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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) April 20, 2005
-------------------------------
The St. Joe Company
- --------------------------------------------------------------------------------
(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
--------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Not Applicable
- --------------------------------------------------------------------------------
(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 April 20, 2005, The St. Joe Company (the "Company") issued a press release
announcing the Company's financial results for the quarter ended March 31, 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 April 20, 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: April 20, 2005 By: /s/ Michael N. Regan
----------------------------
Michael N. Regan
Senior Vice President -
Finance and Planning
Exhibit 99.1
The St. Joe Company Reports First Quarter 2005 Net Income of $0.20
Per Share, an Increase of 17.6 Percent Over First Quarter 2004
JACKSONVILLE, Fla.--(BUSINESS WIRE)--April 20, 2005--
JOE Raises Guidance for Full-Year 2005;
JOE 2005 Earnings Per Share Now Expected to be $1.60 to $1.75
The St. Joe Company (NYSE:JOE) today announced that its Net
Income for the first quarter of 2005 was $15.2 million, or $0.20 per
share, compared with $13.0 million, or $0.17 per share, for the first
quarter of 2004. All per share references in this release are
presented on a diluted basis.
"During the first quarter of 2005, our real estate activity was
robust across all our segments," said Peter S. Rummell, chairman and
CEO of JOE. "Solid performance continues, both in terms of price
appreciation and sales velocity. Momentum continues to build in
Florida's favor - particularly in Northwest Florida. We are pleased
with the strong sales across our residential projects. Our strategy of
carefully managing releases at our resort towns is capturing the
increasing values at these communities."
"At the same time, we continue to see evidence that the major
demographic shift we have talked about for several years is now in
fact underway," said Rummell. "Last week the U.S. Census Bureau
released new data identifying the nation's one hundred fastest growing
counties. Florida leads the nation in the number of high-growth
counties. This new data helps confirm what we've been saying for some
time: Florida is the place to be."
"It appears this demographic trend is beginning to manifest itself
in facts on the ground," said Rummell. "It's most obvious in pricing
power. JOE's Gulf coast land values are moving closer to those of more
established southern coastal resort areas. Over time, those types of
destinations will be our best comps - and our prime competitors."
"Based on our strong first quarter, the progress we have made
moving new projects to market and the significant price appreciation
we are seeing in Northwest Florida, we are pleased to raise our
guidance for the full year," said Rummell. "We now expect full-year
results for 2005 to be between $1.60 and $1.75 per share."
JOE's Pipeline Continues to Grow
"The management of the entitlements process remains a clear focus,
a core competency and a strategic advantage for us," said Kevin M.
Twomey, JOE's president and COO. "We continue to improve our
understanding of our land in Northwest Florida and to find higher and
better uses for it. That is not only good for JOE, it is important for
the future economic health of the region."
"JOE's pipeline of residential projects extends well into the
future, with approximately 29,000 units with land-use entitlements or
in various stages of the land-use entitlements process, net of units
sold or under contract through March 31, 2005, in a variety of markets
across Florida," said Twomey.
"The increase in the number of land parcels in residential areas
with entitlements, particularly in Bay County, now allows JOE the
opportunity to selectively choose whether to develop projects or sell
entitled land to third parties on a finished-lot or undeveloped
basis," said Twomey. "JOE is evaluating a number of these parcels to
determine which approach, development or sell, would generate the
maximum financial benefit to our shareholders."
"JOE continues to create and develop the next generation of
projects that provide more options and drive the region's value
creation cycle," said Rummell. "During the first quarter, we continued
predevelopment and design work at key communities with land-use
entitlements. An example is WindMark Beach, where the entitlements
process reached another important milestone late in the first quarter.
With the expiration of challenge periods, state environmental permits
for the project became final. Pending the receipt of remaining
permits, we expect to start infrastructure construction by this
summer."
"Another example is Perico Island, where we now have land-use
entitlements in hand for 686 upscale condominium units on 352 acres
with spectacular views of The Gulf of Mexico to the Skyway Bridge
across Tampa Bay," said Rummell. "We believe Perico Island will be an
excellent performer, with sales activity expected to start in late
2006. Final permitting is required before construction can begin."
Market Conditions
"We continue to monitor economic conditions very closely, both
nationally and in Florida," said Rummell. "Although interest rates
have been trending upward, thus far we have seen no evidence that they
are hurting our sales velocity or price appreciation. We are also
monitoring the impact of rising gasoline prices on traffic from our
key feeder markets."
"For us, the more significant market factors are the power of Baby
Boomer demographics and the strength of Florida's economy," said
Rummell. "Florida's economic fundamentals are solid. Statewide,
employers created 172,000 jobs last year, making Florida one of the
fastest growing job markets in the country. And at the end of 2004,
wages and salaries in Florida were up 6.1 percent from a year
earlier."
"Florida, where we have significant demographic and geographic
advantages, has one of the nation's strongest economies," said
Rummell. "Demographic and market research consistently shows strong
demand for residential property in coastal Northwest Florida. This
region is attracting the interest of a growing share of the Baby
Boomer market. Demand among households qualified by age, wealth and
likelihood to purchase a second or pre-retirement home is predicted to
be strong and growing over the next 15 years. This has obvious and
important strategic implications for JOE."
JOE Invests in Southwest Georgia Land
During the first quarter of 2005, JOE expanded its Investment
Property Portfolio to include the acquisition of land in southwest
Georgia for the continuing redeployment of tax deferred land proceeds.
Previously, investments were made primarily in commercial office
buildings. Through the middle of April 2005, JOE acquired
approximately 47,000 acres at an aggregate purchase price of $57.5
million, or approximately $1,225 per acre.
The majority of this land is located in Stewart County,
approximately 100 miles north of the Florida border in the southwest
part of Georgia between JOE's core land holdings in Northwest Florida
and key JOE feeder markets including Atlanta.
OUTLOOK
Full-Year Guidance for 2005 Raised
"Building on a very solid first quarter and with a strong pipeline
of business in place, we look ahead to the remainder of this year with
increased confidence," said Anthony M. Corriggio, JOE's CFO.
"In February of 2005, we said that we expected earnings per share
for the full year 2005, excluding gains from conservation land sales,
to be in the range of $1.35 to $1.50 per diluted share," said
Corriggio.
"We are pleased to now raise our guidance," said Corriggio. "JOE
expects to have another strong year in 2005, with earnings per share
to be in the range of $1.60 to $1.75 per share. These results are not
expected to include any material conservation land sales gains."
"We believe JOE's major segments will produce good results in 2005
as we bring a broad array of real estate products to market," said
Corriggio.
Towns & Resorts
"We expect JOE's Towns & Resorts segment to drive a large part of
the increase in earnings for 2005," said Corriggio. "We expect
continued strong performance from WaterSound Beach and WaterColor.
Several existing projects, notably Artisan Park, Victoria Park,
Palmetto Trace, Rivercrest and Paseos, are expected to see earnings
increases. Two new projects, SummerCamp and WaterSound West Beach, are
also expected to generate income in 2005, subject to the receipt of
necessary environmental permits."
"Notably, our current expectations for 2005 do not include sales
at four major projects we expect to bring to market in 2006: WindMark
Beach, WaterSound, RiverTown and Perico Island," said Corriggio.
Commercial Real Estate
"We also anticipate strong performance from our commercial real
estate segment this year," said Corriggio. "We expect 2005 results for
this segment to significantly exceed 2004 results, primarily due to
higher levels of commercial land sales and increased commercial
development activity. We expect to generate significant earnings from
the sale of commercial land, multi-family parcels and retail parcels
in Panama City Beach. We expect commercial results to include pretax
income of approximately $7.0 million from building sales and
approximately $2.0 million from a land sale in Houston."
St. Joe Land Company
"We also expect St. Joe Land Company to deliver higher pretax
income in 2005, albeit with a substantially different mix of earnings
sources," said Corriggio. "RiverCamps is expected to deliver
meaningful income in 2005, with more sales and increased unit pricing
throughout the remainder of the year. We also expect the balance of
the 2005 Land Company sales mix to be comprised of smaller parcel
retail sales and no large tract sales. In 2004 large parcel sales over
$2.0 million contributed $31.0 million to pretax income."
DIVIDENDS AND STOCK REPURCHASE PROGRAM
A quarterly cash dividend of $0.14 per share of common stock was
paid on March 31, 2005 to shareholders of record at the close of
business on March 15, 2005.
During the first quarter of 2005, the company expended an
aggregate of $27.3 million for dividends and the acquisition of its
shares. JOE acquired 232,403 of its shares at a cost of $16.6 million,
an average price of $71.59 per share, during the first quarter. Of
these amounts, 171,200 shares were acquired through open market
purchases for $12.3 million (an average of $71.98 per share) and
61,203 shares of stock, having a value of $4.3 million, were
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.
Table 1 summarizes the company's stock repurchase activity from
1998 through March 31, 2005.
Table 1
Stock Repurchase Activity
Through March 31, 2005
Shares
---------------------------------
Total Cost Average
Period Purchased Surrendered 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 171,200 61,203 232,403 16.6 71.59
-------------------------------------------------------
Total/Weighted
Average 25,463,611 2,097,697 27,561,308 $763.5 $27.67
=======================================================
On March 31, 2005, 76,023,896 JOE shares were outstanding. The
number of weighted-average diluted shares in the first quarter of 2005
was 76,701,737. On March 31, 2005, approximately $111.2 million
remained of the company's current stock repurchase authorization.
"We continue to view the dividend and repurchase program as an
important contributor to shareholder value," said Corriggio. "We are
reaffirming that our benchmark for this program for the full-year 2005
is $125 million to $175 million."
ENTITLEMENTS
JOE has a broad range of land-use entitlements in hand or in
various stages of the approval process 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 at March 31, 2005.
Table 2
Summary of Land-Use Entitlements (1)
JOE Residential, Resort and RiverCamps Projects in Florida
March 31, 2005
Units
Sold/Under
Total Maximum Contract
Project Project As of
Project County Acres Units(1) 3/31/05
Artisan Park (2) Osceola 160 616 367
Bridgeport Gulf 13 36 10
CampCreek Golf Cottages Walton 10 50 0
Cutter Ridge Franklin 10 24 0
East Lake Powell Bay 181 360 0
Hawks Landing Bay 88 167 0
Palmetto Trace Bay 138 480 349
Paseos (2) Palm Beach 175 325 323
Perico Island (3) Manatee 352 686 0
Pier Park (Residential) Bay 13 125 0
RiverCamps on Crooked Creek Bay 1,500 450 38
RiverCamps on Sandy Creek Bay 6,000 600 0
Rivercrest (2) Hillsborough 413 1,382 1,280
RiverSide at Chipola Calhoun 271 10 2
RiverTown St. Johns 4,170 4,500 23
SouthWood Leon 3,770 4,770 922
St. Johns Golf & County Club St. Johns 820 799 680
SummerCamp Franklin 782 499 0
The Hammocks Bay 143 457 410
Timber Island (4) Franklin 49 400 0
Victoria Park Volusia 1,859 4,000 791
Walton Corners Leon 60 33 0
WaterColor Walton 499 1,140 821
WaterSound Beach Walton 256 511 373
WaterSound Phase I Walton 506 487 0
WaterSound West Beach Walton 62 199 0
WaterMill Gulf 94 120 0
WaveCrest Bay 7 95 0
West Bay Landing Bay 1,115 685 0
WindMark Beach Gulf 2,080 1,662 104
-------- -------- ---------
Total (5) 25,596 25,668 6,493
(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) Artisan Park is 74 percent owned by JOE. Paseos and Rivercrest are
each 50 percent owned by JOE.
(3) JOE has an option to purchase the land for this project.
(4) Timber Island entitlements are approved for hotel or other
transient uses (including units held with fractional ownership
such as private residence clubs) and include 480 wet/dry marina
slips.
(5) Hampton Park and James Island, both in Jacksonville, are not
included in this table since only two units remain to be sold,
both of which are models.
Table 3 summarizes JOE's Florida residential, resort and
RiverCamps projects in the entitlements process as of March 31, 2005.
Table 3
JOE Residential, Resort and RiverCamps Projects
In the Land-Use Entitlement Process in Florida (1)
March 31, 2005
Estimated
Total Maximum
Project Project
Project County Acres Units (2)
- ------------------------------- ---------- ----------- -----------
Cutter Ridge future phases Franklin 10 30
Port St. Joe Millsite (3) Gulf 126 600
WaterSound next phase Walton 900 + 573
St. James Island (4) Franklin 5,404 3,440
West Bay DSAP future phases (5) Bay 9,908 5,157
----------- -----------
Total 16,348 + 9,800
=========== ===========
(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. No
RiverCamps projects were in the land-use entitlement process as of
March 31, 2005.
(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
mill site.
(4) As shown on the proposed Franklin County St. James Island Future
Land-Use Map Amendments. See St. James Island below for additional
information.
(5) See description in West Bay Sector below.
"JOE owns enough high-quality developable land to create value for
decades," said Rummell. "We invest significant resources to study our
land holdings and understand their development potential. Planning
activities continue on JOE's land holdings and are focused on
positioning our land to create shareholder value for a long time to
come."
On March 31, 2005, JOE owned approximately 820,000 acres,
concentrated primarily in Northwest Florida. These holdings included
approximately 346,000 acres within 10 miles of the coast of the Gulf
of Mexico.
St. James Island
On April 5, 2005, the Franklin County Commission adopted an
amendment to the county's comprehensive land-use plan. This includes a
revised future land-use map for St. James Island, which could add
land-use entitlements for up to 3,440 residential units on 5,404
JOE-owned acres.
"This is a significant step in the entitlements process for a
portion of the approximately 33,700 acres JOE owns in Franklin
County," said Rummell. "St. James Island is a treasure in many ways.
We recognize the unique natural aspects of Franklin County, and we are
committed to preserving and respecting the unique heritage and habitat
of this very special place."
Land-use entitlements for JOE's SummerCamp project in Franklin
County were previously approved and that project is not affected by
this comprehensive plan amendment.
"While many steps remain in a complex process, the positive vote
from the Franklin County Commission earlier this month represents a
significant benchmark," said Rummell. "We intend to plan and develop
our land in Franklin County with a high degree of respect for the
land."
Final action on these land-use entitlements is subject to a
compliance determination by the state and the expiration of challenge
periods. In addition, certain regulatory and environmental permits are
required before development can begin.
West Bay Sector
On March 22, 2005, the Panama City - Bay County Airport and
Industrial District (Airport District) approved a motion to relocate
the Panama City - Bay County International Airport to a site in
western Bay County on land currently owned by JOE. Approval by the
Airport District is one of many necessary steps required before the
proposal to relocate the airport can proceed. Other remaining steps
include the approval of the Federal Aviation Administration (FAA), the
U.S. Army Corps of Engineers and other federal, state and local
regulatory agencies as well as significant funding from federal, state
and Airport District sources. JOE has publicly committed to donate up
to 4,000 acres to support the airport relocation upon completion of
all these steps.
JOE has indicated its willingness to donate or set aside, by
conservation easement or deed transfer, enough land necessary to
mitigate for the environmental impacts of the relocation. The proposed
project potentially impacts hundreds of acres of wetlands that may
require more than 10,000 acres of mitigation. Final approval of a
mitigation plan is required of the U.S. Army Corps of Engineers and
the Florida Department of Environmental Protection. The mitigation
would initiate the creation of the West Bay Preservation Area that
would preserve thousands of acres of environmentally sensitive land,
including virtually the entire shoreline of West Bay.
In the first quarter of 2005, Enterprise Florida, Inc., a
public-private partnership responsible for leading the State of
Florida's economic development efforts, selected the proposed
relocated airport and the West Bay Sector as one of three Florida
sites to compete in a site selection process initiated by EADS, a
large European aviation, defense and space corporation. EADS is
seeking a site for an engineering facility and a proposed assembly
plant for a U.S. Air Force aerial tanker. Enterprise Florida
determined that a site at West Bay within the proposed airport could
potentially meet EADS site selection criteria. At least 70 other sites
in more than 30 states will also be considered by EADS. The current
schedule anticipates EADS selecting a site by the end of 2005.
Local and state economic development organizations, along with
JOE, have started broad marketing efforts to attract other industrial
and commercial users to West Bay.
SEGMENT RESULTS
ST. JOE TOWNS & RESORTS
Pretax income from continuing operations for St. Joe Towns &
Resorts, JOE's residential and resort development segment, was $22.7
million for the first quarter of 2005, compared with $9.1 million in
the first quarter of 2004, excluding contributions from joint
ventures.
In the first quarter of 2005, St. Joe Towns & Resorts closed 405
units and generated revenues from housing and home sites of $128.5
million, compared to 465 units and $98.3 million in revenue in the
first quarter of 2004. JOE accepted contracts for 534 units in the
first quarter of 2005, compared to 538 units in the first quarter a
year ago.
"We are pleased with the strong sales across our residential
projects," said Rummell. "Our strategy of carefully managing releases
at our resort towns is capturing the increasing values at these
communities."
"For example, the average price for home sites released and closed
at WaterSound Beach in the first quarter of 2005 was $942,000,
compared to an average price of $605,000 for similar home sites in the
previous release in last year's second quarter," said Rummell. "There
were no home site releases in WaterSound Beach in the third or fourth
quarters of 2004."
"Palmetto Trace provides another example of strong demand," said
Rummell. "Contracts were accepted at this primary home community in
Panama City Beach for 51 homes in the first quarter this year at an
average price of $237,000, compared to 42 homes at an average price of
$139,100 in the first quarter a year ago. In the first quarter of
2005, JOE received 373 reservation requests for three releases
totaling 38 homes. The average prices in the first quarter of both
2005 and 2004 reflect variations in product mix. The results from this
year contained a greater percentage of single family homes, while last
year there were more town homes."
Tables 4 and 5 summarize sales activity for St. Joe Towns &
Resorts for the first quarter of 2005, compared to the first quarter
of 2004.
Table 4
St. Joe Towns & Resorts
Sales Activity
For the Three Months
Ended March 31,
($ in millions)
2005 2004
------------------------------- -------------------------------
Number Number
of Cost of of Cost of
Units Sales Gross Units Sales Gross
Closed Revenue (1) Profit Closed Revenue (1) Profit
------ ------- ------- ------- ------ ------- ------- -------
Home
Sites 62 $23.4 $5.8 $17.6 105 $23.7 $9.3 $14.4
Homes
(2) 343 105.1 87.4 17.7 360 74.6 67.1 7.5
------ ------- ------- ------- ------ ------- ------- -------
Total 405 $128.5 $93.2 $35.3 465 $98.3 $76.4 $21.9
====== ======= ======= ======= ====== ======= ======= =======
(1) Cost of sales for home sites in the first quarter of 2005
consisted of $4.6 million in direct costs, $0.7 million in selling
costs and $0.5 million in indirect costs. Cost of sales for home
sites in the first quarter of 2004 consisted of $7.2 million in
direct costs, $1.1 million in selling costs and $1.0 million in
indirect costs. Cost of sales for homes in the first quarter of
2005 consisted of $74.8 million in direct costs, $5.4 million in
selling costs and $7.2 million in indirect costs. Cost of sales
for homes in the first quarter of 2004 consisted of $56.9 million
in direct costs, $4.0 million in selling costs and $6.2 million in
indirect costs.
(2) Homes include single family, multi-family and Private Resident
Club (PRC) units. Multi-family and PRC revenue is recognized, if
preconditions are met, on a percentage-of-completion basis. As a
consequence, revenue recognition and closings may occur in
different periods. Paseos and Rivercrest, two joint ventures 50
percent owned by JOE, are not included.
Table 5
Units Placed Under Contract
For the Three Months
Ended March 31,
2005 2004 Percentage Change
------ ------ -------------------
Home Sites 54 26 107.7 %
Homes (1) 480 512 (6.3)
------ ------ -------------------
Total 534 538 (0.7) %
====== ====== ===================
(1) Homes include single family homes, multi-family and PRC units.
Paseos and Rivercrest, two joint ventures, are not included.
Table 6 summarizes backlog at March 31, 2005 and 2004.
Table 6
Backlog (1) on
March 31,
($ in millions)
Units Revenue
----- -------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Home Sites 10 15 $1.7 $2.2
Homes 1,090 882 387.8 231.4
---------- ---------- ---------- ----------
Total 1,100 897 $389.5 $233.6
========== ========== ========== ==========
(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 $195.2
million at the end of the first quarter of 2005, compared to
$102.8 million at the end of the first quarter of 2004.
Northwest Florida
"The resort and primary residential markets in Northwest Florida
continue to be robust," said Rummell. "As we move into the spring
season for our resort towns, we expect to have significant releases of
homes and home sites at WaterColor and WaterSound Beach."
WaterColor
"WaterColor continues to produce excellent results," said Twomey.
"The eight home sites released at WaterColor during the first quarter
of 2005 were at prices ranging from $881,000 to $1,256,000, compared
with eight home sites released during the first quarter of 2004 at
prices ranging from $258,200 to $461,400. All units in both quarters'
releases were oversubscribed."
At March 31, 2005, only eight homes and eleven home sites remained
in WaterColor's first three phases that have not been released for
sale.
"With WaterColor's success, interest in phase four is strong,"
said Twomey. "There are 182 units in this final phase of WaterColor,
none of which have yet been released. Sales in phase four are expected
to begin later in the second quarter of 2005."
WaterSound Beach
In the first quarter of 2005, 12 home sites were released in
WaterSound Beach at an average price of $942,000.
Closings of the 49 multi-family units at Compass Point are
expected to begin in the third quarter and continue into early 2006.
Contracts have previously been accepted for 48 units at an average
price of $1.5 million.
The remaining 43 units in Compass Point are scheduled to be
released for sale in 2006. Construction of 22 of those units is
scheduled to begin in late 2005, while construction of the last 21
units is expected to start in early 2006.
As of March 31, 2005, 138 units, including eight beachfront home
sites, remain 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 at WaterSound West Beach are expected to start in the third
quarter of 2005 with prices comparable to WaterSound Beach, just over
one half mile away.
This is a high-end community with 199 units on the beach side of
County Road 30A. Beach access is through the adjacent Deer Lake State
Park.
WaterSound
Infrastructure construction continued during the first 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.
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.
Palmetto Trace
Palmetto Trace is a primary home community in Panama City Beach
planned for 480 units on 138 acres. As of March 31, 2005, 131 units
remained to be released and sold.
Hawks Landing
During the first quarter, JOE announced that it will develop and
sell 167 home sites at Hawks Landing in Bay County to local and
national home builders. Eighty-four of the home sites are reserved for
homebuilders based in Northwest Florida. JOE has agreed to sell the
remaining 83 home sites to D. R. Horton, Inc., a national home
builder. "We believe the combination of Horton and local builders
provides a broader range of consumer choice," said Twomey.
Hawks Landing is an 88-acre primary home community in the city of
Lynn Haven, a rapidly growing part of the region. Prices for home
sites in Hawks Landing are initially expected to start at $50,000.
Development is expected to start in the second quarter of 2005.
WindMark Beach
"WindMark Beach is being planned as a beachfront resort
destination at the high-end of the market," said Twomey. "We initially
planned to start sales in the new phases of WindMark Beach later this
year, but 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."
On March 31, 2005, all challenge periods for state environmental
permits for WindMark Beach expired. Upon receipt of remaining 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.
WindMark Beach is a proposed mixed-use development on
approximately 2,080 acres in Gulf County. Only five retail lots and
one home of the 110 units in the first 80-acre phase remain to be
sold; none of these units are currently for sale.
Bridgeport
Bridgeport is a new primary neighborhood in Port St. Joe designed
to provide this market with additional housing choices at moderate
prices for local working families. JOE has selected a local home
builder to deliver finished homes to consumers. Bridgeport consists of
36 units on 13 acres with home prices expected to start under
$100,000.
SouthWood
Contracts were accepted at SouthWood for 64 units in the first
quarter of 2005, compared to 50 units in the first quarter of 2004.
Planning continues for phase two. SouthWood is a primary home town in
Tallahassee on 3,770 acres.
SummerCamp
Pending the receipt of environmental permits and the successful
resolution of a legal challenge to one of them, sales of 52 home sites
at SummerCamp in Franklin County are expected to close in late 2005.
SummerCamp is a 499-unit development on 782 acres located
approximately 45 miles south of Tallahassee on the Gulf of Mexico.
Northeast Florida
RiverTown
Environmental permitting and predevelopment planning continues at
RiverTown in St. Johns County. Land use entitlements for RiverTown
were finalized in the first quarter of 2004 and environmental permits
are pending. Infrastructure development is expected to begin in 2005
and sales in 2006.
"JOE brings its master-planning expertise to more than 3.5 miles
of frontage on the beautiful St. Johns River," said Twomey. "Planned
for 4,500 units on 4,170 acres, we believe that RiverTown will be a
significant performer for us in the years to come."
St. Johns Golf & Country Club
St. Johns Golf & Country Club is a primary residential community
located in St. Johns County, the ninth fastest growing county in the
nation, according to the U.S. Census Bureau.
"Demand for homes in St. Johns Golf & Country Club remained strong
in the first quarter," said Twomey. "JOE accepted contracts in the
first quarter of 2005 for 16 homes at an average price of $460,000,
compared to 26 homes at an average price of $355,800 in the first
quarter of 2004."
Central Florida
Victoria Park
JOE accepted 108 contracts in Victoria Park in the first quarter
of 2005, up 57 percent over the 69 contracts for the same quarter in
the previous year. The average price of contracted homes increased to
$275,000 in the first quarter this year, compared with $226,800 in the
first quarter last year.
During the first quarter, Victoria Park was selected as the site
of a Southern Living Idea House to be featured in the magazine's
August issue. The home will be open to the public for tours during the
summer of 2005.
"Victoria Park performed very well in the first quarter of 2005,"
said Twomey. "We are seeing demand increase as more of the community
amenities are completed. As a result, we are accelerating our
development pace."
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 4,000 residences built among
parks, lakes and conservation areas.
Southwest Florida
Perico Island
"Perico Island is being designed as an environmentally sensitive
community that we expect will set a new standard for quality in this
Southwest Florida market," said Twomey. "Our development plan for
Perico Island is a one-of-a-kind design solution specifically for this
unique property. Approximately 80 percent of the property is to remain
as open space with two lakes and an exterior perimeter of native
vegetation. This project's small footprint stands in stark contrast to
other developments in the area."
"We intend to position Perico Island as an upscale community and
plan to use our place-making expertise to establish Perico Island as a
highly amenitized destination," said Twomey. "We believe that Perico
Island can be an important source of future income."
North and South Carolina
For the first quarter of 2005, Saussy Burbank, JOE's homebuilder
based in Charlotte, N.C., closed 132 homes and accepted contracts for
178 homes, compared to 147 closings and 197 contracts in the first
quarter of 2004.
Joint Venture Communities
Celebration, Artisan Park
JOE accepted contracts for 41 condominiums in Artisan Park in the
first quarter at an average price of $433,700, compared to 26
condominiums at an average price of $272,900 in the same period last
year. In the first quarter of 2005, we accepted contracts on three
single-family home sites and 14 single-family homes at average prices
of $290,000 and $589,300, respectively, compared to six home sites and
56 single-family homes at average prices of $150,000 and $418,400,
respectively, for the first quarter of 2004.
"Artisan Park is performing well with the pace of sales and
pricing running well ahead of our expectations," said Twomey. "We are
increasing our production capability to meet the demand." Artisan Park
is one of the last residential neighborhoods to be developed at
Disney's town of Celebration near Orlando. JOE owns 74 percent of the
joint venture developing Artisan Park and manages the project.
Rivercrest and Paseos
Rivercrest is a 1,382-unit primary residential community located
just outside of Tampa. "We continue to see very strong sales at
Rivercrest," said Twomey. JOE accepted contracts for 195 homes at an
average price of $195,600 in the first quarter this year, compared to
158 homes at an average price of $155,300 in the first quarter last
year. At March 31, 2005, there were 102 units remaining to be released
and sold at Rivercrest.
Paseos is a 325-unit primary residential community in Jupiter. At
the close of the first quarter of 2005, only two units remained for
sale at Paseos. JOE accepted a contract for one home for $773,000 in
the first quarter of 2005.
JOE owns 50 percent of the joint ventures developing Rivercrest
and Paseos and manages each of the projects.
Table 7 summarizes the sales activity at various residential
communities for the first quarter of 2005 and the first quarter of
2004.
Table 7
St. Joe Towns & Resorts
Sales of Homes and Home Sites
For the Three Months Ended March 31,
($ in thousands)
2005
----------------------------------------
Units Avg. Contracts Avg.
Closed Price Accepted (1) Price
-------- -------- ----------- ----------
WaterColor
Home Sites 8 $1,074.6 8 $1,074.6
Single/Multi-Family Homes 0 N/A 0 N/A
PRC Shares 1 285.0 1 285.0
WaterSound Beach
Home Sites 12 941.8 12 941.8
Single Family Homes 0 N/A 0 N/A
Multi-Family Homes 0 N/A 0 N/A
Palmetto Trace
Single Family Homes 36 153.0 51 237.0
The Hammocks
Home Sites 0 N/A 0 N/A
Single Family Homes 22 158.9 27 138.9
WindMark Beach
Home Sites 0 N/A 0 N/A
Bridgeport
Home Sites 10 17.7 10 17.7
SouthWood
Home Sites 10 113.4 8 134.5
Single Family Homes 51 231.8 56 262.4
St. Johns G & CC
Home Sites 8 60.6 0 N/A
Single Family Homes 24 371.9 16 460.0
Hampton Park/James Island
Single Family Homes 7 380.0 2 555.0
Victoria Park
Home Sites 11 100.8 13 134.9
Single Family Homes 64 239.3 95 275.0
Artisan Park (2)
Home Sites 3 290.0 3 290.0
Single Family Homes 6 469.0 14 589.3
Multi-Family Homes 0 N/A 41 433.7
Paseos (2)
Single Family Homes 26 433.3 1 773.0
Rivercrest (2)
Single Family Homes 96 167.9 195 195.6
Saussy Burbank
Single Family Homes 132 239.9 178 236.6
2004
----------------------------------------
Units Avg. Contracts Avg.
Closed Price Accepted (1) Price
-------- -------- ----------- ----------
WaterColor
Home Sites 60 $272.8 9 $401.1
Single/Multi-Family Homes 5 777.9 4 833.0
PRC Shares 0 N/A 10 196.0
WaterSound Beach
Home Sites 11 375.3 0 N/A
Single Family Homes 0 N/A 0 N/A
Multi-Family Homes 50 1,146.3 7 1,498.6
Palmetto Trace
Single Family Homes 10 178.6 42 139.1
The Hammocks
Home Sites 0 N/A 0 N/A
Single Family Homes 21 156.5 26 153.1
WindMark Beach
Home Sites 0 N/A 0 N/A
Bridgeport
Home Sites 0 N/A 0 N/A
SouthWood
Home Sites 10 82.8 8 82.1
Single Family Homes 53 220.8 42 240.9
St. Johns G & CC
Home Sites 12 74.9 0 N/A
Single Family Homes 22 320.8 26 355.8
Hampton Park/James Island
Single Family Homes 17 347.2 10 387.5
Victoria Park
Home Sites 6 84.8 3 63.8
Single Family Homes 31 208.6 66 226.8
Artisan Park (2)
Home Sites 6 150.0 6 150.0
Single Family Homes 4 363.5 56 418.4
Multi-Family Homes 0 N/A 26 272.9
Paseos (2)
Single Family Homes 32 378.0 76 441.6
Rivercrest (2)
Single Family Homes 55 147.9 158 155.3
Saussy Burbank
Single Family Homes 147 204.7 197 219.9
(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.
Table 8 summarizes the units sold from project inception through
March 31, 2005 at various St. Joe Towns & Resorts residential projects
in Florida.
Table 8
St. Joe Towns & Resorts
Units Sold in Florida Since Project Inception (1)
Through March 31, 2005
Maximum Contracts
Units (2) Closed Units Accepted (3)
---------- ------------ ------------
WaterColor 1,140 810 11
WaterSound Beach 511 324 48
Palmetto Trace/The Hammocks 937 616 143
WindMark Beach 1,662 104 0
Bridgeport 36 10 0
SouthWood 4,770 765 157
SummerCamp 499 0 0
St. Johns Golf & Country Club 799 602 78
Hampton Park/James Island 523 517 4
Victoria Park 4,000 579 212
Artisan Park (4) 616 100 267
Paseos (4) 325 165 158
Rivercrest (4) 1,382 637 643
---------- ------------ ------------
Total 17,200 5,229 1,721
========== ============ ============
(1) Units include home sites, single family and multi-family units and
PRC shares, with each PRC share interest treated as one-eighth of
a unit.
(2) Maximum units represent the number of units with land-use
entitlements. 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. The actual number of units to be constructed at full
build-out may be lower than the number entitled.
(3) Contracts accepted, but not closed, at March 31, 2005.
(4) 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 Real Estate
Services Company, the Company's commercial real estate services unit.
Pretax income from continuing operations from the commercial segment
was $0.4 million for the first quarter of 2005, compared with $1.1
million in the same quarter of 2004.
St. Joe Commercial
For the first quarter of 2005, St. Joe Commercial had pretax
income from continuing operations of $1.3 million, compared to $1.2
million in the first quarter a year ago.
"Our commercial development division turned in a solid first
quarter with strong commercial land sales in Northwest Florida," said
Rummell. "During the first quarter of 2005, JOE sold eight Northwest
Florida commercial land parcels, totaling 41 acres."
"First quarter commercial land sales were strong with good pricing
driven by increased sales at our commerce and business parks," said
Twomey. "Commercial land sales averaged $114,000 per acre in 2005's
first quarter, compared to $32,000 per acre in the first quarter a
year ago. These prices reflect both increasing pricing and the
different blends of the commercial land sold each quarter, which
varied in its composition of retail, light industrial, multi-family
and other commercial uses."
"We are making progress toward parity in Northwest Florida
commercial real estate pricing with other regions of the state," said
Twomey. "We are seeing strengthening prices across the range of
commercial uses including retail, light industrial and multi-family."
Table 9 summarizes JOE's commercial land sales in Northwest
Florida for the first quarters of 2005 and 2004.
Table 9
St. Joe Commercial Northwest Florida Land Sales
Average
Number of Gross Sales Price Price/Acre
Land Sales Acres Sold (in thousands) (in thousands)
- ------------- --------- ---------- ----------------- --------------
Quarter Ended March 31, 2005
Unimproved 1 15 $808 $55
Improved 7 26 3,820 147
--------- ---------- ----------------- --------------
Total/Average 8 41 $4,628 $114
========= ========== ================= ==============
Quarter Ended March 31, 2004
Unimproved 5 74 $2,343 $32
Improved 2 8 250 31
--------- ---------- ----------------- --------------
Total/Average 7 82 $2,593 $32
========= ========== ================= ==============
Northwest Florida
Retail
"Interest from large national retailers in Northwest Florida, and
Panama City Beach in particular, continued to be strong in the first
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."
Business Parks
During the first quarter of 2005, pricing increased in our
business parks. In the SouthWood Business Park, a 3.7-acre parcel was
sold to a financial institution for $1.2 million, or $321,000 per
acre. Three parcels remain with one under contract. Approximately 550
jobs are currently projected for the park.
At the Nautilus Court Business Park in Panama City Beach, a
2.6-acre parcel was sold to an office user for $1.0 million or
$370,000 per acre.
Construction continued in the first 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 a full-service health and fitness center. The buildings,
which are currently 87 percent leased, were designed to accommodate
offices, restaurants and other retail users.
Commerce Parks
During the first quarter, commercial land sales within JOE's
commerce parks totaled $1.7 million, compared to $250,000 in the first
quarter of 2004. JOE has five commerce parks operating or under
development in five Northwest Florida counties.
"We continued to see strong demand and pricing in the first
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."
Our newest commerce park, South Walton Commerce Park, opened in
the fourth quarter of 2004. Two parcels, priced at $226,000 and
$308,000 per acre, closed in the first quarter.
At Beach Commerce Center, demand for office and light industrial
land continues to be strong. Two parcels closed at prices ranging from
$60,000 to $85,000 per acre. Additionally, there are currently seven
parcels under contract and scheduled to close in the second and third
quarters of 2005. Pricing on these contracts ranges from $80,000 to
$110,000 per acre. A parcel with frontage, but no direct access to
U.S. 98, is priced at approximately $436,000 per acre.
At Port St. Joe Commerce Park, the last parcel in the first phase
was sold at a price of $45,000 per acre in the first quarter of 2005,
compared to $30,000 per acre for a similar parcel in the first quarter
of 2004. Construction on the second phase has started with closings
scheduled to begin later in 2005. Current pricing begins at $65,000
per acre.
Table 10 summarizes the status of JOE's commerce parks, existing
and under construction, throughout Northwest Florida as of March 31,
2005.
Table 10
Commerce Parks
March 31, 2005
Net Acres Sold/
Saleable Under Current Asking
Commerce Parks (1) County Acres Contract Price Per Acre
- ---------------------- ------ -------- ---------- ----------------
South Walton Commerce Walton 39 10 $275,000-600,000
Beach Commerce Bay 161 132 100,000-500,000+
Beach Commerce II Bay 115 -- 80,000-130,000
Port St. Joe Commerce Gulf 58 58 Sold Out
Port St. Joe Commerce II Gulf 40 -- 65,000-135,000
Hammock Creek Commerce Gadsden 114 27 35,000-150,000
Airport Commerce Leon 40 -- 65,000-260,000
------- ----------
Total 567 227
======= ==========
(1) Includes existing commerce parks, as well as commerce parks under
construction.
Multi-Family
As of March 31, 2005, JOE had three parcels for multi-family
development under contract, totaling 44 acres at an average price of
approximately $121,000 per acre. Another 15-acre parcel was closed
during the quarter for $0.8 million or $55,000 per acre.
"As Northwest Florida grows, multi-family residential products are
an increasingly important housing option for this region," said
Twomey. "This type of housing is an important aspect of the Northwest
Florida economy as new workers arrive in the marketplace."
Investment Property Portfolio
As of March 31, 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 quarter
compared to year-end 2004.
Table 11 summarizes JOE's investment property portfolio of
commercial buildings as of March 31, 2005.
Table 11
Investment Portfolio of Commercial Buildings
March 31, 2005
Number of Net Rentable Leased
Location Properties Square Feet Percentage
- -------------------- ----------- ------------- -------------
Florida
Tampa 5 489,000 84 %
Orlando 2 317,000 68
Jacksonville 1 136,000 57
Northwest Florida 3 156,000 87
Atlanta 8 1,289,000 89
Washington, D.C. 1 119,000 97
Charlotte 1 158,000 100
Richmond 2 129,000 96
----------- ------------- -------------
Total 23 2,793,000 85 %
=========== ============= =============
Development Property Portfolio
Table 12 summarizes the development property portfolio as of March
31, 2005.
Table 12
Development Portfolio of Commercial Buildings
March 31, 2005
Market Ownership Net Rentable Leased
Property Location Percentage Square Feet Percentage
- ------------------- ---------------- ---------- ----------- ----------
Deerfield Commons I Atlanta 40 % 122,000 95 %
Nextel Partners II Panama City Beach 100 30,000 100
----------- ----------
Total 152,000 96 %
=========== ==========
Land Positions
During the first quarter of 2005, JOE sold one commercial parcel
located in Northern Virginia totaling 19 acres for gross proceeds of
$7.1 million. Our current portfolio of commercial land held for
investment includes 57 acres in Houston, Atlanta, Jacksonville and
Orlando.
Additionally, early in the second quarter of 2005, JOE sold 207
acres near the ship channel in the Port of Houston for $2.8 million.
This parcel was originally acquired in 1946.
Advantis
Pretax loss from continuing operations in the first quarter of
2005 was $0.6 million before elimination of inter-company profits of
$0.3 million. Advantis had pretax income from continuing operations of
$0.3 million for the first quarter of 2004, before elimination of
inter-company profits of $0.4 million.
"The first quarter of each year is traditionally the most
difficult in the commercial real estate services business," said
Twomey. "The Advantis pipeline of business looks solid, and we are
optimistic for the year."
ST. JOE LAND COMPANY
St. Joe Land Company had pretax income from continuing operations
of $12.1 million in the first quarter of 2005, compared with $18.8
million in the first quarter of 2004.
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. Other potential RiverCamps locations in Northwest
Florida are being evaluated.
RiverCamps on Crooked Creek
"We have seen strong pricing at RiverCamps on Crooked Creek," said
Twomey. "Demand has remained strong as the average prices of home
sites and the number of units released have increased. Each release is
a blend of home site types from inland home sites, those with marsh
views and others on the bay front."
Table 13 summarizes home site releases at RiverCamps on Crooked
Creek.
Table 13
Home Site Releases
RiverCamps on Crooked Creek
Potential Number Average
Release Date Buyers of Units Price Range Price
- ------- ------------ --------- -------- ----------------- ----------
One October 2003 314 23 $84,000-249,000 $150,000
Two July 2004 542 27 129,000-750,000 226,200
Three January 2005 281 37 148,500-849,500 276,800
Four (1) April 2005 N/A 47 174,500-1,000,000 339,300
(1) Release four closes on April 28, 2005. Price range is offering
price.
An increasing number of RiverCamps buyers are coming from outside
the local market. Buyers from beyond a 120-mile radius of RiverCamps
on Crooked Creek increased from 48 percent for RiverCamps' first
release in 2003 to 60 percent for the second release in 2004, and to
70 percent for the third release in the first quarter of 2005.
With the regulatory permits required to complete the project in
hand, the pace of infrastructure development has accelerated with 190
home sites currently under development. The RiverCamps' "Entry Barn"
is scheduled to be completed in May. Two RiverCamps prototype cabins
are planned to be completed in late 2005. Construction of the boat
launch and dock facility, ponds, nature trails and boardwalks is
scheduled to start in the second quarter, and construction of the
RiverHouse, a compound of several community amenities, is set to start
in the third quarter.
RiverCamps on Crooked Creek, located in Western Bay County, is
entitled 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
During the first quarter, planning continued for RiverCamps on
Sandy Creek. Plans initially call for approximately 600 units on
approximately 6,000 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 RiverCamps on Sandy Creek
in 2006 or 2007.
Rural Land Sales
In the first quarter of 2005, JOE sold 6,930 acres of rural land
at an average price of $1,942 per acre, compared to 7,968 acres in the
same quarter a year ago for an average price of $2,836 per acre. In
the first quarter of 2005, a 2,900-acre parcel was sold to the City of
Panama City Beach for use as a spray field for $3.8 million, or $1,310
per acre. First quarter results from last year included the sale of
one large parcel of 866 acres for $10.0 million, or $11,542 per acre.
Similar high-value parcels, which could have been sold this year, have
been withdrawn from the market in 2005 for higher-value use and
execution in future years.
Woodlands
Woodlands are rural real estate products consisting of up to 1,000
acres in North and Northwest Florida designed for outdoor recreation
and sold with little or no additional entitlements or amenities for
residential use.
"Over the past year, we have seen increasing demand from buyers
from beyond a 120-mile radius," said Rummell. "An increasing number of
buyers, coming primarily from South Florida, Atlanta and Birmingham,
have allowed prices to strengthen. For example, buyers from beyond the
120-mile radius grew from 15 percent in 2002 to 25 percent in 2003, to
31 percent in 2004 and to 48 percent for the first quarter of 2005.
Our marketing strategy is being adjusted to further broaden this
customer pool."
"In order to capture more of the growing values in Northwest
Florida land, we are more focused on sales to the end user, rather
than buyers who intend to subdivide parcels for resale," said Rummell.
"This strategy shift to more retail sales to buyers who intend to use
the land for a specific personal use is expected to continue to
improve per acre pricing."
During the first quarter, contracts were accepted for two home
sites in RiverSide at Chipola, a 10-unit gated community on the
Chipola River in Calhoun County, at $17,125 per acre. Current plans
call for the release of two additional home sites later in 2005.
Two well-located parcels with development potential were sold in
Bay County during the first quarter of 2005. These parcels are too
small for development by our land division. A 36-acre parcel was sold
for $42,250 per acre and a 29-acre parcel was sold for $27,000 per
acre.
Farmsteads, Ranches, Other Land Products
Farmsteads
JOE's farmsteads include large home sites with room for a variety
of outdoor activities. To be developed in a number of locations in
Northwest Florida, farmsteads are being designed to feel 'old farm and
equestrian,' while having proximity to suburban services for primary
residences.
"In developing the RiverCamps concept years ago, JOE discovered
significant demand for a wide range of personal places to escape,"
said Rummell. Each farm site would include a home site for a main
farmhouse along with sites for other optional buildings such as barns,
guest houses and stables.
Predevelopment planning started in the first quarter of 2005 at
the first location near Tallahassee expected to total approximately
1,000 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. Farm-hand services are being
considered as an amenity. Sales of farmsteads are expected to begin in
2006.
Ranches
Predevelopment planning continued in the first quarter of 2005 on
the initial Ranch properties in several locations in Northwest
Florida. Ranches are expected to consist of 75 to 150-acre sites
located within a 1,000 to 3,000-acre community. Ranch-hand services
are being considered as an amenity. Ranches are being designed
primarily as second-homes for outdoor enthusiasts.
"Ranches are being planned to offer a wide range of recreational
opportunities, with some shared sporting areas," said Rummell. "Many
may be on or near rivers and land suited for wildlife habitation.
Improvements include clearing, fencing, road stabilization and entry
features."
Initial pricing for Ranch parcels is expected to range from $4,500
to $7,500 per acre. Sales of Ranches are expected to begin in 2006.
FORESTRY
Pretax income from continuing operations for the forestry segment
totaled $2.0 million for the first quarter of 2005 compared with $2.7
million in the first quarter of 2004.
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 $1.8 million in the first quarter of 2005, compared to an expense
of $2.1 million in the first quarter of 2004.
Table 14 summarizes other income (expense) for the first quarters
of 2004 and 2005.
Table 14
Other Income (Expense)
(in millions)
Quarter Ended March 31,
-----------------------
2005 2004
----------- -----------
Dividend and interest income $0.3 $0.1
Interest expense (3.1) (2.9)
Other 1.0 0.7
----------- -----------
Total $(1.8) $(2.1)
=========== ===========
Table 15
Summary Balance Sheet
(in millions)
March 31, March 31,
2005 2004
----------- -----------
Assets
Investment in real estate $989.6 $919.7
Cash and cash equivalents 43.4 51.3
Prepaid pension asset 95.0 93.2
Property, plant and equipment 34.5 36.3
Other assets 266.2 154.7
----------- -----------
Total assets $1,428.7 $1,255.2
=========== ===========
Liabilities and Stockholders' Equity
Debt $444.8 $379.1
Accounts payable, accrued liabilities 204.7 157.2
Deferred income taxes 267.5 238.2
----------- -----------
Total liabilities 917.0 774.5
Minority interest 11.9 6.0
Total stockholders' equity 499.8 474.7
----------- -----------
Total liabilities and stockholders' equity $1,428.7 $1,255.2
=========== ===========
Table 16
Debt Schedule
(in millions)
March 31, March 31,
2005 2004
----------- -----------
Revolving debt facility $50.0 $45.0
Medium term notes 257.0 175.0
Acquisition and other debt 14.9 15.3
Other collateralized/specific asset related
debt 122.9 143.8
----------- -----------
Total debt $444.8 $379.1
=========== ===========
Table 17
Consolidated Statement of Income
($ in millions except per share amounts)
Quarter Ended March 31,
-----------------------
2005 2004
----------- -----------
Revenues:
Real estate sales $158.1 $135.7
Realty revenues 25.5 19.1
Timber sales 8.0 9.9
Rental revenue 12.3 9.4
Other revenues 8.2 7.4
----------- -----------
Total revenues 212.1 181.5
=========== ===========
Expenses:
Cost of real estate sales 104.9 90.5
Cost of realty revenues 17.9 10.7
Cost of timber sales 5.2 6.0
Cost of rental revenue 4.5 3.9
Cost of other revenues 8.0 6.5
Other operating expenses 24.1 24.0
Corporate expense, net 11.9 9.2
Depreciation and amortization 10.4 8.4
----------- -----------
Total expenses 186.9 159.2
Operating profit 25.2 22.3
Other income (expense) (1.8) (2.1)
----------- -----------
Pretax income from continuing operations 23.4 20.2
Income tax expense (9.3) (8.0)
Minority interest expense (0.8) (0.1)
Equity in income of unconsolidated affiliates 1.9 0.7
Discontinued operations, net of tax -- 0.2
----------- -----------
Net income $15.2 $13.0
=========== ===========
Net income per diluted share $0.20 $0.17
=========== ===========
Weighted average diluted shares
outstanding 76,701,737 77,731,088
Table 18
Quarterly Revenues
By Segment
(in millions)
Quarter Ended March 31,
-----------------------
2005 2004
----------- -----------
Towns & Resorts $136.8 $105.7
Commercial real estate 49.5 43.3
Land sales 17.8 22.6
Forestry 8.0 9.9
----------- -----------
Total revenues $212.1 $181.5
=========== ===========
Table 19
Quarterly Segment Pretax Income
From Continuing Operations
(in millions)
Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31
2005 2004 2004 2004 2004 2003 2003 2003 2003
------ ------ ------ ------ ------ ------ ------ ------ ------
Towns &
Resorts $22.7 $24.7 $31.8 $34.4 $9.1 $13.2 $32.1 $23.0 $12.4
Com-
mercial
real
estate 0.4 18.0 2.9 1.0 1.1 5.4 (1.5) (11.5) 2.9
Land
sales 12.1 16.5 11.6 10.3 18.8 33.2 14.8 12.8 17.6
Forestry 2.0 2.1 1.9 2.4 2.7 2.3 1.6 2.2 1.9
Corporate
and
other (13.8) (17.0) (13.6) (11.9) (11.5) (11.6) (11.9) (10.7) (8.1)
------ ------ ------ ------ ------ ------ ------ ------ ------
Pretax
income
from
con-
tinuing
oper-
ations $23.4 $44.3 $34.6 $36.2 $20.2 $42.5 $35.1 $15.8 $26.7
====== ====== ====== ====== ====== ====== ====== ====== ======
Conference Call Information
JOE will host an interactive conference call to review the
Company's results for the quarter ended March 31, 2005 and discuss
guidance for 2005 on Wednesday, April 20, 2005, at 10:00 a.m., Eastern
Daylight Time.
To participate in the call, please phone 800-762-6067 (for
domestic calls from the United States) or 480-629-9566 (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 778035. 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",
"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 product 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.
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;
-- whether potential residents or tenants consider our properties
attractive;
-- 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;
-- how well we manage our properties;
-- 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. We have
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
risks. New information, future events or risks may cause the
forward-looking events we discuss in this earnings release not to
occur.
Copyright 2005, 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. "Southern Living" is a registered
trademark of Southern Living, Inc.
CONTACT: The St. Joe Company, Jacksonville
JOE Media Contact: Jerry M. Ray, 904-301-4430
or
JOE Investor Contact: Brad Slappey, 904-301-4302