UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended September 30, 2008
		OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from                      to

Commission file number: 001-31931

WOODBRIDGE HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)

Florida (State or other jurisdiction of incorporation or organization)		11-3675068 (I.R.S. Employer Identification No.)
2100 W. Cypress Creek Road, Fort Lauderdale, FL (Address of principal executive offices)		33309 (Zip Code)

(954) 940-4950
(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x          No o     

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer þ		Non-accelerated filer o		Smaller reporting company o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o          No x     

     Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Class		Outstanding at November 6, 2008
Class A common stock, $0.01 par value			19,042,149
Class B common stock, $0.01 par value			243,807

 

 

Woodbridge Holdings Corporation
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2008

TABLE OF CONTENTS

PART I.		FINANCIAL INFORMATION
Item 1.		Financial Statements
		Consolidated Statements of Financial Condition as of September 30, 2008 and December 31, 2007 — Unaudited			1
		Consolidated Statements of Operations for the three and nine months ended September 30, 2008 and 2007 — Unaudited			2
		Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2008 and 2007 — Unaudited			3
		Consolidated Statement of Shareholders’ Equity for the nine months ended September 30, 2008 — Unaudited			4
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2008 and 2007 — Unaudited			5
		Notes to Unaudited Consolidated Financial Statements			6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			32
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			57
Item 4.		Controls and Procedures			57
PART II.		OTHER INFORMATION
Item 1.		Legal Proceedings			58
Item 1A.		Risk Factors			58
Item 6.		Exhibits			60
SIGNATURES					61
EX-10.1 Amended & Restated 2003 Stock Incentive Plan
EX-31.1 Section 302 Certification of CEO
EX-31.2 Section 302 Certification of CFO
EX-32.1 Section 906 Certification of CEO
EX-32.2 Section 906 Certification of CFO

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Woodbridge Holdings Corporation
Consolidated Statements of Financial Condition — Unaudited
(In thousands, except share data)

		September 30,				December 31,
		2008				2007
Assets
Cash and cash equivalents		$	143,889				195,181
Restricted cash			814				2,207
Current income tax receivable			—				27,407
Inventory of real estate			240,701				227,290
Assets held for sale			92,674				96,214
Investments:
Bluegreen Corporation			65,765				116,014
Other equity securities			11,352				—
Other			2,564				2,565
Property and equipment, net			32,589				33,566
Other assets			13,102				12,407
Total assets		$	603,450				712,851
Liabilities and Shareholders’ Equity
Accounts payable, accrued liabilities and other		$	34,796				41,618
Current income tax payable			2,380				—
Liabilities related to assets held for sale			76,957				80,093
Notes and mortgage notes payable			171,365				189,768
Junior subordinated debentures			85,052				85,052
Loss in excess of investment in subsidiary			55,214				55,214
Total liabilities			425,764				451,745
Shareholders’ equity:
Preferred stock, $0.01 par value
Authorized: 5,000,000 shares
Issued and outstanding: no shares			—				—
Class A Common Stock, $0.01 par value
Authorized: 30,000,000 shares
Issued and outstanding: 19,042,149 and 19,010,804 shares, respectively			190				190
Class B Common Stock, $0.01 par value
Authorized: 2,000,000 shares
Issued and outstanding: 243,807 shares			2				2
Additional paid-in capital			338,922				337,565
Accumulated deficit			(153,913	)			(78,537	)
Accumulated other comprehensive (loss) income			(7,515	)			1,886
Total shareholders’ equity			177,686				261,106
Total liabilities and shareholders’ equity		$	603,450				712,851

See accompanying notes to unaudited consolidated financial statements.

Woodbridge Holdings Corporation
Consolidated Statements of Operations — Unaudited
(In thousands, except per share data)

		Three Months								Nine Months
		Ended September 30,								Ended September 30,
		2008				2007				2008				2007
Revenues:
Sales of real estate		$	10,522				122,824				13,071				389,486
Other revenues			762				1,449				2,318				5,063
Total revenues			11,284				124,273				15,389				394,549
Costs and expenses:
Cost of sales of real estate			7,015				275,340				8,801				559,842
Selling, general and administrative expenses			11,423				31,556				35,937				96,887
Interest expense			1,785				—				6,650				—
Other expenses			—				1,112				—				2,007
Total costs and expenses			20,223				308,008				51,388				658,736
Earnings from Bluegreen Corporation			2,241				4,418				3,978				7,519
Interest and other income			1,247				3,109				4,792				8,743
Impairment of investment in Bluegreen			(53,576	)			—				(53,576	)			—
Loss from continuing operations before income taxes			(59,027	)			(176,208	)			(80,805	)			(247,925	)
Benefit for income taxes			—				6,228				—				20,729
Loss from continuing operations			(59,027	)			(169,980	)			(80,805	)			(227,196	)
Discontinued operations:
Income from discontinued operations, net of tax			3,024				812				5,429				917
Net loss		$	(56,003	)			(169,168	)			(75,376	)			(226,279	)
Basic loss per common share:
Continuing operations		$	(3.06	)			(42.03	)			(4.19	)			(56.18	)
Discontinued operations			0.15				0.20				0.28				0.22
Total basic loss per common share		$	(2.91	)			(41.83	)			(3.91	)			(55.96	)
Diluted loss per common share:
Continuing operations		$	(3.06	)			(42.03	)			(4.19	)			(56.18	)
Discontinued operations			0.15				0.20				0.28				0.22
Total diluted loss per common share		$	(2.91	)			(41.83	)			(3.91	)			(55.96	)
Weighted average common shares outstanding:
Basic			19,263				4,044				19,258				4,044
Diluted			19,263				4,044				19,258				4,044
Dividends declared per common share:
Class A common stock		$	—				—				—				0.02
Class B common stock		$	—				—				—				0.02

See accompanying notes to unaudited consolidated financial statements.

Woodbridge Holdings Corporation
Consolidated Statements of Comprehensive Loss — Unaudited
(In thousands)

		Three Months								Nine Months
		Ended September 30,								Ended September 30,
		2008				2007				2008				2007
Net loss		$	(56,003	)			(169,168	)			(75,376	)			(226,279	)
Other comprehensive loss:
Pro-rata share of unrealized loss recognized by Bluegreen Corporation on retained interests in notes receivable sold			(616	)			(499	)			(1,501	)			(1,038	)
Unrealized loss on other equity securities, net of reclassification adjustment (See Note 6)			(7,347	)			—				(7,900	)			—
Benefit for income taxes			—				192				—				400
Total unrealized loss, net of taxes			(7,963	)			(307	)			(9,401	)			(638	)
Total comprehensive loss		$	(63,966	)			(169,475	)			(84,777	)			(226,917	)

See accompanying notes to unaudited consolidated financial statements.

Woodbridge Holdings Corporation
Consolidated Statement of Shareholders’ Equity — Unaudited
Nine Months Ended September 30, 2008
(In thousands)

																										Accumulated
										Class A				Class B				Additional								Compre-
		Class A				Class B				Common				Common				Paid-In				Accumulated				hensive
		Shares				Shares				Stock				Stock				Capital				Deficit				Income (Loss)				Total
Balance at December 31, 2007			19,011				244			$	190				2				337,565				(78,537	)			1,886				261,106
Issuance of restricted common stock			31				—				—				—				—				—				—				—
Net loss			—				—				—				—				—				(75,376	)			—				(75,376	)
Pro-rata share of unrealized loss recognized by Bluegreen on sale of retained interests			—				—				—				—				—				—				(1,501	)			(1,501	)
Issuance of Bluegreen common stock			—				—				—				—				850				—				—				850
Unrealized loss on other equity securities, net of reclassification adjustment (See Note 6)			—				—				—				—				—				—				(7,900	)			(7,900	)
Share based compensation related to stock options and restricted stock			—				—				—				—				507				—				—				507
Balance at September 30, 2008			19,042				244			$	190				2				338,922				(153,913	)			(7,515	)			177,686

See accompanying notes to unaudited consolidated financial statements.

Woodbridge Holdings Corporation
Consolidated Statements of Cash Flows — Unaudited
(In thousands)

		Nine Months Ended
		September 30,
		2008				2007
Net cash used in operating activities		$	(16,327	)			(35,679	)
Investing activities:
Investment in and advances to real estate joint ventures			—				(229	)
Purchases of other equity securities			(36,978	)			—
Proceeds from sale of other equity securities			18,904				—
Decrease in restricted cash			1,393				1,231
Distributions of capital from real estate joint ventures			—				47
Distributions from unconsolidated trusts			166				128
Proceeds from sales of property and equipment			5,588				12
Capital expenditures			(1,165	)			(34,142	)
Net cash used in investing activities			(12,092	)			(32,953	)
Financing activities:
Proceeds from notes and mortgage notes payable			8,382				214,057
Repayment of notes and mortgage notes payable			(30,678	)			(156,031	)
Payments for debt issuance costs			(577	)			(1,656	)
Cash dividends paid			—				(396	)
Net cash (used in) provided by financing activities			(22,873	)			55,974
Decrease in cash and cash equivalents			(51,292	)			(12,658	)
Cash and cash equivalents at the beginning of period			195,181				48,391
Cash and cash equivalents at the end of period		$	143,889				35,733
Supplemental cash flow information:
Interest paid on borrowings, net of amounts capitalized		$	8,347				(1,900	)
Income taxes (refunded) paid		$	(29,711	)			4,556
Supplemental disclosure of non-cash operating,
investing and financing activities:
Change in shareholders’ equity resulting from unrealized loss recognized from equity securities, net of tax		$	(9,401	)			(638	)
Change in shareholders’ equity resulting from the issuance of Bluegreen common stock, net of tax		$	850				1,145
Decrease in inventory from reclassification to property and equipment		$	—				1,148
Increase in deferred tax liability due to cumulative impact of change in accounting for uncertainties in income taxes		$	—				260

See accompanying notes to unaudited consolidated financial statements.

Woodbridge Holdings Corporation
Notes to Unaudited Consolidated Financial Statements

1.     Presentation of Interim Financial Statements

     Woodbridge Holdings Corporation (“Woodbridge” or the “Company”) (formerly Levitt Corporation) and its wholly-owned subsidiaries engage in business activities through its Land Division and Other Operations segment. Historically, the Company’s operations were primarily within the real estate industry, however, the Company’s current business strategy includes the pursuit of opportunistic investments and acquisitions within or outside of the real estate industry, as well as the continued development of master-planned communities. Under this business strategy, the Company may not generate a consistent earnings stream and the composition of the Company’s revenues may vary widely due to factors inherent in a particular investment, including the maturity and cyclical nature of, and market conditions relating to, the business invested in. Net investment gains and other income will be based primarily on the Company’s strategic initiatives, the success of its investments and overall market conditions.

     The Land Division consists of the operations of Core Communities, LLC (“Core Communities” or “Core”), which develops master-planned communities. The Other Operations segment includes the parent company operations of Woodbridge (the “Parent Company”), an equity investment in Bluegreen Corporation (“Bluegreen”), investments in Pizza Fusion Holdings, Inc. (“Pizza Fusion”) and Office Depot, Inc. (“Office Depot”), the operations of Carolina Oak Homes, LLC (“Carolina Oak”), which engages in homebuilding activities and is developing a community in South Carolina, and other investments through Cypress Creek Capital Holdings, Inc. and other subsidiaries and joint ventures.

     Prior to November 9, 2007, the Company also conducted homebuilding operations through Levitt and Sons, LLC (“Levitt and Sons”), which comprised the Company’s Homebuilding Division. The Homebuilding Division consisted of two reportable operating segments, the Primary Homebuilding segment and the Tennessee Homebuilding segment. As previously reported, on November 9, 2007, Levitt and Sons and substantially all of its subsidiaries (the “Debtors”) filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court”). In connection with the filing of the Chapter 11 Cases, Woodbridge deconsolidated Levitt and Sons as of November 9, 2007, eliminating all future operations of Levitt and Sons from Woodbridge’s financial results of operations. Since Levitt and Sons’ results are no longer consolidated and Woodbridge believes that it is not probable that it will be obligated to fund future operating losses at Levitt and Sons, any adjustments reflected in Levitt and Sons’ financial statements subsequent to November 9, 2007 are not expected to affect the results of operations of Woodbridge. As a result of the deconsolidation of Levitt and Sons, in accordance with Accounting Research Bulletin (“ARB”) No. 51, the Company follows the cost method of accounting to record its interest in Levitt and Sons. Under cost method accounting, income will only be recognized to the extent of cash received in the future or when Levitt and Sons is legally released from its bankruptcy obligations through the approval of the Bankruptcy Court, at which time any recorded loss in excess of the investment in Levitt and Sons can be recognized into income. The Company will continue to evaluate the cost method investment in Levitt and Sons on a quarterly basis to review the reasonableness of the liability balance. (See Note 17 for further information regarding Levitt and Sons and the Chapter 11 Cases, including the proposed settlement with the Debtors’ estates).

     The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-segment transactions have been eliminated in consolidation. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial

information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. Operating results for the three and nine month periods ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. The year end balance sheet data for 2007 was derived from the December 31, 2007 audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The accompanying financial statements should be read in conjunction with the Company’s consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. Certain reclassifications have been made to prior periods’ consolidated financial statements to be consistent with the current periods’ presentation.

     On September 26, 2008, the Company effected a one-for-five reverse stock split. As a result of the reverse stock split, each five shares of the Company’s Class A Common Stock outstanding at the time of the reverse stock split automatically converted into one share of Class A Common Stock and each five shares of the Company’s Class B Common Stock outstanding at the time of the reverse stock split automatically converted into one share of Class B Common Stock. As a result, the number of outstanding shares of Class A Common Stock decreased from 95,197,445 to 19,042,149, and the number of outstanding shares of Class B Common Stock decreased from 1,219,031 to 243,807. The number of authorized shares of the Company’s Class A and Class B Common Stock as well as the number of shares of Class A Common Stock available for issuance under the Company’s equity compensation plans and the number of shares of Class A Common Stock underlying stock options and other exercisable or convertible instruments were also ratably decreased in connection with the reverse split. All share and per share data presented in this report for prior periods have been retroactively adjusted to reflect the reverse stock split.

Investments

     Held-to-maturity investments are carried at amortized cost, reflecting the ability and intent to hold the securities to maturity. Trading investments are carried at fair value and include securities acquired with the intent to sell in the near term. All other securities are classified as available-for-sale and are carried at fair value with net unrealized gains or losses recorded as a component of accumulated other comprehensive income (loss), but do not impact the Company’s results of operations. Woodbridge’s investments in equity securities were classified as available-for-sale as of September 30, 2008.

     Investment gains and losses in earnings associated with investments classified as available-for- sale arise when investments are sold (as determined on a specific identification basis) or are other-than-temporarily impaired. If, in management’s judgment, a decline in the value of an investment below cost is other than temporary, the cost of the investment is written down to fair value with a corresponding charge to earnings. Factors considered in judging whether an impairment is other-than-temporary include: the financial condition and business prospects of the issuer, the length of time that fair value has been less than cost, the relative amount of the decline in the value of the investment and the Company’s ability and intent to hold the investment until the fair value recovers.

2.		Sale of Two Core Communities’ Commercial Leasing Projects — Discontinued Operations

     In June 2007, Core Communities began soliciting bids from several potential buyers to purchase assets associated with two of Core’s commercial leasing projects. Management has determined that it is probable that Core will sell these projects and, while Core may retain an equity

interest in the properties and provide ongoing management services, the anticipated level of Core’s continuing involvement is not expected to be significant. Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”), provides that assets recorded as available for sale should be sold within a one year period. However, as a result of, among other things, adverse market conditions, the assets were not sold by the end of June 2008 and have not been sold to date. Core continues to actively market the assets, and the assets are available for immediate sale in their present condition. While management believes the assets will be sold by June 2009, there is no assurance that these sales will be completed in the timeframe expected by management or at all. In accordance with SFAS No. 144, the results of operations for the projects and assets that are for sale have been accounted for as discontinued operations for all periods presented.

     The assets were previously reclassified to assets held for sale and the liabilities related to these assets were reclassified to liabilities related to assets held for sale in the unaudited consolidated statements of financial condition. Additionally, the results of operations for the projects were reclassified to income from discontinued operations. Depreciation related to these assets held for sale ceased in June 2007. The Company has elected not to separate these assets in the unaudited consolidated statements of cash flows for the periods presented. Management has reviewed the net asset value and estimated the fair market value of the assets based on the bids received related to these assets and determined that these assets were appropriately recorded at the lower of cost or fair value less the costs to sell at September 30, 2008.

     The following table summarizes the assets held for sale and liabilities related to the assets held for sale for the two commercial leasing projects as of September 30, 2008 and December 31, 2007 (in thousands):

		September 30,				December 31,
		2008				2007
Property and equipment, net		$	80,709				84,677
Other assets			11,965				11,537
Assets held for sale		$	92,674				96,214
Accounts payable, accrued liabilities and other		$	1,847				1,123
Notes and mortgage payable			75,110				78,970
Liabilities related to assets held for sale		$	76,957				80,093

     The following table summarizes the results of operations for the two commercial leasing projects for the three and nine months ended September 30, 2008 and 2007 (in thousands):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2007				2008				2007
Revenue		$	2,393				1,551				6,545				2,910
Costs and expenses			1,893				307				3,649				1,491
			500				1,244				2,896				1,419
Other income (a)			2,524				7				2,533				14
Income before income taxes			3,024				1,251				5,429				1,433
Provision for income taxes			—				(439	)			—				(516	)
Net income		$	3,024				812				5,429				917

3.		Stock Based Compensation

     The Company recognizes stock based compensation expense under the provisions of SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS No. 123R”), using the modified prospective transition method. SFAS No. 123R requires a public entity to measure compensation cost associated with awards of equity instruments based on the grant-date fair value of the awards over the requisite service period. SFAS No. 123R requires public entities to initially measure compensation cost associated with awards of liability instruments based on their current fair value. The fair value of that award is to be remeasured subsequently at each reporting date through the settlement date. Changes in fair value during the requisite service period will be recognized as compensation cost over that period.

     In accordance with SFAS No. 123R, the Company estimates the grant-date fair value of its stock options using the Black-Scholes option-pricing model, which takes into account assumptions regarding the dividend yield, the risk-free interest rate, the expected stock-price volatility and the expected term of the stock options. The fair value of the Company’s stock option awards, which are primarily subject to five year cliff vesting, is expensed over the vesting life of the stock options using the straight-line method.

     The following table summarizes the stock options outstanding as of September 30, 2008 as well as activity during the nine months then ended:

		Number of				Weighted
		Stock				Average Exercise
		Options				Price
Options outstanding at December 31, 2007			372,532			$	86.66
Granted			36,398			$	6.70
Exercised			—				—
Forfeited			90,459			$	81.85
Options outstanding at September 30, 2008			318,471			$	78.89
Options exercisable at September 30, 2008			69,822			$	40.20

     As of September 30, 2008, the weighted average remaining contractual lives of stock options outstanding and stock options exercisable were 7.4 years and 8.6 years, respectively.

     Non-cash stock compensation expense related to stock options for the quarters ended September 30, 2008 and 2007 amounted to $430,000 and $937,000, respectively. Non-cash stock compensation expense related to stock options for the nine months ended September 30, 2008 and 2007 amounted to $1.7 million and $2.6 million, respectively.

     The Company also grants shares of restricted Class A Common Stock, valued at the closing price of such stock on the New York Stock Exchange on the date of grant. Restricted stock is issued primarily to the Company’s directors and typically vests in equal monthly installments over a one-year period. Compensation expense arising from restricted stock grants is recognized using the straight-line method over the vesting period. Unearned compensation for restricted stock is a component of additional paid-in capital in shareholders’ equity in the unaudited consolidated statements of financial condition. Non-cash stock compensation expense related to restricted stock for the quarters ended September 30, 2008 and 2007 amounted to $53,000 and $17,000, respectively. Non-cash stock compensation expense related to restricted stock for the nine months ended September 30, 2008 and 2007 amounted to $99,000 and $63,000, respectively.

     Historically, forfeiture rates were estimated based on historical employee turnover rates. In accordance with SFAS No. 123R, companies are required to adjust forfeiture estimates for all awards with performance and service conditions through the vesting date so that compensation cost is recognized only for awards that vest. During the nine months ended September 30, 2008, there were substantial pre-vesting forfeitures as a result of the reductions in force related to the Company’s restructurings and the bankruptcy of Levitt and Sons. In accordance with SFAS No. 123R, pre-vesting forfeitures result in a reversal of compensation cost whereas a post-vesting cancellation would not. As a result, the Company recognized a reversal of compensation cost of approximately $1.3 million for the nine months ended September 30, 2008 to reflect pre-vesting option forfeitures.

     As disclosed in Note 1, the share and per share data have been adjusted to reflect the Company’s one-for-five reverse stock split. Additionally, in connection with the reverse stock split, the Company’s Amended and Restated 2003 Stock Incentive Plan was amended to ratably decrease the number of shares of Class A Common Stock available for issuance under the plan, and the terms of awards previously granted under the plan were amended to ratably decrease the number of shares of Class A Common Stock subject to the award and, with respect to stock options, ratably increase the exercise price. The Company’s Amended and Restated 2003 Stock Incentive Plan, as amended to reflect the reverse stock split, is filed with this Quarterly Report as Exhibit 10.1.

4. Inventory of Real Estate

     Inventory of real estate is summarized as follows (in thousands):

		September 30,				December 31,
		2008				2007
Land and land development costs		$	200,698				196,577
Construction costs			1,502				1,062
Capitalized interest			37,866				29,012
Other costs			635				639
		$	240,701				227,290

     As of September 30, 2008, inventory of real estate included inventory related to the operations of the Land Division and Carolina Oak.

     The Company reviews real estate inventory for impairment on a project-by-project basis in accordance with SFAS No. 144. In accordance with SFAS No. 144, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset, or by using appraisals of the related assets. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in an amount by which the carrying amount of the asset exceeds the fair value.

5. Interest

     Interest incurred relating to land under development and construction is capitalized to real estate inventory during the active development period. For inventory, interest is capitalized at the effective rates paid on borrowings during the pre-construction and planning stages and the periods that projects are under development. Capitalization of interest is discontinued if development ceases at a project. Capitalized interest is expensed as a component of cost of sales as related homes, land and units are sold. For property and equipment under construction, interest associated with these assets is capitalized as incurred while under construction and is expensed through depreciation once the asset is put into use. The following table is a summary of interest incurred, capitalized and expensed relating to inventory under development and construction exclusive of impairment adjustments (in thousands):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2007				2008				2007
Interest incurred		$	4,445				12,968				14,090				38,187
Interest capitalized			(2,660	)			(12,968	)			(7,440	)			(38,187	)
Interest expense		$	1,785				—				6,650				—
Interest expensed in cost of sales		$	281				7,563				325				17,550

     As described in Note 2 above, certain amounts for the three and nine months ended September 30, 2008 associated with two of Core’s commercial leasing projects have been reclassified to income from discontinued operations. Interest expense related to discontinued operations for the three and nine month periods ended September 30, 2008 amounted to approximately $718,000 and $1.4 million, respectively.

6. Investments

Bluegreen Corporation

     At September 30, 2008, the Company owned approximately 9.5 million shares of common stock of Bluegreen, representing approximately 31% of Bluegreen’s outstanding common stock. The Company accounts for its investment in Bluegreen under the equity method of accounting. The cost of the Bluegreen investment is adjusted to recognize the Company’s interest in Bluegreen’s earnings or losses. The difference between a) the Company’s ownership percentage in Bluegreen multiplied by its earnings and b) the amount of the Company’s equity in earnings of Bluegreen as reflected in the Company’s financial statements relates to the amortization or accretion of purchase accounting adjustments made at the time of the acquisition of Bluegreen’s common stock.

     The Company performed an impairment review of its investment in Bluegreen as of September 30, 2008 in accordance with Emerging Issues Task Force (“EITF”) No. 03-1, Accounting Principles Board Opinion No. 18 and Securities and Exchange Commission Staff Accounting Bulletin No. 59 to analyze various quantitative and qualitative factors and determine if an impairment adjustment was needed. Among other factors considered was the $119.4 million value of the investment carried on the Company’s financial statements as of September 30, 2008 compared to the $65.8 million trading value of the shares of Bluegreen’s common stock owned by the Company as of that date (calculated based upon the $6.91 closing price of Bluegreen’s common stock on the New York Stock Exchange on September 30, 2008). The Company valued Bluegreen’s common stock using a market approach valuation technique and inputs categorized as Level 1 inputs under SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”). The Company also considered that, as previously announced by Bluegreen, Bluegreen had entered into a non-binding letter of intent for the sale of 100% of its outstanding common stock for a price of $15 per share. The letter of intent provided for a due diligence and exclusivity period through September 15, 2008. This due diligence and exclusivity period was subsequently

extended through November 15, 2008. There can be no assurance that the transaction will be consummated on the proposed terms, if at all, particularly given the recent deterioration in the credit and equity markets, which would negatively impact the ability of a purchaser to obtain financing necessary to complete the transaction. The Company also considered that the decline in Bluegreen’s stock price since September 15, 2008 indicates market uncertainty relating to the transaction. As a result of the foregoing and the Company’s analysis, on November 4, 2008, the Company determined that there had been an other-than-temporary impairment associated with its investment in Bluegreen at September 30, 2008 and, accordingly, has recorded an impairment charge of $53.6 million and adjusted the carrying value of its investment in Bluegreen by that amount as of September 30, 2008. On November 5, 2008, the closing price of Bluegreen’s common stock was $5.15 per share.

     Bluegreen’s unaudited condensed consolidated balance sheets and unaudited condensed consolidated statements of income are as follows (in thousands):

Unaudited Condensed Consolidated Balance Sheets

		September 30,				December 31,
		2008				2007
Total assets		$	1,198,680				1,039,578
Total liabilities		$	775,854				632,047
Minority interest			27,703				22,423
Total shareholders’ equity			395,123				385,108
Total liabilities and shareholders’ equity		$	1,198,680				1,039,578

Unaudited Condensed Consolidated Statements of Income

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2007				2008				2007
Revenues and other income		$	179,786				206,313				470,268				523,943
Cost and other expenses			165,663				181,764				446,179				480,925
Income before minority interest and provision for income taxes			14,123				24,549				24,089				43,018
Minority interest			3,122				2,044				5,280				5,311
Income before provision for income taxes			11,001				22,505				18,809				37,707
Provision for income taxes			(4,180	)			(8,552	)			(7,147	)			(14,329	)
Net income		$	6,821				13,953				11,662				23,378

Office Depot Investment

     During March 2008, the Company purchased 3,000,200 shares of Office Depot common stock, which represented approximately one percent of Office Depot’s outstanding common stock, at an average price of $11.33 per share for an aggregate purchase price of approximately $34.0 million.

     During June 2008, the Company sold 1,565,200 shares of Office Depot common stock at an average price of $12.08 per share for an aggregate sales price of approximately $18.9 million. The Company realized a gain of approximately $1.2 million as a result of the sale.

     Data with respect to this investment is shown in the table below (in thousands):

		September 30,
		2008
Total cost		$	33,978
Sale of portion of Office Depot common stock			(17,726	)
Gross unrealized losses			(7,900	)
Total fair value		$	8,352

     The table below shows the amount of gains reclassified out of other comprehensive loss into net loss for the period (in thousands):

		Three Months				Nine Months
		Ended				Ended
		September 30,				September 30,
		2008				2008
Unrealized holding loss arising during the period		$	(7,347	)			(6,722	)
Less: Reclassification adjustment for gains included in net loss			—				(1,178	)
Net unrealized loss on securities		$	(7,347	)			(7,900	)

     Unrealized losses at September 30, 2008 were attributable to the fact that the securities cost exceeded their fair value.

     The Company valued Office Depot’s common stock using a market approach valuation technique and Level 1 valuation inputs under SFAS No. 157. The Company uses quoted market prices to value equity securities. The fair value of the Office Depot common stock in the Company’s unaudited consolidated statements of financial condition at September 30, 2008 was calculated based upon the $5.82 closing price of Office Depot’s common stock on the New York Stock Exchange on September 30, 2008. On November 5, 2008, the closing price of Office Depot common stock was $2.89 per share. The Company will continue to monitor this investment in accordance with FASB Staff Position FAS 115-1/124-1, “The Meaning of Other-than-Temporary Impairment and Its Application To Certain Investments”, to determine whether there is an other-than-temporary impairment associated with this investment.

Pizza Fusion Investment

     On September 18, 2008, the Company, indirectly through its wholly-owned subsidiary, Woodbridge Equity Fund II LP, purchased for an aggregate of $3.0 million, 2,608,696 shares of Series B Convertible Preferred Stock of Pizza Fusion, together with warrants to purchase up to an additional 1,500,000 shares of Series B Convertible Preferred Stock of Pizza Fusion at an exercise price of $1.44 per share. The Company also has options, exercisable on or prior to September 18, 2009, to purchase up to 521,740 additional shares of Series B Convertible Preferred Stock of Pizza Fusion at a price of $1.15 per share and, upon exercise of such options, will receive warrants to purchase up to 300,000 additional shares of Series B Convertible Preferred Stock of Pizza Fusion at an exercise price of $1.44 per share. The warrants have a term of 10 years, subject to earlier expiration in certain circumstances.

     Pizza Fusion is a restaurant franchise operating in a niche market within the quick service and organic food industries. Founded in 2006, Pizza Fusion is currently operating 8 locations in Florida and California and has entered into franchise agreements to open an additional 21 stores over the remainder of 2008 and 2009.

7. Debt

     The Company’s notes and mortgage notes payable outstanding as of September 30, 2008 and December 31, 2007 amounted to $256.4 million and $274.8 million, respectively.

     In March 2008, Core agreed to the termination of a $20 million line of credit. No amounts were outstanding under this line of credit at the date of termination.

     In July 2008, Core refinanced $9.1 million of construction loans. The new loan has an interest rate of 30-day LIBOR plus 210 basis points (5.03% at September 30, 2008) and a maturity date of July 2010 with a one year extension subject to certain conditions.

     Core’s loan agreements generally require repayment of specified amounts upon a sale of a portion of the property collateralizing the debt. Core also is subject to provisions in one of its loan agreements collateralized by land in Tradition Hilton Head that require additional principal payments, known as curtailment payments, in the event that actual sales are below the contractual requirements. A curtailment payment of $14.9 million relating to Tradition Hilton Head was paid in January 2008. On June 27, 2008, Core modified this loan agreement, terminating the revolving feature of the loan and reducing an approximately $19 million curtailment payment due in June 2008 to $17.0 million, $5.0 million of which was paid in June 2008 with the remaining $12.0 million due on November 15, 2008. Additionally, the loan modification agreement reduced the extension term from an extension period of one year to an extension period of up to two 3-month periods upon compliance with the conditions set forth in the loan modification agreement, including a minimum $5 million principal reduction with each extension. The February 28, 2009 maturity date of the loan was not modified in the loan modification agreement. However, the Company is currently negotiating with the lender to modify the terms of the loan agreement.

8. Commitments and Contingencies

     At September 30, 2008, the Company had outstanding surety bonds and letters of credit of approximately $8.2 million related primarily to its obligations to various governmental entities to construct improvements in its various communities. The Company estimates that approximately $5.1 million of work remains to complete these improvements and does not believe that any outstanding bonds or letters of credit will likely be drawn upon.

     On November 9, 2007, Woodbridge put in place an employee fund and offered up to $5 million of severance benefits to terminated Levitt and Sons employees to supplement the limited termination benefits paid by Levitt and Sons to those employees. Levitt and Sons was restricted in the payment of termination benefits to its former employees by virtue of the Chapter 11 Cases.

     The following table summarizes the restructuring related accruals activity recorded for the nine months ended September 30, 2008 (in thousands):

		Severance								Independent				Surety
		Related and								Contractor				Bond
		Benefits				Facilities				Agreements				Accrual				Total
Balance at December 31, 2007		$	1,954				1,010				1,421				1,826				6,211
Restructuring charges (credits)			2,250				140				(11	)			(150	)			2,229
Cash payments			(3,586	)			(352	)			(618	)			(532	)			(5,088	)
Balance at September 30, 2008		$	618				798				792				1,144				3,352

     The severance related and benefits amount includes severance payments made to Levitt and Sons employees, payroll taxes and other benefits related to the terminations that occurred in 2007 in connection with the Chapter 11 Cases. The Company incurred severance and benefits related restructuring charges of $227,000 and approximately $2.3 million during the three and nine months ended September 30, 2008, respectively. For the three and nine months ended September 30, 2008, the Company paid approximately $905,000 and $3.6 million, respectively, in severance and termination charges related to the above described employee fund as well as severance for employees other than Levitt and Sons employees, all of which are reflected in the Other Operations segment. Employees entitled to participate in the fund either receive a payment stream, which in certain cases extends over two years, or a lump sum payment, dependent on a variety of factors. Former Levitt and Sons’ employees who received these payments were required to assign to the Company their unsecured claims against Levitt and Sons. At September 30, 2008, $618,000 was accrued to be paid with respect to this employee fund and the severance accrual for other employees of the Company.

     The facilities accrual as of September 30, 2008 represents expense associated with property and equipment leases that are no longer providing a benefit to the Company, as well as termination fees related to the cancellation of certain contractual lease obligations. Included in this amount are future minimum lease payments, fees and expenses for which the provisions of SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”, were satisfied. Total cash payments related to the facilities accrual were $93,000 and $352,000 for the three and nine months ended September 30, 2008, respectively.

     The independent contractor agreements amount relates to consulting agreements entered into by Woodbridge with former Levitt and Sons employees. The total commitment related to these agreements as of September 30, 2008 was approximately $910,000 and is payable monthly through 2009. During the three and nine months ended September 30, 2008, the Company paid $206,000 and $618,000, respectively, under these agreements.

     Levitt and Sons had $33.3 million in surety bonds related to its ongoing projects at the time of the filing of the Chapter 11 Cases. In the event that these obligations are drawn and paid by the surety, Woodbridge could be responsible for up to $11.7 million plus costs and expenses in accordance with the surety indemnity agreements. As of September 30, 2008, the Company had a $1.1 million surety bonds accrual at Woodbridge related to certain bonds which management considers it to be probable that the Company will be required to reimburse the surety under applicable indemnity agreements. During the nine months ended September 30, 2008, the Company reimbursed the surety $532,000 in accordance with the indemnity agreement for bond claims paid during the period. No payments were made in the third quarter of 2008. It is unclear given the uncertainty involved in the Chapter 11 Cases whether and to what extent the remaining outstanding surety bonds of Levitt and Sons will be drawn and the extent to which Woodbridge may be responsible for additional amounts beyond this accrual. It is unlikely that Woodbridge would have the ability to receive any repayment, assets or other consideration as recovery of any amounts it is required to pay.

     In September 2008, a surety filed a lawsuit to require Woodbridge to post $5.4 million of collateral in connection with two bonds totaling $5.4 million with respect to which a municipality made claims against the surety. The Company believes that the municipality does not have the right to demand payment under the bonds and believes that a loss is not probable. Accordingly, the Company did not accrue any amount in connection with this claim as of September 30, 2008.

     At September 30, 2008, the Company had $2.4 million in unrecognized tax benefits related to Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB No. 109” (“FIN No. 48”). FIN No. 48 provides guidance for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return.

9. Development Bonds Payable

     In connection with the development of certain of Core’s projects, community development, special assessment or improvement districts have been established and may utilize tax-exempt bond financing to fund construction or acquisition of certain on-site and off-site infrastructure improvements near or at these communities. The obligation to pay principal and interest on the bonds issued by the districts is assigned to each parcel within the district, and a priority assessment lien may be placed on benefited parcels to provide security for the debt service. The bonds, including interest and redemption premiums, if any, and the associated priority lien on the property are typically payable, secured and satisfied by revenues, fees, or assessments levied on the property benefited. Core is required to pay the revenues, fees, and assessments levied by the districts on the properties it still owns that are benefited by the improvements. Core may also be required to pay down a specified portion of the bonds at the time each unit or parcel is sold. The costs of these obligations are capitalized to inventory during the development period and recognized as cost of sales when the properties are sold.

     Core’s bond financing at September 30, 2008 consisted of district bonds totaling $218.7 million with outstanding amounts of approximately $116.9 million (excluding the $3.4 million liability related to developer obligations mentioned below). Further, at September 30, 2008, there was approximately $95.9 million available under these bonds to fund future development expenditures. Bond obligations at September 30, 2008 mature in 2035 and 2040. As of September 30, 2008, Core owned approximately 16% of the property subject to assessments within the community development district and approximately 91% of the property subject to assessments within the special assessment district. During the three and nine months ended September 30, 2008, Core recorded approximately $154,000 and $422,000, respectively, in assessments on property owned by it in the districts. Core is responsible for any assessed amounts until the underlying property is sold and will continue to be responsible for the annual assessments if the property is never sold. In addition, Core has guaranteed payments for assessments under the district bonds in Tradition, Florida which would require funding if future assessments to be allocated to property owners are insufficient to repay the bonds. Management has evaluated this exposure based upon the criteria in SFAS No. 5, “Accounting for Contingencies”, and has determined that there have been no substantive changes to the projected density or land use in the development subject to the bond which would make it probable that Core would have to fund future shortfalls in assessments.

     In accordance with EITF Issue No. 91-10, “Accounting for Special Assessments and Tax Increment Financing”, the Company records a liability for the estimated developer obligations that are fixed and determinable and user fees that are required to be paid or transferred at the time the parcel or unit is sold to an end user. At September 30, 2008, the liability related to developer obligations was $3.4 million, of which $3.2 million is included in the liabilities related to assets held for sale in the accompanying unaudited consolidated statements of financial condition as of September 30, 2008, and includes amounts associated with Core’s ownership of the property.

10. Loss per Share

     Basic loss per common share is computed by dividing loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted loss per common share is computed in the same manner as basic loss per common share, taking into consideration (a) the dilutive effect of the Company’s stock options and restricted stock using the treasury stock method and (b) the pro rata impact of Bluegreen’s dilutive securities (stock options and convertible securities) on the amount of Bluegreen’s earnings recognized by the Company. For the quarters ended September 30, 2008 and 2007, common stock equivalents related to the Company’s stock options and unvested restricted stock amounted to 13,378 and 2,374 shares, respectively, and were not considered in computing diluted loss per common share because their effect would have been antidilutive since the Company recorded a net loss for those quarters. For the nine months ended

September 30, 2008 and 2007, common stock equivalents related to the Company’s stock options and unvested restricted stock amounted to 6,148 and 2,212 shares, respectively, and were not considered in computing diluted loss per common share because their effect would have been antidilutive since the Company recorded a net loss for those periods. In addition, for the quarters ended September 30, 2008 and 2007, 340,341 and 468,461 shares of common stock equivalents, respectively, at various prices were not included in the computation of diluted loss per common share because the exercise prices were greater than the average market price of the common shares and, therefore, their effect would be antidilutive. In the nine months ended September 30, 2008 and 2007, 306,283 and 384,796 shares, respectively, were not considered in the computation of diluted loss per common share because the exercise prices were greater than the average market price of the common shares and, therefore, their effect would have been antidilutive.

     The following table presents the computation of basic and diluted loss per common share (in thousands, except for per share data):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2007				2008				2007
Numerator:
Basic loss per common share:
Loss from continuing operations		$	(59,027	)			(169,980	)			(80,805	)			(227,196	)
Income from discontinued operations			3,024				812				5,429				917
Net loss — basic		$	(56,003	)			(169,168	)			(75,376	)			(226,279	)
Diluted loss per common share:
Net loss from continuing operations — basic		$	(59,027	)			(169,980	)			(80,805	)			(227,196	)
Pro rata share of the net effect of Bluegreen dilutive securities			(24	)			(8	)			(18	)			(40	)
Loss from continuing operations		$	(59,051	)			(169,988	)			(80,823	)			(227,236	)
Income from discontinued operations			3,024				812				5,429				917
Net loss — diluted		$	(56,027	)			(169,176	)			(75,394	)			(226,319	)
Denominator:
Basic average shares outstanding			19,263				3,966				19,258				3,966
Bonus adjustment factor from registration rights offering			—				1.0197				—				1.0197
Basic average shares outstanding			19,263				4,044				19,258				4,044
Net effect of stock options assumed to be exercised			—				—				—				—
Diluted average shares outstanding			19,263				4,044				19,258				4,044
Basic loss per common share:
Continuing operations		$	(3.06	)			(42.03	)			(4.19	)			(56.18	)
Discontinued operations		$	0.15				0.20				0.28				0.22
Total basic loss per share		$	(2.91	)			(41.83	)			(3.91	)			(55.96	)
Diluted loss per common share:
Continuing operations		$	(3.06	)			(42.03	)			(4.19	)			(56.18	)
Discontinued operations		$	0.15				0.20				0.28				0.22
Total diluted loss per share		$	(2.91	)			(41.83	)			(3.91	)			(55.96	)

11. Income Taxes

     The Company’s provision for income taxes is estimated to result in an effective tax rate of 0.0% in 2008. The effective tax rate used for the three and nine months ended September 30, 2007 was 3.5% and 8.4%, respectively. The decrease in the effective tax rate is a result of the Company recording a valuation allowance for those deferred tax assets that are not expected to be recovered in the future. Due to large losses in 2007 and expected taxable losses in the foreseeable future, the Company may not have sufficient taxable income of the appropriate character in the future and prior carryback years to realize any portion of the net deferred tax asset. See Note 18 for a description of the Company’s recently adopted shareholder rights plan which is aimed at preserving the Company’s ability to use its net operating loss carryforwards to offset future taxable income.

     The Company and its subsidiaries are subject to U.S. federal income tax as well as to income tax in Florida and South Carolina. The Company has effectively settled all U.S. federal income tax matters for years through 2004. All years subsequent to these closed periods remain open and subject to examination.

     As described in Note 2 above, certain amounts, including the provision for income taxes, for the three and nine months ended September 30, 2008 and 2007 associated with two of Core’s commercial leasing projects have been reclassified to income from discontinued operations.

12. Segment Reporting

     Operating segments are components of an enterprise about which separate financial information is available that is regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. During the three and nine months ended September 30, 2008, the Company operated through two reportable business segments, the Land Division and Other Operations segments. During the three and nine months ended September 30, 2007, the Company also operated through two additional reportable business segments, the Primary Homebuilding and Tennessee Homebuilding segments, both of which were eliminated as a result of the Company’s deconsolidation of Levitt and Sons as of November 9, 2007. The Company evaluates segment performance primarily based on pre-tax income. The information provided for segment reporting is based on management’s internal reports. Except as otherwise indicated in this report, the accounting policies of the segments are the same as those of the Company. Eliminations in periods prior to the three and nine months ended September 30, 2008 consisted of the elimination of sales and profits on real estate transactions between the Land Division and Primary Homebuilding segments, and eliminations for the three and nine months ended September 30, 2008 consist of the elimination of transactions between the Land Division and Other Operations segments. All of the eliminated transactions were recorded based upon terms that management believed would be attained in an arms-length transaction. The presentation and allocation of assets, liabilities and results of operations may not reflect the actual economic costs of the segments as stand-alone businesses. If a different basis of allocation were utilized, the relative contributions of the segments might differ, but management believes that the relative trends in segments would likely not be impacted.

     The Company’s Land Division segment consists of the operations of Core Communities, and the Other Operations segment consists of the operations of Carolina Oak, the Company’s Parent Company operations, earnings from the Company’s equity investment in Bluegreen, investments in Pizza Fusion and Office Depot, and other investments through Cypress Creek Capital Holdings, Inc. and other subsidiaries and joint ventures. In 2007, the Other Operations segment also consisted of Levitt Commercial, LLC, which specialized in the development of industrial properties. Levitt Commercial, LLC ceased development activities in 2007. The Company’s Homebuilding Division consisted of the Primary Homebuilding segment and the Tennessee Homebuilding segment. The results of operations for the three and nine months ended September 30, 2008 do not include the results of operations for the Homebuilding Division. The results of operations and financial condition of Carolina Oak as of and for the three and nine months ended September 30, 2007 are included in the Primary Homebuilding segment, whereas the results of operations and financial condition of Carolina Oak as of and for the three and nine months ended September 30, 2008 are included in the Other Operations segment.

     The following tables present segment information as of and for the three and nine months ended September 30, 2008 and 2007 (in thousands):

Three Months Ended						Other
September 30, 2008		Land				Operations				Eliminations				Total
Revenues:
Sales of real estate		$	8,450				1,847				225				10,522
Other revenues			486				276				—				762
Total revenues			8,936				2,123				225				11,284
Costs and expenses:
Cost of sales of real estate			5,029				1,906				80				7,015
Selling, general and administrative expenses			5,078				6,496				(151	)			11,423
Interest expense			40				1,745				—				1,785
Total costs and expenses			10,147				10,147				(71	)			20,223
Earnings from Bluegreen Corporation			—				2,241				—				2,241
Interest and other income			961				470				(184	)			1,247
Impairment of investment in Bluegreen			—				(53,576	)			—				(53,576	)
(Loss) income from continuing operations before income taxes			(250	)			(58,889	)			112				(59,027	)
Benefit for income taxes			—				—				—				—
(Loss) income from continuing operations			(250	)			(58,889	)			112				(59,027	)
Discontinued operations:
Income from discontinued operations			3,024				—				—				3,024
Net income (loss)		$	2,774				(58,889	)			112				(56,003	)
Inventory of real estate		$	202,286				48,397				(9,982	)			240,701
Total assets		$	361,583				252,262				(10,395	)			603,450
Total debt		$	121,748				134,669				—				256,417
Total liabilities		$	235,766				183,892				6,106				425,764
Total shareholders’ equity		$	125,817				68,370				(16,501	)			177,686

Three Months Ended		Primary				Tennessee								Other
September 30, 2007		Homebuilding				Homebuilding				Land				Operations				Eliminations				Total
Revenues:
Sales of real estate		$	112,885				9,339				757				—				(157	)			122,824
Other revenues			614				—				711				258				(134	)			1,449
Total revenues			113,499				9,339				1,468				258				(291	)			124,273
Costs and expenses:
Cost of sales of real estate			247,388				19,822				256				10,259				(2,385	)			275,340
Selling, general and administrative expenses			19,252				1,552				4,152				6,776				(176	)			31,556
Interest expense			—				—				829				—				(829	)			—
Other expenses			575				—				—				536				1				1,112
Total costs and expenses			267,215				21,374				5,237				17,571				(3,389	)			308,008
Earnings from Bluegreen Corporation			—				—				—				4,418				—				4,418
Interest and other income			2,274				25				1,354				285				(829	)			3,109
(Loss) income from continuing operations before income taxes			(151,442	)			(12,010	)			(2,415	)			(12,610	)			2,269				(176,208	)
Benefit (provision) for income taxes			1,866				(100	)			728				4,594				(860	)			6,228
(Loss) income from continuing operations			(149,576	)			(12,110	)			(1,687	)			(8,016	)			1,409				(169,980	)
Discontinued operations:
Income from discontinued operations, net of tax			—				—				812				—				—				812
Net (loss) income		$	(149,576	)			(12,110	)			(875	)			(8,016	)			1,409				(169,168	)
Inventory of real estate		$	355,349				32,317				212,704				4,507				(24,773	)			580,104
Total assets		$	405,553				37,172				329,538				146,083				(17,954	)			900,392
Total debt		$	353,391				25,086				131,679				98,993				—				609,149
Total liabilities		$	486,493				44,457				196,918				59,458				(6,367	)			780,959
Total shareholders’ equity		$	(80,940	)			(7,285	)			132,620				86,625				(11,587	)			119,433