )
    
    
    (274
    )
    
    
    (1,332
    )
    
    
    235
    
    
    
    (25,330
    )At September 30, 2007Total assets
    
    $
    78,700
    
    
    
    6,485,593
    
    
    
    405,553
    
    
    
    37,172
    
    
    
    329,538
    
    
    
    146,083
    
    
    
    (36,754
    )
    
    
    7,445,885
 18




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##### Table of Contents



Woodbridge
    
    
    AdjustmentsBFC
    
    
    Financial
    
    
    Land
    
    
    Other
    
    
    andActivities
    
    
    Services
    
    
    Division
    
    
    Operations
    
    
    Eliminations
    
    
    Total2008Revenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    10,315
    
    
    
    2,482
    
    
    
    274
    
    
    
    13,071Interest and dividend
income
    
    
    1,089
    
    
    
    243,403
    
    
    
    1,785
    
    
    
    2,195
    
    
    
    (1,166
    )
    
    
    247,306Other income
    
    
    4,745
    
    
    
    107,884
    
    
    
    2,262
    
    
    
    2,135
    
    
    
    (2,472
    )
    
    
    114,5545,834
    
    
    
    351,287
    
    
    
    14,362
    
    
    
    6,812
    
    
    
    (3,364
    )
    
    
    374,931Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    6,312
    
    
    
    2,493
    
    
    
    106
    
    
    
    8,911Interest expense, net
    
    
    
    
    
    
    108,754
    
    
    
    1,213
    
    
    
    6,301
    
    
    
    (1,152
    )
    
    
    115,116Provision for loan losses
    
    
    
    
    
    
    121,349
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121,349Other expenses
    
    
    10,169
    
    
    
    212,422
    
    
    
    14,864
    
    
    
    21,190
    
    
    
    (2,472
    )
    
    
    256,17310,169
    
    
    
    442,525
    
    
    
    22,389
    
    
    
    29,984
    
    
    
    (3,518
    )
    
    
    501,549Equity in (loss) earnings
fromunconsolidated
affiliates
    
    
    (81
    )
    
    
    1,827
    
    
    
    
    
    
    
    3,978
    
    
    
    
    
    
    
    5,724Impairment of investment
in
unconsolidated
affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (48,883
    )
    
    
    
    
    
    
    (48,883
    )(Loss) income from
continuing operations
before income taxes and
noncontrolling interest
    
    
    (4,416
    )
    
    
    (89,411
    )
    
    
    (8,027
    )
    
    
    (68,077
    )
    
    
    154
    
    
    
    (169,777
    )Benefit for income taxes
    
    
    (12,611
    )
    
    
    (34,502
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (47,113
    )Noncontrolling interest
    
    
    54
    
    
    
    (41,584
    )
    
    
    (6,777
    )
    
    
    (57,476
    )
    
    
    131
    
    
    
    (105,652
    )Income (loss) from
continuing operations
    
    $
    8,141
    
    
    
    (13,325
    )
    
    
    (1,250
    )
    
    
    (10,601
    )
    
    
    23
    
    
    
    (17,012
    )
 Woodbridge
    
    
    AdjustmentsBFC
    
    
    Financial
    
    
    Homebuilding
    
    
    Land
    
    
    Other
    
    
    andActivities
    
    
    Services
    
    
    Primary
    
    
    Tennessee
    
    
    Division
    
    
    Operations
    
    
    Eliminations
    
    
    Total2007Revenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    340,202
    
    
    
    39,844
    
    
    
    3,451
    
    
    
    6,574
    
    
    
    (585
    )
    
    
    389,486Interest and
dividend income
    
    
    1,868
    
    
    
    282,211
    
    
    
    524
    
    
    
    37
    
    
    
    2,929
    
    
    
    781
    
    
    
    (2,287
    )
    
    
    286,063Other income
    
    
    5,326
    
    
    
    116,695
    
    
    
    8,174
    
    
    
    40
    
    
    
    2,979
    
    
    
    858
    
    
    
    (2,415
    )
    
    
    131,6577,194
    
    
    
    398,906
    
    
    
    348,900
    
    
    
    39,921
    
    
    
    9,359
    
    
    
    8,213
    
    
    
    (5,287
    )
    
    
    807,206Costs and Expenses:Cost of sale of real
estate
    
    
    
    
    
    
    
    
    
    
    496,663
    
    
    
    49,156
    
    
    
    811
    
    
    
    16,778
    
    
    
    (3,566
    )
    
    
    559,842Interest expense, net
    
    
    
    
    
    
    145,253
    
    
    
    
    
    
    
    
    
    
    
    1,851
    
    
    
    
    
    
    
    (1,983
    )
    
    
    145,121Provision for loan
losses
    
    
    
    
    
    
    61,327
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,327Other expenses
    
    
    11,322
    
    
    
    234,349
    
    
    
    59,818
    
    
    
    5,416
    
    
    
    11,421
    
    
    
    22,476
    
    
    
    (2,314
    )
    
    
    342,48811,322
    
    
    
    440,929
    
    
    
    556,481
    
    
    
    54,572
    
    
    
    14,083
    
    
    
    39,254
    
    
    
    (7,863
    )
    
    
    1,108,778Equity in (loss)
earnings from
unconsolidated
affiliates
    
    
    (27
    )
    
    
    2,163
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    7,506
    
    
    
    
    
    
    
    9,632(Loss) income from
continuing
operations before
income taxes and
noncontrolling
interest
    
    
    (4,155
    )
    
    
    (39,860
    )
    
    
    (207,591
    )
    
    
    (14,651
    )
    
    
    (4,724
    )
    
    
    (23,535
    )
    
    
    2,576
    
    
    
    (291,940
    )Benefit for income
taxes
    
    
    (16,874
    )
    
    
    (19,774
    )
    
    
    (11,680
    )
    
    
    (824
    )
    
    
    (1,701
    )
    
    
    (7,500
    )
    
    
    976
    
    
    
    (57,377
    )Noncontrolling
interest
    
    
    (13
    )
    
    
    (15,211
    )
    
    
    (163,383
    )
    
    
    (11,531
    )
    
    
    (2,521
    )
    
    
    (13,373
    )
    
    
    1,334
    
    
    
    (204,698
    )Income (loss) from
continuing
operations
    
    $
    12,732
    
    
    
    (4,875
    )
    
    
    (32,528
    )
    
    
    (2,296
    )
    
    
    (502
    )
    
    
    (2,662
    )
    
    
    266
    
    
    
    (29,865
    )
 19




---



##### Table of Contents



4. Discontinued Operations
 Sale of Ryan Beck
  Planned Sale of Two Core Communities Commercial Leasing Projects
 Accounting for the Impairment or Disposal of Long-Lived Assets
  20




---



##### Table of Contents



September 30,
    
    
    December 31,2008
    
    
    2007Property and equipment, net
    
    $
    80,843
    
    
    
    84,811Other assets
    
    
    11,965
    
    
    
    11,537Assets held for sale
    
    $
    92,808
    
    
    
    96,348Accounts payable, accrued liabilities and other
    
    $
    1,847
    
    
    
    1,123Notes and mortgage payable
    
    
    75,110
    
    
    
    78,970Liabilities related to assets held for sale
    
    $
    76,957
    
    
    
    80,093
  For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues (a)
    
    $
    4,917
    
    
    
    1,558
    
    
    
    9,078
    
    
    
    2,924Costs and expenses
    
    
    1,893
    
    
    
    307
    
    
    
    3,649
    
    
    
    1,491Income before income taxes
    
    
    3,024
    
    
    
    1,251
    
    
    
    5,429
    
    
    
    1,433Provision for income taxes
    
    
    240
    
    
    
    491
    
    
    
    432
    
    
    
    575Noncontrolling interest
    
    
    2,401
    
    
    
    676
    
    
    
    4,309
    
    
    
    764Income from discontinued operations
    
    $
    383
    
    
    
    84
    
    
    
    688
    
    
    
    94
 
 (a)
    
    Includes a gain on the sale of assets of $2.5 million for the three and
nine month periods ended September 30, 2008. 5. Impairments, Restructuring Charges and Exit Activities
 BankAtlantic Bancorp and BankAtlantic
  EmployeeTerminationBenefits
    
    
    Contract
    
    
    TotalLiability
    
    
    Liability
    
    
    LiabilityBalance at January 1, 2007
    
    $
    
    
    
    
    
    
    
    
    Expense incurred
    
    
    2,317
    
    
    
    
    
    
    
    2,317Amount paid
    
    
    (1,923
    )
    
    
    
    
    
    
    (1,923
    )Balance at September 30 , 2007
    
    $
    394
    
    
    
    
    
    
    
    394Balance at January 1, 2008
    
    $
    102
    
    
    
    990
    
    
    
    1,092Expense incurred
    
    
    2,191
    
    
    
    361
    
    
    
    2,552Amounts paid or amortized
    
    
    (1,697
    )
    
    
    (379
    )
    
    
    (2,076
    )Balance at September 30 , 2008
    
    $
    596
    
    
    
    972
    
    
    
    1,568
  21




---



##### Table of Contents



For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Impairment of real estate owned
    
    $
    1,002
    
    
    
    7,233
    
    
    
    1,052
    
    
    
    7,299Impairment of real estate held for sale
    
    
    
    
    
    
    3,655
    
    
    
    383
    
    
    
    4,711Asset impairment
    
    
    435
    
    
    
    117
    
    
    
    3,500
    
    
    
    117Employee termination costs
    
    
    97
    
    
    
    
    
    
    
    2,178
    
    
    
    2,553Lease termination net gains
    
    
    (1,024
    )
    
    
    
    
    
    
    (971
    )
    
    
    Loss on branch sale
    
    
    12
    
    
    
    
    
    
    
    267
    
    
    
    Total restructuring charges,
impairment and exit activities
    
    $
    522
    
    
    
    11,005
    
    
    
    6,409
    
    
    
    14,680
  AmountAssets sold:Loans
    
    $
    6,470Property and equipment
    
    
    13,373Total assets sold
    
    
    19,843Liabilities transferred:Deposits
    
    
    (24,477
    )Other liabilities
    
    
    (346
    )Total liabilities transferred
    
    
    (24,823
    )Deposit premium
    
    
    654Transaction costs
    
    
    (165
    )Net cash outflows from sales of stores
    
    $
    (4,491
    )
  22




---



##### Table of Contents



Woodbridge Holdings Corporation and Levitt and Sons
  Severance
    
    
    
    
    
    
    IndependentRelated and
    
    
    
    
    
    
    Contractor
    
    
    Surety BondBenefits
    
    
    Facilities
    
    
    Agreements
    
    
    Accrual
    
    
    TotalBalance at December 31, 2007
    
    $
    1,954
    
    
    
    1,010
    
    
    
    1,421
    
    
    
    1,826
    
    
    
    6,211Restructuring charges (credits)
    
    
    2,250
    
    
    
    140
    
    
    
    (11
    )
    
    
    (150
    )
    
    
    2,229Cash payments
    
    
    (3,586
    )
    
    
    (352
    )
    
    
    (618
    )
    
    
    (532
    )
    
    
    (5,088
    )Balance at September 30, 2008
    
    $
    618
    
    
    
    798
    
    
    
    792
    
    
    
    1,144
    
    
    
    3,352
   Accounting for Costs Associated with Exit or Disposal Activities
   23




---



##### Table of Contents



6. Securities Activities
  For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Gain (loss) on sale of Stifel
common stock
    
    $
    22
    
    
    
    
    
    
    
    (933
    )
    
    
    Gain from sales of managed
investment funds
    
    
    
    
    
    
    2,098
    
    
    
    130
    
    
    
    7,064Gain (loss) on sale of agency securities
    
    
    1
    
    
    
    (860
    )
    
    
    1,282
    
    
    
    (508
    )Loss on sale of municipal securities
    
    
    
    
    
    
    (930
    )
    
    
    
    
    
    
    (930
    )Gain from the sale of equity securities
    
    
    795
    
    
    
    2,403
    
    
    
    1,916
    
    
    
    3,698Gain from sale of private equity securities
    
    
    
    
    
    
    
    
    
    
    157
    
    
    
    481Realized gain (loss) on Stifel warrants
    
    
    1,109
    
    
    
    (1,504
    )
    
    
    3,705
    
    
    
    3,065Realized gain on the sale of
Office Depot common stock (a)
    
    
    
    
    
    
    
    
    
    
    1,178
    
    
    
    Securities activities, net
    
    $
    1,927
    
    
    
    1,207
    
    
    
    7,435
    
    
    
    12,870
 
 (a)
    
    In March 2008, Woodbridge purchased 3,000,200 shares of Office Depot common stock at an
average price of $11.33 per share for an aggregate purchase price of approximately $34.0
million. During June 2008, Woodbridge sold 1,565,200 shares of Office Depot at an average
price of $12.08 per share for an aggregate sales price of approximately $18.9 million. A gain
of approximately $1.2 million was realized as a result of the sale.  24




---



##### Table of Contents



7. Loans Receivable
  September 30,
    
    
    December 31,2008
    
    
    2007Real estate loans:Residential
    
    $
    1,976,825
    
    
    
    2,155,752Builder land loans
    
    
    85,110
    
    
    
    149,564Land acquisition and development
    
    
    197,533
    
    
    
    202,177Land acquisition, development and construction
    
    
    106,899
    
    
    
    151,321Construction and development
    
    
    265,364
    
    
    
    265,163Commercial
    
    
    677,815
    
    
    
    534,916Consumer  home equity
    
    
    710,834
    
    
    
    676,262Small business
    
    
    215,304
    
    
    
    211,797Other loans:Commercial business
    
    
    148,210
    
    
    
    131,044Small business  non-mortgage
    
    
    104,524
    
    
    
    105,867Consumer loans
    
    
    14,883
    
    
    
    15,667Deposit overdrafts
    
    
    10,274
    
    
    
    15,005Total gross loans
    
    
    4,513,575
    
    
    
    4,614,535Adjustments:Premiums, discounts and net deferred fees
    
    
    2,826
    
    
    
    3,936Allowance for loan losses
    
    
    (114,137
    )
    
    
    (94,020
    )Loans receivable  net
    
    $
    4,402,264
    
    
    
    4,524,451Loans held for sale
    
    $
    4,264
    
    
    
    4,087
  For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Balance, beginning of period
    
    $
    106,126
    
    
    
    55,108
    
    
    
    94,020
    
    
    
    44,173Loans charged-off
    
    
    (23,487
    )
    
    
    (11,717
    )
    
    
    (102,135
    )
    
    
    (14,641
    )Recoveries of loans previously charged-off
    
    
    284
    
    
    
    372
    
    
    
    903
    
    
    
    1,853Net (charge-offs)
    
    
    (23,203
    )
    
    
    (11,345
    )
    
    
    (101,232
    )
    
    
    (12,788
    )Provision for loan losses
    
    
    31,214
    
    
    
    48,949
    
    
    
    121,349
    
    
    
    61,327Balance, end of period
    
    $
    114,137
    
    
    
    92,712
    
    
    
    114,137
    
    
    
    92,712
  September 30, 2008
    
    
    December 31, 2007Gross
    
    
    
    
    
    
    GrossRecorded
    
    
    Specific
    
    
    Recorded
    
    
    SpecificInvestment
    
    
    Allowances
    
    
    Investment
    
    
    AllowancesImpaired loans with specific
valuation allowances
    
    $
    65,980
    
    
    
    19,308
    
    
    
    113,955
    
    
    
    17,809Impaired loans without specific
valuation allowances
    
    
    114,773
    
    
    
    
    
    
    
    67,124
    
    
    
    Total
    
    $
    180,753
    
    
    
    19,308
    
    
    
    181,079
    
    
    
    17,809
  25




---



##### Table of Contents



8. Real Estate Held for Development and Sale
  September 30,
    
    
    December 31,2008
    
    
    2007Land and land development costs
    
    $
    220,712
    
    
    
    216,090Construction costs
    
    
    1,502
    
    
    
    5,426Capitalized interest and other costs
    
    
    38,621
    
    
    
    35,009Land held for sale
    
    
    10,924
    
    
    
    13,704$
    271,759
    
    
    
    270,229
   9. Investment in Unconsolidated Affiliates
    26




---



##### Table of Contents



Unaudited Condensed Consolidated Balance Sheets
 September 30,
    
    
    December 31,2008
    
    
    2007Total assets
    
    $
    1,198,680
    
    
    
    1,039,578Total liabilities
    
    $
    775,854
    
    
    
    632,047Minority interest
    
    
    27,703
    
    
    
    22,423Total shareholders equity
    
    
    395,123
    
    
    
    385,108Total liabilities and shareholders equity
    
    $
    1,198,680
    
    
    
    1,039,578
 Unaudited Condensed Consolidated Statements of Income
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues and other income
    
    $
    179,786
    
    
    
    206,313
    
    
    
    470,268
    
    
    
    523,943Cost and other expenses
    
    
    165,663
    
    
    
    181,764
    
    
    
    446,179
    
    
    
    480,925Income before minority interest and
provision for income taxes
    
    
    14,123
    
    
    
    24,549
    
    
    
    24,089
    
    
    
    43,018Minority interest
    
    
    3,122
    
    
    
    2,044
    
    
    
    5,280
    
    
    
    5,311Income before provision for income taxes
    
    
    11,001
    
    
    
    22,505
    
    
    
    18,809
    
    
    
    37,707Provision for income taxes
    
    
    (4,180
    )
    
    
    (8,552
    )
    
    
    (7,147
    )
    
    
    (14,329
    )Net income
    
    $
    6,821
    
    
    
    13,953
    
    
    
    11,662
    
    
    
    23,378
 10. Investments
 Pizza Fusion
   Benihana
  27




---



##### Table of Contents



Shares of BankAtlantic Bancorp Class A Common Stock
 s
  11. Other Debt and Development Bonds Payable
    28




---



##### Table of Contents



Accounting for Special Assessments and Tax Increment
Financing
 12. Noncontrolling Interest
   September 30,
    
    
    December 31,2008
    
    
    2007BankAtlantic Bancorp
    
    $
    291,848
    
    
    
    351,148Woodbridge
    
    
    141,020
    
    
    
    207,138Joint venture partnership
    
    
    320
    
    
    
    664$
    433,188
    
    
    
    558,950
 29




---



##### Table of Contents



13. Interest Expense
  For the Three Months Ended,
    
    
    For the Nine Months Ended,September 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Interest expense
    
    $
    39,128
    
    
    
    64,063
    
    
    
    122,556
    
    
    
    183,308Interest capitalized
    
    
    (2,660
    )
    
    
    (12,968
    )
    
    
    (7,440
    )
    
    
    (38,187
    )Interest expense, net
    
    $
    36,468
    
    
    
    51,095
    
    
    
    115,116
    
    
    
    145,121
  14. Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk
  September 30,
    
    
    December 31,2008
    
    
    2007BFC ActivitiesGuaranty agreements
    
    $
    38,000
    
    
    
    59,112Financial ServicesCommitments to sell fixed rate residential loans
    
    
    16,761
    
    
    
    21,029Commitments to sell variable rate residential loans
    
    
    289
    
    
    
    1,518Commitments to purchase variable rate residential loans
    
    
    
    
    
    
    39,921Commitments to purchase fixed rate residential loans
    
    
    
    
    
    
    21,189Commitments to originate loans held for sale
    
    
    12,786
    
    
    
    18,344Commitments to originate loans held to maturity
    
    
    33,531
    
    
    
    158,589Commitments to extend credit, including the undisbursed
portion of loans in process
    
    
    701,423
    
    
    
    992,838Standby letters of credit
    
    
    19,357
    
    
    
    41,151Commercial lines of credit
    
    
    72,458
    
    
    
    96,786Real Estate DevelopmentContinued Agreement of Indemnity- surety bonds
    
    
    11,710
    
    
    
    
 BFC Activities
    30




---



##### Table of Contents



Financial Services
  Real Estate Development
    31




---



##### Table of Contents



15. Certain Relationships and Related Party and Affiliate Transactions
   BankAtlantic(In thousands)
    
    
    
    BFC
    
    Bancorp
    
    Woodbridge
    
    BluegreenFor the three months ended September 30, 2008Shared service income (expense)
    
    (a)
    
    $
    806
    
    
    
    (384
    )
    
    
    (320
    )
    
    
    (102
    )Other  facilities (expense) income
    
    (a)
    
    $
    (72
    )
    
    
    138
    
    
    
    (90
    )
    
    
    24Interest income (expense)
    
    (b)
    
    $
    1
    
    
    
    (30
    )
    
    
    29
    
    
    For the three months ended September 30, 2007Shared service income (expense)
    
    (a)
    
    $
    730
    
    
    
    (315
    )
    
    
    (327
    )
    
    
    (88
    )Other  facilities (expense) income
    
    (a)
    
    $
    (42
    )
    
    
    24
    
    
    
    
    
    
    
    18Interest income (expense)
    
    (b)
    
    $
    10
    
    
    
    (42
    )
    
    
    32
    
    
    For the nine months ended September 30, 2008Shared service income (expense)
    
    (a)
    
    $
    2,195
    
    
    
    (1,100
    )
    
    
    (787
    )
    
    
    (308
    )Other  facilities (expense) income
    
    (a)
    
    $
    (221
    )
    
    
    315
    
    
    
    (152
    )
    
    
    58Interest income (expense)
    
    (b)
    
    $
    8
    
    
    
    (67
    )
    
    
    59
    
    
    For the nine months ended September 30, 2007Shared service income (expense)
    
    (a)
    
    $
    2,218
    
    
    
    (1,066
    )
    
    
    (821
    )
    
    
    (331
    )Other  facilities (expense) income
    
    (a)
    
    $
    (152
    )
    
    
    108
    
    
    
    
    
    
    
    44Interest income (expense)
    
    (b)
    
    $
    31
    
    
    
    (132
    )
    
    
    101
    
    
    At September 30, 2008Cash and cash equivalents and
(interest bearing deposits)
    
    (b)
    
    $
    238
    
    
    
    (4,756
    )
    
    
    4,518
    
    
    Shared service receivable (payable)
    
    
    
    $
    361
    
    
    
    (143
    )
    
    
    (129
    )
    
    
    (89
    )At December 31, 2007Cash and cash equivalents and
(securities sold under agreements
to repurchase)
    
    (b)
    
    $
    1,217
    
    
    
    (7,335
    )
    
    
    6,118
    
    
    Shared service receivable (payable)
    
    
    
    $
    312
    
    
    
    (89
    )
    
    
    (119
    )
    
    
    (104
    )
 
 (a)
    
    Pursuant to the terms of shared service agreements between BFC,
BankAtlantic Bancorp and Woodbridge, BFC provides shared service
operations in the areas of human resources, risk management, investor
relations, executive office administration and other services to
BankAtlantic Bancorp and Woodbridge. Additionally, BFC provides
certain risk management and administrative services to Bluegreen. The
costs of shared services are allocated based upon the estimated usage
of the respective services. Also, as part of the shared service
arrangement, the Company pays BankAtlantic Bancorp and Bluegreen for
office facilities costs relating to the Company and its shared service
operations.In May 2008, BFC and BFC Shared Service Corporation (BFC Shared
Service), a wholly-owned subsidiary of BFC, entered into office lease
agreements with BankAtlantic under which BFC and BFC Shared Service
pay BankAtlantic an annual rent of approximately $294,000 for office
space in BankAtlantics corporate headquarters. In May 2008, BFC also
entered into an office sub-lease agreement with Woodbridge for office
space in BankAtlantics corporate headquarters pursuant to which
Woodbridge will pay BFC an annual rent of approximately $152,000.In March 2008, BankAtlantic entered into an agreement with Woodbridge
to provide information technology support at a cost of $10,000 per
month and a one-time set-up charge of $17,000. During the three and
nine months ended September 30, 2008, Woodbridge paid BankAtlantic
monthly hosting fees of approximately $20,000 and $33,000,
respectively.(b)
    
    BFC and Woodbridge entered into securities sold under agreements to
repurchase transactions with BankAtlantic in the aggregate of $4.5
million and $7.3 million as of September 30, 2008 and December 31,
2007, respectively. For the three and nine months ended September 30,
2008, approximately $29,000 and $59,000 of interest was recognized in
connection with the above, as compared to $32,000 and $101,000 during
the same 2007 periods. These transactions have similar terms as
BankAtlantic agreements with unaffiliated parties. 32




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##### Table of Contents



BankAtlantic Bancorp
    
    
    WeightedClass A Common
    
    
    AverageStock
    
    
    PriceOptions outstanding
    
    
    53,789
    
    
    $
    48.46Options nonvested
    
    
    13,610
    
    
    $
    92.85
      16. Loss Per Common Share
  33




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##### Table of Contents



For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,(In thousands, except per share data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Basic earnings (loss) per shareNumerator:Loss from continuing operations allocable to common stock
    
    $
    (5,944
    )
    
    
    (25,517
    )
    
    
    (17,574
    )
    
    
    (30,427
    )Discontinued operations, net of taxes
    
    
    1,821
    
    
    
    83
    
    
    
    2,288
    
    
    
    1,131Extraordinary gain
    
    
    9,145
    
    
    
    
    
    
    
    9,145
    
    
    
    Net earnings (loss) allocable to common shareholders
    
    $
    5,022
    
    
    
    (25,434
    )
    
    
    (6,141
    )
    
    
    (29,296
    )Denominator:Basic weighted average number of common shares
outstanding
    
    
    45,102
    
    
    
    42,942
    
    
    
    45,106
    
    
    
    36,649Basic earnings (loss) per share:Loss per share from continuing operations
    
    $
    (0.13
    )
    
    
    (0.59
    )
    
    
    (0.39
    )
    
    
    (0.83
    )Earnings per share from discontinued operations
    
    
    0.04
    
    
    
    
    
    
    
    0.05
    
    
    
    0.03Earnings per share from extraordinary gain
    
    
    0.20
    
    
    
    
    
    
    
    0.20
    
    
    
    Basic earnings (loss) per share
    
    $
    0.11
    
    
    
    (0.59
    )
    
    
    (0.14
    )
    
    
    (0.80
    )Diluted earnings (loss) per shareNumeratorLoss allocable to common stock
    
    $
    (5,944
    )
    
    
    (25,517
    )
    
    
    (17,574
    )
    
    
    (30,427
    )Discontinued operations, net of taxes
    
    
    1,821
    
    
    
    83
    
    
    
    2,288
    
    
    
    1,131Extraordinary gain
    
    
    9,145
    
    
    
    
    
    
    
    9,145
    
    
    
    Net earnings (loss) allocable to common stock
    
    $
    5,022
    
    
    
    (25,434
    )
    
    
    (6,141
    )
    
    
    (29,296
    )DenominatorDiluted weighted average shares outstanding
    
    
    45,102
    
    
    
    42,942
    
    
    
    45,106
    
    
    
    36,649Diluted earnings (loss) per shareLoss per share from continuing operations
    
    $
    (0.13
    )
    
    
    (0.59
    )
    
    
    (0.39
    )
    
    
    (0.83
    )Earnings per share from discontinued operations
    
    
    0.04
    
    
    
    
    
    
    
    0.05
    
    
    
    0.03Earnings per share from extraordinary gain
    
    
    0.20
    
    
    
    
    
    
    
    0.20
    
    
    
    Diluted loss per share
    
    $
    0.11
    
    
    
    (0.59
    )
    
    
    (0.14
    )
    
    
    (0.80
    )
   17. Parent Company Financial Information
  34




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September 30,
    
    
    December 31,2008
    
    
    2007AssetsCash and cash equivalents
    
    $
    11,395
    
    
    
    17,999Investment securities
    
    
    152
    
    
    
    862Investment in Benihana, Inc.
    
    
    20,000
    
    
    
    20,000Investment in venture partnerships
    
    
    416
    
    
    
    864Investment in BankAtlantic Bancorp
    
    
    105,837
    
    
    
    108,173Investment in Woodbridge
    
    
    42,189
    
    
    
    54,637Investment in and advances to wholly owned subsidiaries
    
    
    2,745
    
    
    
    1,578Loans receivable
    
    
    
    
    
    
    3,782Other assets
    
    
    1,022
    
    
    
    906Total assets
    
    $
    183,756
    
    
    
    208,801Liabilities and Shareholders EquityAdvances from and negative basis in wholly owned subsidiaries
    
    $
    1,100
    
    
    
    3,174Other liabilities
    
    
    7,059
    
    
    
    7,722Deferred income taxes
    
    
    825
    
    
    
    13,868Total liabilities
    
    
    8,984
    
    
    
    24,764Total shareholders equity
    
    
    174,772
    
    
    
    184,037Total liabilities and shareholders equity
    
    $
    183,756
    
    
    
    208,801
 
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues
    
    $
    1,168
    
    
    
    945
    
    
    
    2,305
    
    
    
    3,376Expenses
    
    
    1,900
    
    
    
    2,805
    
    
    
    6,713
    
    
    
    6,995(Loss) before earnings (loss) from subsidiaries
    
    
    (732
    )
    
    
    (1,860
    )
    
    
    (4,408
    )
    
    
    (3,619
    )Equity in (loss) of BankAtlantic Bancorp
    
    
    (2,983
    )
    
    
    (6,986
    )
    
    
    (13,325
    )
    
    
    (4,875
    )Equity in (loss) of Woodbridge
    
    
    (7,469
    )
    
    
    (28,238
    )
    
    
    (11,827
    )
    
    
    (37,722
    )Equity in earnings (loss) of other subsidiaries
    
    
    45
    
    
    
    (647
    )
    
    
    (72
    )
    
    
    (523
    )Loss before income taxes
    
    
    (11,139
    )
    
    
    (37,731
    )
    
    
    (29,632
    )
    
    
    (46,739
    )Benefit for income taxes
    
    
    (5,382
    )
    
    
    (12,401
    )
    
    
    (12,620
    )
    
    
    (16,874
    )Loss from continuing operations
    
    
    (5,757
    )
    
    
    (25,330
    )
    
    
    (17,012
    )
    
    
    (29,865
    )Equity in subsidiaries discontinued operations, net of tax
    
    
    1,821
    
    
    
    83
    
    
    
    2,288
    
    
    
    1,131Extraordinary gain
    
    
    9,145
    
    
    
    
    
    
    
    9,145
    
    
    
    Net income (loss)
    
    
    5,209
    
    
    
    (25,247
    )
    
    
    (5,579
    )
    
    
    (28,734
    )5% Preferred Stock dividends
    
    
    (187
    )
    
    
    (187
    )
    
    
    (562
    )
    
    
    (562
    )Net income (loss) allocable to common stock
    
    $
    5,022
    
    
    
    (25,434
    )
    
    
    (6,141
    )
    
    
    (29,296
    )
 35




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For the Nine MonthsEnded September 30,2008
    
    
    2007Operating Activities:Net cash used in operating activities
    
    $
    (4,661
    )
    
    
    (3,795
    )Investing Activities:Proceeds from sale of investment in real estate limited partnership
    
    
    
    
    
    
    1,000Proceeds from the sale of securities
    
    
    834
    
    
    
    1,336Distribution from partnership
    
    
    633
    
    
    
    Additions to office property and equipment
    
    
    (8
    )
    
    
    Deposit in acquisition of Woodbridge Holdings Corporation Class A shares
    
    
    
    
    
    
    (33,205
    )Acquisition of BankAtlantic Bancorp Class A shares
    
    
    (2,792
    )
    
    
    Net cash used in investing activities
    
    
    (1,333
    )
    
    
    (30,869
    )Financing Activities:Proceeds from the issuance of Common Stock, net of issuance costs
    
    
    
    
    
    
    36,121Proceeds from the issuance of Class B Common Stock upon exercise of stock options
    
    
    
    
    
    
    187Purchase and retirement of the Companys Class A Common Stock
    
    
    (48
    )
    
    
    5% Preferred Stock dividends paid
    
    
    (562
    )
    
    
    (562
    )Net cash (used in) provided by financing activities
    
    
    (610
    )
    
    
    35,746(Decrease) increase in cash and cash equivalents
    
    
    (6,604
    )
    
    
    1,082Cash at beginning of period
    
    
    17,999
    
    
    
    17,815Cash at end of period
    
    $
    11,395
    
    
    
    18,897Supplementary disclosure of non-cash investing and financing activitiesNet increase in shareholders equity from the effect of subsidiaries
capital transactions, net of income taxes
    
    $
    69
    
    
    
    183(Decrease) increase in accumulated other comprehensive income, net of taxes
    
    
    (3,966
    )
    
    
    699Cumulative effect adjustment upon adoption of FASB Interpretation No. 48
    
    
    
    
    
    
    121
   18. Income Taxes
 BFC
   36




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##### Table of Contents



BankAtlantic Bancorp
  Woodbridge
   Accounting for Uncertainty in Income Taxes  an
interpretation of FASB No. 109
 19. Goodwill
  37




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20. New Accounting Pronouncements
    38




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##### Table of Contents



21. Litigation
   22. Financial Information of Levitt and Sons
  39




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40




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##### Table of Contents



Levitt and Sons
Condensed Consolidated Statements of Financial Condition  Unaudited
(In thousands)
 September 30,
    
    
    December 31,2008
    
    
    2007AssetsCash
    
    $
    5,336
    
    
    
    5,365Inventory
    
    
    167,120
    
    
    
    208,686Property and equipment
    
    
    
    
    
    
    55Other assets
    
    
    21,757
    
    
    
    23,810Total assets
    
    $
    194,213
    
    
    
    237,916Liabilities and Shareholders EquityAccounts payable and other accrued liabilities
    
    $
    1,057
    
    
    
    469Due to Woodbridge
    
    
    2,906
    
    
    
    748Liabilities subject to compromise (A)
    
    
    327,557
    
    
    
    354,748Shareholders deficit
    
    
    (137,307
    )
    
    
    (118,049
    )Total liabilities and shareholders equity
    
    $
    194,213
    
    
    
    237,916
 41




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##### Table of Contents



(A) Liabilities Subject to Compromise
   Accounts payable and other accrued liabilities
    
    $
    57,879Customer deposits
    
    
    15,755Due to Woodbridge
    
    
    87,182Deficiency claim associated with secured debt
    
    
    36,800Notes and mortgage payable
    
    
    129,941Total liabilities subject to compromise
    
    $
    327,557
  Levitt and Sons
Condensed Consolidated Statements of Operations  Unaudited
(In thousands)
 Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007RevenuesSales of real estate
    
    $
    508
    
    
    
    122,224
    
    
    
    31,783
    
    
    
    380,046Other revenues
    
    
    
    
    
    
    614
    
    
    
    2
    
    
    
    2,213Total revenues
    
    
    508
    
    
    
    122,838
    
    
    
    31,785
    
    
    
    382,259Costs and expensesCost of sales of real estate
    
    
    976
    
    
    
    267,210
    
    
    
    41,949
    
    
    
    545,819Selling, general and administrative expenses
    
    
    71
    
    
    
    20,804
    
    
    
    4,093
    
    
    
    63,764Total costs and expenses
    
    
    1,047
    
    
    
    288,014
    
    
    
    46,042
    
    
    
    609,583Reorganization items, net
    
    
    (1,276
    )
    
    
    
    
    
    
    (6,136
    )
    
    
    Other income, net of other expense
    
    
    8
    
    
    
    1,724
    
    
    
    1,134
    
    
    
    5,082Loss before income taxes
    
    
    (1,807
    )
    
    
    (163,452
    )
    
    
    (19,259
    )
    
    
    (222,242
    )Benefit for income taxes
    
    
    
    
    
    
    1,766
    
    
    
    
    
    
    
    12,504Net loss
    
    $
    (1,807
    )
    
    
    (161,686
    )
    
    
    (19,259
    )
    
    
    (209,738
    )
 42




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23. Other Matters
  43




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Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
 Overview
     44




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PercentageShares
    
    
    Percentage of
    
    
    ofOwned
    
    
    Ownership
    
    
    VoteBankAtlantic BancorpClass A Common Stock (1)
    
    
    2,065,847
    
    
    
    20.15
    %
    
    
    10.68
    %Class B Common Stock
    
    
    975,225
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,041,072
    
    
    
    27.08
    %
    
    
    57.68
    %WoodbridgeClass A Common Stock (2)
    
    
    3,735,391
    
    
    
    19.62
    %
    
    
    6.98
    %Class B Common Stock
    
    
    243,807
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,979,198
    
    
    
    20.64
    %
    
    
    53.98
    %
 
 (1)
    
    In August 2008, BFC purchased an aggregate of 400,000 shares of BankAtlantic Bancorps
Class A common stock on the open market for an aggregate purchase price of $2.8 million.
BFCs acquisition of the 400,000 shares of BankAtlantic Bancorps Class A common stock
increased BFCs ownership interest in BankAtlantic Bancorp by approximately 3.55% and
increased BFCs voting interest by approximately 2.06%. The acquisition of additional
shares of BankAtlantic Bancorp which will be accounted for as a step acquisition under the
purchase method of accounting. See Note 10 in PART I Item 1 for further information.(2)
    
    BFCs percentage of ownership includes, but BFCs percentage of vote excludes,
1,229,117 shares of Woodbridges Class A Common Stock which BFC has agreed not to vote,
subject to certain limited exceptions. Forward Looking Statements
   
    
    the impact of economic, competitive and other factors affecting the Company and its
subsidiaries, and their operations, markets, products and services;
    
    that the performance of entities in which the Company has made investments may not be as
anticipated;
    
    that BFC is dependent upon dividends from its subsidiaries to fund its operations, and
dividends may not be paid, even with such dividends BFC has historically experienced
negative cash flow, BFC may need to issue debt or equity securities to fund its operations,
and any such securities may not be issued on favorable terms, if at all;
    
    that BFC will be subject to the unique business and industry risks and characteristics
of each entity in which an investment is made;
 45




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##### Table of Contents




    
    adverse conditions in the stock market, the public debt market and other capital markets
and the impact of such conditions on the activities of the Company and its subsidiaries;
    
    that BFC shareholders interests may be diluted if additional shares of BFC common stock
are issued; and
    
    the risk that our Class A Common Stock may be delisted from the NYSE Arca;
  
    
    the impact of economic, competitive and other factors affecting BankAtlantic Bancorp and
its operations, markets, products and services;
    
    the impact of a continued downturn in the economy or a recession on BankAtlantic
Bancorps business generally,
    
    the ability of BankAtlantic to attract deposits, the ability of its customers to
maintain account balances and the ability of BankAtlantic Bancorps borrowers to service
their obligations;
    
    credit risks and loan losses, and the related sufficiency of the allowance for loan
losses, including the impact on the credit quality of BankAtlantic loans (including those
held in the asset workout subsidiary of BankAtlantic Bancorp) of a sustained downturn in
the real estate market and other changes in the real estate markets in BankAtlantics trade
area and the areas where BankAtlantics collateral is located;
    
    the quality of BankAtlantics residential land acquisition and development loans
(including Builder land bank loans) and home equity loans, and conditions in that market
sector;
    
    the risks of additional charge-offs, impairments and required increases in
BankAtlantics allowance for loan losses and the potential impact on BankAtlantics
maintenance of well capitalized ratios;
    
    BankAtlantic Bancorps ability to successfully manage the loans held by the newly formed
asset workout subsidiary;
    
    the successful completion of a sale or joint venture of BankAtlantic Bancorps interests
in the newly formed asset workout subsidiary in the future, and the risk that BankAtlantic
Bancorp will continue to realize losses in that loan portfolio;
    
    changes in interest rates and the effects of, and changes in, trade, monetary and fiscal
policies and laws, including their impact on the banks net interest margin;
    
    adverse conditions in the stock market, the public debt market and other financial
markets and the impact of such conditions on BankAtlantic Bancorps activities and the
value of its assets;
    
    BankAtlantics seven-day banking initiatives and other growth, marketing or advertising
initiatives not resulting in continued growth of core deposits or increasing average
balances of new deposit accounts or producing results which do not justify their costs;
    
    the success of BankAtlantic Bancorps expense discipline initiative and the ability to
achieve additional cost savings;
    
    the success of BankAtlantics newly opened stores and achieving growth and profitability
at the stores in the time frames anticipated, if at all;
    
    the impact of periodic testing of goodwill, deferred tax assets and other assets for
impairment and that a sustained decline in trading price of BankAtlantic Bancorp common
stock could result in significant goodwill impairment charges;
    
    past performance, actual or estimated new account openings and growth rate may not be
achieved; and
    
    BankAtlantic Bancorps success at managing the risks involved in the foregoing.
  
    
    the impact of economic, competitive and other factors affecting Woodbridge and its
operations;
    
    the market for real estate in the areas where Woodbridge has developments, including
the impact of market conditions on Woodbridges margins;
    
    the risk that the value of the property held by Core Communities, LLC (Core
Communities or Core) and Carolina Oak Homes, LLC (Carolina Oak) may decline,
including as a result of a sustained downturn in the residential real estate and
homebuilding industries;
    
    the impact of market conditions for commercial property and the extent to which the
factors negatively impacting the homebuilding and residential real estate industries will
impact the market for commercial property;
 46




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##### Table of Contents




    
    the risk that the recent downturn in the credit markets may adversely affect Cores
commercial leasing projects, including due to the impact it may have on the ability of
current and potential tenants to secure financing which may, in turn, negatively impact
long-term rental and occupancy rates as well as the value of Cores commercial properties;
    
    the risk that the development of parcels and master-planned communities will not be
completed as anticipated;
    
    continued declines in the estimated fair value of real estate inventory and the
potential write-downs or impairment charges;
    
    the effects of increases in interest rates and the availability and cost of credit to
buyers of Woodbridges inventory;
    
    the impact of the problems in financial and credit markets on Woodbridges ability and
the ability of buyers of Woodbridges inventory to obtain financing on acceptable terms,
if at all;
    
    the risk that accelerated principal payments of debt obligations may result from
re-margining or curtailment payment requirements;
    
    the ability to obtain financing and to renew existing credit facilities on acceptable
terms, if at all;
    
    the risk that Woodbridge may be required to adjust the carrying value of its investment
in Office Depot and incur impairment charges relating to this investment in future periods
if the trading price of Office Depots common stock does not increase from current levels
and the risk that Woodbridge may be required to record further other-than-temporary
impairment charge relating to its investment in Bluegreen in the future;
    
    Woodbridges ability to access additional capital on acceptable terms, if at all;
    
    the risks and uncertainties inherent in bankruptcy proceedings and the inability to
predict the effect of Levitt and Sons liquidation process on Woodbridge, its results of
operations and financial condition, as well as the potential impact of the assertion of
claims against Woodbridge in connection with these proceedings;
    
    equity risks associated with a decline in the trading prices of the equity securities
owned by Woodbridge;
    
    the risk that creditors of Levitt and Sons may be successful in asserting claims
against Woodbridge;
    
    the risks relating to the Settlement Agreement, and the amendment to the Settlement
Agreement, including, without limitation, that the conditions to consummation of the
Settlement Agreement, as amended, will not be met, that the Settlement Agreement, as
amended, will not be approved by the Bankruptcy Court when expected, or at all and that,
in the event the Settlement Agreement, as amended, is approved by the Bankruptcy Court,
such approval will be appealed;
    
    the risk that the announced acquisition by a third party of Bluegreen will not be
consummated on the terms proposed, or at all;
    
    the risks associated with the businesses in which Woodbridge holds investments;
    
    Woodbridges success in pursuing strategic alternatives that could enhance liquidity;
and
    
    Woodbridges success at managing the risks involved in the foregoing.
  Critical Accounting Policies
  47




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Summary of Consolidated Results of Operations by Business Segment
  For the Three Months
    
    
    For the Nine Months EndedEnded September 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007BFC Activities
    
    $
    4,687
    
    
    
    9,872
    
    
    
    8,195
    
    
    
    12,719Financial Services
    
    
    (10,982
    )
    
    
    (29,610
    )
    
    
    (54,909
    )
    
    
    (20,086
    )Real Estate Development
    
    
    (54,315
    )
    
    
    (169,980
    )
    
    
    (75,950
    )
    
    
    (227,196
    )(60,610
    )
    
    
    (189,718
    )
    
    
    (122,664
    )
    
    
    (234,563
    )Noncontrolling interest
    
    
    (54,853
    )
    
    
    (164,388
    )
    
    
    (105,652
    )
    
    
    (204,698
    )Loss from continuing operations
    
    
    (5,757
    )
    
    
    (25,330
    )
    
    
    (17,012
    )
    
    
    (29,865
    )Discontinued operations
    
    
    1,821
    
    
    
    83
    
    
    
    2,288
    
    
    
    1,131Extraordinary gain
    
    
    9,145
    
    
    
    
    
    
    
    9,145
    
    
    
    Net income (loss)
    
    
    5,209
    
    
    
    (25,247
    )
    
    
    (5,579
    )
    
    
    (28,734
    )5% Preferred Stock dividends
    
    
    (187
    )
    
    
    (187
    )
    
    
    (562
    )
    
    
    (562
    )Net income (loss) allocable to
common shareholders
    
    $
    5,022
    
    
    
    (25,434
    )
    
    
    (6,141
    )
    
    
    (29,296
    )
    48




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##### Table of Contents



Consolidated Financial Condition
 Consolidated Assets and Liabilities
  
    
    an increase in cash and cash equivalents of approximately $55.9 million which resulted
from: (i) higher cash and cash equivalents of $112.4 million at BankAtlantic Bancorp,
which resulted primarily from $82.5 million of higher federal funds sold and $28.6
million of additional cash on hand offset by (ii) a net decrease in cash and cash
equivalents of $51.3 million at Woodbridge, which resulted from cash used in operations
of $16.3 million, cash used in investing activities of $12.1 million and cash used in
financing activities of $22.9 million, and (iii) a net decrease in cash and cash
equivalents of $7.1 million at BFC, which resulted primarily from cash used in
operations;
    
    a decrease in securities available for sale and other financial instruments reflects
BankAtlantic Bancorps sale of Stifel common stock, the sale of Stifel warrants and the
liquidation of managed fund equity investments and principal repayments on agency
securities. This decrease in securities available for sale was offset in part by
Woodbridges net acquisition of equity securities of $15.7 million;
    
    a decrease in investment securities at cost reflecting BankAtlantic Bancorps sale of
Stifel common stock and certain private equity investments;
    
    increase in tax certificate balances in BankAtlantic primarily due to the acquisition
of $225 million of tax certificates in Florida during the 2008 second quarter;
    
    higher investment in FHLB stock at BankAtlantic related to increases in FHLB advance
borrowings;
    
    a decline in BankAtlantics loans receivable balances associated with lower purchased
residential loan balances and declining commercial residential loan balances, partially
offset by increased commercial non-residential and home equity loan balances;
    
    an increase in inventory of real estate held for development and sale primarily
associated with an increase in Woodbridges inventory of real estate in the land division.
This increase in inventory of real estate was partially offset by lower real estate
inventory held by BankAtlantic associated with impairments and the sale of inventory, as
well as a decline in assets held for sale at BankAtlantic due to property sales and $1.4
million of impairments recognized during the 2008 second quarter;
    
    a decrease in investments in unconsolidated affiliates primarily associated with a
decrease in the carrying value of Woodbridges investment in Bluegreen due to an
other-than-temporary impairment charge of $48.9 million, net of purchase accounting of
$4.7 million;
    
    a decrease in office properties and equipment due to the completion of the sale of
BankAtlantics Central Florida stores to an unrelated financial institution during the
2008 second quarter;
    
    an increase in deferred tax asset, net reflecting BankAtlantics operating loss during
the nine months ended September 30, 2008 and BankAtlantic Bancorp lower unrealized gains
with respect to securities available for sale; and a decrease in BFCs deferred tax
liability, net. See Note 18 in PART I Item 1 in this report;
    
    a decrease in assets held for sale as a result of the sale of three ground lease
parcels at Core; and
    
    a decline in other assets primarily resulting from BankAtlantic Bancorps and
Woodbridges receipt of income tax refunds associated with the carryback of taxable
losses for the year ended December 31, 2007.
  
    
    lower non-interest-bearing deposit balances primarily due to the migration of customer
accounts to interest-paying NOW accounts as BankAtlantic offered high yield checking in
response to the competitive deposit pricing environment;
    
    interest-bearing deposit balances declined slightly primary due to significant
declines in money market and savings accounts partially offset by increased NOW and
certificate account balances. Higher certificate account balances primarily resulted from
high rate certificate promotions during 2008;
 49




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##### Table of Contents




    
    an increase in FHLB borrowings at BankAtlantic in order to maintain higher cash
balances associated with daily cash management activities;
    
    a decrease in Woodbridges notes and mortgage notes payable of $18.4 million primarily
due to a curtailment payment made in connection with a development loan collateralized by
land in Tradition Hilton Head;
    
    a decrease in liabilities related to assets held for sale as a result of the repayment
of debt in connection with the sale of three ground lease parcels at Core; and
    
    a decrease in other liabilities which primarily resulted from BankAtlantics December
2007 purchase of $18.9 million of securities pending settlement in January 2008,
partially offset by higher loan receivable escrow balances.
 Noncontrolling Interest
  September 30,
    
    
    December 31,2008
    
    
    2007BankAtlantic Bancorp
    
    $
    291,848
    
    
    
    351,148Woodbridge
    
    
    141,020
    
    
    
    207,138Joint venture partnership
    
    
    320
    
    
    
    664$
    433,188
    
    
    
    558,950
 NEW ACCOUNTING PRONOUNCEMENTS.
  50




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##### Table of Contents



BFC Activities
 BFC Activities
     For the Three Months Ended
    
    
    Change
    
    
    For the Nine Months Ended
    
    
    ChangeSeptember 30,
    
    
    2008 vs.
    
    
    September 30,
    
    
    2008 vs.2008
    
    
    2007
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2007RevenuesInterest and dividend income
    
    $
    327
    
    
    
    864
    
    
    
    (537
    )
    
    
    1,089
    
    
    
    1,868
    
    
    
    (779
    )Securities activities
    
    
    795
    
    
    
    
    
    
    
    795
    
    
    
    898
    
    
    
    1,295
    
    
    
    (397
    )Other income
    
    
    950
    
    
    
    809
    
    
    
    141
    
    
    
    3,847
    
    
    
    4,031
    
    
    
    (184
    )2,072
    
    
    
    1,673
    
    
    
    399
    
    
    
    5,834
    
    
    
    7,194
    
    
    
    (1,360
    )Cost and ExpensesEmployee compensation
and benefits
    
    
    1,986
    
    
    
    2,633
    
    
    
    (647
    )
    
    
    7,490
    
    
    
    8,127
    
    
    
    (637
    )Other expenses
    
    
    744
    
    
    
    1,523
    
    
    
    (779
    )
    
    
    2,679
    
    
    
    3,195
    
    
    
    (516
    )2,730
    
    
    
    4,156
    
    
    
    (1,426
    )
    
    
    10,169
    
    
    
    11,322
    
    
    
    (1,153
    )Equity loss from unconsolidated
subsidiaries
    
    
    (28
    )
    
    
    (27
    )
    
    
    (1
    )
    
    
    (81
    )
    
    
    (27
    )
    
    
    (54
    )Loss before income taxes
    
    
    (686
    )
    
    
    (2,510
    )
    
    
    1,824
    
    
    
    (4,416
    )
    
    
    (4,155
    )
    
    
    (261
    )Benefit for income taxes
    
    
    (5,373
    )
    
    
    (12,382
    )
    
    
    7,009
    
    
    
    (12,611
    )
    
    
    (16,874
    )
    
    
    4,263Noncontrolling interest
    
    
    (9
    )
    
    
    (5
    )
    
    
    (4
    )
    
    
    54
    
    
    
    (13
    )
    
    
    67Income from continuing
operations
    
    $
    4,696
    
    
    
    9,877
    
    
    
    (5,181
    )
    
    
    8,141
    
    
    
    12,732
    
    
    
    (4,591
    )
   51




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##### Table of Contents



BFC Activities
     Liquidity and Capital Resources of BFC
  For the Nine Months EndedSeptember 30,2008
    
    
    2007Net cash provided by (used in):Operating activities
    
    $
    (5,125
    )
    
    
    (2,508
    )Investing activities
    
    
    (1,359
    )
    
    
    (31,532
    )Financing activities
    
    
    (626
    )
    
    
    35,730(Decrease) increase in cash and cash equivalents
    
    
    (7,110
    )
    
    
    1,690Cash and cash equivalents at beginning of period
    
    
    18,898
    
    
    
    18,176Cash and cash equivalents at end of period
    
    $
    11,788
    
    
    
    19,866
  
    
    Revenues from shared services activities for affiliated companies;
    
    Dividends from Benihana;
    
    Venture partnership distributions;
    
    Revenues from BFC/CCC advisory fees;
    
    Proceeds from the sale of BFC/CCCs indirect membership interests in two limited
liability companies;
    
    Proceeds from the sale of equity securities; and
    
    Dividends from BankAtlantic Bancorp.
 
 52




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##### Table of Contents



BFC Activities
  
    
    Purchase shares of Woodbridge and BankAtlantic Bancorp Class A common stock as mentioned
below.
    
    Pay dividends on BFCs 5% Cumulative Convertible Preferred Stock; and
    
    Fund BFCs operating and general and administrative expenses, including shared services
costs.
        53




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##### Table of Contents



BFC Activities
        54




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 Financial Services
 Our Financial Services segment consists of BankAtlantic Bancorp, which is consolidated with
BFC Financial Corporation. The only assets available to BFC Financial Corporation from BankAtlantic
Bancorp are dividends when and if paid by BankAtlantic Bancorp. BankAtlantic Bancorp is a separate
public company and its management prepared the following discussion regarding BankAtlantic Bancorp
which was included in BankAtlantic Bancorps Quarterly Report on Form 10-Q for the quarter ended
September 30, 2008 filed with the Securities and Exchange Commission. Accordingly, references to
the Company, we, us or our in the following discussion under the caption Financial
Services are references to BankAtlantic Bancorp and its subsidiaries, and are not references to
BFC Financial Corporation.
   55




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 Critical Accounting Policies
  Accounting for Deferred Tax Asset Valuation Allowance
    Consolidated Results of Operations
  For the Three Months EndedSeptember 30,(in thousands)
    
    2008
    
    
    2007
    
    
    ChangeBankAtlantic
    
    $
    (2,092
    )
    
    
    (27,112
    )
    
    
    25,020Parent Company
    
    
    (8,890
    )
    
    
    (2,498
    )
    
    
    (6,392
    )Segment loss
    
    $
    (10,982
    )
    
    
    (29,610
    )
    
    
    18,628
 56




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 For the Three Months Ended September 30, 2008 Compared to the Same 2007 Period:
   For the Nine Months EndedSeptember 30,(in thousands)
    
    2008
    
    
    2007
    
    
    ChangeBankAtlantic
    
    $
    (33,132
    )
    
    
    (16,068
    )
    
    
    (17,064
    )Parent Company
    
    
    (21,777
    )
    
    
    (4,018
    )
    
    
    (17,759
    )Segment loss
    
    $
    (54,909
    )
    
    
    (20,086
    )
    
    
    (34,823
    )
 For the Nine Months Ended September 30, 2008 Compared to the Same 2007 Period:
   57




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 BankAtlantic Results of Operations
 Net interest income
 Average Balance Sheet - Yield / Rate AnalysisFor the Three Months EndedSeptember 30, 2008
    
    
    September 30, 2007Average
    
    
    Revenue/
    
    
    Yield/
    
    
    Average
    
    
    Revenue/
    
    
    
    
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    
    
    
    
    Rate(in thousands)Total loans
    
    $
    4,451,976
    
    
    
    60,785
    
    
    
    5.46
    
    
    $
    4,693,078
    
    
    
    80,082
    
    
    
    
    
    
    
    6.83Investments  tax exempt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    390,906
    
    
    
    5,765
    
    
    
    (1
    )
    
    
    5.90Investments  taxable
    
    
    1,318,289
    
    
    
    20,159
    
    
    
    6.12
    
    
    
    666,208
    
    
    
    10,580
    
    
    
    
    
    
    
    6.35Total interest earning assets
    
    
    5,770,265
    
    
    
    80,944
    
    
    
    5.61
    %
    
    
    5,750,192
    
    
    
    96,427
    
    
    
    
    
    
    
    6.71
    %Goodwill and core deposit intangibles
    
    
    75,029
    
    
    
    
    
    
    
    
    
    
    
    76,419Other non-interest earning assets
    
    
    417,035
    
    
    
    
    
    
    
    
    
    
    
    444,357Total Assets
    
    $
    6,262,329
    
    
    
    
    
    
    
    
    
    
    $
    6,270,968Deposits:Savings
    
    $
    471,270
    
    
    
    963
    
    
    
    0.81
    %
    
    $
    611,862
    
    
    
    3,642
    
    
    
    
    
    
    
    2.36
    %NOW
    
    
    955,392
    
    
    
    2,256
    
    
    
    0.94
    
    
    
    792,462
    
    
    
    2,356
    
    
    
    
    
    
    
    1.18Money market
    
    
    557,343
    
    
    
    2,089
    
    
    
    1.49
    
    
    
    660,925
    
    
    
    4,881
    
    
    
    
    
    
    
    2.93Certificates of deposit
    
    
    1,138,615
    
    
    
    10,244
    
    
    
    3.58
    
    
    
    996,415
    
    
    
    11,679
    
    
    
    
    
    
    
    4.65Total interest bearing deposits
    
    
    3,122,620
    
    
    
    15,552
    
    
    
    1.98
    
    
    
    3,061,664
    
    
    
    22,558
    
    
    
    
    
    
    
    2.92Short-term borrowed funds
    
    
    92,319
    
    
    
    378
    
    
    
    1.63
    
    
    
    229,366
    
    
    
    2,997
    
    
    
    
    
    
    
    5.19Advances from FHLB
    
    
    1,598,111
    
    
    
    13,401
    
    
    
    3.34
    
    
    
    1,398,245
    
    
    
    18,987
    
    
    
    
    
    
    
    5.39Long-term debt
    
    
    26,088
    
    
    
    418
    
    
    
    6.37
    
    
    
    29,106
    
    
    
    632
    
    
    
    
    
    
    
    8.61Total interest bearing liabilities
    
    
    4,839,138
    
    
    
    29,749
    
    
    
    2.45
    
    
    
    4,718,381
    
    
    
    45,174
    
    
    
    
    
    
    
    3.80Demand deposits
    
    
    812,402
    
    
    
    
    
    
    
    
    
    
    
    922,452Non-interest bearing other liabilities
    
    
    53,279
    
    
    
    
    
    
    
    
    
    
    
    54,210Total Liabilities
    
    
    5,704,819
    
    
    
    
    
    
    
    
    
    
    
    5,695,043Stockholders equity
    
    
    557,510
    
    
    
    
    
    
    
    
    
    
    
    575,925Total liabilities and stockholders
equity
    
    $
    6,262,329
    
    
    
    
    
    
    
    
    
    
    $
    6,270,968Net tax equivalent interest income/
net interest spread
    
    
    
    
    
    $
    51,195
    
    
    
    3.16
    %
    
    
    
    
    
    $
    51,253
    
    
    
    
    
    
    
    2.91
    %Tax equivalent adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,018
    )Net interest income
    
    
    
    
    
    $
    51,195
    
    
    
    
    
    
    
    
    
    
    $
    49,235MarginInterest income/interest earning assets
    
    
    
    
    
    
    
    
    
    
    5.61
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.71
    %Interest expense/interest earning assets
    
    
    
    
    
    
    
    
    
    
    2.05
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.12Net interest margin (tax equivalent)
    
    
    
    
    
    
    
    
    
    
    3.56
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.59
    %
 
 (1)
    
    The tax equivalent basis is computed using a 35% tax rate. For the Three Months Ended September 30, 2008 Compared to the Same 2007 Period:
   58




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
  Average Balance Sheet - Yield / Rate AnalysisFor the Nine Months EndedSeptember 30, 2008
    
    
    September 30, 2007Average
    
    
    Revenue/
    
    
    Yield/
    
    
    Average
    
    
    Revenue/
    
    
    
    
    
    
    Yield/(in thousands)
    
    Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    
    
    
    
    RateTotal loans
    
    $
    4,519,948
    
    
    
    190,387
    
    
    
    5.62
    
    
    $
    4,673,985
    
    
    
    239,583
    
    
    
    
    
    
    
    6.83Investments  tax exempt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    395,218
    
    
    
    17,412
    
    
    
    (1
    )
    
    
    5.87Investments  taxable
    
    
    1,150,224
    
    
    
    51,996
    
    
    
    6.03
    
    
    
    633,499
    
    
    
    29,782
    
    
    
    
    
    
    
    6.27Total interest earning assets
    
    
    5,670,172
    
    
    
    242,383
    
    
    
    5.70
    %
    
    
    5,702,702
    
    
    
    286,777
    
    
    
    
    
    
    
    6.71Goodwill and core deposit intangibles
    
    
    75,381
    
    
    
    
    
    
    
    
    
    
    
    76,778Other non-interest earning assets
    
    
    422,172
    
    
    
    
    
    
    
    
    
    
    
    435,863Total Assets
    
    $
    6,167,725
    
    
    
    
    
    
    
    
    
    
    $
    6,215,343Deposits:Savings
    
    $
    529,723
    
    
    
    4,265
    
    
    
    1.08
    %
    
    $
    582,714
    
    
    
    9,613
    
    
    
    
    
    
    
    2.21NOW
    
    
    941,297
    
    
    
    6,837
    
    
    
    0.97
    
    
    
    781,911
    
    
    
    5,616
    
    
    
    
    
    
    
    0.96Money market
    
    
    594,338
    
    
    
    7,674
    
    
    
    1.72
    
    
    
    662,990
    
    
    
    13,608
    
    
    
    
    
    
    
    2.74Certificates of deposit
    
    
    1,016,390
    
    
    
    29,877
    
    
    
    3.93
    
    
    
    983,990
    
    
    
    34,196
    
    
    
    
    
    
    
    4.65Total interest bearing deposits
    
    
    3,081,748
    
    
    
    48,653
    
    
    
    2.11
    
    
    
    3,011,605
    
    
    
    63,033
    
    
    
    
    
    
    
    2.80Short-term borrowed funds
    
    
    142,181
    
    
    
    2,491
    
    
    
    2.34
    
    
    
    196,953
    
    
    
    7,722
    
    
    
    
    
    
    
    5.24Advances from FHLB
    
    
    1,471,029
    
    
    
    40,780
    
    
    
    3.70
    
    
    
    1,382,768
    
    
    
    55,813
    
    
    
    
    
    
    
    5.40Long-term debt
    
    
    26,272
    
    
    
    1,336
    
    
    
    6.79
    
    
    
    29,369
    
    
    
    1,896
    
    
    
    
    
    
    
    8.64Total interest bearing liabilities
    
    
    4,721,230
    
    
    
    93,260
    
    
    
    2.64
    
    
    
    4,620,695
    
    
    
    128,464
    
    
    
    
    
    
    
    3.72Demand deposits
    
    
    848,558
    
    
    
    
    
    
    
    
    
    
    
    966,898Non-interest bearing other liabilities
    
    
    49,308
    
    
    
    
    
    
    
    
    
    
    
    53,738Total Liabilities
    
    
    5,619,096
    
    
    
    
    
    
    
    
    
    
    
    5,641,331Stockholders equity
    
    
    548,629
    
    
    
    
    
    
    
    
    
    
    
    574,012Total liabilities and stockholders
equity
    
    $
    6,167,725
    
    
    
    
    
    
    
    
    
    
    $
    6,215,343Net interest income/net
interest spread
    
    
    
    
    
    $
    149,123
    
    
    
    3.06
    %
    
    
    
    
    
    $
    158,313
    
    
    
    
    
    
    
    2.99Tax equivalent adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,094
    )Net interest income
    
    
    
    
    
    $
    149,123
    
    
    
    
    
    
    
    
    
    
    $
    152,219MarginInterest income/interest earning assets
    
    
    
    
    
    
    
    
    
    
    5.70
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.71Interest expense/interest earning assets
    
    
    
    
    
    
    
    
    
    
    2.20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.01Net interest margin
    
    
    
    
    
    
    
    
    
    
    3.50
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.70
 
 (1)
    
    The tax equivalent basis is computed using a 35% tax rate. 59




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 For the Nine Months Ended September 30, 2008 Compared to the Same 2007 Period:
  Asset Quality
  September 30,
    
    
    December 31,2008
    
    
    2007NONPERFORMING ASSETSNonaccrual:Tax certificates
    
    $
    2,317
    
    
    
    2,094Loans (1)
    
    
    89,742
    
    
    
    178,591Total nonaccrual
    
    
    92,059
    
    
    
    180,685Repossessed assets:Real estate owned
    
    
    20,054
    
    
    
    17,216Total nonperforming assets
    
    $
    112,113
    
    
    
    197,901AllowancesAllowance for loan losses
    
    $
    106,435
    
    
    
    94,020Allowance for tax certificate losses
    
    
    5,515
    
    
    
    3,289Total allowances
    
    $
    111,950
    
    
    
    97,309PROBLEM LOANSContractually past due 90 days or more
    
    
    5,399
    
    
    
    Restructured loans
    
    
    3,552
    
    
    
    2,488TOTAL PROBLEM LOANS
    
    $
    8,951
    
    
    
    2,488
 
 (1)
    
    Excluded from the above table at September 30, 2008
were $82.1 million of non-performing loans previously owned by BankAtlantic
and transferred to the asset work-out subsidiary of the Parent Company in
March 2008.  NetBalance
    
    
    Additional
    
    
    
    
    
    
    Transfers
    
    
    Parent
    
    
    BalanceDecember 31,
    
    
    Non-accrual
    
    
    Charge-
    
    
    to
    
    
    Company
    
    
    September 30,(in thousands)
    
    2007
    
    
    Loans (1)
    
    
    offs
    
    
    REO
    
    
    Transfer
    
    
    2008Residential
    
    $
    8,678
    
    
    
    21,612
    
    
    
    (2,728
    )
    
    
    (4,017
    )
    
    
    
    
    
    
    23,545Commercial
    
    
    165,818
    
    
    
    54,052
    
    
    
    (60,057
    )
    
    
    (1,900
    )
    
    
    (101,494
    )
    
    
    56,419Small business
    
    
    877
    
    
    
    6,315
    
    
    
    (3,131
    )
    
    
    (150
    )
    
    
    
    
    
    
    3,911Consumer home equity
    
    
    3,218
    
    
    
    22,394
    
    
    
    (19,745
    )
    
    
    
    
    
    
    
    
    
    
    5,867Total non-accrual loans
    
    $
    178,591
    
    
    
    104,373
    
    
    
    (85,661
    )
    
    
    (6,067
    )
    
    
    (101,494
    )
    
    
    89,742
 
 (1)
    
    Amounts for net additional non-accrual loans reflect loan repayments and loan sales of
non-accrual loans.     60




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
       Allowance for Loan Losses
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,(in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Balance, beginning of period
    
    $
    98,424
    
    
    
    54,754
    
    
    
    94,020
    
    
    
    43,602Charge-offsResidential
    
    
    (1,077
    )
    
    
    (3
    )
    
    
    (2,728
    )
    
    
    (206
    )Commercial
    
    
    (4,965
    )
    
    
    (9,444
    )
    
    
    (60,057
    )
    
    
    (9,444
    )Consumer home equity
    
    
    (7,684
    )
    
    
    (1,689
    )
    
    
    (19,745
    )
    
    
    (2,971
    )Small business
    
    
    (1,471
    )
    
    
    (581
    )
    
    
    (3,131
    )
    
    
    (2,020
    )Total charge-offs
    
    
    (15,197
    )
    
    
    (11,717
    )
    
    
    (85,661
    )
    
    
    (14,641
    )Recoveries of loans previously charged-off
    
    
    284
    
    
    
    372
    
    
    
    903
    
    
    
    2,070Net charge-offs
    
    
    (14,913
    )
    
    
    (11,345
    )
    
    
    (84,758
    )
    
    
    (12,571
    )Transfer of specific reserves
to Parent Company
    
    
    
    
    
    
    
    
    
    
    (6,440
    )
    
    
    Provision for loan losses
    
    
    22,924
    
    
    
    48,949
    
    
    
    103,613
    
    
    
    61,327Balance, end of period
    
    $
    106,435
    
    
    
    92,358
    
    
    
    106,435
    
    
    
    92,358
  61




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
  For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,(in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Builder land bank loans
    
    $
    
    
    
    
    9,444
    
    
    
    32,877
    
    
    
    9,444Land acquisition and development loans
    
    
    
    
    
    
    
    
    
    
    2,756
    
    
    
    Land acquisition, development and
construction loans
    
    
    
    
    
    
    
    
    
    
    19,459
    
    
    
    Total commercial charge-offs
    
    $
    
    
    
    
    9,444
    
    
    
    55,092
    
    
    
    9,444
   Number of(dollars in thousands)
    
    Loans
    
    
    AmountBuilder land bank loans
    
    
    7
    
    
    $
    63,091Land acquisition and development loans
    
    
    26
    
    
    
    178,076Land acquisition, development and
construction loans
    
    
    15
    
    
    
    77,736Total commercial residential loans (1)
    
    
    48
    
    
    $
    318,903
 
 (1)
    
    Excluded from the above table were $70.6 million of net commercial residential real
estate loans held by a subsidiary of the Parent Company.  BankAtlantics Non-Interest Income
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,(in thousands)
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeService charges on deposits
    
    $
    23,924
    
    
    
    25,894
    
    
    
    (1,970
    )
    
    
    72,404
    
    
    
    76,297
    
    
    
    (3,893
    )Other service charges and fees
    
    
    7,309
    
    
    
    7,222
    
    
    
    87
    
    
    
    21,863
    
    
    
    21,779
    
    
    
    84Securities activities, net
    
    
    1
    
    
    
    613
    
    
    
    (612
    )
    
    
    2,302
    
    
    
    1,446
    
    
    
    856Income from unconsolidated
subsidiaries
    
    
    122
    
    
    
    182
    
    
    
    (60
    )
    
    
    1,382
    
    
    
    1,056
    
    
    
    326Other
    
    
    2,562
    
    
    
    1,950
    
    
    
    612
    
    
    
    8,248
    
    
    
    7,014
    
    
    
    1,234Non-interest income
    
    $
    33,918
    
    
    
    35,861
    
    
    
    (1,943
    )
    
    
    106,199
    
    
    
    107,592
    
    
    
    (1,393
    )
  62




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
      BankAtlantics Non-Interest Expense
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,(in thousands)
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeEmployee compensation and benefits
    
    $
    30,353
    
    
    
    34,244
    
    
    
    (3,891
    )
    
    
    96,714
    
    
    
    111,536
    
    
    
    (14,822
    )Occupancy and equipment
    
    
    15,993
    
    
    
    16,951
    
    
    
    (958
    )
    
    
    48,547
    
    
    
    48,816
    
    
    
    (269
    )Advertising and business promotion
    
    
    3,388
    
    
    
    4,221
    
    
    
    (833
    )
    
    
    11,813
    
    
    
    14,088
    
    
    
    (2,275
    )Check losses
    
    
    2,094
    
    
    
    3,341
    
    
    
    (1,247
    )
    
    
    6,913
    
    
    
    7,929
    
    
    
    (1,016
    )Professional fees
    
    
    2,696
    
    
    
    2,444
    
    
    
    252
    
    
    
    6,960
    
    
    
    5,297
    
    
    
    1,663Supplies and postage
    
    
    1,076
    
    
    
    1,158
    
    
    
    (82
    )
    
    
    3,360
    
    
    
    4,637
    
    
    
    (1,277
    )Telecommunication
    
    
    748
    
    
    
    1,283
    
    
    
    (535
    )
    
    
    3,570
    
    
    
    4,210
    
    
    
    (640
    )Restructuring charges, impairments
and exit activities
    
    
    522
    
    
    
    11,005
    
    
    
    (10,483
    )
    
    
    6,409
    
    
    
    14,680
    
    
    
    (8,271
    )Other
    
    
    9,936
    
    
    
    6,848
    
    
    
    3,088
    
    
    
    23,483
    
    
    
    20,594
    
    
    
    2,889Total non-interest expense
    
    $
    66,806
    
    
    
    81,495
    
    
    
    (14,689
    )
    
    
    207,769
    
    
    
    231,787
    
    
    
    (24,018
    )
  63




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Financial Services
(BankAtlantic Bancorp)
          64




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 Parent Company Results of Operations
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,(in thousands)
    
    2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeNet interest expense
    
    $
    (4,778
    )
    
    
    (5,476
    )
    
    
    698
    
    
    
    (14,476
    )
    
    
    (15,261
    )
    
    
    785Provision for loan losses
    
    
    (8,290
    )
    
    
    
    
    
    
    (8,290
    )
    
    
    (17,736
    )
    
    
    
    
    
    
    (17,736
    )Non-interest income
    
    
    1,476
    
    
    
    917
    
    
    
    559
    
    
    
    4,244
    
    
    
    11,825
    
    
    
    (7,581
    )Non-interest expense
    
    
    (2,042
    )
    
    
    (340
    )
    
    
    (1,702
    )
    
    
    (5,383
    )
    
    
    (3,121
    )
    
    
    (2,262
    )Loss before income taxes
    
    
    (13,634
    )
    
    
    (4,899
    )
    
    
    (8,735
    )
    
    
    (33,351
    )
    
    
    (6,557
    )
    
    
    (26,794
    )Benefit for income taxes
    
    
    (4,744
    )
    
    
    (2,401
    )
    
    
    (2,343
    )
    
    
    (11,574
    )
    
    
    (2,539
    )
    
    
    (9,035
    )Parent Company loss
    
    $
    (8,890
    )
    
    
    (2,498
    )
    
    
    (6,392
    )
    
    
    (21,777
    )
    
    
    (4,018
    )
    
    
    (17,759
    )
      65




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
   (in thousands)
    
    AmountNonaccrual loans:Commercial residential real estate:Builder land loans
    
    $
    32,039Land acquisition and development
    
    
    19,809Land acquisition, development and construction
    
    
    34,915Total commercial residential real estate
    
    
    86,763Commercial non-residential real estate
    
    
    14,731Total non-accrual loans
    
    
    101,494Allowance for loan losses  specific reserves
    
    
    (6,440
    )Non-accrual loans, net
    
    $
    95,054
  September 30,(in thousands)
    
    2008Nonaccrual loans:Commercial residential real estate:Builder land loans
    
    $
    22,019Land acquisition and development
    
    
    19,458Land acquisition, development and construction
    
    
    29,162Total commercial residential real estate
    
    
    70,639Commercial non-residential real estate
    
    
    11,420Total non-accrual loans
    
    
    82,059Allowance for loan losses  specific reserves
    
    
    (7,702
    )Non-accrual loans, net
    
    $
    74,357
   66




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 BankAtlantic Bancorp Consolidated Financial Condition
  
    
    Increase in cash and cash equivalents was primarily due to $82.5 million of higher
federal funds sold and $28.6 million of additional cash on hand;
    
    Decrease in securities available for sale and other financial instruments reflecting
the sale of Stifel common stock, the sale of Stifel warrants, the liquidation of managed
fund equity investments held by the Parent Company and principal repayments on agency
securities;
    
    Decrease in investment securities at cost resulting from the sale of Stifel common
stock and certain private equity investments;
    
    Increase in tax certificate balances primarily due to the acquisition of $225 million
of tax certificates in Florida during the 2008 second quarter;
    
    Higher investment in FHLB stock related to increases in FHLB borrowings;
    
    Decrease in loans receivable balances associated with lower purchased residential loan
balances and declining commercial residential loan balances, partially offset by
increased commercial non-residential and home equity loan balances;
    
    Lower real estate held for development and sale balances associated with impairments
and the sale of inventory of homes at a real estate development;
    
    Decrease in assets held for sale due to property sales and $1.4 million of impairments
recognized during the 2008 second quarter.
    
    Decrease in office properties and equipment due to the completion of the sale of the
Central Florida stores to an unrelated financial institution during the 2008 second
quarter;
    
    Increase in deferred tax assets primarily resulting from the operating losses during
the nine months ended September 30, 2008 and lower securities available for sale
unrealized gains; and
    
    Decline in other assets reflecting the receipt of income tax refunds associated with
the carryback of taxable losses for the year ended December 31, 2007.
  
    
    Lower non-interest-bearing deposit balances primarily due to the migration of customer
accounts to interest-paying NOW accounts as BankAtlantic offered high yield checking
accounts in response to the competitive deposit pricing environment;
    
    Interest bearing deposits declined slightly primarily due to significant declines in
money market and savings accounts partially offset by increased NOW and certificate
account balances.
    
    Higher certificate account balances primarily resulted from certificate promotions
during 2008;
    
    Increase in FHLB borrowings in order to maintain higher cash balances associated with
daily cash management activities ;
    
    Lower short term borrowings reflecting a decline in earning assets; and
    
    Decrease in other liabilities primarily resulting from $18.9 million of securities
purchased in December 2007 pending settlement in January 2008 partially offset by higher
loan receivable escrow balances.
 67




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 Liquidity and Capital Resources
 BankAtlantic Bancorp, Inc. Liquidity and Capital Resources
     As of September 30, 2008Gross
    
    
    GrossCarrying
    
    
    Unrealized
    
    
    Unrealized
    
    
    Estimated(in thousands)
    
    Value
    
    
    Appreciation
    
    
    Depreciation
    
    
    Fair ValueCash and cash equivalents
    
    $
    41,031
    
    
    
    
    
    
    
    
    
    
    
    41,031Equity securities
    
    
    5,010
    
    
    
    
    
    
    
    1,318
    
    
    
    3,692Private investment securities
    
    
    2,036
    
    
    
    776
    
    
    
    
    
    
    
    2,812Total
    
    $
    48,077
    
    
    
    776
    
    
    
    1,318
    
    
    
    47,535
  68




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
   BankAtlantic Liquidity and Capital Resources
   69




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
       70




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
  Minimum RatiosAdequately
    
    
    WellActual
    
    
    Capitalized
    
    
    CapitalizedAmount
    
    
    Ratio
    
    
    Ratio
    
    
    RatioAt September 30, 2008:Total risk-based capital
    
    $
    485,983
    
    
    
    11.75
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based capital
    
    
    411,665
    
    
    
    9.95
    
    
    
    4.00
    
    
    
    6.00Tangible capital
    
    
    411,665
    
    
    
    6.89
    
    
    
    1.50
    
    
    
    1.50Core capital
    
    
    411,665
    
    
    
    6.89
    
    
    
    4.00
    
    
    
    5.00At December 31, 2007:Total risk-based capital
    
    $
    495,668
    
    
    
    11.63
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based capital
    
    
    420,063
    
    
    
    9.85
    
    
    
    4.00
    
    
    
    6.00Tangible capital
    
    
    420,063
    
    
    
    6.94
    
    
    
    1.50
    
    
    
    1.50Core capital
    
    
    420,063
    
    
    
    6.94
    
    
    
    4.00
    
    
    
    5.00
  Off Balance Sheet Arrangements  Contractual Obligations as of September 30, 2008 (in thousands):
 Payments Due by Period (2)Less than
    
    
    
    
    
    
    
    
    
    
    After 5Contractual Obligations
    
    Total
    
    
    1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    yearsTime deposits
    
    $
    1,235,936
    
    
    
    1,117,952
    
    
    
    77,420
    
    
    
    40,564
    
    
    
    Long-term debt
    
    
    320,293
    
    
    
    
    
    
    
    
    
    
    
    22,000
    
    
    
    298,293Advances from FHLB (1)
    
    
    1,468,000
    
    
    
    910,000
    
    
    
    558,000
    
    
    
    
    
    
    
    Operating lease obligations held for sublease
    
    
    44,388
    
    
    
    2,248
    
    
    
    5,591
    
    
    
    3,563
    
    
    
    32,986Operating lease obligations held for use
    
    
    70,050
    
    
    
    7,796
    
    
    
    17,037
    
    
    
    7,483
    
    
    
    37,734Pension obligation
    
    
    15,041
    
    
    
    983
    
    
    
    2,588
    
    
    
    2,873
    
    
    
    8,597Other obligations
    
    
    19,850
    
    
    
    2,750
    
    
    
    5,900
    
    
    
    6,400
    
    
    
    4,800Total contractual cash obligations
    
    $
    3,173,558
    
    
    
    2,041,729
    
    
    
    666,536
    
    
    
    82,883
    
    
    
    382,410
 
 (1)
    
    Payments due by period are based on contractual maturities.(2)
    
    The above table excludes interest payments on interest bearing liabilities. 71




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##### Table of Contents



Real Estate Development
(Woodbridge)
 Real Estate Development
 The Real Estate Development activities of BFC are comprised of the operations of Woodbridge
Holdings Corporation and its subsidiaries. Woodbridge in 2008 presents its results in two
reportable segments and its results of operations are consolidated with BFC Financial Corporation.
The only assets available to BFC Financial Corporation are dividends when and if paid by
Woodbridge. Woodbridge is a separate public company and its management prepared the following
discussion regarding Woodbridge which was included in Woodbridges Quarterly Report on Form 10-Q
for the quarter ended September 30, 2008 filed with the Securities and Exchange Commission.
Accordingly, references to the Company, we, us or our in the following discussion under the
caption Real Estate Development are references to Woodbridge Holdings Corporation and its
subsidiaries, and are not references to BFC Financial Corporation.
     
    
    the impact of economic, competitive and other factors affecting the Company and its
operations;
    
    the market for real estate in the areas where the Company has developments, including
the impact of market conditions on the Companys margins;
 72




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##### Table of Contents



Real Estate Development
(Woodbridge)
 
    
    the risk that the value of the property held by Core Communities and Carolina Oak may
decline, including as a result of a sustained downturn in the residential real estate and
homebuilding industries;
    
    the impact of market conditions for commercial property and the extent to which the
factors negatively impacting the homebuilding and residential real estate industries will
impact the market for commercial property;
    
    the risk that the recent downturn in the credit markets may adversely affect Cores
commercial leasing projects, including due to the impact it may have on the ability of
current and potential tenants to secure financing which may, in turn, negatively impact
long-term rental and occupancy rates as well as the value of Cores commercial properties;
    
    the risk that the development of parcels and master-planned communities will not be
completed as anticipated;
    
    continued declines in the estimated fair value of our real estate inventory and the
potential for write-downs or impairment charges;
    
    the effects of increases in interest rates on us and the availability and cost of credit
to buyers of our inventory;
    
    the impact of the problems in financial and credit markets on our ability and the
ability of buyers of our inventory to obtain financing on acceptable terms, if at all;
    
    accelerated principal payments on our debt obligations due to re-margining or
curtailment payment requirements;
    
    the ability to obtain financing and to renew existing credit facilities on acceptable
terms, if at all;
    
    the risk that Woodbridge may be required to adjust the carrying value of its investment
in Office Depot and incur impairment charges relating to this investment in future periods
if the trading price of Office Depots common stock does not increase from current levels
and the risk that Woodbridge may be required to record a further other-than-temporary
impairment charge relating to its investment in Bluegreen in the future;
    
    the Companys ability to access additional capital on acceptable terms, if at all;
    
    the risks and uncertainties inherent in bankruptcy proceedings and the inability to
predict the effect of Levitt and Sons liquidation process on Woodbridge, as well as the
potential impact of the assertion of claims against Woodbridge in connection with these
proceedings, its results of operations and financial condition;
    
    equity risks associated with a decline in the trading prices of the equity securities
owned by Woodbridge;
    
    the risk that creditors of Levitt and Sons may be successful in asserting claims against
Woodbridge;
    
    the risks relating to the Settlement Agreement and the amendment to the Settlement
Agreement, including, without limitation, that the conditions to consummation of the
Settlement Agreement, as amended, will not be met, that the Settlement Agreement, as
amended, will not be approved by the Bankruptcy Court when expected, or at all, and that,
in the event the Settlement Agreement, as amended, is approved by the Bankruptcy Court,
such approval will be appealed;
    
    the risk that the announced acquisition by a third party of Bluegreen will not be
consummated on the terms proposed, or at all;
    
    the risks related to the Companys ability to comply with the continued listing
requirements of the New York Stock Exchange;
    
    the risks associated with the businesses in which the Company holds investments;
    
    the Companys success in pursuing strategic alternatives that could enhance liquidity;
and
    
    the Companys success at managing the risks involved in the foregoing.
  Executive Overview
  73




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##### Table of Contents



Real Estate Development
(Woodbridge)
    Financial and Non-Financial Metrics
  Land Division Overview
  74




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##### Table of Contents



Real Estate Development
(Woodbridge)
   Other Operations Overview
     75




---



##### Table of Contents



Real Estate Development
(Woodbridge)
   Critical Accounting Policies and Estimates
  Investments in Unconsolidated Subsidiaries  Cost Method
  76




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##### Table of Contents



Real Estate Development
(Woodbridge)
 CONSOLIDATED RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    Change(In thousands)
    
    ( U n a u d i t e d )
    
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    10,522
    
    
    
    122,824
    
    
    
    (112,302
    )
    
    
    13,071
    
    
    
    389,486
    
    
    
    (376,415
    )Other revenues
    
    
    762
    
    
    
    1,449
    
    
    
    (687
    )
    
    
    2,318
    
    
    
    5,063
    
    
    
    (2,745
    )Total revenues
    
    
    11,284
    
    
    
    124,273
    
    
    
    (112,989
    )
    
    
    15,389
    
    
    
    394,549
    
    
    
    (379,160
    )Costs and expensesCost of sales of real estate
    
    
    7,015
    
    
    
    275,340
    
    
    
    (268,325
    )
    
    
    8,801
    
    
    
    559,842
    
    
    
    (551,041
    )Selling, general and
administrative expenses
    
    
    11,423
    
    
    
    31,556
    
    
    
    (20,133
    )
    
    
    35,937
    
    
    
    96,887
    
    
    
    (60,950
    )Interest expense
    
    
    1,785
    
    
    
    
    
    
    
    1,785
    
    
    
    6,650
    
    
    
    
    
    
    
    6,650Other expenses
    
    
    
    
    
    
    1,112
    
    
    
    (1,112
    )
    
    
    
    
    
    
    2,007
    
    
    
    (2,007
    )Total costs and expenses
    
    
    20,223
    
    
    
    308,008
    
    
    
    (287,785
    )
    
    
    51,388
    
    
    
    658,736
    
    
    
    (607,348
    )Earnings from Bluegreen Corporation
    
    
    2,241
    
    
    
    4,418
    
    
    
    (2,177
    )
    
    
    3,978
    
    
    
    7,519
    
    
    
    (3,541
    )Interest and other income
    
    
    1,247
    
    
    
    3,109
    
    
    
    (1,862
    )
    
    
    4,792
    
    
    
    8,743
    
    
    
    (3,951
    )Impairment of investment in Bluegreen
    
    
    (53,576
    )
    
    
    
    
    
    
    (53,576
    )
    
    
    (53,576
    )
    
    
    
    
    
    
    (53,576
    )Loss from continuing operations
before income taxes
    
    
    (59,027
    )
    
    
    (176,208
    )
    
    
    117,181
    
    
    
    (80,805
    )
    
    
    (247,925
    )
    
    
    167,120Benefit for income taxes
    
    
    
    
    
    
    6,228
    
    
    
    (6,228
    )
    
    
    
    
    
    
    20,729
    
    
    
    (20,729
    )Loss from continuing operations
    
    
    (59,027
    )
    
    
    (169,980
    )
    
    
    110,953
    
    
    
    (80,805
    )
    
    
    (227,196
    )
    
    
    146,391Discontinued operations:Income from discontinued
operations, net of tax
    
    
    3,024
    
    
    
    812
    
    
    
    2,212
    
    
    
    5,429
    
    
    
    917
    
    
    
    4,512Net loss
    
    $
    (56,003
    )
    
    
    (169,168
    )
    
    
    113,165
    
    
    
    (75,376
    )
    
    
    (226,279
    )
    
    
    150,903
 For the Three Months Ended September 30, 2008 Compared to the Same 2007 Period:
    77




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Real Estate Development
(Woodbridge)
       78




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##### Table of Contents



Real Estate Development
(Woodbridge)
   For the Nine Months Ended September 30, 2008 Compared to the Same 2007 Period:
     79




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##### Table of Contents



Real Estate Development
(Woodbridge)
        80




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##### Table of Contents



Real Estate Development
(Woodbridge)
 LAND DIVISION RESULTS OF OPERATIONS
 Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    Change(Dollars in thousands)
    
    ( U n a u d i t e d )
    
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    8,450
    
    
    
    757
    
    
    
    7,693
    
    
    
    10,315
    
    
    
    3,451
    
    
    
    6,864Other revenues
    
    
    486
    
    
    
    711
    
    
    
    (225
    )
    
    
    1,532
    
    
    
    2,494
    
    
    
    (962
    )Total revenues
    
    
    8,936
    
    
    
    1,468
    
    
    
    7,468
    
    
    
    11,847
    
    
    
    5,945
    
    
    
    5,902Costs and expensesCost of sales of real estate
    
    
    5,029
    
    
    
    256
    
    
    
    4,773
    
    
    
    6,202
    
    
    
    811
    
    
    
    5,391Selling, general and administrative expenses
    
    
    5,078
    
    
    
    4,152
    
    
    
    926
    
    
    
    14,864
    
    
    
    11,421
    
    
    
    3,443Interest expense
    
    
    40
    
    
    
    829
    
    
    
    (789
    )
    
    
    1,213
    
    
    
    1,851
    
    
    
    (638
    )Total costs and expenses
    
    
    10,147
    
    
    
    5,237
    
    
    
    4,910
    
    
    
    22,279
    
    
    
    14,083
    
    
    
    8,196Interest and other income
    
    
    961
    
    
    
    1,354
    
    
    
    (393
    )
    
    
    2,517
    
    
    
    3,414
    
    
    
    (897
    )Loss from continuing operations before income taxes
    
    
    (250
    )
    
    
    (2,415
    )
    
    
    2,165
    
    
    
    (7,915
    )
    
    
    (4,724
    )
    
    
    (3,191
    )Benefit for income taxes
    
    
    
    
    
    
    728
    
    
    
    (728
    )
    
    
    
    
    
    
    1,701
    
    
    
    (1,701
    )Loss from continuing operations
    
    
    (250
    )
    
    
    (1,687
    )
    
    
    1,437
    
    
    
    (7,915
    )
    
    
    (3,023
    )
    
    
    (4,892
    )Discontinued operations:Income from discontinued operations, net of tax
    
    
    3,024
    
    
    
    812
    
    
    
    2,212
    
    
    
    5,429
    
    
    
    917
    
    
    
    4,512Net income (loss)
    
    $
    2,774
    
    
    
    (875
    )
    
    
    3,649
    
    
    
    (2,486
    )
    
    
    (2,106
    )
    
    
    (380
    )Acres sold (a)
    
    
    36
    
    
    
    1
    
    
    
    35
    
    
    
    39
    
    
    
    2
    
    
    
    37Margin percentage (b)
    
    
    40.5
    %
    
    
    66.2
    %
    
    
    (25.7
    )%
    
    
    39.9
    %
    
    
    76.5
    %
    
    
    (36.6
    )%Unsold saleable acres (c)
    
    
    6,641
    
    
    
    6,717
    
    
    
    (76
    )
    
    
    6,641
    
    
    
    6,717
    
    
    
    (76
    )Acres subject to sales contracts  third parties
    
    
    17
    
    
    
    291
    
    
    
    (274
    )
    
    
    17
    
    
    
    291
    
    
    
    (274
    )Aggregate sales price of acres subject to sales contracts to third parties
    
    $
    1,879
    
    
    
    92,451
    
    
    
    (90,572
    )
    
    
    1,879
    
    
    
    92,451
    
    
    
    (90,572
    )
 
 (a)
    
    Includes 5 acres sold in the third quarter of 2008 related to assets held for sale.(b)
    
    Sales of real estate and margin percentage include lot sales, revenues from look back provisions and recognition of deferred revenue associated with sales in prior periods. Excludes margin percentage related to assets held for sale, which
was 42.8% for the three and nine months ended September 30, 2008.(c)
    
    Includes approximately 48 acres related to assets held for sale as of September 30, 2008.  81




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Real Estate Development
(Woodbridge)
  For the Three Months Ended September 30, 2008 Compared to the Same 2007 Period:
        82




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##### Table of Contents



Real Estate Development
(Woodbridge)
 For the Nine Months Ended September 30, 2008 Compared to the Same 2007 Period:
        83




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##### Table of Contents



Real Estate Development
(Woodbridge)
 OTHER OPERATIONS RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    Change(In thousands)
    
    ( U n a u d i t e d )
    
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    1,847
    
    
    
    
    
    
    
    1,847
    
    
    
    2,482
    
    
    
    6,574
    
    
    
    (4,092
    )Other revenues
    
    
    276
    
    
    
    258
    
    
    
    18
    
    
    
    786
    
    
    
    693
    
    
    
    93Total revenues
    
    
    2,123
    
    
    
    258
    
    
    
    1,865
    
    
    
    3,268
    
    
    
    7,267
    
    
    
    (3,999
    )Costs and expensesCost of sales of real estate
    
    
    1,906
    
    
    
    10,259
    
    
    
    (8,353
    )
    
    
    2,493
    
    
    
    16,778
    
    
    
    (14,285
    )Selling, general and administrative expenses
    
    
    6,496
    
    
    
    6,776
    
    
    
    (280
    )
    
    
    21,243
    
    
    
    21,940
    
    
    
    (697
    )Interest expense
    
    
    1,745
    
    
    
    
    
    
    
    1,745
    
    
    
    6,522
    
    
    
    
    
    
    
    6,522Other expenses
    
    
    
    
    
    
    536
    
    
    
    (536
    )
    
    
    
    
    
    
    536
    
    
    
    (536
    )Total costs and expenses
    
    
    10,147
    
    
    
    17,571
    
    
    
    (7,424
    )
    
    
    30,258
    
    
    
    39,254
    
    
    
    (8,996
    )Earnings from Bluegreen Corporation
    
    
    2,241
    
    
    
    4,418
    
    
    
    (2,177
    )
    
    
    3,978
    
    
    
    7,519
    
    
    
    (3,541
    )Interest and other income
    
    
    470
    
    
    
    285
    
    
    
    185
    
    
    
    3,544
    
    
    
    933
    
    
    
    2,611Impairment of investment in Bluegreen
    
    
    (53,576
    )
    
    
    
    
    
    
    (53,576
    )
    
    
    (53,576
    )
    
    
    
    
    
    
    (53,576
    )Loss before income taxes
    
    
    (58,889
    )
    
    
    (12,610
    )
    
    
    (46,279
    )
    
    
    (73,044
    )
    
    
    (23,535
    )
    
    
    (49,509
    )Benefit for income taxes
    
    
    
    
    
    
    4,594
    
    
    
    (4,594
    )
    
    
    
    
    
    
    7,500
    
    
    
    (7,500
    )Net loss
    
    $
    (58,889
    )
    
    
    (8,016
    )
    
    
    (50,873
    )
    
    
    (73,044
    )
    
    
    (16,035
    )
    
    
    (57,009
    )
  For the Three Months Ended September 30, 2008 Compared to the Same 2007 Period:
    84




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##### Table of Contents



Real Estate Development
(Woodbridge)
    For the Nine Months Ended September 30, 2008 Compared to the Same 2007 Period:
       85




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##### Table of Contents



Real Estate Development
(Woodbridge)
 PRIMARY HOMEBUILDING SEGMENT RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    Change(Dollars in thousands)
    
    ( U n a u d i t e d )
    
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    
    
    
    
    112,885
    
    
    
    (112,885
    )
    
    
    
    
    
    
    340,202
    
    
    
    (340,202
    )Other revenues
    
    
    
    
    
    
    614
    
    
    
    (614
    )
    
    
    
    
    
    
    2,213
    
    
    
    (2,213
    )Total revenues
    
    
    
    
    
    
    113,499
    
    
    
    (113,499
    )
    
    
    
    
    
    
    342,415
    
    
    
    (342,415
    )Costs and expensesCost of sales of real estate
    
    
    
    
    
    
    247,388
    
    
    
    (247,388
    )
    
    
    
    
    
    
    496,663
    
    
    
    (496,663
    )Selling, general and administrative expenses
    
    
    
    
    
    
    19,252
    
    
    
    (19,252
    )
    
    
    
    
    
    
    58,348
    
    
    
    (58,348
    )Other expenses
    
    
    
    
    
    
    575
    
    
    
    (575
    )
    
    
    
    
    
    
    1,470
    
    
    
    (1,470
    )Total costs and expenses
    
    
    
    
    
    
    267,215
    
    
    
    (267,215
    )
    
    
    
    
    
    
    556,481
    
    
    
    (556,481
    )Interest and other income
    
    
    
    
    
    
    2,274
    
    
    
    (2,274
    )
    
    
    
    
    
    
    6,475
    
    
    
    (6,475
    )Loss before income taxes
    
    
    
    
    
    
    (151,442
    )
    
    
    151,442
    
    
    
    
    
    
    
    (207,591
    )
    
    
    207,591Benefit for income taxes
    
    
    
    
    
    
    1,866
    
    
    
    (1,866
    )
    
    
    
    
    
    
    11,680
    
    
    
    (11,680
    )Net loss
    
    $
    
    
    
    
    (149,576
    )
    
    
    149,576
    
    
    
    
    
    
    
    (195,911
    )
    
    
    195,911Homes delivered (units)
    
    
    
    
    
    
    332
    
    
    
    (332
    )
    
    
    
    
    
    
    982
    
    
    
    (982
    )Construction starts (units)
    
    
    
    
    
    
    181
    
    
    
    (181
    )
    
    
    
    
    
    
    558
    
    
    
    (558
    )Average selling price of homes delivered
    
    $
    
    
    
    
    316
    
    
    
    (316
    )
    
    
    
    
    
    
    338
    
    
    
    (338
    )Margin percentage
    
    
    
    
    
    
    (119.2
    )%
    
    
    119.2
    %
    
    
    
    
    
    
    (46.0
    )%
    
    
    46.0
    %Gross orders (units)
    
    
    
    
    
    
    159
    
    
    
    (159
    )
    
    
    
    
    
    
    753
    
    
    
    (753
    )Gross orders (value)
    
    $
    
    
    
    
    47,037
    
    
    
    (47,037
    )
    
    
    
    
    
    
    219,687
    
    
    
    (219,687
    )Cancellations (units)
    
    
    
    
    
    
    102
    
    
    
    (102
    )
    
    
    
    
    
    
    352
    
    
    
    (352
    )Net orders (units)
    
    
    
    
    
    
    57
    
    
    
    (57
    )
    
    
    
    
    
    
    401
    
    
    
    (401
    )Backlog of homes (units)
    
    
    
    
    
    
    545
    
    
    
    (545
    )
    
    
    
    
    
    
    545
    
    
    
    (545
    )Backlog of homes (value)
    
    $
    
    
    
    
    179,796
    
    
    
    (179,796
    )
    
    
    
    
    
    
    179,796
    
    
    
    (179,796
    )
   86




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##### Table of Contents



Real Estate Development
(Woodbridge)
 TENNESSEE HOMEBUILDING SEGMENT RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    Change(Dollars in thousands)
    
    ( U n a u d i t e d )
    
    
    ( U n a u d i t e d )RevenuesSales of real estate
    
    $
    
    
    
    
    9,339
    
    
    
    (9,339
    )
    
    
    
    
    
    
    39,844
    
    
    
    (39,844
    )Total revenues
    
    
    
    
    
    
    9,339
    
    
    
    (9,339
    )
    
    
    
    
    
    
    39,844
    
    
    
    (39,844
    )Costs and expensesCost of sales of real estate
    
    
    
    
    
    
    19,822
    
    
    
    (19,822
    )
    
    
    
    
    
    
    49,156
    
    
    
    (49,156
    )Selling, general and administrative expenses
    
    
    
    
    
    
    1,552
    
    
    
    (1,552
    )
    
    
    
    
    
    
    5,416
    
    
    
    (5,416
    )Total costs and expenses
    
    
    
    
    
    
    21,374
    
    
    
    (21,374
    )
    
    
    
    
    
    
    54,572
    
    
    
    (54,572
    )Interest and other income
    
    
    
    
    
    
    25
    
    
    
    (25
    )
    
    
    
    
    
    
    77
    
    
    
    (77
    )Loss before income taxes
    
    
    
    
    
    
    (12,010
    )
    
    
    12,010
    
    
    
    
    
    
    
    (14,651
    )
    
    
    14,651Benefit for income taxes
    
    
    
    
    
    
    (100
    )
    
    
    100
    
    
    
    
    
    
    
    824
    
    
    
    (824
    )Net loss
    
    $
    
    
    
    
    (12,110
    )
    
    
    12,110
    
    
    
    
    
    
    
    (13,827
    )
    
    
    13,827Homes delivered (units)
    
    
    
    
    
    
    43
    
    
    
    (43
    )
    
    
    
    
    
    
    134
    
    
    
    (134
    )Construction starts (units)
    
    
    
    
    
    
    55
    
    
    
    (55
    )
    
    
    
    
    
    
    167
    
    
    
    (167
    )Average selling price of homes delivered
    
    $
    
    
    
    
    196
    
    
    
    (196
    )
    
    
    
    
    
    
    207
    
    
    
    (207
    )Margin percentage
    
    
    
    
    
    
    (112.2
    )%
    
    
    112.2
    %
    
    
    
    
    
    
    (23.4
    )%
    
    
    23.4
    %Gross orders (units)
    
    
    
    
    
    
    47
    
    
    
    (47
    )
    
    
    
    
    
    
    216
    
    
    
    (216
    )Gross orders (value)
    
    $
    
    
    
    
    10,649
    
    
    
    (10,649
    )
    
    
    
    
    
    
    47,283
    
    
    
    (47,283
    )Cancellations (units)
    
    
    
    
    
    
    55
    
    
    
    (55
    )
    
    
    
    
    
    
    118
    
    
    
    (118
    )Net orders (units)
    
    
    
    
    
    
    (8
    )
    
    
    8
    
    
    
    
    
    
    
    98
    
    
    
    (98
    )Backlog of homes (units)
    
    
    
    
    
    
    86
    
    
    
    (86
    )
    
    
    
    
    
    
    86
    
    
    
    (86
    )Backlog of homes (value)
    
    $
    
    
    
    
    17,608
    
    
    
    (17,608
    )
    
    
    
    
    
    
    17,608
    
    
    
    (17,608
    )
  87




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Real Estate Development
(Woodbridge)
 FINANCIAL CONDITION
 September 30, 2008 compared to December 31, 2007
  
    
    a net decrease in cash and cash equivalents of $51.3 million, which resulted from
cash used in operations of $16.3 million, cash used in investing activities of $12.1
million and cash used in financing activities of $22.9 million;
    
    a decrease in current income tax receivable as a result of a $29.7 million federal
income tax refund;
    
    a decrease in the carrying value of our investment in Bluegreen due to an
other-than-temporary impairment charge of $53.6 million;
    
    a net increase of the investment in other equity securities of $11.4 million as a
result of the acquisition (net of shares sold) of shares of Office Depot and a $3.0
million investment in Pizza Fusion;
    
    a net increase in inventory of real estate of $13.4 million mainly due to the land
development activities of the Land Division; and
    
    a decrease in assets held for sale of $3.5 million mainly as a result of the sale of
three ground lease parcels in the Land Division.
  
    
    a net decrease in notes and mortgage notes payable of $18.4 million, primarily due
to curtailment payments made in connection with a development loan collateralized by
land in Tradition Hilton Head;
    
    a net decrease in accounts payable and other accrued liabilities of approximately
$6.8 million mainly attributable to decreased severance and construction related
accruals due to payments made during the nine months ended September 30, 2008; and
    
    a decrease in liabilities related to assets held for sale of $3.1 million mainly as
a result of the repayment of debt in connection with the sale of three ground lease
parcels in the Land Division.
 LIQUIDITY AND CAPITAL RESOURCES
    88




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Real Estate Development
(Woodbridge)
 Woodbridge (Parent Company level)
     89




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Real Estate Development
(Woodbridge)
  Core Communities
      90




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Real Estate Development
(Woodbridge)
  Off Balance Sheet Arrangements and Contractual Obligations
  Accounting for Contingencies
 Accounting for Special
Assessments and Tax Increment Financing
 91




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##### Table of Contents



Real Estate Development
(Woodbridge)
  Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations (1) (2)
    
    $
    256,417
    
    
    
    27,936
    
    
    
    116,010
    
    
    
    3,873
    
    
    
    108,598Long-term debt obligations associated with assets held for sale
    
    
    75,110
    
    
    
    272
    
    
    
    71,788
    
    
    
    109
    
    
    
    2,941Operating lease obligations
    
    
    4,430
    
    
    
    1,508
    
    
    
    1,363
    
    
    
    440
    
    
    
    1,119Total obligations
    
    $
    335,957
    
    
    
    29,716
    
    
    
    189,161
    
    
    
    4,422
    
    
    
    112,658
 
 (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. Some of those borrowings require the repayment of specified amounts upon a sale of portions of the property collateralizing those obligations, as well as curtailment repayments prior
to scheduled maturity pursuant to re-margining and minimum sales requirements. Accounting for Uncertainty in Income Taxes  an interpretation of FASB No. 109
     92




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  BFC
    BankAtlantic Bancorp
  Woodbridge
    93




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Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  94




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
   Albert R. Feldman, Derivatively on behalf of Nominal Defendant BankAtlantic Bancorp, Inc. v. Alan
B. Levan, et al., Case No. 08-46795 (07) (17th Judicial Circuit, Broward County, Florida)
  Chapter 11 Cases
    95




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##### Table of Contents



Surety Bond Claim
  
 Item 1A. Risk Factors
  The following discussion relates to BankAtlantic Bancorp, and its subsidiary, BankAtlantic:
 The trading price of BankAtlantic Bancorp common stock, which has substantially declined over the last year, may negatively impact BankAtlantic Bancorp.
  There can be no assurance that recently enacted legislation will stabilize the U.S. financial
system.
   96




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The impact on us of recently enacted legislation, in particular the Emergency Economic
Stabilization Act of 2008 and its implementing regulations, and actions by the FDIC, cannot be
predicted at this time.
  The following discussion relates to Woodbridge and its subsidiaries:
 Woodbridge is subject to the risks of the businesses that it currently holds investments in, and
its future acquisitions may reduce its earnings, require Woodbridge to obtain additional financing
and expose Woodbridge to additional risks.
  
    
    fail to accomplish its strategic objectives;
    
    not perform as expected; and/or
    
    expose Woodbridge to the risks of the business that Woodbridge acquires.
  If current economic and credit market conditions do not improve and the book value of Woodbridges
investments continue to exceed the trading value of the shares it owns, Woodbridge may incur additional
impairment charges in the future relating to those investments, which would adversely impact our
financial condition and operating results.
  97




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If Woodbridge cannot comply with the continued listing requirements of the New York Stock Exchange,
its Class A Common Stock will be subject to delisting from the New York Stock Exchange.
  The commercial property market has been adversely affected by the current economic and credit
environment.
  
    
    Core is at risk to the extent that a significant tenant or a number of tenants file for
bankruptcy protection, creating the possibility that past due rents may never be recovered.
    
    Leases with certain existing tenants may become overly burdensome to the lessee due to
reduced business activity. Lease concessions and modifications may be necessary to avoid
defaults.
    
    Economic conditions and availability of credit may deteriorate further, causing market
capitalization rates on commercial properties to increase beyond present levels, thus
reducing the value at which commercial projects can be sold
    
    Reduced net operating income for the commercial leasing projects may cause project loans to
be in violation of certain debt service coverage ratio requirements. This could require
Core to make additional principal curtailment payments sufficient to bring the loans into
compliance.
 98




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Total Number of
    
    
    Maximum Number ofShares Purchased as
    
    
    Shares thatPart of Publicly
    
    
    May Yet Be PurchasedTotal Number of
    
    
    Average Price
    
    
    Announced Plans
    
    
    Under the Plans orPeriod
    
    Shares Purchased (1)
    
    
    Paid Per share
    
    
    or Programs (1)
    
    
    ProgramsJuly 1, 2008 to
July 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,750,000August 1, 2008 to
August 31, 2008
    
    
    24,371
    
    
    $
    0.51
    
    
    
    24,371
    
    
    
    1,725,629September 1, 2008 to
September 30, 2008
    
    
    64,182
    
    
    $
    0.54
    
    
    
    64,182
    
    
    
    1,661,447Total
    
    
    88,553
    
    
    $
    0.53
    
    
    
    88,553
    
    
    
    1,661,447
 
 (1)
    
    On October 24, 2006, the Companys Board of Directors approved the repurchase of up to 1,750,000 shares of its
Class A Common Stock at an aggregate cost of no more $10.0 million. During August and September 2008, the Company
repurchased in the open market an aggregate of 88,553 shares at an average price of $0.53 per share. In October
2008, the Company repurchased 11,447 shares of its Class A Common Stock at an average price of $0.55 per share. As
a result of these shares repurchases, 1,650,000 shares of the Companys Class A Common Stock remain available for
repurchase under the plan. These remaining shares may be repurchased in the open market or through private
transactions. The timing and the amount of repurchases, if any, will depend on market conditions, share price,
trading volume and other factors, and there is no assurance that the Company will repurchase any or all of the
remaining shares in the future. 
 Item 6. Exhibits
 Exhibit 31.1*
    
    Chief Executive Officer Certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 31.2*
    
    Chief Financial Officer Certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 31.3*
    
    Chief Accounting Officer Certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 32.1**
    
    Chief Executive Officer Certification pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002Exhibit 32.2**
    
    Chief Financial Officer Certification pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002Exhibit 32.3**
    
    Chief Accounting Officer Certification pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
 
 *
    
    Exhibits filed with this Form 10-Q**
    
    Exhibits furnished with this Form 10-Q 99




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BFC FINANCIAL CORPORATIONDate:    November 10, 2008
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive Officer Date:    November 10, 2008
    By:
    /s/  John K. GrelleJohn K. Grelle, Chief Financial Officer Date:    November 10, 2008
    By:
    /s/  Maria R. SchekerMaria R. Scheker, Chief Accounting Officer 100