Other Income, Net

9 Months Ended

Sep. 30, 2022

Other Income, Net

Other Income, Net

17. Other Income, Net

Other income (expense), net consists of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Investment income, net
Interest, dividend and accretion income	$	355	$	52	$	732	$	103
Net realized gain on the sale of investments		—		—		—		17
Unrealized gain (loss) on investments, net		31		63		91		(1,947)
Interest income from investments in SPEs		2,003		2,003		6,009		6,075
Interest earned on notes receivable and other interest		346		213		699		565
Total investment income, net		2,735		2,331		7,531		4,813
Interest expense
Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE		(2,211)		(2,207)		(6,629)		(6,619)
Other interest expense		(2,516)		(1,907)		(6,322)		(5,020)
Total interest expense		(4,727)		(4,114)		(12,951)		(11,639)
Gain on contributions to unconsolidated joint ventures		1,430		—		2,001		3,290
Other income (expense), net
Accretion income from retained interest investments		412		392		1,262		1,129
Gain on insurance recovery		875		2,540		4,186		3,924
Loss from hurricane damage		(7)		(11)		(51)		(26)
Miscellaneous income, net		848		4,408		648		4,568
Other income, net		2,128		7,329		6,045		9,595
Total other income, net	$	1,566	$	5,546	$	2,626	$	6,059

Investment Income, Net

Interest, dividend and accretion income includes interest income accrued or received on the Company’s investments and 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 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 gain (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. Interest expense also includes amortization of debt discount and premium and debt issuance costs. 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 September 30, 2022 and 2021, the Company capitalized $0.9 million and $0.2 million, respectively, in interest related to projects under development or construction. During the nine months ended September 30, 2022 and 2021, the Company capitalized $1.8 million and $0.9 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 Contributions to Unconsolidated Joint Ventures

Gain on contributions to unconsolidated joint ventures for the three and nine months ended September 30, 2022, include a gain of $1.4 million on land and impact fees contributed to the Company’s unconsolidated Pier Park RI JV. The three and nine months ended September 30, 2022, also include 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. The nine months ended September 30, 2022, also include a gain of $0.4 million on land contributed to the Company’s unconsolidated Electric Cart Watersound JV. The Company did not have any gain on contributions to unconsolidated joint ventures during the three months ended September 30, 2021. The nine months ended September 30, 2021, include a gain of $3.1 million on land contributed to the Company’s unconsolidated Watersound Fountains Independent Living JV. The nine months ended September 30, 2021, also include a gain of $0.2 million on additional infrastructure improvements contributed to the Company’s unconsolidated Latitude Margaritaville Watersound 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 4.8% to 12.7%. During the three and nine months ended September 30, 2022, the Company had a gain on insurance recovery of $0.9 million and $4.2 million, respectively, and incurred loss from hurricane damage of less than $0.1 million, during each period, related to Hurricane Michael. During the three and nine months ended September 30, 2021, the Company had a gain on insurance recovery of $2.5 million and $3.9 million, respectively, and incurred loss from hurricane damage of less than $0.1 million, during each period, related to Hurricane Michael. See Note 7. Hurricane Michael for additional information.

Miscellaneous income, net during the three and nine months ended September 30, 2022, includes income of $0.3 million and $1.0 million, respectively, related to a gain on retained interest investment. Miscellaneous income, net includes $0.8 million and $0.9 million during the three months ended September 30, 2022 and 2021, respectively, and $1.8 million and $0.9 million during the nine months ended September 30, 2022 and 2021, respectively, received from the Pier Park CDD for repayment of subordinated notes. Miscellaneous income, net during the nine months ended September 30, 2022, also includes expenses of $1.1 million for design costs no longer pursued and $0.6 million for a homeowner’s association special assessment. Miscellaneous income, net during the three and nine months ended September 30, 2021, includes $3.6 million the Company received from the Florida Division of Emergency Management’s Florida Timber Recovery Block Grant Program (“TRBG”) for recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael. See Note 7. Hurricane Michael for additional information.