Other Income, Net

12 Months Ended

Dec. 31, 2020

Other Income, Net

Other Income, Net

19. Other Income, Net

Other income (expense) consists of the following:

	Year Ended December 31,
	2020		2019		2018
Investment income, net
Interest and dividend income	$	1,121	$	7,375	$	9,060
Accretion income		74		84		684
Net realized (loss) gain on the sale of investments		(48)		87		(973)
Other-than-temporary impairment loss		—		—		(2,330)
Unrealized loss on investments, net		(4,688)		(5,342)		(3,035)
Interest income from investments in SPEs		8,180		8,190		8,197
Interest accrued on notes receivable and other interest		344		320		547
Total investment income, net		4,983		10,714		12,150
Interest expense
Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE		(8,813)		(8,801)		(8,788)
Other interest expense		(4,751)		(3,501)		(3,052)
Total interest expense		(13,564)		(12,302)		(11,840)
Gain on land contribution to equity method investment		19,983		2,317		—
Other income (expense), net
Accretion income from retained interest investments		1,391		1,325		1,232
Gain on insurance recovery		690		5,314		7,199
Loss from hurricane damage		(1,123)		(2,704)		(8,628)
Miscellaneous income, net		371		198		1,349
Other income, net		1,329		4,133		1,152
Total other income, net	$	12,731	$	4,862	$	1,462

Investment Income, Net

Interest and dividend income includes interest income accrued or received on the Company’s U.S. Treasury Bills, corporate debt securities, commercial paper and money market funds, and dividend income received from the Company’s investment in preferred stock. Accretion income includes the amortization of the premium or accretion of discount related to the Company’s available-for-sale securities, which is amortized based on an effective interest rate method over the term of the available-for-sale securities. Net realized (loss) gain on the sale of investments include the gains or losses recognized on the sale of available-for-sale and equity securities prior to maturity. Other-than-temporary impairment loss includes impairments related to the Company’s corporate debt securities for the year ended December 31, 2018. Unrealized loss on investments, net includes unrealized gains or losses on investments – equity securities.

Interest income from investments in SPEs primarily includes interest earned on the investments held by Panama City Timber Finance Company, LLC, which is used to pay the interest expense for Senior Notes held by Northwest Florida Timber Finance, LLC.

Interest Expense

Interest expense includes interest incurred related to the Company’s Senior Notes issued by Northwest Florida Timber Finance, LLC, project financing, CDD debt and finance leases. Borrowing costs, including the discount and issuance costs for the Senior Notes issued by Northwest Florida Timber Finance, LLC, are amortized based on the effective interest method at an effective rate of 4.9%.

During 2020, 2019 and 2018 the Company capitalized $1.1 million, $0.6 million and $0.2 million, respectively, in interest related to projects under development or construction. These amounts are included within investment in real estate, net on the Company’s consolidated balance sheets.

Gain on Land Contribution to Equity Method Investment

Gain on land contribution to equity method investment for the year ended December 31, 2020 includes a gain of $15.3 million on land and $0.4 million on additional infrastructure improvements contributed to the Company’s unconsolidated Latitude Margaritaville Watersound JV. The $15.3 million gain on land contributed to the Latitude Margaritaville Watersound JV is comprised of $16.6 million for the present value of the land contribution, net of $1.3 million cost basis. The present value of the land contribution was based on the Company’s best estimate of the prevailing market rates for the source of credit using an imputed interest rate of 5.75%, the timing of home sales and an additional performance obligation to provide for infrastructure improvements in the vicinity of the contributed land. The year ended December 31, 2020 also includes a gain of $4.3 million on land and mitigation credits contributed to the Company’s unconsolidated Sea Sound Apartments JV. Gain on land contribution to equity method investment for the year ended December 31, 2019 includes a gain of $0.8 million on land contributed to the Company’s unconsolidated Busy Bee JV and a gain of $1.5 million on land and mitigation credits contributed to the Company’s unconsolidated Pier Park TPS JV. See Note 4. Joint Ventures for additional information.

Other Income, Net

Other income, net primarily includes income from the Company’s retained interest investments, gain on insurance recovery, loss from hurricane damage and other income and expense items.

The Company records the accretion of investment income from its retained interest investment over the life of the retained interest using the effective yield method with rates ranging from 3.7% to 11.3%.

During the year ended December 31, 2020 the Company had a $0.7 million gain on insurance recovery and incurred $1.1 million of loss from hurricane damage related to Hurricane Michael. During the year ended December 31, 2019 the company had a $5.3 million gain on insurance recovery and incurred $2.7 million of loss from hurricane damage related to Hurricane Michael. The year ended December 31, 2018 includes a $7.2 million gain on insurance recovery and $8.6 million of loss from hurricane damage, which includes $7.3 million for loss on disposal of assets related to damage and $1.3 million of expenses related to Hurricane Michael. See Note 7. Hurricane Michael for additional information.

Miscellaneous income, net for the year ended December 31, 2018 primarily consists of $2.2 million of income related to the final distribution from the Company’s unconsolidated ALP JV, offset by $0.6 million for a homeowners’ association settlement related to one of the Company’s residential communities.