Good day and welcome to the St. Joe Company Fourth Quarter Earnings Release Conference Call. This call is being recorded. Currently all participants are in a listen-only mode. You will be given a chance later to ask a question. At this time, I would like to turn the call over to the Vice President of Finance, Mr. David Childers. Please go ahead sir.

Good morning and welcome to the St. Joe Company's conference call for 2008 fourth quarter and full-year results. I'm David Childers, Vice President of Finance and Investor Relations. On the call this morning are Britt Greene, our President and CEO; and our Executive Vice President and CFO, Bill McCalmont. Before we start, let me remind you that matters discussed on this conference call that are not historical facts are forward-looking statements that are based on our current expectation. Actual results may differ materially. Forward-looking statements are subject to certain risks and uncertainties that are described in today's earnings release, and in our SEC filings. These filings are on our website at joe.com. Bill?

Thanks, David. This morning, we announced a net loss for the fourth quarter 2008 of $27.9 million or $0.31 per share. This compares to net income of $1 million or $0.01 per share for the fourth quarter of 2007. Revenues in the quarter were impacted by the global economic slowdown and the ever widening effect of the credit crisis. Consequently, we experienced softening prices for our residential units and limited demand for both our residential unit and our commercial parcels. Demand for our rural land parcels remain steady, although we are carefully watching any impact that the credit crises may have on pricing or overall demand. The difficult economic conditions caused us to incur significant non-cash impairment charges in the fourth quarter, totaling $55.8 million pre-tax or $0.34 per share after tax. These non-cash impairment charges were primarily related to three items. First, we made a decision to reduce prices on the majority of our existing housing inventory to reflect current market conditions, facilitate sales, and eliminate continuing carrying costs. These charges affected 114 homes and totaled $8.2 million pre-tax. Second, we incurred $28.3 million impairment charge related to the write-down of our SevenShores condominium development and Perico Marina project. SevenShores is a condominium project, which started in 1998 on non-legacy land in Bradenton, Florida, North of Sarasota. As has been reported frequently, there is virtually no demand for condominium projects in this market at this time. It is also important to note that we have not commenced vertical construction. This condominium development project was written-down to approximate the current fair market value of land entitled for 278 condominium units. This write-down was necessary, because we elected not to invest additional capital or acquire additional land for the project under an existing option agreement. We had previously incurred certain costs…

Thank you, Bill. As Bill noted, our primary focus is preserving Joe’s unique asset base while identifying and capitalizing our future growth options. We have benefited greatly from our successful cost management and asset preservation initiatives. And as we look forward, we are also committing significant resources to the opportunities presented by the opening of the new international airport in Panama City still projected for May 2010. The year 2008 will long be remembered for the unprecedented decline of global financial and real estate markets. Florida's economy, long linked to estate cycles has suffered even more significantly. We will continue managing the business to maintain our strong cash position. We believe that that approach will provide the widest range of options, to that end we are fully committed to managing our costs. We have also stepped up efforts to move our standing home and home side inventory by reducing prices at several of our larger communities. As we look forward, let's remember that Florida is still one of the strongest brands in the world. While it remains a place where people want to visit, live and own real estate, Florida will need to aggressively compete for economic development and job creation to maintain the promise of the brand. We recognize that the world is undergoing structural change. We are evaluating our unique competitive position and how it may have shifted in the midst of this change. There is any number of possible outcomes and there is any number of possible business opportunities available to us. That’s the good news. As a result, we enter 2009 with the ability to explore the most favorable options for our shareholders. A key part of our strategy going forward is connectivity. We along with others in Northwest Florida are committed to becoming more connected…

(Operator Instructions) We will take our first question from Sheila McGrath with KBW. Please go ahead.

Hi, good morning. My first question is on liquidity. Looking at the cash balances of over $115 million, and then notes receivable, could you just walk through, are you going to continue selling rural acreage this year? And also, I thought that there was a tax receivable and I just wanted to know income tax receivable -- the status of that as well?

Thanks, Sheila. I guess yeah, we got a $115 million of cash, a $100 million un-drawn on our credit facility as we noted. And we have notes receivables of approximately $50 million. The income tax receivable at the end of the year was about $32 million. So those are our sources of primary liquidity during 2009, and we would expect to receive that income tax receivable in cash during 2009. As we look forward in 2009 for our current business plan, I think you will see us moderate our Rural Land Sales, and not focus as heavily on driving cash generation from those land sales and being prudent in managing our inventory from that perspective.

Okay, great. And then on the transportation, or on the economic stimulus packages, I was just wondering if Northwest Florida is due to benefit from any of those transportation dollars?

Well, we certainly have our eye on it, Sheila, and we expect that we would have our fair crack just like the rest of the state and opportunity there from a road or infrastructure improvement standpoint. So, I think the state is getting enough there that it can be split among the state, and Northwest Florida will get its fair share as a result.

It's obvious that we are active in promoting our interest in Northwest Florida though and that’s safe to say.

Okay. And then last question, just on commercial joint-ventures in general and also more specifically on the retail on JV that you've mentioned in the past. Could you just give us an update on that?

Sure, the venture we are still there, we are still partners. The property is still there, still entitled. But given the nature of the retail marketplace, it has certainly slowed. And while we still aggressively pursue the opportunity for a lease, obviously in this market, we think our original guestimate of when that might come to pass is probably going to be delayed further out. But we still expect that it's a viable and well-placed opportunity with that retail center. It's just going to take a little bit to get the retailers more comfortable. Sheila McGrath - Keefe, Bruyette & Woods: Okay. And then just on your thoughts on other commercial JVs, or on land sale. Should we just look for that sector to be a little bit quite in '09 or are you going to have commercial land sales, or you are just pursuing the JVs at this point?

Well, no. There are still some small commercial opportunities in each of the counties, but it's going to be slow. I think the expect is going to be anything dramatically different than '08, I think would be a push, so we expect that we will still have a commercial sales, we still are having conversations with respect to opportunities and joint-venture, but I have to say, I think the reality is 2009 given the commercial industry as a whole is just going to be tough. Sheila McGrath - Keefe, Bruyette & Woods: Okay. Thank you.

Thank you, Sheila.

We will take our next question from Buck Horne with Raymond James. Please go ahead.

Hi. Good morning, guys.

Good morning.

I just wondering if you could talk maybe a little bit more about SevenShores and kind of exactly what was written off in terms of the cost there, and how much of your original investment is now written off and maybe your thoughts on and would it be better just to sell that property now and focus more on your core Northwest Florida markets?

Sure. Buck I guess, we are considering all alternatives for that project at this point in time, what we don't intend to do is, invest more capital on that project. And as I mentioned in my introductory remarks that, that project was started about a decade ago, it was designed to encompass 686 condominium units in towers on a 193 acres with 119 wet slip marina and 30,000 square feet of commercial. And the way the agreement with the land seller was documented, we had several takedown options. And at the end of 2008, we elected not to continue exercising those options, not committing further capital to the project which limited the scope for the project to the 278 units that I mentioned in my remarks. And so, that caused us to write the project down to the current estimated share market value of 278 entitled units for development on that site. But, as I said, we are continuing to review all our alternatives. But don't expect us to invest additional capital at this time.

Okay. On the $8 million charge for standing inventory, I guess, you mentioned the 114 homes were impaired. Does that represent your entire remaining inventory of finished homes or is there anything else still under active construction?

Nothing is under active construction. Our total standing inventories are 160 homes.

Okay.

And so, we impaired 114, I mentioned.

Okay, great. And one further one, I guess, I just noticed the prepaid pension asset in the balance sheet seem to fall pretty dramatically from September. I just wondered if you could add a little color on what's going on with the pension funding and if there is any need to potentially contribute additional cash to that plan if the funding status continues to fall?

Well, our funded ratio is still 1.33 times, the projected benefit obligations.

Okay.

It did fall as a result of return on assets. Obviously, the pension fund had a percentage of its assets invested in equities, and so the overall decline in the asset value of the fund was down 22% for the year. As far as our expectation going forward, at this point we do not expect to require any funding, but market conditions will dictate that and we are prudently managing that asset going forward.

Thanks, Gentlemen.

Thank you, Buck.

And gentlemen at this time there are no further questions. Mr. Greene I would turn the conference back over to you for closing comments.

Thank you, Cynthia. I appreciate it. As we go forward obviously, we are in tough times. As we said, we will continue to manage ourselves prudently in these times. And look towards the future and the opportunity to start to create and continue to create opportunities for the shareholders. If you have any questions, please feel free to give Bill or David Childers a call, and for that we would look forward to talking to you in about 90 days and hope that you have a great day. Thank you.

Thank you.

Ladies and gentlemen, this will conclude the St. Joe Company's fourth quarter earnings release conference call. We thank you for your participation. And you may disconnect at this time.