Annual Report (Form 10-K), fiscal year 1994

ITEM 1. BUSINESS
As used throughout this Form 10-K Annual Report, the terms "St. Joe", "Company" and "Registrant" means St. Joe Paper Company and its consolidated subsidiaries unless the context indicates otherwise.
GENERAL
St. Joe was incorporated in 1936 under the laws of the State of Florida. The general purposes of the Company at incorporation were (1) to manufacture, buy, sell, import, export and deal in pulpwood, woodpulp, paper, paperboard, all raw material thereof, and products and by-products therefrom and to establish, operate and maintain mills, plants and factories for such purpose and (2) to buy, hold, own, work, develop, improve, divide or sub- divide, sell, convey, lease, mortgage, pledge, exchange and otherwise deal in and dispose of all kinds of real and personal property.
The Executive Offices of St. Joe are located in Suite 400, duPont Center, 1650 Prudential Drive, Jacksonville, Florida, 32207, and its telephone number is 904/396-6600.
St. Joe is at present primarily engaged in two industry segments: (1) the growing and harvesting of timber, and the manufacturing, distribution and sale of forest products and (2) transportation of goods by rail. The Registrant also is engaged in three other industry segments in which it derives income: (1) growing and processing of sugarcane into raw sugar, (2) telephone communications and (3) real estate. Other income was derived from Company investments in securities, gains on disposition of property and other miscellaneous items.
Financial information as to revenue, operating profits and identifiable assets by industry segment is set forth in footnote 11 to the Consolidated Financial Statements on pages 28 and 29 of the 1994 Annual Report to Stockholders of this Report. Below is a description of each of these industry segments with information to the extent necessary and material in order that the Company's business taken as a whole can be understood.
Forest Products
The Company is a vertically integrated producer of corrugated containers. It owns approximately 700,000 acres of timberland (most of which is located in northwestern Florida), a paper mill located in Port St. Joe, Florida, and 16 container plants located throughout the eastern half of the United States. The Company's timberland and forestry operations supply wood chips and pulpwood to the mill, which produces linerboard, some of which is bartered for corrugating medium. The container plants convert the linerboard and corrugating medium into corrugated containers. The Company produces and sells a wide variety of corrugated containers to processors and manufacturers in the food, agricultural, paper, petrochemical, plastics, electronics,
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electrical equipment and machinery industries. Demand for corrugated containers is cyclical and correlates closely with real growth in the United States gross national product and also with population and other demographic factors.
The corrugated container industry is highly competitive, with over 1,500 container plants in the United States. When demand for corrugated containers falls, the ability to maintain prices by adjusting inventory levels is limited because container plants and paper mills operate most economically at or near full capacity. In addition, although corrugated containers are the dominant form of transport packaging nationally, corrugated containers compete with various other packaging materials, including paper, plastic, wood and metal.
The Company's operating strategy for its Forest Products sector has been to reduce unit production costs by increasing operating efficiency and maximizing capacity utilization. In addition, the Company emphasizes the marketing and production of higher margin products such as the Company's mottled white linerboard and high performance linerboard, over unbleached linerboard.
The Company's paper mill, located at Port St. Joe, Florida, produces mottled white and unbleached linerboard, a principal component of corrugated containers. The mill can produce linerboard in a full range of grades and weights. Set forth below is certain information as to mill linerboard production for the years indicated:
Linerboard Production (In tons)
Total Average Daily Year Production Production*
1994 477,990 1,375 1993 444,005 1,254 1992 425,087 1,266 1991 433,352 1,308 1990 454,342 1,327
*Average daily production is computed by dividing the total production of each paper machine by the number of days on which such paper machine operates each year.
In 1993 and 1994, approximately 45% and 52%, respectively, of mill production in tons was mottled white linerboard marketed by the Company under the trade name "Crest White." Demand for mottled white linerboard has increased significantly in recent years. Mottled white linerboard, which is more aesthetically attractive than unbleached linerboard, in 1994 sold at approximately 39% over the price of unbleached linerboard while, in 1993,
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this upcharge was 49%. Since mottled white linerboard offers significantly higher profit margins than unbleached linerboard, the Company has emphasized, and expects to continue to emphasize, the production of mottled white over unbleached linerboard. Approximately 58% of the Company's mottled white linerboard production in 1994 was traded to other producers under trade agreements in exchange for corrugating medium or kraft liner.
The capital expenditures at the paper mill in 1993 for maintenance and upgrade were $18.5 million which compares to $20.3 million for the 1994 capital and maintenance expenditures. The 1995 budget for maintenance and upgrade at the paper mill is $21.1 million.
The Company has sought to lower its energy costs at the mill by using increasing amounts of timber harvesting and pulp mill by-products as energy sources. The mill's boilers use "biomass" fuel (scrub wood, bark and timber wastes) and "black liquor" solids (a by-product of the wood pulping process) to meet a substantial percentage of the mill's energy requirements. In 1994 fuel oil and natural gas accounted for 35.1% of mill energy requirements. Black Liquor solids and biomass supplied most of the mill requirements.
The Company owns 16 container plants located throughout the eastern half of the United States. Linerboard and corrugating medium are the principal materials used in the manufacture of corrugated containers. The container plants have an aggregate production capacity of approximately 8 billion square feet of containerboard per year. The plants in 1994 produced approximately 7.9 billion square feet of containerboard. In 1994, fourteen of the container plants operated on two shifts, one on one shift and one on three shifts. The Company could increase capacity by running the one plant that is on one shift, two additional shifts, as well as adding a third shift to the fourteen plants presently on two shifts. The Company's paper mill production resulted in supplying of approximately 78% of the container plants' requirements for linerboard and corrugating medium for 1994 which was down from the 87% that was supplied in 1993.
The Company's container plants accounted for approximately 2% of the total national industry shipments during 1994 up from the approximately 1.9% in 1993. The Company's corrugated container business services approximately 2,700 customers. The single largest customer accounted for approximately 3.3% of the Company's corrugated container shipments for 1994 and the ten largest customers accounted for approximately 15.6% of the Company's 1994 corrugated container revenues.
The Company considers its container plant facilities to be in satisfactory condition. To maintain and upgrade these facilities, the Company spent $9.5 million in 1994 and has adopted a budget of $10.2 million for its 1995 capital maintenance and upgrade program. The Company maintains a laboratory facility located in Louisville, Kentucky, which tests container components, materials and workmanship to ensure quality control for container products.
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Company-owned timberlands are the principal source of woodchips and pulpwood for the paper mill. Cellulose fiber which is produced primarily from wood chips and pulpwood is the principal raw material used in the manufacture of linerboard. The Company owns approximately 700,000 acres of timberland, of which approximately 665,000 acres are situated in northwestern Florida and the remaining 35,000 acres are situated in southern Georgia. Presently, approximately 624,000 acres have been planted as managed plantations to facilitate harvesting and reforestation and to maximize timber yields. During the current planting season, November, 1994 through the end of February, 1995 the Company planted 18 million seedlings on 24,500 acres. The Company owns, in total, approximately 1.1 million acres of land.
Six forestry units and a wood procurement unit manage the timberlands. The timberlands are harvested by local contractors pursuant to agreements which generally are renewed annually. Timber harvested from Company timberlands accounted for 1,119,632 tons or 54% of mill wood requirements in 1994, compared to 56% in 1993. The Company has wood chipping facilities located at the paper mill, Lowry and Newport, Florida.
Recycled fiber is obtained in part from third parties and in part from mill operations. In 1994 and 1993, recycled or secondary fiber supplied approximately 17% of the mill's total fiber requirements. We expect to use approximately 22% recycled fiber in our 1995 production.
The Company operates a nursery located in Capps, Florida. The nursery conducts research to produce faster-growing, more disease-resistant species of pine trees, and produces seedlings for planting on Company-owned plantations. In addition, the Company in cooperation with the University of Florida, is doing experimental work in genetics on the development of superior pine seed orchards. In 1994 and 1993 capital expenditures in the forestry operations were approximately $5.5 million and $5.3 million, respectively. The Company has adopted a capital expenditure program for 1995 to reinvest approximately $5.5 million in these operations. These expenditures include nursery expense and tree planting.
In 1994 the mill at Port St. Joe spent $3.0 million on environmental related items. These were for asbestos removal and disposal, and repair of the recovery boiler precipitator. The Company has budgeted $5.6 million in 1995 for predominantly capitalized environmental items. The main items in 1995 will be for additional asbestos removal and disposal, and modifications to meet proposed Environmental Protection Agency Cluster Rule Regulations.
The mill at Port St. Joe is in compliance at this time in all environmental areas under the present existing laws, rules and permits. The Company's concerns at this point are with proposed new regulations for permits in the area of both air and water under the new "Cluster Rule". The "Cluster Rule" is a proposal to combine the air and water regulations into one. The U.S. Environmental Protection Agency (EPA) is also considering adding the new solid waste rule to the "Cluster Rule" umbrella. The proposed "Cluster Rule" was issued in draft form in the fall of 1993. Additional changes to the air rules will be announced in mid 1995. Compliance with the final rules as presently drafted will be required by 1998. The greatest
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concern remains in the area of dioxin and other toxins in the dioxin family. If the industry continues to be allowed to bleach via chlorine substitution as proposed in the new rule, the industry will be able to comply. If, however, the proposed regulations are changed to require total chlorine free bleaching, then the paper industry, as well as, a number of other industries and cities will be faced with major expenditures in order to comply.
In the container plants, there are no known major environmental problems at this time. In 1994, the Company had expenses at several plants, mostly for closure of a lagoon, with the total for all plants being less than $0.4 million. Anticipated spending is approximately $0.8 million in 1995 on similar items.
The forestry operation continues to have no major environmental problems. The one area of expense in 1994 was at one of the forestry units in connection with fuel contamination of soil. Approximately $0.3 million was spent on this in 1994 and it is estimated that $0.1 million will be spent in 1995 for clean-up and monitoring the ground water. No problems are anticipated at any other forestry units.
Transportation
The Company owns 54% of Florida East Coast Industries, Inc. which in turn owns 100% of Florida East Coast Railway Company (FEC). The Company also owns and operates Apalachicola Northern Railroad Company (ANRR). The common stock, par value $6.25 per share, of Florida East Coast Industries, Inc. is registered pursuant to Section 12(b) of the Securities Exchange Act (Commission file number 2-89530).
Both FEC and ANRR are subject to regulation by the Interstate Commerce Commission and, in some areas, the State of Florida. These governmental agencies must approve, prior to implementation, changes in areas served and certain other changes in operations of FEC and ANRR.
The principal business of FEC is that of a common carrier of goods by rail over 442 miles of main and branch line track all in the state of Florida. The mainline extends 351 miles from Jacksonville on the north, to Miami on the south, with 91 miles of branch line extending west from Fort Pierce to Lake Harbor. Principal commodities carried by the FEC in its rail service include automotive vehicles, crushed stone, cement, trailers-on- flatcars, containers-on-flatcars and basic consumer goods such as food. FEC is the only railroad serving the area between Jacksonville and West Palm Beach on the east coast of Florida. Common motor carriers are competitors throughout the entire transportation system and CSX Transportation, Inc. is a competitor over that section of track extending southward from West Palm Beach to Miami for rail traffic, excluding that of trailer-on-flatcar and container-on-flatcar traffic.
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The operating statistics set forth below reflect FEC's performance for the latest three years: Operating Statistics (In thousands except percentage data)
Years Ended December 31,
1994 1993 1992
Operating revenues $ 163,098 $ 162,318 $ 138,736 Operating income 28,506 28,843 18,876 Operating margin 17.5% 17.8% 13.6% Tonnage 13,693 14,709 13,772 Revenue ton miles 4,487,401 4,257,000 4,157,594
The FEC had capital expenditures in 1994 of $21.3 million in addition to maintenance expenditures of $55.8 million. This compares to 1993 capital expenditures of $19.8 million and 1992 of $17.9 million. The maintenance expense in 1993 was $53.7 million and 1992, $33.8 million.
ANRR is a short line railroad that operates exclusively within the state of Florida, over 90 miles of main track and 6 miles of rail yard track extending from Port St. Joe to Chattahoochee where it connects with an unaffiliated carrier. All 90 miles of the main line are 100% concrete crossties. Although it is a common carrier, most of ANRR business consists of carrying coal and items related to wood. In 1994, 68.1% of its carloads were carrying coal. The carloads of coal carried in 1993 and 1992 were 67.5% and 67.8% respectively of the total. The other main commodity carried is wood products, consisting of pulpboard, woodchips and pulpwood. These products totaled 24.6% of the total 1994 carloads, 24.6% in 1993 and 24.1% in 1992. The other items carried by ANRR are tall oil, chemicals, stone and clay products and recyclable items. Certain operating statistics for the latest three years are as shown:
Operating Statistics (In thousands except percentage data)
Years Ended December 31,
1994 1993 1992
Operating revenues $ 12,886 $ 12,685 $ 12,366 Operating income 1,398 1,969 2,614 Operating margin 10.9% 15.5% 21.1% Tonnage 4,227 4,187 4,047 Revenue ton miles 407,197 401,907 380,696
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Capital expenditures by the ANRR in 1994 were $3.8 million which compares to 1993 capital expenditures of $4.2 million and 1992 of $3.4 million. The ANRR has budgeted $2.2 million in 1995 for capital expenditures.
FEC is a party to various proceedings before state regulatory agencies relating to environmental issues. In addition, FEC, along with many other companies, has been named a potentially responsible party in proceedings under Federal statutes for the clean up of designated Superfund sites at Jacksonville, Florida and Portsmouth, Virginia. FEC has made an estimate of its likely costs attributed to sites for which its clean up responsibility is probable and a liability has been recorded. Such liability is not material to the financial position of the FEC. 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. FEC is not aware of any monetary sanctions to be proposed which in the aggregate, are likely to exceed $100,000, nor does it believe that corrections will necessitate significant capital outlays or cause material changes in its business.
ANRR has environmental problems involving stormwater run-off and contaminated soil from fuel oil and gasoline. These items cost approximately $1.4 million in 1994 for both capital expenditures and expense and are budgeted for $0.3 million in 1995.
Sugar
In 1971, the Company acquired a 60% interest in Talisman Sugar Corporation (TSC) which is a grower of sugarcane located in the fertile Belle Glade area in south central Florida. In addition to growing sugarcane TSC harvests the cane and processes the cane into raw sugar. In 1984, the Company acquired the remaining 40% interest in TSC, thereby owning 100% of it today.
The Company at the end of 1994 owned approximately 48,600 acres of agricultural land and leased approximately 7,000 acres for use in its sugarcane growing operation. Sugarcane production and processing is seasonal in nature. Sugarcane plantings generally yield two harvests before replanting is necessary. The Company harvests its sugarcane crop in one-year cycles, as do other Florida producers. The Company generally plants sugarcane in the fall of each year. Harvesting of a crop generally commences in October of each year and continues into the following March. During the 1994-1995 crop the TSC grew sugarcane on approximately 43,000 acres of land.
The majority of the Florida sugarcane producers, including TSC, harvests sugarcane using mechanical cane harvesters. This is a change from harvesting sugarcane by hand as was the historical practice. Cane cutting and loading are performed with mechanized harvesters which reduces significantly the labor requirements, resulting in substantial cost savings and permits the grinding of the sugarcane more quickly after harvesting, resulting in improved efficiency. Mechanized harvesting, however, is less
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precise than manual harvesting, resulting in greater amounts of chaff and trash being mixed in with the harvested sugarcane. As a result, a minimal amount of sucrose is lost through leaching into the trash and chaff. In addition, mechanized harvesting causes more damage to cane fields than manual harvesting, resulting in slightly lower cane yields in subsequent crops. Consequently, yields of sucrose from harvested sugarcane and its crop yields per acre are generally slightly lower than those cut by hand. These negative effects are far outweighed by the labor cost savings and other efficiencies resulting from mechanized harvesting.
The Company's sugar mill has a grinding capacity of approximately 11,500 tons of sugarcane per day. The Company ground approximately 1,296,000 tons of sugarcane in 1992, approximately 1,321,000 tons in 1993 and approximately 1,184,000 tons of sugarcane in 1994 from Company operated lands. Total raw sugar production for the Company was approximately 117,000 tons in 1992, 119,000 in 1993, and 114,261 tons in 1994.
The sugar mill is virtually energy self-sufficient, with almost all of its energy requirements supplied through the use of bagasse, a by-product of the mill's cane grinding operations. The Company harvests and processes its sugarcane into raw sugar and sells its entire production to Everglades Sugar Refinery, Inc., a wholly-owned subsidiary of Savannah Foods & Industries, Inc., pursuant to a contract which was to expire in 1996. In 1993, this contract was amended and extended through the 1997/1998 crop year and is automatically renewed each crop year thereafter. Either party can decline to renew by giving notice to the other party no later than October 1 of the fourth year prior to the termination date. Under the contract, the Company is paid for its sugar based on market prices.
The sugar industry is highly competitive. The Company competes with foreign and domestic sugarcane and sugar beet processors, as well as manufacturers of corn sweeteners and artificial sweeteners such as aspartame and saccharin. Sugar is a volatile commodity subject to wide price fluctuations in the marketplace. Sugar prices have been supported by the United States Government through the Agriculture and Food Act of 1981 which restricts sugar imports in order to support the domestic sugar price. This Act was scheduled to terminate in 1990. The United States Congress in 1990, passed the Food, Agriculture, Conservation and Trade Act of 1990, which extended this price support program to cover the 1991-95 crops of sugarcane.
In 1994 the State of Florida enacted the Everglades Forever Act which significantly affects agriculture in the Everglades Agricultural Area (EAA).The Act calls for the creation of six Stormwater Treatment Areas (STA) as buffers between the Everglades Protection Area and the EAA. The Act imposes substantial taxes on TSC and other agricultural interests to pay for construction of the STAs. As with the Forest Products segment of the Company, there is concern in the Sugar segment with the new Clean Air Act and not knowing at this time what will be the complete impact of the Act on this operation. The sugarcane growers, as well as, TSC will need to get Title V permits as required under the Clean Air Act. These permits presently are required prior to November, 1995.
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Capital expenditures by TSC in 1994 were $3.4 million and compares to $2.9 million in 1993 and $7.4 million in 1992. The capital expenditures budget for 1995 is $4.3 million.
The Company had only minor expenditures for environmental problems, less than $0.4 million, in 1994. The only environmental problem TSC has, at present, is in the removal of water from its property. TSC has installed equipment to monitor the quality and quantity of water being pumped out of its pumping stations as required by the local Water Management District.
Communications
St. Joe Communications, Inc. (SJCI) provides unregulated tele- communications services such as the sale of communications systems and of telephone equipment to commercial and residential customers and in addition owns three regional operating telephone companies. The operating companies provide local telephone communications services in 12 northwestern Florida counties, 2 southern Alabama counties and 1 Georgia county through 19 exchanges located in the region which service approximately 36,900 access lines. In addition to providing local exchange telephone service, the Company's facilities are connected with other telephone companies and the nationwide toll networks of long distance carriers. The Company also supplies telephone and other communications service to Tyndall Air Force Base pursuant to a long-term contract.
In addition to its regular telephone services, the Communications segment participates in four limited partnerships with major telecommun- ications companies as partners. These interests in the four partnerships vary from 12% to 51% and are to provide cellular telephone service in their operating territory. These four partnerships operate in the following areas: (1) Tallahassee - Perry, Florida (serving six counties in Florida); (2) Port St. Joe, Florida (serving four counties in Florida); (3) Fort Walton Beach, Florida (serving five counties in Florida) and (4) southeast Alabama (serving twelve counties in Alabama). These partnerships operated 66 cell sites at December 31, 1994 having added 16 cell sites in 1994. The Company anticipates adding 20 more in 1995.
The Company owns and leases to MCI on a primary term of ten years, with renewal option provisions, a fiber optic transmission network extending from Fort Walton Beach to Tallahassee of approximately 150 miles. The Company owns fiber optic routes from Port St. Joe to Blountstown, Carrabelle, and Tyndall Air Force Base, Blountstown to Bristol and Perry to Keaton Beach and one-half of the distance from Perry to Tallahassee. These locations are all in Florida and total over 326 miles. This network is used exclusively to serve intercompany and intracompany routes. The intracompany routes are major feeder routes between exchanges and/or electronic remote facilities associated with the various exchanges. The companies will continue to install fiber optic cable for these same basic transmission functions.
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SJCI has a policy to invest in the latest, most advanced equipment and technology. In keeping with this policy SJCI expended $5.4 million on capital improvements in 1994 which compares to $5.3 million that was spent in 1993 and $7.6 million in 1992. SJCI has budgeted $3.9 million for 1995 capital improvements. The Communications operations are subject to regulations by the Public Service Commissions of the states of Florida and Alabama with respect to intrastate services and the Federal Communications Commission with respect to interstate services. The operating companies are limited to certain specified rates of return on its regulated operations and in 1990 and 1991 exceeded these permitted rates of return and were required to rebate the excess revenue to its customers.
Real Estate
The Real Estate segment of the Company consists of two operations, one a division of St. Joe known as Southwood Properties (Southwood), and Gran Central Corporation (Gran Central), a subsidiary of Florida East Coast Industries, Inc. The Company reorganized into industry segments in 1985 and at that time put most of St. Joe's investment and developable real estate into Southwood. Gran Central was incorporated in 1981, but was not very active until 1984 when, by reorganization, it received all Florida East Coast Industries, Inc. non-operating real estate. The Real Estate segment was established for more efficient management and for better planning of future development, sales and/or leasing of various parcels of property. The property in this segment is suited for development in all areas, commercial, industrial, residential and resort. The Company began in the mid 80's to actively pursue plans to develop these real estate properties. The Real Estate segment became a significant business operation and for the first time in 1987 was reported as a separate segment of the Company.
The Company has not and does not intend to enter into any debt financing arrangements in connection with its development activities. Rather, the Company intends to fund those projects with cash from operations and from sales of certain properties. Because the Company will not incur significant financing costs, the Company believes that it will bring a long- term perspective to its development strategy and will be better able to withstand any cyclical downturns in the Florida real estate market. In addition, the Company intends to take a conservative approach to development and to develop projects only to the extent market conditions and internally generated funds permit. Accordingly, it can be expected that it will take many years before the Company may be able to complete developments covering significant portions of its developable properties. The Company's objective is to emphasize the long-term capital appreciation of its real estate assets and as a consequence, the Company expects that substantially all of the cash flow generated from real estate development activities will be reinvested in these activities.
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The growth of the panhandle area, where the Company owns significant acreage, is expected to continue, although at a much lower rate than is generally expected for the rest of the state. Florida's fastest population and employment growth areas are expected to be along both coasts (excluding the panhandle region) and in central Florida. Gran Central owns sizable acreage within several high-growth areas along Florida's east coast, including, but not limited to, the West Palm Beach, Melbourne-Titusville, Daytona Beach, Miami-Hialeah and Fort Pierce areas. The focus of Gran Central's activities has been the Miami and Jacksonville area.
Although this growth has provided, and is expected to continue to provide, significant real estate development opportunities, there is substantial concern among state and local authorities about the impact that this development may have on the environment and facilities and services provided by municipalities. As a result, land use and environmental regulations are becoming more complex and burdensome. Development of real property in Florida entails an extensive approval process which involves regulatory agencies with overlapping jurisdictions. The process requires compliance with the Local Government Comprehensive Planning and Land Development Act (the "Growth Management Act"). In addition, development projects that exceed certain specified regulatory thresholds require approval of a comprehensive Development of Regional Impact (DRI) application by a state-appointed regional planning council. Compliance with the Growth Management Act and the DRI process is usually lengthy and costly and can be expected to have a material effect on the Company's real estate development activities in the area of land use and its application to wetlands.
Southwood manages the extensive properties that the Company owns and has identified as suitable for development in the Florida panhandle and in St. Johns county. These wooded properties include substantial gulf, lake and riverfront acreage and, therefore, are well suited to residential and resort development, including development as large residential and mixed-use planned communities. A portion of the Company's property along the northwestern coast of Florida is suitable for commercial or industrial development. Southwood's general strategy for developing its residential and mixed-use properties will be to install infrastructure improvements, such as sewers, utility hookups and roads, and to sell lots to other developers or individuals for building in accordance with the master development plan formulated for the community. At present, the Company does not intend to build individual homes.
In 1991, Southwood completed the construction of its first office building containing 11,700 square feet. This building is in the Southwood Center Office Park, Panama City, Florida and at December 31, 1994 was 100% leased. Architectural design for the next building at this location was completed during 1994 and site design and permitting are currently active. Southwood, in 1994, sold the remaining 12 lots in Woods II, and the remaining lots in the Woodmere subdivision, all being in Panama City. The Company sold the last 21 lots at Old Florida Beach subdivision, Walton County, Florida. In 1994 design and permitting continues in Phase III of the Woods for 50 lots. The Retreat, which will be a 100 lot, gulf-front subdivision near Old
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Florida Beach in Walton County is currently in the design and permitting stage. Phase I of 50 lots will be completed this year with the first sales anticipated for 1996. Final engineering and permitting for Summerwood, a 200 lot subdivision in Bay County, is expected to be completed by mid summer. Construction will start this year with the first sales taking place in early 1996. Final permitting is expected by mid year for Camp Creek subdivision, an 18 lot gulf-front subdivision in Walton County, with sales possible by year-end. Southwood had approximately $0.3 million in capital expenditures in 1994 compared to $1.5 million in 1993. The Company has budgeted $1.8 million in capital expenditures for 1995.
The development properties owned and managed by Gran Central total approximately 17,900 acres. These properties are in thirteen counties situated in a corridor running along the eastern seaboard of Florida between Jacksonville and Miami. They include both urban and rural properties on sites that range in size from parcels of under one acre to a tract of over 6,000 acres. Many of the properties are located on strategic urban streets or are easily accessible by major highways such as Interstate 95 or U. S. Route 1 and several are located adjacent to mass transit facilities.
Approximately two-thirds of Gran Central's properties are located in or adjacent to industrial and commercial corridors, and are well suited to the development of office buildings, office/distribution parks and industrial parks. Gran Central has been pursuing planning, permitting and infrastructure development and now has approximately 3.8 million square feet of buildings. Approximately 89% of the leasable space was under lease at year-end 1994 compared to 88% in 1993 and 90% in 1992. In 1994, Gran Central completed six buildings with a total square footage of 686,000. Gran Central had capital expenditures of $28.0 million in 1994 compared to $34.1 million in 1993 and expects to spend $35.3 million in 1995.
Investments
The Company in addition to its operations has investments in U. S. Government securities, tax exempt municipal bonds, certificates of deposit, remarketed certificates of participation, common and preferred stocks, and other corporate debt securities. The Company's marketable securities include common stock of E. I. duPont de Nemours & Company, General Motors Corporation and General Motors Corporation Class-H stock.
New Products
Refinements of existing products are developed and introduced in the forest products segment of the Company every year. During 1994, no single refinement or group of refinements was introduced which would require the investment of a material amount of St. Joe's assets or which otherwise would be considered material.
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Sources and Availability of Raw Materials
During 1994 and 1995 to date, all of the raw materials the Company uses were available in adequate supply from multiple sources.
St. Joe owns slightly over one million acres of timberland, of which approximately 700,000 acres are suitable for growing commercial species of trees. Such timberland is the main source of supply for its linerboard mill which in turn supplies a major part of the requirements for the Company's corrugated box operations. The remaining timber requirements for the linerboard mill are obtained on the open market under short-term contracts.
Talisman owns or leases approximately 55,100 acres of land in Palm Beach County, Florida, of which approximately 43,000 acres are being used to grow sugarcane.
Patents and Licenses
St. Joe did not obtain any new patents or licenses in 1994. The Company has pending one application for a trademark in the Container Company.
Seasonality
The sugarcane production and processing segment is seasonal with one sugarcane crop being harvested each year. None to little significant seasonality exists for products or services in the other segments of the Company.
Working Capital
In general, the working capital practices followed by the Company are typical of industries in which it operates. During some periods the accumulation of inventories in the sugar operations prior to expected shipments reflects the seasonal nature of this industry and may require periodic short-term borrowing.
Customers
Major customers exist for each of the Company's industry segments. TSC has a contract with Everglades Sugar Refinery, Inc. to purchase the entire raw sugar production. This contract runs through the 1997/1998 crop year and is automatically renewed each crop thereafter. Either party can decline to renew by giving notice to the other party no later than October 1 of the fourth year prior to the termination date. No single customer accounts for 10% or more of the Company's consolidated revenues.
Research and Development
St. Joe maintains a nursery and research facility in Capps, Florida, which grows seedlings for use in reforestation of its lands. Experiments in forestry genetics, including research on the production of faster growing,
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more disease-resistant pine species, are also conducted at this facility. The Company also participates through cooperation with the University of Florida in their Genetics Co-op program. This experimentation work is in genetics, plantation and fertilization. The amounts spent during the last three fiscal years on Company-sponsored research and development activities were not material.
Employees
The Company had approximately 5,000 employees at December 31, 1994. Approximately 70% of the Company's employees are covered by collective bargaining agreements with 9 different unions. These agreements generally have terms of between one and four years and have varying expiration dates. The Company considers its relations with its employees to be good.
Executive Officers of the Registrant
Set forth below are the names, ages (at March 15, 1995), positions and offices held, and a brief account of the business experience during the past five years of each executive officer.
Name Age Position with Company
Winfred L. Thornton 66 Chairman of the Board and Chief Executive Officer since 1991; President 1984-1991; Director since 1968; President and Chairman of the Board of Florida East Coast Industries, Inc. since 1984; President of FEC 1964-1984.
Robert E. Nedley 56 President since 1991; Vice President 1981-1991; Director since 1989.
Howard L. Brainin 65 Vice President and Director since 1992.
Edward C. Brownlie 57 Vice President - Administration Director since 1982.
E. Thomas Ford 62 Vice President since 1972; Director since 1989.
Stanley D. Fraser 70 Vice President since 1972; Director since 1982.
There are no family relationships among the persons named above. All officers serve at the pleasure of the Board of Directors of the Company and there is no arrangement or understanding between any of the officers of the Company and any other persons pursuant to which such officer was selected as an officer. Each officer has been elected to the position shown until the next annual election of officers, which is to be held on May 9, 1995.
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ITEM 2.



ITEM 2. PROPERTIES
The principal manufacturing facilities and other materially important physical properties of the Company at December 31, 1994 are listed below and grouped by industry segment. All properties shown are owned in fee simple except where otherwise indicated.
Corporate Facilities
Jacksonville, Florida - Occupies approximately one and one-half floors of a four story Company-owned building.
Forest Products
Forestry Management Facilities Albany, Georgia Port St. Joe, Florida Hosford, Florida West Bay, Florida Newport, Florida Wewahitchka, Florida
Chip Plants Lowry Newport
Nursery and Genetics Research Facility Capps, Florida
Pulpwood Procurement Offices Port St. Joe, Florida
Paper Mill Port St. Joe, Florida
Container Manufacturing Plants Atlanta, Georgia Lake Wales, Florida Baltimore, Maryland (subject to Industrial Birmingham, Alabama Revenue Bond Financing Charlotte, North Carolina $8.5 million) Chesapeake, Virginia Laurens, South Carolina Chicago, Illinois Louisville, Kentucky Dallas, Texas Memphis, Tennessee Dothan, Alabama Pittsburgh, Pennsylvania Hartford City, Indiana Port St. Joe, Florida Houston, Texas
Marketing Offices Union, New Jersey (leased)
Agricultural Lands
The Company owns slightly over one million acres of agricultural lands in Florida and Georgia and leases an additional 4,800 acres.
(16)
Transportation
FEC owns three four-story buildings in downtown St. Augustine which it uses for its corporate headquarters. Its transportation facilities include 351 miles of main track, which is mostly 132# rail on concrete crossties, 97 miles of branch line track, 210 miles of yard switching track and 124 miles of other track. FEC owns 79 diesel electric locomotives, approximately 2,800 freight cars, approximately 1,630 tractor and/or trailer units for highway service, numerous pieces of work equipment and automotive vehicles. All property and equipment owned is in good physical condition.
Sugar Operations
Belle Glade, Florida. The Company owns approximately 48,600 acres of land and leases approximately 7,000 acres. In addition, it owns a raw sugar mill and various types of agricultural equipment.
Communications - Telephone Exchanges and Offices
Alligator Point, Florida Keaton Beach, Florida Altha, Florida Laurel Hill, Florida Apalachicola, Florida The Beaches, Florida Blountstown, Florida Paxton, Florida Bristol, Florida Perry, Florida Carrabelle, Florida Port St. Joe, Florida Chattahoochee, Florida Tyndall AFB, Florida Eastpoint, Florida Wewahitchka, Florida Florala, Alabama Wing, Alabama Hosford, Florida
Real Estate
Southwood owns approximately 50,550 acres of investment land the majority of which is located in West Florida. The counties with the largest holdings at December 31, 1994 are as follows:
County Acres
Bay 25,040 Leon 9,753 Franklin 7,049 St. Johns 4,321 Walton 2,012 Wakulla 1,153
In addition to these holdings the Company has another approximately 20,000 acres in West Florida that it considers investment or developable property. Southwood owns an office building in Panama City, Florida which was completed in 1991 and contains 11,700 square feet.
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Gran Central at December 31, 1994 owned approximately 17,900 acres of land held for lease development and/or sale. In addition, it manages approximately 1,430 acres owned by FEC. The largest holdings by counties are as follows:
County Acres
Volusia 3,560 St. Johns 3,530 Flagler 3,460 Brevard 2,810 Dade 1,700 Duval 1,530 Manatee 900
Gran Central also owned at year-end 1994 forty-six buildings as detailed below;
Number of Rentable Year Location Buildings Type Square Feet Built
duPont Center 1987/ Jacksonville, FL 2 Office 144,000 1988
Barnett Plaza Jacksonville, FL 1 Office 59,000 1982
Gran Park at Interstate South Office/Showroom/ 1987/ Jacksonville, FL 6 Warehouses 260,000 1989
Gran Park at the Avenues 2 Office/Showroom/ 101,000 1992 Jacksonville, FL Warehouses/ 2 Office 145,000 1992/
1 Office/Warehouses 139,000 1994 Gran Park at Melbourne Office/Showroom/ Melbourne, FL 1 Warehouse 28,000 1989
Gran Park at 1 Office/Showroom Riviera Beach, FL Warehouse 62,000 1987 Lewis Terminals 2 Rail Warehouses 176,000 1982/ 4 Cross Docks 75,000 1987/
Gran Park - McCahill Miami, FL 2 Rail Warehouses 468,000 1992/1994
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Gran Park at Miami Miami, FL 5 Office/Showroom/ 368,000 1988/ Warehouses 1990/ 1992/
4 Office/Warehouses 382,000 1990/ 1991/ 1992/
4 Rail Warehouses 398,000 1989/ 1990/ 1993/
5 Front Load Warehouses 604,000 1991/ 1992/
1 Double Front Load Warehouse 239,000 1993 1 Office Service Center 41,000 1994
Hialeah, FL 1 Cross Dock 20,000 1987
Pompano, FL 1 Rail Warehouse 54,000 1987
TOTAL 46 3,763,000
Gran Central's holdings include lands adjacent to FEC tracks which are suitable for development into office and industrial parks offering both rail and non-rail-served parcels. Certain other holdings are in urban or suburban locations offering opportunities for development of office building structures or business parks offering both office building sites and sites for flexible space structure such as office/showroom/warehouse buildings.
General
St. Joe considers that its facilities are suitable and adequate for the operations involved. All facilities are being productively utilized in the business. ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
The Forest Products segment of the Company has suits pending in several counties in West Florida contesting ad valorem tax assessments. In 1994, the Company's mill was named as a potentially responsible party under Federal regulations for the cleanup of a designated Superfund site in Tampa, Florida. The alleged violation occurred in the late 1970's or early 1980's. The Company has investigated this claim and has found no evidence that material from the mill was dumped at this site and therefore, it should not have been named as a party in this matter.
(19)
The Registrant, through its Transportation subsidiary, Florida East Coast Railway (FEC), was involved in a legal action versus CSX Transportation, Inc. (CSXT), alleging, in part, violations of a 1978 Agreement between CSXT and FEC and, in part, violations of the Sherman Act. The complaint alleged that CSXT has, by its actions, placed FEC in a position such that it could not fairly compete with CSXT for certain carload traffic destined to or from South Florida points served by the two railroads. In early 1992, CSXT petitioned the ICC to reopen the merger proceedings for the purpose of eliminating the merger conditions set down by the ICC in the 1967 merger of ACL/SAL railroads. Under the conditions set by the ICC prior to merger, the merged company, CSXT, was required to cooperate with FEC in matters of rates, routes, and service in a fashion allowing FEC to compete effectively with CSXT on traffic to and from West Palm Beach southward. A tentative Order by the U.S. District Court dated February 19, 1993, found that contract rates were included in the 1978 Agreements, but that CSXT could not be required to establish an equal joint-line contract rate since the Court views such action as a form of price-setting which is illegal. As reported in 1993, appeals were made in the U.S. District Court in Chicago and before the Interstate Commerce Commission in Washington. Both actions were resolved in favor of CSXT and the Company will not contest this issue further.
The FEC is also involved in legal actions against the Florida Department of Revenue (FDR), and several counties of the state, for its ad valorem assessment covering the years 1987 through 1991. The FDR received a favorable decision on this case in 1991 for the years 1987 and 1988 which the FEC appealed. The years 1989 through 1991 which had been stayed, pending the outcome of the above case, have now been assessed and form the basis for new suits. In the third quarter of 1993 the FDR and FEC reached a settlement of $13.5 million as the total amount of ad valorem taxes due for the years 1987 through 1991.
The FEC and ANRR are involved in various proceedings associated with environmental issues. See page 8 under discussion of the Transportation segment for details.
ANRR has filed action in the courts against the FDR and several counties of the state on its ad valorem assessment covering the years 1987 through 1993. The suit covering the years 1987 and 1988 was being held in abeyance, pending final determination of the companion case of the FEC discussed above. Since the FDR settlement with the FEC, they have billed the ANRR $0.3 million as the amount required to settle the case covering these two years. The suit for the years 1989 through 1993 which was scheduled to be heard by the courts in 1993 has been reset for 1994. The amount at issue for these five years is approximately $0.6 million. The Company expects these cases will be settled in 1995.
The Company knows of no other pending or contemplated legal proceedings other than ordinary routine litigation incidental to the business or property of the Company.
(20)
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the Company's 1994 fiscal year to a vote of security holders, whether by solicitation of proxies or otherwise.
PART II ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Incorporated by reference to the 1994 Annual Report to Stockholders on page 11.
The Company has established a regular quarterly cash dividend of $.05 per share. The dividend of $.05 per share for the first quarter of 1995 is payable on March 31, 1995 on record date of March 24, 1995.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
Incorporated by reference to the 1994 Annual Report to Stockholders on page 11.
ITEM 7.

ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Incorporated by reference to the 1994 Annual Report to Stockholders
Balance Sheet - Page 13 Statement of Income - Page 15 Statement of Cash Flow - Page 18
ITEM 8.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements on page 12 to 29, inclusive and the Independent Auditors' Report on page 30 of the Annual Report to Stockholder for 1994 are filed as part of this Report and incorporated herein by reference thereto.
(21)
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10.



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Reference is made to the information to be set forth in the section entitled "Election of Directors" in the definitive proxy statement involving the election of directors in connection with the Annual Meeting of Stock- holders of St. Joe to be held on May 9, 1995 (the "Proxy Statement"), which section is incorporated herein by reference. The Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after December 31, 1994, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended.
The information required with respect to executive officers is set forth in Part I of this Report under the heading "Executive Officers of the Registrant", pursuant to instruction 3 to paragraph (b) of Item 401 of Regulation S-K.
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
Reference is made to the information to be set forth in the section entitled "Compensation of Directors' in the Proxy Statement, which section is incorporated herein by reference.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Reference is made to the information to be set forth in the section entitled "Common Stock Ownership of Certain Beneficial Owners" and "Common Stock Ownership of Management" in the Proxy Statement, which sections are incorporated herein by reference.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
(22)
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT, SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The financial statements listed in the accompanying Index to Financial Statements and Financial Statement Schedules are filed as part of this Report.
2. Financial Statement Schedules
The financial statement schedules listed in the accompanying Index to Financial Statements and Financial Statement Schedules are filed as part of this report.
3. Exhibits
The exhibits listed on the accompanying Index to Exhibits are filed as part of this Report.
(b) Reports on Form 8-K
None
(23) (PAGE) ST. JOE PAPER COMPANY
AND FINANCIAL STATEMENT SCHEDULES
(Item 14(a) 1. and 2.)
Reference
Annual Report Form 10-K To Stockholders Page Number Page Number
Report of Independent Certified Public Accountants 30
Consolidated Balance Sheet at December 31, 1994 and 1993 12
Consolidated Statement of Income for each of the three years in the period ended December 31, 1994 14
Consolidated Statement of Changes in Stockholders' Equity for each of the three years in the period ended December 31, 1994 14
Consolidated Statement of Cash Flows for each of the three years in the period ended December 31, 1994 17
Notes to Consolidated Financial Statements 19-29
Consolidated Schedules for each of the three years in the period ended December 31, 1994:
VIII - Valuation and Qualifying Accounts S-1
XI - Real Estate and Accumulated Depreciation S-2-7
All other schedules have been omitted since the required information is not present or not present in amounts sufficient to require submission of the schedule or because the information required is included in the consolidated financial statements, including the summary of significant accounting policies and the notes to the consolidated financial statements.
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ST. JOE PAPER COMPANY
INDEX TO EXHIBITS
(Item 14(a) 3.)
S-K ITEM 601 Documents Page
(3) (a) Articles of Incorporation *
(3) (b) By-Laws *
(10) (b) Agreement between Apalachicola and Seminole Electric Cooperative, Incorporated dated October 14, 1982 *
(b) Agreement between Talisman Sugar Corporation and Everglades Sugar Refinery dated February 11, 1986 **
(21) Subsidiaries of St. Joe (filed herewith and attached) E-1
(24) Powers of Attorney E-2 - E-3
*Incorporated herein by reference to Exhibits filed in connection with St. Joe Paper Company Registration Statement on Form 10 as filed with the Securities and Exchange Commission on April 30, 1984 (File No. 1-12001).
**Incorporated herein by reference to Exhibits filed with the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1990.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on February 28, 1995.
ST. JOE PAPER COMPANY
By: Edward C. Brownlie Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 8, 1995.
Chairman of the Board and W. L. Thornton* Chief Executive Officer Winfred L. Thornton
Jacob C. Belin* Chairman of the Executive Jacob C. Belin Committee
President, Chief Operating Officer and Robert E. Nedley* Director Robert E. Nedley
Vice President and Stanley D. Fraser* Director Stanley D. Fraser
Vice President and Howard L. Brainin* Director Howard L. Brainin
Vice President and Director (principal financial officer)
Edward C. Brownlie
Richard H. Dent* Director Richard H. Dent
(26)
Vice President and E. Thomas Ford* Director E. Thomas Ford
Russell B. Newton, Jr.* Director Russell B. Newton, Jr.
Walter L. Revell* Director Walter L. Revell
John D. Uible* Director John D. Uible
Comptroller (principal accounting officer)
D. Michael Groos
By: Edward C. Brownlie Attorney-in-Fact
*Such signature has been affixed pursuant to Power of Attorney. See Exhibit 24.
(27)
Independent Auditors' Report
The Board of Directors and Stockholders St. Joe Paper Company:
Under date of February 28, 1995, we reported on the consolidated balance sheets of St. Joe Paper Company and subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of income, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1994, as contained in the 1994 annual report to stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year 1994. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedules as listed in the accompanying index. These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
As disclosed in notes 2 and 6 to the consolidated financial statements, the Company changed its method of accounting for investments to adopt the provisions of the Financial Accounting Standards Board's Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities" at December 31, 1993. As disclosed in notes 2 and 8, the Company changed its method of accounting for income taxes effective January 1, 1993 to adopt the provisions of the Financial Accounting Standards Board's SFAS No. 109, "Accounting For Income Taxes".
KPMG PEAT MARWICK LLP Certified Public Accountants
Jacksonville, Florida February 28, 1995
ST. JOE PAPER COMPANY SCHEDULE VIII (CONSOLIDATED) VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 1994, 1993 and 1992 (Dollars in thousands)
Balance at Additions Beginning Charged to Balance Reserves included in of Year Expense Payments End of Year Liabilities Accrued casualty reserves 22,911 9,995 5,122 27,784 (a) Accrued casualty reserves 22,916 2,443 2,448 22,911 (a) Accrued casualty reserves 23,043 3,774 3,901 22,916 (a)
(a) Includes $13,250, $11,601 and $11,213 in current liabilities at December 31, 1994, 1993 and 1992, respectively. The remainder is included in "Accrued casualty reserves and other liabilities."
S-1
ST. JOE PAPER COMPANY SCHEDULE XI (CONSOLIDATED) REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1994, 1993 and 1992 (Dollars in thousands)
Initial Cost to Company Costs Buildings Capitalized Encum- & Tenant Subsequent to Description brance Land Improvements Acquisition Duval County Office Buildings (5) 0 1,153 6,200 26,508 Office/Showroom/Warehouse(9) 0 1,502 23,234 Land w/ Infrastructure 0 6,593 6,786 City & Residential Lots 0 371 5 77 Unimproved land & misc assets 0 915 1,548 St. Johns County Land w/ Infrastructure 0 10 1,045 Unimproved land 0 2,631 411 Flagler County Unimproved land 0 3,218 1,137 Volusia County Unimproved land 0 3,651 501 Brevard County Office/Showroom/Warehouse 0 73 1,900 Land w/ Infrastructure 0 3,797 0 Unimproved land 0 4,846 191 Indian River County Unimproved land 0 218 189 St. Lucie County Unimproved land 0 639 5 Martin County Unimproved land 0 4,671 2,344 Palm Beach County Office/Showroom/Warehouse 0 113 2,879 Rail Warehouses (2) 0 449 4,110 Cross Docks (4) 0 117 3,763 Land w/ Infrastructure 0 1,259 0 Unimproved land 0 1,596 0 Broward County Rail Warehouse 0 85 1,701 Unimproved land 0 733 701 Dade County Office/Showroom/Warehouses (5) 0 1,003 14,782 Office/Warehouses (5) 0 1,747 14,960 Rail Warehouses (6) 0 808 24,607 Cross Dock 0 137 1,018 Double Front Load Warehouse 0 768 5,485 Front Load Warehouses (5) 0 1,943 16,066 Land w/ Infrastructure 0 2,577 7,854
S-2
ST. JOE PAPER COMPANY SCHEDULE XI (CONSOLIDATED) REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1994, 1993 and 1992 (Dollars in thousands)
Initial Cost to Company Costs Buildings Capitalized Encum- & Tenant Subsequent to Description brance Land Improvements Acquisition Dade County (continued) Unimproved land & misc assets 0 15,725 9,733 Putnam County Unimproved land 0 2 0 Manatee County Unimproved land 0 14 78 Gulf County Unimproved land 0 559 180 Bay County Land w/ Infrastructure 0 1 121 Office Building 0 1 1,195 Unimproved land & misc assets 0 517 121 Leon County Land w/ Infrastructure 0 603 46 Walton County Land w/ Infrastructure 0 120 480 Other Counties Unimproved land 0 105 1,949 Grand Total 0 65,270 6,205 177,705
S-3
ST. JOE PAPER COMPANY SCHEDULE XI (CONSOLIDATED) REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1994, 1993 and 1992 (Dollars in thousands)
Gross Amount at Which Carried as of December 31, 1994
Land & Buildings & Land Tenant Description Improvement Improvement Total Duval County Office Buildings (5) 3,917 29,944 33,861 Office/Showroom/Warehouses (9) 5,003 19,733 24,736 Land w/ Infrastructure 13,379 13,379 City & Residential Lots 371 82 453 Unimproved land & misc assets 2,289 174 2,463 St. Johns County Land w/ Infrastructure 1,055 1,055 Unimproved land 3,042 3,042 Flagler County Unimproved land 4,355 4,355 Volusia County Unimproved land 4,152 4,152 Brevard County Office/Showroom/Warehouse 438 1,535 1,973 Land w/ Infrastructure 3,797 3,797 Unimproved land 5,037 5,037 Indian River County Unimproved land 407 407 St. Lucie County Unimproved land 644 644 Martin County Unimproved land 7,015 7,015 Palm Beach County Office/Showroom/Warehouse 599 2,393 2,992 Rail Warehouses (2) 557 4,002 4,559 Cross Docks (4) 1,262 2,618 3,880 Land w/ Infrastructure 1,259 1,259 Unimproved land 1,596 1,596 Broward County Rail Warehouse 405 1,381 1,786 Unimproved land 1,434 1,434 Dade County Office/Showroom/Warehouses (5) 3,150 12,635 15,785 Office/Warehouses (5) 3,518 13,189 16,707 Rail Warehouses (6) 4,837 20,578 25,415 Cross Dock 137 1,018 1,155 Double Front Load Warehouse 1,409 4,844 6,253 Front Load Warehouses (5) 4,326 13,683 18,009
S-4
ST. JOE PAPER COMPANY SCHEDULE XI (CONSOLIDATED) REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1994, 1993 and 1992 (Dollars in thousands)
Gross Amount at Which Carried as of December 31, 1994
Land & Buildings & Land Tenant Description Improvement Improvement Total Dade County (continued) Land w/ Infrastructure 10,431 10,431 Unimproved land & misc assets 25,126 332 25,458 Putnam County Unimproved land 2 2 Manatee County Unimproved land 92 92 Gulf County Unimproved land 739 739 Bay County Land w/ Infrastructure 88 34 122 Office Building 1 1,195 1,196 Unimproved land & misc assets 524 114 638 Leon County Land w/ Infrastructure 610 39 649 Walton County Land w/ Infrastructure 600 600 Other Counties Unimproved land 2,012 42 2,054 Grand Total 119,615 129,565 249,180
S-5
ST. JOE PAPER COMPANY SCHEDULE XI (CONSOLIDATED) REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1994, 1993 and 1992 (Dollars in thousands)
Life on Which Accum- Depreciation in ulated Date Latest Income Depre- Started or Statement is Description ciation Acquired Computed Duval County Office Buildings (5) 5,141 1985 3 to 40 years Office/Showroom/Warehouses (9) 3,484 1987 3 to 40 years Land w/ Infrastructure Various City & Residential Lots 59 Various 3 to 40 years Unimproved land & misc assets 173 Various 3 to 40 years St. Johns County Land w/ Infrastructure Various Unimproved land Various Flagler County Unimproved land Various Volusia County Unimproved land Various Brevard County Office/Showroom/Warehouse 352 1988 3 to 40 years Land w/ Infrastructure Various Unimproved land Various Indian River County Unimproved land Various St. Lucie County Unimproved land Various Martin County Unimproved land Various Palm Beach County Office/Showroom/Warehouse 647 1986 3 to 40 years Rail Warehouses (2) 1,034 1982 3 to 40 years Cross Docks (4) 747 1987 3 to 40 years Land w/ Infrastructure Various Unimproved land Various Broward County Rail Warehouse 492 1986 3 to 40 years Unimproved land Various Dade County Office/Showroom/Warehouses (5) 1,826 1988 3 to 40 years Office/Warehouses (5) 1,413 1990 3 to 40 years Rail Warehouses (6) 1,554 1988 3 to 40 years Cross Dock 210 1987 3 to 40 years Double Front Load Warehouse 321 1993 3 to 40 years Front Load Warehouses (5) 989 1991 4 to 40 years Land w/ Infrastructure
S-6
ST. JOE PAPER COMPANY SCHEDULE XI (CONSOLIDATED) REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1994, 1993 and 1992 (Dollars in thousands)
Life on Which Accum- Depreciation in ulated Date Latest Income Depre- Started or Statement is Description ciation Acquired Computed Dade County (continued) Unimproved land & misc assets 1,891 Various 3 to 40 years Putnam County Unimproved land Various Manatee County Unimproved land Various Gulf County Unimproved land 24 Bay County Land w/ Infrastructure Office Building 174 1993 3 to 40 years Unimproved land & misc assets 13 Various 3 to 40 years Leon County Land w/ Infrastructure 11 Various 3 to 40 years Walton County Land w/ Infrastructure Other Counties Unimproved land 41 Various Grand Total 20,596
Notes (a) The aggregate cost of real estate owned at December 31, 1994 for federal income tax purposes is $140,875.
1994 1993 1992 (b) Reconciliation of real estate owned: Balance at beginning of year 222,498 192,466 162,083 Amounts capitalized 28,350 31,691 30,690 Amounts retired or adjusted (1,668) (1,659) (307) Balanced at close of period 249,180 222,498 192,466
(c) Reconciliation of accumulated depreciation: Balance at beginning of year 15,475 11,306 8,127 Depreciation expense 5,145 4,169 3,272 Amounts retired or adjusted (24) (93) Balanced at close of period 20,596 15,475 11,306
(d) Table excludes $25,148 of real estate construction in progress
S-7