SEC Filing | The St. Joe Company

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 1-10466

The St. Joe Company

(Exact name of registrant as specified in its charter)


Florida	59-0432511
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

130 Richard Jackson Boulevard, Suite 200
Panama City Beach, Florida	32407
(Address of principal executive offices)	(Zip Code)

(850) 231-6400

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Exchange on Which Registered
Common Stock, no par value	JOE	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☑ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☑ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☑

As of October 24, 2022, there were 58,335,541 shares of common stock, no par value, outstanding.

Table of Contents

THE ST. JOE COMPANY

INDEX


	Page No.
PART I
Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets - September 30, 2022 and December 31, 2021	3
Condensed Consolidated Statements of Income - Three and Nine Months Ended September 30, 2022 and 2021	5
Condensed Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2022 and 2021	6
Condensed Consolidated Statements of Changes in Stockholders’ Equity - Three and Nine Months Ended September 30, 2022 and 2021	7
Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2022 and 2021	9
Notes to the Condensed Consolidated Financial Statements	11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
Item 3. Quantitative and Qualitative Disclosures About Market Risk	79
Item 4. Controls and Procedures	79
PART II
Item 1. Legal Proceedings	80
Item 1A. Risk Factors	80
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	80
Item 3. Defaults Upon Senior Securities	80
Item 4. Mine Safety Disclosures	80
Item 5. Other Information	81
Item 6. Exhibits	81
SIGNATURES	82

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)


	September 30,		December 31,
	2022		2021
ASSETS
Investment in real estate, net	$	883,796	$	690,113
Investment in unconsolidated joint ventures		58,865		52,027
Cash and cash equivalents		18,846		70,162
Investments - debt securities		74,033		88,956
Other assets		62,190		70,235
Property and equipment, net of accumulated depreciation of $64,666 and $64,251 as of September 30, 2022 and December 31, 2021, respectively		36,981		31,145
Investments held by special purpose entities		204,829		205,513
Total assets	$	1,339,540	$	1,208,151
LIABILITIES AND EQUITY
Liabilities:
Debt, net	$	321,085	$	223,034
Other liabilities		83,338		67,985
Deferred revenue		39,311		36,207
Deferred tax liabilities, net		81,558		77,259
Senior Notes held by special purpose entity		177,783		177,566
Total liabilities		703,075		582,051

Commitments and contingencies (Note 19)

Equity:
Common stock, no par value; 180,000,000 shares authorized; 58,912,504 and 58,882,549 issued at September 30, 2022 and December 31, 2021, respectively; and 58,335,541 and 58,882,549 outstanding at September 30, 2022 and December 31, 2021, respectively		297,129		296,873
Retained earnings		336,049		310,925
Accumulated other comprehensive income (loss)		2,047		(389)
Treasury stock at cost, 576,963 shares held at September 30, 2022		(19,972)		—
Total stockholders’ equity		615,253		607,409
Non-controlling interest		21,212		18,691
Total equity		636,465		626,100
Total liabilities and equity	$	1,339,540	$	1,208,151

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)

The following presents the portion of the condensed consolidated balances attributable to the Company’s consolidated joint ventures, which, as of September 30, 2022 and December 31, 2021, include the Pier Park North joint venture (“Pier Park North JV”), Pier Park Crossings LLC (“Pier Park Crossings JV”), Origins Crossings, LLC (“Watersound Origins Crossings JV”), SJWCSL, LLC (“Watercrest JV”), Watersound Closings & Escrow, LLC (“Watersound Closings JV”), Pier Park Crossings Phase II LLC (“Pier Park Crossings Phase II JV”), Pier Park Resort Hotel, LLC (“Pier Park Resort Hotel JV”), the 30A Greenway Hotel, LLC (“The Lodge 30A JV”), Panama City Timber Finance Company, LLC and Northwest Florida Timber Finance, LLC. As of September 30, 2022, condensed consolidated balances attributable to the Company’s consolidated joint ventures also includes Mexico Beach Crossings, LLC (“Mexico Beach Crossings JV”). See Note 2. Summary of Significant Accounting Policies. Basis of Presentation and Principles of Consolidation and Note 4. Joint Ventures for additional information. The following assets may only be used to settle obligations of the consolidated joint ventures and the following liabilities are only obligations of the consolidated joint ventures and do not have recourse to the general credit of the Company, except for covenants and guarantees discussed in Note 10. Debt, Net.


	September 30,		December 31,
	2022		2021
ASSETS
Investment in real estate, net	$	257,697	$	206,565
Cash and cash equivalents		7,539		10,564
Other assets		22,942		17,392
Investments held by special purpose entities		204,829		205,513
Total assets	$	493,007	$	440,034
LIABILITIES
Debt, net	$	226,893	$	173,531
Other liabilities		17,868		17,602
Deferred revenue		310		234
Senior Notes held by special purpose entity		177,783		177,566
Total liabilities	$	422,854	$	368,933

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands except per share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenue:
Real estate revenue	$	17,330	$	23,500	$	82,132	$	85,615
Hospitality revenue		29,035		22,292		74,912		57,986
Leasing revenue		10,049		7,146		28,215		19,112
Timber revenue		1,162		1,058		5,438		4,827
Total revenue		57,576		53,996		190,697		167,540
Expenses:
Cost of real estate revenue		7,229		8,471		35,324		33,067
Cost of hospitality revenue		21,959		16,536		58,238		43,469
Cost of leasing revenue		4,946		3,106		12,596		8,297
Cost of timber revenue		172		118		577		502
Corporate and other operating expenses		5,322		4,987		16,493		17,161
Depreciation, depletion and amortization		5,771		4,617		16,263		12,594
Total expenses		45,399		37,835		139,491		115,090
Operating income		12,177		16,161		51,206		52,450
Other income (expense):
Investment income, net		2,735		2,331		7,531		4,813
Interest expense		(4,727)		(4,114)		(12,951)		(11,639)
Gain on contributions to unconsolidated joint ventures		1,430		—		2,001		3,290
Other income, net		2,128		7,329		6,045		9,595
Total other income, net		1,566		5,546		2,626		6,059
Income before equity in income (loss) from unconsolidated joint ventures and income taxes		13,743		21,707		53,832		58,509
Equity in income (loss) from unconsolidated joint ventures		2,481		(501)		3,415		(1,570)
Income tax expense		(4,163)		(6,429)		(14,643)		(15,180)
Net income		12,061		14,777		42,604		41,759
Net loss attributable to non-controlling interest		286		419		194		857
Net income attributable to the Company	$	12,347	$	15,196	$	42,798	$	42,616

NET INCOME PER SHARE ATTRIBUTABLE TO THE COMPANY
Basic	$	0.21	$	0.26	$	0.73	$	0.72
Diluted	$	0.21	$	0.26	$	0.73	$	0.72

WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		58,814,972		58,882,549		58,859,723		58,882,549
Diluted		58,814,972		58,882,549		58,861,440		58,882,549

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net income:	$	12,061	$	14,777	$	42,604	$	41,759
Other comprehensive (loss) income:
Net unrealized (loss) gain on available-for-sale investments		(31)		3		(686)		(1)
Interest rate swaps		1,427		301		4,540		410
Interest rate swap - unconsolidated joint venture		307		(1)		615		133
Reclassification of net realized loss included in earnings		15		154		150		251
Total before income taxes		1,718		457		4,619		793
Income tax expense		(327)		(116)		(828)		(201)
Total other comprehensive income, net of tax		1,391		341		3,791		592
Total comprehensive income, net of tax		13,452		15,118		46,395		42,351
Total comprehensive (income) loss attributable to non-controlling interest		(142)		419		(1,161)		857
Total comprehensive income attributable to the Company	$	13,310	$	15,537	$	45,234	$	43,208

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)


							Accumulated
	Common Stock						Other
	Outstanding				Retained		Comprehensive		Treasury		Non-controlling
	Shares		Amount		Earnings		Income		Stock		Interest		Total
Balance at June 30, 2022	58,907,744	$	297,021	$	329,593	$	1,084	$	(180)	$	19,922	$	647,440
Capital contribution from non-controlling interest	—		—		—		—		—		1,579		1,579
Capital distribution to non-controlling interest	—		—		—		—		—		(431)		(431)
Stock based compensation expense	—		108		—		—		—		—		108
Repurchase of common shares	(572,203)		—		—		—		(19,792)		—		(19,792)
Dividends ($0.10 per share)	—		—		(5,891)		—		—		—		(5,891)
Other comprehensive income, net of tax	—		—		—		963		—		428		1,391
Net income	—		—		12,347		—		—		(286)		12,061
Balance at September 30, 2022	58,335,541	$	297,129	$	336,049	$	2,047	$	(19,972)	$	21,212	$	636,465


							Accumulated
	Common Stock						Other
	Outstanding				Retained		Comprehensive		Treasury		Non-controlling
	Shares		Amount		Earnings		(Loss) Income		Stock		Interest		Total
Balance at June 30, 2021	58,882,549	$	296,873	$	273,214	$	(1,221)	$	—	$	19,649	$	588,515
Capital distribution to non-controlling interest	—		—		—		—		—		(304)		(304)
Dividends ($0.08 per share)	—		—		(4,711)		—		—		—		(4,711)
Other comprehensive income, net of tax	—		—		—		341		—		—		341
Net income	—		—		15,196		—		—		(419)		14,777
Balance at September 30, 2021	58,882,549	$	296,873	$	283,699	$	(880)	$	—	$	18,926	$	598,618

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

THE ST. JOE COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollars in thousands)

(Unaudited)

Common Stock

Accumulated Other

Outstanding

Retained

Comprehensive

Treasury

Non-controlling

Shares

Amount

Earnings

(Loss) Income

Stock

Interest