<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission file number 1-10466
St. Joe Corporation
-------------------
(Exact name of registrant as specified in its charter)
Florida 59-0432511
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 400, 1650 Prudential Drive, Jacksonville, Florida 32207
(Address of principal executive offices) (Zip Code)
(904) 396-6600
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of March 31, 1998 there were 91,697,811 shares of common stock, no par value,
outstanding.
<PAGE> 2
ST. JOE CORPORATION
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
PART I Financial Information:
Consolidated Balance Sheets -
March 31, 1998 and December 31, 1997 3
Consolidated Statements of Income and
Retained Earnings - Three months
ended March 31, 1998 and 1997 4
Consolidated Statements of Cash Flows -
Three months ended March 31, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Consolidated Financial Condition and
Results of Operations 8
PART II Other Information
Exhibits and Reports on Form 8-K 12
</TABLE>
2
<PAGE> 3
ST. JOE CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------- ------------
(Dollars in thousands)
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash & cash equivalents $ 147,941 $ 158,568
Short-term investments 48,971 51,034
Accounts receivable 67,677 58,623
Inventory 14,339 15,605
Other assets 21,555 18,562
-----------------------------
Total current assets 300,483 302,392
Investment & Other Assets:
Marketable securities 322,100 306,910
Prepaid pension asset 43,200 40,861
Other assets 48,452 37,341
-----------------------------
Total investment and other assets 413,752 385,112
Property, plant & equipment, net 868,359 859,137
-----------------------------
Total assets $1,582,594 $1,546,641
=============================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 27,066 $ 29,735
Accrued liabilities 22,100 18,777
Income tax payable 8,421 2,150
-----------------------------
Total current liabilities 57,587 50,662
Accrued casualty reserves and other liabilities 14,845 15,014
Deferred income taxes 284,681 275,695
Minority interest in consolidated subsidiaries 302,146 298,466
Stockholders' Equity:
Common stock, no par value; 180,000,000 shares
authorized; 91,697,811 issued and outstanding 13,054 13,054
Retained earnings 823,310 817,663
Accumulated comprehensive income 90,226 79,559
Restricted stock deferred compensation (3,255) (3,472)
-----------------------------
Total stockholders' equity 923,335 906,804
-----------------------------
Total liabilities and stockholders' equity $1,582,594 $1,546,641
=============================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
ST. JOE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
<TABLE>
<CAPTION>
Three Months
ended March 31,
1998 1997
(Dollars in thousands except per share amounts)
<S> <C> <C>
Net sales $ 36,323 $ 31,666
Operating revenues 59,195 56,713
-----------------------------
Total revenues 95,518 88,379
Cost of sales 26,736 28,677
Operating expenses 42,748 39,751
Selling, general and administrative expenses 13,545 9,696
-----------------------------
Operating profit 12,489 10,255
Other income
Dividends 889 798
Interest income 5,015 9,601
Interest expense (86) (91)
Gain on sales and other dispositions of property 315 74
Other, net 1,729 1,484
-----------------------------
Total other income 7,862 11,866
-----------------------------
Income before income taxes and minority interest 20,351 22,121
Income tax expense
Current 6,282 7,790
Deferred 2,822 2,484
-----------------------------
Total income tax expense 9,104 10,274
-----------------------------
Income minority interest 11,247 11,847
Minority interest 3,765 3,837
-----------------------------
Net income $ 7,481 $ 8,010
=============================
Retained earnings at beginning of period 817,663 1,125,161
Dividends (1,834) (307,188)
-----------------------------
Retained earnings at end of period 823,310 825,983
=============================
EARNINGS PER SHARE
BASIC
Net income $ 0.08 $ 0.09
=============================
DILUTED
Net income $ 0.08 $ 0.08
=============================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
ST. JOE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1998 1997
-------- ---------
(Dollars in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 7,481 $ 8,010
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 8,424 7,581
Minority interest in income 3,765 3,837
Gain on sale of property (315) (74)
Deferred income tax expense 2,822 2,686
Changes in operating assets and liabilities:
Accounts receivable (9,054) 4,021
Inventory 1,266 (5,051)
Other assets (1,754) (6,259)
Accounts payable, accrued liabilities, casualty reserves and other (164) (43)
Income taxes payable 6,270 6,759
--------------------------
Net cash provided by operating activities 18,741 21,467
Cash flows from investing activities:
Purchases of property, plant and equipment (17,668) (15,776)
Investing activities of discontinued operations -- --
Purchases of investments:
Available for sale (38,595) (6,765)
Held to maturity -- (74,513)
Investments in joint ventures and acquisitions (14,689)
Proceeds from dispositions of assets 376 1,545
Maturities and redemptions of investments:
Available for sale 43,459 5,901
Held to maturity -- 55,816
--------------------------
Net cash provided by/(used in) investing activities (27,117) (33,792)
Cash flows from financing activities:
Dividends and special distributions paid to stockholders (1,834) (307,188)
Dividends paid to minority interest (417) (415)
--------------------------
Net cash used in financing activities (2,251) (307,603)
Net increase (decrease) in cash and cash equivalents (10,627) (319,928)
Cash and cash equivalents at beginning of year 158,568 449,013
--------------------------
Cash and cash equivalents at end of year $147,941 $ 129,085
==========================
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 86 91
Income taxes $ 11 1,028
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
ST. JOE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The accompanying unaudited interim financial statements have been
prepared pursuant to the rules and regulations for reporting on Form
10-Q. Accordingly, certain information and footnotes required by
generally accepted accounting principles for complete financial
statements are not included herein. The interim statements should be
read in conjunction with the financial statements and notes thereto
included in the Company's latest Annual Report on Form 10-K. In the
opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position
as of March 31, 1998 and December 31, 1997 and the results of
operations and cash flows for the three month periods ended March 31,
1998 and 1997. The results of operations for the three month periods
ended March 31, 1998 and 1997 are not necessarily indicative of the
results that may be expected for the full year.
2. On January 22, 1998, the Company entered into a memorandum of
understanding ("the Memorandum") with the National Football League
("NFL") to build and operate NFL entertainment centers in locations
nationwide. The venture, in which the Company will own a 40% interest,
plans to operate facilities that provide interactive NFL football
entertainment experiences in club settings complemented by food
service, bar and retail sales. Under the Memorandum, the Company has
agreed to initially contribute up to $25 million to the venture, which
will seek to develop at least seven projects in various U.S. cities.
The proposed transaction is subject to the execution of a definitive
agreement and appropriate corporate approvals.
3. On February 24, 1998, the Company completed a transaction with the
Codina Group, Inc. ("Codina") and Weeks Corporation by which the
Company and Weeks, among other things, each purchased a one-third
interest in Codina, a commercial/industrial developer, active
principally in southern Florida. The Company intends to develop
commercial, industrial and office property, as well as manage Gran
Central's existing properties in southern Florida, through its interest
in Codina.
4. On February 24, 1998, the Company acquired a 33% interest in ENTROS, a
location-based entertainment company headquartered in Seattle,
Washington that creates and produces interactive games in club settings
and produces game-based programming for corporate events.
5. On April 15, 1998, the Company reached an agreement in principle to
acquire 100% of the assets of Prudential Florida Realty ("PFR") from
CMT Holdings, Ltd. PFR is the largest real estate brokerage, sales and
services company in Florida and the seventh largest in the United
States. Under the terms of the proposed agreement, the Company will buy
certain business assets of CMT Holdings, Ltd., for a total purchase
price of $90 million in cash, of which $80 million will be paid at
closing and $10 million will be deferred over a two-year period. There
is also the potential for an additional $10 million in purchase price
to be paid over three to five years if certain performance targets are
met.
6. The Company adopted the provisions of Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income", effective January
1, 1998. This Statement establishes standards for reporting and display
of comprehensive income and its components. Comprehensive income for
the three months ended March 31, 1998 and 1997 was $18.1 million and
$13.3 million, respectively. This amount differs from net income due to
changes in the net unrealized gains on marketable securities available
for sale.
6
<PAGE> 7
7. The Company and its subsidiaries are involved in litigation on a number
of matters and are subject to certain claims which arise in the normal
course of business, none of which, in the opinion of management, is
expected to have a material adverse effect on the Company's
consolidated financial position or results of operations.
The Company has retained certain self-insurance risks with respect to
losses for third party liability, property damage and group health
insurance provided to employees.
The Company is subject to costs arising out of environmental laws and
regulations, which include obligations to remove or limit the effects
on the environment of the disposal or release of certain wastes or
substances at various sites, including sites which have previously been
sold. It is the Company's policy to accrue and charge against earnings
environmental cleanup costs when it is probable that a liability has
been incurred and an amount is reasonably estimable. As assessments and
cleanups proceed, these accruals are reviewed and adjusted, if
necessary, as additional information becomes available.
The Company is currently a party to, or involved in, legal proceedings
directed at the cleanup of Superfund sites. The Company has accrued an
allocated share of the total estimated cleanup costs for these sites.
Based upon management's evaluation of the other potentially responsible
parties, the Company does not expect to incur additional amounts even
though the Company has joint and several liability. Other proceedings
involving environmental matters such as alleged discharge of oil or
waste material into water or soil are pending against the Company.
It is not possible to quantify future environmental costs because many
issues relate to actions by third parties or changes in environmental
regulation. However, based on information presently available,
management believes that the ultimate disposition of currently known
matters will not have a material effect on the financial position,
liquidity, or results of operation of the Company. As of March 31, 1998
and December 31, 1997, the aggregate environmental related accruals
were $7.3 million, respectively. Environmental liabilities are paid
over an extended period and the timing of such payments cannot be
predicted with any confidence.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
St. Joe Corporation is a diversified company engaged in the real estate,
forestry, resort development, transportation and sugar industries. During the
first quarter of 1998, the Company also entered into the location-based
entertainment business.
RECENT EVENTS
On April 15, 1998, the Company reached an agreement in principle to acquire 100%
of the assets of Prudential Florida Realty ("PFR") from CMT Holdings, Ltd. PFR
is the largest real estate brokerage, sales and services company in Florida and
the seventh largest in the United States. Under the terms of the proposed
agreement, the Company will buy certain business assets of CMT Holdings, Ltd.,
for a total purchase price of $90 million in cash, of which $80 million will be
paid at closing and $10 million will be deferred over a two-year period. There
is also the potential for an additional $10 million in purchase price to be paid
over three to five years if certain performance targets are met.
RESULTS OF OPERATIONS
Net sales include real estate property sales, timber sales and sugar sales. Net
sales increased $4.7 million, or 14.7% in 1998 from $31.7 million in 1997. Sales
of real estate totaled $ .5 million in 1998 as compared to $6.2 million in 1997
due to several property sales by GCC in 1997. Forestry sales were $10.5 million
as compared to $13.8 million in 1997 due to fewer sales to FCP resulting from
reduced supply requirements under the fiber supply agreement with FCP offset
somewhat by increased sales to other parties. Sugar sales were $25.3 million as
compared to $11.7 million in 1997 as the Company consummated substantially all
of its sugar sales for the 1997-1998 harvest season. Operating revenues includes
realty and resort revenue and transportation revenue. Operating revenues were up
in the transportation segment to $49.3 million, an increase of $1.8 million over
1997 due to increased shipments at FEC. Real estate operating revenues were $9.8
million, an increase of $.6 million compared to 1997 resulting primarily from
increased rental rates and new buildings placed in service this year.
Cost of sales decreased $1.9 million, or 6.8% in 1998 from $28.7 million in 1997
due to a decrease in real estate cost of land sales of $5.9 million, and a
decrease in forestry cost of sales of $7.8 million, partially offset by an
increase in sugar cost of sales of $11.8 million. Operating expenses increased
$3.0 million, or 7.5% as a result of an increase in transportation operating
expenses of $1.9 million and an increase in realty operating expenses of $1.1
million.
Selling, general and administrative expenses increased $3.8 million, or 40% in
1998 from 1997, attributable to a $1.8 million increase in corporate overhead
and a $1.5 million increase in the transportation segment's general and
administrative expenses offset by decreases in other segments.
Other income (expense) decreased $4.0 million, or 33.8% in 1998 compared to 1997
substantially due to lower interest income. As a result of the two special
distributions of net sales proceeds of $336.9 million in 1997, and uses of cash
for other investment purposes, average balances of invested cash were
substantially lower this year.
Income tax expense for 1998 totaled $9.1 million, representing an effective rate
of 44.7%, which is higher than the statutory rate because of the 50% excise tax
recorded on prepaid pension cost totaling $1.1 million. Income tax expense in
1997 was $10.3 million, for an effective rate of 46.4%.
Net income for the first quarter of 1998 was $7.5 million, or $.08 basic and
diluted per share, compared to $8.0 million, or $.09 basic and $.08 diluted per
share in 1997.
8
<PAGE> 9
REAL ESTATE
QUARTER ENDED MARCH 31,
($ IN MILLIONS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
1998 1997 % CHANGE
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES AND OPERATING REVENUES $10.3 $15.4 (33.1)
- ------------------------------------------------------------------------------------
COST OF SALES AND OPERATING EXPENSE 7.1 12.3 (42.3)
- ------------------------------------------------------------------------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 2.0 1.6 25.0
- ------------------------------------------------------------------------------------
OPERATING PROFIT 1.2 1.5 (20.0)
- ------------------------------------------------------------------------------------
</TABLE>
Real estate net sales and operating revenue decreased $5.1 million, or 33.1% in
the first quarter of 1998 compared to 1997. Cost of sales and operating expenses
decreased $5.2 million, or 42.3% in 1998 compared to 1997.
In the commercial/industrial division, rental revenues increased to $9.7
million, from $9.1 million in 1997, or 6.6%. The increase in rental revenue this
year can be attributed to an 8.9% increase in rental rates, a 6.7% increase in
rental revenue due to new buildings placed in service since the first quarter of
1997, offset by a 2.0% decrease from lost revenue on buildings sold in 1997.
Also impacting this quarter's revenue is the annual adjustment to 1997's
estimated rent recoverable from tenants resulting in a 6.8% decrease in total
rental revenue for the first quarter of 1998. Operating expenses in the
commercial/industrial division were $6.7 million in 1998, resulting in a 30.9%
gross margin. Operating expenses in 1997 were $6.0 million for a 34.1% gross
margin. The increase in operating expenses this year was attributable to a $.5
million increase in depreciation and $.2 million in additional property taxes
due to new buildings placed in service, and a $.4 million increase in property
management costs.
During 1998 one office/showroom/warehouse building totaling 62,780 square feet
was placed into service. There are also seven buildings under construction,
which will add an additional 887,000 square feet.
In 1998, the commercial/industrial division also had land sales and
miscellaneous real estate income of $.3 million with no related costs compared
to land sales and miscellaneous real estate income in 1997 of $5.9 million with
cost of sales of $6.1 million.
In the community/residential division, the Company recorded real estate sales
and management fees of $.3 million and operating costs of $.4 million. In 1997
the community/residential division recorded real estate sales of $.4 million and
costs of $.2 million. The increase in operating costs this year are attributable
to administrative and start-up costs on the St. Joe/Arvida venture.
Selling, general and administrative costs are up in 1998 due to additional
salaries and benefits in 1998.
FORESTRY
QUARTER ENDED MARCH 31,
($ IN MILLIONS)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
1998 1997 % CHANGE
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES $10.5 $13.8 (23.9)
- -------------------------------------------------------------------------------------
COST OF SALES 6.0 13.8 (56.5)
- -------------------------------------------------------------------------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE .8 1.0 (20.0)
- -------------------------------------------------------------------------------------
OPERATING PROFIT 3.7 (1.0) 470.0
- -------------------------------------------------------------------------------------
</TABLE>
9
<PAGE> 10
Total net sales decreased $3.3 million, or 23.9% in 1998 compared to 1997. Sales
to Florida Coast Paper Company ("FCP") made up $6.2 million (224,792 tons) of
total sales in 1998, and sales to other customers totaled $4.3 million (149,689
tons). This compares to sales in 1997 to FCP of $12.1 million (425,087 tons) and
sales to other customers totaling $1.7 million (57,187 tons). Sales to other
customers were higher this quarter than the first quarter of 1997 as the Company
experienced more lump sum bid timber sales due to increased demand. Sales prices
of timber sold to FCP were lower this year at an average price of $27/ton
compared to $28/ton in 1997. Sales prices of timber sold to other customers were
also lower this year at an average of $28/ton compared to $30/ton last year.
Cost of sales decreased $7.8 million, or 56.5% in 1998 compared to 1997. Cost of
sales as a percentage of sales was 57% in 1998 as compared to 100% in 1997 due
primarily to less timber purchased from outside sources. The Company procured
less than 12,000 tons of wood this year to fulfill the requirements of its
timber supply agreement with FCP compared to 171,000 tons last year. The cost of
sales of procured wood were approximately $30/ton in 1998 and 1997. Cost of
sales on timber grown on Company land and sold to FCP decreased by $8/ton to
approximately $20/ton as a result of lower forestry costs in 1998. During the
first quarter of 1997, the Company recorded severance of approximately $1.2
million, of which approximately $.7 million would have been included in cost of
sales last year. The cost of sales for timber sold to other customers also
decreased this year due to sales of bid timber which do not require cutting and
hauling. Costs of sales on sales to other customers was $10/ton, which was
approximately $18/ton less than last year.
General and administrative expenses were $.2 million lower than in 1997 due to
reductions in employee related costs. General and administrative costs in 1997
included $.5 million of severance payments made to terminated employees.
Included in 1998 is a nonrecurring payment of $.4 million for settlement of
property tax litigation.
TRANSPORTATION
QUARTER ENDED MARCH 31,
($ IN MILLIONS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
1998 1997 % CHANGE
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES $49.3 $47.5 3.8
- ------------------------------------------------------------------------------------
OPERATING EXPENSE 35.5 33.6 5.7
- ------------------------------------------------------------------------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 6.0 4.5 33.3
- ------------------------------------------------------------------------------------
OPERATING PROFIT 7.8 9.4 (17.0)
- ------------------------------------------------------------------------------------
</TABLE>
TOTAL FLORIDA EAST COAST RAILWAY ("FEC") transportation operating revenues were
$46.8 million in the first quarter of 1998, an increase of $2.4 million, or 5.4%
compared to the first quarter of 1997. The number of shipments increased by
approximately 3,425 shipments or 3.1% in 1998 compared to 1997. This increase
was comprised of increases in automotive shipments of 20.3%, increases in rock
shipments of 4.6%, and increases in intermodal shipments of 3.3%, offset by a
decline on all other carload shipments of 10.6%. Apalachicola Northern Railroad
Company ("ANRR") operating revenues for 1998 were $2.5 million, a decrease of
$.6 million, or 19.4% compared to 1997 due to a reduction of outbound shipments
from FCP and loss of other shipments due to flooding of the track for a week in
March.
Operating expenses for FEC in 1998 were $33.0 million, $2.0 million, or 6.5%
higher than 1997 due to a nonrecurring casualty insurance settlement totaling
$.7 million, $.6 million in increased employee related costs, $.3 million in
property taxes, and $.4 million in other transportation costs. ANRR's operating
costs were $2.5 million, consistent with 1997.
10
<PAGE> 11
Selling, general and administrative expenses were $6.0 million, or 33% higher
than last year. This increase was comprised of $.4 million in fringe benefits,
primarily related to health insurance costs, $.5 million for computer-related
services, $.3 million for casualty insurance, and $.3 million for other
administrative expenses.
SUGAR
QUARTER ENDED MARCH 31,
($ IN MILLIONS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
1998 1997 % CHANGE
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES $25.3 $11.7 116.2
- -----------------------------------------------------------------------------------
COST OF SALES 20.7 8.9 132.6
- -----------------------------------------------------------------------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 1.6 1.4 14.3
- -----------------------------------------------------------------------------------
OPERATING PROFIT 3.0 1.4 114.3
- -----------------------------------------------------------------------------------
</TABLE>
Net sales increased $13.6 million, or 116.2%, due to a 116% volume increase
(32,040 tons) resulting from accelerated deliveries to Talisman's sole customer.
Less than 3,000 tons of sugar remain to be sold for this harvest season. Sales
will begin on the 1998-1999 harvest season in the fourth quarter of this year.
Sales price per ton was slightly lower than last years at $428.30 per ton
compared to $428.97 per ton in the first quarter of 1997.
Cost of sugar sales as a percentage of sales increased in 1998 to 81.8% compared
to 76.1% in 1997. Frequent interruptions of harvesting and milling operations
caused by unseasonably rainy weather prevented the realization of any efficiency
from the increased volumes experienced, and resulted in a $25/ton higher cost.
Selling, general and administrative expenses increased $.2 million or 14.3% as a
result of a higher sugar marketing assessment, which directly relates to sugar
sold.
CORPORATE AND OTHER
Corporate selling, general and administrative expense not allocated to segments
totaled $3.0 million, an increase of $1.8 million, or 150% compared to the first
quarter of 1997. Increases in salary and benefits and professional fees of $.2
million and a decrease in prepaid pension income of $1.6 million were the
primary causes for the increases this year.
The Company's effective tax rate was 44.7% in 1998 compared to 46.4% in 1997
primarily as a result of the 50% excise tax totaling $.6 million in 1998 and
$1.4 million in 1997 on the change in prepaid pension cost.
FINANCIAL POSITION
Total cash and cash equivalents decreased $10.6 million during the quarter from
$158.6 million at December 31, 1997 to $147.9 million at March 31, 1998 as a
result of the increases in investments of Codina and Entros as well as capital
expenditures.
Capital expenditures for the three months of 1998 totaled $17.7million, of which
$11.8 million related to real estate construction and land purchases.
Stockholders' equity at March 31, 1998 was $10.07 per share, an increase of $.18
from December 31, 1997 as a result of earnings for the quarter, net of the
Company's regular dividend of $.02 per share.
11
<PAGE> 12
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.01 Restated and Amended Articles of Incorporation of the
St. Joe Company dated May 12, 1998
27.01 Financial Data Schedule (for SEC use only)
27.02 Restated Financial Data Schedule (for SEC use only)
99.01 Supplemental Calculation of Selected Consolidated
Financial Data
(b) Reports on Form 8-K
A Report on Form 8-K Item 5. "Other Events" was filed on
January 23, 1998, February 24, 1998, February 25, 1998, March
3, 1998, and April 15, 1998.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
St. Joe Corporation
Date: May 14, 1998 /s/ Peter S. Rummell
----------------- --------------------------------
Peter S. Rummell
Chief Executive Officer
Date: May 14, 1998 /s/ Charles A. Ledsinger, Jr.
----------------- --------------------------------
Charles A. Ledsinger, Jr.
Chief Operating Officer
Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)
13
<PAGE> 14
Exhibit Index
3.01 Restated and Amended Articles of Incorporation of the St. Joe
Company dated May 12, 1998
27.01 Financial Data Schedule (for SEC use only)
27.02 Restated Financial Data Schedule (for SEC use only)
99.01 Supplemental Calculation of Selected Consolidated Financial Data
14
<PAGE> 1
EXHIBIT 3.01
RESTATED AND AMENDED
ARTICLES OF INCORPORATION
OF
THE ST. JOE COMPANY
Pursuant to the provisions of Section 607.1007 of the Florida Business
Corporation Act, the undersigned corporation pursuant to a resolution duly
adopted by its Board of Directors, adopts the following restated and amended
articles of incorporation.
AMENDED
ARTICLE I
NAME
The name of the corporation ("Corporation") is The St. Joe Company.
ARTICLE II
DURATION
The duration of the Corporation is perpetual.
ARTICLE III
PRINCIPAL OFFICE
The street address of the principal office of the Corporation is 1650
Prudential Drive, Suite 400, Jacksonville, Florida 32207.
ARTICLE IV
STOCK
The maximum number of shares of stock that the Corporation is
authorized to have outstanding at any time is one hundred eighty million
(180,000,000) shares having no par value per share, all of which shall be common
voting stock of the same class. All shares of common stock issued shall be fully
paid and non-assessable. The Corporation shall have the right to issue
fractional shares.
ARTICLE V
REGISTERED OFFICE AND AGENT
The street address of the Corporation's registered office is 1650
Prudential Drive, Suite 400, Jacksonville, Florida 32207. The registered agent
for the Corporation at that address is Robert M. Rhodes.
AMENDED
ARTICLE VI
DIRECTORS
The number of Directors of the Corporation shall be not less than nine
(9) nor more than fifteen (15).
The names and addresses of the Board of Directors who, subject to the
Bylaws of the Corporation and the laws of Florida, shall hold office until the
next annual meeting of the Shareholders of the Corporation or until their
successors are elected and have been duly qualified, are:
<PAGE> 2
Name Address
Jacob C. Belin 1650 Prudential Drive, Ste. 400
Jacksonville, Florida 32207
Russell B. Newton, Jr. 1650 Prudential Drive, Ste. 400
Jacksonville, Florida 32207
John J. Quindlen 1650 Prudential Drive, Ste. 400
Jacksonville, Florida 32207
Walter L. Revell 1650 Prudential Drive, Ste. 400
Jacksonville, Florida 32207
Peter S. Rummell 1650 Prudential Drive, Ste. 400
Jacksonville, Florida 32207
Frank S. Shaw, Jr. 1650 Prudential Drive, Ste. 400
Jacksonville, Florida 32207
Winfred L. Thornton 1650 Prudential Drive, Ste. 400
Jacksonville, Florida 32207
John Uible 1650 Prudential Drive, Ste. 400
Jacksonville, Florida 32207
Carl F. Zellers 1650 Prudential Drive, Ste. 400
Jacksonville, Florida 32207
ARTICLE VII
CALL OF SPECIAL SHAREHOLDER MEETINGS
Special meetings of shareholders may be called at any time for any
purpose by the holders of thirty percent (30%) of the Corporation's issued and
outstanding shares.
ARTICLE VIII
RESTATED ARTICLES
The restated articles of incorporation primarily restate and integrate
the provisions of the Corporation's articles of incorporation as previously
amended, and also contain certain amendments, specifically designated as Amended
which were adopted pursuant to the Florida Statutes. There is no discrepancy
between the Corporation's articles of incorporation as previously amended and
the provisions of the restated articles of incorporation other than the
inclusion of certain updated information and amendments, adopted pursuant to the
Florida Statutes, changing the Corporation's name, establishing the number of
Directors, and setting the minimum percentage of shareholders necessary to call
a special meeting of shareholders.
2
<PAGE> 3
IN WITNESS WHEREOF, these Restated and Amended Articles of
Incorporation have been executed this ____ day of May, 1998.
The St. Joe Company
By: /s/ Robert M. Rhodes
----------------------------------
Robert M. Rhodes
Senior Vice President &
General Counsel
State of Florida
County of Duval
The foregoing instrument was acknowledged before me this ____ day of
May, 1998, by Robert M. Rhodes, as Senior Vice President & General Counsel of
the St. Joe Company, a Florida corporation, on behalf of the Corporation.
---------------------------------
Notary Public
3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ST JOE CORPORATION FOR THE THREE MONTHS ENDED MARCH 31,
1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 147,941
<SECURITIES> 48,971
<RECEIVABLES> 67,677
<ALLOWANCES> 0
<INVENTORY> 14,339
<CURRENT-ASSETS> 300,483
<PP&E> 1,210,496
<DEPRECIATION> (342,138)
<TOTAL-ASSETS> 1,582,594
<CURRENT-LIABILITIES> 57,587
<BONDS> 0
0
0
<COMMON> 13,054
<OTHER-SE> 910,281
<TOTAL-LIABILITY-AND-EQUITY> 1,582,594
<SALES> 36,323
<TOTAL-REVENUES> 95,518
<CGS> 26,736
<TOTAL-COSTS> 83,029
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (86)
<INCOME-PRETAX> 20,351
<INCOME-TAX> 9,104
<INCOME-CONTINUING> 7,481
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,481
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0.08
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ST JOE CORPORATION FOR THE THREE MONTHS ENDED MARCH 31,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 129,085
<SECURITIES> 66,227
<RECEIVABLES> 53,496
<ALLOWANCES> 0
<INVENTORY> 23,728
<CURRENT-ASSETS> 293,508
<PP&E> 1,167,064
<DEPRECIATION> (325,953)
<TOTAL-ASSETS> 528,310
<CURRENT-LIABILITIES> 62,696
<BONDS> 0
0
0
<COMMON> 13,054
<OTHER-SE> 890,181
<TOTAL-LIABILITY-AND-EQUITY> 1,528,310
<SALES> 19,992
<TOTAL-REVENUES> 68,387
<CGS> 13,794
<TOTAL-COSTS> 78,124
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 91
<INCOME-PRETAX> 22,121
<INCOME-TAX> 10,274
<INCOME-CONTINUING> 11,847
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,010
<EPS-PRIMARY> .09
<EPS-DILUTED> .08
</TABLE>
<PAGE> 1
EXHIBIT 99.01
St. Joe Corporation
Supplemental Calculation of Selected Consolidated Financial Data
The following table calculates EBDDT (Gross), EBDDT (Net) and EBITDA
(Gross) and EBITDA (Net) (In thousands)
<TABLE>
<CAPTION>
3/31/98 3/31/97
<S> <C> <C>
Net Income $ 7,481 $ 8,010
Plus:
Depreciation and amortization 8,424 7,581
Deferred taxes 2,822 2,484
Less:
Gain on sales of other assets (315) (74)
-------- --------
EBDDT - Gross $ 18,412 $ 18,001
-------- --------
Less minority interest % of FECI
Depreciation (3,008) (2,748)
Deferred taxes (118) 186
Gain on Sale of other assets 145 34
-------- --------
EBDDT - Net $ 15,431 $ 15,473
======== ========
Income from continuing operations
before income taxes and minority
interest $ 20,351 $ 22,121
Add back:
Depreciation and amortization 8,424 7,581
Interest expense 86 91
Less:
Gain on sales of other assets (315) (74)
-------- --------
EBITDA - Gross $ 28,545 $ 29,719
-------- --------
Less minority interest % of FECI
Income before income taxes (6,105) (6,157)
Depreciation and amortization (3,008) (2,748)
Interest expense (39) (42)
Gain on sales of other assets 88 44
-------- --------
EBITDA - Net $ 19,481 $ 20,816
======== ========
</TABLE>
