Other Income, Net

12 Months Ended

Dec. 31, 2022

Other Income, Net

Other Income, Net

18. Other Income, Net

Other income (expense) consists of the following:

	Year Ended December 31,
	2022		2021		2020
Investment income, net
Interest, dividend and accretion income	$	793	$	157	$	1,194
Net realized gain (loss) on the sale of investments		—		17		(48)
Unrealized loss on investments, net		(26)		(1,872)		(4,688)
Interest income from investments in SPEs		8,012		8,078		8,180
Interest earned on notes receivable and other interest		1,083		874		345
Total investment income, net		9,862		7,254		4,983
Interest expense
Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE		(8,841)		(8,827)		(8,813)
Other interest expense		(9,542)		(7,027)		(4,751)
Total interest expense		(18,383)		(15,854)		(13,564)
Gain on contributions to unconsolidated joint ventures		2,738		3,558		19,983
Equity in income (loss) from unconsolidated joint ventures		25,986		(865)		(666)
Other income (expense), net
Accretion income from retained interest investments		1,671		1,532		1,391
Gain on insurance recoveries		9,835		4,853		690
Loss from hurricane damage		(51)		(56)		(1,123)
Miscellaneous income, net		1,492		3,852		371
Other income, net		12,947		10,181		1,329
Total other income, net	$	33,150	$	4,274	$	12,065

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 (loss) on the sale of investments includes 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. 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 2022, 2021 and 2020 the Company capitalized $3.0 million, $1.0 million and $1.1 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 consolidated balance sheets.

Gain on Contributions to Unconsolidated Joint Ventures

Gain on contributions to unconsolidated joint ventures for the year ended December 31, 2022, includes a gain of $1.4 million on land and impact fees contributed to the Company’s unconsolidated Pier Park RI JV. The year ended December 31, 2022, also includes a gain of $0.4 million on land contributed to the Company’s unconsolidated Electric Cart Watersound JV. Gain on contributions to unconsolidated joint ventures for the year ended December 31, 2021, includes a gain of $3.1 million on land contributed to the Company’s unconsolidated Watersound Fountains Independent Living JV. Gain on contributions to unconsolidated joint ventures also includes a gain of $0.9 million and $0.5 million during 2022 and 2021, respectively, on additional infrastructure improvements contributed to the Company’s unconsolidated Latitude Margaritaville Watersound JV. Gain on contributions to unconsolidated joint ventures for the year ended December 31, 2020, includes a gain of $15.7 million on land and additional infrastructure improvements contributed to the Company’s unconsolidated Latitude Margaritaville Watersound JV. 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 JV. See Note 4. Joint Ventures for additional information.

Equity in Income (Loss) from Unconsolidated Joint Ventures

Equity in income (loss) from unconsolidated joint ventures includes the Company’s proportionate share of earnings or losses of unconsolidated JVs accounted for by the equity method. In November 2022, the Sea Sound JV sold its assets to an unrelated third party for $92.5 million, resulting in a total gain on sale of $36.1 million. Equity in income (loss) from unconsolidated joint ventures during 2022 includes $21.7 million related to the Company’s proportionate share of the gain on sale. Equity in income (loss) from unconsolidated joint ventures during 2022 also includes $3.9 million of income, compared to $1.9 of loss during 2021, related to the Latitude Margaritaville Watersound JV. The Latitude Margaritaville Watersound JV began completing home sale transactions in the fourth quarter of 2021. 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 recoveries, loss from hurricane damage and other income and expense items.

The Company records the accretion of investment income from its retained interest investments over the life of the retained interest using the effective yield method with rates ranging from 4.8% to 12.8%.

During the years ended December 31, 2022, 2021 and 2020, the Company had a gain on insurance recovery of $9.7 million, $4.9 million and $0.7 million, respectively, and incurred loss from hurricane damage of less than $0.1 million in both 2022 and 2021 and $1.1 million in 2020 related to Hurricane Michael. In November 2022, the Company closed out the insurance claim related to Hurricane Michael and therefore will not receive additional proceeds in future periods.

Miscellaneous income, net during 2022, includes income of $1.0 million related to a gain on retained interest investment. Miscellaneous income, net includes $2.6 million, $0.9 million and $0.7 million in 2022, 2021 and 2020, respectively, received from the Pier Park CDD for repayment of subordinated notes, which have been fully repaid. Miscellaneous income, net during 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 year ended December 31, 2021, includes $3.6 million the Company received from the Florida Division of Emergency Management’s TRBG program for recovery of lost income related to timber crop that was destroyed as a result of Hurricane Michael.