Other Income, Net

6 Months Ended

Jun. 30, 2021

Other Income, Net

Other Income, Net

16. Other Income, Net

Other income, net consists of the following:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Investment income, net
Interest and dividend income	$	1	$	67	$	13	$	1,111
Accretion income		26		30		38		47
Net realized gain (loss) on the sale of investments		—		—		17		(48)
Unrealized loss on investments, net		(960)		(142)		(2,010)		(4,903)
Interest income from investments in SPEs		2,029		2,045		4,072		4,091
Interest earned on notes receivable and other interest		191		55		352		148
Total investment income, net		1,287		2,055		2,482		446
Interest expense
Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE		(2,206)		(2,203)		(4,412)		(4,405)
Other interest expense		(1,648)		(1,187)		(3,113)		(2,329)
Total interest expense		(3,854)		(3,390)		(7,525)		(6,734)
Gain on contribution to equity method investment		3,169		15,338		3,290		19,616
Other income (expense), net
Accretion income from retained interest investments		376		340		737		685
Gain on insurance recovery		518		—		1,384		—
Loss from hurricane damage		(8)		(447)		(15)		(502)
Miscellaneous income, net		86		246		160		210
Other income, net		972		139		2,266		393
Total other income, net	$	1,574	$	14,142	$	513	$	13,721

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 June 30, 2021 and 2020, the Company capitalized $0.3 million and $0.2 million, respectively, in interest related to projects under development or construction. During the six months ended June 30, 2021 and 2020, the Company capitalized $0.7 million and $0.3 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 and six months ended June 30, 2021, includes a gain of $3.1 million on land contributed to the Company’s unconsolidated Watersound Fountains Independent Living JV. The three and six months ended June 30, 2021, also includes a gain of $0.1 million and $0.2 million, respectively, on additional infrastructure improvements contributed to the Company’s unconsolidated Latitude Margaritaville Watersound JV. Gain on contribution to equity method investment for the three and six months ended June 30, 2020, includes a gain of $15.3 million on land contributed to the Company’s unconsolidated Latitude Margaritaville Watersound JV. The six months ended June 30, 2020, also 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 and six months ended June 30, 2021, the Company had a gain on insurance recovery of $0.5 million and $1.4 million, respectively, and incurred loss from hurricane damage less than $0.1 million, during each period, related to Hurricane Michael. During the three and six months ended June 30, 2020, the Company did not have any gain on insurance recovery, but incurred $0.4 million and $0.5 million, respectively, of loss from hurricane damage related to Hurricane Michael. See Note 7. Hurricane Michael for additional information.