##### 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
    September 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 1 Financial InformationItem 1.


Financial Statements


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


2Consolidated Statements of Income 
    Three and nine months ended September 30, 2007 and 2006


3Consolidated Statement of Changes in
    Stockholders Equity  Nine months ended
    September 30, 2007


4Consolidated Statements of Cash Flows 
    Nine months ended September 30, 2007 and 2006


5Notes to Consolidated Financial Statements


6Item 2.


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


21Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


42Item 4.


Controls and Procedures


42PART II Other InformationItem 1.


Legal Proceedings


43Item 1A.


Risk Factors


43Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds


43Item 3.


Defaults Upon Senior Securities


43Item 4.


Submission of Matters to a Vote of Security
    Holders


43Item 5.


Other Information


43Item 6.


Exhibits


44Signatures


45EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification 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)
  September 30,


December 31,2007


2006(Unaudited)ASSETSInvestment in real estate

$
950,726


$
1,213,562Cash and cash equivalents


11,905



36,935Accounts receivable, net


13,021



25,839Notes receivable


88,483



26,029Pledged treasury securities


31,095



Prepaid pension asset


104,075



100,867Property, plant and equipment, net


30,589



44,593Goodwill, net


18,991



35,233Other intangible assets, net


2,481



32,669Other assets


34,055



44,668$
1,285,421


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

$
540,622


$
627,056Accounts payable


98,717



117,131Accrued liabilities


74,014



123,496Income tax payable


7,107



9,984Deferred income taxes


84,091



211,115Total liabilities


804,551



1,088,782Minority interest in consolidated subsidiaries


6,710



10,533STOCKHOLDERS EQUITY:Common stock, no par value; 180,000,000 shares authorized;
    104,508,291 and 104,372,697 issued at September 30, 2007
    and December 31, 2006, respectively


320,015



308,060Retained earnings


1,080,870



1,078,312Accumulated other comprehensive income


(621
)


(1,033
)Treasury stock at cost, 30,151,190 and 30,100,032 shares
    held at September 30, 2007 and December 31, 2006,
    respectively


(926,104
)


(924,259
)Total stockholders equity


474,160



461,080$
1,285,421


$
1,560,395    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


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006Revenues:Real estate sales

$
56,059


$
104,146


$
227,844


$
324,847Rental revenues


1,412



1,390



4,324



3,767Timber sales


9,496



7,212



25,923



23,529Other revenues


12,119



11,282



31,564



31,375Total revenues


79,086



124,030



289,655



383,518Expenses:Cost of real estate sales


17,554



56,346



110,467



179,147Cost of rental revenues


2,810



1,196



5,406



2,993Cost of timber sales


6,768



5,254



19,957



17,472Cost of other revenues


11,941



12,865



31,379



32,914Other operating expenses


18,210



18,533



49,668



51,617Corporate expense, net


8,938



11,293



26,000



40,608Depreciation and amortization


5,093



5,304



14,763



15,245Impairment losses


20,417







20,417



Restructuring charge (benefit)


(352
)


13,129



2,644



13,129Total expenses


91,379



123,920



280,701



353,125Operating profit (loss)


(12,293
)


110



8,954



30,393Other income (expense):Investment income, net


1,443



832



4,116



3,754Interest expense


(3,531
)


(3,780
)


(14,705
)


(8,793
)Other, net


(3,373
)


739



1,327



1,039Gain on disposition of assets


182







7,815



Total other income (expense)


(5,279
)


(2,209
)


(1,447
)


(4,000
)Income (loss) from continuing operations before equity in income
    (loss) of unconsolidated affiliates, income taxes, and minority
    interest


(17,572
)


(2,099
)


7,507



26,393Equity in income (loss) of unconsolidated affiliates


(999
)


1,606



(41
)


7,030Income tax expense (benefit)


(6,731
)


1,202



(557
)


12,825Income (loss) from continuing operations before minority interest


(11,840
)


(1,695
)


8,023



20,598Minority interest


112



745



866



5,622Income (loss) from continuing operations


(11,952
)


(2,440
)


7,157



14,976Discontinued operations:Income from discontinued operations (net of income tax expense
    of $203, $1,073, $1,779 and $2,599, respectively)


251



1,788



2,775



4,331Gain on sales of discontinued operations (net of income tax
    expense of $5,256, $3,982, $19,313 and $5,619, respectively)


4,894



6,636



28,263



9,364Income from discontinued operations


5,145



8,424



31,038



13,695Net income (loss)

$
(6,807
)

$
5,984


$
38,195


$
28,671EARNINGS PER SHAREBasicIncome (loss) from continuing operations

$
(0.16
)

$
(0.03
)

$
0.10


$
0.20Income from discontinued operations

$
0.07


$
0.11


$
0.42


$
0.19Net income (loss)

$
(0.09
)

$
0.08


$
0.52


$
0.39DilutedIncome (loss) from continuing operations

$
(0.16
)

$
(0.03
)

$
0.10


$
0.20Income from discontinued operations

$
0.07


$
0.11


$
0.41


$
0.19Net income (loss)

$
(0.09
)

$
0.08


$
0.51


$
0.39    3




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##### Table of Contents



THE ST.
    JOE COMPANY
    CONSOLIDATED 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










38,195











38,195Amortization of pension and postretirement benefit costs, net of
    tax














412







412Comprehensive income






















38,607Issuances of restricted stock


115,980



















Forfeitures of restricted stock


(119,817
)


















Dividends ($0.48 per share)










(35,637
)










(35,637
)Issuances of common stock


139,431



4,088















4,088Excess tax benefit on options exercised and vested restricted
    stock






957















957Amortization of stock- based compensation






6,910















6,910Purchases of treasury shares


(51,158
)














(1,845
)


(1,845
)Balance at September 30, 2007


74,357,101


$
320,015


$
1,080,870


$
(621
)

$
(926,104
)

$
474,160    4




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##### Table of Contents



THE ST.
    JOE COMPANY
  CONSOLIDATED
    STATEMENTS OF CASH FLOW
 (Unaudited)
 (Dollars in thousands)
  Nine Months EndedSeptember 30,2007


2006Cash flows from operating activities:Net income

$
38,195


$
28,671Adjustments to reconcile net income to net cash used in
    operating activities:Depreciation and amortization


19,104



30,175Stock-based compensation


6,910



11,764Minority interest in income


866



5,622Equity in income of unconsolidated affiliates


(161
)


(7,320
)Distributions of income from unconsolidated affiliates


710



8,318Deferred income tax benefit


(126,613
)


(65,685
)Impairment losses


20,417



Cost of operating properties sold


170,004



315,914Expenditures for operating properties


(202,210
)


(516,980
)Write-off of capitalized home building costs


705



9,549Gains on sale of office portfolio


(55,384
)


(14,983
)Changes in operating assets and liabilities:Accounts receivable


12,685



14,017Notes receivable


2,494



15,789Other assets


(43,963
)


(20,571
)Accounts payable and accrued liabilities


(66,278
)


(8,981
)Income taxes payable


(2,877
)


(23,019
)Net cash used in operating activities


(225,396
)


(217,720
)Cash flows from investing activities:Purchases of property, plant and equipment


(5,365
)


(4,845
)Purchases of investments in real estate


(13,737
)


(5,230
)Purchases of investments






(7
)Contributions to investments in unconsolidated affiliates


(496
)


(1,507
)Proceeds from the disposition of assets


36,000



Proceeds from sale of office portfolio


311,425



48,037Maturities and redemptions of investments, held to maturity


12



Net cash provided by investing activities


327,839



36,448Cash flows from financing activities:Proceeds from revolving credit agreements


467,000



245,000Repayment of borrowings under revolving credit agreements


(437,000
)


(150,000
)Proceeds from other long-term debt






26Repayments of other long-term debt


(120,347
)


(5,436
)Distributions to minority interests


(4,689
)


(9,239
)Proceeds from exercises of stock options


4,088



6,485Dividends paid to stockholders


(35,637
)


(35,804
)Excess tax benefits from stock-based compensation


957



2,728Treasury stock purchases


(1,845
)


(53,364
)Net cash (used in) provided by financing activities


(127,473
)


396Net decrease in cash and cash equivalents


(25,030
)


(180,876
)Cash and cash equivalents at beginning of period


36,935



202,605Cash and cash equivalents at end of period

$
11,905


$
21,729    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

$
17.62Expected dividend yield

1.11% -1.18%


1.03
%Risk free interest rate

4.59% - 4.88%


4.67
%Weighted average expected volatility

22.65% - 22.90%


23.5
%Expected life (in years)

7


7     Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006Stock option expense

$
428


$
414


$
1,399


$
2,299Restricted stock expense


1,622



1,957



5,511



9,401Employee stock purchase plan expense


27



46



85



165Total

$
2,077


$
2,417


$
6,995


$
11,865    7




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##### Table of Contents



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


Weighted Average


Grant Date FairOptions


Exercise Price


ValueBalance at December 31, 2006


780,909


$
32.42


$
11.94Granted


112,101



55.00



17.35Forfeited


(38,246
)


46.31



14.36Exercised


(139,431
)


29.32



9.98Balance at September 30, 2007


715,333


$
35.82


$
13.04       Weighted Average


Range of


Weighted AverageNumber of Options Outstanding

Remaining Contractual Life


Exercise Prices


Exercise Price55,739


2 years


$
15.96-$23.94


$
18.71448,450


5 years


$
23.95-$35.91


$
29.7320,300


6 years


$
35.92-$53.86


$
39.96190,844


9 years


$
53.87-$57.63


$
54.70715,333


6 years


$
15.96-$57.63


$
35.82     Weighted Average


Range of


Weighted AverageNumber of Options Exercisable

Remaining Contractual Life


Exercise Prices


Exercise Price55,739


2 years


$
15.96-$23.94


$
18.71446,950


5 years


$
23.95-$35.91


$
29.7113,050


6 years


$
35.92-$53.86


$
39.8227,891


9 years


$
53.87-$57.63


$
54.24543,630


6 years


$
15.96-$57.63


$
30.08      8




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Number of


Weighted AverageNon-Vested Restricted Shares

Shares


Grant Date Fair ValueBalance at December 31, 2006


622,346


$
46.20Granted


115,980



54.56Forfeited


(119,817
)


53.31Vested


(165,895
)


40.52Balance at September 30, 2007


452,614


$
48.54           Employee
    Stock Purchase Plan
    Earnings
    (Loss) Per Share
   9




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##### Table of Contents



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


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006Basic average shares outstanding


73,936,181



73,373,896



73,801,129



73,726,138Net effect of stock options assumed to be exercised






254,951



195,420



305,977Net effect of non-vested restricted stock assumed to be exercised






299,094



306,810



435,857Diluted average shares outstanding


73,936,181



73,927,941



74,303,359



74,467,972         Supplemental
    Cash Flow Information
    2007


2006Interest paid

$
31.4


$
28.7Income taxes paid (net of refunds)


188.9



107.0Capitalized interest


7.4



11.9     2007


2006Issuance of restricted stock

$
0.1


$
9.5Net increase in Community Development District Debt


29.6



19.0Extinguishment of debt in connection with joint venture






(10.7
)Increase in note payable on land purchase


1.6



1.1Increase in pledged treasury securities


31.1



Assumption of debt in connection with sale of office building


(28.9
)


    10




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Derivative
    Financial Instruments
  Accounting for Derivative Instruments and
    Hedging Activities, as amended
    3.
    Notes
    Receivable    semi-annually.
  ,
    Accounting for Transfers and Servicing of Financial Assets and
    Extinguishments of Liabilities (SFAS 140)
   11




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  semi-annually.
  4.
    Pledged
    Treasury Securities    5.
    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


0.1







1.3







0.5



1.9Total restructuring charges, pretax

$
0.8


$



$
1.3


$



$
0.5


$
2.6    12




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    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


3.1



0.1



1.5







1.3



6.0Total restructuring charges, pretax

$
13.1


$
0.1


$
1.5


$



$
1.3


$
16.0       Balance at











Balance atDecember 31,


Costs


Non-cash





September 30,


Due within2006


Accrued


Adjustments


Payments


2007


12 monthsWrite-off of capitalized homebuilding costs

$



$
0.7


$
(0.7
)

$



$



$
One-time termination benefits to employees

$
1.3



1.9







(3.1
)


0.1



0.1Total

$
1.3


$
2.6


$
(0.7
)

$
(3.1
)

$
0.1


$
0.1     6.
    Dispositions
    of Assets       13




---



##### Table of Contents



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


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006Commercial Buildings:Aggregate revenues

$
1,474


$
9,712


$
18,392


$
30,800Pre-tax income (loss)


471



(427
)


2,637



(1,565
)Pre-tax gain on sale


10,150



10,618



47,783



14,983Income taxes


5,467



3,822



20,425



5,032Income from discontinued operations

$
5,154


$
6,369


$
29,995


$
8,386Saussy Burbank:Aggregate revenues

$



$
45,143


$
56,626


$
127,223Pre-tax income (loss)


(17
)


3,288



1,917



8,495Pre-tax gain (loss) on sale










(207
)


Income taxes (benefit)


(8
)


1,233



667



3,186Income (loss) from discontinued operations

$
(9
)

$
2,055


$
1,043


$
5,309Total income from discontinued operations

$
5,145


$
8,424


$
31,038


$
13,695   7.
    Financial
    Instruments with Characteristics of Both Liabilities and
    Equity  Accounting for Certain Financial
    Instruments with Characteristics of Both Liabilities and Equity
 14




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  8.
    Investment
    in Real Estate    September 30, 2007


December 31, 2006Operating property:Residential real estate

$
150,023


$
104,341Commercial real estate


9,525



9,366Rural land sales


139



197Forestry


88,534



135,932Other


309



61Total operating property


248,530



249,897Development property:Residential real estate


642,251



623,483Commercial real estate


58,667



56,669Rural land sales


7,931



7,996Other


368



294Total development property


709,217



688,442Investment property:Commercial real estate


1,846



311,362Rural land sales


126



412Forestry


1,495



1,372Other


5,995



7,645Total investment property


9,462



320,791Investment in unconsolidated affiliates:Residential real estate


9,353



9,406Total real estate investments


976,562



1,268,536Less: Accumulated depreciation


25,836



54,974Investment in real estate investments

$
950,726


$
1,213,562       9.
    Acquisition   15




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    (In millions)Land

$
23.0Buildings


4.3Furniture and fixtures


0.8Inventory


0.3Liabilities assumed


(4.0
)Net assets acquired

$
24.4   10.
    Asset
    Impairments    11.
    Goodwill
    Impairment    12.
    Debt    September 30, 2007


December 31, 2006Senior revolving credit facility

$
90,000


$
60,000Senior notes


240,000



307,000Debt secured by securities, certain commercial and residential
    property


106,622



156,056Bridge loan


100,000



100,000Bond payable


4,000



4,000Total debt

$
540,622


$
627,056    16




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        2007

$
90.02008


104.42009


26.62010


38.22011


10.5Thereafter


270.9Total

$
540.6       13.
    Employee
    Benefit Plans    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006Service cost

$
1,059


$
1,222


$
3,177



3,667Interest cost


2,074



2,180



6,220



6,540Expected return on assets


(4,247
)


(4,250
)


(12,740
)


(13,344
)Prior service costs


172



180



514



541Settlement charge






133







133Curtailment charge






148



135



148Total pension (credit) expense

$
(942
)

$
(387
)

$
(2,694
)

$
(2,315
)  17




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  14.
    Income
    Taxes  Accounting for Uncertainty in Income Taxes
  and/or
  Form 10-K
    15.
    Segment
    Information      Form 10-K.
   18




---



##### Table of Contents



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


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006Operating Revenues:Residential real estate

$
31,336


$
86,894


$
112,840


$
278,013Commercial real estate


6,378



13,554



19,452



23,553Rural land sales


31,883



16,378



131,467



58,447Forestry


9,489



7,204



25,896



23,505Consolidated operating revenues

$
79,086


$
124,030


$
289,655


$
383,518Income (loss) from continuing operations before equity in income
    (loss) of unconsolidated affiliates, income taxes and minority
    interest:Residential real estate

$
(26,192
)

$
(7,581
)

$
(32,409
)

$
19,826Commercial real estate


2,337



8,239



10,773



10,483Rural land sales


27,741



12,296



75,283



45,813Forestry


(5,650
)


1,390



(3,760
)


4,373Other


(15,808
)


(16,443
)


(42,380
)


(54,102
)Consolidated income (loss) from continuing operations before
    equity in income (loss) of unconsolidated affiliates, income
    taxes and minority interest

$
(17,572
)

$
(2,099
)

$
7,507


$
26,393   September 30, 2007


December 31, 2006Total Assets:Residential real estate

$
896,803


$
838,773Commercial real estate


72,477



389,840Rural land sales


9,599



30,907Forestry


128,193



149,323Corporate


178,349



151,552Total Assets

$
1,285,421


$
1,560,395   16.
    Contingencies  Accounting for Contingencies
     19




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Guarantors
    Accounting and Disclosure Requirement for Guarantees, Including
    Indirect Guarantees of Indebtedness of Others
         20




---



##### 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; and
    brokerage and title issuance fees on certain transactions within
    our residential real estate developments.      
    the sale of parcels of undeveloped land; and
    the sale of rural land with limited development.         21




---



##### 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 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 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, 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,
  
    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; 22




---



##### Table of Contents




    changes in perceptions or conditions in the national real estate
    market or the real estate markets in the state and regions in
    which we operate;
    changes in interest rates, availability of mortgage financing
    and the performance of the financial markets;
    an event of default under our credit facility, senior notes and
    certain other debt or the restructuring of such debt on terms
    less favorable to us;
    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 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 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;
    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
   23




---



##### Table of Contents



Form 10-K
  Recently
    Issued Accounting Pronouncements
  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
  Results
    of Operations
     24




---



##### Table of Contents



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


Nine Months Ended September 30,2007


2006


Difference


% Change


2007


2006


Difference


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

$
56.1


$
104.1


$
(48.0
)


(46
)%

$
227.8


$
324.8


$
(97.0
)


(30
)%Rental revenues


1.4



1.4











4.3



3.8



0.5



13Timber sales


9.5



7.2



2.3



32



25.9



23.5



2.4



10Other revenues


12.1



11.3



0.8



7



31.6



31.4



0.2



1Total


79.1



124.0



(44.9
)


(36
)


289.6



383.5



(93.9
)


(24
)Expenses:Cost of real estate sales


17.5



56.3



(38.8
)


(69
)


110.5



179.1



(68.6
)


(38
)Cost of rental revenues


2.8



1.2



1.6



133



5.4



3.0



2.4



80Cost of timber sales


6.8



5.3



1.5



28



19.9



17.5



2.4



14Cost of other revenues


11.9



12.9



(1.0
)


(8
)


31.4



32.9



(1.5
)


(5
)Other operating expenses


18.2



18.5



(0.3
)


2



49.7



51.6



(1.9
)


(4
)Total

$
57.2


$
94.2


$
(37.0
)


(39
)%

$
216.9


$
284.1


$
(67.2
)


(24
)%     Corporate expense.
  Impairment losses.
 25




---



##### Table of Contents



Restructuring charge.
  Other income (expense).
  Equity in income (loss) of unconsolidated
    affiliates.
  Income tax expense.
 26




---



##### Table of Contents



Discontinued Operations.
  Segment
    Results
  Residential
    Real Estate
                11-unit
   27




---



##### Table of Contents



123-acre
          
    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.   28




---



##### Table of Contents



Nine Months EndedThree Months Ended September 30,


September 30,2007


2006


2007


2006(In millions)Revenues:Real estate sales

$
18.0


$
75.3


$
79.0


$
245.9Rental revenue


1.2



0.6



2.4



1.4Other revenues


12.1



11.0



31.5



30.7Total revenues


31.3



86.9



112.9



278.0Expenses:Cost of real estate sales


12.0



52.6



49.6



168.8Cost of rental revenue


2.6



0.6



4.0



1.4Cost of other revenues


11.9



12.9



31.4



32.9Other operating expenses


15.1



13.8



39.2



36.0Depreciation and amortization


3.0



2.9



8.6



8.2Restructuring charge


(0.4
)


11.9



0.8



11.9Impairment charge


13.0







13.0



Total expenses


57.2



94.7



146.6



259.2Other income (expense)


(0.2
)


0.2



1.3



1.0Pre-tax (loss ) income from continuing operations before equity
    in income of unconsolidated affiliates, income taxes and
    minority interest

$
(26.1
)

$
(7.6
)

$
(32.4
)

$
19.8   15-day
     29




---



##### Table of Contents



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


Three Months Ended September 30, 2006Homes


Home-Sites


Total


Homes


Home-Sites


Total(Dollars in millions)Sales

$
9.6


$
8.4


$
18.0


$
54.9


$
20.4


$
75.3Cost of sales:Direct costs


6.5



3.3



9.8



35.7



8.3



44.0Selling costs


0.4



0.3



0.7



2.7



0.6



3.3Other indirect costs


1.1



0.4



1.5



4.5



0.8



5.3Total cost of sales


8.0



4.0



12.0



42.9



9.7



52.6Gross profit

$
1.6


$
4.4


$
6.0


$
12.0


$
10.7


$
22.7Gross profit margin


17
%


52
%


33
%


22
%


52
%


30
%       Three Months Ended September 30, 2007


Three Months Ended September 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


5


$
4.3


$
3.6


$
0.7



4


$
4.8


$
4.1


$
0.7Home-sites


10



5.7



2.1



3.6



28



11.2



4.7



6.5PrimarySingle-family homes


1



0.2







0.2



54



15.9



13.2



2.7Home-sites


34



2.5



1.6



0.9



39



2.3



1.3



1.0Northeast Florida:PrimarySingle-family homes


2



0.9



0.8



0.1



16



9.0



7.2



1.8Central Florida:PrimarySingle-family homes


5



2.4



2.0



0.4



48



20.4



15.3



5.1Multi-family homes


3



1.2



1.1



0.1



35



4.2



2.6



1.6Townhomes


1



0.6



0.5



0.1



2



0.6



0.5



0.1Home-sites


5



0.2



0.3



(0.1
)


67



6.9



3.7



3.2Total


66


$
18.0


$
12.0


$
6.0



293


$
75.3


$
52.6


$
22.7  30




---



##### Table of Contents



31




---



##### Table of Contents



Nine
    Months Ended September 30, 2007 and 2006
    Nine Months Ended September 30, 2007


Nine Months Ended September 30, 2006Homes


Home-Sites


Total


Homes


Home-Sites


Total(Dollars in millions)Sales

$
41.7


$
37.3


$
79.0


$
207.3


$
38.6


$
245.9Cost of sales:Direct costs


25.0



13.8



38.8



128.3



13.9



142.2Selling costs


2.0



1.4



3.4



9.7



1.2



10.9Other indirect costs


5.7



1.7



7.4



14.4



1.3



15.7Total cost of sales


32.7



16.9



49.6



152.4



16.4



168.8Gross profit

$
9.0


$
20.4


$
29.4


$
54.9


$
22.2


$
77.1Gross profit margin


22
%


55
%


37
%


26
%


58
%


31
%       Nine Months Ended September 30, 2007


Nine Months Ended September 30, 2006Closed





Cost of


Gross


Closed





Cost of


GrossUnits


Revenues


Sales


Profit


Units


Revenues


Sales


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


10


$
13.3


$
10.1


$
3.2



11


$
11.5


$
9.0


$
2.5Multi-Family


1



0.9



0.6



0.3















Home-sites


41



23.0



7.5



15.5



52



22.1



8.3



13.8PrimarySingle-family homes


13



3.9



3.1



0.8



183



56.1



44.2



11.9Townhomes


4



0.9



0.6



0.3



43



6.7



5.4



1.3Home-sites


171



13.5



8.8



4.7



94



6.5



3.0



3.5Northeast Florida:PrimarySingle-family homes


9



4.3



4.0



0.3



47



25.1



19.1



6.0Home-sites


2



0.3



0.2



0.1



6



1.0



0.4



0.6Central Florida:PrimarySingle-family homes


19



11.4



8.9



2.5



150



68.2



46.2



22.0Multi-family homes


28



2.0



1.6



0.4



100



26.1



17.0



9.1Townhomes


9



5.0



3.8



1.2



48



13.6



11.5



2.1Home-sites


6



0.5



0.4



0.1



77



9.0



4.7



4.3Total


313


$
79.0


$
49.6


$
29.4



811


$
245.9


$
168.8


$
77.1  32




---



##### Table of Contents



33




---



##### Table of Contents



Discontinued
    Operations
      Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006(In millions)Revenues:Real estate sales

$



$
45.1


$
56.7


$
127.2Expenses:Cost of real estate sales






39.3



49.7



111.3Other operating expenses






2.7



3.1



7.8Impairment loss










2.2



Total expenses






42.0



55.0



119.1Equity in income of unconsolidated affiliate






0.1



0.2



0.3Pre-tax income from discontinued operations

$



$
3.2


$
1.9


$
8.4Income tax expense






1.2



0.7



3.1Income from discontinued operations, net of tax






2.0



1.2



5.3Loss on sale, net of tax










(0.1
)


Total income from discontinued operations, net of tax

$



$
2.0


$
1.1


$
5.3   Commercial
    Real Estate
   34




---



##### Table of Contents



Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006(In millions)Revenues:Real estate sales

$
6.1


$
12.4


$
17.4


$
20.5Rental revenues


0.3



0.8



1.9



2.4Other revenues






0.3



0.1



0.6Total revenues


6.4



13.5



19.4



23.5Expenses:Cost of real estate sales


2.5



2.3



9.9



5.6Cost of rental revenues


0.1



0.6



1.3



1.6Other operating expenses


1.5



1.6



4.4



5.5Depreciation and amortization


0.2



0.6



1.0



1.9Restructuring charge






0.2







0.2Total expenses


4.3



5.3



16.6



14.8Other income


0.2







8.0



1.7Pre-tax income from continuing operations

$
2.3


$
8.2


$
10.8


$
10.4   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 September 30, 2007:Northwest Florida


10



20


$
309.0


$
6.2


$
6.1
(a)

$
3.6
(a)Total/Average


10



20


$
309.0


$
6.2


$
6.1
(a)

$
3.6
(a)Three Months Ended September 30, 2006:Northwest Florida


7



53


$
204.0


$
10.8


$
12.4
(b)

$
10.0
(b)Total/Average


7



53


$
204.0


$
10.8


$
12.4
(b)

$
10.0
(b)Nine Months Ended September 30, 2007:Northwest Florida


26



58


$
226.1


$
13.1


$
13.0
(a)

$
6.5
(a)Other


4



22



194.1



4.4



4.4



1.0Total/Average


30



80


$
217.1


$
17.5


$
17.4
(a)

$
7.5
(a)Nine Months Ended September 30, 2006:Northwest Florida


18



70


$
292.6


$
22.4


$
20.5
(c)

$
14.9
(c)Total/Average


18



70


$
292.6


$
22.4


$
20.5
(c)

$
14.9
(c)   (a)
    
    Net of 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
    September 30, 2007. The nine months ended
    September 30, 2007 include previously deferred revenues and
    gain on sales of $0.1 million and $0.2 million,
    respectively.(b)
    
    Includes previously deferred revenue and gain on sales, based on
    percentage-of-completion accounting, of $1.6 million and
    $0.8 million for the three months ended September 30,
    2006. 35




---



##### Table of Contents



(c)
    
    Net of deferred revenue and gain on sales, based on
    percentage-of-completion accounting, of $1.9 million and
    $0.2 million for the nine months ended September 30,
    2006.  per-acre
  Dispositions
    of Assets
      Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006(In millions)Aggregate revenues

$



$
0.7


$
1.5


$
2.1Pre-tax income (loss) from continuing operations






(0.3
)






(0.9
)Pre-tax gain on sale


0.1







7.8



Income tax expense (benefit)


0.1



(0.1
)


2.7



(0.4
)Total income (loss) from continuing operations, net of tax

$



$
(0.2
)

$
5.1


$
(0.5
)     Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006(In millions)Aggregate revenues

$
1.5


$
9.7


$
18.4


$
30.8Pre-tax income (loss) from discontinued operations


0.4



(0.4
)


2.6



(1.5
)Pre-tax gain on sale


10.2



10.6



47.8



14.9Income tax expense


5.4



3.8



20.4



5.0Total income from discontinued operations, net of tax

$
5.2


$
6.4


$
30.0


$
8.4     Rural
    Land Sales
   36




---



##### Table of Contents



Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006(In millions)Revenues:Real estate sales

$
31.9


$
16.4


$
131.5


$
58.4Expenses:Cost of real estate sales


3.0



1.3



51.1



4.7Other operating expenses


1.1



2.6



4.0



8.2Depreciation and amortization


0.1



0.1



0.2



0.2Restructuring charge






0.3



1.3



0.3Total expenses


4.2



4.3



56.6



13.4Other income






0.2



0.4



0.8Pre-tax income from continuing operations

$
27.7


$
12.3


$
75.3


$
45.8     Number of


Number of


Average Price


GrossSales


Acres


per Acre


Sales Price


Gross Profit(In millions)


(In millions)Three Months Ended September 30:2007


7



21,073


$
1,513


$
31.9


$
28.82006


20



4,029


$
4,070


$
16.4


$
15.1Nine Months Ended September 30:2007


33



87,098


$
1,509


$
131.5


$
80.32006


69



17,479


$
3,341


$
58.4


$
53.7        37




---



##### Table of Contents



Forestry
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2007


2006


2007


2006(In millions)Revenues:Timber sales

$
9.5


$
7.2


$
25.9


$
23.5Expenses:Cost of timber sales


6.8



5.3



20.0



17.4Other operating expenses


0.6



0.5



1.9



1.8Depreciation and amortization


0.9



0.7



2.1



2.3Impairment loss


7.4







7.4



Total expenses


15.7



6.5



31.4



21.5Other income


0.5



0.7



1.7



2.4Pre-tax income (loss) from continuing operations

$
(5.7
)

$
1.4


$
(3.8
)

$
4.4   Three
    Months Ended September 30, 2007 and 2006
          Nine
    Months Ended September 30, 2007 and 2006
   38




---



##### 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.    Cash
    Flows from Operating Activities
     39




---



##### Table of Contents



Cash
    Flows from Investing Activities
        Cash
    Flows from Financing Activities
       40




---



##### Table of Contents



91-10,
        Off-Balance
    Sheet Arrangements
  15-year Accounting for Transfers and Servicing of Financial
    Assets and Extinguishments of Liabilities.
 41




---



##### Table of Contents



Contractual
    Obligations and Commercial Commitments
    Form 10-K
  Item 3.
    Quantitative
    and Qualitative Disclosures About Market Risk    Form 10-K
  Item 4.
    Controls
    and Procedures  Rules 13a-15(e) 15d-15(e)
   42




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##### Table of Contents



PART II 
    OTHER INFORMATION
  Item 1.
    Legal
    Proceedings    Item 1A.  Risk
    Factors
  Form 10-K
  Increases
    in interest rates and the availability of mortgage financing
    could reduce demand for our products.
      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 July 31, 2007





$







$
103,793Month Ended August 31, 2007





$







$
103,793Month Ended September 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    Item 5.
    Other
    Information   43




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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).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.  44




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##### Table of Contents



SIGNATURES
    The St. Joe CompanyDate: November 6, 2007

/s/  Peter
    S. RummellPeter S. RummellChairman and Chief Executive OfficerDate: November 6, 2007

/s/  Janna
    L. ConnollyJanna L. ConnollyChief Accounting Officer  45