Wci Communities 10-Q 2002 Q1 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2002

OR

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 1-9186

WCI COMMUNITIES, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 59-2857021
(I.R.S. Employer
Identification No.)

24301 Walden Center Drive
Bonita Springs, Florida 34134
(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number, including area code)   (239) 947-2600

Not applicable
(Former name, former address and former fiscal year, if changed since last report)

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         No   

The number of shares outstanding of the issuer’s common stock, as of May 10, 2002 was 44,316,715.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
		CONDENSED CONSOLIDATED BALANCE SHEETS
		CONDENSED CONSOLIDATED STATEMENTS OF INCOME
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURE

WCI COMMUNITIES, INC.

Form 10-Q

For the Quarter Ended March 31, 2002

INDEX

      Part I. Financial Information

		Page No.
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets March 31, 2002 (Unaudited) and December 31, 2001		3
	Condensed Consolidated Statements of Income (Unaudited) For the Three Months Ended March 31, 2002 and 2001		4
	Condensed Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, 2002 and 2001		5
	Notes to Condensed Consolidated Financial Statements (Unaudited)		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		22
Part II	Other Information
Item 1.	Legal Proceedings		23
Item 6.	Exhibits and Reports on Form 8-K		23
SIGNATURE

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

WCI COMMUNITIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

			March 31,			December 31,
			2002			2001
			(Unaudited)
Assets
Cash and cash equivalents			$	31,023		$	57,993
Restricted cash				18,366			19,115
Contracts receivable				477,581			399,716
Mortgage notes and accounts receivable				52,873			58,774
Real estate inventories				865,322			774,443
Property and equipment				105,285			99,726
Other assets				122,955			124,361
Other intangible assets				8,468			8,460
Goodwill				28,854			28,604
		Total assets	$	1,710,727		$	1,571,192
Liabilities and Shareholders’ Equity
Accounts payable and other liabilities			$	244,621		$	270,689
Customer deposits				186,974			162,561
Community development district obligations				34,998			36,286
Senior secured credit facility				245,000			250,000
Senior subordinated notes				354,801			354,936
Mortgages and notes payable				67,192			77,675
				1,133,586			1,152,147
Commitments and contingencies
Shareholders’ equity:
	Common stock, $.01 par value; 100,000,000 shares authorized, 44,448,898 and 36,513,898 shares issued, respectively			444			365
	Additional paid-in capital			277,645			139,193
	Retained earnings			301,599			282,739
	Treasury stock, at cost, 132,183 shares			(795	)		(795	)
	Accumulated other comprehensive loss			(1,752	)		(2,457	)
		Total shareholders’ equity		577,141			419,045
		Total liabilities and shareholders’ equity	$	1,710,727		$	1,571,192

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

WCI COMMUNITIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(In thousands, except share data)
(unaudited)

			For the three months ended
			March 31,
			2002			2001
Revenues
Homebuilding			$	184,806		$	143,612
Parcel and lot				4,140			15,979
Amenity membership and operations				20,096			19,303
Real estate services and other				22,401			18,065
		Total revenues		231,443			196,959
Cost of Sales
Homebuilding				120,368			99,196
Parcel and lot				1,541			10,425
Amenity membership and operations				14,811			14,456
Real estate services and other				16,621			14,191
		Total costs of sales		153,341			138,268
		Contribution margin		78,102			58,691
Other Expenses
Interest expense, net				10,861			12,673
Selling, general, administrative and other				31,880			24,522
Real estate taxes, net				2,396			1,245
Depreciation				1,913			1,080
Amortization of intangible assets				117			110
Amortization of goodwill				—			804
		Total other expenses		47,167			40,434
Income before income taxes and extraordinary item				30,935			18,257
Income tax expense				(12,075	)		(7,323	)
Income before extra ordinary item				18,860			10,934
Extraordinary item, net of tax
	Net loss on early repayment of debt			—			(1,870	)
Net income				18,860			9,064
Other comprehensive gain (loss), net of tax
	Cumulative effect of a change in accounting principle			—			(746	)
	Unrealized derivative gains (losses)			705			(1,399	)
Other comprehensive gain (loss)				705			(2,145	)
Comprehensive income			$	19,565		$	6,919
Earnings (loss) per share:
Basic
	Income before extraordinary item		$	.49		$	.30
	Extraordinary item			—			(.05	)
	Net income		$	.49		$	.25
Diluted
	Income before extraordinary item		$	.48		$	.29
	Extraordinary item			—			(.05	)
	Net income		$	.48		$	.24
Weighted average number of shares
	Basic			38,145,048			36,381,715
	Diluted			39,608,221			37,324,518

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

WCI COMMUNITIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)

				For the three months ended
				March 31,
				2002			2001
Cash flows from operating activities:
	Net income			$	18,860		$	9,064
	Adjustments to reconcile net income to net cash used in operating activities:
		Net loss on early repayment of debt			—			1,870
		Deferred income taxes			(776	)		4,394
		Depreciation and amortization			2,903			2,892
		Earnings from investments in joint ventures			(1,693	)		(286	)
		(Contributions to) distributions from investments in joint ventures, net			(126	)		1,640
	Changes in assets and liabilities:
		Restricted cash			749			(897	)
		Contracts receivable			(77,865	)		(51,418	)
		Accounts receivable			4,348			332
		Real estate inventories			(80,879	)		(79,105	)
		Other assets			2,424			6,024
		Accounts payable and other liabilities			(24,603	)		(54,352	)
		Customer deposits			24,413			29,984
			Net cash used in operating activities		(132,245	)		(129,858	)
Cash flows from investing activities:
	Additions to mortgage notes receivable				(41	)		(1,104	)
	Proceeds from repayment of mortgage notes receivable				1,594			3,823
	Additions to property and equipment, net				(7,711	)		(5,156	)
			Net cash used in investing activities		(6,158	)		(2,437	)
Cash flows from financing activities:
	Senior secured credit facility:
		Net repayments on revolving line of credit			—			(21,800	)
		Repayments on term loan			(5,000	)		—
	Proceeds from borrowings on mortgages and notes payable				30,673			15,909
	Repayment of mortgages and notes payable				(51,276	)		(26,419	)
	Proceeds from borrowings on senior subordinated notes				—			250,000
	Repayment of subordinated notes				—			(57,010	)
	Debt issue costs				(207	)		(9,996	)
	Repayment of finance subsidiary debt				—			(72,495	)
	Net (reductions) borrowings on community development district obligations				(1,288	)		19,187
	Net proceeds from issuance of common stock				138,531			—
	Proceeds from exercise of stock options				—			45
			Net cash provided by financing activities		111,433			97,421
Net decrease in cash and cash equivalents					(26,970	)		(34,874	)
Cash and cash equivalents at beginning of year					57,993			55,737
Cash and cash equivalents at end of period				$	31,023		$	20,863
Non-cash financing activity:
Notes payable in connection with land acquisition				$	10,000		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

WCI COMMUNITIES, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2002
(In thousands, except share data)

1.	Basis of Presentation
	The Company’s condensed consolidated financial statements and notes as of March 31, 2002 and for the three months ended March 31, 2002 and 2001 have been prepared by management without audit, pursuant to rules and regulations of the Securities and Exchange Commission and should be read in conjunction with the December 31, 2001 audited financial statements in the Company’s Annual Report on Form 10-K for the year then ended. In the opinion of management, all normal, recurring adjustments necessary for the fair presentation of such financial information have been included. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year’s presentation.
	The Company historically has experienced and expects to experience variability in quarterly results. The consolidated statement of income for the three months ended March 31, 2002 is not necessarily indicative of the results to be expected for the full year.
2.	Changes in Shareholders’ Equity
	During March 2002, the Company issued 7,935,000 shares of common stock in a public offering realizing approximately $138,531 in aggregate net proceeds. The net proceeds were used to repay approximately $51,095 of outstanding construction loans and $62,100 of outstanding balance of the revolver portion of our senior secured credit facility.
3.	New Accounting Pronouncements
	Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) 144, Accounting for the Impairment or Disposal of Long-Lived Assets which supercedes SFAS 121 and APB 30. SFAS 144 retains the requirements of SFAS 121 for recognition and measurement of an impairment loss on long-lived assets, and establishes a single accounting model for all long-lived assets to be disposed of by sale, whether previously held and used or newly acquired. The adoption of SFAS 144 did not have a material effect on the Company’s financial position and results of operations.
	In April 2002, the Financial Accounting Standards Board (FASB) approved SFAS 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections. In addition to rescinding SFAS 4, 44 and 64 and amending SFAS 13, SFAS 145 establishes a financial reporting standard for classification of extinguishment of debt in the financial statements in accordance with APB 30. SFAS 145 will be effective for the Company’s fiscal year 2003. Management does not expect the adoption of SFAS 145 to have a material effect on the Company’s financial position or results of operations.
4.	Segment Information
	The Company operates in three reportable business segments: homebuilding, parcel and lot and amenity membership and operations. Revenues from segments below the quantitative thresholds are primarily attributable to real estate services such as brokerage, title company, property management and mortgage banking operations (collectively “All Other”). The table below presents information about reported operating income for the three months ended March 31, 2002 and 2001. Asset information by reportable segment is not presented since the Company does not prepare such information.

6

WCI COMMUNITIES, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2002
(In thousands, except share data)

Three months ended March 31, 2002

	Homebuilding
							Amenity
	Mid- and		Single- and		Parcel		Membership		All		Segment
	High-rise		Multi-family		and Lot		and Operations		Other		Totals
Revenues	$	114,016	$	70,790	$	4,140	$	20,096	$	21,716	$	230,758
Interest income		—		—		—		—		685		685
Contribution margin		45,280		19,158		2,599		5,285		5,780		78,102

Three months ended March 31, 2001

	Homebuilding
							Amenity
	Mid- and		Single- and		Parcel		Membership		All		Segment
	High-rise		Multi-family		and Lot		and Operations		Other		Totals
Revenues	$	78,145	$	65,467	$	15,979	$	19,303	$	17,589	$	196,483
Interest income		—		—		—		—		476		476
Contribution margin		32,838		11,578		5,554		4,847		3,874		58,691

A reconciliation of total segment contribution margin to consolidated net income before income tax and extraordinary item for the three months ended March 31, 2002 and 2001 is as follows:

		For the three months ended
		March 31,
		2002			2001
Segment contribution margin		$	78,102		$	58,691
Corporate overhead and costs			(34,276	)		(25,767	)
Interest expense, net			(10,861	)		(12,673	)
Depreciation and amortization			(2,030	)		(1,994	)
	Income before income taxes and extraordinary item	$	30,935		$	18,257

7

WCI COMMUNITIES, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2002
(In thousands, except share data)

5.	Real Estate Inventories
	Real estate inventories are summarized as follows:

		March 31,		December 31
		2002		2001
Land		$	153,301	$	170,746
Work in progress:
	Land and improvements		331,495		231,750
	Tower residences		194,040		176,698
	Homes		121,505		123,747
Completed inventories:
	Land and improvements		46,319		49,051
	Tower residences		3,943		6,564
	Homes		14,719		15,887
		$	865,322	$	774,443

6.	Capitalized Interest
	The following table is a summary of capitalized and amortized interest:

	For the
	three months ended
	March 31,
	2002			2001
Total interest incurred	$	15,067		$	15,215
Debt issue cost amortization		1,008			898
Interest amortized		3,329			4,076
Interest capitalized		(8,543	)		(7,516	)
Interest expense, net	$	10,861		$	12,673

7.	Earnings Per Share
	Basic earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares outstanding including the dilutive effect of stock options.

8

WCI COMMUNITIES, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2002
(In thousands, except share data)

Information pertaining to the calculation of earnings per share is as follows:

	For the three months ended
	March 31,
	2002		2001
Basic weighted average shares		38,145,048		36,381,715
Stock options		1,463,173		942,803
Diluted weighted average shares		39,608,221		37,324,518

8.

Goodwill and Other Intangibles and Implementation of SFAS 142

Effective January 1, 2002 the Company adopted SFAS 142, Goodwill and Other Intangible Assets. SFAS 142 provides guidance on accounting for intangible assets and eliminates the amortization of goodwill and certain identifiable intangible assets. Under the provisions of SFAS 142, intangible assets, including goodwill, that are not subject to amortization will be tested for impairment annually. The Company completed the required tests for impairment of goodwill and does not currently believe its goodwill is impaired. In accordance with SFAS 142, the Company has allocated goodwill to its operating segments as of March 31, 2002 as follows:

Homebuilding	$	16,097
Amenity membership and operations		5,365
All other		7,392
	$	28,854

Intangible assets subject to amortization had accumulated amortization of $1,269 and $1,152 at March 31, 2002 and December 31, 2001, respectively. The estimated aggregate amortization expense for each of the five succeeding fiscal years is as follows:

2002	$	480
2003		480
2004		436
2005		299
2006		299
	$	1,994

9

WCI COMMUNITIES, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2002
(In thousands, except share data)

A reconciliation of income before extraordinary item, net income and earnings per share to exclude amortization expense in the prior year period follows:

		For the three months ended
		March 31,
		2002		2001
Reported income before extraordinary item		$	18,860	$	10,934
Add back: Goodwill amortization			—		804
Adjusted income before extraordinary item			18,860		11,738
Extraordinary item, net of tax			—		(1,870	)
Adjusted net income		$	18,860	$	9,868
Earnings (loss) per share:
Basic
	Reported income before extraordinary item	$	.49	$	.30
	Goodwill amortization		—		.02
	Adjusted income before extraordinary item		.49		.32
	Extraordinary item, net of tax		—		(.05	)
	Adjusted net income	$	.49	$	.27
Diluted
	Reported income before extraordinary item	$	.48	$	.29
	Goodwill amortization		—		.02
	Adjusted income before extraordinary item		.48		.31
	Extraordinary item, net of tax		—		(.05	)
	Adjusted net income	$	.48	$	.26

9.	Commitments and Contingencies
	From time to time, the Company has been involved in various litigation matters involving ordinary and routine claims incidental to its business. In addition, in May 2000, individuals filed a lawsuit against the Company, which seeks class action status, and arising out of a preferred builder program under which plaintiffs purchased vacant lots and then contracted with a builder of their choice to construct a residence on their lots. In March 2002 the court denied plaintiffs motion for class certification. Plaintiffs did not appeal the ruling. The Company does not believe the resolution of this matter will have a material adverse effect on the Company’s financial condition or results of operations. The Company believes it has meritorious defenses and intends to vigorously defend this action.
10.	Subsequent Event
	The Company issued $200,000 of 9 1/8% senior subordinated notes (the Notes) on April 24, 2002 in a private placement. Effective May 2, 2002, the Company filed a Registration Statement on Form S-4 with the Securities and Exchange Commission offering to exchange the unregistered Notes for notes registered under the Securities Act of 1933, as amended. The exchange was not completed as of the date of this filing. The terms of the registered Notes will be substantially identical to the unregistered Notes, except the registered Notes will not contain transfer restrictions. The Notes mature May 1, 2012 and interest is payable

10

WCI COMMUNITIES, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2002
(In thousands, except share data)

	semi-annually in arrears on each May 1 and November 1 commencing on November 1, 2002. The Notes are subordinated to all existing and future senior debt. The Notes indenture agreement contains certain financial and operational covenants that may limit the Company’s and its subsidiaries’ ability to incur additional debt, pay dividends, repurchase capital stock and make investment acquisitions. Proceeds from the Notes were used to repay $174,800 of the senior secured credit facility, $11,200 of other debt and for general corporate purposes.
11.	Supplemental Guarantor Information
	Obligations to pay principal and interest on the Company’s senior subordinated notes are guaranteed fully and unconditionally by the Company’s wholly owned subsidiaries, including its only significant subsidiary, Bay Colony-Gateway, Inc. Separate financial statements of the guarantors are not provided, as subsidiary guarantors are 100% owned by the Company and guarantees are full, unconditional, and joint and several. Supplemental condensed consolidating financial information of the Company’s guarantors is presented below.

11

WCI COMMUNITIES, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2002
(In thousands)

CONDENSED CONSOLIDATING BALANCE SHEET

				March 31, 2002
				WCI
				Communities,		Guarantor		Eliminating
				Inc.		Subsidiaries		Entries			Consolidated
			Assets
Cash and cash equivalents				$	26,624	$	4,399	$	—		$	31,023
Restricted cash					1,666		16,700		—			18,366
Contracts receivable					297,757		179,824		—			477,581
Mortgage notes and accounts receivable					26,172		41,801		(15,100	)		52,873
Real estate inventories					476,189		389,133		—			865,322
Property and equipment					39,435		65,850		—			105,285
Investment in guarantor subsidiaries					246,869		—		(246,869	)		—
Other assets					339,995		83,565		(263,283	)		160,277
	Total assets			$	1,454,707	$	781,272	$	(525,252	)	$	1,710,727
		Liabilities and Shareholders’ Equity
Accounts payable and other liabilities				$	260,665	$	469,211	$	(263,283	)	$	466,593
Senior secured credit facility					245,000		—		—			245,000
Senior subordinated notes					354,801		—		—			354,801
Mortgages and notes payable					17,100		65,192		(15,100	)		67,192
					877,566		534,403		(278,383	)		1,133,586
Shareholders’ equity					577,141		246,869		(246,869	)		577,141
	Total liabilities and shareholders’ equity			$	1,454,707	$	781,272	$	(525,252	)	$	1,710,727

				December 31, 2001
				WCI
				Communities,		Guarantor		Eliminating
				Inc.		Subsidiaries		Entries			Consolidated
			Assets
Cash and cash equivalents				$	45,382	$	12,611	$	—		$	57,993
Restricted cash					1,749		17,366		—			19,115
Contracts receivable					230,412		169,304		—			399,716
Mortgage notes and accounts receivable					11,411		47,363		—			58,774
Real estate inventories					414,481		359,962		—			774,443
Property and equipment					37,268		62,458		—			99,726
Investment in guarantor sudsidiaries					231,884		—		(231,884	)		—
Other assets					325,401		82,950		(246,926	)		161,425
	Total assets			$	1,297,988	$	752,014	$	(478,810	)	$	1,571,192
		Liabilities and Shareholders’ Equity
Accounts payable and other liabilities				$	262,313	$	454,149	$	(246,926	)	$	469,536
Senior secured credit facility					250,000		—		—			250,000
Senior subordinated notes					354,936		—		—			354,936
Mortgages and notes payable					11,694		65,981		—			77,675
					878,943		520,130		(246,926	)		1,152,147
Shareholders’ equity					419,045		231,884		(231,884	)		419,045
	Total liabilities and shareholders’ equity			$	1,297,988	$	752,014	$	(478,810	)	$	1,571,192

12

WCI COMMUNITIES, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2002
(In thousands)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

	For the three months ended March 31, 2002
	WCI
	Communities,			Guarantor			Eliminating
	Inc.			Subsidiaries			Entries			Consolidated
Total revenues	$	138,629		$	92,814		$	—		$	231,443
Total cost of sales		87,115			66,226			—			153,341
Contribution margin		51,514			26,588			—			78,102
Total other expenses		41,116			6,051			—			47,167
Income before income taxes and equity in income of guarantor subsidiaries		10,398			20,537			—			30,935
Income tax expense		(4,346	)		(7,729	)		—			(12,075	)
Equity in income of guarantor subsidiaries, net of tax		12,808			—			(12,808	)		—
Net income	$	18,860		$	12,808		$	(12,808	)	$	18,860

	For the three months ended March 31, 2001
	WCI
	Communities,			Guarantor			Eliminating
	Inc.			Subsidiaries			Entries			Consolidated
Total revenues	$	113,617		$	101,899		$	(18,557	)	$	196,959
Total cost of sales		76,056			62,212			—			138,268
Contribution margin		37,561			39,687			(18,557	)		58,691
Total other expenses		50,833			8,158			(18,557	)		40,434
(Loss) income before income taxes, equity in income of guarantor subsidiaries and extraordinary item		(13,272	)		31,529			—			18,257
Income tax benefit (expense)		4,625			(11,948	)		—			(7,323	)
Equity in income of guarantor subsidiaries, net of tax		17,711			—			(17,711	)		—
Income before extraordinary item		9,064			19,581			(17,711	)		10,934
Extraordinary item:
Net loss on early repayment of debt		—			(1,870	)		—			(1,870	)
Net income	$	9,064		$	17,711		$	(17,711	)	$	9,064

13

WCI COMMUNITIES, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2002
(In thousands)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

				For the three months ended March 31, 2002
				WCI
				Communities,			Guarantor			Eliminating
				Inc.			Subsidiaries			Entries			Consolidated
Cash flows from operating activities:
	Net income			$	18,860		$	12,808		$	(12,808	)	$	18,860
	Adjustments to reconcile net income to net cash used in operating activities:
		Deferred income tax liabilities			(3,067	)		—			2,291			(776	)
		Depreciation and amortization			1,776			1,127			—			2,903
		Earnings from investments in joint ventures			(47	)		(1,646	)		—			(1,693	)
		Equity in earnings of guarnator subsidiaries			(12,808	)		—			12,808			—
		(Contributions to guarantor subsidiaries) contributions from parent, net			(2,177	)		2,177			—			—
Changes in assets and liabilities:
		Contracts and accounts receivable			(83,059	)		(5,558	)		15,100			(73,517	)
		Real estate inventories			(51,708	)		(29,171	)		—			(80,879	)
		Other assets			(15,214	)		1,904			16,357			3,047
		Accrued expenses and other liabilities			2,559			15,899			(18,648	)		(190	)
			Net cash used in operating activities		(144,885	)		(2,460	)		15,100			(132,245	)
Cash flows from investing activities:
	Reductions on mortgages and notes receivable, net				953			600			—			1,553
	Additions to property and equipment, net				(3,121	)		(4,590	)		—			(7,711	)
			Net cash used in investing activities		(2,168	)		(3,990	)		—			(6,158	)
Cash flows from financing activities:
	Net borrowings on senior secured credit facilities				(5,000	)		—			—			(5,000	)
	Net repayments on mortgages and notes payable				(4,594	)		(909	)		(15,100	)		(20,603	)
	Net proceeds from issuance of common stock				138,531			—			—			138,531
	Other				(642	)		(853	)		—			(1,495	)
			Net cash (used) provided by financing activities		128,295			(1,762	)		(15,100	)		111,433
Net (decrease) increase in cash and cash equivalents					(18,758	)		(8,212	)		—			(26,970	)
Cash and cash equivalents at beginning of year					45,382			12,611			—			57,993
Cash and cash equivalents at end of year				$	26,624		$	4,399		$	—		$	31,023

14

WCI COMMUNITIES, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
MARCH 31, 2002
(In thousands)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

				For the three months ended March 31, 2001
				WCI
				Communities,			Guarantor			Eliminating
				Inc.			Subsidiaries			Entries			Consolidated
Cash flows from operating activities:
	Net income			$	9,064		$	17,711		$	(17,711	)	$	9,064
	Adjustments to reconcile net income to net cash (used in) provided by operating activities:
		Net loss on debt restructuring			1,870			—			—			1,870
		Deferred income tax liabilities			(2,533	)		—			6,927			4,394
		Depreciation and amortization			1,771			1,121			—			2,892
		Losses (earnings) from investments in joint ventures			19			(305	)		—			(286	)
		Equity in earnings of guarantor subsidiaries			(17,711	)		—			17,711			—
		Distributions from guarantor subsidiaries (contributions to parent), net			18,249			(18,249	)		—			—
		Repayment of investments in parent entities			—			43,773			(43,773	)		—
Changes in assets and liabilities:
		Contracts and accounts receivable			(47,277	)		(2,917	)		(892	)		(51,086	)
		Real estate inventories			(24,495	)		(54,610	)		—			(79,105	)
		Other assets			(66,192	)		19,523			53,436			6,767
		Accrued expenses and other liabilities			(18,348	)		53,451			(59,471	)		(24,368	)
			Net cash (used in) provided by operating activities		(145,583	)		59,498			(43,773	)		(129,858	)
Cash flows from investing activities:
	Principal reductions on mortgages and notes payable, net				1,459			1,260			—			2,719
	Additions to property and equipment, net				(4,767	)		(389	)		—			(5,156	)
			Net cash (used in) provided by investing activities		(3,308	)		871			—			(2,437	)
Cash flows from financing activities:
	Net repayments on senior secured credit facilities				(21,800	)		—			—			(21,800	)
	Net repayments on mortgages and notes payable				(3,885	)		(79,120	)		—			(83,005	)
	Proceeds from borrowings on senior subordinated notes				250,000			—			—			250,000
	Principal repayments on subordinated notes				(100,783	)		—			43,773			(57,010	)
	Other				(11,845	)		21,081			—			9,236
		Net cash provided by (used in) financing activities			111,687			(58,039	)		43,773			97,421
Net (decrease) increase in cash and cash equivalents					(37,204	)		2,330			—			(34,874	)
Cash and cash equivalents at beginning of year					49,143			6,594			—			55,737
Cash and cash equivalents at end of year				$	11,939		$	8,924		$	—		$	20,863

15

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

Overview

In the first quarter, we achieved a significant increase in revenues and earnings driven primarily by a larger number and greater value of sold tower units under construction and higher margins and unit average price in traditional homebuilding operations. Total revenues for the three months ended March 31, 2002, increased 17.5% to $231.4 million, from $197.0 million for the comparable period in 2001. Total contribution margin for the three months ended March 31, 2002 increased 33.0% to $78.1 million, from $58.7 million for the comparable period in 2001. Income before income taxes for the three months ended March 31, 2002 increased 68.9% to $30.9 million, from $18.3 million for the comparable period in 2001. Income tax expense increased 65.8% to $12.1 million, from $7.3 million for the comparable period in 2001. The effective income tax rate was 39.0% and 40.1% for the three months ended March 31, 2002 and 2001, respectively. For the quarter ended March 31, 2001, we recognized a $1.9 million (net of tax) extraordinary loss related to the write-off of unamortized debt issue costs associated with the early repayment of debt in conjunction with the offering of $250 million in senior subordinated notes. Net income for the three months ended March 31, 2002 increased 107.7% to $18.9 million, from $9.1 million for the comparable period in 2001. As of January 2002, we adopted Statement of Financial Accounting Standards 142 and accordingly, no longer amortize goodwill. For the quarter ended March 31, 2001, amortization of goodwill was approximately $804,000.

In March 2002, we issued 7,935,000 shares of common stock in a public offering realizing approximately $138.5 million in net proceeds. Our operating results for the three months ended and the issuance of common stock contributed to a 37.7% increase in shareholders’ equity to $577.1 million at March 31, 2002. The increase in shareholders’ equity and the use of initial public offering proceeds for repayment of existing debt contributed to a reduction in the debt-to-capitalization ratio to 53.6% at March 31, 2002 compared to 62.0% at December 31, 2001.

Three months ended March 31, 2002 compared to three months ended March 31, 2001

Homebuilding

Traditional homebuilding

	Three months ended March 31, 2002						Three months ended March 31, 2001
Single- and multi-family					Average						Average
homebuilding	Number		Value*		Price*		Number		Value*		Price*
Number of communities with active homebuilding at period end		16		—		—		17		—		—
Net new contracts		497	$	156,182	$	314		513	$	171,093	$	334
Closed sales		225		70,790		315		238		65,467		275
Ending backlog		888		351,276		396		1,028		340,931		332

* Dollar amounts in thousands.

Single and multi-family homebuilding revenues increased 8.1% to $70.8 million for the three month period ended March 31, 2002 compared to $65.5 million for the same period in 2001. The increase in revenues was attributable to a 14.5% increase in the average price per home closed to $315,000 in 2002 from $275,000 in 2001. The increase in the average price per home closed was attributable to closings of new homes in our higher priced communities included in the Palm Beach and Southwest Florida regions. The number of homes closed decreased to 225 units from 238 units due to (1) a lower number of homes in backlog at the beginning of 2002 compared to the number of homes in backlog at the beginning of 2001 and (2) the close out of a large community in the

16

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Southeast Florida region offset by an increase in closings from existing and new communities in the Southeast and Southwest Florida regions.

Single and multi-family homebuilding contribution margin increased 65.5% to $19.2 million for the three months ended March 31, 2002 compared to $11.6 million for the same period in 2001. Contribution margin percentage increased to 27.1% compared to 17.7% for the comparable period in 2001. The increases were due primarily to closings of higher priced homes that produced higher margins and ongoing initiatives to reduce development and construction costs.

The value of net new contracts for single and multi-family homebuilding decreased to $156.2 million for the three months ended March 31, 2002 compared to $171.1 million for the same period in 2001. The average sales price decreased 5.9% to $314,000 from $334,000. The decreases are primarily attributable to (1) the close out of a community located in the Southeast Florida region; (2) decreased product availability in certain communities located in the Southwest Florida region offset by increased sales at existing and new communities throughout our other regions; and (3) change in the product mix of homes sold. Backlog at March 31, 2002 was $351.3 million or 3.1% higher than the $340.9 million at March 31, 2001. The increase in backlog was primarily the result of a 19.3% increase in the average sales price of homes under contract to $396,000 in 2002 compared to $332,000 in 2001.

Mid-rise and high-rise homebuilding

	For the three months ended				For the three months ended
	March 31, 2002				March 31, 2001
Mid-rise and high-rise homebuilding	Number		Value*		Number		Value*
Number of towers under construction		14		—		8		—
Net new contracts		92	$	93,993		87	$	68,479
Reported revenues		—		114,016		—		78,145
Ending backlog		—		452,821		—		281,052
*Dollar amounts in thousands.

Mid-rise and high-rise homebuilding revenues increased 46.0% to $114.0 million for the three months ended March 31, 2002 compared to $78.1 million for the same period in 2001. The increase in mid-rise and high-rise homebuilding revenues was attributable primarily to an increase in the number of tower residences that qualified for recognition of revenue and the increase in the value of sold units in those towers. We delivered tower units or met the requirements for percentage of completion revenue recognition in sixteen towers in the three months ended March 31, 2002 as compared to eleven towers in the same period in 2001.

Mid-rise and high-rise homebuilding contribution margin increased 38.1% to $45.3 million for the three months ended March 31, 2002 compared to $32.8 million for the same period in 2001. The mid-rise and high-rise homebuilding contribution margin percentage for the three months ended decreased to 39.7% compared to 42.0% for the same period in 2001. The decrease was primarily the result of changes in the product mix of units under contract among those towers.

The value of net new contracts for mid-rise and high-rise homebuilding increased 37.2% to $94.0 million for the three months ended March 31, 2002 compared to $68.5 million for the same period in 2001. The increase in net new contracts was primarily the result of a 5.7% increase in the number of units contracted to 92 from 87 in the comparable period in 2001, and a 27.1% increase in the average selling price for each new contract to $1.0 million from $787,000 in the same period in 2001. Backlog at March 31, 2002 was $452.8 million or 61.1% higher than the $281.1 million at March 31, 2001. The increase in backlog was due primarily to the increased number of net

17

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

new contracts and the 16.7% increase in the average price of tower units under contract to $1.4 million in 2002 from $1.2 million in 2001.

Parcel and lot

Parcel and lot revenues decreased 74.4% to $4.1 million for the three months ended March 31, 2002 compared to $16.0 million for the same period in 2001. Sales of residential parcels continued to decrease due to the sell-out of the few residential parcels that were not designated for homebuilding, while commercial parcel sales decreased primarily as a result of fewer available parcels for sale. Lot sales decreased 40.0% to $3.3 million for the three months ended March 31, 2002 compared to $5.5 million for the comparable period in 2001. The decrease was primarily due to a reduced number of lots remaining available for sale.

Parcel and lot contribution margin decreased to $2.6 million compared to $5.6 million, and the resulting contribution margin percentage increased to 63.4% compared to 35.0% in 2001. The increase in contribution margin percentage was primarily due to the change in mix of parcel and lot sales closed in the respective periods.

Amenity membership and operations

Amenity membership and operating revenues increased 4.1% to $20.1 million for the three month period ending March 31, 2002 compared to $19.3 million for the same period in 2001. Equity membership and marina slip sales increased 29.8% to $7.4 million for the three month period in 2002 compared to $5.7 million for the same period in 2001, while membership dues and amenity service revenues decreased 6.6% to $12.7 million compared to $13.6 million. The increase in equity membership and marina slip revenue was attributable primarily to marina slip sales at our Gulf Harbour community. The decrease in operating revenues was attributable primarily to the turnover of our Gateway Golf and Country Club to its members in December 2001.

Amenity contribution margin increased to $5.3 million compared to $4.8 million, and the resulting contribution margin percentage increased to 26.4% compared to 24.9%. The increase in contribution margin and contribution margin percentage was attributable to higher margin equity membership and marina slip sales.

Real estate services and other

Real estate services and other revenues increased 23.8% to $22.4 million for the three months ended March 31, 2002 compared to $18.1 million for the same period in 2001. The increase in revenues was primarily attributable to a $1.7 million increase in real estate brokerage revenues that was generated by the increased volume of transactions closed, a $1.6 million increase in equity in earnings of joint ventures and management fees and a $1.0 million increase in title, mortgage banking and other operations for the three months compared to the same period in 2001.

Contribution margin increased to $5.8 million compared to $3.9 million and the resulting contribution margin percentage increased to 25.9% compared to 21.5% for the same period in 2001, due primarily to the increase in equity in earnings of joint ventures and management fees and the result of growth in volume of transactions and production per agent.

Interest expense, net of capitalization

Interest expense, net of capitalization decreased 14.2% to $10.9 million for the three months ended March 31, 2002 compared to $12.7 million for the same period in 2001. Interest incurred decreased slightly to $15.1 million for the three months ended March 31, 2002 compared to $15.2 million for the same period in 2001. Amortization of previously capitalized interest decreased by $747,000 to 1.4% of total revenue for 2002

18

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

compared to 2.1% of total revenue for 2001 due primarily to the decrease in parcel and lot sales and the change in homebuilding product mix between the two periods. Interest capitalized increased 13.3% to $8.5 million for 2002 compared to $7.5 million in 2001 due to a greater book value of properties undergoing active development.

Selling, general and administrative expenses, including real estate taxes

Selling, general and administrative expenses, including real estate taxes, increased to $34.3 million for the three months ended March 31, 2002 compared to $25.8 million for the comparable period in 2001. The increase was primarily due to (1) increased wages, benefits costs and administrative expenses associated with the increase in personnel to support our growth; (2) increased sales and marketing expenditures related to newly introduced communities, subdivisions and towers under development; and (3) increases in insurance premiums.

Liquidity and capital resources

We assess our liquidity in terms of our ability to generate cash to fund our operating and investing activities. We finance our land acquisitions, land improvements, homebuilding, development and construction activities from internally generated funds, credit agreements with financial institutions and other debt. As of March 31, 2002, we had cash and cash equivalents of $31.0 million.

Net cash used in operations was $132.2 million for the period ended March 31, 2002 as compared to cash used in operations of $129.9 million for the comparable period in the prior year. Cash flow from operations before net inventory additions and contracts receivable and mortgages held for resale improved to $26.5 million for the period ended March 31, 2002 compared to $665,000 for the comparable period in 2001. Net inventory additions increased slightly to $80.9 million for the period ended March 31, 2002 compared to $79.1 million in 2001. Net inventory additions is primarily related to single- and multi-family home inventories that are under contract for delivery during the next six to nine months and, to a lesser degree, tower inventories that have not yet qualified for revenue recognition and land acquisitions. Contracts receivable increased by $77.9 million for 2002 compared to $51.4 million during 2001 reflecting the increase in the value of tower units under contract that are now being constructed and that have met the requirements for percentage of completion revenue recognition. Land acquisitions for the period ended March 31, 2002 and 2001 totaled approximately $41.7 million and $49.9 million, respectively. We expect real estate inventories will continue to increase as we are currently negotiating and searching for additional opportunities to obtain control of land for future communities.

Investing activities for the period ended March 31, 2002 included $7.7 million of net additions to property and equipment compared to $5.2 million in the same period in the prior year. For the period ended March 31, 2002, cash was provided from net mortgage notes receivable collections of $1.6 million compared to $2.7 million in the same period in 2001. We anticipate cash flows used in investing activities will increase with development of current and future amenity operations.

Financing activities provided cash of $111.4 million for the period ended March 31, 2002 compared to cash provided of $97.4 million in the same period in 2001. The net cash inflow for the period ended March 31, 2002 was primarily the result of the issuance of 7.9 million shares of common stock in March 2002 resulting in net proceeds of $138.5 million, net of additional borrowings of $30.7 million and repayments totaling $57.8 million for mortgages and notes payable, term loan and other debt obligations.

The senior secured credit facility includes a $250 million amortizing term loan and $200 million revolving loan. The facility allows us to borrow and repay up to the maximum amount under the $200 million revolving loan subject to maintaining an adequate collateral borrowing base. The term loan requires semi-annual principal payments of $5.0 million commencing January 2002. On April 24, 2002, we issued $200 million 9 1/8% senior subordinated notes (the Notes). The Notes mature May 1, 2012 and interest is payable semi-annually in arrears on each May 1 and November 1 commencing November 1, 2012. A portion of the proceeds from the Notes was

19

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

used to repay $145.0 million of the term loan balance. We are in the process of amending and restructuring our senior secured credit facility to provide for an unsecured $350 million revolving facility. As of March 31, 2002, we had $191.9 million available for borrowing under the senior secured credit facility and $8.1 million committed pursuant to letters of credit.

As of March 31, 2002, $18.0 million was available for borrowing and approximately $15.1 million was committed to fund mortgages under the warehouse facility maintained by our wholly owned finance subsidiary, Financial Resources Group, Inc.

The amount of community development district and improvement district bond obligations issued with respect to our communities totaled $204.2 million at March 31, 2002. We have accrued $35.0 million as of March 31, 2002, as our estimate of the amount of bond obligations that may be required to fund. We may, subject to limitations in the senior secured credit facility, use district financing to a greater extent in the future.

We have various interest rate swap agreements with counterparties that are major financial institutions. The swap agreements effectively fix the variable interest rate on approximately $90.0 million of the senior secured credit facility. The interest rate swap agreements expire February 2003 ($40.0 million) and February 2004 ($50.0 million). The swap agreements have been designated as cash flow hedges and are reflected at fair value in the consolidated balance sheet. The interest rate swap agreements had a fair value and estimated cumulative unrealized loss of approximately $2.9 million at March 31, 2002.

We released four towers for reservation and commenced construction on three towers during the quarter ended March 31, 2002. We intend to use construction loans and customer deposits to construct high-rise towers. After the construction loans are repaid from the proceeds of closings with buyers, remaining proceeds will be available for general use. As of March 31, 2002, we had construction loans in place for seven towers with $31.1 million outstanding and $295.7 million of remaining undrawn commitments. We expect to begin construction on four towers and to close five towers for the remainder of 2002, which will generate additional net cash flow after repayment of the related construction loans.

During the course of future operations, we plan to acquire developed and undeveloped land, which will be used in the homebuilding, tower and amenities lines of business. As of March 31, 2002, we had contracts or options aggregating $65.4 million, to acquire approximately 600 acres of land that are expected to yield approximately 1,500 residential units. Payments of approximately $11.1 million are expected to be made during 2002 with the balance paid in future years. We recently commenced development of two new projects and expect to commence development of three other communities this year, where we anticipate closings to start in 2003 and 2004.

FORWARD-LOOKING STATEMENTS

Investors are cautioned that certain statements contained in this document, as well as some statements by the Company in periodic press releases and some oral statements by Company officials to securities analysts and stockholders during presentations about the Company are “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements which are predictive in nature, which depend upon or refer to future events or conditions, or which include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “hopes”, and similar expressions constitute forward-looking statements. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future Company actions, which may be provided by management are also forward-looking statements. Forward-looking statements are based on current expectations and beliefs concerning future events and are subject to risks and uncertainties about the Company, economic and market factors and the homebuilding industry, among other things. These statements are not guaranties of future performance.

20

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Actual events and results may differ materially from those expressed or forecasted in the forward-looking statements made by the Company or Company officials due to a number of factors. The principal factors that could cause the Company’s actual results to differ materially from the forward-looking statements include:

• the ability to raise capital and grow the Company’s operations on a profitable basis;

• the ability to compete in the Florida real estate market;

• the ability to obtain necessary permits and approvals for the development of our land;

• the ability to pay principal and interest on outstanding debt;

• the ability to borrow and obtain surety bonds in the future;

• adverse legislation or regulation;

• availability of labor or material costs or significant increase in their costs;

• increases in interest rates;

• the level of consumer confidence;

• the availability and cost of land in desirable areas and ability to expand successfully into these areas;

• natural disasters;

• unanticipated litigation or legal proceedings;

• conditions in the capital, credit and homebuilding markets;

• the ability to sustain or increase historical revenues and profit margins;

• risks associated with increased insurance costs or unavailability of adequate coverage, perceived risk of travel and changes in economic conditions due to recent events; and

• the continuation of current trends and the general economic conditions.

All forward-looking statements attributable to us or any persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.

If one or more of these risks or uncertainties materializes, or if underlying assumptions provide incorrect, our actual results may vary materially from those expected, estimated or projected.

The Company undertakes no obligation to update any forward-looking statements in this Report or elsewhere.

21

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are subject to interest rate risk on the variable rate portion of our debt. We hedge a portion of our exposure to changes in interest rates by entering into interest rate swap agreements to lock in a fixed interest rate.

Our Annual Report on Form 10-K for the year ended December 31, 2001 contains information about market risks under “Item 7A. Quantitative and Qualitative Disclosure About Market Risk.”

The following table sets forth, as of March 31, 2002, the Company’s debt obligations, principal cash flows by scheduled maturity, weighted average interest rates and estimated fair market value. In addition, the table sets forth the notional amounts and weighted average interest rates of the Company’s interest rate swaps.

																					FMV at
		2002			2003			2004			2005		2006		Thereafter			Total			3/31/02
Debt:
	Fixed rate	$	90		$	20		$	10,000		$	—	$	—	$	350,000		$	360,110		$	384,610
	Average interest rate		10.54	%		10.54	%		10.62	%		—		—		10.63	%		10.61	%
	Variable rate	$	5,659		$	41,575		$	254,848		$	—	$	—	$	—		$	302,082		$	302,082
	Average interest rate		4.79	%		4.82	%		4.95	%		—		—		—			4.81	%
Interest Rate Swaps:
	Variable to fixed	$	—		$	40,000		$	50,000		$	—	$	—	$	—		$	90,000		$	(2,852	)
	Average pay rate		—			5.69	%		5.68	%		—		—		—			—
	Average receive rate		*			*			*			*		*		*			*

*90-Day Libor

22

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note 9, Notes to Consolidated Unaudited Financial Statements, which is contained in Part I, Item 1, of this Quarterly Report on Form 10-Q and which is incorporated by reference into this response.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

3.1*	Certificate of Incorporation of WCI Communities, Inc.
3.2*	By-laws of WCI Communities, Inc.
4.1*	Indenture, dated as of April 24, 2002, by and among WCI Communities, Inc., certain of its subsidiaries and The Bank of New York, relating to $200,000,000 in aggregate principal amount of 9 1/8% Senior Subordinated Notes due 2012.

* Incorporated by reference to the exhibits in the Registration Statement on Form S-4 previously filed by WCI Communities, Inc. (Registration No. 333-87250)

(b)	Reports on Form 8-K
	No reports on Form 8-K were filed during the quarter ended March 31, 2002.

23

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		WCI COMMUNITIES, INC.
Date:	May 13, 2002	/s/   JAMES P. DIETZ James P. Dietz Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

24