##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, 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, 2006o

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(State or other
    jurisdiction of
    incorporation or organization)

59-0432511(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:




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##### 



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


Financial
    Statements


2Consolidated
    Balance Sheets  June 30, 2006 and
    December 31, 2005


2Consolidated
    Statements of Income  Three and Six months ended
    June 30, 2006 and 2005


3Consolidated
    Statement of Changes in Stockholders Equity 
    Six months ended June 30, 2006


4Consolidated
    Statements of Cash Flows-Six months ended June 30, 2006 and
    2005


5Notes to
    Consolidated Financial Statements


6Item 2.


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


16Item 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


40Item 6.


Exhibits


40Signatures


41EX-31.1 Section 302 Certification of C.E.O.EX-31.2 Section 302 Certification of C.F.O.EX-32.1 Section 906 Certification of C.E.O.EX-32.2 Section 906 Certification of C.F.O.   1




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##### Table of Contents



PART I.
    FINANCIAL INFORMATION  Item 1.
    Financial
    Statements  THE ST.
    JOE COMPANY
 CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands) June 30,


December 31,2006


2005ASSETSInvestment in real estate

$
1,192,867


$
1,036,174Cash and cash equivalents


43,492



202,605Accounts receivable, net


60,205



58,905Prepaid pension asset


96,972



95,044Property, plant and equipment, net


37,699



40,176Goodwill, net


36,733



36,733Other intangible assets, net


40,739



46,385Other assets


63,080



75,924$
1,571,787


$
1,591,946LIABILITIES AND
    STOCKHOLDERS EQUITYLIABILITIES:Debt

$
605,340


$
554,446Accounts payable


76,144



75,309Accrued liabilities


136,523



135,156Income tax payable


27,056



3,931Deferred income taxes


257,890



315,912Total liabilities


1,102,953



1,084,754Minority interest in consolidated
    subsidiaries


17,082



18,194STOCKHOLDERS EQUITY:Common stock, no par value;
    180,000,000 shares authorized; 104,000,236 and 103,931,705
    issued at June 30, 2006 and December 31, 2005,
    respectively


292,667



280,970Retained earnings


1,073,749



1,074,990Treasury stock at cost, 29,908,111
    and 29,003,415 shares held at June 30, 2006 and
    December 31, 2005, respectively


(914,664
)


(866,962
)Total stockholders equity


451,752



488,998$
1,571,787


$
1,591,946    2




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##### Table of Contents



THE ST.
    JOE COMPANY
 CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands except per share amounts) Three Months Ended June 30,


Six Months Ended June 30,2006


2005


2006


2005Revenues:Real estate sales

$
163,648


$
228,349


$
302,682


$
386,878Rental revenues


10,677



9,750



22,268



19,164Timber sales


7,829



7,565



16,317



15,603Other revenues


12,548



14,055



20,194



22,230Total revenues


194,702



259,719



361,461



443,875Expenses:Cost of real estate sales


101,207



142,557



194,833



247,534Cost of rental revenues


4,514



3,945



8,785



7,466Cost of timber sales


6,357



4,914



12,218



10,121Cost of other revenues


12,205



11,818



20,239



19,837Other operating expenses


18,233



17,457



38,399



33,151Corporate expense, net


13,632



11,990



29,315



23,927Depreciation and amortization


9,691



9,234



19,916



18,435Total expenses


165,839



201,915



323,705



360,471Operating profit


28,863



57,804



37,756



83,404Other income (expense):Investment income, net


1,090



318



2,951



604Interest expense


(4,964
)


(3,401
)


(8,698
)


(5,731
)Other, net


1,949



936



300



1,918Total other income (expense)


(1,925
)


(2,147
)


(5,447
)


(3,209
)Income from continuing operations
    before equity in income of unconsolidated affiliates, income
    taxes, and minority interest


26,938



55,657



32,309



80,195Equity in income of unconsolidated
    affiliates


2,739



5,521



5,582



7,425Income tax expense


10,701



22,289



13,112



32,021Income from continuing operations
    before minority interest


18,976



38,889



24,779



55,599Minority interest


2,733



1,166



4,877



2,034Income from continuing operations


16,243



37,723



19,902



53,565Discontinued operations:Income (loss) from discontinued
    operations (net of income tax expense (benefit) of $8, $115, $36
    and $(144), respectively)


13



191



60



(239
)Gain on sales of discontinued
    operations (net of income taxes of $1,637)


2,728







2,728



Total income (loss) from
    discontinued operations


2,741



191



2,788



(239
)Net income


18,984



37,914



22,690



53,326EARNINGS PER SHAREBasicIncome from continuing operations

$
0.22


$
0.50


$
0.27


$
0.71Earnings from discontinued
    operations














Gain on sale of discontinued
    operations


0.03







0.03



Net income

$
0.25


$
0.50


$
0.30


$
0.71DilutedIncome from continuing operations

$
0.22


$
0.50


$
0.27


$
0.70Earnings from discontinued
    operations














Gain on sale of discontinued
    operations


0.03







0.03



Net income

$
0.25


$
0.50


$
0.30


$
0.70    3




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##### Table of Contents



THE ST.
    JOE COMPANY
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS
    EQUITY

(Dollars in thousands, except per share amounts) Common Stock


Retained


TreasuryOutstanding Shares


Amount


Earnings


Stock


TotalBalance at December 31, 2005


74,928,290


$
280,970


$
1,074,990


$
(866,962
)

$
488,998Comprehensive income:Net income










22,690







22,690Total comprehensive income


















22,690Issuances of restricted stock


48,913















Forfeitures of restricted stock


(39,933
)














Dividends ($0.32 per share)
    and other distributions










(23,931
)






(23,931
)Issuances of common stock


59,551



1,723











1,723Tax benefit on options exercised
    and vested restricted stock






644











644Amortization of stock-based
    compensation






9,330











9,330Purchases of treasury shares


(904,696
)










(47,702
)


(47,702
)Balance at June 30, 2006


74,092,125


$
292,667


$
1,073,749


$
(914,664
)

$
451,752    4




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##### Table of Contents



THE ST.
    JOE COMPANY
 CONSOLIDATED STATEMENTS OF CASH FLOW

(Dollars in thousands) Six Months EndedJune 30,2006


2005Cash flows from operating
    activities:Net income

$
22,690


$
53,326Adjustments to reconcile net
    income to net cash (used in) provided by operating activities:Depreciation and amortization


20,276



20,789Stock-based compensation


9,330



4,953Excess tax benefits from
    stock-based compensation


(644
)


Minority interest in income


4,877



2,034Equity in income of unconsolidated
    joint ventures


(5,583
)


(7,425
)Distributions of income from
    unconsolidated affiliates


5,705



9,368Deferred income tax (benefit)
    expense


(58,054
)


9,386Tax benefit on exercise of stock
    options






8,954Cost of operating properties sold


193,472



246,430Expenditures for operating
    properties


(349,294
)


(251,535
)Gains on sale of discontinued
    operations


(4,365
)


Changes in operating assets and
    liabilities:Accounts receivable


(1,573
)


(51,106
)Other assets


866



(19,701
)Accounts payable and accrued
    liabilities


(1,111
)


16,791Income taxes payable


23,801



9,053Net cash (used in) provided by
    operating activities

$
(139,607
)

$
51,317Cash flows from investing
    activities:Purchases of property, plant and
    equipment


(2,188
)


(14,728
)Purchases of investments in real
    estate


(3,954
)


(82,894
)Purchases of short-term
    investments, net of maturities and redemptions


(7
)


Investments in unconsolidated
    affiliates


(1,046
)


Proceeds from dispositions of
    assets






13Proceeds from sale of discontinued
    operations


17,275



Distributions of capital from
    unconsolidated affiliates






5,973Net cash provided by (used in)
    investing activities

$
10,080


$
(91,636
)Cash flows from financing
    activities:Proceeds from revolving credit
    agreements, net of repayments


50,000



50,000Proceeds from other long-term debt


26



1,350Repayments of other long-term debt


(4,630
)


(30,727
)Distributions to minority interests


(5,989
)


Proceeds from exercises of stock
    options


1,723



9,152Dividends paid to stockholders and
    other distributions


(23,931
)


(21,609
)Excess tax benefits from
    stock-based compensation


644



Treasury stock purchases


(47,429
)


(42,926
)Investment by minority interest
    partner






2,860Net cash used in financing
    activities

$
(29,586
)

$
(31,900
)Net decrease in cash and cash
    equivalents


(159,113
)


(72,219
)Cash and cash equivalents at
    beginning of period


202,605



94,816Cash and cash equivalents at end
    of period

$
43,492


$
22,597   See notes to consolidated financial
    statements.
 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.
  2.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
  Accounting for Certain Financial Instruments
    with Characteristics of Both Liabilities and Equity
  Stock-Based
    Compensation
  Share-Based
    Payment (SFAS 123R) Accounting for Stock-Based Compensation
    (SFAS 123) Accounting for Stock Issued to
    Employees (APB 25)
  Stock
    Options and Non-vested Restricted Stock
   6




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2006


2005Expected dividend yield


(1
)


0.78
%Risk free interest rate


(1
)


4.32
%Weighted average expected
    volatility


(1
)


23.0
%Expected life (in years)


(1
)


7   (1)
    
    No options were granted during the six-month period ended
    June 30, 2006.    Three Months Ended


Six Months EndedJune 30, 2006


June 30, 2006Stock option expense

$
892


$
1,885Non-vested restricted stock


3,846



7,445Employee stock purchase plan
    expense


71



120Total

$
4,809


$
9,450  7




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##### Table of Contents



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


Six Months EndedJune 30, 2005


June 30, 2005Net income:Net income as reported

$
37,914


$
53,326Add: stock-based compensation
    expense included in reported net income, net of related tax
    effects


1,238



2,431Deduct: total stock-based
    compensation expense determined under fair value based methods
    for all awards, net of related tax effects


(1,967
)


(3,886
)Net income  pro forma

$
37,185


$
51,871Per share  Basic:Earnings per share as reported

$
0.50


$
0.71Earnings per share  pro
    forma

$
0.50


$
0.69Per share  Diluted:Earnings per share as reported

$
0.50


$
0.70Earnings per share  pro
    forma

$
0.49


$
0.68     Number of


Weighted AverageShares


Exercise PriceBalance at December 31, 2005


1,051,451


$
30.63Granted






Forfeited


(25,500
)


31.45Exercised


(59,551
)


28.93Balance at June 30, 2006


966,400


$
30.71       Weighted Average


Range of

Weighted AverageNumber of Options Outstanding

Remaining Contractual Life


Exercise Prices

Exercise Price115,055





3 years


$15.96-$23.94

$
19.48782,345





6 years


$23.95-$35.91

$
29.8929,000





8 years


$35.92-$53.86

$
40.2140,000





8 years


$72.09

$
72.09966,400





6 years


$15.96-$72.09

$
30.71  8




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Weighted Average


Range of

Weighted AverageNumber of Options Exercisable

Remaining Contractual Life


Exercise Prices

Exercise Price115,055





3 years


$15.96-$23.94

$
19.48502,707





7 years


$23.95-$35.91

$
29.5214,500





8 years


$35.92-$53.86

$
40.21632,262





6 years


$15.96-$53.86

$
27.94     Weighted AverageNumber of


Grant Date FairNon-Vested Restricted Shares

Shares


ValueBalance at December 31, 2005


890,738


$
40.34Granted


48,913



57.28Forfeited


(39,933
)


51.00Vested


(34,273
)


57.26Balance at June 30, 2006


865,445


$
43.42           Employee
    Stock Purchase Plan
   9




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##### Table of Contents



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


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Basic


73,826,233



75,109,219



73,905,062



75,133,856Diluted


74,540,823



76,502,088



74,740,791



76,601,786   Reclassifications
      Supplemental
    Cash Flow Information
     10




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Discontinued
    Operations
         11




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   3.
    Investment
    in Real Estate    June 30, 2006


December 31, 2005Operating property:Towns & Resorts

$
99,572


$
81,855Commercial real estate


12,824



12,778Land sales


1,266



1,029Forestry


133,439



134,239Other


61



374Total operating property


247,162



230,275Development property:Towns & Resorts


568,269



419,495Commercial real estate


52,157



46,052Land sales


26,758



13,528Other


294



295Total development property


647,478



479,370Investment property:Commercial real estate


325,692



338,382Land sales


260



260Forestry


1,373



1,372Other


7,146



6,816Total investment property


334,471



346,830Investment in unconsolidated
    affiliates:Towns & Resorts


11,867



22,027Total real estate investments


1,240,978



1,078,502Less: Accumulated depreciation


48,111



42,328Investment in real estate
    investments

$
1,192,867


$
1,036,174      12




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   4.
    Debt    June 30, 2006


December 31, 2005Senior notes

$
407,000


$
407,000Debt secured by certain commercial
    and residential property


144,340



143,446Senior revolving credit agreement


50,000



Various secured and unsecured
    notes payable


4,000



4,000Total debt

$
605,340


$
554,446     2006

$
51.62007


69.62008


58.42009


52.02010


3.7Thereafter


370.0Total

$
605.3       5.
    Employee
    Benefit Plans    Three Months Ended


Six Months EndedJune 30, 2006


June 30, 2005


June 30, 2006


June 30, 2005Service cost

$
1,225


$
1,090


$
2,450


$
2,180Interest cost


2,190



1,660



4,380



3,320Expected return on assets


(4,657
)


(3,802
)


(9,315
)


(7,604
)Prior service costs


180



152



360



304Total pension income

$
(1,062
)

$
(900
)

$
(2,125
)

$
(1,800
)   6.
    Segment
    Information   13




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##### Table of Contents



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


Six Months EndedJune 30,


June 30,2006


2005


2006


2005Operating Revenues:Towns & Resorts

$
142,210


$
205,254


$
268,664


$
342,417Commercial real estate


15,552



23,294



29,890



44,466Land sales


29,118



23,617



46,606



41,424Forestry


7,822



7,554



16,301



15,568Consolidated operating revenues

$
194,702


$
259,719


$
361,461


$
443,875Income from continuing operations
    before equity in income (loss) of unconsolidated affiliates,
    income taxes and minority interest:Towns & Resorts

$
19,420


$
50,851


$
31,110


$
73,929Commercial real estate


862



2,526



1,010



3,748Land sales


23,048



16,039



34,865



28,092Forestry


948



1,552



2,983



3,568Other


(17,340
)


(15,311
)


(37,659
)


(29,142
)Consolidated income from
    continuing operations before equity in income (loss) of
    unconsolidated affiliates, income taxes and minority interest

$
26,938


$
55,657


$
32,309


$
80,195   June 30, 2006


December 31, 2005Total Assets:Towns & Resorts

$
797,889


$
657,431Commercial real estate


415,159



510,522Land sales


47,774



48,204Forestry


147,156



147,874Corporate


163,809



227,915Total assets

$
1,571,787


$
1,591,946  14




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Contingencies  Accounting for
    Contingencies
      Guarantors Accounting
    and Disclosure Requirements for Guarantees, Including Indirect
    Guarantees of Indebtedness of Others.
         15




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##### 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;
    club operations;
    investments in limited partnerships and joint ventures;
    brokerage, title issuance and mortgage origination fees on
    certain transactions within our Towns & Resorts
    developments; and
    management fees.    
    the rental
    and/or sale
    of commercial buildings owned
    and/or
    developed by us; and
    the sale of developed and undeveloped land for retail,
    multi-family, office and industrial uses.    
    the sale of parcels of undeveloped land; and
    the sale of developed home sites primarily within rural settings.    
    the sale of pulpwood and timber; and
    the sale of cypress lumber and mulch.     16




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##### Table of Contents



Forward-Looking
    Statements
    
    the size and number of residential units and commercial
    buildings;
    expected development timetables and projected timing for the
    first sales or closings of homes 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 pace at which we release new product for sale;
    future operating performance, revenues, earnings, cash flows,
    and short and long-term revenue and earnings growth rates;
    comparisons to historical projects;
    the amount of dividends we pay; and
    the dollar amount or number of shares of Company stock which may
    be purchased under the Companys existing or future
    share-repurchase program.  Form 10-Q.
 17




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##### Table of Contents



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 migration of Baby Boomers;
    changes in perceptions of or conditions in the national or
    Florida real estate market;
    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 operating costs, including real estate taxes and the
    cost of construction materials;
    changes in the pricing and profit margins of our products;
    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;
    how well we manage our properties;
    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 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 approvals of the local Airport
    Authority and the Federal Aviation Administration, various
    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;
    the continuing effects of past years hurricane disasters
    on the regional and national economies and 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;
    changes in gasoline prices; and
    acts of war, terrorism, or other geopolitical events. 18




---



##### Table of Contents



Critical
    Accounting Estimates
    Form 10-K
  Recently
    Issued Accounting Pronouncements
  Accounting for Real Estate
    Time-Sharing Transactions
  No. FAS 13-1, Accounting for Rental Costs Incurred during a Construction
    Period 13-1), 13-1 13-1
  No. 04-5, (EITF 04-5). FSP SOP 78-9-1,Interaction Issue 04-5 SOP 78-9, Accounting for Investments in Real Estate Ventures No. 04-5. EITF 04-5 and/or
  Accounting Changes and Error
    Corrections
 19




---



##### Table of Contents



Accounting for Uncertainty in Income Taxes, an
    interpretation of FASB Statement No. 109
  Stock-based
    Compensation
  Share-Based Payment
        Results
    of Operations
     20




---



##### Table of Contents



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


Six Months Ended June 30,2006


2005


Difference


% Change


2006


2005


Difference


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

$
163.6


$
228.3


$
(64.7
)


(28
)%

$
302.7


$
386.9


$
(84.2
)


(22
)%Rental revenues


10.7



9.7



1.0



10



22.3



19.2



3.1



16Timber sales


7.8



7.6



0.2



3



16.3



15.6



0.7



4Other revenues


12.6



14.1



(1.5
)


(11
)


20.2



22.2



(2.0
)


(9
)Total


194.7



259.7



(65.0
)


(25
)


361.5



443.9



(82.4
)


(19
)Expenses:Cost of real estate sales


101.2



142.6



(41.4
)


(29
)


194.8



247.5



(52.7
)


(21
)Cost of rental revenues


4.5



3.9



0.6



15



8.8



7.5



1.3



17Cost of timber sales


6.4



4.9



1.5



31



12.2



10.1



2.1



21Cost of other revenues


12.2



11.8



0.4



3



20.2



19.8



0.4



2Other operating expenses


18.2



17.5



0.7



4



38.4



33.2



5.2



16Total

$
142.5


$
180.7


$
(38.2
)


(21
)%

$
274.4


$
318.1


$
(43.7
)


(14
)%     Corporate expense.
 21




---



##### Table of Contents



Depreciation and amortization.
  Other income (expense).
  Equity in income (loss) of unconsolidated
    affiliates. six-month
  Income tax expense.
  Discontinued Operations.
  Segment
    Results
  Towns &
    Resorts
     22




---



##### Table of Contents



Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005(In millions)Revenues:Real estate sales

$
129.3


$
190.9


$
248.1


$
319.9Rental revenues


0.5



0.5



0.8



0.7Other revenues


12.4



13.9



19.8



21.8Total revenues


142.2



205.3



268.7



342.4Expenses:Cost of real estate sales


95.8



128.0



186.6



221.3Cost of rental revenues


0.5



0.5



0.8



0.7Cost of other revenues


12.2



11.5



20.2



19.1Other operating expenses


12.2



12.2



25.6



22.7Depreciation and amortization


2.7



2.4



5.2



4.8Total expenses


123.4



154.6



238.4



268.6Other income (expense)


0.6



0.2



0.8



0.1Pre-tax income from continuing
    operations

$
19.4


$
50.9


$
31.1


$
73.9   percentage-of-completion percentage-of-completion 15-day
   23




---



##### Table of Contents



percentage-of-completion
  Northwest
    Florida
              3.5-mile 80-acre
    499-unit
 24




---



##### Table of Contents



Northeast
    Florida
      Central
    Florida
      1,382-unit 325-unit
  Southwest
    Florida
    Three
    Months Ended June 30
      Three Months Ended


Three Months EndedJune 30, 2006


June 30, 2005Homes


Home Sites


Total


Homes


Home Sites


Total(Dollars in millions)Sales

$
122.3


$
7.0


$
129.3


$
138.2


$
52.7


$
190.9Cost of Sales:Direct costs


79.6



1.8



81.4



98.7



9.4



108.1Selling costs


6.1



0.2



6.3



7.4



1.7



9.1Other indirect costs


7.6



0.5



8.1



9.7



1.1



10.8Total Cost of Sales


93.3



2.5



95.8



115.8



12.2



128.0Gross Profit

$
29.0


$
4.5


$
33.5


$
22.4


$
40.5


$
62.9Gross Profit Margin


24
%


64
%


26
%


16
%


77
%


33
%  25




---



##### Table of Contents



Three Months Ended June 30, 2006


Three Months Ended June 30, 2005Closed





Cost of


Gross


Closed





Cost of


GrossUnits


Revenues


Sales


Profit


Units


Revenues


Sales


Profit(Dollars in millions)Northwest Florida:ResortSingle-family homes


2


$
1.8


$
1.5


$
0.3



2


$
1.5


$
1.1


$
0.4Multi-family homes






















7.4



4.7



2.7Home sites


15



4.7



1.6



3.1



60



43.7



7.8



35.9PrimarySingle-family homes


65



20.9



16.0



4.9



74



19.2



16.1



3.1Townhomes


21



3.3



2.5



0.8



34



5.2



4.4



0.8Home sites


19



1.3



0.4



0.9



22



3.0



1.8



1.2Northeast Florida:PrimarySingle-family homes


17



9.1



6.8



2.3



43



17.7



14.0



3.7Home sites


















12



0.8



0.3



0.5Central Florida:PrimarySingle-family homes


52



25.3



15.3



10.0



104



31.3



26.5



4.8Multi-family homes


49



11.1



7.2



3.9







12.7



9.9



2.8Townhomes


25



7.3



6.1



1.2



1



0.2



0.3



(0.1
)Home sites


6



1.0



0.5



0.5



26



5.2



2.3



2.9North and South Carolina:PrimarySingle-family homes


151



43.1



37.6



5.5



175



43.0



38.8



4.2Townhomes


2



0.4



0.3



0.1















Total


424


$
129.3


$
95.8


$
33.5



553


$
190.9


$
128.0


$
62.9     percentage-of-completion
 26




---



##### Table of Contents



percentage-of-completion
       27




---



##### Table of Contents



Six
    Months Ended June 30
    Six Months Ended


Six Months EndedJune 30, 2006


June 30, 2005Homes


Home Sites


Total


Homes


Home Sites


Total(Dollars in millions)Sales

$
234.4


$
13.6


$
248.0


$
243.2


$
76.4


$
319.6Cost of Sales:Direct costs


154.3



4.0



158.3



173.5



14.0



187.5Selling costs


11.8



0.4



12.2



12.8



2.3



15.1Other indirect costs


15.3



0.8



16.1



16.9



1.6



18.5Total Cost of Sales


181.4



5.2



186.6



203.2



17.9



221.1Gross Profit

$
53.0


$
8.4


$
61.4


$
40.0


$
58.5


$
98.5Gross Profit Margin


23
%


62
%


25
%


16
%


77
%


31
%       Six Months Ended June 30, 2006


Six Months Ended June 30, 2005Closed





Cost of


Gross


Closed





Cost of


GrossUnits


Revenues


Sales


Profit


Units


Revenues


Sales


Profit(Dollars in millions)Northwest Florida:ResortSingle-family homes


7


$
6.7


$
4.9


$
1.8



2


$
1.5


$
1.2


$
0.3Multi-family homes






















18.9



11.0



7.9Private Residence Club


















1



0.3



0.1



0.2Home sites


18



6.4



2.1



4.3



80



63.4



11.5



51.9PrimarySingle-family homes


129



40.1



31.0



9.1



147



35.2



30.4



4.8Townhomes


43



6.7



5.3



1.4



70



10.1



8.9



1.2Home sites


55



4.1



1.7



2.4



42



4.6



2.6



2.0Northeast Florida:PrimarySingle-family homes


31



16.0



11.8



4.2



74



29.3



23.2



6.1Home sites


6



0.9



0.4



0.5



20



1.3



0.4



0.9Central Florida:PrimarySingle-family homes


102



47.9



30.9



17.0



173



48.7



42.1



6.6Multi-family homes


65



21.9



14.3



7.6







23.8



18.2



5.6Townhomes


46



13.0



11.0



2.0



2



0.7



0.8



(0.1
)Home sites


10



2.2



1.0



1.2



40



7.1



3.4



3.7North and South Carolina:PrimarySingle-family homes


297



81.7



71.9



9.8



307



74.7



67.3



7.4Townhomes


2



0.4



0.3



0.1















Total


811


$
248.0


$
186.6


$
61.4



958


$
319.6


$
221.1


$
98.5  28




---



##### Table of Contents



percentage-of-completion
       29




---



##### Table of Contents



Commercial
    Real Estate
    Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005(In millions)Revenues:Real estate sales

$
5.2


$
14.0


$
8.1


$
25.7Rental revenues


10.2



9.2



21.4



18.5Other revenues


0.1



0.1



0.4



0.3Total revenues


15.5



23.3



29.9



44.5Expenses:Cost of real estate sales


2.5



9.4



3.2



17.8Cost of rental revenues


4.0



3.4



7.9



6.8Other operating expenses


2.0



2.4



4.4



4.8Depreciation and amortization


5.2



4.6



11.3



9.3Total expenses


13.7



19.8



26.8



38.7Other income (expense)


(0.9
)


(1.0
)


(2.1
)


(2.0
)Pre-tax income from continuing
    operations

$
0.9


$
2.5


$
1.0


$
3.8   Real Estate Sales.
  Number of


Acres


Gross


Gross Price





Pre-Tax GainLand

Sales


Sold


Proceeds


per Acre


Revenue


on Sales(In millions)


(In thousands)


(In millions)


(In millions)Three Months Ended June 30,
    2006:Northwest Florida


5



34


$
9.5


$
282.0


$
5.2
(a)

$
2.7
(a)Other






















Total/Average


5



34



9.5



282.0



5.2
(a)


2.7
(a)Three Months Ended June 30,
    2005:Northwest Florida


11



25



2.9



116.0



3.0



2.1Other


3



214



11.0



51.5



11.0



2.5Total/Average


14



239



13.9



58.6



14.0



4.6Six Months Ended June 30,
    2006:Northwest Florida


11



47


$
11.6


$
246.0


$
8.1
(a)

$
4.9
(a)Other






















Total/Average


11



47



11.6



246.0



8.1
(a)


4.9
(a)Six Months Ended June 30,
    2005:Northwest Florida


19



66



7.6



115.2



7.6



5.2Other


4



233



18.1



77.7



18.1



2.7Total/Average


23



299


$
25.7


$
90.0


$
25.7


$
7.9    (a)
    
    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. 30




---



##### Table of Contents



year-to-date year-to-date
    207-acre
    Commerce
    Parks
    June 30, 2006
  AcresProject


Sold/Under


Current Asking PriceCounty


Acres


Contract


per AcreExisting and Under
    Construction:South Walton Commerce


Walton



39



15


$
335,000 - 600,000Beach Commerce


Bay



157



147



200,000 - 500,000Beach Commerce II


Bay



112



11



150,000 - 225,000Nautilus Court


Bay



11



4



523,000 - 610,000Port St. Joe Commerce II


Gulf



39



9



65,000 - 135,000Airport Commerce


Leon



45







75,000 - 260,000Hammock Creek Commerce


Gadsden



165



27



50,000 - 150,000Predevelopment:Cedar Grove Commerce


Bay



51



Mill Creek Commerce


Bay



37



Total






656



213   Rental Revenues. year-to-date year-to-date year-to-date year-to-date
   31




---



##### Table of Contents



June 30, 2006



June 30, 2005Net









NetNumber of


Rentable


Percentage



Number of


Rentable


PercentageProperties


Square Feet


Leased



Properties


Square Feet


LeasedBuildings purchased with
    tax-deferred proceeds by location:FloridaJacksonville


1



136,000



69
%



1



136,000



59
%Northwest Florida


3



156,000



96




3



156,000



93Orlando


2



317,000



93




2



317,000



65Atlanta


8



1,289,000



76




8



1,289,000



87Charlotte


1



158,000



100




1



158,000



100Virginia


3



354,000



96




2



129,000



96Subtotal/Average


18



2,410,000



84
%



17



2,185,000



85
%Development property:FloridaNorthwest Florida


3



66,000



97
%



1



30,000



100
%Subtotal/Average


3



66,000



97
%



1



30,000



100
%Total/Average


21



2,476,000



84
%



18



2,215,000



85
%       Discontinued Operations.
 32




---



##### Table of Contents



Land
    Sales
    Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005(In millions)Revenues:Real estate sales

$
29.1


$
23.5


$
46.6


$
41.3Other revenues






0.1







0.1Total revenues


29.1



23.6



46.6



41.4Expenses:Cost of real estate sales


2.9



5.1



5.0



8.4Cost of other revenues






0.3







0.6Other operating expenses


3.4



2.1



7.2



4.3Depreciation and amortization


0.1



0.1



0.2



0.2Total expenses


6.4



7.6



12.4



13.5Other income (expense)


0.3







0.6



0.1Pre-tax income from continuing
    operations

$
23.0


$
16.0


$
34.8


$
28.0     Number of


Number of


Average Price


GrossSales


Acres


per Acre


Sales Price


Gross Profit(In millions)


(In millions)Three Months Ended:June 30, 2006


23



8,409


$
3,143


$
26.4


$
24.5June 30, 2005


47



6,480


$
2,209


$
14.3


$
12.1Six Months Ended:June 30, 2006


49



13,450


$
3,128


$
42.1


$
38.7June 30, 2005


76



13,410


$
2,071


$
27.8


$
23.8   Woodlands
    Florida
    Wild
    Other
   33




---



##### Table of Contents



RiverCamps
          Forestry
    Three Months Ended


Six Months EndedJune 30,


June 30,2006


2005


2006


2005(In millions)Revenues:Timber sales

$
7.8


$
7.6


$
16.3


$
15.6Expenses:Cost of timber sales


6.3



4.9



12.2



10.1Other operating expenses


0.6



0.6



1.2



1.1Depreciation and amortization


0.8



1.1



1.6



2.2Total expenses


7.7



6.6



15.0



13.4Other income (expense)


0.8



0.6



1.7



1.4Pre-tax income from continuing
    operations

$
0.9


$
1.6


$
3.0


$
3.6   Three
    Months Ended June 30
   34




---



##### Table of Contents



Six
    Months Ended June 30
      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.   35




---



##### Table of Contents



and/or
  Cash
    Flows from Operating Activities
        Cash
    Flows from Investing Activities
      Cash
    Flows from Financing Activities
       36




---



##### Table of Contents



on-site Accounting for Special Assessments and Tax
    Increment Financing
        Off-Balance
    Sheet Arrangements
  Regulation S-K.
  Contractual
    Obligations and Commercial Commitments
    Form 10-K
 37




---



##### Table of Contents



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.
 38




---



##### 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, 2006


1,800


$
62.42



1,800


$
149,087Month Ended May 31, 2006


159,457
(2)

$
49.48



159,000


$
141,221Month Ended June 30, 2006


322,000


$
44.50



322,000


$
126,892     (1)
    
    For a description of our Stock Repurchase Program, see
    Part I, Item 2, Liquidity and Capital
    Resources  Cash Flows from Financing Activities.(2)
    
    Includes shares surrendered to the Company by executives as
    payment for taxes due on exercised stock options
    and/or taxes
    due on vested restricted stock equal in the aggregate to
    457 shares.  Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders     39




---



##### Table of Contents



Name of Nominee

For


WithheldMichael L. Ainslie


69,843,423



802,514Hugh M. Durden


64,493,650



5,452,287Thomas A Fanning


69,389,961



555,976Harry H. Frampton, III


69,395,465



550,472Dr. Adam W.
    Herbert, Jr.


69,381,693



564,244Delores M. Kesler


69,135,124



810,813John S. Lord


64,498,430



5,447,507Walter L. Revell


68,985,668



960,269Peter S. Rummell


69,315,920



630,017William H. Walton, III


69,390,904



555,033     For

Against

Abstain67,862,680



1,654,327



428,930     For


Against


Abstain69,620,803



276,071



49,063   Item 5.
    Other
    Information    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

Description of Additional
    Compensation for Lead Director (incorporated by reference to the
    information contained in the registrants Current Report on
    Form 8-K
    dated May 15, 2006).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.  40




---



##### Table of Contents



SIGNATURES    The St. Joe Company
   
    Chief Financial Officer
   
    Senior Vice President  Finance and Planning
  (Principal Accounting Officer)
 41