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UNITED STATES
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) July 26, 2005
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The St. Joe Company
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(Exact Name of Registrant as Specified in Its Charter)
Florida 1-10466 59-0432511
- --------------------------------- ------------------------ ---------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
245 Riverside Avenue, Suite 500
Jacksonville, FL 32202
- ---------------------------------------- ------------------
(Address of Principal Executive Offices) (Zip Code)
(904) 301-4200
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[_] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On July 26, 2005, The St. Joe Company (the "Company") issued a press release
announcing the Company's financial results for the quarter ended June 30, 2005.
A copy of the press release is furnished with this Form 8-K as Exhibit 99.1.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press Release dated July 26, 2005
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: July 26, 2005 By: /s/ Michael N. Regan
---------------------------
Michael N. Regan
Senior Vice President -
Finance and Planning
Exhibit 99.1
The St. Joe Company Reports Second Quarter 2005
Net Income of $0.50 Per Share
JACKSONVILLE, Fla.--(BUSINESS WIRE)--July 26, 2005--The St. Joe
Company (NYSE:JOE):
- Net Income Per Share Increases 67 Percent Over Last Year's
Second Quarter
- JOE Raises 2005 Full-Year Guidance 2005 Earnings per Share Now
Expected to Range from $1.80 to $1.95
- JOE Residential Land-Use Entitlements in Hand or in Process
Increases to Approximately 35,000 Units
- JOE Completes New $250 Million Revolving Credit Facility;
Prices $150 Million Senior Notes
The St. Joe Company (NYSE:JOE) today announced that its Net
Income for the second quarter of 2005 was $37.9 million, or $0.50 per
share, compared with $22.7 million, or $0.30 per share, for the second
quarter of 2004. All per-share references in this release are
presented on a diluted basis.
Net Income for the first half of 2005 was $53.3 million, or $0.70
per share, compared with $35.7 million, or $0.46 per share, for the
first half of 2004.
"JOE turned in another excellent quarter," said Peter S. Rummell,
chairman and CEO of JOE. "We are very pleased with our performance
over the first half of the year. JOE business units achieved solid
performances, and JOE's Florida real estate markets continued to show
strength in pricing as well as sales velocity."
"Prices were strong with firm demand across all JOE real estate
product lines during the second quarter," said Rummell. "Traffic at
our sales centers remained high. We continue to see increasing
interest in Northwest Florida from outside our traditional feeder
markets, with an increasing number of customers coming to us from
greater distances. While re-sale supply may be increasing somewhat as
prices climb, our market is also broadening. We like our position -
and Florida's prospects - both in the short- and long-term."
"Most importantly, we continued to execute well against our
long-term strategic plan to create shareholder value," said Rummell.
"In the second quarter, our residential land-use entitlements
pipeline, consisting of entitlements in hand or in process, less units
sold or under contract, increased to almost 35,000 units. This growing
pipeline is a result of our on-going planning processes. Located
primarily in Northwest Florida, the additional units also represent a
wide range of potential products, markets and price points."
"Our new land-use entitlements represent real value in a broad
spectrum of products," said Rummell. "They reflect the ongoing success
of our land-planning process. We seek entitlements that allow JOE to
meet demand in all its forms, including resort residential, primary
residential, retail, office, industrial and new rural land products.
And we continue to think creatively and analytically about our land
and our customers in an effort to develop new products to meet needs
in as many market segments as possible."
"Our ability to gain entitlements is especially important when you
consider the potential demand driven by demographics," said Rummell.
"Last quarter we talked about the U.S. Census Bureau's strong growth
projections for Florida. To put it in perspective, the Census Bureau
projected that the population of Florida will increase by
approximately 80 percent, or 12 million people, over the next 25
years. That's the equivalent of having the population of the entire
state of Pennsylvania move to Florida."
"When you compare this potential demand with the limited supply of
developable coastal land available in Florida and the challenge of
getting entitlements in this state, you begin to understand the value
of our inventory of entitlements," said Rummell. "We believe that the
two biggest challenges facing the homebuilding industry today are the
constrained supply of developable land and the increasingly
challenging entitlements process."
"At JOE, we are in a terrific position to address and benefit from
these challenges," said Rummell. "We have an extraordinary supply of
high-quality, low-basis developable land - and we have a demonstrated
expertise in getting land entitled in Florida."
Key Projects Move Forward, Providing Foundation for Future Value
"During the second quarter, several key projects expected to
provide the foundation for future earnings reached important
milestones," said Kevin M. Twomey, JOE's president and COO. "Based on
the progress we are making, we believe we will be able to make a
smooth transition from our first-generation projects to our
second-generation projects and beyond."
"At WindMark Beach in Gulf County, after six years of work, we
received our final permit necessary to start construction last month.
The relocation of U.S. 98 is underway, as is construction of the
community's infrastructure, a 3.5-mile beach walk and town center,"
said Twomey. "Next summer, a new home at WindMark Beach will be
featured as a Southern Accents magazine Show House, raising the
community's profile and providing exposure across many of our primary
target markets. We decided to delay sales until 2006, so that pricing
can reflect the completion of the essential infrastructure.
"Last month, we received Walton County's approval for the
Development of Regional Impact (DRI) for WaterSound, a proposed
1,330-unit mixed-use development on approximately 1,402 acres owned by
JOE," said Twomey. "Even though there is an appeal period for the DRI,
infrastructure construction continues under previously received
entitlements."
"At SummerCamp, no legal challenges remain, and we expect closings
at SummerCamp before the end of the year," said Twomey.
Last quarter the state of Florida approved land-use entitlements
for 3,440 new residential units on St. James Island, located between
Apalachicola and Tallahassee," said Twomey. "While there is a legal
challenge that must be resolved before we move forward, these
entitlements represent a significant step in JOE's value-creation
efforts."
"New Ruralism" Diversifies Product Line, Adds Value to Rural Land
Holdings
"Another on-going focus for JOE has been to think creatively about
how to move our near coastal and inland land-holdings to higher and
better uses," said Rummell. "During the second quarter, JOE announced
a new real estate development philosophy called New Ruralism. Simply
stated, we believe the New Ruralism approach will help us move a
significant portion of our rural land holdings to a higher and better
use and, in turn, enhance shareholder value."
"JOE's New Ruralism products currently include RiverCamps,
WhiteFence Farms and Florida Ranches," said Rummell. "These are the
first three products in a new development channel that allows greater
market penetration and product diversification designed to appeal to a
new set of customers. Several more products are on the drawing board."
JOE's New Ruralism products share several defining
characteristics. They are large-scale, low-density projects that allow
people to live close to nature, with a sense of privacy, and enough
surrounding land to pursue outdoor recreation of their choosing. But
equally important, these products seek to make owning this type of
property more convenient and secure in an effort to attract
second-home buyers and part-time residents.
"JOE's New Ruralism product line has grown out of our experience
creating RiverCamps, and we believe it is important for at least four
reasons," said Rummell. "First, we believe it provides a turnkey,
retail-friendly product that taps an important emerging market looking
to reconnect with the land. Second, we believe the addition of a
growing rural land product line provides important diversification for
JOE real estate products. Third, we believe New Ruralism has the
potential to increase the value of a significant percentage of JOE's
rural land. Finally, it will make a more interesting development
tapestry over the next several decades - something we think about a
lot."
Hurricane Dennis Update
The landfall of Hurricane Dennis on July 10th had only a minor
impact on company operations and property. No dunes were breeched at
any JOE project, and there was no flooding of homes or businesses in
any JOE community. Beach restoration efforts have started at
WaterColor, the only JOE project to sustain significant beach erosion.
The removal of storm debris from WaterSound Beach and WindMark Beach
is also underway.
OUTLOOK
Full-Year Guidance for 2005 Raised
In April we raised guidance saying earnings per share for 2005
were expected to be in the range of $1.60 to $1.75 per share.
"Building on a solid second quarter and with an excellent pipeline of
business, we now expect earnings per share for the full-year 2005 to
exceed the range previously announced and to range from $1.80 to
$1.95," said Anthony M. Corriggio, JOE's CFO. "The increase over prior
guidance is driven largely by continued strength in our Towns &
Resorts segment, where improved pricing at our active Walton County
projects, as well as increased demand at Victoria Park, is forecasted
to exceed prior expectations. In addition, we anticipate better than
expected parcel sales activity from the Land Company, and the
Commercial division has the potential to close additional office
building sales later this year."
Towns & Resorts
"JOE's Towns & Resorts segment is expected to continue to drive
the majority of the increase in earnings for 2005 over the previous
year," said Corriggio. "We expect sustained strong performance from
WaterColor and WaterSound Beach in the second half of 2005 with better
pricing than previously anticipated. Artisan Park and Victoria Park
are expected to see a strong finish to the year, and two new projects,
WaterSound West Beach and SummerCamp, are also expected to be
important new earnings contributors in the second half of 2005.
Contracts were accepted for homes in several of our primary
residential communities with increased pricing in the second quarter.
We expect that this improvement will be reflected in our margins when
the homes are delivered and closed later this year and into 2006. Two
joint-venture projects, RiverCrest and Paseos, also are expected to
deliver substantial year-over-year earnings increases as we continue
to complete home construction and close backlogged sales."
"Our expectations for 2005 do not include sales at four major
projects we plan to bring to market in 2006: WindMark Beach,
WaterSound, RiverTown and Perico Island," said Corriggio.
Commercial Real Estate
"We also anticipate a strong performance from our Commercial
segment in the last half of the year," said Corriggio. "This segment's
2005 results should be significantly higher than 2004 due to increased
earnings from the sales of commercial property and retail and
multifamily land parcels in Northwest Florida, Atlanta and Houston.
Within Northwest Florida, increased population and economic growth are
generating greater demand for our retail and multifamily products,
which we expect will be reflected in several sales scheduled to close
in the third and fourth quarters. We also expect the sales of
potentially three or four commercial buildings from our Investment
Property Portfolio to close this year."
St. Joe Land Company
"St. Joe Land Company is expected to deliver higher pretax income
for the full year of 2005 as compared with 2004, driven by a
significant increase in earnings from the RiverCamps product line,"
said Corriggio. "The second half of 2005 should see RiverCamps at
Crooked Creek delivering meaningful income from prior releases, with
additional units released for sale in the third and fourth quarters.
We also expect solid performance from individual land parcel sales
activity and have revised our earnings expectations from these
activities upward from our previous forecast in April."
CREDIT FACILITY AND SENIOR NOTES
On July 22nd, JOE closed on a new four-year, $250 million
revolving credit facility that replaced a $250 million facility that
was to expire on March 30, 2006. The new facility provides more
favorable terms and interest rates than the previous facility.
On July 25th, JOE priced $150 million of senior notes that will be
issued in a private placement. JOE will issue $65 million of 10-year
notes with a fixed-rate coupon of 5.28 percent, $65 million of 12-year
notes with a fixed-rate coupon of 5.38 percent and $20 million of
15-year notes with a fixed-rate coupon of 5.49 percent. These notes
will provide long-term financing at very attractive rates, the
proceeds of which will be used for development and construction of new
projects, to reduce revolving debt and for general corporate purposes.
The notes offering is expected to close in August 2005.
DIVIDENDS AND STOCK REPURCHASE PROGRAM
A quarterly cash dividend of $0.14 per share of common stock was
paid on June 30th to shareholders of record at the close of business
on June 15, 2005.
During the second quarter of 2005, the company expended an
aggregate of $41.2 million for dividends and the acquisition of its
shares. JOE acquired 404,900 of its shares at a cost of $30.6 million,
an average price of $75.53 per share, during the second quarter.
Table 1 summarizes the company's stock repurchase activity from
1998 through June 30, 2005.
Table 1
Stock Repurchase Activity
Through June 30, 2005
Shares
-----------------------------------
Total Cost Average
Period Purchased Surrendered(1) Total (in 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 3,517,066 -- 3,517,066 80.2 22.78
2001 7,071,300 58,550 7,129,850 176.0 24.67
2002 5,169,906 256,729 5,426,635 157.6 29.03
2003 2,555,174 812,802 3,367,976 102.9 30.55
2004 1,561,565 884,633 2,446,198 105.0 42.90
2005 576,100 61,203 637,303 47.2 74.09
------- ------ ------- ---- -----
Total/
Weighted
Average 25,868,511 2,097,697 27,966,208 $794.1 $28.37
========== ========= ========== ====== ======
(1) Shares surrendered by company executives as payment for the
strike price and taxes due on exercised stock options or taxes due on
the vesting of restricted stock.
On June 30th, 75,768,141 JOE shares were outstanding. The number
of weighted-average diluted shares in the second quarter of 2005 was
76,502,088. Approximately $80.6 million remained on June 30th of the
company's current stock repurchase authorization.
"We continue to view our dividend and repurchase program as an
important contributor to shareholder value," said Corriggio. "As of
June 30th, the total amount of capital distributed to shareholders in
2005 via share repurchases and dividends was approximately $68.5
million. We are reaffirming that our benchmark for this program for
the full-year 2005 is $125 million to $175 million."
ENTITLEMENTS
JOE's ability to manage the increasingly complex process necessary
to gain land-use entitlements represents a major core competency.
Through entitlements and improvements of strategic infrastructure, JOE
is able to create value by moving significant portions of its land
holdings to higher and better uses.
On June 30th, JOE owned approximately 855,000 acres, concentrated
primarily in Northwest Florida. These holdings included approximately
344,000 acres within 10 miles of the coast of the Gulf of Mexico.
"JOE owns enough high-quality developable land to create value for
many decades," said Twomey. "We invest significant resources to study
our land holdings and understand their development potential. As the
Northwest Florida market continues to develop and evolve, we continue
to test our assumptions and re-evaluate our strategic plans. But we
never lose sight of our ultimate goal - to create value for JOE
shareholders and the people who call Northwest Florida home.
"The development of well-conceived and executed projects creates
new opportunities on adjacent parcels," said Twomey. "For example,
anticipated activity at Pier Park in Panama City Beach has created
several new residential opportunities on nearby JOE land. This
constant re-evaluation of land use is a key part of our value-creation
process."
During the second quarter, JOE made significant progress in
planning and entitling a number of new projects, increasing the number
of units in the residential pipeline to 34,933 at June 30th. JOE's
residential pipeline includes land-use entitled projects in
development and predevelopment and projects in the land-use
entitlements process, less the number of units under contract or sold.
Table 2 summarizes JOE's Florida residential projects with
land-use entitlements at June 30th. This table includes multifamily
projects which will be marketed by our Commercial segment.
Table 2
Summary of Land-Use Entitlements (1)
JOE Residential Projects in Florida
June 30, 2005
Units
Sold/Under
Contract
Project Project Since
Project County Acres Units (1) Inception
- ------- ------ ------- ------- ---------
In Development: (2)
- ---------------
Artisan Park (3) Osceola 175 616 419
Bridgeport Gulf 15 37 15
Cutter Ridge Franklin 10 25 0
Landings at Wetappo Gulf 113 16 0
Palmetto Trace Bay 141 481 375
Paseos (3) Palm Beach 175 325 323
RiverCamps on
Crooked Creek Bay 1,491 408 144
Rivercrest (3) Hillsborough 413 1,382 1,378
RiverSide at Chipola Calhoun 120 10 2
SouthWood (4) Leon 3,370 4,770 1,492
St. Johns Golf &
Country Club St. Johns 820 799 730
The Hammocks Bay 133 457 435
Victoria Park Volusia 1,859 4,200 874
Walton Corners Leon 60 32 0
WaterColor Walton 499 1,140 857
WaterSound Beach Walton 256 511 397
WaterSound Walton 1,402 1,330 0
WaterSound West Beach Walton 62 199 0
WindMark Beach Gulf 2,020 1,662 104
----- ----- ---
Subtotal 13,134 18,400 7,545
------ ------ -----
In Pre-Development: (2)
- -------------------
Bayview Estates Gulf 13 7 0
Boggy Creek Bay 630 1,260 0
Camp Creek
Golf Cottages Walton 10 50 0
East Lake Powell Bay 181 360 0
Glades Bay 26 360 240
Hawks Landing Bay 88 167 83
Hills Road Bay 30 356 0
Long Avenue Gulf 22 52 0
Osprey Landing Bay 118 250 0
Perico Island Manatee 352 686 0
Pier Park Timeshare Bay 13 125 0
Port St. Joe
Millsite Area (5) Gulf 170 598 0
Powell Adams Bay 32 1,425 0
RiverCamps on
Sandy Creek Bay 6,500 624 0
RiverTown St. Johns 4,170 4,500 0
SummerCamp Franklin 762 499 0
Sunnyside Bay 22 216 216
Timber Island (6) Franklin 49 458 0
Topsail Walton 115 627 0
Wavecrest Bay 7 95 0
West Bay Landing Bay 1,115 685 0
WhiteFence Farms,
Red Hills Leon 373 35 0
Woodrun Bay 10 46 46
-- -- --
Subtotal 14,808 13,481 585
------ ------ ---
Total 27,942 31,881 8,130
====== ====== =====
(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. Project
units represent the maximum number of units entitled or currently
expected at full build-out. The actual number of units to be
constructed at full build-out may be lower than the number entitled or
currently expected.
(2) A project is "in development" when construction on the project
has commenced. A project in "pre-development" has land-use
entitlements but is still under evaluation or requires one or more
additional permits prior to the commencement of construction.
(3) Artisan Park is 74 percent owned by JOE. Paseos and Rivercrest
are each 50 percent owned by JOE.
(4) Includes 480 entitled multifamily units that were sold or
contracted to third party developers.
(5) A 126-acre parcel within this project is owned by a joint
venture of which JOE is a 50 percent owner and managing partner.
(6) Timber Island entitlements include 58 residential units and
400 units for hotel or other transient uses (including units held with
fractional ownership such as private residence clubs) and include 480
wet/dry marina slips.
Table 3 summarizes JOE's Florida residential projects in the
entitlements process as of June 30th.
Table 3
Proposed JOE Residential Projects
In the Land-Use Entitlement Process in Florida (1)
June 30, 2005
Estimated
Project County Project Acres Project Units (2)
- ------- ------ ------------- -------------
Bonfire Beach Bay 524 1,048
Carrabelle East Franklin 200 600
Cody Ridge Jefferson 985 197
College Station Bay 567 1,325
Hammocks at
St. Joseph Bay Gulf 76 15
St. James Island
McIntyre Franklin 1,704 340
St. James Island
RiverCamps Franklin 2,500 500
St. James Island
Granite Point Franklin 1,000 2,000
WestBay DSAP Future
Phases (3) Bay 4,836 5,157
----- -----
Total 12,392 11,182
====== ======
(1) All projects listed 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) Any development in future phases of the West Bay DSAP is
conditioned upon the encumbrance of mitigation lands for the proposed
relocation of the Panama City-Bay County International Airport.
St. James Island
During the second quarter, Franklin County approved a revised
future land-use map for St. James Island that could add land-use
entitlements for up to 3,440 residential units on 5,404 acres owned by
JOE. The Florida Department of Community Affairs found the amendment
to Franklin County's comprehensive plan to be in compliance with state
law. However, that finding has been challenged. A resolution to this
challenge and other regulatory and environmental permits is required
before development can begin.
WestBay
In the second quarter, Enterprise Florida, Inc., a public-private
partnership responsible for leading the State of Florida's economic
development efforts, selected WestBay and the proposed relocated
Panama City - Bay County International Airport as one of three Florida
sites to compete in a site selection process initiated by EADS, a
European aviation, defense and space company seeking a site for an
engineering facility and proposed assembly plant for a U.S. Air Force
aerial tanker. However, in May EADS accelerated their timetable,
eliminating the WestBay site from contention.
"Through our participation in the EADS process, we learned more
about the WestBay site," said Twomey. "We used EADS to launch a
marketing campaign that significantly raised WestBay's profile and
highlighted its competitive advantages, generating interest from
several other important prospects."
SEGMENT RESULTS
ST. JOE TOWNS & RESORTS
Pretax income from continuing operations for St. Joe Towns &
Resorts, JOE's residential and resort development segment, was $50.9
million for the second quarter this year, compared with $34.4 million
in the second quarter last year, excluding income from unconsolidated
affiliates.
In the second quarter, St. Joe Towns & Resorts closed on the sales
of 553 units and generated revenues from housing and home sites of
$190.9 million, compared to 540 units and $158.5 million in revenue in
the second quarter of 2004. JOE accepted contracts for 646 units in
the second quarter of 2005, compared to 688 units in the second
quarter a year ago.
Tables 4 and 5 summarize sales activity for St. Joe Towns &
Resorts for the second quarters of 2005 and 2004.
Table 4
St. Joe Towns & Resorts
Sales Activity
For the Three Months
Ended June 30,
($ in millions)
2005 2004
----------------------------- ------------------------------
Number Number
of Cost of Cost
Units of Gross Units of Gross
Closed Revenue Sales(1) Profit Closed Revenue Sales(1) Profit
------------------------------- ------------------------------
Home
Sites 120 $52.7 $12.2 $40.5 130 $44.8 $13.2 $31.6
Homes
(2) 433 138.2 115.8 22.4 410 113.7 97.0 16.7
--- ----- ----- ---- --- ----- ---- ----
Total 553 $190.9 $128.0 $62.9 540 $158.5 $110.2 $48.3
=== ===== ===== ==== === ===== ===== ====
(1) Cost of sales for home sites in the second quarter of 2005
consisted of $9.4 million in direct costs, $1.7 million in selling
costs and $1.1 million in indirect costs. Cost of sales for home sites
in the second quarter of 2004 consisted of $9.8 million in direct
costs, $2.1 million in selling costs and $1.3 million in indirect
costs. Cost of sales for homes in the second quarter of 2005 consisted
of $98.7 million in direct costs, $7.4 million in selling costs and
$9.7 million in indirect costs. Cost of sales for homes in the second
quarter of 2004 consisted of $81.1 million in direct costs, $5.8
million in selling costs and $10.1 million in indirect costs.
(2) Homes include single family, multifamily and Private Resident
Club (PRC) units. Multi-family and PRC revenue is recognized, if
preconditions are met, on a percentage-of-completion basis. As a
consequence, revenue recognition and closings may occur in different
periods. Paseos and Rivercrest, two joint ventures 50 percent owned by
JOE, are not included.
Table 5
Units Placed Under Contract
For the Three Months
Ended June 30,
2005 2004 Percentage Change
---- ---- -----------------
Home Sites 146 143 2.1 %
Homes (1) 500 545 (8.3)
--- --- -----
Total (2) 646 688 (6.1)%
=== === =====
(1) Homes include single family homes, multifamily and PRC units.
Some home sites are offered for sale with a home to be constructed by
JOE.
(2) Paseos and Rivercrest, two joint ventures, are not included.
Units placed under contract at Paseos and Rivercrest totaled 98 units
at the end of the second quarter of 2005, compared to 247 units at the
end of the second quarter of 2004.
Table 6 summarizes backlog at June 30, 2005 and 2004.
Table 6
Backlog (1) on
June 30,
($ in millions)
Units Revenue
----- -------
2005 2004 2005 2004
---- ---- ---- ----
Home Sites 36 28 $3.2 $6.4
Homes 1,157 1,017 420.6 296.2
----- ----- ----- -----
Total 1,193 1,045 $423.8 $302.6
===== ===== ===== =====
(1) Backlog represents units under contract but not yet closed.
Paseos and Rivercrest, two joint ventures 50 percent owned by JOE, are
not included. Backlog at Paseos and Rivercrest totaled $178.9 million
for 726 units at the end of the second quarter of 2005, compared to
$143.1 million for 533 units at the end of the second quarter of 2004.
Northwest Florida
WaterColor
During the second quarter, contracts for 36 home sites in
WaterColor's phas e four were accepted and closed at an average price
of $544,600. At June 30th, there were 146 units remaining to be sold
in phase four. There were 19 units in WaterColor's first three phases
that remain to be sold.
WaterSound Beach
In the second quarter, contracts for 24 home sites were accepted
and closed at an average price of $1.0 million.
Closings of 48 multifamily units at Compass Point are expected to
be completed in the third quarter or early in the fourth quarter this
year at an average price of $1.5 million. The remaining 43 units in
Compass Point are scheduled to be released for sale later this year
and in 2006. Construction of 22 of those units is scheduled to begin
late this year, while construction of the last 21 units is expected to
start in early 2006.
As of June 30th, 114 units, including 8 beachfront home sites,
remained to be sold in WaterSound Beach, which is entitled for 511
units. WaterSound Beach is set on over a mile of white sand beach in
Walton County, five miles east of WaterColor.
WaterSound West Beach
Sales activity at WaterSound West Beach began early in the third
quarter of 2005. Reservations were accepted on July 19th for each of
the first 12 home sites released at prices that ranged from $695,000
to $745,000 and averaged $713,750. Contracts for these home sites are
expected to close later in the third quarter. This is a high-end
resort community with 199 single family home sites on the beach side
of County Road 30A.
WaterSound
Infrastructure construction continued during the second quarter at
WaterSound, a resort community approximately three miles from
WaterSound Beach. WaterSound is set between U.S. 98 and the
Intracoastal Waterway in Walton County.
On June 7th, the Walton County Board of County Commissioners voted
unanimously to approve a Development of Regional Impact (DRI) for
WaterSound, a proposed 1,330-unit mixed-use development on
approximately 1,402 acres owned by JOE. Walton County had previously
approved a preliminary development agreement for 478 of the planned
units. The DRI includes the balance of 596 single family units and 256
multifamily units. The DRI also provides for the development of
approximately 457,000 square feet of retail and office uses and
includes an additional 50 residential units at Camp Creek Golf Club.
Final approval of the DRI is subject to a 45-day review by the Florida
Department of Community Affairs. In addition, certain regulatory and
environmental permits are required for full build-out.
WaterSound is being planned for the second home and pre-retirement
markets with six and nine-hole golf courses along with pools and other
amenities. "We intend to wait for additional progress of the
construction of the community amenities before beginning sales in
early 2006," said Twomey.
WindMark Beach
Construction began in June on the next phase of WindMark Beach
consisting of 1,552 units along more than 15,000 feet of beachfront
near the town of Port St. Joe. Construction also started on the
realignment of a three-mile segment of U.S. 98 within WindMark Beach.
Plans for WindMark Beach provide that once U.S. 98 has been
relocated away from the beach, the existing roadbed will be
reconstructed to create a 3.5-mile public beachfront trail system. No
residential development is planned seaward of the beachfront trails,
and JOE will provide public beach parking areas and access points for
the public.
"WindMark Beach embraces, restores and protects almost four miles
of beautiful beach and makes it accessible to the public with
activities that center on family fun," said Twomey. "Together with the
Gulf County community, we are creating WindMark Beach to respect local
culture, landscape, architecture and the conservation lands nearby."
"WindMark Beach is planned as a high-end beachfront resort
destination on 2,020 acres in Gulf County," said Twomey. "Although we
initially planned to start sales in the new phase of WindMark Beach
later this year, we have elected to wait for the higher values we
believe can be achieved after additional progress is made on the
construction of infrastructure and amenities."
Sales of the first phase of WindMark Beach, which included 110
home sites, began in 2001. Only five retail home sites, including two
on the beach, and one beachfront home remain to be sold in this first
phase; however, none of these have been released for sale. The first
phase features a pool club and several community docks, as well as an
extensive conservation area.
SouthWood
Contracts were accepted at SouthWood for 65 single family homes in
the second quarter this year at an average price of $290,700, compared
to 59 homes at an average price of $236,400 in the second quarter last
year. SouthWood, located on 3,370 acres in Tallahassee, is designed
for primary homes.
SummerCamp
Construction is expected to start later in the third quarter and
sales of 52 previously released and reserved home sites at SummerCamp
are expected to close this year.
SummerCamp is a 499-unit development on 762 acres located
approximately 45 miles south of Tallahassee in Franklin County on the
Gulf of Mexico.
Northeast Florida
RiverTown
Environmental permitting and predevelopment planning continued
during the second quarter at RiverTown in St. Johns County. Planned
for 4,500 units on 4,170 acres, sales are scheduled to start in 2006.
Central Florida
Victoria Park
Victoria Park pricing continued to strengthen during the second
quarter. We accepted contracts for 67 homes in 2005's second quarter
at an average price of $305,100, up from 62 homes at an average price
of $235,700 in the second quarter a year ago.
During the second quarter, Victoria Park opened a Southern Living
Idea House that is featured in the magazine's August issue. The home
is open for public tours through October 2, 2005.
Located between Orlando and Daytona Beach, Victoria Park sits on
1,859 acres in the historic college town of DeLand. This mixed-used
community is planned for approximately 4,200 residences built among
parks, lakes and conservation areas.
Southwest Florida
Perico Island
Predevelopment work continued during the second quarter on Perico
Island in Manatee County. Entitled for 686 residential units on 352
acres, Perico Island is being designed as a high-end community.
Construction and sales are expected to begin next year.
North and South Carolina
For the second quarter this year, Saussy Burbank, JOE's
homebuilder based in Charlotte, N.C., accepted contracts for 254
homes, compared to 213 contracts in the second quarter of 2004. "We
have seen a broad strengthening across our Carolina markets," said
Twomey.
Joint Venture Communities
Celebration, Artisan Park
In the second quarter of 2005, JOE accepted contracts on 5
single-family home sites and 25 single-family homes at average prices
of $447,000 and $661,000, respectively, compared to 3 home sites and
19 single-family homes at average prices of $180,000 and $435,600,
respectively, for the second quarter of 2004.
JOE accepted contracts for 22 condominiums in Artisan Park in the
second quarter of this year at an average price of $487,400, compared
to 41 condominiums at an average price of $277,000 in the same period
last year. Increases in construction and labor costs have more than
been offset by very strong unit pricing and higher view premiums for a
number of units sold in 2005.
Rivercrest
Sales were almost complete at Rivercrest at June 30th. Rivercrest
is a 1,382-unit primary residential community located just outside of
Tampa. JOE owns 50 percent of the joint venture developing Rivercrest
and manages the project.
Table 7 summarizes the sales activity at various residential
communities for the second quarters of 2005 and 2004.
Table 7
St. Joe Towns & Resorts
Sales Activity
For the Three Months Ended June 30,
($ in thousands)
2005
----------------------------------------------
Units Avg. Contracts Avg.
Closed Price Accepted (1) Price
-------- ------ --------- ------
WaterColor
Home Sites 36 $544.6 36 $544.6
Single/Multi-
Family Homes 2 735.7 0 N/A
PRC Shares 0 N/A 0 N/A
WaterSound Beach
Home Sites 24 1,020.2 24 1,020.2
Single Family
Homes 0 N/A 0 N/A
Multifamily Homes 0 N/A 0 N/A
Palmetto Trace
Single Family
Homes 31 188.6 26 301.6
The Hammocks
Home Sites 0 N/A 0 N/A
Single Family
Homes 19 191.2 25 143.7
WindMark Beach
Home Sites 0 N/A 0 N/A
Bridgeport
Home Sites 0 N/A 5 21.2
SouthWood
Home Sites 22 130.2 25 132.2
Single Family
Homes 58 259.1 65 290.7
St. Johns G & CC
Home Sites 12 64.7 35 70.2
Single Family
Homes 39 402.6 15 471.1
Hampton Park/James
Island
Single Family
Homes 4 511.8 1 499.9
Victoria Park
Home Sites 21 139.3 16 138.8
Single Family
Homes 87 270.3 67 305.1
Artisan Park (2)
Home Sites 5 447.0 5 447.0
Single Family
Homes 18 432.3 25 661.0
Multifamily Homes 0 N/A 22 487.4
Paseos (2)
Single Family
Homes 35 435.7 0 N/A
Rivercrest (2)
Single Family
Homes 138 160.8 98 213.1
Saussy Burbank
Single Family
Homes 175 256.0 254 245.8
2004
----------------------------------------------
Units Avg. Contracts Avg.
Closed Price Accepted (1) Price
-------- ----- --------- -------
WaterColor
Home Sites 47 $575.8 53 $585.8
Single/Multi-
Family Homes 2 1,059.9 4 974.0
PRC Shares 0 N/A 16 207.8
WaterSound Beach
Home Sites 18 613.7 17 626.4
Single Family
Homes 0 N/A 1 1,294.0
Multifamily Homes 0 N/A 17 1,627.0
Palmetto Trace
Single Family
Homes 25 153.6 27 154.9
The Hammocks
Home Sites 38 37.1 38 37.1
Single Family
Homes 10 139.1 36 166.3
WindMark Beach
Home Sites 3 1,016.7 3 1,016.7
Bridgeport
Home Sites 0 N/A 0 N/A
SouthWood
Home Sites 4 107.5 18 98.9
Single Family
Homes 34 245.9 59 236.4
St. Johns G & CC
Home Sites 7 117.4 0 N/A
Single Family
Homes 28 364.0 40 368.0
Hampton Park/ James
Island
Single Family
Homes 27 335.4 10 355.0
Victoria Park
Home Sites 10 80.0 11 79.7
Single Family
Homes 52 220.3 62 235.7
Artisan Park (2)
Home Sites 3 180.0 3 180.0
Single Family
Homes 12 454.5 19 435.6
Multifamily Homes 0 N/A 41 277.0
Paseos (2)
Single Family
Homes 23 384.8 64 469.0
Rivercrest (2)
Single Family
Homes 76 144.7 183 164.3
Saussy Burbank
Single Family
Homes 220 211.0 213 226.5
(1) Contracts accepted during the quarter. Contracts accepted and
closed in the same quarter are also included as units closed. Average
prices shown reflect variations in the product mix across time periods
as well as price changes for similar product.
(2) JOE owns 74 percent of Artisan Park and 50 percent of each of
Paseos and Rivercrest. Sales from Paseos and Rivercrest 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 Real Estate
Services Company, the Company's commercial real estate services unit.
Pretax income from continuing operations from the commercial segment
was $2.5 million for the second quarter of 2005, compared with $1.0
million in the same quarter of 2004, excluding income from
unconsolidated affiliates.
St. Joe Commercial
For the second quarter of 2005, St. Joe Commercial had pretax
income from continuing operations of $2.6 million, compared to $1.4
million in the second quarter a year ago.
"Our commercial development division turned in a solid second
quarter driven by its commerce and business park land sales in
Northwest Florida," said Twomey. "During the second quarter of 2005,
JOE sold 11 Northwest Florida commercial land parcels for $2.9
million."
Commercial land sales averaged $116,000 per acre in 2005's second
quarter, compared to $60,000 per acre in the second quarter a year
ago. These prices reflect both increasing pricing and the different
mixes of the commercial land sold each quarter, which varied in its
composition of retail, office, light industrial, multifamily and other
commercial uses.
Table 8 summarizes JOE's commercial land sales in Northwest
Florida for the second quarters of 2005 and 2004.
Table 8
St. Joe Commercial Northwest Florida Land Sales
Number
of Acres Gross Sales Price Average Price/Acre
Land Sales Sold (in thousands) (in thousands)
- ---- ----- ----- ----------------- ------------------
Quarter Ended June 30, 2005
Unimproved -- -- $ -- $ --
Improved 11 25 2,933 116
-- -- ------ -----
Total/Average 11 25 $2,933 $ 116
== == ====== =====
Quarter Ended June 30, 2004
Unimproved 1 42 $1,542 $ 36
Improved 8 15 1,861 128
- -- ------ ---
Total/Average 9 57 $3,403 $60
= == ====== ===
Northwest Florida
Retail
"Interest from large national retailers in Northwest Florida, and
Panama City Beach in particular, continued to be strong in the second
quarter," said Twomey. "We look forward to bringing new retail
operators into the market later this year and in 2006 at higher
per-square-foot prices.
"Simon Property Group, Inc. has under contract or option the right
to purchase 125 acres in and near Pier Park," said Twomey. "JOE
retains approximately 13 acres in Pier Park near the beach for future
JOE development. In addition, JOE owns approximately 60 adjacent acres
near Pier Park and the beach with zoning allowing high-density
residential uses."
Multifamily
At the end of the second quarter, JOE had five parcels for
multifamily development under contract, totaling 76 acres, at an
average price of approximately $170,000 per acre. Four of the parcels
are expected to close by the end of the year.
"As Northwest Florida grows, multifamily residential products are
an increasingly important housing option for this region," said
Twomey. "Multifamily housing, which includes apartments, condominiums
and town homes, is critically important to the Northwest Florida
economy as new workers arrive in the marketplace."
Commerce and Business Parks
During the second quarter this year, commercial land sales within
JOE's commerce and business parks totaled $2.9 million, compared to
$1.2 million in the second quarter last year. JOE has eight parks
operating or under development in five Northwest Florida counties.
"We continued to see strong demand and pricing in the second
quarter at JOE's commerce parks," said Twomey. "Many local businesses
are buying parcels in commerce parks as new jobs are created in the
region."
Nearly one third of the parcels have been sold in South Walton
Commerce Park, which has been open only eight months. Contracts were
closed on three parcels in the second quarter for total proceeds of
$838,000, or $276,000 per acre. JOE is already planning the second
phase of this park.
At Beach Commerce Park, demand for office and light industrial
land continues to be strong with average pricing this quarter climbing
to $91,000 per acre, compared with $70,000 per acre in the same
quarter a year ago. Six parcels were sold in the second quarter for
gross proceeds of $1.8 million.
Table 9 summarizes the status of JOE's commerce and business parks
in Northwest Florida as of June 30th.
Table 9
Commerce and Business Parks (1)
June 30, 2005
Current
Net Acres Sold/ Asking
Saleable Under Price
Commerce Parks County Acres Contract Per Acre
- -------------- ------ ----- -------- ---------
Airport Commerce Leon 40 -- $65,000-$260,000
Beach Commerce Bay 161 131 100,000-500,000
Beach Commerce II Bay 115 -- 80,000-130,000
Hammock Creek
Commerce Gadsden 114 27 50,000-150,000
Port St. Joe
Commerce Gulf 58 58 Sold Out
Port St. Joe
Commerce II Gulf 40 2 65,000-135,000
South Walton Commerce Walton 39 14 374,000-600,000
-- --
Subtotal 567 232
--- ---
Business Parks
- --------------
Beckrich Office Bay 12 8 N/A
Nautilus Court Bay 11 4 523,000-610,000
SouthWood Business Leon 16 14 215,000-220,000
SouthWood Business II Leon 22 0 150,000-750,000
-- --
Subtotal 61 26
-- --
Total 628 258
=== ===
(1) Includes existing parks, as well as parks under development.
Investment Property Portfolio
As of June 30, 2005, JOE's portfolio of commercial office
buildings (acquired through its redeployment program of tax deferred
sales proceeds from the sale of land and buildings from the investment
portfolio) totaled approximately 2.8 million square feet and
represented an aggregate initial investment of $383 million. There
were no changes to the portfolio composition during the first half of
2005.
Table 10 summarizes JOE's investment property portfolio of
commercial buildings as of June 30th.
Table 10
Investment Portfolio of Commercial Buildings
June 30, 2005
Number of Net Rentable Leased
Location Properties Square Feet Percentage
- -------- ---------- ------------ ----------
Florida
Jacksonville 1 136,000 59 %
Northwest Florida 3 156,000 93
Orlando 2 317,000 67
Tampa 5 489,000 82
Atlanta 8 1,289,000 89
Charlotte 1 158,000 100
Richmond 2 129,000 96
Washington, D.C. 1 119,000 94
-- ------- --
Total 23 2,793,000 85 %
== ========= ==
Land Positions
During the second quarter of 2005, JOE sold three commercial land
parcels in Houston and Atlanta. In April, JOE sold a 207-acre
industrial parcel near the Port of Houston, originally acquired in
1946, for $2.8 million and a pretax gain of $2.0 million. A four-acre
office parcel also located in Houston was sold for $1.2 million and a
pretax gain of $0.4 million. Finally, a three-acre office parcel
located in Atlanta was sold for gross proceeds of $7.0 million and a
pretax gain of $0.1 million.
At the end of the quarter, JOE's portfolio of commercial land held
for investment included approximately 49 acres in Houston, Atlanta,
Jacksonville and Orlando.
Advantis
Pretax income from continuing operations in the second quarter of
2005 was $0.4 million before elimination of inter-company profits of
$0.5 million. Advantis had pretax income from continuing operations of
$0.1 million for the second quarter of 2004, before elimination of
inter-company profits of $0.5 million.
ST. JOE LAND COMPANY
St. Joe Land Company had pretax income from continuing operations
of $16.3 million in the second quarter of 2005, compared with $10.3
million in the second quarter of 2004.
"We are very pleased with the continued growth and improvement of
the Land Company product line," said Twomey. "The RiverCamps concept
has helped us identify a new market and a product line to meet the
demand for a wide range of rural land products. With the continued
development of our New Ruralism products - RiverCamps, WhiteFence
Farms and Florida Ranches - we believe we can move additional
timberland acres to a higher and better use. And we are continuing to
work on the development of new niche rural land products. The future
of the Land Company has never looked more promising.
"In addition, we are also pleased with the expansion of markets
for its New Ruralism and rural land products," said Twomey. "The land
company started with customers who were mostly neighbors. Today, we
are seeing increasing interest from well outside the state and outside
the region.
"An increasing number of our rural land buyers, coming from areas
such as South Florida, Atlanta and Birmingham, have caused prices to
strengthen," said Twomey. "Our marketing strategy is being adjusted to
further broaden this customer pool."
Table 11 illustrates the shift in Land Company customers.
Table 11
St. Joe Land Company
Percentage Buyers Outside 120 Mile Radius
2002 2003 2004 2005 (1)
---- ---- ---- ----
RiverCamps N/A % 48 % 60 % 66 %
Other Land
Sales 15 25 31 39
(1) As of June 30, 2005.
RiverCamps
RiverCamps are planned settlements in rustic settings, offering
personal retreats in private preserves. RiverCamps' low-density home
sites are sold fee-simple and are surrounded by a large common area
preserved for conservation. Two RiverCamps locations are currently
being developed.
RiverCamps on Crooked Creek
"Pricing remains strong at RiverCamps on Crooked Creek," said
Twomey. "Demand has remained solid as the average prices of home sites
and the number of units released has increased."
On June 30th, JOE released 30 home sites in RiverCamps on Crooked
Creek with an average price of $357,000 and a price range of $200,000
to $775,000. Each release has been a blend of home site types from
inland home sites, those with marsh views and others on the bay front.
Reservations were received for each home site, and contracts are
expected to close in the third quarter of this year.
Construction of infrastructure and amenities continued in the
second quarter and 190 home sites are expected to be completed by
year-end. The RiverCamps "Entry Barn" is scheduled to be completed by
Labor Day. A RiverCamps prototype cabin is expected to be completed in
late 2005, and two new cabin designs are slated to start construction
in the third quarter of this year. Construction of the ponds and
nature trails began during the second quarter, and construction of the
boat launch and dock facility, boardwalks and the RiverHouse are set
to start later in the third quarter.
RiverCamps on Crooked Creek, located in Western Bay County, is
planned for up to 408 home sites on 1,491 acres of former timberland
and features views of West Bay, the Intracoastal Waterway and Crooked
Creek.
RiverCamps on Sandy Creek
During the second quarter, predevelopment work continued for
RiverCamps on Sandy Creek. Current plans call for 624 units on
approximately 6,500 acres. RiverCamps on Sandy Creek features views of
Sandy Creek and Little Sandy Creek and access to East Bay in eastern
Bay County. Pending the receipt of land-use approvals and
environmental permits, sales are planned for 2006 or 2007.
WhiteFence Farms
JOE's WhiteFence Farms will be communities of small farms with
room for a large home site and a variety of farm and equestrian
activities. To be developed in a number of locations in Northwest
Florida, WhiteFence Farms are being designed to feel 'old farm and
equestrian,' while having proximity to suburban services for primary
residences.
Predevelopment planning started in the second quarter of this year
at the first WhiteFence Farms location near Tallahassee. This
development is expected to total approximately 373 acres with each
individual farm site consisting of 10 to 20 acres. Initial pricing is
expected to range from $20,000 to $45,000 per acre for a typical farm
site. Sales are expected to begin in 2006.
Florida Ranches
Predevelopment planning continued in the second quarter of 2005 on
the initial Florida Ranch properties in several locations in Northwest
Florida. Florida Ranches are expected to consist of 50- to 150-acre
sites located within 1,000 to 3,000-acre communities.
Initial pricing for Florida Ranch parcels is expected to range
from $4,500 to $7,500 per acre. Sales are expected to begin in 2006.
Rural Land Sales
In the second quarter of 2005, JOE sold 6,480 acres of rural land
at an average price of $2,209 per acre, compared to 4,216 acres for an
average price of $2,633 per acre in the same quarter a year ago. The
mix of land sold each quarter varies by location and quality.
During the second quarter, two large home sites were sold in
RiverSide at Chipola, a rural gated community of 10 home sites in
Calhoun County on the Chipola River, for $165,000 and $226,000.
Additional sites in RiverSide at Chipola are planned for sale later
this year.
"To capture more of the growing values in Northwest Florida land,
we are more focused on sales to buyers who intend to use the land for
a specific personal use, rather than buyers who intend to subdivide
parcels for resale," said Twomey. "This strategy shift to more
end-users is expected to continue to improve per acre pricing.
Interest is high in our Woodlands product, and we believe it will
increase as market awareness increases."
FINANCIAL DATA
($ in millions except per share amounts)
Summary Balance Sheet
June 30, 2005 June 30, 2004
------------- --------------
Assets
Investment in real estate $1,002.0 $902.0
Cash and cash equivalents 22.6 70.8
Accounts receivable 139.0 44.0
Prepaid pension asset 95.9 94.6
Property, plant and equipment, net 42.8 35.5
Other assets 158.8 134.4
Assets held for sale 16.6 59.7
------------- --------------
Total assets $1,477.7 $1,341.0
============= ==============
Liabilities and Stockholders' Equity
Debt $ 432.1 $ 399.6
Accounts payable, accrued liabilities 229.0 181.3
Deferred income taxes 285.9 240.4
Liabilities related to assets
held for sale 10.0 26.5
------------- --------------
Total liabilities 957.0 847.8
Minority interest 15.3 6.0
Total stockholders' equity 505.4 487.2
------------- --------------
Total liabilities and
stockholders' equity $1,477.7 $1,341.0
============= ==============
Debt Schedule
June 30, 2005 June 30, 2004
------------- -------------
Revolving debt facility $ 50.0 $ --
Medium term notes 257.0 275.0
Acquisition and other debt 14.9 15.3
Other collateralized/specific asset
related debt 110.2 109.3
------------- -------------
Total debt $ 432.1 $ 399.6
============= =============
Consolidated Quarterly Comparisons
Quarter Ended June 30, Six Months Ended June 30,
---------------------- -------------------------
2005 2004 2005 2004
---- ---- ---- ----
Revenues:
Real estate
sales $228.3 $177.6 $386.9 $313.3
Realty
revenues 26.0 23.8 51.5 42.8
Timber sales 7.6 9.2 15.6 19.1
Rental revenue 12.6 9.7 24.9 19.2
Other revenues 14.1 12.2 22.2 19.6
---- ---- ---- ----
Total
revenues 288.6 232.5 501.1 414.0
----- ----- ----- -----
Expenses:
Cost of real
estate sales 142.2 114.1 247.1 204.6
Cost of realty
revenues 17.5 15.5 35.4 26.2
Cost of timber
sales 4.9 5.7 10.1 11.8
Cost of rental
revenue 5.0 3.6 9.4 7.4
Cost of other
revenues 11.8 10.0 19.8 16.5
Other operating
expenses 26.0 25.3 50.0 49.3
Corporate
expense, net 12.0 9.5 24.0 18.6
Depreciation and
amortization 10.4 8.3 20.8 16.8
Impairment loss -- 2.0 -- 2.0
----- ----- ----- -----
Total
expenses 229.8 194.0 416.6 353.2
----- ----- ----- -----
Operating
profit 58.8 38.5 84.5 60.8
Other income
(expense) (2.9) (2.3) (4.7) (4.2)
----- ----- ----- -----
Pretax income from
continuing
operations 55.9 36.2 79.8 56.6
Income tax expense (22.4) (14.2) (31.9) (22.3)
Minority interest
(expense) income (1.1) (0.4) (2.0) (0.5)
Equity in income
(loss) of
unconsolidated
affiliates 5.5 0.9 7.4 1.6
Discontinued
operations -- 0.2 -- 0.3
------ ----- ------ -----
Net income $37.9 $22.7 $53.3 $35.7
====== ===== ====== =====
Net income per
diluted share $0.50 $0.30 $0.70 $0.46
===== ===== ===== =====
Weighted average
diluted shares
outstanding 76,502,088 76,695,142 76,601,786 77,213,116
Quarterly Revenues By Segment
Quarter Ended June 30, Six Months Ended June 30,
---------------------- -------------------------
2005 2004 2005 2004
---- ---- ---- ----
Towns &
Resorts $205.2 $171.0 $342.4 $276.7
Commercial
real estate 52.2 38.3 101.7 81.6
Land sales 23.6 14.0 41.4 36.7
Forestry 7.6 9.2 15.6 19.0
------ ------ ------ ------
Total
revenues $288.6 $232.5 $501.1 $414.0
====== ====== ====== ======
Quarterly Segment Pretax Income
From Continuing Operations
June 30, Mar 31, Dec 31, Sept 30, June 30,
2005 2005 2004 2004 2004
---- ---- ---- ---- ----
Towns & Resorts $50.9 $22.7 $24.7 $31.8 $34.4
Commercial real
estate 2.5 0.4 18.0 2.9 1.0
Land sales 16.3 12.1 16.5 11.6 10.3
Forestry 1.5 2.0 2.1 1.9 2.4
Corporate and other (15.3) (13.8) (17.0) (13.6) (11.9)
----- ----- ----- ----- -----
Pretax income from
continuing
operations $55.9 $23.4 $44.3 $34.6 $36.2
===== ===== ===== ===== =====
Mar 31, Dec 31, Sept 30, June 30,
2004 2003 2003 2003
---- ---- ---- ----
Towns & Resorts $9.1 $13.2 $32.1 $23.0
Commercial real
estate 1.1 5.4 (1.5) (11.5)
Land sales 18.8 33.2 14.8 12.8
Forestry 2.7 2.3 1.6 2.2
Corporate and other (11.5) (11.6) (11.9) (10.7)
---- ---- ---- ----
Pretax income from
continuing
operations $20.2 $42.5 $35.1 $15.8
==== ==== ==== ====
Other Income (Expense)
Quarter Ended June 30,
----------------------
2005 2004
---- ----
Dividend and interest income $0.3 $0.1
Interest expense (4.1) (2.9)
Other 0.9 0.5
--- ---
Total $(2.9) $(2.3)
=== ===
Equity in Income of Unconsolidated Affiliates
Quarter Ended June 30,
----------------------
2005 2004
---- ----
Towns & Resorts $3.1 (1) $1.0
Commercial real estate 2.4 (2) (0.1)
--- ---
$5.5 $0.9
=== ===
(1) Resulted primarily from equity in two residential joint
ventures in Tampa and Jupiter, Florida.
(2) Consists of gains from the sale of a building and the sale of
the final land position of two joint ventures in Atlanta, Georgia.
Reported results are preliminary and not final until the filing of
our Form 10-Q with the SEC and, therefore, remain subject to
adjustment.
Conference Call Information
JOE will host an interactive conference call to review the
Company's results for the quarter ended June 30, 2005 and to discuss
earnings guidance for 2005 on Tuesday, July 26, 2005, at 10:30 a.m.,
Eastern Daylight Time.
To participate in the call, please phone 800.762.7308 (for
domestic calls from the United States) or 480.629.9556 (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 788397. 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, pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
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", "should", "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 products for sale;
-- future operating performance, cash flows, and short and
long-term revenue and earnings growth rates;
-- comparisons to historical projects;
-- the amount of dividends we pay; and
-- 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. New
information, future events or risks may cause the forward-looking
events we discuss in this earnings release not to occur.
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, 2004 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 our Northwest Florida
operations;
-- changes in the demographics affecting projected population
growth in Florida, including the demographic migration of Baby
Boomers;
-- whether our developments receive all land-use entitlements or
other permits necessary for development and/or full build-out
or are subject to legal challenge;
-- local conditions such as the supply of homes and home sites
and residential or resort properties or a change 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;
-- changes in operating costs, including 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;
-- changes in interest rates and the performance of the financial
markets;
-- changes 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, various
permits and the availability of adequate funding;
-- potential liability under environmental laws or other laws or
regulations;
-- changes in laws, regulations or the regulatory environment
affecting the development of real estate;
-- fluctuations in the size and number of transactions from
period to period;
-- weather conditions or natural disasters and the impact on
future demand in Florida;
-- changes in insurance rates and deductibles for property in
Florida;
-- changes in gasoline prices; and
-- acts of war, terrorism or other geopolitical events.
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 2005, The St. Joe Company. "St. Joe," "JOE," "Advantis,"
"Artisan Park," "Paseos," "Pier Park," "RiverCamps," "RiverTown,"
"SouthWood," "SummerCamp," "Victoria Park," "WaterColor,"
"WaterSound," "WhiteFence Farms," "WindMark," and the "taking flight"
design are service marks of The St. Joe Company. "Southern Living" is
a registered trademark of Southern Living, Inc. "Southern Accents" is
a registered trademark of Southern Accents, Inc.
CONTACT: The St. Joe Company, Jacksonville
Media Contact:
Jerry M. Ray, 904-301-4430
jray@joe.com
or
Investor Contact:
Brad Slappey, 904-301-4302
bslappey@joe.com