Other Income, Net

12 Months Ended

Dec. 31, 2023

Other Income, Net

Other Income, Net

18. Other Income, Net

Other income (expense) consists of the following:

	Year Ended December 31,
	2023		2022		2021
Investment income, net
Interest, dividend and accretion income	$	2,856	$	793	$	157
Net realized gain on the sale of investments		—		—		17
Unrealized loss on investments, net		—		(26)		(1,872)
Interest income from investments in SPEs		8,012		8,012		8,078
Interest earned on notes receivable and other interest		2,414		1,083		874
Total investment income, net		13,282		9,862		7,254
Interest expense
Interest incurred for project financing and other interest expense		(21,762)		(9,542)		(7,027)
Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE		(8,856)		(8,841)		(8,827)
Total interest expense		(30,618)		(18,383)		(15,854)
Gain on contributions to unconsolidated joint ventures		718		2,738		3,558
Equity in income (loss) from unconsolidated joint ventures		22,701		25,986		(865)
Other income (expense), net
Accretion income from retained interest investments		2,594		1,671		1,532
Gain on insurance recoveries		—		9,835		4,853
Loss from hurricane damage		—		(51)		(56)
Miscellaneous income, net		651		1,492		3,852
Other income, net		3,245		12,947		10,181
Total other income, net	$	9,328	$	33,150	$	4,274

Investment Income, Net

Interest, dividend and accretion income includes interest income accrued or received on the Company’s cash equivalents and 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 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. See Note 6. Financial Instruments and Fair Value Measurements for additional information.

Interest earned on the Company’s notes receivable and other interest includes interest earned on notes receivable and on the Company’s unimproved land contribution to the unconsolidated Latitude Margaritaville Watersound JV as home sales are transacted in the community. See Note 4. Joint Ventures and Note 8. Other Assets for additional information.

Interest Expense

Interest expense includes interest incurred related to the Company’s project financing, Senior Notes issued by Northwest Florida Timber Finance, LLC, 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%. See Note 6. Financial Instruments and Fair Value Measurements for additional information.

During 2023, 2022 and 2021 the Company capitalized $2.7 million, $3.0 million and $1.0 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 during 2023, 2022 and 2021, include a gain of $0.7 million, $0.9 million and $0.5 million, respectively, on additional infrastructure improvements contributed to the Company’s unconsolidated Latitude Margaritaville Watersound JV. Gain on contributions to unconsolidated joint ventures during 2022, also include a gain of $1.4 million on land and impact fees contributed to the Company’s unconsolidated Pier Park RI JV and 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 during 2021, also include a gain of $3.1 million on land contributed to the Company’s unconsolidated Watersound Fountains Independent Living 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. Equity in income (loss) from unconsolidated joint ventures includes $23.6 million and $3.9 million of income during 2023 and 2022, respectively, and $1.9 million 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. 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 includes $21.7 million during 2022 related to the Company’s proportionate share of the gain on sale. 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. Prior to optional prepayment, in full, of the installment notes in August 2023, the Company recorded the accretion of investment income from its retained interest investment over the life of the retained interest using the effective yield method. See Note 8. Other Assets for additional information. During 2022 and 2021, the Company had a gain on insurance recovery of $9.7 million and $4.9 million, respectively, and incurred loss from hurricane damage of less than $0.1 million, during each period, related to Hurricane Michael. In November 2022, the Company closed out the insurance claim related to Hurricane Michael.

Miscellaneous income, net during the year ended December 31, 2023 and 2021, includes $1.1 million and $3.6 million, respectively, 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. The Company did not receive income related to the Florida Division of Emergency Management’s TRBG program during 2022. The Company has met all requirements related to the TRBG program as of December 31, 2023. Miscellaneous income, net during 2023 and 2022, also includes income of $0.4 million and $1.0 million, respectively, related to a gain on retained interest investment. Miscellaneous income, net during 2023, also includes $0.6 million of expense for cleanup of damaged timber as a result of Hurricane Michael. Miscellaneous income, net also includes $2.6 million and $0.9 million in 2022 and 2021, 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.