<PAGE> 1
EXHIBIT 99.1
The St. Joe Company
Pro Forma Consolidated Financial Statements
The following unaudited pro forma consolidated balance sheet is based upon the
historical consolidated balance sheet of the Company as of June 30, 2000 as if
the Company had completed the spin-off of Florida East Coast Industries,
("FLA") as of that date. The following unaudited pro forma consolidated
statements of income of the Company are based upon the historical consolidated
statements of income for the six-month period ended June 30, 2000 and the year
ended December 31, 1999. These statements are presented as if the Company had
effected the spin-off as of January 1, 1999. These unaudited pro forma
consolidated financial statements should be read in conjunction with the
Company's annual report filed on Form 10-K for the year ended December 31,
1999, and Form 10-Q for the period ended June 30, 2000.
The unaudited pro forma consolidated financial statements are not necessarily
indicative of what the actual financial position or results of operations of
the Company would have been at June 30, 2000 or December 31, 1999 assuming the
transaction had been completed as set forth above, nor does it purport to
represent the financial position or results of the Company in the future
periods.
<PAGE> 2
THE ST. JOE COMPANY
Pro Forma Consolidated Balance Sheet
June 30, 2000
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Spin-off of Other
Historical FLA(a) Adjustments Pro Forma
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 80,699 (12,460) (2,677)(b),(c) 65,562
Short-term investments 89,862 (55,299) - 34,563
Accounts receivable 45,262 (26,922) - 18,340
Inventory 5,258 (4,651) - 607
Other assets 10,373 (5,433) 1,000 5,940
---------- -------- ------ --------
Total current assets 231,454 (104,765) (1,677) 125,012
Investments and other assets:
Marketable securities 118,375 (951) - 117,424
Investment in unconsolidated affiliates 83,431 (15,392) - 68,039
Prepaid pension asset 68,271 - - 68,271
Goodwill 137,623 - - 137,623
Other assets 27,343 (16,149) - 11,194
---------- -------- ------ --------
Total investment and other assets 435,043 (32,492) - 402,551
Investment in real estate 822,499 (417,066) - 405,433
Property, plant & equipment, net 449,969 (402,417) - 47,552
---------- -------- ------ --------
Total assets $1,938,965 (956,740) (1,677) 980,548
========== ======== ====== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 50,142 (18,998) - 31,144
Accrued liabilities 77,567 (45,969) - 31,598
Income tax payable (receivable) 4,553 (5,379) 1,668(b) 842
Current portion of long-term debt 43,084 - - 43,084
---------- -------- ------ --------
Total current liabilities 175,346 (70,346) 1,668 106,668
Reserves and other liabilities 20,460 (12,671) - 7,789
Deferred income taxes 274,979 (134,031) (9,608) 131,340
Long-term debt 209,707 - - 209,707
Minority interest in consolidated subsidiaries 343,932 (341,326) - 2,606
---------- -------- ------ --------
Total liabilities 1,024,424 (558,374) (7,940) 458,110
Stockholders' Equity:
Common stock, no par value; 180,000,000 shares
authorized; 91,697,811 issued and outstanding 13,131 - - 13,131
Accumulated other comprehensive income 70,314 - - 70,314
Retained earnings 992,623 (398,366) 6,263(b),(c),(d) 600,520
Restricted stock deferred compensation (2,910) - - (2,910)
Treasury stock, 6,715,339 shares, at cost (158,617) - - (158,617)
---------- -------- ------ --------
Total stockholders' equity 914,541 (398,366) 6,263 522,438
---------- -------- ------ --------
Total liabilities and stockholders' equity $1,938,965 (956,740) (1,677) 980,548
========== ======== ====== ========
</TABLE>
See accompanying notes to pro forma consolidated balance sheet.
<PAGE> 3
The St. Joe Company
Notes to Pro Forma Consolidated Balance Sheet
June 30, 2000
(Unaudited)
(In thousands)
(a) Effective October 9, 2000, the Company completed its tax-free pro-rata
spin-off of its 54% equity interest in Florida East Coast Industries, Inc.
("FLA") to the Company's shareholders. The June 30, 2000 historical balance
sheet included FLA on a consolidated basis. This pro forma adjustment
represents the deconsolidation and dividend distribution of the Company's
54% equity interest in FLA. The adjustment also includes the add-back of
intercompany transactions between the Company and FLA, which were formerly
eliminated in consolidation. The intercompany transactions primarily relate
to management and development fees paid to the Company by FLA, of which
$2,280 was capitalized to investment in real estate and other assets owned
by FLA and $2,280 was recorded as an increase in retained earnings of the
Company.
(b) In contemplating the spin-off, the Company and FLA entered into an Amended
and Restated Master Agreement, which provides for several property
management and development service agreements between the two companies. In
consideration of FLA's execution of the Amended and Restated Master
Agreement, the Company will pay to FLA the sum of $6,000 in three annual
installments, the first installment being due on the effective date of the
spin-off. Each annual installment will be amortized to expense over the
one-year period following the date of payment. The first installment of
$2,000 has been included as a reduction of cash, $1,000 of which has been
prepaid and $615 of which reduces the Company's retained earnings, net of a
corresponding tax benefit of $385. In addition, in consideration of the
abandonment by the Company of its entitlement to become a 50% joint venture
partner in certain properties previously agreed to between the Company and
FLA, FLA will pay to the Company the sum of $5,323 on the effective date of
the spin-off. Such amount is presented as an increase in cash and retained
earnings of the Company, net of a corresponding tax expense of $2,053.
(c) The estimated costs related to the spin-off transaction total approximately
$6,000 and include investment banker's, legal and tax advisory fees. This
amount is presented as a decrease in cash and retained earnings of the
Company. There is no corresponding tax effect as the items are not tax
deductible.
(d) The Company has recorded a deferred tax liability of $9,608 related to
undistributed earnings from FLA during the Company's period of ownership.
This deferred tax liability is reversed through operations as of the
effective date of the spin-off.
<PAGE> 4
THE ST. JOE COMPANY
Pro Forma Consolidated Statement of Income
Six Months Ended June 30, 2000
(Unaudited)
(in thousands, except for per share data)
<TABLE>
<CAPTION>
Spin-off of Other
Historical FLA (a) Adjustments Pro Forma
------------------------------------------ ----------
<S> <C> <C> <C> <C>
Operating revenues $ 433,044 (129,362) -- 303,682
Expense:
Operating expenses 324,177 (87,866) 1,000(b) 237,311
Corporate expense, net 11,678 -- -- 11,678
Depreciation and amortization 28,436 (18,238) -- 10,198
------------------------------------------ ----------
Total expenses 364,291 (106,104) 1,000 259,187
------------------------------------------ ----------
Operating profit 68,753 (23,258) (1,000) 44,495
------------------------------------------ ----------
Other income (expense):
Investment income 8,137 (4,435) -- 3,702
Interest expense (4,941) 1,087 -- (3,854)
Other, net 3,341 (769) -- 2,572
------------------------------------------ ----------
Total other income 6,537 (4,117) -- 2,420
------------------------------------------ ----------
Income before income taxes
and minority interest 75,290 (27,375) (1,000) 46,915
Income tax expense 29,376 (9,673) (1,056)(b)(c) 18,647
Minority interest 8,328 (8,216) -- 112
------------------------------------------ ----------
Net income $ 37,586 (9,486) 56 28,156
========================================== ==========
EARNINGS PER SHARE
Basic: 0.44 0.33
Diluted: 0.43 0.32
Weighted average shares outstanding
Basic: 85,167 85,167
Diluted: 86,730 86,730
</TABLE>
See accompanying notes to pro forma consolidated statement of income.
<PAGE> 5
THE ST. JOE COMPANY
Pro Forma Consolidated Statement of Income
Year Ended December 31, 1999
(Unaudited)
(In thousands, except for per share data)
<TABLE>
<CAPTION>
Spin-off of Other
Historical FLA(a) Adjustments Pro Forma
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Operating revenues $ 750,412 (321,358) -- 429,054
Expenses:
Operating expenses 589,588 (229,269) 2,000(b) 362,319
Corporate expense 16,361 -- -- 16,361
Depreciation and amortization 49,368 (32,867) -- 16,501
Impairment losses 7,162 -- -- 7,162
---------- ---------- ----------- ---------
Total expenses 662,479 (262,136) 2,000 402,343
---------- ---------- ----------- ---------
Operating profit 87,933 (59,222) (2,000) 26,711
---------- ---------- ----------- ---------
Other income:
Investment income 13,006 (5,901) -- 7,105
Gains on sales and 15,360 -- -- 15,360
Other, net 4,544 (680) -- 3,864
---------- ---------- ----------- ---------
Total other income 32,910 (6,581) -- 26,329
---------- ---------- ----------- ---------
Income from continuing
operations before income
taxes and minority
interest 120,843 (65,803) (2,000) 53,040
---------- ---------- ----------- ---------
Income tax expense 23,961 (25,231) (2,320)(b),(c) (3,590)
Minority interest 19,243 (18,742) -- 501
---------- ---------- ----------- ---------
Income from continued operations 77,639 (21,830) 320 56,129
---------- ---------- ----------- ---------
Income from discontinued
operations:
Earnings from discontinued 5,364 -- -- 5,364
Gain on sale of discontinued 41,354 -- -- 41,354
---------- ---------- ----------- ---------
Net income $ 124,357 (21,830) 320 102,847
========== ========== =========== =========
EARNINGS PER SHARE
Basic:
Income from continued $ 0.89 $ 0.64
Earnings from discontinued 0.06 0.06
Gain on sale of discontinued 0.47 0.47
---------- ---------
Net income $ 1.42 $ 1.17
========== =========
Diluted:
Income from continued $ 0.88 $ 0.63
Earnings from discontinued 0.06 0.06
Gain on sale of discontinued 0.46 0.46
---------- ---------
Net income $ 1.40 $ 1.15
========== =========
Weighted average shares outstanding
Basic: 87,691 87,691
Diluted: 88,553 88,553
</TABLE>
See accompanying notes to pro forma consolidated statement of income.
<PAGE> 6
The St. Joe Company
Notes to Pro Forma Consolidated Statements of Income
For the Six Month Period Ended June 30, 2000
and the Year Ended December 31, 1999
(Unaudited)
(In thousands)
(a) This pro forma adjustment represents the deconsolidation of the revenues
and expenses, including minority interest and income tax expense,
attributable to FLA for the related period. These amounts are removed from
the Company's historical balances to reflect the spin-off as if it occurred
on January 1, 1999. The adjustment also includes the add-back of
intercompany transactions between the Company and FLA, which were formerly
eliminated in consolidation. The intercompany transactions primarily relate
to asset management fees and management fees expenses between the Company
and FLA. The resulting additions to operating revenues for the six months
ended June 30, 2000 and the year ended December 31, 1999 totaled $1,482 and
$3,374, respectively. The resulting additions to operating expenses for the
six months ended June 30, 2000 and the year ended December 31, 1999 totaled
$1,309 and $3,164, respectively.
(b) As previously discussed in note (b) of the Notes to Pro Forma Consolidated
Balance Sheet, in consideration of FLA's execution of the Amended and
Restated Master Agreement, the Company will pay to FLA the sum of $6,000 in
three annual installments, with each installment to be amortized to
management fee expense over the subsequent one-year period. Included in the
six months and year ended pro forma statements of income, are management
fee expenses of $1,000 and $2,000 and related tax benefits of $386 and
$772, respectively, related to the amortization of such payments.
(c) This adjustment represents the reversal of deferred tax expense previously
recorded for the undistributed earnings of FLA, which totaled $670 and
$1,548, respectively, during the six months ended June 30, 2000 and the
year ended December 31, 1999.
