##### 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, 2007o

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
 þ o o
  Rule 12b-2 o þ
  APPLICABLE
    ONLY TO CORPORATE ISSUERS:




---



##### 



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


Financial
    Statements


2Consolidated
    Balance Sheets  June 30, 2007 and
    December 31, 2006


2Consolidated
    Statements of Income  Three and six months ended
    June 30, 2007 and 2006


3Consolidated
    Statement of Changes in Stockholders Equity 
    Six months ended June 30, 2007


4Consolidated
    Statements of Cash Flows-Six months ended June 30, 2007 and
    2006


5Notes to
    Consolidated Financial Statements


6Item 2.


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


19Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


41Item 4.


Controls and
    Procedures


41PART II Other
    InformationItem 1.


Legal
    Proceedings


42Item 1A.


Risk
    Factors


42Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


42Item 3.


Defaults upon
    Senior Securities


42Item 4.


Submission of
    Matters to a Vote of Security Holders


42Item 5.


Other
    Information


42Item 6.


Exhibits


43Signatures


44EX-31.1 Certification by CEO Section 302EX-31.2 Certification by CFO Section 302EX-32.1 Certification by CEO Section 906EX-32.2 Certification by CFO Section 906   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 31,2007


2006(Unaudited)ASSETSInvestment in real estate

$
887,632


$
1,213,562Cash and cash equivalents


20,187



36,935Accounts receivable, net


13,631



25,839Notes receivable


112,951



26,029Prepaid pension asset


102,961



100,867Property, plant and equipment, net


42,489



44,593Goodwill, net


26,287



35,233Other intangible assets, net


2,645



32,669Other assets


31,626



44,668Assets held for sale


93,868



$
1,334,277


$
1,560,395LIABILITIES AND
    STOCKHOLDERS EQUITYLIABILITIES:Debt

$
428,526


$
627,056Accounts payable


97,909



117,131Accrued liabilities


73,041



123,496Income tax payable


72,937



9,984Deferred income taxes


102,283



211,115Liabilities associated with assets
    held for sale


60,384



Total liabilities


835,080



1,088,782Minority interest in consolidated
    subsidiaries


7,378



10,533STOCKHOLDERS EQUITY:Common stock, no par value;
    180,000,000 shares authorized; 104,498,861 and 104,372,697
    issued at June 30, 2007 and December 31, 2006,
    respectively


317,421



308,060Retained earnings


1,099,576



1,078,312Accumulated other comprehensive
    income


(688
)


(1,033
)Treasury stock at cost, 30,104,211
    and 30,100,032 shares held at June 30, 2007 and
    December 31, 2006, respectively


(924,490
)


(924,259
)Total stockholders equity


491,819



461,080$
1,334,277


$
1,560,395    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 30,2007


2006


2007


2006Revenues:Real estate sales

$
89,423


$
120,207


$
171,785


$
220,703Rental revenues


1,723



1,320



2,912



2,377Timber sales


9,458



7,829



16,427



16,317Other revenues


12,811



12,471



19,445



20,093Total revenues


113,415



141,827



210,569



259,490Expenses:Cost of real estate sales


66,456



63,238



92,913



122,801Cost of rental revenues


1,456



960



2,596



1,797Cost of timber sales


7,240



6,357



13,189



12,218Cost of other revenues


11,401



12,093



19,438



20,049Other operating expenses


16,454



15,717



31,458



33,084Corporate expense, net


9,169



13,636



17,062



29,315Depreciation and amortization


4,638



5,091



9,670



9,941Restructuring charge


(161
)






2,996



Total expenses


116,653



117,092



189,322



229,205Operating profit (loss)


(3,238
)


24,735



21,247



30,285Other income (expense):Investment income, net


1,399



1,074



2,673



2,922Interest expense


(6,474
)


(3,141
)


(11,174
)


(5,013
)Other, net


500



1,949



4,700



300Gain on disposition of assets


7,633







7,633



Total other income (expense)


3,058



(118
)


3,832



(1,791
)Income (loss) from continuing
    operations before equity in income of unconsolidated affiliates,
    income taxes, and minority interest


(180
)


24,617



25,079



28,494Equity in income of unconsolidated
    affiliates


51



2,664



958



5,424Income tax expense (benefit)


(139
)


9,803



6,174



11,622Income from continuing operations
    before minority interest


10



17,478



19,863



22,296Minority interest


371



2,733



754



4,877Income (loss) from continuing
    operations


(361
)


14,745



19,109



17,419Discontinued operations:Income from discontinued operations
    (net of income tax expense of $1,415, $906, $1,544 and $1,526,
    respectively)


2,344



1,511



2,557



2,543Gain on sales of discontinued
    operations (net of income tax expense of $14,090, $1,637,
    $14,090 and $1,637, respectively)


23,335



2,728



23,335



2,728Income from discontinued operations


25,679



4,239



25,892



5,271Net income

$
25,318


$
18,984


$
45,001


$
22,690EARNINGS PER SHAREBasicIncome (loss) from continuing
    operations

$



$
0.20


$
0.26


$
0.23Income from discontinued operations

$
0.34


$
0.05


$
0.35


$
0.07Net income

$
0.34


$
0.25


$
0.61


$
0.30DilutedIncome (loss) from continuing
    operations

$



$
0.20


$
0.26


$
0.23Income from discontinued operations

$
0.34


$
0.05


$
0.34


$
0.07Net income

$
0.34


$
0.25


$
0.60


$
0.30    3




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##### Table of Contents



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





OtherOutstanding





Retained


ComprehensiveShares


Amount


Earnings


Income (loss)


Treasury Stock


TotalBalance at December 31, 2006


74,272,665


$
308,060


$
1,078,312


$
(1,033
)

$
(924,259
)

$
461,080Net income










45,001











45,001Amortization of pension and
    postretirement benefit costs, net of tax














345







345Comprehensive income






















45,346Issuances of restricted stock


113,333



















Forfeitures of restricted stock


(104,994
)


















Dividends ($0.32 per share)










(23,737
)










(23,737
)Issuances of common stock


117,825



3,524















3,524Excess tax benefit on options
    exercised and vested restricted stock






979















979Amortization of stock- based
    compensation






4,858















4,858Purchases of treasury shares


(4,179
)














(231
)


(231
)Balance at June 30, 2007


74,394,650


$
317,421


$
1,099,576


$
(688
)

$
(924,490
)

$
491,819    4




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##### Table of Contents



THE ST.
    JOE COMPANYCONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
    (Dollars in thousands)
  Six Months EndedJune 30,2007


2006Cash flows from operating
    activities:Net income

$
45,001


$
22,690Adjustments to reconcile net
    income to net cash used in operating activities:Depreciation and amortization


14,011



20,276Stock-based compensation


4,858



9,330Minority interest in income


754



4,877Equity in income of unconsolidated
    affiliates


(1,160
)


(5,583
)Distributions of income from
    unconsolidated affiliates


710



5,705Deferred income tax benefit


(108,488
)


(58,054
)Impairment losses


2,196



Cost of operating properties sold


99,682



193,472Expenditures for operating
    properties


(127,910
)


(349,294
)Write-off of capitalized home
    building costs


705



Gains on dispositions of assets


(45,053
)


(4,365
)Changes in operating assets and
    liabilities:Accounts receivable


12,215



(1,573
)Notes receivable and other assets


(12,301
)


866Accounts payable and accrued
    liabilities


(68,391
)


(1,111
)Income taxes payable


62,953



23,157Net cash used in operating
    activities


(120,218
)


(139,607
)Cash flows from investing
    activities:Purchases of property, plant and
    equipment


(5,693
)


(2,188
)Purchases of investments in real
    estate


(13,315
)


(3,954
)Purchases of short-term
    investments, net of maturities and redemptions






(7
)Contributions to investments in
    unconsolidated affiliates


(496
)


(1,046
)Proceeds from sale of discontinued
    operations


307,126



17,275Maturities and redemptions of
    investments, held to maturity


12



Net cash provided by investing
    activities


287,634



10,080Cash flows from financing
    activities:Net (payments) borrowings from
    revolving credit agreements


(40,000
)


50,000Proceeds from other long-term debt






26Repayments of other long-term debt


(120,790
)


(4,630
)Distributions to minority interests


(3,909
)


(5,989
)Proceeds from exercises of stock
    options


3,524



1,723Dividends paid to stockholders


(23,737
)


(23,931
)Excess tax benefits from
    stock-based compensation


979



644Treasury stock purchases


(231
)


(47,429
)Net cash used in financing
    activities


(184,164
)


(29,586
)Net decrease in cash and cash
    equivalents


(16,748
)


(159,113
)Cash and cash equivalents at
    beginning of period


36,935



202,605Cash and cash equivalents at end
    of period

$
20,187


$
43,492    5




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##### Table of Contents



THE ST.
    JOE COMPANY
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
  1.
    Basis of
    Presentation  Form 10-Q. Form 10-K.
  Employers Accounting for Defined Pension
    and Other Postretirement Plans  An Amendment of
    SFAS Statements No. 87, 88, 106 and 132R Form 10-K
  2.
    Summary
    of Significant Accounting Policies  Stock-Based
    Compensation
  Share-Based Payment Accounting for
    Stock-Based Compensation Accounting for Stock
    Issued to Employees
  Stock
    Options and Non-vested Restricted Stock
   6




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2007

2006Per share weighted-average fair
    value

$17.35


(1
)Expected dividend yield

1.11% -1.18%


(1
)Risk free interest rate

4.59% - 4.88%


(1
)Weighted average expected
    volatility

22.65% - 22.90%


(1
)Expected life (in years)

7


(1
)     (1)
    
    No options were granted in the six month period ended
    June 30, 2006.    Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006Stock option expense

$
618


$
892


$
971


$
1,885Restricted stock expense


2,256



3,846



3,888



7,445Employee stock purchase plan
    expense


48



71



58



120Total

$
2,922


$
4,809


$
4,917


$
9,450    7




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Number of


Weighted AverageOptions


Exercise PriceBalance at December 31, 2006


780,909


$
32.42Granted


112,101



55.00Forfeited


(38,246
)


46.31Exercised


(117,825
)


29.90Balance at June 30, 2007


736,939


$
35.54       Weighted Average


Range of


Weighted AverageNumber of Options Outstanding

Remaining Contractual Life


Exercise Prices


Exercise Price64,220


2 years


$
15.96-$23.94


$
18.56461,575


5 years


$
23.95-$35.91


$
29.7820,300


7 years


$
35.92-$53.86


$
39.96190,844


10 years


$
53.87-$57.63


$
54.70736,939


6 years


$
15.96-$57.63


$
35.54     Weighted Average


Range of


Weighted AverageNumber of Options Exercisable

Remaining Contractual Life


Exercise Prices


Exercise Price64,220


2 years


$
15.96-$23.94


$
18.56417,400


5 years


$
23.95-$35.91


$
29.4713,050


7 years


$
35.92-$53.86


$
39.82494,670


5 years


$
15.96-$53.86


$
28.33      8




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##### Table of Contents



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


Grant Date FairNon-Vested Restricted Shares

Shares


ValueBalance at December 31, 2006


622,346


$
46.20Granted


113,333



54.74Forfeited


(104,994
)


53.86Vested


(30,515
)


56.87Balance at June 30, 2007


600,170


$
45.93         Employee
    Stock Purchase Plan
    Earnings
    Per Share
       9




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##### Table of Contents



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


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Basic


73,777,169



73,826,233



73,733,328



73,905,062Diluted


74,301,802



74,540,823



74,279,799



74,740,791   Supplemental
    Cash Flow Information
    2007


2006Interest paid

$
21.7


$
16.6Income taxes paid (net of refunds)


105.9



49.0Capitalized interest


5.1



8.2     2007


2006Issuance of restricted stock

$
0.5


$
0.8Net increase in Community
    Development District Debt


18.7



15.1Extinguishment of debt in
    connection with joint venture






(10.7
)Increase of note payable on land
    purchase


1.6



1.1Increase of notes receivable on
    land sale and sale of subsidiary(1)


86.7



     (1)
    
    Amount includes notes receivable totaling $46.4 million
    issued in connection with sale of approximately
    33,000 acres of timber land in southwest Georgia and
    $40.3 million note receivable in connection with the sale
    of Saussy Burbank.     10




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restructuring
    Residential Real


Commercial Real


Rural LandEstate


Estate


Sales


Forestry


Other


TotalWrite-off of capitalized
    homebuilding costs

$
0.7


$



$



$



$



$
0.7One-time termination benefits to
    employees


0.4



0.1



1.3







0.5



2.3Total restructuring charges, pretax

$
1.1


$
0.1


$
1.3


$



$
0.5


$
3.0       Residential Real


Commercial Real


Rural LandEstate


Estate


Sales


Forestry


Other


TotalWrite-off of capitalized
    homebuilding costs

$
10.0


$



$



$



$



$
10.0One-time termination benefits to
    employees


3.4



0.2



1.5







1.3



6.4Total restructuring charges, pretax

$
13.4


$
0.2


$
1.5


$



$
1.3


$
16.4     Balance at











Balance atDecember 31,


Costs


Non-cash





June 30,


Due within


Due after2006


Accrued


Adjustments


Payments


2007


12 months


12 monthsWrite-off of capitalized
    homebuilding costs

$



$
0.7


$
(0.7
)

$



$



$



$
One-time termination benefits to
    employees

$
1.3



2.3







(2.9
)


0.7



0.7



Total

$
1.3


$
3.0


$
(0.7
)

$
(2.9
)

$
0.7


$
0.7


$
   Dispositions
    of Assets
   11




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006Commercial Buildings:Aggregate revenues

$
8,026


$
9,960


$
16,918


$
21,088Pre-tax income (loss)


2,926



(809
)


2,166



(1,138
)Pre-tax gain on sale


37,633



4,365



37,633



4,365Income taxes


15,270



1,333



14,984



1,210Income from discontinued operations

$
25,289


$
2,223


$
24,815


$
2,017Saussy Burbank:Aggregate revenues

$
11,235


$
43,517


$
56,679


$
82,080Pre-tax income (loss)


832



3,226



1,934



5,207Pre-tax gain (loss) on sale


(207
)






(207
)


Income taxes


235



1,210



650



1,953Income from discontinued operations

$
390


$
2,016


$
1,077


$
3,254Total income from discontinued
    operations

$
25,679


$
4,239


$
25,892


$
5,271   Financial
    Instruments with Characteristics of Both Liabilities and
    Equity
  Accounting for Certain Financial
    Instruments with Characteristics of Both Liabilities and Equity
 12




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3.
    Investment
    in Real Estate    June 30, 2007


December 31, 2006Operating property:Residential real estate

$
123,054


$
104,341Commercial real estate


9,356



9,366Rural land sales


139



197Forestry


89,946



135,932Other


247



61Total operating property


222,742



249,897Development property:Residential real estate


604,293



623,483Commercial real estate


56,470



56,669Rural land sales


7,795



7,996Other


351



294Total development property


668,909



688,442Investment property:Commercial real estate


1,789



311,362Rural land sales


293



412Forestry


1,495



1,372Other


5,979



7,645Total investment property


9,556



320,791Investment in unconsolidated
    affiliates:Residential real estate


10,352



9,406Total real estate investments


911,559



1,268,536Less: Accumulated depreciation


23,927



54,974Investment in real estate
    investments

$
887,632


$
1,213,562      13




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  4.
    Debt    June 30, 2007


December 31, 2006Senior revolving credit agreement

$
20,000


$
60,000Senior notes


240,000



307,000Debt secured by certain commercial
    and residential property


64,526



156,056Bridge loan


100,000



100,000Various secured and unsecured
    notes payable


4,000



4,000Total debt

$
428,526


$
627,056       2007

$
120.02008


4.02009


26.12010


35.92011


10.0Thereafter


232.5Total

$
428.5       5.
    Employee
    Benefit Plans    Three Months Ended


Six Months EndedJune 30, 2007


June 30, 2006


June 30, 2007


June 30, 2006Service cost

$
1,059


$
1,225


$
2,118



2,450Interest cost


2,073



2,190



4,146



4,380Expected return on assets


(4,246
)


(4,657
)


(8,493
)


(9,315
)Prior service costs


171



180



342



360Curtailment charge










135



Total pension (credit) expense

$
(943
)

$
(1,062
)

$
(1,752
)

$
(2,125
)  14




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  6.
    Income
    Taxes  Accounting for Uncertainty in Income Taxes
    Form 10-K
  7.
    Segment
    Information      Form 10-K.
   15




---



##### Table of Contents



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


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Operating Revenues:Residential real estate

$
44,494


$
101,383


$
81,504


$
191,120Commercial real estate


6,566



6,195



13,074



10,000Rural land sales


52,908



26,427



99,584



42,069Forestry


9,447



7,822



16,407



16,301Consolidated operating revenues

$
113,415


$
141,827


$
210,569


$
259,490Income (loss) from continuing
    operations before equity in income of unconsolidated affiliates,
    income taxes and minority interest:Residential real estate

$
(816
)

$
17,203


$
(6,217
)

$
27,407Commercial real estate


8,373



1,692



8,435



2,244Rural land sales


7,170



22,114



47,542



33,517Forestry


1,449



948



1,890



2,983Other


(16,356
)


(17,340
)


(26,571
)


(37,657
)Consolidated income (loss) from
    continuing operations before equity in income of unconsolidated
    affiliates, income taxes and minority interest

$
(180
)

$
24,617


$
25,079


$
28,494   June 30, 2007


December 31, 2006Total Assets:Residential real estate

$
856,629


$
838,773Commercial real estate


70,068



389,840Rural land sales


60,275



30,907Forestry


104,338



149,323Corporate


149,099



151,552Assets held for sale


93,868



Total Assets

$
1,334,277


$
1,560,395    16




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    June 30, 2007Assets held for sale:Investment in real estate

$
74,387Intangible assets


13,792Other assets


5,689Total assets held for sale

$
93,868Liabilities associated with assets
    held for sale:Accrued liabilities


2,340Debt


58,044Total liabilities associated with
    assets held for sale

$
60,384   8.
    Contingencies  Accounting for Contingencies
      Guarantors Accounting
    and Disclosure Requirements for Guarantees, Including Indirect
    Guarantees of Indebtedness of Others.
       17




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      9.
    Subsequent
    Event   18




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  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;
    brokerage, title issuance and mortgage origination fees on
    certain transactions within our residential real estate
    developments; and
    management fees.      
    the sale of parcels of undeveloped land; and
    the sale of rural land with limited development.    
    the sale of pulpwood and timber; and
    the sale of forest products.       19




---



##### Table of Contents



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 closings 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 or building
    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 we pay; and
    the number or dollar amount of shares of Company stock which may
    be purchased under our existing or future share-repurchase
    program.  Form 10-Q.
  Form 10-K
  
    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;
    changes in the demographics affecting projected population
    growth in Florida, including the demographic migration of Baby
    Boomers; 20




---



##### Table of Contents




    changes in perceptions or conditions in the national real estate
    market or the real estate markets in the states and regions in
    which we operate;
    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;
    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 and
    rentals;
    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;
    changes in interest rates and the performance of the financial
    markets;
    changes in market rental rates for our commercial and resort
    properties;
    changes in the prices or availability of wood products;
    the pace of development of public infrastructure, particularly
    in Northwest Florida, including a proposed new airport in Bay
    County, which is dependent on various regulatory approvals and
    permits and the availability of adequate funding;
    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;
    natural disasters, including hurricanes and other severe weather
    conditions, and the impact on current and future demand for our
    products in Florida;
    the prices and availability of labor and building materials;
    changes in insurance rates and deductibles for property in
    Florida, particularly in coastal areas;
    changes in real estate property taxes in Florida;
    changes in gasoline prices; and
    acts of war, terrorism, or other geopolitical events.  Critical
    Accounting Estimates
   21




---



##### Table of Contents



Form 10-K
  Recently
    Issued Accounting Pronouncements
  Fair Value Measurements
  No. 06-8 ,
    Applicability of the Assessment of a Buyers Continuing
    Investment under FAS No. 66 for the Sale of
    Condominiums (EITF 06-8). EITF 06-8 states paragraphs 8-12 paragraphs 65-67 EITF 06-8 EITF 06-8 EITF 06-8,
  The Fair Value Option for
    Financial Assets and Financial Liabilities
  No. FIN 48-1, Definition of Settlement in FASB Interpretation No. 48 FIN 48-1), FIN 48-1.
  EITF
    Issue
    No. 06-11
     Accounting for Income Tax Benefits of Dividends on
    Share  Based Payment Awards (EITF 06-11). EITF 06-11 states EITF 06-11 EITF 06-11
 22




---



##### Table of Contents



Results
    of Operations
           23




---



##### Table of Contents



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


Six Months Ended June 30,2007


2006


Difference


% Change


2007


2006


Difference


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

$
89.4


$
120.2


$
(30.8
)


(26
)%

$
171.8


$
220.7


$
(48.9
)


(22
)%Rental revenues


1.7



1.3



0.4



31



2.9



2.4



0.5



21Timber sales


9.5



7.8



1.7



22



16.4



16.3



0.1



1Other revenues


12.8



12.5



0.3



2



19.4



20.1



(0.7
)


(3
)Total


113.4



141.8



(28.4
)


(20
)


210.5



259.5



(49.0
)


(19
)Expenses:Cost of real estate sales


66.4



63.2



3.2



5



92.9



122.8



(29.9
)


(24
)Cost of rental revenues


1.5



1.0



0.5



50



2.6



1.8



0.8



44Cost of timber sales


7.2



6.4



0.8



13



13.2



12.2



1.0



8Cost of other revenues


11.4



12.1



(0.7
)


(6
)


19.4



20.0



(0.6
)


(3
)Other operating expenses


16.4



15.7



0.7



4



31.4



33.0



(1.6
)


(5
)Total

$
102.9


$
98.4


$
4.5



5
%

$
159.5


$
189.8


$
(30.3
)


(16
)%     Corporate expense.
  Restructuring charge.
 24




---



##### Table of Contents



Other income (expense).
  Gain on disposition of assets.
  Equity in income of unconsolidated
    affiliates.
  Income tax expense.
  Discontinued Operations.
  Segment
    Results
  Residential
    Real Estate
         25




---



##### Table of Contents



11-unit
                  123-acre
     26




---



##### Table of Contents




    the necessary entitlements for development will be secured;
    any of our projects can be successfully developed, if at
    all; or
    our projects can be developed in a timely manner.      Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006(In millions)Revenues:Real estate sales

$
30.8


$
88.5


$
61.0


$
170.6Rental revenue


1.0



0.6



1.2



0.8Other revenues


12.7



12.3



19.4



19.7Total revenues


44.5



101.4



81.6



191.1Expenses:Cost of real estate sales


18.4



58.7



37.5



116.1Cost of rental revenue


0.9



0.5



1.3



0.8Cost of other revenues


11.4



12.1



19.4



20.1Other operating expenses


12.9



10.6



24.3



22.2Depreciation and amortization


2.8



2.8



5.6



5.2Restructuring charge


(0.2
)






1.1



Total expenses


46.2



84.7



89.2



164.4Other income


0.9



0.6



1.5



0.8Pre-tax (loss ) income from
    continuing operations before equity in income of unconsolidated
    affiliates, income taxes and minority interest

$
(0.8
)

$
17.3


$
(6.1
)

$
27.5   15-day
 27




---



##### Table of Contents



Three
    Months Ended June 30, 2007 and 2006
    Three Months Ended June 30, 2007


Three Months Ended June 30, 2006Homes


Home Sites


Total


Homes


Home Sites


Total(Dollars in millions)Sales

$
14.1


$
16.6


$
30.7


$
78.7


$
9.7


$
88.4Cost of sales:Direct costs


7.6



6.1



13.7



46.8



2.9



49.7Selling costs


0.8



0.6



1.4



3.6



0.3



3.9Other indirect costs


2.5



0.8



3.3



4.8



0.3



5.1Total cost of sales


10.9



7.5



18.4



55.2



3.5



58.7Gross profit

$
3.2


$
9.1


$
12.3


$
23.5


$
6.2


$
29.7Gross profit margin


23
%


55
%


40
%


30
%


64
%


34
%    28




---



##### Table of Contents



Three Months Ended June 30, 2007


Three Months Ended June 30, 2006Closed





Cost of


Gross


Closed





Cost of


GrossUnits


Revenues


Sales


Profit


Units


Revenues


Sales


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


3


$
4.5


$
3.5


$
1.0



2


$
1.8


$
1.5


$
0.3Home sites


18



10.3



3.4



6.9



18



7.4



2.6



4.8PrimarySingle-family homes


9



2.4



1.8



0.6



65



20.8



15.9



4.9Townhomes


1



0.2



0.1



0.1



21



3.3



2.4



0.9Home sites


76



6.3



4.1



2.2



19



1.3



0.4



0.9Northeast Florida:PrimarySingle-family homes


1



0.4



0.4







17



9.1



6.8



2.3Central Florida:PrimarySingle-family homes


6



4.4



3.4



1.0



52



25.3



15.3



10.0Multi-family homes


1



0.5



0.4



0.1



49



11.1



7.2



3.9Townhomes


3



1.7



1.3



0.4



25



7.3



6.1



1.2Home sites


















6



1.0



0.5



0.5Total


118


$
30.7


$
18.4


$
12.3



274


$
88.4


$
58.7


$
29.7          29




---



##### Table of Contents



Six
    Months Ended June 30, 2007 and 2006
    Six Months Ended June 30, 2007


Six Months Ended June 30, 2006Homes


Home Sites


Total


Homes


Home Sites


Total(Dollars in millions)Sales

$
32.1


$
28.9


$
61.0


$
152.3


$
18.1


$
170.4Cost of sales:Direct costs


18.6



10.5



29.1



92.2



5.6



97.8Selling costs


1.6



1.1



2.7



7.1



0.6



7.7Other indirect costs


4.5



1.3



5.8



10.0



0.6



10.6Total cost of sales


24.7



12.9



37.6



109.3



6.8



116.1Gross profit

$
7.4


$
16.0


$
23.4


$
43.0


$
11.3


$
54.3Gross profit margin


23
%


55
%


38
%


28
%


62
%


32
%    30




---



##### Table of Contents



Six Months Ended June 30, 2007


Six Months Ended June 30, 2006Closed





Cost of


Gross


Closed





Cost of


GrossUnits


Revenues


Sales


Profit


Units


Revenues


Sales


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


6


$
9.9


$
7.1


$
2.8



7


$
6.7


$
4.9


$
1.8Home sites


31



17.1



5.3



11.8



24



10.9



3.7



7.2PrimarySingle-family homes


14



4.2



3.5



0.7



129



40.1



31.0



9.1Townhomes


2



0.4



0.1



0.3



43



6.7



5.3



1.4Home sites


137



11.2



7.3



3.9



55



4.1



1.7



2.4Northeast Florida:PrimarySingle-family homes


7



3.3



3.1



0.2



31



16.0



11.8



4.2Home sites


2



0.3



0.2



0.1



6



0.9



0.4



0.5Central Florida:PrimarySingle-family homes


15



9.4



7.2



2.2



102



47.9



30.9



17.0Multi-family homes


25



0.8



0.6



0.2



65



21.9



14.4



7.5Townhomes


7



4.1



3.1



1.0



46



13.0



11.0



2.0Home sites


1



0.3



0.1



0.2



10



2.2



1.0



1.2Total


247


$
61.0


$
37.6


$
23.4



518


$
170.4


$
116.1


$
54.3        31




---



##### Table of Contents



Discontinued
    Operations
   32




---



##### Table of Contents



Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006(In millions)Revenues:Real estate sales

$
11.2


$
43.5


$
56.7


$
82.1Expenses:Cost of real estate sales


9.8



38.0



49.7



72.0Other operating expenses


0.7



2.4



3.1



5.1Impairment loss










2.2



Total expenses


10.5



40.4



55.0



77.1Equity in income of unconsolidated
    affiliate


0.1



0.1



0.2



0.2Pre-tax income from discontinued
    operations

$
0.8


$
3.2


$
1.9


$
5.2Income tax expense


0.3



1.2



0.7



1.9Income from discontinued
    operations, net of tax


0.5



2.0



1.2



3.3Loss on sale, net of tax


(0.1
)






(0.1
)


Income from discontinued
    operations, net of tax

$
0.4


$
2.0


$
1.1


$
3.3   Commercial
    Real Estate
   33




---



##### Table of Contents



Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006(In millions)Revenues:Real estate sales

$
5.7


$
5.2


$
11.3


$
8.1Rental revenues


0.7



0.8



1.7



1.5Other revenues


0.1



0.2



0.1



0.4Total revenues


6.5



6.2



13.1



10.0Expenses:Cost of real estate sales


3.7



2.5



7.4



3.2Cost of rental revenues


0.6



0.4



1.3



0.9Other operating expenses


1.5



1.8



2.9



3.9Depreciation and amortization


0.2



0.6



0.8



1.3Total expenses


6.0



5.3



12.4



9.3Other income


7.8



0.9



7.8



1.6Pre-tax income from continuing
    operations

$
8.3


$
1.8


$
8.5


$
2.3   Real Estate Sales.
  Number of


Acres


Average Price


Gross





Gross ProfitLand

Sales


Sold


per Acre


Proceeds


Revenue


on Sales(In thousands)


(In millions)Three Months Ended June 30,
    2007:Northwest Florida


6



24


$
204.2


$
5.0


$
4.6
(a)

$
1.8
(a)Other


1



4



283.1



1.1



1.1



0.2Total/Average


7



28


$
215.2


$
6.1


$
5.7
(a)

$
2.0
(a)Three Months Ended June 30,
    2006:Northwest Florida


5



34


$
282.0


$
9.5


$
5.2
(b)

$
2.7
(b)Other






















Total/Average


5



34


$
282.0


$
9.5


$
5.2
(b)

$
2.7
(b)Six Months Ended June 30,
    2007:Northwest Florida


12



38


$
183.8


$
6.9


$
6.9
(a)

$
2.9
(a)Other


4



22



194.1



4.4



4.4



1.0Total/Average


16



60


$
187.7


$
11.3


$
11.3
(a)

$
3.9
(a)Six Months Ended June 30,
    2006:Northwest Florida


11



47


$
246.0


$
11.6


$
8.1
(b)

$
4.9
(b)Other






















Total/Average


11



47


$
246.0


$
11.6


$
8.1
(b)

$
4.9
(b)   (a)
    
    Net of 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. 34




---



##### Table of Contents



(b)
    
    Net of deferred revenue and gain on sales, based on
    percentage-of-completion accounting, of $4.3 million and
    $1.5 million and $3.5 million and $1.0 million,
    respectively, for the three months and the six months ended
    June 30, 2006.  per-acre
  Dispositions
    of Assets
      Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006(In millions)Aggregate revenues

$
0.7


$
0.7


$
1.5


$
1.4Pre-tax income (loss) from
    continuing operations


0.3



(0.2
)






(0.6
)Pre-tax gain on sale


7.6







7.6



Income tax expense (benefit)


3.0



(0.1
)


2.5



(0.2
)Total income (loss) from
    continuing operations, net of tax

$
4.9


$
(0.1
)

$
5.1


$
(0.4
)     Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006(In millions)Aggregate revenues

$
8.0


$
10.0


$
16.9


$
21.1Pre-tax income (loss) from
    discontinued operations


2.9



(0.8
)


2.2



(1.1
)Pre-tax gain on sale


37.6



4.3



37.6



4.3Income tax expense


15.2



1.3



15.0



1.2Total income from discontinued
    operations, net of tax

$
25.3


$
2.2


$
24.8


$
2.0    35




---



##### Table of Contents



Rural
    Land Sales
      Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006(In millions)Revenues:Real estate sales

$
52.9


$
26.4


$
99.6


$
42.1Expenses:Cost of real estate sales


44.4



1.9



48.1



3.4Other operating expenses


1.3



2.7



2.9



5.7Depreciation and amortization


0.1



0.1



0.1



0.1Restructuring charge










1.3



Total expenses


45.8



4.7



52.4



9.2Other income






0.4



0.3



0.6Pre-tax income from continuing
    operations

$
7.1


$
22.1


$
47.5


$
33.5     Number of


Number of


Average Price


GrossSales


Acres


per Acre


Sales Price


Gross Profit(In millions)


(In millions)Three Months Ended June 30:2007


15



34,730


$
1,523


$
52.9


$
8.52006


23



8,409


$
3,143


$
26.4


$
24.5Six Months Ended June 30:2007


26



66,025


$
1,508


$
99.6


$
51.52006


49



13,450


$
3,128


$
42.1


$
38.7      36




---



##### Table of Contents



Forestry
    Three Months Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006(In millions)Revenues:Timber sales

$
9.4


$
7.8


$
16.4


$
16.3Expenses:Cost of timber sales


7.2



6.3



13.2



12.2Other operating expenses


0.7



0.6



1.3



1.2Depreciation and amortization


0.7



0.8



1.2



1.6Total expenses


8.6



7.7



15.7



15.0Other income


0.6



0.8



1.2



1.7Pre-tax income from continuing
    operations

$
1.4


$
0.9


$
1.9


$
3.0   Three
    Months Ended June 30, 2007 and 2006
        Six
    Months Ended June 30, 2007 and 2006
   37




---



##### Table of Contents



Liquidity
    and Capital Resources
    
    Operations;
    Sales of land holdings, other assets and subsidiaries;
    Borrowings from financial institutions and other debt; and
    Issuances of equity, primarily from the exercise of employee
    stock options.    
    Operations;
    Real estate development;
    Construction and homebuilding;
    Repurchases of our common stock;
    Payments of dividends;
    Repayments of debt;
    Payments of taxes; and
    Investments in joint ventures and acquisitions.    and/or
  Cash
    Flows from Operating Activities
   38




---



##### Table of Contents



Cash
    Flows from Investing Activities
      Cash
    Flows from Financing Activities
   39




---



##### Table of Contents



91-10, Accounting for Special Assessments and Tax Increment
    Financing
      Off-Balance
    Sheet Arrangements
  Regulation S-K.
  Contractual
    Obligations and Commercial Commitments
   40




---



##### Table of Contents



Form 10-K
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk    Form 10-K
  Item 4.
    Controls
    and Procedures  Evaluation of Disclosure Controls and
    Procedures. Rules 13a-15(e) 15d-15(e)
  Changes in Internal Controls.
 41




---



##### Table of Contents



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings   Item 1A.  Risk
    Factors  Form 10-K
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds  Issuer
    Purchases of Equity Securities
  (c)


(d)Total Number of


Maximum DollarShares Purchased


Amount that(a)


(b)


as Part of Publicly


May Yet BeTotal Number


Average


Announced Plans


Purchased Underof Shares


Price Paid


or Programs


the Plans orPeriod

Purchased


per Share


(1)


Programs(In thousands)Month Ended April 30, 2007





$







$
103,793Month Ended May 31, 2007





$







$
103,793Month Ended June 30, 2007





$







$
103,793     (1)
    
    For a description of our Stock Repurchase Program, see
    Part I, Item 2, Liquidity and Capital
    Resources  Cash Flows from Financing Activities.  Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders        Name of Nominee

For


WithheldMichael L. Ainslie


67,188,682



339,957Hugh M. Durden


61,718,108



5,810,531Thomas A Fanning


67,194,511



334,128Harry H. Frampton, III


67,197,871



330,768Dr. Adam W. Herbert, Jr.


67,188,294



340,345Delores M. Kesler


67,168,953



359,686John S. Lord


61,725,946



5,802,693Walter L. Revell


66,253,089



1,275,550Peter S. Rummell


67,253,089



477,672William H. Walton, III


67,192,012



336,628     For


Against


Abstain67,240,221



236,765



51,653   Item 5.
    Other
    Information   42




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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

Second Amendment to Third Amended
    and Restated Credit Agreement ($500 million revolving
    credit facility) dated June 28, 2007 (incorporated by
    reference to Exhibit 10.1 to the registrants Current
    Report on
    Form 8-K
    filed July 3, 2007).10
.2

First Amendment to Credit
    Agreement and Note Modification Agreements ($100 million
    term loan) dated June 28, 2007 (incorporated by reference
    to Exhibit 10.2 to the registrants Current Report on
    Form 8-K
    filed July 3, 2007).10
.3

Third Amendment to 2002 Note
    Purchase Agreements dated July 30, 2007, by and among the
    registrant and the holders of the registrants 2002 Senior
    Notes party thereto (incorporated by reference to
    Exhibit 10.1 to the registrants Current Report on
    Form 8-K
    filed July 30, 2007).10
.4

First Amendment to 2005 Note
    Purchase Agreements dated July 30, 2007, by and among the
    registrant and the holders of the registrants 2005 Senior
    Notes party thereto (incorporated by reference to
    Exhibit 10.2 to the registrants Current Report on
    Form 8-K
    filed July 30, 2007).31
.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.  43




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##### Table of Contents



SIGNATURES    The St.
    Joe CompanyDate:  August 9, 2007

/s/  Peter
    S. RummellPeter S. RummellChairman and Chief Executive OfficerDate:  August 9, 2007

/s/  Janna
    L. ConnollyJanna L. ConnollyChief Accounting Officer  44