1 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 24, 2000 -------------------------------- The St. Joe Company - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Florida - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 1-10466 59-0432511 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 1650 Prudential Drive, Suite 400, Jacksonville, FL 32207 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (904)396-6600 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) N/A - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS ------------------------ The purpose of this Form 8-K is to furnish the following information: (a) On October 9, 2000 the St. Joe Company ("JOE") distributed to its shareholders all of its equity interest in Florida East Coast Industries, Inc. ("FLA"). To effect the distribution, JOE exchanged its 19,609,216 shares of
2 FLA Common Stock for an equal number of shares of a new class of FLA Common Stock. On October 9, 2000, the new class of stock, FLA.B, was distributed prorata to JOE Shareholders in a tax-free distribution. For each share of JOE Common Stock owned of record on September 18, 2000, JOE Shareholders received 0.23103369 of a share of FLA.B Common Stock. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS ------------------- 99.1 Proforma Financial Statements 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 24, 2000 By: ROBERT M. RHODES ----------------------------------- Name: Robert M. Rhodes Title: Executive Vice President and General Counsel
1 EXHIBIT 99.1 The St. Joe Company Pro Forma Consolidated Financial Statements The following unaudited pro forma consolidated balance sheet is based upon the historical consolidated balance sheet of the Company as of June 30, 2000 as if the Company had completed the spin-off of Florida East Coast Industries, ("FLA") as of that date. The following unaudited pro forma consolidated statements of income of the Company are based upon the historical consolidated statements of income for the six-month period ended June 30, 2000 and the year ended December 31, 1999. These statements are presented as if the Company had effected the spin-off as of January 1, 1999. These unaudited pro forma consolidated financial statements should be read in conjunction with the Company's annual report filed on Form 10-K for the year ended December 31, 1999, and Form 10-Q for the period ended June 30, 2000. The unaudited pro forma consolidated financial statements are not necessarily indicative of what the actual financial position or results of operations of the Company would have been at June 30, 2000 or December 31, 1999 assuming the transaction had been completed as set forth above, nor does it purport to represent the financial position or results of the Company in the future periods.
2 THE ST. JOE COMPANY Pro Forma Consolidated Balance Sheet June 30, 2000 (Unaudited) (In thousands) Spin-off of Other Historical FLA(a) Adjustments Pro Forma ---------- ----------- ----------- --------- ASSETS Current assets: Cash and cash equivalents $ 80,699 (12,460) (2,677)(b),(c) 65,562 Short-term investments 89,862 (55,299) - 34,563 Accounts receivable 45,262 (26,922) - 18,340 Inventory 5,258 (4,651) - 607 Other assets 10,373 (5,433) 1,000 5,940 ---------- -------- ------ -------- Total current assets 231,454 (104,765) (1,677) 125,012 Investments and other assets: Marketable securities 118,375 (951) - 117,424 Investment in unconsolidated affiliates 83,431 (15,392) - 68,039 Prepaid pension asset 68,271 - - 68,271 Goodwill 137,623 - - 137,623 Other assets 27,343 (16,149) - 11,194 ---------- -------- ------ -------- Total investment and other assets 435,043 (32,492) - 402,551 Investment in real estate 822,499 (417,066) - 405,433 Property, plant & equipment, net 449,969 (402,417) - 47,552 ---------- -------- ------ -------- Total assets $1,938,965 (956,740) (1,677) 980,548 ========== ======== ====== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 50,142 (18,998) - 31,144 Accrued liabilities 77,567 (45,969) - 31,598 Income tax payable (receivable) 4,553 (5,379) 1,668(b) 842 Current portion of long-term debt 43,084 - - 43,084 ---------- -------- ------ -------- Total current liabilities 175,346 (70,346) 1,668 106,668 Reserves and other liabilities 20,460 (12,671) - 7,789 Deferred income taxes 274,979 (134,031) (9,608) 131,340 Long-term debt 209,707 - - 209,707 Minority interest in consolidated subsidiaries 343,932 (341,326) - 2,606 ---------- -------- ------ -------- Total liabilities 1,024,424 (558,374) (7,940) 458,110 Stockholders' Equity: Common stock, no par value; 180,000,000 shares authorized; 91,697,811 issued and outstanding 13,131 - - 13,131 Accumulated other comprehensive income 70,314 - - 70,314 Retained earnings 992,623 (398,366) 6,263(b),(c),(d) 600,520 Restricted stock deferred compensation (2,910) - - (2,910) Treasury stock, 6,715,339 shares, at cost (158,617) - - (158,617) ---------- -------- ------ -------- Total stockholders' equity 914,541 (398,366) 6,263 522,438 ---------- -------- ------ -------- Total liabilities and stockholders' equity $1,938,965 (956,740) (1,677) 980,548 ========== ======== ====== ======== See accompanying notes to pro forma consolidated balance sheet.
3 The St. Joe Company Notes to Pro Forma Consolidated Balance Sheet June 30, 2000 (Unaudited) (In thousands) (a) Effective October 9, 2000, the Company completed its tax-free pro-rata spin-off of its 54% equity interest in Florida East Coast Industries, Inc. ("FLA") to the Company's shareholders. The June 30, 2000 historical balance sheet included FLA on a consolidated basis. This pro forma adjustment represents the deconsolidation and dividend distribution of the Company's 54% equity interest in FLA. The adjustment also includes the add-back of intercompany transactions between the Company and FLA, which were formerly eliminated in consolidation. The intercompany transactions primarily relate to management and development fees paid to the Company by FLA, of which $2,280 was capitalized to investment in real estate and other assets owned by FLA and $2,280 was recorded as an increase in retained earnings of the Company. (b) In contemplating the spin-off, the Company and FLA entered into an Amended and Restated Master Agreement, which provides for several property management and development service agreements between the two companies. In consideration of FLA's execution of the Amended and Restated Master Agreement, the Company will pay to FLA the sum of $6,000 in three annual installments, the first installment being due on the effective date of the spin-off. Each annual installment will be amortized to expense over the one-year period following the date of payment. The first installment of $2,000 has been included as a reduction of cash, $1,000 of which has been prepaid and $615 of which reduces the Company's retained earnings, net of a corresponding tax benefit of $385. In addition, in consideration of the abandonment by the Company of its entitlement to become a 50% joint venture partner in certain properties previously agreed to between the Company and FLA, FLA will pay to the Company the sum of $5,323 on the effective date of the spin-off. Such amount is presented as an increase in cash and retained earnings of the Company, net of a corresponding tax expense of $2,053. (c) The estimated costs related to the spin-off transaction total approximately $6,000 and include investment banker's, legal and tax advisory fees. This amount is presented as a decrease in cash and retained earnings of the Company. There is no corresponding tax effect as the items are not tax deductible. (d) The Company has recorded a deferred tax liability of $9,608 related to undistributed earnings from FLA during the Company's period of ownership. This deferred tax liability is reversed through operations as of the effective date of the spin-off.
4 THE ST. JOE COMPANY Pro Forma Consolidated Statement of Income Six Months Ended June 30, 2000 (Unaudited) (in thousands, except for per share data) Spin-off of Other Historical FLA (a) Adjustments Pro Forma ------------------------------------------ ---------- Operating revenues $ 433,044 (129,362) -- 303,682 Expense: Operating expenses 324,177 (87,866) 1,000(b) 237,311 Corporate expense, net 11,678 -- -- 11,678 Depreciation and amortization 28,436 (18,238) -- 10,198 ------------------------------------------ ---------- Total expenses 364,291 (106,104) 1,000 259,187 ------------------------------------------ ---------- Operating profit 68,753 (23,258) (1,000) 44,495 ------------------------------------------ ---------- Other income (expense): Investment income 8,137 (4,435) -- 3,702 Interest expense (4,941) 1,087 -- (3,854) Other, net 3,341 (769) -- 2,572 ------------------------------------------ ---------- Total other income 6,537 (4,117) -- 2,420 ------------------------------------------ ---------- Income before income taxes and minority interest 75,290 (27,375) (1,000) 46,915 Income tax expense 29,376 (9,673) (1,056)(b)(c) 18,647 Minority interest 8,328 (8,216) -- 112 ------------------------------------------ ---------- Net income $ 37,586 (9,486) 56 28,156 ========================================== ========== EARNINGS PER SHARE Basic: 0.44 0.33 Diluted: 0.43 0.32 Weighted average shares outstanding Basic: 85,167 85,167 Diluted: 86,730 86,730 See accompanying notes to pro forma consolidated statement of income.
5 THE ST. JOE COMPANY Pro Forma Consolidated Statement of Income Year Ended December 31, 1999 (Unaudited) (In thousands, except for per share data) Spin-off of Other Historical FLA(a) Adjustments Pro Forma ---------- ----------- ----------- --------- Operating revenues $ 750,412 (321,358) -- 429,054 Expenses: Operating expenses 589,588 (229,269) 2,000(b) 362,319 Corporate expense 16,361 -- -- 16,361 Depreciation and amortization 49,368 (32,867) -- 16,501 Impairment losses 7,162 -- -- 7,162 ---------- ---------- ----------- --------- Total expenses 662,479 (262,136) 2,000 402,343 ---------- ---------- ----------- --------- Operating profit 87,933 (59,222) (2,000) 26,711 ---------- ---------- ----------- --------- Other income: Investment income 13,006 (5,901) -- 7,105 Gains on sales and 15,360 -- -- 15,360 Other, net 4,544 (680) -- 3,864 ---------- ---------- ----------- --------- Total other income 32,910 (6,581) -- 26,329 ---------- ---------- ----------- --------- Income from continuing operations before income taxes and minority interest 120,843 (65,803) (2,000) 53,040 ---------- ---------- ----------- --------- Income tax expense 23,961 (25,231) (2,320)(b),(c) (3,590) Minority interest 19,243 (18,742) -- 501 ---------- ---------- ----------- --------- Income from continued operations 77,639 (21,830) 320 56,129 ---------- ---------- ----------- --------- Income from discontinued operations: Earnings from discontinued 5,364 -- -- 5,364 Gain on sale of discontinued 41,354 -- -- 41,354 ---------- ---------- ----------- --------- Net income $ 124,357 (21,830) 320 102,847 ========== ========== =========== ========= EARNINGS PER SHARE Basic: Income from continued $ 0.89 $ 0.64 Earnings from discontinued 0.06 0.06 Gain on sale of discontinued 0.47 0.47 ---------- --------- Net income $ 1.42 $ 1.17 ========== ========= Diluted: Income from continued $ 0.88 $ 0.63 Earnings from discontinued 0.06 0.06 Gain on sale of discontinued 0.46 0.46 ---------- --------- Net income $ 1.40 $ 1.15 ========== ========= Weighted average shares outstanding Basic: 87,691 87,691 Diluted: 88,553 88,553 See accompanying notes to pro forma consolidated statement of income.
6 The St. Joe Company Notes to Pro Forma Consolidated Statements of Income For the Six Month Period Ended June 30, 2000 and the Year Ended December 31, 1999 (Unaudited) (In thousands) (a) This pro forma adjustment represents the deconsolidation of the revenues and expenses, including minority interest and income tax expense, attributable to FLA for the related period. These amounts are removed from the Company's historical balances to reflect the spin-off as if it occurred on January 1, 1999. The adjustment also includes the add-back of intercompany transactions between the Company and FLA, which were formerly eliminated in consolidation. The intercompany transactions primarily relate to asset management fees and management fees expenses between the Company and FLA. The resulting additions to operating revenues for the six months ended June 30, 2000 and the year ended December 31, 1999 totaled $1,482 and $3,374, respectively. The resulting additions to operating expenses for the six months ended June 30, 2000 and the year ended December 31, 1999 totaled $1,309 and $3,164, respectively. (b) As previously discussed in note (b) of the Notes to Pro Forma Consolidated Balance Sheet, in consideration of FLA's execution of the Amended and Restated Master Agreement, the Company will pay to FLA the sum of $6,000 in three annual installments, with each installment to be amortized to management fee expense over the subsequent one-year period. Included in the six months and year ended pro forma statements of income, are management fee expenses of $1,000 and $2,000 and related tax benefits of $386 and $772, respectively, related to the amortization of such payments. (c) This adjustment represents the reversal of deferred tax expense previously recorded for the undistributed earnings of FLA, which totaled $670 and $1,548, respectively, during the six months ended June 30, 2000 and the year ended December 31, 1999.