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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 2, 2006
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The St. Joe Company
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Florida 1-10466 59-0432511
- ------------------------------ ------------------ ----------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
245 Riverside Avenue, Suite 500
Jacksonville, FL 32202
- -------------------------------------------- ----------------
(Address of Principal Executive Offices) (Zip Code)
(904) 301-4200
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On May 2, 2006, The St. Joe Company (the "Company") issued a press release
announcing the Company's financial results for the quarter ended March 31, 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 May 2, 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: May 2, 2006 By: /s/ Michael N. Regan
------------------------------
Michael N. Regan
Senior Vice President -
Finance and Planning
Exhibit 99.1
The St. Joe Company Reports First Quarter 2006 Net Income of $0.05 Per Share;
JOE Lowers 2006 Guidance to $1.40 to $1.85 per Share; Resort Residential Sales
Slow and Resale Inventory Up; JOE Remains Committed to Long-Term Value Creation
JACKSONVILLE, Fla.--(BUSINESS WIRE)--May 2, 2006--The St. Joe
Company (NYSE:JOE) today announced that its Net Income for the first
quarter of 2006 was $3.7 million, or $0.05 per share, compared to
$15.4 million, or $0.20 per share, for the first quarter of 2005. All
per share references in this release are presented on a diluted basis.
"Resort residential sales slowed significantly in the first
quarter, compared to the more active pace of the prior year," said
Peter S. Rummell, chairman and CEO of JOE. "While we are seeing weaker
sales in our existing resort residential business, there are signs of
relative strength in other product categories, including our primary
residential, commercial and rural land businesses. We are moving
quickly to capitalize on these business segments by taking advantage
of the flexibility provided by the entitlements in our development
pipeline."
JOE Remains Committed to Long-Term Value Creation
"JOE remains committed to long-term value creation," said Rummell.
"If we were to abandon that approach, we could generate additional
quarterly earnings by slashing prices for our low-basis land. But
those short-term earnings would be at a significant cost to
shareholders. It is incumbent on us to leverage our unique assets to
maximize value. A quarterly approach to real estate development does
not produce value efficiently."
"Our long-term goal has been to build a fully diversified
development business, generating land sales for a broad range of uses
and price points," said Rummell. "We are making significant progress
diversifying our products and our customer base, and we are just
beginning to get traction with this strategy."
"The foundation we have built over the past nine years puts us in
position to capture the opportunities ahead of us," said Rummell. "Our
unique advantages, including our low-basis land and strong balance
sheet, allow us to be patient in the face of cyclical market
fluctuations. We remain confident of the value of our assets, and we
are not driven by debt. We have the ability and discipline to be
patient through short-term market conditions."
"We are actively managing an ongoing process to match new real
estate products to market segments, broadening both product offerings
and price points," said Rummell. "We now have several next-generation
products coming to market. While resort residential will remain one of
our most important product lines, we are increasingly confident about
the emergence of other product lines as important contributors to JOE
revenue and profit."
Demand for Primary Housing Built on Demographic Trends
"We continue to see demand at many of JOE's primary home
communities, though in some cases not for the same product or at the
same level as a year ago," said Rummell. "We will be bringing new
primary home product to market throughout the remainder of the year at
existing and new communities."
"Over the long-term, we expect solid growth to be the norm for
Florida," said Rummell. "For each of the past seven decades Florida
has been among the nation's fastest growing states. Every credible
economic and demographic forecast anticipates strong demand for
Florida land for decades to come."
"In the U.S. Census Bureau's most recent report on domestic
migration released April 20th, Florida leads national in-migration by
a wide margin," said Rummell. "Florida's robust economy and geographic
advantages attract a net increase of almost 1,100 people per day, a
trend that is expected to accelerate as Baby Boomers age. According to
the Census Bureau, Florida's population is expected to increase from
about 17 million to 28 million by 2030. These new arrivals are
expected to push demand for new primary homes, followed by new demand
for retail, work places and a wide-variety of other real estate
products."
National Homebuilder Opportunities Growing
"We are having substantive discussions with a growing number of
national and regional homebuilders regarding opportunities to acquire
land at JOE's primary communities throughout Florida," said Rummell.
"They recognize the long-term economic opportunities of being
affiliated with JOE towns. We also continue to provide sites for local
homebuilders across Florida."
"We are at a stage in JOE's maturation where working with national
homebuilders makes sense," said Rummell. "We are now ready to move
forward with partners, adding a production capability that can help us
accelerate our value creation process."
Resort Residential Sales Slow and Resale Inventory Up
"Transactions for resort residential products at WaterColor,
WaterSound Beach, WaterSound West Beach, RiverCamps and SummerCamp
have slowed significantly," said Rummell. "Although the first quarter
is traditionally the off-season in Northwest Florida, sales activity
in our resort residential projects was slower than the same period a
year ago."
"It appears that speculators are no longer a major demand element
in this market," said Rummell. "End-users are more deliberate and
typically take more time to shop. There are also a larger number of
resale units on the market, providing further options to potential
buyers."
"The size of the resale inventory suggests it will be some time
before we return to a favorable balance between supply and demand in
this market segment," said Rummell. "We are introducing new products
within our developments to fill market segments where there is more
limited competitive supply at lower price points. For example, we are
introducing a new cottage product on smaller home sites at WaterColor,
WaterSound Beach and WaterSound West Beach. We also have a new
seasonal residential product designed for splitters and pre-retirees
coming to market at WaterSound less than two miles from the beach at
attractive price points."
"We are confident in the underlying value of our resort
residential properties," said Rummell. "The strength of our balance
sheet means we can afford to be patient, deliberate and thoughtful in
our approach to cyclical market fluctuations. In the meantime, we'll
continue to bring new product types to market targeting those segments
where we see limited market supply."
Commercial Pipeline is Solid
"Our commercial business has a solid pipeline of business going
forward," said Rummell. "St. Joe Commercial closed a multifamily land
sale to Trammell Crow in the first quarter, and we have additional
multifamily sales under contract. Demand remains solid for our
commerce park product, and we have begun pre-development work on a new
commerce park in Bay County."
"We also continue to see significant interest in the retail
market," said Rummell. "We are under contract with a national big-box
retailer for the sale of a commercial site in Panama City Beach which
will produce additional retail out-parcel opportunities. Though our
commercial land sales will remain lumpy, we are looking to the near-
and long-term future with real confidence."
Key Next Generation Projects Set for 2006 Sales Starts
"A number of key projects are moving into position to open sales
this summer and fall," said Britt Greene, president of St. Joe Towns &
Resorts and St. Joe Commercial. "Sales started last week at
SevenShores (formerly Perico Island) in Bradenton and are expected to
begin later this quarter at WindMark Beach in Gulf County and
WaterSound in Walton County. Sales are expected to start this fall at
RiverTown in St. Johns County near Jacksonville."
"We are moving into position to launch sales at the first
WhiteFence Farms near Tallahassee with a significant promotional
campaign," said Everitt Drew, president of St. Joe Land Company.
"WhiteFence Farms - Red Hills has been selected to be the site of a
joint Southern Living 2006 Idea House/Progressive Farmer 2006 Idea
Farm to be featured in the August 2006 issues of these magazines."
"These five important projects represent a broad range of primary,
retirement, seasonal and resort residential product in different
geographic markets across a wide spectrum of price points," said
Rummell. "We believe that, together, these second generation towns
could meaningfully exceed what JOE has accomplished at WaterColor and
WaterSound Beach."
2006 OUTLOOK
"Our outlook for the year continues to reflect both increased
opportunity but also greater near-term uncertainty, particularly as it
relates to the Northwest Florida regional market for resort
residential product," said JOE's CFO Anthony M. Corriggio. "Given the
limited transactional activity and increased resale inventory in
several of our active resort residential communities, we are lowering
our range of expected earnings for 2006 to $1.40 to $1.85 from $1.70
to $2.15 per share. The change stems primarily from a reduction of
expectations for resort residential product sales this year in Bay and
Walton Counties (including RiverCamps)."
"Since we are only just now entering the prime selling season for
many of our communities, our forward visibility on residential retail
sales in general still remains quite limited," said Corriggio.
"Coupled with the fact that larger transactions tend to be lumpy and
difficult to predict from a timing perspective, there continues to be
the potential for variability on both sides of this range. We continue
to expect that the majority of earnings will occur in the second half
of the year."
Towns & Resorts
"We are in active discussions with several major homebuilders
interested in participating in various JOE projects in Northwest
Florida and other parts of the state," said Corriggio. "While it is
difficult to predict the precise timing and amount, we do expect to
announce transactions involving national and regional homebuilders
over the next several months. We expect that some of these initiatives
will result in meaningful sales and income this year, next year and
beyond. These transactions may involve land positions in
pre-development phases of JOE communities as well as phases currently
under development. As noted earlier, JOE has matured to the point
where sales to national homebuilders make sense. These transactions
provide opportunities to accelerate value realization, while at the
same time decreasing capital intensity and increasing efficiency in
how we deliver primary housing to the market."
"We also have several new and unique projects coming to market
that will further diversify our product offerings and begin to add to
earnings during the second half of the year," said Corriggio. "With
WaterSound and WindMark Beach in Northwest Florida, RiverTown in
Jacksonville, and SevenShores in Bradenton, JOE will have increased
flexibility to meet the demand in a changing market."
"Infrastructure construction is underway at both WaterSound and
WindMark Beach, with retail sales slated to begin in both communities
during the second quarter," said Corriggio. "Sales started last week
at SevenShores, with capital expenditures for vertical construction
subject to meeting pre-sale requirements. At RiverTown, we expect
development activity to begin in June and sales to begin in the fourth
quarter. We expect a limited number of closings there before the end
of the fiscal year."
St. Joe Commercial
"We expect St. Joe Commercial's land sales performance to exceed
2005 levels," said Corriggio. "Earnings from the division are expected
to be concentrated in the second half of the year, and are likely to
come from an increasingly diverse product mix."
"In Northwest Florida, we continue to see solid demand for
multifamily product, specifically for townhouses and apartments," said
Corriggio. "We expect multifamily land sales to account for about half
of St. Joe Commercial's 2006 earnings, with commerce park sales and
retail parcels comprising the balance."
"Additionally, two office properties are being evaluated for
possible sale in 2006, although these potential transactions likely
would not be as large as those that occurred in 2005," said Corriggio.
St. Joe Land Company
"We expect St. Joe Land Company to continue its solid performance
as we progress through the year," said Corriggio. "We continue to
refine our rural land segmentation strategy and have three new
products, WhiteFence Farms, WireGrass Preserves and Florida Ranches
being positioned for sales to begin over the next two years. The
FloridaWild product we introduced in the first quarter has been well
received. We expect to close on the sale of the first FloridaWild
property in the second quarter."
"JOE Land Company's creative approach to rural land sales
continues to provide an important level of segmentation and
diversification in our real estate product portfolio," said Corriggio.
The Bigger Picture
"It is important to stay focused on the bigger picture when
discussing near-term earnings and guidance for a company as unique as
JOE," said Corriggio. "A strategy that maximizes value can generate
great earnings, but generating earnings does not necessarily maximize
value. While we are constantly looking for ways to accelerate value
recognition, JOE continues to create long-term value by moving
significant portions of its land holdings to higher and better uses
through strategic planning, securing land use entitlements and
facilitating infrastructure improvements."
"We are in the process of updating our land analysis which
involves a unique internal process by which we classify every acre by
its known or expected highest and best use," said Corriggio. "We
expect to have it ready for release in the next few weeks. Through
this analysis, we intend to provide insight into our current view of
the future value potential of JOE's land holdings."
"We have been establishing increasingly sophisticated, diverse and
creative land uses - including resort, residential, retail, office,
industrial, rural land, apartment, hotel and marina uses," said
Corriggio. "JOE's growing range of real estate entitlements adds
tremendous unrealized value, which is stored in our portfolio of land
holdings prior to sale. JOE captures this value through sales and
earnings, but the value is created before it is monetized."
LAND CLASSIFICATION
"Value creation begins through a strategic planning process rich
with data collection, analysis and land planning and culminates with
the creation of a business strategy," said Rummell. "We think we have
invented a unique process that positions our land holdings for higher
and better uses and then moves it systematically through the
entitlements, project development and sales process."
"Land classification is important to us because it represents the
beginning of the value creation process," said Rummell. "In June of
2004, we provided a land analysis that reflected a company-wide effort
to identify land with higher value potential and to classify it in
accordance with its known or expected highest and best use. Our focus
on shareholder value is never complete, so as soon as we have finished
the last effort we start a new one. We are now close to having an
analysis that will further refine our business strategy and position
us for the next 20-years and beyond."
"Over the past eight years our value creation process has become
increasingly sophisticated and we have evolved to a point where now we
have mastered it and assimilated it completely into the JOE culture,"
said Chris Corr, senior vice president of strategic planning. "We have
made it a core competency, one that is unique to JOE and at the very
center of our strategy company-wide. It reflects a creative process of
identifying strategies to appeal to existing and new markets, improve
civic infrastructure, secure land use entitlements, develop projects
and sell real estate products."
"We manage our land classification process to help us determine
strategies to create value," said Corr. "It is the first step before
the entitlements process and the first step to maximizing the sales
and earnings potential of our land."
ENTITLEMENTS
"As a large-scale developer and land owner, JOE's ability to
manage the increasingly complex process necessary to gain entitlements
represents a major core competency," said Corr. "Through land
classification, entitlements and improvements of strategic
infrastructure, JOE is able to create value by moving significant
portions of its land holdings to higher and better uses."
On March 31st, JOE owned approximately 835,000 acres, concentrated
primarily in Northwest Florida. These holdings included approximately
338,000 acres within 10 miles of the coast of the Gulf of Mexico and
approximately 497,000 acres outside the 10-mile coastal perimeter,
including approximately 48,000 acres in southwest Georgia.
At March 31st, JOE had land-use entitlements in hand or in process
for approximately 41,600 residential units and 14.6 million square
feet of commercial space, with an additional 575 acres zoned for
commercial uses. These entitlements are on approximately 54,000 acres.
A number of residential projects moving through the entitlements
process have products specifically targeted for use by national
homebuilder customers.
Table 1 summarizes JOE's Florida residential and mixed-use
projects with land-use entitlements as of March 31, 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
March 31, 2006
Residential
Units Sold
Project Project Since
Project County Acres Units (2) Inception
------- ------ ------- --------- -----------
In Development: (5)
- -------------------
Artisan Park (6) Osceola 175 616 325
Bridgeport Gulf 15 37 31
Cutter Ridge Franklin 10 25 --
Glades Bay 26 360 360
Hawks Landing Bay 88 168 23
Landings at Wetappo Gulf 113 24 7
Palmetto Trace Bay 141 481 407
Paseos (6) Palm Beach 175 325 278
RiverCamps on Crooked Bay
Creek 1,491 408 178
Rivercrest (6) Hillsborough 413 1,382 1,142
RiverSide at Chipola Calhoun 120 10 2
Seven Shores (Perico Manatee
Island) 192 686 --
SouthWood Leon 3,370 4,770 1,514
St. Johns Golf & St. Johns
Country Club 820 799 744
SummerCamp Franklin 762 499 65
The Hammocks Bay 133 457 434
Victoria Park Volusia 1,859 4,200 921
WaterColor Walton 499 1,140 863
WaterSound Walton 1,402 1,432 --
WaterSound Beach Walton 256 511 409
WaterSound West Beach Walton 62 199 11
WindMark Beach Gulf 2,020 1,662 104
-----------------------------------
Subtotal 14,142 20,191 7,818
-----------------------------------
In Pre-Development: (5)
- -----------------------
Avenue A Gulf 6 96 --
Bayview Estates Gulf 30 45 --
Boggy Creek Bay 630 526 --
Camp Creek Golf Walton
Cottages 10 102 --
College Station Bay 567 800 --
East Lake Creek Bay 81 313 --
East Lake Powell Bay 181 360 --
Hills Road Bay 30 356 --
Howards Creek Gulf 8 33 --
Laguna Beach East Bay 20 360 --
Laguna Beach West Bay 38 539 --
Long Avenue Gulf 10 30 --
ParkPlace Bay 118 257 --
ParkSide Bay 48 480 --
Pier Park NE Bay 57 460 --
Pier Park Timeshare Bay 13 125 --
Port St. Joe Millsite Gulf
Area 180 624 --
Powell Adams Bay 32 1,425 --
RiverCamps on Sandy Bay
Creek 6,500 624 --
RiverTown St. Johns 4,170 4,500 --
Sabal Island Gulf 45 18 --
The Cove Gulf 47 41 --
Timber Island (7) Franklin 49 407 --
Topsail Walton 115 627 --
Wavecrest Bay 7 95 --
WestBay Corners Bay 100 524 --
WestBay DSAP Future Bay
Phases 15,089 5,628 --
WestBay Landing Bay 950 214 --
WhiteFence Farms, Red Leon
Hills 373 50 --
-----------------------------------
Subtotal 29,504 19,659 --
-----------------------------------
Total 43,646 39,850 7,818
===================================
Residential Total
Units Under Residential Remaining
Contract Units Commercial
as of Remaining Entitlements
Project County 3/31/06(3) (3) (Sq. Ft.)(4)
------- ------ ---------- ---------- ------------
In Development: (5)
- -------------------
Artisan Park (6) Osceola 191 100 --
Bridgeport Gulf 5 1 --
Cutter Ridge Franklin -- 25 --
Glades Bay -- -- --
Hawks Landing Bay 83 62 --
Landings at Wetappo Gulf -- 17 --
Palmetto Trace Bay 24 50 --
Paseos (6) Palm Beach 45 2 --
RiverCamps on Crooked Bay
Creek -- 230 --
Rivercrest (6) Hillsborough 236 4 --
RiverSide at Chipola Calhoun -- 8 --
Seven Shores (Perico Manatee
Island) -- 686 9,000
SouthWood Leon 504 2,752 5,429,460
St. Johns Golf & St. Johns
Country Club 18 37 --
SummerCamp Franklin 2 432 25,000
The Hammocks Bay 20 3 --
Victoria Park Volusia 108 3,171 854,254
WaterColor Walton 1 276 47,600
WaterSound Walton -- 1,432 457,380
WaterSound Beach Walton 1 101 29,000
WaterSound West Beach Walton -- 188 --
WindMark Beach Gulf -- 1,558 75,000
-----------------------------------
Subtotal 1,238 11,135 6,926,694
-----------------------------------
In Pre-Development: (5)
- -----------------------
Avenue A Gulf -- 96 --
Bayview Estates Gulf -- 45 --
Boggy Creek Bay -- 526 --
Camp Creek Golf Walton
Cottages -- 102 --
College Station Bay -- 800 --
East Lake Creek Bay -- 313 --
East Lake Powell Bay -- 360 --
Hills Road Bay -- 356 --
Howards Creek Gulf -- 33 --
Laguna Beach East Bay -- 360 --
Laguna Beach West Bay -- 539
Long Avenue Gulf -- 30 --
ParkPlace Bay -- 257 --
ParkSide Bay -- 480 --
Pier Park NE Bay -- 460 190,000
Pier Park Timeshare Bay -- 125 --
Port St. Joe Millsite Gulf
Area -- 624 431,663
Powell Adams Bay -- 1,425 --
RiverCamps on Sandy Bay
Creek -- 624 --
RiverTown St. Johns -- 4,500 500,000
Sabal Island Gulf -- 18 --
The Cove Gulf -- 41 --
Timber Island (7) Franklin -- 407 14,500
Topsail Walton -- 627 300,000
Wavecrest Bay -- 95 --
WestBay Corners Bay -- 524 50,000
WestBay DSAP Future Bay
Phases -- 5,628 4,330,000
WestBay Landing Bay -- 214 --
WhiteFence Farms, Red Leon
Hills -- 50 --
-----------------------------------
Subtotal -- 19,659 5,816,163
-----------------------------------
Total 1,238 30,794 12,742,857
===================================
(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) 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.
(3) Excludes our Mid-Atlantic region that includes activity in
North Carolina and South Carolina where we are primarily
engaged in homebuilding, and not in obtaining entitlements. As
of March 31, 2006, the Mid-Atlantic region had 1,912 home
sites owned or under contract. Of that total, 239 have been
sold and 1,673 remain to be sold.
(4) 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.
(5) 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.
(6) Artisan Park is 74 percent owned by JOE. Paseos and Rivercrest
are each 50 percent owned by JOE.
(7) 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 summarizes JOE's Florida residential and mixed-use
projects in the entitlements process as of March 31, 2006. Also
detailed in the table are commercial entitlements, in terms of square
feet, that are to be entitled as part of JOE's mixed-use projects.
These commercial entitlements include retail, office and industrial
uses.
Table 2
Proposed JOE Residential and Mixed-Use Projects
In the Land-Use Entitlement Process in Florida (1)
March 31, 2006
Estimated
Estimated Commercial
Project Project Entitlements
Project County Acres Units (2) (Sq. Ft.)(2)
------- ------ ------- --------- ------------
BonfireBeach Bay 550 750 70,000
Breakfast Point Bay 1,448 3,100 635,000
Carrabelle East Franklin 200 600 --
DeerPoint Cedar Grove Bay 599 750 --
SouthSide Leon 1,625 2,800 1,150,000
St. James Island Franklin
McIntyre 1,704 340 --
St. James Island Franklin
RiverCamps 2,500 500 --
St. James Island Franklin
Granite Point 1,000 2,000 --
The Cove II Gulf 10 40 --
-----------------------------------
Total 9,636 10,880 1,855,000
===================================
(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) 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 summarizes JOE's Florida commercial projects with land-use
entitlements as of March 31, 2006. This table represents additional
commercial entitlements not included in Tables 1 and 2 above.
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
March 31, 2006
Acres Under
Acres Sold Contract Total
Project Since As of Acres
Project County Acres Inception 3/31/06 Remaining
------- ------ -------- ---------- ---------- ---------
Airport Commerce Leon 45 -- -- 45
Alf Coleman Retail Bay 25 1 14 10
Avery St. Retail Bay 10 -- -- 10
Beach Commerce Bay 157 139 2 16
Beach Commerce II Bay 109 -- -- 109
Beckrich Office Park Bay 12 8 -- 4
Beckrich Retail Bay 47 18 -- 29
Cedar Grove Commerce Bay 51 -- -- 51
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 4 3
Port St. Joe Gulf
Commerce II 39 9 -- 30
Powell Hills Retail Bay 44 -- 44 --
South Walton Commerce Walton 39 14 1 24
--------------------------------------
Total 881 241 65 575
======================================
(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.
WESTBAY
Panama City - Bay County International Airport Relocation
During the first quarter, the Panama City - Bay County Airport and
Industrial District (Airport Authority) and the Federal Aviation
Administration (FAA) conducted additional analysis on the
redevelopment of the existing airport site in Panama City for
non-airport uses. According to the Airport Authority, the public
release of the Final Environmental Impact Statement (EIS) for the
airport is expected May 19th, to be followed by a FAA Record of
Decision, expected in September of 2006. These dates are subject to
change.
A number of additional steps remain before construction of the
airport can begin, including approval by the U.S. Army Corps of
Engineers and other federal, state and local regulatory agencies as
well as funding from federal, state and Airport Authority sources.
DIVIDENDS AND STOCK REPURCHASE PROGRAM
A quarterly cash dividend of $0.16 per share of common stock was
paid on March 31st to shareholders of record at the close of business
on March 15th, 2006.
On March 31st, 74,571,432 JOE shares were outstanding. The number
of weighted-average diluted shares in the first quarter of 2006 was
74,943,110.
During the first quarter of 2006, JOE expended an aggregate of
$37.4 million for dividends and the acquisition of its shares. JOE
acquired 421,439 of its shares at a cost of $25.4 million, an average
price of $60.16 per share. At March 31st, approximately $128.4 million
remained of the company's stock repurchase authorization.
Table 4 summarizes the company's stock repurchase activity from
1998 through March 31, 2006.
Table 4
Stock Repurchase Activity
Through March 31, 2006
Shares
----------------------------------
Total Cost Average
Period Purchased Surrendered(1) Total (in millions) Price
------ --------- -------------- --------- ------------- -------
1998 2,574,200 11,890 2,586,090 $55.5 $21.41
1999 2,843,200 11,890 2,855,090 69.5 24.31
2000 3,517,066 -- 3,517,066 80.2 22.78
2001 7,071,300 58,550 7,129,850 176.0 24.67
2002 5,169,906 256,729 5,426,635 157.6 29.03
2003 2,555,174 812,802 3,367,976 102.9 30.55
2004 1,561,565 884,633 2,446,198 105.0 42.90
2005 1,705,000 68,648 1,773,648 124.8 70.33
1st Quarter
2006 417,300 4,139 421,439 25.4 60.16
--------- -------------- --------- ------------- -------
Total/
Weighted
Average 27,414,711 2,109,281 29,523,992 $897.0 $30.36
========== ============= ========== ============= =======
(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.
"We continue to view our dividend and repurchase program as an
important contributor to shareholder value," said Corriggio. "The
total amount of capital distributed to shareholders in 2005 via share
repurchases and dividends was approximately $170 million. For 2006, we
have set our dividend and repurchase program benchmark at $125 million
to $175 million. We will evaluate making adjustments to the range
based on market conditions and capital deployment considerations."
SEGMENT RESULTS
ST. JOE TOWNS & RESORTS
- -----------------------
Pretax income from continuing operations for St. Joe Towns &
Resorts, JOE's residential and resort development segment, was $11.7
million for the first quarter of 2006, compared with $23.1 million in
the first quarter last year. These results exclude income from
unconsolidated affiliates.
In the first quarter, St. Joe Towns & Resorts closed on the sales
of 387 units and generated revenues from housing and home sites of
$118.7 million, compared to 405 units and $128.8 million in the first
quarter of 2005.
JOE accepted contracts for 242 homes and 47 homes sites in the
first quarter of 2006, compared to 480 homes and 54 home sites in the
first quarter a year ago.
The majority of profit on multifamily closings occurring this
quarter was recognized in previous quarters due to the use of
percentage of completion accounting.
Tables 5 and 6 summarize sales activity for St. Joe Towns &
Resorts for the first quarter of 2006 compared to the same period in
2005.
Table 5
St. Joe Towns & Resorts
Sales Activity
For the Three Months
Ended March 31,
($ 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) 49 $6.6 $2.6 $4.0 62 $23.7 $5.8 $17.9
Homes(3) 338 112.1 88.1 24.0 343 105.1 87.4 17.7
-------- ------- ------ ------ -------- ------- ------ ------
Total 387 $118.7 $90.7 $28.0 405 $128.8 $93.2 $35.6
======== ======= ====== ====== ======== ======= ====== ======
(1) Cost of sales for home sites in the first quarter of 2006
consisted of $2.2 million in direct costs, $0.1 million in
selling costs and $0.3 million in indirect costs. Cost of
sales for home sites in the first quarter of 2005 consisted of
$4.6 million in direct costs, $0.7 million in selling costs
and $0.5 million in indirect costs. Cost of sales for homes in
the first quarter of 2006 consisted of $74.7 million in direct
costs, $5.7 million in selling costs and $7.7 million in
indirect costs. Cost of sales for homes in the first quarter
of 2005 consisted of $74.8 million in direct costs, $5.4
million in selling costs and $7.2 million in indirect costs.
(2) Percentage of completion accounting was utilized at SummerCamp
and WaterSound West Beach. As a consequence, revenue
recognition and closings may occur in different periods.
(3) Homes include single-family, multifamily and Private Resident
Club (PRC) units. Multifamily and PRC revenue is recognized,
if preconditions are met, on a percentage-of-completion basis.
As a consequence, revenue recognition and closings may occur
in different periods. Percentage-of-completion accounting was
utilized at Artisan Park in the first quarter of 2006 and
Artisan Park, WaterColor and WaterSound Beach in the first
quarter of 2005. Paseos and Rivercrest, two joint ventures 50
percent owned by JOE, are not included. Sales are
substantially complete at both of these communities.
Table 6
St. Joe Towns & Resorts
Units Placed Under Contract
For the Three Months
Ended March 31,
2006 2005 Percentage Change
-------- -------- -------------------
Home Sites 47 54 (13.0)%
Homes (1) 242 481 (50.0)
-------- -------- -------------------
Total (1) 289 535 (45.9)%
======== ======== ===================
(1) Homes include single-family homes, multifamily and PRC units.
Some home sites are offered for sale with a home to be
constructed by JOE. Paseos and Rivercrest, two unconsolidated
joint ventures, are not included. Sales are substantially
complete at both of these communities.
Table 7 summarizes backlog at March 31, 2006.
Table 7
St. Joe Towns & Resorts
Backlog (1)
($ in millions)
March 31, 2006 March 31, 2005
------------------- -------------------
Units Revenues Units Revenues
------- ---------- ------- ----------
Home Sites 10 $1.6 10 $1.7
Homes (2) 714 259.0 1,090 387.8
------- ---------- ------- ----------
Total 724 $260.6 1,100 $389.5
======= ========== ======= ==========
(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 $74.9 million for 281 units at the end of the first
quarter of 2006, compared to $195.2 million for 801 units at
the end of the first quarter of 2005.
(2) As of March 31, 2006, there were 139 units subject to
percentage-of-completion accounting in the homes backlog with
related revenue of $62.1 million (of which $46.9 million had
been previously recognized in the financial statements). As of
March 31, 2005, there were 238 units subject to
percentage-of-completion accounting with related revenue of
$138.3 million (of which $88.0 million had been previously
recognized in the financial statements).
Northwest Florida
WaterColor
During the first quarter, one home site in WaterColor was
contracted for and closed at a price of $315,000. Contracts for two
homes were closed in the first quarter at an average price of
$940,000. Several new product lines, including a cottage home, are
being offered in WaterColor's fourth phase.
WaterSound Beach
During the first quarter, three single-family cottages in
WaterSound Beach were contracted for and closed at an average price of
$971,700. No new contracts for home sites were accepted.
The 44 units in the two remaining multifamily buildings are
scheduled to be released for sale later in the year. Subject to
meeting pre-sale requirements, construction of 23 of those units is
expected to begin in the third quarter, while construction of the last
21 units, which are currently planned to be sold as PRC units, is
expected to start in the fourth quarter.
WaterSound
Sales are expected to start at WaterSound later in the second
quarter with initial home site pricing expected to start in the high
$100,000s.
This resort town is being planned for the pre-retirement and
second-home markets with six and nine-hole golf courses along with
pools, beach club access and other amenities. With its inland location
and access to beach amenities, WaterSound is bringing a new product
offering to the South Walton market.
Located on approximately 1,402 acres and currently planned for a
1,330-unit mixed-use development, WaterSound is a resort community
approximately three miles from WaterSound Beach north of U.S. 98 in
Walton County. WaterSound's land-use entitlements include 457,380
square feet of commercial space.
In 2005, a U.S. District Court issued a preliminary injunction
suspending use of a Regional General Permit (RGP) issued by the U.S.
Army Corps of Engineers. The RGP covers an area of Walton and Bay
Counties consisting of approximately 48,000 acres, which includes a
portion of the wetlands in WaterSound. The court's decision does not
affect other areas of the project, does not affect development in
uplands, and does not affect permits issued by the State of Florida or
Walton County. The court specifically ruled that the traditional
individual permitting process, typically used on projects like
WaterSound, remains available to JOE for any further permitting
required for the additional phases of WaterSound. The court has not
made a final ruling.
Infrastructure construction continued on 204 of the 208 home sites
originally permitted in WaterSound's first phase.
Bay County Primary Communities
Hawks Landing is an 88-acre primary home community in the city of
Lynn Haven. In the first quarter, 23 home sites were sold to local
builders and closed at an average price of $71,700.
During the first quarter, JOE closed the sale of eight home sites
in Palmetto Trace to David Weekley Homes, LLP, the nation's second
largest private homebuilder. In addition, JOE closed 20 homes at an
average price of $298,900.
Located in Panama City Beach off U.S. 98, Palmetto Trace is
entitled for 481 homes. JOE had contracted or sold 431 homes and home
sites as of March 31, 2006.
BonfireBeach
On February 14th, the Mexico Beach City Commission voted
unanimously to send a land-use plan for a 550-acre beachfront
community to the state for its review. Called BonfireBeach, the new
community is being planned for 750 residential units and 70,000 square
feet of commercial space, plus a large network of trails and parks.
Current plans embrace and enhance recreational boating and
fishing, two of Mexico Beach's most important strengths. The
development would include a public boat access point to the Mexico
Beach Canal with public parking. The proposed community will be
similar to WaterColor focusing on the organic coastal nature of the
site. The project includes nearly a mile of white-sandy beach on the
Gulf of Mexico.
WindMark Beach
Construction continued in the first quarter on the next phase of
WindMark Beach, currently planned for 1,552 units near the town of
Port St. Joe. The realignment of a 3.5-mile segment of U.S. 98 within
WindMark Beach is scheduled for completion in the summer of 2006. A
show home to be featured this summer in Southern Accents magazine has
been completed.
WindMark Beach is planned as a beachfront resort destination with
1,662 units on 2,020 acres in Gulf County along almost four miles of
beachfront. Sales in this next phase are expected to begin during the
second quarter of 2006.
Port St. Joe
Predevelopment planning continued during the first quarter on 180
acres including the parcel formerly occupied by the Port St. Joe paper
mill. Early in the quarter, JOE acquired from Smurfit-Stone Container
Corporation the remaining 50 percent of the joint venture that owns
126 acres of this project for $21.75 million. The demolition and
clean-up of the paper mill and site was completed last year.
The project is currently being planned for up to 624 residential
units, mostly multifamily units on or near the bay front. The plan
also includes commercial space being designed as a civic gathering
place and entertainment district for Port St. Joe. The plan provides
for a public waterfront on St. Joseph Bay and office space designated
to house the area's growing need for professional services. Plans also
call for a 150-room hotel and 500 wet and dry boat slips as well as a
new town hall with city government offices.
On April 17th, JOE purchased the Port St. Joe Marina from the City
of Port St. Joe for $4.8 million. Built in 1999, the marina has 121
wet slips and 78 dry slips. JOE had previously leased the marina from
the City.
JOE had previously acquired from the City approximately 3.8 acres
adjacent to the Marina, which are being incorporated into the Port St.
Joe plan. In return JOE contributed 10.0 acres to the city's
waterfront park system and will upgrade a city park adjacent to the
marina.
SummerCamp
SummerCamp, located on St. James Island, is a 499-unit development
on 762 acres located east of the fishing village of Carrabelle on the
Gulf of Mexico approximately 45 miles from the commercial airport in
Tallahassee.
During the first quarter, two contracts were accepted on home
sites at an average price of $371,500 and one home site was closed at
a price of $354,000. The construction of community infrastructure is
underway.
SouthWood
Contracts were accepted at SouthWood for 18 single-family homes in
the first quarter at an average price of $303,000 and 46 single-family
homes were closed at an average price of $300,100.
SouthWood, located on 3,370 acres in Tallahassee, is designed for
primary homes, as well as various office, retail and industrial uses.
SouthSide
During the first quarter, JOE continued work on the Development of
Regional Impact (DRI) land-use entitlements process for SouthSide, a
mixed-use project being planned in south Tallahassee on 1,625 acres
for approximately 2,800 residential units and approximately 1,150,000
square feet of commercial space.
"We are working collaboratively with Tallahassee and Leon County
officials on a development concept for SouthSide that includes a
variety of single and multifamily residential product types," said
Greene. "Our objective is to provide a broad range of product that can
provide the community with a wide variety of inclusive housing
choices. The commercial component of SouthSide will include a mixture
of quality retail, restaurant and service-oriented uses, with an
emphasis on activity-based uses to create a gathering place for
residents."
Northeast Florida
RiverTown
After more than six years of predevelopment and entitlements work,
JOE is gearing up to start construction at RiverTown along the St.
Johns River south of Jacksonville in the second quarter. A formal
ground breaking ceremony with local officials has been scheduled for
June. Home site sales are expected to start this fall with some
closings expected in the fourth quarter of 2006.
Nineteen homebuilders seeking to purchase home sites were selected
for an interview and evaluation process. An announcement of those
homebuilders initially selected for RiverTown is expected in the third
quarter.
RiverTown is being planned for 4,500 housing units and 500,000
square feet of commercial space on 4,170 acres. Each of the seven
RiverTown residential districts are being planned to feel like unique
and distinctly different neighborhoods. All of the neighborhoods,
community and retail areas will be interwoven via a series of bike
paths and walkways, with parks and public meeting places, and all
roads leading to the community's centerpiece, the St. John's River.
RiverTown will offer homebuyers a wide variety of price points and
lifestyles, appealing to several different target markets, including
primary home owners, second home buyers and splitters.
Central Florida
Victoria Park
At Victoria Park, JOE accepted contracts for 21 single-family
homes in the first quarter at an average price of $345,700 and closed
51 single-family homes at an average price of $290,200. Contracts were
accepted for three home sites at an average price of $232,300, and
three home sites were closed at an average price of $237,300. The
development pace at Victoria Park has been accelerated to meet broader
demand driven by the market response to the Victoria Hills Golf Club
and other amenities.
Located between Orlando and Daytona Beach, Victoria Park sits on
1,859 acres in the historic college town of DeLand. This mixed-use
community is planned for approximately 4,200 residences built among
parks, lakes and conservation areas.
Artisan Park, Celebration
During the first quarter, JOE accepted contracts for 13
single-family homes at an average price of $798,300 and closed on 20
single-family homes at an average price of $675,700. In addition, one
home site was contracted for and closed during the quarter at a price
of $495,000.
Contracts on 16 condominiums were closed at Artisan Park at an
average price of $303,300 during the first quarter. JOE also accepted
contracts for four condominiums at an average price of $535,800 in the
first quarter of 2006.
In January 2006, JOE released most of the remaining single-family
homes in Artisan Park, including cottages, town homes and bungalows
ranging in price from the $400,000s to over $800,000. All remaining
sales and closings are expected to occur by the end of the first
quarter of 2007.
Artisan Park, the last phase of Celebration, is master-planned to
include 267 single-family homes, 47 town homes and 302 condominium
homes as well as parks, trails, an outdoor performance area and a
community clubhouse with a fitness center, pool, and educational and
recreational programming.
JOE owns 74 percent of the joint venture developing Artisan Park
and manages the project.
Southwest Florida
SevenShores (Formerly Perico Island)
After seven years of entitlements and planning work,
infrastructure construction has started on SevenShores in Bradenton in
Manatee County. Entitled for 686 condominium residences, SevenShores
is being designed to become a condominium community with panoramic
vistas of Tampa Bay, Anna Maria Sound, Perico Bayou and the Gulf of
Mexico, as well as the Manatee River, Mangrove Marshes and a 27-acre
interior lake. The community is planned to feature a private clubhouse
including a fitness center, grill room, screening room, swimming pool
and tennis courts.
Sales started last week with prices ranging from the high
$700,000s to more than $1.5 million.
JOE also owns seven adjacent acres, including a marina, which will
allow a significant upgrade of the existing street frontage, create an
aesthetically pleasing community entrance and provide future residents
with marina access and other amenities.
North and South Carolina
Saussy Burbank, JOE's homebuilder based in Charlotte, N.C.,
accepted contracts for 167 homes at an average price of $295,000
during the first quarter, compared to 178 contracts at an average
price of $236,600 in the first quarter of 2005. Saussy also closed on
the sale of 146 homes at an average price of $263,800 during the first
quarter, compared to closing on 132 homes at an average price of
$239,900 during the comparable period last year.
Table 8 summarizes the sales activity at various residential
communities for the first quarter of 2006 compared to the same period
in 2005.
Table 8
St. Joe Towns & Resorts
Sales Activity
For the Three Months Ended March 31,
($ in thousands)
2006
--------------------------------------
Contracts
Units Avg. Accepted Avg.
Closed Price (1) Price
--------- -------- ---------- --------
WaterColor
Home Sites 1 $315.0 1 $315.0
Single/Multifamily Homes 2 940.0 -- --
PRC Shares -- -- -- --
WaterSound Beach
Home Sites -- -- -- --
Single-Family Homes 3 971.7 3 971.7
Multifamily Homes -- -- -- --
WaterSoundWest Beach
Home Sites 1 736.4 -- --
Single-Family Homes -- -- -- --
Palmetto Trace
Home Sites 8 76.5 8 76.5
Single-Family Homes 20 298.9 6 326.1
The Hammocks
Home Sites -- -- -- --
Single-Family Homes 20 148.2 -- --
Hawks Landing
Home Sites 23 71.7 23 71.7
WindMark Beach
Home Sites -- -- -- --
Bridgeport
Home Sites -- -- -- --
SouthWood
Home Sites 5 96.0 3 85.0
Single-Family Homes 46 300.1 18 303.0
SummerCamp
Home Sites 1 354.0 2 371.5
Single-Family Homes -- -- -- --
St. Johns G & CC
Home Sites 6 146.3 6 146.3
Single-Family Homes 14 491.1 10 563.8
Hampton Park/James Island
Single-Family Homes -- -- -- --
Victoria Park
Home Sites 3 237.3 3 232.3
Single-Family Homes 51 290.2 21 345.7
Artisan Park (2)
Home Sites 1 495.0 1 495.0
Single-Family Homes 20 675.7 13 798.3
Multifamily Homes 16 303.3 4 535.8
Paseos (2)
Single-Family Homes 22 527.7 -- --
Rivercrest (2)
Single-Family Homes 110 196.8 (1) 200.4
Saussy Burbank
Single-Family Homes 146 263.8 167 295.0
--------- -------- ---------- --------
Total 519 $280.5 288 $314.1
========= ======== ========== ========
2005
--------------------------------------
Contracts
Units Avg. Accepted Avg.
Closed Price (1) Price
--------- -------- ---------- --------
WaterColor
Home Sites 8 $1,074.6 8 $1,074.6
Single/Multifamily Homes -- -- -- --
PRC Shares 1 285.0 1 285.0
WaterSound Beach
Home Sites 12 941.8 12 941.8
Single-Family Homes -- -- -- --
Multifamily Homes -- -- -- --
WaterSoundWest Beach
Home Sites -- -- -- --
Single-Family Homes -- -- -- --
Palmetto Trace
Home Sites -- -- -- --
Single-Family Homes 36 153.0 51 237.0
The Hammocks
Home Sites -- -- -- --
Single-Family Homes 22 158.9 27 138.9
Hawks Landing
Home Sites -- -- -- --
WindMark Beach
Home Sites -- -- -- --
Bridgeport
Home Sites 10 17.7 10 17.7
SouthWood
Home Sites 10 113.4 8 134.5
Single-Family Homes 51 231.8 56 262.4
SummerCamp
Home Sites -- -- -- --
Single-Family Homes -- -- -- --
St. Johns G & CC
Home Sites 8 60.8 -- --
Single-Family Homes 24 371.9 16 460.0
Hampton Park/James Island
Single-Family Homes 7 380.0 2 555.0
Victoria Park
Home Sites 11 100.8 13 134.9
Single-Family Homes 64 239.3 95 275.0
Artisan Park (2)
Home Sites 3 290.0 3 290.0
Single-Family Homes 6 469.0 14 589.3
Multifamily Homes -- -- 41 433.7
Paseos (2)
Single-Family Homes 26 433.3 1 773.0
Rivercrest (2)
Single-Family Homes 96 167.9 195 195.6
Saussy Burbank
Single-Family Homes 132 239.9 178 236.6
--------- -------- ---------- --------
Total 527 $253.4 731 $268.5
========= ======== ========== ========
COMMERCIAL REAL ESTATE
- ----------------------
Pretax income from continuing operations for the commercial
segment was $0.3 million for the first quarter of 2006, compared with
$1.2 million in the same quarter of 2005.
Table 9 summarizes JOE's commercial land sales in Northwest
Florida for the first quarters of 2006 and 2005.
Table 9
St. Joe Commercial Northwest Florida Land Sales
Quarter Ended March 31,
Gross Sales Price Average Price/Acre
Number of Sales Acres Sold (in thousands) (in thousands)
--------------- ---------- ---------------- ------------------
2006 6 14 $2,065 $148
2005 8 41 4,628 114
"We are pleased with St. Joe Commercial's performance in the first
quarter, but we are even more excited about the rest of 2006 and
beyond," said Greene. "Commercial activity will remain lumpy, but
activity and interest in Northwest Florida remains high," said Greene.
Northwest Florida
Multifamily
In the first quarter, JOE closed the sale on a parcel intended for
the development of an apartment complex totaling nine acres at an
average price of $105,000 per acre. This parcel, with residential
entitlements of 120 units, was the second phase of the Glades project
sold to Trammell Crow Residential. Additionally, JOE is under contract
for two parcels, to be developed into apartments and town homes,
totaling 40 acres and 743 entitled units.
"Demand for attainable housing in Panama City Beach - and across
Northwest Florida - remains very strong," said Greene. "As Northwest
Florida's economy grows, as jobs are created, as the forecasted net
in-migration continues, we expect to see the strong demand for
attainable housing increase. Several national multifamily developers
are now active in the Panama City Beach market. We believe this will
be a growing product line."
Retail
"Interest in Northwest Florida retail sites is also strong, with
many national retailers and restaurant chains looking for potential
locations," said Greene. "We have been working closely with a national
big-box user and have a closing expected in the second quarter. The
site in Panama City Beach is being planned to create additional retail
out parcel opportunities."
"Our retail program has been gaining momentum," said Greene. "At
Pier Park, Simon Property Group has started construction of its
project that will generate approximately 2,000 jobs. This project
focuses a lot of attention on opportunities in the Panama City Beach
region for national developers, retailers and other businesses."
"Recently, we have seen more retail interest in our Tallahassee
properties as that economy strengthens and the number of rooftops in
SouthWood continues to grow," said Greene. "SouthSide, being planned
with more than 1.1 million square feet of commercial space, is now
making progress through the entitlements process."
Commerce and Business Parks
"Demand remains strong for our commerce park product, and we
believe we are well positioned for the future, considering all the
economic development activity underway in Northwest Florida," said
Greene. "JOE plans to start infrastructure construction later this
quarter on the new Cedar Grove Commerce Park in east Bay County. JOE's
commerce parks provide local and regional businesses with the
opportunity to put new operations into service quickly, and as a
result, new jobs are being created in the region."
At Beach Commerce Park, pricing continued to increase in the first
quarter for office and light industrial land with average pricing at
$244,000 per acre, compared with average pricing of $64,000 per acre
in the same quarter a year ago.
Investment Property Portfolio
As of March 31, 2006, JOE's portfolio of commercial office
buildings (acquired through its redeployment of tax deferred sales
proceeds from the sale of land and buildings) totaled approximately
2.5 million square feet and represented an aggregate initial
investment of $373 million.
Table 10 summarizes JOE's investment property portfolio of office
buildings as of March 31, 2006.
Table 10
Investment Portfolio of Office Buildings
March 31, 2006
Number of Net Rentable Leased
Location Properties Square Feet Percentage
-------- ---------- ------------ ------------
Florida
Jacksonville 1 136,000 69%
Northwest Florida 3 156,000 96
Orlando 2 317,000 94
Tampa 2 147,000 93
Atlanta 8 1,289,000 80
Charlotte 1 158,000 100
Virginia 3 354,000 96
---------- ------------ ------------
Total 20 2,557,000 86%
========== ============ ============
ST. JOE LAND COMPANY
- --------------------
St. Joe Land Company had pretax income from continuing operations
of $11.8 million in the first quarter of 2006, compared with $12.0
million in the first quarter of 2005. St. Joe Land Company had a solid
first quarter with total revenue of $17.5 million, compared to $17.8
million in the first quarter of 2005.
During the first quarter, JOE sold 159 acres to small developers
and local businesses for $3.6 million, or an average of $22,640 per
acre. These parcels have rural and suburban development potential, but
are more profitable if sold to others due to size, location or other
reasons.
"FloridaWild, a new product line, was launched in the first
quarter with an excellent market reception," said Everitt Drew,
president of St. Joe Land Company. "Another new product, WireGrass
Preserves, is being introduced in the second quarter."
WoodLands
Sales of WoodLands, JOE's rural recreational land, totaled $12.0
million for 4,882 acres at an average price of $2,457 per acre,
compared to $10.8 million for 6,786 acres at an average price of
$1,592 per acre in the first quarter of 2005.
"Demand for WoodLands remained strong in the first quarter," said
Drew. "Customers are clearly making pre-retirement purchases inland.
Our customer base in south and central Florida continues to grow.
Interest in rural recreational land in Liberty, Calhoun, Gadsden and
Jefferson counties is expanding from buyers outside the region."
RiverCamps
RiverCamps are planned settlements in rustic settings, offering
personal retreats in private preserves. RiverCamps' low-density home
sites, typically averaging one acre, are surrounded by a large common
area preserved for conservation.
RiverCamps on Crooked Creek
In the first quarter, contracts were closed for three home sites
at RiverCamps on Crooked Creek at an average price of $242,000.
During the first quarter, construction was completed on the boat
launch and dock facility at the Boat Basin, allowing owners access to
Crooked Creek, the bay and the Gulf of Mexico. Construction was also
completed on more than six miles of nature trails, elevated walkways
and bridges traversing marsh grass, deepwater creeks, and the coastal
berm fronting West Bay. Infrastructure for 233 home sites and a
RiverCamps prototype cabin have also been completed. Meanwhile,
construction continued in the first quarter on the RiverHouse amenity
complex.
RiverCamps on Crooked Creek, located in western Bay County, is
currently planned for up to 408 home sites on 1,491 acres of former
timberland and features views of West Bay, the Intracoastal Waterway
and Crooked Creek.
WhiteFence Farms
JOE's WhiteFence Farms will be single-family farmsteads of 3 to 15
acres located in communities of approximately 350 to 1,000 acres.
WhiteFence Farms are being designed for those who want to live close
to the land - but not have to make a living from it. Though the
communities will be located in rural settings, sites will be proximate
to suburban services.
JOE plans to develop WhiteFence Farms in multiple locations over
the next several years. The deed-restricted farmsteads are being
planned for a large home site plus other optional buildings, such as
barns, guesthouses and stables. Some may have ponds or other water
features. Owners will have room to pursue a number of rural interests,
including gardening, hobby farming and horseback riding with common
farm fields interconnected with trails.
WhiteFence Farms - Red Hills
Construction of a 2006 Idea House and Farmstead at WhiteFence
Farms - Red Hills has been completed. They are to be featured in the
August 2006 issues of Southern Living and The Progressive Farmer
magazines. Sales are expected to begin in early 2007.
WhiteFence Farms - Red Hills is being planned for 51 farmsteads on
373 acres near Tallahassee. Initial pricing is expected to range from
$250,000 to $750,000 for farmstead sites ranging in size from three to
6.5 acres.
FloridaWild
In the first quarter, the introduction of FloridaWild, a new
product line making environmentally unique parcels available for sale
throughout Northwest Florida, generated significant media coverage and
market enthusiasm.
FloridaWild offers parcels ranging from several dozen to several
thousand acres. Much of the property - which hasn't changed
significantly during the last century - is adjacent to or near easily
accessible public land, including wildlife management areas, national
forests and state parks.
FloridaWild properties are expected to appeal to environmentally
conscious buyers who want to protect and enhance Northwest Florida's
environmental heritage. JOE has also sold conservation land to
federal, state and local governments who are also potential buyers of
FloridaWild land. FloridaWild property owners are expected to use
their land for a variety of outdoor activities, including fishing,
hiking, hunting and bird and wildlife watching. JOE has a team of
experts, including wildlife biologists, land managers, and foresters,
to help buyers understand the land. Prices will generally range from
$2,500 to $9,500 per acre.
Florida Ranches
Florida Ranches will be rural communities of primary home
properties ranging in size from 10 to 40 acres, appealing to families
seeking open space for horse pastures, hobby farms or simply "elbow
room" not available in suburban residential areas.
Florida Ranches will be characterized by open ranges with long
view vistas. Community enhancements will consist of a paved access
road and groomed pasture land, all under covenants and design
guidelines governed by an owners association. Sales are expected to
begin in 2007.
WireGrass Preserves
JOE is introducing an additional New Ruralism product line called
WireGrass Preserves designed as recreational communities of 50- to
150-acre tracts appealing to outdoor enthusiasts and used for fishing,
hunting, horseback riding, wildlife viewing and family gatherings.
WireGrass Preserves are habitat-rich properties with a mix of
piney woods, open pastures and hardwood river and creek bottoms
capable of attracting and supporting turkey, deer, quail and other
wildlife. Community enhancements are planned to consist of paved,
controlled access roads and a central gathering pavilion, all under
covenants and design guidelines governed by an owners association.
Sales are expected to start in 2006 with initial pricing starting at
$7,500 per acre.
FINANCIAL DATA
($ in millions except per share amounts)
Summary Balance Sheet
March 31, 2006 March 31, 2005
-------------- ---------------
Assets
Investment in real estate $1,117.3 $989.6
Cash and cash equivalents 79.4 43.4
Accounts receivable 71.8 112.4
Prepaid pension asset 96.1 95.0
Property, plant and equipment, net 43.7 34.5
Other assets 156.7 153.8
-------------- ---------------
Total assets $1,565.0 $1,428.7
============== ===============
Liabilities and Stockholders' Equity
Debt $562.3 $444.8
Accounts payable, accrued liabilities 225.0 204.7
Deferred income taxes 297.4 267.5
-------------- ---------------
Total liabilities 1,084.7 917.0
Minority interest 18.3 11.9
Total stockholders' equity 462.0 499.8
-------------- ---------------
Total liabilities and stockholders'
equity $1,565.0 $1,428.7
============== ===============
Debt Schedule
March 31, 2006 March 31, 2005
-------------- ---------------
Revolving debt facility $20.0 $50.0
Senior notes 407.0 257.0
Acquisition and other debt 4.0 14.9
Other collateralized/specific asset
related debt 131.3 122.9
-------------- ---------------
Total debt $562.3 $444.8
============== ===============
Consolidated Quarterly Comparisons
Quarter Ended March 31,
------------------------------
2006 2005
-------------- ---------------
Revenues:
Real estate sales $139.1 $158.5
Rental revenue 12.2 10.0
Timber sales 8.5 8.0
Other revenues 7.6 8.2
-------------- ---------------
Total revenues 167.4 184.7
-------------- ---------------
Expenses:
Cost of real estate sales 93.6 105.0
Cost of rental revenue 4.6 3.8
Cost of timber sales 5.9 5.2
Cost of other revenues 8.0 8.0
Other operating expenses 20.2 15.7
Corporate expense, net 15.7 11.9
Depreciation and amortization 10.4 9.4
-------------- ---------------
Total expenses 158.4 159.0
Operating profit 9.0 25.7
Other income (expense) (3.5) (1.2)
-------------- ---------------
Pretax income from continuing operations 5.5 24.5
Income tax expense (2.5) (9.7)
Minority interest expense (2.1) (0.9)
Equity in income of unconsolidated
affiliates 2.8 1.9
Discontinued operations, net of tax -- (0.4)
-------------- ---------------
Net income $3.7 $15.4
============== ===============
Net income per diluted share $0.05 $0.20
============== ===============
Weighted average diluted shares
outstanding 74,943,110 76,701,737
============== ===============
Quarterly Revenues by Segment
Quarter Ended March 31,
------------------------------
2006 2005
-------------- ---------------
Towns & Resorts
Real estate sales $118.8 $129.0
Rental revenue 0.3 0.2
Other revenues 7.4 8.0
-------------- ---------------
Total Towns & Resorts 126.5 137.2
-------------- ---------------
Commercial real estate
Real estate sales 2.8 11.7
Rental revenue 11.9 9.8
Other revenues 0.2 0.2
-------------- ---------------
Total Commercial real estate 14.9 21.7
-------------- ---------------
Land Sales
Real estate sales 17.5 17.8
-------------- ---------------
Total Land sales 17.5 17.8
-------------- ---------------
Forestry sales 8.5 8.0
-------------- ---------------
Total revenues $167.4 $184.7
============== ===============
Quarterly Segment Pretax Income
From Continuing Operations
Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31
2006 2005 2005 2005 2005 2004 2004 2004 2004
------ ------ ------ ------ ------ ------ ------ ------ ------
Towns &
Resorts $11.7 $37.5 $25.6 $50.9 $23.1 $24.7 $31.8 $34.4 $9.1
Commer-
cial
real
estate 0.3 4.9 14.2 2.5 1.2 17.0 2.8 1.0 0.7
Land
sales 11.8 24.2 16.6 16.0 12.0 16.3 11.5 10.3 18.6
Forestry 2.0 0.5 0.6 1.6 2.0 2.1 1.9 2.4 2.7
Corporate
and
other (20.3) (15.0) (16.1) (15.4) (13.8) (17.0) (13.6) (11.9)(11.5)
------ ------ ------ ------ ------ ------ ------ ------ ------
Pretax
income
from
con-
tinuing
oper-
ations $5.5 $52.1 $40.9 $55.6 $24.5 $43.1 $34.4 $36.2 $19.6
====== ====== ====== ====== ====== ====== ====== ====== ======
Other Income (Expense)
Quarter Ended March 31,
------------------------------
2006 2005
-------------- ---------------
Dividend and interest income $1.9 $0.3
Interest expense (3.7) (2.5)
Other (1.7) 1.0
-------------- ---------------
Total $(3.5) $(1.2)
============== ===============
Equity in Income of Unconsolidated Affiliates
Quarter Ended March 31,
------------------------------
2006 2005
-------------- ---------------
Towns & Resorts $2.8 $1.9
-------------- ---------------
Total $2.8 $1.9
============== ===============
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 March 31, 2006, and to discuss
earnings guidance for 2006 on Tuesday, May 2, 2006, at 10:30 a.m.,
Eastern Daylight Time.
To participate in the call, please phone 877.704.5378 (for
domestic calls from the United States) or 913.312.1292 (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 888.203.1112 (domestic) or
719.457.0820 (international) using access code 5960254. 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 and land sales. JOE also has significant interests in
timber.
More information about JOE can be found at our web site at
http://www.joe.com.
Forward-Looking Statements
We have made forward-looking statements in this earnings release,
particularly in the Outlook Section, pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Any statements in this release that are not historical facts are
forward-looking statements. You can find many of these forward-looking
statements by looking for words such as "intend", "anticipate",
"believe", "estimate", "expect", "plan", "should", "forecast" or
similar expressions. In particular, forward-looking statements
include, among others, statements about the following:
-- 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 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;
-- changes in macro-economic perceptions or conditions in the
real estate market;
-- 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 approvals of the local airport
authority and the Federal Aviation Administration, various
permits and the availability of adequate funding;
-- potential liability under environmental laws or other laws or
regulations;
-- changes in laws, regulations or the regulatory environment
affecting the development of real estate;
-- fluctuations in the size and number of transactions from
period to period;
-- 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.
Copyright 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.
CONTACT: The St. Joe Company, Jacksonville
JOE Media Contact: Jerry M. Ray, 904-301-4430
jray@joe.com
or
JOE Investor Contact: Brad Slappey, 904-301-4302
bslappey@joe.com