745308--2/23/2010--ST_JOE

related topics

{loan, real, estate}

{operation, natural, condition}

{acquisition, growth, future}

{debt, indebtedness, cash}

{condition, economic, financial}

{regulation, change, law}

{investment, property, distribution}

{tax, income, asset}

{competitive, industry, competition}

A prolonged recession in the national economy, or a further downturn in national or regional economic conditions, especially in Florida, could continue to adversely impact our business. Our business is concentrated in Northwest Florida. As a result, our long-term financial results are largely dependent on the economic growth of Northwest Florida. If the new Northwest Florida Beaches International Airport is completed and opened for operations but is not successful, or if we cannot access the new airport as anticipated, we may not realize the economic benefits that we are anticipating from the new airport. Changes in the demographics affecting projected population growth in Florida, particularly Northwest Florida, including a decrease in the migration of Baby Boomers, could adversely affect our business. If the market values of our homesites, our remaining inventory of completed homes and other developed real estate assets were to drop below the book value of those properties, we would be required to write-down the book value of those properties, which would have an adverse affect on our balance sheet and our earnings. The occurrence of hurricanes, natural disasters and other climate conditions in Florida could adversely affect our business. Increases in property insurance premiums and the decreasing availability of homeowner property insurance in Florida could reduce customer demand for homes and homesites in our developments. Increases in real estate property taxes could reduce customer demand for homes and homesites in our developments. Mortgage financing issues, including lack of supply of mortgage loans, tightened lending requirements and possible future increases in interest rates, could reduce demand for our products. If we are not able to raise sufficient cash to maintain and enhance our operations and to develop our real estate holdings, our financial condition and results of operations could be negatively impacted. If our net worth declines, we could default on our revolving credit facility which could have a material adverse effect on our financial condition and results of operations. We are dependent upon national, regional and local homebuilders as customers, but our ability to attract homebuilder customers and their ability or willingness to satisfy their purchase commitments may be uncertain considering the current real estate downturn. Our business model is dependent on transactions with strategic partners. We may not be able to successfully (1) attract desirable strategic partners; (2) complete agreements with strategic partners, and/or (3) manage relationships with strategic partners going forward, any of which could adversely affect our business. Our business is subject to extensive regulation which makes it difficult and expensive for us to conduct our operations. If Wells Fargo Company s Wachovia Bank subsidiary (or any successor bank) were to fail and be liquidated, we could be required to accelerate the payment of the deferred taxes on our installment sale transactions. Our business, cash flows and financial condition may be adversely affected if this significant tax event were to occur. If drilling for oil or natural gas is permitted off the coast of Northwest Florida, our business may be adversely affected. We are exposed to risks associated with real estate development. Significant competition could have an adverse effect on our business. Our real estate operations are cyclical. Changes in our income tax estimates could affect our profitability.

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745308--2/23/2010--ST_JOE_CO