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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) February 2, 2005
--------------------------------
The St. Joe Company
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(Exact Name of Registrant as Specified in Its Charter)
Florida
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(State or Other Jurisdiction of Incorporation)
1-10466 59-0432511
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(Commission File Number) (IRS Employer Identification No.)
245 Riverside Avenue, Suite 500, Jacksonville, FL 32202
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(Address of Principal Executive Offices) (Zip Code)
(904) 301-4200
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The Company issued a Press Release dated February 2, 2005, announcing
the Company's financial results for the year ended December 31, 2004.
A copy is furnished with this Form 8-K as Exhibit 99.1 and is
incorporated by reference.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press Release dated February 2, 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: February 2, 2005 By: /s/ Michael N. Regan
---------------------
Name: Michael N. Regan
Title: Senior Vice President
Exhibit 99.1
The St. Joe Company Reports Full Year 2004 Net Income of $1.17
Per Share, an Increase of 19.4 Percent; Fourth Quarter
Net Income Was $28.1 Million, or $0.37 Per Share
JACKSONVILLE, Fla.--(BUSINESS WIRE)--Feb. 2, 2005--The St. Joe
Company (NYSE:JOE):
Milestones Reached in 2004 to Shape JOE's Future:
Land-Use Entitlements Received for JOE's Next Generation of Towns
& Resorts
West Bay Sector Receives Land-Use Approvals
JOE Completes Pier Park Land Sale
RiverCamps Demonstrates Early Success
duPont Trust's JOE Ownership Now 7.5 Percent
The St. Joe Company (NYSE:JOE) today announced that its Net Income
for the full year 2004 was $90.1 million, or $1.17 per share, compared
with $75.9 million, or $0.98 per share, for the full year 2003. Net
Income for 2004 included after-tax conservation land sales gains of
$1.5 million, or $0.02 per share, compared to $22.7 million, or $0.29
per share, for the full year 2003. The results for 2003 also included
an after-tax non-cash asset impairment charge of $8.8 million, or
$0.11 per share.
Fourth quarter 2004 Net Income was $28.1 million, or $0.37 per
share, compared with $28.7 million, or $0.37 per share, for the fourth
quarter of 2003. Net Income in the fourth quarter of 2004 had no
conservation land sales, compared to after-tax conservation land sale
gains of $9.0 million, or $0.12 per share, in the fourth quarter of
2003. All per share references in this release are presented on a
fully diluted basis.
JOE Turns in an Excellent 2004
"By every measure, 2004 was an excellent year for JOE and our
shareholders," said Peter S. Rummell, chairman and CEO of JOE. "We
delivered significant value to shareholders, and we made progress on
several key strategic initiatives that will enhance JOE's ability to
deliver value for many years to come."
"During 2004, we saw the culmination of nearly eight years of
effort to transform JOE from an aging industrial conglomerate to a
dynamic place-maker," said Rummell. "Our success can only partially be
measured in the value we have created thus far. We won't be able to
calculate its full measure for years. Our efforts have resulted in a
number of significant accomplishments that set the stage for JOE's
next wave of value creation. I would like to highlight five of them."
"First, JOE completed a Development of Regional Impact (DRI)
land-use entitlement for WindMark Beach in Gulf County for 1,662 units
on 2,080 acres," said Rummell. "In addition, a DRI was approved for
RiverTown in St. Johns County for 4,500 units on 4,170 acres. Land-use
entitlements were also received for WaterSound West Beach in Walton
County with 197 units on 62 acres and for Perico Island in Manatee
County with 686 units on 352 acres. These projects constitute a
significant portion of JOE's next generation of value creation."
"Second, the legal challenges to the land-use changes in the West
Bay Sector for 20,556 acres of JOE land and for the proposed
relocation of the Panama City-Bay County International Airport were
resolved," said Rummell. "At year's end, the Federal Aviation
Administration (FAA) released its draft Environmental Impact
Statement, which took a favorable view of relocation. While other
regulatory steps remain before a final decision is reached on the
relocation of the airport, we expect the FAA to issue a Record of
Decision on the Environmental Impact Statement by the end of 2005."
"Third, during 2004, JOE closed its most significant commercial
transaction to date," said Rummell. "Simon Property Group, one of the
nation's largest retail developers, purchased 93 acres from JOE and
entered into a development agreement at Pier Park in Panama City
Beach. News of the transaction has attracted significant interest from
national and regional commercial users and raised Northwest Florida's
profile to new heights."
"Fourth, the early success of RiverCamps illustrates our strategy
for pushing value inland," said Rummell. "The Southern Living Idea
House at RiverCamps on Crooked Creek defines the RiverCamps
experience. But just as important, the research and work that went
into creating RiverCamps has spawned new product concepts including
Farmsteads, Ranches and Preserves."
"Fifth, the Alfred I. duPont Trust (the Trust) completed the
diversification plan it began in 1997, reducing its share of ownership
in JOE from 69.8 percent to approximately 7.5 percent today," said
Rummell. "This marked an important moment in JOE history and increased
our common stock liquidity."
"Combined, these milestones have not only transformed JOE, they
have also significantly advanced the regional transformation now
underway in Northwest Florida," said Rummell. "Few would have believed
this possible eight years ago. Today, Northwest Florida is well on its
way to becoming the 'next great place.'"
A Strong Fourth Quarter for JOE
"JOE ended 2004 with a strong fourth quarter," said Rummell.
"Included in the results for the fourth quarter was the proceeds from
the sale of approximately 93 acres at Pier Park in Panama City Beach
to the Simon Property Group for $26.5 million, or approximately
$286,000 per acre."
"St. Joe Towns & Resorts performed well during the fourth quarter
of 2004 - and for the entire year," said Rummell. "We made a strategic
decision to carefully manage inventories at our beachfront
communities, and consequently, we released no new inventory in the
fourth quarter of 2004. Our primary residential communities continued
to perform well."
"St. Joe Land turned in another solid quarter with a good mix of
land sales," said Rummell. "In addition, at RiverCamps on Crooked
Creek, JOE closed 41 units with prices ranging from $129,000 to
$595,000, plus one bay-front home site priced at $750,000. JOE is well
positioned in 2005 to begin extending its RiverCamps product to new
sites and to bring to market a range of new rural land products."
"Overall, we saw solid contributions from all our business
segments during the fourth quarter of 2004 and each enters 2005 in a
position of strength," said Rummell.
OUTLOOK
Full-Year Expectations for 2005
"JOE expects to have another strong year in 2005 with earnings per
share, excluding gains from conservation land sales, to be in the
range of $1.35 to $1.50 per share," said Kevin M. Twomey, JOE's
president. "We believe JOE's major segments will produce good results
in 2005 as we bring a broad array of real estate products to market.
We are well positioned in Florida, a state with one of the nation's
strongest economies, where we have significant demographic and
geographic advantages."
"The first quarter is traditionally our slowest quarter of the
year," said Twomey. "We expect the first quarter of 2005 to be in line
with our performance in the first quarter of 2004."
Towns & Resorts
"We expect JOE's Towns & Resorts segment to drive the increase in
earnings for 2005," said Twomey. "WaterColor and WaterSound Beach
combined are expected to deliver fewer units than in 2004 but produce
nearly as much earnings. Several existing projects, notably Artisan
Park, Victoria Park, Palmetto Trace, Rivercrest and Paseos, should see
earnings increases. Three new projects, WindMark Beach phase two,
SummerCamp and WaterSound West Beach, are expected to generate income
in 2005, subject to the receipt of necessary environmental permits."
"Notably, our expectations for 2005 do not include sales at three
major entitled projects we expect to bring to market in 2006:
WaterSound phase one, RiverTown and Perico Island," said Twomey.
Commercial Real Estate
"During 2005, our commercial real estate segment is expected to
continue adding value through development and land sales in Northwest
Florida and from rental income from our investment property
portfolio," said Twomey. "Results from this segment are expected to be
similar to 2004's level, despite the fact that we do not expect to
replicate the gains from building sales in 2005."
St. Joe Land Company
"We expect St. Joe Land Company to deliver modestly higher income
in 2005, with a substantially different mix of earnings sources," said
Twomey. "We have decided not to sell two large tracts of land, which
we had initially planned to sell in 2005 and 2006, because we see
significantly greater profit opportunity from this land through future
development. At the same time, we expect our RiverCamps products to
deliver more sales with increased unit pricing."
DIVIDENDS AND STOCK REPURCHASE PROGRAM
A quarterly cash dividend of $0.14 per share of common stock was
paid on December 31, 2004 to shareholders of record at the close of
business on December 15, 2004. For the year, JOE paid $0.52 per share
in dividends on its common stock.
During the fourth quarter of 2004, the company expended an
aggregate of $30.0 million for dividends and the acquisition of its
shares. JOE acquired 353,965 of its shares at a cost of $19.4 million,
an average price of $54.76 per share, during the fourth quarter. Of
these amounts, 339,700 shares were acquired through open market
purchases for $18.7 million (an average of $54.95 per share) and
14,265 shares of stock, having a value of $0.7 million, were
surrendered by company executives as payment for the strike price and
taxes due on exercised stock options. For the full year, the company
expended a total of $144.5 million for dividends and the acquisition
of its shares.
Table 1 summarizes the company's stock repurchase activity from
1998 through December 31, 2004.
Table 1
Stock Repurchase Activity
Through December 31, 2004
Shares
------------------------------------------
Purchased Purchased Total Cost
From From Surren- (in Avg
Period Public Trust (1) dered Total millions) Price
- -------- ------------------------------------------ ---------- -------
1998 2,574,200 -- 11,890 2,586,090 $55.5 $21.41
1999 2,843,200 -- 11,890 2,855,090 69.5 24.31
2000 3,101,566 415,500 -- 3,517,066 80.2 22.78
2001 3,485,400 3,585,900 58,550 7,129,850 176.0 24.67
2002 2,583,700 2,586,206 256,729 5,426,635 157.6 29.03
2003 1,469,800 1,085,374 812,802 3,367,976 102.9 30.55
2004 1,298,200 263,365 884,633 2,446,198 105.0 42.90
------------------------------------------ ---------- -------
Total/
Weighted
Average 17,356,066 7,936,345 2,036,494 27,328,905 $746.8 $27.30
========================================== ========== =======
(1) We previously repurchased shares from the Trust from time to time
on a proportionate basis to shares repurchased on the open market.
This program with the Trust was discontinued as of August 9, 2004.
On December 31, 2004, 75,893,250 JOE shares were outstanding. The
number of weighted-average diluted shares in the fourth quarter of
2004 was 76,635,116. On December 31, 2004, approximately $123.5
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. Our benchmark for this
program in 2005 is $125 million to $175 million," said Twomey.
ENTITLEMENTS
"JOE's pipeline of land-use entitlements continues to build," said
Rummell. "The management of the entitlements process has become a
clear strategic focus and a core competency for us. We continue to
improve our understanding of our land and to find higher and better
uses for it."
At December 31, 2004, JOE owned approximately 820,000 acres,
concentrated primarily in Northwest Florida. These holdings included
approximately 352,000 acres within 10 miles of the coast of the Gulf
of Mexico.
Land-Use Entitlements
JOE has a broad range of land-use entitlements in hand or in
various stages of the approval process for primary residential, resort
and RiverCamps in Northwest Florida and other high-growth regions of
the state.
Table 2 summarizes JOE's Florida residential, resort and
RiverCamps projects with land-use entitlements at December 31, 2004.
Table 2
Summary of Land-Use Entitlements (1)
JOE Residential, Resort and RiverCamps Projects in Florida
December 31, 2004
Units
Total Maximum Sold/Under
Project Project Contract As
Project County Acres Units(1) of 12/31/04
Artisan Park (2) Osceola 160 616 309
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 138 480 298
Paseos (2) Palm Beach 175 325 322
Perico Island (3) Manatee 352 686 0
Pier Park (Residential) Bay 10 125 0
RiverCamps on Crooked Creek Bay 1,500 450 41
RiverCamps on Sandy Creek Bay 6,000 600 0
Rivercrest (2) Hillsborough 413 1,300 1,085
RiverSide at Chipola Calhoun 271 10 0
RiverTown St. Johns 4,170 4,500 23
SouthWood Leon 3,770 4,770 858
St. Johns Golf &
County Club St. Johns 820 799 664
SummerCamp Franklin 782 499 0
The Hammocks Bay 143 457 383
Timber Island (4) Franklin 49 400 0
Victoria Park Volusia 1,859 4,000 683
Walton Corners Leon 60 33 0
WaterColor Walton 499 1,140 813
WaterSound Beach Walton 256 499 362
WaterSound Phase I Walton 506 487 0
WaterSound West Beach Walton 62 197 0
WaterMill Gulf 94 120 0
WaveCrest Bay 7 95 0
West Bay DSAP Phase I Bay 4,234 685 0
WindMark Beach Gulf 2,080 1,662 104
-------- -------- -----------
Total (5) 28,699 25,536 5,945
======== ======== ===========
(1) A project is deemed land-use entitled when all major discretionary
governmental land-use approvals have been received. Some of these
projects may require additional permits for development and/or
build-out; they also may be subject to legal challenge. Maximum
project units represent the number of units entitled. The actual
number of units to be constructed at full build-out may be lower
than the number entitled.
(2) Paseos and Rivercrest are each 50 percent owned by JOE. Artisan
Park is 74 percent owned by JOE.
(3) 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) James Island and Hampton Park are not included in this table since
only 4 units remain to be sold, including 3 models.
Table 3 summarizes JOE's Florida residential, resort and
RiverCamps projects in the entitlement process as of December 31,
2004.
Table 3
JOE Residential, Resort and RiverCamps Projects
In the Land-Use Entitlement Process in Florida (1)
December 31, 2004
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 8,020 3,566
West Bay DSAP Phases II & III (5) Bay 6,789 5,157
--------- ----------
Total 15,845+ 9,926
========= ==========
(1) All developments listed are in the preliminary planning process
and have significant entitlement steps remaining that could affect
timing, scale and viability. There can be no assurance that these
entitlements will ultimately be received. No RiverCamps projects
were in the land-use entitlement process as of December 31, 2004.
(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.
(5) See description of the West Bay DSAP below.
JOE's Residential Pipeline
JOE's pipeline of residential projects extends well into the
future with approximately 30,000 units entitled or in various stages
of the land-use entitlement process in a variety of markets across
Florida.
"JOE owns enough high-quality developable land to create value for
decades," said Rummell. "JOE's challenge is to create and develop the
next generation of projects that will continue to drive the region's
value-creation cycle. 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."
West Bay Sector
As part of the entitlements process, the West Bay Sector Plan is a
vision for future development and conservation of approximately 75,000
acres of JOE-owned land in Northwestern Bay County. The West Bay
Sector includes the West Bay Detailed Specific Area Plan (West Bay
DSAP), a 16,556-acre land-use planning area, and a 4,000-acre Airport
DSAP for the proposed relocation of the Panama City - Bay County
International Airport. These two land plans begin the implementation
of the West Bay Sector.
The Federal Aviation Administration released a draft Environmental
Impact Study (DEIS) in November 2004. The DEIS reviewed the
alternatives to expand capacity at the airport in Panama City and
analyzed safety, environmental, social and other impacts.
The DEIS analysis reduced the number of alternatives selected for
further analysis to five: a No-Action Alternative, two alternatives to
improve the existing airport and two alternatives that require
relocation to a new site proposed by the airport authority in the West
Bay Sector on land owned by JOE.
The FAA is required by law to carry forward the No-Action
Alternative throughout the process for comparative purposes. However,
according to the DEIS, "the No-Action Alternative fails to meet Level
1 screening criteria because it does not meet FAA safety and design
criteria and fails to meet future aviation demand. Although the
No-Action Alternative has been determined not to be reasonable,
feasible, practicable, or a prudent alternative, it will be carried
forward in the final Environmental Impact Statement (EIS) for
comparative purposes."
The FAA alternatives at the current site would extend the primary
runway system, impacting a mixed-use neighborhood, to allow for either
a 6,800-foot or an 8,400-foot primary runway and standard runway
safety areas.
The FAA alternatives in the West Bay Sector would relocate the
airport to the new site in West Bay with either a 6,800-foot or an
8,400-foot primary runway and standard runway safety areas.
On January 11, 2005, the FAA held a public hearing in Panama City
seeking public comment on the DEIS. Written comments were accepted
through January 28, 2005. This additional input, along with new
information and analysis, may change materially the conclusions
reached in the DEIS. The FAA has announced that it expects to release
its final EIS later this year and to issue its Record of Decision in
late 2005.
In addition to the EIS process, other regulatory steps remain
before a final decision is reached on the relocation of the airport.
The relocation is also dependent on adequate funding.
Phases two and three of the West Bay DSAP entitlements are
conditioned on the relocation of the airport. At full build-out, the
West Bay DSAP provides for approximately 4.4 million square feet of
industrial, commercial and retail space, 5,842 residential units, 490
hotel rooms and two marinas. Predevelopment planning has started on
phase one of the West Bay DSAP and local and state agencies, along
with JOE, have started economic development activities for the West
Bay Sector.
SEGMENT RESULTS
ST. JOE TOWNS & RESORTS
Pretax income from continuing operations for St. Joe Towns &
Resorts, JOE's community development segment, was $24.7 million for
the fourth quarter of 2004, compared with $13.2 million in the fourth
quarter of 2003.
Pretax income from continuing operations in 2004 was $99.9
million, compared to $80.6 million for the year 2003.
In the fourth quarter of 2004, St. Joe Towns & Resorts sold 598
units and generated revenues from housing and home sites of $161.5
million, compared to 527 units and $129.4 million in revenue in the
fourth quarter of 2003. JOE accepted contracts for 445 units in the
fourth quarter of 2004, compared to 499 units in the fourth quarter a
year ago.
"During the recent holiday season, visitor traffic through our
sales centers was strong in Northwest Florida, and the year ended with
a strong resale market with excellent pricing in Walton, Bay and Gulf
Counties," said Rummell. "Over the past year, we believe pricing in
Northwest Florida has climbed toward the level of similar product
types in other beach-oriented markets in the Southeast."
Tables 4 and 5 summarize sales activity for St. Joe Towns &
Resorts for the fourth quarter and full year of 2004 compared to the
same periods in 2003.
Table 4
St. Joe Towns & Resorts
Sales Activity
For the Three Months
Ended December 31,
($ in millions)
2004 2003
----------------------------- -----------------------------
Number of Gross Number of Gross
Units Closed Revenue Profit Units Closed Revenue Profit
------------- ------- ------- ------------- ------- -------
Home Sites 84 $15.8 $9.8 114 $24.3 $15.4
Homes (1) 514 145.7 30.3 413 105.1 15.9
------------- ------- ------- ------------- ------- -------
Total 598 $161.5 $40.1 527 $129.4 $31.3
============= ======= ======= ============= ======= =======
For the Year Ended December 31,
2004 2003
----------------------------- -----------------------------
Number of Gross Number of Gross
Units Closed Revenue Profit Units Closed Revenue Profit
------------- ------- ------- ------------- ------- -------
Home Sites 414 $109.8 $74.3 519 $115.7 $72.2
Homes (1) 1,660 462.0 79.1 1,241 348.4 60.6
------------- ------- ------- ------------- ------- -------
Total 2,074 $571.8 $153.4 1,760 $464.1 $132.8
============= ======= ======= ============= ======= =======
(1) Homes include single family, multi-family and Private Resident
Club (PRC) units. Multi-family and PRC revenue is recognized, if
preconditions are met, on a percentage-of-completion basis. As a
consequence, revenue recognition and closings may occur in
different periods. Paseos and Rivercrest, two joint ventures 50
percent owned by JOE, are not included.
Table 5
Units Placed Under Contract
For the Three Months
Ended December 31,
2004 2003 Percentage Change
------------ ------------ -----------------
Home Sites 82 125 (34.4)%
Homes (1) 363 374 (2.9)
------------ ------------ -----------------
Total 445 499 (10.8)%
============ ============ =================
For the Year Ended December 31,
2004 2003 Percentage Change
------------ ------------ -----------------
Home Sites 338 590 (42.7)%
Homes (1) 1,883 1,437 31.0
------------ ------------ -----------------
Total 2,221 2,027 9.6%
============ ============ =================
(1) Homes include single family homes, multi-family and PRC units.
Paseos and Rivercrest, two joint ventures, are not included.
Table 6 summarizes backlog at December 31, 2004 and 2003.
Table 6
Backlog (1) at
December 31,
($ in millions)
Units Revenue
----- -------
2004 2003 2004 2003
-------- -------- -------- --------
Home Sites 18 94 $1.6 $20.6
Homes 953 730 337.6 223.7
-------- -------- -------- --------
Total 971 824 $339.2 $244.3
======== ======== ======== ========
(1) Backlog represents units under contract but not yet closed.
Paseos and Rivercrest, two joint ventures, are not included.
Northwest Florida
WaterColor
There were no releases at JOE's award-winning WaterColor resort in
the fourth quarter of 2004. At December 31, 2004, there were 8 homes
and 19 home sites in WaterColor's first three phases that have not
been released for sale. Development continued in the fourth quarter on
WaterColor's 185-unit phase four, on a 60-acre parcel. Sales are
expected to begin in WaterColor's phase four in the first quarter of
2005.
WaterColor Private Residence Club
The WaterColor Private Residence Club (PRC) is a fractional
ownership property adjacent to the WaterColor Inn.
In the fourth quarter, JOE closed 87 of 88 ownership interests of
the PRC. A contract for the remaining interest is expected to close in
the first quarter of 2005. The interests in 11 two-bedroom, two-bath,
fully furnished, luxury vacation multi-family units, were initially
offered at $190,000 in the fourth quarter of 2003 and increased to
$285,000 by the first quarter of 2005.
"Our success with the WaterColor PRC increases our enthusiasm for
bringing the concept to WaterSound Beach and other future projects,"
said Rummell.
WaterSound Beach
Construction of the initial 49 multi-family units at Compass Point
continued in the fourth quarter and closings are expected to begin in
the third quarter of 2005. Contracts had previously been accepted for
all 49 units at an average price of $1.5 million. In the fourth
quarter, the single remaining multi-family unit at The Crossing was
closed at a price of $2.5 million, along with the Southern Accents
Showhouse at a price of $5.1 million.
The remaining 43 units in Compass Point are scheduled to be
released for sale in 2006. Construction of 22 of the 43 units is
scheduled to begin in late 2005, while construction of the last 21
units is expected to start in early 2006.
WaterSound Beach is set on over a mile of white sand beach in
Walton County five miles east of WaterColor.
WaterSound West Beach
In the fourth quarter, infrastructure construction started at
WaterSound West Beach. This high-end community with 197 units is just
over one half mile west of WaterSound Beach on the beach side of
County Road 30A. Beach access is through the adjacent Deer Lake State
Park.
West Beach is being designed as a gated, high-end community with
pricing expected to be comparable to WaterSound Beach. Sales are
expected to begin in mid-2005.
WaterSound
During the fourth quarter, initial infrastructure construction
continued 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. Construction of
these amenities is expected to be substantially complete before sales
begin; sales are currently expected to start in early 2006.
Palmetto Trace
In the fourth quarter of 2004, contracts were accepted at Palmetto
Trace for 23 homes at an average price of $243,400, compared to
$152,200 for 18 homes in the fourth quarter a year ago. "The demand
and pricing for new primary homes in Panama City Beach continues to
increase," said Rummell. In the fourth quarter of 2004, JOE received
reservations from 155 potential buyers for two releases totaling 27
homes. New product is being planned to meet the demand in this market.
Palmetto Trace is a primary home community in Panama City Beach
planned for 480 units on 138 acres.
The Hammocks, Hawks Landing
The Hammocks and Hawks Landing are designed to provide a range of
housing options in Bay County to meet the housing needs of the county.
In the fourth quarter, contracts were accepted for 11 homes and 4 home
sites at The Hammocks at average prices of $138,700 and $39,000,
respectively. At Hawks Landing, home site sales are expected to start
later in 2005 in the $50,000 range.
WindMark Beach
Pending the receipt of environmental permits, JOE expects to begin
work simultaneously on the relocation of U.S. 98, the WindMark Beach
town center and the initial portion of the 3.5-mile public beachfront
trail system.
WindMark Beach is a proposed mixed-use development on
approximately 2,080 acres in Gulf County, Florida. 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. Sales in the
new phases of WindMark Beach are scheduled to begin in late 2005.
The Port St. Joe Mill Site
During the fourth quarter, JOE continued to plan the redevelopment
of the site of the former Port St. Joe paper mill and continued to
participate in a public visioning process. The site is owned by a
joint venture of JOE and Smurfit-Stone Container Corporation.
SouthWood
At SouthWood, contracts were accepted for 73 units in the fourth
quarter of 2004, compared to 43 units in the fourth quarter of 2003.
Planning for SouthWood's phase two continues. A more detailed land
plan is under preparation, designed to optimize the remaining land
within the community. SouthWood is a primary hometown in Tallahassee.
SummerCamp
At SummerCamp in Franklin County, sales of 52 home sites are
scheduled to close by the end of the second quarter of 2005, pending
the receipt of environmental permits, one of which is the subject of a
legal challenge. SummerCamp, a 499-unit development on 782 acres, is
located approximately 45 miles south of Tallahassee on the Gulf of
Mexico.
Timber Island
Land-use entitlements were finalized in the first quarter of 2005
for Timber Island in Franklin County. The 49-acre parcel near
Carrabelle is entitled for 400 units for resort and transient uses,
including private residence clubs with fractional ownership. Timber
Island land-use approvals also allow 480 wet/dry marina slips.
Northeast Florida
RiverTown
Predevelopment planning continues at RiverTown, a proposed new
Southern town in St. Johns County. Planned for 4,500 units on 4,170
acres, RiverTown is set along more than 3.5 miles of frontage on the
beautiful St. Johns River. 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.
St. Johns Golf & Country Club
St. Johns Golf & County Club is a primary residential community
located in St. Johns County.
"Demand for homes in St. Johns Golf & Country Club remained strong
in the fourth quarter," said Rummell. "JOE accepted contracts in the
fourth quarter of 2004 for 28 homes at an average price of $424,700,
compared to 31 homes at an average price of $351,500 in the fourth
quarter of 2003."
Construction continued in the fourth quarter on infrastructure for
the community's final phase. Sales in this community are expected to
continue through 2006.
Central Florida
Victoria Park
JOE accepted 324 contracts in Victoria Park in 2004, up 60 percent
over the 202 contracts for the previous year. In the fourth quarter of
2004, a total of 105 contracts were accepted, compared to 34 in the
fourth quarter of 2003.
On January 31, 2005, JOE and Southern Living Magazine announced
that Victoria Park had been selected for the location of a 2005
Southern Living Idea House scheduled to be featured in the magazine's
August 2005 issue.
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
Located in Manatee County on Tampa Bay, Perico Island is being
planned as an upscale 686-unit condominium community on 352 acres in
the City of Bradenton.
"Perico Island is being designed as an environmentally sensitive
community that we expect to set a new standard for quality in this
Southeast Florida market," said Rummell. "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. The project's small footprint stands in stark contrast to
other developments in the area."
During the fourth quarter, JOE settled a lawsuit brought by
Manatee County and others against the City of Bradenton over the
city's approval of the proposed Perico Island project. As a result,
land-use entitlements for Perico Island became final. Additional
environmental permitting is required before construction can begin on
the project. Sales activity at Perico Island is expected to begin in
late 2006.
North and South Carolina
For the fourth quarter 2004, Saussy Burbank, JOE's homebuilder
based in Charlotte, N.C., closed 173 homes and accepted contracts for
129 homes, compared to 173 closings and 165 contracts in the fourth
quarter of 2003. For the full year 2004, 748 homes were closed and 698
contracts were accepted, compared to 555 closings and 607 contracts in
2003.
Joint Venture Communities
Celebration, Artisan Park
JOE accepted contracts for 28 condominiums in Artisan Park in the
fourth quarter at an average price of $399,700. There were no
condominium sales in the same period last year. In 2004, contracts
were accepted on 17 single-family home sites at an average price of
$211,500, compared to 10 home sites at an average price of $127,900
for 2003.
"Artisan Park is performing very well with the pace of sales and
pricing running well ahead of our expectations," said Rummell. 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 1,300-unit primary residential community located
just outside of Tampa, Florida. "We continue to see robust sales at
Rivercrest," said Rummell. JOE accepted contracts for 183 homes at
Rivercrest at an average price of $183,000 in the fourth quarter this
year, compared to 47 homes at an average price of $147,800 in the
fourth quarter last year. In 2004, contracts were accepted on 729
homes at an average price of $171,200 at Rivercrest, compared to 231
homes at an average price of $146,600 for 2003.
Paseos is a 325-unit primary residential community in Jupiter,
Florida. At the close of the fourth quarter of 2004, only three units
remained for sale at Paseos. JOE accepted contracts for seven homes at
an average price of $664,300 in the fourth quarter of 2004, compared
to 34 homes at an average price of $403,700 in 2003's fourth quarter.
In 2004, contracts were accepted on 182 homes at an average price of
$482,900, compared to 108 homes at an average price of $391,500 for
2003.
JOE owns 50 percent of the joint ventures developing Rivercrest
and Paseos and manages each of the projects.
Tables 7 and 8 summarize the sales activity at various residential
communities for the fourth quarters of 2004 and 2003 and the years
2004 and 2003.
Table 7
St. Joe Towns & Resorts
Sales of Homes and Home Sites
For the Three Months Ended December 31,
($ in thousands)
2004
----------------------------------------
Units Avg. Contracts Avg.
Closed Price Accepted (1) Price
---------- -------- ----------- --------
WaterColor
Home Sites 13 $724.9 13 $724.9
Single/Multi-Family Homes 3 979.4 0 N/A
PRC Shares 87 208.6 4 255.0
WaterSound Beach
Home Sites 0 N/A 0 N/A
Single Family Homes 1 5,100.0 0 N/A
Multi-Family Homes 1 2,500.0 1 2,500.0
Palmetto Trace
Single Family Homes 33 147.0 23 243.4
The Hammocks
Home Sites 4 39.0 4 39.0
Single Family Homes 29 153.2 11 138.7
WindMark Beach
Home Sites 0 N/A 0 N/A
SouthWood
Home Sites 25 95.8 11 100.0
Single Family Homes 52 252.7 62 255.7
St. Johns G & CC
Home Sites 12 61.2 20 61.0
Single Family Homes 28 362.9 28 424.7
Hampton Park/James Island
Single Family Homes 14 398.6 1 347.0
Victoria Park
Home Sites 26 76.8 30 85.2
Single Family Homes 54 226.4 75 270.2
Artisan Park (2)
Home Sites 4 313.8 4 313.8
Single Family Homes 39 388.4 1 609.5
Multi-Family Homes 0 N/A 28 399.7
Paseos (2)
Single Family Homes 50 409.4 7 664.3
Rivercrest (2)
Single Family Homes 110 160.5 183 183.0
Saussy Burbank
Home Sites 0 N/A 0 N/A
Single Family Homes 173 235.7 129 237.2
2003
----------------------------------------
Units Avg. Contracts Avg.
Closed Price Accepted (1) Price
---------- -------- ----------- --------
WaterColor
Home Sites 48 $283.5 64 $243.2
Single/Multi-Family Homes 8 782.7 3 750.0
PRC Shares 0 N/A 23 189.6
WaterSound Beach
Home Sites 18 351.1 5 356.2
Single Family Homes 0 N/A 0 N/A
Multi-Family Homes 30 1,177.3 0 N/A
Palmetto Trace
Single Family Homes 28 168.6 18 152.2
The Hammocks
Home Sites 0 N/A 0 N/A
Single Family Homes 18 146.6 18 144.2
WindMark Beach
Home Sites 0 N/A 0 N/A
SouthWood
Home Sites 13 82.9 12 86.3
Single Family Homes 34 240.9 31 230.2
St. Johns G & CC
Home Sites 11 66.3 19 115.9
Single Family Homes 41 328.6 31 351.5
Hampton Park/James Island
Single Family Homes 33 332.6 24 390.1
Victoria Park
Home Sites 6 72.5 7 82.9
Single Family Homes 48 192.8 27 207.1
Artisan Park (2)
Home Sites 5 133.6 5 133.6
Single Family Homes 0 N/A 34 386.1
Multi-Family Homes 0 N/A 0 N/A
Paseos (2)
Single Family Homes 15 365.7 34 403.7
Rivercrest (2)
Single Family Homes 57 147.0 47 147.8
Saussy Burbank
Home Sites 13 23.5 13 23.5
Single Family Homes 173 210.7 165 205.8
(1) Contracts accepted during the quarter. Contracts accepted and
closed in the same quarter are also included as closed units.
(2) JOE owns 74 percent of Artisan Park and 50 percent each of Paseos
and Rivercrest. Sales from Paseos and Rivercrest are not
consolidated with the financial results of St. Joe Towns &
Resorts.
Table 8
St. Joe Towns & Resorts
Sales of Homes and Home Sites
For the Year Ended December 31,
($ in thousands)
2004
----------------------------------------
Units Avg. Contracts Avg.
Closed Price Accepted (1) Price
---------- -------- ----------- --------
WaterColor
Home Sites 148 $488.4 96 $616.3
Single/Multi-Family Homes 11 896.8 12 942.6
PRC Shares 87 208.6 64 215.5
WaterSound Beach
Home Sites 29 523.2 17 626.4
Single Family Homes 1 5,100.0 2 3,197.0
Multi-Family Homes 51 1,172.8 50 1,466.2
Palmetto Trace
Single Family Homes 92 149.5 106 167.5
The Hammocks
Home Sites 70 37.8 70 37.8
Single Family Homes 77 149.9 81 161.4
WindMark Beach
Home Sites 4 1,006.3 4 1,006.3
SouthWood
Home Sites 58 97.7 60 97.6
Single Family Homes 174 235.6 210 250.0
St. Johns G & CC
Home Sites 35 83.6 20 61.0
Single Family Homes 104 350.3 125 386.5
Hampton Park/ James Island
Single Family Homes 72 360.6 30 377.4
Victoria Park
Home Sites 53 76.9 54 79.3
Single Family Homes 179 221.9 270 245.4
Artisan Park (2)
Home Sites 17 211.5 17 211.5
Single Family Homes 64 404.8 86 452.1
Multi-Family Homes 0 N/A 149 325.3
Paseos (2)
Single Family Homes 124 396.2 182 482.9
Rivercrest (2)
Single Family Homes 298 152.2 729 171.2
Saussy Burbank
Home Sites 0 N/A 0 N/A
Single Family Homes 748 221.3 698 229.4
2003
----------------------------------------
Units Avg. Contracts Avg.
Closed Price Accepted (1) Price
---------- -------- ----------- --------
WaterColor
Home Sites 206 $285.8 249 $277.4
Single/Multi-Family Homes 30 673.8 19 786.7
PRC Shares 0 N/A 23 189.6
WaterSound Beach
Home Sites 93 399 105 396.5
Single Family Homes 0 N/A 0 N/A
Multi-Family Homes 30 1,177.3 34 1,142.4
Palmetto Trace
Single Family Homes 88 154.3 101 156.8
The Hammocks
Home Sites 30 30.4 24 30.3
Single Family Homes 48 142.6 72 149.3
WindMark Beach
Home Sites 13 567.3 10 518.0
SouthWood
Home Sites 63 84.6 64 89.1
Single Family Homes 133 203.2 151 228.6
St. Johns G & CC
Home Sites 40 55.7 63 70.2
Single Family Homes 124 319.1 122 339.5
Hampton Park/ James Island
Single Family Homes 109 328.5 92 341.5
Victoria Park
Home Sites 32 72.0 33 75.2
Single Family Homes 124 196.2 169 204.6
Artisan Park (2)
Home Sites 10 127.9 10 127.9
Single Family Homes 0 N/A 47 400.8
Multi-Family Homes 0 N/A 0 N/A
Paseos (2)
Single Family Homes 15 365.7 108 391.5
Rivercrest (2)
Single Family Homes 167 146.3 231 146.6
Saussy Burbank
Home Sites 32 24.0 32 24.0
Single Family Homes 555 208.2 607 207.2
(1) Contracts accepted during the year. Contracts accepted and closed
in the same year are also included as closed units.
(2) JOE owns 74 percent of Artisan Park and 50 percent each of Paseos
and Rivercrest. Sales from Paseos and Rivercrest are not
consolidated with the financial results of St. Joe Towns &
Resorts.
Table 9 summarizes the units sold from project inception through
December 31, 2004 at various St. Joe Towns & Resorts residential
projects in Florida.
Table 9
St. Joe Towns & Resorts
Units Sold in Florida Since Project Inception (1)
Through December 31, 2004
Contracts
Maximum Closed Accepted
Units(2) Units (3)
--------- --------- ---------
WaterColor 1,140 802 11
WaterSound Beach 499 312 50
Palmetto Trace/The Hammocks 937 558 123
WindMark Beach 1,662 104 0
SouthWood 4,770 704 154
SummerCamp 499 0 0
St. Johns Golf & Country Club 799 570 94
Hampton Park/James Island 523 510 9
Victoria Park 4,000 504 179
Artisan Park (4) 616 91 218
Paseos (4) 325 139 183
Rivercrest (4) 1,300 541 544
--------- --------- ---------
Total 17,070 4,835 1,565
========= ========= =========
(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 December 31, 2004.
(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, the company's
commercial real estate services unit. Pretax income from continuing
operations from the commercial segment was $18.0 million for the
fourth quarter of 2004, compared with $5.4 million in the same quarter
of 2003.
For the year 2004, pretax income from continuing operations was
$23.0 million compared to a loss of $(4.7) million in 2003. Results
for 2003 included the Advantis non-cash asset-impairment charge of
$14.1 million pretax. Pretax income from discontinued operations,
resulting from the sale of two operating buildings in 2004's third
quarter, was $8.4 million for 2004, compared to $1.2 million in 2003.
St. Joe Commercial
For the fourth quarter of 2004, St. Joe Commercial had pretax
income from continuing operations of $17.2 million, compared to $5.5
million in the fourth quarter a year ago. For the year, pretax income
from continuing operations was $23.0 million, compared to $13.1
million in 2003.
"Our commercial development division turned in a very strong
fourth quarter," said Twomey. Gross proceeds from Northwest Florida
commercial land sales totaled $33.7 million, which included $26.5
million of proceeds from the sale of land at Pier Park, compared to
$10.5 million in the same period in 2003. For the year 2004, gross
proceeds from Northwest Florida commercial land sales totaled $43.6
million, compared to $24.5 million in 2003.
During the fourth quarter of 2004, JOE sold 15 Northwest Florida
commercial land parcels, totaling 145 acres, at an average price of
approximately $233,000 per acre, including the sale of 93 acres in
Pier Park to the Simon Property Group for $26.5 million, or $286,000
per acre. Pricing reflects variations in location, parcel quality and
the percentage of each parcel that may be developable.
"We are particularly pleased that sales activity for commercial
properties in Northwest Florida has increased over the last year,"
said Twomey. "The Simon Property Group's interest in Pier Park has
caused other national commercial and retail developers to take
notice."
Table 10 summarizes JOE's commercial land sales in Northwest
Florida for the fourth quarters and full years of 2004 and 2003.
Table 10
St. Joe Commercial Northwest Florida Land Sales
Gross Sales Average
Number of Price Price/Acre
Land Sales Acres Sold (in thousands) (in thousands)
- -------------- ------------ ----------- --------------- --------------
Quarter Ended December 31, 2004
Unimproved 2 22 $2,570 $117
Improved (1) 13 123 31,166 253
------------ ----------- --------------- --------------
Total/Average 15 145 $33,736 $233
============ =========== =============== ==============
Quarter Ended December 31, 2003
Unimproved 4 107 $7,035 $66
Improved 8 45 3,436 76
------------ ------------ -------------- --------------
Total/Average 12 152 $10,471 $69
============ ============ ============== ==============
Gross Sales Average
Number of Price Price/Acre
Land Sales Acres Sold (in thousands) (in thousands)
- -------------- ------------ ----------- --------------- --------------
Year Ended December 31, 2004
Unimproved 12 220 $8,347 $38
Improved (1) 29 164 35,244 215
------------ ----------- --------------- --------------
Total/Average 41 384 $43,591 $114
============ =========== =============== ==============
Year Ended December 31, 2003
Unimproved 15 258 $13,020 $50
Improved 30 129 11,460 89
------------ ----------- --------------- --------------
Total/Average 45 387 $24,480 $63
============ =========== =============== ==============
(1) Includes the sale of 93 acres in Pier Park to the Simon Property
Group for $26.5 million, or $286,000 per acre, in the fourth
quarter of 2004.
"We are also seeing increased interest from national and regional
multi-family developers," said Twomey. "As a result, the value of land
for apartment development is moving closer to comparable prices in
other parts of the nation."
"Multi-family products are becoming an increasingly important
housing option for this region," said Twomey. "The expansion of a full
range of housing options is vitally important to keep the Northwest
Florida economy growing."
As of December 31, 2004, JOE had four parcels for multi-family
development under contract totaling 58 acres at an average price of
approximately $108,000 per acre. These contracts are scheduled to
close in 2005.
Northwest Florida
Pier Park
In December 2004 JOE sold to Simon Property Group, Inc. a 93-acre
parcel within and near Pier Park for a retail, restaurant and
entertainment project.
Under the terms of the agreement, Simon also has the right to
purchase an additional 125 acres in and near Pier Park. JOE will
retain approximately 13 acres in Pier Park near the beach for future
JOE development. In addition, JOE owns approximately 60 adjacent acres
near the beach with zoning allowing high-density residential uses.
Beckrich
The Home Depot, located on a 13-acre parcel, opened its new store
at Beckrich 10 days earlier than planned to meet the hurricane needs
of local residents. In the fourth quarter, two additional out parcels
totaling 2.8 acres near The Home Depot were sold for an average price
of $490,000 per acre.
WaterColor Crossings
In the fourth quarter, a one-acre out parcel within WaterColor
Crossings was sold for $650,000, marking a new high point for
commercial per-acre pricing for JOE. A 28,800-square-foot Publix Super
Market was completed earlier in 2004. Construction was also completed
on an additional 14,400 square feet of retail space in the fourth
quarter.
SouthWood Commercial
Construction continued in the fourth 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 77 percent leased, were designed to accommodate
restaurants and other retail users. Office space ranging from 900 to
2,000 square feet will also be available.
Commerce Parks
During the fourth quarter, commercial land sales within JOE's
commerce parks totaled $2.7 million, compared to $1.9 million in the
fourth quarter of 2003. JOE has 11 commerce parks operating or under
development in six Northwest Florida counties.
"Demand and pricing was strong in the fourth quarter at JOE's
commerce parks," said Twomey. "We are seeing a wide variety of users,
many of them local businesses, whose expansions are creating
additional jobs."
Our newest commerce park, South Walton Commerce Park, opened in
the fourth quarter, with prices ranging from $150,000 to $435,000 per
acre. Three parcels with prices ranging from $161,000 to $302,000 per
acre closed in the fourth quarter. There is one additional parcel
under contract for $154,000 per acre.
At Port St. Joe Commerce Park, all 58 acres of the park have been
sold or are under contract to close in the first quarter of 2005.
Construction on the second phase of Port St. Joe Commerce Park has
started with sales scheduled to begin later in 2005.
Table 11 summarizes the status of JOE's commerce parks throughout
Northwest Florida as of December 31, 2004.
Table 11
Commerce Parks
December 31, 2004
Acres
Net Sold/
Saleable Under Current Asking
Commerce Parks County Acres Contract Price Per Acre
- ------------------ -------- -------- --------- ----------------
Existing and Under
Construction
- ------------------
Beach Commerce Bay 161 108 $70,000-435,000
Port St. Joe Commerce Gulf 58 58 50,000-60,000
Airport Commerce Leon 40 -- 75,000-260,000
Nautilus Court Bay 12 4 300,000-400,000
Hammock Creek Commerce Gadsden 114 27 40,000-150,000
South Walton Commerce Walton 39 8 200,000-435,000
Beach Commerce II Bay 115 -- 70,000-100,000
Port St. Joe Commerce II Gulf 40 -- 60,000-100,000
Predevelopment
- ------------------
Cedar Grove Commerce Bay 100 -- 50,000-60,000
Apalachicola Commerce Franklin 50 -- 40,000-50,000
Mill Creek Commerce Bay 40 -- 50,000-60,000
-------- ---------
Total 769 205
======== =========
Investment Property Portfolio
JOE has redeployed some of the proceeds of its land sales in a
tax-deferred manner through the acquisition of commercial office
buildings in select markets within the Southeast.
In the fourth quarter of 2004, JOE acquired Parkwood Point and
Deerfield Point I and II, three Class-A office buildings totaling
424,000 square feet in Atlanta, Georgia. The three buildings are 91
percent leased. Advantis will manage these properties for JOE.
As of December 31, 2004, JOE's portfolio of commercial office
buildings acquired through the capital redeployment program totaled
approximately 2.8 million square feet and represented an aggregate
investment of $383 million, compared to 2.3 million square feet and an
aggregate investment of $313 million at December 31, 2003.
Table 12 summarizes JOE's investment property portfolio as of
December 31, 2004.
Table 12
Investment Property Portfolio
December 31, 2004
Number of Net Rentable Leased
Location Properties Square Feet Percentage
- ------------ ------------ -------------- -------------
Florida
Tampa 5 489,000 80%
Orlando 2 317,000 69
Jacksonville 1 136,000 57
Northwest Florida 3 156,000 84
Atlanta 8 1,289,000 89
Washington, D.C. 1 119,000 97
Charlotte 1 158,000 100
Richmond 2 129,000 99
------------ -------------- -------------
Total/Weighted Average 23 2,793,000 85%
============ ============== =============
Land Positions Held for Investment
During 2004, JOE sold commercial parcels totaling 35 acres for
gross proceeds of $18.8 million. Additionally, there were 27 acres
under contract at December 31, 2004. Our current portfolio of
commercial land includes 76 acres in Houston, Atlanta, Northern
Virginia, Jacksonville and Orlando.
Table 13 details JOE's land positions held for investment as of
December 31, 2004.
Table 13
St. Joe Commercial
Land Positions Held for Investment
December 31, 2004
Acres Acres Acres Under Sales Proceeds
Held at Acres Sold Held at Contract During 2004
Market 12/31/2003 During 2004 12/31/2004 12/31/2004 (in thousands)
- ------- ---------- ----------- ---------- ------------ ---------------
Florida 49.6 28.1 21.5 -- $16,650
Georgia 9.8 -- 9.8 3.0 --
Texas 31.9 6.7 25.2 4.4 2,168
Virginia 19.1 -- 19.1 19.1 --
---------- ----------- ---------- ------------ ---------------
Total 110.4 34.8 75.6 26.5 $18,818
========== =========== ========== ============ ===============
Development Properties
Table 14 summarizes the development property portfolio as of
December 31, 2004.
Table 14
Development Property Portfolio
December 31, 2004
Market Ownership Net Rentable Leased
Property Location Percentage Square Feet Percentage
- ---------------------- ------------ ---------- ------------ ----------
Deerfield Commons I Atlanta 40% 122,000 82%
Nextel Partners II Panama City
Beach 100 30,000 100
------------ ----------
Total/Weighted Average 152,000 86%
============ ==========
"In the fourth quarter of 2004, JOE sold the TNT Logistics
Building in Jacksonville for a pretax gain of $3.0 million," said
Twomey.
Advantis
"Advantis has made remarkable progress turning in a successful
2004," said Twomey. "The performance from Advantis was driven by
improved results in their commercial real estate brokerage business."
Pretax income from continuing operations in the fourth quarter of
2004 was $1.2 million before elimination of inter-company profits of
$0.4 million. Advantis had pretax income from continuing operations of
$0.7 million for the fourth quarter of 2003, before elimination of
inter-company profits of $0.8 million.
For the year 2004, Advantis had pretax income from continuing
operations of $1.7 million before the elimination of inter-company
profits of $1.7 million, compared to a pretax loss from continuing
operations of $(15.8) million before elimination of $2.0 million of
inter-company profits in 2003.
ST. JOE LAND COMPANY
St. Joe Land Company had pretax income from continuing operations
of $16.5 million in the fourth quarter of 2004, compared with $33.2
million in the fourth quarter of 2003. For the year, JOE's land sales
division had pretax income from continuing operations of $57.2 million
for the full year 2004, compared with $78.4 million in 2003.
There were no conservation land sales in the fourth quarter of
2004, compared with $16.1 million in the fourth quarter of 2003. For
the year, there were conservation land sales in 2004 of $3.0 million,
compared with $40.5 million in 2003.
In the fourth quarter, JOE sold 3,369 acres of land at an average
of $5,105 per acre, compared to 11,405 acres in the same quarter a
year ago for an average of $1,973 per acre.
One large parcel that sold in the fourth quarter of 2004 consisted
of approximately 349 acres at a price of $8.7 million, or $25,000 per
acre. The parcel has water frontage of varying quality on North Bay in
Bay County and was sold without entitlements or infrastructure for
utilities and other services.
Table 15 summarizes the land division's sales activity for the
fourth quarter of 2004 and for the full year 2004.
Table 15
Land Division Sales (1)
Quarter Ended December 31,
Average Gross
Number Number Price Sales Price Gross Profit
Period of Sales of Acres Per Acre (in millions) (in millions)
- --------- --------- --------- --------- -------------- ---------------
2004 42 3,369 $5,105 $17.2 $16.1
2003 37 11,405 $1,973 $22.5 $19.6
Year Ended December 31,
Average Gross
Number Number Price Sales Price Gross Profit
Period of Sales of Acres Per Acre (in millions) (in millions)
- --------- --------- --------- --------- -------------- ---------------
2004 169 18,376 $3,543 $65.1 $59.3
2003 166 29,904 $1,874 $56.0 $47.6
(1) Does not include RiverCamps or conservation land sales.
RiverCamps
RiverCamps are planned settlements in rustic settings, offering
personal retreats in private woodland preserves. RiverCamps'
low-density home sites are sold fee-simple and are surrounded by a
large common area preserved for conservation. At JOE's first
RiverCamps location, many home sites are almost one acre. Home sites
could be larger at future locations.
RiverCamps on Crooked Creek
In the fourth quarter of 2004, RiverCamps offered 42 home sites
for sale, of which 41 closed during the quarter. Home site prices
ranged from $129,000 to $595,000, plus one bay-front home site priced
at $750,000. The remaining fourth quarter contract closed in the first
quarter of 2005.
On January 11, 2005, JOE announced that 37 home sites with prices
ranging from $148,500 to $849,500 and averaging $276,000 would be
released for sale in February. Additional home site releases are
planned for later in the year.
Permits allowing completion of the entire project have been
received, and the pace of infrastructure development is accelerating
with 190 home sites currently under construction. The RiverCamps
"entry barn" is scheduled to be completed early in the second quarter
of 2005 and additional RiverCamps homes are planned to be completed in
late 2005. Construction of the boat basin and storage facility, nature
trails and viewing platforms 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
Preliminary planning and evaluation continues on RiverCamps on
Sandy Creek. Plans initially call for approximately 600 units.
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.
Work also continues on other potential RiverCamps locations in
Northwest Florida.
Other Land Projects
Planned as a primary home community with 24 units on 10 acres,
construction started at Cutter Ridge in Franklin County in the fourth
quarter. In addition, during the fourth quarter marketing began for
RiverSide at Chipola, a 10-unit gated community on the Chipola River
in Calhoun County. Predevelopment planning continues on JOE's
Farmstead, Ranches and Preserves product lines.
FORESTRY
Pretax income from continuing operations for the forestry segment
totaled $2.1 million for the fourth quarter of 2004, compared with
$2.3 million in the comparable 2003 period.
For the full year 2004, pretax income from continuing operations
for the forestry segment totaled $9.1 million, compared with $8.1
million for the full year 2003.
FINANCIAL DATA
Other Income (Expense)
Other income (expense), which includes dividend and interest
income, gains (losses) on sales of investments and non-operating
assets and miscellaneous income, and interest expense, was an expense
of $(2.3) million in the fourth quarter of 2004, compared to an
expense of $(1.7) million in the comparable 2003 period.
For the year 2004, other income (expense) was an expense of $(9.2)
million, compared to an expense of $(6.9) million in 2003.
Table 16 summarizes other income (expense) for the fourth quarters
and full years of 2004 and 2003.
Table 16
Other Income (Expense)
(in millions)
Quarter Ended Year Ended
Dec. 31, Dec. 31,
------------------- --------------------
2004 2003 2004 2003
--------- --------- --------- ----------
Dividend and interest income $0.4 $0.1 $0.9 $0.9
Interest expense (3.5) (2.8) (12.9) (10.7)
Other 0.8 1.0 2.8 2.9
--------- --------- --------- ----------
Total $(2.3) $(1.7) $(9.2) $(6.9)
========= ========= ========= ==========
Table 17
Summary Balance Sheet
(in millions)
December 31, December 31,
2004 2003
------------- -------------
Assets
Investment in real estate $942.6 $886.1
Cash and cash equivalents 94.8 57.4
Prepaid pension asset 94.1 91.8
Property, plant and equipment 33.6 36.3
Other assets 238.5 204.1
------------- -------------
Total assets $1,403.6 $1,275.7
============= =============
Liabilities and Stockholders' Equity
Debt $421.1 $382.2
Accounts payable, accrued liabilities 212.3 165.8
Deferred income taxes 264.4 232.2
------------- -------------
Total liabilities 897.8 780.2
Minority interest 10.4 8.2
Total stockholders' equity 495.4 487.3
------------- -------------
Total liabilities and stockholders' equity $1,403.6 $1,275.7
============= =============
Table 18
Debt Schedule
(in millions)
December 31, December 31,
2004 2003
------------- -------------
Revolving debt facility $-- $40.0
Medium term notes 275.0 175.0
Acquisition and other debt 14.9 4.0
Other collateralized/specific asset
related debt 131.2 163.2
------------- -------------
Total debt $421.1 $382.2
============= =============
Table 19
Consolidated Quarterly Comparisons
($ in millions except per share amounts)
Quarter Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Revenues:
Real estate sales $231.0 $180.6 $734.3 $592.2
Realty revenues 31.4 19.9 98.1 62.5
Timber sales 8.1 8.3 35.2 36.6
Rental revenue 10.7 9.0 40.5 31.0
Other revenues 10.1 6.1 43.4 28.5
----------- ----------- ----------- -----------
Total revenues 291.3 223.9 951.5 750.8
=========== =========== =========== ===========
Expenses:
Cost of real estate
sales 151.5 105.7 484.7 353.2
Cost of realty
revenues 21.5 12.3 63.9 36.2
Cost of timber
sales 4.9 4.9 21.8 24.2
Cost of rental
revenue 4.4 3.8 15.9 14.1
Cost of other
revenues 9.7 6.5 37.6 27.2
Other operating
expenses 28.5 27.0 102.2 91.6
Corporate expense,
net 14.5 9.8 43.8 34.5
Depreciation and
amortization 9.7 9.4 35.1 28.4
Impairment loss -- 0.3 2.0 14.4
----------- ----------- ----------- -----------
Total expenses 244.7 179.7 807.0 623.8
----------- ----------- ----------- -----------
Operating profit 46.6 44.2 144.5 127.0
Other income
(expense) (2.3) (1.7) (9.2) (6.9)
----------- ----------- ----------- -----------
Pretax income from
continuing
operations 44.3 42.5 135.3 120.1
Income tax expense (17.1) (14.3) (53.2) (42.2)
Minority interest
(expense) income (1.7) 0.1 (2.6) (0.6)
Equity in income
(loss) of
unconsolidated
affiliates 2.6 0.3 5.6 (2.2)
Discontinued
operations, net of tax -- 0.1 5.0 0.8
----------- ----------- ----------- -----------
Net income $28.1 $28.7 $90.1 $75.9
=========== =========== =========== ===========
Net income per diluted
share $0.37 $0.37 $1.17 $0.98
=========== =========== =========== ===========
Weighted average
diluted shares
outstanding 76,635,116 77,783,671 76,908,300 77,825,790
Table 20
Quarterly Revenues
By Segment
(in millions)
Quarter Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Towns & Resorts $173.4 $135.7 $617.6 $494.9
Commercial real estate 89.2 39.4 226.7 120.1
Land sales 20.7 40.5 72.1 99.2
Forestry 8.0 8.3 35.1 36.6
----------- ----------- ----------- -----------
Total revenues $291.3 $223.9 $951.5 $750.8
=========== =========== =========== ===========
Table 21
Quarterly Segment Pretax Income
From Continuing Operations
(in millions)
12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31
2004 2004 2004 2004 2003 2003 2003 2003
------ ------- ------- ------ ------ ------- ------- ------
Towns &
Resorts $24.7 $31.8 $34.4 $9.1 $13.2 $32.1 $23.0 $12.4
Commercial
real
estate 18.0 2.9 1.0 1.1 5.4 (1.5) (11.5) 2.9
Land sales 16.5 11.6 10.3 18.8 33.2 14.8 12.8 17.6
Forestry 2.1 1.9 2.4 2.7 2.3 1.6 2.2 1.9
Corporate
and other (17.0) (13.6) (11.9) (11.5) (11.6) (11.9) (10.7) (8.1)
------ ------- ------- ------ ------ ------- ------- ------
Pretax
income
from
continuing
operations $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 year ended December 31, 2004 and discuss
guidance for 2005 on Wednesday, February 2, 2005, at 10:00 a.m.,
Eastern Time.
To participate in the call, please phone 800-553-0358 (for
domestic calls from the United States) or 612-332-0802 (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 766874. 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, 2003 as well as, among
others, the following:
-- economic conditions, particularly in Northwest Florida,
Florida as a whole and key areas of the southeast United
States that serve as feeder markets to 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;
-- adverse 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;
-- adverse weather conditions or natural disasters and the impact
on future demand in Florida; 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," "WindMark," and the "taking flight" design are service
marks of The St. Joe Company.
CONTACT: The St. Joe Company, Jacksonville
JOE Media Contact: Jerry M. Ray, 904-301-4430
or
JOE Investor Contact: Steve Swartz, 904-301-4347