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Press Release: The St. Joe Company
October 26, 2005
JACKSONVILLE, FL -- The St. Joe Company (NYSE: JOE):
The St. Joe Company (NYSE: JOE - News) today announced that its Net Income for the third quarter of 2005 was
$36.1 million, or $0.47 per share, compared with $26.3 million, or $0.34 per share, for the third quarter of 2004.
Results for the third quarter include an after-tax charge of $6.2 million, or $0.08 per share, resulting from the
sale of its subsidiary, Advantis Real Estate Services Company. All per-share references in this release are presented
on a diluted basis.
Net Income for the first nine months of 2005 was $89.4 million, or $1.17 per share, compared with $62.0 million,
or $0.81 per share, for the first nine months of 2004.
"We are pleased with our third quarter performance," said JOE chairman and CEO Peter S. Rummell. "While
we faced a challenging resort residential market, our primary communities performed well, St. Joe Commercial had
a record quarter and St. Joe Land Company's rural land sales were strong. JOE's performance in the third quarter
underscores a point we have been making for some time now: our flexibility and increasing diversity is a tremendous
strength."
"Hurricane Katrina dominated the headlines for a significant part of the quarter," said Rummell. "For
JOE, the news was mixed. On the one hand, we were very fortunate since there was only minimal storm damage to JOE
property, allowing us to quickly resume normal operations."
"In fact, the storms may have created some long-term economic development opportunities for Northwest Florida,"
said Rummell. "For example, traffic at the Port of Panama City has increased significantly as a result of
the damage sustained at the Port of New Orleans. The Port of Panama City is one of the few deep water ports on
the Gulf Coast - and if it is eventually linked with the relocated airport, Bay County has the potential to become
an intermodal transportation center."
"On the other hand, hurricanes in the third quarter depressed normal visitor traffic patterns - and consequently
demand for resort residential properties," said Rummell. "Local Northwest Florida officials have noted
a drop-off in tourism during the summer season."
JOE's Resort Residential Sales Activity Slowed
"Recently, activity in our resort residential projects in Northwest Florida has slowed, although there are
some indicators of continued demand for coastal resort property," said Rummell. "For example, during
September and after Hurricane Katrina made landfall, we converted 48 non-binding reservations to closed sales at
SummerCamp."
"Looking ahead, given JOE's unique advantages, Florida's strong demographic drivers and resilient economy,
we believe our resort residential market's long-term prospects remain excellent," said Rummell.
Strong Market for Primary Housing
"Meanwhile, Florida's primary housing market continues to build strength," said Rummell. "JOE achieved
strong pricing results at Victoria Park in DeLand, SouthWood in Tallahassee and Palmetto Trace in Panama City Beach.
After softening somewhat in the third quarter, sales at Artisan Park in Orlando appear to be rebounding as we move
into the fourth quarter. At St. John's Golf & Country Club, just south of Jacksonville, pricing remains strong
as this community nears build-out. All of these communities have entered the fourth quarter with significant backlog
and earnings potential."
"New residential opportunities are picking up for our commercial division," said Rummell. "In the
third quarter JOE sold four tracts of entitled land to national and regional multifamily developers, including
Trammell Crow Residential. Trammell Crow's entry into the Northwest Florida market indicates just how far we've
come in terms of developing the market. We will continue to create such opportunities for years to come."
Entitlements Progress Builds Value
"The complex, time-consuming process of gaining entitlements in Florida may be keeping demand ahead of supply
in the primary housing market," said Kevin M. Twomey, JOE's president and COO. "New projects well into
the planning process, such as WestBay Landing, represent additional opportunities to meet growing market demand."
"We are excited about our progress in getting entitlements to meet demand for coastal and other Florida properties,"
said Twomey. "Also, in late September, we received the final permit on WaterSound required to commence construction.
WindMark Beach, WaterSound, RiverTown and Perico Island are all moving into position to produce significant revenue."
"With approximately 34,500 entitlements in hand or in process, JOE is well-positioned to help meet demand,"
said Twomey. "More importantly, we have developed a core competency in getting land entitled; something we
believe will help us create value well into the future. We continue to work hard to add entitlements for inland
primary housing in order to build inventory across a broad range of price points."
New Ruralism Products Being Positioned to Capture Interest in Rural Land
"We are very pleased with the progress we are making with rural land sales," said Twomey. "St. Joe
Land Company had its best quarter this year in terms of total revenue, income and price-per-acre. The percentage
of buyers from outside the region continued to increase. Demand for rural recreational land remains strong moving
into the final quarter of the year with good pricing."
"JOE is working to bring a new portfolio of products to market based on an emerging New Ruralism development
philosophy," said Twomey. "We believe the diversity of our inland holdings and product offerings is an
emerging strength. WhiteFence Farms and Florida Ranches are moving into position to join RiverCamps as JOE products
that will allow people to live close to the land, but on their own terms. We will be bringing our first WhiteFence
Farms product to market next year, and we are currently building a 2006 Southern Living Idea House at WhiteFence
Farms, Red Hills near Tallahassee as part of the product launch."
Short-Term Challenges; Long-Term Opportunities
"It will remain unclear for some time what direct and indirect impacts the 2005 hurricane season will have
on JOE," said Rummell. "Effects on cost and supply of labor and building materials may impact our operations
in a variety of ways."
"On the positive side, Katrina also brought greater awareness of the need to focus on regional preparedness,"
said Rummell. "Fortunately for Florida, as Governor Jeb Bush testified to Congress on October 19th, Florida
has been the national leader for decades in policies intended to provide advance warning, safe evacuation, appropriate
building standards and efficient recovery."
"Katrina reminds us why good planning is so important to coastal living," said Rummell. "It highlights
one more reason why the effort to relocate the Panama City airport to an inland location beyond the storm surge
zone makes so much sense. It also emphasizes the practicality of moving a segment of U.S. 98 at WindMark Beach,
now well under construction, off the beach and appropriately inland."
"These examples highlight the opportunity JOE and local leaders have in Northwest Florida to learn from the
past and prepare for the future in a way that may be unprecedented," said Rummell.
"Florida will remain a favorite destination," said Rummell. "Whatever the 2005 hurricane season's
short-term impact on Florida may be, it pales next to the long-term prospects of the demographic forces at work
in what is one of the nation's most vibrant states - and one of the strongest, most diversified economies in the
world."
An Ironic Situation
"As we enter the fourth quarter, JOE is in an ironic situation," said Rummell. "Our stock price
is near a recent low, even though opportunities before us have never been greater. We are at the culmination of
eight years of hard work that will bring the next generation of JOE towns to market."
"In 2006, we expect WaterSound, Hawks Landing, WindMark Beach, RiverTown and Perico Island to come to market
- with a broad range of product for primary, retirement and resort living, in different geographic markets, at
a broad range of price points," said Rummell. "Together, the potential of these towns dwarfs what we
have accomplished at WaterColor and WaterSound Beach."
"And beyond that, our entitlements pipeline is positioned to bring us even more diversity and flexibility
both in the short and long term," Rummell said. "With all of that potential considered, we must then
factor in the progress being made on the proposed relocation of the Panama City airport."
"So, JOE is at the threshold of what we believe will be an extraordinary era of growth and opportunity for
JOE shareholders," said Rummell.
2005 OUTLOOK
Full Year Earnings Expectations of $1.70-$1.85
"Although JOE properties experienced little direct physical impact from Hurricane Katrina, third quarter resort
residential sales activity in the region did slow significantly in the weeks following this hurricane as the world
paused to witness the dramatic events unfolding in Louisiana, Mississippi and Alabama," said JOE's CFO Anthony
M. Corriggio. "Given the near term effects of an active hurricane season on overall visitor traffic, and resort
residential sales in particular, we currently anticipate that our full year earnings will be within a range of
$1.70 to $1.85. This excludes the $0.08 after-tax loss on the sale of Advantis."
"The longer term supply and demand fundamentals remain intact for the wide range of unique development opportunities
we're undertaking in Northwest Florida and across the State," said Corriggio. "We continue to expect
the majority of fourth quarter earnings to come from our Towns & Resorts segment from a mix of resort and primary
residential communities across multiple geographic locations and product lines."
Towns & Resorts
"Artisan Park, a primary and second home community at Celebration near Orlando, is expected to be a significant
contributor to JOE's earnings in the fourth quarter," said Corriggio. "Approximately 130 units under
contract are expected to close during the fourth quarter. Victoria Park, Palmetto Trace and St. Johns Golf &
Country Club - all primary home communities -- are expected to be solid earnings contributors as well."
"Although we expect WaterColor and WaterSound Beach results to reflect a more moderate sales pace than we
had previously anticipated, the combined earnings contribution from these two communities is expected to be higher
in the fourth quarter than the third quarter 2005," said Corriggio. "We anticipate building on successful
third quarter sales at SummerCamp with additional releases planned for the fourth quarter."
"Our expectations for 2005 do not include sales at four major projects we plan to bring to market in 2006:
WindMark Beach, WaterSound, RiverTown and Perico Island," said Corriggio.
Commercial Real Estate
"We expect another strong quarter from JOE's Commercial segment in the fourth quarter," said Corriggio.
"The pipeline of commercial land sales scheduled to close in the quarter is again solid and diverse. Transactions
are expected to occur across the spectrum of product types, including land parcels entitled for retail, office,
light industrial, apartments and condominium development. Several of these transactions are somewhat sizeable with
closings scheduled for late in the fourth quarter."
"Overall, we expect fourth quarter earnings from commercial land sales activity to meet or exceed the level
realized in the third quarter," said Corriggio. "Also, as described last quarter, we expect the sale
of one additional office building from our investment property portfolio to close prior to the end of the year."
St. Joe Land Company
"The fourth quarter should see RiverCamps at Crooked Creek delivering meaningful income from prior releases,
with additional units planned to be released and closed prior to the end of the year," said Corriggio. "The
latest release of 40 units is currently in the market. We anticipate rural land sales activity during the quarter
to be relatively in line with the third quarter, along with commensurate income generation."
CREDIT FACILITY AND SENIOR NOTES
On July 22nd, JOE closed a new four-year $250 million revolving credit facility. The new facility provides more
favorable terms and interest rates than the previous facility.
On August 25th, JOE closed a $150 million offering of 10, 12, and 15 year senior notes issued in a private placement
with a weighted average fixed coupon of 5.35 percent.
DIVIDENDS AND STOCK REPURCHASE PROGRAM
A quarterly cash dividend of $0.16 per share of common stock was paid on September 30th to shareholders of record
at the close of business on September 15, 2005. This represents an increase of approximately 14.3 percent over
the dividend of $0.14 per share paid in each of the previous four quarters.
On September 30th, 75,680,606 JOE shares were outstanding. The number of weighted-average diluted shares in the
third quarter of 2005 was 76,089,307.
During the third quarter of 2005, JOE expended an aggregate of $32.8 million for dividends and the acquisition
of its shares. JOE acquired 266,300 of its shares at a cost of $20.8 million, an average price of $77.89 per share,
during the third quarter. On September 30th, approximately $59.8 million remained of the company's current stock
repurchase authorization.
Table 1 summarizes the company's stock repurchase activity from 1998 through September 30, 2005.
Table 1
Stock Repurchase Activity
Through September 30, 2005
Shares
-----------------------------------
Total
Surrendered Cost (in Average
Period Purchased (1) Total millions) Price
-------------- ----------- ----------- ----------- --------- ---------
1998 2,574,200 11,890 2,586,090 $ 55.5 $ 21.41
1999 2,843,200 11,890 2,855,090 69.5 24.31
2000 3,517,066 -- 3,517,066 80.2 22.78
2001 7,071,300 58,550 7,129,850 176.0 24.67
2002 5,169,906 256,729 5,426,635 157.6 29.03
2003 2,555,174 812,802 3,367,976 102.9 30.55
2004 1,561,565 884,633 2,446,198 105.0 42.90
2005 842,400 61,203 903,603 68.0 75.21
----------- ----------- ----------- --------- ---------
Total/Weighted
Average 26,134,811 2,097,697 28,232,508 $ 814.8 $ 28.83
=========== =========== =========== ========= =========
(1) Shares surrendered by company executives as payment for the strike
price and taxes due on exercised stock options or taxes due on the
vesting of restricted stock.
"We continue to view our dividend and repurchase program as an important contributor to shareholder value,"
said Corriggio. "As of September 30th, the total amount of capital distributed to shareholders in 2005 via
share repurchases and dividends was approximately $101.4 million."
"We previously set our benchmark at $125 million to $175 million for this program for the full-year 2005,"
said Corriggio. "During the remainder of the year, we intend to target the high-end of this range by more
aggressively repurchasing stock."
ENTITLEMENTS
On September 30th, JOE owned approximately 850,000 acres, concentrated primarily in Northwest Florida. These holdings
included approximately 345,000 acres within 10 miles of the coast of the Gulf of Mexico and approximately 505,000
acres outside the 10-mile coastal perimeter, including approximately 50,000 acres in southwest Georgia.
"Developers nationwide consider land acquisition and gaining entitlements to be the two biggest challenges
they face," said Twomey. "JOE is fortunate to own a tremendous amount of high-quality, low-basis land.
And over the past eight years, we have built a core competency in Florida's land planning and entitlements process.
We currently have land use entitlements for approximately 34,500 units in hand or in process, with each representing
significant future value."
"During the third quarter, JOE sold four tracts of entitled land to national and regional multifamily developers,"
said Twomey. "These entitled parcels, which were added to Table 2 in the second quarter of 2005, illustrate
the demand for multifamily land in Northwest Florida. Sales of multifamily land are another example of how JOE
is increasing the sales absorption of residential land holdings as well as expanding the housing options in Bay
County."
"We received final permits to commence construction at WaterSound on September 28th, marking an even more
important entitlements milestone," said Twomey. "Permits have been received this year for SummerCamp,
WindMark Beach and now WaterSound, so that construction is now underway on the next generation of JOE Northwest
Florida projects."
JOE submitted a zoning request in the third quarter for the WestBay Landing, marking the first development activity
in the West Bay Area Sector Plan. This new community is being planned for 685 units on 1,115 acres.
Table 2 summarizes JOE's Florida residential projects with land-use entitlements as of September 30th. This table
includes multifamily projects, which are marketed by our commercial group.
Table 2
Summary of Land-Use Entitlements (1)
JOE Residential Projects in Florida
September 30, 2005
Project Project
Project County Acres Units(2)
---------------------- -------------- ---------- ----------
In Development:(3)
----------------------
Artisan Park(4) Osceola 175 616
Bridgeport Gulf 15 37
Cutter Ridge Franklin 10 25
Landings at Wetappo Gulf 113 16
Palmetto Trace Bay 141 481
Paseos(4) Palm Beach 175 325
RiverCamps on Crooked
Creek Bay 1,491 408
Rivercrest(4) Hillsborough 413 1,382
RiverSide at Chipola Calhoun 120 10
SouthWood(5) Leon 3,370 4,770
St. Johns Golf &
Country Club St. Johns 820 799
The Hammocks Bay 133 457
SummerCamp Franklin 762 499
Victoria Park Volusia 1,859 4,200
Walton Corners Leon 60 32
WaterColor Walton 499 1,140
WaterSound Beach Walton 256 511
WaterSound West Beach Walton 62 199
WaterSound Walton 1,402 1,330
WindMark Beach Gulf 2,020 1,662
---------- ----------
Subtotal 13,896 18,899
---------- ----------
In Pre-Development:(3)
----------------------
Bayview Estates Gulf 13 52
Boggy Creek Bay 630 1,260
Camp Creek Golf
Cottages Walton 10 50
East Lake Powell Bay 181 360
Glades Bay 26 360
Hammocks at St. Joseph
Bay Gulf 56 18
Hawks Landing Bay 88 167
Hills Road Bay 30 356
Long Avenue Gulf 22 52
ParkPlace (Osprey
Landing) Bay 118 250
Perico Island(6) Manatee 352 686
Pier Park Timeshare Bay 13 125
Port St. Joe Millsite
Area(7) Gulf 170 598
Powell Adams Bay 32 1,425
RiverCamps on Sandy
Creek Bay 6,500 624
RiverTown St. Johns 4,170 4,500
Sunnyside Bay 22 216
Timber Island(8) Franklin 49 458
Topsail Walton 115 627
Wavecrest Bay 7 95
WestBay Landing Bay 1,115 685
WhiteFence Farms, Red
Hills Leon 373 35
Woodrun Bay 10 46
---------- ----------
Subtotal 14,102 13,045
---------- ----------
Total 27,998 31,944
========== ==========
Units
Units Under
Closed Contract Total
Since as of Units
Project County Inception 9/30/05 Remaining
---------------------- -------------- ---------- ---------- ----------
In Development:(3)
----------------------
Artisan Park(4) Osceola 176 279 161
Bridgeport Gulf 31 5 1
Cutter Ridge Franklin -- -- 25
Landings at Wetappo Gulf -- -- 16
Palmetto Trace Bay 323 70 88
Paseos(4) Palm Beach 228 95 2
RiverCamps on Crooked
Creek Bay 169 -- 239
Rivercrest(4) Hillsborough 911 464 7
RiverSide at Chipola Calhoun 2 1 7
SouthWood(5) Leon 1,401 129 3,240
St. Johns Golf &
Country Club St. Johns 695 45 59
The Hammocks Bay 395 53 9
SummerCamp Franklin 48 -- 451
Victoria Park Volusia 759 183 3,258
Walton Corners Leon -- 32 --
WaterColor Walton 854 9 277
WaterSound Beach Walton 391 10 110
WaterSound West Beach Walton 6 2 191
WaterSound Walton -- -- 1,330
WindMark Beach Gulf 104 -- 1,558
---------- ---------- ----------
Subtotal 6,493 1,377 11,029
---------- ---------- ----------
In Pre-Development:(3)
----------------------
Bayview Estates Gulf -- -- 52
Boggy Creek Bay -- -- 1,260
Camp Creek Golf
Cottages Walton -- -- 50
East Lake Powell Bay -- -- 360
Glades Bay 240 120 --
Hammocks at St. Joseph
Bay Gulf -- -- 18
Hawks Landing Bay -- 83 84
Hills Road Bay -- -- 356
Long Avenue Gulf -- -- 52
ParkPlace (Osprey
Landing) Bay -- -- 250
Perico Island(6) Manatee -- -- 686
Pier Park Timeshare Bay -- -- 125
Port St. Joe Millsite
Area(7) Gulf -- -- 598
Powell Adams Bay -- -- 1,425
RiverCamps on Sandy
Creek Bay -- -- 624
RiverTown St. Johns -- -- 4,500
Sunnyside Bay 216 -- --
Timber Island(8) Franklin -- -- 458
Topsail Walton -- -- 627
Wavecrest Bay -- -- 95
WestBay Landing Bay -- -- 685
WhiteFence Farms, Red
Hills Leon -- -- 35
Woodrun Bay 46 -- --
---------- ---------- ----------
Subtotal 502 203 12,340
---------- ---------- ----------
Total 6,995 1,580(9) 23,369
========== ========== ==========
(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
to be constructed at full build-out may be lower than the number
entitled or currently expected.
(3) 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.
(4) Artisan Park is 74 percent owned by JOE. Paseos and Rivercrest are
each 50 percent owned by JOE.
(5) Includes 480 entitled multifamily units that were sold to third
party developers.
(6) JOE has an option to purchase the land for this project.
(7) A 126-acre parcel within this project is owned by a joint venture
of which JOE is a 50 percent owner and managing partner.
(8) Timber Island entitlements include 58 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.
(9) 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 September
30, 2005, the Mid-Atlantic region had 284 housing units under
contract.
Table 3 summarizes JOE's Florida residential projects in the entitlements process as of September 30th.
Table 3
Proposed JOE Residential Projects
In the Land-Use Entitlement Process in Florida (1)
September 30, 2005
Estimated
Project Project
Project County Acres Units(2)
--------------------------------- -------------- ---------- ----------
Bonfire Beach Bay 524 1,048
Carrabelle East Franklin 200 600
College Station Bay 567 1,325
Songbird Wakulla 9 90
St. James Island McIntyre Franklin 1,704 340
St. James Island RiverCamps Franklin 2,500 500
St. James Island Granite Point Franklin 1,000 2,000
WestBay DSAP Future Phases (3) Bay 4,836 5,157
Wetappo Creek Gulf 10 39
---------- ----------
Total 11,350 11,099
========== ==========
(1) All projects listed have significant entitlement steps remaining
that could affect timing, scale and viability. There can be no
assurance that these entitlements will ultimately be received.
(2) The actual number of units to be constructed at full build-out may
be lower than the number ultimately entitled.
(3) Any development in future phases of the West Bay DSAP is
conditioned upon the encumbrance of mitigation lands for the
proposed relocation of the Panama City-Bay County International
Airport.
WESTBAY
Panama City - Bay County International Airport Relocation
On September 29, 2005, the Panama City Bay County Airport and Industrial District (Airport Authority) voted to
enter into a land donation agreement with JOE for approximately 14,000 acres in northwestern Bay County for a proposed
new airport site and an associated environmental mitigation area. Upon meeting the agreement's specified conditions,
JOE has committed to donate a 4,000-acre airport relocation site and a conservation easement for 9,858 acres to
be a part of the WestBay Preservation Area.
If for any reason the new airport is not built or not placed into service within specified time periods, the land
for the airport and the conservation area would revert to JOE. The agreement is subject to the approval of the
Federal Aviation Administration (FAA).
The conservation easement for the airport represents the beginning of an unprecedented effort designed to protect
nearly the entire shoreline of West Bay.
"We are pleased with the progress being made on the proposed relocation of the Panama City - Bay County International
Airport to WestBay," said Rummell. The Airport Authority recently indicated that the FAA plans to release
its final Environmental Impact Statement (EIS) later this year and to issue its Record of Decision (ROD) early
next year.
"The Airport Authority has also started a process to sell the land at the current airport location,"
said Rummell. "We consider that a significant positive step."
A number of additional steps remain before construction of the airport can begin, including approval of 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.
SEGMENT RESULTS
ST. JOE TOWNS & RESORTS
Pretax income from continuing operations for St. Joe Towns & Resorts, JOE's residential and resort development
segment, was $25.6 million for the third quarter this year, compared with $31.8 million in the third quarter last
year, in each case excluding income from unconsolidated affiliates.
In the third quarter, St. Joe Towns & Resorts closed on the sales of 616 units and generated revenues from
housing and home sites of $156.1 million, compared to 471 units and $153.5 million in revenue in the third quarter
of 2004. JOE accepted contracts for 492 units in the third quarter of 2005, compared to 550 units in the third
quarter a year ago.
Overall, gross profit margins have decreased in the third quarter of 2005, compared with the third quarter of 2004,
as sales in higher margin resort communities have decreased while sales in lower margin primary home communities
have increased. In addition, the majority of profit on multifamily closings occurring this quarter was recognized
in previous quarters due to percentage of completion accounting.
Tables 4 and 5 summarize sales activity for St. Joe Towns & Resorts for the third quarters of 2005 and 2004.
Table 4
St. Joe Towns & Resorts
Sales Activity
For the Three Months
Ended September 30,
($ in millions)
2005
-------------------------------------------
Number of
Units Cost of Gross
Closed Revenue Sales(1) Profit
-------------------------------------------
Home Sites(2) 113 $ 21.2 $ 5.5 $ 15.7
Homes(3) 503 134.9 111.8 23.1
---------- ---------- ---------- ----------
Total 616 $ 156.1 $ 117.3 $ 38.8
========== ========== ========== ==========
2004
-------------------------------------------
Number of
Units Cost of Gross
Closed Revenue Sales(1) Profit
-------------------------------------------
Home Sites(2) 95 $ 25.6 $ 7.0 $ 18.6
Homes (3) 376 127.9 103.2 24.7
---------- ---------- ---------- ----------
Total 471 $ 153.5 $ 110.2 $ 43.3
========== ========== ========== ==========
(1) Cost of sales for home sites in the third quarter of 2005
consisted of $8.4 million in direct costs, $1.3 million in selling
costs and $1.1 million in indirect costs. Cost of sales for home
sites in the third quarter of 2004 consisted of $5.1 million in
direct costs, $1.2 million in selling costs and $0.7 million in
indirect costs. Cost of sales for homes in the third quarter of
2005 consisted of $94.8 million in direct costs, $7.0 million in
selling costs and $10.0 million in indirect costs. Cost of sales
for homes in the third quarter of 2004 consisted of $86.8 million
in direct costs, $7.1 million in selling costs and $9.3 million in
indirect costs.
(2) Percentage of completion accounting is utilized at SummerCamp and
WaterSound West Beach. As a consequence, revenue recognition and
closings may occur in different periods.
(3) Homes include single family, multifamily and Private Resident Club
(PRC) units. Multifamily and PRC revenue is recognized, if
preconditions are met, on a percentage-of-completion basis. As a
consequence, revenue recognition and closings may occur in
different periods. Paseos and Rivercrest, two joint ventures 50
percent owned by JOE, are not included. Sales are complete or
nearly complete at both communities.
Table 5
St. Joe Towns & Resorts
Units Placed Under Contract
For the Three Months
Ended September 30,
Percentage
2005 2004 Change
---------- ---------- ----------
Home Sites 105 87 20.7 %
Homes(1) 387 458 (15.5)
---------- ---------- ----------
Total(2) 492 545 (9.7) %
========== ========== ==========
(1) Homes include single family homes, multifamily and PRC units. Some
home sites are offered for sale with a home to be constructed by
JOE.
(2) Paseos and Rivercrest, two joint ventures, are not included.
Paseos and Rivercrest had only 1 unit placed under contract during
the third quarter of 2005, compared to 240 units at the end of the
third quarter of 2004. Sales are complete or nearly complete at
both communities.
Table 6 summarizes backlog at September 30, 2005 and 2004.
Table 6
St. Joe Towns & Resorts
Backlog (1)
($ in millions)
September 30, 2005 September 30, 2004
---------- ---------- ---------- ----------
Units Revenues Units Revenues
---------- ---------- ---------- ----------
Home Sites 23 $ 4.6 20 $ 1.8
Homes(2) 1,041 351.9 1,104 369.5
---------- ---------- ---------- ----------
Total 1,064 $ 356.5 1,124 $ 371.3
========== ========== ========== ==========
(1) Backlog represents units under contract but not yet closed. Paseos
and Rivercrest, two joint ventures 50 percent owned by JOE, are
not included. Backlog at Paseos and Rivercrest totaled $142.8
million for 559 units at the end of the third quarter of 2005,
compared to $192.0 million for 654 units at the end of the third
quarter of 2004.
(2) For multifamily and PRC units which are recognized on a percentage
of completion method, revenues in this table reflect 100% of the
revenue to be generated from each unit and will differ from
revenues recorded in the financial statements. As of September 30,
2005, 202 units are in the homes backlog with related revenues of
$88.5 million (as of that date, $53.3 million had been recognized
in the financial statements); as of September 30, 2004, 228 units
are in the homes backlog with related revenues of $123.5 million
(as of that date, $52.7 million had been recognized in the
financial statements).
Northwest Florida
WaterColor
During the third quarter, contracts for 5 home sites in WaterColor were accepted and closed at an average price
of $806,400. The sale of one home was closed in the third quarter at a price of $783,000. At the end of the third
quarter, 23 released home sites remained unsold.
WaterColor is a 1,140-unit premier beachfront resort community on 499 acres on the Gulf of Mexico in Walton County.
WaterSound Beach
Contracts for 39 multifamily units at Compass Point in WaterSound Beach were closed in the third quarter at an
average price of $1.5 million. An additional 9 multifamily units are under contract and expected to close in the
fourth quarter at an average price of $1.5 million. The remaining 43 units in Compass Point are scheduled to be
released for sale in 2006. Construction of 22 of those units is expected to begin in the fourth quarter, while
construction of the last 21 units is expected to start in early 2006.
In the third quarter, contracts for 4 home sites were accepted and closed at an average price of $1.4 million.
At the end of the third quarter, there were 6 single family homes and 8 home sites released that remained unsold.
WaterSound Beach is set on over a mile of white sand beach on the Gulf of Mexico in Walton County, five miles east
of WaterColor.
WaterSound West Beach
During the third quarter, contracts were accepted for 8 home sites released in WaterSound West Beach, of which
6 were closed at an average price of $707,000. There are 18 home sites currently in inventory.
WaterSound West Beach is a high-end resort community with 199 single family home sites on the beach side of County
Road 30A adjacent to Deer Lake State Park.
WaterSound
On September 28th, the U.S. Army Corps of Engineers issued a dredge and fill permit for WaterSound, a resort community
approximately three miles from WaterSound Beach, less than two miles from the Gulf of Mexico and north of U.S.
98 in Walton County.
Construction is proceeding on this 1,330-unit mixed-use development on approximately 1,402 acres. WaterSound is
being planned for the pre-retirement and second-home markets with six and nine-hole golf courses along with pools,
beach access and other amenities. Sales at WaterSound are expected to begin in mid-2006.
Camp Creek Golf Club at WaterSound
JOE has announced it plans to restrict play next year at Camp Creek Golf Club at WaterSound to members and guests
of specified JOE communities.
"Early on, we had planned to ultimately restrict play at Camp Creek to create a competitive advantage for
designated JOE communities and resort guests," said Twomey. "We intend to implement our plan to make
this world-class golf facility exclusive to JOE communities and JOE resort guests in 2006."
Featuring a unique "dunescape" appearance, Camp Creek, designed by Tom Fazio, was recently ranked eighth
in Golfweek magazine's annual "America's Best State-by-State" survey of the roughly 700 public-access
courses in Florida.
Bay County Primary Communities
Development of community infrastructure is expected to begin in the fourth quarter at Hawks Landing in Bay County,
Florida. The community consists of 167 home sites being developed for sale to local and national homebuilders.
Eighty-four of the home sites are reserved for homebuilders based in Northwest Florida. JOE has agreed to sell
the remaining 83 home sites in the community to a national home builder, D. R. Horton.
Hawks Landing is an 88-acre primary home community in the city of Lynn Haven, a rapidly growing area of the region.
Prices for home sites in the 88- acre primary home community are initially expected to range from $50,000 to more
than $65,000.
On October 20th, JOE announced an agreement with David Weekley Homes, LLP, the nation's second largest private
home builder, to sell 55 developed home sites at an initial price of $75,000 at Palmetto Trace in Panama City Beach
for the construction of single family homes.
Located in Panama City Beach off U.S. 98, Palmetto Trace is entitled for 481 homes. JOE has contracted or sold
393 homes as of September 30, 2005. Going forward, David Weekley Homes will market and build homes with a variety
of floor plans and options.
"D.R. Horton and David Weekley Homes are two of the nation's finest home builders," said Twomey. "They
will bring new housing choices to residents of Bay County, helping to meet strong demand in this community for
primary homes across a broad range of price points. We are seeing broadening interest in Northwest Florida from
the national homebuilders. In addition to Horton and Weekley, conversations with others continue."
WindMark Beach
Construction continued in the third quarter on the next phase of WindMark Beach, consisting of 1,552 units along
more than 15,000 feet of beachfront near the town of Port St. Joe. Construction also continued on the realignment
of a 3.5-mile segment of U.S. 98 within WindMark Beach. Construction also continued during the third quarter on
a show home to be featured next year in Southern Accents magazine.
Plans for WindMark Beach provide that once U.S. 98 has been relocated away from the beach, the existing roadbed
will be rebuilt to create a 3.5-mile public beachfront trail system.
WindMark Beach is planned as a top-of-market beachfront resort destination with 1,662 units on 2,020 acres in Gulf
County. Sales are expected to begin in 2006.
SummerCamp
During September 2005, 48 of 52 non-binding reservations for home sites in the first phase of SummerCamp were converted
to contracts and closed at prices ranging from $150,000 to $725,000, for an average price of $380,000. Four of
the home sites from the first release remained in inventory at the end of the third quarter.
SummerCamp is a 499-unit development on 762 acres located approximately 45 miles south of Tallahassee on the Gulf
of Mexico.
SouthWood
Contracts were accepted at SouthWood for 30 single family homes in the third quarter of this year at an average
price of $326,500, compared to 47 homes at an average price of $267,000 in the third quarter last year.
SouthWood, located on 3,370 acres in Tallahassee, is designed for primary homes.
Northeast Florida
RiverTown
Last week, the St. Johns County Commission approved a significant zoning change for RiverTown, representing another
key step in the entitlements process. Environmental permitting and predevelopment planning continue.
RiverTown is JOE's new Southern town with more than 3.5 miles of frontage on the beautiful St. Johns River. It
is being planned for approximately 4,500 units on 4,170 acres. "The site is one of the last stretches of riverfront
in Northeast Florida suitable for large-scale residential development with a central, convenient location,"
said Rummell. "It is located within easy commuting distance to Jacksonville and the evolving commercial center
around I-95 and International Golf Parkway."
"RiverTown is well-positioned in one of Florida's fastest growing counties with one of the state's highest
per-capita incomes," said Rummell. "RiverTown is being designed as a town that will offer residents a
wide range of housing options, retail and commercial areas and amenities designed to build a sense of community.
Seven distinct neighborhoods will blend to create a complete Southern town atmosphere that embraces this scenic
river with a 58-acre riverfront public park."
After 6 years of hard work and planning, sales at RiverTown are scheduled to start in 2006 with the first closings
expected in 2007.
Central Florida
Victoria Park
At Victoria Park pricing increased during the third quarter. JOE accepted contracts for 59 homes in the third quarter
at an average price of $319,200, compared to 62 homes at an average price of $243,600 in the third quarter a year
ago.
A Southern Living Idea House at Victoria Park was featured in the magazine's August issue. More than 17,000 people
have toured the home.
Located between Orlando and Daytona Beach, Victoria Park sits on 1,859 acres in the historic college town of DeLand.
This mixed-used community is planned for approximately 4,200 residences built among parks, lakes and conservation
areas.
Artisan Park, Celebration
JOE accepted contracts for 22 single-family homes at an average price of $662,000 during the third quarter this
year, compared to 10 single-family homes at average prices of $589,300 for the third quarter of 2004.
The contracts on the first 32 condominiums were closed at Artisan Park at an average price of $293,200 during the
third quarter. JOE also accepted contracts for 13 condominiums at an average price of $524,100 during the third
quarter, compared to 54 condominiums at an average price of $340,600 in the same quarter last year.
Artisan Park is one of the last residential neighborhoods to be developed at Disney's town of Celebration near
Orlando. JOE owns 74 percent of the joint venture developing Artisan Park and manages the project.
Southwest Florida
Perico Island
Predevelopment work continued on Perico Island in Manatee County during the third quarter. Entitled for 686 condominium
residences on 352 acres, Perico Island is being designed to become a condominium community with panoramic vistas
of Tampa Bay, Anna Maria Sound, Perico Bayou and the Gulf of Mexico. The community is planned to feature a private
clubhouse designed to include a fitness center, bar and grill, screening room, swimming pool and tennis courts.
Construction and sales are expected to begin next year.
JOE has purchased two parcels of land adjacent to the Perico Island site. The seven acres include the closed Leverock's
restaurant, as well as the former Perico Harbor Marina, a service station, and a convenience store. The additional
land will allow a significant upgrade of the existing street frontage, create an aesthetically pleasing community
entrance and provide future residents with marina access and other amenities.
North and South Carolina
Saussy Burbank, JOE's homebuilder based in Charlotte, N.C., accepted contracts for 221 homes during the third quarter
this year, compared to 159 contracts in the third quarter of 2004. "We have seen a broad strengthening across
our Carolina markets," said Twomey. "Saussy has accomplished a remarkable turnaround, repositioning itself
in the Carolina markets as one of the strongest regional homebuilders."
Table 7 summarizes the sales activity at various residential communities for the third quarters of 2005 and 2004.
Table 7
St. Joe Towns & Resorts
Sales Activity
For the Three Months Ended September 30,
($ in thousands)
2005
-------------------------------------------
Contracts
Units Accepted
Closed Avg. Price (1) Avg. Price
---------- ---------- ---------- ----------
WaterColor
Home Sites 5 $ 851.4 6 $ 806.4
Single/Multifamily Homes 1 783.0 0 N/A
PRC Shares 0 N/A 0 N/A
WaterSound Beach
Home Sites 4 1,361.7 4 1,361.7
Single Family Homes 0 N/A 0 N/A
Multifamily Homes 39 1,490.5 0 N/A
WaterSound West Beach
Home Sites 6 707.0 8 721.3
Single Family Homes 0 N/A 0 N/A
Palmetto Trace
Single Family Homes 33 251.0 18 336.5
The Hammocks
Home Sites 0 N/A 0 N/A
Single Family Homes 19 145.2 13 155.5
WindMark Beach
Home Sites 0 N/A 0 N/A
Bridgeport
Home Sites 21 29.9 21 29.9
SouthWood
Home Sites 12 141.5 8 142.8
Single Family Homes 64 248.5 30 326.5
SummerCamp
Home Sites 48 380.0 48 380.0
Single Family Homes 0 N/A 0 N/A
St. Johns G & CC
Home Sites 12 74.0 0 N/A
Single Family Homes 30 436.5 10 504.6
Hampton Park/ James
Island
Single Family Homes 2 374.6 1 399.9
Victoria Park
Home Sites 4 76.4 9 123.4
Single Family Homes 68 279.8 59 319.2
Artisan Park(2)
Home Sites 1 460.0 1 460.0
Single Family Homes 20 465.3 22 662.0
Multifamily Homes 32 293.2 13 524.1
Paseos(2)
Single Family Homes 28 454.6 0 N/A
Rivercrest(2)
Single Family Homes 136 166.9 0 N/A
Saussy Burbank
Single Family Homes 195 269.8 221 259.7
2004
-------------------------------------------
Contracts
Units Accepted
Closed Avg. Price (1) Avg. Price
---------- ---------- ---------- ----------
WaterColor
Home Sites 28 $ 687.6 21 $ 718.6
Single/Multifamily Homes 1 917.6 4 995.6
PRC Shares 0 N/A 34 220.1
WaterSound Beach
Home Sites 0 N/A 0 N/A
Single Family Homes 0 N/A 1 5,100.0
Multifamily Homes 0 N/A 25 1,405.5
WaterSound West Beach
Home Sites 0 N/A 0 N/A
Single Family Homes 0 N/A 0 N/A
Palmetto Trace
Single Family Homes 24 136.5 14 149.9
The Hammocks
Home Sites 28 38.6 28 38.6
Single Family Homes 17 142.6 8 195.7
WindMark Beach
Home Sites 1 975.0 1 975.0
Bridgeport
Home Sites 0 N/A 0 N/A
SouthWood
Home Sites 19 102.1 23 100.8
Single Family Homes 35 223.0 47 267.0
SummerCamp
Home Sites 0 N/A 0 N/A
Single Family Homes 0 N/A 0 N/A
St. Johns G & CC
Home Sites 4 118.0 0 N/A
Single Family Homes 26 346.8 31 397.3
Hampton Park/ James
Island
Single Family Homes 14 387.3 9 397.8
Victoria Park
Home Sites 11 85.4 10 65.7
Single Family Homes 42 227.6 62 243.6
Artisan Park(2)
Home Sites 4 225.0 4 225.0
Single Family Homes 9 427.8 10 589.3
Multifamily Homes 0 N/A 54 340.6
Paseos(2)
Single Family Homes 19 405.9 35 507.0
Rivercrest(2)
Single Family Homes 57 150.6 205 175.0
Saussy Burbank
Single Family Homes 208 231.9 159 232.2
(1) Contracts accepted during the quarter. Contracts accepted and
closed in the same quarter are also included as units closed.
Average prices shown reflect variations in the product mix across
time periods as well as price changes for similar product.
(2) JOE owns 74 percent of Artisan Park and 50 percent of each of
Paseos and Rivercrest. Sales from Paseos and Rivercrest are not
consolidated with the financial results of St. Joe Towns &
Resorts.
COMMERCIAL REAL ESTATE
The commercial segment consisted of St. Joe Commercial, Inc., JOE's commercial real estate development unit, and
Advantis Real Estate Services Company (Advantis), a commercial real estate services unit. On September 7th, JOE
sold Advantis to its management team.
Pretax income from continuing operations from the commercial segment was $14.2 million for the third quarter of
2005, compared with $2.8 million in the same quarter of 2004, excluding income from unconsolidated affiliates.
Pretax income from discontinued operations for the third quarter of 2005 was $14.8 million. Included were pretax
gains of $25.6 million from the sale of three office buildings and the pretax loss of $9.9 million on the sale
of Advantis. See Table of Quarterly Discontinued Operations below. Pretax income from discontinued operations in
the third quarter of 2004 was $7.5 million, primarily resulting from the sale of two office buildings.
St. Joe Commercial
"Our commercial division turned in its best quarter ever driven by gains on building sales in Washington,
DC and Florida, along with multifamily and retail land sales in Bay and Leon Counties," said Twomey. "During
the third quarter of 2005, JOE sold 11 Northwest Florida commercial land parcels for $19.2 million."
Commercial land sales averaged $145,000 per acre in 2005's third quarter, compared to $39,000 per acre in the third
quarter a year ago.
Table 8 summarizes JOE's commercial land sales in Northwest Florida for the third quarters of 2005 and 2004.
Table 8
St. Joe Commercial Northwest Florida Land Sales
Quarter Ended September 30
Gross Average
Sales Price Price/Acre
Number of Sales Acres Sold (in thousands) (in thousands)
--------------- --------------- --------------- ---------------
2005 11 132 $ 19,194 $ 145
2004 10 100 3,858 39
Northwest Florida
Retail
Simon Property Group closed on an additional 24 acres at Pier Park in Panama City Beach for $5.6 million or $236,000
per acre during the third quarter. Simon has also started construction on their planned lifestyle center at Pier
Park which will total approximately 1.0 million square feet of retail space.
"Simon has under contract or option the right to purchase an additional 100 acres near Pier Park," said
Twomey. "JOE retains approximately 13 acres in Pier Park near the beach for future JOE hotel and/or timeshare
development. In addition, JOE owns 60 acres adjacent to Pier Park with zoning for high-density residential uses."
"Interest from large national retailers in Northwest Florida, and Panama City Beach in particular, continued
to be strong in the third quarter," said Twomey. "We look forward to bringing new retail operators into
the market later this year and in 2006 at higher per-square-foot prices."
Multifamily
During the third quarter, JOE closed on 4 parcels intended for multifamily development totaling 68 acres at an
average price of $176,000 per acre. These land parcels, with residential entitlements totaling 742 units, were
sold to national and regional multifamily developers including Trammell Crow Residential, Broadstreet Partners
and EPOCH Properties.
"Multifamily housing, which includes apartments, condominiums and town homes, is critically important to the
Northwest Florida economy as new workers arrive in the marketplace," said Twomey. "These transactions
represent important new housing choices for residents in Bay and Leon Counties."
"The increasing Northwest Florida demand from national and regional multifamily developers reflects the greater
awareness of the region as a viable residential market for a broad range of product types," said Twomey. "This
demand has driven prices for multifamily parcels from $3,000 to $4,000 per residential unit three years ago to
the approximately $16,000 per-unit average pricing achieved during the third quarter."
Commerce and Business Parks
During the third quarter this year, commercial land sales within JOE's commerce and business parks totaled $0.8
million, compared to $1.3 million in the third quarter last year. JOE has 8 parks operating or under development
in 5 Northwest Florida counties.
"Strong demand and pricing continued in the third quarter at JOE's commerce parks," said Twomey. "New
jobs are being created in the region and these commerce parks are providing local and regional businesses with
parcels that can be placed into service quickly."
Nearly one third of the parcels have been sold in South Walton Commerce Park, which opened late in 2004. A contract
was closed on one parcel in the third quarter for $374,000 per acre, compared to an initial sale in the park at
$161,000. JOE is already planning the second phase of this park.
At Beach Commerce Park, demand was strong in the third quarter for office and light industrial land with average
pricing climbing to $85,000 per acre for sales closed during the quarter, compared with $69,000 per acre in the
same quarter a year ago. Two parcels were sold in the third quarter for gross proceeds of $501,000. During the
third quarter, JOE doubled the asking price of Beach Commerce Park parcels with no frontage on Highway U.S. 98
from $100,000 per acre to $200,000 per acre.
Table 9 summarizes the status of JOE's commerce and business parks in Northwest Florida as of September 30th.
Table 9
Commerce and Business Parks (1)
September 30, 2005
Acres
Net Sold/
Saleable Under Current Asking
Commerce Parks County Acres Contract Price Per Acre
------------------------ ------- --------- --------- -----------------
Airport Commerce Leon 40 -- $75,000-$260,000
Beach Commerce Bay 161 136 200,000-500,000
Beach Commerce II Bay 115 -- 150,000-225,000
Hammock Creek Commerce Gadsden 114 27 50,000-150,000
Port St. Joe Commerce Gulf 58 58 Sold Out
Port St. Joe Commerce II Gulf 40 5 65,000-135,000
South Walton Commerce Walton 39 14 335,000-600,000
--------- ---------
Subtotal 567 240
--------- ---------
Business Parks
------------------------
Beckrich Office Bay 12 8 TBD(2)
Nautilus Court Bay 11 4 523,000-610,000
SouthWood Business Leon 16 14 215,000-220,000
SouthWood Business II Leon 22 3 160,000-750,000
--------- ---------
Subtotal 61 29
--------- ---------
Total 628 269
========= =========
(1) Includes existing parks, as well as parks under development.
(2) To be determined.
Investment Property Portfolio
In the third quarter, JOE closed the sale of an 119,000 square-foot office building at 1133 20th Street, NW, in
Washington, DC, that was held in its investment property portfolio. JOE sold the property for $46.9 million, for
an approximate pretax gain of $19.7 million. Two smaller Florida office buildings were also sold during the quarter
for total proceeds of approximately $25.0 million and an approximate pretax gain of $5.9 million. The pretax gain
for the three office buildings is approximately $25.6 million.
As of September 30, 2005, JOE's portfolio of commercial office buildings (acquired through its redeployment program
of tax deferred sales proceeds from the sale of land and buildings from the investment portfolio) totaled approximately
2.5 million square feet and represented an aggregate initial investment of $338 million.
Table 10 summarizes JOE's investment property portfolio of commercial buildings as of September 30th.
Table 10
Investment Portfolio of Commercial Buildings
September 30, 2005
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 71
Tampa 3 300,000 79
Atlanta 8 1,289,000 79
Charlotte 1 158,000 100
Richmond 2 129,000 96
--------------- --------------- ---------------
Total 20 2,485,000 81 %
=============== =============== ===============
Advantis
On September 7th, JOE sold its subsidiary, Advantis, to the Advantis management team for a purchase price of $11.0
million in cash and notes, resulting in an after-tax loss of approximately $6.2 million, or $0.08 per share.
Approximately 500 Advantis employees were transferred to the operations of the new company. JOE's commercial real
estate development activity is unaffected by the transaction. JOE will continue its relationship with the new entity,
GVA Advantis, as the leasing agent and property manager for the majority of JOE's commercial real estate portfolio.
GVA Advantis also will continue to represent JOE in the marketing and disposition of certain land holdings in Northwest
Florida.
ST. JOE LAND COMPANY
St. Joe Land Company had pretax income from continuing operations of $16.6 million in the third quarter of 2005,
compared with $11.5 million in the third quarter of 2004.
"With the continued development of our New Ruralism products - RiverCamps, WhiteFence Farms and Florida Ranches
- we believe we can move additional timberland acres to a higher and better use," said Twomey. "The New
Ruralism concept continues to evolve, revealing new markets and product lines. We are continuing to work on the
development of new niche rural land products."
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
Contracts for 25 of 32 home sites at RiverCamps on Crooked Creek offered in July were accepted and closed at an
average price of $339,400, compared to $226,200 for similar product in the third quarter last year.
On October 3, 2005, JOE released 40 home sites in RiverCamps on Crooked Creek with an average price of $386,900
and a price range of $210,000 to $1.2 million. This release includes 7 home sites previously released in the second
quarter and held in inventory. Pricing for these previously-released home sites was increased slightly.
Construction has started on the RiverHouse amenity complex, the boat launch and dock facility, and construction
is completed on over 7,500 feet of nature trails and almost 1,000 feet of elevated walkways and bridges traversing
marsh grass and deepwater creeks. Construction of infrastructure for 190 home sites is expected to be completed
by year end while construction of another 43 home sites is slated for completion in April, 2006. A RiverCamps prototype
cabin is expected to be completed and furnished by year end.
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 communities of small farms. Each property is planned to have room for a large home
site plus other optional buildings, such as barns, guesthouses and stables.
JOE plans to develop WhiteFence Farms communities in multiple Northwest Florida locations over the next several
years, totaling several thousand acres. Individual farmsteads will typically range in size from 3 to 15 acres.
WhiteFence Farms are being designed to feel "old farm and equestrian," but near suburban services.
WhiteFence Farms - Red Hills
Pre-development planning started in the third quarter of this year at WhiteFence Farms - Red Hills on 373 acres
near Tallahassee. Initial pricing is expected to range from $20,000 to $45,000 per acre for a typical farm site.
Sales are expected to begin in 2006.
During the third quarter, Southern Living and The Progressive Farmer magazines selected WhiteFence Farms - Red
Hills for a 2006 Idea House and Farmstead.
Florida Ranches
Pre-development planning continued in the third quarter of 2005 on the initial Florida Ranch properties in several
locations in Northwest Florida. Florida Ranches are expected to consist of 50- to 150-acre sites located within
1,000 to 3,000-acre communities.
Initial pricing for Florida Ranch parcels is expected to range from $4,500 to $7,500 per acre. Sales are expected
to begin in 2006.
Rural Land Sales
JOE sold 6,437 acres of rural land at an average price of $2,545 per acre during the third quarter this year, compared
to 2,822 acres for an average price of $5,032 per acre in the same quarter a year ago. This variance in price-per-acre
is due to the sale of one large parcel in the third quarter of 2004 consisting of approximately 323 acres at a
purchase price of $8.7 million, or $27,000 per acre. The mix of land sold each quarter varies by location and quality.
"We continue to shift our focus away from buyers who intend to subdivide parcels for resale to those who intend
to use the land for a specific personal use," said Twomey. "We expect this strategy shift to improve
per acre pricing. Interest is high in Florida rural recreational land."
In the third quarter, JOE sold 600 acres in southwest Georgia that had been recently harvested and has little topographic
interest. The land, owned by the company for decades, sold for $1.3 million, or $2,125 per acre. "We believe
this price highlights the value of woodlands in this region," said Twomey.
"We are particularly pleased with the price we received for this land sale when you consider that earlier
this year JOE paid $1,225 per acre for approximately 47,000 acres in southwest Georgia but with a good stand of
timber, much more interesting topography and significant river frontage."
FINANCIAL DATA
($ in millions except per share amounts)
Summary Balance Sheet
September 30, September 30,
2005 2004
--------------- ---------------
Assets
Investment in real estate $ 977.7 $ 907.0
Cash and cash equivalents 220.7 95.6
Accounts receivable 79.6 81.1
Prepaid pension asset 94.4 95.2
Property, plant and equipment, net 39.8 34.8
Other assets 149.3 132.8
Assets held for sale 16.6 --
--------------- ---------------
Total assets $ 1,578.1 $ 1,346.5
=============== ===============
Liabilities and Stockholders' Equity
Debt $ 524.3 $ 400.3
Accounts payable, accrued liabilities 218.4 194.5
Deferred income taxes 305.0 254.4
Liabilities related to assets held for
sale 0.4 --
--------------- ---------------
Total liabilities 1,048.1 849.2
Minority interest 16.6 6.8
Total stockholders' equity 513.4 490.5
--------------- ---------------
Total liabilities and stockholders'
equity $ 1,578.1 $ 1,346.5
=============== ===============
Debt Schedule
September 30, September 30,
2005 2004
--------------- ---------------
Senior notes $ 407.0 $ 275.0
Revolving debt facility -- --
Acquisition and other debt 14.9 15.3
Other collateralized/specific asset
related debt 102.4 110.0
--------------- ---------------
Total debt $ 524.3 $ 400.3
=============== ===============
Consolidated Quarterly Comparisons
Quarter Ended Nine months Ended
September 30, September 30,
-------------------------------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues:
Real estate sales $ 206.5 $ 189.9 $ 593.3 $ 503.2
Timber sales 6.2 8.1 21.8 27.2
Rental revenue 10.1 8.0 30.5 22.4
Other revenues 12.7 13.7 34.9 33.3
---------- ---------- ---------- ----------
Total revenues 235.5 219.7 680.5 586.1
---------- ---------- ---------- ----------
Expenses:
Cost of real estate
sales 132.7 128.9 380.2 333.7
Cost of timber sales 4.9 5.1 15.1 16.9
Cost of rental revenue 3.6 3.2 11.6 9.3
Cost of other revenues 10.0 11.4 29.8 27.9
Other operating expenses 19.0 16.4 52.2 49.0
Corporate expense, net 12.4 10.6 36.3 29.2
Depreciation and
amortization 9.5 7.7 28.3 22.8
Impairment loss -- -- -- 2.0
---------- ---------- ---------- ----------
Total expenses 192.1 183.3 553.5 490.8
---------- ---------- ---------- ----------
Operating profit 43.4 36.4 127.0 95.3
Other income (expense) (2.5) (2.0) (6.0) (5.0)
---------- ---------- ---------- ----------
Pretax income from
continuing operations 40.9 34.4 121.0 90.3
Income tax expense (15.9) (13.8) (48.0) (36.0)
Minority interest
(expense) income (1.3) (0.4) (3.4) (0.9)
Equity in income (loss) of
unconsolidated affiliates 3.1 1.4 10.6 3.0
Discontinued operations 9.3 4.7 9.2 5.6
---------- ---------- ---------- ----------
Net income $ 36.1 $ 26.3 $ 89.4 $ 62.0
========== ========== ========== ==========
Net income per diluted
share $ 0.47 $ 0.34 $ 1.17 $ 0.81
========== ========== ========== ==========
Weighted average diluted
shares outstanding 76,089,307 76,570,836 76,432,285 76,999,375
Quarterly Revenues By Segment
Quarter Ended Nine months Ended
September 30, September 30,
---------- ---------- ---------- ----------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Towns & Resorts
Real estate sales $ 156.1 $ 153.9 $ 476.0 $ 411.2
Rental revenue 0.6 0.3 1.2 0.8
Other revenues 12.3 13.3 34.2 32.2
---------- ---------- ---------- ----------
Total Towns & Resorts $ 169.0 $ 167.5 511.4 444.2
---------- ---------- ---------- ----------
Commercial real estate
Real estate sales 26.1 21.4 51.8 40.7
Rental revenue 9.6 7.7 29.2 21.6
Other revenues 0.3 0.4 0.5 1.2
---------- ---------- ---------- ----------
Total Commercial real
estate 36.0 29.5 81.5 63.5
---------- ---------- ---------- ----------
Land Sales
Real estate sales 24.2 14.6 65.6 51.3
Other revenues 0.1 -- 0.2 --
---------- ---------- ---------- ----------
Total Land sales 24.3 14.6 65.8 51.3
---------- ---------- ---------- ----------
Forestry sales 6.2 8.1 21.8 27.1
---------- ---------- ---------- ----------
Total revenues $ 235.5 $ 219.7 $ 680.5 $ 586.1
========== ========== ========== ==========
Quarterly Segment Pretax Income
From Continuing Operations
Sept June Mar Dec
30, 30, 31, 31,
2005 2005 2005 2004
-------- -------- -------- --------
Towns & Resorts $ 25.6 $ 50.9 $ 23.1 $ 24.7
Commercial real estate 14.2 2.5 1.2 17.0
Land sales 16.6 16.0 12.0 16.3
Forestry 0.6 1.6 2.0 2.1
Corporate and other (16.1) (15.4) (13.8) (17.0)
-------- -------- -------- --------
Pretax income from
continuing operations $ 40.9 $ 55.6 $ 24.5 $ 43.1
======== ======== ======== ========
Sept June Mar Dec Sept
30, 30, 31, 31, 30,
2004 2004 2004 2003 2003
-------- -------- -------- -------- --------
Towns & Resorts $ 31.8 $ 34.4 $ 9.1 $ 13.2 $ 32.1
Commercial real estate 2.8 1.0 0.7 0.5 3.6
Land sales 11.5 10.3 18.6 32.7 14.8
Forestry 1.9 2.4 2.7 2.3 1.6
Corporate and other (13.6) (11.9) (11.5) (11.6) (11.9)
-------- -------- -------- -------- --------
Pretax income from
continuing operations $ 34.4 $ 36.2 $ 19.6 $ 37.1 $ 40.2
======== ======== ======== ======== ========
Other Income (Expense)
Quarter Ended
September 30,
---------------------
2005 2004
---------- ----------
Dividend and interest income $ 0.8 $ 0.3
Interest expense (4.3) (2.8)
Other 1.0 0.5
---------- ----------
Total $ (2.5) $ (2.0)
========== ==========
Equity in Income of Unconsolidated Affiliates
Quarter Ended
September 30,
---------------------
2005 2004
---------- ----------
Towns & Resorts $ 3.1 (1) $ 1.0
Commercial real estate -- 0.4
---------- ----------
$ 3.1 $ 1.4
========== ==========
(1) Resulted primarily from equity in two residential joint ventures
in Tampa and Jupiter, Florida.
Quarterly Discontinued Operations
Quarter Ended Nine Months Ended
September 30, September 30,
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Income (loss) from
Advantis operations, net
of tax $ (0.6) $ -- $ (0.6) $ 0.2
Income from office
buildings, net of tax 0.1 0.1 -- 0.8
Other discontinued
operations, net of tax -- (0.2) -- (0.2)
Loss on sale of Advantis,
net of tax (6.2) -- (6.2) --
Gains on sales of office
buildings, net of tax 16.0 4.8 16.0 4.8
---------- ---------- ---------- ----------
Net income from
discontinued operations $ 9.3 $ 4.7 $ 9.2 $ 5.6
========== ========== ========== ==========
Reported results are preliminary and not final until the filing of our Form 10-Q with the SEC and, therefore, remain
subject to adjustment.
Conference Call Information
JOE will host an interactive conference call to review the Company's results for the quarter ended September 30,
2005, and to discuss earnings guidance for 2005 on Tuesday, October 25, 2005, at 10:30 a.m., Eastern Daylight Time.
To participate in the call, please phone 866.719.0110 (for domestic calls from the United States) or 719.785.9444
(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 1775104. 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:
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, 2004 as well as, among others, the
following:
The foregoing list is not exhaustive and should be read in conjunction with other cautionary statements contained
in our periodic and other filings with the Securities and Exchange Commission.
Copyright 2005, The St. Joe Company. "St. Joe," "JOE," "Artisan Park," "Camp
Creek," "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
Media Contact:
Jerry M. Ray, 904-301-4430
jray@joe.com
or
Investor Contact:
Brad Slappey, 904-301-4302
bslappey@joe.com
www.joe.com
Source: The St. Joe Company