Good day and welcome to the St. Joe Company Fourth Quarter and Full Year Earnings Release Conference Call. This call is being recorded. Currently all participants are in a listen-only mode. You'll be given a chance later to ask questions. Directions will be given at that time. At this time, I'd like to turn the conference over to the Chairman and Chief Executive officer, Mr. Peter Rummell. Please go ahead sir.

Thank you and good morning. Welcome to the St. Joe Company conference call for 2007's fourth quarter and full year. I'm Peter Rummell, Chairman and CEO of Joe and joining me this morning are President and COO Britt Greene; CFO Bill McCalmont and Chief Strategy Officer, Chris Corr. Before we begin, let me remind you about forward-looking statements. Matters discussed on this conference call are not historic... that are not historical facts are forward-looking statements. Such statements are based on our current expectations and actual results may differ materially. Forward-looking statements are subject to certain risks and uncertainties that are described into today's earnings release and in our SEC filings which are on our website at joe.com. If you want a copy of these materials, you can request them through the joe.com website. The headlines for the morning, our results for the fourth quarter and the full year clearly reflect the continuing difficult conditions that exist in Joe's Florida markets, including Northwest Florida. As we reported this morning, we had net income for the fourth quarter of $1 million or a $0.01 a share compared with $22 million or a $0.30 a share for the fourth quarter of 2006. For 2007 in total, Joe had net income of $39 million or $0.53 a share compared to $51 million or $0.69 a share for the year before. For both the fourth quarter and the full year, Joe had several charges and write-downs that impacted our performance and those are detailed in our press release that was put out this morning. As we prepare for the traditional spring selling season, Northwest Florida's resort and residential real estate markets remain very weak. Commercial markets are somewhat stronger, and the demand for rural land remains steady. During this period of uncertainty, we will remain…

Thank you, Peter. First I'd like to say that Peter's leadership has certainly provided an extraordinary foundation from which Joe can continue to build and personally, I look forward to Peter's continued engagement as we explore new corporate strategies to leverage, not only our core competencies but to create future value for the benefit of our shareholders. In addition, Peter's extensive relationships and contacts will continue to be a building block for us to use. So with that Peter I appreciate the comments. Restructuring let me review the implementation of our October plan. It is important to remember we start with extraordinary assets. As a result of our efforts over the past 11 years we've assembled a large well located portfolio of entitled lands. Our catalogue of entitled assets range anywhere from a 1 acre commercial corner to a mile of resort entitled beachfront, for Marina sites for hundreds of flips to thousands of commercial acres adjacent to a new international airport under construction. Our restructuring plan announced in October calls for Joe to focus on harvesting in our non-core assets, strengthening our balance sheet and streamlining our operating structure along with leveraging our strength with strategic relationships and working to induce and stimulate demand across the North West Florida region. As part of the plan, Joe announced it was going to market for sale of approximately 100,000 acres of non-strategic rural lands. By the end of the year, Joe had closed on sales of more than 18,000 acres for a total of approximately $28 million. Joe currently had contracts on multiple parcels totaling approximately 28,000 acres for an aggregate price of approximately 52 million. And it's continuing to... we have conversations with several parties on an additional 90,000 acres. We continue to develop new real estate sales channels including…

Thank you Britt. We continue to make good progress implementing the financial aspects of our restructuring plan. We are continuing to execute on our disciplined strategy of significantly reducing capital expenditures, meaningfully decreasing SG&A expenses, divesting non-core assets, and focusing on aggressively lowering company debt. As part of this commitment, we are working to identify the most favorable and flexible financing alternatives. With respect to CapEx, we continue to evaluate our deployment of capital. Capital expenditures have been significantly reduced in our focus on Joe's growth assets, many of which we intend to develop with strategic partners. We currently expect capital expenditures in 2008 to be less than $90 million and even lower in 2009 and that compares to approximately $250 million in 2007 and over $600 million in 2006. Turning to the balance sheet at December 31st, Joe's debt was approximately $541 million including $31 million of debt defeased in connection with the sale of our office building portfolio as compared to approximately $627 million on December 31st of 2006. At the end of the fourth quarter, we had approximately $348 million of available capacity under our $500 million revolving credit facility and approximately $55 million of cash and pledged securities on our balance sheet. As you know, Joe is committed to strengthening its balance sheet. To that end we are working to ensure that we had the maximum financial flexibility and we are weighing a number of alternatives including the negotiation of amendments to our bank credit facility and our senior notes as well as capital market transactions. As we communicated in the last call, the process is underway and it will take time to complete, but the key is doing what is best for Joe's balance sheet in the long term. This approach requires us to consider a number of alternatives and then make a decision on which one to pursue. The good news is that we had the process well underway and are pursuing several initiatives simultaneously, well in advance of any need. Back to you Peter.

As Britt and Bill have both described, we are taking the important steps to streamline our organizational structure to focus more efficiently on planning, entitling, business-to-business relationships, infrastructure and economic development initiatives, all aimed at inducing and accelerating demand. For now and we think the foreseeable future, [inaudible] real estate markets are facing challenging times. Resort and residential markets are as tough as I've seen in my 37-year career. And there is no clear indication of when those market conditions are going to make any dramatic change. But longer-term, which is an important focus, we continue to like our position. Joe's strategic position is one that cannot be duplicated. [inaudible] land, a lot of it in Florida, all in one region ahead of the baby boom combined with a proven core competency expertise and know-how to transform that land into value. And while we have been on this conference call, let me remind you that construction continues on the first new international airport in the nation since DIA was built in Denver. With that I'll be happy to respond to your questions. Question and Answer

Operator: [Operator Instructions] We will go first to Chris Haley of Wachovia.

Good morning. Good growth rate, congratulations.

Thank you, Chris.

Peter, good luck. Bill, I want to see if you could help me out, the way we look at your third quarter and then fourth quarter expense run rates, excluding the margin or… pardon me, the marginal expenses related to home sales and site sales. If we exclude that, and we look at your operating structure at around $35 million annualized of the fourth-quarter run rate, could you give us a sense as to where you see that in terms of kind of your cost to run the business without residential sales?

Well Chris, I may not answer your question exactly, but when we had our last call we talked about SG&A expenses declining 20% year-over-year as a result of our October 8th restructuring announcement. Of course those expense reductions are not reflected in the current quarter.

Okay.

But going forward, as we look into 2008, we are well on track to meet those targets and frankly, I'd be disappointed if we didn't exceed that target rate.

And that was just SG&A, though.

Yes.

Okay. All right, related question, though we can work offline in terms of the overall expense run rates, but I'll be interested in your discussions, Britt, with various land investment entities, whether they be infrastructure, as you call them relocation enterprises. Has there been a higher pace of interest from certain types, say, we just this morning announced... iStar announced a $1.7 billion sale to the [inaudible]. I'll be interested in your perspective there, not much about that transaction but what's happening at the timber [ph] or investment organizations?

I wouldn't say of all the entities that we've talked to Chris that in the rural land sales is they are still active, it is strong, the interests are strong, and we haven't seen any deterioration in the pricing on the acreage side. So, I think it has been, we've been... it's been well received and Bill, you want to?

Yeah, and Chris, the matter of fact that the price per acre that we reported in the fourth quarter was the highest price per acre in any quarter of 2007, which I think is indicative of the number of buyers and the diversity of the buyers.

The only thing I would say, Chris, is you don't get too focused on [inaudible], the world of buyers is a very eclectic group. There are a lot of people with lots of different motivations and different financial backing. It's dangerous to stratify it.

Needless to say we're pleased with the response when we released products in terms of world land sales.

Last question Britt, you mentioned demand creation strategies and you would be targeting specific industry groups. Could you expand upon those industry groups or give us some color as to what they might be?

Well, we are focusing in the area, specifically on some core clusters of industries that surround not only the military in terms of aerospace and engineering, but along with that other cluster companies and industries that are prevalent already in the area of Northwest Florida, and want to build on that rather than trying to go out and entertain new industries to move them into the region. So, really the focus over the next few years is going be taking what's there and trying to build on that if not only as it grows, but [inaudible] branching off of that. So, along with... obviously we have a tremendous amount of commercial entitlement in the region and not only just from a retail and office standpoint but from an industrial opportunity.

Thank you.

And we will take our next question from Sheila McGrath at KBW Investment Bank. Sheila McGrath - Keefe, Bruyette & Woods: Thank you. My question is regarding the airport, if it's on track for opening in 2010, when do you think airlines... new airlines would connect to servicing the new airport and when do you think you would start looking to announce strategic relationship with other developers?

Well, it's on track for a spring 2010 opening. We have... there have been lots of conversations Sheila, as you can imagine, over the last few years and one of the thing we've learned is that without an airport under construction it's pretty hard to have a definitive conversation. So, we are now in a phase we haven't been in before. I think our experience is these guys play their cards pretty close to divest. And there is a surprisingly... for a commercial airliner, there is a surprisingly short lead-time between when they announce things and when they actually do it, just for a competitive reason. So, it's not a multi-year effort as you might think for industrial users who need to build things and so and so forth as opposed to having a terminal built for them and it’s a longer-range and those conversations are really just starting. We really are just now at the point where with DIRT moving we can have definitive conversation. So, I think let the games begin, I'm hesitant to say that you're going to... we are going to have anything in 60 days or 90 days, but the intensity is dramatically more than it was six months ago. Sheila McGrath - Keefe, Bruyette & Woods: Okay. And with the new Governor in Florida, is there any indication that this administration would be more willing to help incentivize corporate relocations to Northwest Florida?

Well, that's a good question. Jeb was kind of famous for not and I think Governor Crist is probably a little more open to that than... well, anybody would have been more open to it than Jeb was, but... and I think that combined frankly with the fact that he doesn't have the wins at his back that we’ve had for the last several years. So, I think you may see more of that. I don't think Florida is ever going to be in a position of some other states just because there is so much organic growth. But, difficult times probably are the mother of invention. Sheila McGrath - Keefe, Bruyette & Woods: Okay. Thanks a lot Peter.

And we will take our next question from Buck Horne of Raymond James.

Hi, good morning guys. I was wondering about the 90,000 acres you guys currently have marketed, is there anything about that land that would lead to a transaction price materially different to what we've seen over the past 18 months?

No.

No?

No, you can... it is more the same.

It's made up of multiple particles in variety of locations.

One of the misunderstandings is it's not contiguous, it's all over the place.

Okay. Great. And kind of strategically, of the total rural portfolio you have ultimately, what do you envision trying to monetize over the next year or two?

Well, we've talked about the 100,000 and that's where our focus is and I think beyond that would be speculation at this point. Do you want to add to that, Bill?

No. In the press release, we identified more than 100,000 acres obviously not all that will close, but we're taking... we're focused on that 100,000 acres and then we'll reevaluate the [inaudible].

Okay, great. Just one last one, how many homes did you guys have either finished or in construction, left for sale at the end of the period?

We had a 190 homes left, some of that, about 31 of those are condos that currently in its final completion stage at WindMark Beach. So out of the 190.

Okay, great. Thanks guys.

[Operator Instructions]. We will go next to the David Cohen at Morgan Stanley.

Congratulations, Britt and Peter. Can you just talk a little bit about what was the process that drove the Board to kind of make this decision or what you were thinking Peter in terms of going forward?

Well, we have been talking about it for sometime. I have been here over 11 years and I think there is a... I think we all agree that there is a time to come and a time to go. And Britt has been here for 10 and this is something that... this is something, this is a process we are really pleased with. There is just a natural time, there is rhythm in the company in terms of when things are happening tat right now, and I think the Board agreed with that. So it's… our goal was to make it a non-event in terms of trauma and in fact I think we are succeeding in that and it’s ready to go. So there's no hidden agenda here, there is no... nothing beyond that. Anybody want to… you want to add to that?

No.

What you see is what you get.

It was a good process.

And Britt, you have obviously been involved in all of these, the restructuring. Is there anything else that you think you'd put on the slate in terms of strategic goals for the firm?

Not at this point. I think we have our plate full in terms of dealing with the market and trying to move value for the shareholders and take care of monitoring our capital needs and our debt reduction. So I think that's a pretty good slake for '08.

Okay. I noticed on the 8-K, that you have some new I guess columns changing commitments where I am seeing some, I guess lots taking out of some buckets, maybe being put into some other buckets. Can you just talk about… little bit about... is this... for example David Weekley Homes at Hawks Landing has… there was a change in commitments of 39, are they... is that like... are they walking away from those commitments or is that just kind of a reallocation. How do I think about that?

The way to think about that is, David, Weekly closed on 50 homes or 50 lots in '07, and given the pace of absorption, didn't feel ready to take the next 39. So we decided that it was most prudent for us not to beat up a good partner and there is still positive about Hawks Landing, sales have been good and it give us an opportunity to get 39 lots back, that we could remarket to the local builders and other regional builders at literally a higher price, because Hawks Landing has increased in value. So there is an opportunity for us to get some more lots back and remarket at higher price and it gave David Weekly some breathing room, being that he had taken down 50 already. With regard to Beazer at Breakfast Point and their changing commitment, there… that was because we decided that Breakfast Point, it was a great project, it's a large developmental regional impact and it was... it's primed for a business-to-business discussion with any one of a number of entities that we are currently talking and rather than hold them and their deposit on a contract not knowing with the ultimate development timeline is for Breakfast Point, we decided we would… we actually were the ones who terminated their contract in advance of having the B2B discussions and then in advance of RiverTown they were an early adopter on River Town and frankly the Jacksonville market has slowed a little bit and while we are on pace at RiverTown with four builders, again the market changed for Beazer and that was 39 lots and essentially have covered that with four other builders and let them out of their contract negotiation. And in the fourth quarter they turned around and closed on a 118 lots in Phase I of Laguna West. So while there is an ins and outs there, I think it's mostly conscious about what the market conditions are, being a good partner with these builders, and not trying to push product across the table when it's not appropriate. We get some in some cases and we give some up in some cases but it balances out to be a positive [inaudible].

Okay. Just a final question. You talked a little bit about just the increasing financial flexibility through a variety of alternatives. Can you just talk generally about what it is that you might be considering?

Yes. I think we've mentioned that we are considering a number of initiatives simultaneously. The good news is there is no near term timetable, the process is underway. I'd also point out that in the press release we made mention of the land that we have under contract as well as land that’s in negotiation but not yet under contract, which will obviously provide substantial revenues and earnings to the extent they [inaudible]. So we tried to give you some feeling for what's in the pipeline relative to those large track land sales, the 100,000 acres we previously discussed. But with respect to other alternatives, we continue to consider those opportunities and options and I think we would be remiss not to.

Great, thank you.

And your next question is a follow-up from Chris Haley of Wachovia.

Two, may be going out little bit more in terms of the interest calculations. As we progress over the year, obviously we see a fair amount of capitalized interest during quarterly periods. Is it fair to say that the… we simply used the 6% in the average cost of debt against the 500 plus million of debt to really look at the denominator in the interest coverage calculation, Bill?

Well, the 6% interest cost in the fixed rate debt is accurate, the bank facility as well as the term loan is based on a LIBOR spread and with current rates that is probably closer to 4%, Chris.

Okay, all right. Okay, good. That's it, thank you.

Thank you.

And with that, that will conclude today's question-and-answer session. I would like to turn the conference back over to Mr. Rummell for any additional or closing remarks.

Great, thank you. Thank you all very much. Thanks for continued interest and support and we will look forward to either seeing you or talking to you in May. Take care.

This does conclude today's presentation. We thank everyone for their participation. You may disconnect your lines at any time. Have a wonderful day.