View:
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) October 31, 2006
-------------------------------
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 October 31, 2006, The St. Joe Company (the "Company") issued a press release
announcing the Company's financial results for the quarter ended September 30,
2006. 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 October 31, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE ST. JOE COMPANY
Dated: October 31, 2006 By: /s/ Michael N. Regan
------------------------------
Michael N. Regan
Senior Vice President -
Finance and Planning
Exhibit 99.1
The St. Joe Company Reports Third Quarter 2006 Net Income of $0.08 Per Share,
after $0.10 Per Share Charges Relating to Florida Homebuilding Exit and
Corporate Reorganization
Challenging Conditions Continue in Residential Real Estate Markets
JOE Maintaining 2006 Guidance at Low End of Range, Before Charges
JOE Discontinuing Earnings Guidance in 2007; Continuing Focus on
Long-Term Value Creation
FAA Issues Record of Decision Approving Relocation of Panama City
Airport
JACKSONVILLE, Fla.--(BUSINESS WIRE)--Oct. 31, 2006--The St. Joe
Company (NYSE:JOE) today announced that its Net Income for the third
quarter of 2006 was $6.0 million, or $0.08 per share, compared to
$36.1 million, or $0.47 per share, for the third quarter of 2005.
Included in the third quarter results are charges of $13.1 million
pretax (or $0.10 per share after tax) related to JOE's exit from the
homebuilding business in Florida and corporate reorganization. All per
share references in this release are presented on a diluted basis.
Net Income for the first nine months of 2006 was $28.7 million, or
$0.39 per share, compared to $89.4 million, or $1.17 per share, for
the first nine months of 2005. Also included in the nine-month results
are charges of $13.1 million pretax (or $0.10 per share after tax)
related to JOE's exit from the homebuilding business in Florida and
corporate reorganization.
"We continue to face challenging conditions in our Florida
residential markets, but particularly in JOE's resort markets," said
JOE chairman and CEO Peter S. Rummell. "The inventory of new and
existing homes in the marketplace remains high. We continue to believe
it could take until 2008 before a supply-demand balance begins to
return. In general, activity remains slow in JOE markets, reflecting
broader market conditions in Florida and across the nation."
"Though slow, there has been some limited activity at our resort
communities recently," said Rummell. "During the third quarter we've
seen sales activity at our Northwest Florida resort and seasonal
projects across a full range of product lines and a broad spectrum of
price points, including several homes and home sites priced over $1
million. As we enter the off-season in Northwest Florida, we will
continue to closely watch market conditions in preparation for the
next selling season that begins next spring."
"Rural land sales produced solid results with higher per-acre
pricing, but with fewer and larger transactions," said Rummell. "We
have a steady pipeline of land sales extending into early next year.
Our FloridaWild product is generating interest from private buyers in
addition to government and conservation organizations. We've been able
to maintain good per-acre pricing with this strategy."
"We continue to see a healthy level of interest in commercial
opportunities, particularly in the Panama City Beach area," said
Rummell. "We are in active discussions with a number of nationally
recognized commercial developers and retailers, and are very
optimistic about Northwest Florida's long-term potential. We are
developing retail relationships that we intend to leverage across
JOE's landholdings."
"During the third quarter, JOE closed its second major multifamily
land transaction within the last year with Trammell Crow, selling them
25.5 acres for $5.5 million to bring an additional 360 rental units to
the Panama City Beach market," said Rummell. "Previously, Trammell
Crow closed on 20 multifamily acres where they have started
construction of 360 rental units due to be completed in early 2007."
JOE Expands Role of Homebuilders and Exits Florida Homebuilding
"During the third quarter, JOE announced that it was exiting
homebuilding in Florida to focus on maximizing the value of its
landholdings through place making," said Rummell. "Early on,
homebuilding was a necessary component for our place making strategy,
particularly in Northwest Florida. We consider the exit from
homebuilding a significant milestone in the maturity of our business
and our markets."
"Place making begins with land classification and includes
entitlements, planning and development of the horizontal
infrastructure and amenities in our towns and resorts," said JOE's
Chief Operating Officer, Britt Greene. "For the last several years,
JOE has built homes in our towns in part because there was limited
homebuilding capacity in the region. As our Northwest Florida markets
have matured, homebuilding capacity from national, regional and local
homebuilders has expanded significantly."
"This decision allows JOE to focus on what it does best, long-term
value creation," said Greene. "We will continue to conceive, entitle
and plan towns and resorts, but instead of JOE taking the final step
of building a home for a consumer, we will work with national,
regional and local homebuilders to deliver that end product,
leveraging the experience and expertise of leading homebuilders."
"Already we have entered into significant agreements with Beazer
Homes and David Weekley Homes," said Greene. "At the same time, we are
maintaining our relationships with preferred local and regional
builders in our resort, seasonal and primary communities. We are also
in discussions with a number of other homebuilders."
During the third quarter, homebuilder D.R. Horton Homes elected
not to exercise its option for 83 home sites at Hawks Landing in Bay
County. David Weekley Homes, however, has since placed options on
improved terms on all of these home sites.
See Table 5 below for additional information on our residential
sales activity. See Table 8 for additional information on national
homebuilder activity.
Corporate Reorganization Positions JOE for the Future
"During the third quarter, JOE completed a corporate
reorganization designed to position the company for the years ahead,"
said Rummell. "As JOE has matured - and more importantly, as the
markets where we operate have matured - our ability to move our land
to its highest and best use is directly related to our ability to
generate a range of activity within a specific geographic region. Our
new organization will facilitate the development of groups of projects
with multifaceted real estate product types woven tightly together in
a way that makes JOE's Florida an even better place to live, work and
play. Our new organizational structure will also allow us to operate
more efficiently while getting full value from the extraordinary
talent we have assembled."
"Earlier this year, I mentioned that we would be filling key
leadership positions from within JOE," said Rummell. "During the third
quarter, we announced that Britt Greene, formerly president of St. Joe
Towns & Resorts and St. Joe Commercial, was named JOE's Chief
Operating Officer and Chris Corr, formerly JOE's senior vice president
for strategic planning, was named Chief Strategy Officer. I have long
believed that JOE has one of the deepest, most talented management
teams in the business, and I am pleased we were able to fill these
critical management positions from within our organization."
As a result of the reorganization, JOE's business segment names
have been changed from St. Joe Towns & Resorts, St. Joe Commercial and
St. Joe Land Company to residential real estate, commercial real
estate and land sales, respectively. In addition, the RiverCamps
product line is now included in the residential real estate segment.
FAA Issues Record of Decision Approving Relocation of Panama City
Airport
On September 15, the Federal Aviation Administration (FAA) issued
its Record of Decision (ROD) approving the relocation of the Panama
City - Bay County International Airport. The FAA's decision comes
after five years of analysis and marks the most significant milestone
to date in the effort to relocate the airport to a site in west Bay
County, on land to be donated by JOE.
JOE has agreed to donate 4,000 acres to the Panama City - Bay
County International Airport and Industrial District when all permits
and funding for relocation are in place. Significant regulatory steps
remain before construction of the relocation of the airport can begin.
The relocation is also dependent on adequate funding.
JOE Agrees to Sell Rights-of-Way to Florida Department of
Transportation
In October, JOE agreed to sell approximately 4,000 acres in
Northwest Florida to the Florida Department of Transportation (FDOT)
to be used for rights-of-way for future road and highway construction
in the region. JOE will receive $46.0 million in cash from this
transaction which is scheduled to close in the next few days.
Accounting gain will be recognized over time as the FDOT completes the
design and engineering of individual roadway segments and the land is
conveyed to the FDOT, a process that is likely to take many years to
complete.
"This agreement provides long-term benefits to Florida taxpayers,
residents of Northwest Florida, travelers and JOE," said Chris Corr,
JOE's Chief Strategy Officer. "This transaction will enhance the
highway network across Northwest Florida. Taxpayers benefit by locking
in today's land prices; residents and travelers will benefit because
the land will be there when new roads are needed in the future. JOE
benefits by gaining a greater degree of predictability about future
transportation corridors."
Entitlements Pipeline Stands at Approximately 43,600
On September 30, JOE owned approximately 820,000 acres,
concentrated primarily in Northwest Florida. These holdings included
approximately 330,000 acres within 10 miles of the coast of the Gulf
of Mexico and approximately 490,000 acres outside the 10-mile coastal
perimeter, including approximately 47,000 acres in southwest Georgia.
Also, on September 30, JOE had land-use entitlements in hand or in
process for approximately 43,600 residential units and approximately
15.1 million square feet of commercial space. An additional 637 acres
is zoned for commercial uses. These entitlements are on approximately
57,000 acres. The number of residential units declined by
approximately 400 units from June 30, due to sales and changes in
project plans.
During the third quarter, the city of Mexico Beach approved a
comprehensive plan amendment for Bonfire Beach, a 750-unit project on
550 acres along approximately 4,600 feet of white-sand beaches in
eastern Bay County. The project also includes 70,000 square feet of
commercial space.
During October, the Leon County Commission and the Tallahassee
City Commission both approved the transmittal of comprehensive plan
amendments associated with the Southside Development of Regional
Impacts to the Florida Department of Community Affairs. Southside is a
1,625-acre project in south Tallahassee being planned for 2,800 units
and 1.15 million square feet of commercial space.
"JOE's experience and expertise in gaining entitlements is - and
will remain - a significant advantage in the years ahead," said Corr.
"It will never get easier to entitle land in Florida; it will only get
more difficult. Our land inventory, combined with our entitlement
skills, makes JOE an important long-term partner for homebuilders and
multifamily, commercial and industrial developers."
See Tables 1, 2, and 3 below for additional information about our
entitlements currently in hand or in process.
JOE Helping Improve Regional Quality of Life
In September, Sacred Heart Health System announced it expects to
begin construction next year on a 25-bed hospital and medical office
building in Port St. Joe to provide needed health care to residents of
Gulf County and Franklin County. JOE has been working closely with
Sacred Heart Health Systems and Gulf County officials on this project.
JOE is providing a 19-acre site and the infrastructure required for
the new hospital, now expected to open in 2008.
"We are proud to have played an integral role in bringing Sacred
Heart Health Systems to Gulf County," said Corr. "For decades,
Northwest Florida has been an underserved health care market. Now,
with a regional partner like Sacred Heart, residents of the region are
gaining access to quality health care."
OUTLOOK
Maintaining 2006 Guidance at Low End of Range, Before Charges
"We expect earnings for 2006, before restructuring charges, to be
at the lower end of our previously stated range of $0.70 to $1.05,"
said Anthony M. Corriggio, JOE's Chief Financial Officer. "With
several land sale transactions in various phases of due diligence, and
given the challenges in our residential markets, the potential for
meaningful variability in this estimate remains."
Discontinuing Earnings Guidance in 2007; Continuing Focus on
Long-term Value Creation
"While we are continually seeking to achieve and expedite value
realization through sales and earnings, we also recognize that
excessive focus on short term results can be counterproductive to
effectively executing a long-term value creation strategy," said
Corriggio. "The Company's primary focus continues to be on creating
long-term value by moving significant portions of our unique, low
basis land holdings to higher and better uses through strategic
planning, securing land use entitlements and facilitating
infrastructure improvements."
"With the reorganization and exit from Florida homebuilding, JOE's
focus is even more clearly directed towards long-term value creation
through the entitlement, planning and development of our land
holdings," said Corriggio. "Inherently, land development and sales
transactions tend to be complex, `lumpy' and difficult to predict from
a timing perspective. Combined with the current challenges in the
residential markets and the resulting decrease in visibility regarding
future transactions, earnings guidance has become less certain and
less meaningful."
"For all of these reasons, we do not intend to issue numerical
earnings guidance beginning in 2007," said Corriggio. "While we will
discuss our outlook for 2007 in the fourth quarter release, we thought
it important to communicate our expectations regarding the issuance of
numerical guidance as early as possible."
Expected Savings Generated From Reorganization Activity
"The third quarter charges related to the exit from Florida
homebuilding and the corporate reorganization were $13.1 million, or
$0.10 per share after tax," said Corriggio. "Projected payroll and
related cost savings from the reorganization are estimated to be about
$6 million annually. The annualized reduction in cost of direct
payroll and associated expenses related to the exit from Florida
homebuilding is expected to be approximately $10 million."
Remainder of 2006 Outlook
Residential Real Estate
"Elevated resale inventories and limited transaction activity
continue to adversely affect sales in the majority of our markets,"
said Corriggio. "We do, however, expect improved earnings from the
residential segment in the fourth quarter as compared to the third
quarter as a number of residential contracts close, including several
for higher-end resort product at WaterSound Beach and SummerCamp."
"In addition to the transaction with David Weekley Homes, we
continue to work toward additional transactions with public and
private, regional and national homebuilders, and we expect to announce
further activity prior to the end of 2006," said Corriggio.
Commercial Real Estate
"Commercial land sales and closing activity has been solid and
in-line with the expectations outlined in last quarter's release,"
said Corriggio. "In addition to the transactions closed in the third
quarter, we expect this segment to deliver approximately $12 million
to $15 million in pretax gain in the fourth quarter through an array
of land sale transactions that are under contract and scheduled to
close by year end."
Land Sales
"Fourth quarter results in the land sales segment are expected to
meet or exceed their highest level in the year thus far, as several
meaningful transactions involving WoodLands products are expected to
close late in the year," said Corriggio. "The potential does exist,
however, for one or more of these transactions to fall into the first
quarter of 2007. We have also conducted a marketing process for the
sale of approximately 47,000 acres of land in Georgia, and we are in
discussions with a potential purchaser of that property."
Capital Investment
"We have adjusted our capital investment plans in light of current
market conditions," said Corriggio. "On a community by community
basis, we are attempting to match investment in infrastructure and
amenities with demand from consumers and homebuilders for finished
home sites. We continue to review all capital investment decisions in
order to properly pace development to meet the market as well as bring
quality first phases in our next-generation projects to the point of
sale in an efficient manner. We continue to expect construction
spending at WaterSound, WindMark Beach, SummerCamp, RiverTown and
SevenShores to total approximately $150 million over the twelve month
period spanning from the third quarter of 2006 to the third quarter of
2007. We believe this represents the bulk of the investment capital
necessary to ready the initial phase of product for sale in these
communities. The amount above does not include spending for vertical
construction at SevenShores, which will not start until we satisfy
internally-set presale requirements."
Senior Notes
"As previously disclosed, we entered into an amendment to our 2002
senior notes on July 28, 2006 to better align certain covenants with
those contained in our revolving credit facility," said Corriggio. "A
condition to that amendment is the prepayment of our outstanding 2004
senior notes in the aggregate principal amount of $100 million. On
October 16, we notified the noteholders that we will prepay the 2004
senior notes on November 15, 2006. Additional details regarding these
events can be found in our Forms 8-K filed on July 31 and October 18."
DIVIDENDS AND STOCK REPURCHASE
A quarterly cash dividend of $0.16 per share of common stock was
paid on September 29 to shareholders of record at the close of
business on September 15.
On September 30, 74,319,391 JOE shares were outstanding. The
number of weighted-average diluted shares in the third quarter of 2006
was 73,927,941.
During the third quarter of 2006, JOE expended an aggregate of
$17.5 million for dividends and the acquisition of its shares. JOE
acquired 118,105 of its shares at a cost of $5.7 million, an average
price of $47.92 per share. On September 30, approximately $103.8
million remained of the Company's stock repurchase authorization.
Table 4 below contains additional information on JOE's repurchase
activity since 1998.
Lowering Range of Anticipated Share Repurchase Activity for 2006
During the first three quarters of 2006, JOE expended an aggregate
of $89.2 million for dividends and the acquisition of its shares. The
Company now expects to expend a total of $100 to $125 million in 2006
for dividends and acquisition of its shares, down from the previously
anticipated range of $125 to $175 million for the year.
"We continue to view our dividend and repurchase program as an
important component in ultimately delivering shareholder value created
at the Company, and expect to continue to be in the market for our
shares as appropriate," said Corriggio. "However, we are also mindful
of the challenges presented by the current environment and believe it
is prudent to take a deliberate and measured approach regarding share
repurchase activity over the near term until the depth and duration of
the current downturn in the residential market is more readily
discernible."
SEGMENT RESULTS
RESIDENTIAL REAL ESTATE
Pretax income (loss) from continuing operations for JOE's
residential real estate segment was $(4.4) million for the third
quarter of 2006, compared to $30.5 million in the third quarter last
year. Third quarter 2006 results include restructuring charges of
$11.9 million. These results exclude income from unconsolidated
affiliates.
In the third quarter, residential real estate closed on the sales
of 447 units and generated revenues from housing and home sites of
$121.0 million, compared to 641 units and $164.0 million,
respectively, in the third quarter of 2005. See Table 5 below for
additional information on our residential sales activity.
JOE accepted contracts for 179 homes and 154 home sites in the
third quarter of 2006, compared to 387 homes and 130 home sites in the
third quarter last year. The decrease in home contracts is due to
slowing sales in our primary residential communities, particularly
those located in central Florida and the Mid-Atlantic. The increase in
home site contracts reflects our growing homebuilder relationships.
See Table 6 below for additional information on units placed under
contract.
The backlog of home sites and homes under contract was 458 units
as of September 30, 2006, compared to 1,069 units as of September 30,
2005. As a result of the slower sales pace in 2006, the backlog
continued to be reduced in the third quarter as closings of units far
outpaced units placed under contract. We are also in a transition
stage in several of our high-volume projects, with Paseos, Rivercrest,
St. Johns Golf & Country Club and Artisan Park all nearing sell-out.
See Table 7 below for additional backlog information.
For the third quarter, the average margin for home sites and homes
was 52.9 percent and 17.6 percent, compared to 71.8 percent and 17.1
percent, respectively, for the same period in 2005. The contraction of
home site margins reflects the sales of lower priced products in our
primary residential communities to homebuilders and fewer sales of
higher-end resort products.
JOE continues to expand the role of national homebuilders in our
communities. See Table 8 below for additional information on
homebuilder activity. Additional information on project activity is in
Table 9 below.
The historical results of operations of RiverCamps on Crooked
Creek have been reclassified from the land sales segment to the
residential real estate segment to conform to the current period's
presentation.
During the third quarter, Travel + Leisure readers chose the
WaterColor Inn as their number-one favorite family resort in the
United States. The award was announced in the September 2006 issue of
the magazine.
Also during the third quarter, 3.6 miles of relocated U.S. 98
within WindMark Beach were opened to traffic. JOE took title to the
roadbed of the original highway and plans to restore the dune
structure with one of the longest beachfront trail systems in Florida.
JOE's alliance with Southern Progress Corporation generated
significant coverage for JOE communities and products during the third
quarter. The Southern Living and Progressive Farmer 2006 Idea House
program featured a house built at WhiteFence Farms in Tallahassee. The
Southern Accents 2006 Showhouse at WindMark Beach was featured in the
August edition of the magazine. During 2006, the Idea House and
Showhouse programs generated nearly 20,000 visitors to JOE communities
and dozens of pages of editorial coverage of JOE communities and
products.
COMMERCIAL REAL ESTATE
Pretax income from continuing operations for the commercial
segment was $7.8 million for the third quarter of 2006, compared to
$14.1 million in the same quarter of 2005.
Pretax income from discontinued operations for the third quarter
of 2006 was $10.7 million, compared to $14.8 million in the third
quarter of 2005. See Table of Quarterly Discontinued Operations below
for net-of-tax results.
"With Trammell Crow's 360-unit multifamily development under
construction, combined with Simon Property Group's accelerated
development of Pier Park, new momentum is coming to the Panama City
Beach market," said Greene. "The Pier Park Target store is now open,
and vertical construction has begun on the core shopping area. As the
Trammell Crow units and the shopping complex come on line, we expect
to see increased real estate activity near Pier Park, where JOE has
additional out parcels and other property."
"We are seeing continued velocity at Beach Commerce Park in Bay
County," said Greene. "The first phase of Beach Commerce Park is
substantially sold out, and we are now selling product in the second
phase where we closed a $2.3 million transaction during the third
quarter. Momentum and economic activity at Beach Commerce Park
continues to build with more than 500 jobs at various businesses
there."
Information on JOE's commercial land sales activity can be found
in Table 10 below.
Investment Portfolio
On September 29, 2006, JOE closed on the sale of One Crescent
Ridge in Charlotte, North Carolina. The 158,000 square foot office
building was sold for a gross sales price of $31.3 million, or $197
per square foot. Originally acquired in July 2003, the pretax gain on
the transaction was $10.6 million. Table 11 contains information on
JOE's portfolio of office buildings.
LAND SALES
The land sales segment had pretax income from continuing
operations of $12.2 million in the third quarter of 2006, compared to
$11.7 million in the third quarter of 2005.
WoodLands
Sales of WoodLands, JOE's rural recreational land, totaled $7.2
million for 2,127 acres at an average price of $3,400 per acre,
compared to $13.2 million for 6,326 acres at an average price of
$2,100 per acre in the third quarter of 2005.
Additional information on JOE's land sales activity can be found
in Table 12 below.
TABLES AND DATA
Table 1 summarizes JOE's Florida residential and mixed-use
projects with land-use entitlements as of September 30, 2006. This
table includes multifamily projects, which are marketed by our
commercial group. Also detailed in the table are commercial
entitlements, in terms of square feet, that are entitled as part of
JOE's mixed-use projects. These commercial entitlements include
retail, office and industrial uses.
Table 1
Summary of Land-Use Entitlements (1)
Active JOE Residential and Mixed-Use Projects in Florida
September 30, 2006
Residential
Units Closed
Class. Project Project Since
Project (2) County Acres Units (3) Inception
- --------------- ------ --------- ----------- ---------- --------------
In Development:
(6)
- ---------------
Artisan Park
(7) PR Osceola 175 616 445
Bridgeport PR Gulf 15 37 36
Cutter Ridge PR Franklin 10 25 --
Hawks Landing PR Bay 88 168 28
Landings at
Wetappo RR Gulf 113 24 7
Palmetto Trace PR Bay 141 481 449
Paseos (7) PR Palm
Beach 175 325 319
RiverCamps on
Crooked Creek RS Bay 1,491 408 182
Rivercrest (7) PR Hills-
borough 413 1,382 1,297
RiverSide at
Chipola RR Calhoun 120 10 2
RiverTown PR St. Johns 4,170 4,500 --
SevenShores
(Perico Island) RS Manatee 192 686 --
SouthWood VAR Leon 3,370 4,770 2,024
St. Johns Golf
& Country Club PR St. Johns 880 799 777
SummerCamp RS Franklin 762 499 73
The Hammocks PR Bay 133 457 453
Victoria Park PR Volusia 1,859 4,200 1,085
WaterColor RS Walton 499 1,140 868
WaterSound VAR Walton 2,425 1,432 14
WaterSound
Beach RS Walton 256 511 411
WaterSound West
Beach RS Walton 62 199 13
WindMark Beach RS Gulf 2,020 1,662 121
----------- ---------- --------------
Subtotal 19,369 24,331 8,604
----------- ---------- --------------
In Pre-
Development:
(6)
- ---------------
Avenue A PR Gulf 6 96 --
Bayview Estates PR Gulf 31 45 --
Bayview
Multifamily PR Gulf 20 300 --
Beckrich NE PR Bay 15 70 --
Boggy Creek PR Bay 630 526 --
College Station PR Bay 567 800 --
East Lake Creek PR Bay 81 313 --
East Lake
Powell RS Bay 181 360 --
Hills Road RS Bay 30 356 --
Howards Creek RR Gulf 8 33 --
Laguna Beach
East PR Bay 25 360 --
Laguna Beach
West PR Bay 59 382 --
Long Avenue PR Gulf 10 30 --
Palmetto Bayou PR Bay 58 217 --
ParkPlace PR Bay 118 260 --
ParkSide PR Bay 48 480 --
Pier Park NE VAR Bay 57 460 --
Pier Park
Timeshare RS Bay 13 125 --
Port St. Joe
Town Center VAR Gulf 180 624 --
Powell Adams RS Bay 32 1,425 --
RiverCamps on
Sandy Creek RS Bay 6,500 624 --
Sabal Island RS Gulf 45 18 --
The Cove RR Gulf 57 81 --
Timber Island
(8) RS Franklin 49 407 --
Topsail VAR Walton 115 627 --
Wavecrest RS Bay 7 95 --
WestBay Corners
SE VAR Bay 100 524 --
WestBay Corners
SW PR Bay 64 160 --
WestBay DSAP VAR Bay 15,089 5,628 --
WestBay Landing VAR Bay 950 214 --
WhiteFence
Farms, Red
Hills RR Leon 373 61 --
----------- ---------- --------------
Subtotal 25,518 15,701 --
----------- ---------- --------------
Total 44,887 40,032 8,604
=========== ========== ==============
Residential
Units Under Total Remaining
Contract Residential Commercial
Class. as of Units Entitlements
Project (2) County 9/30/06(4) Remaining(4) (Sq.Ft.)(5)
- --------------- ------ -------------------- ------------- ------------
In Development:
(6)
- ---------------
Artisan Park
(7) PR Osceola 86 85 --
Bridgeport PR Gulf -- 1 --
Cutter Ridge PR Franklin -- 25 --
Hawks Landing PR Bay 21 119 --
Landings at
Wetappo RR Gulf -- 17 --
Palmetto Trace PR Bay -- 32 --
Paseos (7) PR Palm
Beach 2 4 --
RiverCamps on
Crooked Creek RS Bay -- 226 --
Rivercrest (7) PR Hills-
borough 73 12 --
RiverSide at
Chipola RR Calhoun -- 8 --
RiverTown PR St. Johns -- 4,500 500,000
SevenShores
(Perico Island) RS Manatee 9 677 9,000
SouthWood VAR Leon 31 2,715 5,399,460
St. Johns Golf
& Country Club PR St. Johns 4 18 --
SummerCamp RS Franklin 3 423 25,000
The Hammocks PR Bay 1 3 --
Victoria Park PR Volusia 26 3,089 854,254
WaterColor RS Walton 1 271 47,600
WaterSound VAR Walton 1 1,417 457,380
WaterSound
Beach RS Walton 17 83 29,000
WaterSound West
Beach RS Walton -- 186 --
WindMark Beach RS Gulf 4 1,537 75,000
----------- ------------- ------------
Subtotal 279 15,448 7,396,694
----------- ------------- ------------
In Pre-
Development:
(6)
- ---------------
Avenue A PR Gulf -- 96 --
Bayview Estates PR Gulf -- 45 --
Bayview
Multifamily PR Gulf -- 300 --
Beckrich NE PR Bay -- 70 --
Boggy Creek PR Bay -- 526 --
College Station PR Bay -- 800 --
East Lake Creek PR Bay -- 313 --
East Lake
Powell RS Bay -- 360 --
Hills Road RS Bay -- 356 --
Howards Creek RR Gulf -- 33 --
Laguna Beach
East PR Bay -- 360 --
Laguna Beach
West PR Bay -- 382 --
Long Avenue PR Gulf -- 30 --
Palmetto Bayou PR Bay -- 217 90,000
ParkPlace PR Bay -- 260 --
ParkSide PR Bay -- 480 --
Pier Park NE VAR Bay -- 460 190,000
Pier Park
Timeshare RS Bay -- 125 --
Port St. Joe
Town Center VAR Gulf -- 624 500,000
Powell Adams RS Bay -- 1,425 --
RiverCamps on
Sandy Creek RS Bay -- 624 --
Sabal Island RS Gulf -- 18 --
The Cove RR Gulf -- 81 --
Timber Island
(8) RS Franklin -- 407 14,500
Topsail VAR Walton -- 627 300,000
Wavecrest RS Bay -- 95 --
WestBay Corners
SE VAR Bay -- 524 50,000
WestBay Corners
SW PR Bay -- 160 --
WestBay DSAP VAR Bay -- 5,628 4,330,000
WestBay Landing VAR Bay -- 214 --
WhiteFence
Farms, Red
Hills RR Leon -- 61 --
----------- ------------- ------------
Subtotal -- 15,701 5,474,500
----------- ------------- ------------
Total 279 31,149 12,871,194
=========== ============= ============
(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.
(2) Current JOE land classifications:
- -- PR - Primary residential.
- -- RS - Resort and seasonal residential, which includes RiverCamps.
- -- RR - Rural residential, which includes WhiteFence Farms, Homesteads
and other rural residential products.
- -- VAR - Includes multiple classifications. For example, a project may
have substantial commercial and residential acres.
(3) Project units represent the maximum number of units entitled or
currently expected at full build-out. The actual number of units or
square feet to be constructed at full build-out may be lower than the
number entitled or currently expected.
(4) Excludes our Mid-Atlantic region that includes activity in North
and South Carolina where we are primarily engaged in homebuilding,
and not obtaining entitlements. As of September 30, 2006, the Mid-
Atlantic region had 1,673 home sites owned or under contract. Of that
total, 245 have been sold and 1,428 remain to be sold.
(5) Represents the remaining square feet with land-use entitlements as
designated in a development order or expected given the existing
property land use or zoning and present plans. Commercial
entitlements include retail, office and industrial uses. Industrial
uses total 6,128,381 square feet including SouthWood, RiverTown and
the West Bay DSAP.
(6) A project is "in development" when construction on the project has
commenced. A project in "pre-development" has land-use entitlements
but is still under internal evaluation or requires one or more
additional permits prior to the commencement of construction.
(7) Artisan Park is 74 percent owned by JOE. Paseos and Rivercrest are
each 50 percent owned by JOE.
(8) Timber Island entitlements include seven residential units and 400
units for hotel or other transient uses (including units held with
fractional ownership such as private residence clubs) and include 480
wet/dry marina slips.
Table 2 details the proposed JOE residential and mixed-use
projects in the land-use entitlements process in Florida.
Table 2
Proposed JOE Residential and Mixed-Use Projects
In the Land-Use Entitlement Process in Florida (1)
September 30, 2006
Estimated
Estimated Commercial
Class. Project Project Entitlements
Project (2) County Acres Units (3) (Sq. Ft.)(3)
- ----------------- ------- --------- --------- ---------- -------------
Bonfire Beach RS Bay 550 750 70,000
Breakfast Point VAR Bay 1,448 3,100 635,000
Carrabelle East PR Franklin 200 600 --
Country Walk RR Bay 1,300 125 --
DeerPoint Cedar
Grove PR Bay 599 750 --
SouthSide VAR Leon 1,625 2,800 1,150,000
South Walton
Multifamily PR Walton 40 212 --
Star Avenue North VAR Bay 271 1,248 380,000
St. James Island
McIntyre RR Franklin 1,704 340 --
St. James Island
RiverCamps RS Franklin 2,500 500 --
St. James Island
Granite Point RS Franklin 1,000 2,000 --
--------- ---------- -------------
Total 11,237 12,425 2,235,000
========= ========== =============
(1) A project is deemed to be in the land-use entitlement process when
customary steps necessary for the preparation and submittal of an
application, such as conducting pre-application meetings or similar
discussions with governmental officials, have commenced and/or an
application has been filed. All projects listed have significant
entitlement steps remaining that could affect their timing, scale and
viability. There can be no assurance that these entitlements will
ultimately be received.
(2) Current JOE land classifications:
- -- PR - Primary residential.
- -- RS - Resort and seasonal residential, which includes RiverCamps.
- -- RR - Rural residential, which includes WhiteFence Farms, Homesteads
and other rural residential products.
- -- VAR - Includes multiple classifications. For example, a project may
have substantial commercial and residential acres.
(3) The actual number of units or square feet to be constructed at
full build-out may be lower than the number ultimately entitled.
Table 3 is a summary of the additional commercial land-use
entitlements.
Table 3
Summary of Additional Commercial Land-Use Entitlements (1)
(Commercial Projects Not Included in Tables 1 and 2 Above)
Active JOE Florida Commercial Projects
September 30, 2006
Acres Under
Acres Sold Contract Total
Project Since As of Acres
Project County Acres Inception 9/30/06 Remaining
- ----------------- --------- -------- ---------- ----------- ----------
Airport Commerce Leon 45 -- 2 43
Airport Road Franklin 13 -- -- 13
Alf Coleman
Retail Bay 25 15 1 9
Avery St. Retail Bay 10 -- 10 --
Beach Commerce Bay 157 147 2 8
Beach Commerce II Bay 112 11 -- 101
Beckrich Office
Park Bay 12 8 4 --
Beckrich Retail Bay 47 18 -- 29
Cedar Grove
Commerce Bay 51 -- -- 51
Franklin
Industrial Franklin 7 -- -- 7
Glades Retail Bay 14 -- -- 14
Gulf Boulevard Bay 76 21 -- 55
Hammock Creek
Commerce Gadsden 165 27 -- 138
Mill Creek
Commerce Bay 37 -- -- 37
Nautilus Court Bay 11 4 -- 7
Port St. Joe
Commerce II Gulf 39 9 -- 30
Port St. Joe
Commerce III Gulf 54 -- -- 54
Port St. Joe
Medical Gulf 19 -- -- 19
Powell Hills
Retail Bay 44 -- 44 --
South Walton
Commerce Walton 39 15 2 22
-------- ---------- ----------- ----------
Total 977 275 65 637
======== ========== =========== ==========
(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. Includes
significant JOE projects that are either operating, under development
or in the pre-development stage.
Table 4 summarizes the company's stock repurchase activity from
1998 through September 30, 2006.
Table 4
Stock Repurchase Activity
Through September 30, 2006
Shares
---------------------------------------
Total Cost
(in Average
Period Purchased Surrendered (1) 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 3,517,066 -- 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 1,705,000 68,648 1,773,648 124.8 70.33
2006
(through
Sept. 30) 948,200 74,601 1,022,801 53.4 52.14
----------- --------------- ----------- ------------ -------
Total/
Weighted
Average 27,945,611 2,179,743 30,125,354 $924.9 $30.68
=========== =============== =========== ============ =======
(1) Shares surrendered by company executives as payment for the strike
price and taxes due on exercised stock options and the vesting of
restricted stock.
Tables 5 and 6 summarize sales activity for residential real
estate for the third quarter of 2006 compared to the same period in
2005. Table 7 details backlog for residential real estate.
Table 5
Residential Real Estate
Sales Activity
For the Three Months
Ended September 30,
($ in millions)
2006 2005
------------------------------- --------------------------------
Number Cost of Number Cost of
of Units Sales Gross of Units Sales Gross
Closed Revenue (1) Profit Closed Revenue (1) Profit
-------- ------- ------- ------ -------- ------- ------- -------
Home
Sites
(2) 134 $20.4 $9.6 $10.8 138 $29.1 $8.2 $20.9
Homes
(3) 313 100.6 82.9 17.7 503 134.9 111.8 23.1
-------- ------- ------- ------ -------- ------- ------- -------
Total 447 $121.0 $92.5 $28.5 641 $164.0 $120.0 $44.0
======== ======= ======= ====== ======== ======= ======= =======
(1) Cost of sales for home sites in the third quarter of 2006
consisted of $8.2 million in direct costs, $0.6 million in selling
costs and $0.8 million in indirect costs. Cost of sales for home
sites in the third quarter of 2005 consisted of $6.4 million in
direct costs, $1.0 million in selling costs and $0.8 million in
indirect costs. Cost of sales for homes in the third quarter of 2006
consisted of $70.6 million in direct costs, $5.1 million in selling
costs and $7.2 million in indirect costs. Cost of sales for homes in
the third quarter of 2005 consisted of $94.8 million in direct costs,
$7.0 million in selling costs and $10.0 million in indirect costs.
(2) Profit has been deferred as a result of continuing development
obligations at SummerCamp, WaterSound West Beach, and RiverCamps at
Crooked Creek. As a consequence, revenue recognition and closings may
occur in different periods.
(3) Homes include single-family, multifamily and Private Residence
Club (PRC) units. Multifamily and PRC revenue is recognized, if
preconditions are met, on a percentage-of-completion basis. As a
consequence, revenue recognition and closings may occur in different
periods. Percentage-of-completion accounting was utilized at Artisan
Park in the third quarter of 2006 and Artisan Park, WaterColor and
WaterSound Beach in the third quarter of 2005. Paseos and Rivercrest,
two joint ventures 50 percent owned by JOE, are not included. Sales
are substantially complete at both of these communities.
Table 6
Residential Real Estate
Units Placed Under Contract
For the Three Months
Ended September 30,
2006 2005 Percentage Change
---------- ---------- -----------------
Home Sites 154 130 18.5 %
Homes (1) 179 387 (53.7)
---------- ---------- -----------------
Total (1) 333 517 (35.6) %
========== ========== =================
(1) Homes include single-family homes, multifamily and PRC units.
Paseos and Rivercrest, two unconsolidated joint ventures, are not
included. Sales are substantially complete at both of these
communities.
Table 7
Residential Real Estate
Backlog (1) (2)
($ in millions)
September 30, 2006 September 30, 2005
------------------- -------------------
Units Revenues Units Revenues
--------- --------- --------- ---------
Home Sites 38 $7.5 28 $4.6
Homes (3) 420 157.4 1,041 354.7
--------- --------- --------- ---------
Total 458 $164.9 1,069 $359.3
========= ========= ========= =========
(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 $17.8 million for
75 units at the end of the third quarter of 2006, compared to $142.5
million for 559 units at the end of the third quarter of 2005. Sales
are substantially complete at both of these communities.
(2) Excludes national homebuilder units included in Table 8.
(3) As of September 30, 2006, there were 61 units subject to
percentage-of-completion accounting in the homes backlog with related
revenue of $28.3 million (of which $25.8 million had previously been
recognized in the financial statements). As of September 30, 2005,
there were 202 units subject to percentage-of-completion accounting
with related revenue of $88.5 million (of which $47.1 million had
previously been recognized in the financial statements).
Table 8 summarizes commitments for home site purchases from
national homebuilders.
Table 8
Residential Real Estate
National Homebuilder Summary
April 1, 2006 through October 31, 2006
Remaining
Total Units Total Units Average Price Units
Committed(1) Closed to Date Closed Units To Close (2)
------------ -------------- ------------- -------------
Beazer Homes
Beckrich Point 70 0 N/A 70
Laguna West 350 0 N/A 350
SouthWood 82 22 $40,000 60
Victoria Park 179 0 N/A 179
David Weekley
Homes
Hawks Landing 99 0 N/A 99
Palmetto Trace 56 39 $76,200 17
ParkPlace 70 0 N/A 70
RiverCamps on
Crooked Creek 3 3 $210,000 0
SouthWood 140 0 N/A 140
Victoria Park 66 66 $100,300 0
WaterSound 7 7 $144,200 0
------------ -------------- -------------
Total 1,122 137 985
============ ============== =============
(1) Includes developed home sites and land for single-family and
multifamily units which are under contract or under option.
(2) These units are not included in the data in Table 7.
Table 9 summarizes the sales activity at various residential
communities for the third quarter of 2006 compared to the same period
in 2005.
Table 9
Residential Real Estate Sales Activity
For the Three Months Ended September 30,
($ in thousands)
2006
------------------------------------------------
Units Closed Avg. Price Accepted (1) Avg. Price
------------ ---------- ------------ -----------
Artisan Park (2)
Home Sites 0 $0.0 0 $0.0
Single-Family Homes 9 700.1 7 505.5
Multifamily Homes 35 476.3 1 132.0
Bridgeport
Home Sites 0 0.0 0 0.0
Hampton Park/James
Island
Single Family Homes 0 0.0 0 0.0
Hawks Landing
Home Sites 5 76.0 11 75.9
Palmetto Trace
Home Sites 8 79.6 8 79.7
Single-Family Homes 0 0.0 0 0.0
Paseos (2)
Single-Family Homes 15 578.0 (2) 481.0
RiverCamps on Crooked
Creek
Home Sites 1 275.0 1 275.0
Rivercrest (2)
Single-Family Homes 74 207.6 (8) 239.9
Saussy Burbank
Single-Family Homes 154 292.6 150 273.1
SevenShores
Multifamily Homes 0 0.0 0 0.0
SouthWood
Home Sites 26 50.0 32 61.9
Single-Family Homes 54 294.5 3 336.8
St. Johns G & CC
Home Sites 0 0.0 0 0
Single-Family Homes 16 564.7 9 544.7
SummerCamp
Home Sites 3 309.2 4 318.5
The Hammocks
Home Sites 0 0.0 0 0.0
Single-Family Homes 0 0.0 0 0.0
Victoria Park
Home Sites 67 101.6 67 101.6
Single-Family Homes 41 353.7 (7) 404.2
WaterColor
Home Site 0 0.0 0 0.0
Single/Multifamily
Homes 3 1,078.6 4 1,078.8
PRC Shares 0 0.0 0 0.0
WaterSound
Home Sites 7 180.0 8 178.1
WaterSound Beach
Home Sites 0 0.0 2 1,716.4
Single-Family Homes 1 1,069.0 5 1,335.4
PRC Shares 0 0.0 7 275.0
WaterSoundWest Beach
Home Sites 0 0.0 0 0.0
Single-Family Homes 0 0.0 0 0.0
WindMark Beach
Home Sites 17 257.0 21 242.5
------------ ---------- ------------ -----------
Total 536 $284.0 323 $246.2
============ ========== ============ ===========
2005
------------------------------------------------
Units Closed Avg. Price Accepted (1) Avg. Price
------------ ---------- ------------ -----------
Artisan Park (2)
Home Sites 1 $460.0 1 $460.0
Single-Family Homes 20 465.2 22 662.5
Multifamily Homes 32 293.2 13 528.1
Bridgeport
Home Sites 21 29.9 21 29.9
Hampton Park/James
Island
Single Family Homes 2 374.6 1 399.9
Hawks Landing
Home Sites 0 0.0 0 0.0
Palmetto Trace
Home Sites 0 0.0 0 0.0
Single-Family Homes 33 252.1 18 339.8
Paseos (2)
Single-Family Homes 28 454.6 0 0.0
RiverCamps on Crooked
Creek
Home Sites 25 339.4 25 339.4
Rivercrest (2)
Single-Family Homes 136 166.9 (3) 161.1
Saussy Burbank
Single-Family Homes 195 269.9 221 268.1
SevenShores
Multifamily Homes 0 0.0 0 0.0
SouthWood
Home Sites 12 141.5 8 142.8
Single-Family Homes 64 248.5 30 325.3
St. Johns G & CC
Home Sites 12 74.0 0 0.0
Single-Family Homes 30 437.6 10 504.4
SummerCamp
Home Sites 48 380.0 48 380.0
The Hammocks
Home Sites 0 0.0 0 0.0
Single-Family Homes 19 145.2 13 156.2
Victoria Park
Home Sites 4 76.4 9 123.4
Single-Family Homes 68 279.8 59 317.2
WaterColor
Home Site 5 851.4 6 804.8
Single/Multifamily
Homes 1 782.6 0 0.0
PRC Shares 0 0.0 0 0.0
WaterSound
Home Sites 0 0.0 0 0.0
WaterSound Beach
Home Sites 4 1,361.7 4 1,361.7
Single-Family Homes 39 1,490.5 0 0.0
PRC Shares 0 0.0 0 0.0
WaterSoundWest Beach
Home Sites 6 707.0 8 717.0
Single-Family Homes 0 0.0 0 0.0
WindMark Beach
Home Sites 0 0.0 0 0.0
------------ ---------- ------------ -----------
Total 805 $335.6 514 $327.5
============ ========== ============ ===========
(1) Contracts accepted during the quarter. Contracts accepted and
closed in the same quarter are also included as units closed. Average
prices shown reflect variations in the product mix across time
periods as well as price changes for similar product.
(2) JOE owns 74 percent of Artisan Park and 50 percent of each of
Paseos and Rivercrest. Sales from Paseos and Rivercrest are not
consolidated with the financial results of residential real estate.
Table 10 summarizes JOE's commercial land sales in Northwest
Florida for the third quarters of 2006 and 2005.
Table 10
Commercial Northwest Florida Land Sales
Quarter Ended September 30,
Number of Gross Sales Price Average Price/Acre
Sales Acres Sold (in thousands) (in thousands)
---------- ---------- ------------------ -------------------
2006 7 53 $10,798 $204
2005 11 132 $19,194 $145
Table 11 summarizes JOE's investment property portfolio of office
buildings as of September 30, 2006.
Table 11
Investment Portfolio of Office Buildings
September 30, 2006
Number of Net Rentable Leased
Location Properties Square Feet Percentage
- ------------- -------------- ----------------- --------------
Florida 6 609,000 93 %
Georgia 8 1,289,000 77
Virginia 3 354,000 96
-------------- ----------------- --------------
Total 17 2,252,000 84 %
============== ================= ==============
Table 12 summarizes JOE's land sales in Northwest Florida for the
third quarters of 2006 and 2005.
Table 12
Land Sales
Quarter Ended September 30,
Average
Number of Gross Sales Price Price/Acre
Sales Acres Sold (in thousands) (in thousands)
---------- ---------- ------------------ --------------
2006
WoodLands 13 2,127 $7,186 $3.4
FloridaWild 4 1,783 5,041 2.8
Other 3 119 4,150 34.9
---------- ---------- ------------------ --------------
Total 20 4,029 $16,377 $4.1
========== ========== ================== ==============
2005
WoodLands 19 6,326 13,181 2.1
Homesteads 10 89 1,208 13.6
Other 3 22 1,991 90.5
---------- ---------- ------------------ --------------
Total 32 6,437 $16,380 $2.6
========== ========== ================== ==============
FINANCIAL DATA
($ in millions except per share amounts)
Summary Balance Sheet
September 30, 2006 December 31, 2005
------------------ -------------------
Assets
Investment in real estate $1,218.0 $1,036.2
Cash and cash equivalents 21.7 202.6
Accounts receivable 44.9 58.9
Prepaid pension asset 97.3 95.0
Property, plant and equipment,
net 38.3 40.2
Other assets 153.9 159.0
------------------ -------------------
Total assets $1,574.1 $1,591.9
================== ===================
Liabilities and Stockholders'
Equity
Debt $653.5 $554.4
Accounts payable, accrued
liabilities 206.3 214.4
Deferred income taxes 250.2 315.9
------------------ -------------------
Total liabilities 1,110.0 1,084.7
Minority interest 14.6 18.2
Total stockholders' equity 449.5 489.0
------------------ -------------------
Total liabilities and
stockholders' equity $1,574.1 $1,591.9
================== ===================
Debt Schedule
September 30, 2006 December 31, 2005
------------------- -------------------
Revolving debt facility $95.0 $--
Medium term notes 407.0 407.0
Acquisition and other debt 4.0 14.7
Other collateralized/specific
asset related debt 147.5 132.7
------------------- -------------------
Total debt $653.5 $554.4
=================== ===================
Consolidated Quarterly Comparisons
Quarter Ended Sept. 30, Nine Months Ended Sept. 30,
--------------------------- ---------------------------
2006 2005 2006 2005
------------- ------------- ------------- -------------
Revenues:
Real estate
sales $149.2 206.5 $451.9 $593.4
Rental revenue 10.3 8.7 31.0 26.2
Timber sales 7.2 6.2 23.5 21.8
Other revenues 11.4 12.7 31.6 34.9
------------- ------------- ------------- -------------
Total
revenues 178.1 234.1 538.0 676.3
------------- ------------- ------------- -------------
Expenses:
Cost of real
estate sales 95.6 132.7 290.5 380.2
Cost of rental
revenue 4.4 3.2 12.8 10.2
Cost of timber
sales 5.3 4.9 17.5 15.1
Cost of other
revenues 13.0 10.0 33.3 29.9
Other
operating
expenses 21.4 18.9 59.7 52.1
Corporate
expense, net 11.3 12.4 40.6 36.3
Restructuring
Charge 13.1 -- 13.1 --
Depreciation
and
amortization 9.6 9.1 28.9 26.8
------------- ------------- ------------- -------------
Total
expenses 173.7 191.2 496.4 550.6
------------- ------------- ------------- -------------
Operating
profit 4.4 42.9 41.6 125.7
Other income
(expense) (3.8) (2.1) (8.9) (5.0)
------------- ------------- ------------- -------------
Pretax income
from
continuing
operations 0.6 40.8 32.7 120.7
Income tax
expense (2.3) (15.8) (15.3) (47.7)
Minority
interest
expense (0.7) (1.3) (5.6) (3.4)
Equity in
income of
unconsolidated
affiliates 1.7 3.1 7.3 10.6
Discontinued
operations,
net of tax 6.7 9.3 9.6 9.2
------------- ------------- ------------- -------------
Net income $6.0 $36.1 $28.7 $89.4
============= ============= ============= =============
Net income per
diluted share $0.08 $0.47 $0.39 $1.17
============= ============= ============= =============
Weighted
average
diluted shares
outstanding 73,927,941 76,089,307 74,467,972 76,432,285
============= ============= ============= =============
Quarterly Revenues by Segment
Quarter Ended Sept. 30, Nine Months Ended Sept. 30,
--------------------------- ---------------------------
2006 2005 2006 2005
------------- ------------- ------------- -------------
Residential
Real Estate:
Real estate
sales $120.4 $177.5 $372.9 $497.4
Rental revenue 0.5 0.6 1.4 1.2
Other revenues 11.1 12.5 30.9 34.4
------------- ------------- ------------- -------------
Total
Residential
Real Estate 132.0 190.6 405.2 533.0
------------- ------------- ------------- -------------
Commercial Real
Estate:
Real estate
sales 12.4 26.1 20.5 51.8
Rental revenue 9.8 8.2 29.6 25.0
Other revenues 0.3 0.3 0.7 0.5
------------- ------------- ------------- -------------
Total
Commercial
Real Estate 22.5 34.6 50.8 77.3
------------- ------------- ------------- -------------
Land Sales:
Real estate
sales 16.4 2.7 58.5 44.2
------------- ------------- ------------- -------------
Total Land
Sales 16.4 2.7 58.5 44.2
------------- ------------- ------------- -------------
Forestry Sales 7.2 6.2 23.5 21.8
------------- ------------- ------------- -------------
Total revenues $178.1 $234.1 $538.0 $676.3
============= ============= ============= =============
Quarterly Segment Pretax Income
From Continuing Operations (1)
9/30 6/30 3/31 12/31 9/30 6/30 3/31 12/31 9/30
2006(2) 2006 2006 2005 2005 2005 2005 2004 2004
-------------------------------------------------------
Residential
Real Estate $(4.4)$19.4 $11.7 $24.4 $30.5 $56.8 $25.4 $26.9 $31.5
Commercial Real
Estate 7.8 0.8 0.1 4.7 14.1 2.3 1.1 16.9 2.7
Land Sales 12.2 23.0 11.8 37.4 11.7 10.1 9.7 14.1 11.8
Forestry 1.4 0.9 2.0 0.4 0.6 1.6 2.0 2.1 1.9
Corporate and
other (16.4)(17.3)(20.3)(15.0)(16.1)(15.3)(13.8)(17.0)(13.6)
-------------------------------------------------------
Pretax income
from
continuing
operations $0.6 $26.8 $5.3 $51.9 $40.8 $55.5 $24.4 $43.0 $34.3
=======================================================
(1) The historical results of operations of RiverCamps on Crooked
Creek have been reclassified from the land sales segment to the
residential real estate segment to conform to the current period's
presentation.
(2) Includes restructuring charges incurred in the third quarter of
2006. See Restructuring Charges Pretax by Segment table below.
Restructuring Charges Pretax by Segment
Quarter Ended September 30, 2006
Residential Commercial Land Sales Other Total
------------ ----------- ----------- ------- -------
Write-off of
capitalized
homebuilding
costs $9.5 $-- $-- $-- $9.5
One-time
termination
benefits to
employees 2.4 0.2 0.3 0.8 3.6
------------ ----------- ----------- ------- -------
Total
restructuring
charges, pretax $11.9 $0.2 $0.3 $0.8 $13.1
============ =========== =========== ======= =======
Quarterly Discontinued Operations, Net of Tax
Quarter Ended Sept. 30, Nine Months Ended Sept. 30,
--------------------------- ---------------------------
2006 2005 2006 2005
------------- ------------- ------------- -------------
Income (loss)
from Advantis
operations,
net of tax $-- $(0.6) $(0.1) $(0.7)
Income from
office
buildings, net
of tax 0.1 0.1 0.3 0.1
Gains on sales
of office
buildings, net
of tax 6.6 16.0 9.4 16.0
Loss on sale of
Advantis, net
of tax -- (6.2) -- (6.2)
------------- ------------- ------------- -------------
Net income from
discontinued
operations $6.7 $9.3 $9.6 $9.2
============= ============= ============= =============
Other Income (Expense)
Quarter Ended Sept. 30, Nine Months Ended Sept. 30,
--------------------------- ---------------------------
2006 2005 2006 2005
------------- ------------- ------------- -------------
Dividend and
interest
income $0.9 $0.8 $3.8 $1.4
Interest
expense (5.4) (3.9) (13.7) (9.3)
Other 0.7 1.0 1.0 2.9
------------- ------------- ------------- -------------
Total $(3.8) $(2.1) $(8.9) $(5.0)
============= ============= ============= =============
Equity in Income of Unconsolidated Affiliates
Quarter Ended Sept. 30, Nine Months Ended Sept. 30,
--------------------------- ---------------------------
2006 2005 2006 2005
------------- ------------- ------------- -------------
Residential
Real Estate $1.7 $3.1 $7.3 $8.1
Commercial Real
Estate -- -- -- 2.4
------------- ------------- ------------- -------------
Total $1.7 $3.1 $7.3 $10.5
============= ============= ============= =============
Reported results are preliminary and not final until the filing of
our Form 10-Q with the SEC and, therefore, remain subject to
adjustment.
Conference Call Information
JOE will host an interactive conference call to review the
Company's results for the quarter ended September 30, 2006, and to
discuss earnings guidance for the year on Tuesday, October 31, 2006,
at 10:30 a.m., Eastern Standard Time.
To participate in the call, please phone 877-704-5380 (for
domestic calls from the United States) or 913-312-1294 (for
international calls) approximately ten minutes before the scheduled
start time. You may be asked for a Confirmation Code which is:
4650542. Approximately three hours following the call, you may access
a replay of the call by phoning 888-203-1112 (domestic) or
719-457-0820 (international) using access code 4650542. The replay
will be available for one week.
JOE will also web cast 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 (NYSE: JOE), a publicly held company based in
Jacksonville, is one of Florida's largest real estate operating
companies. We are primarily engaged in real estate development and
sales, with significant interests in timber. Our mission is to create
places that inspire people and make JOE's Florida an even better place
to live, work and play. We're no ordinary JOE.
More information about JOE can be found at our web site at
www.joe.com.
Forward-Looking Statements
We have made forward-looking statements in this earnings release,
particularly in the Outlook Section, pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Any statements in this release that are not historical facts are
forward-looking statements. You can find many of these forward-looking
statements by looking for words such as "intend", "anticipate",
"believe", "estimate", "expect", "plan", "should", "forecast" or
similar expressions. In particular, forward-looking statements
include, among others, statements about the following:
-- future operating performance, revenues, earnings, cash flows,
and short and long-term revenue and earnings growth rates;
-- the size and number of residential units and commercial
buildings;
-- expected development timetables and projected timing for the
first sales or closings of homes or home sites in a community;
-- development approvals and the ability to obtain such
approvals, including possible legal challenges;
-- the anticipated price ranges of developments;
-- the number of units or commercial square footage that can be
supported upon full build out of a development;
-- the number, price and timing of anticipated land sales or
acquisitions;
-- estimated land holdings for a particular use within a specific
time frame;
-- absorption rates and expected gains on land and home site
sales;
-- the pace at which we release new products for sale;
-- 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 our current expectations, and we undertake no
obligation to update the information contained in this release. New
information, future events or risks may cause the forward-looking
events we discuss in this earnings release not to occur.
Forward-looking statements are subject to numerous assumptions,
risks and uncertainties. Factors that could cause actual results to
differ materially from those contemplated by a forward-looking
statement include the risk factors described in our annual report on
Form 10-K for the year ended December 31, 2005 as well as, among
others, the following:
-- economic conditions, particularly in Northwest Florida,
Florida as a whole and key areas of the southeastern 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;
-- changes in perceptions or conditions in the national real
estate market or the real estate markets in the states and
regions in which we operate;
-- the termination of sales contracts or letters of intent due
to, among other factors, the failure of one or more closing
conditions or market changes;
-- whether our developments receive all land-use entitlements or
other permits necessary for development and/or full build-out
or are subject to legal challenge;
-- local conditions such as the supply of homes and home sites
and residential or resort properties or a change in the demand
for real estate in an area;
-- timing and costs associated with property developments and
rentals;
-- the pace of commercial development in Northwest Florida;
-- competition from other real estate developers;
-- changes in pricing of our products and changes in the related
profit margins;
-- changes in operating costs, including real estate taxes and
the cost of construction materials;
-- changes in the amount or timing of federal and state income
tax liabilities resulting from either a change in our
application of tax laws, an adverse determination by a taxing
authority or court, or legislative changes to existing laws;
-- changes in interest rates and the performance of the financial
markets;
-- changes in market rental rates for our commercial and resort
properties;
-- changes in the prices or availability 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 various regulatory approvals and
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;
-- natural disasters, including hurricanes and other severe
weather conditions, and the impact on current and future
demand for our products in Florida;
-- the continuing effects of recent hurricane disasters on the
regional and national economies and current and future demand
for our products in Florida;
-- the prices and availability of labor and building materials;
-- 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.
(C) 2006, The St. Joe Company. "St. Joe," "JOE," "Artisan Park,"
"Paseos," "Pier Park," "RiverCamps," "RiverTown," "SouthWood,"
"SummerCamp," "Victoria Park," "WaterColor," "WaterSound,"
"WhiteFence Farms," "WindMark," and the "Taking Flight"
design are service marks of The St. Joe Company.
"Southern Living" is a registered trademark of Southern Living, Inc.
"Southern Accents" is a registered trademark of Southern Accents,
Inc. "Progressive Farmer" is a registered trademark of
Progressive Farmer, Inc. "Travel + Leisure" is a registered
trademark of American Express Publishing Corporation.
CONTACT: The St. Joe Company, Jacksonville
JOE Media Contact: Jerry M. Ray, 904-301-4430
jray@joe.com
or
JOE Investor Contact: Mike Daly, 904-301-4302
mdaly@joe.com