The St. Joe Company Reports Third Quarter 2013 Results

  The St. Joe Company Reports Third Quarter 2013 Results

Business Wire

WATERSOUND, Fla. -- November 7, 2013

The St. Joe Company (NYSE: JOE) today announced Net Income for the third
quarter 2013 of $4.2 million, or $0.05 per share, compared to Net Income of
$15.3 million, or $0.17 per share for the third quarter of 2012. For the nine
months ended September 30, 2013, the Company reported Net Income of $4.4
million or $0.05 per share compared to Net Income of $14.6 million or $0.16
per share for the same period last year. Income for the third quarter of 2013
did not include any significant rural land sales compared to the third quarter
of 2012, which included income of $14.7 million from rural land.

Observations regarding the Company’s major business segments in the third
quarter of 2013 compared to the third quarter of 2012 include:

  *Residential real estate revenue increased $1.0 million due to an increase
    in the number of residential lots sold in the Company’s primary home
    communities.
  *Resorts, leisure and leasing operations revenue increased $4.2 million.
    $2.1 million of that increase is related to specific sales of operating
    properties. The remaining $2.1 million increase is due to higher average
    room rates, a greater number of homes in the Company’s vacation rental
    business, and the continuing positive impact of commercial leases.
  *The volume of timber delivered was lower due to unusually high amounts of
    rain over the summer months. Forestry revenue decreased $1.9 million
    primarily due to a decrease in the tons of timber delivered offset by
    higher prices per ton.
  *Commercial real estate and rural land sales revenue were minimal in the
    three months ending September 30, 2013, as compared to a total of $22.5
    million in the third quarter of 2012.

Operating and Corporate expenses declined by $2.2 million due to reductions in
employee related costs and lower real estate carrying costs during the nine
months ending September 30, 2013, as compared to same period in 2012.

Subsequent to the quarter, the Company entered into an agreement to sell
approximately 382,834 acres of timberland for $565 million. The final price is
subject to adjustments set forth in the sales agreement. The closing is
subject to a number of conditions, including approval by the Company’s
shareholders. The land to be sold has an aggregate carrying value of
approximately $54 million at October 31, 2013. Additional information on the
sales agreement can be found in the Company’s press release dated November 7,
2013, and Form 8-K filed with the SEC on November 7, 2013.

Park Brady, St. Joe’s Chief Executive Officer, said “The sale of timberland
will help the Company concentrate on its core business activity of real estate
development in Northwest Florida. The proceeds from the sale will provide the
Company with significant liquidity and numerous opportunities to create
long-term value for our shareholders.”

FINANCIAL DATA


Consolidated Results

($ in millions except per share amounts)
                                                 
                   Quarter Ended
                  September 30,                 Nine Months Ended
                                                 September 30,
                   
                  2013          2012          2013          2012         
Revenues                                                     
Real estate sales  $ 12,823      $ 32,206      $ 27,859      $ 51,338     
Resorts, leisure
and leasing         16,309       14,143       42,384       36,658     
revenues
Timber sales        7,695        9,558        27,145       28,784     
Total revenues      36,827       55,907       97,388       116,780    
Expenses                                                     
Cost of real        6,979        14,457       15,721       25,099     
estate sales
Cost of resorts,
leisure and         12,515       11,544       33,460       31,048     
leasing revenues
Cost of timber      4,821        5,496        16,661       18,016     
sales
Other operating     2,572        3,443        8,710        11,438     
expenses
Corporate expenses  4,245        3,207        13,123       12,604     
Depreciation,
depletion and       2,312        2,400        6,972        7,185      
amortization
Total expenses      33,444       40,547       94,647       105,390    
Operating income    3,383        15,360       2,741        11,390     
Other income        977          350          1,866        4,260      
Income from
operations before
equity in loss
from                4,360        15,710       4,607        15,650     
unconsolidated
affiliates and
income taxes
Equity in loss
from                (12        )  (20        )  (39        )  (40        )
unconsolidated
affiliates
Income tax expense  158          357          158          982        
Net income          4,190        15,333       4,410        14,628     
Net loss
attributable to     8            7            20           16         
non-controlling
interest
Net income
attributable to    $ 4,198       $ 15,340      $ 4,430       $ 14,644     
the Company
Net income per
share attributable $ 0 .05       $ 0.17        $ 0.05        $ 0.16       
to the Company
Weighted average    92,284,532   92,292,053   92,285,161   92,275,790 
shares outstanding

Revenues by Segment

($ in millions)
                                                    
                                      Quarter Ended Nine Months Ended

                                      September 30, September 30,
                                     2013   2012   2013     2012
Revenues:                                                 
Real estate sales                                         
Residential                           $10.7  $9.7   $24.0    $17.7
Commercial                            --     3.6    0.4      10.3
Rural land                            --     18.9   --       23.3
Resorts, leisure and leasing          2.1    --     3.1      --
Other                                 --     --     0.4      --
Total real estate sales               12.8   32.2   27.9     51.3
Resorts, leisure and leasing revenues 16.3   14.1   42.4     36.7
Timber sales                          7.7    9.6    27.1     28.8
Total revenues                        $36.8  $55.9  $97.4    $116.8

Summary Balance Sheet

($ in millions)
                                                           
                                       September 30, 2013  December 31, 2012
Assets                                                     
Investment in real estate, net          $382.8              $370.6
Cash and cash equivalents               22.8                166.0
Investments                             146.1               --
Notes receivable, net                   7.9                 4.0
Pledged treasury securities             26.4                26.8
Prepaid pension asset                   35.3                33.4
Property and equipment, net             11.6                12.1
Deferred tax asset                      12.1                12.0
Other assets                            22.1                20.6
Total assets                            $667.1              $645.5
                                                          
Liabilities and Equity                                     
Debt                                    $37.8               $36.1
Accounts payable, accrued liabilities,  68.0                57.1
and deferred credits
Total liabilities                       105.8               $93.2
Total equity                            561.3               552.3
Total liabilities and equity            $667.1              $645.5

Debt Schedule

($ in millions)
                                                       
                                   September 30, 2013  December 31, 2012
In substance defeased debt          $26.4               $26.8
Community Development District debt 11.4                9.3
Total debt                          $37.8               $36.1

Other Operating and Corporate Expenses

($ in millions)
                                                          
                                            Quarter Ended   Nine Months Ended
                                                         
                                            September 30,   September 30,
                                           2013   2012    2013     2012
                                                                
Employee costs                              $2.9   $2.6    $8.6     $8.6
Non-cash stock compensation costs           --     --      0.3      1.1
Pension                                     0.6    0.1     1.0      0.9
Property taxes and insurance                1.5    1.7     5.3      6.0
Professional fees                           1.0    0.9     3.8      3.5
Marketing and owner association costs       0.4    0.5     1.4      1.7
Occupancy, repairs and maintenance          0.2    0.4     0.5      0.9
Other                                       0.2    0.4     0.9      1.3
Total other operating and corporate expense $6.8   $6.6    $21.8    $24.0

Additional Information and Where to Find It

Additional information with respect to the Company’s results for the third
quarter of 2013 will be available in a Form 10-Q that will be filed with the
Securities and Exchange Commission.

This document may be deemed to be solicitation material in respect of the
proposed sale by The St. Joe Company (“the Company”) of certain assets to
AgReserves, Inc. In connection with the proposed transaction, the Company will
file a preliminary proxy statement and a definitive proxy statement with the
United States Securities and Exchange Commission (“SEC”). The information
contained in the preliminary filing will not be complete and may be changed.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT WHEN IT BECOMES
AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The
definitive proxy statement will be mailed to the shareholders of the Company
seeking their approval of the proposed transaction. The Company’s shareholders
will also be able to obtain a copy of the definitive proxy statement free of
charge by directing a request to: Investor Relations, The St. Joe Company,133
South WaterSound Parkway, WaterSound, Florida 32413. In addition, the
preliminary proxy statement and definitive proxy statement will be available
free of charge at the SEC’s website, www.sec.gov.

Participants in the Solicitation

The Company and its directors and executive officers and other members of
management and employees may be deemed to be participants in the solicitation
of proxies in respect of the proposed transaction. Information regarding the
Company’s directors and executive officers is available in the Company’s proxy
statement for its 2013 annual meeting of shareholders, which was filed with
the SEC on April 4, 2013 and the Form 8-K that was filed on October 3, 2013.
These documents are available free of charge at the SEC’s website at
www.sec.gov, and by mail at: Investor Relations, The St. Joe Company,133 South
WaterSound Parkway, WaterSound, Florida 32413. Information regarding the
persons who may, under the rules of the SEC, be considered participants in the
solicitation of the Company’s shareholders in connection with the proposed
transaction will be set forth in the preliminary proxy statement when it is
filed with the SEC.

Important Notice Regarding Forward-Looking Statements

This press release includes forward-looking statements, including statements
regarding the Company’s expectations or beliefs regarding (i) the business
prospects for the Southeastern region of the United States, including demand
for ready-to-build residential lots and timber products, (ii) the value that
is embedded in the Company’s assets and (iii) the Company’s intent to explore
higher and better uses of its land bank. These forward-looking statements may
be affected by the risks and uncertainties in the Company’s business,
including those included in the Company’s Annual Report on Form 10-K filed
with the Commission on March 1, 2013. The Company wishes to caution readers
that certain important factors may have affected and could in the future
affect the Company’s actual results and could cause the Company’s actual
results for subsequent periods to differ materially from those expressed in
any forward-looking statement made by or on behalf of the Company, including
(1) economic or other conditions that affect the future prospects for the
Southeastern region of the United States and the demand for the Company’s
products, including reductions in the availability of mortgage financing or
property insurance, increases in foreclosures, interest rates, the cost of
property insurance, inflation, or unemployment rates or declines in consumer
confidence or the demand for, or the prices of, housing; (2) changes in laws,
regulations or the regulatory environment affecting the development of real
estate or forestry activities, (3) the impact of natural or man-made disasters
or weather conditions, including hurricanes and other severe weather
conditions, on the Company’s business, and (4) the Company’s ability to
effectively execute its strategy, and its ability to successfully anticipate
the impact of its strategy.

About The St. Joe Company

The St. Joe Company is a Florida-based real estate developer and manager. The
Company owns land concentrated primarily in Northwest Florida and has
significant residential and commercial land-use entitlements in hand or in
process. The Company also owns various commercial, resort and club properties.
More information about the Company can be found on its website at www.joe.com.

© 2013, The St. Joe Company. “St. Joe®”, “JOE®”, the “Taking Flight” Design®,
“St. Joe (and Taking Flight Design)®” are registered service marks of The St.
Joe Company.

Contact:

St. Joe
Investor Relations Contact:
Marek Bakun, 1-866-417-7132
Chief Financial Officer
Marek.Bakun@Joe.Com