##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    June 30, 2008o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission file number 1-10466
  The St. Joe Company
 (Exact name of registrant as
    specified in its charter)
  Florida

59-0432511(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)245 Riverside Avenue, Suite 500
    Jacksonville, Florida(Address of principal
    executive offices)

32202(Zip Code)    (904) 301-4200
 (Registrants telephone number, including area code)
  þ o
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting
    company o(Do not check if a smaller reporting
    company)   Rule 12b-2 o þ




---



##### 



THE ST.
    JOE COMPANY
    INDEX
   
 Page No.PART I Financial
    InformationItem 1.


Financial Statements


2Consolidated Balance Sheets 
    June 30, 2008 and December 31, 2007


2Consolidated Statements of Income 
    Three and six months ended June 30, 2008 and 2007


3Consolidated Statement of Changes in
    Stockholders Equity  Six months ended
    June 30, 2008


4Consolidated Statements of Cash Flows 
    Six months ended June 30, 2008 and 2007


5Notes to Consolidated Financial Statements


6Item 2.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


20Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


38Item 4.


Controls and Procedures


38PART II Other
    InformationItem 1.


Legal Proceedings


39Item 1A.


Risk Factors


39Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds


39Item 3.


Defaults Upon Senior Securities


39Item 4.


Submission of Matters to a Vote of Security
    Holders


39Item 5.


Other Information


39Item 6.


Exhibits


40Signatures


41Ex-10.1 Fifth Amendment to Deferred Capital Accumulation PlanEx-31.1 Section 302 Certificaton of CEOEx-31.2 Section 302 Certificaton of CFOEx-32.1 Section 906 Certificaton of CEOEx-32.2 Section 906 Certificaton of CFO   1




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##### Table of Contents



PART I 
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements  THE ST.
    JOE COMPANY
  CONSOLIDATED
    BALANCE SHEETS
 (Dollars
    in thousands)
  June 30,


December 31,2008


2007(Unaudited)ASSETSInvestment in real estate

$
947,644


$
944,529Cash and cash equivalents


44,214



24,265Notes receivable


133,637



56,346Pledged treasury securities


29,802



30,671Prepaid pension asset


112,720



109,270Property, plant and equipment, net


21,641



23,693Goodwill, net


18,991



18,991Other intangible assets, net


2,022



2,317Income tax receivable


36,052



Other assets


35,463



45,793Assets held for sale


6,505



8,091$
1,388,691


$
1,263,966LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIES:Debt

$
54,180


$
541,181Accounts payable


74,320



77,640Accrued liabilities


60,170



66,607Income tax payable






8,058Deferred income taxes


116,822



83,535Liabilities associated with assets held for sale


290



328Total liabilities


305,782



777,349Minority interest in consolidated subsidiaries


3,819



6,276STOCKHOLDERS EQUITY:Common stock, no par value; 180,000,000 shares authorized;
    122,512,830 and 104,755,826 issued at June 30, 2008 and
    December 31, 2007, respectively


908,852



321,505Retained earnings


1,093,117



1,081,883Accumulated other comprehensive income


3,586



3,275Treasury stock at cost, 30,162,091 and 30,158,370 shares
    held at June 30, 2008 and December 31, 2007,
    respectively


(926,465
)


(926,322
)Total stockholders equity


1,079,090



480,341$
1,388,691


$
1,263,966    2




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##### Table of Contents



THE ST.
    JOE COMPANYCONSOLIDATED STATEMENTS OF INCOME
    (Unaudited)
    (Dollars in thousands except per share amounts)
  Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Revenues:Real estate sales

$
46,816


$
89,423


$
148,077


$
171,785Rental revenues


311



904



561



1,954Timber sales


6,445



6,741



14,069



11,575Other revenues


14,096



13,630



21,752



20,403Total revenues


67,668



110,698



184,459



205,717Expenses:Cost of real estate sales


20,613



66,457



39,515



92,913Cost of rental revenues


103



720



207



1,296Cost of timber sales


4,948



5,401



9,842



9,802Cost of other revenues


13,794



12,272



24,018



20,815Other operating expenses


13,436



16,119



28,767



30,849Corporate expense, net


9,358



9,142



17,989



17,132Depreciation and amortization


4,458



4,597



9,147



9,587Impairment losses


976







3,233



Restructuring charges


2,502



(161
)


3,047



2,996Total expenses


70,188



114,547



135,765



185,390Operating profit (loss)


(2,520
)


(3,849
)


48,694



20,327Other income (expense):Investment income, net


1,494



1,394



3,281



2,668Interest expense


(110
)


(6,433
)


(4,329
)


(11,099
)Other, net


(1,439
)


478



(773
)


4,660Loss on early extinguishment of debt


(29,874
)






(29,874
)


Gain on disposition of assets






7,633







7,633Total other income (expense)


(29,929
)


3,072



(31,695
)


3,862Income (loss) from continuing operations before equity in income
    (loss) of unconsolidated affiliates, income taxes, and minority
    interest


(32,449
)


(777
)


16,999



24,189Equity in (loss) income of unconsolidated affiliates


(122
)


51



(213
)


958Income tax expense (benefit)


(11,781
)


(367
)


5,993



5,838Income (loss) from continuing operations before minority interest


(20,790
)


(359
)


10,793



19,309Minority interest in income (loss)


(85
)


371



(497
)


754Income (loss) from continuing operations


(20,705
)


(730
)


11,290



18,555Discontinued operations:Income (loss) from discontinued operations, net of tax


(113
)


26,048



(56
)


26,446Net income (loss)

$
(20,818
)

$
25,318


$
11,234


$
45,001EARNINGS PER SHAREBasicIncome (loss) from continuing operations

$
(0.23
)

$
(0.01
)

$
0.13


$
0.25Income (loss) from discontinued operations

$
(0.00
)

$
0.35


$
(0.00
)

$
0.36Net income (loss)

$
(0.23
)

$
0.34


$
0.13


$
0.61DilutedIncome (loss) from continuing operations

$
(0.23
)

$
(0.01
)

$
0.13


$
0.25Income (loss) from discontinued operations

$
(0.00
)

$
0.35


$
(0.00
)

$
0.36Net income (loss)

$
(0.23
)

$
0.34


$
0.13


$
0.61    3




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##### Table of Contents



THE ST.
    JOE COMPANYCONSOLIDATED STATEMENT OF CHANGES IN
    STOCKHOLDERS EQUITY
    (Unaudited)
    (Dollars in thousands)
  AccumulatedCommon Stock





OtherOutstanding





Retained


ComprehensiveShares


Amount


Earnings


Income


Treasury Stock


TotalBalance at December 31, 2007


74,597,456


$
321,505


$
1,081,883


$
3,275


$
(926,322
)

$
480,341Comprehensive income:Net income










11,234











11,234Amortization of pension and postretirement benefit costs, net














311







311Total comprehensive income






















11,545Issuances of restricted stock


727,942



















Forfeitures of restricted stock


(150,020
)


















Issuances of common stock, net of offering costs


17,179,082



580,858















580,858Excess tax benefit on options exercised and vested restricted
    stock






74















74Amortization of stock- based compensation






6,415















6,415Purchases of treasury shares


(3,721
)














(143
)


(143
)Balance at June 30, 2008


92,350,739


$
908,852


$
1,093,117


$
3,586


$
(926,465
)

$
1,079,090    4




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##### Table of Contents



THE ST.
    JOE COMPANYCONSOLIDATED STATEMENTS OF CASH FLOW
    (Unaudited)
    (Dollars in thousands)
  Six Months EndedJune 30,2008


2007Cash flows from operating activities:Net income

$
11,234


$
45,001Adjustments to reconcile net income to net cash used in
    operating activities:Depreciation and amortization


9,165



14,011Stock-based compensation


6,415



4,858Minority interest in income (loss)


(497
)


754Equity in (income) loss of unconsolidated joint ventures


213



(1,160
)Distributions of income from unconsolidated affiliates






710Deferred income tax expense (benefit)


33,287



(108,488
)Loss on early extinguishment of debt


29,874



Impairment losses


3,233



2,196Restructuring expense


3,047



2,996Cost of operating properties sold


34,432



99,682Expenditures for operating properties


(30,335
)


(127,910
)Write-off of previously capitalized home building costs






705Gains on dispositions of assets






(45,053
)Changes in operating assets and liabilities:Notes receivable


(78,065
)


837Other assets


6,273



(923
)Accounts payable and accrued liabilities


(10,702
)


(71,387
)Income taxes payable


(44,108
)


62,953Net cash used in operating activities


(26,534
)


(120,218
)Cash flows from investing activities:Purchases of property, plant and equipment


(1,276
)


(5,693
)Purchases of investments in real estate






(13,315
)Maturities and redemptions of investments, held to maturity


619



12Proceeds from sale of discontinued operations






307,126Investments in unconsolidated affiliates






(496
)Net cash (used in) provided by investing activities


(657
)


287,634Cash flows from financing activities:Net borrowings (payments) from revolving credit agreements


35,000



(40,000
)Repayment of borrowings under revolving credit agreements


(167,000
)


Repayments of other long-term debt


(370,000
)


(120,790
)Make whole payment in connection with prepayment of senior notes


(29,690
)


Distributions to minority interest partner


(1,959
)


(3,909
)Proceeds from exercises of stock options


990



3,524Issuance of common stock


579,868



Dividends paid to stockholders






(23,737
)Excess tax benefits from stock-based compensation


74



979Treasury stock purchases


(143
)


(231
)Net cash provided by (used in) financing activities


47,140



(184,164
)Net increase (decrease) in cash and cash equivalents


19,949



(16,748
)Cash and cash equivalents at beginning of period


24,265



36,935Cash and cash equivalents at end of period

$
44,214


$
20,187Supplemental disclosures of cash flow information:Cash paid during the period for:Interest

$
2,197


$
21,680Income taxes


16,998



105,897Capitalized interest


1,582



5,085    5




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##### Table of Contents



THE ST.
    JOE COMPANYNOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
    (Dollars in thousands, unless otherwise stated)
    (Unaudited)
  1.
    Description
    of Business and Basis of Presentation  Description
    of Business
    Basis
    of Presentation
  Form 10-Q.
  Form 10-K
    New
    Accounting Standards
  Fair Value
    Measurements No. 157-2, Effective Date of FASB Statement No. 157 No. 157-2),
 6




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  No. 157-2. No. 157-2
  Disclosures about Derivative Instruments and Hedging
    Activities  an amendment of FASB Statement
    No. 133 Accounting for Derivative Instruments and Hedging
    Activities
  The
    Hierarchy of Generally Accepted Accounting Principles ) The Meaning of Present Fairly in Conformity
    With Generally Accepted Accounting Principles
  03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions are Participating Securities EITF 03-6
  2.
    Stock-Based
    Compensation and Earnings Per Share  Stock-Based
    Compensation
  Share-Based Payment Accounting for
    Stock Issued to Employees
  Stock
    Options and Non-Vested Restricted Stock
  and/or
 7




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Market
    Condition Grants
        Weighted AverageNumber of


Grant Date FairMarket Condition Non-vested Restricted Shares

Shares


ValueBalance at January 1, 2008





$
Granted


603,840



27.31Forfeited


(62,628
)


27.31Vested






Balance at June 30, 2008


541,212


$
27.31    8




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Stock option expense

$
310


$
618


$
480


$
971Restricted stock expense


3,115



2,256



5,935



3,887Total

$
3,425


$
2,874


$
6,415


$
4,858   Earnings
    Per Share
      Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Basic average shares outstanding


91,236,851



73,777,169



85,172,204



73,733,328Incremental weighted average effect of stock options










129,338



219,938Incremental weighted average effect of non-vested restricted
    stock










274,048



326,533Diluted average shares outstanding


91,236,851



73,777,169



85,575,590



74,279,799        9




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3.
    Common
    Stock Offering    4.
    Notes
    Receivable and Other Assets    June 30, 2008


December 31, 2007Saussy Burbank

$
21,297


$
27,202Various builders


17,371



18,608Advantis


7,076



7,015Pier Park Community Development District


2,199



2,028Installment notes from rural land sales


77,950



Various mortgages


7,744



1,493Total notes receivable

$
133,637


$
56,346     Monetization





Loss on





RetainedPeriod Ended(a)

Note Value


Net Proceeds


Net Balance


Monetization


Income


Interest(b)June 30, 2007

$
46,415


$
(41,511
)

$
4,904


$
(1,235
)

$
(149
)

$
3,520September 30, 2007


28,485



(25,370
)


3,115



(1,325
)


(53
)


1,737March 31, 2008


30,455



(27,124
)


3,331



(1,923
)






1,408Total Monetized at June 30, 2008

$
105,355


$
(94,005
)

$
11,350


$
(4,483
)

$
(202
)

$
6,665March 31, 2008


39,557







39,557











June 30, 2008


38,393







38,393











Total Installment Note Receivable at June 30, 2008

$
77,950






$
77,950   (a)
    
    The period ended date refers to the quarter ended in which the
    timberland sale occurred. The monetization of the notes may have
    occurred in a subsequent quarter.(b)
    
    Recorded as Other Asset.  15-year 15-year
  Accounting for
    Transfers and Servicing of Financial Assets and Extinguishments
    of Liabilities
 10




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    15-year
    5.
    Investment
    in Real Estate    June 30, 2008


December 31, 2007Operating property:Residential real estate

$
164,665


$
164,614Rural land sales


139



139Forestry


66,313



85,105Other


338



309Total operating property


231,455



250,167Development property:Residential real estate


668,777



644,745Commercial real estate


57,627



55,368Rural land sales


7,000



7,632Other


1,778



1,542Total development property


735,182



709,287Investment property:Commercial real estate


1,835



1,835Rural land sales


126



126Forestry


522



522Other


5,945



5,948Total investment property


8,428



8,431Investment in unconsolidated affiliates:Residential real estate


3,850



4,063Total real estate investments


978,915



971,948Less: Accumulated depreciation


31,271



27,419Total investment in real estate

$
947,644


$
944,529    11




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    6.
    Asset
    Impairments    7.
    Restructuring    Residential Real


Commercial Real


Rural LandEstate


Estate


Sales


Forestry


Other


TotalThree months ended June 30, 2008:One-time termination benefits to employees

$
531


$
27


$
3


$
47


$
1,894


$
2,502Six months ended June 30, 2008:One-time termination benefits to employees

$
816


$
25


$
3


$
120


$
2,083


$
3,047Cumulative restructuring charges, September 30, 2006
    through June 30, 2008

$
17,560


$
534


$
1,647


$
343


$
5,805


$
25,889One-time termination benefits to employees  to be
    incurred during 2008(a)

$
460


$
97


$
6


$



$
866


$
1,429One-time termination benefits to employees  to be
    incurred during 2009

$
172


$



$
6


$



$
90


$
268Total remaining one-time termination benefits to
    employees  to be incurred

$
632


$
97


$
12


$



$
956


$
1,697   (a)
    
    Represents costs to be incurred from July 1, 2008 through
    December 31, 2008. 12




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Balance at







Balance atDecember 31,

Costs

Non-cash



June 30,

Due within

Due after2007

Accrued

Adjustments

Payments

2008

12 months

12 monthsOne-time termination benefits to employees

$
2,258


$
3,047






$
(2,152
)

$
3,153


$
2,928


$
225   8.
    Discontinued
    Operations       13




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Three Months  Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Commercial Buildings  Commercial Segment:Aggregate revenues

$



$
8,026


$
17


$
16,918Pre-tax income






2,926



21



2,166Pre-tax gain on sale






37,633







37,633Income tax expense






15,270



8



14,984Income from discontinued operations, net

$



$
25,289


$
13


$
24,815Saussy Burbank  Residential SegmentAggregate revenues

$



$
11,235


$



$
56,679Pre-tax income






625







1,727Income tax expense






235







650Income from discontinued operations, net

$



$
390


$



$
1,077Sunshine State Cypress  Forestry SegmentAggregate revenues

$
2,257


$
2,717


$
4,099


$
4,852Pre-tax income (loss)


(185
)


593



(113
)


889Income tax expense (benefit)


(72
)


224



(44
)


335Income (loss) from discontinued operations

$
(113
)

$
369


$
(69
)

$
554Total income (loss) from discontinued operations, net

$
(113
)

$
26,048


$
(56
)

$
26,446   9.
    Debt    June 30, 2008


December 31, 2007Revolving credit facility

$



$
132,000Senior notes






240,000Term loan






100,000Non-recourse defeased debt


29,802



30,671Community Development District debt


15,363



35,671Other


9,015



2,839Total debt

$
54,180


$
541,181      14




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2008

$
4152009


5,0352010


2,2122011


4982012


523Thereafter


45,497Total

$
54,180   10.
    Employee
    Benefit Plans    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Service cost

$
549


$
1,059


$
1,250


$
2,118Interest cost


2,089



2,073



4,150



4,146Expected return on assets


(4,417
)


(4,246
)


(8,850
)


(8,493
)Prior service costs


165



171



350



342Curtailment charge














135Net periodic benefit (credit)

$
(1,614
)

$
(943
)

$
(3,100
)

$
(1,752
)  15




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  11.
    Income
    Taxes  Accounting for Uncertainty in Income Taxes, an Interpretation
    of FASB Statement No. 109, Accounting for Income Taxes and/or
  Form 10-K
  12.
    Segment
    Information      Form 10-K.
   16




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Operating Revenues:Residential real estate

$
21,609


$
44,673


$
39,418


$
81,857Commercial real estate


615



6,388



908



12,722Rural land sales


39,010



52,908



130,084



99,584Forestry


6,434



6,729



14,049



11,554Consolidated operating revenues

$
67,668


$
110,698


$
184,459


$
205,717Income (loss) from continuing operations before equity in (loss)
    income of unconsolidated affiliates, income taxes and minority
    interest:Residential real estate

$
(13,290
)

$
(973
)

$
(31,993
)

$
(6,405
)Commercial real estate


(541
)


8,532



(1,392
)


8,626Rural land sales


24,140



7,170



104,190



47,542Forestry


782



852



2,741



1,000Other


(43,540
)


(16,358
)


(56,547
)


(26,574
)Consolidated income (loss) from continuing operations before
    equity in (loss) income of unconsolidated affiliates, income
    taxes and minority interest

$
(32,449
)

$
(777
)

$
16,999


$
24,189   June 30, 2008


December 31, 2007Total Assets:Residential real estate

$
907,719


$
901,771Commercial real estate


62,120



60,079Rural land sales


14,323



8,785Forestry


144,130



90,895Corporate


253,894



194,345Assets held for sale(1)


6,505



8,091Total Assets

$
1,388,691


$
1,263,966    (1)
    
    Formerly part of the Forestry segment. 17




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     June 30, 2008


December 31, 2007Assets held for sale:Inventory

$
3,930


$
5,705Investment in real estate


1,171



1,300Other assets


1,404



1,086Total assets held for sale

$
6,505


$
8,091Liabilities associated with assets held for sale:Account payable and accrued liabilities


290



328Total liabilities associated with assets held for sale

$
290


$
328   13.
    Contingencies  SFAS No. 5,
    Accounting for Contingencies.
      Guarantors Accounting
    and Disclosure Requirements for Guarantees, Including Indirect
    Guarantees of Indebtedness of Others.
       18




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        14.
    Fair
    value measurements      Level 2.
    Inputs, other than the quoted prices in active markets, that are
    observable either directly or indirectly; andLevel 3.
    Unobservable inputs in which there is little or no market data,
    which require the reporting entity to develop its own
    assumptions.    Quoted Prices in


Significant Other


SignificantFair Value


Active Markets for


Observable


UnobservableJune 30,


Identical Assets


Inputs


Inputs2008


(Level 1)


(Level 2)


(Level 3)Recurring:Investments in money market

$
28,635


$
28,635


$



$
Non recurring:Retained interest in QSPEs


6,665











6,665Total assets at fair value

$
35,300


$
28,635


$



$
6,665    19




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-Looking
    Statements
    
    future operating performance, revenues, earnings, cash flows,
    and short and long-term revenue and earnings growth rates;
    future residential and commercial entitlements;
    expected development timetables and projected timing for sales
    or closing of housing units or home-sites in a community;
    development approvals and the ability to obtain such approvals,
    including possible legal challenges;
    the anticipated price ranges of developments;
    the number of units or commercial square footage that can be
    supported upon full build-out of a development;
    the number, price and timing of anticipated land sales or
    acquisitions;
    estimated land holdings for a particular use within a specific
    time frame;
    absorption rates and expected gains on land and home site sales;
    the levels of resale inventory in our developments and the
    regions in which they are located;
    the development of relationships with strategic partners,
    including homebuilders;
    the pace at which we release new products for sale;
    comparisons to historical projects;
    the amount of dividends, if any, we pay; and
    the number or dollar amount of shares of Company stock which may
    be purchased under our existing or future share-repurchase
    programs.    Form 10-K Form 10-Q,
  
    a continued downturn in the real estate markets in Florida and
    across the nation;
    economic conditions, particularly in Northwest Florida, Florida
    as a whole and key areas of the southeastern United States that
    serve as feeder markets to our Northwest Florida operations;
    the lack of available mortgage financing, increases in
    foreclosures and changes in interest rates and conditions in the
    financial markets; 20




---



##### Table of Contents




    changes in the demographics affecting projected population
    growth in Florida, including the demographic migration of Baby
    Boomers;
    the inability to raise sufficient cash to enhance and maintain
    our operations and to develop our real estate holdings;
    an event of default under our credit facility, or the
    restructuring of such debt on terms less favorable to us;
    possible future write-downs of the carrying value of our real
    estate assets;
    the termination of sales contracts or letters of intent due to,
    among other factors, the failure of one or more closing
    conditions or market changes;
    a failure to attract homebuilding customers for our
    developments, or their failure to satisfy their purchase
    commitments;
    the failure to attract desirable strategic partners, complete
    agreements with strategic partners
    and/or
    manage relationships with strategic partners going forward;
    natural disasters, including hurricanes and other severe weather
    conditions, and the impact on current and future demand for our
    products in Florida;
    whether our developments receive all land-use entitlements or
    other permits necessary for development
    and/or full
    build-out or are subject to legal challenge;
    local conditions such as the supply of homes and home sites and
    residential or resort properties or a change in the demand for
    real estate in an area;
    timing and costs associated with property developments;
    the pace of commercial development in Northwest Florida;
    competition from other real estate developers;
    changes in pricing of our products and changes in the related
    profit margins;
    changes in operating costs, including real estate taxes and the
    cost of construction materials;
    changes in the amount or timing of federal and state income tax
    liabilities resulting from either a change in our application of
    tax laws, an adverse determination by a taxing authority or
    court, or legislative changes to existing laws;
    the failure to realize significant improvements in job creation
    and public infrastructure in Northwest Florida, including the
    development of a proposed new airport in Bay County, which is
    dependent on the availability of adequate funding and the
    successful resolution of any legal challenges;
    potential liability under environmental laws or other laws or
    regulations;
    changes in laws, regulations or the regulatory environment
    affecting the development of real estate;
    fluctuations in the size and number of transactions from period
    to period;
    the prices and availability of labor and building materials;
    changes in insurance rates and deductibles for property in
    Florida, particularly in coastal areas;
    high property tax rates in Florida, and future changes in such
    rates;
    changes in gasoline prices; and
    acts of war, terrorism or other geopolitical events. 21




---



##### Table of Contents



Overview
        
    the sale of developed home-sites to retail customers and
    builders;
    the sale of parcels of entitled, undeveloped land;
    the sale of housing units built by us;
    rental income;
    resort and club operations;
    investments in limited partnerships and joint ventures; and
    brokerage and title issuance fees on certain transactions within
    our residential real estate developments.             22




---



##### Table of Contents



Critical
    Accounting Estimates
    Form 10-K
  Results
    of Operations
    
    loss on early extinguishment of debt of $29.9 million
    related to the prepayment of our $240 million senior notes,  
    an impairment charge of $1.0 million consisting of
    $0.8 million related to the write down of a renegotiated
    builder note receivable and $0.2 million related to the
    write down of homes in our residential real estate segment,  
    $2.5 million related to our restructuring program and
    $1.9 million related to a loss on the monetization of
    installment notes.      
    loss on early extinguishment of debt of $29.9 million
    related to the prepayment of our $240 million senior notes,
    an impairment charge of $3.2 million consisting of
    $0.8 million related to the write down of a renegotiated
    builder note receivable and $2.4 million related to the
    write down of homes in our residential real estate segment,
    $3.0 million related to our restructuring program and
    $1.9 million related to a loss on the monetization of
    installment notes. 23




---



##### Table of Contents



Consolidated
    Results
  Revenues and expenses.
  Three Months Ended June 30,


Six Months Ended June 30,2008


2007


Difference


% Change


2008


2007


Difference


% Change(Dollars in millions)Revenues:Real estate sales

$
46.8


$
89.4


$
(42.6
)


(48
)%

$
148.1


$
171.8


$
(23.7
)


(14
)%Rental revenues


0.3



0.9



(0.6
)


(66
)


0.6



1.9



(1.3
)


(68
)Timber sales


6.4



6.8



(0.3
)


(4
)


14.1



11.6



2.5



22Other revenues


14.1



13.6



0.5



4



21.7



20.4



1.3



6Total


67.6



110.7



(43.0
)


(39
)


184.5



205.7



(21.2
)


(10
)Expenses:Cost of real estate sales


20.6



66.4



(45.8
)


(69
)


39.5



92.9



(53.4
)


(57
)Cost of rental revenues


0.1



0.7



(0.6
)


(86
)


0.2



1.3



(1.1
)


(85
)Cost of timber sales


4.9



5.4



(0.5
)


(9
)


9.8



9.8







Cost of other revenues


13.8



12.3



1.5



12



24.0



20.8



3.2



15Other operating expenses


13.4



16.1



(2.7
)


(17
)


28.8



30.8



(2.0
)


(6
)Total

$
52.8


$
100.9


$
(48.1
)


(48
)%

$
102.3


$
155.6


$
(53.3
)


(34
)%    24




---



##### Table of Contents



Corporate expense.
  Impairment Losses.
  Restructuring charge.
  Other income (expense).
  Equity in (loss) income of unconsolidated
    affiliates.
  Income tax expense.
 25




---



##### Table of Contents



Discontinued Operations.
  Segment
    Results
  Residential
    Real Estate
       26




---



##### Table of Contents



Three Months EndedJune 30,


Six Months Ended June 30,2008


2007


2008


2007(In millions)Revenues:Real estate sales

$
7.2


$
30.8


$
17.1


$
61.0Rental revenue


0.3



0.4



0.6



0.6Other revenues


14.1



13.5



21.7



20.3Total revenues


21.6



44.7



39.4



81.9Expenses:Cost of real estate sales


6.2



18.4



15.5



37.5Cost of rental revenue


0.1



0.3



0.2



0.4Cost of other revenues


13.8



12.0



24.0



20.3Other operating expenses


10.9



13.1



23.1



24.6Depreciation and amortization


2.9



2.9



5.9



5.8Restructuring charge


0.5



(0.2
)


0.8



1.1Impairment charge


1.0







3.2



Total expenses


35.4



46.5



72.7



89.7Other income (expense)


0.5



0.9



1.3



1.5Pre-tax (loss) from continuing operations before equity in
    (loss) income of unconsolidated affiliates, income taxes and
    minority interest

$
(13.3
)

$
(0.9
)

$
(32.0
)

$
(6.3
)     Three
    Months Ended June 30, 2008 and 2007
    Three Months Ended June 30, 2008


Three Months Ended June 30, 2007Homes


Home-Sites


Total


Homes


Home-Sites


Total(Dollars in millions)Sales

$
5.7


$
1.5


$
7.2


$
14.1


$
16.6


$
30.7Cost of sales:Direct costs


3.9



0.7



4.6



7.6



6.1



13.7Selling costs


0.3



0.0



0.3



0.8



0.6



1.4Other indirect costs


1.2



0.1



1.3



2.5



0.8



3.3Total cost of sales


5.4



0.8



6.2



10.9



7.5



18.4Gross profit

$
0.3


$
0.7


$
1.0


$
3.2


$
9.1


$
12.3Gross profit margin


5
%


47
%


14
%


23
%


55
%


40
%    27




---



##### Table of Contents



Three Months Ended June 30, 2008


Three Months Ended June 30, 2007Closed





Cost of


Gross


Closed





Cost of


GrossUnits


Revenues


Sales


Profit


Units


Revenues


Sales


Profit(Dollars in millions)Northwest Florida:Resort and Seasonal:Single-family homes


4


$
2.9


$
2.8


$
0.1



3


$
4.5


$
3.5


$
1.0Home sites


5



1.4



0.7



0.7



18



10.3



3.4



6.9Primary:Single-family homes


















9



2.4



1.8



0.6Townhomes


















1



0.2



0.1



0.1Home sites


















76



6.3



4.1



2.2Northeast Florida:Primary:Single-family homes


2



0.9



0.8



0.1



1



0.4



0.4



Home sites






























Central Florida:Primary:Single-family homes


2



0.4



0.4







6



4.4



3.4



1.0Multi-family homes


4



1.5



1.4



0.1



1



0.5



0.4



0.1Townhomes


















3



1.7



1.3



0.4Home sites


1



0.1



0.1



















Total


18


$
7.2


$
6.2


$
1.0



118


$
30.7


$
18.4


$
12.3              28




---



##### Table of Contents



Six
    Months Ended June 30, 2008 and 2007
    Six Months Ended June 30, 2008


Six Months Ended June 30, 2007Homes


Home-Sites


Total


Homes


Home-Sites


Total(Dollars in millions)Sales

$
14.3


$
2.7


$
17.0


$
32.1


$
28.9


$
61.0Cost of sales:Direct costs


10.1



1.3



11.4



18.6



10.5



29.1Selling costs


0.8



0.1



0.9



1.6



1.1



2.7Other indirect costs


3.1



0.1



3.2



4.5



1.3



5.8Total cost of sales


14.0



1.5



15.5



24.7



12.9



37.6Gross profit

$
0.3


$
1.2


$
1.5


$
7.4


$
16.0


$
23.4Gross profit margin


2
%


44
%


9
%


23
%


55
%


38
%    29




---



##### Table of Contents



Six Months Ended June 30, 2008


Six Months Ended June 30, 2007Closed





Cost of


Gross


Closed





Cost of


GrossUnits


Revenues


Sales


Profit


Units


Revenues


Sales


Profit(Dollars in millions)Northwest Florida:Resort and Seasonal:Single-family homes


7


$
7.0


$
6.7


$
0.3



6


$
9.9


$
7.1


$
2.8Home sites


7



2.4



1.3



1.1



31



17.1



5.3



11.8Primary:Single-family homes


















14



4.2



3.5



0.7Townhomes


















2



0.4



0.1



0.3Home sites


















137



11.2



7.3



3.9Northeast Florida:Primary:Single-family homes


2



0.9



1.1



(0.2
)


7



3.3



3.1



0.2Home sites


3



0.2



0.1



0.1



2



0.3



0.2



0.1Central Florida:Primary:Single-family homes


7



3.5



3.4



0.1



15



9.4



7.2



2.2Multi-family homes


8



2.7



2.6



0.1



25



0.8



0.6



0.2Townhomes


1



0.2



0.2







7



4.1



3.1



1.0Home sites


1



0.1



0.1







1



0.3



0.1



0.2Total


36


$
17.0


$
15.5


$
1.5



247


$
61.0


$
37.6


$
23.4            30




---



##### Table of Contents



Discontinued
    Operations
      Three Months Ended


Six Months EndedJune 30, 2007


June 30, 2007(In millions)Saussy BurbankAggregate revenues

$
11.2


$
56.7Pre-tax income


0.6



1.7Income tax expense


0.2



0.6Income from discontinued operations, net

$
0.4


$
1.1   Commercial
    Real Estate
   31




---



##### Table of Contents



Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(In millions)Revenues:Real estate sales

$
0.6


$
5.7


$
0.9


$
11.3Rental revenues






0.5







1.3Other revenues






0.1







0.1Total revenues


0.6



6.3



0.9



12.7Expenses:Cost of real estate sales


0.2



3.7



0.2



7.4Cost of rental revenues






0.4







0.9Other operating expenses


1.0



1.5



2.1



2.9Depreciation and amortization














0.6Total expenses


1.2



5.6



2.3



11.8Other income






7.8







7.8Pre-tax (loss) from continuing operations

$
(0.6
)

$
8.5


$
(1.4
)

$
8.7     Real Estate Sales.
  Number of


Acres


Average Price


Gross





Gross ProfitLand

Sales


Sold


per Acre(1)


Proceeds


Revenue


on Sales(In millions, except average price per acre)Three Months Ended June 30, 2008:Northwest Florida


1



2


$
117.0


$
0.3


$
0.4
(2)

$
0.2
(2)Other






















Total/Average


1



2


$
117.0


$
0.3


$
0.4
(2)

$
0.2
(2)Three Months Ended June 30, 2007:Northwest Florida


6



24


$
204.2


$
5.0


$
4.6
(3)

$
1.8
(3)Other


1



4



283.1



1.1



1.1



0.2Total/Average


7



28


$
215.2


$
6.1


$
5.7
(3)

$
2.0
(3)Six Months Ended June 30, 2008:Northwest Florida


1



2


$
117.0


$
0.3


$
0.5
(2)

$
0.3
(2)Other






















Total/Average


1



2


$
117.0


$
0.3


$
0.5
(2)

$
0.3
(2)Six Months Ended June 30, 2007:Northwest Florida


12



38


$
183.8


$
6.9


$
6.9
(3)

$
2.9
(3)Other


4



22



194.1



4.4



4.4



1.0Total/Average


16



60


$
187.7


$
11.3


$
11.3
(3)

$
3.9
(3)   (1)
    
    Average price per acre in thousands. 32




---



##### Table of Contents



(2)
    
    Includes previously deferred revenue and gain on sales, based on
    percentage-of-completion accounting, of $0.1 million and
    $0.1 million, respectively for the three months ended
    June 30, 2008. The six months ended June 30, 2008
    includes previously deferred revenue and gain on sales, based on
    percentage-of-completion accounting, of $0.3 million and
    $0.2 million, respectively.(3)
    
    Includes deferred revenue and gain on sales, based on
    percentage-of-completion accounting, of $0.4 million and
    $0.1 million, respectively, for the three months ended
    June 30, 2007. The six months ended June 30, 2007
    include previously deferred revenues and gain on sales of $0.0
    and $0.3 million, respectively.    Discontinued
    Operations
    Three Months Ended


Six Months EndedJune 30, 2007


June 30, 2007(In millions)Commercial Buildings:Aggregate revenues

$
8.0


$
16.9Pre-tax income


2.9



2.2Pre-tax gain on sale


37.6



37.6Income tax expense


15.2



15.0Income from discontinued operations, net

$
25.3


$
24.8   Rural
    Land Sales
   33




---



##### Table of Contents



Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(In millions)Revenues:Real estate sales

$
39.0


$
52.9


$
130.1


$
99.6Expenses:Cost of real estate sales


14.2



44.4



23.7



48.1Other operating expenses


1.0



1.3



2.5



2.9Depreciation and amortization






0.1



0.1



0.1Restructuring charge














1.3Total expenses


15.2



45.8



26.3



52.4Other income


0.4







0.4



0.3Pre-tax income from continuing operations

$
24.2


$
7.1


$
104.2


$
47.5     Number of


Number of


Average Price


Gross Sales


GrossSales


Acres


per Acre


Price


Profit(In millions)


(In millions)Three Months Ended:June 30, 2008


4



29,398


$
1,327


$
39.0


$
24.8June 30, 2007


15



34,730


$
1,523


$
52.9


$
8.5Six Months Ended:June 30, 2008


10



86,833


$
1,498


$
130.1


$
106.4June 30, 2007


26



66,025


$
1,508


$
99.6


$
51.5     
    23,743 acres in Liberty County for $36.3 million, or
    an average of $1,530 per acre.
    2,784 acres in Taylor County for $12.5 million, or
    $4,500 per acre.  
    29,742 acres primarily within Liberty and Wakulla counties
    for $39.5 million, or an average of $1,330 per acre.  
    29,343 acres primarily within Leon County, Florida and
    Stewart County, Georgia, for $38.4 million, or an average
    of $1,308 per acre.     34




---



##### Table of Contents



Forestry
      Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(In millions)Revenues:Timber sales

$
6.4


$
6.7


$
14.0


$
11.5Expenses:Cost of timber sales


4.9



5.4



9.8



9.8Other operating expenses


0.5



0.4



1.0



0.8Depreciation and amortization


0.6



0.6



1.4



1.2Restructuring charge


0.1







0.1



Total expenses


6.1



6.4



12.3



11.8Other income


0.5



0.6



1.0



1.3Pre-tax income from continuing operations

$
0.8


$
0.9


$
2.7


$
1.0   Three
    Months Ended June 30, 2008 and 2007
      Six
    Months Ended June 30, 2008 and 2007
     35




---



##### Table of Contents



Discontinued
    Operations
    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007(In millions)Sunshine State CypressAggregate revenues

$
2.2


$
2.7


$
4.1


$
4.8Pre-tax income (loss)


(0.2
)


0.6



(0.1
)


0.9Income tax expense (benefit)


(0.1
)


0.2







0.3Income (loss) from discontinued operations, net

$
(0.1
)

$
0.4


$
(0.1
)

$
0.6   Liquidity
    and Capital Resources
    
    Sales of land holdings and other assets;
    Operations;
    Borrowings from financial institutions; and
    Issuances of equity from the sale of stock and exercise of
    employee stock options.    
    Operations;
    Real estate development and construction;
    Repayments of debt; and
    Payments of taxes      Cash
    Flows from Operating Activities
     36




---



##### Table of Contents



15-year
  Cash
    Flows from Investing Activities
    Cash
    Flows from Financing Activities
          91-10, Accounting for Special Assessments and Tax Increment
    Financing
  Off-Balance
    Sheet Arrangements
  15-year Accounting for Transfers and Servicing of
    Financial Assets and Extinguishments of Liabilities.
 37




---



##### Table of Contents



Contractual
    Obligations and Commercial Commitments
    Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk    Item 4.
    Controls
    and Procedures  Rules 13a-15(e) 15d-15(e)
   38




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##### Table of Contents



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings    Item 1A.
    Risk
    Factors    Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders        Name of Nominee

For


WithheldMichael L. Ainslie


85,141,424



336,513Hugh M. Durden


73,593,546



11,884,390Thomas A Fanning


85,149,594



328,343Harry H. Frampton, III


58,336,276



27,141,661Wm. Britton Greene


85,150,989



326,947Dr. Adam W. Herbert, Jr.


85,121,497



356,439Delores M. Kesler


85,075,283



402,653John S. Lord


73,612,480



11,865,456Walter L. Revell


85,103,724



374,213Peter S. Rummell


73,700,695



11,777,242     For

Against


Abstain85,269,436


175,050



33,449   Item 5.
    Other
    Information   39




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##### Table of Contents



Item 6.
    Exhibits  ExhibitNumber

Description3
.1

Restated and Amended Articles of Incorporation, as amended
    (incorporated by reference to Exhibit 3.1 of the
    registrants registration statement on
    Form S-3
    (File
    333-116017)).3
.2

Amended and Restated By-laws of the registrant (incorporated by
    reference to Exhibit 3 to the registrants Current
    Report on
    Form 8-K
    dated December 14, 2004).10
.1

Fifth Amendment to The St. Joe Company Deferred Capital
    Accumulation Plan31
.1

Certification by Chief Executive Officer.31
.2

Certification by Chief Financial Officer.32
.1

Certification by Chief Executive Officer.32
.2

Certification by Chief Financial Officer.  40




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##### Table of Contents



SIGNATURES    The St. Joe CompanyDate: August 5, 2008

/s/  Wm.
    Britton GreeneWm. Britton GreeneChief Executive OfficerDate: August 5, 2008

/s/  Janna
    L. ConnollyJanna L. ConnollyChief Accounting Officer  41