The St. Joe Company Reports First Quarter 2014 Results

  The St. Joe Company Reports First Quarter 2014 Results

Business Wire

WATERSOUND, Fla. -- May 8, 2014

The St. Joe Company (NYSE: JOE) today announced pretax income of $509.9
million for the quarter ending March 31, 2014 as compared to pretax loss of
$(2.5) million for the quarter ending March 31, 2013. Net Income for the first
quarter 2014 was $403.0 million, or $4.37 per share compared to a Net Loss of
$(2.5) million, or $(0.03) per share for the first quarter of 2013.

During the quarter, the Company completed its previously announced sale of
approximately 380,000 acres of the Company’s non-strategic timberlands and
rural land to AgReserves, Inc., for approximately $562 million, which included
$200 million in the form of a timber note (the “AgReserves Sale”). The Company
recorded earnings of $511.1 million before income taxes for the quarter ended
March 31, 2014 as a result of this sale.

Subsequent to March 31, 2014, the Company monetized the timber note from the
AgReserves Sale and received $165 million in cash, net of $15 million in
costs, and expects to receive the remaining $20 million in 15 years upon
maturity of the timber note.

In addition, on April 2, 2014, the Company completed its previously announced
sale of the RiverTown community for (1) $24.0 million in cash, (2) $19.6
million in the form of a purchase money note, (3) the assumption, at closing,
of the Company’s Rivers Edge Community Development District obligations ($11.0
million as of the date of closing) and (4) the post-closing obligation to
purchase from the Company certain RiverTown community related impact fee
credits, which the Company estimates at $20 million to $26 million over the
five-year period as the RiverTown community is developed (most of which, the
Company expects to receive at the end of that five-year period). The Company
expects to record pretax income of approximately $26 million for the RiverTown
sale in the second quarter of 2014.

As of March31, 2014, the Company had cash, cash equivalents and investments
of $519.2 million, compared to $168.9 million as of December 31, 2013.
Subsequent to the monetization of the timber note and the closing of the
RiverTown sale, the Company had cash, cash equivalents and investments of
$710.7 million as of April 30, 2014.

First Quarter 2014 update includes:

  *Total revenue for the quarter was $594.1 million.
  *Excluding the AgReserves Sale, revenue for the first quarter of 2014 was
    $23.2 million compared to $26.8 million in the first quarter of 2013. The
    decrease was primarily related to the reduction in timber sales and a
    decline in the number of residential homesites sold in the quarter,
    partially offset by an increase in commercial real estate sales.
  *Residential Real Estate revenue decreased from $7.8 million in the first
    quarter of 2013 to $5.7 million in the first quarter of 2014 due to timing
    of homesite closings and availability of completed lots. Margins increased
    from 36.8% in the first quarter of 2013 to 50.9% in the first quarter of
    2014.
  *Commercial Real Estate revenue increased from $0.2 million in the first
    quarter of 2013 to $2.4 million in the first quarter of 2014.
  *Resorts, Leisure and Leasing Operations revenue decreased from $9.0
    million in the first quarter of 2013 to $8.2 million in the first quarter
    of 2014. The decrease was a result of harsh weather in the first quarter
    of 2014 as well as the timing of spring break and the Easter holiday as
    compared to the first quarter of 2013.
  *Timber revenue decreased from $9.7 million in the first quarter of 2013 to
    $8.1 million in the first quarter of 2014. The amount of timber harvested
    decreased due to the AgReserves Sale closing in March.

Park Brady, St. Joe’s Chief Executive Officer, said: “It was a
transformational quarter for St. Joe. The completion of the AgReserves Sale
and the subsequent sale of our RiverTown community strengthened the Company’s
balance sheet.” Mr. Brady added, “We are optimistic that the real estate
market is continuing to recover which we expect will allow us to benefit from
improving land pricing. We are well positioned to take advantage of the
recovery and other opportunities as they arise.”

FINANCIAL DATA

Consolidated Results

($ in millions except share and per share amounts)
                                                     
                                                       Quarter Ended
                                                    
                                                       March 31,
                                                     2014        2013
Revenues                                                         
Real estate sales                                     $577.8      $8.1
Resorts, leisure and leasing revenues                 8.2         9.0
Timber sales                                          8.1         9.7
Total revenues                                        594.1       26.8
Expenses                                                         
Cost of real estate sales                             62.0        5.1
Cost of resorts, leisure and leasing revenues         8.1         8.3
Cost of timber sales                                  3.9         6.0
Other operating expenses                              4.4         2.9
Corporate expenses                                    4.1         4.4
Depreciation, depletion and amortization              2.1         2.3
Total expenses                                        84.6        29.0
Operating income (loss)                               509.5       (2.2)
Other income (loss)                                   0.4         (0.3)
Income (loss) from operations before equity in loss   509.9       (2.5)
from unconsolidated affiliates and income taxes
Equity in loss from unconsolidated affiliates         --          --
Income tax expense                                    106.9       --
Net income (loss)                                     403.0       (2.5)
Net income (loss) attributable to non-controlling     --          --
interest
Net income (loss) attributable to the Company         403.0       $(2.5)
Net income (loss) per share attributable to the       $4.37       $(0.03)
Company
Weighted average shares outstanding                   92,292,913  92,284,265

Revenues by Segment

($ in millions)
                                      
                                        Quarter Ended
                                     
                                        March 31,
                                      2014    2013
Revenues:                              5.7     
Real estate sales                             
Residential                            $5.7    $7.8
Commercial                             2.4     0.2
AgReserves Sale and other              569.7   0.1
Total real estate sales                577.8   8.1
Resorts, leisure and leasing revenues  8.2     9.0
Timber sales                           8.1     9.7
Total revenues                         $594.1  $26.8

Debt Schedule

($ in millions)
                                                          
                                          March 31, 2014  December 31, 2013
In substance defeased debt                 $26.1           $26.3
Community Development District debt        6.5             11.5
Pier Park North joint venture –            16.8            6.4
construction loan
Total debt                                 $49.4           $44.2

Other Operating and Corporate Expenses

($ in millions)
                                            
                                              Quarter Ended
                                           
                                              March 31,
                                            2014    2013
                                                   
Employee costs                               $2.5    $3.2
AgReserves Sale Severance                    1.2     --
Pension                                      0.7     0.1
Property taxes and insurance                 1.7     1.9
Professional fees                            1.4     1.2
Marketing and owner association costs        0.5     0.4
Occupancy, repairs and maintenance           0.3     0.2
Other                                        0.2     0.3
Total other operating and corporate expense  $8.5    $7.3

Additional Information and Where to Find It

Additional information with respect to the Company’s results for the first
quarter of 2014 will be available in a Form 10-Q that will be filed with the
Securities and Exchange Commission.

Important Notice Regarding Forward-Looking Statements

This press release includes forward-looking statements, including statements
regarding the Company’s expectations or beliefs regarding the Company’s
business strategy, future operations, accounting treatment for the recent sale
transactions and monetization, and the Company's expectations regarding the
ultimate costs and benefits of the monetization transaction. 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 February 28, 2014 and the
other subsequent reports filed by the Company with the SEC, including, when
filed, the Company’s Quarterly Report on Form 10-Q for the quarter ended March
31, 2014. 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) future regulatory or legislative actions, accounting changes or litigation
that could adversely affect the Company; (3) the impact of natural or man-made
disasters or weather conditions, including hurricanes and other severe weather
conditions, on the Company’s business; (4) the Company’s ability to identify
and successfully implement new opportunities that are accretive to
shareholders; (5) the Company’s ability to successfully estimate the impact of
certain accounting and tax matters; (6) the Company’s ability to effectively
execute its strategy, and its ability to successfully anticipate the impact of
its strategy; (7) the risk that estimated balance of the timber note may not
be paid or may result in less proceeds to the Company than expected; (8) the
risk that the estimated impact fee credits contingent purchase price expected
from purchases of impact fee credits by the purchaser of the RiverTown
community may not be realized, may take longer to realize than expected, or
may result in less proceeds to the Company than expected.

About The St. Joe Company

The St. Joe Company is a Florida-based real estate development and operating
company. 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.

© 2014, 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:

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