Buy When There’s

Oil In The Water

 The Beginning
CONFIDENTIAL INFORMATION

 The St Joe Company was founded in 1936 as part of the Alfred I. du

Pont Testamentary Trust by du Pont’s brother-in-law Edward Ball.

 Prior to its establishment, the trust had already begun land purchases,
making its in 1923, acquiring cheap land in the Florida Panhandle.

 Land purchases continued throughout the 1940s and 1950s, and St Joe
eventually owned more than a million acres at “a couple bucks per acre.”

 The company invigorated the local economy following the Depression,

employing thousands at its paper mill, but ultimately exited the business
after nearly sixty years, selling the mill to Florida Coast Paper for $390
million in 1996.

 Following Ball’s death in 1981, the company began to sell off its industrial
operations and focus on land development. Peter Rummell, former
chairman of Walt Disney Imagineering, was hired in 1997 to lead their
real estate business and became Chairman and CEO.
 The St Joe Company Today
CONFIDENTIAL INFORMATION

 Britton Greene has served as CEO of the company since May 2008 and
as President since October 2007.

 The company sold its homebuilding operations and commercial real

estate portfolio in 2007. Greene has since focused the company on
securing higher and better land-use entitlements for its raw land,
facilitating infrastructure improvements, and undertaking strategic land
planning and development.

 The St. Joe Company today is the premier real estate development
company in Northwest Florida, with approximately 580,000 acres of low-
cost land, between Tallahassee and Destin.

 St. Joe owns approximately 41,000 entitled acres that allow for the
development of 43,000 residential units and over 13 million square feet
of commercial uses.

 The company also manages timber operations on thousands of acres of

rural land with 289,000 acres encumbered under a pulpwood supply
agreement totaling over 22 million tons of standing pine and over 7
million tons of hardwood inventory.
 Extraordinary Assets
CONFIDENTIAL INFORMATION

Source: The St. Joe Company March 2010 Investor Presentation

 A Moat You Can Literally Tan On
CONFIDENTIAL INFORMATION

 St. Joe’s wide competitive advantage is simply its near-zero cost land. Its
massive scale and low-cost basis is impossible for other developers to
replicate, making JOE the partner of choice for all development activity
in Northwest Florida.

 Approximately 405,000 acres, roughly 70% of total land holdings, are

within 15 miles of the coast: over 130 miles of frontage along the Gulf
and several bays; 5.7 miles of white sandy beaches; 78 miles of frontage
along the Intracoastal Waterway.

 But JOE is not a one-trick seahorse. The company works rigorously to

strengthen its competitive position by partnering with the state and
fostering strong relationships with all of the counties where it owns land.

 St. Joe is actively engaged in regional planning and often donates land for
infrastructure development to tip the scales in its favor when seeking land
entitlements.

 The company donated 4,000 acres in West Bay for the construction of a
new airport. In exchange, JOE received land-use approvals for nearly
30,000 areas around the airport.
 Knock, Knock, Knocking on Joe’s Door
CONFIDENTIAL INFORMATION

Former Panama City

Airport land recently
purchased by Leucadia

Source: VentureCrossings
 Addressing Near Term Headwinds
CONFIDENTIAL INFORMATION

 A challenging economic environment amidst a bursting real estate bubble

has proved management as a shrewd steward of investor capital. St. Joe
used the proceeds from a well-timed sale of 17 million shares of stock at
$35 in 2008, to eliminate all of its outstanding debt.

 Today, the company has ample cash, virtually no interest-bearing debt,

and a significantly leaner cost structure than prior years. JOE has no
material cash obligations due in the near term, so investors can afford to
sit and wait.

 St. Joe has exited its capital-intensive business segments, outsourced the
management of its hotels and resorts to third-party operators, and sold
off non-strategic assets, resulting in a federal income tax refund of $62.4
million, most of which will be received in the second half of 2010.

 Management aims to minimize capital expenditures for development by

partnering with third parties for new projects or selling entitled land
outright to developers or investors.
 What’s Priced In?
CONFIDENTIAL INFORMATION

 Valuation is an imperfect science at best. Benjamin Graham once

remarked that you don’t need a scale to tell if someone is overweight.
Similarly, we don’t need to know precisely how much St Joe is worth to
know that it is drastically undervalued.

 At the stock’s current Enterprise Value of $2 billion, the market is

currently valuing JOEs land surrounding the West Bay Airport (net of the
39,000 acres donated for conservation and the 4,000 donated to the
airport) at roughly $60,000 per acre. Putting this in perspective, Leucadia
recently paid $80,000 per acre for the land surrounding the old Panama
City Airport. But at $60,000 per acre today, investors in JOE are getting
the remaining half a million acres in Northwest Florida for free!!

 Alternatively, the market is valuing JOEs 41,000 entitled acres today at

under $50,000 per acre, and assigning zero value to the company’s
remaining 536,000 acres.

 What if we are wrong? In a worst case scenario, where no one is ever

again interested in building on JOE’s land, we estimate the stock is worth
around $15, assuming the raw land is sold for about $2,000 an acre.
 What’s The Catalyst?
CONFIDENTIAL INFORMATION

 Southwest Airlines announced service to the new Northwest Florida

Beaches International Airport in Q4-09.

 St. Joe has signed agreements with TranSystems Corp and The Haskell
Company to support the planning, engineering, designing and building of
infrastructure and facilities for commercial use.

 St Joe has signed agreements with CB Richard Ellis to market for joint
venture, lease or sale the land within the 1,000 acres adjacent to the new
airport.

 Initiated a significant outreach program to site consultants and

multinational corporations and suppliers within the aerospace, aviation,
defense and security industries.
 State of Florida Incentives
CONFIDENTIAL INFORMATION

Target Industries
New or expanding businesses within the Transportation Equipment Manufacturing sector are eligible to be considered
for incentives that help with relocation and expansion.

High Wage Jobs

Companies creating Florida jobs paying at least 115% of Bay County’s average wage are to be considered for incentives.

High Impact Business Performance Incentive Grant (HIPI)

A negotiated incentive used to attract and grow major high-impact facilities in Florida, HIPI grants are provided in
certain portions of Florida’s target sectors to companies who can create jobs and make a significant investment in the
area’s economy.

Capital Investment Tax Credit (CITC)

Used to attract and grow capital-intensive industries in Florida, CITC is an annual credit, provided for up to 20 years.

Qualified Defense and Space Contractor Tax Refund (QDSC)

A tool to preserve and grow Florida’s high technology employment base, QDSC was created to give Florida a
competitive edge as a base for defense, homeland security or space business contractors.

Qualified Target Industry Tax Refund (QTI)

A tool available to Florida communities, QTI encourages quality job growth in targeted high value-added businesses.

Economic Development Transportation Fund (“Road Fund”)

An incentive program designed to alleviate transportation problems that impact a company’s location or expansion
decision.

Quick Response Training (QRT)

QRT is a customer-driven program designed to provide new and expanding Florida businesses the customized training
necessary for relocation and expansion. A flexible reimbursement program, it is structured to respond quickly to meet a
business’s training objectives.

Source: VentureCrossings
 Bay County Incentives
CONFIDENTIAL INFORMATION

Economic Development Ad Valorem Property Tax Exemption

The Bay County Board of County Commissioners may provide an abatement of the local property tax on
improvements to real and personal property at the business location for a period up to 10 years.

Streamlined Permitting
The Bay County Board of Commissioners offers streamlined permitting to expanding or relocating businesses that
create more than 10 new jobs within the first 12 months after facility construction is complete.

Workforce Center Services

A one-stop shop for Bay County employers’ human resources needs, the Workforce Center offers free
comprehensive services that assist companies in their recruitment efforts and in the management of their
workforces.

Custom Packages
The County works in partnership with local and state agencies to customize incentive packages for companies
whose location to or expansion in Bay County has a significant economic impact. Such packages may include a
combination of State of Florida incentives, local incentives, cash contributions, financing assistance and workforce
development programs.

Source: VentureCrossings
The Lay
of
The Land
 Land Analysis
CONFIDENTIAL INFORMATION

Roughly 250,000 acres sold since Q1-06, primarily rural land and timber
outside the path of development

Land sales have slowed considerably but averaged

$168,000 per acre from 2004-2006. Sold 29 acres in
2009 for $6.6 million, or $227,000 per acre.

Rural land acreage covers a wide range of price

points. JOE sold 6,967 acres in 2009 for $14.3
million, or $2,050 per acre. We believe an
investment in JOE is a free option on
management’s ability to obtain higher and better
uses for this land.

Conservation Acreage also has value – mitigation credits have

been bringing in roughly $60K per credit.
Source: The St. Joe Company, May 10, 2006 Land Analysis
 Commercial Entitlements
CONFIDENTIAL INFORMATION

Commercial Land-Use
Entitlements
predominantly consist
of Commercial Parks,
valued at roughly $30
million at $50,000 per
acre.

Source: The St. Joe Company 2009 Annual Report

 Residential Entitlements
CONFIDENTIAL INFORMATION

RiverCamp development within

the West Bay Sector

WaterColor and WaterSound Developments are

JOEs primary existing resort properties. Over
the past four years, lots have averaged sale prices
from $100,000 up to $800,000 or more

Source: The St. Joe Company 2009 Annual Report

 Residential Entitlements Cont.
CONFIDENTIAL INFORMATION

Source: The St. Joe Company 2009 Annual Report

 RiverCamps
CONFIDENTIAL INFORMATION

RiverCamp Lots range from $50,000 up

to $1,000,000 depending on location

RiverCamp development within the West Bay Sector

CONFIDENTIAL INFORMATION
WaterColor
 West Bay Sector Development
CONFIDENTIAL INFORMATION

Roughly 6,500 residential units entitled of the 27,000 units in the 50 Year
Master Plan for the West Bay Sector

Roughly 4.4MM square feet entitled of the 37MM buildable commercial square
feet in the 50 Year Master Plan including 490 hotel rooms and 2 marinas
Source: The St. Joe Company 2009 Annual Report
 Introduction to the West Bay Sector
CONFIDENTIAL INFORMATION

Source: The St. Joe Company March 2010 Investor Presentation

 West Bay Sector – Phase I
CONFIDENTIAL INFORMATION

Source: The St. Joe Company March 2010 Investor Presentation

 West Bay Sector – Phase I
CONFIDENTIAL INFORMATION

Source: The St. Joe Company March 2010 Investor Presentation

 West Bay Sector – Phase II
CONFIDENTIAL INFORMATION

Source: The St. Joe Company March 2010 Investor Presentation

 Initial West Bay DSAP Development Program
CONFIDENTIAL INFORMATION

Source: July 2009 West Bay DSAP Tables

Bottom
Line
 Volatility Is Not Risk - Volatility Creates Opportunity
CONFIDENTIAL INFORMATION

NOAA Projected Surface Oil Distance From St. Joe Company Properties
 Beachgoers Continue To Enjoy The Beach
CONFIDENTIAL INFORMATION
 Patience Is A Virtue
CONFIDENTIAL INFORMATION

 It is just as important to understand why an investment is undervalued, as

to recognize it is a bargain in the first place. With only three analysts
covering the company, St. Joe generates very little attention from the
street for one simple reason – it is fantastically boring.

 JOEs quarter to quarter earnings tell us next to nothing about the

company’s intrinsic value. Speculators are much more interested in
counting how many iPads Apple has sold in recent weeks, then estimating
the potential value of an asset held for generations.

 But Mr. Market’s obsession with the short term creates opportunity for
disciplined investors. If everyone else is scurrying around pricing the
next fad on the basis of next quarter’s sales, they are likely to misprice
assets for the long term. Which is precisely what has happened here.

 St. Joe is a long-term story that may very well take years or decades to
fully play out. But when we consider the macroeconomic environment
today, and the long-term impact of our government’s fiscal recklessness
and related monetary policy, we are inclined to seek out insurance. In this
respect, St. Joe offers investors an extremely cheap hedge against the risks
illustrated on the following page.
 There’s Timber In Them Thar Hills
CONFIDENTIAL INFORMATION

Timber has proven to be an enormous store of value – one which rose in real
terms during both the 1930’s Deflation and 1970’s Inflation.
 Don’t Let “Jo Jo” Scare You - St Joe Is Sound
CONFIDENTIAL INFORMATION

“If you get any good news at all, you’re at the bottom”

Don’t confuse volatility with risk.

If Jo Jo is willing to sell us a dollar for
fifty cents today, we are willing buyers
here. If he decides to sell us more for
a quarter next week, we are even more
enthusiastic buyers. The risk of a
permanent loss of capital is low at
today’s Gulf-fear-induced prices.
Appendix
 Contact Information
CONFIDENTIAL INFORMATION

The Broyhill Affinity Fund

800 Golfview Park
Post Office Box 500
Lenoir, NC 28645
Phone: 828 758 6100
Fax: 828 758 8919

For more information please contact:

Mr. Christopher R. Pavese, CFA

chris@broyhillasset.com
 Disclosures
CONFIDENTIAL INFORMATION

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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