The St. Joe Company ($JOE)

Good morning, everybody. Good morning. It's 9:00 so we're going to go ahead and get started. First of all, thank you for being here this morning on a rainy morning. I'm Jorge Gonzalez, President, Chief Executive Officer and Chairman of the Board of The St. Joe Company. It is my pleasure to welcome you to the 2026 Annual Shareholder Meeting. In accordance with the notice of meeting, I officially call the meeting to order right at 9:00, Central Time, 10:00 Eastern Time. We will conduct this meeting in accordance with the agenda you were given when you registered this morning. If you have not registered, please do so at this time at the table just outside of the door. On the reverse side of the agenda is a list of the rules of conduct for this meeting to ensure an orderly meeting, we require all participants to abide by these rules. After the formal business portion of the meeting has been adjourned, we will have a presentation, and then we will provide an opportunity for questions and answers. Only validated shareholders may ask questions in the Q&A session. Out of consideration for others, please limit yourself to no more than two questions. We'll answer as many questions as time allows. Now I would like to introduce the other members of the Board, those present in person, Mr. Howard Frank, Ms. Elizabeth Franklin, Ms. Rhea Golf. We have Mr. [ Caesar Alvarez ] joining us through video. He's actually waving. You can see him on the screen Mr. Tom Murphy is unable to join us this morning. Also with us today is Josh Nixon of Grant Thornton, the company's independent registered public accounting firm, who will be available to answer any appropriate questions during the Q&A. The company's Chief Legal Officer, Lisa Walters, will act as the Secretary of the meeting. We are being assisted today in the [indiscernible] to proxies and ballots by Mr. James Hagan, agent for Broadridge Financial Solutions. At this time, I appoint Mr. James Hagan as Inspector of Elections. The notice of the meeting has been mailed to each shareholder of record as of March 18, 2026. The Inspector of Elections has informed me that [ 52,79,637 ] shares of the company's voting stock are present in person or by proxy, constituting a quorum for today's meeting. A list of shareholders on March 18, 2026, the record date is available and may be inspected during the meeting by any shareholder who has signed in. The final report of the inspector of elections will include the votes, if any, of shareholders present and voting during today's meeting. The company's mailing agent, Broadridge Financial Solutions has provided an affidavit of mailing to show the notice of the meeting was given on or [ about ] March 31, 2026. A copy of both the notice and the affidavit will be incorporated into the minutes of this meeting. Description of the proposals. Next, I will describe each proposal to be acted upon today, and then we will take the vote. Since no direct nominations, or proposals for business were properly filed by a shareholder in advance of this meeting, the business of this meeting is limited to the following 3 proposals. The first proposal before the shareholders is the election of 6 directors to serve for a 1-year term until the next annual meeting. I am standing for reelection as a director today, along with the following nominees. Caesar Alvarez, Howard Frank, Elizabeth Franklin, Rhea Goff and Thomas Murphy. We recommend the election of these nominees. The second proposal is the ratification of the appointment of Grant Thornton as our independent registered public accounting firm for the 2026 fiscal year. The Audit Committee retained the services of Grant Thornton to audit the company's financial statements for 2026, and the Board recommends that the shareholders ratify the appointment of Grant Thornton. The third proposal is a proposal to approve on a nonbinding advisory basis, the compensation paid to our named executive officers as described in the Compensation Discussion and Analysis section. The compensation tables and related narratives closures set forth in the company's 2026 proxy statement. We recommend approval of the compensation of our named executive officers. Now we will now vote on the proposals. Those shareholders voting in person should now mark their ballots. If you have previously voted by proxy, you do not need to vote again today unless you want to change your vote. If you would like a ballot, please raise your hand and one will be provided to you. Okay. The inspector of elections will not collect any outstanding ballots. [Voting]

Okay. Thank you. Since everyone wanting to vote by ballot has done so, the polls are now closed. The results of the voting. Will the inspector of elections please report the results of the balloting when you are ready.

Mr. Chairman, this initial talent is subject to verification and the final tabulation may reflect small changes in the vote I will announce. The final tabulation will set forth in the formal report of the inspector of election to the secretary of the company, which will be made after the count has been verified. I certify that a majority of the votes cast has voted for the election of each the nominees as director of the company. In addition, the votes cast favoring the ratification of the appointment of Grant Thornton has exceeded the votes cast on closing. The proposal to approve the compensation of the named executive offices has received more votes for than against. Thank you, Mr. Chairman.

I hereby declare that the director nominees have been duly elected, that the appointment of Grant Thornton as the company's independent registered public accounting firm has been ratified, and that shareholders approved the compensation of the named executive officers. On a personal note, I believe this is Mr. Hagan's last meeting with us. Thank you. Thank you for all the service. We appreciate it. This concludes the official business of the 2026 Annual Meeting. The annual meeting is adjourned, and we will now continue to the informational portion of our meeting today. Before the market opened this morning, we filed a Form 8-K and attached an investor presentation that I'm going to review with you this morning. We also posted the presentation in the Investor Relations portion of our website at joe.com. So for those listening online, you can follow along as we go through the presentation. After the presentation, we'll have a question-and-answer session. We also have bound booklets that you -- most of you have already opened in your seats, so you can follow along and actually keep that and take that with you after the meeting is over. So Slide 1 consistent business strategy, we always start our presentation by outlining our business strategy. We always want to provide clarity on what we're doing and why we're doing it. The first one is expand the portfolio of recurring income. The second one is develop residential communities with long-term scalable and repeatable revenue. The third one is to execute a multifaceted capital allocation strategy with capital expenditures for business growth, stock repurchases and debt reduction. And then the final one is to execute a steady and growing dividend program. Slide #2 is the framework of how the company's position. We [indiscernible] this slide in our presentations also. These are high-level numbers, so there's not a lot of movement year-to-year, but it's a good reminder of the framework that the company has to work with. We own 165,000 acres, 87% of which are located in 3 counties, Bay, Walton and [ Gulf ]. We have entitlements or rights to develop for over 170,000 residential units and over 22 million square feet on nonresidential. And the majority of the current revenue is derived from less than 2% of those landholdings. The next set of slides are our financial slides. We include these lines every year, and we include this time period from 2016 to 2025, or the preceding year, because that's a time period that we've been executing that business strategy that I just went over. We get a lot of good feedback, positive feedback on these slides because it shows the trajectory in that time period when we've been executing the business strategy, and it's all in one place. So a lot of prospective shareholders to have one quick place to go to, to get a quick snapshot of the trajectory. This is the first one of the financial slide, is Slide 3, which is our balance sheet. And I think everybody knows this, but I still get unusual questions from time to time. The balance sheet is based on a book basis or historical cost bases, not market. So the one small dip that you can see in 2025 in the balance sheet, that was primarily because of the sale of the [ WaterCrest ] senior living property in the third quarter of last year. The next slide is revenue. So this is the combined consolidated and unconsolidated revenue for the company in that same time period. For 2025, our combined revenue consolidated and unconsolidated was $858.5 million, and that consists of [ $513.2 million ] of consolidated revenue and $345.2 million of unconsolidated. So that $858 million is essentially $513 million of consolidated revenue. Which was the highest consolidated revenue number we've had in [ 19 ] years, not counting 2014 when we had the onetime sale, timber sale. And 19 years ago, we were a totally different company. 19 years ago, we primarily sold bulk land and our reoccurring revenue at that time was 15%. Today, we're at 60%. So it's a pretty significant transformation of the company going from 15% recurring revenue to 60%. Something else I wanted to point out about this slide is our revenue by segment. 32% is residential, 43% is hospitality and 23% is commercial. The compound annual growth rate for this time period in our combined revenue is 27%. Slide #5 is our EBITDA. We do have a calculation in Slide 28, very traditional calculation of EBITDA. The compound annual growth rate is 27%, which was a little higher than last year when we showed the same slide, which was at 26%. Net income tends to be a little bit more lumpy because it includes other measures like depreciation, which is a noncash item. We did have a 56% increase in net income year-over-year. The compound annual growth rate is 25%, up from 21% when we had this slide last year. Slide #7. Earnings per share. This follows very similarly to the revenue slide. $2 per share. It's the highest we've had in 19 years, not including 2014 with that onetime Timberland sale. The compound annual growth rate is 28%, up from 25% when we had this slide last year. Something I wanted to point out, shares outstanding because obviously, this year is a calculation of weighted average shares outstanding with net income attributable to the company. In 2024, we had 58.3 million outstanding shares. As of May 11 of this year, we have [ 57.1 million ]. So that's a little bit over 1 million share reduction. Depreciation is something we track, and we include in these financial slides because we do build assets that we bring into service, and this is just a tracking of the growth in depreciation, which, as a reminder, is a noncash item. Net income is reduced by depreciation. You can see kind of the growth of the company and the assets that we have built and brought into service. Slide 9, free cash flow. This is where we take our net income add back depreciation since it's a noncash item, and then subtract sustaining capital. And sustaining capital is the capital that we need to maintain our existing properties. So for 2025, going through that math, our free cash flow was $158 million. That's compared to 2024 with the same calculation where the free cash flow was $112 million. So we had an increase from $112 million to $158 million of free cash flow. The next slide that we also track with this set of financial slides, it's project level debt. And again, that's all the -- essentially the only debt we have, project level debt. The assets stand on their own cash flows. Everything in this chart is in the right direction, everything improved from last year. Debt is now 25% of the company's total assets. Last year was 28%. The average weighted effective interest rate is now 4.7%. Last year, it was 4.8%. This year, 82.7% of outstanding debt is -- has a fixed or swapped interest rate. Last year was 73.8%. And then the average remaining life in years is 19.7%. Last year was 18.8%. And as we've mentioned several times, the strategy with our debt reduction execution is to focus on shorter duration, higher variable interest rate debt. And that focus is essentially what's led to the improvement that you see in this slide when compared to last year. Capital allocation. This is a snapshot of capital allocation from January 1, 2015 to -- through the end of the first quarter of this year. There's been a total of $2.2 billion that has been allocated in this time frame. And you can see the breakdown by the major categories. 64% of that $2.2 billion was allocated to -- for capital expenditures for growth. 30% of that $2.2 billion was allocated for share repurchase. And then 5% was allocated for dividends. So speaking of stock repurchase, we wanted to show a snapshot of stock repurchase that we've had year-to-date. So this is for the first quarter, which we've already reported and we've disclosed. And then this also includes the month of April and through May 11, which was yesterday, the settlement date through yesterday. So this is very current. We haven't disclosed -- this is the first time we've disclosed the numbers for April and then through settlement date of yesterday. So for this time period, January 1 through May 11 of this year, we have repurchased 390,437 shares totaling $25.8 million. For the same period of time last year, January 1 through May 11, we repurchased [ 198,214 ] or $8.9 million. So that's a pretty significant increase for the same period of time. And as a reminder, for last year, the full year, the company repurchased 798,622 shares for $40 million. The next slide is, as we have grown and we have, obviously, over this period of time, we have still kept a focus on efficiency. We've kept the focus on overhead SG&A. And this is a slide that we have in our presentation every year, which tracks corporate and other operating expenses, what we call overhead as a percentage of consolidated revenue. And when we started our journey, that number was at 24%. Last year, we were at 5%. So that's a pretty significant downward trend in the right direction. This is one of the few line graphs that we like the trajectory being downward. And we actually had a decrease year-over-year from 6% to 5%. So let's talk about the future. The next set of slides, we're going to take you through kind of where we are in planning and executing the next set of projects. So this Slide 14 is all the approved detail specific area plans or DSAPs. And as a reminder, in our sector plan, the final step is to obtain approval of a DSAP from each respective County Commission. They are [indiscernible] County. They have full public hearings. The reason why [indiscernible] significant to us is that's really the last step that we need to obtain approval for before we get into the development orders and development permits where we can break ground on projects. So the DSAPs are a minimum of 1,000 acres in their mixed use. We have both commercial and residential. And the numbers that you see here in terms of the residential units and commercial square feet. We also have the ability to move those numbers around based on market conditions. So we see an opportunity for any specific DSAP to do more residential. We can swap commercial square feet and do more residential and vice versa. But this is a good baseline of what each DSAP is approved for. So we have 10 approved. We have 3 that we started, and then we have 7 that we have not started yet. So I'm going to take you through where we are with all of these 10 DSAPs. So these -- Slide 15 shows the 3 slides, the 3 DSAPs that we have started. The Bay County DSAP 1, which is, of course, Latitude. Walton County DSAP 2, which is WaterSound Origins West. And then the third one is [ Ward Creek ], which include those 3 communities along [indiscernible], Brake Water and Salt Grass. Slide 16 shows that DSAPs that we have planned to break ground, start development in late 2026, early 2027. So late this year or early next year. The variability is obviously the time to permit with the local jurisdictions in state and federal jurisdictions. But we have these 2 DSAPs to start this year, late or early next year. One is [indiscernible] Creek, which is the DSAP that we made an announcement early this year. We executed a contract with [ Pulte ] Group, the third largest homebuilder in the country. This is their first entry into this market. And by the way, [ Pigeon Creek ] is not the name of the community. Howard has asked me before, make sure it's not [ Pigeon ] Creek. That's just a placeholder that we use for the names of the DSAP. So the community will have its own brand name. The second DSAP is [indiscernible]. Again, that's just a placeholder name. We also plan on starting that DSAP, either late this year or early next year. Slide 17. These are DSAPs that we have planned to start in the middle part of 2027 of next year. There's 3 of them, West [ Bake ] Creek, which is just to the west of Latitude. West [ Laird ] and Lake [indiscernible]. Those are the 2 other DSAP. So a total of 3 that we're planning on starting in the middle part of next year. I mentioned in the, I believe in the, Q1 earnings release that we had obtained approval from a utility provider for a utility corridor. I know that's not exciting. It's not sexy. Water and [indiscernible] is not exciting, but it's a necessity for what we do for a living. And when you have utility corridors that span a long distance, it takes a long time to negotiate those agreements with the utility providers. We were happy to report in the first quarter that we obtained an approval and agreement for utility corridor. That's essentially going to allow us to get forward, get moving with those 2 DSAPs, West [ Layered ] and Lake [ Powell ]. Then the last one are DSAPs that we have planned. So this totals the 10 and going through these 3 slides, these are all 10 that we have approved. These are two DSAPs that we don't have an exact time frame yet of when we're going to get started. So the start date is to be determined. That's the [indiscernible] DSAP 2, which is to the west of [indiscernible] West. And then West Bay Crossings, which is in that intersection of [ Sabre 79 ] in [ Philip Griffith ] Boulevard. So these last 2, that includes all 10. So I hope that gives you a pretty good snapshot of where we are timing-wise, what our expectations are in terms of what we're planning on commencing these new DSAPs. It goes without saying that we also have many other DSAP that we have not submitted for approval yet. And those are decisions that we'll make along the way as we execute these 10 DSAPs that we have approval. We have a couple of others that are probably getting close to where we'll probably seek approval for those 2. So our residential home site pipeline. We show this as an assembly line because that's the way it feels like to us. We have many active residential communities where we're actively developing, selling home sites, spanning a pretty broad range of price, demographic consumer product type. But the seating and harvesting cycle for residential infrastructure that's needed to monetize lots and close on lots. It's a 1- to 2-year cycle. And it's not a snapshot. It's not one moment in time. So we think of it as an assembly line, particularly in our large scalable communities where we have multiple phases. We have to constantly be feeding the assembly line. And these are just to give you an idea of the general steps, or the general stations in the assembly line. So currently, through the end of the first quarter, we have 23,653 units in what we call in production in the assembly line. The first stop in the assembly line is a concept plan, an actual site plan, master plan that gives us a really good feel for the yield of the land. How many units we can do with the geometry of the infrastructure is going to be in terms of the road network. The next step, or station, the assembly line is engineering and permitting. This gets very exact. We go from conceptual planning to very exact set of engineering construction documents. We have [ 3,840 ] units in that station. The next station is [ planted ] or under development, where the infrastructure is being developed. And by infrastructure, I mean horizontal infrastructure. Roads, water, sewer, natural gas, strong water facilities. So we have 1,762 units in that station. Of course, the last station is our favorite, which is [indiscernible]. The text box on the right-hand side, as of March 31, we have 3,204 home sites under contract. That's a significant increase from last year where we had 952. It's 237% increase. And that was primarily, not exclusively, but primarily because of the contract that we executed with Pulte Group, for [ Piton ] Creek, which is a really big deal to have a new third national homebuilder coming to our market, that wouldn't come to our market unless they saw the growth unless that's [indiscernible] the opportunity. And we do have 18 active homebuilders in our builder program. This is a map showing all the residential communities that comprise that pipeline. So if you look at the previous slide, so Slide 20 is residential home side pipeline, a map of all the residential communities that are in that residential home site pipeline. And you can see we have a pretty wide range of locations, again, consistent with what I said earlier, we have a pretty wide range of pricing, product type consumer that are moving into these communities. So the next slide, we haven't shown before. It's same concept, but this is our commercial leasing pipeline. We tend to think of this a little bit different than a pipeline than the assembly line. That's why we ensure an [indiscernible] at form because these are more discrete projects and properties. So we have a total of 3.9 million square feet in the commercial leasing space pipeline. The first step, or the first station in that pipeline, similar to the residential home side pipeline, is where we have a [indiscernible] plan. We have a stock plan and master plan, where we have a really good feel for the [indiscernible] of the property of the commercial asset. We feel we can accommodate those core feet. So we have 2.6 million square feet in that initial station, which [indiscernible] the size of our existing commercial leasing portfolio. The next station in the pipeline is square feet under construction, or planned to be under construction this year. That's 110,000 square feet. And that's broken down by 69,134 square feet that we actually have under construction today at this moment. And then we're going to have an additional 41,000 square feet that we're going to have under construction before the end of the year. And we feel pretty confident that we'll commence construction of those additional 41,000 square feet. Then of course, the last station is the actual existing leasing portfolio, which consists of 1.2 million square feet. As of March 31, 96% of that 1.2 million square feet was leased. So that's a pretty good percentage. And then that 96% leased percentage consists of approximately 250 individual leases, 50 individual commercial leases. So this leasing -- this slide, this segment. This leasing pipeline segment represents a generation of $8.2 million in revenue per quarter. And as of the end of the first quarter of this year, margins were 73.2%. So this is a part of a portfolio that we want to continue to grow. And I get asked questions often about the timing of growing this portfolio. And I wanted to give you a little bit [indiscernible] on that. So our strategy is to have full buildings paying the maximum lease rate. So there's a timing component of that, right? Because we can build a lot of buildings without looking at the timing of when they're going to get leased, when they're going to get occupied, but we don't think that's in our best interest. So we're constantly calibrating the demand because we want to make sure that when we built these buildings in this commercial leasing portfolio, we're maximizing the lease rate, and we're maximizing the occupancy. The good news is we're getting phone calls from national retailers, national apparel brands that we didn't get years ago. So we used to have to call. Now they're calling us. So that's indicative of the growth of the market of the maturation of the market. We are -- in terms of our commercial leasing portfolio, we have the ability to ramp up. We have the ability to throttle up. If that -- if we feel that balance between starting construction and having a commitment to lease is there. But I want to give you a kind of a feel for how we think about the strategy and the timing of growing this commercial leasing portfolio. Right now, the 3.9 million square feet when we include what we have under planning, we feel pretty good about that size. That's a very realistic number to reach. But again, we're not going to do it recklessly where we have a bunch of [indiscernible] buildings and then we have to reduce the lease rate. We want to maximize lease rate and always have a very high occupancy rate. So this is a map, Slide 22 of those commercial properties. It doesn't include all the existing. So the [ $1.2 million ], it doesn't include all of those because those are really scattered all over the place. This is primarily the ones that are still active, and we're going to be developing and adding. Slide 23. So the two most active for us and the ones that the two that have the most energy are the WaterSound Town Center, which is in front of Watersound Origins, and then West [indiscernible] Center, which is in front of Latitude. So I'm going to show you a little bit more detail about each 1 of those 2. So Slide 23 shows the WaterSound Town Center. We have 400,000 square feet planned. [indiscernible] square feet completed. So that's about 39% of what we have planned is completed. And of what's completed, are -- we have 98% leasing occupancy. So that's a pretty good number, 98%, that's nearly 100%. You can see in this site plan, the buildings that are shown in blue are completed. So those are the buildings that comprise 155,962 square foot number. We have one building shown hatched in blue and white diagonal lines. That's a building that we have completed the shell, and we're currently in the process working with tenants to do the tenant improvement. That building was essentially pre-leased before we [ finished ] the shell. And this is one of the buildings where we're, kind of, focusing on national apparel brands. We -- like I said, we're getting a lot of phone calls from those retailers and they all want to be, kind of, together. So there's going to be -- we've announced some. There's a lot of others we haven't announced yet, but we're pretty excited about the energy that we have with those retailers in the WaterSound Town Center. So the two buildings shown in orange or red, those are two buildings that we're currently in design permitting, and we're going to start construction of those two buildings this year. Slide 24 is the West [ Bay ] Center. So the orientation of this one because we try to orient everything north to south, but this is a long rectangle. So this is oriented differently. So the north is to the left of this site plan. You can see State Road 79 right at the top. And Latitude is essentially to the West. So it's kind of down the lower part of this site plan. So this one has a lot of energy right now. So we have planned this for 500,000 square feet. We have about 15,000 completed. We have 84,000 square feet currently under construction, or planned to be construction in 2026. So you can see, in terms of the color convention, the dark blue at the very top or the left-hand side of the site plan, doors are completed. We have that L-shaped building with diagonal lines similar to the WaterSound Town Center building. We completed the shell. And then we're currently working on tenant improvements in that space. We've got pretty good momentum pre-leasing that building. The orange, or red, are the buildings that we have already started construction or we're going to start construction before the end of the year. Obviously, the big one, which we announced a few months ago is we started construction of the public, which has been long [ anticated ] in the Latitude community. And I believe we may be pouring footers this week, or next week of that building. So the progression has been going very, very well. It's a footprint. That [ publics ] is very similar to the [ publics ] here in front of the WaterSound Town Center. So it's one of the bigger publics footprints. We enjoy a great relationship with [ Publix ]. We deal with them directly. We don't have a broker or middleman. We affectionally refer to them as [indiscernible] They've been a really good partner with us. And they're our top grocery store for our communities. The one thing I wanted to mention, too, that is 500,000 square feet, we also have a portion to the South, the extreme south portion of this master plan that we can do an additional 200,000 square feet. So this will be a total of 700,000 square feet, which is a lot. Just to give you a sense of scale, if you're familiar with [indiscernible] North where we have [indiscernible] in Fresh Market as our anchor tenants in the end caps, that's 320,000 square feet. So this is 700,000 square feet. So the growth potential of this center is pretty significant. And we are not planning it and designing it as a big power center with a big building. We want to create that [ Village ] walkable field. So as you can see from this site plan, we have a Boulevard road plan with on-street parking, smaller scale buildings fronting on that Boulevard, and then parking in the back of those buildings. So this has tremendous potential, and this is one that we can very easily throttle up as [indiscernible] continues to grow. So Slide 25. Speaking of Latitude. So Latitude is an unconsolidated joint venture. And it's a unique joint venture. So last year, we broke down the components of the cash flow to explain how it works. And this is an update of that slide. So Latitude. We have 3,700 homes that have been planned. 2,273 are completed as of the end of the first quarter. So that's about 61% of the homes are completed. The initial capital contribution of each partner was $11.7 million. And then earnings for each partner have been $92.1 million. That, and compared to last year, March 31, 2025, that number was $67 million. In addition to the cash flow generated from the actual operations in transactions, we have also been paid for a contribution of the raw land, $22.3 million. That's on top of the $92 million. So it's got some moving pieces to it. But you can see while we made the decision do this joint venture as opposed to just selling the land. We had just sold the land to a builder, the cash flow and the monetization of that would not have been anywhere near what this is. So we've been very happy with this joint venture. We've been very happy with the community. We think it's a great community. I was there Sunday. It was driving around, and there was a lot of happy people in golf carts. Eating and drinking and having a great time. We're very happy with our partner. [indiscernible] has been an exceptional partner. So something that I wanted to show this year when we made the decision, when our Board of Directors made the decision to move forward with this joint venture, we were focused on the cash flows, obviously, which, by the way, the reality has far exceeded we had originally projected, what we had in the original pro forma. So cash flow was the core reason why we made the decision. We also had other reasons why we made the decision to move forward with this joint venture. At the time, this land was literally in the middle of our sector plan and had the least amount of energy that was just pine trees everywhere. There's nothing going on. And we made the decision to move forward with joint venture, again, in addition to the cash flow that we thought it would produce because we wanted to energize that part of our landholdings, and [indiscernible] has done that. So when we made the decision on the Latitude joint venture, in addition to the cash flows, we were thinking about 3 different things. So that energy of consumers and homes that would generate demand for our Commercial segment, West Bay Centre, which I kind of gave you a snapshot of that. That was important to us because that was an investment we're making in a joint venture that has great cash flows. But in addition to that, it's creating consumers that we can monetize in our commercial segment. Similar in our Hospitality segment, as everybody knows, we're working on it really tremendous marina concept intercoastal waterway. It won't just be open to Latitude residents, but we anticipate a lot of Latitude residents will take advantage of that marina. And then the third component is business services. As you've seen in our -- over the last year in our earnings releases, we've been talking a little bit more and more about what we call our asset-light businesses. WaterSound Real estate, WaterSound Insurance Agency, and WaterSound Title Agency. All 3 of these benefit significantly from this joint venture. And we're constantly thinking of adding business services to this group, and we have several in the works. So it's something that we're going to continue to add over time. The thing that's out here, that's also a reality latitude by creating energy in that part of our land holdings was also energy for projects like [ Pigeon ] Creek, right? If [indiscernible] wasn't there, it would have been very difficult to execute a contract with [ Pulte ] Group for Pigeon Creek. So that's another secondary tertiary benefit of this joint venture. And I would also argue Ward Creek has created some energy also because of a Latitude. So the last thing I want to go over is the -- what we call the virtuous circle of value creation. We show this last year, and I want to show it again because this is not just a onetime thing. We show at an annual meeting, we live this. Every day, we kind of think about this. And when we make decisions to invest in the project, we're constantly thinking about, obviously, the cash flows, the financials of that project. But we also think about how that project benefits other parts of the company. So the front part of our company is our hospitality segment. It's amazing how many people get introduced to the region, get introduced to the company, get introduced to our communities because they stay in one of our resorts. They stay in one of our hotels. So as we have guests in our hotels that exposes the visitors to the lifestyle, the WaterSound lifestyle in the high quality of life we have in our region. So it creates demand for our residential communities, our residential communities or apartment communities. And then when those communities get going, it creates a customer base for the hospitality assets. When it gets exposed to our region and one of our communities by staying in the resort, then they decide to buy a home in one of our communities. Then when they buy a home in one of our communities, they decided to join our club. That also creates a customer base for the commercial town center tenants, right? These are consumers that commercial tenants covet. And that allows us to invest in our commercial segment. our town centers, medical space, office space. Then of course, then those commercial town centers become amenities for our residential communities and enhances the quality of life of the residents in those communities. Then those commercial town centers in those commercial spaces, they also enhance the experience for our hotel guests, our resort guests. Because there's more things to do when they're here. More places to eat, more places to shop. And of course, our hospitality segment, our guests in our hotels become consumers, customers for our commercial segment. So this is the way we think of the company literally every day. We think about this every day. It's not just a slide that we put together for the annual meeting. And for those of you following online, we're animating this. So we're introducing -- every time I talk about these components, one shows up one at a time. It's a lot easier to see than the presentation that you're seeing online [indiscernible] just one graphic. As this virtuous circle is happening, it's also creating a need for public infrastructure is creating jobs and it's accommodating population growth. And this is the really most important thing that the shareholders that understand our company the most understand this one point the best. All this is creating value, is driving value for all of our joining land lands that we own around these properties. That's not captured in the financials, but that's a very significant component of the company. As the virtuous circle is happening, we're growing revenue. We're growing income. We're growing our communities, our commercial town centers is driving the value up of all the adjoining land that we own. That's really important for everybody to remember. And that concludes our presentation. This is the non-GAAP reconciliation for EBITDA, and then, of course, I'm not going to read the disclosure that our General Counsel does such a great job with every year. So with that, I would love to open the floor up for questions.

Hello. As a resident of latitude and with the influx of the other communities along that highway 79 corridor, many of us are wondering if St. Joe has the interest in golf course development?

We're always thinking about everything. That's really the short answer. And we've thought about golf in different regions of our land holdings, and that is one of them.

[indiscernible] also. What's going on with Marina, it's pretty much [indiscernible] last 12 months.

Yes. So we haven't obtained all the permits yet. So the sand still is what it usually is government. We have obtained some of the permits and [indiscernible] work that you've seen. We're going to move forward with another component of it, and we're going to start doing that pretty soon. And once we get all the final permits, then we're going to go full steam ahead.

First off, I just want to thank you and the team for all you've accomplished since the last meeting and also all you're doing to prepare for the future. I do not have a real estate background. So it would help for me if you would share your thoughts. I really like that slide on the commercial leasing pipeline. The role of people and partners to make the most out of that pipeline.

Absolutely. So we do have partners, joint venture partners. We do have some commercial assets that are part of the leasing portfolio that we have partners. We usually bring in partners because they have a particular expertise, they have relationships. It's usually not because of capital necessarily. So we try to be very thoughtful about. Is there a partner that we can partner with in any segment, but particularly the commercial leasing segment that can bring value to us in ways that we can't create ourselves. And if the answer is yes, then we're going to move forward with creating a joint venture and partner with that entity. We always have a couple of those going on, and we have a couple of those going on right now, with partners who are really experts and have a lot of relationships and a lot of expertise in specific lanes of that industry. If we can't find a partner or we think the value we can add by ourselves is the value that's needed at that location that we'll move forward with that by ourselves. So WaterSound Town Center, for example, is one that we've been doing on our own. And we did reach that threshold where now national retailers, national air brands are calling us. For a while there, we were -- we tried different ideas about how to kind of get that momentum. Now we have it, and we're going to be executing that. And in our town centers, we don't incur any project debt. So we don't have to discount lease rates because we have an anchor in any of those buildings. So we charge full rate from the very beginning. And usually, they're pre-leased before we start construction. So it's a really nice portfolio that's going to aid very well over time. More questions?

Yes. name is Mark, and I'm also a resident in Latitude. I've got a couple of questions. an easy one. So you mentioned home sites under contract around 3,200. Is that between you and the developer? Or is that with the consumer, those 32?

No, that's with our builder partners.

With the developer [indiscernible] okay. And then there's been mention of a second area of Latitude. Any comment on how that's progressing or if that's still in the works?

Yes. And we've mentioned early on that if the community was well received and was successful, which by every measure, it has been that we would try and continue that relationship, and we have been in discussion with our joint venture partner about the kind of next phase to the West. There's nothing to report yet, but we have been in discussion, and we've made really good progress.

And then my last question on Pigeon Creek, with Pulte. Any insight as to what that development is going to look like? Is that going to be more under 55 and will there be infrastructure for schools that's going to come along with that down the road if so?

Yes. So Pigeon Creek is not going to be an age-restricted active adult community. The only community that we have for that is Latitude. So Pulte group is still working on the exact product lines, but they're going to have probably 4 different product lines, not age restricted. Appealing to a wide range of consumers that could be appealing to retirees, although it's not age restricted, not going to be themed that way. They could be appealing to families. So it's going to be a pretty broad range. So probably the closest thing, this is just my perspective, and I'm certainly not speaking for [ Pulte ] is something similar to Ward Creek. When you look at Ward Creek and you look at the broad range of product type and demographics. There's retirees there. There's families there. There's a mixture of both. It's probably going to be very similar to that.

[indiscernible]

Yes. Ward Creek to us includes D.R. Horton on the East side, Fisher Homes and [indiscernible] on the West side and [indiscernible] Brothers on the West side too. And in terms of schools, we're always working way ahead of years ahead with our respective school board superintendents, tracking demand spatially working with them on needs that they have for additional schools. We're usually way ahead by the time you see school break ground, we've been in discussion with that school district for 5, 6 years.

If that second phase of the latitude what happened, are the economics with [ Minto ] the same? Or is that part of your discussion?

It's part of the discussion.

And then I guess a follow-up would be, is there any appetite to do another joint venture elsewhere? Or was that just kind of a unique -- like you said it was [ Pinetree ] time and you guys got, obviously, a great deal on that. Is that something that you would entertain in the future in another area?

For age restricted?

Yes.

Yes. The future is a long time away, right? So we're always open to aiming. But right now, our focus is on just that one in terms of a joint venture for age-restricted community. It's been very successful. We wanted to continue to be successful. And if there's opportunities in the future, we'll certainly look at those.

Jorge [indiscernible] got a quick question [indiscernible] off of what he was talking about. [indiscernible] out the area has kind of blossomed and you've brought in a lot of new national [indiscernible] the opportunity to either do something with Minto and other people? Or just open that, I guess, West [indiscernible] Creek DSAP up a lot of the other builders that are now here that have 55-plus communities in terms of the product offering to maybe enhance what we're getting out of it?

Yes. We're always -- we have 18 active builders. And at every moment in addition to those builders that we report that are active in our program, we're in discussion with 5 to 10 additional builders. So yes, short answer is yes. We're in discussion with builders on a daily basis almost that want to come into the market. It takes a process and some time to find a space for them. Because, remember, we have the 1- to 2-year seating cycle for development. And depending on when they come in and start talking to us, there may not be a lane for them right away. But we also try to put a lot of thought into where we put them relative to our existing builders. Because we don't want to just recklessly think of, well, we're going to add 5 more builders, let's put them in here. Then the builders that are there start cannibalizing each other, right? And then there's a race to the bottom in terms of margins. So we try to be very thoughtful in where we place the builders, so they're complementary to the other builders in that community. So yes, we're constantly talking to many other builders that want to come to the market, but that's a process of both them and us being thoughtful about where we're going to place them.

Okay. Then last one. I know I've asked you before on it. But is there any update on the 30A West project [indiscernible], I've seen the drawings for it. It looks beautiful, but I also look at that and think that, that could represent a large chunk of stock being bought back, if we chose the only different route. I was just wondering if there's any update?

Yes, excellent question. So we're always in discussion and we're still in discussion on that project. But to your point, we're always calibrating the financials of any project, whether it's a joint venture or a project we're doing ourselves with calibrating it with a broader capital allocation, right? And projects, and there's an ebb and flow, right, because market conditions change, cost of construction changes. And we track that over a long period of time. And if we think it makes more sense to allocate capital in other projects, or buy shares back, or continue to grow a different program. We're going to do that. And that project is one that we've been in that process. We don't just -- once we conceptualize a project, we just don't put blinders on and go, right? We're always calibrating it just to see where it is. And that's certainly one of those.

Has there been any discussion on the, I guess, you could call it the noncore 13% of the acreage and what to do there? I know in previous meetings, that's been brought up about maybe Timber sales again, or something like that. Has that been discussed at all?

Yes. We do. And essentially, I call it our land holdings on the east side of the Big River, on the east side of the [indiscernible] River. Where we have a concentration of land ownership is in Lyon County, for example, in Tallahassee. And we obviously have a project that preceded us, Southwood that was done in that community. In Southwood, we made a strategic decision many years ago that we would not invest in developing home sites. We think it makes a lot more financial sense to invest here because we have growth here. We have a migration. We have higher margins. So what we're doing in Southwood because it does have master infrastructure, is we're selling tracks of land to builders. So we're not investing any capital to develop home sites. We're selling tracks of land with entitlements. And then the builders will build the infrastructure and build the homes. That's what we're doing in Southwood. We've done that also outside of [indiscernible] County. You may have seen we've had 2 or 3 land sales over the last couple of years to builders. We sell the land to them. They put the infrastructure and they build the homes. We're going to continue that strategy. We don't have any perspective of investing capital in that market. So we're -- I often say we're -- we don't sell a hand. We're a picky seller of land. And that's really [indiscernible] [ Golf ], right, in Lyon County and some of the surrounding counties that we have some land. At the right price, we'll sell it. And that's key because we do get to your question about Timberlands, would we sell Timberlands in that market, we would. But now that the company has grown and our financials have grown, as you have seen, we don't have a sense of urgency to sell that land at a low price. We get offers from folks, and they're their lowball offers, we don't even respond. I think, are we on time? Maybe one more question. Of course.

Could you talk, Jorge, it's less of a question, but talk a little bit about health care facilities in the area because as we grow our -- all the people that are moving in what's going on with health care, medical facilities and the new hospital that's under construction?

Absolutely. So great question, not just because you're a director. So health care to us is as critical to quality of life as anything else. It really is without good health care, it's hard to have high quality of life. And it's not just for one demographic, it is for the entire demographic. And we have great health care providers in our region, all of them are tenants of ours. We've enjoyed the relationship with them for a long time. They're great folks, great companies. But as our region has grown, we need more of everything. More of everything when it comes to health care. We need more general practitioners. We need more specialists, we need more diagnostics. We need more of everything. So one of the -- a big bold idea that we had many years ago was to create a medical campus, where we would target an academic health center model. In academic health center from all the research we've done is the most successful health care delivery system in the country where the synergies between teaching, research and clinical delivery really come to fruition. Because the days of doctors [indiscernible] being in business, those days are kind of in the river mirror. Doctors tend to be employees of large for-profit health care companies like HCA, large profit health care companies like Ascension, or employees of academic health centers. And there's many examples of academic health centers. And they're usually the kind of the -- one of the main economic engines in that market, right? Whether it's UAB, right, [ Shands ], NYU. So we created that vision. We [indiscernible] plan the campus, and it's the campus at the southeast corner of [ 79 in Philip ] [indiscernible] Then we engage in a series of very -- these things are not easy, right? These are big bold ideas. We engaged in a series of discussions with many potential partners. And those discussions have kind of landed in the first phase of that campus. We opened a couple of years ago, the medical office building that's there and it's full of clinicians already and really high-end outpatient surgery center that has already been opened. The second phase is the big deal. The second phase is an actual teaching hospital. We've been working on that very hard with our partners. Again, nothing that has value is easy. But we're there. That hospital is you drive by it, you can see the construction. We anticipate that hospital is going to be open middle part of '28. The hospital has been master planned and planned for future expansion. Phase 1 is going to be probably 100 to 150 beds. That hospital has been planned for almost 600 beds. And with an ability to add wings very easily without disrupting the core operations of the [indiscernible] So that's an asset that's going to be under FSU Health. So Floor State University, their College of Medicine. Their research apparatus, which is very robust. They're going to [indiscernible] asset and it's going to be a full-blown teaching hospital. We're going to have residencies there. That's the plan. That's really important to me. It's really important to our region because we're a dock to residences where they tend to stay. It's not where they go to medical school and for us to eventually have -- it's not going to happen right away. It's going to take a little bit of time. But for us to have a reoccurring pipeline of residencies that go through that teaching hospital is pretty significant because that's reoccurring, right? That's -- those are not physicians that you have to recruit. The goal of this academic health center is to bring resources from outside of the market, right, bring doctors from outside of the market. And I can't tell you even though all the final mechanics of the deal structure are still being finalized, so there hasn't been a lot of branding that you've seen, right? You drive by there, you don't see FSU Health that's going to change pretty soon when they finalize all the agreements and all the mechanics. But even with very -- with no branding and really very little kind of external indication, I can't tell you how many club members of ours where physicians in Atlanta in Houston, in Nashville call and say, hey, let me know about that because I may have an interest in moving and being in that facility. That's without any effort, right, without any recruitment. And I get those phone calls on a regular basis. So that, in a way, kind of [indiscernible] the water, proving the concept, right? So we're pretty excited about that. It's not just something we're doing to help sell more homes at Latitude. I don't think we need that help. It's something for the community, right? It's a community asset that's going to help every single demographic in the community, and it's a really big deal. I think we have time for one more question. I think you had your hand on.

[indiscernible]

Yes, it's beyond ongoing discussions. We have finalized -- it's a ground lease, and that's been finalized. So we expect to see kind of physical progress on that over the next few months a year. Okay. All great questions. I really appreciate it. So you may continue with refreshments in the terrace. The reception that Waterson Beach Club will begin at noon, concluded at 1:30. Weather-wise, where are we? Are we still good? Okay. So have refreshments in the terrace. We'll have the reception at the WaterSound Beach Club. We have a new second story deck that we just opened, and that's where we're going to host reception. So everybody can see it. We'll start that at noon, conclude at 1:30. We'll have shuttle service from here to the reception starting at 11:30. You can drive yourself too to the [indiscernible] of course. There's no formal program. It's going to be just informal, so you can see the new deck. The shuttle back here will be at 1:20 and 1:40. And then we also -- for those of you, there's always a few of you that want to take a self-driven tour. We do have a nice asset map, I think, outside on the front desk that shows all the different properties, different locations. You're welcome to do that. We decided to take a break from the driving tour this year. We have been doing it, I think, 3 years in a row. We're probably going to start it again next year. This year, we thought we would do something a little bit more casual since we opened the new deck in the Beach Club. Everybody good? Great. Thank you for coming. I really appreciate it.