Other Income, Net

3 Months Ended

Mar. 31, 2024

Other Income, Net

Other Income, Net

16. Other Income, Net

Other income, net consists of the following:

	Three Months Ended
	March 31,
	2024		2023
Investment income, net
Interest, dividend and accretion income	$	840	$	461
Interest income from investments in SPEs		2,003		2,003
Interest earned on notes receivable and other interest		598		457
Total investment income, net		3,441		2,921
Interest expense
Interest incurred for project financing and other interest expense		(6,337)		(3,997)
Interest expense and amortization of discount and issuance costs for Senior Notes issued by SPE		(2,216)		(2,212)
Total interest expense		(8,553)		(6,209)
Gain on contributions to unconsolidated joint ventures		14		530
Equity in income from unconsolidated joint ventures		7,360		3,663
Other income (expense), net
Accretion income from retained interest investments		—		394
Miscellaneous (expense) income, net		(463)		319
Other (expense) income, net		(463)		713
Total other income, net	$	1,799	$	1,618

Investment Income, Net

Interest, dividend and accretion income includes interest income accrued or received on the Company’s cash, 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.

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 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 the three months ended March 31, 2024, the Company did not capitalize interest related to projects under development or construction. During the three months ended March 31, 2023, the Company capitalized $1.3 million 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 months ended March 31, 2024 and 2023, include a gain of less than $0.1 million and $0.5 million, respectively, on additional infrastructure improvements contributed to the Company’s unconsolidated Latitude Margaritaville Watersound JV. See Note 4. Joint Ventures for additional information.

Equity in Income from Unconsolidated Joint Ventures

Equity in income 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 from unconsolidated joint ventures includes $8.3 million and $3.9 million of income related to the Latitude Margaritaville Watersound JV during the three months ended March 31, 2024 and 2023, respectively. See Note 4. Joint Ventures for additional information.

Other (Expense) Income, Net

Other (expense) income, net primarily includes income from the Company’s retained interest investments and other income and expense items. The Company had a beneficial interest in a bankruptcy-remote qualified SPE used in the installment sale monetization of certain sales of forestry real estate in 2008. 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.

Miscellaneous (expense) income, net during the three months ended March 31, 2024, includes $0.5 million net loss on disposal of assets. Miscellaneous (expense) income, net during the three months ended March 31, 2023, includes a $0.5 million gain on retained interest investment.