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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) October 20, 2004
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The St. Joe Company
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(Exact Name of Registrant as Specified in Its Charter)
Florida
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(State or Other Jurisdiction of Incorporation)
1-10466 59-0432511
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(Commission File Number) (IRS Employer Identification No.)
245 Riverside Avenue, Suite 500, Jacksonville, FL 32202
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(Address of Principal Executive Offices) (Zip Code)
(904) 301-4200
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The Company issued a Press Release dated October 20, 2004, announcing the
Company's financial results for the quarter ended September 30, 2004. A copy is
furnished with this Form 8-K as Exhibit 99.1 and is incorporated by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE ST. JOE COMPANY
Dated: October 20, 2004 By: /s/ Michael N. Regan
--------------------------
Name: Michael N. Regan
Title: Senior Vice President
Exhibit 99.1
The St. Joe Company Reports Third Quarter 2004 Net Income of $26.3 Million, or
$0.34 Per Share
JACKSONVILLE, Fla.--(BUSINESS WIRE)--Oct. 20, 2004--
JOE Reaffirms 2004 Guidance; Results Strong Despite Active
Hurricane Season; duPont Trust Completes Seven-Year
Program To Reduce JOE Ownership
The St. Joe Company (NYSE:JOE) today announced that its third
quarter 2004 Net Income was $26.3 million, or $0.34 per share,
compared with $23.0 million, or $0.30 per share, for the third quarter
of 2003.
Net Income in the third quarter of 2004 included an after-tax gain
of $0.1 million, or less than $0.01 per share, on conservation land
sales, compared to after tax gains of $2.3 million, or $0.03 per
share, in the third quarter of 2003. All per share references in this
release are presented on a fully diluted basis.
Net Income for the first nine months of 2004 was $62.0 million, or
$0.81 per share, compared with $47.3 million, or $0.61 per share, for
the first nine months of 2003. Net income year-to-date for 2004
included after-tax conservation land sales gains of $1.6 million, or
$0.02 per share, compared to $13.8 million, or $0.18 per share, for
the first nine months of 2003.
JOE Performed Well in the Third Quarter
"JOE performed extremely well in a quarter when four major
hurricanes hit Florida," said Peter S. Rummell, chairman and CEO of
JOE. "Despite very tough weather, we turned in a strong quarter and
continued to make important progress on key strategic initiatives.
"Sales activity since the severe weather has generally remained
strong for JOE's resort, primary residential, commercial and rural
land, particularly in Northwest Florida," said Rummell. "Demand
remained high for home-site releases at WaterColor, RiverCamps on
Crooked Creek and Palmetto Trace after Hurricane Ivan. We continue to
be very pleased with our performance, our position and our financial
flexibility."
Key Challenges Ahead
"JOE continues to benefit from Florida's fundamental strength,"
said Rummell. "The continued march of Baby Boomer demographics
provides a strong, wealthy, growing market. JOE's thousands of acres
of high-quality, low-basis land gives us unmatched strength and
flexibility. And most important, our growing pipeline of entitled land
provides the capacity to meet market demand as Florida's growth
continues.
"We have a number of key challenges going forward," said Rummell.
"First is to manage our existing inventory of entitled land to
maximize value for shareholders while protecting Northwest Florida's
quality of life.
"Second, we must continue to identify, entitle and create the next
generation of unique places and communities that will provide a steady
stream of value creation for decades to come," said Rummell. "Given
our strong track record, we are confident we will be able to meet
these challenges. We believe, more strongly than ever, the best is yet
to come."
OUTLOOK
Reaffirming 2004 Guidance
"JOE has performed very solidly for the first three quarters of
2004, and we now have increased confidence in our fourth quarter and
full-year. We are pleased with the strong pipeline now in place across
our entire business," said Kevin M. Twomey, president of JOE.
"In February, we made comparisons to 2003, excluding conservation
land sales gains ($36.4 million pretax; $22.7 million net income), and
the non-cash Advantis charge ($8.8 million deduction from net income
in the second quarter of 2003)," said Twomey. "Excluding those items,
2003 'baseline' earnings per share was $0.80, as detailed in Table 21.
At that time, we expected the full year 2004 earnings per share,
before conservation land sales gains, to increase by 10 to 15 percent
over that adjusted 2003 baseline.
"In April, and again in July, we raised these earnings
expectations," said Twomey. "We said in July that we expected the
results for the full-year 2004, before conservation land sales gains,
to exceed 2003's baseline earnings per share by 25 percent or more.
"Based on our excellent year-to-date results, we are reaffirming
our guidance, before conservation land sales gains, for the full-year
of 2004 to exceed 2003's baseline earnings per share of $0.80 by 25
percent or more," said Twomey.
Towns & Resorts
"Results from the St. Joe Towns & Resorts segment are expected to
be seasonally slow in the final quarter of 2004," said Twomey. "We
plan no additional releases of units at our resort communities for the
remainder of the year. Since pricing has been particularly strong at
these communities, we believe that it is in our shareholder's
interests to hold the release of additional product until 2005."
Commercial Real Estate
"During the remainder of 2004 and into 2005, our commercial real
estate division will continue to focus on the development and sale of
retail, multi-family and commercial land in Northwest Florida," said
Twomey. "In the third quarter, the sale of a commercial building from
our investment property portfolio produced a pretax gain of $7.5
million. We also had a sale from our development property portfolio
for a gain of $0.2 million. Both of these gains are reported in
discontinued operations. In November of 2004, we expect to close the
sale of an additional commercial building from the development
property portfolio."
St. Joe Land
"St. Joe Land Company is expected to continue its strong
performance for the remainder of the year," said Twomey. "Overall, we
expect full-year 2004 results from St. Joe Land Company, excluding
conservation land sales gains, to be well above the levels achieved in
2003.
"Our RiverCamps product continues its momentum; interest from
potential buyers is increasing," said Twomey. "In August, 542
prospective buyers from 14 states submitted reservations for the
second release of 27 home sites at RiverCamps on Crooked Creek. Early
in the fourth quarter, contracts for 15 additional home sites were
accepted from this pool of potential buyers. We are beginning to see
the potential strength of the RiverCamps concept, both in terms of
demand and pricing."
DIVIDENDS AND STOCK REPURCHASE PROGRAM
On August 16, 2004, the board of directors declared a quarterly
cash dividend of $0.14 per share on its common stock, which was paid
on September 30, 2004 to shareholders of record at the close of
business on September 15, 2004.
During the third quarter of 2004, the company expended an
aggregate of $34.9 million for dividends and the acquisition of its
shares. JOE acquired 530,230 of its shares at a cost of $24.3 million,
or an average price of $45.75 per share, during the third quarter. Of
these amounts, 409,500 shares were acquired through open market
purchases for $18.7 million (an average of $45.72 per share); 27,590
shares were purchased from the Alfred I. duPont Testamentary Trust and
its affiliated foundation (the Trust), for $1.2 million (an average of
$42.06 per share); and 93,140 shares of stock, having a value of $4.4
million, were surrendered by company executives as payment for the
strike price and taxes due on exercised stock options.
Table 1 summarizes the company's stock repurchase activity from
1998 through September 30, 2004.
Table 1
Stock Repurchase Activity
Through September 30, 2004
Shares
------------------------------------------
Total
Purchased Purchased Cost
From From Trust (in Average
Period Public (1) Surrendered Total millions) Price
- ------ -------------------------------------------- -------- -------
1998 2,574,200 -- 11,890 2,586,090 $55.5 $21.41
1999 2,843,200 -- 11,890 2,855,090 69.5 24.31
2000 3,101,566 415,500 -- 3,517,066 80.2 22.78
2001 3,485,400 3,585,900 58,550 7,129,850 176.0 24.67
2002 2,583,700 2,586,206 256,729 5,426,635 157.6 29.03
2003 1,469,800 1,085,374 812,802 3,367,976 102.9 30.55
2004
(first
nine
months) 958,500 263,365 870,368 2,092,233 85.6 40.89
------- ------- ------- --------- ---- -----
Total/
Weighted
Average 17,016,366 7,936,345 2,022,229 26,974,940 $727.4 $26.94
========== ========= ========= ========== ====== ======
(1) The program with the Trust has been discontinued as of August
9, 2004.
The Trust, which owned 69.8 percent of the company in late 1997,
has decreased its holdings of JOE, through the sales of an aggregate
of 58.2 million shares, to 7.5 percent at the end of the third quarter
this year. The Trust has stated that it presently intends to hold
substantially all of its 5.7 million remaining shares.
"The completion of this diversification process by the Trust marks
an important moment in the history of JOE," said Rummell. "It
signifies the end of a journey towards a broader base of public
shareholders."
On September 30, 2004, 76,083,542 JOE shares were outstanding. The
number of weighted-average diluted shares in the third quarter of 2004
was 76,570,836. On September 30, 2004, approximately $142.2 million
remained of the company's current stock repurchase authorization. In
the first nine months of this year the company expended a total of
$114.5 million for dividends and the acquisition of its shares.
"We continue to make good progress on our program to pay dividends
and acquire stock through the purchase and the surrender of shares,"
said Twomey. "We remain comfortable with the benchmark of $125 million
to $175 million we established for the program this year and continue
to view the program as an important contributor to shareholder value."
ENTITLEMENTS
"JOE's pipeline of land-use entitlements continues to build," said
Rummell. "The management of the entitlements process has become a
clear strategic focus and a core competency for us as we continue to
work to improve our understanding of the land and find higher and
better uses for it."
As of September 30, 2004, JOE owned approximately 820,000 acres,
concentrated primarily in Northwest Florida. These holdings included
approximately 354,000 acres within 10 miles of the coast of the Gulf
of Mexico.
Land-Use Entitlements
JOE has a broad range of land-use entitlements in hand or in
various stages of the approval process for primary residential, resort
and RiverCamps in Northwest Florida and other high-growth regions of
the state.
Table 2 summarizes JOE's Florida residential, resort and
RiverCamps projects with land-use entitlements as of September 30,
2004.
Table 2
Summary of Land-Use Entitlements (1)
JOE Residential, Resort and RiverCamps Projects in Florida
September 30, 2004
Project County Total Maximum Units
Project Project Sold/Under
Acres Units(1) Contract
As of
9/30/04
Artisan Park (2) Osceola 160 616 276
CampCreek Golf
Cottages Walton 10 50 0
East Lake Powell Bay 181 360 0
Hawks Landing Bay 88 167 0
Palmetto Trace Bay 138 523 275
Paseos (2) Palm Beach 175 325 315
Perico Island (3) Manatee 352 686 0
Pier Park
(Residential) Bay 10 125 0
RiverCamps on
Crooked Creek Bay 1,500 450 23
Rivercrest (2) Hillsborough 413 1,300 902
RiverSide Calhoun 362 13 0
RiverTown St. Johns 4,170 4,500 23
SouthWood Leon 3,770 4,770 785
St. Johns Golf
& County Club St. Johns 820 799 616
SummerCamp Franklin 782 499 0
The Hammocks Bay 143 459 368
Victoria Park Volusia 1,859 4,000 578
Walton Corners Leon 60 33 0
WaterColor Walton 499 1,140 799
WaterSound Beach Walton 256 499 361
WaterSound first
phase Walton 506 487 0
WaterSound West
Beach Walton 62 197 0
WaterMill Gulf 94 120 0
WindMark Beach Gulf 2,080 1,662 104
---- ----- ---
Total (4) 18,490 23,780 5,425
====== ====== =====
(1) A project is deemed land-use entitled when all major
discretionary governmental land use approvals have been received. Some
of these projects may require additional permits for development
and/or build-out; they also may be subject to legal challenge. Maximum
project units represent the number of units entitled. The actual
number of units to be constructed at full build-out may be lower than
the number entitled.
(2) Paseos and Rivercrest are each 50 percent owned by JOE.
Artisan Park is 74 percent owned by JOE.
(3) Perico Island has land-use entitlements from the City of
Bradenton that have been challenged by Manatee County and others. JOE
has an option to purchase the land for this project.
(4) James Island and Hampton Park are not included in this table
since only 5 units remain to be sold, including 3 models.
Land-Use Entitlements Currently In Process
Table 3 summarizes JOE's Florida residential, resort and
RiverCamps projects in the entitlement process as of September 30,
2004.
Table 3
JOE Residential, Resort and RiverCamps Projects
In the Land-Use Entitlement Process in Florida (1)
September 30, 2004
Total Estimated
Project Project
Project County Acres Units(2)
------- ------ ----- --------
Cutter Ridge Franklin 30 90
Port St. Joe Millsite (3) Gulf 126 625
RiverCamps on Sandy Creek Bay 6,000 600
WaterSound future phases Walton 900+ 573
WaveCrest Bay 6 88
St. James Island (4) Franklin 9,436 3,593
West Bay DSAP (5) Bay 6,789 5,842
----- -----
Total 23,287+ 11,411
======= ======
(1) All developments listed are in the preliminary planning
process and have significant entitlement steps remaining that could
affect timing, scale and viability. There can be no assurance that
these entitlements will ultimately be received.
(2) The actual number of units to be constructed at full build-out
may be lower than the number ultimately entitled.
(3) JOE owns 50 percent of a joint venture that owns the Port St.
Joe Millsite.
(4) As shown on the proposed Franklin County St. James Island
Future Land Use Map Amendments.
(5) See description of the WestBay DSAP below.
West Bay Sector
As part of the entitlements process, the West Bay Sector is a
blueprint for future development and conservation of approximately
75,000 acres of JOE-owned land in northwestern Bay County. The West
Bay Sector includes the West Bay Detailed Specific Area Plan (West Bay
DSAP), a 16,556-acre land-use planning area, and a proposed 4,000-acre
site for the relocation of the Panama City - Bay County International
Airport. These two land plans begin the implementation of the West Bay
Sector.
In the third quarter, the company entered into a settlement
agreement that ended the legal challenge to the entitlements
establishing the land use for the relocation of the airport and the
West Bay DSAP. In addition, in September, the Florida Supreme Court
refused to hear an appeal from airport relocation opponents seeking a
referendum in the City of Panama City.
At full build-out, the West Bay DSAP provides for approximately
4.4 million square feet of industrial, commercial and retail space,
5,842 residential units on 6,789 acres, 490 hotel rooms and two
marinas. A portion of the West Bay DSAP entitlements are conditioned
on the final approvals of the relocated airport.
A draft of the Federal Aviation Administration's Environmental
Impact Study, which reviews the planning options for the airport, is
expected to be publicly released by the end of the year. Many
regulatory steps remain before a final decision is reached on the
relocation of the airport. The relocation of the airport is also
dependent on adequate funding.
JOE's Residential Pipeline
JOE's pipeline of residential projects extends well into the
future with nearly 30,000 units entitled or in various stages of
the land-use entitlement process in a variety of markets across
Florida.
"JOE owns enough high-quality developable land to create value for
decades," said Rummell. "JOE's challenge is to identify the next
generation of projects that will continue to drive the region's value
creation cycle forward. We invest significant resources to study our
land holdings and understand their development potential. We are
focused on positioning ourselves to create shareholder value for a
long time to come."
SEGMENT RESULTS
ST. JOE TOWNS & RESORTS
Pretax income from continuing operations for St. Joe Towns &
Resorts, JOE's community development segment, was $31.8 million for
the third quarter of 2004, compared with $32.1 million in the third
quarter of 2003.
In the third quarter of 2004, St. Joe Towns & Resorts sold 471
units and generated revenues from housing and home sites of $153.5
million, compared to 528 units and $133.1 million in revenue in the
third quarter last year. Both periods included revenue recognized
under the percentage-of-completion method. JOE accepted contracts for
550 units in the third quarter of 2004, compared to 587 units in the
third quarter a year ago.
"St. Joe Towns & Resorts turned in a solid third quarter despite
the unusually intense hurricane season," said Rummell. "We see
continuing strength in our Florida residential and resort markets.
"Our most recent release at WaterColor is evidence that pricing
and sales velocity continue to move forward in Northwest Florida,"
said Rummell. "One week after Hurricane Ivan passed through the
region, JOE accepted reservations for 12 interior home sites in
WaterColor's third phase. Prices ranged from $700,000 to $745,000.
Demand for the lots was strong, with 41 potential buyers submitting
$10,000 deposits for the WaterColor release."
Gross profit amounts on home sites were lower in the third quarter
of 2004, compared to the same quarter a year ago, primarily due to a
reduction in the number of home-site closings. Gross profit amounts on
homes were significantly higher in 2004's third quarter compared to
the third quarter a year ago. During the third quarter this year,
there was more contribution from condominiums built and contracted at
WaterSound Beach as a result of the percentage-of-completion
accounting method. Contribution from WaterSound Beach condominiums in
2004's third quarter was $10.2 million, compared to $3.5 million in
the same period last year.
A 60-day moratorium on permits issued by the Florida Department of
Environmental Protection (FDEP) in areas affected by Hurricane Ivan is
set to expire near the middle of November. The moratorium has slowed
our project permitting activity. Logistical issues with building
materials and services are already showing signs of abating. "The
cumulative effect could delay construction starts for some JOE
projects, but we believe not enough to impact sales," said Rummell.
Tables 4 and 5 summarize sales activity for St. Joe Towns &
Resorts for the third quarter of 2004 compared to the same period in
2003.
Table 4
St. Joe Towns & Resorts
Sales Activity
($ in millions)
For the Three Months
Ended September 30,
2004 2003
--------------------------- -------------------------
Number of Number of
Units Gross Units Gross
Closed Revenue Profit Closed Revenue Profit
------ ------- ------ ------ ------- ------
Home Sites 95 $25.6 $18.6 215 $52.5 $32.1
Homes (1) 376 127.9 24.6 313 80.6 11.8
--- ----- ---- --- ---- ----
Total 471 $153.5 $43.2 528 $133.1 $43.9
=== ===== ==== === ===== ====
(1) Homes include single family, multi-family and Private Resident
Club (PRC) units. Multi-family and PRC revenue is recognized, if
preconditions are met, on a percentage of completion basis. As a
consequence, revenue recognition and closings may occur in different
periods. Paseos and Rivercrest, two joint ventures, are not included.
Table 5
Units Placed Under Contract
For the Three Months
Ended September 30,
2004 2003 Percentage Change
---- ---- -----------------
Home Sites 87 204 (57.4)%
Homes (1) 463 383 20.9%
---- ---- -----------------
Total 550 587 (6.3)%
==== ==== =================
(1) Homes include single family homes, multi-family and PRC units.
Paseos and Rivercrest, two joint ventures, are not included.
Table 6 summarizes backlog at September 30, 2004 compared to the
same period in 2003.
Table 6
Backlog (1)
September 30,
($ in millions)
Units Revenue
----- -------
2004 2003 2004 2003
---- ---- ---- ----
Home Sites 20 83 $1.8 $21.5
Homes 1,104 769 369.5 258.1
----- --- ----- -----
Total 1,124 852 $371.3 $279.6
===== === ===== =====
(1) Backlog represents units under contract but not yet closed.
Paseos and Rivercrest, two joint ventures, are not included.
Northwest Florida
WaterColor
WaterColor is JOE's signature beachfront community in Walton
County. Sales began in 2000.
WaterColor sales were strong in the third quarter with phase three
pricing showing significant improvement. Meanwhile, development
started in the third quarter on WaterColor's phase four, a 60-acre
parcel on the east side of County Road 395 adjacent to WaterColor
Crossing with approximately 185 units.
"Hurricane Ivan caused some beach erosion and minor landscaping
damage at WaterColor and left debris along the beachfront of
WaterSound Beach," said Rummell. "Clean up efforts are proceeding
quickly and we are rebuilding and restoring the dunes. We lost some
business at the WaterColor Inn due to evacuations, but we think we may
pick up some additional business over the next month or so as the
harder hit beaches to the west of us recover."
WaterColor Private Residence Club
The WaterColor Private Residence Club (PRC) is a fractional
ownership property adjacent to the WaterColor Inn.
JOE has accepted reservations for all 88 ownership interests of
the PRC. The interests in 11 two-bedroom, two-bath, fully furnished
luxury, vacation multi-family units, were offered at $190,000 in
fourth quarter of 2003 and increased to $220,000 in the third quarter
this year. A contract was accepted for the final unit earlier this
month. The completion of the PRC building and initial closings are
scheduled later in the fourth quarter this year.
WaterSound Beach
WaterSound Beach is set on over a mile of white sand beach four
miles east of WaterColor in Walton County. Sales began in 2001.
In the third quarter, most of the sales activity at WaterSound
Beach centered on Compass Point, a 92-unit neighborhood of
multi-family residences. Construction of the initial 49 units began
earlier this year. The first phase is comprised of 25 units. Contracts
on 7 units were accepted in the first quarter at an average price of
approximately $1.5 million. Contracts on the remaining 18 units were
accepted in the second and third quarters at an average price of
approximately $1.6 million. In the third quarter, the next phase of 24
residences, generally smaller in size, was released and contracts were
accepted on all units at an average price of $1.4 million. The
remaining 43 units in Compass Point are scheduled for sales release in
2005 and 2006.
"The recently concluded Southern Accents Showhouse program at
WaterSound Beach was very successful, attracting approximately 16,000
visitors," said Rummell. "Tours ended Labor Day weekend and the
Showhouse is now under contract for $5.1 million, with a November 2004
closing scheduled."
WaterSound
During the third quarter, initial infrastructure construction
continued at WaterSound, a resort community 3 miles from WaterSound
Beach. WaterSound is set between U.S. 98 and the Intracoastal Waterway
in Walton County. Sales are expected to begin in 2006.
WaterSound West Beach
WaterSound West Beach is approximately one mile west of WaterSound
Beach on the beach side of County Road 30A, with beach access through
the adjacent Deer Lake State Park.
A number of additional environmental regulatory steps remain
before construction can begin. West Beach is being designed to be a
gated, high-end community with pricing expected to be comparable to
WaterSound Beach. Construction and sales are expected to begin in
2005.
Palmetto Trace, The Hammocks, Hawks Landing
Palmetto Trace, The Hammocks and Hawks Landing are primary home
communities designed to provide a range of housing options in Bay
County. Home sites start in the high $40,000's and residences start in
the low $100,000's.
"Sales at Palmetto Trace and The Hammocks were very strong in the
third quarter," said Rummell. "After Hurricane Ivan, JOE released 14
homes on September 28, 2004. Contracts were accepted on each of the
units from a pool of 81 prospective buyers at an average price of more
than $250,000.
"The demand for new homes in Bay County is increasing as jobs are
added to the Northwest Florida economy," said Rummell. "That is a
trend we expect to continue, particularly in Panama City Beach.
Planning also continues on Hawks Landing, a new primary residential
community in eastern Bay County that is intended to provide much
needed housing stock in that part of the county."
WindMark Beach
WindMark Beach is a mixed-use development on approximately 2,080
acres in Gulf County, Florida. Only 6 of the 110 home sites in the
first 80-acre phase remain unsold or not under contract, none of which
have been released for sale. Sales in the new phases of WindMark Beach
are scheduled to begin in late 2005.
During the third quarter, land-use approvals were finalized for
WindMark Beach. Pending the receipt of environmental permits, JOE
expects to begin work simultaneously on the relocation of U.S. 98, the
WindMark Beach town center, and the initial portion of the 3.5-mile
public beachfront trail system.
SouthWood
Sales continued at a good pace at SouthWood. Contracts were
accepted for 70 units in the third quarter, compared to 49 units in
the third quarter last year. Planning for SouthWood's phase two
continues. A more detailed land plan is under preparation and is being
designed to optimize the remaining land within the community.
SummerCamp
On July 9, 2004, JOE accepted reservations for SummerCamp's third
release that attracted 296 potential buyers for 12 home sites with an
average price of $407,000, compared to $386,000 for 40 home sites in
the first release in April of 2004. Pending the receipt of regulatory
and environmental permits, closing of these home sites are expected to
start in the first quarter of 2005.
SummerCamp is located in Franklin County, approximately 45 miles
south of Tallahassee on the Gulf Coast, with nearly 4 miles of
waterfront.
Northeast Florida
RiverTown
RiverTown is being planned to be a new Southern town in St. Johns
County set along more than 3.5 miles of frontage on the beautiful St.
Johns River. Land use entitlements for RiverTown were finalized in the
third quarter and environmental permits are pending. Infrastructure
development is expected to begin in 2005 and sales in 2006.
St. Johns Golf & Country Club
St. Johns Golf & County Club is a primary residential community
located in St. Johns County, Florida.
Despite the weather, demand for homes in St. Johns Golf & Country
Club remained strong. JOE accepted contracts in the third quarter for
31 homes at an average price of $397,300, compared to 27 homes at an
average price of $323,200 in the third quarter a year ago. Two
hurricanes affected St. Johns Golf & Country Club in the third quarter
and caused disruptions in home construction and sales operations.
Construction continued in the third quarter on infrastructure for
the community's final phases. Sales in this community are expected to
conclude by the middle of 2006.
Central Florida
Victoria Park
JOE accepted 77 contracts in Victoria Park in the third quarter of
2004, up 38 percent over the same quarter a year ago. In the first
nine months of the year, 219 contracts were accepted compared to 168
in the same period last year, an increase of 30 percent.
"Of all JOE developments, Victoria Park endured the most
weather-related challenges during the third quarter with three of the
four hurricanes hitting the Orlando area," said Rummell. "Despite the
fact that more than 50 inches of rain fell in six weeks, an amount
equal to the annual rainfall, the community sustained no significant
damage. Not surprisingly, traffic was down in the sales center during
September. We expect all existing contracts to close, though there may
be minor delays."
Victoria Park, located between Orlando and Daytona Beach, sits on
1,859 acres in the historic college town of DeLand. This mixed-used
community is planned for approximately 4,000 residences built among
parks, lakes and conservation areas. Sales began in 2001 and are
expected to continue through 2012.
Saussy Burbank
Saussy Burbank, JOE's homebuilder based in Charlotte, N.C., had
$1.2 million pretax income from continuing operations in the third
quarter, compared to breaking even in the third quarter of 2003.
Sales at Saussy Burbank communities continue to be strong. In the
first nine months of this year, 575 homes were closed and 569
contracts were accepted, compared to 382 closings and 442 contracts in
the same period a year ago.
Joint Venture Communities
Celebration, Artisan Park
Artisan Park is one of the last residential neighborhoods to be
developed at Disney's Celebration in Orlando. JOE owns 74 percent of
the joint venture developing Artisan Park and manages the project.
JOE accepted contracts for 54 condominiums in Artisan Park in the
third quarter at an average price of $340,600. There were no
condominium sales in the same period last year. During the quarter JOE
accepted contracts for 10 homes at an average price of $589,300,
compared to 13 homes at an average price of $439,000 in last year's
third quarter.
"Artisan Park is performing very well with sales running ahead of
our expectations," said Rummell. "We are seeing strong demand at the
community for both single-family homes and condominiums."
Rivercrest and Paseos
Rivercrest is a primary residential community located just outside
of Tampa, Florida. "We are seeing robust sales at Rivercrest," said
Rummell. JOE accepted contracts for 205 homes at Rivercrest at an
average price of $175,000 in the third quarter this year, compared to
69 homes at an average price of $143,300 in the third quarter last
year.
Paseos is a primary residential community in Jupiter, Florida.
"Paseos had an excellent third quarter with stronger pricing," said
Rummell. "Contracts accepted in the first nine months of the year have
exceeded the original objective for the entire year. The Jupiter
market has attracted national attention as one of South Florida's most
desirable places to live." JOE accepted contracts for 35 homes at an
average price of $507,000, compared to 32 homes at an average price of
$398,000 in last year's third quarter.
JOE owns 50 percent of the joint ventures developing Rivercrest
and Paseos and manages each of the projects.
Table 7 summarizes the sales activity at various residential
communities for the third quarters of 2004 and 2003.
Table 7
St. Joe Towns & Resorts
Homes and Home Sites
For the Three Months Ended September 30,
($ in thousands)
2004 2003
- -------------------------------------- -------------------------------
Units Avg. Contracts Avg. Units Avg. Contracts Avg.
Closed Price Accepted Price Closed Price Accepted Price
(1) (1)
------ ----- --------- ----- ------ ----- --------- -----
WaterColor
Home Sites 28 $687.6 21 $718.6 115 $241.0 134 $276.0
Single
Family
Homes 1 917.6 4 995.6 13 650.9 8 807.0
PRC
Shares -- -- 34 220.1 -- -- -- --
WaterSound Beach
Home Sites -- -- -- -- 46 375.8 37 362.8
Single
Family
Homes -- -- 1 5,100.0 -- -- -- --
Multi
Family
Homes -- -- 25 1,405.5 -- -- 1 1,225.0
Palmetto Trace/The Hammocks
Home Sites 28 38.6 28 38.6 1 29.0 -- --
Single
Family
Homes 41 139.0 22 165.5 35 149.8 66 152.2
WindMark Beach
Home Sites 1 975.0 1 975.0 7 536.4 2 587.5
SouthWood
Home Sites 19 102.1 23 100.8 20 90.9 13 93.5
Single
Family
Homes 35 223.0 47 267.0 45 194.3 36 227.4
St. Johns G & CC
Home Sites 4 118.0 -- -- 8 47.8 -- --
Single
Family
Homes 26 346.8 31 397.3 36 327.1 27 323.2
Hampton Park/James Island
Single
Family
Homes 14 387.3 9 397.8 25 349.3 24 334.0
Victoria Park
Home Sites 11 85.4 10 65.7 13 70.7 13 69.5
Single
Family
Homes 42 227.6 67 243.6 28 206.7 43 224.9
Artisan Park (2)
Home Sites 4 225.0 9 225.0 5 122.2 5 122.2
Single
Family
Homes 9 427.8 10 589.3 -- -- 13 439.0
Multi
Family
Homes -- -- 54 340.6 -- -- -- --
Paseos (2)
Single
Family
Homes 19 405.9 35 507.0 -- -- 32 398.0
Rivercrest (2)
Single
Family
Homes 57 150.6 205 175.0 41 139.1 69 143.3
Saussy Burbank
Single
Family
Homes 208 231.9 159 232.2 131 207.3 165 205.9
(1) Contracts accepted but not closed.
(2) JOE holds 74 percent of Artisan Park and 50 percent each of
Paseos and Rivercrest. Sales from Paseos and Rivercrest are not
consolidated with the financial results of St. Joe Towns & Resorts.
Table 8 summarizes the units sold from project inception through
September 30, 2004 at various St. Joe Towns & Resorts residential
projects.
Table 8
St. Joe Towns & Resorts
Units Sold Since Project Inception (1)
Through September 30, 2004
Maximum Closed Contracts
Units Units Accepted(2)
------- ------ -----------
WaterColor 1,140 775 24
WaterSound Beach 499 310 51
Palmetto Trace/ The Hammocks 982 492 151
WindMark Beach 1,662 104 0
SouthWood 4,770 627 158
SummerCamp 499 0 0
St. Johns Golf & Country Club 799 530 86
Hampton Park/ James Island 523 496 22
Victoria Park 4,000 424 154
Artisan Park (3) 616 48 228
Paseos (3) 325 89 226
Rivercrest (3) 1,300 431 471
----- --- ---
Total 17,115 4,326 1,571
====== ===== =====
(1) Units include home sites, single family and multi-family units
and Private Resident Club shares, with each share treated as
one-eighth of a unit.
(2) Contracts accepted, but not closed, to date, at the end of the
quarter.
(3) Artisan Park is 74 percent owned by JOE. Paseos and Rivercrest
are each 50 percent owned by JOE; their sales are not consolidated
with the financial results of St. Joe Towns & Resorts.
COMMERCIAL REAL ESTATE
The commercial segment consists of St. Joe Commercial, Inc., JOE's
commercial real estate development unit, and Advantis, the company's
commercial real estate services unit. Pretax income from continuing
operations from the commercial segment was $2.9 million for the third
quarter of 2004, compared with a loss of $(1.5) million in the same
quarter of 2003. Pretax income from discontinued operations, resulting
from the sale of two operating buildings, was $7.7 million for the
third quarter of 2004, compared to $0.3 million for the third quarter
of 2003.
St. Joe Commercial
For the third quarter of 2004, St. Joe Commercial had pretax
income of $3.2 million, compared to a loss of $(0.9) million in the
third quarter a year ago.
"Our commercial development division turned in a very strong third
quarter," said Twomey. "Gross proceeds from Northwest Florida
commercial land sales totaled $3.9 million, compared to $0.9 million
in the same period in 2003."
During the third quarter, JOE sold 10 Northwest Florida commercial
land parcels, totaling 100 acres, at an average price of approximately
$39,000 per acre. Pricing reflects variations in location, parcel
quality and the percentage of each parcel that may be developable.
"We are particularly pleased that sales activity for retail
properties in Northwest Florida has increased in the last nine
months," said Twomey. "The Simon Property Group's interest in Pier
Park has caused other national commercial and retail developers to
take notice."
Table 9 summarizes JOE's commercial land sales in Northwest
Florida for the third quarters of 2004 and 2003.
Table 9
St. Joe Commercial Northwest Florida Land Sales
Number Acres Gross Sales Average
of Sold Price Price/Acre
Land Sales (in thousands) (in thousands)
---- ----- ---- -------------- --------------
Quarter Ended September 30, 2004
Unimproved 4 81 $1,892 $23
Improved 6 19 1,966 103
- -- ----- ---
Total/Average 10 100 $3,858 $39
== === ====== ===
Quarter Ended September 30, 2003
Unimproved 3 9 $161 $18
Improved 5 15 755 50
- -- --- --
Total/Average 8 24 $916 $38
= == === ==
"We are also seeing increased interest from national and regional
multi-family developers," said Twomey. "Part of that is being driven
by job growth in Northwest Florida and increasing demand for
multi-family units. As a result, the value of land for apartment
development is moving closer to comparable prices in other parts of
the nation.
"Multi-family products are become increasingly important to this
region," said Twomey. "They provide an important housing option to
citizens in this region. The expansion of a full range of housing
options is vitally important to keep the Northwest Florida economy
growing."
JOE has 5 parcels for multi-family development under contract
totaling 74 acres at an average price of approximately $97,000 per
acre.
Northwest Florida
Beckrich
The Home Depot, located on a 13-acre parcel, opened its new store
at Beckrich 10 days earlier than planned to meet the hurricane needs
of local residents. In the third quarter, an out parcel near The Home
Depot was sold for $0.7 million, or $565,000 per acre. Three
additional out parcels are under contract for closings later this year
or early in 2005.
In September, Sacred Heart Health System took occupancy of 8,200
square feet in Beckrich Two, a 33,400 square foot office building
completed by JOE earlier this year and now approximately 50 percent
leased.
Pier Park
Simon Property Group, Inc. and JOE have agreed to the sale of 90
acres to Simon within and near Pier Park for a retail, restaurant and
entertainment project. Although additional due diligence, planning and
other steps remain to be completed, this transaction is scheduled to
close before the end of the year.
Under the terms of the agreement, Simon also has the right to
purchase an additional 114 acres in or near Pier Park. JOE will retain
approximately 15 acres in Pier Park near the beach for future
complementary hospitality development.
SouthWood Commercial
Sales at the Business Park at SouthWood continue to be robust with
one parcel sold in the third quarter of 2004 at an average price of
$213,000 per acre. Of the remaining 5 parcels, 3 are under contract
for an average price of $321,000 per acre.
Construction continued in the third quarter on two buildings in
SouthWood Town Center totaling approximately 37,000 square feet of
commercial space. The Tallahassee YMCA will be an early tenant
featuring an upscale full-service health and fitness center. The
buildings were designed to accommodate restaurants and other retail
users. Office space ranging from 900 to 2,000 square feet will also be
available.
Commerce Parks
During the third quarter, commercial land sales within JOE's
commerce parks totaled $1.1 million, compared to $0.8 million in the
third quarter a year ago. JOE has 11 commerce parks operating or under
development in six Northwest Florida counties.
Our newest commerce park, South Walton Commerce Park, opened in
the third quarter, with prices ranging from $150,000 to $435,000 per
acre. Five parcels under contract with prices ranging from $161,000 to
$308,000 per acre are scheduled to close in the fourth quarter.
Table 10 summarizes the status of JOE's commerce parks throughout
Northwest Florida as of September 30, 2004.
Table 10
Commerce Parks
September 30, 2004
Acres
Net Sold/
Saleable Under Current Asking
Commerce Parks County Acres Contract Price Per Acre
-------------- ------ -------- -------- --------------
Existing and Under
Construction
Beach Commerce Bay 161 100 $65,000-435,000
Port St. Joe Commerce Gulf 58 51 50,000-60,000
Airport Commerce Leon 40 -- 75,000-260,000
Nautilus Court Bay 12 2 300,000-375,000
Hammock Creek Commerce Gadsden 114 27 40,000-150,000
South Walton Commerce Walton 39 8 150,000-435,000
Beach Commerce II Bay 115 -- 70,000-80,000
Port St. Joe Commerce II Gulf 40 -- 50,000-90,000
Predevelopment
Cedar Grove Commerce Bay 100 -- 40,000-50,000
Apalachicola Commerce Franklin 50 -- 30,000-40,000
Mill Creek Commerce Bay 40 -- 35,000-45,000
-- ----
Total 769 188
=== ===
Investment Property Portfolio
JOE has redeployed some of the proceeds of its land sales in a
tax-deferred manner through the acquisition of commercial office
buildings in select markets within the Southeast. In the third
quarter, JOE sold a building from this portfolio in Washington, DC for
a pretax gain of $7.5 million.
As of September 30, 2004, JOE's portfolio of commercial office
buildings acquired through the capital redeployment program totaled
approximately 2.4 million square feet and represented an aggregate
investment of $309 million, compared to 1.8 million square feet and an
aggregate investment of $251 million at September 30, 2003.
Table 11 summarizes JOE's investment property portfolio as of
September 30, 2004.
Table 11
Investment Property Portfolio
September 30, 2004
Number of Net Rentable Leased
Location Properties Square Feet Percentage
- -------- ---------- ------------ ----------
Florida
Tampa 5 489,000 81%
Orlando 2 317,000 69%
Jacksonville 1 136,000 57%
Northwest Florida 3 156,000 83%
Atlanta 5 865,000 88%
Washington, D.C. 1 119,000 99%
Charlotte 1 158,000 100%
Richmond 2 129,000 99%
- ------- --
Total/Weighted
Average 20 2,369,000 84%
== ========= ==
Development Properties
During the third quarter, JOE sold commercial parcels in Texas,
Orlando and South Florida for total gross proceeds of $17.5 million.
Our current inventory of commercial land includes 76 acres in Houston,
Atlanta, Northern Virginia and Orlando.
Table 12 summarizes the development property portfolio as of
September 30, 2004.
Table 12
Development Property Portfolio
September 30, 2004
Net
Rentable
Market Ownership Square Leased
Property Location Percentage Feet Percentage
-------- -------- ---------- ---- ----------
TNT Logistics Jacksonville 100% 99,000 94%
Deerfield Commons I Atlanta 40% 122,000 77%
Nextel Partners II Panama City
Beach 100% 30,000 100%
------ ----
Total/Weighted Average 251,000 86%
======= ====
"We expect to close the sale of the TNT Logistics Building in the
fourth quarter of 2004," said Twomey.
Advantis
Pretax income in the third quarter of 2004 was breakeven before
elimination of inter-company profits of $0.3 million. Advantis had a
pretax loss of $(0.2) million for the third quarter of 2003, before
elimination of inter-company profits of $0.4 million.
"For the remainder of 2004 and 2005, we are looking at a strong
pipeline of business," said Twomey. "We are pleased with the
foundation Advantis has built for this year. It should serve us well
into the future."
ST. JOE LAND COMPANY
JOE's land sales division had pretax income from continuing
operations of $11.6 million in the third quarter of 2004, compared
with $14.8 million in the third quarter of 2003. There were
conservation land sales in the third quarter of 2004 of $0.2 million,
compared with $3.9 million in the third quarter of 2003.
"JOE's land division had a very good third quarter and continued
making progress attracting buyers from a broader geographic area, as
well as accelerating its product segmentation strategy," said Twomey.
"Transactions in the third quarter continue to be well balanced by
land type and location."
In the third quarter, JOE sold 2,822 acres of land for an average
of $5,032 per acre, compared to 9,051 acres in the same quarter a year
ago for an average of $1,667 per acre.
One large parcel that sold in the third quarter consisted of
approximately 323 acres at a purchase price of $8.7 million, or
$27,000 per acre. This parcel was sold without entitlements or
infrastructure for utilities and other services. Approximately 25
percent of the parcel is within wetlands. A second phase of this
transaction, consisting of approximately 350 acres, is scheduled to
close in the fourth quarter of this year at a purchase price of $8.7
million, or $25,000 per acre. The two parcels have approximately
20,000 feet of frontage of varying quality on North Bay in Bay County.
There was one conservation land sale in the third quarter. A
49.6-acre parcel was sold to the City of East Point in Franklin County
for $5,000 per acre. Discussions are ongoing with various conservation
groups and government agencies on the possible sale of additional
conservation tracts consisting of several thousand acres.
Table 13 summarizes the land division's sales activity for the
third quarters of 2004 and 2003.
Table 13
Land Division Sales (1)
Quarter Ended September 30,
Average Gross
Number Number Price Sales Gross
of of Per Price Profit
Period Sales Acres Acre (in millions) (in millions)
- ------ ----- ----- ---- ------------- -------------
2004 35 2,822 $5,032 $14.2 $13.2
2003 43 9,051 $1,667 $15.1 $12.7
(1) Does not include RiverCamps or conservation land sales.
"An increasing number of prospective buyers are coming from
outside our traditional two-hour drive market," said Twomey. "We hope
to be able to build on this trend with the recent launch of an updated
web site (www.stjoeland.com) designed to help prospective customers
find the land they are looking for in Northwest Florida."
RiverCamps
RiverCamps are planned settlements in rustic settings, offering
personal retreats in private woodland preserves. As of March 31, 2004,
approximately 15,000 acres have been classified by the company for
RiverCamps use. RiverCamps home sites are sold fee-simple, with a
common area preserved for conservation. At JOE's first RiverCamps
location, many home sites are almost one acre. Home sites could be
larger at future locations.
RiverCamps on Crooked Creek
During the third quarter, 542 prospective buyers from 14 states
and the District of Columbia submitted reservations for the second
release of 27 home sites at RiverCamps on Crooked Creek. A deposit of
$7,500 was required for each reservation request.
Prices for 26 of the 27 home sites ranged from $129,000 to
$350,000 and averaged $205,000. The remaining home site is located on
West Bay and was priced at $750,000.
Early in the fourth quarter, 15 additional home sites were offered
to this pool of prospective buyers. The average price for these
additional home sites was $228,700. Closings on home sites reserved in
these releases are expected to be completed by the end of the year.
In comparison, the first release of home sites at RiverCamps on
Crooked Creek in October of 2003 attracted 314 potential buyers at an
average price of $150,000.
During the third quarter, a 2004 Southern Living Idea House built
at RiverCamps on Crooked Creek was featured on the magazine's cover in
August. Approximately 15,000 people visited the Idea House at
RiverCamps on Crooked Creek this summer.
RiverCamps on Crooked Creek, located in western Bay County,
Florida, is planned for up to 450 home sites on approximately 1,500
acres of former timberland and features views of West Bay, the
Intracoastal Waterway and Crooked Creek.
RiverCamps on Sandy Creek
Preliminary planning and evaluation continues on RiverCamps on
Sandy Creek in Bay County. Plans initially call for approximately 600
units on approximately 6,000 acres. Work also continues on other
potential RiverCamps locations in Northwest Florida.
FORESTRY
Pretax income from continuing operations for the forestry segment
totaled $1.9 million for the third quarter of 2004, compared with $1.7
million in the comparable 2003 period.
FINANCIAL DATA
Other Income (Expense)
Other income (expense), which includes dividend and interest
income, gains (losses) on sales of investments and non-operating
assets and miscellaneous income, and interest expense, was an expense
of $2.5 million in the third quarter of 2004, compared to expense of
$1.9 million in the comparable 2003 period.
Table 14 summarizes other income (expense) for the third quarters
of 2004 and 2003.
Table 14
Other Income (Expense)
(in millions)
Quarter Ended September 30,
------------------------------
2004 2003
---- ----
Dividend and interest income $0.3 $0.2
Interest expense (3.5) (2.6)
Other 0.7 0.5
--- ---
Total $(2.5) $(1.9)
====== ======
EBITDA
Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the third quarter of 2004 were $57.8 million, or $0.75
per share, compared to $49.6 million, or $0.64 per share, in the third
quarter of 2003.
Table 15 provides a reconciliation of net income to EBITDA for the
third quarters of 2004 and 2003.
Table 15
Reconciliation of Net Income to EBITDA
($ in millions except per share amounts)
Quarter Ended
September 30,
----------------------
2004 2003
----- -----
Net Income $26.3 $23.0
Plus:
Income tax expense 16.6 13.7
Depreciation and amortization 9.1 7.3
Interest expense 5.8 5.6
----- -----
EBITDA $57.8 $49.6
===== =====
EBITDA per diluted share $0.75 $0.64
===== =====
Weighted average diluted shares outstanding 76,570,836 77,894,096
We use EBITDA as a supplemental performance measure, along with
net income, to report our operating results. Management believes
EBITDA is an important metric commonly used by companies in the real
estate industry for comparative performance purposes. EBITDA is not a
measure of operating results or cash flows from operating activities
as defined by generally accepted accounting principles (GAAP).
Additionally, EBITDA is not necessarily indicative of cash available
to fund cash needs and should not be considered as an alternative to
cash flows as a measure of liquidity. However, we believe that EBITDA
provides relevant information about our operations and, along with net
income, is useful in understanding our operating results.
EBITDA includes conservation land EBITDA of $0.1 million in 2004
and $3.9 million in 2003.
Table 16
Summary Balance Sheet
(in millions)
September 30, September 30,
2004 2003
------------- -------------
Assets
Investment in real estate $907.0 $862.9
Cash and cash equivalents 95.6 63.5
Prepaid pension asset 95.2 93.9
Property, plant and equipment 34.8 37.2
Other assets 213.9 189.5
----- -----
Total assets $1,346.5 $1,247.0
======== ========
Liabilities and Stockholders' Equity
Debt $400.3 $369.0
Accounts payable, accrued liabilities 194.5 179.5
Deferred income taxes 254.4 221.2
----- -----
Total liabilities 849.2 769.7
Minority interest 6.8 6.9
Total stockholders' equity 490.5 470.4
----- -----
Total liabilities and stockholders'
equity $1,346.5 $1,247.0
======== ========
Table 17
Debt Schedule
(in millions)
September 30, September 30,
2004 2003
---- ----
Revolving debt facility $-- $30.0
Medium term notes 275.0 175.0
Acquisition and other debt 15.3 4.0
Other collateralized/specific
asset related debt 110.0 160.0
----- -----
Total debt $400.3 $369.0
===== =====
Table 18
Consolidated Quarterly Comparisons
($ in millions except per share amounts)
Quarter Ended Nine Months Ended
September 30, September 30,
---------------------------------------------
2004 2003 2004 2003
---- ---- ---- ----
Revenues:
Real estate sales $189.9 $155.1 $503.2 $411.6
Realty revenues 23.9 16.8 66.8 42.6
Timber sales 7.9 8.4 26.9 28.2
Rental revenue 10.5 7.8 29.8 22.0
Other revenues 13.7 9.0 33.3 22.5
---- --- ---- ----
Total revenues 245.9 197.1 660.0 526.9
===== ===== ===== =====
Expenses:
Cost of real estate
sales 128.7 93.6 333.3 247.5
Cost of realty
revenues 16.2 9.7 42.4 23.9
Cost of timber sales 4.9 5.7 16.7 19.3
Cost of rental revenue 4.1 3.8 11.6 10.3
Cost of other revenues 11.4 8.0 27.9 20.7
Other operating
expenses 24.3 22.6 73.6 64.6
Corporate expense, net 10.6 10.0 29.2 24.7
Depreciation and
amortization 8.6 6.7 25.4 19.0
Impairment loss -- -- 2.0 14.1
----- ----- --- ----
Total expenses 208.8 160.1 562.1 444.1
----- ----- ----- -----
Operating profit 37.1 37.0 97.9 82.8
Other income (expense) (2.5) (1.9) (6.9) (5.3)
----- ---- ----- -----
Pretax income from
continuing operations 34.6 35.1 91.0 77.5
Income tax expense (13.9) (13.6) (36.1) (27.8)
Minority interest
(expense) income (0.4) -- (0.9) (0.6)
Equity in income (loss)
of unconsolidated
affiliates (1) 1.4 1.3 3.0 (2.5)
Discontinued operations,
net of tax 4.6 0.2 5.0 0.7
--- --- --- ---
Net income $26.3 $23.0 $62.0 $47.3
===== ===== ===== =====
Net income per diluted
share $0.34 $0.30 $0.81 $0.61
===== ===== ===== =====
Weighted average diluted
shares outstanding 76,570,836 77,894,096 76,999,375 77,888,981
(1) Reformatted to reflect equity in income (loss) of
unconsolidated affiliates separately from revenues. Previously the
Company recorded equity in income (loss) of unconsolidated affiliates
as a component of revenues in the Towns & Resorts segment ($(0.2)
million loss in the third quarter 2003), and commercial real estate
segment ($1.5 million in the third quarter 2003). For the third
quarter of 2004, equity in income (loss) of unconsolidated affiliates
was $1.0 million in the Towns & Resorts segment and $0.4 million in
the commercial real estate segment. Equity in income (loss) of
unconsolidated affiliates for the Towns & Resorts segment was a $(4.3)
million loss for the nine months ended September 30, 2003, and $1.8
million equity for the commercial real estate segment for the same
period. For the nine months ended September 30, 2004, equity in income
(loss) of unconsolidated affiliates was $3.1 million in the Towns &
Resorts segment and a loss of $(0.1) million in the commercial real
estate segment.
Table 19
Quarterly Revenues
By Segment (1)
(in millions)
Quarter Ended Nine Months Ended
September 30, September 30,
-------------- -----------------
2004 2003 2004 2003
---- ---- ---- ----
Towns & Resorts $167.5 $144.2 $444.2 $359.3
Commercial real estate 55.9 25.5 137.5 80.7
Land sales 14.6 19.0 51.4 58.7
Forestry 7.9 8.4 26.9 28.2
--- --- ---- ----
Total revenues $245.9 $197.1 $660.0 $526.9
====== ====== ====== ======
(1) Reformatted to reflect equity in income of unconsolidated
affiliates separately from revenues. See footnote to Table 18.
Table 20
Quarterly Segment Pretax Income
From Continuing Operations (1)
(in millions)
Sept June Mar Dec Sept June Mar Dec Sept
30, 30, 31, 31, 30, 30, 31, 31, 30,
2004 2004 2004 2003 2003 2003 2003 2002 2002
---- ---- ---- ---- ---- ---- ---- ---- ----
Towns & Resorts $31.8 $34.4 $9.1 $13.2 $32.1 $23.0 $12.4 $19.9 $18.4
Commercial real
estate 2.9 1.1 1.2 6.5 (1.5)(11.4) 2.9 4.5 (1.1)
Land sales 11.6 10.3 18.8 33.2 14.8 12.8 17.6 30.7 8.6
Forestry 1.9 2.4 2.7 2.3 1.7 2.2 1.9 2.0 1.7
Corporate and
other (13.6)(11.9)(11.5)(12.2)(12.0)(10.7) (8.1) 28.4 (11.1)
----- ----- ----- ----- ----- ----- ---- ----- ----
Pretax income
from continuing
operations $34.6 $36.3 $20.3 $43.0 $35.1 $15.9 $26.7 $85.5 $16.5
==== ===== ===== ===== ===== ===== ===== ===== =====
(1) Excludes equity in income of unconsolidated affiliates,
previously reported in operating revenues. See footnote to Table 18.
Table 21
Reconciliation of Guidance Baseline to Net Income
2003 2003
(in Per
millions) Share
--------- ---------
Reported net income $76.2 $0.98
Less conservation gains (22.7) (0.29)
Plus Advantis charge 8.8 0.11
--------- ---------
2003 Baseline $62.3 $0.80
========= =========
Conference Call Information
JOE will host an interactive conference call to review the
company's results for the quarter ended September 30, 2004 and discuss
guidance for 2004 on Wednesday, October 20, 2004, at 10:00 AM, Eastern
Time.
To participate in the call, please phone 800.762.6065 (for
domestic calls from the United States) or 480.629.9035 (for
international calls) approximately ten minutes before the scheduled
start time. Approximately three hours following the call, you may
access a replay of the call by phoning 800.475.6701 (domestic) or
320.365.3844 (international) using access code 750534. The replay will
be available for one week.
JOE will also webcast the conference call live over the internet
in a listen-only format. Listeners can participate by visiting the
company's web site at http://www.joe.com. Access will be available 15
minutes prior to the scheduled start time. A replay of the conference
call will be posted to the JOE web site approximately three hours
following the call. The replay of the call will be available for one
week.
About JOE
The St. Joe Company, a publicly held company based in
Jacksonville, is one of Florida's largest real estate operating
companies. It is engaged in town, resort, commercial and industrial
development, land sales and commercial real estate services. JOE also
has significant interests in timber.
More information about JOE can be found at our web site at
http://www.joe.com.
Forward-Looking Statements
We have made forward-looking statements in this earnings release,
particularly in the Outlook Section. The Private Securities Litigation
Reform Act of 1995 provides a safe-harbor for forward-looking
information to encourage companies to provide prospective information
about themselves without fear of litigation so long as that
information is identified as forward-looking and is accompanied by
meaningful cautionary statements identifying important factors that
could cause actual results to differ, possibly materially, from those
in the information. Any statements in this release that are not
historical facts are forward-looking statements. You can find many of
these forward-looking statements by looking for words such as
"intend", "anticipate", "believe", "estimate", "expect", "plan",
"forecast" or similar expressions. In particular, forward-looking
statements include, among others, statements about the following:
-- the size and number of residential units and commercial
buildings;
-- expected development timetables, development approvals and the
ability to obtain such approvals, including possible legal
challenges;
-- the anticipated price ranges of developments;
-- the number of units that can be supported upon full build out
of a development;
-- the number, price and timing of anticipated land sales or
acquisitions;
-- estimated land holdings for a particular use within a specific
time frame;
-- absorption rates and expected gains on land and home site
sales;
-- the pace at which we release new product for sale;
-- future operating performance, cash flows, and short and
long-term revenue and earnings growth rates;
-- comparisons to historical projects;
-- the number of shares of company stock which may be purchased
under the company's existing or future share-repurchase
program.
Forward-looking statements are not guarantees of future
performance. You are cautioned not to place undue reliance on any of
these forward-looking statements. These statements are made as of the
date hereof based on current expectations, and we undertake no
obligation to update the information contained in this release.
Forward-looking statements are subject to numerous assumptions,
risks and uncertainties. Factors that could cause actual results to
differ materially from those contemplated by a forward-looking
statement include the risk factors described in our annual report on
Form 10-K for the year ended December 31, 2003 as well as, among
others, the following:
-- economic conditions, particularly in Northwest Florida,
Florida as a whole and key areas of the southeast United
States that serve as feeder markets to the company's Northwest
Florida operations;
-- acts of war, terrorism or other geopolitical events;
-- local conditions such as an oversupply of homes and home sites
and residential or resort properties or a reduction in the
demand for real estate in an area;
-- timing and costs associated with property developments and
rentals;
-- the pace of commercial development in Northwest Florida;
-- competition from other real estate developers;
-- whether potential residents or tenants consider our properties
attractive;
-- increases in operating costs, including increases in real
estate taxes and the cost of construction materials;
-- changes in the amount or timing of federal and state income
tax liabilities resulting from either a change in our
application of tax laws, an adverse determination by a taxing
authority or court, or legislative changes to existing laws;
-- how well we manage our properties;
-- changes in interest rates and the performance of the financial
markets;
-- decreases in market rental rates for our commercial and resort
properties;
-- changes in the prices of wood products;
-- the pace of development of public infrastructure, particularly
in Northwest Florida, including a proposed new airport in Bay
County, which is dependent on approvals of the local airport
authority and the Federal Aviation Administration and the
availability of adequate funding.
-- potential liability under environmental laws or other laws or
regulations;
-- adverse changes in laws, regulations or the regulatory
environment affecting the development of real estate;
-- the availability of adequate funding from governmental
agencies and others to purchase conservation lands;
-- fluctuations in the size and number of transactions from
period to period; and
-- adverse weather conditions or natural disasters and the impact
on future demand in Florida, including whether the costs
arising from Hurricanes Charley, Frances, Ivan and Jeanne
could rise to a material level as we continue to assess the
impact of these storms.
The foregoing list is not exhaustive and should be read in
conjunction with other cautionary statements contained in our periodic
and other filings with the Securities and Exchange Commission.
Copyright 2004, The St. Joe Company. "St. Joe," "JOE," "Advantis,"
"Artisan Park," "Paseos," "Pier Park," "RiverCamps," "RiverTown,"
"SouthWood," "SummerCamp," "Victoria Park," "WaterColor,"
"WaterSound," "WindMark," and the "taking flight" design are service
marks of The St. Joe Company.
CONTACT: The St. Joe Company, Jacksonville
JOE Media Contact:
Jerry M. Ray, 904-301-4430
or
JOE Investor Contact:
Steve Swartz, 904-301-4347