Other Income, Net

3 Months Ended

Mar. 31, 2021

Other Expense, Net

Other Income, Net

16. Other Expense, Net

Other expense, net consists of the following:

	Three Months Ended
	March 31,
	2021		2020
Investment income, net
Interest and dividend income	$	12	$	1,043
Accretion income		12		17
Net realized gain (loss) on the sale of investments		17		(48)
Unrealized loss on investments, net		(1,049)		(4,761)
Interest income from investments in SPEs		2,043		2,046
Interest earned on notes receivable and other interest		160		94
Total investment income (loss), net		1,195		(1,609)
Interest expense
Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE		(2,205)		(2,202)
Other interest expense		(1,466)		(1,143)
Total interest expense		(3,671)		(3,345)
Gain on contribution to equity method investment		120		4,277
Other income (expense), net
Accretion income from retained interest investments		361		344
Gain on insurance recovery		866		—
Loss from hurricane damage		(7)		(55)
Miscellaneous income (expense), net		74		(34)
Other income, net		1,294		255
Total other expense, net	$	(1,062)	$	(422)

Investment Income, Net

Interest and dividend income includes interest income accrued or received on the Company’s investments. 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 gain (loss) on the sale of investments include the gains or losses recognized on the sale of available-for-sale and equity securities prior to maturity. 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 the three months ended March 31, 2021 and 2020 the Company capitalized $0.4 million and $0.1 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 condensed consolidated balance sheets.

Gain on Contribution to Equity Method Investment

Gain on contribution to equity method investment for the three months ended March 31, 2021 includes a gain of $0.1 million on additional infrastructure improvements contributed to the Company’s unconsolidated Latitude Margaritaville Watersound JV. The three months ended March 31, 2020 includes a gain of $4.3 million on land and mitigation credits contributed to the Company’s unconsolidated Sea Sound Apartments 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 11.4%.

During the three months ended March 31, 2021, the Company had a gain on insurance recovery of $0.9 million and incurred less than $0.1 million of loss from hurricane damage related to Hurricane Michael. During the three months ended March 31, 2020, the Company did not have any gain on insurance recovery, but incurred $0.1 million of loss from hurricane damage related to Hurricane Michael. See Note 7. Hurricane Michael for additional information.